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Registration Nos. 002-65539/811-2958

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM N 1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

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Post Effective Amendment No. 89 /X/

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and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/

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Amendment No. 72 /X/

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T. Rowe Price International Funds, Inc.

Exact Name of Registrant as Specified in Charter

100 East Pratt Street, Baltimore, Maryland 21202

Address of Principal Executive Offices

410 345 2000

Registrant's Telephone Number, Including Area Code

Henry H. Hopkins

100 East Pratt Street, Baltimore, Maryland 21202

Name and Address of Agent for Service

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Approximate Date of Proposed Public Offering March 1, 2005

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It is proposed that this filing will become effective (check appropriate box):

/ / Immediately upon filing pursuant to paragraph (b)

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/ X / On March 1, 2005 , pursuant to paragraph (b)

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/ / 60 days after filing pursuant to paragraph (a)(1)

/ / On (date) , pursuant to paragraph (a)(1)

/ / 75 days after filing pursuant to paragraph (a)(2)

/ / On (date) , pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

/ / This post effective amendment designates a new effective date for a previously filed post effective amendment.

March 1, 2005

Prospectus

T. Rowe Price

International Funds — Equity
Portfolios

A choice of global, international, and
regional stock funds for investors
seeking long-term capital growth by
diversifying beyond U.S. borders.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

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1	About the Funds
	Objective, Strategy, Risks, and Expenses	1
	Other Information About the Funds	16

2	Information About Accounts in T. Rowe Price Funds
	Pricing Shares and Receiving Sale Proceeds	18
	Useful Information on Distributions and Taxes	24
	Transaction Procedures and Special Requirements	30
	Account Maintenance and Small Account Fees	33

3	More About the Funds
	Organization and Management	34
	Understanding Performance Information	37
	Investment Policies and Practices	38
	Disclosure of Fund Portfolio Information	43
	Financial Highlights	44

4	Investing With T. Rowe Price
	Account Requirements and Transaction Information	55
	Opening a New Account	56
	Purchasing Additional Shares	58
	Exchanging and Redeeming Shares	58
	Rights Reserved by the Funds	60
	Information About Your Services	61
	T. Rowe Price Brokerage	64
	Investment Information	65
	T. Rowe Price Privacy Policy	66

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T. Rowe Price International Funds, Inc.

T. Rowe Price Emerging Europe & Mediterranean Fund

T. Rowe Price Emerging Markets Stock Fund

T. Rowe Price European Stock Fund

T. Rowe Price Global Stock Fund

T. Rowe Price International Discovery Fund

T. Rowe Price International Growth & Income Fund

T. Rowe Price International Stock Fund

T. Rowe Price Japan Fund

T. Rowe Price Latin America Fund

T. Rowe Price New Asia Fund

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T. Rowe Price International, Inc. managed $23.6 billion in foreign stocks and bonds as of December 31, 2004 , through its offices in Baltimore, London, Singapore, Hong Kong, Buenos Aires, and Paris.

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Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve, or any other government agency, and are subject to investment risks, including possible loss of the principal amount invested.

About the Funds 1

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objective, strategy, risks, and expenses

What are each fund`s objectives and principal investment strategies?

Worldwide funds:

Emerging Markets Stock Fund

Objective: : The fund seeks long-term growth of capital through investments primarily in the common stocks of companies located ( or with primary operations ) in emerging markets.

Strategy: : T he fund expects to make substantially all of its investments (normally at least 80% of net assets) in emerging markets in Latin America, Asia, Europe, Africa, and the Middle East. Stock selection reflects a growth style. An emerging market includes any country defined as emerging or developing by the International Bank for Reconstruction and Development (World Bank), the International Finance Corporation, or the United Nations.

Countries in which the fund may invest are listed below and others will be added as opportunities develop:

Asia: China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, and Vietnam.

Latin America: Argentina, Belize, Brazil, Chile, Colombia, Mexico, Panama, Peru, and Venezuela.

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Europe: Croatia, Czech Republic, Estonia, Greece, Hungary, Kazakhstan, Latvia, Lithuania, Poland, Romania, Russia, Slovakia, Slovenia, Turkey , and Ukraine .

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Africa and the Middle East: Botswana, Egypt, Israel, Jordan, Mauritius, Morocco, Nigeria, South Africa, Tunisia, and Zimbabwe.

Global Stock Fund

Objective: The fund seeks long-term growth of capital through investments primarily in the common stocks of established companies throughout the world, including the U.S.

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Strategy: We will diversify broadly by investing in a variety of industries in developed and, to a lesser extent, emerging markets. Normally, the fund will invest in at least five countries, one of which will be the U.S. Stock selection reflects a growth style. While we can purchase stocks without regard to a company`s market capitalization (shares outstanding multiplied by share price), investments will generally be in large and, to a lesser extent, medium-sized companies. The percentage of assets invested in U.S. and foreign stocks will normally be at least 80% of net assets and will vary over time according to the manager`s outlook.

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International Discovery Fund

Objective: The fund seeks long-term growth of capital through investments primarily in the common stocks of rapidly growing, small - to medium-sized companies outside the U.S.

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Strategy: The fund expect s to invest substantially all of its assets outside the U.S. and to diversify broadly among developed and emerging countries throughout the world. Stock selection reflects a growth style. The fund will emphasize small - to medium-sized companies. Depending on conditions, the fund`s portfolio should be com posed of at least 10 countries and 100 different companies. Normally, at least 80% of the fund`s net assets will be invested in stocks.

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International Growth & Income Fund

Objective: : The fund seeks long-term growth of capital and reasonable income through investments primarily in the common stocks of well-established, dividend-paying non-U.S. companies.

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Strategy: : We expect to invest substantially all of the fund`s assets outside the U.S. and to diversify broadly, primarily among the world`s developed countries. The fund will invest primarily (at least 65% of total assets) in the stocks of large dividend-paying , well-established companies that have favorable prospects for capital appreciation, as determined by T. Rowe Price International , Inc. ("T. Rowe Price International") . Investments in emerging markets will be modest and limited to more mature developing countries. Our investing style is value- oriented, although we also look for earnings growth potential and catalysts for value to be realized. Country and sector allocations are driven both by stock selection and our assessment of top-down, fundamental prospects.

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International Stock Fund

Objective: : The fund seeks long-term growth of capital through investments primarily in the common stocks of established, non-U.S. companies.

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Strategy: : The fund expect s to invest substantially all of its assets in stocks outside the U.S. and to diversify broadly among developed and emerging countries throughout the world. Stock selection reflects a growth style. We may purchase the stocks of companies of any size, but our focus will typically be on large and, to a lesser extent, medium-sized companies. Normally, at least 80% of the fund`s net assets will be invested in stocks.

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Regional or country funds:

Emerging Europe & Mediterranean Fund

Objective: The fund seeks long-term growth of capital through investments primarily in the common stocks of companies in the emerging market countries of Europe and the Mediterranean region.

Strategy: The fund expects to make substantially all of its investments (normally at least 80% of net assets) in the emerging markets of Europe, including Eastern Europe and the former Soviet Union, and the Mediterranean region, including the Middle East and North Africa. Normally, seven to 12 countries will be represented in the portfolio. The fund may invest in common stocks in the countries listed below, as well as others as their markets develop:

Primary Emphasis: Croatia, Czech Republic, Egypt, Estonia, Greece, Hungary, Israel, Poland, Russia, and Turkey.

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Others: Bulgaria, Jordan, Kazakhstan, Latvia, Lebanon, Lithuania, Morocco, Romania, Slovakia, Slovenia, Tuni sia , and Ukraine .

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The fund may purchase the stocks of companies of any size, but our focus will typically be on the large r and, to a lesser extent, medium-sized companies in the region s . The fund seeks to take advantage of opportunities arising from such trends as privatization, the reduction of trade barriers, and progress toward Economic and Monetary Union in Europe. The fund is registered as "nondiversified," meaning it may invest a greater portion of assets in a single company and own more of the company`s voting securities than is permissible for a "diversified" fund. Depending on conditions, the fund`s portfolio should be composed of at least 30 to 50 different companies. Stock selection reflects a growth style.

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European Stock Fund

Objective: The fund seeks long-term growth of capital through investments primarily in the common stocks of European companies. Current income is a secondary objective.

Strategy: Normally, at least five countries will be represented in the portfolio. The fund expects to make substan tially all of its investments (normally at least 80% of net assets) in stocks of companies located in the countries listed below, as well as others as their markets develop:

Primary Emphasis: Austria, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and United Kingdom.

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Others: Belgium, Czech Republic, Estonia, Greece, Hungary, Israel, Kazakhstan, Poland, Russia, and Turkey.

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Stock selection reflects a growth style. We also seek to take advantage of opportunities arising from such trends as privatization, the reduction of trade barriers, progress toward E conomic and M onetary U nion, and the potential growth of the emerging economies of Eastern Europe.

Japan Fund

Objective: The fund seeks long-term growth of capital through investments in common stocks of companies located (or with primary operations) in Japan.

Strategy: T he fund expects to make substantially all of its investment s (normally at least 80% of net assets) across a wide range of Japanese industries and companies. Stock selection reflects a growth style.

Note: For special pricing and transaction information about the Japan Fund, please see Pricing Shares and Receiving Sale Proceeds in Section 2.

Latin America Fund

Objective: The fund seeks long-term growth of capital through investments primarily in the common stocks of companies located (or with primary operations) in Latin America.

Strategy: T he fund expects to make substantially all of its investments (normally at least 80% of net assets) in Latin American companies. At least four countries should be represented at any time. Investments may be made in the countries below, as well as others as their markets develop:

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Primary Emphasis: Argentina, Brazil, Chile, Mexico, Peru, and Venezuela.

Others: Belize, Colombia, Ecuador, and Guatemala.

Stock selection reflects a growth style. We may make substantial investments (at times more than 25% of total assets) in the telephone companies of various Latin American countries. These utilities play a critical role in a country`s economic development. The fund is registered as "nondiversified," meaning it may invest a greater portion of assets in a single company and own more of the company`s voting securities than is permissible for a "diversified" fund. In some markets, such as Brazil, the fund may purchase preferred stock because of its liquid ity advantage over common stock.

New Asia Fund

Objective: The fund seeks long-term growth of capital through investments in companies located (or with pri mary operations) in Asia (excluding Japan).

Strategy: The fund expects to make substantially all of its investments (normally at least 80% of net assets) in the countries listed below, as well as others as their markets develop:

Primary Emphasis: China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, and Thailand.

Others: Pakistan and Vietnam.

Stock selection reflects a growth style. The fund is registered as "nondiversified," meaning it may invest a greater portion of assets in a single company and own more of the company`s voting securities than is permissible for a "diversified" fund.

All funds (excluding International Growth & Income Fund):

The funds use a growth investing approach in their individual investment
strategies.

Growth Investing

T. Rowe Price International employs in-depth fundamental research in an effort to identify companies capable of achieving and sustaining above-average, long-term earnings growth. We seek to purchase such stocks at reason able prices in relation to present or anticipated earnings, cash flow, or book value, and valuation factors often influence our allocations among large-, mid-, or small-cap shares.

While we invest with an awareness of the global economic backdrop and our outlook for industry sectors and individual countries, bottom-up stock selection is the focus of our decision-making. Country allocation is driven largely by stock selection, though we may limit investments in markets that appear to have poor overall pros pects.

In selecting stocks, we generally favor companies with one or more of the following characteristics:

leading market position;

attractive business niche;

strong franchise or monopoly;

technological leadership or proprietary advantages;

seasoned management;

earnings growth and cash flow sufficient to support growing dividends; and

healthy balance sheet with relatively low debt.

Table 1 International Funds Comparison Guide

Fund	Geographic focus	Company emphasis	Expected risk relative to one another

Emerging Europe & Mediterranean	Europe and the Mediterranean region	All sizes	Highest
Emerging Markets Stock	Worldwide (excluding U.S.)	All sizes	Highest
European Stock	Europe (including Eastern Europe)	All sizes	Moderate
Global Stock	Worldwide (including U.S.)	Large, well established	Lower
International Discovery	Worldwide (excluding U.S.)	Small - to medium-sized	Higher
International Growth & Income	Worldwide (excluding U.S.)	Large, well established	Moderate
International Stock	Worldwide (excluding U.S.)	Large, well established	Moderate
Japan	Japan	All sizes	Higher
Latin America	Latin America	All sizes	Highest
New Asia	Far East and Pacific Basin (excluding Japan)	All sizes	Highest

In addition to their investments in common stocks (which will normally comprise 80% of fund net assets), t he funds may also purchase other securities, including futures and options, in keeping with each fund`s objectives.

Each fund may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities.

What are the main risks of investing in the funds?

The risk profile of the funds varies with the investment style they pursue, their geographic focus, and whether they invest in developed markets, emerging markets, or both. Even investments in countries with highly devel oped economies are subject to significant risks.

Funds that invest overseas generally carry more risk than funds that invest strictly in U.S. assets. Some particular risks affecting these funds include the following:

Currency risk This refers to a decline in the value of a foreign currency versus the U.S. dollar, which reduces the dollar value of securities denominated in that currency. The overall impact on a fund`s holdings can be signifi cant, unpredictable, and long lasting , depending on the currencies represented in the portfolio and how each one appreciates or depreciates in relation to the U.S. dollar and whether currency positions are hedged. Under normal conditions, the funds do not engage in extensive foreign currency hedging programs. Further, exchange rate movements are volatile , and it is not possible to effectively hedge the currency risks of many developing countries.

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Geographic risk (Japan and regional funds) Funds that are less diversified across geographic regions, countries, industries, or individual companies are generally riskier than more diversified funds. F or example, investors in the Japan Fund are fully exposed to that country`s economic cycles, stock market valuations, and currency exchange rates, which could increase its risks compared with a more diversified fund. The economies and finan cial markets of certain regions — such as Latin America, Asia, and Europe and the Mediterranean region — can be interdependent and may all decline at the same time.

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Emerging market risk (Emerging Europe & Mediterranean, Emerging Markets Stock, Latin America, New Asia; other funds to a lesser degree, except Japan) Investments in emerging markets are subject to abrupt and severe price declines. The economic and political structures of developing nations, in most cases, do not compare favorably with the U.S. or other developed countries in terms of wealth and stability, and their financial markets often lack liquidity. These economies are less well developed and can be overly reliant on particular industries and more vulnerable to the ebb and flow of international trade, trade barriers, and other protectionist or retaliatory mea sures. Certain countries have legacies and /or periodic episodes of hyperinflation and currency devaluations . Gov ernments in many emerging market countries participate to a significant degree in their economies and securities markets. Investments in countries or regions that have recently begun moving away from central planning and state-owned industries toward free markets should be regarded as speculative. While some countries have made progress in economic growth, liberalization, fiscal discipline, and political and social stability, there is no assur ance these trends will continue. Some countries have histories of instability and upheaval that could cause their governments to act in a detrimental or hostile manner toward private enterprise or foreign investment. Significant external risks currently affect some emerging countries.

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The volatility of emerging markets may be heightened by the actions of a few major investors. For example, sub stantial increases or decreases in cash flows of mutual funds investing in these markets could significantly affect local stock prices and, therefore, fund share prices. These factors make investing in such countries significantly riskier than in other countries and any one of them could cause a fund`s share price to decline.

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Other risks of foreign investing Risks can result from varying stages of economic and political development, dif fering regulatory environments, trading day s , and accounting standards, and higher transaction costs of non- U.S. markets. Investments outside the United States could be subject to governmental actions such as capital or currency controls, nationalization of a company or industry, expropriation of assets, or imposition of high taxes.

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Small- and medium-sized company risk (International Discovery; others to a lesser degree) To the extent each fund invests in small- and mid-capitalization stocks, it is likely to be more volatile than a fund that invests only in large companies. Small and medium-sized companies are generally riskier because they may have limited product lines, capital, and managerial resources. Their securities may trade less frequently and with greater price swings.

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Nondiversified status (Emerging Europe & Mediterranean, Latin America, and New Asia) There is additional risk with each fund that is nondiversified and thus can invest more of its assets in a smaller number of companies. F or example, poor performance by a single large holding of a fund would adversely affect fund performance more than if the fund were invested in a larger number of companies.

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Futures/options risk To the extent each fund uses futures and options, it is exposed to additional volatility and potential losses.

As with all stock funds, each fund`s share price can fall because of weakness in one or more of its primary equity markets, a particular industry, or specific holdings. Stock markets can decline for many reasons, including adverse political or economic developments, changes in investor psychology, or heavy institutional selling. The prospects for an industry or company may deteriorate because of a variety of factors, including disappointing earnings or changes in the competitive environment. In addition, our assessment of companies held in a fund may prove incorrect, resulting in losses or poor performance , even in rising markets.

As with any mutual fund, there can be no guarantee the funds will achieve their objectives.

Each fund`s share price may decline, so when you sell your shares, you may lose money .

How can I tell which fund is most appropriate for me?

Consider your investment goals, your time horizon for achieving them, and your tolerance for risk. Your decision should take into account whether you have any other foreign stock investments. If not, you may wish to invest in a widely diversified fund to gain the broadest exposure to global opportunities. A diversified emerging markets fund may be an appropriate part of your portfolio if you are supplementing existing holdings primarily in devel oped foreign markets. If you seek to supplement a diversified portfolio with a concentrated investment, a regional or single-country fund may be appropriate.

Each fund can be used in both regular and tax-deferred accounts, such as IRAs.

The fund or funds you select should not represent your complete investment program or be used for short-term trading purposes.

How has each fund performed in the past?

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The bar charts showing calendar year returns and the average annual total return s table indicate risk by illustrat ing how much returns can differ from one year to the next and how fund performance compares with that of a comparable market index. Fund past returns (before and after taxes) are not necessarily an indication of future performance.

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The funds can also experience short-term performance swings, as shown by the best and worst calendar quarter returns during the years depicted .

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In addition, the average annual total return s table shows hypothetical after-tax returns to suggest how taxes paid by the shareholder may influence returns. Actual after-tax returns depend on each investor`s situation and may differ from those shown. After-tax returns are not relevant if the shares are held in a tax-deferred account, such as a 401(k) or IRA. During periods of fund losses, the post-liquidation after-tax return may exceed the fund`s other returns because the loss generates a tax benefit that is factored into the result.

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<R> Table 2 Average Annual Total Returns

	Periods ended December 31, 2004
	1 year	5 years	Shorter of 10 years or since inception	Inception date
Emerging Europe & Mediterranean Fund
Return s before taxes	30.01 %	—	11.57 %	8/31/00
Return s after taxes on distributions	30.35	—	11.65
Return s after taxes on distributions and sale of fund shares	19.84	—	10.18
MSCI Emerging Markets Europe and Middle East Index	31.48	—	8.30
Emerging Markets Stock Fund
Return s before taxes	26.98	5.01 %	7.79	3/31/95
Return s after taxes on distributions	28.02	5.37	7.87
Return s after taxes on distributions and sale of fund shares	19.06	4.73	7.05
MSCI Emerging Markets Index	25.95	4.62	4.80
Lipper Emerging Markets Funds Average	24.16	4.68	6.02
European Stock Fund
Return s before taxes	16.42	-0.86	9.98	2/28/90
Return s after taxes on distributions	16.25	-1.44	8.87
Return s after taxes on distributions and sale of fund shares	11.07	-0.94	8.41
MSCI Europe Index	21.39	0.42	10.93
Lipper Europea n Region Funds Average	21.51	1.14	10.16
Global Stock Fund
Return s before taxes	14.40	-1.70	7.80	12/29/95
Return s after taxes on distributions	14.32	-2.01	7.18
Return s after taxes on distributions and sale of fund shares	9.47	-1.55	6.56
MSCI World Index	15.25	-2.05	7.19
Lipper Global Large-Cap Growth Funds Average	12.73	-6.45	5.94 a
International Discovery Fund
Return s before taxes	23.76	1.73	11.72	12/30/88
Return s after taxes on distributions	24.31	0.50	10.62
Return s after taxes on distributions and sale of fund shares	16.04	0.76	9.83
MSCI EAFE Small-Cap Index b	28.14	7.29	2.67
S&P/ Citigroup Non-U.S. Extended Market Index	28.74	6.76	6.99
Lipper International Small /Mid -Cap Growth Funds Average	24.65	0.24	12.58
International Growth & Income Fund
Return s before taxes	23.10	3.65	6.41	12/21/98
Return s after taxes on distributions	22.99	2.97	5.60
Return s after taxes on distributions and sale of fund shares	15.31	2.73	5.07
MSCI EAFE Index	20.70	-0.80	3.41
Lipper International Multi-Cap Value Funds Average	21.63	3.76	7.09 c
International Stock Fund
Return s before taxes	13.89	-4.58	5.07	5/9/80
Return s after taxes on distributions	13.77	-5.18	4.21
Return s after taxes on distributions and sale of fund shares	9.36	-4.02	4.09
MSCI EAFE Index	20.70	-0.80	5.94
Lipper International Large-Cap Growth Funds Average	13.48	-7.63	4.05
Japan Fund
Return s before taxes	16.83	-9.85	-0.73	12/30/91
Return s after taxes on distributions	16.90	-10.46	-1.07
Return s after taxes on distributions and sale of fund shares	11.01	-8.34	-0.77
TSE First Section Index	15.20	-7.79	-3.26
TSE Second Section Index	47.40	2.89	3.23
MSCI Japan Index	15.95	-6.31	-2.18
Lipper Japan ese Funds Average	13.83	-8.83	-0.93
Latin America Fund
Return s before taxes	38.35	9.65	7.99	12/29/93
Return s after taxes on distributions	38.55	9.54	7.76
Return s after taxes on distributions and sale of fund shares	25.75	8.45	6.98
MSCI EM Latin America Index	39.62	9.34	8.49
Lipper Latin America n Funds Average	38.39	7.76	7.30
New Asia Fund
Return s before taxes	18.60	0.56	3.06	9/28/90
Return s after taxes on distributions	20.17	0.95	3.11
Return s after taxes on distributions and sale of fund shares	13.84	0.91	2.79
MSCI All Country Asia Ex-Japan Index d	17.72	-0.24	0.25
MSCI All Country Far East Ex-Japan Index	17.60	-0.86	-0.05
Lipper Pacific Ex-Japan Funds Average	16.50	1.68	3.52

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Returns are based on changes in principal value, reinvested dividends , and capital gain distributions, if any. Returns before taxes do not reflect effects of any income or capital gains taxes. Taxes are computed using the highest federal income tax rate. The after-tax returns reflect the rates applicable to ordinary and qualified dividends and capital gain s effective in 2003 . The returns do not reflect the impact of state and local taxes. Returns after taxes on distributions reflect the taxed return on the payment of dividends and capital gains. Returns after taxes on distributions and sale of fund shares assume the shares were sold at period - end and, therefore, are also adjusted for any capital gains or losses incurred by the shareholder. Market indexes do not include expenses, which are deducted from fund returns, or taxes.

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a Since 12/31/95.

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b Principal return only.

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c Since 12/31/98.

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d The new index reflects the fund`s investments in India.

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MSCI Emerging Markets Europe and Middle East Index is a market capitalization weighted index consisting of about 1 06 securities in s even world markets .

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MSCI Emerging Markets Index is a market capitalization weighted index of over 850 stocks traded in 22 world markets.

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MSCI Europe Index is a market capitalization weighted index of approximately 500 stocks traded in 15 European markets.

MSCI World Index tracks the stocks of approximately 1,300 companies representing the stock markets of 22 countries.

MSCI EAFE Small - Cap Index is a market capitalization weighted index of almost 1,000 small-cap stocks in 21 world markets.

MSCI EAFE Index tracks the stocks of about 1,000 companies in Europe, Australasia, and the Far East (EAFE).

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S&P/ Citigroup Non-U.S. Extended Market Index (EMI) is a small-capitalization subindex of the Citigroup Broad Market Index (BMI). While the BMI measures the performance of the entire universe of securities, the EMI covers the small-cap stock universe.

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The TSE First Section Index is a market capitalization weighted index of about 1,300 of the larger companies on the Tokyo Stock Exchange.

The TSE Second Section Index is a market capitalization weighted index of about 500 of the smaller and newly listed companies on the Tokyo Stock Exchange.

MSCI Japan Index is an unmanaged index of approximately 300 foreign stock prices and reflects the common stock prices of the index companies translated into U.S. dollars, assuming reinvestment of all dividends paid by the index stocks net of any applicable foreign taxes.

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MSCI E M Latin America Index is a market capitalization weighted index of approximately 140 stocks traded in seven Latin American markets.

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MSCI All Country Asia Ex-Japan Index tracks the stocks of developed and emerging countries in Asia, excluding Japan.

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MSCI All Country Far East Ex-Japan Index tracks the stocks of nine Far East countries, excluding Japan.

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What fees and expenses will I pay?

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The funds are 100% no load. The f unds impose a 2% redemption fee, payable to the funds, on shares purchased and held less than 90 days . There are no other fees or charges to buy or sell fund shares, reinvest dividends, or exchange into other T. Rowe Price funds. There are no 12b-1 fees.

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<R> Table 3 Fees and Expenses of the Funds*

Fund	Shareholder fees (fees paid directly from your investment)	Annual fund operating expenses (expenses that are deducted from fund assets)
	Redemption fees a	Management fee	Other expenses	Total annual fund operating expenses	Fee waiver/ expense reimbursement	Net expenses

Emerging Europe & Mediterranean c	2 .00 %	1.0 6 %	0. 69 %	1.75 %	0. 00 % b	1.75 % b
Emerging Markets Stock	2 .00	1.0 6	0. 2 7	1.3 3	—	—
European Stock	2 .00	0.8 1	0. 2 6	1. 07	—	—
Global Stock c	2 .00	0.6 6	0. 64	1. 30	0. 10 b	1.20 b
International Discovery	2 .00	1.0 6	0. 26	1. 32	—	—
International Growth & Income	2 .00	0. 6 6	0.59	1. 25	—	—
International Stock	2 .00	0.6 6	0. 2 6	0. 9 2	—	—
Japan	2 .00	0.8 1	0. 40	1. 21	—	—
Latin America	2 .00	1.0 6	0. 35	1. 41	—	—
New Asia	2 .00	0.8 1	0. 28	1. 09	—	—

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* Redemption proceeds of less than $5,000 sent by wire are subject to a $5 fee paid to the fund. Accounts with less than a $2,000 balance (with certain excep tions) are subject to a $10 fee. See Account Maintenance and Small Account Fees.

a On shares purchased and held for less than 90 days .

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

Fund	Limitation Period	Expense Ratio Limitation	Reimbursement Date

Emerging Europe & Mediterranean	3/1/05 — 2/2 8 /0 7	1.75%	2/28 /0 9
Global Stock	11/1/03 — 2/28/06	1.20%	2/29/08

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c The fund operated under a previous expense limitation for which T. Rowe Price International may be reimbursed.

Example. The following table gives you an idea of how expense ratios may translate into dollars and helps you to compare the cost of investing in these funds with that of other mutual funds. Although your actual costs may be higher or lower, the table shows how much you would pay if operating expenses remain the same, the expense limitations currently in place are not renewed (if applicable), you invest $10,000, earn a 5% annual return, hold the investment for the following periods , and then redeem:

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Fund	1 year	3 years	5 years	10 years
Emerging Europe & Mediterranean	$ 178	$ 551	$ 949	$ 2,062
Emerging Markets Stock	135	421	729	1,601
European Stock	109	340	590	1,306
Global Stock	122	399	700	1,556
International Discovery	134	418	723	1,590
International Growth & Income	127	397	686	1,511
International Stock	94	293	509	1,131
Japan	123	384	665	1,466
Latin America	144	446	771	1,691
New Asia	111	347	601	1,329

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other INFORMATION about the funds

What are some of the potential rewards of investing overseas through the funds?

Investing abroad increases the opportunities available to you. Some foreign countries may have greater potential for economic growth than the U.S. Emerging market, regional, and single-country funds allow investors to seek potentially superior growth in the areas they view as most promising, but with commensurately higher risks. Investing a portion of your overall portfolio in foreign stock funds can enhance your diversification while pro viding the opportunity to boost long-term returns.

How does the portfolio manager try to reduce risk?

The principal tools we use to try to reduce risk are intensive research and limiting exposure to any one industry or company. Currency hedging techniques may be used from time to time.

Portfolio managers keep close watch on individual investments as well as on political and economic trends in each country and region. Holdings are adjusted according to the manager`s analysis and outlook.

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The impact on each fund`s share price from a drop in the price of a particular stock is reduced substantially by investing in a portfolio with dozens of different companies. Likewise, the impact of unfavorable developments in a particular country is reduced when investments are spread among many countries. Investors should pay close attention to how many countries a fund typically expects to invest in, particularly in regard to our regional funds . However, the economies and financial markets of countries in a certain region may be influenced heavily by one another.

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What are the potential rewards of investing in small companies overseas?

In general, small companies are more dynamic and can adapt more quickly than larger ones to changing eco nomic and market conditions, which may help them increase their earnings faster. In addition, the movement of small-company shares is not perfectly correlated with the movements of large-cap stocks. Since many U.S.-based international funds focus on large or medium-sized foreign companies, adding a small-cap international fund could enhance the diversification of a portfolio while providing the opportunity to boost long-term returns.

Important i nformation a bout the International Discovery Fund

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As of March 31, 2003, the International Discovery Fund resumed offering shares to new investors invested directly with T. Rowe Price or through full service Retirement Plan Services. The fund was closed after March 13, 2000, to preserve its ability to invest in a limited universe of rapidly growing, small- to medium-sized com panies outside the U.S . Given changed market conditions, the Adviser and Fund Directors concluded it was in the shareholders` interests to open the fund to new investments. However, the fund continues to remain closed to financial intermediaries that do not currently offer the fund in their program.

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The fund reserves the right , when in the judgement of T. Rowe Price it is not adverse to the fund`s interest, to permit certain types of investors to open new accounts in the fund, to impose further restrictions, or to close the fund to any additional investments, all without notice.

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Is there other information I can review before making a decision?

Investment Policies and Practices in Section 3 discusses various types of portfolio securities the funds may pur chase as well as types of management practices the funds may use.

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You should also review the information in Section 2 that discusses contingent redemption fees for the funds .

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With one quick sign - up, you can take advantage of our Electronic Delivery program and begin to receive updated fund reports and prospectuses online rather than through the mail. Log on to your account at troweprice.com for more information today.

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Information About Accounts in T. Rowe Price Funds 2

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As a T. Rowe Price shareholder, you will want to know about the following policies and procedures that apply to the T. Rowe Price family of stock, bond, and money market funds.

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Pricing Shares and Receiving Sale Proceeds

How and when shares are priced

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The share price (also called "net asset value" or NAV per share) for all funds except the Japan Fund is calculated at the close of the New York Stock Exchange, normally 4 p.m. ET, each day that the exchange is open for business. (See the following section for information on the Japan Fund.) To calculate the NAV, the fund`s assets are valued and totaled, liabilities are subtracted, and the balance, called net assets, is divided by the number of shares outstanding. Market values are used to price stocks and bonds. Market values represent the prices at which securities actually trade or evaluations based on the judgment of the fund`s pricing services. Amortized cost is used to price securities held by money market fund s. If a market value for a security is not available, the fund will make a good faith effort to assign a fair value to the security.

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The portfolio securities of funds investing in foreign markets are valued on the basis of the most recent closing market prices at 4 p.m. ET except under the circumstances described below . Most foreign markets close before 4 p.m . For securities primarily traded in the Far East, for example, the most recent closing prices may be as much as 15 hours old at 4 p.m. If a fund determines that developments between the close of the foreign market and 4 p.m. ET will, in its judgment, materially affect the value of some or all of the fund`s securities, the fund will adjust the previous closing prices to reflect what it believes to be the fair value of the securities as of 4 p.m. ET. In deciding whether to make these adjustments, the fund reviews a variety of factors, including developments in foreign markets, the performance of U.S. securities markets , and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities . A fund may also fair value securities in other situations, for example, when a particular foreign market is closed but the fund is open.

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The fund uses outside pricing services to provide it with closing market prices and information used for adjusting those prices. The fund cannot predict how often it will use closing prices and how often it will adjust those prices. As a means of evaluating its fair value process, the fund routinely compares closing market prices, the next day`s opening prices in the same markets, and adjusted prices.

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The various ways you can buy, sell, and exchange shares are explained at the end of this prospectus and on the New Account Form. These procedures may differ for institutional and employer-sponsored retirement accounts or if you hold your account through an intermediary .

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How your purchase, sale, or exchange price is determined

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If we receive your request in correct form by 4 p.m. ET, your transaction will be priced at that business day`s NAV. If we receive it after 4 p.m., it will be priced at the next business day`s NAV.

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We cannot accept orders that request a particular day or price for your transaction or any other special conditions.

Fund shares may be purchased through various third-party intermediaries including banks, brokers, and invest ment advisers. Where authorized by a fund, orders will be priced at the NAV next computed after receipt by the intermediary. Consult your intermediary to determine when your orders will be priced. The intermediary may charge a fee for its services.

Note: The time at which transactions and shares are priced and the time until which orders are accepted may be changed in case of an emergency or if the New York Stock Exchange closes at a time other than 4 p.m. ET.

Japan Fund: Pricing and Transactions

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The Japan Fund`s share price is calculated at the close of the New York Stock Exchange, normally 4 p.m. ET, on days when both it and the Tokyo Stock Exchange are open. The fund will not price shares or process orders on any day when either the New York or Tokyo Stock Exchange is closed. Orders received on such days will be pro cessed the next day the fund computes a NAV. As a result , you may experience a delay in purchasing or redeem

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ing fund shares. Exchanges: If you wish to exchange into the Japan Fund on a day the New York Stock Exchange is open but the Tokyo Stock Exchange is closed, the exchange out of the other T. Rowe Price fund will be pro cessed on that day, but Japan Fund shares will not be purchased until the day the Japan Fund reopens. If you wish to exchange out of the Japan Fund on a day when the New York Stock Exchange is open but the Tokyo Stock Exchange is closed, the exchange will be delayed until the Japan Fund reopens.

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The Tokyo Stock Exchange is scheduled to be closed on the following weekdays: In 2005 — January 3 and 10; February 11; March 21; April 29; May 3, 4, and 5; July 18; September 19 and 23; October 10; November 3 and 23; December 23. In 2006 — January 2, 3, and 9; February 11; March 21; April 29; May 3, 4, and 5; July 17; September 19 and 23; October 9; November 3 and 23; December 23. If the Tokyo Stock Exchange closes on dates not listed, the fund will not be priced on those dates.

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How you can receive the proceeds from a sale

When filling out the New Account Form, you may wish to give yourself the widest range of options for receiving proceeds from a sale.

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If your request is received by 4 p.m. ET (on a business day) in correct form, proceeds are usually sent on the next business day. Proceeds can be sent to you by mail or to your bank account by Automated Clearing House (ACH) transfer or bank wire. ACH is an automated method of initiating payments from, and receiving payments in, your financial institution account. Proceeds sent by ACH transfer are usually credited the second business day after the sale. Proceeds sent by bank wire should be credited to your account the first business day after the sale.

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Exception: Under certain circumstances and when deemed to be in a fund`s best interest, your proceeds may not be sent for up to seven calendar days after we receive your redemption request.

If for some reason we cannot accept your request to sell shares, we will contact you.

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Contingent Redemption Fee

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Short-term trading can disrupt a fund`s investment program and create additional costs for long-term sharehold ers. For these reasons, certain T. Rowe Price funds, listed below, assess a fee on redemptions (including exchanges) of fund shares held for less than the period shown, which reduces the proceeds from such redemp tions by the amounts indicated:

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T. Rowe Price Funds With Redemption Fees
Fund name	Redemption fee	Holding period *
Developing Technologies	1%	90 days /3 months
Diversified Small-Cap Growth	1%	90 days /3 months
Emerging Europe & Mediterranean	2 %	90 days /3 months
Emerging Markets Bond	2%	90 days /3 months
Emerging Markets Stock	2 %	90 days /3 months
Equity Index 500	0 .5 %	90 days /3 months
European Stock	2%	90 days /3 months
Extended Equity Market Index	0 .5 %	90 days /3 months
Global Stock	2%	90 days /3 months
High Yield	1%	90 days /3 months
International Bond	2%	90 days /3 months
International Discovery	2 %	90 days /3 months
International Equity Index	2 %	90 days /3 months
International Growth & Income	2%	90 days /3 months
International Stock	2%	90 days /3 months
Japan	2%	90 days /3 months
Latin America	2 %	90 days /3 months
New Asia	2%	90 days /3 months
Real Estate	1 %	90 days /3 months
Small-Cap Value	1 %	90 days /3 months
Spectrum International	2%	90 days /3 months
Tax-Efficient Balanced	1 %	1 year
Tax-Efficient Growth	1 %	1 year
Tax-Efficient Multi-Cap Growth	1 %	1 year
Total Equity Market Index	0 .5 %	90 days /3 months
U.S. Bond Index	0 .5 %	90 days /3 months

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Redemption fees are paid to a fund to deter short-term trading, offset costs, and protect the fund`s long-term shareholders. All persons holding shares of a T. Rowe Price fund that imposes a redemption fee are subject to the fee , whether the person is holding shares directly with a T. R owe Price fund, through a retirement plan for which T. Rowe Price serves as recordkeeper, or indirectly through an intermediary, such as a broker, bank, investment adviser, recordkeeper for retirement plan participants, or any other third party .

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* Computation of holding period

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W hen an investor sells shares of a fund that assesses a redemption fee, T. Rowe Price will use the "first-in, first- out" (FIFO) method to determine the holding period for the shares sold. Under this method, the date of redemption or exchange will be compared with the earliest purchase date of shares held in the account. A redemption fee will be charged on shares sold before the end of the required holding period.

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If you purchase shares held directly with T. Rowe Price, the holding period is three months. For example, if you purchase shares on March 1 and redeem before June 1 , you will be assessed the redemption fee.

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If you purchase shares through a retirement plan for which T. Rowe Price serves as recordkeeper, the holding period is 90 days. For example, if you redee m your shares on or before the 90th day from the date of purchas e, you will be assessed the redemption fee .

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If you purchas e shares through an intermediary, consult your intermediary to determine how the holding period (for example, 90 days versus three months) will be applied.

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Transactions n ot s ubject to r edemption f ees

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The T. Rowe Price funds will not assess a redemption fee with respect to certain transactions. At this time, the following shares of T. Rowe Price funds will not be subject to redemption fees:

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1. Shares redeemed via a n automated systematic withdrawal plan ;

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2. Shares redeemed through or used to establish an automat ed , nondiscretionary rebalancing or asset alloca tion program , if approved in writing by T. Rowe Price;

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3. Shares purchased by the reinvestment of dividends or capital gain distributions; *

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4. Shares purchased with retirement plan participant and employer contributions at the direction of a retire ment plan participant or his or her beneficiary (e.g., payroll and rollover contributions , loan repay ments ) ;*

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5. Shares redeemed as part of a retirement plan participant-directed distribution including, but not limited to, the following examples:

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a. Death distributions

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b. Hardship withdrawals

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c. Loan s

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d . Employment termination withdrawals

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e. Qualified Domestic Relations Orders (QDROs);

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6. Shares redeemed as part of a retirement plan termination or restructuring;

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7. Shares transferred from one retirement plan to another retirement plan in the same fund; *

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8. Shares converted from one share class to another share class of the same fund; *

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9. Shares redeemed by a fund ( e.g. , for failure to meet account minimums or to cover various fees such as fiduciary fees) ;

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10. Shares purchased by rollover and changes of account registration within the same fund;*

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11. Shares redeemed to return an excess contribution in an IRA account;

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12. Shares purchased by a fund-of-fund s product, if approved in writing by T. Rowe Price;

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13. Shares transferred to T. Rowe Price or a third party intermediary acting as a service provider when the age of the shares cannot be determined systematically ;*

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14. Shares redeemed in retirement plans or other products that restrict trading to no more frequently than once per quarter , if approved in writing by T. Rowe Price.

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* Subsequent exchanges of these shares into funds that assess redemption fees will be subject to the fee.

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If your shares are held through an intermediary in an omnibus account, T. Rowe Price relies on the intermedi ary to assess the redemption fee on underlying shareholder accounts. T. Rowe Price seeks to identify intermedi aries establishing omnibus accounts and to enter into agreements requiring the intermediary to assess the redemption fees. There are no assurances that T. Rowe Price will be successful in identifying all intermediaries or that the intermediaries will properly assess the fees.

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Certain intermediaries may not apply the exemptions listed above to the redemption fee policy; all redemptions by persons trading through such intermediaries may be subject to the fee. Persons redeeming shares th r ough an intermediary should check with the ir respective intermediary to determine which transactions are subject to the fees.

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Implementatio n

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Recordkeepers for retirement plan participants who were not able to implement the redemption fees by January 1, 2005, because of systems limitations and who provided verification to that effect were permitted to delay the implementation of redemption fees. All such recordkeepers are expected to implement the redemption fees by March 31, 2005 , or implement short-term trading restrictions approved by T. Rowe Price until they have the systems capabilities to assess the fees. Any person purchasing shares through a retirement plan recordkeep er sh ould check with the ir recordkeeper to determine when purchases will be subject to redemption fees.

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Shares held or purchased prior to January 1, 2005, are subject to the terms for holding periods and early redemption as set forth in the prospectu s in effect when the shares were originally purchased. For example, shares of the T. Rowe Price New Asia Fund purchased on December 31, 2004, would be subject to a one-year holding period and 2% redemption fee if sold within one year; shares of the fund purchased on January 3 , 2005, would be subject to the new 90-day /three-month holding period and a 2% redemption fee if sold within the 90-day /three - month holding period.

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Useful Information on Distributions and Taxes

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All net investment income and realized capital gains are distributed to shareholders.

Dividends and Other Distributions

Dividend and capital gain distributions are reinvested in additional fund shares in your account unless you select another option on your New Account Form. Reinvesting distributions results in compounding , that is, receiving income dividends and capital gain distributions on a rising number of shares.

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Distributions not reinvested are paid by check or transmitted to your bank account via ACH. If the Post Office cannot deliver your check, or if your check remains uncashed for six months, the fund reserves the right to reinvest your distribution check in your account at the NAV on the day of the reinvestment and to reinvest all subsequent distributions in shares of the fund. No interest will accrue on amounts represented by uncashed distribution s or redemption checks.

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The following table provides details on dividend payments :

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<R> Table 4 Dividend Payment Schedule

Fund	Dividends
Money market funds	P urchase s received by T. Rowe Price by 12 noon ET via wire begin to earn dividends on that day . Other shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Declared daily and p aid on the first business day of each month.
Bond funds	Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Declared daily and p aid on the first business day of each month.
These stock funds only: Balanced Dividend Growth Equity Income Equity Index 500 Growth & Income Personal Strategy Balanced Personal Strategy Income Real Estate	Declared quarterly, if any, in March, June, September, and December. Must be a shareholder on the record date.
O ther stock funds	Declared annually, if any, generally in December. Must be a shareholder on the record date.
Retirement Funds : Retirement Income All other s	Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Paid on the first business day of each month. Declared annually, if any, generally in December. Must be a shareholder on the record date.
Tax-Efficient Balanced	Municipal Portion Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Paid on the last business day of March, June, September, and December. Equity Portion Declared annually, if any, generally in December. Must be a shareholder on the record date.

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Bond or money f und shares will earn dividends through the date of redemption . S hares redeemed on a Friday or prior to a holiday (other than wire redemptions for money funds received before 12 noon ET) will continue to earn dividends until the next business day. Generally, if you redeem all of your bond or money fund shares at any time during the month, you will also receive all dividends earned through the date of redemption in the same check. When you redeem only a portion of your bond or money fund shares, all dividends accrued on those shares will be reinvested, or paid in cash, on the next dividend payment date.

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If you purchase and sell your shares through an intermediary, consult your intermediary to determine when your shares begin and stop accruing dividends; the information described above may vary.

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Capital gain payments

If a fund has net capital gains for the year (after subtracting any capital losses), they are usually declared and paid in December to shareholders of record on a specified date that month. If a second distribution is neces sary, it is paid the following year.

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Capital gain payments are not expected from money market funds, which are managed to maintain a constant share price.

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A capital gain or loss is the difference between the purchase and sale price of a security.

Tax Information

You will be sent timely information for your tax filing needs.

If you invest in the fund through a tax-deferred retirement account, you will not be subject to tax on dividends and distributions from the fund or the sale of fund shares if those amounts remain in the tax-deferred account.

If you invest in the fund through a taxable account, y ou will generally be subject to tax when :

You sell fund shares, including an exchange from one fund to another.

A fund makes a distribution to your account.

Additional information about certain T. Rowe Price funds is listed below:

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Tax-Free and Municipal Funds
Regular monthly dividends (including the state specific tax-free funds) are expected to be exempt from federal income taxes. Exemption is not guaranteed , since the fund has the right under certain conditions to invest in nonexempt securities. You must report your total tax-free income on IRS Form 1040. The IRS uses this information to help determine the tax status of any Social Security payments you may have received dur ing the year. Tax-exempt dividends paid to Social Security recipients may increase the portion of benefits that are subject to tax. For state specific funds, the monthly dividends you receive are expected to be exempt from state and local income tax. For other funds, a small portion of your income dividend may be exempt from state and local income taxes. If the funds invest in certain "private activity" bonds, shareholders who are subject to the alternative minimum tax (AMT) must include income generated by those bonds in their AMT calculation. The portion of the fund`s income dividend that should be included in your AMT calculation, if any, will be reported to you in January.
Tax-Efficient Balanced Fund
The fund intends to invest a sufficient portion of its assets in municipal bonds and notes so that it may qualify to pay tax-exempt dividends, which will be exempt from federal income tax. The fund may not always qualify to pay tax-exempt dividends. The amount of such dividends will be reported to you on your calendar year-end statement. You must report your total tax-exempt income on IRS Form 1040. This information is used by the IRS to help determine the tax status of any Social Security payments you may have received during the year. Tax-exempt dividends paid to Social Security recipients may increase the portion of benefits that are subject to tax. A small portion of your income dividend may also be exempt from state and local income taxes.
Tax-Efficient Balanced Fund (continued)
If the fund invest s in certain "private activity" bonds, shareholders who are subject to the alternative minimum tax (AMT) must include income generated by those bonds in their AMT calculation. The portion of the fund`s income dividends that should be included in your AMT calculation, if any, will be reported to you in January.
Florida Intermediate Tax-Free Fund
Florida does not have a state income tax but does impose an intangibles property tax that applies to shares of mutual funds. A fund organized as a business trust and invested at least 90% in Florida municipal obliga tions, U.S. government obligations, and certain other designated securities on January 1 is exempt from the tax. If a fund`s portfolio is less than 90% invested in exempt securities on January 1, the exemp tion applies only to the portion of assets (if any) invested in U.S. government obligations. The fund is organized as a business trust and will make every effort to have at least 90% of its portfolio invested in exempt securities on January 1 and expects that the entire value of all fund shares will be exempt from the intangibles tax. Exemption is not guaranteed , since the fund has the right under certain conditions to invest in nonexempt securities.

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For individual shareholders, a portion of ordinary dividends representing " qualified dividends " received by the fund may be subject to tax at the lower rate applicable to long-term capital gains, rather than ordinary income. You may report it as a qualifying dividend in computing your taxes provided you have held the fund shares on which the dividend was paid for more than 60 days during the 12 1 -day period beginning 60 days before the ex- dividend date. Ordinary d ividends that do not qualify for this lower rate are generally taxable at the investor ` s marginal income tax rate. This includes the portion of ordinary dividends derived from interest, short-term gains, distributions from certain nonqualified foreign corporations, and dividends received by the fund from stocks that were on loan. Little, if any, of the ordinary dividends paid by the Real Estate Fund or the bond and money funds is expected to qualify for this lower rate.

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For corporate shareholders, a portion of ordinary dividends may be eligible for the 70% deduction for divi dends received by corporations to the extent the fund`s income consists of dividends paid by U.S. corporations. Little, if any, of the ordinary dividends paid by the international funds or the bond and money funds is expected to qualify for this deduction.

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Taxes on fund redemptions

When you sell shares in any fund, you may realize a gain or loss. An exchange from one fund to another is also a sale for tax purposes.

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In January, you will be sent Form 1099-B indicating the date and amount of each sale you made in the fund dur ing the prior year. This information will also be reported to the IRS. For most new accounts or those opened by exchange in 1984 or later, we will provide you with the gain or loss on the shares you sold during the year based on the average cost single category method. This information is not reported to the IRS, and you do not have to use it. You may calculate the cost basis using other methods acceptable to the IRS, such as "specific identifica tion."

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To help you maintain accurate records, we will send you a confirmation promptly following each transaction you make (except for systematic purchases and redemptions) and a year-end statement detailing all your transactions in each fund account during the year.

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Taxes on fund distributions

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In January, you will be sent Form 1099-DIV indicating the tax status of any dividend and capital gain distribu tions made to you. This information will also be reported to the IRS. Distributions are generally taxable to you in the year in which they are paid. You will be sent any additional information you need to determine your taxes on fund distributions, such as the portion of your dividends, if any, that may be exempt from state and local income taxes. Dividends from tax-free funds are expected to be tax-exempt.

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rates applicable to long-term capital gains . If you realized a loss on the sale or exchange of fund shares that you held six months or less, your
short-term loss must be reclassified as a long-term loss to the extent of any long-term capital gain distribution s received during the period you held the shares. If you realize d a loss on the sale or exchange of tax-free fund shares held six months or less, your capital loss is reduced by the tax-exempt dividends received on those shares. For funds investing in foreign securities, distributions resulting from the sale of certain foreign currencies, cur rency contracts, and the currency portion of gains on debt securities are taxed as ordinary income. Net foreign currency losses may cause monthly or quarterly dividends to be reclassified as a return of capital.

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The following table provides additional details on distributions for certain funds :

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<R> Table 5 Taxes on F und D istributions

Tax-Free and Municipal Funds
Gains realized on the sale of market discount bonds with maturities beyond one year may be treated as ordinary income and cannot be offset by other capital losses. To the extent the fund invests in these securities, the likelihood of a taxable gain distribution will be increased.
Tax-Efficient Balanced Fund
Gains realized on the sale of market discount bonds with maturities beyond one year may be treated as ordinary income and cannot be offset by other capital losses. To the extent the fund invests in these securities, the likelihood of a taxable gain distribution will be increased.
Inflation Protected Bond Fund
Inflation adjustments on Treasury inflation-protected securities exceeding deflation adjust ments for the year will be distributed to you as a short-term capital gain. In computing the distribution amount, the fund cannot reduce inflation adjustments by short- or long-term losses from the sales of securities. Net deflation adjustments for a year may result in all or a portion of dividends paid earlier in the year being treated as a return of capital.
Retirement Funds
Distributions by the underlying funds and changes in asset allocations may result in taxable distributions of ordinary income or capital gains.

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Tax consequences of hedging

Entering into certain options, futures, swaps, and forward foreign exchange contracts and transactions may result in the application of the mark-to-market and straddle provisions of the Internal Revenue Code. These provisions could result in the fund being required to distribute gains on such transactions even though it did not close the contracts during the year or receive cash to pay such distributions. The fund may not be able to reduce its distributions for losses on such transactions to the extent of unrealized gains in offsetting positions.

Distributions are taxable whether reinvested in additional shares or received in cash.

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Tax effect of buying shares before a n income dividend or capital gain distribution

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If you buy shares shortly before or on the "record date" — the date that establishes you as the person to receive the upcoming distribution — you may receive a
portion of the money you just invested in the form of a taxable distribution. Therefore, you may wish to find out a fund`s record date before investing. Of course, a fund`s share price may, at any time, reflect undistributed capi tal gains or income and unrealized appreciation, which may result in future taxable
distributions. Such distributions can occur even in a year when the fund has a negative return.

Transaction Procedures and Special Requirements

Following these procedures helps assure timely and accurate transactions.

Purchase Conditions

Nonpayment

If you pay with a check or ACH transfer that does not clear or if your payment is not received in a timely manner , your purchase may be canceled. You will be responsible for any losses or expenses incurred by the fund or trans fer agent, and the fund can redeem shares you own in this or another identically registered T. Rowe Price account as reimbursement. The fund and its agents have the right to reject or cancel any purchase, exchange, or redemp tion due to nonpayment.

U.S. dollars

All purchases must be paid for in U.S. dollars; checks must be drawn on U.S. banks.

Sale (Redemption) Conditions

Holds on immediate redemptions: 10-day hold

If you sell shares that you just purchased and paid for by check or ACH transfer, the fund will process your redemption but will generally delay sending you the proceeds for up to 10 calendar days to allow the check or transfer to clear. If, during the clearing period, we receive a check drawn against your newly purchased shares , it will be returned marked "uncollected." (The 10-day hold does not apply to purchases paid for by bank wire or automatic purchases through your paycheck.)

Telephone, Tele*Access ® , and online account transactions

You may access your account or conduct transactions using the telephone or Tele*Access, or online . The T. Rowe Price funds and their agents use reasonable procedures to verify the identity of the shareholder. If these proce dures are followed, the funds and their agents are not liable for any losses that may occur from acting on unau thorized instructions. A confirmation is sent promptly after a transaction. Please review it carefully and contact T. Rowe Price immediately about any transaction you believe to be unauthorized. T elephone conversations are recorded.

Redemptions over $250,000

Large redemptions can adversely affect a portfolio manager`s ability to implement a fund`s investment strategy by causing the premature sale of securities that would otherwise be held. If, in any 90-day period, you redeem (sell) more than $250,000, or your sale amounts to more than 1% of fund net assets, the fund has the right to pay the difference between the redemption amount and the lesser of the two previously mentioned figures with securities from the fund.

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Excessive and Short-Term Trading

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T. Rowe Price may bar excessive and short-term traders from purchasing shares.

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Excessive or short-term trading in fund shares may disrupt management of a fund and raise its costs. Short-term traders in funds investing in foreign securities can seek to take advantage of an anticipated difference between the price of the fund`s shares and price movements in overseas markets (see "How and when shares are priced"). While there is no assurance that T. Rowe Price can prevent all excessive and short-term trading, the Board of Directors/Trustees of each fund has adopted the policy set forth below to deter such activity. Persons trading directly with T. Rowe Price or indirectly through intermediaries in violation of this policy or persons believed to be short-term traders may be barred for 90 calendar days or permanently from further purchases of the Price funds . Purchase transactions placed by such persons are subject to rejection without notice.

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All persons purchasing shares held directly with a T. Rowe Price fund, or through a retirement plan for which T. Rowe Price serves as recordkeeper, who make more than one purchase and one sale or one sale and one pur chase involving the same fund within any 90-day calendar period will violate the policy.

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All persons purchasing fund shares held through an intermediary, including a broker, bank, investment adviser, recordkeeper, insurance company, or other third party, and who hold the shares for less than 90 calendar days, will violate the policy.

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Intermediaries often establish omnibus accounts in the T. Rowe Price funds for their customers. In such situa tions, T. Rowe Price cannot always monitor trading activity by individual shareholders. However, T. Rowe Price reviews trading activity at the omnibus account level and looks for activity that indicates potential excessive or short term trading. If it detects suspicious trading activity, T. Rowe Price contacts the intermediary to deter mine whether the excessive trading policy has been violated and, if so, asks the intermediary to take action to restrict transactions by the underlying shareholder in accordance with the policy.

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The following types of transactions are exempt from this policy: 1) trades
solely in money market funds (exchanges between a money fund and a non money fund are not exempt); 2) systematic purchases and redemptions
(see Information About Your Services); 3) checkwriting redemptions from bond and money funds; and 4) for retirement plan participants, payroll contributions, withdrawals, and loans.

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In addition, transactions in automated nondiscretionary rebalancing programs , nondiscretionary asset alloca tion programs , or fund - of - fund s products may be exempt from the excessive trading policy subject to prior writ ten approval by designated persons at T. Rowe Price.

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T. Rowe Price may modify the 90-day policy set forth above (for example, in situations where a retirement plan with multiple investment options imposes a uniform restriction on trading in the plan that differs from the T. Rowe Price fund`s policy). These modifications would be authorized only if the fund determines, in its discre tion, that the modified policy provides protection to the fund that is substantially equivalent to the fund`s regu la r p olicy.

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There is no guarantee that T. Rowe Price will detect or prevent excessive or short-term trading.

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Keeping Your Account Open

Due to the relatively high cost to a fund of maintaining small accounts, we ask you to maintain an account bal ance of at least $1,000 ($10,000 for Summit Funds). If your balance is below this amount for three months or longer, we have the right to close your account after giving you 60 days to increase your balance.

Signature Guarantees

A signature guarantee is designed to protect you and the T. Rowe Price fu nds from fraud by verifying your signature.

You may need to have your signature guaranteed in certain situations, such as:

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Written requests : ( 1) to redeem over $100,000 ; or ( 2) to wire redemption
proceeds when prior bank account authorization is not on file .

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Remitting redemption proceeds to any person, address, or bank account not on record.

Transferring redemption proceeds to a T. Rowe Price fund account with a different registration (name or owner ship) from yours.

Establishing certain services after the account is opened.

You can obtain a signature guarantee from most banks, savings institutions,
broker-dealers, and other guarantors acceptable to T. Rowe Price . We cannot accept guarantees from notaries public or organizations that do not provide reimbursement in the case of fraud.

Account Maintenance and Small Account Fees

Small Account Fee (all funds except Index Funds) Because of the disproportionately high costs of servicing accounts with low balances, a $10 fee, paid to T. Rowe Price Services, the funds` transfer agent, will automati cally be deducted from nonretirement accounts with balances falling below a minimum amount. The valuation of accounts and the deduction are expected to take place during the last five business days of September. The fee will be deducted from accounts with balances below $2,000, except for UGMA/UTMA accounts, for which the minimum is $500. The fee will be waived for any investor whose T. Rowe Price mutual fund accounts total $25,000 or more. Accounts employing automatic investing (e.g., payroll deduction, automatic purchase from a bank account, etc.) are also exempt from the charge. The fee does not apply to IRAs and other retirement plan accounts that utilize a prototype plan sponsored by T. Rowe Price, but a separate custodial or administrative fee may apply to such accounts.

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Account Maintenance Fee (Index Funds only) The account maintenance fee is charged on a quarterly basis usually during the last week of a calendar quarter. On the day of the assessment, accounts with balances below $10,000 will be charged the fee. Please note that the fee will be charged to accounts that fall below $10,000 for any rea son, including market fluctuations, redemptions, or exchanges. The fee will apply to IRA accounts. The fee does not apply to retirement plans directly registered with T. Rowe Price Services or accounts maintained by interme diaries through NSCC ® Networking .

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More About the Funds 3

Organization and Management

How are the funds organized?

T. Rowe Price International Funds, Inc. , (the "corporation") was incorporated in Maryland in 1979. C urrently , the corporation consists of 12 series, each representing a separate pool of assets with different objectives and investment policies. Each is an " open-end investment company, " or mutual fund. Mutual funds pool money received from shareholders and invest it to try to achieve specified objectives.

What is meant by "shares"?

As with all mutual funds, investors purchase shares when they put money in a fund. These shares are part of a fund`s authorized capital stock, but share certificates are not issued.

Each share and fractional share entitles the shareholder to:

Receive a proportional interest in income and capital gain distributions.

Cast one vote per share on certain fund matters, including the election of fund directors/trustees , changes in fundamental policies, or approval of changes in the fund`s management contract.

Do T. Rowe Price funds have annual shareholder meetings?

The funds are not required to hold annual meetings and, to avoid unnecessary costs to fund shareholders, do not do so except when certain matters, such as a change in fundamental policies, must be decided. In addition, shareholders representing at least 10% of all eligible votes may call a special meeting, if they wish, for the purpose of voting on the removal of any fund director or trustee.
If a meeting is held and you cannot attend, you can vote by proxy. Before the meeting, the fund will send you proxy materials that explain the issues to be decided and include instructions on voting by mail or telephone, or on the Internet.

Who runs the funds?

General Oversight

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Each fund is governed by a Board of Directors /Trustees that meets regularly to review fund investments, perfor mance, expenses, and other business affairs. The Board elects the funds` officers. The majority of Board members are independent of T. Rowe Price International and T. Rowe Price Global Investment Services Limited ("Global Investment Services").

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All decisions regarding the purchase and sale of fund investments are made by T. Rowe Price International or Global Investment Services (see below) .

Investment Manager

T. Rowe Price International (or Global Investment Services ) is responsible for the selection and management of fund portfolio investments. T. Rowe Price International has entered into a sub advisory agreement with Global Investment Services for the management of the Japan Fund and the Japanese investments of the International Discovery Fund. T. Rowe Price International and Global Investment Services are wholly owned subsidiaries of T. Rowe Price Group, Inc. The U.S. offices of T. Rowe Price International and Global Investment Services are located at 100 East Pratt Street, Baltimore, Maryland 21202.

Portfolio Management

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The individuals listed below have day - to - day responsibility for managing the portfolio and developing and exe cuting each fund`s investment program.

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Emerging Europe & Mediterranean Fund Christopher D. Alderson.

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Emerging Markets Stock Fund Christopher D. Alderson, Frances Dydasco, Mark J.T. Edwards, and Gonzalo Px87 n garo.

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European Stock Fund Robert A. Revel-Chion and James B.M. Seddon.

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Global Stock Fund Robert W. Smith and Dean Tenerelli.

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International Discovery Fund Frances Dydasco, Mark J.T. Edwards, M. Campbell Gunn, and Justin Thomson.

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International Growth & Income Fund Raymond A. Mills, Ph.D.

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International Stock Fund Mark C.J. Bickford-Smith, James B.M. Seddon, and David J.L. Warren.

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Japan Fund M. Campbell Gunn and David J.L. Warren.

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Latin America Fund Gonzalo Px87 ngaro.

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New Asia Fund Frances Dydasco and Mark J.T. Edwards.

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<R> Portfolio Management

Name	Year Joined T. Rowe Price International	Years of Experience	Type of Experience
Christopher D. Alderson	1988	1 9	Portfolio Management ; Research
Mark C.J. Bickford-Smith	1995	20	Research; Financial Analysis
Frances Dydasco	1996	16	Research; Financial Analysis
Mark J.T. Edwards	1987	20	Financial Analysis
M. Campbell Gunn	2002	26	Research; Portfolio Management
Raymond A. Mills	2000	8	Portfolio Management
Gonzalo Px87 ngaro	1998	1 4	Portfolio Management ; Equity Research
Robert A. Revel-Chion	1998	1 7	Portfolio Management
James B.M. Seddon	1987	1 8	Portfolio Management
Robert W. Smith	1996	1 8	Financial Analysis ; Portfolio Management
Dean Tenerelli	1999	1 2	Research; Portfolio Management
Justin Thomson	1998	1 4	Portfolio Management
David J.L. Warren	1983	2 5	Equity Research; Fixed - Income Research; Portfolio Management

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The Management Fee

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This fee has two parts — an "individual fund fee," which reflects a fund`s particular characteristics, and a "group fee." The group fee, which is designed to reflect the benefits of the shared resources of the T. Rowe Price invest ment management complex, is calculated daily based on the combined net assets of all T. Rowe Price funds (except the Spectrum Funds, Retirement Funds, Reserve Investment Funds, and any index or private label mutual funds). The group fee schedule (shown below) is graduated, declining as the asset total rises, so share holders benefit from the overall growth in mutual fund assets.

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Group Fee Schedule

0.334%*	First $50 billion

0.305%	Next $30 billion

0.300%	Next $40 billion

0.295%	Thereafter

* Represents a blended group fee rate containing various break points.

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Each fund`s portion of the group fee is determined by the ratio of its daily net assets to the daily net assets of all . the T. Rowe Price funds described previously. Based on combined T. Rowe Price fund assets of over $ 131 billion . at October 29, 2004 , the group fee was 0.3 1 % . The individual fund fees are as follows: Global Stock, Interna tional Growth & Income, and International Stock Funds, 0.35%; European Stock, Japan, and New Asia Funds, 0.50%; Emerging Europe & Mediterranean, Emerging Markets Stock, International Discovery, and Latin Amer ica Funds, 0.75%.

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T. Rowe Price International will pay Global Investment Services 60% of T. Rowe Price International`s fee for managing the Japan Fund and 50% of T. Rowe Price
International`s fee attributable to the Japanese investments of the International
Discovery Fund.

Understanding Performance Information

This section should help you understand the terms used to describe fund performance. You will come across them in shareholder reports you receive from us, in our educational and informational materials, in T. Rowe Price advertisements, and in the media.

Total Return

This tells you how much an investment has changed in value over a given period. It reflects any net increase or decrease in the share price and assumes that all dividends and capital gains (if any) paid during the period were reinvested in additional shares. Therefore, total return numbers include the effect of compounding.

Advertisements may include cumulative or average annual total return figures, which may be compared with var ious indices, other performance measures, or other mutual funds.

Cumulative Total Return

This is the actual return of an investment for a specified period. A cumulative return does not indicate how much the value of the investment may have fluctuated during the period. For example, an investment could have a 10-year positive cumulative return despite experiencing some negative years during that time.

Average Annual Total Return

This is always hypothetical and should not be confused with actual year-by-year results. It smooths out all the variations in annual performance to tell you what constant year-by-year return would have produced the invest ment`s actual cumulative return. This gives you an idea of an investment`s annual contribution to your portfo lio, provided you held it for the entire period.

Investment Policies and Practices

This section takes a detailed look at some of the types of fund securities and the various kinds of investment practices that may be used in day-to-day portfolio management. Fund investments are subject to further restric tions and risks described in the Statement of Additional Information.

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Shareholder approval is required to substantively change fund objectives . Shareholder approval is also required to change certain investment restrictions noted in the following section as "fundamental policies." The managers also follow certain "operating policies" that can be changed without shareholder approval. Shareholders will receive at least 60 days` prior notice of a change in the fund`s policy requiring it to normally invest 80% of its assets in stocks or a particular region, as the case may be. Fund investment restrictions and policies apply at the time of purchase . A later change in circumstances will not require the sale of an investment if it was proper at the time it was made. (This exception does not apply to the fund`s borrowing policy . )

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Fund holdings of certain kinds of investments cannot exceed maximum percentages of total assets, which are set forth in this prospectus. For instance, fund investments in certain derivatives are limited to 10% of total assets. While these restrictions provide a useful level of detail about fund investments, investors should not view them as an accurate gauge of the potential risk of such investments. For example, in a given period, a 5% investment in derivatives could have significantly more of an impact on a fund`s share price than its weighting in the portfolio. The net effect of a particular investment depends on its volatility and the size of its overall return in relation to the performance of all other fund investments.

Changes in fund holdings, fund performance, and the contribution of various investments are discussed in the shareholder reports sent to you.

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Fund managers have considerable leeway in choosing investment strategies and selecting securities they believe will help achieve fund objectives.

Types of Portfolio Securities

In seeking to meet their investment objectives, fund investments may be made in any type of security or instru ment (including certain potentially high-risk
derivatives described in this section) whose investment characteristics are consistent with their investment pro grams. The following pages describe various types of fund securities and investment management practices.

Fundamental policy With the exception of the Emerging Europe & Mediterranean, Latin America, and New Asia Funds, a fund will not purchase a security if, as a result, with respect to 75% of its total assets, more than 5% of the fund`s total assets would be invested in securities of a single issuer or more than 10% of the outstanding vot ing securities of the issuer would be held by the fund.

Nondiversified Status — Emerging Europe & Mediterranean, Latin America, and New Asia Funds

Each fund is registered as a nondiversified mutual fund. This means that the fund may invest a greater portion of its assets in, and own a greater amount of the voting securities of, a single company than a diversified fund, which may subject the fund to greater risk with respect to its portfolio securities. However, because the fund intend s to qualify as a "regulated investment compan y " under the Internal Revenue Code, the fund must invest so that, at the end of each fiscal quarter, with respect to 50% of its total assets, no more than 5% of its total assets is invested in the securities of a single issuer and not more than 10% of the voting securities of any issuer are held by the fund. With respect to the remaining 50% of fund assets, no more than 25% may be invested in a single issuer.

Fund investments may include the following:

Common and Preferred Stocks

Stocks represent shares of ownership in a company. Generally, preferred stock has a specified dividend and ranks after bonds and before common stocks in its claim on income for dividend payments and on assets should the company be liquidated. After other claims are satisfied, common stockholders participate in company profits on a pro-rata basis; profits may be paid out in dividends or reinvested in the company to help it grow. Increases and decreases in earnings are usually reflected in a company`s stock price, so common stocks generally have the great est appreciation and depreciation potential of all corporate securities. While most preferred stocks pay a divi dend, preferred stock may be purchased where the issuer has omitted, or is in danger of omitting, payment of its dividend. Such investments would be made primarily for their capital appreciation potential.

Convertible Securities and Warrants

Investments may be made in debt or preferred equity securities convertible into, or exchangeable for, equity securities. Traditionally, convertible securities have paid dividends or interest at rates higher than common stocks but lower than nonconvertible securities. They generally participate in the appreciation or depreciation of the underlying stock into which they are convertible, but to a lesser degree. Some convertibles combine higher or lower current income with options and other features. Warrants are options to buy a stated number of shares of common stock at a specified price anytime during the life of the warrants (generally, two or more years). War rants can be highly volatile, have no voting rights, and pay no dividends.

Fixed-Income Securities

From time to time, we may invest in corporate and government fixed-income securities as well as below-invest ment-grade bonds, commonly referred to as "junk" bonds. These securities would be purchased in companies that meet fund investment criteria. The price of a bond fluctuates with changes in interest rates, generally rising when interest rates fall and falling when interest rates rise. Below investment - grade bonds , or "junk bonds," can be more volatile and have greater risk of default than investment - grade bonds.

Operating policy The Emerging Europe & Mediterranean, Emerging Markets Stock, Latin America, and New Asia Funds may each invest 10% of total assets in below investment-grade bonds. The Global Stock Fund may invest 5% of total assets in below nvestment-grade bonds.

Hybrid Instruments

These instruments (a type of potentially high-risk derivative) can combine the characteristics of securities, futures, and options. For example, the principal amount, redemption, or conversion terms of a security could be related to the market price of some commodity, currency, or securities index. Such securities may bear interest or pay dividends at below market or even relatively nominal rates. Under certain conditions, the redemption value of a hybrid could be zero.

Hybrids can have volatile prices and limited liquidity, and their use may not be successful.

Operating policy Fund investments in hybrid instruments are limited to 10% of total assets.

Private Placements

These securities are sold directly to a small number of investors, usually institutions. Unlike public offerings, such securities are not registered with the SEC. Although certain of these securities may be readily sold, for exam ple, under Rule 144A, others may be illiquid, and their sale may involve substantial delays and additional costs.

Operating policy Fund investments in illiquid securities are limited to 15% of net assets.

Types of Investment Management Practices

Reserve Position

A certain portion of fund assets will be held in money market reserves. Fund reserve positions are expected to consist primarily of shares of one or both T. Rowe Price internal money market funds. Short-term, high-quality U.S. and foreign dollar-denominated money market securities, including repurchase agreements, may also be held. For temporary, defensive purposes, there is no limit on fund investments in money market reserves. Significant investments in reserves could compromise the ability to achieve fund objectives . The reserve position provides flexibility in meeting redemptions, paying expenses, and in the timing of new investments , and can serve as a short-term defense during periods of unusual market volatility .

Borrowing Money and Transferring Assets

Fund borrowings may be made from banks and other T. Rowe Price funds for temporary emergency purposes to facilitate redemption requests, or for other purposes consistent with fund policies as set forth in this prospectus. Such borrowings may be collateralized with fund assets, subject to restrictions.

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Fundamental policy Borrowings may not exceed 33 1 / 3 % of total assets.

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Operating policy Fund transfers of portfolio securities as collateral will not be made except as necessary in con nection with permissible borrowings or investments, and then such transfers may not exceed 33 1 / 3 % of total assets. Fund purchases of additional securities will not be made when borrowings exceed 5% of total assets.

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Foreign Currency Transactions

The funds will normally conduct their foreign currency exchange transactions, if any, either on a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency exchange market, or through entering into forward con tracts to purchase or sell foreign currencies. The funds will generally not enter into a forward contract with a term greater than one year.

The funds will generally enter into forward foreign currency exchange contracts only under two circumstances. First, when a fund enters into a contract for the purchase or sale of a security denominated in a foreign currency, it may desire to "lock in" the U.S. dollar price of the security. Second, when T. Rowe Price International believes that the currency of a particular foreign country may move substantially against another currency, it may enter into a forward contract to sell or buy the former foreign currency (or another currency that acts as a proxy for that currency). The contract may approximate the value of some or all of the fund`s portfolio securities denominated in such foreign currency. Under unusual circumstances, a fund may commit a substantial portion or the entire value of its portfolio to the consummation of these contracts. T. Rowe Price International will consider the effect such a commitment to forward contracts would have on each fund`s investment program and the flexibility of each fund to purchase additional securities. Although forward contracts will be used primarily to protect the fund from adverse currency movements, they also involve the risk that anticipated currency movements will not be accurately predicted, and fund total return could be adversely affected as a result.

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There are some markets where it is not possible to engage in effective foreign currency hedging. This is generally true, for example, for the currencies of various emerging markets where the foreign exchange markets are not sufficiently developed to permit hedging activity to take place.

Futures and Options

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Futures, a type of potentially high-risk derivative, are often used to manage or hedge risk because they enable the investor to buy or sell an asset in the future at an agreed-upon price. Options, another type of potentially high- risk derivative, give the investor the right (where the investor purchases the option), or the obligation (where the investor "writes" or sells the option), to buy or sell an asset at a predetermined price in the future. Futures and options contracts may be bought or sold for any number of reasons, including: to manage exposure to changes in securities prices and foreign currencies; as an efficient means of increasing or decreasing fund overall exposure to certain markets; in an effort to enhance income; to protect the value of portfolio securities; and to serve as a cash management tool. Call or put options may be purchased or sold on securities, financial indices, and foreign cur rencies.

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Futures contracts and options may not always be successful hedges; their prices can be highly volatile; using them could lower fund total return; and the potential loss from the use of futures can exceed a fund`s initial investment in such contracts.

Operating policies Futures: Initial margin deposits on futures and premiums on options used for non-hedging purposes will not exceed 5% of net asset value. Options on securities: The total market value of securities cover ing call or put options may not exceed 25% of total assets. No more than 5% of total assets will be committed to premiums when purchasing call or put options.

Tax Consequences of Hedging

Hedging may result in the application of the mark-to-market and straddle provisions of the Internal Revenue Code. These provisions could result in an increase (or decrease) in the amount of taxable dividends paid by the funds and could affect whether dividends paid are classified as capital gains or ordinary income.

Lending of Portfolio Securities

Fund securities may be lent to broker-dealers, other institutions, or other persons to earn additional income. R isk s include the potential insolvency of the broker-dealer or other borrower that could result in delays in recov ering securities and capital losses. Additionally, losses could result from the reinvestment of collateral received on loaned securities in investments that default or do not perform well .

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Fundamental policy The value of loaned securities may not exceed 33 1 / 3 % of total assets.

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Portfolio Turnover

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Turnover is an indication of frequency of trading . We will not generally trade in securities for short-term prof its, but when circumstances warrant, securities may be purchased and sold without regard to the length of time held. Each time a fund purchases or sells a security, it incurs a cost. This cost is reflected in the fund`s net asset value but not in its operating expenses. The higher the turnover rate, the higher the transaction costs and the greater the impact on the fund`s total return. Higher turnover can also increase the possibility of taxable capital gain distributions . The funds` portfolio turnover rates are shown in the Financial Highlights table .

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Disclosure of Fund Portfolio Information

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Each fund`s portfolio holdings are disclosed on a regular basis in its semi annual and annual reports to shareholders as well as Form N-Q which is filed with the SEC within 60 days of the fund`s first and third fiscal quarter-end. In addition, the fund discloses its calendar quarter-end portfolio holdings on troweprice.com 15 calendar days after each quarter. Under certain conditions, up to 5% of each fund`s holdings may be included in this portfolio list without being individually identified. Generally, securities would be omitted from the list if they are being actively bought or sold and it is determined that the quarter-end disclosure of the holding could be harmful to the funds. A security will not be omitted from the list for more than one year. Each fund also discloses its largest 10 holdings seven days after each month-end. These holdings are listed in alphabetical order along

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with the aggregate percentage of each fund`s total assets they represent. The quarter-end portfolio will remain on the Web site for one year. The top 10 list is replaced every six months. A description of the fund`s policy and procedures with respect to the disclosure of portfolio information is in the Statement of Additional Information.

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Financial Highlights

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Table 6, which provides information about each fund`s financial history, is based on a single share outstanding throughout the periods shown. Each fund`s section of the table is part of the fund`s financial statements, which are included in its annual report and are incorporated by reference into the Statement of Additional Information (available upon request). The total returns in the table represent the rate that an investor would have earned or lost on an investment in each fund (assuming reinvestment of all dividends and distributions and no payment of account or [ if applicable ] redemption fees). The financial statements in the annual reports were audited by the funds` independent registered public accounting firm , PricewaterhouseCoopers LLP.

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<R> Table 6 Financial Highlights

	8/31 /00 * through 10 /31/00	Year ended October 31
Emerging Europe & Mediterranean Fund		2001	200 2	2 003	2004

Net asset value, beginning of period	$ 10.00	$ 8.65	$ 5.89	$ 6.82	$ 10.81
Income From Investment Operations
Net investment income	(0.01 ) a	(0.0 6 ) a	(0.05 ) a	0.04 a	(0.01 )
Net gains or losses on securities (both realized and unrealized)	( 1.34 )	( 2.64 )	0.98	3.93	3.40
Total from investment operations	( 1.35 )	( 2.70 )	0.93	3.97	3.39
Less Distributions
Dividends (from net investment income)	—	—	—	—	(0.02 )
Distributions (from capital gains)	—	(0.07 )	—	—	—
Returns of capital	—	—	—	—	—
Total distributions	—	(0.07 )	—	—	(0.02 )
Redemption fees added to paid - in - capital	—	0.01	—	0.02	0.06
Net asset value, end of period	$ 8.65	$ 5.89	$ 6.82	$ 10.81	$ 14.24
Total return	( 13.50 )% a	( 31.28 )% a	15.79 % a	58.50 % a	31.96 %
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$ 25,533	$ 17,331	$ 21,481	$ 46,813	$ 114.568
Ratio of expenses to average net assets	1.75 % a b	1.75 % a	1.75 % a	1.75 % a	1.75 %
Ratio of net income to average net assets	(0.73 ) % a b	(0. 82 )% a	(0. 66 )% a	0.51 % a	(0.16 )%
Portfolio turnover rate	62 .9 % b	83.1 %	94.5 %	54.1 %	67.7 %

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* Inception date.

a Excludes expenses in excess of a 1.75% contractual expense limitation in effect through February 28, 2005 .

b Annualized.

<R> Table 6 Financial Highlights (continued)

	Year ended October 31
Emerging Markets Stock Fund	2000	2001	200 2	200 3	200 4

Net asset value, beginning of period	$ 11.08	$ 12.42	$ 9.15	$ 9.87	$ 14.30
Income From Investment Operations
Net investment income	(0.02 )	0.02	0.04	0.09	0. 14
Net gains or losses on securities (both realized and unrealized)	1.34	( 3.30 )	0.68	4.36	2.64
Total from investment operations	1.32	( 3.28 )	0.72	4.45	2.78
Less Distributions
Dividends (from net investment income)	—	—	(0. 01 )	( 0.02 )	( 0.0 9 )
Distributions (from capital gains)	—	—	—	—	—
Returns of capital	—	—	—	—	—
Total distributions	—	—	( 0. 01 )	( 0.02 )	( 0.0 9 )
Redemption fees added to paid - in - capital	0.02	0.01	0.01	—	0.01
Net asset value, end of period	$ 12.42	$ 9.15	$ 9.87	$ 14.30	$ 17.00
Total return	12.09 %	( 26.33 )%	7.97 %	45.16 %	19.61 %
Ratios/Supplemental Data
Net assets, end of period (in thousands )	$ 152,990	$ 131,436	$ 158,465	$ 345,380	$ 608,257
Ratio of expenses to average net assets	1.50 %	1.58 %	1.51 %	1.43 %	1. 3 3 %
Ratio of net income to average net assets	( 0. 12 ) %	0.19 %	0.41 %	1.12 %	1. 08 %
Portfolio turnover rate	56.1 %	70.3 %	70.5 %	65.6 %	70.0 %

</R>

a Excludes expenses in excess of a 1.75% contractual expense limitation in effect through October 31, 2001.

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<R> Table 6 Financial Highlights (continued)

	Year ended October 31
European Stock Fund	2000	200 1	200 2	200 3	200 4

Net asset value, beginning of period	$ 22.29	$ 21.69	$ 15.28	$ 12.77	$ 15.64
Income From Investment Operations
Net investment income	0. 18	0. 40	0. 16	0.22	0.2 7
Net gains or losses on securities (both realized and unrealized)	1.26	( 5.23 )	( 2.31 )	2.79	2. 66
Total from investment operations	1.44	( 4.83 )	( 2.15 )	3.01	2.93
Less Distributions
Dividends (from net investment income)	(0. 14 )	(0. 16 )	(0. 36 )	(0.14 )	(0. 22 )
Distributions (from capital gains)	( 1.9 0 )	( 1.42 )	—	—	(0.02 )
Returns of capital	—	—	—	—	—
Total distributions	( 2.04 )	( 1.58 )	(0. 36 )	(0.14 )	(0. 2 4 )
Net asset value, end of period	$ 21.69	$ 1 5.28	$ 1 2.77	$ 15.64	$ 18.33
Total return	6.28 %	( 2 3.98 ) %	( 14.51 ) %	23.83 %	18.89 %
Ratios/Supplemental Data
Net assets, end of period (in millions)	$ 1, 250	$ 814	$ 643	$ 800	$ 784
Ratio of expenses to average net assets	1.02 %	1.09 %	1.11 %	1.12 %	1. 07 %
Ratio of net income to average net assets	0.71 %	2. 03 %	1.03 %	1.56 %	1. 3 6 %
Portfolio turnover rate	24 .5 %	5.8 %	16 .1 %	23.1 %	22.5 %

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<R> Table 6 Financial Highlights (continued)

	Year ended October 31
Global Stock Fund	2000	200 1	200 2	200 3	200 4

Net asset value, beginning of period	$ 16.77	$ 18.04	$ 12.96	$ 1 0.90	$ 13.07
Income From Investment Operations
Net investment income	0. 02 a	0. 14 a	0. 02 a	0. 05 a	0. 0 3 a
Net gains or losses on securities (both realized and unrealized)	1. 80	( 4.41 )	( 1.96 )	2. 15	1.52
Total from investment operations	1. 82	( 4. 27 )	( 1.94 )	2.20	1.55
Less Distributions
Dividends (from net investment income)	(0.06 )	( 0.02 )	(0. 12 )	(0. 03 )	(0. 0 4 )
Distributions (from capital gains)	( 0. 49 )	( 0.79 )	—	—	(0.01 )
Returns of capital	—	—	—	—	—
Total distributions	( 0. 55 )	( 0.81 )	(0. 12 )	(0. 03 )	(0. 0 5 )
Net asset value, end of period	$ 18.04	$ 1 2.96	$ 1 0.90	$ 1 3.07	$ 14.5 7
Total return	10.9 8 % a	( 2 4.69 ) % a	( 1 5.15 ) % a	2 0.24 % a	11.89 % a
Ratios/Supplemental Data
Net assets, end of period (in thousands )	$ 107,4 5 9	$ 73,325	$ 62,735	$ 74,725	$ 77,258
Ratio of expenses to average net assets	1. 20 % a	1. 20 % a	1. 20 % a	1.20 % a	1. 2 0 % a
Ratio of net income to average net assets	0. 15 % a	0.89 % a	0.20 % a	0.42 % a	0. 2 2 % a
Portfolio turnover rate	71 .5 %	5 2.3 %	48.4 %	38.7 %	72.3 %

</R>

<R>

a Excludes expenses in excess of a 1.20% contractual expense limitation in effect through February 28, 2006 .

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<R> Table 6 Financial Highlights (continued)

	Year ended October 31
International Discovery Fund	2000	200 1	200 2	200 3	200 4

Net asset value, beginning of period	$ 26.75	$ 34.52	$ 1 9.28	$ 1 5.34	$ 25.21
Income From Investment Operations
Net investment income	0. 0 6	0. 06	0. 0 1	0. 0 8	0. 0 7
Net gains or losses on securities (both realized and unrealized)	10.39	( 9.49 )	( 3.95 )	9.79	4.33
Total from investment operations	10.45	( 9.43 )	( 3 .94 )	9.87	4.40
Less Distributions
Dividends (from net investment income)	—	—	—	—	(0.08 )
Distributions (from capital gains)	( 2.81 )	( 5.83 )	—	—	(0.06 )
Returns of capital	—	—	—	—	—
Total distributions	( 2.81 )	( 5.83 )	—	—	(0.14 )
Redemption fees added to paid-in-capital	0.13	0.02	—	—	0.01
Net asset value, end of period	$ 34.52	$ 19.28	$ 1 5.34	$ 25.21	$ 29.48
Total return	40.07 %	( 31.90 ) %	( 20.44 ) %	64.3 4 %	17.58 %
Ratios/Supplemental Data
Net assets, end of period (in thousands )	$ 905,387	$ 500,403	$ 359,514	$ 652,046	$ 879,580
Ratio of expenses to average net assets	1. 2 7 %	1. 38 %	1. 44 %	1.41 %	1. 32 %
Ratio of net income to average net assets	0. 15 %	0. 25 %	0. 06 %	0.4 6 %	0. 2 8 %
Portfolio turnover rate	81.0 %	59.1 %	93.9 %	115.9 %	106.4 %

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<R> Table 6 Financial Highlights (continued)

	Year ended October 31
International Growth & Income Fund	2000	200 1	2 00 2	2003	200 4

Net asset value, beginning of period	$ 11.00	$ 10.75	$ 8.19	$ 7.34	$ 9.40
Income From Investment Operations
Net investment income	0.14 a	0.11 a	0.0 9 a	0.02 a	0. 1 2 a
Net gains or losses on securities (both realized and unrealized)	0.03 b	(1.90 )	(0.84 )	2.13	1.91
Total from investment operations	0.17	(1.79 )	(0.75 )	2.15	2. 03
Less Distributions
Dividends (from net investment income)	(0.19 )	(0.13 )	(0.10 )	(0.08 )	(0.0 4 )
Distributions (from capital gains)	(0. 23 )	(0.64 )	—	(0.01 )	—
Returns of capital	—	—	—	—	—
Total distributions	(0. 42 )	(0.77 )	(0.10 )	(0.09 )	(0.0 4 )
Net asset value, end of period	$ 10.75	$ 8.19	$ 7.34	$ 9.40	$ 11.39
Total return	1.43 % a	(17.99 ) % a	(9.31 ) % a	29.66 % a	21.66 % a
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$ 1 0,118	$ 8,500	$ 10,654	$ 114,999	$ 437,974
Ratio of expenses to average net assets	1. 2 5 % a	1. 2 5 % a	1. 2 5 % a	1.25 % a	1.25 % a
Ratio of net income to average net assets	1.24 % a	1.24 % a	1.25 % a	1.36 % a	1. 71 % a
Portfolio turnover rate	32.2 %	8 .5 %	24.6 %	53.2 %	45.8 %

</R>

<R>

a Excludes expenses in excess of a 1. 2 5% contractual expense limitation in effect through February 28, 2005 .

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b The amount presented is calculated pursuant to a methodology prescribed by the Securities and Exchange Commission for a share outstanding throughout the period. This amount is inconsistent with the fund`s aggregate gains and losses because of the timing of sales and redemptions of fund shares in relation to fluctuating market values for the investment portfolio.

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</R>

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<R> Table 6 Financial Highlights (continued)

	Year ended October 31
International Stock Fund	2000	2001	200 2	200 3	20 0 4

Net asset value, beginning of period	$ 16.70	$ 16.11	$ 1 0.65	$ 8.87	$ 10.66
Income From Investment Operations
Net investment income	0.10	0.29	0. 11	0.14	0.1 5
Net gains or losses on securities (both realized and unrealized)	0.35	(4.48 )	( 1.56 )	1.76	1. 18
Total from investment operations	0.45	(4.19 )	( 1.45 )	1.90	1. 33
Less Distributions
Dividends (from net investment income)	(0.13 )	(0.09 )	(0. 30 )	( 0.11 )	( 0.1 3 )
Distributions (from capital gains)	(0.91 )	(1.18 )	( 0.03 )	—	(0.03 )
Returns of capital	—	—	—	—	—
Total distributions	(1.04 )	(1.27 )	( 0.33 )	( 0.11 )	( 0.1 6 )
Net asset value, end of period	$ 16.11	$ 10.65	$ 8.87	$ 10.66	$ 11.83
Total return	2.28 %	(28.17 )%	( 14.19 )%	21.69 %	12.59 %
Ratios/Supplemental Data
Net assets, end of period (in millions)	$ 10,458	$ 6,370	$ 4,773	$ 4,874	$ 4,8 05
Ratio of expenses to average net assets	0.84 %	0.90 %	0.9 2 %	0.95 %	0.9 2 %
Ratio of net income to average net assets	0.55 %	2.14 %	0.96 %	1.39 %	1. 22 %
Portfolio turnover rate	38.2 %	17.4 %	21.6 %	25.2 %	2 8 .2 %

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<R> Table 6 Financial Highlights (continued)

	Year ended October 31
Japan Fund	2000	200 1	200 2	200 3	200 4

Net asset value, beginning of period	$ 1 3.62	$ 1 1.59	$ 6.58	$ 5.06	$ 7.12
Income From Investment Operations
Net investment income	(0.06 )	( 0. 0 4 )	( 0. 0 4 )	( 0. 0 2 )	( 0. 0 2 )
Net gains or losses on securities (both realized and unrealized)	(1.92 )	( 3.77 )	( 1. 48 )	2. 08	0.79
Total from investment operations	(1.98 )	( 3.81 )	( 1. 52 )	2. 06	0.77
Less Distributions
Dividends (from net investment income)	—	—	—	—	—
Distributions (from capital gains)	( 0. 05 )	( 1.20 )	—	—	—
Returns of capital	—	—	—	—	—
Total distributions	( 0. 05 )	( 1.20 )	—	—	—
Net asset value, end of period	$ 11.59	$ 6.58	$ 5.06	$ 7.12	$ 7. 89
Total return	(14.61 ) %	( 36.45 ) %	( 23.10 ) %	40.71 %	10.81 %
Ratios/Supplemental Data
Net assets, end of period (in thousands )	$ 309,686	$ 146,406	$ 101,879	$ 170,707	$ 199,874
Ratio of expenses to average net assets	1. 09 %	1. 2 5 %	1. 35 %	1. 38 %	1. 21 %
Ratio of net income to average net assets	( 0. 38 ) %	(0.43 ) %	( 0. 6 0 ) %	( 0.4 3 ) %	( 0. 26 ) %
Portfolio turnover rate	59 .5 %	45.8 %	104.2 %	254.7 %	212.4 %

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<R> Table 6 Financial Highlights (continued)

	Year ended October 31
Latin America Fund	2000	200 1	200 2	200 3	200 4

Net asset value, beginning of period	$ 8.03	$ 10.19	$ 8.21	$ 7.25	$ 10.32
Income From Investment Operations
Net investment income	0. 0 5	0. 15	0. 18	0. 13	0. 26
Net gains or losses on securities (both realized and unrealized)	2.14	( 2.0 9 )	( 0.79 )	2.94	3.31
Total from investment operations	2.19	( 1.94 )	( 0.61 )	3.0 7	3.57
Less Distributions
Dividends (from net investment income)	(0.04 )	(0.04 )	(0.29 )	—	(0.16 )
Distributions (from capital gains)	—	—	(0.06 )	—	—
Returns of capital	—	—	—	—	—
Total distributions	( 0.04 )	( 0.04 )	(0.35 )	—	(0.16 )
Redemption fees added to paid-in-capital	0. 01	—	—	—	0.01
Net asset value, end of period	$ 10.19	$ 8.21	$ 7.25	$ 10.32	$ 13.74
Total return	27.41 %	( 19.10 ) %	( 8.15 ) %	42.34 %	35.07 %
Ratios/Supplemental Data
Net assets, end of period (in thousands )	$ 228,655	$ 155,239	$ 126,905	$ 166,059	$ 241,913
Ratio of expenses to average net assets	1 . 46 %	1. 49 %	1 .53 %	1.55 %	1.41 %
Ratio of net income to average net assets	0. 42 %	1.40 %	1.88 %	1.55 %	2.22 %
Portfolio turnover rate	27.5 %	29.9 %	21.0 %	27.4 %	34.8 %

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<R> Table 6 Financial Highlights (continued)

	Year ended October 31
New Asia Fund	2000	200 1	200 2	200 3	200 4

Net asset value, beginning of period	$ 7.20	$ 7.12	$ 5.11	$ 5.68	$ 8.14
Income From Investment Operations
Net investment income	0. 0 4	0. 03	0. 0 3	0. 0 6	0.10
Net gains or losses on securities (both realized and unrealized)	(0.08 ) a	( 2.04 )	0.54	2. 44	0.65
Total from investment operations	(0.04 )	( 2.01 )	0.57	2. 5 0	0.75
Less Distributions
Dividends (from net investment income)	(0.0 4 )	—	—	(0. 0 4 )	(0. 0 6 )
Distributions (from capital gains)	—	—	—	—	(0.01 )
Returns of capital	—	—	—	—	—
Total distributions	( 0. 04 )	—	—	(0. 0 4 )	(0. 0 7 )
Net asset value, end of period	$ 7.12	$ 5.11	$ 5.68	$ 8.14	$ 8.82
Total return	(0.68 ) %	( 28.23 ) %	11 .15 %	44.30 %	9.28 %
Ratios/Supplemental Data
Net assets, end of period (in million s )	$ 875	$ 527	$ 562	$ 826	$ 877
Ratio of expenses to average net assets	1. 08 %	1. 2 2 %	1. 17 %	1. 17 %	1. 09 %
Ratio of net income to average net assets	0. 41 %	0. 4 9 %	0. 53 %	1.06 %	1. 12 %
Portfolio turnover rate	52.2 %	49.0 %	72.0 %	71 .7 %	7 2.3 %

</R>

a The amount presented is calculated pursuant to a methodology prescribed by the Securities and Exchange Commission for a share outstanding throughout the period. This amount is inconsistent with the fund`s aggregate gains and losses because of the timing of sales and redemptions of fund shares in relation to fluctuating market values for the investment portfolio.

PAGE 45

Investing With T. Rowe Price 4

Account Requirements and Transaction Information

Tax Identification
Number

We must have your correct Social Security or tax identification number on a signed New Account Form or W-9 Form. Otherwise, federal law requires the funds to withhold a percentage of your dividends, capital gain distributions, and redemptions, and may subject you to an IRS fine. If this information is not received within 60 days after your account is established, your account may be redeemed at the fund`s net asset value ( NAV ) on the redemption date.

Transaction Confirmations

We send immediate confirmations for most of your fund transactions, but some, such as systematic purchases and dividend reinvestments, are reported on your account statement. Please review confirmations and statements as soon as you receive them and promptly report any discrepancies to Shareholder Services.

Employer-Sponsored Retirement Plans and Institutional Accounts

T. Rowe Price
Trust Company
1-800-492-7670

Transaction procedures in the following sections may not apply to employer-sponsored retirement plans and institu tional accounts. For procedures regarding employer-sponsored retirement plans, please call T. Rowe Price Trust Com pany or consult your plan administrator. For institutional account procedures, please call your designated account manager or service representative.

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We do not accept third-party checks, except for IRA r ollover checks that are properly endorsed. In addition, T. Rowe Price does not accept purchases made by credit card check , cash , or traveler ` s checks .

</R>

Opening a New Account

$2,500 minimum initial investment; $1,000 for retirement plans or gifts or transfers to minors (UGMA / UTMA) accounts ($25,000 minimum initial investment for Summit Funds only)

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Important Information About Opening an Account

</R>

<R>

Pursuant to federal law, all financial institutions must obtain, verify, and record information that identifies each person or entity that opens an account.

</R>

<R>

When you open an account, you will be asked for the name, residential street address, date of birth, and Social Security number or tax identification number for each account owner and person(s) opening an account on behalf of others, such as custodians, agents, trustees , or other authorized signers. Entities are also required to provide documents such as articles of incorporation, partnership agreements, trust documents, and other applicable documents.

</R>

<R>

We will use this information to verify the identity of the person(s)/entity opening the account. We will not be able to open your account until we receive all of this information. If we are unable to verify your identity , we are authorized to take any action permitted by law. (See Rights Reserved by the Funds.)

</R>

Account Registration

If you own other T. Rowe Price funds, be sure to register any new account just like your existing accounts so you can exchange among them easily. (The name and account type would have to be identical.)

For joint accounts or other types of accounts owned or controlled by more than one party, either owner/party has com plete authority to act on behalf of all and give instructions concerning the account without notice to the other party. T. Rowe Price may, in its sole discretion , require written authorization from all owners/parties to act on the account for certain transactions (for example, to transfer ownership).

By Mail

Please make your check payable to T. Rowe Price Funds (otherwise it will be returned) and send your check, together with the New Account Form, to the appropriate address below:

via U.S. Postal Service

T. Rowe Price Account Services
P.O. Box 17300
Baltimore, MD 21297-1300

via private carriers/overnight services

T. Rowe Price Account Services
Mailcode 17300
4515 Painters Mill Road
Owings Mills, MD 21117-4903

By Wire

Call Investor Services for an account number and give the following wire information to your bank:

Receiving Bank: PNC Bank, N.A. (Pittsburgh)
Receiving Bank ABA#: 043000096
Beneficiary: T. Rowe Price [ fund name ]
Beneficiary Account: 1004397951
Originator to Beneficiary Information (OBI):
name of owner(s) and account number

In order to obtain an account number, you must supply the name, date of birth, Social S ecurity or employer identifi cation number , and residential or business street address for each owner on the account.

Complete a New Account Form and mail it to one of the appropriate T. Rowe Price addresses listed under "By Mail."

Note: Investment will be made, but services may not be established and IRS penalty withholding may occur until we receive a signed New Account Form.

PAGE 47

By Exchange

Call Shareholder Services or use Tele*Access or your personal computer (see Automated Services under Information About Your Services). The new account will have the same registration as the account from which you are exchanging. Services for the new account may be carried over by telephone request if they are preauthorized on the existing account. For limitations on exchanging, see the explanation of Excessive Trading under Transaction Procedures and Special Requirements.

In Person

Drop off your New Account Form at any location listed on the back cover and obtain a receipt.

Purchasing Additional Shares

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$100 minimum additional purchase ($1,000 for Summit Funds); $50 minimum for retirement plans and gifts or transfers to minors (UGMA/UTMA) accounts; $50 minimum for Automatic Asset Builde r ( $ 100 for Summit Funds )

</R>

By ACH Transfer

Use Tele*Access or your personal computer or call Shareholder Services if you have established electronic transfers using the ACH system.

By Wire

Call Shareholder Services or use the wire instructions listed in Opening a New Account.

By Mail

1. Make your check payable to T. Rowe Price Funds (otherwise it may be returned).

2. Mail the check to us at the following address with either a fund reinvestment slip or a note indicating the fund you want to buy and your fund account number.

3. Remember to provide your account number and the fund name on the memo line of your check.

via U.S. Postal Service

T. Rowe Price Account Services
P.O. Box 17300
Baltimore, MD 21297-1300

(For mail via private carriers and overnight services, see previous section.)

By Automatic
Asset Builder

Fill out the Automatic Asset Builder section on the New Account or Shareholder Services Form.

Exchanging and Redeeming Shares

Exchange Service

You can move money from one account to an existing identically registered account or open a new identically regis tered account. Remember, exchanges are purchases and sales for tax purposes. (Exchanges into a state tax-free fund are limited to investors living in states where the fund is registered.)

Redemptions

Redemption proceeds can be mailed to your account address, sent by ACH transfer to your bank, or wired to your bank (provided your bank information is already on file). For charges, see Electronic Transfers — By Wire under Infor mation About Your Services. Please note that large redemption requests initiated through automated services may be routed to a service representative.

If you request to redeem a specific dollar amount, and the market value of your account is less than the amount of your request, we will redeem all shares from your account.

<R>

Some of the T. Rowe Price funds may impose a redemption fee . Check the fund`s prospectus. The fee is paid to the fund.

</R>

For redemptions by check or electronic transfer, please see Information About Your Services.

By Phone

Call Shareholder Services

If you find our phones busy during unusually volatile markets, please consider placing your order by your personal computer or Tele*Access (if you have previously authorized these services), mailgram, or express mail. For exchange policies, please see Transaction Procedures and Special Requirements — Excessive Trading.

By Mail

For each account involved, provide the account name, number, fund name, and exchange or redemption amount. For exchanges, be sure to specify any fund you are exchanging out of and the fund or funds you are exchanging into. T. Rowe Price may require a signature guarantee of all registered owners (see Transaction Procedures and Special Requirements — Signature Guarantees). Please use the appropriate address below:

For nonretirement and IRA accounts:

via U.S. Postal Service

T. Rowe Price Account Services
P.O. Box 17302
Baltimore, MD 21297-1302

via private carriers/overnight services

T. Rowe Price Account Services
Mailcode 17302
4515 Painters Mill Road
Owings Mills, MD 21117-4903

For employer-sponsored retirement accounts:

via U.S. Postal Service

T. Rowe Price Trust Company
P.O. Box 17479
Baltimore, MD 21297-1479

via private carriers/overnight services

T. Rowe Price Trust Company
Mailcode 17479
4515 Painters Mill Road
Owings Mills, MD 21117-4903

Requests for redemptions from employer-sponsored retirement accounts may be required to be in writing; please call T. Rowe Price Trust Company or your plan administrator for instructions. IRA distributions may be requested in writing or by telephone; please call Shareholder Services to obtain an IRA Distribution Form or an IRA Shareholder Services Form to authorize the telephone redemption service.

Rights Reserved by the Funds

<R>

T. Rowe Price funds and their agents reserve the following rights: (1) to waive or lower investment minimums; (2) to accept initial purchases by telephone or mailgram; (3) to refuse any purchase or exchange order; (4) to cancel or rescind any purchase or exchange order placed through an intermediary, no later than the business day after the order is received by the intermediary (including, but not limited to, orders deemed to result in excessive trading, market tim ing, or 5% ownership) ; (5) to cease offering fund shares at any time to all or certain groups of investors; ( 6 ) to freeze any account and suspend account services when notice has been received of a dispute between the registered or benefi cial account owners or there is reason to believe a fraudulent transaction may occur; ( 7 ) to otherwise modify the condi tions of purchase and any services at any time; ( 8 ) to waive any wire , small account, maintenance , or fiduciary fees charged to a group of shareholder s ; ( 9 ) to act on instructions reasonably believed to be genuine ; and ( 10 ) to involun tarily redeem your account at the net asset value calculated the day the account is redeemed, in cases of threatening conduct , suspected fraudulent or illegal activity , or if the fund or its agent is unable , through its procedures, to verify the identity of the person(s) or entity opening an account .

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PAGE 49

<R>

These actions will be taken when, in the sole discretion of management, they are deemed to be in the best interest of the fund or if required by law .

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In an effort to protect T. Rowe Price funds from the possible adverse effects of a substantial redemption in a large account, as a matter of general policy, no shareholder or group of shareholders controlled by the same person or group of persons will knowingly be permitted to purchase in excess of 5% of the outstanding shares of a fund, except upon approval of the fund`s management.

information about your Services

Shareholder Services
1-800-225-5132

Investor Services
1-800-638-5660

Many services are available to you as a shareholder; some you receive automatically, and others you must authorize or request on the New Account Form. By signing up for services on the New Account Form rather than later on, you avoid having to complete a separate form and obtain a signature guarantee. This section discusses some of the services cur rently offered. Our Services Guide, which we mail to all new shareholders, contains detailed descriptions of these and other services.

Note: Corporate and other institutional accounts require documents showing the existence of the entity to open an account . Certain other fiduciary accounts (such as trusts or power of attorney arrangements) require documentation, which may include an original or certified copy of the trust agreement or power of attorney to open an account . For more information, call Investor Services.

Retirement Plans

We offer a wide range of plans for individuals, institutions, and large and small businesses: Traditional IRAs, Roth IRAs, SIMPLE IRAs, SEP-IRAs, Keoghs (profit sharing, money purchase pension), 401(k)s, and 403(b)(7)s. For information on IRAs or our no-load variable annuity, call Investor Services. For information on all other retirement plans, please call our Trust Company at 1 800 492 7670.

Investing for College Expenses

We can help you save for future college expenses on a tax-advantaged basis.

Education Savings Account s (ESAs) (formerly known as Education IRAs)

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Invest up to $2,000 a year per beneficiary depending on your annual income ; account earnings are federal income tax- free when used for qualified expenses .

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529 Plans

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T. Rowe Price offers three 529 plans: the T. Rowe Price College Savings Plan (a national plan sponsored by the Education Trust of Alaska), t he Maryland College Investment Plan, and the University of Alaska College Savings Plan. Account earnings are currently federal income tax-free when used for qualified expenses. For more information on the T. Rowe Price and University of Alaska plan s , call toll - free 1-866-521-1894. For more information on the Maryland College Investment Plan , call 1-888-4-MD-GRAD.

</R>

Automated Services

Tele*Access
1-800-638-2587
24 hours, 7 days

Tele*Access

24-hour service via a toll-free number enables you to (1) access information on fund performance, prices, distributions, account balances, and your latest transaction; (2) request checks, prospectuses, services forms, duplicate statements, and tax forms; and (3) buy, sell, and exchange shares in your accounts (see Electronic Transfers in this section).

Web Address
troweprice.com

Online Account Access

You can sign up online to conduct account transactions through our Web site on the Internet. If you subscribe to America Online ® , you can access our Web site via keyword "T. Rowe Price" and conduct transactions in your account.

Plan Account Line
1-800-401-3279

This 24-hour service is similar to Tele*Access but is designed specifically to meet the needs of retirement plan inves tors.

By Telephone and
In Person

Buy, sell, or exchange shares by calling one of our service representatives or by visiting one of our investor center loca tions whose addresses are listed on the back cover.

Electronic Transfers

By ACH

With no charges to pay, you can move as little as $100 or as much as $ 250,000 between your bank account and fund account using the ACH system. Enter instructions via Tele*Access or your personal computer, or call Shareholder Ser vices.

By Wire

Electronic transfers can be conducted via bank wire. There is a $5 fee for wire redemptions under $5,000, and your bank may charge for incoming or outgoing wire transfers regardless of size.

Checkwriting

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(Not available for equity funds or the Emerging Markets Bond, High Yield, International Bond, or U.S. Bond Index Funds) You may write an unlimited number of free checks on any money market fund and most bond funds, with a minimum of $500 per check. Keep in mind, however, that a check results in a redemption; a check written on a bond fund will create a taxable event which you and we must report to the IRS.

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Automatic Investing

Automatic Asset Builder

You can instruct us to move $50 ($100 for Summit Funds) or more from your bank account, or you can instruct your employer to send all or a portion of your paycheck to the fund or funds you designate.

Automatic Exchange

You can set up systematic investments from one fund account into another, such as from a money fund into a stock fund.

t. ROWE PRICE Brokerage

To Open an Account
1-800-638-5660

For Existing
Brokerage Customers
1-800-225-7720

Investments available through our brokerage service include stocks, options, bonds, and others at commission sav ings over full-service brokers . * We also provide a wide range of services, including:

Automated Telephone and Computer Services

You can enter stock and option orders, access quotes, and review account information around the clock by phone with Tele-Trader or via the Internet with Account Access-Brokerage. For stock trades entered through Tele-Trader, you will pay a commission of $35 for up to 1,000 shares plus $.02 for each share over 1,000 . For stock trades entered through Account Access-Brokerage, you will pay a commission of $19.95 for up to 1,000 shares plus $.02 for each share over 1,000. Option trades entered through Account Access-Brokerage or Tele-Trader save you 10% over our standard com

PAGE 51

mission schedule. All trades are subject to a $ 40 minimum commission except stock trades placed through Account Access-Brokerage and Tele-Trader . All limit and stop orders entered, regardless of order entry means, are subject to a $5 order handling fee assessed upon execution.

Investor Information

A variety of informative reports, such as our Brokerage Insights series , as well as access to online research tools , can help you better evaluate economic trends and investment opportunities.

Dividend Reinvestment Service

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If you elect to participate in this service, the cash dividends from the eligible securities held in your account will auto matically be reinvested in additional shares of the same securities free of charge. Most securities listed on national secu rities exchanges or N ASDAQ are eligible for this service.

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*Services vary by firm.

T. Rowe Price Brokerage is a division of T. Rowe Price Investment Services, Inc., Member NASD/SIPC.

Investment Information

To help you monitor your investments and make decisions that accurately reflect your financial goals, T. Rowe Price offers a wide variety of information in addition to account statements. Most of this information is also available on our Web site at troweprice.com.

A note on mailing procedures: If two or more members of a household own the same fund, we economize on fund expenses by sending only one fund report and prospectus. If you need additional copies or do not want your mailings to be "householded," please call Shareholder Services at 1-800-225-5132 or write to us at P.O. Box 17630, Baltimore, M D 21297-1630.

Shareholder Reports

Fund managers` annual and semiannual reviews of their strategies and performance.

The T. Rowe Price Report

A quarterly investment newsletter discussing markets and financial strategies and including the Performance Update, a review of all T. Rowe Price fund results.

Insights

Educational reports on investment strategies and financial markets.

Investment Guides

Asset Mix Worksheet, Diversifying Overseas: A T. Rowe Price Guide to International Investing, Managing Your Retirement Distribution, Retirement Readiness Guide, and Retirement Planning Kit .

T. rowe price Privacy Policy

In the course of doing business with T. Rowe Price, you share personal and financial information with us. We treat this information as confidential and recognize the importance of protecting access to it.

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You may provide information when communicating or transacting with us in writing, electronically, or by phone. For instance, information may come from applications, requests for forms or literature, and your transactions and account positions with us. On occasion, such information may come from consumer reporting agencies and those providing services to us.

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We do not sell information about current or former customers to any third parties, and we do not disclose it to third parties unless necessary to process a transaction, service an account, or as otherwise permitted by law. We may share information within the T. Rowe Price family of companies in the course of providing or offering products and ser vices to best meet your investing needs. We may also share that information with companies that perform adminis trative or marketing services for T. Rowe Price, with a research firm we have hired, or with a business partner, such as a bank or insurance company with whom we are developing or offering investment products. When we enter into such a relationship, our contracts restrict the companies` use of our customer information, prohibiting them from sharing or using it for any purposes other than those for which they were hired.

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We maintain physical, electronic, and procedural safeguards to protect your personal information. Within T. Rowe Price, access to such information is limited to those who need it to perform their jobs, such as servicing your accounts, resolving problems, or informing you of new products or services. Finally, our Code of Ethics, which applies to all employees, restricts the use of customer information and requires that it be held in strict confidence.

___________________________________________________________________

This Privacy Policy applies to the following T. Rowe Price family of companies: T. Rowe Price Associates, Inc.; T. Rowe Price Advisory Services, Inc.; T. Rowe Price Investment Services, Inc.; T. Rowe Price Savings Bank; T. Rowe Price Trust Company; and the T. Rowe Price Funds.

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To help you achieve your financial goals, T. Rowe Price offers a wide range of stock, bond, and money market investments, as well as convenient services and
informative reports.

For mutual fund or T. Rowe Price Brokerage information

Investor Services

1-800-638-5660

For existing accounts

Shareholder Services

1-800-225-5132

For the hearing impaired

1-800-367-0763

For performance, prices,
account information, or
to conduct transactions

Tele*Access ®

24 hours, 7 days
1-800-638-2587

Internet address

troweprice.com

Plan Account Line

For retirement plan
investors: The
appropriate 800
number appears on your retirement account statement.

A fund Statement of Additional Information has been filed with the Securities and Exchange Commission and is incorpo rated by reference into this pro spectus. Further information about fund investments, including a review of market conditions and the manager`s recent strategies and their impact on performance, is available in the annual and semiannual shareholder reports. To obtain free copies of any of these documents, or for shareholder inquiries, call
1-800-638-5660.

Fund information and Statements of Additional Information are also available from the Public Reference Room of the Securities and Exchange Commission. Infor-
mation on the operation of the Public Reference Room may be obtained by calling the SEC at 1-202-942-8090. Fund reports and other fund information are available on the EDGAR Database on the SEC`s Internet site at http://www.sec.gov. Copies of this information may be obtained, after paying a duplicating fee, by electronic request at publicinfo@sec.gov, or by writing the Public Reference Room, Washington D.C. 20549-0102.

Investor Centers

For directions, call
1-800-225-5132 or
visit our Web site

Baltimore Area

Downtown

105 East Lombard Street

Owings Mills

Three Financial Center
4515 Painters Mill Road

Boston Area

386 Washington Street
Wellesley

Chicago Area

1900 Spring Road
Suite 104
Oak Brook

Colorado Springs

2260 Briargate Parkway

Los Angeles Area

Warner Center
21800 Oxnard Street
Suite 270
Woodland Hills

New Jersey/New York Area

51 JFK Parkway, 1st Floor
Short Hills, New Jersey

San Francisco Area

1990 N. California Boulevard
Suite 100
Walnut Creek

Tampa

4211 W. Boy Scout Boulevard
8th Floor

Washington, D.C. Area

Downtown

900 17th Street, N.W.
Farragut Square

Tysons Corner

1600 Tysons Boulevard
Suite 150

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C01-040 3/1/05

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T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202

1940 Act File No. 811-2958

March 1, 2005

Prospectus

T. Rowe Price

International Growth & Income Fund — Advisor Class

A stock fund s eeking long-term capital growth and a reasonable level of income through investments in non-U.S. companies . This class of shares is sold only through financial intermediaries.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

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1	About the Fund
	Objective, Strategy, Risks, and Expenses	1
	Other Information About the Fund	5

2	Information About Accounts in T. Rowe Price Funds
	Pricing Shares and Receiving Sale Proceeds	7
	Useful Information on Distributions and Taxes	11
	Transaction Procedures and Special Requirements	15
	Distribution, Shareholder Servicing, and Recordkeeping Fees	17

3	More About the Fund
	Organization and Management	18
	Understanding Performance Information	20
	Investment Policies and Practices	20
	Disclosure of Fund Portfolio Information	25
	Financial Highlights	2 6

4	Investing With T. Rowe Price
	Account Requirements and Transaction Information	2 8
	Purchasing Additional Shares	2 9
	Exchanging and Redeeming Shares	30
	Rights Reserved by the Funds	30
	T. Rowe Price Privacy Policy	3 2

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T. Rowe Price International Funds, Inc.

T. Rowe Price International Growth & Income Fund — Advisor Class

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T. Rowe Price International, Inc. managed $ 23.6 billion in foreign stocks and bonds as of December 31, 2004 , through its offices in Baltimore, London, Singapore, Hong Kong, Buenos Aires, and Paris.

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About the Fund 1

objective, strategy, risks, and expenses

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A word about the fund`s name and structure. The Advisor Class is a share class of its respective T. Rowe Price fund and is not a separate mutual fund. The Advisor Class shares are designed to be sold only through brokers, dealers, banks, insurance companies, and other financial intermediaries that provide various distribution and administrative services .

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What is the fund`s objective?

The fund seeks long-term growth of capital and reasonable income through investments primarily in the common stocks of well-established, dividend-paying non-U.S. companies.

What is the fund`s principal investment strategy?

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We expect to invest substantially all of the fund`s assets outside the U.S. and to diversify broadly, primarily among the world`s developed countries. The fund will invest primarily (at least 65% of total assets) in the stocks of large dividend-paying , well-established companies that have favorable prospects for capital appreciation, as determined by T. Rowe Price International , Inc. ("T. Rowe Price International") . Investments in emerging markets will be modest and limited to more mature developing countries. Our investing style is value-oriented, although we also look for earnings growth potential and catalysts for value to be realized. Country and sector allocations are driven both by stock selection and our assessment of top-down, fundamental prospects.

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While the fund invests primarily in common stocks, it may also purchase other securities, including futures and options, in keeping with the fund`s objective.

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The fund may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities.

What are the main risks of investing in the fund?

As with all stock funds, the fund`s share price can fall because of weakness in one or more of its primary equity markets, a particular industry, or specific holdings. Stock markets can decline for many reasons, including adverse political or economic developments, changes in investor psychology, or heavy institutional selling. The prospects for an industry or company may deteriorate because of a variety of factors, including disappointing earnings or changes in the competitive environment. In addition, our assessment of companies held in the fund may prove incorrect, resulting in losses or poor performance , even in rising markets.

Funds that invest overseas generally carry more risk than funds that invest strictly in U.S. assets. Even invest ments in countries with highly developed economies are subject to significant risks. Some particular risks affect ing this fund include the following:

Currency risk This refers to a decline in the value of a foreign currency versus the U.S. dollar, which reduces the dollar value of securities denominated in that currency. The overall impact on a fund`s holdings can be signifi cant, unpredictable, and long lasting , depending on the currencies represented in the portfolio and how each one appreciates or depreciates in relation to the U.S. dollar and whether currency positions are hedged. Under normal conditions, the fund does not engage in extensive foreign currency hedging programs. Further, exchange rate movements are volatile , and it is not possible to effectively hedge the currency risks of many developing countries.

Geographic risk The economies and financial markets of certain regions — such as Latin America and Asia — can be interdependent and may all decline at the same time.

Emerging market risk To the extent the fund invests in emerging markets, it is subject to greater risk than a fund investing only in developed markets. The economic and political structures of developing nations, in most cases, do not compare favorably with the U.S. or other developed countries in terms of wealth and stability, and their financial markets often lack liquidity. Fund performance will likely be hurt by exposure to nations in the midst of hyperinflation, currency devaluation, trade disagreements, sudden political upheaval, or interventionist gov ernment policies. Significant buying or selling by a few major investors may also heighten the volatility of emerging markets. These factors make investing in such countries significantly riskier than in other countries , and any one of the factors could cause the fund`s share price to decline.

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While certain countries have made progress in economic growth, liberalization, fiscal discipline, and political and social stability, there is no assurance these trends will continue.

Futures/options risk To the extent the fund uses futures and options, it is exposed to additional volatility and potential losses.

As with any mutual fund, there can be no guarantee the fund will achieve its objective.

The fund`s share price may decline, so when you sell your shares, you may lose money .

How can I tell if the fund is appropriate for me?

Consider your investment goals, your time horizon for achieving them, and your tolerance for risk. If you are investing through an intermediary, are comfortable with the special risks that accompany international invest ing, seek long-term capital appreciation, and can accept the risks associated with common stocks, including both growth and value stocks, the fund could be an appropriate part of your overall investment strategy.

The fund can be used in both regular and tax-deferred accounts, such as IRAs.

The fund should not represent your complete investment program or be used for short-term trading purposes.

How has the fund performed in the past?

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The bar chart showing calendar year returns and the average annual total return s table indicate risk by illustrating how much returns can differ from one year to the next and how the fund performance compares with that of a comparable market index. Fund past returns (before and after taxes) are not necessarily an indication of future performance.

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The fund can also experience short-term performance swings, as shown by the best and worst calendar quarter returns during the years depicted .

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<R> Table 1 Average Annual Total Returns

	Periods ended December 31, 2004
	1 year	Since inception (9/30/02)
International Growth & Income Fund — Advisor Class
Return s before taxes	23.27 %	30.35 %
Return s after taxes on distributions	23.16	30.15
Return s after taxes on distributions and sale of fund shares	15.42	26.34
MSCI EAFE Index	20.70	29.47
Lipper International Multi-Cap Value Funds Average	21.63	30.42

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MSCI EAFE Index tracks the stocks of about 1,000 companies in Europe, Australasia, and the Far East (EAFE).

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What fees and expenses will I pay?

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<R> Table 2 Fees and Expenses of the Advisor Class*

Shareholder fees (fees paid directly from your investment)
Redemption fee	2.00 % a
Annual fund operating expenses (expenses that are deducted from fund assets)
Management fee	0.66 %
Distribution and service (12b-1) fees	0.25
Other expenses	0.33
Total annual fund operating expenses	1.24
Fees waiver/reimbursement	0.09 % b
Net expenses	1.15 % b

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* Redemption proceeds of less than $5,000 sent by wire are subject to a $5 fee paid to the fund.

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a On shares purchased and held for less than 90 days (details under Contingent Redemption Fee in Pricing Shares and Receiving Sale Proceeds) .

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b Effectiv e March 1, 2004, T. Rowe Price International is contractually obligated to bear any expenses and/or waive its f ees through February 28, 2006, that would cause the class`s ratio of expenses to average net assets to exceed 1.15%. Expenses paid or assumed or fees waived under this agreement are sub ject to reimbursement to T. Rowe Price International by the fund whenever the class`s expense ratio is below 1.15%; however, no reimbursement will be made after February 29, 2008, or if it would result in the expense ratio exceeding 1.15%. Any amounts reimbursed will have the effect of increasing fees oth erwise paid by the class.

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Example. The following table gives you an idea of how expense ratios may translate into dollars and helps you to compare the cost of investing in this class with that of other mutual funds. Although your actual costs may be higher or lower, the table shows how much you would pay if operating expenses remain the same, the expense limitation currently in place is not renewed, you invest $10,000, earn a 5% annual return, hold the investment for the following periods , and then redeem:

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1 year	3 years	5 years	10 years
$ 117	$ 381	$ 669	$ 1,489

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other INFORMATION about the fund

What are some of the potential rewards of investing overseas through the fund?

Investing abroad increases the opportunities available to you. Some foreign countries may have greater potential for economic growth than the U.S. Investing a portion of your overall portfolio in foreign stock funds can enhance your diversification while providing the opportunity to boost long-term returns.

How does the portfolio manager try to reduce risk?

The principal tools we use to try to reduce risk are intensive research and limiting exposure to any one industry or company. Currency hedging techniques may be used from time to time.

The impact on the fund`s share price from a drop in the price of a particular stock is reduced substantially by investing in a portfolio with dozens of different companies. Likewise, the impact of unfavorable developments in a particular country is reduced when investments are spread among many countries. However, the economies and financial markets of countries in a certain region may be influenced heavily by one another.

Is there other information I can review before making a decision?

Investment Policies and Practices in Section 3 discusses various types of portfolio securities the fund may pur chase as well as types of management practices the fund may use.

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Information About Accounts in T. Rowe Price Funds 2

As a T. Rowe Price shareholder, you will want to know about the following policies and procedures that apply to all Advisor Class accounts.

Pricing Shares and Receiving Sale Proceeds

How and when shares are priced

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The share price (also called "net asset value" or NAV per share) for each class of shares is calculated at the close of the New York Stock Exchange, normally 4 p.m. ET, each day that the e xchange is open for business. To calculate the NAV, the fund`s assets are valued and totaled, liabilities are subtracted, and each class`s proportionate share of the balance, called net assets, is divided by the number of shares outstanding of that class. Market values are used to price stocks and bonds. Market values represent the prices at which securities actually trade or evaluations based on the judgment of the fund`s pricing services. If a market value for a security is not available, the fund will make a good faith effort to assign a fair value to the security.

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The fund uses outside pricing services to provide it with closing market prices and information used for adjust ing those prices. The fund cannot predict how often it will use closing prices and how often it will adjust those prices. As a means of evaluating its fair value process, the fund routinely compares closing market prices , the next day`s opening prices in the same markets, and adjusted prices.

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How your purchase, sale, or exchange price is determined

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Advisor Class shares are intended for purchase , and may be held only , through various third-party intermediaries including brokers, dealers, banks, insurance companies, retirement plan recordkeepers, and others. Consult your intermediary to find out about how to purchase, sell, or exchange your shares, trade deadlines , and other appli cable procedures for these transactions. The intermediary may charge a fee for its services.

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The fund may have an agreement with your intermediary that permits the intermediary to accept orders on behalf of the fund until 4 p.m. ET. In such cases, if your order is received by the intermediary in correct form by 4 p.m. ET , transmitted to the fund , and paid for in accordance with the agreement, it will be priced at the next NAV computed after the intermediary received your order.

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Note: The time at which transactions and shares are priced and the time until which orders are accepted by the fund or an intermediary may be changed in case of an emergency or if the New York Stock Exchange closes at a time other than 4 p.m. ET.

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How proceeds are received

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Normally, the fund transmits proceeds to intermediaries for redemption orders received in correct form on either the next or third business day after receipt, depending on the arrangement with the intermediary. Under certain circumstances and when deemed to be in the fund`s best interests, proceeds may not be sent to interme diaries for up to seven calendar days after receipt of the redemption order. You must contact your intermediary about procedures for receiving your redemption proceeds.

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Contingent Redemption Fee

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T. Rowe Price Funds With Redemption Fees
Fund name	Redemption fee	Holding period *
High Yield — Advisor Class	1 %	90 days /3 months
International Bond — Advisor Class	2%	90 days /3 months
International Growth & Income — Advisor Class	2%	90 days /3 months
International Stock — Advisor Class	2%	90 days /3 months
Real Estate — Advisor Class	1%	90 days /3 months
Small-Cap Valu e — Advisor Class	1 %	90 days /3 months

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Redemption fees are paid to a fund to deter short-term trading, offset costs, and protect the fund`s long-term shareholders. All persons holding shares of a T. Rowe Price fund that imposes a redemption fee are subject to the fee , whether the person is holding shares directly with a T. Rowe Price fund, through a retirement plan for which T. Rowe Price serves as recordkeeper, or indirectly through an intermediary, such as a broker, bank, investment adviser, recordkeeper for retirement plan participants, or any other third party .

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* Computation of holding period

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When an investor sells shares of a fund that assesses a redemption fee, T. Rowe Price will use the "first-in, first- out" (FIFO) method to determine the holding period for the shares sold. Under this method, the date of redemption or exchange will be compared with the earliest purchase date of shares held in the account. A redemption fee will be charged on shares sold before the end of the required holding period.

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If you purchase shares through a retirement plan for which T. Rowe Price serves as recordkeeper, the holding period is 90 days. For example, if you redeem your shares on or before the 90th day from the date of purchase, you will be assessed the redemption fee.

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If you purchase shares through an intermediary, consult your intermediary to determine how the holding period (for example, 90 days versus three months) will be applied.

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Transactions n ot s ubject to r edemption f ees

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The T. Rowe Price funds will not assess a redemption fee with respect to certain transactions. At this time, the fol lowing shares of T. Rowe Price funds will not be subject to redemption fees:

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1. Shares redeemed via a n automated systematic withdrawal plan ;

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2. Shares redeemed through or used to establish an automat ed , nondiscretionary rebalancing or asset alloca tion program , if approved in writing by T. Rowe Price;

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3. Shares purchased by the reinvestment of dividends or capital gain distributions; *

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5. Shares redeemed as part of a retirement plan participant-directed distribution including, but not limited to, the following examples:

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a. Death distributions

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b. Hardship withdrawals

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c. Loan s

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d . Employment termination withdrawals

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e. Qualified Domestic Relations Orders (QDROs);

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6. Shares redeemed as part of a retirement plan termination or restructuring;

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7. Shares transferred from one retirement plan to another retirement plan in the same fund; *

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8. Shares converted from one share class to another share class of the same fund; *

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9. Shares redeemed by a fund ( e.g. , for failure to meet account minimums or to cover various fees such as fiduciary fees) ;

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10. Shares purchased by rollover and changes of account registration within the same fund; *

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11. Shares redeemed to return an excess contribution in an IRA account;

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12. Shares purchased by a fund-of-fund product, if approved in writing by T. Rowe Price;

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13. Shares transferred to T. Rowe Price or a third party intermediary acting as a service provider when the age of the shares cannot be determined systematically ; *

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14. Shares redeemed in retirement plans or other products that restrict trading to no more frequently than once per quarter , if approved in writing by T. Rowe Price.

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* Subsequent exchanges of these shares into funds that assess redemption fees will be subject to the fee.

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If your shares are held through an intermediary in an omnibus account,
T. Rowe Price relies on the intermediary to assess the redemption fee on
underlying shareholder accounts. T. Rowe Price seeks to identify intermediaries
establishing omnibus accounts and to enter into agreements requiring the intermediary to assess the redemp tion fees. There are no assurances that T. Rowe Price will be successful in identifying all intermediaries or that the intermediaries will properly assess the fees.

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Implementation

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Recordkeepers for retirement plan participants who were not able to implement the redemption fees by January 1, 2005, because of systems limitations and who provided verification to that effect were permitted to delay the implementation of redemption fees. All such recordkeepers are expected to implement the redemption fees by March 31, 2005 , or implement short-term trading restrictions approved by T. Rowe Price until they have the systems capabilities to assess the fees. Any person purchasing shares through a retirement plan recordkeeper should check with their recordkeeper to determine when purchases will be subject to redemption fees.

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Shares held or purchased prior to January 1, 2005, are subject to the terms for holding periods and early redemption as set forth in the prospectus in effect when the shares were originally purchased. For example, shares of the T. Rowe Price New Asia Fund purchased on December 31, 2004, would be subject to a one-year holding period and 2% redemption fee if sold within one year; shares of the fund purchased on January 3, 2005, would be subject to the new 90-day/three-month holding period and a 2% redemption fee if sold within the 90-day/three-month holding period.

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Useful Information on Distributions and Taxes

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All net investment income and realized capital gains are distributed to shareholders.

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Dividends and Other Distributions

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Dividend and capital gain distributions are reinvested in additional fund shares in your account unless you select another option on your New Account Form. Reinvesting distributions results in compounding, that is, receiving income dividends and capital gain distributions on a rising number of shares.

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No interest will accrue on amounts represented by uncashed distribution s or redemption checks.

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The following table provides details on dividend payments:

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<R> Table 3 Dividend Payment Schedule

Fund	Dividends
Bond funds	Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Declared daily and p aid on the first business day of each month.
Equity Income Fund — Advisor Class	Declared quarterly, if any, in March, June, September, and December. Must be a shareholder on the record date.
Other stock funds	Declared annually, if any, generally in December. Must be a shareholder on the record date.
Retirement Funds : Retirement Income Fund — Advisor Class All others	Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Paid on the first business day of each month. Declared annually, if any, generally in December. Must be a shareholder on the record date.

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If you purchase and sell your shares through an intermediary, consult your intermediary to determine when your shares begin and stop accruing dividends; the information described above may vary.

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Capital gain payments

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A capital gain or loss is the difference between the purchase and sale price
of a security.

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Tax Information

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You should contact your intermediary for the tax information that will be sent to you and reported to the IRS.

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If you invest in the fund through a taxable account, you will generally be subject to tax when:

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You sell fund shares, including an exchange from one fund to another.

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The fund makes a distribution to your account.

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For individual shareholders, a portion of ordinary dividends representing " qualified dividends " received by the fund may be subject to tax at the lower rate applicable to long-term capital gains, rather than ordinary income. You may report it as a qualifying dividend in computing your taxes provided you have held the fund shares on which the dividend was paid for more than 60 days during the 12 1 -day period beginning 60 days before the ex- dividend date.
Ordinary dividends that do not qualify for this lower rate are generally taxable at the investor`s marginal income tax rate. This includes the portion of ordinary
dividends derived from interest, short-term gains, distributions from certain nonqualified foreign corporations, and dividends received by the fund from stocks that were on loan. Little, if any, of the ordinary dividends paid by the Real Estate Fund — Advisor Class or the bond f und Advisor Classes is expected to qualify for this lower rate.

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For corporate shareholders, a portion of ordinary dividends may be eligible for the 70% deduction for divi dends received by corporations to the extent the fund`s income consists of dividends paid by U.S. corporations. Little, if any, of the ordinary dividends paid by the international or bond fund Advisor Classes is expected to qualify for this deduction.

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Note: R egular monthly dividends you receive from the Tax-Free Income Fund — Advisor Class are expected to be exempt from federal income taxes. Exemption is not guaranteed since the fund has the right under certain condi tions to invest in non exempt securities. You must report your total tax-exempt income on IRS Form 1040. The IRS uses this information to help determine the tax status of any Social Security payments you may have received during the year. Tax-exempt dividends paid to Social Security recipients may increase the portion of benefits that are subject to tax.

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If the Tax-Free Income Fund invests in certain "private activity" bonds, shareholders who are subject to the alternative minimum tax (AMT) must include income generated by these bonds in their AMT computation. The portion of this fund`s income dividend that should be included in your AMT calculation, if any, will be reported to you in January.

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Taxes on fund redemptions

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When you sell shares in any fund, you may realize a gain or loss. An exchange from one fund to another is a sale for tax purposes.

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Taxes on fund distributions

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The tax treatment of a capital gain distribution is determined by how long the fund held the portfolio securities, not how long you held the shares in the fund. Short-term (one year or less) capital gain distributions are taxable at the same rate as ordinary income , and gains on securities held more than 12 months are taxed at the lower rates applicable to long-term capital gains . If you realized a loss on the sale or exchange of fund shares that you held six months or less, your short-term loss must be reclassified as a long-term loss to the extent of any long- term capital gain distribution s received during the period you held the shares. If you realize a loss on the sale or exchange of Tax-Free Income Fund — Advisor Class shares held six months or less, your capital loss is reduced by the tax-exempt dividends received on those shares. For funds investing in foreign securities, distributions result ing from the sale of certain foreign currencies,
currency contracts, and the currency portion of gains on debt securities are taxed as ordinary income. Net for eign currency losses may cause monthly or quarterly dividends to be reclassified as a return of capital.

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If the fund qualifies and elects to pass through nonrefundable foreign taxes paid to foreign governments during the year, your portion of such taxes will be reported to you as taxable income. However, you may be able to claim an
offsetting credit or deduction on your tax return for those amounts. There can be no assurance that a fund will meet the requirements to pass through foreign income taxes paid. For the Tax-Free Income Fund — Advisor Class, g ains realized on the sale of market discount bonds with maturities beyond one year may be treated as ordinary income and cannot be offset by other capital losses. To the extent the fund invests in these securities, the likelihood of a taxable gain distribution will be increased.

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Retirement Funds

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Distributions by the underlying funds and changes in asset allocations may result in taxable distributions of ordinary income or capital gains.

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Tax consequences of hedging

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Entering into certain options, futures, swaps, and forward foreign exchange contracts and transactions may result in the application of the mark-to-market and straddle provisions of the Internal Revenue Code. These provisions could result in a fund being required to distribute gains on such transactions even though it did not close the contracts during the year or receive cash to pay such distributions. The fund may not be able to reduce its distributions for losses on such transactions to the extent of unrealized gains in offsetting positions.

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Distributions are taxable whether reinvested in additional shares or received in cash.

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Tax effect of buying shares before a n income dividend or capital gain distribution

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If you buy shares shortly before or on the "record date" — the date that establishes you as the person to receive the upcoming distribution — you may receive a portion of the money you just invested in the form of a taxable distri bution. Therefore, you may wish to find out a fund`s record date before investing. Of course, a fund`s share price may, at any time, reflect undistributed capital gains or income and unrealized appreciation, which may result in future taxable distributions. Such distributions can occur even in a year when the fund has a negative return.

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Transaction Procedures and Special Requirements

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Purchase Conditions for Intermediaries

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Nonpayment

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If the fund receives a check or ACH transfer that does not clear or the payment is not received in a timely man ner, your purchase may be canceled. The intermediary will be responsible for a ny losses or expenses incurred by the fund or transfer agent . The fund and its agents have the right to reject or cancel any purchase, exchange, or redemption due to nonpayment.

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U.S. dollars

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All purchases must be paid for in U.S. dollars; checks must be drawn on U.S. banks.

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Sale (Redemption) Conditions

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Holds on immediate redemptions: 10-day hold

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If an intermediary sells shares that it just purchased and paid for by check or ACH transfer, the fund will process the redemption but will generally delay sending the proceeds for up to 10 calendar days to allow the check or transfer to clear. (The 10-day hold does not apply to purchases paid for by bank wire.)

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Redemptions over $250,000

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Excessive and Short-Term Trading

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T. Rowe Price may bar excessive and short-term traders from purchasing shares.

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Excessive or short-term trading in fund shares may disrupt management of a fund and raise its costs. Short-term traders in funds investing in foreign securities can seek to take advantage of an anticipated difference between the price of the fund`s shares and price movements in overseas markets (see "How and when shares are priced"). While there is no assurance that T. Rowe Price can prevent all excessive and short-term trading, the Board of Directors/Trustees of each fund has adopted the policy set forth below to deter such activity. Persons trading directly with T. Rowe Price or indirectly through intermediaries in violation of this policy or persons believed to be short-term traders may be barred for 90 calendar days or permanently from further purchases of the Price funds . Purchase transaction s placed by such persons are subject to rejection without notice.

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The following types of transactions are exempt from this policy: 1) trades solely in money market funds (exchanges between a money fund and a non money fund are not exempt); 2) systematic purchases and redemptions ; 3) checkwriting redemptions from bond and money funds; and 4) for retirement plan partici pants, payroll contributions, withdrawals, and loans.

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There is no guarantee that T. Rowe Price will detect or prevent excessive or short-term trading.

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Signature Guarantees

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An intermediary may need to obtain a signature guarantee in certain situations and should consult its T. Rowe Price Financial Institution Services representative.

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You can obtain a signature guarantee from most banks, savings institutions,
broker-dealers, and other guarantors acceptable to T. Rowe Price. We cannot accept guarantees from notaries public or organizations that do not provide reimbursement in the case of fraud.

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distribution, shareholder servicing, and recordkeeping fees

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The Advisor Class has adopted a 12b-1 plan under which it pays a fee at the rate of up to 0. 25% of its daily net assets per year to various intermediaries for distribution and servicing of its shares. These payments may be more or less than the costs incurred by the intermediaries. Because the fees are paid from the Advisor Class net assets on an ongoing basis, they will increase the cost of your investment and, over time, could result in your paying more than with other types of sales charges. The Advisor Class may also separately compensate intermediaries at a rate of up to 0.10% of daily net assets per year for various recordkeeping and transfer agent services they per form.

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More About the Fund 3

Organization and Management

How is the fund organized?

T. Rowe Price International Funds, Inc. , (the "corporation") was incorporated in Maryland in 1979. C urrently , the corporation consists of 12 series, each representing a separate pool of assets with different objectives and investment policies. Each is an " open-end investment company, " or mutual fund. Mutual funds pool money received from shareholders of each class into a single portfolio and invest it to try to achieve specified objectives. In 2002, the International Growth & Income Fund issued a separate class of shares known as the Advisor Class.

What is meant by "shares"?

As with all mutual funds, investors purchase shares when they put money in a fund. These shares are part of a fund`s authorized capital stock, but share certificates are not issued.

Each share and fractional share entitles the shareholder to:

Receive a proportional interest in income and capital gain distributions of the class. The income dividends for Advisor Class shares will generally differ from those of the original class to the extent that the expense ratios of the classes differ .

Cast one vote per share on certain fund matters, including the election of fund directors/trustees , changes in fundamental policies, or approval of changes in the fund`s management contract. Shareholders of each class have exclusive voting rights on matters affecting only that class.

Do T. Rowe Price funds have annual shareholder meetings?

Who runs the fund?

General Oversight

The corporation is governed by a Board of Directors /Trustees that meets regularly to review fund investments, performance, expenses, and other business affairs. The Board elects the fund`s officers. The majority of Board members are independent of T. Rowe Price International.

All decisions regarding the purchase and sale of fund investments are made by T. Rowe Price International — specifically by the fund`s portfolio managers .

Investment Manager

T. Rowe Price International is responsible for the selection and management of fund portfolio investments. The U.S. office of T. Rowe Price International is located at 100 East Pratt Street, Baltimore, Maryland 21202.

Portfolio Management

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The individual listed below has day - to - day responsibility for managing the portfolio and developing and execut ing the fund`s investment program.

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Raymond A. Mills , Ph.D. joined T. Rowe Price International in 2000, has been with T. Rowe Price since 1997, and has been managing investments since 1998.

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The Management Fee

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(except the Spectrum Funds, Retirement Funds, Reserve Investment Funds, and any index or private label mutual funds). The group fee schedule (shown below) is graduated, declining as the asset total rises, so share holders benefit from the overall growth in mutual fund assets.

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Group Fee Schedule

0.334%*	First $50 billion

0.305%	Next $30 billion

0.300%	Next $40 billion

0.295%	Thereafter

* Represents a blended group fee rate containing various break points.

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The fund`s portion of the group fee is determined by the ratio of its daily net assets to the daily net assets of all the T. Rowe Price funds described previously. Based on combined T. Rowe Price fund assets of over $ 131 billion at October 29, 2004 , the group fee was 0.3 1 %. The individual fund fee is 0.35%.

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Understanding Performance Information

This section should help you understand the terms used to describe fund performance.

Total Return

Advertisements may include cumulative or average annual total return figures, which may be compared with var ious indices, other performance measures, or other mutual funds.

Cumulative Total Return

Average Annual Total Return

Investment Policies and Practices

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Shareholder approval is required to substantively change fund objectives . Shareholder approval is also required to change certain investment restrictions noted in the following section as "fundamental policies." The managers also follow certain "operating policies" that can be changed without shareholder approval. Shareholders will receive at least 60 days` prior notice of any change in policy requiring the fund to normally invest at least 80% of net assets in common stocks. Fund investment restrictions and policies apply at the time of purchase . A later change in circumstances will not require the sale of an investment if it was proper at the time it was made. (This exception does not apply to the fund`s borrowing policy . )

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as an accurate gauge of the potential risk of such investments. For example, in a given period, a 5% investment in derivatives could have significantly more of an impact on a fund`s share price than its weighting in the portfolio. The net effect of a particular investment depends on its volatility and the size of its overall return in relation to the performance of all other fund investments.

Changes in fund holdings, fund performance, and the contribution of various investments are discussed in the shareholder reports sent to you.

Fund managers have considerable leeway in choosing investment strategies and selecting securities they believe will help achieve fund objectives.

Types of Portfolio Securities

In seeking to meet its investment objective, fund investments may be made in any type of security or instrument (including certain potentially high-risk derivatives described in this section) whose investment characteristics are consistent with its investment program. The following pages describe various types of fund securities and invest ment management practices.

Fundamental policy The fund will not purchase a security if, as a result, with respect to 75% of its total assets, more than 5% of the fund `s total assets would be invested in securities of a single issuer or more than 10% of the outstanding voting securities of the issuer would be held by the fund.

Fund investments are primarily in common stocks and, to a lesser degree, other types of securities as described below.

Common and Preferred Stocks

Convertible Securities and Warrants

Fixed-Income Securities

From time to time, we may invest in corporate and government fixed-income securities. These securities would be purchased in companies that meet fund investment criteria. The price of a bond fluctuates with changes in interest rates, generally rising when interest rates fall and falling when interest rates rise.

Hybrid Instruments

Hybrids can have volatile prices and limited liquidity, and their use may not be successful.

Operating policy Fund investments in hybrid instruments are limited to 10% of total assets.

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Private Placements

Operating policy Fund investments in illiquid securities are limited to 15% of net assets.

Types of Investment Management Practices

Reserve Position

Borrowing Money and Transferring Assets

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Fundamental policy Borrowings may not exceed 33 1 / 3 % of total assets.

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Foreign Currency Transactions

The fund will normally conduct its foreign currency exchange transactions, if any, either on a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency exchange market, or through entering into forward con tracts to purchase or sell foreign currencies. The fund will generally not enter into a forward contract with a term greater than one year.

The fund will generally enter into forward foreign currency exchange contracts only under two circumstances. First, when the fund enters into a contract for the purchase or sale of a security denominated in a foreign currency, it may desire to "lock in" the U.S. dollar price of the security. Second, when T. Rowe Price International believes that the currency of a particular foreign country may move substantially against another currency, it may enter into a forward contract to sell or buy the former foreign currency (or another currency that acts as a proxy for that currency). The contract may approximate the value of some or all of the fund`s portfolio securities denominated in such foreign currency. Under unusual circumstances, the fund may commit a substantial portion or the entire value of its portfolio to the consummation of these contracts. T. Rowe Price International will consider the effect such a commitment to forward contracts would have on the fund`s investment program and the flexibility of the fund to purchase additional securities. Although forward contracts will be used primarily to protect the fund from adverse currency movements, they also involve the risk that anticipated currency movements will not be accurately predicted, and fund total return could be adversely affected as a result.

Futures and Options

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Futures, a type of potentially high-risk derivative, are often used to manage or hedge risk because they enable the investor to buy or sell an asset in the future at an agreed-upon price. Options, another type of potentially high- risk derivative, give the investor the right (where the investor purchases the option), or the obligation (where the investor "writes" or sells the option), to buy or sell an asset at a predetermined price in the future. Futures and options contracts may be bought or sold for any number of reasons, including: to manage exposure to changes in securities prices and foreign curriences; as an efficient means of increasing or decreasing fund overall exposure to

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certain markets; in an effort to enhance income; to protect the value of portfolio securities; and to serve as a cash management tool. Call or put options may be purchased or sold on securities, financial indices, and foreign cur rencies.

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Tax Consequences of Hedging

Hedging may result in the application of the mark-to-market and straddle provisions of the Internal Revenue Code. These provisions could result in an increase (or decrease) in the amount of taxable dividends paid by the fund and could affect whether dividends paid are classified as capital gains or ordinary income.

Lending of Portfolio Securities

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Fundamental policy The value of loaned securities may not exceed 33 1 / 3 % of total assets.

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Portfolio Turnover

Turnover is an indication of frequency of trading . We 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. Each time the fund purchases or sells a security, it incurs a cost. This cost is reflected in the fund`s net asset value but not its operating expenses. The higher the turnover rate, the higher the transaction costs and the greater the impact on the fund`s total return. Higher turnover can also increase the possibility of taxable capital gain distribu tions . The fund`s portfolio turnover rates are shown in the Financial Highlights table.

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Disclosure of Fund Portfolio Information

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The fund`s portfolio holdings are disclosed on a regular basis in its semiannual and annual reports to shareholders as well as Form N-Q which is filed with the SEC within 60 days of the fund`s first and third fiscal quarter-end. In addition, the fund discloses its calendar quarter-end portfolio holdings on troweprice.com 15 calendar days after each quarter. Under certain conditions, up to 5% of the fund`s holdings may be included in this portfolio list without being individually identified. Generally, securities would be omitted from the list if they are being actively bought or sold and it is determined that the quarter-end disclosure of the holding could be harmful to the fund. A security will not be omitted from the list for more than one year. The fund also discloses its largest 10 holdings seven days after each month-end. These holdings are listed in alphabetical order along with the aggregate percentage of the fund`s total assets they represent. The quarter-end portfolio will remain on the Web site for one year. The top 10 list is replaced every six months. A description of the fund`s policy and procedures with respect to the disclosure of portfolio information is in the Statement of Additional Information.

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Financial Highlights

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investment in the class (assuming reinvestment of all dividends and distributions and no payment of account or [ if applicable ] redemption fees). The financial statements in the annual report were audited by the fund`s independent registered public accounting firm , PricewaterhouseCoopers LLP.

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	9/30/02 * through 10/31/02	Year ended October 31
		2003	2004

Net asset value, beginning of period	$ 7.10	$ 7.34	$ 9.41
Income From Investment Operations
Net investment income	—	0.09 a	0.15 a
Net gains or losses on securities (both realized and unrealized)	0.24	2.07	1.89
Total from investment operations	0.24	2.16	2.04
Less Distributions
Dividends (from net investment income)	—	(0.08 )	(0.04 )
Distributions (from capital gains)	—	(0.01 )	—
Returns of capital	—	—	—
Total distributions	—	(0.09 )	(0.04 )
Redemption fees added to paid in capital	—	—	—
Net asset value, end of period	$ 7.34	$ 9.41	$ 11.41
Total return	3.38 % a	29.80 % a	21.74 % a
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$ 103	$ 3,513	$ 37,542
Ratio of expenses to average net assets	1.15 % ab	1.15 % a	1.15 % a
Ratio of net income to average net assets	0.06 % ab	0.71 % a	1.83 % a
Portfolio turnover rate	24.6 %	53.2 %	45.8 %

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* Inception date.

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a Excludes expenses in excess of a 1.15% contractual expense limitation in effect through February 28, 2006 .

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b Annualized.

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Investing With T. Rowe Price 4

Account Requirements and Transaction Information

The information in this section is for use by intermediaries only. Shareholders should contact their intermediary for information regarding the intermediary`s policies on purchasing, exchanging, and redeeming fund shares as well as initial and subsequent investment minimums.

Tax Identification
Number

The intermediary must provide us with its certified Social Security or tax identification number (TIN). Otherwise, federal law requires the funds to withhold a percentage of dividends, capital gain distributions, and redemptions, and may subject the intermediary or account holder to an IRS fine. If this information is not received within 60 days after the account is established, the account may be redeemed at the fund`s net asset value ( NAV ) on the redemption date.

All initial and subsequent investments by intermediaries must be made by bank wire.

Opening a New Account

$2,500 minimum initial investment; $1,000 for retirement plans or gifts or transfers to minors (UGMA / UTMA) accounts

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Important Information About Opening an Account

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Pursuant to federal law, all financial institutions must obtain, verify, and record information that identifies each person or entity that opens an account.

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Intermediaries should call Financial Institution Services for an account number and assignment to a dedicated service representative and give the following wire information to their bank:

In order to obtain an account number, the intermediary must supply the name, Social Security or employer identifica tion number, and business street address for the account.

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Intermediaries should c omplete a New Account Form and mail it to one of the appropriate addresses listed below. I ntermediaries must also enter into a separate agreement with the fund or its agent.

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via U . S . Postal Service

T. Rowe Price Financial Institution Services
P.O. Box 17603
Baltimore, MD 21297-1603

via private carriers/overnight services

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T. Rowe Price Financial Institution Services
Mail Code: OM- 4232
4515 Painters Mill Road
Owings Mills, MD 21117-4842

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Purchasing Additional ShareS

$100 minimum additional purchase; $50 minimum for retirement plans, Automatic Asset Builder, and gifts or transfers to minors (UGMA/UTMA) accounts

By Wire

Intermediaries should call Financial Institution Services or use the wire instructions listed in Opening a New Account.

Exchanging and redeeming ShareS

Exchange Service

You can move money from one account to an existing identically registered account or open a new identically regis tered account. Intermediaries should call their Financial Institution Services representative.

Redemptions

Unless otherwise indicated, redemption proceeds will be wired to the intermediary`s designated bank. Intermediaries should contact their Financial Institution Services representative.

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Some of the T. Rowe Price Advisor Classes may impose a redemption fee. Check the fund`s prospectus. The fee is paid to the fund.

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Rights Reserved by the Funds

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T. Rowe Price funds and their agents reserve the following rights: (1) to waive or lower investment minimums; (2) to accept initial purchases by telephone or mailgram; (3) to refuse any purchase or exchange order; (4) to cancel or rescind any purchase or exchange order placed through an intermediary, no later than the business day after the order is received by the intermediary (including, but not limited to, orders deemed to result in excessive trading, market tim ing, or 5% ownership) upon notice to the shareholder within five business days of the trade or if the written confirma tion has not been received by the shareholder, whichever is sooner; (5) to cease offering fund shares at any time to all or certain groups of investors; ( 6 ) to freeze any account and suspend account services when notice has been received of a dispute between the registered or beneficial account owners or there is reason to believe a fraudulent transaction may occur; ( 7 ) to otherwise modify the conditions of purchase and any services at any time; ( 8 ) to waive any wire , small account, maintenance , or fiduciary fees charged to a group of shareholder s ; ( 9 ) to act on instructions reasonably believed to be genuine ; and ( 10 ) to involuntarily redeem your account at the net asset value calculated the day the account is redeemed, in cases of threatening conduct , suspected fraudulent or illegal activity , or if the fund or its agent is unable , through its procedures, to verify the identity of the person(s) or entity opening an account .

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These actions will be taken when, in the sole discretion of management, they are deemed to be in the best interest of the fund or if required by law .

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T. rowe price Privacy Policy

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We do not sell information about current or former customers to any third parties, and we do not disclose it to third parties unless necessary to process a transaction, service an account, or as otherwise permitted by law. We may share information within the T. Rowe Price family of companies in the course of providing or offering products and ser vices to best meet your investing needs. We may also share that information with companies that perform adminis trative or marketing services for T. Rowe Price, with a research firm we have hired, or with a business partner, such as a bank or insurance company with whom we are developing or offering investment products. When we enter into such a relationship, our contracts restrict the companies ` use of our customer information, prohibiting them from sharing or using it for any purposes other than those for which they were hired.

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___________________________________________________________________

1940 Act File No. 811-2958

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E227-040 3/1/05

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T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202

A fund Statement of Additional Information has been filed with the Secu rities and Exchange Commission and is incorporated by reference into this prospectus. Further information about fund investments, including a review of market conditions and the manager`s recent strategies and their impact on performance, is available in the annual and semiannual share holder reports. To obtain free copies of any of these documents, call your intermediary.

Fund information and Statements of Additional Information are also available from the Public Reference Room of the Securities and Exchange Commission. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-202-942-8090. Fund reports and other fund information are available on the EDGAR Database on the SEC`s Internet site at http://www.sec.gov. Copies of this information may be obtained, after paying a duplicating fee, by electronic request at publicinfo@sec.gov, or by writing the Public Reference Room, Washington D.C. 20549-0102.

March 1, 2005

Prospectus

T. Rowe Price

International Growth & Income Fund — R Class

A stock fund s eeking long-term capital growth and a reasonable level of income through investments in non-U.S. companies . This class of shares is sold only through financial intermediaries.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

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1	About the Fund
	Objective, Strategy, Risks, and Expenses	1
	Other Information About the Fund	5

2	Information About Accounts in T. Rowe Price Funds
	Pricing Shares and Receiving Sale Proceeds	7
	Useful Information on Distributions and Taxes	11
	Transaction Procedures and Special Requirements	14
	Distribution, Shareholder Servicing, and Recordkeeping Fees	16

3	More About the Fund
	Organization and Management	17
	Understanding Performance Information	19
	Investment Policies and Practices	19
	Disclosure of Fund Portfolio Information	24
	Financial Highlights	2 5

4	Investing With T. Rowe Price
	Account Requirements and Transaction Information	2 7
	Purchasing Additional Shares	2 8
	Exchanging and Redeeming Shares	2 9
	Rights Reserved by the Funds	2 9
	T. Rowe Price Privacy Policy	3 1

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T. Rowe Price International Funds, Inc.

T. Rowe Price International Growth & Income Fund — R Class

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T. Rowe Price International, Inc. managed $ 23.6 billion in foreign stocks and bonds as of December 31, 2004 , through its offices in Baltimore, London, Singapore, Hong Kong, Buenos Aires, and Paris.

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About the Fund 1

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objective, strategy, risks, and expenses

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A word about the fund`s name and structure. The R Class is a share class of its respective T. Rowe Price fund and is not a separate mutual fund. The R Class shares are designed to be sold only through various third-party intermediaries that offer employer-sponsored defined contribution retirement plans, including brokers, dealers, banks, insurance companies, retirement plan recordkeepers, and others .

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What is the fund`s objective?

The fund seeks long-term growth of capital and reasonable income through investments primarily in the common stocks of well-established, dividend-paying non-U.S. companies.

What is the fund`s principal investment strategy?

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While the fund invests primarily in common stocks, it may also purchase other securities, including futures and options, in keeping with the fund`s objective.

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The fund may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities.

What are the main risks of investing in the fund?

Currency risk This refers to a decline in the value of a foreign currency versus the U.S. dollar, which reduces the dollar value of securities denominated in that currency. The overall impact on a fund`s holdings can be signifi cant, unpredictable, and long lasting , depending on the currencies represented in the portfolio and how each one appreciates or depreciates in relation to the U.S. dollar and whether currency positions are hedged. Under normal conditions, the fund does not engage in extensive foreign currency hedging programs. Further, exchange rate movements are volatile , and it is not possible to effectively hedge the currency risks of many developing countries.

Geographic risk The economies and financial markets of certain regions — such as Latin America and Asia — can be interdependent and may all decline at the same time.

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While certain countries have made progress in economic growth, liberalization, fiscal discipline, and political and social stability, there is no assurance these trends will continue.

Futures/options risk To the extent the fund uses futures and options, it is exposed to additional volatility and potential losses.

As with any mutual fund, there can be no guarantee the fund will achieve its objective.

The fund`s share price may decline, so when you sell your shares, you may lose money .

How can I tell if the fund is appropriate for me?

The fund can be used in both regular and tax-deferred accounts, such as IRAs.

The fund should not represent your complete investment program or be used for short-term trading purposes.

How has the fund performed in the past?

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The fund can also experience short-term performance swings, as shown by the best and worst calendar quarter returns during the years depicted .

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<R> Table 1 Average Annual Total Returns

	Periods ended December 31, 2004
	1 year	Since inception (9/30/02)
International Growth & Income Fund — R Class
Return s before taxes	22.84 %	29.98 %
Return s after taxes on distributions	22.79	29.80
Return s after taxes on distributions and sale of fund shares	15.10	26.02
MSCI EAFE Index	20.70	29.47
Lipper International Multi-Cap Value Funds Average	21.63	30.42

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MSCI EAFE Index tracks the stocks of about 1,000 companies in Europe, Australasia, and the Far East (EAFE).

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What fees and expenses will I pay?

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Shareholder fees (fees paid directly from your investment)
Redemption fee	2.00 % a
Annual fund operating expenses (expenses that are deducted from fund assets)
Management fee	0.66 %
Distribution and service (12b-1) fees	0.50
Other expenses	0.55
Total annual fund operating expenses	1.71
Fees waiver/reimbursement	0.31 % b
Net expenses	1.40 % b

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* Redemption proceeds of less than $5,000 sent by wire are subject to a $5 fee paid to the fund.

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a On shares purchased and held for less than 90 days (details under Contingent Redemption Fee in Pricing shares and Receiving Sale Proceeds) .

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b Effectiv e March 1, 2004, T. Rowe Price International is contractually obligated to bear any expenses and/or waive its f ees through February 28, 2006, that would cause the class`s ratio of expenses to average net assets to exceed 1.40%. Expenses paid or assumed or fees waived under this agreement are sub ject to reimbursement to T. Rowe Price International by the fund whenever the class`s expense ratio is below 1.40%; however, no reimbursement will be made after February 29, 2008, or if it would result in the expense ratio exceeding 1.40%. Any amounts reimbursed will have the effect of increasing fees oth erwise paid by the class.

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1 year	3 years	5 years	10 years
$ 143	$ 498	$ 889	$ 1,985

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other INFORMATION about the fund

What are some of the potential rewards of investing overseas through the fund?

How does the portfolio manager try to reduce risk?

The principal tools we use to try to reduce risk are intensive research and limiting exposure to any one industry or company. Currency hedging techniques may be used from time to time.

Is there other information I can review before making a decision?

Investment Policies and Practices in Section 3 discusses various types of portfolio securities the fund may pur chase as well as types of management practices the fund may use.

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Information About Accounts in T. Rowe Price Funds 2

As a T. Rowe Price shareholder, you will want to know about the following policies and procedures that apply to all R Class accounts .

Pricing Shares and Receiving Sale Proceeds

How and when shares are priced

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The share price (also called "net asset value" or NAV per share) for each class of shares is calculated at the close of the New York Stock Exchange, normally 4 p.m. ET, each day that the e xchange is open for business. To calculate the NAV, the fund`s assets are valued and totaled, liabilities are subtracted, and each class`s proportionate share of the balance, called net assets, is divided by the number of shares outstanding of that class. Market values are used to price stocks and bonds . Market values represent the prices at which securities actually trade or evaluations based on the judgment of the fund`s pricing services. If a market value for a security is not available, the fund will make a good faith effort to assign a fair value to the security.

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The portfolio securities of funds investing in foreign markets are valued on the basis of the most recent closing market prices at 4 p.m. ET except under the circumstances described below . Most foreign markets close before 4 p.m. For securities primarily traded in the Far East, for example, the most recent closing prices may be as much as 15 hours old at 4 p.m. If a fund determines that developments between the close of the foreign market and 4 p.m. ET will, in its judgment, materially affect the value of some or all of the fund`s securities, the fund will adjust the previous closing prices to reflect what it believes to be the fair value of the securities as of 4 p.m. ET. In deciding whether to make these adjustments, the fund reviews a variety of factors, including developments in foreign markets, the performance of U.S. securities markets , and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities . A fund may also fair value securities in other situations, for example, when a particular foreign market is closed but the fund is open.

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The fund uses outside pricing services to provide it with closing market prices and information used for adjust ing those prices. The fund cannot predict how often it will use closing prices and how often it will adjust those prices. As a means of evaluating its fair value process, the fund routinely compares closing market prices, the next day`s opening prices in the same markets, and adjusted prices.

How your purchase, sale, or exchange price is determined

R Class shares are intended for purchase and may be held only through various third-party intermediaries includ ing brokers, dealers, banks, insurance companies, retirement plan recordkeepers , and others. Consult your inter mediary to find out about how to purchase, sell, or exchange your shares, trade deadlines , and other applicable procedures for these transactions. The intermediary may charge a fee for its services.

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How proceeds are received

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Contingent Redemption Fee

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T. Rowe Price Funds With Redemption Fees
Fund name	Redemption fee	Holding period *
International Growth & Income — R Class	2%	90 days /3 months
International Stock — R Class	2%	90 days /3 months

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Redemption fees are paid to a fund to deter short-term trading, offset costs, and protect the fund`s long-term shareholders. All persons holding shares of a T. Rowe Price fund that imposes a redemption fee are subject to the fee , whether the person is holding shares directly with a T. Rowe Price fund, through a retirement plan for which T. Rowe Price serves as recordkeeper, or indirectly through an intermediary, such as a broker, bank, investment adviser, recordkeeper for retirement plan participants, or any other third party .

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* Computation of holding period

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When an investor sells shares of a fund that assesses a redemption fee, T. Rowe Price will use the "first-in, first- out" (FIFO) method to determine the holding period for the shares sold. Under this method, the date of redemption or exchange will be compared with the earliest purchase date of shares held in the account. A redemption fee will be charged on shares sold before the end of the required holding period.

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If you purchase shares through a retirement plan for which T. Rowe Price serves as recordkeeper, the holding period is 90 days. For example, if you redeem your shares on or before the 90th day from the date of purchase, you will be assessed the redemption fee.

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If you purchase shares through an intermediary, consult your intermediary to determine how the holding period (for example, 90 days versus three months) will be applied.

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Transactions n ot s ubject to r edemption f ees

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The T. Rowe Price funds will not assess a redemption fee with respect to certain transactions. At this time, the fol lowing shares of T. Rowe Price funds will not be subject to redemption fees:

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1. Shares redeemed via a n automated systematic withdrawal plan ;

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2. Shares redeemed through or used to establish an automat ed , nondiscretionary rebalancing or asset alloca tion program , if approved in writing by T. Rowe Price;

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3. Shares purchased by the reinvestment of dividends or capital gain distributions; *

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5. Shares redeemed as part of a retirement plan participant-directed distribution including, but not limited to, the following examples:

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a. Death distributions

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b. Hardship withdrawals

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c. Loan s

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d . Employment termination withdrawals

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e. Qualified Domestic Relations Orders (QDROs);

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6. Shares redeemed as part of a retirement plan termination or restructuring;

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7. Shares transferred from one retirement plan to another retirement plan in the same fund; *

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8. Shares converted from one share class to another share class of the same fund; *

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9. Shares redeemed by a fund ( e.g. , for failure to meet account minimums or to cover various fees such as fiduciary fees) ;

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10. Shares purchased by rollover and changes of account registration within the same fund;*

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11. Shares redeemed to return an excess contribution in an IRA account;

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12. Shares purchased by a fund-of-fund product, if approved in writing by T. Rowe Price;

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13. Shares transferred to T. Rowe Price or a third party intermediary acting as a service provider when the age of the shares cannot be determined systematically ;*

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14. Shares redeemed in retirement plans or other products that restrict trading to no more frequently than once per quarter , if approved in writing by T. Rowe Price.

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* Subsequent exchanges of these shares into funds that assess redemption fees will be subject to the fee.

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Certain intermediaries may not have the capability to apply the exemptions listed above to the redemption fee policy; all redemptions by persons trading through such intermediaries may be subject to the fee. Persons redeeming shares th r ough an intermediary should check with the ir respective intermediary to determine which transactions are subject to the fees.

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Implementation

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Recordkeepers for retirement plan participants who were not able to implement the redemption fees by January 1, 2005, because of systems limitations and who provided verification to that effect were permitted to delay the implementation of redemption fees. All such recordkeepers are expected to implement the redemption fees by March 31, 2005 , or implement short-term trading restrictions approved by T. Rowe Price until they have the systems capabilities to assess the fees. Any person purchasing shares through a retirement plan recordkeeper should check with their recordkeeper to determine when purchases will be subject to redemption fees.

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Shares held or purchased prior to January 1, 2005, are subject to the terms for holding periods and early redemption as set forth in the prospectus in effect when the shares were originally purchased. For example, shares of the T. Rowe Price New Asia Fund purchased on December 31, 2004, would be subject to a one-year holding period and 2% redemption fee if sold within one year; shares of the fund purchased on January 3, 2005, would be subject to the new 90-day/three-month holding period and a 2% redemption fee if sold within the 90-day/three-month holding period.

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Useful Information on Distributions and Taxes

All net investment income and realized capital gains are distributed to shareholders.

Dividends and Other Distributions

Dividend and capital gain distributions are reinvested in additional fund shares in your account unless you select another option on your New Account Form. Reinvesting distributions results in compounding, that is, receiving income dividends and capital gain distributions on a rising number of shares.

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No interest will accrue on amounts represented by uncashed distribution s or redemption checks.

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The following table provides details on dividend payments:

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Fund	Dividends
Bond funds	Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Declared daily and p aid on the first business day of each month.
Equity Income Fund — R Class	Declared quarterly, if any, in March, June, September, and December. Must be a shareholder on the record date.
Other stock funds	Declared annually, if any, generally in December. Must be a shareholder on the record date.
Retirement Funds : Retirement Income Fund — R Class All others	Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Paid on the first business day of each month. Declared annually, if any, generally in December. Must be a shareholder on the record date.

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If you purchase and sell your shares through an intermediary, consult your intermediary to determine when your shares begin and stop accruing dividends; the information described above may vary.

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Capital gain payments

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A capital gain or loss is the difference between the purchase and sale price
of a security.

Tax Information

You should contact your intermediary for the tax information that will be sent to you and reported to the IRS.

If you invest in the fund through a taxable account, y ou will generally be subject to tax when:

You sell fund shares, including an exchange from one fund to another.

The fund makes a distribution to your account.

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For individual shareholders, a portion of ordinary dividends representing " qualified dividends " received by the fund may be subject to tax at the lower rate applicable to long-term capital gains, rather than ordinary income. You may report it as a qualifying dividend in computing your taxes provided you have held the fund shares on which the dividend was paid for more than 60 days during the 12 1 -day period beginning 60 days before the ex- dividend date. Ordinary dividends that do not qualify for this lower rate are generally taxable at the investor`s marginal income tax rate. This includes the portion of ordinary dividends derived from interest, short-term gains, distributions from certain
nonqualified foreign corporations, and dividends received by the fund from stocks that were on loan. Little, if any, of the ordinary dividends paid by the bond fund R Class es is expected to qualify for this lower rate.

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For corporate shareholders, a portion of ordinary dividends may be eligible for the 70% deduction for divi dends received by corporations to the extent the fund`s income consists of dividends paid by U.S. corporations. Little, if any, of the ordinary dividends paid by the international or bond fund R Class es is expected to qualify for this deduction.

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Taxes on fund redemptions

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When you sell shares in any fund, you may realize a gain or loss. An exchange from one fund to another is a sale for tax purposes.

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Taxes on fund distributions

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The tax treatment of a capital gain distribution is determined by how long the fund held the portfolio securities, not how long you held the shares in the fund. Short-term (one year or less) capital gain distributions are taxable at the same rate as ordinary income , and gains on securities held more than 12 months are taxed at the lower rates applicable to long-term capital gains . If you realized a loss on the sale or exchange of fund shares that you held six months or less, your short-term loss must be reclassified as a long-term loss to the extent of any long- term capital gain distribution s received during the period you held the shares. For funds investing in foreign securities, distributions resulting from the sale of
certain foreign currencies, currency contracts, and the currency portion of gains on debt securities are taxed as ordinary income. Net foreign currency losses may cause monthly or quarterly dividend s to be re classified as a return of capital .

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Retirement Funds

Distributions by the underlying funds and changes in asset allocations may result in taxable distributions of ordinary income or capital gains.

Tax consequences of hedging

Entering into certain options, futures, swaps, and forward foreign exchange contracts and transactions may result in the application of the mark-to-market and straddle provisions of the Internal Revenue Code. These provisions could result in a fund being required to distribute gains on such transactions even though it did not close the contracts during the year or receive cash to pay such distributions. The fund may not be able to reduce its distributions for losses on such transactions to the extent of unrealized gains in offsetting positions.

Distributions are taxable whether reinvested in additional shares or received in cash.

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Tax effect of buying shares before a n income dividend or capital gain distribution

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If you buy shares shortly before or on the "record date" — the date that establishes you as the person to receive the upcoming distribution — you may receive a portion of the money you just invested in the form of a taxable distri bution. Therefore, you may wish to find out a fund`s record date before investing. Of course, a fund`s share price may, at any time, reflect undistributed capital gains or income and unrealized appreciation, which may result in future taxable distributions. Such distributions can occur even in a year when the fund has a negative return.

Transaction Procedures and Special Requirements

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The R Class is designed only for shares held through employer - sponsored defined contribution retirement plans. Investments in the R Class that are not held through a n employer - sponsored defined contribution retirement plan are subject to rejection or cancellation and existing shares may be transferred by
T. Rowe Price to another class in the fund.

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Purchase Conditions for Intermediaries

Nonpayment

If the fund receives a check or ACH transfer that does not clear or the payment is not received in a timely man ner , your purchase may be canceled. The intermediary will be responsible for a ny losses or expenses incurred by the fund or transfer agent . The fund and its agents have the right to reject or cancel any purchase, exchange, or redemption due to nonpayment.

U.S. dollars

All purchases must be paid for in U.S. dollars; checks must be drawn on U.S. banks.

Sale (Redemption) Conditions

Holds on immediate redemptions: 10-day hold

Redemptions over $250,000

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Excessive and Short-Term Trading

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T. Rowe Price may bar excessive and short-term traders from purchasing shares.

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Excessive or short-term trading in fund shares may disrupt management of a fund and raise its costs. Short-term traders in funds investing in foreign securities can seek to take advantage of an anticipated difference between the price of the fund`s shares and price movements in overseas markets (see "How and when shares are priced"). While there is no assurance that T. Rowe Price can prevent all excessive and short-term trading, the Board of Directors/Trustees of each fund has adopted the policy set forth below to deter such activity. Persons trading directly with T. Rowe Price or indirectly through intermediaries in violation of this policy or persons believed to be short-term traders may be barred for 90 calendar days or permanently from further purchases of the Price funds . Purchase transaction s placed by such persons are subject to rejection without notice.

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The following types of transactions are exempt from this policy: 1) trades
solely in money market funds (exchanges between a money fund and a non money fund are not exempt); 2) systematic purchases and redemptions ; 3) checkwriting redemptions from bond and money funds; and 4) for retirement plan participants, payroll contributions, withdrawals, and loans.

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In addition, transactions in automated nondiscretionary rebalancing programs , nondiscretionary asset alloca tion programs, or fund -of -fund s products may be exempt from the excessive trading policy subject to prior writ ten approval by designated persons at T. Rowe Price.

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There is no guarantee that T. Rowe Price will detect or prevent excessive or short-term trading.

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Signature Guarantees

An intermediary may need to obtain a signature guarantee in certain situations and should consult its T. Rowe Price Financial Institution Services representative.

You can obtain a signature guarantee from most banks, savings institutions,
broker-dealers, and other guarantors acceptable to T. Rowe Price. We cannot accept guarantees from notaries public or organizations that do not provide reimbursement in the case of fraud.

Distribution, Shareholder Servicing, and Recordkeeping Fees

The R Class has adopted a 12b-1 plan under which it pays a fee at the rate of up to 0. 50% of its daily net assets per year to various intermediaries for distribution and servicing of its shares. These payments may be more or less than the costs incurred by the intermediaries. Because the fees are paid from the R Class net assets on an ongoing basis, they will increase the cost of your investment and, over time, could result in your paying more than with other types of sales charges. The R Class may also separately compensate intermediaries at a rate of up to 0.10% of daily net assets per year for various recordkeeping and transfer agent services they perform.

More About the Fund 3

Organization and Management

How is the fund organized?

T. Rowe Price International Funds, Inc. , (the "corporation") was incorporated in Maryland in 1979. C urrently , the corporation consists of 12 series, each representing a separate pool of assets with different objectives and investment policies. Each is an " open-end investment company, " or mutual fund. Mutual funds pool money received from shareholders of each class into a single portfolio and invest it to try to achieve specified objectives. In 2002, the International Growth & Income Fund issued a separate class of shares known as the R Class.

What is meant by "shares"?

As with all mutual funds, investors purchase shares when they put money in a fund. These shares are part of a fund`s authorized capital stock, but share certificates are not issued.

Each share and fractional share entitles the shareholder to:

Receive a proportional interest in income and capital gain distributions of the class. The income dividends for R Class shares will generally differ from those of the original class to the extent that the expense ratios of the classes differ .

Do T. Rowe Price funds have annual shareholder meetings?

Who runs the fund?

General Oversight

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All decisions regarding the purchase and sale of fund investments are made by T. Rowe Price — specifically by the fund`s portfolio managers .

Investment Manager

Portfolio Management

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The individual listed below has day - to - day responsibility for managing the portfolio and developing and execut ing the fund`s investment program.

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Raymond A. Mills , Ph.D. joined T. Rowe Price International in 2000, has been with T. Rowe Price since 1997, and has been managing investments since 1998.

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The Management Fee

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Group Fee Schedule

0.334%*	First $50 billion

0.305%	Next $30 billion

0.300%	Next $40 billion

0.295%	Thereafter

* Represents a blended group fee rate containing various break points.

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Understanding Performance Information

This section should help you understand the terms used to describe fund performance.

Total Return

Advertisements may include cumulative or average annual total return figures, which may be compared with var ious indices, other performance measures, or other mutual funds.

Cumulative Total Return

Average Annual Total Return

Investment Policies and Practices

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Shareholder approval is required to substantively change fund objectives . Shareholder approval is also required to change certain investment restrictions noted in the following section as "fundamental policies." The managers also follow certain "operating policies" that can be changed without shareholder approval. Fund investment restrictions and policies apply at the time of purchase . A later change in circumstances will not require the sale of an investment if it was proper at the time it was made. (This exception does not apply to the fund`s bo rrowing policy . )

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derivatives could have significantly more of an impact on a fund`s share price than its weighting in the portfolio. The net effect of a particular investment depends on its volatility and the size of its overall return in relation to the performance of all other fund investments.

Changes in fund holdings, fund performance, and the contribution of various investments are discussed in the shareholder reports sent to you.

Fund managers have considerable leeway in choosing investment strategies and selecting securities they believe will help achieve fund objectives.

Types of Portfolio Securities

Fund investments are primarily in common stocks and, to a lesser degree, other types of securities as described below.

Common and Preferred Stocks

Convertible Securities and Warrants

Fixed-Income Securities

Hybrid Instruments

Hybrids can have volatile prices and limited liquidity, and their use may not be successful.

Operating policy Fund investments in hybrid instruments are limited to 10% of total assets.

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Private Placements

Operating policy Fund investments in illiquid securities are limited to 15% of net assets.

Types of Investment Management Practices

Reserve Position

Borrowing Money and Transferring Assets

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Fundamental policy Borrowings may not exceed 33 1 / 3 % of total assets.

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Foreign Currency Transactions

Futures and Options

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Tax Consequences of Hedging

Hedging may result in the application of the mark-to-market and straddle provisions of the Internal Revenue Code. These provisions could result in an increase (or decrease) in the amount of taxable dividends paid by the fund and could affect whether dividends paid are classified as capital gains or ordinary income.

Lending of Portfolio Securities

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Fundamental policy The value of loaned securities may not exceed 33 1 / 3 % of total assets.

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Portfolio Turnover

Turnover is an indication of frequency of trading . We 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. Each time the fund purchases or sells a security, it incurs a cost. This cost is reflected in the fund`s net asset value but not its operating expenses. The higher the turnover rate, the higher the transaction costs and the greater the impact on the fund`s total return. Higher turnover can also increase the possibility of taxable capital gain distribu tions . The fund`s portfolio turnover rates are shown in the Financial Highlights table.

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Disclosure of Fund Portfolio Information

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Financial Highlights

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<R> Table 4 Financial Highlights

	9/30/02 * through 10/31/02	Year ended October 31
		2003	2004

Net asset value, beginning of period	$ 7.10	$ 7.34	$ 9.38
Income From Investment Operations
Net investment income	—	0.09 a	0.17 a
Net gains or losses on securities (both realized and unrealized)	0.24	2.04	1.84
Total from investment operations	0.24	2.13	2.01
Less Distributions
Dividends (from net investment income)	—	(0.08 )	(0.04 )
Distributions (from capital gains)	—	(0.01 )	—
Returns of capital	—	—	—
Total distributions	—	(0.09 )	(0.04 )
Redemption fees added to paid in capital	—	—	—
Net asset value, end of period	$ 7.34	$ 9.38	$ 11.35
Total return	3.38 % a	29.38 % a	21.49 % a
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$ 103	$ 910	$ 6,178
Ratio of expenses to average net assets	1.40 % ab	1.40 % a	1.40 % a
Ratio of net income to average net assets	(0.19 )% ab	0.89 % a	1.53 % a
Portfolio turnover rate	24.6 %	53.2 %	45.8 %

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* Inception date.

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a Excludes expenses in excess of a 1.40% contractual expense limitation in effect through February 28, 2006 .

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b Annualized.

Investing With T. Rowe Price 4

Account Requirements and Transaction Information

Tax Identification
Number

All initial and subsequent investments by intermediaries must be made by bank wire.

Opening a New Account

$2,500 minimum initial investment; $1,000 for retirement plans or gifts or transfers to minors (UGMA / UTMA) accounts

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Important Information About Opening an Account

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Pursuant to federal law, all financial institutions must obtain, verify, and record information that identifies each person or entity that opens an account.

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Intermediaries should call Financial Institution Services for an account number and assignment to a dedicated service representative and give the following wire information to their bank:

In order to obtain an account number, the intermediary must supply the name, Social Security or employer identifica tion number, and business street address for the account.

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Intermediaries should c omplete a New Account Form and mail it to one of the appropriate addresses listed below. I ntermediaries must also enter into a separate agreement with the fund or its agent.

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via U . S . Postal Service

T. Rowe Price Financial Institution Services
P.O. Box 17603
Baltimore, MD 21297-1603

via private carriers/overnight services

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T. Rowe Price Financial Institution Services
Mail Code: OM- 4232
4515 Painters Mill Road
Owings Mills, MD 21117-4842

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Purchasing Additional ShareS

$100 minimum additional purchase; $50 minimum for retirement plans, Automatic Asset Builder, and gifts or transfers to minors (UGMA/UTMA) accounts

By Wire

Intermediaries should call Financial Institution Services or use the wire instructions listed in Opening a New Account.

Exchanging and redeeming ShareS

Exchange Service

Redemptions

Unless otherwise indicated, redemption proceeds will be wired to the intermediary`s designated bank. Intermediaries should contact their Financial Institution Services representative.

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Some of the T. Rowe Price Advisor Classes may impose a redemption fee. Check the fund`s prospectus. The fee is paid to the fund.

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Rights Reserved by the Funds

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T. Rowe Price funds and their agents reserve the following rights: (1) to waive or lower investment minimums; (2) to accept initial purchases by telephone or mailgram; (3) to refuse any purchase or exchange order; (4) to cancel or rescind any purchase or exchange order placed through an intermediary, no later than the business day after the order is received by the intermediary (including, but not limited to, orders deemed to result in excessive trading, market tim ing, or 5% ownership) upon notice to the shareholder within five business days of the trade or if the written confirma tion has not been received by the shareholder, whichever is sooner; (5) to cease offering fund shares at any time to all or certain groups of investors; ( 6 ) to freeze any account and suspend account services when notice has been received of a dispute between the registered or beneficial account owners or there is reason to believe a fraudulent transaction may occur; ( 7 ) to otherwise modify the conditions of purchase and any services at any time; ( 8 ) to waive any wire , small account, maintenance , or fiduciary fees charged to a group of shareholder s ; ( 9 ) to act on instructions reasonably believed to be genuine ; and ( 10 ) to involuntarily redeem your account at the net asset value calculated the day the account is redeemed, in cases of threatening conduct , suspected fraudulent or illegal activity , or if the fund or its agent is unable , through its procedures, to verify the identity of the person(s) or entity opening an account .

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These actions will be taken when, in the sole discretion of management, they are deemed to be in the best interest of the fund or if required by law .

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T. rowe price Privacy Policy

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We do not sell information about current or former customers to any third parties, and we do not disclose it to third parties unless necessary to process a transaction, service an account, or as otherwise permitted by law. We may share information within the T. Rowe Price family of companies in the course of providing or offering products and ser vices to best meet your investing needs. We may also share that information with companies that perform adminis trative or marketing services for T. Rowe Price, with a research firm we have hired, or with a business partner, such as a bank or insurance company with whom we are developing or offering investment products. When we enter into such a relationship, our contracts restrict the companies ` use of our customer information, prohibiting them from sharing or using it for any purposes other than those for which they were hired.

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___________________________________________________________________

1940 Act File No. 811-2958

E427-040 3/1/05

T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202

A fund Statement of Additional Information has been filed with the Secu rities and Exchange Commission and is incorporated by reference into this prospectus. Further information about fund investments, including a review of market conditions and the manager`s recent strategies and their impact on performance, is available in the annual and semiannual share holder reports. To obtain free copies of any of these documents, call your intermediary.

March 1, 2005

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Prospectus

T. Rowe Price

International Stock Fund

A stock fund seeking long-term capital growth through investments in non-U.S. companies.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

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1	About the Fund
	Objective, Strategy, Risks, and Expenses	1
	Other Information About the Fund	5

2	Information About Accounts in T. Rowe Price Funds
	Pricing Shares and Receiving Sale Proceeds	7
	Useful Information on Distributions and Taxes	13
	Transaction Procedures and Special Requirements	19
	Account Maintenance and Small Account Fees	22

3	More About the Fund
	Organization and Management	23
	Understanding Performance Information	25
	Investment Policies and Practices	25
	Disclosure of Fund Portfolio Information	30
	Financial Highlights	31

4	Investing With T. Rowe Price
	Account Requirements and Transaction Information	32
	Opening a New Account	33
	Purchasing Additional Shares	35
	Exchanging and Redeeming Shares	35
	Rights Reserved by the Funds	37
	Information About Your Services	38
	T. Rowe Price Brokerage	41
	Investment Information	42
	T. Rowe Price Privacy Policy	43

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T. Rowe Price International Funds, Inc.

T. Rowe Price International Stock Fund

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T. Rowe Price International, Inc. managed $23.6 billion in foreign stocks and bonds as of December 31, 2004 , through its offices in Baltimore, London, Singapore, Hong Kong, Buenos Aires, and Paris.

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About the Fund 1

objective, strategy, risks, and expenses

What is the fund`s objective?

The fund seeks long-term growth of capital through investments primarily in the common stocks of estab lished, non-U.S. companies.

What is the fund`s principal investment strategy?

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The fund expect s to invest substantially all of its assets in stocks outside the U.S. and to diversify broadly among developed and emerging countries throughout the world. Stock selection reflects a growth style. We may purchase the stocks of companies of any size, but our focus will typically be on large and, to a lesser extent, medium-sized companies. Normally, at least 80% of the fund`s net assets will be invested in stocks.

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T. Rowe Price International , Inc. ("T. Rowe Price International") employs in-depth fundamental research in an effort to identify companies capable of achieving and sustaining above-average, long-term earnings growth. We seek to purchase such stocks at reasonable prices in relation to present or anticipated earnings, cash flow, or book value, and valuation factors often influence our allocations among large-, mid-, or small-cap shares.

In selecting stocks, we generally favor companies with one or more of the following characteristics:

leading market position;

attractive business niche;

strong franchise or monopoly;

technological leadership or proprietary advantages;

seasoned management;

earnings growth and cash flow sufficient to support growing dividends; and

healthy balance sheet with relatively low debt.

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While the fund invests primarily in common stocks, it may also purchase other securities, including futures and options, in keeping with the fund`s objective.

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The fund may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities.

What are the main risks of investing in the fund?

Currency risk This refers to a decline in the value of a foreign currency versus the U.S. dollar, which reduces the dollar value of securities denominated in that currency. The overall impact on a fund`s holdings can be signifi cant, unpredictable, and long lasting , depending on the currencies represented in the portfolio and how each one appreciates or depreciates in relation to the U.S. dollar and whether currency positions are hedged. Under normal conditions, the fund does not engage in extensive foreign currency hedging programs. Further, exchange rate movements are volatile , and it is not possible to effectively hedge the currency risks of many developing countries.

Geographic risk The economies and financial markets of certain regions — such as Latin America and Asia — can be interdependent and may all decline at the same time.

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emerging markets. These factors make investing in such countries significantly riskier than in other countries , and any one of the factors could cause the fund`s share price to decline.

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While certain countries have made progress in economic growth, liberalization, fiscal discipline, and political and social stability, there is no assurance these trends will continue.

Futures/options risk To the extent the fund uses futures and options, it is exposed to additional volatility and potential losses.

As with any mutual fund, there can be no guarantee the fund will achieve its objective.

The fund`s share price may decline, so when you sell your shares, you may lose money .

How can I tell if the fund is appropriate for me?

Consider your investment goals, your time horizon for achieving them, and your tolerance for risk. If you want to diversify your domestic stock portfolio by adding foreign investments, seek the long-term capital apprecia tion potential of growth stocks, and are comfortable with the risks that accompany foreign investments, the fund could be an appropriate part of your overall investment strategy.

The fund can be used in both regular and tax-deferred accounts, such as IRAs.

The fund should not represent your complete investment program or be used for short-term trading purposes.

How has the fund performed in the past?

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The bar chart showing calendar year returns and the average annual total return s table indicate risk by illustrating how much returns can differ from one year to the next and how fund performance compares with that of a com parable market index. Fund past returns (before and after taxes) are not necessarily an indication of future perfor mance .

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The fund can also experience short-term performance swings, as shown by the best and worst calendar quarter returns during the years depicted .

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Table 1 Average Annual Total Returns

	Periods ended December 31, 2004
	1 year	5 years	10 years
International Stock Fund
Returns before taxes	13.89 %	-4.58 %	5.07 %
Returns after taxes on distributions	13.77	-5.18	4.21
Returns after taxes on distributions and sale of fund shares	9.36	-4.02	4.09
MSCI EAFE Index	20.70	-0.80	5.94
Lipper International Large-Cap Growth Funds Average	13.48	-7.63	4.05

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MSCI EAFE Index tracks the stocks of about 1,000 companies in Europe, Australasia, and the Far East (EAFE).

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What fees and expenses will I pay?

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The fund is 100% no load. However, the fund charges a 2.00% redemption fee, payable to the fund , on shares held less than 90 days. There are no other fees or charges to buy or sell fund shares, reinvest dividends, or exchange into other T. Rowe Price funds. There are no 12b 1 fees.

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<R> Table 2 Fees and Expenses of the Fund*

Shareholder fees (fees paid directly from your investment)
Redemption fee	2.00%
Annual fund operating expenses (expenses that are deducted from fund assets)
Management fee	0.66 %
Other expenses	0.26 %
Total annual fund operating expenses	0.92 %

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* Redemption proceeds of less than $5,000 sent by wire are subject to a $5 fee paid to the fund. Accounts with less than a $2,000 balance (with certain exceptions) are subject to a $10 fee. See Transaction Procedures and Special Requirements.

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Example. The following table gives you an idea of how expense ratios may translate into dollars and helps you to compare the cost of investing in this fund with that of other mutual funds. Although your actual costs may be higher or lower, the table shows how much you would pay if operating expenses remain the same, you invest $10,000, earn a 5% annual return, hold the investment for the following periods , and then redeem:

1 year	3 years	5 years	10 years
$ 94	$ 293	$ 509	$ 1,131

other INFORMATION about the fund

What are some of the potential rewards of investing overseas through the fund?

How does the portfolio manager try to reduce risk?

The principal tools we use to try to reduce risk are intensive research and limiting exposure to any one industry or company. Currency hedging techniques may be used from time to time.

Is there other information I can review before making a decision?

Investment Policies and Practices in Section 3 discusses various types of portfolio securities the fund may pur chase as well as types of management practices the fund may use.

Information About Accounts in T. Rowe Price Funds 2

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As a T. Rowe Price shareholder, you will want to know about the following policies and procedures that apply to the T. Rowe Price family of stock, bond, and money market funds.

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Pricing Shares and Receiving Sale Proceeds

How and when shares are priced

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How your purchase, sale, or exchange price is determined

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If we receive your request in correct form by 4 p.m. ET, your transaction will be priced at that business day`s NAV. If we receive it after 4 p.m., it will be priced at the next business day`s NAV.

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We cannot accept orders that request a particular day or price for your transaction or any other special conditions.

Japan Fund: Pricing and Transactions

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How you can receive the proceeds from a sale

When filling out the New Account Form, you may wish to give yourself the widest range of options for receiving proceeds from a sale.

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Exception: Under certain circumstances and when deemed to be in a fund`s best interest, your proceeds may not be sent for up to seven calendar days after we receive your redemption request.

If for some reason we cannot accept your request to sell shares, we will contact you.

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Contingent Redemption Fee

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T. Rowe Price Funds With Redemption Fees
Fund name	Redemption fee	Holding period *
Developing Technologies	1%	90 days /3 months
Diversified Small-Cap Growth	1%	90 days /3 months
Emerging Europe & Mediterranean	2 %	90 days /3 months
Emerging Markets Bond	2%	90 days /3 months
Emerging Markets Stock	2 %	90 days /3 months
Equity Index 500	0 .5 %	90 days /3 months
European Stock	2%	90 days /3 months
Extended Equity Market Index	0 .5 %	90 days /3 months
Global Stock	2%	90 days /3 months
High Yield	1%	90 days /3 months
International Bond	2%	90 days /3 months
International Discovery	2 %	90 days /3 months
International Equity Index	2 %	90 days /3 months
International Growth & Income	2%	90 days /3 months
International Stock	2%	90 days /3 months
Japan	2%	90 days /3 months
Latin America	2 %	90 days /3 months
New Asia	2%	90 days /3 months
Real Estate	1 %	90 days /3 months
Small-Cap Value	1 %	90 days /3 months
Spectrum International	2%	90 days /3 months
Tax-Efficient Balanced	1 %	1 year
Tax-Efficient Growth	1 %	1 year
Tax-Efficient Multi-Cap Growth	1 %	1 year
Total Equity Market Index	0 .5 %	90 days /3 months
U.S. Bond Index	0 .5 %	90 days /3 months

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* Computation of holding period

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If you purchas e shares through an intermediary, consult your intermediary to determine how the holding period (for example, 90 days versus three months) will be applied.

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Transactions n ot s ubject to r edemption f ees

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The T. Rowe Price funds will not assess a redemption fee with respect to certain transactions. At this time, the following shares of T. Rowe Price funds will not be subject to redemption fees:

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1. Shares redeemed via a n automated systematic withdrawal plan ;

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2. Shares redeemed through or used to establish an automat ed , nondiscretionary rebalancing or asset alloca tion program , if approved in writing by T. Rowe Price;

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3. Shares purchased by the reinvestment of dividends or capital gain distributions; *

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5. Shares redeemed as part of a retirement plan participant-directed distribution including, but not limited to, the following examples:

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a. Death distributions

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b. Hardship withdrawals

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c. Loan s

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d . Employment termination withdrawals

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e. Qualified Domestic Relations Orders (QDROs);

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6. Shares redeemed as part of a retirement plan termination or restructuring;

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7. Shares transferred from one retirement plan to another retirement plan in the same fund; *

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8. Shares converted from one share class to another share class of the same fund; *

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9. Shares redeemed by a fund ( e.g. , for failure to meet account minimums or to cover various fees such as fiduciary fees) ;

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10. Shares purchased by rollover and changes of account registration within the same fund;*

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11. Shares redeemed to return an excess contribution in an IRA account;

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12. Shares purchased by a fund-of-fund s product, if approved in writing by T. Rowe Price;

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13. Shares transferred to T. Rowe Price or a third party intermediary acting as a service provider when the age of the shares cannot be determined systematically ;*

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14. Shares redeemed in retirement plans or other products that restrict trading to no more frequently than once per quarter , if approved in writing by T. Rowe Price.

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* Subsequent exchanges of these shares into funds that assess redemption fees will be subject to the fee.

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Implementatio n

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Useful Information on Distributions and Taxes

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All net investment income and realized capital gains are distributed to shareholders.

Dividends and Other Distributions

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The following table provides details on dividend payments :

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<R> Table 3 Dividend Payment Schedule

Fund	Dividends
Money market funds	P urchase s received by T. Rowe Price by 12 noon ET via wire begin to earn dividends on that day . Other shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Declared daily and p aid on the first business day of each month.
Bond funds	Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Declared daily and p aid on the first business day of each month.
These stock funds only: Balanced Dividend Growth Equity Income Equity Index 500 Growth & Income Personal Strategy Balanced Personal Strategy Income Real Estate	Declared quarterly, if any, in March, June, September, and December. Must be a shareholder on the record date.
O ther stock funds	Declared annually, if any, generally in December. Must be a shareholder on the record date.
Retirement Funds : Retirement Income All other s	Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Paid on the first business day of each month. Declared annually, if any, generally in December. Must be a shareholder on the record date.
Tax-Efficient Balanced	Municipal Portion Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Paid on the last business day of March, June, September, and December. Equity Portion Declared annually, if any, generally in December. Must be a shareholder on the record date.

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If you purchase and sell your shares through an intermediary, consult your intermediary to determine when your shares begin and stop accruing dividends; the information described above may vary.

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Capital gain payments

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Capital gain payments are not expected from money market funds, which are managed to maintain a constant share price.

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A capital gain or loss is the difference between the purchase and sale price of a security.

Tax Information

You will be sent timely information for your tax filing needs.

If you invest in the fund through a taxable account, y ou will generally be subject to tax when :

You sell fund shares, including an exchange from one fund to another.

A fund makes a distribution to your account.

Additional information about certain T. Rowe Price funds is listed below:

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Tax-Free and Municipal Funds
Regular monthly dividends (including the state specific tax-free funds) are expected to be exempt from federal income taxes. Exemption is not guaranteed , since the fund has the right under certain conditions to invest in nonexempt securities. You must report your total tax-free income on IRS Form 1040. The IRS uses this information to help determine the tax status of any Social Security payments you may have received dur ing the year. Tax-exempt dividends paid to Social Security recipients may increase the portion of benefits that are subject to tax. For state specific funds, the monthly dividends you receive are expected to be exempt from state and local income tax. For other funds, a small portion of your income dividend may be exempt from state and local income taxes. If the funds invest in certain "private activity" bonds, shareholders who are subject to the alternative minimum tax (AMT) must include income generated by those bonds in their AMT calculation. The portion of the fund`s income dividend that should be included in your AMT calculation, if any, will be reported to you in January.
Tax-Efficient Balanced Fund
The fund intends to invest a sufficient portion of its assets in municipal bonds and notes so that it may qualify to pay tax-exempt dividends, which will be exempt from federal income tax. The fund may not always qualify to pay tax-exempt dividends. The amount of such dividends will be reported to you on your calendar year-end statement. You must report your total tax-exempt income on IRS Form 1040. This information is used by the IRS to help determine the tax status of any Social Security payments you may have received during the year. Tax-exempt dividends paid to Social Security recipients may increase the portion of benefits that are subject to tax. A small portion of your income dividend may also be exempt from state and local income taxes.
Tax-Efficient Balanced Fund (continued)
If the fund invest s in certain "private activity" bonds, shareholders who are subject to the alternative minimum tax (AMT) must include income generated by those bonds in their AMT calculation. The portion of the fund`s income dividends that should be included in your AMT calculation, if any, will be reported to you in January.
Florida Intermediate Tax-Free Fund
Florida does not have a state income tax but does impose an intangibles property tax that applies to shares of mutual funds. A fund organized as a business trust and invested at least 90% in Florida municipal obliga tions, U.S. government obligations, and certain other designated securities on January 1 is exempt from the tax. If a fund`s portfolio is less than 90% invested in exempt securities on January 1, the exemp tion applies only to the portion of assets (if any) invested in U.S. government obligations. The fund is organized as a business trust and will make every effort to have at least 90% of its portfolio invested in exempt securities on January 1 and expects that the entire value of all fund shares will be exempt from the intangibles tax. Exemption is not guaranteed , since the fund has the right under certain conditions to invest in nonexempt securities.

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Taxes on fund redemptions

When you sell shares in any fund, you may realize a gain or loss. An exchange from one fund to another is also a sale for tax purposes.

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Taxes on fund distributions

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The following table provides additional details on distributions for certain funds :

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<R> Table 4 Taxes on F und D istributions

Tax-Free and Municipal Funds
Gains realized on the sale of market discount bonds with maturities beyond one year may be treated as ordinary income and cannot be offset by other capital losses. To the extent the fund invests in these securities, the likelihood of a taxable gain distribution will be increased.
Tax-Efficient Balanced Fund
Gains realized on the sale of market discount bonds with maturities beyond one year may be treated as ordinary income and cannot be offset by other capital losses. To the extent the fund invests in these securities, the likelihood of a taxable gain distribution will be increased.
Inflation Protected Bond Fund
Inflation adjustments on Treasury inflation-protected securities exceeding deflation adjust ments for the year will be distributed to you as a short-term capital gain. In computing the distribution amount, the fund cannot reduce inflation adjustments by short- or long-term losses from the sales of securities. Net deflation adjustments for a year may result in all or a portion of dividends paid earlier in the year being treated as a return of capital.
Retirement Funds
Distributions by the underlying funds and changes in asset allocations may result in taxable distributions of ordinary income or capital gains.

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Tax consequences of hedging

Distributions are taxable whether reinvested in additional shares or received in cash.

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Tax effect of buying shares before a n income dividend or capital gain distribution

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Transaction Procedures and Special Requirements

Following these procedures helps assure timely and accurate transactions.

Purchase Conditions

Nonpayment

U.S. dollars

All purchases must be paid for in U.S. dollars; checks must be drawn on U.S. banks.

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Sale (Redemption) Conditions

Holds on immediate redemptions: 10-day hold

Telephone, Tele*Access ® , and online account transactions

Redemptions over $250,000

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Excessive and Short-Term Trading

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T. Rowe Price may bar excessive and short-term traders from purchasing shares.

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There is no guarantee that T. Rowe Price will detect or prevent excessive or short-term trading.

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Keeping Your Account Open

Signature Guarantees

A signature guarantee is designed to protect you and the T. Rowe Price fu nds from fraud by verifying your signature.

You may need to have your signature guaranteed in certain situations, such as:

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Written requests : ( 1) to redeem over $100,000 ; or ( 2) to wire redemption
proceeds when prior bank account authorization is not on file .

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Remitting redemption proceeds to any person, address, or bank account not on record.

Transferring redemption proceeds to a T. Rowe Price fund account with a different registration (name or owner ship) from yours.

Establishing certain services after the account is opened.

Account Maintenance and Small Account Fees

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More About the Fund 3

Organization and Management

How is the fund organized?

What is meant by "shares"?

As with all mutual funds, investors purchase shares when they put money in a fund. These shares are part of a fund`s authorized capital stock, but share certificates are not issued.

Each share and fractional share entitles the shareholder to:

Receive a proportional interest in income and capital gain distributions.

Cast one vote per share on certain fund matters, including the election of fund directors/trustees , changes in fundamental policies, or approval of changes in the fund`s management contract.

Do T. Rowe Price funds have annual shareholder meetings?

Who runs the fund?

General Oversight

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The fund is governed by a Board of Directors /Trustees that meets regularly to review fund investments, perfor mance, expenses, and other business affairs. The Board elects the fund`s officers. The majority of Board members are independent of T. Rowe Price International.

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All decisions regarding the purchase and sale of fund investments are made by T. Rowe Price International — specifically by the fund`s portfolio managers .

Investment Manager

Portfolio Management

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The individuals listed below have day-to-day responsibility for managing the portfolio and developing and exe cuting the fund`s investment program.

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Mark C.J. Bickford-Smith joined T. Rowe Price In ternational in 1995 and has 1 9 years of experience in research and financial analysis. James B.M. Seddon joined T. Rowe Price International in 1987 and has 1 7 years of experi ence in portfolio management. David J.L. Warren joined T. Rowe Price International in 1983 and has 2 4 years of experience in equity research, fixed - income research, and portfolio management.

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The Management Fee

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Group Fee Schedule

0.334%*	First $50 billion

0.305%	Next $30 billion

0.300%	Next $40 billion

0.295%	Thereafter

* Represents a blended group fee rate containing various break points.

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The fund`s portion of the group fee is determined by the ratio of its daily net assets to the daily net assets of all the . T. Rowe Price funds described previously. Based on combined T. Rowe Price fund assets of over $ 131 billion at . October 29, 2004 , the group fee was 0.3 1 % . The individual fund fee is 0.35%.

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Understanding Performance Information

Total Return

Advertisements may include cumulative or average annual total return figures, which may be compared with var ious indices, other performance measures, or other mutual funds.

Cumulative Total Return

Average Annual Total Return

Investment Policies and Practices

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Shareholder approval is required to substantively change fund objectives . Shareholder approval is also required to change certain investment restrictions noted in the following section as "fundamental policies." The managers also follow certain "operating policies" that can be changed without shareholder approval. Shareholders will receive at least 60 days` prior notice of any change in policy requiring the fund to normally invest at least 80% of net assets in common stocks. Fund investment restrictions and policies apply at the time of purchase . A later change in circumstances will not require the sale of an investment if it was proper at the time it was made. (This exception does not apply to the fund`s borrowing policy . )

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Changes in fund holdings, fund performance, and the contribution of various investments are discussed in the shareholder reports sent to you.

Fund managers have considerable leeway in choosing investment strategies and selecting securities they believe will help achieve fund objectives.

Types of Portfolio Securities

In seeking to meet its investment objective, fund investments may be made in any type of security or instrument (including certain potentially high-risk
derivatives described in this section) whose investment characteristics are consistent with its investment pro gram. The following pages describe various types of fund securities and investment management practices.

Fund investments are primarily in common stocks and, to a lesser degree, other types of securities as described below.

Common and Preferred Stocks

Convertible Securities and Warrants

Fixed-Income Securities

Hybrid Instruments

Hybrids can have volatile prices and limited liquidity, and their use may not be successful.

Operating policy Fund investments in hybrid instruments are limited to 10% of total assets.

Private Placements

Operating policy Fund investments in illiquid securities are limited to 15% of net assets.

Types of Investment Management Practices

Reserve Position

Borrowing Money and Transferring Assets

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Fundamental policy Borrowings may not exceed 33 1 / 3 % of total assets.

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Foreign Currency Transactions

Futures and Options

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Tax Consequences of Hedging

Hedging may result in the application of the mark-to-market and straddle provisions of the Internal Revenue Code. These provisions could result in an increase (or decrease) in the amount of taxable dividends paid by the fund and could affect whether dividends paid are classified as capital gains or ordinary income.

Lending of Portfolio Securities

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Fundamental policy The value of loaned securities may not exceed 33 1 / 3 % of total assets.

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Portfolio Turnover

Turnover is an indication of frequency of trading . We 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. Each time the fund purchases or sells a security, it incurs a cost. This cost is reflected in the fund`s net asset value but not its operating expenses. The higher the turnover rate, the higher the transaction costs and the greater the impact on the fund`s total return. Higher turnover can also increase the possibility of taxable capital gain distribu tions . The fund`s portfolio turnover rates are shown in the Financial Highlights table.

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Disclosure of Fund Portfolio Information

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The fund`s portfolio holdings are disclosed on a regular basis in its semi annual and annual reports to shareholders as well as Form N-Q which is filed with the SEC within 60 days of the fund`s first and third fiscal quarter-end. In addition, the fund discloses its calendar quarter-end portfolio holdings on troweprice.com 15 calendar days after each quarter. Under certain conditions, up to 5% of the fund`s holdings may be included in this portfolio list without being individually identified. Generally, securities would be omitted from the list if they are being actively bought or sold and it is determined that the quarter-end disclosure of the holding could be harmful to the fund. A security will not be omitted from the list for more than one year. The fund also discloses its largest 10 holdings seven days after each month-end. These holdings are listed in alphabetical order along with the aggregate percentage of the fund`s total assets they represent. The quarter-end portfolio will remain on the Web site for one year. The top 10 list is replaced every six months. A description of the fund`s policy and procedures with respect to the disclosure of portfolio information is in the Statement of Additional Information.

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Financial Highlights

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Table 5 , which provides information about the fund`s financial history, is based on a single share outstanding throughout the periods shown. The table is part of the fund`s financial statements, which are included in its annual report and are incorporated by reference into the Statement of Additional Information (available upon request). The total returns in the table represent the rate that an investor would have earned or lost on an invest ment in the fund (assuming reinvestment of all dividends and distributions and no payment of account or [ if

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applicable ] redemption fees). The financial statements in the annual report were audited by the fund`s indepen dent registered public accounting firm ,
PricewaterhouseCoopers LLP.

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<R> Table 5 Financial Highlights

	Year ended October 31
	2000	2001	200 2	200 3	20 0 4

Net asset value, beginning of period	$ 16.70	$ 16.11	$ 1 0.65	$ 8.87	$ 10.66
Income From Investment Operations
Net investment income	0.10	0.29	0. 11	0.14	0.1 5
Net gains or losses on securities (both realized and unrealized)	0.35	(4.48 )	( 1.56 )	1.76	1. 18
Total from investment operations	0.45	(4.19 )	( 1.45 )	1.90	1. 33
Less Distributions
Dividends (from net investment income)	(0.13 )	(0.09 )	(0. 30 )	( 0.11 )	( 0.1 3 )
Distributions (from capital gains)	(0.91 )	(1.18 )	( 0.03 )	—	(0.03 )
Returns of capital	—	—	—	—	—
Total distributions	(1.04 )	(1.27 )	( 0.33 )	( 0.11 )	( 0.1 6 )
Net asset value, end of period	$ 16.11	$ 10.65	$ 8.87	$ 10.66	$ 11.83
Total return	2.28 %	(28.17 )%	( 14.19 )%	21.69 %	12.59 %
Ratios/Supplemental Data
Net assets, end of period (in millions)	$ 10,458	$ 6,370	$ 4,773	$ 4,874	$ 4,8 05
Ratio of expenses to average net assets	0.84 %	0.90 %	0.9 2 %	0.95 %	0.9 2 %
Ratio of net income to average net assets	0.55 %	2.14 %	0.96 %	1.39 %	1. 22 %
Portfolio turnover rate	38.2 %	17.4 %	21.6 %	25.2 %	2 8 .2 %

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Investing With T. Rowe Price 4

Account Requirements and Transaction Information

Tax Identification
Number

Transaction Confirmations

Employer-Sponsored Retirement Plans and Institutional Accounts

T. Rowe Price
Trust Company
1-800-492-7670

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Opening a New Account

$2,500 minimum initial investment; $1,000 for retirement plans or gifts or transfers to minors (UGMA / UTMA) accounts ($25,000 minimum initial investment for Summit Funds only)

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Important Information About Opening an Account

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Pursuant to federal law, all financial institutions must obtain, verify, and record information that identifies each person or entity that opens an account.

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Account Registration

By Mail

Please make your check payable to T. Rowe Price Funds (otherwise it will be returned) and send your check, together with the New Account Form, to the appropriate address below:

via U.S. Postal Service

T. Rowe Price Account Services
P.O. Box 17300
Baltimore, MD 21297-1300

via private carriers/overnight services

T. Rowe Price Account Services
Mailcode 17300
4515 Painters Mill Road
Owings Mills, MD 21117-4903

By Wire

Call Investor Services for an account number and give the following wire information to your bank:

Complete a New Account Form and mail it to one of the appropriate T. Rowe Price addresses listed under "By Mail."

Note: Investment will be made, but services may not be established and IRS penalty withholding may occur until we receive a signed New Account Form.

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By Exchange

In Person

Drop off your New Account Form at any location listed on the back cover and obtain a receipt.

Purchasing Additional Shares

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By ACH Transfer

Use Tele*Access or your personal computer or call Shareholder Services if you have established electronic transfers using the ACH system.

By Wire

Call Shareholder Services or use the wire instructions listed in Opening a New Account.

By Mail

1. Make your check payable to T. Rowe Price Funds (otherwise it may be returned).

2. Mail the check to us at the following address with either a fund reinvestment slip or a note indicating the fund you want to buy and your fund account number.

3. Remember to provide your account number and the fund name on the memo line of your check.

via U.S. Postal Service

T. Rowe Price Account Services
P.O. Box 17300
Baltimore, MD 21297-1300

(For mail via private carriers and overnight services, see previous section.)

By Automatic
Asset Builder

Fill out the Automatic Asset Builder section on the New Account or Shareholder Services Form.

Exchanging and Redeeming Shares

Exchange Service

Redemptions

If you request to redeem a specific dollar amount, and the market value of your account is less than the amount of your request, we will redeem all shares from your account.

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Some of the T. Rowe Price funds may impose a redemption fee . Check the fund`s prospectus. The fee is paid to the fund.

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For redemptions by check or electronic transfer, please see Information About Your Services.

By Phone

Call Shareholder Services

By Mail

For nonretirement and IRA accounts:

via U.S. Postal Service

T. Rowe Price Account Services
P.O. Box 17302
Baltimore, MD 21297-1302

via private carriers/overnight services

T. Rowe Price Account Services
Mailcode 17302
4515 Painters Mill Road
Owings Mills, MD 21117-4903

For employer-sponsored retirement accounts:

via U.S. Postal Service

T. Rowe Price Trust Company
P.O. Box 17479
Baltimore, MD 21297-1479

via private carriers/overnight services

T. Rowe Price Trust Company
Mailcode 17479
4515 Painters Mill Road
Owings Mills, MD 21117-4903

Rights Reserved by the Funds

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These actions will be taken when, in the sole discretion of management, they are deemed to be in the best interest of the fund or if required by law .

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information about your Services

Shareholder Services
1-800-225-5132

Investor Services
1-800-638-5660

Retirement Plans

Investing for College Expenses

We can help you save for future college expenses on a tax-advantaged basis.

Education Savings Account s (ESAs) (formerly known as Education IRAs)

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Invest up to $2,000 a year per beneficiary depending on your annual income ; account earnings are federal income tax- free when used for qualified expenses .

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529 Plans

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Automated Services

Tele*Access
1-800-638-2587
24 hours, 7 days

Tele*Access

Web Address
troweprice.com

Online Account Access

Plan Account Line
1-800-401-3279

This 24-hour service is similar to Tele*Access but is designed specifically to meet the needs of retirement plan inves tors.

By Telephone and
In Person

Buy, sell, or exchange shares by calling one of our service representatives or by visiting one of our investor center loca tions whose addresses are listed on the back cover.

Electronic Transfers

By ACH

By Wire

Electronic transfers can be conducted via bank wire. There is a $5 fee for wire redemptions under $5,000, and your bank may charge for incoming or outgoing wire transfers regardless of size.

Checkwriting

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Automatic Investing

Automatic Asset Builder

You can instruct us to move $50 ($100 for Summit Funds) or more from your bank account, or you can instruct your employer to send all or a portion of your paycheck to the fund or funds you designate.

Automatic Exchange

You can set up systematic investments from one fund account into another, such as from a money fund into a stock fund.

t. ROWE PRICE Brokerage

To Open an Account
1-800-638-5660

For Existing
Brokerage Customers
1-800-225-7720

Automated Telephone and Computer Services

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Investor Information

A variety of informative reports, such as our Brokerage Insights series , as well as access to online research tools , can help you better evaluate economic trends and investment opportunities.

Dividend Reinvestment Service

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*Services vary by firm.

T. Rowe Price Brokerage is a division of T. Rowe Price Investment Services, Inc., Member NASD/SIPC.

Investment Information

Shareholder Reports

Fund managers` annual and semiannual reviews of their strategies and performance.

The T. Rowe Price Report

A quarterly investment newsletter discussing markets and financial strategies and including the Performance Update, a review of all T. Rowe Price fund results.

Insights

Educational reports on investment strategies and financial markets.

Investment Guides

Asset Mix Worksheet, Diversifying Overseas: A T. Rowe Price Guide to International Investing, Managing Your Retirement Distribution, Retirement Readiness Guide, and Retirement Planning Kit .

T. rowe price Privacy Policy

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___________________________________________________________________

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To help you achieve your financial goals, T. Rowe Price offers a wide range of stock, bond, and money market investments, as well as convenient services and
informative reports.

For mutual fund or T. Rowe Price Brokerage information

Investor Services

1-800-638-5660

For existing accounts

Shareholder Services

1-800-225-5132

For the hearing impaired

1-800-367-0763

For performance, prices,
account information, or
to conduct transactions

Tele*Access ®

24 hours, 7 days
1-800-638-2587

Internet address

troweprice.com

Plan Account Line

For retirement plan
investors: The
appropriate 800
number appears on your retirement account statement.

Investor Centers

For directions, call
1-800-225-5132 or
visit our Web site

Baltimore Area

Downtown

105 East Lombard Street

Owings Mills

Three Financial Center
4515 Painters Mill Road

Boston Area

386 Washington Street
Wellesley

Chicago Area

1900 Spring Road
Suite 104
Oak Brook

Colorado Springs

2260 Briargate Parkway

Los Angeles Area

Warner Center
21800 Oxnard Street
Suite 270
Woodland Hills

New Jersey/New York Area

51 JFK Parkway, 1st Floor
Short Hills, New Jersey

San Francisco Area

1990 N. California Boulevard
Suite 100
Walnut Creek

Tampa

4211 W. Boy Scout Boulevard
8th Floor

Washington, D.C. Area

Downtown

900 17th Street, N.W.
Farragut Square

Tysons Corner

1600 Tysons Boulevard
Suite 150

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F37-040 3/1/05

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T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202

1940 Act File No. 811-2958

March 1, 2005

Prospectus

T. Rowe Price

International Stock Fund — Advisor Class

A stock fund seeking long-term capital growth through investments in non-U.S. companies. This class of shares is sold only through financial intermediaries.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

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1	About the Fund
	Objective, Strategy, Risks, and Expenses	1
	Other Information About the Fund	5

2	Information About Accounts in T. Rowe Price Funds
	Pricing Shares and Receiving Sale Proceeds	7
	Useful Information on Distributions and Taxes	11
	Transaction Procedures and Special Requirements	15
	Distribution, Shareholder Servicing, and Recordkeeping Fees	17

3	More About the Fund
	Organization and Management	18
	Understanding Performance Information	20
	Investment Policies and Practices	20
	Disclosure of Fund Portfolio Information	25
	Financial Highlights	26

4	Investing With T. Rowe Price
	Account Requirements and Transaction Information	28
	Purchasing Additional Shares	29
	Exchanging and Redeeming Shares	30
	Rights Reserved by the Funds	30
	T. Rowe Price Privacy Policy	32

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T. Rowe Price International Funds, Inc.

T. Rowe Price International Stock Fund — Advisor Class

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T. Rowe Price International, Inc. managed $23.6 billion in foreign stocks and bonds as of December 31, 2004 , through its offices in Baltimore, London, Singapore, Hong Kong, Buenos Aires, and Paris.

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About the Fund 1

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objective, strategy, risks, and expenses

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A word about the fund`s name and structure. The Advisor Class is a share class of its respective T. Rowe Price fund and is not a separate mutual fund. The Advisor Class shares are designed to be sold only through brokers, dealers, banks, insurance companies, and other financial intermediaries that provide various distribution and administrative services .

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What is the fund`s objective?

The fund seeks long-term growth of capital through investments primarily in the common stocks of estab lished, non-U.S. companies.

What is the fund`s principal investment strategy?

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T. Rowe Price International, Inc. ("T. Rowe Price International") employs in-depth fundamental research in an effort to identify companies capable of
achieving and sustaining above-average, long-term earnings growth. We seek to purchase such stocks at reason able prices in relation to present or anticipated earnings, cash flow, or book value, and valuation factors often influence our allocations among large-, mid-, or small-cap shares.

In selecting stocks, we generally favor companies with one or more of the following characteristics:

leading market position;

attractive business niche;

strong franchise or monopoly;

technological leadership or proprietary advantages;

seasoned management;

earnings growth and cash flow sufficient to support growing dividends; and

healthy balance sheet with relatively low debt.

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While the fund invests primarily in common stocks, it may also purchase other securities, including futures and options, in keeping with the fund`s objective.

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The fund may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities.

What are the main risks of investing in the fund?

Currency risk This refers to a decline in the value of a foreign currency versus the U.S. dollar, which reduces the dollar value of securities denominated in that currency. The overall impact on a fund`s holdings can be signifi cant, unpredictable, and long lasting , depending on the currencies represented in the portfolio and how each one appreciates or depreciates in relation to the U.S. dollar and whether currency positions are hedged. Under normal conditions, the fund does not engage in extensive foreign currency hedging programs. Further, exchange

rate movements are volatile , and it is not possible to effectively hedge the currency risks of many developing countries.

Geographic risk The economies and financial markets of certain regions — such as Latin America and Asia — can be interdependent and may all decline at the same time.

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While certain countries have made progress in economic growth, liberalization, fiscal discipline, and political and social stability, there is no assurance these trends will continue.

Futures/options risk To the extent the fund uses futures and options, it is exposed to additional volatility and potential losses.

As with any mutual fund, there can be no guarantee the fund will achieve its objective.

The fund`s share price may decline, so when you sell your shares, you may lose money .

How can I tell if the fund is appropriate for me?

Consider your investment goals, your time horizon for achieving them, and your tolerance for risk. If you are investing through an intermediary, and want to diversify your domestic stock portfolio by adding foreign invest ments, seek the long-term capital appreciation potential of growth stocks, and are comfortable with the risks that accompany foreign investments, the fund could be an appropriate part of your overall investment strategy.

The fund can be used in both regular and tax-deferred accounts, such as IRAs.

The fund should not represent your complete investment program or be used for short-term trading purposes.

How has the fund performed in the past?

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The fund can also experience short-term performance swings, as shown by the best and worst calendar quarter returns during the years depicted .

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In addition, the average annual total return s table shows hypothetical after-tax returns to suggest how taxes paid by the shareholder may influence returns. Actual after-tax returns depend on each investor`s situation and may differ from those shown. After-tax returns are not relevant if the shares are held in a
tax-deferred account, such as a 401(k) or IRA. During periods of fund losses, the post-liquidation after-tax return may exceed the fund`s other returns because the loss generates a tax benefit that is factored into the result.

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Table 1 Average Annual Total Returns

	Periods ended December 31, 2004
	1 year	Since inception (3/31/00)
International Stock Fund — Advisor Class
Return s before taxes	13.57 %	-5.01 %
Return s after taxes on distributions	13.47	-5.63
Return s after taxes on distributions and sale of fund shares	9.15	-4.38
MSCI EAFE Index	20.70	-0.83
Lipper International Large-Cap Growth Funds Average	13.48	-8.40

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MSCI EAFE Index tracks the stocks of about 1,000 companies in Europe, Australasia, and the Far East (EAFE).

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What fees and expenses will I pay?

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Shareholder fees (fees paid directly from your investment)
Redemption fee	2.00 % a
Annual fund operating expenses (expenses that are deducted from fund assets)
Management fee	0.66 %
Distribution and service (12b-1) fees	0.25%
Other expenses	0.23 %
Total annual fund operating expenses	1.14 % b

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* Redemption proceeds of less than $5,000 sent by wire are subject to a $5 fee paid to the fund.

a On shares purchased and held for less than 90 days (details under Contingent Redemption Fee in Pricing Shares and Receiving Sales Proceeds) .

b Effective November 1, 2003, T. Rowe Price International contractually obligated itself to bear any expenses and/or waive its fees t hrough February 28, 2006, that would cause the class`s ratio of expenses to average net assets to exceed 1.15%. Expenses paid or assumed or fees waived under this agreement are subject to reimbursement to T. Rowe Price International by the fund whenever the class`s expense ratio is below 1.15%; however, no reimbursement will be made after February 29, 2008, or if it would result in the expense ratio exceeding 1.15%. Any amounts reimbursed will have the effect of increasing fees oth erwise paid by the class. The fund operated under a previous expense limitation for which T. Rowe Price may be reimbursed.

1 year	3 years	5 years	10 years
$ 116	$ 362	$ 628	$ 1,386

other INFORMATION about the fund

What are some of the potential rewards of investing overseas through the fund?

How does the portfolio manager try to reduce risk?

The principal tools we use to try to reduce risk are intensive research and limiting exposure to any one industry or company. Currency hedging techniques may be used from time to time.

Is there other information I can review before making a decision?

Investment Policies and Practices in Section 3 discusses various types of portfolio securities the fund may pur chase as well as types of management practices the fund may use.

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Information About Accounts in T. Rowe Price Funds 2

As a T. Rowe Price shareholder, you will want to know about the following policies and procedures that apply to all Advisor Class accounts.

Pricing Shares and Receiving Sale Proceeds

How and when shares are priced

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The fund uses outside pricing services to provide it with closing market prices and information used for adjust ing those prices. The fund cannot predict how often it will use closing prices and how often it will adjust those prices. As a means of evaluating its fair value process, the fund routinely compares closing market prices , the next day`s opening prices in the same markets, and adjusted prices.

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How your purchase, sale, or exchange price is determined

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How proceeds are received

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Contingent Redemption Fee

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T. Rowe Price Funds With Redemption Fees
Fund name	Redemption fee	Holding period *
High Yield — Advisor Class	1 %	90 days /3 months
International Bond — Advisor Class	2%	90 days /3 months
International Growth & Income — Advisor Class	2%	90 days /3 months
International Stock — Advisor Class	2%	90 days /3 months
Real Estate — Advisor Class	1%	90 days /3 months
Small-Cap Valu e — Advisor Class	1 %	90 days /3 months

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Redemption fees are paid to a fund to deter short-term trading, offset costs, and protect the fund`s long-term shareholders. All persons holding shares of a T. Rowe Price fund that imposes a redemption fee are subject to the fee , whether the person is holding shares directly with a T. Rowe Price fund, through a retirement plan for which T. Rowe Price serves as recordkeeper, or indirectly through an intermediary, such as a broker, bank, investment adviser, recordkeeper for retirement plan participants, or any other third party .

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* Computation of holding period

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When an investor sells shares of a fund that assesses a redemption fee, T. Rowe Price will use the "first-in, first- out" (FIFO) method to determine the holding period for the shares sold. Under this method, the date of redemption or exchange will be compared with the earliest purchase date of shares held in the account. A redemption fee will be charged on shares sold before the end of the required holding period.

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If you purchase shares through a retirement plan for which T. Rowe Price serves as recordkeeper, the holding period is 90 days. For example, if you redeem your shares on or before the 90th day from the date of purchase, you will be assessed the redemption fee.

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If you purchase shares through an intermediary, consult your intermediary to determine how the holding period (for example, 90 days versus three months) will be applied.

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Transactions n ot s ubject to r edemption f ees

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The T. Rowe Price funds will not assess a redemption fee with respect to certain transactions. At this time, the fol lowing shares of T. Rowe Price funds will not be subject to redemption fees:

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1. Shares redeemed via a n automated systematic withdrawal plan ;

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2. Shares redeemed through or used to establish an automat ed , nondiscretionary rebalancing or asset alloca tion program , if approved in writing by T. Rowe Price;

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3. Shares purchased by the reinvestment of dividends or capital gain distributions; *

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5. Shares redeemed as part of a retirement plan participant-directed distribution including, but not limited to, the following examples:

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a. Death distributions

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b. Hardship withdrawals

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c. Loan s

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d . Employment termination withdrawals

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e. Qualified Domestic Relations Orders (QDROs);

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6. Shares redeemed as part of a retirement plan termination or restructuring;

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7. Shares transferred from one retirement plan to another retirement plan in the same fund; *

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8. Shares converted from one share class to another share class of the same fund; *

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9. Shares redeemed by a fund ( e.g. , for failure to meet account minimums or to cover various fees such as fiduciary fees) ;

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10. Shares purchased by rollover and changes of account registration within the same fund; *

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11. Shares redeemed to return an excess contribution in an IRA account;

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12. Shares purchased by a fund-of-fund product, if approved in writing by T. Rowe Price;

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13. Shares transferred to T. Rowe Price or a third party intermediary acting as a service provider when the age of the shares cannot be determined systematically ; *

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14. Shares redeemed in retirement plans or other products that restrict trading to no more frequently than once per quarter , if approved in writing by T. Rowe Price.

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* Subsequent exchanges of these shares into funds that assess redemption fees will be subject to the fee.

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If your shares are held through an intermediary in an omnibus account,
T. Rowe Price relies on the intermediary to assess the redemption fee on
underlying shareholder accounts. T. Rowe Price seeks to identify intermediaries
establishing omnibus accounts and to enter into agreements requiring the intermediary to assess the redemp tion fees. There are no assurances that T. Rowe Price will be successful in identifying all intermediaries or that the intermediaries will properly assess the fees.

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Implementation

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Recordkeepers for retirement plan participants who were not able to implement the redemption fees by January 1, 2005, because of systems limitations and who provided verification to that effect were permitted to delay the implementation of redemption fees. All such recordkeepers are expected to implement the redemption fees by March 31, 2005 , or implement short-term trading restrictions approved by T. Rowe Price until they have the systems capabilities to assess the fees. Any person purchasing shares through a retirement plan recordkeeper should check with their recordkeeper to determine when purchases will be subject to redemption fees.

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Shares held or purchased prior to January 1, 2005, are subject to the terms for holding periods and early redemption as set forth in the prospectus in effect when the shares were originally purchased. For example, shares of the T. Rowe Price New Asia Fund purchased on December 31, 2004, would be subject to a one-year holding period and 2% redemption fee if sold within one year; shares of the fund purchased on January 3, 2005, would be subject to the new 90-day/three-month holding period and a 2% redemption fee if sold within the 90-day/three-month holding period.

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Useful Information on Distributions and Taxes

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All net investment income and realized capital gains are distributed to shareholders.

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Dividends and Other Distributions

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Dividend and capital gain distributions are reinvested in additional fund shares in your account unless you select another option on your New Account Form. Reinvesting distributions results in compounding, that is, receiving income dividends and capital gain distributions on a rising number of shares.

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No interest will accrue on amounts represented by uncashed distribution s or redemption checks.

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The following table provides details on dividend payments:

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Fund	Dividends
Bond funds	Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Declared daily and p aid on the first business day of each month.
Equity Income Fund — Advisor Class	Declared quarterly, if any, in March, June, September, and December. Must be a shareholder on the record date.
Other stock funds	Declared annually, if any, generally in December. Must be a shareholder on the record date.
Retirement Funds : Retirement Income Fund — Advisor Class All others	Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Paid on the first business day of each month. Declared annually, if any, generally in December. Must be a shareholder on the record date.

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If you purchase and sell your shares through an intermediary, consult your intermediary to determine when your shares begin and stop accruing dividends; the information described above may vary.

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Capital gain payments

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A capital gain or loss is the difference between the purchase and sale price
of a security.

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Tax Information

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You should contact your intermediary for the tax information that will be sent to you and reported to the IRS.

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If you invest in the fund through a taxable account, you will generally be subject to tax when:

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You sell fund shares, including an exchange from one fund to another.

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The fund makes a distribution to your account.

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For individual shareholders, a portion of ordinary dividends representing " qualified dividends " received by the fund may be subject to tax at the lower rate applicable to long-term capital gains, rather than ordinary income. You may report it as a qualifying dividend in computing your taxes provided you have held the fund shares on which the dividend was paid for more than 60 days during the 12 1 -day period beginning 60 days before the ex- dividend date.
Ordinary dividends that do not qualify for this lower rate are generally taxable at the investor`s marginal income tax rate. This includes the portion of ordinary
dividends derived from interest, short-term gains, distributions from certain nonqualified foreign corporations, and dividends received by the fund from stocks that were on loan. Little, if any, of the ordinary dividends paid by the Real Estate Fund — Advisor Class or the bond f und Advisor Classes is expected to qualify for this lower rate.

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For corporate shareholders, a portion of ordinary dividends may be eligible for the 70% deduction for divi dends received by corporations to the extent the fund`s income consists of dividends paid by U.S. corporations. Little, if any, of the ordinary dividends paid by the international or bond fund Advisor Classes is expected to qualify for this deduction.

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Taxes on fund redemptions

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When you sell shares in any fund, you may realize a gain or loss. An exchange from one fund to another is a sale for tax purposes.

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Taxes on fund distributions

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Retirement Funds

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Distributions by the underlying funds and changes in asset allocations may result in taxable distributions of ordinary income or capital gains.

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Tax consequences of hedging

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Entering into certain options, futures, swaps, and forward foreign exchange contracts and transactions may result in the application of the mark-to-market and straddle provisions of the Internal Revenue Code. These provisions could result in a fund being required to distribute gains on such transactions even though it did not close the contracts during the year or receive cash to pay such distributions. The fund may not be able to reduce its distributions for losses on such transactions to the extent of unrealized gains in offsetting positions.

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Distributions are taxable whether reinvested in additional shares or received in cash.

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Tax effect of buying shares before a n income dividend or capital gain distribution

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If you buy shares shortly before or on the "record date" — the date that establishes you as the person to receive the upcoming distribution — you may receive a portion of the money you just invested in the form of a taxable distri bution. Therefore, you may wish to find out a fund`s record date before investing. Of course, a fund`s share price may, at any time, reflect undistributed capital gains or income and unrealized appreciation, which may result in future taxable distributions. Such distributions can occur even in a year when the fund has a negative return.

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Transaction Procedures and Special Requirements

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Purchase Conditions for Intermediaries

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Nonpayment

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U.S. dollars

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All purchases must be paid for in U.S. dollars; checks must be drawn on U.S. banks.

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Sale (Redemption) Conditions

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Holds on immediate redemptions: 10-day hold

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Redemptions over $250,000

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Excessive and Short-Term Trading

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T. Rowe Price may bar excessive and short-term traders from purchasing shares.

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Excessive or short-term trading in fund shares may disrupt management of a fund and raise its costs. Short-term traders in funds investing in foreign securities can seek to take advantage of an anticipated difference between the price of the fund`s shares and price movements in overseas markets (see "How and when shares are priced"). While there is no assurance that T. Rowe Price can prevent all excessive and short-term trading, the Board of Directors/Trustees of each fund has adopted the policy set forth below to deter such activity. Persons trading directly with T. Rowe Price or indirectly through intermediaries in violation of this policy or persons believed to be short-term traders may be barred for 90 calendar days or permanently from further purchases of the Price funds . Purchase transaction s placed by such persons are subject to rejection without notice.

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The following types of transactions are exempt from this policy: 1) trades solely in money market funds (exchanges between a money fund and a non money fund are not exempt); 2) systematic purchases and redemptions ; 3) checkwriting redemptions from bond and money funds; and 4) for retirement plan partici pants, payroll contributions, withdrawals, and loans.

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There is no guarantee that T. Rowe Price will detect or prevent excessive or short-term trading.

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Signature Guarantees

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An intermediary may need to obtain a signature guarantee in certain situations and should consult its T. Rowe Price Financial Institution Services representative.

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You can obtain a signature guarantee from most banks, savings institutions,
broker-dealers, and other guarantors acceptable to T. Rowe Price. We cannot accept guarantees from notaries public or organizations that do not provide reimbursement in the case of fraud.

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distribution, shareholder servicing, and recordkeeping fees

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More About the Fund 3

Organization and Management

How is the fund organized?

T. Rowe Price International Funds, Inc. , (the "corporation") was incorporated in Maryland in 1979. C urrently , the corporation consists of 12 series, each representing a separate pool of assets with different objectives and investment policies. Each is an " open-end investment company, " or mutual fund. Mutual funds pool money received from shareholders of each class into a single portfolio and invest it to try to achieve specified objectives. In 2000, the International Stock Fund issued a separate class of shares known as the Advisor Class.

What is meant by "shares"?

As with all mutual funds, investors purchase shares when they put money in a fund. These shares are part of a fund`s authorized capital stock, but share certificates are not issued.

Each share and fractional share entitles the shareholder to:

Do T. Rowe Price funds have annual shareholder meetings?

Who runs the fund?

General Oversight

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All decisions regarding the purchase and sale of fund investments are made by T. Rowe Price International — specifically by the fund`s portfolio managers .

Investment Manager

Portfolio Management

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The individuals listed below have day-to-day responsibility for managing the portfolio and developing and exe cuting the fund`s investment program.

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The Management Fee

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Group Fee Schedule

0.334%*	First $50 billion

0.305%	Next $30 billion

0.300%	Next $40 billion

0.295%	Thereafter

* Represents a blended group fee rate containing various break points.

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Understanding Performance Information

This section should help you understand the terms used to describe fund performance.

Total Return

Advertisements may include cumulative or average annual total return figures, which may be compared with var ious indices, other performance measures, or other mutual funds.

Cumulative Total Return

Average Annual Total Return

Investment Policies and Practices

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of net assets in common stocks. Fund investment restrictions and policies apply at the time of purchase . A later change in circumstances will not require the sale of an investment if it was proper at the time it was made. (This exception does not apply to the fund`s borrowing policy . )

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Changes in fund holdings, fund performance, and the contribution of various investments are discussed in the shareholder reports sent to you.

Fund managers have considerable leeway in choosing investment strategies and selecting securities they believe will help achieve fund objectives.

Types of Portfolio Securities

In seeking to meet its investment objective, fund investments may be made in any type of security or instrument (including certain potentially high-risk
derivatives described in this section) whose investment characteristics are consistent with its investment pro gram. The following pages describe various types of fund securities and investment management practices.

Fund investments are primarily in common stocks and, to a lesser degree, other types of securities as described below.

Common and Preferred Stocks

Convertible Securities and Warrants

Fixed-Income Securities

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Hybrid Instruments

Hybrids can have volatile prices and limited liquidity, and their use may not be successful.

Operating policy Fund investments in hybrid instruments are limited to 10% of total assets.

Private Placements

Operating policy Fund investments in illiquid securities are limited to 15% of net assets.

Types of Investment Management Practices

Reserve Position

Borrowing Money and Transferring Assets

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Fundamental policy Borrowings may not exceed 33 1 / 3 % of total assets.

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Foreign Currency Transactions

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Futures and Options

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Tax Consequences of Hedging

Hedging may result in the application of the mark-to-market and straddle provisions of the Internal Revenue Code. These provisions could result in an increase (or decrease) in the amount of taxable dividends paid by the fund and could affect whether dividends paid are classified as capital gains or ordinary income.

Lending of Portfolio Securities

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Fundamental policy The value of loaned securities may not exceed 33 1 / 3 % of total assets.

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Portfolio Turnover

Turnover is an indication of frequency of trading . We 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. Each time the fund purchases or sells a security, it incurs a cost. This cost is reflected in the fund`s net asset value but not its operating expenses. The higher the turnover rate, the higher the transaction costs and the greater the impact on the fund`s total return. Higher turnover can also increase the possibility of taxable capital gain distribu tions . The fund`s portfolio turnover rates are shown in the Financial Highlights table.

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Disclosure of Fund Portfolio Information

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The fund`s portfolio holdings are disclosed on a regular basis in its semi annual and annual reports to shareholders as well as Form N-Q which is filed with the SEC within 60 days of the fund`s first and third fiscal quarter-end. In addition, the fund discloses its calendar quarter-end portfolio holdings on troweprice.com 15 calendar days after each quarter. Under certain conditions, up to 5% of the fund`s holdings may be included in this portfolio list without being individually identified. Generally, securities would be omitted from the list if they are being actively bought or sold and it is determined that the quarter-end disclosure of the holding could be harmful to the fund. A security will not be omitted from the list for more than one year. The fund also discloses its largest 10 holdings seven days after each month-end. These holdings are listed in alphabetical order along

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with the aggregate percentage of the fund`s total assets they represent. The quarter-end portfolio will remain on the Web site for one year. The top 10 list is replaced every six months. A description of the fund`s policy and procedures with respect to the disclosure of portfolio information is in the Statement of Additional Information.

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Financial Highlights

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Table 4, which provides information about the class`s financial history, is based on a single share outstanding throughout the periods shown. The table is part of the class`s financial statements, which are included in its annual report and are incorporated by reference into the Statement of Additional Information (available upon request). The total returns in the table represent the rate that an investor would have earned or lost on an invest ment in the class (assuming reinvestment of all dividends and distributions and no payment of account or [ if applicable ] redemption fees). The financial statements in the annual report were audited by the fund`s indepen dent registered public accounting firm ,
PricewaterhouseCoopers LLP.

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<R> Table 4 Financial Highlights

	03/31/00 * through 10/31/00	Year ended October 31
		2001	2002	200 3	2004

Net asset value, beginning of period	$ 19.12	$ 16.12	$ 10.66	$ 8 . 8 6	$ 10.63
Income From Investment Operations
Net investment income	0.02	0.29	0.10	0.1 2	0.14
Net gains or losses on securities (both realized and unrealized)	(3.02 )	(4.46 )	(1.57 )	1. 76	1.15
Total from investment operations	(3.00 )	(4.17 )	(1.47 )	1. 88	1.29
Less Distributions
Dividends (from net investment income)	—	(0.11 )	(0.30 )	(0. 11 )	(0.12 )
Distributions (from capital gains)	—	(1.18 )	(0.03 )	—	(0.03 )
Returns of capital	—	—	—	—	—
Total distributions	—	(1.29 )	(0.33 )	(0. 11 )	(0.15 )
Redemption fees added to paid in capital	—	—	—	—	—
Net asset value, end of period	$ 16.12	$ 10.66	$ 8. 8 6	$ 10 .6 3	$ 11.77
Total return	(15.69 )%	(28.06 )%	(14.37 )%	2 1 . 49 %	12.24 %
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$ 1,500	$ 6,938	$ 10,207	$ 1 8 , 309	$ 30,329
Ratio of expenses to average net assets	0.83 % a	1.05 %	1.15 %	1. 11 %	1.14 %
Ratio of net income to average net assets	0.63 % a	2.26 %	0.82 %	1.28 %	1.03 %
Portfolio turnover rate	38.2 %	17.4 %	21.6 %	25.2 %	28.2 %

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* Inception date.

a Annualized.

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Investing With T. Rowe Price 4

Account Requirements and Transaction Information

Tax Identification
Number

All initial and subsequent investments by intermediaries must be made by bank wire.

Opening a New Account

$2,500 minimum initial investment; $1,000 for retirement plans or gifts or transfers to minors (UGMA / UTMA) accounts

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Important Information About Opening an Account

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Pursuant to federal law, all financial institutions must obtain, verify, and record information that identifies each person or entity that opens an account.

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Intermediaries should call Financial Institution Services for an account number and assignment to a dedicated service representative and give the following wire information to their bank:

In order to obtain an account number, the intermediary must supply the name, Social Security or employer identifica tion number, and business street address for the account.

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Intermediaries should c omplete a New Account Form and mail it to one of the appropriate addresses listed below. I ntermediaries must also enter into a separate agreement with the fund or its agent.

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via U . S . Postal Service

T. Rowe Price Financial Institution Services
P.O. Box 17603
Baltimore, MD 21297-1603

via private carriers/overnight services

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T. Rowe Price Financial Institution Services
Mail Code: OM- 4232
4515 Painters Mill Road
Owings Mills, MD 21117-4842

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Purchasing Additional ShareS

$100 minimum additional purchase; $50 minimum for retirement plans, Automatic Asset Builder, and gifts or transfers to minors (UGMA/UTMA) accounts

By Wire

Intermediaries should call Financial Institution Services or use the wire instructions listed in Opening a New Account.

Exchanging and redeeming ShareS

Exchange Service

Redemptions

Unless otherwise indicated, redemption proceeds will be wired to the intermediary`s designated bank. Intermediaries should contact their Financial Institution Services representative.

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Some of the T. Rowe Price Advisor Classes may impose a redemption fee. Check the fund`s prospectus. The fee is paid to the fund.

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Rights Reserved by the Funds

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T. Rowe Price funds and their agents reserve the following rights: (1) to waive or lower investment minimums; (2) to accept initial purchases by telephone or mailgram; (3) to refuse any purchase or exchange order; (4) to cancel or rescind any purchase or exchange order placed through an intermediary, no later than the business day after the order is received by the intermediary (including, but not limited to, orders deemed to result in excessive trading, market tim ing, or 5% ownership) upon notice to the shareholder within five business days of the trade or if the written confirma tion has not been received by the shareholder, whichever is sooner; (5) to cease offering fund shares at any time to all or certain groups of investors; ( 6 ) to freeze any account and suspend account services when notice has been received of a dispute between the registered or beneficial account owners or there is reason to believe a fraudulent transaction may occur; ( 7 ) to otherwise modify the conditions of purchase and any services at any time; ( 8 ) to waive any wire , small account, maintenance , or fiduciary fees charged to a group of shareholder s ; ( 9 ) to act on instructions reasonably believed to be genuine ; and ( 10 ) to involuntarily redeem your account at the net asset value calculated the day the account is redeemed, in cases of threatening conduct , suspected fraudulent or illegal activity , or if the fund or its agent is unable , through its procedures, to verify the identity of the person(s) or entity opening an account .

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These actions will be taken when, in the sole discretion of management, they are deemed to be in the best interest of the fund or if required by law .

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T. rowe price Privacy Policy

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We do not sell information about current or former customers to any third parties, and we do not disclose it to third parties unless necessary to process a transaction, service an account, or as otherwise permitted by law. We may share information within the T. Rowe Price family of companies in the course of providing or offering products and ser vices to best meet your investing needs. We may also share that information with companies that perform adminis trative or marketing services for T. Rowe Price, with a research firm we have hired, or with a business partner, such as a bank or insurance company with whom we are developing or offering investment products. When we enter into such a relationship, our contracts restrict the companies ` use of our customer information, prohibiting them from sharing or using it for any purposes other than those for which they were hired.

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___________________________________________________________________

1940 Act File No. 811-2958

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E237-040 3/1/05

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T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202

A fund Statement of Additional Information has been filed with the Secu rities and Exchange Commission and is incorporated by reference into this prospectus. Further information about fund investments, including a review of market conditions and the manager`s recent strategies and their impact on performance, is available in the annual and semiannual share holder reports. To obtain free copies of any of these documents, call your intermediary.

March 1, 2005

Prospectus

T. Rowe Price

International Stock Fund — R Class

A stock fund seeking long-term capital growth through investments in non-U.S. companies. This class of shares is sold only through financial intermediaries.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

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1	About the Fund
	Objective, Strategy, Risks, and Expenses	1
	Other Information About the Fund	5

2	Information About Accounts in T. Rowe Price Funds
	Pricing Shares and Receiving Sale Proceeds	7
	Useful Information on Distributions and Taxes	11
	Transaction Procedures and Special Requirements	14
	Distribution, Shareholder Servicing, and Recordkeeping Fees	16

3	More About the Fund
	Organization and Management	17
	Understanding Performance Information	19
	Investment Policies and Practices	19
	Disclosure of Fund Portfolio Information	24
	Financial Highlights	25

4	Investing With T. Rowe Price
	Account Requirements and Transaction Information	27
	Purchasing Additional Shares	28
	Exchanging and Redeeming Shares	29
	Rights Reserved by the Funds	29
	T. Rowe Price Privacy Policy	31

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T. Rowe Price International Funds, Inc.

T. Rowe Price International Stock Fund — R Class

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T. Rowe Price International, Inc. managed $23.6 billion in foreign stocks and bonds as of December 31, 2004 , through its offices in Baltimore, London, Singapore, Hong Kong, Buenos Aires, and Paris.

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About the Fund 1

objective, strategy, risks, and expenses

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A word about the fund`s name and structure. The R Class is a share class of its respective T. Rowe Price fund and is not a separate mutual fund. The shares are designed to be sold only through various third-party intermediaries that offer employer-sponsored defined contribution retirement plans, including brokers, dealers, banks, insurance companies, retirement plan recordkeepers, and others .

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What is the fund`s objective?

The fund seeks long-term growth of capital through investments primarily in the common stocks of estab lished, non-U.S. companies.

What is the fund`s principal investment strategy?

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T. Rowe Price International, Inc. ("T. Rowe Price International") employs in-depth fundamental research in an effort to identify companies capable of
achieving and sustaining above-average, long-term earnings growth. We seek to purchase such stocks at reason able prices in relation to present or anticipated earnings, cash flow, or book value, and valuation factors often influence our allocations among large-, mid-, or small-cap shares.

In selecting stocks, we generally favor companies with one or more of the following characteristics:

leading market position;

attractive business niche;

strong franchise or monopoly;

technological leadership or proprietary advantages;

seasoned management;

earnings growth and cash flow sufficient to support growing dividends; and

healthy balance sheet with relatively low debt.

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While the fund invests primarily in common stocks, it may also purchase other securities, including futures and options, in keeping with the fund`s objective.

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The fund may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities.

What are the main risks of investing in the fund?

Currency risk This refers to a decline in the value of a foreign currency versus the U.S. dollar, which reduces the dollar value of securities denominated in that currency. The overall impact on a fund`s holdings can be signifi cant, unpredictable, and long lasting , depending on the currencies represented in the portfolio and how each one appreciates or depreciates in relation to the U.S. dollar and whether currency positions are hedged. Under normal conditions, the fund does not engage in extensive foreign currency hedging programs. Further, exchange rate movements are volatile , and it is not possible to effectively hedge the currency risks of many developing countries.

Geographic risk The economies and financial markets of certain regions — such as Latin America and Asia — can be interdependent and may all decline at the same time.

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While certain countries have made progress in economic growth, liberalization, fiscal discipline, and political and social stability, there is no assurance these trends will continue.

Futures/options risk To the extent the fund uses futures and options, it is exposed to additional volatility and potential losses.

As with any mutual fund, there can be no guarantee the fund will achieve its objective.

The fund`s share price may decline, so when you sell your shares, you may lose money .

How can I tell if the fund is appropriate for me?

Consider your investment goals, your time horizon for achieving them, and your tolerance for risk. If you are investing through an intermediary, want to diversify your domestic stock portfolio by adding foreign invest ments, seek the long-term capital appreciation potential of growth stocks, and are comfortable with the risks that accompany foreign investments, the fund could be an appropriate part of your overall investment strategy.

The fund can be used in both regular and tax-deferred accounts, such as IRAs.

The fund should not represent your complete investment program or be used for short-term trading purposes.

How has the fund performed in the past?

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The fund can also experience short-term performance swings, as shown by the best and worst calendar quarter returns during the years depicted .

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In addition, the average annual total return s table shows hypothetical after-tax returns to suggest how taxes paid by the shareholder may influence returns. Actual after-tax returns depend on each investor`s situation and may differ from those shown. After-tax returns are not relevant if the shares are held in a
tax-deferred account, such as a 401(k) or IRA. During periods of fund losses, the post-liquidation after-tax return may exceed the fund`s other returns because the loss generates a tax benefit that is factored into the result.

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Table 1 Average Annual Total Returns

	Periods ended December 31, 2004
	1 year	Since inception (9/30/02)
International Stock Fund — R Class
Return s before taxes	13.24 %	23.40 %
Return s after taxes on distributions	13.13	23.22
Return s after taxes on distributions and sale of fund shares	8.93	20.32
MSCI EAFE Index	20.70	29.47
Lipper International Large-Cap Growth Funds Average	13.48	22.38

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MSCI EAFE Index tracks the stocks of about 1,000 companies in Europe, Australasia, and the Far East (EAFE).

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What fees and expenses will I pay?

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Shareholder fees (fees paid directly from your investment)
Redemption fee	2.00% a
Annual fund operating expenses (expenses that are deducted from fund assets)
Management fee	0.66 %
Distribution and service (12b-1) fees	0.50%
Other expenses	0.34 %
Total annual fund operating expenses	1.50%
Fees waiver/reimbursement	0.10 % b
Net expenses	1.40 % b

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* Redemption proceeds of less than $5,000 sent by wire are subject to a $5 fee paid to the fund.

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a On shares purchased and held for less than 90 days (details under Contingent Redemption Fee in Pricing Shares and Receiving Sales Proceeds) .

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b Effective March 1 , 200 4 , T. Rowe Price International contractually obligated itself to bear any expenses and/or waive its fees through February 28, 2006, that would cause the class`s ratio of expenses to average net assets to exceed 1.40% . Expenses paid or assumed or fees waived under this agreement are subject to reimbursement to T. Rowe Price International by the fund whenever the class`s expense ratio is below 1.40% ; however, no reimbursement will be made after February 2 9 , 200 8 or if it would result in the expense ratio exceeding 1.40% . Any amounts reimbursed will have the effect of increasing fees oth

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erwise paid by the class. The fund operated under a previous expense limitation for which T. Rowe Price may be reimbursed.

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1 year	3 years	5 years	10 years
$ 143	$ 461	$ 806	$ 1,779

other INFORMATION about the fund

What are some of the potential rewards of investing overseas through the fund?

How does the portfolio manager try to reduce risk?

The principal tools we use to try to reduce risk are intensive research and limiting exposure to any one industry or company. Currency hedging techniques may be used from time to time.

Is there other information I can review before making a decision?

Investment Policies and Practices in Section 3 discusses various types of portfolio securities the fund may pur chase as well as types of management practices the fund may use.

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Information About Accounts in T. Rowe Price Funds 2

As a T. Rowe Price shareholder, you will want to know about the following policies and procedures that apply to all R Class accounts .

Pricing Shares and Receiving Sale Proceeds

How and when shares are priced

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The share price (also called "net asset value" or NAV per share) for each class of shares is calculated at the close of the New York Stock Exchange, normally 4 p.m. ET, each day that the e xchange is open for business. To calculate the NAV, the fund`s assets are valued and totaled, liabilities are subtracted, and each class`s proportionate share of the balance, called net assets, is divided by the number of shares outstanding of that class. Market values are used to price stocks and bonds . Market values represent the prices at which securities actually trade or evaluations based on the judgment of the fund`s pricing services. If a market value for a security is not available, the fund will make a good faith effort to assign a fair value to the security.

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The portfolio securities of funds investing in foreign markets are valued on the basis of the most recent closing market prices at 4 p.m. ET except under the circumstances described below . Most foreign markets close before 4 p.m. For securities primarily traded in the Far East, for example, the most recent closing prices may be as much as 15 hours old at 4 p.m. If a fund determines that developments between the close of the foreign market and 4 p.m. ET will, in its judgment, materially affect the value of some or all of the fund`s securities, the fund will adjust the previous closing prices to reflect what it believes to be the fair value of the securities as of 4 p.m. ET. In deciding whether to make these adjustments, the fund reviews a variety of factors, including developments in foreign markets, the performance of U.S. securities markets , and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities . A fund may also fair value securities in other situations, for example, when a particular foreign market is closed but the fund is open.

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The fund uses outside pricing services to provide it with closing market prices and information used for adjust ing those prices. The fund cannot predict how often it will use closing prices and how often it will adjust those prices. As a means of evaluating its fair value process, the fund routinely compares closing market prices, the next day`s opening prices in the same markets, and adjusted prices.

How your purchase, sale, or exchange price is determined

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How proceeds are received

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Contingent Redemption Fee

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T. Rowe Price Funds With Redemption Fees
Fund name	Redemption fee	Holding period *
International Growth & Income — R Class	2%	90 days /3 months
International Stock — R Class	2%	90 days /3 months

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Redemption fees are paid to a fund to deter short-term trading, offset costs, and protect the fund`s long-term shareholders. All persons holding shares of a T. Rowe Price fund that imposes a redemption fee are subject to the fee , whether the person is holding shares directly with a T. Rowe Price fund, through a retirement plan for which T. Rowe Price serves as recordkeeper, or indirectly through an intermediary, such as a broker, bank, investment adviser, recordkeeper for retirement plan participants, or any other third party .

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* Computation of holding period

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When an investor sells shares of a fund that assesses a redemption fee, T. Rowe Price will use the "first-in, first- out" (FIFO) method to determine the holding period for the shares sold. Under this method, the date of redemption or exchange will be compared with the earliest purchase date of shares held in the account. A redemption fee will be charged on shares sold before the end of the required holding period.

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If you purchase shares through a retirement plan for which T. Rowe Price serves as recordkeeper, the holding period is 90 days. For example, if you redeem your shares on or before the 90th day from the date of purchase, you will be assessed the redemption fee.

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If you purchase shares through an intermediary, consult your intermediary to determine how the holding period (for example, 90 days versus three months) will be applied.

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Transactions n ot s ubject to r edemption f ees

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The T. Rowe Price funds will not assess a redemption fee with respect to certain transactions. At this time, the fol lowing shares of T. Rowe Price funds will not be subject to redemption fees:

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1. Shares redeemed via a n automated systematic withdrawal plan ;

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2. Shares redeemed through or used to establish an automat ed , nondiscretionary rebalancing or asset alloca tion program , if approved in writing by T. Rowe Price;

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3. Shares purchased by the reinvestment of dividends or capital gain distributions; *

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5. Shares redeemed as part of a retirement plan participant-directed distribution including, but not limited to, the following examples:

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a. Death distributions

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b. Hardship withdrawals

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c. Loan s

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d . Employment termination withdrawals

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e. Qualified Domestic Relations Orders (QDROs);

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6. Shares redeemed as part of a retirement plan termination or restructuring;

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7. Shares transferred from one retirement plan to another retirement plan in the same fund; *

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8. Shares converted from one share class to another share class of the same fund; *

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9. Shares redeemed by a fund ( e.g. , for failure to meet account minimums or to cover various fees such as fiduciary fees) ;

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10. Shares purchased by rollover and changes of account registration within the same fund;*

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11. Shares redeemed to return an excess contribution in an IRA account;

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12. Shares purchased by a fund-of-fund product, if approved in writing by T. Rowe Price;

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13. Shares transferred to T. Rowe Price or a third party intermediary acting as a service provider when the age of the shares cannot be determined systematically ;*

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14. Shares redeemed in retirement plans or other products that restrict trading to no more frequently than once per quarter , if approved in writing by T. Rowe Price.

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* Subsequent exchanges of these shares into funds that assess redemption fees will be subject to the fee.

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Implementation

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Recordkeepers for retirement plan participants who were not able to implement the redemption fees by January 1, 2005, because of systems limitations and who provided verification to that effect were permitted to delay the implementation of redemption fees. All such recordkeepers are expected to implement the redemption fees by March 31, 2005 , or implement short-term trading restrictions approved by T. Rowe Price until they have the systems capabilities to assess the fees. Any person purchasing shares through a retirement plan recordkeeper should check with their recordkeeper to determine when purchases will be subject to redemption fees.

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Shares held or purchased prior to January 1, 2005, are subject to the terms for holding periods and early redemption as set forth in the prospectus in effect when the shares were originally purchased. For example, shares of the T. Rowe Price New Asia Fund purchased on December 31, 2004, would be subject to a one-year holding period and 2% redemption fee if sold within one year; shares of the fund purchased on January 3, 2005, would be subject to the new 90-day/three-month holding period and a 2% redemption fee if sold within the 90-day/three-month holding period.

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Useful Information on Distributions and Taxes

All net investment income and realized capital gains are distributed to shareholders.

Dividends and Other Distributions

Dividend and capital gain distributions are reinvested in additional fund shares in your account unless you select another option on your New Account Form. Reinvesting distributions results in compounding, that is, receiving income dividends and capital gain distributions on a rising number of shares.

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No interest will accrue on amounts represented by uncashed distribution s or redemption checks.

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The following table provides details on dividend payments:

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<R> Table 3 Dividend Payment Schedule

Fund	Dividends
Bond funds	Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Declared daily and p aid on the first business day of each month.
Equity Income Fund — R Class	Declared quarterly, if any, in March, June, September, and December. Must be a shareholder on the record date.
Other stock funds	Declared annually, if any, generally in December. Must be a shareholder on the record date.
Retirement Funds : Retirement Income Fund — R Class All others	Shares normally begin to earn dividends on the business day after payment is received by T. Rowe Price . Paid on the first business day of each month. Declared annually, if any, generally in December. Must be a shareholder on the record date.

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If you purchase and sell your shares through an intermediary, consult your intermediary to determine when your shares begin and stop accruing dividends; the information described above may vary.

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Capital gain payments

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A capital gain or loss is the difference between the purchase and sale price
of a security.

Tax Information

You should contact your intermediary for the tax information that will be sent to you and reported to the IRS.

If you invest in the fund through a taxable account, y ou will generally be subject to tax when:

You sell fund shares, including an exchange from one fund to another.

The fund makes a distribution to your account.

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For individual shareholders, a portion of ordinary dividends representing " qualified dividends " received by the fund may be subject to tax at the lower rate applicable to long-term capital gains, rather than ordinary income. You may report it as a qualifying dividend in computing your taxes provided you have held the fund shares on which the dividend was paid for more than 60 days during the 12 1 -day period beginning 60 days before the ex- dividend date. Ordinary dividends that do not qualify for this lower rate are generally taxable at the investor`s marginal income tax rate. This includes the portion of ordinary dividends derived from interest, short-term gains, distributions from certain
nonqualified foreign corporations, and dividends received by the fund from stocks that were on loan. Little, if any, of the ordinary dividends paid by the bond fund R Class es is expected to qualify for this lower rate.

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For corporate shareholders, a portion of ordinary dividends may be eligible for the 70% deduction for divi dends received by corporations to the extent the fund`s income consists of dividends paid by U.S. corporations. Little, if any, of the ordinary dividends paid by the international or bond fund R Class es is expected to qualify for this deduction.

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Taxes on fund redemptions

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When you sell shares in any fund, you may realize a gain or loss. An exchange from one fund to another is a sale for tax purposes.

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Taxes on fund distributions

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The tax treatment of a capital gain distribution is determined by how long the fund held the portfolio securities, not how long you held the shares in the fund. Short-term (one year or less) capital gain distributions are taxable at the same rate as ordinary income , and gains on securities held more than 12 months are taxed at the lower rates applicable to long-term capital gains . If you realized a loss on the sale or exchange of fund shares that you held six months or less, your short-term loss must be reclassified as a long-term loss to the extent of any long- term capital gain distribution s received during the period you held the shares. For funds investing in foreign securities, distributions resulting from the sale of
certain foreign currencies, currency contracts, and the currency portion of gains on debt securities are taxed as ordinary income. Net foreign currency losses may cause monthly or quarterly dividend s to be re classified as a return of capital .

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Retirement Funds

Distributions by the underlying funds and changes in asset allocations may result in taxable distributions of ordinary income or capital gains.

Tax consequences of hedging

Entering into certain options, futures, swaps, and forward foreign exchange contracts and transactions may result in the application of the mark-to-market and straddle provisions of the Internal Revenue Code. These provisions could result in a fund being required to distribute gains on such transactions even though it did not close the contracts during the year or receive cash to pay such distributions. The fund may not be able to reduce its distributions for losses on such transactions to the extent of unrealized gains in offsetting positions.

Distributions are taxable whether reinvested in additional shares or received in cash.

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Tax effect of buying shares before a n income dividend or capital gain distribution

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If you buy shares shortly before or on the "record date" — the date that establishes you as the person to receive the upcoming distribution — you may receive a portion of the money you just invested in the form of a taxable distri bution. Therefore, you may wish to find out a fund`s record date before investing. Of course, a fund`s share price may, at any time, reflect undistributed capital gains or income and unrealized appreciation, which may result in future taxable distributions. Such distributions can occur even in a year when the fund has a negative return.

Transaction Procedures and Special Requirements

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Purchase Conditions for Intermediaries

Nonpayment

If the fund receives a check or ACH transfer that does not clear or the payment is not received in a timely man ner , your purchase may be canceled. The intermediary will be responsible for a ny losses or expenses incurred by the fund or transfer agent . The fund and its agents have the right to reject or cancel any purchase, exchange, or redemption due to nonpayment.

U.S. dollars

All purchases must be paid for in U.S. dollars; checks must be drawn on U.S. banks.

Sale (Redemption) Conditions

Holds on immediate redemptions: 10-day hold

Redemptions over $250,000

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Excessive and Short-Term Trading

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T. Rowe Price may bar excessive and short-term traders from purchasing shares.

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Excessive or short-term trading in fund shares may disrupt management of a fund and raise its costs. Short-term traders in funds investing in foreign securities can seek to take advantage of an anticipated difference between the price of the fund`s shares and price movements in overseas markets (see "How and when shares are priced"). While there is no assurance that T. Rowe Price can prevent all excessive and short-term trading, the Board of Directors/Trustees of each fund has adopted the policy set forth below to deter such activity. Persons trading directly with T. Rowe Price or indirectly through intermediaries in violation of this policy or persons believed to be short-term traders may be barred for 90 calendar days or permanently from further purchases of the Price funds . Purchase transaction s placed by such persons are subject to rejection without notice.

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The following types of transactions are exempt from this policy: 1) trades
solely in money market funds (exchanges between a money fund and a non money fund are not exempt); 2) systematic purchases and redemptions ; 3) checkwriting redemptions from bond and money funds; and 4) for retirement plan participants, payroll contributions, withdrawals, and loans.

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In addition, transactions in automated nondiscretionary rebalancing programs , nondiscretionary asset alloca tion programs, or fund -of -fund s products may be exempt from the excessive trading policy subject to prior writ ten approval by designated persons at T. Rowe Price.

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There is no guarantee that T. Rowe Price will detect or prevent excessive or short-term trading.

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PAGE 173

Signature Guarantees

An intermediary may need to obtain a signature guarantee in certain situations and should consult its T. Rowe Price Financial Institution Services representative.

You can obtain a signature guarantee from most banks, savings institutions,
broker-dealers, and other guarantors acceptable to T. Rowe Price. We cannot accept guarantees from notaries public or organizations that do not provide reimbursement in the case of fraud.

Distribution, Shareholder Servicing, and Recordkeeping Fees

More About the Fund 3

Organization and Management

How is the fund organized?

T. Rowe Price International Funds, Inc. , (the "corporation") was incorporated in Maryland in 1979. C urrently , the corporation consists of 12 series, each representing a separate pool of assets with different objectives and investment policies. Each is an " open-end investment company, " or mutual fund. Mutual funds pool money received from shareholders of each class into a single portfolio and invest it to try to achieve specified objectives. In 2002, the International Stock Fund issued a separate class of shares known as the R Class.

What is meant by "shares"?

As with all mutual funds, investors purchase shares when they put money in a fund. These shares are part of a fund`s authorized capital stock, but share certificates are not issued.

Each share and fractional share entitles the shareholder to:

Do T. Rowe Price funds have annual shareholder meetings?

Who runs the fund?

General Oversight

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All decisions regarding the purchase and sale of fund investments are made by T. Rowe Price — specifically by fund`s portfolio managers .

Investment Manager

Portfolio Management

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The individuals listed below have day-to-day responsibility for managing the portfolio and developing and exe cuting the fund`s investment program.

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The Management Fee

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Group Fee Schedule

0.334%*	First $50 billion

0.305%	Next $30 billion

0.300%	Next $40 billion

0.295%	Thereafter

* Represents a blended group fee rate containing various break points.

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Understanding Performance Information

This section should help you understand the terms used to describe fund
performance.

Total Return

Advertisements may include cumulative or average annual total return figures, which may be compared with var ious indices, other performance measures, or other mutual funds.

Cumulative Total Return

Average Annual Total Return

Investment Policies and Practices

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Changes in fund holdings, fund performance, and the contribution of various investments are discussed in the shareholder reports sent to you.

Fund managers have considerable leeway in choosing investment strategies and selecting securities they believe will help achieve fund objectives.

Types of Portfolio Securities

In seeking to meet its investment objective, fund investments may be made in any type of security or instrument (including certain potentially high-risk
derivatives described in this section) whose investment characteristics are consistent with its investment pro gram. The following pages describe various types of fund securities and investment management practices.

Fund investments are primarily in common stocks and, to a lesser degree, other types of securities as described below.

Common and Preferred Stocks

Convertible Securities and Warrants

Fixed-Income Securities

PAGE 177

Hybrid Instruments

Hybrids can have volatile prices and limited liquidity, and their use may not be successful.

Operating policy Fund investments in hybrid instruments are limited to 10% of total assets.

Private Placements

Operating policy Fund investments in illiquid securities are limited to 15% of net assets.

Types of Investment Management Practices

Reserve Position

Borrowing Money and Transferring Assets

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Fundamental policy Borrowings may not exceed 33 1 / 3 % of total assets.

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Foreign Currency Transactions

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Futures and Options

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Tax Consequences of Hedging

Hedging may result in the application of the mark-to-market and straddle provisions of the Internal Revenue Code. These provisions could result in an increase (or decrease) in the amount of taxable dividends paid by the fund and could affect whether dividends paid are classified as capital gains or ordinary income.

Lending of Portfolio Securities

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Fundamental policy The value of loaned securities may not exceed 33 1 / 3 % of total assets.

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Portfolio Turnover

Turnover is an indication of frequency of trading . We 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. Each time the fund purchases or sells a security, it incurs a cost. This cost is reflected in the fund`s net asset value but not its operating expenses. The higher the turnover rate, the higher the transaction costs and the greater the impact on the fund`s total return. Higher turnover can also increase the possibility of taxable capital gain distribu tions . The fund`s portfolio turnover rates are shown in the Financial Highlights table.

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Disclosure of Fund Portfolio Information

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The fund`s portfolio holdings are disclosed on a regular basis in its semi annual and annual reports to shareholders as well as Form N-Q which is filed with the SEC within 60 days of the fund`s first and third fiscal quarter-end. In addition, the fund discloses its calendar quarter-end portfolio holdings on troweprice.com 15 calendar days after each quarter. Under certain conditions, up to 5% of the fund`s holdings may be included in this portfolio list without being individually identified. Generally, securities would be omitted from the list if they are being actively bought or sold and it is determined that the quarter-end disclosure of the holding could be harmful to the fund. A security will not be omitted from the list for more than one year. The fund also discloses its largest 10 holdings seven days after each month-end. These holdings are listed in alphabetical order along

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Financial Highlights

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<R> Table 4 Financial Highlights

	9 /30 /0 2 * through 10/31/02	Year ended October 31
		200 3	2004

Net asset value, beginning of period	$ 8. 29	$ 8.88	$ 10.62
Income From Investment Operations
Net investment income	—	0.13 b	0.13 b
Net gains or losses on securities (both realized and unrealized)	0. 59	1.72	1.13
Total from investment operations	0. 59	1.85	1.26
Less Distributions
Dividends (from net investment income)	—	( 0 .11 )	(0.12 )
Distributions (from capital gains)	—	—	(0.03 )
Returns of capital	—	—	—
Total distributions	—	—	(0.15 )
Redemption fees added to paid in capital	—	—	—
Net asset value, end of period	$ 8 . 88	$ 10.62	$ 11.73
Total return	7. 1 2 %	21.10 % b	11.97 % b
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$ 107	$ 216	$ 3,139
Ratio of expenses to average net assets	1 .22 % a	1.40 % b	1.40 % b
Ratio of net income to average net assets	(0 . 2 1 )% a	0.82 % b	0.50 % b
Portfolio turnover rate	21. 6 %	25.2 %	28.2 %

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* Inception date.

a Annualized.

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b Excludes expenses in excess of a 1.40% contractual expense limitation in effect through 2/28/0 6 .

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Investing With T. Rowe Price 4

Account Requirements and Transaction Information

Tax Identification
Number

All initial and subsequent investments by intermediaries must be made by bank wire.

Opening a New Account

$2,500 minimum initial investment; $1,000 for retirement plans or gifts or transfers to minors (UGMA / UTMA) accounts

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Important Information About Opening an Account

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Pursuant to federal law, all financial institutions must obtain, verify, and record information that identifies each person or entity that opens an account.

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Intermediaries should call Financial Institution Services for an account number and assignment to a dedicated service representative and give the following wire information to their bank:

In order to obtain an account number, the intermediary must supply the name, Social Security or employer identifica tion number, and business street address for the account.

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Intermediaries should c omplete a New Account Form and mail it to one of the appropriate addresses listed below. I ntermediaries must also enter into a separate agreement with the fund or its agent.

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via U . S . Postal Service

T. Rowe Price Financial Institution Services
P.O. Box 17603
Baltimore, MD 21297-1603

via private carriers/overnight services

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T. Rowe Price Financial Institution Services
Mail Code: OM- 4232
4515 Painters Mill Road
Owings Mills, MD 21117-4842

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Purchasing Additional ShareS

$100 minimum additional purchase; $50 minimum for retirement plans, Automatic Asset Builder, and gifts or transfers to minors (UGMA/UTMA) accounts

By Wire

Intermediaries should call Financial Institution Services or use the wire instructions listed in Opening a New Account.

Exchanging and redeeming ShareS

Exchange Service

Redemptions

Unless otherwise indicated, redemption proceeds will be wired to the intermediary`s designated bank. Intermediaries should contact their Financial Institution Services representative.

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Some of the T. Rowe Price Advisor Classes may impose a redemption fee. Check the fund`s prospectus. The fee is paid to the fund.

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Rights Reserved by the Funds

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T. Rowe Price funds and their agents reserve the following rights: (1) to waive or lower investment minimums; (2) to accept initial purchases by telephone or mailgram; (3) to refuse any purchase or exchange order; (4) to cancel or rescind any purchase or exchange order placed through an intermediary, no later than the business day after the order is received by the intermediary (including, but not limited to, orders deemed to result in excessive trading, market tim ing, or 5% ownership) upon notice to the shareholder within five business days of the trade or if the written confirma tion has not been received by the shareholder, whichever is sooner; (5) to cease offering fund shares at any time to all or certain groups of investors; ( 6 ) to freeze any account and suspend account services when notice has been received of a dispute between the registered or beneficial account owners or there is reason to believe a fraudulent transaction may occur; ( 7 ) to otherwise modify the conditions of purchase and any services at any time; ( 8 ) to waive any wire , small account, maintenance , or fiduciary fees charged to a group of shareholder s ; ( 9 ) to act on instructions reasonably believed to be genuine ; and ( 10 ) to involuntarily redeem your account at the net asset value calculated the day the account is redeemed, in cases of threatening conduct , suspected fraudulent or illegal activity , or if the fund or its agent is unable , through its procedures, to verify the identity of the person(s) or entity opening an account .

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These actions will be taken when, in the sole discretion of management, they are deemed to be in the best interest of the fund or if required by law .

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PAGE 183

T. rowe price Privacy Policy

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We do not sell information about current or former customers to any third parties, and we do not disclose it to third parties unless necessary to process a transaction, service an account, or as otherwise permitted by law. We may share information within the T. Rowe Price family of companies in the course of providing or offering products and ser vices to best meet your investing needs. We may also share that information with companies that perform adminis trative or marketing services for T. Rowe Price, with a research firm we have hired, or with a business partner, such as a bank or insurance company with whom we are developing or offering investment products. When we enter into such a relationship, our contracts restrict the companies ` use of our customer information, prohibiting them from sharing or using it for any purposes other than those for which they were hired.

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___________________________________________________________________

1940 Act File No. 811-2958

E437-040 3/1/05

T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202

A fund Statement of Additional Information has been filed with the Secu rities and Exchange Commission and is incorporated by reference into this prospectus. Further information about fund investments, including a review of market conditions and the manager`s recent strategies and their impact on performance, is available in the annual and semiannual share holder reports. To obtain free copies of any of these documents, call your intermediary.

This is the Statement of Additional Information for all of the funds listed below. It is divided into two parts (Part I and Part II). Part I contains information that is particular to each fund, while Part II contains information that generally applies to all of the funds in the T. Rowe Price family of funds ( the "Price Funds" ).

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The date of this Statement of Additional Information ("SAI") is March 1, 2005 .

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T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. Rowe Price Blue Chip Growth Fund — Advisor Class

T. Rowe Price Blue Chip Growth Fund — R Class

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST ("California Funds")

California Tax-Free Bond Fund

California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. Rowe Price Capital Appreciation Fund — Advisor Class

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. Rowe Price Capital Opportunity Fund — Advisor Class

T. Rowe Price Capital Opportunity Fund — R Class

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID -CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. Rowe Price Equity Income Fund — Advisor Class

T. Rowe Price Equity Income Fund — R Class

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. Rowe Price Growth Stock Fund — Advisor Class

T. Rowe Price Growth Stock Fund — R Class

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. Rowe Price High Yield Fund — Advisor Class

T. ROWE PRICE INDEX TRUST, INC.

T. Rowe Price Equity Index 500 Fund

T. Rowe Price Extended Equity Market Index Fund

T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC. ("Institutional Equity Funds")

T. Rowe Price Institutional Large-Cap Core Growth Fund

T. Rowe Price Institutional Large-Cap Growth Fund

T. Rowe Price Institutional Large-Cap Value Fund

T. Rowe Price Institutional Mid-Cap Equity Growth Fund

T. Rowe Price Institutional Small-Cap Stock Fund

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.

T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.

T. Rowe Price Institutional Emerging Markets Equity Fund

T. Rowe Price Institutional Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.

T. Rowe Price Emerging Europe & Mediterranean Fund

T. Rowe Price Emerging Markets Bond Fund

PAGE 185

T. Rowe Price Emerging Markets Stock Fund

T. Rowe Price European Stock Fund

T. Rowe Price Global Stock Fund

T. Rowe Price International Bond Fund ®

T. Rowe Price International Bond Fund — Advisor Class

T. Rowe Price International Discovery Fund

T. Rowe Price International Growth & Income Fund

T. Rowe Price International Growth & Income Fund — Advisor Class

T. Rowe Price International Growth & Income Fund — R Class

T. Rowe Price International Stock Fund

T. Rowe Price International Stock Fund — Advisor Class

T. Rowe Price International Stock Fund — R Class

T. Rowe Price Japan Fund

T. Rowe Price Latin America Fund

T. Rowe Price New Asia Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.

T. Rowe Price International Equity Index Fund

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. Rowe Price Mid-Cap Growth Fund — Advisor Class

T. Rowe Price Mid-Cap Growth Fund — R Class

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. Rowe Price Mid-Cap Value Fund — Advisor Class

T. Rowe Price Mid-Cap Value Fund — R Class

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 New Income Fund — Advisor Class

T. Rowe Price New Income Fund — R Class

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC. ("Personal Strategy Funds")

T. Rowe Price Personal Strategy Balanced Fund

T. Rowe Price Personal Strategy Growth Fund

T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. Rowe Price Real Estate Fund — Advisor Class

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC. ("Reserve Investment Funds")

T. Rowe Price Government Reserve Investment Fund

T. Rowe Price Reserve Investment Fund

T. ROWE PRICE RETIREMENT FUNDS, INC. ("Retirement Funds")

T. Rowe Price Retirement 2005 Fund

T. Rowe Price Retirement 2010 Fund

T. Rowe Price Retirement 2010 Fund — Advisor Class

T. Rowe Price Retirement 2010 Fund — R Class

T. Rowe Price Retirement 2015 Fund

T. Rowe Price Retirement 2020 Fund

T. Rowe Price Retirement 2020 Fund — Advisor Class

T. Rowe Price Retirement 2020 Fund — R Class

T. Rowe Price Retirement 2025 Fund

T. Rowe Price Retirement 2030 Fund

T. Rowe Price Retirement 2030 Fund — Advisor Class

T. Rowe Price Retirement 2030 Fund — R Class

T. Rowe Price Retirement 2035 Fund

T. Rowe Price Retirement 2040 Fund

T. Rowe Price Retirement 2040 Fund — Advisor Class

T. Rowe Price Retirement 2040 Fund — R Class

T. Rowe Price Retirement Income Fund

T. Rowe Price Retirement Income Fund — Advisor Class

T. Rowe Price Retirement Income Fund — R Class

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. Rowe Price Science & Technology Fund — Advisor Class

T. ROWE PRICE SHORT TERM BOND FUND, INC.

T. Rowe Price Short-Term Bond Fund — Advisor Class

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. Rowe Price Small-Cap Stock Fund — Advisor Class

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. Rowe Price Small-Cap Value Fund — Advisor Class

T. ROWE PRICE SPECTRUM FUND, INC. ("Spectrum Fund s ")

Spectrum Growth Fund

Spectrum Income Fund

Spectrum International Fund

T. ROWE PRICE STATE TAX-FREE INCOME TRUST

Florida Intermediate Tax-Free Fund

Georgia Tax-Free Bond Fund

Maryland Short-Term Tax-Free Bond Fund

Maryland Tax-Free Bond Fund

Maryland Tax-Free Money Fund

New Jersey Tax-Free Bond Fund

New York Tax-Free Bond Fund

New York Tax-Free Money Fund

Virginia Tax-Free Bond Fund

T. ROWE PRICE SUMMIT FUNDS, INC. ("Summit Income Funds")

T. Rowe Price Summit Cash Reserves Fund

T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC. ("Summit Municipal Funds")

T. Rowe Price Summit Municipal Money Market Fund

T. Rowe Price Summit Municipal Intermediate Fund

T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC. ("Tax-Efficient Funds")

T. Rowe Price Tax-Efficient Balanced Fund

T. Rowe Price Tax-Efficient Growth Fund

T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. Rowe Price Tax-Free Income Fund — Advisor Class

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC. ("U.S. Treasury Funds")

U.S. Treasury Intermediate Fund

U.S. Treasury Long-Term Fund

U.S. Treasury Money Fund

T. ROWE PRICE VALUE FUND, INC.

T. Rowe Price Value Fund — Advisor Class

Mailing Address:
T. Rowe Price Investment Services, Inc.
100 East Pratt Street

PAGE 187

Baltimore, Maryland 21202
1-800-638-5660

This Statement of Additional Information is not a prospectus but should be read in conjunction with the appropriate current fund prospectus, which may be obtained from T. Rowe Price Investment Services, Inc. ( "Investment Services" ).

Each fund`s financial statements for its most recent fiscal period and the R eport of I ndependent Registered Public Accounting Firm are included in each fund`s a nnual or semiannual r eport and incorporated by reference into this Statement of Additional Information. The Diversified Mid-Cap Growth Fund , Institutional Core Plus Fund , Capital Appreciation Fund — Advisor Class, Capital Opportunity Fund — Advisor Class, Capital Opportunity Fund — R Class, Real Estate Fund — Advisor Class, and Short-Term Bond Fund — Advisor Class have not been in existence for a long enough time to have complete financial statements.

If you would like a prospectus or an annual or semiannual shareholder report for a fund of which you are not a shareholder, please call 1-800-638-5660 and they will be sent to you at no charge. Please read them carefully.

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TABLE OF CONTENTS

	Page		Page

Capital Stock	19 8	Net Asset Value per Share	19 4
Code of Ethics	19 0	Organization of the Funds	20 2
Custodian	19 0	Other Shareholder Services	9 8
Disclosure of Fund Portfolio Information	19 1	Portfolio Management Practices	16 6
Distributor for the Funds	10 2	Portfolio Transactions	10 4
Dividends and Distributions	19 5	Pricing of Securities	19 2
Federal Registration of Shares	20 5	Principal Holders of Securities	59
Independent Registered Public Accounting Firm	12 4	Ratings of Commercial Paper	20 6
Investment Management Agreements	8 0	Ratings of Corporate and Municipal Debt Securities	20 6
Investment Objectives and Policies	1 29	Ratings of Municipal Notes and Variable Rate Securities	20 8
Investment Program	15 0	Risk Factors	1 29
Investment Restrictions	18 4	Special Considerations	18 4
Legal Counsel	20 6	T. Rowe Price Proxy Voting — P olicies and Procedures	20 3
Management of the Funds	10	Tax Status	19 5

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References to the following are as indicated:

Internal Revenue Code of 1986 ( "Code" )

Investment Company Act of 1940 ( "1940 Act" )

Moody`s Investors Service, Inc. ( "Moody`s" )

Securities Act of 1933 ( "1933 Act" )

Securities and Exchange Commission ( "SEC" )

Securities Exchange Act of 1934 ( "1934 Act" )

Standard & Poor`s Corporation ( "S&P" )

T. Rowe Price Associates, Inc. ( "T. Rowe Price" )

T. Rowe Price International, Inc. ( "T. Rowe Price International" )

Advisor Class

The Advisor Class is a share class of its respective T. Rowe Price fund. The Advisor Class is not a separate mutual fund. The shares are designed to be sold only through brokers, dealers, banks, insurance companies, and other financial intermediaries that provide various distribution , shareholder, and/or administrative services.

R Class

The R Class is a share class of its respective T. Rowe Price fund. The R Class is not a separate mutual fund. The shares are designed to be sold only through various third-party intermediaries that offer employer-sponsored retirement plans, including brokers, dealers, banks, insurance companies, retirement plan recordkeepers, and others.

Government Reserve Investment and Reserve Investment Funds

These funds are not available for direct purchase by members of the public.

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Institutional Funds

These funds are designed exclusively for institutional investors. Institutional investors typically include banks, pension and profit sharing plans, and trust, insurance, and investment companies .

PART I

Below is a table showing the prospectus and shareholder report dates for each fund . The table also lists each fund`s category which should be used to identify groups of funds that are referenced throughout this SAI .

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Fund	Fund Category	Fiscal Year End	Annual Report Date	Semiannual Report Date	Prospectus Date
Balanced	Equity	Dec 31	Dec 31	June 30	May 1
Blue Chip Growth	Equity	Dec 31	Dec 31	June 30	May 1
Blue Chip Growth Fund — Advisor Class	Equity	Dec 31	Dec 31	June 30	May 1
Blue Chip Growth Fund — R Class	Equity	Dec 31	Dec 31	June 30	May 1
California Tax-Free Bond	State Tax-Free Bond	Feb 28	Feb 28	Au g 30	July 1
California Tax-Free Money	State Tax-Free Money	Feb 28	Feb 28	Au g 30	July 1
Capital Appreciation	Equity	Dec 31	Dec 31	June 30	May 1
Capital Appreciation Fund — Advisor Class	Equity	Dec 31	Dec 31	June 30	May 1
Capital Opportunity	Equity	Dec 31	Dec 31	June 30	May 1
Capital Opportunity Fund — Advisor Class	Equity	Dec 31	Dec 31	June 30	May 1
Capital Opportunity Fund — R Class	Equity	Dec 31	Dec 31	June 30	May 1
Corporate Income	Taxable Bond	May 31	May 31	Nov 30	Oct 1
Developing Technologies	Equity	Dec 31	Dec 31	June 30	May 1
Diversified Mid-Cap Growth	Equity	Dec 31	Dec 31	June 30	May 1
Diversified Small-Cap Growth	Equity	Dec 31	Dec 31	June 30	May 1
Dividend Growth	Equity	Dec 31	Dec 31	June 30	May 1
Emerging Europe & Mediterranean	International Equity	Oct 31	Oct 31	Apr 30	March 1
Emerging Markets Bond	International Bond	Dec 31	Dec 31	June 30	May 1
Emerging Markets Stock	International Equity	Oct 31	Oct 31	Ap r 30	March 1
Equity Income	Equity	Dec 31	Dec 31	June 30	May 1
Equity Income Fund — Advisor Class	Equity	Dec 31	Dec 31	June 30	May 1
Equity Income Fund — R Class	Equity	Dec 31	Dec 31	June 30	May 1
Equity Index 500	Index Equity	Dec 31	Dec 31	June 30	May 1
European Stock	International Equity	Oct 31	Oct 31	Ap r 30	March 1
Extended Equity Market Index	Index Equity	Dec 31	Dec 31	June 30	May 1
Financial Services	Equity	Dec 31	Dec 31	June 30	May 1
Florida Intermediate Tax-Free	State Tax-Free Bond	Feb 28	Feb 28	Au g 30	July 1
Georgia Tax-Free Bond	State Tax-Free Bond	Feb 28	Feb 28	Au g 30	July 1
Global Stock	International Equity	Oct 31	Oct 31	Ap r 30	March 1
Global Technology	Equity	Dec 31	Dec 31	June 30	May 1
GNMA	Taxable Bond	May 31	May 31	Nov 30	Oct 1
Government Reserve Investment	Taxable Money	May 31	May 31	Nov 30	Oct 1
Growth & Income	Equity	Dec 31	Dec 31	June 30	May 1
Growth Stock	Equity	Dec 31	Dec 31	June 30	May 1
Growth Stock Fund — Advisor Class	Equity	Dec 31	Dec 31	June 30	May 1
Growth Stock Fund — R Class	Equity	Dec 31	Dec 31	June 30	May 1
Health Sciences	Equity	Dec 31	Dec 31	June 30	May 1
High Yield	Taxable Bond	May 31	May 31	Nov 30	Oct 1
High Yield Fund — Advisor Class	Taxable Bond	May 31	May 31	Nov 30	Oct 1
Inflation Protected Bond	Taxable Bond	May 31	May 31	Nov 30	Oct 1
Institutional Core Plus	Taxable Bond	May 31	May 3 1	Nov 30	Oct 1
Institutional Emerging Markets Equity	International Equity	Oct 31	Oct 31	Ap r 30	March 1
Institutional Foreign Equity	International Equity	Oct 31	Oct 31	Ap r 30	March 1
Institutional High Yield	Taxable Bond	May 31	May 31	Nov 30	Oct 1
Institutional Large-Cap Core Growth	Equity	Dec 31	Dec 31	June 30	May 1
Institutional Large-Cap Growth	Equity	Dec 31	Dec 31	June 30	May 1
Institutional Large-Cap Value	Equity	Dec 31	Dec 31	June 30	May 1
Institutional Mid-Cap Equity Growth	Equity	Dec 31	Dec 31	June 30	May 1
Institutional Small-Cap Stock	Equity	Dec 31	Dec 31	June 30	May 1
International Bond	International Bond	Dec 31	Dec 31	June 30	May 1
International Bond Fund — Advisor Class	International Bond	Dec 31	Dec 31	June 30	May 1
International Discovery	International Equity	Oct 31	Oct 31	Ap r 30	March 1
International Equity Index	International Equity	Oct 31	Oct 31	Ap r 30	March 1
International Growth & Income	International Equity	Oct 31	Oct 31	Ap r 30	March 1
International Growth & Income Fund — Advisor Class	International Equity	Oct 31	Oct 31	Ap r 30	March 1
International Growth & Income Fund — R Class	International Equity	Oct 31	Oct 31	Ap r 30	March 1
International Stock	International Equity	Oct 31	Oct 31	Ap r 30	March 1
International Stock Fund — Advisor Class	International Equity	Oct 31	Oct 31	Ap r 30	March 1
International Stock Fund — R Class	International Equity	Oct 31	Oct 31	Ap r 30	March 1
Japan	International Equity	Oct 31	Oct 31	Ap r 30	March 1
Latin America	International Equity	Oct 31	Oct 31	Ap r 30	March 1
Maryland Short-Term Tax- Free Bond	State Tax-Free Bond	Feb 28	Feb 28	Au g 30	July 1
Maryland Tax-Free Bond	State Tax-Free Bond	Feb 28	Feb 28	Au g 30	July 1
Maryland Tax-Free Money	State Tax-Free Money	Feb 28	Feb 28	Au g 30	July 1
Media & Telecommunications	Equity	Dec 31	Dec 31	June 30	May 1
Mid-Cap Growth	Equity	Dec 31	Dec 31	June 30	May 1
Mid-Cap Growth Fund — Advisor Class	Equity	Dec 31	Dec 31	June 30	May 1
Mid-Cap Growth Fund — R Class	Equity	Dec 31	Dec 31	June 30	May 1
Mid-Cap Value	Equity	Dec 31	Dec 31	June 30	May 1
Mid-Cap Value Fund — Advisor Class	Equity	Dec 31	Dec 31	June 30	May 1
Mid-Cap Value Fund — R Class	Equity	Dec 31	Dec 31	June 30	May 1
New America Growth	Equity	Dec 31	Dec 31	June 30	May 1
New Asia	International Equity	Oct 31	Oct 31	Ap r 30	March 1
New Era	Equity	Dec 31	Dec 31	June 30	May 1
New Horizons	Equity	Dec 31	Dec 31	June 30	May 1
New Income	Taxable Bond	May 31	May 31	Nov 30	Oct 1
New Income Fund — Advisor Class	Taxable Bond	May 31	May 31	Nov 30	Oct 1
New Income Fund — R Class	Taxable Bond	May 31	May 31	Nov 30	Oct 1
New Jersey Tax-Free Bond	State Tax-Free Bond	Feb 28	Feb 28	Au g 30	July 1
New York Tax-Free Bond	State Tax-Free Bond	Feb 28	Feb 28	Au g 30	July 1
New York Tax-Free Money	State Tax-Free Money	Feb 28	Feb 28	Au g 30	July 1
Personal Strategy Balanced	Blended	May 31	May 31	Nov 30	Oct 1
Personal Strategy Growth	Blended	May 31	May 31	Nov 30	Oct 1
Personal Strategy Income	Blended	May 31	May 31	Nov 30	Oct 1
Prime Reserve	Taxable Money	May 31	May 31	Nov 30	Oct 1
Real Estate	Equity	Dec 31	Dec 31	June 30	May 1
Real Estate Fund — Advisor Class	Equity	Dec 31	Dec 31	June 30	May 1
Reserve Investment	Taxable Money	May 31	May 31	Nov 30	Oct 1
Retirement 2005	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2010	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2010 Fund — Advisor Class	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2010 Fund — R Class	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2015	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2020	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2020 Fund — Advisor Class	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2020 Fund — R Class	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2025	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2030	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2030 Fund — Advisor Class	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2030 Fund — R Class	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2035	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2040	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2040 Fund — Advisor Class	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement 2040 Fund — R Class	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement Income	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement Income Fund — Advisor Class	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Retirement Income Fund — R Class	Fund-of-Funds	May 31	May 31	Nov 30	Oct 1
Science & Technology	Equity	Dec 31	Dec 31	June 30	May 1
Science & Technology Fund — Advisor Class	Equity	Dec 31	Dec 31	June 30	May 1
Short-Term Bond	Taxable Bond	May 31	May 31	Nov 30	Oct 1
Short-Term Bond Fund — Advisor Class	Taxable Bond	May 31	May 31	Nov 30	Oct 1
Small-Cap Stock	Equity	Dec 31	Dec 31	June 30	May 1
Small-Cap Stock Fund — Advisor Class	Equity	Dec 31	Dec 31	June 30	May 1
Small-Cap Value	Equity	Dec 31	Dec 31	June 30	May 1
Small-Cap Value Fund — Advisor Class	Equity	Dec 31	Dec 31	June 30	May 1
Spectrum Growth	Fund-of-Funds	Dec 31	Dec 31	June 30	May 1
Spectrum Income	Fund-of-Funds	Dec 31	Dec 31	June 30	May 1
Spectrum International	Fund-of-Funds	Dec 31	Dec 31	June 30	May 1
Summit Cash Reserves	Taxable Money	Oct 31	Oct 31	Ap r 30	March 1
Summit GNMA	Taxable Bond	Oct 31	Oct 31	Ap r 30	March 1
Summit Municipal Income	Tax-Free Bond	Oct 31	Oct 31	Ap r 30	March 1
Summit Municipal Intermediate	Tax-Free Bond	Oct 31	Oct 31	Ap r 30	March 1
Summit Municipal Money Market	Tax-Free Money	Oct 31	Oct 31	Ap r 30	March 1
Tax-Efficient Balanced	Equity	Feb 28	Feb 28	Au g 30	July 1
Tax-Efficient Growth	Equity	Feb 28	Feb 28	Au g 30	July 1
Tax-Efficient Multi-Cap Growth	Equity	Feb 28	Feb 28	Au g 30	July 1
Tax-Exempt Money	Tax-Free Money	Feb 28	Feb 28	Au g 30	July 1
Tax-Free High Yield	Tax-Free Bond	Feb 28	Feb 28	Au g 30	July 1
Tax-Free Income	Tax-Free Bond	Feb 28	Feb 28	Au g 30	July 1
Tax-Free Income Fund — Advisor Class	Tax Free Bond	Feb 28	Feb 28	Au g 30	July 1
Tax-Free Intermediate Bond	Tax-Free Bond	Feb 28	Feb 28	Au g 30	July 1
Tax-Free Short-Intermediate	Tax-Free Bond	Feb 28	Feb 28	Au g 30	July 1
Total Equity Market Index	Index Equity	Dec 31	Dec 31	June 30	May 1
U.S. Bond Index	Index Bond	Oct 31	Oct 31	Ap r 30	March 1
U.S. Treasury Intermediate	Taxable Bond	May 31	May 31	Nov 30	Oct 1
U.S. Treasury Long-Term	Taxable Bond	May 31	May 31	Nov 30	Oct 1
U.S. Treasury Money	Taxable Money	May 31	May 31	Nov 30	Oct 1
Value	Equity	Dec 31	Dec 31	June 30	May 1
Value Fund — Advisor Class	Equity	Dec 31	Dec 31	June 30	May 1
Virginia Tax-Free Bond	State Tax-Free Bond	Feb 28	Feb 28	Au g 30	July 1

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PAGE 193

MANAGEMENT OF the funds

The officers and directors ( a ) of the Price F unds are listed below. Unless otherwise noted, the address of each is 100 Ea st Pratt Street, Baltimore, Maryland 21202. Except as indicated, each has been an employee of T. Rowe Price or T. Rowe Price International for five or more years.

Each fund is governed by a Board of Directors/Trustees ("Board s ") that meets regularly to review a wide variety of matters affecting the funds, including investments, performance, compliance matters, advisory fees and expenses, and other business affairs. The Boards elect the fund s` officers. The Board s also are responsible for performing various duties imposed on them by the 1940 Act , the laws of Maryland or Massachusetts , and other laws . At least 75% of Board members are independent of T. Rowe Price and T. Rowe Price International. The directors who are also employees or officers of T. Rowe Price are referred to as inside or interested directors. Each Board currently has three committees, described in the following paragraphs.

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The Committee of Independent Directors, which consists of all of the independent directors of the funds, is responsible for selecting candidates for election as independent directors to fill vacancies on each fund`s Board. F. Pierce Linaweaver is chairman of the committee. The committee will consider written recommendations from shareholders for possible nominees. Shareholders should submit their recommendations to the secretary of the funds. The committee held four formal meeting s in 200 4 .

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The Joint Audit Committee is comprised of Dona ld W. Dick, Jr., David K. Fagin, and Karen N. Horn , all independent directors . The Audit Committee holds two regular meetings during each fiscal year, at which time it meets with the independent registered public accounting firm of the Price Funds to review: (1) the services provided; (2) the findings of the most recent audit s ; (3) management`s response to the findings of the most recent audit s ; (4) the scope of the audit s to be performed; (5) the accountants` fees; and (6) any accounting , tax, compliance , or other questions relating to particular areas of the Price Funds` operations or the operations of parties dealing with the Price Funds, as circumstances indicate. The Audit Committee met twice in 200 4 .

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The funds` Executive Committee, consisting of the funds` interested director ( s ) , has been authorized by its respective Board to exercise all powers of the Boards to manage the funds in the intervals between meetings of the Boards, except the powers prohibited by statute from being delegated.

(a) The term "director" is used to refer to directors or trustees, as applicable.

Independent Directors ( a)

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Name, Year of Birth, and Number of Portfolios in Fund Complex Overseen by Director	Principal Occupation(s) During Past 5 Years	Other Directorships of Public Companies
Anthony W. Deering 1945 11 2 portfolios	Chairman, Exeter Capital, LLC, private investment firm (2004 to present); Director, Chairman of the Board, and Chief Executive Officer, The Rouse Company, real estate developers (1997 to 2004) ; Director, Mercantile Bank (4/03 to present)	Mercantile Bank
Donald W. Dick, Jr. 1943 11 2 portfolios	Principal, EuroCapital Advisors, LLC, an acquisition and management advisory firm ; Chairman, President, and CEO, The Haven Group, a custom manufacturer of modular homes (1/04 to present)	None
David K. Fagin 1938 11 2 portfolios	Chairman and President, Nye Corporation (6/88 to present); Director, Canyon Resources Corp., Golden Star Resources Ltd. (5/00 to present), and Pacific Rim Mining Corp. (2/02 to present)	Golden Star Resources Ltd., Canyon Resources Corp., and Pacific Rim Mining Corp.
Karen N. Horn 1943 11 2 portfolios	Managing Director and President, Global Private Client Services, Marsh Inc. (1999-2003); Managing Director and Head of International Private Banking, Bankers Trust (1996-1999)	Eli Lilly and Company and Georgia Pacific
F. Pierce Linaweaver 1934 11 2 portfolios	President, F. Pierce Linaweaver & Associates, Inc., consulting environmental and civil engineers	None
John G. Schreiber 1946 11 2 portfolios	Owner/President, Centaur Capital Partners, Inc., a real estate investment company; Partner, Blackstone Real Estate Advisors, L.P.	AMLI Residential Properties Trust

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(a) All information about the directors was current as of December 31, 200 4 , except for the number of portfolios which is current as of the date of this Statement of Additional Information.

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Inside Directors ( a)

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The following persons are considered interested persons of the funds because they also serve as officers of the funds and/or T. Rowe Price and T. Rowe Price International. No more than two inside directors serve as directors of any fund.

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Name, Year of Birth, and Number of Portfolios in Fund Complex Overseen by Director	Principal Occupation(s) During Past 5 Years	Other Directorships of Public Companies
James A.C. Kennedy ; CFA 1953 43 portfolios	Director and Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Director, T. Rowe Price Global Investment Services Limited and T. Rowe Price International, Inc.	None
John H. Laporte ; CFA 1945 15 portfolios	Vice President, T. Rowe Price and T. Rowe Price Group, Inc. President, New Horizons Fund; Vice President, Diversified Small-Cap Growth Fund, Health Sciences Fund, Personal Strategy Funds, and Spectrum Funds	None
Mary J. Miller ; CFA 1955 3 8 portfolios	Director and Vice President, T. Rowe Price; Vice President, T. Rowe Price Group, Inc. President, California Tax-Free Funds, State Tax- Free Funds, Summit Municipal Funds, Tax-Free Income Fund, and U.S. Treasury Funds; Vice President, GNMA Fund, Inflation Protected Bond Fund, Prime Reserve Fund, Reserve Investment Funds, Summit Funds, Tax-Efficient Funds, Tax-Exempt Money Fund, Tax-Free High Yield Fund, and Tax-Free Short- Intermediate Fund	None
James S. Riepe 1943 11 2 portfolios	Director and Vice President, T. Rowe Price; Vice Chairman of the Board, Director, and Vice President, T. Rowe Price Group, Inc.; Chairman of the Board and Director, T. Rowe Price Global Asset Management Limited, T. Rowe Price Global Investment Services Limited, T. Rowe Price Investment Services, Inc., T. Rowe Price Retirement Plan Services, Inc., and T. Rowe Price Services, Inc.; Chairman of the Board, Director, President, and Trust Officer, T. Rowe Price Trust Company; Director, T. Rowe Price International, Inc. Chairman of the Board, all funds	The Nasdaq Stock Market, Inc.

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PAGE 195

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(a) All information about the directors was current as of December 31, 200 4 , except for the number of portfolios which is current as of the date of this Statement of Additional Information.

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Retirement and Spectrum Funds (collectively and individually, "Funds-of-Funds")

The management of the business and affairs of the Funds-of-Funds is the responsibility of the Board of Directors ("Board") . In exercising their responsibilities, the Board, among other things, will refer to the Special Servicing Agreement and policies and guidelines included in an Application for an Exemptive Order (and accompanying Notice and Order) issued by the SEC in connection with the Spectrum Funds (which also applies to Retirement Funds). A majority of directors of the Funds-of-Funds are independent. However, the directors and officers of the Funds-of-Funds and certain directors and officers of T. Rowe Price and T. Rowe Price International also serve in similar positions with most of the various Price Funds in which the Retirement and Spectrum Funds invest (collectively "underlying Price funds" ). Thus, if the interests of the Funds-of-Funds and the underlying Price funds were ever to become divergent, it is possible that a conflict of interest could arise and affect how this latter group of persons fulfill their fiduciary duties to the Funds-of-Funds and the underlying Price funds. The directors of Funds-of-Funds believe they have structured the Funds-of-Funds to avoid these concerns. However, conceivably, a situation could occur where proper action for the Funds-of-Funds could be adverse to the interests of an underlying Price fund, or the reverse could occur. If such a possibility arises, the directors and officers of the affected funds, T. Rowe Price, and T. Rowe Price International will carefully analyze the situation and take all steps they believe reasonable to minimize and, where possible, eliminate the potential conflict.

Term of Office and Length of Time Served

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The directors serve until retirement, resignation, or election of a successor. The following table shows the year from which each director has served on each fund`s Board (or that of the corporation or trust of which the fund is a part) .

Fund/ Corporation/Trust	Independent Directors
	Deering	Dick	Fagin	Horn	Linaweaver	Schreiber
Balanced	2001	1991	1991	2003	2001	2001
Blue Chip Growth	2001	1993	1993	2003	2001	2001
California Tax-Free Income Trust	1986	2001	2001	2003	1986	1992
Capital Appreciation	2001	1986	1988	2003	2001	2001
Capital Opportunity	2001	1994	1994	2003	2001	2001
Corporate Income	1995	2001	2001	2003	1995	1995
Developing Technologies	2001	2000	2000	2003	2001	2001
Diversified Mid-Cap Growth	2003	2003	2003	2003	2003	2003
Diversified Small-Cap Growth	2001	1997	1997	2003	2001	2001
Dividend Growth	2001	1992	1992	2003	2001	2001
Equity Income	2001	1994	1988	2003	2001	2001
Equity Series	2001	1994	1994	2003	2001	2001
Financial Services	2001	1996	1996	2003	2001	2001
Fixed Income Series	1994	2001	2001	2003	1994	1994
Global Technology	2001	2000	2000	2003	2001	2001
GNMA	1985	2001	2001	2003	1985	1992
Growth & Income	2001	1982	1994	2003	2001	2001
Growth Stock	2001	1980	1994	2003	2001	2001
Health Sciences	2001	1995	1995	2003	2001	2001
High Yield	1984	2001	2001	2003	1984	1992
Index Trust	2001	1994	1994	2003	2001	2001
Inflation Protected Bond	2002	2002	2002	2003	2002	2002
Institutional Equity	2001	1996	1996	2003	2001	2001
Institutional Income	2002	2002	2002	2003	2002	2002
Institutional International	1991	1989	2001	2003	2001	2001
International	1991	1988	2001	2003	2001	2001
International Index	2000	2000	2001	2003	2001	2001
International Series	1994	1994	2001	2003	2001	2001
Media & Telecommunications	2001	1997	1997	2003	2001	2001
Mid-Cap Growth	2001	1992	1992	2003	2001	2001
Mid-Cap Value	2001	1996	1996	2003	2001	2001
New America Growth	2001	1985	1994	2003	2001	2001
New Era	2001	1994	1988	2003	2001	2001
New Horizons	2001	1994	1988	2003	2001	2001
New Income	1980	2001	2001	2003	1983	1992
Personal Strategy	2001	1994	1994	2003	2001	2001
Prime Reserve	1979	2001	2001	2003	1980	1992
Real Estate	2001	1997	1997	2003	2001	2001
Reserve Investment	1997	2001	2001	2003	1997	1997
Retirement	2002	2002	2002	2003	2002	2002
Science & Technology	2001	1994	1994	2003	2001	2001
Short-Term Bond	1983	2001	2001	2003	1983	1992
Small-Cap Stock	2001	1992	1992	2003	2001	2001
Small-Cap Value	2001	1994	1994	2003	2001	2001
Spectrum	2001	1999	1999	2003	2001	2001
State Tax-Free Income Trust	1986	2001	2001	2003	1986	1992
Summit	1993	2001	2001	2003	1993	1993
Summit Municipal	1993	2001	2001	2003	1993	1993
Tax-Efficient	2001	1997	1997	2003	2001	2001
Tax-Exempt Money	1983	2001	2001	2003	1983	1992
Tax-Free High Yield	1984	2001	2001	2003	1984	1992
Tax-Free Income	1983	2001	2001	2003	1979	1992
Tax-Free Intermediate	1992	2001	2001	2003	1992	1992
Tax-Free Short-Intermediate	1983	2001	2001	2003	1983	1992
U.S. Bond Index	2000	2001	2001	2003	2000	2000
U.S. Treasury	1989	2001	2001	2003	1989	1992
Value	2001	1994	1994	2003	2001	2001

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PAGE 197

Fund /Corporation/Trust	Inside Directors
	Kennedy	Laporte	Miller	Riepe
Balanced	1997	—	—	1991
Blue Chip Growth	1997	—	—	1993
California Tax-Free Income Trust	—	—	2004	1986
Capital Appreciation	1997	—	—	1986
Capital Opportunity	—	1994	—	1994
Corporate Income	—	—	2004	1995
Developing Technologies	2001	—	—	2000
Diversified Mid-Cap Growth	2003	—	—	2003
Diversified Small-Cap Growth	—	1997	—	1997
Dividend Growth	1997	—	—	1992
Equity Income	1997	—	—	1985
Equity Series	—	1994	—	1994
Financial Services	1997	—	—	1996
Fixed Income Series	—	—	2004	1994
Global Technology	2001	—	—	2000
GNMA	—	—	2004	1985
Growth & Income	1997	—	—	1982
Growth Stock	1997	—	—	1982
Health Sciences	—	1995	—	1995
High Yield	—	—	2004	1984
Index Trust	1997	—	—	1990
Inflation Protected Bond	—	—	2004	2002
Institutional Equity	1997	—	—	1996
Institutional Income	—	—	2004	2002
Institutional International	—	—	—	2002
International	—	—	—	2002
International Index	—	—	—	2002
International Series	—	—	—	2002
Media & Telecommunications	2001	—	—	1993
Mid-Cap Growth	1992	—	—	1992
Mid-Cap Value	1997	—	—	1996
New America Growth	—	1985	—	1985
New Era	1997	—	—	1994
New Horizons	—	1988	—	1983
New Income	—	—	2004	1983
Personal Strategy	1997	—	—	1994
Prime Reserve	—	—	2004	1994
Real Estate	1997	—	—	1997
Reserve Investment	—	—	2004	1997
Retirement	2002	—	—	2002
Science & Technology	—	1988	—	1987
Short-Term Bond	—	—	2004	1983
Small-Cap Stock	—	1994	—	1992
Small-Cap Value	—	1994	—	1988
Spectrum	2001	—	—	1990
State Tax-Free Income Trust	—	—	2004	1986
Summit	—	—	2004	1993
Summit Municipal	—	—	2004	1993
Tax-Efficient	1997	—	—	1997
Tax-Exempt Money	—	—	2004	1983
Tax-Free High Yield	—	—	2004	1984
Tax-Free Income	—	—	2004	1983
Tax-Free Intermediate	—	—	2004	1992
Tax-Free Short-Intermediate	—	—	2004	1983
U.S. Bond Index	—	—	2004	2000
U.S. Treasury	—	—	2004	1989
Value	1997	—	—	1994

Officers

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Fund	Name	Position H eld W ith Fund
All funds	Stephen V. Booth Roger L. Fiery, III Gregory S. Golczewski Henry H. Hopkins Julie L. Waples Joseph A. Carrier Patricia B. Lippert John R. Gilner	Vice President Vice President Vice President Vice President Vice President Treasurer Secretary Chief Compliance Officer

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Fund	Name	Position H eld W ith Fund
Balanced	Richard T. Whitney Stephen W. Boesel Wendy R. Diffenbaugh Raymond A. Mills Edmund M. Notzon, III Mark J. Vaselkiv (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President
Blue Chip Growth	Larry J. Puglia Jeffrey W . Arricale P. Robert Bartolo D. Kyle Cerminara Donald J. Easley Henry M. Ellenbogen Robert N. Gensler Thomas J. Huber Kris H. Jenner Timothy E. Parker Karen M. Regan Jeffrey Rottinghaus Robert W. Sharps Robert W. Smith (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
California Tax-Free Income Trust California Tax-Free Bond California Tax-Free Money	Mary J. Miller Joseph K. Lynagh Konstantine B. Mallas Steven G. Brooks G. Richard Dent Alan D. Levenson James M. McDonald Edward A. Wiese Maria H. Condez T. Dylan Jones Timothy G. Taylor (See preceding table for remaining officers)	President Executive Vice President Executive Vice President Vice President Vice President Vice President Vice President Vice President Assistant Vice President Assistant Vice President Assistant Vice President
Capital Appreciation	Stephen W. Boesel Andrew M. Brooks David R. Giroux Lewis M. Johnson David M. Lee John D. Linehan Brian C. Rogers David J. Wallack (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Capital Opportunity	William J. Stromberg Jeffrey W . Arricale David R. Giroux Jill L. Hauser Michael W. Holton Philip A. Nestico Jeffrey Rottinghaus Richard T. Whitney (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Corporate Income	David A. Tiberii Mark J. Vaselkiv Steven G. Brooks Jennifer A. Callaghan Patrick S. Cassidy Mark S. Finn Vernon A. Reid, Jr. Thea N. Williams (See preceding table for remaining officers)	President Executive Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Developing Technologies	Michael F. Sola Kennard W. Allen Christopher W. Carlson David J. Eiswert Robert N. Gensler Jill L. Hauser Jeffrey Rottinghaus Wenhua Zhang (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Diversified Mid-Cap Growth	Donald J. Peters Donald J. Easley Sudhir Nanda Philip A. Nestico John F. Wakeman Mark R. Weigman (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President
Diversified Small-Cap Growth	Paul W. Wojcik Richard T . Whitney E. Frederick Bair John H. Laporte Sudhir Nanda Philip A . Nestico Donald J. Peters (See preceding table for remaining officers)	President Executive Vice President Vice President Vice President Vice President Vice President Vice President
Dividend Growth	Thomas J. Huber David R. Giroux Michael W. Holton David M. Lee Timothy E. Parker Donald J. Peters Karen M. Regan Jeffrey Rottinghaus William J. Stromberg (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Equity Income	Brian C. Rogers Jeffrey W . Arricale Stephen W. Boesel Andrew M. Brooks Anna M. Dopkin Michael W. Holton John D. Linehan Heather K. McPherson William J. Stromberg (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Financial Services	Michael W. Holton Jeffrey W . Arricale R. Scott Berg D. Kyle Cerminara Anna M. Dopkin Philip A. Nestico Larry J. Puglia Robert W. Sharps William J. Stromberg J. David Wagner (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Global Technology	Robert N. Gensler Kennard W. Allen R. Scott Berg Donald J. Easley David J. Eiswert Anh Lu D. James Prey, III Jeffrey Rottinghaus Michael F. Sola Wenhua Zhang (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
GNMA	Connice A. Bavely Alan D. Levenson Mary J. Miller Edmund M. Notzon, III John D. Wells Keir R. Joyce (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Assistant Vice President
Growth & Income	Anna M. Dopkin Jeffrey W. Arricale Laurie M. Bertner David R. Giroux Michael W. Holton David M. Lee Sudhir Nanda Karen M. Regan Jeffrey Rottinghaus Robert W. Sharps R. Candler Young (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Growth Stock	Robert W. Smith Robert W. Sharps D. Kyle Cerminara Anna M. Dopkin Henry M. Ellenbogen Joseph B. Fath Robert N. Gensler Kris H. Jenner D. James Prey, III Larry J. Puglia Jeffrey Rottinghaus Michael F. Sola (See preceding table for remaining officers)	President Executive Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Health Sciences	Kris H. Jenner Laurie M. Bertner Susan J. Klein John H. Laporte Jay S. Markowitz Charles G. Pepin John Carl A. Sherman (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President
High Yield	Mark J. Vaselkiv Andrew M. Brooks Mark S. Finn Robert N. Gensler Paul A. Karpers Kevin P. Loome Michael J. McGonigle Walter P. Stuart, III Thomas E. Tewksbury Thea N. Williams (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Index Trust Equity Index 500 Extended Equity Market Index Total Equity Market Index	Richard T. Whitney E. Frederick Bair Jeanne M. Aldave Wendy R. Diffenbaugh Ann M. Holcomb Sudhir Nanda Ken D. Uematsu (See preceding table for remaining officers)	President Executive Vice President Vice President Vice President Vice President Vice President Assistant Vice President
Inflation Protected Bond	Daniel O. Shackelford Connice A. Bavely Brian J. Brennan Alan D. Levenson Cheryl A. Mickel Mary J. Miller Edmund M. Notzon, III Vernon A. Reid, Jr. Jennifer A. Callaghan Michael J. Grogan (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Assistant Vice President Assistant Vice President
Institutional Equity Funds Institutional Large-Cap Core Growth Institutional Large-Cap Growth Institutional Large-Cap Value Institutional Mid-Cap Equity Growth Institutional Small-Cap Stock	Brian C. Rogers Brian W.H. Berghuis Gregory A. McCrickard Larry J. Puglia Robert W. Sharps Robert W. Smith Preston G. Athey Stephen W. Boesel Anna M. Dopkin Thomas J. Huber John D. Linehan Joseph M. Milano Charles G. Pepin John F. Wakeman David J. Wallack Richard T. Whitney (See preceding table for remaining officers)	President Executive Vice President Executive Vice President Executive Vice President Executive Vice President Executive Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Institutional Income Funds Institutional Core Plus Institutional High Yield	Mark J. Vaselkiv Brian J. Brennan Connice A. Bavely Andrew M. Brooks Michael J. Conelius Robert N. Gensler Paul A. Karpers Ian D. Kelson Kevin P. Loome Michael J. McGonigle Daniel O. Shackelford Walter P. Stuart, III Thomas E. Tewksbury David A. Tiberii Thea N. Williams (See preceding table for remaining officers)	President Executive Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Institutional International Funds Institutional Emerging Markets Equity Institutional Foreign Equity	David J.L. Warren Christopher D. Alderson Mark C.J. Bickford-Smith R. Todd Ruppert James B.M. Seddon William F. Wendler, II Edward A. Wiese (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President
International Funds Emerging Europe & Mediterranean Emerging Markets Bond Emerging Markets Stock European Stock Global Stock International Bond International Discovery International Growth & Income International Stock Japan Latin America New Asia	David J.L. Warren Christopher D. Alderson Mark C.J. Bickford-Smith Brian J. Brennan Michael J. Conelius Frances Dydasco Mark J.T. Edwards M. Campbell Gunn Ian D. Kelson Raymond A. Mills Philip A. Nestico Gonzalo P x87 ngaro Robert A. Revel-Chion Christopher J. Rothery James B.M. Seddon Robert W. Smith Dean Tenerelli Justin Thomson William F. Wendler, II Richard T. Whitney Edward A. Wiese Ann B. Cranmer (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Assistant Vice President
International Equity Index	Richard T. Whitney Jeanne M. Aldave E. Frederick Bair Stephanie C. Clancy Neil Smith Wendy R. Diffenbaugh Ken D. Uematsu (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Assistant Vice President Assistant Vice President
Media & Telecommunications	Robert N. Gensler P. Robert Bartolo David J. Eiswert Henry M. Ellenbogen Kara Cheseby Landers D. James Prey, III Robert W. Smith Dean Tenerelli Dale E. West (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Mid-Cap Growth	Brian W.H. Berghuis John F. Wakeman P. Robert Bartolo Brace C. Brooks Anna M. Dopkin Henry M. Ellenbogen Kris H. Jenner Robert J. Marcotte Joseph M. Milano Jeffrey Rottinghaus R. Candler Young (See preceding table for remaining officers)	President Executive Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Mid-Cap Value	David J. Wallack P. Robert Bartolo Christopher W. Carlson Henry M. Ellenbogen Kara Cheseby Landers Gregory A. McCrickard Heather K. McPherson Joseph M. Milano Charles G. Pepin J. David Wagner (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
New America Growth	Joseph M. Milano Jeffrey W . Arricale R. Scott Berg Brain W.H. Berghuis Robert J. Marcotte Charles G. Pepin Jeffrey Rottinghaus Robert W. Sharps Robert W. Smith R. Candler Young (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
New Era	Charles M. Ober Lewis M. Johnson Susan J. Klein David M. Lee John D. Linehan Heather K. McPherson Timothy E. Parker David J. Wallack (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
New Horizons	John H. Laporte Kennard W. Allen Francisco Alonso P. Robert Bartolo Brian W.H. Berghuis Christopher A. Berrier Brace C. Brooks Christopher W. Carlson Hugh M. Evans, III Joseph B. Fath Kris H. Jenner Jay S. Markowitz Timothy E. Parker Charles G. Pepin Jeffrey Rottinghaus Michael F. Sola John F. Wakeman R. Candler Young Wenhua Zhang Francies W. Hawks (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Assistant Vice President
New Income	Daniel O. Shackelford Connice A. Bavely Brian J. Brennan Patrick S. Cassidy Alan D. Levenson Edmund M. Notzon, III Vernon A. Reid, Jr. David A. Tiberii Jennifer A. Callaghan Michael J. Grogan (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Assistant Vice President Assistant Vice President
Personal Strategy Funds Personal Strategy Balanced Personal Strategy Growth Personal Strategy Income	Edmund M. Notzon, III Stephen W. Boesel Larry J. Puglia John H. Laporte Raymond A. Mills Brian C. Rogers Mark J. Vaselkiv Richard T. Whitney Charles M. Shriver (See preceding table for remaining officers)	President Executive Vice President Executive Vice President Vice President Vice President Vice President Vice President Vice President Assistant Vice President
Prime Reserve	James M. McDonald Steven G. Brooks Brian E. Burns Patrick S. Cassidy Mark S. Finn Alisa Fiumara Alan D. Levenson Joseph K. Lynagh Mary J. Miller Susan G. Troll Edward A. Wiese Terri L. Hett (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Assistant Vice President
Real Estate	David M. Lee Stephen W. Boesel Anna M. Dopkin Joseph B. Fath Thomas J. Huber Philip A. Nestico Charles M. Ober Theodore E. Robson (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Reserve Investment Funds Government Reserve Investment Reserve Investment	James M. McDonald Steven G. Brooks Brian E. Burns Patrick S. Cassidy Alan D. Levenson Joseph K. Lynagh Mary J. Miller Edward A. Wiese Terri L. Hett (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Assistant Vice President
Retirement Funds Retirement 2005 Retirement 2010 Retirement 2015 Retirement 2020 Retirement 2025 Retirement 2030 Retirement 2035 Retirement 2040 Retirement Income	Edmund M. Notzon, III Stephen W. Boesel Brian W.H. Berghuis Jerome A. Clark Gregory A. McCrickard Larry J. Puglia Brian C. Rogers Mark J. Vaselkiv David J.L. Warren Richard T. Whitney Edward A. Wiese (See preceding table for remaining officers)	President Executive Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Science & Technology	Michael F. Sola Kennard W. Allen Donald J. Easley David J. Eiswert Robert N. Gensler Jill L. Hauser Anh Lu D. James Prey, III Jeffrey Rottinghaus (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Short-Term Bond	Edward A. Wiese Connice A. Bavely Steven G. Brooks Jennifer A. Callaghan Patrick S. Cassidy Charles B. Hill Cheryl A. Mickel Vernon A. Reid, Jr. (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Small-Cap Stock	Gregory A. McCrickard Francisco Alonso Preston G. Athey Brace C. Brooks Hugh M. Evans, III Kris H. Jenner Robert J. Marcotte Jay S. Markowitz Joseph M. Milano Curt J. Organt Charles G. Pepin Michael F. Sola J. David Wagner Wenhua Zhang (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Small-Cap Value	Preston G. Athey Hugh M. Evans, III Susan J. Klein Gregory A. McCrickard Curt J. Organt J. David Wagner David J. Wallack Francies W. Hawks (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Assistant Vice President
Spectrum Funds Spectrum Growth Spectrum Income Spectrum International	Edmund M. Notzon, III Stephen W. Boesel John H. Laporte Brian C. Rogers David J.L. Warren (See preceding table for remaining officers)	President Executive Vice President Vice President Vice President Vice President
State Tax-Free Income Trust Florida Intermediate Tax-Free Georgia Tax-Free Bond Maryland Short-Term Tax-Free Bond Maryland Tax-Free Bond Maryland Tax-Free Money New Jersey Tax-Free Bond New York Tax-Free Bond New York Tax-Free Money Virginia Tax-Free Bond	Mary J. Miller Charles B. Hill Joseph K. Lynagh Konstantine B. Mallas Hugh D. McGuirk Linda A. Brisson Steven G. Brooks Jonathan M. Chirunga G. Richard Dent Marcy M. Lash Alan D. Levenson James M. McDonald Edward A. Wiese Maria H. Condez T. Dylan Jones Philip J. Kligman Timothy G. Taylor (See preceding table for remaining officers)	President Executive Vice President Executive Vice President Executive Vice President Executive Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Assistant Vice President Assistant Vice President Assistant Vice President Assistant Vice President
Summit Funds Summit Cash Reserves Summit GNMA	Edward A. Wiese Connice A. Bavely James M. McDonald Steven G. Brooks Brian E. Burns Patrick S. Cassidy Mark S. Finn Alisa Fiumara Alan D. Levenson Joseph K. Lynagh Cheryl A. Mickel Mary J. Miller Susan G. Troll Mark J. Vaselkiv John D. Wells Keir R. Joyce (See preceding table for remaining officers)	President Executive Vice President Executive Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Assistant Vice President
Summit Municipal Funds Summit Municipal Money Market Summit Municipal Intermediate Summit Municipal Income	Mary J. Miller Charles B. Hill Joseph K. Lynagh Konstantine B. Mallas Steven G. Brooks G. Richard Dent Alan D. Levenson James M. McDonald Hugh D. McGuirk James M. Murphy Stephen P. Richter Edward A. Wiese Maria H. Condez T. Dylan Jones Philip J. Kligman Timothy G. Taylor (See preceding table for remaining officers)	President Executive Vice President Executive Vice President Executive Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Assistant Vice President Assistant Vice President Assistant Vice President Assistant Vice President
Tax-Efficient Funds Tax-Efficient Balanced Tax-Efficient Growth Tax-Efficient Multi-Cap Growth	Donald J. Peters Hugh D. McGuirk Donald J. Easley Mary J. Miller William J. Stromberg Mark R. Weigman (See preceding table for remaining officers)	President Executive Vice President Vice President Vice President Vice President Vice President
Tax-Exempt Money	Joseph K. Lynagh Steven G. Brooks G. Richard Dent Marcy M. Lash Alan D. Levenson James M. McDonald Mary J. Miller Edward A. Wiese Maria H. Condez T. Dylan Jones (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Assistant Vice President Assistant Vice President
Tax-Free High Yield	James M. Murphy G. Richard Dent Charles B. Hill Marcy M. Lash Konstantine B. Mallas Hugh D. McGuirk Mary J. Miller Stephen P. Richter (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Tax-Free Income	Mary J. Miller Jonathan M. Chirunga G. Richard Dent Charles B. Hill Marcy M. Lash Konstantine B. Mallas Hugh D. McGuirk James M. Murphy Stephen P. Richter (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Tax-Free Intermediate Bond	Charles B. Hill Konstantine B. Mallas Hugh D. McGuirk Stephen P. Richter Edward A. Wiese Philip J. Kligman Timothy G. Taylor (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Assistant Vice President Assistant Vice President
Tax-Free Short-Intermediate	Charles B. Hill Marcy M. Lash Konstantine B. Mallas Hugh D. McGuirk Mary J. Miller Edward A. Wiese Philip J. Kligman Timothy G. Taylor (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Assistant Vice President Assistant Vice President
U.S. Bond Index	Edmund M. Notzon, III Charles M. Shriver (See preceding table for remaining officers)	President Vice President
U.S. Treasury Funds U.S. Treasury Intermediate U.S. Treasury Long-Term U.S. Treasury Money	Mary J. Miller Edward A. Wiese Brian J. Brennan Steven G. Brooks Brian E. Burns Jerome A. Clark Charles B. Hill Alan D. Levenson Joseph K. Lynagh James M. McDonald Cheryl A. Mickel Vernon A. Reid, Jr. Daniel O. Shackelford (See preceding table for remaining officers)	President Executive Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Value	John D. Linehan Jeffrey W . Arricale Stephen W. Boesel Andrew M . Brooks David R. Giroux Michael W. Holton Kara Cheseby Landers Heather K. McPherson Brian C. Rogers (See preceding table for remaining officers)	President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President

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Officers

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Name, Year of Birth, and Principal Occupation(s)	Position(s) Held With Fund(s)
Jeanne M. Aldave, 1971 Assistant Vice President, T. Rowe Price	Vice President, Index Trust and International Index Fund
Christopher D. Alderson, 1962 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc.	Vice President, Institutional International Funds and International Funds
Kennard W. Allen, 1977 Vice President, T. Rowe Price; formerly Equity Research Intern, Tonge Investment Advisors (to 2000); student, Colby College (to 2000)	Vice President, Developing Technologies Fund, Global Technology Fund, New Horizons Fund, and Science & Technology Fund
Francisco Alonso, 1978 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, New Horizons Fund and Small- Cap Stock Fund
Jeffrey W . Arricale, 1971 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; formerly student, The Wharton School, University of Pennsylvania (to 2001); Manager, Assurance, KPMG LLP (to 1999); CPA	Vice President, Blue Chip Growth Fund, Capital Opportunity Fund, Equity Income Fund, Financial Services Fund, Growth & Income Fund, New America Growth Fund, and Value Fund
Preston G. Athey, 1949 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company ; CFA, CIC	President, Small-Cap Value Fund; Vice President, Institutional Equity Funds and Small-Cap Stock Fund
E. Frederick Bair, 1969 Vice President, T. Rowe Price and T. Rowe Price Trust Company; CFA, CPA	Executive Vice President, Index Trust; Vice President, Diversified Small-Cap Growth Fund and International Index Fund
P. Robert Bartolo , 1972 Vice President, T. Rowe Price; formerly intern, T. Rowe Price (to 2001); CPA	Vice President, Blue Chip Growth Fund, Media & Telecommunications Fund, Mid-Cap Growth Fund, Mid-Cap Value Fund, and New Horizons Fund
Connice A. Bavely, 1951 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	President, GNMA Fund; Executive Vice President, Summit Funds; Vice President, Inflation Protected Bond Fund, Institutional Income Funds, New Income Fund, and Short- Term Bond Fund
R. Scott Berg , 1972 Vice President, T. Rowe Price; formerly student, Stanford Graduate School of Business (to 2002); intern, T. Rowe Price (to 2001); Financial Analysis and Planning Manager, Mead Consumer & Office Products (to 2000)	Vice President, Financial Services Fund, Global Technology Fund, and New America Growth Fund
Brian W.H. Berghuis, 1958 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	President, Mid-Cap Growth Fund; Executive Vice President, Institutional Equity Funds; Vice President, New America Growth Fund, New Horizons Fund, and Retirement Funds
Christopher A. Berrier , 1977 Vice President, T. Rowe Price	Vice President, New Horizons Fund
Laurie M. Bertner, 1977 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, Growth & Income Fund and Health Sciences Fund
Mark C.J. Bickford-Smith, 1962 Vice President, T. Rowe Price Group, Inc. and T. Rowe Price International, Inc.	Vice President, Institutional International Funds and International Funds
Stephen W. Boesel, 1944 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company	President, Capital Appreciation Fund; Executive Vice President, Personal Strategy Funds, Retirement Funds, and Spectrum Funds; Vice President, Balanced Fund, Equity Income Fund, Institutional Equity Funds, Real Estate Fund, and Value Fund
Stephen V. Booth, 1961 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company; CPA	Vice President, all funds
Brian J. Brennan, 1964 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company; CFA	Executive Vice President, Institutional Income Funds; Vice President, Inflation Protected Bond Fund, International Funds, New Income Fund, and U.S. Treasury Funds
Linda A. Brisson, 1959 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, State Tax-Free Funds
Andrew M. Brooks, 1956 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, Capital Appreciation Fund, Equity Income Fund, High Yield Fund, Institutional Income Funds, and Value Fund
Brace C. Brooks, 1967 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	Vice President, Mid-Cap Growth Fund, New Horizons Fund, and Small-Cap Stock Fund
Steven G. Brooks, 1954 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	Vice President, California Tax-Free Funds, Corporate Income Fund, Prime Reserve Fund, Reserve Investment Funds, Short-Term Bond Fund, State Tax-Free Funds, Summit Funds, Summit Municipal Funds, Tax-Exempt Money Fund, and U.S. Treasury Funds
Brian E. Burns, 1960 Assistant Vice President, T. Rowe Price	Vice President, Prime Reserve Fund, Reserve Investment Funds, Summit Funds, and U.S. Treasury Funds
Jennifer A. Callaghan, 1969 Assistant Vice President, T. Rowe Price	Vice President, Corporate Income Fund and Short-Term Bond Fund; Assistant Vice President, Inflation Protected Bond Fund and New Income Fund
Christopher W. Carlson, 1967 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, Developing Technologies Fund, Mid-Cap Value Fund, and New Horizons Fund
Joseph A. Carrier, 1960 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price Investment Services, Inc., and T. Rowe Price Trust Company	Treasurer, all funds
Patrick S. Cassidy, 1964 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	Vice President, Corporate Income Fund, New Income Fund, Prime Reserve Fund, Reserve Investment Funds, Short-Term Bond Fund, and Summit Funds
D. Kyle Cerminara , 1977 Vice President, T. Rowe Price ; CFA	Vice President, Blue Chip Growth Fund, Financial Services Fund, and Growth Stock Fund
Jonathan M. Chirunga, 1966 Vice President, T. Rowe Price; formerly Municipal Credit Analyst /Associate Director, Standard & Poor`s Rating Services (to 2001)	Vice President, State Tax-Free Funds and Tax- Free Income Fund
Stephanie C. Clancy, 1964 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, International Index Fund
Jerome A. Clark, 1961 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price Investment Services, Inc., and T. Rowe Price Trust Company; CFA	Vice President, Retirement Funds and U.S. Treasury Funds
Maria H. Condez, 1962 Assistant Vice President, T. Rowe Price	Assistant Vice President, California Tax-Free Funds, State Tax-Free Funds, Summit Municipal Funds, and Tax-Exempt Money Fund
Michael J. Conelius, 1964 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc.; CFA	Vice President, Institutional Income Funds and International Funds
Ann B. Cranmer, 1947 Vice President, T. Rowe Price Group, Inc. and T. Rowe Price International, Inc.; Vice President and Secretary, T. Rowe Price Global Asset Management Limited and T. Rowe Price Global Investment Services Limited; FCIS	Assistant Vice President, International Funds
G. Richard Dent, 1960 Vice President, T. Rowe Price and T. Rowe Price Group, Inc. ; formerly Deputy General Counsel, ACA Financial Guaranty Corporation (to 2001)	Vice President, California Tax-Free Funds, State Tax-Free Funds, Summit Municipal Funds, Tax- Exempt Money Fund, Tax-Free High Yield Fund, and Tax-Free Income Fund
Wendy R. Diffenbaugh, 1953 Vice President, T. Rowe Price	Vice President, Balanced Fund and Index Trust; Assistant Vice President, International Index Fund
Anna M. Dopkin, 1967 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	President, Growth & Income Fund; Vice President, Equity Income Fund, Financial Services Fund, Growth Stock Fund, Institutional Equity Funds, Mid-Cap Growth Fund, and Real Estate Fund
Frances Dydasco, 1966 Vice President, T. Rowe Price Group, Inc. and T. Rowe Price International, Inc.	Vice President, International Funds
Donald J. Easley, 1971 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	Vice President, Blue Chip Growth Fund, Diversified Mid-Cap Growth Fund, Global Technology Fund, Science & Technology Fund, and Tax-Efficient Funds
Mark J.T. Edwards, 1957 Vice President, T. Rowe Price Group, Inc. and T. Rowe Price International, Inc.	Vice President, International Funds
David J. Eiswert, 1972 Employee, T. Rowe Price; formerly Analyst, Mellon Growth Advisors and Fidelity Management and Research (to 2003); CFA	Vice President, Developing Technologies Fund, Global Technology Fund, Media & Telecommunications Fund, and Science & Technology Fund
Henry M. Ellenbogen, 1971 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; formerly Executive Vice President, Business Development, HelloAsia (to 2001); Chief of Staff, U.S. Representative Peter Deutsch (to 1999)	Vice President, Blue Chip Growth Fund, Growth Stock Fund, Media & Telecommunications Fund, Mid-Cap Growth Fund, and Mid-Cap Value Fund
Hugh M. Evans III, 1966 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	Vice President, New Horizons Fund, Small-Cap Stock Fund, and Small-Cap Value Fund
Joseph B. Fath, 1971 Vice President, T. Rowe Price; formerly intern, T. Rowe Price (to 2001); Chief Financial Officer and Co-founder, Broadform, Inc. (to 2000); student, the Wharton School, University of Pennsylvania (to 1999); CPA	Vice President, Growth Stock Fund, New Horizons Fund, and Real Estate Fund
Roger L. Fiery III, 1959 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price International, Inc., and T. Rowe Price Trust Company; CPA	Vice President, all funds
Mark S. Finn, 1963 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CPA, CFA	Vice President, Corporate Income Fund, High Yield Fund, Prime Reserve Fund, and Summit Funds
Alisa Fiumara, 1974 Assistant Vice President, T. Rowe Price ; CFA	Vice President, Prime Reserve Fund and Summit Funds
Robert N. Gensler, 1957 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	President, Global Technology Fund and Media & Telecommunications Fund; Vice President, Blue Chip Growth Fund, Developing Technologies Fund, Growth Stock Fund, High Yield Fund, Institutional Income Funds, and Science & Technology Fund
John R. Gilner, 1961 Chief Compliance Officer and Vice President, T. Rowe Price; Vice President, T. Rowe Price Investment Services, Inc. and T. Rowe Price Group, Inc.	Chief Compliance Officer, all funds
David R. Giroux, 1975 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	Vice President, Capital Appreciation Fund, Capital Opportunity Fund, Dividend Growth Fund, Growth & Income Fund, and Value Fund
Gregory S. Golczewski, 1966 Vice President, T. Rowe Price and T. Rowe Price Trust Company	Vice President, all funds
Michael J. Grogan, 1971 Assistant Vice President, T. Rowe Price; CFA	Assistant Vice President, Inflation Protected Bond Fund and New Income Fund
M. Campbell Gunn, 1956 Vice President, T. Rowe Price Global Investment Services Limited, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc.	Vice President, International Funds
Jill L. Hauser, 1958 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, Capital Opportunity Fund, Developing Technologies Fund, and Science & Technology Fund
Francies W. Hawks, 1944 Assistant Vice President, T. Rowe Price	Assistant Vice President, New Horizons Fund and Small-Cap Value Fund
Terri L. Hett, 1959 Employee, T. Rowe Price	Assistant Vice President, Prime Reserve Fund and Reserve Investment Funds
Charles B. Hill, 1961 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	President, Tax-Free Intermediate Bond Fund and Tax-Free Short-Intermediate Fund; Executive Vice President, State Tax-Free Funds and Summit Municipal Funds; Vice President, Short- Term Bond Fund, Tax-Free High Yield Fund, Tax-Free Income Fund, and U.S. Treasury Funds
Ann M. Holcomb, 1972 Vice President, T. Rowe Price; CFA	Vice President, Index Trust
Michael W. Holton, 1968 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	President, Financial Services Fund; Vice President, Capital Opportunity Fund, Dividend Growth Fund, Equity Income Fund, Growth & Income Fund, and Value Fund
Henry H. Hopkins, 1942 Director and Vice President, T. Rowe Price Investment Services, Inc., T. Rowe Price Services, Inc., and T. Rowe Price Trust Company; Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price International, Inc., and T. Rowe Price Retirement Plan Services, Inc.	Vice President, all funds
Thomas J. Huber, 1966 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	President, Dividend Growth Fund; Vice President, Blue Chip Growth Fund, Institutional Equity Funds, and Real Estate Fund
Kris H. Jenner, 1962 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; M.D., D. Phil.	President, Health Sciences Fund; Vice President, Blue Chip Growth Fund, Growth Stock Fund, Mid-Cap Growth Fund, New Horizons Fund, and Small-Cap Stock Fund
Lewis M. Johnson, 1969 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, Capital Appreciation Fund and New Era Fund
T. Dylan Jones, 1971 Assistant Vice President, T. Rowe Price	Assistant Vice President, California Tax-Free Funds, State Tax-Free Funds, Summit Municipal Funds, and Tax-Exempt Money Fund
Keir R. Joyce, 1972 Assistant Vice President, T. Rowe Price	Assistant Vice President, GNMA Fund and Summit Funds
Paul A. Karpers, 1967 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	Vice President, High Yield Fund and Institutional Income Funds
Ian D. Kelson, 1956 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc.	Vice President, Institutional Income Funds and International Funds
Susan J. Klein, 1950 Vice President, T. Rowe Price	Vice President, Health Sciences Fund, New Era Fund, and Small-Cap Value Fund
Philip J. Kligman, 1974 Assistant Vice President, T. Rowe Price; CFA	Assistant Vice President, State Tax-Free Funds, Summit Municipal Funds, Tax-Free Intermediate Bond Fund, and Tax-Free Short-Intermediate Fund
Kara Cheseby Landers, 1963 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	Vice President, Media & Telecommunications Fund, Mid-Cap Value Fund, and Value Fund
Marcy M. Lash, 1963 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, State Tax-Free Funds, Tax- Exempt Money Fund, Tax-Free High Yield Fund, Tax-Free Income Fund, and Tax-Free Short- Intermediate Fund
David M. Lee, 1962 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	President, Real Estate Fund; Vice President, Capital Appreciation Fund, Dividend Growth Fund, Growth & Income Fund, and New Era Fund
Alan D. Levenson, 1958 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Ph.D.	Vice President, California Tax-Free Funds, GNMA Fund, Inflation Protected Bond Fund, New Income Fund, Prime Reserve Fund, Reserve Investment Funds, State Tax-Free Funds, Summit Funds, Summit Municipal Funds, Tax- Exempt Money Fund, and U.S. Treasury Funds
John D. Linehan, 1965 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc.; CFA	President, Value Fund; Vice President, Capital Appreciation Fund, Equity Income Fund, Institutional Equity Funds, and New Era Fund
Patricia B. Lippert, 1953 Assistant Vice President, T. Rowe Price and T. Rowe Price Investment Services, Inc.	Secretary, all funds
Kevin P. Loome, 1967 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc.; CFA	Vice President, High Yield Fund and Institutional Income Funds
Anh Lu, 1968 Vice President, T. Rowe Price Group, Inc. and T. Rowe Price International, Inc.; formerly Vice President, Salomon Smith Barney Hong Kong (to 2001); Business Development Manager, Microsoft (to 2000)	Vice President, Global Technology Fund and Science & Technology Fund
Joseph K. Lynagh, 1958 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	President, Tax-Exempt Money Fund; Executive Vice President, California Tax-Free Funds, State Tax-Free Funds, and Summit Municipal Funds; Vice President, Prime Reserve Fund, Reserve Investment Funds, Summit Funds, and U.S. Treasury Funds
Konstantine B. Mallas, 1963 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Executive Vice President, California Tax-Free Funds, State Tax-Free Funds, and Summit Municipal Funds; Vice President, Tax-Free High Yield Fund, Tax-Free Income Fund, Tax-Free Intermediate Bond Fund, and Tax-Free Short- Intermediate Fund
Robert J. Marcotte, 1962 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, Mid-Cap Growth Fund, New America Growth Fund, and Small-Cap Stock Fund
Jay S. Markowitz, 1962 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; formerly Transplant Surgeon and Assistant Professor of Surgery, Johns Hopkins University School of Medicine (to 2001); M.D.	Vice President, Health Sciences Fund, New Horizons Fund, and Small-Cap Stock Fund
Gregory A. McCrickard, 1958 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company; CFA	President, Small-Cap Stock Fund; Executive Vice President, Institutional Equity Funds; Vice President, Mid-Cap Value Fund, Retirement Funds, and Small-Cap Value Fund
James M. McDonald, 1949 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company	President, Prime Reserve Fund and Reserve Investment Funds; Executive Vice President, Summit Funds; Vice President, California Tax- Free Funds, State Tax-Free Funds, Summit Municipal Funds, Tax-Exempt Money Fund, and U.S. Treasury Funds
Michael J. McGonigle, 1966 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, High Yield Fund and Institutional Income Funds
Hugh D. McGuirk, 1960 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	Executive Vice President, State Tax-Free Funds and Tax-Efficient Funds; Vice President, Summit Municipal Funds, Tax-Free High Yield Fund, Tax-Free Income Fund, Tax-Free Intermediate Bond Fund, and Tax-Free Short-Intermediate Fund
Heather K. McPherson, 1967 Vice President, T. Rowe Price; formerly intern, Salomon Smith Barney (2001); Vice President of Finance and Administration, Putnam Lovell Securities, Inc. (to 2000) ; CPA	Vice President, Equity Income Fund, Mid-Cap Value Fund, New Era Fund, and Value Fund
Cheryl A. Mickel, 1967 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	Vice President, Inflation Protected Bond Fund, Short-Term Bond Fund, Summit Funds, and U.S. Treasury Funds
Joseph M. Milano, 1972 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	President, New America Growth Fund; Vice President, Institutional Equity Funds, Mid-Cap Growth Fund, Mid-Cap Value Fund, and Small- Cap Stock Fund
Raymond A. Mills, 1960 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc.; Ph.D., CFA	Vice President, Balanced Fund, International Funds, and Personal Strategy Funds
James M. Murphy, 1967 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; formerly Portfolio Manager , Prudential Investments (to 2000); CFA	President, Tax-Free High Yield Fund; Vice President, Summit Municipal Funds and Tax- Free Income Fund
Sudhir Nanda, 1959 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Ph.D., CFA	Vice President, Diversified Mid-Cap Growth Fund, Diversified Small-Cap Growth Fund, Growth & Income Fund, and Index Trust
Philip A. Nestico, 1976 Vice President, T. Rowe Price	Vice President, Capital Opportunity Fund, Diversified Mid-Cap Growth Fund, Diversified Small-Cap Growth Fund, Financial Services Fund, International Funds, and Real Estate Fund
Edmund M. Notzon III, 1945 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price Investment Services, Inc., and T. Rowe Price Trust Company; Ph.D., CFA	President, Personal Strategy Funds, Retirement Funds, Spectrum Funds, and U.S. Bond Index Fund; Vice President, Balanced Fund, GNMA Fund, Inflation Protected Bond Fund, and New Income Fund
Charles M. Ober, 1950 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	President, New Era Fund; Vice President, Real Estate Fund
Curt J. Organt, 1968 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, Small-Cap Stock Fund and Small-Cap Value Fund
Gonzalo Px87 ngaro, 1968 Vice President, T. Rowe Price Group, Inc. and T. Rowe Price International, Inc.; CFA	Vice President, International Funds
Timothy E. Parker, 1974 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; formerly student, Darden Graduate School, University of Virginia (to 2001); Financial Analyst, Robert W. Baird & Co. Inc. (to 1999)	Vice President, Blue Chip Growth Fund, Dividend Growth Fund, New Era Fund, and New Horizons Fund
Charles G. Pepin, 1966 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, Health Sciences Fund, Institutional Equity Funds, Mid-Cap Value Fund, New America Growth Fund, New Horizons Fund, and Small-Cap Stock Fund
Donald J. Peters, 1959 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	President, Diversified Mid-Cap Growth Fund and Tax-Efficient Funds; Vice President, Diversified Small-Cap Growth Fund and Dividend Growth Fund
D. James Prey III, 1959 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, Global Technology Fund, Growth Stock Fund, Media & Telecommunications Fund, and Science & Technology Fund
Larry J. Puglia, 1960 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA, CPA	President, Blue Chip Growth Fund; Executive Vice President, Institutional Equity Funds and Personal Strategy Funds; Vice President, Financial Services Fund, Growth Stock Fund, and Retirement Funds
Karen M. Regan, 1967 Vice President, T. Rowe Price	Vice President, Blue Chip Growth Fund, Dividend Growth Fund, and Growth & Income Fund
Vernon A. Reid, Jr., 1954 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, Corporate Income Fund, Inflation Protected Bond Fund, New Income Fund, Short-Term Bond Fund, and U.S. Treasury Funds
Robert A. Revel-Chion, 1965 Vice President, T. Rowe Price Group, Inc. and T. Rowe Price International, Inc.	Vice President, International Funds
Stephen P. Richter, 1969 Vice President, T. Rowe Price; formerly Vice President , Euler ACI (to 2000); CFA	Vice President, Summit Municipal Funds, Tax- Free High Yield Fund, Tax-Free Income Fund, and Tax-Free Intermediate Bond Fund
Theodore E. Robson, 1965 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc.; CFA	Vice President, Real Estate Fund
Brian C. Rogers, 1955 Chief Investment Officer, Director, and Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Director and Vice President, T. Rowe Price Trust Company; CFA, CIC	President, Equity Income Fund and Institutional Equity Funds; Vice President, Capital Appreciation Fund, Personal Strategy Funds, Retirement Funds, Spectrum Funds, and Value Fund
Christopher J. Rothery, 1963 Vice President, T. Rowe Price Group, Inc. and T. Rowe Price International, Inc.	Vice President, International Funds
Jeffrey Rottinghaus, 1970 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; formerly student, the Wharton School, University of Pennsylvania (to 2001); Information Technology Consultant, Kelly-Lewey & Associates (to 1999); CPA	Vice President, Blue Chip Growth Fund, Capital Opportunity Fund, Developing Technologies Fund, Dividend Growth Fund, Global Technology Fund, Growth & Income Fund, Growth Stock Fund, Mid-Cap Growth Fund, New America Growth Fund, New Horizons Fund, and Science & Technology Fund
R. Todd Ruppert, 1956 Chief Executive Officer, Director, and President, T. Rowe Price Global Asset Management Limited and T. Rowe Price Global Investment Services Limited; Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price Retirement Plan Services, Inc., and T. Rowe Price Trust Company	Vice President, Institutional International Funds
James B.M. Seddon, 1964 Vice President, T. Rowe Price Group, Inc. and T. Rowe Price International, Inc.	Vice President, Institutional International Funds and International Funds
Daniel O. Shackelford, 1958 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company; CFA	President, Inflation Protected Bond Fund and New Income Fund; Vice President, U.S. Treasury Funds
Robert W. Sharps, 1971 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA, CPA	Executive Vice President, Growth Stock Fund and Institutional Equity Funds; Vice President, Blue Chip Growth Fund, Financial Services Fund, Growth & Income Fund, and New America Growth Fund
John Carl A. Sherman, 1972 Vice President, T. Rowe Price Group, Inc. and T. Rowe Price International, Inc.	Vice President, Health Sciences Fund
Charles M. Shriver, 1967 Vice President, T. Rowe Price; CFA	Vice President, U.S. Bond Index Fund; Assistant Vice President, Personal Strategy Funds
Neil Smith, 1972 Vice President, T. Rowe Price International, Inc.	Vice President, International Index Fund
Robert W. Smith, 1961 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc.	President, Growth Stock Fund; Executive Vice President, Institutional Equity Funds; Vice President, Blue Chip Growth Fund, International Funds, Media & Telecommunications Fund, and New America Growth Fund
Michael F. Sola, 1969 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	President, Developing Technologies Fund and Science & Technology Fund; Vice President, Global Technology Fund, Growth Stock Fund, New Horizons Fund, and Small-Cap Stock Fund
William J. Stromberg, 1960 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company; CFA	President, Capital Opportunity Fund; Vice President, Dividend Growth Fund, Equity Income Fund, Financial Services Fund, and Tax- Efficient Funds
Walter P. Stuart III, 1960 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	Vice President, High Yield Fund and Institutional Income Funds
Timothy G. Taylor, 1975 Assistant Vice President, T. Rowe Price ; CFA	Assistant Vice President, California Tax-Free Funds, State Tax-Free Funds, Summit Municipal Funds, Tax-Free Intermediate Bond Fund, and Tax-Free Short-Intermediate Fund
Dean Tenerelli, 1964 Vice President, T. Rowe Price Group, Inc. and T. Rowe Price International, Inc.	Vice President, International Funds and Media & Telecommunications Fund
Thomas E. Tewksbury, 1961 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, High Yield Fund and Institutional Income Funds
Justin Thomson, 1968 Vice President, T. Rowe Price Group, Inc. and T. Rowe Price International, Inc.	Vice President, International Funds
David A. Tiberii, 1965 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	President, Corporate Income Fund; Vice President, Institutional Income Funds and New Income Fund
Susan G. Troll, 1966 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CPA	Vice President, Prime Reserve Fund and Summit Funds
Ken D. Uematsu, 1966 Employee, T. Rowe Price; CFA	Assistant Vice President, Index Trust and International Index Fund
Mark J. Vaselkiv, 1958 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	President, High Yield Fund and Institutional Income Funds; Executive Vice President, Corporate Income Fund; Vice President, Balanced Fund, Personal Strategy Funds, Retirement Funds, and Summit Funds
J. David Wagner, 1974 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	Vice President, Financial Services Fund, Mid - Cap Value Fund, Small-Cap Stock Fund, and Small-Cap Value Fund
John F. Wakeman, 1962 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Executive Vice President, Mid-Cap Growth Fund; Vice President, Diversified Mid-Cap Growth Fund, Institutional Equity Funds, and New Horizons Fund
David J. Wallack, 1960 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	President, Mid-Cap Value Fund; Vice President, Capital Appreciation Fund, Institutional Equity Funds, New Era Fund, and Small-Cap Value Fund
Julie L. Waples, 1970 Vice President, T. Rowe Price	Vice President, all funds
David J.L. Warren, 1957 Director and Vice President, T. Rowe Price; Vice President, T. Rowe Price Group, Inc.; Chief Executive Officer, Director, and President, T. Rowe Price International, Inc.; Director, T. Rowe Price Global Asset Management Limited and T. Rowe Price Global Investment Services Limited	President, Institutional International Funds and International Funds; Vice President, Retirement Funds and Spectrum Funds
Mark R. Weigman, 1962 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company; CFA, CIC	Vice President, Diversified Mid-Cap Growth Fund and Tax-Efficient Funds
John D. Wells, 1960 Vice President, T. Rowe Price , T. Rowe Price Group, Inc. , and T. Rowe Price Savings Bank	Vice President, GNMA Fund and Summit Funds
William F. Wendler II, 1962 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc.; CFA	Vice President, Institutional International Funds and International Funds
Dale E. West, 1969 Vice President, T. Rowe Price Group, Inc. and T. Rowe Price International, Inc.; CFA	Vice President, Media & Telecommunications Fund
Richard T. Whitney, 1958 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price International, Inc., and T. Rowe Price Trust Company; CFA	President, Balanced Fund, Index Trust, and International Index Fund; Executive Vice President, Diversified Small-Cap Growth Fund; Vice President, Capital Opportunity Fund, Institutional Equity Funds, International Funds, Personal Strategy Funds, and Retirement Funds
Edward A. Wiese, 1959 Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company; Chief Investment Officer, Director, and Vice President, T. Rowe Price Savings Bank; CFA	President, Short-Term Bond Fund and Summit Funds; Executive Vice President, U.S. Treasury Funds; Vice President, California Tax-Free Funds, Institutional International Funds, International Funds, Prime Reserve Fund, Reserve Investment Funds, Retirement Funds, State Tax-Free Funds, Summit Municipal Funds, Tax-Exempt Money Fund, Tax-Free Intermediate Bond Fund, and Tax-Free Short-Intermediate Fund
Thea N. Williams, 1961 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, Corporate Income Fund, High Yield Fund, and Institutional Income Funds
Paul W. Wojcik, 1970 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; CFA	President, Diversified Small-Cap Growth Fund
R. Candler Young, 1971 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.	Vice President, Growth & Income Fund, Mid- Cap Growth Fund, New America Growth Fund, and New Horizons Fund
Wenhua Zhang, 1970 Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; formerly student, the Wharton School, University of Pennsylvania (to 2001); associate, Swiss Reinsurance Company (to 1999); CFA, CPA	Vice President, Developing Technologies Fund, Global Technology Fund, New Horizons Fund, and Small-Cap Stock Fund

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<R>

Directors` Compensation

</R>

<R>

The funds do not pay pension or retirement benefits to their directors or officers. The following table shows remuneration paid by the funds to the independent directors. In addition to directors` fees payable to all independent directors, e ach director serving on the Audit Committee received $ 5 ,000 for such service for the calendar year 200 4 , and t he chairman of the Audit Committee received an additional $ 5 ,000 for such service for the calendar year 200 4 . The Lead Independent Director received $25,000 for the calendar year 2004. Also, any director of the fund who is an officer or employee of T. Rowe Price or T. Rowe Price International (inside directors) does not receive any remuneration from the funds.

</R>

<R>

The following table shows the total compensation from the funds paid to the directors for the calendar year 200 4 : <R>

Directors	Total Compensation
Deering	$ 110,000
Dick	11 5 ,000
Fagin	11 7 , 417
Horn	110,417
Linaweaver	1 36 ,000
Schreiber	1 2 1,167

</R>

<R>

The following table shows the amounts paid to the directors based on accrued compensation for the calendar year 200 4 : <R>

Fund	Aggregate Compensation from Fund
	Deering	Dick	Fagin	Horn	Linaweaver	Schreiber
Balanced	$1, 147	$1, 201	$1, 203	$ 1,151	$1,4 30	$1, 271
Blue Chip Growth	2,106	2,217	2, 281	2, 113	2,694	2,370
California Tax-Free Bond	810	8 42	859	812	983	882
California Tax-Free Money	779	810	826	782	944	848
Capital Appreciation	1, 409	1, 481	1,5 17	1,414	1, 784	1,572
Capital Opportunity	776	807	823	779	940	844
Corporate Income	784	816	832	787	951	854
Developing Technologies	770	801	816	773	932	83 7
Diversified Mid-Cap Growth	766	797	812	769	927	832
Diversified Small-Cap Growth	776	807	822	778	939	844
Dividend Growth	889	927	947	892	1,089	974
Emerging Europe & Mediterranean	777	809	824	780	942	845
Emerging Markets Bond	806	83 9	856	809	979	879
Emerging Markets Stock	852	889	907	856	1,041	932
Equity Income	3,483	3,681	3,789	3,494	4,525	3,949
Equity Index 500	1, 519	1, 596	1, 637	1,524	1,921	1, 697
European Stock	9 12	9 51	9 72	915	1,116	1,000
Extended Equity Market Index	785	818	832	788	953	857
Financial Services	829	864	882	83 3	1,010	906
Florida Intermediate Tax-Free	781	813	829	784	947	851
Georgia Tax-Free Bond	778	809	825	781	942	847
Global Stock	776	807	823	779	940	844
Global Technology	777	809	824	780	941	846
GNMA	1, 00 5	1, 050	1, 074	1,009	1,2 40	1, 107
Government Reserve Investment	948	988	1,012	951	1,160	1,041
Growth & Income	1, 112	1,163	1,191	1,115	1,380	1,229
Growth Stock	1, 952	2,058	2,112	1,959	2,503	2,196
Health Sciences	97 5	1,019	1,041	978	1, 206	1,073
High Yield	1, 484	1, 557	1, 598	1,489	1, 868	1, 655
Inflation Protected Bond	767	799	813	770	929	835
Institutional Core Plus( a )	6 6	68	6 8	6 6	79	7 1
Institutional Emerging Markets Equity	769	800	815	772	931	836
Institutional Foreign Equity	929	969	991	933	1,1 38	1, 020
Institutional High Yield	890	929	948	894	1,090	976
Institutional Large-Cap Core Growth	767	797	811	769	928	833
Institutional Large-Cap Growth	767	798	812	770	928	834
Institutional Large-Cap Value	770	801	815	773	932	8 38
Institutional Mid-Cap Equity Growth	8 29	863	880	832	1,009	90 5
Institutional Small-Cap Stock	841	876	893	844	1,026	919
International Bond	1, 020	1, 067	1, 091	1,024	1, 262	1,1 25
International Discovery	907	945	965	909	1,112	993
International Equity Index	767	799	813	770	929	835
International Growth & Income	814	849	865	817	993	889
International Stock	1,693	1,779	1,829	1,699	2, 145	1,897
Japan	796	829	844	799	967	867
Latin America	799	832	847	802	970	871
Maryland Short-Term Tax-Free Bond	805	838	854	808	978	878
Maryland Tax-Free Bond	995	1, 039	1, 062	999	1,2 26	1, 095
Maryland Tax-Free Money	781	813	827	784	947	850
Media & Telecommunications	892	931	9 50	896	1,095	978
Mid-Cap Growth	2,783	2,939	3,023	2,791	3, 602	3, 150
Mid-Cap Value	1, 308	1, 377	1, 405	1,313	1, 663	1, 458
New America Growth	9 30	970	991	933	1, 142	1, 021
New Asia	920	960	980	924	1,128	1,009
New Era	1,050	1,0 99	1, 122	1,054	1, 305	1, 158
New Horizons	1,700	1,788	1,836	1,706	2, 161	1,906
New Income	1, 224	1, 281	1, 311	1,227	1, 529	1, 356
New Jersey Tax-Free Bond	789	822	837	792	958	860
New York Tax-Free Bond	805	838	853	807	977	877
New York Tax-Free Money	782	813	827	784	947	850
Personal Strategy Balanced	931	972	992	934	1,146	1,022
Personal Strategy Growth	869	906	923	872	1,063	951
Personal Strategy Income	826	860	876	829	1,006	902
Prime Reserve	1,691	1,775	1,825	1,696	2,138	1,892
Real Estate	830	866	881	834	1,013	907
Reserve Investment	1,719	1,809	1,855	1,725	2,189	1,926
Retirement 2005( b )	659	691	693	662	816	716
Retirement 2010	829	868	878	837	1,015	908
Retirement 2015( b )	663	695	697	666	822	720
Retirement 2020	837	877	888	846	1,026	918
Retirement 2025( b )	661	693	695	663	819	717
Retirement 2030	802	840	850	810	978	878
Retirement 2035( b )	652	684	686	6 56	808	708
Retirement 2040	775	811	820	783	941	847
Retirement Income	790	827	837	798	962	864
Science & Technology	1,610	1,691	1,738	1,615	2, 032	1,802
Short-Term Bond	1,0 30	1,07 8	1, 101	1,034	1, 278	1, 138
Small-Cap Stock	1,787	1,881	1,931	1,793	2, 278	2, 006
Small-Cap Value	1, 494	1, 571	1, 610	1,500	1,8 94	1, 670
Spectrum Growth	1, 182	1, 238	1, 268	1,187	1,47 6	1, 312
Spectrum Income	1, 476	1, 549	1, 588	1,480	1, 863	1, 647
Spectrum International	778	809	823	780	942	847
Summit Cash Reserves	1, 312	1, 376	1,410	1,317	1,646	1,459
Summit GNMA	776	808	823	780	941	845
Summit Municipal Income	779	810	824	781	943	847
Summit Municipal Intermediate	788	820	835	791	956	859
Summit Municipal Money Market	845	881	897	848	1,031	923
Tax-Efficient Balanced	769	801	81 5	77 2	931	838
Tax-Efficient Growth	775	807	821	778	939	84 5
Tax-Efficient Multi-Cap Growth	766	797	811	769	927	83 4
Tax-Exempt Money	891	929	947	893	1,090	9 76
Tax-Free High Yield	973	1, 016	1, 038	976	1,1 98	1, 071
Tax-Free Income	1, 068	1, 118	1, 143	1,072	1,32 5	1, 181
Tax-Free Intermediate Bond	792	824	839	795	961	864
Tax-Free Short- Intermediate	8 68	904	922	871	1,060	950
Total Equity Market Index	818	852	868	821	996	893
U.S. Bond Index	781	813	827	784	947	851
U.S. Treasury Intermediate	819	853	869	822	996	895
U.S. Treasury Long-Term	806	839	854	809	979	879
U.S. Treasury Money	942	984	1, 005	94 6	1,1 57	1, 036
Value	1, 097	1,1 49	1,1 73	1,101	1, 366	1, 213
Virginia Tax-Free Bond	8 38	8 72	8 89	840	1,020	916

</R>

PAGE 225

<R>

Expenses are for the period November 30 , 2004 through December 31, 2004.

</R>

<R>

Expenses are for the period February 29 , 2004 through December 31, 2004.

</R>

PAGE 227

Directors` Holdings in the Price Funds

The following table s set forth the Price F und holdings of the independent and inside directors, as of December 31, 200 4 .

<R>

Aggregate Holdings, All Funds	Independent Directors
	Deering	Dick	Fagin	Horn	Linaweaver	Schreiber
	over $100,000	over $100,000	over $100,000	over $100,000	over $100,000	over $100,000
Balanced	None	None	None	None	None	None
Blue Chip Growth	None	$10,001- $50,000	over $100,000	$10,001- $50,000(a)	over $100,000	None
Blue Chip Growth Fund — Advisor Class	None	None	None	None	None	None
Blue Chip Growth Fund — R Class	None	None	None	None	None	None
Blue Chip Growth Portfolio	None	None	None	None	None	None
Blue Chip Growth Portfolio — II	None	None	None	None	None	None
California Tax-Free Bond	None	None	None	None	None	None
California Tax-Free Money	None	None	None	None	None	None
Capital Appreciation	None	over $100,000	None	None	None	None
Capital Appreciation Fund — Advisor Class	None	None	None	None	None	None
Capital Opportunity	None	None	None	None	None	None
Capital Opportunity Fund — Advisor Class	None	None	None	None	None	None
Capital Opportunity Fund — R Class	None	None	None	None	None	None
Corporate Income	None	None	None	None	None	None
Developing Technologies	None	None	None	None	None	None
Diversified Mid-Cap Growth	None	None	None	None	None	None
Diversified Small-Cap Growth	None	None	None	None	None	None
Dividend Growth	None	None	$50,001- $100,000	$10,001- $50,000(a)	None	None
Emerging Europe & Mediterranean	None	None	None	None	None	None
Emerging Markets Bond	None	None	None	None	None	None
Emerging Markets Stock	None	None	None	None	None	None
Equity Income	over $100,000	$50,001- $100,000	$50,001- $100,000	None	over $100,000	None
Equity Income Fund — Advisor Class	None	None	None	None	None	None
Equity Income Fund — R Class	None	None	None	None	None	None
Equity Income Portfolio	None	None	None	None	None	None
Equity Income Portfolio — II	None	None	None	None	None	None
Equity Index 500	None	None	None	None	None	None
Equity Index 500 Portfolio	None	None	None	None	None	None
European Stock	$50,001- $100,000	$10,001- $50,000	$10,001- $50,000	None	None	None
Extended Equity Market Index	None	None	None	None	None	None
Financial Services	None	$10,001- $50,000	None	None	None	None
Florida Intermediate Tax-Free	None	None	None	None	None	None
Georgia Tax-Free Bond	None	None	None	None	None	None
Global Stock	None	None	None	None	None	None
Global Technology	None	None	None	None	None	None
GNMA	None	None	None	None	None	over $100,000
Government Reserve Investment	None	None	None	None	None	None
Growth & Income	None	$1-$10,000	None	None	None	over $100,000
Growth Stock	None	$10,001- $50,000	None	None	$50,001- $100,000	None
Growth Stock Fund — Advisor Class	None	None	None	None	None	None
Growth Stock Fund — R Class	None	None	None	None	None	None
Health Sciences	None	$10,001- $50,000	over $100,000	None	None	None
Health Sciences Portfolio	None	None	None	None	None	None
Health Sciences Portfolio — II	None	None	None	None	None	None
High Yield	None	$50,001- $100,000	None	$10,001- $50,000	over $100,000	over $100,000
High Yield Fund — Advisor Class	None	None	None	None	None	None
Inflation Protected Bond	None	None	None	None	None	None
Institutional Core Plus	None	None	None	None	None	None
Institutional Emerging Markets Equity	None	None	None	None	None	None
Institutional Foreign Equity	None	None	None	None	None	None
Institutional High Yield	None	None	None	None	None	None
Institutional Large-Cap Core Growth	None	None	None	None	None	None
Institutional Large-Cap Growth	None	None	None	None	None	None
Institutional Large-Cap Value	None	None	None	None	None	None
Institutional Mid-Cap Equity Growth	None	None	None	None	None	None
Institutional Small-Cap Stock	None	None	None	None	None	None
International Bond	None	over $100,000	None	None	over $100,000	None
International Bond Fund — Advisor Class	None	None	None	None	None	None
International Discovery	$50,001- $100,000	$10,001- $50,000	None	None	None	None
International Equity Index	over $100,000	None	None	None	None	None
International Growth & Income	None	None	None	None	None	None
International Growth & Income Fund — Advisor Class	None	None	None	None	None	None
International Growth & Income Fun d — R Class	None	None	None	None	None	None
International Stock	None	None	over $100,000	None	over $100,000	None
International Stock Fund — Advisor Class	None	None	None	None	None	None
International Stock Fund — R Class	None	None	None	None	None	None
International Stock Portfolio	None	None	None	None	None	None
Japan	None	None	None	None	None	None
Latin America	None	None	None	None	None	None
Limited-Term Bond Portfolio	None	None	None	None	None	None
Maryland Short-Term Tax-Free Bond	None	None	None	None	None	None
Maryland Tax-Free Bond	None	None	None	None	None	None
Maryland Tax-Free Money	None	None	None	None	None	None
Media & Telecommunications	$50,001- $100,000	None	None	None	None	None
Mid-Cap Growth	over $100,000	$10,001- $50,000	over $100,000	None	None	None
Mid-Cap Growth Fund — Advisor Class	None	None	None	None	None	None
Mid-Cap Growth Fund — R Class	None	None	None	None	None	None
Mid-Cap Growth Portfolio	None	None	None	None	None	None
Mid-Cap Growth Portfolio — II	None	None	None	None	None	None
Mid-Cap Value	None	None	$10,001- $50,000	None	None	None
Mid-Cap Value Fund — Advisor Class	None	None	None	None	None	None
Mid-Cap Value Fund — R Class	None	None	None	None	None	None
New America Growth	None	None	None	None	None	None
New America Growth Portfolio	None	None	None	None	None	None
New Asia	None	None	$10,001- $50,000	None	None	None
New Era	None	None	None	None	None	None
New Horizons	over $100,000	$10,001- $50,000	$1-$10,000	None	over $100,000	None
New Income	None	$50,001- $100,000	None	None	over $100,000	over $100,000
New Income Fund — Advisor Class	None	None	None	None	None	None
New Income Fund — R Class	None	None	None	None	None	None
New Jersey Tax-Free Bond	None	None	None	None	None	None
New York Tax-Free Bond	None	None	None	None	None	None
New York Tax-Free Money	None	None	None	None	None	None
Personal Strategy Balanced	None	None	None	None	None	None
Personal Strategy Balanced Portfolio	None	None	None	None	None	None
Personal Strategy Growth	None	None	None	None	None	None
Personal Strategy Income	None	None	None	None	None	None
Prime Reserve	None	over $100,000	None	over $100,000	$10,001- $50,000	$10,001- $50,000
Prime Reserve Portfolio	None	None	None	None	None	None
Real Estate	None	None	None	None	None	None
Real Estate Fund — Advisor Class	None	None	None	None	None	None
Reserve Investment	None	None	None	None	None	None
Retirement 2005	None	None	None	None	None	None
Retirement 2010	over $100,000	None	None	None	None	None
Retirement 2010 Fund — Advisor Class	None	None	None	None	None	None
Retirement 2010 Fund — R Class	None	None	None	None	None	None
Retirement 2015	None	None	None	None	None	None
Retirement 2020	None	None	None	$10,001- $50,000	None	None
Retirement 2020 Fund — Advisor Class	None	None	None	None	None	None
Retirement 2020 Fund — R Class	None	None	None	None	None	None
Retirement 2025	None	None	None	None	None	None
Retirement 2030	None	None	None	None	None	None
Retirement 2030 Fund — Advisor Class	None	None	None	None	None	None
Retirement 2030 Fund — R Class	None	None	None	None	None	None
Retirement 2035	None	None	None	None	None	None
Retirement 2040	None	None	None	None	None	None
Retirement 2040 Fund — Advisor Class	None	None	None	None	None	None
Retirement 2040 Fund — R Class	None	None	None	None	None	None
Retirement Income	None	None	None	None	None	None
Retirement Income Fund — Advisor Class	None	None	None	None	None	None
Retirement Income Fund — R Class	None	None	None	None	None	None
Science & Technology	None	None	None	None	None	None
Science & Technology Fund — Advisor Class	None	None	None	None	None	None
Short-Term Bond	None	None	$50,001- $100,000	None	None	over $100,000
Short-Term Bond Fund — Advisor Class	None	None	None	None	None	None
Small-Cap Stock	None	$10,001- $50,000	over $100,000	None	None	None
Small-Cap Stock Fund — Advisor Class	None	None	None	None	None	None
Small-Cap Value	None	$10,001- $50,000	None	None	None	None
Small-Cap Value Fund — Advisor Class	None	None	None	None	None	None
Spectrum Growth	None	None	None	None	None	None
Spectrum Income	None	None	None	None	None	None
Spectrum International	None	None	None	None	None	None
Summit Cash Reserves	over $100,000	over $100,000	over $100,000	None	None	over $100,000
Summit GNMA	None	None	None	None	None	None
Summit Municipal Income	None	None	None	None	None	over $100,000
Summit Municipal Intermediate	None	None	None	None	None	over $100,000
Summit Municipal Money Market	None	None	over $100,000	None	None	over $100,000
Tax-Efficient Balanced	None	None	$50,001- $100,000	None	None	None
Tax-Efficient Growth	None	None	$10,001- $50,000	None	None	None
Tax-Efficient Multi-Cap Growth	None	None	None	None	None	None
Tax-Exempt Money	None	None	None	None	None	over $100,000
Tax-Free High Yield	None	None	None	None	None	over $100,000
Tax-Free Income	None	None	None	None	None	over $100,000
Tax-Free Income Fund — Advisor Class	None	None	None	None	None	None
Tax-Free Intermediate Bond	None	None	None	None	None	None
Tax-Free Short- Intermediate	None	None	None	None	None	over $100,000
Total Equity Market Index	None	None	None	None	None	None
U.S. Bond Index	None	None	None	None	None	None
U.S. Treasury Intermediate	None	over $100,000	None	None	None	over $100,000
U.S. Treasury Long-Term	None	None	None	None	None	over $100,000
U.S. Treasury Money	None	None	None	None	None	over $100,000
Value	None	$10,001- $50,000	$ 5 0,001- $ 10 0,000	None	None	over $100,000
Value Fund — Advisor Class	None	None	None	None	None	None
Virginia Tax-Free Bond	None	None	None	None	None	None

</R>

PAGE 229

PAGE 231

<R>

(a) Holdings are current as of February 1, 2005.

</R>

<R>

Aggregate Holdings, All Funds	Inside Directors
	Kennedy	Laporte	Miller	Riepe
	over $100,000	over $100,000	over $100,000	over $100,000
Balanced	None	None	None	over $100,000
Blue Chip Growth	None	None	None	None
Blue Chip Growth Fund — Advisor Class	None	None	None	None
Blue Chip Growth Fund — R Class	None	None	None	None
Blue Chip Growth Portfolio	None	None	None	None
Blue Chip Growth Portfolio — II	None	None	None	None
California Tax-Free Bond	None	None	None	None
California Tax-Free Money	None	None	None	None
Capital Appreciation	over $100,000	over $100,000	None	over $100,000
Capital Appreciation Fund — Advisor Class	None	None	None	None
Capital Opportunity	$10,001-$50,000	over $100,000	None	None
Capital Opportunity Fund — Advisor Class	None	None	None	None
Capital Opportunity Fund — R Class	None	None	None	None
Corporate Income	None	None	None	None
Developing Technologies	None	over $100,000	over $100,000	None
Diversified Mid-Cap Growth	None	None	None	None
Diversified Small-Cap Growth	None	None	None	None
Dividend Growth	$50,001-$100,000	None	None	None
Emerging Europe & Mediterranean	None	None	None	None
Emerging Markets Bond	None	None	None	None
Emerging Markets Stock	over $100,000	None	None	over $100,000
Equity Income	$10,001-$50,000	None	over $100,000	over $100,000
Equity Income Fund — Advisor Class	None	None	None	None
Equity Income Fund — R Class	None	None	None	None
Equity Income Portfolio	None	None	None	None
Equity Income Portfolio — II	None	None	None	None
Equity Index 500	None	None	None	None
Equity Index 500 Portfolio	None	None	None	None
European Stock	None	$10,001-$50,000	$50,001-$100,000	over $100,000
Extended Equity Market Index	None	None	None	None
Financial Services	None	None	None	None
Florida Intermediate Tax-Free	None	None	None	None
Georgia Tax-Free Bond	None	None	None	None
Global Stock	None	None	None	None
Global Technology	None	None	None	None
GNMA	None	None	None	None
Government Reserve Investment	None	None	None	None
Growth & Income	None	None	None	over $100,000
Growth Stock	over $100,000	over $100,000	None	None
Growth Stock Fund — Advisor Class	None	None	None	None
Growth Stock Fund — R Class	None	None	None	None
Health Sciences	over $100,000	None	None	None
Health Sciences Portfolio	None	None	None	None
Health Sciences Portfolio — II	None	None	None	None
High Yield	None	None	None	over $100,000
High Yield Fund — Advisor Class	None	None	None	None
Inflation Protected Bond	None	None	None	None
Institutional Core Plus	None	None	None	None
Institutional Emerging Markets Equity	None	None	None	None
Institutional Foreign Equity	None	None	None	None
Institutional High Yield	None	None	None	None
Institutional Large-Cap Core Growth	None	None	None	None
Institutional Large-Cap Growth	None	None	None	None
Institutional Large-Cap Value	None	None	None	None
Institutional Mid-Cap Equity Growth	None	None	None	None
Institutional Small-Cap Stock	None	None	None	None
International Bond	None	None	over $100,000	None
International Bond Fund — Advisor Class	None	None	None	None
International Discovery	over $100,000	over $100,000	None	$1-$10,000
International Equity Index	None	None	None	None
International Growth & Income	None	None	None	None
International Growth & Income Fund — Advisor Class	None	None	None	None
International Growth & Income Fund — R Class	None	None	None	None
International Stock	over $100,000	over $100,000	over $100,000	None
International Stock Fund — Advisor Class	None	None	None	None
International Stock Fund — R Class	None	None	None	None
International Stock Portfolio	None	None	None	None
Japan	over $100,000	None	$50,001-$100,000	over $100,000
Latin America	$50,001-$100,000	None	None	None
Limited-Term Bond Portfolio	None	None	None	None
Maryland Short-Term Tax-Free Bond	None	None	over $100,000	None
Maryland Tax-Free Bond	None	over $100,000	over $100,000	None
Maryland Tax-Free Money	None	None	over $100,000	None
Media & Telecommunications	over $100,000	None	None	None
Mid-Cap Growth	over $100,000	over $100,000	None	$50,001-$100,000
Mid-Cap Growth Fund — Advisor Class	None	None	None	None
Mid-Cap Growth Fund — R Class	None	None	None	None
Mid-Cap Growth Portfolio	None	None	None	None
Mid-Cap Growth Portfolio — II	None	None	None	None
Mid-Cap Value	over $100,000	None	None	None
Mid-Cap Value Fund — Advisor Class	None	None	None	None
Mid-Cap Value Fund — R Class	None	None	None	None
New America Growth	over $100,000	over $100,000	None	None
New America Growth Portfolio	None	None	None	None
New Asia	over $100,000	over $100,000	over $100,000	None
New Era	over $100,000	None	over $100,000	None
New Horizons	None	over $100,000	over $100,000	None
New Income	None	$50,001-$100,000	None	None
New Income Fund — Advisor Class	None	None	None	None
New Income Fund — R Class	None	None	None	None
New Jersey Tax-Free Bond	None	None	None	None
New York Tax-Free Bond	None	None	None	None
New York Tax-Free Money	None	None	None	None
Personal Strategy Balanced	None	None	None	None
Personal Strategy Balanced Portfolio	None	None	None	None
Personal Strategy Growth	None	None	None	None
Personal Strategy Income	None	None	None	None
Prime Reserve	over $100,000	over $100,000	None	over $100,000
Prime Reserve Portfolio	None	None	None	None
Real Estate	None	None	None	None
Real Estate Fund — Advisor Class	None	None	None	None
Reserve Investment	None	None	None	None
Retirement 2005	None	None	None	None
Retirement 2010	None	None	None	None
Retirement 2010 Fund — Advisor Class	None	None	None	None
Retirement 2010 Fund — R Class	None	None	None	None
Retirement 2015	None	None	None	None
Retirement 2020	None	None	None	None
Retirement 2020 Fund — Advisor Class	None	None	None	None
Retirement 2020 Fund — R Class	None	None	None	None
Retirement 2025	None	None	None	None
Retirement 2030	None	None	None	None
Retirement 2030 Fund — Advisor Class	None	None	None	None
Retirement 2030 Fund — R Class	None	None	None	None
Retirement 2035	None	None	None	None
Retirement 2040	None	None	None	None
Retirement 2040 Fund — Advisor Class	None	None	None	None
Retirement 2040 Fund — R Class	None	None	None	None
Retirement Income	None	None	None	None
Retirement Income Fund — Advisor Class	None	None	None	None
Retirement Income Fund — R Class	None	None	None	None
Science & Technology	None	over $100,000	$10,001-$50,000	None
Science & Technology Fund — Advisor Class	None	None	None	None
Short-Term Bond	None	None	over $100,000	over $100,000
Short-Term Bond Fund — Advisor Class	None	None	None	None
Small-Cap Stock	over $100,000	None	$10,001-$50,000	None
Small-Cap Stock Fund — Advisor Class	None	None	None	None
Small-Cap Value	None	None	None	over $100,000
Small-Cap Value Fund — Advisor Class	None	None	None	None
Spectrum Growth	None	None	None	None
Spectrum Income	None	None	None	None
Spectrum International	None	None	None	None
Summit Cash Reserves	over $100,000	over $100,000	None	over $100,000
Summit GNMA	None	None	None	None
Summit Municipal Income	None	None	None	None
Summit Municipal Intermediate	None	None	None	None
Summit Municipal Money Market	over $100,000	None	None	over $100,000
Tax-Efficient Balanced	None	None	over $100,000	None
Tax-Efficient Growth	None	None	None	None
Tax-Efficient Multi-Cap Growth	None	None	None	None
Tax-Exempt Money	over $100,000	None	over $100,000	None
Tax-Free High Yield	None	None	None	None
Tax-Free Income	None	None	over $100,000	None
Tax-Free Income Fund — Advisor Class	None	None	None	None
Tax-Free Intermediate Bond	None	None	None	None
Tax-Free Short-Intermediate	None	None	None	over $100,000
Total Equity Market Index	None	None	None	None
U.S. Bond Index	None	None	None	None
U.S. Treasury Intermediate	None	None	None	None
U.S. Treasury Long-Term	None	None	$50,001-$100,000	None
U.S. Treasury Money	None	None	None	None
Value	over $100,000	over $100,000	$50,001-$100,000	over $100,000
Value Fund — Advisor Class	None	None	None	None
Virginia Tax-Free Bond	None	None	None	None

</R>

PAGE 233

PAGE 235

<R>

Portfolio Managers` Holdings in the Price Funds

</R>

<R>

The following table sets forth the Price Fund holdings of the portfolio managers . <R>

Fund		Range of Fund Holdings as of Fund`s Fiscal Year ( u nless o therwise i ndicated 1 )	All Funds Range as of 12/31/04
	Portfolio Manager
Balanced	Richard T. Whitney Edmund N. Notzon III	$100,001-$500,000 none	over $1,000,000 500,001-1,000,000
Blue Chip Growth	Larry J. Puglia	500,001-1,000,000	over $1,000,000
Capital Appreciation	Stephen W. Boesel	500,001-1,000,000	over $1,000,000
Capital Opportunity	William J . Stromberg Richard T. Whitney	100,001-500,00 0 100,001-500,00 0	over $1,000,000 over $1,000,000
Corporate Income 2	David A. Tiberii	1-10,000	100,001-500,000
Developing Technologies	Michael F. Sola	100,001-500,000	over $1,000,000
Diversified Mid-Cap Growth	Donald J. Peters	100,001-500,000	over $1,000,000
Diversified Small-Cap Growth	Paul W. Wojcik	100,001-500,000	100,001-500,000
Dividend Growth	Thomas J. Huber	100,001-500,000	over $1,000,000
Emerging Europe & Mediterranean 2	Christopher D. Alderson	none	over $1,000,000
Emerging Markets Bond	Michael J. Conelius	50,001-100,000	500,001-1,000,000
Emerging Markets Stock 2	Christopher D. Alderson Frances Dydasco 3 Mark J.T. Edwards Gonzalo Px87 ngaro	100,001-500,000 none none 50,001-100,000	over $1,000,000 none 500,001-1,000,000 over $1,000,000
Equity Income	Brian C. Rogers	over $1,000,000	over $1,000,000
Equity Index 500	Eugene F. Bair	10,001-50,000	50,001-100,000
European Stock 2	Robert A. Revel-Chion James B.M. Seddon	50,001-100,000 10,001-50,000	50,001-100,000 100,001-500,000
Extended Equity Market Index	Eugene F. Bair	1-10,000	50,001-100,000
Financial Services	Michael W. Holton	10,001-50,000	100,001-500,000
Global Stock 2	Robert W. Smith Dean Tenerelli	100,001-500,00 0 none	over $1,000,000 none
Global Technology	Robert N. Gensler	50,001-100,000	500,001-1,000,000
GNMA 2	Connice A. Bavely	none	over $1,000,000
Growth & Income	Anna M. Dopkin	100,001-500,000	500,001-1,000,000
Growth Stock	Robert W. Smith	over $1,000,000	over $1,000,000
Health Sciences	Kris H. Jenner	100,001-500,000	100,001-500,000
High Yield 2	Mark J. Vaselkiv	100,001-500,000	over $1,000,000
Inflation Protected Bond 2	Daniel O. Shackelford	10,001-50,000	500,001-1,000,000
International Bond	Ian D. Kelson	100,001-500,000	100,001-500,000
International Discovery 2	Frances Dydasco 3 Mark J.T. Edwards M. Campbell Gunn 3 Justin Thomson	none 100,001-500,00 0 none 100,001-500,00 0	none 500,001-1,000,000 none 100,001-500,000
International Equity Index 2	Richard T. Whitney	50,001-100,000	over $1,000,000
International Growth & Income 2	Raymond A. Mills, Ph.D.	100,001-500,000	100,001-500,000
International Stock 2	Mark C.J. Bickford-Smith James B.M. Seddon David J.L. Warren	100,001-500,000 100,001-500,00 0 100,001-500,00 0	100,001-500,000 100,001-500,000 100,001-500,000
Japan 2	M. Campbell Gunn 3 David J.L. Warren	none 50,001-100,000	none 100,001-500,000
Latin America 2	Gonzalo Px87 ngaro	100,001-500,000	over $1,000,000
Maryland Short-Term Tax-Free Bond 2	Charles B. Hill	none	500,001-1,000,000
Maryland Tax-Free Bond 2	Hugh D. McGuirk	10,001-50,000	500,001-1,000,000
Maryland Tax-Free Money 2	Joseph K. Lynagh	1-10,000	500,001-1,000,000
Media & Telecommunications	Robert N. Gensler	500,001-1,000,000	500,001-1,000,000
Mid-Cap Growth	Brian W.H. Berghuis	over $1,000,000	over $1,000,000
Mid-Cap Value	David J. Wallack	100,001-500,000	500,001-1,000,000
New America Growth	Joseph M. Milan o	100,001-500,000	500,001-1,000,000
New Asia 2	Frances Dydasco 3 Mark J.T. Edwards	none 100,001-500,00 0	none 500,001-1,000,000
New Era	Charles M. Ober	100,001-500,000	500,001-1,000,000
New Horizons	John H. Laporte	over $1,000,000	over $1,000,000
New Income 2	Daniel O. Shackelford	10,001-50,000	500,001-1,000,000
Personal Strategy Balanced 2	Edmund M. Notzon III	10,001-50,000	500,001-1,000,000
Personal Strategy Growth 2	Edmund M. Notzon III	10,001-50,000	500,001-1,000,000
Personal Strategy Income 2	Edmund M. Notzon III	10,001-50,000	500,001-1,000,000
Prime Reserve 2	James M. McDonald	50,001-100,000	over $1,000,000
Real Estate	David M. Lee	50,001-100,000	500,001-1,000,000
Retirement 2005 2	Jerome A. Clark Edmund M. Notzon III	none none	100,001-500,000 500,001-1,000,000
Retirement 20 10 2	Jerome A. Clark Edmund M. Notzon III	none none	100,001-500,000 500,001-1,000,000
Retirement 2015 2	Jerome A. Clark Edmund M. Notzon III	none none	100,001-500,000 500,001-1,000,000
Retirement 2020 2	Jerome A. Clark Edmund M. Notzon III	none none	100,001-500,000 500,001-1,000,000
Retirement 2025 2	Jerome A. Clark Edmund M. Notzon III	none none	100,001-500,000 500,001-1,000,000
Retirement 2030 2	Jerome A. Clark Edmund M. Notzon III	none none	100,001-500,000 500,001-1,000,000
Retirement 2035 2	Jerome A. Clark Edmund M. Notzon III	100,001-500,000 none	100,001-500,000 500,001-1,000,000
Retirement 2040 2	Jerome A. Clark Edmund M. Notzon III	none none	100,001-500,000 500,001-1,000,000
Retirement Income 2	Jerome A. Clark Edmund M. Notzon III	none none	100,001-500,000 500,001-1,000,000
S cience & Technology	Michael F. Sola	50,001-100,000	over $1,000,000
Short-Term Bond 2	Edward A. Wiese	50,001-100,000	over $1,000,000
Small-Cap Stock	Gregory A. McCrickard	100,001-500,000	over $1,000,000
Small-Cap Value	Preston G. Athey	over $1,000,000	over $1,000,000
Spectrum Growth	Edmund M. Notzon III	100,001-500,000	500,001-1,000,000
Spectrum Income	Edmund M. Notzon III	10,001-50,000	500,001-1,000,000
Spectrum International	Mark C.J. Bickford-Smith Brian C. Rogers David J.L. Warren	none none none	100,001-500,000 over $1,000,000 100,001-500,000
Summit Cash Reserves 2	James M. McDonald	10,001-50,000	over $1,000,000
Summit GNMA 2	Connice A. Bavely	none	over $1,000,000
Summit Municipal Income 2	Konstantine B. Mallas	10,001-50,000	500,001-1,000,000
Summit Municipal Intermediate 2	Charles B. Hill	none	500,001-1,000,000
Summit Municipal Money Market 2	Joseph K. Lynagh	none	500,001-1,000,000
Tax-Efficient Balanced 2	Hugh D. McGuirk Donald J. Peters	1-10,000 100,001-500,000	500,001-1,000,000 over $1,000,000
Tax-Efficient Growth 2	Donald J. Peters	over $1,000,000	over $1,000,000
Tax-Efficient Multi-Cap Growth 2	Donald J. Peters	100,001-500,000	over $1,000,000
Tax-Exempt Money 2	Joseph K. Lynagh	none	500,001-1,000,000
Tax-Free High Yield 2	James M. Murphy	10,001-50,000	100,001-500,000
Tax-Free Income 2	Mary J. Miller	100,00 1 -500,000	over $1,000,000
Tax-Free Intermediate Bond 2	Charles B. Hill	none	500,001-1,000,000
Tax-Free Short-Intermediate 2	Charles B. Hill	none	500,001-1,000,000
Total Equity Market Index	Ann M. Holcomb	none	100,001-500,000
U.S. Bond Index 2	Edmund M. Notzon III	10,001-50,000	500,001-1,000,000
U.S. Treasury Intermediate 2	Cheryl A. Mickel	10,001-50,000	100,001-500,000
U.S. Treasury Long-Term 2	Brian J. Brennan	none	100,001-500,000
U.S. Treasury Money 2	James M. McDonald	none	over $1,000,000
Value	John D. Linehan	100,001-500,000	over $1,000,000

</R>

PAGE 237

PAGE 239

<R>

1 See table on page 6 for the fiscal year of the funds.

</R>

<R>

2 The Range of Fund Holdings is as of December 31, 2004.

</R>

<R>

3 The portfolio manager resides outside the U.S. in a jurisdiction where there are significant legal restrictions on sales to non-U.S. investors.

</R>

<R>

Fund		Range of Fund Holdings as of Fund`s Fiscal Year ( u nless o therwise i ndicated 1 )	All Funds Range as of 12/31/04
	Portfolio Manager
Institutional Emerging Markets Equity 2	Christopher D. Alderson Frances Dydasco 5 Mark J.T. Edwards Gonzalo Px87 ngaro David J.L. Warren	none none none none none	over $1,000,000 none 500,001-1,000,000 over $1,000,000 100,001-500,000
Institutional Foreign Equity 2	Mark C.J. Bickford-Smith James B.M. Seddon David J.L. Warren	none none none	100,001-500,000 100,001-500,000 100,001-500,000
Institutional Core Plus 2	Brennan J. Brennan	none	100,001-500,000
Institutional High Yield 2	Mark J. Vaselkiv	none	over $1,000,000
Institutional Large-Cap Core Growth	Larry J. Puglia	none	over $1,000,000
Institutional Large-Cap Growth	Robert W. Sharps	none	500,001-1,000,000
Institutional Large-Cap Value	John D. Linehan	none	over $1,000,000
Institutional Mid-Cap Equity Growth	Brian W.H. Berghuis	none	over $1,000,000
Institutional Small-Cap Stock	Gregory A. McCrickard	none	over $1,000,000

</R>

The following funds may be purchased only by institutional investors.

</R>

<R>

1 See table on page 6 for the fiscal year of the funds.

</R>

<R>

2 The Range of Fund Holdings is as of December 31, 2004.

</R>

<R>

</R>

<R>

The following funds are designed as investment options for insurance companies issuing variable annuity or variable life insurance contracts. Variable life insurance contracts may not be suitable investments for these portfolio managers. <R>

Fund		Range of Fund Holdings as of Fund`s Fiscal Year (12/31/04)	All Funds Range as of 12/31/04
	Portfolio Manager
Blue Chip Growth Portfolio	Larry J. Puglia	none	over $1,000,000
Equity Income Portfolio	Brian C. Rogers	none	over $1,000,000
Equity Index 500 Portfolio	Eugene F. Bair	none	50,001-100,000
Health Sciences Portfolio	Kris H. Jenner	none	100,001-500,000
International Stock Portfolio	Mark C.J. Bickford-Smith James B.M. Seddon David J.L. Warren	none none none	100,001-500,000 100,001-500,000 100,001-500,000
Limited-Term Bond Portfolio	Edward A. Wiese	none	over $1,000,000
Mid-Cap Growth Portfolio	B r i an W.H. Berghuis	none	over $1,000,000
New America Growth Portfolio	Joseph M. Milano	none	500,001-1,000,000
Personal Strategy Balanced Portfolio	Edmund M. Notzon III	none	500,001-1,000,000
Prime Reserve Portfolio	James M. McDonald	none	over $1,000,000

</R>

The following funds are designed for persons residing in the indicated state. The portfolio managers reside in Maryland. <R>

Fund		Range of Fund Holdings as of Fund`s Fiscal Year ( u nless o therwise i ndicated 1 )	All Funds Range as of 12/31/04
	Portfolio Manager
California Tax-Free Bond 2	Konstantine B. Mallas	none	500,001-1,000,000
California Tax-Free Money 2	Joseph K. Lynagh	none	500,001-1,000,000
Florida Intermediate Tax-Free 2	Charles B. Hill	none	500,001-1,000,000
Georgia Tax-Free Bond 2	Hugh D. McGuirk	none	500,001-1,000,000
New Jersey Tax-Free Bond 2	Konstantine B. Mallas	none	500,001-1,000,000
New York Tax-Free Bond 2	Konstantine B. Mallas	none	500,001-1,000,000
New York Tax-Free Money 2	Joseph K. Lynagh	none	500,001-1,000,000
Virginia Tax-Free Bond 2	Hugh D. McGuirk	none	500,001-1,000,000

</R>

<R>

1 See table on page 6 for the fiscal year of the funds.

</R>

2 The Range of Fund Holdings is as of December 31, 2004.

<R>

Portfolio Manager Compensation

</R>

<R>

Portfolio manager compensation consists primarily of a base salary, a cash bonus, and an equity incentive that usually comes in the form of a stock option grant. Occasionally, portfolio managers will also have the opportunity to participate in venture capital partnerships. Compensation is variable and is determined based on the following factors.

</R>

<R>

Investment performance over 1-, 3-, 5-, and 10-year periods is the most important input. We evaluate performance in absolute, relative, and risk-adjusted terms. Relative performance and risk-adjusted performance are determined with reference to the broad-based index (e.g., S&P 500) and the Lipper index (e.g., Large-Cap Growth) set forth in the fund`s prospectus, though other benchmarks may be used as well. Investment results are also measured against comparably managed funds of competitive investment management firms. These comparable funds are approved by our Investment Steering Committees and are the same ones presented to our mutual fund directors in their regular review of fund performance. Performance is primarily measured on a pretax basis though tax efficiency is considered and is especially important for the Tax-Efficient Funds. Compensation is viewed with a long-term time horizon. The more consistent a manager`s performance over time, the higher the compensation opportunity. The increase or decrease in a fund`s assets due to the purchase or sale of fund shares is not considered a material factor. In reviewing relative performance for fixed-income funds, a fund`s expense ratio is usually taken into account.

</R>

PAGE 241

<R>

Contribution to our overall investment process is an important consideration as well. Sharing ideas with other portfolio managers, working effectively with and mentoring our younger analysts, and being good corporate citizens are important components of our long-term success and are highly valued.

</R>

<R>

All employees of T. Rowe Price, including portfolio managers, participate in a 401(k) plan sponsored by T. Rowe Price Group. In addition, all employees are eligible to purchase T. Rowe Price common stock through an employee stock purchase plan that features a limited corporate matching contribution. Eligibility for and participation in these plans is on the same basis as for all employees. Finally, all vice presidents of T. Rowe Price Group, including all portfolio managers, receive supplemental medical/hospital reimbursement benefits.

</R>

<R>

This compensation structure is used for all portfolios managed by the portfolio manager.

</R>

<R>

Conflicts of Interest

</R>

<R>

Portfolio managers at T. Rowe Price typically manage multiple accounts. These accounts may include, among others, mutual funds, separate accounts (assets managed on behalf of institutions such as pension funds, colleges and universities, foundations), and commingled trust accounts. Portfolio managers make investment decisions for each portfolio based on the investment objectives, policies, practices and other relevant investment considerations that the managers believe are applicable to that portfolio. Consequently, portfolio managers may purchase (or sell) securities for one portfolio and not another portfolio. T. Rowe Price has adopted brokerage and trade allocation policies and procedures which it believes are reasonably designed to address any potential conflicts associated with managing multiple accounts for multiple clients. Also, as disclosed under the "Portfolio Manager`s Compensation" section, our portfolio managers` compensation is determined in the same manner with respect to all portfolios managed by the portfolio manager. Please see the "Portfolio Transactions" section of this Statement of Additional Information for more information on our brokerage and trade allocation policies.

</R>

PRINCIPAL HOLDERS OF SECURITIES

<R>

As of January 31, 2005 , the directors and officers of the funds, as a group, owned less than 1% of the outstanding shares of any fund.

</R>

<R>

As of January 31, 2005 , the following shareholders of record owned more than 5% of the outstanding shares of the indicated funds and/or classes.

</R>

<R>

Fund	Shareholder	%
Balanced	T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department P.O. Box 17215 Baltimore, Maryland 21297-1215	52. 10 (c)
Blue Chip Growth	Pirateline & Co. T. Rowe Price Associates Attn.: Fund Accounting Department 100 East Pratt Street Baltimore, Maryland 21202-1009 T. Rowe Price Retirement Plan Services TR Blue Chip Growth Fund Attn.: Asset Reconciliations P.O. Box 17215 Baltimore, Maryland 21297-1215	5. 57 3 5. 8 8 (b)
Blue Chip Growth Fund — Advisor Class	John Hancock Life Insurance Company USA Attn.: Laura Ross SRS Accounting 250 Bloor Street East 7E Floor Toronto Ontario Canada M4W1E5	82.10 (a)
Blue Chip Growth Fund — R Class	American United Life Separate Account II Attn.: Dan Schluge P.O. Box 1995 Indianapolis, Indiana 46206-9102 Nationwide Trust Company FSB c/o IPO Portfolio Accounting P.O. Box 182029 Columbus, Ohio 43218-2029 T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement BCR, #493 P.O. Box 17215 Baltimore, Maryland 21297-1215	1 5.09 1 3. 7 0 58.47 ( b )
California Tax-Free Money	Georgette O`Connor Day TR Georgette O`Connor Day Trust 301 North Bundy Drive Los Angeles, California 90049-2827	7. 35
Capital Appreciation	Charles Schwab & Co., Inc. Reinvest Account Attn.: Mutual Fund Department 101 Montgomery Street San Francisco, California 94104-4122 National Financial Services for the Exclusive Benefit of Our Customers 200 Liberty Street One World Financial Center, 4th Floor New York, New York 10281-1003 T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	8. 71 7.45 11. 00
Capital Appreciation Fund — Advisor Class	T. Rowe Price Associates Attn.: Financial Reporting Department 100 East Pratt Street Baltimore, Maryland 21202-1009	100.00 (a)
Capital Opportunity	TRP Finance, Inc. 802 West Street Suite 301 Wilmington, Delaware 19801-1526 Trustees of T. Rowe Price U.S. Retirement Program Attn.: Financial Reporting Department P.O. Box 89000 Baltimore, Maryland 21289-0001	5. 85 5. 46
Capital Opportunity Fund — Advisor Class	T. Rowe Price Associates Attn.: Financial Reporting Department	100.00 (a)
Capital Opportunity Fund — R Class	T. Rowe Price Associates Attn.: Financial Reporting Department	100.00 (a)
Corporate Income	Yachtcrew & Co. T. Rowe Price Associates Attn.: Fund Accounting Department 100 East Pratt Street Baltimore, Maryland 21202-1009	4 7.04 (d)
Developing Technologies	Trustees of T. Rowe Price U.S. Retirement Program Attn.: Financial Reporting Department	8.66
Dividend Growth	T. Rowe Price Trust Company, Inc. Dividend Growth Fund (DGF) Attn.: Asset Reconciliation P.O. Box 17215 Baltimore, Maryland 21297-1215	17. 46
Emerging Europe & Mediterranean	National Financial Services LLC for the Exclusive Benefit of Our Customers	10.79
Emerging Markets Bond	Yachtcrew & Co.	3 1.93 (d)
Emerging Markets Stock	Charles Schwab & Co., Inc. Pirateline & Co. T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	10. 74 1 4.55 7. 43
Equity Income	T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	21. 8 1
Equity Income Fund — Advisor Class	John Hancock Life Insurance Company USA National Financial Services for the Exclusive Benefit of Our Customers	17. 4 0 54.60 (a)
Equity Income Fund — R Class	American United Life Nationwide Trust Company FSB c/o IPO Portfolio Accounting P.O. Box 182029 Columbus, Ohio 43218-2029 Prudential Retirement Insurance & Annuity Company Omnibus Account Attn.: Hector Flores 280 Trumbull Street Hartford, Connecticut 06103-3509 T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement EIR, #471 P.O. Box 17215 Baltimore, Maryland 21297-1215 Unified Trust Company NA Attn.: Christina Redmon 2353 Alexandria Drive, Suite 100 Lexington, Kentucky 40504-3208	8.6 4 12. 14 7.83 5.14 17.98
Equity Index 500	T. Rowe Price Trust Company, Inc. Attn.: RPS Control Department 10090 Red Run Boulevard Owings Mills, Maryland 21117-4842	29.65 (c)
European Stock	Charles Schwab & Co., Inc.	9.48
Extended Equity Market Index	T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	2 2.27
Financial Services	Charles Schwab & Co., Inc.	6. 33
Global Stock	T. Rowe Price Retirement Plan Services, Inc. Omnibus Plan Install Team for #113 P.O. Box 17215 Baltimore, Maryland 21297-1215	14. 7 3
GNMA	Yachtcrew & Co.	40.17 (d)
Government Reserve Investment	Barnaclesail c/o T. Rowe Price Associates Attn.: Mid-Cap Growth Fund 100 East Pratt Street Baltimore, Maryland 21202-1009 Mainbody & Co. c/o T. Rowe Price Associates Attn.: GNMA Fund 100 East Pratt Street Baltimore, Maryland 21202-1009 T. Rowe Price Retirement Plan Services, Inc. Attn.: RPS Cash Group 4555 Painters Mill Road Owings Mills, Maryland 21117-4903	56.57 (a) 20.33 10.57
Growth & Income	T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	27.75 (c)
Growth Stock	Pirateline & Co. Saxon and Co. Omnibus Account P.O. Box 7780-1888 Philadelphia, Pennsylvania 19182-0001 T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	5. 03 6. 54 18. 37
Growth Stock Fund — Advisor Class	National Financial Services for the Exclusive Benefit of Our Customers PFPC Brokerage Inc. PFPC Wrap Services FBO Neuberger Berman 760 Moore Road King of Prussia, P ennsylvania 19406-1212 U.S. Bank FBO Private Asset Department O A Platform P.O. Box 1787 Milwaukee, Wisconsin 53201-1787	42.02 (a) 6.85 9.38
Growth Stock Fund — R Class	American United Life Nationwide Trust Company FSB Suntrust Bank TR FBO Checkfree Services Corporation 401(k) c/o FASCORP Record Keeper 8515 East Orchard Road Attn.: 2T2 Greenwood Village, Colorado 80111-5002 Suntrust Bank TR FBO Florida Rock Industries Inc. PS & Def e r red Earnings Pl c/o FASCORP 8515 East Orchard Road Attn.: 2T2 Englewood, Colorado 80111-5002	12.74 10.89 8.72 20.95
Health Sciences	John Hancock Life Insurance Company USA	8. 1 0
High Yield	SEI Private Trust Co. Attn.: Mutual Funds c/o Mellon Bank One Freedom Valley Drive Oaks, Pennsylvania 19456 Yachtcrew & Co.	5. 01 24.96
High Yield Fund — Advisor Class	National Financial Services for the Exclusive Benefit of Our Customers	90.01 (a)
Institutional Core Plus	TRP Finance, Inc.	100.00(a)
Institutional Emerging Markets Equity	Harris Trust & Savings Bank Agent for Various Trust/ Custodian Accounts Cash Account Mutual Funds Unit P.O. Box 71940 Chicago, Illinois 60694-1940 Harris Trust & Savings Bank Agent for Various Trust/ Custodian Accounts Reinvest Account Mutual Funds Unit P.O. Box 71940 Chicago, Illinois 60694-1940 Mercantile Safe Deposit & Trust Co. Custodian FBO Abell Foundation Attn.: Mutual Funds 766 Old Hammonds Ferry Road Linthicum, Maryland 21090-2112 Schering-Plough Corp. Post Retirement Trust c/o Gary Karlin One Giralda Farms Madison, New Jersey 07940-1010 TRP Finance, Inc. 802 West Street Suite 301 Wilmington, Delaware 19801-1526	57.67(a) 1 2. 43 6.35 9.18 7.86
Institutional Foreign Equity	Northern Trust Company TR As Custodian for the Reform Pension Board Attn.: Mutual Funds Department P.O. Box 92956 Chicago, Illinois 60675-2956 Smithsonian Institution Ms. Debra Winstead Tony Moceri 3 Chase Metrotech Center 5th Floor Brooklyn, New York 11245-0001 State of Nebraska Investment Council Fund K957 Moderate Pre-Mix Fund 941 "O" Street, Suite 500 Lincoln, Nebraska 68508-3625 State Street Bank & Trust Company Trustee Glaxo S mith K line Retirement Savings Plan P. O. Box 351 Boston, Massachuset ts 02101-0351 T. Rowe Price Trust Company TTEE Balanced Fund Employee Profit Sharing Retirement Plan of Winn Dixie Stores, Inc. Attn.: Guido Stu b enrauch 100 E. Pratt Street Baltimore, Maryland 21202-1009	5.69 7.20 7.85 6.59 5. 89
Institutional High Yield	Bread & Co. c/o T. Rowe Price Associates Attn.: Balanced Fund 100 East Pratt Street Baltimore, Maryland 21202-1009 Ladybug & Co. c/o T. Rowe Price Associates Attn.: Personal Strategy Balanced Fund 100 East Pratt Street Baltimore, Maryland 21202-1009 Northern Trust Co mpany T R FBO Avaya P.O. Box 92956 Chicago, Illinois 60675-2956 State Street Bank & Trust Co. Trust For Defined Benefit Plans of Zeneca Holdings Inc. Attn.: Robert Skinner One Enterprise Drive, W5C North Quincy, Massachusetts 02171-2126	2 6.64(a) 7 . 69 10.78 12.51
Institutional Large-Cap Core Growth	Post & Co. c/o The Bank of New York Mutual Fund Reorg Department, 6th Floor P.O. Box 1066 Wall Street Station New York, New York 10268-1066 TRP Finance, Inc. TRUCOJO Nominee for the Trust Company of St. Joseph Trust Accounts P.O. Box 846 St. Joseph, Missouri 64502-0846 The Jewish Foundation of Cincinnati 8044 Montgomery Road, Suite 700 Cincinnati, Ohio 45236-2926	58. 14 (a) 7.4 5 5. 4 4 28. 9 7 (a)
Institutional Large-Cap Growth	Aage V. Jensen Charity Foundation c/o Mette Fabricius Skov 2 Clumps Road Farnham GU10 3HF UK Episcopal Community Services of the Diocese of Pennsylvania Attn.: Arthur J. Eyre 225 South 3rd Street Philadelphia, Pennsylvania 19106-3910 J.P. Morgan TR Allen & Co. 3 Chase Metrotech Center, 6th Floor Brooklyn, New York 11245-0001 National Merit Scholarship Corporation 1560 Sherman Avenue Suite 200 Evanston, Illinois 60201-4816 Reinco P.O. Box 1930 Honolulu, Hawaii 96805-1930 Wave Board & Co. c/o State Street Bank and Trust Attn.: Rob Spencer 1 Enterprise Drive, #W3A Quincy, Massachusetts 02171-2126	12.08 14.94 10.19 24.87 10.40 13.89
Institutional Large-Cap Value	Aage V. Jensen Charity Foundation Carey & Co. c/o Huntington Trust Co. 7 Easton Oval Columbus, Ohio 43219-6010 Episcopal Community Services of the Diocese of Pennsylvania Fidelity Management TR FBO Retirement Savings Plan for Pilots of US Airways Inc. 82 Devonshire Street Z1M Boston, Massachusetts 02109-3614 J.P. Morgan TR Allen & Co. Penco The Bank of Kentucky 111 Lookout Farm Drive P.O. Box 17540 Covington, Kentucky 41017-0540 Wells Fargo Bank NA FBO Western Administrative P.O. Box 1533 Minneapolis, Minnesota 55480-1533	7. 1 0 29. 12 (a) 8.78 12. 81 6.97 7. 11 20. 00
Institutional Mid-Cap Equity Growth	Bank of New York TR FBO Arch Coal Pension Plan Attn.: Tom Campbell One Wall Street, 12th Floor New York, New York 10286-0001 U.S. Bank FBO Land O Lakes Retirement Trust Mutual Funds Department P.O. Box 1787 Milwaukee, Wisconsin 53201-1787	5. 22 5. 71
Institutional Small-Cap Stock	Northern Trust Company TR Illinois Tool Works Pension Trust Attn.: Felix Rodriquez 3600 West Lake Avenue Glenview, Illinois 6002 6 -1215 Sigler & Co. Custodian Smithsonian Institution Tony Moceri 3 Chase Metrotech Center, 5th Floor Brooklyn, New York 11245-0001 State Street Trust & Banking Company Shirovama JT Trust Tower 4-3-1 Toranomon Minato-Ku Tokyo, Japan 105-6014	12.41 16.45 15. 99
International Bond	Charles Schwab & Co., Inc. National Financial Services for the Exclusive Benefit of Our Customers Yachtcrew & Co.	1 2.40 5.08 3 3.30 (d)
International Bond Fund — Advisor Class	Citigroup Global Markets Inc. 333 West 34th Street, 3rd Floor New York, New York 10001-2402 National Financial Services for the Exclusive Benefit of Our Customers Smith Barney Corp Trust Company TR Smith Barney 401(k) Advisor Group c/o Citistreet Two Tower Center P.O. Box 1063 East Brunswick, New Jersey 08816-1063	41.42 (a) 27.86 (a) 17.94
International Discovery	T. Rowe Price Retirement Plan Services, Inc. Attn.: Asset Reconciliation P.O. Box 17215 Baltimore, Maryland 21297-1215 Vanguard Fiduciary Trust Company T. Rowe Price Retail Class Funds Attn.: Outside Funds P.O. Box 2600 VM 613 Valley Forge, Pennsylvania 19482-2600	6. 49 7. 89
International Equity Index	T. Rowe Price Retirement Plan Services, Inc. Omnibus Plan New Business-Conv. Assets #13 5 IXF P.O. Box 17215 Baltimore, Maryland 21297-1215	8.60
International Growth & Income	Pirateline & Co. Retirement Portfolio 2010 T. Rowe Price Associates Attn.: Fund Accounting Department 100 East Pratt Street Baltimore, Maryland 21202-1009 Retirement Portfolio 2020 T. Rowe Price Associates Attn.: Fund Accounting Department 100 East Pratt Street Baltimore, Maryland 21202-1009 Retirement Portfolio 2030 T. Rowe Price Associates Attn.: Fund Accounting Department 100 East Pratt Street Baltimore, Maryland 21202-1009	27.48 (e) 7. 62 10. 99 7. 72
International Growth & Income Fund — Advisor Class	U.S. Bank FBO Private Asset Department OA Platform	97.82 (a)
International Growth & Income Fund — R Class	American United Life	68.32 (a)
I n ternational Stock	Pirateline & Co. T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	5.03 1 6 . 7 0
International Stock Fund — Advisor Class	Citigroup Global Markets Inc. 333 West 34th Street, 3rd Floor New York, New York 10001-2402	22.64
International Stock Fund — R Class	American United Life T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement ISR, #437 P.O. Box 17215 Baltimore, Maryland 21297-1215	8.3 3 70.50 ( b )
Japan	Bobstay & Co. T. Rowe Price Associates Attn.: Fund Accounting Department 100 East Pratt Street Baltimore, Maryland 21202-1009 Charles Schwab & Co., Inc.	5.19 7.68
Latin America	Charles Schwab & Co., Inc. Wilmington Trust Co. TR FBO Continental Airlines Inc. DCP Plan c/o Mutual Funds P.O. Box 8971 Wilmington, Delaware 19899-8971	6.77 7. 40
Maryland Short-Term Tax-Free Bond	Charles Schwab & Co., Inc.	5. 75
Media & Telecommunications	Charles Schwab & Co., Inc. T. Rowe Price Trust Company, Inc. Media & Telecommunications Fund DST #121 P.O. Box 17215 Baltimore, Maryland 21297-1215	5. 0 8 7.84
Mid-Cap Growth	Charles Schwab & Co., Inc. T. Rowe Price Trust Company, Inc. Attn.: Asset Reconciliations P.O. Box 17215 Baltimore, Maryland 21297-1215	8. 25 17. 52
Mid-Cap Growth Fund — Advisor Class	MITRA & Company 1000 N. Water Street Attn.: Exp Mutual Funds Milwaukee, Wisconsin 53202-6648 National Financial Services for the Exclusive Benefit of Our Customers U.S. Bank FBO Private Asset Department OA Platform Vanguard Fiduciary Trust Company T. Rowe Price Advisor Class Funds Attn.: Outside Funds P.O. Box 2900 VM 613 Valley Forge, Pennsylvania 19482-2900 Wells Fargo Bank NA FBO R P S T. Rowe Price Mid-Cap Growth P.O. Box 1533 Minneapolis, Minnesota 55480-1533	6.09 17.65 5.0 6 7.76 5. 18
Mid-Cap Growth Fund — R Class	ING Life Insurance and Annuity Company 151 Farmington Avenue Hartford, Connecticut 06156-0001 Nationwide Trust Company FSB ReliaStar Life Insurance Company 151 Farmington Avenue #TN41 Hartford, Connecticut 06156-0001 T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement MGR, #464 P.O. Box 17215 Baltimore, Maryland 21297-1215	17. 34 14.68 15. 16 5. 7 2
Mid-Cap Value	Charles Schwab & Co., Inc. National Financial Services for the Exclusive Benefit of Our Customers 200 Liberty Street One Financial Center, 5th Floor New York, New York 10281-1015 T. Rowe Price Retirement Plan Services, Inc. Omnibus Account New Business Group for #115 P.O. Box 17215 Baltimore, Maryland 21297-1215	7. 57 7. 71 5. 57
Mid-Cap Value Fund — Advisor Class	National Financial Services for the Exclusive Benefit of Our Customers U.S. Bank FBO Private Asset Department OA Platform	19.42 8.73
Mid-Cap Value Fund — R Class	American United Life ING Life Insurance and Annuity Company J.P. Morgan Chase TR FBO ADP Mid Market Product Attn.: Lisa Glenn 3 Metrotech Center, 6th Floor Brooklyn, New York 11245-0001 Nationwide Trust Company FSB State Street Bank & TR FBO ADP Daily Valuation B Attn.: Susan McDonough 105 Rosemont Road Westwood, Massachusetts 02090-2318	6.01 7.06 7. 06 12.29 25.66 (a)
New America Growth	T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department Wilmington Trust Co. TR FBO Continental Airlines Inc. DCP Plan c/o Mutual Funds P.O. Box 8971 Wilmington, Delaware 19899-8971	2 4.42 10. 74
New Asia	Charles Schwab & Co., Inc. Reinvest Account Attn.: Mutual Fund Department 101 Montgomery Street San Francisco, California 94104-4122	8.49
New Era	Charles Schwab & Co., Inc.	10.12
New Horizons	Pirateline & Co. T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	6. 90 32.45 (c)
New Income	T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department Yachtcrew & Co.	10.76 35. 79 (d)
New Income Fund — Advisor Class	Oppenheimer & Co. Inc. Custodian for Juan Ramon Perez IRA /Rollover PAS Account 2529 West Apricot Drive Beverly Hills, Florida 34465-3054 T. Rowe Price Associates Attn.: Financial Reporting Department	5.91 8.88
New Income Fund — R Class	AMVESCAP National Trust Company as Agent for VALIC FBO Pieper Bancorp Inc. Profit Sharing Plan P.O. Box 105779 Atlanta, Georgia 30348-5779 Circle Trust Company Custodian FBO Dynamic Data Systems Inc. 401(k) PSP Metro Center One Station Place Stamford, Connecticut 06902-6800 T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement NIR, #443 P.O. Box 17215 Baltimore, Maryland 21297-1215	6. 54 5. 3 5 60.66 ( b )
New York Tax-Free Money	Coleman M. Brandt Grace L. Brandt JT TEN 330 West 72nd Street, Apt. 10A New York, New York 10023-2649	8.70
Personal Strategy Balanced	T. Rowe Price Trust Company, Inc. TR Balanced Attn.: Asset Reconciliation P.O. Box 17215 Baltimore, Maryland 21297-1215	57.64 (c)
Personal Strategy Growth	Hartford Life Insurance Co. Separate Account TK Attn.: David Ten Broeck P.O. Box 2999 Hartford, Connecticut 06104-2999 T. Rowe Price Trust Company, Inc. TR Attn.: Growth Asset P.O. Box 17215 Baltimore, Maryland 21297-1215	5. 33 50.06 (c)
Personal Strategy Income	T. Rowe Price Trust Company, Inc. TR Income Attn.: Asset Reconciliation P.O. Box 17215 Baltimore, Maryland 21297-1215	49.06 (c)
Prime Reserve	T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	15.65
Real Estate	T. Rowe Price Retirement Plan Services, Inc. Omniplan Account Fund 122 RAMS #22 New Business Group Conv Asset #122 P.O. Box 17215 Baltimore, Maryland 21297-1215	8.28
Real Estate Fund — Advisor Class	T. Rowe Price Associates Attn.: Financial Reporting Department	100.00 (a)
Reserve Investment	Covewater & Co. c/o T. Rowe Price Associates Attn.: Mid-Cap Value Fund 100 East Pratt Street Baltimore, Maryland 21202-1009 Oceanoar & Co. c/o T. Rowe Price Associates Attn.: Small-Cap Value Fund 100 East Pratt Street Baltimore, Maryland 21202-1009 Overlap & Co. c/o T. Rowe Price Associates Attn.: Small-Cap Stock Fund 100 East Pratt Street Baltimore, Maryland 21202-1009 Seamile & Co. c/o T. Rowe Price Associates Attn.: Capital Appreciation Fund 100 East Pratt Street Baltimore, Maryland 21202-1009 Taskforce & Co. c/o T. Rowe Price Associates Attn.: Equity Income Fund 100 East Pratt Street Baltimore, Maryland 21202-1009 T. Rowe Price Managed GIC Stable Value Fund T. Rowe Price Associates, Inc. 100 East Pratt Street, 7th Floor Baltimore, Maryland 21202-1009	5. 81 6. 54 9. 33 17.91 13.74 6. 54
Retirement 2005	T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement ABH1 #155 P.O. Box 17215 Baltimore, Maryland 21297-1215	81.29 (b)
Retirement 2010	T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement 2010, #140 P.O. Box 17215 Baltimore, Maryland 21297-1215	62.79 (b)
Retirement 2010 Fund — Advisor Class	Saxon and Co. Scudder Trust Company TR FBO United Business Media 401(k) Plan Asset Reconciliation Department P.O. Box 1757 Salem, New Hampshire 03079-1143 TRUSTlynx & Company P.O. Box 173736 Denver, Colorado 80217-3736 Union Central Life Insurance Co. 1876 Waycross Road, #3 Cincinnati, Ohio 45240-2899	17.20 48.88 (a) 18.13 15.43
Retirement 2010 Fund — R Class	Saxon and Co. T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Merger Retirement MGR, #450 P.O. Box 17215 Baltimore, Maryland 21297-1215	47.67 (a) 14.06
Retirement 2015	T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement ABH2 #156 P.O. Box 17215 Baltimore, Maryland 21297-1215	7 5.74 (b)
Retirement 2020	Mac & Co. Mutual Funds Operations P.O. Box 3198 525 William Penn Place Pittsburgh, Pennsylvania 15219-1707 T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement 2020, #141 P.O. Box 17215 Baltimore, Maryland 21297-1215	5. 18 64.10 (b)
Retirement 2020 Fund — Advisor Class	Saxon and Co. Scudder Trust Company TR FBO United Business Media 401(k) Plan TRUSTlynx & Company Union Central Life Insurance Co.	39.43 (a) 5.14 12.28 42.33 (a)
Retirement 2020 Fund — R Class	Saxon and Co. T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Merger Retirement MGR, #451 P.O. Box 17215 Baltimore, Maryland 21297-1215	51.53 (a) 17.28
Retirement 2025	T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement ABH3 #157 P.O. Box 17215 Baltimore, Maryland 21297-1215	7 6 . 51 (b)
Retirement 2030	T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement 2030, #142 P.O. Box 17215 Baltimore, Maryland 21297-1215	66.43 (b)
Retirement 2030 Fund — Advisor Class	Saxon and Co. Scudder Trust Company TR FBO United Business Media 401(k) Plan Union Central Life Insurance Co.	37.23(a) 27.98 (a) 32.56 (a)
Retirement 2030 Fund — R Class	Saxon and Co. T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Merger Retirement MGR, #452 P.O. Box 17215 Baltimore, Maryland 21297-1215	55.12 (a) 21.74
Retirement 2035	T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement ABH4 #158 P.O. Box 17215 Baltimore, Maryland 21297-1215	77.55 (b)
Retirement 2040	T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement 2040, #143 P.O. Box 17215 Baltimore, Maryland 21297-1215	69.74 (b)
Retirement 2040 Fund — Advisor Class	Saxon and Co. Scudder Trust Company TR FBO United Business Media 401(k) Plan Union Central Life Insurance Co.	47.69 (a) 7 . 59 38.52 (a)
Retirement 2040 Fund — R Class	Saxon and Co. T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Merger Retirement MGR, #453 P.O. Box 17215 Baltimore, Maryland 21297-1215 TRUSTlynx & Company	49.95(a) 30.78 ( b ) 7.67
Retirement Income	T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Retirement Income, #145 P.O. Box 17215 Baltimore, Maryland 21297-1215	35.26 (b)
Retirement Income Fund — Advisor Class	Scudder Trust Company TR FBO United Business Media 401(k) Plan TRUSTlynx & Company	8 2 . 3 6 (a) 1 7 . 6 1
Retirement Income Fund — R Class	TRAC 2000 Shaklee 401 ( k ) Retirement Savings Plan John Yinger 115 Belvedere, Apt. #2 San Francisco, California 94117-3915 T. Rowe Price Retirement Plan Services, Inc. Omnibus Account Merger Retirement MGR, #454 P.O. Box 17215 Baltimore, Maryland 21297-1215	7. 10 80.96(b)
Science & Technology	T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	2 5.04(c)
Science & Technology Fund — Advisor Class	John Hancock Life Insurance Company USA Vanguard Fiduciary Trust Company	87.95 (a) 7.4 7
Short-Term Bond	Yachtcrew & Co.	27.29 (d)
Short-Term Bond Fund — Advisor Class	T. Rowe Price Associates Attn.: Financial Reporting Department	100.00 (a)
Small-Cap Stock	Norwest Bank Company NA TR FBO State of Minnesota Deferred Compensation Plan Minnesota State Deferred Compensation Plan Trust c/o Great West Life Recordkeeper 8515 East Orchard Road Attn.: 2T2 Englewood, Colorado 80111-5002 T. Rowe Price Trust Company, Inc. T. Rowe Price OTC Fund Attn.: RPS Control Department P.O. Box 17215 Baltimore, Maryland 21297-1215	5. 54 17. 63
Small-Cap Stock Fund — Advisor Class	ICMA Retirement Trust 777 North Capitol Street NE, Suite 600 Washington, DC 20002-4240 Minnesota Life 401 Robert Street Saint Paul, Minnesota 55101-2000 Northern Trust Company TR Home Depot Future Builder 401(k) Plan P.O. Box 92994 Chicago, Illinois 60675-2956 Vanguard Fiduciary Trust Company	14.67 21.29 10.12 9.85
Small-Cap Value	T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	27.23 (c)
Small-Cap Value Fund — Advisor Class	ICMA Retirement Trust John Hancock Life Insurance Compan y USA Merrill Lynch Pierce Fenner & Smith Inc. for the Sole Benefit of Its Customers 4800 Deer Lake Drive East Jacksonville, Florida 32246-6484	18.99 48.12 (a) 8 . 44
Spectrum Growth	T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	19.94
Spectrum Income	John Hancock Life Insurance Compan y USA T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	24.94 22. 48
Spectrum International	T. Rowe Price Retirement Plan Services, Inc. Omni p lan Account New Business Group for #08 P.O. Box 17215 Baltimore, Maryland 21297-1215	6.17
Summit Cash Reserves	T. Rowe Price Trust Company, Inc. Attn.: Asset Reconciliations	2 0.32
Summit Municipal Income	National Financial Services for the Exclusive Benefit of O ur Customers 200 Liberty One Financial Center, 4th Floor New York, New York 10281-1015	5. 48
Summit Municipal Intermediate	Charles Schwab & Co., Inc. Prudential Investment Management Services FBO Mutual Funds Clients Attn.: Pruchoice Unit Mail Stop 194-201 194 Wood Avenue S Iselin, New Jersey 08830-2710	6. 93 2 4.25
Summit Municipal Money Market	T. Rowe Price Associates Attn.: Financial Reporting Department T. Rowe Price Group, Inc. Attn.: Financial Reporting Department P.O. Box 89000 Baltimore, Maryland 21289-5076 T. Rowe Price International, Inc. Attn.: Financial Reporting Department 100 East Pratt Street Baltimore, Maryland 21202-1009	3 6.52 (a) 8.13 1 4.28
Tax-Exempt Money	T. Rowe Price Associates Attn.: Financial Reporting Department Pershing Division of DLJ Securities Corporation for Exclusive Benefit of T. Rowe Price Money Fund Customer Accounts 1 Pershing Plaza Jersey City, New Jersey 07399-0002	7.37 5.72
Tax-Free Income Fund — Advisor Class	National Financial Services for the Exclusive Benefit of Our Customers	99.7 2 (a)
Tax-Free Short-Intermediate	Charles Schwab & Co., Inc.	5. 91
U.S. Bond Index	Alaska College Savings Trust ACT Portfolio c/o T. Rowe Price Associates Attn.: Kimberly Vanscoy, Fixed Income 100 East Pratt Street, 7th Floor Baltimore, Maryland 21202-1009 TRP Finance, Inc. T. Rowe Price Retirement Plan Services, Inc. Omnibus Plan New Business-Conv. Assets #134 UBX P.O. Box 17215 Baltimore, Maryland 21297-1215	7.94 6. 12 39. 61 (b)
U.S. Treasury Intermediate	T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	2 1.50
U.S. Treasury Long-Term	T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department Yachtcrew & Co.	11.89 3 9.29 (d)
U.S. Treasury Money	T. Rowe Price Trust Company, Inc. Attn.: TRPS Institutional Control Department	18.05
Value	Northern Trust Company TR FBO Pfizer Savings and Investment Plan P.O. Box 92994 Chicago, Illinois 60675-2994 Pirateline & Co. Retirement Portfolio 2020 Retirement Portfolio 2030 T. Rowe Price Trust Company, Inc. Attn.: Installation Team for TRPS Institutional Control	6.10 7. 85 7.20 5.39 17.40
Value Fund — Advisor Class	Bost & Company FBO Directed Account Plan Mutual Fund Operations P.O. Box 3198 Pittsburgh, Pennsylvania 15230-3198 ING Life Insurance and Annuity Company Minnesota Life	2 0.68 24.67 38.25 (a)

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(a) At the level of ownership indicated, the shareholder would be able to determine the outcome of most issues that are submitted to shareholders for vote.

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( b ) T. Rowe Price Retirement Plan Services, Inc., is a wholly owned subsidiary of T. Rowe Price Associates, Inc., which is a wholly owned subsidiary of T. Rowe Price Group, Inc., each a Maryland corporation. T. Rowe Price Retirement Plan Services is not the beneficial owner of these shares. Such shares are held of record by T. Rowe Price Retirement Plan Services and are normally voted by various retirement plans and retirement plan participants.

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( c ) T. Rowe Price Trust Company is a wholly owned subsidiary of T. Rowe Price Associates, Inc., which is a wholly owned subsidiary of T. Rowe Price Group, Inc., each a Maryland corporation. T. Rowe Price Trust Company is not the beneficial owner of these shares. Such shares are held of record by T. Rowe Price Trust Company and are normally voted by various retirement plans and retirement plan participants.

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(d) Yachtcrew & Co . owns the indicated percentage of the outstanding shares of the fund through the Spectrum Funds. Shares of the fund held by the Spectrum Funds are " echo-voted " by Spectrum Funds in the same proportion as the shares of the fund are voted by its non-Spectrum Fund shareholders.

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(e) Pirateline & Co . owns the indicated percentage of the outstanding shares of the fund through the Spectrum Funds. Shares of the fund held by the Spectrum Funds are " echo-voted " by Spectrum Funds in the same proportion as the shares of the fund are voted by its non-Spectrum Fund shareholders.

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INVESTMENT MANAGEMENT agreements

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T. Rowe Price International, Inc. is the investment manager for all international and foreign funds and has executed an Investment Management Agreement with each such fund. T. Rowe Price Associates, Inc. is the investment manager for all other funds and has executed an Investment Management Agreement with each such fund. T. Rowe Price Associates and T. Rowe Price International are hereinafter referred to as "Investment Managers" . T. Rowe Price Associates is a wholly owned subsidiary of T. Rowe Price Group, Inc. T. Rowe Price International is a wholly owned subsidiary of T. Rowe Price Finance, Inc., which is a wholly owned subsidiary of T. Rowe Price Associates.

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Services

Under the Investment Management Agreement (except for the Japan Fund and the Japanese investments of the International Discovery Fund), the Investment Managers provide the funds with discretionary investment services. Specifically, the Investment Managers are responsible for supervising and directing the investments of the funds in accordance with the funds` investment objectives, programs, and restrictions as provided in the funds` prospectuses and this SAI. The Investment Managers are also responsible for effecting all security transactions on behalf of the funds, including the negotiation of commissions and the allocation of principal business and portfolio brokerage. For the Japan Fund and the Japanese investments of the International Discovery Fund, T. Rowe Price International has entered into a subadvisory agreement with T. Rowe Price Global Investment Services Limited ( " Global Investment Servi ces" ) under which, subject to the supervision of T. Rowe Price International, Global Investment Services provides the same services described above that T. Rowe Price International provides for the other funds .

In addition to the services described above, the Investment Managers provide the funds with certain corporate administrative services, including: maintaining the funds` corporate existence and corporate records; registering and qualifying fund shares under federal laws; monitoring the financial, accounting, and administrative functions of the funds; maintaining liaison with the agents employed by the funds such as the funds` custodian and transfer agent; assisting the funds in the coordination of such agent ` s activities; and permitting employees of the Investment Managers to serve as officers, directors , and committee members of the funds without cost to the funds.

The Investment Management Agreements also provide that the Investment Managers , their directors , officers, employees, and certain other persons performing specific functions for the funds will be liable to the funds only for losses resulting from willful misfeasance, bad faith, gross negligence, or reckless disregard of duty. The su badvisory agreements with respect to the Japan and International Discovery Fund s have a similar provision limiting the liability of Global Investment Services for errors, mistakes , and losses other than those caused by its willful misfeasance, bad faith, or gross negligence .

Under the Investment Management Agreements, the Investment Managers are permitted to utilize the services or facilities of others to provide them or the fund s with statistical and other factual information, advice regarding economic factors and trends, advice as to occasional transactions in specific securities, and such other information, advice , or assistance as the Investment Managers may deem necessary, appropriate, or convenient for the discharge of their obligations under the Investment Management Agreements or otherwise helpful to the fund s. The subadvisory agreement with respect to the Japan and International Discovery Funds ha s a similar provision permitting Global Investment Services to utilize, at its own cost , the services or facilities of others.

All f unds except Index, Institutional, Reserve Investment, Retirement, Spectrum, Summit Income, and Summit Municipal Funds

Management Fee s

The funds pay the Investment Managers 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 the Investment Managers on the first business day of the next succeeding calendar month and is calculated as described next.

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 Price 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:

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

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For the purpose of calculating the Group Fee, the Price Funds include all the mutual funds distributed by Investment Services (excluding the Retirement Funds, Spectrum Funds, Reserve Investment Funds, and any Index 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 each 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. The product of this calculation is multiplied 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 are listed in the following table:

Fund	Fee %
Balanced	0.15 %
Blue Chip Growth	0.30
California Tax-Free Bond	0.10
California Tax-Free Money	0.10
Capital Appreciation	0.30
Capital Opportunity	0. 20
Corporate Income	0.15
Developing Technologies	0.60
Diversified Mid-Cap Growth	0.35
Diversified Small-Cap Growth	0.35
Dividend Growth	0.20
Emerging Europe & Mediterranean	0.75
Emerging Markets Bond	0.45
Emerging Markets Stock	0.75
Equity Income	0.25
European Stock	0.50
Financial Services	0.35
Florida Intermediate Tax-Free	0.05
GNMA	0.15
Georgia Tax-Free Bond	0.10
Global Stock	0.35
Global Technology	0.45
Growth & Income	0.25
Growth Stock	0.25
Health Sciences	0.35
High Yield	0.30
Inflation Protected Bond	0.05
International Bond	0.35
International Discovery	0.75
International Growth & Income	0.35
International Stock	0.35
J apan	0.50
Latin America	0.75
Maryland Short-Term Tax-Free Bond	0.10
Maryland Tax-Free Bond	0.10
Maryland Tax-Free Money	0.10
Media & Telecommunications	0.35
Mid-Cap Growth	0.35
Mid-Cap Value	0.35
New America Growth	0.35
New Asia	0.50
New Era	0.25
New Horizons	0.35
New Income	0.15
New Jersey Tax-Free Bond	0.10
New York Tax-Free Bond	0.10
New York Tax-Free Money	0.10
Personal Strategy Balanced	0.25
Personal Strategy Growth	0.30
Personal Strategy Income	0.15
Prime Reserve	0.05
Real Estate	0.30
Science & Technology	0.35
Short-Term Bond	0.10
Small-Cap Stock	0.45
Small-Cap Value	0.35
Tax-Efficient Balanced	0.20
Tax-Efficient Growth	0.30
Tax-Efficient Multi-Cap Growth	0.35
Tax-Exempt Money	0.10
Tax-Free High Yield	0.30
Tax-Free Income	0.15
Tax-Free Intermediate Bond	0.05
Tax-Free Short-Intermediate	0.10
U.S. Treasury Intermediate	0.05
U.S. Treasury Long-Term	0.05
U.S. Treasury Money	0.00
Value	0.35
Virginia Tax-Free Bond	0.10

Index, Institutional, Reserve Investment, Retirement, Spectrum, Summit Income, and Summit Municipal Funds

The following fund s pay the Investment Managers an annual investment management fee in monthly installments of the amount listed below based on the average daily net asset value of the fund.

Fund	Fee %
Equity Index 500	0. 1 5 %
Institutional Foreign Equity	0.70
Institutional Large-Cap Core Growth	0.55
Institutional Large-Cap Growth	0. 55
Institutional Large-Cap Value	0.5 5
Institutional Mid-Cap Equity Growth	0.60
Institutional Small-Cap Stock	0.65

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The following funds ( "Single Fee Funds" ) pay the Investment Managers a single annual investment management fee in monthly installments of the amount listed below based on the average daily net asset value of the fund .

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Fund	Fee %
Extended Equity Market Index	0.40 %
Institutional Emerging Markets Equity	1.10
Institutional High Yield	0.50
International Equity Index	0.50
Summit Cash Reserves	0.45
Summit GNMA	0.60
Summit Municipal Money Market	0.45
Summit Municipal Intermediate	0.50
Summit Municipal Income	0.50
Total Equity Market Index	0.40
U.S. Bond Index	0 .30

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The Investment Management Agreement between each Single Fee Fund and the Investment Managers provides that the Investment Managers will pay all expenses of each fund`s operations, except interest, taxes, brokerage commissions, and other charges incident to the purchase, sale, or lending of the fund`s portfolio securities, directors` fees and expenses (including counsel fees and expenses), and such non-recurring or extraordinary expenses that may arise, including the costs of actions, suits, or proceedings to which the fund is a party and the expenses the fund may incur as a result of its obligation to provide indemnification to its officers, directors, and agents. However, the Boards for the funds reserve the right to impose additional fees against shareholder accounts to defray expenses which would otherwise be paid by the Investment Managers under the Investment Management Agreement. The Boards do not anticipate levying such charges; such a fee, if charged, may be retained by the funds or paid to the Investment Managers.

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The Fee is paid monthly to the Investment Managers on the first business day of the next succeeding calendar month and is the sum of the Daily Fee accruals for each month. The Daily Fee accrual for any particular day is calculated by multiplying the fraction of one (1) over the number of calendar days in the year by the appropriate Fee. The product of this calculation is multiplied by the net assets of the fund for that day, as determined in accordance with each fund`s prospectus as of the close of business on the previous business day on which the fund was open for business.

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Government Reserve Investment , Reserve Investment , Retirement, and Spectrum Funds

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None of the se funds pay T. Rowe Price an investment management fee.

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Japan Fund

Under a sub advisory agreement between T. Rowe Price International and Global Investment Services approved by the directors of the Japan Fund, Global Investment Services, subject to the supervision of T. Rowe Price International, will manage all the investments of the Japan Fund. For its services, Global Investment Services will receive 60% of the investment management fee received by T. Rowe Price International from the Japan Fund.

International Discovery Fund

Under a sub advisory agreement between T. Rowe Price International and Global Investment Services approved by the directors of the International Discovery Fund, Global Investment Services, subject to the supervision of T. Rowe Price International, will manage the yen-denominated investments of the International Discovery Fund. For its services, Global Investment Services will receive 50% of the investment management fee received by T. Rowe Price International from the International Discovery Fund attributable to the yen-denominated investments of the International Discovery Fund.

Management Fee Compensation

The following table sets forth the total management fees, if any, paid to the Investment Managers by each fund, during the fiscal years indicated:

Fund	Fiscal Year Ended
	2/29/04	2/28/03	2/28/02
California Tax-Free Bond	$1,128 ,000	$ 1,113,000	$ 1,026,000
California Tax-Free Money	403,000	333,000	330,000
Florida Intermediate Tax-Free	415 ,000	391,000	351,000
Georgia Tax-Free Bond	367 ,000	353,000	305,000
Maryland Short-Term Tax-Free Bond	1,023,000	802,000	561,000
Maryland Tax-Free Bond	5,565,000	5,430,000	4,898,000
Maryland Tax-Free Money	336,000	175,000	29,000
New Jersey Tax-Free Bond	640,000	581,000	532,000
New York Tax-Free Bond	978,000	964,000	884,000
New York Tax-Free Money	448 ,000	412,000	423,000
Tax-Efficient Balanced	231,000	231,000	267,000
Tax-Efficient Growth	441 ,000	406,000	489,000
Tax-Efficient Multi-Cap Growth	146 ,000	23,000	17,000
Tax-Exempt Money	2,980,000	3,048,000	3,197,000
Tax-Free High Yield	6,979 ,000	6,947,000	6,882,000
Tax-Free Income(a)	7,315,000	6,904,000	6,701,000
Tax-Free Intermediate Bond	616,000	561,000	473,000
Tax-Free Short-Intermediate	2,462,000	2,180,000	1,821,000
Virginia Tax-Free Bond	1,712 ,000	1,605,000	1,442,000

(a) The fund has two classes of shares. The management fee is allocated to each class based on relative net assets.

Fund	Fiscal Year Ended
	5/31/04	5/31/03	5/31/02
Corporate Income	$ 430,000	$ 297,000	$ 232,000
GNMA	6,366,000	6,528,000	5,287,000
Government Reserve Investment	(a)	(a)	(a)
High Yield(b)	22,485,000	14,527,000	10,173,000
Inflation Protected Bond	131,000	0	(c)
Institutional High Yield	3,407,000	796,000	(c)
New Income(d)	10,947,000	9,469,000	8,361,000
Personal Strategy Balanced	4,412,000	3,071,000	3,775,000
Personal Strategy Growth	3,079,000	1,561,000	1,908,000
Personal Strategy Income	1,390,000	747,000	1,092,000
Prime Reserve	19,470,000	21,177,000	21,485,000
Reserve Investment	(a)	(a)	(a)
Retirement 2005	(a)	(a)	(a)
Retirement 2010	(a)	(a)	(a)
Retirement 2015	(a)	(a)	(a)
Retirement 2020	(a)	(a)	(a)
Retirement 2025	(a)	(a)	(a)
Retirement 2030	(a)	(a)	(a)
Retirement 2035	(a)	(a)	(a)
Retirement 2040	(a)	(a)	(a)
Retirement Income	(a)	(a)	(a)
Short-Term Bond	5,440,000	3,014,000	1,881,000
U.S. Treasury Intermediate	1,315,000	1,404,000	1,001,000
U.S. Treasury Long-Term	951,000	1,094,000	1,147,000
U.S. Treasury Money	3,339,000	3,442,000	3,163,000

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(a) The fund does not pay an investment management fee.

(b) The fund has two classes of shares. The management fee is allocated to each class based on relative net assets.

(d) The fund has three classes of shares. The management fee is allocated to each class based on relative net assets.

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Fund	Fiscal Year Ended
	10/31/0 4	10/31/03	10/31/02
Emerging Europe & Mediterranean	$ 888 ,000	$ 321,000	$87,000
Emerging Markets Stock	5, 2 3 9 ,000	2,173,000	1,793,000
European Stock	6,802 ,000	5,720,000	6,316,000
Global Stock	523 ,000	448,000	359,000
Institutional Emerging Markets Equity ( a )	277 ,000	78,000	( b )
Institutional Foreign Equity	6,645 ,000	8,097,000	11,091,000
International Discovery	8,325 ,000	4,614,000	4,770,000
International Equity Index( a )	171 ,000	73,000	52,000
International Growth & Income(c)	1,823 ,000	198,000	(d)
International Stock(c)	33,994 ,000	30,300,000	39,511,000
Japan	1,543 ,000	915,000	1,085,000
Latin America	2,186 ,000	1,475,000	1,739,000
New Asia	7,214 ,000	4,974,000	5,351,000
Summit Cash Reserves ( a )	13,432 ,000	14,006,000	13,614,000
Summit GNMA ( a )	512 ,000	632,000	593,000
Summit Municipal Income( a )	475 ,000	464,000	429,000
Summit Municipal Intermediate( a )	730 ,000	565,000	506,000
Summit Municipal Money Market( a )	1, 975 ,000	1,320,000	1,030,000
U.S. Bond Index( a )	31 1,000	271,000	180,000

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(a) The fee includes investment management fees and administrative expenses.

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(b) Prior to commencement of operations.

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(d) Due to the fund`s expense limitation in effect at that time, no management fees were paid by the fund to the investment manager.

Fund	Fiscal Year Ended
	12/31/03	12/31/02	12/31/01
Balanced	$ 7,983,000	$ 7,791,000	$ 8,542,000
Blue Chip Growth(a)	36,657,000	35,354,000	41,035,000
Capital Appreciation	13,817,000	10,731,000	7,570,000
Capital Opportunity	431,000	439,000	559,000
Developing Technologies	267,000	12,000	62,000
Diversified Mid-Cap Growth	(b)	(b)	(b)
Diversified Small-Cap Growth	402,000	272,000	480,000
Dividend Growth	3,065,000	3,176,000	3,676,000
Emerging Markets Bond	1,881,000	1,416,000	1,205,000
Equity Income(a)	63,960,000	58,414,000	57,395,000
Equity Index 500	4,775,000	3,708,000	3,554,000
Extended Equity Market Index(c)	351,000	287,000	300,000
Financial Services	2,011,000	1,973,000	2,122,000
Global Technology	512,000	317,000	569,000
Growth & Income	10,016,000	11,391,000	14,691,000
Growth Stock(a)	25,638,000	23,442,000	27,400,000
Health Sciences	5,681,000	5,306,000	5,675,000
Institutional Large-Cap Core Growth	9,000	(b)	(b)
Institutional Large-Cap Growth	52,000	(d)	(d)
Institutional Large-Cap Value	56,000	(d)	(d)
Institutional Mid-Cap Equity Growth	1,835,000	1,731,000	1,704,000
Institutional Small-Cap Stock	2,448,000	2,158,000	1,624,000
International Bond(e)	8,050,000	5,964,000	5,245,000
Media & Telecommunications	3,433,000	3,224,000	4,885,000
Mid-Cap Growth(a)	50,889,000	41,271,000	42,179,000
Mid-Cap Value(a)	8,500,000	5,810,000	2,445,000
New America Growth	5,670,000	6,113,000	8,612,000
New Era	5,957,000	6,008,000	6,414,000
New Horizons	26,921,000	27,637,000	36,074,000
Real Estate	1,201,000	518,000	207,000
Science & Technology(e)	27,233,000	27,433,000	46,472,000
Small-Cap Stock(e)	31,577,000	26,755,000	20,306,000
Small-Cap Value(a)	19,397,000	17,130,000	11,370,000
Spectrum Growth	(f)	(f)	(f)
Spectrum Income	(f)	(f)	(f)
Spectrum International	(f)	(f)	(f)
Total Equity Market Index(c)	912,000	737,000	766,000
Value(e)	8,689,000	8,899,000	8,231,000

(a) The fund has three classes of shares. The management fee is allocated to each class based on relative net assets.

(b) Prior to commencement of operations.

(d) Due to the fund`s expense limitation in effect at that time, no management fees were paid by the fund to the investment manager.

(e) The fund has two classes of shares. The management fee is allocated to each class based on relative net assets.

(f) The fund does not pay an investment management fee.

Expense Limitations and Reimburseme nts

The following chart sets forth contractual expense ratio limitations and the periods for which they are effective. For each, the Investment Manager s ha ve agreed to bear any fund expenses (other than interest, taxes, brokerage,

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and other expenditures that are capitalized in accordance with generally accepted accounting principles and extraordinary expenses) which would cause the fund s ` ratio of expenses to average net assets to exceed the indicated percentage limitation. The expenses borne by the Investmen t M anager s are subject to reimbursement by the fund s through the indicated reimbursement date, provided no reimbursement will be made if it would result in the fund s ` expense ratio s exceeding t heir applicable limitation s . <R>

Fund	Limitation Period	Expense Ratio Limitation	Reimbursement Date
Blue Chip Growth Fund — Advisor Class ( a )	January 1, 200 4 — April 30, 2006	1.05%	April 30 , 200 8
Blue Chip Growth Fund — R Class (b)	May 1 , 200 4 — April 30, 200 6	1.35%	April 30, 200 8
C alifornia Tax-Free Money( c )	March 1, 200 3 — June 30 , 200 5	0.55%	June 30, 2007
Capital Appreciation Fund — Advisor Class	January 1, 2005 — April 30, 2007	1.10%	(g)
Capital Opportunity (d)	May 1, 200 4 — April 30, 200 6	1. 1 5%	April 30, 200 8
Capital Opportunity Fund — Advisor Class	January 1, 2005 — April 30, 2007	1.25%	(g)
Capital Opportunity Fund — R Class	January 1, 2005 — April 30, 2007	1.50%	(g)
Corporate Income( e )	June 1, 200 3 — September 30 , 200 5	0.80%	September 30, 2007
Developing Technologies( f )	May 1, 2005 — April 30, 200 7	1.50 %	April 30, 200 9
Diversified Mid-Cap Growth	December 31, 2003 — April 30, 2006	1.25%	( g )
Diversified Small-Cap Growth (h)	May 1, 200 4 — April 30, 200 6	1.25%	April 30, 200 8
Emerging Europe & Mediterranean ( i )	March 1, 2005 — February 28, 200 7	1.75%	February 28, 200 9
Equity Income Fund — Advisor Class ( j )	January 1, 200 4 — April 30, 200 6	1.00%	April 30, 200 8
Equity Income Fund — R Class (k)	May 1 , 200 4 — April 30, 200 6	1.30%	April 30, 200 8
Equity Index 500( l )	May 1, 200 5 — April 30, 200 6	0.35%	April 30, 200 8
Georgia Tax-Free Bond	March 1, 2001 — February 28, 2003	0.65%	February 28, 2005
Global Stock( m )	November 1, 200 3 — February 28, 200 6	1.20%	February 29 , 200 8
Global Technology( n )	May 1, 2005 — April 30, 200 7	1.50 %	April 30, 200 9
Growth Stock Fund — Advisor Class ( o )	January 1, 200 4 — April 3 0 , 200 6	1.10%	Ap r il 3 0 , 200 8
Growth Stock Fund — R Class (p)	May 1 , 200 4 — April 30, 200 6	1.35%	April 30, 200 8
Inflation Protected Bond (q)	October 1, 200 4 — September 30, 200 6	0.50%	September 30, 200 8
Institutional Large-Cap Core Growth (r)	May 1, 2005 — April 30, 200 7	0.65%	April 30, 200 9
Institutional Large-Cap Growth ( s )	May 1, 2005 — April 30, 2007	0.65%	April 3 0 , 200 9
Institutional Large-Cap Value ( t )	January 1, 200 4 — April 3 0 , 200 6	0.65%	April 3 0 , 200 8
Institutional Small-Cap Stock	January 1, 2002 — December 31, 200 3	0.75%	December 31, 200 5
International Bond Fund — Advisor Class ( u )	January 1, 200 4 — Ap r il 3 0 , 200 6	1.15%	Ap r il 3 0 , 200 8
International Growth & Income	November 1 , 200 2 — February 28, 2005	1.25%	February 28, 2007
International Growth & Income Fund — Advisor Class ( v )	March 1 , 200 4 — February 28, 200 6	1.15%	February 2 9 , 200 8
International Growth & Income Fund — R Class ( w )	March 1 , 200 4 — February 28, 200 6	1.40%	February 2 9 , 200 8
International Stock Fund — Advisor Class ( x )	November 1, 2003 — February 28 , 200 6	1.15%	February 29 , 200 8
International Stock Fund — R Class ( y )	March 1 , 200 4 — February 28, 200 6	1.40%	February 2 9 , 200 8
Maryland Short-Term Tax-Free Bond	March 1, 2001 — February 28, 2003	0.60%	February 28, 2005
Maryland Tax-Free Money ( z )	March 1 , 200 3 — June 30, 2005	0.55%	June 30, 2007
Mid-Cap Growth Fund — Advisor Class ( aa )	January 1, 200 4 — April 3 0 , 200 6	1.10%	Ap r il 3 0 , 200 8
Mid-Cap Growth Fund — R Class (bb)	May 1 , 200 4 — April 30, 200 6	1. 40 %	April 30, 200 8
Mid-Cap Value Fund — Advisor Class (cc)	May 1 , 200 4 — April 30, 200 6	1. 10 %	April 30, 200 8
Mid-Cap Value Fund — R Class (dd)	May 1 , 200 4 — April 30, 200 6	1. 40 %	April 30, 200 8
New Income Fund — Advisor Class (ee)	October 1 , 200 4 — September 30, 200 6	0.90%	September 30, 200 8
New Income Fund — R Class (ff)	October 1 , 200 4 — September 30, 200 6	1.15%	September 30, 200 8
New York Tax-Free Money (gg)	March 1, 200 3 — June 30, 2005	0.55%	June 30, 2007
Personal Strategy Balanced ( hh )	October 1, 200 4 — September 30, 200 6	0.90%	September 30, 200 8
Personal Strategy Growth ( ii )	October 1, 200 4 — September 30, 200 6	1.00%	September 30, 200 8
Personal Strategy Income ( jj )	October 1, 200 4 — September 30, 200 6	0.80%	September 30, 200 8
Real Estate( kk )	January 1, 200 4 — April 3 0 , 200 6	0 . 9 0%	April 3 0 , 200 8
Real Estate Fund — Advisor Class	January 1, 2005 — April 30, 2007	1.20%	(g)
Science & Technology Fund — Advisor Class ( ll )	January 1, 200 4 — April 3 0 , 200 6	1.15%	April 3 0 , 200 8
Short-Term Bond( mm )	October 1, 200 4 — September 30 , 200 6	0.55%	September 30, 200 8
Short-Term Bond Fund — Advisor Class	January 1, 2005 — September 30, 2007	0.85%	(g)
Small-Cap Stock Fund — Advisor Class ( nn )	January 1, 200 4 — April 3 0 , 200 6	1.20%	April 3 0 , 200 8
Small-Cap Value Fund — Advisor Class ( oo )	J anuary 1, 200 4 — April 3 0 , 200 6	1.15%	April 3 0 , 200 8
Tax-Efficient Multi-Cap Growth ( pp )	M arch 1, 200 4 — June 30 , 200 6	1.25%	June 30 , 200 8
Tax-Free Income Fund — Advisor Class ( qq )	July 1 , 200 4 — June 30, 200 6	0.90%	June 30, 200 8
Value Fund — Advisor Class ( rr )	January 1, 200 4 — April 3 0 , 200 6	1.10%	April 3 0 , 200 8

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( a ) The Blue Chip Growth Fund — Advisor Class previously operated under a 1 . 0 5% limitation that expired December 31, 200 3 . The reimbursement period for this limitation extends through December 31 , 200 5 .

(b) The Blue Chip Growth Fund — R Class previously operated under a 1.35% limitation that expired April 30, 2004. The reimbursement period for this limitation extends through April 30, 2006.

( c ) The California Tax-Free Money Fund previously operated under a 0.55% limitation that expired February 28, 200 3 . The reimbursement period for this limitation extends through February 28, 200 5 .

(d) The Capital Opportunity Fund previously operated under a 1.35% limitation that expired April 30, 2004. The reimbursement period for this limitation extends through April 30, 2006.

( e ) The Corporate Income Fund previously operated under a 0.80% limitation that expired May 31, 200 3 . The reimbursement period for this limitation extends through May 31, 200 5 .

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( f ) The Developing Technologies Fund is currently operating under a 1.50% limitation that will expire April 30, 2005 . The reimbursement period for this limitation extends through April 30, 2007 .

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(g) No reimbursement will be made more than three years after any waiver or payment.

(h) The Diversified Small-Cap Growth Fund previously operated under a 1.25% limitation that expired April 30, 2004. The reimbursement period for this limitation extends through April 30, 2006.

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( i ) The Emerging Europe & Mediterranean Fund previously operated under a 1.75% limitation that expired February 28, 2005 . The reimbursement period for this limitation extends through February 28, 2007 .

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( j ) The Equity Income Fund — Advisor Class previously operated under a l.00% limitation that expired December 31, 2003. The reimbursement period for this limitation extends through December 31, 2005.

(k) The Equity Income Fund — R Class previously operated under a 1.30% limitation that expired April 30, 2004. The reimbursement period for this limitation extends through April 30, 2006.

( l ) The Equity Index 500 Fund previously o perated under a 0. 3 5% limitation that expired December 31, 200 3 . The reimbursement period for this limitation extends through December 31, 200 5 .

( m ) The Global Stock Fund previously operated under a 1.20% limitation that expired October 31, 200 3 . The reimbursement period for this limitation extends through October 31, 200 5 .

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( n ) The Global Technology Fund is currently operating under a 1.50% limitation that will expire April 30, 2005 . The reimbursement period for this limitation extends through April 30, 2007 .

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( o ) The Growth Stock Fund — Advisor Class previously operated under a 1 . 10 % limitation that expired December 31, 200 3 . The reimbursement period for this limitation extends through December 31 , 200 5 .

(p) The Growth Stock Fund — R Class previously operated under a 1.35% limitation that expired April 30, 2004. The reimbursement period for this limitation extends through April 30, 2006.

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(q) The Inflation Protected Bond Fund previously operated under a 0.50% limitation that expire d September 30, 2004. The reimbursement period for this limitation extends through September 30, 2006.

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( r ) The Institutional Large-Cap Core Growth Fund is currently operating under a 0.65% limitation that will expire April 30, 2005. The reimbursement period for this limitation extends through April 30, 2007.

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(s) The Institutional Large-Cap Growth Fund is currently operating under a 0.65% limitation that will expire April 30, 2005 . The reimbursement period for this limitation extends through April 30, 2007 .

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( t ) The Institutional Large-Cap Value Fund previously operated under a 0.65% limitation that expired December 31, 200 3 . The reimbursement period for this limitation extends through December 31, 200 5 .

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( u ) The International Bond Fund — Advisor Class previously operated under a 1 . 1 5% limitation that expired December 31, 200 3 . The reimbursement period for this limitation extends through December 31 , 200 5 .

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( v ) The International Growth & Income Fund — Advisor Class previously operated under a 1.15% limitation that expired February 2 9 , 2004. The reimbursement period for this limitation extends through February 28, 2006.

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( w ) The International Growth & Income Fund — R Class previously operated under a 1.40% limitation that expired February 2 9 , 2004. The reimbursement period for this limitation extends through February 28, 2006.

( x ) The International Stock Fund — Advisor Class previously operated under a 1.15% limitation that expired October 31, 2003. The reimbursement period for this limitation extends through October 31, 2005.

( y ) The International Stock Fund — R Class previously operated under a 1. 40 % limitation that expired October 31, 2003. The reimbursement period for this limitation extends through October 31, 2005.

( z ) The Maryland Tax-Free Money Fund previously operated under a 0.55% limitation that expired February 28, 2003. The reimbursement period for this limitation extends through February 28, 2005 .

( aa ) The Mid-Cap Growth Fund — Advisor Class previously operated under a 1.10% limitation that expired December 3 1, 200 3 . The reimbursement period for this limitation extends through December 31, 200 5 .

(bb) The Mid-Cap Growth Fund — R Class previously operated under a 1.40% limitation that expired April 30, 2004. The reimbursement period for this limitation extends through April 30, 2006.

(cc) The Mid-Cap Value Fund — Advisor Class previously operated under a 1.10% limitation that expired April 30, 2004. The reimbursement period for this limitation extends through April 30, 2006.

(dd) The Mid-Cap Value Fund — R Class previously operated under a 1.40% limitation that expired April 30, 2004. The reimbursement period for this limitation extends through April 30, 2006.

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(ee) The New Income Fund — Advisor Class previously operated under a 1.15% limitation that expire d September 30, 2004. The reimbursement period for this limitation extends through September 30, 2006.

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(ff) The New Income Fund — R Class previously operated under a 1.15% limitation that expire d September 30, 2004. The reimbursement period for this limitation extends through September 30, 2006.

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(gg) The New York Tax-Free Money Fund previously operated under a 0.55% limitation that expired February 28, 2003. The reimbursement period for this limitation extends through February 28, 2005.

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(hh) The Personal Strategy Balanced Fund previously operated under a 0.90% limitation that expire d September 30, 2004. The reimbursement period for this limitation extends through September 30, 2006.

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( ii ) The Personal Strategy Growth Fund previously operated under a 1.00% limitation that expire d September 30, 2004. The reimbursement period for this limitation extends through September 30, 2006.

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( jj ) The Personal Strategy Income Fund previously operated under a 0.80% limitation that expire d September 30, 2004. The reimbursement period for this limitation extends through September 30, 2006.

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( kk ) The Real Estate Fund previously operated under a 1.00% limitation that expired December 31, 200 3 . The reimbursement period for this limitation extends through December 31, 200 5 .

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( ll ) The Science & Technology Fund — Advisor Class previously operated under a 1. 15% limitation that expired December 31, 2001. The reimbursement period for this limitation extends through December 31, 2003.

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( mm ) The Short-Term Bond Fund previously operated under a 0.55% limitation that expire d September 30, 2004. The reimbursement period for this limitation extends through September 30, 2006.

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( nn ) The Small-Cap Stock Fund — Advisor Class previously operated under a 1.20% limitation that expired December 31, 200 3 . The reimbursement period for this limitation extends through December 31, 200 5 .

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( oo ) The Small-Cap Value Fund — Advisor Class previously operated under a 1.15% limitation that expired December 31, 200 3 . The reimbursement period for this limitation extends through December 31, 200 5 .

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( pp ) The Tax-Efficient Multi-Cap Growth Fund previously operated under a 1.25% limitation that expired February 2 9 , 200 4 . The reimbursement period for this limitation extends through February 29, 200 6 .

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( qq ) The Tax-Free Income Fund — Advisor Class previously operated under a 0.90% limitation that expire d June 30, 2004. The reimbursement period for this limitation extends through June 30, 2006.

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( rr ) The Value Fund — Advisor Class previously operated under a 1.10% limitation that expired December 31, 200 3 . The reimbursement period for this limitation extends through December 31, 200 5 .

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The Investment Management Agreement s between the funds and the Investment Managers provide that each fund will bear all expenses of its operations not specifically assumed by the Investment Managers.

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For the purpose of determining whether a fund is entitled to expense limitation , the expenses of a fund are calculated on a monthly basis. If a fund is entitled to expense limitation , that month`s advisory fee will be reduced or postponed, with any adjustment made after the end of the year.

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Except for the California and New York F unds, e ach of the above-referenced fund s ` Investment Management Agreement also provides that one or more additional expense limitation periods (of the same or different time

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periods) may be implemented after the expiration of the current expense limitation, and that with respect to any such additional limitation period, the fund s may reimburse the I nvestment M anager s , provided the reimbursement does not result in the fund s ` aggregate expenses exceeding the additional expense limitation. No reimbursement may be made by the California and New York Funds unless approved by shareholders.

California Tax-Free Mone y Fund At February 29, 2004, management fees waived remain subject to repayment by the fund in the amount of $155,000 through February 28, 2005, and $68,000 through June 30, 2007.

Corporate Income Fund At May 31, 2004, management fees waived remain subject to repayment by the fund in the following amounts: $213,000 through May 31, 2005 and $97,000 through September 30, 2007 .

Developing Technologies Fund At December 31, 2003, management fees waived and expenses previously reimbursed by the manager remain subject to repayment by the fund in the amount of $374,000 through December 31, 2004, and $126,000 through April 30, 2007.

Diversified Small-Cap Growth Fund At December 31, 2003, management fees waived remain subject to repayment by the fund in the amount of $251,000 through April 30, 2006.

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Emerging Europe & Mediterranean Fund At October 31, 200 4 , management fees waived in the amount of $74,000 remain subject to repayment by the fund through February 28, 2007 .

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Equity Index 500 Fund At December 31, 2003, management fees waived remain subject to repayment by the fund in the following amounts: $2,689,000 through December 31, 2004, and $1,304,000 through December 31, 2005.

Georgia Tax-Free Bond Fund At February 29, 2004, management fees waived remain subject to repayment by the fund in the amount of $4,000 through February 28, 2005.

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Global Stock Fund At October 31, 200 4 , management fees waived remain subject to repayment by the fund in the following amount s : $277,000 through October 31, 2005 , and $82,000 through February 29, 2008 .

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Global Technology Fund At December 31, 2003, management fees waived remain subject to repayment by the fund in the following amounts: $370,000 through December 31, 2004 , and $130,000 through April 30, 2007.

Inflation Protected Bond Fund At May 31, 2004, management fees waived and expenses previously reimbursed by the manager in the amount of $340,000 remain subject to repayment by the fund through September 30, 2006 .

Institutional Large-Cap Growth Fund At December 31, 2003, management fees waived and expenses previously reimbursed by the manager remain subject to repayment by the fund in the following amounts: $133,000 through December 31, 2004, and $110,000 through April 30, 2007.

Institutional Large-Cap Value Fund At December 31, 2003, management fees waived and expenses previously reimbursed by the manager remain subject to repayment by the fund in the amount of $218,000 through December 31, 2005.

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International Growth & Income Fun d , International Growth & Income Fund — Advisor and R Class At October 31, 200 4 , expenses previously reimbursed by the manager remain subject to repayment in the following amounts: $ 19 ,000 through February 28, 2006, $ 55 ,000 through February 28, 2007 , and $16,000 through February 29, 2008 .

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International Stock Fund — Advisor and R Class At October 31, 200 4 , expenses previously reimbursed by the manager remain subject to repayment in the following amount s : $ 2 ,000 through February 28, 2006 , and $1,000 through February 29, 2008 , for the R Class . For the year ended October 31, 200 4 , the Advisor Class operated below its expense limitation.

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Maryland Tax-Free Money Fund At February 29, 2004, management fees waived remain subject to repayment by the fund in the following amounts: $166,000 through February 28, 2005, $63,000 through June 30, 2007.

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New Income Fund — Advisor and R Class At May 31, 2004, expenses previously reimbursed by the manager in the amount of $8,000 remain subject to repayment through September 30, 2006.

New York Tax-Free Money Fund At February 29, 2004, management fees waived remain subject to repayment by the fund in the following amounts: $118,000 through February 28, 2005 , and $60,000 through June 30, 2007.

Personal Strategy Balanced Fund At May 31, 2004, management fees waived in the amount of $984,000 remain subject to repayment by the fund through September 30, 2006 .

Personal Strategy Growth Fund At May 31, 2004, management fees waived in the amount of $667,000 remain subject to repayment by the fund through September 30, 2006 .

Personal Strategy Income Fund At May 31, 2004, management fees waived in the amount of $791,000 remain subject to repayment by the fund through September 30, 2006 .

Real Estate Fund At December 31, 2003, management fees waived in the amount of $122,000 remain subject to repayment by the fund through December 31, 2005.

Short-Term Bond Fund At May 31, 2004, management fees waived in the amount of $1,704,000 remain subject to repayment by the fund through September 30, 2006 .

Tax-Efficient Multi-Cap Growth Fund At February 29, 2004, management fees waived remain subject to repayment by the fund in the amount of $170,000 through February 28, 2006.

Approval of Investment Management Agreements

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The Investment Management Agreements of the funds are reviewed each year by the B oards to determine whether the agreements should be renewed or not. Renewal of the agreements requires the majority vote of the B oard s, including a majority of the independent directors.

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In approving the continuation of the I nvestment M anagement A greements for each fund for the current year, the Boards reviewed reports prepared by the Investment Managers , materials provided by fun d counsel and counsel to the independent directors, as well as other information. The Boards considered the nature and quality of the investment management services provided to the fun ds by the Investment Managers under the I nvestment M anagement A greements and the personnel who provide these services, including the historical performance of the fun ds compared to their benchmark indices and peer groups of similar investment companies. In addition, the Boards considered other services provided to the fun ds by the Investment Managers and their affiliates, such as administrative services, shareholder services, fund accounting, assistance in meeting legal and regulatory requirements, and other services necessary for the fun ds` operation.

The Boards considered the fees paid to the Investment Managers for investment management services, as well as compensation paid to the Investment Managers or its affiliates for other non-advisory services provided to the fun ds. In connection with their review of the fees paid to the Investment Managers and their affiliates, the Boards reviewed information provided by Lipper Inc. comparing the fun ds` advisory fee rates and overall expense ratios with those of comparable funds. Where applicable, the Boards considered that the fun ds` advisory fee structures reflect breakpoints, which permit fee reductions resulting from economies of scale. Additionally and where applicable, the Boards considered the contractual fee waivers and expense reimbursements agreed to by the Investment Managers .

The Boards also considered the costs incurred and the benefits received by the Investment Managers and their affiliates, including the profitability of the Investment Managers from providing advisory services to the fun ds. In reviewing data concerning the profitability of the Investment Managers , the Boards received information concerning , among other components, the cost allocation methodology utilized in the presentation. In addition, the Boards considered other potential benefits to the Investment Managers , such as the research services the Investment Managers received from brokers in return for allocating fun d brokerage in "soft dollar" arrangements.

Based on the information reviewed and the discussions, the Boards concluded that they were satisfied with the nature and quality of the services provided by the Investment Managers to the fun ds and that the management fee rates were reasonable in relation to such services. The independent directors of the fun ds were assisted by independent legal counsel in their deliberations.

For the Retirement and Spectrum Funds, t he Board s considered the fact that the Retirement and Spectrum F und s pay no fees to the Investment Managers for investment management services.

Retirement and Spectrum Funds

The business of Retirement and Spectrum Funds is conducted by their officers, directors, and the Investment Managers in accordance with policies and guidelines set up by their directors which were included in the Exemptive Order issued by the SEC (Investment Company Act Release No. IC-21425, October 18, 1995).

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Apart from the 12b-1 fees to which Advisor and R Class es of the Retirement Funds are subject (and apart from their proportionate share of fees and expenses borne a t the underlying fund level) , e ach Retirement and Spectrum Fund will operate at a zero expense ratio. To accomplish this, the payment of each fund`s operational expenses (other than the 12b-1 fees) is subject to a Special Servicing Agreement described below as well as certain undertakings made by the Investment Managers under their Investment Management Agreements with the Retirement and Spectrum Fund s. Fund expenses include: 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` fees and expenses.

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Special Servicing Agreements

There is a separate Special Servicing Agreement between and among each of the Spectrum Growth, Spectrum Income, Spectrum International, Retirement 2005, Retirement 2010, Retirement 2015, Retirement 2020, Retirement 2025, Retirement 2030, Retirement 2035, Retirement 2040 , and Retirement Income Funds; the underlying funds in which each such fund invests; and T. Rowe Price (or T. Rowe Price International in the case of the Spectrum International Fund).

The Special Servicing Agreement s provide that, if the Board of any underlying Price fund determines that such underlying fund`s share of the aggregate expenses of each Retirement and Spectrum Fund that invests in such underlying Price fund is less than the estimated savings to the underlying Price fund from the operation of each Retirement and Spectrum Fund that invests in such underlying Price fund, the underlying Price fund will bear those expenses in proportion to the average daily value of its shares owned by the Retirement and Spectrum Fund that invests in such underlying Price fund, provided further that no underlying Price fund will bear such expenses in excess of the estimated savings to it.

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The savings to the underlying funds 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 each Retirement and Spectrum Fund are expected to be sufficient to offset most, if not all, of the expenses incurred by each Retirement and Spectrum Fund .

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The Spectrum and Retirement Fund expenses borne by each underlying fund are set forth in the underlying fund`s shareholder report under "Related Party Transactions."

</R>

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Under the Investment Management Agreements with the Retirement and Spectrum Funds, and the Special Servicing Agreements, the Investment Managers have agreed to bear any expenses of the Retirement and Spectrum Funds (other than 12b-1 fees) which exceed the estimated savings to each of the underlying Price funds. However, shareholders of the Retirement and Spectrum Funds will still indirectly bear their fair and proportionate share of the costs of the underlying Price funds in which the Retirement and Spectrum Funds invest because the Retirement and Spectrum Funds, as shareholders of the underlying Price funds, will bear their proportionate share of any fees and expenses paid by the underlying Price fund s (including fees payable to the Investment Managers) .

</R>

<R>

The Special Servicing Agreements also gives authority to each Retirement and Spectrum Fund to utilize the Price name so long as (1) the Special Servicing Agreements are in effect, and (2) the assets of the Retirement and Spectrum Funds are invested pursuant to each fund`s objectives and policies in shares of the various underlying Price funds (except for such cash or cash items as the directors may determine to maintain from time to time to meet current expenses and redemptions). The Special Servicing Agreements provide that the Retirement and Spectrum Funds will utilize assets deposited with the custodian of each fund from the sale of each fund`s shares

</R>

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<R>

to promptly purchase shares of the specified underlying Price funds, and will undertake redemption or exchange of such shares of the underlying Price funds in the manner provided by the objectives and policies of each fund.

</R>

Management Related Services

In addition to the management fee, the funds (other than the Single-Fee Funds) pay for the following: shareholder service expenses; custodial, accounting, legal, and audit fees; costs of preparing and printing prospectuses and reports sent to shareholders; registration fees and expenses; proxy and annual meeting expenses (if any); and director s` fees and expenses.

<R>

T. Rowe Price Services, Inc. ( "Services" ), a wholly owned subsidiary of T. Rowe Price, acts as the fund s ` transfer and dividend disbursing agent and provides shareholder and administrative services. T. Rowe Price Retirement Plan Services, Inc. ( "RPS" ), also a wholly owned subsidiary, provide s recordkeeping, sub-transfer agency, and administrative services for certain types of retirement plans investing in the fund s . The fees paid by the fund s to Services are based on the costs to Services of providing these services plus a return on capital employed in support of the services.

</R>

<R>

The fees paid to RPS are based on a per plan participant fee. The fees paid to Services and RPS are set forth in each fund`s shareholder report under "Related Party Transactions." The address for Services and RPS is 100 East Pratt Street, Baltimore, Maryland 21202.

</R>

<R>

T. Rowe Price, under a separate agreement with the fund s , provides accounting services to the fund s . The fund s paid the expenses shown in the following table during the fiscal years indicated to T. Rowe Price for accounting services.

Fund	Fiscal Year Ended
	2/29/04	2/28/03	2/28/02
California Tax-Free Bond	$ 64,000	$ 64,000	$ 64,000
California Tax-Free Money	64,000	64,000	64,000
Florida Intermediate Tax-Free	64,000	64,000	64,000
Georgia Tax-Free Bond	64,000	64,000	64,000
Maryland Short-Term Tax-Free Bond	64,000	64,000	64,000
Maryland Tax-Free Bond	84,000	84,000	84,000
Maryland Tax-Free Money	64,000	64,000	59,000
New Jersey Tax-Free Bond	64,000	64,000	64,000
New York Tax-Free Bond	64,000	64,000	64,000
New York Tax-Free Money	64,000	64,000	64,000
Tax-Efficient Balanced	80,666	84,000	84,000
Tax-Efficient Growth	64,000	64,000	64,000
Tax-Efficient Multi-Cap Growth	64,000	64,000	64,000
Tax-Exempt Money	83,900	97,000	95,000
Tax-Free High Yield	104,000	104,000	104,000
Tax-Free Income	113,000	109,000	104,000
Tax-Free Income Fund — Advisor Class	0	0	(a)
Tax-Free Intermediate Bond	64,000	64,000	64,000
Tax-Free Short-Intermediate	64,000	64,000	64,000
Virginia Tax-Free Bond	64,000	64,000	64,000

</R>

(a) Prior to commencement of operations .

<R>

Fund	Fiscal Year Ended
	5/31/04	5/31/03	5/31/02
Corporate Income	$ 104,000	$ 92,000	$ 84,000
GNMA	104,000	104,000	104,000
Government Reserve Investment	64,000	64,000	64,000
High Yield	111,000	116,000	136,000
High Yield Fund — Advisor Class	22,000	21,000	3,000
Inflation Protected Bond	96,000	61,000	0
Institutional Core Plus	(a)	(a)	( a)
Institutional High Yield	112,000	104,000	0
New Income	144,000	130,000	109,000
New Income Fund — Advisor Class	8	0	( a )
New Income Fund — R Class	95	0	( a )
Personal Strategy Balanced	114,000	93,000	85,000
Personal Strategy Growth	113,000	93,000	84,000
Personal Strategy Income	113,000	93,000	85,000
Prime Reserve	84,000	93,000	98,000
Reserve Investment	84,000	72,000	64,000
Retirement 2005	( b)	( a )	( a )
Retirement 2010	( b)	( b )	( a )
Retirement 2010 Fund — Advisor Class	(b)	(a)	(a)
Retirement 2010 Fund — R Class	(b)	(a)	(a)
Retirement 2015	(b)	(a)	(a)
Retirement 2020	(b)	(b)	(a)
Retirement 2020 Fund — Advisor Class	(b)	( a )	(a)
Retirement 2020 Fund — R Class	(b)	(a)	(a)
Retirement 2025	(b)	(a)	(a)
Retirement 2030	(b)	(b)	(a)
Retirement 2030 Fund — Advisor Class	(b)	(a)	(a)
Retirement 2030 Fund — R Class	(b)	(a)	(a)
Retirement 2035	(b)	(a)	(a)
Retirement 2040	(b)	(b)	(a)
Retirement 2040 Fund — Advisor Class	(b)	(a)	(a)
Retirement 2040 Fund — R Class	(b)	(a)	(a)
Retirement Income	(b)	(b)	(a)
Short-Term Bond	84,000	84,000	84,000
Short-Term Bond Fund — Advisor Class	(a)	(a)	(a)
U.S. Treasury Intermediate	64,000	64,000	64,000
U.S. Treasury Long-Term	64,000	64,000	64,000
U.S. Treasury Money	64,000	64,000	64,000

</R>

( a ) Prior to commencement of operations.

( b ) Not applicable.

<R>

Fund	Fiscal Year Ended
	10/31/0 4	10/31/03	10/31/02
Emerging Europe & Mediterranean	$ 8 4 ,000	$ 87,000	$ 104,000
Emerging Markets Stock	8 5 ,000	88,000	104,000
European Stock	91 ,000	10 7 ,000	107,000
Global Stock Fund	8 4 ,000	87,000	104,000
Institutional Emerging Markets Equity	84,000	84,000	(b)
Institutional Foreign Equity	10 7 ,000	108,000	109,000
International Discovery	90,000	106,000	106,000
International Equity Index	10 4 ,000	107,000	124,000
International Growth & Income	94 ,000	108,000	104,000
International Growth & Income Fund — Advisor Class	6,000	(a)	0
International Growth & Income Fund — R Class	2,000	(a)	0
International Stock	138,000	144,000	138,000
International Stock Fund — Advisor Class	(a)	(a)	(a)
International Stock Fund — R Class	(a)	(a)	0
Japan	6 5 ,000	68,000	84,000
Latin America	6 8,000	88,000	104,000
New Asia	88 ,000	90,000	105,000
Summit Cash Reserves	8 4 ,000	81,000	64,000
Summit GNMA	8 4 ,000	81,000	64,000
Summit Municipal Income	64,000	64,000	64,000
Summit Municipal Intermediate	64,000	64,000	64,000
Summit Municipal Money Market	81 ,000	64,000	64,000
U.S. Bond Index	67 ,000	84,000	84,000

</R>

PAGE 277

(a) Less than $1,000.

(b) Prior to commencement of operations.

Fund	Fiscal Year Ended
	1 2 /31/0 3	1 2 /31/0 2	1 2 /31/0 1
Balanced	$ 107 ,000	$ 8 6 ,000	$ 86 ,000
Blue Chip Growth	7 3 ,000	7 7 ,000	7 6 ,000
Blue Chip Growth Fund — Advisor Class	9 ,000	7 ,000	3 ,000
Blue Chip Growth Fund — R Class	(a)	0	(b)
Capital Appreciation	8 4,000	64,000	64,000
Capital Appreciation Fund — Advisor Class	( b )	( b )	(b)
Capital Opportunity	8 4,000	64,000	64,000
Capital Opportunity Fund — Advisor Class	( b )	( b )	(b)
Capital Opportunity Fund — R Class	( b )	( b )	(b)
Developing Technologies	6 4 ,000	64 ,000	64 ,000
Diversified Mid-Cap Growth	(b)	(b)	(b)
Diversified Small-Cap Growth	6 4 ,000	64,000	64,000
Dividend Growth	6 4 ,000	64,000	64,000
Emerging Markets Bond	1 05 ,000	105,000	105,000
Equity Income	73 ,000	9 8 ,000	9 9 ,000
Equity Income Fund — Advisor Class	8 ,000	5,000	( a )
Equity Income Fund — R Class	( a)	0	(b)
Equity Index 500	1 04 ,000	65,000	65,000
Extended Equity Market Index	1 04 ,000	6 4 ,000	6 5 ,000
Financial Services	64 ,000	64,000	6 4 ,000
Global Technology	84 ,000	84 ,000	84 ,000
Growth & Income	6 4,000	84,000	84,000
Growth Stock	1 01 ,000	1 2 4,000	1 0 4,000
Growth Stock Fund — Advisor Class	(a)	0	0
Growth Stock Fund — R Class	(a)	0	0
Health Sciences	10 4,000	64,000	64,000
Institutional Large-Cap Core Growth	16,000	(b)	(b)
Institutional Large-Cap Growth	6 4 ,000	64 ,000	11,000
Institutional Large-Cap Value	6 4 ,000	64 ,000	64 ,000
Institutional Mid-Cap Equity Growth	6 4 ,000	64,000	64,000
Institutional Small-Cap Stock	64 ,000	64 ,000	64 ,000
International Bond	11 1 ,000	119,000	120,000
International Bond Fund — Advisor Class	2 ,000	1,000	0
Media & Telecommunications	8 4,000	64,000	64,000
Mid-Cap Growth	8 0 ,000	8 3 ,000	8 0 ,000
Mid-Cap Growth Fund — Advisor Class	1,000	0	( a )
Mid-Cap Growth Fund — R Class	(a)	0	(b)
Mid-Cap Value	7 9 ,000	73 ,000	64 ,000
Mid-Cap Value Fund — Advisor Class	(a)	0	(b)
Mid-Cap Value Fund — R Class	(a)	0	(b)
New America Growth	6 4 ,000	64,000	64,000
New Era	6 4 ,000	64,000	64,000
New Horizons	8 4 ,000	84,000	84,000
Real Estate	6 4 ,000	64,000	64,000
Real Estate Fund — Advisor Class	( b )	( b )	(b)
Science & Technology	82 ,000	7 1 ,000	7 2 ,000
Science & Technology Fund — Advisor Class	11 ,000	8 ,000	7 ,000
Small-Cap Stock	6 9 ,000	9 7 ,000	9 8 ,000
Small-Cap Stock Fund — Advisor Class	4 ,000	2 ,000	1,000
Small-Cap Value	86 ,000	7 7 ,000	7 9 ,000
Small-Cap Value Fund — Advisor Class	7 ,000	2,000	( a )
Spectrum Growth	(c)	(c)	(c)
Spectrum Income	(c)	(c)	(c)
Spectrum International	(c)	(c)	(c)
Total Equity Market Index	10 4,000	64,000	64,000
Value	7 1 ,000	7 7 ,000	7 9 ,000
Value Fund — Advisor Class	3 ,000	2,000	(a)

( a ) Less than $1,000.

( b ) Prior to commencement of operations .

PAGE 279

other shareholder services

<R>

The funds have adopted an administrative fee payment ( "AFP" ) program that authorizes the funds to make payments to third parties to compensate them for certain services they provide on behalf of the funds. The third parties includ e retirement plan sponsors, retirement plan recordkeepers, insurance companies, banks, and broker-dealers. The payments are made for transfer agent, recordkeeping, and other administrative services provided by, or on behalf of, the third parties . These services include, but are not limited to: transmitting net purchase and redemption orders; maintaining separate records for shareholders reflecting purchases, redemptions, and share balances; mailing shareholder confirmations and periodic statements; processing dividend payments; and telephone services in connection with the above. Under the AFP program, the funds paid the amounts set forth below to various third parties in calendar year 200 4 . <R>

Fund	Paym e n t
Balanced	$ 236,891
Blue Chip Growth	793,169
Capital Appreciation	267,436
California Tax-Free Bond	697
California Tax-Free Money	1
Capital Opportunity	2,024
Corporate Income	289
Developing Technologies	97
Diversified Mid-Cap Growth	34
Diversified Small-Cap Growth	108
Dividend Growth	13,651
Emerging Europe & Mediterranean	448
Emerging Markets Bond	1,317
Emerging Markets Stock	54,537
Equity Income	1, 234,019
Equity Index 500	68,113
European Stock	23,761
Extended Equity Market Index	0
Financial Services	13,800
Florida Intermediate Tax-Free	456
Georgia Tax-Free Bond	554
GNMA	9,495
Government Reserve Investment	0
Global Stock	775
Global Technology	257
Growth & Income	20,541
Growth Stock	260,319
Health Sciences	286,119
High Yield	169,341
Inflation Protected Bond	1,462
Institutional Emerging Market s Equity	0
Institutional Foreign Equity	0
Institutional High Yield	0
Institutional Large-Cap Core Growth	0
Institutional Large-Cap Growth	0
Institutional Large-Cap Value	0
Institutional Mid-Cap Equity Growth	0
Institutional Small-Cap Stock	0
International Bond	106,791
International Discovery	136,274
International Equity Index	0
International Growth & Income	264
International Stock	637,287
Japan	2,215
Latin America	21,451
Maryland Short-Term Tax-Free Bond	2,731
Maryland Tax-Free Bond	10,361
Maryland Tax-Free Money	0
Media & Telecommunications	10,413
Mid-Cap Growth	3,196,302
Mid-Cap Value	335,540
New America Growth	102,316
New Asia	45,804
New Era	71,213
New Horizons	419,914
New Income	31,067
New Jersey Tax-Free Bond	302
New York Tax-Free Bond	772
New York Tax-Free Money	62
Personal Strategy Balanced	132,089
Personal Strategy Growth	81,333
Personal Strategy Income	39,431
Prime Reserve	32,761
Real Estate	11,953
Reserve Investment	0
Retirement 2005	50
Retirement 2010	1,453
Retirement 2015	121
Retirement 2020	1,889
Retirement 2025	47
Retirement 2030	1,081
Retirement 2035	5
Retirement 2040	593
Retirement Income	429
Science & Technology	288,077
Short-Term Bond	4,675
Small-Cap Stock	1,871,505
Small-Cap Value	539,399
Spectrum Growth	114,016
Spectrum Income	1,039,260
Spectrum International	312
Summit Cash Reserves	0
Summit GNMA	0
Summit Municipal Money Market	0
Summit Municipal Intermediate	1,815
Summit Municipal Income	63
Tax-Efficient Balanced	201
Tax-Efficient Growth	0
Tax-Efficient Multi-Cap Growth	114
Tax-Exempt Money	525
Tax-Free High Yield	7,683
Tax-Free Income	8,305
Tax-Free Intermediate Bond	3,566
Tax-Free Short-Intermediate	7,045
Total Equity Market Index	0
U.S. Bond Index	0
U.S. Treasury Intermediate	11,322
U.S. Treasury Long-Term	491
U.S. Treasury Money	34,610
Value	244,899
Virginia Tax-Free Bond	3,806

</R>

PAGE 281

<R>

Each Advisor and R Class has adopted an administrative fee payment ( "AFP" ) program under which various third parties , including third parties receiving 12b-1 payments, may receive payments from the c lass in addition to 12b-1 fees for providing various recordkeeping , transfer agent , and administrative services to the c lasses and/ or shareholders thereof. These services include , but are not limited to : transmitting net purchase and redemption orders; maintaining separate records for shareholders reflecting purchases, redemptions, and share balances; mailing shareholder confirmations and periodic statements; processing dividend payments; and telephone services in connection with the above. Under this AFP program, the funds paid the amounts set forth below to various third parties in calendar year 200 4 . <R>

Fund	Payment
Blue Chip Growth Fund — Advisor Class	$ 806,846
Blue Chip Growth Fund — R Class	4,878
Capital Appreciation Fund — Advisor Class	(a)
Capital Opportunity Fund — Advisor Class	(a)
Capital Opportunity Fund — R Class	(a)
Equity Income Fund — Advisor Class	1,664,919
Equity Income Fund — R Class	37,898
Growth Stock Fund — Advisor Class	198,223
Growth Stock Fund — R Class	45,823
High Yield Fund — Advisor Class	652,960
International Bond Fund — Advisor Class	19,371
International Growth & Income Fund — Advisor Class	25,710
International Growth & Income Fund — R Class	2,400
International Stock Fund — Advisor Class	2,102
International Stock Fund — R Class	901
Mid-Cap Growth Fund — Advisor Class	230,338
Mid-Cap Growth Fund — R Class	110,116
Mid-Cap Value Fund — Advisor Class	131,346
Mid-Cap Value Fund — R Class	81,763
New Income Fund — Advisor Class	16
New Income Fund — R Class	714
Real Estate Fund — Advisor Class	(a)
Retirement 2010 Fund — Advisor Class	6,313
Retirement 2010 Fund — R Class	1,255
Retirement 2020 Fund- — Advisor Class	2,476
Retirement 2020 Fund — R Class	1,280
Retirement 2030 Fund — Advisor Class	2,134
Retirement 2030 Fund — R Class	765
Retirement 2040 Fund — Advisor Class	559
Retirement 2040 Fund — R Class	174
Retirement Income Fund — Advisor Class	1,089
Retirement Income Fund — R Class	3
Science & Technology Fund — Advisor Class	605,275
S hort-Term Bond Fund — Advisor Class	(a)
Small-Cap Stock Fund — Advisor Class	281,294
Small-Cap Value Fund — Advisor Class	424,518
Tax-Free Income Fund — Advisor Class	236,826
Value Fund — Advisor Class	91,739

</R>

(a) Prior to commencement of operations.

52 9 Plans

<R>

T. Rowe Price is the investment manager of several college savings plans established by states under section 529 of the Internal Revenue Code. Each plan has a number of portfolios that invest in underlyi ng Price Fun ds including Blue Chip Growth, Equity Index 500, International Growth & Income, International Stock,
Mid-Cap Growth, Mid-Cap Value, New Income, Short-Term Bond, Small-Cap Stock, Spectrum Income, Summit Cash Reserves, U.S. Bond Index, and Value Funds . Each portfolio establishes an omnibus account in the underlying Price Funds. Transfer agent and recordkeeping expenses incurred by the portfolios as a result of transactions by participants in the 529 plans that invest in the Price Funds are paid for by the underlying Price Funds under their agreement with their transfer agent, T. Rowe Price Servi ces, Inc. The expenses borne by each underlying Price Fund are set forth in the shareholder report of the underlying fund under "Related Party Transactions. "

</R>

Control of Investment Adviser

T. Rowe Price Group, Inc. ( "Group" ) owns 100% of the stock of T. Rowe Price Associates , In c., which in turn owns 100% of T. Rowe Price International, Inc. Group was formed in 2000 as a holding company for the T. Rowe Price-affiliated companies.

DISTRIBUTOR FOR THE FUN D s

Investment Services, a Maryland corporation formed in 1980 as a wholly owned subsidiary of T. Rowe Price, serves as distributor for all T. Rowe Price mutual funds on a continuous basis . 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. ( "NASD" ) .

Investment Services is located at the same address as the funds and T. Rowe Price — 100 East Pratt Street, Baltimore, Maryland 21202.

Investment Services serves as distributor to the f und s , pursuant to an Underwriting Agreement ( "Underwriting Agreement" ), which provides that the funds (other than the Single-Fee Funds), will all fees and expenses in connection with: necessary state filings; preparing, setting in type, printing, and mailing of prospectuses and reports to shareholders; and issuing shares, including expenses of confirming purchase orders. For the Single-

PAGE 283

Fee Funds, the Underwriting Agreement provides that Investment Services will pay, or will arrange for others to pay, all of these fees and expenses.

The Underwriting Agreement also provides that Investment Services will pay all fees and expenses in connection with: printing and distributing prospectuses and reports for use in offering and selling fund shares; preparing, setting in type, printing, and mailing all sales literature and advertising; Investment Services` federal and state registrations as a broker-dealer; and offering and selling shares for each fund, except for those fees and expenses specifically assumed by the funds. Investment Services` expenses are paid by T. Rowe Price.

<R>

Investment Services acts as the agent of the fund s , in connection with the sale of fund shares in the various states in which Investment Services is qualified as a broker-dealer. Under the Underwriting Agreement, Investment Services accepts orders for fund shares at net asset value. Other than as described below with respect to the Advisor and R Classes, n o sales charges are paid by investors or the fund s . No compensation is paid to Investment Services.

</R>

Advisor and R Class

Distribution and Shareholder Services Plan

<R>

The fund d irectors adopted a p lan pursuant to Rule 12b-1 with respect to each Advisor and R Class (collectively "Class" ) . Each Plan provides that the Class may compensate Investment Services or such other persons as the fund s or Investment Services designates, to finance any or all of the distribution, shareholder servicing, maintenance of shareholder accounts, and/or other administrative services with respect to Class shares. It is expected that most, if not all, payments under the p lan will be made (either directly, or indirectly through Investment Services) to brokers, dealers, banks, insurance companies, and intermediaries other than Investment Services. Under the p lan, each Class pays a fee at the annual rate of up to 0.25% of that class`s average daily net assets and each R Class pays a fee at the annual rate of up to 0.50% of that class`s average daily net assets. Normally, the full amount of the fee is paid to the intermediary o n shares sold through that intermediary. However, a lesser amount may be paid based on the level of services provided. Intermediaries may use the payments for, among other purposes, compensating employees engaged in sales and/or shareholder servicing of the Class, as well as for a wide variety of other purposes associated with supporting, distributing, and servicing Class shares. The amount of fees paid by a Class during any year may be more or less than the cost of distribution and other services provided to the Class and its investors. NASD rules limit the amount of annual distribution and service fees that may be paid by a mutual fund and impose a ceiling on the cumulative distribution fees paid. The p lan complies with these rules.

</R>

The p lan requires that Investment Services provide, or cause to be provided, a quarterly written report identifying the amounts expended by each Class and the purposes for which such expenditures were made to the fund d irectors for their review.

Prior to approving the p lan, the fund s considered various factors relating to the implementation of the p lan and determined that there is a reasonable likelihood that the p lan will benefit each fund, its Class, and the Class`s shareholders. The fund d irectors noted that to the extent the p lan allows a fund to sell Class shares in markets to which it would not otherwise have access, the p lan may result in additional sales of fund shares. This may enable a fund to achieve economies of scale that could reduce expenses. In addition, certain ongoing shareholder services may be provided more effectively by intermediaries with which shareholders have an existing relationship.

The p lan is renewable from year to year with respect to each fund, so long as its continuance is approved at least annually (1) by the vote of a majority of the fund d irectors and (2) by a vote of the majority of the funds ` independent directors ( "Rule 12b-1 Directors" ) , cast in person at a meeting called for the purpose of voting on such approval. The p lan may not be amended to increase materially the amount of fees paid by any Class thereunder unless such amendment is approved by a majority vote of the outstanding shares of such Class and by the fund d irectors in the manner prescribed by Rule 12b-1 under the 1940 Act. The p lan is terminable with respect to a Class at any time by a vote of a majority of the Rule 12b-1 Directors or by a majority vote of the outstanding shares in the Class.

<R>

Payments under the 12b-1 plans will normally be made for funds that are closed to new investors. Such payments are made for the various services provided to the investors by the intermediaries receiving such payments .

</R>

The following payments for the fiscal year indicated were made to third party intermediaries, including brokers- dealers and insurance companies, for the distribution, shareholder servicing, maintenance of shareholder accounts , and/or other administrati ve services under the p lan .

Fund	Fiscal Year Ended 2/29/04
Ta x-Free Income Fund — Advisor Class	$ 187,000

<R>

Fund	Fiscal Year Ended 5/31/04
High Yield Fund — Advisor Class	$ 1,571,000
New Income Fund — Advisor Class	0
New Income Fund — R Class	6,000
Retirement 2010 Fund — Advisor Class	2,000
Retirement 2010 Fund — R Class	1,000
Retirement 2020 Fund — Advisor Class	0
Retirement 2020 Fund — R Class	2,000
Retirement 2030 Fund — Advisor Class	1,000
Retirement 2030 Fund — R Class	1,000
Retirement 2040 Fund — Advisor Class	1,000
Retirement 2040 Fund — R Class	1,000
Retirement Income Fund — Advisor Class	1,000
Retirement Income Fund — R Class	1,000
Short-Term Bond Fund — Advisor Class	(a)

</R>

<R>

(a) Prior to commencement of operations .

</R>

<R>

Fund	Fiscal Year Ended 10/31/0 4
Internatio nal Growth & Income Fund — Advisor Class	$ 46 ,000
International Growth & Income Fund — R Class	1 8 ,000
International Stock Fund — Advisor Class	6 5,000
International Stock Fund — R Class	7 ,000

</R>

<R>

Fund	Fiscal Year Ended 12/31/0 3
Blue Chip Growth Fund — Advisor Class	$ 1, 579 ,000
Blue Chip Growth Fund — R Class	2,00 0
Capital Appreciation Fund — Advisor Class	(a)
Capital Opportunity Fund — Advisor Class	(a)
Capital Opportunity Fund — R Class	(a)
Equity Income Fund — Advisor Class	2 , 822 , 000
Equity Income Fund — R Class	78 ,0 00
Growth Stock Fund — Advisor Class	75,000
Growth Stock Fund — R Class	12,000
International Bond Fund — Advisor Class	69 ,000
Mid-Cap Growth Fund — Advisor Class	351 , 00 0
Mid-Cap Growth Fund — R Class	71 ,0 00
Mid-Cap Value Fund — Advisor Class	50 , 00 0
Mid-Cap Value Fund — R Class	17 ,0 00
Real Estate Fund — Advisor Class	(a)
Science & Technology Fund — Advisor Class	1, 241 ,000
Small-Cap Stock Fund — Advisor Class	514 ,000
Sm all-Cap Value Fund — Advisor Class	5 2 5 ,000
Value Fund — Advisor Class	135 ,000

</R>

PAGE 285

<R>

(a) Prior to commencement of operations .

</R>

<R>

</R>

PORTFOLIO TRANSACTIONS

All funds except International Funds

Investment or Brokerage Discretion

<R>

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 , where applicable, the negotiation of commissions and the allocation of portfolio brokerage and principal business and the use of affiliates to assist in routing orders for execution.

</R>

The fund`s purchases and sales of fixed-income portfolio securities are normally done on a principal basis and do not involve the payment of a commission although they may involve the designation of selling concessions. That part of the discussion below relating solely to brokerage commissions would not normally apply to the fund (except to the extent that the Corporate Income, High Yield, Institutional High Yield, New Income, and Personal Strategy Funds purchase equity securities). However, it is included because T. Rowe Price does manage a significant number of common stock portfolios which do engage in agency transactions and pay commissions and because some research and services resulting from the payment of such commissions may benefit the fund.

<R>

How Broker - Dealers Are Selected

</R>

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 , although the price usually includes an undisclosed compensation. Transactions placed through dealers serving as primary market- makers reflect the spread between the bid and ask prices. Securities may also be purchased from underwriters at prices which include underwriting fees.

Equity Securities

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In purchasing and selling equity securities, T. Rowe Price seek s to obtain quality execution at favorable security prices through responsible broker - dealers and in the case of agency transactions, at competitive commission rates . However, under certain conditions, higher brokerage commissions may be paid in return for brokerage and research services. As a general practice, NASDAQ securities are executed with market-makers through an electronic communications network or Alternative Trading System . In selecting from 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 broker - dealers, their expertise in particular markets, 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 - dealer

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charging a higher commission rate would offer greater reliability or provide better price or execution , which is often the case with block transactions .

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Equity and Fixed - Income Securities

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With respect to equity and fixed-income securities, T. Rowe Price may effect principal transactions on behalf of the fund with a broker - dealer who furnishes brokerage and/or research services ; designate any such broker - dealer to receive selling concessions, discounts, or other allowances ; or otherwise deal with any such broker - dealer in connection with the acquisition of securities in underwritings. T. Rowe Price may receive research services in connection with brokerage transactions, including designations in fixed - price offerings.

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How Evaluations Are Made of the Overall Reasonableness of Brokerage Commissions Paid

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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 clients . In evaluating the reasonableness of commission rates, T. Rowe Price considers: (a) historical commission rates ; (b) rates which other institutional investors are paying, based on available public information; (c) rates quoted by broker - 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 - dealer has capital at risk in the transaction.

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Description of Research Services Received From Broker - Dealers

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T. Rowe Price receives a wide range of research services from broker - 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. S uch services may be provided in the form of meetings arranged with corporate and industry spokespersons, economists, academicians, and government representatives.

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Research services received from broker - dealers are supplemental to T. Rowe Price`s own research effort s 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 and varied opinions presently provided by broker - dealers. T. Rowe Price pays cash for certain research services received from external non-broker-dealer sources. 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 broker - dealers, T. Rowe Price is relieved of expenses which it might otherwise bear.

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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 has from time to time receive d third-party vendor services and products which serve both research and non-research functions. In such event, T. Rowe Price makes a good faith determination of the research and non-research use of the product or service and allocates brokerage only with respect to the research component.

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Directed Brokerage

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In 2002, the T. Rowe Price Funds that invest in domestic equity se curities adopted a commission recapture program. Under the program, a percentage of commissions generated by the portfolio transactions of those funds is re bated to the funds by the broker -dealers and used to pay for certain fund operating expenses.

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Commissions to Broker -Dealers Who Furnish Research Services

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Certain broker - dealers who provide quality brokerage and execution services also furnish research services to T. Rowe Price. With regard to the payment of brokerage commissions, T. Rowe Price has adopted a brokerage allocation policy embodying the concepts of Section 28(e) of the Securities Exchange Act of 1934, which

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permits an investment adviser to cause an account to pay commission rates in excess of those another broker - 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. Therefore, research may not necessarily benefit all accounts paying commissions to such broker -dealers . Accordingly, while T. Rowe Price cannot readily determine the extent to which commission rates 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 -dealer . T. Rowe Price may receive research, as defined in Section 28(e), in connection with selling concessions and designations in fixed - price offerings in which the fund participate s .

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T. Rowe Price adopted a policy, effective January 1, 2005, to discontinue the use of brokerage commissions to acquire independent, third-party research and related services of non-broker-dealer entities.

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Independent third-party research will remain an important component of T. Rowe Price`s investment approach. However, independent third-party research will be paid for directly by T. Rowe Price, rather than through third- party soft dollar arrangements. T. Rowe Price will continue to use full service broker-dealers that provide "bundled" proprietary research, subject to T. Rowe Price`s best execution obligations; lower commissions may be available from other broker-dealers that do not provide research.

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No selling concessions were designated for broker-dealers during 2004 in connection with fixed price offerings in consideration of independent third-party vendor research and brokerage services provided by such broker- dealers. However, T. Rowe Price may receive proprietary research from broker-dealers designated by T. Rowe Price to receive selling concessions.

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Internal Allocation Procedures

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T. Rowe Price has a policy of not precommitting a specific amount of business to any broker - 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 broker - dealers , which are able to meet the needs of the transaction.

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Each year, T. Rowe Price assesses the contribution of the brokerage and research services provided by broker - dealers and attempts to allocate a portion of its brokerage business in response to these assessments. Portfolio managers, r esearch analysts, and the Trading Department each seek to evaluate the brokerage , execution , and research services they receive from broker - dealers and make judgments as to the level of business which would recognize such services. In addition, broker - dealers sometimes suggest a level of business they would like to receive in return for the various brokerage and research services they provide. Actual b usiness received by any firm may be less than the suggested allocations but can, and often does, exceed the suggestions because the total business is allocated on the basis of all the considerations described above. In no case is a broker - dealer excluded from receiving business from T. Rowe Price because it has not been identified as providing research services.

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Miscellaneous

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T. Rowe Price`s brokerage allocation policy is generally applied to all its fully discretionary accounts, which represent a substantial majority of all assets under management. Research services furnished by broker - dealers 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 broker - dealers which execute transactions for the fund are not necessarily used by T. Rowe Price in connection with the management of the fund.

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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.

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Some of T. Rowe Price`s other clients have investment objectives and programs similar to those of the fund. T. Rowe Price may make recommendations to other clients which result in their purchasing or selling securities simultaneously with the fund. As a result, the demand for securities being purchased or the supply of securities being sold may increase, and this could have an adverse effect on the price of those securities. It is 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. Clients should be aware, however, that the grouping of their orders with other clients may sometimes result in a more favorable price and at other times may result in a less favorable price than if the client orders had not been grouped. 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 may include orders on behalf of the T. Rowe Price Associates Foundation, Inc. and T he T. Rowe Price Program for Charitable Giving, Inc., not for profit entities, in aggregated orders from time to time. T . Rowe Price has established a general investment policy that it will ordinarily not make additional purchases of a common stock f or its clients (including the T. Rowe Price funds) if, as a result of such purchases, 10% or more of the outstanding common stock of the issuer would be held by its clients and clients of affiliated advisers in the aggregate. In certain limited instances, however, T. Rowe Price may increase aggregate ownership to a maximum of 15% or more . For purposes of determining the se limit s , T. Rowe Price includes securities held by clients of affiliated advisers .

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T. Rowe Price may give advice and take action for clients, including investment companies, which differs from advice given or the timing or nature of action taken for other clients. T. Rowe Price is not obligated to initiate transactions for clients in any security that its principals, affiliates, or employees may purchase or sell for their own accounts or for other clients.

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Purchase and sale transactions may be effected directly among and between non-ERISA client accounts (including affiliated mutual funds), provided no commission is paid to any broker -dealer , the security traded has readily available market quotations, and the transaction is effected at the independent current market price.

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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.

Trade Allocation Policies

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T. Rowe Price has developed written trade allocation guidelines for its Trading Desks. Generally, when the amount of securities available in a public offering or the secondary markets is insufficient to satisfy the volume or price requirements for the participating client portfolios, the guidelines require a pro - rata allocation based upon the relative sizes of the participating client portfolios or the relative sizes of the participating client orders, depending upon the market involved. In allocating trades made on a combined basis, the trading desks seek to achieve the same net unit price of the securities for each participating client. Because a pro - rata allocation may not always adequately accommodate all facts and circumstances, the guidelines provide for exceptions to allocate trades on an adjusted basis. For example, adjustments may be made: (i) to recognize the efforts of a portfolio manager in negotiating a transaction or a private placement; (ii) to eliminate de minimus positions; (iii) to give priority to accounts with specialized investment policies and objectives; and (iv) to reallocate in light of a participating portfolio`s characteristics (e.g., available cash, industry or issuer concentration, duration, credit exposure). Also, with respect to private placement transactions, conditions imposed by the issuer may limit availability of allocations to the fund .

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International Funds

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 and the use of affiliates to assist in routing orders for execution.

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How Broker - Dealers Are Selected

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Fixed-Income Securities

For fixed-income securities, it is expected that purchases and sales will ordinarily be transacted with the issuer, the issuer`s underwriter, or with a primary market - maker acting as principal on a net basis, with no brokerage commission being paid by the fund. However, the price of the securities generally includes compensation which is not disclosed separately. Transactions placed through dealers who are serving as primary market - makers reflect the spread between the bid and asked prices.

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With respect to equity and fixed-income securities, T. Rowe Price International may effect principal transactions on behalf of the fund with a broker - dealer who furnishes research services , designate any such broker - dealer to receive selling concessions, discounts, or other allowances, or otherwise deal with any such broker - dealer in connection with the acquisition of securities in underwritings. T. Rowe Price International may receive research services in connection with brokerage transactions, including designations in fixed - price offerings.

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T. Rowe Price International may cause a fund to pay a broker-dealer who furnishes research services a commission for executing a transaction that may be in excess of the commission another broker-dealer would have received for executing the transaction if it is determined that such commission is reasonable in relation to the value of the research services which have been provided. In some cases, research services are generated by third parties but are provided to T. Rowe Price International by or through broker-dealers.

Equity Securities

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In purchasing and selling equity securities, it is T. Rowe Price International `s policy to seek to obtain quality execution at the most favorable security prices through responsible broker - dealers and at competitive commission rates where such rates are negotiable . However, under certain conditions, higher brokerage commissions may be paid in return for brokerage and research goods and services. 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 broker - dealers, their expertise in particular markets, and brokerage and research services provided by them. It is not the policy of T. Rowe Price International to seek the lowest available commission rate where it is believed that a broker - dealer charging a higher commission rate would offer greater reliability or provide better price or execution , which is often the case with block transactions .

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Transactions on stock exchanges involve the payment of brokerage commissions. In transactions on stock exchanges in the United States, these commissions are negotiated. Traditionally, commission rates have generally not been negotiated on stock markets outside the United States. However, an increasing number of overseas stock markets have adopted a system of negotiated rates, although a number of markets continue to be subject to an established schedule of minimum commission rates. It is expected that equity securities will ordinarily be purchased in the primary markets, whether over-the-counter or listed, and that listed securities may be purchased in the over-the-counter market if such market is deemed the primary market. In the case of securities traded on the over-the-counter markets, there is generally no stated commission, but the price usually includes an undisclosed commission or markup. In underwritten offerings, the price includes a disclosed, fixed commission or discount.

How Evaluations Are Made of the Overall Reasonableness of Brokerage Commissions Paid

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On a continuing basis, T. Rowe Price International seeks to determine what levels of commission rates are reasonable in the marketplace for transactions executed on behalf of clients . In evaluating the reasonableness of commission rates, T. Rowe Price International considers: (a) historical commission rates ; (b) rates which other institutional investors are paying, based on available public information; (c) rates quoted by broker - dealers; (d) the size of a particular transaction in terms of the number of shares and dollar amount ; (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 - dealer has capital at risk in the transaction.

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Descriptions of Research Services Received From Broker - Dealers

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T. Rowe Price International receives a wide range of research services from broker - dealers covering investment opportunities throughout the world, including information on the economies, industries, groups of securities,

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individual companies, statistics, political developments, technical market action, pricing and appraisal services, and performance analyses of all the countries in which a fund`s portfolio is likely to be invested. Research services are received primarily in the form of written reports, e - m ails, 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. T. Rowe Price International cannot readily determine the extent to which commissions charged by broker -dealers reflect the value of their research services, but broker -dealers generally suggest a level of business they would like to receive in return for the brokerage and research services they provide. To the extent that research services of value are provided by broker -dealers , T. Rowe Price International is relieved of expenses which it might otherwise bear.

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Commissions to Broker -Dealers Who Furnish Research Services

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Certain broker -dealers that provide quality brokerage and execution services also furnish research services to T. Rowe Price International. With regard to payment of brokerage commissions, T. Rowe Price International has adopted a brokerage allocation policy embodying the concepts of Section 28(e) of the Securities Exchange Act of 1934, which permits an investment adviser to cause its clients to pay a broker - dealer which furnishes brokerage or research services a higher commission than that which might be charged by another broker - dealer which does not furnish research services, or which furnishes research services deemed to be of lesser value, if such commission is deemed reasonable in relation to the research services provided by the broker - dealer , viewed in terms of either that particular transaction or the overall responsibilities of the adviser with respect to the accounts as to which it exercises investment discretion. Accordingly, T. Rowe Price International may assess the reasonableness of commissions in light of the total research services provided by each particular broker -dealer . T. Rowe Price International may receive research, as defined in Section 28(e), in connection with selling concessions and designations in fixed - price offerings for non-ERISA accounts.

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Internal Allocation Procedures

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T. Rowe Price has a policy of not pre-committing a specific amount of business to any broker-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 broker-dealers which are able to meet the needs of the transaction.

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Each year, T. Rowe Price assesses the contribution of the brokerage and research services provided by broker- dealers, and attempts to allocate a portion of its brokerage business in response to these assessments. Portfolio managers, research analysts, and the Trading Department each seek to evaluate the brokerage, execution and research services they receive from broker-dealers and make judgements as to the level of business which would recognize such services. In addition, broker-dealers sometimes suggest a level of business they would like to receive in return for the various brokerage and research services they provide. Actual business received by any firm may be less than the suggested allocations but can, and often does, exceed the suggestions, because the total business is allocated on the basis of all the considerations described above. In no case is a broker-dealer excluded from receiving business from T. Rowe Price because it has not been identified as providing research services.

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Miscellaneous

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Research services furnished by broker -dealers through which T. Rowe Price International effects securities transactions may be used in servicing all accounts managed by T. Rowe Price International . Conversely, research

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services received from broker -dealers which execute transactions for a particular fund will not necessarily be used by T. Rowe Price International exclusively in connection with the management of that fund.

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Some of T. Rowe Price International `s other clients have investment objectives and programs similar to those of the fund. T. Rowe Price International may make recommendations to other clients which result in their purchasing or selling securities simultaneously with the fund. As a result, the demand for securities being purchased or the supply of securities being sold may increase, and this could have an adverse effect on the price of those securities. It is T. Rowe Price International `s policy not to favor one client over another in making recommendations or in placing orders. T. Rowe Price International may follow the practice of grouping orders of various clients for execution , which generally results in lower commission rates being attained. Clients should be aware, however, that the grouping of their orders with other clients may sometimes result in a more favorable price and at other times may result in a less favorable price than if the client orders had not been grouped. In certain cases, where the aggregate order may be executed in a series of transactions at various prices on a given day, each participating client`s proportionate share of such order will reflect the average price paid or received with respect to the total order.

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T. Rowe Price has developed written trade allocation guidelines for its Trading desk. Generally, when the amount of securities available in a public offering or the secondary markets is insufficient to satisfy the volume or price requirements for the participating client portfolios, the guidelines require a pro rata allocation based upon the relative sizes of the participating client portfolios or the relative sizes of the participating client orders depending upon the market involved. In allocating trades made on a combined basis, the trading desks seek to achieve the same net unit price of the securities for each participating client. Because a pro rata allocation may not always adequately accommodate all facts and circumstances, the guidelines provide for exceptions to allocate trades on an adjusted basis, which may include a system-generated random allocation. Adjustments may be made in such situations as: (i) to recognize the efforts of a portfolio manager in negotiating a transaction or a private placement; (ii) to eliminate de minimus positions; (iii) to give priority to accounts with specialized investment policies and objectives; and (iv) to reallocate in light of a participating portfolio`s characteristics (e.g., available cash, industry or issuer concentration, duration, credit exposure). Also, with respect to private placement transactions, conditions imposed by the issuer may limit availability of allocations to client accounts.

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T. Rowe Price may give advice and take action for clients, including investment companies, which differs from advice given or the timing or nature of action taken for other clients. T. Rowe Price is not obligated to initiate transactions for clients in any security which the advisers, their principals, affiliates or employees may purchase or sell for their own accounts or for other clients.

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Purchase and sale transactions may be effected directly between non-ERISA client accounts (including mutual funds), provided no commission is paid to any broker-dealer, the security traded has readily available market quotations, and the transaction is effected at the independent current market price.

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Price International has a Brokerage Control Committee, which is responsible for developing brokerage policy, monitoring its implementation and resolving questions that arise in that connection.

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T. Rowe Price International 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 f unds) if, as a result of such purchases, 10% or more of the outstanding common stock of such company would be held by its clients and clients of affiliated advisers in the aggregate. For purposes of determining the 10% limit, T. Rowe Price International includes securities held by clients of affiliated advisers. In certain limited instances, however, T. Rowe Price International may increase aggregate ownership to a maximum of 15% or more .

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All funds

Total Brokerage Commissions

For the fiscal years indicated, 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 or T. Rowe Price International in connection with the management of each fund that invests in equity securities , are shown below.

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Fund	Fiscal Year Ended
	2/29/04	%	2/28/03	%	2/28/02	%
California Tax-Free Bond	$ 150,000	(a)	$ 182,000	(a)	$ 297,000	(a)
California Tax-Free Money	1,000	(a)	4,000	(a)	19,000	(a)
Florida Intermediate Tax-Free	17,000	(a)	24,000	(a)	20,000	(a)
Georgia Tax-Free Bond	39,000	(a)	52,000	(a)	61,000	(a)
Maryland Short-Term Tax-Free Bond	112,000	(a)	84,000	(a)	27,000	(a)
Maryland Tax-Free Bond	584,000	(a)	385,000	(a)	484,000	(a)
Maryland Tax-Free Money	0	(a)	3,000	(a)	1,000	(a)
New Jersey Tax-Free Bond	67,000	(a)	91,000	(a)	96,000	(a)
New York Tax-Free Bond	176,000	(a)	289,000	(a)	255,000	(a)
New York Tax-Free Money	0	(a)	4,000	(a)	1,000	(a)
Tax-Efficient Balanced	1,000	0.0	4,000	0.0	19,000	0.0
Tax-Efficient Growth	10,000	0.0	18,000	0.0	11,000	0.0
Tax-Efficient Multi-Cap Growth	5,000	0.30	15,000	0.0	11,000	0.39
Tax-Exempt Money	0	(a)	69,000	(a)	4,000	(a)
Tax-Free High Yield	1,003,000	(a)	1,148,000	(a)	1,586,000	(a)
Tax-Free Income	1,007,000	(a)	959,000	(a)	1,103,000	(a)
Tax-Free Intermediate Bond	80,000	(a)	87,000	(a)	68,000	(a)
Tax-Free Short-Intermediate	188,000	(a)	172,000	(a)	141,000	(a)
Virginia Tax-Free Bond	212,000	(a)	254,000	(a)	361,000	(a)

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(a) Percentages are not required for funds that do not invest in equity securities .

Fund	Fiscal Year Ended
	5/31/04	%	5/31/03	%	5/31/02	%
Corporate Income	$ 109,000	87.4	$ 121,000	94.0	$ 103,000	95.0
GNMA	24,000	(a)	13,000	(a)	0	(a)
Government Reserve Investment	(b)	(b)	(b)	(b)	(b)	(b)
High Yield	7,754,000	87.6	14,294,000	86.0	9,189,000	82.0
Inflation Protected Bond	1,600	(a)	121,000	(a)	( c )	( c )
Institutional High Yield	2,018,000	(a)	1,291,000	(a)	( c )	( c )
New Income	896,000	91.2	1,343,000	96.0	1,734,000	98.0
Personal Strategy Balanced	461,000	28.1	654,000	17.0	843,000	14.0
Personal Strategy Growth	315,000	31.8	311,000	24.0	374,000	19.0
Personal Strategy Income	145,000	25.7	257,000	12.0	332,000	9.0
Prime Reserve	(b)	(b)	(b)	(b)	(b)	(b)
Reserve Investment	(b)	(b)	(b)	(b)	(b)	(b)
Retirement 2005	(c)	(c)	(c)	(c)	(c)	(c)
Retirement 2010	(b)	(b)	(b)	(b)	(c)	(c)
Retirement 2015	(c)	(c)	(c)	(c)	(c)	(c)
Retirement 2020	(b)	(b)	(b)	(b)	(c)	(c)
Retirement 2025	(c)	(c)	(c)	(c)	(c)	(c)
Retirement 2030	(b)	(b)	(b)	(b)	(c)	(c)
Retirement 2035	(c)	(c)	(c)	(c)	(c)	(c)
Retirement 2040	(b)	(b)	(b)	(b)	(c)	(c)
Retirement Inc ome	(b)	(b)	(b)	(b)	(c)	(c)
Short -Term Bond	660,000	(a)	302,000	(a)	217,000	(a)
U.S. Treasury Intermediate	7,000	(a)	11,000	(a)	0	(a)
U.S. Treasury Long-Term	12,000	(a)	12,000	(a)	0	(a)
U.S. Treasury Money	(b)	(b)	(b)	(b)	(b)	(b)

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(a) Percentages are not required for funds that do not invest in equity securities.

(b) Not applicable.

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Fund	Fiscal Year Ended
	10/31/0 4	%	10/31/03	%	10/31/02	%
Emerging Europe & Mediterranean	$ 515 ,000	16.6	$ 159,000	32.9	$ 85,000	90.0
Emerging Markets Stock	2,398 ,000	10.9	1,052,000	33.2	736,000	89.0
European Stock	810 ,000	1.2	724,000	33.0	556,000	88.0
Global Stock	142 ,000	18.6	82,000	40.2	110,000	43.0
Institutional Emerging Markets Equity	135 ,000	10.0	61,000	43.0	(a)	(a)
Institutional Foreign Equity	1,433 ,000	3.5	1,720,000	30.5	2,081,946	1.0
International Discovery	3,282 ,000	0.2	2,165,000	28.0	1,796,000	65.0
International Equity Index	39 ,000	4.4	11,000	0.1	14,000	0.0
International Growth & Income	327 ,000	4.5	77,000	2.0	7,000	12.0
International Stock	5,872 ,000	3.5	5,961,000	38.8	5,790,000	83.0
Japan	1,161 ,000	0.0	838,000	32.3	306,000	78.0
Latin America	452 ,000	54.0	267,000	67.8	249,000	85.0
New Asia	3,996,000	0.0	2,510,000	36.2	2,680,000	90.0
Summit Cash Reserves	0	(b)	0	(b)	0	(b)
Summit GNMA	2,000	(b)	2,000	(b)	2,000	(b)
Summit Municipal Income	105,000	(b)	119,000	(b)	149,000	(b)
Summit Municipal Intermediate	70,000	(b)	49,000	(b)	44,000	(b)
Summit Municipal Money Market	0	(b)	0	(b)	1,000	(b)
U.S. Bond Index	7,000	(b)	15,000	(b)	23,000	(b)

</R>

(a) Prior to commencement of operations.

(b) Percentages are not required for funds that do not invest in equity securities.

<R>

Fund	Fiscal Year Ended
	12/31/03	%	12/31/02	%	12/31/01	%
Balanced	$ 604,000	19.3	$ 1,341,000	14.7	$ 1,203,000	10.9
Blue Chip Growth	6,285,000	72.7	7,802,000	61.8	7,972,000	39.8
Capital Appreciation	2,442,000	19.4	2,513,000	14.1	2,345,000	14.1
Capital Opportunity	107,000	63.9	127,000	42.4	101,000	31.5
Developing Technologies	146,000	39.4	94,000	63.7	72,000	10.9
Diversified Mid-Cap Growth	(a)	(a)	(a)	(a)	(a)	( a)
Diversified Small-Cap Growth	51,000	32.8	88,000	24.5	55,000	2.4
Dividend Growth	355,000	66.3	554,000	48.3	640,000	66.5
Emerging Markets Bond	0	(b)	605,000	(b)	0	(b)
Equity Income	7,017,000	44.0	8,255,000	39.8	7,344,000	26.2
Equity Index 500	239,000	1.3	339,000	1.7	193,000	0.8
Extended Equity Market Index	28,000	1.9	42,000	7.3	42,000	0.1
Financial Services	620,000	50.7	604,000	39.7	539,000	51.4
Global Technology	464,000	36.3	543,000	50.2	510,000	45.4
Growth & Income	2,416,000	60.4	3,408,000	49.2	4,538,000	49.5
Growth Stock	6,388,000	37.9	6,963,000	42.4	8,332,000	52.7
Health Sciences	2,779,000	74.9	2,768,000	85.0	2,732,000	60.4
Institutional Large-Cap Core Growth	(c)	30.0	(a)	(a)	(a)	( a )
Institutional Large-Cap Growth	22,000	53.5	15,000	26.5	2,000	6.7
Institutional Large-Cap Value	18,000	24.7	7,000	25.3	5,000	18.1
Institutional Mid-Cap Equity Growth	604,000	47.3	489,000	58.1	565,000	18.6
Institutional Small-Cap Stock	467,000	45.2	571,000	62.1	265,000	33.9
International Bond	0	(b)	205,000	(b)	0	(b)
Media & Telecommunications	2,882,000	39.0	4,243,000	45.0	3,993,000	43.2
Mid-Cap Growth	14,169,000	45.3	9,544,000	58.6	11,886,000	18.3
Mid-Cap Value	4,260,000	62.0	3,708,000	66.0	1,050,000	75.5
New America Growth	1,599,000	64.3	2,048,000	53.0	1,823,000	36.4
New Era	921,000	52.6	960,000	28.7	1,411,000	40.4
New Horizons	9,939,000	36.5	8,357,000	45.6	7,929,000	7.1
Real Estate	312,000	43.5	126,000	64.4	114,000	36.8
Science & Technology	7,358,000	32.9	8,785,000	35.1	15,035,000	31.4
Small-Cap Stock	5,140,000	45.4	5,313,000	55.4	2,865,000	38.0
Small-Cap Value	2,325,000	50.7	4,163,000	67.9	1,656,000	50.0
Spectrum Growth	(d)	(d)	(d)	(d)	(d)	(d)
Spectrum Income	(d)	(d)	(d)	(d)	(d)	(d)
Spectrum International	(d)	(d)	(d)	(d)	(d)	(d)
Total Equity Market Index	44,000	0.84	36,000	2.8	40,000	0.0
Value	1,574,000	38.4	2,120,000	59.1	2,221,000	55.1

</R>

(a) Prior to commencement of operations.

(b) Percentages are not required for funds that do not invest in equity securities.

(d) Not applicable.

Fund Holdings in Securities of Brokers and Dealers

The following lists the funds` holdings in securities of its regular brokers and dealers as of the end of the fiscal years indicated.

<R>

		Fiscal Year Ended 2/29/04
Fund	Broker	Value of Stock Holdings	Value of Bond Holdings
Tax-Efficient Balanced
	Citigroup	$653,000	—
Tax-Efficient Growth
	Citigroup	$2,151,000	—
Tax-Efficient Multi-Cap Growth
	Legg Mason	$85,000	—
	Raymond James	23,000	—

</R>

PAGE 295

<R>

		Fiscal Year Ended 5/31/04
Fund	Broker	Value of Stock Holdings	Value of Bond Holdings
Corporate Income
	Bank of America	$251 ,000	—
	Citigroup	186 ,000	—
	J.P. Morgan Chase	202 ,000	—
Government Reserve Investment
	Barclays Capital	—	$25,000 ,000
	Credit Suisse First Boston	—	125,000 ,000
	Deutsche Bank	—	145,000 ,000
	Goldman Sachs	—	25,651 ,000
	J.P. Morgan Chase	—	25,000 ,000
	Morgan Stanley	—	35,000 ,000
	UBS	—	100,000 ,000
	Wachovia	—	35,000 ,000
New Income
	Bank of America	—	$44,446 ,000
	Citigroup	$2,171 ,000	—
	Goldman Sachs	—	9,415 ,000
	Greenwich	—	9,199 ,000
	J.P. Morgan Chase	—	51,354 ,000
	Morgan Stanley	—	21,700 ,000
	UBS	—	17,544 ,000
Personal Strategy Balanced
	Bank of America	$5,187 ,000	$3,947 ,000
	Bear Sterns	—	1,689 ,000
	Citigroup	8,277 ,000	2,123 ,000
	Credit Suisse First Boston	958 ,000	—
	Deutsche Bank	947 ,000	—
	Freddie Mac	1,168 ,000	—
	Goldman Sachs	2,010 ,000	767 ,000
	Greenwich	—	726 ,000
	J.P. Morgan Chase	111 ,000	3,805 ,000
	Merrill Lynch	2,738 ,000	—
	Morgan Stanley	1,616 ,000	905 ,000
	Prudential	254 ,000	297 ,000
	UBS	—	1,911 ,000
Personal Strategy Growth
	Bank of America	$4,240 ,000	$1,099 ,000
	Bear Sterns	—	571 ,000
	Citigroup	6,700 ,000	564 ,000
	Credit Suisse First Boston	771 ,000	—
	Deutsche Bank	783 ,000	—
	Freddie Mac	1,068 ,000	—
	Goldman Sachs	1,634 ,000	226 ,000
	Greenwich	—	200 ,000
	J.P. Morgan Chase	88 ,000	1,424 ,000
	Merrill Lynch	2,192 ,000	—
	Morgan Stanley	1,300 ,000	257 ,000
	Prudential	212 ,000	79 ,000
	UBS	—	563 ,000
Personal Strategy Income
	Bank of America	$1,347 ,000	$2,075 ,000
	Bear Sterns	—	298 ,000
	Citigroup	2,177 ,000	979 ,000
	Credit Suisse First Boston	241 ,000	—
	Deutsche Bank	240 ,000	—
	Freddie Mac	321 ,000	—
	Goldman Sachs	526 ,000	391 ,000
	Greenwich	—	376 ,000
	J.P. Morgan Chase	29 ,000	3,060 ,000
	Merrill Lynch	693 ,000	—
	Morgan Stanley	455 ,000	858 ,000
	Prudential	70 ,000	168 ,000
	UBS	—	980 ,000
Prime Reserve
	Citigroup	—	$57,138 ,000
	Credit Suisse First Boston	—	67,186 ,000
	Goldman Sachs	—	49,600 ,000
	Merrill Lynch	—	26,244 ,000
	Morgan Stanley	—	51,984 ,000
Reserve Investment
	ABN Amro	—	$10,579 ,000
	Barclays Capital	—	91,000 ,000
	Credit Suisse First Boston	—	50,000 ,000
	Deutsche Bank	—	45,006 ,000
	Goldman Sachs	—	60,000 ,000
	Morgan Stanley	—	49,971 ,000
	UBS	—	52,640 ,000
	Wachovia	—	1,403 ,000
Short-Term Bond
	Bank of America	—	$30,220 ,000
	Citigroup	—	32,587 ,000
	Goldman Sachs	—	9,478 ,000
	Greenwich	—	7,514 ,000
	J.P. Morgan Chase	—	10,092 ,000
	Lehman Brothers	—	5,843 ,000
	Merrill Lynch	—	7,119 ,000
	Morgan Stanley	—	16,545 ,000
	Wachovia	—	7,147 ,000

</R>

PAGE 297

<R>

		Fiscal Year Ended 10/31/0 4
Fund	Broker	Value of Stock Holdings	Value of Bond Holdings
European Stock
	Credit Suisse First Boston	$9,800,000	—
	Deutsche Bank	4,910,000	—
	UBS	17,776,000	—
Foreign Equity
	Credit Suisse First Boston	$ 6,855 ,000	—
	Deutsche Bank	2,855 ,000	—
	UBS	13,014 ,000	—
Global Stock
	Citi corp	$ 1,868 ,000	—
	Credit Suisse First Boston	347 ,000	—
	Merrill Lynch	588 ,000	—
	UBS	922 ,000	—
International Equity Index
	UBS	$476 ,000	—
International Growth & Income
	ABN Amro	$4,323,000	—
	Deutsche Bank	1,532 ,000	—
	UBS	4,557 ,000	—
International Stock
	Credit Suisse First Boston	$ 45,260 ,000	—
	Deutsche Bank	18,848 ,000	—
	UBS	85,925 ,000	—
Summit Cash Reserves
	Citigroup	—	$ 22,547 ,000
	Goldman Sachs	—	15,000 ,000
	Morgan Stanley	—	25 ,000 ,000
U.S. Bond Index
	Bank of America	—	$ 715 ,000
	BB&T	—	295,000
	Bear Stearns	—	1,145,000
	Citigroup	—	663,000
	Credit Suisse First Boston	—	204,000
	Goldman Sachs	—	687 ,000
	HSBC	—	663,000
	J.P. Morgan Chase	—	781 ,000
	Lehman Brothers	—	506 ,000
	Merrill Lynch	—	197,000
	Morgan Stanley	—	633 ,000

</R>

PAGE 299

<R>

		Fiscal Year Ended 12/31/03
Fund	Broker	Value of Stock Holdings	Value of Bond Holdings
Balanced
	Bank of New York	$3,312,000	—
	Bear Stearns	—	$1,272,000
	Citigroup	27,713,000	1,510,000
	Credit Suisse First Boston	—	1,301,000
	Deutsche Bank	1,793,000	—
	Goldman Sachs	7,770,000	2,781,000
	J.P. Morgan Chase	10,792,000	6,154,000
	Lehman Brothers	—	1,485,000
	Morgan Stanley	9,010,000	7,510,000
	Prudential	2,673,000	—
Blue Chip Growth
	Citigroup	$282,988,000	—
	Goldman Sachs	66,643,000	—
	Legg Mason	34,114,000	—
	Merrill Lynch	90,907,000	—
	Morgan Stanley	75,231,000	—
Capital Opportunity
	Bank of America	$756,000	—
	Goldman Sachs	424,000	—
	J.P. Morgan Chase	911,000	—
	Lehman Brothers	178,000	—
	Merrill Lynch	440,000	—
Diversified Small-Cap Growth
	Investment Technology Group	$137,000	—
	Legg Mason	141,000	—
Dividend Growth
	Citigroup	$19,173,000	—
	Morgan Stanley	5,787,000	—
	Prudential	2,089,000	—
Equity Income
	Bank of America	$119,841,000	—
	Citigroup	108,730,000	—
	J.P. Morgan Chase	121,209,000	—
	Morgan Stanley	101,272,000	—
Equity Index 500
	Bear Stearns	$3,002,000	—
	Citigroup	91,928,000	—
	Goldman Sachs	17,201,000	—
	J.P. Morgan Chase	27,444,000	—
	Lehman Brothers	7,819,000	—
	Merrill Lynch	20,426,000	—
	Morgan Stanley	23,147,000	—
	State Street Corp.	6,322,000	—
Extended Equity Market Index
	Investment Technology Group	$32,000	—
	Legg Mason	193,000	—
	Raymond James	72,000	—
Financial Services
	Citigroup	$16,901,000	—
	Goldman Sachs	10,436,000	—
	J.P. Morgan Chase	17,116,000	—
	Lehman Brothers	10,965,000	—
	Merrill Lynch	15,308,000	—
	Morgan Stanley	17,303,000	—
	Prudential	8,120,000	—
Growth & Income
	Citigroup	$48,297,000	—
	Goldman Sachs	17,771,000	—
	J.P. Morgan Chase	33,975,000	—
	Morgan Stanley	24,653,000	—
	Prudential	8,354,000	—
Growth Stock
	Citigroup	$211,634,000	—
	Credit Suisse First Boston	42,971,000	—
	Goldman Sachs	21,721,000	—
	Merrill Lynch	70,966,000	—
	Morgan Stanley	39,352,000	—
Institutional Large-Cap Core Growth
	Bank of America	$217,000	—
	Citigroup	810,000	—
	Goldman Sachs	222,000	—
	Merrill Lynch	141,000	—
	Morgan Stanley	191,000	—
Institutional Large-Cap Growth
	Citigroup	$878,000	—
	Morgan Stanley	324,000	—
Institutional Large-Cap Value
	Bank of America	$676,000	—
	Citigroup	1,584,000	—
	J.P. Morgan Chase	977,000	—
	Merrill Lynch	525,000	—
	Morgan Stanley	798,000	—
	Prudential	604,000	—
New America Growth
	Citigroup	$12,135,000	—
	Goldman Sachs	15,303,000	—
	Lehman Brothers	6,950,000	—
	Morgan Stanley	6,887,000	—
Total Equity Market Index
	Bear Stearns	$178,000	—
	Citigroup	5,418,000	—
	Goldman Sachs	1,027,000	—
	Investment Technology Group	29,000	—
	J.P. Morgan Chase	1,609,000	—
	Legg Mason	116,000	—
	Lehman Brothers	458,000	—
	Merrill Lynch	1,185,000	—
	Morgan Stanley	1,366,000	—
	Raymond James	45,000	—
	State Street Corp.	375,000	—
Value
	Citigroup	$10,921,000	—
	J.P. Morgan Chase	16,529,000	—
	Morgan Stanley	26,041,000	—
	Prudential	10,443,000	—

</R>

PAGE 301

Portfolio Turnover

The portfolio turnover rates for the funds (if applicable) for the fiscal years indicated are as follows:

Fund	Fiscal Year Ended
	2/29/04	2/28/03	2/28/02
California Tax-Free Bond	19.9 %	28.5 %	39.0 %
California Tax-Free Money	(a)	(a)	(a)
Florida Intermediate Tax-Free	17.3	12.8	15.3
Georgia Tax-Free Bond	29.2	24.8	32.1
Maryland Short-Term Tax-Free Bond	35.5	31.9	23.8
Maryland Tax-Free Bond	33.0	19.4	18.5
Maryland Tax-Free Money	(a)	(a)	(a)
New Jersey Tax-Free Bond	14.0	14.7	17.0
New York Tax-Free Bond	28.7	30.0	33.5
New York Tax-Free Money	(a)	(a)	(a)
Tax-Efficient Balanced	18.2	21.3	24.3
Tax-Efficient Growth	13.4	17.6	8.5
Tax-Efficient Multi-Cap Growth	15.3	27.0	15.4
Tax-Exempt Money	(a)	(a)	(a)
Tax-Free High Yield	26.5	30.8	32.7
Tax-Free Income	26.9	24.4	28.2
Tax-Free Intermediate Bond	30.0	20.7	19.7
Tax-Free Short-Intermediate	41.6	29.7	30.0
Virginia Tax-Free Bond	29.2	33.5	47.1

(a) Money funds are not required to show portfolio turnover.

<R>

Fund	Fiscal Year Ended
	5/31/04	5/31/03	5/31/02
Corporate Income	82.9 %	92.9 %	91.1 %
GNMA	302.1	385.8 (a)	145.2
Government Reserve Investment	(b)	(b)	(b)
High Yield	74.0	59.9	71.3
Inflation Protected Bond	26.9	35.6 (c)	(d)
Institutional Core Plus	(d)	(d)	(d)
Institutional High Yield	73.5	72.3	(d)
New Income	219.0	221.2	222.0
Personal Strategy Balanced	72.9	87.8	97.2
Personal Strategy Growth	47.2	52.5	68.4
Personal Strategy Income	97.5	108.5	115.9
Prime Reserve	(b)	(b)	(b)
Reserve Investment	(b)	(b)	(b)
Retirement 2005	20.6 (c)	(d)	(d)
Retirement 2010	0.5	12.8 (c)	(d)
Retirement 2015	0.6 (c)	(d)	(d)
Retirement 2020	0.0	4.1 (c)	(d)
Retirement 2025	3.4 (c)	(d)	(d)
Retirement 2030	8.8	3.1 (c)	(d)
Retirement 2035	13.1 (c)	(d)	(d)
Retirement 2040	1.2	18.8 (c)	(d)
Retirement Income	3.9	6.2 (c)	(d)
Short-Term Bond	69.5	110.1 (a)	49.9
U.S. Treasury Intermediate	77.4	105.6	104.4
U.S. Treasury Long-Term	51.9	65.5	48.5
U.S. Treasury Money	(b)	(b)	(b)

</R>

PAGE 303

<R>

(a) The fund`s higher portfolio turnover for this year was due primarily to increased trading of mortgage dollar rolls.

</R>

(b) Money funds are not required to show portfolio turnover.

(c ) Annualized.

(d) Prior to commencement of operations.

<R>

Fund	Fiscal Year Ended
	10/31/0 4	10/31/03	10/31/02
Emerging Europe & Mediterranean	67.7 %	54.1 %	94.5 %
Emerging Markets Stock	70.0	65.6	70.5
European Stock	22.5	23.1	16.1
Global Stock	72.3	38.7	48.4
Institutional Emerging Markets Equity	69.1	70.4	(a)
Institutional Foreign Equity	28 .8	27.8	20.0
International Discovery	106.4	115.9	93.9
International Equity Index	58.2	39.4	49.0
International Growth & Income	45.8	53.2	24.6
International Stock	28 .2	25.2	21.6
Japan	212.4	254.7 ( b )	104.2
Latin America	34.8	27.4	21.0
New Asia	72.3	71.7	72.0
Summit Cash Reserves	( c )	( c )	( c )
Summit GNMA	198.6	312.0	327.9
Summit Municipal Income	30.5	37.0	47.3
Summit Municipal Intermediate	26.5	29.8	18.5
Summit Municipal Money Market	( c )	( c )	( c )
U.S. Bond Index	167.1	190.3	140.4

</R>

(a) Prior to commencement of operations.

<R>

(b) The increase in the fund`s portfolio turnover from 2002 to 2003 was primarily the result of changes in the investment advisory group. New membership in the group had a different outlook on a number of the fund`s portfolio holdings and initiated changes in the composition of the portfolio as a result.

</R>

<R>

( c ) Money funds are not required to show portfolio turnover.

</R>

<R>

Fund	Fiscal Year Ended
	12/31/0 3	12/31/0 2	12/31/0 1
Balanced	38.4 %	49.1 %	36.0 %
Blue Chip Growth	32.6	46.2	48.3
Capital Appreciation	17.9	17.6	25.1
Capital Opportunity	47.5	48.2	53.6
Developing Technologies	66.3	81.5	107.5
Diversified Mid-Cap Growth	( b )	( b )	( b )
Diversified Small-Cap Growth	23.3	43.8	30.3
Dividend Growth	17.5	20.4	34.9
Emerging Markets Bond	68.6	51.4	75.5
Equity Income	11.8	15.2	17.3
Equity Index 500	1.2	6.6	4.0
Extended Equity Market Index	8.5	21.0	31.3
Financial Services	50.8	49.7	54.8
Global Technology	151.4	211.4	189.2
Growth & Income	40.5	44.7	65.9
Growth Stock	35.0	46.9	64.1
Health Sciences	44.8	62.7	74.6
Institutional Large-Cap Core Growth	8.6	( b )	( b )
Institutional Large-Cap Growth	73.3	91.3	98.2 (a)
Institutional Large-Cap Value	2 8.9	25.3	106.3
Institutional Mid-Cap Equity Growth	52.2	38.1	48.6
Institutional Small-Cap Stock	22.2	19.1	26.9
International Bond	38.5	113.9	107.6
Media & Telecommunications	1 23.5	184.9	241.1
Mid-Cap Growth	3 0.2	36.0	43.0
Mid-Cap Value	5 0.4	51.1	57.5
New America Growth	61. 6	61.5	52.1
New Era	1 7.7	11.5	17.9
New Horizons	28.6	23.7	27.4
Real Estate	4.5	9.8	37.2
Science & Technology	47.8	60.8	143.6
Small-Cap Stock	16.3	15.3	16.5
Small-Cap Value	1 0.3	12.2	16.8
Spectrum Growth	2.3	3.9	6.1
Spectrum Income	4.0	14.1	22.7
Spectrum International	47.1	94.4	30.6
Total Equity Market Index	2.3	5.6	8.6
Value	30.6	29.6	42.2

</R>

(a ) Annualized.

( b ) Prior to commencement of operations.

PAGE 305

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PricewaterhouseCoopers LLP, 250 West Pratt Street, 21st Floor, Baltimore, Maryland 21201, are the independent registered public accounting firm to the funds.

<R>

Except for Diversified Mid-Cap Growth Fund whose financial statements are included on the following page, the financial statements and Report of Independent Registered Public Accounting Firm of the funds included in each fund`s annual report are incorporated into this SAI by reference. A copy of the annual report of each fund with respect to which an inquiry is made will accompan y this SAI.

</R>

T. Rowe price Diversified MiD-Cap GrOWTH fund

DECEMBER 15, 2003

statement of assets and liabilities

Assets

Cash $100,000

Prepaid registration fees 49,666

Total assets 149,666

Liabilities

Payable to manager (49,666)

Total liabilities (49,666)

NET ASSETS $100,000

OFFERING AND REDEMPTION PRICE $ 10.00

Net Assets Consist of:

Paid-in-capital applicable to 10,000 shares of $0.0001

par value capital stock outstanding; 1,000,000,000

shares authorized $100,000

PAGE 307

T. Rowe price Diversified MiD-Cap GrOWTH fund

STATEMENT OF OPERATIONS

October 22, 2003

through

December 15, 2003

Expenses

Organization expenses $ 59 0

Reimbursed by manager (590)

Net investment income --

INCREASE (DECREASE) IN NET ASSETS

FROM START-UP OPERATIONS $ --

The accompanying notes are an integral part of these financial statements.

NOTE TO FINANCIAL STATEMENTS

<R>

T. Rowe Price Diversified Mid-Cap Growth Fund, Inc. (the fund) was organized on October 22, 2003, as a Maryland corporation and is registered under the Investment Company Act of 1940 as a diversified, open-end management company. Through December 15, 2003, the fund had no operations other than those matters related to organization and registration as an investment company, the registration of shares for sale under the Securities Act of 1933, and the sale of 10,000 shares of the fund at $10.00 per share on December 15, 2003 to T. Rowe Price Associates, Inc. via share exchange from a T. Rowe Price money market mutual fund. The exchange was settled in the ordinary course of business on December 15, 2003 with the transfer of $100,000 cash.

</R>

<R>

The fund has entered into an investment management agreement with T. Rowe Price Associates, Inc. (the manager). Under the terms of the investment management agreement, the manager is required to bear all expenses of the fund, excluding interest, taxes, brokerage commissions, and extraordinary expenses, through April 30, 2006, which would otherwise cause the fund`s ratio of total expenses to average net assets (expense ratio) to exceed its expense limitation of 1.25%. Through April 30, 2008, the fund is required to reimburse the manager for these expenses, provided that average net assets have grown or expenses have declined sufficiently to allow reimbursement without causing the fund`s expense ratio to exceed its expense limitation. Through December 15, 2003, the fund incurred organization expenses in the approximate amount of $590, which the manager has paid on the fund`s behalf.

</R>

Also, through December 15, 2003, initial registration fees in the amount of $49,666 were prepaid by the manager on behalf of the fund. This amount will be repaid to the manager upon commencement of operations and prepaid registration fees will be amortized to expense over the period of benefit, typically one year.

PAGE 309

Report of Independent A UDITORS

To the Board of Directors and Shareholder of T. Rowe Price Diversified Mid-Cap Growth Fund

In our opinion, the accompanying statement of assets and liabilities and the related statement of operations present fairly, in all material respects, the financial position of T. Rowe Price Diversified Mid-Cap Growth Fund, ( the "Fund") at December 15, 2003, and the results of its operations for the period presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Fund`s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Baltimore, Maryland

December 15, 2003

PART I I

Part II of this SAI describes risks, policies , and practices that apply to the funds in the T. Rowe Price family of funds.

INVESTMENT OBJECTIVES AND POLICIES

The following information supplements the discussion of the funds` investment objectives and policies discussed in the funds` prospectuses. You should refer to each fund`s prospectus to determine the types of securities in which the fund invests. You wi l l then be able to review additional information set forth herein on those types of securities and their risks.

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Shareholder approval is required to substantively change fund objectives. Unless otherwise specified, the investment programs and restrictions of the funds are not fundamental policies. The funds` operating policies are subject to change by the funds ` Boards without shareholder approval. The funds` fundamental policies may not be changed without the approval of at least a majority of the outstanding shares of the funds or, if it is less, 67% of the shares represented at a meeting of shareholders at which the holders of more than 50% of the shares are represented.

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RISK FACTORS

Reference is also made to the sections entitled " Investment Program " and "Portfolio Management Practices" for discussions of the risks associated with the investments and practices described therein as they apply to the funds.

Risk Factors of Foreign Investing

Foreign securities

Foreign securities include U.S. dollar-denominated and non-U.S. dollar-denominated securities of foreign issuers.

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There are special risks in foreign investing. Certain of these risks are inherent in any mutual fund investing in foreign securities while others relate more to the countries in which the funds will invest. Many of the risks are more pronounced for investments in developing or emerging market countries, such as many of the countries of Asia, Latin America, Eastern Europe, Russia, Africa, and the Middle East. T here is no universally accepted definition of a developing country .

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Political and Economic Factors Individual foreign economies of some countries differ favorably or unfavorably from the United States` economy in such respects as growth of gross national product, rate of inflation, capital reinvestment, resource self-sufficiency, and balance of payments position. The internal politics of some foreign countries are not as stable as in the United States. For example, in 1991, the existing government in Thailand was overthrown in a military coup. In 1994-1995, the Mexican peso plunged in value , setting off a severe crisis in the Mexican economy. Asia is still coming to terms with its own crisis and recessionary conditions sparked by widespread currency weakness in late 1997. In 1998, there was substantial turmoil in markets throughout the world. In 1999, the democratically elected government of Pakistan was overthrown by a military coup. The Russian government also defaulted on all its domestic debt. In addition, significant external political risks currently affect some foreign countries. Both Taiwan and China still claim sovereignty of one another and there is a demilitarized border and hostile relations between North and South Korea. In 2001, Argentina defaulted on its foreign-owned debt and had the peso devalued, resulting in the resignation of its president and deadly riots in December in response to government-mandated austerity measures. In 2002, many countries throughout the world struggled economically in the face of a severe decline in the U.S. stock market, a weak American economy, threats of war, and terrorism. In 2003 and 2004, terrorism has continued to create uncertainty in markets.

Governments in certain foreign countries continue to participate to a significant degree, through ownership interest or regulation, in their respective economies. Action by these governments could have a significant effect on market prices of securities and payment of dividends. The economies of many foreign countries are heavily

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dependent upon international trade and are accordingly affected by protective trade barriers and economic conditions of their trading partners. The enactment by these trading partners of protectionist trade legislation could have a significant adverse effect upon the securities markets of such countries.

Currency Fluctuations Investments in foreign securities will normally be denominated in foreign currencies. American Depository Receipts ( "ADRs" ) are investments in foreign companies but are denominated in U.S. dollars. Accordingly, a change in the value of any such currency against the U.S. dollar will result in a corresponding change in the U.S. dollar value of the funds` assets denominated in that currency. Such changes will also affect the funds` income. Generally, when a given currency appreciates against the dollar (the dollar weakens) , the value of the funds` securities denominated in that currency will rise. When a given currency depreciates against the dollar (the dollar strengthens) , the value of the funds` securities denominated in that currency would be expected to decline.

Investment and Repatriation Restrictions Foreign investment in the securities markets of certain foreign countries is restricted or controlled to varying degrees. These restrictions limit and , at times , preclude investment in certain of such countries and increase the cost and expenses of the funds . Investments by foreign investors are subject to a variety of restrictions in many developing countries. These restrictions may take the form of prior governmental approval, limits on the amount or type of securities held by foreigners, and limits on the types of companies in which foreigners may invest. Additional or different restrictions may be imposed at any time by these or other countries in which the funds invest . In addition, the repatriation of both investment income and capital from several foreign countries is restricted and controlled under certain regulations, including in some cases the need for certain government consents. For example, capital invested in Chile normally cannot be repatriated for one year. In 1998, the government of Malaysia imposed currency controls which effectively made it impossible for foreign investors to convert Malaysian ringgits to foreign currencies.

Market Characteristics It is contemplated that most foreign securities will be purchased in over-the-counter markets or on securities exchanges located in the countries in which the respective principal offices of the issuers of the various securities are located, if that is the best available market. Investments in certain markets may be made through ADRs and Global Depository Receipts ( "GDRs" ) traded in the United States or on foreign exchanges. Foreign securities markets are generally not as developed or efficient as, and more volatile than, those in the United States. While growing in volume, they usually have substantially less volume than U.S. markets and the funds` portfolio securities may be less liquid and subject to more rapid and erratic price movements than securities of comparable U.S. companies. Securities may trade at price/earnings multiples higher than comparable U.S. securities and such levels may not be sustainable. Commissions on foreign securities trades are generally higher than commissions on U.S. exchanges, and while there are an increasing number of overseas securities markets that have adopted a system of negotiated rates, a number are still subject to an established schedule of minimum commission rates. There is generally less government supervision and regulation of foreign securities exchanges, brokers, and listed companies than in the United States. Moreover, settlement practices for transactions in foreign markets may differ from those in U.S. markets. Such differences include delays beyond periods customary in the United States and practices, such as delivery of securities prior to receipt of payment, which increase the likelihood of a "failed settlement." Failed settlements can result in losses to the funds.

Investment Funds The funds may invest in investment funds which have been authorized by the governments of certain countries specifically to permit foreign investment in securities of companies listed and traded on the stock exchanges in these respective countries. I nvestment in these funds is subject to the provisions of the 1940 Act. If the funds invest in such investment funds, shareholders will bear not only their proportionate share of the expenses of the fund (including operating expenses and the fees of the investment manager), but also will indirectly bear similar expenses of the underlying investment funds. In addition, the securities of these investment funds may trade at a premium over their net asset value.

Information and Supervision There is generally less publicly available information about foreign companies comparable to reports and ratings that are published about companies in the United States. Foreign companies are also generally not subject to uniform accounting, auditing and financial reporting standards, practices, and requirements comparable to those applicable to U.S. companies. It also is often more difficult to keep currently informed of corporate actions which affect the prices of portfolio securities.

Taxes The dividends and interest payable on certain of the funds` foreign portfolio securities may be subject to foreign withholding taxes, thus reducing the net amount of income available for distribution to the funds` shareholders.

Costs Investors should understand that the expense ratios of a fund investing primarily in foreign securities can be expected to be higher than investment companies investing in domestic securities since the cost of maintaining the custody of foreign securities and the rate of advisory fees paid by the fund is higher.

Other With respect to certain foreign countries, especially developing and emerging ones, there is the possibility of adverse changes in investment or exchange control regulations, expropriation or confiscatory taxation, limitations on the removal of funds or other assets of the funds, political or social instability, or diplomatic developments which could affect investments by U.S. persons in those countries.

Small Companies Small companies may have less experienced management and fewer management resources than larger firms. A smaller company may have greater difficulty obtaining access to capital markets and may pay more for the capital it obtains. In addition, smaller companies are more likely to be involved in fewer market segments, making them more vulnerable to any downturn in a given segment. Some of these factors may also apply, to a lesser extent, to medium - size d companies.

Eastern Europe and Russia Changes occurring in Eastern Europe and Russia today could have long-term potential consequences. As restrictions fall, this could result in rising standards of living, lower manufacturing costs, growing consumer spending, and substantial economic growth. However, investment in most countries of Eastern Europe and Russia is highly speculative at this time. Political and economic reforms are too recent to establish a definite trend away from centrally planned economies and state-owned industries. In many of the countries of Eastern Europe and Russia, there is no stock exchange or formal market for securities. Such countries may also have government exchange controls, currencies with no recognizable market value relative to the established currencies of western market economies, little or no experience in trading in securities, no financial reporting standards, a lack of a banking and securities infrastructure to handle such trading, and a legal tradition which does not recognize rights in private property. In addition, these countries may have national policies which restrict investments in companies deemed sensitive to the country`s national interest. Further, the governments in such countries may require governmental or quasi-governmental authorities to act as custodian of the funds` assets invested in such countries, and these authorities may not qualify as a foreign custodian under the 1940 Act and exemptive relief from such Act may be required. All of these considerations are among the factors which result in significant risks and uncertainties when investing in Eastern Europe and Russia.

Latin America

Inflation Most Latin American countries have experienced, at one time or another, severe and persistent levels of inflation, including, in some cases, hyperinflation. This has, in turn, led to high interest rates, extreme measures by governments to keep inflation in check, and a generally debilitating effect on economic growth. Although inflation in many countries has lessened, there is no guarantee it will remain at lower levels.

Political Instability The political history of certain Latin American countries has been characterized by political uncertainty, intervention by the military in civilian and economic spheres, and political corruption. Such developments, if they were to reoccur, could reverse favorable trends toward market and economic reform, privatization, and removal of trade barriers, and result in significant disruption in securities markets.

Foreign Currency Certain Latin American countries may experience sudden and large adjustments in their currency which, in turn, can have a disruptive and negative effect on foreign investors. For example, in late 1994 the Mexican peso lost more than one-third of its value relative to the U.S. dollar. In 1999, the Brazilian real lost 30% of its value against the U.S. dollar. Certain Latin American countries may impose restrictions on the free conversion of their currency into foreign currencies, including the U.S. dollar. There is no significant foreign exchange market for many currencies and it would, as a result, be difficult for the funds to engage in foreign currency transactions designed to protect the value of the funds` interests in securities denominated in such currencies.

Sovereign Debt A number of Latin American countries are among the largest debtors of developing countries. There have been moratoria on, and reschedulings of, repayment with respect to these debts. Such events can restrict the flexibility of these debtor nations in the international markets and result in the imposition of onerous conditions on their economies.

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Japan

Japan has experienced earthquakes and tidal waves of varying degrees of severity, and the risks of such phenomena, and damage resulting therefrom, continue to exist. Japan also has one of the world`s highest population densities. A significant percentage of the total population of Japan is concentrated in the metropolitan areas of Tokyo, Osaka, and Nagoya.

Economy The Japanese economy languished for much of the last decade. Lack of effective governmental action in the areas of tax reform to reduce high tax rates, banking regulation to address enormous amounts of bad debt, and economic reforms to attempt to stimulate spending are among the factors cited as possible causes of Japan`s economic problems. The yen has had a history of unpredictable and volatile movements against the U.S. dollar; a weakening yen hurts U.S. investors holding yen-denominated securities. Finally, the Japanese stock market has experienced wild swings in value and has often been considered significantly overvalued.

Energy Japan has historically depended on oil for most of its energy requirements. Almost all of its oil is imported, the majority from the Middle East. In the past, oil prices have had a major impact on the domestic economy, but more recently Japan has worked to reduce its dependence on oil by encouraging energy conservation and use of alternative fuels. In addition, a restructuring of industry, with emphasis shifting from basic industries to processing and assembly type industries, has contributed to the reduction of oil consumption. However, there is no guarantee this favorable trend will continue.

Foreign Trade Overseas trade is important to Japan`s economy. Japan has few natural resources and must export to pay for its imports of these basic requirements. Because of the concentration of Japanese exports in highly visible products such as automobiles, machine tools , and semiconductors and the large trade surpluses ensuing therefrom, Japan has had difficult relations with its trading partners, particularly the U.S. It is possible that trade sanctions or other protectionist measures could impact Japan adversely in both the short term and long term.

Asia (ex-Japan)

Political Instability The political history of some Asian countries has been characterized by political uncertainty, intervention by the military in civilian and economic spheres, and political corruption. Such developments, if they continue to occur, could reverse favorable trends toward market and economic reform, privatization, and removal of trade barriers and result in significant disruption in securities markets.

Foreign Currency Certain Asian countries may have managed currencies which are maintained at artificial levels to the U.S. dollar rather than at levels determined by the market. This type of system can lead to sudden and large adjustments in the currency which, in turn, can have a disruptive and negative effect on foreign investors. For example, in 1997 the Thai baht lost 46.75% of its value against the U.S. dollar. Certain Asian countries also may restrict the free conversion of their currency into foreign currencies, including the U.S. dollar. There is no significant foreign exchange market for certain currencies and it would, as a result, be difficult for the funds to engage in foreign currency transactions designed to protect the value of the funds` interests in securities denominated in such currencies.

Debt A number of Asian companies are highly dependent on foreign loans for their operation. In 1997, several Asian countries were forced to negotiate loans from the International Monetary Fund and others that impose strict repayment term schedules and require significant economic and financial restructuring.

Risk Factors of Investing in Taxable Debt Obligations

General

Yields on short-, intermediate-, and long-term securities are dependent on a variety of factors, including the general conditions of the money, bond , and foreign exchange markets ; the size of a particular offering ; the maturity of the obligation ; and the rating of the issue. Debt securities with longer maturities tend to produce 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 funds investing in debt securities to achieve their investment objectives is also dependent on the continuing ability of the issuers of the debt securities in which the funds invest to meet their obligations for the payment of interest and principal when due.

After purchase by the funds, a debt security may cease to be rated or its rating may be reduced below the minimum required for purchase by the funds. Neither event will require a sale of such security by the funds. However, such events will be considered in determin ing whether the funds should continue to hold the security. To the extent that the ratings given by Moody`s , S&P , or others may change as a result of changes in such organizations or their rating systems, the funds will attempt to use comparable ratings as standards for investments in accordance with the investment policies contained in the prospectus. The ratings of Moody`s, S&P, and others represent their opinions as to the quality of securities that they undertake to rate. Ratings are not absolute standards of quality. When purchasing unrated securities, T. Rowe Price, under the supervision of the funds` Boards , determines whether the unrated security is of a quality comparable to that which the funds are allowed to purchase.

Full Faith and Credit Securities

Securities backed by the full faith and credit of the United States (for example, GNMA and U.S. Treasury securities) are generally considered to be among the most, if not the most, creditworthy investments available. While the U.S. government has honored its credit obligations continuously for the last 200 years, political events have , at times, called into question whether the United States would default on its obligations. Such an event would be unprecedented and there is no way to predict its results on the securities markets or the funds . However, it is very likely that default by the United States would result in losses to the fund s.

Mortgage Securities

Mortgage-backed securities, including GNMAs , differ from conventional bonds in that principal is paid back over the life of the security rather than at maturity. As a result, the holder of a mortgage-backed security (i.e., a fund) receives monthly scheduled payments of principal and interest, and may receive unscheduled principal payments representing prepayments on the underlying mortgages. Therefore , GNMA securities may not be an effective means of "locking in" long-term interest rates due to the need for the funds to reinvest scheduled and unscheduled principal payments. The incidence of unscheduled principal prepayments is also likely to increase in mortgage pools owned by the funds when prevailing mortgage loan rates fall below the mortgage rates of the securities underlying the individual pool. The effect of such prepayments in a falling rate environment is to (1) cause the funds to reinvest principal payments at the then lower prevailing interest rate, and (2) reduce the potential for capital appreciation beyond the face amount of the security and adversely affect the return to the funds. Conversely, in a rising interest rate environment such prepayments can be reinvested at higher prevailing interest rates which will reduce the potential effect of capital depreciation to which bonds are subject when interest rates rise. When interest rates rise and pre payments decline, GNMA securities become subject to extension risk or the risk that the price of the securities will fluctuate more. In addition, prepayments of mortgage securities purchased at a premium (or discount) will cause such securities to be paid off at par, resulting in a loss (gain) to the funds. T. Rowe Price will actively manage the funds` portfolios in an attempt to reduce the risk associated with investment in mortgage-backed securities.

The market value of adjustable rate mortgage securities ( "ARMs" ), like other U.S. government securities, will generally vary inversely with changes in market interest rates, declining when interest rates rise and rising when interest rates decline. Because of their periodic adjustment feature, ARMs should be more sensitive to short-term interest rates than long-term rates. They should also display less volatility than long-term mortgage-backed securities. Thus, while having less risk of a decline during periods of rapidly rising rates, ARMs may also have less potential for capital appreciation than other investments of comparable maturities. Interest rate caps on mortgages underlying ARM securities may prevent income on the ARM from increasing to prevailing interest rate levels and cause the securities to decline in value. In addition, to the extent ARMs are purchased at a premium, mortgage foreclosures and unscheduled principal prepayments may result in some loss of the holders` principal investment to the extent of the premium paid. On the other hand, if ARMs are purchased at a discount, both a scheduled payment of principal and an unscheduled prepayment of principal will increase current and total returns and will accelerate the recognition of income that , when distributed to shareholders , will be taxable as ordinary income.

High Yield S ecurities

Special Risks of Investing in Junk Bonds The following special considerations are additional risk factors o f funds investing in lower-rated securities.

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Lower-Rated Debt Securities Market An economic downturn or increase in interest rates is likely to have a greater negative effect on this market, the value of lower-rated debt securities in the funds` portfolios, the funds` net asset value and the ability of the bonds` issuers to repay principal and interest, meet projected business goals, and obtain additional financing than on higher-rated securities. These circumstances also may result in a higher incidence of defaults than with respect to higher-rated securities. Investment in funds which invest in lower-rated debt securities is more risky than investment in shares of funds which invest only in higher-rated debt securities.

Sensitivity to Interest Rate and Economic Changes Prices of lower-rated debt securities may be more sensitive to adverse economic changes or corporate developments than higher-rated investments. Debt securities with longer maturities, which may have higher yields, may increase or decrease in value more than debt securities with shorter maturities. Market prices of lower-rated debt securities structured as zero - coupon or pay-in-kind securities are affected to a greater extent by interest rate changes and may be more volatile than securities which pay interest periodically and in cash. Where it deems it appropriate and in the best interests of fund shareholders, the funds may incur additional expenses to seek recovery on a debt security on which the issuer has defaulted and to pursue litigation to protect the interests of security holders of its portfolio companies.

Liquidity and Valuation Because the market for lower-rated securities may be thinner and less active than for higher-rated securities, there may be market price volatility for these securities and limited liquidity in the resale market. Nonrated securities are usually not as attractive to as many buyers as rated securities are, a factor which may make nonrated securities less marketable. These factors may have the effect of limiting the availability of the securities for purchase by the funds and may also limit the ability of the funds to sell such securities at their fair value either to meet redemption requests or in response to changes in the economy or the financial markets.

Adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the values and liquidity of lower-rated debt securities, especially in a thinly traded market. To the extent the funds own or may acquire illiquid or restricted lower-rated securities, these securities may involve special registration responsibilities, liabilities , costs, and liquidity and valuation difficulties. Changes in values of debt securities which the funds own will affect its net asset value per share. If market quotations are not readily available for the funds` lower-rated or nonrated securities, these securities will be valued by a method that the funds` Boards believe accurately reflects fair value. Judgment plays a greater role in valuing lower-rated debt securities than with respect to securities for which more external sources of quotations and last sale information are available.

Taxation Special tax considerations are associated with investing in lower-rated debt securities structured as zero - coupon or pay-in-kind securities. The funds accrue income on these securities prior to the receipt of cash payments. The funds must distribute substantially all of its income to its shareholders to qualify for pass- through treatment under the tax laws and may, therefore, have to dispose of its portfolio securities to satisfy distribution requirements.

Other Under an exemptive order issued by the SEC, certain of the funds are permitted to invest the portion of their assets allocated to high-yield bonds in the T. Rowe Price Institutional High Yield Fund. Such an investment would allow funds to obtain the benefits of a fully diversified high-yield bond portfolio regardless of the amount of assets the funds invest in high-yield bonds.

The amount of any investment management fees that T. Rowe Price earns on the assets of fund s investing in the Institutional High Yield Fund will be used to offset investment management fees otherwise due T. Rowe Price from the investing fund s . Thus, T. Rowe Price will not receive any additional investment management fees from use of the Institutional High Yield Fund in this manner.

Risk Factors of Investing in Municipal Securities

General

Yields on municipal securities are dependent on a variety of factors, including the general conditions of the money market and the municipal bond market, the size of a particular offering, the maturity of the obligations, and the rating of the issue. Municipal securities with longer maturities tend to produce 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 municipal 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 all the funds to achieve

their investment objectives is also dependent on the continuing ability of the issuers of municipal securities in which the funds invest to meet their obligations for the payment of interest and principal when due. The ratings of Moody`s, S&P, and Fitch IBCA, Inc. ( "Fitch" ) represent their opinions as to the quality of municipal securities which they undertake to rate. Ratings are not absolute standards of quality; consequently, municipal securities with the same maturity, coupon, and rating may have different yields. There are variations in municipal securities, both within a particular classification and between classifications, depending on numerous factors. It should also be pointed out that, unlike other types of investments, offerings of municipal securities have traditionally not been subject to regulation by, or registration with, the SEC, although there have been proposals which would provide for regulation in the future.

The federal bankruptcy statutes relating to the debts of political subdivisions and authorities of states of the United States provide that, in certain circumstances, such subdivisions or authorities may be authorized to initiate bankruptcy proceedings without prior notice to or consent of creditors, which proceedings could result in material and adverse changes in the rights of holders of their obligations.

Proposals have been introduced in Congress to restrict or eliminate the federal income tax exemption for interest on municipal securities, and similar proposals may be introduced in the future. Proposed "Flat Tax" and "Value Added Tax" proposals would also have the effect of eliminating the tax preference for municipal securities. Some of the past proposals would have applied to interest on municipal securities issued before the date of enactment, which would have adversely affected their value to a material degree. If such a proposal were enacted, the availability of municipal securities for investment by the funds and the value of a fund`s portfolio would be affected and, in such an event, the funds would reevaluate their investment objectives and policies. Also, recent changes to tax laws broadly lowering tax rates , including lower tax rates on dividends and capital gains, could have a negative impact on the desirability of owning municipal securities.

Although the banks and securities dealers with which the funds will transact business will be banks and securities dealers that T. Rowe Price believes to be financially sound, there can be no assurance that they will be able to honor their obligations to the funds with respect to such transactions.

Municipal Bond Insurance T he funds may purchase insured bonds from time to time. Municipal bond insurance provides an unconditional and irrevocable guarantee that the insured bond`s principal and interest will be paid when due. The guarantee is purchased from a private, non governmental insurance company.

There are two types of insured securities that may be purchased by the funds: bonds carrying either (1) new issue insurance; or (2) secondary insurance. New issue insurance is purchased by the issuer of a bond in order to improve the bond`s credit rating. By meeting the insurer`s standards and paying an insurance premium based on the bond`s principal value, the issuer is able to obtain a higher credit rating for the bond. Once purchased, municipal bond insurance cannot be canceled, and the protection it affords continues as long as the bonds are outstanding and the insurer remains solvent.

The funds may also purchase bonds that carry secondary insurance purchased by an investor after a bond`s original issuance. Such policies insure a security for the remainder of its term. Generally, the funds expect that portfolio bonds carrying secondary insurance will have been insured by a prior investor. However, the funds may, on occasion, purchase secondary insurance on their own behalf.

Each of the municipal bond insurance companies has established reserves to cover estimated losses. Both the method of establishing these reserves and the amount of the reserves vary from company to company. The risk that a municipal bond insurance company may experience a claim extends over the life of each insured bond. Municipal bond insurance companies are obligated to pay a bond`s interest and principal when due if the issuing entity defaults on the insured bond. Although defaults on insured municipal bonds have been low to date, there is no assurance this low rate will continue in the future. A higher than expected default rate could deplete loss reserves and adversely affect the ability of a municipal bond insurer to pay claims to holders of insured bonds, such as the funds.

High-Yiel d Securities Lower-quality bonds , commonly referred to as "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 funds invest in such bonds, achievement of their investment objectives will be more dependent on T. Rowe Price`s credit analysis than would be the case if the funds were investing in higher-quality bonds. High-

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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 leveraged 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 the funds to dispose of their 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.

Risk Factors of Investing in Taxable and Tax-Free Money Market Funds

The T. Rowe Price money market fund s will limit their purchases of portfolio instruments to those U.S. dollar- denominated securities which the funds` Boards determine present minimal credit risk and which are e ligible s ecurities as defined in Rule 2a-7 under the 1940 Act . Eligible s ecurities are generally securities which have been rated (or whose issuer has been rated or whose issuer has comparable securities rated) in one of the two highest short-term rating categories (which may include sub-categories) by nationally recognized statistical rating organizations (" NRSROs ") or, in the case of any instrument that is not so rated, is of comparable high quality as determined by T. Rowe Price pursuant to written guidelines established under the supervision of the funds` Boards . In addition, the funds may treat variable and floating rate instruments with demand features as short- term securities pursuant to Rule 2a-7 under the 1940 Act.

There can be no assurance that the fund s will achieve their investment objective s or be able to maintain their net asset value s per share at $1.00. The price of the fund s is not guaranteed or insured by the U.S. government and their yield s are not fixed. While the fund s invest in high-grade money market instruments, investment in the fund s is not without risk even if all portfolio instruments are paid in full at maturity. An increase in interest rates could reduce the value of the fund s ` portfolio investments, and a decline in interest rates could increase the value.

State Tax-Free Funds

The following information about the State Tax-Free Funds is updated in June of each year. More current information is available in shareholder reports for these funds.

California Tax-Free Bond and California Tax-Free Money Funds

Risk Factors Associated With a California Portfolio

The funds` concentration in debt obligations of one state carries a higher risk than a portfolio that is geographically diversified. In addition to state general obligations and notes, the funds will invest in local bond issues, lease obligations, and revenue bonds, the credit quality and risk of which will vary according to each security`s own structure and underlying economics.

Debt The state, its agencies, and local governmental entities issued $78.9 billion in debt in 2003. Total state issuance was 46.8% of the total, while local government and authorities issued the remainder for a wide variety of purposes, including transportation, housing, education, electric power, and health care.

As of April 1, 2004, the State of California had approximately $33.3 billion in outstanding general obligation bonds secured by the state`s revenue and taxing power. An additional $20.2 billion in state general obligation debt remains authorized but unissued to comply with voter initiatives and legislative mandates. Another $10.7 billion has qualified for the November 2004 ballot for voter approval. Debt service on roughly 13% of the state`s outstanding general obligation debt is met from revenue-producing projects such as water, harbor, and housing facilities. As part of its cash management program, the state regularly issues short-term notes to meet its disbursement requirements in advance of the receipt of revenues. During fiscal 2003, the state issued $12.5 billion in short-term notes for this purpose; the state issued $3 billion in notes. The state supports $6.9 billion in lease-purchase obligations attributable to the State Public Works Board and other issuers. These obligations are not backed by the full faith and credit of the state; rather, they are subject to annual appropriations from the state`s General Fund.

In addition to the state obligations described above, bonds have been issued by special public authorities in California that are not obligations of the state. These include bonds issued by the California Housing Finance

Agency, the Department of Water Resources, the Department of Veterans Affairs, California State University, and the California Transportation Commission.

E conomy California`s economy is the largest among the 50 states and one of the largest in the world. California`s economy is extraordinarily diverse, broad, and resilient. Its population of 36 million as of July 1, 2003 , continues to grow at roughly 1% per year and represents over 12% of the entire United States population. The state`s per capita personal income in 2003, as estimated by California`s Department of Finance, exceeded the U.S. per capita average by 6%.

California`s economy suffered through a severe recession during the early 1990s but experienced a steady recovery from 1994 to 2000. While the State of California benefited disproportionately from the high- technology sector during the late 1990s, it also suffered greatly when this sector experienced a calamitous reversal in 2001. Exports from California ports fell by 14% in 2001 and by another 13% the following year while unemployment levels rose to 5.8% in 2002. The fallout from the "tech bust" also manifested itself in much lower personal income tax receipts at the state level as capital gains, bonuses, and option income dropped off. The level of economic activity within the state is important as it influences the growth or contraction of state and local government revenues available for operations and debt service.

In the recession of the 1990s, diminished economic activity and overbuilding in certain areas resulted in a contraction in real estate values. To date during this cycle, all urban areas have shown continued increases in property values. Still, declines in property values could still take place and would have a negative effect on the ability of local governments to meet their obligations.

As a state, California is more prone to earthquakes than most other states in the country, creating potential economic losses from damages. On January 17, 1994, a major earthquake, measuring 6.8 on the Richter scale, hit Southern California centered in the area of Northridge. Total damage was estimated at $20 billion, offset to an important extent by significant federal aid.

Legislative Due to the funds` concentration in the State of California and its municipal issuers, the funds may be affected by certain amendments to the California constitution and state statutes that limit the taxing and spending authority of California governmental entities , thus affecting their ability to meet debt service obligations.

In 1978, California voters approved "Proposition 13," adding Article XIIIA to the state constitution which limits ad valorem taxes on real property to 1% of "full cash value" and restricts the ability of taxing entities to increase real property taxes. In subsequent actions, the state substantially increased its expenditures to provide assistance to its local governments to offset the losses in revenues and to maintain essential local services; in the early 1990s the state decreased local aid in response to its own fiscal pressures.

Another constitutional amendment, Article XIIIB, was passed by voters in 1979 prohibiting the state from spending revenues beyond its annually adjusted "appropriations limit." Any revenues exceeding this limit must be returned to the taxpayers as a revision in the tax rate or fee schedule over the following two years. Such a refund, in the amount of $1.1 billion, occurred in fiscal year 1987.

Proposition 218, the "Right to Vote on Taxes Act," was approved by voters in 1996. It further restricts the ability of local governments to levy and collect both existing and future taxes, assessments, and fees. In addition to further limiting the financial flexibility of local governments in the state, it also increases the possibility of voter- determined tax rollbacks and repeals. The interpretation and application of this proposition will ultimately be determined by the courts.

An effect of the tax and spending limitations in California has been a broad scale shift by local governments away from general obligation debt that requires voter approval and pledging future tax revenues toward lease revenue financing that is subject to abatement and does not require voter approval. Lease-backed debt is generally viewed as a less secure form of borrowing and therefore entails greater credit risk. Local governments also raise capital through the use of Mello-Roos, 1915 Act, and Tax Increment Bonds, all of which are generally riskier than general obligation debt as they often rely on tax revenues to be generated by future development for their support.

Proposition 98, enacted in 1988, changed the state`s method of funding education for grades below the university level. Under this constitutional amendment, the schools are guaranteed a minimum share of state

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General Fund revenues. The major effect of Proposition 98 has been to restrict the state`s flexibility to respond to fiscal stress.

Future initiatives, if proposed and adopted, or future court decisions could create renewed pressure on California governments and their ability to raise revenues. The state and its underlying localities have displayed flexibility, however, in overcoming the negative effects of past initiatives.

Financial The dramatic downturn of the high - technology economy and the resultant plunge in state revenues has placed the state`s budget under considerable strain. As mentioned above, the state`s general obligation bonds have been downgraded multiple times over the past two years with the result that, as of May 1, 2004, California has the lowest rated obligations for a state out of all the 50 states.

Fiscal year 2001 was closed with an unrestricted general fund budgetary reserve of $5.4 billion. Much of this reserve was the result of explosive growth in income tax receipts from capital gains and bonus income. The combination of a slowing economy, falling equity markets, and the state`s progressive income tax structure led to a substantial drop in the budgetary reserve to a negative $4.4 billion for fiscal year 2002. The state`s 2003 budget estimated that a deficit of $10.7 billion had developed by June 30 of that year. The budget gap estimated in the governor`s Mid-May 2005 Budget Revision is $14 billion, which he proposes to close through a variety of measures including fund shifts, deficit bond proceeds, fee increases, and lower aid to localities including primary and secondary education. State legislators are currently reviewing the proposal and may not approve all the measures the governor proposes. In addition, the state`s Legislative Analyst`s Office, a watch dog office that offers reviews of fiscal proposals, has stated that the governor`s proposals incorporate considerable risk, particularly in the out years when commitments and deferrals made in the current budget year increasingly come due.

The consequences of the state`s fiscal actions reach far beyond its own general obligation bond ratings. Many state agencies and local governments depend upon state appropriations and are vulnerable to cutbacks. Additionally, the state intends to repay its recently issued Economic Recovery Bonds, issued to help bridge the gap in revenues in the current and the next budget year, with local sales tax receipts. Though the state has promised to make up all revenues shifted from local governments, an inability or unwillingness to fully make up the amount would have a negative impact on local governments.

On December 6, 1994, Orange County filed for protection under Chapter 9 of the U.S. Bankruptcy Code after reports of significant losses in its investment pool. Upon restructuring, the realized losses in the pool were $1.6 billion or 21% of assets. More than 200 public entities, most of which, but not all, are located in Orange County were also depositors in the pool. The county defaulted on a number of its debt obligations. The county emerged from bankruptcy on June 12, 1996. Through a series of long-term financings, it repaid most of its obligations to pool depositors and has become current on its public debt obligations. The balance of claims against the county are payable from any proceeds received from litigation against securities dealers and other parties. The county`s ratings were restored to investment grade in 1998 and were upgraded again in 2000 to 2002.

In a ruling dating from December 2001, the Orange County Superior Court held that the Orange County assessor violated the 2% annual inflation adjustment provision of Proposition 13 by increasing the taxable value of a property by 4% following a decline in valuations. The case had been certified as a class action in Orange County, but local courts in other counties arrived at differing conclusions on similar issues in their counties. The case has been appealed to the state`s Appellate Court and could be further appealed to the state`s Supreme Court. It is not possible at this time to determine the final outcome of the case or when it might be decided. If the Orange County Superior Court`s decision is upheld, the property tax revenues of local governments may be reduced, further affecting local credit quality.

Sectors Certain areas of potential investment concentration present unique risks. A significant portion of the funds` assets may be invested in health care issues. For over a decade, the hospital industry has been under significant pressure to reduce expenses and shorten length of stay, a phenomenon that has negatively affected the financial health of many hospitals. All hospitals are dependent on third-party reimbursement sources such as the federal Medicare and state m edical programs or private insurers. To the extent these third -party payers reduce reimbursement levels, the individual hospitals may be affected. In the face of these pressures, the trend of hospital mergers and acquisitions has accelerated in recent years. These organizational changes present both risks and opportunities for the institutions involved.

The funds may from time to time invest in electric revenue issues. The financial performance of these utilities was impacted by the industry moves toward deregulation and increased competition. California`s electric utility restructuring plan, Assembly Bill 1890, permitted direct competition to be phased in between 1998 and 2002. This restructuring plan proved to be flawed as it placed over reliance on the spot market for power purchases during a period of substantial supply and demand imbalance. Municipal utilities, while not subject to the legislation, were faced with competitive market forces and worked to pro actively prepare for deregulation. Now that deregulation has been suspended, municipal utilities face a more traditional set of challenges. In particular, some electric revenue issuers have exposure to or participate in nuclear power plants which could affect the issuer`s financial performance. Risks include unexpected outages , plant shutdowns , and increased Nuclear Regulatory Commission surveillance.

The funds may invest in private activity bond issues for corporate and nonprofit borrowers. Sold through various governmental conduits, these issues are backed solely by the revenues pledged by the respective borrowing corporations. No governmental support is implied.

Florida Intermediate Tax-Free Fund

Risk Factors Associated With a Florida Portfolio

The fund`s program of investing primarily in AAA rated Florida municipal bonds should significantly lessen the credit risks that would be associated with a portfolio of lower quality Florida bonds. Nevertheless, the fund`s concentration in securities issued by the State of Florida and its political subdivisions involves greater risk than a fund broadly invested in bonds across many states and municipalities. The credit quality of the fund will depend upon the continued financial strength of the State of Florida and the numerous public bodies, municipalities, and other issuers of debt securities in Florida.

Debt The State of Florida and its local governments issue three basic types of debt, with varying degrees of credit risk: general obligation bonds backed by the unlimited taxing power of the issuer, revenue bonds secured by specific pledged revenues or charges for a related project, and tax-exempt lease obligations, supported by annual appropriations from the issuer, usually with no implied tax or specific revenue pledge. During 2003, Florida`s state and local governments issued approximately $21.4 billion of debt, an increase of 13.8% from the previous year. Debt issued in 2003 was for a wide variety of public purposes, including transportation, housing, education, health care, and utilities.

As of May 1, 2004, the State of Florida had about $17.43 billion of net tax-supported bonds secured by the state`s full faith and credit and various tax revenue. General obligation bonded debt service accounted for slightly less than 2% of all governmental expenditures in fiscal year 2003. Additionally, the state has another $4 billion in outstanding bonds which are secured by limited state taxes and revenues. The state`s g eneral o bligation debt is rated Aa2 by Moody`s, AA+ by S&P, and AA by Fitch as of May 1, 2004. Moody`s and S&P affirmed their stable outlook on the state`s credit. Fitch does not provide a credit outlook for the state. Debt issued by the state may only be used to fund capital outlay projects. Florida is not authorized to issue debt to fund operations.

Several agencies of the state are authorized to issue debt that does not represent a pledge of the state`s credit. The Florida Housing Finance Authority and Florida Board of Regents are the largest of such issuers. The principal and interest on bonds issued by these bodies are payable solely from specified revenues such as mortgage repayments and university tuition and fees.

Economy Florida`s population totals approximately 17.1 million residents, making it the nation`s fourth most populous state. Florida`s population base continues to grow because of net in-migration which is responsible for the majority of the state`s growth. Florida`s population continues to increase at a faster pace than the national average. Florida`s employment growth was flat in 2003, achieving .3% growth over its 2002 level. As of March 2004, Florida`s unemployment rate was low at 4.8% (compared to the national average of 5.6%). The Florida economy is recovering from the national recession that began in 2001. Florida has been able to maintain its strong tourism base as highlighted by the state`s record of 74.5 million visitors in 2003, a 1% increase over 2002. The increase in tourism was mainly driven by more tourists taking passenger vehicle trips to the state rather than air transportation and by U . S . citizens opting to take more domestic destination vacations.

Florida`s non-farm employment base continues to be bolstered by the services, trade, and government sectors that employ 44.3%, 17.1%, and 14.5% , respectively , of the state`s labor force. The services and trade sectors

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play a prominent role in Florida`s economy because of the state`s global tourism appeal. The state`s per capita effective buying income levels remain just below the national average.

Legislative Florida does not have a personal income tax. A constitutional amendment would be required in order to implement such a tax. Although the probability appears very low, the fund cannot rule out the possibility that a personal income tax may be implemented in the future. If such a tax were to be imposed, there is no assurance that interest earned on Florida municipal debt offerings would be exempt from this tax.

Under current Florida law, shares of the fund will be exempt from the state`s intangible personal property tax to the extent that on the annual assessment date (January 1) its assets are solely invested in Florida municipal obligations, U.S. government securities, certain short-term cash investments, or other tax-exempt securities. In recent years, the Florida Legislature began efforts to gradually reduce the intangibles tax. In its 2000 session, the Florida Legislature passed legislation which reduced the intangibles personal property tax rate to its current level of 1 mill or $1 per thousand dollars. The 2001 Florida Legislature did not cut the tax rate on the intangibles tax; however, it did raise the exemption amount to $250,000 per person from $20,000. This means up to a $500,000 exemption for married couples. Additionally, the legislature granted the same exemption to non-natural Florida residents. However, because of the national recession, the state deferred implementing these increased exemptions to the intangibles property tax until fiscal 2005.

The Florida Constitution limits the total ad valorem property tax that may be levied by each county, municipality, and school district to 10 mills or 1.0% of value. The limit applies only to taxes levied for operating purposes and excludes taxes levied for the payment of bonds. This restricts the operating flexibility of local governments in the state and may result from time to time in budget deficits for some local units.

Financial The Florida Constitution and Statutes mandate that the state budget as a whole, and each separate fund within the state budget, be kept in balance from currently available revenues each state fiscal year (July 1 — June 30). The Governor and Comptroller are responsible for e nsuring that sufficient revenues are collected to meet appropriations and that no deficit occurs in any state fund.

The state`s revenue structure is narrowly based, relying on the sales and use tax for about 83% of its general fund revenues. The state ended fiscal 2003 with a small surplus of $292 million in its general fund operations. The surplus was driven by stronger than anticipated collections of sales and use taxes and documentary stamp taxes. The surplus enabled the state to maintain its strong unreserved general fund balance position at $2 billion, or 9% of expenditures. The state`s strong unreserved general fund balance provides financing flexibility in the event of unanticipated budget expenditures. Additionally, the state continues to carry separate reserves that meet its constitutional budget stabilization reserve requirement of 5% of revenues and its goal to maintain a working capital reserve.

The state`s geographic location renders it vulnerable to natural disasters such as hurricanes. While these events can be devastating, the impact can sometimes stimulate the economy. For example, the state`s finances received a substantial boost in fiscal year 1993 resulting from increased economic activity associated with rebuilding efforts after Hurricane Andrew, which hit south Florida on August 24, 1992. In 1996 Florida settled a lawsuit with the tobacco industry in which the state sought to recover the costs associated with tobacco usage by Floridians. The total amount expected to be collected from the tobacco companies through the settlement is estimated to be around $13 billion over 25 years. This money will be used for children`s health coverage, to reimburse the state for smoking -related medical expenses, and for state enforcement efforts in reducing sales of tobacco products. As of June 30, 2003, settlement collections of $3.8 billion have been reported by the state.

In November 1994, state voters passed a proposal to limit state revenue growth to the average annual growth in personal income over the previous five years. This revenue cap excludes revenue to pay certain expenditures, including debt service. The limitation should not pose an onerous burden to the state`s financial performance. However, demand for governmental services continues to increase with increases in population.

Sectors Certain areas of potential investment concentration present unique risks. For example, a significant portion of the fund`s assets may be invested in health care bonds. For over a decade, the hospital industry has been under significant pressure to reduce expenses and shorten the length of hospital stays, a phenomenon that has negatively affected the financial health of many hospitals. All hospitals are dependent on third-party reimbursement sources such as the federal Medicare and state Medicaid programs or private insurers. To the extent these payors reduce reimbursement levels, the individual hospitals may be affected. In the face of these

pressures, the trend of hospital mergers and acquisitions has accelerated in recent years. These organizational changes present both risks and opportunities for the institutions involved. Because of the high proportion of elderly residents in Florida, Florida hospitals tend to be highly dependent on Medicare. In addition to the regulations imposed by Medicare, the state also regulates health care. A state board must approve the budgets of all Florida hospitals; certificates of need are required for all significant capital expenditures. The primary management objective is cost control. The inability of some hospitals to achieve adequate cost control while operating in a competitive environment has led to a number of hospital bond defaults.

The fund may from time to time invest in electric revenue issues that have exposure to or participate in nuclear power plants that could affect the issuer`s financial performance. Such risks include unexpected outages or plant shutdowns, increased Nuclear Regulatory Commission surveillance, or inadequate rate relief. In addition, the financial performance of electric utilities may be impacted by increased competition and deregulation in the electric utility industry.

The fund may invest in private activity bond issues for corporate and nonprofit borrowers. Sold through various governmental conduits, these issues are backed solely by the revenues pledged by the respective borrowing corporations. No government support is implied.

Georgia Tax-Free Bond Fund

Risk Factors Associated With a Georgia Portfolio

The fund`s concentration in the debt obligations of one state carries a higher risk than a portfolio that is geographically diversified. In addition to State of Georgia general obligations and state agency issues, the fund will invest in local bond issues, lease obligations, and revenue bonds, the credit quality and risk of which will vary according to each security`s own structure and underlying economics.

Deb t The State of Georgia and its local governments issued just under $6.6 billion in municipal bonds in 2003, a 1.8% decrease over 2002. As of May 1, 2004, the state was rated Aaa by Moody`s and AAA by S&P and Fitch. The state`s rating outlook was stable for Moody`s and S&P. Fitch does not generally assign outlooks to state ratings.

The State of Georgia currently has net direct obligations of approximately $7.5 billion. In 1973, a Constitutional Amendment authorizing the issuance of state general obligation ( "GO" ) bonds was implemented. Since the implementation of the amendment, the state has funded most of its capital needs through the issuance of GO bonds. Previously, capital requirements were funded through the issuance of bonds by 10 separate authorities and secured by lease rental agreements and annual state appropriations. Georgia`s Constitution permits the state to issue bonds for two types of public purposes: (1) general obligation debt and (2) guaranteed revenue debt. The Georgia Constitution imposes certain debt limits and controls. The state`s GO debt service cannot exceed 10% of total revenue receipts less refunds of the state treasury. The state`s GO bonds must have a maximum maturity of 25 years. On May 1, 2004, 69.5% of the state`s debt was scheduled to be amortized in 10 years or less. Maximum GO debt service requirements are well below the legal limit at 6.4% of fiscal year 2003 treasury receipts.

The state established "debt affordability" limits which provide that outstanding debt will not exceed 2.7% of personal income or that maximum annual debt service will not exceed 5% of the prior year`s revenues. The state`s near-term debt offerings are projected to maintain its total debt within these levels.

Economy The State of Georgia is the tenth most populous state with a population of approximately 8.7 million residents, increasing 6.1% since 2000. The state`s economy underwent strong expansion between 1990 and 2000 including strong job growth in the services, high technology, and air transportation sectors. Georgia`s economy is recovering from the recent recession that began in 2001. The services sector continues as the state`s leading employment sector at 37.1% of its total employment. The state`s other leading employment sectors include the trade sector at 21.3%, government at 16%, and manufacturing at 11.3%. The Atlanta metropolitan statistical area continues to serve as the state`s economic center, capturing approximately 55% of the state`s employment. This area includes Atlanta, the state`s capitol, and 20 surrounding counties. The next largest metropolitan statistical area is the Columbus-Muscogee area.

The state`s moderate cost of living and research centers provided by its colleges and universities continue to attract a very skilled labor force. The state`s unemployment rate has been decreasing since July 2003 when its

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unemployment rate was 4.9%, a further indication that the state`s economy is undergoing a recovery. At the end of March 2004, the state`s unemployment rate had improved to 3.6%. The state`s unemployment rate continues to be well below the nation`s average of 5.6%. The state`s median household income levels are slightly above the U.S. average . The state`s income levels show more favorably when taking into account costs of living and quality of life indicators.

Financial The creditworthiness of the portfolio is largely dependent on the financial strength of the State of Georgia and its localities. The state`s strong economic performance has translated into its strong financial performance and the accumulation of substantial reserves.

At the close of fiscal year 2003, the state had a revenue shortfall reserve of about $261 million and a reserve for Mid-year Adjustments of around $136 million. Such strong reserve levels allow financing flexibility and provide very strong safeguards against short-term economic swings. Through the first 10 months of fiscal year 2004, the state`s revenue collections are up 7.6% , showing signs of an improving economy. Despite the strong collections, the governor has continued to exhibit sound fiscal management by mandating that state agencies cut 5% of their budgets for the fiscal year. The state does not anticipate deficit-spending for the fiscal year.

A significant portion of the portfolio`s assets is expected to be invested in the debt obligations of local governments and public authorities with investment-grade ratings of BBB or higher. While local governments in Georgia are primarily reliant on independent revenue sources, such as property taxes, they are not immune to budget shortfalls caused by cutbacks in state aid. The fund may purchase obligations issued by public authorities in Georgia which are not backed by the full faith and credit of the state and may or may not be subject to annual appropriations from the state`s general fund. Likewise, certain enterprises such as water and sewer systems or hospitals may be affected by changes in economic activity.

Sectors Certain areas of potential investment concentration present unique risks. A significant portion of the fund`s assets may be invested in health care issues. For over a decade, the hospital industry has been under significant pressure to reduce expenses and shorten the length of hospital stays, a phenomenon that has negatively affected the financial health of many hospitals. All hospitals are dependent on third-party reimbursement sources such as the federal Medicare and state Medicaid programs or private insurers. To the extent these payors reduce reimbursement levels, the individual hospitals may be affected. In the face of these pressures, the trend of hospital mergers and acquisitions has accelerated in recent years. These organizational changes present both risks and opportunities for the institutions involved.

The fund may from time to time invest in electric revenue issues that have exposure to or participate in nuclear power plants that could affect issuers` financial performance. Such risks include unexpected outages or plant shutdowns, increased Nuclear Regulatory Commission surveillance, or inadequate rate relief. In addition, the financial performance of electric utilities may be impacted by increased competition and deregulation of the electric utility industry.

Maryland Short-Term Tax-Free Bond, Maryland Tax-Free Bond, and Maryland Tax-Free Money Funds

Risk Factors Associated With a Maryland Portfolio

The funds` concentration in the debt obligations of one state carries a higher risk than a portfolio that is more geographically diversified. In addition to State of Maryland general obligation bonds and debt issued by state agencies, the funds will invest in local bond issues, lease obligations, and revenue bonds, the credit quality and risk of which will vary according to each security`s own structure and underlying economics.

Debt The State of Maryland and its local governments issue two basic types of debt, with varying degrees of credit risk: general obligation bonds backed by the unlimited taxing power of the issuer and revenue bonds secured by specific pledged fees or charges for a related project. Included within the revenue bond sector are tax-exempt lease obligations that are subject to annual appropriations of a governmental body, usually with no implied tax or specific revenue pledge.

The State of Maryland disclosed in its fiscal year 2003 Comprehensive Annual Financial Report ( "CAFR" ) dated June 30, 2003, that it has approximately $3.9 billion in general obligation bonds outstanding. As of May 25,

2004, general obligation debt of the State of Maryland was rated AAA by Moody`s, S&P, and Fitch. There is no general debt limit imposed by the state constitution or public general laws. The state constitution imposes a 15- year maturity limit on state general obligation bonds. Although voters approved a constitutional amendment in 1982 permitting the state to borrow up to $100 million in short-term notes in anticipation of taxes and revenues, the state has not made use of this authority.

Many agencies of the state government are authorized to borrow money under legislation which expressly provides that the loan obligations shall not be deemed to constitute debt or a pledge of the faith and credit of the state. The Community Development Administration of the Department of Housing and Community Development, the Maryland Water Quality Financing Administration of the Department of Environment, the Maryland State Lottery Agency, certain state higher education institutions, the Maryland Stadium Authority, the Maryland Food Center Authority, and the Maryland Environmental Service have issued and have outstanding bonds of this type. The principal of and interest on bonds issued by these bodies are payable solely from pledged revenues, principally fees generated from use of the facilities, enterprises financed by the bonds, or other dedicated fees.

Economy The Maryland Board of Revenue Estimates reports that, according to several measures, the state`s economy had outperformed the nation during the nationwide slowdown. The slowdown is apparent in reduced employment and personal income growth. However, the extent of the reduction has not been as severe in Maryland as in other states. One reason for this is Maryland`s limited exposure to the manufacturing sector, which has been hard hit by current economic conditions.

Financial To a large degree, the risk of the portfolio is dependent upon the financial strength of the State of Maryland and its localities. The state continues to demonstrate a conservative approach to managing its finances but has not been immune to the national economic downturn. Fiscal year 2003 concluded with a general fund operating deficit and the general fund balance declined from $1.6 billion to $1.2 billion, representing a still- solid 7% of general fund expenditures. Revenue growth has basically stalled and expenditures have risen, primarily for Medicaid and education. The Governor and legislature have been working on resolving budget gaps for FY04 and FY05. Efforts are focused on a balanced approach, with limited use of one-time transfers from other funds, and maintaining sufficient reserves.

Sectors Investment concentration in a particular sector can present unique risks. A significant portion of the funds` assets may be invested in health care issues. For over a decade, the hospital industry has been under significant pressure to reduce expenses and shorten length of stay, a phenomenon which has negatively affected the financial health of some hospitals. All hospitals are dependent on third-party reimbursement mechanisms. At the present time, Maryland hospitals operate under a system in which reimbursement is determined by a state-administered set of rates and charges that applies to all payors. A federal waiver also allows this system to be applied to Medicare reimbursement rather than the Federal Diagnosis-Related Group ( "DRG" ) system required elsewhere. In order to maintain this Medicare waiver, the cumulative rate of increase in Maryland hospital charges since the base year 1980 must remain below that of U.S. hospitals overall. From 1983 through 1992, the rate of increase for Maryland hospitals was below the national average; for the seven years from 1993 through 1999, Maryland hospital costs grew faster than the national rate, although the cumulative rate of increase since the base year is still below the national average. Any loss of the Medicare waiver in the future may have an adverse impact upon the credit quality of Maryland hospitals.

The funds may from time to time invest in electric revenue issues that have exposure to or participate in nuclear power plants that could affect the issuer`s financial performance. Such risks include delay in construction and operation due to increased regulation, unexpected outages or plant shutdowns, increased Nuclear Regulatory Commission surveillance, or inadequate rate relief. In addition, the financial performance of electric utilities may be impacted by increased competition and deregulation of the industry.

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New Jersey Tax-Free Bond Fund

Risk Factors Associated With a New Jersey Portfolio

The fund`s concentration in the debt obligations of one state carries a higher risk than a portfolio that is more geographically diversified. In addition to State of New Jersey general obligation bonds and debt issued by state agencies, the fund will invest in local bond issues, lease obligations, and revenue bonds, the credit quality and risk of which will vary according to each security`s structure and underlying economics.

Debt As of May 1, 2004, the general obligation debt of the s tate was rated Aa2 by Moody`s, AA by S&P, and AA by Fitch. After several years of ratings turmoil, Standard & Poor`s and Fitch consider the state`s rating to be stable. Moody`s, however, has placed the state`s rating on review for a possible downgrade, suggesting that it may downgrade the state`s rating in the very near future. Moody`s princip al concerns are the state`s repeated use of non-recurring revenues to balance a structurally imbalanced budget and very low reserve levels. Moody`s has also expressed concern about the state`s high debt levels, despite elevated per capita income levels.

The State of New Jersey disclosed in its CAFR dated December 1, 2003, for the fiscal year ending June 30, 2003, that approximately $18.8 billion in state long-term debt obligations were outstanding, a net increase in bonded debt of $1.6 billion, or 9.5%, over the preceding fiscal year. Long-term debt has increased by 28.8% over the past five fiscal years. These debt figures include state guarantees on the principal and interest payments on certain bonds issued by the New Jersey Sports and Exposition Authority and annual appropriations for installment obligations, capital leases, and certificates of participation. The state may also be required to provide appropriations to meet a deficiency in debt service payments for the South Jersey Port Corporation and the New Jersey Housing and Mortgage Finance Agency.

The State of New Jersey and its local governments issue two basic types of debt: general obligation bonds, which are backed by the unlimited taxing power of the issuer, and revenue bonds, which are secured by specific pledged fees or charges, often from a related project. Included within the revenue bond sector are tax-exempt lease obligations that are subject to annual appropriations of a governmental body, usually with no implied tax or specific revenue pledge. The credit risks of all vary with the obligation`s structure and ultimate obligor.

Many agencies of the state government are authorized to borrow money under legislation that expressly provides that the loan obligations shall not be deemed to constitute debt or a pledge of the faith and credit of the state. The New Jersey Building Authority, New Jersey Transportation Trust Fund Authority, New Jersey Economic Development Authority, New Jersey Educational Facilities Authority, New Jersey Health Care Facilities Financing Authority, New Jersey Highway Authority, New Jersey Housing and Mortgage Finance Agency, New Jersey Sports and Exposition Authority, New Jersey Transit Corporation, and New Jersey Turnpike Authority have outstanding bonds of this nature.

Economy New Jersey experienced positive employment growth of 1.2% in 2003. The unemployment rate for 2003 averaged 5.7%, certainly above the 3.7% level recorded in 2000, but still lower than the nation as a whole. Unemployment was 5.8% in 2002. Independent forecasters have averred that the state ` s economy probably touched bottom in 2002, saw modest recovery in 2003, and will experience employment growth of 1% in 2004 to lower the state`s unemployment rate to 5%. Personal income growth is important to watch as nearly all debt, directly or indirectly, is paid from the income of individuals. Personal income grew an estimated 3.3% during calendar year 2001, but slowed to 3.1% during 2002; growth of 4% is expected for 2004. These rates are far below the torrid pace of 10.2% experienced in 2000.

Financial To a large degree, the credit risk of the portfolio is linked to the financial strength of the State of New Jersey and its localities. Gross income taxes, the state`s most important source of revenues, fell in fiscal year 2003 by 1.5% and sales taxes also declined by 1% over the previous year. Corporate taxes, however, jumped by $1.4 billion after the state passed a sweeping overhaul of the corporate tax code. These three taxes comprise nearly two-thirds of the state`s total receipts. Overall, revenue collections were $2.9 billion over the year prior. By the end of the fiscal year and despite higher appropriations, the state`s total fund balances experienced a slight increase, largely through one - time measures such as selling off rights to the receipts of tobacco settlement revenues. Fiscal year 2004, which ends on June 30 , is shaping up as a better year for the state. Total state revenues are expected to be 1.4% over budget and personal, corporate, and sales taxes are all over budget.

The state forecasts that continued economic growth will bring a 7.7% increase in overall revenues in fiscal year 2005. Sales tax receipts are forecast to increase by 5.5%, gross income taxes by 8.3%, and corporate business

taxes by 6.5%. The budget also proposes several one-time measures that postpone the day when the state must confront its structural budgetary balance. Even though the economy appears to be rebounding, the state`s budget remains pressured from a variety of claimants.

Sectors Investment concentration in a particular sector can present unique risks. A significant portion of the fund`s assets may be invested in health care issues. For over a decade, the hospital industry has been under significant pressure to reduce expenses and shorten patients` length of stay, a phenomenon which has negatively affected the financial health of many hospitals. While each hospital bond issue is separately secured by the individual hospital`s revenues, common to all hospitals is reliance to some degree on third-party reimbursement sources such as the federal Medicare or Medicaid programs and private insurers. An individual hospital may be affected to the extent these payors reduce their reimbursements. In the face of these pressures, the trend of hospital mergers and acquisitions has accelerated in recent years. These organizational changes present both risks and opportunities for the institutions involved.

The fund may invest in electric revenue issues which have exposure to or participate in nuclear power plants which could affect the issuer`s financial performance. Such risks include increased regulation and associated expense, unexpected outages or plant shutdowns, increased Nuclear Regulatory Commission surveillance, or inadequate rate relief. In addition, the financial performance of electric utilities may deteriorate from increased competition and deregulation in the industry.

The fund may invest in private activity bond issues for corporate and nonprofit borrowers. These issues sold through government conduits, such as the New Jersey Economic Development Authority and various local issuers, are backed solely by the revenues pledged by the respective borrowing corporations. No governmental support is implied. In the past, a number of New Jersey Economic Development Authority issues have defaulted as a result of borrower financial difficulties.

The fund may participate in solid waste projects. A number of counties and utility authorities in the state have issued several billion dollars of bonds to fund incinerator projects and solid waste projects. A federal decision that struck down New Jersey`s system of solid waste flow control increases the potential risk of default absent a legislative solution or some form of subsidy from local or state governments.

New York Tax-Free Bond and New York Tax-Free Money Funds

Risk Factors Associated With a New York Portfolio

In addition to State of New York general obligation bonds and debt issued by state agencies, the funds will invest in local bond issues, lease obligations, and revenue bonds, the credit quality and risk of which will vary according to each security`s own structure and underlying economics. In spite of holding many different issuers, all will be entities in the State of New York. Concentration in the debt obligations of one state translates into higher risk than a portfolio that is more geographically diversified.

The funds` ability to maintain credit quality is dependent upon the ability and willingness of New York issuers to meet their debt service obligations in a timely fashion. In 1975, the state, New York City, and other related issuers experienced serious financial difficulties that ultimately resulted in much lower credit ratings and an inability to access public debt markets. A series of fiscal reforms and an improved economic climate allowed these entities to return to financial stability by the early 1980s. Credit ratings were reinstated or raised and access to the public credit markets was restored. Today, the state and the city confront fiscal pressure again. Revenues, particularly those associated with income taxes, are still short of the heights achieved during the late 1990s, even as expenditures, particularly for benefits and debt service, continue to rise. The state and city project that the incipient economic recovery underway will gain strength, but their projections are only this and are subject to uncertainty.

On September 11, 2001, hijackers piloted two passenger jetliners into the twin towers of the World Trade Center. The attack destroyed the World Trade Center, damaged near by buildings, and caused significant loss of life. The economic dislocation to the state and especially New York City was substantial; in spite of significant federal and state aid and assistance, the city is still experiencing the repercussions of the attack. Some of the economic activity present before the attack may never return, as firms displaced by the event choose to relocate elsewhere or do not recover.

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New York State

The State of New York disclosed in its fiscal year 2003 Comprehensive Annual Financial Report ( "CAFR" ) that, for the first time since 1997, the state`s general fund was once again in deficit. The deficit totaled $3.3 billion following an operating deficit of $4.2 billion, with a net decline of $3.3 billion in personal income taxes largely to blame, though also contributing were lower sales, consumption and use, and business taxes. In addition, $1.9 billion in payments were deferred to future years. The state faces substantial budget gaps in 2006 of $2.8 billion and over $4 billion in 2007 from increased school funding and health care costs. State legislators remain in discussions on the budget for the fiscal year that began on April 1 2004, marking the twentieth year that the budget has not been complete by the start of the fiscal year.

New York is one of the most highly indebted states in the nation. In its CAFR, it revealed that it had outstanding $3.99 billion in general obligation bonds as well as contractual obligation financing arrangements with certain municipal entities to finance various capital projects totaling $27.04 billion. Also outstanding are approximately $4.6 billion in Local Government Assistance Corporation bonds, issued to resolve an accumulated general fund deficit of over $6 billion on a Generally Accepted Accounting Principles ( "GAAP" ) basis.

Certain authorities are more heavily reliant on annual direct state support such as the Urban Development Authority ( "UDC" ), a public benefit corporation now known as the Empire State Development Corporation. In February 1975, the UDC defaulted on approximately $1 billion of short-term notes. The default was ultimately cured by the creation of the Project Finance Authority, through which the state provided assistance to the UDC, including support for debt service. Since then, there have been no other defaults by state authorities.

To a large degree, the risk of the portfolio is dependent on the economic health of the State of New York and its localities. The state`s economy had been showing signs of reduced growth due to the national economic slowdown even before the heinous terrorist acts of September 11. During the first five months of 2003, employment in New York State slipped 0.7%, ranking the state a poor 44th amongst all states. The state`s reliance on the securities industry, which though only 2.4% of all employment accounts for 12.4% of all wages, served it well during the boom years of the late 1990s, but haunted it during the down sizing that began in 2001. Economic growth is projected to generally improve in calendar year 2004, with the state`s economic recovery expected to lag the nation, as it has in the past. Employment in the state is forecast to grow by between 0.7% and 1% while personal income is expected to increase by between 4.3% and 5.2%.

New York City

As of May 1, 2004, the general obligation debt of the city was rated A by S&P, A+ by Fitch, and A2 by Moody`s. The city`s credit ratings carry stable outlooks.

The financial problems of New York City were acute between 1975 and 1979, highlighted by a payment moratorium on the c ity`s short-term obligations. The most important contribution to the city`s fiscal recovery was the creation of the Municipal Assistance Corporation ( "MAC" ) for the City of New York. Backed by sales, use, stock transfer, and other taxes, MAC issued bonds and used the proceeds to purchase city bonds and notes. Although investors shunned MAC bonds at first, the program proved to be very successful.

Today, the city is recovering from the acute shocks of September 11 and the downturn in the finance and securities sector. The unemployment rate over 2003 was 8.4%, far higher than that experienced by the state or the nation. The higher unemployment resulted in additional cash flow needs for social services. The most recent news from the city has been that the economic recovery is taking shape and that the securities industry has begun hiring again. Securities industry profits were strong in 2003, contributing needed taxes to the city`s coffers.

The up tick in the local economy allowed the city to balance both its 2004 budget (for the fiscal year ending in June) and instill confidence that 2005 is balanced also. Importantly, the city recently won a court case requiring the state to assume the responsibility for the MAC debt mentioned earlier, thus saving the city $1 billion in debt service in 2005 alone. Revised estimates for personal income taxes and real estate transfer taxes also contribute to giving the city a brief respite from the difficulties it experienced the prior two years. Yet the city continues to struggle with unbalanced operations after 2005. The current Bloomberg administration forecasts a budget gap of $3.8 billion in 2006, rising to $4.2 billion in 2007, and $4.6 billion in 2008, driven in large part by rising expenditures for pensions, health care, and debt service.

Sectors A significant portion of the fund`s assets may be invested in health care issues. For over a decade, hospitals have been under significant pressure to reduce expenses and shorten patients` length of stay, which has negatively affected the financial health of many hospitals. While each hospital bond issue is secured by the individual hospital`s revenues, third-party reimbursement sources such as the Federal Medicare, state Medicaid programs, and private insurers are common to all hospitals. To the extent these third-party payors reduce their reimbursements for health services, individual hospitals will be affected. The state`s support for Medicaid and health services has receded. Under health care reforms implemented over the past five years, hospitals are permitted to negotiate inpatient payment rates with private payors. In addition, the federal balanced budget act of 1997 contains provisions to reduce Medicare expenditures. These pressures have accelerated a trend of hospital mergers and acquisitions and present risks and opportunities for health care institutions and fund investors.

The funds may invest in private activity bond issues issued for corporate and nonprofit borrowers. These issues, sold through various governmental conduits, are backed solely by the revenues pledged by the respective borrowing corporations. No governmental support is implied. Obligations issued in other states through similar conduits have defaulted in the past as a result of borrower financial difficulties.

Virginia Tax-Free Bond Fund

Risk Factors Associated With a Virginia Portfolio

The fund`s concentration in the debt obligations of one state carries a higher risk than a portfolio that is geographically diversified. In addition to Commonwealth of Virginia general obligations and agency issues, the fund will invest in local bond issues, lease obligations, and revenue bonds, the credit quality and risk of which will vary according to each security`s own structure and underlying economics.

Debt The Commonwealth of Virginia and its local governments issued $6.9 billion of municipal bonds in 2003, including general obligation debt backed by the unlimited taxing power of the issuer and revenue bonds secured by specific pledged fees or charges for an enterprise or project. Included within the revenue bond category are tax-exempt lease obligations that are subject to annual appropriations of a governmental body to meet debt service, usually with no implied tax or specific revenue pledge. Debt issued in 2003 was for a wide variety of public purposes, including transportation, housing, education, health care, and industrial development.

As of June 30, 2003, the Commonwealth of Virginia had $0.9 billion of outstanding general obligation bonds secured by the Commonwealth`s revenue and taxing power, a modest amount compared to many other states. Under state law, general obligation debt is limited to 1.15 times the average of the preceding three years` income tax and sales and use tax collections. The Commonwealth`s outstanding general obligation debt is well below that limit and approximately 40% of the debt service is actually met from revenue-producing capital projects at colleges and universities.

The Commonwealth also supports $2.8 billion in debt issued by the Virginia Public Building Authority, the Commonwealth Transportation Board, the Virginia College Building Authority, the Virginia Biotechnology Research Park Authority, the Virginia Port Authority, and the Innovative Technology Authority for transportation purposes. These bonds are not backed by the full faith and credit of the Commonwealth but instead are subject to annual appropriations from the Commonwealth`s General Fund.

In addition to the Commonwealth and public authorities described above, an additional $2.0 billion in moral obligation bonds has been issued by the Virginia Public School Authority, the Virginia Resources Authority, and the Virginia Housing Development Authority. Another $7.2 billion of debt outstanding at several other authorities is secured by a contingent appropriation in the event pledged revenues are insufficient to cover debt service.

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Economy The Commonwealth of Virginia has a population of approximately 7.4 million, making it the twelfth largest state. Since the 1930s the Commonwealth`s population has grown at a rate near or exceeding the national average. Stable to strong economic growth during the 1990s was led by the Northern Virginia area outside of Washington, D.C., where nearly a third of the Commonwealth`s population is concentrated. The next largest metropolitan area is the Norfolk-Virginia Beach-Newport News area, followed by the Richmond-Petersburg area, including the Commonwealth`s capital of Richmond. The Commonwealth`s economy is broadly based, with a large concentration in service and governmental jobs, followed by manufacturing. Virginia has significant concentrations of high-technology employers, predominantly in Northern Virginia. Per capita income exceeds national averages while unemployment figures have consistently tracked below national averages.

Financial To a large degree, the risk of the portfolio is dependent on the financial strength of the Commonwealth of Virginia and its localities. Virginia is rated AAA by Moody`s, S&P, and Fitch. All three rating agencies maintain stable outlooks. Moody`s just recently revised its outlook to stable from negative where it was held since December 2001. The negative outlook reflected Virginia`s sizable budget gaps brought about by slowing revenues and rising expenditures. Governor Warner and the Virginia Assembly closed this budget gap by cutting expenditures and allowing transfers from the Revenue Stabilization Fund. In addition, the car tax relief program was frozen at 70%. The Revenue Stabilization Fund is specifically earmarked to cushion against such a slowdown. In September 2003, Moody`s placed Virginia`s debt on credit watch for a possible downgrade due to another looming budget gap and nearly full depletion of the Revenue Stabilization Fund. Virginia`s General Assembly recently passed a balanced biennial budget for fiscal 2005-06 with an estimated $1.6 billion revenue enhancement package and, as a result, Moody`s returned Virginia`s outlook to stable and took it off watch list.

The Commonwealth`s budget is prepared on a biennial basis. From 1970 through 2000, the General Fund showed a positive balance for all of its two-year budgetary periods. The national recession and its negative effects on Virginia`s personal income tax collections did, however, force the Commonwealth to draw down its general fund balances in 1992, 2001, 2002 , and 2003. On June 30, 2003, the Revenue Stabilization Fund totaled $247 million, representing a modest 2% of revenues.

A significant portion of the fund`s assets is expected to be invested in the debt obligations of local governments and public authorities with investment-grade ratings of BBB or higher. While local governments in Virginia are primarily reliant on independent revenue sources such as property taxes, they are not immune to budget shortfalls caused by cutbacks in state aid. Likewise, certain enterprises such as toll roads or hospitals may be affected by changes in economic activity.

Sectors Certain areas of potential investment concentration present unique risks. A significant portion of the fund`s assets may be invested in health care issues. For over a decade, the hospital industry has been under significant pressure to reduce expenses and shorten length of stay, a phenomenon which has negatively affected the financial health of many hospitals. While each hospital bond issue is separately secured by the individual hospital`s revenues, third-party reimbursement sources such as the federal Medicare and state Medicaid programs or private insurers are common to all hospitals. To the extent these payors reduce reimbursement levels, the individual hospitals may be affected. In the face of these pressures, the trend of hospital mergers and acquisitions has accelerated in recent years. These organizational changes present both risks and opportunities for the institutions involved.

The fund may from time to time invest in electric revenue issues which have exposure to or participate in nuclear power plants which could affect the issuer`s financial performance. Such risks include unexpected outages or plant shutdowns, increased Nuclear Regulatory Commission surveillance, or inadequate rate relief.

The fund may invest in private activity bond issues for corporate and nonprofit borrowers. These issues sold through various governmental conduits are backed solely by the revenues pledged by the respective borrowing corporations. No governmental support is implied.

All State Tax-Free Funds

Puerto Rico From time to time the funds invest in obligations of Puerto Rico and its public corporations, which are exempt from federal, state, and city or local income taxes. As of May 1, 2004, general obligation debt of the Commonwealth was rated Baa1 by Moody`s and A- by S&P. S&P`s outlook on the Commonwealth`s rating was negative whereas Moody`s outlook was stable. The majority of the Commonwealth`s debt is issued by the major

public agencies that are responsible for many of the island`s public functions, such as water, wastewater, highways, electric power, and education. Most recent figures from the Commonwealth indicate that public sector debt, including public corporations, totals $32.4 billion. Though this amount would be exceptionally high for a state of Puerto Rico`s size, income levels, and population, the figure includes debt the Commonwealth issues on behalf of municipalities and other governmental units that, in the 50 states, would be issued by independent entities. The Commonwealth monitors its debt issuance by comparing the rate of growth of its debt to the rate of growth of its gross product. The two were fairly evenly matched in previous years, but, for the five years ending in 2003, total debt increased by 31% whereas gross product increased by 23.7%. Since debt authorized for fiscal year 2004 is $540 million and $550 million is proposed for 2005, the gap may widen further.

Annual real gross product growth of over 2% took place from 1997-2001, but slowed to 1.5% in 2001 and contracted by 0.3% in 2002. The Commonwealth believes that real growth of 1.9% occurred in 2003 and forecasts an expansion of 2.9% in 2004 followed by 2.7% in 2005. Growth can be attributed to a favorable and strong relationship with the United States, continuing economic development programs that are restructuring the economy, and increases in the level of federal transfers. The Commonwealth is vulnerable to an economic downturn in the U.S. because of its tight linkage to the mainland — 54% of all imports are from and 89% of all exports are to the mainland. Manufacturing, especially of pharmaceuticals, is very important, as it accounts for 42% of gross product and 14% of employment. Services, including tourism, are second, representing 39% of gross product and 48% of employment. Though hourly wages in the Commonwealth`s manufacturing sector were 67% of those of the mainland as of December 31, 2002, Puerto Rico still confronts employment flight to less developed countries in more labor-intensive industries such as textiles, tuna canning, and leather products. Higher value-added manufacturing in pharmaceuticals, 59% of manufacturing, ha s held its ground, but ha s suffered. As a result, overall manufacturing jobs fell by 4.2% in 2003 on the heels of a 6.4% drop in 2002. Private activity payrolls declined 3% in 2002 but the loss was offset by an increase in government payrolls by 4%. Numbers for 2003 appear to be slightly better with overall employment up 1% and private sector employment flat.

As mentioned above, tourism is very important to the Commonwealth. San Juan is the largest homeport for cruise ships in the Caribbean and the fourth largest in the world. Visitors` expenditures were 5.5% of gross product in 2002 and 4% of gross product in 2001. The prominence of tourism represents another risk factor, though. After the September 11 tragedy, hotel occupancy rates fell to 64% from 70% in 2001. The sector seemed to recover in 2003 after a poor 2002. Rooms rented rose 9.1% in 2003 after a 5% loss in 2002, hotel occupancy rose to 68% from 64% in 2002 in spite of a room count that keeps rising by 3-4% per year, and total visitors increased in 2003 by 2.9% after falling in 2002 by 11%.

The Commonwealth`s economy is also vulnerable to oil prices since about 70% of its energy generating capacity is oil-fired even after the recent completion of a natural gas plant and a coal-fired facility. Current high prices for oil will undoubtedly have a negative impact on the Commonwealth`s realized growth.

For many years, U.S. companies operating in Puerto Rico were eligible to receive a special tax credit available under Section 936 of the federal tax code. Section 936 entitled certain corporations to credit income derived from business activities in the Commonwealth against their United States corporate income tax and spurred significant expansion in capital intensive manufacturing, particularly large pharmaceutical firms. Federal tax legislation passed in 1993 and 1996 decreased the tax benefits and eliminate them altogether in the 2006 tax year. While the final impact of the phase outs over the short - and long - term is impossible to forecast, preliminary indications are that large pharmaceutical did not exit, and that over 80 firms have taken advantage of the Commonwealth`s replacement tax incentives.

The Commonwealth and the United States are tied to each other politically as well as economically. The Commonwealth came under U.S. sovereignty pursuant to the Treaty of Paris signed in 1898, which ended the Spanish-American War. Puerto Ricans have been citizens of the U.S. since 1917. Since 1952, Puerto Ricans have had their own constitution, approved in a special referendum by the people of Puerto Rico and by the U.S. Congress and President. The future political status of the Commonwealth within the United States remains unclear, though. The U.S. House of Representatives voted in March 1998 in favor of a political status act and Puerto Rico held a referendum later that year to determine whether it would preserve its Commonwealth status or transition to becoming a state, but, of the voting options available, a majority of voters opted for the choice labeled "None of the Above."

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INVESTMENT PROGRAM

Types of Securities

Set forth below is additional information about certain of the investments described in the fund s ` prospectuses.

Hybrid Instruments

Hybrid instruments (a type of potentially high-risk derivative) have been developed and combine the elements of futures contracts or options with those of debt, preferred equity, or a depository instrument (hereinafter "hybrid instruments" ). Generally, a hybrid instrument will be a debt security, preferred stock, depository share, trust certificate, certificate of deposit, or other evidence of indebtedness on which a portion of or all interest payments, and/or the principal or stated amount payable at maturity, redemption, or retirement is determined by reference to prices, changes in prices, or differences between prices of securities, currencies, intangibles, goods, articles, or commodities (collectively "underlying assets" ) or by another objective index, economic factor, or other measure, such as interest rates, currency exchange rates, commodity indices, and securities indices (collectively "benchmarks" ). Thus, hybrid instruments may take a variety of forms, including, but not limited to, debt instruments with interest or principal payments or redemption terms determined by reference to the value of a currency or commodity or securities index at a future point in time, preferred stock with dividend rates determined by reference to the value of a currency, or convertible securities with the conversion terms related to a particular commodity.

Hybrid instruments can be an efficient means of creating exposure to a particular market, or segment of a market, with the objective of enhancing total return. For example, the funds may wish to take advantage of expected declines in interest rates in several European countries, but avoid the transaction costs associated with buying and currency-hedging the foreign bond positions. One solution would be to purchase a U.S. dollar- denominated hybrid instrument whose redemption price is linked to the average three-year interest rate in a designated group of countries. The redemption price formula would provide for payoffs of greater than par if the average interest rate was lower than a specified level, and payoffs of less than par if rates were above the specified level. Furthermore, the funds could limit the downside risk of the security by establishing a minimum redemption price so that the principal paid at maturity could not be below a predetermined minimum level if interest rates were to rise significantly. The purpose of this arrangement, known as a structured security with an embedded put option, would be to give the funds the desired European bond exposure while avoiding currency risk, limiting downside market risk, and lowering transaction costs. Of course, there is no guarantee that the strategy will be successful, and the funds could lose money if, for example, interest rates do not move as anticipated or credit problems develop with the issuer of the hybrid instruments.

The risks of investing in hybrid instruments reflect a combination of the risks of investing in securities, options, futures, and currencies. Thus, an investment in a hybrid instrument may entail significant risks that are not associated with a similar investment in a traditional debt instrument that has a fixed principal amount, is denominated in U.S. dollars, or bears interest either at a fixed rate or a floating rate determined by reference to a common, nationally published benchmark. The risks of a particular hybrid instrument will, of course, depend upon the terms of the instrument, but may include, without limitation, the possibility of significant changes in the benchmarks or the prices of underlying assets to which the instrument is linked. Such risks generally depend upon factors which are unrelated to the operations or credit quality of the issuer of the hybrid instrument and which may not be readily foreseen by the purchaser, such as economic and political events, the supply of and demand for the underlying assets, and interest rate movements. In recent years, various benchmarks and prices for underlying assets have been highly volatile, and such volatility may be expected in the future. Reference is also made to the discussion of futures, options, and forward contracts herein for a discussion of the risks associated with such investments.

Hybrid instruments are potentially more volatile and carry greater market risks than traditional debt instruments. Depending on the structure of the particular hybrid instrument, changes in a benchmark may be magnified by the terms of the hybrid instrument and have an even more dramatic and substantial effect upon the value of the hybrid instrument. Also, the prices of the hybrid instrument and the benchmark or underlying asset may not move in the same direction or at the same time.

Hybrid instruments may bear interest or pay preferred dividends at below market (or even relatively nominal) rates. Alternatively, hybrid instruments may bear interest at above market rates but bear an increased risk of

principal loss (or gain). The latter scenario may result if "leverage" is used to structure the hybrid instrument. Leverage risk occurs when the hybrid instrument is structured so that a given change in a benchmark or u nderlying asset is multiplied to produce a greater value change in the hybrid instrument, thereby magnifying the risk of loss as well as the potential for gain.

Hybrid instruments may also carry liquidity risk since the instruments are often "customized" to meet the portfolio needs of a particular investor, and therefore, the number of investors that are willing and able to buy such instruments in the secondary market may be smaller than that for more traditional debt securities. In addition, because the purchase and sale of hybrid instruments could take place in an over-the-counter market without the guarantee of a central clearing organization or in a transaction between the fund and the issuer of the hybrid instrument, the creditworthiness of the counterparty or issuer of the hybrid instrument would be an additional risk factor which the funds would have to consider and monitor. Hybrid instruments also may not be subject to regulation by the Commodities Futures Trading Commission ( "CFTC" ), which generally regulates the trading of commodity futures by U.S. persons, the SEC, which regulates the offer and sale of securities by and to U.S. persons, or any other governmental regulatory authority.

Illiquid or Restricted Securities

Restricted securities may be sold only in privately negotiated transactions or in a public offering with respect to which a registration statement is in effect under the 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 funds` Boards. If, through the appreciation of illiquid securities or the depreciation of liquid securities, the funds should be in a position where more than the allowable amount of its net assets is invested in illiquid assets, including restricted securities, the funds will take appropriate steps to protect liquidity.

Notwithstanding the above, the funds 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 funds, to trade in privately placed securities even though such securities are not registered under the 1933 Act. The liquidity of these securities is monitored based on a variety of factors.

Debt Securities

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 ( "Fannie Mae" or "FNMA" ), Government National Mortgage Association ( "Ginnie Mae" or "GNMA" ), 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; 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 U.S. Treasury.

Bank Obligations Certificates of deposit, banker ` s acceptances, and other short-term debt obligations. Certificates of deposit are short-term obligations of commercial banks. A banker ` s 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 funds may invest in U.S. banks, foreign branches of U.S. banks, U.S. branches of foreign banks, and foreign branches of foreign banks.

Savings and Loan Obligations Negotiable certificates of deposit and other short-term debt obligations of savings and loan associations.

Supranational Agencies Securities of certain supranational entities, such as the International Development Bank.

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Corporate Debt Securities Outstanding corporate debt securities (e.g., bonds and debentures) . Corporate notes may have fixed, variable, or floating rates.

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 and Commercial Notes Short-term promissory notes issued by corporations primarily to finance short-term credit needs. Certain notes may have floating or variable rates and may contain options, exercisable by either the buyer or the seller, that extend or shorten the maturity of the note.

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.

Funding Agreements Obligations of indebtedness negotiated private ly between the funds and an insurance company. Often such instruments will have maturities with unconditional put features, exercisable by the funds, requiring return of principal within one year or less.

There are, of course, other types of securities that are or may become available that are similar to the foregoing , and the funds may invest in these securities.

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Inflation-Linked Securities

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Inflation-linked securities are income-generating instruments whose interest and principal payments are adjusted for inflation — a sustained increase in prices that erodes the purchasing power of money. TIPS, or Treasury inflation-protected securities, are inflation-linked securities issued by the U.S. government. Inflation- linked bonds are also issued by corporations, U.S. government agencies, and foreign countries. The inflation adjustment, which is typically applied monthly to the principal of the bond, follows a designated inflation index, such as the consumer price index (CPI). A fixed coupon rate is applied to the inflation-adjusted principal so that as inflation rises, both the principal value and the interest payments increase. This can provide investors with a hedge against inflation, as it helps preserve the purchasing power of your investment. Because of this inflation-adjustment feature, inflation-protected bonds typically have lower yields than conventional fixed-rate bonds.

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Inflation-protected bonds normally will decline in price when real interest rates rise. (A real interest rate is calculated by subtracting the inflation rate from a nominal interest rate. For example, if a 10-year Treasury note is yielding 5% and inflation is 2%, the real interest rate is 3%.) If inflation is negative, the principal and income of an inflation-protected bond will decline and could result in losses for the fund.

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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 funds. 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 funds. This principal is returned to the funds 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.

U.S. Government Agency Mortgage-Backed Securities These are obligations issued or guaranteed by the U.S. government or one of its agencies or instrumentalities, such as GNMA, FNMA, the Federal Home Loan Mortgage Corporation ( "Freddie Mac" or "FHLMC" ), and the Federal Agricultural Mortgage Corporation ( "Farmer Mac" or "FAMC" ). FNMA, FHLMC, and FAMC obligations are not backed by the full faith and

credit of the U.S. government as GNMA certificates are, but they are supported by the instrumentality`s right to borrow from the U.S. Treasury. U.S. Government Agency Mortgage-Backed Certificates provide for the pass- through to investors of their pro-rata share of monthly payments (including any prepayments) made by the individual borrowers on the pooled mortgage loans, net of any fees paid to the guarantor of such securities and the servicer of the underlying mortgage loans. Each of GNMA, FNMA, FHLMC, and FAMC guarantees timely distributions of interest to certificate holders. GNMA and FNMA guarantee timely distributions of scheduled principal. FHLMC has in the past guaranteed only the ultimate collection of principal of the underlying mortgage loan; however, FHLMC now issues mortgage-backed securities (FHLMC Gold PCS) which also guarantee timely payment of monthly principal reductions.

GNMA Certificates GNMA is a wholly owned corporate instrumentality of the United States within the Department of Housing and Urban Development. The National Housing Act of 1934, as amended (the "Housing Act" ), authorizes GNMA to guarantee the timely payment of the principal of and interest on certificates that are based on and backed by a pool of mortgage loans insured by the Federal Housing Administration under the Housing Act, or Title V of the Housing Act of 1949 ( "FHA Loans" ), or guaranteed by the Department of Veterans Affairs under the Servicemen`s Readjustment Act of 1944, as amended ( "VA Loans" ), or by pools of other eligible mortgage loans. The Housing Act provides that the full faith and credit of the U.S. government is pledged to the payment of all amounts that may be required to be paid under any guaranty. In order to meet its obligations under such guaranty, GNMA is authorized to borrow from the U.S. Treasury with no limitations as to amount.

FNMA Certificates FNMA is a federally chartered and privately owned corporation organized and existing under the Federal National Mortgage Association Charter Act of 1938. FNMA Certificates represent a pro-rata interest in a group of mortgage loans purchased by FNMA. FNMA guarantees the timely payment of principal and interest on the securities it issues. The obligations of FNMA are not backed by the full faith and credit of the U.S. government.

FHLMC Certificates FHLMC is a corporate instrumentality of the United States created pursuant to the Emergency Home Finance Act of 1970, as amended ( "FHLMC Act" ). FHLMC Certificates represent a pro-rata interest in a group of mortgage loans purchased by FHLMC. FHLMC guarantees timely payment of interest and principal on certain securities it issues and timely payment of interest and eventual payment of principal on other securities it issues. The obligations of FHLMC are obligations solely of FHLMC and are not backed by the full faith and credit of the U.S. government.

FAMC Certificates FAMC is a federally chartered instrumentality of the United States established by Title VIII of the Farm Credit Act of 1971, as amended ( "Charter Act" ). FAMC was chartered primarily to attract new capital for financing of agricultural real estate by making a secondary market in certain qualified agricultural real estate loans. FAMC provides guarantees of timely payment of principal and interest on securities representing interests in, or obligations backed by, pools of mortgages secured by first liens on agricultural real estate. Similar to FNMA and FHLMC, FAMC Certificates are not supported by the full faith and credit of the U.S. government; rather, FAMC may borrow from the U.S. Treasury to meet its guaranty obligations.

As discussed above, prepayments on the underlying mortgages and their effect upon the rate of return of a mortgage-backed security is the principal investment risk for a purchaser of such securities, like the funds. Over time, any pool of mortgages will experience prepayments due to a variety of factors, including (1) sales of the underlying homes (including foreclosures), (2) refinancings of the underlying mortgages, and (3) increased amortization by the mortgagee. These factors, in turn, depend upon general economic factors, such as level of interest rates and economic growth. Thus, investors normally expect prepayment rates to increase during periods of strong economic growth or declining interest rates, and to decrease in recessions and rising interest rate environments. Accordingly, the life of the mortgage-backed security is likely to be substantially shorter than the stated maturity of the mortgages in the underlying pool. Because of such variation in prepayment rates, it is not possible to predict the life of a particular mortgage-backed security, but FHA statistics indicate that 25- to 30-year single family dwelling mortgages have an average life of approximately 12 years. The majority of GNMA Certificates are backed by mortgages of this type, and, accordingly, the generally accepted practice treats GNMA Certificates as 30-year securities which prepay in full in the 12th year. FNMA and FHLMC Certificates may have differing prepayment characteristics.

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Fixed - rate mortgage-backed securities bear a stated "coupon rate" which represents the effective mortgage rate at the time of issuance, less certain fees to GNMA, FNMA, and FHLMC for providing the guarantee, and the issuer for assembling the pool and for passing through monthly payments of interest and principal.

Payments to holders of mortgage-backed securities consist of the monthly distributions of interest and principal less the applicable fees. The actual yield to be earned by a holder of mortgage-backed securities is calculated by dividing interest payments by the purchase price paid for the mortgage-backed securities (which may be at a premium or a discount from the face value of the certificate).

Monthly distributions of interest, as contrasted to semiannual distributions which are common for other fixed interest investments, have the effect of compounding and thereby raising the effective annual yield earned on mortgage-backed securities. Because of the variation in the life of the pools of mortgages which back various mortgage-backed securities, and because it is impossible to anticipate the rate of interest at which future principal payments may be reinvested, the actual yield earned from a portfolio of mortgage-backed securities will differ significantly from the yield estimated by using an assumption of a certain life for each mortgage- backed security included in such a portfolio as described above.

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 such 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 tranches 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 funds invest, 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 and from the structure of the deal (priority of the individual tranches). 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.

U.S. Government Agency Multi- C lass Pass-Through Securities Unlike CMOs, U.S. Government Agency Multi- C lass Pass-Through Securities, which include FNMA Guaranteed Real Estate Mortgage Investment Conduit Pass-Through Certificates and FHLMC Multi-Class Mortgage Participation Certificates, are ownership interests in a pool of m ortgage a ssets. Unless the context indicates otherwise, all references herein to CMOs include multi-class pass-through securities.

Multi-Class Residential Mortgage Securities Such securities represent interests in pools of mortgage loans to residential home buyers made by commercial banks, savings and loan associations, or other financial institutions. Unlike GNMA, FNMA, and FHLMC securities, the payment of principal and interest on Multi-Class Residential Mortgage Securities is not guaranteed by the U.S. government or any of its agencies. Accordingly, yields on Multi-Class Residential Mortgage Securities have been historically higher than the yields on U.S. government mortgage securities. However, the risk of loss due to default on such instruments is higher since

they are not guaranteed by the U.S. government or its agencies. Additionally, pools of such securities may be divided into senior or subordinated segments. Although subordinated mortgage securities may have a higher yield than senior mortgage securities, the risk of loss of principal is greater because losses on the underlying mortgage loans must be borne by persons holding subordinated securities before those holding senior mortgage securities.

Privately Issued Mortgage-Backed Certificates These are pass-through certificates issued by nongovernmental issuers. Pools of conventional residential or commercial mortgage loans created by such issuers generally offer a higher rate of interest than government and government-related pools because there are no direct or indirect government guarantees of payment. Timely payment of interest and principal of these pools is, however, generally supported by various forms of insurance or guarantees, including individual loan, title, pool, and hazard insurance. The insurance and guarantees are issued by government entities, private insurance, or the mortgage poolers. Such insurance and guarantees and the creditworthiness of the issuers thereof will be considered in determining whether a mortgage-related security meets the funds` quality standards. The funds may buy mortgage-related securities without insurance or guarantees if through an examination of the loan experience and practices of the poolers, the investment manager determines that the securities meet the funds` quality standards.

Stripped Mortgage-Backed Securities These instruments are a type of potentially high-risk derivative. They represent interests in a pool of mortgages, the cash flow of which has been separated into its interest and principal components. Interest only securities ( "IOs" ) receive the interest portion of the cash flow while principal only securities ( "POs" ) receive the principal portion. IOs and POs are usually structured as tranches of a CMO. Stripped Mortgage-Backed Securities may be issued by U.S. government agencies or by private issuers similar to those described above 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 Code, POs may generate taxable income from the current accrual of original issue discount, without a corresponding distribution of cash to the funds.

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. In the case of IOs, prepayments affect the amount, but not the timing, of cash flows provided to the investor. In contrast, prepayments on the mortgage pool affect the timing, but not the amount, of cash flows received by investors in POs. 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, investors may fail to fully recoup their 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 SEC has advised the funds that it believes the funds should treat IOs and POs, other than government-issued IOs or POs backed by fixed-rate mortgages, as illiquid securities and, accordingly, limit their investments in such securities, together with all other illiquid securities, to 15% of the funds` net assets. Under the staff`s position, the determination of whether a particular government-issued IO or PO backed by fixed-rate mortgages is liquid may be made on a case by case basis under guidelines and standards established by the funds` Boards . The funds` Boards have 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; and size of the issue and the number of dealers who make a market in the IO or PO.

Adjustable Rate Mortgage Securities ( " ARMs " ) ARMs, like fixed - rate mortgages, have a specified maturity date, and the principal amount of the mortgage is repaid over the life of the mortgage. Unlike fixed - rate mortgages, the interest rate on ARMs is adjusted at regular intervals based on a specified, published interest rate "index" such as a Treasury rate index. The new rate is determined by adding a specific interest amount, the "margin," to the interest rate of the index. Investment in ARM securities allows the funds to participate in changing interest rate levels through regular adjustments in the coupons of the underlying mortgages, resulting in more variable current income and lower price volatility than longer-term fixed - rate mortgage securities. ARM securities are a

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less effective means of locking in long-term rates than fixed - rate mortgages since the income from adjustable rate mortgages will increase during periods of rising interest rates and decline during periods of falling rates.

Other Mortgage-Related Securities G overnmental, government-related, or private entities may create mortgage loan pools offering pass-through investments in addition to those described above. The mortgages underlying these securities may be alternative mortgage instruments, that is, mortgage instruments whose principal or interest payments may vary or whose terms to maturity may differ from customary long-term fixed-rate mortgages. As new types of mortgage-related securities are developed and offered to investors, the investment manager will, consistent with the funds` objectives, policies, and quality standards, consider making investments in such new types of securities.

Asset-Backed Securitie s

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Background The Asset-Backed Securities (ABS) market has been one of the fastest growing sectors of the U.S. fixed income market since its inception in late 1985. Although initial ABS transactions were backed by auto loans and credit card receivables, today`s market has evolved to include a variety of asset types including home equity loans, student loans, equipment leases, stranded utility costs, and collateralized bond/loan obligations. For investors, securitization typically provides an opportunity to invest in high quality securities with higher credit ratings and less downgrade/event risk than corporate bonds. Unlike mortgages, prepayments on ABS collateral are less sensitive to changes in interest rates. They can also be structured into classes that meet the market`s demand for various maturities and credit quality.

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Structure Asset-backed securities are bonds that represent an ownership interest in a pool of receivables sold by originators into a special purpose vehicle (SPV). The collateral types can vary, so long as they are secured by homogeneous assets with relatively predictable cash flows. Assets that are transferred through a sale to a special purpose vehicle, are legally separated from those of the seller/servicer, which insulates investors from bankruptcy or other event risk associated with the seller/servicer of those assets. Most senior tranches of ABS are structured to a triple-A rated level through credit enhancement, however, ABS credit ratings range from AAA to non-investment-grade. Many ABS transactions are structured to include payout events/performance triggers which provide added protection against deteriorating credit quality.

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ABS structures are generally categorized by two distinct types of collateral. Amortizing assets (such as home equity loans, auto loans and equipment leases) typically pass through principal and interest payments directly to investors, while revolving assets (such as credit card receivables, home equity lines of credit and dealer floor- plan loans) typically reinvest principal and interest payments in new collateral for a specified period of time. The majority of amortizing transactions are structured as straight sequential-pay transactions. In these structures, all principal amortization and prepayments are directed to the shortest maturity class until it is retired, then to the next shortest class and so on. The majority of revolving assets are structured as bullets, whereby investors receive periodic interest payments and only one final payment of principal at maturity.

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Underlying Assets The asset-backed securities that may be purchased include securities backed by pools of mortgage-related receivables known as home equity loans, or of consumer receivables such as automobile loans or credit card loans. Other types of ABS may also be purchased. 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 securities 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 and return on any asset- backed security is difficult to predict with precision and actual return or yield to maturity may be more or less than the anticipated return or yield to maturity.

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Methods of Allocating Cash Flows While some 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 are made subordinate to the right to such payments of the remaining class or classes. 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. Asset-backed securities in which the payment streams on the underlying assets are allocated in a manner

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different than those described above may be issued in the future. The funds may invest in such asset-backed securities if the investment is otherwise consistent with the fund`s investment objectives, policies and restrictions.

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Types of Credit Support Asset-backed securities are typically backed by a pool of assets representing the obligations of a diversified pool of numerous obligors. 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, "external credit enhancement", through various means of structuring the transaction, "internal credit enhancement", or through a combination of such approaches. Examples of asset-backed securities with credit support arising out of the structure of the transaction include:

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Excess Spread Typically the first layer of protection against losses, equal to the cash flow from the underlying receivables remaining after deducting the sum of the investor coupon, servicing fees and losses.

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Subordination Interest and principal that would have otherwise been distributed to a subordinate class is used to support the more senior classes. This feature is intended to enhance the likelihood that the holder of the senior class certificate will receive regular payments of interest and principal. Subordinate classes have a greater risk of loss than senior classes.

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Reserve Funds Cash that is deposited and/or captured in a designated account that may be used to cover any shortfalls in principal, interest, or servicing fees.

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Overcollateralization A form of credit enhancement whereby the principal amount of collateral used to secure a given transaction exceeds the principal of the securities issued. Overcollateralization can be created at the time of issuance or may build over time.

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Surety Bonds Typically consist of third party guarantees to irrevocably and unconditionally make timely payments of interest and ultimate repayment of principal in the event there are insufficient cash flows from the underlying collateral .

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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. Depending upon the type of assets securitized, historical information on credit risk and prepayment rates may be limited or even unavailable. Delinquency or loss in excess of that anticipated could adversely affect the return on an investment in an asset-backed security. There is no guarantee that the amount of any type of credit enhancement available will be sufficient to protect against future losses on the underlying collateral.

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Some of the specific types of ABS that the funds may invest in include the following.

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Home Equity Loans These ABS typically are backed by pools of mortgage loans made to subprime borrowers or borrowers with blemished credit histories. The underwriting standards for these loans are more flexible than the standards generally used by banks for borrowers with non-blemished credit histories with regard to the borrower`s credit standing and repayment ability. Borrowers who qualify generally have impaired credit histories, which may include a record of major derogatory credit items such as outstanding judgments or prior bankruptcies. In addition, they may not have the documentation required to qualify for a standard mortgage loan.

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As a result, the mortgage loans in the mortgage pool are likely to experience rates of delinquency, foreclosure and bankruptcy that are higher, and that may be substantially higher, than those experienced by mortgage loans underwritten in a more traditional manner. Furthermore, changes in the values of the mortgaged properties, as well as changes in interest rates, may have a greater effect on the delinquency, foreclosure, bankruptcy and loss experience of the mortgage loans in the mortgage pool than on mortgage loans originated in a more traditional manner.

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With respect to first lien mortgage loans, the underwriting standards do not prohibit a mortgagor from obtaining, at the time of origination of the originator`s first lien mortgage loan, additional financing which is

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subordinate to that first lien mortgage loan, which subordinate financing would reduce the equity the mortgagor would otherwise appear to have in the related mortgaged property as indicated in the loan-to-value ratio.

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Risk regarding mortgage rates

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The pass-through rates on the adjustable-rate certificates may adjust monthly and are generally based on one- month LIBOR. The mortgage rates on the mortgage loans are either fixed or adjust semi-annually based on six- month LIBOR, which is referred to as a mortgage index. Because the mortgage index may respond to various economic and market factors different than those affecting one-month LIBOR, there is not necessarily a correlation in the movement between the interest rates on those mortgage loans and the pass-through rates of the adjustable rate certificates. As a result, the interest payable on the related interest-bearing certificates may be reduced because of the imposition of a pass-through rate cap called the " net rate cap ".

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Yield and reinvestment could be adversely affected by unpredictability of prepayments

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No one can accurately predict the level of prepayments that an asset-backed mortgage pool may experience. Factors which influence prepayment behavior include: general economic conditions, the level of prevailing interest rates, the availability of alternative financing, the applicability of prepayment charges and homeowner mobility. Reinvestment risk results from a faster or slower rate of principal payments than expected. A rising interest rate environment and the resulting slowing of prepayments could result in greater volatility of these securities. A falling interest rate environment and the resulting increase in prepayments could require reinvestment in lower yielding securities.

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Credit Card Backed Securities These ABS are backed by revolving pools of credit card receivables. Due to the revolving nature of these assets, the credit quality could change over time. Unlike most other asset-backed securities, credit card receivables are unsecured obligations of the cardholder and payments by cardholders are the primary source of payment on these securities. The revolving nature of these card accounts generally provides for monthly payments to the trust. In order to issue securities with longer dated maturities, most Credit Card Backed Securities are issued with an initial "revolving" period during which collections are reinvested in new receivables. The revolving period may be shortened upon the occurrence of specified events which may signal a potential deterioration in the quality of the assets backing the security.

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Automobile Loans These ABS are backed by receivables from motor vehicle installment sales contracts or installment loans secured by motor vehicles. These securities are primarily discrete pools of assets which pay down over the life of the ABS. The securities are not obligations of the seller of the vehicle, or servicer of the loans. The primary source of funds for payments on the securities comes from payment on the underlying trust receivables as well as from credit support.

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Real Estate and R e al Estate Investment Trusts ( " REIT s " )

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In vestments in REIT s may experience many of the same risks involved with investing in real estate directly. These risks include: declines in real estate values, risks related to local or general economic conditions, particularly lack of demand, overbuilding and increased competition, increases in property taxes and operating expenses, changes in zoning laws, heavy cash flow dependency, possible lack of availability of mortgage funds, obsolescence, losses due to natural disasters, condemnation of properties, regulatory limitations on rents and fluctuations in rental income, variations in market rental rates, and possible environmental liabilities. REITs may own real estate properties (Equity REITs) and be subject to these risks directly, or may make or purchase mortgages (Mortgage REITs) and be subject to these risks indirectly through underlying construction, development, and long-term mortgage loans that may default or have payment problems.

Equity REITs can be affected by rising interest rates that may cause investors to demand a high annual yield from future distributions which, in turn, could decrease the market prices for the REITs. In addition, rising interest rates also increase the costs of obtaining financing for real estate projects. Since many real estate projects are dependent upon receiving financing, this could cause the value of the Equity REITs in which the funds invest to decline.

Mortgage REITs may hold mortgages that the mortgagors elect to prepay during periods of declining interest rates , which may diminish the yield on such REITs. In addition, borrowers may not be able to repay mortgages when due , which could have a negative effect on the funds.

Some REITs have relatively small market capitalizations which could increase their volatility. REITs tend to be dependent upon specialized management skills and have limited diversification so they are subject to risks inherent in operating and financing a limited number of properties. In addition, when the funds invest in REITs, a shareholder will bear his proportionate share of fund expenses and indirectly bear similar expenses of the REITs. REITs depend generally on their ability to generate cash flow to make distributions to shareholders. In addition, both E quity and M ortgage REITs are subject to the risks of failing to qualify for tax-free status of income under the Code or failing to maintain exemption from the 1940 Act.

Collateralized Bond or Loan Obligations

Collateralized Bond Obligations ( "CBOs" ) are bonds collateralized by corporate bonds, mortgages, or asset- backed securities and Collateralized Loan Obligations ( "CLOs" ) are bonds collateralized by bank loans. CBOs and CLOs are structured into tranches, and payments are allocated such that each tranche has a predictable cash flow stream and average life. CBOs are fairly recent entrants to the fixed-income market. Most CBOs issued to date have been collateralized by high-yield bonds or loans, with heavy credit enhancement.

Loan Participations and Assignments

Loan participations and assignments (collectively "participations" ) will typically be participating interests in loans made by a syndicate of banks, represented by an agent bank which has negotiated and structured the loan, to corporate borrowers to finance internal growth, mergers, acquisitions, stock repurchases, leveraged buyouts, and other corporate activities. Such loans may also have been made to governmental borrowers, especially governments of developing countries which is referred to as Loans to Developing Countries debt ( "LDC debt" ). LDC debt will involve the risk that the governmental entity responsible for the repayment of the debt may be unable or unwilling to do so when due. The loans underlying such participations may be secured or unsecured, and the funds may invest in loans collateralized by mortgages on real property or which have no collateral. The loan participations themselves may extend for the entire term of the loan or may extend only for short "strips" that correspond to a quarterly or monthly floating-rate interest period on the underlying loan. Thus, a term or revolving credit that extends for several years may be subdivided into shorter periods.

The loan participations in which the funds will invest will also vary in legal structure. Occasionally, lenders assign to another institution both the lender`s rights and obligations under a credit agreement. Since this type of assignment relieves the original lender of its obligations, it is called a novation. More typically, a lender assigns only its right to receive payments of principal and interest under a promissory note, credit agreement, or similar document. A true assignment shifts to the assignee the direct debtor-creditor relationship with the underlying borrower. Alternatively, a lender may assign only part of its rights to receive payments pursuant to the underlying instrument or loan agreement. Such partial assignments, which are more accurately characterized as "participating interests," do not shift the debtor-creditor relationship to the assignee, who must rely on the original lending institution to collect sums due and to otherwise enforce its rights against the agent bank which administers the loan or against the underlying borrower.

There may not be a recognizable, liquid public market for loan participations. To the extent this is the case, the funds would consider the loan participation as illiquid and subject to the funds` restriction on investing no more than 15% of their net assets in illiquid securities.

Where required by applicable SEC positions, the funds will treat both the corporate borrower and the bank selling the participation interest as an issuer for purposes of its fundamental investment restriction on diversification.

Various service fees received by the funds from loan participations may be treated as non-interest income depending on the nature of the fee (commitment, takedown, commission, service , or loan origination). To the extent the service fees are not interest income, they will not qualify as income under Section 851(b) of the Code. Thus the sum of such fees plus any other nonqualifying income earned by the funds cannot exceed 10% of total income.

Trade Claims

Trade claims are non-securitized rights of payment arising from obligations other than borrowed funds. Trade claims typically arise when, in the ordinary course of business, vendors and suppliers extend credit to a company by offering payment terms. Generally, when a company files for bankruptcy protection, payments on these trade claims cease and the claims are subject to compromise along with the other debts of the company.

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Trade claims typically are bought and sold at a discount reflecting the degree of uncertainty with respect to the timing and extent of recovery. In addition to the risks otherwise associated with low-quality obligations, trade claims have other risks, including the possibility that the amount of the claim may be disputed by the obligor.

Over the last few years a market for the trade claims of bankrupt companies has developed. Many vendors are either unwilling or lack the resources to hold their claim through the extended bankruptcy process with an uncertain outcome and timing. Some vendors are also aggressive in establishing reserves against these receivables, so that the sale of the claim at a discount may not result in the recognition of a loss.

Trade claims can represent an attractive investment opportunity because these claims typically are priced at a discount to comparable public securities. This discount is a reflection of both a less liquid market, a smaller universe of potential buyers, and the risks peculiar to trade claim investing. It is not unusual for trade claims to be priced at a discount to public securities that have an equal or lower priority claim.

As noted above, investing in trade claims does carry some unique risks which include:

Establishing the Amount of the Claim Frequently, the supplier`s estimate of its receivable will differ from the customer`s estimate of its payable. Resolution of these differences can result in a reduction in the amount of the claim. This risk can be reduced by only purchasing scheduled claims (claims already listed as liabilities by the debtor) and seeking representations from the seller.

Defenses to Claims The debtor has a variety of defenses that can be asserted under the bankruptcy code against any claim. Trade claims are subject to these defenses, the most common of which for trade claims relates to preference payments. (Preference payments are all payments made by the debtor during the 90 days prior to the filing. These payments are presumed to have benefited the receiving creditor at the expense of the other creditors. The receiving creditor may be required to return the payment unless it can show the payments were received in the ordinary course of business.) While none of these defenses can result in any additional liability of the purchaser of the trade claim, they can reduce or wipe out the entire purchased claim. This risk can be reduced by seeking representations and indemnification from the seller.

Documentation/Indemnification Each trade claim purchased requires documentation that must be negotiated between the buyer and seller. This documentation is extremely important since it can protect the purchaser from losses such as those described above. Legal expenses in negotiating a purchase agreement can be fairly high. Additionally, it is important to note that the value of an indemnification depends on the seller`s credit.

Volatile Pricing Due to Illiquid Market There are only a handful of brokers for trade claims and the quoted price of these claims can be volatile. Generally, it is expected that t rade c laims would be considered illiquid investments.

No Current Yield/Ultimate Recovery Trade claims are almost never entitled to earn interest. As a result, the return on such an investment is very sensitive to the length of the bankruptcy, which is uncertain. Although not unique to trade claims, it is worth noting that the ultimate recovery on the claim is uncertain and there is no way to calculate a conventional yield to maturity on this investment. Additionally, the exit for this investment is a plan of reorganization which may include the distribution of new securities. These securities may be as illiquid as the original trade claim investment.

Tax Issue Although the issue is not free from doubt, it is likely that t rade c laims would be treated as non- securities investments. As a result, any gains would be considered "nonqualifying" under the Code. The funds may have up to 10% of their gross income (including capital gains) derived from nonqualifying sources.

Zero - Coupon and Pay-in-Kind Bonds

A zero-coupon security has no cash coupon payments. Instead, the issuer sells the security at a substantial discount from its maturity value. The interest received by the investor from holding this security to maturity is the difference between the maturity value and the purchase price. The advantage to the investor is that reinvestment risk of the income received during the life of the bond is eliminated. However, zero-coupon bonds, like other bonds, retain interest rate and credit risk and usually display more price volatility than those securities that pay a cash coupon.

Pay-in-Kind ( "PIK" ) Instruments are securities that pay interest in either cash or additional securities, at the issuer`s option, for a specified period. PIKs, like zero - coupon bonds, are designed to give an issuer flexibility in

managing cash flow. PIK bonds can be either senior or subordinated debt and trade flat (i.e., without accrued interest). The price of PIK bonds is expected to reflect the market value of the underlying debt plus an amount representing accrued interest since the last payment. PIK s are usually less volatile than zero-coupon bonds, but more volatile than cash pay securities.

For federal income tax purposes, these types of bonds will require the recognition of gross income each year even though no cash may be paid to the funds until the maturity or call date of the bond. The funds will nonetheless be required to distribute substantially all of this gross income each year to comply with the Internal Revenue Code, and such distributions could reduce the amount of cash available for investment by the funds.

Adjustable Rate Securities

Generally, the maturity of a security is deemed to be the period remaining until the date (noted on the face of the instrument) on which the principal amount must be paid or , in the case of an instrument called for redemption, the date on which the redemption payment must be made. However, certain securities may be issued with demand features or adjustable interest rates that are reset periodically by predetermined formulas or indexes in order to minimize movements in the principal value of the investment in accordance with Rule 2a-7 under the 1 940 Act . Such securities may have long-term maturities, but may be treated as a short-term investment under certain conditions. Generally, as interest rates decrease or increase, the potential for capital appreciation or depreciation on these securities is less than for fixed rate obligations. These securities may take a variety of forms, including variable rate, floating rate, and put option securities.

Variable Rate Securities Variable rate instruments are those whose terms provide for the adjustment of their interest rates on set dates and which, upon such adjustment, can reasonably be expected to have a market value that approximates its par value. A variable rate instrument, the principal amount of which is scheduled to be paid in 397 days or less, is deemed to have a maturity equal to the period remaining until the next readjustment of the interest rate. A variable rate instrument which is subject to a demand feature entitles the purchaser to receive the principal amount of the underlying security or securities, either (i) upon notice of no more than 30 days or (ii) at specified intervals not exceeding 397 days and upon no more than 30 days` notice, is deemed to have a maturity equal to the longer of the period remaining until the next readjustment of the interest rate or the period remaining until the principal amount can be recovered through demand.

When-Issued Securities and Forward Commitment Contracts

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 funds to the issuer and no interest accrues to the funds. The purchase of these securities will result in a loss if their values decline 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 . At the time the funds make 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 funds will cover these securities by maintaining cash, liquid, high-grade debt securities, or other suitable cover as permitted by the SEC with its custodian bank equal in value to its commitments for the securities 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 funds (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 s remain fully or almost fully invested (in securities with a remaining maturity of more than one year) at the same time they purchase these securities, there will be greater fluctuations in the funds` net asset value than if the funds did not purchase them.

Municipal Securities

Subject to the investment objectives and programs described in the prospectus and the additional investment restrictions described in this Statement of Additional Information, the funds` portfolios may consist of any combination of the various types of municipal securities described below or other types of municipal securities that may be developed. The amount of the funds` assets invested in any particular type of municipal security can be expected to vary.

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The term "municipal securities" means obligations issued by or on behalf of states, territories, and possessions of the United States and the District of Columbia and their political subdivisions, agencies , and instrumentalities, as well as certain other persons and entities, the interest from which is exempt from federal income tax. In determining the tax-exempt status of a municipal security, the funds rely on the opinion of the issuer`s bond counsel at the time of the issuance of the security. However, it is possible this opinion could be overturned, and , as a result, the interest received by the funds from such a security might not be exempt from federal income tax.

Municipal securities are classified by maturity as notes, bonds, or adjustable rate securities.

Municipal Notes

Municipal notes generally are used to provide short-term operating or capital needs and generally have maturities of one year or less. Municipal notes include:

Tax Anticipation Notes Tax anticipation notes are issued to finance working capital needs of municipalities. Generally, they are issued in anticipation of various seasonal tax revenue, such as income, property, use , and business taxes, and are payable from these specific future taxes.

Revenue Anticipation Notes Revenue anticipation notes are issued in expectation of receipt of revenue s, such as sales taxes, toll revenues , or water and sewer charges, that are used to pay off the notes .

Bond Anticipation Notes Bond anticipation notes are issued to provide interim financing until long-term financing can be arranged. In most cases, the long-term bonds then provide the money for the repayment of the notes.

Tax-Exempt Commercial Paper Tax-exempt commercial paper is a short-term obligation with a stated maturity of 270 days or less. It is issued by state and local governments or their agencies to finance seasonal working capital need s or as short-term financing in anticipation of longer-term financing.

Municipal Bonds Municipal bonds, which meet longer-term capital needs and generally have maturities of more than one year when issued, have two principal classifications: general obligation bonds and revenue bonds. Two additional categories of potential purchases are lease revenue bonds and pre refunded/escrowed to maturity bonds. Another type of municipal bond is referred to as an i ndustrial d evelopment b ond.

General Obligation Bonds Issuers of general obligation bonds include states, counties, cities, towns, and special districts. The proceeds of these obligations are used to f und a wide range of public projects, including construction or improvement of schools, public buildings, highways and roads, and general projects not supported by user fees or specifically identified revenues. The basic security behind general obligation bonds is the issuer`s pledge of its full faith and credit and taxing power for the payment of principal and interest. The taxes that can be levied for the payment of debt service may be limited or unlimited as to the rate or amount of special assessments. In many cases voter approval is required before an issuer may sell this type of bond.

Revenue Bonds The principal security for a revenue bond is generally the net revenues derived from a particular facility or enterprise or , in some cases, the proceeds of a special charge or other pledged revenue source. Revenue bonds are issued to finance a wide variety of capital projects including: electric, gas, water , and sewer systems; highways, bridges, and tunnels; port and airport facilities; colleges and universities; and hospitals. Revenue bonds are sometimes used to finance various privately operated facilities provided they meet certain tests established for tax-exempt status.

Although the principal security behind these bonds may vary, many provide additional security in the form of a mortgage or debt service reserve fund. Some authorities provide further security in the form of the state`s ability (without obligation) to make up deficiencies in the debt service reserve fund. Revenue bonds usually do not require prior voter approval before they may be issued.

Lease Revenue Bonds Municipal borrowers may also finance capital improvements or purchases with tax- exempt leases. The security for a lease is generally the borrower`s pledge to make annual appropriations for lease payments. The lease payment is treated as an operating expense subject to appropriation risk and not a full faith and credit obligation of the issuer. Lease revenue bonds are generally considered less secure than a general obligation or revenue bond and often do not include a debt service reserve fund. To the extent the funds` Boards determine such securities are illiquid, they will be subject to the funds` limit on illiquid securities. There have also been certain legal challenges to the use of lease revenue bonds in various states.

The liquidity of such securities will be determined based on a variety of factors which may include, among others: (1) the frequency of trades and quotes for the obligation; (2) the number of dealers willing to purchase or sell the security and the number of other potential buyers; (3) the willingness of dealers to undertake to make a market in the security; (4) the nature of the marketplace trades, including the time needed to dispose of the security, the method of soliciting offers, and the mechanics of transfer; and (5) the rating assigned to the obligation by an established rating agency or T. Rowe Price.

Pre refunded/Escrowed to Maturity Bonds Certain municipal bonds have been refunded with a later bond issue from the same issuer. The proceeds from the later issue are used to defease the original issue. In many cases the original issue cannot be redeemed or repaid until the first call date or original maturity date. In these cases, the refunding bond proceeds typically are used to buy U.S. Treasury securities that are held in an escrow account until the original call date or maturity date. The original bonds then become "pre refunded" or "escrowed to maturity" and are considered high-quality investments. While still tax-exempt, the security is the proceeds of the escrow account. To the extent permitted by the S E C and the Internal Revenue Service, a fund`s investment in such securities refunded with U.S. Treasury securities will, for purposes of diversification rules applicable to the funds, be considered an investment in U. S. Treasury securities.

Private Activity Bonds Under current tax law, all municipal debt is divided broadly into two groups: governmental purpose bonds and private activity bonds. Governmental purpose bonds are issued to finance traditional public purpose projects such as public buildings and roads. Private activity bonds may be issued by a state or local government or public authority but principally benefit private users and are considered taxable unless a specific exemption is provided.

The tax code currently provides exemptions for certain private activity bonds such as not-for-profit hospital bonds, small-issue industrial development revenue bonds , and mortgage subsidy bonds, which may still be issued as tax-exempt bonds. Some, but not all, private activity bonds are subject to alternative minimum tax.

Industrial Development Bonds Industrial development bonds are considered m unicipal b onds if the interest paid is exempt from federal income tax. They are issued by or on behalf of public authorities to raise money to finance various privately operated facilities for business and manufacturing, housing, sports, and pollution control. These bonds are also used to finance public facilities such as airports, mass transit systems, ports, and parking. The payment of the principal and interest on such bonds is dependent solely on the ability of the facility`s user to meet its financial obligations and the pledge, if any, of real and personal property so financed as security for such payment.

Participation Interests The funds may purchase from third parties participation interests in all or part of specific holdings of municipal securities. The purchase may take different forms: in the case of short-term securities, the participation may be backed by a liquidity facility that allows the interest to be sold back to the third party (such as a trust, broker , or bank) for a predetermined price of par at stated intervals. The seller may receive a fee from the funds in connection with the arrangement.

In the case of longer-term bonds, the fund s may purchase interests in a pool of municipal bonds or a single municipal bond or lease without the right to sell the interest back to the third party.

The fund s will not purchase participation interests unless a satisfactory opinion of counsel or ruling of the Internal Revenue Service has been issued that the interest earned from the municipal securities on which the fund s hold participation interests is exempt from federal income tax to the fund s. However, there is no guarantee the IRS would treat such interest income as tax-exempt.

When-Issued Securities

New issues of municipal securities are often offered on a when-issued basis; that is, delivery and payment for the securities normally takes place 15 to 45 days or more after the date of the commitment to purchase. The payment obligation and the interest rate that will be received on the securities are each fixed at the time the buyer enters into the commitment. The funds will only make a commitment to purchase such securities with the intention of actually acquiring the securities. However, the funds may sell these securities before the settlement date if it is deemed advisable as a matter of investment strategy. The funds will maintain cash , high- grade marketable debt securities , or other suitable cover with its custodian bank equal in value to commitments for when-issued securities. Such securities either will mature or, if necessary, be sold on or before the settlement date. Securities purchased on a when-issued basis and the securities held in the funds` portfolios are subject to

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changes in market value based upon the public perception of the creditworthiness of the issuer and changes in the level of interest rates (which will generally result in similar changes in value, i.e., both experiencing appreciation when interest rates decline and depreciation when interest rates rise). Therefore, to the extent the funds remain fully invested or almost fully invested at the same time that they have purchased securities on a when-issued basis, there will be greater fluctuations in their net asset value than if they solely set aside cash to pay for when-issued securities. In the case of the m oney f und s , this could increase the possibility that the market value of the funds` assets could vary from $1.00 per share. In addition, there will be a greater potential for the realization of capital gains, which are not exempt from federal income tax. When the time comes to pay for when-issued securities, the funds will meet their obligations from then-available cash flow, sale of securities , or, although it would not normally expect to do so, from sale of the when-issued securities themselves (which may have a value greater or less than the payment obligation). The policies described in this paragraph are not fundamental and may be changed by the funds upon notice to shareholders.

Residual Interest Bonds are a type of high-risk derivative. The fund s may purchase municipal bond issues that are structured as two-part, residual interest bond and variable rate security offerings. The issuer is obligated only to pay a fixed amount of tax-free income that is to be divided among the holders of the two securities. The interest rate for the holders of the variable rate securities will be determined by an index or auction process held approximately every seven to 35 days while the bondholders will receive all interest paid by the issuer minus the amount given to the variable rate security holders and a nominal auction fee. Therefore, the coupon of the residual interest bonds, and thus the income received, will move inversely with respect to short-term, 7 - to 35- day tax-exempt interest rates. There is no assurance that the auction will be successful and that the variable rate security will provide short-term liquidity. The issuer is not obligated to provide such liquidity. In general, these securities offer a significant yield advantage over standard municipal securities, due to the uncertainty of the shape of the yield curve (i.e., short-term versus long-term rates) and consequent income flows.

Unlike many adjustable rate securities, residual interest bonds are not necessarily expected to trade at par and in fact present significant market risks. In certain market environments, residual interest bonds may carry substantial premiums or be at deep discounts. This is a relatively new product in the municipal market with limited liquidity to date.

The fund s may invest in other types of derivative instruments as they become available.

For the purpose of the fund s` investment restrictions, the identification of the "issuer" of municipal securities which are not general obligation bonds is made by T. Rowe Price, on the basis of the characteristics of the obligation as described above, the most significant of which is the source of fund s for the payment of principal and interest on such securities.

There are, of course, other types of securities that are or may become available that are similar to the foregoing , and the fund s may invest in these securities.

Forwards

In some cases, t he funds may purchase bonds on a when-issued basis with longer - than - standard settlement dates, in some cases exceeding one to two years. In such cases, the fund s must execute a receipt evidencing the obligation to purchase the bond on the specified issue date, and must segregate cash internally to meet that forward commitment. Municipal "forwards" typically carry a substantial yield premium to compensate the buyer for the risks associated with a long when-issued period, including: shifts in market interest rates that could materially impact the principal value of the bond, deterioration in the credit quality of the issuer, loss of alternative investment options during the when-issued period, changes in tax law or issuer actions that would affect the exempt interest status of the bonds and prevent delivery, failure of the issuer to complete various steps required to issue the bonds, and limited liquidity for the buyer to sell the escrow receipts during the when- issued period.

New Income and Short-Term Bond Funds

Industry Concentration

When the market for corporate debt securities is dominated by issues in the gas utility, gas transmission utility, electric utility, telephone utility, or petroleum industry, the funds will as a matter of fundamental policy concentrate 25% or more, but not more than 50%, of their total assets, in any one such industry, if the funds

have cash for such investment (i.e., the funds will not sell portfolio securities to raise cash) and, if in T. Rowe Price`s judgment, the return available and the marketability, quality, and availability of the debt securities of such industry justifies such concentration in light of the funds` investment objectives. Domination would exist with respect to any one such industry, when, in the preceding 30-day period, more than 25% of all new-issue corporate debt offerings (within the four highest grades of Moody`s or S&P`s and with maturities of 10 years or less) of $25,000,000 or more consisted of issues in such industry. Although the funds will normally purchase corporate debt securities in the secondary market as opposed to new offerings, T. Rowe Price believes that the new issue-based dominance standard, as defined above, is appropriate because it is easily determined and represents an accurate correlation to the secondary market. Investors should understand that concentration in any industry may result in increased risk. Investments in any of these industries may be affected by environmental conditions, energy conservation programs, fuel shortages, difficulty in obtaining adequate return on capital in financing operations and large construction programs, and the ability of the capital markets to absorb debt issues. In addition, it is possible that the public service commissions which have jurisdiction over these industries may not grant future increases in rates sufficient to offset increases in operating expenses. These industries also face numerous legislative and regulatory uncertainties at both federal and state government levels. Management believes that any risk to the funds which might result from concentration in any industry will be minimized by the funds` practice of diversifying their investments in other respects. The funds` policy with respect to industry concentration is a fundamental policy. (For investment restriction on industry concentration, see "Investment Restrictions").

Money Funds

Determination of Maturity of Money Market Securities

The funds may only purchase securities which at the time of investment have remaining maturities of 397 calendar days or less. The other funds may also purchase money market securities. In determining the maturity of money market securities, funds will follow the provisions of Rule 2a-7 under the 1940 Act .

Prime Reserve, Summit Cash Reserves, and Reserve Investment Funds

First Tier Money Market Securities Defined

At least 95% of the funds` total assets will be maintained in first tier money market securities. First tier money market securities are those which are described as First Tier Securities under Rule 2a-7 of the 1940 Act . These include any security with a remaining maturity of 397 days or less that is rated (or that has been issued by an issuer that is rated with respect to a class of short-term debt obligations, or any security within that class that is comparable in priority and security with the security) by any two nationally recognized statistical rating organizations (or if only one NRSRO has issued a rating, that NRSRO) in the highest rating category for short- term debt obligations (within which there may be sub-categories). First Tier Securities also include unrated securities comparable in quality to rated securities, as determined by T. Rowe Price pursuant to written guidelines established in accordance with Rule 2a-7 under the 1940 Act under the supervision of the funds` Boards.

PORTFOLIO MANAGEMENT PRACTICES

Swap Agreements

A number of t he fund s may enter into interest rate, index, total return, credit, and, to the extent they may invest in foreign currency-denominated securities, currency rate swap agreements. The fund s may also enter into options on swap agreements (" swap options ") on the types of swaps listed above.

Swap agreements are two - party contracts entered into primarily by institutional investors for a specified period of time. In a standard swap transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on a particular predetermined investment, index, or currency. The gross returns to be exchanged or swapped between the parties are generally calculated with respect to a notional amount, i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a basket of securities representing a particular index. A swap option is a contract that gives a counterparty the right (but not the obligation) to enter into a new swap agreement or to shorten, extend,

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cancel, or otherwise modify an existing swap agreement at some designated future time on specified terms. The fund s may write (sell) and purchase put and call swap options.

One example of the use of swaps within the fund s may be to manage the interest rate sensitivity of the fund s . The fund s might receive or pay a fixed-rate interest rate of a particular maturity and pay or receive a floating rate in order to increase or decrease the duration of the fund s . Or, the fund s may buy or sell swap options to effect the same result. The fund s may also replicate a security by selling it, placing the proceeds in cash deposits, and receiving a fixed rate in the swap market.

Another example is the use of credit default swaps to buy or sell credit protection. A default swap is a bilateral contract that enables an investor to buy or sell protection against a defined-issuer credit event. The seller of credit protection against a security or basket of securities receives an up-front or periodic payment to compensate against potential default event(s). The fund s may enhance income by selling protection or protect credit risk by buying protection. Market supply and demand factors may cause distortions between the cash securities market and the default swap market. The credit protection market is still relatively new and should be considered illiquid.

Most swap agreements entered into by the fund s would calculate the obligations of the parties to the agreement on a "net basis." Consequently, the funds ` current obligations (or rights) under a swap agreement will generally be equal only to the net amount to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the "net amount"). The funds ` current obligations under a net swap agreement will be accrued daily (offset against any amounts owed to the fund s ) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by assets determined to be liquid by T. Rowe Price.

The use of swap agreements by the fund s entails certain risks. Interest rate and currency swaps could result in losses if interest rate or currency changes are not correctly anticipated by the fund s . Total return swaps could result in losses if the reference index, security, or investments do not perform as anticipated by the fund s . Credit default swaps could result in losses if the fund s do not correctly evaluate the creditworthiness of the company on which the credit default swap is based.

The fund s will generally incur a greater degree of risk when it writes a swap option than when it purchases a swap option. When the fund s purchase a swap option it risks losing only the amount of the premium they have paid should they decide to let the option expire unexercised. However, when the fund s write a swap option they will become obligated, upon exercise of the option, according to the terms of the underlying agreement.

Because swaps are two - party contracts and because they may have terms of greater than seven days, swap agreements may be considered to be illiquid. Moreover, the fund s bear the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The fund s will enter into swap agreements only with counterparties that meet certain standards of creditworthiness. The swaps market is a relatively new market and is largely unregulated. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the funds ` ability to terminate existing swap agreements or to realize amounts to be received under such agreements.

There are, of course, other types of securities that are or may become available that are similar to the foregoing , and the funds may invest in these securities.

Lending of Portfolio Securities

Securities loans are made to broker-dealers, institutional investors, or other persons pursuant to agreements requiring that the loans be continuously secured by collateral at least equal at all times to the value of the securities lent, marked to market on a daily basis. The collateral received will consist of cash, U.S. government securities, letters of credit, or such other collateral as may be permitted under the funds ` investment program. The collateral, in turn, is invested in short-term securities. While the securities are being lent, the funds making the loan will continue to receive the equivalent of the interest or dividends paid by the issuer on the securities, as well as a portion of the interest on the investment of the collateral . Normally, the fund s employ an agent to implement their securities lending program and the agent receives a fee from the fund s for its services. The funds have a right to call each loan and obtain the securities within such period of time that coincides with the normal settlement period for purchases and sales of such securities in the respective markets. The funds will not have the right to vote on securities while they are being lent, but they may call a loan in anticipation of any

important vote , when practical . The risks in lending portfolio securities, as with other extensions of secured credit, consist of a possible default by the borrower, 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 be made only 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. Additionally, the fund s bear the risk that the reinvestment of collateral will result in a principal loss. Finally, there is also the risk that the price of the securities will increase while they are on loan and the collateral will not adequately cover their value.

Interfund Borrowing and Lending

The fund s are part ies to an exemptive order received from the SEC on December 8, 1998, amended on November 23, 1999, that permits them to borrow money from and/or lend money to other funds in the T. Rowe Price complex. All loans are set at an interest rate between the rates charged on overnight repurchase agreements and short-term bank loans. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The program is subject to the oversight and periodic review of the Boards of Price Funds.

Repurchase Agreements

The fund s may enter into a repurchase agreement through which an investor (such as the fund s ) purchase s securit ies (known as the "underlying security" ) from well-established securities dealer s or bank s that are member s of the Federal Reserve System. Any such dealer or bank will be on T. Rowe Price`s approved list . At that time, the bank or securities dealer agrees to repurchase the underlying security at the same price, plus specified interest. Repurchase agreements are generally for a short period of time, often less than a week. Repurchase agreements , which do not provide for payment within seven days , will be treated as illiquid securities. The funds will enter into repurchase agreements only where (1) the underlying securities are of the type (excluding maturity limitations) which the funds` investment guidelines would allow them to purchase directly, (2) the market value of the underlying security, including interest accrued, will be at all times equal to or exceed the value of the repurchase agreement, and (3) payment for the underlying security is made only upon physical delivery or evidence of book-entry transfer to the account of the custodian or a bank acting as agent. In the event of a bankruptcy or other default of a seller of a repurchase agreement, the funds 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 funds seek to enforce their rights thereto; (b) possible subnormal levels of income and lack of access to income during this period; and (c) expenses of enforcing their rights.

Reverse Repurchase Agreements

Although the fund s h ave no current intention of engaging in reverse repurchase agreements, th ey reserve the right to do so. Reverse repurchase agreements are ordinary repurchase agreements in which a fund is the seller of, rather than the investor in, securities and agrees to repurchase them at an agreed upon time and price. Use of a reverse repurchase agreement may be preferable to a regular sale and later repurchase of the securities because it avoids certain market risks and transaction costs. A reverse repurchase agreement may be viewed as a type of borrowing by the funds, subject to Investment Restriction (1). (See "Investment Restrictions.")

Money Market Reserves

T he fund s may invest their cash reserves primarily in one or more money market funds established for the exclusive use of the T. Rowe Price family of mutual funds and other clients of T. Rowe Price . Currently, two such money market funds are in operation : T. Rowe Price Reserve Investment Fund ( "RIF" ) and T. Rowe Price Government Reserve Investment Fund ( "GRF" ) , each a series of the T. Rowe Price Reserve Investment Funds, Inc. Additional series may be created in the future. These funds were created and operate under an e xemptive o rder issued by the S E C .

Both funds must comply with the requirements of Rule 2a-7 under the 1940 Act governing money market funds. RIF invests at least 95% of its total assets in prime money market instruments receiving the highest credit rating. GRF invests primarily in a portfolio of U.S. government-backed securities, primarily U.S. Treasuries, and repurchase agreements thereon.

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RIF and GRF provide a very efficient means of managing the cash reserves of the fund s . While neither RIF n or GRF pay s an advisory fee to T. Rowe Price , they will incur other expenses. However, RIF and GRF are expected by T. Rowe Price to operate at very low expense ratios. The fund s will only invest in RIF or GRF to the extent it is consistent with their investment objective s and program s .

Neither fund is insured or guaranteed by the FDIC or any other government agency. Although the funds seek to maintain a stable net asset value of $1.00 per share, it is possible to lose money by investing in them .

High Yield and Institutional High Yield Funds

Short Sales

The fund s may make short sales for hedging purposes to protect the m against companies whose credit is deteriorating. Short sales are transactions in which the funds sell a security they do not own in anticipation of a decline in the market value of that security. The funds` short sales would be limited to situations where the funds own a debt security of a company and would sell short the common or preferred stock or another debt security at a different level of the capital structure of the same company. No securities will be sold short if, after the effect is given to any such short sale, the total market value of all securities sold short would exceed 2% of the value of the funds` net assets.

To complete a short-sale transaction, the funds must borrow the security to make delivery to the buyer. The funds then are obligated to replace the security borrowed by purchasing it at the market price at the time of replacement. The price at such time may be more or less than the price at which the security was sold by the fund. Until the security is replaced, the funds are required to pay to the lender amounts equal to any dividends or interest which accrue during the period of the loan. To borrow the security, the funds also may be required to pay a premium, which would increase the cost of the security sold. The proceeds of the short sale will be retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed out.

Until the funds replace a borrowed security in connection with a short sale, the funds will: (a) maintain daily a segregated account, containing cash, U.S. government securities, or other suitable cover as permitted by the SEC, at such a level that (i) the amount deposited in the account plus the amount deposited with the broker as collateral will equal the current value of the security sold short and (ii) the amount deposited in the segregated account plus the amount deposited with the broker as collateral will not be less than the market value of the security at the time it was sold short; or (b) otherwise cover its short position.

The funds will incur a loss as a result of the short sale if the price of the security sold short increases between the date of the short sale and the date on which the funds replace the borrowed security. The funds will realize a gain if the security sold short declines in price between those dates. This result is the opposite of what one would expect from a cash purchase of a long position in a security. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of any premium, dividends, or interest the funds may be required to pay in connection with a short sale. Any gain or loss on the security sold short would be separate from a gain or loss on the funds` security being hedged by the short sale.

The Taxpayer Relief Act of 1997 requires a mutual fund to recognize gain upon entering into a constructive sale of stock, a partnership interest, or certain debt positions occurring after June 8, 1997. A constructive sale is deemed to occur if the funds enter into a short sale, an offsetting notional principal contract, or a futures or forward contract which is substantially identical to the appreciated position. Some of the transactions in which the funds are permitted to invest may cause certain appreciated positions in securities held by the funds to qualify as a "constructive sale," in which case it would be treated as sold and the resulting gain subjected to tax or, in the case of a mutual fund, distributed to shareholders. If this were to occur, the funds would be required to distribute such gains even though it would receive no cash until the later sale of the security. Such distributions could reduce the amount of cash available for investment by the funds. Because these rules do not apply to "straight" debt transactions, it is not anticipated that they will have a significant impact on the funds; however, the effect cannot be determined until the issuance of clarifying regulations.

All funds

Warrants

Warrants can be highly volatile and have no voting rights, pay no dividends, and have no rights with respect to the assets of the corporation issuing them. Warrants basically are options to purchase securities at a specific price valid for a specific period of time. They do not represent ownership of the securities, but only the right to buy them. Warrants differ from call options in that warrants are issued by the issuer of the security which may be purchased on their exercise, whereas call options may be written or issued by anyone. The prices of warrants do not necessarily move parallel to the prices of the underlying securities.

There are, of course, other types of securities that are or may become available that are similar to the foregoing , and the fund s may invest in these securities.

Options

Options are a type of potentially high-risk derivative. The fund s have no current intention of investing in options on securities, although they reserve the right to do so. Appropriate disclosure would be added to each funds ` prospectus and this Statement of Additional Information when and if the fund s decide to invest in options.

Writing Covered Call Options

The fund s may write (sell) American or European style "covered" call options and purchase options to close out options previously written . In writing covered call options, the fund s expect to generate additional premium income , which should serve to enhance the funds` 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 funds.

A call option gives the holder (buyer) the right to purchase, and the writer (seller) has the obligation to sell, a security or currency at a specified price (the exercise price) at expiration of the option (European style) or at any time until a certain date (the expiration date) (American style). So long as the obligation of the writer of a call option continues, he may be assigned an exercise notice by the broker-dealer through whom such option was sold, requiring him to deliver the underlying security or currency against payment of the exercise price. This obligation terminates upon the expiration of the call option or such earlier time at which the writer effects a closing purchase transaction by repurchasing an option identical to that previously sold. To secure his obligation to deliver the underlying security or currency in the case of a call option, a writer is required to deposit in escrow the underlying security or currency or other assets in accordance with the rules of a clearing corporation.

The fund s generally will write only covered call options. This means that the fund s will either own the security or currency subject to the option or an option to purchase the same underlying security or currency having an exercise price equal to or less than the exercise price of the "covered" option. From time to time, the fund s will write a call option that is not covered as indicated above but where the fund s will establish and maintain , with its custodian for the term of the option, an account consisting of cash, U.S. government securities, other liquid high-grade debt obligations, or other suitable cover as permitted by the SEC , having a value equal to the fluctuating market value of the optioned securities or currencies. While such an option would be "covered" with sufficient collateral to satisfy SEC prohibitions on issuing senior securities, this type of strategy would expose the funds to the risks of writing uncovered options.

Portfolio securities or currencies on which call options may be written will be purchased solely on the basis of investment considerations consistent with the funds` investment objectives. 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 funds generally will not do) but capable of enhancing the funds` total return. When writing a covered call option, the funds, in return for the premium, give up the opportunity for profit from a price increase in the underlying security or currency above the exercise price, but conversely retain the risk of loss should the price of the security or currency decline. Unlike one that owns securities or currencies not subject to an option, the funds have no control over when they may be required to sell the underlying securities or currencies, since they may be assigned an exercise notice at any time prior to the expiration of its obligation as a writer. If a call option the funds have written expires, the funds will realize a gain in the amount

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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 funds will realize a gain or loss from the sale of the underlying security or currency. The funds do not consider a security or currency covered by a call to be "pledged" as that term is used in the funds` policy , which limits the pledging or mortgaging of assets. If the fund writes an uncovered option as described above, it will bear the risk of having to purchase the security subject to the option at a price higher than the exercise price of the option. As the price of a security could appreciate substantially, the funds` loss could be significant.

The premium received is the market value of an option. The premium the funds 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 funds for writing covered call options will be recorded as a liability of the fund s. This liability will be adjusted daily to the option`s current market value, which will be the latest sale price on its primary exchange at the time at which the net asset values per share of the funds are computed (close of the New York Stock Exchange) or, in the absence of such sale, the mean of closing bid and ask prices. 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 funds to write another call option on the underlying security or currency with either a different exercise price or expiration date or both. If the funds desire to sell a particular security or currency from their portfolios on which they have written a call option, or purchased a put option, they 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 funds will be able to effect such closing transactions at favorable prices. If the funds cannot enter into such a transaction, they may be required to hold a security or currency that they might otherwise have sold. When the funds write a covered call option, they run 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 funds 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 funds 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 funds 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 their portfolios. In such cases, additional costs may be incurred.

The funds 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 funds.

The funds will not write a covered call option if, as a result, the aggregate market value of all portfolio securities or currencies covering written call or put options exceeds 25% of the market value of the funds` total assets. In calculating the 25% limit, the funds will offset the value of securities underlying purchased calls and puts on identical securities or currencies with identical maturity dates.

Writing Covered Put Options

The funds may write American or European style covered put options and purchase options to close out options previously written by the funds. A put option gives the purchaser of the option the right to sell, and the writer (seller) has the obligation to buy, the underlying security or currency at the exercise price during the option

period (American style) or at the expiration of the option (European style). So long as the obligation of the writer continues, he may be assigned an exercise notice by the broker-dealer through whom such option was sold, requiring him to make payment to the exercise price against delivery of the underlying security or currency. The operation of put options in other respects, including their related risks and rewards, is substantially identical to that of call options.

The funds would write put options only on a covered basis . This means that the funds would maintain , in a segregated account , cash, U.S. government securities, other liquid high-grade debt obligations, or other suitable cover as determined by the SEC, in an amount not less than the exercise price . Alternatively, the funds 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 funds would generally write covered put options in circumstances where T. Rowe Price wishes to purchase the underlying security or currency for the funds` portfolios at a price lower than the current market price of the security or currency. In such event the funds 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 funds 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 funds. In addition, the funds, because they do not own the specific securities or currencies which they may be required to purchase in exercise of the put, cannot benefit from appreciation, if any, with respect to such specific securities or currencies.

The funds 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 funds` total assets. In calculating the 25% limit, the funds will offset the value of securities underlying purchased puts and calls on identical securities or currencies with identical maturity dates.

The premium received by the fund s for writing covered put options will be recorded as a liability of the fund s . This liability will be adjusted daily to the option`s current market value, which will be the latest sale price on its primary exchange at the time at which the net asset value per share of the fund s is computed (close of the New York Stock Exchange), or, in the absence of such sale, the me an of the closing bid and ask prices.

Purchasing Put Options

The funds may purchase American or European style put options. As the holder of a put option, the funds have 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 funds may enter into closing sale transactions with respect to such options, exercise them, or permit them to expire. The funds may purchase put options for defensive purposes in order to protect against an anticipated decline in the value of their securities or currencies. An example of such use of put options is provided next.

The funds may purchase a put option on an underlying security or currency (a "protective put" ) owned by the funds 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 funds, as holder of the put option, are 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 funds may also purchase put options at a time when they do not own the underlying security or currency. By purchasing put options on a security or currency they do not own, the funds seek 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

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price during the life of the put option, the funds will lose their entire investment in the put option. In order for the purchase of a put option to be profitable, the market price of the underlying security or currency must decline sufficiently below the exercise price to cover the premium and transaction costs, unless the put option is sold in a closing sale transaction.

The funds will not commit more than 5% of total assets to premiums when purchasing put options. The premium paid by the funds when purchasing a put option will be recorded as an asset of the funds in the portfolio of investments. This asset will be adjusted daily to the option`s current market value, which will be the latest sale price on its primary exchange at the time at which the net asset values per share of the funds are computed (close of New York Stock Exchange) or, in the absence of such sale, the mean of closing bid and ask prices. 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 funds may purchase American or European style call options. As the holder of a call option, the funds have 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 funds may enter into closing sale transactions with respect to such options, exercise them, or permit them to expire. The funds may purchase call options for the purpose of increasing its current return or avoiding tax consequences which could reduce their current return. The funds may also purchase call options in order to acquire the underlying securities or currencies. Examples of such uses of call options are provided next.

Call options may be purchased by the funds for the purpose of acquiring the underlying securities or currencies for their portfolios. Utilized in this fashion, the purchase of call options enables the funds 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 funds in purchasing a large block of securities or currencies that would be more difficult to acquire by direct market purchases. So long as the funds hold such a call option , rather than the underlying security or currency itself, the funds are partially protected from any unexpected decline in the market price of the underlying security or currency and in such event could allow the call option to expire, incurring a loss only to the extent of the premium paid for the option.

The funds may also purchase call options on underlying securities or currencies they own in order to protect unrealized gains on call options previously written by them. 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.

The fund s will not commit more than 5% of total assets to premiums when purchasing call and put options. The premium paid by the fund s when purchasing a call option will be recorded as an asset of the fund s in the portfolio of investments . This asset will be adjusted daily to the option`s current market value, which will be the latest sale price on its primary exchange at the time at which the net asset value s per share of the fund s are computed (close of New York Stock Exchange), or, in the absence of such sale, the mean of closing bid and ask prices.

Dealer (Over-the-Counter) Options

The funds may engage in transactions involving dealer options. Certain risks are specific to dealer options. While the funds would look to a clearing corporation to exercise exchange-traded options, if the funds were to purchase a dealer option, they would rely on the dealer from whom they 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 funds 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 funds will generally be able to realize the value of a dealer option they have purchased only by exercising it or reselling it to the dealer who issued it. Similarly, when the funds write a dealer option, they 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 funds originally wrote the option. While the funds will seek to enter into dealer options only with dealers who will agree to and are expected to be capable of entering into closing transactions with the funds, there can be no assurance that the funds will be able to liquidate a dealer option at

a favorable price at any time prior to expiration. Until the funds, as a covered dealer call option writer, are able to effect a closing purchase transaction, they 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 c ounter - party, the funds may be unable to liquidate a dealer option. With respect to options written by the funds, the inability to enter into a closing transaction may result in material losses to the funds. For example, since the funds must maintain a secured position with respect to any call option on a security they write, the funds may not sell the assets they have segregated to secure the position while they are 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 funds may treat the cover used for written Over-the-Counter ( "OTC" ) options as liquid if the dealer agrees that the funds may repurchase the OTC option they have 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.

Interest Rate Transactions

I nterest rate transactions , such as interest rate swaps and the purchase or sale of interest rate caps and floors , may be used to preserve a return or spread on a particular investment or portion of a portfolio, to create synthetic securities, or to structure transactions designed for other purposes.

Interest rate swaps involve the exchange b y the fund s with third parties of their respective commitments to pay or receive interest, e.g., an exchange of floating-rate payments for fixed-rate payments. The purchase of an interest rate cap entitles the purchaser, to the extent that a specified index exceeds a predetermined interest rate, to receive payments of interest on a contractually based principal amount from the party selling the interest rate cap. The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls below a predetermined interest rate, to receive payments of interest on a contractually based principal amount from the party selling the interest rate floor. In circumstances in which T. Rowe Price anticipates that interest rates will decline, the funds might, for example, enter into an interest rate swap as the floating rate payor. In the case where the fund s purchase such an interest rate swap, if the floating rate payments fell below the level of the fixed-rate payment set in the swap agreement, the fund s` counterparties would pay the funds` amounts equal to interest computed at the difference between the fixed and floating rates over the national principal amount. Such payments would offset or partially offset the decrease in the payments the fund s would receive in respect of floating-rate assets being hedged. In the case of purchasing an interest rate floor, if interest rates declined below the floor rate, the fund s would receive payments from the counterparties which would wholly or partially offset the decrease in the payments they would receive in respect of the financial instruments being hedged.

The fund s will usually enter into interest rate swaps on a net basis, i.e., the two payment streams are netted out, with the fund s receiving or paying, as the case may be, only the net amount of the two payments. The net amount of the excess, if any, of the funds` obligations over its entitlements with respect to each interest rate swap will be accrued on a daily basis and an amount of cash or high-quality liquid securities having an aggregate net asset value at least equal to the accrued excess will be maintained in an account by the funds` custodian. If the fund s enter into an interest rate swap on other than a net basis, the fund s would maintain an account in the full amount accrued on a daily basis of the funds` obligations with respect to the swap. To the extent the funds sell (i.e., write) caps and floors, they will maintain in an account cash or high-quality liquid debt securities having an aggregate net asset value at least equal to the full amount, accrued on a daily basis, of the funds` obligations with respect to any caps or floors. The funds will not enter into any interest rate swap, cap , or floor transaction unless the unsecured senior debt or the claims - paying ability of the counterparty thereto is rated at least A by S&P. T. Rowe Price will monitor the creditworthiness of counterparties on an ongoing basis. If there is a default by the other parties to such a transaction, the funds will have contractual remedies pursuant to the agreements related to the transaction.

The swap market has grown substantially in recent years with a large number of banks and investment banking firms acting both as principals and as agents utilizing standardized swap documentation. T. Rowe Price has determined that, as a result, the swap market has become relative ly liquid. The fund s may enter into interest rate swaps only with respect to positions held in their portfolios. Interest rate swaps do not involve the delivery of securities or other underlying assets or principal. Accordingly, the risk of loss with respect to interest rate

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swaps is limited to the net amount of interest payments that the fund s are contractually obligated to make. If the other parties to interest rate swaps default, the funds` risk of loss consists of the net amount of interest payments that the fund s are contractually entitled to receive. Since interest rate swaps are individually negotiated, the fund s expect to achieve an acceptable degree of correlation between their right to receive interest on loan interests and their right and obligation to receive and pay interest pursuant to interest rate swaps.

The aggregate purchase price of caps and floor s held by the funds may not exceed 10% of total assets. The fund s may sell (i.e., write) caps and floors without limitation, subject to the account coverage requirement described above.

Spread Option Transactions

The funds may purchase from and sell to securities dealers covered spread options. Such covered spread options are not presently exchange listed or traded. The purchase of a spread option gives the funds the right to put, or sell, a security that they own at a fixed-dollar spread or fixed-yield spread in relationship to another security that the funds do not own, but which is used as a benchmark. The risk to the funds in purchasing covered spread options is the cost of the premium paid for the spread options and any transaction costs. In addition, there is no assurance that closing transactions will be available. The purchase of spread options will be used to protect the funds against adverse changes in prevailing credit-quality spreads, i.e., the yield spread between high-quality and lower-quality securities. Such protection is only provided during the life of the spread option. The security covering the spread option will be maintained in a segregated account by the funds` custodian. The funds do not consider a security covered by a spread option to be "pledged" as that term is used in the funds` policy limiting the pledging or mortgaging of their assets. The funds may also buy and sell uncovered spread options. Such options would be used for the same purposes and be subject to similar risks as covered spread options. However, in an uncovered spread option, the funds would not own either of the securities involved in the spread.

Futures Contracts

Futures contracts are a type of potentially high-risk derivative.

Transactions in Futures

The fund s may enter into futures contracts including stock index, interest rate, and currency futures ( "futures" or "futures contracts" ).

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 funds. I nterest rate or currency futures can be sold as an offset against the effect of expected increases in interest rates or currency exchange rates and purchase d as an offset against the effect of expected declines in interest rates or currency exchange rates.

Futures can also be used as an efficient means of regulating the funds` exposure to the market .

Index Funds may only enter into futures contracts that are appropriate for their investment programs to provide an efficient means of maintaining liquidity while being invested in the market, to facilitate trading, or to reduce transaction costs. They will not use futures for hedging purposes. Otherwise the nature of such futures and the regulatory limitations and risks to which they are subject are the same as those described below.

Stock index futures contracts may be used to provide a hedge for a portion of the funds ` portfolio s , as a cash management tool, or as an efficient way to implement either an increase or decrease in portfolio market exposure in response to changing market conditions. The funds may purchase or sell futures contracts with respect to any stock index. Nevertheless, to hedge the funds ` portfolio s successfully, the fund s must sell futures contracts with respect to indices or subindices whose movements will have a significant correlation with movements in the prices of the funds ` portfolio securities.

The fund s will enter into futures contracts that are traded on national (or foreign) futures exchanges and are standardized as to maturity date and underlying financial instrument. A public market exists in futures contracts covering various taxable fixed - income securities as well as municipal bonds. Futures exchanges and trading in the United States are regulated under the Commodity Exchange Act by the C F T C . 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 funds` objectives in these areas.

Regulatory Limitations

If the funds purchase or sell futures contracts or related options which do not qualify as bona fide hedging under applicable CFTC rules, the aggregate initial margin deposits and premium required to establish those positions cannot exceed 5% of the liquidation value of the funds after taking into account unrealized profits and unrealized losses on any such contracts they have 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 Boards without a shareholder vote and does not limit the percentage of the funds` assets at risk to 5%.

In instances involving the purchase of futures contracts or the writing of call or put options thereon by the funds, an amount of cash, liquid assets, or other suitable cover as permitted by the SEC, equal to the market value of the futures contracts and options thereon (less any related margin deposits), will be identified by the funds to cover the position, or alternative cover (such as owning an offsetting position) will be employed. Assets used as cover or held in an identified account cannot be sold while the position in the corresponding option or future is open, unless they are replaced with similar assets. As a result, the commitment of a large portion of the funds` assets to cover or identified accounts could impede portfolio management or the funds` ability to meet redemption requests or other current obligations.

If the CFTC or other regulatory authorities adopt different (including less stringent) or additional restrictions, the funds 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 funds purchase or sell a security, no price would be paid or received by the funds upon the purchase or sale of a futures contract. Upon entering into a futures contract, and to maintain the funds` open positions in futures contracts, the funds would be required to deposit with their custodian in a segregated account in the name of the futures broker an amount of cash or liquid assets known as "initial margin." The margin required for a particular futures contract is set by the exchange on which the contract is traded and may be significantly modified from time to time by the exchange during the term of the contract. Futures contracts are customarily purchased and sold on margins that may range upward from less than 5% of the value of the contract being traded.

Financial futures are valued daily at closing settlement prices. 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 a payment by the fund s ( "variation margin" ) to restore the margin account to the amount of the initial margin.

S ubsequent payments ( "mark-to-market payments" ) to and from the futures broker are made on a daily basis as the price of the underlying assets fluctuates, making the long and short positions in the futures contract more or less valuable . If the value of the open futures position increases in the case of a sale or decreases in the case of a purchase, the fund s will pay the amount of the daily change in value to the broker. However, if the value of the open futures position decreases in the case of a sale or increases in the case of a purchase, the broker will pay the amount of the daily change in value to the fund s .

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 funds realize a gain; if it is more, the funds realize a loss. Conversely, if the offsetting sale price is more than the original purchase price, the funds realize a gain; if it is less, the funds realize a loss. The transaction costs must also be included in these

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calculations. There can be no assurance, however, that the funds will be able to enter into an offsetting transaction with respect to a particular futures contract at a particular time. If the funds are not able to enter into an offsetting transaction, the funds will continue to be required to maintain the margin deposits on the futures contract.

As an example of an offsetting transaction in which the underlying instrument is not delivered, the contractual obligations arising from the sale of one contract of September Treasury bills on an exchange may be fulfilled at any time before delivery of the contract is required (i.e., on a specified date in September, the "delivery month" ) by the purchase of one contract of September Treasury bills on the same exchange. In such instance, the difference between the price at which the futures contract was sold and the price paid for the offsetting purchase, after allowance for transaction costs, represents the profit or loss to the funds.

Settlement of a stock index futures contract may or may not be in the underlying security. If not in the underlying security, then settlement will be made in cash, equivalent over time to the difference between the contract price and the actual price of the underlying asset (as adjusted by a multiplier) at the time the stock index futures contract expires.

For example, the S&P 500 Stock Index is made up 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 futures contracts on the S&P 500 Index, the contracts are to buy or sell 250 units. Thus, if the value of the S&P 500 Index were $150, one contract would be worth $37,500 (250 units x $150). The stock index futures contract specifies that no delivery of the actual stocks 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 funds 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 funds enter into a futures contract to buy 250 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 funds will gain $1,000 (250 units x gain of $4). If the funds enter into a futures contract to sell 250 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 funds will lose $500 (250 units x loss of $2).

Summit Municipal Intermediate and Summit Municipal Income Funds

It is possible that hedging activities of funds investing in municipal securities will occur primarily through the use of municipal bond index futures contracts since the uniqueness of that index contract should better correlate with the portfolio and thereby be more effective. However, there may be times when it is deemed in the best interest of shareholders to engage in the use of U.S. Treasury bond futures, and the funds reserve the right to use U.S. Treasury bond futures at any time. Use of these futures could occur, as an example, when both the U.S. Treasury bond contract and municipal bond index futures contract are correlating well with municipal bond prices, but the U.S. Treasury bond contract is trading at a more advantageous price making the hedge less expensive with the U.S. Treasury bond contract than would be obtained with the municipal bond index futures contract.

All f unds (other than the Money Funds)

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 U.S. 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.

Margin deposits required on futures trading are low. As a result, a relatively small price movement in a futures contract may result in immediate and substantial loss, as well as gain, to the investor. For example, if at the time of purchase, 10% of the value of the futures contract is deposited as margin, a subsequent 10% decrease in the value of the futures contract would result in a total loss of the margin deposit, before any deduction for the transaction costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150% of the original margin deposit, if the contract were closed out. Thus, a purchase or sale of a futures contract may result in losses in excess of the amount invested in the futures contract.

Liquidity The funds may elect to close some or all of their futures positions at any time prior to their expiration. The funds would do so to reduce exposure represented by long futures positions or short futures positions. The funds may close their position by taking opposite positions , which would operate to terminate the funds` position in the futures contracts. Final determinations of mark-to-market payments would then be made, additional cash would be required to be paid by or released to the funds, and the funds 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 funds intend 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 funds would continue to be required to make daily mark-to-market and variation margin payments . However, in the event futures contracts have been used to hedge the underlying instruments, the funds would continue to hold the underlying instruments subject to the hedge until the futures contracts could be terminated. In such circumstances, an increase in the price of underlying instruments, if any, might partially or completely offset losses on the futures contract. However, as described next, there is no guarantee that the price of the underlying instruments will, in fact, correlate with the price movements in the futures contract and thus provide an offset to losses on a futures contract.

Hedging Risk A decision 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 or economic events. There are several risks in connection with the use by the funds 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 funds` underlying instruments sought to be hedged.

Successful use of futures contracts by the funds 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 funds have sold futures to hedge their portfolios 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 funds` portfolios might decline. If this were to occur, the funds would lose money on the futures and also would experience a decline in value in their underlying instruments. However, while this might occur to a certain degree, T. Rowe Price believes that over time the value of the funds` portfolios will tend to move in the same direction as the market indices used to hedge the portfolio. It is also possible that, if the funds were to hedge against the possibility of a decline in the market (adversely affecting the underlying instruments held in their portfolios) and prices instead increased, the funds would lose part or all of the benefit of increased value of those underlying instruments that it ha d hedged because it would have offsetting losses in their futures positions. In addition, in such situations, if the funds have insufficient cash, it might have to sell underlying instruments to meet daily mark-to-market and 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 funds 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

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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. Increased participation by speculators in the futures market might also cause temporary price distortions. Due to the possibility of price distortion in the futures market and also because of imperfect correlation between price movements in the underlying instruments and movements in the prices of futures contracts, even a correct forecast of general market trends by T. Rowe Price might not result in a successful hedging transaction over a very short time period.

Options on Futures Contracts

Options (another type of potentially high-risk derivative) on futures are similar to options on underlying instruments, except that options on futures give the purchaser the right, in return for the premium paid, to assume a position in a futures contract (a long position if the option is a call and a short position if the option is a put), rather than to purchase or sell the futures contract at a specified exercise price at any time during the period of the option. Upon exercise of the option, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by the delivery of the accumulated balance in the writer`s futures margin account, which represents the amount by which the market price of the futures contract, at exercise, exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the futures contract. Purchasers of options who fail to exercise their options prior to the exercise date suffer a loss of the premium paid. Options on futures contracts are valued daily at the last sale price on its primary exchange at the time at which the net asset value per share of the fund s are computed (close of New York Stock Exchange), or, in the absence of such sale, the mean of closing bid and ask prices.

Writing a put option on a futures contract serves as a partial hedge against an increase in the value of securities the funds intend to acquire. If the futures price at expiration of the option is above the exercise price, the funds will retain the full amount of the option premium , which provides a partial hedge against any increase that may have occurred in the price of the debt securities the funds intend to acquire. If the futures price when the option is exercised is below the exercise price, however, the funds will incur a loss, which may be wholly or partially offset by the decrease in the price of the securities the funds intend to acquire.

Funds investing in municipal securities may trade in municipal bond index option futures or similar options on futures developed in the future. In addition, the funds may trade in options on futures contracts on U.S. government securities and any U.S. government securities futures index contract which might be developed.

From time to time , a single order to purchase or sell futures contracts (or options thereon) may be made on behalf of a fund and other T. Rowe Price fund s. Such aggregated orders would be allocated among the fund and the other T. Rowe Price fund s in a fair and non discriminatory manner.

Call and put options may be purchased or written on financial indices as an alternative to options on futures.

Special Risks of Transactions in Options on Futures Contracts

The risks described under "Special Risks of Transactions i n Futures Contracts" are substantially the same as the risks of using options on futures. If the funds were to write an option on a futures contract, it would be required to deposit initial margin and maintain mark-to-market payments in the same manner as a regular futures contract. In addition, where the funds seek 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, their ability to establish and close out positions on such options will be subject to the maintenance of a liquid secondary market. Reasons for the absence of a liquid secondary market on an exchange include the following: (1) there may be insufficient trading interest in certain options; (2) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (3) trading halts, suspensions, or other restrictions may be imposed with respect to particular classes or series of options, or underlying instruments; (4) unusual or unforeseen circumstances may interrupt normal operations on an exchange; (5) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume; or (6) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or in the class or series of options) would cease to exist, although outstanding options on the exchange that had been issued by a clearing corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms. There is no assurance that higher -

than - anticipated trading activity or other unforeseen events might not, at times, render certain of the facilities of any 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.

In the event no such market exists for a particular contract in which the funds maintain a position, in the case of a written option, the funds would have to wait to sell the underlying securities or futures positions until the option expires or is exercised. The funds would be required to maintain margin deposits on payments until the contract is closed. Options on futures are treated for accounting purposes in the same way as the analogous option on securities are treated.

In addition, the correlation between movements in the price of options on futures contracts and movements in the price of the securities hedged can only be approximate. This risk is significantly increased when an option on a U.S. government securities future or an option on some type of index future is used as a proxy for hedg ing a portfolio consisting of other types of securities . Another risk is that if the movements in the price of options on futures contract s and the value of the call increase by more than the increase in the value of the securities held as cover, the funds may realize a loss on the call , which is not completely offset by the appreciation in the price of the securities held as cover and the premium received for writing the call.

The successful use of options on futures contracts requires special expertise and techniques different from those involved in portfolio securities transactions. A decision 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 or interest rate trends. During periods when municipal securities market prices are appreciating, the funds may experience poorer overall performance than if it had not entered into any options on futures contracts.

General Considerations Transactions by the funds in options on futures will be subject to limitations established by each of the exchanges, boards of trade , or other trading facilities governing the maximum number of options in each class which may be written or purchased by a single investor or group of investors acting in concert, regardless of whether the options are written on the same or different exchanges, boards of trade , or other trading facilities or are held or written in one or more accounts or through one or more brokers. Thus, the number of contracts which the funds may write or purchase may be affected by contracts written or purchased by other investment advisory clients of T. Rowe Price. An exchange, board s of trade , or other trading facility may order the liquidations of positions found to be in excess of these limits, and it may impose certain other sanctions.

Additional Futures and Options Contracts

Although the fund s ha ve 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 funds trade foreign futures or foreign options contracts, it may not be afforded certain of the protective measures provided by the Commodity Exchange Act, the CFTC`s regulations , and the rules of the National Futures Association and any domestic exchange, including the right to use reparations proceedings before the CFTC and arbitration proceedings provided by the National Futures Association or any domestic futures exchange. In particular, funds received from the funds for foreign futures or foreign options transactions may not be provided the same protections as funds received for transactions on U.S. 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 funds` orders are placed and the time they are liquidated, offset , or exercised.

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U.S. Treasury Intermediate and U.S. Treasury Long-Term Funds

Limitations on Futures and Options

The funds will not purchase a futures contract or option thereon if, with respect to positions in futures or options on futures which do not represent bona fide hedging, the aggregate initial margin and premiums on such positions would exceed 5% of the funds` net asset value. In addition, neither of the funds will enter into a futures transaction if it would be obligated to purchase or deliver amounts that would exceed 15% of the funds` total assets .

The funds will not write a covered call option if, as a result, the aggregate market value of all portfolio securities covering call options or subject to delivery under put options exceeds 15% of the market value of the funds` total assets.

The funds will not write a covered put option if, as a result, the aggregate market value of all portfolio securities subject to such put options or covering call options exceeds 15% of the market value of the funds` total assets.

The funds have no current intention of investing in options on securities. However, they reserve the right to do so in the future and could be subject to the following limitations: the funds may invest up to 15% of total assets in premiums on put options and 15% of total assets in premiums on call options. The total amount of the funds` total assets invested in futures and options will not exceed 15% of the funds` total assets.

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 funds may enter into forward contracts for a variety of purposes in connection with the management of the foreign securities portion of their portfolios. The funds` use of such contracts would include, but not be limited to, the following:

First, when the funds enter into a contract for the purchase or sale of a security denominated in a foreign currency, they 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 funds will be able to protect themselves 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 funds` portfolio securities denominated in such foreign currency. Alternatively, where appropriate, the funds may hedge all or part of their 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 funds 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 funds. The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible since the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date the forward contract is entered into and the date it matures. The projection of short-term currency market movement is extremely difficult, and the successful execution of a short-term hedging strategy is highly uncertain. Under normal circumstances, consideration of the prospect for relative currency values 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 interest s of the funds will be served.

Third, the funds may use forward contracts when the funds wish to hedge out of the dollar into a foreign currency in order to create a synthetic bond or money market instrument — the security would be issued in U.S. dollars but the dollar component would be transformed into a foreign currency through a forward contract.

The funds may enter into forward cont r acts for any other purpose consistent with the funds` investment objectives and programs. However, the funds will not enter into a forward contract, or maintain exposure to any such contract(s), if the amount of foreign currency required to be delivered thereunder would exceed the funds` holdings of liquid, high-grade debt securities, currency available for cover of the forward contract(s), or other suitable cover as permitted by the SEC. In determining the amount to be delivered under a contract, the funds may net offsetting positions.

At the maturity of a forward contract, the funds may sell the portfolio security and make delivery of the foreign currency, or they may retain the security and either extend the maturity of the forward contract (by "rolling" that contract forward) or may initiate a new forward contract.

If the funds retain the portfolio security and engage in an offsetting transaction, the funds will incur a gain or a loss (as described below) to the extent that there has been movement in forward contract prices. If the funds engage in an offsetting transaction, they may subsequently enter into a new forward contract to sell the foreign currency. Should forward prices decline during the period between the funds` entering into a forward contract for the sale of a foreign currency and the date they enter into an offsetting contract for the purchase of the foreign currency, the funds will realize a gain to the extent the price of the currency they have agreed to sell exceeds the price of the currency they have agreed to purchase. Should forward prices increase, the funds will suffer a loss to the extent the price of the currency they have agreed to purchase exceeds the price of the currency they have agreed to sell.

The funds` dealing in forward foreign currency exchange contracts will generally be limited to the transactions described above. However, the funds reserve the right to enter into forward foreign currency contracts for different purposes and under different circumstances. Of course, the funds are not required to enter into forward contracts with regard to their 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 funds value their assets daily in terms of U.S. dollars, they do not intend to convert their holdings of foreign currencies into U.S. dollars on a daily basis. They will do so from time to time, and there are costs associated with currency conversion. Although foreign exchange dealers do not charge a fee for conversion, they do realize a profit based on the difference between the prices at which they are buying and selling various currencies. Thus, a dealer may offer to sell a foreign currency to the funds at one rate, while offering a lesser rate of exchange should the funds desire to resell that currency to the dealer.

Federal Tax Treatment of Options, Futures Contracts, and Forward Foreign Exchange Contracts

The fund s may enter into certain options, futures, forward foreign exchange contracts, and swaps, including options and futures on currencies . The entering into of such transactions can affect the timing and character of the income and gains realized by the funds and the timing and character of fund distributions .

Such contracts which qualify as Section 1256 contracts will be considered to have been closed at the end of the funds` fiscal years and any gains or losses will be recognized for tax purposes at that time. Such gains or losses from the normal closing or settlement of such transactions will be characterized as 60% long-term capital gain (taxable at a maximum rate of 15%) or loss and 40% short-term capital gain or loss regardless of the holding period of the instrument (ordinary income or loss for foreign exchange contracts). The funds 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.

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Certain options, futures, forward foreign exchange contracts, and swaps, which offset another security in the fund, including options, futures and forward exchange contracts on currencies, which offset a foreign dollar- denominated bond or currency position, may be considered straddles for tax purposes . Generally, a loss on any position in a straddle will be subject to deferral to the extent of unrealized gain in an offsetting position. For

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securities which were held for one year or less at inception of the straddle, the holding period may be deemed not to begin until the straddle is terminated. If securities comprising a straddle have been held for more than one year at inception of the straddle, losses on offsetting positions may be treated as entirely long term even if the offsetting positions have been held for less than one year. However, a fund may choose to comply with the identification requirements for offsetting positions that are components of a straddle. Losses with respect to identified positions are not deferred, rather the basis of the identified position that offset the loss position is increased.

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In order for the funds to continue to qualify for federal income tax treatment as regulated investment companies, at least 90% of their gross income for a taxable year must be derived from qualifying income, i.e., dividends, interest, income derived from loans of securities, and gains from the sale of securities or currencies. Tax regulations could be issued limiting the extent to which the net gain realized from options, futures, or forward foreign exchange contracts on currencies is qualifying income for purposes of the 90% requirement.

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Entering into certain options, futures , forward foreign exchange contracts , or swaps may result in a "constructive sale" of offsetting stocks or debt securities of the funds. In such case the funds will be required to realize gain, but not loss, on the sale of such positions as if the position were sold on that date.

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For certain options, futures, forward foreign exchange contracts, or swaps, the IRS has not issued comprehensive rules relating to the timing and character of income and gains realized on such contracts. Although not anticipated, it is possible that final rules could result in changes to the amounts recorded by the funds, potentially resulting in tax consequences to the funds.

SPECIAL CONSIDERATIONS (spectrum and retirement funds)

Prospective investors should consider that certain underlying Price funds may engage in the following:

Foreign Currency Transactions Enter into foreign currency transactions. Since investments in foreign companies will usually involve currencies of foreign countries, and the international funds, as well as certain other underlying Price funds, will hold funds in bank deposits in foreign custodians during the completion of investment programs, the value of the assets of the underlying Price funds as measured in U.S. dollars may be affected favorably or unfavorably by changes in foreign currency exchange rates and exchange control regulations, and these underlying Price funds may incur costs in connection with conversions between various currencies. The underlying Price funds will generally conduct their foreign currency exchange transactions either on a spot (i.e., cash) basis at the prevailing rate in the foreign currency exchange market, or through entering into forward contracts to purchase or sell foreign currencies. The underlying Price funds will generally not enter into a forward contract with a term of greater than one year. Although foreign currency transactions will be used primarily to protect the underlying Price funds from adverse currency movements, they also involve the risk that anticipated currency movements will not be accurately predicted.

Lending Portfolio Securities Lend portfolio securities for the purpose of realizing additional income. The underlying Price funds may lend securities to broker-dealers or institutional investors. Any such loan will be continuously secured by collateral at least equal to the value of the security loaned. Such lending could result in delays in receiving additional collateral or in the recovery of the securities or possible loss of rights in the collateral should the borrower fail financially.

Futures Contracts and Options (types of potentially high-risk derivatives) Enter into interest rate, stock index, or currency futures contracts. Certain underlying Price funds may enter into such contracts (or options thereon), or a combination of such contracts, (1) as a hedge against changes in prevailing levels of interest rates, price movements, or currency exchange rates in the underlying Price funds` portfolios in order to establish more definitely the effective return on securities or currencies held or intended to be acquired by such underlying Price funds; (2) as an efficient means of adjusting the underlying Price funds` exposure to the markets; or (3) to adjust the duration of the underlying Price funds` portfolios. Initial margin deposits and premiums on options used for non-hedging purposes will not equal more than 5% of each underlying Price fund`s net asset value. Certain underlying Price funds may also purchase and sell call and put options on securities, currencies, and financial and stock indices. The aggregate market value of each fund`s currencies or portfolio securities covering call or put options will not exceed 25% of the net assets. Futures contracts and options can be highly volatile

and could result in reduction of underlying Price funds` total returns , and the underlying Price funds` attempt to use such investments for hedging purposes may not be successful.

INVESTMENT RESTRICTIONS

Fundamental policies may not be changed without the approval of the lesser of (1) 67% of the funds` 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 funds` outstanding shares. Other restrictions in the form of operating policies are subject to change by the funds` Boards 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 funds. Calculation of the funds` total assets for compliance with any of the following fundamental or operating policies or any other investment restrictions set forth in the funds` prospectuses or SAI will not include cash collateral held in connection with securities lending activities.

Fundamental Policies

As a matter of fundamental policy, the funds may not:

(a) Borrowing (All funds except Spectrum Funds) Borrow money except that the funds 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 funds` investment objectives and programs, provided that the combination of (i) and (ii) shall not exceed 33xb6 / xb8 % of the value of the funds` 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 funds may borrow from banks, other Price Funds, or other persons to the extent permitted by applicable law;

(b) Borrowing (Spectrum Funds) Borrow money, except the funds may borrow from banks or other Price Funds as a temporary measure for extraordinary or emergency purposes, and then only in amounts not exceeding 30% of total assets valued at market. The funds will not borrow in order to increase income (leveraging), but only to facilitate redemption requests which might otherwise require untimely disposition of portfolio securities. Interest paid on any such borrowings will reduce net investment income;

(a) Commodities (All funds except Spectrum Growth and Spectrum Income Funds) Purchase or sell physical commodities , except that the funds (other than the Money Funds) may enter into futures contracts and options thereon;

(b) Commodities ( Spectrum Growth and Spectrum Income Funds) Purchase or sell commodities or commodity or futures contracts ;

Equity Securities (Summit Municipal Funds) Purchase equity securities or securities convertible into equity securities;

(a) Industry Concentration (All funds except Health Sciences, High Yield, International Bond, International Equity Index, Financial Services, New Income, Prime Reserve, Real Estate, Reserve Investment, Retirement, Short-Term Bond, Spectrum, and Summit Cash Reserves Funds) Purchase the securities of any issuer if, as a result, more than 25% of the value of the funds` total assets would be invested in the securities of issuers having their principal business activities in the same industry;

(b) Industry Concentration (Financial Services, Health Sciences, and Real Estate Funds) Purchase the securities of any issuer if, as a result, more than 25% of the value of the funds` total assets would be invested in the securities of issuers having their principal business activities in the same industry, provided, however, that (i) the Health Sciences Fund will invest more than 25% of its total assets in the health sciences industry as defined in the fund`s prospectus; (ii) the Financial Services Fund will invest more than 25% of its total assets in the financial services industry as defined in the fund`s prospectus; and (iii) the Real Estate Fund will invest more than 25% of its total assets in the real estate industry as defined in the fund`s prospectus;

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(c) Industry Concentration ( High Yield Fund ) 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, provided, however, that the fund will normally concentrate 25% or more of its assets in securities of the banking industry when the fund`s position in issues maturing in one year or less equals 35% or more of the fund`s total assets;

(d) Industry Concentration (International Bond Fund) 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, provided, however, that the fund will normally concentrate 25% or more of its assets in securities of the banking industry when the fund`s position in issues maturing in one year or less equals 35% or more of the fund`s total assets;

(e) Industry Concentration (International Equity Index Fund) 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, except that the fund will invest more than 25% of the value of its total assets in issuers having their principal business activities in the same industry to the extent necessary to replicate the index that the fund uses as its benchmark as set forth in its prospectus;

(f) Industry Concentration (New Income Fund) 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, provided, however, that the fund will invest more than 25% of its total assets, but not more than 50%, in any one of the gas utility, gas transmission utility, electric utility, telephone utility, and petroleum industries under certain circumstances, and further provided that this limitation does not apply to securities of the banking industry including, but not limited to, certificates of deposit and banker`s acceptances;

(g) Industry Concentration (Prime Reserve , Reserve Investment , and Summi t Cash Reserves Funds) Purchase the securities of any issuer if, as a result, more than 25% of the value of the funds` total assets would be invested in the securities of issuers having their principal business activities in the same industry, provided, however, that this limitation does not apply to securities of the banking industry including, but not limited to, certificates of deposit and banker`s acceptances;

(h) Industry Concentration (Short-Term Bond Fund) 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, provided, however, that the fund will normally invest more than 25% of its total assets in the securities of the banking industry including, but not limited to, bank certificates of deposit and banker`s acceptances when the fund`s position in issues maturing in one year or less equals 35% or more of the fund`s total assets; provided, further, that the fund will invest more than 25% of its total assets, but not more than 50%, in any one of the gas utility, gas transmission utility, electric utility, telephone utility, and petroleum industries under certain circumstances;

(i) Concentration (Retirement and Spectrum Funds ) Concentrate in any industry except that the funds will concentrate (invest more than 25% of total assets) in the mutual fund industry;

(a) Loans (All funds except Retirement and Spectrum Funds) Make loans, although the funds 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 33xb6 / xb8 % of the value of the funds` 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;

(b) Loans (Retirement and Spectrum Funds) Make loans, although the funds may purchase money market securities and enter into repurchase agreements;

Margin (Spectrum Funds) Purchase securities on margin, except for use of short-term credit necessary for clearance of purchases of portfolio securities;

Mortgaging (Spectrum Funds) Mortgage, pledge, hypothecate , or, in any manner, transfer any security owned by the funds as security for indebtedness , except as may be necessary in connection with

permissible borrowings, in which event such mortgaging, pledging, or hypothecating may not exceed 30% of the funds` total assets, valued at market;

Percent Limit on Assets Invested in Any One Issuer (All funds except Emerging Europe & Mediterranean, Institutional Large-Cap Growth, Latin America, New Asia, and State Tax-Free Funds not including California Funds) Purchase a security if, as a result, with respect to 75% of the value of the funds` total assets, more than 5% of the value of the funds` total assets would be invested in the securities of a single issuer, except securities issued or guaranteed by the U.S. government , its agencies , or instrumentalities;

Percent Limit on Share Ownership of Any One Issuer (All funds except Emerging Europe & Mediterranean, Institutional Large-Cap Growth, Latin America, New Asia, and State Tax-Free Funds not including California Funds) Purchase a security if, as a result, with respect to 75% of the value of the funds` total assets, more than 10% of the outstanding voting securities of any issuer would be held by the funds (other than obligations issued or guaranteed by the U.S. government , its agencies , or instrumentalities);

(a) Real Estate (All funds except Retirement and Spectrum Funds) Purchase or sell real estate, including limited partnership interests therein, unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the funds from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business);

(b) Real Estate (Retirement and Spectrum Funds) Purchase or sell real estate, including limited partnership interests therein, unless acquired as a result of ownership of securities or other instruments (although the funds may purchase money market securities secured by real estate or interests therein, or issued by companies or investment trusts which invest in real estate or interests therein);

(a) Senior Securities (All funds except Spectrum Funds) Issue senior securities except in compliance with the 1940 Act;

(b) Senior Securities (Spectrum Funds) Issue senior securities;

Short Sales (Spectrum Funds) Effect short sales of securities;

Taxable Securities (State T ax- F ree and Tax-Free F unds ) During periods of normal market conditions, purchase any security if, as a result, less than 80% of the funds` income would be exempt from federal and , if applicable, any state, city, or local income tax. Normally, the funds will not purchase a security if, as a result, more than 20% of the funds` income would be subject to the AMT; or

Underwriting Underwrite securities issued by other persons, except to the extent that the funds may be deemed to be an underwriter within the meaning of the 1933 Act in connection with the purchase and sale of fund portfolio securities in the ordinary course of pursuing their investment programs.

NOTES

The following Notes should be read in connection with the above-described fundamental policies. The Notes are not fundamental policies.

Money funds With respect to investment restriction (1), the funds have no current intention of engaging in any borrowing transactions.

All funds except Retirement and Spectrum Funds With respect to investment restriction (2), the funds do not consider currency contracts or hybrid investments to be commodities.

All funds except Retirement and Spectrum Funds For purposes of investment restriction ( 4 ):

U.S., state, or local governments, or related agencies or instrumentalities, are not considered an industry .

I ndustries are determined by reference to the classifications of industries and sub-industries set forth in the Morgan Stanley Capital International/Standard & Poor`s Global Industry Classification Standard for the International Equity Funds, equity securities of the Tax-Efficient Funds, International Bond Funds, and Equity Funds except Developing Technologies, Global Technology, Media & Telecommunications, New Era, and Science & Technology Funds. For Developing Technologies, Global Technology, Media & Telecommunications, New Era, and

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Science & Technology Funds as well as all other funds not referred to above, industries are determined by reference to industry classifications set forth in their semiannual and annual reports.

It is the position of the staff of the SEC that foreign governments are industries for purposes of this restriction. For as long as this staff position is in effect, the I nternational B ond F unds will not invest more than 25% of total assets in the securities of any single foreign governmental issuer. For purposes of this restriction, governmental entities are considered separate issuers.

The High Yield, New Income, and Short-Term Bond Funds have no current intention of concentrating their investments .

All funds except Summit Income and U.S. Bond Index Funds For purposes of investment restriction (5), the funds will consider the acquisition of a debt security to include the execution of a note or other evidence of an extension of credit with a term of more than nine months.

All funds except Spectrum Funds For purposes of investment restriction s ( 8) and (9) , the funds will treat bonds which are refunded with escrowed U.S. government securities as U.S. government securities.

Taxable Bond and Money Funds For purposes of investment restriction s (8) and (9) , the funds will consider a repurchase agreement fully collateralized with U.S. government securities to be U.S. government securities.

With respect to investment restriction (11), unde r the 1940 Act , an open - end investment company can borrow money from a bank provided that immediately after such borrowing there is asset coverage of at least 300% for all borrowings. If the asset coverage falls below 300%, the company must, within three business days, reduce the amount of its borrowings to satisfy the 300% requirement.

For purposes of investment restriction (13), the funds measure the amount of their income from taxable securities, including AMT securities, over the course of the funds` taxable year.

Operating Policies

As a matter of operating policy, the funds may not:

Borrowing Purchase additional securities when money borrowed exceeds 5% of total assets;

Control of Portfolio Companies Invest in companies for the purpose of exercising management or control;

(a) Equity Securities (All Taxable Bond Funds, except High Yield , Institutional Core Plus, Institutional High Yield, and New Income Funds) Purchase any equity security or security convertible into an equity security except as set forth in its prospectus and operating policy on investment companies;

( b ) Equity Securities ( State Tax-Free and T ax- F ree F unds ) Purchase any equity security or security convertible into an equity security , provided that the funds (other than the Money Funds) may invest up to 10% of total assets in equity securities , which pay tax-exempt dividends and which are otherwise consistent with the funds` investment objectives and, further provided, that Money Funds may invest up to 10% of total assets in equity securities of other tax-free open-end money market funds;

Forward Currency Contracts (Retirement and Spectrum Funds) Purchase forward currency contracts , although the fund s reserve the right to do so in the future;

(a) Futures Contracts (All funds except Retirement and Spectrum Funds) 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 funds` net asset value;

(b) Futures (Retirement and Spectrum International Funds) Purchase futures , although the fund s reserve the right to do so in the future ;

Illiquid Securities Purchase illiquid securities if, as a result, more than 15% (10% for Spectrum and Money Funds) of net assets would be invested in such securities;

Investment Companies (All funds except Retirement and Spectrum Funds) Purchase securities of open- end or closed-end investment companies except (i) in compliance with the 1940 Act and as set forth in a fund`s prospectus ; (ii) securities of the Reserve Investment Funds; (iii) securities of the Institutional High Yield Fund; (iv) in the case of the Money Funds, only securities of other money market funds; (v) in the case of the State Tax-Free and Tax-Free Funds, only securities of other tax-free money market funds;

Margin (All funds except Spectrum Funds) Purchase securities on margin, except (i) for use of short-term credit necessary for clearance of purchases of portfolio securities and (ii) they may make margin deposits in connection with futures contracts or other permissible investments;

Mortgaging (All funds except Spectrum Funds) Mortgage, pledge, hypothecate, or, in any manner, transfer any security owned by the funds 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 33xb6 / xb8 % of the funds` total assets at the time of borrowing or investment;

Oil and Gas Programs Purchase participations or other direct interests in or enter into leases with respect to oil, gas, or other mineral exploration or development programs if, as a result thereof, more than 5% of the value of the total assets of the funds would be invested in such programs;

(a) Options, etc. (All funds except Retirement and Spectrum Funds) Invest in puts, calls, straddles, spreads, or any combination thereof, except to the extent permitted by the funds` prospectuses and this SAI;

(b) Options (Retirement Funds) Invest in options although the funds reserve the right to do so in the future;

(a) Short Sales (All funds except High Yield and Institutional High Yield F unds) Effect short sales of securities;

(b) Short Sales (High Yield and Institutional High Yield Funds ) Effect short sales of securities, other than as set forth in the funds` prospectuses and this SAI; and

Warrants Invest in warrants if , as a result , more than 10% of the value of the fund`s net assets would be invested in warrants, provided that, the Money, Retirement, Spectrum, State Tax-Free, Tax Free , and Summit Municipal Funds will not invest in warrants.

NOTES

The following Notes should be read in connection with the above-described operating policies. The Notes are not operating policies.

If a fund is subject to an 80% name test as set forth in its prospectus, it will be based on the fund`s net assets plus any borrowings for investment purposes.

Blue Chip Growth, Capital Opportunity, Developing Technologies, Diversified Small-Cap Growth, Financial Services, Global Technology, Health Sciences, High Yield, Institutional High Yield, Media & Telecommunications, Mid-Cap Value, Personal Strategy, Real Estate, Summit Income, Summit Municipal, U.S. Bond Index, and Value Funds

Notwithstanding anything in the above fundamental and operating restrictions to the contrary, the funds may invest all of their 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 funds (a "Feeder" ), and one or more other funds with the same investment objective and program as the funds, sought to accomplish their investment objectives and programs by investing all of their assets in the shares of another investment company (the "Master" ). The Master would, in turn, have the same investment objective and program as the funds. The funds 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.

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International Funds

In addition to the restrictions described above, some foreign countries limit, or prohibit, all direct foreign investment in the securities of their companies. However, the governments of some countries have authorized the organization of investment funds to permit indirect foreign investment in such securities. For tax purposes , these funds may be known as Passive F oreign Investment Companies. The funds are subject to certain percentage limitations under the 1940 Act relating to the purchase of securities of investment companies, and may be subject to the limitation that no more than 10% of the value of the fund`s total assets may be invested in such securities.

Retirement and Spectrum Funds

T here is no limit on the amount the funds may own of the total outstanding voting securities of registered investment companies which are members of the Price Funds . The funds, in accordance with their prospectuses, may invest more than 5% of their total assets in any one or more of the Price Funds . The funds may invest more than 10% of their total assets, collectively, in registered investment companies which are members of the Price Funds.

CUSTODIAN

State Street Bank and Trust Company is the custodian for the fund s ` U.S. securities and cash, but it does not participate in the funds` investment decisions. Portfolio securities purchased in the U.S. are maintained in the custody of the bank and may be entered into the Federal Reserve Book Entry System, or the security depository system of the Depository Trust Corporation , or any central depository system allowed by federal law . In addition, funds investing in municipal securities are authorized to maintain certain of their securities, in particular, variable rate demand note s , in uncertificated form, in the proprietary deposit systems of various dealers in municipal securities. State Street Bank`s main office is at 225 Franklin Street, Boston, Massachusetts 02110. State Street Bank maintains shares of the Retirement and Spectrum Funds in the book entry system of the funds` transfer agent, T. Rowe Price Services, Inc.

All funds that can invest in foreign securities have entered into a Custodian Agreement with JPMorgan Chase Bank, London, pursuant to which portfolio securities which are purchased outside the United States are maintained in the custody of various foreign branches of JPMorgan Chase Bank and such other custodians, including foreign banks and foreign securities depositories as are approved in accordance with regulations under the 1940 Act. The address for JPMorgan Chase Bank, London is Woolgate House, Coleman Street, London, EC2P 2HD, England.

CODE OF ETHICS

The funds, their investment adviser (T. Rowe Price International for international funds and T. Rowe Price for all other funds), and their principal underwriter (T. Rowe Price Investment Services) have a written Code of Ethics which requires persons with access to investment information ( "Access Persons" ) to obtain prior clearance before engaging in personal securities transactions. Transactions must be executed within three business days of their clearance. In addition, all Access Persons must report their personal securities transactions within 10 days after the end of the calendar quarter. Aside from certain limited transactions involving securities in certain issuers with high trading volumes, Access Persons are typically not permitted to effect transactions in a security if : there are pending client orders in the security; the security has been purchased or sold by a client within seven calendar days; the security is being considered for purchase for a client; a change has occurred in T. Rowe Price`s rating of the security within seven calendar days prior to the date of the proposed transaction; or the security is subject to internal trading restrictions. In addition, A ccess P ersons are prohibited from profiting from short-term trading (e.g., purchases and sales involving the same security within 60 days). Any person becoming an Access Person must file a statement of personal securities holdings within 10 days of this date. All Access Persons are required to file an annual statement with respect to their personal securities holdings. Any material violation of the Code of Ethics is reported to the Boards of the funds. The Boards also review the administration of the Code of Ethics on an annual basis.

disclosure of fund Portfolio information

The fund`s portfolio holdings are disclosed on a regular basis in its semi-annual and annual reports to shareholders as well as Form N-Q which is filed with the SEC within 60 days of a fund`s first and third fiscal quarter-end. In addition, the fund`s Boards have adopted policies and procedures with respect to the disclosure of the funds` portfolio securities and the disclosure of portfolio commentary and statistical information about the funds` portfolios and their securities. The policy on the general manner in which the funds` portfolio securities are disclosed is set forth in the funds` prospectuses. This statement of additional information sets forth details of that policy as well as the funds` policy on disclosing information about the funds` portfolios. The extent of these disclosures and when they will be made is reviewed and approved by the equity, fixed income and/or international steering committees of the funds` investment advisers. The steering committees have oversight responsibilities for managing the T. Rowe Price funds. Each steering committee is comprised of senior investment management personnel of T. Rowe Price or T. Rowe Price International, as applicable. Each committee as a whole determines the funds` policy on the disclosure of portfolio holdings and related information. The funds` Boards believe these policies are in the best interests of the fund and that they strike an appropriate balance between the desire of some persons for information about the funds` portfolios and the need to protect the funds from potentially harmful disclosures.

From time to time, officers of the funds, the funds` investment adviser or the funds` distributor (collectively "T. Rowe Price") may express their views orally or in writing on one or more of the funds` portfolio securities or may state that the funds have recently purchased or sold one or more securities. Such views and statements may be made to members of the press, shareholders in the funds, persons considering investing in the funds or representatives of such shareholders or potential shareholders, such as fiduciaries of a 401(k) plan or a trust and their advisers and rating and ranking organizations such as Lipper, Inc. and Morningstar, Inc. The nature and content of the views and statements provided to each of these persons may differ. The securities subject to these views and statements may be ones that were purchased or sold since the funds` most recent quarter-end and therefore may not be reflected on the list of the funds` most recent quarter-end portfolio holdings disclosed on the website.

Additionally, T. Rowe Price may provide oral or written information ("portfolio commentary") about the funds, including, but not limited to, how the funds` investments are divided among various sectors, industries, countries, value and growth stocks, small, mid and large-cap stocks, among stocks, bonds, currencies and cash, types of bonds, bond maturities, bond coupons and bond credit quality ratings. This portfolio commentary may also include information on how these various weightings and factors contributed to fund performance. T. Rowe Price may also provide oral or written information ("statistical information") about various financial characteristics of the funds or their underlying portfolio securities including, but not limited to, alpha, beta, coefficient of determination, duration, maturity, information ratio, sharpe ratio, earnings growth, payout ratio, price/book value, projected earnings growth, return on equity, standard deviation, tracking error, weighted average quality, market capitalization, percent debt to equity, price to cash flow, dividend yield or growth, default rate, portfolio turnover and risk and style characteristics. This portfolio commentary and statistical information about the funds may be based on the funds` most recent quarter-end portfolio or on some other interim period such as month-end. The portfolio commentary and statistical information may be provided to members of the press, shareholders in the funds, persons considering investing in the funds or representatives of such shareholders or potential shareholders, such as fiduciaries of a 401(k) plan or a trust and their advisers and rating and ranking organizations and the content and nature of the information provided to each of these persons may differ.

None of the persons described above will receive any of the information described above if, in the sole judgment of T. Rowe Price, the information could be used in a manner that would be harmful to the funds. The T. Rowe Price Code of Ethics contains a provision to this effect.

T. Rowe Price also discloses portfolio holdings in connection with the day-to-day operations and management of the funds. Full portfolio holdings are disclosed to the funds` custodians and auditors. Portfolio holdings are disclosed to the funds` pricing service vendors and other persons who provide systems or software support in connection with fund operations, including accounting, compliance support and pricing. Portfolio holdings may also be disclosed to persons assisting the funds in the voting of proxies. In connection with managing the funds, the funds` investment advisers may use analytical systems provided by third parties who may have access to the funds` portfolio holdings. In all of these situations, the funds or T. Rowe Price have entered into an agreement

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with the outside party under which the party undertakes to maintain the funds` portfolio holdings on a confidential basis and to refrain from trading on the basis of the information. T. Rowe Price relies on these non- disclosure agreements in determining that such disclosures are not harmful to the funds. The names of these persons and the services they provide are set forth below under "Fund Service Providers."

Additionally, when purchasing and selling its securities through broker-dealers, requesting bids on securities, obtaining price quotations on securities as well as in connection with litigation involving the funds` portfolio securities, the funds may disclose one or more of its securities. The funds have not entered into formal non- disclosure agreements in connection with these situations, however, the funds would not continue to conduct business with a person who T. Rowe Price believed was misusing the disclosed information.

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Fund Service Providers

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Service Provider	Service
PricewaterhouseCoopers LLP	Independent Registered Public Accounting Firm
JP Morgan Chase, London	Custodian
State Street Bank	Custodian
Charles River	Systems Vendor
COR	Systems Vendor
DSTI	Systems Vendor
GCom	Systems Vendor
Institutional Shareholder Services	Systems Vendor
Merant	Systems Vendor
Merrin McGregor	Systems Vendor
Mosiki	Systems Vendor
Perot Systems	Systems Vendor
REMO	Systems Vendor
SmartStream Technologies	Systems Vendor
Vision	Systems Vendor
Wilshire	Systems Vendor
FT Interactive Data	Pricing Vendor
JP Morgan	Pricing Vendor
Reuters Fixed Income	Pricing Vendor
S&P/JJ Kenny	Pricing Vendor

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PRICING OF SECURITIES

Blended, Equity, Index Bond, Index Equity, International Bond, International Equity, State Tax-Free Bond, Taxable Bond, and Tax-Free Bond Funds

Equity securities listed or regularly traded on a securities exchange or in the over-the-counter market are valued at the last quoted sale price or , for certain markets, the official closing price at the time the valuations are made , except for OTC Bulletin Board securities, which are valued at the mean of the latest bid and ask prices . A security that is listed or traded on more than one exchange is valued at the quotation on the exchange determined to be the primary market for such security. Listed securities not traded on a particular day are valued at the mean of the latest bid and ask prices for domestic securities and the last quoted sale price for international securities.

Debt securities are generally traded in the over-the-counter market. Securities with original maturities of one year or more are valued using prices furnished by dealers who make markets in such securities or by an

independent pricing service, which considers yield or price of bonds of comparable quality, coupon, maturity, and type, as well as prices quoted by dealers who make markets in such securities.

Blended, Equity, Index Equity, and International Equity Funds

Debt securities with original maturities less than one year are valued at amortized cost in local currency, w hich approximates fair value when combined with accrued interest.

Index Bond , International Bond, and Taxable Bond Funds

Debt securities with original maturities less than one year are stated at fair value, which is determined by using a matrix system that establishes a value for each security based on bid-side money market yields.

State Tax-Free Bond and Tax-Free Bond Funds

Debt securities with original maturities less than one year are valued at prices furnished by dealers who make markets in such securities or by an independent pricing service, which considers yield or price of bonds of comparable quality, coupon, maturity, and type, as well as prices quoted by dealers who make markets in such securities.

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State Tax-Free Money, Taxable Money , and Tax-Free Money Funds

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Securities are valued at amortized cost.

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Fund-of- Funds

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The underlying Price funds held by each fund are valued at the ir closing net asset value per share on the day of valuation.

Equity, International Bond, International Equity, and Spectrum International Funds

Trading in the portfolio securities of the funds, or underlying Price funds in the case of Spectrum International Fund, may take place in various foreign markets on certain days (such as Saturday) when the funds or underlying Price funds are not open for business and do not calculate their net asset value. As a result, net asset values may be significantly affected by trading on days when shareholders cannot make transactions. In addition, trading in the Price funds` or underlying funds` portfolio securities may not occur on days when the funds are open.

The Japan Fund, one of the underlying Price funds in which the Spectrum International Fund can invest, is not open on certain days when the Spectrum International Fund is open. On such days, securities of the Japan Fund held by the Spectrum International Fund are valued in accordance with procedures adopted by the Board . These procedures call for the Spectrum International Fund to direct that the net asset value for the Japan Fund be calculated in the same manner and using the same system of procedures and controls as are used in the normal daily calculation of the Japan Fund`s net asset value , except that securities are valued at the most recent yen- denominated closing prices in the Japanese market (which may be one or more days previous to the valuation d ate of the Spectrum International Fund ).

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All Price F unds E xcept Fund-of-Funds, State Tax-Free Money, Taxable Money, and Tax-Free Money Funds

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Investments in mutual funds are valued at the closing net asset value per share of the mutual fund on the day of valuation. P urchased and written options are valued at the mean of the closing bid and ask prices. Options on futures contracts are valued at the last sale price. Financial futures contracts are valued at closing settlement prices. Swap agreements are valued using prices furnished by dealers who make markets in such securities.

Assets , including investments, and liabilities denominated in foreign currencies are translated into U.S. dollar values each day at the prevailing exchange rate, using the mean of the bid and ask prices of such currencies against U.S. dollars quoted by a major bank. Purchases and sales of securities, income, and expenses are translated into U.S. dollars at the prevailing exchange rate on the dates of such transactions.

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All Price F unds

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Other investments, including restricted securities, and those 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 the T. Rowe Price Valuation Committee, established by the funds` Boards .

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NET ASSET VALUE PER SHARE

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The purchase and redemption price of the funds` shares is equal to the funds` net asset value per share or share price. The funds determine their net asset value per share by subtracting their liabilities (including accrued expenses and dividends payable) from their total assets (the market value of the securities the funds hold 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 funds, other than the Japan Fund, is calculated as of the close of trading on the New York Stock Exchange ( "NYSE" ) every day the NYSE is open for trading. The net asset value per share of the Japan Fund is calculated as of the close of trading on the NYSE each day the NYSE and the Tokyo Stock Exchange ( "TSE") are both open. The NYSE is closed on the following days: New Year`s Day, Dr. Martin Luther King, Jr. Holiday, Presidents` Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. The TSE is scheduled to be closed on the following weekdays in 20 0 5: January 3 and 10; February 11; March 21; April 29; May 3, 4, and 5; July 18; September 19 and 23; October 10; November 3 and 23; December 23 as well as the following weekdays in 200 6: January 2, 3, and 9; February 11; March 21; April 29; May 3, 4, and 5; July 17; September 19 and 23; October 9; November 3 and 23; December 23 . If the TSE closes on dates not listed , the Japan Fund will not be priced on those dates.

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Determination of net asset value (and the offering, sale, redemption, and repurchase of shares) for the funds may be suspended at times (a) during which the NYSE is closed, other than customary weekend and holiday closings, or in the case of the Japan Fund, either the NYSE or TSE is closed, (b) during which trading on the NYSE is restricted, (c) during which an emergency exists as a result of which disposal by the funds of securities owned by them are not reasonably practicable or it is not reasonably practicable for the funds fairly to determine the value of their net assets, or (d) during which a governmental body having jurisdiction over the funds may by order permit such a suspension for the protection of the funds` shareholders, provided that applicable rules and regulations of the SEC (or any succeeding governmental authority) shall govern as to whether the conditions prescribed in (b), (c), or (d) exist.

Maintenance of Money Funds` Net Asset Value p er Share at $1.00

It is the policy of the funds to attempt to maintain a net asset value of $1.00 per share by using the amortized cost method of valuation permitted by Rule 2a-7 under the 1940 Act. Under this method, securities are valued by reference to the funds` acquisition costs as adjusted for amortization of premium or accumulation of discount , rather than by reference to their market value. Under Rule 2a-7:

(a) The Board s must establish written procedures reasonably designed, taking into account current market conditions and the funds` investment objectives, to stabilize the funds` net asset value per share, as computed for the purpose of distribution, redemption , and repurchase, at a single value;

(b) The funds must (i) maintain a dollar weighted average portfolio maturity appropriate to their objective of maintaining a stable price per share, (ii) not purchase any instrument with a remaining maturity greater than 397 days, and (iii) maintain a dollar weighted average portfolio maturity of 90 days or less;

(c) The funds must limit their purchase of portfolio instruments, including repurchase agreements, to those U.S. dollar-denominated instruments which the funds` Boards determine present minimal credit risks and which are eligible securities as defined by Rule 2a-7; and

(d) The Board s must determine that (i) it is in the best interest of the funds and the shareholders to maintain a stable net asset value per share under the amortized cost method; and (ii) the funds will continue to use the amortized cost method only so long as the Boards believe that it fairly reflects the market - based net asset value per share.

Although the funds believe that they will be able to maintain their net asset value at $1.00 per share under most conditions, there can be no absolute assurance that they will be able to do so on a continuous basis. If the funds` net asset value per share declined, or was expected to decline, below $1.00 (rounded to the nearest one cent), the Boards of the funds might temporarily reduce or suspend dividend payments in an effort to maintain the net asset value at $1.00 per share. As a result of such reduction or suspension of dividends, an investor would receive less income during a given period than if such a reduction or suspension had not taken place. Such action could result in an investor receiving no dividend for the period during which he holds his shares and in his receiving, upon redemption, a price per share lower than that which he paid. On the other hand, if the funds` net asset value per share were to increase, or were anticipated to increase , above $1.00 (rounded to the nearest one cent), the Board s of the funds might supplement dividends in an effort to maintain the net asset value at $1.00 per share.

Prime Reserve and Reserve Investment Funds

Prime Money Market Securities Defined

Prime money market securities are those which are described as First Tier Securities under Rule 2a-7 of the 1940 Act. These include any security with a remaining maturity of 397 days or less that is rated (or that has been issued by an issuer that is rated with respect to a class of short-term debt obligations, or any security within that class that is comparable in priority and security with the security) by any two nationally recognized statistical rating organizations (NRSROs) (or if only one NRSRO has issued a rating, that NRSRO) in the highest rating category for short-term debt obligations (within which there may be sub-categories). First Tier Securities also include unrated securities comparable in quality to rated securities, as determined by T. Rowe Price under the supervision of the funds` Boards.

DIVIDENDS AND DISTRIBUTIONS

Unless you elect otherwise, capital gain distributions, final quarterly dividend s and annual dividend s , if any, will be reinvested on the reinvestment date using the net asset values per share o n that date. The reinvestment date normally precedes the payment date by one day, although the exact timing is subject to change and can be as great as 10 days.

TAX STATUS

The funds intend to qualify as "regulated investment compan ies " under Subchapter M of the Code.

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In order to be subject to the special tax benefits applicable to regulated investment companies, the funds will be required to distribute the sum of 90% of their investment company taxable income and 90% of their net tax- exempt income each year. In order to avoid federal income tax, the funds must distribute all of their investment company taxable income and realized long-term capital gains for each fiscal year within 12 months after the end of the fiscal year. To avoid federal excise tax , the funds must declare dividends by December 31 of each year equal to at least 98% of ordinary income (as of December 31) and capital gains (as of October 31) and distribute such amounts prior to February 1 of the following calendar year. Shareholders are required to include such distributions in their income tax calculations whether dividends and capital gain distributions are paid in cash or in additional shares.

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For individual shareholders, a portion of the funds` ordinary dividends they received representing " qualified dividends " they received may be subject to tax at the lower rate applicable to long-term capital gains, rather than ordinary income. Qualified dividends are certain dividends received from domestic and qualified foreign corporations. They exclude dividends representing payments in lieu of dividends related to loaned securities, dividends received on certain hedged positions, and dividends on stock the funds have not held more than 60 days during the 12 1 -day period beginning 60 days before the stock became ex-dividend (90 and 18 1 days for certain preferred stock). Individual shareholders can only apply the lower rate to the qualified portion of the funds` dividends if they have held the shares in the funds on which the dividends were paid for this same holding period surrounding the ex-dividend date of the funds` dividends. Little, if any, of the ordinary dividends from the Tax-Free, Taxable Bond, and Taxable Money Funds is expected to qualify for this lower rate.

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For corporate shareholders, a portion of the funds` ordinary dividends may be eligible for the 70% deduction for dividends received by corporations to the extent the funds` income consists of dividends paid by U.S. corporations. This deduction does not include dividends representing payments in lieu of dividends related to loaned securities, dividends received on certain hedged positions and dividends on securities the funds have not held more than 45 days during the 90-day period beginning 45 days before the stock became ex-dividend (90 and 180 days for certain preferred stock). Little, if any, of the ordinary dividends from the Tax-Free, International (except Global Stock Fund), Taxable Bond, and Taxable Money Funds are expected to qualify for this deduction. Long-term capital gain distributions paid by the funds are not eligible for the dividends-received deduction.

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At the time of your purchase of shares (except in Money Funds), the funds` net asset value may reflect undistributed income, capital gains, or net unrealized appreciation of securities held by the funds. A subsequent distribution to you of such amounts, although constituting a return of your investment, would be taxable as either dividend or capital gain distributions. The funds may be able to reduce the amount of such distributions by utilizing their capital loss carry-overs, if any. For federal income tax purposes, the funds are permitted to carry forward their 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.

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If, in any taxable year, a fund does not qualify as a regulated investment company under the Code: (1) the fund would be taxed at the normal corporate rates on the entire amount of their taxable income, if any, without a deduction for dividends or other distributions to shareholders; (2) the fund ` s distributions, to the extent made out of the fund ` s current or accumulated earnings and profits, would be taxable to shareholders as ordinary dividends regardless of whether they would otherwise have been considered capital gain dividends ; (3) the fund may qualify for the 70% deduction for dividends received by corporations ; and (4) foreign tax credits would not "pass th r ough" to shareholders. However, for the Spectrum International Fund, the dividends will not be eligible for the 70% deduction for dividends received by corporations, if, as expected, none of the fund`s income consists of dividends paid by U.S. corporations.

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Taxation of Foreign Shareholders

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The Code provides that dividends from ordinary income (which for this purpose, are deemed to include ne t short-term capital gains and each shareholder`s pro-rata share of foreign taxes paid by the funds — see discussion of "pass through" of the foreign tax credit to U.S. shareholders) will be subject to U.S. tax. For shareholders who are not engaged in a business in the United States, 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. The fund may designate a portion of its ordinary dividends as an "interest related dividend" or short- term capital gain dividend. For such portion, the fund would generally not be required to withhold the 30% tax applicable to foreign shareholders. However, there can be no assurance that the fund will elect to pass through the character of such dividends.

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Distributions to foreign shareholders of net long-term capital gains realized by the funds may be subject to U.S. tax if the foreign shareholder is engaged in a U.S. business and the gains are connected with that business, or the shareholder is a nonresident alien individual who was physically present in the United States during the tax year for more than 182 days. In addition, a fund which is predominantly owned by U.S. persons would be required to withhold 30% of the "foreign ownership percentage" of capital gain distributions to foreign shareholders, to the extent attributable to gains from the sale or exchange by the fund of a U.S. real property interest. Funds owning U.S. real property interests and not predominantly owned by U.S. persons may be required to withhold 35% of capital gain distributions to foreign shareholders and if the fund qualifies as a U.S. real property interest, 10% of the proceeds on the sale of its shares by a foreign shareholder.

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Retirement and Spectrum Funds

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Distributions by the underlying Price funds, redemptions of shares in the underlying Price funds, and changes in asset allocations may result in taxable ordinary income or capital gains. In addition, the funds will generally not be able to currently offset gains realized by one underlying Price fund in which the funds invest against losses realized by another underlying Price fund. These factors could affect the amount, timing, and character of distributions to shareholders. Under current law, it is anticipated that the automatic conversion of a portfolio into the Retirement Income Fund will not be a taxable event.

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State Tax-Free and Tax-Free Funds

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The funds anticipate that substantially all of the dividends to be paid by each fund will be exempt from federal income taxes. If any portion of the funds` dividends is not exempt from federal income taxes, you will receive a Form 1099-DIV stating the taxable portion. The funds will also advise you of the percentage of your dividends, if any, which should be included in the computation of the alternative minimum tax. Social Security recipients who receive income dividends from tax-free funds may have to pay taxes on a portion of their Social Security benefit s .

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Because the income dividends of the funds are expected to be derived from tax-exempt interest on municipal securities, any interest on money you borrow that is directly or indirectly used to purchase fund shares is not deductible. Further, entities or persons that are "substantial users" (or persons related to "substantial users") of facilities financed by industrial development bonds should consult their tax advisers before purchasing shares of the se funds. The income from such bonds may not be tax - exempt for such substantial users.

Florida Intermediate Tax-Free Fund

Although Florida does not have a state income tax, it does impose an intangible s property tax that applies to shares of mutual funds. However, a fund that is organized as a business trust and invested at least 90% in Florida municipal obligations, U.S. government obligations, and certain other designated securities on January 1 is exempt from the intangibles tax. If a fund`s portfolio is less than 90% invested in these exempt securities on January 1, the exemption applies only to the portion of assets (if any) invested in U.S. government obligations .

The fund is organized as a business trust and will make every effort to have at least 90% of its portfolio invested in exempt securities on January 1 and, therefore, expects that the entire value of all fund shares will be exempt from the intangibles tax. Nevertheless, the exemption is not guaranteed, since the fund has the right under certain conditions to invest in nonexempt securities .

Equity, International Bond, International Equity, Personal Strategy, Taxable Bond, and Taxable Money Funds

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I ncome received by the fund s from sources within various foreign countries may be subject to foreign income taxes withheld at the source. Under the Code, if more than 50% of the value of the funds ` total assets at the close of the taxable year comprise s securities issued by foreign corporations or governments, the fund s may file an election to "pass through" to the funds ` shareholders any foreign income taxes paid by the fund s . There can be no assurance that the funds will be able to do so. Pursuant to this election, shareholders will be required to: (1) include in gross income, even though not actually received, their pro-rata share of foreign taxes paid by the fund s ; (2) treat their pro-rata share of foreign taxes paid by them; and (3) either deduct their pro-rata share of foreign taxes in computing their taxable income, or use it as a foreign tax credit against U.S. income taxes subject to certain limitations (but not both). A deduction for foreign taxes may only be claimed by a shareholder who does not itemize s deductions.

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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 ordinary income dividend paid by the funds will be increased. If the result is a loss, the income dividend paid by the funds will be decreased, or , to the extent such dividend has already been paid, it may be classified as a return of capital. Adjustments to reflect these gains and losses will be made at the end of the funds` taxable year.

Passive Foreign Investment Companies

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The funds may purchase the securities of certain foreign investment funds or trusts, called " passive foreign investment companies, " for U.S. tax purposes. Such foreign investment funds or trusts have been the only or primary way to invest in certain countries. 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 foreign investment funds or trusts. Capital gains on the sale of such holdings are considered ordinary income regardless of how long the funds held the investment. In addition, the funds may be subject to corporate income tax and an interest charge on certain dividends and capital gains earned from these investments, regardless of whether such income and gains are distributed to shareholders.

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To avoid such tax and interest, the funds intend to treat these securities as sold on the last day of their fiscal years and recognize any gains for tax purposes at that time; deductions for losses are allowable only to the extent of any gains resulting from these deemed sales for prior taxable years. Such gains and losses will be treated as ordinary income. The funds will be required to distribute any resulting income, even though they have not sold the security and received cash to pay such distributions.

CAPITAL STOCK (Maryland corporations)

All funds except Capital Appreciation, Equity Income, GNMA, New America Growth, and State Tax- Free Funds

All of the funds, other than those listed immediately above , are organized as Maryland corporations or series thereof. The funds ` Charters authorize the Boards 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 Boards subject to the 1940 Act and other applicable law. The shares of any such additional classes or series might therefore differ from the shares of the present class and series of capital stock and from each other as to preferences, conversions , or other rights, voting powers, restrictions, limitations as to dividends, qualifications , or terms or conditions of redemption, subject to applicable law, and might thus be superior or inferior to the capital stock or to other classes or series in various characteristics. The Boards 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 funds have authorized to issue without shareholder approval.

Except to the extent that the fund s` Boards might provide 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 d irectors have provide d that as to any matter with respect to which a separate vote of any class is required by the 1940 Act , such requirement as to a separate vote by that class shall apply in lieu of any vot ing requirements established by the Maryland General Corporation Law. Otherwise, holders of each class of capital stock are not entitled to vote as a class on any matter. Accordingly, the preferences, rights, and other characteristics attaching to any class of shares 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 funds, in which event the holders of the remaining shares will be unable to elect any person as a director . As set forth in the By-Laws of the Corporation s, a special meeting of shareholders of the Corporation s shall be called by the secretary of the Corporation s on the written request of shareholders entitled to cast (a) in the case of a meeting for the purpose of removing a director, at least ten (10) percent and (b) in the case of a meeting for any other purpose, at least 25 percent, in each case of all the votes entitled to be cast at such meeting, provided that any such request shall state the purpose or purposes of the meeting and the matters proposed to be acted on . Shareholders requesting such a meeting must pay to the C orporation s the reasonably estimated costs of preparing and mailing the notice of the meeting. The Corporation s, however, will otherwise assist the shareholders seeking to hold the special meeting in communicating to the other shareholders of the C orporation s to the extent required by Section 16(c) of the 1940 Act.

The series (and classes) set forth below have been established by the Boards under the Articles of Incorporation of the indicated C orporations. Each represents a separate pool of assets of the Corporations ` shares and has different objectives and investment policies. The Articles of Incorporation also provide that the Board s may issue additional series of shares. Each share of each fund represents an equal proportionate share in that fund with each other share and is entitled to such dividends and distributions of income belonging to that fund as are declared by the directors. In the event of the liquidation of a fund, each share is entitled to a pro-rata share of the net assets of that fund. Classes represent separate shares in the fund s but share the same portfolio s as the indicated fund s . Each fund is registered with the SEC under the 1940 Act as an open-end investment company, commonly known as a "mutual fund. "

Maryland Corporations
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc. T. Rowe Price Blue Chip Growth Fund — Advisor Class T. Rowe Price Blue Chip Growth Fund — R Class
T. Rowe Price Capital Opportunity Fund, Inc. T. Rowe Price Capital Opportunity Fund — Advisor Class T. Rowe Price Capital Opportunity Fund — R Class
T. Rowe Price Corporate Income Fund, Inc.
T. Rowe Price Developing Technologies Fund, Inc.
T. Rowe Price Diversified Mid-Cap Growth Fund , Inc.
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Financial Services Fund, Inc.
T. Rowe Price Global Technology Fund, Inc.
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc. T. Rowe Price Growth Stock Fund — Advisor Class T. Rowe Price Growth Stock Fund — R Class
T. Rowe Price Health Sciences Fund, Inc.
T. Rowe Price High Yield Fund, Inc. T. Rowe Price High Yield Fund — Advisor Class
T. Rowe Price Index Trust, Inc. T. Rowe Price Equity Index 500 Fund T. Rowe Price Extended Equity Market Index Fund T. Rowe Price Total Equity Market Index Fund
T. Rowe Price Inflation Protected Bond Fund , Inc.
T. Rowe Price Institutional Equity Funds, Inc. T. Rowe Price Institutional Large-Cap Core Growth Fund T. Rowe Price Institutional Large-Cap Growth Fund T. Rowe Price Institutional Large-Cap Value Fund T. Rowe Price Institutional Mid-Cap Equity Growth Fund T. Rowe Price Institutional Small-Cap Stock Fund
T. Rowe Price Institutional Income Funds, Inc. T. Rowe Price Institutional Core Plus Fund T. Rowe Price Institutional High Yield Fund
T. Rowe Price Institutional International Funds, Inc. T. Rowe Price Institutional Emerging Markets Equity Fund T. Rowe Price Institutional Foreign Equity Fund
T. Rowe Price International Funds, Inc. T. Rowe Price Emerging Europe & Mediterranean Fund T. Rowe Price Emerging Markets Bond Fund T. Rowe Price Emerging Markets Stock Fund T. Rowe Price European Stock Fund T. Rowe Price Global Stock Fund T. Rowe Price International Bond Fund T. Rowe Price International Bond Fund — Advisor Class T. Rowe Price International Discovery Fund T. Rowe Price International Growth & Income Fund T. Rowe Price International Growth & Income Fund — Advisor Class T. Rowe Price International Growth & Income Fund — R Class T. Rowe Price International Stock Fund T. Rowe Price International Stock Fund — Advisor Class T. Rowe Price International Stock Fund — R Class T. Rowe Price J apan Fund T. Rowe Price Latin America Fund T. Rowe Price New Asia Fund
T. Rowe Price International Index Fund, Inc. T. Rowe Price International Equity Index Fund
T. Rowe Price Media & Telecommunications Fund, Inc.
T. Rowe Price Mid-Cap Growth Fund, Inc. T. Rowe Price Mid-Cap Growth Fund — Advisor Class T. Rowe Price Mid-Cap Growth Fund — R Class
T. Rowe Price Mid-Cap Value Fund, Inc. T. Rowe Price Mid-Cap Value Fund — Advisor Class T. Rowe Price Mid-Cap Value Fund — R Class
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price New Income Fund, Inc. T. Rowe Price New Income Fund — Advisor Class T. Rowe Price New Income Fund — R Class
T. Rowe Price Personal Strategy Funds, Inc. T. Rowe Price Personal Strategy Balanced Fund T. Rowe Price Personal Strategy Growth Fund T. Rowe Price Personal Strategy Income Fund
T. Rowe Price Prime Reserve Fund, Inc.
T. Rowe Price Real Estate Fund, Inc. T. Rowe Price Real Estate Fund — Advisor Class
T. Rowe Price Reserve Investment Funds, Inc. T. Rowe Price Reserve Investment Fund T. Rowe Price Government Reserve Investment Fund
T. Rowe Price Retirement Funds, Inc. T. Rowe Price Retirement 2005 Fund T. Rowe Price Retirement 2010 Fund T. Rowe Price Retirement 2010 Fund — Advisor Class T. Rowe Price Retirement 2010 Fund — R Class T. Rowe Price Retirement 2015 Fund T. Rowe Price Retirement 2020 Fund T. Rowe Price Retirement 2020 Fund — Advisor Class T. Rowe Price Retirement 2020 Fund — R Class T. Rowe Price Retirement 2025 Fund T. Rowe Price Retirement 2030 Fund T. Rowe Price Retirement 2030 Fund — Advisor Class T. Rowe Price Retirement 2030 Fund — R Class T. Rowe Price Retirement 2035 Fund T. Rowe Price Retirement 2040 Fund T. Rowe Price Retirement 2040 Fund — Advisor Class T. Rowe Price Retirement 2040 Fund — R Class T. Rowe Price Retirement Income Fund T. Rowe Price Retirement Income Fund — Advisor Class T. Rowe Price Retirement Income Fund — R Class
T. Rowe Price Science & Technology Fund, Inc. T. Rowe Price Science & Technology Fund — Advisor Class
T. Rowe Price Short-Term Bond Fund, Inc. T. Rowe Price Short-Term Bond Fund — Advisor Class
T. Rowe Price Small-Cap Stock Fund, Inc. T. Rowe Price Small-Cap Stock Fund — Advisor Class
T. Rowe Price Small-Cap Value Fund, Inc. T. Rowe Price Small-Cap Value Fund — Advisor Class
T. Rowe Price Spectrum Fund, Inc. Spectrum Growth Fund Spectrum Income Fund Spectrum International Fund
T. Rowe Price Summit Funds, Inc. T. Rowe Price Summit Cash Reserves Fund T. Rowe Price Summit GNMA Fund
T. Rowe Price Summit Municipal Funds, Inc. T. Rowe Price Summit Municipal Money Market Fund T. Rowe Price Summit Municipal Intermediate Fund T. Rowe Price Summit Municipal Income Fund
T. Rowe Price Tax-Efficient Funds, Inc. T. Rowe Price Tax-Efficient Balanced Fund T. Rowe Price Tax-Efficient Growth Fund T. Rowe Price Tax-Efficient Multi-Cap Growth Fund
T. Rowe Price Tax-Exempt Money Fund, Inc.
T. Rowe Price Tax-Free High Yield Fund, Inc.
T. Rowe Price Tax-Free Income Fund, Inc. T. Rowe Price Tax-Free Income Fund — Advisor Class
T. Rowe Price Tax-Free Intermediate Bond Fund, Inc.
T. Rowe Price Tax-Free Short-Intermediate Fund , Inc.
T. Rowe Price U.S. Bond Index 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 Value Fund, Inc. T. Rowe Price Value Fund — Advisor Class

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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 SEC 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.

Media & Telecommunications Fund

On July 28, 1997, the fund converted its status from a closed-end fund to an open-end mutual fund. Prior to the conversion the fund was known as New Age Media Fund, Inc.

Small-Cap Stock Fund

Effective May 1, 1997, the fund`s name was changed from the T. Rowe Price OTC Fund to the T. Rowe Price Small-Cap Stock Fund.

Equity Index 500 Fund

Effective January 30, 1998, the fund`s name was changed from T. Rowe Price Equity Index Fund to the T. Rowe Price Equity Index 500 Fund.

ORGANIZATION OF THE FUND s (Massachusetts business trusts)

Capital Appreciation, Equity Income, GNMA, New America Growth, State Tax-Free Funds

For tax and business reasons, the se funds were organi zed as Massachusetts b usiness trusts . Each fund is registered with the SEC under the 1940 Act as a n open-end investment compan y , commonly known as a "mutual fund. "

The Declaration of Trust permits the Boards to issue an unlimited number of full and fractional shares of a single class. The Declaration of Trust also provides that the Board s may issue additional series or classes of shares. Each share represents an equal proportionate beneficial interest in the funds. In the event of the liquidation of the funds, each share is entitled to a pro-rata share of the net assets of the funds.

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 1940 Act, holders of record of not less than two-thirds of the outstanding shares of the funds 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 Trusts, 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 Trusts.

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 Trusts may be terminated (i) upon the sale of their assets to another open-end management investment company, if approved by the vote of the holders of two-thirds of the outstanding shares of the Trusts, or (ii) upon liquidation and distribution of the assets of the Trusts, if approved by the vote of the holders of a majority of the outstanding shares of the Trusts. If not so terminated, the Trusts will continue indefinitely.

Under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of the funds. However, the Declaration of Trust disclaims shareholder liability for acts or obligations of the funds and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by the funds or t rustees. 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 funds. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the funds themselves would be unable to meet their obligations, a possibility which T. Rowe Price believes is remote. Upon payment of any liability incurred by the funds, the shareholders of the funds paying such liability will be entitled to reimbursement from the general assets of the funds. The t rustees intend to conduct the operations of the funds in such a way as to avoid, as far as possible, ultimate liability of the shareholders for liabilities of such funds.

The series and classes set forth below have been established by the Boards under the Declaration of Trust of the indicated trusts .

Massachusetts Business Trusts
T. Rowe Price California Tax-Free Income Trust California Tax-Free Bond Fund California Tax-Free Money Fund
T. Rowe Price Capital Appreciation Fund T. Rowe Price Capital Appreciation Fund — Advisor Class
T. Rowe Price Equity Income Fund T. Rowe Price Equity Income Fund — Advisor Class T. Rowe Price Equity Income Fund — R Class
T. Rowe Price GNMA Fund
T. Rowe Price New America Growth Fund
T. Rowe Price State Tax-Free Income Trust Florida Intermediate Tax-Free Fund Georgia Tax-Free Bond Fund Maryland Short-Term Tax-Free Bond Fund Maryland Tax-Free Bond Fund Maryland Tax-Free Money Fund New Jersey Tax-Free Bond Fund New York Tax-Free Bond Fund New York Tax-Free Money Fund Virginia Tax-Free Bond Fund

T. ROWE PRICE PROXY VOTING — POLICIES and procedures

On behalf of its clients , T. Rowe Price analyzes the proxy statements of issuers whose stock is owned by the investment companies that it sponsors and for which it serves as investment adviser.

Proxy Administration

The T. Rowe Price Proxy Committee develops positions on all major corporate issues, creates guidelines, and oversees the voting process. The Proxy Committee, composed of portfolio managers, investment operations managers, and internal legal counsel, analyzes proxy policies based on whether they would adversely affect shareholders` interests and make a company less attractive to own. In evaluating proxy policies each year, the Proxy Committee relies upon our own fundamental research, independent proxy research provided by third

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parties such as Institutional Shareholder Services (ISS) and Glass Lewis , and information presented by company managements and shareholder groups.

Once the Proxy Committee establishes its recommendations, they are distributed to the firm`s portfolio managers as voting guidelines. Ultimately, the chairperson of each fund`s Investment Advisory Committee is responsible for deciding and voting on the proxy proposals of companies in his or her fund . Because fund portfolio managers may have differences of opinion on portfolio companies and their proxies, or because their funds may have different investment objectives, these factors, among others, may lead to different votes between funds on the same proxies. When portfolio managers cast votes that are counter to the Proxy Committee`s guidelines, they are required to document their reasons in writing to the Proxy Committee. Annually, the Proxy Committee and the funds` B oards review T. Rowe Price`s proxy voting process, policies, and voting records.

T. Rowe Price has retained I S S , an expert in the proxy voting and corporate governance area, to provide proxy advisory and voting services. These services include in-depth research, analysis, and voting recommendations as well as vote execution, reporting, auditing and consulting assistance for the handling of proxy voting responsibility and corporate governance-related efforts. While the Proxy Committee relies upon ISS research in establishing T. Rowe Price`s voting guidelines — many of which are consistent with ISS positions — T. Rowe Price may deviate from ISS recommendations on general policy issues or specific proxy proposals.

Fiduciary Considerations

T. Rowe Price`s decisions with respect to proxy issues are made in light of the anticipated impact of the issue on the desirability of investing in the portfolio company. Proxies are voted solely in the interests of f und shareholders . Practicalities involved with international investing may make it impossible or disadvantageous to vote proxies in every instance. For example, portfolio managers might refrain from voting if they or our agents are required to appear in person at a shareholder meeting or if the exercise of voting rights results in the imposition of trading or other ownership restrictions.

Consideration Given Management Recommendations

When determining whether to invest in a particular company, one of the key factors T. Rowe Price considers is the quality and depth of its management. As a result, T. Rowe Price believes that recommendations of management on most issues should be given weight in determining how proxy issues should be voted.

T. Rowe Price Voting Policies

Specific voting guidelines have been established by the Proxy Committee for recurring issues that appear on proxies . The following is a summary of the more significant T. Rowe Price policies:

Election of Directors

T. Rowe Price generally supports slates with a majority of independent directors and nominating committees chaired by an independent board member. T. Rowe Price withholds votes for outside directors that do not meet certain criteria relating to their independence. T. Rowe Price also withhold s votes for inside directors serving on compensation and audit committees and for directors who miss more than one-fourth of the scheduled board meetings.

Executive Compensation

The goal of T . Rowe Price is to assure that a company`s equity-based compensation plan is aligned with shareholders` long-term interests. While it evaluate s most plans on a case-by-case basis, T. Rowe Price generally opposes compensation packages that provide what it view s as excessive awards to a few senior executives or that contain excessively dilutive stock option plans. T. Rowe Price base s its review on criteria such as the costs associated with the plan, plan features, dilution to shareholders and comparability to plans in the company`s peer group. T. Rowe Price generally oppose s plans that give a company the ability to reprice options or to grant options at below market prices .

Anti-takeover , Capital Structure, and Corporate Governance Issues

T. Rowe Price generally opposes anti-takeover measures and other proposals designed to limit the ability of shareholders to act on possible transactions. Such anti-takeover mechanisms include classified boards, super majority voting requirements, dual share classes, and poison pills. We also oppose proposals that give management a "blank check" to create new classes of stock with disparate rights and privileges. We generally support proposals to permit cumulative voting and those that seek to prevent potential acquires from receiving a

takeover premium for their shares. When voting on corporate governance proposals, T. Rowe Price will consider the dilutive impact to shareholders and the effect on shareholder rights. With respect to proposals for the approval of a company`s auditor, we typically oppose auditors who have a significant non-audit relationship with the company.

Social and Corporate Responsibility Issues

T. Rowe Price generally votes with a company`s management on social issues unless they have substantial economic implications for the company`s business and operations that have not been adequately addressed by management.

Monitoring and Resolving Conflicts of Interest

The Proxy Committee is also responsible for monitoring and resolving possible material conflicts between the interests of T. Rowe Price and those of its clients with respect to proxy voting. We believe that the potential for conflicts of interest is relatively low due to the client-focused nature of our investment management business. Nevertheless, we have adopted safeguards to ensure that our proxy voting is not influenced by interests other than those of our fund shareholders. While membership on the Proxy Committee is diverse, it does not include individuals whose primary duties relate to client relationship management, marketing, or sales. Since T. Rowe Price`s voting guidelines are predetermined by the Proxy Committee using recommendations from ISS, an independent third party, application of the T. Rowe Price guidelines by fund portfolio managers to vote fund proxies should in most instances adequately address any possible conflicts of interest. However, the Proxy Committee reviews all proxy votes that are inconsistent with T. Rowe Price guidelines to determine whether the portfolio manager`s voting rationale appears reasonable. The Proxy Committee also assesses whether any business or other relationships between T. Rowe Price and a portfolio company could have influenced an inconsistent vote on that company`s proxy. Issues raising possible conflicts of interest are referred to designated members of the Proxy Committee for immediate resolution prior to the time T. Rowe Price casts its vote . With respect to personal conflicts of interest, T. Rowe Price`s Code of Ethics and Conduct requires all employees to avoid placing themselves in a "compromising position" in which their interests may conflict with those of our clients and restricts their ability to engage in certain outside business activities. Portfolio managers or Proxy Committee members with a personal conflict of interest regarding a particular proxy vote must recuse themselves and not participate in the voting decisions with respect to that proxy.

Retirement and Spectrum Funds

The funds own shares in underlying T. Rowe Price funds. If an underlying T. Rowe Price fund has a shareholder meeting, the Retirement and Spectrum Funds normally would vote their shares in the underlying fund in the same proportion as the votes of the other shareholders of the underlying fund. This is known as "echo voting" and is designed to avoid any potential for a conflict of interest.

T. Rowe Price Proxy Vote Disclosure

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T. Rowe Price funds make broad disclosure of their proxy votes on troweprice.com . All funds, regardless of their fiscal years, must f ile with the SEC by August 31 , their proxy voting records for the most recent 12-month period ended June 30 .

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federal registration of shares

The funds` shares (except for Government Reserve Investment and Reserve Investment Funds) are registered for sale under the 1933 Act. Registration of the funds` shares are not required under any state law, but the funds are required to make certain filings with and pay fees to the states in order to sell their shares in the states.

legal counsel

Shearman & Sterling LLP , whose address is 599 Lexington Avenue, New York, New York 10022 , is legal counsel to the funds.

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RATINGS OF COMMERCIAL PAPER

Moody`s Investors Service, Inc. P-1 superior capacity for repayment. P-2 strong capacity for repayment. P-3 acceptable capacity for repayment of short-term promissory obligations.

Standard & Poor`s Corporation A-1 highest category, degree of safety regarding timely payment is strong. Those issues determined to possess extremely strong safety characteristics are denoted with a plus sign (+) designation. A-2 satisfactory capacity to pay principal and interest. A-3 adequate capacity for timely payment, but are more vulnerable to adverse effects of changes in circumstances than higher-rated issues. B and C speculative capacity to pay principal and interest.

Fitch IBCA, Inc. F-1+ exceptionally strong credit quality, strongest degree of assurance for timely payment. F-1 very strong credit quality. F-2 good credit quality, having a satisfactory degree of assurance for timely payment. F-3 fair credit quality, assurance for timely payment is adequate , but adverse changes could cause the securities to be rated below investment grade.

Moody`s Investors Service, Inc. The rating of Prime-1 is the highest commercial paper rating assigned by Moody`s. Among the factors considered by Moody`s in assigning ratings are the following: valuation of the management of the issuer; economic evaluation of the issuer`s industry or industries and an appraisal of speculative-type risks which may be inherent in certain areas; evaluation of the issuer`s products in relation to competition and customer acceptance; liquidity; amount and quality of long-term debt; trend of earnings over a period of 10 years; financial strength of the parent company and the relationships which exist with the issuer; and recognition by the management of obligations which may be present or may arise as a result of public interest questions and preparations to meet such obligations. These factors are all considered in determining whether the commercial paper is rated P1, P2, or P3.

Standard & Poor`s Corporation Commercial paper rated A (highest quality) by S&P has the following characteristics: liquidity ratios are adequate to meet cash requirements; long-term senior debt is rated "A" or better, although in some cases "BBB" credits may be allowed. The issuer has access to at least two additional channels of borrowing. Basic earnings and cash flow have an upward trend with allowance made for unusual circumstances. Typically, the issuer`s industry is well established and the issuer has a strong position within the industry. The reliability and quality of management are unquestioned. The relative strength or weakness of the above factors determines whether the issuer`s commercial paper is rated A1, A2, or A3.

Fitch IBCA, Inc. Fitch 1 — Highest grade Commercial paper assigned this rating is regarded as having the strongest degree of assurance for timely payment. Fitch 2 — Very good grade Issues assigned this rating reflect an assurance of timely payment only slightly less in degree than the strongest issues.

RATINGS OF CORPORATE and municipal DEBT SECURITIES

Moody`s Investors Service, Inc.

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 know n 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 characterizes 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 repayment of principal or payment of interest.

Ca — Bonds rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings.

C — Bonds rated C represent the lowest rated and have extremely poor prospects of attaining investment standing.

Standard & Poor`s Corporation

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, B, CCC, CC, C — Bonds rated BB, B, CCC, CC, and C 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 C 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.

D — In default.

Fitch IBCA, Inc.

AAA — High grade, broadly marketable, suitable for investment by trustees and fiduciary institutions, and liable to slight market fluctuation other than through changes in the money rate. The prime feature of a n 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 wide margin of protection through collateral, security, or direct lien on specific property. Sinking funds or voluntary reduction of debt by call or purchase are often factors, while guarantee or assumption by parties other than the original debtor may influence the 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.

A — Bonds rated A are considered to be investment grade and of high credit quality. The obligor`s ability to pay interest and repay principal is considered to be strong but may be more vulnerable to adverse changes in economic conditions and circumstances than bonds with higher ratings.

BBB — Bonds rated BBB are considered to be investment grade and of satisfactory credit quality. The obligor`s ability to pay interest and repay principal is considered to be adequate. Adverse changes in economic conditions and circumstances, however, are more likely to have adverse impact on these bonds and therefore impair timely payment. The likelihood that the ratings of these bonds will fall below investment grade is higher than for bonds with higher ratings.

BB, B, CCC, CC, and C — Bonds rated BB, B, CCC, CC, and C are regarded on balance as predominantly speculative with respect to the issuer`s capacity to pay interest and repay principal in accordance with the terms of the obligation for bond issues not in default. BB indicates the lowest degree of speculation and C the highest

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degree of speculation. The rating takes into consideration special features of the issue, its relationship to other obligations of the issuer, and the current and prospective financial condition and operating performance of the issuer.

RATINGS OF MUNICIPAL NOTES AND VARIABLE RATE SECURITIES

Moody`s Investors Service, Inc. VMIG1/MIG-1 the best quality. VMIG2/MIG-2 high quality, with margins of protection ample , though not so large as in the preceding group. VMIG3/MIG-3 favorable quality, with all security elements accounted for, but lacking the undeniable strength of the preceding grades. Market access for refinancing, in particular, is likely to be less well established. VMIG4/MIG-4 adequate quality , but there is specific risk.

Standard & Poor`s Corporation SP-1 very strong or strong capacity to pay principal and interest. Those issues determined to possess overwhelming safety characteristics will be given a plus (+) designation. SP-2 satisfactory capacity to pay interest and principal. SP-3 speculative capacity to pay principal and interest.

Fitch I BCA , Inc. F-1+ exceptionally strong credit quality, strongest degree of assurance for timely payment. F-1 very strong credit quality. F-2 good credit quality, having a satisfactory degree of assurance for timely payment. F-3 fair credit quality, assurance for timely payment is adequate , but adverse changes could cause the securities to be rated below investment grade.

Redemptions in Kind

The funds have filed a notice of election under Rule 18f-1 of the 1940 Act. This permits the funds to effect redemptions in kind and in cash as set forth in the funds` prospectuses.

In the unlikely event a shareholder were to receive an in-kind redemption of portfolio securities of the funds, it would be the responsibility of the shareholder to dispose of the securities. The shareholder would be at risk that the value of the securities would decline prior to their sale, that it would be difficult to sell the securities , and that brokerage fees could be incurred.

Issuance of Fund Shares for Securities

Transactions involving issuance of fund shares for securities or assets other than cash will be limited to (1) bona fide reorganizations; (2) statutory mergers; or (3) other acquisitions of portfolio securities that: (a) meet the investment objectives and policies of the funds; (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.

PART C

OTHER INFORMATION

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Item 2 2 . Exhibits

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(a)(1) Articles of Amendment and Restatement of T. Rowe Price International Funds, Inc., dated August 6 , 2001 (electronically filed with Amendment No. 70 dated February 27, 2004)

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(a)(2) Articles Supplementary of T. Rowe Price International Funds, Inc., on behalf of T. Rowe Price International Stock Fund — R Class, T. Rowe Price International Growth & Income Fund — Advisor Class, and T. Rowe Price International Growth & Income Fund — R Class, dated September 5, 2002 (electronically filed with Amendment No. 67 dated February 28, 2003 )

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(a)( 3 ) Articles Supplementary of T. Rowe Price International Funds, Inc., dated May 11, 2004

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(b) By-Laws of Registrant, as amended May 1, 1991, September 30, 1993, July 21, 1999, February 5, 2003 , and April 21, 2004

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(c)(1) Specimen Stock Certificate for T. Rowe Price International Bond Fund (filed with Amendment No. 10)

(c)(2) Specimen Stock Certificate for T. Rowe Price International Stock Fund (filed with Amendment No. 10)

(c)(3) Specimen Stock Certificate for T. Rowe Price International Discovery Fund (filed with Amendment No. 14)

(c)(4) Specimen Stock Certificate for T. Rowe Price European Stock Fund (filed with Amendment No. 18)

(c)(5) Specimen Stock Certificate for T. Rowe Price New Asia Fund (filed with Amendment No. 21)

(c)( 6 ) T. Rowe Price Japan, T. Rowe Price Short-Term Global Income, T. Rowe Price Latin America, T. Rowe Price Emerging Markets Bond, T. Rowe Price Emerging Markets Bond, T. Rowe Price Global Stock, and T. Rowe Price International Growth & Income Funds. See Article FIFTH, Capital Stock, Paragraphs (A)-(E) of the Articles of Amendment and Restatement electronically filed with Amendment No. 19, Article II, Shareholders, Sections 2.01-2.11 and Article VIII, Capital Stock, Sections 8.01- 8.06 of the Bylaws (filed with Amendment No. 19)

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(d)(1) Investment Management Agreement between Registrant and Rowe Price-Fleming International, Inc., on behalf of T. Rowe Price International Bond Fund, dated May 1, 1990 (electronically filed with Amendment No. 42 dated February 28, 1994)

(d)(2) Investment Management Agreement between Registrant and Rowe Price-Fleming International, Inc., on behalf of T. Rowe Price International Stock Fund, dated May 1, 1990 (electronically filed with Amendment No. 42 dated February 28, 1994)

(d)(3) Investment Management Agreement between Registrant and Rowe Price-Fleming International, Inc., on behalf of T. Rowe Price International Discovery Fund, dated May 1, 1991 (electronically filed with Amendment No. 42 dated February 28, 1994)

(d)(4) Investment Management Agreement between Registrant and Rowe Price-Fleming International, Inc., on behalf of T. Rowe Price European Stock Fund, dated May 1, 1990 (electronically filed with Amendment No. 42 dated February 28, 1994)

(d)(5) Investment Management Agreement between Registrant and Rowe Price-Fleming International, Inc., on behalf of T. Rowe Price New Asia Fund, dated May 1, 1991 (electronically filed with Amendment No. 42 dated February 28, 1994)

(d)( 6 ) Investment Management Agreement between Registrant and Rowe Price-Fleming International, Inc., on behalf of T. Rowe Price Japan Fund, dated November 6, 1991 (electronically filed with Amendment No. 42 dated February 28, 1994)

(d)( 7 ) Investment Management Agreement between Registrant and Rowe Price-Fleming International, Inc., on behalf of T. Rowe Price Latin America Fund, dated November 3, 1993 (electronically filed with Amendment No. 41 dated December 16, 1993)

(d)( 8 ) Investment Management Agreement between Registrant and Rowe Price-Fleming International, Inc., on behalf of T. Rowe Price Emerging Markets Bond Fund, dated November 2, 1994 (electronically filed with Amendment No. 44 dated December 22, 1994)

(d)( 9 ) Investment Management Agreement between Registrant and Rowe Price-Fleming International, Inc., on behalf of T. Rowe Price Emerging Markets Stock Fund, dated January 25, 1995 (electronically filed with Amendment No. 49 dated March 22, 1995)

(d)( 10 ) Investment Management Agreement between Registrant and Rowe Price-Fleming International, Inc., on behalf of T. Rowe Price Global Stock Fund, dated November 1, 1995 (electronically filed with Amendment No. 51 dated December 20, 1995)

(d)( 11 ) Investment Management Agreement between Registrant and Rowe Price-Fleming International, Inc., on behalf of T. Rowe Price International Growth & Income Fund, dated November 4, 1998 (electronically filed with Amendment No. 56 dated November 19, 1998)

(d)( 12 ) Investment Management Agreement between Registrant and Rowe Price-Fleming International, Inc., on behalf of T. Rowe Price Emerging Europe & Mediterranean Fund, dated April 19, 2000 (electronically filed with Amendment No. 62 dated April 28, 2000)

(d)( 13 ) Investment Subadvisory Agreement between T. Rowe Price International, Inc. and T. Rowe Price Global Investment Services Limited , on behalf of T. Rowe Price International Discovery and T. Rowe Price Japan Funds, dated May 15, 2003 (electronically filed with Amendment No. 69 dated June 30, 2003)

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(d)(14) Amended Investment Management Agreement between Registrant and T. Rowe Price Associates, Inc., dated August 1, 2004

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(e) Underwriting Agreement between Registrant and T. Rowe Price Investment Services, Inc., dated May 1, 2003 (electronically filed with Amendment No. 68 dated April 29, 2003)

(f) Inapplicable

(g) Custody Agreements

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(g)(1) Custodian Agreement between T. Rowe Price Funds and State Street Bank and Trust Company, dated January 28, 1998, as amended November 4, 1998, April 21, 1999, February 9, 2000, April 19, 2000, July 18, 2000, October 25, 2000, February 7, 2001, June 7, 2001, July 24, 2001 , April 24,

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2002 , July 24, 2002 , September 4, 2002, July 23, 2003 , October 22, 2003, February 4, 2004 , and September 20, 2004

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(g)(2) Global Custody Agreement between The Chase Manhattan Bank and T. Rowe Price Funds, dated January 3, 1994, as amended April 18, 1994, August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, July 23, 1997, September 3, 1997, October 29, 1997, December 15, 1998, October 6, 1999, February 9, 2000, April 19, 2000, July 18, 2000, October 25, 2000, July 24, 2001 , April 24, 2002 , July 24, 2002 , July 23, 200 3 , October 22, 2003, and September 20, 2004

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(h) Other Agreements

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(h)(1) Transfer Agency and Service Agreement between T. Rowe Price Services, Inc. and T. Rowe Price Funds, dated January 1, 200 4 , as amended February 4, 2004 , September 20, 2004 , and October 20 , 2004

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(h)(2) Agreement between T. Rowe Price Associates, Inc. and T. Rowe Price Funds for Fund Accounting Services, dated January 1, 200 4 , as amended February 4, 2004 , September 20, 2004 , and October 20 , 2004

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(h)(3) Agreement between T. Rowe Price Retirement Plan Services, Inc. and the T. Rowe Price Funds, dated January 1, 200 4 , as amended February 4, 2004 , September 20, 2004 , and October 20 , 2004

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(i) Inapplicable

(j) Other Opinions

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(j)(1) Consent of Independent Registered Public Accounting Firm

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(j)(2) Opinion of Counsel

(j) ( 3 ) Power of Attorney

(j) ( 4 ) Certificate of Vice President pursuant to Rule 306 of Regulation S-T for the T. Rowe Price International Stock Fund

(k) Inapplicable

(l) Inapplicable

(m)(1) Rule 12b-1 Plan for T. Rowe Price International Stock Fund — Advisor Class dated May 1, 2003 (electronically filed with Amendment No. 68 dated April 29, 2003)

(m)(2) Rule 12b-1 Plan for T. Rowe Price International Bond Fund — Advisor Class dated May 1, 2003 (electronically filed with Amendment No. 68 dated April 29, 2003)

(m)(3) Rule 12b-1 Plan for T. Rowe Price International Stock Fund — R Class dated May 1, 2003 (electronically filed with Amendment No. 68 dated April 29, 2003)

(m)(4) Rule 12b-1 Plan for T. Rowe Price International Growth & Income Fund — Advisor Class dated May 1, 2003 (electronically filed with Amendment No. 68 dated April 29, 2003)

(m)(5) Rule 12b-1 Plan for T. Rowe Price International Growth & Income Fund — R C lass dated May 1, 2003 (electronically filed with Amendment No. 68 dated April 29, 2003)

(m)( 6 ) Form of Selling Agreement to be used by T. Rowe Price Investment Services, Inc. (electronically filed with Amendment No. 60 dated March 27, 2000)

(n)(1) Rule 18f-3 Plan for T. Rowe Price International Stock Fund — Advisor Class dated February 9, 2000 (electronically filed with Amendment No. 60 dated March 27, 2000)

(n)(2) Rule 18f-3 Plan for T. Rowe Price International Bond Fund — Advisor Class dated February 9, 2000 (electronically filed with Amendment No. 60 dated March 27, 2000)

(n)(3) Rule 18f-3 Plan for T. Rowe Price International Stock Fund — R Class dated July 24, 2002 (electronically filed with Amendment No. 66 dated September 3, 2002)

(n)(4) Rule 18f-3 Plan for T. Rowe Price International Growth & Income Fund — Advisor Class and R Class dated July 24, 2002 (electronically filed with Amendment No. 66 dated September 3, 2002)

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(p) Code of Ethics and Conduct , dated February 1, 2005

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Item 2 3 . Persons Controlled by or Under Common Control With Registrant

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None

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Item 2 4 . Indemnification

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The Registrant maintains comprehensive Errors and Omissions and Officers and Directors insurance policies written by ICI Mutual. These policies provide coverage for T. Rowe Price

PAGE 393

Associates, Inc. ("Manager"), and its subsidiaries and affiliates as listed in Item 26 of this Registration Statement (with the exception of the T. Rowe Price Associates Foundation, Inc.), and all other investment companies in the T. Rowe Price family of mutual funds. In addition to the corporate insureds, the policies also cover the officers, directors, and employees of the Manager, its subsidiaries, and affiliates. The premium is allocated among the named corporate insureds in accordance with the provisions of Rule 17d 1(d)(7) under the Investment Company Act of 1940.

General. The Charter of the Corporation provides that to the fullest extent permitted by Maryland or federal law, no director or officer of the Corporation shall be personally liable to the Corporation or the holders of Shares for money damages and each director and officer shall be indemnified by the Corporation; provided, however , that nothing therein shall be deemed to protect any director or officer of the Corporation against any liability to the Corporation of the holders of Shares to which such director or officer would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

Article X, Section 10.01 of the Registrant's By-Laws provides as follows:

Section 10.01. Indemnification and Payment of Expenses in Advance : The Corporation shall indemnify any individual ("Indemnitee") who is a present or former director, officer, employee, or agent of the Corporation, or who is or has been serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, who, by reason of his position was, is, or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (hereinafter collectively referred to as a "Proceeding") against any judgments, penalties, fines, settlements, and reasonable expenses (including attorneys' fees) incurred by such Indemnitee in connection with any Proceeding, to the fullest extent that such indemnification may be lawful under Maryland law. The Corporation shall pay any reasonable expenses so incurred by such Indemnitee in defending a Proceeding in advance of the final disposition thereof to the fullest extent that such advance payment may be lawful under Maryland law. Subject to any applicable limitations and requirements set forth in the Corporation's Articles of Incorporation and in these By-Laws, any payment of indemnification or advance of expenses shall be made in accordance with the procedures set forth in Maryland law.

Notwithstanding the foregoing, nothing herein shall protect or purport to protect any Indemnitee against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office ("Disabling Conduct").

Anything in this Article X to the contrary notwithstanding, no indemnification shall be made by the Corporation to any Indemnitee unless:

(a) there is a final decision on the merits by a court or other body before whom the Proceeding was brought that the Indemnitee was not liable by reason of Disabling Conduct; or

(b) in the absence of such a decision, there is a reasonable determination, based upon a review of the facts, that the Indemnitee was not liable by reason of Disabling Conduct, which determination shall be made by:

(i) the vote of a majority of a quorum of directors who are neither "interested persons" of the Corporation as defined in Section 2(a)(19) of the Investment Company Act, nor parties to the Proceeding; or

(ii) an independent legal counsel in a written opinion.

Anything in this Article X to the contrary notwithstanding, any advance of expenses by the Corporation to any Indemnitee shall be made only upon the undertaking by such Indemnitee to repay the advance unless it is ultimately determined that such Indemnitee is entitled to indemnification as above provided, and only if one of the following conditions is met:

(a) the Indemnitee provides a security for his undertaking; or

(b) the Corporation shall be insured against losses arising by reason of any lawful advances; or

(c) there is a determination, based on a review of readily available facts, that there is reason to believe that the Indemnitee will ultimately be found entitled to indemnification, which determination shall be made by:

(i) a majority of a quorum of directors who are neither "interested persons" of the Corporation as defined in Section 2(a)(19) of the Investment Company Act, nor parties to the Proceeding; or

PAGE 395

(ii) an independent legal counsel in a written opinion.

Section 10.02. Insurance of Officers, Directors, Employees, and Agents. To the fullest extent permitted by applicable Maryland law and by Section 17(h) of the Investment Company Act of 1940, as from time to time amended, the Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or who is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, 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.

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Item 2 5 . Business and Other Connections of Investment Manager

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T. Rowe Price International, Inc. ( "T. Rowe Price International" ) , a wholly owned subsidiary of T RP Finance , Inc. , was incorporated in Maryland in 1979 and provides investment counsel service with respect to foreign securities for institutional investors . In addition to managing private counsel client accounts, T. Rowe Price International also sponsors and serves as adviser and subadviser to U.S. and foreign registered investment companies which invest in foreign securities, serves as general partner of T. Rowe Price 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 International, which has offices in Baltimore, London, Hong Kong, Singapore, Argentina and Paris, is registered as an investment adviser under the Investment Advisers Act of 1940,

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and is also registered with the Financial Service Authority ( "FSA" ) in the United Kingdom and the Securities and Futures Commission of Hong Kong.

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T. Rowe Price Global Investment Services Limited ( "Global Investment Services" ) an English c orporation, was incorporated in 2000, and a wholly owned subsidiary of T. Rowe Price Group , Inc . Global Investment Services provides investment management, sales, and client servicing to non-U.S. institutional and retail investors . Global Investment Services is an SEC registered investment adviser under the Investment Advisers Act of 1940 and is also registered with the U.K. Financial Services Authority.

T. Rowe Price Global Asset Management Limited ( "Global Asset Management" ) , an English corporation, was incorporated in 1999, and is a wholly owned subsidiary of T. Rowe Price Group, Inc. Global Asset Management is an SEC registered investment adviser under the Investment Advisers Act of 1940. Global Asset Management is also registered with the U.K. Financial S ervices Authority and provides investment management services to Japanese investment trusts and other accounts for institutional investors in Japan pursuant to one or more delegation agreements entered into between Daiwa SB Investments, Ltd. and Global Asset Management or other advisory agreements.

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JAMES S. RIEPE, Director , T. Rowe Price International, Inc. ; Director and Vice President, T. Rowe Price Associates, Inc . ; Vice Chairman of the Board, Director, and Vice President , T. Rowe Price Group , Inc.; Chairman of the Board and Director, T. Rowe Price Global Asset Management Limited, T. Rowe Price Global Investment Services Limited, T. Rowe Price Investment Services, Inc., T. Rowe Price Retirement Plan Services, Inc. , and T. Rowe Price Services, Inc. ; Chairman of the Board, Director, President , and Trust Officer, T. Rowe Price Trust Company.

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GEORGE A. ROCHE, Director, T. Rowe Price International, Inc. and T. Rowe Price Retirement Plan Services, Inc. ; Chairman of the Board, Director, and President, T. Rowe Price Group , Inc. ; Director and President, T. Rowe Price Associates, Inc.

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BRIAN C. ROGERS, Chief Investment Officer, Director, and Vice President, T. Rowe Price Associates, Inc. and T. Rowe Price Group, Inc. ; Director and Vice President, T. Rowe Price Trust Company.

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DAVID J.L. WARREN, Chief Executive Officer, Director , and President , T. Rowe Price International, Inc. ; Director and Vice President, T. Rowe Price Associates, Inc. ; Vice President, T. Rowe Price Group, Inc.; Director, T. Rowe Price Global Asset Management Limited and T. Rowe Price Global Investment Services Limited.

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With the exception of Chiho Amano , Carol A. Bambrough, M. Kamran Baig, Toby Baker , Carol A. Bambrough, Mark C.J. Bickford-Smith, Adrian J. Bourne, Jose Costa Buck, Russell Burdett, Paul Cable, Ann B. Cranmer, Dawn A. Day, Julio A. Delgado, Frederic Denjoy, Trevor Paul Denton, Vanessa Dekker, Frances Dydasco, Mark J.T. Edwards, Jeremy Ellis, Tara L. Ewens, Calum Ferguson, Jeremy M. Fisher, M. Campbell Gunn, Ada Harte, Pascal Hautcoeur, Michael Lambe, Laurence O. Linklater, Anh Lu, J. Amanda Maskell, Andi McCann, Gonzalo Px87 ngaro, Jonathan M.A. Parr, Sally Patterson, Richard E. Presley, Robert A. Revel-Chion, S. Leigh Robertson, Christopher J. Rothery, Federico Santilli, James B.M. Seddon, John Carl A. Sherman, Angela Sinn, Neil Smith, David Stanley, William W. Strickland, Jr., Miki Takeyama, Ju Yen Tan, Dean Tenerelli, Justin Thomson, Christine To, Connie Tse, Dale E. West, Clive Williams, Susan A. Woodstock, and Christopher Yip, all officers of T. Rowe Price International are officers and/or employees of Price Associates and may also be officers and/or directors of one or more subsidiaries of Price Associates and/or one or more of the registered investment companies for which Price Associates or T. Rowe Price International serves as investment adviser.

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See also "Management of the Funds," in the Registrant's Statement of Additional Information.

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Item 2 6 . Principal Underwriters

</R>

(a) The principal underwriter for the Registrant is Investment Services. Investment Services acts as the principal underwriter for the T. Rowe Price family of mutual funds, including the following investment companies: T. Rowe Price Growth Stock Fund, Inc., T. Rowe Price New Horizons Fund, Inc., T. Rowe Price New Era Fund, Inc., T. Rowe Price New Income Fund, Inc., T. Rowe Price Prime Reserve Fund, Inc., T. Rowe Price Tax-Free Income Fund, Inc., T. Rowe Price Tax-Exempt Money Fund, Inc., T. Rowe Price International Funds, Inc., T. Rowe Price Growth & Income Fund, Inc., T. Rowe Price Tax-Free Short-Intermediate Fund, Inc., T. Rowe Price Short-Term Bond Fund, Inc., T. Rowe Price High Yield Fund, Inc., T. Rowe Price Tax-Free High Yield Fund, Inc., T. Rowe Price New America Growth Fund, T. Rowe Price Equity Income Fund, T. Rowe Price GNMA Fund, T. Rowe Price Capital Appreciation Fund, T. Rowe Price California Tax Free Income Trust, T. Rowe Price State Tax-Free Income Trust, T. Rowe Price Science & Technology Fund, Inc., T. Rowe Price Small-Cap Value Fund, Inc., T. Rowe Price 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 Mid Cap Growth

Fund, Inc., T. Rowe Price Small Cap Stock Fund, Inc., T. Rowe Price Tax Free Intermediate Bond Fund, Inc., T. Rowe Price Dividend Growth Fund, Inc., T. Rowe Price Blue Chip Growth Fund, Inc., T. Rowe Price Summit Funds, Inc., T. Rowe Price Summit Municipal Funds, Inc., T. Rowe Price Equity Series, Inc., T. Rowe Price International Series, Inc., T. Rowe Price Fixed Income Series, Inc., T. Rowe Price Personal Strategy Funds, Inc., T. Rowe Price Value Fund, Inc., T. Rowe Price Capital Opportunity Fund, Inc., T. Rowe Price Corporate Income Fund, Inc., T. Rowe Price Health Sciences Fund, Inc., T. Rowe Price Mid Cap Value Fund, Inc., T. Rowe Price Institutional Equity Funds, Inc., T. Rowe Price Financial Services Fund, Inc., T. Rowe Price Diversified Small Cap Growth Fund, Inc., T. Rowe Price Tax Efficient Funds, Inc., T. Rowe Price Reserve Investment Funds, Inc., T. Rowe Price Media & Telecommunications Fund, Inc., T. Rowe Price Real Estate Fund, Inc., T. Rowe Price Developing Technologies Fund, Inc., T. Rowe Price Global Technology Fund, Inc., T. Rowe Price U.S. Bond Index Fund, Inc., T. Rowe Price International Index Fund, Inc. , T. Rowe Price Institutional Income Funds, Inc. , T. Rowe Price Retirement Funds, Inc. , T. Rowe Price Inflation Protected Bond Fund, Inc. , and T. Rowe Price Diversified Mid-Cap Growth Fund, Inc.

Investment Services is a wholly owned subsidiary of T. Rowe Price Associates, Inc., is registered as a broker-dealer under the Securities Exchange Act of 1934 , and is a member of the National Association of Securities Dealers, Inc. Investment Services has been formed for the limited purpose of distributing the shares of the Price Funds and will not engage in the general securities business. Investment Services will not receive any commissions or other compensation for acting as principal underwriter.

(b) The address of each of the directors and officers of Investment Services listed below is 100 East Pratt Street, Baltimore, Maryland 21202. <R>

Name	Positions and Offices With Underwriter	Positions and Offices With Registrant
James S. Riepe	Chairman of the Board and Director	Chairman of the Board
Edward C. Bernard	President and Director	None
Henry H. Hopkins	Vice President and Director	Vice President
Wayne D. O`Melia	Vice President and Director	None
Charles E. Vieth	Vice President and Director	None
Raymond Ahn	Vice President	None
Julia M. Andrews	Vice President	None
Jerry App e l baum	Vice President	None
Patricia M. Archer	Vice President	None
Stephen P. Ban	Vice President	None
Steven J. Banks	Vice President	None
John T. Bielski	Vice President	None
John H. Boyd	Vice President	None
Renee Q. Boyd	Vice President	None
Darrell N. Braman	Vice President	None
Ronae M. Brock	Vice President	None
Meredith C. Callanan	Vice President	None
John H. Cammack	Vice President	None
Susan R. Camp	Vice President	None
Ann R. Campbell	Vice President	None
Christine M. Carolan	Vice President	None
Joseph A. Carrier	Vice President	None
James C. Carville	Vice President	None
Renee L. Chapman	Vice President	None
Laura H. Chasney	Vice President	None
Renee M. Christoff	Vice President	None
Jerome A. Clark	Vice President	None
Todd M. Cleary	Vice President	None
Garry C. Cosnett	Vice President	None
Linsley G. Craig	Vice President	None
Joseph A. Crumbling	Vice President	None
Christine S. Fahlund	Vice President	None
Forrest R. Foss	Vice President	None
Bruce S. Fulton	Vice President	None
Thomas A. Gannon	Vice President	None
John R. Gilner	V ice President	None
John Halaby	Vice President	None
Douglas E. Harrison	Vice President	None
David J. Healy	Vice President	None
Joanne M. Healy	Vice President	None
Walter J. Helmlinger	Vice President	None
Duane E. Higdon	Vice President	None
Carole Hofmeister	Vice President	None
David A. Hueser	Vice President	None
Christopher A. Jarmush	Vice President	None
Thomas E. Kazmierczak, Jr.	Vice President	None
Cynthia G . Knowlton	Vice President	None
Steven A. Larson	Vice President	None
Cynthia W. LaRue	Vice President	None
Gayle A. Lomax	Vice President	None
Lois Lynch	Vice President	None
Gayatri Malik	Vice President	None
Sarah McCafferty	Vice President	None
Daniel M. Middelton	Vice President	None
Mark J. Mitchell	Vice President	None
George A. Murnaghan	Vice President	None
Steven E. Norwitz	Vice President	None
Edmund M. Notzon III	Vice President	None
Barbara A. O`Connor	Vice President	None
David Oestreicher	Vice President	None
Christopher J. Parmigiani	Vice President	None
Kathleen G. Polk	Vice President	None
Pamela D. Preston	Vice President	None
Suzanne J. Ricklin	Vice President	None
George D. Riedel	Vice President	None
John R. Rockwell	Vice President	None
Christopher J. Rohan	Vice President	None
Kenneth J. Rutherford	Vice President	None
Alexander Savich	Vice President	None
Kristin E. Seeberger	Vice President	None
John W. Seufert	Vice President	None
Scott L. Sherman	Vice President	None
Donna B. Singer	Vice President	None
Scott Such	Vice President	None
Jerome Tuccille	Vice President	None
Regina M. Watson	Vice President	None
Natalie C. Widdowson	Vice President	None
Timothy S. Dignan	Treasurer and Vice President	None
Barbara A. Van Horn	Secretary	None
Shane Baldino	Assistant Vice President	None
S. Olivia Barbee	Assistant Vice President	None
Richard J. Barna	Assistant Vice President	None
Catherine L. Berkenkemper	Assistant Vice President	None
Timothy P. Boia	Assistant Vice President	None
Martin P. Brown	Assistant Vice President	None
Sheila P. Callahan	Assistant Vice President	None
Patricia M. Cannon	Assistant Vice President	None
Michele L. Cassell	Assistant Vice President	None
Jodi A . Casson	Assistant Vice President	None
Cynthia M. Ciangio	Assistant Vice President	None
Peter A. DeLibro	Assistant Vice President	None
Jon D . Dry	Assistant Vice President	None
LeSales S. Dunworth	Assistant Vice President	None
Cheryl L. Emory	Assistant Vice President	None
John A. Galateria	Assistant Vice President	None
Jason L. Gounaris	Assistant Vice President	None
Kristen L. Heerema	Assistant Vice President	None
Keller L. Hoak	Assistant Vice President	None
Shawn M. Isaacson	Assistant Vice President	None
Daniel J. Jackson	Assistant Vice President	None
Maureen Kehoe	Assistant Vice President	None
Suzanne M. Knoll	Assistant Vice President	None
Kathleen A. Kotik	Assistant Vice President	None
Jennifer A. LaPorte	Assistant Vice President	None
Kimberly B. Lechner	Assistant Vice President	None
Patricia B . Lippert	Assistant Vice President	Secretary
James R. Longenecker	Assistant Vice President	None
Kimberly W. Madore	Assistant Vice President	None
Karen M. Magness	Assistant Vice President	None
Amy L. Marker	Assistant Vice President	None
Charlotte L. Matthews	Assistant Vice President	None
John M. McCareins Jr.	Assistant Vice President	None
John T. McGuigan	Assistant Vice President	None
Thomas R. Morelli	Assistant Vice President	None
Dana P. Morgan	Assistant Vice President	None
Paul Musante	Assistant Vice President	None
Clark P. Neel	Assistant Vice President	None
Danielle Nicholson Smith	Assistant Vice President	None
Richard J. Osikowicz	Assistant Vice President	None
Kristine A. Paden	Assistant Vice President	None
Joseph F. Parlapiano	Assistant Vice President	None
JeanneMarie B. Patella	Assistant Vice President	None
Yani A. Peyton	Assistant Vice President	None
Gregory L. Phillips	Assistant Vice President	None
Naomi S. Prosha n	Assistant Vice President	None
Seamus A. Ray	Assistant Vice President	None
Shawn D. Reagan	Assistant Vice President	None
Jennifer L. Richardson	Assistant Vice President	None
Kristin M. Rodriguez	Assistant Vice President	None
Ramon D. Rodriguez	Assistant Vice President	None
Val E. Seaberg	Assistant Vice President	None
Deborah D. Seidel	Assistant Vice President	None
Kevin C. Shea	Assistant Vice President	None
Thomas L. Siedell	Assistant Vice President	None
Mark F. Skirbe	Assistant Vice President	None
John A. Stranovsky	Assistant Vice President	None
Jonathan L. Stricker	Assistant Vice President	None
Brian Sullam	Assistant Vice President	None
Ralph E. Vanlow	Assistant Vice President	None
Judith B. Ward	Assistant Vice President	None
William R. Weker, Jr.	Assistant Vice President	None
James J. Whitaker	Assistant Vice President	None
Teresa F. Whitaker	Assistant Vice President	None
Mary G. Williams	Assistant Vice President	None
James Zurad	Assistant Vice President	None

</R>

PAGE 399

PAGE 401

(c) Not applicable. Investment Services will not receive any compensation with respect to its activities as underwriter for the Price Funds.

<R>

</R>

<R>

Item 2 7 . Location of Accounts and Records

</R>

All accounts, books, and other documents required to be maintained by the Registrant under Section 31(a) of the Investment Company Act of 1940 and the rules thereunder will be maintained by the Registrant at its offices at 100 East Pratt Street, Baltimore, Maryland 21202. Transfer, dividend disbursing, and shareholder service activities are performed by T. Rowe Price Services, Inc., at 4515 Painters Mill Road, Owings Mills, Maryland 21117.

Custodian activities for the Registrant are performed at State Street Bank and Trust Company's Service Center (State Street South), 1776 Heritage Drive, Quincy, Massachusetts 02171.

Custody of Registrant`s portfolio securities which are purchased outside the United States is maintained by JPMorgan Chase Bank , London, in its foreign branches , with other banks or foreign depositories . JPMorgan Chase Bank , London, is located at Woolgate House, Coleman Street, London EC2P 2HD England.

<R>

Item 2 8 . Management Services

</R>

Registrant is not a party to any management related service contract, other than as set forth in the Prospectus or Statement of Additional Information.

<R>

Item 29 . Undertakings

</R>

(a) Not applicable

PAGE 403

<R>

Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant certifies that it meets all of the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Baltimore, State of Maryland, this February 25, 2005 .

</R>

T. Rowe Price International Funds, Inc.

<R>

/s/James S. Riepe
By: James S. Riepe
Chairman of the Board

</R>

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/James S. Riepe James S. Riepe	Chairman of the Board (Chief Executive Officer)	February 25, 2005
/s/Joseph A. Carrier Joseph A. Carrier	Treasurer (Chief Financial Officer)	February 25, 2005
* Anthony W. Deering	Director	February 25, 2005
* Donald W. Dick, Jr.	Director	February 25, 2005
* David K. Fagin	Director	February 25, 2005
* Karen N. Horn	Director	February 25, 2005
* F. Pierce Linaweaver	Director	February 25, 2005
* John G. Schreiber	Director	February 25, 2005
*/s/Henry H. Hopkins Henry H. Hopkins	Vice President and Attorney In Fact	February 25, 2005

Microsoft Word 11.0.6113;

T. ROWE PRICE INTERNATIONAL FUNDS, INC.

ARTICLES SUPPLEMENTARYCLASSIFYING
AND RECLASSIFYING AUTHORIZED STOCK

T. Rowe Price International Funds, Inc., a Maryland corporation, having its principal office in Baltimore City, Maryland (hereinafter called the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST: Pursuant to authority expressly vested in the Board of Directors of the Corporation by Article Fifth of the Charter of the Corporation, the Board of Directors has duly reclassified the series and classes of Common Stock set forth in the column "Old Series and Classes" below by changing the name of such series and classes of Common Stock to the name set forth in the column "New Series and Classes" below. Each of such series and classes is hereinafter referred to as an "Existing Class" and collectively as the "Existing Classes."

------------------------------------------------------------ ---------------------------------------------------------
OLD NAME OF SERIES AND CLASSESNEW NAME OF SERIES AND CLASSES
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price International Stock Fund T. Rowe Price International Stock Fund - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price International Bond Fund T. Rowe Price International Bond Fund - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price International Discovery Fund T. Rowe Price International Discovery Fund - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price European Stock Fund T. Rowe Price European Stock Fund - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price New Asia Fund T. Rowe Price New Asia Fund - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price Japan Fund T. Rowe Price Japan Fund - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price Latin America Fund T. Rowe Price Latin America Fund - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price Emerging Markets Bond Fund T. Rowe Price Emerging Markets Bond Fund - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price Emerging Markets Stock Fund T. Rowe Price Emerging Markets Stock Fund - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price Global Stock Fund T. Rowe Price Global Stock Fund - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price International Growth & Income Fund T. Rowe Price International Growth & Income Fund - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price International Stock Fund - Advisor Class T. Rowe Price International Stock Fund - Advisor Class
- 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price International Bond Fund - Advisor Class T. Rowe Price International Bond Fund - Advisor Class -
1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price Emerging Europe & Mediterranean Fund T. Rowe Price Emerging Europe & Mediterranean Fund - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price International Stock Fund - R Class T. Rowe Price International Stock Fund - R Class - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price International Growth & Income Fund - Advisor T. Rowe Price International Growth & Income Fund -
Class Advisor Class - 1
------------------------------------------------------------ ---------------------------------------------------------
T. Rowe Price International Growth & Income Fund - R Class T. Rowe Price International Growth & Income Fund - R
Class - 1
------------------------------------------------------------ ---------------------------------------------------------

SECOND: Pursuant to authority expressly vested in the Board of Directors of the Corporation by Article Fifth of the Charter of the Corporation, the Board of Directors has duly classified a number of shares of its unissued Common Stock (determined in connection with the FOURTH paragraph below) into 17 new series and classes of Common Stock to be designated as set forth below. Each of such series and classes is hereinafter referred to as a "New Class" and collectively as the "New Classes."


         T. Rowe Price International Stock Fund
         T. Rowe Price International Bond Fund
         T. Rowe Price International Discovery Fund
         T. Rowe Price European Stock Fund
         T. Rowe Price New Asia Fund
         T. Rowe Price Japan Fund
         T. Rowe Price Latin America Fund
         T. Rowe Price Emerging Markets Bond Fund
         T. Rowe Price Emerging Markets Stock Fund
         T. Rowe Price Global Stock Fund
         T. Rowe Price International Growth & Income Fund
         T. Rowe Price International Stock Fund - Advisor Class
         T. Rowe Price International Bond Fund - Advisor Class
         T. Rowe Price Emerging Europe & Mediterranean Fund
         T. Rowe Price International Stock Fund - R Class
         T. Rowe Price International Growth & Income Fund - Advisor Class
         T. Rowe Price International Growth & Income Fund - R Class

THIRD: The Corporation has previously duly classified a number of shares of its unissued Common Stock into a series of Common Stock designated as the Global Bond Fund pursuant to Articles Supplementary of the Corporation as filed with the SDAT on October 15, 1990. No shares of such series are issued or outstanding. Pursuant to authority expressly vested in the Board of Directors of the Corporation by Article Fifth of the Charter of the Corporation, the Board of Directors has duly reclassified the series of Common Stock designated as the Global Bond Fund into shares of Common Stock.

FOURTH: After giving effect to the foregoing classification and reclassification, the Board of Directors has heretofore duly divided and classified an aggregate of 2,000,000,000 shares of the unissued Common Stock of the Corporation into the following series and classes on the dates indicated in the parentheses following the names of the respective series and classes:


T. Rowe Price International Stock Fund - 1 (September 13, 1979 and May 11,2004)
T. Rowe Price International Bond Fund - 1 (July 15, 1986 and May 11, 2004)
T. Rowe Price International Discovery Fund - 1 (October 31, 1988 and May 11, 2004)
T. Rowe Price European Stock Fund - 1 (January 5, 1990 and May 11, 2004)
T. Rowe Price New Asia Fund - 1 (July 18, 1990 and May 11, 2004)
T. Rowe Price Japan Fund - 1 (October 18, 1991 and May 11, 2004)
T. Rowe Price Latin America Fund - 1 (November 4, 1993 and May 11, 2004)
T. Rowe Price Emerging Markets Bond Fund - 1 (November 3, 1994 and May 11, 2004)
T. Rowe Price Emerging Markets Stock Fund - 1 (January 26, 1995 and May 11, 2004)
T. Rowe Price Global Stock Fund - 1 (October 11, 1995 and May 11, 2004)
T. Rowe Price International Growth & Income Fund - 1 (December 1, 1998 and May 11, 2004)
T. Rowe Price International Stock Fund-Advisor Class - 1 (March 24, 2000 and May 11, 2004)
T. Rowe Price International Bond Fund-Advisor Class - 1 (March 24, 2000 and May 11, 2004)
T. Rowe Price Emerging Europe & Mediterranean Fund - 1 (April 28, 2000 and May 11, 2004)
T. Rowe Price International Stock Fund-R Class - 1 (September 6, 2002 and May 11, 2004)
T. Rowe Price International Growth & Income Fund-Advisor Class - 1 (September 6, 2002 and May 11, 2004)
T. Rowe Price International Growth & Income Fund-R Class - 1 (September 6, 2002 and May 11, 2004)
T. Rowe Price International Stock Fund (May 11, 2004)
T. Rowe Price International Bond Fund (May 11, 2004)
T. Rowe Price International Discovery Fund (May 11, 2004)
T. Rowe Price European Stock Fund (May 11, 2004)
T. Rowe Price New Asia Fund (May 11, 2004)
T. Rowe Price Japan Fund (May 11, 2004)
T. Rowe Price Latin America Fund (May 11, 2004)
T. Rowe Price Emerging Markets Bond Fund (May 11, 2004)
T. Rowe Price Emerging Markets Stock Fund (May 11, 2004)
T. Rowe Price Global Stock Fund (May 11, 2004)
T. Rowe Price International Growth & Income Fund (May 11, 2004)
T. Rowe Price International Stock Fund - Advisor Class (May 11, 2004)
T. Rowe Price International Bond Fund - Advisor Class (May 11, 2004)
T. Rowe Price Emerging Europe & Mediterranean Fund (May 11, 2004)
T. Rowe Price International Stock Fund - R Class (May 11, 2004)
T. Rowe Price International Growth & Income Fund-Advisor Class (May 11, 2004)
T. Rowe Price International Growth & Income Fund - R Class (May 11, 2004)

Each such series and/or class shall consist, until further changed, of the lesser of (x) 2,000,000,000 shares or (y) the number of shares that could be issued by issuing all of the shares of any series and/or class currently or hereafter classified less the total number of shares then issued and outstanding in all of such series and/or class. Except as set forth below, all shares of each series have the powers, preferences, other special rights, qualifications, restrictions, and limitations set forth in the Charter. The Board of Directors also has provided for the issuance of the shares of each such series.

FIFTH: The following is a description of the preferences, conversion and other rights, powers, restrictions, limitations as to dividends, qualifications and terms and conditions of redemption of each series or class of Common Stock of each New Class and any other class or series of Common Stock established after the date hereof. Except as set forth in this Article FIFTH below, all shares of each series of each New Class and any other class or series of Common Stock established after the date hereof shall have the powers, preferences, other special rights, qualifications, restrictions, and limitations set forth in the Charter.

(a) Expenses uniquely related to the shares of Common Stock of the T. Rowe Price International Stock Fund - Advisor Class, T. Rowe Price International Bond Fund - Advisor Class, T. Rowe Price International Stock Fund - R Class, T. Rowe Price International Growth & Income Fund - Advisor Class and T. Rowe Price International Growth & Income Fund - R Class (including, without limitation, distribution expenses under a Rule 12b-1 plan and administrative expenses under an administration or service agreement, plan or other arrangement, however designated) shall be borne by that Class, and shall be appropriately reflected (in the manner determined by the Board of Directors) in the net asset value, dividends, distribution and liquidation rights of the shares of that Class, all as the Board of Directors may determine by resolution from time to time, and shall be described in the prospectus or statement of additional information for such Class as and to the extent required by the Investment Company Act of 1940, as amended, and the rules and regulations thereunder.

(b) As to any matter with respect to which a separate vote of any Class is required by the Investment Company Act (including, without limitation, approval of any plan, agreement or other arrangement referred to in subsection (1) above), such requirement as to a separate vote by that Class shall apply in lieu of any voting requirements established by the Maryland General Corporation Law. As to any matter which does not affect the interest of the T. Rowe Price International Stock Fund - Advisor Class, T. Rowe Price International Bond Fund - Advisor Class, T. Rowe Price International Stock Fund - R Class, T. Rowe Price International Growth & Income Fund - Advisor Class and T. Rowe Price International Growth & Income Fund - R Class, only the holders of shares of the affected Class or Classes shall be entitled to vote.

(c) With respect to all shares of each series of each New Class, the following clause shall apply in lieu of paragraph (B), clause (vii) of Article SEVENTH of the Charter:

"Shares of each New Class shall be redeemed at their net asset value determined as set forth in paragraph (C) of this Article SEVENTH as of such time as the Board of Directors shall have theretofore prescribed by resolution, less such redemption fee or sales charge, if any, as may be established by the Board of Directors in its sole discretion and disclosed in the current Prospectus or Statement of Additional Information for the Corporation. In the absence of such resolution, the redemption price of shares deposited shall be the net asset value of such shares next determined as set forth in paragraph (C) of this Article SEVENTH after receipt of such application."

SIXTH: The shares aforesaid have been duly classified and reclassified by the Board of Directors pursuant to authority and power contained in the Charter of the Corporation or as expressly permitted by Section 2-605 of the Maryland General Corporation Law to be made without action by the stockholders. These Articles Supplementary do not increase the aggregate authorized capital stock of the Corporation.

IN WITNESS WHEREOF, T. Rowe Price International Funds, Inc. has caused these Articles to be signed in its name and on its behalf by its Vice President and witnessed by its Secretary on May 11, 2004.

WITNESS:                                           T. ROWE PRICE INTERNATIONAL FUNDS, INC.


/s/ Patricia B. Lippert                              By: /s/ Henry H. Hopkins
Patricia B. Lippert, Secretary                     Henry H. Hopkins, Vice President

THE UNDERSIGNED, Vice President of T. Rowe Price International Funds, Inc., who executed on behalf of the Corporation Articles Supplementary of which this Certificate is made a part, hereby acknowledges in the name and on behalf of said Corporation the foregoing Articles Supplementary to be the corporate act of said Corporation and hereby certifies that the matters and facts set forth herein with respect to the authorization and approval thereof are true in all material respects under the penalties of perjury.

                                                     /s/ Henry H. Hopkins
                                                     Henry H. Hopkins, Vice President

Agreements\Articles Supplementary\ArtSupp9INT.doc

BY-LAWS

T. ROWE PRICE INTERNATIONAL FUNDS, INC.

AS AMENDED:

MAY 1, 1991

SEPTEMBER 30, 1993

JULY 21, 1999

FEBRUARY 5, 2003

APRIL 21, 2004

TABLE OF CONTENTS

Page

ARTICLE I. NAME OF CORPORATION, LOCATION OF OFFICES AND

SEAL 1

1.01. Name 1

1.02. Principal Office 1

1.03. Seal 1

ARTICLE II. SHAREHOLDERS 1

2.01. Annual Meetings 1

2.02. Special Meetings 2

2.03. Place of Meetings 2

2.04. Notice of Meetings 2

2.05. Voting - In General 3

2.06. Shareholders Entitled to Vote 3

2.07. Voting - Proxies 3

2.08. Quorum 3

2.09. Absence of Quorum 4

2.10. Stock Ledger and List of Shareholders 4

2.11. Informal Action by Shareholders 4

ARTICLE III. BOARD OF DIRECTORS 4

3.01. Number and Term of Office 4

3.02. Qualification of Directors 5

3.03. Election of Directors 5

3.04. Removal of Directors 5

3.05. Vacancies and Newly Created Directorships 5

3.06. General Powers 5

3.07. Power to Issue and Sell Stock 6

3.08. Power to Declare Dividends 6

3.09. Annual and Regular Meetings 6

3.10. Special Meetings 7

3.11. Notice 7

3.12. Waiver of Notice 7

3.13. Quorum and Voting 7

3.14. Conference Telephone 7

- i -

3.15. Compensation 7

3.16. Action Without a Meeting 7

3.17. Director Emeritus 8

ARTICLE IV. EXECUTIVE COMMITTEE AND OTHER COMMITTEES 8

4.01. How Constituted 8

4.02. Powers of the Executive Committee 8

4.03. Other Committees of the Board of Directors 9

4.04. Proceedings, Quorum and Manner of Acting 9

4.05. Other Committees 9

ARTICLE V. OFFICERS 9

5.01. General 9

5.02. Election, Term of Office and Qualifications 9

5.03. Resignation 10

5.04. Removal 10

5.05. Vacancies and Newly Created Offices 10

5.06. Chairman of the Board 10

5.07. President 10

5.08. Vice President 10

5.09. Treasurer and Assistant Treasurers 11

5.10. Secretary and Assistant Secretaries 11

5.11. Subordinate Officers 11

5.12. Remuneration 11

ARTICLE VI. CUSTODY OF SECURITIES AND CASH 12

6.01. Employment of a Custodian 12

6.02. Central Certificate Service 12

6.03. Cash Assets 12

6.04. Free Cash Accounts 12

6.05. Action Upon Termination of Custodian Agreement 13

ARTICLE VII. EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES 13

7.01. Execution of Instruments 13

7.02. Voting of Securities 13

- ii -

ARTICLE VIII. CAPITAL STOCK 13

8.01. Certificate of Stock 13

8.02. Transfer of Capital Stock 14

8.03. Transfer Agents and Registrars 14

8.04. Transfer Regulations 15

8.05. Fixing of Record Date 15

8.06. Lost, Stolen, or Destroyed Certificates 15

ARTICLE IX. FISCAL YEAR, ACCOUNTANT 16

9.01. Fiscal Year 16

9.02. Accountant 16

ARTICLE X. INDEMNIFICATION AND INSURANCE 17

10.01. Indemnification and Payment of Expenses in Advance 17

10.02. Insurance of Officers, Directors, Employees and Agents 18

ARTICLE XI. AMENDMENTS 18

11.01. General 18

11.02. By Shareholders Only 19

ARTICLE XII. MISCELLANEOUS 19

12.01 Use of the Term "Annual Meeting" 19

- iii -

T. ROWE PRICE INTERNATIONAL FUNDS, INC.

(A Maryland Corporation)

BY-LAWS

ARTICLE I

NAME OF CORPORATION,

LOCATION OF OFFICES AND SEAL

Section 1.01. Name : The name of the Corporation is T. ROWE PRICE INTERNATIONAL FUNDS, INC.

Section 1.02. Principal Office : The principal office of the Corporation in the State of Maryland shall be located in the City of Baltimore. The Corporation may, in addition, establish and maintain such other offices and places of business, within or outside the State of Maryland, as the Board of Directors may from time to time determine. [ MGCL, Sections 2-103(4), 2-108(a)(1) ]

Section 1.03. Seal : The corporate seal of the Corporation shall be circular in form, and shall bear the name of the Corporation, the year of its incorporation, and the words "Corporate Seal, Maryland." The form of the seal shall be subject to alteration by the Board of Directors and the seal may be used by causing it or a facsimile to be impressed or affixed or printed or otherwise reproduced. In lieu of affixing the corporate seal to any document it shall be sufficient to meet the requirements of any law, rule, or regulation relating to a corporate seal to affix the word "(Seal)" adjacent to the signature of the authorized officer of the Corporation. Any officer or Director of the Corporation shall have authority to affix the corporate seal of the Corporation to any document requiring the same. [ MGCL, Sections 1-304(b), 2-103(3) ]

ARTICLE II

SHAREHOLDERS

Section 2.01. Annual Meetings : The Corporation shall not be required to hold an annual meeting of its shareholders in any year unless the Investment Company Act of 1940 requires an election of directors by shareholders. In the event that the Corporation shall be so required to hold an annual meeting, such meeting shall be held at a date and time set by the Board of Directors, which date shall be no later than 120 days after the occurrence of the event requiring

the meeting. Any shareholders` meeting held in accordance with the preceding sentence shall for all purposes constitute the annual meeting of shareholders for the fiscal year of the Corporation in which the meeting is held. At any such meeting, the shareholders shall elect directors to hold the offices of any directors who have held office for more than one year or who have been elected by the Board of Directors to fill vacancies which result from any cause. Except as the Articles of Incorporation or statute provides otherwise, Directors may transact any business within the powers of the Corporation as may properly come before the meeting. Any business of the Corporation may be transacted at the annual meeting without being specially designated in the notice, except such business as is specifically required by statute to be stated in the notice. [ MGCL, Section 2-501 ]

Section 2.02. Special Meetings : Special meetings of the shareholders may be called at any time by the Chairman of the Board, the President, any Vice President, or by the Board of Directors. Special meetings of the shareholders shall be called by the Secretary on the written request of shareholders entitled to cast (a) in the case of a meeting for the purpose of removing a director, at least ten (10) percent and (b) in the case of a meeting for any other purpose, at least 25 percent, in each case of all the votes entitled to be cast at such meeting, provided that any such request shall state the purpose or purposes of the meeting and the matters proposed to be acted on, and 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 2.02. Special Meetings , as amended February 5, 2003)

Section 2.03. Place of Meetings : All shareholders` meetings shall be held at such place within the United States as may be fixed from time to time by the Board of Directors. [ MGCL, Section 2-503 ]

Section 2.04. Notice of Meetings : Not less than ten (10) days, nor more than ninety (90) days before each shareholders` meeting, the Secretary or an Assistant Secretary of the Corporation shall give to each shareholder entitled to vote at the meeting, and each other shareholder entitled to notice of the meeting, written notice stating (1) the time and place of the meeting, and (2) the purpose or purposes of the meeting if the meeting is a special meeting or if notice of the purpose is required by statute to be given. Such notice shall be personally delivered to the shareholder, or left at his residence or usual place of business, or mailed to him at this address or transmitted to the shareholder by electronic mail to any electronic mail address of the shareholder or by any other electronic means in all cases as such address appears on the records of the Corporation. No notice of a shareholders` meeting need be given to any shareholder who shall sign a written waiver of such notice, whether before or after the meeting, which is filed with the records of shareholders` meetings, or to any shareholder who is present at the meeting in person or by proxy. Notice of adjournment of a shareholders` meeting to another time or place need not be given if such time and place are announced at the meeting, unless the adjournment is for more than one hundred twenty (120) days after the original record date. [ MGCL, Sections 2-504, 2-511(d) ]

(Section 2.04. Notice of Meetings , as amended July 21, 1999)

* Bracketed citations are to the General Corporation Law of the State of Maryland ("MGCL") or to the United States Investment Company Act of 1940, as amended (the "Investment Company Act"), or to Rules of the United States Securities and Exchange Commission thereunder ("SEC Rules"). The citations are inserted for reference only and do not constitute a part of the By-Laws.

Section 2.05. Voting - In General : Except as otherwise specifically provided in the Articles of Incorporation or these By-Laws, or as required by provisions of the Investment Company Act with respect to the vote of a series, if any, of the Corporation, at every shareholders` meeting, each shareholder shall be entitled to one vote for each share of stock of the Corporation validly issued and outstanding and held by such shareholder, except that no shares held by the Corporation shall be entitled to a vote. Fractional shares shall be entitled to fractional votes. Except as otherwise specifically provided in the Articles of Incorporation, or these By-Laws, or as required by provisions of the Investment Company Act, a majority of all the votes cast at a meeting at which a quorum is present is sufficient to approve any matter which properly comes before the meeting. The vote upon any question shall be by ballot whenever requested by any person entitled to vote, but, unless such a request is made, voting may be conducted in any way approved by the meeting. [ MGCL, Sections 2-214(a)(i), 2-506(a)(2), 2-507(a), 2-509(b) ]

Section 2.06. Shareholders Entitled to Vote : If, pursuant to Section 8.05 hereof, a record date has been fixed for the determination of shareholders entitled to notice of or to vote at any shareholders` meeting, each shareholder of the Corporation shall be entitled to vote in person or by proxy, each share or fraction of a share of stock outstanding in his name on the books of the Corporation on such record date. If no record date has been fixed for the determination of shareholders, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day on which notice of the meeting is mailed or the 30th day before the meeting, whichever is the closer date to the meeting, or, if notice is waived by all shareholders, at the close of business on the tenth (10th) day next preceding the date of the meeting. [ MGCL, Sections 2-507, 2-511 ]

Section 2.07. Voting - Proxies : A shareholder may authorize another person to act as proxy for the shareholder by: (i) signing a writing authorizing another person to act as proxy, (ii) the shareholder`s authorized agent signing the writing or causing the shareholder`s signature to be affixed to the writing by any reasonable means, including facsimile signature; or (iii) transmitting, or authorizing the transmission of, an authorization for the person to act as proxy to the person authorized to act as proxy or any other person authorized to receive the proxy authorization on behalf of the person authorized to act as the proxy, including a proxy solicitation firm or proxy support service organization. The authorization may be transmitted by a telegram, cablegram, datagram, electronic mail, or any other electronic or telephonic means. A copy, facsimile telecommunication, or other reliable reproduction of the writing or transmission may be substituted for the original writing or transmission for any purpose for which the original writing or transmission could be used. No proxy shall be valid more than eleven (11) months after its date unless it provides for a longer period. [ MGCL, Section 2-507(b) and (c) ]

(Section 2.07. Voting — Proxies , as amended July 21, 1999)

Section 2.08. Quorum : The presence at any shareholders` meeting, in person or by proxy, of shareholders entitled to cast a majority of the votes entitled to be cast at the meeting shall constitute a quorum. [ MGCL, Section 2-506(a) ]

Section 2.09. Absence of Quorum : In the absence of a quorum, the holders of a majority of shares entitled to vote at the meeting and present thereat in person or by proxy, or, if no shareholder entitled to vote is present in person or by proxy, any officer present who is entitled to preside at or act as Secretary of such meeting, may adjourn the meeting sine die or from time to time. Any business that might have been transacted at the meeting originally called may be transacted at any such adjourned meeting at which a quorum is present.

Section 2.10. Stock Ledger and List of Shareholders : It shall be the duty of the Secretary or Assistant Secretary of the Corporation to cause an original or duplicate stock ledger to be maintained at the office of the Corporation`s transfer agent, containing the names and addresses of all shareholders and the number of shares of each class held by each shareholder. Such stock ledger may be in written form, or any other form capable of being converted into written form within a reasonable time for visual inspection. Any one or more persons, who together are and for at least six (6) months have been shareholders of record of at least five percent (5%) of the outstanding capital stock of the Corporation, may submit (unless the Corporation at the time of the request maintains a duplicate stock ledger at its principal office) a written request to any officer of the Corporation or its resident agent in Maryland for a list of the shareholders of the Corporation. Within twenty (20) days after such a request, there shall be prepared and filed at the Corporation`s principal office a list, verified under oath by an officer of the Corporation or by its stock transfer agent or registrar, which sets forth the name and address of each shareholder and the number of shares of each class which the shareholder holds. [ MGCL, Sections 2-209, 2-513 ]

Section 2.11. Informal Action By Shareholders : Any action required or permitted to be taken at a meeting of shareholders may be taken without a meeting if the following are filed with the records of shareholders` meetings:

(a) A unanimous written consent which sets forth the action and is signed by each shareholder entitled to vote on the matter; and

(b) A written waiver of any right to dissent signed by each shareholder entitled to notice of the meeting, but not entitled to vote at it.

[ MGCL, Section 2-505 ]

ARTICLE III

BOARD OF DIRECTORS

Section 3.01. Number and Term of Office : The Board of Directors shall consist of one (1) Director, which number may be increased by a resolution of a majority of the entire Board of Directors, provided that the number of Directors shall not be more than fifteen (15) nor less than the lesser of (i) three (3) or (ii) the number of shareholders of the Corporation. Each Director (whenever elected) shall hold office until the next annual meeting of shareholders and until his

successor is elected and qualifies or until his earlier death, resignation, or removal. [ MGCL, Sections 2-402, 2-404, 2-405 ]

Section 3.02. Qualification of Directors : No member of the Board of Directors need be a shareholder of the Corporation, but at least one member of the Board of Directors shall be a person who is not an interested person (as such term is defined in the Investment Company Act) of the investment adviser of the Corporation, nor an officer or employee of the Corporation. [ MGCL, Section 2-403; Investment Company Act, Section 10(d) ]

Section 3.03. Election of Directors : Until the first annual meeting of shareholders, or until successors are duly elected and qualified, the Board of Directors shall consist of the persons named as such in the Articles of Incorporation. Thereafter, except as otherwise provided in Sections 3.04 and 3.05 hereof, at each annual meeting, the shareholders shall elect Directors to hold office until the next annual meeting and/or until their successors are elected and qualify. In the event that Directors are not elected at an annual shareholders` meeting, then Directors may be elected at a special shareholders` meeting. Directors shall be elected by vote of the holders of a plurality of the shares present in person or by proxy and entitled to vote. [ MGCL, Section 2-404 ]

Section 3.04. Removal of Directors : At any meeting of shareholders, duly called and at which a quorum is present, the shareholders may, by the affirmative vote of the holders of a majority of the votes entitled to be cast thereon, remove any Director or Directors from office, either with or without cause, and may elect a successor or successors to fill any resulting vacancies for the unexpired terms of removed Directors. [ MGCL, Sections 2-406, 2-407 ]

Section 3.05. Vacancies and Newly Created Directorships : If any vacancies occur in the Board of Directors by reason of resignation, removal or otherwise, or if the authorized number of Directors is increased, the Directors then in office shall continue to act, and such vacancies (if not previously filled by the shareholders) may be filled by a majority of the Directors then in office, whether or not sufficient to constitute a quorum, provided that, immediately after filling such vacancy, at least two-thirds of the Directors then holding office shall have been elected to such office by the shareholders of the Corporation. In the event that at any time, other than the time preceding the first meeting of shareholders, less than a majority of the Directors of the Corporation holding office at that time were so elected by the shareholders, a meeting of the shareholders shall be held promptly and in any event within sixty (60) days for the purpose of electing Directors to fill any existing vacancies in the Board of Directors unless the Securities and Exchange Commission shall by order extend such period. Except as provided in Section 3.04 hereof, a Director elected by the Board of Directors to fill a vacancy shall be elected to hold office until the next annual meeting of shareholders or until his successor is elected and qualifies. [ MGCL, Section 2-407; Investment Company Act, Section 16(a) ]

Section 3.06. General Powers :

(a) The property, business, and affairs of the Corporation shall be managed under the direction of the Board of Directors which may exercise all the powers of the Corporation except such as are by law, by the Articles of Incorporation, or by these By-Laws conferred upon or reserved to the shareholders of the Corporation. [ MGCL, Section 2-401 ]

(b) All acts done by any meeting of the Directors or by any person acting as a Director, so long as his successor shall not have been duly elected or appointed, shall, notwithstanding that it be afterwards discovered that there was some defect in the election of the Directors or such person acting as a Director or that they or any of them were disqualified, be as valid as if the Directors or such person, as the case may be, had been duly elected and were or was qualified to be Directors or a Director of the Corporation.

Section 3.07. Power to Issue and Sell Stock : The Board of Directors may from time to time authorize by resolution the issuance and sale of any of the Corporation`s authorized shares to such persons as the Board of Directors shall deem advisable and such resolution shall set the minimum price or value of consideration for the stock or a formula for its determination, and shall include a fair description of any consideration other than money and a statement of the actual value of such consideration as determined by the Board of Directors or a statement that the Board of Directors has determined that the actual value is or will be not less than a certain sum. [ MGCL, Section 2-203 ]

Section 3.08. Power to Declare Dividends :

(a) The Board of Directors, from time to time as it may deem advisable, may declare and the Corporation pay dividends, in cash, property, or shares of the Corporation available for dividends out of any source available for dividends, to the shareholders according to their respective rights and interests. [ MGCL, Section 2-309 ]

(b) The Board of Directors shall cause to be accompanied by a written statement any dividend payment wholly or partly from any source other than the Corporation`s accumulated undistributed net income (determined in accordance with good accounting practice and the rules and regulations of the Securities and Exchange Commission then in effect) not including profits or losses realized upon the sale of securities or other properties. Such statement shall adequately disclose the source or sources of such payment and the basis of calculation and shall be otherwise in such form as the Securities and Exchange Commission may prescribe. [ Investment Company Act, Section 19; SEC Rule 19a-1; MGCL, Section 2-309(c) ]

(c) Notwithstanding the above provisions of this Section 3.08, the Board of Directors may at any time declare and distribute pro rata among the shareholders a stock dividend out of the Corporation`s authorized but unissued shares of stock, including any shares previously purchased by the Corporation, provided that such dividend shall not be distributed in shares of any class with respect to any shares of a different class. The shares so distributed shall be issued at the par value thereof, and there shall be transferred to stated capital, at the time such dividend is paid, an amount of surplus equal to the aggregate par value of the shares issued as a dividend and there may be transferred from earned surplus to capital surplus such additional amount as the Board of Directors may determine. [ MGCL, Section 2-309 ]

Section 3.09. Annual and Regular Meetings : The annual meeting of the Board of Directors for choosing officers and transacting other proper business shall be held after the annual shareholders` meeting at such time and place as may be specified in the notice of such meeting of

the Board of Directors or, in the absence of such annual shareholders` meeting, at such time and place as the Board of Directors may provide. The Board of Directors from time to time may provide by resolution for the holding of regular meetings and fix their time and place (within or outside the State of Maryland). [ MGCL, Section 2-409(a) ]

Section 3.l0. Special Meetings : Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board, the President (or, in the absence or disability of the President, by any Vice President), the Treasurer, or two or more Directors, at the time and place (within or outside the State of Maryland) specified in the respective notices or waivers of notice of such meetings.

Section 3.11. Notice : Notice of annual, regular, and special meetings shall be in writing, stating the time and place, and shall be mailed to each Director at his residence or regular place of business or caused to be delivered to him personally or to be transmitted to him by telegraph, cable, or wireless at least two (2) days before the day on which the meeting is to be held. Except as otherwise required by the By-Laws or the Investment Company Act, such notice need not include a statement of the business to be transacted at, or the purpose of, the meeting. [ MGCL, Section 2- 409(b) ]

Section 3.12. Waiver of Notice : No notice of any meeting need be given to any Director who is present at the meeting or to any Director who signs a waiver of the notice of the meeting (which waiver shall be filed with the records of the meeting), whether before or after the meeting. [ MGCL, Section 2-409(c) ]

Section 3.13. Quorum and Voting : At all meetings of the Board of Directors the presence of one-third of the total number of Directors authorized, but not less than two (2) Directors if there are at least two directors, shall constitute a quorum. In the absence of a quorum, a majority of the Directors present may adjourn the meeting, from time to time, until a quorum shall be present. The action of a majority of the Directors present at a meeting at which a quorum is present shall be the action of the Board of Directors unless the concurrence of a greater proportion is required for such action by law, by the Articles of Incorporation or by these By-Laws. [ MGCL, Section 2-408 ]

Section 3.14. Conference Telephone : Members of the Board of Directors or of any committee designated by the Board, may participate in a meeting of the Board or of such committee by means of a conference telephone or similar communications equipment if all persons participating in the meeting can hear each other at the same time, and participation by such means shall constitute presence in person at such meeting. [ MGCL, Section 2-409(d) ]

Section 3.15. Compensation : Each Director may receive such remuneration for his services as shall be fixed from time to time by resolution of the Board of Directors.

Section 3.16. Action Without a Meeting : Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if a unanimous written consent which sets forth the action is signed by all members of the Board

or of such committee and such written consent is filed with the minutes of proceedings of the Board or committee. [ MGCL, Section 2-408(c) ]

Section 3.17. Director Emeritus : Upon the retirement of a Director of the Corporation, the Board of Directors may designate such retired Director as a Director Emeritus. The position of Director Emeritus shall be honorary only and shall not confer upon such Director Emeritus any responsibility, or voting authority, whatsoever with respect to the Corporation. A Director Emeritus may, but shall not be required to, attend the meetings of the Board of Directors and receive materials normally provided Directors relating to the Corporation. The Board of Directors may establish such compensation as it may deem appropriate under the circumstances to be paid by the Corporation to a Director Emeritus.

ARTICLE IV

EXECUTIVE COMMITTEE AND OTHER COMMITTEES

Section 4.01. How Constituted : By resolution adopted by the Board of Directors, the Board may appoint from among its members one or more committees, including an Executive Committee, each consisting of one or more Directors. Each member of a committee shall hold office during the pleasure of the Board. [ MGCL, Section 2-411 ]

(Section 4.01. How Constituted , as amended April 21, 2004)

Section 4.02. Powers of the Executive Committee : Unless otherwise provided by resolution of the Board of Directors, the Executive Committee, in the intervals between meetings of the Board of Directors, shall have and may exercise all of the powers of the Board of Directors to manage the business and affairs of the Corporation except the power to:

(a) Declare dividends or distributions on stock;

(b) Issue stock other than as provided in Section 2-411(b) of Corporations and Associations Article of the Annotated Code of Maryland;

(d) Amend the By-Laws; or

(e) Approve any merger or share exchange which does not require shareholder approval.

[ MGCL, Section 2-411(a) ]

Section 4.03. Other Committees of the Board of Directors : To the extent provided by resolution of the Board, other committees shall have and may exercise any of the powers that may lawfully be granted to the Executive Committee. [ MGCL, Section 2-411(a) ]

Section 4.04. Proceedings, Quorum, and Manner of Acting : In the absence of appropriate resolution of the Board of Directors, each committee may adopt such rules and regulations governing its proceedings, quorum and manner of acting as it shall deem proper and desirable, provided that the quorum shall not be less than two (2) Directors. In the absence of any member of any such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint a member of the Board of Directors to act in the place of such absent member. [ MGCL, Section 2-411(c) ]

Section 4.05. Other Committees : The Board of Directors may appoint other committees, each consisting of one or more persons who need not be Directors. Each such committee shall have such powers and perform such duties as may be assigned to it from time to time by the Board of Directors, but shall not exercise any power which may lawfully be exercised only by the Board of Directors or a committee thereof.

ARTICLE V

OFFICERS

Section 5.01. General : The officers of the Corporation shall be a President, one or more Vice Presidents (one or more of whom may be designated Executive Vice President), a Secretary, and a Treasurer, and may include one or more Assistant Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers as may be appointed in accordance with the provisions of Section 5.11 hereof. The Board of Directors may elect, but shall not be required to elect, a Chairman of the Board. [ MGCL, Section 2-412 ]

Section 5.02. Election, Term of Office and Qualifications : The officers of the Corporation (except those appointed pursuant to Section 5.11 hereof) shall be elected by the Board of Directors at its first meeting and thereafter at each annual meeting of the Board. If any officer or officers are not elected at any such meeting, such officer or officers may be elected at any subsequent regular or special meeting of the Board. Except as provided in Sections 5.03, 5.04, and 5.05 hereof, each officer elected by the Board of Directors shall hold office until the next annual meeting of the Board of Directors and until his successor shall have been chosen and qualified. Any person may hold two or more offices of the Corporation, except that neither the Chairman of the Board, nor the President, may hold the office of Vice President, but no person shall execute, acknowledge, or verify any instrument in more than one capacity if such instrument is required by law, the Articles of Incorporation, or these By-Laws to be executed, acknowledged, or verified by two or more officers. The Chairman of the Board shall be selected from among the Directors of the Corporation and may hold such office only so long as he continues to be a Director. No other officer need be a Director. [ MGCL, Sections 2-412, 2-413 and 2-415 ]

Section 5.03. Resignation : Any officer may resign his office at any time by delivering a written resignation to the Board of Directors, the President, the Secretary, or any Assistant Secretary. Unless otherwise specified therein, such resignation shall take effect upon delivery.

Section 5.04. Removal : Any officer may be removed from office by the Board of Directors whenever in the judgment of the Board of Directors the best interests of the Corporation will be served thereby. [ MGCL, Section 2-413(c) ]

Section 5.05 Vacancies and Newly Created Offices : If any vacancy shall occur in any office by reason of death, resignation, removal, disqualification or other cause, or if any new office shall be created, such vacancies or newly created offices may be filled by the Board of Directors at any meeting or, in the case of any office created pursuant to Section 5.11 hereof, by any officer upon whom such power shall have been conferred by the Board of Directors. [ MGCL, Section 2- 413(d) ]

Section 5.06. Chairman of the Board : Unless otherwise provided by resolution of the Board of Directors, the Chairman of the Board, if there be such an officer, shall be the chief executive and operating officer of the Corporation, shall preside at all shareholders` meetings, and at all meetings of the Board of Directors. He shall be ex officio a member of all standing committees of the Board of Directors. Subject to the supervision of the Board of Directors, he shall have general charge of the business, affairs, property, and operation of the Corporation and its officers, employees, and agents. He may sign (unless the President or a Vice President shall have signed) certificates representing stock of the Corporation authorized for issuance by the Board of Directors and shall have such other powers and perform such other duties as may be assigned to him from time to time by the Board of Directors.

Section 5.07. President : Unless otherwise provided by resolution of the Board of Directors, the President shall, at the request of or in the absence or disability of the Chairman of the Board, or if no Chairman of the Board has been chosen, he shall preside at all shareholders` meetings and at all meetings of the Board of Directors and shall in general exercise the powers and perform the duties of the Chairman of the Board. He may sign (unless the Chairman or a Vice President shall have signed) certificates representing stock of the Corporation authorized for issuance by the Board of Directors. Except as the Board of Directors may otherwise order, he may sign in the name and on behalf of the Corporation all deeds, bonds, contracts, or agreements. He shall exercise such other powers and perform such other duties as from time to time may be assigned to him by the Board of Directors.

Section 5.08. Vice President : The Board of Directors shall, from time to time, designate and elect one or more Vice Presidents (one or more of whom may be designated Executive Vice President) who shall have such powers and perform such duties as from time to time may be assigned to them by the Board of Directors or the President. At the request or in the absence or disability of the President, the Vice President (or, if there are two or more Vice Presidents, the Vice President in order of seniority of tenure in such office or in such other order as the Board of Directors may determine) may perform all the duties of the President and, when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President may sign (unless the Chairman, the President, or another Vice President shall have

signed) certificates representing stock of the Corporation authorized for issuance by the Board of Directors.

Section 5.09. Treasurer and Assistant Treasurers : The Treasurer shall be the principal financial and accounting officer of the Corporation and shall have general charge of the finances and books of account of the Corporation. Except as otherwise provided by the Board of Directors, he shall have general supervision of the funds and property of the Corporation and of the performance by the custodian of its duties with respect thereto. He may countersign (unless an Assistant Treasurer or Secretary or Assistant Secretary shall have countersigned) certificates representing stock of the Corporation authorized for issuance by the Board of Directors. He shall render to the Board of Directors, whenever directed by the Board, an account of the financial condition of the Corporation and of all his transactions as Treasurer; and as soon as possible after the close of each fiscal year he shall make and submit to the Board of Directors a like report for such fiscal year. He shall cause to be prepared annually a full and correct statement of the affairs of the Corporation, including a balance sheet and a financial statement of operations for the preceding fiscal year, which shall be submitted at the annual meeting of shareholders and filed within twenty (20) days thereafter at the principal office of the Corporation. He shall perform all the acts incidental to the office of the Treasurer, subject to the control of the Board of Directors. Any Assistant Treasurer may perform such duties of the Treasurer as the Treasurer or the Board of Directors may assign, and, in the absence of the Treasurer, he may perform all the duties of the Treasurer.

Section 5.10. Secretary and Assistant Secretaries : The Secretary shall attend to the giving and serving of all notices of the Corporation and shall record all proceedings of the meetings of the shareholders and Directors in one or more books to be kept for that purpose. He shall keep in safe custody the seal of the Corporation and shall have charge of the records of the Corporation, including the stock books and such other books and papers as the Board of Directors may direct and such books, reports, certificates and other documents required by law to be kept, all of which shall at all reasonable times be open to inspection by any Director. He shall countersign (unless the Treasurer, an Assistant Treasurer or an Assistant Secretary shall have countersigned) certificates representing stock of the Corporation authorized for issuance by the Board of Directors. He shall perform such other duties as appertain to his office or as may be required by the Board of Directors. Any Assistant Secretary may perform such duties of the Secretary as the Secretary or the Board of Directors may assign, and, in the absence of the Secretary, he may perform all the duties of the Secretary.

Section 5.11. Subordinate Officers : The Board of Directors from time to time may appoint such other officers or agents as it may deem advisable, each of whom shall have such title, hold office for such period, have such authority and perform such duties as the Board of Directors may determine. The Board of Directors from time to time may delegate to one or more officers or agents the power to appoint any such subordinate officers or agents and to prescribe their respective rights, terms of office, authorities, and duties. [ MGCL, Section 2-412(b) ]

Section 5.12. Remuneration : The salaries or other compensation of the officers of the Corporation shall be fixed from time to time by resolution of the Board of Directors, except that the Board of Directors may by resolution delegate to any person or group of persons the power to

fix the salaries or other compensation of any subordinate officers or agents appointed in accordance with the provisions of Section 5.11 hereof.

ARTICLE VI

CUSTODY OF SECURITIES AND CASH

Section 6.01. Employment of a Custodian : The Corporation shall place and at all times maintain in the custody of a Custodian (including any sub-custodian for the Custodian) all funds, securities, and similar investments owned by the Corporation. The Custodian shall be a bank having an aggregate capital, surplus, and undivided profits of not less than $10,000,000. Subject to such rules, regulations, and orders as the Securities and Exchange Commission may adopt as necessary or appropriate for the protection of investors, the Corporation`s Custodian may deposit all or a part of the securities owned by the Corporation in a sub-custodian or sub-custodians situated within or without the United States. The Custodian shall be appointed and its remuneration fixed by the Board of Directors. [ Investment Company Act, Section 17(f) ]

Section 6.02. Central Certificate Service : Subject to such rules, regulations, and orders as the Securities and Exchange Commission may adopt as necessary or appropriate for the protection of investors, the Corporation`s Custodian may deposit all or any part of the securities owned by the Corporation in a system for the central handling of securities established by a national securities exchange or national securities association registered with the Commission under the Securities Exchange Act of 1934, or such other person as may be permitted by the Commission, pursuant to which system all securities of any particular class or series of any issuer deposited within the system are treated as fungible and may be transferred or pledged by bookkeeping entry without physical delivery of such securities. [ Investment Company Act, Section 17(f) ]

Section 6.03. Cash Assets : The cash proceeds from the sale of securities and similar investments and other cash assets of the Corporation shall be kept in the custody of a bank or banks appointed pursuant to Section 6.01 hereof, or in accordance with such rules and regulations or orders as the Securities and Exchange Commission may from time to time prescribe for the protection of investors, except that the Corporation may maintain a checking account or accounts in a bank or banks, each having an aggregate capital, surplus, and undivided profits of not less than $10,000,000, provided that the balance of such account or the aggregate balances of such accounts shall at no time exceed the amount of the fidelity bond, maintained pursuant to the requirements of the Investment Company Act and rules and regulations thereunder, covering the officers or employees authorized to draw on such account or accounts. [ Investment Company Act, Section 17(f) ]

Section 6.04. Free Cash Accounts : The Corporation may, upon resolution of its Board of Directors, maintain a petty cash account free of the foregoing requirements of this Article VI in an amount not to exceed $500, provided that such account is operated under the imprest system and is maintained subject to adequate controls approved by the Board of Directors over disbursements

and reimbursements including, but not limited to, fidelity bond coverage for persons having access to such funds. [ Investment Company Act, Rule 17f-3 ]

Section 6.05. Action Upon Termination of Custodian Agreement : Upon resignation of a custodian of the Corporation or inability of a custodian to continue to serve, the Board of Directors shall promptly appoint a successor custodian, but in the event that no successor custodian can be found who has the required qualifications and is willing to serve, the Board of Directors shall call as promptly as possible a special meeting of the shareholders to determine whether the Corporation shall function without a custodian or shall be liquidated. If so directed by vote of the holders of a majority of the outstanding shares of stock of the Corporation, the custodian shall deliver and pay over all property of the Corporation held by it as specified in such vote.

ARTICLE VII

EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES

Section 7.01. Execution of Instruments : All deeds, documents, transfers, contracts, agreements, requisitions or orders, promissory notes, assignments, endorsements, checks and drafts for the payment of money by the Corporation, and other instruments requiring execution by the Corporation shall be signed by the Chairman, the President, a Vice President, or the Treasurer, or as the Board of Directors may otherwise, from time to time, authorize. Any such authorization may be general or confined to specific instances.

Section 7.02. Voting of Securities : Unless otherwise ordered by the Board of Directors, the Chairman, the President, or any Vice President shall have full power and authority on behalf of the Corporation to attend and to act and to vote, or in the name of the Corporation to execute proxies to vote, at any meeting of shareholders of any company in which the Corporation may hold stock. At any such meeting such officer shall possess and may exercise (in person or by proxy) any and all rights, powers, and privileges incident to the ownership of such stock. The Board of Directors may by resolution from time to time confer like powers upon any other person or persons. [ MGCL, Section 2-509 ]

ARTICLE VIII

CAPITAL STOCK

Section 8.01. Certificate of Stock :

(a) Certificates of stock of the Corporation shall be in the form approved by the Board of Directors. Except in the case of shares of the New Asia Fund Series and the International Discovery Fund Series, where no stock certificates shall be issued for shares purchased or otherwise acquired after May 1, 1991, a shareholder, upon written request shall be entitled to have

a certificate, signed in the name of the Corporation by the Chairman or the President, or any Vice President and countersigned by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, certifying the number and kind of shares owned by him in the Corporation. Such certificate may be sealed with the corporate seal of the Corporation. Such signatures may be either manual or facsimile signatures and the seal may be either facsimile or any other form of seal. The Corporation reserves the right to require the surrender of outstanding certificates representing shares of the New Asia Fund Series and the International Discovery Fund Series, if the Board of Directors so determines. [ MGCL, Sections 2-210(a)(c), 2-212 ]

(Section 8.01.(a) Certificate of Stock , as amended May 1, 1991)

(b) In case any officer, transfer agent, or registrar who shall have signed any such certificate, or whose facsimile signature has been placed thereon, shall cease to be such an officer, transfer agent or registrar (because of death, resignation or otherwise) before such certificate is issued, such certificate may be issued and delivered by the Corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue. [ MGCL, Section 2-212(c) ]

(c) The number of each certificate issued, the name of the person owning the shares represented thereby, the number and class of such shares, and the date of issuance shall be entered upon the stock books of the Corporation at the time of issuance.

(d) Every certificate exchanged, surrendered for redemption, or otherwise returned to the Corporation shall be marked "Cancelled" with the date of cancellation.

Section 8.02. Transfer of Capital Stock :

(a) Shares of stock of the Corporation shall be transferable only upon the books of the Corporation kept for such purpose 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.

(b) The Corporation shall be entitled to treat the holder of record of any share of stock as the absolute owner thereof for all purposes, and accordingly shall not be bound to recognize any legal, equitable, or other claim or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the statutes of the State of Maryland.

Section 8.03. Transfer Agents and Registrars : The Board of Directors may, from time to time, appoint or remove transfer agents and registrars of transfers of shares of stock of the Corporation, and it may appoint the same person as both transfer agent and registrar. Upon any such appointment being made all certificates representing shares of capital stock thereafter issued shall be countersigned by one of such transfer agents or by one of such registrars of transfers and shall not be valid unless so countersigned.

Section 8.04. Transfer Regulations : The shares of stock of the Corporation may be freely transferred, and the Board of Directors may, from time to time, adopt lawful rules and regulations with reference to the method of transfer of the shares of stock of the Corporation.

Section 8.05. Fixing of Record Date : The Board of Directors may fix in advance a date as a record date for the determination of the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion, or exchange of stock, or for any other proper purpose, provided that such record date shall be a date not more than sixty (60) days nor, in the case of a meeting of shareholders, less than ten (10) days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. In such case, only such shareholders as shall be shareholders of record on the record date so fixed shall be entitled to such notice of, and to vote at, such meeting or adjournment, or to give such consent, or to receive payment of such dividend or other distribution, or to receive such allotment of rights, or to exercise such rights, or to take other action, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after any such record date. A meeting of shareholders convened on the date for which it was called may be adjourned from time to time without notice to a date not more than one hundred twenty (120) days after the original record date. [ MGCL, Section 2-511 ]

Section 8.06. Lost, Stolen or Destroyed Certificates : Before issuing a new certificate for stock of the Corporation alleged to have been lost, stolen, or destroyed 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 or the issuance of such new certificate. The issuance of a new certificate under such circumstances shall not constitute an overissue of the shares represented thereby. If a certificate representing shares of the New Asia Fund or International Discovery Fund Series is alleged to have been lost, stolen or destroyed, no new certificate will be issued. Instead, subject to satisfaction of the bonding or other indemnity provisions set forth in this Section 8.06, 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. [ MGCL, Section 2-213 ]

(Section 8.06. Lost, Stolen or Destroyed Certificates , as amended May 1, 1991)

ARTICLE IX

FISCAL YEAR, ACCOUNTANT

Section 9.01. Fiscal Year : The fiscal year of the T. Rowe Price International Stock Fund, T. Rowe Price International Growth & Income Fund, T. Rowe Price Global Stock Fund, T. Rowe Price International Discovery Fund, T. Rowe Price Emerging Markets Stock Fund, T. Rowe Price European Stock Fund, T. Rowe Price Japan Fund, T. Rowe Price Latin America Fund, T. Rowe Price New Asia Fund, and any future international equity series of the Corporation shall be the twelve (12) calendar months beginning on the 1st day of November in each year and ending on the last day of the following October, and the fiscal year of the T. Rowe Price Global Bond Fund, T. Rowe Price International Bond Fund, T. Rowe Price Emerging Markets Bond Fund, and any future international income series of the Corporation shall be the twelve (12) calendar months beginning on the 1st day of January in each year and ending on the last day of the following December, or such other period of twelve (12) calendar months as the Board of Directors may by resolution prescribe.

(Section 9.01. Fiscal Year , as amended September 30, 1993)

Section 9.02. Accountant :

(a) The Corporation shall employ an independent public accountant or firm of independent public accountants for each series of the Corporation to examine the accounts of the Corporation with respect to such series and to sign and certify financial statements filed by the Corporation with respect to such series. The certificates and reports of the accountant(s) shall be addressed both to the Board of Directors and to the shareholders. The Corporation may employ a different accountant with respect to each series.

(b) A majority of the members of the Board of Directors who are not interested persons (as such term is defined in the Investment Company Act) of the Corporation shall select the accountant for each series, by vote cast in person, at any meeting held before the first annual shareholder's meeting, and thereafter shall select the accountant for such series annually, by vote cast in person, at a meeting held within thirty (30) days before or after the beginning of the fiscal year of the Corporation, within thirty (30) days before the annual shareholders` meeting for such series in that year, or within such other period of time as may be allowed under the Investment Company Act of 1940. Such selection shall be submitted for ratification or rejection at the next succeeding annual shareholders` meeting for such series. If such meeting shall reject such selection, the accountant for such series shall be selected by a majority vote of the outstanding voting securities of such series of the Corporation, either at the meeting at which the rejection occurred or at a subsequent meeting of shareholders for such series called for the purpose.

(c) Any vacancy occurring between annual meetings, due to the resignation or termination of the accountant of a series, may be filled by the vote of a majority of those members of the Board of Directors who are not interested persons (as so defined) of the Corporation, cast in person at a meeting called for the purpose of voting on such action.

(d) The employment of the accountant of a series shall be conditioned upon the right of such series of the Corporation by a vote of a majority of the outstanding voting securities of such series at any meeting called for the purpose to terminate such employment forthwith without any penalty. [ Investment Company Act, Section 32(a) ]

ARTICLE X

INDEMNIFICATION AND INSURANCE

Section 10.01. Indemnification and Payment of Expenses in Advance : The Corporation shall indemnify any individual ("Indemnitee") who is a present or former director, officer, employee, or agent of the Corporation, or who is or has been serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, who, by reason of his position was, is, or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (hereinafter collectively referred to as a "Proceeding") against any judgments, penalties, fines, settlements, and reasonable expenses (including attorneys` fees) incurred by such Indemnitee in connection with any Proceeding, to the fullest extent that such indemnification may be lawful under Maryland law. The Corporation shall pay any reasonable expenses so incurred by such Indemnitee in defending a Proceeding in advance of the final disposition thereof to the fullest extent that such advance payment may be lawful under Maryland law. Subject to any applicable limitations and requirements set forth in the Corporation`s Articles of Incorporation and in these By-Laws, any payment of indemnification or advance of expenses shall be made in accordance with the procedures set forth in Maryland law.

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

(ii) an independent legal counsel in a written opinion.

(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

(i) a majority of a quorum of directors who are neither "interested persons" of the Corporation as defined in Section 2(a)(19) of the Investment Company Act, nor parties to the Proceeding; or

(ii) an independent legal counsel in a written opinion.

Section 10.02. Insurance of Officers, Directors, Employees and Agents : To the fullest extent permitted by applicable Maryland law and by Section 17(h) of the Investment Company Act, as from time to time amended, the Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or who is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against any liability asserted against him and incurred by him in or arising out of his position, whether or not the Corporation would have the power to indemnify him against such liability. [ MGCL, Section 2- 418(k) ]

ARTICLE XI

AMENDMENTS

Section 11.01. General : Except as provided in Section 11.02 hereof, all By-Laws of the Corporation, whether adopted by the Board of Directors or the shareholders, shall be subject to amendment, alteration, or repeal, and new By-Laws may be made, by the affirmative vote of a majority of either:

(a) the holders of record of the outstanding shares of stock of the Corporation entitled to vote, at any annual or special meeting the notice or waiver of notice of which shall have specified or summarized the proposed amendment, alteration, repeal, or new By-Law; or

(b) the Directors present at any regular or special meeting at which a quorum is present if the notice or waiver of notice thereof or material sent to the Directors in connection therewith on or prior to the last date for the giving of such notice under these By-Laws shall have specified or summarized the proposed amendment, alteration, repeal, or new By-Law.

Section 11.02. By Shareholders Only :

(a) No amendment of any section of these By-Laws shall be made except by the shareholders of the Corporation if the shareholders shall have provided in the By-Laws that such section may not be amended, altered, or repealed except by the shareholders.

(b) From and after the issue of any shares of the Capital Stock of the Corporation, no amendment of this Article XI shall be made except by the shareholders of the Corporation.

ARTICLE XII

MISCELLANEOUS

Section 12.01. Use of the Term "Annual Meeting:" The use of the term "annual meeting" in these By-Laws shall not be construed as implying a requirement that a shareholder meeting be held annually.

Agmts/Bylaws.INT

AMENDMENT TO

INVESTMENT MANAGEMENT AGREEMENTS

( the "Agreements" )

Between

Each of the T. Rowe Price Funds (collectively "the Funds")

set forth on Schedule A hereto, severally and not jointly

and

T. ROWE PRICE ASSOCIATES, INC. ("U.S. Manager") or

T. ROWE PRICE INTERNATIONAL, INC. ("International Manager"),

as the case may be (collectively "the Managers")

This is an Amendment to each of the Agreements, made as of the 1st day of August, 2004, by and between each of the Funds, separately and not jointly, and the U.S. Manager or International Manager, as the case may be.

W I T N E S S E T H:

WHEREAS, as set forth in each Agreement, the Funds pay the Managers a fee ( "Fee" ) which consists of two components: a Group Management Fee ( "Group Fee" ) and an Individual Fund Fee ( "Fund Fee" );

WHEREAS, as set forth in each Agreement, the Group Fee is calculated using the aggregate net assets of the Price Funds, excluding the assets of any T. Rowe Price institutional fund;

WHEREAS, at their meeting on July 21, 2004, the Directors/Trustees of the Funds determined that it would be in the best interests of the Funds and their shareholders to include the assets of the T. Rowe Price institutional funds for the purpose of calculating the Group Fee;

WHEREAS, inclusion of the T. Rowe Price institutional funds` assets will in all cases increase the assets included in the Group Fee calculation and thereby reduce the Group Fee for the Funds;

WHEREAS, the Managers and the Funds desire to continue each Agreement on the same terms and conditions other than as described immediately above and below;

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

1. Subparagraph A. of Paragraph 3 of each Agreement is amended to read as follows:

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:

Price Funds Annual Group

Base Fee Rate for Each Level of Assets

______________________________________

0.480% First $1 billion

0.450% Next $1 billion

0.420% Next $1 billion

0.390% Next $1 billion

0.370% Next $1 billion

0.360% Next $2 billion

0.350% Next $2 billion

0.340% Next $5 billion

0.330% Next $10 billion

0.320% Next $10 billion

0.310% Next $16 billion

0.305% Next $30 billion

0.300% Next $40 billion

0.295% Thereafter

The Price Funds shall include all the mutual funds distributed by T. Rowe Price Investment Services, Inc., (other than "private label" funds, Index Trust, Spectrum Funds, Retirement Funds, and Reserve Investment Funds). For the purposes of calculating the Daily Price Funds ` Group Fee Accrual for any particular day, the net assets of each Price Fund shall be determined in accordance with the Fund ` s prospectus, as of the close of business on the previous business day on which the Fund was open for business.

2. All other terms and conditions of each Agreement remain in full force and effect until April 30, 2005, unless terminated on an earlier date pursuant the applicable provisions of the Agreements.

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

Attest: Each of the Funds set forth on Schedule A

hereto, severally and not jointly

/s/ Patricia B. Lippert By: /s/James S. Riepe

Patricia B. Lippert James S. Riepe

Secretary Chairman of the Board

Attest: T. ROWE PRICE ASSOCIATES, INC.

/s/Barbara A. Van Horn By: /s/Henry H. Hopkins

Barbara A. Van Horn Henry H. Hopkins

Secretary Vice President

Attest: T. ROWE PRICE INTERNATIONAL, INC.

/s/Barbara A. Van Horn By: /s/David J.L. Warren

Barbara A. Van Horn David J.L. Warren

Secretary Chief Executive Officer

- 3 -

L:TRPPRODEDGAgreementsInvestment Mgmt AgreementsMgAgmGroupFeeAmd.fm

Schedule A

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INTERNATIONAL FUNDS, INC.

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUND, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE STATE TAX-FREE INCOME TRUST

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.

T. ROWE PRICE VALUE FUND, INC.

Custodian Agreement

This Agreement is made as of January 28, 1998 by and between each entity set forth on Appendix A hereto (as such Appendix A may be amended from time to time) which executes a copy of this Agreement (each referred to herein as the "Fund" ), and State Street Bank and Trust Company, a Massachusetts trust company with its principal place of business at 225 Franklin Street, Boston, Massachusetts 02110 (the "Custodian" ).

Witnesseth:

Whereas, each Fund desires to retain the Custodian to act as custodian of certain of the assets of the Fund, and the Custodian is willing to provide such services to each Fund, upon the terms and conditions hereinafter set forth; and

Whereas, except as otherwise set forth herein, this Agreement is intended to supersede that certain custodian contract among the parties hereto dated September 28, 1987, as amended; and

Whereas, the Funds have retained Chase Manhattan Bank, N.A. to act as the Funds` custodian with respect to the assets of each such Fund to be held outside of the United States of America (except as otherwise set forth in this Agreement) pursuant to a written custodian agreement (the "Foreign Custodian Agreement" ),

Now, Therefore, in consideration of the mutual covenants and agreements hereinafter contained, each of the parties hereto agrees as follows:

Section 1. Employment of Custodian and Property to be Held by It.

Each Fund hereby employs the Custodian as the custodian of certain of its assets, including those securities it desires to be held within the United States of America ( "domestic securities" ) and those securities it desires to be held outside the United States of America (the "United States" ) which are (i) not held on the Funds` behalf by Chase Manhattan Bank, N.A. pursuant to the Foreign Custodian Agreement and (ii) described with greater particularity in Section 3 hereof (such securities shall be referred to herein as "foreign securities" ). Each Fund agrees to deliver to the Custodian all domestic securities, foreign securities and cash owned by it from time to time, and all payments of income, payments of principal or capital distributions received by it with respect to

securities held by it hereunder, and the cash consideration received by it for such new or treasury shares of capital stock of each Fund as may be issued or sold from time to time ( "Shares" ). The Custodian shall not be responsible for any property of any Fund held or received by such Fund (i) not delivered to the Custodian, or (ii) held in the custody of Chase Manhattan Bank N.A .

The Custodian is authorized to employ one or more sub- custodians located within the United States, provided that the Custodian shall have obtained the written acknowledgment of the Fund with respect to such employment. The Custodian is authorized to employ sub-custodians located outside the United States as noted on Schedule A attached hereto (as such Schedule A may be amended from time to time). The Custodian shall have no more or less responsibility or liability to any Fund on account of any actions or omissions of any sub-custodian so employed than any such sub- custodian has to the Custodian and shall not release any sub- custodian from any responsibility or liability unless so agreed in writing by the Custodian and the applicable Fund. With the exception of State Street Bank and Trust Company (London branch), the Custodian shall not be liable for losses arising from the bankruptcy, insolvency or receivership of any sub-custodian located outside the United States.

Section 2. Duties of the Custodian with Respect to Property of the Funds Held By the Custodian in the United States.

Section 2.1 Holding Securities . The Custodian shall hold and physically segregate for the account of each Fund all non-cash property to be held by it in the United States, including all domestic securities owned by the Fund other than (a) securities which are maintained pursuant to Section 2.9 in a clearing agency which acts as a securities depository or in a book-entry system authorized by the United States Department of the Treasury and certain federal agencies (each, a "U.S. Securities System" ) and (b) commercial paper of an issuer for which the Custodian acts as issuing and paying agent ( "Direct Paper" ) which is deposited and/or maintained in the Direct Paper system of the Custodian (the "Direct Paper System" ) pursuant to Section 2.10.

Section 2.2 Delivery of Investments . The Custodian shall release and deliver domestic investments owned by a Fund held by the Custodian or in a U.S. Securities System account of the Custodian or in the Custodian`s Direct Paper System account ( "Direct Paper System Account" ) only upon receipt of Proper Instructions, which

may be continuing instructions when agreed to by the parties, and only in the following cases:

1) Upon sale of such investments for the account of the Fund and receipt of payment therefor;

2) Upon the receipt of payment in connection with any repurchase agreement related to such investments entered into by the Fund;

3) In the case of a sale effected through a U.S. Securities System, in accordance with the provisions of Section 2.9 hereof;

4) To the depository agent in connection with tender or other similar offers for portfolio investments of the Fund;

5) To the issuer thereof or its agent when such investments are called, redeemed, retired or otherwise become payable; provided that, in any such case, the cash or other consideration is to be delivered to the Custodian;

6) To the issuer thereof, or its agent, for transfer into the name of the Fund or into the name of any nominee or nominees of the Custodian or into the name or nominee name of any agent appointed pursuant to Section 2.8 or into the name or nominee name of any sub-custodian appointed pursuant to Section 1; or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units; provided that, in any such case, the new securities are to be delivered to the Custodian;

7) Upon the sale of such investments for the account of the Fund, to the broker or its clearing agent, against a receipt, for examination in accordance with usual "street delivery" custom; provided that in any such case the Custodian shall have no responsibility or liability for any loss arising from the delivery of such investments prior to receiving payment for such investments except as may arise from the Custodian`s own negligence or willful misconduct;

8) For exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the investments of the issuer of such investments, or pursuant to provisions for conversion contained in such investments, or pursuant to any deposit agreement; provided that, in any such case, the new investments and cash, if any, are to be delivered to the Custodian;

9) In the case of warrants, rights or similar investments, the surrender thereof in the exercise of such warrants, rights or similar investments or the surrender of interim receipts or temporary investments for definitive investments; provided that, in any such case, the new investments and cash, if any, are to be delivered to the Custodian or against a receipt;

10) For delivery in connection with any loans of investments made on behalf of the Fund, but only against receipt of adequate collateral as agreed upon from time to time by the Fund or its duly-appointed agent (which may be in the form of cash or obligations issued by the United States government, its agencies or instrumentalities, or such other property as the Fund may agree), except that in connection with any loans for which collateral is to be credited to the Custodian`s account in the book-entry system authorized by the U.S. Department of the Treasury, the Custodian will not be held liable or responsible for the delivery of investments owned by the Fund prior to the receipt of such collateral in the absence of the Custodian`s negligence or willful misconduct;

11) For delivery as security in connection with any borrowing by the Fund requiring a pledge of assets by the Fund, but only against receipt of amounts borrowed, except where additional collateral is required to secure a borrowing already made, subject to Proper Instructions, further securities may be released and delivered for that purpose;

12) For delivery in accordance with the provisions of any agreement among the Fund, the Custodian and a broker- dealer registered under the Securities Exchange Act of 1934 (the "Exchange Act" ) and a member of The National Association of Securities Dealers, Inc. ( "NASD" ),

relating to compliance with the rules of The Options Clearing Corporation, the rules of any registered national securities exchange or of any similar organization or organizations, or under the Investment Company Act of 1940, as amended from time to time (the "1940 Act" ), regarding escrow or other arrangements in connection with transactions by the Fund;

13) For delivery in accordance with the provisions of any agreement among the Fund, the Custodian, and a Futures Commission Merchant registered under the Commodity Exchange Act, relating to compliance with the rules of the Commodity Futures Trading Commission and/or any Contract Market, or any similar organization or organizations, or under the 1940 Act, regarding account deposits in connection with transactions by the Fund;

14) Upon receipt of instructions from the transfer agent for the Fund (the "Transfer Agent" ), for delivery to such Transfer Agent or to the holders of shares in connection with distributions in kind, as may be described from time to time in the Fund`s currently effective prospectus, statement of additional information or other offering documents (all, as amended, supplemented or revised from time to time, the "Prospectus" ), in satisfaction of requests by holders of Shares for repurchase or redemption; and

15) For any other purpose, but only upon receipt of Proper Instructions specifying (a) the investments to be delivered, (b) setting forth the purpose for which such delivery is to be made, and (c) naming the person or persons to whom delivery of such investments shall be made.

Section 2.3 Registration of Investments . Domestic investments held by the Custodian (other than bearer securities) shall be registered in the name of the Fund or in the name of any nominee of the Fund or of any nominee of the Custodian which nominee shall be assigned exclusively to the Fund, unless the Fund has authorized in writing the appointment of a nominee to be used in common with other registered investment companies having the same investment adviser as the Fund, or in the name or nominee name of any agent appointed pursuant to Section 2.8 or in the name or nominee name of any sub-custodian appointed pursuant to Section 1. All securities accepted by the Custodian on behalf of the Fund under the terms of

this Agreement shall be in good deliverable form. If, however, the Fund directs the Custodian to maintain securities in "street name", the Custodian shall utilize its best efforts only to timely collect income due the Fund on such securities and to notify the Fund of relevant corporate actions including, without limitation, pendency of calls, maturities, tender or exchange offers.

Section 2.4 Bank Accounts . The Custodian shall open and maintain a separate bank account or accounts in the United States in the name of the Fund, subject only to draft or order by the Custodian acting pursuant to the terms of this Agreement, and shall hold in such account or accounts, subject to the provisions hereof, all cash received by it from or for the account of the Fund, other than cash maintained by the Fund in a bank account established and used in accordance with Rule 17f-3 under the 1940 Act. Monies held by the Custodian for the Fund may be deposited by the Custodian to its credit as custodian in the banking department of the Custodian or in such other banks or trust companies as it may in its discretion deem necessary or desirable in the performance of its duties hereunder; provided, however, that every such bank or trust company shall be qualified to act as a custodian under the 1940 Act, and that each such bank or trust company and the funds to be deposited with each such bank or trust company shall be approved by vote of a majority of the board of directors or the board of trustees of the applicable Fund (as appropriate and in each case, the "Board" ). Such funds shall be deposited by the Custodian in its capacity as custodian and shall be withdrawable by the Custodian only in that capacity.

Section 2.5 Collection of Income . Subject to the provisions of Section 2.3, the Custodian shall collect on a timely basis all income and other payments with respect to United States registered investments held hereunder to which the Fund shall be entitled either by law or pursuant to custom in the investments business, and shall collect on a timely basis all income and other payments with respect to United States bearer investments if, on the date of payment by the issuer, such investments are held by the Custodian or its agent thereof and shall credit such income, as collected, to the Fund`s custodian account. Without limiting the generality of the foregoing, the Custodian shall detach and present for payment all coupons and other income items requiring presentation as and when they become due, collect interest when due on investments held hereunder, and receive and collect all stock dividends, rights and other items of like nature as and when they become due and payable. With respect to income due the Fund on United States investments of the Fund loaned (pursuant to the provisions of Section 2.2 (10))

in accordance with a separate agreement between the Fund and the Custodian in its capacity as lending agent, collection thereof shall be in accordance with the terms of such agreement. Except as otherwise set forth in the immediately preceding sentence, income due the Fund on United States investments of the Fund loaned pursuant to the provisions of Section 2.2 (10) shall be the responsibility of the Fund; the Custodian will have no duty or responsibility in connection therewith other than to provide the Fund with such information or data as may be necessary to assist the Fund in arranging for the timely delivery to the Custodian of the income to which the Fund is properly entitled.

Section 2.6 Payment of Fund Monies . Upon receipt of Proper Instructions, which may be continuing instructions when agreed to by the parties, the Custodian shall, from monies of the Fund held by the Custodian, pay out such monies in the following cases only:

1) Upon the purchase of domestic investments, options, futures contracts or options on futures contracts for the account of the Fund but only (a) against the delivery of such investments, or evidence of title to such options, futures contracts or options on futures contracts, to the Custodian (or any bank, banking firm or trust company doing business in the United States or abroad which is qualified under the 1940 Act to act as a custodian and has been designated by the Custodian as its agent for this purpose in accordance with Section 2.8) registered in the name of the Fund or in the name of a nominee of the Custodian referred to in Section 2.3 hereof or in proper form for transfer; (b) in the case of a purchase effected through a U.S. Securities System, in accordance with the conditions set forth in Section 2.9 hereof; (c) in the case of a purchase involving the Direct Paper System, in accordance with the conditions set forth in Section 2.10 hereof; or (d) for transfer to a time deposit account of the Fund in any bank, whether domestic or foreign, such transfer may be effected prior to receipt of a confirmation from a broker and/or the applicable bank pursuant to Proper Instructions;

2) In connection with conversion, exchange or surrender of investments owned by the Fund as set forth in Section 2.2 hereof;

3) For the redemption or repurchase of Shares as set forth in Section 4 hereof;

4) For the payment of any expense or liability incurred by the Fund, including but not limited to the following payments for the account of the Fund: interest, taxes, management fees, accounting fees, transfer agent fees, legal fees, and operating expenses of the Fund (whether or not such expenses are to be in whole or part capitalized or treated as deferred expenses);

5) For the payment of any dividends declared by the Board;

6) For payment of the amount of dividends received in respect of investments sold short;

7) For repayment of a loan upon redelivery of pledged securities and upon surrender of the note(s), if any, evidencing the loan; or

8) In connection with any repurchase agreement entered into by the Fund with respect to which the collateral is held by the Custodian, the Custodian shall act as the Fund`s "securities intermediary"( as that term is defined in Part 5 of Article 8 of the Massachusetts Uniform Commercial Code, as amended), and, as securities intermediary, the Custodian shall take the following steps on behalf of the Fund: (a) provide the Fund with notification of the receipt of the purchased securities, and (b), by book-entry identify on the books of the Custodian as belonging to the Fund uncertificated securities registered in the name of the Fund and held in the Custodian`s account at the Federal Reserve Bank. In connection with any repurchase agreement entered into by the Fund with respect to which the collateral is not held by the Custodian, the Custodian shall (a) provide the Fund with such notification as it may receive with respect to such collateral, and (b), by book-entry or otherwise, identify as belonging to the Fund securities as shown in the Custodian`s account on the books of the entity appointed by the Fund to hold such collateral.

9) For any other purpose, but only upon receipt of Proper Instructions specifying (a) the amount of such payment,

(b) setting forth the purpose for which such payment is to be made, and (c) naming the person or persons to whom such payment is to be made.

Section 2.7 Liability for Payment in Advance of Receipt of Securities Purchased . In any and every case where payment for purchase of domestic securities for the account of the Fund is made by the Custodian in advance of receipt of the securities purchased in the absence of specific written instructions from the Fund to so pay in advance, the Custodian shall be absolutely liable to the Fund for such securities to the same extent as if the securities had been received by the Custodian.

Section 2.8 Appointment of Agents . The Custodian may at any time or times in its discretion appoint (and may at any time remove) any other bank or trust company, which is itself qualified under the 1940 Act to act as a custodian, as its agent to carry out such of the provisions of this Section 2 as the Custodian may from time to time direct; provided, however, that the appointment of any such agent shall not relieve the Custodian of its responsibilities or liabilities hereunder.

Section 2.9 Deposit of Investments in U.S. Securities Systems . The Custodian may deposit and/or maintain domestic investments owned by the Fund in a U.S. Securities System in accordance with applicable Federal Reserve Board and United States Securities and Exchange Commission ( "SEC" ) rules and regulations, if any, subject to the following provisions:

1) The Custodian may keep domestic investments of the Fund in a U.S. Securities System provided that such investments are represented in an account of the Custodian in the U.S. Securities System ( "Account" ) which shall not include any assets of the Custodian other than assets held as a fiduciary, custodian or otherwise for customers;

2) The records of the Custodian with respect to domestic investments of the Fund which are maintained in a U.S. Securities System shall identify by book-entry those investments belonging to the Fund;

3) The Custodian shall pay for domestic investments purchased for the account of the Fund upon (i) receipt of advice from the U.S. Securities System that such investments have been transferred to the Account, and

(ii) the making of an entry on the records of the Custodian to reflect such payment and transfer for the account of the Fund. The Custodian shall transfer domestic investments sold for the account of the Fund upon (i) receipt of advice from the U.S. Securities System that payment for such investments has been transferred to the Account, and (ii) the making of an entry on the records of the Custodian to reflect such transfer and payment for the account of the Fund. Copies of all advices from the U.S. Securities System of transfers of domestic investments for the account of the Fund shall identify the Fund, be maintained for the Fund by the Custodian and be provided to the Fund at its request. Upon request, the Custodian shall furnish the Fund confirmation of each transfer to or from the account of the Fund in the form of a written advice or notice and shall furnish to the Fund copies of daily transaction sheets reflecting each day`s transactions in the U.S. Securities System for the account of the Fund;

4) The Custodian shall provide the Fund with any report obtained by the Custodian on the U.S. Securities System`s accounting system, internal accounting control and procedures for safeguarding domestic investments deposited in the U.S. Securities System;

5) The Custodian shall have received from the Fund the initial or annual certificate, as the case may be, described in Section 10 hereof; and

6) Anything to the contrary in this Agreement notwithstanding, the Custodian shall be liable to the Fund for any loss or damage to the Fund resulting from use of the U.S. Securities System by reason of any negligence, misfeasance or misconduct of the Custodian or any of its agents or of any of its or their employees, or from failure of the Custodian or any such agent to enforce effectively such rights as it may have against the U.S. Securities System. At the election of the Fund, the Fund shall be entitled to be subrogated to the rights of the Custodian with respect to any claim against the U.S. Securities System or any other person which the Custodian may have as a consequence of any such loss, expense or damage if and to the extent that

the Fund has not been made whole for any such loss, expense or damage.

Section 2.10 Fund Assets Held in the Direct Paper System . The Custodian may deposit and/or maintain investments owned by the Fund in the Direct Paper System subject to the following provisions:

1) No transaction relating to investments in the Direct Paper System will be effected in the absence of Proper Instructions;

2) The Custodian may keep investments of the Fund in the Direct Paper System only if such investments are represented in the Direct Paper System Account, which account shall not include any assets of the Custodian other than assets held as a fiduciary, custodian or otherwise for customers;

3) The records of the Custodian with respect to investments of the Fund which are maintained in the Direct Paper System shall identify by book-entry those investments belonging to the Fund;

4) The Custodian shall pay for investments purchased for the account of the Fund upon the making of an entry on the records of the Custodian to reflect such payment and transfer of investments to the account of the Fund. The Custodian shall transfer investments sold for the account of the Fund upon the making of an entry on the records of the Custodian to reflect such transfer and receipt of payment for the account of the Fund;

5) The Custodian shall furnish the Fund confirmation of each transfer to or from the account of the Fund, in the form of a written advice or notice, of Direct Paper on the next business day following such transfer and shall furnish to the Fund copies of daily transaction sheets reflecting each day`s transaction in the Direct Paper System for the account of the Fund; and

6) The Custodian shall provide the Fund with any report on its system of internal accounting control as the Fund may reasonably request from time to time.

Section 2.11 Segregated Account . The Custodian shall, upon receipt of Proper Instructions, establish and maintain a segregated

account or accounts for and on behalf of the Fund, into which account or accounts may be transferred cash and/or investments, including investments maintained in an account by the Custodian pursuant to Section 2.10 hereof, (i) in accordance with the provisions of any agreement among the Fund, the Custodian and a broker-dealer registered under the Exchange Act and a member of the NASD (or any futures commission merchant registered under the Commodity Exchange Act), relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange (or the Commodity Futures Trading Commission or any registered contract market), or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Fund, (ii) for purposes of segregating cash or government investments in connection with options purchased, sold or written by the Fund or commodity futures contracts or options thereon purchased or sold by the Fund, (iii) for the purposes of compliance by the Fund with the procedures required by 1940 Act Release No. 10666, or any other procedures subsequently required under the 1940 Act relating to the maintenance of segregated accounts by registered investment companies, and (iv) for other purposes, but only, in the case of clause (iv) upon receipt of Proper Instructions specifying (a) the investments to be delivered, (b) setting forth the purpose for which such delivery is to be made, and (c) naming the person or persons to whom delivery of such investments shall be made.

Section 2.12 Ownership Certificates for Tax Purposes . The Custodian shall execute ownership and other certificates and affidavits for all United States federal and state tax purposes in connection with receipt of income or other payments with respect to domestic investments of the Fund held by it hereunder and in connection with transfers of such investments.

Section 2.13 Proxies . The Custodian shall, with respect to the domestic investments held hereunder, cause to be promptly executed by the registered holder of such investments, if the investments are registered otherwise than in the name of the Fund or a nominee of the Fund, all proxies without indication of the manner in which such proxies are to be voted, and shall promptly deliver to the Fund such proxies, all proxy soliciting materials received by the Custodian and all notices received relating to such investments.

Section 2.14 Communications Relating to Fund Investments . Subject to the provisions of Section 2.3, the Custodian shall transmit promptly to the Fund all written information (including, without limitation, pendency of calls and maturities of domestic investments and expirations of rights in connection therewith and notices of

exercise of call and put options written by the Fund and the maturity of futures contracts purchased or sold by the Fund) received by the Custodian in connection with the domestic investments being held for the Fund pursuant to this Agreement. With respect to tender or exchange offers, the Custodian shall transmit to the Fund all written information received by the Custodian, any agent appointed pursuant to Section 2.8 hereof, or any sub-custodian appointed pursuant to Section 1 hereof, from issuers of the domestic investments whose tender or exchange is sought and from the party (or his agents) making the tender or exchange offer. If the Fund desires to take action with respect to any tender offer, exchange offer or any other similar transaction, the Fund shall notify the Custodian at least two (2) New York Stock Exchange business days prior to the time such action must be taken under the terms of the tender, exchange offer or other similar transaction, and it will be the responsibility of the Custodian to timely transmit to the appropriate person(s) such notice. Where the Fund provides the Custodian with less than two (2) New York Stock Exchange business days notice of its desired action, the Custodian shall use its best efforts to timely transmit the Fund`s notice to the appropriate person. It is expressly noted that the parties may agree to alternative procedures with respect to such two (2) New York Stock Exchange business days notice period on a selective and individual basis.

Section 2.15 Reports to Fund by Independent Public Accountants . The Custodian shall provide the Fund, at such times as the Fund may reasonably require, with reports by independent public accountants on the accounting system, internal accounting control and procedures for safeguarding investments, futures contracts and options on futures contracts, including domestic investments deposited and/or maintained in a U.S. Securities System, relating to the services provided by the Custodian under this Agreement. Such reports shall be of sufficient scope and detail, as may reasonably be required by the Fund, to provide reasonable assurance that any material inadequacies would be disclosed by such examination, and if there are no such inadequacies the reports shall so state.

Section 3. Duties of the Custodian with Respect to Certain Property of the Funds Held Outside of the United States

Section 3.1 Definitions. The following capitalized terms shall have the respective following meanings:

"Foreign Securities System" means a clearing agency or a securities depository listed on Schedule A hereto.

"Foreign Sub-Custodian" means a foreign banking institution set forth on Schedule A hereto.

Section 3.2 Holding Securities. The Custodian shall identify on its books as belonging to the Funds the foreign securities held by each Foreign Sub-Custodian or Foreign Securities System. The Custodian may hold foreign securities for all of its customers, including the Funds, with any Foreign Sub-Custodian in an account that is identified as belonging to the Custodian for the benefit of its customers, provided however, that (i) the records of the Custodian with respect to foreign securities of the Funds which are maintained in such account shall identify those securities as belonging to the Funds and (ii) the Custodian shall require that securities so held by the Foreign Sub-Custodian be held separately from any assets of such Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.

Section 3.3 Foreign Securities Systems. Foreign securities shall be maintained in a Foreign Securities System in a designated country only through arrangements implemented by the Foreign Sub-Custodian in such country pursuant to the terms of this Agreement.

Section 3.4 Transactions in Foreign Custody Account.

3.4.1. Delivery of Foreign Securities . The Custodian or a Foreign Sub-Custodian shall release and deliver foreign securities of the Funds held by such Foreign Sub-Custodian, or in a Foreign Securities System account, only upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:

(i) upon the sale of such foreign securities for the Funds in accordance with reasonable market practice in the country where such foreign securities are held or traded, including, without limitation: (A) delivery against expectation of receiving later payment; or (B) in the case of a sale effected through a Foreign Securities System in accordance with the rules governing the operation of the Foreign Securities System;

(ii) in connection with any repurchase agreement related to foreign securities;

(iii) to the depository agent in connection with tender or other similar offers for foreign securities of the Funds;

(iv) to the issuer thereof or its agent when such foreign securities are called, redeemed, retired or otherwise become payable;

(v) to the issuer thereof, or its agent, for transfer into the name of the Custodian (or the name of the respective Foreign Sub-Custodian or of any nominee of the Custodian or such Foreign Sub-Custodian) or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units;

(vi) to brokers, clearing banks or other clearing agents for examination or trade execution in accordance with market custom; provided that in any such case the Foreign Sub-Custodian shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such securities except as may arise from the Foreign Sub- Custodian`s own negligence or willful misconduct;

(vii) for exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement;

(viii) in the case of warrants, rights or similar foreign securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities;

(ix) or delivery as security in connection with any borrowing by the Funds requiring a pledge of assets by the Funds;

(x) in connection with trading in options and futures contracts, including delivery as original margin and variation margin;

(xi) in connection with the lending of foreign securities; and

(xii) for any other proper purpose, but only upon receipt of Proper Instructions specifying the foreign securities to be delivered, setting forth the purpose for which such delivery is to be made, declaring such purpose to be a proper Fund purpose, and naming the person or persons to whom delivery of such securities shall be made.

3.4.2. Payment of Fund Monies . Upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall pay out, or direct the respective Foreign Sub-Custodian or the respective Foreign Securities System to pay out, monies of a Fund in the following cases only:

(i) upon the purchase of foreign securities for the Fund, unless otherwise directed by Proper Instructions, by (A) delivering money to the seller thereof or to a dealer therefor (or an agent for such seller or dealer) against expectation of receiving later delivery of such foreign securities; or (B) in the case of a purchase effected through a Foreign Securities System, in accordance with the rules governing the operation of such Foreign Securities System;

(ii) in connection with the conversion, exchange or surrender of foreign securities of the Fund;

(iii) for the payment of any expense or liability of the Fund, including but not limited to the following payments: interest, taxes, investment advisory fees, transfer agency fees, fees under this Agreement, legal fees, accounting fees, and other operating expenses;

(iv) for the purchase or sale of foreign exchange or foreign exchange contracts for the Fund, including transactions executed with or through the Custodian or its Foreign Sub-Custodians;

(v) in connection with trading in options and futures contracts, including delivery as original margin and variation margin;

(vii) in connection with the borrowing or lending of foreign securities; and

(viii) for any other proper Fund purpose, but only upon receipt of Proper Instructions specifying the amount of such payment, setting forth the purpose for which such payment is to be made, declaring such purpose to be a proper Fund purpose, and naming the person or persons to whom such payment is to be made.

3.4.3. Market Conditions. Notwithstanding any provision of this Agreement to the contrary, settlement and payment for foreign securities received for the account of the Funds and delivery of foreign securities maintained for the account of the Funds may be effected in accordance with the customary established securities trading or processing practices and procedures in the country or market in which the transaction occurs, including, without limitation, delivering foreign securities to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) with the expectation of receiving later payment for such foreign securities from such purchaser or dealer.

Section 3.5 Registration of Foreign Securities. The foreign securities maintained in the custody of a Foreign Custodian (other than bearer securities) shall be registered in the name of the applicable Fund or in the name of the Custodian or in the name of any Foreign Sub-Custodian or in the name of any nominee of the foregoing, and the Fund agrees to hold any such nominee harmless from any liability as a holder of record of such foreign securities. The Custodian or a Foreign Sub-Custodian shall not be obligated to accept securities on behalf of a Fund under the terms of this Agreement unless the form of such securities and the manner in which they are delivered are in accordance with reasonable market practice.

Section 3.6 Bank Accounts. A bank account or bank accounts opened and maintained outside the United States on behalf of a Fund with a Foreign Sub-Custodian shall be subject only to draft or order by the Custodian or such Foreign Sub-Custodian, acting pursuant to the terms of this Agreement to hold cash received by or from or for the account of the Fund.

Section 3.7 Collection of Income. T he Custodian shall use reasonable commercial efforts to collect all income and other payments with respect to the foreign securities held hereunder to which the Funds shall be entitled and shall credit such income, as

collected, to the applicable Fund. In the event that extraordinary measures are required to collect such income, the Fund and the Custodian shall consult as to such measures and as to the compensation and expenses of the Custodian relating to such measures.

Section 3.8 Proxies. W ith respect to the foreign securities held under this Section 3, the Custodian will use reasonable commercial efforts to facilitate the exercise of voting and other shareholder proxy rights, subject always to the laws, regulations and practical constraints that may exist in the country where such securities are issued. The Fund acknowledges that local conditions, including lack of regulation, onerous procedural obligations, lack of notice and other factors may have the effect of severely limiting the ability of the Fund to exercise shareholder rights.

Section 3.9 Communications Relating to Foreign Securities. The Custodian shall transmit promptly to the Fund written information (including, without limitation, pendency of calls and maturities of foreign securities and expirations of rights in connection therewith) received by the Custodian in connection with the foreign securities being held for the account of the Fund. With respect to tender or exchange offers, the Custodian shall transmit promptly to the Fund written information so received by the Custodian in connection with the foreign securities whose tender or exchange is sought or from the party (or its agents) making the tender or exchange offer.

Section 3.10 Liability of Foreign Sub-Custodians and Foreign Securities Systems. Each agreement pursuant to which the Custodian employs as a Foreign Sub-Custodian shall, to the extent possible, require the Foreign Sub-Custodian to exercise reasonable care in the performance of its duties and, to the extent possible, to indemnify, and hold harmless, the Custodian from and against any loss, damage, cost, expense, liability or claim arising out of or in connection with the Foreign Sub-Custodian`s performance of such obligations. At the Fund`s election, the Funds shall be entitled to be subrogated to the rights of the Custodian with respect to any claims against a Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense, liability or claim if and to the extent that the Funds have not been made whole for any such loss, damage, cost, expense, liability or claim.

Section 3.11 Tax Law. The Custodian shall have no responsibility or liability for any obligations now or hereafter imposed on the Fund or the Custodian as custodian of the Funds by

the tax law of the United States or of any state or political subdivision thereof. It shall be the responsibility of the Fund to notify the Custodian of the obligations imposed on the Fund or the Custodian as custodian of the Funds by the tax law of countries set forth on Schedule A hereto, including responsibility for withholding and other taxes, assessments or other governmental charges, certifications and governmental reporting. The sole responsibility of the Custodian with regard to such tax law shall be to use reasonable efforts to assist the Fund with respect to any claim for exemption or refund under the tax law of countries for which the Fund has provided such information.

Section 4 . Payments for Repurchases or Redemptions and Sales of Shares.

From such funds as may be available for the purpose, the Custodian shall, upon receipt of instructions from the Transfer Agent, make funds available for payment to holders of Shares which have delivered to the Transfer Agent a request for redemption or repurchase of their Shares. In connection with the redemption or repurchase of Shares, the Custodian is authorized upon receipt of, and in accordance with, instructions from the Transfer Agent to wire funds to or through a commercial bank designated by the redeeming shareholders. In connection with the redemption or repurchase of Shares, the Custodian shall honor checks drawn on the Custodian by a holder of Shares, which checks have been furnished by the Fund to the holder of Shares, when presented to the Custodian in accordance with such written procedures and controls as may be mutually agreed upon from time to time between the Fund and the Custodian.

The Custodian shall receive from the distributor for the Shares or from the Transfer Agent and deposit to the account of the Fund such payments as are received by the distributor or the Transfer Agent, as the case may be, for Shares issued or sold from time to time. The Custodian will notify the Fund and the Transfer Agent of any payments for Shares received by it from time to time.

Section 5 . Duties of Custodian with Respect to the Books of Account and Calculation of Net Asset Value and Net Income.

The Custodian shall cooperate with and supply necessary information to the entity or entities appointed by the Board to keep the books of account of the Fund and/or compute the net asset value per Share of the outstanding Shares or, if directed in writing

to do so by the Fund, shall itself keep such books of account and/ or compute such net asset value per Share. If so directed, the Custodian shall also (i) calculate daily the net income of the Fund as described in the Prospectus and shall advise the Fund and the Transfer Agent daily of the total amounts of such net income, and/ or (ii) advise the Transfer Agent periodically of the division of such net income among its various components. The calculations of the net asset value per share and the daily income of the Fund shall be made at the time or times described from time to time in the Prospectus.

Section 6. Proper Instructions.

"Proper Instructions," as such term is used throughout this Agreement, means either (i) a writing, including a facsimile transmission, signed by one or more persons as set forth on, and in accordance with, an "Authorized Persons List," as such term is defined herein (each such instruction a "Written Proper Instruction"), (ii) a "Client Originated Electronic Financial Instruction," as such term is defined in the Data Access Services Addendum hereto, given in accordance with the terms of such Addendum, or (iii) instructions received by the Custodian from a third party in accordance with any three-party agreement which requires a segregated asset account in accordance with Section 2.11.

Each Written Proper Instruction shall set forth a brief description of the type of transaction involved (choosing from among the types of transactions set forth on the Authorized Persons List), including a specific statement of the purpose for which such action is requested, and any modification to a Written Proper Instruction must itself be a Written Proper Instruction and subject to all the provisions herein relating to Written Proper Instructions. The Fund will provide the Custodian with an "Authorized Persons List," which list shall set forth (a) the names of the individuals (each an "Authorized Person") who are authorized by the Board to give Written Proper Instructions with respect to the transactions described therein, and (b) the number of Authorized Persons whose signature or approval, as the case may be, is necessary for the Custodian to be able to act in accordance with such Written Proper Instructions with respect to a particular type of transaction. The Custodian may accept oral instructions or instructions delivered via electronic mail as Proper Instructions if the Custodian reasonably believes such instructions to have been given by an Authorized Person or Persons (as appropriate to the type of transaction); provided, however, that in no event will instructions delivered orally or via electronic mail be considered Proper

Instructions with respect to transactions involving the movement of cash, securities or other assets of a Fund. The Custodian shall be entitled to rely upon instructions given in accordance with an Authorized Persons List until it actually receives written notice from the Board of the applicable Fund to the contrary.

Section 7. Evidence of Authority.

Subject to Section 9 hereof, the Custodian shall be protected in acting upon any instructions, notice, request, consent, certificate or other instrument or paper reasonably and in good faith believed by it to be genuine and to have been properly executed by or on behalf of the Fund. The Custodian may receive and accept a copy of a vote of the Board, certified by the secretary or an assistant secretary of the applicable Fund, as conclusive evidence (a) of the authority of any person to act in accordance with such vote or (b) of any determination or of any action by the Board described in such vote, and such vote may be considered as in full force and effect until receipt by the Custodian of written notice to the contrary.

Section 8. Actions Permitted without Express Authority.

The Custodian may in its discretion and without express authority from the Fund:

1) make payments to itself or others for minor expenses of handling investments or other similar items relating to its duties under this Agreement, provided that all such payments shall be accounted for to the Fund;

2) surrender investments in temporary form for investments in definitive form;

3) endorse for collection, in the name of the Fund, checks, drafts and other negotiable instruments; and

4) in general, attend to all non-discretionary details in connection with the sale, exchange, substitution, purchase, transfer and other dealings with the investments and property of the Fund except as otherwise directed by the Board.

Section 9 . Responsibility of Custodian.

The Custodian shall not be responsible for the title, validity or genuineness of any property or evidence of title thereto received by it or delivered by it pursuant to this Agreement and shall be held harmless in acting upon any notice, request, consent, certificate or other instrument reasonably believed by it to be genuine and to be signed by the proper party or parties, including any futures commission merchant acting pursuant to the terms of a three-party futures or options agreement. Notwithstanding anything to the contrary herein, the Custodian shall be held to the exercise of reasonable care in carrying out the provisions of this Agreement, and it shall be kept indemnified by and shall be without liability to the Fund for any action taken or omitted by it in good faith without negligence. In order for the indemnification provision contained in this Section to apply, it is understood that if in any case the Fund may be asked by the Custodian to indemnify or hold the Custodian harmless, the Fund shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that the Custodian will use reasonable care to identify, and notify the Fund promptly concerning, any situation which presents or appears likely to present the probability of such a claim for indemnification. The Fund shall have the option to defend the Custodian against any claim which may be the subject of a claim for indemnification hereunder, and in the event that the Fund so elects, it will notify the Custodian thereof and, thereupon, (i) the Fund shall take over complete defense of the claim and (ii) the Custodian shall initiate no further legal or other expenses with respect to such claim. The Custodian shall in no case confess any claim or make any compromise with respect to any claim for which it will seek indemnity from the Fund except with the Fund's prior written consent. Nothing herein shall be construed to limit any right or cause of action on the part of the Custodian under this Agreement which is independent of any right or cause of action on the part of the Fund. The Custodian shall be entitled to rely on and may act upon advice of counsel (who may be counsel for the Fund or other such counsel as agreed to by the parties) on all matters, and shall be without liability for any action reasonably taken or omitted pursuant to such advice. The Custodian shall be entitled to rely upon, and shall have no duty of inquiry with respect to, the accuracy of any representation or warranty given to it by the Fund or any duly-authorized employee or agent thereof, and shall be without liability for any action reasonably taken or omitted by it in reliance thereon. Regardless of whether assets held pursuant to this Agreement are maintained in the custody of a foreign banking institution, a foreign securities

depository, or a branch or affiliate of a U.S. bank, the Custodian shall not be liable for any loss, damage, cost, expense, liability or claim resulting from, or caused by, the direction of or authorization by the Fund to maintain custody of any securities or cash or other property of the Fund in a foreign country including, but not limited to, losses resulting from the nationalization or expropriation of assets, the imposition of currency controls or restrictions, acts of war or terrorism or civil unrest, riots, revolutions, work stoppages, natural disasters or other similar events or acts.

Except as may arise from the Custodian`s own negligence or willful misconduct or the negligence or willful misconduct of a sub-custodian or agent, the Custodian shall be without liability to the Fund for any loss, liability, claim or expense resulting from or caused by: (i) events or circumstances beyond the reasonable control of the Custodian or any sub-custodian or Securities System or any agent or nominee of any of the foregoing, including, without limitation, the interruption, suspension or restriction of trading on or the closure of any securities market, power or other mechanical or technological failures or interruptions, computer viruses or communications disruptions; (ii) errors by the Fund or its duly- appointed investment advisor in their instructions to the Custodian provided such instructions have been given in accordance with this Agreement; (iii) the insolvency of or acts or omissions by a Securities System; (iv) any delay or failure of any broker, agent or intermediary, central bank or other commercially prevalent payment or clearing system to deliver to the Custodian`s sub- custodian or agent securities purchased or in the remittance or payment made in connection with securities sold; (v) any delay or failure of any company, corporation or other body in charge of registering or transferring securities in the name of the Custodian, the Fund, the Custodian`s sub-custodians, nominees or agents, or any consequential losses arising out of such delay or failure to transfer such securities, including non-receipt of bonus, dividends and rights and other accretions or benefits; (vi) delays or inability to perform its duties due to any disorder in market infrastructure with respect to any particular security or Securities System; and (vii) changes to any provision of any present or future law or regulation or order of the United States, or any state thereof, or of any other country or political subdivision thereof, or any order of any court of competent jurisdiction.

The Custodian shall be liable for the acts or omissions of a foreign banking institution acting as a sub-custodian hereunder to the same extent as set forth with respect to sub-custodians generally in this Agreement.

If the Fund requires the Custodian to take any action with respect to investments, which action involves the payment of money or which action may, in the reasonable opinion of the Custodian, result in the Custodian or its nominee assigned to the Fund being liable for the payment of money or incurring liability of some other form, the Fund, as a prerequisite to requiring the Custodian to take such action, shall provide indemnity to the Custodian in an amount and form satisfactory to it.

If the Custodian, or any of its affiliates, subsidiaries or agents, advances cash or investments to the Fund for any purpose (including but not limited to securities settlements, foreign exchange contracts and assumed settlement), or in the event that the Custodian or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Agreement, except such as may arise from its or its nominee`s own negligent action, negligent failure to act or willful misconduct, any property at any time held for the account of the Fund shall be security therefor, and should the Fund fail to repay the Custodian promptly the Custodian shall be entitled to utilize available cash and to dispose of the Fund assets to the extent necessary to obtain reimbursement, provided that the Custodian gives the Fund reasonable notice to repay such cash or securities advanced, and provided further that such notice requirement shall not preclude the Custodian`s right to assert and execute on such lien.

Except as may arise from the Custodian`s own negligence or willful misconduct, or the negligence or willful misconduct of a subcustodian or agent appointed by the Custodian, the Fund agrees to indemnify and hold the Custodian harmless from and against any and all costs, expenses, losses, damages, charges, reasonable counsel fees, payments and liabilities which may be asserted against the Custodian (i) acting in accordance with any Proper Instruction, or (ii) for any acts or omissions of Chase Manhattan Bank N.A .

Notwithstanding any provision herein to the contrary, to the extent the Custodian is found to be liable hereunder for any loss, liability, claim, expense or damage, the Custodian shall be liable only for such loss, liability, claim, expense or damage which was reasonably foreseeable.

Section 10. Effective Period, Termination and Amendment.

This Agreement shall become effective as of the date of its execution, shall continue in full force and effect until terminated as hereinafter provided, may be amended at any time by mutual agreement of the parties hereto, and may be terminated by either party by an instrument in writing delivered or mailed, postage prepaid to the other party, such termination to take effect not sooner than thirty (30) days after the date of such delivery or mailing in the case of a termination by the Fund, and not sooner than one hundred eighty (180) days after the date of such delivery or mailing in the case of termination by the Custodian; provided, however that the Custodian shall not act under Section 2.9 hereof in the absence of receipt of an initial certificate of a Fund`s secretary, or an assistant secretary thereof, that the Board has approved the initial use of a particular U.S. Securities System, as required by the 1940 Act or any applicable Rule thereunder, and that the Custodian shall not act under Section 2.10 hereof in the absence of receipt of an initial certificate of a Fund`s secretary, or an assistant secretary thereof, that the Board has approved the initial use of the Direct Paper System; provided further, however, that the Fund shall not amend or terminate this Agreement in contravention of any applicable federal or state regulations, or any provision of the Fund`s articles of incorporation, agreement of trust, by-laws and/or registration statement (as applicable, the "Governing Documents" ); and further provided that the Fund may at any time by action of its Board (i) substitute another bank or trust company for the Custodian by giving notice as described above to the Custodian, or (ii) immediately terminate this Agreement in the event of the appointment of a conservator or receiver for the Custodian by the United States Comptroller of the Currency or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction.

Upon termination of the Agreement, the Fund shall pay to the Custodian such compensation as may be due as of the date of such termination and shall likewise reimburse the Custodian for its reasonable costs, expenses and disbursements, provided that the Custodian shall not incur any costs, expenses or disbursements specifically in connection with such termination unless it has received prior approval from the Fund, such approval not to be unreasonably withheld.

Section 11. Successor Custodian.

If a successor custodian shall be appointed by the Board, the Custodian shall, upon termination, deliver to such successor custodian at the offices of the Custodian, duly endorsed and in the form for transfer, all investments and other properties then held by it hereunder, and shall transfer to an account of the successor custodian all of the Fund`s investments held in a Securities System. If no such successor custodian shall be appointed, the Custodian shall, in like manner, upon receipt of a copy of a vote of the Board, certified by the secretary or an assistant secretary of the applicable Fund, deliver at the offices of the Custodian and transfer such investments, funds and other properties in accordance with such vote. In the event that no written order designating a successor custodian or certified copy of a vote of the Board shall have been delivered to the Custodian on or before the date when such termination shall become effective, then the Custodian shall have the right to deliver to a bank or trust company, which is a "bank" as defined in the 1940 Act, doing business in Boston, Massachusetts, or New York, New York, of its own selection and having an aggregate capital, surplus, and undivided profits, as shown by its last published report, of not less than $100,000,000, all property held by the Custodian under this Agreement and to transfer to an account of such successor custodian all of the Fund`s investments held in any Securities System; thereafter, such bank or trust company shall be the successor of the Custodian under this Agreement.

In the event that any property held pursuant to this Agreement remains in the possession of the Custodian after the date of termination hereof owing to failure of the Fund to procure the certified copy of the vote referred to or of the Board to appoint a successor custodian, the Custodian shall be entitled to fair compensation for its services during such period as the Custodian retains possession of such property, and the provisions of this Agreement relating to the duties and obligations of the Custodian shall remain in full force and effect.

Section 12. General.

Section 12.1 Compensation of Custodian. The Custodian shall be entitled to compensation for its services and reimbursement of its expenses as Custodian as agreed upon from time to time between the Fund and the Custodian.

Section 12.2 Massachusetts Law to Apply. This Agreement shall be construed and the provisions thereof interpreted under and in accordance with laws of The Commonwealth of Massachusetts.

Section 12.3 Records . The Custodian shall create and maintain all records relating to its activities and obligations under this Agreement in such manner as will meet the obligations of the Fund under the 1940 Act, with particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder. All such records shall be the property of the Fund and shall at all times during the regular business hours of the Custodian be open for inspection by duly authorized officers, employees or agents of the Fund and employees and agents of the SEC. The Custodian shall, at the Fund`s request, supply the Fund with a tabulation of investments owned by the Fund and held by the Custodian hereunder, and shall, when requested to do so by an officer of the Fund, and for such compensation as shall be agreed upon between the Fund and the Custodian, include certificate numbers in such tabulations.

Section 12.4 Opinion of Fund`s Independent Accountant. The Custodian shall take all reasonable action as the Fund may from time to time request to obtain from year to year favorable opinions from the Fund`s independent accountants with respect to its activities hereunder in connection with the preparation of the Fund`s Form N-1A, the preparation of the Fund`s Form N-SAR, the preparation of any other annual reports to the SEC with respect to the Fund, and with respect to any other requirements of the SEC.

Section 12.5 Interpretive and Additional Provisions. In connection with the operation of this Agreement, the Custodian and the Fund may from time to time agree on such provisions interpretive of or in addition to the provisions of this Agreement as may in their joint opinion be consistent with the general tenor of this Agreement. Any such interpretive or additional provisions shall be in a writing signed by both parties and shall be annexed hereto, provided that no such interpretive or additional provisions shall contravene any applicable federal or state regulations or any provision of the Governing Documents. No interpretive or additional provisions made as provided in the preceding sentence shall be deemed to be an amendment of this Agreement.

Section 12.6 Bond. The Custodian shall at all times maintain a bond in such form and amount as is acceptable to the Fund, which shall be issued by a reputable fidelity insurance company authorized to do business in the place where such bond is issued, against larceny and embezzlement, covering each officer and employee of

the Custodian who may, singly or jointly with others, have access to securities or funds of the Fund, either directly or through authority to receive and carry out any certificate instruction, order request, note or other instrument required or permitted by this Agreement. The Custodian agrees that it shall not cancel, terminate or modify such bond insofar as it adversely affects the Fund except after written notice given to the Fund not less than 10 days prior to the effective date of such cancellation, termination or modification. The Custodian shall, upon request, furnish to the Fund a copy of each such bond and each amendment thereto.

Section 12.7 Confidentiality. The Custodian agrees to treat all records and other information relative to the Fund and its prior, present or future shareholders as confidential, and the Custodian, on behalf of itself and its employees, agrees to keep confidential all such information except, after prior notification to and approval in writing by the Fund, which approval shall not be unreasonably withheld and may not be withheld where the Custodian may be exposed to civil or criminal contempt proceedings for failure to comply when requested to divulge such information by duly constituted authorities, or when so requested by the Fund.

Section 12.8 Exemption from Lien. Except as set forth in Section 9 hereof, the securities and other assets held by the Custodian hereunder shall not be subject to lien or charge of any kind in favor of the Custodian or any person claiming through the Custodian. Nothing herein shall be deemed to deprive the Custodian of its right to invoke any and all remedies available at law or equity to collect amounts due it under this Agreement.

Section 12.9 Assignment . This Agreement may not be assigned by either party without the written consent of the other, except that either party may assign its rights and obligations hereunder to a party controlling, controlled by, or under common control with such party.

Section 12.10 Prior Agreements. Without derogating the rights established thereunder prior to the date of this Agreement, this Agreement supersedes and terminates, as of the date hereof, all prior agreements between the Fund and the Custodian relating to the custody of Fund assets.

S ection 12.11 Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all such counterparts taken together shall constitute but one and the same Agreement.

Section 12.12 Notices . Any notice, instruction or other instrument required to be given hereunder may be delivered in person to the offices of the parties as set forth herein during normal business hours or delivered prepaid registered mail or by telex, cable or telecopy to the parties at the following addresses or such other addresses as may be notified by any party from time to time.

To any Fund:

c/o T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Attention: Carmen Deyesu
Telephone: 410-345-6658
Telecopy: 410-685-8827/8830

To the Custodian:

State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171, U.S.A.
Attention: Carol C. Ayotte
Telephone: 617-985-6894
Telecopy: 617-537-6321

Such notice, instruction or other instrument shall be deemed to have been served in the case of a registered letter at the expiration of five business days after posting, in the case of cable twenty-four hours after dispatch and, in the case of telex, immediately on dispatch and if delivered outside normal business hours it shall be deemed to have been received at the next time after delivery when normal business hours commence and in the case of cable, telex or telecopy on the business day after the receipt thereof. Evidence that the notice was properly addressed, stamped and put into the post shall be conclusive evidence of posting.

Section 12.13 Entire Agreement. This Agreement (including all schedules, appendices, exhibits and attachments hereto) constitutes the entire Agreement between the parties with respect to the subject matter hereof.

Section 12.14 Headings Not Controlling. Headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement.

S ection 12.15 Survival. All provisions regarding indemnification, confidentiality, warranty, liability and limits thereon shall survive following the expiration or termination of this Agreement.

Section 12.16 Severability. In the event any provision of this Agreement is held illegal, void or unenforceable, the balance shall remain in effect.

Section 12.17 The Parties. All references herein to the "Fund" are to each of the funds listed on Appendix A hereto individually, as if this Agreement were between such individual Fund and the Custodian. In the case of a series fund or trust, all references to the "Fund" are to the individual series or portfolio of such fund or trust, or to such fund or trust on behalf of the individual series or portfolio, as appropriate. Any reference in this Agreement to "the parties" shall mean the Custodian and such other individual Fund as to which the matter pertains. Each Fund hereby represents and warranties that (i) it has the requisite power and authority under applicable laws and its Governing Documents to enter into and perform this Agreement, (ii) all requisite proceedings have been taken to authorize it to enter into and perform this Agreement, and (iii) its entrance into this Agreement shall not cause a material breach or be in material conflict with any other agreement or obligation of the Fund or any law or regulation applicable to it.

Section 12.18 Directors and Trustees . It is understood and is expressly stipulated that neither the holders of Shares nor any member of the Board be personally liable hereunder. Whenever reference is made herein to an action required to be taken by the Board, such action may also be taken by the Board`s executive committee.

Section 12.19 Massachusetts Business Trust . With respect to any Fund which is a party to this Agreement and which is organized as a Massachusetts business trust, the term "Fund" means and refers to the trustees from time to time serving under the applicable trust agreement of such trust, as the same may be amended from time to time (the "Declaration of Trust" ). It is expressly agreed that the obligations of any such Fund hereunder shall not be binding upon any of the trustees, shareholders, nominees, officers, agents or employees of the Fund personally, but bind only the trust property of the Fund as set forth in the applicable Declaration of Trust. In the case of each Fund which is a Massachusetts business trust (in each case, a "Trust" ), the execution and delivery of this Agreement on behalf of the Trust has been authorized by the trustees, and signed by an authorized officer, of the Trust, in each case acting in such capacity and not individually, and neither such authorization by the trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them

individually, but shall bind only the trust property of the Trust as provided in its Declaration of Trust.

Section 12.20 Reproduction of Documents. This Agreement and all schedules, exhibits, attachments and amendments hereto may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties hereto all/each agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

Section 12.21 Shareholder Communications Election. SEC Rule 14b-2 requires banks which hold securities for the account of customers to respond to requests by issuers of securities for the names, addresses and holdings of beneficial owners of securities of that issuer held by the bank unless the beneficial owner has expressly objected to disclosure of this information. In order to comply with the rule, the Custodian needs the Fund to indicate whether it authorizes the Custodian to provide the Fund`s name, address, and share position to requesting companies whose securities the Fund owns. If the Fund tells the Custodian "no", the Custodian will not provide this information to requesting companies. If the Fund tells the Custodian "yes" or does not check either "yes" or "no" below, the Custodian is required by the rule to treat the Fund as consenting to disclosure of this information for all securities owned by the Fund or any funds or accounts established by the Fund. For the Fund`s protection, the Rule prohibits the requesting company from using the Fund`s name and address for any purpose other than corporate communications. Please indicate below whether the Fund consents or objects by checking one of the alternatives below.

YES [ ] The Custodian is authorized to release the Fund`s name, address, and share positions.

NO [X] The Custodian is not authorized to release the Fund`s name, address, and share positions.

DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT

Addendum to the Custodian Agreement (as defined below) between each fund listed on Appendix A to the Custodian Agreement, as such Appendix A is amended from time to time (each such fund listed on Appendix A shall be individually referred to herein as the "Fund" ), and State Street Bank and Trust Company ( "State Street" ).

PREAMBLE

WHEREAS, State Street has been appointed as custodian of certain assets of the Fund pursuant to a certain Custodian Agreement (the "Custodian Agreement" ) dated as of January 28, 1998, and amended thereafter from time to time;

WHEREAS, State Street has developed and utilizes proprietary accounting and other systems, including State Street`s proprietary Multicurrency HORIZON R Accounting System, in its role as custodian of the Fund, and maintains certain Fund-related data ( "Fund Data" ) in databases under the control and ownership of State Street (the "Data Access Services" ); and

WHEREAS, State Street makes available to the Fund (and certain of the Fund`s agents as set forth herein) certain Data Access Services solely for the benefit of the Fund, and intends to provide additional services, consistent with the terms and conditions of this Addendum.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the parties agree as follows:

1. SYSTEM AND DATA ACCESS SERVICES

a. System . Subject to the terms and conditions of this Addendum and solely for the purpose of providing access to Fund Data as set forth herein, State Street hereby agrees to provide the Fund, or certain third parties approved by State Street that serve as the Fund`s investment advisors, investment managers or fund accountants (the "Fund Accountants" ) or as the Fund`s independent auditors (the "Auditor" ), with access to State Street`s Multicurrency HORIZON R Accounting System and the other information systems described in Attachment A (collectively, the "System" ) on a remote basis solely on the computer hardware, system software and telecommunication links described in Attachment B (the "Designated Configuration" ) or on any designated substitute or back-up equipment

configuration consented to in writing by State Street, such consent not to be unreasonably withheld.

b. Data Access Services . State Street agrees to make available to the Fund the Data Access Services subject to the terms and conditions of this Addendum and such data access operating standards and procedures as may be issued by State Street from time to time. The Fund shall be able to access the System to (i) originate electronic instructions to State Street in order to (a) effect the transfer or movement of cash or securities held under custody by State Street or (b) transmit accounting or other information (the transactions described in (i)(a) and (i)(b) above are referred to herein as "Client Originated Electronic Financial Instructions" ), and (ii) access data for the purpose of reporting and analysis, which shall all be deemed to be Data Access Services for purposes of this Addendum.

c. Additional Services . State Street may from time to time agree to make available to the Fund additional Systems that are not described in the attachments to this Addendum. In the absence of any other written agreement concerning such additional systems, the term "System" shall include, and this Addendum shall govern, the Fund`s access to and use of any additional System made available by State Street and/or accessed by the Fund.

2. NO USE OF THIRD PARTY SYSTEMS-LEVEL SOFTWARE

State Street and the Fund acknowledge that in connection with the Data Access Services provided under this Addendum, the Fund will have access, through the Data Access Services, to Fund Data and to functions of State Street`s proprietary systems; provided, however that in no event will the Fund have direct access to any third party systems-level software that retrieves data for, stores data from, or otherwise supports the System.

3. LIMITATION ON SCOPE OF USE

a. Designated Equipment; Designated Locations . The System and the Data Access Services shall be used and accessed solely on and through the Designated Configuration at the offices of the Fund or the Fund Accountants in Baltimore, Maryland or Owings Mills, Maryland ( "Designated Locations" ).

b. Designated Configuration; Trained Personnel . State Street and the Fund shall be responsible for supplying, installing and maintaining the Designated Configuration at the Designated

Locations. State Street and the Fund agree that each will engage or retain the services of trained personnel to enable both parties to perform their respective obligations under this Addendum. State Street agrees to use commercially reasonable efforts to maintain the System so that it remains serviceable, provided, however, that State Street does not guarantee or assure uninterrupted remote access use of the System.

c. Scope of Use . The Fund will use the System and the Data Access Services only for the processing of securities transactions, the keeping of books of account for the Fund and accessing data for purposes of reporting and analysis. The Fund shall not, and shall cause its employees and agents not to (i) permit any unauthorized third party to use the System or the Data Access Services, (ii) sell, rent, license or otherwise use the System or the Data Access Services in the operation of a service bureau or for any purpose other than as expressly authorized under this Addendum, (iii) use the System or the Data Access Services for any fund, trust or other investment vehicle), other than as set forth herein, without the prior written consent of State Street, (iv) allow access to the System or the Data Access Services through terminals or any other computer or telecommunications facilities located outside the Designated Locations, (v) allow or cause any information (other than portfolio holdings, valuations of portfolio holdings, and other information reasonably necessary for the management or distribution of the assets of the Fund) transmitted from State Street`s databases, including data from third party sources, available through use of the System or the Data Access Services to be redistributed or retransmitted to another computer, terminal or other device for other than use for or on behalf of the Fund or (vi) modify the System in any way, including without limitation developing any software for or attaching any devices or computer programs to any equipment, system, software or database which forms a part of or is resident on the Designated Configuration.

d. Other Locations . Except in the event of an emergency or of a planned System shutdown, the Fund`s access to services performed by the System or to Data Access Services at the Designated Locations may be transferred to a different location only upon the prior written consent of State Street. In the event of an emergency or System shutdown, the Fund may use any back-up site included in the Designated Configuration or any other back-up site agreed to by State Street, which agreement will not be unreasonably withheld. The Fund may secure from State Street the right to access the System or the Data Access Services through computer and telecommunications facilities or devices complying with the Designated Configuration

at additional locations only upon the prior written consent of State Street and on terms to be mutually agreed upon by the parties.

e. Title . Title and all ownership and proprietary rights to the System, including any enhancements or modifications thereto, whether or not made by State Street, are and shall remain with State Street.

f. No Modification . Without the prior written consent of State Street, the Fund shall not modify, enhance or otherwise create derivative works based upon the System, nor shall the Fund reverse engineer, decompile or otherwise attempt to secure the source code for all or any part of the System.

g. Security Procedures . The Fund shall comply with data access operating standards and procedures and with user identification or other password control requirements and other security procedures as may be issued from time to time by State Street for use of the System on a remote basis and to access the Data Access Services. The Fund shall have access only to the Fund Data and authorized transactions agreed upon from time to time by State Street and, upon notice from State Street, the Fund shall discontinue remote use of the System and access to Data Access Services for any security reasons cited by State Street; provided, that, in such event, State Street shall, for a period not less than 180 days (or such other shorter period specified by the Fund) after such discontinuance, assume responsibility to provide accounting services under the terms of the Custodian Agreement.

h. Inspections . State Street shall have the right to inspect the use of the System and the Data Access Services by the Fund, the Fund Accountants and the Auditor to ensure compliance with this Addendum. The on-site inspections shall be upon prior written notice to Fund, the Fund Accountants and the Auditor and at reasonably convenient times and frequencies so as not to result in an unreasonable disruption of the Fund`s or the Fund Accountants` or the Auditor respective businesses.

4. PROPRIETARY INFORMATION

a. Proprietary Information . The Fund acknowledges and State Street represents that the System and the databases, computer programs, screen formats, report formats, interactive design techniques, documentation and other information made available to the Fund by State Street as part of the Data Access Services and through the use of the System constitute copyrighted, trade secret,

or other proprietary information of substantial value to State Street. Any and all such information provided by State Street to the Fund shall be deemed proprietary and confidential information of State Street (hereinafter "Proprietary Information" ). The Fund agrees that it will hold such Proprietary Information in the strictest confidence and secure and protect it in a manner consistent with its own procedures for the protection of its own confidential information and to take appropriate action by instruction or agreement with its employees or agents who are permitted access to the Proprietary Information to satisfy its obligations hereunder. The Fund further acknowledges that State Street shall not be required to provide the Fund Accountants or the Auditor with access to the System unless it has first received from the Fund Accountants and the Auditor an undertaking with respect to State Street`s Proprietary Information in the form of Attachment C and/or Attachment C-1 to this Addendum. The Fund shall use all commercially reasonable efforts to assist State Street in identifying and preventing any unauthorized use, copying or disclosure of the Proprietary Information or any portions thereof or any of the logic, formats or designs contained therein.

b. Cooperation . Without limitation of the foregoing, the Fund shall advise State Street immediately in the event the Fund learns or has reason to believe that any person to whom the Fund has given access to the Proprietary Information, or any portion thereof, has violated or intends to violate the terms of this Addendum, and the Fund will, at its reasonable expense, cooperate with State Street in seeking injunctive or other equitable relief in the name of the Fund or State Street against any such person.

c. Injunctive Relief . The Fund acknowledges that the disclosure of any Proprietary Information, or of any information which at law or equity ought to remain confidential, will immediately give rise to continuing irreparable injury to State Street inadequately compensable in damages at law. In addition, State Street shall be entitled to obtain immediate injunctive relief against the breach or threatened breach of any of the foregoing undertakings, in addition to any other legal remedies which may be available.

d. Survival . The provisions of this Section 4 shall survive the termination of this Addendum.

5. LIMITATION ON LIABILITY

a. Standard of Care and Limitation on Amount and Time for Bringing Action . State Street shall be held to a standard of reasonable care with respect to all of its duties and obligations under this Addendum. The Fund agrees that any liability of State Street to the Fund or any third party arising with respect to the System or State Street`s provision of Data Access Services under this Data Access Services Addendum shall be limited to the amount paid by the Fund for the preceding 24 months for such services. The foregoing limitation shall relate solely to State Street`s provision of the Data Access Services pursuant to this Addendum and is not intended to limit State Street`s responsibility to perform in accordance with the Custodian Agreement, including its duty to act in accordance with Proper Instructions. In no event shall State Street be liable to the Fund or any other party pursuant to this Addendum for any special, indirect, punitive or consequential damages even if advised of the possibility of such damages. No action, regardless of form, arising out of the terms of this Addendum may be brought by the Fund more than two years after the Fund has knowledge that the cause of action has arisen.

b. Limited Warranties . NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE MADE BY STATE STREET.

c. Third-Party Data . Organizations from which State Street may obtain certain data included in the System or the Data Access Services are solely responsible for the contents of such data, and State Street shall have no liability for claims arising out of the contents of such third-party data, including, but not limited to, the accuracy thereof.

d. Regulatory Requirements . As between State Street and the Fund, the Fund shall be solely responsible for the accuracy of any accounting statements or reports produced using the Data Access Services and the System and the conformity thereof with any requirements of law.

e. Force Majeure . Neither party shall be liable for any costs or damages due to delay or nonperformance under this Data Access Services Addendum arising out of any cause or event beyond such party`s control, including, without limitation, cessation of services hereunder or any damages resulting therefrom to the other party as a result of work stoppage, power or other mechanical

failure, computer virus, natural disaster, governmental action, or communication disruption.

6. INDEMNIFICATION

The Fund agrees to indemnify and hold State Street harmless from any loss, damage or expense including reasonable attorney`s fees, (a "loss") suffered by State Street arising from (i) the negligence or willful misconduct in the use by the Fund of the Data Access Services or the System, including any loss incurred by State Street resulting from a security breach at the Designated Locations or committed by the Fund`s employees or agents or the Fund Accountants or the and Auditor, and (ii) any loss resulting from incorrect Client Originated Electronic Financial Instructions. State Street shall be entitled to rely on the validity and authenticity of Client Originated Electronic Financial Instructions without undertaking any further inquiry as long as such instruction is undertaken in conformity with security procedures established by State Street from time to time.

7. FEES

Fees and charges for the use of the System and the Data Access Services and related payment terms shall be as set forth in the custody fee schedule in effect from time to time between the parties (the "Fee Schedule" ). Any tariffs, duties or taxes imposed or levied by any government or governmental agency by reason of the transactions contemplated by this Addendum, including, without limitation, federal, state and local taxes, use, value added and personal property taxes (other than income, franchise or similar taxes which may be imposed or assessed against State Street) shall be borne by the Fund. Any claimed exemption from such tariffs, duties or taxes shall be supported by proper documentary evidence delivered to State Street.

8. TRAINING, IMPLEMENTATION AND CONVERSION

a. Training . State Street agrees to provide training, at a designated State Street training facility or at the Designated Locations, to the Fund`s personnel in connection with the use of the System on the Designated Configuration. The Fund agrees that it will set aside, during regular business hours or at other times agreed upon by both parties, sufficient time to enable all operators of the System and the Data Access Services, designated by the Fund, to receive the training offered by State Street pursuant to this Addendum.

b. Installation and Conversion . State Street and the Fund shall be responsible for the technical installation and conversion ( "Installation and Conversion" ) of the Designated Configuration. The Fund shall have the following responsibilities in connection with Installation and Conversion of the System:

(i) The Fund shall be solely responsible for the timely acquisition and maintenance of the hardware and software that attach to the Designated Configuration in order to use the Data Access Services at the Designated Locations, and

(ii) State Street and the Fund each agree that they will assign qualified personnel to actively participate during the Installation and Conversion phase of the System implementation to enable both parties to perform their respective obligations under this Addendum.

9. SUPPORT

During the term of this Addendum, State Street agrees to provide the support services set out in Attachment D to this Addendum.

10. TERM

a. Term . This Addendum shall become effective on the date of its execution by State Street and shall remain in full force and effect until terminated as herein provided.

b. Termination . Either party may terminate this Addendum (i) for any reason by giving the other party at least one-hundred and eighty (180) days` prior written notice in the case of notice of termination by State Street to the Fund or thirty (30) days` notice in the case of notice from the Fund to State Street of termination; or (ii) immediately for failure of the other party to comply with any material term and condition of the Addendum by giving the other party written notice of termination. In the event the Fund shall cease doing business, shall become subject to proceedings under the bankruptcy laws (other than a petition for reorganization or similar proceeding) or shall be adjudicated bankrupt, this Addendum and the rights granted hereunder shall, at the option of State Street, immediately terminate with notice to the Fund. This Addendum shall in any event terminate as to any Fund within ninety (90) days after the termination of the Custodian Agreement.

c. Termination of the Right to Use . Upon termination of this Addendum for any reason, any right to use the System and access to the Data Access Services shall terminate and the Fund shall immediately cease use of the System and the Data Access Services. Immediately upon termination of this Addendum for any reason, the Fund shall return to State Street all copies of documentation and other Proprietary Information in its possession; provided, however, that in the event that either party terminates this Addendum or the Custodian Agreement for any reason other than the Fund`s breach, State Street shall provide the Data Access Services for a period of time and at a price to be agreed upon in writing by the parties.

11. MISCELLANEOUS

a. Year 2000 . State Street will take all steps necessary to ensure that its products (and those of its third-party suppliers) reflect the available state of the art technology to offer products that are Year 2000 compliant, including, but not limited to, century recognition of dates, calculations that correctly compute same century and multi-century formulas and date values, and interface values that reflect the date issues arising between now and the next one-hundred years. If any changes are required, State Street will make the changes to its products at no cost to the Fund and in a commercially reasonable time frame and will require third- party suppliers to do likewise.

b. Assignment; Successors . This Addendum and the rights and obligations of the Fund and State Street hereunder shall not be assigned by either party without the prior written consent of the other party, except that State Street may assign this Addendum to a successor of all or a substantial portion of its business, or to a party controlling, controlled by, or under common control with State Street.

c. Survival . All provisions regarding indemnification, warranty, liability and limits thereon, and confidentiality and/or protection of proprietary rights and trade secrets shall survive the termination of this Addendum.

d. Entire Agreement . This Addendum and the attachments hereto constitute the entire understanding of the parties hereto with respect to the Data Access Services and the use of the System and supersedes any and all prior or contemporaneous representations or agreements, whether oral or written, between the parties as such may relate to the Data Access Services or the System, and cannot

be modified or altered except in a writing duly executed by the parties. This Addendum is not intended to supersede or modify the duties and liabilities of the parties hereto under the Custodian Agreement or any other agreement between the parties hereto except to the extent that any such agreement specifically refers to the Data Access Services or the System. No single waiver or any right hereunder shall be deemed to be a continuing waiver.

e. Severability . If any provision or provisions of this Addendum shall be held to be invalid, unlawful, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired.

f. Governing Law . This Addendum shall be interpreted and construed in accordance with the internal laws of The Commonwealth of Massachusetts without regard to the conflict of laws provisions thereof.

ATTACHMENT A

Multicurrency HORIZON R Accounting System

System Product Description

I. The Multicurrency HORIZON R Accounting System is designed to provide lot level portfolio and general ledger accounting for SEC and ERISA type requirements and includes the following services: 1) recording of general ledger entries; 2) calculation of daily income and expense; 3) reconciliation of daily activity with the trial balance, and 4) appropriate automated feeding mechanisms to (i) domestic and international settlement systems, (ii) daily, weekly and monthly evaluation services, (iii) portfolio performance and analytic services, (iv) customer`s internal computing systems and (v) various State Street provided information services products.

II. GlobalQuest R GlobalQuest R is designed to provide customer access to the following information maintained on The Multicurrency HORIZON R Accounting System: 1) cash transactions and balances; 2) purchases and sales; 3) income receivables; 4) tax refund; 5) daily priced positions; 6) open trades; 7) settlement status; 8) foreign exchange transactions; 9) trade history; and 10) daily, weekly and monthly evaluation services.

III. HORIZON R Gateway. HORIZON R Gateway provides customers with the ability to (i) generate reports using information maintained on the Multicurrency HORIZON R Accounting System which may be viewed or printed at the customer`s location; (ii) extract and download data from the Multicurrency HORIZONR Accounting System; and (iii) access previous day and historical data. The following information which may be accessed for these purposes: 1) holdings; 2) holdings pricing; 3) transactions, 4) open trades; 5) income; 6) general ledger and 7) cash.

IV. State Street Interchange . State Street Interchange is an open information delivery architecture wherein proprietary communication products, data formats and workstation tools are replaced by industry standards and is designed to enable the connection of State Street`s network to customer networks, thereby facilitating the sharing of information.

ATTACHMENT C

Undertaking

(Fund Accountants)

The undersigned understands that in the course of its employment as Fund Accountant to each fund listed on Appendix A (as amended from time to time) to that certain Custodian Agreement dated as of January 28, 1998 (the "Fund" ), it will have access to State Street Bank and Trust Company`s Multicurrency HORIZON Accounting System and other information systems (collectively, the "System" ).

The undersigned acknowledges that the System and the databases, computer programs, screen formats, report formats, interactive design techniques, documentation, and other information made available to the Undersigned by State Street Bank and Trust Company ( "State Street" ) as part of the Data Access Services provided to the Fund and through the use of the System constitute copyrighted, trade secret, or other proprietary information of substantial value to State Street. Any and all such information provided by State Street to the Undersigned shall be deemed proprietary and confidential information of State Street (hereinafter "Proprietary Information" ). The undersigned agrees that it will hold such Proprietary Information in confidence and secure and protect it in a manner consistent with its own procedures for the protection of its own confidential information and to take appropriate action by instruction or agreement with its employees who are permitted access to the Proprietary Information to satisfy its obligations hereunder.

The undersigned will not attempt to intercept data, gain access to data in transmission, or attempt entry into any system or files for which it is not authorized. It will not intentionally adversely affect the integrity of the System through the introduction of unauthorized code or data, or through unauthorized deletion.

Upon notice by State Street for any reason, any right to use the System and access to the Data Access Services shall terminate and the Undersigned shall immediately cease use of the System and the Data Access Services. Immediately upon notice by State Street for any reason, the undersigned shall return to State Street all copies of documentation and other Proprietary Information in its possession.

[The Fund Accountants]

By: ______________________________

Title: ______________________________

Date: ______________________________

ATTACHMENT C-1

Undertaking

(Auditor)

The undersigned understands that in the course of its employment as Auditor to each fund listed on Appendix A (as amended from time to time) to that certain Custodian Agreement dated as of January 28, 1998 (the "Fund" ) it will have access to State Street Bank and Trust Company`s Multicurrency HORIZON Accounting System and other information systems (collectively, the "System" ).

[The Auditor]

By: ______________________________

Title: ______________________________

Date: ______________________________

ATTACHMENT D

Support

During the term of this Addendum, State Street agrees to provide the following on-going support services:

a. Telephone Support. The Fund Designated Persons may contact State Street`s HORIZON R Help Desk and Fund Assistance Center between the hours of 8 a.m. and 6 p.m. (Eastern time) on all business days for the purpose of obtaining answers to questions about the use of the System, or to report apparent problems with the System. From time to time, the Fund shall provide to State Street a list of persons who shall be permitted to contact State Street for assistance (such persons being referred to as the "Fund Designated Persons" ).

b. Technical Support . State Street will provide technical support to assist the Fund in using the System and the Data Access Services. The total amount of technical support provided by State Street shall not exceed 10 resource days per year. State Street shall provide such additional technical support as is expressly set forth in the fee schedule in effect from time to time between the parties (the "Fee Schedule" ). Technical support, including during installation and testing, is subject to the fees and other terms set forth in the Fee Schedule.

c. Maintenance Support . State Street shall use commercially reasonable efforts to correct system functions that do not work according to the System Product Description as set forth on Attachment A in priority order in the next scheduled delivery release or otherwise as soon as is practicable.

d. System Enhancements . State Street will provide to the Fund any enhancements to the System developed by State Street and made a part of the System; provided that State Street offer the Fund reasonable training on the enhancement. Charges for system enhancements shall be as provided in the Fee Schedule. State Street retains the right to charge for related systems or products that may be developed and separately made available for use other than through the System.

e. Custom Modifications . In the event the Fund desires custom modifications in connection with its use of the System, the Fund shall make a written request to State Street providing specifications for the desired modification. Any custom

modifications may be undertaken by State Street in its sole discretion in accordance with the Fee Schedule.

f. Limitation on Support . State Street shall have no obligation to support the Fund`s use of the System: (1) for use on any computer equipment or telecommunication facilities which does not conform to the Designated Configuration or (ii) in the event the Fund has modified the System in breach of this Addendum.

In Witness Whereof , each of the parties has caused this instrument to be executed in its name and on its behalf by its duly authorized representative as of the date and year first written above.

T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Prime Reserve Fund, Inc.
T. Rowe Price International Funds, Inc.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Tax-Free Income Fund, Inc.
T. Rowe Price Tax-Exempt Money Fund, Inc.
T. Rowe Price Tax-Free Short-Intermediate Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price Tax-Free High Yield Fund, Inc.
T. Rowe Price New America Growth Fund
T. Rowe Price Equity Income Fund
T. Rowe Price GNMA Fund
T. Rowe Price Capital Appreciation Fund
T. Rowe Price State Tax-Free Income Trust
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund

T. Rowe Price California Tax-Free Income Trust
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
Institutional International Funds, Inc.
Foreign Equity Fund
T. Rowe Price U.S. Treasury Funds, Inc.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. Rowe Price Index Trust, Inc.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund
T. Rowe Price Spectrum Fund, Inc.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Short-Term U.S. Government Fund, Inc.
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price Tax-Free Insured Intermediate
Bond Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Summit Funds, Inc.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. Rowe Price Summit Municipal Funds, Inc.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
T. Rowe Price Equity Series, Inc.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced
Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price International Series, Inc.
T. Rowe Price International Stock Portfolio

T. Rowe Price Fixed Income Series, Inc.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio
T. Rowe Price Personal Strategy Funds, Inc.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. Rowe Price Value Fund, Inc.
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Corporate Income Fund, Inc.
T. Rowe Price Health Sciences Fund, Inc.
T. Rowe Price Mid-Cap Value Fund, Inc.
Institutional Equity Funds, Inc.
Mid-Cap Equity Growth Fund
T. Rowe Price Diversified Small-Cap Growth
Fund, Inc.
T. Rowe Price Financial Services Fund, Inc.
T. Rowe Price Real Estate Fund, Inc.
T. Rowe Price Small Cap Stock Fund, Inc.
T. Rowe Price Small Cap Stock Fund
T. Rowe Price Media & Telecommunications Fund, Inc.
T. Rowe Price Tax Efficient Balanced Fund, Inc.
Reserve Investment Funds, Inc.
Government Reserve Investment Fund
Reserve Investment Fund

Signature attested to:	Executed on Behalf of each Fund:
/s/Suzanne E. Fraunhoffer By: Name: Suzanne E. Fraunhoffer Title: Legal Assistant	/s/Carmen Deyesu By: Name: Carmen Deyesu Title: Treasurer for each of the foregoing

Signature attested to:	State Street Bank and Trust Company
/s/Glenn Ciotti By: Name: Glenn Ciotti Title: VP & Assoc. Counsel	/s/Ronald E. Logue By: Name: Ronald E. Logue Title: Executive Vice President

Schedule A

Country	Subcustodian	Central Depository
United Kingdom	State Street Bank and Trust Company	None; The Bank of England The Central Gilts Office (CGO); The Central Moneymarkets Office (CMO)

Euroclear (The Euroclear System)/State Street London Limited

Appendix A

T. Rowe Price California Tax-Free Income Trust
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
Institutional International Funds, Inc.
Foreign Equity Fund
T. Rowe Price U.S. Treasury Funds, Inc.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. Rowe Price Index Trust, Inc.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund
T. Rowe Price Spectrum Fund, Inc.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Short-Term U.S. Government Fund, Inc.
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price Tax-Free Insured Intermediate Bond
Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Summit Funds, Inc.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. Rowe Price Summit Municipal Funds, Inc.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
T. Rowe Price Equity Series, Inc.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced
Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price International Series, Inc.
T. Rowe Price International Stock Portfolio

AMENDMENT NO. 1
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

The Custodian Contract of January 28, 1998, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of November 4, 1998, by adding thereto T. Rowe Price International Funds, Inc., on behalf of T. Rowe Price International Growth & Income Fund.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Mid-Cap Growth Portfolio

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

INSTITUTIONAL EQUITY FUNDS, INC.
Mid-Cap Equity Growth Fund

INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund

T. ROWE PRICE TAX-EFFICIENT BALANCED FUND, INC.

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

/s/Henry H. Hopkins
By: _____________________________________
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

/s/Stephen F. Brown
By: _____________________________________
Stephen F. Brown, Vice President

AMENDMENT NO. 2
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

The Custodian Contract of January 28, 1998, as amended November 4, 1998 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of April 21, 1999, by adding thereto T. Rowe Price Tax-Efficient Funds, Inc., on behalf of T. Rowe Price Tax-Efficient Balanced Fund and T. Rowe Price Tax-Efficient Growth Fund.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

INSTITUTIONAL EQUITY FUNDS, INC.
Mid-Cap Equity Growth Fund

INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

/s/ Henry H. Hopkins
By: _____________________________________
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

/s/ Ronald E. Logue
By: _____________________________________
Ronald E. Logue, Vice Chairman

AMENDMENT NO. 3
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

The Custodian Contract of January 28, 1998, as amended November 4, 1998 and April 21, 1999 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of February 9, 2000, by adding thereto Institutional Equity Funds, Inc., on behalf of Institutional Large- Cap Value Fund and Institutional Small-Cap Stock Fund.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

INSTITUTIONAL EQUITY FUNDS, INC.
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund
Mid-Cap Equity Growth Fund

INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

/s/ Henry H. Hopkins
By: _____________________________________
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

/s/ Ronald E. Logue
By: _____________________________________
Ronald E. Logue, Vice Chairman

AMENDMENT NO. 4
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

The Custodian Contract of January 28, 1998, as amended November 4, 1998, April 21, 1999, and February 9, 2000 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of April 19, 2000, by adding thereto T. Rowe Price International Funds, Inc., on behalf of T. Rowe Price Emerging Europe & Mediterranean Fund.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

INSTITUTIONAL EQUITY FUNDS, INC.
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund
Institutional Mid-Cap Equity Growth Fund

INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

/s/ Henry H. Hopkins
By: _____________________________________
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

/s/ Ronald E. Logue
By: _____________________________________
Ronald E. Logue, Vice Chairman

AMENDMENT NO. 5
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

The Custodian Contract of January 28, 1998, as amended November 4, 1998, April 21, 1999, February 9, 2000, and April 19, 2000 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, 2000, by adding thereto T. Rowe Price Developing Technologies Fund, Inc., T. Rowe Price Global Technology Fund, Inc., and T. Rowe Price U.S. Bond Index 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 CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

INSTITUTIONAL EQUITY FUNDS, INC.
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund
Institutional Mid-Cap Equity Growth Fund

INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

/s/ Henry H. Hopkins
By: _____________________________________
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

/s/ Ronald E. Logue
By: _____________________________________
Ronald E. Logue, Vice Chairman

AMENDMENT NO. 6
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

The Custodian Contract of January 28, 1998, as amended November 4, 1998, April 21, 1999, February 9, 2000, April 19, 2000 and July 18, 2000 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of October 25, 2000, by adding thereto T. Rowe Price International Index Fund, Inc., on behalf of T. Rowe Price International Equity Index Fund; T. Rowe Price Tax-Efficient Funds, Inc., on behalf of T. Rowe Price Tax-Efficient Multi-Cap Growth Fund; and T. Rowe Price Equity Series, Inc., on behalf of T. Rowe Price Blue Chip Growth Portfolio, T. Rowe Price Equity Index 500 Portfolio, and T. Rowe Price Health Sciences Portfolio.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Blue Chip Growth Portfolio
T. Rowe Price Equity Income Portfolio
T. Rowe Price Equity Index 500 Portfolio
T. Rowe Price Health Sciences Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

INSTITUTIONAL EQUITY FUNDS, INC.
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund
Institutional Mid-Cap Equity Growth Fund

INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

/s/ Henry H. Hopkins
By: _____________________________________
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

/s/ Ronald E. Logue
By: _____________________________________
Ronald E. Logue, Vice Chairman

AMENDMENT NO. 7
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

The Custodian Contract of January 28, 1998, as amended November 4, 1998, April 21, 1999, February 9, 2000, April 19, 2000, July 18, 2000, and October 25, 2000 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of February 7, 2001, by adding thereto T. Rowe Price State Tax-Free Income Trust, on behalf of Maryland Tax-Free Money Fund.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

INSTITUTIONAL EQUITY FUNDS, INC.
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund
Institutional Mid-Cap Equity Growth Fund

INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Money Fund
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

/s/ Henry H. Hopkins
By: _____________________________________
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

/s/ Ronald E. Logue
By: _____________________________________
Ronald E. Logue, Vice Chairman

AMENDMENT NO. 8
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

The Custodian Contract of January 28, 1998, as amended November 4, 1998, April 21, 1999, February 9, 2000, April 19, 2000, July 18, 2000, October 25, 2000, and February 7, 2001 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of July 24, 2001, by adding thereto Institutional Equity Funds, Inc., on behalf of Institutional Large-Cap Growth Fund.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

INSTITUTIONAL EQUITY FUNDS, INC.
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund
Institutional Mid-Cap Equity Growth Fund
Institutional Large-Cap Growth Fund

INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. Rowe Price Reserve Investment Fund
T. Rowe Price Government Reserve Investment Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Money Fund
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 Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

By: /s/Henry H. Hopkins
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

By: /s/Joseph L. Hooley
Joseph L. Hooley
Executive Vice President

AMENDMENT NO. 9
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

The Custodian Contract of January 28, 1998, as amended November 4, 1998, April 21, 1999, February 9, 2000, April 19, 2000, July 18, 2000, October 25, 2000, February 7, 2001, and July 24, 2001 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of April 24, 2002, by adding thereto T. Rowe Price Institutional Income Funds, Inc., on behalf of T. Rowe Price Institutional High Yield Fund.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
T. Rowe Price Institutional Large-Cap Value Fund
T. Rowe Price Institutional Small-Cap Stock Fund
T. Rowe Price Institutional Mid-Cap Equity Growth Fund
T. Rowe Price Institutional Large-Cap Growth Fund

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. Rowe Price Reserve Investment Fund
T. Rowe Price Government Reserve Investment Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Money Fund
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 Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

By: /s/Henry H. Hopkins
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

By: /s/Ronald E. Logue
Ronald E. Logue, Vice Chairman

AMENDMENT NO. 10
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

The Custodian Contract of January 28, 1998, as amended November 4, 1998, April 21, 1999, February 9, 2000, April 19, 2000, July 18, 2000, October 25, 2000, February 7, 2001, July 24, 2001, and April 24, 2002 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of July 24, 2002, by adding thereto T. Rowe Price Inflation Protected Bond Fund, Inc.; T. Rowe Price Institutional International Funds, Inc., on behalf of T. Rowe Price Institutional Emerging Markets Equity Fund; T. Rowe Price Retirement Funds, Inc., on behalf of T. Rowe Price Retirement 2010 Fund, T. Rowe Price Retirement 2020 Fund, T. Rowe Price Retirement 2030 Fund, and T. Rowe Price Retirement 2040 Fund.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Emerging Markets Equity Fund
T. Rowe Price Institutional Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. Rowe Price Reserve Investment Fund
T. Rowe Price Government Reserve Investment Fund

T. ROWE PRICE RETIREMENT FUNDS, INC.
T. Rowe Price Retirement 2010 Fund
T. Rowe Price Retirement 2020 Fund
T. Rowe Price Retirement 2030 Fund
T. Rowe Price Retirement 2040 Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Money Fund
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 Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

By: /s/Henry H. Hopkins
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

By: /s/Joseph L. Hooley
Joseph L. Hooley
Executive Vice President

AMENDMENT NO. 11
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Emerging Markets Equity Fund
T. Rowe Price Institutional Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. Rowe Price Reserve Investment Fund
T. Rowe Price Government Reserve Investment Fund

T. ROWE PRICE RETIREMENT FUNDS, INC.
T. Rowe Price Retirement 2010 Fund
T. Rowe Price Retirement 2020 Fund
T. Rowe Price Retirement 2030 Fund
T. Rowe Price Retirement 2040 Fund
T. Rowe Price Retirement Income Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Money Fund
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 Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

By: /s/Henry H. Hopkins
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

By: /s/ Joseph L. Hooley
Joseph L. Hooley
Executive Vice President

AMENDMENT NO. 12
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Emerging Markets Equity Fund
T. Rowe Price Institutional Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. Rowe Price Reserve Investment Fund
T. Rowe Price Government Reserve Investment Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Money Fund
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 Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

By: /s/Henry H. Hopkins
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

By: /s/ Joseph L. Hooley
Joseph L. Hooley
Executive Vice President

AMENDMENT NO. 13
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

The Custodian Contract of January 28, 1998, as amended November 4, 1998, April 21, 1999, February 9, 2000, April 19, 2000, July 18, 2000, October 25, 2000, February 7, 2001, July 24, 2001, April 24, 2002, July 24, 2002, September 4, 2002, and July 23, 2003 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of October 22, 2003, by adding thereto T. Rowe Price Diversified Mid-Cap Growth 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 CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Emerging Markets Equity Fund
T. Rowe Price Institutional Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. Rowe Price Reserve Investment Fund
T. Rowe Price Government Reserve Investment Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Money Fund
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 Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

By: /s/Henry H. Hopkins
__________________________________
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

By: /s/ Joseph L. Hooley
__________________________________
Joseph L. Hooley
Executive Vice President

AMENDMENT NO. 14
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

The Custodian Contract of January 28, 1998, as amended November 4, 1998, April 21, 1999, February 9, 2000, April 19, 2000, July 18, 2000, October 25, 2000, February 7, 2001, July 24, 2001, April 24, 2002, July 24, 2002, September 4, 2002, July 23, 2003, and October 22, 2003 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of February 4, 2004, by adding thereto T. Rowe Price Retirement Funds, Inc., on behalf of T. Rowe Price Retirement 2005 Fund, T. Rowe Price Retirement 2015 Fund, T. Rowe Price Retirement 2025 Fund, and T. Rowe Price Retirement 2035 Fund.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Emerging Markets Equity Fund
T. Rowe Price Institutional Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. Rowe Price Reserve Investment Fund
T. Rowe Price Government Reserve Investment Fund

T. ROWE PRICE RETIREMENT FUNDS, INC.
T. Rowe Price Retirement 2005 Fund
T. Rowe Price Retirement 2010 Fund
T. Rowe Price Retirement 2015 Fund
T. Rowe Price Retirement 2020 Fund
T. Rowe Price Retirement 2025 Fund
T. Rowe Price Retirement 2030 Fund
T. Rowe Price Retirement 2035 Fund
T. Rowe Price Retirement 2040 Fund
T. Rowe Price Retirement Income Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Money Fund
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 Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

By: /s/Henry H. Hopkins
__________________________________
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

By: /s/ Joseph L. Hooley
__________________________________
Joseph L. Hooley
Executive Vice President

AMENDMENT NO. 15
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS

The Custodian Contract of January 28, 1998, as amended November 4, 1998, April 21, 1999, February 9, 2000, April 19, 2000, July 18, 2000, October 25, 2000, February 7, 2001, July 24, 2001, April 24, 2002, July 24, 2002, September 4, 2002, July 23, 2003, October 22, 2003, and February 4, 2004 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of September 20, 2004 by adding thereto T. Rowe Price Institutional Income Funds, Inc., on behalf of T. Rowe Price Institutional Core Plus Fund.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional Core Plus Fund
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Emerging Markets Equity Fund
T. Rowe Price Institutional Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.

T. ROWE PRICE MID-CAP VALUE FUND, INC.

T. ROWE PRICE NEW AMERICA GROWTH FUND

T. ROWE PRICE NEW ERA FUND, INC.

T. ROWE PRICE NEW HORIZONS FUNDS, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. Rowe Price Reserve Investment Fund
T. Rowe Price Government Reserve Investment Fund

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Money Fund
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 Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE VALUE FUND, INC.

By: /s/Henry H. Hopkins
__________________________________
Henry H. Hopkins, Vice President

STATE STREET BANK AND TRUST COMPANY

By: /s/ Joseph L. Hooley
__________________________________
Joseph L. Hooley
Executive Vice President

GLOBAL CUSTODY AGREEMENT

This AGREEMENT is effective January 3, 1994, and is between THE CHASE MANHATTAN BANK, N.A. (the "Bank") and EACH OF THE ENTITIES LISTED ON SCHEDULE A HERETO, Individually and Separately (each individually, the "Customer").

1. Customer Accounts.

The Bank agrees to establish and maintain the following accounts ("Accounts"):

(a) A custody account in the name of the Customer ("Custody Account") for any and all stocks, shares, bonds, debentures, notes, mortgages or other obligations for the payment of money, bullion, coin and any certificates, receipts, warrants or other instruments representing rights to receive, purchase or subscribe for the same or evidencing or representing any other rights or interests therein and other similar property whether certificated or uncertificated as may be received by the Bank or its Subcustodian (as defined in Section 3) for the account of the Customer ("Securities"); and

(b) A deposit account in the name of the Customer ("Deposit Account") for any and all cash in any currency received by the Bank or its Subcustodian for the account of the Customer, which cash shall not be subject to withdrawal by draft or check.

The Customer warrants its authority to: 1) deposit the cash and Securities ("Assets") received in the Accounts and 2) give Instructions (as defined in Section 11) concerning the Accounts. The Bank may deliver securities of the same class in place of those deposited in the Custody Account.

Upon written agreement between the Bank and the Customer, additional Accounts may be established and separately accounted for as additional Accounts under the terms of this Agreement.

2. Maintenance of Securities and Cash at Bank and Subcustodian Locations.

Unless Instructions specifically require another location acceptable to the Bank:

(a) Securities will be held in the country or other jurisdiction in which the principal trading market for such Securities is located, where such Securities are to be presented for payment or where such Securities are acquired; and

(b) Cash will be credited to an account in a country or other jurisdiction in which such cash may be legally deposited or is the legal currency for the payment of public or private debts.

Cash may be held pursuant to Instructions in either interest or non interest bearing accounts as may be available for the particular currency. To the extent Instructions are issued and the Bank can comply with such Instructions, the Bank is authorized to maintain cash balances on deposit for the Customer with itself or one of its affiliates at such reasonable rates of interest as may from time to time be paid on such accounts, or in non interest bearing accounts as the Customer may direct, if acceptable to the Bank.

If the Customer wishes to have any of its Assets held in the custody of an institution other than the established Subcustodians as defined in Section 3 (or their securities depositories), such arrangement must be authorized by a written agreement, signed by the Bank and the Customer.

3. Subcustodians and Securities Depositories.

The Bank may act under this Agreement through the subcustodians listed in Schedule B of this Agreement with which the Bank has entered into subcustodial agreements ("Subcustodians"). The Customer authorizes the Bank to hold Assets in the Accounts in accounts which the Bank has established with one or more of its branches or Subcustodians. The Bank and Subcustodians are authorized to hold any of the Securities in their account with any securities depository in which they participate.

The Bank reserves the right to add new, replace or remove Subcustodians. The Customer will be given reasonable notice by the Bank of any amendment to Schedule B. Upon request by the Customer, the Bank will identify the name, address and principal place of business of any Subcustodian of the Customer's Assets and the name and address of the governmental agency or other regulatory authority that supervises or regulates such Subcustodian.

4. Use of Subcustodian.

(a) The Bank will identify such Assets on its books as belonging to the Customer.

(b) A Subcustodian will hold such Assets together with assets belonging to other customers of the Bank in accounts identified on such Subcustodian's books as special custody accounts for the exclusive benefit of customers of the Bank.

(c) Any Assets in the Accounts held by a Subcustodian will be subject only to the instructions of the Bank or its agent. Any Securities held in a securities depository for the account of a Subcustodian will be subject only to the instructions of such Subcustodian.

(d) Any agreement the Bank enters into with a Subcustodian for holding its customer's assets shall provide that such assets will not be subject to any right, charge, security interest, lien or claim of any kind in favor of such Subcustodian or its creditors except for a claim for payment for safe custody or administration, and that the beneficial ownership of such assets will be freely transferable without the payment of money or value other than for safe custody or administration.

The foregoing shall not apply to the extent of any special agreement or arrangement made by the Customer with any particular Subcustodian.

5. Deposit Account Transactions.

(a) The Bank or its Subcustodians will make payments from the Deposit Account upon receipt of Instructions which include all information required by the Bank.

(b) In the event that any payment to be made under this Section 5 exceeds the funds available in the Deposit Account, the Bank, in its discretion, may advance the Customer such excess amount which shall be deemed a loan payable on demand, bearing interest at the rate customarily charged by the Bank on similar loans.

(c) If the Bank credits the Deposit Account on a payable date, or at any time prior to actual collection and reconciliation to the Deposit Account, with interest, dividends, redemptions or any other amount due, the Customer will promptly return any such amount upon oral or written notification: (i) that such amount has not been received in the ordinary course of business or (ii) that such amount was incorrectly credited. If the Customer does not promptly return any amount upon such notification, the Bank shall be entitled, upon oral or written notification to the Customer, to reverse such credit by debiting the Deposit Account for the amount previously credited. The Bank or its Subcustodian shall have no duty or obligation to institute legal proceedings, file a claim or a proof of claim in any insolvency proceeding or take any other action with respect to the collection of such amount, but may act for the Customer upon Instructions after consultation with the Customer.

6. Custody Account Transactions.

(a) Securities will be transferred, exchanged or delivered by the Bank or its Subcustodian upon receipt by the Bank of Instructions which include all information required by the Bank. Settlement and payment for Securities received for, and delivery of Securities out of, the Custody Account may be made in accordance with the customary or established securities trading or securities processing practices and procedures in the jurisdiction or market in which the transaction occurs, including, without limitation, delivery of Securities to a purchaser, dealer or their agents against a receipt with the expectation of receiving later payment and free delivery. Delivery of Securities out of the Custody Account may also be made in any manner specifically required by Instructions acceptable to the Bank.

(b) The Bank, in its discretion, may credit or debit the Accounts on a contractual settlement date with cash or Securities with respect to any sale, exchange or purchase of Securities. Otherwise, such transactions will be credited or debited to the Accounts on the date cash or Securities are actually received by the Bank and reconciled to the Account.

(i) The Bank may reverse credits or debits made to the Accounts in its discretion if the related transaction fails to settle within a reasonable period, determined by the Bank in its discretion, after the contractual settlement date for the related transaction.

(ii) If any Securities delivered pursuant to this Section 6 are returned by the recipient thereof, the Bank may reverse the credits and debits of the particular transaction at any time.

7. Actions of the Bank.

The Bank shall follow Instructions received regarding assets held in the Accounts. However, until it receives Instructions to the contrary, the Bank will:

(a) Present for payment any Securities which are called, redeemed or retired or otherwise become payable and all coupons and other income items which call for payment upon presentation, to the extent that the Bank or Subcustodian is actually aware of such opportunities.

(b) Execute in the name of the Customer such ownership and other certificates as may be required to obtain payments in respect of Securities.

(d) Appoint brokers and agents for any transaction involving the Securities, including, without limitation, affiliates of the Bank or any Subcustodian.

(e) Issue statements to the Customer, at times mutually agreed upon, identifying the Assets in the Accounts.

The Bank will send the Customer an advice or notification of any transfers of Assets to or from the Accounts. Such statements, advices or notifications shall indicate the identity of the entity having custody of the Assets. Unless the Customer sends the Bank a written exception or objection to any Bank statement within ninety (90) days of receipt, the Customer shall be deemed to have approved such statement. The Bank shall, to the extent permitted by law, be released, relieved and discharged with respect to all matters set forth in such statement or reasonably implied therefrom as though it had been settled by the decree of a court of competent jurisdiction in an action where the Customer and all persons having or claiming an interest in the Customer or the Customer's Accounts were parties if: (a) the Customer has failed to provide a written exception or objection to any Bank statement within ninety (90) days of receipt and where the Customer's failure to so provide a written exception or objection within such ninety (90) day period has limited the Bank's (i) access to the records, materials and other information required to investigate the Customer's exception or objection, and (ii) ability to recover from third parties any amounts for which the Bank may become liable in connection with such exception or objection, or (b) where the Customer has otherwise explicitly approved any such statement.

All collections of funds or other property paid or distributed in respect of Securities in the Custody Account shall be made at the risk of the Customer. The Bank shall have no liability for any loss occasioned by delay in the actual receipt of notice by the Bank or by its Subcustodians of any payment, redemption or other transaction regarding Securities in the Custody Account in respect of which the Bank has agreed to take any action under this Agreement.

8. Corporate Actions; Proxies.

Whenever the Bank receives information concerning the Securities which requires discretionary action by the beneficial owner of the Securities (other than a proxy), such as subscription rights, bonus issues, stock repurchase plans and rights offerings, or legal notices or other material intended to be transmitted to securities holders ("Corporate Actions"), the Bank will give the Customer notice of such Corporate Actions to the extent that the Bank's central corporate actions department has actual knowledge of a Corporate Action in time to notify its customers.

When a rights entitlement or a fractional interest resulting from a rights issue, stock dividend, stock split or similar Corporate Action is received which bears an expiration date, the Bank will endeavor to obtain Instructions from the Customer or its Authorized Person, but if Instructions are not received in time for the Bank to take timely action, or actual notice of such Corporate Action was received too late to seek Instructions, the Bank is authorized to sell such rights entitlement or fractional interest and to credit the Deposit Account with the proceeds or take any other action it deems, in good faith, to be appropriate in which case it shall be held harmless for any such action.

The Bank will deliver proxies to the Customer or its designated agent pursuant to special arrangements which may have been agreed to in writing. Such proxies shall be executed in the appropriate nominee name relating to Securities in the Custody Account registered in the name of such nominee but without indicating the manner in which such proxies are to be voted; and where bearer Securities are involved, proxies will be delivered in accordance with Instructions.

9. Nominees.

Securities which are ordinarily held in registered form may be registered in a nominee name of the Bank, Subcustodian or securities depository, as the case may be. The Bank may without notice to the Customer cause any such Securities to cease to be registered in the name of any such nominee and to be registered in the name of the Customer. In the event that any Securities registered in a nominee name are called for partial redemption by the issuer, the Bank may allot the called portion to the respective beneficial holders of such class of security pro rata or in any other manner that is fair, equitable and practicable. The Customer agrees to hold the Bank, Subcustodians, and their respective nominees harmless from any liability arising directly or indirectly from their status as a mere record holder of Securities in the Custody Account.

10. Authorized Persons.

As used in this Agreement, the term "Authorized Person" means employees or agents including investment managers as have been designated by written notice from the Customer or its designated agent to act on behalf of the Customer under this Agreement. Such persons shall continue to be Authorized Persons until such time as the Bank receives Instructions from the Customer or its designated agent that any such employee or agent is no longer an Authorized Person.

11. Instructions.

The term "Instructions" means instructions of any Authorized Person received by the Bank, via telephone, telex, TWX, facsimile transmission, bank wire or other teleprocess or electronic instruction or trade information system acceptable to the Bank which the Bank believes in good faith to have been given by Authorized Persons or which are transmitted with proper testing or authentication pursuant to terms and conditions which the Bank may specify. Unless otherwise expressly provided, all Instructions shall continue in full force and effect until canceled or superseded.

Any Instructions delivered to the Bank by telephone shall promptly thereafter be confirmed in writing by an Authorized Person (which confirmation may bear the facsimile signature of such Person), but the Customer will hold the Bank harmless for the failure of an Authorized Person to send such confirmation in writing, the failure of such confirmation to conform to the telephone instructions received or the Bank's failure to produce such confirmation at any subsequent time. The Bank may electronically record any Instructions given by telephone, and any other telephone discussions with respect to the Custody Account. The Customer shall be responsible for safeguarding any testkeys, identification codes or other security devices which the Bank shall make available to the Customer or its Authorized Persons.

12. Standard of Care; Liabilities.

(a) The Bank shall be responsible for the performance of only such duties as are set forth in this Agreement or expressly contained in Instructions which are consistent with the provisions of this Agreement. Notwithstanding anything to the contrary in this Agreement:

(i) The Bank will use reasonable care with respect to its obligations under this Agreement and the safekeeping of Assets. The Bank shall be liable to the Customer for any loss which shall occur as the result of the failure of a Subcustodian to exercise reasonable care with respect to the safekeeping of such Assets to the same extent that the Bank would be liable to the Customer if the Bank were holding such Assets in New York. In the event of any loss to the Customer by reason of the failure of the Bank or its Subcustodian to utilize reasonable care, the Bank shall be liable to the Customer only to the extent of the Customer's direct damages, and shall in no event be liable for any special or consequential damages.

(ii) The Bank will not be responsible for any act, omission, default or for the solvency of any broker or agent which it or a Subcustodian appoints unless such appointment was made negligently or in bad faith or for any loss due to the negligent act of such broker or agent except to the extent that such broker or agent (other than a Subcustodian) performs in a negligent manner which is the cause of the loss to the Customer and the Bank failed to exercise reasonable care in monitoring such broker's or agent's performance where Customer has requested and Bank has agreed to accept such monitoring responsibility.

(iii) The Bank shall be indemnified by, and without liability to the Customer for any action taken or omitted by the Bank whether pursuant to Instructions or otherwise within the scope of this Agreement if such act or omission was in good faith, without negligence. In performing its obligations under this Agreement, the Bank may rely on the genuineness of any document which it believes in good faith to have been validly executed.

(iv) The Customer agrees to pay for and hold the Bank harmless from any liability or loss resulting from the imposition or assessment of any taxes or other governmental charges, and any related expenses with respect to income from or Assets in the Accounts, except to the extent that the Bank has failed to exercise reasonable care in performing any obligations which the Bank may have agreed to assume (in addition to those stated in this Agreement) with respect to taxes and such failure by the Bank is the direct cause of such imposition or assessment of such taxes, charges or expenses.

(v) The Bank shall be entitled to rely, and may act, upon the advice of counsel (who may be counsel for the Customer) on all legal matters and shall be without liability for any action reasonably taken or omitted pursuant to such advice; provided, that the Bank gives (to the extent practicable) prior notice to Customer of Bank's intention to so seek advice of counsel and an opportunity for consultation with Customer on the proposed contact with counsel.

(vi) The Bank represents and warrants that it currently maintain a banker's blanket bond which provides standard fidelity and non-negligent loss coverage with respect to the Securities and Cash which may be held by Subcustodians pursuant to this Agreement. The Bank agrees that if at any time it for any reason discontinues such coverage, it shall immediately give sixty (60) days' prior written notice to the Customer. The Bank need not maintain any insurance for the benefit of the Customer.

(vii) Without limiting the foregoing, the Bank shall not be liable for any loss which results from: (1) the general risk of investing, or (2) investing or holding Assets in a particular country including, but not limited to, losses resulting from nationalization, expropriation or other governmental actions; regulation of the banking or securities industry; currency restrictions, devaluations or fluctuations; and market conditions which prevent the orderly execution of securities transactions or affect the value of Assets.

(viii) Neither party shall be liable to the other for any loss due to forces beyond their control including, but not limited to strikes or work stoppages, acts of war or terrorism, insurrection, revolution, nuclear fusion, fission or radiation, or acts of God.

(b) Consistent with and without limiting the first paragraph of this Section 12, it is specifically acknowledged that the Bank shall have no duty or responsibility to:

(i) question Instructions or make any suggestions to the Customer or an Authorized Person regarding such Instructions;

(ii) supervise or make recommendations with respect to investments or the retention of Securities;

(iii) advise the Customer or an Authorized Person regarding any default in the payment of principal or income of any security other than as provided in Section 5(c) of this Agreement;

(iv) evaluate or report to the Customer or an Authorized Person regarding the financial condition of any broker, agent (other than a Subcustodian) or other party to which Securities are delivered or payments are made pursuant to this Agreement;

(v) review or reconcile trade confirmations received from brokers. The Customer or its Authorized Persons (as defined in Section 10) issuing Instructions shall bear any responsibility to review such confirmations against Instructions issued to and statements issued by the Bank.

(c) The Customer authorizes the Bank to act under this Agreement notwithstanding that the Bank or any of its divisions or affiliates may have a material interest in a transaction, or circumstances are such that the Bank may have a potential conflict of duty or interest including the fact that the Bank or any of its affiliates may provide brokerage services to other customers, act as financial advisor to the issuer of Securities, act as a lender to the issuer of Securities, act in the same transaction as agent for more than one customer, have a material interest in the issue of Securities, or earn profits from any of the activities listed herein.

13. Fees and Expenses.

The Customer agrees to pay the Bank for its services under this Agreement such amount as may be agreed upon in writing, together with the Bank's reasonable out of pocket or incidental expenses, including, but not limited to, reasonable legal fees. The Bank shall have a lien on and is authorized to charge any Accounts of the Customer for any amount owing to the Bank under any provision of this Agreement upon notice to the Customer.

14. Miscellaneous.

(a) Foreign Exchange Transactions. Pursuant to Instructions, which may be standing Instructions, to facilitate the administration of the Customer's trading and investment activity, the Bank is authorized to enter into spot or forward foreign exchange contracts with the Customer or an Authorized Person for the Customer and may also provide foreign exchange through its subsidiaries or Subcustodians. The Bank may establish rules or limitations concerning any foreign exchange facility made available. In all cases where the Bank, its subsidiaries, affiliates or Subcustodians enter into a foreign exchange contract related to Accounts, the terms and conditions of the then current foreign exchange contract of the Bank, its subsidiary, affiliate or Subcustodian and, to the extent not inconsistent, this Agreement shall apply to such transaction.

(b) Certification of Residency, etc. The Customer certifies that it is a resident of the United States and agrees to notify the Bank of any changes in residency. The Bank may rely upon this certification or the certification of such other facts as may be required to administer the Bank's obligations under this Agreement. The Customer will indemnify the Bank against all losses, liability, claims or demands arising directly or indirectly from any such certifications.

(c) Access to Records. The Bank shall allow the Customer's independent public accountants, officers and advisers reasonable access to the records of the Bank relating to the Assets as is required in connection with their examination of books and records pertaining to the Customer's affairs. Subject to restrictions under applicable law, the Bank shall also obtain an undertaking to permit the Customer's independent public accountants reasonable access to the records of any Subcustodian which has physical possession of any Assets as may be required in connection with the examination of the Customer's books and records.

(d) Governing Law; Successors and Assigns. This Agreement shall be governed by the laws of the State of New York and shall not be assignable by either party, but shall bind the successors in interest of the Customer and the Bank.

(e) Entire Agreement; Applicable Riders. Customer represents that the Assets deposited in the Accounts are (Check one):

X Employee Benefit Plan or other assets subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA");

X 2 Mutual Fund assets subject to certain Securities and Exchange Commission ("SEC") rules and regulations;

X 3 Neither of the above.

With respect to each Customer, this Agreement consists exclusively of this document together with Schedules A, B, Exhibits I _______ and the following Rider(s) to the extent indicated on Schedule A hereto opposite the name of the Customer under the column headed "Applicable Riders to Agreement":

X ERISA

X MUTUAL FUND

SPECIAL TERMS AND CONDITIONS

There are no other provisions of this Agreement and this Agreement supersedes any other agreements, whether written or oral, between the parties. Any amendment to this Agreement must be in writing, executed by both parties.

(f) Severability. In the event that one or more provisions of this Agreement are held invalid, illegal or enforceable in any respect on the basis of any particular circumstances or in any jurisdiction, the validity, legality and enforceability of such provision or provisions under other circumstances or in other jurisdictions and of the remaining provisions will not in any way be affected or impaired.

(g) Waiver. Except as otherwise provided in this Agreement, no failure or delay on the part of either party in exercising any power or right under this Agreement operates as a waiver, nor does any single or partial exercise of any power or right preclude any other or further exercise, or the exercise of any other power or right. No waiver by a party of any provision of this Agreement, or waiver of any breach or default, is effective unless in writing and signed by the party against whom the waiver is to be enforced.

(h) Notices. All notices under this Agreement shall be effective when actually received. Any notices or other communications which may be required under this Agreement are to be sent to the parties at the following addresses or such other addresses as may subsequently be given to the other party in writing:

Bank:

The Chase Manhattan Bank, N.A.
Chase MetroTech Center
Brooklyn, NY 11245
Attention: Global Investor Services
Telephone: (718) 242-3455
Facsimile: (718) 242-1374

Copy to:

The Chase Manhattan Bank, N.A.
Woolgate House
Coleman Street
London EC2P 2HD England
Attention: Global Investor Services
Telephone: 44-71-962-5000
Facsimile: 44-71-962-5377
Telex: 8954681CMBG

Customer:

Name of Customer from Schedule A
c/o T. Rowe Price
100 East Pratt Street
Baltimore, MD 21202
Attention: Treasurer
Telephone: (410) 625-6658
Facsimile: (410) 547-0180

(i) Termination. This Agreement may be terminated by the Customer or the Bank by giving ninety (90) days written notice to the other, provided that such notice to the Bank shall specify the names of the persons to whom the Bank shall deliver the Assets in the Accounts. If notice of termination is given by the Bank, the Customer shall, within ninety (90) days following receipt of the notice, deliver to the Bank Instructions specifying the names of the persons to whom the Bank shall deliver the Assets. In either case the Bank will deliver the Assets to the persons so specified, after deducting any amounts which the Bank determines in good faith to be owed to it under Section 13. If within ninety (90) days following receipt of a notice of termination by the Bank, the Bank does not receive Instructions from the Customer specifying the names of the persons to whom the Bank shall deliver the Assets, the Bank, at its election, may deliver the Assets to a bank or trust company doing business in the State of New York to be held and disposed of pursuant to the provisions of this Agreement, or to Authorized Persons, or may continue to hold the Assets until Instructions are provided to the Bank.

(j) Entire Agreement. This Agreement, including the Schedules and Riders hereto, embodies the entire agreement and understanding of the parties in respect of the subject matter contained in this Agreement. This Agreement supersedes all other custody or other agreements between the parties with respect to such subject matter, which prior agreements are hereby terminated effective as of the date hereof and shall have no further force or effect.

EACH OF THE CUSTOMERS, INDIVIDUALLY AND SEPARATELY LISTED ON SECTION I OF SCHEDULE A HERETO

By: /s/Carmen F. Deyesu
Carmen F. Deyesu
Treasurer & Vice President

EACH OF THE CUSTOMERS, INDIVIDUALLY AND SEPARATELY LISTED ON SECTION II OF SCHEDULE A HERETO

By: /s/Alvin M. Younger
Alvin M. Younger
Treasurer

EACH OF THE CUSTOMERS, INDIVIDUALLY AND SEPARATELY LISTED ON SECTION III OF SCHEDULE A HERETO

By: /s/Alvin M. Younger
Alvin M. Younger
Treasurer

THE CHASE MANHATTAN BANK, N.A.

By: /s/Alan Naughton
Alan Naughton
Vice President

Schedule A
Page 1 of 2

LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers
listed under Section I of
this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.

T. Rowe Price Blue Chip Growth Fund, Inc.

T. Rowe Price Capital Appreciation Fund

T. Rowe Price Dividend Growth Fund, Inc.

T. Rowe Price Equity Income Fund

T. Rowe Price Growth & Income Fund, Inc.

T. Rowe Price Growth Stock Fund, Inc.

Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund

T. Rowe Price Mid-Cap Growth Fund, Inc.

T. Rowe Price New Era Fund, Inc.

T. Rowe Price New Horizons Fund, Inc.

T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund

T. Rowe Price Science & Technology Fund, Inc.

T. Rowe Price Small Cap Value Fund, Inc.

CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund

Schedule A
Page 2 of 2

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Income Funds

T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.

T. Rowe Price High Yield Fund, Inc.

T. Rowe Price New Income Fund, Inc.

| T. Rowe Price Short-Term Bond Fund, Inc.

T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Bond Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.

T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried

Common Trust Funds

T. Rowe Price Trust Company, as Trustee
for the International Common Trust Fund
on behalf of the Underlying Trusts:

Foreign Discovery Trust

Foreign Discovery Trust-Augment

Pacific Discovery Trust

European Discovery Trust

Japan Discovery Trust

Latin American Discovery Trust

New York City International Common Trust Fund

III. OTHER

RPFI International Partners, L.P.

No Riders are applicable
to the Customer listed
under Section III of
this Schedule A.

ERISA Rider to Global Custody Agreement
|Between The Chase Manhattan Bank, N.A. and
Each of the Entities Listed on Schedule A Hereto
effective January 3, 1994

Customer represents that the Assets being placed in the Bank's custody are subject to ERISA. It is understood that in connection therewith the Bank is a service provider and not a fiduciary of the plan and trust to which the assets are related. The Bank shall not be considered a party to the underlying plan and trust and the Customer hereby assumes all responsibility to assure that Instructions issued under this Agreement are in compliance with such plan and trust and ERISA.

This Agreement will be interpreted as being in compliance with the Department of Labor Regulations Section 2550.404b 1 concerning the maintenance of indicia of ownership of plan assets outside of the jurisdiction of the district courts of the United States.

The following modifications are made to the Agreement:

Section 3. Subcustodians and Securities Depositories.

Add the following language to the end of Section 3:

As used in this Agreement, the term Subcustodian and the term securities depositories include a branch of the Bank, a branch of a qualified U.S. bank, an eligible foreign custodian, or an eligible foreign securities depository, where such terms shall mean:

(a) "qualified U.S. bank" shall mean a U.S. bank as described in paragraph (a)(2)(ii)(A)(1) of the Department of Labor Regulations Section 2550.404b 1;

(b) "eligible foreign custodian" shall mean a banking institution incorporated or organized under the laws of a country other than the United States which is supervised or regulated by that country's government or an agency thereof or other regulatory authority in the foreign jurisdiction having authority over banks; and

(c) "eligible foreign securities depository" shall mean a securities depository or clearing agency, incorporated or organized under the laws of a country other than the United States, which is supervised or regulated by that country's government or an agency thereof or other regulatory authority in the foreign jurisdiction having authority over such depositories or clearing agencies and which is described in paragraph (c)(2) of the Department of Labor Regulations Section 2550.404b 1.

Section 4. Use of Subcustodian.

Subsection (d) of this section is modified by deleting the last sentence.

Section 5. Deposit Account Payments.

Subsection (b) is amended to read as follows:

(b) In the event that any payment made under this Section 5 exceeds the funds available in the Deposit Account, such discretionary advance shall be deemed a service provided by the Bank under this Agreement for which it is entitled to recover its costs as may be determined by the Bank in good faith.

Section 10. Authorized Persons .

Add the following paragraph at the end of Section 10:

Customer represents that: a) Instructions will only be issued by or for a fiduciary pursuant to Department of Labor Regulation Section 404b 1 (a)(2)(i) and b) if Instructions are to be issued by an investment manager, such entity will meet the requirements of Section 3(38) of ERISA and will have been designated by the Customer to manage assets held in the Customer Accounts ("Investment Manager"). An Investment Manager may designate certain of its employees to act as Authorized Persons under this Agreement.

Section 14(a). Foreign Exchange Transactions.

Add the following paragraph at the end of Subsection 14(a):

Instructions to execute foreign exchange transactions with the Bank, its subsidiaries, affiliates or Subcustodians will include (1) the time period in which the transaction must be completed; (2) the location i.e. , Chase New York, Chase London, etc. or the Subcustodian with whom the contract is to be executed and (3) such additional information and guidelines as may be deemed necessary; and, if the Instruction is a standing Instruction, a provision allowing such Instruction to be overridden by specific contrary Instructions.

Mutual Fund Rider to Global Custody Agreement
Between The Chase Manhattan Bank, N.A. and
Each of the Entities Listed on Schedule A Hereto
effective January 3, 1994

Customer represents that the Assets being placed in the Bank's custody are subject to the Investment Company Act of 1940 (the Act), as the same may be amended from time to time.

Except to the extent that the Bank has specifically agreed to comply with a condition of a rule, regulation, interpretation promulgated by or under the authority of the SEC or the Exemptive Order applicable to accounts of this nature issued to the Bank (Investment Company Act of 1940, Release No. 12053, November 20, 1981), as amended, or unless the Bank has otherwise specifically agreed, the Customer shall be solely responsible to assure that the maintenance of Assets under this Agreement complies with such rules, regulations, interpretations or exemptive order promulgated by or under the authority of the Securities Exchange Commission.

The following modifications are made to the Agreement:

Section 3. Subcustodians and Securities Depositories.

Add the following language to the end of Section 3:

The terms Subcustodian and securities depositories as used in this Agreement shall mean a branch of a qualified U.S. bank, an eligible foreign custodian or an eligible foreign securities depository, which are further defined as follows:

(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined in Rule 17f 5 under the Investment Company Act of 1940;

(b) "eligible foreign custodian" shall mean (i) a banking institution or trust company incorporated or organized under the laws of a country other than the United States that is regulated as such by that country's government or an agency thereof and that has shareholders' equity in excess of $200 million in U.S. currency (or a foreign currency equivalent thereof), (ii) a majority owned direct or indirect subsidiary of a qualified U.S. bank or bank holding company that is incorporated or organized under the laws of a country other than the United States and that has shareholders' equity in excess of $100 million in U.S. currency (or a foreign currency equivalent thereof)(iii) a banking institution or trust company incorporated or organized under the laws of a country other than the United States or a majority owned direct or indirect subsidiary of a qualified U.S. bank or bank holding company that is incorporated or organized under the laws of a country other than the United States which has such other qualifications as shall be specified in Instructions and approved by the Bank; or (iv) any other entity that shall have been so qualified by exemptive order, rule or other appropriate action of the SEC; and

(c) "eligible foreign securities depository" shall mean a securities depository or clearing agency, incorporated or organized under the laws of a country other than the United States, which operates (i) the central system for handling securities or equivalent book entries in that country, or (ii) a transnational system for the central handling of securities or equivalent book entries.

The Customer represents that its Board of Directors has approved each of the Subcustodians listed in Schedule B to this Agreement and the terms of the subcustody agreements between the Bank and each Subcustodian, which are attached as Exhibits I through of Schedule B, and further represents that its Board has determined that the use of each Subcustodian and the terms of each subcustody agreement are consistent with the best interests of the Fund(s) and its (their) shareholders. The Bank will supply the Customer with any amendment to Schedule B for approval. As requested by the Bank, the Customer will supply the Bank with certified copies of its Board of Directors resolution(s) with respect to the foregoing prior to placing Assets with any Subcustodian so approved.

Section 11. Instructions.

Add the following language to the end of Section 11:

Deposit Account Payments and Custody Account Transactions made pursuant to Section 5 and 6 of this Agreement may be made only for the purposes listed below. Instructions must specify the purpose for which any transaction is to be made and Customer shall be solely responsible to assure that Instructions are in accord with any limitations or restrictions applicable to the Customer by law or as may be set forth in its prospectus.

(a) In connection with the purchase or sale of Securities at prices as confirmed by Instructions;

(b) When Securities are called, redeemed or retired, or otherwise become payable;

(c) In exchange for or upon conversion into other securities alone or other securities and cash pursuant to any plan or merger, consolidation, reorganization, recapitalization or readjustment;

(d) Upon conversion of Securities pursuant to their terms into other securities;

(e) Upon exercise of subscription, purchase or other similar rights represented by Securities;

(f) For the payment of interest, taxes, management or supervisory fees, distributions or operating expenses;

(g) In connection with any borrowings by the Customer requiring a pledge of Securities, but only against receipt of amounts borrowed;

(h) In connection with any loans, but only against receipt of adequate collateral as specified in Instructions which shall reflect any restrictions applicable to the Customer;

(i) For the purpose of redeeming shares of the capital stock of the Customer and the delivery to, or the crediting to the account of, the Bank, its Subcustodian or the Customer's transfer agent, such shares to be purchased or redeemed;

(j) For the purpose of redeeming in kind shares of the Customer against delivery to the Bank, its Subcustodian or the Customer's transfer agent of such shares to be so redeemed;

(k) For delivery in accordance with the provisions of any agreement among the Customer, the Bank and a broker dealer registered under the Securities Exchange Act of 1934 (the "Exchange Act") and a member of The National Association of Securities Dealers, Inc. ("NASD"), relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange, or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Customer;

(l) For release of Securities to designated brokers under covered call options, provided, however, that such Securities shall be released only upon payment to the Bank of monies for the premium due and a receipt for the Securities which are to be held in escrow. Upon exercise of the option, or at expiration, the Bank will receive from brokers the Securities previously deposited. The Bank will act strictly in accordance with Instructions in the delivery of Securities to be held in escrow and will have no responsibility or liability for any such Securities which are not returned promptly when due other than to make proper request for such return;

(m) For spot or forward foreign exchange transactions to facilitate security trading, receipt of income from Securities or related transactions;

(n) For other proper purposes as may be specified in Instructions issued by an officer of the Customer which shall include a statement of the purpose for which the delivery or payment is to be made, the amount of the payment or specific Securities to be delivered, the name of the person or persons to whom delivery or payment is to be made, and a certification that the purpose is a proper purpose under the instruments governing the Customer; and

o) Upon the termination of this Agreement as set forth in Section 14(i).

Section 12. Standard of Care; Liabilities.

Add the following subsection (c) to Section 12:

(c) The Bank hereby warrants to the Customer that in its opinion, after due inquiry, the established procedures to be followed by each of its branches, each branch of a qualified U.S. bank, each eligible foreign custodian and each eligible foreign securities depository holding the Customer's Securities pursuant to this Agreement afford protection for such Securities at least equal to that afforded by the Bank's established procedures with respect to similar securities held by the Bank and its securities depositories in New York.

Section 14. Access to Records.

Add the following language to the end of Section 14(c):

Upon reasonable request from the Customer, the Bank shall furnish the Customer such reports (or portions thereof) of the Bank's system of internal accounting controls applicable to the Bank's duties under this Agreement. The Bank shall endeavor to obtain and furnish the Customer with such similar reports as it may reasonably request with respect to each Subcustodian and securities depository holding the Customer's assets.

GLOBAL CUSTODY AGREEMENT

WITH

DATE

SPECIAL TERMS AND CONDITIONS RIDER

January, 1994

Schedule B

SUB-CUSTODIANS EMPLOYED BY

THE CHASE MANHATTAN BANK, N.A. LONDON, GLOBAL CUSTODY

COUNTRY	SUB-CUSTODIAN	CORRESPONDENT BANK
ARGENTINA	The Chase Manhattan Bank, N.A., Main Branch 25 De Mayo 130/140 Buenos Aires ARGENTINA	The Chase Manhattan Bank, N.A. Buenos Aires
AUSTRALIA	The Chase Manhattan Bank, Australia Limited 36th Floor World Trade Centre Jamison Street Sydney New South Wales 2000 AUSTRALIA	The Chase Manhattan Bank Australia Limited Sydney
AUSTRIA	Creditanstalt - Bankvereln Schottengasse 6 A - 1011, Vienna AUSTRIA	Credit Lyonnais Vienna
BANGLADESH	Standard Chartered Bank 18-20 Motijheel C.A. Box 536, Dhaka-1000 BANGLADESH	Standard Chartered Bank Dhaka
BELGIUM	Generale Bank 3 Montagne Du Parc 1000 Bruxelles BELGIUM	Credit Lyonnais Bank Brussels
BOTSWANA	Standard Chartered Bank Botswana Ltd. 4th Floor Commerce House The Mall Gaborone BOTSWANA	Standard Chartered Bank Botswana Ltd. Gabarone
BRAZIL	Banco Chase Manhattan, S.A. Chase Manhattan Center Rua Verbo Divino, 1400 Sao Paulo, SP 04719-002 BRAZIL	Banco Chase Manhattan S.A., Sao Paolo
CANADA	The Royal Bank of Canada Royal Bank Plaza Toronto Ontario M5J 2J5 CANADA Canada Trust Canada Trust Tower BCE Place 161 Bay at Front Toronto Ontario M5J 2T2 CANADA	Toronto Dominion Bank Toronto Toronto Dominion Bank Toronto
CHILE	The Chase Manhattan Bank, N.A., Agustinas 1235 Casilla 9192 Santiago CHILE	The Chase Manhattan Bank, N.A., Santiago
COLOMBIA	Cititrust Colombia S.A. Sociedad Fiduciaria Av. Jimenez No 8-89 Santafe de Bogota, DC COLOMBIA	Cititrust Colombia S.A. Sociedad Fiduciaria Santafe de Bogota
CZECH REPUBLIC	Ceskoslovenska Obchodni Banka, A.S.; Na Prikoope 14 115 20 Praha 1 CZECH REPUBLIC	Ceskoslovenska Obchodni Banka, A.S. Praha
DENMARK	Den Danske Bank 2 Holmens Kanala DK 1091 Copenhagen DENMARK	Den Danske Bak Copenhagen
EUROBONDS	Cedel S.A. 67 Blvd Grande Duchesse Charlotte LUXEMBOURG A/c Chase Manhattan Bank, N.A. London	A/c No. 17817 ECU:Lloyds Bank PLC International Banking Dividion London For all other currencies: see relevant country
EURO CDS	First Chicago Clearing Centre 27 Leadenhall Street London EC3A 1AA UK	ECU:Lloyds Bank PLC Banking Division London For all other currencies: see relevant country
FINLAND	Kansallis-Osake-Pankki Aleksanterinkatu 42 00100 Helsinki 10 FINLAND	Kanasallis-Osake-Pankki
FRANCE	Banque Paribas Ref 256 BP 141 3, Rue D'Antin 75078 Paris Cedex 02 FRANCE	Societe Generale Paris
GERMANY	Chase Bank A.G. Alexanderstrasse 59 Postfach 90 01 09 60441 Frankfurt/Main GERMANY	Chase Bank A.G. Frankfurt
GREECE	National Bank of Greece S.A. 38 Stadiou Street Athens GREECE	National Bank of Greece S.A. Athens A/c Chase Manhattan Bank, N.A., London A/c No. 040/7/921578-68
HONG KONG	The Chase Manhattan Bank,NA 40/F One Exchange Square 8, Connaught Place Central, Hong Kong HONG KONG	The Chase Manhattan Bank, N.A., Hong Kong
HUNGARY	Citibank Budapest Rt. Vaci Utca 19-21 1052 Budapest V HUNGARY	Citibank Budapest Rt. Budapest
INDIA	The Hongkong and Shanghai Banking Corporation Limited 52/60 Mahatma Gandhi Road Bombay 400 001 INDIA	The Hongkong and Shanghai Banking Corporation Limited, Bombay
INDONESIA	The Hongkong and Shanghai Banking Corporation Limited World Trade Center J1. Jend Sudirman Kav. 29-31 Jakarta 10023 INDONESIA	The Chase Manhattan Bank, N.A., Jakarta
IRELAND	Bank of Ireland International Financial Services Centre 1 Hargourmaster Place Dublin 1 IRELAND	Allied Irish Bank Dublin
ISRAEL	Bank Leumi Le-Israel B.M. 19 Herzi Street 65136 Tel Aviv ISRAEL	Bank Leumi Le-Israel B.M., Tel Aviv
ITALY	The Chase Manhattan Bank, N.A., Piazza Meda 1 20121 Milan ITALY	The Chase Manhattan Bank, N.A., Milan
JAPAN	The Chase Manhattan Bank, N.A.,1-3 Marunouchi 1-Chome Chiyoda-Ku Tokyo 100 JAPAN	The Chase Manhattan Bank, N.A., Tokyo
JORDAN	Arab Bank Limited P.O. Box 950544-5 Amman Shmeisani JORDAN	Arab Bank Limited Amman
LUXEMBOURG	Banque Generale du Luxembourg S.A., 27 Avenue Monterey LUXEMBOURG	Banque Generale du Luxembourg S.A. Luxembourg
MALAYSIA	The Chase Manhattan Bank, N.A., Pernas International Jalan Sultan Ismail 50250, Kuala Lumpur MALAYSIA	The Chase Manhattan Bank, N.A., Kuala Lumpur
MEXICO (Government Bonds)	The Chase Manhattan Bank, N.A., Hamburgo 213, Piso 7 06660 Mexico D.F. MEXICO Banco Nacional de Mexico, Avenida Juarez No. 104-11 Piso 06040 Mexico D.F. MEXICO	No correspondent Bank (Equities) Banque Commerciale du Maroc Casablanca
NETHERLANDS	ABN AMRO N.V. Securities Centre P.O. Box 3200 4800 De Breda NETHERLANDS	Credit Lyonnais Bank Nederland N.V. Rotterdam
NEW ZEALAND	National Nominees Limited Level 2 BNZ Tower 125 Queen Street Auckland NEW ZEALAND	National Bank of New Zealand Wellington
NORWAY	Den Norske Bank Kirkegaten 21 Oslo 1 NORWAY	Den Norske Bank Oslo
PAKISTAN	Citibank N.A. State Life Building No.1 I.I. Chundrigar Road Karachi PAKISTAN	Citibank N.A. Karachi
PERU	Citibank, N.A. Camino Real 457 CC Torre Real - 5th Floor San Isidro, Lima 27 PERU	Citibank N.A. Lima
PHILIPPINES	The Hongkong and Shanghai Banking Corporation Limited Hong Kong Bank Centre 3/F San Miguel Avenue Ortigas Commercial Centre Pasig Metro Manila PHILIPPINES	The Hongkong and Shaghai Banking Corporation Limited, Manila
POLAND	Bank Polska Kasa Opieki S.A., 6/12 Nowy Swiat Str 00-920 Warsaw POLAND	Bank Potska Kasa Opieki S.A., Warsaw
PORTUGAL	Banco Espirito Santo & Comercial de Lisboa Servico de Gestaode Titulos R. Mouzinho da Silvelra, 36 r/c, 1200 Lisbon PORTUGAL	Banco Pinto & Sotto Mayor Avenida Fontes Pereira de Melo 1000 Lisbon
SHANGHAI (CHINA)	The Hongkong and Shanghai Banking Corporation Limited Shanghai Branch Corporate Banking Centre Unit 504, 5/F Shanghai Centre 1376 Hanjing Xi Lu Shanghai THE PEOPLE'S REPUBLIC OF CHINA	The Chase Manhattan Bank, N.A.,Hong Kong
SCHENZHEN (CHINA)	The Hongkong and Shanghai Banking Corporation Limited 1st Floor Central Plaza Hotel No. 1 Chun Feng Lu Shenzhen THE PEOPLE'S REPUBLIC OF CHINA	The Chase Manhattan Bank, N.A., Hong Kong
SINGAPORE	The Chase Manhattan Bank, N.A. Shell Tower 50 Raffles Place Singapore 0104 SINGAPORE	The Chase Manhattan Bank, N.A. Singapore
SOUTH KOREA	The Hongkong & Shanghai Banking Corporation Limited 6/F Kyobo Building #1 Chongro, 1-ka Chongro-Ku, Seoul SOUGH KOREA	The Hongkong & Shanghai Banking Corporation Limited, Seoul
SPAIN	The Chase Manhattan Bank, N.A.,Calle Peonias 2 7th Floor La Piovera 28042 Madrid SPAIN	Banco Zaragozano, S.A. Madrid
URUGUAY	The First National Bank of Boston Zabala 1463 Montevideo URUGUAY	The First National Bank of Boston Montevideo
U.S.A	The Chase Manhattan Bank, N.A. 1 Chase Manhattan Plaza New York NY 10081 U.S.A.	The Chase Manhattan Bank, N.A. New York
VENEZUELA	Citibank N.A. Carmelitas a Altagracia Edificio Citibank Caracas 1010 VENEZUELA	Citibank N.A. Caracas

AMENDMENT AGREEMENT

AMENDMENT AGREEMENT, dated as of April 18, 1994 (the " Amendment Agreement ") to the Global Custody Agreement, effective January 3, 1994 (the " Custody Agreement ") by and between each of the Entities listed in Attachment A hereto, separately and individually (each such entity referred to hereinafter as the " Customer ") and THE CHASE MANHATTAN BANK, N.A. (the " Bank "). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment . Section I of Schedule A of the Custody Agreement (" Schedule A ") shall be amended to add each Customer listed in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached hereto as Attachment B shall supersede the existing Schedule A in its entirety.

2. Agreement . The Customer agrees to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable thereunder as a "Customer" as defined in the Custody Agreement.

3. Confirmation of Agreement . Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

4. Governing Law . This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK, N.A.

By: /s/Alan P. Naughton
Alan P. Naughton
Vice President

EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO, SEPARATELY AND INDIVIDUALLY

By: /s/Carmen F. Deyesu
Carmen F. Deyesu
Treasurer

Attachment A

LIST OF CUSTOMERS

T. Rowe Price International Series, Inc. on behalf of the
T. Rowe Price International Stock Portfolio

T. Rowe Price Equity Series, Inc. on behalf of the
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio

T. Rowe Price New America Growth Fund, Inc.

T. Rowe Price Income Series, Inc. on behalf of
T. Rowe Price Limited-Term Bond Portfolio

Attachment B
Schedule A
Page 1 of 2

LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.

T. Rowe Price Blue Chip Growth Fund, Inc.

T. Rowe Price Capital Appreciation Fund

T. Rowe Price Dividend Growth Fund, Inc.

T. Rowe Price Equity Income Fund

T. Rowe Price Growth & Income Fund, Inc.

T. Rowe Price Growth Stock Fund, Inc.

Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund

T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio

T. Rowe Price Mid-Cap Growth Fund, Inc.

T. Rowe Price New Era Fund, Inc.

T. Rowe Price New Horizons Fund, Inc.

T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund

T. Rowe Price Science & Technology Fund, Inc.

T. Rowe Price Small-Cap Value Fund, Inc.

CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund

T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio

T. Rowe Price New America Growth Fund, Inc.

Attachment B
Schedule A
Page 2 of 2

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Income Funds

T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.

T. Rowe Price High Yield Fund, Inc.

T. Rowe Price New Income Fund, Inc.

T. Rowe Price Short-Term Bond Fund, Inc.

T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund

T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Foreign Discovery Trust

Foreign Discovery Trust-Augment

Pacific Discovery Trust

European Discovery Trust

Japan Discovery Trust

Latin American Discovery Trust

New York City International Common Trust Fund

III. OTHER

RPFI International Partners, L.P.

No Riders are applicable to the
Customer listed under Section III of
this Schedule A.

AMENDMENT AGREEMENT

AMENDMENT AGREEMENT, dated as of August 15, 1994 (the " Amendment Agreement ") to the Global Custody Agreement, effective January 3, 1994, as amended (the " Custody Agreement ") by and between each of the Entities listed in Attachment A hereto, separately and individually (each such entity referred to hereinafter as the " Customer ") and THE CHASE MANHATTAN BANK, N.A. (the " Bank "). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

4. Governing Law . This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK, N.A.

By: /s/Alan P. Naughton
Alan P. Naughton
Vice President

EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO, SEPARATELY AND INDIVIDUALLY

By: /s/Carmen F. Deyesu
Carmen F. Deyesu
Treasurer

Attachment A

LIST OF CUSTOMERS

T. Rowe Price Equity Series, Inc. on behalf of the
T. Rowe Price Personal Strategy Balanced Portfolio

T. Rowe Price Personal Strategy Funds, Inc. on behalf of
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

Attachment B
Schedule A
Page 1 of 2

LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.

T. Rowe Price Blue Chip Growth Fund, Inc.

T. Rowe Price Capital Appreciation Fund

T. Rowe Price Dividend Growth Fund, Inc.

T. Rowe Price Equity Income Fund

T. Rowe Price Growth & Income Fund, Inc.

T. Rowe Price Growth Stock Fund, Inc.

Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund

T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio

T. Rowe Price Mid-Cap Growth Fund, Inc.

T. Rowe Price New Era Fund, Inc.

T. Rowe Price New Horizons Fund, Inc.

T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund

T. Rowe Price Science & Technology Fund, Inc.

T. Rowe Price Small-Cap Value Fund, Inc.

CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund

T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio

T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio

T. Rowe Price New America Growth Fund, Inc.

Income Funds

T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.

T. Rowe Price High Yield Fund, Inc.

T. Rowe Price New Income Fund, Inc.

T. Rowe Price Short-Term Bond Fund, Inc.

T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund

T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio

T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

Attachment B
Schedule A
Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.

T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried Savings Plan

Common Trust Funds

T. Rowe Price Trust company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Foreign Discovery Trust

Foreign Discovery Trust-Augment

Pacific Discovery Trust

European Discovery Trust

Japan Discovery Trust

Latin American Discovery Trust

New York City International Common Trust Fund

III. OTHER

RPFI International Partners, L.P.

No Riders are applicable
to the Customer listed
under Section III of
this Schedule A.

AMENDMENT AGREEMENT

AMENDMENT AGREEMENT, dated as of November 28, 1994 (the "Amendment Agreement") to the Global Custody Agreement, effective January 3, 1994, as amended (the "Custody Agreement") by and between each of the Entities listed in Attachment A hereto, separately and individually (each such entity referred to hereinafter as the "Customer") and THE CHASE MANHATTAN BANK, N.A. (the "Bank"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Section I of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add each Customer listed in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached hereto as Attachment B shall supersede the existing Schedule A in its entirety.

2. Agreement. The Customer agrees to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable thereunder as a "Customer" as defined in the Custody Agreement.

3. Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

4. Governing Law. This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK, N.A.

/s/Alan P. Naughton
By :_________________________________
Alan P. Naughton
Vice President

EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO, SEPARATELY AND INDIVIDUALLY

/s/Carmen F. Deyesu
By: _________________________________
Carmen F. Deyesu
Treasurer

Attachment A

LIST OF CUSTOMERS

T. Rowe Price Value Fund, Inc.

T. Rowe Price Capital Opportunity Fund, Inc.

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund

Attachment B
Schedule A
Page 1 of 2

LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.

T. Rowe Price Blue Chip Growth Fund, Inc.

T. Rowe Price Capital Appreciation Fund

T. Rowe Price Capital Opportunity Fund, Inc.

T. Rowe Price Dividend Growth Fund, Inc.

T. Rowe Price Equity Income Fund

T. Rowe Price Growth & Income Fund, Inc.

T. Rowe Price Growth Stock Fund, Inc.

Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund

T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio

T. Rowe Price Mid-Cap Growth Fund, Inc.

T. Rowe Price New Era Fund, Inc.

T. Rowe Price New Horizons Fund, Inc.

T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund

T. Rowe Price Science & Technology Fund, Inc.

T. Rowe Price Small-Cap Value Fund, Inc.

CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund

T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio

T. Rowe Price New America Growth Fund, Inc.

T. Rowe Price Value Fund, Inc.

Income Funds

T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.

T. Rowe Price High Yield Fund, Inc.

T. Rowe Price New Income Fund, Inc.

T. Rowe Price Short-Term Bond Fund, Inc.

T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Emerging Markets Bond Fund

T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio

T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

Attachment B
Schedule A
Page 2 of 2

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried Savings Plan

Common Trust Funds

T. Rowe Price Trust company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Foreign Discovery Trust

Foreign Discovery Trust-Augment

Pacific Discovery Trust

European Discovery Trust

Japan Discovery Trust

Latin American Discovery Trust

New York City International Common Trust Fund

III. OTHER

RPFI International Partners, L.P.

No Riders are applicable to the
Customer listed under Section III of
this Schedule A.

AMENDMENT AGREEMENT

AMENDMENT AGREEMENT, dated as of May 31, 1995 (the "Amendment Agreement") to the Global Custody Agreement, effective January 3, 1994, as amended (the "Custody Agreement") by and between each of the Entities listed in Attachment A hereto, separately and individually (each such entity referred to hereinafter as the "Customer") and THE CHASE MANHATTAN BANK, N.A. (the "Bank"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Section I of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add and delete certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached hereto as Attachment B shall supersede the existing Schedule A in its entirety.

2. Agreement. The Customer agrees to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable thereunder as a "Customer" as defined in the Custody Agreement.

3. Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

4. Governing Law. This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK, N.A.

/s/Alan P. Naughton
By: _________________________________
Alan P. Naughton
Vice President

EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO, SEPARATELY AND INDIVIDUALLY

/s/Carmen F. Deyesu
By: _________________________________
Carmen F. Deyesu
Treasurer

Attachment A

LIST OF CUSTOMERS

Add the following Fund:

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund

Delete the following Fund:

CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund

Attachment B
Schedule A
Page 1 of 2

LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.

T. Rowe Price Blue Chip Growth Fund, Inc.

T. Rowe Price Capital Appreciation Fund

T. Rowe Price Capital Opportunity Fund, Inc.

T. Rowe Price Dividend Growth Fund, Inc.

T. Rowe Price Equity Income Fund

T. Rowe Price Growth & Income Fund, Inc.

T. Rowe Price Growth Stock Fund, Inc.

Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund

T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio

T. Rowe Price Mid-Cap Growth Fund, Inc.

T. Rowe Price New Era Fund, Inc.

T. Rowe Price New Horizons Fund, Inc.

T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund

T. Rowe Price Science & Technology Fund, Inc.

T. Rowe Price Small-Cap Value Fund, Inc.

T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio

T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio

T. Rowe Price New America Growth Fund, Inc.

T. Rowe Price Value Fund, Inc.

Income Funds

T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.

T. Rowe Price High Yield Fund, Inc.

T. Rowe Price New Income Fund, Inc.

T. Rowe Price Short-Term Bond Fund, Inc.

T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund

T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio

T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

Attachment B
Schedule A
Page 2 of 2

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried Savings Plan

Common Trust Funds

T. Rowe Price Trust company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Foreign Discovery Trust

Foreign Discovery Trust-Augment

Pacific Discovery Trust

European Discovery Trust

Japan Discovery Trust

Latin American Discovery Trust

New York City International Common Trust Fund

III. OTHER

RPFI International Partners, L.P.

No Riders are applicable to the
Customer listed under Section III of
this Schedule A.

AMENDMENT AGREEMENT

AMENDMENT AGREEMENT, dated as of November 1, 1995 (the "Amendment Agreement") to the Global Custody Agreement, effective January 3, 1994, as amended (the "Custody Agreement") by and between each of the Entities listed in Attachment A hereto, separately and individually (each such entity referred to hereinafter as the "Customer") and THE CHASE MANHATTAN BANK, N.A. (the "Bank"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

2. Agreement. The Customer agrees to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable thereunder as a "Customer" as defined in the Custody Agreement.

3. Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

4. Governing Law. This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK, N.A.

/s/Alan R. Naughton
By: _________________________________
Alan R. Naughton
Vice President

EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO, SEPARATELY AND INDIVIDUALLY

/s/Carmen F. Deyesu
By: _________________________________
Carmen F. Deyesu
Treasurer

Attachment A

LIST OF CUSTOMERS

Add the following Funds:

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Stock Fund

T. Rowe Price Corporate Income Fund, Inc.

T. Rowe Price Health & Life Sciences Fund, Inc.

Attachment B
Schedule A
Page 1 of 2

LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.

T. Rowe Price Blue Chip Growth Fund, Inc.

T. Rowe Price Capital Appreciation Fund

T. Rowe Price Capital Opportunity Fund, Inc.

T. Rowe Price Dividend Growth Fund, Inc.

T. Rowe Price Equity Income Fund

T. Rowe Price Growth & Income Fund, Inc.

T. Rowe Price Growth Stock Fund, Inc.

Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund

T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio

T. Rowe Price Mid-Cap Growth Fund, Inc.

T. Rowe Price New Era Fund, Inc.

T. Rowe Price New Horizons Fund, Inc.

T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund

T. Rowe Price Science & Technology Fund, Inc.

T. Rowe Price Small-Cap Value Fund, Inc.

T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio

T. Rowe Price New America Growth Fund, Inc.

T. Rowe Price Value Fund, Inc.

T. Rowe Price Health & Life Sciences Fund, Inc.

Income Funds

T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.

T. Rowe Price High Yield Fund, Inc.

T. Rowe Price New Income Fund, Inc.

T. Rowe Price Short-Term Bond Fund, Inc.

T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund

T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio

T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. Rowe Price Corporate Income Fund, Inc.

Attachment B
Schedule A
Page 1 of 2

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Foreign Discovery Trust

Foreign Discovery Trust-Augment

Pacific Discovery Trust

European Discovery Trust

Japan Discovery Trust

Latin American Discovery Trust

New York City International Common Trust Fund

III. OTHER

RPFI International Partners, L.P.

No Riders are applicable
to the Customer listed under
Section III of this Schedule A.

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, November 28, 1994, May 31, 1995, and November 1, 1995 (the "Custody Agreement"), by and between each of the Entities listed in Attachment A hereto, separately and individually (each such entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., which contracts have been assumed by operation of law by THE CHASE MANHATTAN BANK (the "Bank") is hereby further amended, as of July 31, 1996 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

2. Agreement. The Customer agrees to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable thereunder as a "Customer" as defined in the Custody Agreement.

3. Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

4. Governing Law. This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK

/s/Caroline Willson
By:_________________________________
Caroline Willson
Vice President

EACH OF THE CUSTOMERS LISTED IN

ATTACHMENT A HERETO, SEPARATELY AND

INDIVIDUALLY

/s/Carmen F. Deyesu
By:________________________________
Carmen F. Deyesu
Treasurer

Attachment A

LIST OF CUSTOMERS

Add the following Funds:

T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Mid-Cap Growth Portfolio

T. Rowe Price Financial Services Fund, Inc.

Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund

T. Rowe Price Mid-Cap Value Fund, Inc.

T. Rowe Price Trust Company, as Trustee for the
International Common Trust Fund on behalf of:
Emerging Markets Equity Trust

Attachment B
Schedule A
Page 1 of 2

LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.

T. Rowe Price Blue Chip Growth Fund, Inc.

T. Rowe Price Capital Appreciation Fund

T. Rowe Price Capital Opportunity Fund, Inc.

T. Rowe Price Dividend Growth Fund, Inc.

T. Rowe Price Equity Income Fund

T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio

T. Rowe Price Financial Services Fund, Inc.

T. Rowe Price Growth & Income Fund, Inc.

T. Rowe Price Growth Stock Fund, Inc.

T. Rowe Price Health Sciences Fund, Inc.

Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund

Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund

T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio

T. Rowe Price Mid-Cap Growth Fund, Inc.

T. Rowe Price Mid-Cap Value Fund, Inc.

T. Rowe Price New America Growth Fund

T. Rowe Price New Era Fund, Inc.

T. Rowe Price New Horizons Fund, Inc.

T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund

T. Rowe Price Science & Technology Fund, Inc.

T. Rowe Price Small-Cap Value Fund, Inc.

T. Rowe Price Value Fund, Inc.

Income Funds

T. Rowe Price Corporate Income Fund, Inc.

T. Rowe Price High Yield Fund, Inc.

T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund

T. Rowe Price New Income Fund, Inc.

T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. Rowe Price Short-Term Bond Fund, Inc.

T. Rowe Price Short-Term U.S. Government Fund, Inc.

T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust

European Discovery Trust

Foreign Discovery Trust

Foreign Discovery Trust-Augment

Japan Discovery Trust

Latin America Discovery Trust

Pacific Discovery Trust

New York City International Common Trust Fund

III. OTHER

RPFI International Partners, L.P.

No Riders are applicable to the
Customer listed under Section III of
this Schedule A.

AMENDMENT, dated July 17, 1997 to the January 3, 1994 Custody Agreement ("Agreement"), as amended July 31, 1996 ("Amendment Agreement"), by and between each of the Entities listed in Attachment B of the Amendment Agreement, separately and individually (each such entity hereinafter referred to as the "Customer"), and The Chase Manhattan Bank, N.A. whose obligations have since been adopted by The Chase Manhattan Bank ("Bank"), having a place of business at One Chase Manhattan Plaza, New York, N.Y. 10081

It is hereby agreed as follows:

Section 1. Except as modified hereby, the Agreement is confirmed in all respects. Capitalized terms used herein without definition shall have the meanings ascribed to them in the Agreement.

Section 2. The Agreement is amended as follows by adding the following as new ' 15:

(a) "CMBI" shall mean Chase Manhattan Bank International, an indirect wholly-owned subsidiary of Bank, located in Moscow, Russia, and any nominee companies appointed by it.

(b) "International Financial Institution" shall mean any bank in the top 1,000 (together with their affiliated companies) as measured by "Tier 1" capital or any broker/dealer in the top 100 as measured by capital.

(d) "No-Action Letter" shall mean the response of the Securities and Exchange Commission's Office of Chief Counsel of Investment Management, dated April 18, 1995, in respect of the Templeton Russia Fund, Inc. (SEC Ref. No. 95-151-CC, File No. 811-8788) providing "no- action" relief under '17(f) of the Investment Company Act of 1940, as amended, and SEC Rule 17- f5 thereunder, in connection with custody of such Templeton Russia Fund, Inc.'s investments in Russian Securities.

(e) "Reasonable Care" shall mean the use of reasonable custodial practices under the applicable circumstances as measured by the custodial practices then prevailing in Russia of International Financial Institutions acting as custodians for their institutional investor clients in Russia.

(f) "Registrar Company" shall mean any entity providing share registration services to an issuer of Russian Securities.

(g) "Registrar Contact" shall mean a contract between CMBI and a Registrar Company (and as the same may be amended from time to time) containing, inter alia, the contractual provisions described at paragraphs (a)-(e) on pps. 5-6 of the No-Action Letter.

(h) "Russian Security" shall mean a Security issued by a Russian issuer.

(i) "Share Extract" shall mean: (i) an extract of its share registration books issued by a Registrar Company indicating an investor's ownership of a security; and (ii) a form prepared by CMBI or its agent in those cases where a Registrar Company in unwilling to issue a Share Extract.

Section 3. Section 6(a) of the Agreement is amended by adding the following at the end thereof: "With respect to Russia, payment for Russian Securities shall not be made prior to the issuance of the Share Extract relating to such Russian Security. Delivery of Russian Securities may be made in accordance with the customary or established securities trading or securities processing practices and procedures in Russia. Delivery of Russian Securities may also be made in any manner specifically required by Instructions acceptable to the Bank. Customer shall promptly supply such transaction and settlement information as may be requested by Bank or CMBI in connection with particular transactions."

Section 4. Section 8 of the Agreement is amended by adding a new paragraph to the end thereof as follows: "It is understood and agreed that Bank need only use its reasonable efforts with respect to performing the functions described in this '8 with respect to Russian Securities."

Section 5. Section 12(a)(i) of the Agreement is amended with respect to Russian custody by deleting the phrase "reasonable care" wherever it appears and substituting, in lieu thereof, the phrase "Reasonable Care."

Section 6. Section 12(a)(i) of the Agreement is further amended with respect to Russian custody by inserting the following at the end of the first sentence thereof: "provided that, with respect to Russian Securities, Bank's responsibilities shall be limited to safekeeping of relevant Share Extracts."

Section 7. Section 12(a)(i) of the Agreement is further amended with respect to Russian custody by inserting the following after the second sentence thereof: "In connection with the foregoing, neither Bank nor CMBI shall assume responsibility for, and neither shall be liable for, any action or inaction of any Registrar Company and no Registrar Company shall be, or shall be deemed to be, Bank, CMBI, a Subcustodian, a securities depository or the employee, agent or personnel of any of the foregoing. To the extent that CMBI employs agents to perform any of the functions to be performed by Bank or CMBI with respect to Russian Securities, neither Bank nor CMBI shall be responsible for any act, omission, default or for the solvency of any such agent unless the appointment of such agent was made with Negligence or in bad faith, or for any loss due to the negligent act of such agent except to the extent that such agent performs in a negligent manner which is the cause of the loss to the Customer and the Bank or CMBI failed to exercise reasonable care in monitoring such agent's performance where Customer has requested and Bank has agreed to accept such monitoring responsibility and except that where Bank or CMBI uses (i) an affiliated nominee or (ii) an agent to perform the share registration or share confirmation functions described in paragraphs (a)-(e) on pps. 5-6 of the No-Action Letter, and, to the extent applicable to CMBI, the share registration functions described on pps. 2-3 of the No-Action Letter, Bank and CMBI shall be liable to Customer as if CMBI were responsible for performing such services itself."

Section 8. Section 12(a)(ii) is amended with respect to Russian custody by deleting the word "negligently" and substituting, in lieu thereof, the word "Negligently."

Section 9. Section 12(a)(iii) is amended with respect to Russian custody by deleting the word "negligence" and substituting, in lieu thereof, the word "Negligence."

Section 10. Add a new Section 16 to the Agreement as follows:

(a) Bank will advise Customer (and will update such advice from time to time as changes occur) of those Registrar Companies with which CMBI has entered into a Registrar Contract. Bank shall cause CMBI both to monitor each Registrar Company and to promptly advise Customer when CMBI has actual knowledge of the occurrence of any one or more of the events described in paragraphs (i)-(v) on pps. 8-9 of the No-Action Letter with respect to a Registrar Company that serves in that capacity for any issuer the shares of which are held by Customer.

(b) Where Customer is considering investing in the Russian Securities of an issuer as to which CMBI does not have a Registrar Company, Customer may request that Bank ask that CMBI both consider whether it would be willing to attempt to enter into such a Registrar Contract and to advise Customer of its willingness to do so. Where CMBI has agreed to make such an attempt, Bank will advise Customer of the occurrence of any one or more or the events described in paragraphs (i)-(iv) on pps. 8-9 of the No-Action Letter of which CMBI has actual knowledge.

(c) Where Customer is considering investing in the Russian Securities of an issuer as to which CMBI has a Registrar Contract with the issuer's Registrar Company, Customer may advise Bank of its interest in investing in such issuer and, in such event, Bank will advise Customer of the occurrence of any one or more of the events described in paragraphs (i)-(v) on pps. 8-9 of the No- Action Letter of which CMBI has actual knowledge.

Section 11. Add a new Section 17 to the Agreement as follows: "Customer shall pay for and hold Bank and CMBI harmless from any liability or loss resulting from the imposition or assessment of any taxes (including, but not limited to, state, stamp and other duties) or other governmental charges, and any related expenses with respect to income on Russian Securities."

Section 12. Add a new Section 18 to the Agreement as follows: "Customer acknowledges and agrees that CMBI may not be able, in given cases and despite its reasonable efforts, to obtain a Share Extract from a Registrar Company and CMBI shall not be liable in any such even including with respect to any losses resulting from such failure."

Section 13. Add a new Section 19 to the Agreement as follows: "Customer acknowledges that it has received, reviewed and understands that Chase market report for Russia, including, but not limited to, the risks described therein."

Section 14. Add a new Section 20 to the Agreement as follows: "Subject to the cooperation of a Registrar Company, for at least the first two years following CMBI's first use of a Registrar Company, Bank shall cause CMBI to conduct share confirmations on at least a quarterly basis, although thereafter confirmations may be conducted on a less frequent basis if Customer's Board of Directors, in consultation with CMBI, determines it to be appropriate."

Section 15. Add a new Section 21 to the Agreement as follows: "Bank shall cause CMBI to prepare for distribution to Customer's Board of Directors a quarterly report identifying: (i) any concerns it has regarding the Russian share registration system that should be brought to the attention of the Board of Directors; and (ii) the steps CMBI has taken during the reporting period to ensure that Customer's interests continue to be appropriately recorded."

Section 16. Add a new Section 22 to the Agreement as follows: "Except as provided in new '16(b), the services to be provided by Bank hereunder will be provided only in relation to Russian Securities for which CMBI has entered into a Registrar Contract with the relevant Registrar Company."

*********************

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.

for EACH CUSTOMER separately and individually	THE CHASE MANHATTAN BANK
/s/Henry H. Hopkins Henry H. Hopkins Vice President	/s/Helen C. Bairsto Helen C. Bairsto Vice President

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, and July 31, 1996 (the "Custody Agreement"), by and between each of the Entities listed in Attachment A hereto, separately and individually (each such entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., which contracts have been assumed by operation of law by THE CHASE MANHATTAN BANK (the "Bank") is hereby further amended, as of July 23, 1997 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Section 1 of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached hereto as Attachment B shall supersede the existing Schedule A in its entirety.

2. Agreement. The Customer agrees to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable thereunder as a "Customer" as defined in the Custody Agreement.

3. Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

4. Governing Law: This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the

day and year first above written.

THE CHASE MANHATTAN BANK

By: /s/Caroline Willson
Caroline Willson
Vice President

EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO, SEPARATELY AND INDIVIDUALLY

By: /s/Carmen F. Deyesu
Carmen F. Deyesu
Treasurer

Attachment A

LIST OF CUSTOMERS

Add the following Funds:

T. Rowe Price Diversified Small-Cap Growth Fund, Inc.

T. Rowe Price Media & Telecommunications Fund, Inc.

T. Rowe Price Tax-Efficient Balanced Fund, Inc.

Change the name of the following Fund:

T. Rowe Price OTC Fund, Inc., on behalf of:
T. Rowe Price OTC Fund

Effective May 1, 1997, the fund name changed to:
T. Rowe Price Small-Cap Stock Fund, Inc.

Delete the following Fund:

T. Rowe Price International Funds, Inc., on behalf of:
T. Rowe Price Short-Term Global Income Fund

Attachment B
Schedule A
Page 1 of 3

LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK
DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.

T. Rowe Price Blue Chip Growth Fund, Inc.

T. Rowe Price Capital Appreciation Fund

T. Rowe Price Capital Opportunity Fund, Inc.

T. Rowe Price Diversified Small-Cap Growth Fund, Inc.

T. Rowe Price Dividend Growth Fund, Inc.

T. Rowe Price Equity Income Fund

T. Rowe Price Financial Services Fund, Inc.

T. Rowe Price Growth & Income Fund, Inc.

T. Rowe Price Growth Stock Fund, Inc.

T. Rowe Price Health Sciences Fund, Inc.

Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund

Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund

Attachment B
Schedule A
Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Equity Funds

T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock Portfolio

T. Rowe Price Media & Telecommunications Fund, Inc.

T. Rowe Price Mid-Cap Growth Fund, Inc.

T. Rowe Price Mid-Cap Value Fund, Inc.

T. Rowe Price New America Growth Fund

T. Rowe Price New Era Fund, Inc.

T. Rowe Price New Horizons Fund, Inc.

T. Rowe Price Science & Technology Fund, Inc.

T. Rowe Price Small-Cap Stock Fund, Inc.

T. Rowe Price Small-Cap Value Fund, Inc.

T. Rowe Price Value Fund, Inc.

Income Funds

T. Rowe Price Corporate Income Fund, Inc.

T. Rowe Price High Yield Fund, Inc.

T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price International Bond Fund

T. Rowe Price New Income Fund, Inc.

T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. Rowe Price Short-Term Bond Fund, Inc.

T. Rowe Price Short-Term U.S. Government Fund, Inc.

T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund

T. Rowe Price Tax-Efficient Balanced Fund, Inc.

Attachment B
Schedule A
Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.

T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the
International Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust

European Discovery Trust

Foreign Discovery Trust

Foreign Discovery Trust - Augment

Japan Discovery Trust

Latin America Discovery Trust

Pacific Discovery Trust

New York City International Common Trust Fund

III. OTHER

RPFI International Partners, L.P.

No Riders are applicable
to the Customer listed
under Section III of
this Schedule A.

AMENDMENT, dated July 23, 1997, to the Custody Agreement ("Agreement"), dated January 3, 1994, between The Chase Manhattan Bank (as successor to The Chase Manhattan Bank, N.A.), having an office at 270 Park Avenue, New York, NY 10017-2070 and certain T. Rowe Price funds.

It is agreed as follows:

1. The third line of '8 of the Agreement is deleted and the following is inserted, in lieu thereof:

Bank shall provide proxy voting services in accordance with the terms of the proxy voting services rider ("Proxy Rider") annexed hereto as Exhibit 1. Proxy voting services may be provided by Bank or, in whole or in part, by one or more third parties appointed by Bank (which may be Affiliates of Bank).

2. Except as modified hereby, the Agreement is confirmed in all respects.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.

EACH OF THE CUSTOMERS, INDIVIDUALLY AND SEPARATELY LISTED ON SECTION 1 OF SCHEDULE A HERETO	THE CHASE MANHATTAN BANK
By:/s/Henry H. Hopkins Henry H. Hopkins Vice President	By:/s/Helen C. Bairsto Helen C. Bairsto Vice President

EACH OF THE CUSTOMERS, INDIVIDUALLY AND
SEPARATELY LISTED ON SECTION 2 OF
SCHEDULE A HERETO

By:/s/Nancy M. Morris
Nancy M. Morris
Vice President

Exhibit 1

GLOBAL PROXY SERVICE RIDER
To Global Custody Agreement
Between
THE CHASE MANHATTAN BANK
AND
Certain T. ROWE PRICE FUNDS
dated 3rd January, 1994

1. Global Proxy Services ("Proxy Services") shall be provided for the countries listed in the procedures and guidelines ("Procedures") furnished to the Customer, as the same may be amended by Bank from time to time on prior notice to Customer. The Procedures are incorporated by reference herein and form a part of this Rider.

2. Proxy Services shall consist of those elements as set forth in the Procedures, and shall include (a) notifications ("Notifications") by Bank to Customer of the dates of pending shareholder meetings, resolutions to be voted upon and the return dates as may be received by Bank or provided to Bank by its Subcustodians or third parties, and (b) voting by Bank of proxies based on Customer directions. Original proxy materials or copies thereof shall not be provided. Notifications shall generally be in English and, where necessary, shall be summarized and translated from such non- English materials as have been made available to Bank or its Subcustodian. In this respect Bank=s only obligation is to provide information from sources it believes to be reliable and/or to provide materials summarized and/or translated in good faith. Bank reserves the right to provide Notifications, or parts thereof, in the language received. Upon reasonable advance request by Customer, backup information relative to Notifications, such as annual reports, explanatory material concerning resolutions, management recommendations or other material relevant to the exercise of proxy voting rights shall be provided as available, but without translation.

3. While Bank shall attempt to provide accurate and complete Notifications, whether or not translated, Bank shall not be liable for any losses or other consequences that may result from reliance by Customer upon Notifications where Bank prepared the same in good faith.

4. Notwithstanding the fact that Bank may act in a fiduciary capacity with respect to Customer under other agreements or otherwise under the Agreement, in performing Proxy Services

Bank shall be acting solely as the agent of Customer, and shall not exercise any discretion with regard to such Proxy Services.

5. Proxy voting may be precluded or restricted in a variety of circumstances, including, without limitation, where the relevant Securities are: (I) on loan; (ii) at registrar for registration or reregistration; (iii) the subject of a conversion or other corporate action; (iv) not held in a name subject to the control of Bank or its Subcustodian or are otherwise held in a manner which precludes voting; (v) not capable of being voted on account of local market regulations or practices or restrictions by the issuer; or (vi) held in a margin or collateral account.

6. Customer acknowledges that in certain countries Bank may be unable to vote individual proxies but shall only be able to vote proxies on a net basis (e.g., a net yes or no vote given the voting instructions received from all customers).

7. Customer shall not make any use of the information provided hereunder, except in connection with the funds or plans covered hereby, and shall in no event sell, license, give or otherwise make the information provided hereunder available, to any third party, and shall not directly or indirectly compete with Bank or diminish the market for Proxy Services by provision of such information, in whole or in part, for compensation or otherwise, to any third party.

8. The names of Authorized Persons for Proxy Services shall be furnished to Bank in accordance with '10 of the Agreement. Proxy Services fees shall be as separately agreed.

SCHEDULE A

SECTION 1

T. Rowe Price Balanced Fund, Inc.

T. Rowe Price Blue Chip Growth Fund, Inc.

T. Rowe Price Capital Appreciation Fund

T. Rowe Price Capital Opportunity Fund, Inc.

T. Rowe Price Corporate Income Fund, Inc.

T. Rowe Price Diversified Small-Cap Growth Fund, Inc.

T. Rowe Price Dividend Growth Fund, Inc.

T. Rowe Price Equity Income Fund

T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio

T. Rowe Price Financial Services Fund, Inc.

T. Rowe Price Growth & Income Fund, Inc.

T. Rowe Price Growth Stock Fund, Inc.

T. Rowe Price Health Sciences Fund, Inc.

T. Rowe Price High Yield Fund, Inc.

T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited Term Bond Portfolio

Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund

T. Rowe Price Media & Telecommunications Fund, Inc.

T. Rowe Price Mid-Cap Growth Fund, Inc.

T. Rowe Price Mid-Cap Value Fund, Inc.

T. Rowe Price New America Growth Fund, Inc.

T. Rowe Price New Era Fund, Inc.

T. Rowe Price New Horizons Fund, Inc.

T. Rowe Price New Income Fund, Inc.

T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. Rowe Price Science & Technology Fund, Inc.

T. Rowe Price Short-Term Bond Fund, Inc.

T. Rowe Price Short-Term U.S. Government Fund, Inc.

T. Rowe Price Small-Cap Stock Fund, Inc.

T. Rowe Price Small-Cap Value Fund, Inc.

T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund

T. Rowe Price Tax-Efficient Balanced Fund, Inc.

T. Rowe Price Value Fund, Inc.

SECTION 2

NYC International Common Trust Fund

AMENDMENT, dated October 29, 1997, to the Custody Agreement ("Agreement"), dated January 3, 1994, between The Chase Manhattan Bank (as successor to The Chase Manhattan Bank, N.A.), having an office at 270 Park Avenue, New York, NY 10017-2070 and certain T. Rowe Price funds.

It is agreed as follows:

1. The third line of '8 of the Agreement is deleted and the following is inserted, in lieu thereof:

2. Except as modified hereby, the Agreement is confirmed in all respects.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.

EACH OF THE CUSTOMERS, INDIVIDUALLY AND SEPARATELY LISTED ON SECTION 1 OF SCHEDULE A HERETO	THE CHASE MANHATTAN BANK
By:/s/Henry H. Hopkins Henry H. Hopkins Vice President	By:/s/Helen C. Bairsto Helen C. Bairsto Vice President

EACH OF THE CUSTOMERS, INDIVIDUALLY AND
SEPARATELY LISTED ON SECTION 2 OF
SCHEDULE A HERETO

By:/s/Nancy M. Morris
Nancy M. Morris
Vice President

GLOBAL PROXY SERVICE RIDER
To Global Custody Agreement
Between
THE CHASE MANHATTAN BANK
AND
Certain T. ROWE PRICE FUNDS
dated 3rd January, 1994

4. Notwithstanding the fact that Bank may act in a fiduciary capacity with respect to Customer under other agreements or otherwise under the Agreement, in performing Proxy Services Bank shall be acting solely as the agent of Customer, and shall not exercise any discretion with regard to such Proxy Services.

8. The names of Authorized Persons for Proxy Services shall be furnished to Bank in accordance with xa4 10 of the Agreement. Proxy Services fees shall be as separately agreed.

SCHEDULE A

SECTION 1

T. Rowe Price Balanced Fund, Inc.

T. Rowe Price Blue Chip Growth Fund, Inc.

T. Rowe Price Capital Appreciation Fund

T. Rowe Price Capital Opportunity Fund, Inc.

T. Rowe Price Corporate Income Fund, Inc.

T. Rowe Price Diversified Small-Cap Growth Fund, Inc.

T. Rowe Price Dividend Growth Fund, Inc.

T. Rowe Price Equity Income Fund

T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio

T. Rowe Price Financial Services Fund, Inc.

T. Rowe Price Growth & Income Fund, Inc.

T. Rowe Price Growth Stock Fund, Inc.

T. Rowe Price Health Sciences Fund, Inc.

T. Rowe Price High Yield Fund, Inc.

T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited Term Bond Portfolio

Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund

T. Rowe Price Media & Telecommunications Fund, Inc.

T. Rowe Price Mid-Cap Growth Fund, Inc.

T. Rowe Price Mid-Cap Value Fund, Inc.

T. Rowe Price New America Growth Fund, Inc.

T. Rowe Price New Era Fund, Inc.

T. Rowe Price New Horizons Fund, Inc.

T. Rowe Price New Income Fund, Inc.

T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. Rowe Price Real Estate Fund, Inc.

T. Rowe Price Science & Technology Fund, Inc.

T. Rowe Price Short-Term Bond Fund, Inc.

T. Rowe Price Short-Term U.S. Government Fund, Inc.

T. Rowe Price Small-Cap Stock Fund, Inc.

T. Rowe Price Small-Cap Value Fund, Inc.

T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund

T. Rowe Price Tax-Efficient Balanced Fund, Inc.

T. Rowe Price Value Fund, Inc.

SECTION 2

NYC International Common Trust Fund

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, and July 23, 1997 (the "Custody Agreement"), by and between each of the Entities listed in Attachment A hereto, separately and individually (each such entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., which contracts have been assumed by operation of law by THE CHASE MANHATTAN BANK (the "Bank") is hereby further amended, as of October 29, 1997 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

2. Agreement. The Customer agrees to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable thereunder as a "Customer" as defined in the Custody Agreement.

3. Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

4. Governing Law: This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK

By: /s/Helen C. Bairsto
Helen C. Bairsto
Vice President

EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO, SEPARATELY AND INDIVIDUALLY

By: /s/Carmen F. Deyesu
Carmen F. Deyesu
Treasurer

Attachment A

LIST OF CUSTOMERS

Add the following Fund:

T. Rowe Price Real Estate Fund, Inc.

Attachment B
Schedule A
Page 1 of 3

LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK
DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.

T. Rowe Price Blue Chip Growth Fund, Inc.

T. Rowe Price Capital Appreciation Fund

T. Rowe Price Capital Opportunity Fund, Inc.

T. Rowe Price Diversified Small-Cap Growth Fund, Inc.

T. Rowe Price Dividend Growth Fund, Inc.

T. Rowe Price Equity Income Fund

T. Rowe Price Financial Services Fund, Inc.

T. Rowe Price Growth & Income Fund, Inc.

T. Rowe Price Growth Stock Fund, Inc.

T. Rowe Price Health Sciences Fund, Inc.

Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund

Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund

Attachment B
Schedule A
Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Equity Funds

T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock Portfolio

T. Rowe Price Media & Telecommunications Fund, Inc.

T. Rowe Price Mid-Cap Growth Fund, Inc.

T. Rowe Price Mid-Cap Value Fund, Inc.

T. Rowe Price New America Growth Fund

T. Rowe Price New Era Fund, Inc.

T. Rowe Price New Horizons Fund, Inc.

T. Rowe Price Real Estate Fund, Inc.

T. Rowe Price Science & Technology Fund, Inc.

T. Rowe Price Small-Cap Stock Fund, Inc.

T. Rowe Price Small-Cap Value Fund, Inc.

T. Rowe Price Value Fund, Inc.

Income Funds

T. Rowe Price Corporate Income Fund, Inc.

T. Rowe Price High Yield Fund, Inc.

T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price International Bond Fund

T. Rowe Price New Income Fund, Inc.

T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. Rowe Price Short-Term Bond Fund, Inc.

T. Rowe Price Short-Term U.S. Government Fund, Inc.

T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund

T. Rowe Price Tax-Efficient Balanced Fund, Inc.

Attachment B
Schedule A
Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried Employee Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the
International Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust

European Discovery Trust

Foreign Discovery Trust

Foreign Discovery Trust - Augment

Japan Discovery Trust

Latin America Discovery Trust

Pacific Discovery Trust

New York City International Common Trust Fund

III. OTHER

RPFI International Partners, L.P.

No Riders are applicable
to the Customer listed
under Section III of
this Schedule A.

AMENDMENT AGREEMENT TO
RUSSIAN RIDER TO THE GLOBAL
CUSTODY AGREEMENT

AMENDMENT to Attachment B of Global Custody Agreement dated January 3, 1994, as amended July 23, 1997, is hereby further amended as of September 3, 1997.

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Amend Attachment B to consist of the following funds when pertaining to the Russian Rider dated July 17, 1997:

Institutional International Funds, Inc., on behalf of:
Foreign Equity Fund

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund

T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock Portfolio

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK	EACH OF THE PARTIES LISTED ABOVE
By:/s/Helen C. Bairsto Helen C. Bairsto Vice President	By:/s/Henry H. Hopkins Henry H. Hopkins Vice President

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, July 23, 1997, September 3, 1997, and October 29, 1997 (the "Custody Agreement"), by and between each of the Entities listed in Schedule A, as amended thereto, severally and not jointly (each such entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., which contracts have been assumed by operation of law by THE CHASE MANHATTAN BANK (the "Bank") is hereby further amended, as of December 15, 1998 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS , the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE , the parties hereto agree as follows:

1. Amendment. Sections 1 and 3 of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.

2. Agreement. The Customer agrees to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable thereunder as a "Customer" as defined in the Custody Agreement.

3. Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

4. Governing Law. This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK

/s/Joseph M. Rondinelli
By: _____________________________________
Joseph M. Rondinelli
Vice President

EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO, SEVERALLY
AND NOT JOINTLY

/s/Henry H. Hopkins
By: _____________________________________
Henry H. Hopkins
Vice President

Attachment A

LIST OF CUSTOMERS

Change the name of the following Fund:

T. Rowe Price Global Government Bond Fund

Effective May 1, 1998, the fund name changed to:
T. Rowe Price Global Bond Fund

Add the following Fund:

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price International Growth & Income Fund

Add the following Funds to the Russian Rider:

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price International Growth & Income Fund

RPFI International Partners, L.P.

Schedule A
Page 1 of 3

LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK
DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund	Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Equity Income Fund	Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of: T. Rowe Price Equity Income Portfolio T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price New America Growth Portfolio T. Rowe Price Personal Strategy Balanced Portfolio	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc.	Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of: Mid-Cap Equity Growth Fund	Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of: Foreign Equity Fund	Russian Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Stock Fund T. Rowe Price European Stock Fund T. Rowe Price Global Stock Fund T. Rowe Price International Discovery Fund T. Rowe Price International Growth & Income Fund T. Rowe Price International Stock Fund T. Rowe Price Japan Fund T. Rowe Price Latin America Fund T. Rowe Price New Asia Fund	Russian Rider Russian Rider Russian Rider Russian Rider Russian Rider Russian Rider Russian Rider Russian Rider Russian Rider
T. Rowe Price International Series, Inc. on behalf of: T. Rowe Price International Stock Portfolio	Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New America Growth Fund	Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Value Fund, Inc.	Global Proxy Service Rider

Schedule A
Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Income Funds

T. Rowe Price Corporate Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of: T. Rowe Price Limited-Term Bond Portfolio	Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Bond Fund T. Rowe Price Global Bond Fund T. Rowe Price International Bond Fund	Russian Rider Russian Rider Russian Rider
T. Rowe Price New Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of: T. Rowe Price Personal Strategy Balanced Fund T. Rowe Price Personal Strategy Growth Fund T. Rowe Price Personal Strategy Income Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Short-Term U.S. Government Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Summit Funds, Inc. on behalf of: T. Rowe Price Summit Limited-Term Bond Fund	Global Proxy Service Rider
T. Rowe Price Tax-Efficient Balanced Fund, Inc.	Global Proxy Service Rider

Schedule A
Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust

European Discovery Trust

Foreign Discovery Trust

Foreign Discovery Trust - Augment

Japan Discovery Trust

Latin America Discovery Trust

Pacific Discovery Trust

New York City International Common Trust Fund

Global Proxy Service Rider

III. OTHER

RPFI International Partners, L.P.

Russian Rider

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, July 23, 1997, September 3, 1997, October 29, 1997 and December 15, 1998 (the "Custody Agreement") by and between each of the Entities listed in Schedule A, as amended thereto, severally and not jointly (each such entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., whose contracts have been assumed by THE CHASE MANHATTAN BANK (the "Bank") is hereby further amended, as of October 6, 1999 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Sched ule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.

2. Agreement. The Customer and Bank agree to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable and responsible thereunder as a "Customer" and "Bank," respectively, as defined in the Custody Agreement.

4. Governing Law: This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK

/s/Joseph M. Rondinelli
By: ____________________________________
Joseph M. Rondinelli
Vice President

EACH OF THE CUSTOMERS LISTED IN

ATTACHMENT A HERETO, SEVERALLY

AND NOT JOINTLY

/s/Henry H. Hopkins
By: ____________________________________
Henry H. Hopkins
Vice President

Attachment A

Page 1 of 2

LIST OF CUSTOMERS

Change the name of the following Fund :

T. Rowe Price Tax-Efficient Balanced Fund, Inc.

Effective May 27, 1999, the fund name changed to:

T. Rowe Price Tax-Efficient Funds, Inc., on behalf of
T. Rowe Price Tax-Efficient Balanced Fund

Add the following Fund:

T. Rowe Price Tax-Efficient Funds, Inc., on behalf of:
T. Rowe Price Tax-Efficient Growth Fund

Add the following Trusts :

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund, on behalf of the Underlying Trusts:

Foreign Discovery Trust - B

International Small-Cap Trust

Delete the following Trust :

New York City International Common Trust Fund

Add the following Funds/Trusts/Limited Partnerships to the Global Proxy Service Rider :

T. Rowe Price Equity Series, Inc.
T. Rowe Price Equity Income Portfolio

T. Rowe Price Tax-Efficient Funds, Inc., on behalf of
T. Rowe Price Tax-Efficient Growth Fund

Institutional International Funds, Inc., on behalf of
Foreign Equity Fund

Attachment A

Page 2 of 2

T. Rowe Price International Funds, Inc., on behalf of
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price European Stock Fund
T. Rowe Price Global Bond Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund

T. Rowe Price International Series, Inc., on behalf of
T. Rowe Price International Stock Portfolio

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust

European Discovery Trust

Foreign Discovery Trust

Foreign Discovery Trust - Augment

Foreign Discovery Trust - B

International Small-Cap Trust

Japan Discovery Trust

Latin America Discovery Trust

Pacific Discovery Trust

RPFI International Partners, L.P.

Schedule A

Page 1 of 3

LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK
DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund	Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Equity Income Fund	Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of: T. Rowe Price Equity Income Portfolio T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price New America Growth Portfolio T. Rowe Price Personal Strategy Balanced Portfolio	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc.	Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of: Mid-Cap Equity Growth Fund	Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of: Foreign Equity Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Stock Fund T. Rowe Price European Stock Fund T. Rowe Price Global Stock Fund T. Rowe Price International Discovery Fund T. Rowe Price International Growth & Income Fund T. Rowe Price International Stock Fund T. Rowe Price Japan Fund T. Rowe Price Latin America Fund T. Rowe Price New Asia Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Series, Inc. on behalf of: T. Rowe Price International Stock Portfolio	Global Proxy Service Rider and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New America Growth Fund	Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Value Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Income Funds

T. Rowe Price Corporate Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of: T. Rowe Price Limited-Term Bond Portfolio	Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Bond Fund T. Rowe Price Global Bond Fund T. Rowe Price International Bond Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price New Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of: T. Rowe Price Personal Strategy Balanced Fund T. Rowe Price Personal Strategy Growth Fund T. Rowe Price Personal Strategy Income Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Short-Term U.S. Government Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Summit Funds, Inc. on behalf of: T. Rowe Price Summit Limited-Term Bond Fund	Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of: T. Rowe Price Tax-Efficient Balanced Fund T. Rowe Price Tax-Efficient Growth Fund	Global Proxy Service Rider Global Proxy Service Rider

Schedule A

Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust	Global Proxy Service Rider
European Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust - Augment	Global Proxy Service Rider
Foreign Discovery Trust - B	Global Proxy Service Rider
International Small-Cap Trust	Global Proxy Service Rider
Japan Discovery Trust	Global Proxy Service Rider
Latin America Discovery Trust	Global Proxy Service Rider
Pacific Discovery Trust	Global Proxy Service Rider

III. OTHER

RPFI International Partners, L.P.

Global Proxy Service and Russian Rider

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, July 23, 1997, September 3, 1997, October 29, 1997, December 15, 1998 and October 6, 1999 (the "Custody Agreement") by and between each of the Entities listed in Schedule A, as amended thereto, sever ally and not jointly (each such entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., whose contracts have been assumed by THE CHASE MANHATTAN BANK (the "Bank") is hereby further amended, as of February 9, 2000 (the "Amendment Agree ment"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

4. Governing Law: This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK

/s/Joseph M. Rondinelli
By: ____________________________________
Joseph M. Rondinelli
Vice President

EACH OF THE CUSTOMERS LISTED IN

ATTACHMENT A HERETO, SEVERALLY

AND NOT JOINTLY

/s/Henry H. Hopkins
By: ____________________________________
Henry H. Hopkins
Vice President

Attachment A

Page 1 of 1

LIST OF CUSTOMERS

Add the following Funds:

Institutional Equity Funds, Inc., on behalf of:
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund

Add the following Funds to the Global Proxy Service Rider :

Institutional Equity Funds, Inc., on behalf of
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund

Schedule A

Page 1 of 3

LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK
DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund	Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Equity Income Fund	Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of: T. Rowe Price Equity Income Portfolio T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price New America Growth Portfolio T. Rowe Price Personal Strategy Balanced Portfolio	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc.	Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of: Institutional Large-Cap Value Fund Institutional Small-Cap Stock Fund Mid-Cap Equity Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of: Foreign Equity Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Stock Fund T. Rowe Price European Stock Fund T. Rowe Price Global Stock Fund T. Rowe Price International Discovery Fund T. Rowe Price International Growth & Income Fund T. Rowe Price International Stock Fund T. Rowe Price Japan Fund T. Rowe Price Latin America Fund T. Rowe Price New Asia Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Series, Inc. on behalf of: T. Rowe Price International Stock Portfolio	Global Proxy Service Rider and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New America Growth Fund	Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Value Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Income Funds

T. Rowe Price Corporate Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of: T. Rowe Price Limited-Term Bond Portfolio	Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Bond Fund T. Rowe Price Global Bond Fund T. Rowe Price International Bond Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price New Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of: T. Rowe Price Personal Strategy Balanced Fund T. Rowe Price Personal Strategy Growth Fund T. Rowe Price Personal Strategy Income Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Short-Term U.S. Government Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Summit Funds, Inc. on behalf of: T. Rowe Price Summit Limited-Term Bond Fund	Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of: T. Rowe Price Tax-Efficient Balanced Fund T. Rowe Price Tax-Efficient Growth Fund	Global Proxy Service Rider Global Proxy Service Rider

Schedule A

Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust	Global Proxy Service Rider
European Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust - Augment	Global Proxy Service Rider
Foreign Discovery Trust - B	Global Proxy Service Rider
International Small-Cap Trust	Global Proxy Service Rider
Japan Discovery Trust	Global Proxy Service Rider
Latin America Discovery Trust	Global Proxy Service Rider
Pacific Discovery Trust	Global Proxy Service Rider

III. OTHER

RPFI International Partners, L.P.

Global Proxy Service and Russian Rider

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, July 23, 1997, September 3, 1997, October 29, 1997, December 15, 1998, October 6, 1999 and February 9, 2000 (the "Custody Agreement") by and between each of the Entities listed in Schedule A, as amended thereto, severally and not jointly (each such entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., whose contracts have been assumed by THE CHASE MANHATTAN BANK (the "Bank") is hereby further amended, as of April 19, 2000 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.

4. Governing Law: This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK

/s/Joseph M. Rondinelli
By: ____________________________________
Joseph M. Rondinelli
Vice President

EACH OF THE CUSTOMERS LISTED IN

ATTACHMENT A HERETO, SEVERALLY

AND NOT JOINTLY

/s/Henry H. Hopkins
By: ____________________________________
Henry H. Hopkins
Vice President

Attachment A

Page 1 of 1

LIST OF CUSTOMERS

Add the following Fund:

T. Rowe Price International Funds, Inc., on behalf of:
T. Rowe Price Emerging Europe & Mediterranean Fund

Add the following Fund to the Global Proxy Service and Russian Rider :

T. Rowe Price International Funds, Inc., on behalf of:
T. Rowe Price Emerging Europe & Mediterranean Fund

Schedule A

Page 1 of 3

LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO

GLOBAL CUSTODY AGREEMENT WITH

THE CHASE MANHATTAN BANK

DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund	Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Equity Income Fund	Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of: T. Rowe Price Equity Income Portfolio T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price New America Growth Portfolio T. Rowe Price Personal Strategy Balanced Portfolio	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc.	Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of: Institutional Large-Cap Value Fund Institutional Small-Cap Stock Fund Mid-Cap Equity Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of: Foreign Equity Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Europe & Mediterranean Fund T. Rowe Price Emerging Markets Stock Fund T. Rowe Price European Stock Fund T. Rowe Price Global Stock Fund T. Rowe Price International Discovery Fund T. Rowe Price International Growth & Income Fund T. Rowe Price International Stock Fund T. Rowe Price Japan Fund T. Rowe Price Latin America Fund T. Rowe Price New Asia Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Series, Inc. on behalf of: T. Rowe Price International Stock Portfolio	Global Proxy Service Rider and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New America Growth Fund	Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Value Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Income Funds

T. Rowe Price Corporate Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of: T. Rowe Price Limited-Term Bond Portfolio	Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Bond Fund T. Rowe Price Global Bond Fund T. Rowe Price International Bond Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price New Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of: T. Rowe Price Personal Strategy Balanced Fund T. Rowe Price Personal Strategy Growth Fund T. Rowe Price Personal Strategy Income Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Short-Term U.S. Government Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Summit Funds, Inc. on behalf of: T. Rowe Price Summit Limited-Term Bond Fund	Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of: T. Rowe Price Tax-Efficient Balanced Fund T. Rowe Price Tax-Efficient Growth Fund	Global Proxy Service Rider Global Proxy Service Rider

Schedule A

Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust	Global Proxy Service Rider
European Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust - Augment	Global Proxy Service Rider
Foreign Discovery Trust - B	Global Proxy Service Rider
International Small-Cap Trust	Global Proxy Service Rider
Japan Discovery Trust	Global Proxy Service Rider
Latin America Discovery Trust	Global Proxy Service Rider
Pacific Discovery Trust	Global Proxy Service Rider

III. OTHER

RPFI International Partners, L.P.

Global Proxy Service and Russian Rider

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, July 23, 1997, September 3, 1997, October 29, 1997, December 15, 1998, October 6, 1999, February 9, 2000 and April 19, 2000 (the "Custody Agreement") by and between each of the Entities listed in Schedule A, as amended thereto, severally and not jointly (each such entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., whose contracts have been assumed by THE CHASE MANHATTAN BANK (the "Bank") is hereby further amended, as of July 18, 2000 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.

4. Governing Law: This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK

/s/Joseph M. Rondinelli

By: ____________________________________

Joseph M. Rondinelli

Vice President

EACH OF THE CUSTOMERS LISTED IN

ATTACHMENT A HERETO, SEVERALLY

AND NOT JOINTLY

/s/Henry H. Hopkins

By: ____________________________________

Henry H. Hopkins

Vice President

Attachment A

Page 1 of 1

LIST OF CUSTOMERS

Add the following Funds:

Equity Funds

T. Rowe Price Developing Technologies Fund, Inc.

T. Rowe Price Global Technology Fund, Inc.

Income Fund

T. Rowe Price U.S. Bond Index Fund, Inc.

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

India Trust

Taiwan Trust

Add the following Funds to the Global Proxy Service Rider :

Equity Funds

T. Rowe Price Developing Technologies Fund, Inc.

T. Rowe Price Global Technology Fund, Inc.

Income Fund

T. Rowe Price U.S. Bond Index Fund, Inc.

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

India Trust

Taiwan Trust

Schedule A

Page 1 of 3

LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO

GLOBAL CUSTODY AGREEMENT WITH

THE CHASE MANHATTAN BANK

DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund	Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Developing Technologies Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Equity Income Fund	Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of: T. Rowe Price Equity Income Portfolio T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price New America Growth Portfolio T. Rowe Price Personal Strategy Balanced Portfolio	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Global Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc.	Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of: Institutional Large-Cap Value Fund Institutional Small-Cap Stock Fund Mid-Cap Equity Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of: Foreign Equity Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Europe & Mediterranean Fund T. Rowe Price Emerging Markets Stock Fund T. Rowe Price European Stock Fund T. Rowe Price Global Stock Fund T. Rowe Price International Discovery Fund T. Rowe Price International Growth & Income Fund T. Rowe Price International Stock Fund T. Rowe Price Japan Fund T. Rowe Price Latin America Fund T. Rowe Price New Asia Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Series, Inc. on behalf of: T. Rowe Price International Stock Portfolio	Global Proxy Service Rider and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New America Growth Fund	Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Value Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Income Funds

T. Rowe Price Corporate Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of: T. Rowe Price Limited-Term Bond Portfolio	Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Bond Fund T. Rowe Price Global Bond Fund T. Rowe Price International Bond Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price New Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of: T. Rowe Price Personal Strategy Balanced Fund T. Rowe Price Personal Strategy Growth Fund T. Rowe Price Personal Strategy Income Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Short-Term U.S. Government Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Summit Funds, Inc. on behalf of: T. Rowe Price Summit Limited-Term Bond Fund	Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of: T. Rowe Price Tax-Efficient Balanced Fund T. Rowe Price Tax-Efficient Growth Fund	Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust	Global Proxy Service Rider
European Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust - Augment	Global Proxy Service Rider
Foreign Discovery Trust - B	Global Proxy Service Rider
India Trust	Global Proxy Service Rider
International Small-Cap Trust	Global Proxy Service Rider
Japan Discovery Trust	Global Proxy Service Rider
Latin America Discovery Trust	Global Proxy Service Rider
Pacific Discovery Trust	Global Proxy Service Rider
Taiwan Trust	Global Proxy Service Rider

III. OTHER

RPFI International Partners, L.P.

Global Proxy Service and Russian Rider

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, July 23, 1997, September 3, 1997, October 29, 1997, December 15, 1998, October 6, 1999, February 9, 2000, April 19, 2000 and July 18, 2000 (the "Custody Agreement") by and between each of the Entities listed in Schedule A, as amended thereto, severally and not jointly (each such entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., whose contracts have been assumed by THE CHASE MANHATTAN BANK (the "Bank") is hereby further amended, as of October 25, 2000 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.

4. Governing Law: This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK

/s/Joseph M. Rondinelli

By: ____________________________________

Joseph M. Rondinelli

Vice President

EACH OF THE CUSTOMERS LISTED IN

ATTACHMENT A HERETO, SEVERALLY

AND NOT JOINTLY

/s/Henry H. Hopkins

By: ____________________________________

Henry H. Hopkins

Vice President

Attachment A

Page 1 of 1

LIST OF CUSTOMERS

Add the following Funds:

Equity Funds

T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Blue Chip Growth Portfolio
T. Rowe Price Health Sciences Portfolio

T. Rowe Price International Index Fund, Inc. on behalf of:
T. Rowe Price International Equity Index Fund

Income Fund

T. Rowe Price Tax-Efficient Funds, Inc., on behalf of:
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

Delete the following Funds/Trusts :

Income Funds:

T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Bond Fund

T. Rowe Price Short-Term U.S. Government Fund, Inc.

T. Rowe Price Summit Funds, Inc., on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund

Common Trust Funds :

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

European Discovery Trust

Foreign Discovery Trust-Augment

Latin America Discovery Trust

Pacific Discovery Trust

Other :

RPFI International Partners, L.P.

Add the following Funds to the Global Proxy Service Rider :

Equity Funds

T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Blue Chip Growth Portfolio
T. Rowe Price Health Sciences Portfolio

Income Fund

T. Rowe Price Tax-Efficient Funds, Inc., on behalf of:
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

Delete the following Funds/Trusts from the Global Proxy Service Rider :

Income Funds:

T. Rowe Price Short-Term U.S. Government Fund, Inc.

T. Rowe Price Summit Funds, Inc., on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund

Common Trust Funds :

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

European Discovery Trust

Foreign Discovery Trust-Augment

Latin America Discovery Trust

Pacific Discovery Trust

Add the following Fund to the Global Proxy Service and Russian Rider

Equity Fund

T. Rowe Price International Index Fund, Inc. on behalf of:
T. Rowe Price International Equity Index Fund

Delete the following Fund/Other from the Global Proxy Service and Russian Rider:

Income Funds :

T. Rowe Price International Funds, Inc., on behalf of:
T. Rowe Price Global Bond Fund

Other :

RPFI International Partners, L.P.

Schedule A

Page 1 of 3

LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO

GLOBAL CUSTODY AGREEMENT WITH

THE CHASE MANHATTAN BANK

DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund	Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Developing Technologies Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Equity Income Fund	Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of: T. Rowe Price Blue Chip Growth Portfolio T. Rowe Price Equity Income Portfolio T. Rowe Price Health Sciences Portfolio T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price New America Growth Portfolio T. Rowe Price Personal Strategy Balanced Portfolio	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Global Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc.	Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of: Institutional Large-Cap Value Fund Institutional Small-Cap Stock Fund Mid-Cap Equity Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of: Foreign Equity Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Europe & Mediterranean Fund T. Rowe Price Emerging Markets Stock Fund T. Rowe Price European Stock Fund T. Rowe Price Global Stock Fund T. Rowe Price International Discovery Fund T. Rowe Price International Growth & Income Fund T. Rowe Price International Stock Fund T. Rowe Price Japan Fund T. Rowe Price Latin America Fund T. Rowe Price New Asia Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Index Fund, Inc. on behalf of: T. Rowe Price International Equity Index Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Series, Inc. on behalf of: T. Rowe Price International Stock Portfolio	Global Proxy Service Rider and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New America Growth Fund	Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Value Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Income Funds

T. Rowe Price Corporate Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of: T. Rowe Price Limited-Term Bond Portfolio	Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Bond Fund T. Rowe Price International Bond Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price New Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of: T. Rowe Price Personal Strategy Balanced Fund T. Rowe Price Personal Strategy Growth Fund T. Rowe Price Personal Strategy Income Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of: T. Rowe Price Tax-Efficient Balanced Fund T. Rowe Price Tax-Efficient Growth Fund T. Rowe Price Tax-Efficient Multi-Cap Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust	Global Proxy Service Rider
Foreign Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust - B	Global Proxy Service Rider
India Trust	Global Proxy Service Rider
International Small-Cap Trust	Global Proxy Service Rider
Japan Discovery Trust	Global Proxy Service Rider
Taiwan Trust	Global Proxy Service Rider

AMENDMENT, dated April 25, 2001 to the January 3, 1994 custody agreement ("Agreement"), between each of the T. Rowe Price Funds, severally and not jointly, set forth on Appendix 2 ("Customer"), having a place of business at 100 East Pratt Street, Baltimore, Maryland 21202, and The Chase Manhattan Bank ("Bank"), having a place of business at 270 Park Ave., New York, N.Y. 10017- 2070.

It is hereby agreed as follows:

Section 1. Except as modified hereby, the Agreement is confirmed in all respects. Capitalized terms used herein without definition shall have the meanings ascribed to them in the Agreement.

Section 2. The Agreement is amended by deleting the investment company rider thereto and inserting, in lieu thereof, the following investment company rider:

1. "Add new Section 15 to the Agreement as follows:

15. Compliance with Securities and Exchange Commission rule 17f-5 ("rule 17f-5").

(a) Customer`s board of directors (or equivalent body) (hereinafter "Board") hereby delegates to Bank, and Bank hereby accepts the delegation to it of, the obligations set forth in rule SEC rule 17f-5(c)(1)-(3) to perform as Customer`s "Foreign Custody Manager" (as that term is defined in rule 17f-5(a)(3)), including for the purposes of (i) selecting Eligible Foreign Custodians (as that term is defined in rule 17f-5(a)(1), as the same may be amended from time to time, or are otherwise deemed an Eligible Foreign Custodian pursuant to an SEC exemptive order, rule other appropriate SEC action) to hold Customer`s Foreign Assets, (ii) evaluating the contractual arrangements with such Eligible Foreign Custodians (as set forth in rule 17f-5(c)(2)); and (iii) monitoring such foreign custody arrangements (as set forth in rule 17f-5(c)(3)).

(b) In connection with the foregoing, Bank shall:

(i) provide written reports notifying Customer`s Board of the placement and withdrawal of Foreign Assets with particular Eligible Foreign Custodians and of any material change in the arrangements with such Eligible Foreign Custodians, with such reports to be provided to Customer`s Board at such times as the Board deems reasonable and appropriate based on the circumstances of Customer`s foreign custody arrangements but until further notice from Customer requesting a different schedule, such

reports shall be provided not less than quarterly in summary form, with a more detailed report annually.

(ii) exercise such reasonable care, prudence and diligence in performing as Customer`s Foreign Custody Manager as a person having responsibility for the safekeeping of Foreign Assets would exercise;

(iii) in selecting each Eligible Foreign Custodian, determine that Foreign Assets placed and maintained in the safekeeping of such Eligible Foreign Custodian shall be subject to reasonable care, based on the standards applicable to custodians in the relevant market, after having considered all factors relevant to the safekeeping of such Foreign Assets, including, without limitation, those factors set forth in rule 17f-5(c)(1)(i)-(iv);

(iv) determine that the written contract with the Eligible Foreign Custodian will (a) satisfy the requirements of rule 17f- 5(c)(2), and (b) provide reasonable care for Foreign Assets based on the standards specified in 17-5(c)(1); and

(v) establish a system to monitor (i) the continued appropriateness of maintaining Foreign Assets with particular Eligible Foreign Custodians and (ii) the performance of the contract governing the custody arrangements; it being understood, however, that in the event that Bank shall have determined that an existing Eligible Foreign Custodian in a given country would no longer meet the requirements of rule 17f-5(c), Bank shall determine whether any other Eligible Foreign Custodian in that country would meet such requirements. In the event that another Eligible Foreign Custodian does so meet the requirements, Bank shall withdraw the Foreign Assets from the custody of the incumbent Eligible Foreign Custodian and deposit them with the other Eligible Foreign Custodian as soon as reasonably practicable, and promptly advise Customer of such withdrawal and deposit. If Bank shall determine that no other Eligible Foreign Custodian in that country would meet the requirements of rule 17f- 5(c), Bank shall so advise Customer and shall then act in accordance with the Instructions of Customer with respect to the disposition of the affected Foreign Assets.

Subject to (b)(i)-(v) above, Bank is hereby authorized to place and maintain Foreign Assets on behalf of Customer with Eligible Foreign Custodians pursuant to a written contract deemed appropriate by Bank.

(c) Except as expressly provided herein and in Section 16 hereof, Customer shall be solely responsible to assure that the maintenance of Foreign Assets hereunder complies with the rules,

regulations, interpretations and exemptive orders promulgated by or under the authority of the SEC.

(d) Bank represents to Customer that it is a U.S. Bank as defined in rule 17f-5(a)(7). Customer represents to Bank that: (1) the Assets being placed and maintained in Bank's custody are subject to the Investment Company Act of 1940, as amended (the "1940 Act") as the same may be amended from time to time; (2) its Board (or other governing body) has determined that it is reasonable to rely on Bank to perform as Customer`s Foreign Custody Manager; and (3) its Board (or other governing body) or its investment adviser shall have determined that Customer may maintain Foreign Assets in each country in which Customer`s Foreign Assets shall be held hereunder and determined to accept the risks arising therefrom (including, but not limited to, a country`s financial infrastructure, prevailing custody and settlement practices, laws applicable to the safekeeping and recovery of Foreign Assets held in custody, and the likelihood of nationalization, currency controls and the like) (collectively ("Country Risk")). Nothing contained herein shall require Bank to make any selection on behalf of Customer that would entail consideration of Country Risk and, except as may be provided in (e) below, to engage in any monitoring of Country Risk.

(e) Bank shall provide to Customer such information relating to Country Risk as is specified in Appendix 1-A hereto. Customer hereby acknowledges that: (i) such information is solely designed to inform Customer of market conditions and procedures and is not intended as a recommendation to invest or not invest in particular markets; and (ii) Bank has gathered the information from sources it considers reliable, but that Bank shall have no responsibility for inaccuracies or incomplete information.

2. Add the following after the first sentence of Section 3 of the Agreement:

At the request of Customer, Bank may, but need not, add to Schedule A an Eligible Foreign Custodian where Bank has not acted as Foreign Custody Manager with respect to the selection thereof. Bank shall notify Customer in the event that it elects to add any such entity.

3. Add the following language to the end of Section 3 of the Agreement:

The term Subcustodian as used herein shall mean the following:

(a) a U.S. bank as defined in rule 17f 5(a)(7); and

(b) an "Eligible Foreign Custodian," which, as defined in rule 17f-5(a)(1) and (5), shall mean (i) a banking institution or trust company, incorporated or organized under the laws of a country other than the United States, that is regulated as such by that country's government or an agency thereof, and (ii) a majority-owned direct or indirect subsidiary of a U.S. Bank or bank holding company which subsidiary is incorporated or organized under the laws of a country other than the United States. In addition, an Eligible Foreign Custodian shall also mean any other entity that shall have been so qualified by exemptive order, rule or other appropriate action of the SEC.

(c) For purposes of provisions of the Agreement imposing liability on Bank, the term Subcustodian shall not include any Eligible Foreign Custodian as to which Bank has not acted as Foreign Custody Manager or, for purposes of clarity, any securities depository."

4. Add the following language to the end of the first sentence of Section 4(d) of the Agreement: "or, in the case of cash deposits, except for liens or rights in favor of creditors of the Subcustodian arising under bankruptcy, insolvency or similar laws."

5. Add a new Section 16 to the Agreement as follows:

16. Compliance with Securities and Exchange Commission rule 17f-7 ("rule 17f-7").

(a) Bank shall, for consideration by Customer or Customer`s investment adviser, provide an analysis in accordance with rule 17f-7(a)(1)(i)(A) of the custody risks associated with maintaining Customer`s Foreign Assets with each Eligible Securities Depository used by Bank as of the date hereof (or, in the case of an Eligible Securities Depository not used by Bank as of the date hereof, prior to the initial placement of Customer`s Foreign Assets at such Depository) and at which any Foreign Assets of Customer are held or are expected to be held. The foregoing analysis will be provided to Customer at Bank`s Website. In connection with the foregoing, Customer shall notify Bank of any Eligible Securities Depositories at which it does not choose to have its Foreign Assets held. Bank shall monitor the custody risks associated with maintaining Customer`s Foreign Assets at each such Eligible Securities Depository on a continuing basis and shall promptly notify (which may be electronic) Customer or its adviser of any material changes in such risks in accordance with rule 17f-7(a)(1)(i)(B).

(b) Bank shall exercise reasonable care, prudence and diligence in performing the requirements set forth in Section 16(a) above. The risk analysis of an Eligible Securities Depository provided under paragraph 16(a) shall take account of the specific rules of a given depository and shall, to the extent reasonably practicable, generally consider: (1) the Depository`s expertise and market reputation; (2) the quality of the Depository`s services; (3) the Depository`s financial strength; (4) any insurance or indemnification arrangements; (5) the extent and quality of regulation and independent examination of the Depository; (6) the Depository`s standing in published ratings; (7) the Depository`s internal controls and other procedures for safeguarding assets; and (8) any related legal protections.

(c) Based on the information available to it in the exercise of diligence, Bank shall determine the eligibility under rule 17f-7 of each depository before including it on Appendix 1-B hereto and shall promptly advise Customer if any Eligible Securities Depository ceases to be eligible. (Eligible Securities Depositories used by Bank as of the date hereof are set forth in Appendix 1-B hereto, and as the same may be amended on notice to Customer from time to time.)

(d) Bank need not commence performing any of the duties set forth in this Section 16 prior to March 31, 2001, but Bank shall advise Customer if it is prepared to commence such duties prior to such date as to particular depositories.

7. Add the following language to the end of Section 3 of the Agreement:

The term "securities depository" as used herein when referring to a securities depository located outside the U.S. shall mean an "Eligible Securities Depository" which, in turn, shall have the same meaning as in rule 17f-7(b)(1)(i)-(vi) as the same may be amended from time to time, or that has otherwise been made exempt by an SEC exemptive order, rule or other appropriate SEC action, except that prior to the compliance date with rule 17f-7 for a particular securities depository the term "securities depositories" shall be as defined in (a)(1)(ii)-(iii) of the 1997 amendments to rule 17f-5. The term "securities depository" as used herein when referring to a securities depository located in the U.S. shall mean a "securities depository" as defined in SEC rule 17f-4(a).

*********************

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.

[Each of the severally and not jointly, set forth on Appendix 2 [Customer]	THE CHASE MANHATTAN BANK
/s/Henry H. Hopkins By:________________________ Name: Henry H. Hopkins Title:Vice President Date: 4/26/01	/s/Paul D. Hopkins By:_____________________ Name: Paul D. Hopkins Title: Vice President Date: 5/15/01

Appendix 1-A

Information Regarding Country Risk

1. To aid Customer in its determinations regarding Country Risk, Bank shall furnish annually and upon the initial placing of Foreign Assets into a country the following information (check items applicable):

A Opinions of local counsel concerning:

___ i. Whether applicable foreign law would restrict the access afforded Customer`s independent public accountants to books and records kept by an Eligible Foreign Custodian located in that country.

___ ii. Whether applicable foreign law would restrict the Customer's ability to recover its assets in the event of the bankruptcy of an Eligible Foreign Custodian located in that country.

___ iii. Whether applicable foreign law would restrict the Customer's ability to recover assets that are lost while under the control of an Eligible Foreign Custodian located in the country.

B. Written information concerning:

___ i. The likelihood of expropriation, nationalization, freezes, or confiscation of Customer's assets.

___ ii. Whether difficulties in converting Customer's cash and cash equivalents to U.S. dollars are reasonably foreseeable.

C. A market report with respect to the following topics:

(i) securities regulatory environment, (ii) foreign ownership restrictions, (iii) foreign exchange, (iv) securities settlement and registration, (v) taxation, (vi) market settlement risk, (vii) Eligible Securities Depositories (including Depository evaluation), if any.

2. Bank shall furnish the following additional information:

Market flashes, including with respect to changes in the information in market reports.

Appendix 1-B

ELIGIBLE SECURITIES DEPOSITORIES

APPENDIX 2

T. ROWE PRICE INVESTMENT COMPANIES

T. Rowe Price Balanced Fund, Inc.

T. Rowe Price Blue Chip Growth Fund, Inc.

T. Rowe Price Capital Appreciation Fund

T. Rowe Price Capital Opportunity Fund, Inc.

T. Rowe Price Developing Technologies Fund, Inc.

T. Rowe Price Diversified Small-Cap Growth Fund, Inc.

T. Rowe Price Dividend Growth Fund, Inc.

T. Rowe Price Equity Income Fund

T. Rowe Price Equity Series, Inc.
T. Rowe Price Equity Income Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Blue Chip Growth Portfolio
T. Rowe Price Health Sciences Portfolio

T. Rowe Price Financial Services Fund, Inc.

T. Rowe Price Global Technology Fund, Inc.

T. Rowe Price Growth & Income Fund, Inc.

T. Rowe Price Growth Stock Fund, Inc.

T. Rowe Price Health Sciences Fund, Inc.

Institutional International Funds, Inc.
Foreign Equity Fund

T. Rowe Price International Funds, Inc.
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price Emerging Europe & Mediterranean Fund
T. Rowe Price International Bond Fund
T. Rowe Price Emerging Markets Bond Fund

T. Rowe Price International Index Fund, Inc.
T. Rowe Price International Equity Index Fund

T. Rowe Price International Series, Inc.
T. Rowe Price International Stock Portfolio

T. Rowe Price Mid-Cap Growth Fund, Inc.

T. Rowe Price Mid-Cap Value Fund, Inc.

T. Rowe Price New America Growth Fund

T. Rowe Price New Era Fund, Inc.

T. Rowe Price New Horizons Fund, Inc.

T. Rowe Price Real Estate Fund, Inc.

T. Rowe Price Small-Cap Stock Fund, Inc.

T. Rowe Price Science & Technology Fund, Inc.

T. Rowe Price Small-Cap Value Fund, Inc.

T. Rowe Price Value Fund, Inc.

T. Rowe Price Media & Telecommunications Fund, Inc.

T. Rowe Price Corporate Income Fund, Inc.

T. Rowe Price Fixed Income Series, Inc.
T. Rowe Price Limited-Term Bond Portfolio

T. Rowe Price High Yield Fund, Inc.

T. Rowe Price New Income Fund, Inc.

T. Rowe Price Personal Strategy Funds, Inc.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. Rowe Price Short-Term Bond Fund, Inc.

T. Rowe Price Tax-Efficient Funds, Inc.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. Rowe Price U.S. Bond Index Fund, Inc.

Institutional Equity Funds, Inc. on behalf of:
Institutional Mid-Cap Equity Growth Fund
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, July 23, 1997, September 3, 1997, October 29, 1997, December 15, 1998, October 6, 1999, February 9, 2000, April 19, 2000, July 18, 2000, and October 25, 2000 (the "Custody Agreement") by and between each of the Entities listed in Schedule A, as amended thereto, severally and not jointly (each such entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., whose contracts have been assumed by THE CHASE MANHATTAN BANK (the "Bank") is hereby fur ther amended, as of July 24, 2001 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.

4. Governing Law: This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

THE CHASE MANHATTAN BANK

/s/Paul D. Hopkins

By: ____________________________________

Paul D. Hopkins

Vice President

EACH OF THE CUSTOMERS LISTED IN

ATTACHMENT A HERETO, SEVERALLY

AND NOT JOINTLY

/s/Henry H. Hopkins

By: ____________________________________

Henry H. Hopkins

Vice President

Attachment A

Page 1 of 1

LIST OF CUSTOMERS

Add the following Fund:

Equity Funds

Institutional Equity Funds, Inc. on behalf of:
Institutional Large-Cap Growth Fund

Add the following Fund to the Global Proxy Service Rider :

Equity Funds

Institutional Equity Funds, Inc. on behalf of:
Institutional Large-Cap Growth Fund

Schedule A

Page 1 of 3

LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO

GLOBAL CUSTODY AGREEMENT WITH

THE CHASE MANHATTAN BANK

DATED JANUARY 3, 1994, AS AMENDED

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund	Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Developing Technologies Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Equity Income Fund	Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of: T. Rowe Price Blue Chip Growth Portfolio T. Rowe Price Equity Income Portfolio T. Rowe Price Health Sciences Portfolio T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price New America Growth Portfolio T. Rowe Price Personal Strategy Balanced Portfolio	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Global Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc.	Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of: Institutional Large-Cap Growth Fund Institutional Large-Cap Value Fund Institutional Small-Cap Stock Fund Mid-Cap Equity Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of: Foreign Equity Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Europe & Mediterranean Fund T. Rowe Price Emerging Markets Stock Fund T. Rowe Price European Stock Fund T. Rowe Price Global Stock Fund T. Rowe Price International Discovery Fund T. Rowe Price International Growth & Income Fund T. Rowe Price International Stock Fund T. Rowe Price Japan Fund T. Rowe Price Latin America Fund T. Rowe Price New Asia Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Index Fund, Inc. on behalf of: T. Rowe Price International Equity Index Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Series, Inc. on behalf of: T. Rowe Price International Stock Portfolio	Global Proxy Service Rider and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New America Growth Fund	Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Value Fund, Inc.	Global Proxy Service Rider

Income Funds

T. Rowe Price Corporate Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of: T. Rowe Price Limited-Term Bond Portfolio	Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Bond Fund T. Rowe Price International Bond Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price New Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of: T. Rowe Price Personal Strategy Balanced Fund T. Rowe Price Personal Strategy Growth Fund T. Rowe Price Personal Strategy Income Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of: T. Rowe Price Tax-Efficient Balanced Fund T. Rowe Price Tax-Efficient Growth Fund T. Rowe Price Tax-Efficient Multi-Cap Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust	Global Proxy Service Rider
Foreign Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust - B	Global Proxy Service Rider
India Trust	Global Proxy Service Rider
International Small-Cap Trust	Global Proxy Service Rider
Japan Discovery Trust	Global Proxy Service Rider
Taiwan Trust	Global Proxy Service Rider

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, Novem ber 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, July 23, 1997, September 3, 1997, October 29, 1997, December 15, 1998, October 6, 1999, February 9, 2000, April 19, 2000, July 18, 2000, October 25, 2000 and July 24, 2001 (the "Custody Agreement") by and between each of the Entities listed in Schedule A, as amended thereto, severally and not jointly (each such entity referred to hereinafter as the "Customer") and JPMorgan Chase Bank, whose contracts have been assumed by JPMORGAN CHASE BANK (the "Bank") is hereby further amended, as of April 24, 2002 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.

2. Agreement. The Customer and Bank agree to be bound in all respects by all the terms and con ditions of the Custody Agreement and shall be fully liable and responsible thereunder as a "Customer" and "Bank," respectively, as defined in the Custody Agreement.

4. Governing Law: This Amendment Agreement shall be construed in accordance with and gov erned by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

JPMORGAN CHASE BANK

/s/Helen Bairsto

By: ____________________________________

Helen Bairsto

Vice President

EACH OF THE CUSTOMERS LISTED IN

ATTACHMENT A HERETO, SEVERALLY

AND NOT JOINTLY

/s/Henry H. Hopkins

By: ____________________________________

Henry H. Hopkins

Vice President

Attachment A

Page 1 of 1

LIST OF CUSTOMERS

Add the following Fund:

Income Funds

T. Rowe Price Institutional Income Funds, Inc. on behalf of:
T. Rowe Price Institutional High Yield Fund

Add the following Fund to the Global Proxy Service Rider :

Income Funds

T. Rowe Price Institutional Income Funds, Inc. on behalf of:
T. Rowe Price Institutional High Yield Fund

Schedule A

Page 1 of 3

LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO

GLOBAL CUSTODY AGREEMENT WITH

THE CHASE MANHATTAN BANK

DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund	Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Developing Technologies Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Equity Income Fund	Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of: T. Rowe Price Blue Chip Growth Portfolio T. Rowe Price Equity Income Portfolio T. Rowe Price Health Sciences Portfolio T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price New America Growth Portfolio T. Rowe Price Personal Strategy Balanced Portfolio	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Global Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc.	Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of: Institutional Large-Cap Growth Fund Institutional Large-Cap Value Fund Institutional Small-Cap Stock Fund Mid-Cap Equity Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of: Foreign Equity Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Europe & Mediterranean Fund T. Rowe Price Emerging Markets Stock Fund T. Rowe Price European Stock Fund T. Rowe Price Global Stock Fund T. Rowe Price International Discovery Fund T. Rowe Price International Growth & Income Fund T. Rowe Price International Stock Fund T. Rowe Price Japan Fund T. Rowe Price Latin America Fund T. Rowe Price New Asia Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Index Fund, Inc. on behalf of: T. Rowe Price International Equity Index Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Series, Inc. on behalf of: T. Rowe Price International Stock Portfolio	Global Proxy Service Rider and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New America Growth Fund	Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Value Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Income Funds

T. Rowe Price Corporate Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of: T. Rowe Price Limited-Term Bond Portfolio	Global Proxy Service Rider
T. Rowe Price Institutional Income Funds, Inc., on behalf of: T. Rowe Price Institutional High Yield Fund	Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Bond Fund T. Rowe Price International Bond Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price New Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of: T. Rowe Price Personal Strategy Balanced Fund T. Rowe Price Personal Strategy Growth Fund T. Rowe Price Personal Strategy Income Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of: T. Rowe Price Tax-Efficient Balanced Fund T. Rowe Price Tax-Efficient Growth Fund T. Rowe Price Tax-Efficient Multi-Cap Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust	Global Proxy Service Rider
Foreign Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust - B	Global Proxy Service Rider
India Trust	Global Proxy Service Rider
International Small-Cap Trust	Global Proxy Service Rider
Japan Discovery Trust	Global Proxy Service Rider
Taiwan Trust	Global Proxy Service Rider

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, Novem ber 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, July 23, 1997, September 3, 1997, October 29, 1997, December 15, 1998, October 6, 1999, February 9, 2000, April 19, 2000, July 18, 2000, October 25, 2000, July 24, 2001 and April 24, 2002 (the "Custody Agreement") by and between each of the Entities listed in Schedule A, as amended thereto, severally and not jointly (each such entity referred to hereinafter as the "Customer") and JPMorgan Chase Bank, whose contracts have been assumed by JPMORGAN CHASE BANK (the "Bank") is hereby further amended, as of July 24, 2002 (the "Amendment Agree ment"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.

4. Governing Law: This Amendment Agreement shall be construed in accordance with and gov erned by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

JPMORGAN CHASE BANK

/s/Helen Bairsto

By: ____________________________________

Helen Bairsto

Vice President

EACH OF THE CUSTOMERS LISTED IN

ATTACHMENT A HERETO, SEVERALLY

AND NOT JOINTLY

/s/Henry H. Hopkins

By: ____________________________________

Henry H. Hopkins

Vice President

Attachment A

Page 1 of 1

LIST OF CUSTOMERS

Add the following Funds:

Equity Funds

T. Rowe Price Institutional International Funds, Inc., on behalf of:
T. Rowe Price Institutional Emerging Markets Equity Fund

Income Funds

T. Rowe Price Inflation Protected Bond Fund, Inc.

Add the following Fund to the Global Proxy Service Rider :

Income Funds

T. Rowe Price Inflation Protected Bond Fund, Inc.

Add the following Fund to the Global Proxy Service and Russian Rider

Equity Funds

T. Rowe Price Institutional International Funds, Inc., on behalf of:
T. Rowe Price Institutional Emerging Markets Equity Fund

Schedule A

Page 1 of 3

LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO

GLOBAL CUSTODY AGREEMENT WITH

THE CHASE MANHATTAN BANK

DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund	Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Developing Technologies Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Equity Income Fund	Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of: T. Rowe Price Blue Chip Growth Portfolio T. Rowe Price Equity Income Portfolio T. Rowe Price Health Sciences Portfolio T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price New America Growth Portfolio T. Rowe Price Personal Strategy Balanced Portfolio	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Global Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Institutional Equity Funds, Inc. on behalf of: T. Rowe Price Institutional Large-Cap Growth Fund T. Rowe Price Institutional Large-Cap Value Fund T. Rowe Price Institutional Small-Cap Stock Fund T. Rowe Price Mid-Cap Equity Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Institutional International Funds, Inc. on behalf of: T. Rowe Price Institutional Emerging Markets Fund T. Rowe Price Institutional Foreign Equity Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Europe & Mediterranean Fund T. Rowe Price Emerging Markets Stock Fund T. Rowe Price European Stock Fund T. Rowe Price Global Stock Fund T. Rowe Price International Discovery Fund T. Rowe Price International Growth & Income Fund T. Rowe Price International Stock Fund T. Rowe Price Japan Fund T. Rowe Price Latin America Fund T. Rowe Price New Asia Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Index Fund, Inc. on behalf of: T. Rowe Price International Equity Index Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Series, Inc. on behalf of: T. Rowe Price International Stock Portfolio	Global Proxy Service Rider and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New America Growth Fund	Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Value Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Income Funds

T. Rowe Price Corporate Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of: T. Rowe Price Limited-Term Bond Portfolio	Global Proxy Service Rider
T. Rowe Price Inflation Protected Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Institutional Income Funds, Inc., on behalf of: T. Rowe Price Institutional High Yield Fund	Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Bond Fund T. Rowe Price International Bond Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price New Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of: T. Rowe Price Personal Strategy Balanced Fund T. Rowe Price Personal Strategy Growth Fund T. Rowe Price Personal Strategy Income Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of: T. Rowe Price Tax-Efficient Balanced Fund T. Rowe Price Tax-Efficient Growth Fund T. Rowe Price Tax-Efficient Multi-Cap Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust	Global Proxy Service Rider
Foreign Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust - B	Global Proxy Service Rider
India Trust	Global Proxy Service Rider
International Small-Cap Trust	Global Proxy Service Rider
Japan Discovery Trust	Global Proxy Service Rider
Taiwan Trust	Global Proxy Service Rider

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, Novem ber 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, July 23, 1997, September 3, 1997, October 29, 1997, December 15, 1998, October 6, 1999, February 9, 2000, April 19, 2000, July 18, 2000, October 25, 2000, July 24, 2001, April 24, 2002 and July 24, 2002 (the "Custody Agreement") by and between each of the Entities listed in Schedule A, as amended thereto, severally and not jointly (each such entity referred to hereinafter as the "Customer") and JPMorgan Chase Bank, whose contracts have been assumed by JPMORGAN CHASE BANK (the "Bank") is hereby further amended, as of July 23, 2003 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.

2. Agreement. The Customer and Bank agree to be bound in all respects by all the terms and condi tions of the Custody Agreement and shall be fully liable and responsible thereunder as a "Customer" and "Bank," respectively, as defined in the Custody Agreement.

4. Governing Law: This Amendment Agreement shall be construed in accordance with and gov erned by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

JPMORGAN CHASE BANK

By: /s/Andrew Lawson

Andrew Lawson

Vice President

EACH OF THE CUSTOMERS LISTED IN

ATTACHMENT A HERETO, SEVERALLY

AND NOT JOINTLY

By: /s/Henry H. Hopkins

Henry H. Hopkins

Vice President

Attachment A

Page 1 of 1

LIST OF CUSTOMERS

Add the following Fund:

Equity Funds:

T. Rowe Price Institutional Equity Funds, Inc., on behalf of:
T. Rowe Price Institutional Large-Cap Core Growth Fund

Add the following Fund to the Global Proxy Service Rider :

Equity Funds:

T. Rowe Price Institutional Equity Funds, Inc., on behalf of:
T. Rowe Price Institutional Large-Cap Core Growth Fund

Schedule A

Page 1 of 3

LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO

GLOBAL CUSTODY AGREEMENT WITH

THE CHASE MANHATTAN BANK

DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund	Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Developing Technologies Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Equity Income Fund	Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of: T. Rowe Price Blue Chip Growth Portfolio T. Rowe Price Equity Income Portfolio T. Rowe Price Health Sciences Portfolio T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price New America Growth Portfolio T. Rowe Price Personal Strategy Balanced Portfolio	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Global Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Institutional Equity Funds, Inc. on behalf of: T. Rowe Price Institutional Large-Cap Core Growth Fund T. Rowe Price Institutional Large-Cap Growth Fund T. Rowe Price Institutional Large-Cap Value Fund T. Rowe Price Institutional Small-Cap Stock Fund T. Rowe Price Mid-Cap Equity Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Institutional International Funds, Inc. on behalf of: T. Rowe Price Institutional Emerging Markets Fund T. Rowe Price Institutional Foreign Equity Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Europe & Mediterranean Fund T. Rowe Price Emerging Markets Stock Fund T. Rowe Price European Stock Fund T. Rowe Price Global Stock Fund T. Rowe Price International Discovery Fund T. Rowe Price International Growth & Income Fund T. Rowe Price International Stock Fund T. Rowe Price Japan Fund T. Rowe Price Latin America Fund T. Rowe Price New Asia Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Index Fund, Inc. on behalf of: T. Rowe Price International Equity Index Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Series, Inc. on behalf of: T. Rowe Price International Stock Portfolio	Global Proxy Service Rider and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New America Growth Fund	Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Value Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Income Funds

T. Rowe Price Corporate Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of: T. Rowe Price Limited-Term Bond Portfolio	Global Proxy Service Rider
T. Rowe Price Inflation Protected Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Institutional Income Funds, Inc., on behalf of: T. Rowe Price Institutional High Yield Fund	Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Bond Fund T. Rowe Price International Bond Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price New Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of: T. Rowe Price Personal Strategy Balanced Fund T. Rowe Price Personal Strategy Growth Fund T. Rowe Price Personal Strategy Income Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of: T. Rowe Price Tax-Efficient Balanced Fund T. Rowe Price Tax-Efficient Growth Fund T. Rowe Price Tax-Efficient Multi-Cap Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust	Global Proxy Service Rider
Foreign Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust - B	Global Proxy Service Rider
India Trust	Global Proxy Service Rider
International Small-Cap Trust	Global Proxy Service Rider
Japan Discovery Trust	Global Proxy Service Rider
Taiwan Trust	Global Proxy Service Rider

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, July 23, 1997, September 3, 1997, October 29, 1997, December 15, 1998, October 6, 1999, February 9, 2000, April 19, 2000, July 18, 2000, October 25, 2000, July 24, 2001, April 24, 2002, July 24, 2002 and July 23, 2003 (the "Custody Agreement") by and between each of the Entities listed in Schedule A, as amended thereto, severally and not jointly (each such entity referred to hereinafter as the "Customer") and JPMorgan Chase Bank, whose contracts have been assumed by JPMORGAN CHASE BANK (the "Bank") is hereby further amended, as of October 22, 2003 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.

4. Governing Law: This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

JPMORGAN CHASE BANK

/s/Andrew Lawson

By: ____________________________________

Andrew Lawson

Vice President

EACH OF THE CUSTOMERS LISTED IN

ATTACHMENT A HERETO, SEVERALLY

AND NOT JOINTLY

/s/Henry H. Hopkins

By: ____________________________________

Henry H. Hopkins

Vice President

Attachment A

Page 1 of 1

LIST OF CUSTOMERS

Add the following Fund:

Equity Funds:

T. Rowe Price Diversified Mid-Cap Growth Fund, Inc.

Add the following Fund to the Global Proxy Service Rider :

Equity Funds:

T. Rowe Price Diversified Mid-Cap Growth Fund, Inc.

Schedule A

Page 1 of 3

LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO

GLOBAL CUSTODY AGREEMENT WITH

THE CHASE MANHATTAN BANK

DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund	Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Developing Technologies Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Equity Income Fund	Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of: T. Rowe Price Blue Chip Growth Portfolio T. Rowe Price Equity Income Portfolio T. Rowe Price Health Sciences Portfolio T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price New America Growth Portfolio T. Rowe Price Personal Strategy Balanced Portfolio	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Global Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Institutional Equity Funds, Inc. on behalf of: T. Rowe Price Institutional Large-Cap Core Growth Fund T. Rowe Price Institutional Large-Cap Growth Fund T. Rowe Price Institutional Large-Cap Value Fund T. Rowe Price Institutional Small-Cap Stock Fund T. Rowe Price Mid-Cap Equity Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Institutional International Funds, Inc. on behalf of: T. Rowe Price Institutional Emerging Markets Fund T. Rowe Price Institutional Foreign Equity Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Europe & Mediterranean Fund T. Rowe Price Emerging Markets Stock Fund T. Rowe Price European Stock Fund T. Rowe Price Global Stock Fund T. Rowe Price International Discovery Fund T. Rowe Price International Growth & Income Fund T. Rowe Price International Stock Fund T. Rowe Price Japan Fund T. Rowe Price Latin America Fund T. Rowe Price New Asia Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Index Fund, Inc. on behalf of: T. Rowe Price International Equity Index Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Series, Inc. on behalf of: T. Rowe Price International Stock Portfolio	Global Proxy Service Rider and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New America Growth Fund	Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Value Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Income Funds

T. Rowe Price Corporate Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of: T. Rowe Price Limited-Term Bond Portfolio	Global Proxy Service Rider
T. Rowe Price Inflation Protected Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Institutional Income Funds, Inc., on behalf of: T. Rowe Price Institutional High Yield Fund	Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Bond Fund T. Rowe Price International Bond Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price New Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of: T. Rowe Price Personal Strategy Balanced Fund T. Rowe Price Personal Strategy Growth Fund T. Rowe Price Personal Strategy Income Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of: T. Rowe Price Tax-Efficient Balanced Fund T. Rowe Price Tax-Efficient Growth Fund T. Rowe Price Tax-Efficient Multi-Cap Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust	Global Proxy Service Rider
Foreign Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust - B	Global Proxy Service Rider
India Trust	Global Proxy Service Rider
International Small-Cap Trust	Global Proxy Service Rider
Japan Discovery Trust	Global Proxy Service Rider
Taiwan Trust	Global Proxy Service Rider

AMENDMENT AGREEMENT

The Global Custody Agreement of January 3, 1994, as amended April 18, 1994, August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31, 1996, July 23, 1997, September 3, 1997, October 29, 1997, December 15, 1998, October 6, 1999, February 9, 2000, April 19, 2000, July 18, 2000, October 25, 2000, July 24, 2001, April 24, 2002, July 24, 2002, July 23, 2003 and October 22, 2003 (the "Custody Agreement") by and between each of the Entities listed in Schedule A, as amended thereto, severally and not jointly (each such entity referred to hereinafter as the "Customer") and JPMorgan Chase Bank, whose contracts have been assumed by JPMORGAN CHASE BANK (the "Bank") is hereby further amended, as of September 20, 2004 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.

WITNESSETH:

WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1. Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.

4. Governing Law: This Amendment Agreement shall be construed in accordance with and governed by the law of the State of New York without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as of the day and year first above written.

JPMORGAN CHASE BANK

/s/Andrew Lawson

By: ____________________________________

Andrew Lawson

Vice President

EACH OF THE CUSTOMERS LISTED IN

ATTACHMENT A HERETO, SEVERALLY

AND NOT JOINTLY

/s/Henry H. Hopkins

By: ____________________________________

Henry H. Hopkins

Vice President

Attachment A

Page 1 of 1

LIST OF CUSTOMERS

Add the following Fund:

Income Funds:

T. Rowe Price Institutional Income Funds, Inc., on behalf of:

T. Rowe Price Institutional Core Plus Fund

Add the following Fund to the Global Proxy Service Rider :

Equity Funds:

T. Rowe Price Institutional Income Funds, Inc., on behalf of:

T. Rowe Price Institutional Core Plus Fund

Schedule A

Page 1 of 3

LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO

GLOBAL CUSTODY AGREEMENT WITH

THE CHASE MANHATTAN BANK

DATED JANUARY 3, 1994

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

I. INVESTMENT COMPANIES/PORTFOLIOS
REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940

The Mutual Fund Rider is
applicable to all Customers listed
under Section I of this Schedule A.

Equity Funds

T. Rowe Price Balanced Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund	Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Developing Technologies Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Equity Income Fund	Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of: T. Rowe Price Blue Chip Growth Portfolio T. Rowe Price Equity Income Portfolio T. Rowe Price Health Sciences Portfolio T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price New America Growth Portfolio T. Rowe Price Personal Strategy Balanced Portfolio	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Global Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Institutional Equity Funds, Inc. on behalf of: T. Rowe Price Institutional Large-Cap Core Growth Fund T. Rowe Price Institutional Large-Cap Growth Fund T. Rowe Price Institutional Large-Cap Value Fund T. Rowe Price Institutional Small-Cap Stock Fund T. Rowe Price Mid-Cap Equity Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Institutional International Funds, Inc. on behalf of: T. Rowe Price Institutional Emerging Markets Fund T. Rowe Price Institutional Foreign Equity Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Europe & Mediterranean Fund T. Rowe Price Emerging Markets Stock Fund T. Rowe Price European Stock Fund T. Rowe Price Global Stock Fund T. Rowe Price International Discovery Fund T. Rowe Price International Growth & Income Fund T. Rowe Price International Stock Fund T. Rowe Price Japan Fund T. Rowe Price Latin America Fund T. Rowe Price New Asia Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price International Index Fund, Inc. on behalf of: T. Rowe Price International Equity Index Fund	Global Proxy Service Rider and Russian Rider
T. Rowe Price International Series, Inc. on behalf of: T. Rowe Price International Stock Portfolio	Global Proxy Service Rider and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New America Growth Fund	Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc.	Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Value Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 2 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

Income Funds

T. Rowe Price Corporate Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of: T. Rowe Price Limited-Term Bond Portfolio	Global Proxy Service Rider
T. Rowe Price Inflation Protected Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Institutional Income Funds, Inc., on behalf of: T. Rowe Price Institutional Core Plus Fund T. Rowe Price Institutional High Yield Fund	Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of: T. Rowe Price Emerging Markets Bond Fund T. Rowe Price International Bond Fund	Global Proxy Service Rider and Russian Rider Global Proxy Service Rider and Russian Rider
T. Rowe Price New Income Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of: T. Rowe Price Personal Strategy Balanced Fund T. Rowe Price Personal Strategy Growth Fund T. Rowe Price Personal Strategy Income Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc.	Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of: T. Rowe Price Tax-Efficient Balanced Fund T. Rowe Price Tax-Efficient Growth Fund T. Rowe Price Tax-Efficient Multi-Cap Growth Fund	Global Proxy Service Rider Global Proxy Service Rider Global Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.	Global Proxy Service Rider

Schedule A

Page 3 of 3

CUSTOMER

APPLICABLE RIDERS TO
GLOBAL CUSTODY
AGREEMENT

II. ACCOUNTS SUBJECT TO ERISA

The ERISA Rider is applicable
to all Customers Under Section II
of this Schedule A.

T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan

Common Trust Funds

T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:

Emerging Markets Equity Trust	Global Proxy Service Rider
Foreign Discovery Trust	Global Proxy Service Rider
Foreign Discovery Trust - B	Global Proxy Service Rider
India Trust	Global Proxy Service Rider
International Small-Cap Trust	Global Proxy Service Rider
Japan Discovery Trust	Global Proxy Service Rider
Taiwan Trust	Global Proxy Service Rider

TRANSFER AGENCY AND SERVICE AGREEMENT

between

T. ROWE PRICE SERVICES, INC.

and

THE T. ROWE PRICE FUNDS

TABLE OF CONTENTS

Page

Article A Terms of Appointment 3
Article B Duties of Price Services 3
1. Receipt of Orders/Payments 3
2. Redemptions 6
3. Exchanges 9
4. Transfers 9
5. Confirmations 10
6. Returned Checks and ACH Debits 10
7. Redemption of Shares under a Hold 10
8. Dividends, Distributions and Other Corporate Actions 13
9. Abandoned Property and Lost Shareholders 14
10. Books and Records 14
11. Authorized Issued and Outstanding Shares 17
12. Tax Information 17
13. Information to be Furnished to the Fund 17
14. Correspondence 18
15. Lost or Stolen Securities 18
16. Telephone/Computer Services 18
17. Collection of Shareholder/Participant Fees and Calculation
and Distribution of 12b-1 Fees and Administrative
Fee Payments 19
18. Forms N-SAR and N-CSR 20
19. Cooperation With Accountants 20
20. Blue Sky 20
21. Monitoring Funds Excessive Trading Policy 21
22. Anti-Money Laundering Program 21
23. Other Services 23
Article C Fees and Expenses 23
Article D Representations and Warranties of the Price Services 25
Article E Representations and Warranties of the Fund 26
Article F Standard of Care/Indemnification 26
Article G Dual Interests 29
Article H Documentation 29
Article I References to Price Services 31
Article J Compliance with Governmental Rules and Regulations 31
ii

Article K Ownership of Software and Related Material 31
Article L Quality Service Standards 32
Article M As of Transactions 32
Article N Term and Termination of Agreement 35
Article O Notice 36
Article P Assignment 36
Article Q Amendment/Interpretive Provisions 36
Article R Further Assurances 37
Article S Maryland Law to Apply 37
Article T Merger of Agreement 37
Article U Counterparts 37
Article V The Parties 37
Article W Directors, Trustees, Shareholders and Massachusetts Business Trust 38
Article X Captions 38

TRANSFER AGENCY AND SERVICE AGREEMENT

AGREEMENT made as of the first day of January, 2004, by and between T. ROWE PRICE SERVICES, INC., a Maryland corporation having its principal office and place of business at 100 East Pratt Street, Baltimore, Maryland 21202 ("Price Services") , and EACH FUND WHICH IS LISTED ON APPENDIX A (as such Appendix may be amended from time to time) and which evidences its agreement to be bound hereby by executing a copy of this Agreement (each such Fund individually hereinafter referred to as "the Fund," whose definition may be found in Article V);

WHEREAS, the Fund desires to appoint Price Services as its transfer agent, dividend disbursing agent and agent in connection with certain other activities, and Price Services desires to accept such appointment;

WHEREAS, Price Services represents that it is registered with the Securities and Exchange Commission as a Transfer Agent under Section 17A of the Securities Exchange Act of 1934 ("'34 Act") and will notify each Fund promptly if such registration is revoked or if any proceeding is commenced before the Securities and Exchange Commission which may lead to such revocation;

WHEREAS, Price Services has the capability of providing shareholder services on behalf of the Funds for the accounts of shareholders in the Funds;

WHEREAS, certain of the Funds are underlying investment options of portfolios of College Savings Programs ("529 Plans") and Price Services has the capability of providing services, on behalf of the Funds, for the accounts of individuals participating in these 529 Plans;

WHEREAS, certain of the Funds are named investment options under various taxsheltered retirement plans including, but not limited to, individual retirement accounts, Sep-IRA's, SIMPLE plans, deferred compensation plans, 403(b) plans, and profit sharing, thrift, and money purchase pension plans for self-employed individuals, individual 401(k)s and professional partnerships and corporations (collectively referred to as "Retirement Plans" );

WHEREAS, Price Services has the capability of providing special services, on behalf of the Funds, for the accounts of shareholders participating in these Retirement Plans ("Retirement Accounts") ;

WHEREAS, Price Services may subcontract or jointly contract with other parties, on behalf of the Funds, to perform certain of the functions and services described herein including services to Retirement Plans and Retirement Accounts;

WHEREAS, Price Services may enter into agreements with certain third party intermediaries such as banks, broker-dealers, insurance companies and retirement plan record keepers ("Intermediaries") , who will perform certain of the services described herein for beneficial shareholders of the Funds and may accept orders on behalf of the Fund from such beneficial shareholders; and

WHEREAS, Price Services may also enter into, on behalf of the Funds, certain banking relationships to perform various banking services including, but not limited to, check deposits, check disbursements, automated clearing house transactions ("ACH") and wire transfers.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

A. Terms of Appointment

Subject to the terms and conditions set forth in this Agreement, the Fund hereby employs and appoints Price Services to act, and Price Services agrees to act, as the Fund's transfer agent, dividend disbursing agent and agent in connection with: (1) the Fund's authorized and issued shares of its common stock or shares of beneficial interest (all such stock and shares to be referred to as "Shares" ); (2) any dividend reinvestment or other services provided to the existing shareholders of the Fund ("Shareholders") , including, without limitation, any periodic investment plan or periodic withdrawal program; and (3) 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 and their affiliates may enter into contracts ("Other Contracts") with employee benefit plans and/or their sponsors and the sponsors of 529 Plans for the provision of certain services to participants of 529 Plans and Retirement Plans. 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

Price Services shall 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:

* 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);

* Subject to guidelines mutually agreed upon by the Funds and Price Services, excess balances, if any, resulting from deposit in these designated bank accounts will be invested and the income therefrom will be used to offset fees which would otherwise be charged to the Funds under this Agreement;

* Ensure that any documentation received from Investors is in "good order" and all appropriate documentation is received to establish an account;

* 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;

* Maintain a record of all unpaid purchases and report such information to the Fund daily;

* Process periodic payment orders, as authorized by investors, in accordance with the payment procedures mutually agreed upon by both parties;

("Administrators")

* Process contributions in the 529 Plan investment option selected by participant and monitor participant account levels for maximum contribution limit as permitted by 529 Plan;

* For purchases received in 529 Plan investment options and certain Funds that invest in underlying Funds allocate such purchase to the underlying Funds in accordance with procedures and allocation methodologies agreed upon between the Funds and Services;

("'40 Act")

* Process orders received from thirdparty intermediaries on behalf of beneficial Shareholders of omnibus and individual accounts in the Funds in accordance with procedures established by agreement with such intermediaries. Receipt of orders by such third party intermediaries may be deemed receipt by the Fund to the extent permitted by Rule 22c-1 of the '40 Act;

* Process telephone and computer orders for purchases of Fund shares from the Shareholders bank account (via wire or ACH) to the Fund in accordance with procedures mutually agreed upon by both parties and applicable National Automated Clearing House Association ("NACHA") regulations; and

* 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.

Procedures and requirements for effecting and accepting purchase orders from investors by telephone, Tele*Access, computer, or written instructions shall be established by mutual agreement between Price Services and the Fund consistent with the Fund's current prospectus and applicable law.

2. Redemptions

Price Services shall receive for acceptance redemption requests, including telephone redemptions and requests received from Administrators for distributions to participants or their designated beneficiaries or for payment of fees due the Administrator or such other person, including Price Services, and deliver the appropriate documentation thereof to the Custodian. Price Services shall receive and stamp with the date of receipt, all requests for redemptions of Shares (including all certificates delivered to it for redemption) and shall process said redemption requests as follows, subject to the provisions of Section 6 hereof:

* 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;

* Notify the Fund on the next business day of the total number of Shares presented and covered by all such requests;

* For those Funds that impose redemption fees, calculate and assess the fee owed on the redemption and pay such fee to the Fund in accordance with the Fund's then-current prospectus and guidelines established between the Fund and Price Services, including any exceptions granted for certain transactions. Price Services may enter into agreements on behalf of the Funds with intermediaries who hold shares in omnibus accounts whereby the Intermediary agrees to access the fee in accordance with the Fund's prospectus at the time of the redemption and forward such fees to the Funds on a monthly basis or such other mutually agreed upon time;

* 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;

* Instruct custodian to wire redemption proceeds to a designated bank account of Price Services. Subject to guidelines mutually agreed upon by the Funds and Price Services, excess balances, if any, resulting from deposit in these bank accounts will be invested and the income therefrom will be used to offset fees which would otherwise be charged to the Funds under this Agreement;

* 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;

* Make such withholdings as may be required under applicable Federal tax laws;

* In the event redemption proceeds for the payment of fees are to be wired through the Federal Reserve Wire System or via ACH, Price Services shall cause such proceeds to be wired in Federal funds or via ACH to the bank account designated by Shareholder or Administrator, as the case may be;

* Ensure that all redemption orders are processed in accordance with Rule 22c-1 of the '40 Act;

* Process redemption orders received from third party intermediaries on behalf of beneficial Shareholders in omnibus and individual accounts in the Funds in accordance with procedures established by agreement with such intermediaries. Receipt of redemption orders by such third party intermediaries may be deemed receipt by the Fund to the extent permitted by Rule 22c-1 of the '40 Act;

* Process distributions and refunds of 529 Plans to participants or others, as directed, in accordance with the 529 Plan's requirements;

* For distributions and redemptions received in 529 Plan investment options and certain Funds that invest in underlying Funds allocate such redemptions to the underlying Funds in accordance with procedures and allocation methodologies agreed upon between the Funds and Services; and

("SWP")

Procedures and requirements for effecting and accepting redemption orders from Shareholders by telephone, Tele*Access, computer, or written instructions shall be established by mutual agreement between Price Services and the Fund consistent with the Funds current prospectus and applicable law.

3. Exchanges

Price Services shall effect exchanges of shares from one Fund to another in the Shareholder's accounts in accordance with Rule 22c-1 of the '40 Act and in accordance with procedures agreed upon between the Funds and Price Services, including the Fund's excessive trading policy.

Procedures and requirements for effecting and accepting exchange orders from Shareholders by telephone, Tele*Access, computer, or written instructions shall be established by mutual agreement between Price Services and the Fund consistent with the Funds current prospectus and applicable law.

4. Transfers

Price Services shall 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.

5. Confirmations

Price Services shall mail all confirmations and statements as well as other enclosures requested by the Fund to Shareholders or 529 plan participants, and in the case of Retirement Accounts, to the participants and/or Administrators, as may be required by the Funds or by applicable Federal or state law.

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. Price Services and the Funds will establish procedures for the collection of money owed the Fund from investors who have caused losses due to these returned items.

7. Redemption of Shares under a Hold

* Uncollected Funds.

("Uncollected Funds")

* Good Funds.

("Good Funds")

* Redemption of Uncollected Funds

* 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 another Fund until the payment is deemed Good Funds; or

2. The redemption can be processed utilizing the same procedures for written redemptions described below.

* 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.

* Checkwriting Redemptions.

* 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 obtain alternative instructions for payment (through wire, exchange, transfer, etc.). 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.

* All checkwriting redemptions under $10,000 reported as Uncollected or insufficient funds will be rejected and the check returned to the Shareholder. The Funds and Services may agree to contact shareholders presenting checks under $10,000 reported as insufficient funds to obtain alternative instructions for payment.

* Confirmations of Available Funds/Bank Account Registrations.

8. Dividends, Distributions and Other Corporate Actions

* 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.

* Price Services shall act as Dividend Disbursing Agent for the Fund, and as such, shall prepare and make income and capital gain payments to investors. As Dividend Disbursing Agent, Price Services will on or before the payment date of any such dividend or distribution, notify the Custodian of the estimated amount required to pay any portion of said dividend or distribution which is payable in cash, and the Fund agrees that on or about the payment date of such distribution, it shall instruct the Custodian to make available to Price Services sufficient funds for the cash amount to be paid out. If an investor is entitled to receive additional Shares by virtue of any such distribution or dividend, appropriate credits will be made to his or her account.

9. Abandoned Property and Lost Shareholders

In accordance with procedures agreed upon by both parties, Price Services shall report abandoned property to appropriate state and governmental authorities of the Fund. Price Services shall, 90 days prior to the annual reporting of abandoned property to each of the states, make reasonable attempts to locate Shareholders for which (a) checks, tax forms, statements or confirms have been returned; (b) for which accounts have aged outstanding checks; or (c) accounts with share balances that have been coded with stop mail and meet the dormancy period guidelines specified in the individual states. Price Services shall make reasonable attempts to contact shareholders for those accounts that have significant aged outstanding checks over a specified dollar threshold as agreed to by the parties. Price Services shall also comply with the requirements of Rule 17Ad-17 of the 34 Act with respect to searching for lost shareholders.

10. Books and Records

Price Services shall maintain records showing for each Shareholder's account, 529 Plan, Retirement Plan or Retirement Account, as the case may be, the following:

* Names, address and tax identification number;

* Number of Shares held;

* Certain historical information regarding the account of each Shareholder, including dividends and distributions distributed in cash or invested in Shares;

* Pertinent information regarding the establishment and maintenance of Retirement Plans and Retirement Accounts necessary to properly administer each account;

* 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;

* Any stop or restraining order placed against a Shareholder's account;

* Information with respect to withholdings on domestic and foreign accounts;

* 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;

* Any correspondence relating to the current maintenance of a Shareholder's account;

* Certificate numbers and denominations for any Shareholder holding certificates;

* Any information required in order for Price Services to perform the calculations contemplated under this Agreement; and

* Any other records required under applicable law including Rules 17Ad-6 and 7 under the '34 Act and Rule 31a-1 of the '40 Act.

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 ervices described in this Agreement.

Any such records maintained pursuant to Rule 31a-1 under the '40 Act and 17AD-6 and 7 under the '34 Act will be preserved for the periods and maintained in a manner prescribed under the Rules, including any requirements relating to electronic storage of records. 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 and Outstanding Shares

Price Services shall record the issuance of Shares of the Fund and maintain, pursuant to Rule17Ad10(e) of the '34 Act, a record of the total number of Shares of the Fund which are authorized 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 that 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

Price Services shall prepare and file with the Internal Revenue Service ("IRS") and with other appropriate state agencies and, if required, mail to shareholders, those returns for reporting dividends and distributions paid as required to be so filed and mailed, and shall withhold such sums required to be withheld under applicable Federal income tax laws, rules, and regulations and remit such sums to the IRS. Additionally, Price Services will file and, as applicable, mail to Shareholders, 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

Price Services shall 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 and to comply with Sarbanes Oxley Act of 2002.

14. Correspondence

Price Services shall promptly and fully answer correspondence from shareholders, participants and Administrators relating to Shareholder Accounts, Retirement Accounts, and 529 Plan 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, Price Service shall 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/Computer Services

Price Services shall maintain a Telephone Servicing Staff of representatives ("Representatives") sufficient to timely respond to all telephonic inquiries reasonably foreseeable. The Representatives will also effect telephone purchases, redemptions, exchanges, and other transactions mutually agreed upon by both parties, for those Shareholders who have authorized telephone services. The Representatives shall require each Shareholder or participant effecting a telephone transaction to properly identify himself/herself before the transaction is effected, in accordance with procedures agreed upon between by both parties. Procedures for processing telephone transactions will be mutually agreed upon by both parties. Price Services will also be responsible for providing Tele*Access, OnLine 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. Collection of Shareholder/Participant Fees and Calculation and Distribution of 12b-1 Fees and Administrative Fee Payments

Shareholder Fees.

12b-1 Fees and Administrative Fee Payments.

("12b-1 Plan")

("Administrative Fee Payments")

Administrative Fee Agreements.

18. Forms N-SAR and N-CSR

Price Services shall maintain such records, if any, as shall enable the Fund to fulfill the requirements of Forms N-SAR and N-CSR.

19. Cooperation With Accountants

Price Services shall 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-CSR and annual amendment to Form N-1A.

20. Blue Sky

Price Services shall 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. Monitoring Fund's Excessive Trading Policy

Price Services shall monitor accounts to determine if purchases and sales of Fund Shares are in conformance with the Fund's excessive trading policy as outlined in each Fund's then-current prospectus. If the Fund's policy has been violated in accounts held directly with Price Services, Price Services will take action to restrict the account from future excessive trading in accordance with procedures agreed upon between Price Services and the Funds. Price Services will also monitor trading activity in omnibus accounts to review trading activity that indicates potential excessive trading and, if it determined that excessive trading has occurred, Price Services shall take action to restrict future activity in accordance with procedures agreed to between Price Services and the Funds.

22. Anti-Money Laundering Program

Price Services shall perform, on behalf of the Funds, Anti-Money Laundering ("AML") services in accordance with the Anti-Money Laundering Program adopted by the Funds. Price Services shall, maintain policies and procedures, and related internal controls, which are consistent with such AML Program, including but not limited to the following:

* Upon opening a new account, collect required Shareholder information and verify the identity of Shareholders in accordance with the Fund's Customer Identification Program;

("SEC")

("OFAC")

* Ensure that employees that are required to take AML training, complete such training in compliance with the Funds' AML Program and as required by law;

* Arrange for periodic reviews by T. Rowe Price Group Inc.'s internal audit department, at least annually, of the services performed by Price Services under the Funds' AML Program; and

* Maintain all records or other documentation relating to shareholder accounts and transactions therein that are required to be prepared and maintained pursuant to the Funds' AML Program.

Price Services is authorized to take, on behalf of the Funds, any action permitted by law and in accordance with the Funds' AML Program in carrying out it's responsibilities under the Funds' AML Program, including rejecting purchases, freezing Shareholder accounts, restricting certain services, or closing Shareholder accounts if (a) suspicious activity is detected, (b) it is unable to verify the identity of a Shareholder, or (c) a Shareholder matches a government list of known or suspected suspicious persons.

23. Other Services

Price Services shall provide such other services as may be mutually agreed upon between Price Services and the Fund.

C. Fees and Expenses

Except as set forth in this Paragraph C, Price Services is responsible for all expenses relating to the providing of the services hereunder. Each Fund is directly responsible for the fees set forth under Section I of Schedule A and the vendor charges under Section II of Schedule A as well as the following expenses and charges:

Postage.

Proxies.

Communications

Print.

Print & Mail House.

Voice and Data.

* telephone toll charges (both incoming and outgoing, local, long distance and mailgrams);

* data and telephone expenses to communicate with shareholders and transfer shareholders between T. Rowe Price facilities; and

* production support, service enhancements and custom reporting for the shareholder mainframe recordkeeping system.

Record Retention.

Disaster Recovery.

As an accommodation to the Funds and acting as their agent, Price Services may make payments directly to vendors for Fund expenses and, thereafter, be reimbursed by the Funds on a timely basis.

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 methodology. Where possible, such as in the case of inbound and outbound WATS charges, allocation will be made on the actual distribution or usage.

D. Representations and Warranties of Price Services

Price Services represents and warrants to the Fund that:

1. It is a corporation duly organized and existing and in good standing under the laws of Maryland;

2. It is duly qualified to carry on its business in Maryland, Colorado, Florida, District of Columbia, Illinois, Massachusetts, New Jersey, Virginia 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. E. Representations and Warranties of the Fund

The Fund represents and warrants to Price Services that:

1. It is a corporation or business trust duly organized and existing and in good standing under the laws of Maryland or Massachusetts, as the case may be;

2. It is empowered under applicable laws and by its Articles of Incorporation or Declaration of Trust, as the case may be, and By-Laws to enter into and perform this Agreement;

3. All proceedings required by said Articles of Incorporation or Declaration of Trust, as the case may be, and By-Laws have been taken to authorize it to enter into and perform this Agreement;

4. It is an investment company registered under the Act; and

("the '33 Act")

F. Standard of Care/Indemnification

Notwithstanding anything to the contrary in this Agreement:

1. Price Services shall not be liable to any Fund for any act or failure to act by it or its agents or subcontractors on behalf of the Fund in carrying or attempting to carry out the terms and provisions of this Agreement provided Price Services has acted in good faith and without negligence or willful misconduct and selected and monitored the performance of its agents and subcontractors with reasonable care.

2. The Fund shall indemnify and hold Price Services harmless from and against all losses, costs, damages, claims, actions and expenses, including reasonable expenses for legal counsel, incurred by Price Services resulting from: (i) any action or omission by Price Services or its agents or subcontractors in the performance of their duties hereunder; (ii) Price Services acting upon instructions believed by it to have been executed by a duly authorized officer of the Fund; or (iii) Price Services acting upon information provided by the Fund in form and under policies agreed to by Price Services and the Fund. Price Services shall not be entitled to such indemnification in respect of actions or omissions constituting negligence or willful misconduct of Price Services or where Price Services has not exercised reasonable care in selecting or monitoring the performance of its agents or subcontractors.

3. Except as provided in Article M of this Agreement, Price Services shall indemnify and hold harmless the Fund from all losses, costs, damages, claims, actions and expenses, including reasonable expenses for legal counsel, incurred by the Fund resulting from the negligence or willful misconduct of Price Services or which result from Price Services' failure to exercise reasonable care in selecting or monitoring the performance of its agents or subcontractors. The Fund shall not be entitled to such indemnification in respect of actions or omissions constituting negligence or willful misconduct of such Fund or its agents or subcontractors; unless such negligence or misconduct is attributable to Price Services.

4. In determining Price Services' liability, an isolated error or omission will normally not be deemed to constitute negligence when it is determined that:

* Price Services had in place "appropriate procedures;" and

* the employee(s) responsible for the error or omission had been reasonably trained and were being appropriately monitored.

No evidence or circumstances have been produced to indicate that the individual who committed the error or omission was functioning in bad faith, gross negligence or willful misconduct at the time of the incident.

It is understood that Price Services is not obligated to have in place separate procedures to prevent each and every conceivable type of error or omission. The term "Appropriate Procedures" shall mean procedures reasonably designed to prevent and detect errors and omissions. In determining the reasonableness of such procedures, weight will be given to such factors as are appropriate, including the prior occurrence of any similar errors or omissions when such procedures were in place and transfer agent industry standards in place at the time of the occurrence.

5. In the event either party is unable to perform its obligations under the terms of this Agreement because of acts of God, strikes or other causes reasonably beyond its control, such party shall not be liable to the other party for any loss, cost, damage, claim, action or expense resulting from such failure to perform or otherwise from such causes.

6. In order that the indemnification provisions contained in this Article E shall apply, upon the assertion of a claim for which either party may be required to indemnify the other, the party seeking indemnification shall promptly notify the other party of such assertion, and shall keep the other party advised with respect to all developments concerning such claim. The party who may be required to indemnify shall have the option to participate with the party seeking indemnification in the defense of such claim, or to defend against said claim in its own name or in the name of the other party. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other party's prior written consent.

7. Neither party to this Agreement shall be liable to the other party for consequential damages under any provision of this Agreement. G. Dual Interests

It is understood that some person or persons may be directors, officers, or shareholders of both the Funds and Price Services (including Price Services' affiliates), and that the existence of any such dual interest shall not affect the validity of this Agreement or of any transactions hereunder except as otherwise provided by a specific provision of applicable law.

H. Documentation

As requested by Price Services, the Fund shall promptly furnish to Price Services the following:

* 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;

* 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;

* As applicable, specimens of all forms of outstanding and new stock/share certificates in the forms approved by the Board of Directors/Trustees of the Fund with a certificate of the Secretary of the Fund as to such approval;

* All account application forms and other documents relating to Shareholders' accounts;

* 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

* 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.

* As requested by Price Services, the Fund will also furnish from time to time the following documents:

* Each resolution of the Board of Directors/Trustees of the Fund authorizing the original issue of its Shares;

* 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;

* A certified copy of each amendment to the Articles of Incorporation or Declaration of Trust, and the ByLaws of the Fund;

* Certified copies of each vote of the Board of Directors/Trustees authorizing officers to give instructions to the Transfer Agent;

* 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

* 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.

I. References to Price Services

Each Fund agrees not to circulate any printed matter which contains any reference to Price Services without the prior approval of Price Services, excepting solely such printed matter that merely identifies Price Services as agent of the Fund. The Fund will submit printed matter requiring approval to Price Services in draft form, allowing sufficient time for review by Price Services and its legal counsel prior to any deadline for printing.

J. Compliance with Governmental Rules and Regulations

Except as otherwise provided in the Agreement and except for the accuracy of information furnished to the Fund by Price Services, each Fund assumes full responsibility for the preparation, contents and distribution of its prospectuses and compliance with all applicable requirements of the '40 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 and cooperating with respect to examinations and requests from such governmental authorities.

K. Ownership of Software and Related Material

All computer programs, magnetic tapes, written procedures and similar items purchased and/or developed and used by Price Services in performance of the Agreement shall be the property of Price Services and will not become the property of the Fund.

L. Quality Service Standards

Price Services and the Fund may from time to time agree to certain quality service standards, as well as incentives and penalties with respect to Price Services' hereunder.

M. As Of Transactions

For purposes of this Article M, the term "Transaction" shall mean any single or "related transaction" (as defined below) involving the purchase or redemption of Shares (including exchanges) that is processed at a time other than the time of the computation of the Fund's net asset value per Share next computed after receipt of any such transaction order by Price Services due to an act or omission of Price Services. "As Of Processing" refers to the processing of these Transactions. All As Of Processing may only be performed in accordance with the requirements of Rule 22c-1 of the '40 Act. Price Services is responsible for monitoring As Of Transactions procedures that set forth the circumstances under which As Of Transactions are permitted. 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.

Reporting

Price Services shall:

"Cumulative."

("Dilution")

("Gain")

("Report")

Liability

("Board")

("Significant Transaction")

promptly

* Procedures and controls adopted by Price Services to prevent As Of Processing;

* Whether such procedures and controls were being followed at the time of the Significant Transaction;

* The absolute and relative volume of all transactions processed by Price Services on the day of the Significant Transaction;

* 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;

* The prior response of Price Services to recommendations made by the Funds regarding improvement to Price Services' As Of Processing procedures.

3. In determining Price Services' liability with respect to a Significant Transaction, an isolated error or omission will normally not be deemed to constitute negligence when it is determined that:

* Price Services had in place "Appropriate Procedures" as defined in Section 4 of Article F of this Agreement (it is understood that Price Services is not obligated to have in place separate procedures to prevent each and every conceivable type of error or omission);

* the employee(s) responsible for the error or omission had been reasonably trained and were being appropriately monitored; and

* No evidence or circumstances have been produced to indicate that the individual who committed the error or omission was functioning in bad faith, gross negligence or willful misconduct at the time of the incident.

As Of Transactions - Intermediaries

If an As Of Transaction is performed by an intermediary, which is designated by the Fund to received orders for Fund Shares, Price Services shall cause such intermediary to promptly reimburse the Fund for any Dilution caused by such As Of Transaction; provided, however, Price Services shall not be obligated to seek reimbursement from such intermediary if the Dilution is less than $100.

N. Term and Termination of Agreement

* 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.

* 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' written notice to the Fund.

* 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. O. Notice

Any notice as required by this Agreement shall be sufficiently given (i) when sent to an authorized person of the other party at the address of such party set forth above or at such other address as such party may from time to time specify in writing to the other party; or (ii) as otherwise agreed upon by appropriate officers of the parties hereto.

P. Assignment

Neither this Agreement nor any rights or obligations hereunder may be assigned either voluntarily or involuntarily, by operation of law or otherwise, by either party without the prior written consent of the other party, provided this shall not preclude Price Services from employing such agents and subcontractors as it deems appropriate to carry out its obligations set forth hereunder.

Q. Amendment/Interpretive Provisions

The parties by mutual written agreement may amend this Agreement at any time. In addition, in connection with the operation of this Agreement, Price Services and the Fund may agree from time to time on such provisions interpretive of or in addition to the provisions of this Agreement as may in their joint opinion be consistent with the general tenor of this Agreement. Any such interpretive or additional provisions are to be signed by all parties and annexed hereto, but no such provision shall contravene any applicable Federal or state law or regulation and no such interpretive or additional provision shall be deemed to be an amendment of this Agreement.

R. Further Assurances

Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof.

S. Maryland Law to Apply

This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws of Maryland.

T. Merger of Agreement

This Agreement, including the attached Appendices and Schedules supersedes any prior agreement with respect to the subject hereof, whether oral or written.

U. Counterparts

This Agreement may be executed by the parties hereto on any number of counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instruments.

V. The Parties

All references herein to "the Fund" are to each of the Funds listed on Appendix A individually, as if this Agreement were between such individual Fund and Price Services. In the case of a series Fund or trust, all references to "the Fund" are to the individual series or portfolio of such Fund or trust, or to such Fund or trust on behalf of the individual series or portfolio, as appropriate. The "Fund" also includes any T. Rowe Price Funds that may be established after the execution of this Agreement. Any reference in this Agreement to "the parties" shall mean Price Services and such other individual Fund as to which the matter pertains.

W. Directors, Trustees and Shareholders and Massachusetts Business Trust

It is understood and is expressly stipulated that neither the holders of Shares in the Fund nor any Directors or Trustees of the Fund shall be personally liable hereunder.

With respect to any Fund which is a party to this Agreement and which is organized as a Massachusetts business trust, the term "Fund" means and refers to the trustees from time to time serving under the applicable trust agreement (Declaration of Trust) of such Trust as the same may be amended from time to time. It is expressly agreed that the obligations of any such Trust 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.

X. Captions

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf under their seals by and through their duly authorized officers.

T. ROWE PRICE SERVICES, INC.               T. ROWE PRICE FUNDS


/s/Wayne D. OMelia                     /s/Joseph A. Carrier

BY:          BY:



DATED: 5/4/04                                   DATED: 4/29/04






L:\Lgl\Users\Lgl1124\WPDATA\AGRMNT\2004.PriceServices.TransferAgencyAgreement.CLEAN.4-27-04.doc

APPENDIX A

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. Rowe Price Blue Chip Growth Fund--Advisor Class
T. Rowe Price Blue Chip Growth Fund-R Class

T. ROWE PRICE CALIFORNIA TAXFREE INCOME TRUST
California TaxFree Bond Fund
California TaxFree Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND
T. Rowe Price Equity Income Fund--Advisor Class
T. Rowe Price Equity Income Fund--R Class

T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price Equity Income Portfolio-II
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price MidCap Growth Portfolio
T. Rowe Price Mid-Cap Growth Portfolio-II
T. Rowe Price Blue Chip Growth Portfolio
T. Rowe Price Blue Chip Growth Portfolio-II
T. Rowe Price Equity Index 500 Portfolio
T. Rowe Price Health Sciences Portfolio
T. Rowe Price Health Sciences Portfolio-II

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price LimitedTerm Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.
T. Rowe Price Growth Stock Fund--Advisor Class
T. Rowe Price Growth Stock Fund--R Class

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.
T. Rowe Price High Yield Fund--Advisor Class

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
T. Rowe Price Institutional LargeCap Growth Fund
T. Rowe Price Institutional Large-Cap Core Growth Fund
T. Rowe Price Institutional LargeCap Value Fund
T. Rowe Price Institutional MidCap Equity Growth Fund
T. Rowe Price Institutional SmallCap Stock Fund

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Foreign Equity Fund
T. Rowe Price Institutional Emerging Markets Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Growth & Income Fund-- Advisor Class
T. Rowe Price International Growth & Income Fund--R Class
T. Rowe Price International Stock Fund--Advisor Class
T. Rowe Price International Stock Fund--R Class
T. Rowe Price Emerging Europe & Mediterranean Fund
T. Rowe Price International Bond Fund
T. Rowe Price International Bond Fund--Advisor Class
T. Rowe Price Emerging Markets Bond Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MIDCAP GROWTH FUND, INC.
T. Rowe Price MidCap Growth Fund--Advisor Class
T. Rowe Price Mid-Cap Growth Fund--R Class

T. ROWE PRICE MIDCAP VALUE FUND, INC.
T. Rowe Price Mid-Cap Value Fund--Advisor Class
T. Rowe Price Mid-Cap Value Fund--R Class

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 New Income Fund--Advisor Class
T. Rowe Price New Income Fund--R Class

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. Rowe Price Reserve Investment Fund
T. Rowe Price Government Reserve Investment Fund

T. ROWE PRICE RETIREMENT FUNDS, INC.
T. Rowe Price Retirement 2010 Fund
T. Rowe Price Retirement 2010 Fund--Advisor Class
T. Rowe Price Retirement 2010 Fund--R Class
T. Rowe Price Retirement 2020 Fund
T. Rowe Price Retirement 2020 Fund--Advisor Class
T. Rowe Price Retirement 2020 Fund--R Class
T. Rowe Price Retirement 2030 Fund
T. Rowe Price Retirement 2030 Fund--Advisor Class
T. Rowe Price Retirement 2030 Fund--R Class
T. Rowe Price Retirement 2040 Fund
T. Rowe Price Retirement 2040 Fund--Advisor Class
T. Rowe Price Retirement 2040 Fund--R Class
T. Rowe Price Retirement Income Fund
T. Rowe Price Retirement Income Fund--Advisor Class
T. Rowe Price Retirement Income Fund--R Class

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. Rowe Price Science & Technology Fund--Advisor Class

T. ROWE PRICE SHORTTERM BOND FUND, INC.

T. ROWE PRICE SMALLCAP STOCK FUND, INC.
T. Rowe Price SmallCap Stock Fund--Advisor Class

T. ROWE PRICE SMALLCAP VALUE FUND, INC.
T. Rowe Price SmallCap Value Fund--Advisor Class

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Income Fund
Spectrum Growth Fund
Spectrum International Fund

T. ROWE PRICE STATE TAXFREE INCOME TRUST
New York TaxFree Money Fund
New York TaxFree Bond Fund
Maryland TaxFree Bond Fund
Virginia TaxFree Bond Fund
New Jersey TaxFree Bond Fund
Maryland ShortTerm TaxFree Bond Fund
Florida Intermediate TaxFree Fund
Georgia TaxFree Bond Fund
Maryland TaxFree Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE TAXEFFICIENT FUNDS, INC.
T. Rowe Price TaxEfficient Balanced Fund
T. Rowe Price TaxEfficient Growth Fund
T. Rowe Price TaxEfficient MultiCap Growth Fund

T. ROWE PRICE TAXEXEMPT MONEY FUND, INC.

T. ROWE PRICE TAXFREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAXFREE INCOME FUND, INC.
T. Rowe Price Tax-Free Income Fund--Advisor Class

T. ROWE PRICE TAXFREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAXFREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury LongTerm Fund
U.S. Treasury Money Fund

T. ROWE PRICE VALUE FUND, INC.
T. Rowe Price Value Fund--Advisor Class

L:\Lgl\Users\Lgl1124\WPDATA\AGRMNT\2004.PriceServices.TransferAgencyAgreement.CLEAN.4-27-04.doc

AMENDMENT NO. 1

TRANSFER AGENCY AND SERVICE AGREEMENT

Between

T. ROWE PRICE SERVICES, INC.

and

THE T. ROWE PRICE FUNDS

The Transfer Agency and Service Agreement of January 1, 2004, between T. Rowe Price Services, Inc., and each of the Parties listed on Appendix A thereto is hereby amended, as of February 4, 2004, by adding thereto T. Rowe Price Retirement Funds, Inc., on behalf of T. Rowe Price Retirement 2005 Fund, T. Rowe Price Retirement 2015 Fund, T. Rowe Price Retirement 2025 Fund, and T. Rowe Price Retirement 2035 Fund.

 T. ROWE PRICE BALANCED FUND, INC.

 T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
 T. Rowe Price Blue Chip Growth Fund--Advisor Class
 T. Rowe Price Blue Chip Growth Fund--R Class

 T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
 California Tax-Free Bond Fund
 California Tax-Free Money Fund

 T. ROWE PRICE CAPITAL APPRECIATION FUND

 T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

 T. ROWE PRICE CORPORATE INCOME FUND, INC.

 T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

 T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

 T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

 T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

 T. ROWE PRICE EQUITY INCOME FUND
 T. Rowe Price Equity Income Fund--Advisor Class
 T. Rowe Price Equity Income Fund--R Class


 T. ROWE PRICE EQUITY SERIES, INC.
 T. Rowe Price Equity Income Portfolio
 T. Rowe Price Equity Income Portfolio-II
 T. Rowe Price New America Growth Portfolio
 T. Rowe Price Personal Strategy Balanced Portfolio
 T. Rowe Price Mid-Cap Growth Portfolio
 T. Rowe Price Mid-Cap Growth Portfolio-II
 T. Rowe Price Blue Chip Growth Portfolio
 T. Rowe Price Blue Chip Growth Portfolio-II
 T. Rowe Price Equity Index 500 Portfolio
 T. Rowe Price Health Sciences Portfolio
 T. Rowe Price Health Sciences Portfolio-II

 T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

 T. ROWE PRICE FIXED INCOME SERIES, INC.
 T. Rowe Price Limited-Term Bond Portfolio
 T. Rowe Price Prime Reserve Portfolio

 T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

 T. ROWE PRICE GNMA FUND

 T. ROWE PRICE GROWTH & INCOME FUND, INC.

 T. ROWE PRICE GROWTH STOCK FUND, INC.
 T. Rowe Price Growth Stock Fund--Advisor Class
 T. Rowe Price Growth Stock Fund--R Class

 T. ROWE PRICE HEALTH SCIENCES FUND, INC.

 T. ROWE PRICE HIGH YIELD FUND, INC.
 T. Rowe Price High Yield Fund--Advisor Class

 T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

 T. ROWE PRICE INDEX TRUST, INC.
 T. Rowe Price Equity Index 500 Fund
 T. Rowe Price Extended Equity Market Index Fund
 T. Rowe Price Total Equity Market Index Fund

 T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
 T. Rowe Price Institutional Mid-Cap Equity Growth Fund
 T. Rowe Price Institutional Large-Cap Value Fund
 T. Rowe Price Institutional Small-Cap Stock Fund
 T. Rowe Price Institutional Large-Cap Growth Fund
 T. Rowe Price Institutional Large-Cap Core Growth Fund

 T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
 T. Rowe Price Institutional High Yield Fund

 T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
 T. Rowe Price Institutional Foreign Equity Fund
 T. Rowe Price Institutional Emerging Markets Equity Fund

 T. ROWE PRICE INTERNATIONAL FUNDS, INC.
 T. Rowe Price International Stock Fund
 T. Rowe Price International Discovery Fund
 T. Rowe Price European Stock Fund
 T. Rowe Price New Asia Fund
 T. Rowe Price Japan Fund
 T. Rowe Price Latin America Fund
 T. Rowe Price Emerging Markets Stock Fund
 T. Rowe Price Global Stock Fund
 T. Rowe Price International Growth & Income Fund
 T. Rowe Price International Stock Fund--Advisor Class
 T. Rowe Price Emerging Europe & Mediterranean Fund
 T. Rowe Price International Growth & Income Fund--Advisor Class
 T. Rowe Price International Growth & Income Fund--R Class
 T. Rowe Price International Stock Fund--R Class
 T. Rowe Price International Bond Fund
 T. Rowe Price Emerging Markets Bond Fund
 T. Rowe Price International Bond Fund--Advisor Class

 T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
 T. Rowe Price International Equity Index Fund

 T. ROWE PRICE INTERNATIONAL SERIES, INC.
 T. Rowe Price International Stock Portfolio

 T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

 T. ROWE PRICE MID-CAP GROWTH FUND, INC.
 T. Rowe Price Mid-Cap Growth Fund--Advisor Class
 T. Rowe Price Mid-Cap Growth Fund--R Class

 T. ROWE PRICE MID-CAP VALUE FUND, INC.
 T. Rowe Price Mid-Cap Value Fund--Advisor Class
 T. Rowe Price Mid-Cap Value Fund--R Class

 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 New Income Fund--Advisor Class
 T. Rowe Price New Income Fund--R Class

 T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
 T. Rowe Price Personal Strategy Balanced Fund
 T. Rowe Price Personal Strategy Growth Fund
 T. Rowe Price Personal Strategy Income Fund

 T. ROWE PRICE PRIME RESERVE FUND, INC.

 T. ROWE PRICE REAL ESTATE FUND, INC.

 T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
 T. Rowe Price Reserve Investment Fund
 T. Rowe Price Government Reserve Investment Fund

 T. ROWE PRICE RETIREMENT FUNDS, INC.
 T. Rowe Price Retirement 2005 Fund
 T. Rowe Price Retirement 2010 Fund
 T. Rowe Price Retirement 2010 Fund--Advisor Class
 T. Rowe Price Retirement 2010 Fund--R Class
 T. Rowe Price Retirement 2015 Fund
 T. Rowe Price Retirement 2020 Fund
 T. Rowe Price Retirement 2020 Fund--Advisor Class
 T. Rowe Price Retirement 2020 Fund--R Class
 T. Rowe Price Retirement 2025 Fund
 T. Rowe Price Retirement 2030 Fund
 T. Rowe Price Retirement 2030 Fund--Advisor Class
 T. Rowe Price Retirement 2030 Fund--R Class
 T. Rowe Price Retirement 2035 Fund
 T. Rowe Price Retirement 2040 Fund
 T. Rowe Price Retirement 2040 Fund--Advisor Class
 T. Rowe Price Retirement 2040 Fund--R Class
 T. Rowe Price Retirement Income Fund
 T. Rowe Price Retirement Income Fund--Advisor Class
 T. Rowe Price Retirement Income Fund--R Class

 T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
 T. Rowe Price Science & Technology Fund--Advisor Class

 T. ROWE PRICE SHORT-TERM BOND FUND, INC.

 T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
 T. Rowe Price Small-Cap Stock Fund--Advisor Class

 T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
 T. Rowe Price Small-Cap Value Fund--Advisor Class


 T. ROWE PRICE SPECTRUM FUND, INC.
 Spectrum Income Fund
 Spectrum Growth Fund
 Spectrum International Fund

 T. ROWE PRICE STATE TAX-FREE INCOME TRUST
 New York Tax-Free Money Fund
 New York Tax-Free Bond Fund
 Maryland Tax-Free Bond Fund
 Virginia Tax-Free Bond Fund
 New Jersey Tax-Free Bond Fund
 Maryland Short-Term Tax-Free Bond Fund
 Florida Intermediate Tax-Free Fund
 Georgia Tax-Free Bond Fund
 Maryland Tax-Free Money Fund

 T. ROWE PRICE SUMMIT FUNDS, INC.
 T. Rowe Price Summit Cash Reserves Fund
 T. Rowe Price Summit GNMA Fund

 T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
 T. Rowe Price Summit Municipal Money Market Fund
 T. Rowe Price Summit Municipal Intermediate Fund
 T. Rowe Price Summit Municipal Income Fund

 T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
 T. Rowe Price Tax-Efficient Balanced Fund
 T. Rowe Price Tax-Efficient Growth Fund
 T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

 T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

 T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

 T. ROWE PRICE TAX-FREE INCOME FUND, INC.
 T. Rowe Price Tax-Free Income Fund--Advisor Class

 T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

 T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

 T. ROWE PRICE U.S. BOND INDEX 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 VALUE FUND, INC.
 T. Rowe Price Value Fund--Advisor Class

Attest:

/s/Patricia B. Lippert                      /s/Joseph A. Carrier
            BY:
Patricia B. Lippert                 By:     Joseph A. Carrier
Secretary                                   Treasurer


Attest:                                     T. ROWE PRICE SERVICES, INC.

/s/Barbara A. Van Horn                      /s/Henry H. Hopkins
            BY:
Barbara A. Van Horn                 By:     Henry H. Hopkins
Secretary                                   Vice President

AMENDMENT NO. 2

TRANSFER AGENCY AND SERVICE AGREEMENT

Between

T. ROWE PRICE SERVICES, INC.

and

THE T. ROWE PRICE FUNDS

 T. ROWE PRICE BALANCED FUND, INC.

 T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
 T. Rowe Price Blue Chip Growth Fund--Advisor Class
 T. Rowe Price Blue Chip Growth Fund--R Class

 T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
 California Tax-Free Bond Fund
 California Tax-Free Money Fund

 T. ROWE PRICE CAPITAL APPRECIATION FUND

 T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

 T. ROWE PRICE CORPORATE INCOME FUND, INC.

 T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

 T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

 T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

 T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

 T. ROWE PRICE EQUITY INCOME FUND
 T. Rowe Price Equity Income Fund--Advisor Class
 T. Rowe Price Equity Income Fund--R Class


 T. ROWE PRICE EQUITY SERIES, INC.
 T. Rowe Price Equity Income Portfolio
 T. Rowe Price Equity Income Portfolio-II
 T. Rowe Price New America Growth Portfolio
 T. Rowe Price Personal Strategy Balanced Portfolio
 T. Rowe Price Mid-Cap Growth Portfolio
 T. Rowe Price Mid-Cap Growth Portfolio-II
 T. Rowe Price Blue Chip Growth Portfolio
 T. Rowe Price Blue Chip Growth Portfolio-II
 T. Rowe Price Equity Index 500 Portfolio
 T. Rowe Price Health Sciences Portfolio
 T. Rowe Price Health Sciences Portfolio-II

 T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

 T. ROWE PRICE FIXED INCOME SERIES, INC.
 T. Rowe Price Limited-Term Bond Portfolio
 T. Rowe Price Prime Reserve Portfolio

 T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

 T. ROWE PRICE GNMA FUND

 T. ROWE PRICE GROWTH & INCOME FUND, INC.

 T. ROWE PRICE GROWTH STOCK FUND, INC.
 T. Rowe Price Growth Stock Fund--Advisor Class
 T. Rowe Price Growth Stock Fund--R Class

 T. ROWE PRICE HEALTH SCIENCES FUND, INC.

 T. ROWE PRICE HIGH YIELD FUND, INC.
 T. Rowe Price High Yield Fund--Advisor Class

 T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

 T. ROWE PRICE INDEX TRUST, INC.
 T. Rowe Price Equity Index 500 Fund
 T. Rowe Price Extended Equity Market Index Fund
 T. Rowe Price Total Equity Market Index Fund

 T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
 T. Rowe Price Institutional Mid-Cap Equity Growth Fund
 T. Rowe Price Institutional Large-Cap Value Fund
 T. Rowe Price Institutional Small-Cap Stock Fund
 T. Rowe Price Institutional Large-Cap Growth Fund
 T. Rowe Price Institutional Large-Cap Core Growth Fund

 T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
 T. Rowe Price Institutional Core Plus Fund
 T. Rowe Price Institutional High Yield Fund

 T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
 T. Rowe Price Institutional Foreign Equity Fund
 T. Rowe Price Institutional Emerging Markets Equity Fund

 T. ROWE PRICE INTERNATIONAL FUNDS, INC.
 T. Rowe Price International Stock Fund
 T. Rowe Price International Discovery Fund
 T. Rowe Price European Stock Fund
 T. Rowe Price New Asia Fund
 T. Rowe Price Japan Fund
 T. Rowe Price Latin America Fund
 T. Rowe Price Emerging Markets Stock Fund
 T. Rowe Price Global Stock Fund
 T. Rowe Price International Growth & Income Fund
 T. Rowe Price International Stock Fund--Advisor Class
 T. Rowe Price Emerging Europe & Mediterranean Fund
 T. Rowe Price International Growth & Income Fund--Advisor Class
 T. Rowe Price International Growth & Income Fund--R Class
 T. Rowe Price International Stock Fund--R Class
 T. Rowe Price International Bond Fund
 T. Rowe Price Emerging Markets Bond Fund
 T. Rowe Price International Bond Fund--Advisor Class

 T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
 T. Rowe Price International Equity Index Fund

 T. ROWE PRICE INTERNATIONAL SERIES, INC.
 T. Rowe Price International Stock Portfolio

 T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

 T. ROWE PRICE MID-CAP GROWTH FUND, INC.
 T. Rowe Price Mid-Cap Growth Fund--Advisor Class
 T. Rowe Price Mid-Cap Growth Fund--R Class

 T. ROWE PRICE MID-CAP VALUE FUND, INC.
 T. Rowe Price Mid-Cap Value Fund--Advisor Class
 T. Rowe Price Mid-Cap Value Fund--R Class

 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 New Income Fund--Advisor Class
 T. Rowe Price New Income Fund--R Class

 T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
 T. Rowe Price Personal Strategy Balanced Fund
 T. Rowe Price Personal Strategy Growth Fund
 T. Rowe Price Personal Strategy Income Fund

 T. ROWE PRICE PRIME RESERVE FUND, INC.

 T. ROWE PRICE REAL ESTATE FUND, INC.

 T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
 T. Rowe Price Reserve Investment Fund
 T. Rowe Price Government Reserve Investment Fund

 T. ROWE PRICE RETIREMENT FUNDS, INC.
 T. Rowe Price Retirement 2005 Fund
 T. Rowe Price Retirement 2010 Fund
 T. Rowe Price Retirement 2010 Fund--Advisor Class
 T. Rowe Price Retirement 2010 Fund--R Class
 T. Rowe Price Retirement 2015 Fund
 T. Rowe Price Retirement 2020 Fund
 T. Rowe Price Retirement 2020 Fund--Advisor Class
 T. Rowe Price Retirement 2020 Fund--R Class
 T. Rowe Price Retirement 2025 Fund
 T. Rowe Price Retirement 2030 Fund
 T. Rowe Price Retirement 2030 Fund--Advisor Class
 T. Rowe Price Retirement 2030 Fund--R Class
 T. Rowe Price Retirement 2035 Fund
 T. Rowe Price Retirement 2040 Fund
 T. Rowe Price Retirement 2040 Fund--Advisor Class
 T. Rowe Price Retirement 2040 Fund--R Class
 T. Rowe Price Retirement Income Fund
 T. Rowe Price Retirement Income Fund--Advisor Class
 T. Rowe Price Retirement Income Fund--R Class

 T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
 T. Rowe Price Science & Technology Fund--Advisor Class

 T. ROWE PRICE SHORT-TERM BOND FUND, INC.

 T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
 T. Rowe Price Small-Cap Stock Fund--Advisor Class

 T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
 T. Rowe Price Small-Cap Value Fund--Advisor Class


 T. ROWE PRICE SPECTRUM FUND, INC.
 Spectrum Income Fund
 Spectrum Growth Fund
 Spectrum International Fund

 T. ROWE PRICE STATE TAX-FREE INCOME TRUST
 New York Tax-Free Money Fund
 New York Tax-Free Bond Fund
 Maryland Tax-Free Bond Fund
 Virginia Tax-Free Bond Fund
 New Jersey Tax-Free Bond Fund
 Maryland Short-Term Tax-Free Bond Fund
 Florida Intermediate Tax-Free Fund
 Georgia Tax-Free Bond Fund
 Maryland Tax-Free Money Fund

 T. ROWE PRICE SUMMIT FUNDS, INC.
 T. Rowe Price Summit Cash Reserves Fund
 T. Rowe Price Summit GNMA Fund

 T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
 T. Rowe Price Summit Municipal Money Market Fund
 T. Rowe Price Summit Municipal Intermediate Fund
 T. Rowe Price Summit Municipal Income Fund

 T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
 T. Rowe Price Tax-Efficient Balanced Fund
 T. Rowe Price Tax-Efficient Growth Fund
 T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

 T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

 T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

 T. ROWE PRICE TAX-FREE INCOME FUND, INC.
 T. Rowe Price Tax-Free Income Fund--Advisor Class

 T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

 T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

 T. ROWE PRICE U.S. BOND INDEX 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 VALUE FUND, INC.
 T. Rowe Price Value Fund--Advisor Class

Attest:

/s/Patricia B. Lippert                      /s/Joseph A. Carrier
            BY:

Patricia B. Lippert                 By:     Joseph A. Carrier
Secretary                                   Treasurer


Attest:                                     T. ROWE PRICE SERVICES, INC.

/s/Barbara A. Van Horn                      /s/Henry H. Hopkins
            BY:

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

AMENDMENT NO. 3

TRANSFER AGENCY AND SERVICE AGREEMENT

Between

T. ROWE PRICE SERVICES, INC.

and

THE T. ROWE PRICE FUNDS

The Transfer Agency and Service Agreement of January 1, 2004, between T. Rowe Price Services, Inc., and each of the Parties listed on Appendix A thereto is hereby amended, as of February 4, 2004, September 20, 2004, and October 20, 2004 by adding thereto T. Rowe Price Capital Appreciation Fund, on behalf of T. Rowe Price Capital Appreciation Fund--Advisor Class; T. Rowe Price Capital Opportunity Fund, Inc., on behalf of T. Rowe Price Capital Opportunity Fund--Advisor Class and T. Rowe Price Capital Opportunity Fund-- R Class; T. Rowe Price Real Estate Fund, Inc., on behalf of T. Rowe Price Real Estate Fund--Advisor Class; and T. Rowe Price Short-Term Bond Fund, Inc., on behalf of T. Rowe Price Short-Term Bond Fund--Advisor Class.

T. ROWE PRICE BALANCED FUND, INC.

 T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
 T. Rowe Price Blue Chip Growth Fund--Advisor Class
 T. Rowe Price Blue Chip Growth Fund--R Class

 T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
 California Tax-Free Bond Fund
 California Tax-Free Money Fund

 T. ROWE PRICE CAPITAL APPRECIATION FUND
 T. Rowe Price Capital Appreciation Fund--Advisor Class

 T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
 T. Rowe Price Capital Opportunity Fund--Advisor Class
 T. Rowe Price Capital Opportunity Fund--R Class

 T. ROWE PRICE CORPORATE INCOME FUND, INC.

 T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

 T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

 T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

 T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

 T. ROWE PRICE EQUITY INCOME FUND
 T. Rowe Price Equity Income Fund--Advisor Class
 T. Rowe Price Equity Income Fund--R Class


 T. ROWE PRICE EQUITY SERIES, INC.
 T. Rowe Price Equity Income Portfolio
 T. Rowe Price Equity Income Portfolio-II
 T. Rowe Price New America Growth Portfolio
 T. Rowe Price Personal Strategy Balanced Portfolio
 T. Rowe Price Mid-Cap Growth Portfolio
 T. Rowe Price Mid-Cap Growth Portfolio-II
 T. Rowe Price Blue Chip Growth Portfolio
 T. Rowe Price Blue Chip Growth Portfolio-II
 T. Rowe Price Equity Index 500 Portfolio
 T. Rowe Price Health Sciences Portfolio
 T. Rowe Price Health Sciences Portfolio-II

 T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

 T. ROWE PRICE FIXED INCOME SERIES, INC.
 T. Rowe Price Limited-Term Bond Portfolio
 T. Rowe Price Prime Reserve Portfolio

 T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

 T. ROWE PRICE GNMA FUND

 T. ROWE PRICE GROWTH & INCOME FUND, INC.

 T. ROWE PRICE GROWTH STOCK FUND, INC.
 T. Rowe Price Growth Stock Fund--Advisor Class
 T. Rowe Price Growth Stock Fund--R Class

 T. ROWE PRICE HEALTH SCIENCES FUND, INC.

 T. ROWE PRICE HIGH YIELD FUND, INC.
 T. Rowe Price High Yield Fund--Advisor Class

 T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

 T. ROWE PRICE INDEX TRUST, INC.
 T. Rowe Price Equity Index 500 Fund
 T. Rowe Price Extended Equity Market Index Fund
 T. Rowe Price Total Equity Market Index Fund

 T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
 T. Rowe Price Institutional Mid-Cap Equity Growth Fund
 T. Rowe Price Institutional Large-Cap Value Fund
 T. Rowe Price Institutional Small-Cap Stock Fund
 T. Rowe Price Institutional Large-Cap Growth Fund
 T. Rowe Price Institutional Large-Cap Core Growth Fund

 T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
 T. Rowe Price Institutional Core Plus Fund
 T. Rowe Price Institutional High Yield Fund

 T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
 T. Rowe Price Institutional Foreign Equity Fund
 T. Rowe Price Institutional Emerging Markets Equity Fund

 T. ROWE PRICE INTERNATIONAL FUNDS, INC.
 T. Rowe Price International Stock Fund
 T. Rowe Price International Discovery Fund
 T. Rowe Price European Stock Fund
 T. Rowe Price New Asia Fund
 T. Rowe Price Japan Fund
 T. Rowe Price Latin America Fund
 T. Rowe Price Emerging Markets Stock Fund
 T. Rowe Price Global Stock Fund
 T. Rowe Price International Growth & Income Fund
 T. Rowe Price International Stock Fund--Advisor Class
 T. Rowe Price Emerging Europe & Mediterranean Fund
 T. Rowe Price International Growth & Income Fund--Advisor Class
 T. Rowe Price International Growth & Income Fund--R Class
 T. Rowe Price International Stock Fund--R Class
 T. Rowe Price International Bond Fund
 T. Rowe Price Emerging Markets Bond Fund
 T. Rowe Price International Bond Fund--Advisor Class

 T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
 T. Rowe Price International Equity Index Fund

 T. ROWE PRICE INTERNATIONAL SERIES, INC.
 T. Rowe Price International Stock Portfolio

 T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

 T. ROWE PRICE MID-CAP GROWTH FUND, INC.
 T. Rowe Price Mid-Cap Growth Fund--Advisor Class
 T. Rowe Price Mid-Cap Growth Fund--R Class

 T. ROWE PRICE MID-CAP VALUE FUND, INC.
 T. Rowe Price Mid-Cap Value Fund--Advisor Class
 T. Rowe Price Mid-Cap Value Fund--R Class

 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 New Income Fund--Advisor Class
 T. Rowe Price New Income Fund--R Class

 T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
 T. Rowe Price Personal Strategy Balanced Fund
 T. Rowe Price Personal Strategy Growth Fund
 T. Rowe Price Personal Strategy Income Fund

 T. ROWE PRICE PRIME RESERVE FUND, INC.

 T. ROWE PRICE REAL ESTATE FUND, INC.
 T. Rowe Price Real Estate Fund--Advisor Class

 T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
 T. Rowe Price Reserve Investment Fund
 T. Rowe Price Government Reserve Investment Fund

 T. ROWE PRICE RETIREMENT FUNDS, INC.
 T. Rowe Price Retirement 2005 Fund
 T. Rowe Price Retirement 2010 Fund
 T. Rowe Price Retirement 2010 Fund--Advisor Class
 T. Rowe Price Retirement 2010 Fund--R Class
 T. Rowe Price Retirement 2015 Fund
 T. Rowe Price Retirement 2020 Fund
 T. Rowe Price Retirement 2020 Fund--Advisor Class
 T. Rowe Price Retirement 2020 Fund--R Class
 T. Rowe Price Retirement 2025 Fund
 T. Rowe Price Retirement 2030 Fund
 T. Rowe Price Retirement 2030 Fund--Advisor Class
 T. Rowe Price Retirement 2030 Fund--R Class
 T. Rowe Price Retirement 2035 Fund
 T. Rowe Price Retirement 2040 Fund
 T. Rowe Price Retirement 2040 Fund--Advisor Class
 T. Rowe Price Retirement 2040 Fund--R Class
 T. Rowe Price Retirement Income Fund
 T. Rowe Price Retirement Income Fund--Advisor Class
 T. Rowe Price Retirement Income Fund--R Class

 T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
 T. Rowe Price Science & Technology Fund--Advisor Class

 T. ROWE PRICE SHORT-TERM BOND FUND, INC.
 T. Rowe Price Short-Term Bond Fund--Advisor Class

 T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
 T. Rowe Price Small-Cap Stock Fund--Advisor Class

 T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
 T. Rowe Price Small-Cap Value Fund--Advisor Class

 T. ROWE PRICE SPECTRUM FUND, INC.
 Spectrum Income Fund
 Spectrum Growth Fund
 Spectrum International Fund

 T. ROWE PRICE STATE TAX-FREE INCOME TRUST
 New York Tax-Free Money Fund
 New York Tax-Free Bond Fund
 Maryland Tax-Free Bond Fund
 Virginia Tax-Free Bond Fund
 New Jersey Tax-Free Bond Fund
 Maryland Short-Term Tax-Free Bond Fund
 Florida Intermediate Tax-Free Fund
 Georgia Tax-Free Bond Fund
 Maryland Tax-Free Money Fund

 T. ROWE PRICE SUMMIT FUNDS, INC.
 T. Rowe Price Summit Cash Reserves Fund
 T. Rowe Price Summit GNMA Fund

 T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
 T. Rowe Price Summit Municipal Money Market Fund
 T. Rowe Price Summit Municipal Intermediate Fund
 T. Rowe Price Summit Municipal Income Fund

 T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
 T. Rowe Price Tax-Efficient Balanced Fund
 T. Rowe Price Tax-Efficient Growth Fund
 T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

 T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

 T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

 T. ROWE PRICE TAX-FREE INCOME FUND, INC.
 T. Rowe Price Tax-Free Income Fund--Advisor Class

 T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

 T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

 T. ROWE PRICE U.S. BOND INDEX 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 VALUE FUND, INC.
 T. Rowe Price Value Fund--Advisor Class

Attest:

/s/Patricia B. Lippert                      /s/Joseph A. Carrier
            BY:

Patricia B. Lippert                 By:     Joseph A. Carrier
Secretary                                   Treasurer


Attest:                                     T. ROWE PRICE SERVICES, INC.

/s/Barbara A. Van Horn                      /s/Henry H. Hopkins
            BY:

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

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 Expenses       3

Article C       Representations and Warranties of Price Associates      4

Article D       Representations and Warranties of the Fund      4

Article E       Ownership of Software and Related Material      5

Article F       Quality Service Standards       5

Article G       Standard of Care/Indemnification        5

Article H       Dual Interests  7

Article I       Documentation   8

Article J       Recordkeeping/Confidentiality   8

Article K       Compliance with Governmental Rules and Regulations      8

Article L       Term and Termination of Agreement       9

Article M       Notice  9

Article N       Assignment      9

Article O       Amendment/Interpretive Provisions       10

Article P       Further Assurances      10

Article Q       Maryland Law to Apply   10

Article R       Merger of Agreement     10

Article S       Counterparts    10

Article T       The Parties     11

Article U       Directors, Trustee and Shareholders and Massachusetts Business Trust    11

Article V       Captions        12
        i

AGREEMENT made as of thefirstday of January, 2004, by and between T. ROWE PRICE ASSOCIATES, INC., a Maryland corporation having its principal office and place of business at 100 East Pratt Street, Baltimore, Maryland 21202 (Price Associates), and each Fund which is listed on Appendix A (as such Appendix may be amended from time to time) and which evidences its agreement to be bound hereby by executing a copy of this Agreement (each such Fund individually hereinafter referred to as "the Fund" , whose definition may be found in Article T);

WHEREAS, Price Associates has the capability of providing the Funds with certain accounting services ("Accounting Services") ;

WHEREAS, the Fund desires to appoint Price Associates to provide these Accounting Services and Price Associates desires to accept such appointment;

WHEREAS, Price Associates may subcontract or jointly contract with other parties, on behalf of the Funds to perform certain of the functions and services described herein;

WHEREAS, the Board of Directors/Trustees of the Fund (the "Board" ) has authorized the Fund to utilize various pricing services for the purpose of providing to Price Associates securities prices for the calculation of the Fund's net asset value.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

A. Terms of Appointment/Duties of Price Associates

Subject to the terms and conditions set forth in this Agreement, the Fund hereby employs and appoints Price Associates to provide, and Price Associates agrees to provide, the following Accounting Services:

1. Maintain for each Fund a daily trial balance, a general ledger, subsidiary records and capital stock accounts;

2. Maintain for each Fund an investment ledger, including amortized bond, foreign dollar denominated costs and securities on loan where applicable;

3. Maintain for each Fund all records relating to the Fund's income and expenses;

("NAV")

Price Associates shall have no liability for any losses or damages incurred by the Fund as a result of erroneous portfolio security evaluations provided by such designated sources and/or pricing services; provided that, Price Associates reasonably believes the prices are accurate, has adhered to its normal verification control procedures, and has otherwise met the standard of care as set forth in Article G of this Agreement;

5. Provide daily cash flow and transaction status information to each Fund's adviser;

6. Authorize the payment of Fund expenses, either through instruction of custodial bank or utilization of custodian's automated transfer system;

("SEC")

("IRS")

8. Provide each Fund with such advice that may be reasonably necessary to properly account for all financial transactions and to maintain the Fund's accounting procedures and records so as to insure compliance with generally accepted accounting and tax practices and rules;

9. Maintain for each Fund all records that may be reasonably required in connection with the audit performed by each Fund's independent accountant, the SEC, the IRS or such other Federal or state regulatory agencies; and

10. Cooperate with each Fund's independent public accountants and take all reasonable action in the performance of its obligations under the Agreement to assure that the necessary information is made available to such accountants for the expression of their opinion without any qualification as to the scope of their examination including, but not limited to, their opinion included in each such Fund's annual report on Form N-CSR and annual amendment to Form N-1A.

11. Maintain adequate internal controls over financial reporting to provide complete and accurate financial information and disclosures that are certified by officers of the Funds. Provide sub-certifications, as requested by the officers of the Funds, for the adequacy of such controls and the completeness and accuracy of information included in Form N-CSR, or any other form that may require certification. B. Fees and Expenses

Except as set forth in this Paragraph B and Schedule A, Price Associates is responsible for all expenses relating to the providing of services hereunder. Each Fund is directly responsible for the fees and charges as set forth in the Schedule A attached hereto and for the following expenses and charges: 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.

As an accommodation to the Funds and acting as their agent, Price Associates may make payments directly to vendors for Fund expenses and, thereafter, be reimbursed by the Funds on a timely basis.

C. Representations and Warrantees of Price Associates

Price Associates represents and warrants to the Fund that:

1. It is a corporation duly organized and existing in good standing under the laws of Maryland.

2. It is duly qualified to carry on its business in Maryland.

3. It is empowered under applicable laws and by its charter and By-Laws to enter into and perform this Agreement.

4. All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.

5. It has, and will continue to have, access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement. D. Representations and Warranties of the Fund

The Fund represents and warrants to Price Associates that:

1. It is a corporation or business trust, as the case may be, duly organized and existing and in good standing under the laws of Maryland or Massachusetts, as the case may be.

2. It is empowered under applicable laws and by its Articles of Incorporation or Declaration of Trust, as the case may be, and By-Laws and all required proceedings have been taken to authorize it to enter into and perform this Agreement. E. Ownership of Software and Related Material

All computer programs, magnetic tapes, written procedures, and similar items purchased and/or developed and used by Price Associates in performance of this Agreement shall be the property of Price Associates and will not become the property of the Funds.

F. Quality Service Standards

Price Associates and the Fund may, from time to time, agree to certain quality service standards, with respect to Price Associates' services hereunder.

G. Standard of Care/Indemnification

Notwithstanding anything to the contrary in this Agreement:

1. Where an NAV error results in loss or dilution to a Fund of less than $10,000, the determination of liability for the error will be made by Price Associates. Where an NAV error results in loss or dilution to a Fund of $10,000 or more but less than $100,000, liability for the error will be resolved through negotiations between Fund Counsel and Price Associates. Where an NAV error results in loss or dilution to a Fund of the lesser of 1/2 of 1% of NAV or $100,000 or more, the error will be promptly reported to the Board (unless the Fund is fully compensated for the loss or dilution), provided that final settlement with respect to such errors will not be made until approved by the Board. A summary of all NAV errors and their effect on the Funds will be reported to the Funds' Audit Committee on an annual basis. In determining the liability of Price Associates for an NAV error, an error or omission will not be deemed to constitute negligence when it is determined that:

Price Associates had in place "appropriate procedures and an adequate system of internal controls;"

the employee(s) responsible for the error or omission had been reasonably trained and was being appropriately monitored; and

no evidence or circumstances have been produced to indicate that the individual who committed the error or omission was functioning in bad faith, with gross negligence or willful misconduct at the time of the incident.

It is understood that Price Associates is not obligated to have in place separate procedures to prevent each and every conceivable type of error or omission. The term "appropriate procedures and adequate system of internal controls" shall mean procedures and controls reasonably designed to prevent and detect errors and omissions. In determining the reasonableness of such procedures and controls, weight will be given to such factors as are appropriate, including the prior occurrence of any similar errors or omissions when such procedures and controls were in place and fund accounting industry standards in place at the time of the error.

2. The Fund shall indemnify and hold Price Associates harmless from and against all losses, costs, damages, claims, actions, and expenses, including reasonable expenses for legal counsel, incurred by Price Associates resulting from: (i) any action or omission by Price Associates or its agents or subcontractors in the performance of their duties hereunder; (ii) Price Associates acting upon instructions believed by it to have been executed by a duly authorized officer of the Fund; or (iii) Price Associates acting upon information provided by the Fund in form and under policies agreed to by Price Associates and the Fund. Price Associates shall not be entitled to such indemnification in respect of actions or omissions constituting negligence or willful misconduct of Price Associates or where Price Associates has not exercised reasonable care in selecting or monitoring the performance of its agents or subcontractors.

3. Price Associates shall indemnify and hold harmless the Fund from all losses, costs, damages, claims, actions and expenses, including reasonable expenses for legal counsel, incurred by the Fund resulting from the negligence or willful misconduct of Price Associates or which result from Price Associates' failure to exercise reasonable care in selecting or monitoring the performance of its agents or subcontractors. The Fund shall not be entitled to such indemnification with respect to actions or omissions constituting negligence or willful misconduct of such Fund or its agents or subcontractors; unless such negligence or misconduct is attributable to Price Associates.

4. In the event either party is unable to perform its obligations under the terms of this Agreement because of acts of God, strikes or other causes reasonably beyond its control, such party shall not be liable to the other party for any loss, cost, damage, claim, action or expense resulting from such failure to perform or otherwise from such causes.

5. In order that the indemnification provisions contained in this Article G shall apply, upon the assertion of a claim for which either party may be required to indemnify the other, the party seeking indemnification shall promptly notify the other party of such assertion, and shall keep the other party advised with respect to all developments concerning such claim. The party who may be required to indemnify shall have the option to participate with the party seeking indemnification in the defense of such claim, or to defend against said claim in its own name or in the name of the other party. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other partys 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

("the Act")

("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' written 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

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 Appendix and Schedule supersedes any prior agreement with respect to the subject hereof, whether oral or written.

S. Counterparts

This Agreement may be executed by the parties hereto on any number of counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instruments.

T. The Parties

All references herein to "the Fund" are to each of the Funds listed on Appendix A individually or any class thereof, 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 that 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.

V. Captions

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf under their seals by and through their duly authorized officers.

T. ROWE PRICE ASSOCIATES, INC.  T. ROWE PRICE FUNDS

/s/ Henry H. Hopkins                    /s/Joseph A. Carrier
BY:            BY:



DATED: 4/29/04                          DATED: 4/29/04



L:\Lgl\Users\Lgl1124\WPDATA\AGRMNT\2004 Fund Accounting Service Agreement.doc

APPENDIX A

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. Rowe Price Blue Chip Growth Fund--Advisor Class
T. Rowe Price Blue Chip Growth Fund-R Class

T. ROWE PRICE CALIFORNIA TAXFREE INCOME TRUST
California TaxFree Bond Fund
California TaxFree Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND
T. Rowe Price Equity Income Fund--Advisor Class
T. Rowe Price Equity Income Fund--R Class

T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price Equity Income Portfolio-II
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price MidCap Growth Portfolio
T. Rowe Price Mid-Cap Growth Portfolio-II
T. Rowe Price Blue Chip Growth Portfolio
T. Rowe Price Blue Chip Growth Portfolio-II
T. Rowe Price Equity Index 500 Portfolio
T. Rowe Price Health Sciences Portfolio
T. Rowe Price Health Sciences Portfolio-II

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price LimitedTerm Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.
T. Rowe Price Growth Stock Fund--Advisor Class
T. Rowe Price Growth Stock Fund--R Class

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.
T. Rowe Price High Yield Fund--Advisor Class

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
T. Rowe Price Institutional LargeCap Growth Fund
T. Rowe Price Institutional Large-Cap Core Growth Fund
T. Rowe Price Institutional LargeCap Value Fund
T. Rowe Price Institutional MidCap Equity Growth Fund
T. Rowe Price Institutional SmallCap Stock Fund

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Foreign Equity Fund
T. Rowe Price Institutional Emerging Markets Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Growth & Income Fund-- Advisor Class
T. Rowe Price International Growth & Income Fund--R Class
T. Rowe Price International Stock Fund--Advisor Class
T. Rowe Price International Stock Fund--R Class
T. Rowe Price Emerging Europe & Mediterranean Fund
T. Rowe Price International Bond Fund
T. Rowe Price International Bond Fund--Advisor Class
T. Rowe Price Emerging Markets Bond Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MIDCAP GROWTH FUND, INC.
T. Rowe Price MidCap Growth Fund--Advisor Class
T. Rowe Price Mid-Cap Growth Fund--R Class

T. ROWE PRICE MIDCAP VALUE FUND, INC.
T. Rowe Price Mid-Cap Value Fund--Advisor Class
T. Rowe Price Mid-Cap Value Fund--R Class

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 New Income Fund--Advisor Class
T. Rowe Price New Income Fund--R Class

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. Rowe Price Reserve Investment Fund
T. Rowe Price Government Reserve Investment Fund

T. ROWE PRICE RETIREMENT FUNDS, INC.
T. Rowe Price Retirement 2010 Fund
T. Rowe Price Retirement 2010 Fund--Advisor Class
T. Rowe Price Retirement 2010 Fund--R Class
T. Rowe Price Retirement 2020 Fund
T. Rowe Price Retirement 2020 Fund--Advisor Class
T. Rowe Price Retirement 2020 Fund--R Class
T. Rowe Price Retirement 2030 Fund
T. Rowe Price Retirement 2030 Fund--Advisor Class
T. Rowe Price Retirement 2030 Fund--R Class
T. Rowe Price Retirement 2040 Fund
T. Rowe Price Retirement 2040 Fund--Advisor Class
T. Rowe Price Retirement 2040 Fund--R Class
T. Rowe Price Retirement Income Fund
T. Rowe Price Retirement Income Fund--Advisor Class
T. Rowe Price Retirement Income Fund--R Class

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. Rowe Price Science & Technology Fund--Advisor Class

T. ROWE PRICE SHORTTERM BOND FUND, INC.

T. ROWE PRICE SMALLCAP STOCK FUND, INC.
T. Rowe Price SmallCap Stock Fund--Advisor Class

T. ROWE PRICE SMALLCAP VALUE FUND, INC.
T. Rowe Price SmallCap Value Fund--Advisor Class

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Income Fund
Spectrum Growth Fund
Spectrum International Fund

T. ROWE PRICE STATE TAXFREE INCOME TRUST
New York TaxFree Money Fund
New York TaxFree Bond Fund
Maryland TaxFree Bond Fund
Virginia TaxFree Bond Fund
New Jersey TaxFree Bond Fund
Maryland ShortTerm TaxFree Bond Fund
Florida Intermediate TaxFree Fund
Georgia TaxFree Bond Fund
Maryland TaxFree Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE TAXEFFICIENT FUNDS, INC.
T. Rowe Price TaxEfficient Balanced Fund
T. Rowe Price TaxEfficient Growth Fund
T. Rowe Price TaxEfficient MultiCap Growth Fund

T. ROWE PRICE TAXEXEMPT MONEY FUND, INC.

T. ROWE PRICE TAXFREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAXFREE INCOME FUND, INC.
T. Rowe Price Tax-Free Income Fund--Advisor Class

T. ROWE PRICE TAXFREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAXFREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury LongTerm Fund
U.S. Treasury Money Fund

T. ROWE PRICE VALUE FUND, INC.
T. Rowe Price Value Fund--Advisor Class

AMENDMENT NO. 1

AGREEMENT

between

T. ROWE PRICE ASSOCIATES, INC.

and

THE T. ROWE PRICE FUNDS

for

FUND ACCOUNTING SERVICES

The Agreement for Fund Accounting Services of January 1, 2004, between T. Rowe Price Associates, Inc. and each of the Parties listed on Appendix A thereto is hereby amended, as of February 4, 2004, by adding thereto T. Rowe Price Retirement Funds, Inc., on behalf of T. Rowe Price Retirement 2005 Fund, T. Rowe Price Retirement 2015 Fund, T. Rowe Price Retirement 2025 Fund, and T. Rowe Price Retirement 2035 Fund.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. Rowe Price Blue Chip Growth Fund--Advisor Class
T. Rowe Price Blue Chip Growth Fund--R Class

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND
T. Rowe Price Equity Income Fund--Advisor Class
T. Rowe Price Equity Income Fund--R Class


T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price Equity Income Portfolio-II
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price Mid-Cap Growth Portfolio-II
T. Rowe Price Blue Chip Growth Portfolio
T. Rowe Price Blue Chip Growth Portfolio-II
T. Rowe Price Equity Index 500 Portfolio
T. Rowe Price Health Sciences Portfolio
T. Rowe Price Health Sciences Portfolio-II

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.
T. Rowe Price Growth Stock Fund--Advisor Class
T. Rowe Price Growth Stock Fund--R Class

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.
T. Rowe Price High Yield Fund--Advisor Class

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.



T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
T. Rowe Price Institutional Mid-Cap Equity Growth Fund
T. Rowe Price Institutional Large-Cap Value Fund
T. Rowe Price Institutional Small-Cap Stock Fund
T. Rowe Price Institutional Large-Cap Growth Fund
T. Rowe Price Institutional Large-Cap Core Growth Fund

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Foreign Equity Fund
T. Rowe Price Institutional Emerging Markets Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Growth & Income Fund-- Advisor Class
T. Rowe Price International Growth & Income Fund--R Class
T. Rowe Price International Stock Fund--Advisor Class
T. Rowe Price International Stock Fund--R Class
T. Rowe Price Emerging Europe & Mediterranean Fund
T. Rowe Price International Bond Fund
T. Rowe Price International Bond Fund--Advisor Class
T. Rowe Price Emerging Markets Bond Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. Rowe Price Mid-Cap Growth Fund--Advisor Class
T. Rowe Price Mid-Cap Growth Fund--R Class

T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. Rowe Price Mid-Cap Value Fund--Advisor Class
T. Rowe Price Mid-Cap Value Fund--R Class

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 New Income Fund--Advisor Class
T. Rowe Price New Income Fund--R Class

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. Rowe Price Reserve Investment Fund
T. Rowe Price Government Reserve Investment Fund



T. ROWE PRICE RETIREMENT FUNDS, INC.
T. Rowe Price Retirement 2005 Fund
T. Rowe Price Retirement 2010 Fund
T. Rowe Price Retirement 2010 Fund--Advisor Class
T. Rowe Price Retirement 2010 Fund--R Class
T. Rowe Price Retirement 2015 Fund
T. Rowe Price Retirement 2020 Fund
T. Rowe Price Retirement 2020 Fund--Advisor Class
T. Rowe Price Retirement 2020 Fund--R Class
T. Rowe Price Retirement 2025 Fund
T. Rowe Price Retirement 2030 Fund
T. Rowe Price Retirement 2030 Fund--Advisor Class
T. Rowe Price Retirement 2030 Fund--R Class
T. Rowe Price Retirement 2035 Fund
T. Rowe Price Retirement 2040 Fund
T. Rowe Price Retirement 2040 Fund--Advisor Class
T. Rowe Price Retirement 2040 Fund--R Class
T. Rowe Price Retirement Income Fund
T. Rowe Price Retirement Income Fund--Advisor Class
T. Rowe Price Retirement Income Fund--R Class

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. Rowe Price Science & Technology Fund--Advisor Class

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. Rowe Price Small-Cap Stock Fund--Advisor Class

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. Rowe Price Small-Cap Value Fund--Advisor Class

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Income Fund
Spectrum Growth Fund
Spectrum International Fund


T. ROWE PRICE STATE TAX-FREE INCOME TRUST
New York Tax-Free Money Fund
New York Tax-Free Bond Fund
Maryland Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
Maryland Tax-Free Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. Rowe Price Tax-Free Income Fund--Advisor Class

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX 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 VALUE FUND, INC.
T. Rowe Price Value Fund--Advisor Class

Attest: /s/Patricia B. Lippert /s/Joseph A. Carrier BY: Patricia B. Lippert By: Joseph A. Carrier Secretary Treasurer Attest: T. ROWE PRICE ASSOCIATES, INC. /s/Barbara A. Van Horn /s/Henry H. Hopkins BY: Barbara A. Van Horn By: Henry H. Hopkins Secretary Vice President

AMENDMENT NO. 2

AGREEMENT

between

T. ROWE PRICE ASSOCIATES, INC.

and

THE T. ROWE PRICE FUNDS

for

FUND ACCOUNTING SERVICES

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. Rowe Price Blue Chip Growth Fund--Advisor Class
T. Rowe Price Blue Chip Growth Fund--R Class

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND
T. Rowe Price Equity Income Fund--Advisor Class
T. Rowe Price Equity Income Fund--R Class


T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price Equity Income Portfolio-II
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price Mid-Cap Growth Portfolio-II
T. Rowe Price Blue Chip Growth Portfolio
T. Rowe Price Blue Chip Growth Portfolio-II
T. Rowe Price Equity Index 500 Portfolio
T. Rowe Price Health Sciences Portfolio
T. Rowe Price Health Sciences Portfolio-II

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.
T. Rowe Price Growth Stock Fund--Advisor Class
T. Rowe Price Growth Stock Fund--R Class

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.
T. Rowe Price High Yield Fund--Advisor Class

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.



T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
T. Rowe Price Institutional Mid-Cap Equity Growth Fund
T. Rowe Price Institutional Large-Cap Value Fund
T. Rowe Price Institutional Small-Cap Stock Fund
T. Rowe Price Institutional Large-Cap Growth Fund
T. Rowe Price Institutional Large-Cap Core Growth Fund

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional Core Plus Fund
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Foreign Equity Fund
T. Rowe Price Institutional Emerging Markets Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Growth & Income Fund-- Advisor Class
T. Rowe Price International Growth & Income Fund--R Class
T. Rowe Price International Stock Fund--Advisor Class
T. Rowe Price International Stock Fund--R Class
T. Rowe Price Emerging Europe & Mediterranean Fund
T. Rowe Price International Bond Fund
T. Rowe Price International Bond Fund--Advisor Class
T. Rowe Price Emerging Markets Bond Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. Rowe Price Mid-Cap Growth Fund--Advisor Class
T. Rowe Price Mid-Cap Growth Fund--R Class

T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. Rowe Price Mid-Cap Value Fund--Advisor Class
T. Rowe Price Mid-Cap Value Fund--R Class

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 New Income Fund--Advisor Class
T. Rowe Price New Income Fund--R Class

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. Rowe Price Reserve Investment Fund
T. Rowe Price Government Reserve Investment Fund



T. ROWE PRICE RETIREMENT FUNDS, INC.
T. Rowe Price Retirement 2005 Fund
T. Rowe Price Retirement 2010 Fund
T. Rowe Price Retirement 2010 Fund--Advisor Class
T. Rowe Price Retirement 2010 Fund--R Class
T. Rowe Price Retirement 2015 Fund
T. Rowe Price Retirement 2020 Fund
T. Rowe Price Retirement 2020 Fund--Advisor Class
T. Rowe Price Retirement 2020 Fund--R Class
T. Rowe Price Retirement 2025 Fund
T. Rowe Price Retirement 2030 Fund
T. Rowe Price Retirement 2030 Fund--Advisor Class
T. Rowe Price Retirement 2030 Fund--R Class
T. Rowe Price Retirement 2035 Fund
T. Rowe Price Retirement 2040 Fund
T. Rowe Price Retirement 2040 Fund--Advisor Class
T. Rowe Price Retirement 2040 Fund--R Class
T. Rowe Price Retirement Income Fund
T. Rowe Price Retirement Income Fund--Advisor Class
T. Rowe Price Retirement Income Fund--R Class

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. Rowe Price Science & Technology Fund--Advisor Class

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. Rowe Price Small-Cap Stock Fund--Advisor Class

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. Rowe Price Small-Cap Value Fund--Advisor Class

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Income Fund
Spectrum Growth Fund
Spectrum International Fund


T. ROWE PRICE STATE TAX-FREE INCOME TRUST
New York Tax-Free Money Fund
New York Tax-Free Bond Fund
Maryland Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
Maryland Tax-Free Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. Rowe Price Tax-Free Income Fund--Advisor Class

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX 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 VALUE FUND, INC.
T. Rowe Price Value Fund--Advisor Class

AMENDMENT NO. 3

AGREEMENT

between

T. ROWE PRICE ASSOCIATES, INC.

and

THE T. ROWE PRICE FUNDS

for

FUND ACCOUNTING SERVICES

The Agreement for Fund Accounting Services of January 1, 2004, between T. Rowe Price Associates, Inc. and each of the Parties listed on Appendix A thereto is hereby amended, as of February 4, 2004, September 20, 2004, and October 20, 2004, by adding thereto T. Rowe Price Capital Appreciation Fund, on behalf of T. Rowe Price Capital Appreciation Fund--Advisor Class; T. Rowe Price Capital Opportunity Fund, Inc., on behalf of T. Rowe Price Capital Opportunity Fund--Advisor Class and T. Rowe Price Capital Opportunity Fund--R Class; T. Rowe Price Real Estate Fund, Inc., on behalf of T. Rowe Price Real Estate Fund--Advisor Class; and T. Rowe Price Short-Term Bond Fund, Inc., on behalf of T. Rowe Price Short-Term Bond Fund--Advisor Class.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. Rowe Price Blue Chip Growth Fund--Advisor Class
T. Rowe Price Blue Chip Growth Fund--R Class

T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund

T. ROWE PRICE CAPITAL APPRECIATION FUND
T. Rowe Price Capital Appreciation Fund--Advisor Class

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. Rowe Price Capital Opportunity Fund--Advisor Class
T. Rowe Price Capital Opportunity Fund--R Class

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND
T. Rowe Price Equity Income Fund--Advisor Class
T. Rowe Price Equity Income Fund--R Class

T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price Equity Income Portfolio-II
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price Mid-Cap Growth Portfolio-II
T. Rowe Price Blue Chip Growth Portfolio
T. Rowe Price Blue Chip Growth Portfolio-II
T. Rowe Price Equity Index 500 Portfolio
T. Rowe Price Health Sciences Portfolio
T. Rowe Price Health Sciences Portfolio-II

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.
T. Rowe Price Growth Stock Fund--Advisor Class
T. Rowe Price Growth Stock Fund--R Class

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.
T. Rowe Price High Yield Fund--Advisor Class

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
T. Rowe Price Institutional Mid-Cap Equity Growth Fund
T. Rowe Price Institutional Large-Cap Value Fund
T. Rowe Price Institutional Small-Cap Stock Fund
T. Rowe Price Institutional Large-Cap Growth Fund
T. Rowe Price Institutional Large-Cap Core Growth Fund

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional Core Plus Fund
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Foreign Equity Fund
T. Rowe Price Institutional Emerging Markets Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Growth & Income Fund-- Advisor Class
T. Rowe Price International Growth & Income Fund--R Class
T. Rowe Price International Stock Fund--Advisor Class
T. Rowe Price International Stock Fund--R Class
T. Rowe Price Emerging Europe & Mediterranean Fund
T. Rowe Price International Bond Fund
T. Rowe Price International Bond Fund--Advisor Class
T. Rowe Price Emerging Markets Bond Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.



T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. Rowe Price Mid-Cap Growth Fund--Advisor Class
T. Rowe Price Mid-Cap Growth Fund--R Class
T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. Rowe Price Mid-Cap Value Fund--Advisor Class
T. Rowe Price Mid-Cap Value Fund--R Class

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 New Income Fund--Advisor Class
T. Rowe Price New Income Fund--R Class

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.
T. Rowe Price Real Estate Fund--Advisor Class

T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. Rowe Price Reserve Investment Fund
T. Rowe Price Government Reserve Investment Fund



T. ROWE PRICE RETIREMENT FUNDS, INC.
T. Rowe Price Retirement 2005 Fund
T. Rowe Price Retirement 2010 Fund
T. Rowe Price Retirement 2010 Fund--Advisor Class
T. Rowe Price Retirement 2010 Fund--R Class
T. Rowe Price Retirement 2015 Fund
T. Rowe Price Retirement 2020 Fund
T. Rowe Price Retirement 2020 Fund--Advisor Class
T. Rowe Price Retirement 2020 Fund--R Class
T. Rowe Price Retirement 2025 Fund
T. Rowe Price Retirement 2030 Fund
T. Rowe Price Retirement 2030 Fund--Advisor Class
T. Rowe Price Retirement 2030 Fund--R Class
T. Rowe Price Retirement 2035 Fund
T. Rowe Price Retirement 2040 Fund
T. Rowe Price Retirement 2040 Fund--Advisor Class
T. Rowe Price Retirement 2040 Fund--R Class
T. Rowe Price Retirement Income Fund
T. Rowe Price Retirement Income Fund--Advisor Class
T. Rowe Price Retirement Income Fund--R Class

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. Rowe Price Science & Technology Fund--Advisor Class

T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. Rowe Price Short-Term Bond Fund--Advisor Class

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. Rowe Price Small-Cap Stock Fund--Advisor Class

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. Rowe Price Small-Cap Value Fund--Advisor Class

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Income Fund
Spectrum Growth Fund
Spectrum International Fund


T. ROWE PRICE STATE TAX-FREE INCOME TRUST
New York Tax-Free Money Fund
New York Tax-Free Bond Fund
Maryland Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
Maryland Tax-Free Money Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. Rowe Price Tax-Efficient Multi-Cap Growth Fund

T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.

T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.

T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. Rowe Price Tax-Free Income Fund--Advisor Class

T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

T. ROWE PRICE U.S. BOND INDEX 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 VALUE FUND, INC.
T. Rowe Price Value Fund--Advisor Class

Attest:

/s/Patricia B. Lippert                           /s/Joseph A. Carrier
            BY:
Patricia B. Lippert                    By:       Joseph A. Carrier
Secretary                                        Treasurer


Attest:                                                   T. ROWE PRICE ASSOCIATES, INC.


/s/Barbara A. Van Horn                           /s/Henry H. Hopkins
            BY:
Barbara A. Van Horn            By:     Henry H. Hopkins
Secretary                                        Vice President

AGREEMENT

between

T. ROWE PRICE RETIREMENT PLAN SERVICES, INC.

and

T. ROWE PRICE FUNDS

TABLE OF CONTENTS

Page

Article A Terms of Appointment 2

Article B Duties of RPS 2
1. Contributions - Retirement Plans and Retirement Accounts 2
2. Retirement Plans - Redemptions to Cover Distributions 3
3. Other Provisions 5
4. Exchanges 5
5. Books and Records 6
6. Tax Information 7
7. Other Information to be Furnished to the Funds 7

8. Telephone/On-Line Services 7
9. Correspondence 7
10. Prospectuses/Confirmation Statements 8
11. Proxies 8
12. Form N-SAR and N-CSR 8
13. Withholding 8
14. Excessive Trading 8

Article C Fees and Expenses 9
1. Postage 9
2. Proxies 9
3. Communications 9
4. Record Retention 10
5. Disaster Recovery 10

Article D Representations and Warranties of RPS 11

Article E Representations and Warranties of the Fund 11

Article F Standard of Care/Indemnification 12

Article G Dual Interests 14

Article H Documentation 15

Article I Recordkeeping/Confidentiality 16

Article J Ownership of Software and Related Material 17

Article K As of Transactions 17
1. Reporting 17
2. Liability 18

Article L Term and Termination of Agreement 20

Article M Notice 21

Article N Assignment 21

Article O Amendment/Interpretive Provisions 21

Article P Further Assurances 21

Article Q Maryland Law to Apply 21

Article R Merger of Agreement 22

Article S Counterparts 22

Article T The Parties 22

Article U Directors, Trustees and Shareholders and Massachusetts Business Trust 22

Article V Captions 23

AGREEMENT, made as of the first day of January, 2004, 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 and local government deferred compensation plans, 403(b) plans, and profit sharing, thrift, 401(k) 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 longterm interest of the Funds;

WHEREAS, RPS has the capability of providing special services, on behalf of the Fund, for the existing accounts of individuals ("Participants") participating in these Retirement Plans ("Retirement Accounts") ;

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; and

WHEREAS, the Fund desires to contract with RPS to provide the 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. Contributions - 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 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. In the case of a new Participant, establish and maintain a Retirement Account for such Participant;

b. Compute the number of shares of each Fund to which the Participant is entitled in accordance with the price per share of such Fund as calculated and provided by the Fund for orders received at that time and date, and purchase the appropriate shares in each such Retirement Account;

("Services")

("NSCC")

("Omnibus Account")

d. Transmit to Services, by wire directly or through the NSCC, at a time designated by the NSCC or mutually agreed upon by both parties, the aggregate money allocated to coincide with the purchase order; and

("'40 Act")

2. Retirement Plans - Redemptions to Cover Distributions.

After RPS has received instructions from the Administrator or Participants 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 number of shares to be redeemed from each such Retirement Account for such distributions in accordance with the price per share of such Fund as calculated and provided by the Fund for orders received in good order at that time and date.

b. After such computation, calculate the aggregate amount of all redemptions in the Retirement Accounts.

c. Transmit any net redemption order to Services, through the NSCC or such other method mutually agreed upon, or directly to the Fund, as the case may be, for the Omnibus Account of each Fund. Services will wire proceeds to RPS, directly or through the NSCC, to coincide with the redemption order for each Omnibus Account. RPS will distribute to Participants or their designated beneficiaries the amount to be disbursed.

d. 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 for orders received in good order at that time and date, of such Fund as calculated and provided by the Fund; and

ii. Inform Services, directly or through the NSCC, or the Funds directly, as the case may be, of the necessary Shares to be redeemed from the Omnibus Account of the Funds to cover such disbursements.

e. Ensure that all redemption orders are processed in accordance with Rule 22c1 of the '40 Act.

f. Calculate and assess redemption fees for those Funds that assess redemption fees and pay such fee to the Fund in accordance with the Fund's then-current prospectus and the guidelines established between the Fund and RPS, including any exceptions granted for retirement plans or for certain transactions in retirement plans.

3. Other Provisions

a. If any instruction tendered by an Administrator to purchase or redeem shares in a Retirement Account is not satisfactory to RPS, RPS shall promptly notify the Administrator of such fact together with the reason therefore;

b. The authority of RPS to perform its responsibilities under Paragraph B(2) with respect to each Fund shall be suspended upon RPS' receipt of notification from such Fund of the suspension of the determination of the Fund's net asset value per share and shall remain suspended until RPS receives proper notification from the Fund; and

c. 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.

4. Exchanges

Effect exchanges of shares of the Funds in the Retirement Accounts upon receipt of appropriate instructions from the Administrator and/or Participant in accordance with the price per share of the Funds as calculated and provided by the Fund for orders received in good order at that time and date. Calculate and transmit a net purchase and redemption order to Services directly or through the NSCC, or the Fund, as the case may be, for the Omnibus Account of each Fund. RPS will transmit by wire to Services, directly or through the NSCC, the aggregate monies allocated to each Fund to coincide with any net purchase order or instruct Services to wire to it, directly or through the NSCC, monies from each Fund's Omnibus Account to coincide with any net redemption order. RPS shall ensure that all exchange orders are processed in accordance with Rule 22c1 of the '40 Act.

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 of each Fund;

c. Historical information regarding the account of each Participant and/or Retirement Plan, including dividends and capital gain distributions invested in shares;

d. Any instructions from a Participant or Administrator, including all forms executed by a Participant with respect toelections with respect to payment options in connection with the redemption of shares or distribution elections, if applicable; and

e. 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 and Rule 17Ad-6 and 7 of the Securities and Exchange Act of 1934 will be preserved for the periods and manner prescribed under the Rules, including any requirements for electronic storage of records. 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 of this agreement or at such other time as may be mutually agreed upon.

6. Tax Information

RPS shall also prepare and file with appropriate federal agencies, such information returns and reports as required by applicable Federal 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 law.

7. Other Information to be Furnished to the Funds

RPS will furnish to the Fund, such information, including Participant lists and statistical information and other information for the Fund to comply with the Sarbanes-Oxley Act of 2002 as may be agreed upon from time to time between RPS and the Fund.

8. Telephone/On-Line Services

RPS will promptly respond to any telephone calls from Administrators and/or Participants relating to the Retirement Accounts and/or questions pertaining to the Funds. RPS will also be responsible for providing a telephone voice response unit and on-line services. Procedures for processing telephone, voice response unit and on-line transactions will be mutually agreed upon by both parties.

9. Correspondence

RPS will promptly and fully answer correspondence from Administrators and Participants relating to Retirement Accounts and transfer agent procedures, and such other correspondence as may from time to time be mutually agreed upon with the Funds. Copies of all correspondence will be retained by RPS in accordance with applicable law.

10. Prospectuses/Confirmation Statements

RPS will be responsible for mailing all confirmations and statements relating to transactions in the Funds, prospectuses, semi-annual and annual reports of the Funds and other enclosures and mailings, as may be requested by the Funds or required by applicable Federal law.

11. Proxies

As requested by the Funds, RPS shall assist in the mailing of proxy cards and other material required to be mailed by the Fund in connection with shareholder meetings of the Fund and shall assist in the receipt, examination and tabulation of returned proxies and the certification of the vote to the Fund.

12. Forms N-SAR and N-CSR

RPS shall maintain such records, if any, as shall enable the Fund to fulfill the requirements of Forms N-SAR and N-CSR.

13. Withholding

The Fund and RPS shall agree to procedures to be followed with respect to RPS' responsibilities in connection with compliance for federal withholding on distributions to Participants from Retirement Accounts and related disbursements of withholdings to the Internal Revenue Service.

14. Excessive Trading

RPS shall monitor Participant accounts to determine if trading activity is in conformance with the Fund's excessive trading policy as set forth in the Funds then-current prospectus. If the Fund's policy is violated, RPS shall take action to restrict the account in accordance with procedures agreed upon between RPS and the Funds.

C. Fees and Expenses.

Except as set forth in this Paragraph C and Schedule A, RPS is responsible for all expenses relating to the providing of services hereunder. Each Fund is directly responsible for the fees set forth under Schedule A as well as the following expenses and charges:

1. Postage. The cost of postage and freight for mailing materials, including confirmations and statements as well as Fund prospectuses and Fund shareholder reports, to Participants with investments in the Fund, 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

Print.

Print & Mail House.

Voice and Data.

* telephone toll charges (both incoming and outgoing, local, long distance and mailgrams);

* data and telephone lines and associated equipment such as modems, multiplexers, and facsimile equipment; and

* production support, service enhancements, and custom reporting for the Participant recordkeeping system.

4. Record Retention. The cost of maintenance and supplies used to maintain, microfilm, copy, record, index, display, retrieve, and store, in optical disc, cd rom or 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, which includes charges from T. Rowe Price Technologies Inc. for the cost of providing recovery of critical shareholder servicing systems maintained internally, as agreed to by the parties.

As an accommodation to the Funds, and acting as their agent, RPS may make payments directly to vendors for Fund expenses and, thereafter, be reimbursed by the Funds on a timely basis.

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 Alaska, California, Colorado, District of Columbia, Florida, Illinois, Maryland, Massachusetts, New Jersey and Virginia.

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 reasonably 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 determining RPS' liability, an isolated error or omission will normally not be deemed to constitute negligence when it is determined that:

* RPS had in place "appropriate procedures;"

* the employees responsible for the error or omission had been reasonably trained and were being appropriately monitored; and

* no evidence or circumstances have been produced to indicate that the individual who committed the error or omission was functioning in bad faith, gross negligence or willful misconduct at the time of the incident.

It is understood that RPS is not obligated to have in place separate procedures to prevent each and every conceivable type of error or omission. The term "appropriate procedures" shall mean procedures reasonably designed to prevent and detect errors and omissions. In determining the reasonableness of such procedures, weight will be given to such factors as are appropriate, including the prior occurrence of any similar errors or omissions when such procedures were in place and transfer agent industry standards in place at the time of the occurrence.

5. In the event either party is unable to perform its obligations under the terms of this Agreement because of acts of God, strikes or other causes reasonably beyond its control, such party shall not be liable to the other party for any loss, cost, damage, claims, actions or expense resulting from such failure to perform or otherwise from such causes.

6. In order that the indemnification provisions contained in this Article F shall apply, upon the assertion of a claim for which either party may be required to indemnify the other, the party seeking indemnification shall promptly notify the other party of such assertion, and shall keep the other party advised with respect to all developments concerning such claim. The party who may be required to indemnify shall have the option to participate with the party seeking indemnification in the defense of such claim, or to defend against said claim in its own name or in the name of the other party. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other party's prior written consent.

7. Neither party to this Agreement shall be liable to the other party for consequential damages under any provision of this Agreement.

G. Dual Interests

It is understood that some person or persons may be directors, officers, or shareholders of both RPS and the Fund and that the existence of any such dual interest shall not affect the validity of this Agreement or of any transactions hereunder except as otherwise provided by a specific provision of applicable law.

H. Documentation

1. As requested by RPS, the Fund shall promptly furnish to RPS the following:

a. 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. 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

d. A copy of the Fund's current and new prospectuses and shareholder reports issued by the Fund.

The delivery of any such document to either party hereto 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 to RPS 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 ByLaws of the Fund;

d. Certified copies of each vote of the Board of Directors/Trustees authorizing officers to give instructions to the Fund; and

e. Such other documents or opinions which RPS, in its discretion, may reasonably deem necessary or appropriate in the proper performance of its duties under this Agreement.

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 '40 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; (c) after so requested by the other party hereto; or (d) by the Administrator.

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) 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 due to an act or omission of RPS. "As Of Processing" refers to the processing of these Transactions. All As Of Processing may only be performed in accordance with the requirements of Rule 22c-1 of the '40 Act. RPS is responsible for monitoring As Of Transactions procedures that set forth the circumstances under which As Of Transactions are permitted. 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:

"Cumulative."

("Dilution")

("Gain")

("Report")

2. Liability

("Board")

("Significant Transaction")

promptly

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 Significant Transactions to the Fund and to all other Funds; and

v. The prior response of RPS to recommendations made by the Funds regarding improvement to RPS' As Of Processing procedures.

c. In determining RPS' liability with respect to a Significant Transaction, an isolated error or omission will normally not be deemed to constitute negligence when it is determined that:

RPS had in place "Appropriate Procedures" as defined in Section 4 of Article F of this Agreement (it is understood that RPS is not obligated to have in place separate procedures to prevent each and every conceivable type of error or omission);

the employees responsible for the error or omission had been reasonably trained and were being appropriately monitored; and

no evidence or circumstances have been produced to indicate that the individual who committed the error or omission was functioning in bad faith, gross negligence or willful misconduct at the time of the incident.

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' prior written notice to RPS; and by RPS, upon three hundred sixty-five (365) days' prior written 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

N. Assignment

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 in their joint opinion may 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 in any number of counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

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. 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 RPS 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.

T. ROWE PRICE RETIREMENT PLAN           T. ROWE PRICE FUNDS
SERVICES, INC.

/s/Charles E. Vieth                     /s/Joseph A. Carrier
BY:          BY:


DATED:5/10/04                           DATED:4/29/04

APPENDIX A

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. Rowe Price Blue Chip Growth Fund--R Class

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALLCAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND
T. Rowe Price Equity Income Fund--R Class

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.
T. Rowe Price Growth Stock Fund--R Class

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
T. Rowe Price Institutional MidCap Equity Growth Fund
T. Rowe Price Institutional LargeCap Value Fund
T. Rowe Price Institutional SmallCap Stock Fund
T. Rowe Price Institutional Large-Cap Growth Fund
T. Rowe Price Institutional Large-Cap Core Growth Fund

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Foreign Equity Fund
T. Rowe Price Institutional Emerging Markets Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Stock Fund
T. Rowe Price International Stock Fund--R Class
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Growth & Income FundR Class
T. Rowe Price Emerging Europe & Mediterranean Fund
T. Rowe Price International Bond Fund
T. Rowe Price Emerging Markets Bond Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.

T. ROWE PRICE MIDCAP GROWTH FUND, INC.
T. Rowe Price Mid-Cap Growth Fund--R Class

T. ROWE PRICE MIDCAP VALUE FUND, INC.
T. Rowe Price Mid-Cap Value FundR Class

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 New Income FundR Class

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RETIREMENT FUNDS, INC.
T. Rowe Price Retirement 2010 Fund
T. Rowe Price Retirement 2010 Fund--R Class
T. Rowe Price Retirement 2020 Fund
T. Rowe Price Retirement 2020 Fund--R Class
T. Rowe Price Retirement 2030 Fund
T. Rowe Price Retirement 2030 Fund--R Class
T. Rowe Price Retirement 2040 Fund
T. Rowe Price Retirement 2040 Fund-- R Class
T. Rowe Price Retirement Income Fund
T. Rowe Price Retirement Income Fund--R Class

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORTTERM BOND FUND, INC.

T. ROWE PRICE SMALLCAP STOCK FUND, INC.

T. ROWE PRICE SMALLCAP VALUE FUND, INC.

T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Income Fund
Spectrum Growth Fund
Spectrum International Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE U.S. BOND INDEX FUND, INC.

T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury LongTerm Fund
U.S. Treasury Money Fund

T. ROWE PRICE VALUE FUND, INC.


L:\Lgl\Users\Lgl1124\WPDATA\AGRMNT\2004.RPS.ServiceAgreement.CLEAN.4-27-04.doc

AMENDMENT NO. 1

AGREEMENT

Between

T. ROWE PRICE RETIREMENT PLAN SERVICES, INC.

and

T. ROWE PRICE FUNDS

EACH OF THE PARTIES INDICATED ON APPENDIX A

The Retirement Plan Services Contract of January 1, 2004, between T. Rowe Price Retirement Plan Services, Inc. and each of the Parties listed on Appendix A thereto is hereby amended, as of February 4, 2004, by adding thereto T. Rowe Price Retirement Funds, Inc., on behalf of T. Rowe Price Retirement 2005 Fund, T. Rowe Price Retirement 2015 Fund, T. Rowe Price Retirement 2025 Fund, and T. Rowe Price Retirement 2035 Fund.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. Rowe Price Blue Chip Growth Fund--R Class

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND
T. Rowe Price Equity Income Fund--R Class

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.
T. Rowe Price Growth Stock Fund--R Class

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
T. Rowe Price Institutional Mid-Cap Equity Growth Fund
T. Rowe Price Institutional Large-Cap Value Fund
T. Rowe Price Institutional Small-Cap Stock Fund
T. Rowe Price Institutional Large-Cap Growth Fund
T. Rowe Price Institutional Large-Cap Core Growth Fund

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Foreign Equity Fund
T. Rowe Price Institutional Emerging Markets Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Stock Fund
T. Rowe Price International Stock Fund--R Class
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Growth & Income Fund--R Class
T. Rowe Price Emerging Europe & Mediterranean Fund
T. Rowe Price International Bond Fund
T. Rowe Price Emerging Markets Bond Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.



T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. Rowe Price Mid-Cap Growth Fund--R Class

T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. Rowe Price Mid-Cap Value Fund--R Class

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 New Income Fund--R Class

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RETIREMENT FUNDS, INC.
T. Rowe Price Retirement 2005 Fund
T. Rowe Price Retirement 2010 Fund
T. Rowe Price Retirement 2010 Fund--R Class
T. Rowe Price Retirement 2015 Fund
T. Rowe Price Retirement 2020 Fund
T. Rowe Price Retirement 2020 Fund--R Class
T. Rowe Price Retirement 2025 Fund
T. Rowe Price Retirement 2030 Fund
T. Rowe Price Retirement 2030 Fund--R Class
T. Rowe Price Retirement 2035 Fund
T. Rowe Price Retirement 2040 Fund
T. Rowe Price Retirement 2040 Fund--R Class
T. Rowe Price Retirement Income Fund
T. Rowe Price Retirement Income Fund--R Class

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.


T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Income Fund
Spectrum Growth Fund
Spectrum International Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE U.S. BOND INDEX 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 VALUE FUND, INC.

Attest:

/s/Patricia B. Lippert                      /s/Joseph A. Carrier
            BY:
Patricia B. Lippert                         By:      Joseph A. Carrier
Secretary                                            Treasurer


Attest:                                     T. ROWE PRICE RETIREMENT PLAN
                                            SERVICES, INC.

/s/Barbara A. Van Horn              /s/Henry H. Hopkins
            BY:
Barbara A. Van Horn                         By:      Henry H. Hopkins
Secretary                                            Vice President

AMENDMENT NO. 2

AGREEMENT

Between

T. ROWE PRICE RETIREMENT PLAN SERVICES, INC.

and

T. ROWE PRICE FUNDS

EACH OF THE PARTIES INDICATED ON APPENDIX A

The Retirement Plan Services Contract of January 1, 2004, between T. Rowe Price Retirement Plan Services, Inc. and each of the Parties listed on Appendix A thereto is hereby amended, as of February 4, 2004 and September 20, 2004, by adding thereto T. Rowe Price Institutional Income Funds, Inc., on behalf of T. Rowe Price Institutional Core Plus Fund.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. Rowe Price Blue Chip Growth Fund--R Class

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND
T. Rowe Price Equity Income Fund--R Class

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.
T. Rowe Price Growth Stock Fund--R Class

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
T. Rowe Price Institutional Mid-Cap Equity Growth Fund
T. Rowe Price Institutional Large-Cap Value Fund
T. Rowe Price Institutional Small-Cap Stock Fund
T. Rowe Price Institutional Large-Cap Growth Fund
T. Rowe Price Institutional Large-Cap Core Growth Fund

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional Core Plus Fund
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Foreign Equity Fund
T. Rowe Price Institutional Emerging Markets Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Stock Fund
T. Rowe Price International Stock Fund--R Class
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Growth & Income Fund--R Class
T. Rowe Price Emerging Europe & Mediterranean Fund
T. Rowe Price International Bond Fund
T. Rowe Price Emerging Markets Bond Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.



T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. Rowe Price Mid-Cap Growth Fund--R Class

T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. Rowe Price Mid-Cap Value Fund--R Class

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 New Income Fund--R Class

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RETIREMENT FUNDS, INC.
T. Rowe Price Retirement 2005 Fund
T. Rowe Price Retirement 2010 Fund
T. Rowe Price Retirement 2010 Fund--R Class
T. Rowe Price Retirement 2015 Fund
T. Rowe Price Retirement 2020 Fund
T. Rowe Price Retirement 2020 Fund--R Class
T. Rowe Price Retirement 2025 Fund
T. Rowe Price Retirement 2030 Fund
T. Rowe Price Retirement 2030 Fund--R Class
T. Rowe Price Retirement 2035 Fund
T. Rowe Price Retirement 2040 Fund
T. Rowe Price Retirement 2040 Fund--R Class
T. Rowe Price Retirement Income Fund
T. Rowe Price Retirement Income Fund--R Class

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.


T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Income Fund
Spectrum Growth Fund
Spectrum International Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE U.S. BOND INDEX 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 VALUE FUND, INC.

Attest:

/s/Patricia B. Lippert                      /s/Joseph A. Carrier
            BY:
Patricia B. Lippert                         By:      Joseph A. Carrier
Secretary                                            Treasurer


Attest:                                     T. ROWE PRICE RETIREMENT PLAN
                                            SERVICES, INC.

/s/Barbara A. Van Horn              /s/Henry H. Hopkins
            BY:
Barbara A. Van Horn                         By:      Henry H. Hopkins
Secretary                                            Vice President

AMENDMENT NO. 3

AGREEMENT

Between

T. ROWE PRICE RETIREMENT PLAN SERVICES, INC.

and

T. ROWE PRICE FUNDS

EACH OF THE PARTIES INDICATED ON APPENDIX A
The Retirement Plan Services Contract of January 1, 2004, between T. Rowe Price Retirement Plan Services, Inc. and each of the Parties listed on Appendix A thereto is hereby amended, as of February 4, 2004, September 20, 2004, and October 20, 2004 by adding thereto T. Rowe Price Capital Opportunity Fund, Inc., on behalf of T. Rowe Price Capital Opportunity Fund--R Class.

T. ROWE PRICE BALANCED FUND, INC.

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. Rowe Price Blue Chip Growth Fund--R Class

T. ROWE PRICE CAPITAL APPRECIATION FUND

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. Rowe Price Capital Opportunity Fund--R Class

T. ROWE PRICE CORPORATE INCOME FUND, INC.

T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.

T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.

T. ROWE PRICE DIVIDEND GROWTH FUND, INC.

T. ROWE PRICE EQUITY INCOME FUND
T. Rowe Price Equity Income Fund--R Class

T. ROWE PRICE FINANCIAL SERVICES FUND, INC.

T. ROWE PRICE GNMA FUND

T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.

T. ROWE PRICE GROWTH & INCOME FUND, INC.

T. ROWE PRICE GROWTH STOCK FUND, INC.
T. Rowe Price Growth Stock Fund--R Class

T. ROWE PRICE HEALTH SCIENCES FUND, INC.

T. ROWE PRICE HIGH YIELD FUND, INC.

T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.

T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund

T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
T. Rowe Price Institutional Mid-Cap Equity Growth Fund
T. Rowe Price Institutional Large-Cap Value Fund
T. Rowe Price Institutional Small-Cap Stock Fund
T. Rowe Price Institutional Large-Cap Growth Fund
T. Rowe Price Institutional Large-Cap Core Growth Fund

T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional Core Plus Fund
T. Rowe Price Institutional High Yield Fund

T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. Rowe Price Institutional Foreign Equity Fund
T. Rowe Price Institutional Emerging Markets Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Stock Fund
T. Rowe Price International Stock Fund--R Class
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Growth & Income Fund--R Class
T. Rowe Price Emerging Europe & Mediterranean Fund
T. Rowe Price International Bond Fund
T. Rowe Price Emerging Markets Bond Fund

T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. Rowe Price International Equity Index Fund

T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.



T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. Rowe Price Mid-Cap Growth Fund--R Class

T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. Rowe Price Mid-Cap Value Fund--R Class

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 New Income Fund--R Class

T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund

T. ROWE PRICE PRIME RESERVE FUND, INC.

T. ROWE PRICE REAL ESTATE FUND, INC.

T. ROWE PRICE RETIREMENT FUNDS, INC.
T. Rowe Price Retirement 2005 Fund
T. Rowe Price Retirement 2010 Fund
T. Rowe Price Retirement 2010 Fund--R Class
T. Rowe Price Retirement 2015 Fund
T. Rowe Price Retirement 2020 Fund
T. Rowe Price Retirement 2020 Fund--R Class
T. Rowe Price Retirement 2025 Fund
T. Rowe Price Retirement 2030 Fund
T. Rowe Price Retirement 2030 Fund--R Class
T. Rowe Price Retirement 2035 Fund
T. Rowe Price Retirement 2040 Fund
T. Rowe Price Retirement 2040 Fund--R Class
T. Rowe Price Retirement Income Fund
T. Rowe Price Retirement Income Fund--R Class

T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.

T. ROWE PRICE SHORT-TERM BOND FUND, INC.

T. ROWE PRICE SMALL-CAP STOCK FUND, INC.

T. ROWE PRICE SMALL-CAP VALUE FUND, INC.


T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Income Fund
Spectrum Growth Fund
Spectrum International Fund

T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit GNMA Fund

T. ROWE PRICE U.S. BOND INDEX 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 VALUE FUND, INC.

Attest:

/s/Patricia B. Lippert                      /s/Joseph A. Carrier
            BY:
Patricia B. Lippert                         By:      Joseph A. Carrier
Secretary                                            Treasurer


Attest:                                     T. ROWE PRICE RETIREMENT PLAN
                                            SERVICES, INC.

/s/Barbara A. Van Horn                          /s/Henry H. Hopkins
            BY:
Barbara A. Van Horn                         By:      Henry H. Hopkins
Secretary                                            Vice President

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Prospectuses and Statement of Additional Information in this Registration Statement on Form N-1A (the "Registration Statement") of our reports dated November 22, 2004, relating to the financial statements and financial highlights which appear in the October 31, 2004 Annual Reports to Shareholders of the T. Rowe Price International Stock Fund, T. Rowe Price International Stock Fund — Advisor Class, T. Rowe Price International Stock Fund — R Class, T. Rowe Price Emerging Europe & Mediterranean Fund, T. Rowe Price International Discovery Fund, T. Rowe Price European Stock Fund, T. Rowe Price New Asia Fund, T. Rowe Price Japan Fund, T. Rowe Price Latin America Fund, T. Rowe Price Emerging Markets Stock Fund, T. Rowe Price Global Stock Fund, T. Rowe Price International Growth & Income Fund, T. Rowe Price Growth & Income Fund — Advisor Class, and the T. Rowe Price Growth & Income — R Class (comprising T. Rowe Price International Funds, Inc.), which are also incorporated by reference into the Registration Statement. We also consent to the references to us under the heading "Financial Highlights" in the prospectuses and under the heading "Independent Registered Public Accounting Firm" in the Statement of Additional Information.

/s/PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Baltimore, MD

February 24, 2005

February 25, 2005

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: T. Rowe Price International Funds, Inc.
File Nos.: 002-65539/811-2958
Post-Effective Amendment No. 89

Commissioners:

We are counsel to the above-referenced registrant which proposes to file, pursuant to
paragraph (b) of Rule 485 (the "Rule"), the above-referenced Post-Effective Amendment (the "Amendment") to its registration statement under the Securities Act of 1933, as amended.

Pursuant to paragraph (b)(4) of the Rule, we represent that the Amendment does not contain
disclosures which would render it ineligible to become effective pursuant to paragraph (b) of the Rule.

Sincerely,

/s/Shearman & Sterling LLP

Shearman & Sterling LLP

T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.
T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.
T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE EQUITY SERIES, INC.
T. ROWE PRICE FINANCIAL SERVICES FUND, INC.
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.
T. ROWE PRICE GNMA FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE INDEX TRUST, INC.
T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.
T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. ROWE PRICE INTERNATIONAL INDEX FUND, INC.
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE REAL ESTATE FUND, INC.
T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. ROWE PRICE RETIREMENT FUNDS, INC.
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
T. ROWE PRICE SUMMIT FUNDS, INC.
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.

T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.
T. ROWE PRICE U.S. BOND INDEX FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
T. ROWE PRICE VALUE FUND, INC.

POWER OF ATTORNEY

RESOLVED, that the Corporation does hereby constitute and authorize James S. Riepe, Joel H. Goldberg and Henry H. Hopkins, and each of them individually, their true and lawful attorneys and agents to take any and all action and execute any and all instruments which said attorneys and agents may deem necessary or advisable to enable the Corporation/Trust to comply with the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, and any rules, regulations, orders or other requirements of the United States Securities and Exchange Commission thereunder, in connection with the registration under the Securities Act of 1933, as amended, of shares of the Corporation/Trust, to be offered by the Corporation/Trust, and the registration of the Corporation/Trust under the Investment Company Act of 1940, as amended, including specifically, but without limitation of the foregoing, power and authority to sign the name of the Corporation/Trust on its behalf, and to sign the names of each of such directors/trustees and officers on his behalf as such director/trustee or officer to any (i) Registration Statement on Form N-1A of the Corporation/Trust filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended; (ii) Registration Statement on Form N-1A of the Corporation/Trust under the Investment Company Act of 1940, as amended; (iii) amendment or supplement (including, but not limited to, Post-Effective Amendments adding additional series or classes of the Corporation/ Trust) to said Registration Statement; and (iv) instruments or documents filed or to be filed as a part of or in connection with such Registration Statement, including Articles Supplementary, Articles of Amendment, and other instruments with respect to the Articles of Incorporation or Master Trust Agreement of the Corporation/Trust.

IN WITNESS WHEREOF, the above named Corporations/Trusts have caused these presents to be signed and the same attested by its Secretary, each thereunto duly authorized by its Board of Directors/Trustees, and each of the undersigned has hereunto set his hand and seal as of the day set opposite his name.

ALL CORPORATIONS/TRUSTS
/s/James S. Riepe James S. Riepe	Chairman of the Board (Principal Executive Officer) Director/Trustee	April 21, 2004
/s/Joseph A. Carrier Joseph A. Carrier	Treasurer (Principal Financial Officer)	April 21, 2004
/s/Anthony W. Deering Anthony W. Deering	Director/Trustee	April 21, 2004
/s/Donald W. Dick, Jr. Donald W. Dick, Jr.	Director/Trustee	April 21, 2004
/s/David K. Fagin David K. Fagin	Director/Trustee	April 21, 2004
/s/Karen N. Horn Karen N. Horn	Director/Trustee	April 21, 2004
/s/F. Pierce Linaweaver F. Pierce Linaweaver	Director/Trustee	April 21, 2004
/s/John G. Schreiber John G. Schreiber	Director/Trustee	April 21, 2004

TRPPRODEDGAgreementsPower of AttorneyPOA.fm

Power of Attorney

April 21, 2004

Page 2

(Signatures Continued)

Power of Attorney

April 21, 2004

Page 3

TRPPRODEDGAgreementsPower of AttorneyPOA.fm

JAMES A.C. KENNEDY, Director/Trustee

T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.
T. ROWE PRICE DIVERSIFIED MID-CAP GROWTH FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE FINANCIAL SERVICES FUND, INC.
T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE INDEX TRUST, INC.
T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. ROWE PRICE REAL ESTATE FUND, INC.
T. ROWE PRICE RETIREMENT FUNDS, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. ROWE PRICE VALUE FUND, INC.

/s/James A.C. Kennedy
James A.C. Kennedy

April 21, 2004

(Signatures Continued)

TRPPRODEDGAgreementsPower of AttorneyPOA.fm

Power of Attorney

April 21, 2004

Page 4

JOHN H. LAPORTE, Director/Trustee

T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE EQUITY SERIES, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.

JOHN H. LAPORTE, President and Director

T. ROWE PRICE NEW HORIZONS FUND, INC.

JOHN H. LAPORTE, Vice President and Director

T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.

/s/John H. Laporte
John H. Laporte

April 21, 2004

(Signatures Continued)

Power of Attorney

April 21, 2004

Page 5

TRPPRODEDGAgreementsPower of AttorneyPOA.fm

MARY J. MILLER, Director

T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.
T. ROWE PRICE U.S. BOND INDEX FUND, INC.

MARY J. MILLER, President and Director/Trustee

T. ROWE PRICE CALFORNIA TAX-FREE INCOME TRUST
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.

MARY J. MILLER, Vice President and Director/Trustee

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. ROWE PRICE GNMA FUND
T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.

/s/Mary J. Miller
Mary J. Miller

April 21, 2004

(Signatures Continued)

TRPPRODEDGAgreementsPower of AttorneyPOA.fm

Power of Attorney

April 21, 2004

Page 6

ATTEST:

/s/Patricia B. Lippert
Patricia B. Lippert, Secretary

Power of Attorney

April 21, 2004

Page 7

TRPPRODEDGAgreementsPower of AttorneyPOA.fm

CERTIFICATE OF VICE PRESIDENT

T. ROWE PRICE INTERNATIONAL FUNDS, INC.

Pursuant to Rule 306 of Regulation S-T

I, the undersigned, Henry H. Hopkins, Vice President of T. Rowe Price International Funds, Inc., on behalf of its separate series T. Rowe Price International Stock Fund (the "Fund"), do hereby certify that the prospectus for the Fund has been translated into the Spanish language. The Spanish version of the prospectus constitutes a full and complete representation of the English version which has been filed as a part of this Registration Statement. A copy of the Spanish ver sion will be available for inspection upon request.

WITNESS my hand and the seal of the Fund this February 25, 2005.

T. Rowe Price International Funds, Inc., on behalf of the

T. Rowe Price International Stock Fund

(Seal) /s/Henry H. Hopkins

Henry H. Hopkins, Vice President

T. ROWE PRICE GROUP, INC.

STATEMENT OF POLICY

ON

SECURITIES TRANSACTIONS

BACKGROUND INFORMATION.

Legal Requirement. In accordance with the requirements of the Securities Exchange Act of 1934 (the "Exchange Act" ), the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Insider Trading and Securities Fraud Enforcement Act of 1988, and the various United Kingdom and other jurisdictions' laws and regulations, Price Group and the mutual funds ( "Price Funds" ) which its affiliates manage have adopted this Statement of Policy on Securities Transactions ("Statement").

Price Advisers' Fiduciary Position. As investment advisers, the Price Advisers are in a fiduciary position which requires them to act with an eye only to the benefit of their clients, avoiding those situations which might place, or appear to place, the interests of the Price Advisers or their officers, directors and employees in conflict with the interests of clients.

Purpose of Statement. The Statement was developed to help guide Price Group's employees and independent directors and the independent directors of the Price Funds and the T. Rowe Price Savings Bank ( "Savings Bank" ) in the conduct of their personal investments and to:

eliminate the possibility of a transaction occurring that the SEC or other regulatory bodies would view as illegal, such as Front Running (see definition below);

avoid situations where it might appear that Price Group or the Price Funds or any of their officers, directors, employees, or other personnel had personally benefited at the expense of a client or fund shareholder or taken inappropriate advantage of their fiduciary positions; and

prevent, as well as detect, the misuse of material, nonpublic information.

Those subject to the Code, including the independent directors of Price Group, the Price Funds and the Savings Bank, are urged to consider the reasons for the adoption of this Statement. Price Group's and the Price Funds' reputations could be adversely affected as the result of even a single transaction considered questionable in light of the fiduciary duties of the Price Advisers and the independent directors of the Price Funds.

Front Running. Front Running is illegal. It is generally defined as the purchase or sale of a security by an officer, director or employee of an investment adviser or mutual fund in anticipation of and prior to the adviser effecting similar transactions for its clients in order to take advantage of or avoid changes in market prices effected by client transactions.

QUESTIONS ABOUT THE STATEMENT. You are urged to seek the advice of the Chairperson of the Ethics Committee (U.S.-based personnel) or the TRP International Compliance Team (International personnel) when you have questions as to the application of this Statement to individual circumstances.

EXCESSIVE TRADING AND MARKET TIMING OF MUTUAL FUND SHARES. The issue of excessive trading and market timing by mutual fund shareholders is a serious one and is not unique to T. Rowe Price. Employees may not engage in trading of shares of a Price Fund that is inconsistent with the prospectus of that Fund.

Excessive or short-term trading in fund shares may disrupt management of a fund and raise its costs. The Board of Directors/Trustees of the Price Funds have adopted a policy to deter excessive and short-term trading (the "Policy" ), which applies to persons trading directly with T. Rowe Price and indirectly through intermediaries. Under this Policy, T. Rowe Price may bar excessive and short-term traders from purchasing shares.

This Policy is set forth in each Fund's prospectus, which governs all trading activity in the Fund regardless of whether you are holding T. Rowe Price Fund shares as a retail investor or through your T. Rowe Price U.S. Retirement Program account.

Although the Fund may issue a warning letter regarding excessive trading or market timing, any trade activity in violation of the Policy will also be reviewed by the Chief Compliance Officer, who will refer instances to the Ethics Committee as he or she feels appropriate. The Ethics Committee, based on its review, may take disciplinary action, including suspension of trading privileges, forfeiture of profits or the amount of losses avoided, and termination of employment, as it deems appropriate.

Employees are also expected to abide by trading restrictions imposed by other funds as described in their prospectuses. If you violate the trading restrictions of a non-Price Fund, the Ethics Committee may impose the same penalties available for violation of the Price Funds excessive trading Policy.

PERSONS SUBJECT TO STATEMENT. The provisions of this Statement apply as described below to the following persons and entities. Each person and entity (except the independent directors of Price Group and the Savings Bank) is classified as either an Access Person or a Non-Access Person as described below. The provisions of this Statement may also apply to an Access Person's or Non-Access Person's spouse, minor children, and certain other relatives, as further described on page 4-5 of this Statement. All Access Persons except the independent directors of the Price Funds are subject to all provisions of this Statement except certain restrictions on purchases in initial public offerings that apply only to Investment Personnel. The independent directors of the Price Funds are not subject to prior transaction clearance requirements and are subject to modified reporting as described on p. 4-22. Non-Access Persons are subject to the general principles of the Statement and its reporting requirements, but are only required to receive prior transaction clearance for transactions in Price Group stock. The persons and entities covered by this Statement are:

Price Group.

Employee Partnerships.

Personnel.

Certain Temporary Workers.

All temporary workers hired on the Price Group payroll ("TRP Temporaries");

All agency temporaries whose assignments at Price Group exceed four weeks or whose cumulative assignments exceed eight weeks over a twelve-month period;

All independent or agency-provided consultants whose assignments exceed four weeks or whose cumulative assignments exceed eight weeks over a twelve-month period and whose work is closely related to the ongoing work of Price Group's employees (versus project work that stands apart from ongoing work); and

Any contingent worker whose assignment is more than casual in nature or who will be exposed to the kinds of information and situations that would create conflicts on matters covered in the Code.

Retired Employees. Retired employees of Price Group who receive investment research information from one or more of the Price Advisers will be subject to this Statement.

Independent Directors of Price Group, the Savings Bank and the Price Funds. The independent directors of Price Group include those directors of Price Group who are neither officers nor employees of Price Group or any of its subsidiaries or affiliates. The independent directors of the Savings Bank include those directors of the Savings Bank who are neither officers nor employees of Price Group or any of its subsidiaries or affiliates. The independent directors of the Price Funds include those directors of the Price Funds who are not deemed to be "interested persons" of Price Group.

Although subject to the general principles of this Statement, including the definition of "beneficial ownership," independent directors are subject only to modified reporting requirements. See pp. 4-22 to 4-25. The trades of the independent directors of the Price Funds are not subject to prior transaction clearance requirements. The trades of the independent directors of Price Group and of the Savings Bank are not subject to prior transaction clearance requirements except for transactions in Price Group stock.

ACCESS PERSONS. Certain persons and entities are classified as "Access Persons" under the Code. The term "Access Person" means:

the Price Advisers;

any officer or director of any of the Price Advisers or the Price Funds (except the independent directors of the Price Funds are not subject to prior transaction clearance and have modified reporting requirements, as described below);

any person associated with any of the Price Advisers or the Price Funds who, in connection with his or her regular functions or duties, makes, participates in, or obtains or has access to non-public information regarding the purchase or sale of securities by a Price Fund or other advisory client, or to non-public information regarding any securities holdings of any client of a Price Adviser, including the Price Funds, or whose functions relate to the making of any recommendations with respect to the purchases or sales; or

any person in a control relationship to any of the Price Advisers or a Price Fund who obtains or has access to information concerning recommendations made to a Price Fund or other advisory client with regard to the purchase or sale of securities by the Price Fund or advisory client.

All Access Persons are notified of their status under the Code. Although a person can be an Access Person of one or more Price Advisers and one or more of the Price Funds, the independent directors of the Price Funds are only Access Persons of the applicable Price Funds; they are not Access Persons of any of the Price Advisers.

Investment Personnel. An Access Person is further identified as "Investment Personnel" if, in connection with his or her regular functions or duties, he or she "makes or participates in making recommendations regarding the purchase or sale of securities" by a Price Fund or other advisory client.

The term "Investment Personnel" includes, but is not limited to:

those employees who are authorized to make investment decisions or to recommend securities transactions on behalf of the firm's clients (investment counselors and members of the mutual fund advisory committees);

research and credit analysts; and

traders who assist in the investment process.

All Investment Personnel are deemed Access Persons under the Code. All Investment Personnel are notified of their status under the Code. Investment Personnel are prohibited from investing in initial public offerings. See pp. 4-14; 4-16.

NON-ACCESS PERSONS. Persons who do not fall within the definition of Access Persons are deemed "Non-Access Persons." If a Non-Access Person is married to an Access Person, then the non-Access Person is deemed to be an Access Person under the beneficial ownership provisions described below. However, the independent directors of Price Group and the Savings Bank are not included in this definition.

TRANSACTIONS SUBJECT TO STATEMENT. Except as provided below, the provisions of this Statement apply to transactions that fall under either one of the following two conditions:

First , you are a "beneficial owner" of the security under the Rule 16a-1 of the Exchange Act, as defined below; or

Second , if you control or direct securities trading for another person or entity, those trades are subject to this Statement even if you are not a beneficial owner of the securities. For example, if you have an exercisable trading authorization ( e.g. , a power of attorney to direct transactions in another person's account) of an unrelated person's or entity's brokerage account, or are directing another person's or entity's trades, those transactions will usually be subject to this Statement to the same extent your personal trades would be as described below.

Definition of Beneficial Owner. A "beneficial owner" is any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares in the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the security.

A person has beneficial ownership in:

securities held by members of the person's immediate family sharing the same household , although the presumption of beneficial ownership may be rebutted;

a person's interest in securities held by a trust, which may include both trustees with investment control and, in some instances, trust beneficiaries;

a person's right to acquire securities through the exercise or conversion of any derivative security, whether or not presently exercisable;

a general partner's proportionate interest in the portfolio securities held by a general or limited partnership;

certain performance-related fees other than an asset-based fee, received by any broker, dealer, bank, insurance company, investment company, investment adviser, investment manager, trustee or person or entity performing a similar function; and

a person's right to dividends that is separated or separable from the underlying securities. Otherwise, right to dividends alone shall not represent beneficial ownership in the securities.

A shareholder shall not be deemed to have beneficial ownership in the portfolio securities held by a corporation or similar entity in which the person owns securities if the shareholder is not a controlling shareholder of the entity and does not have or share investment control over the entity's portfolio.

Requests for Clarifications or Interpretations Regarding Beneficial Ownership or Control. If you have beneficial ownership of a security, any transaction involving that security is presumed to be subject to the relevant requirements of this Statement, unless you have no direct or indirect influence or control over the transaction. Such a situation may arise, for example, if you have delegated investment authority to an independent investment adviser or your spouse has an independent trading program in which you have no input. Similarly, if your spouse has investment control over, but no beneficial ownership in, an unrelated account, the Statement may not apply to those securities and you may wish to seek clarification or an interpretation.

If you are involved in an investment account for a family situation, trust, partnership, corporation, etc., which you feel should not be subject to the Statement's relevant prior transaction clearance and/or reporting requirements, you should submit a written request for clarification or interpretation to either the Code Compliance Section or the TRP International Compliance Team, as appropriate. Any such request for clarification or interpretation should name the account, your interest in the account, the persons or firms responsible for its management, and the specific facts of the situation. Do not assume that the Statement is not applicable; you must receive a clarification or interpretation about the applicability of the Statement. Clarifications and interpretations are not self-executing; you must receive a response to a request for clarification or interpretation directly from the Code Compliance Section or the TRP International Compliance Team before proceeding with the transaction or other action covered by this Statement.

PRIOR TRANSACTION CLEARANCE REQUIREMENTS GENERALLY. As described, certain transactions require prior clearance before execution. Receiving prior transaction clearance does not relieve you from conducting your personal securities transactions in full compliance with the Code, including its prohibition on trading while in possession of material, inside information, and with applicable law, including the prohibition on Front Running ( see page 4-1 for definition of Front Running).

TRANSACTIONS IN STOCK OF PRICE GROUP. Because Price Group is a public company, ownership of its stock subjects its officers, inside and independent directors, employees and all others subject to the Code to special legal requirements under the United States securities laws. You are responsible for your own compliance with these requirements. In connection with these legal requirements, Price Group has adopted the following rules and procedures:

Independent Directors of Price Funds.

Quarterly Earnings Report.

Prior Transaction Clearance of Price Group Stock Transactions Generally.

("ESPP")

Prior Transaction Clearance Procedures for Price Group Stock.

Prohibition Regarding Transactions in Publicly-Traded Price Group Options.

Prohibition Regarding Short Sales of Price Group Stock.

Applicability of 60-Day Rule to Price Group Stock Transactions.

through

see

Gifts of Price Group stock, although subject to prior transaction clearance, are also not subject to this Rule.

See

does

Access Persons and Non-Access Persons and the independent directors of Price Group and the Savings Bank must obtain prior transaction clearance of any transaction involving Price Group stock from the Finance and Corporate Tax Department.

Initial Disclosure of Holdings of Price Group Stock.

Dividend Reinvestment Plans for Price Group Stock.

e.g.

Effectiveness of Prior Clearance.

Reporting of Disposition of Proposed Transaction.

Insider Reporting and Liability.

("Insiders")

SEC Reporting.

Form 3. The initial ownership report by an Insider is required to be filed on Form 3. This report must be filed within ten days after a person becomes an Insider ( i.e. , is elected as a director or appointed as an executive officer) to report all current holdings of Price Group stock. Following the election or appointment of an Insider, the Finance and Corporate Tax Department will deliver to the Insider a Form 3 for appropriate signatures and will file the form electronically with the SEC.

Form 4. Any change in the Insider's ownership of Price Group stock must be reported on a Form 4 unless eligible for deferred reporting on year-end Form 5. The Form 4 must be filed electronically before the end of the second business day following the day on which a transaction resulting in a change in beneficial ownership has been executed. Following receipt of the Notice of Disposition of the proposed transaction, the Finance and Corporate Tax Department will deliver to the Insider a Form 4, as applicable, for appropriate signatures and will file the form electronically with the SEC.

Form 5. Any transaction or holding that is exempt from reporting on Form 4, such as small purchases of stock, gifts, etc. may be reported electronically on a deferred basis on Form 5 within 45 calendar days after the end of the calendar year in which the transaction occurred. No Form 5 is necessary if all transactions and holdings were previously reported on Form 4.

Liability for ShortSwing Profits. Under the United States securities laws, profit realized by certain officers, as well as directors and 10% stockholders of a company (including Price Group) as a result of a purchase and sale (or sale and purchase) of stock of the company within a period of less than six months must be returned to the firm or its designated payee upon request.

Office of Thrift Supervision ("OTS") Reporting.

PRIOR TRANSACTION CLEARANCE REQUIREMENTS (OTHER THAN PRICE GROUP STOCK) FOR ACCESS PERSONS.

Access Persons other than the independent directors of the Price Funds must, unless otherwise provided for below, obtain prior transaction clearance before directly or indirectly initiating, recommending, or in any way participating in, the purchase or sale of a security in which the Access Person has, or by reason of such transaction may acquire, any beneficial interest or which he or she controls. This includes the writing of an option to purchase or sell a security and the acquisition of any shares in an Automatic Investment Plan through a non-systematic investment ( see p. 4-11). Non-Access Persons are not required to obtain prior clearance before engaging in any securities transactions, except for transactions in Price Group stock.

Where required, prior transaction clearance must be obtained regardless of whether the transaction is effected through TRP Brokerage (generally available only to U.S. residents) or through an unaffiliated broker/dealer or other entity. Please note that the prior clearance procedures do not check compliance with the 60-Day Rule (p. 4-30); you are responsible for ensuring your compliance with this rule.

The independent directors of the Price Funds are not required to received prior transaction clearance in any case.

TRANSACTIONS (OTHER THAN IN PRICE GROUP STOCK) THAT DO NOT REQUIRE EITHER PRIOR TRANSACTION CLEARANCE OR REPORTING UNLESS THEY OCCUR IN A "REPORTABLE FUND." The following transactions do not require either prior transaction clearance or reporting:

Mutual Funds and Variable Insurance Products. The purchase or redemption of shares of any open-end investment companies and variable insurance products, except that Access Persons must report transactions in Reportable Funds, as described below. ( see p. 4-11).

Automatic Investment Plans. Transactions through a program in which regular periodic purchases or withdrawals are made automatically in or from investment accounts in accordance with a predetermined schedule and allocation. An automatic investment plan includes a dividend reinvestment plan. An Access Person must report any securities owned as a result of transactions in an Automatic Investment Plan on his or her Annual Report. Any transaction that overrides the pre-set schedule or allocations of an automatic investment plan (a "non-systematic transaction" ) must be reported by both Access Persons and Non-Access Persons and Access Persons must also receive prior transaction clearance for such a transaction if the transaction would otherwise require prior transaction clearance.

U.S. Government Obligations. Purchases or sales of direct obligations of the U.S. Government.

Certain Commodity Futures Contracts. Purchases or sales of commodity futures contracts for tangible goods ( e.g. , corn, soybeans, wheat) if the transaction is regulated solely by the United States Commodity Futures Trading Commission ("CFTC") . Futures contracts for financial instruments, however, must receive prior clearance.

Commercial Paper and Similar Instruments. Bankers' acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements.

Certain Unit Investment Trusts. Shares issued by unit investment trusts that are invested exclusively in one or more open-end funds, if none of the underlying funds is a Reportable Fund.

TRANSACTIONS (OTHER THAN PRICE GROUP STOCK) THAT DO NOT REQUIRE PRIOR TRANSACTION CLEARANCE BUT MUST BE REPORTED BY BOTH ACCESS PERSONS AND NON-ACCESS PERSONS

Unit Investment Trusts. Purchases or sales of shares in unit investment trusts registered under the Investment Company Act of 1940. ("Investment Company Act") , including such unit investment trusts as DIAMONDS ("DIA") , SPYDER ("SPY") and NASDAQ-100 Index Tracking Stock ("QQQQ") unless exempted above.

National Government Obligations (other than U.S.). Purchases or sales of direct obligations of national (non-U.S.) governments.

Pro Rata Distributions. Purchases effected by the exercise of rights issued pro rata to all holders of a class of securities or the sale of rights so received.

Mandatory Tenders. Purchases and sales of securities pursuant to a mandatory tender offer.

Exercise of Stock Option of Corporate Employer by Spouse. Transactions involving the exercise by an Access Person's spouse of a stock option issued by the corporation employing the spouse. However, a subsequent sale of the stock obtained by means of the exercise, including sales effected by a "cash-less" transactions, must receive prior transaction clearance.

Inheritances. The acquisition of securities through inheritance.

Gifts. The giving of or receipt of a security as a gift.

Stock Splits, Reverse Stock Splits, and Similar Acquisitions and Dispositions. The acquisition of additional shares or the disposition of existing corporate holdings through stock splits, reverse stock splits, stock dividends, exercise of rights, exchange or conversion. Reporting of such transactions must be made within 30 days of the end of the quarter in which they occurred.

Spousal Employee-Sponsored Payroll Deduction Plans. Purchases, but not sales, by an Access Person's spouse pursuant to an employee-sponsored payroll deduction plan ( e.g. , a 401(k) plan or employee stock purchase plan), provided the Code Compliance Section (U.S.-based personnel) or the TRP International Compliance Team (International personnel) has been previously notified by the Access Person that the spouse will be participating in the payroll deduction plan. Reporting of such transactions must be made within 30 days of the end of the quarter in which they occurred. A sale or exchange of stock held in such a plan is subject to the prior transaction clearance requirements for Access Persons.

TRANSACTIONS (OTHER THAN PRICE GROUP STOCK) THAT DO NOT REQUIRE PRIOR TRANSACTION CLEARANCE BUT MUST BE REPORTED BY ACCESS PERSONS ONLY.

Reportable Funds. Purchases and sales of shares of Reportable Funds. A Reportable Fund is any open-end investment company, including money market funds, for which any of the Price Advisers serves as an investment adviser. This includes not only the Price Funds and SICAVs, but also any fund managed by any of the Price Advisers through sub-advised relationships, including any fund holdings offered through retirement plans ( e.g. , 401(k) plans) or as an investment option offered as part of a variable annuity. Group Compliance maintains a listing of sub-advised Reportable Funds on the firm's intranet at Corporate/Legal/Code of Ethics, Employee Compliance Forms and iTrade/Sub Advised Reportable Funds.

Restrictions on Holding Price Funds Through Intermediaries. Many Reportable Funds are Price Funds. Access Persons are encouraged to buy, sell and maintain their holdings of Price Funds in an account or accounts on a T. Rowe Price platform, rather than through an intermediary where possible. For example, Access Persons are encouraged to trade shares in a Price Fund through T. Rowe Price Services, Inc, the transfer agent or through a TRP Brokerage account, rather than through a brokerage account maintained at an independent broker/dealer.

Access Persons are prohibited from purchasing a Price Fund through an intermediary if shares of that Price Fund are not currently held at that intermediary and if the purchase could have been effected through one of the T. Rowe Price transfer agents or in a TRP Brokerage Account. If an Access Person currently holds Price Funds under such circumstances, he or she is prohibited from purchasing shares of any other Price Fund through that intermediary. Situations where Price Funds must be held through an intermediary ( e.g. , spouse of an Access Person has or is eligible to invest in Price Funds through the spouse's 401(k) plan) do not violate this policy.

Access Persons must inform the Code Compliance Section about ownership of shares of Price Funds. Once this notification has been given, if the Price Fund is held on a T. Rowe Price platform or in a TRP Brokerage Account, the Access Person need not report these transactions directly. See p. 4-21.

In instances where Price Funds are held through an intermediary, transactions in shares of those Price Funds must be reported as described on p. 4-21.

Interests in Section 529 College Investment Plans. Purchases and sales of interests in any Section 529 College Investment Plan. Access Persons must also inform the Code Compliance Section about ownership of interests in the Maryland College Investment Plan, the T. Rowe Price College Savings Plan, the University of Alaska College Savings Plan, or the John Hancock Freedom 529. Once this notification has been given, an Access Person need not report these transactions directly. See p. 4-21.

Notification Requirements. Notification to the Code Compliance Section about a Reportable Fund or a Section 529 College Investment Plan should include:

account ownership information, and

account number

The independent directors of the Price Funds are subject to modified reporting requirements.

The Chief Compliance Officer or his or her designee reviews at a minimum the transaction reports for all securities required to be reported under the Advisers Act or the Investment Company Act for all employees, officers, and inside directors of Price Group and its affiliates and for the independent directors of the Price Funds.

TRANSACTIONS (OTHER THAN PRICE GROUP STOCK) THAT REQUIRE PRIOR TRANSACTION CLEARANCE BY ACCESS PERSONS. If the transaction or security is not listed above as not requiring prior transaction clearance, you should assume that it is subject to this requirement unless specifically informed otherwise by the Code Compliance Section or the TRP International Compliance Team. The only Access Persons not subject to the prior transaction clearance requirements are the independent directors of the Price Funds.

Among the transactions that must receive prior transaction clearance are:

Non-systematic transactions in a security that is not exempt from prior transaction clearance;

Closed-end fund transactions, including U.K. investment trusts and Exchange Traded Funds ("ETFs") ( e.g. , iShares, Cubes) unless organized as unit investment trusts under the Investment Company Act; and

Transactions in sector index funds that are closed-end funds.

OTHER TRANSACTION REPORTING REQUIREMENTS. Any transaction that is subject to the prior transaction clearance requirements on behalf of an Access Person (except the independent directors of the Price Funds), including purchases in initial public offerings and private placement transactions , must be reported. Although Non-Access Persons are not required to receive prior transaction clearance for securities transactions (other than Price Group stock), they must report any transaction that would require prior transaction clearance by an Access Person. The independent directors of Price Group, the Price Funds and the Savings Bank are subject to modified reporting requirements.

PROCEDURES FOR OBTAINING PRIOR TRANSACTION CLEARANCE (OTHER THAN PRICE GROUP STOCK) FOR ACCESS PERSONS. Unless prior transaction clearance is not required as described above or the Chairperson of the Ethics Committee or his or her designee has otherwise determined that prior transaction clearance is not required, Access Persons, other than the independent directors of the Price Funds, must receive prior transaction clearance for all securities transactions.

Access Persons should follow the procedures set forth below, depending upon their location, before engaging in the transactions described. If an Access Person is not certain whether a proposed transaction is subject to the prior transaction clearance requirements, he or she should contact the Code Compliance Section or the TRP International Compliance Team, as appropriate, before proceeding.

For U.S. — Based Access Persons:

Procedures For Obtaining Prior Transaction Clearance For Initial Public Offerings ("IPOs"):

Non-Investment Personnel. Access Persons who are not Investment Personnel ("Non-Investment Personnel") may purchase securities that are the subject of an IPO only after receiving prior transaction clearance in writing from the Chairperson of the Ethics Committee or his or her designee ("Designee") . An IPO would include, for example, an offering of securities registered under the Securities Act of 1933 when the issuer of the securities, immediately before the registration, was not subject to certain reporting requirements of the Exchange Act.

In considering such a request for prior transaction clearance, the Chairperson or his or her Designee will determine whether the proposed transaction presents a conflict of interest with any of the firm’s clients or otherwise violates the Code. The Chairperson or his or her Designee will also consider whether:

1. The purchase is made through the Non-Investment Personnel's regular broker;

2. The number of shares to be purchased is commensurate with the normal size and activity of the Non-Investment Personnel's account; and

3. The transaction otherwise meets the requirements of the NASD restrictions, as applicable, regarding the sale of a new issue to an account in which a "restricted person," as defined in NASD Rule 2790, has a beneficial interest.

In addition to receiving prior transaction clearance from the Chairperson of the Ethics Committee or his or her Designee, Non-Investment Personnel must also check with the Equity Trading Desk the day the offering is priced before purchasing in the IPO. If a client order has been received since the initial prior transaction approval was given, the prior transaction clearance will be withdrawn.

Non-Investment Personnel will not be permitted to purchase shares in an IPO if any of the firm's clients are prohibited from doing so because of affiliated transaction restrictions. This prohibition will remain in effect until the firm's clients have had the opportunity to purchase in the secondary market once the underwriting is completed -- commonly referred to as the aftermarket. The 60-Day Rule applies to transactions in securities purchased in an IPO.

Investment Personnel. Investment Personnel may not purchase securities in an IPO.

Non-Access Persons. Although Non-Access Persons are not required to receive prior transaction clearance before purchasing shares in an IPO, any Non-Access Person who is a registered representative or associated person of Investment Services is reminded that NASD Rule 2790 may restrict his or her ability to buy shares in a new issue.

Procedures For Obtaining Prior Transaction Clearance For Private Placements. Access Persons may not invest in a private placement of securities, including the purchase of limited partnership interests, unless prior transaction clearance in writing has been obtained from the Chairperson of the Ethics Committee or his or her Designee. A private placement is generally defined by the SEC as an offering that is exempt from registration under the Securities Act. Private placement investments generally require the investor to complete a written questionnaire or subscription agreement. If an Access Person has any questions about whether a transaction is, in fact, a private placement, he or she should contact the Chairperson of the Ethics Committee or his or her designee.

In considering a request for prior transaction clearance for a private placement, the Chairperson will determine whether the investment opportunity (private placement) should be reserved for the firm's clients, and whether the opportunity is being offered to the Access Person by virtue of his or her position with the firm. The Chairperson will also secure, if appropriate, the approval of the proposed transaction from the chairperson of the applicable investment steering committee. These investments may also have special reporting requirements, as discussed under "Procedures for Reporting Transactions," at p. 4-20.

Continuing Obligation. An Access Person who has received prior transaction clearance to invest and does invest in a private placement of securities and who, at a later date, anticipates participating in the firm's investment decision process regarding the purchase or sale of securities of the issuer of that private placement on behalf of any client, must immediately disclose his or her prior investment in the private placement to the Chairperson of the Ethics Committee and to the chairperson of the appropriate investment steering committee.

Registered representatives of Investment Services are reminded that NASD rules may restrict investment in a private placement in certain circumstances.

Procedures For Obtaining Prior Transaction Clearance For All Other Securities Transactions. Requests for prior transaction clearance by Access Persons for all other securities transactions requiring prior transaction clearance should generally be made via iTrade on the firm's intranet. The iTrade system automatically sends any request for prior transaction approval that requires manual intervention to the Equity Trading Department. If iTrade is not available, requests may be made orally, in writing, or by electronic mail (email address "Personal Trades" in the electronic mail address book). Obtaining clearance by electronic mail if iTrade is not available is strongly encouraged. All requests must include the name of the security, a definitive security identifier ( e.g. , CUSIP, ticker, or Sedol), the number of shares or amount of bond involved, and the nature of the transaction, i.e. , whether the transaction is a purchase, sale, short sale, or buy to cover. Responses to all requests will be made by iTrade or the Equity Trading Department, documenting the request and whether or not prior transaction clearance has been granted. The Examiner system maintains the record of all approval and denials, whether automatic or manual.

Requests will normally be processed on the same day; however, additional time may be required for prior transaction clearance for certain securities, including non-U.S. securities.

Effectiveness of Prior Transaction Clearance. Prior transaction clearance of a securities transaction is effective for three (3) business days from and including the date the clearance is granted, regardless of the time of day when clearance is granted. If the proposed securities transaction is not executed within this time, a new clearance must be obtained. For example, if prior transaction clearance is granted at 2:00 pm Monday, the trade must be executed by Wednesday. In situations where it appears that the trade will not be executed within three business days even if the order is entered in that time period ( e.g. , certain transactions through Transfer Agents or spousal employee-sponsored payroll deduction plans), please notify the Code Compliance Section before entering the order.

Reminder. If you are an Access Person and become the beneficial owner of another's securities ( e.g. , by marriage to the owner of the securities) or begin to direct trading of another's securities, then transactions in those securities also become subject to the prior transaction clearance requirements. You must also report acquisition of beneficial ownership or control of these securities within 10 business days of your knowledge of their existence.

For International Access Persons:

Procedures for Obtaining Prior Transaction Clearance for Initial Public Offerings ("IPOs"):

The TRP International Compliance Team will determine whether the proposed transaction presents a conflict of interest with any of the firm's clients or otherwise violates the Code. The Team will also consider whether:

1. The purchase is made through the Non-Investment Personnel’s regular broker;

2. The number of shares to be purchased is commensurate with the normal size and activity of the Non-Investment Personnel's account; and

3. The transaction otherwise meets the requirements of the NASD's restrictions regarding the sale of a new issue to an account in which a "restricted person," as defined in NASD Rule 2790, has a beneficial interest, if this is applicable.

In addition to receiving prior transaction clearance from the TRP International Compliance Team, Non-Investment Personnel must also check with the T. Rowe Price International Compliance Team the day the offering is priced before purchasing in the IPO. The T. Rowe Price International Compliance Team will contact the London Dealing Desk to confirm that no client order has been received since the initial prior transaction approval was given. If a client order has been received, the prior transaction clearance will be withdrawn.

Investment Personnel. Investment Personnel may not purchase securities in an IPO.

Procedures for Obtaining Prior Transaction Clearance for Private Placements. Prior transaction clearance to invest in or sell securities through a private placement of securities, including the purchase of limited partnership interests, must be sought from the TRP International Compliance Team in the usual manner. The prior transaction clearance process will include a review by a member of the Investment Team to determine whether the investment opportunity (private placement) should be reserved for the firm's clients and whether the opportunity is being offered to the Access Person by virtue of his or her position with the firm, as well as approval by a member of the Ethics Committee. These investments may also have special reporting requirements, as discussed under "Procedures for Reporting Transactions" at p. 4-20.

Continuing Obligation.

Registered representatives of Investment Services are reminded that NASD rules may restrict investment in a private placement in certain circumstances.

Procedures For Obtaining Prior Transaction Clearance For All Other Securities Transactions. Requests for prior transaction clearance by Access Persons for all other securities transactions requiring prior transaction clearance should generally be made via iTrade on the firm's intranet. The iTrade system automatically sends any request for prior transaction approval that requires manual intervention to the TRP International Compliance Team. If iTrade is not available, requests may be made orally, in writing, or by electronic mail (email address "TRPI Compliance" in the electronic mail address book). Obtaining clearance by electronic mail if iTrade is not available is strongly encouraged. All requests must include the name of the security, a definitive security identifier ( e.g. , CUSIP, ticker, or SEDOL), the number of shares or amount of bond involved, and the nature of the transaction, i.e. , whether the transaction is a purchase, sale, short sale or buy to cover. Responses to all requests will be made by iTrade or the TRP International Compliance Team, documenting the request and whether or not prior transaction clearance has been granted. The Examiner system maintains the record of all approvals and denials, whether automatic or manual.

Requests will normally be processed on the same day they are received; however, additional time may be required in certain circumstances ( e.g. , to allow checks to be made with overseas offices as necessary).

Effectiveness of Prior Transaction Clearance. Prior transaction clearance of a securities transaction, whether obtained via iTrade or from the TRP International Compliance Team, is effective for three (3) business days from and including the date the clearance is granted. If the proposed securities transaction is not executed within this time, a new clearance must be obtained. For example, if prior transaction clearance is granted at 2:00 pm Monday, the trade must be executed by Wednesday. In situations where it appears that the trade will not be executed within three business days even if the order is entered in that time period ( e.g. , an Individual Savings Account), please notify the TRP International Compliance Team before entering the order.

REASONS FOR DISALLOWING ANY PROPOSED TRANSACTION. Prior transaction clearance will usually not be granted for a proposed transaction by the Trading Department, either directly or by iTrade, and/or by the Chairperson of the Ethics Committee or by the TRP International Compliance Team if:

Pending Client Orders. Orders have been placed by any of the Price Advisers to purchase or sell the security unless certain size or volume parameters as described below under "Large Issuer/Volume Transactions" are met.

Purchases and Sales Within Seven (7) Calendar Days. The security has been purchased or sold by any client of a Price Adviser within seven calendar days immediately prior to the date of the proposed transaction, unless certain size or volume parameters as described below under "Large Issuer/Volume Transactions" are met.

For example, if a client transaction occurs on Monday, prior transaction clearance is not generally granted to an Access Person to purchase or sell that security until Tuesday of the following week. Transactions in securities in pure as opposed to enhanced index funds are not considered for this purpose.

If all clients have eliminated their holdings in a particular security, the sevenday restriction is not applicable to an Access Person's transactions in that security.

Approved Company Rating Changes. A change in the rating of an approved company as reported in the firm's Daily Research News has occurred within seven (7) calendar days immediately prior to the date of the proposed transaction. Accordingly, trading would not be permitted until the eighth (8) calendar day.

Securities Subject to Internal Trading Restrictions. The security is limited or restricted by any of the Price Advisers as to purchase or sale by Access Persons.

If for any reason an Access Person has not received a requested prior transaction clearance for a proposed securities transaction, he or she must not communicate this information to another person and must not cause any other person to enter into such a transaction.

Requests for Reconsideration of Prior Transaction Clearance Denials. If an Access Person has not been granted a requested prior transaction clearance, he or she may apply to the Chairperson of the Ethics Committee or his or her designee for reconsideration. Such a request must be in writing and must fully describe the basis upon which the reconsideration is being requested. As part of the reconsideration process, the Chairperson or his or her designee will determine if any client of any of the Price Advisers may be disadvantaged by the proposed transaction by the Access Person. The factors the Chairperson or his or her designee may consider in making this determination include:

the size of the proposed transaction;

the nature of the proposed transaction ( i.e. , buy or sell) and of any recent, current or pending client transactions;

the trading volume of the security that is the subject of the proposed Access Person transaction;

the existence of any current or pending order in the security for any client of a Price Adviser;

the reason the Access Person wants to trade ( e.g. , to provide funds for the purchase of a home); and

the number of times the Access Person has requested prior transaction clearance for the proposed trade and the amount of time elapsed between each prior transaction clearance request

TRANSACTION CONFIRMATIONS AND PERIODIC ACCOUNT STATEMENTS. All Access Persons (except the independent directors of the Price Funds) and Non-Access Persons must request brokerdealers, investment advisers, banks, or other financial institutions executing their transactions to send a duplicate confirmation or contract note with respect to each and every reportable transaction, including Price Group stock, and a copy of all periodic statements for all securities accounts in which the Access Person or Non-Access Person is considered to have beneficial ownership and/or control ( see page 4-4 for a discussion of beneficial ownership and control concepts) as follows:

U.S.-based personnel should have this information sent to the attention of Compliance, Legal Department, T. Rowe Price, P.O. Box 17218, Baltimore, Maryland 21297-1218.

International personnel should have this information sent to the attention of the TRP International Compliance Team, T. Rowe Price International, Inc., 60 Queen Victoria Street, London EC4N 4TZ United Kingdom.

The independent directors of Price Group, the Price Funds, and the Savings Bank are subject to modified reporting requirements described at pp. 4-22 to 4-25.

If transaction or statement information is provided in a language other than English, the employee should provide a translation into English of the documents.

NOTIFICATION OF SECURITIES ACCOUNTS. Access Persons (except the independent directors of the Price Funds) and Non-Access Persons must give notice before opening or trading in a securities account with any broker, dealer, investment adviser, bank, or other financial institution, including TRP Brokerage, as follows:

U.S.-based personnel must give notice by email to the Code Compliance Section (email address "Legal Compliance");

International personnel must give notice in writing (which may include email) to the TRP International Compliance Team.

The independent directors of Price Group, the Price Funds, and the Savings Bank are not subject to this requirement.

New Personnel Subject to the Code.

Officers, Directors and Registered Representatives of Investment Services.

Obtain approval for a securities account from Investment Services (whether the registered person is based in the United States or internationally); the request for approval should be in writing, directed to the Code Compliance Section, and submitted before opening or placing the initial trade in the securities account; and

If the securities account is with a broker/dealer, provide the broker/dealer with written notice of his or her association with Investment Services.

Annual Statement by Access Persons.

Reminder.

e.g.

PROCEDURES FOR REPORTING TRANSACTIONS. The following requirements apply both to Access Persons and Non-Access Persons except the independent directors of Price Group, the Price Funds and the Savings Bank, who are subject to modified reporting requirements:

Report Form.

must

e.g.

What Information Is Required.

the date of the transaction

the title of the security

the ticker symbol or CUSIP number, as applicable

the interest rate and maturity date, as applicable

the number of shares, as applicable

the principal amount of each reportable security involved, as applicable.

the nature of the transaction ( i.e. purchase, sale or any other type of acquisition or disposition)

the price of the security at which the transaction was effected

the name of the broker, dealer or bank with or through which the transaction was effected; and

the date you submit the report

When Reports are Due. You must report a securities transaction (other than a transaction in a Reportable Fund or Section 529 College Investment Plan [Access Persons only] or a spousal payroll deduction plan or a stock split or similar acquisition or disposition) within ten (10) business days after the trade date or within ten (10) business days after the date on which you first gain knowledge of the transaction (for example, a bequest) if this is later. A transaction in a Reportable Fund, a Section 529 College Investment Plan, a spousal payroll deduction plan or a stock split or similar acquisition or disposition must be reported within 30 days of the end of the quarter in which it occurred.

Access Person Reporting of Reportable Funds and Section 529 College Investment Plan Interests Held on a T. Rowe Price Platform or in a TRP Brokerage account. You are required to inform the Code Compliance Section about Reportable Funds and/or Section 529 College Investment Plan interests ( i.e. , the Maryland College Investment Plan, the T. Rowe Price College Savings Plan, the University of Alaska College Savings Plan, and the John Hancock Freedom 529) held on a T. Rowe Price Platform or in a TRP Brokerage account. See p. 4-12. Once you have done this, you do not have to report any transactions in those securities; your transactions and holdings will be updated and reported automatically to Group Compliance on a monthly basis.

Access Person Reporting of Reportable Funds and Section 529 College Investment Plan Interests NOT Held on a T. Rowe Price Platform or in a TRP Brokerage Account. You must notify the Code Compliance Section of any Reportable Fund or Section 529 College Investment Plan interests that you beneficially own or control that are held at any intermediary, including any broker/dealer other than TRP's Brokerage Division. This would include, for example, a Price Fund held in your spouse's retirement plan. Any transaction in a Reportable Fund or in interests in a Section 529 College Investment Plan must be reported by duplicate account information sent directly by the intermediary to the Code Compliance Section or by the Access Person directly on the "T. Rowe Price Employees Report of Securities Transactions" within 30 days of the end of the quarter in which the transaction occurred.

The TRP International Compliance Team will send all reports it receives to the Code Compliance Section on a quarterly basis.

Reporting Certain Private Placement Transactions. If your investment requires periodic capital calls ( e.g. , in a limited partnership) you must report each capital call within ten (10) business days. This is the case even if you are an Access Person and you received prior transaction clearance for a total cumulative investment.

Reminder. If you become the beneficial owner of another's securities ( e.g. , by marriage to the owner of the securities) or begin to direct trading of another's securities, the transactions in these securities become subject to the transaction reporting requirements.

REPORTING REQUIREMENTS FOR THE INDEPENDENT DIRECTORS OF THE PRICE FUNDS.

Transactions in Publicly Traded Securities. An independent director of the Price Funds must report transactions in publicly-traded securities where the independent director controls or directs such transactions. These reporting requirements apply to transactions the independent director effects for his or her own beneficial ownership as well as the beneficial ownership of others, such as a spouse or other family member. An independent director does not have to report securities transactions in accounts over which the independent director has no direct or indirect influence or control ( e.g. , transactions in an account managed by an investment professional pursuant to a discretionary agreement and where the independent director does not participate in the investment decisions).

Transactions in Non-Publicly Traded Securities. An independent director does not have to report transactions in securities which are not traded on an exchange or listed on NASDAQ ( i.e. , non-publicly traded securities), unless the independent director knew, or in the ordinary course of fulfilling his or her official duties as a Price Funds independent director, should have known that during the 15-day period immediately before or after the independent director's transaction in such non-publicly traded security, a Price Adviser purchased, sold or considered purchasing or selling such security for a Price Fund or Price advisory client.

Methods of Reporting.

Quarterly Reports. If a Price Fund independent director elects to report his or her transactions quarterly: (1) a report for each securities transaction must be filed with the Code Compliance Section no later than thirty (30) days after the end of the calendar quarter in which the transaction was effected; and (2) a report must be filed for each quarter, regardless of whether there have been any reportable transactions. The Code Compliance Section will send to each independent director of the Price Funds who chooses to report transactions on a quarterly basis a reminder letter and reporting form approximately ten days before the end of each calendar quarter.

Duplicate Confirmation Reporting. An independent director of the Price Funds may also instruct his or her broker to send duplicate transaction information (confirmations) directly to the Code Compliance Section. An independent director who chooses to have his or her broker send duplicate account information to the Code Compliance Section in lieu of directly reporting broker-executed transactions must nevertheless continue to report in the normal way ( i.e. , Quarterly Reports) any securities transactions for which a broker confirmation is not generated.

Among the types of transactions that are commonly not reported through a broker confirmation and may therefore have to be reported directly to T. Rowe Price are:

Exercise of Stock Option of Corporate Employer;

Inheritance of a Security;

Gift of a Security; and

Transactions in Certain Commodities Futures Contracts ( e.g. , financial indices).

An independent director of the Price Funds must include any transactions listed above, as applicable, in his or her Quarterly Reports if not otherwise contained in a duplicate broker confirmation. The Code Compliance Section will send to each independent director of the Price Funds who chooses to report transactions through broker confirmations a reminder letter and reporting form approximately ten days before the end of each calendar quarter so that transactions not reported by broker confirmations can be reported on the reporting form.

Reporting of Officership, Directorship, General Partnership or Other Managerial Positions Apart from the Price Funds. An independent director of the Price Funds shall report to the Code Compliance Section any officership, directorship, general partnership or other managerial position which he or she holds with any public, private, or governmental issuer other than the Price Funds.

Reporting of Significant Ownership.

Issuers (Other than Non-Public Investment Partnerships, Pools or Funds). If an independent director of the Price Funds owns more than 1/2 of 1% of the total outstanding shares of a public or private issuer (other than a non-public investment partnership, pool or fund), he or she must immediately report this ownership in writing to the Code Compliance Section, providing the name of the issuer and the total number of the issuer's shares beneficially owned.

Non-Public Investment Partnerships, Pools or Funds. If an independent director of the Price Funds owns more than of 1% of the total outstanding shares or units of a non-public investment partnership, pool or fund over which the independent director exercises control or influence, or is informed of the investment transactions of that entity, the independent director must report such ownership in writing to the Code Compliance Section. For non-public investment partnerships, pools or funds where the independent director does not exercise control or influence and is not informed of the investment transactions of such entity, the independent director need not report such ownership to the Code Compliance Section unless and until such ownership exceeds 4% of the total outstanding shares or units of the entity.

Investments in Price Group. An independent director of the Price Funds is prohibited from owning the common stock or other securities of Price Group.

Investments in Non-Listed Securities Firms. An independent director of the Price Funds may not purchase or sell the shares of a broker/dealer, underwriter or federally registered investment adviser unless that entity is traded on an exchange or listed on NASDAQ or the purchase or sale has otherwise been approved by the Price Fund Boards.

Restrictions on Client Investment Partnerships.

Co-Investing.

Direct Investment.

Dealing with Clients. Aside from market transactions effected through securities exchanges or via NASDAQ, an independent director of the Price Funds may not, directly or indirectly, sell to or purchase from a client any security. This prohibition does not preclude the purchase or redemption of shares of any open-end mutual fund that is a client of any of the Price Advisers.

REPORTING REQUIREMENTS FOR THE INDEPENDENT DIRECTORS OF PRICE GROUP.

Reporting of Personal Securities Transactions.

e.g.

Reporting of Officership, Directorship, General Partnership or Other Managerial Positions Apart from Price Group.

Reporting of Significant Ownership.

Issuers (Other than Non-Public Investment Partnerships, Pools or Funds).

Non-Public Investment Partnerships, Pools or Funds.

not

and

not

TRANSACTION REPORTING REQUIREMENTS FOR THE INDEPENDENT DIRECTORS OF THE SAVINGS BANK. The independent directors of the Savings Bank are not required to report their personal securities transactions (other than transactions in Price Group stock) as long as they do not obtain information about the Price Advisers' investment research, recommendations, or transactions, other than information obtained because the Savings Bank is a client of one or more of the Price Advisers. In addition, the independent directors of the Savings Bank may be required to report other personal securities transactions and/or holdings as specifically requested from time to time by the Savings Bank in accordance with regulatory or examination requirements.

MISCELLANEOUS RULES REGARDING PERSONAL SECURITIES TRANSACTIONS. These rules vary in their applicability depending upon whether you are an Access Person.

The following rules apply to all Access Persons, except the independent directors of the Price Funds, and to all Non-Access Persons:

Dealing with Clients. Access Persons and Non-Access Persons may not, directly or indirectly, sell to or purchase from a client any security. Market transactions are not subject to this restriction. This prohibition does not preclude the purchase or redemption of shares of any open-end mutual fund that is a client of any of the Price Advisers and does not apply to transactions in a spousal employer-sponsored payroll deduction plan or spousal employer-sponsored stock option plan.

Investment Clubs. These restrictions vary depending upon the person's status, as follows:

Non-Access Persons. A Non-Access Person may form or participate in a stock or investment club without prior clearance from the Chairperson of the Ethics Committee (U.S.based personnel) or the TRP International Compliance Team (international personnel). Only transactions in Price Group stock are subject to prior transaction clearance. Club transactions must be reported just as the Non-Access Person's individual trades are reported.

Access Persons. An Access Person may not form or participate in a stock or investment club unless prior written clearance has been obtained from the Chairperson of the Ethics Committee (U.S.-based personnel) or the TRP International Compliance Team (international personnel). Generally, transactions by such a stock or investment club in which an Access Person has beneficial ownership or control are subject to the same prior transaction clearance and reporting requirements applicable to an individual Access Person's trades. If, however, the Access Person has beneficial ownership solely by virtue of his or her spouse's participation in the club and has no investment control or input into decisions regarding the club's securities transactions, the Chairperson of the Ethics Committee or the TRP International Compliance Team may, as appropriate as part of the prior clearance process, require the prior transaction clearance of Price Group stock transactions only.

Margin Accounts. While margin accounts are discouraged, you may open and maintain margin accounts for the purchase of securities provided such accounts are with firms with which you maintain a regular securities account relationship.

Trading Activity. You are discouraged from engaging in a pattern of securities transactions that either:

is so excessively frequent as to potentially impact your ability to carry out your assigned responsibilities, or

involves securities positions that are disproportionate to your net assets.

At the discretion of the Chairperson of the Ethics Committee, written notification of excessive trading may be sent to you and/or the appropriate supervisor if ten or more reportable trades occur in your account(s) in a month, or if circumstances otherwise warrant this action.

The following rules apply only to Access Persons other than the independent directors of the Price Funds:

Large Issuer/Volume Transactions.

"Large Issuer/Volume List"

marginally

issuers with market capitalizations of $5 billion or more, or

U.S. issuers with an average daily trading volume in excess of 500,000 shares over the preceding 90 calendar days or

are usually permitted, unless the rating on the security as reported in the firm's Daily Research News has been changed to a 1 or a 5 within the seven (7) calendar days immediately prior to the date of the proposed transaction.

These parameters are subject to change by the Ethics Committee. An Access Person should be aware that if prior transaction clearance is granted for a specific number of shares lower than the number requested, he or she may not be able to receive permission to buy or sell additional shares of the issuer for the next seven (7) calendar days.

If you believe one or both of these criteria should be applied to a non-U.S. issuer, you should contact the Code Compliance Section or the TRP International Compliance Team, as appropriate. When contacted, the TRP International Compliance Team will coordinate the process with the Code Compliance Section.

Transactions Involving Options on Large Issuer/Volume List Securities.

greater

Transactions Involving Exchange-Traded Index Options.

greater

e.g.

See

Client Limit Orders.

The Access Person's trade will be entered as a market order; and

The client's limit order is 10% or more away from the market at the time the Access Person requests prior transaction clearance.

Japanese New Issues.

General Information on Options and Futures (Other than Exchange Traded Index Options). If a transaction in the underlying instrument does not require prior transaction clearance ( e.g. , National Government Obligations, Unit Investment Trusts), then an options or futures transaction on the underlying instrument does not require prior transaction clearance. However, all options and futures transactions, except the commodity futures transactions described on page 4-10, must be reported even if a transaction in the underlying instrument would not have to be reported ( e.g. , U.S. Government Obligations). Transactions in publicly traded options on Price Group stock are not permitted. See p. 4-7. Please consult the specific discussion on Exchange Traded Index Options above for transactions in those securities.

Before engaging in options and futures transactions, Access Persons should understand the impact that the 60-Day Rule and intervening client transactions may have upon their ability to close out a position with a profit ( see page 4-29).

Options and Futures on Securities and Indices Not Held by Clients of the Price Advisers. There are no specific restrictions with respect to the purchase, sale or writing of put or call options or any other option or futures activity, such as multiple writings, spreads and straddles, on a security (and options or futures on such security) or index that is not held by any of the Price Advisers' clients.

Options on Securities Held by Clients of the Price Advisers. With respect to options on securities of companies which are held by any of Price Advisers' clients, it is the firm's policy that an Access Person should not profit from a price decline of a security owned by a client (other than a "pure" Index account). Therefore, an Access Person may: (i) purchase call options and sell covered call options and (ii) purchase covered put options and sell put options. An Access Person may not purchase uncovered put options or sell uncovered call options, even if the issuer of the underlying securities is included on the Large Issuer/Volume List, unless purchased in connection with other options on the same security as part of a straddle, combination or spread strategy which is designed to result in a profit to the Access Person if the underlying security rises in or does not change in value. The purchase, sale and exercise of options are subject to the same restrictions as those set forth with respect to securities, i.e. , the option should be treated as if it were the common stock itself.

Other Options and Futures Held by Clients of the Price Advisers. Any other option or futures transaction with respect to domestic or foreign securities held by any of the Price Advisers' clients will receive prior transaction clearance if appropriate after due consideration is given, based on the particular facts presented, as to whether the proposed transaction or series of transactions might appear to or actually create a conflict with the interests of any of the Price Advisers' clients. Such transactions include transactions in futures and options on futures involving financial instruments regulated solely by the CFTC.

Closing or Exercising Option Positions. A transaction initiated by an Access Person to exercise an option or to close an option transaction must also receive prior transaction clearance. If an intervening client transaction in the underlying security has occurred since the position was opened, the Access Person may not receive prior clearance to initiate a transaction to exercise the option or to close out the position, as applicable.

Short Sales.

The 60-Day Rule.

any

each

The closing of a position in a European style option on any security other than an index will result in a 60-Day Rule violation if the position was opened within the 60-day window and the closing transaction results in a gain. Multiple positions will not be netted to determine an overall gain or loss in options on the same underlying security expiring on the same day.

The 60-Day Rule does not apply to:

any transaction by a Non-Access Person other than transactions in Price Group stock not excluded below;

any transaction that does not require from prior transaction clearance ( e.g. , purchase or sale of unit investment trust, including SPYDER and QQQQ, exercise of corporate stock option by Access Person spouse, pro-rata distributions; see p. 4-10);

any transaction in a security in which either the acquisition or the sale of that security does not require prior transaction clearance ( e.g. , if an Access Person inherits a security, a transaction that did not require prior transaction clearance, then he or she may sell the security inherited at a profit within 60 calendar days of its acquisition);

the purchase and sale or sale and purchase of exchange-traded index options;

any transaction in Price Group stock effected through the ESPP (note that the 60-Day Rule does apply to shares transferred out of the ESPP to a securities account; generally, however, an employee remaining in the ESPP may not transfer shares held less than 60 days out of the ESPP);

the exercise of "company-granted" Price Group stock options and the subsequent sale of the derivative shares; and

any purchase of Price Group stock through an established dividend reinvestment plan.

Prior transaction clearance procedures do not check compliance with the 60-Day Rule when considering a trading request. Access Persons are responsible for checking their compliance with this rule before entering a trade. If you have any questions about whether this Rule will be triggered by a proposed transaction, you should contact the Code Compliance Section or the TRP International Compliance Team before requesting prior transaction clearance for the proposed trade.

Access Persons may request in writing an interpretation from the Chairperson of the Ethics Committee that the 60-Day Rule should not apply to a specific transaction or transactions.

Investments in Non-Listed Securities Firms.

see

REPORTING OF ONE HALF OF ONE PERCENT OWNERSHIP. If an employee owns more than 1/2 of 1% of the total outstanding shares of a public or private company, he or she must immediately report this in writing to the Code Compliance Section, providing the name of the company and the total number of such company's shares beneficially owned.

GAMBLING RELATED TO THE SECURITIES MARKETS. All persons subject to the Code are prohibited from wagering, betting or gambling related to individual securities, securities indices or other similar financial indices or instruments. This prohibition applies to wagers placed through casinos, betting parlors or internet gambling sites and is applicable regardless of where the activity is initiated ( e.g. , home or firm computer or telephone). This specific prohibition does not restrict the purchase or sale of securities through a securities account reporting to the Code Compliance Section or the TRP International Compliance Team, even if these transactions are effected with a speculative investment objective.

INITIAL DISCLOSURE OF PERSONAL SECURITIES HOLDINGS BY ACCESS PERSONS. Upon commencement of employment, appointment or promotion (no later than 10 calendar days after the starting date) , each Access Person, except an independent director of the Price Funds, is required by United States securities laws to disclose in writing all current securities holdings in which he or she is considered to have beneficial ownership or control ("Securities Holdings Report") ( see page 4-5 for definition of the term Beneficial Owner) and provide or reconfirm the information regarding all of his or her securities accounts.

The form to provide the Securities Holdings Report will be provided upon commencement of employment, appointment or promotion and should be submitted to the Code Compliance Section (U.S.-based personnel) or the TRP International Compliance Team (International personnel) . The form on which to report securities accounts can be found on the firm's Intranet under Corporate/Legal.

SEC rules require that each Securities Holding Report contain, at a minimum, the following information:

securities title

securities type

exchange ticker number or CUSIP number, as applicable

number of shares or principal amount of each reportable securities in which the Access Person has any direct or indirect beneficial ownership

the name of any broker, dealer or both with which the Access Person maintains an account in which any securities are held for the Access Person's direct or indirect benefit; and

the date the Access Person submits the Securities Holding Report.

The information provided must be current as of a date no more than 45 days prior to the date the person becomes an Access Person.

ANNUAL DISCLOSURE OF PERSONAL SECURITIES HOLDINGS BY ACCESS PERSONS. Each Access Person, except an independent director of the Price Funds, is also required to file a "Personal Securities Report," consisting of a Statement of Personal Securities Holdings and a Securities Account Verification Form Report, on an annual basis. The Personal Securities Report must be as of year end and must be filed with the firm by the date it specifies. The Chief Compliance Officer or his or her designee reviews all Personal Securities Reports.

ADDITIONAL DISCLOSURE OF OPEN-END INVESTMENT COMPANY HOLDINGS BY INVESTMENT PERSONNEL. If a person has been designated "Investment Personnel," he or she must report with the initial and annual Securities Holdings Report a listing of shares of all open-end investment companies (except money market funds), whether registered under the Investment Company Act or sold in jurisdictions outside the United States, that the Investment Personnel either beneficially owns or controls. If an Access Person becomes Investment Personnel, he or she must file a supplement to his or her existing Securities Holdings Report within thirty (30) days of the date of this designation change, listing all shares of open-end investment companies (except money market funds) that he or she beneficially owns or controls. Previously disclosed ownership of Reportable Funds does not have to be reported again in this disclosure.

CONFIDENTIALITY OF RECORDS. Price Group makes every effort to protect the privacy of all persons and entities in connection with their Securities Holdings Reports, Reports of Securities Transactions, Reports of Securities Accounts, and Personal Securities Reports.

SANCTIONS. Strict compliance with the provisions of this Statement is considered a basic provision of employment or other association with Price Group and the Price Funds. The Ethics Committee, the Code Compliance Section, and the TRP International Compliance Team are primarily responsible for administering this Statement. In fulfilling this function, the Ethics Committee will institute such procedures as it deems reasonably necessary to monitor each person's and entity's compliance with this Statement and to otherwise prevent and detect violations.

Violations by Access Persons, Non-Access Persons and Independent Directors of Price Group or the Savings Bank.

inter alia

Violations by Independent Directors of Price Funds.

February, 2005

L:\lgl\users\lgl9z34\Linnette\SMC\Code of Ethics\Code of Ethics All Associates Feb 05

T. ROWE PRICE INTERNATIONAL FUNDS, INC.

ARTICLES SUPPLEMENTARYCLASSIFYING AND RECLASSIFYING AUTHORIZED STOCK

ARTICLES SUPPLEMENTARYCLASSIFYING
AND RECLASSIFYING AUTHORIZED STOCK