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					CSFB Product Control Process Reengineering RFP

March 4th, 2005
                                                                                                                         25 Broadway
                                                                                                                         New York, NY 10004
                                                                                                                         212 618 4000

March 4, 2005

New York,

Dear Ms xyzy:

Thank you for the opportunity to propose on CSFB’s Product Control Process Reengineering RFP. The attached document outlines our understanding of
the project requirements and our approach, as well as the project team resources and professional arrangements. We understand the importance of this
initiative to CSFB through our work with ISIS and other functions, and believe that Deloitte is uniquely qualified to assist.

We look forward to discussing our response with you further and to working with you on this critical initiative. If you have any questions or would like to
discuss this proposal further please do not hesitate to contact the undersigned. We would welcome an opportunity to arrange for a meeting with
members of the proposed team upon your request.

The undersigned, being persons duly authorized to represent the Supplier, states that this Request for Proposal has been read and understood, and that the Supplier agrees to be bound by the terms
and conditions contained within this RFP and proposal.

The individuals whose signatures follow represent and certify that they have the authority to represent and act on the behalf of Deloitte Consulting LLP, 25 Broadway, New York, NY 10004
“Company”. They recognize for themselves and for Company that the information contained therein the RFP, including Appendices, is CONFIDENTIAL and was released to Company to enable a
response to the RFP. Company shall not disclose such RFP information – or the fact that Company has been asked to submit a proposal – to a third party for any reason. Without limiting the
foregoing, Company is not authorized, without CSFB’s prior written consent, to publicize the fact that they are a potential Supplier to CSFB for PC Business Process Reengineering. The individuals
recognize for themselves and for Company that at the request of CSFB, the RFP and any copies thereof, either hard copy or electronic copy, shall immediately be returned to CSFB. The individual
also represents and certifies that the Proposal, including cost structures, was developed independently and with no collaboration of any other provider of firms and with no purpose of restricting
competition. The RFP to which this Proposal relates has been read and its requested terms, except as indicated herein this Proposal, will be accepted should Deloitte Consulting LLP be selected as
the provider of such Services to Credit Suisse First Boston LLC. Company certifies that such Proposal shall remain in effect for 90 days from Proposal due date.

Kindest regards,

Adam Broun             Ken Landis
Principal              Principal
CSFB has initiated an assessment to identify opportunities to maximize the operational efficiency of the Product Control area.
This initiative is critical to achieve cost and resource efficiencies, increase capacity and manage risk more effectively for the firm.

Based on preliminary assessments, it is CSFB‟s opinion that a significant opportunity exists to rationalize Product Control
processes, resulting not only in cost savings from reduced headcount, the simplification of processes, and the retirement of
outdated or redundant applications, but also in “best practice” business processes, which will facilitate new business initiatives,
improve internal client service, and create a more rigorous control environment.

CSFB plans to engage a partner to assist and collaborate on this reengineering assessment. The critical aspects in conducting
the assessment are to determine the current business process flows, document key processes, identify opportunities to
reengineer processes and recommend a migration plan to capture those opportunities. In addition during this phase, the team
will identify minimum levels of acceptable efficiency and control with the aim of providing a potential “menu” of reengineering

This document details Deloitte‟s response to your request for proposal. Our proposed approach and assessment framework
targets your specific needs and incorporates relevant insights from our experience in capital markets, accounting and regulatory
advisory and large scale reengineering efforts:
   Significant experience working with leading investment banks addressing complex business, operational, and technology
    challenges and opportunities
   Recognized advisory and implementation experience as a strategic partner on a number of prominent reengineering efforts
   In-depth product knowledge to accelerate and drive a targeted and realistic assessment aligned with your strategic goals
   Access to relevant industry benchmarks on product and process costs
   Ability to apply best of breed tools and processes (i.e, lean, six sigma, etc)
   Experience in developing innovative solutions that can simultaneously deliver operational efficiency and provide for a
    sustainable growth platform
   Combined expertise in accounting, control, risk and regulatory policies, practices and standards
       Table Of Contents

I.    Executive Summary

II.   Introduction & Marketplace Perspectives

III. Our Approach

IV. “Test Driving” the Approach

V.    Team Structure, Profiles & Fees

VI. Qualifications & References

VII. Available Tools

VIII. Appendices

IX. Required attachments:

          Supplier_Assessment_Questionnaire.doc

          CSFB_Master_Agreement.doc

I. Executive Summary
             Executive Summary

 Based on our industry experience and knowledge of CSFB we believe there is an opportunity to reduce the Product Control run
  rate by approximately 5%-12% per annum ($9-$21MM), within the scope defined, by reengineering the primary functions within the
  department. Significant additional savings might be possible with end-to-end changes in the operating and technology model
  across the trade cycle
 To identify and achieve these benefits we will examine and utilize the following levers:
            -   Policy/control adjustments
            -   Redesigning processes
            -   People effectiveness
            -   Organization re-design
            -   Selected system/technology enhancements
 Reengineering can deliver the additional benefits of enhanced control, risk management and the ability to support increased trade
  volumes and new products – a critical consideration for support of CSFB‟s business strategy
 To extend this analysis across all products/functions and develop the business case, implementation roadmap and migration plan
  we propose a twelve week diagnostic with product aligned workstreams
 The diagnostic would be conducted by a dedicated Deloitte team with extensive Product Control and reengineering experience.
  This team would be split between London and New York and supported by a number of product and subject matter specialists with
  deep product accounting experience
 The middle office cost driver and process mapping work conducted within the ISIS transparency initiative would be the starting
  point of our analysis, along with other pre-existing documentation and analysis (e.g., Sarbanes-Oxley process documentation)
 We measure our success on this engagement by CSFB‟s success: in identifying measurable, sustainable 2006 cost savings
  without compromising risk or client service

II. Introduction & Marketplace Perspectives
                      The Product Control Function Faces A Number Of Emerging Environmental

                                        Client                                           Control

                        New business models                                    Increased regulatory and
                        Integrated approaches to                                legislative scrutiny
                         client coverage                                        Increased demands on risk
                        Greater complexity of                                   management


                                                     Focus on Smartsourcing
                                                     Move from silo to
                                                      commodity processing

                                       People                                             Cost

                       War for talent                                          Lower margins
                       Rising salaries                                         Street expectations

1   eFinancial News , S. Butcher, 27 Jan 05
2 Balance   Sheet, M Mainelli Vol 12 2004

                  …As Well As Gaps Versus Peers


            Dimensions                         Industry Observations                                                    Industry Direction
                                                                                              Client Aligned               Matched Integration                     Functional Aligned

              Organization     Product Control is client versus functionally aligned          Possible End State
               Structure       Works closely with Finance as well as Trading

                               Financial Control is a key function (risk management, G/L     Full Suite                      Middle Office                          Limited Services
                                maintenance & reporting)
               Functions       Product Control includes data integrity, traders‟ P&L and

                                some Middle Office (counterparty, confirmations)
                                                                                              Dynamic/Forward Looking            Neutral                         Standard Procedures
                               Comprehensive risk management standards
                  Risk         Proprietary, customized tools and techniques                                                                     ?
               Standards       Continually evolving control and measurement processes

                                                                                              Low                                Medium                                         High
                               Minimized cost level

              Relative Cost    Allows business expansion without increasing risk                                                                        ?
                               Relative peer cost performance graded against MIB analysis

                                                                                              Globally Standardized            Centralized                                   Highly
                               Moving towards global Product Control systems that produce    System                                                                   Customized &
              Technology        P&Ls in a more standardized manner

                                                                                                                                                         ?              Fragmented
                               Single source/Operating Data Store for all data

                                                                                              Defined/                   Partially Defined/Tracked               Not Defined/Tracked
                               Continuous improvement of the Product Control function
              Performance      Measures performance with KPIs and stringent quality
               Measures         measures

                                                                                              High %                       Medium % Deployed                          No Deployment
                               Moved to low cost locations where risk levels permit          Deployed
              Deployment       Highest quality personnel in highest value added activities                                                                                      ?

              Internal Needs To Deliver The Firm‟s Overall Strategy Are Changing

            2002 – 2004 Focus Areas                     2005 Strategy                          Demands On Product Control
              “Staying Out of Trouble &   “Win Where We Choose To Compete By Delivering
                Generating Revenue”                 A More Focused Franchise”

                                                        Profitability /                    Provide lowest cost, scalable support
               Revenue Generation
                                               Focus on High Margin Products               Increase capacity/handle complexity

                      Industry                        Client Alignment/                    Improve internal client alignment
                     Mandates                          Segmentation                        Ensure accuracy of underlying data

                                                                                           Handle additional complexity/volume
              Staying Out of Trouble               Disciplined Risk Taking

                                                                                            without diminishing control

                     Structural                          Continuous                        Focus on continuous process
                     Changes                            Improvement                         improvement to extract efficiency

                                                                                           Prioritize IT/investment spend for

                     Reduction                                                              best return

                                                Improved Execution Through
                                                                                           Provide transparency of costs

                  Getting It Done                Alignment, Accountability &
                                                     Performance Metrics                   Implement measurable metrics

                                                  Execute Globally – Group
                  Deliver Locally                                                          Identify and support Group synergies
                                                Synergies Through Integration

                                               Enhanced Ownership Culture –                Release staff to focus on change
               People Management                                                            management initiatives
                                                   Incentives Alignment

Product Control Needs To Change To Deliver The Firm‟s Evolving Strategy
While Simultaneously Supporting Growth And Efficiency Initiatives

Product Control must absorb increased
 volume and additional complexity…

            Supporting Growth
   Higher PC Impact              Lower PC Impact                           Higher PC Impact                 Lower PC Impact

 ABS                          Alignment of Equity                     Capture Derivatives              Cross-CSG Synergies
 Build out Equity Prop         Research/Sector Focus                    Productivity                     Data Centers
  capabilities within cross    Cash Equities                           Establish Integration            Finance Deployment
  divisional prop group         Execution Platform                       Derivatives Structuring
 Build out Prime Services                                                                                GTI Transparency
                               Client Segmentation –                   Finance Control Efficiency       IPO7 & AD07 Efficiency
 Cash Equities – Plan ‟06      Europe                                   Improvement
 CDO                                                                                                      Programs
 CMBS                         Client Segmentation - US                GAD Transparency                 ISIS Singapore Migration
 Commodities Build Out        European Secondary                      ISIS MO & Coverage Model         IT Phase 2 Deployment
 Credit Derivatives            Credit Trading                          ISIS Tactical Efficiency         IT Tactical Cost Reduction
 Desk-based Positioning       Extend Trading                           Capture
 Derivatives – Plan ‟06        Analyst Function                                                          Non-IT Purchasing Spend
                                                                        ISIS Transparency
 Emerging Markets             FID Syndication Desk                                                      Phase 1 Deployment
                                                                        Mortgage Change Program           (ISIS & IT)
 Equity Syndication Desk      Global Top Account
 FID Strategic Book                                                    New Capital Markets
                                Strategy                                 Structure
 Growth in Asia, Japan and    Increase integration of FID             Product Control Improvement
  Australia                     Business Lines                          Unified FID/Equity
 High Yield                   Migrate HOLT small-cap                   Proprietary Group
 Insurance Structuring         coverage to sectors                     Vertical Integration of FIG
 Interest Rate Products       Options – Automated
 Rebuild Derivatives           Market Making
  Residential Mortgages
  Vertical Integration
 Tax Structuring

                                                                                      Reducing Cost/
                                                                                   Increasing Efficiency

                                                                            …while reducing cost without
                                                                         compromising risk or degrading control

                                                              - 10 -
                To Address The External & Internal Challenges Facing the Product Control Function,
                CSFB Has Launched A Number Of Initiatives Over The Past Three Years
         The reengineering
initiative must understand
     the implications of the                            Timeframe
       current book of work                                                                                          End State
                                    2002     2003         2004      2005            2006

           Current & Past PC Initiatives (Highlights)
                                                                                            Reengineer processing of repo instruments globally with the
                Repo Reeng.                                                                  goal of providing STP

              Opera for CSFBi                                                               Implement Opera data store for all CSFBi trades and positions

                                                                                            Ensure FAS 133 compliance by developing HAGAR to replace
                                                                                             existing tactical applications

           Panorama IRP – OTC                                                               Replace current FO P&L and risk management spreadsheets
            Risk Mgmt System                                                                 with a scalable risk management system

             BB Template Flow                                                               Roll out of BB technology to mitigate control and Op risk for
             Credit Derivatives                                                              Flow Credit spreadsheets

           Hydra – OTC Equities                                                             Provide a consistent and validated approach for generating
            Risk Mgmt System                                                                 P&L/Risk measurement within Equities

            FID Europe FOBO &                                                               Rationalize P&L/FOBO system through rollout of FIREPL and
            P&L Rationalization                                                              FIRE to selected areas of FID

                                                                                            Migrate UK Equity business to a new entity providing greater
           Entity 320 Elimination
                                                                                             capital management flexibility

            OTC Trade Capture                                                               Migrate OTC trade population to DTD/DOMAN infrastructure to
             (DOMAN/DTD)                                                                     increase transaction volumes

           New & Forthcoming Initiatives
              Product Control
              Reengineering                                                                 To be determined
                Initiative #1

                     …                                                                      …

                                                                    April 1st , 2005              Solution design and sequencing
                                                                                                  will build on and complement
                                                                                                  these initiatives

                                                                           - 11 -
                      Our Experience Suggests 5%-12% Savings Are Achievable Through Policy, Process
                      And Organizational Improvements That Are Not Dependent On Fundamental
                      Technology Change

                                                                                                                     Potential Initiatives
                                                                  Range of Cost Savings1                                   Lower Bound                                       Upper Bound

                                                   0%                                                   30%       Remove non-Product Control                 Require FO to stop writing
                                                        3%        5%
                 Policy/Control                                                                                    tasks from the Product Control              manual tickets
                  Adjustments                                                    14%         18%                   domain

                                                   0%                                                   30%
                                                     2%           5%
                                                                                                                  Eliminate redundant/duplicate              Automate workflow
                  Redesigning                                                                                      MO functions
                   Processes                                                                                                                                  Straight-Through-Processing
                                                                    9%                 15%

                                                   0%                                                   30%       Improve FTE allocation across              De-layer product support
                                                             5%             9%
                                                                                                                   product groups                              structure
            People Effectiveness
                                                                            12%         16%
                                                                                                                  Increase spans of control                  Deployment

                                                   0%                                                   30%       Re-align core MO functions to              Centralize product support
                Organizational                        3%               7%                                          business architecture                       services
                  Redesign                                                   13%              19%

                                                   0%                                                   30%                                                   Use of Single-Source of data
            System/Technology                       1%       3%
                                                                                                                  Interface development to
                                                                                                                   downstream applications                    Use of operational data store for
              Enhancements                                                               20%             30%                                                   cross-product data

                                                   0% $9MM                  $21MM                       40%       ‘Tactical‟ process and workflow            Technology platform rebuild
                                                             5%              12%
                Indicative Total                                                                                   improvements without                        intermixed with wholesale
                                                                                                  25%     40%      significant technological change            reengineering
                                                                                               $44MM     $70MM

                                                                                                                                     Lower Bound – Savings through process, policy and organizational changes
                                                                                                                                     without fundamental system enhancements

                                                                                                                                     Upper Bound – Transformational changes that have wide-reaching
                                                                                                                                     implications for technology and groups external to Product Control

1   Savings are estimated as a percentage of spend (CSFB Global 2005 Budget - $175MM). Savings opportunities are interconnected and overlap, therefore totals are not additive

                                                                                                                 - 12 -
           This Effort Will Improve The Way Business Is Conducted Within Product Control And
           Result In Benefits For Your Key Internal Clients And Partners

                                                                                    Enhanced financial control
                                                                                    Compliance with
                                                                                     regulatory requirements
                                                                                    Improved accuracy of
                                                                                     financial statements

                                                                                                                                       Credit Risk
                                                                                    Product Control,
                                                  Investment                                                   Legal &               Management, HR,
Trading                     Sales                                   Finance
                                                                      Finance        Operations &
                                                    Banking                                                  Compliance                 Corporate

                              Improved client                                                                      Strengthened             Accurate risk
                               service/delivery                                          Product                     compliance                exposure
                                                                  Internal Audit
                              Increased transparency in                                 Control
                                                                                                                    Improved data            Improved risk
                               sales commissions and                                                                 quality                   position
                               client revenues                                                                                                 awareness/
                                                                                                          Improved trade information          mgmt of
                                                                    Treasury           Operations         More timely settlement and          enterprise risk
      More precise and timely                  Better balance
       risk assessment                           sheet
                                                                                                          Reduced errors and trade
      Accurate product/                         management
       business P & L                                                  Tax             Technology
      Enhanced forecasting
                                                                                                                   Operational Data Store
                                                                                                                   Streamlined MIS
                                                                                                                   Better applications/system
                                                                                       Risk Mgmt                    reliability
                   Legend                                                                                          Reduced cost/heightened
          Suppliers/Inputs To PC                                                                                    efficiency
          Clients/Users of PC Data & Reports                                                                       Decreased maintenance of
                                                                                                                    multiple applications

   We have worked with many institutions to deliver programs which yield ancillary benefits across the organization,
    as well as identify and manage the risks that come with executing a large-scale transformation of this nature

                                                                         - 13 -
III. Our Approach
                     Stage 1 Disaggregates Your Current Processes, Identifies Inefficiencies
                     And Designs A Customized Solution To Fix The Gaps

                                                                    Go/No Go Decision

                                                        Stage 1                         Stage 2
                                                         Identify                       Implement

                             3-4 weeks                                     5 weeks                                   3 weeks

                            Examine                           ‘Unwind‟ and Assess                               Recommend
                          Build the Baseline                Explore and Validate Opportunities           Build a Roadmap and Prepare for

                                                                                                     In this phase, we assemble the selected
           The first weeks involve collaborative data    During this period, the broadest set of      opportunities, identify the resources for
            gathering to build on our existing CSFB     possible reengineering opportunities are      implementation and create the detailed
             fact base1 for future decisions and to     examined across all products to test and    plans needed to enable rapid transition to
               enroll a broad set of CSFB team           refine them, and to clearly understand      execution and delivery of savings. This
            members whose assistance and buy-in            the range of options and tradeoffs         period also provides time for additional
               for implementation will be critical             available to Product Control         communication and buy-in both internally
                                                                                                                   and externally

                  Our approach is designed to generate an implementable, fact-based set of tested reengineering opportunities,
                   with the implications and trade-offs for Product Control and other functions clearly understood and discussed

1See   appendix

                                                                             - 15 -
                                                                                                                                                                         Go/No Go Decision
                  Building An Accurate Baseline Is Critical To Locking Down Project                                                                                 Stage 1          Stage 2
                  Scope And Ensuring Credibility Of Analysis

                      Week 1                                                       Week 2                                 Week 3                               Week 4

Confirm What‟s „In and Out‟

 Mobilize project team                                                                                                              Strong CSFB team involvement
 Identify and confirm key stakeholders                                                                                              from all in-scope areas will help
 Hold working sessions (PC functional reps) to confirm initial scope of the project, e.g.
 functions/staff to be reviewed
                                                                                                                                     ensure ownership of process and
 Identify “big rules” to guide/filter future opportunities (e.g., 1 person per process for
                                                                                                                                     savings, as well as put any
 commoditized products, „4 eyes‟ principle, dedicated structured products group)                                                     concerns on the table early
Build The Baseline For Comparison

 Update financial data by function (e.g., cost center, product, location)

 Update headcount data (e.g., staff details – grades/location/salaries by function)
                                                                                                                                   Deloitte will leverage existing internal
 Facilitate sessions with key personnel
                                                                                                                                   organizational and CSFB Product Control
 Review organizational charts                                                                                                     financial knowledge to accelerate data
 List of open requisitions by function                                                                                            collection. Senior sign-off on the baseline
 Collect quality metrics by product (e.g., cycle times, error rates, adjudication time)                                           will help focus efforts on solutions later
 Create system topography charts

 Map baseline (e.g., by cost center, product, location)

 Verify and validate baseline with key stakeholders

Factor In Other Key Information (internal, benchmarks, etc.)
                                                                                                                               Collaborative effort with a joint CSFB/Deloitte
                                                                                                                                  team: will obtain the „coal-face‟ view of the
 Gather other organizational information as
 needed (e.g., ongoing initiatives, project
                                                                                                                                processes, escalate latent opportunities and
 updates)                                                                                                                      enable the team to aggregate and synthesize
 Gather external benchmark data on functions,                                                                                      common themes for broader applicability
 processes and roles to enable gap analysis
 and quantification of opportunities
                                                             Conduct One-on-One Process/Workflow Reviews
                                                             FID/Equities – Cash (NY)
                                                             FID/Equities – Cash (LN)
                    Preparation                              FID/Equities – Derivatives (LN)
                                                             Structured Products (NY)

                                                              Conduct interviews with managers at various
                                                               levels of the organization to better understand
                                                               the organization, its functions and processes
                                                               and begin pin-pointing issues

      Working Meeting/Decision Point
      Senior Management Progress Report

                                                                                                                 - 16 -
                                                                                                                                                                                                            Go/No Go Decision
                     A Methodical, Iterative Assessment Of The Current State Will                                                                                                                     Stage 1                Stage 2
                     Generate The Set of Possible Opportunities

                                                                                                “Unwind” and Assess
                Week 4                                         Week 5                                         Week 6                                   Week 7                                        Week 8

Disaggregate Processes And Workflows Into Core Components                                                                 “As-Is” Process Maps
                                                                                                                          With regional variances, handoffs,
 Trace and analyze workflows through each process and key controls                                                       high-level systems mappings etc.
 Identify and refine the underlying drivers of work and complexity and assess the ability to influence workflow
 (e.g., policy changes to drive down iterative review processes; IT „quick hits‟ to affect complexity)
 Validate mapping and drivers with process owners
                                                                                                                                                                              Full spectrum of opportunities
 Compare performance and contrast processes to industry practices
                                                                                                                                                                              ranging from „Quick Hits,‟ near-term
 Identify „Pain Points‟ - sources of inefficiencies, redundancies, extraneous work across functional lines, and
 control weaknesses (e.g., cross functionally by product, FTEs, and activities)                                                                                               requiring minimal investment/change
                                                                                                                                                                              and to longer term requiring more
                                                                                                                                                                              significant change or investment

                                              Test Alternatives And Generate Points Of View                                                                       Preliminary Assessment
                                                                                                                                                                  Initial reengineering set, first-cut
                                               Generate top-down and bottom-up savings hypotheses (top-down for areas of greatest                                priorities to share with
                                                relevance, bottom-up for clear breaks and consistencies, control faults, and other                                stakeholders
                                               Test opportunities with key process owners and management; refine set

                                               Build a more in depth aggregation and quantification of potential benefits, economics,
                                                and opportunity costs/tradeoffs (e.g., risk, control, interdependencies etc.)
                                               Develop and document an interim list of program improvement opportunities including
                                                „Quick Hits‟. Examples could include:
                                                 Identification of common data sources to integrate risk incident reporting across silos
                                                   and enhance hedge accounting processes
                                                 Develop a standard method for the implementation of GL/Financial Balance Sheet
                                                   controls from both a financial and US GAAP perspective
                                                                                                                                                           Validate Recommendations
                                                                                                                                                                                                                   High-Level „Future
                                                                                                                                                                                                                   State‟ Functional
                                                                                                                                                            Transform aggregated set of activities into “strawman” future
                                                                                                                                                            Review “strawman” structure with Functional
                                                                        Iterative process promotes buy-in among                                                representatives, validate assumptions and obtain feedback
                                                                            the functional managers related to the                                          Create model of “final” future state and high-level
                                                                             initiatives and mitigates resistance to                                           recommendations
                                                                                                                                                            Communicate findings to Steering Committee and external
                                                                                                 proposed changes                                              stakeholders (e.g., EXB, Finance)
       Working Meeting/Decision Point
       Senior Management Progress Report

                                                                                                                    - 17 -
                                                                                                                                                                                                     Go/No Go Decision
              Finally, A Detailed Roadmap Will Provide Management With The                                                                                                                       Stage 1         Stage 2
              Guidance Necessary To Execute Effectively Against Plans

        Week 8                                        Week 9                                        Week 10                                         Week 11                                    Week 12

                                                                                                            Strategic planning stage to ensure all
                                                                                                            aspects of the process are considered
                                                                                                            from Front Office to IT
              Outline Implementation
              “Waves” And Sequence                                                                             Implementation
                Work with CSFB to prioritize „waves‟ of implementation

                Assess and document implications for internal and external user                                                                   Detailed planning, continued organizational
                groups (e.g., organizational, technology, procedural, control,                                                                     commitment, and regular communication and
                reporting, regulatory, trade life cycle)
                                                                                                                                                   follow-up are crucial to realize the full benefits
                                                                                                                                                   of the implementation planning process

                                                             Develop Implementation/Migration Plan                                                                                     High-level Migration Plan
                                                                                                                                                                                       Implementation Plan
                                                                                                                                                                                       Performance Metrics
                                                              Develop high-level Migration Plan to execute on the recommended and prioritized process
                                                               improvement opportunities
                                                              Develop detailed Implementation Master Plan with dependencies

                                                              Identify initiative ownership, define roles and responsibilities of resources

                                                              Develop metrics and benefits tracking approach; identify supporting tools

                                                              Work with management team to ensure buy-in
                                                                                                                                                                                             Connect business case benefits
                                                              Develop organizational readiness plans
                                                                                                                                                                                             to other parts of the organization
                                                              Syndicate and adjust plans with external stakeholders

                                                                                                             Develop Supporting Business Cases
                                                                                                               Validate key business case inputs and assumptions with functional
                                                                                                                representatives/process owners
                                                                                                               Build business case (financial and non-financial) for priority initiatives

                                                                                                               Create tracking and reporting infrastructure for progress and achievements

Working Meeting/Decision Point
Senior Management Progress Report

                                                                                                           - 18 -
                                                                                                                                                                                                Go/No Go Decision
                 If A Go Decision Is Reached, Activities Transition To Execution Of
                                                                                                                                                                                           Stage 1                Stage 2
                 “Quick Wins” And Detailed Design For High Priority Projects

      First 3 months                       Next 3 months                                                Wave 2                                                                 Wave 3

Manage Program, Facilitate Change, Track Outcomes
 Establish program management office

 Implement progress tracking system

 Develop and implement reporting tools and metrics

                                                                                     Teams focused on a
                                                                                                                                               NOTE: ILLUSTRATIVE
Detailed Designs
For „Quick Wins‟
                                                                                     small number of high                                      NOT WITHIN SCOPE OF
                                                                                     priority initiatives
 Develop detailed plans
                           Detailed Design
                                                                                     across BUs/platforms                                        THIS RESPONSE
 Develop functional design document

                      Begin Roll-out of „Quick Wins‟
                      Execute against plans

 Begin Conceptual Designs                                                                                                   Continue “waved” implementation approach:
 For Priority Projects
                                        Conceptual Design                                                                    For broad process improvements (e.g.,
 Design End-State business architecture                                                                                      structured trade review consolidation), pilot in
 Syndicate with stakeholders                                                                                                 select platforms/geographies
                                       Detailed Designs For                                                                  Transfer knowledge across BUs, platforms, and
                                       Priority Projects                                                                      geographies
                                                         Detailed Design
                                     Reconfirm business requirements

                                     Develop functional specifications and design documents
                                                                                                                                                                                Periodically re-evaluate
                                     Develop rollout plans
                                                                                                                                                                                plan and re-sequence to
                                                                                                                                                                                maximize value
                                                         Begin Pilot/Rollout Wave 1

                                                          Execute against plans

                                                                         Design Wave 2                                  Pilot/Rollout Wave 2
                                                                          Develop functional specifications
                                                                                                                    Execute against plans
                                                                          and designs documents
                                                                          Develop rollout plans                                                Design Wave 3                          Pilot/Rollout Wave 3
       Working Meeting/Decision Point                                                                                                           Develop functional specifications       Execute against plans
                                                                                                                                                and designs documents
                                                                                                                                                Develop rollout plans
       Senior Management Progress Report

                                                                                                               - 19 -
IV. “Test Driving” The Approach
                  Our Approach Is Best Demonstrated By Working Through An Example

Today: Apr 4, 2005        Today: April 25, 2005     Today: May 9, 2005         Today: May 16, 2005      Today: May 27, 2005        Today: June 17, 2005
Monday                    Monday                    Monday                     Monday                   Friday                     Friday

   Kick off the project     Work with team to        Figure out top down            Work with team to       Meet with team to         Build the financial
                            finalize the baseline        opportunities               build bottom up     prioritize and sequence        business case
                                                                                         initiatives          opportunities

  Project Day 1            Project Day 21             Project Day 35                Project Day 42        Project Day 56             Project Day 67

1See   appendix

                                                                           - 21 -
                                                                                                                                                                                                                                                                                                                                                                                                              Today: April 25, 2005

                                                                                                                                                                                                                                                                                                                                                                                                               Day 21: Finalize the
                           Day 21: Derivatives Baseline Completed With Areas Warranting Further                                                                                                                                                                                                                                                                                                                     baseline

                           Scrutiny Identified
Opportunity identification from both a process/control and cost perspective will have been driven out
across the products

                                                             Derivatives PC Data Elements                                                                                                                                            Day 1: April 4th
                                                                                                 Org                                                                                 Head                         Process                                                                                                       External
                                                                                                                         Financial                                                                                                                                      Tech               Controls                                                                         Metrics Bottlenecks
                                                                                                Charts                                                                               count                         Maps                                                                                                        Interaction
                                                              D.59H CTRS FID IRP Exotics
                   The data collection effort                       Ahmed Kubba                                                                                                                                                                                     
                        will be significantly                 D.80H CTRS FID IRP Vanilla
                  streamlined by leveraging                         Ahmed Kubba                                                                                                                                                                                     
                                                                D.20H CTRS FID Europe
                               existing data                          Amin Bilal                                                                                                                                                                                    
                                                             D.49HX2A NY FID Prod Ctrl IRP
                                                                      Sui-Pak Ho                                                                                                                                                                                    
     Front Office/Back Office
          Reconciliation                 2
            Handoffs – 1                 A value stream
            Controls – 3
           Complexity - x                map will identify                US Credit Derivatives & IRP: D.49HX2A                                                                                                                                                                                                                                                              Day 21: April 25th
     Processing Time – 10 mins
        Set Up Time – x mins             bottlenecks and             UK Credit Derivatives: D.20H
                                                                          Location: London                                                                                                                                                                                                                                                                                 Day 21: April 25th
         Queue Time – x hours
                                         control breaks              IRP: D.59H/D.80H
                                                                  UK Location: London
                                                                          Owner: Ahmed Kubba                                                                                                                                                                                                                                                                       April 25th
                                                                                                                                                                                                                                                                                                                                                           Day 21: Financial
                                         as well as                                                                                                                ts                                                                                                                                                                                 Create                               Analysis
        Cash Reconciliation                                       Location: London Kubba Data Integrity
                                                                     Owner: Ahmed 38
                                                                          Headcount:                                                                                                                                                                                                     Management
                                         identifying                                                                                                                &                                                        Validation
                                                                                                                                                                                                                                                                                          & Change
                                                                                                                                                                                                                                                                                                                                                      Trial                                &
            Handoffs – 1                                                                                                                                       Adjustmen                                                                                                                                                                              Balance                              Reportin
            Controls – 0                 opportunities for          Headcount: Kubba
                                                                  Owner: Ahmed 38                                                                                  ts                                                                                                                                                                                                                      g

                                                                                                                     Structured Trade Reviews
           Complexity - x
                                         improvement              Headcount: 38

                                                                                                                                                                                                                                                                                           Training & Development
      Processing Time – 7 mins

                                                                                                                                                    Provision & Valuations
         Set Up Time – x mins

                                                                                                                                                                                                                                                                                                                               Create Trial Balance
                                                                                                                                                                              GAAP Adjustments
         Queue Time – x hours

                                                                                                                                                                                                                                  Account Ownersip

                                                                                                                                                                                                                                                     Model Validation

                                                                                                                                                                                                                                                                                                                                                         Data Collection
                                                                                                                                                                                                 P&L Validation

                                                                                                                                                                                                                                                                                                                                                                                              MIS Reporting
                                                                                                                                                                                                                                                                                                                                                                            P&L Analysis
                                                                                                                                                                                                                  Price Testing

         I/C Reconcilliation

                                                                                                        Other Recs
            Handoffs – 1

            Controls – 0
          Complexity - x
      Processing Time –5 mins
         Set Up Time – x mins
         Queue Time – x hours

                                                                               Size            3.3 2.9 8.6                                      5.9                          1.8                 2.2 1.6 0.6 0.2                                                          2.3             0.5                       1.4        0.9                       0.7                3.0              2.3
           Price Testing

           Handoffs – 0
                                        3                               Vol. Sensitivity (%)   71      82            98                         72                           74                  78               90              61 100                                  80              80                        76         78                        63                  80              80
            Controls – 2
          Complexity - x                Detailed product                   Risk Profile        X        X            X                              X                        X                   X                X               X                  X                      X             X                         X          X                          X                     X            X
     Processing Time –18 mins
         Set Up Time – x mins          specific baselines
         Queue Time – x hours
                                        will be created to              Control Procedures     X        X            X                              X                        X                   X                X               X                  X                      X             X                         X          X                          X                     X            X
Structured Trade Reviews (Exception)
            Price Testing
                                          determine pain
Structured Trade Review (Exception)
         Criteria: Deal size            points and major               Business Constraints    X        X            X                              X                        X                   X                X               X                  X                      X             X                         X          X                          X                     X            X
         % exception: 20%
            Handoffs – 0
                                           areas of focus
                                                                           Tech enabled        X        X            X                              X                        X                   X                X               X                  X                      X             X                         X          X                          X                     X            X
            Controls – 2
           Complexity - x
     Processing Time –18 mins                                           External Interaction   X        X            X                              X                        X                   X                X               X                  X                      X             X                         X          X                          X                     X            X
          Set Up Time – x mins
         Queue Time – x hours

                                                                                               - 22 -
                                                                                                                                                                   Today: May 9, 2005

                                                                                                                                                                    Day 35: Top Down
             Day 35: Hypotheses Developed To Reduce The Cost Of Structured Trade                                                                                      Opportunities

             Reviews Within Derivatives
Using a top-down approach, the baseline is unwound around the primary cost reduction levers to identify
areas with the biggest “bang-for-the-buck”

                                                      Structured trade reviews have the
                                                      highest sub process headcount                                 5
                                                      allocation and one of the highest
                                                                                                                     The cost of structured trade reviews
                                                      variable % across derivatives
                                                                                                                     should be able to be reduced by:
                                                      warranting further investigation
                                                                                                                         1) Reducing the cycle time
                                                                                                                         2) Reducing the complexity
                                                                                                                            associated with the STR

                                                             Decrease Workflow Cycle Time                          Decrease Complexity of Review Process

                                                 Potential                                                   Potential
                                                  Impact                       Hypothesis                     Impact                      Hypothesis

                           Redesigning/                      Redesign data capture to reduce the                         Reduced number of breaks will reduce
                           Reengineering                     number of breaks                                            complexity and time spent on reconciliations
                          Elimination of Low
                                                             Limit number of ad hoc/redundant reports                    Restructure the STR work flow process
                        Value Added Activities
                                                             Limited impact                                              Consolidate like STR activities
       Organizational       Consolidation
                             Relocation                      Limited impact                                              Limited impact

                           Span of Control                   Limited impact                                              Limited impact

          People                                                                                                         Reduce errors by better matching resource
                            Resource Mix                     Limited impact
                                                                                                                         skill levels to value added activities
                                                                                                                         Reallocation of specialists‟ time to
                              Utilization                    Limited impact
                                                                                                                         proportional focus areas
                                                             Increase risk filters and customize risk
                           Control Policies                                                                              Limited impact
       Risk/Policies/                                        thresholds for individual derivative products
        Procedures                                           Modify FO operating procedures to reduce
                           Service Policies                                                                              Standardize FO adjudication procedures
                                                             the number of breaks
                          Quick Wins/BoW                     Align technology processing to workflow                     Streamline back through front office
                            Modification                     management                                                  interface applications
                                                             Implement single source of data to reduce                   Operational Data Store will enable high
                             Large Scale
                                                             the number of breaks                                        integrity data extraction
                             Key hypothesis warranting further investigation      - 23 -
                                                                                                                                                                                                 Today: May 16, 2005

                                                                                                                                                                                                 Day 42: Build Bottom
                                                                                                                                                                                                    Up Initiatives

                                     Day 42: Opportunities For Interest Rate Derivatives Have Been Outlined
Applying the top-down hypothesis from a bottom up perspective identifies the practical implications of a
change                                               Key STR hypotheses developed from a derivatives
                                                                                                 perspective are applied against Interest Rate
                                                                                                 products to develop specific opportunities

   STRs within Interest Rate Derivatives                                         Decrease Workflow Cycle Time                                   Decrease Complexity of Review Process
    8.8 FTEs                                                                              Hypothesis 2                                  Hypothesis 1          Hypothesis 2            Hypothesis 3
    96% Variable                                                    Hypothesis 1                                  Hypothesis 3
                                                                                            Modify FO                                    Redesign STR         Consolidate STR         Align resource
    >100 per month                                                   Risk filter                               Tech modifications
                                                                                            procedures                                     workflow              activities                 mix
                                                                                        Standardize spread-
                                                                                                                Expedite Panorama                            Consolidate IRP STR     Utilize low cost
                                                                                        sheets, adjudication
                                                                                                                rollout enforcing FO   Implement STR         rec/booking review      labor to conduct
                                                  Opportunity     N/A                   process. Book
                                                                                                                migration from         tracking process      with other products     recs/ booking
                                                                                        trades on server/no
                                                                                                                spreadsheets                                 subject to STRs         reviews
                                                                                        manual tickets
                                 Booking           Additional                           Cost of change          Scarce technology      Scarce technology     Additional handoff      Must maintain
                                  Review         Considerations                         management              resources              resources             created                 quality control
                                  (50%)          Control & Risk                         Reduced                 Reduced control        Revisit key control   Heavy reliance on       Increased
    Disaggregate STR Process

                                                 Considerations                         operational risk        cycles                 checkpoints           key personnel           operational risk
                                                                                        5% - 15% reduction      10% - 30% reduction Reduce STR               Centralized function
                                                                                                                                                                                     Cost per FTE
                                                     Impact       N/A                   of STR cycle time       of STR cycle time   processing time;         reduces overlapping
                                                                                        due to fewer breaks     due to fewer breaks increased capacity       FTEs
                                                                  Adjusting risk filters                                                                   Limited consolidation     Utilize higher cost
                                                                  will drive down                                                      Implement STR       opportunities due to      labor to conduct
                                                  Opportunity                            N/A                    N/A
                                                                  cycle times for                                                      tracking processing required product          value add
                                                                  vanilla IRPs                                                                             specific knowledge        activities

                                                                Risk expertise
                                 Valuation         Additional
                                                                required to ensure      N/A                     N/A                    Technology options N/A                        N/A
                               Model Review      Considerations
                                                                control adequacy
                               & Accounting
                                  (50%)          Control & Risk Increase risk filter                                                                                                 Increased
                                                                                        N/A                     N/A                    Increase controls     N/A
                                                 Considerations checks                                                                                                               operational risk

                                                                                                                                       Facilitate enhanced                           Targeted use of
                                                                  2% - 10% reduction                                                                                                 high cost labor
                                                     Impact                          N/A                        N/A                    interactions with   N/A
                                                                  of STR cycle time
                                                                                                                                       the VRG                                       Enhanced morale

                                                                                                                        Bottom-up initiatives need to be aggregated across
                                                                                                                 7      products, geographies, and entities. Validating and
                                                                                                                        assessing the impact of the aggregated opportunities
                                                                                                                        will facilitate the sequence of implementation
                                                                                                               - 24 -
Successful Execution In Stage Two Of The Reengineering Initiative Will Be Predicated
On The Foundation Built In Stage One

                         Waves must be planned in short, manageable intervals
                         Resources must be committed flexibly so they can „shrink‟ or „grow‟ depending on the
                          requirements of the task
Operational Execution
                         Global variations must be understood and accommodated
                         Technology implications must be addressed and managed (e.g., prioritization of the IT
                          Book of Work)

                         Short-term and long-term savings targets must be clearly defined
                         Clear performance metrics to track progress are required
                         Stick to the overall plan; adjustments (e.g., milestone slippage) will impact the
                          business case

                         Customer impacts must be understood
                         Success is predicated on key managers buying into and actively championing
                         More comprehensive reengineering requires a multi-disciplinary approach in which
                          FO, Product Control, Operations, IT and Financial Control act as an integrated,
                          cohesive team

                         The overall business strategy must drive the areas of focus for this initiative so that
      Strategy            reengineering enables the development of a „clean‟ platform to support the aggressive
                          business growth that CSFB plans

                         Timing and composition of waves should be determined by the need to balance
                          speed, cost savings and risk
  Risk Management        Demands of regulatory, tax and legal requirements must be factored in
                         All moving parts of the plan must be synchronized before finalizing implementation

                                                 - 25 -
V. Team Structure, Profiles and Fees
                    Proposed Team Structure

                                                               Governance Committee

                                                            TBD – Primarily PC representatives

                                                                                                                       Make key decisions, sign-off on major deliverables
                                                                                                                        and act on recommendations
                                                                                                                       Identify and assign appropriate resources to the
                                                       Project Oversight – „Setting Direction‟                          assessment
                                                                                                                       Deloitte‟s cross-functional support to be leveraged
                                                                                                                        as needed – from reengineering „heavy lifting‟
                                                                                                                        Adam) to deep product control expertise (Lisa) to
                                                                                                                        audit/risk advisory (Sal) to day-to-day CSFB
                                                                                                                        navigation acceleration (Liz)

    Meet objectives within timing and
                                                         Execution Team – „Getting It Done‟
                scope outlined by the
                   Project Leadership
       Manage day-to-day activities –                         Global Project Manager(s)
       project communication, analysis                                                                                                  Own the overall financial and
          and deliverable development                                                                                                    process models
      Develop recommendations and                                                                                                      Drive consistency of approach
                drive issue resolution                  NY                                   London                                      across products and regions
                                               NY Team (3-4 CSFB)                     London Team (3-4 CSFB)                            Aggregate and prioritize
                                                   1 Manager (D)                           1 Manager (D)                                 opportunities
                                                1 Sr. Consultant (D)                    1 Sr. Consultant (D)
                                                    1 Analyst (D)                         1 Consultant (D)
 Resources with deep knowledge of a                              Product Specialists
               particular product area
   Work hand-in-hand with core team              FID/Equity Cash & Derivatives/Structured Products (D)
   during interviews, workshops and to
       formulate and test opportunities                          Functional Specialists
                                                                                                                                        Provide additional deep
                                          Audit, Tax, Regulatory, Risk, Quantitative, Reengineering & Valuation (D)
                                                                                                                                         expertise on specific issues and
                                                                                                                                         questions as needed

  D – Deloitte

                                                                             - 27 -
         Fees, Expenses, Deloitte‟s Team And Diversity

              This project will be led by Deloitte Consulting LLP, with assistance from Deloitte & Touche and affiliated entities as
               needed to bring the right resources, expertise and experience to this effort
  Fees        We estimate our fees for this project to be xxMM. A breakdown of our levels and daily rates is on the following page
              We are committed to continuing our relationship with CSFB. We believe our pricing reflects the market value of our
               services, and would be pleased to discuss this pricing proposal with you

              We will make every effort to minimize expenses, and believe they will not exceed 15% of our fees unless extensive
Expenses       international travel is required. Please note that the teams working in London and New York will be staffed by
               practitioners from those countries. Actual expenses will be charged as incurred

              Oversight for Deloitte‟s team will be by Adam Broun, Ken Landis, Liz Healy, Lisa Choi & Sal Davide leveraging relevant
               expertise as needed throughout the process
              Shahzad Shah and Nick Blake will form the on-site, day-to-day leadership in New York. We have proposed a team split
               between New York and London, aligned with CSFB‟s resources and products
 Team         The remainder of our team will be assembled before commencement of the work and will bring a blend of analytical,
               process mapping and reengineering skills, along with in-depth product knowledge for each of CSFB‟s businesses and
               subject matter expertise on matters such as regulatory requirements, valuations and operational risk.
              We have based our team structure on our understanding of the RFP and other provided information. We are happy to
               discuss alternate team structures and how to make them effective

              We are pleased to present a team that reflects the diversity of our Firm
              The Supplier Questionnaire describes our commitment to diversity and inclusion in greater detail

                                                               - 28 -
          Engagement Fee Summary

As requested in the RFP, outlined are the rates used to calculate our pricing estimate. In recognition of our
relationship with CSFB, these rates continue to reflect a significant discount from our standard rates. Our rates are
based on a 10-hour day; our custom is considerably greater.

                                                         Level             Daily Rate ($)

                                                   Partner / Principal

                                                   Senior Manager

                                        New York

                                                   Senior Consultant



                                                   Senior Manager


                                                   Senior Consultant


Our estimate includes leadership and oversight from our partners and principals. We generally dedicate time over
and above that estimate at no additional cost in order to provide the quality of service that CSFB has come to
expect from Deloitte.

                                                                  - 29 -
VI. Qualifications & References
          We Have Significant Experience In Defining And Implementing Programs At CSFB

                                                                Sample Recent Engagements

                           Performed a comprehensive impact assessment of
   Plan ‟06 Impact                                                                            Product Control      Assisted with the development of the Product
                           the Front Office Plan ‟06 initiatives on the resources
    Assessment                                                                                 Strategic Plan      Control Strategic Plan and book of work for 2004
                           and costs of the IT, PC and Ops organizations

                           Conducted a review of the IT and ISIS organizations
    ISIS Business          that included mid-year performance to budget, „deep                                     Assisted with the management, structuring, and
                                                                                             Records Retention
       Reviews             dive‟ analysis of the project portfolio and detailed                                    execution of CSFB‟s IT Record Retention Strategy
                           org and work driver analysis

                           Developed comprehensive transparency reports
                           detailing progress towards goals, costs, headcount,                                     Developed business requirements and transaction
 ISIS Transparency                                                                             Trade Services
                           project and work driver information to the Front                                        walk-throughs for Trade Services

                           Performed an in-depth cost driver analysis of the                 Business Continuity   Developed a global operating model for BCP that
  Middle Office Cost
                           Middle Office organization in the Americas and                    Planning Operating    defined roles and responsibilities and established
     Driver Analysis
                           Europe                                                                  Model           governance

                           Developed a global data center strategy focusing on
                                                                                                                   Performed an in-depth assessment of the
Data Center Strategy       BCP, DR and recent regulatory environments. Also
                                                                                                  Basel II         completeness of the implementation requirements
  & Implementation         assisted in setting up the PMO for the
                                                                                                                   and technology solution for Basel II reporting

                           Developed the structure, vision and the processes                                       Established a program management office to
                                                                                             Mortgage Change
     IT Strategy           required to support the launch of CSFB‟s IT                                             monitor and track the execution of the Mortgage
                           organization                                                                            Change Program

                                                                                                                   Assisted the COO of HR in establishing a program
                           Developed a global Infrastructure strategy for the
Infrastructure Strategy                                                                           HR COO           management office and in baselining strategic
                           newly appointed CTO

                                                                                                                   In support of the IT Deployment initiative, we
                          Performed a comprehensive impact assessment of
  European Support                                                                                                 conducted a resource inventory of 4,000 IT and
                          and defined initiatives to support Plan ‟06 for                      IT Deployment
      Strategy                                                                                                     infrastructure positions and developed detailed
                          European FA&O
                                                                                                                   “wave” plans for deployments

                          Assisted in completing regulatory application and                                        Analyzed and documented daily overnight
  Broker/Dealer Lite      initial SEC review. Developed technical policies and                 Prime Services      processing cycle and established service level
                          procedures                                                                               agreements

                                                                                    - 31 -
                 We Have Built A Number of Relationships Across Various Functions Based On Project
                 Delivery At CSFB And Have Recently Worked With Multiple Managers Across Product
                 Control During The Middle Office Work Driver Project

                      IT/ ISIS/ORM            ISIS - Product Control          FA&O - Europe

                                                                             Financial Control



                               IT                                           Corporate Services




Blue = CSFB Project Sponsor
                                                       - 32 -
         Recent Highlights Of Our Work In The Global Financial Services Sector

                         Process                                                                     Other Back                    Migration
                                        Operational                                    Controlling                Technology
                                                        Cost Reduction       Banking                   Office                      Planning/
                      Re-engineering   Transformation                                  Functions                  Optimization
                                                                                                     Functions                   Implementation

National Commercial
Bank #2

                                                                         - 33 -
                     Qualifications – Product Control

                     Multi-Line Global Investment Bank - NY                                                                           Global Investment Bank

  Deloitte was engaged to conduct a review of a global investment bank‟s                                   For a global investment bank, Deloitte was engaged to assist in
  Product Control function, operational and valuation models, and work                                     documenting the firm's risk and pricing models to assure they met the firm's
  processes for the equity derivatives business.                                                           CSE readiness initiatives. Products included fixed income derivatives,
                                                                                                           MBS and equities.
   Assisted Product Control in scheduling, managing and completing their                                  Results:
    annual model review                                                                                     Completed all model documentation within 60 days and submitted to
   Established baseline valuation model review procedures                                                   senior management
   Set annual review standards                                                                             Established model standards still in use
                                                                                                            Ensured/documented that risk and pricing models were CSE ready

                     Global Investment Bank – NY & London                                                                             Global Investment Bank

  For a global investment bank, Deloitte was engaged to conduct an                                         Senior Management engaged Deloitte to assist with a gap analysis of
  evaluation of whether the firm should re-enter the physical and financial                                business metrics for Product Controllers. We collected source
  energy trading markets. The Project Sponsor was Global Head of Product                                   documentation across the firm and created an overall Product Control
  Control and the firm‟s considerations included the expansion of trading                                  metrics inventory. The inventory was coded and placed in a database for
  operations, risk control and product management.                                                         integration into an OLAP tool that was implemented by another area in the
                                                                                                           bank. Our goal was to obtain consolidated enterprise wide reporting of key
  Results:                                                                                                 risk variables to support senior management reporting needs.
   Created a strategy document for Product Control‟s expansion
   Developed a business case and metrics that indicated the process was                                      Results:
    viable                                                                                                     Reviewed key metrics and created standardized views by metric
   Created a high level infrastructure and roadmap for conducting the new                                      definition, reporting type, business, and region
    trading activity                                                                                           Benchmarked business units against business group metrics i.e. Fixed
                                                                                                                Income, Equity, OTC
                                                                                                               Calculated metrics gaps by business unit for eventual standardization of

Note: Due to confidentiality agreements signed with client we are not able to provide some client names on qualifications
                                                                                                     - 34 -
              Qualifications – Process Improvement & Cost Reduction

Deloitte was engaged to design and implement a strategic cost reduction                   Deloitte was engaged to redesign and improve IT and Operational
initiative to remove 350m Yen from the cost base of the operations                        functions. This included: the replacement of outdated legacy systems;
function. A 5 step approach to the design was used, capturing current                     elimination of duplication and unnecessary reconciliation and manual
operating model and process, base-lining and developing performance                       processes; and automation of information reporting.
metrics. We were then engaged in iterative re-design of process and
Results:                                                                                   Reengineered infrastructure and processes from settlement systems to
                                                                                            General Ledger
 Streamlined and re-engineered processes (segregating simple/complex
  tasks, reducing rework and managing waste in linear processes)                           Consolidated functions and processes from multiple accounting streams
                                                                                            to one integrated system utilizing SAP enabled re-engineering
 Introduced performance management techniques across the
  organization (people, process and systems performance management)                        Restructured the role of finance to encompass business support and
                                                                                            analysis rather than solely reporting of historic information
 The joint client/practitioner team re-designed the operations group in just
  under 12 weeks enabling the implementation team to deliver against the
  new operating model and processes in 14 weeks

Deloitte undertook a significant cost reduction exercise for overall                  Deloitte was engaged to redesign and improve IT and operational functions
operations, seeking to reduce the cost base by around £175m and reduce                which included enabling enterprise-wide shared services, enterprise-wide
the workforce by up to 25%. Deloitte worked closely with the client in a              management information strategies, and improved cost identification, cash
highly collaborative manner to rapidly identify and deliver tactical/quick win        management, reporting and procurement. Our work resulted in significant
results.                                                                              cost reductions.

Results:                                                                              Results:
 Savings of £177m delivered within 12 months:                                         Completely reengineered the finance function including cash
       IT Services £80m                                                                management, procurement and sourcing, general accounting, cost
       Procurement: £21m                                                               management, and reporting and analysis
       Support Services: £49m                                                         Measurable recurring annual benefits were estimated to be over 100 %
                                                                                        of the total project cost
       Customer Services: £27m
 All savings externally audited – final audited result was £201M

                                                                                 - 35 -
                     Qualifications – Process Improvement & Systems Implementations

    Deloitte was engaged to assist senior management in the reengineering of                                   Deloitte implemented a new treasury and derivatives system:
    BNP-Paribas Capital Market activities. This involved implementing a new
                                                                                                                Merrill Lynch bank - Deloitte conducted a front-to-back implementation
    back office system to manage derivatives in a centralized manner.
                                                                                                                 for the treasury activity products including bonds, money markets, loans,
                                                                                                                 swaps, CDs, commercial paper and repos
                                                                                                                Merrill Lynch - Deloitte provided implementation assistance for a Summit
    Focusing on the reengineering of Back Office processes resulted in:                                          system installation to provide front-to-back office support for emerging
     Integration of all derivatives products in Murex                                                           market bond trading and foreign exchange business globally
     Integration of Murex Back Office into the BNP-BFI environment
      (Accounting, Risk, FO systems...)
     Reengineering and redefining back office processes and procedures                                         Provided full program and project stream management
     Creating a new front-to-back office organization                                                          Designed business processes, developed and executed acceptance
     Rollout: Defined the go live strategy and migration plan. Successfully                                     tests and implemented plan (including validation of FX module newly
      managed the migration into Murex G2000                                                                     added by Summit for Merrill)
                                                                                                                Set-up accounting and testing

                               Global US Investment Bank                                                                                 Supranational Bank

    As part of a strategic project, Deloitte provided assistance for selection and                             Deloitte was appointed to implement a new front to back office organization
    development of a global multi-entity derivatives trading system capable of                                 plus accounting solution for treasury, fixed income and derivatives
    supporting all major types of derivatives.                                                                 (IRD,CD) activities.
                                                                                                               The large-scale project covered virtually all departments of the bank over
    Results:                                                                                                   an 18 month period, and involved a significant level of process re-
     Phase I - strategy feasibility study which considered high level business                                engineering.
      systems architecture, detailed business case, application architecture,
      detailed development and migration planning, detailed functional design,
      business process redesign and sizing and analysis of technical options                                   Results:
     Phase II - detailed evaluation of various risk management software                                        Provided program and project stream management; defined user
      packages to assess their functionality against the requirements identified                                 requirements and enhancements to the software; designed a new target
      in phase I. This focused on information technology issues, including                                       organizational structure and redefined transaction processes
      leading edge analysis of the use of the Sybase database product                                           Configured and integrated SUMMIT and SAP; built interfaces to the
     Phase III - provided implementation assistance, detailed design and                                        existing data warehouse and risk applications; conducted testing and
      architecture planning                                                                                      user training
Note: Due to confidentiality agreements signed with client we are not able to provide some client names on qualifications
                                                                                                      - 36 -
                     Qualifications – Operating Model Transformations

                                                                                                                                       Global Investment Bank

   Deloitte was engaged by ABN Amro to design a global operating model to                                      Deloitte was engaged to set up the Umbrella PMO for the equities and fixed
   combine FX and Money Markets. Key objectives included reducing cost,                                        income Operating Model Transformation Program. Priorities included
   enhancing transparency, driving consistency of attributable activities and                                  short-term focus on optimizing cost reduction and improving internal
   adding missing mission critical capabilities. Our work helped define a                                      controls and a medium-term focus on service improvements (both internal
   global operating model and standardized set of global processes.                                            and external). The Program was responsible for generating a minimum of
                                                                                                               €212 million savings by the end of 2005.
   Results:                                                                                                    Results:
    Increased efficiency with centralized desk management and more                                             Refocused equities and fixed income to create a robust, competitive and
     consistent pricing                                                                                          cost-effective platform
    Increased central control and reduced operational risk (simplified the                                     Defined mapping rules to determine interim location of functions in the
     current operating model, provided greater transparency for local trading                                    operating model
     activities)                                                                                                Devised business architecture principles underpinning the operating
    Reduced cost of operational infrastructure (centralized operational
                                                                                                                Conducted functional mapping of the operating model including a FTE
     systems and back office)
                                                                                                                 analysis to support the design effort
    Provided for costs avoidance and increased flexibility to take advantage                                   Repositioned the group to take advantage of future growth
     of future market opportunities

    Deloitte was engaged to develop a complete operating model re-design for                                   Deloitte was engaged to develop a Target Operating Model to lead re-
    a major banking division. The new model was designed to facilitate the                                     integration of credit cards businesses into to the group in combination with
    migration of the division to a new operating platform and several internal                                 lending as part of a new Consumer Finance division. Analyzed the two
    functions to new locations. Deloitte collaborated closely with client                                      prevailing operating models for loans (Bank of Scotland Direct and Halifax
    management to prioritize actions, make decisions and resolve major issues                                  loans) and credit cards and created a financially viable model.
                                                                                                               Facilitated workshops with key participants so consolidation opportunities
    Results:                                                                                                   could be identified and quantified. In a validation phase, we investigated all
     The Target Operating Model became the focal point of all change, in                                      identified opportunities. Working in teams with the client, we developed
      particular the complex re-organization of processes, functional                                          business cases and a high level implementation plan.
      responsibilities and costs over several sites
     The TOM enabled all involved to clearly understand the blueprint for the                                 Results:
      future, and for management to clearly see how the cost imperatives                                        Identified consolidation opportunities of £21m
      would be met through the re-organization                                                                  £20m in cost reduction was subsequently realized

Note: Due to confidentiality agreements signed with client we are not able to provide some client names on qualifications
                                                                                                      - 37 -
               Qualifications – Bank Wide Integration/Design

Deloitte was engaged after the merger to assist in the integration of diverse                 The bank proposed a global re-organization of its current operating
business practices and technology infrastructures, including Capital                          structure. Deloitte was engaged to define an operating model for each
Markets, and to provide PMO and resources to support integration activity.                    client-facing business line, support and control function. Design of the new
                                                                                              structure included: a review and assessment of existing Arab Bank
                                                                                              strategy; process and organization; modelling of generic best practices in
                                                                                              operations; assessment of key business issues; and the presentation of
Deloitte deployed an experienced team to assist JP Morgan Chase in                            action alternatives for further discussion.
various parts of the merger, focusing on:
 Synergies identification: prioritization of integration of high value activities
 Merger risk management: identification and quantification of potential
                                                                                               Created a high-level transition roadmap, capturing major risks and
                                                                                                obstacles associated with implementation of Head Office Charters
 PMO: managed the creation and issuance of deliverables and overall
                                                                                               Presented a newly defined mission statement to align the activities of
  project communication. Used PMO net to escalate key issues
                                                                                                each business line/ function
                                                                                               Defined and refined new regional responsibilities and intra-organisational

                                                                                     - 38 -
            Clients Who Are Willing To Share Their Experiences

Previous clients of Deloitte are available to speak to CSFB Evaluation Committee Members to provide insights into their
reengineering experience

              Managing Director                                          Project(s): Various Transformation Programs
              Business Management – Global Markets
                                                                         Project Role: Person..t served as the project sponsor and
              National Commercial Bank #1 UK,
                                                                          was a member of the project‟s steering committee

                                                                         Project(s): Deloitte & Touche is the independent auditor
                                  SENIOR MANAGING DIRECTOR
                                                                         Project Role: Person.. served as the senior business unit controller for Equities

                                                                         Project(s): Reengineering Front To Back & Systems Implementation
                                                                         Project Role: Person.. served as the BNP Paribas project sponsor and was a
                                                                          member of the project‟s steering committee

                                    Managing Director


                         If you wish to speak to any of these references, please contact Adam Broun, +1 781 354 3231,
                                                             who will be pleased to arrange a conversation
                                                                                  - 39 -
VII. Available Tools
             Sample Tools – Process & Initiatives Prioritization
                                  IndustryPrint                                                                            PriorITTM

                   Is a collection of Industry specific, enterprise wide process                          Is a highly flexible tool that enables teams to define their
                    models that incorporate best practices for key business                                 own prioritization criteria and unique weightings to each
                    and support functions                                                                   project to profile their risk/value tradeoff and thereby
                   IndustryPrint is used to:                                                               facilitate sequencing
                       – Jump start projects by providing a starting point for
                                                                                                           Applying the prioritization criteria to each project yields a
                         as-is and to-be modelling                                                          user-friendly view of the Risk/Value relationship, rendering
                                                                                                            the low risk, “quick win” projects readily visible
                       –   Integrate industry best practices, to inform process
                           redesign and reveal performance improvement

                           Information Space Maps                                                                 Cause & Effect Analysis

Comparison of information space maps demonstrates a reduction in the
complexity of the information exchange by analyzing the key components
of the process under review.                                                                               Fishbone analysis, used to force teams to focus beyond
                                                                                                            symptoms to root causes. Provides a structure to cause
                        Information Space Map benefits include:                                             identification effort, and balanced list of ideas. Utilized
                        • Reduction in information handoffs                                                 once the problem is identified to determine the cause.

                        • Reduction in organizations involved
                        • Reduction in systems used


                                                                            Provides ability to view the impact project
                                                                             portfolios have on enterprise improvement

                                                                                    - 41 -
Sample Tools – Industry Best Practice & Statistical Analysis Tools
          Target Operating Models                                                                                ValuePrint
                                                                                                 Is a structured, experience-based Financial Impact
    Best Practice banking operating models by product and                                        Template & Business Case Consolidator Tool designed to
     product group, covering Front to Back Office                                                 assist in determining the true business value of
    Used to determine functional groups and reorganization
     opportunities as well as control and process breaks                                         ValuePrint is used to:
                                                                                                     – Systematically identify and analyse investment costs
                                                                                                       and benefits
                                                                                                     –   Outline tangible and intangible project benefits,
                                                                                                         tracking them against defined measures

               Pareto Analysis                                                                           Minitab - Metrics Collection
                                                                                              Statistical analysis of metrics collected from the business to
    Graphical comparison of the importance of potential root
                                                                                              be used for analysis:
     causes of problems/defects. The Pareto Principle is based
     on the fact that 80% of the problems are caused by 20%                                   Six Sigma Metrics:
     of the sources                                                                              Defects (incorrect mapping); Errors (repeated mistakes);
    Determine how problems or defects will be categorized;                                       Straight Through Processing rates; Variation within
     Gather data on frequency of problems or defects for each                                     process
     of those categories; Establish a scale for the y-axis to                                 Lean Metrics:
     record the frequency for each category; List each category
     of problem or defect along the x-axis in descending order                                   Cycle times; Customer service levels (for example., late
     of frequency; Draw bars (columns) to show the frequency                                      orders, delivery performance); Handoffs in critical
     for each category of problem or defect; Categories with                                      processes; Distance information travels; Workforce skill
     very small contributions may be combined as “others”                                         sets; Labor content of work; Percent of employee
                                                                                                  suggestions implemented; Attrition rate of staff

                                                                  Global INSite

                                                    Is a knowledge management tool used to gather
                                                     benchmarking information globally and focus on specific
                           Deloitte Consulting
                                                     opportunities and issues confronting business
                                                    Global INSite is used to:
                                                        – Obtain industry specific quantitative and qualitative
                                                          performance measurement data
                                                        –   Identify innovative industry best practices to improve
                                                            overall process performance

                                                                        - 42 -
                                        VIII. Appendices

A: Middle Office Work Driver Approach
B: Middle Office Work Diver Sample Output
                 Appendix A: Middle Office Work Driver Overview
       Inputs                                Outputs                             Description                                  Benefits

                          I. PROCESS MAPS – What we do? How we do it?           Documents infrastructure             Meets regulatory / audit
                               Processes Documented In Hyperknowledge            processes including:                  requirements (e.g.
    Interviews                                                                                                         Mortgages)
                                                                                   -   What are the major
                                                                                       processes, sub                 Available to assess / prep for
                                                                                       processes and activities        deployment analysis

Process / Activity                                                                 -   How do they do them            Leverage for reengineering
   Summary                                                                                                             assessment
                                                                                   -   Why - what they're trying
                                                                                       to achieve

                         II. ACTIVITY SUMMARY – How much resource does it       Understand the relationship          Captures differences by
                                            take to do it?                                                             product line / region at a more
                                                                                 between various
                                        HC by activity / product                                                       extensive level than labor
  Work Driver                                                                    product/functional processes
   Analysis                                                                      and their resource                    allocation study
                                                                                 consumption pattern                  Could be used to adjust
                                                                                Identify the distribution of          allocations to represent more
                                                                                 processing capacity and               accurately activities

Fixed vs. Variable
   Assessment             III. INFRA COST DRIVERS & METRICS – What costs
                                      are fixed? What are variable?
                                   What are the major drivers of cost?
                                            For ISIS Dashboard
                                                                                Identify and document a              Transparency on cost drivers
                                                                                 meaningful set of productivity        by area
                                                                                 measures that accurately
                                                                                                                      Identifies areas that business
                                                                                 describe Infra activities (id
                                                                                                                       can influence costs
                                                                                 key measures 3-5)
                                                                                                                      Identifies areas for
                                                                                Determine the drivers of time
                                                                                 / cost within each activity for
                                                                                 each business or division            Identifies areas of constraint
                                    FIXED VS. VARIABLE ASSESSMENT
                                                                                Establish a set of metrics to
                                                                                 track performance against

                                                                    - 44 -
                  Appendix A: Middle Office Work Driver Scope
The “In-Scope” headcount represents 71% of the Global Middle Office June 2004 headcount and 79% of the Americas
and Europe June 2004 headcount

         Middle Office June 2004                                                                                                  Asia
         Actual Headcount                                                                                                         Europe

                          1,252                     131

                           131                      131                     13                     222

                                                                                                   77                               886



                           456                                                                                                      377

                        ISIS/ORM                   Asia                  Regional              Out of Scope &    Zero HC/Closed   In-Scope
                                                                                             (SCM/Mgmt/ Other)

Cost Centers               228                      64                     11                       24                70             59

1Adjustments   includes headcount changes that occurred post June 2004
                                                                                    - 45 -
Appendix A: Middle Office Work Driver Scope – Cost Center Summary

                                  - 46 -
            Appendix A: Middle Office Work Driver Analysis Overview
The middle office work driver database allows a variety of cuts on the data facilitating detailed analysis and comparison across the
multiple views

                                                                                              Data Views
  Sample Database Components
                                                                                               Organizational
                                                                                                  - Derivatives PC (Equities, FID and
                                                                                                  - Cash PC (FID and Equities)
                                                                                                  - IBD PC
                                                                                                  - Structured PC
                                                                                                  - Operations (Derivatives, Mortgages,
                                                                                               Regional
                                                                                                  - Americas
                                                                                                  - Europe
                                                                                               Functions / Activities (three grouping
                                                                                                  - PC Major Function: Validation &
                                                                                                    Control; Reporting; etc
                                                                                                  - PC Sub Process: Price Testing;
                                                                                                    FOBOs; Sox; etc
                                                                                                  - Cost Center Activity: Generate
                                                                                                    FOBO report; Acquire market prices
                                                                                               Cost Driver (three grouping levels)
                                                                                                  - High: Trades; Reports; Breaks; etc
                                                                                                  - Medium: # Reconciliations; # tickets;
                                                                                                    # positions; etc
                                                                                                  - Detailed: Portfolio size; # FOBO
                                                                                                    Breaks, # system updates, etc
                                                                - 47 -
                   Appendix B: Middle Office Activity Summary
      Middle Office Activities (886 FTEs)                                                                          Activity Descriptions

        Trade                                                     135 /        Trade         Trade capture (manual & automated), document management, trade confirmation, process
                    19%                     81%
    Processing                                                    15%        Processing      conversions, cash and security management, etc

                                                              129 /                          FOBOs, structured trade reviews, BOBOs, journal entry review, other reconciliations, hedge
  Data Integrity      32%                     68%
                                                              15%           Data Integrity
                                                                                             accounting documentation, front office and back office spreadsheet control

        Client                                               128 /                           Inquiries and support – internal & external clients, external client cash transfers & balances,
                      30%                   70%                            Client Services
      Services                                               14%                             maintain client relationships, etc

     Validation           55%           45%           101 / 11%                              Price testing, account ownership, P&L validation, non-trading data validation, model

  Management                                                                Management
                          59%         41%     80 / 9%                                        Management activities, training, administrative, BCP & risk management, etc
    & Support                                                                & Support

                                                                                             MIS reporting, consolidations & group reporting, regulatory reporting, control reporting,
     Reporting           64%         36%      77 / 9%                        Reporting
                                                                                             customer information delivery, ad hoc reporting, etc

       Projects     39%         61%         70 / 8%                           Projects       New business activities, Sarbanes Oxley, strategic projects, lights on projects

   Enrichments                                                              Enrichments      Provisioning & valuation adjustments, GAAP/accounting adjustments, expense allocation,
                    51%        49%    55 / 6%
 & Adjustments                                                             & Adjustments     etc
      Financial                                                               Financial
                    53%          39 / 4%                                                     Clean P&L. legal entity analysis, expense analysis, P&L analysis
      Analysis                                                                Analysis
      Position                                                                Position       Confirm & process firm cash positions (NOSTRO), confirm & process trade positions
                           21 / 2%
     Validation                                                              Validation      (DEPOT), monitor asset allocation ratios
       Shared                                                                 Shared         Client account maintenance, corporate actions, process mandatory & voluntary events,
                           21 / 2%
      Services                                                                Services       manage securities borrowing & lending events
   Create Trial                                                             Create Trial
                         14 / 2%                                                             Data collection, create trial balance (P&L)
      Balance                                                                Balance
   Marketing &                                                              Marketing &
                         13 / 1%                                                             Counterparty valuation statements, sales credits
        Sales                                       Fixed: 41%                Sales
                   26%                              Variable: 59%
  FX Hedging /                                                            FX Hedging / P&L
                     4 / 0%                                                                  FX hedging, P&L remittance
P&L Remittance                                                               Remittance
                                                                                              - 48 -
                   Appendix B: Middle Office Cash Product Control Activity Summary
          Cash PC Activities (209 FTEs)                                                                      Variable Cost Drivers

                                                                   38 /
     Reporting                    74%                     26%

                                                             34 /
     Validation             57%                  43%

                                                            33 /
  Data Integrity           53%                47%

       Projects           50%           50%            28 / 13%

                          65%         35%   19 / 9%
    & Support

                         67%      33% 18 / 9%
 & Adjustments

      Financial                                                                                 Front Office Opportunities To Influence Cost
                    60%         40%    13 / 6%
                                                                           4.1 FTEs are driven by Front Office requests/activities
   Marketing &      51% 49% 11 / 5%                                           - 1.7 FTEs conduct front office reporting with 93% of these heads being variable
                                                                              - 2.4 FTEs driven by other front office activities such as sales credit calculations, P&L
   Create Trial
                   52%       6 / 3%
                                                                                analysis, and WSS brokerage calculation and allocation
                                                                           11.5 FTEs are currently performing FOBO reconciliations and investigating breaks
                        3 / 2%
  FX Hedging /
                      3 / 2%
P&L Remittance
                      2 / 1%
                    1 / 1%
    Processing                                   Fixed: 61%
                                                 Variable: 39%

                                                                                            - 49 -
                   Appendix B: Middle Office Derivatives Product Control Activity Summary
      Derivatives PC Activities (204 FTEs)                                                      Variable Cost Drivers

                     18%               82%             68 /
  Data Integrity

     Validation      41%         59%    35 / 17%

       Projects    37% 63%        22 / 11%

                   37% 63% 18 / 9%

                   33%67% 16 / 8%
 & Adjustments

     Reporting     49%51% 15 / 7%

  Management                                                                        Front Office Opportunities To Influence Cost
                           11 / 5%
    & Support
                    48%                                        1.3 FTEs are driven by Front Office reporting requests
        Client                                                 24.5 FTEs are conducting structured trade review activities
                        7 / 3%
                    29%                                        21.3 FTEs are currently performing FOBO reconciliations and investigating breaks
   Create Trial
                       6.1 / 3%
                       4 / 2%
                       2 / 1%
  FX Hedging /
P&L Remittance        1 / 0%
   Marketing &
                     0 / 0%
        Sales                                 Fixed: 33%
                                              Variable: 67%

                                                                                - 50 -
                  Appendix B: Middle Office Operations Activity Summary
       Operations Activities (411 FTEs)                                                     Variable Cost Drivers

        Trade                                       130 /
                    17%              83%
   Processing                                       32%

                    29%              71%        115 / 28%

                   62% 38% 39 / 9%
   & Support

                  44% 56% 19 / 5%

                  52%48% 19 / 5%
& Adjustments
 Data Integrity   44%      17 / 4%

      Shared                                                                     Front Office Opportunities To Influence Cost
                          17 / 4%
                   39%                                       1.1 FTEs are driven by Front Office OTC trade documentation queries
    Reporting           16 / 4%

      Projects          15 / 4%
    Validation       4 / 1%
  Create Trial
                    2 / 1%

                                           Fixed: 33%
                                           Variable: 67%

                                                                             - 51 -
IX. Attachment 1: Supplier Assessment Questionnaire
               IX. Attachment 2: CSFB Standard Agreement

We are pleased to present our bid package for consideration. With regard to
the contract terms and conditions proposed in the RFP, we are currently in
the process of negotiating a Master Services Agreement ("MSA") with CSFB
which terms and conditions will govern all of our services provided to CSFB.
Our experience has indicated that almost without exception we have been
able to reach agreement with each of our clients that has awarded us an
engagement. In the vast majority of these cases, we have had some
concerns over the proposed terms and conditions included in the request for
proposal, however, in this case if we are awarded this engagement, we
intend to negotiate in good faith with CSFB to reach an agreement on the
MSA as expeditiously as possible. In this regard, we believe that the MSA as
finally drafted and agreed will be appropriate for this engagement.