Abandoned Property Updates: Regulatory Changes, Implications and Alternatives

1. Abandoned Property Updates:Regulatory Changes, Implications and Alternatives Presented by: Thomas Montrone, President & CEO, R&T and Eagle Rock Mary Rose Cascaes, EVP & COO, R&T Bernard Lopez, Eagle Rock Proxy Advisors LLC

2. Presentation Overview • Changes in Dormancy Rules • Implications to Issuers • Outline of SEC Regulations 17Ad17 Requirements • Processing Changes to Meet the SEC Rule • Eagle Rock Pre-Escheatment Services • Questions and Answers

3. Dormancy Rules • Always on the Books, but interpreted Differently • 6 States and Puerto Rico Amended Dormancy • States: California, Illinois, Delaware, Idaho, New York, Connecticut • More States are likely to follow

4. “Dormancy”: What it Means • Written communication is defined as Contact:No Contact = Account is Dormant • Typical Contact: Letters, checks, proxies • Non-Dividend Payers, DRPs, Unexchanged Shareholders at risk • Street Proxy Distribution Risks

5. Implications of Dormancy • Underlying Shares escheated & sold, fixing value of stock in most states • Shareholders Unaware that Their Stock has been SOLD • Years may pass before shareholder learns of escheatment • Appreciated Value – State Sale Price = LOSS

6. Proactive Steps Taken Before Escheatment • Due Diligence Mailings Before Escheatment • SEC Lost Shareholder Searches and “Extra” Search for High Dollar Accounts • “No Contact” Mailings • Ensure external Proxy Voted files sent to R&T • Issues Review “No Contact” and Escheatment files to screen for customers and employees • Pre-Escheatment Program

7. Lost Securityholders… • SEC 17Ad-17 • 1997 – Originally enacted by Congress to address situations where TA’s have lost contact with shareholders • 2 searches within 24 months of identifying a bad address for anyone whose 1st class mailing was returned twice from USPS • Excludes decedents and ‘non-natural persons’ (corporations, trusts, etc.)

8. …and Unresponsive Payees • Dodd-Frank • Effective January 23, 2014 • Brokers must also search for ‘lost’ accounts • Paying Agents must notify recipients with outstanding checks (‘Unresponsive Payees’) • State escheatment statutes supersede

9. Requirements • No accounts excluded except those with bad addresses • ‘Regularly Scheduled Check’ • Within 7 months after issuance • Must be a separate notice but can include multiple payments

10. How RTCO Will Comply • Checks issued after 1/23/14 • First pass will include all outstanding checks • Separate mailing • Cash your check or request replacement • Notice will provide 3 contact options: • Call toll-free # • Login to IRIS • Unique website link • Database updated with mail date

11. States are becoming more aggressive • Abandoned property has become most states’ top 3 revenue source • Shortening dormancy periods to 3 years from 5 or 7 (AZ tried to make it 2 years) • Increasing audits and hiring 3rd parties (30 year look back) • Assessing interest & penalties

12. What can issuers do? • Additional mailings • Voluntary Disclosure Agreements (VDAs) • Deep Research Programs. Shareholders who have already been marked as lost after SEC 17Ad-17 requirements • Pre-Escheatment Programs

13. What is a Pre-Escheatment Program? • Used to help locate unexchanged shareholders and assist them in completing a transaction after a corporate action • Asset Recovery, Post Merger Cleanup (PMC), Shareholder Asset Recovery Program (SHARP)

14. How does it work? • Program may begin 6 to 9 months after a transaction has been completed • Deep research tools are used to locate the shareholder or heirs (e.g. LexisNexis, Social Media) • Easy to understand documents are put together and mailed out with transaction information and the need to take action • Documents disclose R&T as the exchange agent and provide the toll-free number

15. How does it work? • Unexchanged holders are hand-held through the process and assisted in getting proper documentation • Shareholders are given the option to sell or exchange into shares of the new company

16. Why should I run a Pre-Escheatment Program? • Provides updated shareholder information • Greatly reduce the amount of abandoned property that is escheated to the states • Avoid increased scrutiny and costly audits • Reduce a company’s exposure to liability, interest and penalties • Program is run free to the company. Shareholders are charged a processing fee

17. Why should I run a Pre-Escheatment Program? • Avoid shareholder lawsuits over escheated assets • Company is promoting good corporate governance by making every effort to find and locate “lost” shareholders • Shareholders can have lost certificates replaced for the purpose of exchange

18. Questions & Answers For more information please contact: Tom Montrone tmontrone@rtco.com 908-497-2333 Mary Rose Cascaes mrcascaes@rtco.com 908-497-2334 Bernard Lopez blopez@eaglerockproxy.com 908-497-2344