t. rowe price institutional u.s. structured research fund - … · the views and opinions in this...

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0001012968-08-000010.txt : 200802260001012968-08-000010.hdr.sgml : 2008022620080226142302ACCESSION NUMBER:0001012968-08-000010CONFORMED SUBMISSION TYPE:N-CSRPUBLIC DOCUMENT COUNT:33CONFORMED PERIOD OF REPORT:20071231FILED AS OF DATE:20080226DATE AS OF CHANGE:20080226EFFECTIVENESS DATE:20080226

FILER:

COMPANY DATA:COMPANY CONFORMED NAME:T. Rowe Price Institutional Equity Funds, Inc.CENTRAL INDEX KEY:0001012968IRS NUMBER:000000000STATE OF INCORPORATION:MDFISCAL YEAR END:1231

FILING VALUES:FORM TYPE:N-CSRSEC ACT:1940 ActSEC FILE NUMBER:811-07639FILM NUMBER:08642441

BUSINESS ADDRESS:STREET 1:100 EAST PRATT STREETCITY:BALTIMORESTATE:MDZIP:21202BUSINESS PHONE:410-345-2000

MAIL ADDRESS:STREET 1:100 EAST PRATT STREETCITY:BALTIMORESTATE:MDZIP:21202

FORMER COMPANY:FORMER CONFORMED NAME:T ROWE PRICE INSTITUTIONAL EQUITY FUNDS INCDATE OF NAME CHANGE:20011105

FORMER COMPANY:FORMER CONFORMED NAME:INSTITUTIONAL DOMESTIC EQUITY FUNDS INCDATE OF NAME CHANGE:19960428

0001012968S000019417T. Rowe Price Institutional U.S. Structured Research Fund

C000053975T. Rowe Price Institutional U.S. Structured Research FundTRISX

N-CSR1arirf.htmT. ROWE PRICE INSTITUTIONAL U.S. STRUCTURED RESEARCH FUND

T. Rowe Price Institutional U.S. Structured Research Fund - December 31, 2007

Item 1: Report to Shareholders

Institutional U.S. Structured Research Fund

December 31, 2007

The views and opinions in this report were current as of December 31, 2007. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors,and the managers reserve the right to change their views about individual stocks, sectors, and the markets at any time. As a result, the views expressed should not be relied upon as a forecast of the funds future investment intent. The reportis certified under the Sarbanes-Oxley Act, which requires mutual funds and other public companies to affirm that, to the best of their knowledge, the information in their financial reports is fairly and accurately stated in all material respects.

Managers Letter
T. Rowe Price Institutional U.S. Structured Research Fund

Dear Investor

Welcome to the first annual report of the Institutional U.S. Structured Research Fund, which began operations on October 31, 2007. We introduced this portfolio in response to growing demand for an institutional vehicle utilizing ourflexible, analyst-focused investment approach. We thank you for your interest in the portfolio and entrusting your investment to us.

The funds inception occurred during a challenging period for the U.S. stock market. Continuing fallout from the subprime mortgage meltdown, weakness in corporate earnings growth, and a notable slowdown in U.S. economic activitycombined to push stocks lower over the last two months of 2007. Although the Federal Reserve lowered interest rates in Decemberthe Feds third rate cut in four monthsmany market participants felt that the Fed was behind the curve inits efforts to stave off a recession.

Highlights

The Institutional U.S. Structured Research Fund began operations on October 31, 2007.

Stocks declined during the final two months of 2007 due to continuing fallout from the subprime mortgage meltdown, weakness in corporate earnings growth, and a notable slowdown in the economy.

The fund is designed to leverage the expertise of T. Rowe Prices equity analysts in their respective industries.

In the challenging environment ahead, careful security selection is likely to play a key role. We will continue to emphasize rigorous research to uncover companies that we believe have the greatest potential for capitalappreciation, while maintaining sector weightings in line with those of the S&P 500.

The expense ratio shown is estimated as of the funds inception date of 10/31/07. This number may vary from the expense ratio shown elsewhere in this report because it is based on a different time period and, if applicable, doesnot include fee or expense waivers.

In this environment, your fund performed in line with the broader market and its peer group. As the accompanying table shows, the Institutional U.S. Structured Research Fund returned -5.10% from October 31, 2007, through December 31,2007, just behind the S&P 500 Index and the Lipper Large-Cap Core Funds Index.

Investment Approach and Strategy

This fund is designed to take advantage of the expertise of T. Rowe Prices equity analysts in their respective industries. The analysts select stocks from the industries they cover based on rigorous fundamental analysis thatassesses the quality of the business franchise, the earnings growth potential for the company, and the value of the stock. Although most of the stocks in which the fund invests are large U.S. companies, we have the flexibility to invest a portion ofthe portfolio in smaller companies and foreign equities.

In terms of the overall construction of the portfolio, we keep the funds sector weightings roughly equal to those of the S&P 500. This sector-neutral approach maximizes the benefits of our analyst-focused investmentstrategy, allowing the analysts stock selection to have the most substantial impact on performance relative to the index. We also have the latitude to emphasize value or growth stocks within the portfolio, and we may overweight or underweightcertain industries based on our assessment of the economic and investment landscape.

Portfolio Overview

To illustrate our emphasis on meticulous company-by-company analysis, we would like to discuss a number of the portfolios current investments and our thesis for investing in each of the companies.

One of the largest overweight positions in the portfolio is global oilfield services company Schlumberger. The company has delivered strong earnings thanks to broad-basedstrength in its international operations, particularly in the Middle East and Asia. We believe the company remains well positioned to benefit from robust global demand for oil. Elsewhere in the energy sector, we also favor industry leader ExxonMobil, which uses its superior financial and operational position to generate consistent earnings and return on capital, and Total, a French company that has one of the best project portfolios for a major oil company, providing a potential engine for future growth.

We own noteworthy positions in semiconductor manufacturers Marvell Technology and Advanced Micro Devices, bothof which had problems in 2007. Marvell is focused primarily on the storage market, which we believe is poised for a recovery. In addition, cost-management improvements and new products, such as embedded Wi-Fi, should provide potential upside forMarvell. AMD struggled with product delays and a difficult acquisition, but we think that the company has moved past these issues and is well positioned to improve profitability amid better pricing conditions in its core PC market. Based on current valuations in the semiconductor industry, we favor AMD and Marvell over Intel, where we have reduced our exposure.

In the consumer sector, we have a significant position in discount apparel retailer Kohls, which was hampered in 2007 by a deteriorating retail environment andslowing consumer demand. But we believe Kohls will outperform going forward as it continues to take market share in the department store space. Another notable overweight in the consumer sector is Amazon.com, the dominant Internet retailer that is growing significantly faster than its peers. After investing in infrastructure over the past several years, the company is now reaping the benefits of strongoperating leverage, which should boost profit growth substantially.

Finally, in the telecommunication services sector, we have been avoiding companies such as diversified telecom provider Verizon Communications and emphasizing companies like Crown CastleInternational, which owns and operates wireless towers. Verizon continues to face pricing pressures, both in its core wireline business and in its wireless services segment, that are adversely affecting profitability.In contrast, Crown Castle is benefiting from healthy demand and strong free cash flow growth in an industry that is relatively insulated from the ups and downs of the economic cycle. New customers and technology migration toward wireless should befavorable drivers of growth for the company going forward.

Outlook

The stock market faces some hurdles as we move into 2008. The corrosion in the housing and mortgage sectors has increased the potential for a recession in the coming year. The Fed is likely to continue cutting short-term interestrates in an effort to prevent an economic downturn, though the central bank must walk a fine line to keep inflation from rising beyond already-elevated levels. In addition, the latest quarterly profit reports are expected to show the first overalldecline in more than five years. Nevertheless, the markets fourth-quarter decline, which has continued into the new year, may have created some opportunities and reduced the downside risk, especially among financials and consumer discretionarystocks.

In this challenging environment, careful security selection will play a more significant role. We will continue to emphasize rigorous research and comprehensive analysis as we seek out companies that we believe have the greatestpotential for capital appreciation, while maintaining sector weightings in line with those of the S&P 500. We believe this approach will serve investors well over the long term.

Respectfully submitted,

Anna M. Dopkin
President of the fund and chairman of its Investment Advisory Committee

January 25, 2008

The committee chairman has day-to-day responsibility for managing the portfolio and works with committee members in developing and executing the funds investment program.

Risks of Investing

As with all stock mutual funds, the funds share price can fall because of weakness in the stock market, a particular industry, or specific holdings. Stock markets can decline for many reasons, including adverse political oreconomic developments, changes in investor psychology, or heavy institutional selling. The prospects for an industry or company may deteriorate because of a variety of factors, including disappointing earnings or changes in the competitiveenvironment.

Glossary

Lipper indexes: Consist of a small number (10 to 30) of the largest mutual funds in a particular category as tracked by Lipper Inc.

S&P 500 Stock Index: Tracks the stocks of 500 mostly large U.S. companies.

Portfolio Highlights

Fund Expense Example

As a mutual fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees or sales loads, and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other fundexpenses. The following example is intended to help you understand your ongoing costs (in dollars) of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investmentof $1,000 invested at the beginning of the most recent six-month period and held for the entire period.

Actual Expenses
The first line of the following table (Actual) provides information about actual account values and actual expenses. You may use the information in this line, together with your account balance, to estimate the expensesthat you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading Expenses PaidDuring Period to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes
The information on the second line of the table (Hypothetical) is based on hypothetical account values and expenses derived from the funds actual expense ratio and an assumed 5% per year rate of return beforeexpenses (not the funds actual return). You may compare the ongoing costs of investing in the fund with other funds by contrasting this 5% hypothetical example and the 5% hypothetical examples that appear in the shareholder reports of theother funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs, such as redemption fees or sales loads. Therefore, the second line of the table is useful incomparing ongoing costs only and will not help you determine the relative total costs of owning different funds. To the extent a fund charges transaction costs, however, the total cost of owning that fund is higher.

Financial Highlights

The accompanying notes are an integral part of these financial statements.

Portfolio of Investments
December 31, 2007


Statement of Assets and Liabilities
December 31, 2007
($000s, except shares and per share amounts)


Statement of Operations
($000s)


Statement of Changes in Net Assets
($000s)


Notes to Financial Statements
December 31, 2007

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

T. Rowe Price Institutional Equity Funds, Inc. (the corporation), is registered under the Investment Company Act of 1940 (the 1940 Act). The Institutional U.S. Structured Research Fund (the fund), a diversified, open-end managementinvestment company, is one portfolio established by the corporation. The fund commenced operations on October 31, 2007. The fund seeks to provide long-term capital growth by investing primarily in U.S. common stocks.

The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates made by fund management. Fund management believesthat estimates and security valuations are appropriate; however, actual results may differ from those estimates, and the security valuations reflected in the financial statements may differ from the value the fund ultimately realizes upon sale ofthe securities.

Valuation The fund values its investments and computes its net asset value per share at the close of the New York Stock Exchange (NYSE), normally 4 p.m. ET, each day that the NYSE is open forbusiness. Equity securities listed or regularly traded on a securities exchange or in the over-the-counter (OTC) market are valued at the last quoted sale price or, for certain markets, the official closing price at the time the valuations are made,except for OTC Bulletin Board securities, which are valued at the mean of the latest bid and asked prices. A security that is listed or traded on more than one exchange is valued at the quotation on the exchange determined to be the primary marketfor such security. Listed securities not traded on a particular day are valued at the mean of the latest bid and asked prices for domestic securities and the last quoted sale price for international securities. Debt securities with originalmaturities of less than one year are valued at amortized cost in local currency, which approximates fair value when combined with accrued interest.

Investments in mutual funds are valued at the mutual funds closing net asset value per share on the day of valuation. Financial futures contracts are valued at closing settlement prices.

Other investments, including restricted securities, and those for which the above valuation procedures are inappropriate or are deemed not to reflect fair value are stated at fair value as determined in good faith by the T. RowePrice Valuation Committee, established by the funds Board of Directors.

Investment Transactions, Investment Income, and Distributions Income and expenses are recorded on the accrual basis. Premiums and discounts on debt securities are amortized for financial reportingpurposes. Dividends received from mutual fund investments are reflected as dividend income; capital gain distributions are reflected as realized gain/loss. Dividend income and capital gain distributions are recorded on the ex-dividend date. Incometax-related interest and penalties, if incurred, would be recorded as income tax expense. Investment transactions are accounted for on the trade date. Realized gains and losses are reported on the identified cost basis. Payments (variationmargin) made or received to settle the daily fluctuations in the value of futures contracts are recorded as unrealized gains or losses until the contracts are closed. Unsettled variation margin on futures contracts is reflected as other assetsor liabilities, and unrealized gains and losses on futures contracts are reflected as the change in net unrealized gain or loss in the accompanying financial statements. Distributions to shareholders are recorded on the ex-dividend date. Incomedistributions are declared and paid on an annual basis. Capital gain distributions, if any, are declared and paid by the fund, typically on an annual basis.

New Accounting Pronouncements Effective June 29, 2007, the fund adopted Financial Accounting Standards Board (FASB) Interpretation No. 48 (FIN 48), Accounting forUncertainty in Income Taxes, a clarification of FASB Statement No. 109, Accounting for Income Taxes. FIN 48 establishes financial accounting and disclosure requirementsfor recognition and measurement of tax positions taken or expected to be taken on an income tax return. The adoption of FIN 48 had no impact on the funds net assets or results of operations.

In September 2006, the FASB released the Statement of Financial Accounting Standard No. 157 (FAS 157), Fair Value Measurements. FAS 157 clarifies the definition of fair value andestablishes the framework for measuring fair value, as well as proper disclosure of this methodology in the financial statements. It will be effective for the funds fiscal year beginning January 1, 2008. Management is evaluating the effects ofFAS 157; however, it is not expected to have a material impact on the funds net assets or results of operations.

NOTE 2 - INVESTMENT TRANSACTIONS

Consistent with its investment objective, the fund engages in the following practices to manage exposure to certain risks or to enhance performance. The investment objective, policies, program, and risk factors of the fund aredescribed more fully in the funds prospectus and Statement of Additional Information.

Futures Contracts During the period ended December 31, 2007, the fund was a party to futures contracts, which provide for the future sale by one party and purchase by another of a specified amount ofa specific financial instrument at an agreed upon price, date, time, and place. Risks arise from possible illiquidity of the futures market and from movements in security values.

Other Purchases and sales of portfolio securities, other than short-term securities, aggregated $106,038,000 and $3,922,000, respectively, for the period ended December 31, 2007.

NOTE 3 - FEDERAL INCOME TAXES

No provision for federal income taxes is required since the fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code and distribute to shareholders all of its taxable income and gains.Federal income tax regulations differ from generally accepted accounting principles; therefore, distributions determined in accordance with tax regulations may differ significantly in amount or character from net investment income and realized gainsfor financial reporting purposes. Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences.

Distributions during the period ended December 31, 2007, totaled $188,000 and were characterized as ordinary income for tax purposes. At December 31, 2007, the tax-basis components of net assets were as follows:

For the period ended December 31, 2007, the fund recorded the following permanent reclassifications to reflect tax character. Reclassifications to paid-in capital relate primarily to per share rounding of distributions.Reclassifications between income and gain relate primarily to per share rounding of distributions. Results of operations and net assets were not affected by these reclassifications.

At December 31, 2007, the cost of investments for federal income tax purposes was $103,159,000.

NOTE 4 - RELATED PARTY TRANSACTIONS

The fund is managed by T. Rowe Price Associates, Inc. (the manager or Price Associates), a wholly-owned subsidiary of T. Rowe Price Group, Inc. The investment management agreement between the fund and the manager provides for anannual investment management fee equal to 0.50% of the funds average daily net assets. The fee is computed daily and paid monthly.

The fund is also subject to a contractual expense limitation through April 30, 2010. During the limitation period, the manager is required to waive its management fee and reimburse the fund for any expenses, excluding interest,taxes, brokerage commissions, and extraordinary expenses, that would otherwise cause the funds ratio of annualized total expenses to average net assets (expense ratio) to exceed its expense limitation of 0.55%. For a period of three yearsafter the date of any reimbursement or waiver, the fund is required to repay the manager for expenses previously reimbursed and management fees waived to the extent its net assets have grown or expenses have declined sufficiently to allow repaymentwithout causing the funds expense ratio to exceed its expense limitation. Pursuant to this agreement, management fees in the amount of $31,000 were waived during the period ended December 31, 2007. Including these amounts, management feeswaived in the amount of $31,000 remain subject to repayment at December 31, 2007.

In addition, the fund has entered into service agreements with Price Associates and a wholly owned subsidiary of Price Associates (collectively, Price). Price Associates computes the daily share price and provides certain otheradministrative services to the fund. T. Rowe Price Services, Inc., provides shareholder and administrative services in its capacity as the funds transfer and dividend disbursing agent. For the period ended December 31, 2007, expenses incurredpursuant to these service agreements were $21,000 for Price Associates and $0 for T. Rowe Price Services, Inc. The total amount payable at period-end pursuant to these service agreements is reflected as Due to Affiliates in the accompanyingfinancial statements.

The fund may invest in the T. Rowe Price Reserve Investment Fund and the T. Rowe Price Government Reserve Investment Fund (collectively, the T. Rowe Price Reserve Investment Funds), open-end management investment companies managed byPrice Associates and affiliates of the fund. The T. Rowe Price Reserve Investment Funds are offered as cash management options to mutual funds, trusts, and other accounts managed by Price Associates and/or its affiliates, and are not available fordirect purchase by members of the public. The T. Rowe Price Reserve Investment Funds pay no investment management fees.

As of December 31, 2007, T. Rowe Price Group, Inc., and/or its wholly owned subsidiaries owned 501,062 shares of the fund, representing 5% of the funds net assets.

Report of Independent Registered Public Accounting Firm

To the Board of Directors of T. Rowe Price Institutional Equity Funds, Inc. and Shareholders of T. Rowe Price Institutional U.S. Structured Research Fund

In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in allmaterial respects, the financial position of T. Rowe Price Institutional U.S. Structured Research Fund, Inc. (one of the portfolios comprising T. Rowe Price Institutional Equity Funds, Inc., hereafter referred to as the Fund) at December31, 2007, the results of its operations, the changes in its net assets and the financial highlights for the period October 31, 2007 (commencement of operations) through December 31, 2007, in conformity with accounting principles generally acceptedin the United States of America. These financial statements and financial highlights (hereafter referred to as financial statements) are the responsibility of the Funds management; our responsibility is to express an opinion onthese financial statements based on our audits. We conducted our audits of these financial statements in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2007, bycorrespondence with the custodian, brokers and by agreement to the underlying ownership records for T. Rowe Price Reserve Investment Fund, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Baltimore, Maryland
February 12, 2008

Tax Information (Unaudited) for the Tax Year Ended 12/31/07

We are providing this information as required by the Internal Revenue Code. The amounts shown may differ from those elsewhere in this report because of differences between tax and financial reporting requirements.

The funds distributions to shareholders included:

$1,000 from short-term capital gains,

$3,000 from long-term capital gains, which was subject to the 15% rate gains category.

For taxable non-corporate shareholders, $183,000 of the funds income represents qualified dividend income subject to the 15% rate category.

For corporate shareholders, $175,000 of the funds income qualifies for the dividends-received deduction.

Information on Proxy Voting Policies, Procedures, and Records

A description of the policies and procedures used by T. Rowe Price funds and portfolios to determine how to vote proxies relating to portfolio securities is available in each funds Statement of Additional Information, which youmay request by calling 1-800-225-5132 or by accessing the SECs Web site, www.sec.gov. The description of our proxy voting policies and procedures is also available on our Web site, www.troweprice.com. To access it, click on the wordsCompany Info at the top of our homepage for individual investors. Then, in the window that appears, click on the Proxy Voting Policy navigation button in the top left corner.

Each funds most recent annual proxy voting record is available on our Web site and through the SECs Web site. To access it through our Web site, follow the directions above, then click on the words Proxy VotingRecord at the bottom of the Proxy Voting Policy page.

How to Obtain Quarterly Portfolio Holdings

The fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The funds Form N-Q is available electronically on theSECs Web site (www.sec.gov); hard copies may be reviewed and copied at the SECs Public Reference Room, 450 Fifth St. N.W., Washington, DC 20549. For more information on the Public Reference Room, call 1-800-SEC-0330.

About the Funds Directors and Officers

Your fund is governed by a Board of Directors (Board) that meets regularly to review a wide variety of matters affecting the fund, including performance, investment programs, compliance matters, advisory fees and expenses, serviceproviders, and other business affairs. The Board elects the funds officers, who are listed in the final table. At least 75% of Board members are independent of T. Rowe Price Associates, Inc. (T. Rowe Price), and T. Rowe Price International,Inc. (T. Rowe Price International); inside or interested directors are employees or officers of T. Rowe Price. The business address of each director and officer is 100 East Pratt Street, Baltimore, Maryland 21202. TheStatement of Additional Information includes additional information about the directors and is available without charge by calling a T. Rowe Price representative at 1-800-225-5132.

Independent Directors

Name (Year of Birth)

Year Elected* Principal Occupation(s) During Past 5 Years and Directorships of Other Public Companies

Jeremiah E. Casey (1940) Director, National Life Insurance (2001 to 2005); Director, The Rouse Company, real estate developers (1990 to

2005 2004); Director, Allfirst Financial Inc. (previously First Maryland Bancorp) (1983 to 2002)

Anthony W. Deering (1945) Chairman, Exeter Capital, LLC, a private investment firm (2004 to present); Director, Vornado Real Estate Investment

2001 Trust (3/04 to present); Member, Advisory Board, Deutsche Bank North America (2004 to present); Director, Chairman

of the Board, and Chief Executive Officer, The Rouse Company, real estate developers (1997 to 2004)

Donald W. Dick, Jr. (1943) Principal, EuroCapital Advisors, LLC, an acquisition and management advisory firm; Chairman, The Haven Group, a

1996 custom manufacturer of modular homes (1/04 to present)

David K. Fagin (1938) Chairman and President, Nye Corporation (6/88 to present); Chairman, Canyon Resources Corp. (8/07 to present);

1996 Director, Golden Star Resources Ltd. (5/92 to present); Director, Pacific Rim Mining Corp. (2/02 to present)

Karen N. Horn (1943) Director, Federal National Mortgage Association (9/06 to present); Managing Director and President, Global Private

2003 Client Services, Marsh Inc. (1999 to 2003); Director, Georgia Pacific (5/04 to 12/05), Eli Lilly and Company, and

Simon Property Group

Theo C. Rodgers (1941) President, A&R Development Corporation (1977 to present)

2005

John G. Schreiber (1946) Owner/President, Centaur Capital Partners, Inc., a real estate investment company; Partner, Blackstone Real Estate

2001 Advisors, L.P.

*Each independent director oversees 121 T. Rowe Price portfolios and serves until retirement, resignation, or election of a successor.

Inside Directors


Year Elected* [Number of

T. Rowe Price Portfolios

Overseen] Principal Occupation(s) During Past 5 Years and Other Directorships of Public Companies

Edward C. Bernard (1956) Director and Vice President, T. Rowe Price; Vice Chairman of the Board, Director, and Vice President, T. Rowe Price

2006 [121] Group, Inc.; Chairman of the Board, Director, and President, T. Rowe Price Investment Services, Inc.; Chairman of

the Board and Director, T. Rowe Price Global Asset Management Limited, T. Rowe Price Global Investment Services

Limited, T. Rowe Price Retirement Plan Services, Inc., T. Rowe Price Savings Bank, and T. Rowe Price Services, Inc.;

Director, T. Rowe Price International, Inc.; Chief Executive Officer, Chairman of the Board, Director, and President,

T. Rowe Price Trust Company; Chairman of the Board, all funds

Brian C. Rogers, CFA, CIC (1955) Chief Investment Officer, Director, and Vice President, T. Rowe Price; Chairman of the Board, Chief Investment Officer,

2006 [68] Director, and Vice President, T. Rowe Price Group, Inc.; Vice President, T. Rowe Price Trust Company; President,

Institutional Equity Funds

*Each inside director serves until retirement, resignation, or election of a successor.

Officers


Title and Fund(s) Served Principal Occupation(s)

Preston G. Athey, CFA, CIC (1949) Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price

Vice President, Institutional Equity Funds Trust Company

Brian W.H. Berghuis, CFA (1958) Vice President, T. Rowe Price and T. Rowe Price Group, Inc.

Executive Vice President, Institutional Equity Funds

Joseph A. Carrier, CPA (1960) Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price

Treasurer, Institutional Equity Funds Investment Services, Inc., and T. Rowe Price Trust Company

Anna M. Dopkin, CFA (1967) Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price


Roger L. Fiery III, CPA (1959) Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price

Vice President, Institutional Equity Funds International, Inc., and T. Rowe Price Trust Company

John R. Gilner (1961) Chief Compliance Officer and Vice President, T. Rowe Price; Vice President,

Chief Compliance Officer, Institutional Equity Funds T. Rowe Price Group, Inc., and T. Rowe Price Investment Services, Inc.

David R. Giroux, CFA (1975) Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price


Gregory S. Golczewski (1966) Vice President, T. Rowe Price and T. Rowe Price Trust Company

Vice President, Institutional Equity Funds

M. Campbell Gunn (1956) Vice President, T. Rowe Price Global Investment Services Limited, T. Rowe

Vice President, Institutional Equity Funds Price Group, Inc., and T. Rowe Price International, Inc.

Henry H. Hopkins (1942) Director and Vice President, T. Rowe Price Investment Services, Inc.,

Vice President, Institutional Equity Funds T. Rowe Price Services, Inc., and T. Rowe Price Trust Company; Vice

President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price

International, Inc., and T. Rowe Price Retirement Plan Services, Inc.

Thomas J. Huber, CFA (1966) Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price


John D. Linehan, CFA (1965) Vice President, T. Rowe Price and T. Rowe Price Group, Inc.


Patricia B. Lippert (1953) Assistant Vice President, T. Rowe Price and T. Rowe Price Investment

Secretary, Institutional Equity Funds Services, Inc.

Gregory A. McCrickard, CFA (1958) Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price

Executive Vice President, Institutional Equity Funds Trust Company

Joseph M. Milano, CFA (1972) Vice President, T. Rowe Price and T. Rowe Price Group, Inc.


Charles G. Pepin (1966) Director, T. Rowe Price Trust Company; Vice President, T. Rowe Price and

Vice President, Institutional Equity Funds T. Rowe Price Group, Inc.

Larry J. Puglia, CFA, CPA (1960) Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price


Robert W. Sharps, CFA, CPA (1971) Vice President, T. Rowe Price and T. Rowe Price Group, Inc.


Robert W. Smith (1961) Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price


John F. Wakeman (1962) Vice President, T. Rowe Price and T. Rowe Price Group, Inc.


David J. Wallack (1960) Vice President, T. Rowe Price and T. Rowe Price Group, Inc.


Julie L. Waples (1970) Vice President, T. Rowe Price


Richard T. Whitney, CFA (1958) Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price

Vice President, Institutional Equity Funds International, Inc., and T. Rowe Price Trust Company

Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe Price International for at least five years.

Item 2. Code of Ethics.

The registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similarfunctions. A copy of this code of ethics is filed as an exhibit to this Form N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the period covered by this report.

Item 3. Audit Committee Financial Expert.

The registrants Board of Directors/Trustees has determined that Ms. Karen N. Horn qualifies as an audit committee financial expert, as defined in Item 3 of Form N-CSR. Ms. Horn is considered independent for purposes of Item 3 ofForm N-CSR.

Item 4. Principal Accountant Fees and Services.

(a) (d) Aggregate fees billed to the registrant for the last two fiscal years for professional services rendered by the registrants principal accountant were as follows:

Audit fees include amounts related to the audit of the registrants annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. Audit-related fees includeamounts reasonably related to the performance of the audit of the registrants financial statements and specifically include the issuance of a report on internal controls and, if applicable, agreed-upon procedures related to fund acquisitions.Tax fees include amounts related to services for tax compliance, tax planning, and tax advice. The nature of these services specifically includes the review of distribution calculations and the preparation of Federal, state, and excise tax returns. All other fees include the registrants pro-rata share of amounts for agreed-upon procedures in conjunction with service contract approvals by the registrants Board of Directors/Trustees.

(e)(1) The registrants audit committee has adopted a policy whereby audit and non-audit services performed by the registrants principal accountant for the registrant, its investment adviser, and any entity controlling,controlled by, or under common control with the investment adviser that provides ongoing services to the registrant require pre-approval in advance at regularly scheduled audit committee meetings. If such a service is required between regularlyscheduled audit committee meetings, pre-approval may be authorized by one audit committee member with ratification at the next scheduled audit committee meeting. Waiver of pre-approval for audit or non-audit services requiring fees of a de minimisamount is not permitted.

(2) No services included in (b) (d) above were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Less than 50 percent of the hours expended on the principal accountants engagement to audit the registrants financial statements for the most recent fiscal year were attributed to work performed by persons other than theprincipal accountants full-time, permanent employees.

(g) The aggregate fees billed for the most recent fiscal year and the preceding fiscal year by the registrants principal accountant for non-audit services rendered to the registrant, its investment adviser, and any entitycontrolling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant were $1,486,000 and $1,401,000, respectively, and were less than the aggregate fees billed for those sameperiods by the registrants principal accountant for audit services rendered to the T. Rowe Price Funds.

(h) All non-audit services rendered in (g) above were pre-approved by the registrants audit committee. Accordingly, these services were considered by the registrants audit committee in maintaining the principalaccountants independence.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Schedule of Investments.

Not applicable. The complete schedule of investments is included in Item 1 of this Form N-CSR.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 11. Controls and Procedures.

(a) The registrants principal executive officer and principal financial officer have evaluated the registrants disclosure controls and procedures within 90 days of this filing and have concluded that the registrantsdisclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely.

(b) The registrants principal executive officer and principal financial officer are aware of no change in the registrants internal control over financial reporting that occurred during the registrants second fiscalquarter covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.

Item 12. Exhibits.

(a)(1) The registrants code of ethics pursuant to Item 2 of Form N-CSR is attached.

(2) Separate certifications by the registrant's principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached.

(3) Written solicitation to repurchase securities issued by closed-end companies: not applicable.

(b) A certification by the registrant's principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940, isattached.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment

Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the

undersigned, thereunto duly authorized.

T. Rowe Price Institutional Equity Funds, Inc.

By/s/ Edward C. Bernard

Edward C. Bernard

Principal Executive Officer

DateFebruary 19, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment

Company Act of 1940, this report has been signed below by the following persons on behalf of

the registrant and in the capacities and on the dates indicated.

By/s/ Edward C. Bernard

Edward C. Bernard



By/s/ Joseph A. Carrier

Joseph A. Carrier

Principal Financial Officer


EX-99.CERT2ex-99cert.htm302 CERTIFICATIONS

CERTIFICATIONS

Item 12(a)(2).

CERTIFICATIONS

I, Edward C. Bernard, certify that:

1.

I have reviewed this report on Form N-CSR of T. Rowe Price Institutional U.S. Structured Research

Fund;

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, changes in

net assets, and cash flows (if the financial statements are required to include a statement of cash

flows) of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining

disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act

of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the

Investment Company Act of 1940) 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

a date within 90 days prior to the filing date of this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrants internal control over financial reporting that

occurred during the second fiscal quarter of the period covered by this report that has materially

affected, or is reasonably likely to materially affect, the registrants internal control over financial

reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed 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.

Date:February 19, 2008/s/ Edward C. Bernard

Edward C. Bernard


CERTIFICATIONS

I, Joseph A. Carrier, certify that:

1.

I have reviewed this report on Form N-CSR of T. Rowe Price Institutional U.S. Structured Research

Fund;

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, changes in

net assets, and cash flows (if the financial statements are required to include a statement of cash

flows) of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining

disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act

of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the

Investment Company Act of 1940) 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

a date within 90 days prior to the filing date of this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrants internal control over financial reporting that

occurred during the second fiscal quarter of the period covered by this report that has materially

affected, or is reasonably likely to materially affect, the registrants internal control over financial

reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed 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.

Date:February 19, 2008/s/ Joseph A. Carrier

Joseph A. Carrier


EX-99.906 CERT3ex-99_906cert.htm906 CERTIFICATIONS

CERTIFICATION UNDER SECTION 906 OF SARBANES-OXLEY ACT OF 2002

Item 12(b).

CERTIFICATION UNDER SECTION 906 OF SARBANES-OXLEY ACT OF 2002

Name of Issuer: T. Rowe Price Institutional U.S. Structured Research Fund

In connection with the Report on Form N-CSR for the above named Issuer, the undersigned hereby

certifies, to the best of his knowledge, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities

Exchange Act of 1934;

2.The information contained in the Report fairly presents, in all material respects, the financial

condition and results of operations of the Issuer.

Date: February 19, 2008/s/ Edward C. Bernard

Edward C. Bernard


Date:February 19, 2008/s/ Joseph A. Carrier

Joseph A. Carrier


EX-99.CODE ETH4ex-99_codeeth.htmCODE OF ETHICS

Code of Ethics

CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL

OFFICERS OF THE PRICE FUNDS

UNDER THE SARBANES-OXLEY ACT OF 2002

I. General Statement. This Code of Ethics (the Price Funds S-O Code) has been designed

to bring the Price Funds into compliance with the applicable requirements of the Sarbanes-Oxley

Act of 2002 (the Act)rules promulgated by The Securities and Exchange Commission

thereunder (Regulations).The Price Funds S-O Code applies solely to the Principal

Executive Officer, Principal Financial Officer, Principal Accounting Officer or Controller of, or

persons performing similar functions for, a Price Fund (whether such persons are employed by a

Price Fund or third party) (Covered Officers). The Price Funds shall include each mutual

fund that is managed, sponsored and distributed by affiliates of T. Rowe Price Group, Inc.

(Group). The investment managers to the Price Funds will be referred to as the Price Fund

Advisers.A list of Covered Officers is attached as Exhibit A.

The Price Fund Advisers have, along with their parent, T. Rowe Price Group, Inc. (Group)

also maintained a comprehensive Code of Ethics and Conduct (the Group Code) since 1972,

which applies to all officers, directors and employees of the Price Funds, Group and its affiliates.

As mandated by the Act, Group has adopted a Code (the Group S-O Code), similar to the

Price Funds S-O Code, which applies solely to its principal executive and senior financial

officers. The Group S-O Code and the Price Funds S-O Code will be referred to collectively as

the S-O Codes.

The Price Funds S-O Code has been adopted by the Price Funds in accordance with the Act and

Regulations thereunder and will be administered in conformity with the disclosure requirements

of Item 2 of Form N-CSR. The S-O Codes are attachments to the Group Code. In many respects

the S-O Codes are supplementary to the Group Code, but the Group Code is administered

separately from the S-O Codes, as the S-O Codes are from each other.

II. Purpose of the Price Funds S-O Code. The purpose of the Price Funds S-O Code, as

mandated by the Act and the Regulations, is to establish standards that are reasonably designed

to deter wrongdoing and to promote:

Ethical Conduct. Honest and ethical conduct, including the ethical handling of actual or

apparent conflicts of interest between personal and professional relationships.

Disclosure. Full, fair, accurate, timely and understandable disclosure in reports and

documents that the Price Funds file with, or submit to, the SEC and in other public

communications made by the Price Funds.

Compliance. Compliance with applicable governmental laws, rules and regulations.

Reporting of Violations. The prompt internal reporting of violations of the Price Funds

S-O Code to an appropriate person or persons identified in the Price Funds S-O Code.

Accountability. Accountability for adherence to the Price Funds S-O Code.

III. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest.

Overview. Each Covered Officer owes a duty to the Price Funds to adhere to a high standard of

honesty and business ethics and should be sensitive to situations that may give rise to actual as

well as apparent conflicts of interest.

A conflict of interest occurs when a Covered Officers private interest interferes with the

interests of, or his or her service to, the Price Funds. For example, a conflict of interest would

arise if a Covered Officer, or a member of his or her family, receives improper personal benefits

as a result of his or her position with a Price Fund.

Certain conflicts of interest covered by the Price Funds S-O Code arise out of the relationships

between Covered Officers and the Price Funds and may already be subject to provisions

regulating conflicts of interest in the Investment Company Act of 1940 (Investment Company

Act), the Investment Advisers Act of 1940 (Investment Advisers Act) and the Group Code.

For example, Covered Officers may not individually engage in certain transactions (such as the

purchase or sale of securities or other property) with a Price Fund because of their status as

affiliated persons of a Price Fund. The compliance programs and procedures of the Price

Funds and Price Fund Advisers are designed to prevent, or identify and correct, violations of

these provisions.

Although typically not presenting an opportunity for improper personal benefit, conflicts arise

from, or as a result of, the contractual relationship between a Price Fund and its Price Fund

Adviser (and its affiliates) of which the Covered Officers may also be officers or employees. As

a result, the Price Funds S-O Code recognizes that the Covered Officers will, in the normal

course of their duties (whether formally for the Price Funds or for the Price Fund Advisers, or for

both), be involved in establishing policies and implementing decisions which will have different

effects on these entities. The participation of the Covered Officers in such activities is inherent

in the contractual relationship between each Price Fund and its respective Price Fund Adviser.

Such participation is also consistent with the performance by the Covered Officers of their duties

as officers of the Price Funds and, if consistent with the provisions of the Investment Company

Act and the Investment Advisers Act, it will be deemed to have been handled ethically.

Other conflicts of interest are covered by the Price Funds S-O Code, even if these conflicts of

interest are not addressed by or subject to provisions in the Investment Company Act and the

Investment Advisers Act.

Whenever a Covered Officer is confronted with a conflict of interest situation where he or she is

uncertain as to the appropriate action to be taken, he or she should discuss the matter with the

Chairperson of Groups Ethics Committee or another member of the Committee.

Handling of Specific Types of Conflicts. Each Covered Officer (and close family members)

must not:

Entertainment. Accept entertainment from any company with which any Price

Fund or any Price Fund Adviser has current or prospective business dealings,

including portfolio companies, unless such entertainment is in full compliance

with the policy on entertainment as set forth in the Group Code.

Gifts. Accept any gifts, except as permitted by the Group Code.

Improper Personal Influence. Use his or her personal influence or personal

relationships improperly to influence investment decisions, brokerage allocations

or financial reporting by the Price Funds to the detriment of any one or more of

the Price Funds. Taking Action at the Expense of a Price Fund. Cause a Price Fund to take

action, or fail to take action, for the personal benefit of the Covered Officer rather

than for the benefit of one or more of the Price Funds. Misuse of Price Funds Transaction Information. Use knowledge of portfolio

transactions made or contemplated for a Price Fund or any other clients of the

Price Fund Advisers to trade personally or cause others to trade in order to take

advantage of or avoid the market impact of such portfolio transactions. Outside Business Activities. Engage in any outside business activity that

detracts from a Covered Officers ability to devote appropriate time and attention

to his or her responsibilities to a Price Fund. Service Providers. Excluding Group and its affiliates, have any ownership

interest in, or any consulting or employment relationship with, any of the Price

Funds service providers, except that an ownership interest in public companies is

permitted Receipt of Payments. Have a direct or indirect financial interest in commissions,

transaction charges, spreads or other payments paid by a Price Fund for effecting

portfolio transactions or for selling or redeeming shares other than an interest

(such as compensation or equity ownership) arising from the Covered Officers

employment by Group or any of its affiliates.

Service as a Director or Trustee. Serve as a director, trustee or officer of any

public or private company or a non-profit organization that issues securities

eligible for purchase by any of the Price Funds, unless approval is obtained as

required by the Group Code.

IV. Covered Officers Specific Obligations and Accountabilities.

A. Disclosure Requirements and Controls. Each Covered Officer must

familiarize himself or herself with the disclosure requirements (Form N-1A registration

statement, proxy (Schedule 14A), shareholder reports, Forms N-SAR, N-CSR, etc.)

applicable to the Price Funds and the disclosure controls and procedures of the Price

Fund and the Price Fund Advisers.

B. Compliance with Applicable Law. It is the responsibility of each Covered

Officer to promote compliance with all laws, rules and regulations applicable to the Price

Funds and the Price Fund Advisers. Each Covered Officer should, to the extent

appropriate within his or her area of responsibility, consult with other officers and

employees of the Price Funds and the Price Fund Advisers and take other appropriate

steps with the goal of promoting full, fair, accurate, timely and understandable disclosure

in the reports and documents the Price Funds file with, or submit to, the SEC, and in

other public communications made by the Price Funds.

C. Fair Disclosure. Each Covered Officer must not knowingly misrepresent, or

cause others to misrepresent, facts about a Price Fund to others, whether within or

outside the Price organization, including to the Price Funds directors and auditors, and

to governmental regulators and self-regulatory organizations.

D. Initial and Annual Affirmations. Each Covered Officer must:

1. Upon adoption of the Price Funds S-O Code (or thereafter, as applicable, upon

becoming a Covered Officer), affirm in writing that he or she has received, read,

and understands the Price Funds S-O Code.

2. Annually affirm that he or she has complied with the requirements of the Price

Funds S-O Code.

E. Reporting of Material Violations of the Price Funds S-O Code. If a

Covered Officer becomes aware of any material violation of the Price Funds S-O Code

or laws and governmental rules and regulations applicable to the operations of the

Price Funds, he or she must promptly report the violation (Report) to the Chief

Legal Counsel of the Price Funds (CLC). Failure to report a material violation will

be considered itself a violation of the Price Funds S-O Code. The CLC is identified in

the attached Exhibit B.

It is the Price Funds policy that no retaliation or other adverse action will be taken

against any Covered Officer or other employee of a Price Fund, a Price Fund Adviser

or their affiliates based upon any lawful actions of the Covered Officer or employee

with respect to a Report made in good faith.

F. Annual Disclosures. Each Covered Officer must report, at least annually, all

affiliations or other relationships as called for in the Annual Questionnaire for

Executive Officers and/or Employee Directors/Trustees of Group and the Price Funds.

V. Administration of the Price Funds S-O Code. The Ethics Committee is responsible for

administering the Price Funds S-O Code and applying its provisions to specific situations in

which questions are presented.

A. Waivers and Interpretations. The Chairperson of the Ethics Committee has

the authority to interpret the Price Funds S-O Code in any particular situation and to

grant waivers where justified, subject to the approval of the Joint Audit Committee of

the Price Funds. All material interpretations concerning Covered Officers will be

reported to the Joint Audit Committee of the Price Funds at its next meeting. Waivers,

including implicit waivers, to Covered Officers will be publicly disclosed as required

in the Instructions to N-CSR. Pursuant to the definition in the Regulations, an implicit

waiver means a Price Funds failure to take action within a reasonable period of time

regarding a material departure from a provision of the Price Funds S-O Code that has

been made known to an executive officer (as defined in Rule 3b-7 under the

Securities Exchange Act of 1934) of a Price Fund. An executive officer of a Price

Fund includes its president and any vice-president in charge of a principal business

unit, division or function.

B. Violations/Investigations. The following procedures will be followed in

investigating and enforcing the Price Funds S-O Code:

1. The CLC will take or cause to be taken appropriate action to

investigate any potential or actual violation reported to him or her.

2. The CLC, after consultation if deemed appropriate with Outside

Counsel to the Price Funds, will make a recommendation to the

appropriate Price Funds Board regarding the action to be taken with

regard to each material violation. Such action could include any of the

following: a letter of censure or suspension, a fine, a suspension of trading

privileges or termination of officership or employment. In addition, the

violator may be required to surrender any profit realized (or loss avoided)

from any activity that is in violation of the Price Funds S-O Code.

VI. Amendments to the Price Funds S-O Code. Except as to the contents of Exhibit A and

Exhibit B, the Price Funds S-O Code may not be materially amended except in written form,

which is specifically approved or ratified by a majority vote of each Price Fund Board, including

a majority of the independent directors on each Board.

VII. Confidentiality. All reports and records prepared or maintained pursuant to the Price

Funds S-O Code will be considered confidential and shall be maintained and protected

accordingly. Except as otherwise required by law, the Price Funds S-O Code or as necessary in

connection with regulations under the Price Funds S-O Code, such matters shall not be disclosed

to anyone other than the directors of the appropriate Price Fund Board, Outside Counsel to the

Price Funds, members of the Ethics Committee and the CLC and authorized persons on his or

her staff.

Preparation Date: 9/30/03

Adoption Date: 10/22/03
Exhibit A

Persons Covered by the Price Funds S-O Code of Ethics

Edward C. Bernard, Chairman and Chief Executive Officer

Joseph A. Carrier, Treasurer and Chief Financial Officer

Exhibit B

Chief Legal Counsel to the Price Funds

Henry H. Hopkins

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