NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
T. Rowe Price Funds
100 East Pratt Street
Baltimore, MD 21202
Patricia B. Lippert
Secretary
September 7, 2001
An annual meeting of shareholders of the funds will be held on Tuesday, October
23, 2001, at 3:00 p.m., eastern time, in the offices of the funds, 100 East
Pratt Street, Baltimore, MD 21202. The following matters will be acted upon at
1. ALL FUNDS. To elect directors to serve on the Boards of the funds until the
next annual meeting, if any, or until their successors shall have been duly
2. ALL FUNDS. To approve or disapprove amending the Articles of Incorporation
to authorize creating different series and classes of shares, to add other
related provisions and to conform the provisions describing series and classes
3. NEW HORIZONS FUND. To approve or disapprove amending the Articles of
Incorporation to eliminate the provision restricting ownership of portfolio
4. To transact such other business as may properly come before the meeting and
The shareholders of each fund will vote only on those proposals that apply to
their fund(s). Only shareholders of record of common stock at the close of
business on August 24, 2001, are entitled to notice of, and to vote at, this
meeting or any adjournment thereof. THE BOARDS OF THE FUNDS RECOMMEND THAT YOU
PATRICIA B. LIPPERT
individually, a "fund")
YOUR VOTE IS IMPORTANT
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<c>
ALL FUNDS
SHAREHOLDERS ARE URGED TO DESIGNATE THEIR CHOICES ON EACH OF THE MATTERS TO BE
ACTED UPON BY USING ONE OF THE FOLLOWING THREE METHODS:
1. VOTE BY INTERNET.*
. Read the proxy statement.
. Go to the proxy voting link found on your proxy card.
. Enter the control number found on your proxy card.
. Follow the instructions using your proxy card as a guide.
2. VOTE BY TELEPHONE.*
. Read the proxy statement.
. Call the toll-free number found on your proxy card.
. Enter the control number found on your proxy card.
. Follow the recorded instructions using your proxy card as a guide.
3. VOTE BY MAIL.
. Date, sign, and return the enclosed proxy card in the envelope
provided, which requires no postage if mailed in the United States.
YOUR PROMPT RESPONSE WILL HELP ASSURE A QUORUM AT THE MEETING AND AVOID THE
ADDITIONAL EXPENSE OF FURTHER SOLICITATION.
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* If you vote by telephone or access the Internet voting site, your vote must be
received no later than 12:00 a.m. eastern time on October 23, 2001.
PAGE 2
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC., AND
T. ROWE PRICE NEW HORIZONS FUND, INC.
Annual Meeting of Shareholders -- October 23, 2001
PROXY STATEMENT
This document gives you information you need in order to vote on the matters
coming before the annual meeting and is furnished in connection with the
solicitation of proxies by the funds. If you have any questions, please feel
free to call us toll free, 1-800-541-5910.
Who is asking for my vote?
The Boards of the funds have asked that you vote on the matters listed in the
notice of annual meeting of shareholders. The votes will be formally counted at
the annual meeting on Tuesday, October 23, 2001, and if the annual meeting is
adjourned, at any later meeting. You may vote in person at the annual meeting,
by Internet, by telephone, or by returning your completed proxy card in the
postage-paid envelope provided. Do not mail the proxy card if you are voting by
Internet or telephone.
Who is eligible to vote?
Shareholders of record at the close of business on August 24, 2001, (the "RECORD
DATE") are notified of the meeting and are entitled to vote. The notice of
annual meeting, the proxy card, and the proxy statement were mailed to
shareholders of record on or about September 7, 2001.
Shareholders are entitled to one vote for each full share and a proportionate
vote for each fractional share of the fund(s) they held as of August 24, 2001.
Under Maryland law, shares owned by two or more persons (whether as joint
tenants, co-fiduciaries, or otherwise) will be voted as follows, unless a
written instrument or court order providing to the contrary has been filed with
the fund(s): (1) if only one votes, that vote will bind all; (2) if more than
one votes, the vote of the majority will bind all; and (3) if more than one
votes and the vote is evenly divided, the vote will be cast proportionately.
What are shareholders being asked to vote on?
At a meeting held on July 24, 2001, the Boards of the funds, including a
majority of the independent directors, unanimously approved submitting the
following proposals:
PAGE 3
PROPOSAL FUNDS AFFECTED
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1. To elect directors to serve on the Boards All funds
of the funds until the next annual meeting,
if any, or until their successors shall have
been duly elected and qualified.
2. To approve or disapprove amending the All funds
Articles of Incorporation to authorize
creating different series and classes of
shares, to add other related provisions and
to conform the provisions describing series
and classes to those standard for other T.
Rowe Price funds.
3. To approve or disapprove amending the New Horizons Fund
Articles of Incorporation to eliminate the
provision restricting ownership of portfolio
securities by officers and directors of the
fund and T. Rowe Price.
4. To transact such other business as may All funds
properly come before the meeting and any
adjournments thereof.
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Who provides services to the funds?
T. Rowe Price Associates, Inc. ("T. Rowe Price"), provides investment advisory
services to the funds. T. Rowe Price is a wholly owned subsidiary of T. Rowe
Price Group, Inc., a holding company listed on the Nasdaq(R) National Market.
Each fund has an accounting services agreement with T. Rowe Price, an
underwriting agreement with T. Rowe Price Investment Services, Inc. ("Investment
Services"), a transfer agency agreement with T. Rowe Price Services, Inc.
("Price Services"), and a subtransfer agency agreement with T. Rowe Price
Retirement Plan Services, Inc. ("Retirement Services"). Each of these service
providers is a wholly owned subsidiary of T. Rowe Price.
The T. Rowe Price Trust Company ("the Trust Company") is a wholly owned
subsidiary of T. Rowe Price and serves as trustee and custodian for certain IRA,
Keogh, and other prototype plans that utilize the funds as investment options.
The address of T. Rowe Price, Investment Services, and the Trust Company is 100
East Pratt Street, Baltimore, MD 21202, and the address of Price Services and
Retirement Services is 4515 Painters Mill Road, Owings Mills, MD 21117.
PAGE 4
How can I get more information about the funds?
A COPY OF EACH FUND'S MOST RECENT SHAREHOLDER REPORT WAS MAILED TO ALL
SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS FOR THE FUNDS' FISCAL
PERIOD-END. IF YOU WOULD LIKE TO RECEIVE ADDITIONAL COPIES OF ANY REPORT, PLEASE
CONTACT T. ROWE PRICE BY CALLING 1-800-541-5910; WRITING TO 100 EAST PRATT
STREET, BALTIMORE, MD 21202; OR VISITING OUR WEB SITE AT WWW.TROWEPRICE.COM. ALL
COPIES ARE PROVIDED FREE OF CHARGE.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
ALL FUNDS
Why are directors being elected?
Because of the important role independent directors play in governing our funds,
the current fund directors are asking shareholders to elect an expanded slate of
directors that will increase the number of independent directors serving each
fund. The increased representation of independent directors will mean greater
protection of shareholders' interests.
Importantly, all of the directors standing for election currently serve on the
Boards of multiple funds. If the entire slate is approved, there will be nine
independent directors and three inside directors on each fund Board.
Another important benefit of these elections is that the same independent
directors will serve on the Boards of all of the Price funds. This will expose
the directors to a wider range of business and economic trends, increase sharing
of directors' knowledge, background, and experience and allow the Boards to
operate more efficiently.
Who are the nominees for directors?
The Boards have proposed the slate of persons listed in Table 1 for election as
director, each to hold office until the next annual meeting (if any) or until
his successor is duly elected and qualified.
A shareholder using the enclosed proxy card can vote for all or any of the
nominees or withhold his or her vote from all or any of such nominees. If the
proxy card is properly executed but unmarked, it will be voted for all of the
nominees. Each of the nominees has agreed to serve as a director if elected;
however, should any nominee become unable or unwilling to accept nomination or
election, the persons named in the proxy will exercise their voting power in
favor of such other person or persons as the Boards of the funds may recommend.
There are no family relationships among these nominees.
PAGE 5
Mr. Laporte is standing for reelection only to the Board of the New Horizons
Fund. Mr. Kennedy is standing for reelection only to the Boards of the Growth
Stock and New Era Funds. With the exception of Messrs. Burnett, Deering,
Linaweaver and Schreiber, all other nominees are standing for reelection to each
of the funds. Messrs. Burnett, Deering, Linaweaver, and Schreiber are currently
directors of all the T. Rowe Price income funds. Mr. Deering is also a director
of the T. Rowe Price international funds. In the election of directors, each
fund votes separately, and shareholders are being asked to elect the Board of
Directors of their respective fund(s) only.
Table 1 provides biographical information on each director, their ownership, if
any, in the funds to which they have been nominated for election as a director,
and their total ownership in any of the other Price funds.
Table 1 Nominees for Election as Directors
All Other Price Funds'
Shares Owned, Directly or
Name, Date of Birth, Address, Fund Shares Beneficially Indirectly, as of
Position on Fund Board, and Owned, Directly or Indirectly, 6/30/01
Principal Occupations/a/ as of 6/30/01
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*James A. C. Kennedy, 8/15/53 New Era 8,32 3,714,038
7
100 E. Pratt Street, Baltimore, MD 21202
Director of the Growth Stock and New Era
Funds
Managing Director and Director, T. Rowe Price
and T. Rowe Price Group, Inc.; Officer and/or
Director of 22 other T. Rowe Price equity
funds/trusts
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*John H. Laporte, 7/26/45 New Horizons 54,267 3,182,56
7
100 E. Pratt Street, Baltimore, MD 21202
Director of the New Horizons Fund
Managing Director, T. Rowe Price; Managing
Director and Director, T. Rowe Price Group,
Inc.; Officer and/or Director of 21 other T.
Rowe Price equity funds/ trusts
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*James S. Riepe, 6/25/43 New Horizons 24,43 9,386,45
4 3
100 E. Pratt Street, Baltimore, MD 21202
Director of the funds
Vice Chairman of the Board, Director and
Managing Director, T. Rowe Price Group, Inc.;
Director and Managing Director, T. Rowe
Price; Chairman of the Board, T. Rowe Price
Investment Services, Inc., T. Rowe Price
Retirement Plan Services, Inc., and T. Rowe
Price Services, Inc.; Chairman of the Board,
President and Trust Officer, T. Rowe Price
Trust Company; Director, T. Rowe Price
International, Inc.; Officer and/or Director
of 77 other T. Rowe Price funds/trusts
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*M. David Testa, 4/22/44 New Horizons 9,11 3,102,320
3
100 E. Pratt Street, Baltimore, MD 21202
Director of the funds
Vice Chairman of the Board, Chief Investment
Officer, Director, and Managing DIrector, T.
Rowe Price Group, Inc.; Chief Investment
Officer, Director, and Managing Director, T.
Rowe Price; Vice President and Director, T.
Rowe Price Trust Company; Director, T. Rowe
Price International, Inc.; Officer and/or
Director/Trustee of 91 other T. Rowe Price
funds/trusts
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Calvin W. Burnett, Ph.D., 3/16/32 New Horizons 18
3 1,85
2500 West North Avenue 4
Baltimore, MD 21216
President, Coppin State College; Director,
Provident Bank of Maryland; Director/ Trustee
of the 34 T. Rowe Price income funds/trusts
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Anthony W. Deering, 1/28/45 -- -- 260,06
1
10275 Little Patuxent Parkway
Columbia, MD 21044
Director, Chairman of the Board, President,
and Chief Executive Officer, The Rouse
Company, real estate developers;
Director/Trustee of the 49 T. Rowe Price
income and international funds/trusts
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Donald W. Dick, Jr., 1/27/43 Growth Stock 4,22 538,302
EuroCapital Advisors, LLC New Horizons 1
P.O. Box 491 902
Chilmark, MA 02535
Director of the funds
Principal, EuroCapital Advisors, LLC, an
acquisition and management advisory firm;
Director, ThinkSharp, Inc. (1/98 to present),
The Haven Group, f/k/a Haven Acquisition
Corp. (6/98 to present), Haven Homes, Inc.
(6/98 to present), LaPointe International
Corp. (since 3/99), LaPointe, Ltd. (UK)
(since 7/99) and Sequor Industries, N.V. (The
Netherlands); Director/Trustee of the 43
other T. Rowe Price equity funds/trusts and
15 international funds/trusts
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David K. Fagin, 4/9/38 New Horizons 69 1,740,843
33 Glenmoor Drive
Englewood, CO 80110-7115
Director of the funds
Director, Dayton Mining Corporation
(6/98 to present), Golden Star Resources
Ltd., and Canyon Resources, Corp. (5/00 to
present); Chairman and President, Nye
Corporation; formerly, Director, Nescor
Corporation and Chairman of the Board and
Director, Western Exploration and
Development, Ltd.; Director/Trustee of the 43
other T. Rowe Price equity funds/ trusts
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F. Pierce Linaweaver, 8/22/34 Growth Stock 51,63
1,96 5
Green Spring Station New Horizons
2360 West Joppa Road, Suite 224 6
Lutherville, MD 21093 18,6
60
President, F. Pierce Linaweaver & Associates,
Inc., consulting environmental and civil
engineers; Director, Daft-McCune-Walker, Inc.
(1998 to present); Director/Trustee of the 34
T. Rowe Price income funds/trusts
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Hanne M. Merriman, 11/16/41 New Horizons 1,0 173,26
60 3
3201 New Mexico Avenue, N.W.
Suite 350
Washington, D.C. 20016
Director of the funds
Retail Business Consultant; Director, Ann
Taylor Stores Corporation, Central Illinois
Public Service Company, Ameren Corp., Finlay
Enterprises, Inc., The Rouse Company, State
Farm Mutual Automobile Insurance Company, and
US Airways Group, Inc.; Director/Trustee of
the 43 other T. Rowe Price equity
funds/trusts
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John G. Schreiber, 10/21/46 -- -- 5,587,24
4
Centaur Capital Partners, Inc.
One Westminster Place, Suite 300
Lake Forest, IL 60045
Owner/President, Centaur Capital Partners,
Inc., a real estate investment company;
Director, AMLI Residential Properties Trust,
The Brickman Group, Ltd., and Host Marriott
Corporation; Partner, Blackstone Real Estate
Partners, L.P.; Director, and formerly
Executive Vice President, JMB Realty
Corporation; Director/Trustee of the 34 T.
Rowe Price income funds/trusts
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Hubert D. Vos, 8/2/33 New Era 8,137
861
1114 State Street, Suite 247 New Horizons 1,56
P.O. Box 90409 8
Santa Barbara, CA 93190-0409
Director of the funds
Owner/President, Stonington Capital
Corporation, a private investment company;
Director/Trustee of the 43 other T. Rowe
Price equity funds/trusts
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Paul M. Wythes, 6/23/33 New Horizons 3,62 100,88
1 3
755 Page Mill Road, Suite A200
Palo Alto, CA 94304-1005
Director of the funds
Founding Partner of Sutter Hill Ventures, a
venture capital limited partnership,
providing equity capital to young high
technology companies throughout the United
States; Director, Teltone Corporation and
Sutter Hill Investments Maritius Ltd.;
Director/Trustee of the 43 other T. Rowe
Price equity funds/trusts and 15
international funds/trusts
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PAGE 6
PAGE 7
PAGE 8
* Nominees considered "interested persons" because of relationships with T. Rowe
Price as described in the table. They are also shareholders of T. Rowe Price
Group, Inc.
/a/
Unless otherwise indicated, each individual has held the office indicated, or
other offices in the same company, for the last five years. Messrs. Kennedy,
Laporte, Riepe, and Testa have held their positions with T. Rowe Price Group
since 2000.
Table 2 sets forth the year each director was first elected.
Table 2 Year of Original Election as a Director
Director Growth Stock New Era New Horizons
- --------------------------------------------------------------------------------------
Burnett * * *
- --------------------------------------------------------------------------------------
Deering * * *
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Dick 1980 1994 1994
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Fagin 1994 1988 1988
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Linaweaver * * *
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Merriman 1994 1994 1994
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Schreiber * * *
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Vos 1994 1979 1983
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Wythes 1994 1994 1981
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Kennedy/a/ 1997 1997 --
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Laporte/a/ -- -- 1988
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Riepe 1982 1994 1983
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Testa 1984 1997 1994
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PAGE 9
* Initial election.
/a/Mr. Laporte is standing for reelection only to the Board of the New Horizons
Fund. Mr. Kennedy is standing for reelection only to the Boards of the Growth
Stock and New Era Funds.
Do the nominees have a stake in the funds?
The Boards of the funds believe it is important that each nominee for director
have an investment in the T. Rowe Price funds. The nominees allocate their
investments among the T. Rowe Price funds based on their own investment
objectives. Table 1 lists each nominee's investment in the funds, if any, as
well as his total investment in all of the T. Rowe Price funds.
What are the primary responsibilities of each fund's Board members?
They are responsible for the general oversight of each fund's business and for
assuring that each fund is managed in the best interests of its shareholders.
The directors periodically review the performance, expenses, service providers
of, and business and regulatory matters affecting, the funds based on reports
provided by their investment advisers, transfer agent, custodians, auditors, and
legal counsel.
How often does each fund's Board meet?
The Boards of Directors of the funds held five meetings during calendar year
2000 and, with the exception of Mr. Kennedy, each director attended 75% or more
of those meetings. Each director has attended 75% or more of the four meetings
held to date in 2001. Each Board currently has two committees, described in the
following paragraphs.
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 and receives a fee of $1,000 for each
committee meeting attended. The committee will consider written recommendations
from shareholders for possible nominees. Shareholders should submit their
recommendations to the secretary of the funds. The committee met informally
during the last fiscal year, but the committee as such held no formal meetings.
PAGE 10
The Joint Audit Committee is comprised of independent directors only. The
members of the committee are David K. Fagin, F. Pierce Linaweaver, John G.
Schreiber, and Paul M. Wythes. These directors also receive a fee of $1,000 for
each committee meeting attended. The Audit Committee holds two regular meetings
during each fiscal year, at which time it meets with the independent accountants
of the T. Rowe Price funds to review: (1) the services provided; (2) the
findings of the most recent audit; (3) management's response to the findings of
the most recent audit; (4) the scope of the audit to be performed; (5) the
accountants' fees; and (6) any accounting or other questions relating to
particular areas of the T. Rowe Price funds' operations or the operations of
parties dealing with the T. Rowe Price funds, as circumstances indicate. The
Audit Committee for the funds met twice in 2000 and has met once in 2001. All
members of the committee participated in the meetings.
What are the directors paid for their services to the funds?
Messrs. Kennedy, Laporte, Riepe, and Testa are employed by, and thus considered
"interested persons" of, T. Rowe Price. Therefore, they are not entitled to
compensation or benefits for their service as directors of the funds.
Ms. Merriman and Messrs. Burnett, Deering, Dick, Fagin, Linaweaver, Schreiber,
Vos, and Wythes are the independent, or noninterested, directors of the funds.
Effective January 1, 2001, compensation to the independent directors changed to
an annual retainer of $110,000 per year for service on the Boards of the T. Rowe
Price funds. The Price fund group included 95 funds at December 31, 2000. The
independent directors of the funds do not receive any pension or retirement
benefits from the funds or T. Rowe Price.
Prior to January 1, 2001, the annual retainer was $65,000 per year for service
on the Boards of the T. Rowe Price domestic funds, an additional $15,000 for
service on the Boards of the T. Rowe Price International funds and a fee of
$1,000 for each Audit Committee meeting attended.
Table 3 provides the independent directors' accrued compensation for the most
recently completed fiscal year of each fund and their total compensation for the
period January 1, 2000, through December 31, 2000. The fees are allocated to
each fund under a formula which includes a base fee and a fee based on the net
assets of each fund relative to the other funds.
PAGE 11
Table 3 Compensation to Fund Directors
Total Compensation
Compensation From T. Rowe Price Funds From Funds and
Director ------------------------------------------ Fund Complex
- --------------------------------------- Growth Stock New Era New Horizons ---------------------
------------------------------------------
Burnett * * * $65,000
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Deering * * * 80,000
- ------------------------------------------------------------------------------------------------------
Dick $2,201 $1,219 $2,395 80,000
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Fagin 3,271 1,418 3,639 65,000
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Linaweaver * * * 67,000
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Merriman 3,271 1,418 3,639 65,000
- ------------------------------------------------------------------------------------------------------
Schreiber * * * 67,000
- ------------------------------------------------------------------------------------------------------
Vos 3,429 1,449 3,822 67,000
- ------------------------------------------------------------------------------------------------------
Wythes 2,327 1,244 2,540 82,000
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* Initial election.
What vote is required to elect the directors?
Each fund votes separately and a plurality (receiving more "for" votes than
"against" votes) of the votes cast at the meeting is sufficient to approve the
election of a director of that fund. The Board of Directors recommends that
shareholders vote FOR all of the proposed nominees.
PROPOSAL NO. 2 -- AMENDMENT OF ARTICLES OF INCORPORATION TO AUTHORIZE THE
CREATION OF SERIES AND CLASSES, TO ADD OTHER RELATED PROVISIONS AND TO CONFORM
THE PROVISIONS DESCRIBING SERIES AND CLASSES TO THOSE STANDARD FOR OTHER T. ROWE
PRICE FUNDS
ALL FUNDS
The Board of each fund has unanimously approved an amendment to their respective
Articles of Incorporation and recommended that this amendment be submitted for
shareholder approval. The following description is a summary only, and is
qualified in its entirety by the text of the amendment which is attached as
Exhibit 1.
The Articles of Incorporation of the Growth Stock, New Era, and New Horizons
Funds do not authorize their Boards to divide fund shares into series or
classes. They also contain several provisions which the directors believe are
unnecessary and are duplicative of requirements of the Investment Company Act of
1940 ("the 1940 Act"). This proposal asks shareholders to approve or disapprove
amending the
PAGE 12
Articles of Incorporation for each fund to permit the use of series or classes
and bring the charters more in line with the charters of other T. Rowe Price
funds.
The primary effect of the amendments would be to authorize each fund's Board to
create separate series and classes of shares. Each series would be its own
"fund" and have its own portfolio of securities. The Board could also subdivide
any fund or any series into classes. Each class of a fund or series has the same
portfolio but can have different voting, dividend, and liquidation rights as the
Board, in its discretion, determines. Under the proposed amendments, at the
Board's discretion, the funds could issue series or classes of shares and the
shares of the various series or classes, including the existing ones, could be
subject to differing front-end loads, contingent deferred sales loads, expenses
(including distribution expenses under a Rule 12b-1 plan and administrative
expenses under an administration or service agreement), conversion rights,
redemption provisions, including redemption fees, and class voting rights, to
the extent permitted by Maryland law, the 1940 Act, and the rules and
regulations of the National Association of Securities Dealers, Inc. Currently,
the Articles of the New Horizons Fund limit redemption fees to 1% while the
other funds' Articles do not make reference to redemption fees. Under the new
Articles, the Board could authorize redemption of a shareholder account, if
necessary to protect the fund, for example, where a shareholder was engaged in
fraudulent or criminal activity. Currently, the Articles of the funds limit
involuntary redemptions to situations involving small accounts, as defined by
the Board.
These amendments, if approved, would give the funds additional flexibility in
two areas:
. LEVELS OF SERVICE. The ability to create classes of shares would enable us
to customize service levels for shareholders while allocating expenses
associated with those services to those who elect to use them. For example,
an institutional class of shares could be created with transfer agency
services tailored specifically for institutional investors.
. DISTRIBUTION OF SHARES. The various fee structures that can be used for
different classes of shares could allow investors to choose the purchasing
method best suited to their situation and, thus, attract shareholders to the
fund. Generally, higher asset totals increase investment flexibility and can
decrease some expenses due to economies of scale.
In addition, the potential to create share classes could help the funds
competitively, since many of their peers have or are seeking similar
authorization.
If this proposal is approved by the shareholders, the changes will be effective
as soon as the amendment is filed with the Maryland State Department of
Assessments and Taxation, or "SDAT," which will occur
PAGE 13
as soon as practicable following approval. The Board can make changes to the
form of the amendment as it deems necessary in order to file the amendment with
the SDAT. The Board may also abandon or delay the amendment at any time before
or after the vote by shareholders and prior to the effective time of the
amendment if for any reason the Board deems it advisable to do so.
We want to emphasize that none of the funds' Boards has any current intention of
imposing any sales loads, distribution expenses, or redemption fees on your
shares, and that any such action would require advance notice to shareholders
and, in certain instances, shareholder approval.
What vote is required to approve this amendment to the funds' Articles of
Incorporation?
Proposal No. 2 requires the affirmative vote of a majority of each fund's
outstanding shares. The Board of Directors recommends that shareholders vote FOR
the proposal.
PROPOSAL NO. 3 -- AMENDMENT TO ARTICLES OF INCORPORATION
NEW HORIZONS FUND
The fund's Board of Directors has proposed that the provision of the fund's
Articles of Incorporation restricting the ownership of portfolio securities by
officers and directors of the fund and T. Rowe Price be eliminated. The
provision was adopted in 1982 to comply with certain state regulations. These
laws no longer apply to the fund. The Board of Directors of the fund, including
all the independent directors, has reviewed this matter and determined that the
provision is no longer necessary to protect the interests of the fund and its
shareholders. Therefore, the Board has proposed that the provision be deleted.
The officers and directors of the fund and T. Rowe Price are subject to a
comprehensive Code of Ethics that covers the potential conflicts of interest
addressed by the Articles of Incorporation. Generally, officers and interested
directors of the fund and officers and inside directors of T. Rowe Price are
prohibited under the Code from being officers or directors of portfolio
companies. Under the Code, they can purchase shares of portfolio companies, but
such purchases are subject to reporting and prior clearance. Generally,
purchases are not allowed if, for example, the fund or a client has purchased
the same security within the prior seven days. The fund's independent directors
must report their investments but are not required to obtain prior clearance.
The provision of the Articles of Incorporation that is proposed to be deleted is
as follows:
"[The fund shall not] purchase or retain in its portfolio any securities of an
issuer if any of its officers, or security holders is an officer or director of
the Corporation or a member, officer or director of any partnership,
PAGE 14
corporation, or other organization deemed to be an investment adviser to the
corporation for purposes of the Federal Investment Company Act of 1940, if, at
the time of or after such purchase, any officer or director of the corporation
or any member, officer, or director of any such investment adviser to the
corporation shall own beneficially more than one-half of one 1 percent (1/2 of
1%) of the shares or securities, or both, of such issuer and all such officers,
directors and members owning beneficially more than one-half of 1 percent (1/2
of 1%) of such shares or securities shall together own beneficially more than 5
percent (5%) thereof."
What vote is required to approve this amendment to the fund's Articles of
Incorporation?
Proposal No. 3 requires the affirmative vote of a majority of the fund's
outstanding shares. The Board of Directors recommends that shareholders vote FOR
the proposal.
FURTHER INFORMATION ABOUT VOTING AND THE SHAREHOLDER MEETING
What is the required quorum?
To hold the meeting, a majority of each fund's shares entitled to be voted must
have been received by proxy or be present at the meeting. In the event that a
quorum is present but sufficient votes in favor of one or more of the proposals
are not received by the meeting date, the persons named as proxies may propose
one or more adjournments to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of a majority of the shares
present in person or by proxy at the meeting to be adjourned. The persons named
as proxies will vote in favor of such adjournment if they determine that
additional solicitation is reasonable and in the interests of the fund's
shareholders.
How are the votes counted?
The individuals named as proxies (or their substitutes) on the enclosed proxy
card (or cards, if you have multiple funds or accounts) will vote according to
your directions if your proxy is received properly executed, or in accordance
with your instructions given when voting by telephone or Internet. You may
direct the proxy holders to vote your shares on a proposal by checking the
appropriate box "FOR" or "AGAINST," or instruct them not to vote those shares on
the proposal by checking the "ABSTAIN" box. Alternatively, you may simply sign,
date, and return your proxy card(s) with no specific instructions as to the
PAGE 15
proposals. IF YOU PROPERLY EXECUTE YOUR PROXY CARD AND GIVE NO VOTING
INSTRUCTIONS WITH RESPECT TO A PROPOSAL, YOUR SHARES WILL BE VOTED FOR THE
PROPOSAL.
Abstentions and "broker non-votes" (as defined below) are counted for purposes
of determining whether a quorum is present for purposes of convening the
meeting. "Broker non-votes" are shares held by a broker or nominee for which an
executed proxy is received by the fund but are not voted as to one or more
proposals because instructions have not been received from the beneficial owners
or persons entitled to vote, and the broker or nominee does not have
discretionary voting power. If a proposal must be approved by a percentage of
votes cast on the proposal, abstentions and broker non-votes will not be counted
as "votes cast" on the proposal and will have no effect on the result of the
vote. If the proposal must be approved by a percentage of voting securities
present at the meeting or a majority of the fund's outstanding shares,
abstentions and broker non-votes will be considered to be voting securities that
are present and will have the effect of being counted as votes against the
proposal.
For shares held in IRA accounts, the Custodian shall, without written direction
from the investor, vote shares for which no voting instructions are timely
received in the same proportion as shares for which voting instructions from
other shareholders are timely received.
Can additional matters be acted upon at the annual meeting?
The management of the funds knows of no other business which may come before the
meeting. However, if any additional matters are properly presented at the
meeting, it is intended that the persons named in the enclosed proxy, or their
substitutes, will vote on such matters in accordance with their judgment.
How can proxies be recorded?
You may record your votes on the proxy card enclosed with this statement and
mail it in the prepaid envelope provided to Management Information Services
Corp., who the funds have retained to tabulate the votes. In addition, the funds
have arranged to have votes recorded through the Internet or by telephone. The
telephone and Internet voting procedures are designed to authenticate
shareholders' identities, to allow shareholders to authorize the voting of their
shares in accordance with their instructions, and to confirm that their
instructions have been properly recorded.
PAGE 16
How can proxies be solicited, and who pays for the costs involved?
Directors, officers, or employees of the funds or T. Rowe Price may solicit
proxies by mail, in person, or by telephone. In the event that votes are
solicited by telephone, shareholders would be called at the telephone number T.
Rowe Price has in its records for their accounts, and would be asked for their
Social Security number or other identifying information. The shareholders would
then be given an opportunity to authorize proxies to vote their shares at the
meeting in accordance with their instructions. To ensure that shareholders'
instructions have been recorded correctly, confirmation of the instructions is
also mailed. A special toll-free number will be available in case the
information contained in the confirmation is incorrect.
To ensure that sufficient shares of common stock are represented at the meeting
to permit approval of the proposals outlined in the proxy statement, the funds
may retain the services of a proxy solicitor to assist them in soliciting
proxies for a fee plus reimbursement of out-of-pocket expenses. Securities
brokers, custodians, fiduciaries, and other persons holding shares as nominees
will be reimbursed, upon request, for their reasonable expenses in sending
solicitation materials to the principals of the accounts.
The approximate date on which this proxy statement and proxy card are first
being mailed to shareholders is September 7, 2001.
All costs of the shareholder meetings and the proxy solicitation will be paid
for by the funds.
Can I change my vote after I mail my proxy?
Any proxy, including those given via the Internet or by telephone, may be
revoked at any time before it is voted by filing a written notice of revocation
with the funds, by delivering a properly executed proxy bearing a later date, or
by attending the meeting and voting in person.
Are the funds required to hold annual meetings?
Under Maryland law, the funds are not required to hold annual meetings. The
Board of Directors of each fund has determined that the funds will take
advantage of these Maryland law provisions to avoid the significant expense
associated with holding annual meetings, including legal, accounting, printing,
and mailing fees incurred in preparing proxy materials. Accordingly, no annual
meetings shall be held in any year in which a meeting is not otherwise required
to be held by the 1940 Act unless the Boards determine otherwise. However,
special meetings will be held in accordance with applicable law or when
otherwise determined by each fund's Board.
PAGE 17
If a shareholder wishes to present a proposal to be included in the proxy
statement for the next shareholder meeting, the proposal must be submitted in
writing and received by Patricia B. Lippert, Secretary of the Funds, T. Rowe
Price Associates, Inc., 100 East Pratt Street, Baltimore, MD 21202, within a
reasonable time before the funds begin to print and mail their proxy materials.
GENERAL INFORMATION ABOUT THE FUNDS
Who are the funds' executive officers?
Table 4 lists the executive officers of the funds (other than the nominees for
election as directors) and their positions with T. Rowe Price or T. Rowe Price
Group. Each executive officer has been an officer of T. Rowe Price and the funds
for at least the last five years.
In the case of T. Rowe Price Group, the officers have served for the time
periods indicated in the footnote to the table.
The table also sets forth the ownership of the executive officers of the funds
as of June 30, 2001. In each case, the executive officers and directors of each
fund, as a group, beneficially owned, directly or indirectly, less than 1% of
the fund's outstanding shares.
Table 4 Executive Officers of the Funds and
Beneficial Ownership
Amount and
Nature of
Position with Beneficial
Position With Position With T. Rowe Price Ownership as of
Officer, Date of Birth Fund T. Rowe Price Group June 30, 2001
- ------------------------------------------------------------------------------------------------
Growth Stock
- ------------------------------------------------------------------------------------------------
Robert W. Smith, 4/11/61 President Managing Managing 309
Director Director*
- ------------------------------------------------------------------------------------------------
New Era
- ------------------------------------------------------------------------------------------------
Charles M. Ober, 4/20/50 President Vice President Vice 2,475
President**
- ------------------------------------------------------------------------------------------------
David J. Wallack, 7/2/60 Executive Vice Vice President Vice --
President President**
----------------- ------------------
- -------------------------------------------- -----------------
* Officer since 2000.
** Officer since 2001.
PAGE 18
What is the share ownership of each fund?
Table 5 presents the shares of the capital stock of each fund outstanding as of
June 30, 2001.
Table 5 Outstanding Shares of Capital Stock
T. Rowe Price Fund Outstanding Shares of Capital Stock
- ----------------------------------------------------------------------------------
Growth Stock 197,167,887
- ----------------------------------------------------------------------------------
New Era 47,949,832
- ----------------------------------------------------------------------------------
New Horizons 247,789,234
- ----------------------------------------------------------------------------------
Who are the principal holders of each fund's shares?
Table 6 sets forth the persons owning more than 5% of each fund's outstanding
common stock as of June 30, 2001.
Table 6 Record/Beneficial Ownership of Fund
Shares
Fund Owner % Ownership
- ------------------------------------------------------------------------------------------------
Charles Schwab & Co. Inc., Reinvest 6
Account, Attn: Mutual Fund Dept.,
101 Montgomery St., San Francisco,
New Era CA 94104-4122
----------------------------------------------------
Pirateline & Co., c/o T. Rowe Price 6
Associates, 100 E. Pratt Street,
Baltimore, MD 21202
----------------------------------------------------
Allfirst Trust Co. Cust FBO City of 10
New York Deferred Compensation Plan,
c/o Great-West Recordkeeper, 8515 E.
New Horizons Orchard Rd., Suite 2T2, Englewood,
CO 80111-5037
----------------------------------------------------
Pirateline & Co., c/o T. Rowe Price 10
Associates, 100 E. Pratt Street,
- -------------------------------------------- Baltimore, MD 21202
----------------------------------------------------
INFORMATION ABOUT INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee has selected PricewaterhouseCoopers, LLP, as the independent
accountants for the funds for their current fiscal years. Representatives of
PricewaterhouseCoopers are expected to be present at the meeting and will be
available to make a statement, if they desire to do so, and to respond to
appropriate questions which shareholders may wish to address to them.
PAGE 19
Table 7 Audit Fees
Fund Amount
- ----------------------------------------------------------------------------
Growth Stock $13,609
- ----------------------------------------------------------------------------
New Era 10,439
- ----------------------------------------------------------------------------
New Horizons 13,981
- ----------------------------------------------------------------------------
Financial Information Systems Design and Implementation Fees --
- ----------------------------------------------------------------------------
Other Fees $ 6,989
- ----------------------------------------------------------------------------
The Audit Committee has considered whether the provisions of the services
covered under "Other Fees" is compatible with maintaining the independence of
PricewaterhouseCoopers.
The fees charged by PricewaterhouseCoopers for the calendar year audit and the
reviews of Forms 10-Q for T. Rowe Price Group were $137,000. All other fees
billed to T. Rowe Price Group through December 31, 2000 totaled $780,853, which
represented fees for tax planning and compliance services, attestation reports,
agreed-upon procedures, SAS 70 engagements, and assistance in connection with
filings under the Securities Act of 1933.
PAGE 20
EXHIBIT I
AMENDMENT TO THE ARTICLES OF INCORPORATION OF EACH OF
-----------------------------------------------------
T. ROWE PRICE NEW HORIZONS FUND, INC.,
--------------------------------------
T. ROWE PRICE NEW ERA FUND, INC., AND
-------------------------------------
T. ROWE PRICE GROWTH STOCK FUND, INC.
-------------------------------------
A. Article "THIRD" Section 2 of the Articles of Incorporation of each of T. Rowe
Price New Horizons Fund and T. Rowe Price New Era Fund will be replaced in its
entirety with the following provision:
"At any time and from time to time, to deposit any of its funds, without
limit as to amount, in any bank or trust company selected by the Board of
Directors."
B. Article "SIXTH" of the Articles of Incorporation of T. Rowe Price Growth
Stock Fund will be deleted in its entirety.
C. Article "FIFTH" of the Articles of Incorporation of each of T. Rowe Price New
Horizons Fund and T. Rowe Price New Era Fund, and Article "SEVENTH" of the
Articles of Incorporation of T. Rowe Price Growth Stock Fund, will be replaced
in their entirety with the following provisions:
(a)The total number of shares of stock of all classes and series which the
Corporation shall have the authority to issue is [in the case of T. Rowe Price
New Era Fund: Two Hundred Million (200,000,000) shares of capital stock of the
par value of One Dollar ($1.00) per share, and of the aggregate par value of Two
Hundred Million Dollars ($200,000,000); in the case of T. Rowe Price Growth
Stock Fund: Three Hundred Million (300,000,000) shares of capital stock of the
par value of One Dollar ($1.00) per share, and of the aggregate par value of
Three Hundred Million Dollars ($300,000,000); and in the case of T. Rowe Price
New Horizons Fund: Four Hundred Million (400,000,000) shares of capital stock of
the par value of One Dollar ($1.00) per share, and of the aggregate par value of
Four Hundred Million Dollars ($400,000,000).] All of such shares are classified
as "COMMON STOCK." The Board of Directors may classify and reclassify any
unissued shares of capital stock (whether or not such shares have been
previously classified or reclassified) by setting or changing in any one or more
respects the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption of such shares of stock.
(b)
The following is a description of the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption of the shares of Common Stock, and any
additional series of Common Stock of the respective Corporations (unless
provided otherwise by the Board of Directors with respect to any such additional
series at the time it is established and designated):
PAGE 21
(1)ASSETS BELONGING TO SERIES. All consideration received by the
Corporation from the issue or sale of shares of a particular series,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any investment or
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that series for all purposes, subject only to the
rights of creditors, and shall be so recorded upon the books of account
of the Corporation. Such consideration, assets, income, earnings,
profits and proceeds, together with any General Items allocated to that
series as provided in the following sentence, are herein referred to
collectively as "assets belonging to" that series. In the event that
there are any assets, income, earnings, profits or proceeds which are
not readily identifiable as belonging to any particular series
(collectively, "GENERAL ITEMS"), such General Items shall be allocated
by or under the supervision of the Board of Directors to and among any
one or more of the series established and designated from time to time
in such manner and on such basis as the Board of Directors, in its sole
discretion, deems fair and equitable; and any General Items so allocated
to a particular series shall belong to that series. Each such allocation
by the Board of Directors shall be conclusive and binding for all
purposes.
(2)
LIABILITIES OF SERIES. The assets belonging to each particular series
shall be charged with the liabilities of the Corporation in respect of
that series and all expenses, costs, charges and reserves attributable
to that series, and any general liabilities, expenses, costs, charges or
reserves of the Corporation which are not readily identifiable as
pertaining to any particular series, shall be allocated and charged by
or under the supervision of the Board of Directors to and among any one
or more of the series established and designated from time to time in
such manner and on such basis as the Board of Directors, in its sole
discretion, deems fair and equitable. The liabilities, expenses, costs,
charges and reserves allocated and so charged to a series are herein
referred to collectively as "liabilities of" that series. Each
allocation of liabilities, expenses, costs, charges and reserves by or
under the supervision of the Board of Directors shall be conclusive and
binding for all purposes.
(3)
DIVIDENDS AND DISTRIBUTIONS. Dividends and capital gains distributions
on shares of a particular series may be paid with such frequency, in
such form and in such amount as the Board of Directors may determine by
resolution adopted from time to time, or pursuant to a standing
resolution or resolutions adopted only once or with such frequency as
the Board of Directors may determine, after providing for actual and
accrued liabilities of that series. All dividends on shares of a
particular series shall be paid only out of the income belonging to that
series and all
PAGE 22
capital gains distributions on shares of a particular series shall be
paid only out of the capital gains belonging to that series. All
dividends and distributions on shares of a particular series shall be
distributed pro rata to the holders of that series in proportion to the
number of shares of that series held by such holders at the date and
time of record established for the payment of such dividends or
distributions, except that in connection with any dividend or
distribution program or procedure, the Board of Directors may determine
that no dividend or distribution shall be payable on shares as to which
the shareholder's purchase order and/or payment have not been received
by the time or times established by the Board of Directors under such
program or procedure. Dividends and distributions may be paid in cash,
property or additional shares of the same or another series, or a
combination thereof, as determined by the Board of Directors or pursuant
to any program that the Board of Directors may have in effect at the
time for the election by shareholders of the form in which dividends or
distributions are to be paid. Any such dividend or distribution paid in
shares shall be paid at the current net asset value thereof.
(4)
VOTING. On each matter submitted to a vote of the shareholders, each
holder of shares shall be entitled to one vote for each share standing
in his name on the books of the Corporation, irrespective of the series
thereof, and all shares of all series shall vote as a single class
("SINGLE CLASS VOTING"); provided, however, that (i) as to any matter
with respect to which a separate vote of any series is required by the
Investment Company Act or by the Maryland General Corporation Law, such
requirement as to a separate vote by that series shall apply in lieu of
Single Class Voting; (ii) in the event that the separate vote
requirement referred to in (i) above applies with respect to one or more
series, then, subject to (iii) below, the shares of all other series
shall vote as a single class; and (iii) as to any matter which does not
affect the interest of a particular series, including liquidation of
another series as described in subsection (7) below, only the holders of
shares of the one or more affected series shall be entitled to vote.
(5)
REDEMPTION BY SHAREHOLDERS. Each holder of shares of a particular series
shall have the right at such times as may be permitted by the
Corporation to require the Corporation to redeem all or any part of his
shares of that series, at a redemption price per share equal to the net
asset value per share of that series next determined after the shares
are properly tendered for redemption, less such redemption fee or sales
charge, if any, as may be established by the Board of Directors in its
sole discretion and disclosed in the current Prospectus or Statement of
Additional Information for the Corporation. Payment of the redemption
price shall be in cash; provided, however, that if the Board of
Directors determines, which determination shall be conclusive, that
conditions exist which make payment wholly in
PAGE 23
cash unwise or undesirable, the Corporation may, to the extent and in
the manner permitted by the Investment Company Act, make payment wholly
or partly in securities or other assets belonging to the series of which
the shares being redeemed are a part, at the value of such securities or
assets used in such determination of net asset value. Notwithstanding
the foregoing, the Corporation may postpone payment of the redemption
price and may suspend the right of the holders of shares of any series
to require the Corporation to redeem shares of that series during any
period or at any time when and to the extent permissible under the
Investment Company Act or if the Corporation lacks funds legally
available for such purpose.
(6)REDEMPTION BY CORPORATION. The Board of Directors may cause the
Corporation to redeem at net asset value the shares of any series from a
holder (i) if the Board of Directors of the Corporation determines in
its sole discretion that failure to so redeem such shares may have
materially adverse consequences to the holders of shares of the
Corporation or any series, or (ii) upon such other conditions with
respect to the maintenance of shareholder accounts of a minimum amount
as may from time to time be established by the Board of Directors in its
sole discretion and disclosed in the Prospectus or Statement of
Additional Information for the Corporation.
(7)
LIQUIDATION. In the event of the liquidation of a particular series, the
shareholders of the series that is being liquidated shall be entitled to
receive, as a class, when and as declared by the Board of Directors, the
excess of the assets belonging to that series over the liabilities of
that series. The holders of shares of any particular series shall not be
entitled thereby to any distribution upon liquidation of any other
series. The assets so distributable to the shareholders of any
particular series shall be distributed among such shareholders in
proportion to the number of shares of that series held by them and
recorded on the books of the Corporation. The liquidation of any
particular series in which there are shares then outstanding may be
authorized by vote of a majority of the Board of Directors then in
office, subject to the approval of a majority of the outstanding voting
securities of that series, as defined in the Investment Company Act, and
without the vote of the holders of shares of any other series. The
liquidation of a particular series may be accomplished, in whole or in
part, by the transfer of assets of such series to another series or by
the exchange of shares of such series for the shares of another series.
(8)
NET ASSET VALUE PER SHARE. The net asset value per share of any series
shall be the quotient obtained by dividing the value of the net assets
of that series (being the value of the assets belonging to that series
less the liabilities of that series) by the total number of shares of
that series outstanding, all as determined by or under the direction of
the Board of Directors
PAGE 24
in accordance with generally accepted accounting principles and the
Investment Company Act. Subject to the applicable provisions of the
Investment Company Act, the Board of Directors, in its sole discretion,
may prescribe and shall set forth in the By-Laws of the Corporation or
in a duly adopted resolution of the Board of Directors such bases and
times for determining the value of the assets belonging to, and the net
asset value per share of outstanding shares of, each series, or the net
income attributable to such shares, as the Board of Directors deems
necessary or desirable. The Board of Directors shall have full
discretion, to the extent not inconsistent with the Maryland General
Corporation Law and the Investment Company Act, to determine which items
shall be treated as income and which items as capital and whether any
item of expense shall be charged to income or capital. Each such
determination and allocation shall be conclusive and binding for all
purposes.
The Board of Directors may determine to maintain the net asset value per
share of any series at a designated constant dollar amount and in
connection therewith may adopt procedures not inconsistent with the
Investment Company Act for the continuing declaration of income
attributable to that series as dividends and for the handling of any
losses attributable to that series. Such procedures may provide that in
the event of any loss, each shareholder shall be deemed to have
contributed to the capital of the Corporation attributable to that
series his pro rata portion of the total number of shares required to be
canceled in order to permit the net asset value per share of that series
to be maintained, after reflecting such loss, at the designated constant
dollar amount. Each shareholder of the Corporation shall be deemed to
have agreed, by his investment in any series with respect to which the
Board of Directors shall have adopted any such procedure, to make the
contribution referred to in the preceding sentence in the event of any
such loss.
(9)CONVERSION OR EXCHANGE RIGHTS. Subject to compliance with the
requirements of the Investment Company Act, the Board of Directors shall
have the authority to provide that holders of shares of any series shall
have the right to convert or exchange said shares into shares of one or
more other classes or series of shares in accordance with such
requirements and procedures as may be established by the Board of
Directors and as disclosed in the Corporation's current Prospectus or
Statement of Additional Information.
(c)
The shares of Common Stock of the Corporation, or of any series of Common Stock
of the Corporation to the extent such Common Stock is divided into series, may
be further subdivided into classes (which may, for convenience of reference, be
referred by a term other than "class"). Unless otherwise provided in the
Articles Supplementary establishing such classes, all such shares, or all shares
of a series of Common Stock in a series, shall have identical voting, dividend,
and liquidation rights. Shares of the classes shall also be
PAGE 25
subject to such front-end sales loads, contingent deferred sales charges,
expenses (including, without limitation, distribution expenses under a Rule
12b-1 plan and administrative expenses under an administration or service
agreement, plan or other arrangement, however designated), conversion rights,
and class voting rights as shall be consistent with Maryland law, the Investment
Company Act of 1940, and the rules and regulations of the National Association
of Securities Dealers and, to the extent required, shall be contained in
Articles Supplementary establishing such classes.
(d)For the purposes hereof and of any articles supplementary to the charter
providing for the classification or reclassification of any shares of capital
stock or of any other charter document of the Corporation (unless otherwise
provided in any such articles or document), any class or series of stock of the
Corporation shall be deemed to rank:
(1)prior to another class or series either as to dividends or upon
liquidation, if the holders of such class or series shall be entitled to
the receipt of dividends or of amounts distributable on liquidation,
dissolution or winding up, as the case may be, in preference or priority
to holders of such other class or series;
(2)
on a parity with another class or series either as to dividends or upon
liquidation, whether or not the dividend rates, dividend payment dates
or redemption or liquidation price per share thereof be different from
those of such others, if the holders of such class or series of stock
shall be entitled to receipt of dividends or amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in
proportion to their respective dividend rates or redemption or
liquidation prices, without preference or priority over the holders of
such other class or series; and
(3)junior to another class or series either as to dividends or upon
liquidation, if the rights of the holders of such class or series shall
be subject or subordinate to the rights of the holders of such other
class or series in respect of the receipt of dividends or the amounts
distributable upon liquidation, dissolution or winding up, as the case
may be.
(e)
Unless otherwise prohibited by law, so long as the Corporation is registered as
an open-end management investment company under the Investment Company Act, the
Board of Directors shall have the power and authority, without the approval of
the holders of any outstanding shares, to increase or decrease the number of
shares of capital stock or the number of shares of capital stock of any class or
series that the Corporation has authority to issue.
(f)
The Corporation may issue and sell fractions of shares of capital stock having
pro rata all the rights of full shares, including, without limitation, the right
to vote and to receive dividends, and wherever the words "share" or "shares" are
used in the charter or By-Laws of the Corporation, they shall be deemed to
include fractions of shares, where the context does not clearly indicate that
only full shares are intended.
PAGE 26
(g)
The Corporation shall not be obligated to issue certificates representing shares
of any class or series of capital stock. At the time of issue or transfer of
shares without certificates, the Corporation shall provide the shareholder with
such information as may be required under the Maryland General Corporation Law.
D. Article "SEVENTH" of the Articles of Incorporation of each of T. Rowe Price
New Horizons Fund and T. Rowe Price New Era Fund, and Article "EIGHTH" of the
Articles of Incorporation of T. Rowe Price Growth Stock Fund, will be replaced
in their entirety with the following provisions:
(a)The following provisions are hereby adopted for the purpose of defining,
limiting, and regulating the powers of the Corporation and of the directors and
shareholders:
(1)
The Board of Directors is hereby empowered to authorize the issuance
from time to time of shares of its stock of any class or series, whether
now or hereafter authorized, or securities convertible into shares of
its stock of any class or series, whether now or hereafter authorized,
for such consideration as may be deemed advisable by the Board of
Directors and without any action by the shareholders.
(2)
No holder of any stock or any other securities of the Corporation,
whether now or hereafter authorized, shall have any preemptive right to
subscribe for or purchase any stock or any other securities of the
Corporation other than such, if any, as the Board of Directors, in its
sole discretion, may determine and at such price or prices and upon such
other terms as the Board of Directors, in its sole discretion, may fix;
and any stock or other securities which the Board of Directors may
determine to offer for subscription may, as the Board of Directors in
its sole discretion shall determine, be offered to the holders of any
class, series or type of stock or other securities at the time
outstanding to the exclusion of the holders of any or all other classes,
series or types of stock or other securities at the time outstanding.
(3)The Board of Directors of the Corporation shall, consistent with
applicable law, have power in its sole discretion to make, alter, amend
or repeal the By-Laws of the Corporation, to determine from time to time
in accordance with sound accounting practice or other reasonable
valuation methods what constitutes annual or other net profits,
earnings, surplus, or net assets in excess of capital; to determine that
retained earnings or surplus shall remain in the hands of the
Corporation; to set apart out of any funds of the Corporation such
reserve or reserves in such amount or amounts and for such proper
purpose or purposes as it shall determine and to abolish any such
reserve or any part thereof; to distribute and pay distributions or
dividends in stock, cash or other securities or property, out of surplus
or any other funds or amounts legally available therefor, at such times
and to the shareholders of record on such dates as it may, from time to
time, determine; and to determine whether and to what extent and at what
times and places and under what conditions and regulations
PAGE 27
the books, accounts and documents of the Corporation, or any of them,
shall be open to the inspection of shareholders, except as otherwise
provided by statute or by the By-Laws, and, except as so provided, no
shareholder shall have any right to inspect any book, account or
document of the Corporation unless authorized so to do by resolution of
the Board of Directors.
(4)Notwithstanding any provision of Maryland law requiring the
authorization of any action by a greater proportion than a majority of
the total number of shares of all classes and series of capital stock or
of the total number of shares of any class or series of capital stock
entitled to vote as a separate class, such action shall be valid and
effective if authorized by the affirmative vote of the holders of a
majority of the total number of shares of all classes and series
outstanding and entitled to vote thereon, or of the class or series
entitled to vote thereon as a separate class, as the case may be, except
as otherwise provided in the charter of the Corporation.
(5)The Corporation reserves the right from time to time to make any
amendments of its charter which may now or hereafter be authorized by
law, including any amendments changing the terms or contract rights, as
expressly set forth in its charter, of any of its outstanding stock by
classification, reclassification or otherwise.
(b)
The enumeration and definition of particular powers of the Board of Directors
included in the foregoing shall in no way be limited or restricted by reference
to or inference from the terms of any other clause of this or any other Article
of the charter of the Corporation, or construed as or deemed by inference or
otherwise in any manner to exclude or limit any powers conferred upon the Board
of Directors under the General Laws of the State of Maryland now or hereafter in
force.
PAGE 28