Class Actions and Proxy Processing Bank Depository User Group Scottsdale, Arizona October 25, 2005

Panel Xcitek – John Kehoe, Senior Sales Executive ProxyTrust – John Jansing, President ADP ICS – John Keegan, Vice President, Account Management

Xcitek “Class Action Processing” Issues – The Industry – Financial Institutions Headaches Class Actions Defined – Event Lifecycle What are the Vendors doing to help with Class Action Processing? – Data Providers – Outsource Solutions – Software Solutions What is needed and next steps?

Xcitek “Class Action Processing” Class Action Processing Issues – The industry: Settlements in the last several years increased into the billions requiring financial institutions to pay close attention to filing. (Approximately 200 class actions are announced each year, of which 75% settle) No central oversight effort. Disparate requirements No definitive legal requirements for financial institutions to file on who’s behalf Mostly US driven - hard to find international class action data sources

Xcitek “Class Action Processing” Class Action Processing Issues – Financial Institution’s Headaches Class Actions getting more complex (i.e. Worldcom with several different filing forms) Class Actions typically go back 9 years. Data in different databases or most likely in microfiche Different financial institutions filing for the same account. Some rejected and some dually paid upon settlement Years before settlement is received thus making accounts owed proceeds hard to find if left financial institution Unlike a corporate action, you miss the filing date and you miss out on the settlement. With a corporate action you may have cash or own the security. Huge Risk! Usually a cost center to the financial institution Time intensive, manual effort

Xcitek “Class Action Processing” Class Action Lifecycle – Similar to Corporate Action Processing – Build Class Action – Notify Recipients – Create Data Requests – Import/Add Data – Solicit Responses – Create/File Claims – Reconcile Payments/Settlements

Xcitek “Class Action Processing” Class Action Lifecycle – Build Class Action Of the top 50 plaintiff law firms, 10 represent 60% of securities class actions that settle

Xcitek “Class Action Processing” Class Action Lifecycle – Notify Recipients Who are they? – Individual account holders – Trust Clients – Pension Funds How and in different ways? – Global Notification - Provide an Optional Global Announcement of the Event – Announcement Notification - Send Cleansed Data to Eligible Recipients – Incomplete Response Reminder - Solicit Response from Eligible Recipients – Advice Response Received - Advise Receipt of Responses – Claim Notification - Notify Eligible Recipients Claim has been Filed on Their Behalf - New Claim Notification Template

Xcitek “Class Action Processing” Class Action Lifecycle – Create Data Requests - Request Data to Complete the Claim Report Begin & End Date of Holdings Date Range of Transactions Transaction Type to Identify Eligible Trades Yes/No Indicators for Additional Data Elements File or Report Format

Xcitek “Class Action Processing” Class Action Lifecycle – Import / Add Data Import Holdings (Beginning / Ending) & Transactions Import Data from Client Spreadsheets Rapid Data Entry for Non-Imported Data – Account Data – Holdings Data – Transaction Data

Xcitek “Class Action Processing” Class Action Lifecycle – Solicit Responses & Capture Responses Opt In Opt Out Auto Opt In

Xcitek “Class Action Processing” Class Action Lifecycle – Create / File Claims Provide Generic Agent Claim Form – Include Required Fields & Values to Submit Claim Populate Claim Data – Only Include Accounts that Opt In Create Claim Filing Notifications Export Claim Data for Electronic Filing View Claim Report on the CA for Holding & Transaction Data

Xcitek “Class Action Processing” Class Action Lifecycle – Recon Payments / Settlements Calculate and Record Class Action Settlement Proceed Payment Report Class Action Settlement Proceed Payment – MT 566 – Entitlement Export Develop Payment Reconciliation Statuses for Views and Management Reporting

Xcitek “Class Action Processing” What are the Vendors doing to help with Class Action Processing? – Data Providers Xcitek: Xcitek Class Actions™ (XCA) ISS – Outsource Solutions ISS Magenta One – Software Solutions Xcitek: XSP™ Class Actions

Xcitek “Class Action Processing” What is needed and next steps? – Step 1: Look to fix your problems now Review your data offerings Look to automate or outsource – Step 2: Start Industry Initiatives Financial Industry Groups Unit (Steering Committees) – Step 3: Hire Research firms Formulate papers to guide industry groups – Step 4: Government Regulation? Why do the lawyers hold so much power and make so much? Look to see how lobbying as a financial industry sector can help. “JUST DO IT!”

Proxy Processing Discussion Topic: The Current Beneficial Proxy Process – How it Actually Works Third Party Processors Typically Handle: – Requests from Vote Agents – Exception Processing – What’s Good for the Bank – How it Benefits Your Clients

Proxy Processing Discussion Topic: Helping Investment Company and Registered Investment Advisor Clients Comply with SEC Regulations – Challenges faced – Current Process – What works/Doesn’t – Options Available

Proxy Processing Discussion Topic: Future Processing, Challenges to the Current Process and What They Mean for the Bank – Business Roundtable – Access to the Customer – Cost Model – Deregulation

Proxy Processing Discussion Topic: Electronic Delivery – Current Model – Options

Proxy Processing Discussion Topic: What Does the Future Hold? – Will There be Additional Regulatory Oversight? – What Will it Be? – What Will it Mean for the Bank?