The complaints allege that, during the applicable period, the defendants caused Ceridian’s shares to trade at artificially inflated levels through the issuance of false and misleading financial statements, which included the improper capitalization as assets of certain costs that should have been expensed. The individual defendants took advantage of the inflated share price by selling 216,298 shares of their Ceridian holdings for proceeds of $3.9 million.

On February 18, 2004, Ceridian announced it would restate its 2000-2003 financials due to a revenue recognition change within its Stored Value System business unit. The company’s stock declined on this news. However, the stock soon recovered due to defendants’ assurances that the change was limited in scope and would not materially impact futures results. On July 19, 2004, the company announced the postponement of its Q2 04 earnings release and investor call. At this point, the defendants were allegedly concealing that the company’s capitalization and expensing of certain costs in its U.S. Human Resource Solutions business was misleading. This false accounting is expected to adversely impact the company’s Q2 04 results, as well as previously reported periods and guidance. On this news, Ceridian’s stock price dropped to $18.20 per share, on volume of 6.8 million shares.

The action alleges that the defendants’ announcements indicate that the Ceridian’s comprehensive HR Solutions deals, which often require upfront customization work during the implementation process, were falsely accounted for-- the company had allegedly been capitalizing these upfront costs rather than expensing them immediately. The company capitalized approximately $30 million of internally developed software expenses in its HR Solutions division in 2003. If expensed, the lawsuit alleges that 2003 EPS would be reduced by $0.13.

If you purchased securities issued by Ceridian during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by October 5, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve you in this action, or you may choose to do nothing, and remain in the class as a silent member.