1. Kevin LaCroix Presents The Top D&O Stories of 2015 January 21, 2016

2. Presenter: Meet the Presenter Kevin LaCroix, RPLU Executive Vice President at RT ProExec Kevin LaCroix is an Executive Vice President at RT ProExec, Beachwood, Ohio, a division of R-T Specialty, LLC. RT ProExec is an insurance intermediary focused exclusively on management liability issues. Kevin is also the author of the Internet weblog, The D&O Diary, http://www.dandodiary.com, which the New York Times called “influential” and the Wall Street Journal described as “widely followed.”http://www.dandodiary.com

3. The information and opinions expressed by our panelists today are their own, and do not necessarily represent the views of their employers or of PLUS. The contents of these materials may not be relied upon as legal advice. A copy of the presentation slides will be available following this webinar, on the PLUS website at: www.plusweb.orgwww.plusweb.org 3

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5. 1.Increased Numbers of IPOs During the Period 2013-2015 Means : –(a) More IPO-Related Securities Lawsuits –(b) Increased Numbers of Lawsuits Overall 5

6. 2015 Securities Class Action Lawsuit Filings at Highest Level Since at Least 2011 –191 securities lawsuits filed in 2015 (federal and state court) 186 federal court securities suit filings –9.4% increase over 2014 (170 suits filed) –About equal with 1997-2013 average (189) –13% above 2009-2014 average (169) Much of the Increase in 2015 Due to IPO-Related Securities Suit Filings 6

7. Increased IPO Activity 2013-2015 (Number of U.S. IPOs): –2011: 125 –2012: 128 –2013: 222 –2014: 275 –2015: 170 7

8. Increased IPO Litigation (Number of IPO-Related Securities Suits Filed, Percentage of All Securities Suits) –2013: 7 (4%) –2014: 17 (10%) –2015: 29 (15%) 8

9. 2. Securities Suits Against Foreign Defendants Continue to Accrue 9

10. 1997-2013 Average Annual Number of Securities Suits Against Non-U.S. Companies: 22 –1997-2013 Average Annual Percentage of All Filings Against Foreign Companies: 11% Increased Numbers and Percentages in 2014 and 2015 –2014: 34 (20%) –2015: 34 (18%) Non-U.S. Companies Represent About 16% of U.S. Listings 10

11. 2015 Securities Suits Targeted Companies from 18 different countries –China: 15 (if Alibaba is included) 44% of all lawsuits filed against non-U.S. companies 8% of all 2015 securities class action lawsuit filings –Brazil: 3 Two lawsuits related to Petrobras scandal (Eletrobras, Braschem) Additional suit related to Vale, S.A. environmental disaster (dam failure) 11

12. 3. As Securities Litigation Increasingly Involves Smaller Companies, Average and Median Securities Lawsuit Settlements Are Shrinking 12

13. Trend Toward Smaller Company Defendants Noted in 2014 –66% percent of all 2014 securities suit defendants were under $2bb market cap –25% involved companies with market caps under $300 Trend Continued in 2015 –Slightly less than half of company defendants have market caps under $750 million 13

14. Greatly Reduced Aggregate Settlement Amounts: –2013: 66 settlements, $4.847 billion –2014: 63 settlements, $1.068 billion Reduced Average Settlements –2013: $73.5 million –2014: $17 million –1996-2013: $57.2 million Reduced Median Settlements –2013: $6.6 million –2014: $6 million –1996-2013: $8.3 million 14

15. 4. Supreme Court Issues Its Opinion in the Omnicare Case –Question of Liability for Opinions in ’33 Act Cases Is Objective Falsity Sufficient, or must plaintiff also allege Subjective Falsity? –March 24, 2015 Decision Objective Falsity not sufficient, must plead defendants did not believe opinions Opinions can still give rise to liability if material facts omitted –Defense outcome, but Court’s comments re: omissions could help plaintiffs –Potentially significant because of uptick in IPO-related litigation 15

16. 5. New Department of Justice Policy Means Corporate Officials Could be Targeted –September 9, 2015 Directive (the “Yates Memo”) –Renewed emphasis on prosecution of individual directors and officers –For a target company to receive any cooperation credit, the company must provide all relevant facts about individuals involved in the misconduct 16

17. 6. Courts Slam Disclosure-Only Settlements in Merger Objection Cases –Delaware Chancery Court: H-P/Aruba Networks Merger Suit, October 9, 2015 hearing Vice Chancellor Laster rejects settlement, refers to “systemic” problem that causes “misshapen legal system –N.Y. Sup. Ct.: Allied Healthcare Merger Suit: Oct.23, 2015 Opinion Judge Charles Ramos: Disclosure-only settlements “reflect poorly on the profession and the courts” –Sources have already noted decline in the number of merger objection lawsuits being filed in Del. Chancery Court 17

18. 7. Delaware Legislature Prohibits Fee- Shifting Bylaws –Under the “American Rule,” each party bears its own costs May 2014: ATP Tours: Del. Supreme Court recognizes facially validity of fee-shifting by laws Seized upon by litigation reform advocates –After false starts, Del. Legislature passes law prohibiting fee- shifting by-laws –Question of impact under other states’ laws (Okla. Statute mandates fee shifting in derivative suits). 18

19. 8. Cyber Breach-Related D&O Litigation Continues to Emerge –Long lag after Target, Wyndham Suits Filed in 2014 Many high-profile data breaches in the interim –September 2015: Plaintiff files shareholders’ derivative suit against Home Depot board –August 2015: Third Circuit affirms FTC’s authority to pursue data-breach related enforcement action 19

20. 9. Litigation Financing Continues to Grow and Develop –Already significant factor in Australia, Canada, U.K.; increasingly important in U.S. –Many firms publicly traded, reports underscore profitability –Litigation funding significant factor to pursue Tesco (UK) and VW (Germany and Netherlands) –Role of Financing Evolving: Portfolio funding, Law firm expansion funding –One U.S. funding firm recently announced $1bb funds under management 20

21. 10. Consolidation Comes to the P&C Insurance Industry –Numerous high profile mergers announced in 2014 Highest Profile: Ace Acquires Chubb (Deal Closed Jan. 4, 2016) –Not all mergers will affect marketplace the same way –Completed mergers already having an impact –Consolidation could mean that settled assumptions, expectations may have to change Routine past transactions may now require more time, attention and effort Will complications, disruptions arise? 21

22. Questions 22

23. Presenter: Meet the Presenter Kevin M. LaCroix, Esq., RPLU Executive Vice President at RT ProExec The D&O Diary: http://www.dandodiary.comhttp://www.dandodiary.com Contact Kevin by email at: kevin.lacroix@rtspecialty.com 23

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26. Thank you for your time. A replay of this webinar will be available to PLUS Members at: www.plusweb.org www.plusweb.org 26