Participant Release regarding T. Rowe Price Redemption Fee Policy

Attention Participants Investing In:

International Growth Account - invests solely in T. Rowe Price International Stock Fund
Small Cap Growth Account I - invests solely in T. Rowe Price Small Cap Value Fund 

Background

T. Rowe Price is dedicated to delivering value to their customers through a risk-aware and long-term approach to investing. Excessive or short-term trading by retirement plan participants in separate account units may disrupt the management of the underlying mutual fund and raise its costs. T. Rowe Price discourages excessive and short-term trading.

New T. Rowe Price Policy

The Board of Directors of T. Rowe Price funds have approved a redemption fee policy on certain funds, including International Stock and Small Cap Value, to deter excessive and short-term trading by investors. In general, a short-term trade is defined as one purchase and one sale involving the same investment within 90 calendar days.

By instituting a policy of charging a redemption fee on short-term and excessive trading on certain investments, it is the intent of T. Rowe Price to discourage such practices by retirement plan participants. The redemption fee T. Rowe Price will assess for short-term trades is 2 percent for trades in the International Stock Account and 1 percent for trades in the Small Cap Growth Account. When a redemption fee is assessed, it will be deducted directly from the participant's account and remitted to T. Rowe Price. A confirmation notice of this transaction will be sent to the participant.

Participants in retirement plans that utilize Sentry Separate Accounts have access to T. Rowe Price through Sentry Insurance. Transfers between the International Stock or Small Cap Growth Accounts and any other investment in your retirement plan may be subject to T. Rowe Price assessing a redemption fee.

In general, when a participant redeems units of either the Small Cap Growth Account or the International Growth Account that have been held in their retirement plan account for 90 calendar days or less, T. Rowe Price will assess a redemption fee through Sentry Insurance. T. Rowe Price has instructed Sentry to utilize a "first-in, first-out" method to determine the holding period for units redeemed. Under this method, the date of redemption will be compared to the earliest purchase date of Separate Account units held in the participant's account. A redemption fee will be assessed on Separate Account units redeemed before the end of the 90 calendar day holding period.

T. Rowe Price understands some transactions are not motivated by short-term trading considerations and therefore are exempt. Please note the following transactions that are not subject to redemption fees:

1. Separate Account units redeemed due to death benefit distributions, hardship withdrawals, loans, qualified domestic relations orders (QDROs), and distributions due to termination of employment.
2. Units redeemed as part of a plan termination or contract cancellation.
3. Units purchased with retirement plan participant contributions, including employer matching and profit sharing contributions if applicable.

The third exception noted above is very important. To illustrate, a participant just enrolls into a 401(k) plan and directs all of his or her salary deferral contributions into International Growth Account. One year later, the participant decides to transfer all of their money into another investment in the retirement plan, the Large Cap Index Account. Even though some of the money in the International Growth Account would have been there for less than 90 calendar days, this entire transaction out of the International Growth Account is exempt from the redemption fee because the units redeemed were all a result of his or her retirement plan contributions.

Changing the facts above will illustrate how the redemption fee would apply. Assume the participant redeemed all units of the International Growth Account and transferred the proceeds into the Small Cap Growth Account. That transaction would not result in the assessment of a redemption fee. If the participant decided to redeem all the shares of the Small Cap Growth Account before they were invested for more than 90 calendar days to any other investment, the redemption fee would apply.

The effective date for implementing the T. Rowe Price Redemption Fee Policy is March 21, 2005. Sentry will begin monitoring redemptions from the International Growth Account and the Small Cap Growth Account as of that date.