T. Rowe Price Group, Inc.
PRICE T ROWE GROUP INC (Form: 10-Q, Received: 04/22/2015 10:41:28)


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________ 
FORM 10-Q
______________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2015
Commission File Number: 000-32191
______________________________________ 
T. ROWE PRICE GROUP, INC.
(Exact name of registrant as specified in its charter)
______________________________________ 
Maryland
 
52-2264646
(State of incorporation)
 
(I.R.S. Employer Identification No.)
100 East Pratt Street, Baltimore, Maryland 21202
(Address, including Zip Code, of principal executive offices)
(410) 345-2000
(Registrant’s telephone number, including area code)
______________________________________ 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.     x   Yes     ¨   No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months.     x   Yes     ¨   No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer  x
 
Accelerated filer  ¨
Non-accelerated filer ¨
 
Smaller reporting company  ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨   Yes     x   No
The number of shares outstanding of the issuer’s common stock ($.20 par value), as of the latest practicable date, April 20, 2015 , is 260,584,861 .
The exhibit index is at Item 6 on page 21 .
 




PART I – FINANCIAL INFORMATION

Item 1.
Financial Statements.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
 
 
12/31/2014
 
3/31/2015
ASSETS
 
 
 
Cash and cash equivalents
$
1,506.1

 
$
1,810.4

Accounts receivable and accrued revenue
442.8

 
447.3

Investments in sponsored funds
1,884.0

 
1,889.4

Other investments
408.3

 
419.5

Property and equipment, net
586.4

 
599.0

Goodwill
665.7

 
665.7

Other assets
151.1

 
130.7

Total assets
$
5,644.4

 
$
5,962.0

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Liabilities
 
 
 
Accounts payable and accrued expenses
$
143.4

 
$
137.9

Accrued compensation and related costs
82.1

 
141.3

Income taxes payable
23.6

 
156.3

Dividends payable
.1

 
524.5

Total liabilities
249.2

 
960.0

 
 
 
 
Commitments and contingent liabilities

 

 
 
 
 
Stockholders’ equity
 
 
 
Preferred stock, undesignated, $.20 par value – authorized and unissued 20,000,000 shares

 

Common stock, $.20 par value - authorized 750,000,000; issued 261,110,000 shares in 2014 and 260,575,000 in 2015
52.2

 
52.1

Additional capital in excess of par value
756.5

 
712.0

Retained earnings
4,450.1

 
4,099.7

Accumulated other comprehensive income
136.4

 
138.2

Total stockholders’ equity
5,395.2

 
5,002.0

Total liabilities and stockholders’ equity
$
5,644.4

 
$
5,962.0


The accompanying notes are an integral part of these statements.
Page 2



UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per-share amounts)
 
 
Three months ended
 
3/31/2014
 
3/31/2015
Revenues
 
 
 
Investment advisory fees
$
826.4

 
$
896.5

Administrative fees
94.5

 
93.0

Distribution and servicing fees
33.7

 
37.5

Net revenues
954.6

 
1,027.0

 
 
 
 
Operating expenses
 
 
 
Compensation and related costs
318.9

 
346.5

Advertising and promotion
22.6

 
25.3

Distribution and servicing costs
33.7

 
37.5

Depreciation and amortization of property and equipment
27.1

 
29.1

Occupancy and facility costs
35.4

 
38.3

Other operating expenses
67.8

 
72.5

Total operating expenses
505.5

 
549.2

 
 
 
 
Net operating income
449.1

 
477.8

 
 
 
 
Non-operating investment income
42.1

 
26.8

 
 
 
 
Income before income taxes
491.2

 
504.6

Provision for income taxes
186.9

 
195.1

Net income
$
304.3

 
$
309.5

 
 
 
 
Earnings per share on common stock
 
 
 
Basic
$
1.16

 
$
1.16

Diluted
$
1.12

 
$
1.13

 
 
 
 
Dividends declared per share
$
.44

 
$
2.52



The accompanying notes are an integral part of these statements.
Page 3



UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
 
 
Three months ended
 
3/31/2014
 
3/31/2015
Net income
$
304.3

 
$
309.5

Other comprehensive income (loss)
 
 
 
Net unrealized holding gains on available-for-sale investments
22.4

 
17.0

Reclassification adjustments recognized in non-operating investment income:
 
 
 
Net gains realized on dispositions determined using average cost
(32.0
)
 
(16.6
)
Total net unrealized holding gains (losses) recognized in other comprehensive income
(9.6
)
 
.4

Currency translation adjustments
2.5

 
(2.2
)
Other comprehensive loss before income taxes
(7.1
)
 
(1.8
)
Net deferred tax benefits
2.8

 
3.6

Total other comprehensive income (loss)
(4.3
)
 
1.8

Total comprehensive income
$
300.0

 
$
311.3



The accompanying notes are an integral part of these statements.
Page 4



UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
 
 
Three months ended
 
3/31/2014
 
3/31/2015
Cash flows from operating activities
 
 
 
Net income
$
304.3

 
$
309.5

Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
Depreciation and amortization of property and equipment
27.1

 
29.1

Stock-based compensation expense
29.2

 
31.0

Realized gains on dispositions of sponsored funds
(32.0
)
 
(16.6
)
Net gains recognized on other investments
(6.3
)
 
(6.8
)
Net change in trading securities held by consolidated sponsored investment portfolios
(25.1
)
 
(5.0
)
Other changes in assets and liabilities
189.9

 
202.6

Net cash provided by operating activities
487.1

 
543.8

 
 
 
 
Cash flows from investing activities
 
 
 
Investments in sponsored funds
(98.9
)
 
(39.5
)
Dispositions of sponsored funds
97.9

 
50.7

Additions to property and equipment
(25.4
)
 
(41.3
)
Other investing activity
(3.4
)
 
(4.0
)
Net cash used in investing activities
(29.8
)
 
(34.1
)
 
 
 
 
Cash flows from financing activities
 
 
 
Repurchases of common stock
(31.3
)
 
(113.6
)
Common share issuances under stock-based compensation plans
22.2

 
32.5

Excess tax benefits from stock-based compensation plans
8.9

 
11.1

Dividends paid
(115.8
)
 
(135.4
)
Net cash used in financing activities
(116.0
)
 
(205.4
)
 
 
 
 
Cash and cash equivalents
 
 
 
Net change during period
341.3

 
304.3

At beginning of year
1,398.0

 
1,506.1

At end of period
$
1,739.3

 
$
1,810.4



The accompanying notes are an integral part of these statements.
Page 5



UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(shares in thousands; dollars in millions)
 
 
Common
shares
outstanding
 
Common
stock
 
Additional
capital in
excess of
par value
 
Retained
earnings
 
Accumulated
other
comprehensive
income
 
Total
stockholders’
equity
Balances at December 31, 2014
261,110

 
$
52.2

 
$
756.5

 
$
4,450.1

 
$
136.4

 
$
5,395.2

Net income
 
 
 
 
 
 
309.5

 
 
 
309.5

Other comprehensive income, net of tax
 
 
 
 
 
 
 
 
1.8

 
1.8

Dividends declared
 
 
 
 
 
 
(659.8
)
 
 
 
(659.8
)
Common stock-based compensation plans activity
 
 
 
 
 
 
 
 
 
 
 
Shares issued upon option exercises
901

 
.2

 
26.8

 
 
 
 
 
27.0

Restricted shares issued, net of shares withheld for taxes
(1
)
 

 
(.1
)
 
 
 
 
 
(.1
)
Shares issued upon vesting of restricted stock units, net of shares withheld for taxes
1

 

 

 
 
 
 
 

Forfeiture of restricted awards
(25
)
 

 

 
 
 
 
 

Net tax benefits
 
 
 
 
11.0

 
 
 
 
 
11.0

Stock-based compensation expense
 
 
 
 
31.0

 
 
 
 
 
31.0

Restricted stock units issued as dividend equivalents
 
 
 
 
.1

 
(.1
)
 
 
 

Common shares repurchased
(1,411
)
 
(.3
)
 
(113.3
)
 

 
 
 
(113.6
)
Balances at March 31, 2015
260,575

 
$
52.1

 
$
712.0

 
$
4,099.7

 
$
138.2

 
$
5,002.0



The accompanying notes are an integral part of these statements.
Page 6



NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1
– THE COMPANY AND BASIS OF PREPARATION.

T. Rowe Price Group derives its consolidated revenues and net income primarily from investment advisory services that its subsidiaries provide to individual and institutional investors in the sponsored T. Rowe Price U.S. mutual funds and other investment portfolios, including separately managed accounts, subadvised funds, and other sponsored investment portfolios. We also provide our investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage; and trust services.

Investment advisory revenues depend largely on the total value and composition of assets under our management. Accordingly, fluctuations in financial markets and in the composition of assets under management impact our revenues and results of operations.

These unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the use of estimates and reflect all adjustments that are, in the opinion of management, necessary to a fair statement of our results for the interim periods presented. All such adjustments are of a normal recurring nature. Actual results may vary from our estimates. Certain prior year amounts have been reclassified to conform to the 2015 presentation.

The unaudited interim financial information contained in these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in our 2014 Annual Report.

NOTE 2
– INFORMATION ABOUT RECEIVABLES, REVENUES, AND SERVICES.

Accounts receivable from our sponsored mutual funds for advisory fees and advisory-related administrative services aggregate $245.8 million at December 31, 2014 , and $255.3 million at March 31, 2015 .

Revenues (in millions) from advisory services provided under agreements with our sponsored mutual funds and other investment clients include:
 
Three months ended
 
3/31/2014
 
3/31/2015
Sponsored U.S. mutual funds
 
 
 
Stock and blended asset
$
497.3

 
$
543.2

Bond and money market
93.5

 
102.7

 
590.8

 
645.9

Other investment portfolios
 
 
 
Stock and blended asset
196.9

 
213.0

Bond, money market, and stable value
38.7

 
37.6

 
235.6

 
250.6

Total
$
826.4

 
$
896.5

 


Page 7



The following table summarizes the investment portfolios and assets under management (in billions) on which we earn advisory fees.
 
Average during
 
 
 
 
 
the first quarter of
 
As of
 
2014
 
2015
 
12/31/2014
 
3/31/2015
Sponsored U.S. mutual funds
 
 
 
 
 
 
 
Stock and blended asset
$
346.1

 
$
381.5

 
$
373.0

 
$
390.3

Bond and money market
96.6

 
105.6

 
104.6

 
106.9

 
442.7

 
487.1

 
477.6

 
497.2

Other investment portfolios
 
 
 
 
 
 
 
Stock and blended asset
196.4

 
209.5

 
206.9

 
212.6

Bond, money market, and stable value
62.1

 
62.4

 
62.3

 
62.9

 
258.5

 
271.9

 
269.2

 
275.5

Total
$
701.2

 
$
759.0

 
$
746.8

 
$
772.7


Investors that we serve are primarily domiciled in the U.S.; investment advisory clients outside the U.S. account for 5.6% and 5.1% of our assets under management at December 31, 2014 and March 31, 2015 , respectively.

The following table summarizes the other fees (in millions) earned from our sponsored U.S. mutual funds.
 
Three months ended
 
3/31/2014
 
3/31/2015
Administrative fees
$
74.9

 
$
76.0

Distribution and servicing fees
$
33.7

 
$
37.5


NOTE 3
– INVESTMENTS IN SPONSORED FUNDS - AVAILABLE-FOR-SALE.

We make investments in our sponsored funds for general corporate investment purposes or to provide seed capital for newly formed funds. These sponsored funds (in millions) are voting interest entities and include:
 
Aggregate
cost
 
Unrealized holding
 
Aggregate
fair value
 
 
gains
 
losses
 
December 31, 2014
 
 
 
 
 
 
 
Stock and blended asset funds
$
505.4

 
$
231.4

 
$
(4.2
)
 
$
732.6

Bond funds
1,107.9

 
52.0

 
(8.5
)
 
1,151.4

Total
$
1,613.3

 
$
283.4

 
$
(12.7
)
 
$
1,884.0

 
 
 
 
 
 
 
 
March 31, 2015
 
 
 
 
 
 
 
Stock and blended asset funds
$
476.2

 
$
236.5

 
$
(2.6
)
 
$
710.1

Bond funds
1,142.5

 
48.5

 
(11.7
)
 
1,179.3

Total
$
1,618.7

 
$
285.0

 
$
(14.3
)
 
$
1,889.4


The unrealized holding losses are attributable to 12 fund holdings with an aggregate fair value of $788.5 million at December 31, 2014 , and 14 fund holdings with an aggregate fair value of $413.7 million at March 31, 2015 . These unrealized losses are considered temporary.



Page 8



NOTE 4
– OTHER INVESTMENTS.

These investments (in millions) include:
 
12/31/2014
 
3/31/2015
Cost method investments
 
 
 
10% interest in Daiwa SB Investments Ltd. (Japan)
$
3.0

 
$
3.0

Other investments
60.7

 
63.0

Equity method investments
 
 
 
26% interest in UTI Asset Management Company Limited (India)
132.4

 
134.2

Sponsored fund investments
125.6

 
127.0

Other investments
5.7

 
6.3

Investments held as trading
 
 
 
Sponsored fund investments
10.3

 
11.2

Securities held by consolidated sponsored investment portfolios
69.6

 
73.8

U.S. Treasury note
1.0

 
1.0

Total
$
408.3

 
$
419.5


The securities held by consolidated sponsored investment portfolios, sponsored fund investments held as trading, and the sponsored fund investments treated as equity method investments relate to investment portfolios in which we provided initial seed capital at the time of its formation. We have determined at December 31, 2014 and March 31, 2015 , that these investment portfolios are voting interest entities and, as a result, have consolidated those sponsored portfolios in which we own a majority of the voting interest.

NOTE 5
– FAIR VALUE MEASUREMENTS.

We determine the fair value of our investments using the following broad levels of inputs as defined by related accounting standards:

Level 1 – quoted prices in active markets for identical securities.
Level 2 – observable inputs other than Level 1 quoted prices including, but not limited to, quoted prices for similar securities, interest rates, prepayment speeds, and credit risk. These inputs are based on market data obtained from independent sources.
Level 3 – unobservable inputs reflecting our own assumptions based on the best information available. We do not value any investments using Level 3 inputs.

These levels are not necessarily an indication of the risk or liquidity associated with our investments. There have been no material transfers between the levels. The following table summarizes our investments (in millions) that are recognized in our condensed consolidated balance sheets using fair value measurements determined based on the differing levels of inputs.
 
Level 1
 
Level 2
December 31, 2014
 
 
 
Cash equivalents
$
1,345.8

 
$

Investments in sponsored funds - available-for-sale
1,884.0

 

Investments held as trading
27.7

 
52.2

Total
$
3,257.5

 
$
52.2

 
 
 
 
March 31, 2015
 
 
 
Cash equivalents
$
1,607.9

 
$

Investments in sponsored funds - available-for-sale
1,889.4

 

Investments held as trading
27.5

 
57.5

Total
$
3,524.8

 
$
57.5




Page 9



NOTE 6 – STOCKHOLDERS’ EQUITY.

Regular cash dividends declared per share in the first quarter were $.44 in 2014 and $.52 in 2015 . On February 19, 2015, the Board of Directors also declared a special cash dividend of $2.00 per share, payable on April 23, 2015 to stockholders of record as of the close of business on April 9, 2015.

NOTE 7
– STOCK-BASED COMPENSATION.

STOCK OPTIONS.

The following table summarizes the status of and changes in our stock option grants during the first quarter of 2015 .
 
 
Options
 
Weighted-
average
exercise
price
Outstanding at December 31, 2014
29,761,519

 
$
56.95

Semiannual grants
1,931,325

 
$
82.97

New hire grants
6,000

 
$
80.01

Exercised
(1,251,758
)
 
$
44.87

Forfeited
(202,113
)
 
$
68.54

Outstanding at March 31, 2015
30,244,973

 
$
59.03

Exercisable at March 31, 2015
17,381,933

 
$
50.53


EFFECT OF SPECIAL CASH DIVIDEND.

As a result of the special cash dividend declared by the Board of Directors in February 2015, the anti-dilution provisions of our employee long-term incentive plans and non-employee director plans (collectively the LTI Plans) require an automatic adjustment to neutralize the effect of the special dividend. On the special dividend's ex-dividend date (April 7, 2015), the number of shares authorized and the number of stock options outstanding and their exercise price were adjusted resulting in an increase of 749,578 stock options outstanding on the ex-dividend date, and no incremental compensation expense. The stock option table above will be adjusted to reflect the impact in the second quarter of 2015.

RESTRICTED SHARES AND STOCK UNITS.

The following table summarizes the status of and changes in our nonvested restricted shares and restricted stock units during the first quarter of 2015 .
 
Restricted
shares
 
Restricted
stock
units
 
Weighted-average
fair value
Nonvested at December 31, 2014
2,061,559

 
1,006,753

 
$
72.79

Granted to employees - time-based

 
625,518

 
$
82.96

Granted to employees - performance-based

 
27,975

 
$
82.97

Vested
(1,758
)
 
(1,080
)
 
$
70.81

Forfeited
(25,893
)
 
(24,990
)
 
$
72.55

Nonvested at March 31, 2015
2,033,908

 
1,634,176

 
$
74.60


The nonvested at March 31, 2015 , includes 28,800 performance-based restricted shares and 175,500 performance-based restricted stock units. These performance-based restricted shares and units include 22,800 restricted shares and 121,050 restricted stock units for which the performance period has lapsed and the performance threshold has been met.



Page 10



FUTURE STOCK-BASED COMPENSATION EXPENSE.

The following table presents the compensation expense (in millions) to be recognized over the remaining vesting periods of the stock-based awards outstanding at March 31, 2015 . Estimated future compensation expense will change to reflect future option grants; future awards of unrestricted shares, restricted stock units; changes in estimated forfeitures; changes in the probability of performance thresholds being met; and adjustments for actual forfeitures.
 
Second quarter 2015
$
35.4

Third quarter 2015
34.9

Fourth quarter 2015
31.4

2016
86.7

2017 through 2020
88.5

Total
$
276.9


NOTE 8
– EARNINGS PER SHARE CALCULATIONS.

The following table presents the reconciliation (in millions) of our net income to net income allocated to our common stockholders and the weighted-average shares (in millions) that are used in calculating the basic and diluted earnings per share on our common stock. Weighted-average common shares outstanding assuming dilution reflects the potential dilution, determined using the treasury stock method, that could occur if outstanding stock options were exercised and non-participating stock awards vested.
 
Three months ended
 
3/31/2014
 
3/31/2015
Net income
$
304.3

 
$
309.5

Less: net income allocated to outstanding restricted stock and stock unit holders
(3.2
)
 
(8.4
)
Net income allocated to common stockholders
$
301.1

 
$
301.1

 
 
 
 
Weighted-average common shares
 
 
 
Outstanding
260.4

 
258.7

Outstanding assuming dilution
268.6

 
265.7


The following table shows the weighted-average outstanding stock options (in millions) that are excluded from the calculation of diluted earnings per common share as the inclusion of such shares would be anti-dilutive.
 
Three months ended
 
3/31/2014
 
3/31/2015
Weighted-average outstanding stock options excluded
3.3

 
4.6


NOTE 9 - OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME.

The following table presents the impact of the components (in millions) of other comprehensive income or loss on deferred tax benefits (income taxes).
 
Three months ended
 
3/31/2014
 
3/31/2015
Net deferred tax benefits (income taxes) on:
 
 
 
Net unrealized holding gains or losses
$
(8.7
)
 
$
(3.1
)
Reclassification adjustment recognized in the provision for income taxes related to net gains realized on dispositions
12.4

 
5.9

Net deferred tax benefits on net unrealized holding gains or losses
3.7

 
2.8

Net deferred tax benefits (income taxes) on currency translation adjustments
(.9
)
 
.8

Total net deferred tax benefit
$
2.8

 
$
3.6



Page 11



The changes (in millions) in each component of accumulated other comprehensive income, including reclassification adjustments for the first quarter of 2015 are presented in the table below.
 
Net unrealized holding gains
 
 
 
 
 
Investments in sponsored funds
 
Equity share of UTI’s net unrealized holding gains
 
Total net unrealized holding gains
 
Currency translation adjustments
 
Total
Balances at December 31, 2014
$
165.0

 
$
.5

 
$
165.5

 
$
(29.1
)
 
$
136.4

Other comprehensive income (loss) before reclassifications and income taxes
16.6

 
.4

 
17.0

 
(2.2
)
 
14.8

Reclassification adjustments related to net gains realized on dispositions recognized in non-operating investment income, determined using average cost
(16.6
)
 

 
(16.6
)
 

 
(16.6
)
 

 
.4

 
.4

 
(2.2
)
 
(1.8
)
Deferred tax benefits (income taxes)
2.9

 
(.1
)
 
2.8

 
.8

 
3.6

Other comprehensive income (loss)
2.9

 
.3

 
3.2

 
(1.4
)
 
1.8

Balances at March 31, 2015
$
167.9

 
$
.8

 
$
168.7

 
$
(30.5
)
 
$
138.2





Page 12



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
T. Rowe Price Group, Inc.:

We have reviewed the condensed consolidated balance sheet of T. Rowe Price Group, Inc. and subsidiaries (“the Company”) as of March 31, 2015 , the related condensed consolidated statements of income, comprehensive income, and cash flows for the three -month periods ended March 31, 2015 and 2014 , and the related condensed consolidated statement of stockholders’ equity for the three -month period ended March 31, 2015 . These condensed consolidated financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of T. Rowe Price Group, Inc. and subsidiaries as of December 31, 2014 , and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 5, 2015 , we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2014 , is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/ s / KPMG LLP
Baltimore, Maryland
April 22, 2015
 


Page 13



Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.

GENERAL.

Our revenues and net income are derived primarily from investment advisory services provided to individual and institutional investors in our sponsored U.S. mutual funds and other investment portfolios. The other investment portfolios include separately managed accounts, subadvised funds, and other sponsored investment portfolios including collective investment trusts, target-date retirement trusts, Luxembourg-based funds offered to investors outside the U.S., and portfolios offered through variable annuity life insurance plans. Investment advisory clients domiciled outside the U.S. account for 5.1% of our assets under management at March 31, 2015 .

We manage a broad range of U.S., international and global stock, bond, and money market mutual funds and other investment portfolios, which meet the varied needs and objectives of individual and institutional investors. Investment advisory revenues depend largely on the total value and composition of assets under our management. Accordingly, fluctuations in financial markets and in the composition of assets under management affect our revenues and results of operations.

We remain debt-free with substantial liquidity and resources that allow us to take advantage of attractive growth opportunities, invest in key capabilities, including investment professionals, technologies, and new fund offerings; and, most importantly, provide our clients with strong investment management expertise and service both now and in the future. We expect to continue our investment in long-term initiatives to sustain and deepen our investment talent, add investment capabilities both in terms of new strategies and new investment vehicles, expand capabilities through enhanced technology, and broaden our distribution reach globally.

BACKGROUND.

U.S. stocks rose in the first quarter of 2015 despite occasional bouts of volatility and uncertainty about when the Federal Reserve would begin tightening monetary policy. Most major U.S. equity indexes reached all-time highs during March. Corporate merger activity, reduced energy costs, low interest rates, and massive quantitative easing efforts in the eurozone and Japan supported stock prices.

Stocks in developed non-U.S. markets generally outperformed U.S. shares, despite the stronger dollar. Asian markets outperformed European peers, with Japanese shares rising more than 10% and reaching a 15-year high. European markets did very well in local currency terms, but a sharp drop in the euro resulted in milder returns in dollar terms. Equities in developing markets underperformed shares in developed non-U.S. markets, hurt by weaker currencies.

Returns of several major equity market indexes for the first quarter of 2015 are as follows:
Index
 
 
S&P 500 Index
 
1.0%
NASDAQ Composite Index (1)
 
3.5%
Russell 2000 Index
 
4.3%
MSCI EAFE (Europe, Australasia, and Far East) Index
 
5.0%
MSCI Emerging Markets Index
 
2.3%
  (1) returns exclude dividends

Global bonds were mixed in the first quarter of 2015. In the U.S., investment-grade bonds produced positive returns amid weak inflation readings, decelerating economic growth, falling long-term interest rates, and strong foreign demand for U.S. Treasuries, whose yields are higher than sovereign debt yields in Europe and Japan. The yield on the benchmark 10-year Treasury note dropped from 2.17% to 1.94% during the quarter. High yield bonds outperformed high-quality issues, as the market rebounded from some oil-related weakness late last year.

Bonds in developed non-U.S. markets produced negative returns in dollar terms as the U.S. dollar appreciated against most currencies. Emerging markets bonds were mixed, generally, as bonds denominated in local currencies declined in dollar terms, but dollar-denominated debt registered gains.



Page 14



Returns for several major bond market indexes for the first quarter of 2015 are as follows:
Index
 
 
Barclays U.S. Aggregate Bond Index
 
1.6%
Credit Suisse High Yield Index
 
2.6%
Barclays Municipal Bond Index
 
1.0%
Barclays Global Aggregate Ex-U.S. Dollar Bond Index
 
(4.6)%
JPMorgan Emerging Markets Bond Index Plus
 
1.9%
 

ASSETS UNDER MANAGEMENT.

Assets under management ended the first quarter of 2015 at $772.7 billion , an increase of $25.9 billion from the end of 2014. Market appreciation and income added $24.0 billion and net cash inflows added $1.9 billion in assets under management during the first quarter of 2015 .

Assets under management (in billions) as of December 31, 2014 and March 31, 2015 , are presented by investment portfolio and investment objective in the following table.
 
As of
 
12/31/2014
 
3/31/2015
Sponsored U.S. mutual funds
$
477.6

 
$
497.2

Other investment portfolios
269.2

 
275.5

Total
$
746.8

 
$
772.7

 
 
 
 
 
As of
 
12/31/2014
 
3/31/2015
Stock and blended asset portfolios
$
579.9

 
$
602.9

Fixed income portfolios
166.9

 
169.8

Total
$
746.8

 
$
772.7


The following table details the changes in our assets under management (in billions) during the first quarter of 2015 :
 
 
Sponsored U.S. mutual funds
 
Other investment portfolios
 
Total
Assets under management at December 31, 2014
 
$
477.6

 
$
269.2

 
$
746.8

 
 
 
 
 
 
 
Net cash flows before client transfers
 
6.2

 
(4.3
)
 
1.9

Client transfers from mutual funds to other portfolios
 
(2.8
)
 
2.8

 

Net cash flows after client transfers
 
3.4

 
(1.5
)
 
1.9

Net market appreciation and income
 
16.2

 
7.8

 
24.0

Change during the period
 
19.6

 
6.3

 
25.9

 
 
 
 
 
 
 
Assets under management at March 31, 2015
 
$
497.2

 
$
275.5

 
$
772.7


More than half of the client transfers from mutual funds to other investment portfolios noted in the table above were moved from our target-date retirement funds to our collective investment trusts and target-date retirement trusts.

The net cash inflows , after client transfers, into the mutual funds of $3.4 billion , include net inflows of $2.1 billion into the stock and blended asset funds and $1.6 billion into the fixed income funds. The money market funds had net outflows of $.3 billion . The net cash outflows from the other investment portfolios were largely concentrated among a small number of clients who redeemed from large-cap U.S. equity strategies.

Our target-date retirement portfolios invest in a broadly diversified portfolio of other T. Rowe Price funds or T. Rowe Price collective investment trusts, and automatically rebalance to maintain their specific asset allocation weightings. Total net cash


Page 15



flows for the first quarter of 2015 include $7.5 billion that originated in these portfolios. Assets under management in these retirement portfolios at March 31, 2015 totaled $160.9 billion , including $134.2 billion in target-date retirement funds and $26.7 billion in target-date retirement trusts.

At December 31, 2014, assets under management in retirement related accounts and variable annuity portfolios were approximately $510 billion, of which about 60% were defined contribution assets.

We incur significant expenditures to attract new investment advisory clients and additional investments from our existing clients. These efforts involve costs that generally precede any future revenues that we might recognize from additions to our assets under management.

RESULTS OF OPERATIONS.

First quarter of 2015 versus first quarter of 2014 .

 
 
Three months ended
 
 
 
 
 
 
3/31/2015
 
3/31/2014
 
Dollar change
 
Percent change
(in millions, except per-share data)
 
 
 
 
 
 
 
 
Investment advisory fees
 
$
896.5

 
$
826.4

 
$
70.1

 
8.5
 %
Net revenues
 
$
1,027.0

 
$
954.6

 
$
72.4

 
7.6
 %
Operating expenses
 
$
549.2

 
$
505.5

 
$
43.7

 
8.6
 %
Net operating income
 
$
477.8

 
$
449.1

 
$
28.7

 
6.4
 %
Non-operating investment income
 
$
26.8

 
$
42.1

 
$
(15.3
)
 
(36.3
)%
Net income
 
$
309.5

 
$
304.3

 
$
5.2

 
1.7
 %
 
 
 
 
 
 
 
 
 
Diluted earnings per share on common stock
 
$
1.13

 
$
1.12

 
$
.01

 
.9
 %
 
 
 
 
 
 
 
 
 
Average assets under management (in billions)
 
$
759.0

 
$
701.2

 
$
57.8

 
8.2
 %

Investment advisory fees earned in the first quarter of 2015 increased over the comparable 2014 quarter as average assets under our management increased $57.8 billion , or 8.2% , to $759.0 billion . The average annualized effective fee rate earned on our assets under management during the first quarter of 2015 was 47.9 basis points , which is virtually unchanged from the 47.8 basis points earned during the first quarter of 2014 and during the full year 2014 . We voluntarily waived $13.7 million in money market related fees, including advisory fees and fund expenses, in the first quarter of 2015 , in order to maintain a positive yield for fund investors. The fee waivers in the first quarter of 2015 were down $.6 million from the comparable 2014 quarter and represent about 2% of total investment advisory fees earned during the first quarter of 2015 . Fees were waived from each of our money market mutual funds and trusts, which have combined net assets of $15.8 billion at March 31, 2015 . We expect that these fee waivers will continue for the remainder of 2015 .

Our operating margin in the first quarter of 2015 was 46.5% , a slight decline compared to 47.0% in the 2014 quarter, as we continue to make investments to broaden and deepen our investment management, distribution, and service capabilities around the world.

Net revenues

Investment advisory revenues earned from the T. Rowe Price mutual funds distributed in the U.S. were $645.9 million , an increase of $55.1 million , or 9.3% , on higher average assets under management. Average mutual fund assets under management in the first quarter of 2015 were $487.1 billion , an increase of 10.0% from the average in the first quarter of 2014 .

Investment advisory revenues earned in the first quarter of 2015 from the other investment portfolios were $250.6 million , an increase of $15.0 million , or 6.4% , from the comparable 2014 quarter. Average assets under management in the first quarter of 2015 were $271.9 billion , an increase of 5.2% , from the average in the first quarter of 2014 .

Administrative fee revenues decreased $1.5 million to $93.0 million in the first quarter of 2015 . The decrease is primarily due to a reduction in certain administrative services fees provided to certain fund shareholders. Changes in administrative fee


Page 16



revenues are generally offset by similar changes in related operating expenses that are incurred to provide services to the funds and their shareholders.

Distribution and servicing fee revenues earned from 12b-1 plans of the Advisor Class, R Class, and variable annuity class shares of our sponsored funds and portfolios increased $3.8 million from the first quarter of 2014 on greater average assets under management in these share classes. The 12b-1 fees earned are offset entirely by the costs paid to third-party intermediaries who source these assets. These costs are reported as distribution and servicing costs in the condensed consolidated statements of income.

Operating expenses

Compensation and related costs were $346.5 million in the first quarter of 2015 , an increase of $27.6 million , or 8.7% , compared to the first quarter of 2014 . The largest part of the change is attributable to a $9.6 million increase in the interim accrual for our annual variable compensation programs and $12.6 million in higher base salaries and related benefits, which result from a modest increase in salaries at the beginning of 2015 combined with a 3.7% increase in our average staff size from the first quarter of 2014 . The balance of the change from the 2014 quarter is attributable to an increase in non-cash stock-based compensation expense, an increase in temporary personnel to support our continued investment in our capabilities, and higher other employee-related costs. At March 31, 2015 , we employed 5,905 associates.

Advertising and promotion costs were $25.3 million in the first quarter of 2015 , an increase of $2.7 million from the comparable 2014 period. The increase in cost is primarily attributable to the creation and launch of a new advertising campaign. We currently expect advertising and promotion costs for the full-year 2015 could increase about 5% from 2014 levels.

Occupancy and facility costs, together with depreciation and amortization expense, were $67.4 million in the first quarter of 2015 , up $4.9 million compared to the first quarter of 2014 . The increase is primarily attributable to the added costs to update and enhance technology capabilities, including related maintenance programs.

Other operating expenses in the first quarter of 2015 were up $4.7 million from the comparable 2014 quarter, as increased business demands and our continued investment in our operating capabilities have increased costs. These higher costs in the first quarter of 2015 include those related to the firm's defined contribution recordkeeping business, information and other third-party service costs, travel costs, and other general and administrative costs.
 
Non-operating investment income

Net non-operating investment income, which includes the recognition of investment gains and losses, in the first quarter of 2015 decreased $15.3 million from the 2014 quarter to $26.8 million . We realized gains of $16.6 million from the sale of certain of our sponsored fund investments in the first quarter of 2015 compared with $32.0 million in the 2014 quarter.

Provision for income taxes

The effective tax rate for the first quarter of 2015 was 38.7% , and we currently estimate that our effective tax rate for the full-year 2015 will be about 38.8% . Our effective income tax rate reflects the relative contribution of pre-tax income generated by our non-U.S. subsidiaries that are subject to tax rates that are lower than our U.S. rates. Changes in the relative contribution of pre-tax income from U.S. and non-U.S. sources or changes in tax rates in the U.S. or relevant non-U.S. jurisdictions may affect our effective income tax rate and overall net income in the future.

CAPITAL RESOURCES AND LIQUIDITY.

Operating activities during the first quarter of 2015 provided cash flows of $543.8 million , up $56.7 million from the 2014 period. We used $20.1 million less cash in the first quarter of 2015 compared with the 2014 period to seed new sponsored investment portfolios that we consolidate and treat their underlying investment holdings as trading securities. Our cash flows were also only reduced by a $16.6 million adjustment for realized gains in the 2015 quarter compared with $32.0 million in 2014 as we sold fewer investments in sponsored funds in 2015. This adjustment backs out the realized gains from cash flows provided by operating activities as they are included in the proceeds reported as an investing activity in our consolidated statements of cash flows. Higher net income, non-cash depreciation and amortization, and non-cash stock-based compensation in 2015 period increased cash flows by $9.0 million . Timing differences on the cash settlement of our assets and liabilities increased our operating cash flows by $12.7 million compared to the 2014 period. Our interim operating cash flows do not


Page 17



include the cash impact of variable compensation that is accrued throughout the year before being substantially paid out in December.

Net cash used in investing activities totaled $34.1 million in the first quarter of 2015 , an increase of $4.3 million from the comparable 2014 period. We increased our property and equipment additions by $15.9 million during the first quarter of 2015 compared to the 2014 period. This increase in capital expenditures was offset by a $12.2 million decline in net investments made into our sponsored funds in the 2015 quarter.

Net cash used in financing activities was $205.4 million in the first quarter of 2015 , up $89.4 million from the comparable 2014 period. We increased our common stock repurchases by $82.3 million during the first quarter of 2015 compared with the 2014 period. Our cash outflow for dividends paid in 2015 increased $19.6 million over the prior year period due primarily to the 18% increase in our regular quarterly per-share dividend. These increases in net cash used in financing activities are offset in part by the $10.3 million in proceeds received from option exercises. Our financing cash flows for the first quarter of 2015 do not include the $524 million cash impact of the special dividend that was declared in February 2015 but payable on April 23, 2015.

Our cash and sponsored investment holdings at March 31, 2015 , were $3.7 billion , and we have no debt. We anticipate property and equipment expenditures for the full year 2015 could be up to $175 million and expect to fund them from our operating resources. We generally repurchase shares of our common stock over time to offset the dilution created by our equity-based compensation plans. Given the availability of our financial resources, we do not maintain an available external source of liquidity.

NEW ACCOUNTING STANDARDS.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 - Revenue from Contracts with Customers. The objective of the new standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. The revenue standard contains principles that will be applied to determine the measurement of revenue and timing of when it is recognized. In April 2015, the FASB voted to propose a one-year delay in the effective date of the standard. We would be required to adopt the new standard on January 1, 2018. We are currently evaluating the impact this standard will have on our financial position and results of operations.

In February 2015, the FASB issued Accounting Standards Update No. 2015-02 - Consolidation (Topic 810): Amendments to the Consolidation Analysis. This standard modifies existing consolidation guidance for reporting companies that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2015, and requires either a retrospective or a modified retrospective approach to adoption. The guidance does permit early adoption. We are currently evaluating the impact this standard will have on our financial position and results of operations.

We have considered all other newly issued accounting guidance that is applicable to our operations and the preparation of our condensed consolidated statements, including that which we have not yet adopted. We do not believe that any such guidance has or will have a material effect on our financial position or results of operations.

FORWARD-LOOKING INFORMATION.

From time to time, information or statements provided by or on behalf of T. Rowe Price, including those within this report, may contain certain forward-looking information, including information or anticipated information relating to: our revenues, net income and earnings per share on common stock; changes in the amount and composition of our assets under management; our expense levels; our estimated effective income tax rate; and our expectations regarding financial markets, future transactions, dividends, investments, capital expenditures, and other conditions. Readers are cautioned that any forward-looking information provided by or on behalf of T. Rowe Price is not a guarantee of future performance. Actual results may differ materially from those in forward-looking information because of various factors including, but not limited to, those discussed below and in Item 1A, Risk Factors, of our Form 10-K Annual Report for 2014 . Further, forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events.

Our future revenues and results of operations will fluctuate primarily due to changes in the total value and composition of assets under our management. Such changes result from many factors including, among other things: cash inflows and outflows in the T. Rowe Price U.S. mutual funds (Price funds) and other managed investment portfolios; fluctuations in global financial markets that result in appreciation or depreciation of the assets under our management; our introduction of new mutual funds


Page 18



and investment portfolios; and changes in retirement savings trends relative to participant-directed investments and defined contribution plans. The ability to attract and retain investors’ assets under our management is dependent on investor sentiment and confidence; the relative investment performance of the Price funds and other managed investment portfolios as compared to competing offerings and market indexes; the ability to maintain our investment management and administrative fees at appropriate levels; competitive conditions in the mutual fund, asset management, and broader financial services sectors; and our level of success in implementing our strategy to expand our business. Our revenues are substantially dependent on fees earned under contracts with the Price funds and could be adversely affected if the independent directors of one or more of the Price funds terminated or significantly altered the terms of the investment management or related administrative services agreements. Non-operating investment income will also fluctuate primarily due to the size of our investments, changes in their market valuations, and any other-than-temporary impairments that may arise, or in the case of our equity method investments, our proportionate share of the investee’s net income.

Our future results are also dependent upon the level of our expenses, which are subject to fluctuation for the following or other reasons: changes in the level of our advertising expenses in response to market conditions, including our efforts to expand our investment advisory business to investors outside the U.S. and to further penetrate our distribution channels within the U.S.; variations in the level of total compensation expense due to, among other things, bonuses, stock option grants and other equity grants, other incentive awards, changes in our employee count and mix, and competitive factors; any goodwill or other asset impairment that may arise; fluctuation in foreign currency exchange rates applicable to our investment in and the costs of our international operations; expenses and capital costs, such as technology assets, depreciation, amortization, and research and development, incurred to maintain and enhance our administrative and operating services infrastructure; unanticipated costs that may be incurred to protect investor accounts and the goodwill of our clients; and disruptions of services, including those provided by third parties, such as facilities, communications, power, and the mutual fund transfer agent and accounting systems.

Our business is also subject to substantial governmental regulation, and changes in legal, regulatory, accounting, tax, and compliance requirements may have a substantial effect on our operations and results, including but not limited to effects on costs that we incur and effects on investor interest in mutual funds and investing in general, or in particular classes of mutual funds or other investments.

Item 3.
Quantitative and Qualitative Disclosures About Market Risk.

There has been no material change in the information provided in Item 7A of the Form 10-K Annual Report for 2014 .

Item 4.
Controls and Procedures.

Our management, including our principal executive and principal financial officers, has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2015 . Based on that evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures as of March 31, 2015 , are effective at the reasonable assurance level to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, including this Form 10-Q quarterly report, is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our principal executive and principal financial officers, has evaluated any change in our internal control over financial reporting that occurred during the first quarter of 2015 , and has concluded that there was no change during the first quarter of 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



Page 19


PART II – OTHER INFORMATION
 
Item 1.
Legal Proceedings.

From time to time, various claims against us arise in the ordinary course of business, including employment-related claims. In the opinion of management, after consultation with counsel, the likelihood that an adverse determination in one or more pending claims would have a material adverse effect on our financial position or results of operations is remote.

Item 1A.
Risk Factors.

There have been no material changes in the information provided in Item 1A of our Form 10-K Annual Report for 2014 .

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.

(c) Repurchase activity during the first quarter of 2015 is as follows.
 
Month
 
Total Number of
Shares Purchased
 
Average Price
Paid per Share
 
Total Number of
Shares Purchased as
Part of Publicly
Announced Program
 
Maximum Number of Shares that May Yet Be Purchased Under the Program
January
 
511,465

 
$
79.47

 
461,661

 
20,439,143

February
 
725,511

 
$
81.32

 
600,000

 
19,839,143

March
 
434,663

 
$
82.22

 
349,388

 
19,489,755

Total
 
1,671,639

 
$
80.99

 
1,411,049

 
 

Shares repurchased by us in a quarter may include repurchases conducted pursuant to publicly announced board authorizations, outstanding shares surrendered to the company to pay the exercise price in connection with swap exercises of employee stock options, and shares withheld to cover the minimum tax withholding obligation associated with the vesting of restricted stock awards. Of the total number of shares purchased during the first quarter of 2015 , 259,903 were related to shares surrendered in connection with employee stock option exercises and 687 were related to shares withheld to cover tax withholdings associated with the vesting of restricted stock awards.

The maximum number of shares that may be purchased are available under the Board of Directors’ September 8, 2010 and December 11, 2014 , publicly announced authorization. The 1,411,049 shares of our common stock were repurchased pursuant to the Board of Directors’ September 8, 2010 , publicly announced authorizations.


Item 4.
Mine Safety Disclosures.

Not applicable.

Item 5.
Other Information.

On April 22, 2015 , we issued an earnings release reporting our results of operations for the first quarter of 2015 . A copy of that earnings release is furnished herewith as Exhibit 99. This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

SEC FILINGS.
We make available free of charge through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC. To obtain any of this information, access our website at troweprice.com. We use our website as a channel of distribution for material company information.



Page 20



Item 6.
Exhibits.

The following exhibits required by Item 601 of Regulation S-K are furnished herewith.
 
3(i).1
 
Charter of T. Rowe Price Group, Inc., as Amended by Articles of Amendment dated April 10, 2008. (Incorporated by reference from Form 10-Q Report for the quarterly period ended June 30, 2008 filed on April 10, 2008; File No. 033-07012-99).
 
 
 
3(ii)
 
Amended and Restated By-Laws of T. Rowe Price Group, Inc. as of February 12, 2009. (Incorporated by reference from Form 8-K Current Report file on February 17, 2009; File No. 033-07012-99).
 
 
 
10.18.1
 
Amended and Restated 2012 Long-term Incentive Plan.
 
 
 
15
 
Letter from KPMG LLP, independent registered public accounting firm, re unaudited interim financial information.
 
 
 
31(i).1
 
Rule 13a-14(a) Certification of Principal Executive Officer.
 
 
 
31(i).2
 
Rule 13a-14(a) Certification of Principal Financial Officer.
 
 
 
32
 
Section 1350 Certifications.
 
 
 
99
 
Earnings release issued April 22, 2015, reporting our results of operations for the first quarter of 2015.
 
 
 
101
 
The following series of unaudited XBRL-formatted documents are collectively included herewith as Exhibit 101. The financial information is extracted from T. Rowe Price Group’s unaudited condensed consolidated interim financial statements and notes that are included in this Form 10-Q Report.
 
 
 
 
 
101.INS XBRL Instance Document (File name: trow-20150331.xml).
 
 
 
 
 
101.SCH XBRL Taxonomy Extension Schema Document (File name: trow-20150331.xsd).
 
 
 
 
 
101.CAL XBRL Taxonomy Calculation Linkbase Document (File name: trow-20150331_cal.xml).
 
 
 
 
 
101.LAB XBRL Taxonomy Label Linkbase Document (File name: trow-20150331_lab.xml).
 
 
 
 
 
101.PRE XBRL Taxonomy Presentation Linkbase Document (File name: trow-20150331_pre.xml).
 
 
 
 
 
101.DEF XBRL Taxonomy Definition Linkbase Document (File name: trow-20150331_def.xml).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on April 22, 2015 .
T. Rowe Price Group, Inc.

By:    / s / Kenneth V. Moreland
Vice President, Chief Financial Officer and Treasurer

 


Page 21


EXHIBIT 10.18.1


T. ROWE PRICE GROUP, INC.
2012 LONG-TERM INCENTIVE PLAN












Table of Contents
Page



1.
History; Effective Date                                          1
2.
Purposes of the Plan                                          1
3.
Terminology                                              1
4.
Administration                                              1
(a)
Administration of the Plan                                  1
(b)
Powers of the Administrator                                  1
(c)
Delegation of Administrative Authority                              2
(d)
Non-Uniform Determinations                                  3
(e)
Limited Liability                                          3
(f)
Indemnification                                          3
(g)
Effect of Administrator’s Decision                              3
5.
Shares Issuable Pursuant to Awards                                  3    
(a)
Initial Share Pool                                      3
(b)
Adjustments to Share Pool                                  3
(c)
Code Section 162(m) Individual Limits                              4
(d)
ISO Limit                                          4
(e)
Source of Shares                                      4
6.
Participation                                              5
7.
Awards                                                  5
(a)
Awards, In General                                      5
(b)
Minimum Restriction Period for Full Value Awards                      5
(c)
Stock Options                                          5
(d)
Limitation on Reload Options                                  6
(e)
Stock Appreciation Rights                                  6
(f)
Prohibition on Repricing                                      7
(g)
Stock Awards                                          7
(h)
Stock Units                                          8
(i)
Performance Shares and Performance Units                          9
(j)
Other Stock-Based Awards                                  9
(k)
Qualified Performance-Based Awards                              9
(l)
Awards to Participants Outside the United States                  11
(m)
Limitation on Dividend Reinvestment and Dividend Equivalents              11
8.
Withholding of Taxes                                      11
9.
Transferability of Awards                                  11
10.
Adjustments for Corporate Transactions and Other Events                   12
(a)
Mandatory Adjustments                                  12
(b)
Discretionary Adjustments                              12



Table of Contents
(continued)
Page



(c)
Adjustments to Performance Goals                          12
(d)
Statutory Requirements Affecting Adjustments                     12
(e)
Dissolution or Liquidation                              13
11.
Change in Control Provisions                                  13
(a)
Termination of Awards                                  13
(b)
Continuation, Assumption or Substitution of Awards                  13
(c)
Section 409A Savings Clause                              14
12.
Substitution of Awards in Mergers and Acquisitions                      14
13.
Compliance with Securities Laws; Listing and Registration                  14
14.
Section 409A Compliance                                  15
15.
Plan Duration; Amendment and Discontinuance                          15
(a)
Plan Duration                                      15
(b)
Amendment and Discontinuance of the Plan                      16
(c)
Amendment of Awards                                  16
16.
General Provisions                                      16
(a)
Non-Guarantee of Employment or Service                      16
(b)
No Trust or Fund Created                              16
(c)
Status of Awards                                  16
(d)
Affiliate Employees                                  17
(e)
Governing Law and Interpretation                          17
(f)
Use of English Language                              17
(g)
Recovery of Amounts Paid                              17
17.
Glossary                                          17






1.
History; Effective Date.

T. ROWE PRICE GROUP, INC., a Maryland corporation (“ Price Group ”), has established the T. ROWE PRICE GROUP, INC. 2012 LONG-TERM INCENTIVE PLAN, as set forth herein, and as the same may be amended from time to time (the “ Plan ”). The Plan was adopted by the Board of Directors of Price Group (the “ Board ”) on February 23, 2012 as a successor plan to Price Group’s 2004 Stock Incentive Plan, and is effective as of the date that it is approved by the stockholders of Price Group (the “ Effective Date ”). No awards will be made under Price Group’s 2004 Stock Incentive Plan after the Effective Date of this Plan.
2.
Purposes of the Plan.

The Plan enables Price Group to continue to grant stock-based and cash-based incentive awards which the Board believes provide Price Group with a competitive advantage in recruiting, retaining and motivating key individuals whose efforts contribute to the growth, profitability and long-term success of Price Group. Incentive awards enable such individuals to acquire or increase, and benefit from, equity ownership in Price Group or receive compensation upon achievement of specified performance objectives, thereby strengthening their commitment to the success of Price Group and stimulating their efforts on behalf of Price Group. Toward this objective, the Administrator may grant stock options, stock appreciation rights, stock awards, stock units, performance shares, performance units, and other stock-based awards to eligible individuals on the terms and subject to the conditions set forth in the Plan.
3.
Terminology.

Except as otherwise specifically provided in an Award Agreement, capitalized words and phrases used in the Plan or an Award Agreement shall have the meaning set forth in the glossary at Section 17 of the Plan or as defined the first place such word or phrase appears in the Plan.
4.
Administration.

(a) Administration of the Plan. The Plan shall be administered by the Administrator.

(b) Powers of the Administrator .

The Administrator shall, except as otherwise provided under the Plan, have plenary authority, in its sole and absolute discretion, to grant Awards pursuant to the terms of the Plan to Eligible Individuals and to take all other actions necessary or desirable to carry out the purpose and intent of the Plan. Among other things, the Administrator shall have the authority, in its sole and absolute discretion, subject to the terms and conditions of the Plan to:
(i)    determine the Eligible Individuals to whom, and the time or times at which, Awards shall be granted;
(ii)    determine the types of Awards to be granted any Eligible Individual;
(iii)    determine the number of shares of Common Stock to be covered by or used for reference purposes for each Award or the value to be transferred pursuant to any Award;
(iv)    determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares acquired pursuant thereto, including, without limitation, (A) the purchase price of any shares of Common Stock, (B) the method of payment for shares purchased pursuant to any Award, (C) the method for satisfaction of any tax withholding obligation arising in connection with any Award, including by the withholding or delivery of shares of Common Stock, (D) subject to Section 7(b), the timing, terms and conditions of the exercisability, vesting or payout of any Award or any shares acquired pursuant thereto, (E) the Performance Goals applicable to any Award and the extent to which such Performance Goals have been attained, (F) the time of the expiration of any Award, (G) the effect of the Participant’s Termination of Service on any of the foregoing, and (H) all other terms, conditions and restrictions applicable to any Award or shares acquired pursuant thereto as the Administrator shall consider to be appropriate and not inconsistent with the terms of the Plan;




(v)    subject to Sections 7(f), 7(k), 10(c) and 15, modify, amend or adjust the terms and conditions of any Award;
(vi)    subject to Section 7(b), accelerate or otherwise change the time at or during which an Award may be exercised or becomes payable and waive or accelerate the lapse, in whole or in part, of any restriction, condition or risk of forfeiture with respect to such Award; provided , however , that, except in connection with death, disability or a Change in Control, no such change, waiver or acceleration shall be made with respect to a Qualified Performance-Based Award if the effect of such action would cause the Award to fail to qualify for the Section 162(m) Exemption or shall be made to any Award that is considered “deferred compensation” within the meaning of Section 409A of the Code if the effect of such action is inconsistent with Section 409A of the Code;
(vii)    determine whether an Award will be paid or settled in cash, shares of Common Stock, or in any combination thereof and whether, to what extent and under what circumstances cash or shares of Common Stock payable with respect to an Award shall be deferred either automatically or at the election of the Participant;
(viii)    for any purpose, including but not limited to, qualifying for preferred tax treatment, accommodating the customs or otherwise complying with the regulatory requirements of local or foreign (non-United States) jurisdictions, adopt, amend, modify, administer or terminate sub‑plans and special provisions applicable to Awards regulated by the laws of a jurisdiction outside of the United States, which sub-plans and special provisions may take precedence over other provisions of the Plan, and prescribe, amend and rescind rules and regulations relating to such sub‑plans and special provisions.
(ix)    establish any “blackout” period, during which transactions affecting Awards may not be effectuated, that the Administrator in its sole discretion deems necessary or advisable;
(x)    determine the Fair Market Value of shares of Common Stock or other property for any purpose under the Plan or any Award;
(xi)    administer, construe and interpret the Plan, Award Agreements and all other documents relevant to the Plan and Awards issued thereunder, and decide all other matters to be determined in connection with an Award;
(xii)    establish, amend, rescind and interpret such administrative rules, regulations, agreements, guidelines, instruments and practices for the administration of the Plan and for the conduct of its business as the Administrator deems necessary or advisable;
(xiii)    correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award or Award Agreement in the manner and to the extent the Administrator shall deem it desirable to carry it into effect; and
(xiv)    otherwise administer the Plan and all Awards granted under the Plan.
(c) Delegation of Administrative Authority. The Administrator may designate employees of Price Group or any Affiliate, including without limitation the management compensation committee of Price Group, to assist the Administrator in the administration of the Plan and, to the extent permitted by applicable law and exchange rules, may grant authority to officers or other employees to execute agreements or other documents on behalf of the Administrator; provided, however, that such delegation of authority shall not extend to the exercise of discretion with respect to Awards to Eligible Individuals who are “covered employees” within the meaning of Section 162(m) of the Code or officers under Section 16 of the Exchange Act.

(d) Non-Uniform Determinations . The Administrator’s determinations under the Plan (including without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the Award Agreements evidencing such Awards, and the ramifications of a Change in Control upon outstanding Awards) need not be uniform and may be made by the Administrator selectively among Awards or persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.

(e) Limited Liability. To the maximum extent permitted by law, no member of the Administrator shall be liable for any action taken or decision made in good faith relating to the Plan or any Award thereunder.





(f) Indemnification . To the maximum extent permitted by law, by Price Group’s charter and by‑laws, and by any directors’ and officers’ liability insurance coverage which may be in effect from time to time, the members of the Administrator and any agent or delegate of the Administrator who is an employee of Price Group or an Affiliate shall be indemnified by Price Group against any and all liabilities and expenses to which they may be subjected by reason of any act or failure to act with respect to their duties on behalf of the Plan.

(g) Effect of Administrator’s Decision . All actions taken and determinations made by the Administrator on all matters relating to the Plan or any Award pursuant to the powers vested in it hereunder shall be in the Administrator’s sole and absolute discretion, unless in contravention of any express term of the Plan, including, without limitation, any determination involving the appropriateness or equitableness of any action. All determinations made by the Administrator shall be conclusive, final and binding on all parties concerned, including Price Group, its stockholders, any Participants and any other employee, consultant, or director of Price Group and its Affiliates, and their respective successors in interest. Notwithstanding the foregoing, following a Change in Control, any determination by the Administrator as to whether “Cause” or “Good Reason” exists shall be subject to de novo review by a court of competent jurisdiction.

5. Shares Issuable Pursuant to Awards.

(a) Initial Share Pool . As of the Effective Date, the number of shares of Common Stock issuable pursuant to Awards granted under the Plan (the “ Share Pool ”) shall be equal to the sum of (i) 5,000,000 shares plus (ii) the number of shares available for issuance as of the Effective Date under Price Group’s 2004 Stock Incentive Plan (the “ 2004 Plan ”) that are not then subject to outstanding Awards.

(b) Adjustments to Share Pool . On and after the Effective Date, the Share Pool shall be adjusted, in addition to any adjustments to be made pursuant to Section 10 of the Plan, as follows:

(i)    The Share Pool shall be reduced by one share for each share of Common Stock made subject to an Award granted under the Plan;
(ii)    The Share Pool shall be increased by the number of unissued shares of Common Stock underlying or used as a reference measure for any Award or portion of an Award that is cancelled, forfeited, expired, terminated unearned or settled in cash, in any such case without the issuance of shares, and by the number of shares of Common Stock used as a reference measure for any Award that are not issued upon settlement of such Award;
(iii)    The Share Pool shall be increased by the number of shares of Common Stock that are forfeited back to Price Group after issuance due to a failure to meet an Award contingency or condition with respect to any Award or portion of an Award;
(iv)    The Share Pool shall be increased by the number of shares of Common Stock withheld by or surrendered (either actually or through attestation) to Price Group in payment of the exercise price of any Award;
(v)    The Share Pool shall be increased by the number of shares of Common Stock withheld by or surrendered (either actually or through attestation) to Price Group in payment of the statutory minimum Tax Withholding Obligation that arises in connection with any Award; and
(vi)    The Share Pool shall be increased by the amount of any shares of Common Stock reacquired by Price Group on the open market or otherwise using the cash proceeds received by Price Group in payment of the exercise price and/or the statutory minimum Tax Withholding Obligation that arises in connection with the exercise of stock options, provided , however , that the maximum number of shares that may be so added to the Share Pool, irrespective of the date of purchase, shall be equal to (A) the amount of the cash proceeds received by Price Group, divided by (B) the Fair Market Value of the Common Stock on the date of the exercise that generated such proceeds.
(c) Code Section 162(m) Individual Limits . Mandatorily adjusted pursuant to Section 10(a) on December 13, 2012 by 1.56% and on April 7, 2015 by 2.50% to reflect the Company’s declaration and payment of extraordinary dividends. Subject to adjustment as provided in Section 10 of the Plan:




(i)    the maximum number of shares of Common Stock that may be made subject to Awards granted under the Plan during a calendar year to any one person in the form of stock options or stock appreciation rights is, in the aggregate, 1,040,990 shares;
(ii)    the maximum number of shares of Common Stock that may be made subject to Awards granted under the Plan during a calendar year to any one person in the form of Performance Awards is, in the aggregate, 1,040,990 shares, and
(iii)    in connection with Awards granted under the Plan during a calendar year to any one person in the form of Performance Shares, the maximum cash amount payable thereunder is the amount equal to the number of shares made subject to the Award, as limited by Section 5(c)(ii), multiplied by the Fair Market Value as determined as of the payment date; and
(iv)    in connection with Awards granted under the Plan during a calendar year to any one person in the form of Performance Units, the maximum cash amount payable under such Performance Units is $15,000,000;
provided, however, that each of the limitations set forth above in clauses (i), (ii) and (iii) of this Section 5(c) shall be multiplied by two when applied to Awards granted to any individual during the calendar year in which such individual first commences service with Price Group or an Affiliate; and provided, further, that the limitations set forth above in clauses (ii) and (iii) of this Section 5(c) shall be multiplied by the number of calendar years over which the applicable Performance Period spans (in whole or in part), if the Performance Period is longer than 12 months’ duration, when applied to Performance Awards. If an Award is terminated, surrendered or canceled in the same year in which it was granted, such Award nevertheless will continue to be counted against the limitations set forth above in this Section 5(c) for the calendar year in which it was granted.
(d) ISO Limit .* Subject to adjustment pursuant to Section 10 of the Plan, the maximum number of shares of Common Stock that may be issued pursuant to stock options granted under the Plan that are intended to qualify as Incentive Stock Options within the meaning of Section 422 of the Code shall be 12,491,880 shares.

(e) Source of Shares . The shares of Common Stock with respect to which Awards may be made under the Plan shall be shares authorized for issuance under Price Group’s charter but unissued, including without limitation shares purchased in the open market or in private transactions.

6. Participation.

Participation in the Plan shall be open to all Eligible Individuals, as may be selected by the Administrator from time to time. The Administrator may also grant Awards to Eligible Individuals in connection with hiring, recruiting or otherwise, prior to the date the individual first performs services for Price Group or an Affiliate; provided , however , that such Awards shall not become vested or exercisable, and no shares shall be issued to such individual, prior to the date the individual first commences performance of such services.
7.
Awards.

(a) Awards, In General. The Administrator, in its sole discretion, shall establish the terms of all Awards granted under the Plan consistent with the terms of the Plan. Awards may be granted individually or in tandem with other types of Awards, concurrently with or with respect to outstanding Awards. All Awards are subject to the terms and conditions provided in the Award Agreement, which shall be delivered to the Participant receiving such Award upon, or as promptly as is reasonably practicable following, the grant of such Award. Unless otherwise specified by the Administrator, in its sole discretion, or otherwise provided in the Award Agreement, an Award shall not be effective unless the Award Agreement is signed or otherwise accepted by Price Group and the Participant receiving the Award (including by electronic delivery and/or electronic signature).

(b) Minimum Restriction Period for Full Value Awards. Except as provided below and notwithstanding any provision of the Plan to the contrary, each Full Value Award granted under the Plan shall be subject to a minimum Restriction Period of 12 months from the date of grant if vesting of or lapse of restrictions on such Award is based on the satisfaction of Performance Goals and a minimum Restriction Period of 36 months from the date of grant, applied in either pro rata installments or a single installment, if vesting of or lapse of restrictions on such Award is based solely on the Participant’s satisfaction of specified service requirements with Price Group and its




Affiliates. If the grant of a Performance Award is conditioned on satisfaction of Performance Goals, the Performance Period shall not be less than 12 months’ duration, but no additional minimum Restriction Period need apply to such Award. Except as provided below and notwithstanding any provision of the Plan to the contrary, the Administrator shall not have discretionary authority to waive the minimum Restriction Period applicable to a Full Value Award, except in the case of death, disability, retirement, or a Change in Control. The provisions of this Section 7(b) shall not apply and/or may be waived, in the Administrator’s discretion, with respect to up to the number of Full Value Awards that is equal to five percent (5%) of the aggregate Share Pool as of the Effective Date.

(c) Stock Options .

(i)     Grants . A stock option means a right to purchase a specified number of shares of Common Stock from Price Group at a specified price during a specified period of time. The Administrator may from time to time grant to Eligible Individuals Awards of Incentive Stock Options or Nonqualified Options; provided , however , that Awards of Incentive Stock Options shall be limited to employees of Price Group or of any current or hereafter existing “parent corporation” or “subsidiary corporation,” as defined in Sections 424(e) and 424(f) of the Code, respectively, of Price Group, and any other Eligible Individuals who are eligible to receive Incentive Stock Options under the provisions of Section 422 of the Code. No stock option shall be an Incentive Stock Option unless so designated by the Administrator at the time of grant or in the applicable Award Agreement.
(ii)     Exercise . Stock options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator; provided, however, that Awards of stock options may not have a term in excess of ten years’ duration unless required otherwise by applicable law. The exercise price per share subject to a stock option granted under the Plan shall not be less than the Fair Market Value of one share of Common Stock on the date of grant of the stock option, except as provided under applicable law or with respect to stock options that are granted in substitution of similar types of awards of a company acquired by Price Group or an Affiliate or with which Price Group or an Affiliate combines (whether in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock, or otherwise) to preserve the intrinsic value of such awards.
(iii)     Termination of Service . Except as provided in the applicable Award Agreement or otherwise determined by the Administrator, to the extent stock options are not vested and exercisable, a Participant’s stock options shall be forfeited upon his or her Termination of Service.
(iv)     Additional Terms and Conditions . The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of stock options, provided they are not inconsistent with the Plan.
(d) Limitation on Reload Options . Other than to fulfill Price Group’s obligation under any outstanding Award granted under a Prior Plan, the Administrator shall not grant stock options under this Plan that contain a reload or replenishment feature pursuant to which a new stock option would be granted upon receipt of delivery of Common Stock to Price Group in payment of the exercise price or any tax withholding obligation under any other stock option.

(e) Stock Appreciation Rights .

(i)     Grants. The Administrator may from time to time grant to Eligible Individuals Awards of stock appreciation rights. A stock appreciation right entitles the Participant to receive, subject to the provisions of the Plan and the Award Agreement, a payment having an aggregate value equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one share of Common Stock over (B) the base price per share specified in the Award Agreement, times (ii) the number of shares specified by the stock appreciation right, or portion thereof, which is exercised. The base price per share specified in the Award Agreement shall not be less than the lower of the Fair Market Value on the date of grant or the exercise price of any tandem stock option to which the stock appreciation right is related, or with respect to stock appreciation rights that are granted in substitution of similar types of awards of a company acquired by Price Group or an Affiliate or with which Price Group or an Affiliate combines (whether in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock, or otherwise) such base price as is necessary to preserve the intrinsic value of such awards.




(ii)     Exercise . Stock appreciation rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator; provided, however, that stock appreciation rights granted under the Plan may not have a term in excess of ten years’ duration unless required otherwise by applicable law. The applicable Award Agreement shall specify whether payment by Price Group of the amount receivable upon any exercise of a stock appreciation right is to be made in cash or shares of Common Stock or a combination of both, or shall reserve to the Administrator or the Participant the right to make that determination prior to or upon the exercise of the stock appreciation right. If upon the exercise of a stock appreciation right a Participant is to receive a portion of such payment in shares of Common Stock, the number of shares shall be determined by dividing such portion by the Fair Market Value of a share of Common Stock on the exercise date. No fractional shares shall be used for such payment and the Administrator shall determine whether cash shall be given in lieu of such fractional shares or whether such fractional shares shall be eliminated.
(iii)     Termination of Service . Except as provided in the applicable Award Agreement or otherwise determined by the Administrator, to the extent stock appreciation rights are not vested and exercisable, a Participant’s stock appreciation rights shall be forfeited upon his or her Termination of Service.
(iv)     Additional Terms and Conditions . The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of stock appreciation rights, provided they are not inconsistent with the Plan.
(f) Prohibition on Repricing. Notwithstanding anything herein to the contrary, except in connection with a corporate transaction involving Price Group (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the terms of options and stock appreciation rights granted under the Plan may not be amended, after the date of grant, to reduce the exercise price of such options or stock appreciation rights, nor may outstanding options or stock appreciation rights be canceled in exchange for (i) cash, (ii) options or stock appreciation rights with an exercise price or base price that is less than the exercise price or base price of the original outstanding options or stock appreciation rights, or (iii) other Awards, unless such action is approved by Price Group’s stockholders.

(g) Stock Awards .

(i)     Grants . The Administrator may from time to time grant to Eligible Individuals Awards of unrestricted Common Stock or Restricted Stock (collectively, “ Stock Awards ”) on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by law, as the Administrator shall determine, subject to the limitations set forth in Section 7(b). Stock Awards shall be evidenced in such manner as the Administrator may deem appropriate, including via book-entry registration.
(ii)     Vesting . Restricted Stock shall be subject to such vesting, restrictions on transferability and other restrictions, if any, and/or risk of forfeiture as the Administrator may impose at the date of grant or thereafter. The Restriction Period to which such vesting, restrictions and/or risk of forfeiture apply may lapse under such circumstances, including without limitation upon the attainment of Performance Goals, in such installments, or otherwise, as the Administrator may determine. In the event that the Administrator conditions the grant or vesting of a Stock Award upon the attainment of Performance Goals or the attainment of Performance Goals and the continued service of the Participant, the Administrator may, prior to or at the time of grant, designate the Stock Award as a Qualified Performance-Based Award. Subject to the provisions of the Plan and the applicable Award Agreement, during the Restriction Period, the Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber shares of Restricted Stock.
(iii)     Rights of a Stockholder; Dividends . Except to the extent restricted under the Award Agreement relating to the Restricted Stock, a Participant granted Restricted Stock shall have all of the rights of a stockholder of Common Stock including, without limitation, the right to vote Restricted Stock. Dividends declared payable on Restricted Stock shall be paid either at the dividend payment date or deferred for payment to such later date as determined by the Administrator, and shall be paid in cash or as unrestricted shares of Common Stock having a Fair Market Value equal to the amount of such dividends or may be reinvested in additional shares of Restricted Stock; provided , however , that dividends declared payable on Restricted Stock that is granted as a Performance Award shall be held by Price Group and made subject to forfeiture at least until achievement of the applicable Performance Goal related to such shares of Restricted Stock. Stock distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk




of forfeiture to the same extent as the Restricted Stock with respect to which such Common Stock or other property has been distributed. As soon as is practicable following the date on which restrictions on any shares of Restricted Stock lapse, Price Group shall deliver to the Participant the certificates for such shares or shall cause the shares to be registered in the Participant’s name in book-entry form, in either case with the restrictions removed, provided that the Participant shall have complied with all conditions for delivery of such shares contained in the Award Agreement or otherwise reasonably required by Price Group.
(iv)     Termination of Service . Except as provided in the applicable Award Agreement, upon Termination of Service during the applicable Restriction Period, Restricted Stock and any accrued but unpaid dividends that are at that time subject to restrictions shall be forfeited; provided that, subject to the limitations set forth in Section 7(b), the Administrator may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified causes, and the Administrator may in other cases waive in whole or in part the forfeiture of Restricted Stock.
(v)     Additional Terms and Conditions . The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of Restricted Stock, provided they are not inconsistent with the Plan.
(h) Stock Units .

(i)     Grants . The Administrator may from time to time grant to Eligible Individuals Awards of unrestricted stock Units or Restricted Stock Units on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by law, as the Administrator shall determine, subject to the limitations set forth in Section 7(b). Restricted Stock Units represent a contractual obligation by Price Group to deliver a number of shares of Common Stock, an amount in cash equal to the Fair Market Value of the specified number of shares subject to the Award, or a combination of shares of Common Stock and cash, in accordance with the terms and conditions set forth in the Plan and any applicable Award Agreement.
(ii)     Vesting and Payment . Restricted Stock Units shall be subject to such vesting, risk of forfeiture and/or payment provisions as the Administrator may impose at the date of grant. The Restriction Period to which such vesting and/or risk of forfeiture apply may lapse under such circumstances, including without limitation upon the attainment of Performance Goals, in such installments, or otherwise, as the Administrator may determine. In the event that the Administrator conditions the vesting and/or lapse of risk of forfeiture of Restricted Stock Units upon the attainment of Performance Goals or the attainment of Performance Goals and the continued service of the Participant, the Administrator may, prior to or at the time of grant, designate the Award of Restricted Stock Units as a Qualified Performance-Based Award. Shares of Common Stock, cash or a combination of shares of Common Stock and cash, as applicable, payable in settlement of Restricted Stock Units shall be delivered to the Participant as soon as administratively practicable, but no later than 30 days, after the date on which payment is due under the terms of the Award Agreement provided that the Participant shall have complied with all conditions for delivery of such shares or payment contained in the Award Agreement or otherwise reasonably required by Price Group, or in accordance with an election of the Participant, if the Administrator so permits, that meets the requirements of Section 409A of the Code.
(iii)     No Rights of a Stockholder; Dividend Equivalents . Until shares of Common Stock are issued to the Participant in settlement of stock Units, the Participant shall not have any rights of a stockholder of Price Group with respect to the stock Units or the shares issuable thereunder. The Administrator may grant to the Participant the right to receive Dividend Equivalents on stock Units, on a current, reinvested and/or restricted basis, subject to such terms as the Administrator may determine provided , however , that Dividend Equivalents payable on stock Units that are granted as a Performance Award shall, rather than be paid on a current basis, be accrued and made subject to forfeiture at least until achievement of the applicable Performance Goal related to such stock Units.
(iv)     Termination of Service . Upon Termination of Service during the applicable deferral period or portion thereof to which forfeiture conditions apply, or upon failure to satisfy any other conditions precedent to the delivery of shares of Common Stock or cash to which such Restricted Stock Units relate, all Restricted Stock Units and any accrued but unpaid Dividend Equivalents with respect to such Restricted Stock Units that are then subject to deferral or restriction shall be forfeited; provided that, subject to the limitations set forth in Section 7(b), the Administrator may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock Units will be waived in whole or in part in




the event of termination resulting from specified causes, and the Administrator may in other cases waive in whole or in part the forfeiture of Restricted Stock Units.
(v)     Additional Terms and Conditions . The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of stock Units, provided they are not inconsistent with the Plan.
(i) Performance Shares and Performance Units .

(i)     Grants . The Administrator may from time to time grant to Eligible Individuals Awards in the form of Performance Shares and Performance Units. Performance Shares, as that term is used in this Plan, shall refer to shares of Common Stock or Units that are expressed in terms of Common Stock, the issuance, vesting, lapse of restrictions on or payment of which is contingent on performance as measured against predetermined objectives over a specified Performance Period. Performance Units, as that term is used in this Plan, shall refer to dollar-denominated Units valued by reference to designated criteria established by the Administrator, other than Common Stock, the issuance, vesting, lapse of restrictions on or payment of which is contingent on performance as measured against predetermined objectives over a specified Performance Period. The applicable Award Agreement shall specify whether Performance Shares and Performance Units will be settled or paid in cash or shares of Common Stock or a combination of both, or shall reserve to the Administrator or the Participant the right to make that determination prior to or at the payment or settlement date.
(ii)     Performance Criteria . The Administrator shall, prior to or at the time of grant, condition the grant, vesting or payment of, or lapse of restrictions on, an Award of Performance Shares or Performance Units upon (A) the attainment of Performance Goals during a Performance Period or (B) the attainment of Performance Goals and the continued service of the Participant. The Administrator may, prior to or at the time of grant, designate an Award of Performance Shares or Performance Units as a Qualified Performance-Based Award. The length of the Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained shall be conclusively determined by the Administrator in the exercise of its absolute discretion. Performance Goals may include minimum, maximum and target levels of performance, with the size of the Award or payout of Performance Shares or Performance Units or the vesting or lapse of restrictions with respect thereto based on the level attained. An Award of Performance Shares or Performance Units shall be settled as and when the Award vests or at a later time specified in the Award Agreement or in accordance with an election of the Participant, if the Administrator so permits, that meets the requirements of Section 409A of the Code.
(iii)     Additional Terms and Conditions . The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of Performance Shares or Performance Units, provided they are not inconsistent with the Plan.
(j) Other Stock-Based Awards. The Administrator may from time to time grant to Eligible Individuals Awards in the form of Other Stock-Based Awards. Other Stock-Based Awards in the form of Dividend Equivalents may be (A) awarded on a free-standing basis or in connection with another Award other than a stock option or stock appreciation right, (B) paid currently or credited to an account for the Participant, including the reinvestment of such credited amounts in Common Stock equivalents, to be paid on a deferred basis, and (C) settled in cash or Common Stock as determined by the Administrator; provided , however , that Dividend Equivalents payable on Other Stock-Based Awards that are granted as a Performance Award shall, rather than be paid on a current basis, be accrued and made subject to forfeiture at least until achievement of the applicable Performance Goal related to such Other Stock-Based Awards. Any such settlements, and any such crediting of Dividend Equivalents, may be subject to such conditions, restrictions and contingencies as the Administrator shall establish.

(k) Qualified Performance-Based Awards .

(i)     Stock Options and Stock Appreciation Rights . The provisions of the Plan are intended to ensure that all stock options and stock appreciation rights granted hereunder to any Participant who is or may be a “covered employee” (within the meaning of Section 162(m)(3) of the Code) in the tax year in which such stock option or stock appreciation right is expected to be deductible to Price Group or an Affiliate qualify for the Section 162(m) Exemption, and all such Awards shall therefore be considered Qualified Performance-Based Awards, and the Plan shall be interpreted and operated consistent with that intention.




(ii)     Grant Process for Performance Awards . When granting any Award other than a stock option or stock appreciation right, the Administrator may designate such Award as a Qualified Performance-Based Award, based upon a determination that (A) the recipient is or may be a “covered employee” (within the meaning of Section 162(m)(3) of the Code) with respect to such Award and (B) the Administrator wishes such Award to qualify for the Section 162(m) Exemption. For any Award so designated as a Qualified Performance-Based Award, the Administrator shall take steps to ensure that the terms of any such Award (and of the grant thereof) shall be consistent with such designation (including, without limitation, that all such Awards be granted by a committee composed solely of “outside directors” (within the meaning of Section 162(m) of the Code) and that the Performance Goals be established, in writing, by the Administrator within the time period prescribed by Section 162(m) of the Code). The Performance Goals established by the Administrator for each Qualified Performance-Based Award shall be objective such that a third party having knowledge of the relevant facts could determine whether or not any Performance Goal has been achieved, or the extent of such achievement, and the amount, if any, which has been earned by the Participant based on such performance. The Administrator may retain in an Award Agreement the discretion to reduce (but not to increase) the amount or number of Qualified Performance-Based Awards which will be earned based on the achievement of Performance Goals. When the Performance Goals are established, the Administrator shall also specify the manner in which the level of achievement of such Performance Goals shall be calculated and the weighting assigned to such Performance Goals.
(iii)     Certification and Payment. Following completion of the applicable Performance Period, and prior to any, as applicable, grant, vesting, lapse of restrictions on or payment of a Qualified Performance-Based Award, the Administrator shall determine in accordance with the terms of the Award and shall certify in writing whether the applicable Performance Goal(s) were achieved, or the level of such achievement, and the amount, if any, earned by the Participant based upon such performance. For this purpose, approved minutes of the meeting of the Administrator at which certification is made shall be sufficient to satisfy the requirement of a written certification. No Qualified Performance-Based Awards will be granted, become vested, have restrictions lapse or be paid, as applicable, for a Performance Period until such certification is made by the Administrator. The amount of a Qualified Performance-Based Award actually granted, vested, or paid to a Participant, or on which restrictions shall lapse, may be less than the amount determined by the applicable Performance Goal formula, at the discretion of the Administrator to take into account additional factors that the Administrator may deem relevant to the assessment of individual or corporate performance for the Performance Period or otherwise, subject to the terms and conditions of the applicable Award Agreement.
(iv)     Performance Goals. Performance Goals may be applied on a per share or absolute basis and relative to one or more Performance Metrics, or any combination thereof, and may be measured pursuant to U.S. GAAP, non‑GAAP or other objective standards in a manner consistent with Price Group’s or its Affiliate’s established accounting policies, all as the Administrator shall determine at the time the Performance Goals for a Performance Period are established. In addition, to the extent consistent with the requirements of the Section 162(m) Exemption, the Administrator may provide at the time Performance Goals are established for Qualified Performance-Based Awards that the manner in which such Performance Goals are to be calculated or measured may take into account, or ignore, capital costs, interest, taxes, depreciation and amortization and other factors over which the Participant has no (or limited) control including, but not limited to, restructurings, discontinued operations, impairments, changes in foreign currency exchange rates, extraordinary items, certain identified expenses (including, but not limited to, cash bonus expenses, incentive expenses and acquisition-related transaction and integration expenses), the consolidation of investment products, other unusual non-recurring items, industry margins, general economic conditions, interest rate movements and the cumulative effects of tax or accounting changes.
(v)     Non-delegation . No delegate of the Administrator is permitted to exercise authority granted to the Administrator under Section 4 to the extent that the exercise of such authority by the delegate would cause an Award designated as a Qualified Performance-Based Award not to qualify for, or to cease to qualify for, the Section 162(m) Exemption.
(l) Awards to Participants Outside the United States. The Administrator may grant Awards to Eligible Individuals who are foreign nationals, who are located outside the United States or who are not compensated from a payroll maintained in the United States, or who are otherwise subject to (or could cause Price Group or an Affiliate to be subject to) tax, legal or regulatory provisions of countries or jurisdictions outside the United States, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Administrator, be necessary or desirable in order that any such Award shall conform to laws, regulations, and customs of the country




or jurisdiction in which the Participant is then resident or primarily employed or to foster and promote achievement of the purposes of the Plan.

(m) Limitation on Dividend Reinvestment and Dividend Equivalents . Reinvestment of dividends in additional Restricted Stock at the time of any dividend payment, and the payment of shares of Common Stock with respect to dividends to Participants holding Awards of stock Units, shall only be permissible if sufficient shares are available under the Share Pool for such reinvestment or payment (taking into account then outstanding Awards). In the event that sufficient shares are not available under the Share Pool for such reinvestment or payment, such reinvestment or payment shall be made in the form of a grant of stock Units equal in number to the shares of Common Stock that would have been obtained by such payment or reinvestment, the terms of which stock Units shall provide for settlement in cash and for Dividend Equivalent reinvestment in further stock Units on the terms contemplated by this Section 7(m).

8. Withholding of Taxes.

Participants and holders of Awards shall pay to Price Group or its Affiliate, or make arrangements satisfactory to the Administrator for payment of, any Tax Withholding Obligation in respect of Awards granted under the Plan no later than the date of the event creating the tax or social insurance contribution liability. The obligations of Price Group under the Plan shall be conditional on such payment or arrangements. Unless otherwise determined by the Administrator, Tax Withholding Obligations may be settled in whole or in part with shares of Common Stock, including unrestricted outstanding shares surrendered to Price Group and unrestricted shares that are part of the Award that gives rise to the Tax Withholding Obligation, having a Fair Market Value on the date of surrender or withholding equal to the statutory minimum amount (and not any greater amount) required to be withheld for tax or social insurance contribution purposes, all in accordance with such procedures as the Administrator establishes. Price Group or its Affiliate may deduct, to the extent permitted by law, any such Tax Withholding Obligations from any payment of any kind otherwise due to the Participant or holder of an Award.
9.
Transferability of Awards.

Except as otherwise determined by the Administrator, and in any event in the case of an Incentive Stock Option or a tandem stock appreciation right granted with respect to an Incentive Stock Option, no Award granted under the Plan shall be transferable by a Participant otherwise than by will or the laws of descent and distribution. The Administrator shall not permit any transfer of an Award for value. An Award may be exercised during the lifetime of the Participant, only by the Participant or, during the period the Participant is under a legal disability, by the Participant’s guardian or legal representative, unless otherwise determined by the Administrator. Awards granted under the Plan shall not be subject in any manner to alienation, anticipation, sale, transfer, assignment, pledge, or encumbrance, except as otherwise determined by the Administrator; provided, however, that the restrictions in this sentence shall not apply to the shares of Common Stock received in connection with an Award after the date that the restrictions on transferability of such shares set forth in the applicable Award Agreement have lapsed.
10.
Adjustments for Corporate Transactions and Other Events.

(a) Mandatory Adjustments . In the event of a merger, consolidation, stock rights offering, liquidation, statutory share exchange or similar event affecting Price Group (each, a “ Corporate Event ”) or a stock dividend, stock split, reverse stock split, separation, spinoff, reorganization, extraordinary dividend of cash or other property, share combination or subdivision, or recapitalization or similar event affecting the capital structure of Price Group (each, a “ Share Change ”), the Administrator shall make equitable and appropriate substitutions or proportionate adjustments to (i) the aggregate number and kind of shares of Common Stock or other securities on which Awards under the Plan may be granted to Eligible Individuals, (ii) the maximum number of shares of Common Stock or other securities with respect to which Awards may be granted during any one calendar year to any individual, (iii) the maximum number of shares of Common Stock or other securities that may be issued with respect to Incentive Stock Options granted under the Plan, (iv) the number of shares of Common Stock or other securities covered by each outstanding Award and the exercise price, base price or other price per share, if any, and other relevant terms of each outstanding Award, and (v) all other numerical limitations relating to Awards, whether contained in this Plan or in Award Agreements; provided , however , that any fractional shares resulting from any such adjustment shall be eliminated.





(b) Discretionary Adjustments . In the case of Corporate Events, the Administrator may make such other adjustments to outstanding Awards as it determines to be appropriate and desirable, which adjustments may include, without limitation, (i) the cancellation of outstanding Awards in exchange for payments of cash, securities or other property or a combination thereof having an aggregate value equal to the value of such Awards, as determined by the Administrator in its sole discretion (it being understood that in the case of a Corporate Event with respect to which stockholders of Price Group receive consideration other than publicly traded equity securities of the ultimate surviving entity, any such determination by the Administrator that the value of a stock option or stock appreciation right shall for this purpose be deemed to equal the excess, if any, of the value of the consideration being paid for each share of Common Stock pursuant to such Corporate Event over the exercise price or base price of such stock option or stock appreciation right shall conclusively be deemed valid and that any stock option or stock appreciation right may be cancelled for no consideration upon a Corporate Event if its exercise price or base price does not exceed the value of the consideration being paid for each share of Common Stock pursuant to such Corporate Event), (ii) the substitution of securities or other property (including, without limitation, cash or other securities of Price Group and securities of entities other than Price Group) for the shares of Common Stock subject to outstanding Awards, and (iii) the substitution of equivalent awards, as determined in the sole discretion of the Administrator, of the surviving or successor entity or a parent thereof (“ Substitute Awards ”).

(c) Adjustments to Performance Goals . The Administrator may, in its discretion, adjust the Performance Goals applicable to any Awards to reflect any unusual or non-recurring events and other extraordinary items, impact of charges for restructurings, discontinued operations and the cumulative effects of accounting or tax changes, each as defined by generally accepted accounting principles or as identified in Price Group’s financial statements, notes to the financial statements, management’s discussion and analysis or other Price Group filings with the Securities and Exchange Commission; provided, however, that, except in connection with death, disability or a Change in Control, no such adjustment shall be made if the effect would be to cause an Award that is intended to be a Qualified Performance-Based Award to no longer constitute a Qualified Performance-Based Award. If the Administrator determines that a change in the business, operations, corporate structure or capital structure of Price Group or the applicable subsidiary, business segment or other operational unit of Price Group or any such entity or segment, or the manner in which any of the foregoing conducts its business, or other events or circumstances, render the Performance Goals to be unsuitable, the Administrator may modify such Performance Goals or the related minimum acceptable level of achievement, in whole or in part, as the Administrator deems appropriate and equitable; provided, however , that, except in connection with death, disability or a Change in Control, no such modification shall be made if the effect would be to cause an Award that is intended to be a Qualified Performance-Based Award to no longer constitute a Qualified Performance-Based Award.

(d) Statutory Requirements Affecting Adjustments . Notwithstanding the foregoing: (A) any adjustments made pursuant to Section 10 to Awards that are considered “deferred compensation” within the meaning of Section 409A of the Code shall be made in compliance with the requirements of Section 409A of the Code; (B) any adjustments made pursuant to Section 10 to Awards that are not considered “deferred compensation” subject to Section 409A of the Code shall be made in such a manner as to ensure that after such adjustment, the Awards either (1) continue not to be subject to Section 409A of the Code or (2) comply with the requirements of Section 409A of the Code; (C) in any event, the Administrator shall not have the authority to make any adjustments pursuant to Section 10 to the extent the existence of such authority would cause an Award that is not intended to be subject to Section 409A of the Code at the date of grant to be subject thereto; and (D) any adjustments made pursuant to Section 10 to Awards that are Incentive Stock Options shall be made in compliance with the requirements of Section 424(a) of the Code.

(e) Dissolution or Liquidation. Unless the Administrator determines otherwise, all Awards outstanding under the Plan shall terminate upon the dissolution or liquidation of Price Group.

11. Change in Control Provisions.

(a) Termination of Awards . Notwithstanding the provisions of Section 11(b), in the event that any transaction resulting in a Change in Control occurs, outstanding Awards will terminate upon the effective time of such Change in Control unless provision is made in connection with the transaction for the continuation or assumption of such Awards by, or for the issuance of Substitute Awards of, the surviving or successor entity or a parent thereof. In the event of such termination, (i) the outstanding Awards that will terminate upon the effective time of the Change in Control shall, immediately before the effective time of the Change in Control, become fully exercisable, be considered to be earned and payable in full, any deferral or other restriction thereon shall lapse, and any Restriction Period thereon shall terminate, (ii) the holders of stock options, stock appreciation rights and other




Awards granted under the Plan that are exchangeable for or convertible into Common Stock will be permitted, immediately before the Change in Control, to exercise or convert all portions of such Awards, and (iii) the Administrator may take any of the actions set forth in Section 10 with respect to any or all Awards granted under the Plan. Implementation of the provisions of the immediately foregoing sentence shall be conditioned upon consummation of the Change in Control.

(b) Continuation, Assumption or Substitution of Awards . Unless otherwise provided in the applicable Award Agreement, if a Change in Control occurs under which provision is made in connection with the transaction for the continuation or assumption of outstanding Awards by, or for the issuance of Substitute Awards of, the surviving or successor entity or a parent thereof, then upon a Participant’s Termination of Service during the 18-month period following a Change in Control, (x) by Price Group, an Affiliate, or a successor to Price Group or an Affiliate other than for Cause, Total and Permanent Disability or death or (y) by the Participant for Good Reason:

(i)    any outstanding stock options and stock appreciation rights granted under the Plan to the Participant or any such Substitute Awards which are not then exercisable and vested shall become fully exercisable and vested;
(ii)    the restrictions and deferral limitations applicable to any shares of Restricted Stock granted under the Plan to the Participant or any such Substitute Awards shall lapse and such shares of Restricted Stock shall become free of all restrictions and become fully vested and transferable;
(iii)    all Restricted Stock Units, Performance Shares and Performance Units granted under the Plan to the Participant or any such Substitute Awards shall be considered to be earned and payable at target level, any deferral or other restriction thereon shall lapse, any Restriction Period thereon shall terminate, and such Restricted Stock Units, Performance Shares and Performance Units or any such Substitute Awards shall be settled in cash or shares of Common Stock (consistent with the terms of the Award Agreement after taking into account the effect of the Change in Control transaction on the shares) as promptly as is practicable;
(iv)    each outstanding Performance Award granted under the Plan to the Participant or any such Substitute Award shall be deemed to satisfy any applicable Performance Goals as set forth in the applicable Award Agreement; and
(v)    subject to Section 15, the Administrator may also make additional adjustments and/or settlements of outstanding Awards granted to the Participant or any Substitute Awards as it deems appropriate and consistent with the Plan’s purposes.
(c) Section 409A Savings Clause . Notwithstanding the foregoing, if any Award is considered a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, this Section 11 shall apply to such Award only to the extent that its application would not result in the imposition of any tax or interest or the inclusion of any amount in income under Section 409A of the Code.

12. Substitution of Awards in Mergers and Acquisitions.

Awards may be granted under the Plan from time to time in substitution for assumed awards held by employees, officers, consultants or directors of entities who become employees, officers, consultants or directors of Price Group or an Affiliate as the result of a merger or consolidation of the entity for which they perform services with Price Group or an Affiliate, or the acquisition by Price Group or an Affiliate of the assets or stock of the such entity. The terms and conditions of any Awards so granted may vary from the terms and conditions set forth herein to the extent that the Administrator deems appropriate at the time of grant to conform the Awards to the provisions of the assumed awards for which they are substituted and to preserve their intrinsic value as of the date of the merger, consolidation or acquisition transaction. To the extent permitted by applicable law and marketplace or listing rules of the primary securities market or exchange on which the Common Stock is listed or admitted for trading, any available shares under a stockholder-approved plan of an acquired company (as appropriately adjusted to reflect the transaction) may be used for Awards granted pursuant to this Section 12 and, upon such grant, shall not reduce the Share Pool.




13.
Compliance with Securities Laws; Listing and Registration.

(a)    The obligation of Price Group to sell or deliver Common Stock with respect to any Award granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Administrator. If at any time the Administrator determines that the delivery of Common Stock under the Plan is or may be unlawful under the laws of any applicable jurisdiction, or Federal, state or foreign (non-United States) securities laws, the right to exercise an Award or receive shares of Common Stock pursuant to an Award shall be suspended until the Administrator determines that such delivery is lawful. If at any time the Administrator determines that the delivery of Common Stock under the Plan is or may violate the rules of any exchange on which Price Group’s securities are then listed for trade, the right to exercise an Award or receive shares of Common Stock pursuant to an Award shall be suspended until the Administrator determines that such delivery would not violate such rules. If the Administrator determines that the exercise or nonforfeitability of, or delivery of benefits pursuant to, any Award would violate any applicable provision of securities laws or the listing requirements of any stock exchange upon which any of Price Group’s equity securities are listed, then the Administrator may postpone any such exercise, nonforfeitability or delivery, as applicable, but Price Group shall use all reasonable efforts to cause such exercise, nonforfeitability or delivery to comply with all such provisions at the earliest practicable date.
(b)    Each Award is subject to the requirement that, if at any time the Administrator determines, in its absolute discretion, that the listing, registration or qualification of Common Stock issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Award or the issuance of Common Stock, no such Award shall be granted or payment made or Common Stock issued, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Administrator.
(c)    In the event that the disposition of Common Stock acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act of 1933, as amended (the “ Securities Act ”), and is not otherwise exempt from such registration, such Common Stock shall be restricted against transfer to the extent required by the Securities Act or regulations thereunder, and the Administrator may require a person receiving Common Stock pursuant to the Plan, as a condition precedent to receipt of such Common Stock, to represent to Price Group in writing that the Common Stock acquired by such person is acquired for investment only and not with a view to distribution and that such person will not dispose of the Common Stock so acquired in violation of Federal, state or foreign securities laws and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company to issue the Common Stock in compliance with applicable Federal, state or foreign securities laws.
14.
Section 409A Compliance.

It is the intention of Price Group that any Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code shall comply in all respects with the requirements of Section 409A of the Code to avoid the imposition of any tax or interest or the inclusion of any amount in income pursuant to Section 409A of the Code, and the terms of each such Award shall be construed, administered and deemed amended, if applicable, in a manner consistent with this intention. Notwithstanding the foregoing, neither Price Group nor any of its Affiliates nor any of its or their directors, officers, employees, agents or other service providers will be liable for any taxes, penalties or interest imposed on any Participant or other person with respect to any amounts paid or payable (whether in cash, shares of Common Stock or other property) under any Award, including any taxes, penalties or interest imposed under or as a result of Section 409A of the Code. Any payments described in an Award that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. For purposes of any Award, each amount to be paid or benefit to be provided to a Participant that constitutes deferred compensation subject to Section 409A of the Code shall be construed as a separate identified payment for purposes of Section 409A of the Code. For purposes of Section 409A of the Code, the payment of Dividend Equivalents under any Award shall be construed as earnings and the time and form of payment of such Dividend Equivalents shall be treated separately from the time and form of payment of the underlying Award. Notwithstanding any other provision of the Plan to the contrary, with respect to any Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, any payments (whether in cash, shares of Common Stock or other




property) to be made with respect to the Award that become payable on account of the Participant’s separation from service, within the meaning of Section 409A of the Code, while the Participant is a “specified employee” (as determined in accordance with the uniform policy adopted by the Administrator with respect to all of the arrangements subject to Section 409A of the Code maintained by Price Group and its Affiliates) and which would otherwise be paid within six months after the Participant’s separation from service shall be accumulated (without interest) and paid on the first day of the seventh month following the Participant’s separation from service or, if earlier, within 15 days after the appointment of the personal representative or executor of the Participant’s estate following the Participant’s death. Notwithstanding anything in the Plan or an Award Agreement to the contrary, in no event shall the Administrator exercise its discretion to accelerate the payment or settlement of an Award where such payment or settlement constitutes deferred compensation within the meaning of Code section 409A unless, and solely to the extent that, such accelerated payment or settlement is permissible under Treasury Regulation section 1.409A-3(j)(4).
15.
Plan Duration; Amendment and Discontinuance.

(a) Plan Duration . The Plan shall remain in effect, subject to the right of the Board or the ECC to amend or terminate the Plan at any time, until the earlier of (a) the earliest date as of which all Awards granted under the Plan have been satisfied in full or terminated and no shares of Common Stock approved for issuance under the Plan remain available to be granted under new Awards or (b) February 22, 2022. No Awards shall be granted under the Plan after such termination date. Subject to other applicable provisions of the Plan, all Awards made under the Plan on or before February 22, 2022, or such earlier termination of the Plan, shall remain in effect until such Awards have been satisfied or terminated in accordance with the Plan and the terms of such Awards. Notwithstanding the continuation of the Plan, no Award (other than a stock option or stock appreciation right) that is intended to be a Qualified Performance-Based Award shall be granted on or after the fifth anniversary of the Effective Date unless the material terms of the applicable performance goals, within the meaning of Treasury Regulation Section 1.162-27(e)(4)(i), are approved by the stockholders of Price Group no later than the first stockholder meeting that occurs in the fifth year following the Effective Date.

(b) Amendment and Discontinuance of the Plan . The Board or the ECC may amend, alter or discontinue the Plan, but no amendment, alteration or discontinuation shall be made which would materially impair the rights of a Participant with respect to a previously granted Award without such Participant’s consent, except such an amendment made to comply with applicable law or rule of any securities exchange or market on which the Common Stock is listed or admitted for trading or to prevent adverse tax or accounting consequences to Price Group or the Participant. Notwithstanding the foregoing, no such amendment shall be made without the approval of Price Group’s stockholders to the extent such amendment would (A) materially increase the benefits accruing to Participants under the Plan, (B) materially increase the number of shares of Common Stock which may be issued under the Plan or to a Participant, (C) materially expand the eligibility for participation in the Plan, (D) eliminate or modify the prohibition set forth in Section 7(f) on repricing of stock options and stock appreciation rights, (E) lengthen the maximum term or lower the minimum exercise price or base price permitted for stock options and stock appreciation rights, or (F) modify the limitation on the issuance of reload or replenishment options. Except as otherwise determined by the Board or ECC, termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

(c) Amendment of Awards . Subject to Section 7(f), the Administrator may unilaterally amend the terms of any Award theretofore granted, but no such amendment shall materially impair the rights of any Participant with respect to an Award without the Participant’s consent, except such an amendment made to cause the Plan or Award to comply with applicable law, applicable rule of any securities exchange on which the Common Stock is listed or admitted for trading, or to prevent adverse tax or accounting consequences for the Participant or the Company or any of its Affiliates.

16. General Provisions.

(a) Non-Guarantee of Employment or Service . Nothing in the Plan or in any Award Agreement thereunder shall confer any right on an individual to continue in the service of Price Group or any Affiliate or shall interfere in any way with the right of Price Group or any Affiliate to terminate such service at any time with or without cause or notice and whether or not such termination results in (i) the failure of any Award to vest or become payable; (ii) the forfeiture of any unvested or vested portion of any Award; and/or (iii) any other adverse effect on the individual’s interests under any Award or the Plan.




(b) No Trust or Fund Created . Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between Price Group and a Participant or any other person. To the extent that any Participant or other person acquires a right to receive payments from Price Group pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of Price Group.

(c) Status of Awards. Awards shall be special incentive payments to the Participant and shall not be taken into account in computing the amount of salary or compensation of the Participant for purposes of determining any pension, retirement, death, severance or other benefit under (a) any pension, retirement, profit-sharing, bonus, insurance, severance or other employee benefit plan of Price Group or any Affiliate now or hereafter in effect under which the availability or amount of benefits is related to the level of compensation or (b) any agreement between (i) Price Group or any Affiliate and (ii) the Participant, except as such plan or agreement shall otherwise expressly provide.

(d) Affiliate Employees . In the case of a grant of an Award to an Eligible Individual who provides services to any Affiliate, Price Group may, if the Administrator so directs, issue or transfer the shares of Common Stock, if any, covered by the Award to the Affiliate, for such lawful consideration as the Administrator may specify, upon the condition or understanding that the Affiliate will transfer the shares of Common Stock to the Eligible Individual in accordance with the terms of the Award specified by the Administrator pursuant to the provisions of the Plan. All shares of Common Stock underlying Awards that are forfeited or canceled after such issue or transfer of shares to the Affiliate shall revert to Price Group.

(e) Governing Law and Interpretation. The validity, construction and effect of the Plan, of Award Agreements entered into pursuant to the Plan, and of any rules, regulations, determinations or decisions made by the Administrator relating to the Plan or such Award Agreements, and the rights of any and all persons having or claiming to have any interest therein or thereunder, shall be determined exclusively in accordance with applicable federal laws and the laws of the State of Maryland, without regard to its conflict of laws principles. The captions of the Plan are not part of the provisions hereof and shall have no force or effect.

(f) Use of English Language. The Plan, each Award Agreement, and all other documents, notices and legal proceedings entered into, given or instituted pursuant to an Award shall be written in English, unless otherwise determined by the Administrator. If a Participant receives an Award Agreement, a copy of the Plan or any other documents related to an Award translated into a language other than English, and if the meaning of the translated version is different from the English version, the English version shall control.

(g) Recovery of Amounts Paid. Except as otherwise provided by the Administrator, Awards granted under the Plan shall be subject to Price Group’s Policy for Recoupment of Incentive Compensation or any successor thereto (the “Recoupment Policy”) and/or to any provisions set forth in the applicable Award Agreement under which Price Group may recover from current and former Participants any amounts paid or shares of Common Stock issued under an Award and any proceeds therefrom under such circumstances as the Administrator determines appropriate. The Administrator may apply the Recoupment Policy to Awards granted before the policy is adopted to the extent required by applicable law or rule of any securities exchange or market on which shares of Common Stock are listed or admitted for trading, as determined by the Administrator in its sole discretion.

17. Glossary.

Under this Plan, except where the context otherwise indicates, the following definitions apply:
(a)     “Administrator” means the ECC, or such other committee(s) or officer(s) duly appointed by the Board or the ECC to administer the Plan or delegated limited authority to perform administrative actions under the Plan, and having such powers as shall be specified by the Board or the ECC; provided, however, that at any time the Board may serve as the Administrator in lieu of or in addition to the ECC or such other committee(s) or officer(s) to whom administrative authority has been delegated. With respect to any Award to which Section 16 of the Exchange Act applies, the Administrator shall consist of either the Board or the ECC, which committee shall consist of two or more directors, each of whom is intended to be, to the extent required by Rule 16b-3 of the Exchange Act, a “non-employee director” as defined in Rule 16b-3 of the Exchange Act and an “independent director” to the extent required by the rules of the national securities exchange that is the principal trading market for the Common Stock, and with respect to any Award that is intended to be a Qualified Performance-Based Award, the Administrator shall consist of two or more directors, each of whom is intended to be, to the extent required by Section 162(m) of the Code, an “outside director” as defined under Section 162(m) of the Code. Any member of the Administrator who




does not meet the foregoing requirements shall abstain from any decision regarding an Award and shall not be considered a member of the Administrator to the extent required to comply with Rule 16b-3 of the Exchange Act or Section 162(m) of the Code.
(b)    “ Affiliate” means any entity, whether previously, now or hereafter existing, in which Price Group, directly or indirectly, at the relevant time has a proprietary interest by reason of stock ownership or otherwise (including, but not limited to, joint ventures, limited liability companies, and partnerships) or any entity that provides services to Price Group or a subsidiary or affiliated entity of Price Group; provided, however, that solely for purposes of determining whether a Participant has a Termination of Service that is a “separation from service” within the meaning of Section 409A of the Code, an “Affiliate” of a corporation or other entity means all other entities with which such corporation or other entity would be considered a single employer under Sections 414(b) or 414(c) of the Code.
(c)    “ Award ” means any stock option, stock appreciation right, stock award, stock unit, Performance Share, Performance Unit, and/or Other Stock-Based Award, whether granted under this Plan or any Prior Plan.
(d)     “Award Agreement” means the written document(s), including an electronic writing acceptable to the Administrator, and any notice, addendum or supplement thereto, memorializing the terms and conditions of an Award granted pursuant to the Plan and which shall incorporate the terms of the Plan.
(e)    “ Board ” means the Board of Directors of Price Group.
(f)    “ Cause ” means, with respect to a Participant, except as otherwise provided in the relevant Award Agreement (i) the Participant’s plea of guilty or nolo contendere to, or conviction of, (A) a felony (or its equivalent in a non-United States jurisdiction) or (B) other conduct of a criminal nature that has or is likely to have a material adverse effect on the reputation or standing in the community of Price Group, any of its Affiliates or a successor to Price Group or an Affiliate, as determined by the Administrator in its sole discretion, or that legally prohibits the Participant from working for Price Group, any of its Affiliates or a successor to Price Group or an Affiliate; (ii) a breach by the Participant of a regulatory rule that adversely affects the Participant’s ability to perform the Participant’s employment duties to Price Group, any of its Affiliates or a successor to Price Group or an Affiliate, in any material respect; or (iii) the Participant’s failure, in any material respect, to (A) perform the Participant’s employment duties, (B) comply with the applicable policies of Price Group, or of its Affiliates, or a successor to Price Group or an Affiliate, or (C)  comply with covenants contained in any contract or Award Agreement to which the Participant is a party; provided, however, that the Participant shall be provided a written notice describing in reasonable detail the facts which are considered to give rise to a breach described in this clause (iii) and the Participant shall have 30 days following receipt of such written notice (the “ Cure Period ”) during which the Participant may remedy the condition and, if so remedied, no Cause for Termination of Service shall exist.
(g)    “ Change in Control ” means any of the following events:
(i)    the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, other than an employee benefit plan or related trust sponsored or maintained by Price Group or by an entity controlled by Price Group or an underwriter of the Common Stock in a registered public offering) (a “ Person ”), during any 12-month period ending on the date of the most recent acquisition by such Person, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of shares representing thirty percent (30%) or more of the combined voting power (without regard to any limitations contained in the Price Group charter) of the then outstanding voting securities of Price Group entitled to vote generally in the election of directors (the “ Outstanding Price Group Voting Securities ”); provided , however , that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from Price Group; (2) any acquisition by Price Group or a wholly-owned subsidiary of Price Group; or (3) any acquisition pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) below; or
(ii)    individuals who, as of the Effective Date, constitute the Board (the “ Incumbent Board ”) cease for any reason, within any 12-month period, to constitute at least a majority of the Board; provided , however , that any individual becoming a director subsequent to the Effective Date whose appointment or election was endorsed by a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or




removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(iii)    consummation of a reorganization, merger, tender offer, share exchange, consolidation or other business combination, acquisition of Price Group equity securities, or sale or other disposition of all or substantially all of the assets of Price Group or the acquisition of assets of another entity (each, a “ Corporate Transaction ”), in each case, unless, following such Corporate Transaction, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Price Group Shares and Outstanding Price Group Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation or other entity resulting from such Corporate Transaction (including, without limitation, a corporation or other entity which as a result of such transaction owns Price Group or all or substantially all of Price Group’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Price Group Shares and Outstanding Price Group Voting Securities, as the case may be, (B) no Person (excluding such corporation or other entity resulting from such Corporate Transaction) beneficially owns, directly or indirectly, thirty percent (30%) or more of, respectively, the then outstanding shares of the corporation or other entity resulting from such Corporate Transaction or the combined voting power of the then outstanding voting securities of such corporation or other entity and (C) at least a majority of the members of the board of directors of the corporation (or other governing board of a non-corporate entity) resulting from such Corporate Transaction were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Corporate Transaction.
Notwithstanding the foregoing, an event described above shall be a Change in Control with respect to an Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code only if such event is also a change in the ownership or effective control of Price Group or a change in the ownership of a substantial portion of the assets of Price Group within the meaning of Section 409A of the Code to the extent necessary to avoid the imposition of any tax or interest or the inclusion of any amount in income pursuant to Section 409A of the Code.
(h)     “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto, the Treasury Regulations thereunder and other relevant interpretive guidance issued by the Internal Revenue Service or the Treasury Department. Reference to any specific section of the Code shall be deemed to include such regulations and guidance, as well as any successor section, regulations and guidance.
(i)     “Common Stock” means shares of common stock of Price Group, par value twenty cents ($0.20) per share and any capital securities into which they are converted.
(j)    “ Company ” means Price Group and its Affiliates, except where the context otherwise requires. For purposes of determining whether a Change in Control has occurred, Company shall mean only Price Group.
(k)    “ Dividend Equivalent ” means a right, granted to a Participant, to receive cash, Common Stock, stock Units or other property equal in value to dividends paid with respect to a specified number of shares of Common Stock.
(l)     “ECC” means the Executive Compensation Committee of the Board.
(m)    “ Effective Date ” means the date on which adoption of the Plan is approved by the stockholders of Price Group.
(n)    “ Eligible Individuals means officers and employees of, and other individuals, excluding non-employee directors, providing bona fide services to or for, Price Group or any of its Affiliates, and prospective officers, employees and service providers who have accepted offers of employment or other service relationship from Price Group or its Affiliates.
(o)    “ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto. Reference to any specific section of the Exchange Act shall be deemed to include such regulations and guidance issued thereunder, as well as any successor section, regulations and guidance.




(p)     “Fair Market Value ” means, unless otherwise determined by the Administrator, as of any date:
(i)    if the principal market for the Common Stock (as determined by the Administrator if the Common Stock is listed or admitted to trading on more than one exchange or market) is a national securities exchange or an established securities market, the official closing price per share of Common Stock for the regular market session on that date on the principal exchange or market on which the Common Stock is then listed or admitted to trading or, if no sale is reported for that date, on the last preceding day on which a sale was reported, all as reported by such source as the Administrator may select;
(ii)    if the principal market for the Common Stock is not a national securities exchange or an established securities market, the average of the highest bid and lowest asked prices for the Common Stock on that date as reported on a national quotation system or, if no prices are reported for that date, on the last preceding day on which prices were reported, all as reported by such source as the Administrator may select; or
(iii)    if the Common Stock is neither listed or admitted to trading on a national securities exchange or an established securities market, nor quoted by a national quotation system, the value determined by the Administrator in good faith by the reasonable application of a reasonable valuation method.
(q)    “ Full Value Award ” means an Award that results in Price Group transferring the full value of a share of Common Stock under the Award, whether or not an actual share of stock is issued. Full Value Awards shall include, but are not limited to, stock awards, stock units, Performance Shares, Performance Units that are payable in Common Stock, and Other Stock-Based Awards for which Price Group transfers the full value of a share of Common Stock under the Award, but shall not include Dividend Equivalents.
(r)    “ Good Reason ” means, with respect to a Participant, during the 18-month period following a Change in Control, actions taken by Price Group or any of its Affiliates or any successor corporation or other entity in a Corporate Transaction resulting in a material negative change in the employment relationship of the Participant who is an officer or an employee in one or more of the following ways:
(i)    the assignment to the Participant of duties materially inconsistent with the Participant’s position (including offices, titles and reporting requirements), authority, duties or responsibilities, or a material diminution in such position, authority, duties or responsibilities, in each case from those in effect immediately prior to the Change in Control;
(ii)    a material reduction of the Participant’s aggregate annual compensation, including, without limitation, base salary and annual bonus and incentive compensation opportunity, from that in effect immediately prior to the Change in Control; or
(iii)    a change in the Participant’s principal place of employment that increases the Participant’s commute by 75 or more miles as compared to the Participant’s commute immediately prior to the Change in Control.
In order to invoke a Termination of Service for Good Reason, a Participant must provide written notice to Price Group, its Affiliate or any successor corporation or other entity in a Corporate Transaction with respect to which the Participant is employed or providing services (as applicable, the “ Service Recipient ”) of the existence of one or more of the conditions constituting Good Reason within 90 days following the Participant’s knowledge of the initial existence of such condition or conditions, specifying in reasonable detail the conditions constituting Good Reason, and the Service Recipient shall have 30 days following receipt of such written notice (the “ Cure Period ”) during which it may remedy the condition. In the event that the Service Recipient fails to remedy the condition constituting Good Reason during the applicable Cure Period, the Participant’s Termination of Service must occur, if at all, within 90 days following the expiration of such Cure Period in order for such termination as a result of such condition to constitute a Termination of Service for Good Reason.
(s)    “ Incentive Stock Option ” means any stock option that is designated, in the applicable Award Agreement or the resolutions of the Administrator under which the stock option is granted, as an “incentive stock option” within the meaning of Section 422 of the Code and otherwise meets the requirements to be an “incentive stock option” set forth in Section 422 of the Code.
(t)    “ Nonqualified Option ” means any stock option that is not an Incentive Stock Option.




(u)    “ Other Stock-Based Award ” means an Award of Common Stock or any other Award that is valued in whole or in part by reference to, or is otherwise based upon, shares of Common Stock, including without limitation Dividend Equivalents and convertible debentures.
(v)    “ Participant ” means an Eligible Individual to whom an Award is or has been granted.
(w)    “ Performance Award ” means a Full Value Award, the grant, vesting, lapse of restrictions or settlement of which is conditioned upon the achievement of performance objectives over a specified Performance Period and includes, without limitation, Performance Shares and Performance Units.
(x)    “ Performance Goals ” means the performance goals established by the Administrator in connection with the grant of Awards based on Performance Metrics or other performance criteria selected by the Administrator; provided , however , that in the case of Qualified Performance-Based Awards, such performance goals shall be based on the attainment of specified levels of one or more Performance Metrics.
(y)    “ Performance Period ” means that period established by the Administrator during which any Performance Goals specified by the Administrator with respect to such Award are to be measured.
(z)    “ Performance Metrics ” means criteria established by the Administrator relating to any of the following, as it may apply to an individual, one or more business units, divisions, or Affiliates, one or more mutual funds or investment portfolios, or on a company-wide basis, and in absolute terms, relative to a base period, or relative to the performance of one or more comparable companies, peer groups, mutual funds or investment portfolios, or an index covering multiple companies, mutual funds or investment portfolios:
(i)     Earnings or Profitability Metrics : any derivative of investment advisory revenue; mutual fund servicing revenue; earnings/loss (gross, operating, net, or adjusted); earnings/loss before interest and taxes (“EBIT”); earnings/loss before interest, taxes, depreciation and amortization (“EBITDA”); profit margins; operating margins; expense levels or ratios; provided that any of the foregoing metrics may be adjusted to eliminate the effect of any one or more of the following: interest expense, asset impairments or investment losses, early extinguishment of debt or stock-based compensation expense;
(ii)     Return Metrics : any derivative of return on investment, assets, equity or capital (total or invested);
(iii)     Investment Metrics: relative risk-adjusted investment performance; investment performance of assets under management;
(iv)     Cash Flow Metrics : any derivative of operating cash flow; cash flow sufficient to achieve financial ratios or a specified cash balance; free cash flow; cash flow return on capital; net cash provided by operating activities; cash flow per share; working capital;
(v)     Liquidity Metrics : any derivative of debt leverage (including debt to capital, net debt-to-capital, debt-to-EBITDA or other liquidity ratios); and/or
(vi)     Stock Price and Equity Metrics : any derivative of return on stockholders’ equity; total stockholder return; stock price; stock price appreciation; market capitalization; earnings/loss per share (basic or diluted) (before or after taxes).
(aa)    “ Performance Shares ” means a grant of stock or stock Units the issuance, vesting or payment of which is contingent on performance as measured against predetermined objectives over a specified Performance Period.
(bb)    “ Performance Units ” means a grant of dollar-denominated Units the value, vesting or payment of which is contingent on performance against predetermined objectives over a specified Performance Period.
(cc)    “ Plan ” means this T. Rowe Price Group, Inc. 2012 Long-Term Incentive Plan, as set forth herein and as hereafter amended from time to time.
(dd)    “ Price Group ” means T. Rowe Price Group, Inc., a Maryland corporation.




(ee)     “Prior Plan” means Price Group’s 2001 Stock Incentive Plan and/or 2004 Stock Incentive Plan.
(ff)    “ Qualified Performance-Based Award ” means an Award intended to qualify for the Section 162(m) Exemption, as provided in Section 7(k).
(gg)    “ Restricted Stock ” means an Award of shares of Common Stock to a Participant that may be subject to certain transferability and other restrictions and to a risk of forfeiture (including by reason of not satisfying certain Performance Goals).
(hh)    “ Restricted Stock Unit ” means a right granted to a Participant to receive shares of Common Stock or cash at the end of a specified deferral period, which right may be conditioned on the satisfaction of certain requirements (including the satisfaction of certain Performance Goals).
(ii)    “ Restriction Period ” means, with respect to Full Value Awards, the period commencing on the date of grant of such Award to which vesting or transferability and other restrictions and a risk of forfeiture apply and ending upon the expiration of the applicable vesting conditions, transferability and other restrictions and lapse of risk of forfeiture and/or the achievement of the applicable Performance Goals (it being understood that the Administrator may provide that vesting shall occur and/or restrictions shall lapse with respect to portions of the applicable Award during the Restriction Period in accordance with Section 7(b)).
(jj)    “ Section 162(m) Exemption ” means the exemption from the limitation on deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code.
(kk)    “ Tax Withholding Obligation ” means any federal, state, local or foreign (non-United States) income, employment or other tax or social insurance contribution required by applicable law to be withheld in respect of Awards.
(ll)    “ Termination of Service ” means the termination of the Participant’s employment or consultancy with, or performance of services for, Price Group and its Affiliates. Temporary absences from employment because of illness, vacation or leave of absence and transfers among Price Group and its Affiliates shall not be considered Terminations of Service. With respect to any Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, “Termination of Service” shall mean a “separation from service” as defined under Section 409A of the Code to the extent required by Section 409A of the Code to avoid the imposition of any tax or interest or the inclusion of any amount in income pursuant to Section 409A of the Code. A Participant has a separation from service within the meaning of Section 409A of the Code if the Participant terminates employment with Price Group and all Affiliates for any reason. A Participant will generally be treated as having terminated employment with Price Group and all Affiliates as of a certain date if the Participant and the entity that employs the Participant reasonably anticipate that the Participant will perform no further services for Price Group or any Affiliate after such date or that the level of bona fide services that the Participant will perform after such date (whether as an employee or an independent contractor) will permanently decrease to no more than 20 percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services if the Participant has been providing services for fewer than 36 months); provided, however, that the employment relationship is treated as continuing while the Participant is on military leave, sick leave or other bona fide leave of absence if the period of leave does not exceed six months or, if longer, so long as the Participant retains the right to reemployment with Price Group or any Affiliate.
(mm)    “ Total and Permanent Disability ” means, with respect to a Participant, except as otherwise provided in the relevant Award Agreement, that a Participant is (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to last until the Participant’s death or result in death, or (ii) determined to be totally disabled by the Social Security Administration or other governmental or quasi-governmental body that administers a comparable social insurance program outside of the United States in which the Participant participates and which conditions the right to receive benefits under such program on the Participant being unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to last until the Participant’s death or result in death. The Administrator shall have sole authority to determine whether a Participant has suffered a Total and Permanent Disability and may require such medical or other evidence as it deems necessary to judge the nature and permanency of the Participant’s condition.




(nn)    “ Unit ” means a bookkeeping entry used by Price Group to record and account for the grant of the following Awards until such time as the Award is paid, cancelled, forfeited or terminated, as the case may be: stock units, Restricted Stock Units, Performance Units, and Performance Shares that are expressed in terms of units of Common Stock.





EXHIBIT 15                     Letter from KPMG LLP, independent registered public accounting firm,
                          re unaudited interim financial information


T. Rowe Price Group, Inc.
100 East Pratt Street
Baltimore, Maryland 21202


Re: Registration Statements on Form S-8: No. 33-7012 , No. 333-90967 , No. 333-59714 , No. 333-120882 , No. 333-120883 , No. 333-142092 , No. 333-167317 , No. 333-180904 , and No. 333-199560 .


With respect to the subject registration statements, we acknowledge our awareness of the use therein of our report dated April 22, 2015 related to our review of interim financial information.

Pursuant to Rule 436 under the Securities Act of 1933 (the Act), such report is not considered part of a registration statement prepared or certified by an independent registered public accounting firm, or a report prepared or certified by an independent registered public accounting firm within the meaning of Sections 7 and 11 of the Act.


/ s / KPMG LLP

Baltimore, Maryland
April 22, 2015





EXHIBIT 31(i).1                     Rule 13a-14(a) Certification of Principal Executive Officer

I, James A. C. Kennedy, certify that:
1.
I have reviewed this Form 10-Q Quarterly Report for the quarterly period ended March 31, 2015 of T. Rowe Price Group, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


April 22, 2015
/ s / James A.C. Kennedy
Chief Executive Officer and President




EXHIBIT 31(i).2                     Rule 13a-14(a) Certification of Principal Financial Officer

I, Kenneth V. Moreland, certify that:
1.
I have reviewed this Form 10-Q Quarterly Report for the quarterly period ended March 31, 2015 of T. Rowe Price Group, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


April 22, 2015
/ s / Kenneth V. Moreland
Vice President, Chief Financial Officer and Treasurer





EXHIBIT 32                                        Section 1350 Certifications    

We certify, to the best of our knowledge, based upon a review of the Form 10-Q Quarterly Report for the quarterly period ended March 31, 2015 of T. Rowe Price Group, Inc., that:
(1) The Form 10-Q Quarterly Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Form 10-Q Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of T. Rowe Price Group, Inc.

April 22, 2015

/ s / James A.C. Kennedy
Chief Executive Officer and President

/ s / Kenneth V. Moreland
Vice President, Chief Financial Officer and Treasurer


A signed original of this written statement has been provided to T. Rowe Price Group, Inc. and will be retained by T. Rowe Price Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.



1 NEWS RELEASE T. ROWE PRICE GROUP REPORTS FIRST QUARTER 2015 RESULTS Assets Under Management Increase to $772.7 Billion BALTIMORE (April 22, 2015) – T. Rowe Price Group, Inc. (NASDAQ-GS: TROW) today reported its first quarter of 2015 results, including net revenues of $1.0 billion, net income of $309.5 million, and diluted earnings per common share of $1.13. On a comparable basis, net revenues were $954.6 million, net income was $304.3 million, and diluted earnings per common share was $1.12 in the first quarter of 2014. Financial Highlights Quarter ended Percentage Change (in millions, exception per-share data) 3/31/2014 3/31/2015 Investment advisory fees $ 826.4 $ 896.5 8 % Net revenues $ 954.6 $ 1,027.0 8 % Operating expenses $ 505.5 $ 549.2 9 % Net operating income $ 449.1 $ 477.8 6 % Net non-operating investment income $ 42.1 $ 26.8 (36)% Net income $ 304.3 $ 309.5 2 % Diluted earnings per share $ 1.12 $ 1.13 1 % Average assets under management (in billions) $ 701.2 $ 759.0 8 % Assets under management at March 31, 2015 were $772.7 billion, an increase of $25.9 billion from the end of 2014, including market appreciation and income of $24.0 billion and net cash inflows of $1.9 billion, as detailed below. (in billions) Sponsored U.S. Mutual Funds Other Investment Portfolios Total Assets under management at December 31, 2014 $ 477.6 $ 269.2 $ 746.8 Net cash flows before client transfers 6.2 (4.3) 1.9 Client transfers from mutual funds to other portfolios (2.8) 2.8 — Net cash flows after client transfers 3.4 (1.5) 1.9 Net market appreciation and income 16.2 7.8 24.0 Change during the period 19.6 6.3 25.9 Assets under management at March 31, 2015 $ 497.2 $ 275.5 $ 772.7


 
2 The net cash inflows, after client transfers, into the mutual funds of $3.4 billion, include net inflows of $2.1 billion into the stock and blended asset funds and $1.6 billion into the fixed income funds. The money market funds had net outflows of $.3 billion. The net cash outflows from the other investment portfolios were largely concentrated among a small number of clients who redeemed from large-cap U.S. equity strategies. The firm's overall net cash flows include $7.5 billion that originated in the firm's target-date retirement strategies, which totaled $160.9 billion in assets under management at March 31, 2015. These target-date assets contribute to the $207 billion of assets under management in our asset allocation portfolios. T. Rowe Price remains debt-free with ample liquidity, including cash and sponsored portfolio investment holdings of nearly $3.7 billion at March 31, 2015. On February 19, 2015, the Board of Directors declared a regular quarterly cash dividend of $.52 per share, which represents an 18% increase over the quarterly dividend rate in 2014. In addition, the Board declared a special cash dividend of $2.00 per share, aggregating $524 million. The firm also expended $113.6 million to repurchase 1.4 million shares of its common stock, and invested $41 million during the first quarter of 2015 in capitalized technology and facilities. Capital expenditures for the full year 2015 could be up to $175 million. Investment Performance For the three-year period ended March 31, 2015, 75% of the T. Rowe Price mutual funds across their share classes outperformed their comparable Lipper averages on a total return basis, 79% outperformed for the five-year period, 88% outperformed for the 10-year period, and 78% outperformed for the one-year period. In addition, T. Rowe Price stock, bond, and blended asset funds that ended the quarter with an overall rating of four or five stars from Morningstar account for 83% of the assets under management in the firm's rated funds. The performance of the firm's institutional strategies against their benchmarks was substantially similar. The firm's target-date retirement funds continue to deliver very attractive long-term performance, with 100% of these funds outperforming their comparable Lipper averages on a total return basis for the three- and five-year periods ended March 31, 2015. Financial Results Investment advisory revenues earned in the first quarter of 2015 from the mutual funds were $645.9 million, an increase of $55.1 million, or 9%, from the comparable 2014 quarter. Average mutual fund assets under management in the first quarter of 2015 were $487.1 billion, an increase of 10% from the average in the first quarter of 2014.


 
3 Investment advisory revenues earned in the first quarter of 2015 from the other investment portfolios were $250.6 million, an increase of $15.0 million, or 6%, from the comparable 2014 quarter. Average assets under management in the first quarter of 2015 were $271.9 billion, an increase of 5%, from the average in the first quarter of 2014. Investors domiciled outside the United States accounted for about 5% of the firm's assets under management at March 31, 2015. Money market advisory fees and other fund expenses voluntarily waived by the firm to maintain positive yields for investors in the first quarter of 2015 were $13.7 million, compared with $14.3 million in the 2014 quarter. The firm expects that these fee waivers will continue for the remainder of the year. Operating expenses were $549.2 million in the first quarter of 2015, up $43.7 million from the comparable 2014 quarter. Compensation and related costs have increased $27.6 million from the first quarter of 2014, due primarily to higher salaries, benefits, and related employee costs from modest base salary increases at the beginning of the year and added headcount, and increases in the interim accrual for the year-end bonus compensation. The firm has increased its average staff size by 3.7% from the first quarter of 2014. At March 31, 2015, the firm employed 5,905 associates. Advertising and promotion costs were $25.3 million in the first quarter of 2015, an increase of $2.7 million from the comparable 2014 period. The increase in cost is primarily attributable to the creation and launch of a new advertising campaign. The firm currently expects advertising and promotion costs for the full- year 2015 could increase about 5% from 2014 levels. Occupancy and facility costs, together with depreciation and amortization expense, were $67.4 million in the first quarter of 2015, up $4.9 million compared to the first quarter of 2014. The increase is primarily attributable to the added costs to update and enhance technology capabilities, including related maintenance programs. Other operating expenses in the first quarter of 2015 were up $4.7 million from the comparable 2014 quarter, as increased business demands and the firm's continued investment in its operating capabilities have increased costs. These higher costs in the first quarter of 2015 include those related to the firm's defined contribution recordkeeping business, information and other third-party service costs, travel costs, and other general and administrative costs.


 
4 Net non-operating investment income in the first quarter of 2015 decreased $15.3 million from the 2014 quarter. The firm realized gains of $16.6 million from the sale of certain of our sponsored fund investments in the first quarter of 2015 compared with $32.0 million in the 2014 quarter. The firm's effective tax rate for the first quarter of 2015 is 38.7%. The firm currently estimates that its effective rate for the full-year 2015 will be about 38.8%. Management Commentary James A. C. Kennedy, the company’s chief executive officer and president, commented: “Growth in the U.S. economy slowed in the first quarter, impacted by such factors as the harsh winter weather, the strength of the U.S. dollar, and softening of spending in the energy industry. The corporate sector remains strong in terms of balance sheets and overall profitability, consumer confidence is reasonably constructive, and interest rates and inflationary pressure remain low. It is therefore reasonable to expect that the U.S. economy will continue to grow, albeit at a modest pace. Meanwhile, the global landscape remains uneven. The rising dollar, falling oil prices, and central bank actions to stimulate economic growth pose opportunities as well as challenges, as do the varying reform efforts around the globe. Japan has emerged from a brief recession and the climate in the Eurozone is improving. Growth in the emerging markets generally continues to decelerate and the variability in outlook by country remains high. “Against this backdrop, U.S. stocks posted modest gains for the quarter. Some indices reached all-time highs before retreating a bit by quarter end. U.S. bonds produced positive returns, led by high yield. In both local currency and dollar terms, equity markets in developed non-U.S. countries as well as many emerging market countries generally outperformed U.S. shares. The MSCI Japan Index was up 10%, the European Index was up 4%, and the Emerging Markets Index rose 2% in the first quarter. Returns of non-dollar denominated debt were hurt by the strong dollar. “Given that the U.S. has now entered its seventh year of an equity bull market, and given that valuations seem rather full, we continue to believe that investors should have modest performance expectations for U.S. equities. Performance in the fixed income markets will continue to be subject to the timing and extent of higher interest rates. “T. Rowe Price remains in a favorable long-term position. Our investment performance generally remains very strong, as does our client service. Over the last number of years we have been expanding our investment capabilities and number of portfolios available for clients. More recently we have also been


 
5 broadening our distribution reach. Our balance sheet and cash flow from operations remain very strong. In fact, as previously disclosed, we raised our annual dividend for the 29th straight year - this year by 18%. And we declared a $2.00 per share special dividend, payable tomorrow for stockholders of record on April 9, 2015. “We remain confident in our ability to perform for our clients, and add significant value for our shareholders over time.” Other Matters The financial results presented in this release are unaudited. The firm expects that it will file its Form 10-Q Quarterly Report for the first quarter of 2015 with the U.S. Securities and Exchange Commission later today. The Form 10-Q will include additional information on the firm's unaudited financial results at March 31, 2015. Certain statements in this earnings release may represent “forward-looking information,” including information relating to anticipated changes in revenues, net income and earnings per common share, anticipated changes in the amount and composition of assets under management, anticipated expense levels, estimated tax rates, and expectations regarding financial results, future transactions, investments, capital expenditures, dividends, and other market conditions. For a discussion concerning risks and other factors that could affect future results, see the firm's 2014 Form 10-K. Founded in 1937, Baltimore-based T. Rowe Price (troweprice.com) is a global investment management organization that provides a broad array of mutual funds, subadvisory services, and separate account management for individual and institutional investors, retirement plans, and financial intermediaries. The organization also offers a variety of sophisticated investment planning and guidance tools. T. Rowe Price's disciplined, risk-aware investment approach focuses on diversification, style consistency, and fundamental research. CONTACT T. ROWE PRICE, PUBLIC RELATIONS Brian Lewbart 410-345-2242 brian_lewbart@troweprice.com Bill Benintende 410-345-3482 bill_benintende@troweprice.com Kylie Muratore 410-345-2533 kylie_muratore@troweprice.com


 
6 Unaudited Condensed Consolidated Statements of Income (in millions, except per share amounts) Quarter ended Revenues 3/31/2014 3/31/2015 Investment advisory fees $ 826.4 $ 896.5 Administrative fees 94.5 93.0 Distribution and servicing fees 33.7 37.5 Net revenues 954.6 1,027.0 Operating expenses Compensation and related costs 318.9 346.5 Advertising and promotion 22.6 25.3 Distribution and servicing costs 33.7 37.5 Depreciation and amortization of property and equipment 27.1 29.1 Occupancy and facility costs 35.4 38.3 Other operating expenses 67.8 72.5 Total operating expenses 505.5 549.2 Net operating income 449.1 477.8 Non-operating investment income 42.1 26.8 Income before income taxes 491.2 504.6 Provision for income taxes 186.9 195.1 Net income $ 304.3 $ 309.5 Net income allocated to common stockholders Quarter ended 3/31/2014 3/31/2015 Net income $ 304.3 $ 309.5 Less: net income allocated to outstanding restricted stock and stock unit holders (3.2) (8.4) Net income allocated to common stockholders $ 301.1 $ 301.1 Earnings per share on common stock Basic $ 1.16 $ 1.16 Diluted $ 1.12 $ 1.13 Weighted-average common shares Outstanding 260.4 258.7 Outstanding assuming dilution 268.6 265.7 Dividends declared per share, including a $2.00 per share special cash dividend declared to be paid on April 23, 2015 $ .44 $ 2.52


 
7 Investment Advisory Revenues (in millions) Quarter ended 3/31/2014 3/31/2015 Sponsored U.S. mutual funds Stock and blended asset $ 497.3 $ 543.2 Bond and money market 93.5 102.7 590.8 645.9 Other investment portfolios Stock and blended asset 196.9 213.0 Bond, money market, and stable value 38.7 37.6 235.6 250.6 Total $ 826.4 $ 896.5 Assets Under Management (in billions) Average during the quarter ended As of 3/31/2014 3/31/2015 12/31/2014 3/31/2015 Sponsored U.S. mutual funds Stock and blended asset $ 346.1 $ 381.5 $ 373.0 $ 390.3 Bond and money market 96.6 105.6 104.6 106.9 442.7 487.1 477.6 497.2 Other investment portfolios Stock and blended asset 196.4 209.5 206.9 212.6 Bond, money market, and stable value 62.1 62.4 62.3 62.9 258.5 271.9 269.2 275.5 Total $ 701.2 $ 759.0 $ 746.8 $ 772.7 As of 12/31/2014 3/31/2015 Stock and blended asset portfolios $ 579.9 $ 602.9 Fixed income portfolios 166.9 169.8 Total $ 746.8 $ 772.7 Condensed Consolidated Cash Flows Information (in millions) Quarter ended 3/31/2014 3/31/2015 Cash provided by operating activities, including $31.0 of stock-based compensation expense in 2015 $ 487.1 $ 543.8 Cash used in investing activities, including ($41.3) for additions to property and equipment in 2015 (29.8) (34.1) Cash used in financing activities, including common stock repurchases of ($113.6) and dividends paid of ($135.4) in 2015 (116.0) (205.4) Net change in cash during the period $ 341.3 $ 304.3 Condensed Consolidated Balance Sheet Information (in millions) As of 12/31/2014 3/31/2015 Cash and cash equivalents $ 1,506.1 $ 1,810.4 Accounts receivable and accrued revenue 442.8 447.3 Investments in sponsored funds 1,884.0 1,889.4 Other investments 408.3 419.5 Property and equipment, net 586.4 599.0 Goodwill 665.7 665.7 Other assets 151.1 130.7 Total assets 5,644.4 5,962.0 Total liabilities, including $524 million related to the special cash dividend in 2015 249.2 960.0 Stockholders' equity, 260.6 common shares outstanding in 2015, includes net unrealized holding gains of $168.7 in 2015 $ 5,395.2 $ 5,002.0