Christ, the Spirit and the Community of God: Essays on the Acts of the Apostles (Wissenschaftliche Untersuchungen Zum Neuen Testament 2.Reihe) 3161506758, 9783161506758

Table of contents :
Cover
Preface
Table of contents
Abbreviations
1. Bible and Apocrypha
2. Extra-Biblical Sources
3. Journals, Series, etc.
Introduction
Chapter 1. The Text of the Ascension Narratives – Luke 24:50–53; Acts 1:1–2, 9–11
1. Introduction
2. The Texts of Luke 24:50-53
1. Papyrus Bodmer XIV - Codex Vaticanus
2. Codex Bezae
3. Primitive Western Text (Boismard and Lamouille)
Comparison of 2 and 3
Comparison of 1 and 3
3. P and Text-Critical Tendency Criticism
4. The Texts of Acts 1:1-2
1. Codex Vaticanus
2. Codex Bezae
Primitive Western text (Boismard and Lamouille)
Comparison of 2 and 3
Comparison of 1 and 3
5. The Texts of Acts 1:9-11
1. Codex of Vaticanus
2. Codex of Bezae
3. Primitive Western text (Boismard and Lamouille)
Comparison of 2 and 3
Comparison of 1 and 3
6. Conclusions
Postscript
Chapter 2. Assumptus Est in Caelum – Rapture and Heavenly Exaltation in Early Judaism and Luke-Acts
1. Introduction
2. The Early Christian Resurection and Exaltation Kerygma
3. Defining Exaltation, Ascension and Rapture
4. In Search of the Proper Language Game
5. The Rapture Phenomenon in Early Jewish Sources
6. The Early Jewish Rapture-Preservation Paradigm
7. Luke-Acts and the Rapture-Preservation Paradigm
8. Luke-Acts and the Resurrection and Exaltation Kerygma
9. Final Remarks and Conclusions
Postscript
Chapter 3. The Mysterious Death(s) of Judas – A Shakespearean Drama
1. Introduction
2. Judas' Death in the New Testament
3. Various Versions of Judas' Death
4. The Death of the Wicked
5. The Death of Traitors
6. Death Scenes in Plural
7. Luke and the Death of Judas
8. A Shakespearean Death Scene
9. Jesus and the Twelve Thrones
Chapter 4. Judas and the Jews – Anti-Semitic Interpretation of Judas Iscariot, Past and Present
1. Introduction
2. Judas between Fact and Fiction
3. Judas as Incarnation of Evil: A Rhetoric of Defamation
4. Judas as Prototype of the Jews: A Rhetoric of Anti-Semitism
5. An Intermezzo: Fake Quotes
6. Judas and the Jews in the New Testament
7. Judas, the Jews and the Devil in the Forth Gospel: An Explosive Triad
8. Concluding Remarks
Chapter 5. Luke's Understanding of Baptism in the Holy Spirit
1. Introduction
2. Common Ground
3. Areas for Further Debate
4. The Systematization Fallacy
5. Baptism in the Spirit as an Eschatological Event
6. Baptism in the Spirit as a Corporate Event
7. Baptism in the Spirit as Present and Future
8. A Parallel from Qumran?
9. Pentecost as a Barrier-Breaking Event
10. Luke and Paul in Canonical Perspective
11. Concluding Remarks
Chapter 6. Church Between Ideal and Reality – Some Comments on the Role of the Church in the Acts of the Apostles
1. Introduction
2. The Church as a Charismatic Community
3. The Church as an Institution
4. The Position of Acts
5. The Historical Context of Acts
6. The Church as a Community of Salvation
7. The Church as a Charismatic Community
8. The Church as a Bearer of Tradition and Guarantor of Continuity
9. The Church as a Community of the Marginalized
10. The Church and Its Apostolic Origin
11. The Church as a Community between Ideal and Reality
12. Concluding Remarks
Chapter 7. Jesus Made Both Lord and Christ (Acts 2:36) – Some Reflections on the Altitude of Lukan Christology
1. Introduction
2. Acts 2:36: Rolling Stone or Foundation Wall?
3. Acts 2:36 in Luke's Larger Christological Project
4. Some Methodological Reflections
5. Insigths from Speech Act Theory and Narrative Criticism
6. Retroactive Realignment of the Past
7. A Rereading of the Kύριος-Texts in Luke's Gospel
8. Summary and Conclusions
Chapter 8. Putting Paul in Place with a Trojan Horse – Luke's Rhetorical Strategy in Acts in Defence of the Pauline Gospel
1. Introduction
2. The Post-Resurrection Apperences of Jesus
3. The Twelve Apostles as Authentic Witnesses
4. The Authority of Paul Under Dispute
5. The Rhetorical Function of the Parallelisms in Luke-Acts
6. the Peter-Paul Parallelisms
7. A Proposal: Paul Quasi-Subordinate to the Twelve
8. Conclusions
Bibliography
Index of Ancient Sources
1. Old Testament and Apocrypha
2. New Testament
3. OT Pseudepigrapha and Other Jewish Writings
4. Early Christian and Gnostic Writings
5. Greek and Roman Writings
6. Other Ancient Writings
Index of Modern Authors
Index of Subjects and Key Terms

Citation preview

Wissenschaftliche Untersuchungen zum Neuen Testament · 2. Reihe Herausgeber / Editor Jörg Frey (Zürich) Mitherausgeber / Associate Editors Friedrich Avemarie (Marburg) Markus Bockmuehl (Oxford) Hans-Josef Klauck (Chicago, IL)

293

Arie W. Zwiep

Christ, the Spirit and the Community of God Essays on the Acts of the Apostles

Mohr Siebeck

Arie W. Zwiep, born 1964; 1996 Ph.D. from Durham University; currently Assistant Professor of New Testament and Hermeneutics at VU University Amsterdam; lecturer in New Testament and Hermeneutics at Christelijke Hogeschool Ede.

e-ISBN PDF 978-3-16-151636-8 ISBN 978-3-16-150675-8 ISSN 0340-9570 (Wissenschaftliche Untersuchungen zum Neuen Testament, 2. Reihe) Die Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliographie; detailed bibliographic data are available on the Internet at http://dnb.d-nb.de. © 2010 by Mohr Siebeck, Tübingen, Germany. This book may not be reproduced, in whole or in part, in any form (beyond that permitted by copyright law) without the publisher’s written permission. This applies particularly to reproductions, translations, microfilms and storage and processing in electronic systems. The book was printed by Laupp & Göbel in Nehren on non-aging paper and bound by Buchbinderei Nädele in Nehren. Printed in Germany.

ਯıIJȚį੻țĮ੿įȩȖȝĮIJĮਥȞIJĮ૨șĮİਫ਼ȡİ૙Ȟ ਚʌİȡİੁȝ੽IJȠ૨IJȠ਷ȞIJઁȕȚȕȜȓȠȞ Ƞ੝įİȞ੿ıĮij૵ȢȠ੢IJȦȖȞȫȡȚȝĮਥȖȑȞȠȞIJȠ -RKQ&KU\VRVWRP+RPLQ$FW

3UHIDFH 7KLV YROXPH FRQWDLQV HLJKW RULJLQDOO\ LQGHSHQGHQW HVVD\V RQ WKH $FWV RI WKH$SRVWOHVWKDW,KDYHZULWWHQLQWKHSDVWGHFDGHDQGDKDOI6RPHRIWKH DUWLFOHVKDYHDSSHDUHGLQRQHIRUPRUDQRWKHULQ(QJOLVKEHIRUH&KDSWHUV DQG 7ZRFKDSWHUVKDYHEHHQWUDQVODWHGIURP'XWFK&KDSWHUV DQG (DFKRIWKHVHVWXGLHVKDVEHHQXSGDWHGH[SDQGHGDQGZKHUHQHF HVVDU\ UHYLVHG &KDSWHUV  DQG  DSSHDU KHUH IRU WKH ¿UVW WLPH 7RJHWKHU WKHVH HVVD\V GHDO ZLWK WH[WFULWLFDO H[HJHWLFDO DQG ELEOLFDOWKHRORJLFDO LV VXHVVXUURXQGLQJWKHRSHQLQJFKDSWHUVRI$FWVLQWKHZLGHUFRQWH[WRI¿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|UJ)UH\DQG KLV WHDP IRU RQFH DJDLQ DFFHSWLQJ D ZRUN RI PLQH IRU SXEOLFDWLRQ LQ WKH :LVVHQVFKDIWOLFKH8QWHUVXFKXQJHQ]XP1HXHQ7HVWDPHQW1HHGOHVVWRVD\ P\WKDQNVH[WHQGVWRWKHHGLWRULDOVWDIIRI0RKU6LHEHFNHVSHFLDOO\WR7DQMD 0L[IRUKHUNHHQH\HIRUGHWDLO $VDOZD\VWKHFRQVWDQWVXSSRUWDQGHQFRXUDJHPHQWRIP\ZLIH&LVFD DQGRXUFKLOGUHQ(O]HDQG-RsOGXULQJWKHPDQ\KRXUVRIUHVHDUFKʌĮȡઅȞ IJ૶ıȫȝĮIJȚਕʌઅȞį੻IJ૶ʌȞİȪȝĮIJȚKDYHLQQRVPDOOPHDVXUHPDGHSRVVLEOH WKHFRPSOHWLRQRIWKLVYROXPH 9HHQHQGDDO6HSWHPEHU

$ULH:=ZLHS

7DEOHRI&RQWHQWV 3UHIDFH9,, $EEUHYLDWLRQV ;,,, ,QWURGXFWLRQ 

&KDSWHU7KH7H[WRIWKH$VFHQVLRQ1DUUDWLYHV±/XNH± $FWV±±  ,QWURGXFWLRQ  7KH7H[WVRI/XNH±  क़ DQG7H[W&ULWLFDO7HQGHQF\&ULWLFLVP 7KH7H[WVRI$FWV±  7KH7H[WVRI$FWV±  &RQFOXVLRQV  3RVWVFULSW 

&KDSWHU$VVXPSWXVHVWLQFDHOXP±5DSWXUHDQG+HDYHQO\([DOWDWLRQ LQ(DUO\-XGDLVPDQG/XNH$FWV  ,QWURGXFWLRQ  7KH(DUO\&KULVWLDQ5HVXUUHFWLRQDQG([DOWDWLRQ.HU\JPD 'H¿QLQJ([DOWDWLRQ$VFHQVLRQDQG5DSWXUH  ,Q6HDUFKRIWKH3URSHU/DQJXDJH*DPH  7KH5DSWXUH3KHQRPHQRQLQ(DUO\-HZLVK6RXUFHV 7KH(DUO\-HZLVK5DSWXUH3UHVHUYDWLRQ3DUDGLJP  /XNH$FWVDQGWKH5DSWXUH3UHVHUYDWLRQ3DUDGLJP  /XNH$FWVDQGWKH5HVXUUHFWLRQDQG([DOWDWLRQ.HU\JPD  )LQDO5HPDUNVDQG&RQFOXVLRQV  3RVWVFULSW 

&KDSWHU7KH0\VWHULRXV'HDWKV RI-XGDV±$6KDNHVSHDUHDQ'UDPD  ,QWURGXFWLRQ  -XGDV¶'HDWKLQWKH1HZ7HVWDPHQW  9DULRXV9HUVLRQVRI-XGDV¶'HDWK  7KH'HDWKRIWKH:LFNHG 7KH'HDWKRI7UDLWRUV  'HDWK6FHQHVLQ3OXUDO  /XNHDQGWKH'HDWKRI-XGDV

;

&RQWHQWV

$6KDNHVSHDUHDQ'HDWK6FHQH -HVXVDQGWKH7ZHOYH7KURQHV

&KDSWHU-XGDVDQGWKH-HZV±$QWL6HPLWLF,QWHUSUHWDWLRQRI-XGDV ,VFDULRW3DVWDQG3UHVHQW  ,QWURGXFWLRQ  -XGDVEHWZHHQ)DFWDQG)LFWLRQ  -XGDVDV,QFDUQDWLRQRI(YLO$5KHWRULFRI'HIDPDWLRQ  -XGDVDV3URWRW\SHRIWKH-HZV$5KHWRULFRI$QWL6HPLWLVP  $Q,QWHUPH]]R)DNH4XRWHV  -XGDVDQGWKH-HZVLQWKH1HZ7HVWDPHQW  -XGDVWKH-HZVDQGWKH'HYLOLQWKH)RXUWK*RVSHO$Q([SORVLYH7ULDG  &RQFOXGLQJ5HPDUNV 

&KDSWHU/XNH¶V8QGHUVWDQGLQJRI%DSWLVPLQWKH+RO\6SLULW  ,QWURGXFWLRQ &RPPRQ*URXQG  $UHDVIRU)XUWKHU'HEDWH 7KH6\VWHPDWL]DWLRQ)DOODF\ %DSWLVPLQWKH6SLULWDVDQ(VFKDWRORJLFDO(YHQW %DSWLVPLQWKH6SLULWDVD&RUSRUDWH(YHQW  %DSWLVPLQWKH6SLULWDV3UHVHQWDQG)XWXUH  $3DUDOOHOIURP4XPUDQ"  3HQWHFRVWDVD%DUULHU%UHDNLQJ(YHQW  /XNHDQG3DXOLQ&DQRQLFDO3HUVSHFWLYH  &RQFOXGLQJ5HPDUNV 

&KDSWHU&KXUFKEHWZHHQ,GHDODQG5HDOLW\±6RPH&RPPHQWV RQWKH5ROHRIWKH&KXUFKLQWKH$FWVRIWKH$SRVWOHV  ,QWURGXFWLRQ 7KH&KXUFKDVD&KDULVPDWLF&RPPXQLW\ 7KH&KXUFKDVDQ,QVWLWXWLRQ 7KH3RVLWLRQRI$FWV 7KH+LVWRULFDO&RQWH[WRI$FWV 7KH&KXUFKDVD&RPPXQLW\RI6DOYDWLRQ 7KH&KXUFKDVD&KDULVPDWLF&RPPXQLW\ 7KH&KXUFKDVD%HDUHURI7UDGLWLRQDQG*XDUDQWRURI&RQWLQXLW\ 7KH&KXUFKDVD&RPPXQLW\RIWKH0DUJLQDOL]HG 7KH&KXUFKDQG,WV$SRVWROLF2ULJLQ 7KH&KXUFKDVD&RPPXQLW\EHWZHHQ,GHDODQG5HDOLW\ &RQFOXGLQJ5HPDUNV

&KDSWHU-HVXV0DGH%RWK/RUGDQG&KULVW$FWV ± 6RPH5HÀHFWLRQVRQWKH$OWLWXGHRI/XNDQ&KULVWRORJ\  ,QWURGXFWLRQ $FWV5ROOLQJ6WRQHRU)RXQGDWLRQ:DOO"

&RQWHQWV

;,

$FWVLQ/XNH¶V/DUJHU&KULVWRORJLFDO3URMHFW 6RPH0HWKRGRORJLFDO5HÀHFWLRQV ,QVLJKWVIURP6SHHFK$FW7KHRU\DQG1DUUDWLYH&ULWLFLVP 5HWURDFWLYH5HDOLJQPHQWRIWKH3DVW $5HUHDGLQJRIWKHȀ઄ȡȚȠȢ7H[WVLQ/XNH¶V*RVSHO 6XPPDU\DQG&RQFOXVLRQV

&KDSWHU3XWWLQJ3DXOLQ3ODFHZLWKD7URMDQ+RUVH± /XNH¶V5KHWRULFDO6WUDWHJ\LQ$FWVLQ'HIHQFHRIWKH3DXOLQH*RVSHO  ,QWURGXFWLRQ 7KH3RVW5HVXUUHFWLRQ$SSHDUDQFHVRI-HVXV 7KH7ZHOYH$SRVWOHVDV$XWKHQWLF:LWQHVVHV  7KH$XWKRULW\RI3DXOXQGHU'LVSXWH 7KH5KHWRULFDO)XQFWLRQRIWKH3DUDOOHOLVPVLQ/XNH$FWV 7KH3HWHU3DXO3DUDOOHOLVPV $3URSRVDO3DXO4XDVL6XERUGLQDWHWRWKH7ZHOYH &RQFOXVLRQV

%LEOLRJUDSK\  ,QGH[RI$QFLHQW6RXUFHV  2OG7HVWDPHQWDQG$SRFU\SKD  1HZ7HVWDPHQW  273VHXGHSLJUDSKDDQG2WKHU-HZLVK:ULWLQJV  (DUO\&KULVWLDQDQG*QRVWLF:ULWLQJV  *UHHNDQG5RPDQ:ULWLQJV  2WKHU$QFLHQW:ULWLQJV

,QGH[RI0RGHUQ$XWKRUV  ,QGH[RI6XEMHFWVDQG.H\7HUPV 

$EEUHYLDWLRQV %LEOHDQG$SRFU\SKD *HQ ([ /HY 1XP 'HXW -RVK -XGJ 5XWK 6DP 6DP .LQJV .LQJV &KU &KU (]UD 1HK 7RE -GW (VWK 0DFF 0DFF -RE 3V

*HQHVLV ([RGXV /HYLWLFXV 1XPEHUV 'HXWHURQRP\ -RVKXD -XGJHV 5XWK 6DPXHO 6DPXHO .LQJV .LQJV &KURQLFOHV &KURQLFOHV (]UD 1HKHPLDK 7RELW -XGLWK (VWKHU 0DFFDEHHV 0DFFDEHHV -RE 3VDOPV

3URY (FFO 6RQJ :LV 6LU ,VD -HU /DP %DU (]HN 'DQ +RV -RHO $P 2E -RQ 0LF 1DK +DE =HSK +DJ =HFK 0DO

3URYHUEV (FFOHVLDVWHV 6RQJRI6RORPRQ :LVGRPRI6RORPRQ 6LUDFK(FFOHVLDVWLFXV ,VDLDK -HUHPLDK /DPHQWDWLRQV %DUXFK (]HNLHO 'DQLHO +RVHD -RHO $PRV 2EDGLDK -RQDK 0LFKDK 1DKXP +DEDNNXN =HSKDQLDK +DJJDL =HFKDULDK 0DODFKL

0W 0N /N -Q $FWV 5RP &RU &RU *DO (SK 3KLO &RO 7KHVV 7KHVV

0DWWKHZ 0DUN /XNH -RKQ $FWVRIWKH$SRVWOHV 5RPDQV &RULQWKLDQV &RULQWKLDQV *DODWLDQV (SKHVLDQV 3KLOLSSLDQV &RORVVLDQV 7KHVVDORQLDQV 7KHVVDORQLDQV

7LP 7LP 7LWXV 3KLOHP +HE -DV 3HW 3HW -Q -Q -Q -XGH 5HY

7LPRWK\ 7LPRWK\ 7LWXV 3KLOHPRQ +HEUHZV -DPHV 3HWHU 3HWHU -RKQ -RKQ -RKQ -XGH 5HYHODWLRQ

;,9

$EEUHYLDWLRQV

([WUD%LEOLFDO6RXUFHV ,Q WKLV ZRUN VRFDOOHG 2OG 7HVWDPHQW SVHXGHSLJUDSKLFDO ZULWLQJV DUH DE EUHYLDWHG DFFRUGLQJ WR -DPHV + &KDUOHVZRUWK HG  7KH 2OG 7HVWDPHQW 3VHXGHSLJUDSKD *DUGHQ &LW\ 'RXEOHG D\   [OY±[OYLL 7H[WV IURP WKH 'HDG 6HD 6FUROOV DUH DEEUHYLDWHG DFFRUGLQJ WR WKH VWDQGDUG FRQYHQ WLRQV7KHWLWOHVRI5DEELQLFZULWLQJV3KLORRI$OH[DQGULD)ODYLXV-RVHSKXV HDUO\ &KULVWLDQ DQG FODVVLFDO DXWKRUV VKRXOG EH VXI¿FLHQWO\ FOHDU WR UHFRJ QL]H6HHIXUWKHU3+$OH[DQGHUHWDOHGV 7KH6%/+DQGERRNRI6W\OH IRU$QFLHQW1HDU(DVWHUQ%LEOLFDODQG(DUO\&KULVWLDQ6WXGLHV3HDERG\ 0DVV+HQGULFNVRQ 

-RXUQDOV6HULHVHWF :KHUHSRVVLEOHWKHFRQYHQWLRQVRI6LHJIULHG06FKZHUWQHU,QWHUQDWLRQDOHV $ENU]XQJVYHU]HLFKQLVIU7KHRORJLHXQG*UHQ]JHELHWH%HUOLQ1HZVHHP\UHYLHZLQ-57K ±@



,QWURGXFWLRQ

ZD\ZHDSSURDFK$FWVRQHYHU\OHYHOWH[WXDOOLQJXLVWLFKLVWRULFDOH[HJHWL FDOWKHRORJLFDOKHUPHQHXWLFDO,QIDFWWKHFRQWHPSRUDU\ELEOLFDOVFKRODU¶V SUREOHPLVQRWVRPXFKDODFNRILQIRUPDWLRQRUDVXSSRVHGVFDUFLW\RIGDWD EXWUDWKHUWKHRSSRVLWHWKHUHLVDQRYHUÀRZRILQIRUPDWLRQQRZWKDWDOPRVW DOOUHOHYDQWVRXUFHVERWKDQFLHQWDQGPRGHUQDUHHDVLO\DFFHVVLEOHLQGLJLW DOIRUPWKURXJKWKH7KHVDXUXV/LQJXDH*UDHFDH%UHSROV¶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³7KH7H[WRIWKH$VFHQVLRQ1DUUDWLYHV´&KDSWHU ,H[SORUHWKHWH[ WXDOVWDWXVRIWKHDVFHQVLRQQDUUDWLYHVLQ/XNHDQG$FWV,QLW,XQGHU WDNH D FRPSDUDWLYH DQDO\VLV RI WKH VWDQGDUG ³$OH[DQGULDQ´  WH[WWUDGLWLRQ DQG WKH ³:HVWHUQ´ WH[WWUDGLWLRQ ERWK VR FDOOHG LQ ZDQW RI EHWWHU WHUPV  DQG IRFXV HVSHFLDOO\ RQ WKH WKHRU\ DGYDQFHG E\ 0LNHDO 3DUVRQV DQG %DUW (KUPDQ WKDW WKH ORQJHU UHDGLQJV RI /XNH  FRQWDLQLQJ WKH ZRUGV țĮ੿ ਕȞİij੼ȡİIJȠ İੁȢ IJઁȞ Ƞ੝ȡĮȞંȞ ³DQG KH ZDV FDUULHG XS LQWR KHDYHQ´ DQG  UHDGLQJʌȡȠıțȣȞȒıĮȞIJİȢĮ੝IJંȞ³WKH\ZRUVKLSSHGKLP´DWWHVWHGLQक़ WKH '/%RFN$FWV%(&17*UDQG5DSLGV%DNHU$FDGHPLF '0DUJXHUDW/HV$FWHV GHVDS{WUHV± &17D*HQHYD/DERUHW)LGHV 0&3DUVRQV$FWV3DLGHLD &RPPHQWDULHV17*UDQG5DSLGV%DNHU$FDGHPLF 5,3HUYR$FWV$&RPPHQWDU\ +HUPHQHLD0LQQHDSROLV)RUWUHVV '3HWHUVRQ7KH$FWVRIWKH$SRVWOHV3LO17& *UDQG5DSLGV&DPEULGJH(HUGPDQV1RWWLQJKDP$SROORV   ௘7 KHVWXG\RI/XNH$FWV LVQRZJUHDWO\KHOSHGE\WKHVWXG\RI$'HQDX[5&RUVWMHQV LQ FROODERUDWLRQ ZLWK + 0DUGDJD 7KH 9RFDEXODU\ RI /XNH$Q$OSKDEHWLFDO 3UHVHQWDWLRQ DQGD6XUYH\RI&KDUDFWHULVWLFDQG1RWHZRUWK\:RUGVDQG:RUG*URXSVLQ/XNH¶V*RVSHO %L76W/HXYHQ3HHWHUV 8QIRUWXQDWHO\WKLVH[FHOOHQWWRROLVPRUHKHOSIXOIRUWKH VWXG\RIWKHJRVSHOWKDQIRU$FWV+DSD[OHJRPHQDZRUGVDQGZRUGJURXSV LQ$FWVHJ FDQQRWEHIRXQGZLWKWKLVRWKHUZLVH¿QHWRRO,WVXVHZRXOGEHJUHDWO\HQKDQFHGLILWZHUH PDGHDFFHVVLEOHDVDQHOHFWURQLFGDWDEDVH  ௘0\GRFWRUDOGLVVHUWDWLRQZDVHQWLWOHG³7KH$VFHQVLRQRIWKH0HVVLDK$Q,QTXLU\LQWR WKH $VFHQVLRQ DQG ([DOWDWLRQ RI -HVXV LQ /XNDQ &KULVWRORJ\´ DQG ZDV DFFHSWHG E\ WKH 8QLYHUVLW\RI'XUKDP8. LQ-XO\,WZDVVXEVHTXHQWO\SXEOLVKHGDV$:=ZLHS7KH $VFHQVLRQRIWKH0HVVLDKLQ/XNDQ&KULVWRORJ\176/HLGHQ1HZ/&$ $OH[DQGHU ³5HYLHZ RI $: =ZLHS -XGDV DQG WKH &KRLFH RI 0DWWKLDV  ´LQ5%/@EXWKRQHVW\DGPLWVWRVD\WKDW,IHOWDFHUWDLQUHOLHIWKDW,KDG ¿QLVKHGP\ERRNEHIRUHWKH*RVSHORI-XGDVPDGHLWVSXEOLFUHHQWU\DQGWKXVKDGVXIIHUHG QRGHOD\:KHQ,ZDVLQYLWHGWRUHYLHZ$SULO'H&RQLFN¶VFKDOOHQJLQJERRNRQWKH*RVSHO RI-XGDV>$''H&RQLFN7KH7KLUWHHQWK$SRVWOH:KDWWKH*RVSHORI-XGDV5HDOO\6D\V /RQGRQ1HZ@    LGHP 7KH *RVSHO DFFRUGLQJ WR /XNH ;± ;;,9 ,QWURGXFWLRQ 7UDQVODWLRQ DQG 1RWHV $QF% $ *DUGHQ &LW\ 1@WRFODVVLI\WKH¿QDOSHULFRSH

GH/XF3UREOqPHVOLWWpUDLUHVHWWKpRORJLTXHV%(7K//HXYHQ/HXYHQ8QLYHUVLW\3UHVV 3HHWHUV    ± ³ QH SDV RXEOLHU TXH OD GDWDWLRQ µGpEXW GX ,,,H VLqFOH¶ Q¶HVW SDVXQHµFRQVWDWLRQ¶VXUODTXHOOHRQSRXUUDLWFRQVWUXLUHXQpGL¿FHLQpEUDQODEOHPDLVXQH K\SRWKqVHTXHVRQVpULHX[Q¶HPSrFKHSDVGHGHPHXUHUDSSUR[LPDWLYHHWVXMHWWHjUpYLVLRQ´  7KHVWXG\RIक़ LVQRZJUHDWO\KHOSHGE\WKHLPSUHVVLYHVWXG\RI-55R\VH6FULEDO +DELWVLQ(DUO\*UHHN1HZ7HVWDPHQW3DS\UL1776/HLGHQ%RVWRQ%ULOO ± ,DPKDSS\WRVHHWKHFRQFOXVLRQVRIP\HDUOLHUDUWLFOHFRQ¿UPHGDQGDPWKDQNIXOIRU VRPHFRUUHFWLRQVDQGSUHFLVLRQVRIP\DUJXPHQW  ௘$FFRUGLQJWR6$(GZDUGV³क़ 8QGHUWKH0DJQLI\LQJ*ODVV´17 WKHUH LVD DJUHHPHQWEHWZHHQक़ DQG%6HHQRZDOVR5R\VH6FULEDO+DELWV±  0&3DUVRQV³$&KULVWRORJLFDO7HQGHQF\LQक़ ´-%/ ±UHSULQ LGHP'HSDUWXUH±  ௘%'(KUPDQ7KH2UWKRGR[&RUUXSWLRQRI6FULSWXUH7KH(IIHFWRI(DUO\&KULVWRORJLFDO &RQWURYHUVLHV RQ WKH 7H[W RI WKH 1HZ 7HVWDPHQW 1HZ @RQO\KDYHVXSSRUWLYHHYLGHQFH,Q/XNHक़ KDVVLQJXODU UHDGLQJV DQG  VXEVLQJXODU UHDGLQJV 2I DOO WKH LQVWDQFHV EURXJKW XS E\ 3DUVRQV LQ GHIHQFH RI KLV 7HQGHQ] K\SRWKHVLV RQO\ /XNH    DUH VLQJXODU UHDGLQJV LH RQO\ WKUHH WH[WV IURP /XNH QRQH RI WKHP D :HVWHUQ QRQLQWHUSRODWLRQ  DSDUW IURP WZR VLQJXODU UHDGLQJV LQ -RKQ -Q  +HHGLQJ0DUWLQL¶VZDUQLQJWKDWFRQFOXVLRQVUHJDUGLQJ%RGPHU ;,9/XNH FDQQRWEHDXWRPDWLFDOO\DSSOLHGWR %RGPHU;9-RKQ RQO\ WKUHHTXHVWLRQDEOH/XNDQLQVWDQFHVDUHOHIWDUDWKHUPHDJUHIRXQGDWLRQRQ ZKLFKWREXLOGD7HQGHQ]K\SRWKHVLV 7KLUGLWLVGLI¿FXOWWRVHHKRZRQHVLQJOHPDQXVFULSWFRXOGSXWYLUWXDOO\ WKHHQWLUHPDQXVFULSWWUDGLWLRQRQWKHZURQJWUDFN7KHRUHWLFDOO\LWLVSRV VLEOHEXWLQSUDFWLFHKLJKO\XQOLNHO\ )RXUWKUHJDUGOHVVZKHWKHUWKHYDULDQWVFRQFHUQHGDUH³VLQJXODU´RU³VXE VLQJXODUUHDGLQJV´RQLQWULQVLFWH[WFULWLFDODQGH[HJHWLFDOJURXQGVQRQHRI WKHPLVVXI¿FLHQWWRSURYHDWKHRORJLFDOWHQGHQF\RQWKHSDUWRIWKHVFULEHRI क़ DVWKHIROORZLQJZLOOGHPRQVWUDWH WH[WV (YHQ$PSKRX[³&KDSLWUH´±LQKLVWH[WDQGVW\OHFULWLFDODQDO\VLVRI/N FODLPLQJ:HVWHUQSULRULW\IRUWKHUHVWRIFKDSWHU GRHVQRWH[WHQGKLVFRQFOXVLRQVWRWKH :HVWHUQQRQLQWHUSRODWLRQVRIYY³WKH:HVWHUQ1RQLQWHUSRODWLRQRI9>@ QH FRQFHUQHGpMjSOXVODFRPSRVLWLRQGHFHFKDSLWUHFHTXLHVWHQMHXHVWSO€WRWO¶DXWRQRPLHGH FHWWH¿QGHOLYUHRXVRQHQFKDvQHPHQWDYHFOHµWRPH¶VXLYDQW´±   ௘6R &ROZHOO 0HWKRGRORJ\  2Q WKH WHUPLQRORJ\ RI ³VLQJXODU´ DQG ³VXEVLQJXODU UHDGLQJV´ VHH (- (SS ³7RZDUG WKH &ODUL¿FDWLRQ RI WKH 7HUP µ7H[WXDO 9DULDQW¶´   UHSULQ-.(OOLRWWHG 6WXGLHVLQ1HZ7HVWDPHQW7H[WDQG/DQJXDJH(VVD\VLQ+RQRXU RI*HRUJH'.LOSDWULFNRQWKH2FFDVLRQRI+LV6L[W\¿IWK%LUWKGD\176/HLGHQ(- %ULOO ±HVSIIUHSULQ(SS3HUVSHFWLYHV ±  ௘6WDWLVWLFVEDVHGRQ0DUWLQL3UREOHPD±  ௘0DUWLQL3UREOHPDQ)RUक़ LQ-RKQVHH-1%LUGVDOO³7KH%RGPHU3DS\UXV RQWKH*RVSHORI-RKQ´ UHSULQLGHP&ROOHFWHG3DSHUV ±&/3RUWHU $7H[WXDO$QDO\VLVRIWKH(DUOLHVW*UHHN0DQXVFULSWVRIWKH*RVSHORI-RKQ'LVVHUWDWLRQ 'XNH8QLYHUVLW\'XUKDP1& >FI'$,$ @LGHP³3DS\UXV%RGPHU ;9 क़   DQG WKH 7H[W RI &RGH[ 9DWLFDQXV´ -%/    ± LGHP ³$Q $QDO\VLV RIWKH7H[WXDO9DULDQWV%HWZHHQ3DSDQG&RGH[9DWLFDQXVLQWKH7H[WRI-RKQ´LQ%/ 'DQLHOV0-6XJJVHGV 6WXGLHVLQWKH+LVWRU\DQG7H[WRIWKH1HZ7HVWDPHQWLQ+RQRU RI.:&ODUN6W'6DOW/DNH&LW\8QLYHUVLW\RI8WDK ±.:&ODUN³7KH 7H[W RI WKH *RVSHO RI -RKQ LQ 7KLUG&HQWXU\ (J\SW´   UHSU LQ LGHP *HQWLOH %LDV  ±56FKQDFNHQEXUJ'DV-RKDQQHVHYDQJHOLXP(LQOHLWXQJXQG.RPPHQWDU ]X .DS± +7K.  )UHLEXUJ +HUGHU   ± (GZDUGV ³0DJQLI\LQJ *ODVV´ ±-'HOREHO³7KH%RGPHU3DS\ULRI-RKQ$6KRUW6XUYH\RIWKH0HWKRGRORJLFDO 3UREOHPV´LQ0GH-RQJHHG /¶eYDQJLOHGH-HDQ6RXUFHVUpGDFWLRQWKpRORJLH%(7K/ *HPEORX['XFXORW/HXYHQ/HXYHQ8QLYHUVLW\3UHVV ±  ௘:H ZLOO KHUH SURFHHG SUDJPDWLFDOO\ E\ UHVWULFWLQJ RXU DQDO\VLV WR WKRVH LQVWDQFHV EURXJKWIRUZDUGLQVRPHZD\RUDQRWKHUE\3DUVRQV



&KDSWHU7KH7H[WRIWKH$VFHQVLRQ1DUUDWLYHV

  3DUVRQV ULJKWO\ GLVFDUGV /XNH  7KH VLQJXODU UHDGLQJ ș੼ȜȦ țĮșĮȡ઀ıșȘIJİțĮ੿İ੝ș੼ȦȢਥțĮșĮȡ઀ıșȘıĮȞLVREYLRXVO\DWH[WXDOHPHQGDWLRQ RIDVFULEHRWKHUWKDQWKDWRIक़ XQGHUWKHLQÀXHQFHRI0DWWKHZ  ,Q/XNHक़ UHSODFHGWKHਕʌઁȞİțȡ૵Ȟ ʌȠȡİȣșૌIRUWKHPRUH IDPLOLDU ਕʌઁ Ȟİțȡ૵Ȟ  ਥȖ੼ȡșȘ VLJQL¿FDQWO\ WKH QHDUHVW FRUUHVSRQGLQJ H[ SUHVVLRQਕʌઁIJ૵ȞȞİțȡ૵Ȟ ਥȖ੼ȡșȘLVD0DWWKDHDQLVP0W  VHHXQGHU 7RKDUPRQL]HKLVQHZWH[WZLWKYHUVHKHUHSODFHGਕȞĮıIJૌ E\ WKH V\QRQ\PRXV ਥȖ੼ȡșȘ WKH UHYHUVH LQ 0W    /N   ,W LVTXLWHDUELWUDU\WROLQNWKLVYDULDQWUHDGLQJZLWK/XNHQRWVLQJXODU  'HVSLWH3DUVRQV¶VXJJHVWLRQWKDW-RKQLVHYLGHQFHRIक़ ¶VSUHRFFXSD WLRQZLWKWKHUHVXUUHFWLRQWKHYDULDQWUHDGLQJVHHPVWREHQRPRUHWKDQD ORJLFDOKDUPRQL]DWLRQWRWKHFRQWH[W   3DUVRQV VXJJHVWV WKH RPLVVLRQ RI Į੝IJȠ઄Ȣ LQ /XNH  WKH 7UDQV ¿JXUDWLRQ  JLYHV WKH LPSUHVVLRQ RI -HVXV HQWHULQJ WKH FORXG DORQH ³7KLV YDULDQW UHDGLQJ ZRXOG WKHQ VHUYH WR KHLJKWHQ WKH P\VWHU\ DQG H[DOWDWLRQ RI WKH WUDQV¿JXUDWLRQ QDUUDWLYH LQ /XNH ZKHUH -HVXV DQG WKH LQQHU FLUFOH RIGLVFLSOHVHQWHULQWRWKHFORXG´%XWLIVRक़ KDGEHWWHUKDYHUHSODFHG Į੝IJȠ઄Ȣ E\ Į੝IJંȞ RU D FRUUHVSRQGLQJ H[SUHVVLRQ 1RZ KLV WH[W UHPDLQV VRPHZKDWDPELJXRXVDVİੁıİȜșİ૙ȞPD\VWLOOKDYHWKHXQPHQWLRQHGVXEMHFW RI ਥijȠȕȒșȘıĮȞ VF WKH GLVFLSOHV  RU EHWWHU  WKH SUHFHGLQJ Į੝IJȠ઄Ȣ VF DW OHDVW -HVXV 0RVHV DQG (OLMDK  >@ DV LWV ORJLFDO VXEMHFW 7KH UHPRYDO RI Į੝IJȠ઄Ȣ LI QRW VLPSO\ DQ HUURU  LV DQ XQKDSS\ DWWHPSW WR LPSURYH WKH DP ELJXRXVV\QWD[RILWVFRS\DQRSHUDWLRQPDQ\RWKHUVFULEHVIHOWQHFHVVDU\ WRXQGHUWDNHVHHWKHDSSDUDWXVFULWLFXVRI1$ DQG6ZDQVRQ/XNH  ([HJHVLVQRW&KULVWRORJ\SURYRNHGWH[WXDODOWHUDWLRQ   0HWKRGRORJLFDOO\ WKH GHPRQVWUDWLYH IRUFH RI KDUPRQL]DWLRQV ZLWK 0DWWKHZLVDWOHDVWGHEDWDEOH7KDWKDUPRQL]DWLRQVVXFKDV/XNH SURYHWKDWWKHVFULEHRI क़ ZDVXVLQJDFRS\RI0DWWKHZ¶VJRVSHORU ZDVDWOHDVWYHU\IDPLOLDUZLWKLWLVQRWWKHLVVXHKHUH,QRUGHUWRFODVVLI\  ௘3DUVRQV'HSDUWXUH±0DUWLQL3UREOHPD)HH³0\WK´)LW]P\HU/XNH &RQWUD&ODUN³5HOHYDQFH´ZKRLQDGYHUWHQWO\" KROGVWKHVFULEHRIक़ UHVSRQ VLEOH IRU WKH H[SDQVLRQ RI WKH WH[W 5HFHQWO\ 8OULFK 6FKPLG KDV DUJXHG WKDW WKH YDULDQW UHDGLQJLVDUHDGHU¶VQRWDVFULEH¶V QRWHVHH86FKPLG³6FULEHVDQG9DULDQWV6RFLRORJ\ DQG7\SRORJ\´LQ+$*+RXJKWRQ'&3DUNHUHGV 7H[WXDO9DULDWLRQ7KHRORJLFDODQG 6RFLDO7HQGHQFLHV"3DSHUVIURPWKH)LIWK%LUPLQJKDP&ROORTXLXPRQWKH7H[WXDO&ULWLFLVP RIWKH1HZ7HVWDPHQW7D6UG6HULHV3LVFDWDZD\*RUJLDV ±HVS±  ௘&ROZHOO0HWKRGRORJ\  ௘3DUVRQV'HSDUWXUHKLVLWDOLFV   ௘$VDFWXDOO\LQİੁıİȜșİ૙ȞĮ੝IJંȞ  ௘&I0DUWLQL3UREOHPD  ௘6RWKHLQYHUVLRQIJઁʌĮȚį઀ȠȞIJȠ૨IJȠक़ 'ISFODW  0W Į੝IJȒȞSURĮ੝IJȠ઄Ȣक़ SFGYJ PV  0WWKHRPLVVLRQRIĮ੝IJ૶क़ ODW VDERPVV  0WKRZHYHUĮ੝IJ૶LVUHDGE\$%:șIॗODWV\PDH  DQGĮ੝IJંȞSURĮ੝IJȠ઄Ȣक़ E  0W7KHODWWHULVLQWKH/XNDQFRQWH[WPLVWDNHQ

3DSDQG7H[W&ULWLFDO7HQGHQF\&ULWLFLVP



DJLYHQKDUPRQL]DWLRQDV³WHQGHQWLRXV´LWPXVWEHGHPRQVWUDWHGWKDWLWLV PRUHWKDQRQO\DVW\OLVWLFKDUPRQL]DWLRQHLWKHUGHOLEHUDWHRUXQLQWHQWLRQDO  7KXVWKHLGHDWKDW³LWZRXOGEHHQWLUHO\SRVVLEOHWRDUJXHWKDWWKHVFULEHRI क़ KDVERUURZHGWKHSKUDVHµ+HLVQRWKHUHEXWKHLVULVHQ¶>WKH:HVWHUQ QRQLQWHUSRODWLRQRI/N@IURPDQDYDLODEOHFRS\RI0DWWKHZ´GRHVQRW H[SODLQIRUZKDWSXUSRVHLIDQ\ KH³ERUURZHG´WKHSKUDVHWR³KHLJKWHQ /XNH¶V&KULVWRORJ\´RUVLPSO\WRFRPSOHPHQWKLVWH[WZLWKDIRUPXODKHDQG KLVFRPPXQLW\ZHUHIDPLOLDUZLWK/LNHZLVHWKHYO-RKQWKHYDULDQW FDVH HQGLQJ RI ș੺ȜĮııĮ  LV D KDUPRQL]DWLRQ ZLWK 0DWWKHZ  D FRP SDULVRQEHWZHHQYDQGYSURYHVWKDWਥʌ੿IJોȢșĮȜ੺ııȘȢLVDQH[DFW V\QRQ\PRIਥʌ੿IJ੽Ȟș੺ȜĮııĮȞ DQGKDVQRDUJXPHQWDWLYHIRUFH   7KH YDULDQW /XNH  İੁıİȜșİ૙Ȟ İੁȢ IJ੽Ȟ ȕĮıȚȜİ઀ĮȞ LQVWHDG RI İੁıİȜșİ૙ȞİੁȢIJ੽ȞįંȟĮȞ LVDFOHDULQVWDQFHRI0DWWKDHDQGLFWLRQFUHHSLQJ LQWR/XNH¶VWH[WXDOWUDGLWLRQ7KHH[SUHVVLRQİੁıİȜșİ૙ȞİੁȢIJ੽ȞȕĮıȚȜİ઀ĮȞ RFFXUVLQ/XNH$FWVRQO\LQ/XNH 0N DQG$FWV  EXWLVDIDYRXULWHH[SUHVVLRQRI0DWWKHZ0W[  IXUWKHURQO\LQ0N-Q क़ KDVįંȟĮȞZULWWHQLPPH GLDWHO\DERYHWKHZRUGȕĮıȚȜİ઀ĮȞ3UREDEO\WKH³RULJLQDOWH[W´FRQWDLQLQJ WKHXQXVXDOįંȟĮ ZDVDOWHUHGLQWKH9RUODJHRIक़ XQGHUWKHLQÀXHQFHRI 0DWWKHZLQWRWKHPRUHIDPLOLDUȕĮıȚȜİ઀Į7KHVFULEHRIक़ FDUHIXODVKH ZDVWRRNXSȕĮıȚȜİ઀ĮIURPKLVFRS\EXWVXVSLFLRXVRIWKLV³VLQJXODUUHDG LQJ´LQVHUWHGWKHZRUGįંȟĮȞDVDVXSUDOLQHDUFRPPHQWVRDVWRLQGLFDWHD WH[WXDOFRQIXVLRQ  7KHFRQIXVLRQRIʌȡȠ੼ȡȤȠȝĮȚDQGʌȡȠı੼ȡȤȠȝĮȚLVQRWXQFRPPRQLQ WKH 1HZ 7HVWDPHQWV PDQXVFULSWV VHH 0W  0N  /N  $FWV  7KHVXEVWLWXWLRQLQ/XNHRIʌȡȠ੼ȡȤȠȝĮȚ³WRJREHIRUH DVDIRUHUXQQHURUOHDGHU´/N E\ʌȡȠı੼ȡȤȠȝĮȚक़ ī+SF LV HLWKHUDWUDQVFULSWLRQDOHUURURUGXHWRDPLVXQGHUVWDQGLQJRIWKHDFFXVDWLYH SOXUDOĮ੝IJȠ઄Ȣ5HDGLQJʌȡȠȒȡȤİIJȠĮ੝IJȠ઄ȢUHIHUVWR੕ȤȜȠȢFRQVWUXFWLRDG VHQVXP  UHDGLQJ ʌȡȠıȒȡȤİIJȠ WR ³-HVXV DQG KLV GLVFLSOHV´ 7KH ¿JXUDWLYH PHDQLQJ3DUVRQVDWWULEXWHVWRʌȡȠı੼ȡȤȠȝĮȚ³FRPHWRRUDSSURDFKDGHLW\´  ±UHÀHFWLQJDQDVVXPHGWHQGHQF\WRHOHYDWH/XNH¶V&KULVWRORJ\±ZRXOGUH TXLUHDGDWLYHVLQJXODUĮ੝IJ૶VF-HVXV   (TXDOO\XQFRQYLQFLQJLVWKHPHQWLRQLQJRIWKH5LFK0DQ¶VQDPHLQ  ௘3DUVRQV'HSDUWXUHVD\V³7KLVZRUGJORU\PD\VHUYHDVDWKHRORJLFDOO\µORDGHG¶ WHUPIRUWKHVFULEHDQGPD\UHSUHVHQWLQDVXFFLQFWZD\WKHPRRGRIWKHUHVXUUHFWLRQQDUUD WLYH´EXWWKHQDGGV³,WLVGLI¿FXOWWRPRYHEH\RQGWKHSRLQWRIFRQMHFWXUHEXWWKHSRVVLELOL WLHVRIWKLVYDULDQWDUHPXOWLIDULRXV´  ௘ WUDGLWLRQDOFI*6FKQHLGHU'LH$SRVWHOJHVFKLFKWH.RPPHQWDU]X.DS± +7K.)UHLEXUJ+HUGHU $QP  ௘&I0DUWLQL3UREOHPD%XWRQWKLVYDULDQWUHDGLQJVHHQRZ5R\VH6FULEDO+DELWV ±IRUDVOLJKWO\GLIIHUHQWLQWHUSUHWDWLRQ+HDUJXHVWKDWWKHVFULEHRIक़ UDWKHU WKDQDQHDUOLHUVFULEHLVUHVSRQVLEOHIRUWKHLQFOXVLRQRIįંȟĮȞ  ௘&I%$$5VYʌȡȠı੼ȡȤȠȝĮȚ%'$*



&KDSWHU7KH7H[WRIWKH$VFHQVLRQ1DUUDWLYHV

>@/XNHDVDQDUJXPHQWLQVXSSRUWRIWKHVKRUWHUWH[WRI/XNH LH ZLWKRXW IJȠ૨ țȣȡ઀Ƞȣ ੉ȘıȠ૨  ³7KH DGGLWLRQ VKRZV WKDW क़  ZRXOG QRW EH DYHUVH WR LQWHUSRODWLQJ D QDPH WR JLYH H[SOLFLW LGHQWL¿FDWLRQ WR DQ XQ NQRZQRUDPELJXRXV¿JXUH7KLVREVHUYDWLRQFRXOGKDYHVRPHVLJQL¿FDQFH IRU WKH YDULDQW DW  ZKHUH WKH ZRUGV IJȠ૨ țȣȡ઀Ƞȣ ੉ȘıȠ૨ PD\ EH DGGHG IRUPXFKWKHVDPHUHDVRQVDVȃİ઄ȘȢDW´$PRUHOLNHO\H[SODQDWLRQ LVWKDWੑȞંȝĮIJȚȃİ઄ȘȢ±DQDFFLGHQWDOVKRUWHQLQJRIȅȃȅȂǹȉǿȃǿȃǼȊǾȈ ੑȞંȝĮIJȚȃȚȞİ઄ȘȢ±LVGUDZQIURPWKH6DKLGLFWUDGLWLRQQRWHWKDWक़ DQG VDERWKDUHRI(J\SWLDQSURYHQDQFH DQGWKLVVLPSO\EHFDXVHLWZDVDFXU UHQWWUDGLWLRQ  7KHLQYHUVLRQLQ/XNHIJ੹ʌİȡ੿ਦĮȣIJȠ૨ਥȞʌ੺ıĮȚȢIJĮ૙ȢȖȡĮijĮ૙Ȣ LQVWHDG RI ਥȞ ʌ੺ıĮȚȢ IJĮ૙Ȣ ȖȡĮijĮ૙Ȣ IJ੹ ʌİȡ੿ ਦĮȣIJȠ૨  LV DV 3DUVRQV DGPLWV H[HJHWLFDOO\ QRW XQDPELJXRXV ,I WKH LQYHUVLRQ LV LQWHQWLRQDO DW DOO ZKLFK VKRXOGEHVWURQJO\GRXEWHG LVIJ੹ʌİȡ੿ਦĮȣIJȠ૨WKHQSODFHGEHIRUHWKHVFULS WXUHV³WRHOHYDWHWKHSODFHRI&KULVWLQWKHHDUO\FKXUFK´ RULVਥȞʌ੺ıĮȚȢ IJĮ૙ȢȖȡĮijĮ૙ȢSODFHGDWWKHHQGIRUWKHVDNHRIHPSKDVLV"  7KDWLQ-RKQक़ UHDGVțĮ੿ૃǹȕȡĮ੹ȝਦઆȡĮț੼ȞıİLQVWHDGRIțĮ੿ ૃǹȕȡĮ੹ȝਦઆȡĮțĮȢKDUGO\SURYHVDWH[WXDODOWHUDWLRQRQWHQGHQWLRXVJURXQGV RQWKHSDUWRIक़ 7KHYDULDQWLVQRWVLQJXODULWLVDOVRDWWHVWHGE\D  V\VVDDFSER DQGWKHUHDUHDWOHDVWWKUHHDOWHUQDWLYHH[SODQDWLRQVYL]D  DVLQDQG/XNHWKHYORULJLQDWHVIURPWKH6DKLGLFWUDGLWLRQE  LW LV QR PRUH WKDQ D VW\OLVWLF DVVLPLODWLRQ WR YHUVH  ZKHUH $EUDKDP LV VXEMHFW੆ȞĮ>ૃǹȕȡĮ੹ȝ@੅įૉIJ੽Ȟਲȝ੼ȡĮȞIJ੽ȞਥȝȒȞ RUF LWLVGXHWRDYLVXDO HUURUȀǹǿǹǺȇǹǹȂǼȍȇǹȀǹȈǼǿȆǼȃ  $VDSUHOLPLQDU\FRQFOXVLRQLWZLOOEHREVHUYHGWKDWWKHFDVHIRUDWHQ GHQF\RQWKHSDUWRIWKHVFULEHRIक़ GRHVQRWSDVVDFULWLFDOWHVW$OWKRXJK WKH PDQXVFULSW LV E\ QR PHDQV D IDXOWOHVV FRS\ RI LWV RULJLQDO LWV WHVWL PRQ\GHVHUYHVWKHIXOOHVWSRVVLEOHFUHGLWEHFDXVHRILWVDJHDQGLWVTXDOLW\ ,QFRPSDULVRQZLWKWKH:HVWHUQWH[WZKLFKLVGHPRQVWUDEO\³WHQGHQWLRXV´ HOVHZKHUHक़ %QRGRXEWUHSUHVHQWVWKH³SXUHU´WUDGLWLRQ7KHRUHWLFDOO\ ௘3DUVRQV'HSDUWXUH%XWFRQWUDU\WR/NWKHLGHQWLW\RIWKHSHUVRQLQ/N HYHQZLWKWKHVKRUWHUUHDGLQJ LVTXLWHFOHDU  ௘6HH . *UREHO ³ :KRVH 1DPH LV 1HYHV´ 176    ± )LW]P\HU ³3DS\UXV%RGPHU;,96RPH)HDWXUHVRI2XU2OGHVW7H[WRI/XNH´&%4 Q LGHP /XNH  ± ZLWK ELEOLRJUDSKLF UHIHUHQFHV  3HUKDSV WKH YO -Q  ੒ ʌȠȚȝȒȞ क़ VDDFPI LVWREHH[SODLQHGLQVLPLODUWHUPV  ௘2QWKLVYDULDQWVHHQRZIXUWKHU5R\VH6FULEDO+DELWV±  ௘3DUVRQV'HSDUWXUH  ௘0$.LQJ³1RWHVRQWKH%RGPHU0DQXVFULSWRI/XNH´%6   ௘&RQWUD0HW]JHU7H[WXDO&RPPHQWDU\  ௘7 KLVFRQFOXVLRQKDVQRZEHHQUREXVWO\FRQ¿UPHGE\5R\VH6FULEDO+DELWV³,Q DOOH[DPSOHV3DUVRQV¶VVXSSRVHGHYLGHQFHLVRIQRYDOXHLQHVWDEOLVKLQJDWKHRORJLFDOWHQ GHQF\RQWKHSDUWRIWKHVFULEHRIक़ ´+HLQWHUDFWVZLWK3DUVRQVRQSS±  ௘:HQHHGRQO\UHIHUWR3K+0HQRXG³7KH:HVWHUQ7H[WDQGWKH7KHRORJ\RI$FWV´ 

7KH7H[WVRI$FWV±



WKLVGRHVQRW\HWUXOHRXWWKHSRVVLELOLW\WKDWWKH$OH[DQGULDQWH[WLVDODWH ¿UVWFHQWXU\ RU HDUO\ VHFRQGFHQWXU\  ³UHFHQVLRQDO WH[W´ įȚંȡșȦıȚȢ  EXW FRQFOXVLYHHYLGHQFHLVODFNLQJ$FFRUGLQJO\WKHUHFDQEHOLWWOH>@GRXEW WKDWțĮ੿ਕȞİij੼ȡİIJȠİੁȢIJઁȞȠ੝ȡĮȞંȞY DQGʌȡȠıțȣȞȒıĮȞIJİȢĮ੝IJંȞY   ZHUH IURP WKH YHU\ EHJLQQLQJ D FRQVWLWXWLYH SDUW RI WKH RULJLQDO WH[W 7KLVFRQFOXVLRQLVFRUURERUDWHGE\DFRQVLGHUDWLRQRILQWHUQDOSUREDELOLWLHV LQIDYRXURIWKHORQJHUWH[WRI/XNH±VXFKDV )LUVWWKHFKURQRORJLFDOWHQVLRQZLWK$FWV±ZKHUHWKHDVFHQVLRQWDNHV SODFHDIWHUDIRUW\GD\SHULRGRIDSSHDUDQFHVUDWKHUWKDQRQWKHGD\RIWKH UHVXUUHFWLRQLWVHOI±ZRXOGQDWXUDOO\LQYLWHDWH[WXDOH[FLVLRQ 6HFRQG UHPRYDO RI țĮ੿ ਕȞİij੼ȡİIJȠ İੁȢ IJઁȞ Ƞ੝ȡĮȞંȞ GHVWUR\V QHDW WKH VWUXFWXUDOEDODQFHRIWKHSHULFRSH 7KLUG$FWVLQWKHQRQ:HVWHUQWUDGLWLRQDQGLQ&RGH[%H]DH UHDGV OLNHDQDWXUDOÀDVKEDFNWRWKHDVFHQVLRQ %HIRUHKRZHYHUJLYLQJRXU¿QDOMXGJHPHQWXSRQWKHPDWWHU±DV\HWLWKDV QRWEHHQGHPRQVWUDWHGWKDWWKH:HVWHUQWH[WLVGLVWLQFWO\XQ/XNDQ±ZH QHHGWRGLVFXVVWKHYDULDQWVRI$FWVWREURDGHQRXUSHUVSHFWLYH

7KH7H[WVRI$FWV± $FWV ± LV SDUW RI WKH SURHP $FWV ±  RI /XNH¶V ³VHFRQG ERRN´ LQ ZKLFKKHIROORZLQJWKHFRQYHQWLRQVRIKLVWLPHUHVXPHVWKHFRQWHQWRIKLV ʌȡ૵IJȠȢ ȜંȖȠȢ EHIRUH SURFHHGLQJ ZLWK KLV QDUUDWLYH 7H[WFULWLFDOO\ WKH %6176 ± ³/HWH[WHRFFLGHQWDOHWODWKpRORJLHGXOLYUHGHV$FWHV´LQLGHP -pVXV&KULVWHWODIRL5HFKHUFKHVQpRWHVWDPHQWDLUHV>%71 1HXFKkWHO3DULV'HODFKDX[ 1LHVWOp@±DQG(SS7HQGHQF\%XWVHHWKHUHVHUYDWLRQVRI&.%DUUHWW³,V 7KHUHD7KHRORJLFDO7HQGHQF\LQ&RGH[%H]DH"´LQ(%HVW50F/:LOVRQHGV  7H[W DQG ,QWHUSUHWDWLRQ 6WXGLHV LQ WKH 1HZ 7HVWDPHQW 3UHVHQWHG WR 0DWWKHZ %ODFN /RQGRQ &DPEULGJH8QLYHUVLW\3UHVV ±ZKRDUJXHVWKDWWKH:HVWHUQWH[WGHYHORSVZKDW LVDOUHDG\LQWKHWH[WHJWKHDVVXPHG³DQWL-XGDLVWLFWHQGHQF\´ WRPDNHWKHVWRULHVPRUH YLYLG DQG LQWHUHVWLQJ $W OHDVW IRU WKH DVFHQVLRQ QDUUDWLYHV WKLV GRHV QRW KROG VHH LQIUD  &IIXUWKHU30+HDG³$FWVDQGWKH3UREOHPRI,WV7H[WV´LQ%::LQWHU$'&ODUNH HGV 7KH%RRNRI$FWVLQLWV$QFLHQW/LWHUDU\6HWWLQJ%$)&6*UDQG5DSLGV(HUGPDQV &DUOLVOH3DWHUQRVWHU ±IRUDJHQHUDOGLVFXVVLRQ  ௘7 KH SHULFRSH FRQVLVWV RI WKUHH WZRPHPEHUHG FODXVHV   ਫȟȒȖĮȖİȞ  țĮ੿  İ੝ȜંȖȘıİȞ Y     įȚ੼ıIJȘ  țĮ੿ ਕȞİij੼ȡİIJȠ Y     ਫ਼ʌ੼ıIJȡİȥĮȞ  țĮ੿ ਷ıĮȞ YY  FI-HUHPLDV$EHQGPDKOVZRUWH0HW]JHU7H[WXDO&RPPHQWDU\0DUVKDOO &RPPHQWDU\   %XW QRWH WKH YDOXDEOH FULWLFLVP RI (KUPDQ 2UWKRGR[ &RUUXSWLRQ  Q  ௘)RUWKHSURORJXHWR$FWVLQJHQHUDOVHH':3DOPHU³7KH/LWHUDU\%DFNJURXQGRI$FWV ±´176 ±/&$$OH[DQGHU7KH3UHIDFHWR/XNH¶V*RVSHO/LWHUDU\ &RQYHQWLRQDQG6RFLDO&RQWH[WLQ/XNH±DQG$FWV066176&DPEULGJH1HZ @VHQWHQFH,W LVXQOLNHO\WREHFRQVWUXHGZLWKਕȞİȜȒȝijșȘDZNZDUGVHTXHQFH RUZLWK ਥȞIJİȚȜ੺ȝİȞȠȢLQWROHUDEOHJUDPPDU 7KHOHDVWXQVDWLVIDFWRU\VROXWLRQLVWR FRQQHFWLWZLWKਥȟİȜ੼ȟĮIJȠEXWWKLVOHDYHVPXFKWREHGHVLUHGZKHUHV\QWD[ LVFRQFHUQHGDVLWVHULRXVO\GHVWUR\VWKHEDODQFHRIWKHVHQWHQFH &RPSDULVRQRIDQG )LUVW WKH PRVW VWULNLQJ GLIIHUHQFH EHWZHHQ WKH %WH[W DQG WKH SULPLWLYH :HVWHUQWH[WLVWKHDEVHQFHRIਕȞİȜȒȝijșȘLQWKHODWWHUWKXVODFNLQJDQH[ ௘+HUHZHIROORZWKHUHFRQVWUXFWLRQRI%RLVPDUG/DPRXLOOH7H[WHRFFLGHQWDOH± eGLWLRQQRXYHOOH± )RUROGHUDWWHPSWVVHH/DUUDxDJD$VFHQVLRQ±LGHP ³(OSURHPLRWUDQVLFLyQGH$FW±HQORVPHWRGRVOLWHUDULRVGHODKLVWRULRJUD¿DJULHJD´ 0%LE5RPD6FKRODW\SRJUDSKLFD3LR; ±HVS±5HFHQWUHFRQVWUXF WLRQVRIWKHSULPLWLYH:HVWHUQWH[WDUHPDGHE\(SS³$VFHQVLRQ´±3HUVSHFWLYHV ± %RXZPDQ³$VFHQVLRQ´±  ௘7 KHDUWLFOHEHIRUH੉ȘıȠ૨ȢRPLWWXQW%' VKRXOGFHUWDLQO\EHUHWDLQHG0HW]JHU7H[WXDO &RPPHQWDU\%'5&.%DUUHWW7KH$FWVRIWKH$SRVWOHV3UHOLPLQDU\,QWUR GXFWLRQDQG&RPPHQWDU\RQ$FWV,±;,9,&&(GLQEXUJK7 7&ODUN RPLVVLRQ RI੒E\KDSORJUDSK\   ௘+-+ROW]PDQQ'LH$SRVWHOJHVFKLFKWH+&,)UHLEXUJ7ELQJHQ/HLS]LJ 0RKU6LHEHFN 5RSHV7H[W±&ODUN$FWV3ORRLM³$VFHQVLRQ´  +DHQFKHQ $SRVWHOJHVFKLFKWH  $QP 0HW]JHU 7H[WXDO &RPPHQWDU\  %RLVPDUG /DPRXLOOH7H[WHRFFLGHQWDOH±eGLWLRQQRXYHOOH ))%UXFH7KH$FWVRIWKH$SRVWOHV *UHHN 7H[W ZLWK ,QWURGXFWLRQ DQG &RPPHQWDU\ *UDQG 5DSLGV (HUGPDQV /HLFHVWHU $SROORV    ± &RQWUD 5- +DUULV &RGH[ %H]DH $ 6WXG\ RI WKH 6R&DOOHG :HVWHUQ7H[WRIWKH1HZ7HVWDPHQW7D6&DPEULGJH&DPEULGJH8QLYHUVLW\3UHVV  ±%:HLVV'HU&RGH['LQGHU$SRVWHOJHVFKLFKWH7H[WNULWLVFKH8QWHUVXFKXQJ78 /HLS]LJ-&+LQULFKV $+LOJHQIHOG³'HU(LQJDQJGHU$SRVWHOJHVFKLFKWH´ =:7K =DKQ8UDXVJDEHDQGUHFHQWO\'HOHEHFTXH³3URORJXHV´± ZKRLGHQWLI\WKHSULPLWLYH:HVWHUQWH[WZLWKWKHWH[WRI&RGH[%H]DH$W¿UVWDOVR%ODVV $FWDSKLORORJLFD ±ZKRODWHUUHMHFWHGWKLVYLHZ$FWDURPDQDP [[[LLL±[[[LY  ௘$V'GRHVHOVHZKHUHLQHJ$FWV±  ௘&IWKHFRPSUHKHQVLYHSUHVHQWDWLRQRIWH[WXDOHYLGHQFHE\/DUUDxDJD$VFHQVLRQ± IXUWKHU5RSHV7H[W±±DQGWKHDSSDUDWXVRI1$ DQG8%6 



&KDSWHU7KH7H[WRIWKH$VFHQVLRQ1DUUDWLYHV

SOLFLWUHIHUHQFHWRWKHDVFHQVLRQ6HFRQGLQWKH:HVWHUQWH[WWKHHOHFWLRQ RI WKH GLVFLSOHV ਥȟİȜ੼ȟĮIJȠ IJȠઃȢ ਕʌȠıIJંȜȠȣȢ  LV WKH PDLQ VXEMHFW RI WKH VHQWHQFH WRJHWKHU ZLWK WKH FRPPDQG WR SUHDFK  ZKLOH LQ WKH %WH[W WKLV LVQRPRUHWKDQDQRWHLQSDUHQWKHVHVȠ੠ȢਥȟİȜ੼ȟĮIJȠ 7KLUGZKHUHDVWKH FRQWHQW RI ਥȞIJİȚȜ੺ȝİȞȠȢ LV OHIW XQGH¿QHG LQ WKH %WH[W WKH :HVWHUQ WH[W JLYHVWKHFRQWHQWRIWKHLQVWUXFWLRQYL]țȘȡ઄ııİȚȞIJઁİ੝ĮȖȖ੼ȜȚȠȞZKHUHE\ ਥȞİIJİ઀ȜĮIJȠ FRRUGLQDWHV ZLWK ਥȟİȜ੼ȟĮIJȠ  )RXUWK DFFRUGLQJ WR WKH %WH[W WKH IRUPHU ERRN FRYHUV ʌİȡ੿ ʌ੺ȞIJȦȞ  ੰȞ ਵȡȟĮIJȠ ੉ȘıȠ૨Ȣ ʌȠȚİ૙Ȟ IJİ țĮ੿ įȚį੺ıțİȚȞ SHUKDSV LPSO\LQJ WKDW WKH VHFRQG ERRN LV FRQFHUQHG ZLWK LWV FRQWLQXDWLRQ ZLWKਙȤȡȚਸȢਲȝ੼ȡĮȢਕȞİȜȒȝijșȘ WKHHYHQWVGHVFULEHGLQ /N DVLWVWHUPLQXVDGTXHP$FFRUGLQJO\ਥȞIJİȚȜ੺ȝİȞȠȢIJȠ૙ȢਕʌȠıIJંȜȠ૙Ȣ țIJȜUHIHUVWRWKHSRVW(DVWHULQVWUXFWLRQVRIWKH5LVHQ/RUG7KH:HVWHUQ WH[WVSHFL¿HVWKHGD\RIWKHHOHFWLRQRIWKHGLVFLSOHV/NII DVWKHEH JLQQLQJRI-HVXV¶SXEOLFPLQLVWU\³ZKLFK-HVXVKDGEHJXQWRGRRQWKH GD\ KH KDG FKRVHQ WKH DSRVWOHV´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ÀLFWVZLWK/XNH¶VSUHVHQWD WLRQHOVHZKHUH:KHUHDVWKHUHLVQRGRXEW/XNHIRUPDOO\FRXOGKDYHZULWWHQ țĮ੿ ਥț੼Ȝİȣıİ țȘȡ઄ııİȚȞ IJઁ İ੝ĮȖȖ੼ȜȚȠȞ >@ LWV DXWKHQWLFLW\ LV UHIXWHG  ௘$VLQ$XJXVWLQH'HFRQVHQVXHYDQJHOLVWDUXP3/&RQWUDHSLVWXODP 0DQLFKDHLTXDPYRFDQW)XQGDPHQWL3/&RQWUD)HOLFHP3/(S&DWK 3/)XUWKHUJLJW3V9LJLOLXV&RQW9DU  ௘6Re'HOHEHFTXH³$VFHQVLRQHW3HQWHF{WHGDQVOHV$FWHVGHV$S{WUHVVHORQOHFRGH[ %H]DH´57KRP Q  ௘7 KH SKUDVH ZRXOG ZLWK 'HOHEHFTXH ³$VFHQVLRQ´  ³3URORJXHV´ ±  PDWFK SHUIHFWO\ZLWK$FWV,QWKH1HZ7HVWDPHQWțİȜİ઄ȦRFFXUV[LQ0WDQGIXUWKHUH[ FOXVLYHO\ LQ /XNH$FWV /XNH¶V XVH RI WKH YHUE țȘȡ઄ııȦ GRHV QRW GLIIHU IURP WKH RWKHU 1HZ7HVWDPHQWDXWKRUV/XNH$FWV[DJDLQVW[LQWKHUHVWRIWKH1HZ7HVWDPHQW>,+ 0DUVKDOO HG  0RXOWRQ DQG *HGHQ &RQFRUGDQFH WR WKH *UHHN 7HVWDPHQW 6L[WK (GLWLRQ &RQWLQXXP ,QWHUQDWLRQDO 3XEOLVKLQJ *URXS (GLQEXUJK 7 7 &ODUN   ± 'HQDX[ 9RFDEXODU\ ±@ 7KH DEVROXWH țȘȡ઄ııȦ IJઁ İ੝ĮȖȖ੼ȜȚȠȞ RFFXUV RQO\ LQ 0N  QR SDU   QR SDU LQ /N VRPH PDQXVFULSWV DGG IJȠ૨IJȠ KDUPRQL]LQJ ZLWK 0W   >0N @ 0DWWKHZ DOZD\V DGGV D IXUWKHU TXDOL¿FDWLRQ 0DUN GRHV VR RFFDVLRQ DOO\  IJȠ૨ șİȠ૨  7KRXJK WKH H[DFW SKUDVH țȘȡ઄ııİȚȞ IJઁ İ੝ĮȖȖ੼ȜȚȠȞ GRHV QRW RFFXU LQ /XNH$FWV LW KDV D FRUUHVSRQGLQJ SKUDVH /N  țȘȡ઄ııȦȞ țĮ੿ İ੝ĮȖȖİȜȚȗંȝİȞȠȢ IJોȞ ȕĮıȚȜİ઀ĮȞIJȠ૨șİȠ૨ /XNHDVDQ\RQHHOVH FRXOGKDYHIRXQGWKHFRPELQDWLRQRIțȘȡ઄ııȦ DQGİ੝ĮȖȖ੼ȜȚȠȞLQWKHHDUO\FKXUFK*DO&RO7KHVV7KHRUHWLFDOO\WKHDGGL WLRQLQ$FWVFRXOGEH/XNDQ

7KH7H[WVRI$FWV±



E\WKHIDFWWKDWLWFRQWUDGLFWVWKHGDWDRIKLVJRVSHO/XNHKDVQRWUDGLWLRQ ZKLFK SODFHV WKH HOHFWLRQ DQG FRPPDQG WR SUHDFK RQ RQH DQG WKH VDPH GD\KHPXVWKDYHKDGHLWKHUWKHRFFDVLRQRI/XNHRU>PRUHOLNHO\@/XNH LQPLQG 1HLWKHUFDQ/XNH¶V*RVSHORU-HVXV¶PLQLVWU\EHVDLGWRKDYH EHJXQDWWKDWSRLQW7KHRULJLQRIțĮ੿ਥț੼ȜİȣıİțȘȡ઄ııİȚȞIJઁİ੝ĮȖȖ੼ȜȚȠȞ LV PRUH OLNHO\ WR EH VRXJKW LQ D VFULEDO LQWHUSRODWLRQ IURP /XNH  RU 0DUN  5HDVRQLQJ IURP WKH %WH[W RQ WKH RWKHU KDQG LW LV HDV\ WR VHHKRZWKLVWH[WFRXOGEHWUDQVIRUPHGLQWRWKHSULPLWLYH:HVWHUQWH[WWKH UHPRWHSRVLWLRQRIਕȞİȜȒȝijșȘWKHSUREOHPDWLFGDWLQJRIWKHDVFHQVLRQDIWHU IRUW\ GD\V YY    WKH DZNZDUG VHSDUDWLRQ RI Ƞ੠Ȣ ਥȟİȜ੼ȟĮIJȠ IURP IJȠ૙Ȣ ਕʌȠıIJંȜȠ૙ȢWKHXQGH¿QHGFRQWHQWRIਥȞIJİȚȜ੺ȝİȞȠȢDQGWKHDPELJXLW\DVWR ZKDWįȚ੹ʌȞİ઄ȝĮIJȠȢਖȖ઀ȠȣUHIHUVਥȞIJİȚȜ੺ȝİȞȠȢįȚ੹ʌȞİ઄ȝĮIJȠȢਖȖ઀ȠȣRUįȚ੹ ʌȞİ઄ȝĮIJȠȢਖȖ઀ȠȣਥȟİȜ੼ȟĮIJȠ" DOOWKHVHPXVWKDYHFRQWULEXWHGWRWH[WXDO DOWHUDWLRQ 6WDUWLQJ SRLQW ZDV WKH H[FLVLRQ RI ਕȞİȜȒȝijșȘ E\ ZKLFK SURFH GXUHWKH:HVWHUQVFULEHKDUPRQL]HG$FWVZLWKWKH:HVWHUQWH[WRI/XNH +DYLQJUHPRYHGWKHPDLQYHUEਕȞİȜȒȝijșȘWKHLQGLFDWLYHਥȟİȜ੼ȟĮIJȠ ZDVWKH¿UVWFDQGLGDWHIRUWDNLQJRYHULWVIXQFWLRQDFFRUGLQJO\WKHGDWLYH LVVXEVWLWXWHGE\WKHDFFXVDWLYH 7KHDPELJXRXVਥȞIJİȚȜ੺ȝİȞȠȢSDUWLFLSOH EURXJKWEDFNWRWKHLQGLFDWLYH ZDVWKHQFODUL¿HGE\WKHFRPPDQGWRSUHDFK DQGįȚ੹ʌȞİ઄ȝĮIJȠȢਖȖ઀ȠȣGH¿QLWLYHO\VHWWOHGWRTXDOLI\-HVXV¶HOHFWLRQRIWKH GLVFLSOHV7KH%WH[WLQDGGLWLRQKDVDOOWKHPDUNVRIEHLQJD/XNDQWH[W )RU/XNHWKHDVFHQVLRQLVWHUPLQXVDGTXHPRI-HVXV¶HDUWKO\FDUHHU$FWV ਪȦȢYOਙȤȡȚ IJોȢਲȝ੼ȡĮȢਸȢਕȞİȜȒȝijșȘਕijૃਲȝ૵ȞFI/N ਙȤȡȚਸȢ ਲȝ੼ȡĮȢ /XNDQ/N WKHVHSDUDWLRQRIȠ੠ȢਥȟİȜ੼ȟĮIJȠIURPIJȠ૙Ȣ ਕʌȠıIJંȜȠ૙ȢFRQFXUVZLWK/XNH¶VVW\OHHOVHZKHUH7KHFRUROODU\RIDOOWKLV LVWKDWWKHWH[WXDOTXHVWLRQRI$FWV±PXVWEHGHFLGHGLQIDYRXURIWKH $OH[DQGULDQ WH[W 7KH :HVWHUQ WH[W LV GLVWLQFWO\ XQ/XNDQ DQG UHSUHVHQWV DQXQKDSS\DWWHPSWE\DVFULEHRUUHYLVHUWRUHZULWHWKHYHUVHVR>@DVWR UHPRYHVW\OLVWLFÀDZVDQGWRKDUPRQL]HWKHRSHQLQJYHUVHVRI$FWVZLWKWKH :HVWHUQWH[WRI/XNH±

௘&I/DUUDxDJD$VFHQVLRQ$FFRUGLQJWR)+&KDVH7KH2OG6\ULDF(OHPHQWLQ WKH7H[WRI&RGH[%H]DH/RQGRQ1HZ@ WKHLU VLJKW DFFRUGLQJ WR WKH :HVWHUQ WH[W ¿UVW D FORXG HQYHORSHG -HVXV Ȟİij੼ȜȘਫ਼ʌ੼ȜĮȕİȞĮ੝IJઁȞVXVFHSLW ±3HVKLWWRDGGV³DQGKHZDVKLGGHQ´ RQO\DWWHVWHGLQ$FWVLQZKLFKLWKDVDVLQ$SSLDQ&LYLO:DUV76LP'DQ 7KHRGRWLRQYO-RVHSKXV%->@/&/0DUW\UGRPRI3RO\FDUS>[@ /&/ D¿JXUDWLYHVHQVH³LQVWLJDWHVHFUHWO\ VXERUQ´%'$* 7KHVXJJHVWLRQ RI(0H\HU8UVSUXQJXQG$QIlQJHGHV&KULVWHQWXPV6WXWWJDUW-*&RWWD  UHSU'DUPVWDGW:LVVHQVFKDIWOLFKH%XFKJHVHOOVFKDIW $QPWKDWਫ਼ʌ੼ȕĮȜİȞLV QRWDVFULEDOHUURUEXWDGHOLEHUDWHFKDQJH³GLH:RONHVFKREVLFKLKPXQWHU´ IDLOVLQWKDW KHZURQJO\ DWWULEXWHVWKHPHGLXPVHQVHWRWKHDFWLYHIRUPVHH/6-0   ௘5RSHV7H[WQ3ORRLM³$VFHQVLRQ´ 0HW]JHU7H[WXDO&RPPHQWDU\  QRORQJHULQWKHVHFRQGHGLWLRQ   ௘%RLVPDUG/DPRXLOOH7H[WHRFFLGHQWDOHeGLWLRQQRXYHOOH   ௘&RQWUD 'HOHEHFTXH ³$VFHQVLRQ´  Q %RLVPDUG /DPRXLOOH 7H[WH RFFLGHQWDOH  ZKR KROG WKH DUWLFOH DV LQGLVSHQVDEOH 7KH DUWLFOH LV HTXDOO\ DEVHQW LQ /N  FI $FWV7KHUHLVDGPLWWHGO\DVOLJKWGLIIHUHQFHLQPHDQLQJDVZLWKRXWWKHDUWLFOHਕʌઁ ੑijșĮȜȝ૵ȞĮ੝IJ૵ȞPD\EHDQLGLRPDWLFH[SUHVVLRQIRU³IURPWKHP´ZKLOHZLWKWKHDUWLFOHWKH H[SUHVVLRQKDVDPRUHDGOLWWHUDPVHQVH%'5   ௘8QOHVVRIFRXUVHZHDUHWRXQGHUVWDQGWKHVHFRQGFODXVHDVDQHSH[HJHWLFXP³KH ZDVOLIWHGXSWKDWLVDFORXGWRRNKLPDZD\´ ,QWKDWFDVHWKH:HVWHUQVFULEHVLPSO\PDGH H[SOLFLWZKDWWKHWH[WDOUHDG\LPSOLHGDQGWKXVSUHYHQWHGWKHWH[WIURPEHLQJPLVLQWHUSUHWHG  ௘੥ʌȠȜĮȝȕ੺ȞȦ GRHV QRW QRUPDOO\ PHDQ ³HQYHORS´ EXW ³WDNH XS E\ JHWWLQJ XQGHU´ /6-0 >+HURGRWXV+LVWRULDH3ODWR5HVSXEOLFDG-RVHSKXV$QW  @ %XW LW VKRXOG EH QRWHG WKDW FRPSRVLWHV ZLWK WKH SUH¿[ ਫ਼ʌȠ RIWHQ FDUU\ WKH FRQ QRWDWLRQ ³XQGHUKDQG VHFUHWO\´ /6-0  ) ,,, ZLWK UHIHUHQFH WR ਫ਼ʌȠș੼Ȧ ਫ਼ʌȠșȦʌİ઄Ȧ ਫ਼ʌȠțȠȡ઀ȗȠȝĮȚ ਫ਼ʌંȡȞȣȝȚ EXW PDQ\ RWKHU H[DPSOHV FRXOG EH DGGXFHG  VR WKDW WKH SUH¿[ ਫ਼ʌȠLQWKH:HVWHUQWH[WLVQRWQHFHVVDULO\VWULFWO\ORFDO/6-0LQDGGLWLRQJLYHVWKH PHDQLQJ³WDNHXSVHL]HFRPHVXGGHQO\XSRQ´7KHSKUDVHȞİij੼ȜȘਫ਼ʌ੼ȜĮȕİȞĮ੝IJંȞPD\DF FRUGLQJO\EHWUDQVODWHGDV³DFORXGWRRNKLPDZD\VHFUHWO\´RU³DFORXGVXGGHQO\FDPHXSRQ KLP´VR(SS³$VFHQVLRQ´3HUVSHFWLYHV 5RSHV7H[WQDQG3ORRLM³$VFHQVLRQ´



&KDSWHU7KH7H[WRIWKH$VFHQVLRQ1DUUDWLYHV

5RSHV 7H[W   ± DQG WKHQ -HVXV ZKLOH ZLWKLQ WKH FORXG  ZDV WDNHQ DZD\ਕʌȒȡșȘVXEODWXVHVW IURPWKHGLVFLSOHVVXJJHVWLQJWKDWWKHGLVFLSOHV VDZQRPRUHWKDQWKDWDFORXGFRYHUHG-HVXVDQGWKDWKHGLVDSSHDUHGIURP WKHP7KHYDULDWLRQRIIJĮ૨IJĮİੁʌȫȞDQGİੁʌંȞIJȠȢĮ੝IJȠ૨FRUUHVSRQGVWRWKH YDULDWLRQ RI WKH JUDPPDWLFDO VWUXFWXUH RI WKH PDLQ VHQWHQFH 6LJQL¿FDQW LV WKH XVH RI D GLIIHUHQW YHUE ਥʌĮ઀ȡȦ LQ WKH %WH[W DJDLQVW ਕʌĮ઀ȡȦ LQ WKH :HVWHUQ WH[W FI WKH FRUUHVSRQGLQJ VXEVWLWXWLRQ LQ /XNH  ਕʌ੼ıIJȘ įȚ੼ıIJȘZKLFKVWURQJO\VXJJHVWVWKDWWKLVYDULDQWUHDGLQJLVQRWFRLQFLGHQWDO 7KDW DFFRUGLQJ WR WKH :HVWHUQ WH[W WKH GLVFLSOHV GLG QRW DFWXDOO\ REVHUYH -HVXV¶ERG\ULVLQJIURPWKHHDUWKFRUUHVSRQGVWRWKHQRQDWWHVWDWLRQRIWZR SKUDVHVDFFHQWXDWLQJWKHYLVLELOLW\RIWKHHYHQWVFȕȜİʌંȞIJȦȞĮ੝IJ૵ȞDQG ਕʌઁIJ૵ȞੑijșĮȜȝ૵ȞĮ੝IJ૵Ȟ)RUWKHODWWHUSKUDVHWKH:HVWHUQWH[WKDVRQO\ ਕʌૃ Į੝IJ૵Ȟ ZKLFK FRPSOHPHQWV ਕʌȒȡșȘ DQG WKXV KDUPRQL]HV ZLWK 0DUN ਕʌȒȡșȘਕʌૃĮ੝IJ૵Ȟ0W/N  $FWV±*LYHQWKHGHHPSKDVLVRQWKHYLVXDODVSHFWWKHTXHVWLRQDV WR ZKDW İੁȢ IJઁȞ Ƞ੝ȡĮȞંȞ VKRXOG EH FRQQHFWHG ZLWK PD\ IRU WKH :HVWHUQ VFULEH EH ZHOO GHFLGHG LQ IDYRXU RI UHDGLQJ ੪Ȣ ਕIJİȞ઀ȗȠȞIJİȢ ਷ıĮȞ İੁȢ IJઁȞ Ƞ੝ȡĮȞઁȞ ʌȠȡİȣȠȝ੼ȞȠȣĮ੝IJȠ૨LH³ZKLOHWKH\ZHUHJD]LQJDWWKHVN\ZKLOH KH ZDV JRLQJ´ WKXV FDXWLRXVO\ GLVWLQJXLVKLQJ EHWZHHQ ZKDW WKH GLVFLSOHV VHHDQG-HVXV¶JRLQJXS UDWKHUWKDQ੪ȢਕIJİȞ઀ȗȠȞIJİȢ਷ıĮȞİੁȢIJઁȞȠ੝ȡĮȞઁȞ ʌȠȡİȣȠȝ੼ȞȠȣĮ੝IJȠ૨ ³DVWKH\ZHUHVHHLQJKLPJRWRWKHVN\´7KHGLIIHUHQFH LVVOLJKWEXWVXJJHVWLYH,WLVRQO\LQWKHLQWHUSUHWLYHZRUGVRIWKHDQJHOVWKDW WKHGLVFLSOHVDUHDGPLWWHGWRKDYHVHHQਥșİ੺ıĮıșİ -HVXVʌȠȡİȣંȝİȞȠȞİੁȢ IJઁȞȠ੝ȡĮȞંȞY %XWIRUWKH>@:HVWHUQVFULEH੔ȞIJȡંʌȠȞSUHFOXGHV WKH UHDGHU IURP WDNLQJ WKHVH ZRUGV LQ PDVVLYH REMHFWL¿HG WHUPV ³LQ WKH VDPH ZD\´ WKDW LV ³P\VWHULRXVO\ LQ D FORXG´ 7KH VLQJXODU ਥȞ ਥıșોIJȚ ȜİȣțૌLQWKH:HVWHUQWH[WLVDKDUPRQL]DWLRQE\WKHVFULEHRI'ZLWK/XNH ਥȞਥıșોIJȚਕıIJȡĮʌIJȠ઄ıૉ   WUDQVODWH³DQGDFORXGHQYHORSHGKLP´P\HPSKDVLV   ௘7 KHUHLVRIFRXUVHWKHJUDPPDWLFDOTXHVWLRQRIWKHVXEMHFWRIਕʌȒȡșȘ:DV-HVXVWDNHQ DZD\IURPWKHPRUPDLQWDLQLQJWKHVXEMHFWRIWKH¿UVWSDUWRIWKHSKUDVH ZDVWKHFORXG WDNHQDZD\IURPWKHP"%XWWKLVGRHVQRWHVVHQWLDOO\DIIHFWWKHQDUUDWLYHSLFWXUH  ௘6FKQHLGHU$SRVWHOJHVFKLFKWH$QPJ³'LH:RONHKOOWHGHP]XIROJH-HVXVHLQ XQGLQQHUKDOEGHU:RONHZXUGHHUµYRQLKUHQ$XJHQZHJJHQRPPHQ¶´  ௘7 KHQRPLQDWLYHSDUWLFLSOHIJĮ૨IJĮİੁʌઆȞLQWKH%WH[WFRUUHVSRQGVWRWKHXQH[SUHVVHG  VXEMHFWRIਥʌȒȡșȘVF-HVXVZKHUHDVWKHXVHRIWKHDEVROXWHJHQLWLYHİੁʌંȞIJȠȢĮ੝IJȠ૨LVWKH SURSHUZD\WRGLVWLQJXLVKWKHVXEMHFWRIWKHPDLQVHQWHQFHVFȞİij੼ȜȘ IURPWKHVXEMHFWRI WKHJHQLWLYHFRQVWUXFWLRQVFWKHVSHDNHU-HVXV   ௘,WVHHPVWKHQWKDWWKH:HVWHUQVFULEHLVPRUHFRQVLVWHQWWKDQ(SS³$VFHQVLRQ´±  3HUVSHFWLYHV ±  EHOLHYHG 7KHUH ZDV QR QHHG WR ZLSH D SURKLELWHG PLVXQGHU VWDQGLQJDQGWKH\DUHZRUGVRIWKHDQJHOLLQWHUSUHWHVDIWHUDOO  ௘ਫȞ ਥıșોIJȚ Ȝİȣțૌ LV DWWHVWHG E\ क़   ' ( ॗ JLJ V\ 7KH GDW SO ਥıșȒıİıȚ >H[FHSW /NYORQO\KHUHLQWKH1HZ7HVWDPHQWIXUWKHU0DFF0DFF(XVHELXV +LVWRULD (FFOHVLDVWLFD  /&/  3KLOR 'H YLWD 0RVLV    /&/ @ LVQRWIURP਩ıșȘıȚȢ>VR-+7KD\HU$*UHHN(QJOLVK/H[LFRQRIWKH1HZ7HVWDPHQW%HLQJ

7KH7H[WVRI$FWV±



$FWV±7KHRPLVVLRQRIWKHVHFRQGİੁȢIJઁȞȠ੝ȡĮȞંȞ'SFJLJ YJ  ERPVV  LV GXH WR DQ DFFLGHQWDO RPLVVLRQ UDWKHU WKDQ WR D GHOLEHUDWH H[FLVLRQ +RZ GR WKHVH WZR GLIIHUHQW YHUVLRQV UHODWH WR HDFK RWKHU" eGRXDUG 'HOHEHFTXHKDVGHIHQGHGWKHWKHVLVWKDWWKHWH[WRI&RGH[%H]DHLQ$FWV UHSUHVHQWVDQDWWHPSWDWUHFWL¿FDWLRQRFFDVLRQHGE\WZRVW\OLVWLFGLVFUHSDQ FLHVLQWKHRULJLQDOWH[W )LUVWWKHUHYLVHUPXVWKDYHUHJDUGHGਫ਼ʌ੼ȜĮȕİȞDVSHUSOH[LQJDVLWFRXOG EHWDNHQLQWKLVFRQWH[WRQO\LQLWVOLWHUDOVHQVH SUHQGUHSDUHQGHVVRXVVXE FDSHUH +HURGRWXV+LVWRULDH3ODWR5HVSXEOLFDG EXWLQWKDW FDVHLWLVQRPRUHWKDQDV\QRQ\PRIWKHSUHFHGLQJਥʌĮ઀ȡȦVRXOHYHU 7KH HPSKDVLVLQWKHODVWSDUWRIWKHVHQWHQFHPXVWEHRQWKHFRPSOHPHQWDU\ਕʌઁ IJ૵ȞੑijșĮȜȝ૵ȞĮ੝IJ૵ȞEXWWKHSUHSRVLWLRQਕʌં¿WVSRRUO\WRਫ਼ʌ੼ȜĮȕİȞ 6HFRQGLQDGGLWLRQWKHGRXEOHਕʌઁIJ૵ȞੑijșĮȜȝ૵ȞĮ੝IJ૵ȞDQGȕȜİʌંȞIJȦȞ Į੝IJ૵ȞDUHVXSHUÀXRXV³2QSHXWHVWLPHUHQHIIHWTXHVL-pVXVHVWVRXVWUDLWj OHXUV\HX[ਕʌઁIJ૵ȞੑijșĮȜȝ૵ȞĮ੝IJ૵ȞF¶HVWELHQSDUFHTXHOHVDS{WUHVpWDL HQWHQWUDLQGHUHJDUGHUȕȜİʌંȞIJȦȞĮ੝IJ૵ȞeWDLWFHUpHOOHPHQWXWLOHGHGLUH FHWWHpYLGHQFH"´ 7KHUHDUHKRZHYHUVRPHFULWLFLVPVWKDWPXVWEHOHYHOOHGDJDLQVWWKHLGHD WKDWWKH:HVWHUQWH[WLVDPHUHVW\OLVWLF³LPSURYHPHQW´RIWKH%WH[W )LUVWIRUWKHH[DFWWUDQVODWLRQRIਫ਼ʌ੼ȜĮȕİȞVHHRXUFRPPHQWV>@VX SUD 6HFRQGਕʌઁੑijșĮȜȝ૵ȞĮ੝IJ૵ȞLVDV,DOUHDG\VXJJHVWHGDFRQÀDWHUHDG LQJ 7KLUGLWLVUHDOO\WKHTXHVWLRQZKHWKHUWKH%WH[WDVLWVWDQGVLVDVWURX EOHVRPH DV LV DVVXPHG DV IDU DV JUDPPDU DQG VW\OH DUH FRQFHUQHG 7KH SUHVHQW WH[W KDV D SHUIHFW FKLDVWLF VWUXFWXUH ZKLFK KDUGO\ QHHGV LPSURYH PVV

*ULPP¶V:LONH¶V&ODYLV1RYL7HVWDPHQWL7UDQVODWHG5HYLVHGDQG(QODUJHG*UDQG5DSLGV =RQGHUYDQ> @%UXFH$FWV*7WKHQRPLQDWLYH਩ıșȘıȚȢLVQRWDWWHVWHG SULRUWRWKHVHFRQGKDOIRIWKHVHFRQGFHQWXU\ &(@EXWIURPਥıșȒȢ(]UD0DFF /N$FWV-DV ZKLFK³LVWKHUHVXOWRIDQDWWHPSWWR PDNHWKHGDWLYHHQGLQJPRUHFRQVSLFXRXVE\GRXEOLQJLW´LQVWHDGRIਥıșોıȚȞ VHH%'$* VYਥıșȒȢ%'57KHDXWKHQWLFUHDGLQJLVWKHUHIRUHਥȞਥıșȒıİıȚȜİȣțĮ૙Ȣक़ FD$ %&ȌVSFODW(XV $VIRU'LWPLJKWEHFRQVLGHUHGZKHWKHUWKH/DWLQ FROXPQLQYHVWHFDQGLGD KDVLQÀXHQFHGWKHUHDGLQJ  ௘7 KH FKRLFH EHWZHHQ ȕȜ੼ʌȠȞIJİȢ क़  D  % (      V  DO  DQG ਥȝȕȜ੼ʌȠȞIJİȢक़  DF$&'ਥȞȕȜ Ȍॗ(XV LVGLI¿FXOWWRPDNHVLQFHERWKUHDGLQJVDUH HYHQO\ EDODQFHG LQ WKH 066 WUDGLWLRQ DQG ERWK UHDGLQJV DUH SRVVLEOH 0HW]JHU 7H[WXDO &RPPHQWDU\  8%6 DQG 1$  OHDYH WKH PDWWHU XQGHFLGHG E\ UHDGLQJ >ਥȝ@ȕȜ੼ʌȠȞIJİȢ 6FKQHLGHU$SRVWHOJHVFKLFKWH$QPLRSWVIRUWKHVLPSOHIRUP  ௘+DHQFKHQ$SRVWHOJHVFKLFKWH$QP0HW]JHU7H[WXDO&RPPHQWDU\E\WKH &RPPLWWHH¶VPDMRULW\ 3DUVRQV'HSDUWXUH  ௘6R5RSHV7H[WZLWKUHVHUYDWLRQVDOVR(SS³$VFHQVLRQ´3HUVSHFWLYHV±   ௘'HOHEHFTXH³$VFHQVLRQ´±HVS±  ௘'HOHEHFTXH³$VFHQVLRQ´



&KDSWHU7KH7H[WRIWKH$VFHQVLRQ1DUUDWLYHV

PHQWDQGWKHVHHPLQJO\VXSHUÀXRXVVWUHVVRQWKHYLVXDODVSHFWLVLQOLQH ZLWK/XNH¶VUHGDFWLRQDOSXUSRVHVDQGLVWKHRORJLFDOO\PRWLYDWHG )RXUWKIRUPFULWLFDOO\WKH:HVWHUQWH[WVHHPVWREHLQÀXHQFHGE\DQG KDUPRQL]LQJZLWK0NSDUUDQGHVSHFLDOO\ZLWK /XNH±SDUU -HVXVLVOHDYLQJWKHVFHQHLQPXFKWKHVDPHZD\DV0RVHVDQG(OLMDKKDG GHSDUWHG IURP WKH 7UDQV¿JXUDWLRQ VFHQH WKDW LV LQ D P\VWHULRXV FORXG LQ ZKLFKWKH\VLPSO\YDQLVK ,QWKHOLJKWRIZKDWZHREVHUYHGLQ/XNHDQG$FWVWKHGLI IHUHQFHV EHWZHHQ WKH WZR WH[WW\SHV JR EH\RQG WKH PHUHO\ VW\OLVWLF OHYHO WKH\ UHÀHFW D FULWLFDO WHQGHQF\ DQG DUH PRWLYDWHG E\ IDFWRUV IURP RXWVLGH LQFRQFUHWRWKHTXHVWLRQDERXWWKHERGLO\QDWXUHRI-HVXV¶DVFHQVLRQ7KH FRUROODU\ RI WKLV LV WKDW % LV HLWKHU D SHUIHFWO\ VXFFHVVIXO DPHOLRUDWLRQ RI WKH :HVWHUQ WH[W WKXV LQWURGXFLQJ DQ ³RUWKRGR[´ HPSKDVLV RQ WKH ERGLO\ DVFHQVLRQRI-HVXV RU'RUWKHSULPLWLYH:HVWHUQWH[W LVDFRUUXSWLRQRI WKH%WH[WLQWKDWLWUHPRYHVDQRIIHQVLYHZKLOHDOOWRRSK\VLFDOSRUWUD\DO RIWKHDVFHQVLRQ

&RQFOXVLRQV $QRYHUZKHOPLQJPDMRULW\RIWH[WXDOZLWQHVVHVEHJLQQLQJIURPक़ ZKRVH WH[W DW WKLV SRLQW JLYHV OLWWOH RU QR LQGLFDWLRQ RI EHLQJ ³WHQGHQWLRXV´ FRQ WUD 3DUVRQV DQG (KUPDQ  VXSSRUWV WKH $OH[DQGULDQ QRQ:HVWHUQ  WH[W RI/XNH±DQG$FWV±±VXSSRUWIRUWKHVRFDOOHG³VKRUWHU :HVWHUQ  UHFHQVLRQ´ LV FRQ¿QHG WR RQO\ SDUW RI WKH RWKHUZLVH GLYLGHG  :HVWHUQWUDGLWLRQ%RWKWH[WWUDGLWLRQV±WKLVQHHGVWREHVWUHVVHG±SURYLGH D FRKHUHQW QDUUDWLYH SLFWXUH WKURXJKRXW WKHLU WH[W VR WKDW WKH GLIIHUHQFHV EHWZHHQWKHWZRLQDOOOLNHOLKRRGKDYHDULVHQRQSXUSRVHWKDWLVRQWHQGHQ WLRXVJURXQGV7KHFRQFOXVLRQWKDWHPHUJHVIURPWKHSUHFHGLQJDQDO\VLVLV WKDWLQDOOWKUHHWH[WXDOXQLWV/N±$FWV± DGHYHORSPHQW RUFRUUXSWLRQIRUWKDWPDWWHU IURPWKH%WH[WWRWKH:HVWHUQWH[WJLYHVD PRUH FRQYLQFLQJ ZKLOH PRUH FRQVLVWHQW DQG FRKHUHQW  H[SODQDWLRQ RI WKH HYLGHQFH WKDQ WKH UHYHUVH 7KH :HVWHUQ UHYLVHU TXLWH >@ FRQVLVWHQWO\ UHPRYHV VW\OLVWLF FKURQRORJLFDO DQG WKHRORJLFDO REVWDFOHV WKURXJKRXW WKH ZKROH QDUUDWLYH DQG WKHUHE\ FUHDWHV D QHZ ³GHP\WKRORJL]HG´ QDUUDWLYH  ௘ȕȜİʌંȞIJȦȞ Į੝IJ૵Ȟ $  ਥʌȒȡșȘ %  țĮ੿  Ȟİij੼ȜȘ ਫ਼ʌ੼ȜĮȕİȞ Į੝IJઁȞ %¶  ਕʌઁ IJ૵Ȟ ੑijșĮȜȝ૵ȞĮ੝IJ૵Ȟ$¶   ௘6HH/RK¿QN+LPPHOIDKUW±±±  ௘/LNHZLVH +HDG ³&KULVWRORJ\ DQG 7H[WXDO 7UDQVPLVVLRQ 5HYHUHQWLDO $OWHUDWLRQV LQ WKH6\QRSWLF*RVSHOV´17 ±  ௘1RWLQWKHPRGHUQ³WHFKQLFDO´VHQVHRIWKHZRUGRIFRXUVHIRUWKH:HVWHUQVFULEHVWLOO UHPDLQV ZLWKLQ WKH FRQ¿QHV RI D ³P\WKRORJLFDO´ ZRUOGYLHZ WKUHHGHFNHU XQLYHUVH HWF  :KDWKH³GHP\WKRORJL]HV´LVQRWWKHXQGHUO\LQJZRUOGYLHZEXWWKHFKULVWRORJLFDODI¿UPD

&RQFOXVLRQV



SLFWXUHFRQIRUPWRKLVRZQWKHRORJLFDORUPRUHSUHFLVHO\FKULVWRORJLFDO  RXWORRNKHUHPRYHVDQ\VXJJHVWLRQWKDW-HVXVDVFHQGHGSK\VLFDOO\±ZLWKD ERG\RIÀHVKDQGERQHV±LQWRKHDYHQ 7KDWOHDYHVXVZLWKWKH¿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¿WLQ",WDSSHDUV IURPVHFRQGDQGWKLUGFHQWXU\VRXUFHVWKDWEHOLHILQDSK\VLFDOREVHUYDEOH DVFHQVLRQZDVDEHOLHIXQGHUFULWLFLVPLQJQRVWLFDQGGRFHWLFFLUFOHV)URP ZKDWZHNQRZIURP,UHQDHXVLWDSSHDUVWKDWIRULQVWDQFHWKH$OH[DQGULDQ JQRVWLFKHUHWLF%DVLOLGHVPLGVHFRQGFHQWXU\ &( SURSDJDWHGWKHLGHDRI DQLQYLVLEOHQRQSK\VLFDO DVFHQVLRQ$FFRUGLQJWR)LODVWULXVWKHKHUHWLF $SHOOHV FRQWHQGHG ³LSVXP   &KULVW  LQ FDHOXP VLQH FDUQH DVFHQGLVVH´ ,Q WKH $FWV RI -RKQ -HVXV LV VDLG WR KDYH GHSDUWHG XQVHHQ E\ WKH FURZGV ³:KHQ KH KDG VDLG WKLV WR PH -RKQ   KH ZDV WDNHQ XS ZKLOH QR RQH RI WKHFURZGVDZKLP´ȉĮ૨IJĮİੁȡȘțȩIJȠȢʌȡȩȢȝİਕȞİȜȒijșȘȝȘįİȞઁȢĮ੝IJઁȞ șİĮıĮȝȑȞȠȣIJ૵Ȟ੕ȤȜȦȞ ,UHQDHXV¶UHSHDWHGVWUHVVRQWKHYLVLELOLW\RIWKH DVFHQVLRQLVDWOHDVWLQSDUWDQDWWHPSWWRUHIXWH³KHUHWLFDO´YLHZVOLNHWKRVH RI %DVLOLGHV FXP VXLV 6LPLODU FRQFHUQV WR VWUHVV WKH SK\VLFDO QDWXUH RI WLRQWKDW-HVXVZHQWERGLO\LQWRKHDYHQ  ௘7 KHREMHFWLRQWKDW&RGH[%H]DHGRHVQRWGHOHWH0NDVZHOO(SS³$VFHQVLRQ´ ±3HUVSHFWLYHV GRHVQRWDIIHFWRXUDUJXPHQWVLQFHLWLVQRWWKH%H]DQVFULEH ZKRLVUHVSRQVLEOHIRUWKHWH[WXDOHPHQGDWLRQEXWRQHRIKLV³:HVWHUQ´SUHGHFHVVRUV  ௘6HHHJ8+RO]PHLVWHU³'HU7DJGHU+LPPHOIDKUWGHV+HUUQ´=.7K ± /DUUDxDJD$VFHQVLRQ±-*'DYLHV+H$VFHQGHGLQWR+HDYHQ$6WXG\LQWKH +LVWRU\RI'RFWULQH%D//RQGRQ/XWWHUZRUWK /RK¿QN+LPPHOIDKUW± 0+HQJHO³6HW]HGLFK]XPHLQHU5HFKWHQ'LH,QWKURQLVDWLRQ&KULVWL]XU5HFKWHQ*RWWHV XQG3VDOP´LQ03KLORQHQNRHG /H7U{QHGH'LHX:8177ELQJHQ0RKU 6LHEHFN ±  ௘, UHQDHXV$GYHUVXVKDHUHVHV3*HG$5RXVVHDX/'RXWUHOHDXHGV  ,UpQpHGH/\RQ&RQWUHOHVKpUpVLHVeGLWLRQFULWLTXH6&3DULV&HUI ± WUDQVO$1)D  ௘)LODVWULXV+DHUHVHV3*  ௘$FWV RI -RKQ    HG 0 %RQQHW $FWD DSRVWRORUXP DSRFU\SKD  /HLS]LJ 0HQGHOVVRKQ   UHSU +LOGHVKHLP 2OPV    ( -XQRG -' .DHVWOL $FWD -RDQQLV&&KU6$7XUQKRXW%UHSROV 2QWKHEDFNJURXQGRIWKH$FWVRI-RKQ VHH 3- /DOOHPDQ 7KH $FWV RI -RKQ $ 7ZR6WDJH ,QLWLDWLRQ LQWR -RKDQQLQH *QRVWLFLVP 6$$$/HXYHQ3HHWHUV   ௘&I ,UHQDHXV $GYHUVXV KDHUHVHV  IJ੽Ȟ ਩ȞıĮȡțȠȞ İੁȢ IJȠઃȢ Ƞ੝ȡĮȞȠઃȢ ਕȞȐȜȘȥȚȞ IJȠ૨਱ȖĮʌȘȝȑȞȠȣȋȡȚıIJȠ૨੉ȘıȠ૨IJȠ૨ȀȣȡȓȠȣਲȝ૵Ȟ3*6&$1)D&I



&KDSWHU7KH7H[WRIWKH$VFHQVLRQ1DUUDWLYHV

WKHDVFHQVLRQLQUHVSRQVHWRJQRVWLFDQGGRFHWLFKHUHVLHVFRXOGHDVLO\EH DGGXFHG >@ IURP WKLUGFHQWXU\ )DWKHUV $OWKRXJK LW ZRXOG EH XQZDU UDQWHG WR DWWULEXWH WKH :HVWHUQ DVFHQVLRQ WH[W GLUHFWO\ WR WKH LQÀXHQFH RI DKHUHWLFOLNHVD\%DVLOLGHVLWDSSHDUVWKDWWKHVHFRQGDQGWKLUGFHQWXU\ FKULVWRORJLFDOFRQWURYHUVLHVSURYLGHDPRVWSODXVLEOHVHWWLQJLQZKLFKDUDGL FDO UHLQWHUSUHWDWLRQ RI WKH DVFHQVLRQ QDUUDWLYH VXFK DV XQGHUWDNHQ E\ RXU ³:HVWHUQ´VFULEHFRXOGWDNHSODFH8QOHVVRWKHUFRQYLQFLQJHYLGHQFHWRWKH FRQWUDU\FRPHVXSZHPXVWFRPHWRWKHFRQFOXVLRQWKDWWKHYLHZWKDWWKH ³:HVWHUQ´DVFHQVLRQYHUVLRQLVD³KHUHWLFDOFRUUXSWLRQRIVFULSWXUH´UHPDLQV WREHSUHIHUUHG

3RVWVFULSW 6LQFHWKHRULJLQDOSXEOLFDWLRQRIWKLVDUWLFOHWKHWH[WXDOVWDWXVRI/XNH$FWV FRQWLQXHV WR EH GLVFXVVHG VHH HJ WKH UHOHYDQW DUWLFOHV LQ 7 1LFNODV 0 7LOO\ HGV 7KH%RRNRI$FWVDV&KXUFK+LVWRU\7H[W7H[WXDO7UDGLWLRQV DQG $QFLHQW ,QWHUSUHWDWLRQV±'LH $SRVWHOJHVFKLFKWH DOV .LUFKHQJHVFKLFKWH 7H[W 7H[WWUDGLWLRQHQ XQG DQWLNH $XVOHJXQJHQ %=1:  %HUOLQ 1HZ EHWZHHQ(KUPDQ(SSDQGP\VHOI@LOOXVWUDWHVKRZ VHULRXVO\ WKHRORJLFDO LVVXHV PXVW EH WDNHQ LQ VWXG\LQJ WKH KLVWRU\ RI WKH WH[W´>'&3DUNHU7KH/LYLQJ7H[WRIWKH*RVSHOV&DPEULGJH&DPEULGJH 8QLYHUVLW\3UHVV @7KHLVVXHVSXWIRUZDUGE\%DUW (KUPDQDQG 0LNHDO 3DUVRQV LQGHHG GR GHVHUYH WKH JUHDWHVW DWWHQWLRQ HYHQ WKRXJK , KDGWRFRQFOXGHDQGVWLOOGR WKDWWKHLUWHQGHQF\K\SRWKHVLVGLGQRWZRUNIRU WKHSDUWLFXODUWH[WVXQGHUFRQVLGHUDWLRQ7KHLUWHQGHQF\FULWLFDODSSURDFKDV VXFKFRQVWLWXWHVDUHDOSURJUHVVLQELEOLFDOVFKRODUVKLSWREHWDNHQZLWKWKH XWPRVW VHULRXVQHVV 6HH DOVR 0: 0DUWLQ ³'HIHQGLQJ WKH µ:HVWHUQ 1RQ ,QWHUSRODWLRQV¶7KH&DVHIRUDQ$QWL6HSDUDWLRQLVW7HQGHQ]LQWKH/RQJHU $OH[DQGULDQ5HDGLQJV´-%/ ±

&KDSWHU

$VVXPSWXVHVWLQFDHOXP 5DSWXUHDQG+HDYHQO\([DOWDWLRQ LQ(DUO\-XGDLVPDQG/XNH$FWV ,QWURGXFWLRQ 7KH /XNDQ DVFHQVLRQ VWRU\ /N ± $FWV ±  PDNHV XV DFXWHO\ DZDUHRIZKDW*(/HVVLQJFDOOHG³GHUJDUVWLJHEUHLWH*UDEHQ´WKDWVHSD UDWHV WKH ZRUOG RI WKH %LEOH IURP RXU PRGHUQ SRVW(QOLJKWHQPHQW  VRFL HW\0RGHUQUHDGHUVDUHVWUXFNLIQRWHPEDUUDVVHGE\WKHQDLYHFRVPRORJ\ WKDW VHHPV WR XQGHUOLH /XNH¶V VWRU\ SUHVHQWDWLRQ $V LI RQH FRXOG JDLQ DF FHVV WR WKH KHDYHQO\ UHDOP DQG EHFRPH LPPRUWDO E\ VLPSO\ PRXQWLQJ D FORXG7KHVWXG\RIFRPSDUDWLYHUHOLJLRQKDVXQFRYHUHGDQXQHDV\QXPEHU RIFRPSHWLWLYHDVFHQVLRQVWRULHVLQIUD VWRULHVZKLFKKDYHQRWLQIUHTXHQWO\ EHHQDVRXUFHRIHPEDUUDVVPHQWIURPWKHYHU\EHJLQQLQJVRI&KULVWLDQLW\ (DUO\&KULVWLDQDSRORJHWLFFRXOGYHU\RIWHQGRQREHWWHUWKDQDVFULELQJVXFK P\WKVWRGHPRQLFLPLWDWLRQVRUZKHQWKH\DQWHGDWHGWKHOLIHRI&KULVWWR GLDEROLFSUH¿JXUHPHQWVRI&KULVW¶VUHDODVFHQVLRQ$QXPEHURIKLVWRULFDO ௘2ULJLQDOO\ SXEOLVKHG LQ $: =ZLHS ³$VVXPSWXV HVW LQ FDHOXP 5DSWXUH DQG +HDYHQO\([DOWDWLRQLQ(DUO\-XGDLVPDQG/XNH$FWV´LQ)$YHPDULH+/LFKWHQEHUJHU HGV  $XIHUVWHKXQJ ± 5HVXUUHFWLRQ 7KH )RXUWK 'XUKDP7ELQJHQ 5HVHDUFK 6\PSRVLXP 5HVXUUHFWLRQ7UDQV¿JXUDWLRQDQG([DOWDWLRQLQ2OG7HVWDPHQW$QFLHQW-XGDLVPDQG(DUO\ &KULVWLDQLW\ 7ELQJHQ 6HSWHPEHU   :817  7ELQJHQ 0RKU 6LHEHFN   ±$)RUVFKXQJVEHULFKWRIDVFHQVLRQVFKRODUVKLSVLQFH')6WUDXVVXSWRDQGD ELEOLRJUDSK\RIERRNVDQGDUWLFOHVRQWKHDVFHQVLRQLQ/XNH$FWVSXEOLVKHGEHWZHHQ± DUHIRXQGLQ$:=ZLHS7KH$VFHQVLRQRIWKH0HVVLDKLQ/XNDQ&KULVWRORJ\176 /HLGHQ1HZ@PDQLIHVWDWLRQVRI-HVXVZHUH³DSSHDUDQFHVIURPKHDYHQ´  /XNH LV VDLG WR KDYH SRVWSRQHG -HVXV¶ GHSDUWXUH WR KHDYHQ DQG KLV VXEVH TXHQWHQWKURQHPHQWIRUIRUW\GD\VWKXVKDYLQJ-HVXVGZHOODURXQGDPRQJ KLVIROORZHUVLQDTXDVLHDUWKERXQGFRQGLWLRQULVHQEXWQRW\HWH[DOWHG $OWKRXJKWKLVLVWKHSRVLWLRQRIDVLJQL¿FDQWVWUDQGRIELEOLFDOVFKRODUVKLS ,DPQRWDOWRJHWKHUFRQYLQFHGWKDWWKLVOLQHRILQWHUSUHWDWLRQVXI¿FLHQWO\DO ORZV/XNHWRVSHDNIRUKLPVHOI$OWKRXJK/XNHLVVXUHO\QRWDWKHRORJLDQRI WKHVWDWXUHRIVD\WKH)RXUWK(YDQJHOLVWRU3DXOKHQHYHUWKHOHVVLVHQWLWOHG WRKLVRZQYLHZVDQGFRQYLFWLRQVDQGGHVHUYHVWREHWUHDWHGDVVXFKDVD FRKHUHQWWKLQNHU,PHDQ XQOHVVFRPSHOOLQJHYLGHQFHVXJJHVWVRWKHUZLVH ,QP\$VFHQVLRQRIWKH0HVVLDK,KDYHRIIHUHGDQDOWHUQDWLYHDVVHVVPHQW RI /XNH¶V XQGHUVWDQGLQJ RI WKH UHVXUUHFWLRQH[DOWDWLRQDVFHQVLRQ FRPSOH[ ODUJHO\ EDVHG RQ WKH IRUPFULWLFDO FODVVL¿FDWLRQ RI WKH DVFHQVLRQ VWRU\ DV D ³UDSWXUH VWRU\´ (QWUFNXQJVHU]lKOXQJ  LQ WKH SHUFHSWLRQ RI D ODWH ¿UVW FHQWXU\&KULVWLDQ³/XNH´ VWDQGLQJLQWKHELEOLFDOPRQRWKHLVWLF WUDGLWLRQ ,QZKDWIROORZV,ZLOOEULHÀ\VXPPDULVHWKHPDMRUOLQHVRIWKHDUJXPHQWDQG UH¿QHQRZWKDWVSDFHSHUPLWV VRPHRIWKHFULWLFDOLVVXHVLQYROYHG:KDWLV WKHVLJQL¿FDQFHRIWKHDVFHQVLRQ",VLWDSSURSULDWHWRVSHDNRIWKHDVFHQVLRQ HYHQW LQ WHUPV RI DQ H[DOWDWLRQ ZKDW LV WUDGLWLRQDOO\ FDOOHG &KULVW¶V VHV VLRDGGH[WHUDP'HL ",ILWWXUQVRXWDV,ZLOODUJXHLQWKLVDUWLFOHWKDWLQ OLQHZLWKWKHHDUO\&KULVWLDQUHVXUUHFWLRQNHU\JPD/XNHUHJDUGVWKH(DVWHU HYHQWDVWHUPLQXVDTXRRIWKHH[DOWDWLRQUDWKHUWKDQWKHDVFHQVLRQ³RQWKH IURPHDUWKHYHQ\HDUVDIWHUWKHUHVXUUHFWLRQ3LVWLV6RSKLD 6HHIXUWKHU&KDSWHURI WKHSUHVHQWZRUN  ௘&RQFLVH VXUYH\V RI DOWHUQDWLYH DVFHQVLRQ WHUPV DUH IRXQG LQ : %DXHU 'DV /HEHQ -HVXLP=HLWDOWHUGHUQHXWHVWDPHQWOLFKHQ$SRNU\SKHQ7ELQJHQ0RKU6LHEHFNUHSU 'DUPVWDGW:LVVHQVFKDIWOLFKH%XFKJHVHOOVFKDIW ±DQG8+RO]PHLVWHU³'HU 7DJGHU+LPPHOIDKUWGHV+HUUQ´=.7K ±  ௘6HH * /RK¿QN 'LH +LPPHOIDKUW -HVX 8QWHUVXFKXQJHQ ]X GHQ +LPPHOIDKUWV XQG (UK|KXQJVWH[WHQEHL/XNDV6W$170XQLFK.|VHO ±  ௘5HFHQWO\HJ0.DUUHU-HVXV&KULVWXVLP1HXHQ7HVWDPHQW17'(UJlQ]XQJVUHLKH *|WWLQJHQ9DQGHQKRHFN 5XSUHFKW   ௘6LQFHP\FRQFHUQLVZLWK /XNH¶VSHUFHSWLRQRIWKHPDWWHULWLVQRWQHFHVVDU\WRGLV FXVVWKHWKHVLVRI-$75RELQVRQ -HVXVDQG+LV&RPLQJ7KH(PHUJHQFHRID'RFWULQH /RQGRQ 6&0   ± LGHP ³7KH 0RVW 3ULPLWLYH &KULVWRORJ\ RI $OO"´  

7KH5HVXUUHFWLRQDQG([DOWDWLRQ.HU\JPD



IRUWLHWKGD\´ZKDWWKHQLVWKHVLJQL¿FDQFHRIWKHDVFHQVLRQLILWLVQRWD GUDPDWLFDQGYLVLEOHDFWRIHQWKURQHPHQW" %HIRUHDFRQFOXVLYHDQVZHUWRWKHVHTXHVWLRQVFDQEHJLYHQRQHQHHGVWR EHFOHDURQWKH³SUHJLYHQV´DQGWKHGH¿QLWLRQVWKDWDUHEHLQJXVHG,ZLOO WKHUHIRUH¿UVWEULHÀ\VXPPDULVHZKDWLQP\YLHZDUHWKHEURDGSDUDPHWHUV RIHDUO\&KULVWLDQSUHDFKLQJRQWKH(DVWHUHYHQWVDV/XNHZRXOGKDYHKHDUG LWRQDUHJXODU6XQGD\PRUQLQJLQKLVORFDOFKXUFK6HFRQG,ZLOOGLVFXVV VRPH RI >@ WKH GH¿QLWLRQV PRVW SHUWLQHQW WR WKH GHEDWH LQ SDUWLFXODU ³DVFHQVLRQ´ ³UDSWXUH´ DQG ³H[DOWDWLRQ´ EHFDXVH PXFK KLQJHV RQ D SURSHU XVHRIWKHWHUPV%\WKHQZHFDQWXUQWR/XNH$FWVWR¿QGRXWZKHUH/XNH VWDQGVDQGGUDZWKHQHFHVVDU\FRQFOXVLRQV

7KH(DUO\&KULVWLDQ5HVXUUHFWLRQDQG([DOWDWLRQ.HU\JPD $FFRUGLQJWRDEURDGFRQVHQVXVRIELEOLFDOVFKRODUVKLSWKHSURFODPDWLRQRI WKHUHVXUUHFWLRQRI-HVXVEHORQJVWRWKHFRUHRIWKHHDUO\&KULVWLDQNHU\JPD HJ  &RU  $FWV ±  7KH DXWKRU RI $FWV WKRXJK ZULWLQJ IURP D FKURQRORJLFDOGLVWDQFHUHSHDWHGO\DQGHPSKDWLFDOO\UHSRUWVWKDWWKHUHVXU UHFWLRQRI-HVXVZDVWKHPRVWIXQGDPHQWDODI¿UPDWLRQRIWKHHDUO\DSRVWROLF SUHDFKLQJ ³$P $QIDQJ GHU 9HUNQGLJXQJ GHU 8UJHPHLQGH´ VD\V +DQV &RQ]HOPDQQ³VWDQGGLH$XVVDJHGD‰*RWWGHQJHNUHX]LJWHQ-HVXVQLFKWLP 7RGHJHODVVHQVRQGHUQYRQGHQ7RWHQDXIHUZHFNWKDW´5HJLQDOG+)XOOHU KDVDUJXHGLQVLPLODUYHLQ³7KHUHVXUUHFWLRQRI-HVXVIURPWKHGHDGZDV UHSU LQ LGHP 7ZHOYH 1HZ 7HVWDPHQW 6WXGLHV 6%7  /RQGRQ 6&0   ± ) +DKQ&KULVWRORJLVFKH+RKHLWVWLWHO,KUH*HVFKLFKWHLPIUKHQ&KULVWHQWXP)5/$17 *|WWLQJHQ9DQGHQKRHFN 5XSUHFKW87%: ±HWDOWKDW-HVXV ZRXOGEHH[DOWHGRQO\DWWKHSDURXVLD)RU/XNH-HVXVLVWKHDOUHDG\H[DOWHG/RUG  ௘$OWKRXJK/XNHGRHVQRWGDWHWKHDVFHQVLRQH[DFWO\³RQWKHIRUWLHWKGD\´KHRQO\VD\V WKDW-HVXVPDGHKLVDSSHDUDQFHVįȚૃਲȝİȡ૵ȞIJİııİȡ੺țȠȞIJĮ³GXULQJDSHULRGRIIRUW\GD\V´  WKLV LV XVXDOO\ WDNHQ DV LPSOLHG E\ WKH QDUUDWLYH %XW FI -RKQ &KU\VRVWRP +RPLOLDH LQ $FWDDSRVWRORUXPȅ੝țİੇʌİȉİııĮȡȐțȠȞIJĮਲȝȑȡĮȢਕȜȜ੹ǻȚ¶ਲȝİȡ૵ȞIJİııĮȡȐțȠȞIJĮ ਫijȓıIJĮIJİ Ȗ੹ȡ țĮ੿ ਕijȓʌIJĮIJȠ ʌȐȜȚȞ 3*  131)   $FFRUGLQJ WKH &KU\VRVWRP¶V FDOFXODWLRQVWKHDVFHQVLRQWRRNSODFHRQDVDEEDWKǻȠțİ૙įȑȝȠȚțĮ੿ਥȞıĮȕȕȐIJ૳ȖİȖȠȞȑȞĮȚ IJĮ૨IJĮ ȅ੝ Ȗ੹ȡ ਗȞ Ƞ੢IJȦ țĮ੿ IJઁ įȚȐıIJȘȝĮ ਥįȒȜȦıİȞ İੁʌઅȞ ਝʌઁ ੕ȡȠȣȢ IJȠ૨ țĮȜȠȣȝȑȞȠȣ ਫȜĮȚ૵ȞȠȢ ੖ ਥıIJȚȞ ਥȖȖઃȢ ੊İȡȠȣıĮȜ੽ȝ ıĮȕȕȐIJȠȣ ਩ȤȠȞ ੒įઁȞ İੁ ȝ੽ ੪ȡȚıȝȑȞȠȞ IJȚ ȝોțȠȢ ੒įȠȚʌȠȡȓĮȢ ਥȕȐįȚȗȠȞ ਥȞ IJૌ ਲȝȑȡ઺ IJȠ૨ ıĮȕȕȐIJȠȣ  3*  131)   DQG WKH RXWSRXULQJ RI WKH 6SLULW DW 3HQWHFRVW ³HLJKW RU QLQH GD\V ODWHU´ ǻȚ੹ IJȠ૨IJȠ Ƞ੝į੻ İ੝șȑȦȢ ਕȞİȜșȩȞIJȠȢ Į੝IJȠ૨ ʌĮȡĮȖȓȞİIJĮȚ ਕȜȜ੹ ȝİIJ੹ ੑțIJઅ ਲ਼ ਥȞȞȑĮ ਲȝȑȡĮȢ  3*  131)    $FWV±&I-RKQ&KU\VRVWRP+RPLOLDHLQ$FWD DSRVWRORUXPȀĮ੿Ȗ੹ȡIJȠ૨IJȠȝȐȜȚıIJȐਥıIJȚIJȠȣIJ੿IJઁȕȚȕȜȓȠȞਕʌȩįİȚȟȚȢਕȞĮıIJȐıİȦȢ3* 131)   ௘+&RQ]HOPDQQ*UXQGUL‰GHU7KHRORJLHGHV1HXHQ7HVWDPHQWVEHDUEHLWHWY$/LQ GHPDQQ87%:7ELQJHQ0RKU6LHEHFN 



&KDSWHU$VVXPSWXVHVWLQFDHOXP

WKHFHQWUDOFODLPRIWKHFKXUFK¶VSURFODPDWLRQ7KHUHZDVQRSHULRGZKHQ WKLV ZDV QRW VR´ 0RUH UHFHQWO\ 0DUWLQ .DUUHU ZURWH ³'LH FKULVWOLFKH hEHUOLHIHUXQJ> YRQGHU$XIHUVWHKXQJ-HVX@EHJLQQWVHKUIUK$QLKUHP $QIDQJ VWHKW GLH ODXW 3DXOXV UHWWHQGH *ODXEHQVDXVVDJH ³*RWW HUZHFNWH LKQ -HVXV GHQ +HUUQ  DXV 7RWHQ´ 5|P  ´ $FFRUGLQJ WR .DUUHU ZH ¿QGKHUH³HLQ3DUDGLJPDWKHRORJLVFKHU*HPHLQVDPNHLWGHUXUFKULVWOLFKHQ *HPHLQGHN UHLVH´ 6LPLODUO\ 3HWHU 6WXKOPDFKHU KDV UHFHQWO\ GHVFULEHG ³GDVXUFKULVWOLFKH$XIHUZHFNXQJVEHNHQQWQLV´DV³HLQJDQ]HQWVFKHLGHQGH>V@ =HQWUDOG DWXPGHU%LEOLVFKHQ7KHRORJLHGHV1HXHQ7HVWDPHQWV´ ,QLWVDWWHPSWWRDUWLFXODWHWKHPHDQLQJRIWKHUHVXUUHFWLRQIRU&KULVWWKH HDUO\ FKXUFK PDGH LQWHQVLYH XVH RI WKH 2OG 7HVWDPHQW VFULSWXUHV  (VSH >@FLDOO\ 3VDOP  XQGHUVWRRG PHVVLDQLFDOO\ SOD\HG D VLJQL¿FDQW UROH LQ HDUO\ &KULVWLDQLW\ DV ³SURRIIURPVFULSWXUH´ IRU WKH UHVXUUHFWLRQH[DOWD WLRQRI-HVXV³7KH/RUGVD\VWRP\ORUGµ6LWDWP\ULJKWKDQGXQWLO,PDNH \RXUHQHPLHV\RXUIRRWVWRRO¶´3V1569 $FFRUGLQJO\DPRQJWKH YDULRXV RWKHU   LQWHUSUHWDWLYH PRGHOV WKH UHVXUUHFWLRQ HYHQW KDV EHHQ XQ GHUVWRRGDVDQDFWRIHQWKURQHPHQWWKHPRPHQWLQZKLFK&KULVWWKHȀ઄ȡȚȠȢ ȝȠȣ RI 3VDOP   DVFHQGHG KLV KHDYHQO\ WKURQH ,Q WKH WUDGLWLRQ WDNHQ  ௘5+ )XOOHU 7KH )RUPDWLRQ RI WKH 5HVXUUHFWLRQ 1DUUDWLYHV 1HZ @LPSRUWDQWLIQRWFRQVWLWXWLYH LQWKHIRUPDWLRQRIWKHHDUO\&KULVWLDQ H[DOWDWLRQNHU\JPDLWPD\YHU\ZHOOEHWKDWWKHFRQFHSWDWDJLYHQSRLQW RI WLPH KDV EHJXQ WR OHDG D OLIH RI LWV RZQ ,W LV WKHUHIRUH PHWKRGRORJL FDOO\ VDIHU WR WDNH WKH ZKROH UDQJH RI H[DOWDWLRQ DQG WKURQH LPDJHU\ LQWR FRQVLGHUDWLRQ$VDQXPEHURIVSHFLDOLVWVWXGLHVKDYHVKRZQ¿UVWFHQWXU\ -XGDLVP KDV DQ LPSUHVVLYH OLVW RI YHQHUDEOH KLVWRULFDO ¿JXUHV ³H[DOWHG WR KHDYHQ´RUDWOHDVWZLWKDKHDYHQO\VWDWXV0DQ\VSHFXODWLRQVHJZHUH EXLOWRQWKHSOXUDOLW\RIWKURQHVLQ'DQLHO5HFHQWVWXGLHVRQWKHODWHVW 4XPUDQSXEOLFDWLRQVKDYHVKRZQWKHVHFWDULDQV´LQWHUHVWLQH[DOWHG¿JXUHV LQKHDYHQLQIUD +RZHYHUDVVRRQDVRQHFULWLFDOO\JODQFHVRYHUWKHH[DOWD WLRQWH[WVXQGHUFRQVLGHUDWLRQ³H[DOWDWLRQ´DSSHDUVWREHTXLWHDQHOXVLYH WHUP,QPDQ\FDVHVLWLVQRPRUHWKDQDPHWDSKRULFDOH[SUHVVLRQRISUDLVH ZKLFKLVQRWQHFHVVDULO\FRQQHFWHGZLWKWKHHQGRIRQH¶VOLIHLILWKDVVXFK D ³ELRJUDSKLFDO´ 6LW] LP /HEHQ DW DOO  $ FOHDU QRQ4XPUDQ  H[DPSOH RI ௘*HQ-XE%DU-GW7RE±67$E% ௘+DKQ+RKHLWVWLWHO  ௘+DKQ+RKHLWVWLWHOQRZDFFHSWHGE\+HQJHO³6HW]HGLFK´  ௘+HQJHO³6HW]HGLFK´SDVVLP  ௘-'*'XQQ&KULVWRORJ\LQWKH0DNLQJ$Q,QTXLU\LQWRWKH2ULJLQVRIWKH'RFWULQH RI WKH ,QFDUQDWLRQ /RQGRQ 6&0    HVS ± /: +XUWDGR 2QH *RG 2QH/RUG(DUO\&KULVWLDQ'HYRWLRQDQG$QFLHQW-HZLVK0RQRWKHLVP/RQGRQ6&0     ௘&IDOVR3V6HHHJ7$E$±$GDP (Q± WKH(OHFW2QH 40HOFK0HOFKL]HGHN 7-RE±-RE 7%HQM(QRFK6HWK $EUDKDP,VDDF-DFRE FIE6DQE 





&KDSWHU$VVXPSWXVHVWLQFDHOXP

WKLVJHQUHLVIRXQGLQ(]HNLHOWKH7UDJHGLDQZKLFKGHVFULEHVDYLVLRQDU\  KHDYHQO\H[DOWDWLRQDQDFWRIHQWKURQHPHQW RI0RVHV ,QWKHPDMRULW\RIFDVHVH[DOWDWLRQGRHVQRWFRQYH\WKHQRWLRQRIERGLO\ DVFHQW UDSWXUH  RQO\ WKH VRXOV DUH EHLQJ WUDQVSRUWHG WR KHDYHQ 0RVW RI WKHH[DOWHG¿JXUHVRI¿UVWFHQWXU\-XGDLVPKDGGLHGDQDWXUDOGHDWKLQWKH ELEOLFDOWUDGLWLRQ([DOWDWLRQODQJXDJHWKHUHIRUHGRHVQRWDOZD\VKDYHWREH WDNHQZLWKVWULFWOLWHUDOQHVVLHDSHUVRQH[DOWHGE\*RGWRDKLJKHUUDQN  QHHGQRWQHFHVVDULO\EHH[DOWHGWR*RGLQKHDYHQ  7KHVHFRQGWHUPLQQHHGRIIXUWKHUTXDOL¿FDWLRQLV³DVFHQVLRQ´7KLVWHUP LVDVDPELJXRXVDV³H[DOWDWLRQ´VLQFHLWFRQYH\VDZLGHUDQJHRIFRQQRWD WLRQV)RUPFULWLFDOO\³DVFHQVLRQ´LVEHVWWDNHQDVDFROOHFWLYHWHUP,QKLV H[FHOOHQW>@GRFWRUDOGLVVHUWDWLRQRQWKH/XNDQDVFHQVLRQDQGH[DOWDWLRQ WH[WV*HUKDUG/RK¿QNKDVIRFXVVHGDWWHQWLRQRQWKHZLGHYDULHW\RIDVFHQ VLRQODQJXDJHLQWKHDQFLHQWVRXUFHV 2QWKHEDVLVRIDIXOOVFDOHLQYHVWLJD WLRQRIWKHUHOHYDQWWH[WVLQ*UDHFR5RPDQDQG-HZLVKVRXUFHVKHPDQDJHG WRLGHQWLI\DQXPEHURIGLIIHUHQWDVFHQVLRQW\SHVWKHKHDYHQO\MRXUQH\RU DVFHQWWRKHDYHQ+LPPHOVUHLVH WKHDVVXPSWLRQRIWKHVRXO$XIQDKPHGHU 6HHOH WKHUDSWXUH(QWUFNXQJ WKHDVFHQWDWWKHHQGRIDQDSSHDUDQFHHWF HWF6LQFHJHQUHGHWHUPLQHVUHDGLQJVWUDWHJ\LWLVHVVHQWLDOWRVSHFLI\ZKDW W\SHRIDVFHQVLRQLVEHLQJXVHGLQDJLYHQFRQWH[W 7KLUG GLIIHUHQW IURP ERWK ³H[DOWDWLRQ´ DQG ³DVFHQVLRQ´ WKH QRWLRQ RI ³UDSWXUH´LQWKHVHQVHRIOHLEOLFKH(QWUFNXQJ UHSUHVHQWVDUHODWLYHO\FOHDU FXWFRQFHSWXDOL]DWLRQWRWKHH[FOXVLRQRIRWKHUV,GH¿QH³UDSWXUH´DVDERGLO\ WUDQVODWLRQLQWRWKH³EH\RQG´DVWKHFRQFOXVLRQRIRQH¶VHDUWKO\OLIHZLWKRXW WKHLQWHUYHQWLRQRIGHDWK7KLVW\SHRIDVFHQVLRQLVFOHDUO\GLVWLQJXLVKHG  ௘(]HNLHO WKH 7UDJHGLDQ DV TXRWHG E\ (XVHELXV 3UDHSDUDWLR (YDQJHOLFD  DQG &OHPHQW RI $OH[DQGULD 6WURPDWD  ±  *&6 ± ERWK FLWLQJ $OH[DQGHU 3RO\KLVWRU>HG$0'HQLV)UDJPHQWDSVHXGHSLJUDSKRUXPTXHVXSHUVXQWJUDHFDXQDFXP KLVWRULFRUXPHWDXFWRUXP-XGDHRUXPKHOOHQLVWDUXPIUDJPHQWLV6973/HLGHQ(-%ULOO  I@GHVFULEHVDKHDYHQO\H[DOWDWLRQYLVLRQRI0RVHVDW0W6LQDLGHVFULELQJKLV LQYHVWLWXUH DV NLQJ ıțોʌIJȡȠȞ į੼ ȝȠȚ ʌĮȡ੼įȦțİ țĮ੿ İੁȢ șȡંȞȠȞ ȝ੼ȖĮȞ  İੇʌİȞ țĮșોıșĮȚǜ ȕĮıȚȜȚțઁȞįૃ਩įȦț੼ȝȠȚįȚ੺įȘȝĮțĮ੿Į੝IJઁȢਥțșȡંȞȦȞȤȦȡ઀ȗİIJĮȚ DQGKLVLQVWDOODWLRQWRWKH SURSKHWLFRI¿FH੕ȥİȚIJ੺IJૃ੕ȞIJĮIJ੺IJİʌȡȠIJȠ૨IJ੺șૃ੢ıIJİȡȠȞ   ௘6HH+*/LGGHOO56FRWW+6-RQHV50F.HQ]LHHWDO$*UHHN(QJOLVK/H[LFRQ :LWKD5HYLVHG6XSSOHPHQW2[IRUG&ODUHQGRQ>@  :%DXHU *ULHFKLVFKGHXWVFKHV :|UWHUEXFK ]X GHQ 6FKULIWHQ GHV 1HXHQ 7HVWDPHQWV XQG GHU IUK FKULVWOLFKHQ/LWHUDWXUHGV.XQG%$ODQG%HUOLQ1HZ@WHUPLQRORJ\XVHG1RWLQIUHTXHQWO\IRUH[DPSOHGHDWKWHUPLQRO RJ\LVXVHGIRUSHUVRQVWDNHQXSDOLYHLQWRKHDYHQDOWKRXJK VWULFWRVHQVX UDSWXUHDQGGHDWKDUHPXWXDOO\H[FOXVLYHFRQFHSWXDOL]DWLRQV%XWRQOHYHO RIFRQWHQWWKHOLQHVRIGHPDUFDWLRQEHWZHHQWKHYDULRXVIRUPVFDQEHQHDWO\ GUDZQ7KHSRLQWRIUDSWXUHEHOLHILVWKDWRQHGRHVQRWGLHDQGGHVFHQGLQWR 6KHRO ,IXOO\DJUHHZLWK/RK¿QNDQGRWKHUVWKDWIRUPJHVFKLFKWOLFKWKH/XNDQ DVFHQVLRQ VWRU\ EHORQJV WR WKH ³UDSWXUH´ (QWUFNXQJ  W\SH RI DVFHQVLRQ +RZHYHUDFORVHUORRNLQWRWKH³PHFKDQLFV´RIUDSWXUHWKLQNLQJLQWKHDQ FLHQWZRUOGUHYHDOVWKDWRQHVKRXOGEHKHVLWDQWWRVXEVXPHDOOUDSWXUHVXQGHU WKHVDPHFDWHJRU\ 7KH ³UDSWXUH´ FDWHJRU\ DSSHDUV WR EH D UDWKHU ZLGHO\ XVHG FRQFHSW LQ DQFLHQW VRXUFHV 5DSWXUH UHSRUWV DUH IRXQG LQ $NNDGLDQ DQG 6XPHULDQ ³(QWUFNXQJXPVFKUHLEWGLH9RUVWHOOXQJGD‰HLQVWHUEOLFKHU0HQVFKDXIJUXQGHLQHU J|WWOLFKHQ(LQZLUNXQJLQHLQMHQVHLWLJHV5HLFKYHUVHW]WZLUGRKQHGXUFKGHQ7RGJHKHQ]X PVVHQ´  ௘2Q WKLV JHQUH VHH $) 6HJDO ³+HDYHQO\ $VFHQW LQ +HOOHQLVWLF -XGDLVP (DUO\ &KULVWLDQLW\ DQG 7KHLU (QYLURQPHQW´ $15:    ± 0 +LPPHOIDUE $VFHQW WR +HDYHQ LQ -HZLVK DQG &KULVWLDQ $SRFDO\SVHV 1HZ @FRPSDULVRQRIWKHDVFHQVLRQZLWKWKH+HOOHQLVWLFUDSWXUH W\SHKHOSHGRIFRXUVHE\WKHIDFWWKDW/XNHZDVDQRQ-HZ

,Q6HDUFKRIWKH3URSHU/DQJXDJH*DPH ,W QHHGV WR EH VWUHVVHG KRZHYHU WKDW WKLV DSSURDFK KDV OHG WR RQHVLGHG UHVXOWV)LUVWDOWKRXJKZH¿QGDQXPEHURILQGLYLGXDOSRLQWVRIFRUUHVSRQG HQFH QR VDWLVI\LQJ H[SODQDWLRQ FDQ EH JLYHQ IRU D QXPEHU RI RWKHU PRUH VWUXFWXUDO SRLQWV RI DJUHHPHQW 7KH QRWLRQ RI WKH IRUW\ GD\V IRU H[DPSOH SOD\VQRUROHLQWKH*UDHFR5RPDQDVFHQVLRQVWRULHV ,IDSSHDUDQFHVDUH  ௘, Q DGGLWLRQ WR 3OXWDUFK 1XPD  $QWRQLQXV /LEHUDOLV  +HVLRG IUJP  $ 5]DFK IJઁȞਫȞįȣȝ઀ȦȞĮਕȞİȞİȤșોȞĮȚİੁȢȠ੝ȡĮȞંȞ$SROORQLXV5KRGLXV$UJRQDXWLFDUHF +.HLO S%DXHU± FI&DVVLXV'LR5RPDQ+LVWRU\ਕİIJȠȢ į੼ IJȚȢ ਥȟ Į੝IJોȢ ਕijİșİ੿Ȣ ਕȞ઀ʌIJĮIJȠ ੪Ȣ țĮ੿ į੽ IJ੽Ȟ ȥȣȤ੽Ȟ Į੝IJȠ૨ VF RI $XJXVWXV  ਥȢ IJઁȞ Ƞ੝ȡĮȞઁȞਕȞĮij੼ȡȦȞ  ௘6HQHFD$SRFRORF\QWRVLV7KHFRQWH[WLVVDWLULFDOEXWWKHODQJXDJHFRQYHQWLRQDO  ௘&I&LFHUR'HQDWXUDGHRUXPZKRFDOOVLWDFRQVXHWXGRFRPPXQLV  ௘$FFRUGLQJWR&+7DOEHUW³7KH&RQFHSWRI,PPRUWDOVLQ0HGLWHUUDQHDQ$QWLTXLW\´ -%/    ± WKHUH ZDV D WHQGHQF\ WR DFFUHGLW IDPRXV KLVWRULFDO ¿JXUHV ZLWK P\WKVDERXWWKHLUEHJLQQLQJPLUDFXORXVELUWK DQGWKHLUHQGDVFHQWWRKHDYHQ DV³SUHFRQ GLWLRQ´IRULPPRUWDOLW\$QWLFLSDWLQJWKHGLVFXVVLRQEHORZ,REVHUYHWKDW7DOEHUWLVKHVLWDQW WRDSSO\WKLVWRWKH-HVXVHYHQW  ௘'HVSLWHRFFDVLRQDOYRLFHVWRWKHFRQWUDU\VHHHJ:-%DUQDUG3YDQ¶W5LHW/XNDV GH-RRG(HQMRRGVHLQOHLGLQJRSKHWHYDQJHOLHYDQ/XNDVHQGH+DQGHOLQJHQGHU$SRVWHOHQ .DPSHQ-+.RN   ௘3:YDQGHU+RUVW³+HOOHQLVWLF3DUDOOHOVWRWKH$FWVRIWKH$SRVWOHV± ´=1:  +.OHLQLQKLVUHYLHZRQP\$VFHQVLRQLQ7K/= REMHFWV³  EHLXQVLP2VWHQJODXEWPDQGD‰GLH7RWHQ7DJH]ZLVFKHQ+LPPHOXQG(UGHVFKZHEHQ



&KDSWHU$VVXPSWXVHVWLQFDHOXP

FRQMRLQHG WR DQ DVFHQVLRQ VR HJ LQ WKH FDVH RI WKH 5RPXOXV WUDGLWLRQV  WKHVHDSSHDUDQFHVDUHSRVWUDSWXUHQRWSUHUDSWXUHDVLQ/XNHDQG$FWV ,Q/XNH$FWVWKHDVFHQVLRQLVVHWLQLPPHGLDWHUHODWLRQWRWKHHVFKDWR ORJLFDO UHWXUQRI-HVXV$FWV DIHDWXUHZKLFKGRHVQRW¿WVRHDVLO\LQWR D*UDHFR5RPDQZRUOGYLHZ $PRUHIXQGDPHQWDOREMHFWLRQWRDQH[FOXVLYHO\+HOOHQLVWLFXQGHUVWDQG LQJ RI WKH /XNDQ DVFHQVLRQ VWRU\ LV D PHWKRGRORJLFDO RQH $V D QXPEHU RIVSHFLDOLVWVWXGLHVKDYHVKRZQLQ*UDHFR5RPDQVRXUFHVWKHFRQFHSWRI ³UDSWXUH´(QWUFNXQJ LVFORVHO\ERXQGXSZLWKQRWWRVD\LGHQWLFDOZLWK  WKH LGHD RI GHL¿FDWLRQ RU GLYLQL]DWLRQ D SHUVRQ ZKR DVFHQGV WR WKH JRGV EHFRPHV D GLYLQH EHLQJ KLPVHOI +LV RU KHU DVFHQVLRQ LV D VWHSSLQJVWRQH LQWR LPPRUWDOLW\ DQG GLYLQLW\ ,Q WKH ODUJH PDMRULW\ RI +HOOHQLVWLF UDSWXUH VWRULHVZH¿QGGHL¿FDWLRQYRFDEXODU\DVDVWDQGDUGIHDWXUH7KHSURSRVL WLRQ³5RPXOXVKDVJRQHWRKHDYHQ´LVPDWHULDOO\LGHQWLFDOZLWK³5RPXOXV KDV EHFRPH D JRG´ DQG YLFH YHUVD LH WKH SURSRVLWLRQ ³5RPXOXV KDV EH FRPHDJRG´LPSOLHVKLVSUHYLRXVDVFHQWWRWKHZRUOGRIWKHJRGV7KHLQ QHUORJLFRIWKHFRQQHFWLRQEHWZHHQUDSWXUHDQGGLYLQL]DWLRQLVFODUL¿HGE\ 'LHWHU5RORIIDVIROORZV³'DEHLHLQHUDQWKURSRPRUSKHQ*RWWHVYRUVWHOOXQJ GLH 8QVWHUEOLFKNHLW GDV ZHVHQWOLFKH 0HUNPDO GHV *|WWOLFKHQ LVW EHGHXWHW GLH$XI KHEXQJGHV7RGHVDOVGLH>@$XI KHEXQJGHVVHQZDVGHQ+HURV YRP*|WWOLFKHQWUHQQWVHLQHQhEHUJDQJLQV*|WWOLFKHVHLQH(UKHEXQJ]XU *|WWOLFKNHLW´,QDQDWWHPSWWRGH¿QHZKDWLVFRQVWLWXWLYHIRUWKHVWDWXVRI DQ³LPPRUWDO´DVFRQWUDVWHGZLWKWKDWRIDQ³HWHUQDO´&KDUOHV7DOEHUWVXJ JHVWV³7KHSURWDJRQLVWLV¿UVWRIDOODPRUWDO±WKRXJKSHUKDSVVRH[WUDRUGL QDU\DVWREHUHJDUGHGLQVRPHVHQVHDVGLYLQHGXULQJKLVOLIHWLPHEXWPRU WDOQRQHWKHOHVV$WWKHHQGRIKLVFDUHHUE\WKHGHFUHHRUDFWRIVRPHHWHUQDO KHLVWDNHQXSLQWRKHDYHQEHFRPHVLPPRUWDODQGWDNHVKLVSODFHLQWKH SDQWKHRQ RI WKH JRGV´ 7DOEHUW IXUWKHU DUJXHV WKDW WKH DVFHQW WR KHDYHQ LVDFUXFLDOFKDUDFWHULVWLFRIWKHLPPRUWDOV³ ZKHQHYHU0HGLWHUUDQHDQ SHRSOHV VSRNH DERXW WKH LPPRUWDOV FRQVWDQW LQ WKHLU GHVFULSWLRQ ZDV WKH H[SOLFLW RU LPSOLFLW LGHD WKDW µKH ZDV WDNHQ XS LQWR KHDYHQ¶´ /RK¿QN ELVVLHHQWZHLFKHQ´WKLQNLQJWKLVLQYDOLGDWHVDQH[FOXVLYHO\-HZLVKDSRFDO\SWLFEDFNJURXQG RIWKHIRUW\GD\VDQGVXJJHVWLQJWKDWWKLVPD\EHDQDUJXPHQWWRUHRSHQWKHTXHVWLRQRI VRXUFHV  ௘&I7DOEHUW³&RQFHSWRI,PPRUWDOV´  ௘6HH =ZLHS $VFHQVLRQ  Q IRU D OLVW RI UHOHYDQW WHUPV DQG UHIHUHQFHV )RU D EULHI VXUYH\RIWKH*UDHFR5RPDQFRQFHSWRI*RGDQGGHL¿FDWLRQVHH3:YDQGHU+RUVW³.RUWH QRWLWLHVRYHUKHWJRGVEHJULSELM*ULHNHQHQ5RPHLQHQHQGHYHUJRGGHOLMNLQJYDQ-H]XVLQKHW 1LHXZH7HVWDPHQW´%LMGU ±  ௘' 5RORII *RWWlKQOLFKNHLW 9HUJ|WWOLFKXQJ XQG (UK|KXQJ ]X VHOLJHP /HEHQ 8QWHU VXFKXQJHQ]XU+HUNXQIWGHUSODWRQLVFKHQ$QJOHLFKXQJDQ*RWW8$/*%HUOLQ:DOWHUGH *UX\WHU   ௘7DOEHUW³&RQFHSWRI,PPRUWDOV´  ௘7DOEHUW³&RQFHSWRI,PPRUWDOV´

,Q6HDUFKRIWKH3URSHU/DQJXDJH*DPH



SXWVLWVLPLODUO\³(QWUFNXQJXQG9HUJ|WWOLFKXQJVLQGLPKHOOHQLVWLVFKHQ 'HQNHQVRIHVWPLWHLQDQGHUYHUEXQGHQGD‰GLH(QWUFNXQJRIWGDVHLJHQWOL FKH.ULWHULXPGDIUELOGHWREHLQ0HQVFKYHUJ|WWOLFKWZXUGHRGHUQLFKW´ $QG ³'LH (QWUFNXQJ LVW GLH HLQ]LJH $UW XQG :HLVH ZLH EHUKDXSW HLQ *RWWGHUDXI(UGHQJHOHEWKDWVWDQGHVJHPl‰VFKHLGHQNDQQ-HGHUDQGHUH $EJDQJYRQGHULUGLVFKHQ%KQHZLUGDOVXQSDVVHQGHPSIXQGHQ´ 7KLVHYLGHQWO\QHHGRFFDVLRQQRVXUSULVHLQDFRQWH[WRISRO\WKHLVWLFUH OLJLRVLW\DFRQWH[WRIZKLFK3HWURQLXVPRFNLQJO\VDLG³WKHJRGVZDONDEURDG VRFRPPRQO\LQRXUVWUHHWVWKDWLWLVHDVLHUWRPHHWDJRGWKDQDPDQ´%XW LWVHHPVWRPHWKDWLWLVFUXFLDODWWKLVSRLQWWRDYRLGWKH³UHOLJLRQKLVWRULFDO IDOODF\´2QHRIP\FULWLFLVPVRI/RK¿QN¶VRWKHUZLVHRXWVWDQGLQJZRUNLV WKDWKHKDVSODFHGWKHDVFHQVLRQVWRU\WRR¿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¿UVWFHQWXU\-XGDLVP>@HJKLVWRULFDO¿JXUHVRI,VUDHO¶V SDVW ZHUH RFFDVLRQDOO\ HOHYDWHG HYHQ XS WR WKH VWDWXV RI șİંȢ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¿UVWFHQWXU\-HZLVKDQG&KULVWLDQ  FRQWH[W'LG¿UVWFHQWXU\-HZVDQG&KULVWLDQVFRQVLGHUUDSWXUHDOVRDVDPHDQVRIGHL¿FD WLRQDQGDVWKHFRPPHQFHPHQWRIDQLPPRUWDOH[LVWHQFHLQJORU\"+RZDQGKRZVXFFHVV IXOO\ ZDVUDSWXUHWKLQNLQJLQWHJUDWHGLQWRWKH-HZLVKDQG&KULVWLDQZRUOGVRIEHOLHI"

)RU WKH VDNH RI FODULW\ LQ VRPH FRQWHPSRUDU\ -HZLVK VRXUFHV GLYLQH FDW HJRULHV DUH EHLQJ DSSOLHG WR KXPDQ EHLQJV HYHQ LQ WKH FRQWH[W RI D KHDY HQO\DVFHQW6RPHRIWKHUHOHYDQWWH[WVLQWKH'HDG6HD6FUROOVKDYHEHHQ

௘/RK¿QN+LPPHOIDKUW ௘/RK¿QN+LPPHOIDKUW  ௘3HWURQLXV6DW\ULFRQ³8WLTXHQRVWUDUHJLRWDPSUDHVHQWLEXVSOHQDHVWQXPLQLEXVXW IDFLOLXVSRVVLVGHXPTXDPKRPLQHPLQYHQLUH´&IDOVRWKHFRPSODLQWRI-XSLWHULQ6HQHFD $SRFRORF\QWRVLV³2OLPLQTXLW-RYH PDJQDUHVHUDWGHXP¿HULLDP)DEDPPLQXPIHFLV WLV´$OVRWKHZULWLQJVRI/XFLDQ  ௘4 XRWHGIURP=ZLHS$VFHQVLRQ±)RUZKDWLVDWLVVXHLQWKHFXUUHQWGHEDWHRQ ¿UVWFHQWXU\-HZLVKPRQRWKHLVPVHHWKHUHFHQWDVVHVVPHQWE\/:+XUWDGR³)LUVW&HQWXU\ -HZLVK0RQRWKHLVP´-617 ± 





&KDSWHU$VVXPSWXVHVWLQFDHOXP

GLVFXVVHGUHFHQWO\E\06PLWK-DPHV'DYLODDQGRWKHUV7H[WVVXFKDV 40HOFKL]HGHN4 DQGWKHP\VWHULRXV³6HOI*ORUL¿FDWLRQ+\PQ´LQ WKH:DU6FUROO4IUDJ,± KDYHEHHQH[SODLQHGZLWKGLIIHULQJ GHJUHHVRISODXVLELOLW\ LQWHUPVRIDUHDODSRWKHRVLVRIDKXPDQEHLQJ,WUH PDLQVWREHVHHQDVIDUDV,DPFRQFHUQHGZKHWKHUVXFKODEHOVDV³DSRWKH RVLV´DQG³GHL¿FDWLRQ´DUHDSSURSULDWHLQWKHVHWH[WV3HUKDSVWKH³DQJHOR PRUSKLF´FDWHJRU\SURYLGHVDPRUHIUXLWIXOHQWU\LQWRWKHXQUDYHOOLQJRI WKHVHP\VWHULRXVWH[WV,JQRULQJIRUWKHPRPHQWWKHIDFWWKDWWKHVHWH[WVDUH H[FHSWLRQDODQGWKDWWKHLGHQWLW\RIWKHSHUVRQVLQYROYHGLVQRWDOZD\VYHU\ FOHDULWVKRXOGEHQRWHGWKDWLQPRVWRIWKHVHDQGVLPLODUFDVHVRI³GHL¿FD WLRQ´WKHFRQWH[WLVHLWKHUYLVLRQDU\P\VWLFDORUPHWDSKRULFDO7KHFULWLFDO TXHVWLRQLVZKHWKHUGHL¿FDWLRQODQJXDJHLVXVHGLQDQRQYLVLRQDU\UDSWXUH FRQWH[W>@

7KH5DSWXUH3KHQRPHQRQLQ(DUO\-HZLVK6RXUFHV ,QDQDWWHPSWWR¿QGRXWZKHWKHUWKHDVFHQVLRQRI-HVXVFDQEHEHWWHUXQGHU VWRRGLQSDUWLDOO\RUSUHGRPLQDQWO\ -HZLVKUDSWXUHFDWHJRULHVLWLVQHFHV VDU\ WR GLVFRYHU ZKDW WKH LGHRORJLFDO IUDPHZRUN XQGHUO\LQJ HDUO\ -HZLVK UDSWXUHWKLQNLQJLV)LUVWRIDOOZHPXVWSXWWKHPDWWHULQWKHULJKWSURSRU WLRQV,QWKH2OG7HVWDPHQWWKHUHDUHRQO\WZRSHUVRQVZKRHVFDSHGHDWKE\ EHLQJWDNHQXSDOLYHLQWRWKHSUHVHQFHRI*RG2I(QRFKLWLVVDLGWKDW³KH ZDONHGZLWK*RGDQGKHZDVQRPRUHEHFDXVH*RGWRRNKLPDZD\ ´*HQ   D EULHI P\VWHULRXV UHPDUN \HW LQ LWV FRQWH[W FOHDU HQRXJK IRU UHDG HUVWRFRQFOXGHWKDW(QRFKHVFDSHGGHDWKDQGZDVQRZLQ*RG¶VSUHVHQFH 0RUHVSHFWDFXODULVWKHGHVFULSWLRQRI(OLMDK¶VDVFHQWLQWRKHDYHQ³$VWKH\ >(OLMDKDQG(OLVKD@FRQWLQXHGZDONLQJDQGWDONLQJDFKDULRWRI¿UHDQGKRUV HVRI¿UHVHSDUDWHGWKHWZRRIWKHPDQG(OLMDKDVFHQGHG/;;ਕȞİȜȒȝijșȘ  LQDZKLUOZLQGLQWRKHDYHQ´.LQJV1569 %XWWKLVLVDOOWKH2OG 7HVWDPHQWKDVDERXWUDSWXUHV2QWKHRWKHUKDQGWKHODWH7DOPXGLFWUHDWLVH ௘06PLWK³$VFHQWWRWKH+HDYHQVDQG'HL¿FDWLRQLQ40D´LQ/+6FKLIIPDQHG  $UFKDHRORJ\ DQG +LVWRU\ LQ WKH 'HDG 6HD 6FUROOV 7KH 1HZ RWKHU PDQXVFULSWV WKH\ HOHYDWHG PH@WKH\VHWPHGRZQLQWKHPLGVWRIWKRVHVKHHSSULRUWRWKHRFFXUUHQFH RIWKLVMXGJPHQW´(]UDDOVRVHHPVWRKDYHDUHDSSHDUDQFHRI(QRFK  ௘-& 9DQGHU.DP (QRFK DQG WKH *URZWK RI DQ $SRFDO\SWLF 7UDGLWLRQ &%406  :DVKLQJWRQ'&&DWKROLF%LEOLFDO$VVRFLDWLRQRI$PHULFD   ௘'HVSLWH WKH FOHDU DI¿UPDWLRQ LQ 'HXW ± WKDW 0RVHV KDG GLHG DQG ZDV EXULHG DOEHLW P\VWHULRXVO\  LW ZDV EHOLHYHG E\ VRPH WKDW KH ZDV WDNHQ XS DOLYH LQWR KHDYHQ ,Q =ZLHS $VFHQVLRQ ± , KDYH DUJXHG FLUFXPVWDQWLDOO\ WKDW -RVHSKXV $QW    /&/±PD\LQIDFWLQGLFDWHWKDWWKLVEHOLHIZDVDOUHDG\IRXQGLQWKH¿UVWFHQWXU\ &($QWLFLSDWLQJRXUGLVFXVVLRQEHORZODWHU5DEELQLFVRXUFHVDOVRH[SHFWDQHVFKDWRORJL FDOUHWXUQRI0RVHVWKRXJKQRWLQFRQQHFWLRQZLWKEHOLHILQKLVUDSWXUH,QFLGHQWDOO\WKH QXPEHUIRUW\SOD\VDVLJQL¿FDQWUROHLQWKHELEOLFDO0RVHVWUDGLWLRQ  ௘, KDYH DQDO\VHG WKHVH UDSWXUH VSHFXODWLRQV LQ =ZLHS $VFHQVLRQ ± 2WKHU UDS WXUHFODLPVFDQQRWEHWUDFHGEDFNZLWKDQ\FRQ¿GHQFHWRWKH¿UVWFHQWXU\ &(VHH=ZLHS $VFHQVLRQQ  ௘(QHG0$.QLEE7KH(WKLRSLF%RRNRI(QRFK$1HZ(GLWLRQLQWKH/LJKWRI

7KH(DUO\-HZLVK5DSWXUH3UHVHUYDWLRQ3DUDGLJP



DQG(OLMDKLQYLHZDOWKRXJKWKHLUQDPHVDUHQRWPHQWLRQHG³$QGWKH\VKDOO VHH>DWWKHHQGRIWKLVZRUOGY@WKHPHQZKRZHUHWDNHQXS>TXLUHFHSWL VXQWKRPLQHV@ZKRIURPWKHLUELUWKKDYHQRWWDVWHGGHDWK´,QFRQWH[WLW LVFOHDUWKDWDWOHDVW(QRFKDQG(OLMDKDUHEHLQJUHIHUUHGWR,QODWHU-HZLVK DQG&KULVWLDQVRXUFHV(OLMDKDQG(QRFKEHFDPHVWHDG\FRPSDQLRQVLQWKH HVFKDWRORJLFDOFRXUVHRIHYHQWV 7KHUDSWXUHVSHFXODWLRQVGLGQRWRQO\H[SDQGLQDIRUZDUGGLUHFWLRQEXW DOVREDFNZDUGV8QGRXEWHGO\RQWKHEDVLVRIWKHELEOLFDODI¿UPDWLRQWKDWKH ³ZDONHGZLWK a\KODK´LQGXHFRXUVH(QRFKZDVDFFUHGLWHGZLWKWHPSRUDU\ YLVLWV WR KHDYHQ SULRU WR KLV ¿QDO DVFHQW XVXDOO\ LQ WKH IRUP RI YLVLRQDU\ DVFHQWV$PRVWUHOHYDQWGHYHORSPHQWWRWKHSUHVHQWGHEDWHLVWKDWWKHDFWXDO UDSWXUHHYHQWLVEHLQJSUHFHGHGE\DSHULRGRI¿QDOLQVWUXFWLRQVDOPRVWDVD FRQGLWLRVLQHTXDQRQ,QDQDGGLWLRQWRWKH$VWURQRPLFDO:ULWLQJV(QRFK¶V DVFHQVLRQLVSUHFHGHGE\DRQH\HDUSHULRGRI¿QDOLQVWUXFWLRQVWRKLVGLV FLSOHV³:HVKDOOOHW\RXVWD\ZLWK\RXUVRQ> 0HWKXVHODK@IRURQH\HDUVR WKDW\RXPD\WHDFK\RXUFKLOGUHQDQRWKHUODZDQGZULWHLWGRZQIRUWKHP DQGJLYH>@DOORIWKHPDZDUQLQJDQGLQWKHVHFRQG\HDU\RXVKDOOEH WDNHQDZD\IURPDPRQJ DOORIWKHP´ ,QDQRWKHUJURXSRIZULWLQJVWKHFRQQHFWLRQEHWZHHQUDSWXUHDQGUHWXUQ LV HYHQ PRUH ¿UPO\ HVWDEOLVKHG +HUH ZH UHFRJQLVH WKH JURZWK RI D ³QDU UDWLRQPRGHO´7KHODUJHFRQWRXUVRIWKLVQDUUDWLRQVFKHPHDUHDVIROORZV 7KHUDSWXUHLVXVXDOO\DQQRXQFHGLQDGYDQFHLQVRPHUHYHODWRU\H[SHULHQFH HLWKHUDVDGLYLQHZRUGRILQVWUXFWLRQRUDVDUHPDUNE\WKHDXWKRU>  $'9@ ,Q SUHSDUDWLRQ RI WKH HYHQW WR FRPH WKH UDSWXUH FDQGLGDWH LV FRPPDQGHG WRLQVWUXFWWKRVHWKDWVWD\EHKLQGWRHQVXUHWKDWKLVWHDFKLQJVZLOOQRWSHU LVK7KLVSHULRGRI¿QDOLQVWUXFWLRQV>  ,16@LVQRWLQIUHTXHQWO\DSHULRGRI IRUW\GD\VIRUW\EHLQJDTXLWHFRQYHQWLRQDOELEOLFDOQXPEHURIFRXUVH 7KH KLJKO\VWDQGDUGLVHGGHVFULSWLRQRIWKHUDSWXUH>  5$3@LVXVXDOO\FRQMRLQHG ZLWKDUHPDUNDERXWWKHORFDODQGWHPSRUDOWHUPLQLDGTXHPRIWKHUDSWXUHG SHUVRQ¶V SUHVHUYDWLRQ LQ KHDYHQ >  356@ DQG KLV HQYLVDJHG UROH LQ WKH HQG WLPHGUDPDQRWLQIUHTXHQWO\ZLWKDQHVFKDWRORJLFDOUHWXUQLPSOLHG> (6&+@ ,QZKDWIROORZVWKLVVFKHPHLVLOOXVWUDWHGIURPVRPHRIWKHUHOHYDQWVRXUFHV 7KH¿UVWH[DPSOHFRPHVIURPWKH)RXUWK%RRNRI(]UDWREHGDWHGDWWKH HQGRI¿UVWFHQWXU\ &(,QWKHVHYHQWKYLVLRQRIWKHERRNLWLVDQQRXQFHG WKH$UDPDLF'HDG6HD)UDJPHQWV2[IRUG1HZUHFLSLHULV@IURPDPRQJPHQ>  5$3@DQGKHQFHIRUWK \RXVKDOOOLYHZLWKP\6RQ> WKH0HVVLDK@DQGZLWKWKRVHZKRDUHOLNH\RX > (QRFKDQG(OLMDK@>  356@XQWLOWKHWLPHVDUHHQGHG>XVTXHTXR¿QLDQWXU WHPSRUD@´ +LV SUHVHQFH LQ KHDYHQ LV VHW D WHPSRUDO WHUPLQXV DG TXHP ³XQWLOWKHWLPHVDUHHQGHG´> (6&+@7KLVVHHPVWRLPSOLFDWH(]UD¶VUHWXUQWR HDUWKDVXJJHVWLRQWKDWLVVWUHQJWKHQHGE\WKHFRPSDULVRQZLWK(QRFKDQG (OLMDK VLPLOHV WXL  :LWK UHJDUG WR (]UD¶V SUHUDSWXUH FRQGLWLRQ LW LV VDLG WKDWEHIRUHKHZLOOEHWDNHQDZD\KHPXVWLQVWUXFW¿YHPHQRYHUDSHULRGRI IRUW\GD\VWRHQVXUHKLVVHFUHWZLVGRPZLOOQRWEHORVWWRODWHUJHQHUDWLRQV >  ,16@7KH6\ULDFYHUVLRQFRQWLQXHVZLWKZKDWLQDOOOLNHOLKRRGUHSUHVHQWV WKHRULJLQDOHQGLQJRIWKHERRN³LQWKHVHYHQWK\HDURIWKHVL[WKZHHN ¿YH>@WKRXVDQG\HDUVDQGWKUHHPRQWKVDQGWZHOYHGD\VDIWHUFUHDWLRQ $W WKDW WLPH (]UD ZDV FDXJKW XS >  5$3@ DQG WDNHQ WR WKH SODFH RI WKRVH ZKRDUHOLNHKLPDIWHUKHKDGZULWWHQDOOWKHVHWKLQJV$QGKHZDVFDOOHG WKH 6FULEH RI WKH NQRZOHGJH RI WKH 0RVW +LJK IRU HYHU DQG HYHU´ 7KDW (]UDZRXOGEHFDOOHG³VFULEHRIWKHNQRZOHGJHRIWKH0RVW+LJK´VHHPVWR SRLQWWRKLVUROHLQWKHODVWMXGJHPHQW>  (6&+@(]UD¶VUDSWXUHLVDFDWDO\VW IRU VSHFXODWLRQV DERXW KLV SRVWUDSWXUH FRQGLWLRQ SUHVHUYDWLRQ LQ KHDYHQ UHWXUQLQWKHHQGWLPHDQDFWLYHUROHRQWKHGD\RIMXGJHPHQW DVZHOODVWKH SHULRGOHDGLQJXSWRKLVWDNLQJXSIRUW\GD\VRI¿QDOLQVWUXFWLRQVWRSUHSDUH KLVGLVFLSOHVIRUWKHSHULRGRIKLVDEVHQFH  7KH VHFRQG H[DPSOH LV IRXQG LQ WKH 6HFRQG 6\ULDF  $SRFDO\SVH RI %DUXFK%DUXFK WREHGDWHGDWWKHHQGRIWKH¿UVWRUWKHEHJLQQLQJRIWKH VHFRQG FHQWXU\ &( 6HFRQG %DUXFK UHSUHVHQWV D VWUHDP RI WUDGLWLRQ WKDW LV SDUDOOHOHG E\ )RXUWK (]UD 5HJDUGOHVV RI KRZ RQH UHVROYHV WKH OLWHUDU\ UHODWLRQVKLSEHWZHHQWKHWZRERRNVZKHWKHU6HFRQG%DUXFKLVGHSHQGHQW RQ)RXUWK(]UDRUYLFHYHUVDRUZKHWKHUWKHWZRERRNVGUDZIURPFRPPRQ WUDGLWLRQ WKHSDUDOOHOWUDGLWLRQVVHHPWRFRQ¿UPWKHWHQGHQF\WRDSSO\WKH 0HW]JHU³)RXUWK(]UD´±6FKUHUHWDO+LVWRU\±0(6WRQH)RXUWK (]UD$&RPPHQWDU\RQWKH%RRNRI)RXUWK(]UD+HUPHQHLD0LQQHDSROLV0LQQ)RUWUHVV  ±  ௘(]UDHG.OLMQ$SRNDO\SVHGHV(VUDWUDQVO0HW]JHU³)RXUWK(]UD´  ௘(]UD  ௘(]UDYOWUDQVO0HW]JHU³)RXUWK(]UD´QS   ௘, QWURGXFWRU\PDWWHUVDQGELEOLRJUDSKLFDOUHIHUHQFHVRQ6HFRQG%DUXFKDUHIRXQGLQ $)-.OLMQ³6\ULDF$SRFDO\SVHRI %DUXFK$1HZ7UDQVODWLRQDQG,QWURGXFWLRQ´273  ±6FKUHUHWDO+LVWRU\±&IDOVR$/DDWR³7KH$SRFDO\SVH RIWKH6\ULDF%DUXFKDQGWKH'DWHRIWKH(QG´-63( ±

7KH(DUO\-HZLVK5DSWXUH3UHVHUYDWLRQ3DUDGLJP



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

7KHSDVVDJHLVFOHDUO\VW\OHGDIWHUD0RVHVW\SRORJ\FI'HXW± ,WLV DQQRXQFHGE\DQDQJHOLQWHUSUHWHU> $'9@WKDW%DUXFKZLOOHVFDSHGHDWK>  5$3@WREH³NHSWXQWRWKHHQG RIWLPHV´Y WKDWLVKHZLOOEHSK\VLFDOO\ >@WDNHQXSLQWRKHDYHQZKHUHKHZLOOEHSUHVHUYHGXQWRWKHHQGRIWLPHV LHWKHGD\RIMXGJHPHQW >  356@$WWKH¿QDOMXGJHPHQWKHZLOOVWDQGXS DVDZLWQHVVFI > (6&+@$VLQ(]UDDIRUW\GD\SHULRGRI ¿QDOLQVWUXFWLRQVSUHFHGHVWKHUDSWXUHY > ,16@ $ WKLUG H[DPSOH LV IRXQG LQ WKH /LEHU $QWLTXLWDWXP %LEOLFDUXP WR EH GDWHGSUREDEO\DIHZGHFDGHVEHIRUHWKH¿QDOFRPSRVLWLRQRI)RXUWK(]UD DQG6HFRQG%DUXFK7KHXQNQRZQDXWKRUSUHVHUYHVDWUDGLWLRQDERXWWKH UDSWXUHRI3KLQHKDVWKHVRQRI(OHD]DUWKHSULHVWWKHZRUGLQJRIZKLFKLV UHPLQLVFHQWRIWKH(OLMDKVWRU\DQGZKLFKLQFOXGHVVHYHUDOWKRXJKQRWDOO  FRPSRQHQWVRIWKHUDSWXUHSUHVHUYDWLRQSDUDGLJP $QGQRZULVHXSDQGJRIURPKHUHDQGGZHOOLQ'DQDEHQRQWKHPRXQWDLQDQGGZHOOWKHUH PDQ\\HDUV$QG,ZLOOFRPPDQGP\HDJOHDQGKHZLOOQRXULVK\RX> 3KLQHKDV@WKHUH  ௘%DU±HGDQG/DWLQWUDQVO0.PRVNR/LEHUDSRFDO\SVHRV%DUXFK¿OLL1HULDH 7UDQVODWXVGHJUDHFRLQV\ULDFXPSUDHIDWXVHVWWH[WXPV\ULDFXPYRFDOLXPVLJQLVLQVWUX[LW ODWLQHYHUWLWQRWLVLOOXVWUDYLW0.PRVNR363DULV)LUPLQ'LGRW ±(QJ WUDQVO.OLMQ³6HFRQG%DUXFK´  ௘([FHSWIRUWKHDPELJXRXVWKHUHLVQRH[SOLFLWPHQWLRQRI%DUXFK¶VUHWXUQWRHDUWK EXW XQOHVV ZH DUH WR DVVXPH WKDW WKH MXGJHPHQW WDNHV SODFH LQ KHDYHQ WKLV LV LPSOLHG $ FRPSDULVRQZLWK(]UDZRXOGFRQ¿UPWKLV  ௘ %DU ± HG .PRVNR ± /DWLQ WUDQVODWLRQ IURP .PRVNR  WUDQVO.OLMQ³6HFRQG%DUXFK´  ௘, QWURGXFWRU\ PDWWHUV DQG ELEOLRJUDSKLFDO UHIHUHQFHV RQ /$% DUH IRXQG LQ '- +DUULQJWRQ - &D]HDX[ & 3HUURW 0 %RJDHUW 3VHXGR3KLORQ /HV $QWLTXLWpV %LEOLTXHV ,±,,6&±3DULV&HUI '-+DUULQJWRQ³3VHXGR3KLOR$1HZ7UDQVODWLRQ DQG,QWURGXFWLRQ´273 ±6FKUHUHWDO+LVWRU\±)-0XUSK\ 3VHXGR3KLOR 5HZULWLQJ WKH %LEOH 1HZ @FRUGLQJ WR &KULVWIULHG %|WWULFK WKH JURXQGZRUN RI WKH 0HOFKL]HGHN VWRU\ LQ FKDSWHUV ± QRZ H[WDQW LQ D ORQJHU DQG D VKRUWHU UHFHQVLRQ  PD\ UHDFK EDFN LQWR D SUH VHWWLQJ 0HOFKL]HGHN WKH IRUHVHHQ VXFFHV VRURIWKHSULHVW1LUWKHVRQRI0HWKXVHODKH[SHULHQFHGDPLUDFXORXVELUWK XQGHU EL]DUUH FLUFXPVWDQFHV FK   :KHQ WKH ZRQGHUFKLOG KDG EHHQ IRUW\GD\VLQ1LU¶VWHQWWKHDQJHO0LFKDHOFDPHGRZQWRWUDQVODWHWKHFKLOG LQWR (GHP WR SUHVHUYH KLP IURP WKH FRPLQJ ÀRRG DIWHU ZKLFK KH ZRXOG EHHVWDEOLVKHGDV³WKHKHDGRISULHVWV´RIWKHIXWXUH $VWULNLQJGLI IHUHQFHEHWZHHQWKH-DQG$UHFHQVLRQLVWKDWWKHIRUPHUH[SHFWV³DQRWKHU 0HOFKL]HGHN´    -  ZKHUHDV WKH ODWWHU VHHPV WR HQYLVDJH DQ HVFKDWRORJLFDOUROHIRU0HOFKL]HGHNKLPVHOI³0HONLVHGHNZLOOEHWKHKHDG RI WKH SULHVWV LQ DQRWKHU JHQHUDWLRQ´    $  7KH $ UHFHQVLRQ RI  (QRFK  UHJDUGV WKH UDSWXUH RI WKH FKLOG WR EH ERUQ DV VRPH VRUW RISXQLVKPHQW³,VKDOOUHFHLYH>WKHFKLOG0HOFKL]HGHN@LQSDUDGLVHVRWKDW \RXZLOOQRWEHWKHIDWKHURIDJLIWRI*RG´$Q\ZD\WKHWKHPHVDUHUHPL QLVFHQWRI(]UD¶VDQG%DUXFK¶VWUDQVODWLRQDSHULRGRIIRUW\GD\VSUHFHGLQJ WKHUDSWXUHDWUDQVODWLRQLQWRKHDYHQDSHULRGRIGLYLQHSUHVHUYDWLRQWKDW FXOPLQDWHVLQDQHVFKDWRORJLFDOUROH  ௘/$%±HG+DUULQJWRQHWDO3VHXGR3KLORQWUDQVO+DUULQJWRQ³3VHXGR 3KLOR´  ௘, QWURGXFWRU\ PDWWHUV DQG ELEOLRJUDSKLF UHIHUHQFHV RQ 6HFRQG (QRFK DUH IRXQG LQ ), $QGHUVHQ ³ 6ODYRQLF $SRFDO\SVH RI  (QRFK $ 1HZ 7UDQVODWLRQ DQG ,QWURGXFWLRQ $SSHQGL[  (QRFK LQ 0HULOR 3UDYHGQRH´ 273    ± 6FKUHU HW DO +LVWRU\ ±  ௘&%|WWULFK³5HFHQW6WXGLHVLQWKH6ODYRQLF%RRNRI(QRFK´-63( ±  ௘(Q±HG$9DLOODQW /HOLYUHGHVVHFUHWVG¶+pQRFK7H[WVODYHHWWUDGXFWLRQ IUDQoDLVH3DULV,QVWLWXWG¶eWXGHV6ODYHVUHSU ±;;,,±;;,,, &IDOVR (SLSKDQLXVRI6DODPLV3DQDULRQ$GYHUVXVKDHUHVHV +DHUHVLV*&6±  ௘2Q RWKHU 0HOFKL]HGHN VSHFXODWLRQV VHH )/ +RUWRQ 7KH 0HOFKL]HGHN 7UDGLWLRQ $ &ULWLFDO ([DPLQDWLRQ RI WKH 6RXUFHV WR WKH )LIWK &HQWXU\ $' DQG LQ WKH (SLVWOH WR WKH +HEUHZV066176&DPEULGJH/RQGRQ1HZ@RILQÀXHQFHVLVLQYROYHG0RVHV(OLMDKHWF6RPXFKLVFOHDU WKDWLQWKH¿QDOGHFDGHVRIWKH¿UVWFHQWXU\&(±WKDWLVURXJKO\LQWKHSHUL RG/XNH$FWVFDPHLQWREHLQJ±ZH¿QGDUHODWLYHO\FOHDUQDUUDWLRQVFKHPH

/XNH$FWVDQGWKH5DSWXUH3UHVHUYDWLRQ3DUDGLJP ,Q  *QWKHU +DXIH SXEOLVKHG D EULHI EXW VWLPXODWLQJ DUWLFOH RQ ZKDW KH FDOOHG ³>HLQ@ 'HQNJHVHW] GDV PLW HLVHUQHU .RQVHTXHQ] GXUFKJHKDOWHQ >ZLUG@´+HDUJXHGWKDWLQHDUO\-HZLVKEHOLHIRQO\WKRVHKLVWRULFDO¿JXUHV FRXOGH[HUFLVHDQHVFKDWRORJLFDOUROHZKRKDGHQWHUHGWKHKHDYHQO\ZRUOG E\PHDQVRIDERGLO\UDSWXUH³IUVSlWMGLVFKHV'HQNHQN|QQHQQXUVROFKH KLVWRULVFKH3HUVRQHQHLQHHVFKDWRORJLVFKH6RQGHUIXQNWLRQHUKDOWHQGLHDXI GHP:HJHGHUOHLEOLFKHQ(QWUFNXQJLQGLHKLPPOLVFKH:HOWHLQJHJDQJHQ VLQG´$OWKRXJKWKLVLVVXUHO\DQRYHUVWDWHPHQWWKLQNHJRIWKH0RVHV WUDGLWLRQV  +DXIH ZDV DW OHDVW ULJKW LQ VHHLQJ D VWURQJ FRQQHFWLRQ LQ WKH -HZLVKPLQGEHWZHHQUDSWXUHDQGHVFKDWRORJ\(DUO\-HZLVKUDSWXUHWKLQN LQJRSHQVXSVRWRVSHDNDQHVFKDWRORJLFDOVFHQDULR 2QHFDQQRWLJQRUHWKHVWURQJSRLQWVRIFRUUHVSRQGHQFHEHWZHHQWKHDV FHQVLRQ VWRU\ DQG WKH HDUO\ -HZLVK UDSWXUHSUHVHUYDWLRQ WUDGLWLRQV /XNH 3UHVV ://DQH+HEUHZV±:%&$'DOODV7H[:RUG ±± OLW )0DQ]L0HOFKLVHGHNHO¶DQJHORORJLDQHOO¶(SLVWRODDJOL(EUHLHD4XPUDQ$Q%LE 5RPD(GLWULFH3RQWL¿FLR,VWLWXWR%LEOLFR   ௘, KDYH GLVFXVVHG  (QRFK ± (QRFK DQG WKH 6RQ RI 0DQ  LQ =ZLHS $VFHQVLRQ ±7KHGHEDWHRQWKHLGHQWL¿FDWLRQRI(QRFKZLWKWKH6RQRI0DQLVVWLOOFRQWLQXLQJVHH UHFHQWO\'&2OVRQ³(QRFKDQGWKH6RQRI0DQLQWKH(SLORJXHRIWKH3DUDEOHV´-63(  ±  ௘* +DXIH ³(QWUFNXQJ XQG HVFKDWRORJLVFKH )XQNWLRQ LP 6SlWMXGHQWXP´ =5**   ±TXRWDWLRQIURPS  ௘+DXIH³(QWUFNXQJ´



&KDSWHU$VVXPSWXVHVWLQFDHOXP

KLPVHOI FOHDUO\ SXWV XV RQ WKLV WUDFN 7KH WHUPV KH XVHV WR GHVFULEH WKH DVFHQVLRQLPPHGLDWHO\FDOOWRPLQG(OLMDK¶VVSHFWDFXODUDVFHQWLQWRKHDYHQ FI.LQJV/;;0DFF6LU±ZLWK/N$FWV±  7KHYHU\¿UVWUHIHUHQFHWR-HVXV¶DVFHQVLRQLQ/XNH$FWV/NUHG LV D YHUEDO HFKR RI WKH RSHQLQJ ZRUGV RI WKH (OLMDK VWRU\ ਥȖ੼ȞİIJȠ į੻ ਥȞ IJ૶ ıȣȝʌȜȘȡȠ૨ıșĮȚIJ੹Ȣਲȝ੼ȡĮȢIJોȢਕȞĮȜȒȝȥİȦȢĮ੝IJȠ૨țĮ੿Į੝IJઁȢIJઁʌȡંıȦʌȠȞ ਥıIJȒȡȚıİȞIJȠ૨ʌȠȡİ઄İıșĮȚİੁȢ੉İȡȠȣıĮȜȒȝFI.LQJV/;; $V IDUDV,NQRZWKHUHLVQRUDSWXUHWH[WRXWVLGHWKH-HZLVKRU&KULVWLDQUHDOP LQZKLFKਕȞ੺ȜȘȝȥȚȢRUਕȞĮȜĮȝȕ੺ȞȠȝĮȚLVXVHGWRGHVFULEHDQDVFHQVLRQ ,Q DGGLWLRQ WR WKH XVH RI FRPPRQ WHUPV WKH QDUUDWLYH SDWWHUQ RI /XNH $FWV FORVHO\ UHVHPEOHV WKH HDUO\ -HZLVK UDSWXUH WUDGLWLRQ 7KH UDSWXUHDV FHQVLRQ LV DQQRXQFHG LQ DGYDQFH E\ WKH DXWKRU >  $'9@ LQ WKH NH\ YHUVH /XNHWKDW>@LVVWUDWHJLFDOO\LQWKHPLGGOHRIWKHERRNDQWLFLSDWLQJ WKHGRXEOHQDUUDWLYHDWWKHHQGRIWKH¿UVWDQGWKHEHJLQQLQJRIWKHVHFRQG ERRN7KHDFWXDOGHVFULSWLRQLVIRXQGLQ/XNHDQG$FWV±> 5$3@ ZKHUH IUHH XVH LV PDGH RI FRQYHQWLRQDO UDSWXUH WHUPLQRORJ\ DQG WKHPHV 7KHDVFHQVLRQLVSUHFHGHGE\DSHULRGRI¿QDOLQVWUXFWLRQVIURPWKHGHSDUW LQJ-HVXV/N± DFFRUGLQJWR$FWVDSHULRGRIIRUW\GD\V> ,16@ DSHULRGRIHTXDOOHQJWKDVLQ)RXUWK(]UDDQG6HFRQG%DUXFK7KHDVFHQ VLRQLQLWLDWHVDSHULRGRISK\VLFDODEVHQFHLQZKLFK-HVXVLVEHLQJSUHVHUYHG LQ KHDYHQ $FWV   >  356@ XQWLO KLV HVFKDWRORJLFDO UHWXUQ $FWV  HW SDVVLP > (6&+@

/XNH$FWVDQGWKH5HVXUUHFWLRQDQG([DOWDWLRQ.HU\JPD ,I WKH RXWOLQH RIIHUHG DERYH SURYLGHV WKH SURSHU FRQWH[W RI XQGHUVWDQGLQJ RI WKH /XNDQ DVFHQVLRQ VWRU\ KRZ GRHV DOO WKLV EHDU RQ WKH TXHVWLRQ KRZ /XNHSHUFHLYHVWKHH[DOWDWLRQRI-HVXV"$SDUWIURPWKHQHFHVVDU\SK\VLFDO WUDQVIRUPDWLRQWR¿WWKHKHDYHQO\FRQGLWLRQVWKHUDSWXUHGVDLQWVDUHQRWEH LQJ³GHL¿HG´,QQRQHRIWKHFDVHVRIUDSWXUHZH¿QGDVWDWHPHQWDERXWDQ HQWKURQHPHQWDFWOHWDORQHDQDI¿UPDWLRQRIGLYLQL]DWLRQRUGHL¿FDWLRQ ௘&I7/%URGLH³7KH'HSDUWXUHIRU-HUXVDOHP/XNH± DVD5KHWRULFDO,PLWDWLRQ RI(OLMDK¶V'HSDUWXUHIRUWKH-RUGDQ.JV± ´%LE ±  ௘2QWKHSUREOHPDWLFJUDPPDURIWKLVYHUVHVHH$'%DXP/XNDVDOV+LVWRULNHUGHU OHW]WHQ-HVXVUHLVH79*06:XSSHUWDO=XULFK%URFNKDXV ±DQG=ZLHS $VFHQVLRQ±  ௘=ZLHS $VFHQVLRQ II &I -+ 0RXOWRQ * 0LOOLJDQ 9RFDEXODU\ RI WKH *UHHN 7HVWDPHQW3HDERG\0DVV+HQGULFNVRQ>@UHSU ³7KH%LEOLFDOXVHRIµWDNH XS¶IRUDQDVFHQVLRQLQWRKHDYHQLVQDWXUDOO\>VLF@QRWSDUDOOHOHGLQRXUVRXUFHV´  ௘7RDYRLGSRVVLEOHPLVXQGHUVWDQGLQJ,GRQRWFODLPOLWHUDU\GHSHQGHQF\RQHZD\RU DQRWKHU7KHELEOLFDOQXPEHUZDVFRQYHQWLRQDOHQRXJKWREHDSSOLHGWRDYDULHW\RIFLU FXPVWDQFHV  ௘7 KDWLVQRWLQWKHVRXUFHVXSWRWKH¿UVWFHQWXU\ &(,QODWHUSHULRGVVRPHP\VWLFDO 

/XNH$FWVDQGWKH5HVXUUHFWLRQDQG([DOWDWLRQ3DUDGLJP



7KLVZRXOGEHDSSDOOLQJWRWKH-HZLVK&KULVWLDQPLQG%XWZKDWDERXWEHLQJ ³H[DOWHG´",WVHHPVWRPHWKDWLWLVLQDSSURSULDWHWRVD\WKDWWKH\DUH³H[DOWHG´ LQWKHWHFKQLFDOVHQVHRIWKHZRUG,IDQH[DOWDWLRQHQWKURQHPHQWRULQVWDO ODWLRQLQWRDQRI¿FH LVLQYLHZWKLVLVDQHVFKDWRORJLFDORQH7KHUDSWXUHRU DVFHQVLRQLVWKHQRQO\DPHDQVWRSRVWSRQHWKHDFWXDOH[DOWDWLRQ7KHDVFHQ VLRQSXWVWKHPDVLWZHUHWHPSRUDULO\RQDKHDYHQO\VLGHWUDFNZDLWLQJIRU WKHJUHDWHVFKDWRORJLFDOHYHQWVWRFRPH%XWWKHSULPLWLYHUHVXUUHFWLRQH[ DOWDWLRQNHU\JPDLVFRQFHUQHGZLWK-HVXV¶SUHVHQWVWDWHRIH[DOWDWLRQ³WKLV -HVXV*RGKDVH[DOWHG´  7KHLGHDWKDW/XNHVHSDUDWHVH[DOWDWLRQIURPUHVXUUHFWLRQDQGWUDQVSRVHV WKHH[DOWDWLRQRI-HVXVWRWKHDVFHQVLRQIRUW\GD\VODWHUFDQQRWEHVXVWDLQHG IURPWKHHYLGHQFH7KLVLVHVSHFLDOO\FOHDULIRQHFRPSDUHV/XNH¶VGHVFULS WLRQZLWKRWKHUH[DOWDWLRQWH[WVLQFOXGLQJKLVRZQ DQGQRWLFHVZKDWKHGRHV QRW VD\ ,Q /XNH¶V GHVFULSWLRQ RI WKH DVFHQVLRQ W\SLFDO H[DOWDWLRQ LPDJHU\ DQGPRWLIVDUHODFNLQJ&RQWUDU\WR³0DUN´DQGSDWULVWLFVRXUFHV /XNH >@ GRHV QRW DGG D UHIHUHQFH WR WKH H[DOWDWLRQ WH[W SDU H[FHOOHQFH 3VDOPWRLQWHUSUHWWKHHYHQW,QPDUNHGGLVWLQFWLRQIURPPDQ\FKXUFK IDWKHUVWKHUHLVQRPHQWLRQRI'DQLHO±,QFRQWUDVWZLWK(SKHVLDQV ±DQGSDWULVWLFDXWKRUV3VDOPGRHVQRWSOD\DUROHLQ/XNH¶VVWRU\ 7KHFORXG$FWV DQRWKHUZLVHDSWPRWLILQDWKHRSKDQ\DQGH[DOWDWLRQ VHWWLQJFOHDUO\SUHYHQWVWKHGLVFLSOHVWRVHHZKDWWKH\HDUOLHUKDGVHHQRQ WKH0RXQWRI7UDQV¿JXUDWLRQDVSHFWDFXODUPDQLIHVWDWLRQRI-HVXV¶IXWXUH JORU\RUIURPZKDW6WHSKHQODWHURQZRXOGH[SHULHQFHDQLPPHGLDWHYLHZ LQWRWKHJORULRXVSUHVHQFHRI*RGZKHUHKHVDZ-HVXVਦıIJ૵IJĮਥțįİȟȚ૵ȞIJȠ૨ șİȠ૨$FWV± $OLWHUDU\FRPSDULVRQRIWKHWKUHHWH[WVLQTXHVWLRQLV YHU\LQVWUXFWLYH /XNH $FWV $FWV

İੇįȠȞIJ੽ȞįંȟĮȞĮ੝IJȠ૨ ੪Ȣ

ਕIJİȞ઀ȗȠȞIJİȢ਷ıĮȞ ਕIJİȞ઀ıĮȢ

İੁȢIJઁȞȠ੝ȡĮȞઁȞ İੁȢIJઁȞȠ੝ȡĮȞઁȞ

>@ İੇįİȞįંȟĮȞșİȠ૨țIJȜ

,QWKHOLJKWRIDOOWKHSRVVLELOLWLHVWKDW/XNHKDGDWKLVGLVSRVDOWRFUHDWHD WHOOLQJ H[DOWDWLRQ VFHQHU\ WKH DEVHQFH RI H[DOWDWLRQ LPDJHU\ LQ WKH DVFHQ -HZLVK JURXSV DUH GDQJHURXVO\ QHDU WR WKLV FRQFHSWXDOL]DWLRQ HJ WKH 0HWDWURQ VSHFXOD WLRQV %XWRQHFDQDVNKRZUHSUHVHQWDWLYHRI³PDLQVWUHDP-XGDLVP´WKHVHDUH  ௘)RU WKH :LUNXQJVJHVFKLFKWH RI WKH DVFHQVLRQ PRWLI LQ WKH HDUO\ FKXUFK VHH -* 'DYLHV+H$VFHQGHGLQWR+HDYHQ$6WXG\LQWKH+LVWRU\RI'RFWULQH%D//RQGRQ /XWWHUZRUWK   '% )DUURZ $VFHQVLRQ DQG (FFOHVLD 2Q WKH 6LJQL¿FDQFH RI WKH 'RFWULQH RI WKH $VFHQVLRQ IRU (FFOHVLRORJ\ DQG &KULVWLDQ &RVPRORJ\ (GLQEXUJK 7 7 &ODUN*UDQG5DSLGV(HUGPDQV   ௘7 KHFORXGPRWLIDORQHGRHVQRWVXI¿FHVLQFHWKLVLVDVWDQGDUGUDSWXUHPRWLIDQGRF FXUVLQDYDULHW\RIRWKHUFRQWH[WVLQWKHELEOLFDOWUDGLWLRQDVZHOO2QWKHFORXGPRWLILQWKH ELEOLFDOZULWLQJVVHH-/X]DUUDJD/DV7UDGLFLRQHVGHOD1XEHHQOD%LEOLD\HQHOMXGDLVPR SULPLWLYR$Q%LE5RPD3RQWL¿FLR,VWLWXWR%LEOLFR /6DERXULQ³7KH%LEOLFDO &ORXG7HUPLQRORJ\DQG7UDGLWLRQV´%7% ±



&KDSWHU$VVXPSWXVHVWLQFDHOXP

VLRQVWRU\LVVXJJHVWLYH,WGHPDQGVDWOHDVWDQH[SODQDWLRQ0\H[SODQDWLRQ LVDVLPSOHRQH/XNHGRHVQRWLQWHQGWRSRUWUD\WKHDVFHQVLRQDVDQH[DOWD WLRQDWDOO,I/XNH³NQHZKLVFODVVLFV´,PHDQWKHSULPLWLYHUHVXUUHFWLRQ DQG H[DOWDWLRQNHU\JPD WKHUHLVQRWKLQJVXUSULVLQJLQLWRIFRXUVHVLQFH WKDW UROH ZDV UHVHUYHG IRU WKH UHVXUUHFWLRQH[DOWDWLRQ FRPSOH[ WKH (DVWHU HYHQW  $WWKLVSRLQW,FDQKDUGO\UHVLVWWKHWHPSWDWLRQWREULQJLQDQRWKHUDUJX PHQWXPHVLOHQWLRZKDWLVRIWHQRYHUORRNHGLVWKDWWKHZRUGVRIWKHDQJHOLF LQWHUSUHWHUVDUHPRVWDSSURSULDWHWRWKHRFFDVLRQVHHQIURPWKH-HZLVKUDS WXUH SHUVSHFWLYH WKH\ FRQQHFW -HVXV¶ UDSWXUHDVFHQVLRQ ZLWK KLV HVFKDWR ORJLFDO UHWXUQ ³WKLV -HVXV  ZLOO FRPH LQ WKH VDPH ZD\ DV \RX VDZ KLP JRLQJ´ QRWZLWKKLVSUHVHQWSRVLWLRQLQKHDYHQDVWKH([DOWHG2QH³WKLV -HVXV*RGKDVH[DOWHG´ DVLQWKHNHU\JPDWLFVHFWLRQVLQWKHPLVVLRQDU\ VSHHFKHVRI$FWV ,I/XNHVLWXDWHVWKHH[DOWDWLRQLQFRQQHFWLRQZLWKWKHUHVXUUHFWLRQUDWKHU WKDQZLWKWKHDVFHQVLRQZKDWGRHVWKLVPHDQIRURXUXQGHUVWDQGLQJRIWKH /XNDQSRVW(DVWHUDSSHDUDQFHV"$QGKRZGRHVWKHDVFHQVLRQDQGH[DOWDWLRQ WHUPLQRORJ\RI$FWVII¿WLQ" )LUVWWKDWWKHUHVXUUHFWLRQDSSHDUDQFHVUHFRUGHGE\/XNHDUHQRWXQGHU VWRRGDV³DSSHDUDQFHVRIWKHDOUHDG\H[DOWHG/RUGIURPKHDYHQ´KDVWRGR ZLWK D IDLOXUH WR DSSUHFLDWH WKH OLWHUDU\ IRUP *DWWXQJ  LQ ZKLFK WKH\ DUH PRGHOOHG-RKQ($OVXSKDVFODVVL¿HGWKHDSSHDUDQFHWRWKHWZRPHQRQWKH URDGWR(PPDXVDQGWKHDSSHDUDQFHWRWKHGLVFLSOHVDV³DQWKURSRPRUSKLF WKHRSKDQ\ >@ VWRULHV´ DV ZH ¿QG WKHP LQ WKH 2OG 7HVWDPHQW DQG HDUO\ -HZLVKVRXUFHV*HQ([I-GJ6DP7REDQG7HVWDPHQW RI$EUDKDP 7KLVIRUPGHVFULEHVWKHDSSHDUDQFHRIDKHDYHQO\EHLQJLQ D KXPDQ PRGH RI EHLQJ ,W LV GLVWLQJXLVKHG IURP WKH PRUH VSHFWDFXODU PDQLIHVWDWLRQVRIWKHKHDYHQO\ZRUOGVXFKDVZH¿QGWKHPHJLQ([RGXV ± 7KH DQWKURSRPRUSKLF QDWXUH RI WKH DSSHDUDQFHV ZRXOG H[SODLQ WKH PRGHVW\ ZLWK ZKLFK /XNH GHVFULEHV WKHP 7KLV , WKLQN PD\ KDYH VRPHWKLQJWRGRZLWK/XNH¶V³DQWL*QRVWLFWHQGHQF\´RUDWOHDVWZLWKKLV REYLRXVFRQFHUQWRVWUHVVWKHFRUSRUHDOQDWXUHRIWKH(DVWHUDSSHDUDQFHVKH ௘-( $OVXS 7KH 3RVW5HVXUUHFWLRQ $SSHDUDQFH 6WRULHV RI WKH *RVSHO 7UDGLWLRQ $ +LVWRU\RI7UDGLWLRQ$QDO\VLV:LWK7H[W6\QRSVLV&7K06WXWWJDUW&DOZHU   ௘7 KRXJKIURPDGLIIHUHQWDQJOH)OHWFKHU/RXLV/XNH$FWV±LVLQDJUHHPHQWZLWK $OVXS¶VFRQFOXVLRQ³KLV>$OVXS¶V@XVHRIWKHH[SUHVVLRQµDQWKURSRPRUSKLFWKHRSKDQ\¶FDQ EHWDNHQDVV\QRQ\PRXV>ZLWKµDQJHORSKDQ\¶@´  ௘7 KH WHUP VKRXOG RI FRXUVH EH WDNHQ PXOWR FXP JUDQR VDOLV VLQFH /XNH GRHV QRW VHHP WR EH RSSRVLQJ D IXOOEORZQ *QRVWLF V\VWHP &I &. %DUUHWW /XNH WKH +LVWRULDQ LQ5HFHQW6WXG\/RQGRQ(SZRUWK ±&+7DOEHUW/XNHDQGWKH*QRVWLFV$Q ([DPLQDWLRQ RI WKH /XNDQ 3XUSRVH1DVKYLOOH7HQQ 1HZ FI-WKDW@ZHUHDOZD\VOLDEOHWREH WUDQVIHUUHGWRWKH-HZVDVDZKROH´+RZHYHUWKHUHLVQRWDVLQJOHWKUHDG ௘0DFFRE\-XGDV ௘(JDOVRE\SRSH*HODVLXV,DERXW &( (SLVWXOD&6(/³FXLORFX WLRQLVHQVXVLOOHFRQHFWLWXUFXPH[SDUWHWRWXPVDHSLXVQXQFXSDWXUVLFXWHWWXQFKRPR,XGD FXPWRWDPJHQWHPSURFXOGXELRQRPLQDUHW´  ௘, Q5RPDQV3DXOGLYLGHVKXPDQLW\LQWRWZRFDWHJRULHVWKRVHZKRDUH³LQ$GDP´DQG WKRVHZKRDUH³LQ&KULVW´5RP± ,QFRQWH[WLWLVSHUWLQHQWWRKLVDUJXPHQWWKDWKH JRHVEDFNWR$GDPWKH¿UVWKXPDQEHLQJ UDWKHUWKDQWR$EUDKDPRU0RVHVEHFDXVHKH ZDQWVWRWUDQVFHQGWKHQDWLRQDOLVWLFIRFXVRIWKHSHRSOHRI,VUDHO3DXODUJXHVRQWKHEDVLVRI XQLYHUVDOKXPDQFDWHJRULHVQRWVSHFL¿F-HZLVKHWKQLFRUUHOLJLRXV FDWHJRULHV6HH-'* 'XQQ7KH7KHRORJ\RI3DXOWKH$SRVWOH*UDQG5DSLGV(HUGPDQV ±  ௘$FFRUGLQJ WR .ODVVHQ WKHUH DUH SRLQWV RI FRUUHVSRQGHQFH EHWZHHQ WKH SDWULDUFK -XGDKDQG-XGDV,VFDULRWFKVDQG EXWWKHVHDUHW\SRORJLFDOFRUUHVSRQGHQFHVEHWZHHQ WZRKLVWRULFDOLQGLYLGXDOVUDWKHUWKDQEHWZHHQWZRFROOHFWLYHV'LHFNPDQQ-XGDVLV DOVRTXLWHRXWVSRNHQ³-XGDVLVWQLFKWDOV5HSUlVHQWDQWGHV-XGHQWXPV]XYHUVWHKHQ6HLQ 1DPHPDFKWLKQQLFKW]XP7\SXQG,QEHJULIIGHV-XGHQ'LH9HUELQGXQJGLHGLH7UDGLWLRQ ]ZLVFKHQ-XGDVXQGGHQ-XGHQKHUVWHOOWHZDUXQKHLOYROOXQGLVWHQWVFKLHGHQ]XYHUZHUIHQ 6LHKDWNHLQHELEOLVFKH*UXQGODJH´  ௘)RUDFULWLFDODQDO\VLVDQGUHFRQVWUXFWLRQRIWKHVHWH[WVVHH=ZLHS-XGDV±  ௘0DFFRE\0\WK  



&KDSWHU-XGDVDQGWKH-HZV

RIHYLGHQFHWKDW3DSLDVLQWHQGHGKLVSRUWUD\DORI-XGDVWRDIIHFWWKH-HZLVK SHRSOH,QIDFW3DSLDVLQYHVWV-XGDVZLWKWKHVWDQGDUGSXQLVKPHQWVIRXQG LQ*UHHN+HOOHQLVWLFWUDGLWLRQRIGLYLQHUHYHQJHRIZLFNHGLQGLYLGXDOVVHH DERYH  5DWKHU WKDQ VHHLQJ -XGDV DV D UHSUHVHQWDWLYH RI D FROOHFWLYH LW LV PXFKPRUHOLNHO\WKDWKHSUHVHQWVKLPDVDZLFNHGLQGLYLGXDO7KLVLQP\ YLHZDOVRDSSOLHVWRWKH6\QRSWLF*RVSHOV(VSHFLDOO\LQ/XNH¶VLQWHUSUHWD WLRQ-XGDVLVERWKPRUHKXPDQDQGPRUHGLDEROLFWKDWLVKLVKXPDQJXLOW LV VWUHVVHG DQG DW WKH VDPH WLPH KLJKHU IRUFHV DUH FDOOHG IRU )URP WKH SHUVSHFWLYH RI VRFLRORJ\ ORFDWLQJ HYLO LQ D KLVWRULFDO LQGLYLGXDO LV D ZHOO NQRZQFRSLQJVWUDWHJ\RULQWKHWHUPVXVHGE\VRFLRORJLVW%HQQHWW%HUJHU LWLVLGHRORJLFDOZRUNWRUHGXFHFRJQLWLYHGLVVRQDQFH,WPDNHVWKHREYLRXV GLOHPPDPRUHPDQDJHDEOHVRWRVSHDN

-XGDVWKH-HZVDQGWKH'HYLOLQWKH)RXUWK*RVSHO $Q([SORVLYH7ULDG +RZHYHUWKLVLVQRWDOOWKHUHLVWRVD\RQ-XGDVDQGWKH-HZV7KH)RXUWK *RVSHOQRWRQO\GLVSOD\VDUKHWRULFRIGHIDPDWLRQRI-XGDVEXWDOVRVSHDNV LQJHQHUDOL]LQJDQGVWHUHRW\SHGWHUPVRI³WKH-HZV´$SDUWIURPWKHZHOO NQRZQWUDQVODWLRQPDWWHULWLVVWLOODPDWWHURIGHEDWHZKRWKHGLVFXVVLRQ SDUWQHUV H[DFWO\ DUH DQG ZKHWKHU WKH JRVSHO FDQ EH ODEHOOHG DQWL-HZLVK RU DQWL6HPLWLF DQG LI VR WR ZKDW GHJUHH  3DUWLFLSDQWV RI WKH /RXYDLQ &ROORTXLXPRQ$QWL-XGDLVPLQWKH)RXUWK*RVSHO DWDQ\UDWHGLG QRWDUULYHDWDFRQVHQVXVRQWKHVHPDWWHUV ,QWKHGHEDWHRQWKH)RXUWK*RVSHO¶VDOOHJHGDQWL6HPLWLVPWKH¿JXUHRI -XGDVFDQQRWEHOHIWRXWRIFRQVLGHUDWLRQDOWKRXJKLWVXUSULVHVWRVHHWKDWKH LVRIWHQLJQRUHGLQVFKRODUO\VWXGLHVRQDQWL6HPLWLVP,QWKHSDSHUVRIWKH /RXYDLQ&ROORTXLXPIRULQVWDQFHWKHUHLVQRVHSDUDWHWUHDWPHQWRI-XGDV DQGWKH-HZVQRUDQ\UHIHUHQFHWR-XGDVRIDQ\VLJQL¿FDQFH,QWKH)RXUWK ௘%0%HUJHU7KH6XUYLYDORID&RXQWHUFXOWXUH,GHRORJLFDO:RUNDQG(YHU\GD\/LIH DPRQJ5XUDO&RPPXQDUGV%HUNHOH\8QLYHUVLW\RI&DOLIRUQLD1HZ%UXQVZLFN1- /RQGRQ7UDQVDFWLRQ   ௘6HH0DUVKDOO&RQFRUGDQFH±IRUUHIHUHQFHV  ௘%'$*  HJ SUHIHUV ³-XGHDQ´ WR ³-HZ´ DV WUDQVODWLRQ RI ੁȠȣįĮ૙ȠȢ HVSHFLDOO\ VR WRDYRLGWKHSRWHQWLDODQWL6HPLWLFFRQQRWDWLRQVRIWKHWUDQVODWLRQ³-HZ´IRUFRQWHPSRUDU\ UHDGHUV  ௘6HHWKHYDULRXVFRQWULEXWLRQVLQWKHZRUNRI5%LHULQJHU'3ROOHIH\W)9DQGHFDVWHHOH 9DQQHXYLOOHHGV $QWL-XGDLVPDQGWKH)RXUWK*RVSHO3DSHUVRIWKH/HXYHQ&ROORTXLXP -HZLVKDQG&KULVWLDQ+HULWDJH$VVHQ9DQ*RUFXP   ௘7 KLVLVDOVRREVHUYHGE\$DOEHUV-XGDV±,QWHUHVWLQJO\WKHUHYHUVHLVWUXHRI -XGDV)RUVFKXQJPRVW-XGDVVFKRODUVGHYRWHDWWHQWLRQWRWKHUROHRI-XGDVLQDQWL6HPLWLVP HJ.ODXFN-XGDV'LHFNPDQQ-XGDV0DFFRE\-XGDV.ODVVHQ-XGDV$DOEHUV -XGDV ±±3DIIHQURWK-XGDV±DOODXWKRUVLQFOXGLQJIXUWKHUUHIHUHQFHV  

-XGDVWKH-HZVDQGWKH'HYLOLQWKH)RXUWK*RVSHO



*RVSHO KRZHYHU -XGDV LV PRUH WKDQ RQFH H[SOLFLWO\ DVVRFLDWHG ZLWK WKH GHYLO-Q±FI DQGVXJJHVWLYHO\LQFKDSWHUWKHRS SRQHQWVRI-HVXV³WKH-HZV´DUHDVVRFLDWHGZLWKWKHGHYLODVZHOO,QDKRWO\ GHEDWHEHWZHHQ-HVXVDQGKLV-HZLVKRSSRQHQWVDERXWWKHLUVSLULWXDOSDUHQW KRRGWKH-RKDQQLQH-HVXVDUJXHVWKDWWKH\DUHQRWFKLOGUHQRI$EUDKDPEXW FKLOGUHQRIWKHGHYLO³ WRQJXHV@RQVQLHWQDDUKHWKDUW YDQGHFKULVWHOLMNHVSLULWXDOLWHLWYRHUW´³WKDWWKHH[HUFLVHRIWKLVJLIWGRHVQRWWDNHXVWRWKH FHQWHU RI &KULVWLDQ VSLULWXDOLW\´   6HH DOVR 53 0HQ]LHV 7KH 'HYHORSPHQW RI (DUO\ &KULVWLDQ3QHXPDWRORJ\ZLWK6SHFLDO5HIHUHQFHWR/XNH$FWV-61766KHI¿HOG-627 3UHVV 

&RPPRQ*URXQG



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¿QGFRQ¿UPDWLRQRIZKDWRQHDOUHDG\ EHOLHYHVDQ³LQVLGHUSHUVSHFWLYH´QHHGVWKHOLWPXVWHVWRIDQ³RXWVLGHUSHU VSHFWLYH´ 7KLV UHTXLUHV D PRUH IXQGDPHQWDO GHEDWH RQ WKH QDWXUH RI UHOL JLRXVH[SHULHQFHPRGHVRIUHYHODWLRQWKHFUHDWLYHDQGGLVWRUWLQJLQÀXHQFH RI ZRUOGYLHZV DQG VR IRUWK ,Q RXU FRQWHPSRUDU\ VLWXDWLRQ RI VHFXODULVP JOREDOL]DWLRQDQGLQWHUUHOLJLRXVGLDORJXH,WKLQNWKHVHHSLVWHPRORJLFDODQG KHUPHQHXWLFDOTXHVWLRQVDUHIDUPRUHXUJHQWWKDQWKHH[HJHWLFDOLVVXHVQRZ XQGHUGHEDWHDQGKHUH(YDQJHOLFDOVDQG3HQWHFRVWDOVKDYHDFRPPRQWDVN DQG SUREDEO\ D FRPPRQ FRQWULEXWLRQ WR PDNH +RZHYHU IRU WKH SUHVHQW SXUSRVHP\REMHFWLYHLVPRUHPRGHVWDV,ZLOOIRFXVRQVRPHRIWKHH[HJHWL FDODQGELEOLFDOWKHRORJLFDOTXHVWLRQVLQYROYHG%XWWKHLVVXHV,PHQWLRQHG DUHFRQVWDQWO\OXULQJLQWKHEDFNJURXQG

&RPPRQ*URXQG 7RFOHDUWKH¿HOGIRUDUHDOGHEDWHLWPD\EHKHOSIXOWRVSHOORXW¿UVWZKDW WKHUHLVLQFRPPRQWKDWLVZKDWELEOLFDOVFKRODUVKLSKDVJDLQHGIURPWKH SDVWWKLUW\RUWKLUW\¿YH\HDUVRUVRWDNLQJXQGHUVWDQGDEO\-DPHV'XQQ¶V LQÀXHQWLDO VWXG\ RQ %DSWLVP LQ WKH +RO\ 6SLULW IURP  DV D VWDUWLQJ SRLQW7KLVKHOSVXVWRSXWWKHZKROHPDWWHULQSHUVSHFWLYHDQGWRRXWOLQH ௘6HH WKH UHOHYDQW DUWLFOHV LQ '0 :XOII 3V\FKRORJ\ RI 5HOLJLRQ &ODVVLF DQG &RQWHPSRUDU\1HZVFKHQNW@GHU*HLVWQXUGLH.UDIWGLHEHIlKLJW HLQHQEHVRQGHUHQ$XIWUDJ]XHUIOOHQVHLQHQ*ODXEHQ]XNRQNUHWHP+DQGHOQ]XJHVWDOWHQ´  ௘&IHJ$FWVZKHUH3HWHUUHIHUVWRWKH3HQWHFRVWDOJLIWRIWKH6SLULWLQWKHXQPLV WDNDEOHFRQWH[WRIDUHIHUHQFHWRVDOYDWLRQ³WKHVDPHJLIWWKDWKHJDYHXVZKHQZHEHOLHYHG LQWKH/RUG-HVXV&KULVW´ ,QVRPHFDVHVWKHVSHFL¿FDLPRI6SLULWEDSWLVPLVVLPSO\QRW PHQWLRQHGHJLQ$FWV ,QVXFKFDVHVWKHPLVVLRQDU\IRFXVLVLPSOLHGDWPRVW%XWVHH 0HQ]LHV 6SLULW DQG 3RZHU  ³H[FOXVLYHO\´   ³H[FOXVLYHO\´   ³H[FOXVLYHO\´   ³H[FOXVLYHO\´ ³FRQVLVWHQWO\´ $PRUHFDXWLRXVDSSURDFKLVWDNHQE\+5'XQQLQJ *UDFH )DLWK DQG +ROLQHVV $ :HVOH\DQ 6\VWHPDWLF 7KHRORJ\ .DQVDV &LW\ %HDFRQ +LOO  ±ZKRLQWHUSUHWVWKHZRUNRIWKH6SLULWLQ/XNH$FWVLQWHUPVRIERWKPRUDO UHQHZDOVDQFWL¿FDWLRQ DQGHQGRZPHQWIRUSURSKHF\  ௘,OOXVWUDWLYH RI WKH (YDQJHOLFDO RSHQQHVV WRZDUGV WKH 3HQWHFRVWDO DQG FKDULVPDWLF UH QHZDODUHHJ*0DOORQHHWDO7KRVH&RQWURYHUVLDO*LIWV/RQGRQ+RGGHU 6WRXJKWRQ  DQGWKHZULWLQJVRI&+3LQQRFNDQG6-*UHQ]



&KDSWHU/XNH¶V8QGHUVWDQGLQJRI%DSWLVPLQWKH+RO\6SLULW

7KH6\VWHPDWL]DWLRQ)DOODF\ %HIRUHPDNLQJVRPHPRUHVXEVWDQWLDOFRPPHQWVRQ/XNH¶VYLHZRIWKHEDS WLVPLQWKH6SLULW,WKLQNDQLPSRUWDQWZDUQLQJLVQHFHVVDU\DJDLQVWZKDW, ZRXOGFDOOWKH³V\VWHPDWL]DWLRQIDOODF\´7KHGULYHWRV\VWHPDWL]HZKDWFDQ QRWDQGSHUKDSVVKRXOGQRWEHV\VWHPDWL]HGLVDVHULRXVREVWDFOHLQWKHFXU UHQWGHEDWH6\VWHPDWL]DWLRQLVWKHLQGLVSHQVDEOHZRUNRIVFKRODUV\HWWKH ULVNWKDWPHWKRGRYHUUXOHVDQGGLVWRUWVFRQWHQWLVDVHULRXVRQHHVSHFLDOO\ ZKHQZHDUHGHDOLQJZLWKWKH6SLULWZKRLQWKHKLJKO\DPELYDOHQWZRUGV RI WKH )RXUWK (YDQJHOLVW ³EORZV ZKHUH KH ZLOOV´ -Q   SUREDEO\ ERWK 3DXODQG/XNHZRXOGDJUHHRQWKDW :DVLWUHDOO\/XNH¶VLQWHQWLRQWRWHDFK VRPHWKLQJRQPDWWHUVRIVXEVHTXHQFHRUGRVDOXWLVOHYHOVRIVDQFWL¿FDWLRQ DQGVRIRUWKRUGLGKHVLPSO\ZLVKWRVKRZWKHGLYHUVLW\DQGWKHG\QDPLFV RIWKHZRUNLQJRIWKH6SLULWLQWKHHDUO\&KULVWLDQFRPPXQLW\",VQRWWKH IDFWWKDW/XNHGHVFULEHVWKHHIIHFWVRIVDOYDWLRQLQKLVWRU\LQVRPDQ\GLIIHU HQWFRQVWHOODWLRQVWKLQNHJRIWKHYDU\LQJVHTXHQFHRIFRQYHUVLRQEDSWLVP UHFHSWLRQRIWKH6SLULWHWFLQ$FWV LQGLFDWLYHRIWKHIDFWWKDWKHGRHVQRW ZDQWWR³V\VWHPDWL]H´VDOYDWLRQRIWKHLQGLYLGXDODQG&KULVWLDQOLIHDWODUJH LQD¿[HGVFKHPHRIVDOYDWLRQ",VXVSHFWWKDWWKHGULYHDWV\VWHPDWL]DWLRQ LVVLPSO\RQHRIWKHIUXLWVRI(QOLJKWHQPHQWUDWLRQDOLVP$VVRRQDVPHWKRG UHDFKHVLWVERXQGDU\WKHH[HJHWHVKRXOGEHDWWKHDOHUWDQGQRWVXFFXPEWRR TXLFNO\WRWKHWHPSWDWLRQRI¿OOLQJLQWKHJDSV$ELWRI*DGDPHULDQUHVLVW DQFHDJDLQVWPHWKRGZRXOGQRWEHEDG %XWOHWXVQRZWXUQWRPDWWHUVRIFRQWHQW,QZKDWIROORZV,ZLVKWRGLV FXVVEDSWLVPLQWKH6SLULWDVDQHVFKDWRORJLFDOHYHQWDVDFRUSRUDWHHYHQW DQG DV D IXWXUH DQG SUHVHQW H[SHULHQFH , ZLOO SRLQW WR D SRVVLEOH SDUDOOHO IURP4XPUDQPHQWLRQVRPHLPSOLFDWLRQVRI3HQWHFRVWDVDEDUULHUEUHDNLQJ HYHQWDQGGUDZLPSOLFDWLRQVIURP/XNHDQG3DXOLQDFDQRQLFDOSHUVSHFWLYH ,URXQGRIIZLWKVRPHFRQFOXGLQJUHPDUNV

 ௘&I6FKZHL]HU7K:17³>*@HUDGHLQGHU$SRVWHOJHVFKLFKWH>ZLUG@GLH)UHLKHLW GHV*HLVWHVVWDUNXQWHUVWULFKHQ´6FKZHL]HUPDNHVKLVVWDWHPHQWLQWKHFRQWH[WRIWKHUROHRI EDSWLVPDQGUHFHSWLRQRIWKH6SLULW&ILQDVLPLODUYHLQ%:LWKHULQJWRQ7KH$FWVRIWKH $SRVWOHV$6RFLR5KHWRULFDO&RPPHQWDU\*UDQG5DSLGV&DPEULGJH(HUGPDQV&DUOLVOH 3DWHUQRVWHU ±  ௘2QWKHUROHRIZDWHUEDSWLVPDVGLVWLQFWIURP6SLULWEDSWLVP LQ$FWVVHH$YHPDULH 7DXIHU]lKOXQJHQ()HUJXVRQ%DSWLVPLQWKH(DUO\&KXUFK+LVWRU\7KHRORJ\DQG/LWXUJ\ LQWKH)LUVW)LYH&HQWXULHV*UDQG5DSLGV&DPEULGJH(HUGPDQV ±  ௘+**DGDPHU:DKUKHLWXQG0HWKRGH*UXQG]JHHLQHUSKLORVRSKLVFKHQ+HUPHQHXWLN *:±7ELQJHQ0RKU6LHEHFN %GH

6SLULW%DSWLVPDVDQ(VFKDWRORJLFDO(YHQW



%DSWLVPLQWKH6SLULWDVDQ(VFKDWRORJLFDO(YHQW ,QOLQHZLWKWKH2OG7HVWDPHQWSURSKHFLHVDERXWWKHRXWSRXULQJRIWKH6SLULW RI*RGSURPLVHGWRWKHQDWLRQRI,VUDHO³LQWKHODVWGD\V´RULQWKHQHDURU GLVWDQWIXWXUH-RHO±(]HN±,VD± /XNHVSHDNVRI VDOYDWLRQDQGWKHZRUNRIWKH6SLULWLQHVFKDWRORJLFDOWHUPV ,QWKH/XNDQSURFODPDWLRQRI-RKQWKH%DSWLVWWREHJLQZLWKD³EDSWLVP ZLWK6SLULWDQG¿UH´LVDQQRXQFHGWKDWZLOOEHH[SHULHQFHGE\WKHSHQLWHQW DQGWKHZLFNHGDOLNHVRPHZKHUHLQWKHQHDUIXWXUH -RKQDQVZHUHGDOORIWKHPE\VD\LQJ³,EDSWL]H\RXZLWKZDWHUEXWRQHZKRLVPRUHSRZ HUIXOWKDQ,LVFRPLQJ,DPQRWZRUWK\WRXQWLHWKHWKRQJRIKLVVDQGDOV+HZLOOEDSWL]H \RXZLWKWKH+RO\6SLULWDQG¿UH+LVZLQQRZLQJIRUNLVLQKLVKDQGWRFOHDUKLVWKUHVKLQJ ÀRRUDQGWRJDWKHUWKHZKHDWLQWRKLVJUDQDU\EXWWKHFKDIIKHZLOOEXUQZLWKXQTXHQFK DEOH¿UH´/N±1569 

,WLVRQHHYHQWZKLFKLVLQYLHZZLWKDGXDOHIIHFWEOHVVLQJ³+RO\6SLULW´  DQGMXGJHPHQW³¿UH´ ,QWKHSUH/XNDQVWUDQGRIWUDGLWLRQWKHUHIHUHQFH RIWKHH[SHFWHG³EDSWLVPZLWKWKH+RO\6SLULW´0N RULQLWV4YHUVLRQ ³EDSWLVP ZLWK WKH +RO\ 6SLULW DQG  ¿UH´ 4/N   LV FOHDUO\ WR ZKDW LV WUDGLWLRQDOO\ FDOOHG WKH 'D\ RI -XGJHPHQW RU ZKDW ZH ZRXOG QRZDGD\V FDOOWKH(VFKDWRQ7KHVD\LQJLVDFOHDUWHVWLPRQ\WRWKHIHUYHQWLPPLQHQW H[SHFWDWLRQDWWKHWLPH1DKHUZDUWXQJ ,Q0DUNDWDQ\UDWHWKHUHLVQRW DVLQJOHUHIHUHQFHWRDIXO¿OPHQWDW3HQWHFRVW7KHHYLGHQFHVXJJHVWVWKDW ௘&I.%HUJHU³*HLVW+HLOLJHU*HLVW*HLVWHVJDEHQ,,,1HXHV7HVWDPHQW´LQ75(  ³$OOHVZDVGLHFKULVWOLFKH*HPHLQGHLQEHVRQGHUHP0D‰HDXV]HLFKQHWZLUG XQWHUGLH9RU]HLFKHQGHV(QGHVHLQJHUHLKWXQGGDKHUVWULNWHVFKDWRORJLVFKJHGHXWHW6RZLUG GLHJlQJLJH0HLQXQJZLGHUOHJW/NVHLHLQ9HUWUHWHUGHU(QWHVFKDWRORJLVLHUXQJ´  ௘6R HJ 'XQQ %DSWLVP ± LGHP ³6SLULWDQG)LUH %DSWLVP´ 17    ± LGHP-HVXV5HPHPEHUHG&KULVWLDQLW\LQWKH0DNLQJ*UDQG5DSLGV(HUGPDQV  ±DQGQ -1ROODQG/XNH±:%&$'DOODV7H[:RUG ± :KDWWKHSUHFLVHPHWDSKRURIWKH6SLULWEDSWLVHU¶VDFWLYLW\HQWDLOVLVLPPDWHULDOWRRXUSXU SRVH6HH5/:HEE³7KH$FWLYLW\RI-RKQWKH%DSWLVW¶V([SHFWHG)LJXUHDWWKH7KUHVKLQJ )ORRU0DWWKHZ /XNH ´-617 ±  ௘6R4/N 5HIHUHQFHVWR4PDWHULDODUHIURP-05RELQVRQ3+RIIPDQQ-6 .ORSSHQERUJHGV 7KH&ULWLFDO(GLWLRQRI46\QRSVLV,QFOXGLQJWKH*RVSHOVRI0DWWKHZ DQG /XNH 0DUN DQG 7KRPDV ZLWK (QJOLVK *HUPDQ DQG )UHQFK 7UDQVODWLRQV RI 4 DQG 7KRPDV /HXYHQ 3HHWHUV 0LQQHDSROLV )RUWUHVV   &I ) %RYRQ /¶eYDQJLOH VHORQ VDLQW/XF±&17,,,D*HQHYD/DERUHW)LGHV ³µ/HIHX¶DSSDUWLHQWVDQVGRXWH jODSUHPLqUHYHUVLRQGH4µ/HVDLQW(VSULW¶HVWXQHLQWHUSUpWDWLRQFKUpWLHQQH´%RYRQOHDYHV XQGHFLGHGZKHWKHUWKHUHIHUHQFHWRWKH6SLULWZDVDGGHGLQDODWHUVWDJHRIWKHIRUPDWLRQRI 4RULVWREHH[SODLQHGLQWHUPVRI/XNDQUHGDFWLRQ  ௘&RQWUD(%HVW0DUN7KH*RVSHODV6WRU\617:(GLQEXUJK7 7&ODUN  6HHWKHH[FHOOHQWDUWLFOHE\%0)YDQ,HUVHO³+H:LOO%DSWL]HVRULJKWO\+XUWDGR/RUG-HVXV&KULVW@ 



$FWVLQ/XNH¶V/DUJHU&KULVWRORJLFDO3URMHFW



VD\IURPWKHYHU\EHJLQQLQJVRIKLVHDUWKO\OLIH 7KLVFRQYLFWLRQLVKHDUG IURPWKHPRXWKRIQDUUDWLYHFKDUDFWHUVDQGLQHGLWRULDOPDWHULDO(YHQEH IRUHWKHELUWKRI-HVXV0DU\LVDOUHDG\KDLOHGE\(OL]DEHWKDV³WKHPRWKHU RI P\ /RUG´ ਲ ȝ੾IJȘȡ IJȠ૨ țȣȡ઀Ƞȣ ȝȠȣ /N   $W -HVXV¶ ELUWK QR OHVV WKDQDQDQJHORIWKH/RUGSURFODLPVWRWKHVKHSKHUGVLQWKH¿HOGV³7R\RX LVERUQWKLVGD\LQWKHFLW\RI'DYLGD6DYLRXUZKRLVWKH0HVVLDKWKH/RUG ıȦIJ੽ȡ੖ȢਥıIJȚȞȤȡȚıIJઁȢț઄ȡȚȠȢ ´/N ZKLFKVRXQGVYHU\PXFKOLNHD SURJUDPPDWLFVWDWHPHQWDERXW-HVXV¶VSHFLDOVWDWXV$QGPXFKPRUHWKDQ LVWKHFDVHLQWKHRWKHUJRVSHOVWKH/XNDQ-HVXVLVDGGUHVVHGDVț઄ȡȚȠȢRQ D QXPEHU RI RFFDVLRQV GXULQJ KLV HDUWKO\ PLQLVWU\ E\ ERWK LQVLGHUV DQG RXWVLGHUV 7KH TXHVWLRQ KDV UHFHQWO\ EHHQ WDNHQ XS E\ & .DYLQ 5RZH LQ VHYHUDO SXEOLFDWLRQV,QKLVGRFWRUDOGLVVHUWDWLRQRQWKHXVHRIț઄ȡȚȠȢLQWKH*RVSHO RI/XNHKHDUJXHGWKDW/XNH¶VXVHRIț઄ȡȚȠȢIRUERWK*RGDQG-HVXVELQGV WKH WZR WRJHWKHU LQ D VKDUHG LGHQWLW\ ,Q WKH QDUUDWLYH RI /XNH KH QRWHV WKHUHLVDODUJHGHJUHHRIDPELYDOHQFHDVWRWKHLGHQWLW\RIWKHț઄ȡȚȠȢ*RG RU -HVXV  ZLWK WKH HIIHFW WKDW -HVXV DQG *RG EHFRPH PRUH RU OHVV LQVHSD UDEOH,QGHHGLQERWK/XNHDQG$FWVLWLVQRWDOZD\VFOHDUZKHWKHUț઄ȡȚȠȢ PHDQV ț઄ȡȚȠȢ șİંȢ RU ț઄ȡȚȠȢ ੉ȘıȠ૨Ȣ 7KLV LV FOHDUO\ D /XNDQ VWUDWHJ\ WR PDNHWKHFKULVWRORJLFDOFODLPWKDW-HVXVLVWREHDVVRFLDWHGQRWQHFHVVDULO\ WREHLGHQWL¿HG ZLWK*RG/XNH¶VXVHRIț઄ȡȚȠȢLQRWKHUZRUGVVHUYHVWR XQLWHWKHHDUWKO\-HVXVZLWKWKHUHVXUUHFWHG-HVXVDQGZLWK*RG ,Q KLV ERRN 5RZH PDGH VRPH FRPPHQWV RQ $FWV  VLQFH WKLV WH[W REYLRXVO\LVWKHSURYHUELDOH[FHSWLRQWRWKHUXOH5RZH¶VUXOHWKDWLV LILW GRHVQRWUXQFRXQWHUZLWKKLVDUJXPHQWDOWRJHWKHU/DWHURQKHDGGUHVVHG WKHLVVXHDOVRLQDVHSDUDWHDUWLFOHLQ1HZ7HVWDPHQW6WXGLHVDQGWKHUHLQKH VWUHVVHGWKHQHHGWRLQWHUSUHWWKHWH[WLQWKHOLJKWRI/XNH¶VZLGHUQDUUDWLYH VWUDWHJ\ LQFOXGLQJ WKH PDWHULDO IRXQG LQ WKH JRVSHO +H FRQFOXGHG WKHUH  ௘, Q/XNH$FWVWKHUHVHHPVWREHQRURRPIRUSUHH[LVWHQFHFRQWUD6-*DWKHUFROH7KH 3UHH[LVWHQW6RQ5HFRYHULQJWKH&KULVWRORJLHVRI0DWWKHZ0DUNDQG/XNH*UDQG5DSLGV &DPEULGJH(HUGPDQV   7KHYDULDQWUHDGLQJȤȡȚıIJઁȢț઄ȡȚȠȣLWȕUYLGYJ PVV\U SDO'LDWHVVDURQDUP LVVHFRQGDU\6HH %0 0HW]JHU $ 7H[WXDO &RPPHQWDU\ RQ WKH *UHHN 1HZ 7HVWDPHQW 6WXWWJDUW 'HXWVFKH %LEHOJHVHOOVFKDIW8%6 &.5RZH(DUO\1DUUDWLYH&KULVWRORJ\7KH/RUG LQWKH*RVSHORI/XNH%=1:%HUOLQ1HZL@IZHWDNHWKHVHTXHQFHRIWKHQDUUDWLYHVHULRXVO\ WKHUHZDVQR -HVXVZKRZDVQRWDOUHDG\DQGVLPXOWDQHRXVO\ț઄ȡȚȠȢ%\VSHDNLQJRIRQH ZKRZDVVWLOOLQWKHZRPEDVț઄ȡȚȠȢ/XNHSUHVVHVWKHFKULVWRORJLFDOO\LQ GLVSHQVDEOHSRLQWWKDW-HVXV¶YHU\OLIHDQGKLVLGHQWLW\DV/RUGDUHWKHVDPH WKLQJ´$QG³,QWKH/XNDQQDUUDWLYHWKHUHZDVQRWDWLPHZKHQ-HVXVZDV QRWț઄ȡȚȠȢ´7KLVFRQFOXVLRQ,WKLQNLVIRUPDOO\FRUUHFWEXWLWGRHVQRW GRMXVWLFHWR/XNH¶VPRUHVHQVLWLYHVHPDQWLFWUHDWPHQWRIWKHWLWXODUXVHRI ț઄ȡȚȠȢ,QIDFW$FWVPD\ZHOOEHWKH$FKLOOHVKHHOWRKLVZKROHWKHVLV

6RPH0HWKRGRORJLFDO5HÀHFWLRQV ,I , XQGHUVWDQG 5RZH FRUUHFWO\ KH VD\V WKDW $FWV  LV D FRPPHQW RQ GLYLQHDFWLRQ±LWZDV*RGZKRDFWHGXSRQ-HVXVWKHUHLVQRHPSKDVLVRQ -HVXVEHLQJPDGHVRPHRQHRUVRPHWKLQJKHZDVQRWEHIRUH7KHSUREOHPLV WKDWWKLVLQWHUSUHWDWLRQYLUWXDOO\LJQRUHVWKHQDWXUDOPHDQLQJRIਥʌȠ઀ȘıİȞDV DYHUEXPDFWLRQLVDYHUEWKDWH[SUHVVHVSDVW DFWLRQ 7KHSUREOHPOLHVLQWKHODVWSDUWRI5RZH¶VHDUOLHUTXRWHGVHQWHQFH³-HVXV¶ YHU\OLIHDQGKLVLGHQWLW\DV/RUGDUHWKHVDPHWKLQJ´7ZRSDUWLFXODUFRP PHQWVDUHLQRUGHUEHIRUH,HPEDUNXSRQDQDOWHUQDWLYHLQWHUSUHWDWLRQRIWKH GDWD )LUVW5RZHWDNHVKLVSRLQWRIGHSDUWXUHLQDVWULFWO\VHTXHQWLDOUHDGLQJRI /XNH¶VJRVSHODOLQHDUUHDGLQJIURPVWDUWWR¿QLVKSDUWO\GHULYHGIURPWKH LQWHUSUHWDWLRQRIțĮșİȟોȢLQWKH/XNDQSUHIDFHWRPHDQ³LQVHTXHQFH´UDWKHU WKDQ ³LQ RUGHU´ :KHWKHU WKLV XQGHUVWDQGLQJ RI țĮșİȟોȢ LV FRUUHFW QHHG QRWERWKHUXVDWWKHPRPHQW0RUHSHUWLQHQWWRRXUTXHVWLRQLV5RZH¶VVXJ JHVWLRQWKDWWKHUHDGHURI/XNHVWDUWVIURPDEODQNDQGKDYLQJUHDGWKHHQ WLUHJRVSHODOOWKURXJKKDVDUULYHGDWDPRUHRUOHVVFRPSOHWHG&KULVWRORJ\ ZKLFKWKHUHDGLQJRI$FWVZLOOQRWVXEVWDQWLDOO\DOWHU+RZHYHU5RZHVWRSV SUHFLVHO\DWWKHSRLQWZKHUHWKHFUXFLDOTXHVWLRQVHPHUJH+HLQYHVWLJDWHV WKH*RVSHORI/XNHEXWQRWWKH%RRNRI$FWV+RZHYHUWDNLQJ$FWVLQWR DFFRXQWLVDQLQGLVSHQVDEOHVWHSWRJHWDJUDVSRI/XNH¶VRYHUDOOSLFWXUH,Q SUDFWLFH WKH DFW RI UHDGLQJ DV ZHOO DV WKH DFW RI ZULWLQJ IRU WKDW PDWWHU  LVIDUIURPOLQHDUHVSHFLDOO\VRLQWKHFDVHRIUHDGHUVVXFKDV7KHRSKLOXV ZKRPXVWKDYHKDGDWOHDVWVRPHSULRUNQRZOHGJHRIWKHEDVLFVRI&KULVWLDQ EHOLHIEHIRUHKHFDPHWRUHDGWKH*RVSHORI/XNH7KH¿UVWUHDGHURI/XNH¶V JRVSHOLVQRWXQLQIRUPHGKHRUVKHGRHVQRWFRPHWRKLVQDUUDWLYHZLWKRXW SULRUFRQYLFWLRQVDERXW-HVXVDQGWKHHDUO\&KULVWLDQSUHDFKLQJ ,IZHPD\ 5RZH³&RQWLQXLW\´ 5RZH³&RQWLQXLW\´  5RZH(DUO\1DUUDWLYH&KULVWRORJ\±Q  6HH5RZH(DUO\1DUUDWLYH&KULVWRORJ\IRUKLVGHIHQVH  $SRLQWDGPLWWHGE\5RZH(DUO\1DUUDWLYH&KULVWRORJ\³,WLVSUREDEO\VRXQGWR 



,QVLJKWVIURP6SHHFK$FW7KHRU\DQG1DUUDWLYH&ULWLFLVP



WDNH 7KHRSKLOXV DV D PRGHO UHDGHU LW LV OLNHO\ WKDW /XNH H[SHFWV KLP WR KDYHDOUHDG\DEDVLFNQRZOHGJHRIVRPHRIWKHEDVLFVRI&KULVWLDQIDLWKHL WKHUWKURXJKRUDOWUDGLWLRQIRUPDOLQVWUXFWLRQRUZULWWHQPDWHULDO,QRWKHU ZRUGVWKHRXWFRPHRIWKHJRVSHOPXVWKDYHSOD\HGDUROHLQWKHUHDGHU¶VSUH XQGHUVWDQGLQJDQGKDYHVKDSHGWKHUHDGHUH[SHFWDWLRQVIURPWKHVWDUW7KH HDUO\FKDSWHUVFDQQRWRUVKRXOGQRW EHUHDGLQLVRODWLRQIURPLWVGHQRXH PHQWWKDWLVLQLVRODWLRQIURPWKHZLGHO\DWWHVWHGEHOLHILQWKHH[DOWHG/RUG KHUH,DJUHHZLWK5RZH EXWQHLWKHULQLVRODWLRQIURP/XNH¶VVHTXHOLQ$FWV KHUH,GLVDJUHHZLWK5RZH  6HFRQGLWFDQQRWEHVDLGZLWKRXWIXUWKHUTXDOL¿FDWLRQWKDWIRU/XNH-HVXV¶ LGHQWLW\DVț઄ȡȚȠȢEHIRUHDQGDIWHUWKHUHVXUUHFWLRQH[DOWDWLRQLV³RQHDQG WKHVDPHWKLQJ´-HVXV¶/RUGVKLS³LQWKHZRPE´/N VRWRVSHDNLVD GLIIHUHQWFDWHJRU\GLVFORVHVDGLIIHUHQWSHUVSHFWLYHRUUHSUHVHQWVDGLIIHU HQWGLVFRXUVRUPRGXVORTXHQGLLVDGLIIHUHQWODQJXDJHJDPHLI\RXOLNH  WKDQ VWDWHPHQWV DERXW KLV SUHVHQW /RUGVKLS ³DW WKH ULJKW KDQG RI *RG´ 7KHVH FDQQRW EH FDVW LQ D KHDS ,GHQWLW\ DIWHU DOO LV D ÀXLG FRQFHSW ,W LV QRWRQO\UHODWLYHLQWKHVWULFWVHQVHRIWKHZRUGP\LGHQWLW\LVUHODWHGWRRU GHSHQGVXSRQRWKHUSHUVRQVRULQVWLWXWLRQVWRZKRP,DPUHODWHG  EXWLW LV FKDUDFWHUL]HG E\ FKDQJH JURZWK GHYHORSPHQW WKH SHUVRQ , ZDV WHQ RU WZHQW\\HDUVDJRKDVXQGHUJRQHDQXPEHURILQÀXHQFHVWKDWPDGHPHWKH SHUVRQ,DPQRZ$SSOLHGWR-HVXV¶LGHQWLW\DV/RUGPXFKGHSHQGVRQLWV FRQWH[WDQGSUHKLVWRU\

,QVLJKWVIURP6SHHFK$FW7KHRU\DQG1DUUDWLYH&ULWLFLVP $QDSSURSULDWHZD\WRGHVFULEHRUHOXFLGDWH/XNH¶VSDUWLFXODUXVHRIț઄ȡȚȠȢ DVDSSOLHGWR-HVXVPD\EHIRXQGLQDQDSSOLFDWLRQRI 6SHHFK$FW7KHRU\ RI-/$XVWLQDQG-RKQ6HDUOH,QKLVZRUNVRQ6SHHFK$FWV6HDUOHPDGH DVVXPHWKDWE\WKHWLPH/XNHZDVZULWLQJLIRQHKDGKHDUGWKH&KULVWLDQSURFODPDWLRQRI -HVXVRQHZRXOGDOVRKDYHKHDUGRIKLPDVț઄ȡȚȠȢ´,QFRQWH[W5RZHVHHPVWRQHHGWKLV DUJXPHQWWRKDYH-RKQWKH%DSWLVWDVVXPHWKHUROHRIWKHIRUHUXQQHURI-HVXVLQ/N±  6HH/&$$OH[DQGHU7KH3UHIDFHWR/XNH¶V*RVSHO/LWHUDU\&RQYHQWLRQDQG6RFLDO &RQWH[WLQ/XNH±DQG$FWV066176&DPEULGJH&DPEULGJH8QLYHUVLW\3UHVV  ±7KHSRLQWLVH[SOLFLWO\DFFHSWHGE\5RZH  ,QIDFWD/RUG³LQWKHZRPE´VRXQGVDOPRVWDVDQR[\PRURQDSDUDGR[DQRQUHVXU UHFWHGQRW\HWH[DOWHG/RUGVKLS   &I35LFRHXU6RLPrPHFRPPHXQDXWUH3RLQWV3DULV6HXLO &6FKODSNRKO ³,GHQWLWlW,,,'RJPDWLVFK´5** ±  2Q6SHHFK$FW7KHRU\DQG%LEOLFDO6WXGLHVVHHWKHUHOHYDQWVHFWLRQVLQ$&7KLVHOWRQ 7KH7ZR+RUL]RQV1HZ7HVWDPHQW+HUPHQHXWLFVDQG3KLORVRSKLFDO'HVFULSWLRQZLWK6SHFLDO 5HIHUHQFHWR+HLGHJJHU%XOWPDQQ*DGDPHUDQG:LWWJHQVWHLQ([HWHU3DWHUQRVWHU  LGHP1HZ+RUL]RQVLQ+HUPHQHXWLFV7KH7KHRU\DQG3UDFWLFHRI7UDQVIRUPLQJ%LEOLFDO 5HDGLQJ*UDQG5DSLGV=RQGHUYDQ 56%ULJJV:RUGVLQ$FWLRQ6SHHFK$FW7KHRU\



&KDSWHU-HVXV0DGH%RWK/RUGDQG&KULVW

D YHU\ KHOSIXO GLVWLQFWLRQ EHWZHHQ WKH LOORFXWLRQDU\ IRUFH RI DQ XWWHUDQFH )  DQG LWV SURSRVLWLRQDO FRQWHQW  S  V\PEROL]HG LQ WKH IRUPXOD ) S  'HSHQGLQJRQWKHFRQWH[WWKHSURSRVLWLRQDOFRQWHQWRIDQXWWHUDQFHPD\EH WDNHQDVVWURQJHU RUZHDNHU ,IZHWDNH³-HVXVLVț઄ȡȚȠȢ´DVSLWVIRUFH )  GHSHQGV RQ WKH FRQWH[W DQG DFFRUGLQJO\ YDULHV LQ GHJUHH ,I WKH SRVW (DVWHU SURFODPDWLRQ RI -HVXV DV WKH ([DOWHG 2QH LV WDNHQ DV WKH SULPDU\ VWURQJHU  FRQWH[W RI XQGHUVWDQGLQJ   )  WKH LOORFXWLRQDU\ IRUFH RI WKH VWDWHPHQWLVPXFKVWURQJHUWKDQZKHQLWLVUHDGLQDSUHUHVXUUHFWLRQDOFRQ WH[W ) :KHQ/XNHDSSOLHVHDUO\&KULVWLDQț઄ȡȚȠȢODQJXDJHWRWKHSUH (DVWHUPLQLVWU\RI-HVXVWKHLOORFXWLRQDU\IRUFHFKDQJHVDFFRUGLQJO\KHQFH )S )S ,WLVDKHUPHQHXWLFDODQGLQWHUSUHWDWLYHPLVWDNHWRWDNHDOO WKH ț઄ȡȚȠȢ WH[WV LQ /XNH DQG $FWV LQGLVFULPLQDWHO\ DQG VXJJHVW WKDW ERWK SUHUHVXUUHFWLRQDODQGSRVWUHVXUUHFWLRQDOVWDWHPHQWVDERXW-HVXV¶LGHQWLW\ DV /RUG KDYH WKH VDPH LOORFXWLRQDU\ IRUFH 1R WKLV LV FOHDUO\ D PDWWHU RI FRQWH[W /HWPHUHVWDWHDOOWKLVIURPDQRWKHUDQJOHDJDLQWKLVWLPHQRWIURPWKDW RI SKLORVRSKLFDO OLQJXLVWLFV DQG 6SHHFK $FW 7KHRU\ EXW IURP WKDW RI OLWHU DU\ WKHRU\ DQG QDUUDWLYH FULWLFLVP ,Q QDUUDWLYHFULWLFDO WHUPV WKH /XNDQ /RUG-HVXVLVDURXQGFKDUDFWHUUDWKHUWKDQDVWRFNRUÀDW FKDUDFWHU$ÀDW FKDUDFWHU LV XVXDOO\ D PLQRU ¿JXUH LQ WKH VWRU\ D FKDUDFWHU WKDW UHPDLQV XQFKDQJHGE\WKHGHYHORSLQJQDUUDWLYHSORWW\SLFDOO\DSHUVRQWKDWLVVXS SRUWLYHRIWKHRWKHUFKDUDFWHUV$URXQGFKDUDFWHURQWKHRWKHUKDQGLVD FKDUDFWHU ZKR GHYHORSV LV VRPHZKDW FRPSOH[ DQG ³WKUHHGLPHQVLRQDO´ 7KLV DV UHFHQW OLWHUDU\ FULWLFV RI WKH 1HZ 7HVWDPHQW KDYH DUJXHG DSSOLHV YHU\ZHOOWRWKH-HVXV¿JXUHLQWKH6\QRSWLFJRVSHOV,QDFHUWDLQZD\WKHQ DQG%LEOLFDO,QWHUSUHWDWLRQ7RZDUGD+HUPHQHXWLFRI6HOI,QYROYHPHQW(GLQEXUJK1HZ ਥȞ੒ȡ੺ȝĮIJȚ@੖ȡĮȝĮįȚ੹>IJોȢ@ȞȣțIJઁȢIJ૶ ȆĮ઄Ȝ૳੭ijșȘİੇʌİȞਥȞȞȣțIJ੿įੁ੒ȡ੺ȝĮIJȠȢIJ૶ȆĮ઄Ȝ૳ DQGੑʌIJĮı઀ĮȚ ³YLVLRQVFHOHVWLDOVLJKWV´IJૌȠ੝ȡĮȞ઀૳ੑʌIJĮı઀઺ UHFHLYHGLQDVWDWHRI ਩țıIJĮıȚȢ$FWVਥȖ੼ȞİIJȠਥʌૃĮ੝IJઁȞ਩țıIJĮıȚȢFIİੇįȠȞਥȞਥțıIJ੺ıİȚ ੖ȡĮȝĮ RIWHQGXULQJWKHQLJKW ,IWKHIRUW\GD\VRILQVWUXFWLRQVKDYHDOHJLWLPL]LQJIXQFWLRQ3DXO¶VSRVL WLRQLVVXUHO\H[FHSWLRQDOLIQRWSUREOHPDWLF3DXO¶VTXHVWLRQ³$P,QRWDQ DSRVWOH"+DYH,QRWVHHQ-HVXVRXU/RUG"´&RU ±IURPKLVSHUVSHF WLYH DQ XQPLVWDNDEOH UKHWRULFDO TXHVWLRQ ³2I FRXUVH , DP DQ DSRVWOH 2I FRXUVH,KDYHVHHQWKH/RUG´±UHFHLYHVDOHVVVWUDLJKWIRUZDUGDQVZHUIURP $FWV7KDW3DXOKDGKDGVRPHVRUWRIDQHQFRXQWHUZLWKWKHULVHQ/RUGRQ WKH URDG WR 'DPDVFXV ZLWK IDUUHDFKLQJ FRQVHTXHQFHV LV HPSKDWLFDOO\ DI ¿UPHGE\/XNHE\WHOOLQJWKLVVWRU\QROHVVWKDQWKUHHWLPHV$FWV± ±± %XW/XNHLVHTXDOO\DGDPDQWLQSXWWLQJ3DXOLQSODFH E\VSHOOLQJRXWWKHGLIIHUHQWQDWXUHRIWKDWHQFRXQWHUDVTXLWHGLVWLQFWIURP WKHRULJLQDODSSHDUDQFHV7KHZD\KHGHVFULEHVWKHDSSHDUDQFHPDNHVRQH WKLQNRIMXVW DYLVLRQDU\H[SHULHQFHRUHYHQDOLJKWYLVLRQ ±WKH/XNDQ  ௘6R-$)LW]P\HU7KH*RVSHORI/XNH,±,;$1HZ7UDQVODWLRQZLWK,QWURGXFWLRQDQG &RPPHQWDU\$QF%*DUGHQ&LW\'RXEOHGD\ LGHP³7KH$VFHQVLRQRI&KULVW DQG3HQWHFRVW´76 ³7RPDNHWKLVSRLQWDELWFOHDUHUZHPD\DVNZKDWGLI IHUHQFHWKHUHZDVEHWZHHQWKHDSSHDUDQFHRIWKHULVHQ&KULVW³WR&HSKDVWRWKH7ZHOYH´ HWF&RU± DQGKLVDSSHDUDQFHWR3DXORQWKHURDGWR'DPDVFXV*DOFI $FWV ± ± ±  $V IDU DV , FDQ VHH WKH RQO\ GLIIHUHQFH ZDV WHPSRUDO LQ 3DXO¶VFDVHLWZDVSRVWSHQWHFRVWDOZKHUHDVIRUWKHRWKHUVLWZDVSUHSHQWHFRVWDO%XWLQHLWKHU FDVHLWVµVSDWLDO¶WHUPLQXVDTXRZDVWKHVDPH´,QWHUHVWLQJO\WKHSDVVDJHLVDEVHQWLQWKH UHYLVHGHGLWLRQRI3URIHVVRU)LW]P\HU¶VFROOHFWHGHVVD\VLQLGHP7R$GYDQFHWKH*RVSHO 1HZ7HVWDPHQW6WXGLHV%56*UDQG5DSLGV(HUGPDQV/LYRQLD0LFK'RYH%RRNVHOOHUV     ௘:0LFKDHOLV³੒ȡ੺Ȧ´7K:17 ±  ௘&I-3/RXZ($1LGDHGV *UHHN(QJOLVK/H[LFRQRIWKH1HZ7HVWDPHQW%DVHG RQ6HPDQWLF'RPDLQV1HZHV@NHLQHQDQGHUHQOHJLWLPHQ=XJDQJ]X&KULVWXV XQG VHLQHU 2IIHQEDUXQJ DOV EHU GLH 8UDSRVWHO 3DXOXV ZLUG LKQHQ NRQVH TXHQW ]XJHRUGQHW´ )RU /XNH¶V LPSOLHG DXGLHQFH WKH -HUXVDOHP DSRVWOHV DUHWKHDXWKHQWLFDQGOHJLWLPDWHFXVWRGLDQVRIWKHIDLWK6HHQLQWKLVOLJKW LWLVOLNHO\WKDW/XNH¶VSUHVHQWDWLRQRI3DXOVWULNHVDSROHPLFDOQRWHLQKLV GHIHQFH LW ZDV QRW 3DXO ZKR LQYHQWHG WKH &KULVWLDQ SURFODPDWLRQ RU WKH *HQWLOH PLVVLRQ QRU ZDV KH WR EH UHJDUGHG DV DQ LQQRYDWRU $FWV   /XNH UHDVVXUHV KLV UHDGHUVKLS WKDW WKH &KULVWLDQ NHU\JPD DV LW ZDV SUR FODLPHGE\3DXOZHQWEDFNWRDQGKDGWKHIXOOVXSSRUWRIWKH-HUXVDOHPFRP PXQLW\ZKHUHLWDOOEHJDQ3DXO¿JXUHVLQ$FWVQRWRQO\DVDQRXWVWDQGLQJ ODZNHHSLQJ-HZEXWDVDQRXWVWDQGLQJ&KULVWLDQDQGPLVVLRQDU\SUHDFKHU RI XQEOHPLVKHG UHSXWDWLRQ ZKRVH PHVVDJH RI XQLYHUVDO VDOYDWLRQ GHVHUYHV WKHKLJKHVWSRVVLEOHFUHGLWDQGIXOODFFHSWDQFH ,Q/XNH¶VVRFLDOFRQWH[WWKHOHJLWLPDF\RIWKH3DXOLQHPLVVLRQZDVDSSDU HQWO\DQLVVXH,IWKHUHDGHUVRI$FWVDFFHSWWKHDXWKRULWDWLYHQDWXUHRIWKH SRVWUHVXUUHFWLRQLQVWUXFWLRQVWRWKH7ZHOYHWKHSURFODPDWLRQRIWKHNLQJ GRPRI*RGGXULQJWKHIRUW\GD\VPD\ZHOOWXUQRXWWREHD7URMDQKRUVH GHVLJQHGWRSUHSDUHWKHPIRUDFFHSWLQJWKH3DXOLQHJRVSHO$IWHUDOOGXULQJ WKLVSHULRG-HVXVWDXJKWKLVGLVFLSOHVIJ੹ʌİȡ੿IJોȢȕĮıȚȜİ઀ĮȢIJȠ૨șİȠ૨$FWV  DQGSUHSDUHGIRUZKDWWKH&KXUFKHVSHFLDOO\3DXOZRXOGSUHDFKDIWHU ZDUGV7KDWWKH/XNDQ3DXO¶VSURFODPDWLRQLQ5RPHZDVDSURFODPDWLRQRI WKHVDPHȕĮıȚȜİ઀ĮIJȠ૨șİȠ૨$FWV VXJJHVWVWKDW/XNHZDQWVKLVUHDG HUVWRXQGHUVWDQGWKDWWKHFRQWHQWRI3DXO¶VSUHDFKLQJLVPDWHULDOO\LGHQWLFDO ZLWKWKHULVHQ/RUG¶VLQVWUXFWLRQVRIWKHDSRVWOHV,QRWKHUZRUGVDOUHDG\LQ ௘0 +RUQVFKXK ³'LH $SRVWHO DOV 7UlJHU GHU hEHUOLHIHUXQJ´ LQ ( +HQQHFNH : 6FKQHHPHOFKHUHGV 1HXWHVWDPHQWOLFKH$SRNU\SKHQLQGHXWVFKHUhEHUVHW]XQJ7ELQJHQ 0RKU 6LHEHFN   ± TXRWDWLRQ QR ORQJHU LQ VXEVHTXHQW HGLWLRQV  &I HDUOLHU 6FKQHFNHQEXUJHU =ZHFN  ³:DV HU   /XNH  PLW 3DXOXV XQG EHU 3DXOXV VDJHQ ZROO WH GDV NRQQWH QXU JHOLQJHQ ZHQQ HU DQ GLH 8UJHPHLQGH DQ GLH IUKHVWHQ =XVWlQGH GHV &KULVWHQWKXPV DQ GLH KHLOLJH *HEXUWVVWlWWH GHU .LUFKH DQ GLH JHIHLHUWHQ SDOlVWLQLVFKHQ $SRVWHODQNQSIWH´  6R-7&DUUROO³/LWHUDU\DQG6RFLDO'LPHQVLRQVRI/XNH¶V$SRORJ\IRU3DXO´LQ'- /XOOHG 7KH6RFLHW\RI%LEOLFDO/LWHUDWXUH6HPLQDU3DSHUV6%/63$WODQWD*D 6FKRODUV3UHVV ±  7KLVVHHPVWRPHWREHDVDIHDVVXPSWLRQJLYHQWKHIDFWWKDWERWKEHIRUHDQGDIWHUWKH FRPSRVLWLRQRI$FWVHYHQLQWKHEURDGHVWSRVVLEOHGDWLQJUDQJH DQWL3DXOVHQWLPHQWVZHUH SUHVHQW  $FWV 

&RQFOXVLRQV



WKH3DXOLQHJRVSHOLVXQGHUVWRRGDVEHLQJSDUWRIWKHSURFODPDWLRQRIWKH NLQJGRP,QWKHHQG/XNH¶VQDUUDWLYHWDFWLFWRGRPHVWLFDWH3DXODQGVXE RUGLQDWHKLPWRWKHFLUFOHRIWKH7ZHOYHHIIHFWLYHO\OHGWRIXOOEORZQVXSSRUW RI3DXODQGKLVPLVVLRQ

 ௘7 KLV LV LQ OLQH ZLWK WKH REVHUYDWLRQ RI OLWHUDU\ FULWLF 1 )U\H 7KH *UHDW &RGH 7KH %LEOHDQG/LWHUDWXUH1HZ