Compliance Policies and Procedures March 3, 2016

Unclaimed Property Overview Why Report? –It’s the law. –Penalties and Interest for non compliance is a growing concern in today’s environment. –Ever Changing State Requirements »Over 1,000 changes in past year, several thousand in last several years. –All 50 states, plus the District of Columbia,U.S. Virgin Islands, Puerto Rico and Guam have enacted unclaimed property laws. –Select Foreign countries, including three Canadian provinces have unclaimed property laws. »Alberta, British Columbia and Quebec 2

March 3, 2016 Recommended Approach to Gaining Effective Compliance Phase I: Review and validate the current analysis of records Identify any additional property types for review. Impact of Acquisitions/Dispositions Provide an estimate, including extrapolation, of reportable liability by state and property type. Phase II: Mitigate Potential Liability »Internal and external due diligence »Application of statutory exemptions & deductions Phase III: Formulate a Filing Strategy »Voluntary disclosure agreements »Initial filings Phase IV: Implement Written Polices and Procedures. Phase V: Achieve Cost Effective Annual Compliance 3

March 3, 2016 Recommended Approach to Gaining Effective Compliance Phase I: Initial Assessment Current Review: –Review existing process for treatment of stale dated items by property type –Review for the inclusion of all applicable property types »including; non-ERISA benefits and self-insured plans, 3 rd party providers, unapplied cash, customer credits, gift cards Consider the impact of any stock acquisitions or asset dispositions (successor liability), –Unclaimed property historical compliance –Nature and extent of books and records –Written and unwritten Accounting practices and procedures Provide an “estimate” of liability by state and property type –Including extrapolations as warranted 4

March 3, 2016 Recommended Approach to Gaining Effective Compliance Phase II: Mitigate Potential Liability Utilize internal and external due diligence to determine how much of the potential unclaimed property liability is truly owed. Apply industry standards as applicable. Apply statutory exemptions, deductions and exclusions –B-2-B exemptions –ERISA –Statutory and Regulatory Deductions Adjust extrapolation methodologies for years where records are inadequate and/or are no longer available. 5

March 3, 2016 Recommended Approach to Gaining Effective Compliance Phase III: Formulate Compliance Strategy Seek a negotiated settlement with state of legal incorporation(s). Optimize the use of states’ voluntary disclosure programs to achieve the benefits of reduced look back periods as well as the waiver of interest, fines and penalties. Reach out with historic filings and cover letters to states with informal voluntary disclosure programs. Commence initial filings in other states with nominal liability on the next annual cycle. 6

March 3, 2016 Recommended Approach to Gaining Effective Compliance Phase V: Formalize Compliance Activities 7 1 Project Kick-Off - Collaborate with Team: Roles and functions of Various Functional Personnel Migration of Data Timeline Reports Communications Protocol 2 Integrate Data: Grant security access to company representatives Agree file structure Import Data from various applications Format client data for review & processing Migrate data into compliance software 3 B2B Exemption Review Identify property that meets statutory, administrative or business exemption/exclusions Document results & update file of Reportable property 4 Due Diligence Management Prepare, image & mail due diligence mailings Track responses & communicate findings Update records, delete positive response 5 Report Preparation Prepare preliminary reports based on DD findings Communicate preliminary report & reconciliations Process any changes based on review by key personnel Send final report for approval 6 Remittance and Submission: Prepare reports in required format for submission Secure funding or payment & prepare remittances File report and payment evidencing timely submission Prepare final report reconciliation Archive & supporting documentation Unclaimed Property Compliance Cycle Project Kick- Off 1 Integration of Data 2 B2B Exemption Review 3 Due Diligence Management 4 Report Preparation 5 Remittance and Submission 6

March 3, 2016 Step 2 – Property Review How old should the property be? Dormancy Periods and Reporting Periods Every state has an annual ‘reporting period’ This reporting year typically does not coincide with the fiscal year In about 40 jurisdictions the reporting period is 7/1/XX – 6/30/XX; the year depends on the dormancy period for the property type Sample of dormancy periods uncashed vendor checks Note: Dormancy periods changes periodically. Information accurate as of 06/ Year Dormancy Period5 Year Dormancy Period New York, Texas, California, New Jersey, Iowa, Connecticut, Kentucky Delaware, Indiana, Illinois, Florida, Wisconsin, Missouri, Louisiana 8

March 3, 2016 Step 4 – Due Diligence Process Due Diligence - A state requirement of the company to attempt to locate the owners of unclaimed property before it is submitted to the state. Sample of states having different statutory requirements: California – Requires certain sections of the letter to either be bolded or 2 font sizes larger than the rest of the letter Illinois – Requires that the name, address, position and phone number of the contact be on each letter 9

March 3, 2016 Step 4 – Due Diligence Process Due Diligence Timeframes About 25 states require letter be mailed between days before filing the report Arizona requires letters mailed at least 120 days prior to filing the report California – 180 to 365 days prior to filing the report Delaware, Texas and Pennsylvania do not require due diligence but it is recommended 10

March 3, 2016 Step 4 – Due Diligence Process Due Diligence Thresholds: Most states do not require due diligence letters if the property is below a certain threshold Majority of states this amount is $50.00 Some states it is lower; Illinois the threshold is $10 while Connecticut has no threshold 11

March 3, 2016 Step 3 – Due Diligence Process Certified mail requirements may apply New York, New Jersey, Ohio and Iowa Determine what proof of identity is required – fraud prevention Most often used is either a copy of a drivers license, state ID or, for a company, a business card Some companies do not require any proof of identity 12

March 3, 2016 Step 4 – Due Diligence Process What information should the letter contain? Name and address info of the owner Any account number or check number for the owner to reference Type of property currently unclaimed Date of when unclaimed property originated Amount of unclaimed property Contact information if the owner should have any questions Language that if the owner does not respond the property will be remitted to the state 13

March 3, 2016 Recommended Approach to Gaining Effective Compliance Phase IV: Draft and Implement Written Policies & Procedures Use the best practices gleaned from the earlier phases to design or implement effective policies and procedures to ensure timely and accurate compliance prospectively for each department/business unit: – Include specific guidelines for internal and statutory due diligence. Establish controls over submission of information and internal review of information to ensure that practices are correctly implemented and new members are educated and trained, as applicable. Assist in implementing practical time efficient policies for gathering and tracking of required information. Assist in developing and creating necessary audit trail to document items that are not reportable as unclaimed property. 14

March 3, 2016 Recommended Approach to Gaining Effective Compliance Phase IV: Some Additional Considerations (con’t) Procedures should be tailored to company specific facts and circumstances –Run cost/benefit analysis to support internal, outsourcing or co-sourcing of function –Designate Escheat Coordinator –Establish timelines and deadlines Establish processes to address –Ability to include “notes” documentation in ERP system –Creation of escheat liability account in G/L for items deemed reportable How will research going to be researched….AND preserved Formalize record retention process…involving legal department Consider Privacy/Security Issues (password protection, access to liability acct) HOW ARE POLICIES GOING TO BE MONITORED to ensure compliance 15

March 3, 2016 Kendall Houghton Partner (202) Bob Peters Managing Director – Tax Services (312) March 3,