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Registration Nos. 002-48848/811-2396

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM N1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933/X/

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PostEffective Amendment No. 55/X/

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and/or

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

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Amendment No. 30/X/

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T. Rowe Price New Income Fund, Inc.

Exact Name of Registrant as Specified in Charter

100 East Pratt Street, Baltimore, Maryland 21202

Address of Principal Executive Offices

4103452000

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 October 1, 2003

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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 October 1, 2003, 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 app ropriate, check the following box:

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

October 1, 2003

Prospectus

T. Rowe Price

New Income Fund

A bond fund investing primarily in investment-grade bonds to achieve an attractive level of income.

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
		Some Basics of Fixed-Income Investing	7

2		Information About Accounts in T. Rowe Price Funds
		Pricing Shares and Receiving Sale Proceeds	10
		Useful Information on Distributions and Taxes	13
		Transaction Procedures and Special Requirements	19
		Account Maintenance and Small Account Fees	21

3	More About the Fund
		Organization and Management	23
		Understanding Performance Information	24
		Investment Policies and Practices	26
		Financial Highlights	36

4		Investing With T. Rowe Price
		Account Requirements and Transaction Info rmation	37
		Opening a New Account	38
		Purchasing Additional Shares	39
		Exchanging and Redeeming Shares	40
		Rights Reserved by the Funds	42
		Information About Your Services	43
		T. Rowe Price Brokerage	45
		Investment Information	46
		T. Rowe Price Privacy Policy	48

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T. Rowe Price New Income Fund, Inc.

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Founded in 1937 by the late Thomas Rowe Price, Jr., T. Rowe Price Associates, Inc. (T. Rowe Price), and its affiliates managed $161.2 billion for more than eight million individual and institutional investor accounts as of June 30, 2003. T. Rowe Price is the fund`s investment manager.

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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.

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1objective, strategy, risks, and expenses

What is the fund`s objective?

The fund seeks the highest level of income consistent with the preservation of capital over time by investing primarily in marketable debt securities.

What is the fund`s principal investment strategy?

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In seeking income and capital preservation, the fund pursues a total return strategy. Active management of the portfolio can result in bonds being sold at gains or losses. However, over the long-term, the fund seeks to achieve its objective by investing primarily in income-producing securities that possess what we believe are favorable total return (income plus changes in principal) characteristics.

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The fund will invest at least 80% of the fund`s total assets in income-producing securities, which may include U.S. government and agency obligations, mortgage- and asset-backed securities, corporate bonds, foreign securities , collateralized mortgage obligations (CMOs), and others, including, on occasion, equities.

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All debt securities purchased by the fund must be rated investment grade (AAA, AA, A, or BBB) by at least one major credit rating agency or, if unrated, must have a T. Rowe Price equivalent rating. Up to 15% of total assets may be invested in "split-rated securities," or those rated investment g rade by at least one rating agency but below investment grade by others. However, none of the fund`s remaining assets can be invested in bonds rated below investment grade by Standard & Poor`s, Moody`s, or Fitch IBCA, Inc.

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The fund has considerable flexibility in seeking high yields. There are no maturity restrictions, so we can purchase longer-term bonds, which tend to have higher yields than shorter-term issues. However, the portfolio`s weighted average maturity is expected to be between four and 15 years. In addition, when there is a large yield difference between the various quality levels, we may move down the credit scale and purchase lower-rated bonds with higher yields. When the difference is small or the outlook warrants, we may concentrate investments in higher-rated issues.

The fund may also invest in other securities, including futures, options, and swaps, in keeping with its objective.

The fund may sell holdings for a variety of reasons, such as to adjust a portfolio`s average maturity or quality or to shift assets into higher-yielding securities or different sectors.

For details about the fund`s investment program, please see the Investment Policies and Practices section.

What are the main risks of investing in the fund?

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Interest rate risk This is the risk t hat an increase in interest rates will likely cause the fund`s share price to fall, resulting in a loss of principal (see Table 3). That`s because the bonds and notes in the fund`s portfolio become less attractive to other investors when securities with higher yields become available. Even GNMAs and other securities (whose principal and interest payments are guaranteed) can decline in price if rates rise. Generally speaking, the longer a bond`s maturity, the greater its potential for price declines if rates rise and for price gains if rates fall. Because the fund may invest in bonds of any maturity, it carries more interest rate risk than short-term bond funds. If the fund purchases longer-maturity bonds and interest rates rise unexpectedly, the fund`s price could decline.

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regarded as speculative because their issuers are more susceptible to financial setbacks and recession than more creditworthy companies. If the fund invests in securities whose issuers develop unexpected credit problems, the fund`s price could decline.

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The fund may continue to hold a security that has been downgraded or loses its investment-grade rating after purchase.

Foreign investing risk To the extent the fund holds foreign bonds, it will be subject to special risks, whether the bonds are denominated in U.S. dollars or foreign currencies. These risks include potentially adverse political and economic developments overseas, greater volatility, lower liquidity, and the possibility that foreign currencies will decline against the dollar, lowering the value of securities denominated in those currencies and possibly the fund`s share price.

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Prepayment risk and extension risk A mortgage-backed bond, unlike most other bonds, can be hurt when interest rates fall because homeowners tend to refinance and prepay principal. Receiving increasing prepayments in a falling interest rate environment causes the average maturity of the portfolio to shorten, reducing its potential for price gains. It also requires the fund to reinvest proceeds at lower interest rates, which reduces the portfolio`s total return, reduces its yield, and may even cause certain bond prices to fall below the level the fund paid for them, resulting in a capital loss. Any of these developments could result in a decrease in the fund`s income, share price, or total return.

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Extension risk refers to a rise in interest rates that causes a fund`s average maturity to len gthen unexpectedly due to a drop in mortgage prepayments. This would increase the fund`s sensitivity to rising rates and its potential for price declines.

Derivatives risk To the extent the fund uses futures, swaps, and other derivatives, 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 share price and income level of the fund will fluctuate with changing market conditions and interest rate levels. When you sell your share s, 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. The fund may be appropriate for you if you seek an attractive level of income and are willing to accept the risk of a declining share price when interest rates rise. Steadily reinvesting the fund`s income is a conservative strategy for building capital over time. If you are investing primarily for safety and liquidity, you should consider a money market fund.

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 per formed in the past?

The bar chart showing calendar year returns and the average annual total return table indicate risk by illustrating how much returns can differ from one year to the next and 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.

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

In addition, the average annual total return 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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The fund`s return for the six months ended 6/30/03 w as 5.26%.

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<R>Table 1 Average Annual Total Returns

	Periods ended December 31, 2002
	1 year	5 years	10 years
New Income Fund
Returns before taxes	7.48%	5.96%	6.61%
Returns after taxes on distributions	5.50	3.48	3.96
Returns after taxes on distributions and sale of fund shares	4.55	3.52	< /font>3.97
Lehman Brothers U.S. Aggregate Index	10.26	7.55	7.51
Lipper Corporate Debt Funds A Rated Average	8.42	6.08	6.83

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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. All after-tax returns are calculated using the historical highest individual federal marginal income tax and capital gains rates. They 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.

Lehman Brothers U.S. Aggregate Index tracks investment-grade corporate and government bonds.

What fees or expenses will I pay?

The fund is 100% no load. There are no fees or charges to buy or sell fund shares, reinvest dividends, or exchange into other T. Rowe Price funds. There are no 12b1 fees.

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

*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 Account Maintenance and Small Account Fees.

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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:

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	Annual fund operating expenses (expenses that are deducted from fund assets)
Management fee	0.47%
Other expenses	0.27%
Total annual fund operating expenses	0.74%

1 year	3 years	5 years	10 years
$76	$237	$411	$918

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other INFORMATION about the fund

What are the fund`s potential rewards?

The fund can provide an attractive level of income. It should offer higher yields than money market and short-term bond funds and generally less volatility than longer-term bond funds. In addition, the portfolio is widely diversified among various fixed-income securities, thus reducing the effect of a single bond`s price fluctuations on the fund`s share price or total return.

How does the portfolio manager try to reduce risk?

Consistent with the fund`s objective, the portfolio manager uses various tools to try to reduce risk and increase total return, including:

Diversification of assets to reduce the impact of a single holding or sector on a fund`s net asset value.

Thorough credit research by our own anal ysts.

Adjustment of fund duration to try to reduce the drop in price when interest rates rise or to benefit from the rise in price when rates fall. Duration is a measure of a fund`s sensitivity to interest rate changes.

Is the fund a substitute for a money market fund?

No. Money market funds, which have an average maturity under one year, ordinarily generate lower income in return for stability of net asset value. The fund`s total return is expected to fluctuate more than a money market fund`s and, as such, it should be viewed as a longer-term and riskier investment.

Do mortgage-backed securities differ from other high-quality bonds?

Yes, in one major respect. Non-mortgage bonds generally repay principal (face value of the bond) when their < /font>maturity date is reached, but most mortgage-backed securities repay principal continually as homeowners make mortgage payments. Homeowners have the option of paying either part or all of the loan balance before maturity, perhaps to refinance or buy a new home. As a result, the effective maturity of a mortgage-backed security is virtually always shorter than its stated maturity.

For example, a new GNMA certificate backed by 30-year, fixed-rate mortgages will generally have a far shorter life than 30 years — probably 12 or less. Therefore, it will usually be about as volatile as a 10-year Treasury note. It is possible to estimate the average life of an entire mortgage pool backing a particular security with some accuracy, but not with certainty.

Why are yields on mortgage-backed securities higher than yields on Treasuries of similar maturity?

The structure of mortgage-backed securities is much more complex, and their effective maturities are uncertain because of unscheduled prepayments. Higher yields compensate investors for these potentially negative features. See the previous discussion of prepa yment risk and extension risk.

What are derivatives and can the fund invest in them?

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A derivative is a financial instrument whose value is derived from an underlying security such as a stock or bond or from a market benchmark, such as an interest rate index. Many types of investments representing a wide ra nge of risks and potential rewards are derivatives, including conventional instruments such as callable bonds, futures, and options, as well as more exotic investments such as swaps and structured notes. Investment managers have used derivatives for many years.< /div></R>

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Derivatives will be used only if the expected risks and rewards are consistent with fund objectives, policies, and overall risk profile as described in this prospectus. The fund uses derivatives in situations in which they may help
accomplish the following: hedge against decline in principal value, increase yield, invest in eligible asset classes with greater efficiency and lower cost than is possible through direct investment, or adjust portfolio duration.

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We will not invest in any high-risk, highly leveraged derivative that we believe would cause the portfolio to be more volatile than a long-term, investment-grade bond.

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

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

some basics of Fixed-Income investing

Is a fund`s yield fixed or will it vary?

It will vary. The yield is calculated every day by dividing a fund`s net income per share, expressed at annual rates, by the share price. Since both income and share price will fluctuate, a fund`s yield will also vary. (Although money fund prices are stable, income is variable.)

Is yield the same as total return?

Not for bond funds. A fund`s total return is the result of reinvested distributions from income and capital gains and the change in share price for a given period. Income is always a positive contributor to total return and can either enhance a rise in share price or help offset a price decline.

What is credit quality and how does it affect yield?

Credit quality refers to a bond issuer`s expected ability to make all required interest and princ ipal payments on time. Because highly rated issuers represent less risk, they can borrow at lower interest rates than less creditworthy issuers. Therefore, a fund investing in high-quality securities should have a lower yield than an otherwise comparable fund investing in lower-quality securities.

What is meant by a bond fund`s maturity?

Every bond has a stated maturity date when the issuer must repay the bond`s entire prin cipal value to the investor. However, many bonds are "callable," meaning their principal can be repaid earlier than, on, or after specified call dates. Bonds are most likely to be called when interest rates are falling because the issuer can refinance at a lower rate, just as a homeowner refinances a mortgage. In that environment, a bond`s "effective maturity" is usually its nearest call date. For example, the rate at which hom eowners pay down their mortgage principal determines the effective maturity of mortgage-backed bonds.

A bond mutual fund has no real maturity, but it does have a weighted average maturity and a weighted average effective maturity. Each of these numbers is an average of the stated or effective maturities of the underlying bonds, with each bond`s maturity "weighted" by the percentage of fund assets it represents. Some funds target effective maturities rather than stated maturities when computing the average. This provides additional flexibility in portfolio management.

What is meant by a bond fund`s duration?

Duration is a calculation that seeks to measure the price sensitivity of a bond or a bond fund to changes in interest rates. It is expressed in years, l ike maturity, but it is a better indicator of price sensitivity than maturity because it takes into account the time value of cash flows generated over the bond`s life. Future interest and principal payments are discounted to reflect their present value and then are multiplied by the number of years they will be received to produce a value expressed in years — the duration. "Effective" duration takes into account call features and sinking fund payments that may shorten a bond`s life.

Since duration can also be computed for bond funds, you can estimate the effect of interest rates on share prices by multiplying fund duration by an expected change in interest rates. For example, the price of a bond fund with a duration of five years would be expected to fall approximately 5% if rates rose by one percentage point. (T.&# 160;Rowe Price shareholder reports show duration.)

How is a bond`s price affected by changes in interest rates?

When interest rates rise, a bond`s price usually falls, and vice versa. In general, the longer a bond`s maturity, the greater the price increase or decrease in response to a given change in rates, as shown in Table 3.

<R>Table 3 How Interest Rates Affect Bond Prices

		Price of a $1,000 face value bond if interest rates:
Bond maturity	Coupon	Increase		Decrease
		1 percent	2 percent	1 percent	2 percent
2 years	1.30%	< font style="font-size:12.0pt;" face="Courier New">$981	$962	$1,020	NA
5 years	2.41	954	911	1,048	$1,099
10 years	3.51	920	848	1,088	1,185
30 years	4.56	855	739	1,183	1,417

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Coupons reflect yields on Treasury securities as of June 30, 2003. The table may not be representative of price changes for mortgage-backed securities because of prepayments. This is an illustration and does not represent expected yields or share price changes of any T. Rowe Price fund.

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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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2As a T. Rowe Price shareholder, you will want to know about the following policies and procedures that apply to all accounts in 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

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, a 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. Amortized cost is used to price securities held by money market funds.

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The securities of funds investing in foreign markets are usually valued on the basis of the most recent closing market prices at 4 p.m. ET. Most foreign markets close before that time. For securities primarily traded in the Far East, for example, the most recent closing prices may be as much as 15 hours old at 4 p.m. Normally, developments that could affect the values of portfolio securities that occur between the close of the foreign market and 4 p.m. ET will not be reflected in a fund`s NAV. However, if a fund determines that such developments are so significant that they will, in its judgment, clearly and materially affect the value of the fund`s securities, the fund may adjust the previous closing prices to reflect what it believes to be the fair value of the securities as of 4 p.m. ET. In making these adjustments, the fund reviews a variety of factors, including the performance of U.S. securities markets. A fund may 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 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 acco unts.

How your purchase, sale, or exchange price is determined

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

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 investment 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

The Japan Fund`s share price is calculated at the close of the New York Stock Exchange, normally 4 p.m. ET, 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 processed the next day the fund computes an NAV. As such, you may experience a delay in purchasing or redeeming 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 processed 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 2003—January 1, 2, 3, and 13; February 11; March 21; April 29; May 3 and 5; July 21; September 15 and 23; October 13; November 4 and 24; December 23 and 31. In 2004—January 1, 2, 3, 4, and 12; February 11; March 20; April 29; May 3, 4, and 5; July 19; September 20 and 23; October 11; November 3 and 23; December 23 and 31. 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.

If your request is received by 4 p.m. ET 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 sh ould be credited to your account the first business day after the sale.

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 y ou.

Contingent Redemption Fee

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Short-term "market timers" who engage in frequent purchases and redemptions can disrupt a fund`s investment program and create additional costs for long-term shareholders. 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:

Fund	Holding period	Redemption fee
Diversified Small-C ap Growth	6 months	1.00%
Developing Technologies	1 year	1.00%
Emerging Europe & Mediterranean	1 year	2.00%
Emerging Markets Stock	1 year	2.00%
Equity Index 500	6 months	0.50%
Extended Equity Market Index	6 months	0.50%
High Yield	1 year	1.00%
International Discovery	1 year	2.00%
International Equity Index	6 months	1.00%
Latin America	1 year	2.00%
Real Estate	6 months	1.00%
Small-Cap Value	1 year	1.00%
Tax-Efficient Balanced	1 year	1.00< font style="font-size:12.0pt;" face="Courier New">%
Tax-Efficient Growth	2 years	1.00%
Tax-Efficient Multi-Cap Growth	2 years	1.00%
Total Equity Market Index	6 months	0.50%
U.S. Bond Index	6 months	0.50%

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Redemption fees are paid to a fund to help offset costs and to protect its long-term shareholders. The "first-in, first-out" (FIFO) method is used to determine the holding period. Under this method, the date of the redemption or exchange will be compared with the earliest purchase date of shares held in the account. If this holding period is less than the designated holding period, the fee will be charged.

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In determining a holding period, the fund will use the anniversary date of a transaction. Thus, for a one-year period, shares purchased on January 1 will be subject to the fee if they are redeemed on or prior to the following December 31. If they are redeemed on or after January 1 of the following year, they will not be subject to the fee.

The fee does not apply to any shares purchased through reinvested distributions (dividends and capital gains), shares held in retirement plans, such as 401(k), 403(b), 457, Keogh, profit sharing, SIMPLE IRA, SEP-IRA, and money purchase pension accounts, or to shares redeemed through designated systematic withdrawal plans. The fee does apply to all other types of accounts including IRAs. The fee may also apply to shares in retirement plans held in broker omnibus accounts.

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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.

Distributions not reinvested are paid by check or transmitted to your bank account vi a 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 or redemption checks.

The following chart provides details on dividend payments.

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<R>Table 4 Dividend Payment Schedule

Fund	Dividends
Money market funds	Shares purchased by 12 noon via wire begin to earn dividends on that day. Other shares normally begin to earn dividends on the business day after payment is received.Paid on the first business day of each month.
Bond funds	Shares normally begin to earn dividends on the business day after payment is received.Paid on the first business day of each month.
These stock funds only:BalancedDividend GrowthEquity IncomeEquity Index 500Growth & IncomePersonal Strategy BalancedPersonal Strategy IncomeReal Estate	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 IncomeRetirement 2010Retirem ent 2020Retirement 2030Retirement 2040	Shares normally begin to earn dividends on the business day after payment is received.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 PortionShares normally begin to earn dividends on the business day after payment is received.Paid on the last business day of March, June, September, and December.Equity PortionDeclared annually, if any, generally in December.Must be a shareholder on the record date.

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Bond or money fund shares will earn dividends through the date of redemption; also, shares 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

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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.

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 necessary, it is paid the following year.

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

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.

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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.

A fund makes a distribution to your account.

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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 during the year.Tax-exempt interest 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 calc ulation. The portion of the fund`s income 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 interest 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 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 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 obligations, 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 on January 1, the exemption applies only to the portion of assets (if any) invested in U.S. government obligations.The fund is organized a s 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 divid end was paid for more than 60 days during the 120-day period beginning 60 days before the ex-dividend date. Little, if any, of the ordinary dividends paid by the bond and money funds are 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 dividends received by corporations to the extent the fund`s income consists of dividend s paid by U.S. corporations. Little, if any, of the ordinary dividends paid by the bond and money funds are 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.

In January, you will be sent Form 1099-B indicating the date and amount of each sale you made in the fund during 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 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 identification."

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To help you maintain accurate records, we 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 distributions 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 income taxes. Dividends on tax-free funds are expected to be tax-exempt.

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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 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 to a long-term loss to the extent of any long-term capital gain distribution received during the period you held the shares. If you realize 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 inves ting 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 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 be able to meet the requirements to pass through foreign income taxes paid.

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

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<R>Table 5 Taxes on Fund Distributions

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.	< br>
Inflation Protected Bond Fund
Inflation adjustments on Treasury inflation-protected securities exceeding deflation adjustments for a 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 to be 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.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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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 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.

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

Tax effect of buying shares before a 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 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.< /div></R>

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 transfer agent, and the fund can redeem shares you own in this or another identically registered < font style="font-size:10.0pt;" face="Berkeley Book" color="Black">T. Rowe Price account as reimbursement. 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

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 cal endar 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 procedu res to verify the identity of the shareholder. If these procedures are followed, the funds and their agents are not liable for any losses that may occur from acting on unauthorized 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. Telephone 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.

Excessive Trading

T. Rowe Price may bar exc essive traders from purchasing shares.

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Frequent trades or market timing in your account or accounts controlled by you can disrupt management of a fund and raise its costs. To deter such activity, each fund has adopted the following excessive trading policies. Transactions placed directly or accepted by inte rmediaries in violation of these policies or from persons believed to be market timers are subject to rejection or cancellation by the funds.

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Trades placed directly with T. Rowe Price If you trade directly with T. Rowe Price, you can make one purchase and one sale or one sale and one purchase involving the same fund within any 120-day period. If you exceed this limit, or if your trading activity involves market timing, you may be barred indefinitely and without further notice from further purchases of the T. Rowe Price funds.

Two types of transactions are exempt from this policy: 1) Trades solely in money market funds (exchanges between a money fund and a nonmoney fund are not exempt); and 2) systematic purchases and redemptions (see Information About Your Services).

Trades placed through intermediaries If you purchase fund shares through an intermediary including a broker, bank , investment adviser, recordkeeper, or other third party, you can make one purchase and one sale or one sale and one purchase involving the same fund within any 120-day period. If you exceed this limit o r if you hold fund shares for less than 60 calendar days, you may be barred indefinitely and without further notice from further purchases of the T. Rowe Price funds. Systematic purchases and redemptions are exempt from this policy.

Keeping Your Account Open

Due to the relatively high cost to a fund of maintaining small accounts, we ask you to maintain an account balance 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.

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Signature Guarantees

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

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

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

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 ownership) 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.

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Account Maintenance and Small Account Fees

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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 automatically be deducted from nonretirement accounts with balances falling below a minimum amoun t. 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 reason, including market fluctuations, redemptions, or exchanges. When an account with less than $10,000 is closed either through redemption or exchange, the fee will be charged and deducted from the proceeds. 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 intermediaries through NSCC® Networking.

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3Organization and Management

How is the fund organized?

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The fund was incorporated in Maryland in 1973 and is a diversified, "open-end investment company," or mutual fund. Mutual funds pool money received from shareholders and invest it to try to achieve specified objectives.

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Shareholders benefit from T. Rowe Price`s 66 years of investment management exper ience.

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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.

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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.

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D o 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 fund?

General Oversight

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The fund 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.

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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.

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Portfolio Management

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The fund has an Investment Advisory Committee with the following members: Daniel O. Shackelford, Chairman, Connice A. Bavely, Brian J. Brennan, Patrick S. Cassidy, Alan D. Levenson, Mary J. Miller, Edmund M. Notzon III, Vernon A. Reid, Jr., William T. Reynolds, and Robert M. Rubino. The committee chairman has day-to-day responsibility for managing the portfolio and works with the committee in developing a nd executing the fund`s investment program. Mr. Shackelford became chairman of the fund`s committee in 2002. He joined T. Rowe Price in 1999 and has been managing investments since that time.

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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 investment management complex, is calculated daily based on the combined net assets of all T. Rowe Price funds (except the Spectrum Funds, the Retirement Funds, and any institutional, index, or private label mutual funds). The group fee schedule (shown below) is graduated, declining as the asset total rises, so shareholders 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

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*Represents a blended group fee rate containing various breakpoints.

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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 $93 billion at May 31, 2003, the group fee was 0.32%. The individual fund fee is 0.15%.

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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

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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.

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Advertisements may include cumulative or average annual total return figures, which may be compared with various 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 investment`s actual cumulative return. This gives you an idea of an investment`s annual contribution to your portfolio, provided you held it for the entire period.

Yield

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The current or "dividend" yield on a fund or any investment tells you the relationship between the investment`s current level of annual income and its price on a particular day. The dividend yield reflects the actual income paid to shareholders for a given period, annualized and divided by the price at the end of the period. For example, a fund providing $5 of annual income per share and a price of $50 has a current yield of 10%. Yields can be calculated for any time period.

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For bond funds, the advertised or SEC yield is found by determining the n et income per share (as defined by the Securities and Exchange Commission) earned by a fund during a 30-day base period and dividing this amount by the share price on the last day of the base period. The SEC yield—also called the
standardized yield—may differ from the dividend yield.

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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 restrictions 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. Fund investment

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restrictions and policies apply at the time of investment. A later change in circumstances will not require the sale of an investment if it was proper at the time it was made. (This exception does not apply to the fund`s borrowing policy.)

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Fund hol dings 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.

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

Types of Portfolio Securities

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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 con sistent with its investment program. The following pages describe various types of fund securities and investment management practices.

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Fundamental policy The fund will not purchase a security if, as a result, with respect to 75% of its total assets, more than 5% of its total assets would be invested in securities of a single issuer or more than 10% of the outstanding
voting securities of the issuer would be held by the fund. These limitations do not apply to the fund`s purchase of securities issued or guaranteed by the U.S. government, its agencies, or instrumentalities.

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Bonds

A bond is an interest-bearing security. The issuer has a contractual obligation to pay interest at a stated rate on specific dates and to repay principal (the bond`s face value) on a specified date. An issuer may have the right to redeem or "call" a bond before maturity, and the investor may have to reinvest the proceeds at lower market rates.

A bond`s annual interest income, set by its coupon rate, is usually fixed for the life of the bond. Its yield (income as a percent of current price) will fluctuate to reflect changes in interest rate levels. A bond`s price usually rises when interest rates fall, and vice versa, so its yield stays consistent with current market conditions.

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Conventional fixed-rate bonds offer a coupon rate for a fixed maturity with no adjustment for inflation. Real rate of return bonds also offer a fixed coupon but include ongoing inflation adjustments for the life of the bond.

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Bonds may be unsecured (backed by the issuer`s general creditworthiness only) or secured (also backed by specified collateral). Bonds include asset- and mortgage-backed securities.

Certain bonds have interest rates that are adjusted peri odically. These interest rate adjustments tend to minimize fluctuations in the bonds` principal values. The maturity of those securities may be shortened under certain specified conditions.

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Bonds may be designated as senior or subordinated obligations. Senior obligations generally have the first claim on a corporation`s earnings and assets and, in the event of liquidation, are paid before subordinated debt.

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Bond ra tings are not guarantees. They are estimates of an issuer`s financial strength. Ratings can change at any time due to real or perceived changes in an issuer`s cr edit or financial fundamentals.

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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

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a pro-rata basis; profits may be paid out in dividends or reinvested in the company to help it grow. Increases and decreases in earnings are usually reflected in a company`s stock price, so common stocks generally have the greatest appreciation and depreciation potential of all corporate securities. While most preferred stocks pay a dividend, preferred stock may be purchased where the issuer has omitted, or is in danger of omitting, payment of its dividend. Such investments would be made primarily for their capital appreciation potential.

Convertible Securities and Warrants

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Investments may be made in debt or preferred equity securities convertible into, or exchangeable for, equity securities. Traditionally, conve rtible 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 (gener ally, two or more years). Warrants can be highly volatile, have no voting rights, and pay no dividends.

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Operating policy Without regard to quality, the fund may invest up to 25% of its total assets (not including cash) in preferred and common stocks and convertible securities, convertible into or which carry warrants for common stocks or other equity securities.

Foreign Securities

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Investments may be made in foreign securities. These include nondollar-denominated securities traded outside of the U.S. and dollar-denominated securities of foreign issuers traded in the U.S. (such as Yankee bonds). Investing in foreign securities involves special risks that can increase the potential for losses. These include: exposure to potentially adverse local, political, and economic developments such as war, political instability, hyperinflation, currency devaluations, and overdependence on particular industries; government interference in markets such as nationalization and exchange controls, expropriation of assets, or imposition of punitive taxes; potentially lower liquidity and higher volatility; possible problems arising from accounting, disclosure, settlement, and regulatory practices and legal rights that differ from U.S. standards; and the chance that fluctuations in foreign exchange rates will decrease the investment`s value (favorable changes can increase its value). These risks are heightened for investments in developing countries.

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Operating policy There is no limit on fund investments in U.S. dollar-denominated debt securities issued by foreign issuers, foreign branches of U.S. banks, and U.S. branches of foreign banks. The fund may also invest up to 20% of total assets (excluding reserves) in non-U.S. dollar-denominated fixed-income securities.

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Asset-Backed Securities

An underlying pool of assets, such as credit card or automobile trade receivables or corporate loans or bonds, backs these bonds and provides the interest and principal payments to investors. On occasion, the pool of assets may also include a swap obligation, which is used to change the cash flows on the underlying assets. As an example, a swap may be used to allow floating rate assets to back a fixed-rate obligation. Credit quality depends primarily on the quality of the underlying assets, the level of credit support, if any, provided by the structure or b y a third-party insurance wrap, and the credit quality of the swap counterparty, if any. The underlying assets (i.e., loans) are sometimes subject to prepayments, which can shorten the security`s weighted average life and may lower its return. The value of these securities also may change because of actual or perceived changes in the creditworthiness of the individual borrowers, the originator, the servicing agent, the financia l institution providing the credit support, or the swap counterparty. There is no limit on fund investments in these securities.

Mortgage-Backed Securities

The fund may invest in a variety of mortgage-backed securities. Mortgage lenders pool individual home mortgages with similar characteristics to back a certificate or bond, which is sold to investors such as the fund. Interest and principal payments generated by the un derlying mortgages are passed through to the investors. The "big three" issuers are the Government National Mortgage Association (GNMA), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac). GNMA certificates are backed by the full faith and credit of the U.S. government, while others, such as Fannie Mae and Freddie Mac certificates, are only supported by the ability to borrow from the U.S. Treasury or by the credit of the agency. Private mortgage bankers and other institutions also issue mortgage-backed securities.

Mortgage-backed securities are subject to scheduled and unscheduled principal payments as homeowners pay down or prepay their mortgages. As these payments are received, they must be reinvested when interest rates may be higher or lower than on the original mortgage security. Therefore, these securities are not an effective means of locking in long-term interest rates. In addition, when interest rates fall, the pace of mortgage prepayments picks up. These refinanced mortgages are paid off at face value (par), causing a loss for any investor who may have purchased the security at a price above par. In such an environment, this risk limits the potential price appreciation of these securities and can negatively affect the fund`s net asset value. When rates rise, the prices of mortgage-backed securities can be expected to decline, although historically these securities have experienced smaller price declines than comparable quality bonds. In addition, when rates rise and prepayments slow, the effective duration of mortgage-backed securities extend s, resulting in increased volatility.

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Operating policy There is no limit on fund investments in mortgage-backed securities.

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Additional mortgage-backed securities in which the fund may invest include:

Collateralized Mortgage Obligations (CMOs) CMOs are debt securities that are fully collateralized by a portfolio of mortgages or mortgage-backed securities. All interest and principal payments from the underlying mortgages are passed through to the CMOs in such a way as to create some classes with more stable average lives than the underlying mortgages and other classes with more volatile average lives. CMO classes may pay fixed or variable rates of interest, and certain classes have priority over others with respect to the receipt of prepayments.

Stripped Mortgage Securities Stripped mortgage securities (a type of potentially high-risk derivative) are created by separating the interest and principal payments generated by a pool of mortgage-backed securities or a CMO to create additional classes of securities. Generally, one class receives only interest payments (IOs), and another receives principal payments (POs). Unlike with other mortgage-backed securities and POs, the value of IOs tends to move in the same direction as interest rates. The fund can use IOs as a hedge against falling prepayment rates (interest rates are rising) and/o r a bear market environment. POs can be used as a hedge against rising prepayment rates (interest rates are falling) and/or a bull market environment. IOs and POs are acutely sensitive to interest rate changes and to the rate of principal prepayments.

A rapid or unexpected increase in prepayments can severely depress the price of IOs, while a rapid or unexpected decrease in prepayments could have the same effect on POs. Of course, under the opposite conditions these securities ma y appreciate in value. These securities can be very volatile in price and may have lower liquidity than most other mortgage-backed securities. Certain non-stripped CMO classes may also exhibit these qualities, especially those that pay variable rates of interest that adjust inversely with, and more rapidly than, short-term interest rates. In addition, if interest rates rise rapidly and prepayment rates slow more than expected, certain CMO classes, in addition to losing value, can exhibit characteristics of longer-term securities and become more volatile. There is no guarantee that fund investments in CMOs, IOs, or POs will be successful, and fund total return could be adversely affected as a result.

Operating policy Fund investments in stripped mortgage securities are limited to 10% of total assets.

Commercial Mortgage-Backed Securities (CMBS) CMBS are securities created from a pool of commercial mortgage loans, such as loans for hotels, shopping centers, office buildings, apartment buildings, etc. Interest and principal payments from the loans are passed on to the investor according to a schedule of payments. Credit quality depends primarily on the quality of the loans themselves and on the structure of the particular deal. Generally, deals are structured with senior and subordinate classes. The amount of subordination is determined by the rating agencies who rate th e individual classes of the structure. Commercial mortgages are generally structured with prepayment penalties, which greatly reduces prepayment risk to the investor. However, the value of these securities may change because of actual or perceived changes in the creditworthiness of the individual borrowers, their tenants, the servicing agents, or the general state of commercial real estate. There is no limit on fund investments in these securities.

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 or interest rate of a hybrid could be tied (positively or negatively) to the price of some c ommodity, currency, or securities index or another interest rate (each a "benchmark"). Hybrids can be used as an efficient means of pursuing a variety of investment goals, including currency hedging, duration management, and increased total return. Hybrids may or may not bear interest or pay divi

PAGE 25

dends. The value of a hybrid or its interest rate may be a multiple of a benchmark and, as a result, may be leveraged and move (up or down) more steeply and rapidly than the benchmark. These benchmarks may be sensitive to economic and political events, such as commodity shortages and currency devaluations, which cannot be readily foreseen by the purchaser of a hybrid. Under certain conditions, the redemption value of a hybrid could be zero. Thus, an investment in a hybrid may entail significant market risks that are not associated with a similar investment in a traditional, U.S. dollar-denominated bond that has a fixed principal amount and pays a fixed rate or floating rate of interest. The purchase of hybrids also exposes the fund to the credit risk of the issuer of the hybrid. These risks may cause significant fluctuations in the net asset value of the fund.

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.

Deferrable Subordinated Securities

These are securities with long maturities that are deeply subordinated in the issuer`s capital structure. They generally have 30-year maturities and permit the issuer to defer distributions for up to five years. These characteristics give the issuer more financial flexibility than is typically the case with traditional bonds. As a result, the securities may be viewed as possessing certain "equity-like" features by rating agencies and bank regulators. However, the securities are treated as debt securities by market participants, and the fund intends to treat them as such as well. These securities may offer a mandatory put or remarketing option that creates an e ffective maturity date significantly shorter than the stated one. Fund investments will be made in these securities to the extent their yield, credit, and maturity characteristics are consistent with the fund`s investment objective and program.

Private Placements

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

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

Utility Industry Concentration

The fund may, under certain circumstances, invest a substantial amount of its assets in the utility industry. Investments in this industry may be affected by environmental conditions, energy conservation programs, fuel shortages, availability of capital to finance operations and construction programs, and federal and state legislative and regulatory actions. T. Rowe Price believes that any risk to the fund which might result from concentrating in any such industry will be minimized by diversification of the fund`s investments.

Operating policy The fund has no current intention of concentrating in the utility industry.

Fundame ntal policy The fund will, under certain conditions, invest up to 50% of its assets in any one of the following industries: gas utility, gas transmission utility, electric utility, telephone utility, and petroleum.

Types of Investment Management Practices

Rese rve Position

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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.

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Bo rrowing Money and Transferring Assets

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

Fundamental policy Borrowings may not exceed 33xb6 /xb8 % of total assets.

Operating policy Fund transfers of portfolio securities as collateral will not be made except as necessary in connection with permissible borrowings or investments, and then such transfers may not exceed 33xb6 /xb8 % of < font style="font-size:12.0pt;" face="Courier New" color="Black">total assets. Fund purchases of additional securities will not be made when borrowings exceed 5% of total assets.

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 interest rates, bond prices, and foreign currencies; as an efficient means of increasing or decreasing fund overall exposure to a specific part or broad segment of the U.S. market or a foreign market; 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, financ ial indices, and foreign currencies.

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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 nonhedging purposes will not exceed 5% of net asset value. Options on securities: The total market value of securities covering 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 p ut options.

Swaps

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Fund investments may be made in interest rate, index, total return, and credit default swap agreements as well as options on swap agreements or swap options. All of these agreements are considered derivatives and, in certain cases, high-risk derivatives. Swap agreements are two-party contracts under which the fund and a counterparty, such as a broker or dealer, agree to exchange the returns (or
differentials in rates of return) earned or realized on particular predetermined investments or indices. Swaps and swap options can be used for a variety of purposes, including: to manage fund exposure to changes in interest rates and credit quality; as an efficient means of adjusting fund overall exposure to certain markets; in an effort to enhance income or total return or protect the value of portfolio securities; to serve as a cash management tool; and to adjust portfolio duration.

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There are risks in the use of swaps and swap options. Interest rate and currency swaps could result in losses if interest rate or currency changes are not correctly anticipated by the fund. Total return swaps could result in losses if the reference index, security, or investments do not perform as anticipated. Credit default swaps could result in losses if we do not correctly evaluate the creditworthiness of the company on which the credit default swap is based. Swaps and swap options may not always be successful hedges; using them could lower fund total return and the other party to a swap agreement could default on its obligations or refuse to cash out a fund`s investment at a reasonable price, which could turn an expected gain into a loss.

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Operating policies A swap agreement with any single counterparty will not be entered into if the net amount owed or to be received under existing contracts with that party would exceed 5% of total assets, or if the net amount owed or to be received by the fund under all outstanding swap agreements will excee d 10% of total assets. The total market value of securities covering 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.

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Managing Foreign Currency Risk

Investors in foreign s ecurities may attempt to "hedge" their exposure to potentially unfavorable currency changes. The primary means of doing this is through the use of "forwards"— contracts to exchange one currency for another on some future date at a specified exchange rate. However, futures, swaps, and options on these instruments may also be used. In certain circumstances, a different currency may be substituted for the currency in which the investment is denominated, a strategy known as "proxy hedging." The fund may also use these instruments to create a synthetic bo nd— issued in one currency, but with the currency component transformed into another currency. If the fund were to engage in any of these foreign currency transactions, they would be primarily to protect a fund`s foreign securities from adverse currency movements relative to the dollar. Such transactions involve the

PAGE 27

risk that anticipated currency movements will not occur, which could reduce fund total return. There are certain markets, including many emerging markets, where it is not possible to engage in effective foreign currency hedg< font style="font-size:10.0pt;" face="Berkeley Book" color="Black">ing.

Operating policy The fund will not commit more than 20% of total assets to any combination of foreign currency instruments.

Lending of Portfolio Securities

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Fund securities may be lent to broker-dealers, other institutions, or other persons to earn additional income. Risks include the potential insolvency of the broker-dealer or other borrower that could result in delays in recovering 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 33xb6 /xb8 % of total assets.

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When-Issued Securities and Forwards

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The fund may purchase securities on a when-issued or delayed delivery basis or may purchase or sell securities on a forward commitment basis. There is no limit on fund investments in these securities. The price of these securities is fixed at the time of the commitment to buy, but delivery and payment can take place a month or more later. During the interim period, the market value of the securities can fluctuate, and no interest accrues to the purchaser. At the time of delivery, the value of the securities may be more or less than the purchase or sale price. To the extent t he fund remains fully or almost fully invested (in securities with a remaining maturity of more than one year) at the same time it purchases these securities, there will be greater fluctuations in the fund`s net asset value than if the fund did not purchase them.

Portfolio Turnover

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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 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.

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Funds investing in bonds may have higher turnover than funds investing in stocks. Unlike stocks, fixed-maturity bonds require reinvestment. For funds investing in mortgages and callable debt, frequent reinvestment of principal is often required. Common trading strategies, such as mortgage dollar rolls, can increase turnover. Active investment strategies, such as sector rotation and duration management, also necessitate more frequent trading. The fund`s portfolio turnover rates are shown in the Financial Highlights table.

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Financial Highlights

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Table 6, 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 investment in the fund (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 accountants, PricewaterhouseCoopers LLP.

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<R>Table 6 Financial Highlights

	Year ended May 31
	1999	2000	2001	2002	2003

Net asset value,beginning of period	$9.09	$8.50	$8.07	$8.53	$8.70
Income From Investment Operations
Net investment income	0.54	0.52	0.53	0.47	0.37
Net gains or losses on securities (both realized and unrealized)	(0.45)	(0.43)	0.46	0.17	0.52
Total from investment operations	0.09	0.09	0.99	0.64	0.89
Less Distributions
Dividends (from net investment income)	(0.54)	(0.52)	(0.53)	(0.47)	(0.38)
Distributions (fromcapital gains)	(0.14)	—	—	— < /td>	—
Returns of capital	—	—	—	—	—
Total distributions	(0.68)	(0.52)	(0.53)	(0.47)	(0.38)< /font>
Net asset value,end of period	$8.50	$8.07	$8.53	$8.70	$9.21
Total return	1.02%	1.13%	12.54%	7.68%	10.52%
Ratios/Supplemental Data
Net assets, end of period (in millions)	$1,942	$1,633	$1,684	$1,863	$2,266
Ratio of expenses to average net assets	0.72%	0.73%	0.73%	0.72%	0.74%
Ratio of net income to average net assets	6.16%	6.32%	6.30%	5.38%	4.23%
Portfolio turnover rate	94.3%	83.6%	112.1%	222.0%	221.2%

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4Account Requirements and Transaction Information

Tax Identification
Number

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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.

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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 institutional accounts. For procedures regarding employer-sponsored retirement plans, please call T. Rowe Price Trust Company 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 rollover checks that are properly endorsed. In addition, T. Rowe Price does not accept purchases made by credit card check.

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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)

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/p arty has complete 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 trans fer 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

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

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

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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

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, Automatic Asset Builder, and gifts or transfers to minors (UGMA/UTMA) accounts ($100 for Summit Funds)

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PAGE 31

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 Ser vices 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 registered account. Remember, exchanges are purchases and sales for tax purposes. (Exchanges into a state tax-free fun d 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 Information 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.

Some of the T. Rowe Price funds may impose a redemption fee of 0.5% to 2% on shares held for less than six months, one year, or two years, as specified in the prospectus. The fee is paid to the fund.

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

By Phone

Call Shareho lder 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

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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:

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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

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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 o r exchange order; (4) to cancel or rescind any purchase or exchange order (including, but not limited to, orders deemed to result in excessive trading, market timing, fraud, or 5% ownership) upon notice to the shareholder within five business days of the trade or if the written confirmation 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 redemption, small account, maintenance, or other fees charged to a group of shareholders; (9) to act on instructions reasonably believed to be genuine; and (10) to involuntarily redeem your account in cases of threatening conduct, suspected fraudulent or illegal activity, or if the fund is unable, through its customer identification procedures, to verify information provided by you. These actio ns will be taken when, in the sole discretion of management, they are deemed to be in the best interest of the fund.

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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 upo n approval of the fund`s management.

PAGE 33

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 currently offered. Our Services Guide, which we mail to all new shareholders, contains detailed descriptions of these and other services.

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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.

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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 18004927670.

Investing for College Expenses

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

Education Savings Accounts (ESAs) (formerly known as Education IRAs)

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

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 Trus t of Alaska), the Maryland College Investment Plan, and the University of Alaska College Savings Plan. For more information, call toll-free
1-866-521-1894.

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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).

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Web Address
troweprice.com

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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 r etirement plan investors.

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 locations whose addresses are listed on the back cover.

Electronic Transfers

By ACH

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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 Sharehol der Services.

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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.

Checkwri ting

(Not available for equity funds or the High Yield, Emerging Markets 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.

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 savings over full-service brokers.* We also provide a wide range of services, including:

Automated Telephone and C omputer Services

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

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Investor Information

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

</R>

Dividend Reinvestment Service

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

PAGE 35

*Services vary by firm.

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

Investment Information

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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.

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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, MD 21297-1630.

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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, Retirement Planning Kit, and Tax Considerations for Investors.

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.

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 services to best meet your investing needs. We may also share that information with companies that perform administrative 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 which 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.< /div></R>

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 incorporated by reference into this prospectus. Further information about fund investments, including a review of market conditions and the manager`s recent strategies and their impact on performance, is available in the annual and semiannual shareholder reports. To obtain 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 obtain ed 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< /font>
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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F43-040 10/1/03

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T. Rowe Price Associates, Inc.
100 East Pratt Street
< /font>Baltimore, MD 21202

1940 Act File No. 811-2396

October 1, 2003

Prospectus

T. Rowe Price

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New Income Fund—Advisor Class

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A bond fund investing primarily in investment-grade bonds to achieve an attractive level of income. 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	6
		Some Basics of Fixed-Income Investing	8

2		Information About Accounts in T. Rowe Price Funds
		Pricing Shares and Receiving Sale Proceeds	11
		Useful Information on Distributionsand Taxes	12
	Transaction Procedures and Special Requirements	15
		Distribution, Shareholder Servicing, and Recordkeeping Fees	16

3		More About the Fund
		Organization and Management	17
		Understanding Performance Information	19
		Investment Policies and Practices	20
		Financial Highlights	30

4		Investing With T. Rowe Price
		Account Requirements and Transaction Information	31
		Purchasing Additional Shares	32
		Exchanging and Redeeming Shares	32
		Rights Reserved by the Funds	32
		T. Rowe Price Privacy Policy	34

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T. Rowe Price New Income Fund, Inc.

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T. Rowe Price New Income Fund—Advisor Class

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1objective, 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. 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 and administrative services.

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What is the fund`s objective?

The fund seeks the highest level of income consistent with the preservation of capital over time by investing primarily in marketable debt securities.

What is the fund`s principal investment strategy?

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In seeking income and capital preservation, the fund pursues a total return s trategy. Active management of the portfolio can result in bonds being sold at gains or losses. However, over the long-term, the fund seeks to achieve its objective by investing primarily in income-producing securities that possess what we believe are favorable total return (income plus changes in principal) characteristics.

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The fund will inve st at least 80% of the fund`s total assets in income-producing securities, which may include U.S. government and agency obligations, mortgage- and asset-backed securities, corporate bonds, foreign securities, collateralized mortgage obligations (CMOs), and others, including, on occasion, equities.

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All debt securities purchased by the fund must be rated investment grade (AAA, AA, A, or BBB) by at least one major credit rating agency or, if unrated, must have a T . Rowe Price equivalent rating. Up to 15% of total assets may be invested in "split-rated securities," or those rated investment grade by at least one rating agency but below investment grade by others. However, none of the fund`s remaining assets can be invested in bonds rated below investment grade by Standard & Poor`s, Moody`s, or Fitch IBCA, Inc.

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The fund may also invest in other securities, including futures, options, and swaps, in keeping with its objective.

The fund may sell holdings for a variety of reasons, such as to adjust a portfolio`s average maturity or qua lity or to shift assets into higher-yielding securities or different sectors.

For details about the fund`s investment program, please see the Investment Policies and Practices section.

What are the main risks of investing in the fund?

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Interest rate risk This is the risk that an increase in interest rates will likely cause the fund`s share price to fall, resulting in a loss of principal (see Table 3). That`s because the bonds and notes in the fund`s portfolio become less attractive to other investors when securities with higher yields become available. Even GNMAs and o ther securities (whose principal and interest payments are guaranteed) can decline in price if rates rise. Generally speaking, the longer a bond`s maturity, the greater its potential for price declines if rates rise and for price gains if rates fall. Because the fund may invest in bonds of any maturity, it carries more interest rate risk than short-term bond funds. If the fund purchases longer-maturity bonds and interest rates rise unexpectedly, the fund`s price could decline.

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Credit risk This is the chance that any of the fund`s holdings will have their credit ratings downgraded or will default (fail to make scheduled interest or principal payments), potentially reducing the fund`s income level and share price. While the fund's overall credit quality is high, it can own BBB securities, which are more susceptible to adverse economic conditions and may have speculative characteristics.

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Investment-grade (AAA to BBB) securities have relatively low financial risk and a relatively high probability of future payment. However, securities rated BBB are more susceptible to adverse economic conditions and may have speculative characteristics. Securities rated below investment grade (junk or high< font style="font-size:12.0pt;" face="Courier New" color="Black">-yield bonds) should be regarded as speculative because their issuers are more susceptible to financial setbacks and recession than more creditworthy companies. If the fund invests in securities whose issuers develop unexpected credit problems, the fund`s price could decline.

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The fund may continue to hold a security that has been downgraded or loses its investment-grade rating after purchase.

Foreign investing risk To the extent the fund holds foreign bonds, it will be subject to special risks, whether the bonds are denominated in U.S. dollars or foreign currencies. These risks include potentially adverse political and economic
developments overseas, greater volatility, lower liquidity, and the possibility that foreign currencies will decline against the dollar, lowering the value of securities denominated in those currencies and possibly the fund`s share price.

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Prepayment risk and exten sion risk A mortgage-backed bond, unlike most other bonds, can be hurt when interest rates fall because homeowners tend to refinance and prepay principal. Receiving increasing prepayments in a falling interest rate environment causes the average maturity of the portfolio to shorten, reducing its potential for price gains. It also requires the fund to reinvest proceeds at lower interest rates, which reduces the po rtfolio`s total return, reduces its yield, and may even cause certain bond prices to fall below the level the fund paid for them, resulting in a capital loss. Any of these developments could result in a decrease in the fund`s income, share price, or total return.

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Extension risk refers to a rise in interest rates that causes a fund`s average maturity to lengthen unexpectedly due to a drop in mortgage prepayments. This would increase the fund`s sensitivity to rising rates and its potential for price declines.

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Derivatives risk Shareholders are also exposed to derivatives risk, the potential that our investments in these complex and volatile instruments could affect the fund`s share price. In addition to collateralized mortgage obligations and better-known instruments such as swaps and futures, other derivatives that may be used in limited fashion by the fund include interest-only (IO) and principal-only (PO) securities known as "strips." Some of these instruments can be highly volatile, and their value can fall dramatically in response to rapid or unexpected changes in the mortgage, interest rate, or economic environment.

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

The share price and income level of the fund will fluctuate with changing market conditions and interest rate levels. 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. The fund may be appropriate for you if you seek an attractive level of income and are willing to accept the risk of a declining share price when interest rates rise. Steadily reinvestin g the fund`s income is a conservative strategy for building capital over time. If you are investing primarily for safety and liquidity, you should consider a money market fund.

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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New Income Fund—Advisor Class began operations on September 30, 2002, and does not have a full calendar year of performance history. As a point of comparison, however, the following bar chart and table show calendar year returns for the oldest existing class of the New Income Fund. Because the New Income Fund—Advisor

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Class is expected to have higher expenses than the oldest existing class of the New Income Fund, its performance, had it existed over the periods shown, would have been lower. The oldest existing class of the New Income Fund and the New Income Fund—Advisor Class share the same portfolio.

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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.

The fund`s return for the six months ended 6/30/03 was 5.26%.

<R>Table 1 Average Annual Total Returns

	Periods ended December 31, 2002
	1 year	5 years	10 years
New Income Fund
Returns before taxes	7.48%	5.96%	6.61%
Returns after taxes on distributions	5.50	3.48	3.96
Returns after taxes on distributions and sale of fund shares	4.55	3.52	3.97
Lehman Brothers U.S. Aggregate Index	10.26	7.55	7.51
Lipper Corporate Debt Funds A Rated Average	8.42	6.08	6.83

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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. All after-tax returns are calculated using the historical highest individual federal marginal income tax and capital gains rates. They do not reflect the impact of s tate 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 ind exes do not include expenses, which are deducted from fund returns, or taxes.

Lehman Brothers U.S. Aggregate Index tracks investment-grade corporate and government bonds.

What fees or expenses will I pay?

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

	Annual fund operating expenses (expenses that are deducted from fund assets)
Management fee	0.47%
Distribution and service (12b-1) fees	0.25%
Other expenses	0.18%
Total annual fund operating expenses	0.90%a

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aTo limit the class`s expenses during its initial period of operations, T. Rowe Price is contractually obligated to bear any expenses (other than management fees and certain other portfolio level expenses) through September 30, 2004, that would cause the class`s ratio of expenses to average net assets to exceed 0.90%. Expenses paid or assumed under this agreement are subject to reimbursement to T. Rowe Price by the fund whenever the class`s expense ratio is below 0.90%; however, no reimbursement will be made after September 30, 2006, or if it would result in the expense ratio exceeding 0.90%. Any amounts reimbursed will have the effect of increasing fees otherwise 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
$92	$287	$498	$1,108

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other INFORMATION about the fund

W hat are the fund`s potential rewards?

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How does the portfolio manager try to reduce risk?

Consistent with the fund`s objective, the portfolio manager uses various tools to try to reduce risk and increase total return, including:

Diversification of assets to reduce the impact of a single holding or sector on a fund`s net asset value.

Thorough credit research by our own analysts.

Is the fund a substitute for a money market fund?

Do mortgage-backed securities differ from other high-quality bonds?

Yes, in one major respect. Non-mortgage bonds generally repay principal (face value of the bond) when their maturity date is reached, but most mortgage-backed securities repay principal continually as homeowners make mortgage payments. Homeowners have the option of paying either part or all of the loan balance before maturity, perhaps to refinance or buy a new home. As a result, the effective maturity of a mortgage-backed security is virtually always shorter than its stated maturity.

For example, a new GNMA certificate backed by 30-year, fixed-rate mortgages will generally have a far shorter life than 30 years — probably 12 or less. Therefore , it will usually be about as volatile as a 10-year Treasury note. It is possible to estimate the average life of an entire mortgage pool backing a particular security with some accuracy, but not with certainty.

Why are yields on mortgage-backed securities higher than yields on Treasuries of similar maturity?

What are derivatives and can the fund invest in them?

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A derivative is a financial instrument whose value is derived from an underlying security such as a stock or bond or from a market benchmark, such as an interest rate index. Many types of investments representing a wide range of risks and potential rewards are derivatives, including conventional instruments such as callable bonds, futures, and options, as well as more exotic investments such as swaps and structured notes. Investment managers have used derivatives for many years.

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Derivatives will be used only if the expected risks and rewards are consistent with fund obj ectives, policies, and overall risk profile as described in this prospectus. The fund uses derivatives in situations in which they may help accomplish the following: hedge against decline in principal value, increase yield, invest in eligible asset classes with greater efficiency and lower cost than is
possible through direct investment, or adjust portfolio duration.

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We will not invest in any high-risk, highly leveraged derivative that we believe would cause the portfolio to be more volatile than a long-term, investment-grade bond.

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

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

some basics of Fixed-Income investing

Is a fund`s yield fixed or will it vary?

It will vary. The yield is calculated every day by dividing a fund`s net income per share, expressed at annual rates, by the share price. Since both income and share price will fluctuate, a fund `s yield will also vary. (Although money fund prices are stable, income is variable.)

Is yield the same as total return?

What is credit quality and how does it affect yield?

Credit quality refers to a bond issuer`s expected ability to make all required interest and principal payments on time. Because highly rated issuers represent less risk, they can borrow at lower interest rates than less creditworthy issuers. Therefore, a fund investing in high-quality securities should have a lower yield than an otherwise comparable fund investing in lower-quality securities.

What is meant by a bond fund`s maturity?

Every bond has a stated maturity date when the issuer must repay the bond`s entire principal value to the investor. However, many bonds are "callable," meaning their principal can be repaid earlier than, on, or after < font style="font-size:10.0pt;" face="Berkeley Book" color="Black">specified call dates. Bonds are most likely to be called when interest rates are falling because the issuer can refinance at a lower rate, just as a homeowner refinances a mortgage. In that environment, a bond`s "effective maturity" is usually its nearest call date. For example, the rate at which homeowners pay down their mortgage principal determines the effective maturity of mortgage-backed bonds.

What is meant by a bond fund`s duration?

Duration is a calculation that seeks to measure the price sensitivity of a bond or a bond fund to changes in interest rates. It is expressed in years, like maturity, but it is a better indicator of price sensitivity than maturity because it takes into account the time value of cash flows generated over the bond`s life. Future interest and principal payments are discounted to reflect their present value and then are multiplied by the number of years they will be received to produce a value expressed in years — the duration. "Effective" duration takes into account call features and sinking fund payments that may shorten a bond`s life.

How is a bond`s price affected by changes in interest rates?

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<R>Table 3 How Interest Rates Affect Bond Prices

		Price of a $1,000 face value bond if interest rates:
Bond maturity	Coupon	Increase		Decrease
		1 percent	2 percent	1 percent	2 percent
2 years	1.30%	$981	$962	$1,020	NA
5 years	2.41	954	911	1,048	$1,099
10 years	3.51	920	848	1,088	1,185
30 years	4.56	855	739	1,183	1,417

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2As 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 sha res are priced

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 the New York Stock Exchange is open for business. To calculate the NAV, the fund`s assets are valued and totaled, liabilities are subtracted, and each class`s proportionate share of the balance, calle d net assets, is divided by the number of shares outstanding of that class. Market values are used to price stocks and bonds.

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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, cut-off times, and other applicable 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 good form by 4 p.m. ET and 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 price d 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 good form on either the next or third business day after receipt, depending on the ar rangement with the intermediary. Under certain circumstances and when deemed to be in the fund`s best interests, proceeds may not be sent to intermediaries 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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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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No interest will accrue on amounts represented by uncashed distribution or redemption checks.

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Income dividends

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The funds declare and pay dividends (if any) quarterly for the Equity Income Fund—Advisor Class; declare daily and pay monthly for the High Yield Fund—Advisor Class, International Bond Fund—Advisor Class, New Income Fund—Advisor Class, and Tax-Free Income Fund—Advisor Class; and declare and pay annually for all other Advisor Classes.

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Capital gains 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 t han 60 days during the 120-day period beginning 60 days before the ex-dividend date. Little, if any, of the ordinary dividends paid by the bond fund Advisor Classes are 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 dividends 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 bond fund Advisor Classes are expected to qualify for this deduction.

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Note: The regular monthly income 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 conditions to invest in nonexempt 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. For shareholders who receive Social Security benefits, the receipt of tax-exempt interest 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 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 still a sale for tax purposes.

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Note: 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.

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Taxes on fund distributions

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capital gain distribution 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 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 be able to meet the requirements to pass through foreign income taxes paid.

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Note: 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. Therefore, to the extent the Tax-Free Income Fund invests in these securities, the likelihood of a taxable gain distribution will be increased.

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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 ma y 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 capital gain or dividend distribution

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If you buy shares shortly befor e 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 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 manner, your purchase may be canceled. Any losses or expenses incurred by the fund or transf er agent will be the responsibility of the intermediary. 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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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 previou sly mentioned figures with securities from the fund.

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Excessive Trading

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T. Rowe Price may bar excessive traders from purchasing shares.

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Frequent trades or market timing in your account or accounts controlled by you can disrupt management of the fund and raise its costs. To deter such activity, each fund has adopted the following excessive trading policy. Transactions accepted by intermediaries in violation of these policies or from persons believed to be market timers are subject to rejection or cancellation by the funds.

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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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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 perform.

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3Organization and Management

How is the fund organized?

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Shareholders benefit from T. Rowe Price`s 66 years of investment management experience.

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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:

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

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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.

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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.

Portfolio Management

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The fund has an Investment Advisory Committee with the following members: Daniel O. Shackelford, Chairman, Connice A. Bavely, Brian J. Brennan, Patrick S. Cassidy, Alan D. Levenson, Mary J. Miller, Edmund M. Notzon III, Vernon A. Reid, Jr., William T. Reynolds, and Robert M. Rubino. The committee chairman has day-to-day responsibility for managing the portfolio and works with the committee in developing and executing the fund`s investment program. Mr. Shackelford became chairman of the fund`s committee in 2002. He joined T. Rowe Price in 1999 and has been managing investments since that time.

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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, the Retirement Funds, and any institutional, index, or private label mutual funds). The group fee schedule (shown below) is graduated, declining as the asset total rises, so shareholders 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

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*Represents a blended group fee rate containing various breakpoints.

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Understanding Performance Information

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

Total Return

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

Cumulative Total Return

Average Annual Total Return

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

Yield

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The current or "dividend" yield on a fund or any investment tells you the relationship between the investment`s current level of annual income and its price on a particular day. The dividend yield reflects the actual income paid to shareholders for a given period, annual ized and divided by the price at the end of the period. For example, a fund providing $5 of annual income per share and a price of $50 has a current yield of 10%. Yields can be calculated for any time period.

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For bond funds, the advertised or SEC yield is found by determining the net income per share (as defined by the Securities and Exchange Commission) earned by a fun d during a 30-day base period and dividing this amount by the share price on the last day of the base period. The SEC yield—also called the
standardized yield—may differ from the dividend yield.

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Investment Policies and Practices

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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.

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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

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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 investment management practices.

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Fundamental policy The fund will not purchase a security if, as a result, with respect to 75% of its total assets, more than 5% of its total assets would be invested in securities of a single issuer or more than 10% of the outstanding
voting securities of the issuer would be held by the fund. These limitations do not apply to the fund`s purchase of securitie s issued or guaranteed by the U.S. government, its agencies, or instrumentalities.

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Bonds

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Conventional fixed-rate bonds offer a coupon rate for a fixed maturity wi th no adjustment for inflation. Real rate of return bonds also offer a fixed coupon but include ongoing inflation adjustments for the life of the bond.

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Bonds may be unsecured (backed by the issuer`s general creditworthiness only) or secured (also backed by specified collateral). Bonds include asset- and mortgage-backe d securities.

Certain bonds have interest rates that are adjusted periodically. These interest rate adjustments tend to minimize fluctuations in the bonds` principal values. The maturity of those securities may be shortened under certain specified conditions.

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Bond ratings are not guarantees. They are estimates of an issuer`s financial strength. Ratings can change at any time due to real or perceived changes in an issuer`s credit or financial fundamentals.

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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 incom e for dividend payments and on assets should the company be liquidated. After other claims are satisfied, common stockholders participate in company profits on

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Convertible Securities and Warrants

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Operating policy Without regard to quality, the fund may invest up to 25% of its total assets (not including cash) in p referred and common stocks and convertible securities, convertible into or which carry warrants for common stocks or other equity securities.

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Foreign Securities

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Investments may be made in foreign securities. These include nondollar-denominated securities traded outside of the U.S. and dollar-denominated securities of foreign issuers traded in the U.S. (such as Yankee bonds). Investing in foreign securities involves special risks that can increase the potential for losses. These include: exposure to potentially adverse local, political, and economic developments such as war, political instability, hyperinflation, currency devaluations, and overdependence on particular industries; government interference i n markets such as nationalization and exchange controls, expropriation of assets, or imposition of punitive taxes; potentially lower liquidity and higher volatility; possible problems arising from accounting, disclosure, settlement, and regulatory practices and legal rights that differ from U.S. standards; and the chance that fluctuations in foreign exchange rates will decrease the investment`s value (favorable changes can increase its value). These risks are heightened for investments in developing countries.

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Asset-Backed Securi ties

An underlying pool of assets, such as credit card or automobile trade receivables or corporate loans or bonds, backs these bonds and provides the interest and principal payments to investors. On occasion, the pool of assets may also include a swap obligation, which is used to change the cash flows on the underlying assets. As an example, a swap may be used to allow floating rate assets to back a fixed-rate obligation. Credit quality depends primarily on the quality of the underlying assets, the level of credit support, if any, provided by the structure or by a third-party insurance wrap, and the credit quality of the swap counterparty, if any. The underlying assets (i.e., loans) are sometimes subject to prepayments, which can shorten the security`s weighted average life and may lower its return. The value of these securities also may change because of actual or perceived changes in the creditworthiness of the individual borrowers, the originator, the servicing agent, the financial institution providing the credit support, or the swap counterparty. There is no limit on fund investments in these securities.

Mortgage-Backed Securities

The fund may invest in a variety of mortgage-backed securities. Mortgage lenders pool individual home mortgages with similar characteristics to back a certificate or bond, which is sold to investors such as the fund. Interest and principal payments generated by the underlying mortgages are passed through to the investors. The "big three" issuers are the Government National Mortgage Association (GNMA), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac). GNMA certificates are backed by the full faith and credit of the U.S. government, while others, such as Fannie Mae and Freddie Mac certificates, are only supported by the ability to borrow from the U.S. Treasury or by the credit of the agency. Private mortgage bankers and other institutions also issue mortgage-backed securities.

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Operating policy There is no limit on fund investments in mortgage-backed securities.

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Additional mortgage-backed securities in which the fund may invest include:

Collateralized Mortgage Obligations (CMOs) CMOs are debt securities that are fully collateraliz ed by a portfolio of mortgages or mortgage-backed securities. All interest and principal payments from the underlying mortgages are passed through to the CMOs in such a way as to create some classes with more stable average lives than the underlying mortgages and other classes with more volatile average lives. CMO classes may pay fixed or variable rates of interest, and certain classes have priority over others with respect to the receipt of prepayments.

Stripped Mortgage Securities Stripped mortgage securities (a type of potentially high-risk derivative) are created by separating the interest and principal payments generated by a pool of mortgage-backed securities or a CMO to create additional classes of securities. Generally, one class receives only interest payments (IOs), and another receives principal payments (POs). Unlike with other mortgage-backed securities and POs, the value of IOs tends to move in the same direction as interest rates. The fund can use IOs as a hedge against falling prepayment rates (interest rates are rising) and/or a bear market environment. POs can be used as a hedge against rising prepayme nt rates (interest rates are falling) and/or a bull market environment. IOs and POs are acutely sensitive to interest rate changes and to the rate of principal prepayments.

A rapid or unexpected increase in prepayments can severely depress the price of IOs, while a rapid or unexpected decrease in prepayments could have the same effect on POs. Of course, under the opposite conditions these securities may appreciate in value. These securities can be very volatile in price and may h ave lower liquidity than most other mortgage-backed securities. Certain non-stripped CMO classes may also exhibit these qualities, especially those that pay variable rates of interest that adjust inversely with, and more rapidly than, short-term interest rates. In addition, if interest rates rise rapidly and prepayment rates slow more than expected, certain CMO classes, in addition to losing value, can exhibit characteristics of longer-term securities and become more volatile. There is no guarantee that fund inves tments in CMOs, IOs, or POs will be successful, and fund total return could be adversely affected as a result.

Operating policy Fund investments in stripped mortgage securities are limited to 10% of total assets.

Commercial Mortgage-Backed Securities (CMBS) CMBS are securities cr eated from a pool of commercial mortgage loans, such as loans for hotels, shopping centers, office buildings, apartment buildings, etc. Interest and principal payments from the loans are passed on to the investor according to a schedule of payments. Credit quality depends primarily on the quality of the loans themselves and on the structure of the particular deal. Generally, deals are structured with senior and subordinate classes. The amount of subordination is determined by the rating agencies who rate the individual classes of the structure. Commercial mortgages are generally struc tured with prepayment penalties, which greatly reduces prepayment risk to the investor. However, the value of these securities may change because of actual or perceived changes in the creditworthiness of the individual borrowers, their tenants, the servicing agents, or the general state of commercial r eal estate. There is no limit on fund investments in these securities.

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 or interest rate of a hybrid could be tied (positively or negatively) to the price of some commodity, currency, or securities index or another interest rate (each a "bench mark"). Hybrids can be used as an efficient means of pursuing a variety of investment goals, including currency hedging, duration management, and increased total return. Hybrids may or may not bear interest or pay divi

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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.

Deferrable Subordinated Securities

Private Placements

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

Utility Industry Concentration

Operating policy The fund has no current intention of concentrating in the utility industry.

Types of Investment Management Practices

Rese rve Position

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Bo rrowing Money and Transferring Assets

Fundamental policy Borrowings may not exceed 33xb6 /xb8 % of total assets.

Futures and Options

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Swaps

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Managing Foreign Currency Risk

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Operating policy The fund will not commit more than 20% of total assets to any combination of foreign currency instruments.

Lending of Portfolio Securities

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Fundamental policy The value of loaned securities may not exceed 33xb6 /xb8 % of total assets.

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When-Issued Securities and Forwards

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Portfolio Turnover

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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 period 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 investment in the fund (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 accountants, PricewaterhouseCoopers LLP.

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<R>Table 4 Financial Highlights < td style="">
< td style="">

		9/30/02 through 5/31/03


Net asset value,beginning of period		< /font>$8.84
Income From Investment Operations
Net investment income		0.23a
Net gains or losses on securities (both realized and unrealized)		0.38
Total from investment operations		0.61
Less Distributions
Dividends (from net investment income)		(0.24)
Distributions (fromcapital gains)		—
Returns of capital		—
Total distributions		(0.24)
Redemption fees addedto paid in capital		—
Net asset value,end of period		$9.21
Total return		7.02%a
Ratios/Supplemental Data
Net assets, end of period(in thousands)	$107
Ratio of expenses to average net assets		0.90%ab
Ratio of net income to average net assets		2.61%ab
Portfolio turnover rate		221.2%b

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aExcludes expenses in excess of a 0.90% contractual expense limitation in effect through September 30, 2004.

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bAnnualized.

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4Account Requirements and Transaction Information

Tax Identification
Number

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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.

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

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 trans fers to minors (UGMA/UTMA) accounts

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:

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

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Complete a New Account Form and mail it to one of the appropriate addresses listed below. Intermediaries 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

T. Rowe Price Financial Institution Services
Mail Code: OM-17603
4515 Painters Mill Road
Owings Mills, MD 21117-4842

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 registered 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.

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 (including, but not limited to, orders deemed to result in excessive trading, market timing, fraud, or 5% ownership) upon notice to the shareholder within five business days of the trade or if the written confirmation 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 redemption, small account, maintenance, or other fees charged to a g roup of shareholders; (9) to act on instructions reasonably believed to be genuine; and (10) to involuntarily redeem your account in cases of threatening conduct, suspected fraudulent or illegal activity, or if the fund is unable, through its customer identification procedures, to verify information provided by you. These actions will be taken when, in the sole discretion of management, they are deemed to be in the best interest of the fund.

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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 services to best meet your inves ting needs. We may also share that information with companies that perform administrative 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 which 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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This Privacy Policy applies to the following T. Rowe Price family of companies:

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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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1940 Act File No. 811-2396

E243-040 10/1/03

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

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 Re ference 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.

October 1, 2003

Prospectus

T. Rowe Price

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New Income Fund—R Cla ss

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A bond fund investing primarily in investment-grade bonds to achieve an attractive level of income. 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 co ntrary is a criminal offense.

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1		About the Fund
		Objective, Strategy, Risks, and Expenses	1
		Other Information About the Fund	6
		Some Basics of Fixed-Income Investing	8

2		Information About Accounts in T. Rowe Price Funds
		Pricing Shares and Receiving Sale Proceeds	10
		Useful Information on Distributionsand Taxes	11
	Transaction Procedures and Special Requirements	13
		Distribution, Shareholder Servicing, and Recordkeeping Fees	15

3		More About the Fund
		Organization and Management	16
		Understanding Performance Information	18
		Investment Policies and Practices	19
		Financial Highlights	29

4		Investing With T. Rowe Price
		Account Requirements and Transaction Information	30
		Purchasing Additional Shares	31
		Exchanging and Redeeming Shares	31
		Rights Reserved by the Funds	31
		T. Rowe Price Privacy Policy	33

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T. Rowe Price New Income Fund, Inc.

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T. Rowe Price New Income Fund—R Class

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1objective, 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. 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.

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What is the fund`s objective?

The fund seeks the highest level of income consistent with the preservation of capital over time by investing primarily in marketable debt securities.

What is the fund`s principal investment strategy?

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The fund will invest at least 80% of the fund`s total assets in income-producing securities, which may include U.S. government and agency obligations, mortgage- and asset-backed securities, corporate bonds, foreign securities, collateralized mortgage obligations (CMOs), and others, including, on occasion, equities.

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All debt securities purchased by the fund must be rated investment grade (AAA, AA, A, or BBB) by at least one major credit rating agency or, if unrated, must have a T. Rowe Price equivalent rating. Up to 15% of total assets may be invested in "split-rated securities," or those rated investment grade by at least one rating agency but below investment grade by others. However, none of the fund`s remaining assets can be invested in bonds rated below investment grade by Standard & Poor`s, Moody`s, or Fitch IBCA, Inc.

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The fund has considerable flexibility in seeking high yields. There are no maturity restrictions, so we can purchase longer-term bonds, which tend to have higher yields than shorter-term issues. However, the portfolio`s weighted average m aturity is expected to be between four and 15 years. In addition, when there is a large yield difference between the various quality levels, we may move down the credit scale and purchase lower-rated bonds with higher yields. When the difference is small or the outlook warrants, we may concentrate investments in higher-rated issues.

The fund may also invest in other securities, including futures, options, and swaps, in keeping with its objective.

The fund may sell holdings for a variety of reasons, such as to adjust a portfolio`s average maturity or quality or to shift assets into higher-yielding securities or different sectors.

For details about the fund`s investment program, please see the Investment Policies and Practices section.

What are the main risks of investing in the fund?

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Interest rate risk This is the risk that an increase in interest rates will likely cause the fund`s share price to fall, resulting in a loss of principal (see Table 3). That`s because the bonds and notes in the fund`s portfolio become less attractive to other investors when securities with higher yields become available. Even GNMAs and other securities (whose principal and interest payments are guaranteed) can decline in price if rates rise. Generally speaking, the longer a bond`s maturity, the greater its potential for price declines if rates rise and for price gains if rates fall. Because the fund may invest in bonds of any maturity, it carries more interest rate risk than short-term bond funds. If the fund purchases longer-maturity bonds and interest rates rise unexpectedly, the fund`s price could decline.

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Credit risk This is the chance that any of the fund`s holdings will have their credit ratings downgraded or will default (fail to make scheduled interest or principal payments), potentially reducing the fund`s income level and share price. While the fund`s overall credit quality is high, it can own BBB securities, which are more susceptible to adverse economic conditions and may have speculative characteristics.

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The fund may continue to hold a security that has been downgraded or loses its investment-grade rating after purchase.

Foreign investing risk To the extent the fund holds foreign bonds, it will be subject to special risks, whether the bonds are denominated in U.S. dollars or foreign currencies. These risks include potentially adverse political and economic
developments overseas, greater volatility, lower liquidity, and the possibility that foreign currencies will decline against the dollar, lowering the value of securities denominated in those currencies and possibly the fund`s share price.

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Prepayment risk and exten sion risk A mortgage-backed bond, unlike most other bonds, can be hurt when interest rates fall because homeowners tend to refinance and prepay principal. Receiving increasing prepayments in a falling interest rate environment causes the average maturity of the portfolio to shorten, reducing its potential for price gains. It also requires the fund to reinvest proceeds at lower interest rates, which reduces the po rtfolio`s total return, reduces its yield, and may even cause certain bond prices to fall below the level the fund paid for them, resulting in a capital loss. Any of these developments could result in a decrease in the fund`s income, share price, or total return.

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Extension risk refers to a rise in interest rates that causes a fund`s average maturity to lengthen unexpectedly due to a drop in mortgage prepayments. This would increase the fund`s sensitivity to rising rates and its potential for price declines.

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

The share price and income level of the fund will fluctuate with changing market conditions and interest rate levels. 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. The fund may be appropriate for you if you seek an attractive level of income and are willing to accept the risk of a declining share price when interest rates rise. Steadily reinvestin g the fund`s income is a conservative strategy for building capital over time. If you are investing primarily for safety and liquidity, you should consider a money market fund.

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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New Income Fund—R Class began operations on September 30, 2002, and does not have a full calendar year of pe rformance history. As a point of comparison, however, the following bar chart and table show calendar year returns for the oldest existing class of the New Income Fund. Because the New Income Fund—R Class is expected to have higher expenses than the oldest existing class of the New Income Fund, its performance, had it existed over the periods shown, would have been lower. The oldest existing class of the New Income Fund and the New Income Fund—R Class share the same portfolio.

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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.

In addition, the average annual total return table shows hypothetical after-tax returns to suggest how taxes paid by the shareholder m ay 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.

The fund`s return for the six months ended 6/30/03 was 5.26%.

<R>Table 1 Average Annual Total Returns

	Periods ended December 31, 2002
	1 year	5 years	10 years
New Income Fund
Returns before taxes	7.48%	5.96%	6.61%
Returns after taxes on distributions	5.50	3.48	3.96
Returns after taxes on distributions and sale of fund shares	4.55	3.52	3.97
Lehman Brothers U.S. Aggregate Index	10.26	7.55	7.51
Lipper Corporate Debt Funds A Rated Average	8.42	6.08	6.83

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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. All after-tax returns are calculated using the historical highest individual fe deral marginal income tax and capital gains rates. They 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.

Lehman Brothers U.S. Aggregate Index tracks investment-grade corporate and government bonds.

What fees or expenses will I pay?

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

	Annual fund operating expenses (expenses that are deducted from fund assets)
Management fee	0.47%
Distribution and service (12b-1) fees	0.50%
Other expenses	0.18%
Total annual fund operating expenses	1.15%a

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

aTo limit the class`s expenses during its initial period of operations, T. Rowe Price is contractually obligated to bear any expenses (other than management fees and certain other portfolio level expenses) through September 30, 2004, that would cause the class`s ratio of expenses to average net assets to exceed 1.15%. Expenses paid or assumed under this agreement are subject to reimbursement to T. Rowe Price by the fund whenever the class`s expense ratio is below 1.15%; however, no reimbursement will be made after September 30, 2006, or if it would result in the expense ratio exceeding 1.15%. Any amounts reimbursed will have the effect of increasing fees otherwise 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 c ompare 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	$365	$633	$1,398

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other INFORMATION about the fund

What are the fund`s potential rewards?

How does the portfolio manager try to reduce risk?

Consistent with the fund`s objective, the portfolio manager uses various tools to try to reduce risk and increase total return, including:

Diversification of assets to reduce the impact of a single holding or sector on a fund`s net asset value.

Thorough credit research by our own analysts.

Is the fund a substitute for a money market fund?

Do mortgage-backed securities differ from other high-quality bonds?

Yes, in one major respect. Non-mortgage bonds generally repay principal (face value of the bond) when their maturity date is reached, but most mortgage-backed securities repay principal continually as homeowners make mortgage payments. < /font>Homeowners have the option of paying either part or all of the loan balance before maturity, perhaps to refinance or buy a new home. As a result, the effective maturity of a mortgage-backed security is virtually always shorter than its stated maturity.

Why are yields on mortgage-backed securities higher than yields on Treasuries of similar maturity?

What are derivatives and can the fund invest in them?

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A derivative is a financial instrument whose value is derived from an underlying security such as a stock or bond or from a market benchmark, such as an interest rate index. Many types of investments representing a wide range of risks and potential rewards are derivatives, including conventional instruments such as callable bonds, futures, and options, as well as more exotic investments such as swaps and structured notes. Investment managers have used derivatives for many years.

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Derivatives will be used only if the expected risks and rewards are consistent with fund objectives, policies, and overall risk profile as described in this prospectus. The fund uses derivatives in situations in which they may help accomplish the following: hedge against decline in principal value, increase yield, < font style="font-size:12.0pt;" face="Courier New" color="Black">invest in eligible asset classes with greater efficiency and lower cost than is possible through direct investment, or adjust portfolio duration.

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We will not invest in any high-risk, highly leveraged derivative that we believe would cause the portfolio to be more volatile than a long-term, investment-grade bond.

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

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

some basics of Fixed-Income investing

Is a fund`s yield fixed or will it vary?

Is yield the same as total return?

Not for b ond funds. A fund`s total return is the result of reinvested distributions from income and capital gains and the change in share price for a given period. Income is always a positive contributor to total return and can either enhance a rise in share price or help offset a price decline.

What is credit quality and how does it affect yield?

Credit quality refers to a bond issuer`s expected ability to make all required interest and principal payments on time. Because highly rated issuers represent less risk, they can borrow at lower interest rates than less creditworthy issuers. Therefore, a fund investing in high-quality securities should have a lower yield than an otherwise comparable fund investing in lower-quality securities.

What is meant by a bond fund`s maturity?

Every bond has a stated maturity date when the issuer must repay the bond`s entire principal value to the investor. However, many bonds are "callable," meaning their principal can be repaid earlier than, on, or after specified call dates. Bonds are most likely to be called when interest rates are falling because the issuer can refinance at a lower rate, just as a homeowner refinances a mortgage. In that environment, a bond`s "effective maturity" is usually its nearest call date. For example, the rate at which homeowners pay down their mortgage principal determines the effective maturity of mortgage-backed bonds.

What is meant by a bond fund`s duration?

Duration is a calculation that seeks to measure the price sensitivity of a bond or a bond fund to changes in interest rates. It is expressed in years, like maturity, but it is a better indicator of price sensitivity than maturity because it takes into account the time value of cash flows generated over the bond`s life. Future
interest and principal payments are discounted to reflect their present value and then are multiplied by the number of years they will be received to produce a value expressed in years — the duration. "Effective" duration tak es into account call features and sinking fund payments that may shorten a bond`s life.

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How is a bond`s price affected by changes in interest rates?

<R>Table 3 How Interest Rates Affect Bond Prices

		Price of a $1,000 face value bond if interest rates:
Bond maturity	Coupon	Increase		Decrease
		1 percent	2 percent	1 percent	2 percent
2 years	1.30%	$981	$962	$1,020	NA
5 years	2.41	954	911	1,048	$1,099
10 yea rs	3.51	920	848	1,088	1,185
30 years	4.56	855	739	1,183	1,417

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2As 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 Pr oceeds

How and when shares are priced

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 the New York Stock Exchange is open for business. To calculate the NAV, the fund`s assets are valued and totaled, liabilities are su btracted, 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.

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The securities of funds investing in foreign markets are usually valued on the basis of the most recent closing market prices at 4 p.m. ET. Most foreign markets close before that time. For securities primarily traded in the Far East, for example, the most recent closing prices may be as much as 15 hours old at 4 p.m. Normally, developments that could affect the values of portfolio securities that occur between the close of the foreign market and 4 p.m. ET will not be reflected in a fund`s NAV. However, if a fund determines that such developments are so sig nificant that they will, in its judgment, clearly and materially affect the value of the fund`s securities, the fund may adjust the previous closing prices to reflect what it believes to be the fair value of the securities as of 4 p.m. ET. In making these adjustments, the fund reviews a variety of factors, including the performance of U.S. securities markets. A fund may fair value securities in other situations, for example, when a particular foreign market is closed but the fund is open.

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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 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, cut-off times, and other applicable procedures for these transactions. 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 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.

How proceeds are received

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Normally, the fund transmits proceeds to intermediaries for redemption orders received in good 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 intermediaries for up to seven calendar days after receipt of the redemption order. You must contact your intermedia ry about procedures for receiving your redemption proceeds.

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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

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

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Income dividends

The funds declare and pay dividends (if any) quarterly for the Equity Income Fund—R Class ; declare daily and pay monthly for the New Income Fund—R Class; and declare and pay annually for all other R Classes.

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Capital gains 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.

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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.

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 120-day period beginning 60 days before the ex-dividend date. Little, if any, of the ordinary dividends paid by the bond fund R Classes are 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 bond fund R Classes are 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 o r loss. An exchange from one fund to another is still a sale for tax purposes.

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 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 to a long-term loss to the extent of any long-term capital gain distribution 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 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 t axes 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 be able to meet the requirements to pass through foreign income taxes paid.

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.

Tax effect of buying shares before a capital gain or dividend 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 capital gains or income and unrealized appreciation, which may result in future t axable 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

Purchase Conditions for Intermediaries

Nonpayment

If the fund receives a check o r ACH transfer that does not clear or the payment is not received in a timely manner, your purchase may be canceled. Any losses or expenses incurred by the fund or transfer agent will be the responsibility of the intermediary. 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

Excessive Trading

T. Rowe Price may bar excessive traders from purchasing shares.

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You can make one purchase and one sale or one s ale and one purchase involving the same fund within any 120-day period. If you exceed this limit or if you hold fund shares for less than 60 calendar days, you may be barred indefinitely and without further notice from further purchases of the T. Rowe Price funds. Systematic purchases and redemptions are exempt from this policy. Transactions accepted by intermediaries in violation of this excessive trading policy or from persons believed to be market timers are subject to rejection or cancellation by the funds.

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.

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Distribution, Shareholder Servicing, and Recordkeeping Fees

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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 t hey perform.

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3Organization and Management

How is the fund organized?

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Shareholders benefit from T. Rowe Price`s 66 years of investment management experience.

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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:

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

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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.

Portfolio Management

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The fund has an Investment Advisory Committee with the following members: Daniel O. Shackelford, Chairman, Connice A. Bavely, Brian J. Brennan, Patrick S. Cassidy, Alan D. Levenson, Mary J. Miller, Edmund M. Notzon III, Vernon A. Reid, Jr., William T. Reynolds, and Robert M. Rubino. The committee chairman has day-to-day responsibility for managing the portfolio and works with the committee in developing and executing the fund`s investment program. Mr. Shackelford became chairman of the fund`s committee in 2002. He joined T. Rowe Price in 1999 and has been managing investments since that time.

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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

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*Represents a blended group fee rate containing various breakpoints.

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Understanding Performance Information

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

Total Return

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

Cumulative Total Return

Average Annual Total Return

Yield

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The current or "dividend" yield on a fund or any investment tells you the relationship between the investment`s current level of annual income and its price on a particular day. The dividend yield reflects the actual income paid to shareholders for a given period, annualized and divided by the price at the end of the period. For example, a fund provi ding $5 of annual income per share and a price of $50 has a current yield of 10%. Yields can be calculated for any time period.

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For bond funds, the advertised or SEC yield is found by determining the net income per share (as defined by the Securities and Exchange Commission) earned by a fund during a 30-day base period and dividing this amount by the share price on the last day of the base period. The SEC yield—also called the
standardized yield—may differ from the dividend yield.

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Investment Policies and Practices

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

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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.

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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

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In seeking to meet its investment objective, fund investme nts 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 investment management practices.

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Bonds

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Bonds may be unsecured (backed by the issuer`s general creditworthiness only) or secured (also backed by specified collateral). Bonds include asset- and mortgag e-backed securities.

Certain bonds have interest rates that are adjusted periodically. These interest rate adjustments tend to minimize fluctuations in the bonds` principal values. The maturity of those securities may be shortened under certain specified conditions.

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Bond ratings are not guarantees. They are estimates of an issuer`s financial strength. Ratings can change at any time due to real or perceived changes in an issuer`s credit or financial fundamentals.

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Common and Preferred Stocks

Convertible Securities and Warrants

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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). Warrants can be highly volatile, have no voting rights, and pay no dividends.

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Foreign Securities

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Asset-Backed Securities

An underlying pool of assets, such as credit card or automobile trade receivables or corporate loans or bonds, backs these bonds and provides the interest and principal payments to investors. On occasion, the pool of assets may also include a swap obligation, which is used to change the cash flows on the underlying assets. As an example, a swap may be used to allow floating rate assets to back a fixed-rate obligation. Credit quality depends primarily on the quality of the underlying assets, the level of credit support, if any, provided by the structure or by a third-party insurance wrap, and the credit quality of the swap counterpar ty, if any. The underlying assets (i.e., loans) are sometimes subject to prepayments, which can shorten the security`s weighted average life and may lower its return. The value of these securities also may change because of actual or perceived changes in the creditworthiness of the individual borrowers, the originator, the servicing agent, the financial institution providing the credit support, or the swap counterparty. There i s no limit on fund investments in these securities.

Mortgage-Backed Securities

The fund may invest in a variety of mortgage-backed securities. Mortgage lenders pool individual home mortgages with similar characteristics to back a certificate or bond, which is sold to investors such as the fund. Interest and principal payments generated by the underlying mortgages are passed through to the investors. The "big three" issue rs are the Government National Mortgage Association (GNMA), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac). GNMA certificates are backed by the full faith and credit of the U.S. government, while others, such as Fannie Mae and Freddie Mac certificates, are only supported by the ability to borrow from the U.S. Treasury or by the credit of the agency. Private mortgage bankers and other institutions also issue mortgage-backed securities.

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Mortgage-backed securities are subject to scheduled and unscheduled principal payments as homeowners pay down or prepay their mortgages. As these payments are received, they must be reinvested when interest rates may be higher or lower than on the original mortgage security. Therefore, these securities are not an effective means of locking in long-term interest rates. In addition, when interest rates fall, the pace of mortgage prepayments picks up. These refinanced mortgages are paid off at face value (par), causing a loss for any investor who may have purchased the security at a price above par. In such an environment, this risk limits the potential price appreciation of these securities and can negatively affect the fund`s net asset value. When rates rise, the prices of mortgage-backed securities can be expected to decline, although historically these securities have experienced smaller price declines than comparable quality bonds. In addition, when rates rise an d prepayments slow, the effective duration of mortgage-backed securities extends, resulting in increased volatility.

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Operating policy There is no limit on fund investments in mortgage-backed securities.

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Additional mortgage-backed securities in which the fund may invest include:

Collateralized M ortgage Obligations (CMOs) CMOs are debt securities that are fully collateralized by a portfolio of mortgages or mortgage-backed securities. All interest and principal payments from the underlying mortgages are passed through to the CMOs in such a way as to create some classes with more stable average lives than the underlying mortgages and other classes with more volatile average lives. CMO classes may pay fixed or variable rates of interest, and certain classes have priority over others with respect to the receipt of prepayments.

Stripped Mortgage Securities Stripped mortgage securities (a type of potentially high-risk derivative) are created by separating the interest and principal payments generated by a pool of mortgage-backed securities or a CMO to create additional classes of securities. Generally, one class receives only interest payments (IOs), and another receives principal payments (POs). Unlike with other mortgage-backed securities and POs, the value of IOs tends to move in the same direction as interest rates. The fund can use IOs as a hedge against falling prepayment rates (interest rates are rising) and/or a bear market environment. POs can be used as a hedge against rising prepayment rates (interest rates are falling) and/or a bull market environment. IOs and POs are acutely sensitive to interest rate changes and to the rate of principal prepayments.

A rapid or unexpected increase in prepayments can severely depress the price of IOs, while a rapid or unexpected decrease in prepayments could have the same effect on POs. Of course, under the opposite conditions these securities may appreciate in value. These securities can be very volatile in price and may have lower liquidity than most other mortgage-backed securities. Certain non-stripped CMO classes may also exhibit these qualities, especially those that pay variable rates of interest that adjust inversely with, and more rapidly than, short-term interest rates. In addition, if interest rates rise rapidly and prepayment rates slow more than expected, certain CMO classes, in addition to losing value, can exhibit characteristics of longer- term securities and become more volatile. There is no guarantee that fund investments in CMOs, IOs, or POs will be successful, and fund total return could be adversely affected as a result.

Operating policy Fund investments in stripped mortgage securities are limited to 10% of total assets.

Commercial Mortgage-Backed Securities (CMBS) CMBS are securities created from a pool of commercial mortgage loans, such as loans for hotels, shopping centers, office buildings, apartment buildings, etc. Interest and principal payments from the loans are passed on to the investor according to a schedule of payments. Credit quality depends primarily on the quality of the loans themselves and on the structure of the particular deal. Generally, deals are structured with senior and subordinate classes. The amount of subordination is determined by the rating agencies who rate the individual classes of the structure. Commercial mortgages are generally structured with prepayment penalties, which greatly reduces prepayment risk to the investor. However, the value of these securities may change because of actual or perceived changes in the creditworthiness of the individual borro wers, their tenants, the servicing agents, or the general state of commercial real estate. There is no limit on fund investments in these securities.

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 or interest rate of a hybrid could be tied (positively or negatively) to the price of some commodity, currency, or securities index or another interest rate (each a "benchmark"). Hybrids can be used as an efficient means of pursuing a variety of investment goals, including currency hedging, duration management, and increased total return. Hybrids may or may not bear interest or pay divi

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.

Deferrable Subordinated Securities

These are securities with long maturities that are deeply subordinated in the issuer`s capital structure. They generally have 30-year maturities and permit the issuer to defer distributions for up to five years. These characteristics give the issuer more financial flexibility than is typically the case with traditional bonds. As a result, the securities may be viewed as possessing certain "equity-like" features by rating agencies and bank regulators. However, the securities are treated as debt securities by market participants, and the fund intends to treat them as such as well. These securities may offer a mandatory put or remarketing option that creates an effective maturity date significantly shorter than the stated one. Fund invest ments will be made in these securities to the extent their yield, credit, and maturity characteristics are consistent with the fund`s investment objective and program.

Private Placements

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

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

Utility Industry Concentration

Operating policy The fund has no current intention of concentrating in the utility industry.

Fundamental policy The fund will, under certain conditions, invest up to 50% of its assets in any one of the following industries: gas utility, gas transmission utility, electric utility, telephone utility, and petroleum.

Types of Investment Management Practices

Reserve Position

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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. < font style="font-size:10.0pt;" face="Berkeley Book" color="Black">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.

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Borrowing Money and Transferring Assets

Fundamental policy Borrowings may not exceed 33xb6 /xb8 % of total assets.

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Operating policy Fund transfers of portfolio securities as collateral will not be made except as necessary in connection with permissible borrowings or investments, and then such transfers may not exceed 33xb6 /xb8 % of total assets. Fund purchases of additional securities will not be made when borrowings exceed 5% of total assets.

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 interest rates, bond prices, and foreign currencies; as an e fficient means of increasing or decreasing fund overall exposure to a specific part or broad segment of the U.S. market or a foreign market; 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 currencies.

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Swaps

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Operating policies A swap agreement with any single counterparty will not be entered into if the net amount owed or to be received under existing contracts with that party would exceed 5% of total assets, or if the net amount owed or to be received by the fund under all outstanding swap agreements will exceed 10% of total assets. The total market value of securities covering 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.

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Managing Foreign Currency Risk

Investors in foreign securities may attempt to "hedge" their exposure to potentially unfavorable currency changes. The primary means of doing this is through the use of "forwards"— contracts to exchange one currency fo r another on some future date at a specified exchange rate. However, futures, swaps, and options on these instruments may also be used. In certain circumstances, a different currency may be substituted for the currency in which the investment is denominated, a strategy known as "proxy hedging." The fund may also use these instruments to create a synthetic bond— issued in one currency, but with the currency component transformed into another currency. If the fund were to engage in any of these foreign currency transactions, they would be primarily to protect a fund`s foreign securities from adverse currency movements relative to the dollar. Such transactions involve the

Operating policy The fund will not commit more than 20% of total assets to any combination of foreign currency instruments.

Lending of Por tfolio Securities

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Fundamental policy The value of loaned securities may not exceed 33xb6 /xb8 % of total assets.

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When-Issued Securities and Forwards

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The fund may purchase securities on a when-issued or delayed delivery basis or may purchase or sell securities on a forward commitment basis. There is no limit on fund investments in these securities. The price of these securities is fixed at the time of the commitment to buy, but delivery and payment can take place a month or more later. During the interim period, the market value of the securities can fluctuate, and no interest accrues to the purchaser. At the time of delivery, the value of the securities may be more or less than the purchase or sale price. To the extent the fund remains fully or almost fully invested (in securities with a remaining maturity of more than one year) at the same time it purchases these securities, there will be greater fluctuations in the fund`s net asset value than if the fund did not purchase them.

Portfolio Turnover

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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 period shown. The table is part of the fund`s financial statement s, which are included in its annual report and are incorporated by reference into the Statement of Additional Information (available upon request). The total returns in the table represent the rate that an investor would have earned or lost on an investment in the fund (assuming reinvestment of all dividends and distributions and no payment of account or (if applicable) redemption fees). The financial statements in the annual report were audited by the fund`s independent accountants, PricewaterhouseCoopers LLP.

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<R>Table 4 Financial Highlights

		9/30/02 through 5/31/03 < br>


Net asset value,beginning of period		$8.84
Income From Investment Operations
Net investment income		0.22a
Net gains or losses on securities (both realized and unrealized)		< font style="font-size:12.0pt;" face="Courier New">0.38
Total from investment operations		0.60
Less Distributions< /font>
Dividends (from net investment income)		(0.23 )
Distributions (fromcapital gains)		—
Returns of capital		—
Total distributions		(0.23)
Redemption fees addedto paid in capital		—
Net asset value,end of period		$9.21
Total return		6.84%a
Ratios/Supplemental Data
Net assets, end of period(in thousands)< /font>		$321
Ratio of expenses to average net assets		1.15%ab
Ratio of net income to average net assets		2.32%ab
Portfolio turnover rate		221.2%b

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aExcludes expenses in excess of a 1.15% contractual expense limitation in effect through September 30, 2004.

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bAnnualized.

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4Account Requirements and Transaction Information

Tax Identification
Number

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The intermedi ary 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.

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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.

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

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:

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In order to obtain an account number, the intermediary must supply the name, Social Security or employer identification number, and business street address for the account.
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Complete a New Account Form and mail it to one of the appropriate addresses listed below. Intermediaries must also enter into a separate agreement with the fund or its agent.
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via U.S. Postal Service
T. Ro we Price Financial Institution Services
P.O. Box 17603
Baltimore, MD 21297-1603
via private carriers/overnight services
T. Rowe Price Financial Institution Services
Mail Code: OM-17603
4515 Painters Mill Road
Owings Mills, MD 21117-4842
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.
Exch anging and redeeming ShareS
Exchange Service
You can move money from one account to an existing identically registered account or open a new identically registered account. Intermediaries should call their Financial Institution Services representative.

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Redemptions
Unless otherwise indicated, redemption proceeds will be wired to the intermediary`s designated bank. Intermediaries should contact their Financial Institution Services repres entative.
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 (including, but not limited to, orders deemed to result in excessive trading, market timing, fraud, or 5% ownership) upon notice to the shareholder within five business days of the trade or if the written confirmation 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 redemption, small account, maintenance, or other fees charged to a group of shareholders; (9) to act on instructions reasonably believed to be genuine; and (10) to involuntarily redeem your account in cases of threatening conduct, suspected fraudulent or illegal activity, or if the fund is unable, through its customer id entification procedures, to verify information provided by you. These actions will be taken when, in the sole discretion of management, they are deemed to be in the best interest of the fund.
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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 acco unt, 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.

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.
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 services to best meet your investing needs. We may also share that information with companies that perform administrative 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 which 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.
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This Privacy Policy applies to the following T. Rowe Price family of companies:
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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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1940 Act File No. 811-2396
E443-040 10/1/03
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
A fund Statement of Additional Information has been filed with the Securities and Exchange Commission and is incorporated by reference into this prospectus. Further information about fund investments, including a review of market conditions and the manager`s recent strategies and their impact on performance, is available in the annual and semiannual shareholder reports. To obtain 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.
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The date of this Statement of Additional Information is October 1, 2003.
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T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE GNMA FUND
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 INSTITUTIONAL INCOME FUNDS, INC.
T. Rowe Price Institutional High Yield Fund
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.
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T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
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T. Rowe Price Government Reserve Investment Fund
T. Rowe Price Reserve Investment Fund
T. ROWE PRICE SHORTTERM BOND FUND, INC.
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T. ROWE PRICE U.S. TREASURY FUNDS, INC.
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U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
Mailing Address:
T. Rowe Price Investment Services, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
1-800-638-5660
Throughout this Statement of Additional Information, "the fund" is intended to refer to each fund listed on the cover page, unless otherwise indicated.
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This Statement of Additional Information is not a prospectus but should be read in conjunction with the appropriate fund prospectus dated October 1, 2003, which may be obtained from T. Rowe Price Investment Services, Inc. ("Investment Services").
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Each fund`s financial statements for the fiscal period ended May 31, 2003, and the report of independent auditors are included in each fund`s annual report and incorporated by reference into this Statement of Additional Information.
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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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Government Reserve Investment Fund and Reserve Investment Fund are not available for direct purchase by members of the public.
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TABLE OF CONTENTS

Page

Page

Capital Stock
80

Management of the Fund
38
Code of Ethics
68

Net Asset Value per Share
74
Custodian
67

Other Shareholder Services
65
Distributor for the Fund
66

Portfolio Management Practices
19
Dividends and Distributions
75

Portfolio Transactions
68
Federal Registration of Shares
83

Pricing of Securities
73
Independent Auditors
83

Principal Holders of Securities
58
Investment Management Services
60

Ratings of Commercial Paper
86
Investment Objectives and Policies
2

Ratings of Corporate Debt Securities
87
Investment Performance
78

Risk Factors
2
Investment Program
7

T. Rowe Price Proxy Voting — Process and Policies
82
Investment Restrictions
34

Tax Status
75
Legal Counsel
83

Yield Infor mation
77
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INVESTMENT OBJECTIVES AND POLICIES
The following information supplements the discussion of each fund`s investment objectives and policies discussed in each fund`s prospectus.
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< font style="font-size:12.0pt;" face="Courier New" color="Black">Shareholder approval is required to substantively change fund objectives. Unless otherwise specified, the investment programs and restrictions of the funds are not fundamental policies. Each fund`s operating policies are subject to change by each Board of Directors/Trustees ("Board") without shareholder approval. Each fund`s fundamental policies may not be changed without the approval of at least a majority of the outstanding shares of the fund or, if it is less, 67% of the shares represented at a meeting of shareholders at which the holders of 50% or more of the shares are represented. References to the following are as indicated:
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Investment Company Act of 1940 ("1940 Act")
Securities and Exchange Commission ("SEC")
T. Rowe Price Associates, Inc. ("T. Rowe Price")
Moody`s Investors Service, Inc. ("Moody`s")
Standard & Poor`s Corporation ("S&P")
Internal Revenue Code of 1986 ("Code")
T. Rowe Price International, Inc. ("T. Rowe Price International")
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 fund.
All funds
Debt Obligations
Yields on short-, intermediate-, and long-term debt securities are dependent on a variety of factors, including the general conditions of the money and bond markets, the maturity of the obligation, and the credit quality and

PAGE 93
rating of the issue. Debt securities with longer maturities tend to have higher yields and are generally subject to potentially greater capital appreciation and depreciation than obligations with shorter maturities and lower yields. The market prices of debt securities usually vary, depending upon available yields. An increase in interest rates will generally reduce the value of portfolio debt securities, and a decline in interest rates will generally increase the value of portfolio debt securities. The ability of the fund to achieve its investment objective is also dependent on the continuing ability of the issuers of the debt securities in which the fund invests to meet their obligations for the payment of interest and principal when due. Although the fund seeks to reduce risk by portfolio diversification, credit analysis, and attention to trends in the economy, industries, and financial markets, such efforts will not eliminate all risk. There can, of course, be no assurance that the fund will achieve its investment objective.
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After purchase by the fund, a debt security may cease to be rated or its rating may be reduced below the minimum required for purchase by the fund. Neither event will require a sale of such security by the fund. However, T. Rowe Price will consider such events in its determination of whether the fund 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 fund 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 fund`s Board, determines whether the unrated security is of a quality comparable to that which the fund is allowed to purchase.
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Government Reserve Investment, Prime Reserve, Reserve Investment, and U.S. Treasury Money Funds
There can be no assurance that the fund will achieve its investment objective or be able to maintain its net asset value per share at $1.00. The price of the fund is not guaranteed or insured by the U.S. government and its yield is not fixed. 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.
All funds except Government Reserve Investment, Prime Reserve, Reserve Investment, and U.S. Treasury Money Funds
Because of its investment policy, the fund may or may not be suitable or appropriate for any parti cular investor. The fund is not a money market fund and is not an appropriate investment for those whose primary objective is principal stability. The value of the portfolio securities of the fund will fluctuate based upon market conditions. Although the fund seeks to reduce risk by investing in a diversified portfolio, such diversification does not eliminate all risk.
Mortgage-backed securities 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., the fund) receives monthly scheduled payments of principal and interest, and may receive unscheduled principal payments representing prepayments on the underlying mortgages. The incidence of unscheduled principal prepayments is also likely to increase in mortgage pools owned by the fund 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 fund to reinvest principal payments at the then lower prevailing interest rat e, and (2) reduce the potential for capital appreciation beyond the face amount of the security. Conversely, the fund may realize a gain on prepayments of mortgage pools trading at a discount. Such prepayments will provide an early return of principal which may then be reinvested at the then higher prevailing interest rate.
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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
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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.
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Corporate Income, High Yield, Inflation Protected Bond, Institutional High Yield, and Personal Strategy Funds
Special Risks of Investing in Junk Bonds The following special considerations are additional risk factors associated with the fund`s investments in lower-rated debt 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 fund`s portfolio, the fund`s net asset value and the ability of the bonds` issuers to repay principal and interest, meet projected business goals, and obtain ad ditional financing than on higher-rated securities. These circumstances also may result in a higher incidence of defaults than with respect to higher-rated securities. An investment in the fund is more risky than investment in shares of a fund which invests only in higher-rated debt securities.
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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 fund may incur additional expenses to seek recovery on a debt security on which the is suer 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 non rated securities less marketable. These factors may have the effect of limiting the availability of the securities for purchase by the fund and may also limit the ability of the fund 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.
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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 fund owns 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 fund owns will affect its net asset value per share. If market quotations are not readily available for the fund`s lower-rated or nonrated securities, these securities will be valued by a method that the fund`s Board believes 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.
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Taxation Special tax considerations are associated with investing in lower-rated debt securities structured as zero-coupon or pay-in-kind securities. The fund accrues income on these securities prior to the receipt of cash payments. The fund 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.
Corporate Income, High Yield, Inflation Protected Bond, Institutional High Yield, New Income, Personal Strategy, and Short-Term Bond Funds
Risk Factors of Foreign Investing There are special risks in foreign investing. Certain of these risks are inherent in any mutual fund while others relate more to the countries in which the fund will invest. Many of the risks are more pronounced for investments in developing or emerging market countries, such as many of the countries of Asia, Latin America, Eastern Europe, Russia, Africa, and the Middle East. Although there is no universally accepted definition, a developing country is generally considered to be a country which is in the initial stages of its industrialization cycle with a per capita gross national product of less than $8,000.
Political and Economic Factors Individual foreign economies of some countries differ favorably or unfavorably from the United States` economy in such respects as growth of gross national product, rate of inflation, capital

PAGE 95
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 terroris m.
Governments in certain foreign countries continue to participate to a significant degree, through ownership interest or regulation, in their respective economies. Action by these governments could have a significant effect on market prices of securities and payment of dividends. The economies of many foreign countries are heavily dependent upon international trade and are accordingly affected by protective trade barriers and economic conditions of their trading partners. The enactment by these trading partners of protectionist trade legislation could have a significant adverse effect upon the securities markets of such countries.
Currency Fluctuations The fund invests in securities denominated in various currencies. Accordingly, a change in the value of any such currency against the U.S. dollar will result in a corresponding change in the U.S. dollar value of the fund`s assets denominated in that currency. Such changes will also affect the fund`s income. Generally, when a given currency appreciates against the d ollar (the dollar weakens), the value of the fund`s securities denominated in that currency will rise. When a given currency depreciates against the dollar (the dollar strengthens), the value of the fund`s securities denominated in that currency would be expected to decline.
Investment and Repatriation Restrictions Foreign investment in the securities markets of certain foreign countries is restricted or controlled to varying degrees. These restrictions limit and, at times, preclude < /font>investment in certain of such countries and increase the cost and expenses of the fund. Investments by foreign investors are subject to a variety of restrictions in many developing countries. These restrictions may take the form of prior governmental approval, limits on the amount or type of securities held by foreigners, and limits on the types of companies in which foreigners may invest. Additional or different restrictions may be imposed at any time by these or other countries in which the fund invests. In addition, the repatriation of both investment income and capital from several foreign countries is restricted and controlled under certain regulations, including in some cases the need for certain government consents. For example, capital invested in Chile normally cannot be repatriated for one year. In 1998, the government of Malaysia imposed currency controls which effectively made it impossible for foreign investors to convert Malaysian ringgits to foreign currencies.

Market Characteristics It is contemplated that most foreign securities will be purchased in over-the-counter markets or on securities exchanges located in the countries in which the respective principal offices of the issuers of the various securities are located, if that is the best available market. Investments in certain markets may be made through American Depository Receipts ("ADRs") and Global Depository Receipts ("GDRs") traded in the United States or on foreign exchanges. Foreign securities markets are generally not as developed or efficient as, and more volatile than, those in the United States. While growing in volume, they usually have substantially less volume than U.S. markets and the fund`s portfolio securities may be less liquid and subject to more rapid and erratic price movements than securities of comparable U.S. companies. Securities may trade at price/earnings multiples higher than comparable United States securities and such levels may not be sustainable. Commissions on foreign securities trades are generally higher than commissions on United States 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 < /font>companies than in the United States. Moreover, settlement practices for transactions in foreign markets may differ from those in United States markets. Such differences include delays beyond periods customary in the United States and practices, such as delivery of securities prior to receipt of payment, which increase the likelihood of a "failed settlement." Failed settlements can result in losses to the fund.
Investment Funds The fund may invest in investment funds whic h have been authorized by the governments of certain countries specifically to permit foreign investment in securities of companies listed and traded on the stock exchanges in these respective countries. The fund`s investment in these funds is subject to the provisions of the 1940 Act. If the fund invests in such investment funds, the fund`s shareholders will bear not only their proportionate share of the expenses of the fund (including operating expenses and the fees of the investment manager), but also will 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.
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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.
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Taxes Th e dividends and interest payable on certain of the fund`s foreign portfolio securities may be subject to foreign withholding taxes, thus reducing the net amount of income available for distribution to the fund`s shareholders.
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 fund, political or social instability, or diplomatic developments which could affect investments by U.S. persons in those countries.
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 fund`s assets invested in such countries, and these authorities may not qualify as a foreign custodian under the 1940 Act and exemptive relief from such Act may be required. All of these considerations are among the factors which result in significant risks and uncertainties when investing in Eastern Europe and Russia.
Latin America

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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 disruptio n 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 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 < font style="font-size:12.0pt;" face="Courier New" color="Black">conversion of their currency into foreign currencies, including the U.S. dollar. There is no significant foreign exchange market for many currencies and it would, as a result, be difficult for the fund to engage in foreign currency transactions designed to protect the value of the fund`s interests in securities denominated in such currencies.
Sovereign Debt A number of Latin American countries are among the largest debtors of developing countries. There have been moratoria on, and reschedulings of, repayment with respect to these debts. Such events can restrict the flexibility of these debtor nations in the international markets and result in the imposition of onerous conditions on their economies.
INVESTMENT PROGRAM
Types of Securities
Set forth below is additional information about certain of the investments described in each fund`s prospectus.
Debt Securities
Fixed-income securities in which the fund may invest include, but are not limited to, those described below.
All funds
U.S. Government Obligation s  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 Cr edit 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 Treasury.
The GNMA, Government Reserve Investment, U.S. Treasury Intermediate, U.S. Treasury Long-Term, and U.S. Treasury Money Funds may only invest in these securities if they are supported by the full faith and credit of the U.S. government.
All funds except GNMA, Government Reserve Investment, U.S. Treasury Intermediate, U.S. Treasury Long-Term, and U.S. Treasury Money Funds
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 fund may invest in U.S. banks, foreign branches of U.S. banks, U.S. branches of foreign banks, and foreign branches of foreign banks.

Corporate Debt Securities  Outstanding corporate debt securities (e.g., bonds and debentures). 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 < font style="font-size:12.0pt;" face="Courier New" color="Black"> Issued or guaranteed by a foreign government, province, instrumentality, political subdivision, or similar unit thereof.
Savings and Loan Obligations  Negotiable certificates of deposit and other short-term debt obligations of savings and loan associations.
Supranational Agencies  Securities of certain supranational entities, such as the International Development Bank.
All funds except Government Reserve Investment, Prime Reserve, Reserve Investment, and U.S. Treasury Money Funds
Mortgage-Related Securities
Mortgage-related securities in which the fund may invest include, but are not limited to, those described below. The GNMA, U.S. Treasury Intermediate, and U.S. Treasury Long-Term Funds may only invest in these securities to the extent they are backed by the full faith and credit of the U.S. government.
Mortgage-Backed Securities Mortgage-backed s ecurities are securities representing an interest in a pool of mortgages. The mortgages may be of a variety of types, including adjustable rate, conventional 30-year fixed rate, graduated payment, and 15-year. Principal and interest payments made on the mortgages in the underlying mortgage pool are passed through to the fund. This is in contrast to traditional bonds where principal is normally paid back at maturity in a lump sum. Unscheduled prepayments of principal shorten the securities` weighted average life and may lower their total return. (When a mortgage in the underlying mortgage pool is prepaid, an unscheduled principal prepayment is passed through to the fund. This principal is returned to the fund at par. As a result, if a mortgage security were trading at a premium, its total return would be lowered by prepayments, and if a mortgage security were trading at a discount, its total return would be increased by prepayments.) The value of these securities also may change because of changes in the market`s perception of the creditworthiness of the federal agency that issued them. In addition, the mortgage securities market in general may be adversely affected by changes in governmental regulation or tax policies.

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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.
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Ginnie Mae Certificates Ginnie Mae 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 Ginnie Mae 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 un der 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
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guaranty. In order to meet its obligations under such guaranty, Ginnie Mae is authorized to borrow from the U.S. Treasury with no limitations as to amount.
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Fannie Mae Certificates Fannie Mae 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 Fannie Mae. 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.
Freddie Mac Certificates Freddie Mac is a corporate instrumentality of the United States created pursuant to the Emergency Home Finance Act of 1970, as amended ("FHLMC Act"). Freddie Mac Certificates represent a pro-rata interest in a group of mortgage loans purchased by Freddie Mac. Freddie Mac 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 Freddie Mac are obligations solely of Freddie Mac and are not backed by the full faith and credit of the U.S. government.
Farmer Mac Certificates Farmer Mac is a federally chartered instrumentality of the United States established by Title VIII of the Farm Credit Act of 1971, as amended ("Charter Act"). Farmer Mac 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. Farmer Mac 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 Fannie Mae and Freddie Mac, Farmer Mac Certificates are not supported by the full faith and credit of the U.S. government; rather, Farmer Mac 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 fund. 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 appr oximately 12 years. The majority of Ginnie Mae Certificates are backed by mortgages of this type, and, accordingly, the generally accepted practice treats Ginnie Mae Certificates as 30-year securities which prepay in full in the 12th year. FNMA and Freddie Mac Certificates may have differing prepayment characteristics.
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 yi eld 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.
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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
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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 tradi tional 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.
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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 fund invests, the investment may be subject to a greater or lesser risk of prepayment than other types of mortgage-related securities.
The primary risk of any mortgage security is the uncertainty of the timing of cash flows. For CMOs, the primary risk results from the rate of prepayments on the underlying mortgages serving as collateral 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 C MOs, depending on their structure and the rate of prepayments, can be volatile. Some CMOs may also not be as liquid as other securities.
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U.S. Government Agency Multi-Class Pass-Through Securities Unlike CMOs, U.S. Government Agency Multi-Class Pass-Through Securities, which include FNMA Guaranteed REMIC (Real Estate Mortgage Investment Conduit) Pass-Through Certificates and FHLMC Multi-Class Mortgage Participation Certificates, are ownership interests in a pool of mortgage assets. Unless the context indicates otherwise, all references herein to CMOs include multi-class pass-through securities.
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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.
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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 < /font>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 fund`s quality standards. The fund 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 sec urities meet the fund`s quality standards.
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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 fund.
The cash flows and yields on IO and PO classes are extremely sensitive to the rate of principal payments (including prepayments) on the related underlying mortgage assets. In the case of IOs, prepayments affect the amoun t, 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, an investor may fail to fully recoup his/her 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 underly ing 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.
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The staff of the SEC has advised the fund that it believes the fund should treat IOs and POs, other than government-issued IOs or POs backed by fixed-rate mortgages, as illiquid securities and, accordingly, limit its investments in such securities, together with all other illiquid securities, to 15% of the fund`s net assets. Under the staff`s position, the determination of whether a particular government-issued IO 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 fund`s Board. The fund`s Board has delegated to T. Rowe Price the authority to determine the liquidity of these investments based on the following guidelines: the type of issuer; type of collateral, including age and prepayment characteristics; rate of interest on coupon relative to current market rates and the effect of the rate on the potential for prepayments; complexity of the issue`s structure, including the number of tranches; and size of the issue and the number of dealers who make a market in the IO or PO.
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Adjustable Rate Mortgage Securities ARMs, like fixed-rate mortgages, have a specified maturity date, and t he 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 fund to participate in changing interest rate levels through regular adjustments in the coupons of the underlying m ortgages, resulting in more variable current income and lower price volatility than longer-term fixed-rate mortgage securities. ARM securities are a 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 The fund expects that governmental, 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 inv estment manager will, consistent with the fund`s objective, policies, and quality standards, consider making investments in such new types of securities.
All funds except GNMA, Government Reserve Investment, U.S. Treasury Intermediate, U.S. Treasury Long-Term, and U.S. Treasury Money Funds
Asset-Backed Securities
The credit quality of most asset-backed securities depends primarily on the credit quality of the assets underlying such securities, how well the entity issuing the security is insulated from the credit risk of the originator or any other affiliated entities, and the amount and quality of any credit support provided to the

securities. The rate of principal payment on asset-backed securities generally depends on the rate of principal payments received on the underlying assets, which in turn may be affected by a variety of economic and other factors. As a result, the yield on any asset-backed security is difficult to predict with precision and actual yield to maturity may be more or less than the anticipated yield to maturity. Asset-backed securities may be classified as pass-through certi ficates or collateralized obligations.
Pass-through certificates are asset-backed securities which represent an undivided fractional ownership interest in an underlying pool of assets. Pass-through certificates usually provide for payments of principal and interest received to be passed through to their holders, usually after deduction for certain costs and expenses incurred in administering the pool.
Because pass-through certificates represent an ownership interest in the underlying assets, the holders thereof directly bear the risk of any defaults by the obligors on the underlying assets not covered by any credit support.
Asset-backed securities issued in the form of debt instruments, also known as collateralized obligations, are generally issued as the debt of a special purpose entity organized solely for the purpose of owning such assets and issuing such debt. Such assets are most often trade, credit card, or automo bile receivables. The assets collateralizing such asset-backed securities are pledged to a trustee or custodian for the benefit of the holders thereof. Such issuers generally hold no assets other than those underlying the asset-backed securities and any credit support provided. As a result, although payments on such asset-backed securities are obligations of the issuers, in the event of defaults on the underlying assets not covered by any credit support, the issuing entities are unlikely to have sufficient assets to satisfy their obligations on the related asset-backed securities.
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Methods of Allocating Cash Flows While many asset-backed securities are issued with only one class of security, many asset-backed securities are issued in more than one class, each with different payment terms. Multiple class asset-backed securities are issued for two main reasons. First, multiple classes may be used as a method of providing credit support. This is accomplished typically through creation of one or more classes whose right to payments on the asset- backed security is made subordinate to the right to such payments of the remaining class or classes. Second, multiple classes may permit the issuance of securities with payment terms, interest rates, or other characteristics differing both from those of each other and from those of the underlying assets. Examples include so-called "strips" (asset-backed securities entitling the holder to disproportionate interests with respect to the allocation of interest and principal of the assets backing the security) and securities with a class or classes having characteristics which mimic the characteristics of non-asset-backed securities, such as floating interest rates (i.e., interest rates which adjust as a specified benchmark changes) or scheduled amortization of principal.
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Asset-backed securities in which the payment streams on the underlying assets are allocated in a manner different than those described above may be issued in the future. The fund may invest in such asset-backed secu rities if such investment is otherwise consistent with its investment objectives and policies and with the investment restrictions of the fund.
Types of Credit Support Asset-backed securities are often backed by a pool of assets representing the obligations of a number of different parties. To lessen the effect of failures by obligors on underlying assets to make payments, such securities may contain elements of credit support. Such credit support falls into two classes: liquidity protection and protection against ultimate default by an obligor on the underlying assets. Liquidity protection refers to the provision of advances, generally by the entity administering the pool of assets, to ensure that scheduled payments on the underlying pool are made in a timely fashion. Protection against ultimate default ensures ultimate payment of the obligations on at least a portion of the assets in the pool. Such protection may be provided through guarantees, insurance policies, or letters of credit obtained from third parties, "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 "senior-subordinated securities" (multiple class asset-backed securities with certain classes subordinate to other classes as to the payment of principal thereon, with the result that defaults on the underlying assets are borne first by the holders of the subordinated class) and asset-backed securities that have "reserve funds" (where cash or investments, sometimes funded from a portion of the initial payments on the underlying assets, are held in reserve against future losses) or that have been "over collateralized" (where the scheduled payments on, or the principal amount of, the underlying assets substantially exceeds that required to make payment of the asset-backed securities and pay any servicing or other fees). The degree of credit support provided on each issue is based generally on historical information

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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.
Automobile Receivable Securities The fund may invest in asset-backed securities which are backed by receivables from motor vehicle installment sales contracts or installment loans secured by motor vehicles ("Automobile Receivable Securities"). Since installment sales contracts for motor vehicles or installment loans related thereto ("Automobile Contracts") typically hav e shorter durations and lower incidences of prepayment, Automobile Receivable Securities generally will exhibit a shorter average life and are less susceptible to prepayment risk.
Most entities that issue Automobile Receivable Securities create an enforceable interest in their respective Automobile Contracts only by filing a financing statement and by having the servicer of the Automobile Contracts, which is usually the originator of the Automobile Contracts, take custody thereof. In such circumstances, if the servicer of the Automobile Contracts were to sell the same Automobile Contracts to another party, in violation of its obligation not to do so, there is a risk that such party could acquire an interest in the Automobile Contracts superior to that of the holders of Automobile Receivable Securities. Also, although most Automobile Contracts grant a security interest in the motor vehicle being financed, in most states the security interest in a motor vehicle must be noted on the certificate of title to create an enforceable security interest against competing claims of other parties. Due to the large number of vehicles involved, however, the certificate of title to each vehicle financed, pursuant to the Automobile Contracts underlying the Automobile Receivable Security, usually is not amended to reflect the assignment of the seller`s security interest for the benefit of the holders of the Automobile Receivable Securities. Therefore, there is the possibility that recoveries on repossessed collateral may not, in some cases, be available to support payments on the securities. In addition, various state and federal securities laws give the motor vehicle owner the right to assert against the holder of the owner`s Automobile Contract certain defenses such owner would have against the seller of the motor vehicle. The assertion of such defenses could reduce payments on the Automobile Receivable Securities.
Credit Card Receivable Securities The fund may invest in asset-backed securities backed by receivables from revolving credit card agreements ("Credit Card Receivable Securities"). Credit balances on revolving credit card agreements ("Accounts") are generally paid down more rapidly than are Automobile Contracts. Most of the Credit Card Receivable Securities issued publicly to date have been pass-through certificates. In order to lengthen the maturity of Credit Card Receivable Securities, most such se curities provide for a fixed period during which only interest payments on the underlying Accounts are passed through to the security holder and principal payments received on such Accounts are used to fund the transfer to the pool of assets supporting the related Credit Card Receivable Securities of additional credit card charges made on an Account. The initial fixed period usually may be shortened upon the occurrence of specified events which signal a potential deterioration in the quality of the assets backing the security, such as the imposition of a cap on interest rates. The ability of the issuer to extend the life of an issue of Credit Card Receivable Securities thus depends upon the continued generation of additional principal amounts in the underlying account during the initial period and the non-occurrence of specified events. An acceleration in cardholders` payment rates or any other event which shortens the period during which additional credit card charges on an Account may be transferred to the pool of assets supporting the related Credit Card Receivable Security could shorten the weighted average life and yield of the Credit Card Receivable Security.
Credit card holders are entitled to the protection of a number of state and federal consumer credit laws, many of which give such holder the right to set off certain amounts against balances owed on the credit card, thereby reducing amounts paid on Accounts. In addition, unlike most other asset-backed securities, Accounts are unsecured obligations of the cardholder.
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Other Assets The fund may invest in asset-backed securities backed by assets other than those described above, including, but not limited to, home equity loans, small business loans and accounts receivable, equipment leases, commercial real estate loans, boat loans, and manufacturing housing loans. The fund may invest in such securities in the future if such investment is otherwise consistent with its investment objective and policies.
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There are, of course, other types of securities that are or may become available that are similar to the foregoing, and the fund may invest in these securities.

High Yield and Institutional High Yield Funds
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 en hancement.
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, leverage d 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 fund 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 fund 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 fund would consider the loan participation as illiquid and subject to the fund`s restriction on investing no more than 15% of its net assets in illiquid securities.
Where required by applicable SEC positions, the fund 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 fund 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 fund cannot exceed 10% of total income.
Trade Claims
Trade claims are non-securitized rights of payment arising f rom 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. 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

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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 c laim. 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 o f an indemnification depends on the seller`s credit.
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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 trade claims would be considered illiquid investments.
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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.
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Tax Issue Although the issue is not free from doubt, it is likely that trade claims would be treated as non-securities investments. As a result, any gains would be considered "nonqualifyi ng" under the Code. The fund may have up to 10% of its gross income (including capital gains) derived from nonqualifying sources.
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Zero-Coupon and Pay-in-Kind Bonds
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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.
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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. PIKs are usually less volatile than zero-coupon bonds, but more volatile than cash pay securities.
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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 fund until the maturity or call date of the bond. The fund 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 fund.
Corporate Income, High Yield, Institutional High Yield, New Income, and Personal Strategy Funds
Warrants
The fund may acquire warrants. Warrants can be highly volatile and have no voting rights, pay no dividends, and have no rights with respect to the assets of the corporation issuing them. Warrants basically are options to purchase securities at a specific price valid for a specific period of time. They do not represent ownership of the securities, but only the right to buy them. Warrants differ from call options in that warrants are issued by the issuer of the security which may be purchased on their exercise, whereas call options may be written or issued by anyone. The prices of warrants do not necessarily move parallel to the prices of the underlying securities.
Corporate Income, High Yield, Inflation Protected Bond, Institutional High Yield, New Income, Personal Strategy, and Short-Term Bond Funds
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 pri ces 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 pay ments 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, a fund may wish to take advantage of expected declines in interest rates in several European countries, but avoid the transaction costs associated with buying and currency-hedging the foreign bond positions. One solution would be to purchase a U.S. dollar-denominated hybrid instrument whose redemption price is linked to the average three-year interest rate in a designated group of countries. The redemption price formula would provide for payoffs of greater than par if the average interest rate was lower than a specified level, and payoffs of less than par if rates were above the specified level. Furthermore, the fund could limit the downside risk o f the security by establishing a minimum redemption price so that the principal paid at maturity could not be below a predetermined minimum level if interest rates were to rise significantly. The purpose of this arrangement, known as a structured security with an embedded put option, would be to give the fund the desired European bond exposure while avoiding currency risk, limiting downside market risk, and lowering transaction costs. Of course, there is no guarantee that the strategy will be successful, and the fund could lose money if, for example, interest rates do not move as anticipated or credit problems develop with the issuer of the hybrid instruments.
The risks of investing in hybrid instruments reflect a combination of the risks of investing in securities, options, futures, and currencies. Thus, an investment in a hybrid instrument may entail significant risks that are not associated with a similar investment in a traditional debt instrument that has a fixed principal amount, is denominated in U.S. dollars, or bears interest either at a fixed rate or a floating rate determined by reference to a common, nationally published benchmark. The risks of a particular hybrid instrument will, of course, depend upon the terms of the instrument, but may include, without limitation, the possibility of significant changes in the benchmarks or the prices of underlying assets to which the instrument is linked. Such risks generally depend upon factors which are unrelated to the operations or credit quality of the issuer of the hybrid instrument and which may not be readily foreseen by the purchaser, such as economic and political events, the

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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 m ade 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 under lying asset may not move in the same direction or at the same time.
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Hybrid instruments may bear interest or pay preferred dividends at below market (or even relatively nominal) rates. Alternatively, hybrid instruments may bear interest at above market rates but bear an increased risk of principal loss (or gain). The latter scenario may result if "leverage" is used to structure the hybrid instrument. Leverage risk occurs when the hybrid instrument is structured so that a given change in a benchmark or underlying asset is multiplied to produce a greater value change in the hybrid instrument, thereby magnifying the risk of loss as well as the potential for gain.
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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 fund 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.
The various risks discussed above, particularly the market risk of such instruments, may in turn cause significant fluctuations in the net asset value of the fund. Accordingly, the fund will limit its investments in hybrid instruments to 10% of total assets. However, because of their volatility, it is possible that the fund`s investment in hybrid instruments will account for more than 10% of the fund`s return (positive or negative).
All funds
When-Issued Securities and Forward Commitment Contracts
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The price of such securities, which may be expressed in yield terms, is fixed at the time the commitment to purchase is made, but delivery and payment take place at a later date. Normally, the settlement date occurs within 90 days of the purchase for when-issueds, but may be substantially longer for forwards. During the period between purchase and settlement, no payment is made by the fund to the issuer and no interest accrues to the fund. The purchase of these securities will result in a loss if their 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 r isks. At the time the fund makes the commitment to purchase these securities, it will record the transaction and reflect the value of the security in determining its net asset value. The fund will cover these securities by maintaining cash, 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 fund (to the extent of the securities used for cover). Such securities either will mature or, if necessary, be sold on or before the settlement date.
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To the extent the fund remains fully or almost fully invested (in securities with a remaining maturity of more than one year) at the same time it purchases these securities, there will be greater fluctuations in the fund`s net asset value than if the fund did not purchase them.
Additional Adjustable Rate Securities
Certain securities may be issued with adjustable interest rates that are reset periodically by predetermined formulas or indexes in order to minimize movements in the principal value of the investment. 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 the following forms:
Variable Rate Securities Variable rate inst ruments 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.
Floating-Rate Securities Floating-rate instruments are those whose terms provide for the adjustment of their interest rates whenever a specified interest rate changes and which, at any time, can reasonably be expected to have a market value that approximates its par value. The maturity of a floating-rate instrument 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. Floating-rate instruments with demand features are deemed to have a maturity equal to the period remaining until the principal amount can be recovered through demand.
Put Option Bonds Long-term obligations with maturities longer than one year may provide purchasers an optional or mandatory tender of the security at par value at predetermined intervals, often ranging from one month to several years (e.g., a 30-year bond with a five-year tender period). These instruments are deemed to have a maturity equal to the period remaining to the put date.
Corporate Income, High Yield, Inflation Protecte d Bond, Institutional High Yield, New Income, Personal Strategy, Prime Reserve, Reserve Investment, and Short-Term Bond Funds
Illiquid or Restricted Securities
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Restricted securities may be sold only in privately negotiated transactions or in a public offering with respect to which a registration statement is in effect under the Securities Act of 1933 (the "1933 Act"). Where registration is required, the fund may be obligated to pay all or part of the registration expenses, and a considerable period may elapse between the time of the decision to sell and the time the fund may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the fund might obtain a less favorable price than prevailed when it decided to sell. Restricted securities will be priced at fair value as determined in accordance with procedures prescribed by the fund`s Board. If, through the appreciation of illiquid securities or the depreciation of liquid securities, the fund should be in a position where more than 15% of the value of its net assets is invested in illiquid assets, including restricted securities, the fund will take appropriate steps to protect liquidity.
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Notwithstanding the above, the fund may purchase securities which, while privately placed, are eligible for purchase and sale under Rule 144A under the 1933 Act. This rule permits certain qualified institutional buyers, such as the fund, to trade in privately placed securities even though such securities are not registered under the 1933 Act. T. Rowe Price, under the supervision of the fund`s Board, will consider whether securities purchased under Rule 144A are illiquid and thus subject to the fund`s restriction of investing no more than 15% of its net assets in illiquid securities. A dete rmination of whether a Rule 144A security is liquid or not is a question of fact. In making this determination, T. Rowe Price will consider the trading markets for the specific security, taking into account the unregistered nature of a Rule 144A security. In addition, T. Rowe Price could consider the following: (1) frequency of trades and quotes; (2) number of de alers and potential purchasers; (3) dealer undertakings to make a market; and (4) the nature of the security and of marketplace trades (e.g., the time needed to dispose of the security, the method of soliciting offers, and the mechanics of transfer). The liquidity of Rule 144A securities would be monitored and, if as a result of changed conditions it is determined that a Rule 144A security is no longer liquid, the fund`s holdings of illiquid securities would be reviewed to determine what, if any, steps are require d to assure that the fund does not invest more than 15% of its net assets in illiquid securities. Investing in Rule 144A securities could have the effect of increasing the amount of the fund`s assets invested in illiquid securities if qualified institutional buyers are unwilling to purchase such securities.
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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 fund will as a matter of fundamental policy concentrate 25% or more, but not more than 50%, of its assets, in any one such industry, if the fund has cash for such investment (i.e., the fund 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 fund`s 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 fund 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 i ndustries 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 fund which might result from concentration in any industry will be minimized by the fund`s practice of diversifying its investments in other respects. The fund`s policy with respect to industry concentration is a fundamental policy. (For investment restriction on industry concentration, see "Investment Restrictions").
PORTFOLIO MANAGEMENT PRACTICES
Lending of Portfolio Securities
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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 securit ies lent, marked to market on a daily basis. The collateral received will consist of cash, U.S. government securities, letters of credit, or such other collateral as may be permitted under its investment program. The collateral, in turn, is invested in short-term securities. While the securities are being lent, the fund will continue to receive the equivalent of the interest or dividends paid by the issuer on the securities, as well as a portion of the interest on the investment of the collateral. Normally, the fund employs an agent to implement its securities lending program and the agent receives a fee from the fund for its services. The fund has 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 fund will not have the right to vote on securities while they are being lent, but it will call a loan in anticipation of any important vote. The risks in lending portfolio securities, as with other extensions of secured credit, consist of 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 bears 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.
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Interfund Borrowing and Lending
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The fund is a party to an exemptive order received from the SEC on December 8, 1998, amended on November 23, 1999, that permits it to borrow money from and/or lend money to other funds in the T. Rowe Price complex ("Price Funds"). All loans are set at an interest rate between the rates charged on overnight repurchase agreements and short-term bank loans. All loans are subject to numerous conditions designed to ensure fair and
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equitable treatment of all participating funds. The program is subject to the oversight and periodic review of the Boards of Price Funds.
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Repurchase Agreements
The fund may e nter into a repurchase agreement through which an investor (such as the fund) purchases a .security (known as the "underlying security") from a well-established securities dealer or a bank that is a .member of the Federal Reserve System. Any such dealer or bank will be on T. Rowe Price`s approved list. At that .time, the bank or securities dealer agrees to repurchase the underlying security at the same price, plus specified .interest. Repurchase agreements are generally for a short period of time, often less than a week. Repurchase .agreements which do not provide for payment within seven days will be treated as illiquid securities. The fund .will only enter into repurchase agreements where (i).(A) Government Reserve Investment, Prime Reserve, Reserve Investment, and U.S. Treasury Money Funds—
the underlying securities are either U.S. government securities or securities that, at the time the repurchase agreement is entered into, are rated in the highest rating category by the requisite number of NRSROs (as required by Rule 2a-7 under the 1940 Act) and otherwise are of the type (excluding maturity limitations) which the fund`s investment guidelines would allow it to purchase directly
, (B) Corporate Income, GNMA, High Yield, New Income, Personal Strategy, Short-Term Bond, U.S. Treasury Intermediate, and U.S. Treasury Long-Term Funds—the underlying securities are of the type (excluding maturity limitations) which the fund`s investment guidelines would allow it to purchase directly
; (ii) the market value of the underlying security, including interest accrued, will be equal to or exceed the value of the repurchase agreement; and (iii) payment for the underlying security is made only upon physical delivery or evidence of book-entry transfer to the account of the custodian or a bank acting as agent. In the event of a bankruptcy or other default of a seller of a repurchase agreement, the fund could experience both delays in liquidating the underlying security and losses, including: (a) possible decline in the value of the underlying security during the period while the fund seeks to enforce its rights thereto; (b) possible subnor mal levels of income and lack of access to income during this period; and (c) expenses of enforcing its rights.
Reverse Repurchase Agreements
Although the fund has no current intention of engaging in reverse repurchase agreements, the fund reserves 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 fund, subject to Investment Restriction (1). (See "Investment Restrictions.")
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All funds except Government Reserve Investment, Institutional High Yield, and Reserve Investment Funds
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Money Market Reserves
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The fund may invest its cash reserves primarily in one or more money market funds established for the exclusive .use of the T. Rowe Price family of mutual funds and other clients of T. Rowe Price. 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..(The Prime Reserve and U.S. Treasury Money Funds will not purchase shares of either fund, and the GNMA, U.S. Treasury Intermediate, and U.S. Treasury Long-Term Funds can only purchase shares of GRF.)
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Additional series may be created in the future. These funds were created and operate under an exemptive order issued by the SEC.
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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. While neither RIF nor GRF pays an advisory fee to the investment manager, they will incur other expenses. However, RIF and GRF are expected by T. Rowe Price to operate at very low expense ratios. The fund will only invest in RIF or GRF to the extent it is consistent with its objective and program.
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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 may make short sales for hedging purposes to protect the fund against companies whose credit is deteriorating. Short sales are transactions in which the fund sells a security it does not own in anticipation of a decline in the market value of that security. The fund`s short sales would be limited to situations where the fund owns 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 fund`s net assets.
To complete a short-sale transaction, the fund must borrow the securit y to make delivery to the buyer. The fund then is 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 fund is 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 fund 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 retaine d by the broker, to the extent necessary to meet margin requirements, until the short position is closed out.
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Until the fund replaces a borrowed security in connection with a short sale, the fund 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.
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The fund 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 fund replaces the borrowed security. The fund 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 fund 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 fund security being hedged by the short sale.
The Taxpayer Relief Act of 1997 requires a mutual fund to recognize gain upon enterin g 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 fund enters 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 fund is permitted to invest may cause certain appreciated positions in securities held by the fund 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 fund 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 fund. Because these rules do not apply to "straight" debt transactions, it is not anticipated that they will have a significant impact on the fund; however, the effect cannot be determined until the issuance of clarifying regulations.
All funds except Governme nt Reserve Investment, Prime Reserve, Reserve Investment, and U.S. Treasury Money Funds
Options
Options are a type of potentially high-risk derivative.
Writing Covered Call Options
The fund may write (sell) American or European style "cover ed" call options and purchase options to close out options previously written by the fund. In writing covered call options, the fund expects to generate additional

premium income, which should serve to enhance the fund`s total return and reduce the effect of any price decline of the security or currency involved in the option. Covered call options will generally be written on securities or currencies which, in T. Rowe Price`s opinion, are not expected to have any major price incr eases or moves in the near future but which, over the long term, are deemed to be attractive investments for the fund.
A call option gives the holder (buyer) the right to purchase, and the writer (seller) has the obligation to sell, a security or currency at a specified price (the exercise price) at expiration of the option (European style) or at any time until a certain date (the expiration date) (American style). So long as the obligation of the writer of a call option continues, he may be assigned an exercise notice by the broker-dealer through whom such option was sold, requiring him to deliver the underlying security or currency against payment of the exercise price. This obligation terminates upon the expiration of the call option or such earlier time at which the writer effects a closing purchase transaction by repurchasing an option identical to that previously sold. To secure his obligation to deliver the underlying security or currency in the case of a call option, a writer is required to deposit in escrow the underlying security or currency or other assets in accordance with the rules of a clearing corporation.
The fund generally will write only covered call options. This means that the fund will either own the security or currency subject to the option or an option to purchase the same underlying security or currency having an exercise price equal to or less than the exercise price of the "covered" option. From time to time, the fund will write a call option that is not covered as indicated above but where the fund will establish and maintain, with its custodian for the term of the option, an account consisting of cash, U.S. government securities, other liquid high-grade debt obligations, or other suitable cover as permitted by the SEC, having a value equal to the fluctuating market value of the optioned securities or currencies. While such an option would be "covered" with sufficient collateral to satisfy SEC prohibitions on issuing senior securities, this type of strategy would expose the fund to the risks of writing uncovered options.
Portfolio securities or currencies on which call options may be written will be purchased solely on the basis of investment considerations consistent with the fund`s investment objective. The writing of covered call options is a conservative investment technique believed to involve relatively little risk (in contrast to the writing of naked or uncovered options, which the fund generally will not do) but capable of enhancing the fund`s total return. When writing a covered call option, a fund, in return for the premium, gives up the opportunity for profit from a price increase in the underlying security or currency above the exercise price, but conversely retains the risk of loss should the price of the security or currency decline. Unlike one that owns securities or currencies not subject to an option, the fund has no control over when it may be required to sell the underlying securities or currencies, since it may be assigned an exercise notice at any time prior to the expiratio n of its obligation as a writer. If a call option the fund has written expires, the fund will realize a gain in the amount of the premium; however, such gain may be offset by a decline in the market value of the underlying security or currency during the option period. If the call option is exercised, the fund will realize a gain or loss from the sale of the underlying security or currency. The fund does not consider a security or currency covered by a call to be "pledged" as that term is used in the fund`s policy , which limits the pledging or mortgaging of its assets. If the fund writes an uncovered option as described above, it will bear the risk of having to purchase the security subject to the option at a price higher than the exercise price of the option. As the price of a security could appreciate substantially, the fund`s loss could be significant.
The premium received is the market value of an option. The premium the fund will receive from writing a call option will reflect, among other things, the current market price of the underlying security or currency, the relationship of the exercise price to such market price, the historical price volatility of the underlying security or currency, and the length of the option period. Once the decision to write a call option has been made, T. Rowe Price, in determining whether a particular call option should be written on a particular security or currency, will consider the reasonableness of the anticipated premium and the likelihood that a liquid secondary market will exist for those options. The premium received by the fund for writing covered call options will be recorded as a liability of the fund. This liability will be adjusted daily to the option`s current market value, which will be the latest sale price on its primary exchange at the time at which the net asset value per share of the fund is computed (close of the New York Stock Exchange) or, in the absence of such sale, the 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.

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Closing transactions will be effected in order to realize a profit on an outstanding call option, to prevent an underlying security or currency from being called, or to permit the sale of the underlying security or currency. Furthermore, effecting a closing transaction will permit the fund to write another call option on the underlying security or currency with either a different exer cise price or expiration date or both. If the fund desires to sell a particular security or currency from its portfolio on which it has written a call option, or purchased a put option, it will seek to effect a closing transaction prior to, or concurrently with, the sale of the security or currency. There is, of course, no assurance that the fund will be able to effect such closing transactions at favorable prices. If the fund cannot enter into such a transaction, it may be required to hold a security or currency that it might otherwise have sold. When the fund writes a covered call option, it runs the risk of not being able to participate in the appreciation of the underlying securities or currencies above the exercise price, as well as the risk of being required to hold on to securities or currencies that are depreciating in value. This could result in higher transaction costs. The fund will pay transaction costs in connection with the writing of options to close out previously written options. Such transaction costs are normally higher than those applicable to purchases and sales of portfolio securities.
Call options written b y the fund will normally have expiration dates of less than nine months from the date written. The exercise price of the options may be below, equal to, or above the current market values of the underlying securities or currencies at the time the options are written. From time to time, the fund may purchase an underlying security or currency for delivery in accordance with an exercise notice of a call option assigned to it, rather than delivering such security or currency from its portfolio. In such cases, additional costs may be incurred.
The fund will realize a profit or loss from a closing purchase transaction if the cost of the transaction is less or more than the premium received from the writing of the option. Because increases in the market price of a call option will generally reflect increases in the market price of the underlying security or currency, any loss resulting from the repurchase of a call option is likely to be offset in whole or in part by appreciation of the underlying security or currency owned by the fund.
The fund will not write a covered call option if, as a result, the aggregate market value of all portfolio securities or currencies covering written call or put options exceeds 25% of the market value of the fund`s total assets. In calculating the 25% limit, the fund 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 fund may write American or European style covered put options and purchase options to close out options previously written by the fund. A put option gives the purchaser of the option the right to sell, and the writer (seller) has the obligation to buy, the underlying security or currency at the exercise price during the option period (American style) or at the expiration of the option (European style). So long as the obligation of the writer continues, he may be assigned an exercise notice by the broker-dealer through whom such option was sold, requiring him to make payment to the exercise price against delivery of the underlying security or < font style="font-size:10.0pt;" face="Berkeley Book" color="Black">currency. The operation of put options in other respects, including their related risks and rewards, is substantially identical to that of call options.
The fund would write put options only on a covered basis. This means that the fund would maintain, in a segregated account, cash, U.S. government securities, other liquid high-grade debt obligations, or other suitable cover as determined by the SEC, in an amount not less than the exercise price. Alternatively, the fund will own an option to sell the underlying security or currency subject to the option having an exercise price equal to or greater than the exercise price of the "covered" option at all times while the put option is outstanding. (The rules of a clearing corporation currently require that such assets be deposited in e scrow to secure payment of the exercise price.)
The fund would generally write covered put options in circumstances where T. Rowe Price wishes to purchase the underlying security or currency for the fund`s portfolio at a price lower than the current market price of the security or currency. In such event the fund would write a put option at an exercise price which, reduced by the premium received on the option, reflects the lower price it is willing to pay. Since the fund would also receive interest on debt securities or currencies maintained to cover the exercise price of the option, this technique could be used to enhance current return during periods of market uncertainty. The risk in such a transaction would be that the market price of the underlying security or currency would decline below the exercise price,

less the premiums received. Such a decline could be substantial and result in a significant loss to the fund. In addition, the fund, because it does not own the specific securities or currencies which it may be required to purchase in exercise of the put, cannot benefit from appreciation, if any, with respect to such specific securities or currencies.
The fu nd will not write a covered put option if, as a result, the aggregate market value of all portfolio securities or currencies covering put or call options exceeds 25% of the market value of the fund`s total assets. In calculating the 25% limit, the fund 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 for writing covered put options will be recorded as a liability of the fund. This liability will be adjusted daily to the option` s current market value, which will be the latest sale price on its primary exchange at the time at which the net asset value per share of the fund is computed (close of the New York Stock Exchange), or, in the absence of such sale, the mean of the closing bid and ask prices.
Purchasing Put Options
The fund may purchase American or European style put options. As the holder of a p ut option, the fund has the right to sell the underlying security or currency at the exercise price at any time during the option period (American style) or at the expiration of the option (European style). The fund may enter into closing sale transactions with respect to such options, exercise them, or permit them to expire. The fund may purchase put options for defensive purposes in order to protect against an anticipated decline in the value of its securities or currencies. An example of such use of put options is provided next.
< font style="font-size:12.0pt;" face="Courier New" color="Black">The fund may purchase a put option on an underlying security or currency (a "protective put") owned by the fund as a defensive technique in order to protect against an anticipated decline in the value of the security or currency. Such hedge protection is provided only during the life of the put option when the fund, as the holder of the put option, is able to sell the underlying security or currency at the put exercise price regardless of any decline in the underlying security`s market price or currency`s exchange valu e. For example, a put option may be purchased in order to protect unrealized appreciation of a security or currency where T. Rowe Price deems it desirable to continue to hold the security or currency because of tax considerations. The premium paid for the put option and any transaction costs would reduce any capital gain otherwise available for distribution when the security or currency is eventually sold.
The fund may also purchase put options at a time when the fund does not own the underlying security or currency. By purchasing put options on a security or currency it does not own, the fund seeks to benefit from a decline in the market price of the underlying security or currency. If the put option is not sold when it has remaining value and if the market price of the underlying security or currency remains equal to or greater than the exercise price during the life of the put option, the fund will lose its entire investment in the put option. In order for the purchase of a put op tion to be profitable, the market price of the underlying security or currency must decline sufficiently below the exercise price to cover the premium and transaction costs, unless the put option is sold in a closing sale transaction.
The fund will not commit more than 5% of its assets to premiums when purchasing put options. The premium paid by the fund when purchasing a put option will be recorded as an asset of the fund in the portfolio of investments. This asset will be adjus ted 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 is 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) o f an identical option in a closing transaction, or the delivery of the underlying security or currency upon the exercise of the option.
Purchasing Call Options
The fund may purchase American or European style call options. As the holder of a call option, the fund has the right to purchase the underlying security or currency at the exercise price at any time during the option period (American style) or at the expiration of the option (European st yle). The fund may enter into closing sale transactions with respect to such options, exercise them, or permit them to expire. The fund may purchase call options for the purpose of increasing its current return or avoiding tax consequences which could reduce its current return. The fund may also purchase call options in order to acquire the underlying securities or currencies. Examples of such uses of call options are provided next.

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Call options may be purchased by the fund for the purpose of acquiring the underlying securities or currencies for its portfolio. Utilized in this fashion, the purchase of call options enables the fund to acquire the securities or currencies at the exercise price of the call option plus the premium paid. At times the net cost of acquiring securities or currencies in this manner may be less than the cost of acquiring the securities or currencies directly. This technique may also be useful to the fund in purchasing a large block of securities or currencies that would be more difficult to acquire by direct market purchases. So long as it holds such a call option, rather than the underlying security or currency itself, the fund is partially protected from any unexpected decline in the market price of the underlying security or currency and in such event could allow the call option to expire, incur ring a loss only to the extent of the premium paid for the option.
The fund may also purchase call options on underlying securities or currencies it owns in order to protect unrealized gains on call options previously written by it. A call option would be purchased for this purpose where tax considerations make it inadvisable to realize such gains through a closing purchase transaction. Call options may also be purchased at times to avoid realizing losses.
The fund will not commit more than 5% of its assets to premiums when purchasing call and put options. The premium paid by the fund when purchasing a call option will be recorded as an asset of the fund 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 per share of the fund is 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 fund may engage in transactions involving dealer options. Certain risks are specific to dealer options. While the fund would look to a clearing corporation to exercise exchange-traded options, if the fund were to purchase a dealer option, it would rely on the dealer from whom it purchased the option to perform if the option were exercised. Failure by the dealer to do so would result in the loss of the premium paid by the fund as well as loss of the expected benefit of the transaction.
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Exchange-traded options generally have a continuous liquid market, while dealer options have none. Consequently, the fund will generally be able to realize the value of a dealer option it has purchased on ly by exercising it or reselling it to the dealer who issued it. Similarly, when the fund writes a dealer option, it generally will be able to close out the option prior to its expiration only by entering into a closing purchase transaction with the dealer to which the fund originally wrote the option. While the fund will seek to enter into dealer options only with dealers who will agree to and are expected to be capable of entering into closing transactions with the fund, there can be no assurance that the fund will be able to liquidate a dealer option at a favorable price at any time prior to expiration. Until the fund, as a covered dealer call option writer, is able to effect a closing purchase transaction, it will not be able to liquidate securities (or other assets) or currencies used as cover until the option expires or is exercised. In the event of insolvency of the counterparty, the fund may be unable to liquidate a dealer option. With respect to options written by the fund, the inability to enter into a closing transaction may result in material losses to the fund. For example, since the fund must maintain a secured position with respect to any call option on a security it writes, the fund may not sell the assets it has segregated to secure the position while it is obligated under the option. This requirement may impair a fund`s ability to sell portfolio securities or currencies at a time when such sale might be advantageous.
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The staff of the SEC has taken the position that purchased dealer options and the assets used to secure the written dealer op tions are illiquid securities. The fund may treat the cover used for written Over-the-Counter ("OTC") options as liquid if the dealer agrees that the fund may repurchase the OTC option it has written for a maximum price to be calculated by a predetermined formula. In such cases, the OTC option would be considered illiquid only to the extent the maximum repurchase price under the formula exceeds the intrinsic value of the option.
High Yield and Institutional High Yield Funds
Spread Option Transactions
The fund 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 fund the right to put, or sell, a security that it owns at a fixed dollar spread or fixed yield spread in relationship to another security that

the fund does not own, but which is used as a benchmark. The risk to the fund 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 fund against adverse changes in prevailing credit quality spreads, i.e., the yield spread between high-quality and lower-quality securiti es. 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 fund`s custodian. The fund does not consider a security covered by a spread option to be "pledged" as that term is used in the fund`s policy limiting the pledging or mortgaging of its assets. The fund 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 fund would not own either of the securities involved in the spread.
All funds except Government Reserve Investment, Prime Reserve, Reserve Investment, and U.S. Treasury Money Funds
Futures Contracts
Futures contracts are a type of potentially high-risk derivative.
Transactions in Futures
The fund may enter into futures contracts including stock index, interest rate, and currency futures ("futures" or "futures contracts").
Stock index futures contracts may be used to provide a hedge for a portion of the fund`s portfolio, as a cash management tool, or as an efficient way for T. Rowe Price to implement either an increase or decrease in portfolio market exposure in response to changing market conditions. The fund may purchase or sell futures contracts with respect to any stock index. Nevertheless, to hedge the fund`s portfolio successfully, the fund must sell futures contracts with respect to indices or subindices whose movements will have a significant correlation with movements in the prices of the fund`s portfolio securities.
Interest rate or currency futures contracts may be used as a hedge against changes in prevailing levels of interest rates or currency exchange rates in order to establish more definitely the effective return on securities or currencies held or intended to be acquired by the fund. In this regard, the fund could sell interest rate or currency futures as an o ffset against the effect of expected increases in interest rates or currency exchange rates and purchase such futures as an offset against the effect of expected declines in interest rates or currency exchange rates.
The fund will enter into futures contracts, which are traded on national or foreign futures exchanges and are standardized as to maturity date and underlying financial instrument. Futures exchang es and trading in the United States are regulated under the Commodity Exchange Act by the CFTC. Although techniques other than the sale and purchase of futures contracts could be used for the above-referenced purposes, futures contracts offer an effective and relatively low-cost means of implementing the fund`s objectives in these areas.
Regulatory Limitations
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If the fund purchases or sells futures contracts or related options which do not qualify as bona fide hedging under applicable CFTC rules, the aggregate initial margin deposits and premium required to establish those positions cannot exceed 5% of the liquidation value of the fund after taking into account unrealized profits and unrealized losses on any such contracts it has entered into, provided, however, that in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in calculating the 5% limitation. For purposes of this policy, opt ions on futures contracts and foreign currency options traded on a commodities exchange will be considered "related options." This policy may be modified by the Board without a shareholder vote and does not limit the percentage of the fund`s assets at risk to 5%.
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In instances involving the purchase of futures contracts or the writing of call or put options thereon by the fund, an amount of cash, liquid assets, or other suitable cover as permitted by the SEC, equal to the market value of the futures contracts and options thereon (less any related margin deposits), will be identified by the fund to cover the position, or alternative cover (such as owning an offsetting position) will be employed. Assets used as cover or held in an identified account cannot be sold while the position in the corresponding option or future is open, unless they are replaced with similar assets. As a result, the commitment of a large portion of a fund`s

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assets to cover or identified accounts could impede portfolio management or the fund`s ability to meet redemption requests or other current obligations.
If the CFTC or other regulatory authorities adopt different (including less stringent) or additional restrictions, the fund wou ld 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 debt security) for a specified price, date, time, and place designated at the time the contract is made. Brokerage fees are incurred when a fu tures contract is bought or sold and margin deposits must be maintained. Entering into a contract to buy is commonly referred to as buying or purchasing a contract or holding a long position. Entering into a contract to sell is commonly referred to as selling a contract or holding a short position.
Unlike when the fund purchases or sells a security, no price would be paid or received by the fund upon the purchase or sale of a futures contract. Upon entering into a futures contract, and to maintain the fund`s open positions in futures contracts, the fund would be required to deposit with its custodian in a segregated account in the name of the futures broker an amount of cash or liquid assets known as "initial margin." The margin required for a particular futures contract is set by the exchange on which the contract is traded and may be significantly modified from time to time by the exchange during the term of the contract. Futures contracts are customarily purchased and sold on margins that may range upward from less than 5% of the value of the contrac t 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 ("variation margin") to restore the margin account to the amount of the initial margin.
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Subsequent payments ("mark-to-market payments") to and from the futures broker are made on a daily basis as the price of the u nderlying 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 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 pa y the amount of the daily change in value to the fund.
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Although certain futures contracts, by their terms, require actual future delivery of and payment for the underlying instruments, in practice most futures contracts are usually closed out before the delivery date. Closing out an open futures contract purchase or sale is effected by entering into an offsetting futures contract sale or purchase, respectively, for the same aggregate amount of the identical securities and the same delivery date. If the offsetting purchase price is less than the original sale price, the fund realizes a gain; if it is more, the fund realizes a loss. Conversely, if the offsetting sale price is more than the original purchase price, the fund realizes a gain; if it is less, the fund realizes a loss. The transaction costs must also be included in these calculations. There can be no assurance, however, that the fund will be able to enter into an offsetting transaction with respect to a particular futures contract at a particular time. If the fund is not able to enter into an offsetting transaction, the fund will continue to be required to main tain 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 fund.
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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 weigh tings 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 i ndex were $150, one contract would be worth $37,500 (250 units x $150). The stock index futures
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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 fund will equal the difference between the purchase (or sale) price of the contract and the price at which the contract is terminated. For example, if the fund enters into a futures contract to buy 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 fund will gain $1,000 (250 units x gain of $4). If the fund enters 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 fund will lose $500 (250 units x loss of $2).
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Special Risks of Transactions in Futures Contracts
Volatility and Leverage The prices of futures contracts are volatile and are influenced, among other things, by actual and anticipated changes in the market and interest rates, which in turn are affected by fiscal and monetary policies and national and international political and economic events.
Most United States futures exchanges limit the amount of fluctuation permitted in futures contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day`s settlement price at the end of a trading session. Once the daily limit has been reached in a particular type of futures contract, no trades may be made on that day at a price beyond that limit. The daily limit governs only price movement during a particular trading day and therefore does not limit potential losses because the limit may prevent the liquidation of unfavorable positions. Futures contract prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and subjecting some futures traders to substantial losses.
Margin deposits required on futures trading are low. As a result, a relatively small price movement in a futures contr act may result in immediate and substantial loss, as well as gain, to the investor. For example, if at the time of purchase, 10% of the value of the futures contract is deposited as margin, a subsequent 10% decrease in the value of the futures contract would result in a total loss of the margin deposit, before any deduction for the transaction costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150% of the original margin deposit, if the contract were closed out. Thus, a purchase or sale of a futures contract may result in losses in excess of the amount invested in the futures contract.
Liquidity The fund may elect to close some or all of its futures positions at any time prior to their expiration. The fund would do so to reduce exposure represented by long futures positions or short futures positions. The fund may close its positions by taking opposite positions, which would operate to terminate the fund`s position in the futures contracts. Final determinations of mark-to-market payments would then be made, additional cash would be required to be paid by or released to the fund, and the fund would realize a loss or a gain.
Futures contracts may be closed out only on the exchange or board of trade where the contracts were initially traded. Although the fund intends to purchase or sell futures contracts only on exchanges or boards of trade where there appears to be an active market, there is no assurance that a liquid market on an exchange or board of trade will exist for any particular contract at any particular time. In such event, it might not be possible to close a futures contract, and in the event of adverse price movements, the fund would continue to be required to make daily mark-to-market and variation margin payments. However, in the event futures contracts have been used to hedge the underlying instruments, the fund would continue to hold the underlying instruments subject to the hedge until the futures contracts could be terminated. In such circumstances, an increase in the price of underlying instruments, if any, might partially or completely offset losses on the futures contract. However, as described next, there is no guarantee that the price of the underlying instruments will, in fact, correlate with the price movements in the futures contract and thus provide an offset to losses on a futures contract.
Hedging Risk A decision 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 fund of futures contracts as a hedging device. One risk arises because of the imperfect correlation between movements in the prices of the futures contracts and movements in the prices of the underlying instruments which are the subject of the hedge. T. Rowe Price will, however, attempt to reduce this risk by entering into futures contracts whose movements, in its judgment, will have a significant correlation with movements in the prices of the fund`s underlying instruments sought to be hedged.

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Successful use of futures contracts by the fund for hedging purposes is also subject to T. Rowe Price`s ability to correctly predict movements in the direction of the market. It is possible that, when the fund has sold futures to hedge its portfolio against a decline in the market, the index, indices, or inst ruments underlying futures might advance, and the value of the underlying instruments held in the fund`s portfolio might decline. If this were to occur, the fund would lose money on the futures and also would experience a decline in value in its underlying instruments. However, while this might occur to a certain degree, T. Rowe Price believes that over time the value of the fund`s portfolio will tend to move in the same direction as the market indices used to hedge the portfolio. It is also possible that, if the fund were to hedge against the possibility of a decline in the market (adversely affecting the underlying instruments held in its portfolio) and prices instead increased, the fund would lose part or all of the benefit of increased value of those underlying instruments that it had hedged because it would have offsetting losses in its futures positions. In addition, in such situations, if the fund had insufficient cash, it might have to sell underlying instruments to meet daily 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 fund might have to sell underlying instruments at a time when it would be disadvantageous to do so.
In addition to the possibility that there might be an imperfect correlation, or n o correlation at all, between price movements in the futures contracts and the portion of the portfolio being hedged, the price movements of futures contracts might not correlate perfectly with price movements in the underlying instruments due to certain market distortions. First, all participants in the futures market are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors might close futures contracts through offsetting transactions, which could distort the normal relationship between the underlying instrument s 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
The fund may purchase and sell options on the same types of futures in which it may invest.
Options (another type of potentially high-risk derivative) on futures are similar to options on under lying 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 accou nt 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 is computed (close of New York Stock Exchange), or, in the absence of such sale, the mean of closing bid and ask prices.
As an alternative to writing or purchasing call and put options on interest rate futures, the fund may write or purchase call and put options on financial indices. Such options would be used in a manner similar to the use of options on fut ures contracts. From time to time, a single order to purchase or sell futures contracts (or options thereon) may be made on behalf of the fund and other T. Rowe Price funds. Such aggregated orders would be allocated among the funds and the other T. Rowe Price funds in a fair and nondiscriminatory manner.
Special Risks of Transactions in Options on Futures Contracts
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The risks described under "Special Risks of Transactions in Futures Contracts" are substantially the same as the risks of using options on futures. If the fund were to write an option on a futures contract, it would be required to deposit initial margin and maintain mark-to-market payments in the same manner as a regular futures contract. In addition, where the fund seeks to close out an option position by writing or buying an offsetting
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option covering the same index, underlying instrument, or contract and having the same exercise price and expiration date, its ability to establish and close out positions on such options will be subject to the maintenance of a liquid secondary market. Reasons for the absence of a liquid secondary market on an exchange include the following: (1) there may be insufficient trading interest in certain options; (2) restrictions may be imposed by an exchange on ope ning 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 th e 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.
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Additional Futures and Options Contracts
Although the fund has no current intention of engaging in futures or options transactions other than those described above, it reserves the right to do so. Such futures and options trading might involve risks which differ from those involved in the futures and options described above.
Foreign Futures and Options
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Participation in foreign futures and foreign options transactions involves the execution and clearing of trades on, or subject to the rules of, a foreign board of trade. Neither the National Futures Association nor any domestic exchange regulates activities of any foreign boards of trade, including the execution, delivery, and clearing of transactions, or has the power to compel enforcement of the rules of a foreign board of trade or any applicable foreign law. This is true even if the exchange is formally linked to a domestic market so that a position taken on the market may be liquidated by a transaction on another market. Moreover, such laws or regulations will vary depending on the foreign country in which the foreign futures or foreign options transaction occurs. For these reasons, when the fund trades foreign futures or foreign options contracts, it may not be afforded certain of the protective measures provided by the Commodity Exchange Act, the CFTC`s regulations, and the rules of the National Futures Association and any domestic exchange, including the right to use reparations proceedings before the CFTC and arbitration proceedings provided by the National Futures Association or any domestic futures exchange. In particular, funds received from the fund for foreign futures or foreign options transactions may not be provided the same protections as funds received for transactions on United States futures exchanges. In addition, the price of any foreign futures or foreign options contract and, therefore, the potential profit and loss thereon may be affected by any variance in the foreig n exchange rate between the time the fund`s order is placed and the time it is liquidated, offset, or exercised.
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Corporate Income, High Yield, Inflation Protected Bond, Institutional High Yield, New Income, Personal Strategy, and Short-Term Bond Funds
Swap Agreements
The fund may enter into interest rate, index, total return, credit, and, to the extent it may invest in foreign currency-denominated securities, currency rate swap agreements. The fund 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 inte rest 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, cancel, or otherwise modify an existing swap agreement at some designated future time on specified terms. The fund may write (sell) and purchase put and call swap options.

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<R>
One example of the use of swaps within a fund may be to manage the interest rate sensitivity of the fund. The fund 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. Or, the fund may buy or sell swap options to effect the same result. The fund may also replicate a security by selling it, placing the proceeds in cash deposits, and receiving a fixed rate in the swap market.
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<R>
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 upfront or periodic payment to compensate against potential default event(s). The fund 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.
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Most swap agreements entered into by the fund would calculate the obligations of the parties to the agreement on a "net basis." Consequently, the fund`s 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 fund`s current obligations under a net swap agreement will be accrued daily (offset against any amounts owed to the fund) 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 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. Total return swaps could result in losses if the reference index, security, or investments do not perform as anticipated by the fund. Credit default swaps could result in losses if the fund does not correctly evaluate the creditworthiness of the company on which the credit default swap is based.
The fund will generally incur a greater degree of risk when it writes a swap option than when it purchases a swap option. When the fund purchases a swap option it risks losing only the amount of the premium it has paid should it decide to let the option expire unexercised. However, when the fund writes a swap option it 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 bears 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 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 fund`s ability to terminate existing swap agreements or to realize amounts to be received under such agreements.
U.S. Treasury Intermediate and U.S. Treasury Long-Term Funds
Limitations on Futures and Options for Intermediate and Long-Term Funds
<R>
The funds will not purchase a futures contract or option thereon if, with respect to positions in futures or < /font>options on futures which do not represent bona fide hedging, the aggregate initial margin and premiums on such positions would exceed 5% of the fund`s 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 fund`s total assets.
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A fund 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 fund`s total assets.
A fund 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 fund`s 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: a fund may invest up to 15% of its total assets in premiums on put options and 15% of its total assets in premiums on call options. The total amount of a fund`s total assets invested in futures and options will not exceed 15% of the fund`s total assets.

Corporate Income, High Yield, Institutional High Yield, New Income, Personal Strategy, and Short-Term Bond Funds
Foreign Currency Transactions
<R>
A forward foreign currency exchange contract involves an obligation to purchase or sell a specific currency at a .future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at .a price set at the time of the contract. These contracts are principally traded in the interbank market conducted .directly between currency traders (usually large commercial banks) and their customers. A forward contract .generally has no deposit requirement, and no commissions are charged at any stage for trades. The fund may .enter into forward contracts for a variety of purposes in connection with the management of the foreign .securities portion of its portfolio.. The fund`s use of such contracts would include, but not be limited to, the following:
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First, when the fund enters into a contract for the pu rchase or sale of a security denominated in a foreign currency, it may desire to "lock in" the U.S. dollar price of the security. By entering into a forward contract for the purchase or sale, for a fixed amount of dollars, of the amount of foreign currency involved in the underlying security transactions, the fund will be able to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the subject foreign currency during the period between the date the security is purchased or sold and the date on which payment is made or received.
Second, when T. Rowe Price believes that one currency may experience a substantial movement against another currency, including the U.S. dollar, it may enter into a forward contract to sell or buy the amount of the former foreign currency, approximating the value of some or all of the fund`s portfolio securities denominated in such foreign currency. Alternatively, where appropriate, the fund may hedge all or part of its foreign currency exposure through the use of a basket of currencies or a proxy currency where such currency or currencies act as an effective proxy for other currencies. In such a case, the fund may enter into a forward contract where the amount of the foreign currency to be sold exceeds the value of the securities denominated in such currency. The use of this basket hedging technique may be more efficient and economical than entering into separate forward contracts for each currency held in the fund. The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible since the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date the forward contract is entered into and the date it matures. The projection of short-term currency market movement is extremely difficult, and the successful execution of a short-term hedging strategy is highly uncertain. 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 of the fund will be served.
Third, the fund may use forward contracts when the fund wishes 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.
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The fund may enter into forward contracts for any other purpose consistent with the fund`s investment objective and program. However, the fund will not e nter into a forward contract, or maintain exposure to any such contract(s), if the amount of foreign currency required to be delivered thereunder would exceed the fund`s holdings of liquid, high-grade debt securities, currency available for cover of the forward contract(s), or other suitable cover as permitted by the SEC. In determining the amount to be delivered under a contract, the fund may net offsetting positions.
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At the maturity of a forward contract, the fund may sell the portfolio security and make delivery of the foreign currency, or it may retain the security and either extend the maturity of the forward contract (by "rolling" that contract forward) or may initiate a new forward contract.
If the fund retains the portfolio security and engages in an offsetting transaction, the fund will incur a gain or a loss (as described below) to the extent that there has been movement in forward contract prices. If the fund engages in an offsetting transaction, it may subsequently enter into a new forward contract to sell the foreign currency. Should forward prices decline during the period between the fund`s entering into a forward contract for the sale of a foreign currency and the date it enters into an offsetting contract for the purchase of the foreign

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currency, the fund will realize a gain to the extent the price of the currency it has agreed to sell exceeds the price of the currency it has agreed to purchase. Should forward prices increase, the fund will suffer a loss to the extent the price of the currency it has agreed to purchase exceeds the price of the currency it has agreed to sell.
The fund`s dealing in forward foreign currency exchange contracts will generally be limited to the transactions described above. However, the fund reserves the right to enter into forward foreign currency contracts for different purposes and under different circumstances. Of course, the fund is not required to enter into forward contracts with regard to its foreign currency-denominated securities and will not do so unless deemed appropriate by T. Rowe Price. It also should be realized that this method of hedging aga inst a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange at a future date. Additionally, although such contracts tend to minimize the risk of loss due to a decline in the value of the hedged currency, at the same time, they tend to limit any potential gain which might result from an increase in the value of that currency.
Although the fund values its assets daily in terms of U.S. dollars, it does not intend to convert its holdings of foreign currencies into U.S. dollars on a daily basis. It will do so from time to time, and there are costs associated with currency conversion. Although foreign exchange dealers do not charge a fee for conversion, they do realize a profit based on the difference (the "spread") between the prices at which they are buying and selling various currencies. Thus, a dealer may offer to sell a foreign currency to the fund at one rate, while offering a lesser rate of exchange should the fund desire to resell that currency to the deale r.
Federal Tax Treatment of Options, Futures Contracts, and Forward Foreign Exchange Contracts
<R>
The fund may enter into certain options, futures, forward foreign exchange contracts, and swaps, including options and futures on currencies, which will be treated as Section 1256 contracts or straddles.
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These transactions will be considered to have been closed at the end of the fund`s fiscal year and any gains or losses will be recognized for tax purposes at that time. Such gains or losses from the normal closing or settlement of such transactions will be characterized as 60% long-term capital gain (taxable at a maximum rate of 15%) or loss and 40% short-term capita l gain or loss regardless of the holding period of the instrument (ordinary income or loss for forward foreign exchange contracts). The fund will be required to distribute net gains on such transactions to shareholders even though it may not have closed the transaction and received cash to pay such distributions.
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Options, futures, forward foreign exchange contracts, and swaps, including options and futures on currencies, which offset a foreign dollar-denominated bond or currency position, may be considered straddles for tax purposes, in which case a loss on any position in a straddle will be subject to deferral to the extent of unrealized gain in an offsetting position. The holding period of the securities or currencies comprising the straddle will be deemed not to begin until the straddle is terminated. The holding period of the security offsetting an "in-the-money qualified covered call" option on an equity security will not include the period of time the option is outstanding.
Losses on written covered calls and purchased puts on securities, excluding certain "qualified covered call" options on equity securities, may be long-term capital losses, if the security covering the option was held for more than 12 months prior to the writing of the option.
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In order for the fund to continue to qualify for federal income tax treatment as a regulated investment company, at least 90% of its gross income for a taxable year must be derived from qualifying income, i.e., dividends, interest, income derived from loans of securities, and gains from the sale of securities or currencies. Tax regulations could be issued limiting the extent that net gain realized from 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 contracts, swaps, or forward foreign exchange contracts may result in the "constructive sale" of offsetting stocks or debt securities of the fund.
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The Internal Revenue Service has issued a notice proposing alternative methods for the inclusion or deduction of certain payments made under swap contracts. Although not anticipated, it is possible that final rules could result in changes to the amounts recorded by the fund, potentially impacting the tax results of the fund.

INVESTMENT RESTRICTIONS
<R>
Fundamental policies may not be changed without the approval of the lesser of (1) 67% of the fund`s shares present at a meeting of shareholders if the holders of more than 50% of the outstanding shares are present in person or by proxy or (2) more than 50% of a fund`s outstanding shares. Other restrictions in the form of operating policies are subject to change by the fund`s Board without shareholder approval. Any investment restriction which involves a maximum percentage of securities or assets shall not be considered to be violated unless an excess over the percentage occurs immediately after, and is caused by, an acquisition of securities or assets of, or borrowings by, the fund. Calculation of the fund`s total assets for compliance with any of the following fundamental or operating policies or any other investment restrictions set forth in the fund`s prospectus or Statement of Additional Information will not include cash collateral held in connection with securities lending activities.
</R>
Fundamental Policies
As a matter of fundamental policy, the fund may not:
Borrowing Borrow money except that the fund may (i) borrow for non-leveraging, temporary, or emergency purposes; and (ii) engage in reverse repurchase agreements and make other investments or engage in other transactions, which may involve a borrowing, in a manner consistent with the fund`s investment objective and program, provided that the combination of (i) and (ii) shall not exceed 33xb6 /xb8 % of the value of the fund`s total assets (including the amount borrowed) less liabilities (other than borrowings) or such other percentage permitted by law. Any borrowings which come to exceed this amount will be reduced in accordance with applicable law. The fund may borrow from banks, other Price Funds, or other persons to the extent permitted by applicable law;
Commodities Purchase or sell physical commodities, except that the fund (other than the Government Reserve Investment, Prime Reserve, Reserve Investment, and U.S. Treasury Money Funds) may enter into futures contracts and options thereon;
(a)Industry Concentration (All funds except High Yield, New Income, Prime Reserve, Reserve Investment, and Short-Term Bond Funds) 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;
<R>
(b)Industry Concentration (High Yield Fund1) 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;
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(c)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;
(d)Industry Concentration (Prime Reserve and Reserve Investment Funds) Purchase the securities of any issuer if, as a result, more than 25% of the value of the fund`s t otal 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; and
(e)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

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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;
Loans Make loans, although the fund may (i) lend portfolio securities and participate in an interfund lending program with other Price Funds provided that no such loan may be made if, as a result, the aggregate of such loans would exceed 33xb6 /xb8 % of the value of the fund`s total assets; (ii) purchase money market securities and enter into repurchase agreements; and (iii) acquire publicly distributed or privately placed debt securities and purchase debt;
Percent Limit on Assets Invested in Any One Issuer.Purchase a security if, as a result, with respect to 75% of the value of its total assets, more than 5% of the value of the fund`s total assets would be invested in the securities of a single issuer, except securities issued or guaranteed by the U.S. government, its agencies, or instrumentalities;
Percent Limit on Share Ownership of Any One Issuer.Purchase a security if, as a result, with respect to 75% of the value of its total assets, more than 10% of the outstanding voting securities of any issuer would be held by the fund (other than obligations issued or guaranteed by the U.S. government, its agencies, or instrumentalities);
Real Estate Purchase or sell real estate, including limited partnership interests therein, unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business);
Senior Securities Issue senior securities except in compliance with the 1940 Act; or
Underwriting Underwrite securities issued by other persons, except to the extent that the fund may be deemed to be an underwriter within the meaning of the 1933 Act in connection with the purchase and sale of its portfolio securities in the ordinary course of pursuing its investment program.
NOTES
The following Notes should be read in connection with the above-described fundamental policies. The Notes are not fundamental policies.
With respect to investment restriction (1), the Government Reserve Investment, Prime Reserve, Reserve Investment, and U.S. Treasury Money Funds have no current intention of engaging in any borrowing transactions.
With respect to investment restriction (2), the fund does not consider currency contracts or hybrid investments to be commodities.
For purposes of investment restriction (3):
U.S., state, or local governments, or related agencies or instrumentalities, are not considered an industry.
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Industries 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.
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It is the position of the staff of the SEC that foreign governments are industries for purposes of this restriction.
The High Yield, New Income, and Short-Term Bond Funds have no current intention of concentrating their investments.
For purposes of investment restriction (4), the fund will consider the acquisition of a debt security to include the execution of a note or other evidence of an extension of credit with a term of more than nine < font style="font-size:12.0pt;" face="Courier New" color="Black">months.

For purposes of investment restriction (5), the fund will consider a repurchase agreement fully collateralized with U.S. government securities to be U.S. government securities.
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With respect to investment restriction (8), under 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.
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Operating Policies
As a matter of operating policy, the fund may not:
Borrowing Purchase additional securities when money borrowed exceeds 5% of its total assets;
Control of Portfolio Companies Invest in companies for the purpose of exercising management or control;
(a)Equity Securities (All funds, except 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 (High Yield Fund) Invest more than 20% of the fund`s total assets in equity securities (including up to 10% in warrants);
(c)Equity Securities (New Income Fund) Invest more than 25% of the fund`s total assets in equity securities;
Futures Contracts Purchase a futures contract or an option thereon if, with respect to positions in futures or options on futures which do not represent bona fide hedging, the aggregate initial margin and premiums on such options would exceed 5% of the fund`s net asset value;
Illiquid Securities Purchase illiquid securities if, as a result, more than 15% of its net assets would be invested in such securities;
Investment Companies  Purchase securities of open-end or closed-end investment companies except (i) in compliance with the 1940 Act; (ii) securities of the Reserve Investment or Government Reserve Investment Funds; or (iii) in the case of the Government Reserve Investment, Prime Reserve, Reserve Investment, and U.S. Treasury Money Funds, only securities of other money market funds;
Margin Purchase securities on margin, except (i) for use of short-term credit necessary for clearance of purchases of portfolio securities and (ii) it may make margin deposits in connection with futures contracts or other permissi ble investments;
Mortgaging Mortgage, pledge, hypothecate, or, in any manner, transfer any security owned by the fund as security for indebtedness, except as may be necessary in connection with permissible borrowings or investments, and then such mortgaging, pledging, or hypothecating may not exceed 33xb6 /xb8 % of the fund`s 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 fund would be invested in such programs;
Options, etc. Invest in puts, calls, straddles, spreads, or any combination thereof, except to the extent permitted by the prospectus and Statement of Additional Information;
(a)Short Sales (All funds except High Yield Fund) Effect short sales of securities;
(b)Short Sales (High Yield Fund) Effect short sales of securities, other than as set forth in its prospectus and Statement of Additional Information; or
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Warrants Invest in warrants if, as a result thereof, more than 10% of the value of the net assets of the fund would be invested in warrants.
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<R>
Corporate Income, GNMA, High Yield, Inflation Protected Bond, Institutional High Yield, U.S. Treasury Intermediate, U.S. Treasury Long-Term, and U.S. Treasury Money Funds
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The 80% name test set forth in the fund`s investment strategy will be based on the fund`s net assets plus any borrowings for investment purposes.
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Institutional High Yield and Personal Strategy Funds
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Notwithstanding anything in the above fundamental and operating restrictions to the contrary, the fund may invest all of its assets in a single investment company or a series thereof in connection with a "master-feeder" arrangement. Such an investment would be made where the fund (a "Feeder"), and one or more other funds with the same investment objective and program as the fund, sought to accomplish its investment objective and program by investing all of its assets in the shares of another investment company (the "Master"). The Master would, in turn, have the same investment objective and program as the fund. The fund would invest in this manner in an effort to achieve the economies of scale associated with having a Master fund make investments in portfolio companies on behalf of a number of Feeder funds.
MANAGEMENT OF the fund
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The officers and directors* of the fund are listed below. Unless otherwise noted, the address of each is 100 East Pratt Street, Baltimore, Maryland 21202. Except as indicated, each has been an employee of T. Rowe Price for more than five years.
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<R>The fund is governed by a Board that meets regularly to review fund investments, performance, expenses, and other business affairs. The Board elects the fund`s officers. The Board also is responsible for performing various duties imposed on it by the 1940 Act and by the laws of Maryland or Massachusetts. The majority 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 one formal meeting during the last fiscal year.
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<R>
The Joint Audit Committee is comprised of David K. Fagin, John G. Schreiber, and Paul M. Wythes, all independent directors. The Audit Committee holds two regular meetings during each fiscal year, at which time it meets with the independent accountants of the T. Rowe Price funds to review: (1) the services provided; (2) the findings of the most recent audits; (3) management`s response to the findings of the most recent audits; (4) the scope of the audits to be performed; (5) the accountants` fees; and (6) any accounting or other questions relating to particular areas of the T. Rowe Price funds` operations or the operations of parties deal ing with the T. Rowe Price funds, as circumstances indicate. The Audit Committee for the fund met twice in 2003. All members of the committee participated in the meetings.
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*The term "director" is used to refer to directors or trustees, as applicable.
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<R>
Independent Directors*
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<R>

Name, Date of Birth, and
Number of Portfolios in Fund
Complex Overseen by Director

Term of Office(a)
and Length of
Time Served

Principal Occupation(s)
During Past 5 Years

< br>Other Directorships
of Public Companies

Anthony W. Deering
1/28/45
105 portfolios
Since later of 1979 or year of incorporation(b)
Director, Chairman of the Board, President, and Chief Executive Officer, The Rouse Company, real estate developers; Director, Mercantile Bank (4/03 to present)
The Rouse Company and Mercantile Bank
Donald W. Dick, Jr.
1/27/43
105 portfolios
Since later of 2001 or year of incorporation(b)
Principal, EuroCapital Advisors, LLC, an acquisition and management advisory firm
None
David K. Fagin
4/9/38
105 portfolios
Since later of 2001 or year of incorporation(b)
Director, Golden Star Resources Ltd., Canyon Resources Corp.
(5/00 to present), and Pacific Rim Mining Corp. (2/02 to present); Chairman and President, Nye Corporation
Golden Star Resources Ltd., Canyon Resources Corp., and Pacific Rim Mining Corp.
F. Pierce Linaweaver
8/22/34
105 portfolios
Since later of 1980 or year of incorporation(b)
President, F. Pierce Linaweaver & Associates, Inc., consulting environmental and civil engineers
None
John G. Schreiber
10/21/46
105 portfolios
Since later of 1992 or year of incorporation(b)
Owner/President, Centaur Capital Partners, Inc., a real estate investment company; Senior Advisor and Partner, Blackstone Real Estate Advisors, L.P.
AMLI Residential Properties Trust, Host Marriott Corporation, and The Rouse Company, real estate developers
Hubert D. Vos
8/2/33
105 portfolios
Since later of 2001 or year of incorporation(b)
Owner/Pre sident, Stonington Capital Corporation, a private investment company
None
Paul M. Wythes
6/23/33
105 portfolios
Since later of 2001 or year of incorporation(b)
Founding Partner of Su tter Hill Ventures, a venture capital limited partnership, providing equity capital to young high-technology companies throughout the United States
Teltone Corporation
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*All information about the directors was current as of December 31, 2002.
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(a)Each director serves until retirement, resignation, or election of a successor.
</R>
(b)See years of incorporation in the following table.
<R>

Incorporation Years

Corporation

Year of Incorporation

Corporate Income Fund
1995
GNMA Fund
1985
High Yield Fund
1984
Inflation Protected Bond Fund
2002
Institutional Income Funds
2000
New Income Fund
1973
Personal Strategy Funds
1994
Prime Reserve Fund
1975
Reserve Investment Funds
1997
Short-Term Bond Fund
1983
U.S. Treasury Funds
1989
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PAGE 129
<R>
Inside Directors*
</R>
Name, Date of Birth, and
Number of Portfolios in FundComplex Overseen by Director
Term of Office(a)
and Length of
Time Served
Principal Occupation(s)
During Past 5 Years
Other Directorships
of Public Companies
<R>
James A.C. Kennedy
8/15/53
37 portfolios
Personal Strategy Funds, 1994
Director and Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
None
</R>
<R>
William T. Reynolds5/26/48
37 portfolios
Since later of 1995 or year of incorporation (except Personal Strategy Funds) (b)
Director and Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Director, T. Rowe Price Global Asset Management LimitedPresident, New Income and U.S. Treasury Funds; Vice President, Personal Strategy Funds
None
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<R>
James S. Riepe< font style="font-size:10.0pt;" face="Berkeley Black" color="Black">
6/25/43
105 portfolios
Prime Reserve Fund, 1994, all other corporations, since later of 1983 or year of incorporation(b)
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
None
</R>

Name, Date of Birth, and
Number of Portfolios in Fund
Complex Overseen by Director
Term of Office(a)
and Length of
Time Served
Principal Occupation(s)
During Past 5 Years
Other Directorships
of Public Companies
.<R>
M. David Testa
4/22/44
105 portfolios
Since later of 1997 or year of incorporation(b)
Chief Investment Officer, Director, and Vice President, T. Rowe Price; Vice Chairman of the Board, Chief Investment Officer, Director, and Vice President, T. Rowe Price Group, Inc.; Director, T. Rowe Price Global Asset Management Limited and T. Rowe Price Global Investment Services Limited; Chairman of the Board and Director, T. Rowe Price International, Inc.; Director and Vice President, T. Rowe Price Trust Company
None
</R>
<R>
*All information about the directors was current as of December 31, 2002.
</R>
<R>
(a)Each director serves until retirement, resignation, or election of a successor.
</R>
(b)See years of incorporation in the table above.
Officers
Name, Date of Birth, and Principal Occupations
Position(s) Held With Fund(s)
<R>President, GNMA Fund; Vice President, Inflation Protected Bond, New Income, and Short-Term Bond Funds
Connice A. Bavely, 3/5/51
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Chartered Financial Analyst
</R>
<R>
Stephen W. Boesel, 12/28/44
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and
T. Rowe Price Trust Company
Executive Vice President, Personal Strategy Funds
</R>
<R>
Stephen V. Booth, 6/21/61
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and
T. Rowe Price Trust Company; Certified Public Accountant
Vice President, Corporate Income, GNMA, High Yield, Inflation Protected Bond, Institutiona l Income, New Income, Personal Strategy, Prime Reserve, Short-Term Bond, Reserve Investment, and U.S. Treasury Funds
</R>
<R>
Brian J. Brennan, 7/14/64
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company; Chartered Financial Analyst
Vice President, Inflation Protected Bond and New Income Funds
</R>

PAGE 131
Name, Date of Birth, and Principal Occupations
Position(s) Held With Fund(s)
Andrew M. Brooks, 2/16/56
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Vice President, High Yield and Institutional Income Funds
<R>
Steven G. Brooks, 8/5/54
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.;
Chartered Financial Analyst
Vice President, Corporate Income, Prime Reserve, Reserve Investment, Short-Term Bond, and U.S. Treasury Funds
</R>
<R>
Brian E. Burns, 10/6/60
Assistant Vice President, T. Rowe Price
Vice President, Prime Reserve, Reserve Investment, and U.S. Treasury Funds
</R>
<R>
Jennifer A . Callaghan, 5/6/69
Assistant Vice President, T. Rowe Price
Assistant Vice President, Corporate Income, Inflation Protected Bond, New Income, and Short-Term Bond Funds
</R>
<R>
Joseph A. Carrier, 12/30/60
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and
T. Rowe Price Investment Services, Inc.
Treasurer, all funds
</R>
<R>
Patrick S. Cassidy, 8/27/64
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Chartered Financial Analyst
Vice President, Corporate Income, New Income, Prime Reserve, Reserve Investment, and Short-Term Bond Funds
</R>
<R>
Jerome A. Clark, 1/2/61
Vice President, T.&# 160;Rowe Price, T. Rowe Price Group, Inc.,
T. Rowe Price Investment Services, and T. Rowe Price Trust
Company; Chartered Financial Analyst
Vice President, U.S. Treasury Funds
</R>
<R>
Roger L. Fiery III, 2/10/59
Vice President, T. Rowe Price, T. Rowe Price Group, Inc.,
T. Rowe Price Trust Company, and T. Rowe Price International, Inc.; Certified Public Accountant
Vice President, Corporate Income, GNMA, High Yield, Inflation Protected Bond, Institutional Income, New Income, Personal Strategy, Prime Reserve, Short-Term Bond, Reserve Investment, and U.S. Treasury Funds
</R>
<R>
Mark S. Finn, 1/14/63
Vice President, T. Rowe Price; Certified Public Accountant; Chartered Financial Analyst
Vice President, Corporate Income and Prime Reserve Funds
</R>

<R>
Alisa Fiumara, 2/7/74
Employee, T. Rowe Price; Chartered Financial Analyst
Vice President, Prime Reserve Fund
</R>

Name, Date of Birth, and Principal Occupations
Position(s) Held With Fund(s)
Robert N. Gensler, 10/18/57
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Vice President, High Yield and Institutional Income Funds
<R>
Gregory S. Golczewski, 1/15/66
Vice President, T. Rowe Price and T. Rowe Price Trust Company
Vice President, Corporate Income, GNMA, High Yield, Inflation Protected Bond, Institutional Income, New Income, Prime Reserve, Short-Term Bond, Reserve Investment, and U.S. Treasury Funds
</R>
<R> ;
Michael J. Grogan, 5/2/71
Employee, T. Rowe Price; Chartered Financial Analyst< /font>
Assistant Vice President, New Income Fund
</R>
<R>
Charles B. Hill, 9/22/61
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Chartered Financial Analyst
Vice President, Short-Term Bond and U.S. Treasury Funds
</R>
<R>
<R>
Henry H. Hopkins, 12/23/42
Director and Vice Pr esident, T. Rowe Price Group, Inc.,
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 International, Inc.,
and T. Rowe Price Retirement Plan Services, Inc.
Vice President, all funds
</R>
</R>
<R>
Keir R. Joyce, 7/22/72
Assistant Vice President, T. Rowe Price
Assistant Vice President, GNMA Fund
</R>
<R>
Paul A. Karpers, 11/14/67
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Chartered Financial Analyst
Vice President, High Yield and Institutional Income Funds
</R>
<R>
John H. Laporte, 7/26/45
Vice President, T. Rowe Price; Director and Vice
President, T. Rowe Price Group, Inc.; Chartered Financial Analyst
Vice President, Personal Strategy Funds
</R>
<R>
Alan D. Levenson, 7/17/58
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Vice President, GNMA, Inflation Protected Bond, New Income, Prime Reserve, Reserve Investment, and U.S. Treasury Funds
</R>

PAGE 133
Name, Date of Birth, and Principal Occupations
Position(s) Held With Fund(s)
<R>
Patricia B. Lippert, 1/12/53
Assistant Vice President, T. Rowe Price and T. Rowe Price
Investment Services, Inc.
Secretary, all funds
</R>
<R>
Kevin P. Loome, 10/19/67
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and
T. Rowe Price International, Inc.; Chartered Financial Analyst
Vice President, High Yield and Institutional Income Funds
</R>
<R>
Joseph K. Lynagh, 6/9/58
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.;
Chartered Financial Analyst
Vice President, Prime Reserve, Reserve Investment, and U.S. Treasury Funds
</R>
<R>
James E. MacMiller, 4/29/66
Assistant Vice President, T. Rowe Price
Vice President, High Yield and Institutional Income Funds
</R>
<R>
James M. McDonald, 9/29/49
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and
T. Rowe Price Trust Company
Executive Vice President, Prime Reserve and Reserve Investment Funds; Vice President, U.S. Treasury Funds
</R>
Michael J. McGonigle, 10/14/66
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Vice President, High Yield and Institutional Income Funds
<R>
Cheryl A. Mickel, 1/11/67
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Chartered Financial Analyst
Vice President, In flation Protected Bond, Short-Term Bond, and U.S. Treasury Funds
</R>
<R>
Mary J. Miller, 7/19/55
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Chartered Financial Analyst
President, Corporate Income Fund; Vice President, Inflation Protected Bond, Prime Reserve, Reserve Investment, and U.S. Treasury Funds
</R>
<R>
M. Christine Munoz, 12/2/62
Vice President, T. Rowe Price; Chartered Financial Analyst
Vice President, Personal Strategy Funds
</R>
<R>
Edmund M. Notzon III, 10/1/45
Vice President, T. Rowe Price, T. Rowe Price Group, Inc.,
T. Rowe Price Investment Services, Inc., and T. Rowe Price
Trust Company; Chartered Financial Analyst
President, Personal Strategy Funds; Vice President, G NMA, Inflation Protected Bond, and New Income Funds
</R>

Name, Date of Birth, and Principal Occupations
Position(s) Held With Fund(s)
Joan R. Potee, 11/23/47
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Vice President, Prime Reserve, Reserve Investment, and U.S. Treasury Funds
<R>
Larry J. Puglia, 8/25/60
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Certified Public Accountant; Chartered Financial Analyst
Executive Vice President, Personal Strategy Funds
</R>
Vernon A. Reid, Jr., 5/14/54
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Vice President, Corporate Income, Inflation Protected Bond, New Income, and U.S. Treasury Funds
<R>
Brian C. Rogers, 6/27/55
Director and Vice President, T. Rowe Price Group, Inc.; Vice
President, T. Rowe Price and T. Rowe Price Trust Company; Chartered Financial Analyst; Chartered Investment Counselor
Vice President, Personal Strategy Funds
</R>
<R>
Robert M. Rubino, 8/2/53
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Certified Public Accountant
Vice President, Corporate Income, New Income, and Short-Term Bond Funds
</R>
<R>
Daniel O. Shackelford, 3/11/58
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company; Chartered Financial Analyst
President, Inflation Protected Bond Fund; Vice President, New Income and U.S. Treasury Funds
</R>
<R>
Charles M. Shriver, 8/11/67
Assistant Vice President, T. Rowe Price; Chartered Financial
Analyst
Assistant Vice President, Personal Strategy Funds
</R>
<R>
Walter P. Stuart III, 3/27/60
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Chartered Financial Analyst
Vice President, High Yield and Institutional Income Funds
</R>
Thomas E. Tewksbury, 8/1/61
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Vice President, High Yield Fund
<R>
Susan G. Troll, 8/27/66
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Certified Public Accountant
Vice President, Prime Reserve Fund
</R>

PAGE 135
Name, Date of Birth, and Principal Occupations
Position(s) Held With Fund(s)
<R>
Mark J. Vaselkiv, 7/22/58
Vice President, T. Rowe Price and T. Rowe Price Group,
Inc.
President, High Yield and Institutional Income Funds; Executive Vice President, Corporate Income Fund; Vice President, Personal Strategy Funds
</R>

Julie L. Waples, 5/12/70
Vice President, T. Rowe Price
Vice President, Personal Strategy Funds
<R>
Lea C . Ward, 6/5/68
Assistant Vice President, T. Rowe Price
Vice President, Prime Reserve Fund
</R>
<R>
John D. Wells, 6/29/60
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Vice President, GNMA Fund
</R>
<R>
Richard T. Whitney, 5/7/58
Vice President, T. Rowe Price, T. Rowe Price Group, Inc.,
T. Rowe Price Trust Company, and T. Rowe Price International, Inc.; Chartered Financial Ana lyst
Vice President, Personal Strategy Funds
</R>
<R>
Edward A. Wiese, 4/12/59
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;
Chartered Financial Anal yst
President, Prime Reserve, Reserve Investment, and Short-Term Bond Funds; Executive Vice President, U.S. Treasury Funds
</R>
Thea N. Williams, 12/20/61
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Vice President, Corporate Income, High Yield, and Institutional Income Funds

Director Compensation Table
The fund does not pay pension or retirement benefits to its officers or directors. Also, any director of the fund who is an officer or employee of T. Rowe Price or T. Rowe Price International does not receive any remuneration from the fund.
<R>Donald W. Dick, Jr.

Name of Person

Aggregate Compensation From
Fund(a)

Total Compensation From Fund and
Fund Complex Paid to Directors(b)

Corporate Income Fund

Anthony W. Deering
$626
$110,000
626
110,000
David K. Fagin
636
112,000
F. Pierce Linaweaver
642
113,000
Hanne M. Merriman
626
110,000
John G. Schreiber
636
112,000
Hubert D. Vos
626
110,000
Paul M. Wythes
636
112,000
GNMA Fund

Anthony W. Deering
$1,333
$110,000
Donald W. Dick, Jr.
1,333
110,000
David K. Fagin
1,358
112,000
F. Pierce Linaweaver
1,369
113,000
Hanne M. Merriman
1,333
110,000
John G. Schreiber
1,358
112,000
Hubert D. Vos
1,333
110,000
Paul M. Wythes
1,358
112,000
High Yield Fund

Anthony W. Deering
$1,818
$110,000
Donald W. Dick, Jr.
1,818
110,000
David K. Fagin
1,852
112,000
F. Pierce Linaweaver
1,870
113,000
Hanne M. Merriman
1,818
110,000
John G. Schreiber
1,852
112,000
Hubert D. Vos
1,818
110,000
Paul M. Wythes
1,852
112,000
Inflation Protected Bond Fund

Anthony W. Deering
$350
$110,000
Donald W. Dick, Jr.
350
110,000
David K. Fagin
360
112,000
F. Pierce Linaweaver
365
113,000
Hanne M. Merriman
350
110,000
John G. Schreiber
360
112,000
Hubert D. Vos
350
110,000
Paul M. Wythes
360
112,000
Institutional High Yield Fund

Anthony W. Deering
$648
$110,000
Donald W. Dick, Jr.
648
110,000
David K. Fagin
659
112,000
F. Pierce Linaweaver
665
113,000
Hanne M. Merriman
648
110,000
John G. Schreiber
659
112,000
Hubert D. Vos
648
110,000
Paul M. Wythes
659
112,000
New Income Fund

Anthony W. Deering
$1,670
$110,000
Donald W. Dick, Jr.
1,670
110,000
David K. Fagin
1,702
112,000
F. Pierce Linaweaver
1,716
113,000
Hanne M. Merriman
1,670
110,000
John G. Schreiber
1,702
112,000
Hubert D. Vos
1,670
110,000
Paul M. Wythes
1,702
112,000
Personal Strategy Balanced Fund

Anthony W. Deering
$937
$110,000
Donald W. Dick, Jr.
937
110,000
David K. Fagin
953
112,000
F. Pierce Linaweaver
962
113,000
Hanne M. Merriman
937
110,000
John G. Schreiber
953
112,000
Hubert D. Vos
937
110,000
Pa ul M. Wythes
953
112,000
Personal Strategy Growth Fund

Anthony W. Deering
$761
$110,000
Donald W. Dick, Jr.< br> 761
110,000
David K. Fagin
776
112,000
F. Pierce Linaweaver
781
113,000
Hanne M. Merriman
761
110,000
John G. Schreiber
776
112,000
Hubert D. Vos
761
110,000
Paul M. Wythes
776
112,000
Personal Strategy Income Fund

Anthony W. Deering
$724
$110,000
Donald W. Dick, Jr.
724
110,000
David K. Fagin
737
112,000
F. Pierce Linaweaver
743
113,000
Hanne M. Merriman
724
110,000
John G. Schreiber
737
112,000
Hubert D. Vos
724
110,000
Paul M. Wythes
737
112,000
Prime Reserve Fund

Anthony W. Deering
$3,732
$110,000
Donald W. Dick, Jr.
3,732
110,000
David K. Fagin
3,802
112,000
F. Pierce Linaweaver
3,836
113,000
Hanne M. Merriman
3,732
110,000
John G. Schreiber
3,802
112,000
Hubert D. Vos
3,732
110,000
Paul M. Wythes
3,802
112,000
Short-Term Bond Fund

Anthony W. Deering
$1,046
$110,000
Donald W. Dick, Jr.
1,046
110,000
David K. Fagin
1,065
112,000
F. Pierce Linaweaver
1,075
113,000
Hanne M. Merriman
1,046
110,000
John G. Schreiber
1,065
112,000
Hubert D. Vos
1,046
110,000
Paul M. Wythes
1,065
112,000
U.S. Treasury Intermediate Fund

Anthony W. Deering
$781
$110,000
Donald W. Dick, Jr.
781
110,000
David K. Fagin
795
112,000
F. Pierce Linaweaver
801
113,000
Hanne M. Merriman
781
110,000
John G. Schreiber
795
112,000
Hubert D. Vos
781
110,000
Paul M. Wythes
795
112,000
U.S. Treasury Long-Term Fund

Anthony W. Deering
$743
$110,000
Donald W. Dick, Jr.
743
110,000
David K. Fagin
756
112,000
F. Pierce Linaweaver
762
113,000
Hanne M. Merriman
743
110,000
John G. Schreiber
756
112< /font>,000
Hubert D. Vos
743
110,000
Paul M. Wythes
756
112,000
U.S. Treasury Money Fund

Anthony W. Deering
$1,165
$110,000
Donald W. Dick, Jr.
1,165
110,000
David K. Fagin
1,187
112,000
F. Pierce Linaweaver
1,198
113,000
Hanne M. Merriman
1,165
110,000
John G. Schreiber
1,187
112,000
Hubert D. Vos
1,165
110,000
Paul M. Wythes
1,187
112,000
</R>

PAGE 137

PAGE 139
<R>
Amounts in this column are based on accrued compensation for fiscal year 2003.
</R>
<R>
Amounts in this column are based on compensation received for fiscal year 2003. The T. Rowe Price complex included 105 funds as of December 31, 2002.
</R>
<R>
Note: GRF and RIF were not allocated director`s fees. These funds will begin to accrue this expense beginning November 2003.
</R>
< /p>
Directors` Holdings in the T. Rowe Price Funds
The following table sets forth the T. Rowe Price fund holdings of the independent and inside directors, as of December 31, 2002.
<R>< td style="">None
None
< td style="">None

Deering

Dick

Fagin

Linaweaver

Schreiber

Vos

Wythes

Aggregate Holdings,
All Funds
over $100,000
over $100,000
over $100,000
over $100,000
over $100,000
over $100,000
over $100,000
Balanced Fund
None
None
None
over $100,000
None
None
None
Blue Chip Growth Fund
None
$10,001-$50,000
$50,001-$100,000
None
None
None
None
Blue Chip Growth Fund—Advisor Class
None
None
None
None
None
None
None
Blue Chip Growth Fund—R Class
None
None
None
None
None
None
None
Blue Chip Growth Portfolio
None
None
None
None
None
None
None
Blue Chip Growth Portfolio—II
None
None
None
None
None
None
None
California Tax-Free Bond Fund
None
None
None
None
None
None
None
California Tax-Free Money Fund
None
None
None
None
None
None
None
Capital Appreciation Fund
None
over $100,000
None
None
None
None
None
Capital Opportunity Fund
None
None
None
None
None
None
< /td> None
Corporate Income Fund
None
None
None
None
None
None
None
Developing Technologies Fund
None
None
None
None
None
None
None
Diversified Small-Cap Growth Fund
None
None
None
None None
None
None
Dividend Growth Fund
None
None
$10,001-$50,000
None
None
None
None
Emerging Europe & Mediterranean Fund
None
None
None
None
None
None
None
Emerging Markets Bond Fund
None
None
None
None
None
None
Emerging Markets Stock Fund
None
None
None
None
None
None
None
Equity Income Fund
None
$50,001-$100,000
$10,001-$50,000
None
None
$10,001-$50,000
None
Equity Income Fund—Advisor Class
None
None
None
None
None
None
None
Equity Income Fund—
R Class
None
None
None
None
None
None
None
Equity Income Portfolio
None
< font style="font-size:10.0pt;" face="Courier">None
None
None
None
None
None
Equity Income Portfolio—II
None
None
None
None< /font>
None
None
None
Equity Index 500 Fund
None
None
None
None
None
None
None
Equity Index 500 Portfolio
None
None
None
None
None
None
None
European Stock Fund
$50,001-$100,000
$10,00 1-$50,000
$10,001-$50,000
None
None
None
None
Extended Equity Market Index Fund
None
None
None
None
None
None
None
Financial Services Fund
None
$10,001-$50,000
None
None
None
None
N one
Florida Intermediate Tax-Free Fund
None
None
None
None
None
None
None
Georgia Tax-Free Bond Fund
None
None
None
None
None
None
None
Global Stock Fund
None
None
None
None
Non e
None
None
Global Technology Fund
None
None
None
None
None
None
None
GNMA Fund
None
None
None
None
over $100,000
None
None
Government Reserve Investment Fund
None
None
None
None
None
None
None
Growth & Income Fund
None
$1-$10,000
None
None
over $100,000
None
$10,001-$50,000
Growth Stock Fund
None
$10,001-$50,000
None
$10,001-$50,000
None
None
None
Growth Stock Fund—Advisor Class
None
None
None
None
None
None
None
Growth Stock Fund—
R Class
None
None
None
None
None
None
None
Health Sciences Fund
None
$10,001-$50,000
None
None
None
$10,001-$50,000
$1-$10,000
Health Sciences Portfolio
None
None
None
None
None
None
None
Health Sciences Portfolio—II
None
None
None
None
None
None
None
High Yield Fund
None
$10,001-$50,000
None
over $100,000
over $100,000
None
None
High Yield Fu nd—Advisor Class
None
None
None
None
None
None
None
Inflation Protected Bond Fund
None
None
None
None
None
None
None
Institutional Emerging Markets Equity Fund
None
None
None
None
None
None
Institutional Foreign Equity Fund
None
None
None
None
None
None
None
Institutional High Yield Fund
None
None
None
None
None
None
None
Institutional Large-Cap Growth Fund
None
None
None
None
None
None
None
Institutional Large-Cap Value Fund
None
None
None
None
None
None
None
Institutional Mid-Cap Equity Growth Fund
None
None
None
None
None
None
None
Institutional Small-Cap Stock Fund
None
None
None
None
None
None
None
International Bond Fund
None
$10,001-$50,000
None
None
None
None
None
International Bond Fund—Advisor Class
None
None
None
None
None
None
None
International Discovery Fund
$10,001-$50,000
$10,001-$50,000
None
over $100,000
None
None
over $100,000
International Equity Index Fund
None
None
None
None
None
None
None
International Growth & Income Fund
None
None
None
None
None
None
None
International Growth & Income Fund—Advisor Class
None
None
None
None
None
None
None
International Growth & Income Fund—R Cl ass
None
None
None
None
None
None
None
International Stock Fund
over $100,000
None
over $100,000
None
None
None
None
International Stock Fund—Advisor Class
None
None
None
None
None
None
None
International Stock Fund—R Class
None
None
None
None
None
None
None
International Stock Portfolio
None
None
None
None
None
None
None
Japan Fund
None
None
None
None
None
None
None
Latin America Fund
None
None
None
None
None
None
None
Limited-Term Bond Portfolio
None
None
None
None
None
None
None
Maryland Short-Term Tax-Free Bond Fund
None
None
None
None
None
None
None
Maryland Tax-Free Bond Fund
None
None
None
None
None
None
None
Maryland Tax-Free Money Fund
None
None
None
None
None
None
None
Media & Telecommunications Fund
$10,001-$50,000
None
None
None
None
None
None
Mid-Cap Growth Fund
None
$10,001-$50,000
over $100,000
None
None
$10,001-$50,000
None
Mid-Cap Growth Fund—Advisor Class
None
None
None
None
None
None
None
Mid-Cap Growth Fund—
R Class
None
None
None
None
None
None
None
Mid-Cap Growth Portfolio
None
None
None
None
None
None
None
Mid-Cap Growth Portfolio—II
None
None
None
None
None
None
None
Mid-Cap Value Fund
None
None
None
None
None
None
None
Mid-Cap Value Fund—Advisor Class
None
None
None
None
None
None
None
Mid-Cap Value Fund—
R Class
None
None
None
None
None
None
None
New America Growth Fund
None
None
None
over $100,000
None
None
$10,001-$50,000
New America Growth Portfolio
None
None
None
None
None
None
None
New Asia Fund
None
None
$10,001-$50,000
None
None
None
None
New Era Fund
None
None
None
None
None
$10,001-$50,000
None
New Horizons Fund
over $100,000
$10,001-$50,000
$1-$10,000
over $100,000
None
$10,001-$50,000
$50,001-$100,000
New Income Fund
None
$50,001-$100,000
None
None
over $100,000
None
None
New Income Fund—Advisor Class
None
None
None
None
None
None
None
New Income Fund—
R Class
None
None
None
None
None
None
None
New Jersey Tax-Free Bond Fund
None
None
None
None
None
None
None
New York Tax-Free Bond Fund
None
None
None
None
None
None
None
New York Tax-Free Money Fund
None
None
None
None
None
None
None
Personal Strategy Balanced Fund
None
None
None
None
None
None
None
Personal Strategy Balanced Portfolio
None
None
None
None
None
None
None
Personal Strategy Growth Fund
None
None
None
None
None
None
None
Personal Strategy Income Fund
None
None
None
None
None
None
None
Prime Reserve Fund
None
over $100,000
None
$10,001-$50,000
$10,001-$50,000
None
None
Prime Reserve Portfolio
None
None
None
None
None
None
None
Real Estate Fund
None
None
None
None
None
None
None
Reserve Investment Fund
None
None
None
None
None
None
None
Retirement 2010 Fund
None
None
None
None
None
None
None
Retirement 2020 Fund
None
None
None
None
None
None
None
Retirement 2030 Fund
None
None
None
None
None
None
None
Retirement 2040 Fund
None
None
None
None
None
None
None
Retirement Income Fund
None
None
None
None
None
None
None
Science & Technology Fund
None
None
None
None
None
$10,001-$50,000
$10,001-$50,000
Science & Technology Fund—Advisor Class
None
None
None
None
None
None
None
Short-Term Bond Fund
None
None
$50,001-$100,000
None
over $100,000
None
None
Small-Cap Stock Fund
None
$10,001-$50,000
over $100,000
None
None
$10,001-$50,000
None
Small-Cap Stock Fund—Advisor Class
None
None
None
None
None
None
None
Small-Cap Va lue Fund
None
$10,001-$50,000
None
None
None
$10,001-$50,000
$10,001-$50,000
Small-Cap Value Fund—Advisor Class
None
None
None
None
None
None
None
Spectrum Growth Fund
None
None
None
None
None
None
None
Spectrum Income Fund
None
None
None
None
None
None
None
Spectrum International Fund
None
None
None
None
None
None
None
Summit Cash Reserves Fund
None
over $100,000
over $100,000
None
over $100,000
None
None
Summit GNMA Fund
None
None
None
None
None
None
None
Summit Municipal Income Fund
None
None
None
None
over $100,000
None
None
Summit Municipal Intermediate Fund
None
None
None
None
over $100,000
None
None
Summit Municipal Money Market Fund
None
None
None
None
over $100,000
None
None
Tax-Efficient Balanced Fund
None
None
$50,001-$100,000
None
None
None
None
Tax-Efficient Growth Fund
None
None
$10,001-$50,000
None
None
None
None
Tax-Efficient Multi-Cap Growth Fund
None
None
None
None
None
None
None
< /td>
Tax-Exempt Money Fund
None
None
None
None
over $100,000
None
None
Tax-Free High Yield Fund
None
None
None
None
over $100,000
None
None
Tax-Free Income Fund
None
None
None
None
over $100,000
None
None
Tax-Free Income Fund—Advisor Class
None
None
None
None
None
None
None
Tax-Free Intermediate Bond Fund
None
None
None
None
None
None
None
Tax-Free Short-Intermediate Fund
None
None
None
None
over $100,000
None
None
Total Equity Market Index Fund
None
None
None
None
None
None
U.S. Bond Index Fund
None
None
None
None
None
None
None
U.S. Treasury Intermediate Fund
None
over $100,000
None
None
over $100,000
None
None
U.S. Treasury Long-Term Fund
None
None
None
None
over $100,000
None
None
U.S. Treasury Money Fund
None
None
None
None
over $100,000
None
None
Value Fund
None
$10,001-$50,000
$50,001-$100,000
None
over $100,000
None
over $100,000
Value Fund—Advisor Class
None
None
None
None
None
None
None
Virginia Tax-Free Bond Fund
None
None
None
None
None
None
None
</R>

PAGE 141

PAGE 143

<R>< /tr>

Reynolds

Riepe

Testa

Aggregate Holdings,
All Funds
over $100,000
over $100,000
over $100,000
Balanced Fund
None
over $100,000
None
Blue Chip Growth Fund
None
None
None
Blue Chip Growth Fund&# 151;Advisor Class
None
None
None
Blue Chip Growth Fund—R Class
None
None
None
Blue Chip Growth Portfolio
None
None
None
Blue Chip Growth Portfolio—II
None
None
None
California Tax-Free Bond Fund
None
None
None
California Tax-Free Money Fund
None
None
None
Capital Appreciation Fund
None
over $100,000
None
Capital Opportunity Fund
None
None
None
Corporate Income Fund
None
None
None
Developing Technologies Fund
None
None
None
Diversified Small-Cap Growth Fund
None
None
None
Dividend Growth Fund
None
None
None
Emerging Europe & Mediterranean Fund
None
None
None
Emerging Markets Bond Fund
None
None
None
Emerging Markets Stock Fund
None
$10,001-$50,000
over $100,000
Equity Income Fund
$50,001-$100,000
over $100,000
None
Equity Income Fund—Advisor Class
None
None
None
Equity Income Fund—R Class
None
None
None
Equity Income Portfolio
None
None
None
Equity Income Portfolio—II
None
None
None
Equity Index 500 Fund
None
None
None
Equity Index 500 Portfolio
None
None
None
European Stock Fund
None
None
None
Extended Equity Market Index Fund
None
None
None
Financial Services Fund
None
None
None
Florida Intermediate Tax-Free Fund
None
None
None
Georgia Tax-Free Bond Fund
None
None
None
Global Stock Fund
None
None
None
Global Technology Fund
None
None
None
GNMA Fund
over $100,000
None
None
Government Reserve Investment Fund
None
None
None
Growth & Income Fund
None
over $100,000
None
Growth Stock Fund
None
None
None
Growth Stock Fund—Advisor Class
None
None
None
Growth Stock Fund—R Class
None
None
None
He alth Sciences Fund
over $100,000
None
over $100,000
Health Sciences Portfolio
None
None
None
Health Sciences Portfolio—II
None
None
None
High Yield Fund
None
over $100,000
over $100,000
High Yield Fund—Advisor Class
None
None
None
Inflation Protected Bond Fund
None
None
None
Institutional Emerging Markets Equity Fund
None
None
None
Institutional Foreign Equity Fund
None
None
None
Institutional High Yield Fund
None
None
over $100,000
Institutional Large-Cap Growth Fund
None
None
None
Institut ional Large-Cap Value Fund
None
None
None
Institutional Mid-Cap Equity Growth Fund
None
None
None
Institutional Small-Cap Stock Fund
None
None
None
International Bond Fund
$1-$10,000
None
None
International Bond Fund—Advisor Class
None
None
None
In ternational Discovery Fund
None
$1-$10,000
$10,001-$50,000
International Equity Index Fund
None
None
None
International Growth & Income Fund
None
None
None
International Growth & Income Fund—Advisor Class
None
None
None
International Growth & Income Fund—
R Class
None
None
None
International Stock Fund
None
over $100,000
over $100,000
International Stock Fund—Advisor Class
None
None
None
International Stock Fund—R Class
None
None
None
International Stock Portfolio
None
None
None
Japan Fund
None
over $100,000
None
Latin America Fund
None
None
None
Limited-Term Bond Portfolio
None
None
None
Maryland Short-Term Tax-Free Bond Fund
$50,001-$100,000
None
None
Maryland Tax-Free Bond Fund
over $100,000
None
None
Maryland Tax-Free Money Fund
None
None
None
Media & Telecommunications Fund
None
None
None
Mid-Cap Growth Fund
None
None
over $100,000
Mid- Cap Growth Fund—Advisor Class
None
None
None
Mid-Cap Growth Fund—R Class
None
None
None
Mid-Cap Growth Portfolio
None
None
None
Mid-Cap Growth Portfolio—II
None
None
None
Mid-Cap Value Fund
None
None
over $100,000
Mid-Cap Value Fund—Advisor Class
None
None
None
Mid-Cap Value Fund—R Class
None
None
None
New America Growth Fund
None
None
None
New America Growth Portfolio
None
None
None
New Asia Fund
None
$1-$10,000
None
New Era Fund
None
None
None
New Horizons Fund
$50,001-$100,000
None
over $100,000
New Income Fund
None
None
None
New Income Fund—Advisor Class
None
None
None
New Income Fund—R Class
None
None
None
New Jersey Tax-Free Bond Fund
None
None
None
New York Tax-Free Bond Fund
None
None
None
New York Tax-Free Money Fund
None
None
None
Personal Strategy Balanced Fund
None
None
None
Personal Strategy Balanced Portfolio
None
None
None
Personal Strategy Growth Fund
None
None
None
Personal Strategy Income Fund
None
None
None
Prime Re serve Fund
$1-$10,000
$50,001-$100,000
$1-$10,000
Prime Reserve Portfolio
None
None
None
Real Estate Fund
None
None
$10,001- $50,000
Reserve Investment Fund
None
None
None
Retirement 2010 Fund
None
None
None
Retirement 2020 Fund
None
None
None
Retirement 2030 Fund
None
None
None
Retirement 2040 Fund
None
None
None
Retirement Income Fund
None
None
None
Science & Technology Fund
$50,001-$100,000
over $100,000
None
Science & Technology Fund—Advisor Class
None
None
None
Short-Term Bond Fund
over $100,000
over $100,000
None
Small-Cap Stock Fund
None
None
None
Small-Cap Stock Fund—Advisor Class
None
None
None
Small-Cap Value Fund
$10,001-$50,000
over $100,000
over $100,000
Small-Cap Value Fund—Advisor Class
None
None
None
Spectrum Growth Fund
None
None
None
Spectrum Income Fund
None
None
None
Spectrum International Fund
None
None
None
Summit Cash Reserves Fund
None
over $100,000
over $100,000
Summit GNMA Fund
None
None
None
Summit Municipal Income Fund
None
None
None
Summit Municipal Intermediate Fund
None
None
over $100,000
Summit Municipal Money Market Fund
over $100,000
over $100,000
None
Tax-Efficient Balanced Fund
None
None
None
Tax-Efficient Growth Fund
None
None
None
Tax-Efficient Multi-Cap Growth Fund
None
None
None
Tax-Exempt Money Fund
$50,001-$100,000
None
None
Tax-Free High Yield Fund
None
None
None
Tax-Free Income Fund
None
None
$10,001-$50,000
Tax-Free Income Fund—Advisor Class
None
None
None
Tax-Free Intermediate Bond Fund
None
None
None
Tax-Free Short-Intermediate Fund
$1-$10,000
over $100,000
None
Total Equity Market Index Fund
None
over $100,000
None
U.S. Bond Index Fund
None
None
None
U.S. Treasury Intermediate Fund
over $100,00 0
None
None
U.S. Treasury Long-Term Fund
None
None
None
U.S. Treasury Money Fund
None
None
None
Value Fund
$10,001-$50,000
over $100,000
over $100,000
Value Fund—Advisor Class
None
None
None
Virginia Tax-Free Bond Fund
None
None
None
</R>

PAGE 145

PAGE 147
PRINCIPAL HOLDERS OF SECURITIES
<R>
As of August 29, 2003, the officers and directors of the fund, as a group, owned less than 1% of the outstanding shares of the fund.
</R>
<R>
As of August 29, 2003, the following shareholders of record owned more than 5% of the outstanding shares of the fund:
</R>
Corporate Income Fund (11.05%): T. Rowe Price RPS Inc., OMNIPLAN Account, Corporate Income Fund, Fund #02/112, P.O. Box 17215, Baltimore, Maryland 21297-1215; Northern Trust Co. Custodian (5.44%), FBO Joseph P. Kennedy Jr. Foundation, P.O. Box 92956, Chicago, Illinois 60675-2956.
<R>
GNMA Fund: Yachtcrew & Co.a, T. Rowe Price Associates, Inc., Attn.: Fund Accounting Department, 100 East Pratt Street, Baltimore, Maryland 21202-1009; T. Rowe Price Trust Company, Inc. (7.00%), Attn.: RPS Control Department, 10090 Red Run Boulevard, Owings Mills, Maryland 21117-4842.
</R>
<R>
aYachtcrew & Co owns 29.16% of the outstanding shares of the fund through the Spectrum Fund. Shares of the fund held by the Spectrum Fund are echo-voted by Spectrum Fund in the same proportion as the shares of the fund are voted by its non-Spectrum Fund shareholders.
</R>
<R>
Government Reserve Investment Fund: Bridgesail & Co. (22.02%), C/O T. Rowe Price Associates, Attn.: Science & Technology Fund, 100 East Pratt Street, Baltimore, Maryland 21202-1009; Barnaclesail (48.72%), C/O T. Rowe Price Associates, Attn.: Mid-Cap Growth Fund, 100 East Pratt Street, Baltimore, Maryland 21202-1009; Mainbody & Co. (18.11%), C/O T. Rowe Price Associates, Attn.: GNMA Fund, 100 East Pratt Street, Baltimore, Maryland 21202-1009.
</R>
<R>
High Yield Fund: Yachtcrew & Co.b, T. Rowe Price Associates, Inc., Attn.: Fund Accounting Department, 100 East Pratt Street, Baltimore, Maryland 21202-1009; Charles Schwab & Co. Inc., (5.28%), Reinvest Account, Attn.: Mutual Fund Department, 101 Montgomery Street, San Francisco, California 94104-4122.
&l t;/R>
<R>
bYachtcrew & Co owns 27.15% of the outstanding shares of the fund through the Spectrum Fund. Shares of the fund held by the Spectrum Fund are echo-voted by Spectrum Fund in the same proportion as the shares of the fund are voted by its non-Spect rum Fund shareholders.
</R>

<R>
Inflation Protected Bond Fund: (8.14%) TRP Finance, Inc., 802 West Street, Suite 301, Wilmington, Delaware 19801-1526.
</R>
<R>
Institutional High Yield Fund: Ladybug & Co. (7.87%), C/O T. Rowe Price Associates, Attn.: Personal Strategy Balanced Fund, 100 East Pratt Street, Baltimore, Maryland 21202-1009; Bread & Co. (21.00%), C/O T. Rowe Price Associates, Attn.: Balanced Fund, 100 East Pratt Street, Baltimore, Maryland 21202-1009; State Street Bank & Trust Co. Trust (9.86%), For Defined Benefit Plans of Zeneca Holdings Inc. U/D/T 6/1/93 Attn.: Robert Skinner, One Enterprise Drive, W5C, North Quincy, Massachusetts 02171-2126; The Bank of New York Custodian FBO University of Arkansas FDN & University of Arkansas System (5.11%) Attn.: Warren Suco, One Wall Street, 12th Floor South, New York, New York 10286-0001; Wilmington Trust Co. Agent U/A  with Future Value Inc. A/C 50366-9 (7.46%), C/O Mutual Funds, P.O. Box 8971, Wilmington, Delaware 19899-8971; Northern Trust Co. Trust (8.50%), FBO AVAYA 22-09732, P.O. Box 92956, Chicago, Illinois 60675-2956.
</R>
<R>
New Income Fund: Yachtcrew & Co.c, T. Rowe Price Associates, Inc., Attn.: Fund Accounting Department, 100 East Pratt Street, Baltimore, Maryland 21202-1009; T. Rowe Price Trust Company, Inc. (16.69%), Attn.: TRPS Inst. Control Department, P.O. Box 17215, Baltimore, Maryland 21297-1215.
</R>
<R>
cYachtcrew & Co owns 36.07% of the outstanding shares of the fund through the Spectrum Fund. Shares of the fund held by the Spectrum Fund are echo-voted by Spectrum Fund in the same proportion as the shares of the fund are voted by its non-Spectrum Fund shareholders.
</R>
<R>
Personal Strategy Balanced Fund: T. Rowe Price Trust Company Tr. Balancedd, Attn.: Asset Reconciliation, P.O. Box 17215, Baltimore, Maryland 21297-1215; Hartford Life Insurance Co. (5.71%), Separate Account TK, Attn.: David Ten Broeck, P.O. Box 2999, Hartford, Connecticut 06104-2999.
</R>
<R>
dT. 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 owns 71.00% of the outstanding shares of the fund. 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 voted by various retirement plans and retirement participants.
</R>
<R>
Personal Strategy Growth Fund: T. Rowe Price Trust Company Tr.e, Attn.: Growth Asset, P.O. Box 17215, Baltimore, Maryland 21297-1215; Hartford Life Insurance Co. (5.85%), Separate Account TK, Attn.: David Ten Broeck, P.O. Box 2999, Hartford, Connecticut 06104-2999.
</R>
<R>
eT. 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 owns 62.47% of the outstanding shares of the fund. 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 voted by various retirement plans and retirement participants.
</R>
<R>
Personal Strategy Income Fund: T. Rowe Price Trust Company Tr. Incomef, Attn.: Asset Reconciliation, P.O. Box 17215, Baltimore, Maryland 21297-1215.
</R>
<R>
fT. 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 owns 67.70% of the outstanding shares of the fund. 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 voted by various retirement plans and retirement participants.
</R>
<R>
Prime Reserve Fund (18.62%): T. Rowe Price Trust Company, Inc., Attn.: TRPS Inst. Control Department, P.O. Box 17215, Baltimore, Maryland 21297-1215.
</R>
<R>
Reserve Investment Fund: Tuna & Co. (10.27%), C/O T. Rowe Price Associates, Attn.: New Income Fund, 100 East Pratt Street, Baltimore, Maryland 21202-1009; Overlap & Co., (9.93%), C/O T. Rowe Price Associates, Attn.: Small-Cap Stock Fund, 100 East Pratt Street, Baltimore, Maryland 21202-1009; Taskforce & Co. (9.68%), C/O T. Rowe Price Associates, Attn.: Equity Income Fund, 100 East Pratt Street, Baltimore, Maryland 21202- 1009; Seamile & Co. (9.67%), T. Rowe Price Associates, Attn.: Capital Appreciation Fund, 100 East Pratt Street, Baltimore, Maryland 21202-1009; T. Rowe Price Managed GIC (9.12%), T. Rowe Price Associates, Attn.: Stable Value Fund, 100 East Pratt Street, Baltimore, Maryland 21202-1009.
</R>

PAGE 149
<R>
Short-Term Bond Fund (6.84%): T. Rowe Price Trust Company, Inc., Attn.: TRPS Inst. Control Department, P.O. Box 17215, Baltimore, Maryland 21297-1215.
</R>
<R>
U.S. Treasury Intermediate Fund (25.61%): T. Rowe Price Trust Company, Inc., Attn.: TRPS Inst. Control Department, P.O. Box 17215, Baltimore, Maryland 21297-1215.
</R>
<R>
U.S. Treasury Long-Term Fund: Yachtcrew & Co.g, T. Rowe Price Associates, Inc., Attn.: Fund Accounting Department, 100 East Pratt Street, Baltimore, Maryland 21202-1009; T. Rowe Price Trust Company, Inc. (12< font style="font-size:12.0pt;" face="Courier New" color="Black">.42%), Attn.: TRPS Inst. Control Department, P.O. Box 17215, Baltimore, Maryland 21297-1215.
</R>
<R>
gYachtcrew & Co owns 38.08% of the outstanding shares of the fund through the Spectrum Fund. Shares of the fund held by the Spectrum Fund are echo-voted by Spectrum Fund in the same proportion as the shares of the fund are voted by its non-Spectrum Fund shareholders.
</R>
<R>
U.S. Treasury Money Fund: T. Rowe Price Trust Company, Inc. (16.59%), Attn.: TRPS Inst. Control Department, P.O. Box 17215, Baltimore, Maryland 21297-1215; T. Rowe Price Retirement Plan Services, Inc. (6.61%), Attn.: RPS Cash Group, 4515 Painters Mill Road, Owings Mills, Maryland 21117-4903.
</R>
INVESTMENT MANAGEMENT SERVICES
Services
<R>
Under the Investment Management Agreement, T. Rowe Price provides the fund with discretionary investment .services. Specifically, T. Rowe Price is responsible for supervising and directing the investments of the fund in .accordance with the fund`s investment objectives, program, and restrictions as provided in its prospectus and .this Statement of Additional Information. T. Rowe Price is also responsible for effecting all security transactions .on behalf of the fund, including the negotiation of commissions and the allocation of principal business and .portfolio brokerage.In addition to these services, T. Rowe Price provides the fund with certain corporate administrative services, including: maintaining the fund`s corporate existence and corporate records; registering and qualifying fund shares under federal laws; monitoring the financial, accounting, and administrative functions of the fund; maintaining liaison with the agents employed by the fund such as the fund`s custodian and transfer agent; assisting the fund in the coordination of such agent`s activities; and permitting T. Rowe Price`s employees to s erve as officers, directors, and committee members of the fund without cost to the fund.
</R>
The Investment Management Agreement also provides that T. Rowe Price, its directors, officers, employees, and certain other persons performing specific functions for the fund will be liable to the fund only for losses resulting from willful misfeasance, bad faith, gross negligence, or reckless disregard of duty.
Approval of Investment Management Agreements
<R>
The Investment Management Agreements of the funds are reviewed each year by the Boards to determine whether the agreements should be renewed for a one-year period or not. Renewal of the agreements requires the majority vote of the Board, including a majority of the independent directors. Each fund Board consists of a majority of independent directors.
</R>
<R>
In approving the continuation of the Investment Management Agreements for each fund for the current year, the Board reviewed reports prepared by T. Rowe Price, materials provided by fun< /font>d counsel and counsel to the independent directors, as well as other information. The Board considered the nature and quality of the investment management services provided to the fund by T. Rowe Price under the Investment Management Agreements and the personnel who provide these services, including the historical performance of the fund compared to its benchmark index and its peer group of similar investment companies. In addition, the Board considered other services provided to the fund by T. Rowe Price and its affiliates, such as administrative services, shareholder services, fund accounting, assistance in meeting legal and regulatory requirements, and other services necessary for the fund`s operation.
</R>
The Board considered the fees paid to T. Rowe Price for investment management services, as well as compensation paid to T. Rowe Price or its affiliates for other non-advisory services provide d to the fund. In connection with its review of the fees paid to T. Rowe Price and its affiliates, the Board reviewed information provided by Lipper Inc. comparing the fund`s advisory fee rate and overall expense ratio with those of comparable funds. Where applicable, the Board considered that the fund`s advisory fee structure reflects

breakpoints, which permit fee reductions resulting from economies of scale. Additionally and where applicable, the Board considered the contractual fee waivers and expense reimbursements agreed to by T. Rowe Price.
The Board also considered the costs incurred and the benefits received by T. Rowe Price and its affiliates, including the profitability of T. Rowe Price from providing advisory services to the fund. In reviewing data concerning the profitability of T. Rowe Price, the Board examined, among other components, the cost allocation methodology utilized in the presentation. In addition, the Board considered other potential benefits to T. Rowe Price, such as the research services T. Rowe Price receives from brokers in return for allocating fund brokerage in a "soft dollar" arrangement.
Based on the information revi ewed and the discussions, the Board concluded that it was satisfied with the nature and quality of the services provided by T. Rowe Price to the fund and that the management fee rate was reasonable in relation to such services. The independent directors of the fund were assisted by independent legal counsel in their deliberations.
<R>
All funds except Government Reserve Investment, Institutional High Yield, and Reserve Investment Funds
</R>
Management Fee
<R>
The fund pays T. Rowe Price a fee ("Fee") which consists of two components: a Group Management Fee ("Group Fee") and an Individual Fund Fee ("Fund Fee"). The Fee is paid monthly to T. Rowe Price on the first business day of the next succeeding calendar month and is calculated as described next.
</R>
< font style="font-size:12.0pt;" face="Courier New" color="Black">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 Funds` 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 $3 0 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

For the purpose of calculating the Group Fee, the Price Funds include all the mutual funds distributed by Investment Services (excluding the T. Rowe Price Spectrum Funds, Retirement Funds, and any institutional, 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 the fund`s prospectus as of the close of business on the previous business day on which the fund was open for business.
<R>
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:
</R>
Corporate Income Fund
0.15%
GNMA Fund
0.15
High Yield Fund
0.30
Inflation Protected Bond Fund
0.05
New Income Fund
0.15
Personal Strategy Balanced Fund
0.25
Personal Strategy Growth Fund
0.30
Personal Strategy Income Fund
0.15
Prime Reserve Fund
0.05
Short-Term Bond Fund
0.10
U.S. Treasury Intermediate Fund
0.05
U.S. Treasury Long-Term Fund
0.05
U.S. Treasury Money Fund
0.00

PAGE 151
The following table sets forth the total management fees, if any, paid to T. Rowe Price by each fund, during the last three years:<R>

Fund

2003

2002

2001

Corporate Income
$297,000
$232,000
$124,000
GNMA
6,528,000
5,287,000
5,005,000
High Yield*
14,527,000
10,173,000
9,413,000
Inflation Protected Bond
0
(a)
(a)
Institutional High Yield
796,000
(a)
(a)
New Income**
9,469,000
8,361,000
7,887,000
Personal Strategy Balanced
3,071,000
3,775,000
3,604,000
Personal Strategy Growth
1,561,000
1,908,000
1,696,000
Personal Strategy Income
747,000
1,092, 000
914,000
Prime Reserve
21,177,000
21,485,000
21,004,000
Short-Term Bond
3,014,000
1,881,000
1,219,000
U.S. Treasury Intermediate
1,404,000
1,001,000
869,000
U.S. Treasury Long-Term
1,094,000
1,147,000
1,128,000
U.S. Treasury Money
3,442,000
3,163,000
2,945,000
</R>
<R>
*The fund has two classes of shares. The management fee is allocated to each class based on relative net assets.
</R>
<R>
**The fund has three classes of shares. The management fee is allocated to each class based on relative net assets.
</R>
<R>
(a)Prior to commencement of operations.
</R>
Limitation on Fund Expenses
<R>
The Investment Management Agreement between the fund and T. Rowe Price provides that the fund will bear all expenses of its operations not specifically assumed by T. Rowe Price.
</R>
Expense Limitations and Reimbursements
<R>
The following chart sets forth expense ratio limitations and the periods for which they are effective. For each, T. Rowe Price has agreed to bear any fund expenses (other than interest, taxes, brokerage, 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 expense limitations for the Advisor and R Classes relate to operating expenses other than management fees and certain other portfolio level expenses such as fees for custody, outside directors, and auditors.) The expenses borne by T. Rowe Price are subject to reimbursement by the fund through the indicated reimbursement date, provided no reimbursement w ill be made if it would result in the fund`s expense ratio exceeding its applicable limitation.
</R>
<R>

Fund

Limitation Period

Expense Ratio
Limitation

Reimbursement
Date

Corporate Income(a)
June 1, 2003—September 30, 2005
0.80%
September 30, 2007
Inflation Protected Bond
October 31, 2002—September 30, 2004
0.50%
September 30, 2006
New Income Fund—Advisor Class
September 30, 2002—September 30, 2004
0.90%
September 30, 2006
New Income Fund —R Class
September 30, 2002—September 30, 2004
1.15%
September 30, 2006
Personal Strategy Balanced
November 1, 2002—September 30, 2004
0.90%
September 30, 2006
Personal Strategy Growth (b)
June 1, 2002—September 30, 2004
1.00%
September 30, 2006
Personal Strategy Income (c)
June 1, 2002—September 30, 2004
0.80%
September 30, 2006
Short-Term Bond(d)
June 1, 2002—September 30, 2004
0.55%
September 30, 2006
</R>

<R>
(a)The Corporate Income Fund previously operated under a 0.80% limitation that expired May 31, 2003. The reimbursement period for this limitation extends through May 31, 2005.
</R>
<R>
(b)The Personal Strategy Growth Fund previously operated under a 1.10% limitation that expired May 31, 2002. The reimbursement period for this limitation extends through May 31, 2004.
</R>
<R>
(c)The Personal Strategy Income Fund previously operated under a 0.90% limitation that expired May 31, 2002. The reimbursement period for this limitation extends through May 31, 2004.
</R>
<R>
(d)The Short-Term Bond Fund previously operated under a 0.55% limitation that expired May 31, 2002. The reimbursement period for this limitation extends through May 31, 2004.
</R>
< /p><R>
Each 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 periods) may be implemented after the expiration of the current expense limitation, and that with respect to any such additional limitation period, the fund may reimburse T. Rowe Price, provided the reimbursement does not result in the fund`s aggregate expenses exceeding the additional expense limitation.
</R>
Corporate Income Fund
<R>
Pursuant to the current expense limitation, $109,000 of management fees were not accru ed by the fund for the year ended May 31, 2003. Unaccrued fees in the amount of $213,000 remain subject to reimbursement by the fund through May 31, 2005.
</R>
< R>
Inflation Protected Bond Fund
</R>
<R>
Pursuant to the current expense limitation, $28,000 of management fees were not accrued by the fund for the year ended May 31, 2003, and $87,000 of other fund expenses were borne by the manager. At May 31, 2003, unaccrued management fees and other expenses in the amount of $115,000 remain subject to reimbursement by the fund through September 30, 2006.
& lt;/R>
<R>
Personal Strategy Balanced Fund
</R>
<R>
Pursuant to the current expense limitation, $569,000 of management fees were not accrued by the fund for the year ended May 31, 2003. At May 31, 2003, unaccrued management fees in the amount of $569,000 remain subject to reimbursement by the fund through September 30, 2006.
</R>
Personal Strategy Growth Fund
<R>
Pursuant to the current expense limitation, $502,000 of management fees were not accrued by the fund for the year ended May 31, 2003. At May 31, 2003, unaccrued management fees in the amount of $118,000 remain subject to reimbursement by the fund through 2004, and $502,000 through 2006.
</R>

PAGE 153
Personal Strategy Income Fund
<R>
Pursuant to the current expense limitation, $488,000 of management fees were not accrued by the fund for the year ended May 31, 2003. At May 31, 2003, unaccrued management fees in the amount of $488,000 remain subject to reimbursement by the fund through September 30, 2006, and $225,000 through May 31, 2004.
</R>
Short-Term Bond Fund
<R>
Pursuant to the current expense limitation, $688,000 of management fees were not accrued by the fund for the year ended May 31, 2003. At May 31, 2003, unaccrued management fees in the amount of $961,000 remain subject to reimbursement by the fund through May 31, 2004, and $688,000 through September 30, 2006.
</R>
<R>
T. Rowe Price Spectrum Fund, Inc. and T. Rowe Price Retirement Funds, Inc.
</R>
<R>
The GNMA, High Yield, New Income, Short-Term Bond, and U.S. Treasury Long-Term Funds are parties to Special Servicing Agreements between and among T. Rowe Price Spectrum Fund, Inc. ("Spectrum Fund"), T. Rowe Price, T. Rowe Price International, and various other T. Rowe Price funds in which the Spectrum Funds invest (collectively "Underlying Price Funds"). The High Yield, New Income, and Short-Term Bond Funds are a party to a Special Services Agreement between and among T. Rowe Price Retirement Funds, Inc. ("Retirement Funds"), T. Rowe Price, and various other T. Rowe Price funds in which the Retirement Funds invest (collectively "Underlying Price Funds").
</R>
<R>
The Special Servicing Agreements provide that if the Board of Directors of any Underlying Price Fund determines that such underlying fund`s share of the aggregate expenses of the Spectrum or Retirement Funds, respectively, is less than the estimated savings to the Underlying Price Fund from the operation of the Spectrum or Retirement Funds, respectively, the Underlying Price Fund will bear those expenses in proportion to the average daily value of its shares owned by the Spectrum or Retirement Funds, respectively, provided further that no Underlying Price Fund will bear such expenses in excess of the estimated savings to it. Such savings are expected to result primarily from the elimination of numerous separate shareholder accounts which are or would have been invested directly in the Underlying Price Funds and the resulting reduction in shareholder servicing costs. Although such cost savings are not certain, the estimated savings to the Underlying Price Funds generated by the operation of the Spectrum or Retirement Funds, respectively, are expected to be sufficient to offset most, if not all, of the expenses incurred by the Spectrum or Retirement Funds, respectively.
</R>
Management Fee
Government Reserve Investment and Reserve Investment Funds
Neither fund pays T. Rowe Price an investment management fee.
Institutional High Yield Fund
<R>
The Investment Management Agreement between the fund and T. Rowe Price provides that the fund pays T. Rowe Price an annual fee of 0.50%. The agreement also provides that T. Rowe Price will pay all expenses of the fund`s operations, except interest, taxes, brokerage commissions, and other charges incident to the purchase, sale, or lending of the fund`s portfolio securities, directors` fees, and expenses (including counsel fees and expenses) and such nonrecurring or extraordinary expenses that may arise, including the costs of actions, suits, or proceedings to which the fund is a party and the expenses the fund may incur as a result of its obligation to provide indemnification to its officers, directors, and agents. However, the Board for the fund reserves the right to impose additional fees against shareholder accounts to defray expenses which would otherwise be paid by T. Rowe Price under the management agreement. The Board does not anticipate levying such charges; such a fee, if charged, may be retained by the fund or paid to T. Rowe Price.
</R>
Management Related Services
<R>
As noted above, the Investment Management Agreement spells out the expenses to be paid by the fund. In addition to the Management Fee, the fund pays 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 fees and expenses.
</R>
<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, provides recordkeeping, sub-transfer agency, and
</R>

<R>
administrative services for certain types of retirement plans investing in the fund. The fees paid by the fund to Services and RPS are based on the costs to Services and RPS of providing these services plus a return on capital employed in support of the services. The address for each is 100 East Pratt Street, Baltimore, Maryland 21202.
</R>
<R>
T. Rowe Price, under a separate agreement with the fund, provides accounting services to the fund. The fund paid the expenses shown in the following table during the last three fiscal years to T. Rowe Price for accounting services.
</R>
<R>

Fund

2003

2002

2001

Corporate Income
$92,000
$84,000
$84,000
GNMA
104,000
104,000
104,000
Government Reserve Investment
64,000
64,000
64,000
High Yield
116,000
136,000
142,000
High Yield Fund—Advisor Class
21,000
3,000
(a)
Inflation Protected Bond
61,000
(b)
(b)
Institutional High Yield
104,000
(b)
(b)
New Income
130,000
109,000
106,000
Personal Strategy Balanced
93,000
85,000
85,000
Personal Strategy Growth
93,000
84,000
84,000
Personal Strategy Income
93,000
85,000
84,000
Prime Reserve
93,000
98,000
98,000
Reserve Investment
72,000
64,000
< font style="font-size:10.0pt;" face="Courier">64,000
Short-Term Bond
84,000
84,000
84,000
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>
<R>
(a)Less than $1,000.
</R>
<R>
(b)Prior to commencement of operations.
</R>
<R>
other shareholder services
</R>
The shares of some fund shareholders are held in omnibus accounts maintained by various third parties, including retirement plan sponsors, insurance companies, banks, and broker-dealers. The fund has adopted an administrative fee payment ("AFP") program that authorizes the fund to make payments to these third parties. The payments are made for transfer agent, recordkeeping, and other administrative services provided by, or on behalf of, the third parties with respect to such shareholders and the omnibus accounts. Under the AFP program, the funds paid the amounts set forth below to various third parties in calendar year 2002.
<R>
GNMA Fund
$11,212
High Yield Fund
48,330
New Income Fund
19,948
Personal Strategy Balanced Fund
53,504
Personal Strategy Growth Fund
44,962
Personal Strategy Income Fund
22,291
Prime Reserve Fund
26,583
U.S. Treasury Long-Term Fund
203
U.S. Treasury Money Fund
29,590
</R>
<R>
Each Advisor and R Class has adopted an administrative fee payment ("AFP") program under which various intermediaries, including intermediaries receiving 12b-1 payments, may receive payments from the class in
</R>

PAGE 155
<R>
addition to 12b-1 fees for providing various recordkeeping and transfer agent type services to the classes and/or shareholders thereof. These services include, but are not limited to: transmission of net purchase and redemption orders; maintenance of separate records for shareholders reflecting purchases, redemptions, and share balances; mailing of shareholder confirmations and periodic statements; and telephone services in connection with the above. Under the AFP program, the fund paid the amount set forth below to various third parties in calendar year 2002.
</R>
<R>
High Yield Fund—Advisor Class
$201,538
</R>
<R>
T. Rowe Price Associates 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 underlying T. Rowe Price funds, including the New Income and Short-Term Bond 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 Services, Inc.
</R>
<R>
Control of Investment Adviser
</R>
<R>
T. Rowe Price Group, Inc. ("Group") owns 100% of the stock of T. Rowe Price Associates, Inc. Group was formed in 2000 as a holding company for the T. Rowe Price-affiliated companies.
</R>
All funds except Government Reserve Investment and Reserve Investment Funds
DISTRIBUTOR FOR THE FUND
<R>
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.
</R>
Investment Services is located at the same address as the fund and T. Rowe Price—100 East Pratt Street, Baltimore, Maryland 21202.
<R>
< font style="font-size:12.0pt;" face="Courier New" color="Black">Investment Services serves as distributor to the fund, pursuant to an Underwriting Agreement ("Underwriting Agreement"), which provides that the fund will pay all fees and expenses in connection with: necessary state filings; preparing, setting in type, printing, and mailing of prospectuses and reports to shareholders; and issuing shares, including expenses of confirming purchase orders.
</R>
The Underwriting Agreement also provides that Investment Services will pay all fees and expenses in connection with: printing and distributing prospectuses and reports for us e 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 fund. Investment Services` expenses are paid by T. Rowe Price.
Investment Services acts as the agent of the fund, in connection with the sale of 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. No sales charges are paid by investors or the fund. No compensation is paid to Investment Services.
High Yield Fund—Advisor Class, New Income Fund—Advisor Class, and New Income Fund—R Class
Distribution and Shareholder Services Plan
<R>
The fund directors adopted a plan pursuant to Rule 12b-1 with respect to each Advisor Class and each R Class (collectively "Class"). Each plan provides that the Class may compensate Investment Services or such other persons as the fund 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 plan will be made (either directly, or indirectly through Investment Services) to brokers, dealers, banks, insurance companies, and intermediaries other than Investment Services. Under the plan, each Advisor Class pays a fee at the annual rate of up to 0.25% of that
</R>

<R>
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 on 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 Cla ss, 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 plan complies with these rules.
&l t;/R>
<R>
The plan 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 directors for their review.
</R>
<R>
Prior to approving the plan, the fund considered various factors relating to the implementation of the plan and determined that there is a reasonable likelihood that the plan will benefit each fund, its Class, and the Class`s share holders. The fund directors noted that to the extent the plan allows a fund to sell Class shares in markets to which it would not otherwise have access, the plan 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 provide d more effectively by intermediaries with which shareholders have an existing relationship.
</R>
<R>
The plan 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 directors and (2) by a vote of the majority of the fund`s independent directors ("Rule 12b-1 Directors"), cast in person at a meeting called for the purpose of voting on such approval. The plan 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 directors in the manner prescribed by Rule 12b-1 under the 1940 Act. The plan 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>
<R>
The following payments for the period ended May 31, 2003, were made to third-party intermediaries, including broker-dealers and insurance companies, for the distribution, shareholder servicing, maintenance of shareholder accounts, and/or other administrative services under the plan.
</R>
<R>
High Yield Fund—Advisor Class
$925,000
New Income Fund—R Class
1,000
</R>
CUSTODIAN
State Street Bank and Trust Company is the custodian for the fund`s U.S. securities and cash, but it does not participate in the fund`s investment decisions. Portfolio securities purchased in the U.S. are maintained in the custody of the Bank and may be entered into the Federal Reserve Book Entry System, or the security depository system of the Depository Trust Corporation. State Street Bank`s main office is at 225 Franklin Street, Boston, Massachusetts 02110.
<R>
The fund (other than GNMA, Government Reserve Investment, Prime Reserve, Reserve Investment, U.S. Treasury Intermediate, U.S. Treasury Long-Term, and U.S. Treasury Money Funds) has entered into a Custodian Agreement with JPMorgan Chase Bank, London, pursuant to which portfolio securities that 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.
</R>

PAGE 157
CODE OF ETHICS
<R>
The fund, its investment adviser (T. Rowe Price), and its 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. In addition, all Access ;Persons must report their personal securities transactions within 10 days of their execution. Access Persons will ;not be permitted to effect transactions in a security if< /font>: there are pending client orders in the security; the security ;has been purchased or sold by a client within seven calendar days; the security is being considered for purchase ;for a client;;or the security is subject to internal trading restrictions. In addition, Access Persons are prohibited from profiting from short-term trading (e.g., purchases and sales involving the same security within 60 days). Any person becoming an Access Person must file a statement of personal securities holdings within 10 days of this date. All Access Persons are required to file an annual statement with respect to their personal securities holdings. Any material violation of the Code of Ethics is reported to the Board of the fund. The Board also reviews the administration of the Code of Ethics on an annual basis.
</R>
PORTFOLIO TRANSACTIONS
Investment or Brokerage Discretion
Decisions with respect to the purchase and sale of portfolio securities on behalf of the fund are made by T. Rowe Price. T. Rowe Price is also responsible for implementing these decisions, including the negotiation of commissions and the allocation of portfolio brokerage and principal business 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 resul ting from the payment of such commissions may benefit the fund.
</R>
How Brokers and Dealers Are Selected
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,< font style="font-size:10.0pt;" face="Berkeley Book" color="Black"> 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
<R>
In purchasing and selling equity securities, T. Rowe Price seeks to obtain quality execution at favorable security .prices through responsible brokers and dealers and 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, over-the-counter orders are executed with ma rket-makers through an electronic communications network. 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
</R>
<R>
In selecting brokers and dealers to execute the fund`s portfolio transactions, consideration is given to such factors as the price of the security, the rate of the commission, the size and difficulty of the order, the reliability, integrity, financial condition, general execution, and operational capabilities of competing brokers and dealers, their expertise in particular markets, and brokerage and research services provided by them. It is not the policy of T. Rowe Price to seek the lowest available commission rate where it is believed that a broker or dealer charging a higher commission rate would offer greater reliability or provide better price or execution.
</R>
Equity and Fixed-Income Securities
<R>
With respect to equity and fixed-income securities, T. Rowe Price may effect principal transactions on behalf of the fund with a broker or dealer who furnishes brokerage and/or research services benefiting the fund; designate
</R>

<R>
any such broker or dealer to receive selling concessions, discounts, or other allowances; or otherwise deal with any such broker or dealer in connection with the acquisition of securities in underwritings. T. Rowe Price may receive research services in connection with brokerage transactions, including designat ions in fixed-price offerings.
</R>
How Evaluations Are Made of the Overall Reasonableness of Brokerage Commissions Paid
<R>
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 brokers and dealers; (d) the size of a particular transaction in terms of the number of shares, dollar amount, and number of clients involved; (e) the complexity of a particular transaction in terms of both execution and settlement; (f) the level and type of business done with a particular firm over a period of time; and (g) the extent to which the broker or dealer has capital at risk in the transaction.
</R>
<R>
Description of Research Services Received From Brokers and Dealers
</R>
T. Rowe Price receives a wide range of research services from brokers and dealers. These services include information on the economy, industries, groups of securities, individual companies, statistical information, accounting and tax law interpretations, political developments, legal developments affecting portfolio securities, technical market action, pricing and appraisal services, credit analysis, risk measurement analysis, performance analysis, and analysis of corporate responsibility issues. These services provide both domestic and international perspective. Research services are received primarily in the form of written reports, computer-generated services, telephone contacts, and personal meetings with security analysts. Such services may be provided in the form of meetings arranged with corporate and industry spokespersons, economists, academicians, and government representatives. In some cases, research services are generated by third parties but are provided to T. Rowe Price by or through broker-dealers. In addition, such services may include computers and related hardware.
<R>
Research services received from brokers and dealers are supplemental to T. Rowe Price`s own research efforts and, when utilized, are subject to internal analysis before being incorporated by T. Rowe Price into its investment process. As a practical matter, it would not be possible for T. Rowe Price`s Equity Research Division to generate all of the information presently provided by brokers and dealers. T. Rowe Price pays cash for certain research services received from external sources. T. Rowe Price also allocates brokerage for research services which are available for cash. While receipt of research services from brokerage firms has not reduced T. Rowe Price`s normal research activities, the expenses of T. Rowe Price could be materially increased if it attempted to generate such additional information through its own staff. To the extent that research services of value are provided by brokers or dealers, T. Rowe Price is relieved of expenses which it might otherwise bear.
</R>
<R>
T. Rowe Price has a policy of not allocating brokerage business in return for products or services other than brokerage or research services. In accordance with the provisions of Section 28(e) of the Securities Exchange Act of 1934, T. Rowe Price may from time to time receive services and products which serve both research and non-research functions. In such event, T. Rowe Price makes a good faith determination of the anticipated research and non-research use of the product or service and allocates brokerage only with respect to the research component.
</R>
Directed Brokerage
In 2002, the T. Rowe Price Funds that invest in domestic equity securities adopted a commission re capture program. Under the program, a percentage of commissions generated by the portfolio transactions of those funds is rebated to the funds by the brokers and used to pay for certain fund operating expenses.
Commissions to Brokers Who Furnish Research Services
Certain brokers and dealers who provide quality brokerage and execution services also furnish research servic es 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 permits an investment adviser to cause an account to pay commission rates in excess of those another broker or dealer would have charged for effecting the same transaction if the adviser determines in good faith that the commission paid is reasonable in relation to the value of the brokerage and research services provided. The

PAGE 159
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 brokers. 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. 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 participates. Such research is used to benefit the accounts that purchase in the offering.
Internal Allocation Procedures
T. Rowe Price has a policy of not precommitting a specific amount of business to any broker or dealer over any specific time period. Historically, the majority of brokerage placement has been determined by the needs of a specific transaction such as market-making, availability of a buyer or seller of a particular security, or specialized execution skills. However, T. Rowe Price does have an internal brokerage allocation procedure for that portion of its discretionary client brokerage business where special needs do not exist, or where the business may be allocated among several brokers or dealers, which are able to meet the needs of the transaction.
<R>
Each year, T. Rowe Price assesses the contribution of the brokerage and research services provided by brokers and dealers and attempts to allocate a portion of its brokerage business in response to these assessments. Research analysts, counselors, various investment committees, and the Trading Department each seek to evaluate the brokerage, execution, and research services they receive from brokers and dealers and make judgments as to the level of business which would recognize such services. In addition, brokers and 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 or dealer exclud ed from receiving business from T. Rowe Price because it has not been identified as providing research services.
</R>
Miscellaneous
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 brokers or 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 brokers or dealers which execute transactions for the fund are not necessarily used by T. Rowe Price exclusively in connection with the management of the fund.
From time to time, orders for clients may be placed through a computerized transaction network.
The fund does not allocate business to any broker-dealer on the basis of its sales of the fund`s shares. However, th is does not mean that broker-dealers who purchase fund shares for their clients will not receive business from the fund.
<R>
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. 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 the T. Rowe Price Associates Foundation, Inc. and The 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 for its clients (including the T. Rowe Price funds) if, as a result of such purchases, 10% or more of the outstanding common stock of the issuer would be held by its clients in the aggregate. For purposes of determining the 10% limit, 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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<R>
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, 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 con nection 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
<R>
T. Rowe Price has developed written trade allocation guidelines for its Equity, Municipal, and Taxable Fixed-Income 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 circumstan ces, 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.
</R>
Other
<R>
The amounts shown below involved trades with brokers acting as agents or underwriters, in which such brokers received total commissions, including discounts received in connection with underwritings for the las t three fiscal years.
</R>
<R>< /tr>843,000

Fund

2003

2002

2001

Corporate Income
$121,000
$103,000
$103,000
GNMA
13,000
0
0
High Yield
14,294,000
9,189,000
7,746,000
Inflation Protected Bond
121,000
(a)
(a)
Institutional High Yield
1,291,000
(a)
(a)
New Income
1,343,000
1,734,000
1,387,000
Personal Strategy Balanced
654,000
564,000
Personal Strategy Growth
311,000
374,000
218,000
Personal Strategy Income
257,000
332,000
215,000
Short-Term Bond
302,000
217,000
217,000
U.S. Treasury Intermediate
11,000
0
0
U.S. Treasury Long-Term
12,000
0
0
</R>
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(a)Prior to commencement of operations.
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The percentage of total portfolio transactions, placed with firms which provided research, statistical, or other services to T. Rowe Price in connection with the management of the funds, or in some cases, to the funds for the last three fiscal years, are shown below:

PAGE 161
<R>

Fund

2003

2002

2001

Corporate Income
94%
95%
98%
High Yield
86
82
87
New Income
96
98
112
Personal Strategy Balanced
17
14
11
Per sonal Strategy Growth
24
19
17
Personal Strategy Income
12
9
7
</R>
The portfolio turnover rates for the following funds for the last three fiscal years are as follows:
<R>

Fund

2003

2002

2001

Corporate Income
92.9%
91.1%
98.1%
GNMA(a)
385.8
145.2
71.2
High Yield
59.9
71.3
80.1
Inflation Protected Bond
35.6*
(b)
(b)
Institutional High Yield
72.3
(b)
(b)
New Income
221.2
222.0
112.1
Personal Strategy Balanced
87.8
97.2
61.5
Personal Strategy Growth
52.5
68.4
54.8
Personal Strategy Income
108.5
115.9
79.8
Short-Term Bond(a)
110.1
49.9
77.6
U.S. Treasury Intermediate
105.6
104.4
108.0
U.S. Treasury Long-Term
65.5
48.5
31.3
</R>
<R>
* Annualized< /font>
</R>
<R>
(a)The funds` higher portfolio turnover was due primarily to increased trading of mortgage dollar rolls.
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<R>
(b)Prior to commencement of operations.
</R>
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Government Reserve Investment, Prime Reserve, Reserve Investment, and U.S. Treasury Money Funds
The fund, in pursuing its objectives, may engage in short-term trading to take advantage of market variations. The fund will seek to protect principal, improve liquidity of its securities, or enhance yield by purchasing and selling securities based upon existing or anticipated market discrepancies.
GNMA and New Income Funds
The fund has been rolling mortgages, i.e., selling the current month and buying the forward month, to enhance total return.
PRICING OF SECURITIES
<R>
: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 official closing price for certain markets, at the time the valuations are made. A security that is listed or traded on more than one exchange is valued at the quotation on the exchange determined to be the primary market for such security. 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.
</R>
<R>
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.
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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. Purchased 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.
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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.
</R>
<R>
Assets and liabilities for which the above valuation procedures are inappropriate or are deemed not to reflect fair value are stated at fair value as determined in good faith by or under the supervision of the officers of the fund, as authorized by the Board.
</R>
<R>
All funds (except Personal Strategy and Money Funds)
</R>
<R>
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.
</R>
<R>
Personal Strategy Funds
</R>
<R>
Debt securities with original maturities less than one year are valued at amortized cost in local c urrency, which approximates fair value when combined with accrued interest.
</R>
Money Funds
<R>
Securities are valued at amortized cost.
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Government Reserve Investment, Prime Reserve, Reserve Investment, and U. S. Treasury Money Funds
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Maintenance of Money Fund`s Net Asset Value per Share at $1.00
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It is the policy of the fund 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 un der the 1940 Act. Under this method, securities are valued by reference to the fund`s acquisition cost as adjusted for amortization of premium or accumulation of discount, rather than by reference to their market value. Under Rule 2a-7:
<R>
(a)The Board must establish written procedures reasonably designed, taking into account current market conditions and the fund`s investment objectives, to stabilize the fund`s net asset value per share, as computed for the purpose of distribution, redemption, and repurchase, at a single value;
</R>
(b)The fund must (i) maintain a dollarweighted average portfolio maturity appropriate to its 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 dollarweighted average portfolio maturity of 90 days or less;
<R>
(c)The fund must limit its purchase of portfolio inst ruments, including repurchase agreements, to those U.S. dollar-denominated instruments which the fund`s Board determines present minimal credit risks and which are eligible securities as defined by Rule 2a-7; and
</R>
<R>
(d)The Board must determine that (i) it is in the best interest of the fund and its shareholders to maintain a stable net asset value per share under the amortized cost method; and (ii) the fund will continue to use the amortized cost method only so long as the Board believes that it fairly reflects the market-based net asset value per share.
</R>
<R>
Although the fund believes that it will be able to maintain its net asset value at $1.00 per share under most conditions, there can be no absolute assurance that it will be able to do so on a continuous basis. If the fund`s net asset value per share declined, or was expected to decline, below $1.00 (rounded to the nearest one cent), the Board of the fund 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 give n 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 fund`s net asset value per share were to increase, or were anticipated to increase, above $1.00 (rounded to the
</R>

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<R>
nearest one cent), the Board of the fund might supplement dividends in an effort to maintain the net asset value at $1.00 per share.
</R>
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 fund`s Board.
All funds
NET ASSET VALUE PER SHARE
The purchase and redemption price of the fund`s shares is equal to the fund`s net asset value per share or share price. The fund determines its net asset value per share by subtracting its liabilities (including accrued expenses and dividends payable) from its total assets (the market value of the securities the fund holds plus cash and othe r assets, including income accrued but not yet received) and dividing the result by the total number of shares outstanding. The net asset value per share of the fund is normally calculated as of the close of trading on the New York Stock Exchange ("NYSE") every day the NYSE is open for trading. The NYSE is closed on the following days: New Year`s Day, Dr. Martin Luther King, Jr. Holiday, Presidents` Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
Determination of net asset value (and the offering, sale, redemption, and repurchase of shares) for the fund may ,be suspended at times (a) during which the NYSE is closed, other than customary weekend and holiday ,closings,,(b) during which trading on the NYSE is restricted, (c) during which an emergency exists as a result of which disposal by the fund of securities owned by it is not reasonably practicable or it is not reasonably practicable for the fund fairly to determine the value of its net assets, or (d) during which a governmental body having jurisdiction over the fund may by order permit such a suspension for the protection of the fund`s shareholders, provided that applicable rules and regulations of the SEC (or any succeeding governmental authority) shall govern as to whether the conditions prescribed in (b), (c), or (d) exist.
DIVIDENDS AND DISTRIBUTIONS
Unless you elect otherwise, the fund`s annual capital gain distribution, if any, will be reinvested on the reinvestment date using the NAV per share of that date. The reinvestment date normally precedes the payment date by one day, although the exact timing is subject to change and can be as great as 10 days.
TAX STATUS
The fund intends to qualify as a "regulated investment company" under Subchapter M of the Code.
<R>
For individual shareholders, a portion of fund ordinary dividends representing qualified dividends it received may be subject to tax at the lower rate applicable to long-term capital gains, rather than ordinary income. Qualified dividends are dividends received from domestic and qualified foreign corporations. It excludes dividends representing payments in lieu of dividends related to loaned securities, dividends received on certain hedged positions and dividends on securities the fund has not held more than 60 days during the 120-day period beginning 60 days before the stock became ex-dividend (90 and 180 days for certain preferred stock).
</R>

<R>
Individual shareholders can only apply the lower rate to the qualified portion of the fund`s dividend if they have held the shares in the fund on which the dividend was paid for this same holding period surrounding the ex-dividend date of the fund`s dividend. Little, if any, of ordinary dividends from the income and money funds is expected to qualify for this lower rate.
</R>
For corporate shareholders, a portion of fund ordinary dividends are eligible for the 70% deduction for dividends received by corporations to the extent the fund`s 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 fund has not held more than 45 days during the 90-day period be ginning 45 days before the stock became ex-dividend (90 and 180 days for certain preferred stock). Little, if any, of ordinary dividends from the income and money funds is expected to qualify for this deduction. Long-term capital gain distributions paid from the funds are never eligible for the dividends-received deduction.
<R>
For tax purposes, it does not make any difference whether dividends and capital gain distributions are paid in cash or in additional shares. Eac h fund must declare dividends by December 31 of each year equal to at least 98% of ordinary income (as of December 31) and capital gains (as of October 31) in order to avoid a federal excise tax and distribute within 12 months 100% of ordinary income and capital gains (as of its tax year-end), to avoid a federal income tax.
</R>
At the time of your purchase, the fund`s net asset value may reflect undistributed income., capital gains, or net unrealized appreciation of securities held by the fund. A subsequent distribution to you of such amounts, although constituting a return of your investment, would be taxable as either dividend or capital gain distributions. For federal income tax purposes, the fund is permitted to carry forward its net realized capital losses, if any, for eight years and realize net capital gains up to the amount of such losses without being required to pay taxes on, or distribute, such gains.
<R>
Income received by the fund from sources within various foreign countries may be subject to foreign income taxes withheld at the source. Under the Code, if more than 50% of the value of the fund`s total assets at the close of its taxable year comprise securities issued by foreign corporations or governments, the fund may file an election with the Internal Revenue Service to "pass through" to the fund`s shareholders the amount of any foreign income taxes paid by the fund. Pursuant to this election, shareholders will be required to: (1) include in gross income, even though not actually received, their respective pro-rata share of foreign taxes paid by the fund; (2) treat their pro-rata share of foreign taxes paid by them; and (3) either deduct their pro-rata share of foreign taxes in computing their taxable income, or use it as a foreign tax credit against U.S. income taxes (but not both). No deduction for foreign taxes may be claimed by a shareholder who does not itemize deductions.
</R>
<R>
Funds that invest substantially in foreign securities and pay significant foreign taxes intend to meet the requirements of the Code which permit it to elect to "pass through" to its shareholders foreign income taxes paid, but there can be no assurance that the fund will be able to do so. If the fund will "pass through" foreign taxes for any year, shareholders will be notified with the Forms 1099-DIV received from the fun d of the amount of each shareholder`s pro-rata share of (1) the foreign taxes paid for that year, (2) the fund`s gross income from foreign sources, and (3) if applicable, information to adjust to their pro-rata share of the fund`s gross income resulting from foreign dividends received by the fund which are subject to U.S. ta x at the lower rates applicable to long-term capital gains. Corporate shareholders and individual shareholders whose pro-rata share of foreign taxes paid is $300 ($600 if married filing joint returns) or more will require this information to file a foreign tax credit limitation calculation with their tax return. Of course, shareholders who are not liable for federal income taxes, such as retirement plans qualified under Section 401 of the Code, will not be affected by any such "pass through" of foreign tax credits.
</R>
<R>
.If, in any taxable year, the fund should not qualify as a regulated investment company under the Code: (1) the fund would be taxed at normal corporate rates on the entire amount of its taxable income, if any, without a deduction for dividends or other distributions to shareholders; and (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
</R>

PAGE 165
<R>
ordinary dividends (regardless of whether they would otherwise have been considered capital gain dividends), and the fund may qualify for the 70% deduction for dividends received by corporations.
</R>

TABLE OF CONTENTS

	Page		Page

Capital Stock	80	Management of the Fund	38
Code of Ethics	68	Net Asset Value per Share	74
Custodian	67	Other Shareholder Services	65
Distributor for the Fund	66	Portfolio Management Practices	19
Dividends and Distributions	75	Portfolio Transactions	68
Federal Registration of Shares	83	Pricing of Securities	73
Independent Auditors	83	Principal Holders of Securities	58
Investment Management Services	60	Ratings of Commercial Paper	86
Investment Objectives and Policies	2	Ratings of Corporate Debt Securities	87
Investment Performance	78	Risk Factors	2
Investment Program	7	T. Rowe Price Proxy Voting — Process and Policies	82
Investment Restrictions	34	Tax Status	75
Legal Counsel	83	Yield Infor mation	77

Name, Date of Birth, and Number of Portfolios in Fund Complex Overseen by Director	Term of Office(a) and Length of Time Served	Principal Occupation(s) During Past 5 Years	< br>Other Directorships of Public Companies
Anthony W. Deering 1/28/45 105 portfolios	Since later of 1979 or year of incorporation(b)	Director, Chairman of the Board, President, and Chief Executive Officer, The Rouse Company, real estate developers; Director, Mercantile Bank (4/03 to present)	The Rouse Company and Mercantile Bank
Donald W. Dick, Jr. 1/27/43 105 portfolios	Since later of 2001 or year of incorporation(b)	Principal, EuroCapital Advisors, LLC, an acquisition and management advisory firm	None
David K. Fagin 4/9/38 105 portfolios	Since later of 2001 or year of incorporation(b)	Director, Golden Star Resources Ltd., Canyon Resources Corp. (5/00 to present), and Pacific Rim Mining Corp. (2/02 to present); Chairman and President, Nye Corporation	Golden Star Resources Ltd., Canyon Resources Corp., and Pacific Rim Mining Corp.
F. Pierce Linaweaver 8/22/34 105 portfolios	Since later of 1980 or year of incorporation(b)	President, F. Pierce Linaweaver & Associates, Inc., consulting environmental and civil engineers	None
John G. Schreiber 10/21/46 105 portfolios	Since later of 1992 or year of incorporation(b)	Owner/President, Centaur Capital Partners, Inc., a real estate investment company; Senior Advisor and Partner, Blackstone Real Estate Advisors, L.P.	AMLI Residential Properties Trust, Host Marriott Corporation, and The Rouse Company, real estate developers
Hubert D. Vos 8/2/33 105 portfolios	Since later of 2001 or year of incorporation(b)	Owner/Pre sident, Stonington Capital Corporation, a private investment company	None
Paul M. Wythes 6/23/33 105 portfolios	Since later of 2001 or year of incorporation(b)	Founding Partner of Su tter Hill Ventures, a venture capital limited partnership, providing equity capital to young high-technology companies throughout the United States	Teltone Corporation

Incorporation Years
Corporation	Year of Incorporation
Corporate Income Fund	1995
GNMA Fund	1985
High Yield Fund	1984
Inflation Protected Bond Fund	2002
Institutional Income Funds	2000
New Income Fund	1973
Personal Strategy Funds	1994
Prime Reserve Fund	1975
Reserve Investment Funds	1997
Short-Term Bond Fund	1983
U.S. Treasury Funds	1989

Taxation of Foreign Shareholders

<R>
The Code provides that dividends from net income will be subject to U.S. tax. For shareholders who are not engaged in a business in the U.S., this tax would be imposed at the rate of 30% upon the gross amount of the dividends in the absence of a Tax Treaty providing for a reduced rate or exemption from U.S. taxation. Distributions of net long-term capital gains realized by the fund are not subject to tax unless the foreign shareholder is engaged in a business in the U.S. and the gains are connected with that business, or the shareholder is a nonresident alien individual who was physically present in the U.S. during the tax year for more than 182 days.
</R>
Passive Foreign Investment Companies
The fund 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 fund`s 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 fund held its investment. In addition, the fund may be subject to corporate income tax and an interest charge on certai n dividends and capital gains earned from these investments, regardless of whether such income and gains are distributed to shareholders.
To avoid such tax and interest, the fund intends to treat these securities as sold on the last day of its fiscal year and recognize any gains for tax purposes at that time; deductions for losses are allowable only to the extent of any gains resulting from these deemed sales for prior taxable years. Such gains and losses will be treated as ordinary income. The fund will be required to distribute any resulting inco me, even though it has not sold the security and received cash to pay such distributions.
Foreign Currency Gains and Losses
Foreign currency gains and losses, including the portion of gain or loss on the sale of debt securities attributable to foreign exchange rate fluctuations, are taxable as ordinary income. If the net effect of these transactions is a gain, the ordinary income dividend paid by the fund will be increased. If the result is a loss, the income dividend paid by the fund will be decreased, or, to the extent such dividend has already been paid, it may be classified as a return of capital. Adjustments to reflect these gains and losses will be made at the end of the fund`s taxable year.
YIELD INFORMATION
< div style="margin-left:5.5pc;margin-right:0.0pc;text-indent:0.0pc;width:100%">GNMA Fund

In conformity with regulations of the SEC, an income factor is calculated for each security in the portfolio based upon the security`s coupon rate. The income factors are then adjusted for any gains or losses which have resulted from prepayments of principal during the period. The income factors are then totaled for all securities in the portfolio. Next, expenses of the fund for the period, net of expected reimbursements, are deducted from the income to arrive at net income, which is then converted to a per share amount by dividing net income by the average number of shares outstanding during the period. The net income per share is divided by the net asset value on the last day of the period to produce a monthly yield which is then annualized. Quoted yield factors are for comparison purposes only, and are not intended to indicate future performance or forecast the dividend per share of the fund.

<R>
The yield of the GNM A Fund calculated under the above-described method for the month ended May 31, 2003, was 3.41%.
</R>
Corporate Income, High Yield, Inflation Protected Bond, New Income, Short-Term Bond, U.S. Treasury Intermediate, and U.S. Treasury Long-Term Funds
An income factor is calculated for each security in the portfolio based upon the security`s market value at the beginning of the period and yield as determined in conformity with regulations of the SEC. The income factors

are then totaled for all securities in the portfolio. Next, expenses of the fund for the period, net of expected reimbursements, are deducted from the income to arrive at net income, which is then converted to a per share amount by dividing net income by the average number of shares outstanding during the period. The net income per share is divided by the net asset value on the last day of the period to produce a monthly yield, which is then annualized. If applicable, a taxable-equivalent yield is calculated by dividing this yield by one minus the effective federal, state, and/or city or local income tax rates. Quoted yield factors are for comparison purposes only and are not intended to indicate future performance or forecast the dividend per share of the fund.
<R>
The yields of the Corporate Income, High Yield, High Yield Fund—< font style="font-size:12.0pt;" face="Courier New" color="Black">Advisor Class, Inflation Protected Bond, New Income, New Income Fund—Advisor Class, New Income Fund—R Class, Short-Term Bond, U.S. Treasury Intermediate, and U.S. Treasury Long-Term Funds calculated under the above-described method for the month ended May 31, 2003, were 4.51%, 8.87%, 8.63%, 1.27%, 3.13%, 2.99%, 2.73%, 2.42%, 2.05%, and 3.75%, respectively.
</R>
Government Reserve Investment, Prime Reserve, Reserve Investment, and U.S. Treasury Money Funds
The fund`s current and historical yield for a period is calculated by dividing the net change in value of an account (including all dividends accrued and dividends reinvested in additional shares) by the account value at the beginning of the period to obtain the base period return. This base period return is divided by the number of days in the period, then multiplied by 365 to arrive at the annualized yield for that period. The fund`s annualized compound yield for such period is compounded by dividing the base period return by the number of days in the period, and compounding that figure over 365 days.
<R>
The seven-day yields ending May 31, 2003, for the Prime Reserve and U.S. Treasury Money Funds were 0.62% and 0.65%, respectively, and the funds` compound yield for the same period were 0.62% and 0.65%, respectively.
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All funds
INVESTMENT PERFORMANCE
Total Return Performance
The fund`s calculation of total return performance includes the reinvestment of all capital gain distributions and income dividends for the period or periods indicated, without regard to tax consequences to a shareholder in the fund. Total return is calculated as the percentage change between the beginning value of a static account in the fund and the ending value of that account measured by the then current net asset value, including all shares acquired through reinvestment of income and capital gain dividends. The results shown are historical and should not be considered indicative of the future performance of the fund. Each average annual compound rate of return is derived from the cumulative performance of the fund over the time period specified. The annual compound rate of return for the fund over any period of time will vary from the average.
<R>< td style="">10.32

Cumulative Performance Percentage Change
Periods Ended 5/31/03

Fund

1 Yr.

5 Yrs.

10 Yrs.

Since
Inception

Inception
Date

Corporate Income
12.86%
34.34%
&# 151;
69.10%
10/31/95
GNMA
7.07< br> 37.72
89.61%
264.38
11/26/85
High Yield
10.53
21.39
88.55
376.32
12/31/84
High Yield Fund—Advisor Class
—
—
17.10
03/31/00
Inflation Protected Bond
—
—
—
10.40
10/31/02
Institutional High Yield
13.78
—
—
13.78
05/31/02
New Income
10.52
36.84
90.85
1,023.81
08/31/73
New Income Fund—Advisor Class
< font style="font-size:10.0pt;" face="Courier">—
—
—
7.02
09/30/02
New Income Fund—R Class
—
—
—
6.84
09/30/02
Personal Strategy Balanced
0.01
18.21
—
122.73
07/29/94
Personal Strategy Growth
-3.68
11.65
—
132.01
07/29/94
Personal Strategy Income
2.80
23.39
—
112.09
07/29/94
Prime Reserve
1.01
20.79
51.07
512.48
01/26/76
Short-Term Bond
6.74
35.18
68.30
263.72
03/02/84
U.S. Treasury Intermediate
12.89
44.90
92.62
176.64
09/29/89
U.S. Treasury Long-Term
19.57
50.24
123.72
225.66
09/29/89
U.S. Treasury Money
1.02
19.31
47.83
198.77
06/28/82
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PAGE 167

<R>< td style="">—

Average Annual Compound Rates of Return
Periods Ended 5/31/03

Fund

1 Yr.

5 Yrs.

10 Yrs.

Since
Inception

Inception
Date

Corporate Income
12.86%
6.08%
—
7.17%
10/31/95
GNMA
7.07
6.61
6.61%
7.66
11/26 /85
High Yield
10.53
3.95
6.55
8.85
12/31/84
High Yield Fund—Advisor Class
10.32
—
5.11
03/31/00
Inflation Protected Bond
—
—
—
(a)
10/31/02
Institutional High Yield
13.78
—
—
13.78
05/31/02
New Income
10.52
6.47
6.68
< font style="font-size:10.0pt;" face="Courier">8.47
08/31/73
New Income Fund—Advisor Class
—
—
—
(a)
09/30/02
New Income Fund—R Class
—
—
—
(a)
09/30/02
Personal Strategy Balanced
0.01
3.40
—
9.48
07/29/94
Personal Strategy Growth
-3.68
2.23
—
9.99
07/29/94
Personal Strategy Income
2.80
4.29
—
8.88
07/29/94
Prime Reserve
1.01
3.85
4.21
6.85
01/26/76
Short-Term Bond
6.74
6.21
5.34
6.94
03/02/84
U.S. Treasury Intermediate
12.89
7.70
6.78
7.73
09/29/89
U.S. Treasury Long-Term
19.57
8.48
8.39
9.02
09/29/89
U.S. Treasury Money
1.02
3.59
3.99
5.37
06/28/82
</R>
<R>
(a) No figure is provided because the fund`s performance is for a period of less than one year.
</R>
Outside Sources of Information
<R>
From time to time, in reports and promotional literature: ( 1) the fund`s total return performance, ranking, or any other measure of the fund`s performance may be compared to any one or combination of the following: (a) a broad-based index, (b) other groups of mutual funds, including T. Rowe Price funds, tracked by indepe ndent research firms, ranking entities, or financial publications, (c) indices of securities comparable to those in which the fund invests; (2) the consumer price index (or any other measure for inflation), or government statistics, such as GNP, may be used to illustrate investment attributes of the fund or the general economic, business, investment, or financial environment in which the fund operates; (3) various financial, economic, and market statistics developed by brokers, dealers, and other persons may be used to illustrate aspects of the fund`s performance; (4) the effect of tax-deferred compounding on the fund`s investment returns, or on returns in general in both qualified and nonqualified retirement plans or any other tax-advantaged product, may be illustrated by graphs, charts, etc.; (5) the sectors or industries in which the fund invests may be compared to relevant indices or surveys in order to evaluate the fund`s historical performance or current or potential value with respect to the particular industry or sector; and (6) the fund may disclose the performance of other funds or accounts managed by T. Rowe Price in a manner similar to the fund.
</R>
Other Publications
From time to time, in newsletters and other publications issued by Investment Services, T. Rowe Price mutual fund portfolio managers may discuss economic, financial, and political developments in the U.S. and abroad and how these conditions have affected or may affect securities prices or the fund; individual securities within the fund`s portfolio; and their philosophy regarding the selection of individual stocks, including why specific stocks have been added, removed, or excluded from the fund`s portfolio.
Other Features and Benefits
The fund is a member of the T. Rowe Price family of funds and may help investors achieve various long-term investment goals, which include, but are not limited to, investing money for retirement, saving for a down payment on a home, or paying college costs. To explain how the fund could be used to assist investors in

PAGE 169
planning for these goals and to illustrate basic principles of investing, various worksheets and guides prepared by T. Rowe Price and/or Investment Services may be made available.
Redemptions in Kind
The fund has filed a notice of election under Rule 18f-1 of the 1940 Act. This permits the fund to effect redemptions in kind and in cash as set forth in its prospectus.
In the unlikely event a shareholder were to receive an in-kind redemption of portfolio securities of the fund, it would be the responsibility of the shareholder to dispose of the securities. The shareholder would be at risk that the value of the securities would decline prior to their sale, that it would be difficult to sell the securities, and that brokerage fees could be incurred.
Issuance of Fund Shares for Securities
Transactions involving issuance of fund shares for securities or assets other than cash will be limited to (1) bona fide reorganizations; (2) statutory mergers; or (3) other acquisitions of portfolio securities that: (a) meet the investment objective and policies of the fund; (b) are acquired for investment and not for resale except in accordance with ap plicable 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.
All funds except GNMA Fund
CAPITAL STOCK
<R> ;
The fund`s Charter authorizes the Board to classify and reclassify any and all shares which are then unissued, including unissued shares of capital stock into any number of classes or series; each class or series consisting of such number of shares and having such designations, such powers, preferences, rights, qualifications, limitations, and restrictions as shall be determined by the Board subject to the 1940 Act and other applicable law. The shares of any such additional classes or series might therefore differ from the shares of the present class and series of capital stock and from each other as to preferences, conversions, or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption, subject to applicable law, and might thus be superior or inferior to the capital stock or to other classes or series in various characteristics. The Board may increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that the fund has authorized to issue without shareholder approval.
</R>
<R>
Except to the extent that the fund`s Board 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 directors have provided 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 voting 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.
</R>
<R>
Shareholders are entitled to one vote for each full share held (and fractional votes for fractional shares held) and will vote in the election of or removal of directors (to the extent hereinafter provided) and on other matters submitted to the vote of shareholders. There will normally be no meetings of shareholders for the purpose of electing directors unless and until such time as less than a majority of the directors holding office have been elected by shareholders, at which time the directors then in office will call a shareholders` meeting for the election of directors. Except as set forth above, the directors shall continue to hold office and may appoint successor directors. Voting rights are not cumulative, so that the holders of more than 50% of the shares voting in the election of directors can, if they choose to do so, elect all the directors of the fund, in which event the holders of the remaining shares will be unable to elect any person as a director. As set forth in the By-Laws of the Corporation, a special meeting of shareholders of the Corporation shall be called by the Secretary of the Corporation on the written request of shareholders entitled to cast (a) i n the case of a meeting for the purpose of
</R>

<R>
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 Corporation the reasonably estimated costs of preparing and mailing the notice of the meeting. The Corporation, however, will otherwise assist the shareholders seeking to hold the special meeting in communicating to the other shareholders of the Corporation to the extent required by Section 16(c) of the 1940 Act.
</R>
GNMA Fund
Description of the Fund
<R>
For tax and business reasons, the fund was organized as a Massachusetts business trust and is registered with the SEC under the 1940 Act as a diversified, open-end investment company, commonly known as a "mutual funds."
</R>
<R>
The Declaration of Trust permits the Board to issue an unlimited number of full and fractional shares of a single class. The Declaration of Trust also provides that the Board may issue additional series or classes of shares. Each share represents an equal proportionate beneficial interest in the fund. In the event of the liquidation of the fund, each share is entitled to a pro-rata share of the net assets of the fund.
</R>
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 fund may remove a trustee by a vote cast in person or by proxy at a meeting called for that purpose. Except as set forth above, the trustees shall continue to hold office and may appoint successor trustees. Voting rights are not cumulative, so that the holders of more than 50% of the shares voting in the election of trustees can, if they choose to do so, elect all the trustees of the Trust, in which event the holders of the remaining shares will be unable to elect any person as a trustee. No amendments may be made to the Declaration of Trust without the affirmat ive vote of a majority of the outstanding shares of the Trust.
Shares have no preemptive or conversion rights; the right of redemption and the privilege of exchange are described in the prospectus. Shares are fully paid and nonassessable, except as set forth below. The Trust may be terminated (i) upon the sale of its assets to another diversified, open-end management investment company, if approved by the vote of the holders of two-thirds of the outstanding shares of the Trust, or (ii) upon liquidation and distribution of the assets of the Trust, if approved by the vote of the holders of a majority of the outstanding shares of the Trust. If not so terminated, the Trust will continue indefinitely.
<R>
Under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of the fund. However, the Declaration of Trust disclaims shareholder liability for acts or obligations of the fund and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by the fund or a trustee. The Declaration of Trust provides for indemnification from fund property for all losses and expenses of any shareholder held personally liable for the obligations of the fund. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the fund itself would be unable to meet its obligations, a possibility which T. Rowe Price believes is remote. Upon payment of any liability i ncurred by the fund, the shareholders of the fund paying such liability will be entitled to reimbursement from the general assets of the fund. The trustees intend to conduct the operations of the fund in such a way as to avoid, as far as possible, ultimate liability of the shareholders for liabilities of such fund.
</R>
<R>
T. ROWE PRICE PROXY VOTING < /font>— PROCESS AND POLICIES
</R>
<R>
As an investment adviser to 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.
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PAGE 171
<R>
Proxy Administration
</R>
<R>
The T. Rowe Price Proxy Committee develops positions on all major corporate issues, creates guidelines, and oversees the voting pr ocess. 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 research provided by third parties, and information presented by company managements and shareholder groups.
</R>
<R>
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. 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` Boards review T. Rowe Price`s proxy voting process, policies, and voting records.
</R>
<R>
T. Rowe Price has retained Institutional Shareholder Services, 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.
</R>
<R>
Fiduciary Considerations
</R>
<R>
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 < u>fund shareholders. Practicalities involved with international investing may make it impossible at times, and at other times disadvantageous, to vote proxies in every instance.
</R>
<R>
Consideration Given Management Recommendations
</R>
<R>
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.
</R>
<R>
T. Rowe Price Voting Policies
</R>
<R>
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:
</R>
<R>
Election of Directors
</R>
<R>
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 inside directors serving on compensation and audit committees and for directors who miss more than one-fourth of the scheduled board meetings.
</R>
<R>
Executive Compensation
</R>
<R>
The goal of T. Rowe Price is to assure that a company`s equity-based compensation plan is aligned wit h shareholders` long-term interests. While it evaluates most plans on a case-by-case basis, T. Rowe Price generally opposes compensation packages that provide what it views as excessive awards to a few senior executives or that contain excessively dilutive stock option plans. T. Rowe Price bases 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 opposes plans that give a company the ability to reprice options.
</R>
<R>
Anti-takeover and Corporate Governance Issues
</R>
<R>
T. Rowe Price generally opposes anti-takeover measures and other proposals designed to limit the ability of shareholders to act on possible transactions. When voting on corporate governance proposals, T. Rowe Price will consider the dilutive im pact to shareholders and the effect on shareholder rights.
</R>

<R>
Social and Corporate Responsibility Issues
</R>
<R>
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.
</R>
<R>
Monitoring and Resolving Conflicts of Interest
</R>
<R>
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. 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, for proxy votes inconsistent with T. Rowe Price guidelines, the Proxy Committee reviews all such proxy votes in order 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 < font style="font-size:10.0pt;" face="Berkeley Book" color="Black">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.
</R>
federal registration of shares
The fund`s shares (except for Government Reserve Investment and Reserve Investment Funds) are registered for sale under the 1933 Act. Re gistration of the fund`s shares is not required under any state law, but the fund is required to make certain filings with and pay fees to the states in order to sell its shares in the states.
legal counsel
<R>
Shearman & Sterling LLP, whose address is 599 Lexington Avenue, New York, New York 10022, is legal counsel to the fund.
</R>
<R>
INDEPENDENT AUDITORS
</R>
<R>
PricewaterhouseCoopers LLP, 250 West Pratt Street, 21st Floor, Baltimore, Maryland 21201, are the in dependent auditors to the funds.
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PAGE 173
<R>
The financial statements of the funds listed below for the period ended May 31, 2003, and the report of independent auditors are included in each fund`s annual report for the period ended May 31, 2003. A copy of each annual report accompanies this Statement of Additional Information. The following financial statements and the report of independent auditors appearing in each annual report for the period ended May 31, 2003, are incorporated into this Statement of Additional Information by reference (references are to page numbers in the reports):
</R>

ANNUAL REPORT REFERENCES:

corporate income

PRIME RESERVE

Financial Highlights, May 31, 2003
11
11
Statement of Net Assets, May 31, 2003
12-24
12-18
Statement of Operations, year ended
May 31, 2003
25
19
Statement of Changes in Net Assets, years
ended May 31, 2003, and May 31, 2002
26
20
Notes to Financial Statements, May 31, 2003
27-32
21-23
Report of Independent Auditors
33
24
<R>
<R>

Inflation
protected BOND

Financial Highlights, period from October 31, 2002 (commencement of operations) through Ma y 31, 2003
11
Statement of Net Assets, May 31, 2003
12-13
Statement of Operations, period from October 31, 2002 (commencement of operations) through May 31, 2003
14
Statement of Changes in Net Assets, period from October 31, 2002 (commencement of operations) through May 31, 2003
15
Notes to Financial Statements, May 31, 2003
16-19
Report of Independent Auditors
20
</R>
</R>
<R>
<R>

GNMA

New Income

short-TERM BOND

Financial Highlights, May 31, 2003
11
13
9
Portfolio of Investments, May 31, 2003
12-14
16-28
10-18

Statement of Assets and Liabilities, May 31, 2003
15
29
19
Statement of Operations, year ended
May 31, 2003
16
30-31
20
Statement of Changes in Net Assets, years
ended May 31, 2003, and May 31, 2002
17
32-33
21
Notes to Financial Statements, May 31, 2003
18-22
34-41
22-27
Report of Independent Auditors
23
42
28
</R>
</R>

<R>
<R>

InSTITUTIONAL
HIGH YIELD

Financial Highlights, period from May 31, 2002 (commencement of operations) through May 31, 2003
10
Portfolio of Investments, May 31, 2003
11-19
Statement of Assets and Liabilities, May 31, 2003
20
Statement of Operations, period from May 31, 2002 (commencement of operations) through May 31, 2003
21
Statement of Changes in Net Assets, period fromMay 31, 2002 (commencement of operations) through May 31, 2003
22
Notes to Financial Statements, May 31, 2003
23-25
Report of Independent Auditors
26
</R>
</R>
<R>

NEW INCOME
FUND—Advisor CLASS

New InCOME
FUND—R CLASS

Financial Highlights, period fromSeptember 30, 2002 (commencement of operations) through May 31, 2003
14
15
Portf olio of Investments, May 31, 2003
16-28
16-28
Statement of Assets and Liabilities,May 31, 2003
29
29
Statement of Operations, year endedMay 31, 2003
30-31
30-31
Statement of Changes in Net Assets, years
ended May 31, 2003, and May 31, 2002
32-33
32-33
Notes to Financial Statements, May 31, 2003
34-41
34-41
Report of Independent Auditors
42
42
</R>
<R>< td style="">47

pERSONAL
STRATEGY
BALANCED

PERSONAL
STRATEGY
GROWTH

PERSONAL
STRATEGY
INCOME

Financial Highlights, May 31, 2003
5
5
5
Portfolio of Investments, May 31, 2003
6-36
—
6-36
Statement of Net Assets, May 31, 2003
—
6-37
—
Statement of Assets and Liabilities, May 31, 2003
37
—
37
Statement of Operations, year ended
May 31, 2003
38
38
38
Statement of Changes in Net Assets, years ended
May 31, 2003, and May 31, 2002
39
39
39
Notes to Financial Statements, May 31, 2003
40-46
40-45
40-45
Report of Independent Auditors
46
46
</R>

PAGE 175
<R>
<R>

High yield

High YielD
Fund—Advisor
class

Financial Highlights, May 31, 2003
15
16
Statement of Net Assets, May 31, 2003
17-35
17-35
Statement of Operations, year ended
May 31, 2003
36-37
36-37
Statement of Changes in Net Assets, years ended
May 31, 2003, and May 31, 2002
38-39
38-39
Notes to Financial Statements, May 31, 2003
40-45
40-45
Report of Independent Auditors
46
46
</R>
</R>
<R>

U.S. TREASURY
INTERMEDIATE

U.S. TREASURY
LONG-TERM

U.S. TREASURY
MONEY

Financial Highlights, May 31, 2003
20
21
19
Statement of Net Assets, May 31, 2003
24-26
27-29
22-23
Statement of Operations, year ended
May 31, 2003
30
30
30
Statement of Changes in Net Assets, years ended
May 31, 2003, and May 31, 2002
32
33
31
Notes to Financial Statements, May 31, 2003
34-38
34-38
34-38
Report of Independent Auditors
39
39
39
</R>
<R>

Reserve
INvestment

Government
Reserve
investment

Financial Highlights, May 31, 2003
11
12
Statement of Net Assets, May 31, 2003
13-20
21-22
Statement of Operations, year ended May 31, 2003
23
23
Statement of Changes in Net Assets, years ended May 31, 2003, and May 31, 2002
24
25
Notes to Financial Statements, May 31, 2003
26-28
26-28
Report of Independent Auditors
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RATINGS OF COMMERCIAL PAPER< /font>
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; am ount 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 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 general ly referred to as "gilt edge."
Aa—Bonds rated Aa are judged to be of high quality by all standards. Together with the Aaa group, they comprise what are generally known as high-grade bonds.
A—Bonds rated A possess many favorable investment attributes and are to be considered as upper medium-grade obligations.
Baa—Bonds rated Baa are considered as medium-grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present, but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.
Ba—Bonds rated Ba are judged to have speculative elements: their futures cannot be considered as well assured. Often the protection of interes t 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 defau lt 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.

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D—In default.
Fitch IBCA, Inc.
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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 an 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 occu r 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.
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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.
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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 degree of speculation. The rating takes into consideration special features of the issue, its relationship to other obligations of the issuer, and the curr ent and prospective financial condition and operating performance of the issuer.
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PART C
OTHER INFORMATION
Item 23. Exhibits
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(a)(1)Articles of Incorporation of Registrant, dated July 1, 1983 (electronically filed with Amendment No. 19 dated April 25, 1994)
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(a)(2)Ar ticles of Amendment, dated April 28, 1976, May 1, 1981, July 1, 1983 (electronically filed with Amendment No. 19 dated April 25, 1994)
(a)(3)Articles Supplementary, dated November 7, 1991 (electronically filed with Amendment No. 19 dated April 25, 1994)
(a)(4)Articles of Amendment, dated October 16, 1998 (electronically filed with Amendment No. 50 dated September 30, 1999)
(a)(5)Articles Supplementary, dated September 6, 2002
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(b)By-Laws of Registrant< font style="font-size:12.0pt;" face="Courier New" color="Black">, as amended November 28, 1973, January 24, 1979, May 1, 1981, January 21, 1982, January 1, 1983, January 21, 1988, April 20, 1990, July 1, 1991, July 20, 1993, January 18, 1994, July 21, 1999, October 16, 2002, and February 5, 2003
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(c)Article SEVENTH, Section I--Issue of the Corporation's Shares and Section II--Redemption and Repurchase of the Corporation's Shares, in their entirety, from the Registrant's Articles of Incorporation, is hereby incorporated by referenced from Amendment No. 19 electronically filed and dated April 25, 1994 and Article II, Stockholders, in its entirety, and Article VIII, Capital Stock, in its entirety, from the Registrant's By-Laws, are also hereby incorporated by reference from Amendment No. 19 electronically filed and dated April 25, 1994
(d)Investment Management Agreement between Registrant and T. Rowe Price Associates, Inc., dated July 1, 1987 (electronically filed with Amendment No. 19 dated April 25, 1994)
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(e)Underwriting Agreement between Registrant and T. Rowe Price Investment Services, Inc., dated May 1, 2003
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(f)Inapplicable

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(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, 2002, July 24, 2002, September 4, 2002, and July 23, 2003
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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, < /font>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
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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, 2003, as amended July 23, 2003
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(h)(2)Agreement between T. Rowe Price Associates, Inc. and T. Rowe Price Funds for Fund Accounting S ervices, dated January 1, 2003, as amended July 23, 2003
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(h)(3)Agreement between T. Rowe Price Retirement Plan Services, Inc. and the T. Rowe Price Funds, dated January 1, 2003, as amended July 23, 2003
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(i)Inapplicable
(j)Other Opinions
(j)(1)Consent of Independent Accountants
(j)(2)Opinion of Counsel
(j)(3)Power of Attorney
(k)Inapplicable
(l)Inapplicable
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(m)(1)Rule 12b-1 Plan for the T. Rowe Price New Income Fund—Advisor Class dated May 1, 2003
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(m)(2)Rule 12b-1 Plan for the T. Rowe Price New Income Fund—R Class dated May 1, 2003
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(m)(3)Form of Selling Agreement to be used by T. Rowe Price Investment Services, Inc. (electronically filed with Amendment No. 28 dated September 4, 2002)
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(n)Rule 18f-3 Plan for the T. Rowe Price New Income Fund—Advis or Class and R Class dated July 24, 2002 (electronically filed with Amendment No. 28 dated September 4, 2002)
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(p)Code of Ethics, dated April 1, 2002
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Item 24. Persons Controlled by or Under Common Control With Registrant
None
Item 25. Indemnification
The Registrant maintains comprehensive Errors and Omissions and Officers and Directors insurance policies written by ICI Mutual. These policies provide coverage for T. Rowe Price Associates, Inc. ("Manager"), and its subsidiaries and affiliates as listed in Item 26 of this Registration Statement (with the exception of the T. Rowe Price Associates Foundation, Inc.), and all other investment companies in the T. Rowe Price family of mutual funds. In addition to the corporate insureds, the policies also cover the officers, directors, and employees of the Manager, its subsidiaries, and affiliates. The premium is allocated among the named corporate insureds in accordance with the provisions of Rule 17d1(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

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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, whethe r 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
(ii)an independent legal counsel in a written opinion.
Section 10.02. Insurance of Officers, Directors, Employees, and Agents. To the f ullest 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 Regis trant 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

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jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Item 26. Business and Other Connections of Investment Manager
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T. Rowe Price Group, Inc. ("Group") owns 100% of the stock of T. Rowe Price Associates, Inc. Group was formed in 2000 as a holding company for the T. Rowe Price affiliated companies.
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T. Rowe Price Associates, Inc. ("Price Associates"), a Maryland corporation organized in 1947, serves as investment adviser to individual and institutional investors, including investment companies. Price Associates is registered as an investment adviser under the Investment Advisers Act of 1940.
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T. Rowe Price Savings Bank ("Savings Bank"), a wholly owned subsidiary of T. Rowe Price Associates, Inc., commenced operations in 2000. The Savings Bank is a federally chartered savings bank, and provides federally insured bank products to a national customer base.
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T. Rowe Price International, Inc., a Maryland corporation, is a wholly owned subsidiary of T. Rowe Price Finance, Inc. T. Rowe Price International, Inc. ("T. Rowe Price International") was incorporated in Maryland in 1979 and provides investment counsel service with respect to foreign securities for institutional investors in the United States. 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, and provides investment advice to the T. Rowe Price Trust Company, trustee of the International Common Trust Fund.
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T. Rowe Price Global Investment Services Limited ("Global Investment Services") is a British corporation, organized in 2000, and a wholly owned subsidiary of T. Rowe Price Group, Inc. Global Investment Services is also regulated by the English Financial Services Authority and provides investment management, sales, and client servicing to non-U.S. institutional and retail investors.
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T. Rowe Price Global Asset Management Limited ("Global Asset Management"), a British corporation, is an SEC registered investment adviser under the Investment Advisers Act of 1940. Global Asset Management is also regulated by the English Financial Services 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
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entered into between Daiwa SB Investments, Ltd. and Global Asset Management or other advisory agreements. Global Asset Management is a wholly owned subsidiary of T. Rowe Price Group, Inc.
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T. Rowe Price Investment Services, Inc. ("Investment Services"), a wholly owned subsidiary of T. Rowe Price Associates, Inc., was incorporated in Maryland in 1980 for the spec ific purpose of acting as principal underwriter and distributor for the registered investment companies which T. Rowe Price Associates, Inc. sponsors and serves as investment adviser (the "Price Funds"). Investment Services also serves as distributor for any proprietary variable annuity products. Investment Services is registered as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. In 1984, Investment Services expanded its activities to include a brokerage service.
TRP Distribution, Inc., a wholly owned subsidiary of Investment Services, was incorporated in Maryland in 1991. It wa s organized for, and engages in, the sale of certain investment related products prepared by Investment Services and T. Rowe Price Retirement Plan Services.
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T. Rowe Price Associates Foundation, Inc. (the "Foundation") was incorporated in 1981 (and is not a subsidiary of T. Rowe Price Associates, Inc.). The Foundation`s overall objective is to improve the quality of life in the community at large by making charitable contributions to nonprofit organizations benefiting education, arts and culture, civ ic and community, and human services interests. In addition to grant making, the Foundation also has a very generous matching gift program whereby contributions and volunteer service its employees give to qualifying organizations of their choice are matched according to established guidelines.
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< div style="text-align:Left;margin-left:0.0pc;margin-right:0.0pc;text-indent:0.0pc;width:100%">T. Rowe Price Services, Inc. ("Price Services"), a wholly owned subsidiary of T. Rowe Price Associates, Inc., was incorporated in Maryland in 1982 and is registered as a transfer agent under the Securities Exchange Act of 1934. Price Services provides transfer agent, dividend disbursing, and certain other services, including shareholder services, to the Price Funds.
T. Rowe Price Retirement Plan Services, Inc. ("RPS"), a wholly owned subsidiary of T. Rowe Price Associates, Inc., was incorporated in Maryland in 1991 and is registered as a transfer agent under the Securities Exchange Act of 1934. RPS provides administrative, recordkeeping, and subaccounting services to administrators of employee benefit plans.

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T. Rowe Price Trust Company ("Trust Company"), a wholly owned subsidiary of T. Rowe Price Associates, Inc., is a Marylandchartered limited-service trust company, organized in 1983 for the purpose of providing fiduciary services. The Trust Company serves as trustee and/or custodian of certain qualified and non qualified employee benefit plans, individual retirement ac counts, and common trust funds.
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T. Rowe Price Investment Technologies, Inc. was incorporated in Maryland in 1996. A wholly owned subsidiary of T. Rowe Price Associates, Inc., it owns the technology rights, hardware, and software of T. Rowe Price Associates, Inc. and affiliated companies and provides technology services to them.
TRPH Corporation, a wholly owned subsidiary of T. Rowe Price Associates, Inc., was organized in 1997 to acquire an interest in a UK-based corporate finance advisory firm.
T. Rowe Price Threshold Fund Associates, Inc., a wholly owned subsidiary of T. Rowe Price Associates, Inc., was incorporated in Maryland in 1994 and serves as the general partner of T. Rowe Price Threshold Fund III, L.P., a Delaware limited partnership.
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T. Rowe Price Threshold Fund III, L.P., a Delaware limited partnership, was organized in 1994 by T. Rowe Price Associates, Inc. and invests in private financings of small companies with high growth potential; T. Rowe Price Threshold Fund Associates, Inc. is the General Partner of the partnership.
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T. Rowe Price Stable Asset Management, Inc. ("Stable Asset Management") was incorporated in Maryland in 1988 as a wholly owned subsidiary of T. Rowe Price Associates, Inc. Stable Asset Management is registered as an investment adviser under the Investment Advisers Act of 1940, and specializes in the management of investment portfolios which seek stable investment returns through the use of guaranteed investment contracts, bank investment contracts, structured investment contracts issued by insurance companies and banks, as well as fixed-income securities.
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T. Rowe Price Recovery Fund Associates, Inc., a Maryland corporation, is a wholly owned subsidiary of T. Rowe Price Associates, Inc. organized in 1988 for the purpose of serving as General Partner of T. Rowe Price Recovery Fund, L.P., a Delaware limited partnership which invests in financially distressed companies.
T. Rowe Pr ice Recovery Fund II Associates, L.L.C., is a Maryland limited liability company (with T. Rowe Price Associates, Inc. and T. Rowe Price Trust Company as its members) organized in

1996 to serve as General Partner of T. Rowe Price Recovery Fund II, L.P., a Delaware limited partnership which also invests in financially distressed companies.
T. Rowe Price (Canada), Inc. ("TRP Canada") is a Maryland corporation organized in 1988 as a wholly owned subsidiary of T. Rowe Price Associates, Inc. This entity is registered as an investment adviser under the Investment Advisers Act of 1940 as well as with the Ontario Securities Commission to provide advisory services to individual and institutional clients residing in Canada.
T. Rowe Price Insurance Agency, Inc., is a wholly owned subsidiary of T. Rowe Price Group, Inc., organized in Maryland in 1994 and licensed to do business in several states to act primarily as a distributor of proprietary variable annuity products.
Since 1983, T. Rowe Price Associates, Inc. has organized several distinct Maryland limited partnerships, which are informally called the Pratt Street Ventures partnerships, for the purpose of acquiring interests in growth-oriented businesses.
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TRP Suburban, Inc., is a Maryland corporation organized in 1990 as a wholly owned subsidiary of T. Rowe Price Associates, Inc. It entered into agreements with McDonogh School and CMANE-McDonogh-Rowe Limited Partnership to construct an office building in Owings Mills, Maryland, which currently houses T. Rowe Price Associates' investment technology personnel.
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TRP Suburban Second, Inc., a wholly owned Maryland subsidiary of T. Rowe Price Associates, Inc., was incorporated in 1995 to primarily engage in the development and ownership of real property located in Owings Mills, Maryland. The corporate campus houses transfer agent, plan administrative services, retirement plan services, and operations support functions.
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TRP Suburban Third, Inc., a wholly owned Maryland subsidiary of T. Rowe Price Associates, Inc., was incorporated in 1999 to primari ly engage in the development and ownership of real property located in Colorado Springs, Colorado.
TRP Finance, Inc., a wholly owned subsidiary of T. Rowe Price Associates, Inc., is a Delaware corporation organized in 1990 to manage certain passive corporate investments and other intangible assets.
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T. Rowe Price Advisory Services, Inc., ("Advisory Services"), a wholly owned subsidiary of T. Rowe Price Group, Inc., was incorporated in Maryland in 2000. Advisory Services is
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registered as an investment adviser under the Investment Advisers Act of 1940, and provides investment advisory services to individuals, including shareholders of the Price Funds.
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Listed below are the directors and executive officers of T. Rowe Price Group, Inc. who have other substantial businesses, professions, vocations, or employment aside from their association with T. Rowe Price Associates, Inc.:
Directors of T. Rowe Price Group, Inc.
D. WILLIAM J. GARRETT, Director of T. Rowe Price Group, I nc. Mr. Garrett was the Group Chief Executive of Robert Fleming Holdings Limited from 1997 until 2000 when the company was acquired by the Chase Manhattan Corporation. He also served as a director of Rowe Price-Fleming International, Inc. (now T. Rowe Price International) from 1981 until 2000. Mr. Garrett`s address is 13 Stanley Crescent, London W11 2NA, England.
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DONALD B. HEBB, JR., Director of T. Rowe Price Group, Inc. Mr. Hebb is the managing general partner of ABS Capital Partners. Mr. Hebb`s address is 400 E. Pratt Street, Suite 910, Baltimore, Maryland 21202.
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RICHARD L. MENSCHEL, Director of T. Rowe Price Grou p, Inc. Mr. Menschel is a senior partner of The Goldman Sachs Group, L.P., an investment banking firm. Mr. Menschel's address is 85 Broad Street, 2nd Floor, New York, New York 10004.
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Dr. Alfred Sommer, Director of T. Rowe Price Group, Inc. Dr. Sommer is dean of the Johns Hopkins Bloomberg School of Public Health and professor of ophthalmology, epidemiology, and international health; Director of the Academy for Educational Development and of Becton Dickinson, a medical technology company; Chairman of the Expert Group on Health of the World Economic Forum's Global Governance Initiative and of the International Vitamin A Consultative Group Steering Committee; and senior medical advisor for Helen Keller International. Dr. Sommer's address is 615 N. Wolfe Street, Room 1041, Baltimore, Maryland 21205.
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ANNE MARIE WHITTEMORE, Director of T. Rowe Price Group, Inc. Mrs. Whittemore is a partner of the law firm of McGuireWoods, L.L.P. and a Director of Owens & Minor, Inc. and Albemarle Corporation. Mrs. Whittemore's address is One James Center, Richmond, Virginia 23219.
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All of the following directors of T. Rowe Price Group, Inc. are employees of T. Rowe Price Associates, Inc.< font style="font-size:12.0pt;" face="Courier New" color="Black">:
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EDWARD C. BERNARD, Director and Vice President of T. Rowe Price Group, Inc. and T. Rowe Price Associates, Inc.; Director and President of T. Rowe Price Insurance Agency, Inc., T. Rowe Price

Investment Services, Inc., and T. Rowe Price Advisory Services, Inc.; Director of T. Rowe Price Services, Inc.; Vice President of TRP Distribution, Inc.; Chairman of the Board and Director of T. Rowe Price Savings Bank.
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JAMES T. BRADY, Director of T. Rowe Price Group, Inc.
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HENRY H. HOPKINS, Director and Vice President of T. Rowe Price Group, Inc., T. Rowe Price (Canada), Inc., T. Rowe Price Investment Services, Inc., T. Rowe Price Recovery Fund Associates, Inc., T. Rowe Price Services, Inc., T. Rowe Price Threshold Fund Associates, Inc., T. Rowe Price Trust Company, TRP Distribution, Inc., and TRPH Corporation; Director of T. Rowe Price Insurance Agency, Inc.; Vice President of T. Rowe Price Associates, Inc., T. Rowe Price Interna tional, Inc., T. Rowe Price Retirement Plan Services, Inc., T. Rowe Price Stable Asset Management, Inc., T. Rowe Price Strategic Partners Associates, Inc., and T. Rowe Price Recovery Fund II Associates, L.L.C.
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JAMES A.C. KENNEDY, Director and Vice President of T. Rowe Price Group, Inc., T. Rowe Price Associates, Inc., and T. Rowe Price Threshold Fund Associates, Inc.; Director and President of T. Rowe Price Strategic Partners Associates, Inc.
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JOHN H. LAPORTE, JR., Director and Vice President of T. Rowe Price Group, Inc.; Vice President of T. Rowe Price Associates, Inc.
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WILLIAM T. REYNOLDS, Director and Vice President of T. Rowe Price Group, Inc. and T. Rowe Price Associates, Inc.; Chairman of the Board and Director of T. Rowe Price Stable Asset Management, Inc.; Director of TRP Finance, Inc< /u>. and T. Rowe Price Global Asset Management Limited; Director and President of T. Rowe Price Recovery Fund Associates, Inc.; President of T. Rowe Price Recovery Fund II Associates, L.L.C.
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JAMES S. RIEPE, Vice-Chairman of the Board, Director, and Vice President of T. Rowe Price Group, Inc.; Director and Vice President of T. Rowe Price Associates, Inc. and T. Rowe Price Stable Asset Management, Inc.; Chairman of the Board, Director, President, and Trust Officer of T. Rowe Price Trust Company; Chairman of the Board and Director of T. Rowe Price (Canada), Inc., T. Rowe Price Global Asset Management Limited, T. Rowe Price Global Investment Services Limited, T. Rowe Price Investment Services, Inc., T. Rowe Price Investment Technologies, Inc., T. Rowe Price Retirement Plan Services, Inc., and T. Rowe Price Services, Inc.; Director of T. Rowe Price International, Inc., T. Rowe Price Insur ance Agency, Inc., TRPH Corporation, and T. Rowe Price Advisory Services, Inc.; and Director and President of TRP Distribution, Inc., TRP Suburban, Inc., TRP Suburban Second, Inc., and TRP Suburban Third, Inc.
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<R>
GEORGE A. ROCHE, Chairman of the Board, Director, and President of T. Rowe Price Group, Inc.; Director and President of T. Rowe Price Associates, Inc.; Chairman of the Board and Director of TRP Finance, Inc.; Director of T. Rowe Price International, Inc., T. Rowe Price Retirement Plan Services, Inc., and T. Rowe Price Strategic Partners Associates, Inc.; Director and Vice President of T. Rowe Price Threshold Fund Assoc iates, Inc., TRP Suburban, Inc., TRP Suburban Second, Inc., and TRP Suburban Third, Inc.
</R>
<R>
BRIAN C. ROGERS, Director and Vice President of T. Rowe Price Group, Inc.; Vice President of T. Rowe Price Associates, Inc. and T. Rowe Price Trust Company.
</R>
<R>
M. DAVID TESTA, Vice-Chairman of the Board, Chief Investment Officer, Director, and Vice President of T. Rowe Price Group, Inc.; Chief Investment Officer, Director, and Vice President of T. Rowe Price Associates, Inc.; Chairman of the Board and Director, T. Rowe Price International, Inc.; Director, T. Rowe Price Global Investment Services Limited, TRPH Corporation, and T. Rowe Price Global Asset Management Limited; Director and President of T. Rowe Price (Canada), Inc.; Director and Vice President of T. Rowe Price Trust Company.
</R>
<R>
</R>
Additional Executive Officers
CRISTINA WASIAK, Chief Financial Officer and Vice President of T. Rowe Price Group, Inc. and T. Rowe Price Associates, Inc.; Director, TRP Finance, Inc< /font>.
Certain directors and officers of T. Rowe Price Group, Inc., and T. Rowe Pric e Associates, Inc. are also officers and/or directors of one or more of the Price Funds and/or one or more of the affiliated entities listed herein.
See also "Management of the Funds," in Registrant's Statement of Additional Information.
Item 27. 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 Fund s, Inc., T. Rowe Price Growth & Income Fund, Inc., T. Rowe Price Tax-Free Short-Intermediate Fund, Inc., T. Rowe Price Short-Term
</R>

<R>
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 TaxFree 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 Pri ce 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 MidCap Growth Fund, Inc., T. Rowe Price SmallCap Stock Fund, Inc., T. Rowe Price TaxFree 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 MidCap Value Fund, Inc., T. Rowe Price Institutional Equity Funds, Inc., T. Rowe Price Financial Services Fund, Inc., T. Rowe Price Diversified SmallCap Growth Fund, Inc., T. Rowe Price TaxEfficient 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., < /font>T. Rowe Price Retirement Funds, Inc., and T. Rowe Price Inflation Protected Bond Fund, Inc.
</R>
<R>
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.
</R>

PAGE 191
(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
Patricia M. Archer
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 Pres ident
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
Laura H. Chasney
Vice President
None
Renee M. Christoff
Vice President
None
Jerome A. Clark
Vice President
None
Joseph A. Crumbling
Vice President
None
Christine S. Fahlund
Vice President None
Laurie L. Fierro
Vice President
None
Forrest R. Foss
Vice President
None
Thomas A. Gannon
Vice President
None
John R. Gilner
Vice 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
David A. Hueser
Vice President
None
Christopher A. Jarmush
Vice President
None
Thomas Kazmierczak, Jr.
Vice President
None
Salvador G. LaBella
Vice President
None
Cynthia W. LaRue
Vice President
None
Steven A. Larson
Vice President
None
Gayle A. Lomax
Vice President
None
Gayatri Malik
Vice President
None
Sarah McCafferty
Vice President
None
Barry Mike
Vice President
None
Mark J. Mitchell
Vice President
None
Nancy M. Morris
Vice President
< font style="font-size:12.0pt;" face="Courier New" color="Black">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
Regina M. Pizzonia
Vice President
None
Kathleen G. Polk
Vice President
None
Pamela D. Preston
Vice President
None
Kylelane Purcell
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
Carole H. Smith
Vice President
None
Scott Such
Vice President
None
Jerome Tuccille
Vice President
None
Natalie C. Widdo wson
Vice President
None
Barbara A. O`Connor
Treasurer
None
Barbara A. Van Horn
Secretary
None
Kimberly B. Andersen
Assistant Vice President
None
Shane Baldino
Assistant Vice President
None
S. Oli via 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
Elizabeth A. Cairns
Assistant Vice President
None
Sheila P. Callahan
Assistant Vice President
None
Patricia M. Cannon
Assistant Vice President
None
Jodi A. Casson
Assistant Vice President
None
Renee L. Chapman
Assistant Vice President
None
Linsley G. Craig
Assistant Vice President
None
Peter A. DeLibro
Assistant Vice President
None
Jon D. Dry
Assistant Vice President
None
Cheryl L. Emory
Assistant Vice President
None
Bruce S. Fulton
Assistant Vice President
None
John A. Galateria
Assistant Vice President
None
Karen L. Glooch
Assistant Vice President
None
Jason L. Gounaris
Assistant Vice President
None
David A.J. Groves
Assistant Vice President
None
Kristen L. Heerema
Assistant Vice President
None
Shawn M. Isaacson
Assistant Vice President
None
Suzanne M. Knoll
Assistant Vice President
None
Jennifer A. LaPorte
Assistant Vice President
None
Patricia B. Lippert
Assistant Vice President
Secretary
Lois Lynch
Assistant Vice President
None
Karen M. Magness
Assistant Vice President
None
Amy L. Marker
Assistant Vice President
None
C. Lillian Matthews
Assistant Vice President
None

Janice D. McCrory
Assistant Vice President
None
Jennifer H. McDonnell
Assistant Vice President
None
John T. McGuigan
Assistant Vice President
None
Daniel M. Middelton
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
JeanneMarie B. Patella
Assistant Vice President
None
Yani A. Peyton
Assistant Vice President
None
Gregory L. Phillips
Assistant Vice President
None
Naomi S. Proshan
Assistant Vice President
None
Jean E. Ramos-Izquierdo
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
Deborah D. Seidel
Assistant Vice President
None
Kevin C. Shea
Assistant Vice President
None
Thomas L. Siedell
Assistant Vice President
None
John A. Stranovsky
Assistant Vice President
None
Robyn S. Thompson
Assistant Vice President
None
Judith B. Ward
Assistant Vice President
None
William R. Weker, Jr.
Assistant Vice President
None
Mary G. Williams
Assistant Vice President
None
Timothy R. Yee
Assistant Vice President
None
James Zurad
Assistant Vice President
None
</R>

PAGE 193
(c)Not applicable. Investment Services will not receive any compensation with respect to its activities as underwriter for the Price Funds.
Item 28. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by the Registrant under Section 31(a) of the Investment Company Act of 1940 and the rules thereunder will be maintained by the Registrant at its offices at 100 East Pratt Street, Baltimore, Maryland 21202. Transfer, dividend disbursing, and shareholder service activities are performed by T. Rowe Price Services, Inc., at 4515 Painters Mill Road, Owings Mills, Maryland 21117. Custodian activities for the Registrant are performed at State Street Bank and Trust Company's Service Center (State Street South), 1776 Heritage Drive, Quincy, Massachusetts 02171.

Custody of Registrant`s portfolio securities which are purchased outside the United States is maintained by 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.
Item 29. Management Services
Registrant is not a party to any managementrelated service contract, other than as set forth in the Prospectus or Statement of Additional Information.
Item 3 0. Undertakings
(a)Not applicable

PAGE 195
<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 September 26, 2003.
</R>
T. Rowe Price New Income Fund, Inc.
/s/James S. Riepe
By:James S. Riepe
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated:
SignatureTitleDate
<R>
/s/James S. RiepeChairman of the BoardSeptember 26, 2003
</R>
<R>
James S. Riepe(Chief Executive Officer)
</R>
<R>
</R>
<R>
/s/Joseph A. CarrierTreasurer (ChiefSeptember 26, 2003
</R>
Joseph A. CarrierFinancial Officer)
<R>
</R>
<R>
*DirectorSeptember 26, 2003
</R>
Anthony W. Deering
<R>
*DirectorSeptember 26, 2003
</R>
Donald W. Dick, Jr.
<R>
*DirectorSeptember 26, 2003
</R>
David K. Fagin
<R>
*DirectorSeptember 26, 2003
</R>
F. Pierce Linaweaver
<R>
/s/William T. ReynoldsDirectorSeptember 26, 2003
</R>
<R>
William T. Reynolds
</R>
<R>
</R>
<R>
*DirectorSeptember 26, 2003
</R>
John G. Schreiber
<R>
/s/M. David TestaDirectorSeptember 26, 2003
</R>
M. David Testa
<R>
*DirectorSeptember 26, 2003
</R>
Hubert D. Vos

<R>
*DirectorSeptember 26, 2003
</R>
Paul M. Wythes
<R>
*/s/Henry H. HopkinsVice President andSeptember 26, 2003
</R>
Henry H. HopkinsAttorneyInFact
EX-99.B BYLAWS 3 bylawsnif.htm
BY-LAWS
OF
T. ROWE PRICE NEW INCOME FUND, INC.
AS AMENDED:
NOVEMBER 28, 1973
JANUARY 24, 1979
MAY 1, 1981
JANUARY 21, 1982
JANUARY 1, 1983
JANUARY 21, 1988
APRIL 20, 1990
JULY 1, 1991
JULY 20, 1993
JANUARY 18, 1994
JULY 21, 1999
OCTOBER 16, 2002
FEBRUARY 5, 2003

TABLE OF CONTENTS
Page
ARTICLE I.NAME OF CORPORATION, LOCATION OF OFFICES
AND SEAL1
1.01.Name1
1.02.Principal Offices1
1.03.Seal1
ARTICLE II.STOCKHOLDERS1
2.01.Annual Meetings1
2.02.Special Meetings2
2.03.Place of Meetings2
2.04.Notice of Meetings2
2.05.Voting - In General3
2.06.Stockholders Entitled to Vote3
2.07.Voting - Proxies3
2.08.Quorum3
2.09.Absence of Quorum3
2.10.Stock Ledger and List of Stockholders4
ARTICLE III.BOARD OF DIRECTORS4
3.01.Number and Term of Office4
3.02.Qualification of Directors4
3.03.Election of Directors5
3.04.Removal of Directors5
3.05.Vacancies and Newly Created Directorships5
3.06.General Powers5
3.07.Power to Issue and Sell Stock6
3.08.Power to Declare Dividends6
3.09.Annual and Regular Meetings6
3.10.Special Meetings7
3.11.Notice7
3.12.Waiver of Notice7
3.13.Quorum and Voting7
3.14.Conference Telephone7
3.15.Compensation7
3.16.Action Without a Meeting7
3.17.Director Emeritus7
- i -

ARTICLE IV.EXECUTIVE COMMITTEE AND OTHER COMMITTEES8
4.01.How Constituted8
4.02.Powers of the Executive Committee8
4.03.Other Committees of the Board of Directors8
4.04.Proceedings, Quorum and Manner of Acting8
4.05.Other Committees8
ARTICLE V.OFFICERS9
5.01.General9
5.02.Election, Term of Office and Qualifications9
5.03.Resignation9
5.04.Removal9
5.05.Vacancies and Newly Created Offices9
5.06.Chairman of the Board9
5.07.President10
5.08.Vice President10
5.09.Treasurer and Assistant Treasurers10
5.10.Secretary and Assistant Secretaries11
5.11.Subordinate Officers11
< /font>5.12.Remuneration11
ARTICLE VI.CUSTODY OF SECURITIES AND CASH11
6.01.Employment of a Custodian11
6.02.Central Certificate Service11
6.03.Cash Assets12
6.04.Free Cash Accounts12
6.05.Action Upon Termination of Custodian Agreement12
ARTICLE VII.EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES12
7.01.Execution of Instruments12
7.02.Voting of Securities12
ARTICLE VIII.CAPITAL STOCK13
8.01.Ownership of Shares13
8.02.Transfer of Capital Stock13
8.03.Transfer Agents and Registrars13
8.04.Transfer Regulations14
- ii -

8.05.Fixing of Record Date14
8.06.Lost, Stolen or Destroyed Certificates14
ARTICLE IX.FISCAL YEAR, ACCOUNTANT14
9.01.Fiscal Year14
9.02.Accountants15
ARTICLE X.INDEMNIFICATION AND INSURANCE15
10.01.Indemnification and Payment of Expenses in Advance15
10.02.Insurance of Officers, Directors, Employees and Agents17
ARTICLE XI.AMENDMENTS17
11.01.General17
11.02.By Stockholders Only17
ARTICLE XII.MISCELLANEOUS18
12.01Use of the Term "Annual Meeting"18
- iii -

T. ROWE PRICE NEW INCOME FUND, 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 NEW INCOME FUND, INC.
(Section 1.01. Name, as amended May 1, 1981)
Section 1.02.Principal Offices: The principal office of the Corp oration 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 without the State of Maryland, as the Board of Directors may from time to time determine. [ MGCL, xa4 xa4 8, 9(a)(4) ]
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 othe rwise reproduced. 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, xa4 9(a)(3) ]
ARTICLE II
STOCKHOLDERS
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
1

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 2.01. Annual Meetings, as amended April 20, 1990)
Section 2.02.Special Meetings: Special meetings of the shareholders may be called at any time b y 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 July 20, 1993 and February 5, 2003)
Section 2.03.Place of Meetings: All stockholders` 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, xa4 38(a) ]
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) ]
- 2 -

(Section 2.04. Notice of Meetings, as amended July 21, 1999)
Section 2.05.Voting - In General: At e very stockholders` meeting each stockholder shall be entitled to one vote for each share of stock of the Corporation validly issued and outstanding and held by such stockholder, 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 United States Investment Company Act, as amended from time to time, all matters shall be decided by a vote of the majority of the votes cast. 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, xa4 xa4 42(a), 43 ]
Section 2.06.Stockholders Entitled to Vote: If, pursuant to Section 8.05 hereof, a record date has been fixed for the determination of stockholders entitled to notice of or to vote at any stockholders` meeting, each stockholder of the Corporation shall be entitled to vote, in person or by proxy, each share or fraction of a share of stock standing in his name on the books of the Corporation on such record date and outstanding at the time of the meeting. If no record date has been fixed for the determination of stockholders, the record date for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day on which notice of the meeting is mailed or the day 30 days before the meeting, whichever is the closer date to the meeting, or, if notice is waived by all stockholders, at the close of business on the tenth day next preceding the day on which the meeting is held. [ MGCL, xa4 40 ]
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 pe rson 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 authorizatio n 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 stockholders` meeting, in person or by proxy, of stockholders entitled to cast a majority of the votes thereat shall be necessary and sufficient to constitute a quorum for the transaction of business. [ MGCL, xa4 41 ]
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 stockholder entitled to vote is present thereat in person or by proxy, any officer present thereat
3

entitled to preside 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 Stockholders: 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 stockholders and the number of shares of each class held by each stockholder. 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, each of whom has been a stockholder of record of the Corporation for more than six months next preceding such request, who owns in the aggregate 5% or more 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 in Maryland) a written request to any officer of the Corporation or its resident agent in Maryland for a list of the stockholders of the Corporation. Within 20 days after such a request, there shall be prepared and filed at the Corporation`s principal office in Maryland a list containing the names and addresses of all stockholders of the Corporation and the number of shares of each class held by each stockholder, certified as correct by any officer of the Corporation, by its stock transfer agent, or by its registrar. [ MGCL, xa4 xa4 50, 51 ]
ARTICLE III
BOARD OF DIRECTORS
Section 3.01.Number and Term of Office: The Board of Directors shall consist of seven Directors, which number may be increased or decreased by a resolution of a majority of the entire Board of Directors, provided that the n umber of Directors shall not be less than three nor more than 15. Each Director (whenever elected) shall hold office until the next annual meeting of stockholders or until his successor is elected and qualifies or until his earlier death, resignation or removal. [ MGCL, xa4 53 ]
Section 3.02.Qualification of Directors: No member of the Board of Directors need be a stockholder 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 1940, as amended) of the investment adviser of the Corporation nor an officer or employee of the Corporation. [ Investment Company Act, xa4 10(d) ]
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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 majority of the shares present in person or by proxy and entitled to vote thereon. [ MGCL, Section 2-404 ]
(Section 3.03. Election of Directors, as amended January 21, 1988)
Section 3.04.Removal of Directors: At any meeting of stockholders, duly called and at which a quorum is present, the stockholders may, by the affirmative vote of the holders of a majority of the votes entitled to be cast thereon, remove any Director or Directors from office, 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, xa4 52 ]
Section 3.05.Vacancies and Newly Created Directorships: If any vacancies shall occur in the Board of Directors by reason of resignation, removal or otherwise, or if the author ized number of Directors shall be increased, the Directors then in office shall continue to act, and such vacancies (if not previously filled by the stockholders) may be filled by a majority of the Directors then in office, whether or not 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 stockholders of the Corporation. In the event that at any time, other than the time preceding the first meeting of stockholders, less than a majority of the Directors of the Corporation holding office at that time were so elected by the stockholders, a meeting of the stockholders shall be held promptly and in any event within 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 u ntil the next annual meeting of stockholders or until his successor is elected and qualifies. [ MGCL, xa4 54, Investment Company Act, xa4 16(a) ]
Section 3.06.General Powers:
(a)The property, affairs and business of the Corporation shall be managed by 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 stockholders of the Corporation. [ MGCL, xa4 52(a) ]
(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 Corp oration.
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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 fix the consideration or minimum consideration for whi ch such shares are to be issued, or a formula or method pursuant to which such consideration is to be fixed and determined, and shall include a fair description of any consideration other than money and a statement of the actual value of such consideration as then determined in the opinion of the Board of Directors or a statement that in the opinion of the Board of Directors such consideration is or will be not less than a stated sum. [ MGCL, xa4 20(c) ]
Section 3.08.Power to Declare Dividends:
(a)The Board of Directors, from time to time as they may deem advisable, may declare and the Corporation pay dividends, in cash, property or shares of the Corporation available for dividends, to the stockholders according to their respective rights and interests. [ MGCL, xa4 37 ]
(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 g ood 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, xa4 19; SEC Rule 19a-1; MGCL, xa4 37 ]
(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 stockholders 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, xa4 37 ]
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 immediately after the annual shareholders` meeting at such 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 hol ding of regular meetings and fix their time and place (within or outside the State of Maryland). [ MGCL, Section 2-409(a) ]
(Section 3.09. Annual and Regular Meetings, as amended J anuary 21, 1988)
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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 Maryl and) specified in the respective notices or waivers of notice of such meetings.
Section 3.11.Notice: Notice of annual, regular, and special meetings, stating the time and place, 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 days before the day on which the meeting is to be held. Such notice need not include a statement of the business to be transacted at, or the purpose of, the meeting. [ MGCL, xa4 56(b) ]
Section 3.12.Waiver of Notice: No notice of any meeting need be given to any Director who attends such meeting in person or to any Director who waives notice of such meeting in writing (which waiver shall be filed with the records of such meeting), whether before or after the holding of the meeting. [ MGCL, xa4 46 ]
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 Directors, shall constitute a quorum for the transaction of business. In the absence of a quorum, a majority of the Directors present may adjourn the meeting, from time to time, until a quorum shall be present. The action of a majority of the Directors present at a meeting at which a quorum is present shall be the action of the Board of Directors unless the concurrence of a greater proportion is required for such action by law, by the Articles of Incorporation or by these By-Laws. [ MGCL, xa4 56 ]
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 by means of which 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, xa4 56(e) ]
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 written consent thereto 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, xa4 58 ]
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
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materials normally provided Directors relating to the Corporation. The Board of Directors may establish such compensation as it may deem appropriate under the circumstances to be paid by the Fund to a Director Emeritus.
(Section 3.17. Director Emeritus, as a mended January 24, 1979)
ARTICLE IV
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 4.01.How Constituted: By resolution adopted by the Board of Directors the Board may appoint from among its members one or more committees, including an Executive Committee, each consisting of at least two Directors. Each member of a committee shall hold office du ring the pleasure of the Board. The President shall be a member of the Executive Committee. [ MGCL, xa4 59 ]
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 in the management of the business and affairs of the Corporation except the power to declare a dividend, to issue stock, or to recommend to stockholders any action requiring stockholders` approval. [ MGCL, xa4 59 ]
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, xa4 59 ]
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 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, xa4 59 ]
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.
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ARTICLE V
OFFICERS
Section 5.01 .General: The officers of the Corporation shall be a President, one or more Vice Presidents, a Secretary, and a Treasurer, and may include 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. [&# 160;MGCL, xa4 60(a) ]
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 and the President shall be selected from among the Directors of the Corporation and may hold such offices only so long as they continue to be Directors. No other officer need be a Director. [ MGCL, Sections 2-413, 2-415 ]
(Section 5.02. Election, Term of Office and Qualifications, as amended January 21, 1988)
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 Board`s judgment the best interests of the Corporation will be served thereby.
Section 5.05Vacancies 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, xa4 60 ]
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. Subject to the supervision of the Board of Directors, he
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shall have general charge of the business, affairs, property, and operation of the Corporation and its officers, employees, and agents. He 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 5.06. Chairman of the Board, as amended October 16, 2002)
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, preside at all stockholders` 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. 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. [ MGCL, xa4 60 ]
(Section 5.07. President, as amended October 16, 2002)
Section 5.08.Vice President: The Board of Directors shall, from time to time, designate and elect one or more Vice Presidents 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, then the Vice President (or, if there are two or more Vice Presidents, then the senior of the Vice Presidents pr esent and able to act) 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. [ MGCL, xa4 60 ]
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 < font style="font-size:12.0pt;" face="Times New Roman" color="Black">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 possib le 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 stockholders and filed within 20 days thereafter at the principal office of the Corporation in the State of Maryland. He shall perform all the acts incidental to the office of Treasurer, subj ect 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. [ MGCL, xa4 49(b) ]
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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 stockholders and Directors in one or more books to be kept for that purpose. He shall keep in safe custody the seal of the Corporat ion 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. [ MGCL, xa4 60 ]
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 officer s 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, xa4 60(a) ]
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 maintain its securities and similar investments in the custody of a bank or banks, each having an aggregate capital, surplus and undivided profits of not less than $10,000,000. Each such custodian bank shall be appointed and its remuneration fixed by the Board of Directors. [ Investment Company Act, xa4 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
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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, xa4 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 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 of 1940 and rules and regulations thereunder, covering the officers or employees authorized to draw on such account or accounts. [ Investment Company Act, xa4 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: Upo n 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 stockholders 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 d rafts 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
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proxies to vote, at any meeting of stockholders 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, xa4 44( a) ]
ARTICLE VIII
CAPITAL STOCK
Section 8.01.Ownership of Shares:
(a)Certificates certifying the ownership of shares of the Corporation will not be issued for shares purchased or otherwise acquired after July 1, 1991. The ownership of shares, full or fractional, shall be recorded on the books of the Corporation or its agent. The record books of the Corporation as kept by the Corporation or its agent, as the case may be, shall be conclusive as to the number of shares held from time to time by each such shareholder. The Corporation reserves the right to require the surrender of outstanding certificates if the Board of Directors so determines. [ MGCL, Section 2-210(c) ]
(b)Every certificate exchanged, surrendered for redemption or otherwise returned to the Corporation shall be marked "Cancelled" with the date of cancellation.
(Section 8.01. Ownership of Shares, as amended July 1, 1991)
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 pr ovided by the statutes of the State of Maryland.
Section 8.03.Transfer Agents and Registrars: The Board of Directors may, from time to time, appoint or remove transfer agents and registrars of transfers of shares of stock of the Corporation, and it may appoint the same person as both transfer agent and registrar.
(Section 8.03. Transfer Agents and Registrars, as amended July 1, 1991)
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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 stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournmen t thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of stock, or for any other proper purpose, provided that such record date shall be a date not more than 60 days nor, in the case of a meeting of stockholders, less than 10 days prior to the date on which the particular action, requiring such det ermination of stockholders, is to be taken. In such case, only such stockholders as shall be stockholders of record on the record date so fixed shall be entitled to such notice of, and to vote at, such meeting or adjournment, or to give such consent, or to receive payment of such dividend or other distribution, or to receive such allotment of rights, or to exercise such rights, or to take other action, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after any such record date. [ MGCL, xa4 40 ]
Section 8.06.Lost, Stolen or Destroyed Certificates: If a certificate for stock of the Corporation is alleged to have been lost, stolen or destroyed, no new certificate will be issued. Instead, ownership of the shares formerly represented by the lost, stolen or destroyed certificate shall be recorded on the books of the Corporation or its agent, in accordance with the provisions of Section 8.01 of these By-Laws. Before recording ownership of such shares, the Board of Directors, or any officer authorized by the Board, may, in its discretion, require the owner of the lost, stolen, or any 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 of 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. [ MGCL, Section 2-213 ]
(Section 8.06. Lost, Stolen or Destroyed Certificates, as amended July 1, 1991)
ARTICLE IX
FISCAL YEAR, ACCOUNTANT
Section 9.01.Fiscal Year: The fiscal year of the Corporation shall be the twelve (12) calendar months beginning on the 1st day of June in each year and ending on the last day of the following May, 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 November 28, 1973,
January 1, 1983, and January 18, 1994)
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Section 9.02.Accountants:
(a)The Corporation shall employ an independent public accountant or firm of independent public accountants as its accountant to examine the accounts of the Corporation and to sign and certify financial statements filed by the Corporation. The accountant`s certificates and reports shall be addressed both to the Board of Directors and to the stockholders.
(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 1940, as amended) of the Corporation shall select the accountant, by vote cast in person, at any meeting held before the first annual stockholders meeting, and thereafter shall select the accountant annually, by vote cast in person, at a meeting held within 30 d ays before or after the beginning of the fiscal year of the Corporation or 30 days before the annual stockholders` meeting in that year. Such selection shall be submitted for ratification or rejection at the next succeeding annual stockholders` meeting. If such meeting shall reject such selection, the accountant shall be selected by majority vote of the Corporation`s outstanding voting securities, either at the meeting at which the rejection occurred or at a subsequent meeting of stockholders called for the purpose.
(c)Any vacancy occurring between annual meetings, due to the death or resignation of the accountant, 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 shall be conditioned upon the right of the Corporation by vote of a majority of the outstanding voting securities at any meeting called for the purpose to terminate such employment forthwith without any penalty. [ Investment Company Act, xa4 32(a) ]
ARTICLE X
INDEMNIFICATION AND INSURANCE
Section 10.01.Indemnification and Payment of Expenses in Advance: The Corporation sha ll indemnify any individual ("Indemnitee") who is a present or former director, officer, employee, or agent of the Corporation, or who is or has been serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, who, by reason of his position was, is, or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (hereinafter collectively referred to as a "Proceeding") against any judgments, penalties, fines, settlements, and reasonable expenses (including attorneys` fees) incurred by such Indemnitee in connection with any Proceeding, to the fullest extent that such indemnification may be lawful under applicable Maryland law, as from time to time amended. The Corporation shall pay any reasonable expenses so incurred by such Indemnitee in defending a
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Proceeding in advance of the final disposition thereof to the fullest extent that such advance payment may be lawful under applicable Maryland law, as from time to time amended. Subject to any applicable limitations and requirements set forth in the Corporation`s Articles of Incorporation and in these By-Laws, any payment of indemnification or advance of expenses shall be made in accordance with the procedures set forth in applicable Maryland law, as from time to time amended.
Notwithstanding the foregoing, nothing herein shall protect or purport to protect any Indemnitee against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office ("Disabling Conduct").

Anything in this Article X to the contrary notwithstanding, no indemnification shall be made by the Corporation to any Indemnitee unless:
(a)there is a final decision on the merits by a court or other body before whom the Proceeding was brought that the Indemnitee was not liable by reason of Disabling Conduct; or
(b)in the absence of such a decision, there is a reasonable determination, based upon a r eview 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 pers ons" of the Corporation, as defined in Section 2(a)(19) of the Investment Company Act of 1940, nor parties to the Proceeding; or
(ii)an independent legal counsel in a written opinion.
Anything in this Article X to the contrary notwithstanding, any advance of expenses by the Corporation to any Indemnitee shall be made only upon the undertaking by such Indemnitee to repay the advance unless it is ultimately determined that such Indemnitee is entitled to indemnification as above provided, and only if one of the following conditions is met:
(a)the Indemnitee provides a security for his undertaking; or
(b)the Corporation shall be insured against losses arising by reason of any lawful advances; or
(c)there is a determination, based on a review of readily available facts, that there is reason to believe that the Indemnitee will ultimately be found entitled to indemnification, which determination shall be made by:
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(i)a majority of a quorum of directors who are neither "interested persons" of the Corporation as defined in Section 2(a)(19) of the Investment Company Act of 1940, nor parties to the Proceeding; or
(ii)an independent legal counsel in a written opinion.
Section 10.02.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 corp oration, partnership, joint venture, trust, or other enterprise, against any liability asserted against him and incurred by him in or arising out of his position, whether or not the Corporation would have the power to indemnify him against such liability. [ MGCL, Section 2-418(k) ]
(ARTICLE X, as amended January 21, 1982)
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 stockholders, 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 o r 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 Stockholders Only:
(a)No amendment of any section of these By-Laws shall be made except by the stockholders of the Corporation if the stockholders shall have provided in the By-Laws that such section may not be amended, altered, or repealed except by the stockholders.
17

(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 stockholders of the Corporation.
ARTICLE XII
MISCELLANEOUS
Section 1 2.01.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.
(ARTICLE XII, MISCELLANEOUS, added January 21, 1988)
agmts/BYLAWS.NIF
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EX-99.E UNDR CONTR 4 undernia.htm
UNDERWRITING AGREEMENT
BETWEEN
T. ROWE PRICE NEW INCOME FUND, INC.
AND
T. ROWE PRICE INVESTMENT SERVICES, INC.
THIS UNDERWRITING AGREEMENT, made as of the 1st day of May 2003, by and between T. ROWE PRICE NEW INCOME FUND, INC., a corporation organized and existing under the laws of the State of Maryland (hereinafter called the "Fund"), and T. ROWE PRICE INVESTMENT SERVICES, INC., a corporation organized and existing under the laws of the State of Maryland (hereinafter called the "Distributor").
WITNESSETH:
WHEREAS, the Fund proposes to engage in business as an open-end management investment company and to register as such under the federal Investment Company Act of 1940, as amended ("ICA-40"); and
WHEREAS, the shares of the Fund`s capital stock may be divided into classes (all such shares being referred to herein as "Shares") and the Fund currently is authorized to offer more than one class of Shares; and
WHEREAS, th e Distributor is engaged principally in the business of distributing shares of the investment companies sponsored and managed by either T. Rowe Price Associates, Inc. ("Price Associates") or T. Rowe Price International, Inc. ("Price International") and is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, ("SEA-34") and is a member of the National Association of Securities Dealers, Inc. ("NASD"); and
< div style="margin-left:0.0";margin-right:0.0";text-indent:0.0";width:100%">WHEREAS, the Fund desires the Distributor to act as the distributor in the public offering of its shares; and
WHEREAS, the Fund has adopted one or more plans pursuant to Rule 12b-1 under the ICA-40 (the "Plan") with respect to one or more classes of Shares (the "12b-1 Shares") authorizing payments by the Fund to the Distributor or others with respect to the distribution and/or provision of shareholder and administrative services with respect to such 12b-1 Shares;
NOW, THEREFORE, in consideration of the premises and the mutual promises hereinafter set forth, the parties hereto agree as follows:
1

1.Delivery of Fund Documents. The Fund has furnished Distributor with copies, properly certified or authenticated, of each of the following:
(a)Articles of Incorporation, dated July 1, 1983, as amended.
(b)By-Laws of the Fund as in effect on the date hereof.
(c)Resolutions of the Board of Directors of the Fund selecting Distributor as principal underwriter and approving this form of agreement.
The Fund shall furnish the Distributor from time to time with copies, properly certified or authenticated, of all the amendments of, or supplements to, the foregoing, if any.
The Fund shall furnish Distributor promptly with properly certified or authenticated copies of any registration statements filed by it with the Securities and Exchange Commission ("SEC") und er the Securities Act of 1933, as amended ("SA-33") or ICA-40, together with any financial statements and exhibits included therein, and all amendments or supplements thereto hereafter filed.
2.Sale of Shares. Subject to the provisions of Paragraphs 3, 4, and 6 hereof, and to such minimum purchase requirements as may from time to time be currently indicated in the Fund`s prospectus, the Distributor is authorized to sell, as agent on behalf of the Fund, Shares authorized for issuance and registered under SA-33. Distributor may also sell Shares under offers of exchange between and among the investment companies for which Price Associates and/or Price International act as investment advisers ("Price Funds"). Distributor may also purchase as principal such Shares for resale to the public. Such sale will be made by Distributor on behalf of the Funds by accepting unconditional orders to purchase the Shares placed with Distributor by investors or by selected dealers and such purchases will be made by Distributor only after acceptance by Distributor of such orders. The sales price to the public of such Shares shall be the public offering price as defined in Paragraph 5 hereof.
The Distributor shall have the right to enter into selected dealer agreements with registere d and qualified securities dealers and other financial institutions of its choice for the sale of Shares, provided that the Fund shall approve the forms of such agreements. Within the United States, the Distributor shall offer and sell Shares only to such selected dealers as are members in good standing of the NASD or are institutions exempt from registration under applicable federal securities laws. Shares sold to selected dealers shall be for resale by such dealers only at the public offering price as defined in Paragraph 5 hereof.
3.Sale of Shares by the Fund. The rights granted to the Distributor shall be nonexclusive in that the Fund reserves the right to sell its Shares to investors pursuant to applications received and accepted by the Fund or its transfer agent. Further, the Fund reserves the right to issue Shares in connection with the merger or consolidation of any other investment company, trust or personal holding company with the Fund or the Fund`s acquisition by the purchase or otherwise, of all or substantially all of the assets of an investment company, trust or personal holding company. Any right granted to Distributor to accept orders for Shares, or to make sales on behalf of the Fund or to purchase Shares for resale, will not apply to Shares issued in connection with the merger or

consolidation of any other investment company with the Fund or its acquisition by purchase or otherwise, of all or substantially all of the assets of any investment company, trust or personal holding company, or substantially all of the outstanding shares or interests of any such entity, and such right shall not apply to Shares that may be offered by the Fund to shareholders by virtue of their being shareholders of the Fund.
4.Shares Covered by this Agreement. This Agreement relates to the issuance and sale of Shares that are duly authorized, registered, and available for sale by the Fund, including redeemed or repurchased Shares if and to the extent that they may be legally sold and if, but only if, the Fund authorizes the Distributor to sell them.< /font>
5.Public Offering Price. All Shares sold by the Distributor pursuant to this Agreement shall be sold at the public offering price. The public offering price for all accepted subscriptions will be the net asset value per share, as determined in the manner provided in the Fund`s Articles of Incorporation, as now in effect, or as they may be amended (and as reflected in the Fund`s then current prospectus), next determined after the order is accepted by the Distributor. The Distributor will process orders submitted by brokers for the sale of Shares at the public offering price exclusive of any commission charged by such broker to his customer.
6.Suspension of Sales. If and whenever the determination of net asset value is suspended and until such suspension is terminated, no further orders for Shares shall be accepted by the Distributor except such unconditional orders placed with the Distributor before it had knowledge of the suspension. In addition, the Fund reserves the right to suspend sales and Distributor's authority to accept orders for Shares on behalf of the Fund if, in the judgment of the Board of Directors of the Fund, it is in the best interests of the Fund to do so, such suspension to continue for such period as may be determined by the Board of Directors of the Fund; and in that event, no orders to purchase Shares shall be processed or accepted by the Distributor on behalf of the Fund while such suspension remains in effect except for Shares necessary to cover unconditional orders accepted by Distributor before it had knowledge of the suspension, unless otherwise directed by the Board of Directors of the Fund.
7.Solicitation of Orders. In consideration of the rights granted to the Distributor under this Agreement, Distributor will use its best efforts (but only in states in which Distributor may lawfully do so) to obtain from investors unconditional orders for Shares authorized for issuance by the Fund and registered under SA-33, provided that Distributor may in its discretion reject any order to purchase Shares. This does not obligate the Distributor to register or maintain its registration as a broker or dealer under the state securities laws of any jurisdiction if, in the discretion of the Distributor, such registration is not practical or feasible. The Fund shall make available to the Distributor at the expense of the Distributor such number of copies of the Fund`s currently effective prospectus as the Distributor may reasonably request. The Fund shall furnish to the Distrib utor copies of all information, financial statements and other papers which the Distributor may reasonably request for use in connection with the distribution of Shares.
8.Authorized Representations. The Fund is not authorized by the Distributor to give, on behalf of the Distributor, any information or to make any representations other than the information and representations contained in a registration statement or prospectus filed with the
3

SEC under SA-33 and/or ICA-40, covering Shares, as such registration statement and prospectus may be amended or supplemented from time to time.
Neither Distributor nor any selected dealer nor any other person is authorized by the Fund to give on behalf of the Fund any information or to make any representations in connection with the sale of Shares other than the information and representations contained in a registration statement or prospectus filed with the SEC under SA-33 and/or ICA-40, covering Shares, as such registration statement and prospectus may be amended or supplemented from time to time, or contained in shareholder reports or other material that may be prepared by or on behalf of the Fund. This shall not be construed to prevent the Distributor from preparing and distributing tombstone ads and sales literature or other material as it may deem appropriate. No person other than Distributor is authorized to act as principal underwriter (as such term is defined in ICA-40, as amended) for the Fund.
9.Registration and Sale of Additional Shares. The Fund will, from time to time, use its best effort s to register under SA-33, such Shares of the Fund as Distributor may reasonably be expected to sell on behalf of the Fund. In connection therewith, the Fund hereby agrees to register an indefinite number of Shares pursuant to Rule 24f-2 under ICA-40, as amended. The Fund will, in cooperation with the Distributor, take such action as may be necessary from time to time to qualify such Shares (so registered or otherwise qualified for sale under SA-33), in any state mutually agreeable to the Distributor and the Fund, and to maintain such qualification.
10.Expenses. The Fund shall pay all fees and expenses:
a.in connection with the preparation, setting in type and filing of any registration statement and prospectus under SA-33 and/or ICA-40, and any amendments or supplements that may be made from time to time;
b.in connection with the registration and qualification of Shares for sale in the various states in which the Fund shall determine it advisable to qualify such Shares for sale. (Including registering the Fund as a broker or dealer or any officer of the Fund or other person as agent or salesman of the Fund in any state.);
c.of preparing, setting in type, printing and mailing any report or other communication to shareholders of the Fund in their capacity as such;
d.of preparing, setting in type, printing and mailing prospectuses annually to existing shareholders;
e.in connection with the issue and transfer of Shares resulting from the acceptance by Distributor of orders to purchase Shares placed with the Distributor by investors, including the expenses of confirming such purchase orders; and
f.of any issue taxes or (in the case of Shares redeemed) any initial transfer taxes.

The Distributor shall pay (or will enter into arrangements providing that persons other than Distributor shall pay) all fees and expenses:
a.of printing and distributing any prospectuses or reports prepared for its use in connection with the distribution of Shares to the public;
b.of preparing, setting in type, printing and mailing any other literature used by the Distributor in connection with the distri bution of the Shares to the public;
c.of advertising in connection with the distribution of such Shares to the public;
d.incurred in connection with its registration as a broker or dealer or the registration or qualification of its officers, directors or representatives under federal and state laws; and
e.incurred in connection with the sale and offering for sale of Shares which have not been herein specifically allocated to the Fund.
11.Payment of the Distributor Under the Plan.
a.The Fund shall pay fees to the Distributor, or to such persons as the Fund or Distributor may direct, for distribution, shareholder and/or administrative servicing expenses with respect to the Fund`s 12b-1 Shares. Such fees shall be paid under the Plan(s) adopted by the Fund and thi s Agreement.
b.So long as any such Plan or any amendment thereto is in effect, the Distributor shall inform the Board of the distribution expenses and shareholder and administrative servicing expenses incurred with respect to the 12b-1 Shares by the Distributor. So long as any such < /font>Plan (or any amendment thereto) is in effect, at the request of the Board or any agent or representative of the Fund, the Distributor shall provide such additional information as may reasonably be requested concerning the activities of the Distributor hereunder and the costs incurred in performing such activities with respect to the 12b-1 Shares.
12.Conformity With Law. Distributor agrees that in selling Shares it shall duly conform in all respects with the laws of the United States and any state in which such Shares may be offered for sale by Distributor pursuant to this Agreement and to the rules and regulations of the NASD.
13.Independent Contractor. Distributor shall be an independent contractor and neither Distributor, nor any of its officers, directors, employees, or representatives is or shall be an employee of the Fund in the performance of Distributor`s duties hereunder. Distributor shall be responsible for its own conduct and the employment, control, and conduct of its agents and employees and for injury to such agents o r employees or to others through its agents or employees. Distributor assumes full responsibility for its agents and employees under applicable statutes and agrees to pay all employee taxes thereunder.
5

14.Indemnification. Distributor agrees to indemnify and hold harmless the Fund and each of its directors, officers, employees, representatives and each person, if any, who controls the Fund within the meaning of Section 15 of SA-33 against any and all losses, liabilities, damages, claims or expenses (including the reasonab le costs of investigating or defending any alleged loss, liability, damage, claim or expense and reasonable legal counsel fees incurred in connection therewith) to which the Fund or such of its directors, officers, employees, representatives or controlling person may become subject under SA-33, under any other statute, at common law, or otherwise, arising out of the acquisition of any Shares by any person which (i) may be based upon any wrongful act by Distributor or any of Distrib utor`s directors, officers, employees or representatives, or (ii) may be based upon any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, shareholder report or other information covering Shares filed or made public by the Fund or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading if such statement or omission was made in reliance upon information furnished to the Fund by Distributor. In no case (i) is Distributor`s indemnity in favor of the Fund, or any person indemnified to be deemed to protect the Fund or such indemnified person against any liability to which the Fund or such person would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of his duties or by reason of his reckless disregard of his obligations and duties under this Agreement or (ii) is Distributor to be liable under its indemnity agreement contained in this Paragraph with respect to any claim made against the Fund or any person indemnified unless the Fund or such person, as the case may be, shall have notified Distributor in writing of the claim within a reasonable time after the summons or other first written notification giving information of the nature of the claim shall have been served upon the F und or upon such person (or after the Fund or such person shall have received notice of such service on any designated agent). However, failure to notify Distributor of any such claim shall not relieve Distributor from any liability which Distributor may have to the Fund or any person against whom such action is brought otherwise than on account of Distributor`s indemnity agreement contained in this Paragraph.
Distributor shall be entitled to participate, at its own expense, in the defense, or, if Distributor so elects, to assume the defense of any suit brought to enforce any such claim, but, if Distributor elects to assume the defense, such defense shall be conducted by legal counsel chosen by Distributor and satisfactory to the Fund, to its directors, officers, employees or representatives, or to any controlling person or persons, defendant or defendants, in the suit. In the event that Distributor elects to assume the defense of any such suit and retain such legal counsel, the Fund, its directors, officers, employees, representatives or controlling person or persons, defendant or defendants in the suit, shall bear the fees and expenses of any additional legal counsel retained by them. If Distributor does not elect to assume the defense of any such suit, Distributor will reimburse the Fund, such directors, officers, employees, representatives or controlling person or persons, defendant or defendants in such suit for the reasonable fees and expenses of any legal counsel retained by them. Distributor agrees to promptly notify the Fund of the com mencement of any litigation or proceedings against it or any of its directors, officers, employees or representatives in connection with the issue or sale of any Shares.

The Fund agrees to indemnify and hold harmless Distributor and each of its directors, officers, employees, representatives and each person, if any, who controls Distributor within the meaning of Section 15 of SA-33 against any and all losses, liabilities, damages, claims or expenses (including the reasonable costs of investigating or defending any alleged loss, liability, damage, claim or expense and reasonable legal counsel fees incurred in connection therewith) to which Distributor or such of its directors, officers, employees, representatives or controlling person may become subject under SA-33, under any other statute, at common law, or otherwise, arising out of the acquisition of any Shares by any person which (i) may be based upon any wrongful act by the Fund or any of the Fund`s directors, officers, employees or representatives, or (ii) may be based upon any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, shareholder report or other information covering Shares filed or made public by the Fund or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading if such statement or omission was made in reliance upon information furnished to Distributor by the Fund. In no case (i) is the Fund`s indemnity in favor of the Distributor, or any person indemnified to be deemed to protect the Distributor or such indemnified person against any liability to which the Distributor or such person would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of his duties or by reason of his reckless disregard of his obligations and duties under this Agreement, or (ii) is the Fund to be liable under its indemnity agreement contained in this Paragraph with respect to any claim made against Distributor, or person indemnified unless Distributor, or such person, as the case may be, shall have notified the Fund in writing of the claim within a reasonable time after the summons or other first written notification giving information of the nature of the claim shall have been served upon Distributor or upon such person (or after Distributor or such person shall have received notice of such service on any designated agent). However, failure to notify th e Fund of any such claim shall not relieve the Fund from any liability which the Fund may have to Distributor or any person against whom such action is brought otherwise than on account of the Fund's indemnity agreement contained in this Paragraph.
The Fund shall be entitled to participate, at its own expense, in the defense, or, if the Fund so elects, to as sume the defense of any suit brought to enforce any such claim, but, if the Fund elects to assume the defense, such defense shall be conducted by legal counsel chosen by the Fund and satisfactory to Distributor, to its directors, officers, employees or representatives, or to any controlling person or persons, defendant or defendants, in the suit. In the event that the Fund elects to assume the defense of any such suit and retain such legal counsel, Distributor, its directors, officers, employees, representatives or controlling person or persons, defendant or defendants in the suit, shall bear the fees and expenses of any additional legal counsel retained by them. If the Fund does not elect to assume the defense of any such suit, the Fund will reimburse Distributor, such directors, officers, employees, representatives or controlling person or persons, defendant or defendants in such suit for the reasonable fees and expenses of any legal counsel retained by them. The Fund agrees to promptly notify Distributor of the commencement of any litigation or proceedings against it or any of its directors, officers, employees, or representatives in connection with the issue or sale of any Shares.
7

15.Duration and Termination of This Agreement. This Agreement shall become effective upon its execution ("effective date") and, unless terminated as provided, shall remain in effect through April 30, 2004 and from year to year thereafter, but only so long as such continuance is specifically approved at least annually by th e vote of a majority of the directors of the Fund who are not interested persons of Distributor or of the Fund, cast in person at a meeting called for the purpose of voting on such approval, and by vote of the directors of the Fund or of a majority of the outstanding voting securities of the Fund. This Agreement may, on 60 days` written notice, be terminated at any time, without the payment of any penalty, by the vote of a majority of the directors of the Fund who are not interested persons of Distributor or the Fund, by a vote of a majority of the outstanding voting securities of the Fund, or by Distributor. This Agreement will automatically terminate in the event of its assignment. In interpreting the provisions of this Paragraph 15, the definitions contained in Section 2(a) of ICA-40 (particularly the definitions of "interested person," "assignment," and "majority of the outstanding securities") shall be applied.
16.Amendment of this Agreement. No provisions of this Agreement may be changed, waived, discharged, or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge, or termination is sought. If the Fund should at any time deem it necessary or advisable in the best interests of the Fund that any amendment of this Agreement be made in order to comply with the recommendations or requirements of the SEC or other governmental authority or to obtain any advantage under state or federal tax laws and notifies Distributor of the form of such amendment, and the reasons therefor, and if Distributor should decline to assent to such amendment, the Fund may terminate this Agreement forthwith. If Distributor should at any time request that a change be made in the Fund`s Articles of Incorporation or By-Laws or in its methods of doing business, in order to comply with any requirements of federal l aw or regulations of the SEC, or of a national securities association of which Distributor is or may be a member relating to the sale of Shares, and the Fund should not make such necessary change within a reasonable time, Distributor may terminate this Agreement forthwith.
17.Sepa rate Agreement as to Classes. The amendment or termination of this Agreement with respect to any class of Shares shall not result in the amendment or termination of this Agreement with respect to any other class of Shares unless explicitly so provided.
18.Miscellaneous. It is understood and expressly stipulated that neither the shareholders of the Fund, nor the directors of the Fund shall be personally liable hereunder. The captions in this Agreement are included for convenience of reference only, and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
19.Notice. Any notice required or permitted to be given by either party to the other shall be deemed sufficient if sent by registered or certified mail, postage prepaid, addressed by the party giving notice to the other party at the last address furnished by the other party to the party giving notice: if to the Fund, 100 East Pratt Street, Baltimore, Maryland 21202, and if to the Distributor, at 100 East Pratt Street, Baltimore, Maryland 21202.

ATTEST:T. ROWE PRICE NEW INCOME FUND, INC.
/s/Patricia B. LippertBy:/s/William T. Reynolds
Patricia B. Lippert, SecretaryWilliam T. Reynolds, President
ATTEST:T. ROWE PRICE INVESTMENT SERVICES, INC.
/s/Barbara A. Van HornBy:/s/Henry H. Hopkins
Barbara A. Van Horn, SecretaryHenry H. Hopkins, Vice President
L:TRPPRODEDGAgreementsUnderwriting AgreementsUnderNIA.fm
9
EX-99.G CUST AGREEMT 5 custodian2003.htm
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 Unit ed 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 loc ated 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 2.1Holding 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 2.2Delivery 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 portf olio 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 < font style="font-size:12.0pt;" face="Courier" color="Black">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 "T ransfer 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 delive ry is to be made, and (c) naming the person or persons to whom delivery of such investments shall be made.
Section 2.3Registration of Investments. Domestic investments held by the Custodian (other than b earer 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 2.4Bank 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 accou nts, 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 Custodia n in its capacity as custodian and shall be withdrawable by the Custodian only in that capacity.
Section 2.5Collection 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 2.6Payment 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 liabi lity 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 2.7Liability 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 securiti es had been received by the Custodian.
Section 2.8Appointment 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, whi ch 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 2.9Deposit 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"< /b>) 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 Sy stem 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 C ustodian 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 obt ained 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 cert ificate, 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 2.10Fund 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 2.11Segregated 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 c ommodity 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 2.12Ownership Certificates for Tax Purposes. The Custodian shall execute ownership and other cer tificates 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 2.13Proxies. 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 2.14Communications 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 o r 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 2.15Reports 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 3.1Definitions. 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 3.2Holding 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 th e 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 3.3Foreign 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 3.4Transactions 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)t o 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 o f 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 3.6Bank 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 F und.
Section 3.7Collection of Income. The Custodian shall use reasonable commercial efforts to collect all income and other payments with respect to the foreign securities held hereunder to which the Funds shall be entitled and shall credit such income, as

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 3.8Proxies. With respect to the foreign securities held under this Section 3, the Custodian will use reasonable commercial efforts to facilitate the exercise of voting and other shareholder proxy rights, subject always to the laws, regulations and practical constraints that may exist in the country where such securities are issued. The Fund acknowledges that local conditions, including lack of regulation, onerous procedural obligations, lack of notice and other factors may have the effect of severely limiting the ability of the Fund to exercise shareholder rights.
Section 3.9 Communications Relating to Foreign Securities. The Custodian shall transmit promptly to the Fund written information (including, without limitation, pendency of calls and maturities of foreign securities and expirations of rights in connection therewith) received by the Custodian in connection with the foreign securities being held for the account of the Fund. With respect to tender or exchange offers, the Custodian shall transmit promptly to the Fund written information so received by the Custodian in connection with the foreign securities whose tender or exchange is sought or from the party (or its agents) making the tender or exchange offer.
Section 3.10Liability 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 3.11Tax 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 Sha res. 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 < /font>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 < /font>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 t ransaction 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 discret ion 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 Boar d.
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 futu res 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 h ave 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 < /font>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 h ereinafter 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 tru st 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 C ustodian, 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 t he provisions of this Agreement relating to the duties and obligations of the Custodian shall remain in full force and effect.
Section 12.General.
Section 12.1Compensation 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 12.2Massachusetts 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 12.3Records. 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 th e 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 12.4Opinion 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 12.5Interpretive 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 12.6Bond. 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 12.7Confidentiality. 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 inf ormation by duly constituted authorities, or when so requested by the Fund.
Section 12.8Exemption 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 12.9Assignment< font style="font-size:12.0pt;" face="Courier" color="Black">. This Agreement may not be assigned by either party without the written consent of the other, except that either party may assign its rights and obligations hereunder to a party controlling, controlled by, or under common control with such party.
Section 12.10 Prior Agreements. Without derogating the rights established thereunder prior to the date of this Agreement, this Agreement supersedes and terminates, as of the date hereof, all prior agreements between the Fund and the Custodian relating to the custody of Fund assets.
Section 12.11 Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all such counterparts taken together shall constitute but one and the same Agreement.

Section 12.12 Notices. Any notice, instruction or other instrument required to be given hereunder may be delivered in person to the offices of the parties as set forth herein during normal business hours or delivered prepaid registered mail or by telex, cable or telecopy to the parties at the following addresses or such other addresses as may be notified by any party from time to time.
To any Fund:c/o T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Attention: Carmen Deyesu
Telephone: 410-345-6658
Telecopy: 410-685-8827/8830
To the Custodian:State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171, U.S.A.
Attention: Carol C. Ayotte
Telephone: 617-985-6894
Telecopy: 617-537-6321
Such notice, instruction or other instrument shall be deemed to have been served in the case of a registered letter at the expiration of five business days after posting, in the case of cable twenty-four hours after dispatch and, in the case of telex, immediately on dispatch and if delivered outside normal business hours it shall be deemed to have been received at the next time after delivery when normal business hours commence and in the case of cable, telex or telecopy on the business day after the receipt thereof. Evidence that the notice was properly addressed, stamped and put into the post shall be conclusive evidence of posting.
Section 12.13 Entire Agreement. This Agreement (including all schedules, appendices, exhibits and attachments hereto) constitutes the entire Agreement between the parties with respect to the subject matter hereof.
Section 12.14 Headings Not Controlling. Headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement.
Section 12.15 Survival. All provisions regarding indemnification, confidentiality, warranty, liability and limits thereon shall survive following the expiration or termination of this Agreement.

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, exhib its, 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 herei n 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 HORIZONR 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
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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.< font style="font-size:12.0pt;" face="Courier" color="Black">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 t o 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 HORIZONR 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 Se rvices. 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 S ervices 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 th ird 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 t he 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 u nless 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 unde rtakings, 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.
< p>

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 Audi tor, 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 phas e 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.
< p>
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 t he 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 HORIZONR Accounting System
System Product Description
I.The Multicurrency HORIZONR 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.GlobalQuestR GlobalQuestR is designed to provide customer access to the following information maintained on The Multicurrency HORIZONR Accounting System: 1) cash transactions and balances; 2) purchases and sales; 3) income recei vables; 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.HORIZONR Gateway. HORIZONR Gateway provides customers with the ability to (i) generate reports using information maintained on the Multicurrency HORIZONR 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 accesse d 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
Undertaki ng
(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 < font style="font-size:12.0pt;" face="Courier" color="Black">("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 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 suc h 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 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 HORIZONR Help Desk and Fund Assistance Center between the hours of 8 a.m. and 6 p.m. (Eastern time) on all business d ays 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 f ee 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 custo m

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 F und`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. R owe 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 Pric e 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 Diversi fied 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/s/Carmen Deyesu
By:_____________________By:____________________
Name:Suzanne E. FraunhofferName: Carmen Deyesu
Title:Legal AssistantTitle: Treasurer for
each of the foregoing
Signature Attested to:State Street Bank and Trust Company
/s/Glenn Ciotti/s/Ronald E. Logue
By:_____________________By:____________________
Name:Glenn Ciotti Name: Ronald E. Logue
Title:VP & Assoc. CounselTitle: Executive Vice
President

Schedule A
CountrySubcustodianCentral Depository
United KingdomState Street BankNone;
and Trust CompanyThe 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 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 Fu nd
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 P rice 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

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.< /font>
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 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 F und
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. R OWE 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 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.
< p>
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.< /div>
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 F und
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 INTERNATIONA L 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< /font>
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-CA P 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-Fr ee Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund

T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-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 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.
Ins titutional 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 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 Emerging Europe & Mediterranean 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 & TE CHNOLOGY FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. ROWE PRICE TAX-EXEM PT 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 Fu nd
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 G lobal 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 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 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 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 Emerging Europe & Mediterranean 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.
Rese rve 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.
< div style="margin-left:0.0";margin-right:0.0";text-indent:0.0";width:100%">T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund

T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. ROWE PRICE TAX-EXEM PT 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
S TATE 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 FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Ro we 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 Emerging Europe & Mediterranean 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. R OWE 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. R OWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund

Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient 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 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 FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Ro we 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 Emerging Europe & Mediterranean 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. R OWE 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. R OWE 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 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 Large-Cap 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. Ro we 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 Emerging Europe & Mediterranean 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. R OWE 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 SM ALL-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< /font>
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, < /font>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 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
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 FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Ro we 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 Emerging Europe & Mediterranean 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. R OWE 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 SM ALL-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< /font>
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
/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 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
T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.
T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, I NC.
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 Emerging Markets Equity Fund
T. Rowe Price Institutional Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Ro we 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 Emerging Europe & Mediterranean 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. R OWE 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, I NC.
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< /font>
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
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, and July 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 September 4, 2002, by adding thereto T. Rowe Price Retirement Funds, Inc ., on behalf of T. Rowe Price Retirement 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 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
T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.
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 Emerging Markets Equity Fund
T. Rowe Price Institutional Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Ro we 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 Emerging Europe & Mediterranean 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. R OWE 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 Vic e President

AMENDMENT NO. 12
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, and September 4, 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 23, 2003, by adding thereto T. Rowe Institutiona l Equity Funds, Inc., on behalf of T. Rowe Price Institutional Large-Cap Core 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 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
T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.
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 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 Emerging Markets Equity Fund
T. Rowe Price Institutional Foreign Equity Fund

T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Ro we 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 Emerging Europe & Mediterranean 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. R OWE 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
Virgi nia 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
EX-99.H OTH MAT CONT 6 global.htm
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 t hose 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 noninterest 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 noninterest 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. T he 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 i nterest 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 Sec urities.
(c)Exchange interim receipts or temporary Securities for definitive Securities.
(d)Appoint brokers and agents for any transaction involving the Securities, including, without limitation, affiliates of the Bank or any Subcustodian.
(e)Issue statements to the Customer, at times mutually agreed upon, identifying the Assets in the Accounts.
The Bank will send the Customer an advice or notification of any transfers of Assets to or from the Accounts. Such statements, advices or notifications shall indicate the identity of the entity having custody of the Assets. Unless the Customer sends the Bank a written exception or objection to any Bank statement within ninety (90) days of receipt, the Customer shall be deemed to have approved such statement. The Bank shall, to the extent permitted by law, be released, relieved and discharged with respect to all matters set forth in such statement or reasonably implied therefrom as though it had been settled by the decree of a court of competent jurisdiction in an action where the Customer and all persons having or claiming an interest in the Customer or the Customer's Accounts were parties if: (a) the Customer has failed to provide a written exception or objection to any Bank statement within ninety (90) days of receipt and where the Cu stomer'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 A ctions 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 < font style="font-size:9.0pt;" face="Times New Roman" color="Black">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 contain ed 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.
< p>

(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 fa iled 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 responsib ility 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 outofpocket 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)< font style="font-size:9.0pt;" face="Times New Roman" color="Black">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 c ases 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 certif ies 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:
< /font>Bank:The Chase Manhattan Bank, N.A.
Chase MetroTech Center
Brooklyn, NY 11245
Attention: Global Investor Services
Telephone: (718) 2 42-3455
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 B ank 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 R iders 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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENTapplicable to all Customers
COMPANY ACT OF 1940listed 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< /font>
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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL 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 Bon d Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Bond Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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 Fu nds
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.OTHERNo Riders are applicable
to the Customer listed
RPFI International Partners, L.P.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 t he 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 2550.404b1 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 2550.404b1;
(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)"elig ible 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 2550.404b1.
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 404b1 (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 s pecifically 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 17f5 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 th e 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 bookentries in that countr y, or (ii) a transnational system for the central handling of securities or equivalent bookentries.
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 r estrictions 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 brokerdealer 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
COUNTRYSUB-CUSTODIANCORRESPONDENT BANK
ARGENTINAThe Chase Manhattan Bank,The Chase Manhattan
N.A., Main BranchBank, N.A.
25 De Mayo 130/140Buenos Aires
Buenos Aires
ARGENTINA
AUSTRALIAThe Chase Manhattan Bank,The Chase Manhattan Bank
Australia LimitedAustralia Limited Sydney
36th Floor
World Trade Centre
Jamison Street
Sydney
New South Wales 2000
AUSTRALIA
AUSTRIACreditanstalt - BankverelnCredit Lyonnais Vienna
Schottengasse 6
A - 1011, Vienna
AUSTRIA
BANGLADESH Standard Chartered BankStandard Chartered Bank
18-20 Motijheel C.A.Dhaka
Box 536,
Dhaka-1000
BANGLADESH
BELGIUM Generale BankCredit Lyonnais Bank
3 Montagne Du ParcBrussels
1000 Bruxelles
BELGIUM
BOTSWANAStandard Chartered BankStandard Chartered Bank
Botswana Ltd.Botswana Ltd.
4th Floor Commerce HouseGabarone
The Mall
Gaborone
BOTSWANA

BRAZILBanco Chase Manhattan, S.A.Banco Chase Manhattan
Chase Manhattan CenterS.A., Sao Paolo
Rua Verbo Divino, 1400
Sao Paulo, SP 04719-002
BRAZIL
CANADAThe Royal Bank of CanadaToronto Dominion Bank
Royal Bank PlazaToronto
Toronto
Ontario M5J 2J5
CANADA
Canada TrustToronto Dominion Bank
Canada Trust TowerToronto
BCE Place
161 Bay at Front
Toronto
Ontario M5J 2T2
CANADA
CHILEThe Chase Manhattan Bank,The Chase Manhattan
N.A., Agustinas 1235Bank, N.A., Santiago
Casilla 9192
Santiago
CHILE
COLOMBIACititrust Colombia S.A.Cititrust Colombia S.A.
Sociedad FiduciariaSociedad Fiduciaria
Av. Jimenez No 8-89Santafe de Bogota
Santafe de Bogota, DC
COLOMBIA
CZECHCeskoslovenska ObchodniCeskoslovenska
REPUBLICBanka, A.S.; Na Prikoope 14Obchodni Banka, A.S.
115 20 Praha 1Praha
CZECH REPUBLIC
DENMARK Den Danske BankDen Danske Bak
2 Holmens Kanala DK 1091Copenhagen
Copenhagen
DENMARK

EUROBONDS Cedel S.A.A/c No. 17817
67 Blvd Grande DuchesseECU:Lloyds Bank PLC< /div>
Charlotte LUXEMBOURGInternational Banking
Dividion
A/c Chase Manhattan Ba nk,London
N.A. LondonFor all other
currencies: see
relevant country
EURO CDS First Chicago Clearing CentreECU:Lloyds Bank PLC
27 Leadenhall StreetBanking Division London
London EC3A 1AAFor all other
UKcurrencies: see
relevant country
FINLANDKansallis-Osake-PankkiKanasallis-Osake-Pankki
Aleksanterinkatu 42
00100 Helsinki 10
FINLAND
FRANCE Banque ParibasSociete Generale Paris
Ref 256
BP 141
3, Rue D'Antin
75078 Paris
Cedex 02
FRANCE
GERMANY Chase Bank A.G.Chase Bank A.G.
Alexanderstrasse 59Frankfurt
Postfach 90 01 09
60441 Frankfurt/Main
GERMANY
GREECE < font style="font-size:12.0pt;" face="Courier New" color="Black">National Bank of Greece S.A.National Bank of Greece
38 Stadiou StreetS.A. Athens
AthensA/c Chase Manhattan
GREECEBank, N.A., London
A/c No. 040/7/921578-68
< p>
HONG KONG The Chase Manhattan Bank,NAThe Chase Manhattan
40/F One Exchange SquareBank, N.A., Hong Kong
8, Connaught Place
Central, Hong Kong
HONG KONG

HUNGARY Citibank Budapest Rt.Citibank Budapest Rt.
Vaci Utca 19-21Budapest
1052 Budapest V
HUNGARY
INDIA The Hongkong and ShanghaiThe Hongkong and
Banking Corporation LimitedShanghai Banking
52/60 Mahatma Gandhi RoadCorporation Limited,
Bombay 400 001Bombay
INDIA
INDONESIAThe Hongkong and ShanghaiThe Chase Manhattan
Banking Corporation LimitedBank, N.A., Jakarta
World Trade Center
J1. Jend Sudirman Kav. 29-31
Jakarta 10023
INDONESIA
IRELAND Bank of IrelandAllied Irish Bank Dublin
International Financial Services Centre
1 Hargourmaster Place
Dublin 1
IRELAND
ISRAEL Bank Leumi Le-Israel B.M.Bank Leumi Le-Israel
19 Herzi StreetB.M., Tel Aviv
65136 Tel Aviv
ISRAEL
ITALY The Chase Manhattan Bank,The Chase Manhattan
N.A., Piazza Meda 1Bank, N.A., Milan
20121 Milan
ITALY
JAPAN The Chase Manhattan Bank,The Chase Manhattan
N.A.,1-3 Marunouchi 1-ChomeBank, N.A., Tokyo
Chiyoda-Ku
Tokyo 100
JAPAN
JORDAN Arab Bank LimitedArab Bank Limited
P.O. Box 950544 - -5Amman
Amman
Shmeisani
JORDAN

LUXEMBOURGBanque Generale du LuxembourgBanque Generale du
S.A., 27 Avenue MontereyL uxembourg S.A.
LUXEMBOURGLuxembourg
MALAYSIA The Chase Manhattan Bank,The Chase Manhattan
N.A., Pernas InternationalBank, N.A., Kuala Lumpur
Jalan Sultan Ismail
50250, Kuala Lumpur
MALAYSIA
MEXICOThe Chase Manhattan Bank,No correspondent Bank
N.A., Hamburgo 213, Piso 7(Equities)
06660 Mexico D.F.
MEXICO
(GovernmentBanco Nacional de Mexico,Banque Commerciale du
Bonds)Avenida Juarez No. Maroc
104-11 PisoCasablanca
06040 Mexico D.F.
MEXICO
NETHERLANDS ABN AMRO N.V.Credit Lyonnais
Securities CentreBank Nederland N.V.
P.O. Box 3200Rotterdam
4800 De Breda
NETHERLANDS
NEW ZEALANDNational Nominees LimitedNational Bank of New Zealand
Level 2 BNZ TowerWellington
125 Queen Street
Auckland
NEW ZEALAND
NORWAY Den Norske BankDen Norske Bank
Kirkegaten 21Oslo
Oslo 1
NORWAY
PAKISTAN Citibank N.A.Citibank N.A.
State Life Building No.1Karachi
I.I. Chundrigar Road
Karachi
PAKISTAN

PERUCitibank, N.A.Citibank N.A. Lima
Camino Real 457
CC Torre Real - 5th Floor
San Isidro, Lima 27
PERU
PHILIPPINES The Hongkong and ShanghaiThe Hongkong and Shaghai
Banking Corporation LimitedBanking Corporation
Hong Kong Bank Centre 3/FLimited, Manila
San Miguel Avenue
Ortigas Commercial Centre
Pasig Metro Manila
PHILI PPINES
POLAND Bank Polska Kasa OpiekiBank Potska Kasa Opieki
S.A., 6/12 Nowy Swiat StrS.A., Warsaw
00-920 Warsaw
POLAND
PORTUGALBanco Espirito Santo &Banco Pinto &
Comercial de LisboaSotto Mayor
Servico de Gestaode TitulosAvenida Fontes
R. Mouzinho da Silvelra, Pereira de Melo
36 r/c, 1200 Lisbon1000 Lisbon
PORTUGAL
SHANGHAI The Hongkong and ShanghaiThe Chase Manhattan
(CHINA)Banking Co rporation LimitedBank, N.A.,Hong Kong
Shanghai Branch
Corporate Banking Centre
Unit 504, 5/F Shanghai Centre
1376 Hanjing Xi Lu
Shanghai
THE PEOPLE'S REPUBLIC OF CHINA
SCHENZHENThe Hongkong and ShanghaiThe Chase Manhattan
(CHINA)Banking Corporation LimitedBank, N.A., Hong Kong
1st Floor
Central Plaza Hotel
No. 1 Chun Feng Lu
Shenzhen
< font style="font-size:12.0pt;" face="Courier New" color="Black">THE PEOPLE'S REPUBLIC OF CHINA

SINGAPORE The Chase Manhattan Bank,The Chase Manhattan
N.A.Bank, N.A.
Shell TowerSingapore
50 Raffles Place
Singapore 0104
SINGAPORE
SOUTH KOREA The Hongkong & ShanghaiThe Hongkong & Shanghai
Banking Corporation LimitedBanking Corporation
6/F Kyobo BuildingLimited, Seoul
#1 Chongro, 1-ka Chongro-Ku,
Seoul
SOUGH KOREA
SPAIN The Chase Manhattan Bank,Banco Zaragozano, S.A.
N.A.,Calle Peonias 2Madrid
7th Floor
La Piovera
28042 Madrid
SPAIN
URUGUAYThe First National BankThe First National Bank
of Bostonof Boston
Zabala 1463Montevideo
Montevideo
URUGUAY
U.S.AThe Chase Manhattan Bank,The Chase Manhattan
N.A.Bank, N.A.
1 Chase Manhattan PlazaNew York
New York
< /p>
NY 10081
U.S.A.
VENEZUELA Citibank N.A.Citibank N.A.
Carmelitas a AltagraciaCaracas
Edificio Citibank
Caracas 1010< /font>
VENEZUELA

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 term s 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 amend ed 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 Por tfolio
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
< p>
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENTapplicable to all Customers
COMPANY ACT OF 1940listed under Section I of
this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price New America Growth Fund, Inc.

Attachment B
Schedule A
Page 2 of 2
APPLICABLE RIDERS TO
CUSTOMERGLOBAL 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 ERISAThe 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.OTHERNo Riders are applicable to
the Customer listed under
RPFI InternationalSection III of this
Partners, L.P.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:
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. Co nfirmation 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 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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENTapplicable to all Customers
COMPANY ACT OF 1940listed under Section I of
this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
< /p>
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:
< font style="font-size:12.0pt;" face="Times New Roman" color="Black">T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio

T. Rowe Price New America Growth Portfolio
T. Rowe Price 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:
< /font>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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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.OTHERNo Riders are applicable to
the Customer listed under
RPFI InternationalSection III of this
Partners, L.P.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 Cus tomer 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 f irst above written.
THE CHASE MANHATTAN BANK, N.A.
/s/Alan P. Naughton
By:_________________________________
Alan P. Naughton
Vice President
EACH OF THE CUSTO MERS 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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENTapplicable to all Customers
COMPANY ACT OF 1940listed under Section I of
this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfol io
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 Por tfolio
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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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.OTHERNo Riders are applicable to
the Customer listed under
RPFI InternationalSection III of thi s
Partners, L.P.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 Attachm ent 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
< /font>Treasurer

Attachment A
LIST OF CUSTOMERS
Add the following Fund:
T. Rowe Price International Funds, Inc. on behalf of:
< /p>
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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENTapplicable to all Customers
COMPANY ACT OF 1940listed under Section I of
this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio

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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.
T. Rowe Price Trust Company as Trustee for the
Johnson Mat they 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 Disc overy Trust
New York City International Common Trust Fund
III.OTHERNo Riders are applicable to
the Customer listed under
RPFI InternationalSection III of this
Partners, L.P.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 Enti ties 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 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
< /font>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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENTapplicable to all Customers
COMPANY ACT OF 1940listed under Section I of
this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio

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 International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
< font style="font-size:12.0pt;" face="Times New Roman" color="Black">T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Emerging Mark ets Bond Fund
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Personal Strateg y 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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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.OTHERNo Riders are applicable to
the Customer listed under
RPFI InternationalSection III of this
Partners, L.P.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 Atta chment A hereto, separately and individually (each such entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., which contracts have been assumed by operation of law by THE CHASE MANHATTAN BANK (the "Bank") is hereby further amended, as of July 31, 1996 (the "Amendment Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;
NOW , THEREFORE, the parties hereto agree as follows:
1. Amendment. Section I of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add and delete certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached hereto as Attachment B shall supersede the existing Schedule A in its entirety.
2. Agreement. The Customer agrees to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable thereunder as a "Customer" as defined in the Custody Agreement.
3. Conf irmation 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 WillsonVice 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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENTapplicable to all Customers
COMPANY ACT OF 1940listed 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

APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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
< font style="font-size:12.0pt;" face="Times New Roman" color="Black">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.OTHERNo Riders are applicable to the Customer
listed under
RPFI InternationalSection III of this
Partners, L.P.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 her ein 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 Intern ational, an indirect wholly-owned subsidiary of Bank, located in Moscow, Russia, and any nominee companies appointed by it.
(b) "International Financial Institution" shall mean any bank in the top 1,000 (together with their affiliated companies) as measured by "Tier 1" capital or any broker/dealer in the top 100 as measured by capital.
(c) "Negligence" shall mean the failure to exercise "Reasonable Care".
(d) "No-Action Letter" shall mean the response of the Securities and Exchange Commission's Office of Chief Counsel of Investment Management, dated April 18, 1995, in respect of the Templeton Russia Fund, Inc. (SEC Ref. No. 95-151-CC, File No. 811-8788) providing "no-action" relief under '17(f) of the Investment Company Act of 1940, as amended, and SEC Rule 17-f5 thereunder, in connection with custody of such Templeton Russia Fund, Inc.'s investments in Russian Securities.

(e) "Reasonable Care" shall mean the use of reasonable custodial practices under the applicable circumstances as measured by the custodial practices then prevailing in Russia of 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 in vestor'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 Securiti es 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 amende d 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 followi ng 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 fo r 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 R ussian 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 monit or 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 Agreem ent 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 CUSTOMERTHE CHASE MANHATTAN
BANK
separately and individually
/s/Henry H. Hopkins/s/Helen C. Bairsto
Henry H. HopkinsHelen C. Bairsto
Vice PresidentVice 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 c onflict 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:< /font>
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
< /p>
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENT< font style="font-size:12.0pt;" face="Times New Roman" color="Black">applicable to all Customers
COMPANY ACT OF 1940listed under Section I of
this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Financial Services Fund, Inc.
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price Health Sciences Fund, Inc.
Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund

Attachment B
Schedule A
Page 2 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL 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 P ersonal 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
APPLICABLE RIDERS TO
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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
< font style="font-size:12.0pt;" face="Times New Roman" color="Black">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, INDIVIDUALLYTHE CHASE MANHATTAN
AND SEPARATELY LISTED ON SECTION 1 OFBANK
SCHEDULE A HERETO
By:/s/Henry H. HopkinsBy:/s/Helen C. Bairsto
Henry H. HopkinsHelen C. Bairsto
Vice PresidentVice 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") furnishe d 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 pendi ng 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 belie ves 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.
< /p>
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:
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, INDIVIDUALLYTHE CHASE MANHATTAN
AND SEPARATELY LISTED ON SECTION 1 OFBANK
SCHEDULE A HERETO
By:/s/Henry H. HopkinsBy:/s/Helen C. Bairsto
Henry H. HopkinsHelen C. Bairsto
Vice PresidentVice President
EACH OF THE CUSTOMERS, INDIVIDUALLY AND
SEPARATELY LISTED ON SECTION 2 OF
SCHEDULE A HERETO
By:/s/Nancy M. Mor ris
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
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 S ubcustodians 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 Noti fications, 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.
< /p>
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:
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/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
< /p>
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENT< font style="font-size:12.0pt;" face="Times New Roman" color="Black">applicable to all Customers
COMPANY ACT OF 1940listed under Section I of
this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Financial Services Fund, Inc.
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price Health Sciences Fund, Inc.
Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund

Attachment B
Schedule A
Page 2 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL 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, I nc.
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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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 Fu nd
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 BANKEACH OF THE PARTIES LISTED ABOVE
By: /s/Helen C. BairstoBy:/s/Henry H. Hopkins
Helen C. Bairsto Henry H. Hopkins
Vice President 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.< /font>
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. Amendm ent. 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 Custo dy 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
< p>
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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENTapplicable to all Customers
COMPANY ACT OF 1940listed under Section I of
this Schedule A.
< div style="text-align:Left;margin-left:0.0";margin-right:0.0";text-indent:0.0";width:100%">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 FundGlobal 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 Fun dGlobal Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price Mid-Cap Growth PortfolioGlobal Proxy Service Rider
T. Rowe Price New Ameri ca Growth PortfolioGlobal Proxy Service Rider
T. Rowe Price Personal Strategy Balanced PortfolioGlobal 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 FundGlobal Proxy Service Rider
Institutional International Funds, Inc. on behalf of:
Foreign Equity FundRussian Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock FundRussian Rider
T. Rowe Price European Stock FundRussian Rider
T. Rowe Price Global Stock FundRussian Rider
T. Rowe Price International Discovery FundRussian Rider
T. Rowe Price International Growth & Income FundRussian Rider
T. Rowe Price International Stock FundRussian Rider
T. Rowe Price Japan FundRussian Rider
T. Rowe Price Latin America FundRussian Rider
T. Rowe Price New Asia FundRussian Rider

Schedule A
Page 2 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock PortfolioRussian 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 FundGlobal 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.< font style="font-size:12.0pt;" face="Times New Roman" color="Black">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 PortfolioGlobal Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond FundRussian Rider
T. Rowe Price Global Bond FundRussian Rider
T. Rowe Price International Bond FundRussian 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 FundGlobal Proxy Service Rider
T. Rowe Price Personal Strategy Growth FundGlobal Proxy Service Rider
T. Rowe Price Personal Strategy Income FundGlobal 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 FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Balanced Fund, Inc.Global Proxy Service Rider

Schedule A
Page 3 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY
AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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 Discov ery Trust
New York City International Common Trust FundGlobal 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 a nd III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.
2.Agreement. The Customer and Bank agree to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable and responsible thereunder as a "Customer" and "Bank," respectively, as defined in the Custody Agreement.
3.Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

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:
< p>
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
Jap an 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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is applicable to
REGISTERED UNDER THE INVESTMENTall Customers listed under Section I of
COMPANY ACT OF 1940this 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 Divid end Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Equity Income Fund Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Portfolio Global Proxy Service Rider
T. Rowe Price New America Growth Portfolio Global Proxy Service Rider
T. Rowe Price Personal Strategy Balanced Portfolio Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc. Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc. Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc. Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund Global Proxy Service and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund Global Proxy Service and Russian Rider
T. Rowe Price European Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Global Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Discovery FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Growth & Income FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Pri ce Japan FundGlobal Proxy Service and Russian Rider
T. Rowe Price Latin America FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Asia FundGlobal Proxy Service and Russian Rider

Schedule A
Page 2 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock PortfolioGlobal Proxy Service and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.Global Proxy Service Rider
T. Rowe Price New America Growth FundGlobal 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< /font>
T. Rowe Price Value Fund, Inc.Global Proxy Service Rider
Income Funds< /div>
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 Ri der
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price Global Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Growth Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Income Fund Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc. Global Proxy Service Rider
T. Rowe Price Short-Term U.S. Government Fund, Inc. Global Proxy Service Rider
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of:
T. Rowe Price Tax-Efficient Balanced FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Growth FundGlobal Proxy Service Rider

Schedule A
Page 3 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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
< div style="margin-left:0.0";margin-right:0.0";text-indent:0.3";width:100%">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 TrustGlobal Proxy Service Rider
European Discovery TrustGlobal Proxy Ser vice Rider
Foreign Discovery TrustGlobal Proxy Service Rider
Foreign Discovery Trust - AugmentGlobal Proxy Service Rider
Foreign Discovery Trust - BGlobal Proxy Service Rider
International Small-Cap TrustGlobal Proxy Service Rider
Japan Discovery TrustGlobal Proxy Service Rider
Latin America Discovery TrustGlobal Proxy Service Rider
Pacific Discovery TrustGlobal 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, severally and not jointly (each such entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., whose contracts have been assumed by THE CHASE MANHATTAN BANK (the "Bank") is hereby further amended, as of February 9, 2000 (the "Amendment Agreemen t"). Terms defined in the Custody Agreement are used herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1.Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.
2.Agreement. The Customer and Bank agree to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable and responsible thereunder as a "Customer" and "Bank," respectively, as defined in the Custody Agreement.
3.Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

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. Rond inelli
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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is applicable to
REGISTERED UNDER THE INVESTMENTall Customers listed under Section I of
COMPANY ACT OF 1940this 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 Divid end Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Equity Income Fund Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Portfolio Global Proxy Service Rider
T. Rowe Price New America Growth Portfolio Global Proxy Service Rider
T. Rowe Price Personal Strategy Balanced Portfolio Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc. Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc. Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc. Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of:
Institutional Large-Cap Value FundGlobal Proxy Service Rider
Institutional Small-Cap Stock FundGlobal Proxy Service Rider
Mid-Cap Equity Growth Fund Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund Global Proxy Service and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund Global Proxy Service and Russian Rider
T. Rowe Price European Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Global Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Discovery FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Growth & Income FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Japan FundGlobal Proxy Service and Russian Rider

Schedule A
Page 2 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
T. Rowe Price Latin America FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Asia FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock PortfolioGlobal Proxy Service and Russian Rider
T. Rowe Price Media & Telecommunications Fund, In c.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 FundGlobal 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 Rid er
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
< div style="margin-left:0.0";margin-right:0.0";text-indent:0.3";width:100%">T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price Global Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Growth Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Income Fund Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc. Global Proxy Service Rider
T. Rowe Price Short-Term U.S. Government Fund, Inc. Global Proxy Service Rider
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of:
T. Rowe Price Tax-Efficient Balanced FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Growth FundGlobal Proxy Service Rider

Schedule A
Page 3 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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
< div style="margin-left:0.0";margin-right:0.0";text-indent:0.3";width:100%">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 TrustGlobal Proxy Service Rider
European Discovery TrustGlobal Proxy Ser vice Rider
Foreign Discovery TrustGlobal Proxy Service Rider
Foreign Discovery Trust - AugmentGlobal Proxy Service Rider
Foreign Discovery Trust - BGlobal Proxy Service Rider
International Small-Cap TrustGlobal Proxy Service Rider
Japan Discovery TrustGlobal Proxy Service Rider
Latin America Discovery TrustGlobal Proxy Service Rider
Pacific Discovery TrustGlobal 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 appointmen t pursuant to the terms of the Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1.Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.
2.Agreement. The Customer and Bank agree to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable and responsible thereunder as a "Customer" and "Bank," respectively, as defined in the Custody Agreement.
3.Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

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:____________________________________
Jo seph 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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is applicable to
REGISTERED UNDER THE INVESTMENTall Customers listed under Section I of
CO MPANY ACT OF 1940this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc. Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Equity Income Fund Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Portfolio Global Proxy Service Rider
T. Rowe Price New America Growth Portfolio Global Proxy Service Rider
T. Rowe Price Personal Strategy Balanced Portfolio Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc. Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc. Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc. Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of:
Institutional Large-Cap Value FundGlobal Proxy Service Rider
Institutional Small-Cap Stock FundGlobal Proxy Service Rider
Mid-Cap Equity Growth Fund Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund Global Proxy Service and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Europe &
Mediterranean FundGlobal Proxy Service and Russian Rider
T. Rowe Price Emerging Markets Stock Fund Global Proxy Service and Russian Rider
T. Rowe Price European Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Global Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Discovery FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Growth & Income FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Japan FundGlobal Proxy Service and Russian Rider
< font style="font-size:11.0pt;" face="Times New Roman" color="Black">T. Rowe Price Latin America FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Asia FundGlobal Proxy Service and Russian Rider

Schedule A
Page 2 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock PortfolioGlobal Proxy Service and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.Global Proxy Service Rider
T. Rowe Price New America Growth FundGlobal 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< /font>
T. Rowe Price Value Fund, Inc.Global Proxy Service Rider
Income Funds< /div>
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 Ri der
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price Global Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Growth Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Income Fund Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc. Global Proxy Service Rider
T. Rowe Price Short-Term U.S. Government Fund, Inc. Global Proxy Service Rider
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of:
T. Rowe Price Tax-Efficient Balanced FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Growth FundGlobal Proxy Service Rider

Schedule A
Page 3 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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
< div style="margin-left:0.0";margin-right:0.0";text-indent:0.3";width:100%">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 TrustGlobal Proxy Service Rider
European Discovery TrustGlobal Proxy Ser vice Rider
Foreign Discovery TrustGlobal Proxy Service Rider
Foreign Discovery Trust - AugmentGlobal Proxy Service Rider
Foreign Discovery Trust - BGlobal Proxy Service Rider
International Small-Cap TrustGlobal Proxy Service Rider
Japan Discovery TrustGlobal Proxy Service Rider
Latin America Discovery TrustGlobal Proxy Service Rider
Pacific Discovery TrustGlobal 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 o f the Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1.Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.
2.Agreement. The Customer and Bank agree to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable and responsible thereunder as a "Customer" and "Bank," respectively, as defined in the Custody Agreement.
3.Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is applicable to
REGISTERED UNDER THE INVESTMENTall Customers listed under Section I of
COMPANY ACT OF 1940this 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 Portfo lio Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Portfolio Global Proxy Service Rider
T. Rowe Price New America Growth Portfolio Global Proxy Service Rider
T. Rowe Price Personal Strategy Balanced Portfolio Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc. Global Proxy Service Rider
T. Rowe Price 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 FundGlobal Proxy Service Rider
Institutional Small-Cap Stock FundGlobal Proxy Service Rider
Mid-Cap Equity Growth Fund Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund Global Proxy Service and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Europe &
Mediterranean FundGlobal Proxy Service and Russian Rider
T. Rowe Price Emerging Markets Stock Fund Global Proxy Service and Russian Rider
T. Rowe Price European Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Global Stock FundGlobal Proxy Service and Russian Rider

Schedule A
Page 2 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
T. Rowe Price International Funds, Inc. on behalf of (continued):
T. Rowe Price International Discovery FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Growth & Income FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Japan FundGlobal Proxy Service and Russian Rider
T. Rowe Price Latin America FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Asia FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price Internatio nal Stock PortfolioGlobal Proxy Service and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.Global Proxy Service Rider
T. Rowe Price New America Growth FundGlobal 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:
< font style="font-size:11.0pt;" face="Times New Roman" color="Black">T. Rowe Price Emerging Markets Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price Global Bond FundGlobal Proxy Service and Russian Rider
< div style="margin-left:0.0";margin-right:0.0";text-indent:0.3";width:100%">T. Rowe Price International Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Growth Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Income Fund Global Proxy Service Rider< /div>
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 FundGlobal Proxy Service Rider

Schedule A
Page 3 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
T. Rowe Price Tax- Efficient Funds, Inc. on behalf of:
T. Rowe Price Tax-Efficient Balanced FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Growth FundGlobal Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.Global Proxy Service Rider
II.ACCOUNTS SUBJECT TO ERISAThe 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 TrustGlobal Proxy Service Rider
European Discovery TrustGlobal Proxy Service Rider
Foreign Discovery TrustGlobal Proxy Service Rider
Foreign Discovery Trust - AugmentGlobal Proxy Service Rider
Foreign Discovery Trust - BGlobal Proxy Service Rider
India TrustGlobal Proxy Service Rider
International Small-Cap TrustGlobal Proxy Service Rider
Japan Discovery TrustGlobal Proxy Service Rider
Latin America Discovery TrustGlobal Proxy Service Rider
Pacific Discovery TrustGlobal Proxy Service Rider
Taiwan TrustGlobal 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 pursu ant to the terms of the Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1.Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.
2.Agreement. The Customer and Bank agree to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable and responsible thereunder as a "Customer" and "Bank," respectively, as defined in the Custody Agreement.
3.Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

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:____________________________________
Jo seph 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 Seri es, 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 Gr owth Portfolio
T. Rowe Price Health Sciences Portfolio
Income Fund
T. Rowe Price Tax-Efficient Funds, Inc., on behalf of:< /font>
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 Tru sts:
European Discovery Trust
Foreign Discovery Trust-Augment
Latin America Discovery Trus t
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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is applicable to
REGISTERED UNDER THE INVESTMENTall Customers listed under Section I of
COMPANY ACT OF 1940this 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 Por tfolioGlobal Proxy Service Rider
T. Rowe Price Equity Income Portfolio Global Proxy Service Rider
T. Rowe Price Health Sciences PortfolioGlobal Proxy Service Rider
T. Rowe Price Mid-Cap Growth Portfolio Global Proxy Service Rider
T. Rowe Price New America Growth Portfolio Global Proxy Service Rider
T. Rowe Price Personal Strategy Balanced Portfolio Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc. Global Proxy Service Rider
T. Rowe Price 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 FundGlobal Proxy Service Rider
Institutional Small-Cap Stock FundGlobal Proxy Service Rider
Mid-Cap Equity Growth Fund Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund Global Proxy Service and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Europe &
Mediterranean FundGlobal Proxy Service and Russian Rider
T. Rowe Price Emerging Markets Stock Fund Gl obal Proxy Service and Russian Rider

Schedule A
Page 2 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
T. Rowe Price International Funds, Inc. on behalf of (continued):
T. Rowe Price European Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Global Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Discovery FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Growth & Income FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Japan FundGlobal Proxy Service and Russian Rider
T. Rowe Price Latin America FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Asia FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Index Fund, Inc. on behalf of:
T. Rowe Price International Equity Index FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock PortfolioGlobal Proxy Service and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.Global Proxy Service Rider
T. Rowe Price New America Growth FundGlobal 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 FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Growth Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Income Fund Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc. Global Proxy Service Rider

Schedule A
Page 3 of 3
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of:
T. Rowe Price Tax-Efficient Balanced FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Growth FundGl obal Proxy Service Rider
T. Rowe Price Tax-Efficient Multi-Cap Growth FundGlobal Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.Global Proxy Service Rider
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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 TrustGlobal Proxy Service Rider
Foreign Discovery TrustGlobal Proxy Service Rider
Foreign Discovery Trust - BGlobal Proxy Service Rider
India TrustGlobal Proxy Service Rider
International Small-Cap TrustGlobal Proxy Service Rider
Japan Discovery TrustGlobal Proxy Service Rider
Taiwan TrustGlobal 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 d efinition 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 exerci se;
(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 Fo reign 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 he ld 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 17f5(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 cl arity, 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."
< div style="margin-left:0.0";margin-right:0.0";text-indent:0.0";width:100%">
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 t he 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 stan ding 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 t hat 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 THE CHASE MANHATTAN BANK
T. Rowe Price Funds,
severally and not jointly,
se t forth on Appendix 2 [Customer]
/s/Henry H. Hopkins /s/Paul D. Hopkins
By:________________________ By:_____________________
Name: Henry H. Hopkins Name: Paul D. Hopkins
Title:Vice President Title: Vice President
Date: 4/26/01 Date: 5/15/01

Appendix 1-A
Information Regarding Country Risk
1. To aid Customer in its determinations regardi ng Country Risk, Bank shall furnish annually and upon the initial placing of Foreign Assets into a country the following information (check items applicable):
AOpinions 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, October 25, 2000, and April 25, 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 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 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.
2.Agreement. The Customer and Bank agree to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable and responsible thereunder as a "Customer" and "Bank," respectively, as defined in the Custody Agreement.
3.Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.

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 Funds:
Equity Funds
Institutional Equity Fund s, Inc. on behalf of:
Institutional Large-Cap Growth Fund
Add the following Funds to the Global Proxy Service Rider:
Equity Funds
Institutional Equity Funds, Inc. on behalf of:
Institutional Large-Cap Growth Fund
Add the following Fund to the Global Proxy Service and Russian Rider
Equity Fund
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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is applicable to
REGISTERED UNDER THE INVESTMENTall Customers listed under Section I of
COMPANY ACT OF 1940this 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 PortfolioGlobal Proxy Service Rider
T. Rowe Price Equity Income Portfolio Global Proxy Service Rider
T. Rowe Price Health Sc iences PortfolioGlobal Proxy Service Rider
T. Rowe Price Mid-Cap Growth Portfolio Global Proxy Service Rider
T. Rowe Price New America Growth Portfolio Global Proxy Service Rider
T. Rowe Price Personal Strategy Balanced Portfolio Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc. Global Proxy Service Rider
T. Rowe Price 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 FundGlobal Proxy Service Rider
Institutional Large-Cap Value FundGlobal Proxy Service Rider
Institutional Small-Cap Stock FundGlobal Proxy Service Rider
Institutional Mid-Cap Equity Growth Fund Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund Global Proxy Service and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Europe &
Mediterranean FundGlobal Proxy Service and Russian Rider
T. Rowe Price Emerging Markets Stock Fund Global Proxy Service and Russian Rider

Schedule A
Page 2 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
T. Rowe Price International Funds, Inc. on behalf of (continued):
T. Rowe Price European Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Global Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Discovery FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Growth & Income FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Japan FundGlobal Proxy Service and Russian Rider
T. Rowe Price Latin America FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Asia FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Index Fund, Inc. on behalf of:
T. Rowe Price International Equity Index FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock PortfolioGlobal Proxy Service and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.Global Proxy Service Rider
T. Rowe Price New America Growth FundGlobal 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 FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Growth Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Income Fund Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc. Global Proxy Service Rider

Schedule A
Page 3 of 3
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of:
T. Rowe Price Tax-Efficient Balanced FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Growth FundGl obal Proxy Service Rider
T. Rowe Price Tax-Efficient Multi-Cap Growth FundGlobal Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.Global Proxy Service Rider
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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 TrustGlobal Proxy Service Rider
Foreign Discovery TrustGlobal Proxy Service Rider
Foreign Discovery Trust - BGlobal Proxy Service Rider
India TrustGlobal Proxy Service Rider
International Small-Cap TrustGlobal Proxy Service Rider
Japan Discovery TrustGlobal Proxy Service Rider
Taiwan TrustGlobal 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 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 Agr eement are used herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1.Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.
2.Agreement. The Customer and Bank agree to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable and responsible thereunder as a "Customer" and "Bank," respectively, as defined in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.
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/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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is applicable to
REGISTERED UNDER THE INVESTMENTall Customers listed under Section I of
COMPANY ACT OF 1940this 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 PortfolioGlobal Proxy Service Rider
T. Rowe Price Equity Income Portfolio Global Proxy Service Rider
T. Rowe Price Health Sciences PortfolioGlobal Proxy Service Rider
T. Rowe Price Mid-Cap Growth Portfolio Global Proxy Service Rider
T. Rowe Price New America Growth Portfolio Global Proxy Service Rider
T. Rowe Price Personal Strategy Balanced Portfolio Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc. Global Proxy Service Rider
T. Rowe Price 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 FundGlobal Proxy Service Rider
Institutional Large-Cap Value FundGlobal Proxy Service Rider
Institutional Small-Cap Stock FundGlobal Proxy Service Rider
Mid-Cap Equity Growth Fund Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of:
Fore ign Equity Fund Global Proxy Service and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Europe &
Mediterranean FundGlobal Proxy Service and Russian Rider
T. Rowe Price Emerging Markets Stock Fund Global Proxy Service and Russian Rider
T. Rowe Price European Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Global Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Discovery FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Growth & Income FundGlobal Pr oxy Service and Russian Rider

Schedule A
Page 2 of 3
< b>APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
T. Rowe Price International Funds, Inc. on behalf of (continued):
T. Rowe Price International Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Japan FundGlobal Proxy Service and Russian Rider
T. Rowe Price Latin Ameri ca FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Asia FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Index Fund, Inc. on behalf of:
T. Rowe Price International Equity Index FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Se ries, Inc. on behalf of:
T. Rowe Price International Stock PortfolioGlobal Proxy Service and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc.Global Proxy Service Rider
T. Rowe Price New America Growth FundGlobal 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.Gl obal 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 Institutional Income Funds, Inc., on behalf of:
T. Rowe Price Institutional High Yield FundGlobal Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
< font style="font-size:7.0pt;" face="Times Roman" color="Black">T. Rowe Price Personal Strategy Balanced Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Growth Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Income Fund Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc. Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of:
T. Rowe Price Tax-Efficient Balanced FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Growth FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Multi-Cap Growth FundGlobal Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.Global Proxy Service Rider

Schedule A
Page 3 of 3
< b>APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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 TrustGlobal Proxy Servi ce Rider
Foreign Discovery TrustGlobal Proxy Service Rider
Foreign Discovery Trust - BGlobal Proxy Service Rider
India TrustGlobal Proxy Service Rider
International Small-Cap TrustGlobal Proxy Service Rider
Japan Discovery TrustGlobal Proxy Service Rider
Taiwan TrustGlobal 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 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 Agreement"). Terms defined in the Custody Agreement are used herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian and the Bank wishes to accept such appointment pursuant to the terms of the Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1.Amendment. Sections I, II and III of Schedule A of the Custody Agreement ("Schedule A") shall be amended to add or change certain Customers as specified in Attachment A hereto. The revised Schedule A incorporating these changes in the form attached shall supersede the existing Schedule A in its entirety.
2.Agreement. The Customer and Bank agree to be bound in all respects by all the terms and conditions of the Custody Agreement and shall be fully liable and responsible thereunder as a "Customer" and "Bank," respectively, as defined in the Custody Agreement.
3.Confirmation of Agreement. Except as amended hereby, t he 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 w ithout 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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is applicable to
REGISTERED UNDER THE INVESTMENTall Customers listed under Section I of
COMPANY ACT OF 1940this 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 PortfolioGlobal Proxy Service Rider
T. Rowe Price Equity Income Portfolio Global Proxy Service Rider
T. Rowe Price Health Sciences PortfolioGlobal Proxy Service Rider
T. Rowe Price Mid-Cap Growth Portfolio Global Proxy Service Rider
T. Rowe Price New America Growth Portfolio Global Proxy Service Rider
T. Rowe Price Personal Strategy Balanced Portfolio Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc. Global Proxy Service Rider
T. Rowe Price 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 FundGlobal Proxy Service Rider
T. Rowe Price Institutional Large-Cap Value FundGlobal Proxy Service Rider
T. Rowe Price Institutional Small-Cap Stock FundGlobal Proxy Service Rider
T. Rowe Price Mid-Cap Equity Growth Fund Global Proxy Service Rider
T. Rowe Price Institutional International Funds, Inc. on behalf of:
T. Rowe Price Institutional Emerging Markets FundGlobal Proxy Service and Russian Rider
T. Rowe Price Institutional Foreign Equity Fund Global Proxy Service and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Europe &
Mediterranean FundGlobal Proxy Service and Russian Rider
T. Rowe Price Emerging Markets Stock Fund Global Proxy Service and Russian Rider
T. Rowe Price European Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Global Stock Fund Global Proxy Service and Russian Rider

Schedule A
Page 2 of 3
< b>APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
T. Rowe Price International Funds, Inc. on behalf of (continued):
T. Rowe Price International Discovery FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Growth & Income FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Japan FundGlobal Proxy Service and Russian Rider
T. Rowe Price Latin America FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Asia FundG lobal Proxy Service and Russian Rider
T. Rowe Price International Index Fund, Inc. on behalf of:
T. Rowe Price International Equity Index FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock PortfolioGlobal Proxy Service and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc.Global Proxy Service Ri der
T. Rowe Price Mid-Cap Value Fund, Inc.Global Proxy Service Rider
T. Rowe Price New America Growth Fund< /font>Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc.Global Proxy Service Rider
T. Rowe Price New Hori zons 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.< font style="font-size:7.0pt;" face="Times Roman" color="Black">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 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 FundGlobal Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Growth Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Income Fund Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc. Global Proxy Service Rider
< font style="font-size:7.0pt;" face="Times Roman" color="Black">T. Rowe Price Tax-Efficient Funds, Inc. on behalf of:
T. Rowe Price Tax-Efficient Balanced FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Growth FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Multi-Cap Growth FundGlobal Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.Global Proxy Service Rider

Schedule A
Page 3 of 3
< b>APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
II.ACCOUNTS SUBJECT TO ERISAThe 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 TrustGlobal Proxy Servi ce Rider
Foreign Discovery TrustGlobal Proxy Service Rider
Foreign Discovery Trust - BGlobal Proxy Service Rider
India TrustGlobal Proxy Service Rider
International Small-Cap TrustGlobal Proxy Service Rider
Japan Discovery TrustGlobal Proxy Service Rider
Taiwan TrustGlobal 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 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 conditions of the Custody Agreement and shall be fully liable and responsible thereunder as a "Customer" and "Bank," respectively, as defined in the Custody Agreement.
3.Confirmation of Agreement. Except as amended hereby, the Custody Agreement is in full force and effect and as so amended is hereby ratified, approved and confirmed by the Customer and the Bank in all respects.
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
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
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
I.INVESTMENT COMPANIES/PORTFOLIOSThe Mutual Fund Rider is applicable to
REGISTERED UNDER THE INVESTMENTall Customers listed under Section I of
COMPANY ACT OF 1940this 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 PortfolioGlobal Proxy Service Rider
T. Rowe Price Equity Income Portfolio Global Proxy Service Rider
T. Rowe Price Health Sciences PortfolioGlobal Proxy Service Rider
T. Rowe Price Mid-Cap Growth Portfolio Global Proxy Service Rider
T. Rowe Price New America Growth Portfolio Global Proxy Service Rider
T. Rowe Price Personal Strategy Balanced Portfolio Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc. Global Proxy Service Rider
T. Rowe Price 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 FundGlobal Proxy Service Rider
T. Rowe Price Institutional Large-Cap Growth FundGlobal Proxy Service Rider
T. Rowe Price Institutional Large-Cap Value FundGlobal Proxy Service Rider
T. Rowe Price Institutional Small-Cap Stock FundGlobal Proxy Service Rider
T. Rowe Price Mid-Cap Equity Growth Fund Global Proxy Service Rider
T. Rowe Price Institutional International Funds, Inc. on behalf of:
T. Rowe P rice Institutional Emerging Markets
FundGlobal Proxy Service and Russian Rider
T. Rowe Price Institutional Foreign Equity Fund Global Proxy Service and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Europe &
Mediterranean FundGlobal Proxy Service and Russian Rider
T. Rowe Price Emerging Markets Stock Fund Global Proxy Service and Russian Rider

Schedule A
Page 2 of 3
< b>APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
T. Rowe Price International Funds, Inc. on behalf of (continued):
T. Rowe Price European Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Global Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Discovery FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Growth & Income FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Stock FundGlobal Proxy Service and Russian Rider
T. Rowe Price Japan FundGlobal Proxy Service and Russian Rider
< font style="font-size:7.0pt;" face="Times Roman" color="Black">T. Rowe Price Latin America FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Asia FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Index Fund, Inc. on behalf of:
T. Rowe Price International Equity Index FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock PortfolioGlobal Proxy Service and Russian Rider
T. Rowe Price Media & Telecommunications Fund, In c.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 FundGlobal 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 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 FundGlobal Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price International Bond FundGlobal Proxy Service and Russian Rider
T. Rowe Price New Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund Global P roxy Service Rider
T. Rowe Price Personal Strategy Growth Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Income Fund Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc. Global Proxy Service Rider

Schedule A
Page 3 of 3
APPLICABLE RIDERS TO
CUSTOMERGLOBAL CUSTODY AGREEMENT
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of:
T. Rowe Price Tax-Efficient Balanced FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Growth FundGlobal Proxy Service Rider
T. Rowe Price Tax-Efficient Multi-Cap Growth FundGlobal Proxy Service Rider
T. Rowe Price U.S. Bond Index Fund, Inc.Global Proxy Service Rider
II.ACCOUNTS SUBJECT TO ERISAThe 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 TrustGlobal Proxy Service Rider
Foreign Discovery TrustGlobal Proxy Service Rider
Foreign Discovery Trust - BGlobal Proxy Service Rider
India TrustGlobal Proxy Service Rider
International Small-Cap TrustGlobal Proxy Service Rider
Japan Discovery TrustGlobal Proxy Service Rider
Taiwan TrustGlobal Proxy Service Rider
07-03AmdAgrCus.doc
EX-99.H OTH MAT CONT 7 transferagmt2003.htm
TRANSFER AGENCY AND SERVICE AGREEMENT
between
T. ROWE PRICE SERVICES, INC.
and
THE T. ROWE PRICE FUNDS

TABLE OF CONTENTS
Page
Article ATerms of Appointment2
Article BDuties of Price Services3
1.Receipt of Orders/Payments3
2.Redemptions5
3.Transfers7
4.Confirmations7
5.Returned Checks and ACH Debits7
6.Redemption of Shares under a Hol d8
7.Dividends, Distributions and Other Corporate Actions10
8.Abandoned Property and Lost Shareholders10
9.Books and Records11
10.Authorized Issued and Outstanding Shares13
11.Tax Information13
12.Information to be Furnished to the Fund14
13.Correspondence14
14.Lost or Stolen Securities14
15.Telephone/Computer Services14
16.Collection of Shareholder Fees/Participant Fees/Calculation
and Distribution of 12b-1 Fees and Administrative
Fee Payments15
17.Form N-SAR16
18.Cooperation With Accountants16
19.Blue Sky16
20.Other Services17
Article CFees and Expenses17
Article DRepresentations and Warranties of the Price Services19
Article ERepresentations and Warranties of the Fund19
Article FStandard of Care/Indemnification20
Article GDual Interests22
Article HDocumentation22
Article IReferences to Price Services24
Article JCompli ance with Governmental Rules and Regulations24
Article KOwnership of Software and Related Material24
Article LQuality Service Standards24
Article MAs of Transactions24
Article NTerm and Termination of Agreement28
Article ONotice28
Article PAssignment28
Article QAmendment/Interpretive Provisions28

Article RFurther Assurances29
Article S Maryland Law to Apply29
Article TMerger of Agreement29
Article UCounterparts29
Article VThe Parties29
Article WDirecto rs, Trustees, Shareholders and Massachusetts Business Trust29
Article XCaptions30

TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the first day of January, 2003, 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, SepIRA`s, SIMPLE plans, deferred compensation plans, 403(b) plans, and profit sharing, thrift, and money purchase pension plans for self-employed individuals and professional partnerships and corporations, (collectively referred to as "Retirement Plans"); and
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, 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;
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 ser vices provided to the 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 affi liates 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
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: < /div>
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;
I.Process periodic payment orders, as authorized by investors, in ac cordance with the payment procedures mutually agreed upon by both parties;
II.Receive monies from Retirement Plans and determine the proper allocation of such monies to the Retirement Accounts based upon instructions received from Retirement Plan participants or Retirement Plan administrators ("Administrators");
III.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;
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 shall be deemed receipt by the Fund for purposes of Rule 22c-1 of the Investment Company Act of 1940; and
Process telephone and computer orders for purchases of Fund shares from the Shareholder`s bank account (via wire or ACH) to the Fund in accordance with procedures mutually agreed upon by both parties.
Upon receipt of funds through the Federal Reserve Wire System that are designated for purchases in Funds which declare dividends at 12:00 p.m. (or such time as set forth in the Fund`s current prospectus), Price Services shall promptly notify the Fund and the Custodian of such deposit.
2.Redemptions
Receive for acceptance redemption requests, including telephone redemptions and requests received from Administrators for distributions to participants or their designated beneficiaries or for payment of fees due the Administrator or such other person, including Price Services, and deliver the appropriate documentation 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 the fee owed on the redemption in accordance with the guidelines established between the Fund and Price Services;
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; 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 shall be deemed receip t by the Fund for purposes of Rule 22c-1 of the Investment Company Act of 1940;
Process distributions and refunds of 529 Plans to participants or others, as directed, in accordance with the 529 Plan`s requirements; and
Process periodic redemption orders as authorized by the investor in accordance with the periodic withdrawal procedures for Systematic Withdrawal Plan ("SWP") and systematic ACH redemptions mutually agreed upon by both parties.
Procedures and requirements for effecting and accepting redemption orders from investors by telephone, Tele*Access, computer, or written instructions shall be established by mutual agreement between Price Services and the Fund consistent with the Fund`s current prospectus.
3.Transfers
Effect transfers of Shares by the registered owners thereof upon receipt of appropriate instructions and documentation and examine such instructions for conformance with appropriate procedures and requirements. In this regard, Price Services, upon receipt of a proper request for transfer, including any transfer involving the surrender of certificates of Shares, is authorized to transfer, on the records of the Fund, Shares of the Fund, including cancellation of surrendered certificates, if any, to credit a like amount of Shares to the transferee.

4.Confirmations
Mail all confirmations and statements as well as other enclosures requested by the Fund to the 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.
5.Returned Checks and ACH Debits
In order to minimize the risk of loss to the Fund by reason of any check being returned unpaid, Price Services will promptly identify and follow-up on any check or ACH debit returned unpaid. For items returned, Price Services may telephone the investor and/or redeposit the check or debit for collection or cancel the purchase, as deemed appropriate. Price Services and the Funds will establish procedures for the collection of money owed the Fund from investors who have caused losses due to these returned items.
6.Redemption of Shares under a Hold
Uncollected Funds. Shares purchased by personal, corporate, governmental check, cashier`s, treasurer`s, certified or official checks or by ACH will be considered uncollecte d until the tenth calendar date following the trade date of the trade ("Uncollected Funds");
Good Funds. Shares purchased by wire transfer or automatically through a shareholder`s paycheck will be considered collected immediately ("Good Funds"). Absent information to the contrary (i.e., notification from the payee institution), Uncollected Funds will be considered Good Funds on the tenth calendar day following trade date.
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 Pri ce 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, tran sfer). 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 to obtain alte rnative instructions for payment.
Confirmations of Available Funds/Bank Account Registrations. The Fund expects that situations may develop whereby it would be beneficial to determine (i) if a person who has placed an order for Shares has sufficient funds in his or her checking account to cover the payment for the Shares purchased or (ii) if the bank account o wner(s) are the same as the Fund Shareholder(s) (i.e., when establishing an account on-line and funding the account via ACH). When this situation occurs, Price Services may call the bank in question and request that it confirm that sufficient funds to cover the purchase are currently credited to the account in question and/or the bank account owner(s) are the same as the mutual fund owner(s). Price Services will maintain written documentation or a recording of each telepho ne call that is made under the procedures outlined above. None of the above procedures shall preclude Price Services from inquiring as to the status of any check received by it in payment for the Fund`s Shares as Price Services may deem appropriate or necessary to protect both the Fund and Price Services. If a conflict arises between Section 2 and this Section 6, Section 6 will govern.
7.Dividends, Distributions and Other Corporate Actions
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 < /font>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 suffic ient funds for the cash amount to be paid out. If an investor is entitled to receive additional Shares by virtue of any such distribution or dividend, appropriate credits will be made to his or her account.

8.Abandoned Property and Lost Shareholders
In accordance with procedures agreed upon by both parties, report abandoned property to appropriate state and governmental authorities of the Fund. Price Services sha ll, 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 and those checks meet a specified dollar threshold. Price Services shall also comply with applicable securities regulations with respect to searching for lost shareholders.
9.Books and Records
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.
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 contra

vene the terms of this Agreement or applicable law and do not materially reduce the level of services described in this Agreement. Price Services shall also use its best efforts to obtain additional statistical and other information as each Fund may reasonably request for additional fees as may be agreed to by both parties.
Any such records maintained pursu ant to Rule 31a-1 under the Investment Company Act of 1940 and 17AD-6 and 7 under the Securities and Exchange Act will be preserved for the periods and maintained in a manner prescribed under the Rules. 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 ca rrying out of this Agreement shall remain confidential, and shall not be voluntarily disclosed to any other person, except after prior notification to and approval by the other party hereto, which approval shall not be unreasonably withheld and may not be withheld where Price Services or the Fund may be exposed to civil or criminal contempt proceedings for failure to comply; when requested to divulge such information by duly constituted governmental authorities; or after so requested by the other party hereto.
10.Authorized Issued and Outstanding Shares
Record the issuance of Shares of the Fund and maintain, pursuant to Rule 17Ad10(e) of the xd4 34 Act, a record of the total number of Shares of the Fund which are authorized, issued and outstanding, based upon data provided to it by the Fund. Price Services shall also provide the Fund on a regular basis the total number of Shares 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.
11.Tax Information
Prepare and file with the Internal Revenue Service and with other appropriate state agencies and, if re quired, mail to investors, those returns for reporting dividends and distributions paid as required to be so filed and mailed, and shall withhold such sums required to be withheld under applicable Federal income tax laws, rules, and regulations. Additionally, Price Services will file and, as applicable, mail to investors, any appropriate information returns required to be filed in connection with Retirement Plan processing, such as 1099R, 5498, as well as any other appropriate forms that the Fund or Price Services may deem necessary. The F und 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.
12.Information to be Furnished to the Fund
Furnish to the Fund such information as may be agreed upon between the Fund and Price Services including any information that the Fund and Price Services agree is necessary to the daily operations of the business.
13.Correspondence
Promptly and fully answer correspondence from shareholders, 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.
14.Lost or Stolen Securities
Pursuant to Rule 17f-1 of the xd4 34 Act, report to the Securities Information Center and/or the FBI or other appropriate person on Form X-17-F-1A all lost, stolen, missing or counterfeit securities. Provide any other services relating to lost, stolen or missing securities as may be mutually agreed upon by both parties.
15.Telephone/Computer Services
Maintain a Telephone Servicing Staff of representatives ("Representatives") sufficient to timely respond to all telephonic inquiries reasonably foreseeable. The Representatives will also effect telephone purchases, redemptions, exchanges, and other transactions mutually agreed upon by both parties, for those Shareholders who have authorized telephone services. The Representatives shall require each Shareholder 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.

16.Collection of Shareholder/Participant Fees/Calculation and Distribution of 12b-1 Fees and Administrative Fee Payments
Shareholder Fees. Calculate and notify shareholders of Funds and participants of 529 Plans of any fees owed the Fund, its affiliates or its agents. Such fees include the small account fee, IRA custodial fee, wire fee and any initial and annual fees for participation in the 529 Plan.
12b-1 Fees and Administrative Fee Payments. Certain Funds have adopted a 12b1 Plan pursuant to the Investment Company Act of 1940 ("12b1 Plan") under which payments to T. Rowe Price Investment Services, Inc. or its designee may be made for distribution, personal and shareholder services performed with respect to Fund shares of a designated class. Such 12b-1 fees may be paid to third parties in consideration of performance of these services. The Funds have also instituted a program whereby they may, in their discretion, pay a third party (e.g., a plan or an intermediary) a fee to compensate the third party for certain expenses incurred as a result of providing administrative services to underlying shareholders of the Funds ("Administrative Fee Payments"). Services agrees to calculate and distribute, on behalf of the Funds, the payments/fees owed to third parties under the Fund`s 12b-1 Plan and Administrative Fee Payment Program.
12b-1 and Administrative Fee Agreements. Each Fund authorizes Price Services to enter into, on its behalf, agreements with third parties for payment of such 12b-1 fees or administrative fee payments in conside ration of such third parties` or their agents` performance of services pursuant to the Fund`s 12b-1 Plan or Administrative Fee Payment Program. Any payments owed under these 12b-1 or Administrative Fee Agreements shall be the obligation of the applicable Fund, not Services.
17.Form N-SAR
Maintain such records, if any, as shall enable the Fund to fulfill the requirements of Form N-SAR.
18.Cooperation With Accountants
Cooperate with each Fund`s independent public accountants and take all reasonable action in the performance of its obligations under the Agreement to assure that the necessary information is made available to such accountants for the expression of their opinion without any qualification as to the scope of their

examination, including, but not limited to, their opinion included in each such Fund`s annual report on Form N-SAR and annual amendment to Form N-1A.
19.Blue Sky
Provide to the Fund or its agent, on a daily, weekly, monthly and quarterly basis, and for each state in which the Fund`s Shares are sold, sales reports and other materials for blue sky compliance purposes as shall be agreed upon by the parties.
20.Other Services
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. The cost of postage and freight for mailing materials to Shareholders and 529 Plan and Retirement Plan participants, or their agents, including overnight deli very, UPS and other express mail services and special courier services required to transport mail between Price Services locations and mail processing vendors.
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.
Communications Print. The printed forms used internally and externally for documentation and processing Shareholder and 529 Plan and Retirement Plan participant, or their agent`s inquiries and requests; paper and envelope supplies for letters, notices, and other written communications sent to Shareholders and Retirement Plan participants, or their agents.
Print & Mail House. The cost of internal and third party printing and mail house services, including printing of statements, prospectuses and reports sent to existing Shareholders.
Voice and Data. The cost of equipment (including associated maintenance), supplies and services used for communicating with and

servicing Shareholders of the Fund and 529 Plan and Retirement Plan participants, or their agents, and other Fund offices or other agents of either the Fund or Price Services. These charges shall include:
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. The cost of maintenance and supplies used to maintain, microfilm, copy, record, index, display, retrieve, and store, in optical disc, microfiche or microfilm form, documents and records.
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.
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 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 xd4 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 o f Trust, as the case may be, and By-Laws to enter into and perform this Agreement;
3.All proceedings required by said Articles of Incorporation or Declaration of Trust, as the case may be, and By-Laws have been taken to authorize it to enter into and perform this Agreement;
4.It is an investment company registered under the Act; and
5.A registration statement under the Securities Act of 1933 ("the xd4 33 Act") is currently effective and will remain effective, and appropriate state securities law filings have been made and will continue to be made, with respect to all Shares of the Fund being offered for sale.
F.Standard of Care/Indemnification
Notwithstanding anything to the contrary in this Agreement:
1.Price Services shall not be liable to any Fund for any act or failure to act by it or its agents or subcontractors on behalf of the Fund in carrying or attempting to carry out the terms and provisions of this Agreement provided Price Services has acted in good faith 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 resp ect 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 co mmitted 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 shareholde rs 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;
IV.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;
V.A certified copy of each amendment to the Articles of Incorporation or Declaration of Trust, and the ByLaws of the Fund;
VI.Certified copies of each vote of the Board of Directors/Trustees authorizing officers to give instructions to the Transfer Agent;
VII.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
VIII.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 sig

nature 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 c irculate any printed matter which contains any reference to Price Services without the prior approval of Price Services, excepting solely such printed matter that merely identifies Price Services as agent of the Fund. The Fund will submit printed matter requiring approval to Price Services in draft form, allowing sufficient time for review by Price Services and its legal counsel prior to any deadline for printing.
J.Compliance with Governmental Rules and Regulations
Except as otherwise provided in the Agreement and except for the accuracy of information furnished to the Fund by Price Services, each Fund assumes full responsibility for the preparation, contents and distribution of its prospectuses and compliance with all applicable requirements of the Act, the xd4 34 Act, the xd4 33 Act, and any other laws, rules and regulations of governmental authorities having jurisdiction over the Fund. Price Services shall be responsible for complying with all laws, rules and regulations of governmental authorities having jurisdiction over transfer agents and their activities.
K.Ownership of Software and Related Material
All computer programs, magnetic tapes, written procedures and similar items purchased and/or developed and used by Price Services in performance of the Agreement shall be the property of Price Services and will not become the property of th e 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 aft er receipt of any such transaction order by Price Services due to an act or omission of Price Services. "As Of

Processing" refers to the processing of these Transactions. If more than one Transaction ("Related Transaction") in the Fund is caused by or occurs as a result of the same act or omission, such transactions shall be aggregated with other transactions in the Fund and be considered as one Transaction.
IX.Reporting
Price Services shall:
1.Utilize a system to identify all Transactions, and shall compute the net effect of such Transactions upon the Fund on a daily, monthly and rolling 365day basis. The monthly and rolling 365day periods are hereafter referred to as "Cumulative."
2.Supply to the Fund, from time to time as mutually agreed upon, a report summarizing the Transactions and the daily and Cumulative net effects of such Transactions both in terms of aggregate dilution and loss ("Dilution") or gain and negative dilution ("Gain") experienced by the Fund, and the impact such Gain or Dilution has had upon the Fund`s net asset value per Share.
3.With respect to any Transaction which causes Dilution to the Fund of $100,000 or more, immediately provide the Fund: (i) a report identifying the Transaction and the Dilution resulting therefrom, (ii) the reason such Transaction was processed as described above, and (iii) the action that Price Services has or intends to take to prevent the reoccurrence of such as of processing ("Report").
X.Liability
1.It will be the normal practice of the Funds not to hold Price Services liable with r espect to any Transaction that causes Dilution to any single Fund of less than $25,000. Price Services will, however, closely monitor for each Fund the daily and Cumulative Gain/Dilution that is caused by Transactions of less than $25,000. When the Cumulative Dilution to any Fund exceeds 3/10 of 1% per share, Price Services, in consultation with counsel to the Fund, will make appropriate inquiry to determine whether it should take any remedial action. Price Services will report to the Board of Directors/Trustees of the Fund ("Board") any action it has taken.

2.Where a Transaction causes Dilution to a Fund greater than $25,000 ("Significant Transaction"), but less than $100,000, Price Services will review with Counsel to the Fund the circumstances surrounding the underlying Transaction to determine whether the Tra nsaction was caused by or occurred as a result of a negligent act or omission by Price Services. If it is determined that the Dilution is the result of a negligent action or omission by Price Services, Price Services and outside counsel for the Fund will negotiate settlement. Significant Transactions greater than $25,000 will be reported to the Audit Committee at its annual meeting (unless the settlement fully compensates the Fund for any Dilution). Any Significant Trans action, however, causing Dilution in excess of the lesser of $100,000 or a penny per share will be promptly reported to the Board and resolved at the next scheduled Board Meeting. Settlement for Significant Transactions causing Dilution of $100,000 or more will not be entered into until approved by the Board. The factors to consider in making any determination regarding the settlement of a Significant Trans action would include but not be limited to:
XI.Procedures and controls adopted by Price Services to prevent As Of Processing;
XII.Whether such procedures and controls were being followed at the time of the Significant Transaction;
XIII.The absolute and relative volume of all transactions processed by Price Services on the day of the Significant Transaction;
XIV.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;
XV.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 w ill normally not be deemed to constitute negligence when it is determined that:
XVI.Price Services had in place "appropriate procedures."

XVII.the employee(s) responsible for the error or omission had been reasonably trained and were being appropriately monitored; and
XVIII.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 appropri ate, 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.
XIX.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
XX.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.
XXI.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.
XXII.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 outofpocket 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 o r 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 furt her 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
BY: /s/Wayne D. O`MeliaBY: /s/Joseph Carrier
DATED: 4/22/03DATED: 4/10/03
L:LglUsersLgl1124WPDATAAGRMNT2003.PriceServices.TransferAgencyAgreement.FINAL.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 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 MidCap Equity Growth Fund
T. Rowe Price Institutional LargeCap Value Fund
T. Rowe Price Institutional SmallCap Stock Fund
T. Rowe Price Institutional LargeCap 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 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 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 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.
< p>
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
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, 2003, between T. Rowe Price Services, Inc., and each of the Parties listed on Appendix A thereto is hereby amended, as of July 23, 2003, by adding thereto T. Rowe Price Institutional Equity Funds, Inc., on behalf of T. Rowe Price Institutional Large-Cap Core Growth Fund.
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. Ro we 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 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 S ERVICES 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 MidCap Equity Growth Fund
T. Rowe Price Institutional LargeCap Value Fund
T. Rowe Pri ce Institutional SmallCap Stock Fund
T. Rowe Price Institutional LargeCap 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 Emergin g 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 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 HO RIZONS 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 Governm ent 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 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
Attest:
/s/Patricia B. Lippert/s/Joseph A. Carrier
Patricia B. LippertBy: Joseph A. Carrier
SecretaryTreasurer
Attest:T. ROWE PRICE SERVICES, INC.
/s/Barbara A. Van Horn/s/Henry H. Hopkins
Barbara A. Van HornBy: Henry H. Hopkins
SecretaryVice President

AMENDMENT NO. 2
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, 2003, between T. Rowe Price Services, Inc., and each of the Parties listed on Appendix A thereto is hereby amended, as of October __, 2003, by adding thereto T. Rowe Price Retirement Funds, Inc., on behalf of T. Rowe Price Retirement 2010 Fund--Advisor Class, T. Rowe Price Retirement 2010 Fund--R Class, T. Rowe Price Retirement 2020 Fund--Advisor Class, T. Rowe Price Retirement 2020 Fund - --R Class, T. Rowe Price Retirement 2030 Fund--Advisor Class, T. Rowe Price Retirement 2030 Fund--R Class, T. Rowe Price Retirement 2040 Fund--Advisor Class, T. Rowe Price Retirement 2040 Fund--R Class, T. Rowe Price Retirement Income Fund--Advisor Class, and T. Rowe Price Retirement Income Fund--R 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 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 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 In dex 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< /font>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 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
< div style="margin-left:0.0";margin-right:0.0";text-indent:0.0";width:100%">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 Fun d--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 Summ it 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.
< p>
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
Attest:
/s/Patricia B. Lippert/s/Joseph A. Carrier
_____________________________________________
Patricia B. LippertBy: Joseph A. Carrier
SecretaryTreasurer
Attest:T. ROWE PRICE SERVICES, INC.
/s/Barbara A. Van Horn/s/Henry H. Hopkins
_____________________________________________
Barbara A. Van HornBy: Henry H. Hopkins
SecretaryVice President
EX-99.H OTH MAT CONT 8 fundacctagmt2003.htm
< b> AGREEMENT
between
T. ROWE PRICE ASSOCIATES, INC.
and
THE T. ROWE PRICE FUNDS
for
FUND ACCOUNTING SERVICES

TABLE OF CONTENTS
Page
Article ATerms of Appointment/Duties of Price Associates1
Article B Fees and Expenses3
Article CRepresentations and Warranties of Price Associates4
Article DRepresentations and Warranties of the Fund4
Article EOwnership of Software and Related Material5
Article FQuality Service Standards5
Article GStandard of Care/Indemnification5
Article HDual Interests7

Article IDocumentation8
Article JRecordkeeping/Confidentiality8
Article KCompliance with Governmental Rules and Regulations8
Article LTerm and Termination of Agreement9
Article MNotice9
Article NAssignment9
Article OAmendment/Interpretive Provisions10
Article PFurther Assurances10
Article QMaryland Law to Apply10
Article R Merger of Agreement10
Article SCounterparts10
Article TThe Parties11
Article UDirectors, Trustee and Shareholders and
Massachusetts Business Trust11
Article VCaptions12

AGREEMENT made as of the first day of January, 2003, 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, M aryland 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 of the Fund has authorized the Fund to utilize various pricing services for the purpose of providing to Price Associates securities prices for the calculation of the Fund`s net asset value.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
A.Terms of Appointment/Duties of Price Associates
Subject to the terms and conditions set forth in this Agreement, the Fund hereby employs and appoints Price Associates to provide, and Price Associates agrees to provide, the following Accounting Services:
1.Maintain for each Fund a daily trial balance, a general ledger, subsidiary records and capital stock accounts;
2.Maintain for each Fund an investment ledger, including amortized bond and foreign dollar denominated costs where applicable;
3.Maintain for each Fund all records relating to the Fund`s income and expenses;
4.Provide for the daily valuation of each Fund`s portfolio securities and the computation of each Fund`s daily net asset value per share ("NAV"). Such daily valuations shall be made in accordance with the valuation policies established by each of the Fund's Board of Directors including, but not limited to, the utilization of such pricing valuation sources and/or pricing services as determined by the Boards.
Price Associates shall have no liability for any losses or damages incurred by the Fund as a result of erroneous por tfolio security evaluations provided by such designated sources and/or pricing services; provided that, Price Associates reasonably believes the prices are accurate, has adhered to its normal verification control procedures, and has otherwise met the standard of care as set forth in Article G of this Agreement;
5.Provide daily cash flow and transaction status information to each Fund`s adviser;
6.Authorize the payment of Fund expenses, either through instruction of custodial bank or utilization of custodian`s automated transfer system;
7.Prepare for each Fund such financial information that is reasonably necessary for shareholder reports, reports to the Board of Directors and to the officers of the Fund, reports to the Securities and Exchange Commission, the Internal Revenue Service and other Federal and state regulatory agencies;
8.Provide each Fund with such advice that may be reasonably necessary to properly account for all financial transactions and to maintain the Fund's accounting procedures and r ecords so as to insure compliance with generally accepted accounting and tax practices and rules;
9.Maintain for each Fund all records that may be reasonably required in connection with the audit performed by each Fund's independent accountant, the Securities and Exchange Commission, the Internal Revenue Service or such other Federal or state regulatory agencies; and
10.Cooperate with each Fund`s independent public accountants and take all reasonable action in the performance of its obligations under the Agreement to assure that the necessary information is made available to such accountants for the expression of their opinion without any qualification as to the scope of their examination including, but not limited to, their opinion included in each such Fun d`s annual report on Form N-SAR and annual amendment to Form N-1A.
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 stan ding under the laws of Maryland.
2.It is duly qualified to carry on its business in Maryland.
3.It is empowered under applicable laws and by its charter and By-Laws to enter into and perform this Agreement.
4.All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.
5.It has, and will continue to have, access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement.
D.Representations and Warranties of the Fund
The Fund represents and warrants to Price Associates that:
1.It is a corporation or business trust, as the case may be, duly organized and existing and in good standing under the laws of Maryland or Massachusetts, as the case may be.
2.It is empowered under applicable laws and by its Articles of Incorporation or Declaration of Trust, as the case may be, and By-Laws have been taken to authorize it to enter into and perform this Agreement.
3.All proceedings required by said Articles of Incorporation or Declaration of Trust, as the case may be, and By-Laws have been taken to authorize it to enter into and perform this Agreement.
E.Ownership of Software and Related Material
All computer programs, magnetic tapes, written procedures, and similar items purchased and/or developed and used by Price Associates in performance of this Agreement shall be the property of Price Associates and will not become the property of the Funds.
F.Quality Service Standards
Price Associates and the Fund may, from time to time, agree to certain quality service standards, with respect to Price Associates` services hereunder.
G.< /font>Standard of Care/Indemnification
Notwithstanding anything to the contrary in this Agreement:
1.Where a pricing error results in loss or dilution to a Fund of less than $10,000, the determination of liability for the error will be made by Price Associates. Where a pricing error results in loss or dilution to a F und of $10,000 or more but less than $100,000, liability for the error will be resolved through negotiations between Fund Counsel and Price Associates. Where a pricing error results in loss or dilution to a Fund of the lesser of 1/2 of 1% of NAV or $100,000 or more, the error will be promptly reported to the Board of Directors of the Fund (unless the Fund is fully compensated for the loss or dilution), provided that final settlement with respect to such errors will not be made until approved by the Board of Directors of the Fund. A summary of all pricing errors and their effect on the Funds will be reported to the Funds` Audit Committee on an annual bas is. In determining the liability of Price Associates for a pricing error, an error or omission will not be deemed to constitute negligence when it is determined that:
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, 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 error s 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 execut ed 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 subcont ractors; 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 na me or in the name of the other party. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other party`s prior written consent.
6.Neither party to this Agreement shall be liable to the other party for consequential damages under any provision of this Agreement.
H.Dual Interests
It is understood that some person or persons may be directors, officers, or shareholders of both the Fund and Price Associates (including Price Associates` affiliates), and that the existence of any such dual interest shall not affect the validity of this Agreement or of any transactions hereunder except as otherwise provided by a specific provision of applicable law.
I.Documentation
As requested by Price Associates, the Fund shall promptly furnish to Price Associates such documents as it may reasonably request and as are necessary for Price Associates to carry out its responsibilities hereunder.
J.Recordkeeping/Confidentiality
1.Price Associates shall keep records relating to the services to be performed hereunder, in the form and mann er as it may deem advisable, provided that Price Associates shall keep all records in such form and in such manner as required by applicable law, including the Investment Company Act of 1940 ("the Act") and the Securities Exchange Act of 1934 ("the xd4 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 b e 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 otherw ise 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 xd4 34 Act, the Securities Act of 1933 ("the xd4 33 Act"), and any laws, rules and regulations of governmental authorities having jurisdiction over the Funds.
< /div>

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 ther eafter 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
Any notice as required by this Agreement shall be sufficiently given (i) when sent to an authorized person of the other party at the address of such party set forth above or at such other address as such party may from time to time specify in writing to the other party; or (ii) as otherwise agreed upon by appropriate officers of the parties hereto.
N.Assignment
Neither this Agreement nor any rights or obligations hereunder may be assigned either voluntarily or involuntarily, by operation of law or otherwise, by either party without the prior written consent of the other party, provided this shall not preclude Price Associates from employing such agents and subcontractors as it deems appropriate to carry out its obligations set forth hereunder.
O.Amendment/Interpretive Provisions
The parties by mutual written agreement may amend this Agreement at any time. In addition, in connection with the operation of this Agreement, Price Associates and the Fund may agree from time to time on such provisions interpretive of or in addition to the provisions of this Agreement as may in their joint opinion be consistent with the general tenor of this Agreement. Any such interpretive or additional provisions are to be signed by all parties and annexed hereto, but no such provision shall contravene any applicable Federal or state law or regulation and no such interpretive or additional provision shall be deemed to be an amendment of this Agreement.
P.Further Assurances
Each party agrees to perform such further acts and execute such further documents as are necessary to effe ctuate 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.< /b>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
A ll references herein to "the Fund" are to each of the Funds listed on Appendix A individually, as if this Agreement were between such individual Fund and Price Associates. In the case of a series Fund or trust, all references to "the Fund" are to the individual series or portfolio of such Fund or trust, or to such Fund or trust on behalf of the individual series or portfolio, as appropriate. The "Fund" also includes any T. Rowe Price Funds 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 li able 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 ex ecuted 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/David Middleton/s/Joseph Carrier
BY: ______________________________BY: ______________________________
DATED: 4/14/03 DATED: 4/10/03
L:TRPPRODEDGAGMTS.EDG2003 Agmts2003 Fund Accounting Service Agreement.fm

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 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< font style="font-size:8.0pt;" face="Times Roman" color="Black">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 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 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 MidCap Equity Growth Fund
T. Rowe Price Institutional LargeCap Value Fund
T. Rowe Price Institutional SmallCap Stock Fund
T. Rowe Price Institutional LargeCap 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 & Mediterr anean 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 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 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, 2003, between T . Rowe Price Associates, Inc. and each of the Parties listed on Appendix A thereto is hereby amended, as of July 23, 2003, by adding thereto T. Rowe Price Institutional Equity Funds, Inc., on behalf of T. Rowe Price Institutional Large-Cap Core Growth 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 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 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
< /p>
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 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 MidCap Equity Growth Fund
T. Rowe Price Institutional LargeCap Value Fund
T. Rowe Price Institutional SmallCap Stock Fund
< font style="font-size:8.0pt;" face="Times Roman" color="Black">T. Rowe Price Institutional LargeCap 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< /div>
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 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 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
< p>
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. LippertJoseph A. Carrier
SecretaryTreasurer
Attest: T. ROWE PRICE ASSOCIATES, INC.
/s/Barbara A. Van Horn/s/Henry H. Hopkins
_____________________________ By: _____________________________
Barbara A. Van HornHenry H. Hopkins
SecretaryVice President

AMENDMENT NO. 2
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, 2003, between T . Rowe Price Associates, Inc. and each of the Parties listed on Appendix A thereto is hereby amended, as of October __, 2003, by adding thereto T. Rowe Price Retirement Funds, Inc., on behalf of T. Rowe Price Retirement 2010 Fund—Advisor Class, T. Rowe Price Retirement 2010 Fund—R Class, T. Rowe Price Retirement 2020 Fund—Advisor Class, T. Rowe Price Retirement 2020 Fund—R Class, T. Rowe Price Retirement 2030 Fund—Advisor Class, T. Rowe Price Retirement 2030 Fund—R Class, T. Rowe Price Retirement 2040 Fund—Advisor Class, T. Rowe Price Retirement 2040 Fund—R Class, T. Rowe Price Retirement Income Fund—Advisor Class, and T. Rowe Price Retirement Income Fund—R Class.
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. Rowe Price Blue Chip Growth Fund--Advi sor 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 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 Po rtfolio
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 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 FUN D, INC.
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 LargeCap 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 INT ERNATIONAL 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 Pric e 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--A dvisor 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 Fun d
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 SPECTRU M 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.
< div style="text-align:Left;margin-left:0.0";margin-right:0.0";text-indent:0.0";width:100%">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
Attest:
/s/Patricia B. Lippert/s/Joseph A. Carrier
< /p>
_____________________________ By: _____________________________
Patricia B. LippertJoseph A. Carrier
SecretaryTreasurer
Attest: T. ROWE PRICE ASSOCIATES, INC.
/s/Barbara A. Van Horn/s/Henry H. Hopkins
_____________________________ By: _____________________________
Barbara A. Van HornHenry H. Hopkins
SecretaryVice President
EX-99.H OTH MAT CONT 9 rpsagmt2003.htm
AGREEMENT
between
T. ROWE PRICE RETIREMENT PLAN SERVICES, INC.
and
T. ROWE PRICE FUNDS

TABLE OF CONTENTS
< b>Page
Article ATerms of Appointment2
Article BDuties of RPS2
1.Contributions - Retirement Plans and Retirement Accounts2
2.Retirement Plans - Redemptions to Cover Distributions3
3.Other Provisions4
4.Exchanges5
5.Books and Records5
6.Tax Information6
7.Other Information to be Furnished to the Funds6
8.Telephone/On-Line Services7
9.Correspondence7
10.Prospectuses/Confirmation Statements7
11.Proxies7
12.Form N-SAR7
13.Withholding8
Article CFees and Expenses 8
1.Postage8
2.Proxies8
3.Communications8
4.Record Retention9
5.Disaster Recovery9
Article DRepresentations and Warranties of RPS9
Article ERepresentations and Warranties of the Fund10
Article FStandard of Care/Indemnification10
Article GDual Interests13
Article HDocumentat ion13
Article IRecordkeeping/Confidentiality15
Article JOwnership of Software and Related Material15
Article KAs of Transactions15
1.Reporting16
2.Liability17
Article LTerm and Termination of Agreement19
Article MNotice19
Article NAssignment19
Article OAmendment/Interpretive Provisions20
Article PFurther Assurances20
Article Q Maryland Law to Apply20
Article RMerger of Agreement20
Article SCounterparts20
Article TThe Parties20
Article UDirectors, Trustees and Shareholders and
Massachusetts Business Trust21
Article VCaptions21

AGREEMENT, made as of the first day of January, 2003, 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 plan s, 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;
WHERE AS, RPS has the capability of providing special services, on behalf of the Fund, for the 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 < font style="font-size:8.0pt;" face="Times Roman" color="Black">of the Securities Exchange Act of 1934 (the "`34 Act");
WHEREAS, RPS may subcontract or jointly contract with other parties on behalf of the Funds to perform certain of the functions described herein, RPS may also enter into, on behalf of the Funds, certain banking relationships to perform various banking services, including, but not limited to, check deposits, disbursements, automatic clearing house transactions ("ACH") and wire transfers. Subject to guidelines mutually agreed upon by the Funds and RPS, excess balances, if any, resulting from these banking relationships will be invested and the income therefrom will be used to offset fees which would otherwise be charged to the Funds under this Agreement;
WHEREAS, the Fund desires to contract with RPS 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:< /font>
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 of Participants based upon instructions received from Participants, Retirement Plans or their designees, or Reti rement 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;
c.Calculate the aggregate of all purchases in the Retirement Accounts and transmit the net purchase order to T. Rowe Price Services, Inc. ("Services") through the National Securities Clearing Corporation ("NSCC") or such other agreed upon method or directly to the Fund, as the case may be, for purchase into an omnibus account established in each Fund registered in RPS` or its affiliates` name as agent for Retirement Plans or in the individual Retirement Plan's name ("Omnibus Account"); and
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.
2.Retirement Plans - Redemptions to Cover Distributions.
After RPS has received instructions from the Administrator regarding distributions to be made to Participants or their designated beneficiaries from Funds designated as investment options under the Retirement Plan, RPS will, as a responsibility under the Agreement:
a.Compute the 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.
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 sha ll 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 t he 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.
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 to elections 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 prescribed under the Rules. 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 as may be agreed upon from time to time between RPS and the Fund. Permission of the Administrator may also be required.
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. Procedures for processing telephone transactions will be mutually agreed upon by both parties. RPS will also be responsible for providing a telephone voice response unit an d on-line access services.
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 fr om 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.Form N-SAR
RPS shall maintain such records, if any, as shall enable the Fund to fulfill the re quirements of Form N-SAR.
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 Retire ment Accounts.
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 u nder 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 s ervices and special courier services required to transport mail between RPS locations and mail processing vendors.
2.Proxies. The cost to mail proxy cards and other material supplied to it by the Fund and costs related to the receipt, examination and tabulation of returned proxies and the certification of the vote to the Fund.
3.Communications
a.Print. The printed forms used internally and externally for documentation and processing Participant, or their agent`s, inquiries and requests; paper and envelope supplies for lett ers, notices, and other written communications sent to Administrators and Participants, or their agents.
b.Print & Mail House. The cost of internal and third party printing and mail house services, including printing of statements, prospectuses and reports to participants with investments in the Funds.
c.Voice and Data. The cost of equipment (including associated maintenance), supplies and services used for communicating with the Participants or their Administrator, the Fund`s transfer agent, other Fund offices, and other agents of either the Fund or RPS. These charges shall include:
tel ephone toll charges (both incoming and outgoing, local, long distance and mailgrams); and
data and telephone lines and associated equipment such as modems, multiplexers, and facsimile equipment.
4.Record Retention. The cost of maintenance and supplies used to maintain, microfilm, copy, record, index, display, retrieve, and store, in optical disc, cd rom or microfiche or microfilm form, documents and records.
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.
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 xd 4 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 perfo rm 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) R PS 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 an d 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 rea sonably 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 part y 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 s uch form and in such manner as required by applicable law, including the Act and the xd4 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. The permission of the Administrator may be required before disclosure is made to the Funds.
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. If more than one Transaction ("Related Transaction") in the Fund is caused by or occurs as a result of the same act or omission, such transactions shall be aggregated with other transactions in the Fund and be considered as one Transaction.
1.Reporting
RPS shall:
a.Utilize a system to identify all Transactions, and shall compute the net effect of such Transactions upon the Fund on a daily, monthly and rolling 365 day basis. The monthly and rolling 365 day periods are hereinafter referred to as "Cumulative."
b.Supply to the Fund, from time to time as mutually agreed upon, a report summarizing the Transactions and the daily and Cumulative net effects of such Transactions both in terms of aggregate dilution and loss ("Dilution") or gain and negative dilution ("Gain") experienced by the Fund, and the impact such Gain or Dilution has had upon the Fund`s net asset value per share.
c.With respect to any Transaction which causes Dilution to the Fund of $100,000 or more, immediately provide the Fund: (i) a report identifying the Transaction and the Dilution resulting therefrom, (ii) the reason such Transaction was processed as described above, and (iii) the action that RPS has or intends to take to prevent the reoccurrence of such as of processing ("Report").
2.Liability
a.It will be the normal practice of the Fund not to hold RPS liable with respect to any Transaction which causes Dilution to any single Fund of less than $25,000. RPS will, however, closely monitor for each Fund the daily and Cumulative Gain/Dilution which is caused by Transactions of less than $25,000. When the Cumulative Dilution to any Fund exceeds 3/10 of 1% per share, RPS, in consultation with counsel to the Fund, will make appropriate inquiry to determine whether it should take any remedial action. RPS wil l report to the Board of Directors/Trustees of the Fund ("Board"), as appropriate, any action it has taken.
b.Where a Transaction causes Dilution to a Fund greater than $25,000 ("Significant Transaction") but less than $100,000, RPS will review with Counsel to the Fund the circumstances surrounding the underlying Significant Transaction to determine whether the Significant Transaction was caused by or occurred as a result of a negligent act or omission by RPS. If it is determined that the Dilution is the result of a negligent action or omission by RPS, RPS and outside counsel for the Fund will negotiate settlement. All such Significant Transactions will be reported to the Audit Committee at its annual meeting (unless the settlement fully compensates the Fund for any Dilution). Any Significant Trans

action, however, causing Dilution in excess of the lesser of $100,000 or a penny per share will be promptly reported to the Board and resolved at the next scheduled Board Meeting. Settlement for Significant Transactions causing Dilution of $100,000 or more will not be entered into until approved by the Board. The factors to consider in making any determination regarding the settlement of a Significant Transaction would include but not be limited to:
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."
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.
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
Any notice as required by this Agreement shall be sufficiently given (i) when sent to an authorized person of the other party at the address of such party set forth above or at such other address as such party may from time to time specify in writing to the other party; or (ii) as otherwise agreed upon by appropriate officers of the parties hereto.
N.Assignment
Neither this Agreement nor any rights or obligations hereunder may be assigned either voluntarily or involuntarily, by operation of law or otherwise, by either party without the prior written consent of the other party.
O.Amendment/Interpretive Provisions
The parties by mutual written agreement may amend this Agreement at any time. In addition, in connection with the operation of this Agreement, RPS and the Fund may agree from time to time on such provisions interpretive of or in addition to the provisions of this Agreement as in their joint op inion 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 un der 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. Any reference in this Agreement to "the parties" shall mean RPS and such other individual Fund as to which the matter pertains. The "Fund" also includes any T. Rowe Price Fund which may be established after the date of this Agreement.
Any reference in this Agreement to "the parties" shall mean the Funds and RPS.
U.Directors, Trustees and Shareholders and Massachusetts Business Trust
It is understood and is expressly stipulated that neither the holders of shares in the Fund nor any Directors or Trustees of the Fund shall be personally liable hereunder. With respect to any Fund which is a party to this Agreement and which is organized as a Massachusetts business trust, the term "Fund" means and refers to the trustees from time to time serving under the applicable trust agreement (Declaration of Trust) of such Trust as the same may be amended from time to time. It is expressly agreed that the obligations of any such Trust hereunder shall not be binding upon any of the trustees, shareholders, nominees, officers, agents or employees of the Trust, personally, but bind only the trust property of the Trust, as provided in the Declaration of Trust of the Trust. The execution and delivery of this Agreement has been authorized by the Trustees and signed by an authorized officer of the Trust, acting as such, and neither such authorization by such Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them, but shall bind only the trust property of the Trust as provided in its Declaration of Trust.
V.Captions
The captions in the Agreement are included for convenience of reference only and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect.
< /div>

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< /b>T. ROWE PRICE FUNDS SERVICES, INC.
/s/Charles Vieth/s/Joseph Carrier
BY: ___________________________BY: ___________________________
/s/Charles Vieth/s/Joseph Carrier
DATED: 4/14/03 DATED: 4/10/03
LHCAgrmnt2003.RPS.ServiceAgreement

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 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 PR ICE 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 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 Discove ry 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 Clas s
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 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 SHORTTER M 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.

AMENDMENT NO. 1
AGREEMENT
Between
T. ROWE PRICE RETIREMENT PLAN SERVICES, INC.
and
EACH OF THE PARTIES INDICATED ON APPENDIX A
The Retirement Plan Services Contract of January 1, 2003, between T. Rowe Price Retirement Plan Services, Inc. and each of the Parties listed on Appendix A thereto is hereby amended, as of July 23, 2003, by adding thereto T. Rowe Price Institutional Equity Funds, Inc., on behalf of T. Rowe Price Institutional Large-Ca p Core Growth 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 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 T RUST, 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 Grow th & 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 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 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
< font style="font-size:9.0pt;" face="Times Roman" color="Black">T. ROWE PRICE VALUE FUND, INC.
Attest:
/s/Patricia B. Lippert/s/Joseph A. Carrier
_____________________________ By: _____________________________
Patricia B. LippertJoseph A. Carrier
SecretaryTreasurer
Attest: T. ROWE PRICE RETIREMENT PLAN SERVICES, INC.
/s/Barbara A. Van Horn/s/Henry H. Hopkins
_____________________________ By: _____________________________
Barbara A. Van HornHenry H. Hopkins
SecretaryVice President

AMENDMENT NO. 2
AGREEMENT
Between
T. ROWE PRICE RETIREMENT PLAN SERVICES, INC.
and
EACH OF THE PARTIES INDICATED ON APPENDIX A
The Retirement Plan Services Contract of January 1, 2003, between T. Rowe Price Retirement Plan Services, Inc. and each of the Parties listed on Appendix A thereto is hereby amended, as of October __, 2003, by adding thereto T. Rowe Price Retirement Funds, Inc., on behalf of T. Rowe Price Retirement 2010 Fund—R Class, T. Rowe Price Retirement 2020 Fund—R Class, T. Rowe Price Retirement 2 030 Fund—R Class, T. Rowe Price Retirement 2040 Fund—R Class, and T. Rowe Price Retirement Income 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 CORPORATE INCOME FUND, INC.
T. ROWE PRICE DEVELOPING TECHNOLOGIES FUND, INC.
T. ROWE PRICE DIVERSIFIED SMALLCAP GROWTH FUND, INC.
T. ROWE PRIC E 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 SMALL< /font>CAP 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.
Attest:
/s/Patricia B. Lippert/s/Joseph A. Carrier
_____________________________ By: _____________________________
Patricia B. LippertJoseph A. Carrier
SecretaryTreasurer
Attest: T. ROWE PRICE RETIREMENT PLAN SERVICES, INC.
/s/Barbara A. Van Horn/s/Henry H. Hopkins
_____________________________ By: _____________________________
Barbara A. Van HornHenry H. Hopkins
SecretaryVice President
EX-99.J OTH MAT CONT 10 nifconsentfm.htm
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectuses and Statement of Additional Information constituting parts of this Post-Effective Amendment No. 55 to the registration statement on Form N-1A (the "Registration St atement") of our report dated June 18, 2003, relating to the financial statements and financial highlights appearing in the May 31, 2003 Annual Reports to Shareholders of T. Rowe Price New Income Fund, Inc., which are 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 Auditors" in the Statement of Additional Information.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Baltimore, MD
September 24, 2003
EX-99.J OTHER OPININ 11 nifopinion.htm
September 23, 2003

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: T. Rowe Price New Income Fund, Inc.
File Nos.: 002-48848/811-2396
Post-Effective Amendment No.: 55

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
EX-99.J OTH MAT CONT 12 poa2003.htm
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 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 INTER NATIONAL 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 P RICE 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 whic h 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 addit ional 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_____________Chairman of the Board (Principal Executive Officer)April 23, 2003
James S. RiepeDirector/Trustee
/s/Joseph A. Carrier____________Treasurer (Principal Financial Officer)April 23, 2003
Joseph A. Carrier
/s/Anthony W. Deering_______Director/TrusteeApril 23, 2003
Anthony W. Deering
/s/Donald W. Dick, Jr._______Director/TrusteeApril 23, 2003
Donald W. Dick, Jr.
TRPPRODEDGAgreementsPower of AttorneyPOA.fm
Power of Attorney
April 23, 2003
Page 2

/s/David K. Fagin______Director/TrusteeApril 23, 2003
David K. Fagin
/s/F. Pierce Linaweaver________Director/TrusteeApril 23, 2003
F. Pierce Linaweaver
/s/_Hanne M. Merriman______Director/TrusteeApril 23, 2003
Hanne M. Merriman
/s/John G. Schreiber_________Director/TrusteeApril 23, 2003
John G. Schreiber
/s/Hubert D. Vos________Director/Trustee< font style="font-size:10.0pt;" face="Berkeley Book" color="Black">April 23, 2003
Hubert D. Vos
/s/Paul M. Wythes___________Director/TrusteeApril 23, 2003
Paul M. Wythes
(Signatures Continued)
Power of Attorney
April 23, 2003
Page 3
TRPPRODEDGAgreementsPower of AttorneyPOA.fm

WILLIAM T. REYNOLDS, Director/Trustee
T. ROWE PRICE CALFORNIA TAX-FREE INCOME TRUST
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. ROWE PRICE GNMA FUND
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE INFLATION PROTECTED BOND FUND, INC.
T. ROWE PRICE INSTITUTIONAL INCOME FUNDS, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE RESERVE INVESTMENT FUNDS, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
T. ROWE PRICE SUMMIT FUNDS, INC.
< font style="font-size:10.0pt;" face="Berkeley Black" color="Black">T. ROWE PRICE SUMMIT MUNICIPAL 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.
WILLIAM T. REYNOLDS, President and Director
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
_/s/William T. Reynold s__________April 23, 2003
William T. Reynolds
(Signatures Continued)
TRPPRODEDGAgreementsPower of AttorneyPOA.fm
Power of Attorney
April 23, 2003
Page 4

M. DAVID TESTA, Director/Trustee
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
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 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 INCOME FUNDS, INC.
T. ROWE PRICE INTERNATIONAL INDEX FUND, 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 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 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.
Power of Attorney
April 23, 2003
Page 5
TRPPRODEDGAgreementsPower of AttorneyPOA.fm

T. ROWE PRICE U.S. BOND INDEX FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
T. ROWE PRICE VALUE FUND, INC.
M. DAVID TESTA, President and Director
T. ROWE PRICE EQUITY SERIES, INC.
T. ROWE PRICE INSTITUTIONAL EQUITY FUNDS, INC.
M. DAVID TESTA, Vice President and Director/Trustee
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. ROWE PRICE RETIREMENT FUNDS, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
/s/M. Davi d Testa_______April 23, 2003
M. David Testa
(Signatures Continued)
TRPPRODEDGAgreementsPower of AttorneyPOA.fm
Power of Attorney
April 23, 2003
Page 6

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 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 V ALUE FUND, INC.
/s/James A.C. Kennedy_________April 23, 2003
James A.C. Kennedy
(Signatures Continued)
Power of Attorney
April 23, 2003
Page 7
TRPPRODEDGAgreementsPower of AttorneyPOA.fm

JOHN H. LAPORTE, Director
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE EQUITY SERIES, INC.
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/Trustee
T. ROWE PRICE NEW HORIZONS FUND, INC.
JOHN H. LAPORTE, Vice President and Director/Trustee
T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
/s/John H. Laporte___________April 23, 2003
John H. Laporte
(Signatures Continued)
TRPPRODEDGAgreementsPower of AttorneyPOA.fm
Power of Attorney
April 23, 2003
Page 8

ATTEST:
_/s/Patricia B. Lippert_______
Patricia B. Lippert, Secretary
Power of Attorney
April 23, 2003
Page 9
TRPPRODEDGAgreementsPower of AttorneyPOA.fm
EX-99.M 12B-1 PLAN 13 niarule12b-1.htm
PLAN PURSUANT TO RULE 12b-1
WHEREAS, the T. Rowe Price New Income Fund, Inc. ("Fund") is an open-end management investment company registered under the Investment Company Act of 1940, as amended ("1940 Act"), and offers for public sale shares of beneficial interest in the Fund;
WHEREAS, the Board of Directors is authorized to establish separate classes of shares of the Fund, and has authorized more than one such class, including the T. Rowe Price New Income Fund—Advisor Class (the "Advisor Class");
WHEREAS, the Fund desires to adopt a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Advisor Class of shares (the "Advisor Class Shares") and the Board of Directors has determined that there is a reasonable likelihood that adoption of said plan will benefit the Fund and the Advisor Class shareholders; and
WHEREAS, the Fund has employed T. Rowe Price Investment Services, Inc. ("Investment Services") as principal underwriter of both classes of shares of the Fund, pursuant to an Underwriting Agreement between Investment Services and the Fund;
NOW, THEREFORE, the Fund hereby adopts this Plan pursuant to Rule 12b-1 ("Plan") with respect to the Advisor Class Shares in accordance with Rule 12b-1 under the 1940 Act on the following terms and conditions:
1. The Fund is authorized to pay to Investment Services, or such other person(s) as it 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 Advisor Class Shares, a fee at an annual rate of no more than 0.25% of the net assets of the Advisor Class Shares, such fee to be calculated and accrued daily and paid monthly or at such other intervals as the Board shall determine.

2. The fees payable hereunder are payable without regard to the aggregate amount that may be paid over the years, provided that the amounts paid hereunder shall not exceed any limitations, including permissible interest, imposed by applicable National Association of Security Dealers, Inc. or Securities and Exchange Commission rules.
3. This Plan shall take effect on May 1, 2003, or such other date as the Directors of the Fund shall determine, and shall continue in effect until April 30, 2004 and for successive periods of one year thereafter for so long as it is initially approved, and such continuance is specifically approved at least annually, by votes of a majority of both (a) the Board of Directors, and (b) those Directors who are not "interested persons" of the Fund, as defined in the 1940 Act and who have no direct or indirect financial interest in the operation of the Pl an or in any agreements related to the Plan (the "Rule 12b-1 Directors"), cast in person at a meeting or meetings called for the purpose of voting on the Plan.
4. Investment Services shall provide, or arrange to be provided, to the Fund`s Board of Directors and the Board shall review, at least quarterly, a written report of the amounts paid hereunder and the purposes for which such expenditures w ere made as required by Rule 12b-1 under the 1940 Act.
5. This Plan may be terminated at any time without penalty by vote of a majority of the Rule 12b-1 Directors or by vote of a majority of the outstanding Advisor Class Shares.
6. This Plan may not be amended to increase materially the amount of fees to be paid by Advisor Class Shares hereunder unless such amendment is approved by a vote of at least a majority of the outstanding Advisor Class Shares (as required by the 1940 Act), and no material amendment to the Plan shall be made unless such amendment is approved in the manner provided in paragraph 3 hereof for annual approval.
7. While the Plan is in effect, the selection and nomination of Directors who are not interested persons of the Fund, as defined in the 1940 Act, shall be committed to the discretion of Directors who are themselves not interested persons.

8. The Fund shall preserve copies of the Plan and any related agreements for a period of not less than six years from the date of expiration of the Plan or agreement, as the case may be, the first two years in an easily accessible place; and shall preserve copies of each report made pursuant to Paragraph 4 hereof for a period of not less than six years from the date of such report, the first two years in an easily accessible place.
Effective as of May 1, 2003.
L:TRPPRODEDGAgreements12b-1 & 18f3 AgreementsNIA RULE 12b-1.fm
EX-99.M 12B-1 PLAN 14 nirrule12b-1.htm
PLAN PURSUANT TO RULE 12b-1
WHEREAS, the T. Rowe Price New Income Fund, Inc. ("Fund") is an open-end management investment company registered under the Investment Company Act of 1940, as amended ("1940 Act"), and offers for public sale shares of beneficial interest in the Fund;
WHEREAS, the Board of Directors is authorized to establish separate classes of shares of the Fund, and has authorized more than one such class, including the T. Rowe Price New Income Fund—R Class (the "R Class");
WHEREAS, the Fund desires to adopt a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the R Class of shares (the "R Class Shares") and the Board of Directors has determined that there is a reasonable likelihood that adoption of said plan will benefit the Fund and the R Class shareholders; and
W HEREAS, the Fund has employed T. Rowe Price Investment Services, Inc. ("Investment Services") as principal underwriter of both classes of shares of the Fund, pursuant to an Underwriting Agreement between Investment Services and the Fund;
NOW, THEREFORE, the Fund hereby adopts this Plan pursuant to Rule 12b-1 ("Plan") with respect to the R Class Shares in accordance with Rule 12b-1 under the 1940 Act on the following terms and conditions:
1. The Fund is authorized to pay to Investment Services, or such other person(s) as it 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 R Class Shares, a fee at an annual rate of no more than 0.50% of the net assets of the R Class Shares, such fee to be calculated and accrued daily and paid monthly or at such other intervals as the Board shall determine.

2. The fees payable hereunder are payable without regard to the aggregate amount that may be paid over the years, provided that the amounts paid hereunder shall not exceed any limitations, including permissible interest, imposed by applicable National Association of Security Dealers, Inc. or Securities and Exchange Commission rules.
3. This Plan shall take effect on May 1, 2003, or such other date as the Directors of the Fund shall determine, and shall continue in effect until April 30, 2004 and for successive periods of one year thereafter for so long as it is initially approved, and such continuance is specifically approved at least annually, by votes of a majority of both (a) the Board of Directors, and (b) those Directors who are not "interested persons" of the Fund, as defined in the 1940 Act and who have no direct or indirect financial interest in the operation of the Pl an or in any agreements related to the Plan (the "Rule 12b-1 Directors"), cast in person at a meeting or meetings called for the purpose of voting on the Plan.
4. Investment Services shall provide, or arrange to be provided, to the Fund`s Board of Directors and the Board shall review, at least quarterly, a written report of the amounts paid hereunder and the purposes for which such expenditures w ere made as required by Rule 12b-1 under the 1940 Act.
5. This Plan may be terminated at any time without penalty by vote of a majority of the Rule 12b-1 Directors or by vote of a majority of the outstanding R Class Shares.
6. This Plan may not be amended to increase materially the amount of fees to be paid by R Class Shares hereunder unless such amendment is approved by a vote of at least a majority of the outstanding R Class Shares (as required by the 1940 Act), and no material amendment to the Plan shall be made unless such amendment is approved in the manner provided in paragraph 3 hereof for annual approval.
7. While the Plan is in effect, the selection and nomination of Directors who are not interested persons of the Fund, as defined in the 1940 Act, shall be committed to the discretion of Directors who a re themselves not interested persons.

8. The Fund shall preserve copies of the Plan and any related agreements for a period of not less than six years from the date of expiration of the Plan or agreement, as the case may be, the first two years in an easily accessible place; and shall preserve copies of each report made pursuant to Paragraph 4 hereof for a period of not less than six years from the date of such report, the first two years in an easily accessible place.
Effective as of May 1, 2003.
L:TRPPRODEDGAgreements12b-1 & 18f3 AgreementsNIR RULE 12b-1.fm
EX-99.P CODE ETH 15 code2002.htm
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 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 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 in the conduct
of their personal investments and to:
eliminate the possibility of a transaction occurring that
the Securities and Exchange Commission 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 pos itions; and
prevent, as well as detect, the misuse of material,
non-public information.
Those subject to the Code, including the independent
directors of Price Group and the Price Funds, 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.
PERSONS SUBJECT TO STATEMENT. The provisions of this Statement
apply as described below to the following persons and entities.
Each person and entity 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 4-4 of this Statement. Access Persons
are subject to all provisions of this Statement except certain
restrictions on purchases in initial public offerings that apply
only to Investment Personnel. Non-Access Persons are subject to
the general principles of the Statement and its reporting
requirements, but are exempt from prior clearance requirements
except for transactions in Price Group stock. The persons and
entities covered by this Statement are:
Price Group. Price Group, each of its subsidiaries and
affiliates, and their retirement plans.
Employee Partnerships. Partnerships such as Pratt Street
Ventures.
Personnel. Each officer, inside director and employee of
Price Group and its subsidiaries and affiliates, including T.
Rowe Price Investment Services, Inc., the principal
underwriter of the Price Funds.
Certain Temporary Workers. These workers include:
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
continue to 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
T. Rowe Price Savings Bank ("Savings Bank") include those
directors of the Savings Ba nk 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 p. 4-17. The independent directors of the
Savings Bank and the Price Funds are exempt from prior
clearance requirements. The independent directors of Price
Group are exempt from the prior clearance requirements except
for 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 (vice president or above) or director (excluding

independent directors) of any of the Price Advisers or the Price
Funds;
any person associated with Price Group or the Price Funds
who, in connection with his or her regular functions or duties,
makes, participates in, or obtains or has access to information
regarding the purchase or sale of securities by a Price Fund or
other advisory client, or whose functions relate to the making of
any recommendations with respect to the purchases or sales; or
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 Pric e 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.
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 generally
p rohibited from investing in initial public offerings. See
pp. 4-11; 4-13.
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.
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.
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 Securities Exchange Act of 1934 ("Exchange
Act"), as defined below.
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 anoth er 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 be subject to this Statement to the same extent
your personal trades would be, unless exempted as described
below.
Definition of Beneficial Owner. A "beneficial owner" is any
person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise, has or
shares in the opportunity, directly or indirectly, to profit or
share in any profit derived from a transaction in the security.
A person has beneficial ownershi p in:
securities held by members of the person's immediate family
sharing the same household, although the presumption of
beneficial ownership may be rebutted;
< /div>
a person's interest in securities held by a trust, which may
include both trust beneficiaries or trustees with investment
control;
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 enti ty and does not have or share
investment control over the entity's portfolio.
Requests for Exemptions. If you have beneficial ownership of a
security, any transaction involving that security is presumed to
be subject to the relevant requirements of this Statement, unless
you have no control over the transaction. Such a situation may
arise, for example, if you have delegated investment authority to
an independent investment adviser, or your spouse has an
independent trading program in which you have no input.
Similarly, if your spouse has investment control over, but no
beneficial ownership in, an unrelated account, an exemption may
be appropriate.
If you 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 approval
and/or reporting requirements, you should submit a written
request for clarification or exemption to either Baltimore
Legal/Compliance or the TRP International Compliance Team, as
appropriate. Any such request for clarification or exemption
should name the account, your interest in the account, the
persons or firms responsible for its management, and the basis
upon which the exemption is being claimed. Exemptions are not
self-executing; any exemption must be granted through Baltimore
Legal/Compliance or the TRP International Compliance Team.
PRIOR CLEARANCE REQUIREMENTS GENERALLY. As described, certain
transactions require prior clearance before execution. Receiving

prior 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 applic able 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
federal 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. The ind ependent
directors of the Price Funds are prohibited from owning the
stock of Price Group.
Quarterly Earnings Report. Generally, all Access Persons and
Non-Access Persons and the independent directors of Price
Group must refrain from initiating transactions in Price
Group stock in which they have a beneficial interest from the
sixth trading day following the end of the quarter (or such
other date as management shall from time to time determine)
until the third trading day following the public release of
earnings. You will be notified in writing through the Office
of the Secretary of Price Group ("Secretary") from time to
time as to the controlling dates.
Prior Clearance of Price Group Stock Transactions Generally.
Access Persons and Non-Access Persons and the independent
directors of Price Group are required to obtain clearance
prior to effecting any proposed transaction (including gifts
and transfers) involving shares of Price Group stock owned
beneficially or through the Employee Stock Purchase Plan. A
transfer includes a change in ownership name of shares of
Price Group stock, including a transfer of the shares into
street name to be held in a securities account and any
transfers of shares of Price Group stock between securities
firms or accounts, including accounts held at the same firm.
Prior Clearance Procedures for Price Group Stock. Requests
for prior clearance must be in writing on the form entitled
"Notification of Proposed Transaction" (available from the

Corporate Records Department and on the firm's Intranet under
Corporate/Corporate Records) and be submitted to the
Secretary, who is responsible for processing and maintaining
the records of all such requests. This includes not only
market transactions, but also sales of stock purchased either
through the Price Group Employee Stock Purchase Plan ("ESPP")
or through a brokerage account if shares of Price Group stock
are transferred there from the ESPP. Purchases effected
through the ESPP are automatically reported to the Secretary.
Prohibition Regarding Transactions in Publicly-Traded Price
Group Options. Transactions in publicly-traded options on
Price Group stock are not permitted.
Applicability of 60-Day Rule to Price Group Stock
Transactions. Transactions in Price Group stock are subject
to the 60-Day Rule except for transactions effected through
the ESPP, the exercise of employee stock options granted by
Price Group, and shares obtained through an established
dividend reinvestment program. 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.
Gifts of Price Group stock, although subject to prior
clearance, are also not subject to this Rule.
Purchases through payroll deduction of Price Group stock in
the ESPP are not considered in determining the applicability
of the 60-Day Rule to market transactions in Price Group
stock. See p. 4-22.
Access Persons and Non-Access Persons and the
independent directors of Price Group must obtain
prior clearance of any transaction involving Price
Group stock from the Office of the Secretary of Price
Group.
Initial Disclosure of Holdings of Price Group Stock. Each
new employee must report to the Secretary any shares of Price
Group stock of which he or she has beneficial ownership no
later than 1 0 days after his or her starting date.
Dividend Reinvestment Plans for Price Group Stock. Purchases

of Price Group stock owned outside of the ESPP and effected
through a dividend reinvestment plan need not receive prior
clearance if the firm has been previously notified by the
employee that he or she will be participating in that plan .
Reporting of transactions effected through that plan need
only be made quarterly, except in the case of employees who
are subject to Section 16 of the Securities Exchange Act of
1934, who must report such transactions at least monthly.
Effectiveness of Prior Clearance. Prior clearance of
transactions in Price Group stock is effective for five (5)
business days from and including the date the clearance is
granted, unless (i) advised to the contrary by the Secretary
prior to the proposed transaction, or (ii) the person
receiving the approval comes into possession of material,
non-public information concerning the firm. If the proposed
transaction in Price Group stock is not executed within this
time period, a new clearance must be obtained before the
individual can execute the proposed transaction.
Reporting of Disposition of Proposed Transaction. You must
use the form returned to you by the Secretary to notify the
Secretary of the disposition (whether the proposed
transaction was effected or not) of each transaction
involving shares of Price Group stock owned directly. The
notice must be returned within two business days of the
trade's execution, or within seven business days of the date
of prior clearance if the trade is not executed.
Insider Reporting and Liability. Under current rules,
certain officers, directors and 10% stockholders of a
publicly traded company ("Insiders") are subject to the
requirements of Section 16. Insiders include the directors
and certain managing directors of Price Group.
SEC Reporting. There are three reporting forms which
Insiders are required to file with the SEC to report their
purchase, sale and transfer transactions in, and holdings of,
Price Group stock. Although the Secretary will provide
assistance in complying with these requirements as an
accommodation to Insiders, it remains the legal
responsibility of each Insider to assure that the applicable
reports are filed in a timely manner.
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, th e Secretary will deliver to the
Insider a Form 3 for appropriate signatures and will file the
form 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 is due by the
10th day following the end of the month in which the ownership
change occurred. Following receipt of the Notice of Disposition
of the proposed transaction, the Secretary will deliver to the
Insider a Form 4, as applicable, for appropriate signatures and
will file the form 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 on a deferred basis on Form 5 within 45 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 Short-Swing 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. TRPA and
Price Group are holding companies of T. Rowe Price Savings
Bank, which is regulated by the OTS. OTS regulations require
the Directors and senior officers of TRPA and Price Group to
file reports regarding their personal holdings of the stock
of Price Group and of the stock of any non-affiliated bank,
savings bank, bank holding company, or savings and loan
holding company. Although the Bank's Compliance Officer will
provide assistance in complying with these requirements as an
accommodation, it remains the responsibility of each person
to ensure that the required reports are filed in a timely
manner.
PRIOR CLEARANCE REQUIREMENTS (OTHER THAN PRICE GROUP STOCK) FOR
ACCESS PERSONS.

All Access Persons must obtain prior clearance before directly or
indirectly initiating, recommending, or in any way participating
in, the purchase or sale of a security in which the Access Person
has, or by reason of such transaction may acquire, any beneficial
interest or which he or she controls, unless exempted below. Non-
Access Persons are not required to obtain prior clearance before
engaging in any securities transactions, except for transactions
in Price Group stock.
Access Persons and Non-Access Persons and the
independent directors of Price Group must obtain
prior clearance of any transaction involving Price
Group stock from the Office of the Secretary of Price
Group.
Where required, prior clearance must be obt ained 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 proced ures do not check compliance with the 60-
Day Rule (p. 4-21); you are responsible for ensuring your
compliance with this rule.
TRANSACTIONS (OTHER THAN IN PRICE GROUP STOCK) THAT ARE EXEMPT
FROM PRIOR CLEARANCE AND REPORTING. The following transactions
are exempt from both the prior clearance and reporting
requirements:
Mutual Funds and Variable Insurance Products. The
purchase or redemption of shares of any open-end
investment companies, including the Price Funds, and
variable insurance products, except that any employee who
serves as the president or executive vice president of a
Price Fund must report his or her beneficial ownership or
control of shares in that Fund to Baltimore
Legal/Compliance through electronic mail to Dottie Jones.
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.,< /font>
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.
TRANSACTIONS (OTHER THAN PRICE GROUP STOCK) THAT ARE EXEMPT FROM
PRIOR 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, including such unit investment
trusts as DIAMONDS, SPYDER and Nasdaq-100 Index Tracking
Stock ("QQQ").
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.
Stock Splits and Similar Acquisitions. The acquisition
of additional shares of ex isting corporate holdings
through stock splits, stock dividends, exercise of
rights, exchange or conversion. Reporting of such
transactions need only be made quarterly.
Mandatory Tenders. Purchases and sales of securities
pursuant to a mandatory tender offer.
Spousal Employee-Sponsored Payroll Deduction Plans.
Purchases by an Access Person's spouse purs uant to an
employee-sponsored payroll deduction plan (e.g., a 401(k)
plan or employee stock purchase plan), provided Baltimore
Legal/Compliance (U.S.-based personnel) or the TRP
International Complianc e 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 need only be made
qua rterly.
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 must receive

prior clearance.
Dividend Reinvestment Plans. Purchases effected through
an established Dividend Reinvestment Plan ("DRP").
Reporting of these transactions may be made quarterly. An
Access Person's purchase of share(s) of the issuer to
initiate participation in the DRP or an Access Person's
purchase of shares in addition to those purchased with
dividends (a "Connected Purchase") and any sale of shares
from the DRP must receive prior clearance.
Systematic Investment Plans/Savings Schemes. Purchases
effected through a systematic investment plan (i.e., a
regular savings scheme or savings plan) involving the
automatic investment of a set dollar or other currency
amount on predetermined dates, provided Baltimore
Legal/Compliance (U.S.-based personnel) or the TRP

International Compliance Team (International personnel)
has been previously notified by the Access Person that he
or she will be participating in the plan or scheme.
Reporting of Systematic Investment Plan/Savings Scheme
transactions need only be made quarterly. An Access
Person's purchase of securities of the issuer to initiate
participation in the plan and any sale of shares from
such a plan must receive pri or clearance.
Inheritances. The acquisition of securities through
inheritance.
Gifts. The giving of or receipt of a security as a gift.
OTHER TRANSACTION REPORTING REQUIREMENTS. Any transaction that
is subject to the prior clearance requirements prior to execution
on behalf of an Access Person, including purchases in initial
public offerings and private placement transactions, must be
reported. Although Non-Access Persons are not required to
receive prior clearance for securities transactions (other than
Price Group stock), they must report any transaction that would
have been required to be prior cleared by an Access Person.
PROCEDURES FOR OBTAINING PRIOR CLEARANCE (OTHER THAN PRICE GROUP
STOCK) FOR ACCESS PERSONS. Unless described as exempt from prior
clearance above or subject to an exemption granted by the
Chairperson of the Ethics Committee, Access Persons must receive
prior clearance for all securities transactions. This includes
transactions in

closed-end funds, including Exchange Traded Funds ("ETFs")
(e.g., iShares; Cubes), and
sector index funds that are closed-end funds.
All Access Persons should follow the procedures set forth below,
depending upon their location, before engaging in the
transactions described.
For U.S. - Based Access Persons:
Procedures For Obtaining Prior 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
if prior written approval has been obtained from the
Chairperson of the Ethics Committee or his or her
designee ("Designee"). An IPO is 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< /div>
requirements of the Securities Exchange Act of 1934.
In considering such a request for approval, 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
determine whether the following conditions have been met:
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 rules on free riding and withholding.
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. Therefore, even after approval has been
obtained from the Chairperson of the Ethics Committee or his

or her Designee, Non-Investment Personnel must check with the
Equity Trading Desk the day the offering is priced before
purchasing in the IPO. This prohibition will remain in effect
until the firm's clients have had the opportunity to purchas e
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 clearance before purchasing< /div>
shares in an IPO, any Non-Access Person who is a
registered representative of Investment Services is
reminded that NASD rules may restrict his or her ability
to buy shares in a "hot issue," which is a n ew issue that
trades at a premium in the secondary market whenever that
trading commences.
Procedures For Obtaining Prior Clearance For Private
Placements. Access Persons may not invest in a private
placement of securities, including the purchase of limited
partnership interests, unless prior written approval has been
obtained from the Chairperson of the Ethics Committee or a
Designee. In considering such a request for approval, 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.
Continuing Obligation. An Access Person who has
received approval to invest in a private placement of
securities and who, at a later date, anticipates
participating in the firm's investment decision process
regarding the purchase or sale of securities of the
issuer of that private placement on behalf of any
client, must immediately disclose his or her prior
investment in the private placement to the 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 Clearance For All Other
Securities Transactions. Requests for prior clearance by
Access Persons for all other securities transactions
requiring prior clearance should generally be made via iTrade
on the firm's intranet to the Equity Trading Department,
which will be responsible for processing and maintaining the
records of all such requests. If iTrade is not available,
requests may be made orally, in writing, or by electronic
mail (e-mail 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, 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 its approval/disapproval.
Requests will normally be processed on the same day; however,
additional time may be required for prior clearance of
transactions in non-U.S. securities.
Effectiveness of Prior Clearance. Prior clearance of a
securities transaction is effective for three (3) business
days from and including the date the clearance is granted,
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. In situations
where it appears that the trade will not be executed within
three business days even though the order was entered in that
time period (e.g., certain transactions through Transfer
Agents or spousal employee-sponsored payroll deduction
plans), please contact Baltimore Legal/Compliance.
Remin der. 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
become subject to the prior clearance requirements.
For International Access Persons:
General Procedures For Obtaining Prior Clearance (Other Than

Price Group Stock) For Access Persons. Requests for prior
clearance may be made by electronic mail or by submitting a
written form to the TRP International Compliance Team. The
TRP International Compliance Team is responsible fo r
processing and maintaining the records of all such requests.
All requests must include the name of the security, the
number of shares or amount of bond involved, and the
estimated value of the requested transa ction.
The TRP International Compliance Team will record whether the
request was approved or disapproved and the date and time of
the approval or disapproval; the reason for any disapproval;
the nature of the transaction (i.e., whether the transaction
is a purchase, sale, short sale, or buy to cover), and
whether the securities are part of a new issue or private
placement.
Responses to all requests will be confirmed by the TRP
International Compliance Team by electronic mail or on a
standard written form documenting the request and its
approval/disapproval.
Requests will normally be processed on the same day they are
received; however, additional time may be required to allow
checks to be made with overseas offices.
Effectiveness of Prior Clearance. Prior clearance of a
securities transaction is effective for three (3) business
days from and including the date the clearance is granted.
If the proposed securities transaction is not executed within
this time, a new clearance must be obtained. For example, if
approval 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 though the order was entered in that time period (e.g.,
an Individual Savings Account), please contact the TRP
International Compliance Team.
Procedures for Obtaining Prior Clearance for Initial Public
Offerings ("IPOs"):
Investment Personnel. Generally Investment Personnel may not
purchase shares in an IPO. However, an exemption from the TRP
International Compliance Team to permit investment in certain
IPOs open to the general public in which allocations are made
by the issuer/syndicate on a purely random basis (lottery) or

on a pro-rata basis per application ("Pro-Rata Offering") may
be available.
Non-Investment Personnel. Access Persons other than
Investment Personnel ("Non-
Investment Personnel") may purchase securities in a Pro-rata
Offering if the following four conditions are met:
The issue is a Pro-Rata Offering;
Residence;
No order for the purchase of any such securities has been
entered by a Price Adviser on behalf of any client; and
The number of shares to be purchased is commensurate with
the normal size and activity of the Access Person's account.
Non-Investment Personnel may also be granted approval to
purchase securities that are the subject of a non-Pro-Rata
Offering. In considering such a request for approval, 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.
Approvals will carry the following conditions:
1. The purchase is made through the Non-Investment
Personnel's regular broker, bank, or from a
syndicate member through a general solicitation
or subscription form, if relevant; and
2. The number of shares to be purchased is
commensurate with the normal size and activity of
the Non-Investment Personnel's account.
All Access Persons. Neither Investment Personnel nor Non-
Investment Personnel will be permitted to purchase in an IPO
if any of the Price Advisers' clients are prohibited from
doing so. This prohibition will remain in effect until these
clients have had the opportunity to purchase in the secondary
market once the underwriting is co mpleted -- commonly
referred to as the aftermarket. In addition, the 60-Day Rule
applies to transactions in securities purchased in an IPO.
Procedures for Obtaining Prior Clearance for Private
Placements. Approval for an Access Person 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 approval 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.
Continuing Obligation. Any Access Person who has
received approval to invest in a private placement of
securities and who, at a later date, anticipates
participating in the firm's investment decision process
regarding the purchase or sale of securities of the
< font style="font-size:12.0pt;" face="Times New Roman" color="Black"> issuer of that private placement on behalf of any client,
must immediately disclose his or her prior investment in
the private placement to the TRP International Compliance
Team.
REASONS FOR DISALLOWING ANY PROPOSED TRANSACTION. A proposed
securities transaction will be disapproved 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 (unless it is determined that an exemption is
appropriate), if:
Pending Client Orders. Orders have been placed by any of
the Price Advisers to purchase or sell the security.
Purchases and Sales Within Seven (7) Calendar Days. The
security has been purchased or sold by any client of a
Price Adviser within seven calendar days immediately
prior to the date of the proposed transaction. For
example, if a client transaction occurs on Monday, an
Access Person may not purchase or sell that security
until Tuesday of the following week. If all clients have
eliminated their holdings in a particular security, the
seven-day restriction is not applicable to 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 a proposed securities
transaction disapproved, he or she must not communicate any
information about the disapproval to another person and must not
cause any other person to enter into such a transaction.
Requests for Waivers of Prior Clearance Denials. If an Access
Person's request for prior clearance has been denied, he or she
may apply to the Chairperson of the Ethics Committee for a
waiver. All such requests must be in writing and must fully
describe the basis upon which the waiver is being requested.
Waivers are not routinely granted.
TRANSACTION CONFIRMATIONS AND PERIODIC ACCOUNT STATEMENTS. All
Access Persons and Non-Access Persons must request
broker-dealers, 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) a s
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.
NOTIFICATION OF SECURITIES ACCOUNTS. All Access Persons 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 e-mail to
Legal/Compliance;
International personnel must give notice in writing (which
may include e-mail) to the TRP International Compliance Team.
New Personnel Subject to the Code. A person subject to the
Code must give written notice as directed above of any
existing securities accounts maintained with any broker,
dealer, investment adviser, bank or other financial
institution within 10 days of association with the firm.
You do not have to report accounts at transfer agents or
similar entities if the only securities in those accounts are
variable insurance products or mutual funds if these are the
only types of securities that can be held or traded in the
accounts. If other securities can be held or traded, the
accounts must be reported. For example, if you have an
account at T. Rowe Price Services, Inc., a transfer agent
that holds shares of a Price Fund, that account is not
reportable. If, however, you have a brokerage account it
must be reported even if the only securities currently held
or traded in it are mutual funds.
Officers, Directors and Registered Representatives of
Investment Services. The NASD requires each associated
person of T. Rowe Price Investment Services, Inc. to:
Obtain approval from Investment Services (whether the
registered person is based in the United States or
internationally) -- the request should be in writing, directed to
Baltimore Legal/Compliance, and submitted before opening or
placing the initial trade in a 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. Each Access Person must
also file with the firm a statement of his or her accounts as
of year-end in January of the following year.
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, then the

associated securities accounts become subject to the account
reporting requirements.
PROCEDURES FOR REPORTING TRANSACTIONS. The following
requirements apply both to Access Persons and Non-Access Persons:
Report Form. If the executing firm provides a confirmation,
contract note or similar statement directly to the firm, you
do not need to make a further report. All other transactions
must be reported on the form designated "T. Rowe Price
Employee's Report of Securities Transactions," which is
available on the firm's Intranet under Corporate/Legal.
When Reports are Due. You must report a securities
transaction within ten (10) days after the trade date or
within (10) days after the date on which you first gain
knowledge of the transaction (for example, a bequest) if this
is later. Reporting of transactions involving a systematic
investment plan/savings scheme, in an established dividend
reinvestment plan, or the purchase of securities by a spouse
pursuant to an employee-sponsored payroll deduction plan,
however, may be reported quarterly.
The TRP International Compliance Team will send all reports
it receives to Baltimore Legal/Compliance on a quarterly
basis.
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.
TRANSACTION REPORTING REQUIREMENTS FOR THE INDEPENDENT DIRECTORS
OF THE PRICE FUNDS, THE INDEPENDENT DIRECTORS OF PRICE GROUP,
AND THE INDEPENDENT DIRECTORS OF THE SAVINGS BANK. The
independent directors of the Price Funds are subject to the same
reporting requirements as Access Persons and Non-Access Persons
except that reports need only be filed quarterly. Specifically:
(1) a report for each securities transaction must be filed with
Baltimore/Legal Compliance no later than ten (10) 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. Baltimore/Legal Compliance will send the
independent directors of the Price Funds a reminder letter and

reporting form approximately ten days prior to the end of each
calendar quarter.
The independent directors of Price Group 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. However, the independent
directors of Price Group are reminded that changes to certain
information reported by the respective independent director in
the Annual Questionnaire for Independent Directors are required
to be reported to Baltimore/Corporate Records (e.g., changes in
holdings of stock of financial institutions or financial
institution holding companies).
The independent directors of the Savings Bank are not required to
report their personal securities transactions except as they may
be specifically requested from time to time to do so by the
Savings Bank in accordance with regulatory or examination
requirements.
MISCELLANEOUS R ULES 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 and Non-Access
Persons and, where indicated, to the independent directors of
Price Group and the Price Funds.
Dealing with Clients. Access Persons, Non-Access Persons and
the independent directors of Price Group and the Price Funds
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 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.
< div style="text-align:Left;margin-left:0.0";margin-right:0.0";text-indent:0.0";width:100%">
Client Investment Partnerships.
Co-Investing. The independent directors of the Price
Funds are not permitted to co-invest in client investment
partnerships of Price Group or its affiliates, such as
Strategic Partners, Threshold, and Recovery.

Direct Investment. The independent directors of the
Price Funds are not permitted to invest as limited
partners in client investment partnerships of Price Group
or its affiliates.
Investment Clubs. These restrictions vary depending upon the
person's status, as follows:
Non-Acce ss Persons. A Non-Access Person may form or
participate in a stock or investment club without
approval of 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
clearance requirements. 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 approval has been obtained from the Chairperson
of the Ethics Committee (U.S.-based personnel) or the
TRP International Compliance Team (international
personnel). All transactions by such a stock or
investment club in which an Access Person has beneficial
ownership or control are subject to the same prior
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,
he or she may request the waiver of prior clearance
requirements of the club's transactions (except for
transactions in Price Group stock) from the Chairperson
of the Ethics Committee or the TRP International
Compliance Team, as appropriate, as part of the approval
process.
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 which 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:
Exempt List Transactions. Although subject to prior
clearance, transactions involving securities in certain large
issuers or in issuers with high trading volumes, within the
parameters set by the Ethics Committee (the "Exempt List"),
will be approved under normal circumstances, as follows:
Transactions Involving Exempt List Securities. This
exemption applies to transactions involving no more than
U.S. $20,000 (all amounts are in U.S. dollars) or the
nearest round lot (even if the amount of the transaction
< div style="text-align:Left;margin-left:0.0";margin-right:0.0";text-indent:0.0";width:100%"> marginally exceeds $20,000) per security per seven (7)
calendar day period in securities of:
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.
Note that if 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 dat e of the proposed transaction, this exemption
is not available.
Transactions Involving Options on Exempt List Securities.
Access Persons may not purchase uncovered put options or
sell uncovered call options unless otherwise permitted

under the "Options and Futures" discussion on p. 4-20.
Otherwise, in the case of options on an individual
security on the Exempt List (if it has not had a
prohibited rating change), an Access Person may trade th e
greater of 5 contracts or sufficient option contracts to
control $20,000 in the underlying security; thus an
Access Person may trade 5 contracts even if this permits
the Access Person to control more than $20,000 in the
underlying security. Similarly, the Access Person may
trade more than 5 contracts as long as the number of
contracts does not permit him or her to control more than
$20,000 in the underlying security. Options transactions
on the stock of Price Group are prohibited. See p. 4-6.
These parameters are subject to change by the Ethics
Committee. An Access Person should be aware that if
prior 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 day
under this exemption.
Transactions Involving Exchange-Traded Index Options.
Generally, an Access Person may trade the greater of 5
contracts or sufficient con tracts to control $20,000 in
the underlying securities; thus an Access Person may
trade 5 contracts even if this permits the Access Person
to control more than $20,000 in the underlying
securit ies. Similarly, the Access Person may trade more
than 5 contracts as long as the number of contracts does
not permit him or her to control more than $20,000 in the
underlying securities. These parameters are subject to
change by the Ethics Committee.
Please note that an option on a Unit Investment Trust
(e.g., QQQ) is not an exchange-traded index option and
does not fall under this provision. See the discussion
under General Information on Options and Futures below.
Client Limit Orders. The Equity Trading Desk or the TRP
International Compliance Team, as appropriate, may approve an
Access Person's proposed trade even if a limit order has been
entered for a client for the same security, if:
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 of approval of the Access Person's trade.
Japanese New Issues. All Access Persons are prohibited from
purchasing a security which is the subject of an IPO in
Japan.
Options and Futures. Please consult the specific section on
Exchange-Traded Index Options above for transactions in those
options.
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 4-21).
General Information on Options and Futures. If a
transaction in the underlying instrument does not
require prior clearance (e.g., National Government
Obligations, Unit Investment Trusts), then an options or
futures transaction on the underlying instrument does
not require prior clearance. However, all options and
futures transactions, except the commodity futures
transactions described on page 4-9, 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. 4-6.
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 an Index account).
Therefore, an Access Person may: (i) purchase cal l
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 Exempt List,
unless purchased in connection with other options on the
same security as part of a straddle, combination or
spread strate gy 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 be approved or
disapproved on a case-by-case basis after due
consideration is given as to whether the proposed
transaction or series of transactions might appear to or
actually create a conflict with the interests of any of
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
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. Short sales by Access Persons are subject to
prior clearance unless the security itself does not otherwise
require prior clearance. In addition, Access Persons may not
sell any security short which is owned by any client of one
of the Price Advisers unless a transaction in that security
would not require prior clearance. All short sales are

subject to the 60-Day Rule described below.
The 60-Day Rule. Access Persons are prohibited from
profiting from the purchase and sale or sale and purchase of
the same (or equivalent) securities within 60 calendar days.
An "equivalent" security means any option, warrant,
convertible security, stock appreciation right, or similar
right with an exercise or conversion privilege at a price
related to the subject security, or similar securities with a
value derived from the value of the subject security. Thus,
for example, the rule prohibits options transactions on or
short sales of a security within 60 days of its purchase. In
addition, the rule applies regardless of the Access Person's
other holdings of the same security or whether the Access
Person has split his or her holdings into tax lots. For
example, if an Access Person buys 100 shares of XYZ stock on
March 1, 1998 and another 100 shares of XYZ stock on February
28, 2002, he or she may not sell any shares of XYZ stock at a
profit for 60 days following February 28, 2002. The 60-Day
Rule "clock" restarts each time the Access Person trades in
that security.
Exemptions from the 60-Day Rule. The 60-Day Rule does
not apply to:
any transaction by a Non-Access Person except for
transactions in Price Group stock not exempted below;
any transaction exempt from prior clearance (e.g., exercise
of corporate stock option by Access Person spouse, systematic
investment plan; see p. 4-9);
any transaction in a security in which either the
acquisition or the sale of that security did not require prior
clearance (e.g., if an Access Person inherits a security, a
transaction that did not require prior 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
< /div>

than 60 days out of the ESPP); and
the exercise of "company-granted" Price Group stock options
and the subsequent sale of the derivative shares.
Prior clearance procedures do not check compliance with
the 60-Day Rule when considering a trading request.
Access Persons are responsible for checking their
compliance with this rule before entering a trade.
< div style="text-align:Left;margin-left:0.0";margin-right:0.0";text-indent:0.0";width:100%">
Access Persons may request a waiver from the 60-Day Rule.
Such requests should be directed in writing to the
Chairperson of the Ethics Committee. These waivers are
not routinely granted.
Investments in Non-Listed Securities Firms. Access Persons
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 as a Nasdaq
stock or permission is given under the private placement
procedures (see pp. 4-11; 4-14).
OWNERSHIP REPORTING REQUIREMENTS - ONE-HALF OF ONE PERCENT
OWNERSHIP. If an employee or an independent director of Price
Group or an independent director of the Price Funds owns more
than 1/2 of 1% of the total outstanding shares of a public or
private company, he or she must immediately report in writing
such fact to Baltimore Legal/Compliance, providing the name of
the company and the total number of such company's shares
beneficially owned. The independent directors of the Savings
Bank are not required to make such reports, except as they may be
specifically requested from time to time to do so by the Savings
Bank in accordance with regulatory or examination requirements.
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, be tting 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 se curities account reporting to Baltimore
Legal/Compliance or the TRP International Compliance Team, even
if these transactions are effected with a speculative investment
objective.

DISCLOSURE OF PERSONAL SECURITIES HOLDINGS BY ACCESS PERSONS.
Upon commencement of employment, appointment or promotion (no
later than 10 days after the starting date), each Access Person
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 and control ("Securities
Holdings Report") (see page 4-4 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 Holding Report will be provided upon
commencement of employment, appointment or promotion and should
be submitted to Baltimore Legal/Compliance (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.
All Access Persons are 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 reports must be as of year end
and be filed with the firm in January of the following year.
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, and Reports of Securities Accounts.
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, Baltimore Legal/Compliance, 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
Directors of Price Group. Upon discovering a material
violation of this Statement by any person or entity other
than an independent director of a Price Fund, the Ethics
Committee will impose such sanctions as it deems appropriate
and as are approved by the Management Committee or the Board
of Directors including, inter alia, a letter of censure or
suspension, a fine, a suspension of trading privileges or

termination of employment and/or officership of the violator.
In addition, the violator may be required to surrender to
Price Group, or to the party or parties it may designate, any
profit realized from any transaction that is in violation o f
this Statement. All material violations of this Statement
shall be reported to the Board of Directors of Price Group
and to the Board of Directors of any Price Fund with respect
to whose securities such violations may have been involved.
Violations by Independent Directors of Price Funds. Upon
discovering a material violation of this Statement by an
independent director of a Price Fund, the Ethics Committee
shall report such violation to the Board on which the
director serves. The Price Fund Boards will impose such
sanctions as they deem appropriate.
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Name of Person	Aggregate Compensation From Fund(a)	Total Compensation From Fund and Fund Complex Paid to Directors(b)
Corporate Income Fund
Anthony W. Deering	$626	$110,000
626	110,000
David K. Fagin	636	112,000
F. Pierce Linaweaver	642	113,000
Hanne M. Merriman	626	110,000
John G. Schreiber	636	112,000
Hubert D. Vos	626	110,000
Paul M. Wythes	636	112,000
GNMA Fund
Anthony W. Deering	$1,333	$110,000
Donald W. Dick, Jr.	1,333	110,000
David K. Fagin	1,358	112,000
F. Pierce Linaweaver	1,369	113,000
Hanne M. Merriman	1,333	110,000
John G. Schreiber	1,358	112,000
Hubert D. Vos	1,333	110,000
Paul M. Wythes	1,358	112,000
High Yield Fund
Anthony W. Deering	$1,818	$110,000
Donald W. Dick, Jr.	1,818	110,000
David K. Fagin	1,852	112,000
F. Pierce Linaweaver	1,870	113,000
Hanne M. Merriman	1,818	110,000
John G. Schreiber	1,852	112,000
Hubert D. Vos	1,818	110,000
Paul M. Wythes	1,852	112,000
Inflation Protected Bond Fund
Anthony W. Deering	$350	$110,000
Donald W. Dick, Jr.	350	110,000
David K. Fagin	360	112,000
F. Pierce Linaweaver	365	113,000
Hanne M. Merriman	350	110,000
John G. Schreiber	360	112,000
Hubert D. Vos	350	110,000
Paul M. Wythes	360	112,000
Institutional High Yield Fund
Anthony W. Deering	$648	$110,000
Donald W. Dick, Jr.	648	110,000
David K. Fagin	659	112,000
F. Pierce Linaweaver	665	113,000
Hanne M. Merriman	648	110,000
John G. Schreiber	659	112,000
Hubert D. Vos	648	110,000
Paul M. Wythes	659	112,000
New Income Fund
Anthony W. Deering	$1,670	$110,000
Donald W. Dick, Jr.	1,670	110,000
David K. Fagin	1,702	112,000
F. Pierce Linaweaver	1,716	113,000
Hanne M. Merriman	1,670	110,000
John G. Schreiber	1,702	112,000
Hubert D. Vos	1,670	110,000
Paul M. Wythes	1,702	112,000
Personal Strategy Balanced Fund
Anthony W. Deering	$937	$110,000
Donald W. Dick, Jr.	937	110,000
David K. Fagin	953	112,000
F. Pierce Linaweaver	962	113,000
Hanne M. Merriman	937	110,000
John G. Schreiber	953	112,000
Hubert D. Vos	937	110,000
Pa ul M. Wythes	953	112,000
Personal Strategy Growth Fund
Anthony W. Deering	$761	$110,000
Donald W. Dick, Jr.< br>	761	110,000
David K. Fagin	776	112,000
F. Pierce Linaweaver	781	113,000
Hanne M. Merriman	761	110,000
John G. Schreiber	776	112,000
Hubert D. Vos	761	110,000
Paul M. Wythes	776	112,000
Personal Strategy Income Fund
Anthony W. Deering	$724	$110,000
Donald W. Dick, Jr.	724	110,000
David K. Fagin	737	112,000
F. Pierce Linaweaver	743	113,000
Hanne M. Merriman	724	110,000
John G. Schreiber	737	112,000
Hubert D. Vos	724	110,000
Paul M. Wythes	737	112,000
Prime Reserve Fund
Anthony W. Deering	$3,732	$110,000
Donald W. Dick, Jr.	3,732	110,000
David K. Fagin	3,802	112,000
F. Pierce Linaweaver	3,836	113,000
Hanne M. Merriman	3,732	110,000
John G. Schreiber	3,802	112,000
Hubert D. Vos	3,732	110,000
Paul M. Wythes	3,802	112,000
Short-Term Bond Fund
Anthony W. Deering	$1,046	$110,000
Donald W. Dick, Jr.	1,046	110,000
David K. Fagin	1,065	112,000
F. Pierce Linaweaver	1,075	113,000
Hanne M. Merriman	1,046	110,000
John G. Schreiber	1,065	112,000
Hubert D. Vos	1,046	110,000
Paul M. Wythes	1,065	112,000
U.S. Treasury Intermediate Fund
Anthony W. Deering	$781	$110,000
Donald W. Dick, Jr.	781	110,000
David K. Fagin	795	112,000
F. Pierce Linaweaver	801	113,000
Hanne M. Merriman	781	110,000
John G. Schreiber	795	112,000
Hubert D. Vos	781	110,000
Paul M. Wythes	795	112,000
U.S. Treasury Long-Term Fund
Anthony W. Deering	$743	$110,000
Donald W. Dick, Jr.	743	110,000
David K. Fagin	756	112,000
F. Pierce Linaweaver	762	113,000
Hanne M. Merriman	743	110,000
John G. Schreiber	756	112< /font>,000
Hubert D. Vos	743	110,000
Paul M. Wythes	756	112,000
U.S. Treasury Money Fund
Anthony W. Deering	$1,165	$110,000
Donald W. Dick, Jr.	1,165	110,000
David K. Fagin	1,187	112,000
F. Pierce Linaweaver	1,198	113,000
Hanne M. Merriman	1,165	110,000
John G. Schreiber	1,187	112,000
Hubert D. Vos	1,165	110,000
Paul M. Wythes	1,187	112,000

	Deering	Dick	Fagin	Linaweaver	Schreiber	Vos	Wythes
Aggregate Holdings, All Funds	over $100,000	over $100,000	over $100,000	over $100,000	over $100,000	over $100,000	over $100,000
Balanced Fund	None	None	None	over $100,000	None	None	None
Blue Chip Growth Fund	None	$10,001-$50,000	$50,001-$100,000	None	None	None	None
Blue Chip Growth Fund—Advisor Class	None	None	None	None	None	None	None
Blue Chip Growth Fund—R Class	None	None	None	None	None	None	None
Blue Chip Growth Portfolio	None	None	None	None	None	None	None
Blue Chip Growth Portfolio—II	None	None	None	None	None	None	None
California Tax-Free Bond Fund	None	None	None	None	None	None	None
California Tax-Free Money Fund	None	None	None	None	None	None	None
Capital Appreciation Fund	None	over $100,000	None	None	None	None	None
Capital Opportunity Fund	None	None	None	None	None	None < /td>	None
Corporate Income Fund	None	None	None	None	None	None	None
Developing Technologies Fund	None	None	None	None	None	None	None
Diversified Small-Cap Growth Fund	None	None	None	None	None	None	None
Dividend Growth Fund	None	None	$10,001-$50,000	None	None	None	None
Emerging Europe & Mediterranean Fund	None	None	None	None	None	None	None
Emerging Markets Bond Fund	None	None	None	None	None	None
Emerging Markets Stock Fund	None	None	None	None	None	None	None
Equity Income Fund	None	$50,001-$100,000	$10,001-$50,000	None	None	$10,001-$50,000	None
Equity Income Fund—Advisor Class	None	None	None	None	None	None	None
Equity Income Fund— R Class	None	None	None	None	None	None	None
Equity Income Portfolio	None	< font style="font-size:10.0pt;" face="Courier">None	None	None	None	None	None
Equity Income Portfolio—II	None	None	None	None< /font>	None	None	None
Equity Index 500 Fund	None	None	None	None	None	None	None
Equity Index 500 Portfolio	None	None	None	None	None	None	None
European Stock Fund	$50,001-$100,000	$10,00 1-$50,000	$10,001-$50,000	None	None	None	None
Extended Equity Market Index Fund	None	None	None	None	None	None	None
Financial Services Fund	None	$10,001-$50,000	None	None	None	None	N one
Florida Intermediate Tax-Free Fund	None	None	None	None	None	None	None
Georgia Tax-Free Bond Fund	None	None	None	None	None	None	None
Global Stock Fund	None	None	None	None	Non e	None	None
Global Technology Fund	None	None	None	None	None	None	None
GNMA Fund	None	None	None	None	over $100,000	None	None
Government Reserve Investment Fund	None	None	None	None	None	None	None
Growth & Income Fund	None	$1-$10,000	None	None	over $100,000	None	$10,001-$50,000
Growth Stock Fund	None	$10,001-$50,000	None	$10,001-$50,000	None	None	None
Growth Stock Fund—Advisor Class	None	None	None	None	None	None	None
Growth Stock Fund— R Class	None	None	None	None	None	None	None
Health Sciences Fund	None	$10,001-$50,000	None	None	None	$10,001-$50,000	$1-$10,000
Health Sciences Portfolio	None	None	None	None	None	None	None
Health Sciences Portfolio—II	None	None	None	None	None	None	None
High Yield Fund	None	$10,001-$50,000	None	over $100,000	over $100,000	None	None
High Yield Fu nd—Advisor Class	None	None	None	None	None	None	None
Inflation Protected Bond Fund	None	None	None	None	None	None	None
Institutional Emerging Markets Equity Fund	None	None	None	None	None	None
Institutional Foreign Equity Fund	None	None	None	None	None	None	None
Institutional High Yield Fund	None	None	None	None	None	None	None
Institutional Large-Cap Growth Fund	None	None	None	None	None	None	None
Institutional Large-Cap Value Fund	None	None	None	None	None	None	None
Institutional Mid-Cap Equity Growth Fund	None	None	None	None	None	None	None
Institutional Small-Cap Stock Fund	None	None	None	None	None	None	None
International Bond Fund	None	$10,001-$50,000	None	None	None	None	None
International Bond Fund—Advisor Class	None	None	None	None	None	None	None
International Discovery Fund	$10,001-$50,000	$10,001-$50,000	None	over $100,000	None	None	over $100,000
International Equity Index Fund	None	None	None	None	None	None	None
International Growth & Income Fund	None	None	None	None	None	None	None
International Growth & Income Fund—Advisor Class	None	None	None	None	None	None	None
International Growth & Income Fund—R Cl ass	None	None	None	None	None	None	None
International Stock Fund	over $100,000	None	over $100,000	None	None	None	None
International Stock Fund—Advisor Class	None	None	None	None	None	None	None
International Stock Fund—R Class	None	None	None	None	None	None	None
International Stock Portfolio	None	None	None	None	None	None	None
Japan Fund	None	None	None	None	None	None	None
Latin America Fund	None	None	None	None	None	None	None
Limited-Term Bond Portfolio	None	None	None	None	None	None	None
Maryland Short-Term Tax-Free Bond Fund	None	None	None	None	None	None	None
Maryland Tax-Free Bond Fund	None	None	None	None	None	None	None
Maryland Tax-Free Money Fund	None	None	None	None	None	None	None
Media & Telecommunications Fund	$10,001-$50,000	None	None	None	None	None	None
Mid-Cap Growth Fund	None	$10,001-$50,000	over $100,000	None	None	$10,001-$50,000	None
Mid-Cap Growth Fund—Advisor Class	None	None	None	None	None	None	None
Mid-Cap Growth Fund— R Class	None	None	None	None	None	None	None
Mid-Cap Growth Portfolio	None	None	None	None	None	None	None
Mid-Cap Growth Portfolio—II	None	None	None	None	None	None	None
Mid-Cap Value Fund	None	None	None	None	None	None	None
Mid-Cap Value Fund—Advisor Class	None	None	None	None	None	None	None
Mid-Cap Value Fund— R Class	None	None	None	None	None	None	None
New America Growth Fund	None	None	None	over $100,000	None	None	$10,001-$50,000
New America Growth Portfolio	None	None	None	None	None	None	None
New Asia Fund	None	None	$10,001-$50,000	None	None	None	None
New Era Fund	None	None	None	None	None	$10,001-$50,000	None
New Horizons Fund	over $100,000	$10,001-$50,000	$1-$10,000	over $100,000	None	$10,001-$50,000	$50,001-$100,000
New Income Fund	None	$50,001-$100,000	None	None	over $100,000	None	None
New Income Fund—Advisor Class	None	None	None	None	None	None	None
New Income Fund— R Class	None	None	None	None	None	None	None
New Jersey Tax-Free Bond Fund	None	None	None	None	None	None	None
New York Tax-Free Bond Fund	None	None	None	None	None	None	None
New York Tax-Free Money Fund	None	None	None	None	None	None	None
Personal Strategy Balanced Fund	None	None	None	None	None	None	None
Personal Strategy Balanced Portfolio	None	None	None	None	None	None	None
Personal Strategy Growth Fund	None	None	None	None	None	None	None
Personal Strategy Income Fund	None	None	None	None	None	None	None
Prime Reserve Fund	None	over $100,000	None	$10,001-$50,000	$10,001-$50,000	None	None
Prime Reserve Portfolio	None	None	None	None	None	None	None
Real Estate Fund	None	None	None	None	None	None	None
Reserve Investment Fund	None	None	None	None	None	None	None
Retirement 2010 Fund	None	None	None	None	None	None	None
Retirement 2020 Fund	None	None	None	None	None	None	None
Retirement 2030 Fund	None	None	None	None	None	None	None
Retirement 2040 Fund	None	None	None	None	None	None	None
Retirement Income Fund	None	None	None	None	None	None	None
Science & Technology Fund	None	None	None	None	None	$10,001-$50,000	$10,001-$50,000
Science & Technology Fund—Advisor Class	None	None	None	None	None	None	None
Short-Term Bond Fund	None	None	$50,001-$100,000	None	over $100,000	None	None
Small-Cap Stock Fund	None	$10,001-$50,000	over $100,000	None	None	$10,001-$50,000	None
Small-Cap Stock Fund—Advisor Class	None	None	None	None	None	None	None
Small-Cap Va lue Fund	None	$10,001-$50,000	None	None	None	$10,001-$50,000	$10,001-$50,000
Small-Cap Value Fund—Advisor Class	None	None	None	None	None	None	None
Spectrum Growth Fund	None	None	None	None	None	None	None
Spectrum Income Fund	None	None	None	None	None	None	None
Spectrum International Fund	None	None	None	None	None	None	None
Summit Cash Reserves Fund	None	over $100,000	over $100,000	None	over $100,000	None	None
Summit GNMA Fund	None	None	None	None	None	None	None
Summit Municipal Income Fund	None	None	None	None	over $100,000	None	None
Summit Municipal Intermediate Fund	None	None	None	None	over $100,000	None	None
Summit Municipal Money Market Fund	None	None	None	None	over $100,000	None	None
Tax-Efficient Balanced Fund	None	None	$50,001-$100,000	None	None	None	None
Tax-Efficient Growth Fund	None	None	$10,001-$50,000	None	None	None	None
Tax-Efficient Multi-Cap Growth Fund	None	None	None	None	None	None	None < /td>
Tax-Exempt Money Fund	None	None	None	None	over $100,000	None	None
Tax-Free High Yield Fund	None	None	None	None	over $100,000	None	None
Tax-Free Income Fund	None	None	None	None	over $100,000	None	None
Tax-Free Income Fund—Advisor Class	None	None	None	None	None	None	None
Tax-Free Intermediate Bond Fund	None	None	None	None	None	None	None
Tax-Free Short-Intermediate Fund	None	None	None	None	over $100,000	None	None
Total Equity Market Index Fund	None	None	None	None	None	None
U.S. Bond Index Fund	None	None	None	None	None	None	None
U.S. Treasury Intermediate Fund	None	over $100,000	None	None	over $100,000	None	None
U.S. Treasury Long-Term Fund	None	None	None	None	over $100,000	None	None
U.S. Treasury Money Fund	None	None	None	None	over $100,000	None	None
Value Fund	None	$10,001-$50,000	$50,001-$100,000	None	over $100,000	None	over $100,000
Value Fund—Advisor Class	None	None	None	None	None	None	None
Virginia Tax-Free Bond Fund	None	None	None	None	None	None	None

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 $3 0 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

Corporate Income Fund	0.15%
GNMA Fund	0.15
High Yield Fund	0.30
Inflation Protected Bond Fund	0.05
New Income Fund	0.15
Personal Strategy Balanced Fund	0.25
Personal Strategy Growth Fund	0.30
Personal Strategy Income Fund	0.15
Prime Reserve Fund	0.05
Short-Term Bond Fund	0.10
U.S. Treasury Intermediate Fund	0.05
U.S. Treasury Long-Term Fund	0.05
U.S. Treasury Money Fund	0.00

Fund	2003	2002	2001
Corporate Income	$297,000	$232,000	$124,000
GNMA	6,528,000	5,287,000	5,005,000
High Yield*	14,527,000	10,173,000	9,413,000
Inflation Protected Bond	0	(a)	(a)
Institutional High Yield	796,000	(a)	(a)
New Income**	9,469,000	8,361,000	7,887,000
Personal Strategy Balanced	3,071,000	3,775,000	3,604,000
Personal Strategy Growth	1,561,000	1,908,000	1,696,000
Personal Strategy Income	747,000	1,092, 000	914,000
Prime Reserve	21,177,000	21,485,000	21,004,000
Short-Term Bond	3,014,000	1,881,000	1,219,000
U.S. Treasury Intermediate	1,404,000	1,001,000	869,000
U.S. Treasury Long-Term	1,094,000	1,147,000	1,128,000
U.S. Treasury Money	3,442,000	3,163,000	2,945,000

Fund	Limitation Period	Expense Ratio Limitation	Reimbursement Date
Corporate Income(a)	June 1, 2003—September 30, 2005	0.80%	September 30, 2007
Inflation Protected Bond	October 31, 2002—September 30, 2004	0.50%	September 30, 2006
New Income Fund—Advisor Class	September 30, 2002—September 30, 2004	0.90%	September 30, 2006
New Income Fund —R Class	September 30, 2002—September 30, 2004	1.15%	September 30, 2006
Personal Strategy Balanced	November 1, 2002—September 30, 2004	0.90%	September 30, 2006
Personal Strategy Growth (b)	June 1, 2002—September 30, 2004	1.00%	September 30, 2006
Personal Strategy Income (c)	June 1, 2002—September 30, 2004	0.80%	September 30, 2006
Short-Term Bond(d)	June 1, 2002—September 30, 2004	0.55%	September 30, 2006

Fund	2003	2002	2001
Corporate Income	$92,000	$84,000	$84,000
GNMA	104,000	104,000	104,000
Government Reserve Investment	64,000	64,000	64,000
High Yield	116,000	136,000	142,000
High Yield Fund—Advisor Class	21,000	3,000	(a)
Inflation Protected Bond	61,000	(b)	(b)
Institutional High Yield	104,000	(b)	(b)
New Income	130,000	109,000	106,000
Personal Strategy Balanced	93,000	85,000	85,000
Personal Strategy Growth	93,000	84,000	84,000
Personal Strategy Income	93,000	85,000	84,000
Prime Reserve	93,000	98,000	98,000
Reserve Investment	72,000	64,000	< font style="font-size:10.0pt;" face="Courier">64,000
Short-Term Bond	84,000	84,000	84,000
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

GNMA Fund	$11,212
High Yield Fund	48,330
New Income Fund	19,948
Personal Strategy Balanced Fund	53,504
Personal Strategy Growth Fund	44,962
Personal Strategy Income Fund	22,291
Prime Reserve Fund	26,583
U.S. Treasury Long-Term Fund	203
U.S. Treasury Money Fund	29,590

High Yield Fund—Advisor Class	$925,000
New Income Fund—R Class	1,000

Fund	2003	2002	2001
Corporate Income	$121,000	$103,000	$103,000
GNMA	13,000	0	0
High Yield	14,294,000	9,189,000	7,746,000
Inflation Protected Bond	121,000	(a)	(a)
Institutional High Yield	1,291,000	(a)	(a)
New Income	1,343,000	1,734,000	1,387,000
Personal Strategy Balanced	654,000	564,000
Personal Strategy Growth	311,000	374,000	218,000
Personal Strategy Income	257,000	332,000	215,000
Short-Term Bond	302,000	217,000	217,000
U.S. Treasury Intermediate	11,000	0	0
U.S. Treasury Long-Term	12,000	0	0

Fund	2003	2002	2001
Corporate Income	92.9%	91.1%	98.1%
GNMA(a)	385.8	145.2	71.2
High Yield	59.9	71.3	80.1
Inflation Protected Bond	35.6*	(b)	(b)
Institutional High Yield	72.3	(b)	(b)
New Income	221.2	222.0	112.1
Personal Strategy Balanced	87.8	97.2	61.5
Personal Strategy Growth	52.5	68.4	54.8
Personal Strategy Income	108.5	115.9	79.8
Short-Term Bond(a)	110.1	49.9	77.6
U.S. Treasury Intermediate	105.6	104.4	108.0
U.S. Treasury Long-Term	65.5	48.5	31.3

Cumulative Performance Percentage Change Periods Ended 5/31/03
Fund	1 Yr.	5 Yrs.	10 Yrs.	Since Inception	Inception Date
Corporate Income	12.86%	34.34%	&# 151;	69.10%	10/31/95
GNMA	7.07< br>	37.72	89.61%	264.38	11/26/85
High Yield	10.53	21.39	88.55	376.32	12/31/84
High Yield Fund—Advisor Class	—	—	17.10	03/31/00
Inflation Protected Bond	—	—	—	10.40	10/31/02
Institutional High Yield	13.78	—	—	13.78	05/31/02
New Income	10.52	36.84	90.85	1,023.81	08/31/73
New Income Fund—Advisor Class	< font style="font-size:10.0pt;" face="Courier">—	—	—	7.02	09/30/02
New Income Fund—R Class	—	—	—	6.84	09/30/02
Personal Strategy Balanced	0.01	18.21	—	122.73	07/29/94
Personal Strategy Growth	-3.68	11.65	—	132.01	07/29/94
Personal Strategy Income	2.80	23.39	—	112.09	07/29/94
Prime Reserve	1.01	20.79	51.07	512.48	01/26/76
Short-Term Bond	6.74	35.18	68.30	263.72	03/02/84
U.S. Treasury Intermediate	12.89	44.90	92.62	176.64	09/29/89
U.S. Treasury Long-Term	19.57	50.24	123.72	225.66	09/29/89
U.S. Treasury Money	1.02	19.31	47.83	198.77	06/28/82

ANNUAL REPORT REFERENCES:
	corporate income	PRIME RESERVE
Financial Highlights, May 31, 2003	11	11
Statement of Net Assets, May 31, 2003	12-24	12-18
Statement of Operations, year ended May 31, 2003	25	19
Statement of Changes in Net Assets, years ended May 31, 2003, and May 31, 2002	26	20
Notes to Financial Statements, May 31, 2003	27-32	21-23
Report of Independent Auditors	33	24

	Inflation protected BOND
Financial Highlights, period from October 31, 2002 (commencement of operations) through Ma y 31, 2003	11
Statement of Net Assets, May 31, 2003	12-13
Statement of Operations, period from October 31, 2002 (commencement of operations) through May 31, 2003	14
Statement of Changes in Net Assets, period from October 31, 2002 (commencement of operations) through May 31, 2003	15
Notes to Financial Statements, May 31, 2003	16-19
Report of Independent Auditors	20

	GNMA	New Income	short-TERM BOND
Financial Highlights, May 31, 2003	11	13	9
Portfolio of Investments, May 31, 2003	12-14	16-28	10-18
Statement of Assets and Liabilities, May 31, 2003	15	29	19
Statement of Operations, year ended May 31, 2003	16	30-31	20
Statement of Changes in Net Assets, years ended May 31, 2003, and May 31, 2002	17	32-33	21
Notes to Financial Statements, May 31, 2003	18-22	34-41	22-27
Report of Independent Auditors	23	42	28

	InSTITUTIONAL HIGH YIELD
Financial Highlights, period from May 31, 2002 (commencement of operations) through May 31, 2003	10
Portfolio of Investments, May 31, 2003	11-19
Statement of Assets and Liabilities, May 31, 2003	20
Statement of Operations, period from May 31, 2002 (commencement of operations) through May 31, 2003	21
Statement of Changes in Net Assets, period fromMay 31, 2002 (commencement of operations) through May 31, 2003	22
Notes to Financial Statements, May 31, 2003	23-25
Report of Independent Auditors	26

	NEW INCOME FUND—Advisor CLASS	New InCOME FUND—R CLASS
Financial Highlights, period fromSeptember 30, 2002 (commencement of operations) through May 31, 2003	14	15
Portf olio of Investments, May 31, 2003	16-28	16-28
Statement of Assets and Liabilities,May 31, 2003	29	29
Statement of Operations, year endedMay 31, 2003	30-31	30-31
Statement of Changes in Net Assets, years ended May 31, 2003, and May 31, 2002	32-33	32-33
Notes to Financial Statements, May 31, 2003	34-41	34-41
Report of Independent Auditors	42	42

	pERSONAL STRATEGY BALANCED	PERSONAL STRATEGY GROWTH	PERSONAL STRATEGY INCOME
Financial Highlights, May 31, 2003	5	5	5
Portfolio of Investments, May 31, 2003	6-36	—	6-36
Statement of Net Assets, May 31, 2003	—	6-37	—
Statement of Assets and Liabilities, May 31, 2003	37	—	37
Statement of Operations, year ended May 31, 2003	38	38	38
Statement of Changes in Net Assets, years ended May 31, 2003, and May 31, 2002	39	39	39
Notes to Financial Statements, May 31, 2003	40-46	40-45	40-45
Report of Independent Auditors	46	46

	High yield	High YielD Fund—Advisor class
Financial Highlights, May 31, 2003	15	16
Statement of Net Assets, May 31, 2003	17-35	17-35
Statement of Operations, year ended May 31, 2003	36-37	36-37
Statement of Changes in Net Assets, years ended May 31, 2003, and May 31, 2002	38-39	38-39
Notes to Financial Statements, May 31, 2003	40-45	40-45
Report of Independent Auditors	46	46

	U.S. TREASURY INTERMEDIATE	U.S. TREASURY LONG-TERM	U.S. TREASURY MONEY
Financial Highlights, May 31, 2003	20	21	19
Statement of Net Assets, May 31, 2003	24-26	27-29	22-23
Statement of Operations, year ended May 31, 2003	30	30	30
Statement of Changes in Net Assets, years ended May 31, 2003, and May 31, 2002	32	33	31
Notes to Financial Statements, May 31, 2003	34-38	34-38	34-38
Report of Independent Auditors	39	39	39

	Reserve INvestment	Government Reserve investment
Financial Highlights, May 31, 2003	11	12
Statement of Net Assets, May 31, 2003	13-20	21-22
Statement of Operations, year ended May 31, 2003	23	23
Statement of Changes in Net Assets, years ended May 31, 2003, and May 31, 2002	24	25
Notes to Financial Statements, May 31, 2003	26-28	26-28
Report of Independent Auditors	29	29

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
Patricia M. Archer	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 Pres ident	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
Laura H. Chasney	Vice President	None
Renee M. Christoff	Vice President	None
Jerome A. Clark	Vice President	None
Joseph A. Crumbling	Vice President	None
Christine S. Fahlund	Vice President	None
Laurie L. Fierro	Vice President	None
Forrest R. Foss	Vice President	None
Thomas A. Gannon	Vice President	None
John R. Gilner	Vice 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
David A. Hueser	Vice President	None
Christopher A. Jarmush	Vice President	None
Thomas Kazmierczak, Jr.	Vice President	None
Salvador G. LaBella	Vice President	None
Cynthia W. LaRue	Vice President	None
Steven A. Larson	Vice President	None
Gayle A. Lomax	Vice President	None
Gayatri Malik	Vice President	None
Sarah McCafferty	Vice President	None
Barry Mike	Vice President	None
Mark J. Mitchell	Vice President	None
Nancy M. Morris	Vice President	< font style="font-size:12.0pt;" face="Courier New" color="Black">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
Regina M. Pizzonia	Vice President	None
Kathleen G. Polk	Vice President	None
Pamela D. Preston	Vice President	None
Kylelane Purcell	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
Carole H. Smith	Vice President	None
Scott Such	Vice President	None
Jerome Tuccille	Vice President	None
Natalie C. Widdo wson	Vice President	None
Barbara A. O`Connor	Treasurer	None
Barbara A. Van Horn	Secretary	None
Kimberly B. Andersen	Assistant Vice President	None
Shane Baldino	Assistant Vice President	None
S. Oli via 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
Elizabeth A. Cairns	Assistant Vice President	None
Sheila P. Callahan	Assistant Vice President	None
Patricia M. Cannon	Assistant Vice President	None
Jodi A. Casson	Assistant Vice President	None
Renee L. Chapman	Assistant Vice President	None
Linsley G. Craig	Assistant Vice President	None
Peter A. DeLibro	Assistant Vice President	None
Jon D. Dry	Assistant Vice President	None
Cheryl L. Emory	Assistant Vice President	None
Bruce S. Fulton	Assistant Vice President	None
John A. Galateria	Assistant Vice President	None
Karen L. Glooch	Assistant Vice President	None
Jason L. Gounaris	Assistant Vice President	None
David A.J. Groves	Assistant Vice President	None
Kristen L. Heerema	Assistant Vice President	None
Shawn M. Isaacson	Assistant Vice President	None
Suzanne M. Knoll	Assistant Vice President	None
Jennifer A. LaPorte	Assistant Vice President	None
Patricia B. Lippert	Assistant Vice President	Secretary
Lois Lynch	Assistant Vice President	None
Karen M. Magness	Assistant Vice President	None
Amy L. Marker	Assistant Vice President	None
C. Lillian Matthews	Assistant Vice President	None
Janice D. McCrory	Assistant Vice President	None
Jennifer H. McDonnell	Assistant Vice President	None
John T. McGuigan	Assistant Vice President	None
Daniel M. Middelton	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
JeanneMarie B. Patella	Assistant Vice President	None
Yani A. Peyton	Assistant Vice President	None
Gregory L. Phillips	Assistant Vice President	None
Naomi S. Proshan	Assistant Vice President	None
Jean E. Ramos-Izquierdo	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
Deborah D. Seidel	Assistant Vice President	None
Kevin C. Shea	Assistant Vice President	None
Thomas L. Siedell	Assistant Vice President	None
John A. Stranovsky	Assistant Vice President	None
Robyn S. Thompson	Assistant Vice President	None
Judith B. Ward	Assistant Vice President	None
William R. Weker, Jr.	Assistant Vice President	None
Mary G. Williams	Assistant Vice President	None
Timothy R. Yee	Assistant Vice President	None
James Zurad	Assistant Vice President	None