Above: "ADP understands our business, and our two organizations work as a team," says Mel Taub, Smith Barney's Senior Executive Vice President and Director of Operations & Systems, for a video that ADP is producing to communicate its vision of tomorrow's financial services workstation. ADP recently provided a customized version of its FS Partner system to over 500 members of Smith Barney's state-of-the-art trading floor. Now ADP and Smith Barney are working to create and implement a customized solution for over 20,000 financial consultants and sales personnel in Smith Barney's Retail Branch Office network.

Brokerage Services

Brokerage Services, is ADP's second-largest business. It represents over 20% of ADP's revenue and provides securities transaction processing, market information services, investor analytics, broker tools, and investor communication services to the financial community worldwide. ADP processes approximately 20% of New York Stock Exchange transactions and is the leading third-party provider of recordkeeping services in the U.S. and Canada. ADP is also the leading U.S. provider of retail equity information, with 96,000 broker terminals, in 1,200 firms.

During '95, ADP's new Power Partner became the first broker's workstation to use state-of-the-art OLE (object linking and embedding) technology. This advanced technology includes a modular way of building software applications that seamlessly integrate market information, securities processing systems, broker productivity tools, client applications and third party software (spreadsheets and word processing) for workstations and servers.

ADP continues to target the institutional and international marketplaces. During '95, several acquisitions were completed which strengthen ADP's product offerings. Investment Software Systems specializes in the development and integration of real-time news processing. Global Treasury Information Services provides real-time fixed income, foreign exchange and money market information. Shark Information Services provides real-time market information and sophisticated analytics to 5,000 institutional users.

Michael Merola, Corporate Vice President, PaineWebber Incorporated (right) and Edward J. Powers Jr., ICS, Director, Account Management (left), discuss the implementation of ADP's Investor Communication Services' prospectus fulfillment service. PaineWebber joins the many investment firms who have benefited from ICS' newest service offering.

In July, 1995, Brokerage Services strengthened its international presence and capabilities by acquiring Wilco International. Through its GLOSS client/server system, Wilco offers global multi-currency clearance and settlement services.

NatWest Markets, North America, the corporate and investment banking division of National Westminster Bank PLC, recently became the first ADP client to use the interface that links the ADP securities processing system to the Wilco GLOSS system. This interface provides NatWest with an integration of the bank's international and domestic securities transactions, enabling the bank to create consolidated accounting records and regulatory reports.

ADP Investor Communication Services (ICS) is the largest independent provider of shareholder communications services in the U.S. and Canada. ICS handles annual and quarterly shareholder mailings and proxy processing for investors whose securities are left in "street name" with their brokerage firm or bank. In '95, ICS processed over 200 million shareholder mailings, up 17% from '94, for over 11,000 publicly held corporations and mutual funds. We also electronically scanned and tallied shareholder ballots representing 69 billion shares.

StreetLink is our unique laser printed alternative to expensive quarterly shareholder mailings. More than 100 corporations signed agreements during 1995. AT&T realizes significant cost and time savings by using StreetLink to promptly get its quarterly information to street- name holders. Investors will soon be able to access StreetLink via the Internet.

ICS recently acquired the remaining 50% of Proxy Edge from Fidelity Investments. Proxy Edge is innovative software that supports electronic voting while also providing real-time voting information to institutional shareholders in an effective and cost-efficient manner. During 1995, the number of Proxy Edge users has more than doubled. Future plans include electronic links to our other financial information services such as ADP's FS Partner Product.

Above, left to right: Pascal J. Mercurio, Chairman & CEO, U.S. Clearing Corp., Leslie C. Quick III, President, U.S. Clearing Corp., Peter Quick, President & Chief Operating Officer, The Quick & Reilly Group, Inc., and Thomas C. Quick, President, Quick & Reilly Inc. ADP works very closely with The Quick & Reilly Group, Inc., one of our largest clients, to develop and introduce new products to the marketplace. This strategic relationship enables both firms to remain competitive in the fast-paced financial services industry.