B-1 STATEMENT OF ADDITIONAL INFORMATION Dated May 1 ...

T. Rowe Price has adopted these Proxy Voting Policies and Procedures (“Policies andProcedures”) for the purpose of establishing formal policies and procedures for performing anddocumenting its fiduciary duty with regard to the voting of client proxies.Fiduciary Considerations. It is the policy of T. Rowe Price that decisions with respect to proxyissues will be made in light of the anticipated impact of the issue on the desirability of investing in theportfolio company from the viewpoint of the particular client or Price Fund. Proxies are voted solely inthe interests of the client, Price Fund shareholders or, where employee benefit plan assets are involved, inthe interests of plan participants and beneficiaries. Our intent has always been to vote proxies, wherepossible to do so, in a manner consistent with our fiduciary obligations and responsibilities. Practicalitiesand costs involved with international investing may make it impossible at times, and at other timesdisadvantageous, to vote proxies in every instance.Consideration Given Management Recommendations. One of the primary factors T. RowePrice considers when determining the desirability of investing in a particular company is the quality anddepth of its management. The Policies and Procedures were developed with the recognition that acompany’s management is entrusted with the day-to-day operations of the company, as well as its longtermdirection and strategic planning, subject to the oversight of the company’s board of directors.Accordingly, T. Rowe Price believes that the recommendation of management on most issues should begiven weight in determining how proxy issues should be voted. However, the position of the company’smanagement will not be supported in any situation where it is found to be not in the best interests of theclient, and the portfolio manager may always elect to vote contrary to management when he or shebelieves a particular proxy proposal may adversely affect the investment merits of owning stock in aportfolio company.ADMINISTRATION OF POLICIES AND PROCEDURESProxy Committee. T. Rowe Price’s Proxy Committee (“Proxy Committee”) is responsible forestablishing positions with respect to corporate governance and other proxy issues, including thoseinvolving corporate and social responsibility issues. The Proxy Committee also reviews questions andresponds to inquiries from clients and mutual fund shareholders pertaining to proxy issues. While theProxy Committee sets voting guidelines and serves as a resource for T. Rowe Price portfoliomanagement, it does not have proxy voting authority for any Price Fund or counsel client. Rather, thisresponsibility is held by the Chairperson of the Fund’s Investment Advisory Committee or counselclient’s portfolio manager.Proxy Services Group. The Proxy Services Group is responsible for administering the proxyvoting process as set forth in the Policies and Procedures.Proxy Administrator. The Proxy Services Group will assign a Proxy Administrator who will beresponsible for ensuring that all meeting notices are reviewed and important proxy matters arecommunicated to the portfolio managers for consideration.HOW PROXIES ARE REVIEWED, PROCESSED AND VOTEDIn order to facilitate the proxy voting process, T. Rowe Price has retained RiskMetrics Group(“RMG”), formerly known as Institutional Shareholder Services (“ISS”), as an expert in the proxy votingand corporate governance area. RMG specializes in providing a variety of fiduciary-level proxy advisoryand voting services. These services include in-depth research, analysis, and voting recommendations aswell as vote execution, reporting, auditing and consulting assistance for the handling of proxy votingresponsibility and corporate governance-related efforts. While the Proxy Committee relies upon RMGresearch in establishing T. Rowe Price’s proxy voting guidelines, and many of our guidelines areconsistent with RMG positions, T. Rowe Price deviates from RMG recommendations on some generalpolicy issues and a number of specific proxy proposals.B-126