Cultural Ways of Worldmaking: Media and Narratives 9783110227567, 9783110227550, 9783110486032

Table of contents :
Frontmatter
Table of Contents
Ways of Worldmaking as a Model for the Studyof Culture: Theoretical Frameworks, Epistemological Underpinnings, New Horizons
I. Theoretical Approaches to Ways of Worldmaking
`I Believe That the World'
Three Theories of Literary Worldmaking: Phenomenological (Roman Ingarden), Constructivist (Nelson Godman), Cognitive Psychologist (Schank and Abelson)
Worldmaking as Fate
The Politics of Symbolic Forms
II. Media as Ways of Worldmaking
Media as Ways of Worldmaking: Media-specific Structures and Intermedial Dynamics
Remarks on the Historicity of the Media Concept
Do Media Determine Our Situation? Friedrich Kittler's Application of Information Theory to the Humanities
Irreducible Vagueness: Augmented Worldmaking in Diller & Scofidio's Blur Building
Worlds Made of Concrete and Celluloid: The London Council Estate in Nil By Mouth and Wonderland
III. Narratives as Ways of Worldmaking
Making Events – Making Stories – Making Worlds: Ways of Worldmaking from a Narratological Point of View
The Making of Fictional Worlds: Processes, Features, and Functions
Literary Worldmaking
Writing Lives and `Worlds': English Fictional Biography at the Turn of the 21st Century
Fictional Narratives and Their Ways of Spiritual Worldmaking: (De-)Constructing the Realm of Transcendence in City of God by Way of Metafiction and Multiperspectivity
Narrating Life: Early Modern Accounts of the Life of Queen Christina of Sweden (1626–1689)
Seeing a World Unmade, and Making a World (Out) of Remains: The Post-Apocalyptic Re-Visions of W. S. Merwin and Carolyn Forché
Backmatter

Citation preview

&XOWXUDO:D\VRI:RUOGPDNLQJ

Concepts for the Study of Culture Edited by Doris Bachmann-Medick · Horst Carl · Wolfgang Hallet Ansgar Nünning Editorial Board Mieke Bal · Hartmut Böhme · Sebastian Conrad · Vita Fortunati · Isabel Gil Lawrence Grossberg · Richard Grusin · Hans Ulrich Gumbrecht Ursula Heise · Claus Leggewie · Helmut Lethen · Christina Lutter Andreas Reckwitz · Frederik Tygstrup · Barbie Zelizer

1

De Gruyter

Cultural Ways of Worldmaking Media and Narratives

Edited by Vera Nünning · Ansgar Nünning · Birgit Neumann in collaboration with Mirjam Horn

De Gruyter

ISBN 978-3-11-022755-0 e-ISBN 978-3-11-022756-7 ISSN 2190-3433 Library of Congress Cataloging-in-Publication Data Cultural ways of worldmaking : media and narratives / edited by Vera Nünning, Ansgar Nünning and Birgit Neumann ; in collaboration with Mirjam Horn. p. cm. -- (Concepts for the study of culture ; 1) ISBN 978-3-11-022755-0 (alk. paper) 1. Mass media and culture. 2. Language and culture. 3. Culture in literature. 4. Discourse analysis, Narrative. 5. Creation (Literary, artistic, etc.) I. Nünning, Vera, 1961- II. Nünning, Ansgar. III. Neumann, Birgit. P94.6.C795 2010 302.23--dc22 2010016943

Bibliografische Information der Deutschen Nationalbibliothek Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.d-nb.de abrufbar.

© 2010 Walter de Gruyter GmbH & Co. KG, Berlin/New York Gesamtherstellung: Hubert & Co. GmbH & Co. KG, Göttingen

∞ Gedruckt auf säurefreiem Papier Printed in Germany www.degruyter.com

3UHIDFHDQG$FNQRZOHGJHPHQWV



7DNLQJ DV LWV SRLQW RI GHSDUWXUH 1HOVRQ *RRGPDQ·V WKHRU\ RI V\PERO V\VWHPV DV GHOLQHDWHG LQ KLV VHPLQDO ERRN :D\V RI :RUOGPDNLQJ WKLV YROXPH JDXJHV WKH SRVVLELOLWLHV DQG SHUVSHFWLYHV WKDW WKH ZRUOGPDNLQJ DSSURDFKRIIHUVDVDPRGHOIRUWKHVWXG\RIFXOWXUH,WVPDLQREMHFWLYHVDUH WR H[SORUH WKH XVHIXOQHVV DQG UDQJH RI WKH DSSURDFK XVKHUHG LQ E\ *RRGPDQ IRU WKH VWXG\ RI FXOWXUH DQG WR VXSSOHPHQW *RRGPDQ·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´:D\V RI :RUOGPDNLQJ 1DUUDWLYHV $UFKLYHV DQG 0HGLDµ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

VI

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PPHOEHLQ.DWKDULQD6FKZHUWIHJHUDQG$QQD:HLJHOIRUWKHLU DGGLWLRQDOVXSSRUWLQFKHFNLQJELEOLRJUDSKLFDOUHIHUHQFHVDQGIRUPDWWLQJ &RRSHUDWLQJZLWKWKHZRQGHUIXOWHDPDWGH*UX\WHUHVSHFLDOO\'U+HLNR +DUWPDQQDQGKLVVXFFHVVRU'U0DQXHOD*HUORIKDVEHHQDQGLVDJUHDW SOHDVXUH 7KDQNV WR WKHLU JUHDW GHGLFDWLRQ LQWHUHVW LQ WKH SURMHFWV DQG WKRXJKWIXOUHVSRQVHVLWLVDSULYLOHJHDVZHOODVSOHDVXUHIRUDQ\VFKRODUWR SXEOLVKZLWKZKDWLVDQH[HPSODU\DFDGHPLFSUHVV   *LHVVHQ+HLGHOEHUJ$SULO $QVJDU1QQLQJDQG9HUD1QQLQJ

7DEOHRI &RQWHQWV $16*$51h11,1*DQG9(5$1h11,1*:D\VRI :RUOGPDNLQJDVD0RGHOIRUWKH6WXG\RI&XOWXUH7KHRUHWLFDO )UDPHZRUNV(SLVWHPRORJLFDO8QGHUSLQQLQJV1HZ+RUL]RQV . . . . . . . . .  

,7+(25(7,&$/$3352$&+(672:$@DUHWKHRU\ODGHQWKH\DUHWKHRU\ODGHQDVZHKRSHRXUWKHRULHVDUHIDFW ODGHQ2ULQRWKHUZRUGVIDFWVDUHVPDOOWKHRULHVDQGWUXHWKHRULHVDUHELJIDFWV



$QVJDU1QQLQJDQG9HUD1QQLQJ

7KLVGRHVQRWPHDQ,PXVWUHSHDWWKDWULJKWYHUVLRQVFDQEHDUULYHGDWFDVXDOO\ RUWKDWZRUOGVDUHEXLOWIURPVFUDWFK:HVWDUWRQDQ\RFFDVLRQZLWKVRPHROG YHUVLRQRUZRUOGWKDWZHKDYHRQKDQGDQGWKDWZHDUHVWXFNZLWKXQWLOZHKDYH WKH GHWHUPLQDWLRQ DQG VNLOO WR UHPDNH LW LQWR D QHZ RQH 6RPH RI WKH IHOW VWXE ERUQQHVVRIIDFWLVWKHJULSRIKDELWRXUILUPIRXQGDWLRQLVLQGHHGVWROLG:RUOG PDNLQJEHJLQVZLWKRQHYHUVLRQDQGHQGVZLWKDQRWKHU:D\V² 

/LNHODWHUSURSRQHQWVRIUDGLFDOFRQVWUXFWLYLVP*RRGPDQFRQFHSWXDOLVHV ¶ZRUOGV· RU ZRUOGYHUVLRQV DV D KXPDQ FRQWULYDQFH DV KHXULVWLF DQG DE VWUDFW PRGHOV FRQVWUXFWHG E\ WKH SKLORVRSKHU RUGLQDU\ KXPDQ EHLQJ RU WKHRULVW IRU XQGHUVWDQGLQJ FXOWXUDO RU KLVWRULFDO SKHQRPHQD ,Q RWKHU ZRUGVWKHUHLVQRVXFKWKLQJDVDJLYHQZRUOG³WKHRQO\WKLQJZHFDQHYHU KDYHDFFHVVWRDUHFXOWXUDOO\VKDSHGZRUOGPRGHOVRUYHUVLRQV7LPHDQG DJDLQ *RRGPDQ UHPLQGV KLV UHDGHUV WKDW ZH ´FDQQRW WHVW D YHUVLRQ E\ FRPSDULQJ LW ZLWK D ZRUOG XQGHVFULEHG XQGHSLFWHG XQSHUFHLYHGµ :D\V  WKDW´WUXWKFDQQRWEHGHILQHGRUWHVWHGE\DJUHHPHQWZLWK¶WKHZRUOG·µ  DQG´WKDWWUXWKPXVWEHRWKHUZLVHFRQFHLYHGWKDQDVFRUUHVSRQGHQFH ZLWK D UHDG\PDGH ZRUOGµ   +LODU\ 3XWQDP WRR HPSKDVLVHV ´WKDW WKHUHLVQRVXFKWKLQJDVFRPSDULQJDQ\YHUVLRQZLWKDQ¶XQFRQFHSWXDOLVHG UHDOLW\·>@$OOZHKDYHLVFRPSDULVRQRIYHUVLRQVZLWKYHUVLRQVµ3XWQDP   ,WLVEHFDXVHRIWKLV¶PDQPDGH·FKDUDFWHURIZRUOGYHUVLRQVDQGRIWKH LQDFFHVVLELOLW\RIDQ¶XQFRQFHSWXDOLVHGUHDOLW\·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´7KHIDXOWVRIWUXWKDUHPDQ\DQGJUDYHµ*RRGPDQDQG (OJLQREVHUYH &RQVWUXHG DV FRUUHVSRQGHQFH EHWZHHQ GLVFRXUVH DQG WKH UHDG\PDGH ZRUOG EH \RQGGLVFRXUVHLWUXQVLQWRGRXEOHWURXEOHWKHUHLVQRVXFKZRUOGLQGHSHQGHQW RI GHVFULSWLRQ DQG FRUUHVSRQGHQFH EHWZHHQ GHVFULSWLRQ DQG WKH XQGHVFULEHG LV LQFRPSUHKHQVLEOH 

7KHUHIRUH *RRGPDQ WXUQV WKH UHDGHU·V DWWHQWLRQ WR WKH IUDPHV RI UHIHU HQFHHPSKDVLVLQJWKDWWKHODWWHU´EHORQJOHVVWRZKDWLVGHVFULEHGWKDQWR V\VWHPVRIGHVFULSWLRQµ:D\V )RU*RRGPDQ¶WUXWK·LVDOZD\VUHODWLYH WR VXFKIUDPHV RI UHIHUHQFH V\VWHPV RI GHVFULSWLRQ DQG WR YHUVLRQV ´VR

,QWURGXFWLRQ



WUXWKVFDQFRQIOLFWE\EHORQJLQJWRFRQIOLFWLQJULJKWYHUVLRQVµ8OOLDQ  ¶7UXWK· LV WKHUHIRUH QRW DEVROXWH EXWUHODWLYH LQ WKDW ´·WUXH· PDUNVVRPH WUDLW RI REVHUYDWLRQVHQWHQFHVµ   ,Q *RRGPDQ·V FRQVWUXFWLYLVW IUDPH ZRUN WUXWK OLNH NQRZOHGJH DQG FHUWDLQW\ ´PXVW IRUHYHU EH H[FOXGHG DV DEVROXWHHUURUµDV0LWFKHOO ULJKWO\REVHUYHV 7KHLQIRUPLQJSULQFLSOHRIDFRQVWUXFWLYLVWYLHZRIWKHZRUOG WKHUH IRUHLVWKH´VXEVWLWXWLRQRIWKHFRQFHSWRIILWDQGLWVG\QDPLFFRUROODU\ ¶YLDELOLW\· IRUWKHWUDGLWLRQDOFRQFHSWRI¶WUXWK·DVDPDWFKLQJLVRPRUSKLF RULFRQLFUHSUHVHQWDWLRQRI¶UHDOLW\·µ*ODVHUVIHOG´,QWHUSUHWDWLRQµ ,Q WKHODVWFKDSWHURI:D\VRI:RUOGPDNLQJWHOOLQJO\HQWLWOHG´2Q5LJKWQHVVRI 5HQGHULQJµ *RRGPDQ GLVFXVVHV WKH TXHVWLRQ RI ZKDW ´VWDQGDUGV RI ULJKWQHVVµ FDQ EH DSSOLHG ZKHQ RQH FRPSDUHV FRPSHWLQJ YHUVLRQV RU ´:RUOGVLQ&RQIOLFWµ:D\V² +HGLVFXVVHVDQXPEHURIVXFKVWDQ GDUGVDQGFULWHULDWKDWFDQEHDGGXFHG,QWKHFDVHRIWKHRULHVDQGPRGHOV WKHVHLQFOXGHHJ´WKHFRJHQF\DQGFRPSDFWQHVVDQGFRPSUHKHQVLYHQHVV WKH LQIRUPDWLYHQHVV DQG RUJDQL]LQJ SRZHU RI WKH ZKROH V\VWHPµ   2WKHUFULWHULDWKDWPLJKWEHFRQVLGHUHGDV¶VWDQGDUGVRIULJKWQHVV·RU\DUG VWLFNVWKDWDOORZXVWRFRPSDUHFRQIOLFWLQJYHUVLRQVDUHXWLOLW\FUHGLELOLW\ SUREDELOLW\ FRKHUHQFH GHGXFWLYH DQG LQGXFWLYH YDOLGLW\ LH FRQIRUPLW\ ZLWKUXOHVRILQIHUHQFHRUZLWKSULQFLSOHVWKDWFRGLI\SUDFWLFHUHVSHFWLYHO\ ULJKWQHVVRIFDWHJRULVDWLRQVHH:D\V² DQGODVWEXWFHUWDLQO\QRW OHDVW ´HIILFDF\ LQ ZRUOGPDNLQJ DQG XQGHUVWDQGLQJµ   )ROORZLQJ *RRGPDQPRVWFRQVWUXFWLYLVWVZRXOGDJUHHWKDWLWLVLPSRUWDQWWRGLVWLQ JXLVK EHWZHHQ EHWWHU DQG OHVV JRRG ZRUOG YHUVLRQV ´¶EHWWHU· QRW LQ WKH VHQVHRIREMHFWLYHO\WUXHUDFULWHULRQGLVFUHGLWHGE\WKHFRQVWUXFWLYLVWDS SURDFK EXWLQWHUPVRIVXFKFULWHULDDVULJKWQHVVRIILWYDOLGLW\RILQIHU HQFH LQWHUQDO FRQVLVWHQF\ DSSURSULDWHQHVV RI VFRSH DQG DERYH DOO SURGXFWLYLW\µ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¶REMHFWLYHO\· UHSUHVHQW UHDO HYHQWV RU FXOWXUDO FKDQJHV NQRZOHGJHUDWKHUSHUWDLQVWRPHWKRGRORJLFDOPHDQVKLVWRULDQVDQGFXOWXUDO WKHRULVWVKDYHHYROYHGLQRUGHUWRVHOHFWLQWHUSUHWDQGRUJDQLVHUHOHYDQW



$QVJDU1QQLQJDQG9HUD1QQLQJ

GDWD RQ WKH EDVLV RI WKHLU VRXUFHV DQG WKHLU FRQFHSWXDO DQG GLVFXUVLYH WRROV7KHUHDOHYHQWVRIWKHSDVWDQGWKHIDFWVRIKLVWRU\DUHVHSDUDWHGE\ DQ XQEULGJHDEOH JXOI ZKLFK KLVWRULRJUDSK\ DV WKH ZRUG LWVHOI LPSOLHV XQVXFFHVVIXOO\ WULHV WR RYHUFRPH WKURXJK QDUUDWLYH VHH :KLWH ´7KH 9DOXHµ7KH&RQWHQWRIWKH)RUP $FRQVWUXFWLYLVWFRQFHSWXDOLVDWLRQRIKLV WRULRJUDSK\UHDOLW\DQGZRUOGPDNLQJXQHTXLYRFDOO\HPSKDVLVHVWKDWIDFWV KLVWRU\ DQG WKH ZRUOGV  DUH ZR PDQPDGH DQG WKDW RXU FRQFHSWV DQG WKHRULHV WRR DUH IDEULFDWHG 7KLV DOUHDG\VHUYHV WRVKRZ WKDW WKH ZRUOG PDNLQJDSSURDFKLVLQGHHGDJOREDOSURMHFWWKRXJKLWLVDUJXDEO\RISDU WLFXODUUHOHYDQFHIRUDQXPEHURIGRPDLQV 'RPDLQVDQG)XQFWLRQVRI:RUOGPDNLQJ 6HOI0DNLQJ&RPPXQLW\0DNLQJ/LWHUDU\:RUOGPDNLQJ 7KHVH FRQVWUXFWLYLVW QRWLRQV ZKLFK SURYLGH WKH HSLVWHPRORJLFDO XQGHU SLQQLQJVRI*RRGPDQ·VWKHRULHVSHUWDLQWRDZLGHUDQJHRIGLIIHUHQWGR PDLQV RI ZRUOGPDNLQJ 7KH\ UDQJH DOO WKH ZD\ IURP 0DNLQJ 6HOYHV WR ERUURZWKHVXEWLWOHRIDVHPLQDOERRNE\3DXO-RKQ(DNLQWRZRUOGPDN LQJDWODUJH$VZHZLOOWU\WRVKRZEHORZWKHTXHVWLRQRIZD\VRIZRUOG PDNLQJ LV SDUWLFXODUO\ LPSRUWDQW LQ WKH FDVH RI QDUUDWLYH ILFWLRQ RWKHU OLWHUDU\ JHQUHV DQG RWKHU DUWLVWLF PHGLD LQ WKDW WKH\ IXQFWLRQ DV ZRUOG EXLOGLQJ LQVWLWXWLRQV SURMHFWLQJ DOWHUQDWLYHV WR WKH ZRUOG PRGHOV WKDW ZH JHQHUDOO\ UHJDUG DV ¶UHDOLW\· ,Q DGGLWLRQ WKH\ RIWHQ VHOIUHIOH[LYHO\ IRUH JURXQG DQG H[SORUH PDQ\ RI WKH HSLVWHPRORJLFDO TXHVWLRQV LQYROYHG LQ ZRUOGPDNLQJ 1DUUDWLYHVLQJHQHUDODUHQRWRQO\RQHRIWKHPRVWSRZHUIXOZD\VRI ZRUOGPDNLQJ EXW DOVR RI ¶VHOIPDNLQJ· 7KH PDLQ UHDVRQ IRU WKLV LV WKDW VWRU\WHOOLQJ FDQ JHQHUDWH UHDO DQG SRVVLEOH ZRUOGV QDUUDWLYHV DOVR H[HUW SHUIRUPDWLYHSRZHULHWKH\GRQRWPHUHO\UHSUHVHQWOLIHEXWWKH\FRQVWL WXWH DQG LQGHHG ¶IRUP· OLIH /LIH LWVHOI OLNH UHDOLW\ LV SUHWW\ DPRUSKRXV FKDRWLFDQGFRQWLQJHQW:KHQLWLVWXUQHGLQWRDVWRU\KRZHYHULWLVJLYHQ IRUPVWUXFWXUHDQGPHDQLQJ7KRXJKPRVWSHRSOHZRXOGSUREDEO\DJUHH WKDW QDUUDWLYHV DUH RI IXQGDPHQWDO LPSRUWDQFH IRU WKH ZD\V LQ ZKLFK ZH PDNHVHQVHRIRXUH[SHULHQFHVDQGRIRXUOLYHVDWODUJHWKHZRUOGPDNLQJ FDSDFLW\RIVWRULHVDQGVWRU\WHOOLQJKDVQRWUHFHLYHGWKHGHJUHHRIDWWHQWLRQ WKDWLWDUJXDEO\GHVHUYHVVHH+HUPDQ´1DUUDWLYH:D\Vµ ,QKLVSLRQHHU LQJDFFRXQWRIWKHFUHDWLRQRIDQDXWRELRJUDSKLFDOVHOIIHOLFLWRXVO\HQWLWOHG +RZ2XU/LYHV%HFRPH6WRULHV0DNLQJ6HOYHV3DXO-RKQ(DNLQKDVVKRZQWKDW QDUUDWLYHV DUH DW ZRUN LQ SURFHVVHV OLNH LGHQWLW\ IRUPDWLRQ RUGHULQJ H[ SHULHQFHVUHPHPEHULQJDQGQHJRWLDWLQJYDOXHV

,QWURGXFWLRQ



+RZHYHUDOWKRXJKZHIUHTXHQWO\VSHDNRI¶VHOIQDUUDWLYHV·¶OLIHQDUUD WLYHV· ¶VWRULHG VHOYHV· ¶QDUUDWLYH VHOIPDNLQJ· RU HYHQ ¶QDUUDWLQJ WKH VHOI LQWR H[LVWHQFH· WKH UHODWLRQ EHWZHHQ WKH LQGLYLGXDO·V H[SHULHQFH OLIH RU LGHQWLW\DQGLWVUHSUHVHQWDWLRQLQQDUUDWLYHLPSOLHGE\WKHVHSKUDVHVLVIDU IURPVHOIHYLGHQW/LIHRIFRXUVHLVQRWDPHUHQDUUDWLYHDQGSHRSOHH[LVW UHJDUGOHVVRIZKHWKHUWKH\WHOOWKHLUVWRU\VHH(DNLQ 1RQHWKHOHVVDV QDUUDWLYHSV\FKRORJLVWVKDYHGHPRQVWUDWHGQDUUDWLYHDQGLGHQWLW\VHHPWR EHVRFORVHO\LQWHUWZLQHGWKDWWKH\FRQVWDQWO\IHHGLQWRDQGPXWXDOO\FRQ VWLWXWHHDFKRWKHU,QGHHGWKHYHU\SRVVLELOLW\RILGHQWLW\LVLQWLPDWHO\WLHG WRWKHQRWLRQRIQDUUDWLYHDQGQDUUDWLYLW\³QRWRQO\DVGHVFULSWLYHRIWKH VHOI EXW PRUH LPSRUWDQWO\ DV IXQGDPHQWDO WR WKH FRQVWLWXWLRQ RU FRQ VWUXFWLRQ RI WKH VXEMHFW IRU D GHWDLOHG DFFRXQW VHH 1HXPDQQ DQG 1QQLQJ  :H QRW RQO\ ´RUJDQL]H RXU H[SHULHQFH DQG RXU PHPRU\ RI KXPDQ KDSSHQLQJV PDLQO\ LQ WKH IRUP RI QDUUDWLYHµ %UXQHU ´1DUUDWLYH &RQVWUXFWLRQµ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´IDLUO\ HDVLO\ UHFRJQL]DEOH OLWHUDU\ JHQUHVµ %UXQHU ´6HOI 0DNLQJµ   *HQUHV MXVW OLNH PHWDSKRUV IXOILO DQ LPSRUWDQW ´IRUPLQJ IXQFWLRQµ LQWKDWWKH\VKDSHWKHSURFHVVRIFRQVWUXFWLQJVHOYHV7KH VWRULHVZHWHOOZKHQZHPDNHRXUVHOYHVDUHREYLRXVO\UHODWHGWRWKHHYHQWV RIRXUOLYHVEXWWKH\´PXVWDOVRILWWKHUHTXLUHPHQWVRIQDUUDWLYHDVDIRUP RI RUJDQL]LQJ H[SHULHQFHµ   *HQUH FRQYHQWLRQV WKXV H[HUW D IRUPLQJ LQIOXHQFH RQ OLIH VWRULHV ZKLFK DUH HPEHGGHG LQ WKH FXOWXUDOO\ DYDLODEOH SORWVDQGYDOXHVRIWKHUHVSHFWLYHVRFLHW\6HUYLQJDVUHSRVLWRULHVRIQDUUD WLYH PRGHOV DQG VFKHPDWDJHQUHV SURYLGH D IRXQGDWLRQ IRU RXUVHQVH RI LGHQWLW\ ZKLOH DW WKH VDPH WLPH PDNLQJ XV PHPEHUV RI WKH FRPPXQLW\ WKDWJHQHUDWHGWKHFXOWXUDOPRGHOVLQWKHILUVWSODFH 1DUUDWLYHVQRWRQO\VHUYHDVWKHPRVWLPSRUWDQWPHDQVRIVHOIPDNLQJ EXWWKH\DOVRFRQWULEXWHWRZKDWPD\EHFDOOHG¶FRPPXQLW\PDNLQJ·ZLWK



$QVJDU1QQLQJDQG9HUD1QQLQJ

JHQUHVVHUYLQJDVRQHRIWKHLQWHUIDFHVEHWZHHQWKHPDNLQJRIVHOYHVDQG WKHPDNLQJRIFRPPXQLWLHV7KHPDLQUHDVRQIRUWKLVLVWKDWWKHQDUUDWLYHV RI RXU OLYHV XVXDOO\ GUDZ RQ WKH KLVWRULFDOO\ DQG FXOWXUDOO\ WUDQVPLWWHG UHSHUWRLUHRUDUFKLYHRIVWRULHVDQGSORWVZKLFKVHUYHDVLGHDOLVHGPRGHOV IRU WKH HODERUDWLRQ RI RXU RZQ H[SHULHQFHV +LQFKPDQ DQG +LQFKPDQ KDYHSRLQWHGRXWWKDWWKH´VWRULHVWKDWLQGLYLGXDOVFUHDWHRIWHQVWULNHYDULD WLRQVXSRQDUHSHUWRLUHRIVRFLDOO\DYDLODEOHQDUUDWLYHVWKDWLQWXUQOHJLWL PLVHWKHFRPPXQLW\DQGJXDUDQWHHLWVFRQWLQXHGH[LVWHQFHµ[YLL  $QRWKHULPSRUWDQWIXQFWLRQRIQDUUDWLYHVDQGPHGLDLVWKHUHIRUHWKHLU SRWHQWLDO WR JHQHUDWH RU IRUJH FRPPXQLWLHV $V %UXQHU REVHUYHV ´RQH LPSRUWDQW ZD\ RI FKDUDFWHUL]LQJ D FXOWXUH LV E\ WKH QDUUDWLYH PRGHOV LW PDNHV DYDLODEOH IRU GHVFULELQJ WKH FRXUVH RI D OLIHµ ´/LIH DV 1DUUDWLYHµ   1DUUDWLYHV VHUYH WR PDNH DQG UHLQIRUFH FRPPXQLWLHV DQG DUJXDEO\ FXOWXUHVFDQLQWXUQEHGHVFULEHGDV¶FRPPXQLWLHVRIVWRULHV·RU¶QDUUDWLYH FRPPXQLWLHV·LQWKDWWKH\DUHFKDUDFWHULVHGE\DUHSHUWRLUHRIVWRULHVFXO WXUDOO\DYDLODEOHSORWVDQG´FXOWXUDOO\FDQRQLFDODFFRXQWVµ%UXQHU´6HOI 0DNLQJµ´6HOI0DNLQJµSDVVLP  :LWKRXWGRXEWLWLVQDUUDWLYHVWKDWIRUPWKHEDVLVRIFROOHFWLYHQDWLRQDOPHPRULHV DQGWKDWFRQVWLWXWHSROLWLFVRILGHQWLW\DQGGLIIHUHQFH&XOWXUHVVKRXOGDOZD\VDOVR EH FRQFHLYHG RI DV QDUUDWLYH FRPPXQLWLHV ZKLFK DUH GLVWLQJXLVKHG IURP HDFK RWKHUE\WKHLUUHVHUYRLURIQDUUDWLYHV0OOHU)XQNRXUWUDQVODWLRQ 

1DUUDWLYH JHQUHV LQ SDUWLFXODU DUH FHQWUDO WR WKH IRUPDWLRQ RI FROOHFWLYH LGHQWLWLHVDQG¶LPDJLQHGFRPPXQLWLHV·VHQVX$QGHUVRQIRUWKHVLPSOHUHD VRQWKDWQRWRQO\DQDWLRQEXW´DQ\LPDJLQHGFRPPXQLW\LVKHOGWRJHWKHU LQ SDUW E\ WKH VWRULHV LW JHQHUDWHV DERXW LWVHOIµ $UDWD   0HGLD LQ WXUQ VHUYHWRUHLQIRUFHWKHVHQDUUDWLYHFRPPXQLWLHVE\GLVVHPLQDWLQJFXOWXUDOO\ SUHYDOHQWVWRULHVDQGSORWVDVZHOODVWKHYDOXHVDQGQRUPVWKHODWWHUVHUYH WRUHLQIRUFHDQGLQFXOFDWH 7KRXJK*RRGPDQ·VDSSURDFKLVVRZLGHUDQJLQJWKDWLWOHQGVLWVHOIWR LQYHVWLJDWLQJWKHZRUOGPDNLQJSUDFWLFHVRIMXVWDERXWDQ\RIWKHV\VWHPV WKDWRQHILQGVLQDIXQFWLRQDOO\GLIIHUHQWLDWHGVRFLHW\LHWKHGRPDLQVRI SROLWLFVWKHHFRQRP\DQGODZDVZHOODVWKHDUWVWKHKXPDQLWLHVDQGWKH VFLHQFHV  LW LV DUJXDEO\ SDUWLFXODUO\ LPSRUWDQW IRU ZKDW PD\ IRU FRQYHQ LHQFHVDNHEHFDOOHG¶OLWHUDU\ZRUOGPDNLQJ·DQGWKXVIRUWKHVWXG\RIOLWHUD WXUH DQG FXOWXUH IRU DW OHDVW WZR UHDVRQV ILUVW DV 6- 6FKPLGW DOUHDG\ SRLQWHGRXUWZHQW\ILYH\HDUVDJROLWHUDWXUHLV´WKHRQO\SODFHZKHUHWKH FRQVWUXFWLRQRIZRUOGPRGHOVDVVXFKEHFRPHVWKHPDWLFDQGZKHUHWKLV WKHPDWLVDWLRQ FDQ EHDU XSRQ DOO SRVLWLRQV IURP RUWKRPRGHOV WR UHPRWH IDQWDV\ZRUOGVµ6FKPLGW´7KH)LFWLRQ,Vµ 7KHVDPHKROGVWUXHIRU RWKHU DUW IRUPV DQG PHGLD ZKLFK DOVR VHOIFRQVFLRXVO\ H[SORUH ZD\V RI ZRUOGPDNLQJZKLOHDOVRHQKDQFLQJRXUUHDGLQHVVWRLPDJLQHDQGUHFRJQLVH

,QWURGXFWLRQ



DOWHUQDWLYHZRUOGPRGHOVRUZRUOGYHUVLRQVVHH+HUQDUGL´:K\,V/LWHUD WXUH"µ  6RPH OLWHUDU\ JHQUHV LQ SDUWLFXODU HJ VFLHQFHILFWLRQ DQG UHYLVLRQLVW KLVWRULFDOQRYHOVDUHZRUOGEXLOGLQJJHQUHVLQWKDWWKH\SURMHFWDOWHUQDWLYHV WRWKHZRUOGPRGHOVWKDWZHNQRZDV¶UHDOLW\·DQGWKDWWKH\FRQGXFW´H[ WHQGHG HODERUDWH WKRXJKW H[SHULPHQWVµ (OJLQ ´/DERUDWRU\µ   ´$ WKRXJKWH[SHULPHQWLVDQLPDJLQDWLYHH[HUFLVHGHVLJQHGWRGHWHUPLQHZKDW ZRXOG KDSSHQ LI FHUWDLQ FRQGLWLRQV ZHUH PHWµ   ,Q GRLQJ VR VXFK OLWHUDU\ JHQUHV RIWHQ UHFLUFXODWH UHF\FOH DQG UHFRQILJXUH ZRUOGPRGHOV DOUHDG\RQKDQGWKXVLOOXVWUDWLQJ*RRGPDQ·VFODLPWKDWZRUOGPDNLQJ´LVD UHPDNLQJµ:D\V 0RUHRYHUWKRXJKWKHLUSURGXFWLRQDQGSURMHFWLRQRI QHZ DOWHUQDWLYH ZRUOGPRGHOV WKH\ RIWHQ IRUHJURXQG DQG IODXQW WKHLU ZRUOGPDNLQJSUDFWLFHVEULQJLQJWKHSURFHVVHVRIZRUOGPDNLQJWKHPVHOYHV WRWKHIRUHVHH0F+DOH´6FLHQFH)LFWLRQµ  7KHVHFRQGUHDVRQZK\WKHZRUOGPDNLQJDSSURDFKLVSDUWLFXODUO\UHOH YDQWIRUWKHVWXG\RIOLWHUDWXUHDQGFXOWXUHKDVWRGRZLWKWKHIDFWWKDWWKH ¶REMHFWV·WKDWOLWHUDU\DQGFXOWXUDOVWXGLHVLQYHVWLJDWHDUHQRWPHUHO\JLYHQ RU IRXQG LQ WKH UHDO ZRUOG EXW DUH WKHPVHOYHV FRQVWUXFWHG $FDGHPLF GLVFLSOLQHV WKHPVHOYHV FDQ EH FRQFHLYHG RI DV SDUWLFXODU ZD\V RI ZRUOG PDNLQJDVDFWLYLWLHVWKDWFRQVWUXFWWKHSKHQRPHQDWKH\PRUHRIWHQWKDQ QRWSXUSRUWPHUHO\WRLQYHVWLJDWH,QKLVVHPLQDOERRN&RQVWUXFWLQJ3RVWPRG HUQLVP%ULDQ 0F+DOH PDNHV DQ REVHUYDWLRQ WKDW LVRI FUXFLDO LPSRUWDQFH IRUDQ\RQHLQWHUHVWHGLQFRPLQJWRWHUPVZLWKWKHSOXUDOLW\RIZRUOGVDQG PRGHVRIZRUOGPDNLQJ´,IOLWHUDU\KLVWRULFDO¶REMHFWV·>@DUHFRQVWUXFWHG QRWJLYHQRUIRXQGWKHQWKHLVVXHRIKRZVXFKREMHFWVDUHFRQVWUXFWHGLQ SDUWLFXODU WKH JHQUH RI GLVFRXUVH LQ ZKLFK WKH\ DUH FRQVWUXFWHG EHFRPHV FUXFLDOµ0F+DOH&RQVWUXFWLQJ 7KLVREVHUYDWLRQKROGVQRWRQO\WUXHIRU VXFKOLWHUDU\KLVWRULFDO¶REMHFWV·DVJHQUHVSHULRGVRUDUWLVWLFPRYHPHQWV EXWDOVRIRUDQ\FXOWXUDOSKHQRPHQRQZHFKRRVHWRLQYHVWLJDWHDVVFKRODUV ZRUNLQJLQOLWHUDU\DQGFXOWXUDOVWXGLHV ,QVXPPHGLDQDUUDWLYHVDQGRWKHUZD\VRIZRUOGPDNLQJDUHLPSRU WDQW ´FRJQLWLYH WRROV LQVWUXPHQWV RI XQGHUVWDQGLQJµ *RRGPDQ ´2Q &DSWXULQJµ²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



$QVJDU1QQLQJDQG9HUD1QQLQJ

7KH LQWHUUHODWLRQVKLS EHWZHHQ VHOIPDNLQJ DQG ZRUOGPDNLQJ RQ WKH RQH KDQG DQG QDUUDWLYHV JHQUHV DQG PHGLD RQ WKH RWKHU DJDLQ XQGHU VFRUHV WKH SRLQW PDGH DERYH YL] WKDW ZD\V RI ZRUOGPDNLQJ GR QRW MXVW VKDSHFXOWXUHVDQGZRUOGVEXWWKDWWKH\DUHDOVRVKDSHGE\WKHPLQWKDW WKH\ LQHYLWDEO\ XVH WKH UHVSHFWLYH FXOWXUH·V WKHRULHV FRQFHSWV JHQUHV VFKHPDWD DQG VWRULHV WR PDNH VHOYHV FRPPXQLWLHV DQG ZRUOGV 6LQFH ´DXWRELRJUDSK\OLNHWKHQRYHO LQYROYHVQRWRQO\WKHFRQVWUXFWLRQRIVHOI EXWDOVRDFRQVWUXFWLRQRIRQH·VFXOWXUHµ%UXQHU´6HOI0DNLQJµ WKH VWXG\ RI JHQUHV OLNH DXWRELRJUDSKLHV ELRJUDSKLHV DQG PDQ\ RWKHUV FDQ DIIRUGYDOXDEOHLQVLJKWVLQWRWKHFXOWXUHIURPZKLFKWKH\RULJLQDWH-XVWDV WKH´UHTXLUHPHQWVRIDJHQUHOLQNHGQDUUDWLYHµ DVDIRUPRIRUJDQLVLQJ H[SHULHQFHLPSLQJHXSRQWKHVWRULHVSHRSOHWHOODERXWWKHLUOLYHVVRGRWKH FRQYHQWLRQVRISDUWLFXODUZD\VRIZRUOGPDNLQJVKDSHWKHZRUOGVWKDWDUH SURMHFWHGE\WKHPHGLD 3DUWLFXODU PHGLD JHQUHV QDUUDWLYHV DQG RWKHU ZD\V RI ZRUOGPDNLQJ DUH DV PXFK DQ ´H[SUHVVLRQ RI WKH FXOWXUHµ   DV WKH\ DUH D PHDQV RI VKDSLQJWKHUHVSHFWLYHFXOWXUHVDQGPDNLQJWKHZRUOGVWKDWZHOLYHLQ,W LV WKH PHGLD JHQUHVWKHLU FRQYHQWLRQV DQG IRUPDWV WKDW GHWHUPLQH ZKDW ZHUHJDUGDVQHZVZRUWK\RULQWHUHVWZRUWK\DQGWKDWSURYLGHWKHIRUPV RIRUJDQLVLQJHJ¶WKHQHZV·RUWKH¶PHGLDHYHQWV·VHH'D\DQDQG.DW]  ZKLFKZHVKRXOGQHYHUWDNHIRUJUDQWHGDV¶JLYHQV·RUWDNHWREH¶QDWXUDO· OHW DORQH PLVWDNH IRU D PHUH FRS\ RU QHXWUDO PLPHWLF UHSUHVHQWDWLRQ RI HYHQWV RU RI UHDOLW\ %HLQJ LQH[WULFDEO\ LQWHUWZLQHG ZLWK WKH FXOWXUHV LQ ZKLFK WKH\ DUH HPEHGGHG LQYHVWLJDWLRQV RI WKH PXOWLSOH ZD\V RI ZRUOG PDNLQJ WKDW ZH HQFRXQWHU LQ RXU FRQWHPSRUDU\ PHGLD FXOWXUH DUJXDEO\ SURYLGH D SDUDGLJP DSSURDFK IRU WKH VWXG\ RI FXOWXUH DV ZH ZLOO WU\ WR VKRZLQWKHILQDOVHFWLRQ 1HZ+RUL]RQV:D\VRI:RUOGPDNLQJDVD 3DUDGLJPIRUWKH6WXG\RI&XOWXUH 1HOVRQ*RRGPDQ·VWKHRU\RIV\PEROVDQGWKHFRQVWUXFWLYLVWDSSURDFKWR ZD\VRIZRUOGPDNLQJKHDQGKLVIROORZHUVXVKHUHGLQKDYHRSHQHGXSQHZ KRUL]RQVDQGIHUWLOHDYHQXHVRIUHVHDUFKIRUWKHVWXG\RIFXOWXUHLQPDQ\ ZD\V 7KH QRWLRQ RI ZD\V RI ZRUOGPDNLQJ DV EULHIO\ GHOLQHDWHG DERYH RIIHUV D KLJKO\ IOH[LEOH DQG SURGXFWLYH IUDPHZRUN WKDW FDQ IUXLWIXOO\ EH DGRSWHG H[SDQGHG DQG VXSSOHPHQWHG IRU WKH VWXG\ RI FXOWXUH *RRG PDQ·VDPELWLRXVWKHRU\FDQDUJXDEO\HYHQVHUYHDVDSDUDGLJPPRGHOIRU WKH VWXG\ RI FXOWXUH LQ WKDW LW LV QRW RQO\ JHUPDQH WR KLV RZQ PDLQ UH VHDUFK GRPDLQ EXW LV DOVR UHOHYDQW WR DQXPEHU RI LPSRUWDQW UHFHQW DS SURDFKHV WR WKH VWXG\ RI FXOWXUH VXFK DV WKRVH RXWOLQHG DERYH ´1HOVRQ

,QWURGXFWLRQ



*RRGPDQ·V FRQVWUXFWLYLVP DUPV RQH ZHOO WR DSSUHFLDWH WKH FRPSOH[LWLHV RIVHOIDQGOLIHPDNLQJµ%UXQHU´6HOI0DNLQJµ REVHUYHV,QWKHVDPH YHLQRQHPLJKWDGGWKDWLWDOVRDUPVRQHZHOOWRH[SORUHWKHFRPSOH[LWLHV RIZRUOGPDNLQJWKDWDUHLQYROYHGLQWKHZLGHDUUD\RIV\PEROV\VWHPVDQG VRFLDOSUDFWLFHVWKDWDUHGXEEHG¶FXOWXUH· )LUVW RI DOO *RRGPDQ·V DUGHQW GHIHQFH RI SOXUDOLVP VHH *RRGPDQ :D\V ²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´7KHPRYHPHQWLVIURPXQLTXHWUXWKDQG DZRUOGIL[HGDQGIRXQGWRDGLYHUVLW\RIULJKWDQGHYHQFRQIOLFWLQJYHU VLRQV RU ZRUOGV LQ WKH PDNLQJµ *RRGPDQ :D\V [  6LQFH WKH VWXG\ RI FXOWXUHLVFRQFHUQHGZLWKVXFKLVVXHVDVGLIIHUHQWSRVVLEOHZD\VRIUHSRUW LQJHYHQWVLQWKHPHGLDFRQIOLFWLQJYHUVLRQVRIWKHSDVWLQFRQWHPSRUDU\ PHPRULDO FXOWXUHV DQG WKH SHUIRUPDWLYH SRZHU RI QDUUDWLYHV DQG RWKHU V\PERO V\VWHPV WKH FRQVWUXFWLYLVW DQG SOXUDOLVW FKDUDFWHU RI *RRGPDQ·V ZRUOGPDNLQJDSSURDFKLVYHU\PXFKJHUPDQHWRLW$QDQDO\VLVRIFRPSR VLWLRQ DQG GHFRPSRVLWLRQ GHOHWLRQ DQG VXSSOHPHQWDWLRQ GHIRUPDWLRQ RUGHULQJZHLJKWLQJVHH*RRGPDQ:D\V² DQGRWKHUIRUPDOGHYLFHV IRUPDNLQJZRUOGVFDQDOOVKHGORWVRIOLJKWRQERWKWKHTXHVWLRQRIZKDW JRHV LQWR PDNLQJ WKH FXOWXUDO ZRUOGV WKDW ZH OLYH LQ DQG WKH LGHRORJLFDO LPSOLFDWLRQV DQG IXQFWLRQV WKDW SDUWLFXODU ZD\V RI ZRUOGPDNLQJ VHUYH WR IXOILO$FNQRZOHGJLQJWKDW´ZRUOGVWKHPVHOYHVPD\EHEXLOWLQPDQ\ZD\Vµ :D\V   *RRGPDQ HQFRXUDJHV XV WR H[SORUH KRZ GLIIHUHQW ZD\V RI ZRUOGPDNLQJ LPSRVH VWUXFWXUHV DVFULEH SURSHUWLHV DQG GLVVHPLQDWH SDU WLFXODUYHUVLRQVYLHZVDQGYDOXHVWKDWVKRXOGQHYHUEHWDNHQIRUJUDQWHG EXWUDWKHUDQDO\VHGDQGFULWLTXHGIRUZKDWWKH\DUHFRQIOLFWLQJYHUVLRQVRI UHDOLW\UDWKHUWKDQ¶WKHUHDOLW\·VHH6WHYHQ&RQQRU·VDUWLFOHLQWKLVYROXPH  6HFRQG ZKLOH WKH WZR RWKHU XQLYHUVDO VFLHQFHV VWUXFWXUDOLVP DQG VHPLRWLFVKDYHXVHGODQJXDJHDVWKHLUEDVLFPRGHO*RRGPDQ·VWKHRULHVRI V\PERO V\VWHPV KDYH WKH DGGHG YDOXH IRU WKH VWXG\ RI FXOWXUH WKDW WKH\ SHUWDLQHTXDOO\ZHOOWRQRQYHUEDODQGSHUIRUPDWLYHZD\VRIZRUOGPDNLQJ VHH 0LWFKHOO   :KDW *RRGPDQ·V WKHRULHV UHIOHFW LV´WKH FRQFHUQ RI D SKLORVRSKLFDOWKHRU\RIUHSUHVHQWDWLRQµUDWKHUWKDQWKDW´RIDOLQJXLVWLFDOO\ EDVHG VHPLRORJ\µ &XOOHU   $ TXRWDWLRQ IURP :D\V RI :RUOGPDNLQJ PLJKWVHUYHWRVKRZMXVWKRZZLGHUDQJLQJ*RRGPDQ·VDSSURDFKDFWXDOO\ LV ´:RUOGV DUH PDGH E\ PDNLQJ VXFK YHUVLRQV ZLWK ZRUGV QXPHUDOV



$QVJDU1QQLQJDQG9HUD1QQLQJ

SLFWXUHV VRXQGV RU RWKHU V\PEROV RI DQ\ NLQG LQ DQ\ PHGLXP DQG WKH FRPSDUDWLYH VWXG\ RI WKHVH YHUVLRQV DQG YLVLRQV DQG RI WKHLU PDNLQJ LV ZKDW , FDOO D FULWLTXH RI ZRUOGPDNLQJµ   7KH IDFW WKDW KLV DSSURDFK GRHV QRW IRFXV RQ ODQJXDJH RU YHUEDO ZRUOGPDNLQJ DORQH EXW LV HTXDOO\ DSSOLFDEOHWR´SLFWXUHVVRXQGVRURWKHUV\PEROVRIDQ\NLQGLQDQ\PH GLXPµ PDNHV LW SDUWLFXODUO\ XVHIXO IRU VWXG\LQJ LQWHUPHGLDO PXOWLPRGDO DQG SHUIRUPDWLYHPDLQIHVWDWLRQV RI FRQWHPSRUDU\ PHGLD FXOWXUH ,QVWHDG RIFRQFHLYLQJRI¶FXOWXUHDVWH[W·*RRGPDQ·VDSSURDFKDOORZVWKHVWXG\RI FXOWXUHWRLQFOXGHWKHZLGHDUUD\RIVLJQLI\LQJV\VWHPVDQGSUDFWLFHVWKDW FRQIURQWXVLQWKHGRPDLQZHGHVLJQDWHDV¶FXOWXUH· 7KLUGO\ *RRGPDQ·V DSSURDFK KDV WKH JUHDW DGYDQWDJH RI RIIHULQJ D ´QHXWUDOFRPSDUDWLYHVWXG\µ*RRGPDQDQG(OJLQ RIDZLGHUDQJHRI V\PERO V\VWHPV 7KRXJK LW PD\ EH RSHQ WR GHEDWH MXVW KRZ QHXWUDO DQ\ WKHRU\FDQHYHUEHKLVIRUPDOWKHRU\RIV\PEROV\VWHPVPDNHVQRLGHR ORJLFDO RU QRUPDWLYH VWLSXODWLRQV IRFXVVLQJ LQVWHDG RQ WKH ZD\V V\PEROV DUH RUJDQLVHG DQG XVHG 0RUHRYHU LW SURYLGHV D IOH[LEOH IUDPHZRUN IRU FRPSDUDWLYHLQTXLU\WKDWLVSRWHQWLDOO\DSSOLFDEOHWRDEURDGUDQJHRIFXO WXUDO DFWLYLWLHV SURFHVVHV DQG SURGXFWV D ´IUDPHZRUN IRU WKH VWXG\ RI KRZZRUOGVDUHFRQVWUXFWHGERWKLQDQGRXWVLGHRISKLORVRSK\DQGRWKHU DUWV DQG VFLHQFHVµ +HUQDUGL ´*XHVW (GLWRULDOµ   *RRGPDQ·V GHWDLOHG DQDO\VLVRIWKHV\PEROV\VWHPVRI´WKHYDULRXVDUWIRUPVDFFRUGLQJWRWKHLU V\PEROLFIHDWXUHV DIIRUGV WKH SRVVLELOLW\ RI JUHDWHU GLVFULPLQDWLRQ DPRQJ WKH DUW IRUPV RI SDLQWLQJ PXVLF OLWHUDWXUH GDQFH DUFKLWHFWXUH DQG WKH RWKHUDUWVµ&DUWHU 7KRXJKLWLVFHUWDLQO\WUXHWKDW´WKHV\PEROV\V WHPV ZH GHYLVH DUH DSW WR GLIIHU JUHDWO\ LQVWUXFWXUH DQG UHSUHVHQWDWLRQDO UHVRXUFHVµ(OJLQ´6LJQµ ERWKWKHTXHVWLRQVUDLVHGE\*RRGPDQDQG WKHDSSURDFKKHGHYHORSHGIRUILQGLQJDQVZHUVWRWKHPZRUNHTXDOO\ZHOO IRUDZLGHDUUD\RIFXOWXUDOZD\VRIZRUOGPDNLQJLQFOXGLQJOLWHUDU\JHQUHV DQGPHGLDSHUIRUPDWLYHDUWVDQGULWXDOVDQGFXOWXUDOLQVWLWXWLRQVOLNHPX VHXPVRUDUFKLYHV $IRXUWKUHDVRQZK\WKHZD\VRIZRUOGPDNLQJDSSURDFKFRXOGVHUYH DVDPRGHOIRUWKHVWXG\RIFXOWXUHLVWKXVLWVEURDGVFRSHZKLFKRSHQVXS DZLGHUDQJHRISRVVLEOHDSSOLFDWLRQVWRGLYHUVHILHOGVRILQTXLU\7KRXJK *RRGPDQKDVEHHQWDNHQWRWDVNIRUZKDWFULWLFVKDYHFDOOHGWKH´WRWDOL] LQJDPELWLRQµ0LWFKHOO WKDWLVDOUHDG\KLJKOLJKWHGLQWKHYHU\WHUPVRI WKHWLWOHRIKLVERRN:D\VRI:RUOGPDNLQJWKHIDFWWKDW´WKHOLPLWHGDWWHPSW WRSURGXFHDFRPSDUDWLYHWKHRU\RIV\PEROVKDVEHFRPHDJOREDOSURMHFWµ LELG  HQKDQFHV WKH UDQJH DQG DSSOLFDELOLW\ RI KLV SURMHFW ,Q WKHLU DJDLQ WHOOLQJO\HQWLWOHGERRN5HFRQFHSWLRQVLQ3KLORVRSK\DQG2WKHU$UWVDQG6FLHQFHV 1HOVRQ *RRGPDQ DQG &DWKHULQH (OJLQ HPSKDVLVH WKH EURDG UDQJH RI GLVFLSOLQHVDQGSHUVSHFWLYHVWKDWWKHLUDSSURDFKHQFRPSDVVHV´:HZRUN IURPDSHUVSHFWLYHWKDWWDNHVLQWKHDUWVWKHVFLHQFHVSKLORVRSK\SHUFHS

,QWURGXFWLRQ



WLRQ DQG RXU HYHU\GD\ ZRUOGV DQG WRZDUG EHWWHU XQGHUVWDQGLQJ RI HDFK WKURXJK VLJQLILFDQW FRPSDULVRQ ZLWK WKH RWKHUVµ *RRGPDQ DQG (OJLQ  ,QVWHDGRISLWWLQJWKHDUWVWKHKXPDQLWLHVDQGWKHVFLHQFHVDJDLQVW HDFKRWKHUVXFKDQDSSURDFKSURYLGHVDXVHIXOIUDPHZRUNIRUFRPSDUD WLYHO\H[SORULQJVLPLODULWLHVDQGGLIIHUHQFHVZLWKUHJDUGWRWKHLUUHVSHFWLYH IRUPVRIZRUOGPDNLQJZKLFKDOZD\VVHUYHDVFRJQLWLYHWRROV´8QGHUO\LQJ WKLV DSSURDFK LV *RRGPDQ·V EHOLHI LQ WKH FRJQLWLYH QDWXUH RI DUW ZKLFK LQYLWHVFRQVLGHUDWLRQRIWKHDUWVDVSDUWQHUVZLWKWKHVFLHQFHVLQWKHSXUVXLW RI XQGHUVWDQGLQJµ &DUWHU   )RU DQ\RQH LQWHUHVWHG LQ WKH VWXG\ RI FXOWXUHWKLVQRWRQO\KDVDQREYLRXVDSSHDOEXWDOVRVHUYHVDXVHIXOIXQF WLRQ LQ WKDW LW DOHUWV XV WR WKH XELTXLW\ RI V\PERO V\VWHPV DQG WKHLU SHU IRUPDWLYH SRZHU LQ JHQHUDWLQJ ZRUOGV 6LQFH ´WKH XVH³WKDW LV WKH IDEULFDWLRQ DSSOLFDWLRQ DQG LQWHUSUHWDWLRQ³RI V\PEROV LV FHQWUDOO\ LQ YROYHGLQDOOWKHVHILHOGVµ*RRGPDQDQG(OJLQ DJHQHUDOWKHRU\RI V\PEROVDQGWKHLUIXQFWLRQVKDVWKHDGGHGYDOXHRISURYLGLQJDFRPPRQ IUDPHRIUHIHUHQFHZKLOHDWWKHVDPHWLPHVHUYLQJDVDURXJK\DUGVWLFNIRU H[SORULQJ FRPPRQDOLWLHV DQG GLIIHUHQFHV EHWZHHQ WKH UHVSHFWLYH PRGHV DQGZD\VRIZRUOGPDNLQJLQYROYHGLQWKHVHGLIIHUHQWGRPDLQV $ ILIWK UHDVRQ IRU WKH SDUDGLJPDWLF TXDOLW\ RI *RRGPDQ·V DSSURDFK IRUWKHVWXG\RIFXOWXUHLVWKDWLWVKLIWVDWWHQWLRQIURP¶FXOWXUH·RU¶FXOWXUDO REMHFWV·DVVXPHGWRH[LVWUHDG\WREHH[DPLQHGWRWKHOHYHORIWKHFRQ FHSWVWKDWZHGHSOR\WRFRQVWUXFWWKHREMHFWVRILQTXLU\LQWKHILUVWSODFH ,I ZH FDQQRW KDYH DFFHVV WR DQ ¶XQFRQFHSWXDOLVHG UHDOLW\·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·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



$QVJDU1QQLQJDQG9HUD1QQLQJ

LWV FUHDWLRQ DQG WUDQVPLVVLRQ LW LV LPSHUDWLYH WR H[WHQG WKH FRQFHSWV RI FXOWXUDO NQRZOHGJH DQG ZD\V RI ZRUOGPDNLQJ WR LQFOXGH FXOWXUHV RI UH VHDUFKDQGHGXFDWLRQ:HVKRXOGWKXVOLNHWRHPSKDVLVHWKHYHU\SUDFWLFDO LPSRUWDQFH WKDW WKH LQVLJKWV LQWR FXOWXUDO ZD\V RI ZRUOGPDNLQJ VKRXOG KDYHIRUDQ\VFKRODUHVSHFLDOO\IRUWKRVHHQJDJHGLQWKHVWXG\RIFXOWXUH ,ILWLVLQGHHGWUXHWKDW´ZHFUHDWHDQGFRPSUHKHQGWKHZRUOGVZHOLYHLQµ *RRGPDQ ´5RXWHVµ   E\ FUHDWLQJ V\PERO V\VWHPV WKHQ ZH VKRXOG SD\PXFKPRUHDWWHQWLRQWRWKHFRQFHSWVPHWDSKRUVQDUUDWLYHVWKHRULHV DQG RWKHU ZD\V RI ZRUOGPDNLQJ WKDW ZH GHYLVH FDUHIXOO\ UHILQLQJ DQG UHFRQFHLYLQJ WKHP *RRGPDQ·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·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

,QWURGXFWLRQ



:KDWKDVDOVRUHFHLYHGFRPSDUDWLYHO\VFDQWDWWHQWLRQLVWKHSURPLQHQW UROH WKDW PHWDSKRUV SOD\ LQ WKH ZD\V LQ ZKLFK ZH FRQVWUXH RXU YDULRXV ZRUOGVERWKRXUHYHU\GD\ZRUOGDQGWKHZRUOGVDQG¶WUXWKV·WKDWWKHVFL HQFHV PDNH VHH %URZQ  0HWDSKRUV QRW RQO\ VHUYH WR VKDSH SUHYDLOLQJ YLHZVRIFXOWXUHDQGWKHRU\PHWDSKRUVDUHDOVRDWWKHVDPHWLPHVKDSHG E\ WKH FXOWXUHV DQG WKHRULHV IURP ZKLFK WKH\ RULJLQDWH VHH 1QQLQJ *UDEHVDQG%DXPEDFK 2QWKHRQHKDQGPHWDSKRUVSURMHFWVWUXFWXUHV RQWRFXOWXUDOSKHQRPHQDZKLFKGHI\GLUHFWREVHUYDWLRQVHUYLQJWRPDNH VHQVHRIWKHP7KH\WKXVSOD\DFHQWUDOUROHLQVKDSLQJERWKFXOWXUHDQG WKHRU\2QWKHRWKHUKDQGPHWDSKRUVDUHDOVRPRXOGHGE\ERWKHYHU\GD\ FXOWXUDO QRWLRQV DQG E\ WKHRULHV $V =ROWiQ .|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´FKDQJHVLQ RXU FRQFHSWXDO V\VWHP GR FKDQJH ZKDW LV UHDO IRU XV DQG DIIHFW KRZ ZH SHUFHLYHWKHZRUOGDQGDFWXSRQWKRVHSHUFHSWLRQVµ/DNRIIDQG-RKQVRQ ² 2IIHULQJZD\VRIRUJDQLVLQJFRPSOH[H[SHULHQFHVDQGKLVWRULFDO FKDQJHVLQWRVWUXFWXUHGZKROHVVHH/DNRIIDQG-RKQVRQ PHWDSKRULFDO FRQFHSWV OLNH HYROXWLRQ LPSURYHPHQW RU SURJUHVV QRW RQO\ ´SURYLGH FRKHUHQW VWUXFWXUH KLJKOLJKWLQJ VRPH WKLQJV DQG KLGLQJ RWKHUVµ   WKH\DUHDOVRFDSDEOHRIJLYLQJSHRSOHDQHZXQGHUVWDQGLQJRIWKHUHVSHF WLYHWDUJHWGRPDLQSOD\LQJ´DYHU\VLJQLILFDQWUROHLQGHWHUPLQLQJZKDWLV UHDOIRUXVµ  ,QVXP*RRGPDQ·VDSSURDFKQRWRQO\RSHQVXSDZLGHUDQJHRIQHZ DYHQXHVRIH[SORUDWLRQIRUWKHVWXG\RIFXOWXUHLWFRXOGDUJXDEO\HYHQEHD WKRXJKQRW¶WKH· PRGHOIRUWKHVWXG\RIFXOWXUHIRUWKHUHDVRQVRXWOLQHG DERYH,WDOHUWVXVWRWKHPXOWLSOLFLW\RIZRUOGVDQGWKHJUHDWGLYHUVLW\RI FRPSHWLQJYHUVLRQVWKDWZHDUHGDLO\FRQIURQWHGZLWKLQRXUFRQWHPSRUDU\ PHGLD VRFLHW\ ZKLOH DW WKH VDPH WLPH SURYLGLQJ XV ZLWK D VHW RI XVHIXO FRJQLWLYHDQGFRQFHSWXDOWRROVIRUFRPLQJWRWHUPVZLWKWKHLQVWUXPHQWV PRGHV DQG SURFHVVHV LQYROYHG LQ FXOWXUDO ZD\V RI ZRUOGPDNLQJ 0RUH RYHU ZKDW *RRGPDQ KDV FDOOHG ´D FULWLTXH RI ZRUOGPDNLQJµ :D\V   LH´WKHFRPSDUDWLYHVWXG\RIWKHVHYHUVLRQVDQGYLVLRQVDQGRIWKHLUPDN LQJµ LELG  FDQ IUXLWIXOO\ EH DPSOLILHG DQG H[SDQGHG E\ H[SORULQJ WKH LGHRORJLFDODQGSROLWLFDOLPSOLFDWLRQVDVZHOODVWKHIXQFWLRQVRIFXOWXUDO ZD\VRIZRUOGPDNLQJ



$QVJDU1QQLQJDQG9HUD1QQLQJ

:HVKRXOGOLNHWRFRQFOXGHE\REVHUYLQJWKDWZKLOHWKHSULQFLSOHVRI KXPDQZRUOGPDNLQJLGHQWLILHGDQGV\VWHPDWLVHGE\*RRGPDQFRQWLQXHWR SUHYDLO LQ PDQ\ DUHDV QHZ ZD\V RI ZRUOGPDNLQJ DSSHDU LQ HJ WKH QHZ PHGLD ZKLFK DOVR VXEWO\ FKDQJH ROGHU ZD\V RI PDNLQJ ZRUOGV 7KH EHVW ZD\WRFRPHWRWHUPVZLWKZKDW%UXQHUKDVFDOOHG´7KH1DUUDWLYH&RQ VWUXFWLRQ RI 5HDOLW\µ RU ZKDW IROORZLQJ *RRGPDQ ZH PLJKW FDOO WKH ¶V\PEROLF FRQVWUXFWLRQ RU PDNLQJ RI ZRUOGV· LV DUJXDEO\ WKURXJK DQ DQDO\VLVRIWKHZLGHUDQJHRIFRPELQDEOH\HWGLVWLQFWZD\VRIZRUOGPDNLQJ WKDW WKH DUWV DQG WKH PHGLD DV ZHOO DV WKH KXPDQLWLHV DQG WKH VFLHQFHV KDYH GHYHORSHG ,I WKH ¶REMHFWV· WKDW ZH H[SORUH ZKHQ ZH VWXG\ FXOWXUDO SKHQRPHQD DUH LQGHHG FRQVWUXFWHG QRW JLYHQ RU IRXQG WKHQ³WR TXRWH %ULDQ 0F+DOH RQFH PRUH³´WKH LVVXH RI KRZ VXFK REMHFWV DUH FRQ VWUXFWHG LQ SDUWLFXODU WKH JHQUH RI GLVFRXUVH LQ ZKLFK WKH\ DUH FRQ VWUXFWHG EHFRPHV FUXFLDOµ &RQVWUXFWLQJ   $QG LW LV WKURXJK D FDUHIXO H[DPLQDWLRQ RI WKH NH\ FRQFHSWV PHWDSKRUV QDUUDWLYHV DQG RWKHU V\P EROLFIRUPVWKDWZHFDQJDLQDQLQVLJKWLQWRWKHPHFKDQLVPVRIFRQVWUXF WLRQWKDWDUHLQYROYHGLQRXUFXOWXUDOZD\VRIZRUOGPDNLQJ7KDWDUJXDEO\ LVWKHPDLQUHDVRQZK\*RRGPDQ·VFRQVWUXFWLYLVWDSSURDFKLVVXFKDXVH IXOPRGHOIRUWKHVWXG\RIFXOWXUHWKRXJKKLVIOH[LEOHIUDPHZRUNFDQDOVR EHQHILWIURPVRPHDPSOLILFDWLRQVDSSOLFDWLRQVH[SDQVLRQVDQGUHFRQFHS WLRQVDVWKHFKDSWHUVWKDWIROORZDWWHPSWWRGHPRQVWUDWH

5HIHUHQFHV $QGHUVRQ%HQHGLFW,PDJLQHG&RPPXQLWLHV5HIOHFWLRQVRQWKH2ULJLQVDQG6SUHDGRI1DWLRQDO LVP/RQGRQ9HUVR $UDWD6WHSKHQ)LFWLRQVRI/RVVLQWKH9LFWRULDQ)LQGH6LqFOH&DPEULGJH&DPEULGJH83  %HUND6LJULG´$Q,QWHUQDWLRQDO%LEOLRJUDSK\RI:RUNVE\DQG6HOHFWHG:RUNVDERXW 1HOVRQ*RRGPDQµ-RXUQDORI$HVWKHWLF(GXFDWLRQ ² %ROWHU -D\ 'DYLG DQG 5LFKDUG *UXVLQ ´5HPHGLDWLRQµ &RQILJXUDWLRQV $ -RXUQDO RI /LWHUDWXUH6FLHQFHDQG7HFKQRORJ\ ² %URZQ7KHRGRUH/0DNLQJ7UXWK0HWDSKRULQ6FLHQFH8UEDQD&KLFDJR8RI,OOLQRLV 3 %UXQHU-HURPH$FWXDO0LQGV3RVVLEOH:RUOGV&DPEULGJH0$/RQGRQ+DUYDUG83  —´/LIHDV1DUUDWLYHµ6RFLDO5HVHDUFK ² —.´6HOI0DNLQJDQG:RUOG0DNLQJµ-RXUQDORI$HVWKHWLF(GXFDWLRQ ² —´7KH1DUUDWLYH&RQVWUXFWLRQRI5HDOLW\µ&ULWLFDO,QTXLU\ ² &DUWHU&XUWLV/´$7ULEXWHWR1HOVRQ*RRGPDQµ-RXUQDORI$HVWKHWLFVDQG$UW&ULWLFLVP  ² &XOOHU -RQDWKDQ 6WUXFWXUDOLVW 3RHWLFV 6WUXFWXUDOLVP /LQJXLVWLFV DQG WKH 6WXG\ RI /LWHUDWXUH /RQGRQ5RXWOHGJH .HJDQ3DXO

,QWURGXFWLRQ



'D\DQ 'DQLHO DQG (OLKX .DW] 0HGLD (YHQWV 7KH /LYH %URDGFDVWLQJ RI +LVWRU\ &DP EULGJH0$/RQGRQ+DUYDUG83 (DNLQ3DXO-RKQ+RZ2XU/LYHV%HFRPH6WRULHV0DNLQJ6HOYHV,WKDFD/RQGRQ&RUQHOO 83 (OJLQ &DWKHULQH = ´6LJQ 6\PERO DQG 6\VWHPµ -RXUQDO RI $HVWKHWLF (GXFDWLRQ   ² —´:KDW*RRGPDQ/HDYHV2XWµ-RXUQDORI$HVWKHWLF(GXFDWLRQ ² —.´7KH/DERUDWRU\RIWKH0LQGµ$6HQVHRIWKH:RUOG(VVD\VRQ)LFWLRQ1DUUDWLYHDQG .QRZOHGJH(G-RKQ*LEVRQHWDO1HZ«@)LQDOO\LWFRQWDLQVPRPHQWVWKDWFRQVWL WXWHWKHEDVLVRIIRXQGDWLRQRIGHWHUPLQDWHPRPHQWVRIDGLIIHUHQW¶VXE VHTXHQW· SKDVHµ   :KDW LV REMHFWLILHG LQ D OLWHUDU\ WH[W LV RQH FRXOG VD\ D G\QDPLF VWUXFWXUH RI VFKHPDWLVHG DVSHFWV DUUDQJHG LQ D RQH GLUHFWLRQDOVHTXHQFHRISUHVHQWDWLRQ 7KH´VWUXFWXUHRIWKHVHTXHQFHRISDUWVLQDZRUNµDQGWKH´WHPSRUDO SHUVSHFWLYHLQWKHFRQFUHWL]DWLRQRIWKHOLWHUDU\ZRUNRIDUWµDUHPLQXWHO\ LQYHVWLJDWHGLQ,QJDUGHQ·VFRPSOHPHQWWR7KH/LWHUDU\:RUNRI$UWZKLFK ZDVRULJLQDOO\SXEOLVKHGLQ3ROLVKLQUHYLVHGDQGSXEOLVKHGLQ*HU PDQ LQ  DV 9RP (UNHQQHQ GHV OLWHUDULVFKHQ .XQVWZHUNV DQG  LQ DQ (QJOLVKWUDQVODWLRQIURPWKH*HUPDQDV7KH&RJQLWLRQRIWKH/LWHUDU\:RUNRI $UW,WLVDJDLQDPD]LQJWRVHHWKDWPRVWRIWKHODWHU¶LQQRYDWLRQV·RIUHFHS WLRQWKHRU\ZHUHDOUHDG\TXLWHFOHDUO\DQGPLQXWHO\SUHVHQWHGE\,QJDUGHQ PXFKHDUOLHUIRULQVWDQFHZKHQZHUHDGWKDWLQWKHDFWRIUHDGLQJWKH SDUWRIWKHZRUNZHDUHQRZUHDGLQJLVWKXVFRQVWDQWO\VXUURXQGHGLQFRQFUHWL]D WLRQE\DGRXEOHKRUL]RQLIZHPD\XVH+XVVHUO·VH[SUHVVLRQKHUH D RIWKHSDUWV DOUHDG\UHDGZKLFKVLQNLQWRWKH¶SDVW·RIWKHZRUNDQGE RIWKRVHSDUWVZKLFK KDYHQRW\HWEHHQUHDGDQGZKLFKDUHXQNQRZQXSWRWKHSUHVHQWPRPHQW7KLV GRXEOH KRUL]RQ LV FRQVWDQWO\ SUHVHQW DV KRUL]RQ EXW LW LV DOZD\V EHLQJ ILOOHG E\ GLIIHUHQWSDUWVRIWKHZRUN7KH&RJQLWLRQRIWKH/LWHUDU\:RUNRI$UW² 

$QGZKDWLVPRVWLPSRUWDQWDERXWWKLVFRPSOH[LW\LVWKHIDFWWKDW DVZHVORZO\SURJUHVVIURPEHJLQQLQJWRWKHHQGRIWKHZRUNLQUHDGLQJZHDS SUHKHQGWKHFRQFUHWL]HGZRUNIURPDFRQVWDQWO\QHZWHPSRUDOSRLQWRIYLHZEXW DOZD\VXQGHUDWHPSRUDODVSHFWZKLFKFRUUHVSRQGVERWKWRWKHVWDQGSRLQWDQGDW WLWXGHDVVXPHGE\WKHUHDGHUDQGWRWKHSDUWRIWKHZRUNZHDUHSUHVHQWO\UHDGLQJ  

)RU WKLV UHDVRQ ´WKH ILUVW UHDGLQJ KDV WKH DGYDQWDJH RYHU DOO IROORZLQJ UHDGLQJV WKDW LW GHFLGHV LQ ODUJH PHDVXUH ZKHWKHU RQH ZLOO VXFFHHG LQ D

7KUHH7KHRULHVRI/LWHUDU\:RUOGPDNLQJ



FRUUHFWDSSUHKHQVLRQRIWKHZRUNDWDOOµ 7KH¶FRUUHFWQHVV·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

, ZRXOG HYHQ JR DV IDU DV VD\LQJ WKDW DV VRRQ DV ZH GR QRW VWLFN WR WKH VHTXHQFHGHWHUPLQHGE\WKHIRUPDWWLQJRIWKHWH[WZHUHDGZHEHJLQWR FUHDWHDGLIIHUHQWNLQGRIWHPSRUDOSHUVSHFWLYHWKDWEHORQJVWRDGLIIHUHQW  ZRUNDQGWKXVFKDQJHWKHSDUWLFXODUNLQGRIZRUOGPDNLQJ



4XLWHGLIIHUHQWIURP,QJDUGHQ·VGHWDLOHGDQDO\VLVRIWKHZRUOGPDNLQJWREH IRXQG LQ OLWHUDU\ ZRUNV RI DUW DQG LQWKH SURFHVV RIUHDGLQJ VXFK ZRUNV 1HOVRQ*RRGPDQLQKLVEULHIVWXG\:D\VRI:RUOGPDNLQJ RSHUDWHV RQDPXFKZLGHUVFDOHDQGDWWHPSWVWRILQGDQVZHUVWRPRUHJHQHUDOTXHV WLRQV VXFK DV ´,Q ZKDWVHQVH DUH WKHUH PDQ\ ZRUOGV":KDW GLVWLQJXLVKHV JHQXLQHIURPVSXULRXVZRUOGV":KDWDUHZRUOGVPDGHRI"+RZDUHWKH\ PDGH":KDWUROHGRV\PEROVSOD\LQWKHPDNLQJ"$QGKRZLVZRUOGPDN LQJ UHODWHG WR NQRZLQJ"µ *RRGPDQ   7KH FRQVWUXFWLRQLVW DVVXPSWLRQ WKDWZH´FDQKDYHZRUGVZLWKRXWDZRUOGEXWQRZRUOGZLWKRXWZRUGVRU V\PEROVµWRJHWKHUZLWKWKHYLHZWKDW´WKHVHDUFKIRUDXQLYHUVDORUQHFHV VDU\ EHJLQQLQJ LV EHVW OHIW WR WKHRORJ\µ OHDGV *RRGPDQ WR KLV ILUVW DQG PRVWEDVLFWHQHW´:RUOGPDNLQJDVZHNQRZLWDOZD\VVWDUWVIURPZRUOGV DOUHDG\ DW KDQG WKH PDNLQJ LV UHPDNLQJµ ²  $QG WKRXJK KH DGPLWV WKDWKHLV´FRQFHUQHGPRUHZLWKFHUWDLQUHODWLRQVKLSVDPRQJZRUOGVWKDQ ZLWK KRZ RU ZKHWKHU SDUWLFXODU ZRUOGV DUH PDGH IURPRWKHUVµ ²  KH HODERUDWHV RQ WKH EDVLF SURFHVV E\ ZKLFK WKH ´UHPDNLQJµ RI ZRUOGV LV DFKLHYHGD FRPSRVLWLRQDQGGHFRPSRVLWLRQE ZHLJKWLQJF RUGHULQJG  GHOHWLRQDQGVXSSOHPHQWDWLRQDQGH GHIRUPDWLRQ,IWKHVHDUHTXLWHJHQ HUDOO\WKH´ZD\VWKDWZRUOGVDUHPDGHµZHFDQDVVXPHWKDWWKH\DOVRDSSO\ WR OLWHUDU\ ZRUOGPDNLQJ DQG LW ZLOO EH LQWHUHVWLQJ WR VHH ZKHWKHU *RRG PDQVHHVDQ\GLVWLQFWLYHIHDWXUHVRIWKLVSDUWLFXODUNLQGDQGZKDWWKH\FDQ SRVVLEO\EH $V KH GHYRWHV D ZKROH FKDSWHU WR ´6W\OH DQG 6WUXFWXUHµ RQH ZRXOG KRSHWRILQGVRPHLQIRUPDWLRQRQVXFKGLVWLQFWLYHIHDWXUHVWKHUH³EXWLQ VD\LQJ´DIHDWXUHRIVW\OHPD\EHDIHDWXUHRIZKDWLVVDLGRIZKDWLVH[



+HUEHUW*UDEHV

HPSOLILHGRURIZKDWLVH[SUHVVHGµ DQGLQGHILQLQJVW\OHDVVRPHWKLQJ WKDW FRQVLVWV RI ´WKRVHIHDWXUHVRIWKHV\PEROLF IXQFWLRQLQJ RI WKH ZRUN WKDWDUHFKDUDFWHULVWLFRIDXWKRUSHULRGSODFHRUVFKRROµ KHVWD\VRQ VXFK D KLJK OHYHO RI DEVWUDFWLRQ WKDW WKH FRQWULEXWLRQ RI VW\OH WR OLWHUDU\ ZRUOGPDNLQJUHPDLQVYHU\YDJXHLQGHHG7KHPRVWYDOXDEOHFRPPHQW³ HVSHFLDOO\UHJDUGLQJPRGHUQLVWDQGSRVWPRGHUQOLWHUDWXUHDQGDUW³FRPHV DWWKHYHU\HQGLQJRIWKLVFKDSWHU 7KH OHVV DFFHVVLEOH D VW\OH LV WR RXU DSSURDFK DQG WKH PRUH DGMXVWPHQW ZH DUH IRUFHGWRPDNHWKHPRUHLQVLJKWZHJDLQDQGWKHPRUHRXUSRZHUVRIGLVFRYHU\ DUHGHYHORSHG7KHGLVFHUQPHQWRIVW\OHLVDQLQWHJUDODVSHFWRIWKHXQGHUVWDQGLQJ RUZRUNVRIDUWDQGWKHZRUOGWKH\SUHVHQW 

$V ¶ZRUOGV· RU ZKDW PRUH WUDGLWLRQDOO\ KDV EHHQ FDOOHG ¶ZRUOG YLHZV· RU ¶ZRUOG SLFWXUHV·  DFFRUGLQJ WR *RRGPDQ DUH PDGH IURP DOUHDG\ H[LVWLQJ RWKHU¶ZRUOGV·TXRWDWLRQVSOD\DQLPSRUWDQWUROHLQZRUOGPDNLQJ%HFDXVH PXFKZRUNKDGDOUHDG\EHHQGRQHRQYHUEDOTXRWDWLRQKHEHFDPHKRZ HYHU LQWHUHVWHG DERYH DOO LQ QRQYHUEDO TXRWDWLRQ 1HYHUWKHOHVV KH ILUVW VHHNVWRGHILQHYHUEDOTXRWDWLRQDQGFRPHVWRWKHIROORZLQJFRQFOXVLRQ 1HFHVVDU\FRQGLWLRQVIRUVXFKTXRWDWLRQGLUHFWRULQGLUHFWDUH D  FRQWDLQPHQW RI ZKDW LV TXRWHG RU RI VRPH RWKHU UHSOLFD RU SDUDSKUDVH RI LW DQG E UHIHUHQFHWR³E\QDPLQJRUSUHGLFDWLRQ³ZKDWLVTXRWHG>«@ F UHSODFHPHQWRIWKHGHQRWHGDQGFRQWDLQHGH[SUHVVLRQE\DQ\RWKHURIWKHODQ JXDJHUHVXOWVLQDQH[SUHVVLRQWKDWGHQRWHVWKHUHSODFLQJH[SUHVVLRQ 

'LUHFW RU LQGLUHFW TXRWDWLRQV DUH KRZHYHU QR VSHFLILF IHDWXUH RI ZRUOG PDNLQJ LQ WKH GRPDLQV RI OLWHUDWXUH RU DUW 7KH\ VHHP WR SOD\ DQ HYHQ PRUHLPSRUWDQWUROHLQVRPHNLQGVRIVFLHQWLILFSURVHWKDQLQRWKHUNLQGV RIGLVFRXUVHEHFDXVHWKH\DUHKHOGWRJLYHZHLJKWWRDQDUJXPHQWWRVLJQDO WKDWRQHLVZHOODZDUHRIZRUNWKDWKDVDOUHDG\EHHQGRQHDQGRIKRZWKH QHZILQGLQJVSUHVHQWHGDUHOLQNHGWRZKDWFRXQWVDV¶VWDWHRIWKHDUW· 7KRXJKLWLVZRQGHUIXOWROHDUQWKDW´WKHDUWVPXVWEHWDNHQQROHVV VHULRXVO\ WKDQWKH VFLHQFHVDV PRGHV RI GLVFRYHU\ FUHDWLRQ DQG HQODUJH PHQWRINQRZOHGJHLQWKHEURDGVHQVHRIDGYDQFHPHQWRIXQGHUVWDQGLQJµ   *RRGPDQ GRHV QRW FRQYLQFLQJO\ GHPRQVWUDWH ZK\ WKLV VKRXOG EH VR$VWDWHPHQWOLNH´)LFWLRQRSHUDWHVLQDFWXDOZRUOGVLQPXFKWKHVDPH ZD\DVQRQILFWLRQµ ZKLFKLVPDGHLQWKLVFRQWH[WPD\LQVRPHDUHDV EHMXVWLILHG³EXWDWOHDVWZKHQRXUKHDOWKLVH[DPLQHGE\DGRFWRUWRJLYH EXWRQHH[DPSOH ZHYHU\PXFKKRSHWKDWWKLVZLOOQRWEHVRDQGRQHFDQ WHVWDQ\WLPHZKHWKHULWPDNHVDGLIIHUHQFHRXWVLGHDGUHDP WRERDUGDQ DLUSODQHRUD¶IO\LQJFDUSHW·ZKHQDWWHPSWLQJWRJHWWRDGLVWDQWSODFHZLWK

7KUHH7KHRULHVRI/LWHUDU\:RUOGPDNLQJ



ERWK ERG\ DQG PLQG :KDW LV QHJOHFWHG LQ *RRGPDQ·V GHVFULSWLRQ RI ZRUOGPDNLQJ LV WKH RYHUDOO ILFWLRQDO VWDWXV WKH UHGXFHG RQWRORJLFDO DQG HSLVWHPRORJLFDO FODLP WR YDOLGLW\ RI ZKDWHYHU LV SUHVHQWHG LQ OLWHUDWXUH RU³LQWKHZRUGVRI'HUULGD³WKHIDFWWKDW´WKHUHLVQROLWHUDWXUHZLWKRXW DVXVSHQGHGUHODWLRQWRPHDQLQJDQGUHIHUHQFHµ'HUULGD WKDWOLWHUDWXUH LV WKLV LQVWLWXWLRQ RI ILFWLRQ ZKLFK JLYHV LQ SULQFLSOH WKH SRZHU WR VD\ HYHU\WKLQJ WR EUHDNIUHHRIWKHUXOHVWRGLVSODFHWKHPDQGWKHUHE\WRLQVWLWXWHWRLQYHQWDQG HYHQWRVXVSHFWWKHWUDGLWLRQDOGLIIHUHQFHEHWZHHQQDWXUHDQGLQVWLWXWLRQ QDWXUH DQGFRQYHQWLRQDOODZQDWXUHDQGKLVWRU\ 

7KHDWWHPSWWRGHPRQVWUDWHWKDWWKHZRUOGPDNLQJLQOLWHUDWXUHDQGDUWLV DOVRYDOXDEOHLQWKHVHQVHWKDWLWHQKDQFHVNQRZOHGJHDQGXQGHUVWDQGLQJ PXVW QRW PDNH XV IRUJHW WKDW WKH H[WUDRUGLQDU\ OLFHQFH LW LV JUDQWHG DW OHDVWLQ:HVWHUQFXOWXUH KDVDSULFHLWGHSHQGVRQWKHYDOLGDWLRQDOPRG HVW\ ZLWK ZKLFK HYHU\WKLQJ LQ LW LV SUHVHQWHG WKH ´VXVSHQGHG UHODWLRQ WR PHDQLQJDQGUHIHUHQFHµLQFRPSDULVRQZLWKVFLHQWLILFGLVFRXUVHDQGRWKHU QRQILFWLRQDOGLVFRXUVHV *RRGPDQ PLQLPLVHV WKH GLIIHUHQFH EHWZHHQ WKH YDULRXV ´ZD\V RI ZRUOGPDNLQJµ E\ VWUHVVLQJ WKH ILFWLRQDO HOHPHQWV LQ WKH ODWWHU NLQGV RI GLVFRXUVHVDQGE\UHSODFLQJWKHTXHVWLRQRI¶WUXWK·E\WKHRQHRI¶ILW· %ULHIO\ WKHQ WUXWK RI VWDWHPHQWV DQG ULJKWQHVV RI GHVFULSWLRQV UHSUHVHQWDWLRQV H[HPSOLILFDWLRQVH[SUHVVLRQV³RIGHVLJQGUDZLQJGLFWLRQUK\WKP³LVSULPDULO\ DPDWWHURIILWILWWRZKDWLVUHIHUUHGWRLQRQHZD\RUDQRWKHURUWRRWKHUUHQGHU LQJVRUWRPRGHVDQGPDQQHUVRIRUJDQL]DWLRQ 

7KLV UHPLQGV RQH RI )RXFDXOW·V GLVWLQFWLRQ EHWZHHQ KDYLQJ IRXQG WKH WUXWK DQG EHLQJ ¶LQ WKH WUXWK· LQ RUGHU WR EHFRPH DFNQRZOHGJHG E\ WKH FXOWXUDOSRZHUVWKDWEHRQHKDVWRPDNHVXUHWRVWD\¶ZLWKLQWKHWUXWK·WR WDNHFDUHWKDWZKDWRQHSUHVHQWVZLOOILWLQWRWKHILHOGRIUHFHLYHG¶WUXWKV· D@Q\LQIRUPDWLRQLQDVHQWHQFHWKDWLVLPSOLFLWPXVWEHPDGHH[SOLFLW LQWKHUHSUHVHQWDWLRQRIWKHPHDQLQJRIWKDWVHQWHQFHµ %HFDXVHLWLV WKHREMHFWLYHRIWKLVDUWLFOHWRSRLQWRXWWKHYDOXHRIVRPHTXLWHGLIIHUHQW ¶ROGHU·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²  $IXUWKHUSUHFRQGLWLRQRI6FKDQNDQG$EHOVRQ·VWKHRU\RIKXPDQXQ GHUVWDQGLQJEHVLGHV&'7LVWKHLUFRQYLFWLRQRIWKHHVVHQWLDOLPSRUWDQFHRI KXPDQPHPRU\RUJDQLVDWLRQHVSHFLDOO\RIZKDWWKH\WHUP¶HSLVRGLFPHP

7KUHH7KHRULHVRI/LWHUDU\:RUOGPDNLQJ



RU\· D IRUP RI PHPRU\ ´RUJDQL]HG DURXQG SURSRVLWLRQV OLQNHG WRJHWKHU E\WKHLURFFXUUHQFHLQWKHVDPHHYHQWRUWLPHVSDQµ 7KLVLVKHOGWR EHVREHFDXVH´VRPHHSLVRGHVDUHUHPLQLVFHQWRIRWKHUV$VDQHFRQRP\ PHDVXUHLQWKHVWRUDJHRIHSLVRGHVZKHQHQRXJKRIWKHPDUHDOLNHWKH\ DUHUHPHPEHUHGLQWHUPVRIDVWDQGDUGL]HGJHQHUDOL]HGHSLVRGHZHZLOOFDOO DVFULSWµ  6XFK VFULSWV PDNH LW SRVVLEOH WKDW VRPHRQH ZKR ´GHFLGHV WR WHOO D VWRU\WKDWUHIHUHQFHVDVFULSW>«@UHFRJQL]HVWKDWKHQHHGQRW>«@PHQ WLRQ HYHU\ GHWDLO RI KLV VWRU\µ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«@7KXVDVFULSWLVDSUHGHWHUPLQHGVWHUHRW\SHG VHTXHQFHRIDFWLRQVWKDWGHILQHVDZHOONQRZQVLWXDWLRQ 

$FFRUGLQJO\VFULSWVQRWRQO\LPSO\DQXPEHURIUROHVEXWDUHDOVRZULWWHQ IURP WKH SRLQW RI YLHZ RI RQH SDUWLFXODU UROH EHFDXVH WKLV LV WKH ZD\ LQ ZKLFKWKH\DUHUHPHPEHUHG :KHQ D VFULSW LV FDOOHG XS E\ D FRQFHSW IRU LQVWDQFH D ¶UHVWDXUDQW VFULSW· E\ D PHQWLRQLQJ RI ¶UHVWDXUDQW·³WR XVH 6FKDQN DQG $EHOVRQ·V IDYRXULWHH[DPSOH UHDGHUVZLOODVVXPHWKDWLWSURFHHGVQRUPDOO\DVORQJ DVQRRWKHULQIRUPDWLRQLVJLYHQ$VKRZHYHUVWRU\WHOOHUVGRQRWZDQWWR ERUH WKHLU OLVWHQHUV RU UHDGHUV ZLWK ZKDW WKH\ DUH ZHOODFTXDLQWHG ZLWK ´PRVWUHDOVWRULHVWKDWGHDOZLWKVFULSWVUHODWHHYHQWVWKDWDUHXQXVXDOZLWK UHVSHFWWRVWDQGDUGVFULSW7KHSUREOHPLQVFULSWDSSOLFDWLRQWKHQEHVLGHV GHFLGLQJ KRZ PXFK RI D VFULSW WR LQIHU LV WR NQRZ KRZ WR WLH WRJHWKHU HYHQWV WKDW DUH QRW GLUHFWO\LQ WKHVFULSWµ   $QG WKH DXWKRUV PHQWLRQ WZRNLQGVRIHYHQWVLQWHUUXSWLQJVFULSWVLQWHUIHUHQFHVREVWDFOHVRUHUURUV  DQG GLVWUDFWLRQV ,QWHUUXSWLRQV DUH DOVR ERXQG WR RFFXU ZKHQ PRUH WKDQ RQHVFULSWZLOOEHDFWLYHDWRQFHDQGWKHUHLVFRPSHWLWLRQUHJDUGLQJLQFRP LQJLWHPVRILQIRUPDWLRQ 6FKDQNDQG$EHOVRQGUDZDWWHQWLRQWRWKHIDFWWKDWEHVLGHVWKHVLWX DWLRQDOVFULSWVWRZKLFK¶UHVWDXUDQW·EHORQJVWKHUHDUHDOVR¶SHUVRQDOVFULSWV· DQG¶LQVWUXPHQWDOVFULSWV·$SHUVRQDOVFULSWH[LVWVRQO\LQWKHPLQGRIDQ DFWRUDQGFRQVLVWVRID´VHTXHQFHRISRVVLEOHDFWLRQVWKDWOHDGWRDGHVLUHG JRDOµ   7KRXJK EHLQJ SHUVRQDO VXFK VFULSWV FDQ ZHOO EH FRPPRQ WR PDQ\ LQGLYLGXDOV DQG WKH VFULSWV RI IODWWHUHUV MHDORXV VSRXVHV JRRG 6D



+HUEHUW*UDEHV

PDULWDQVSLFNSRFNHWVRUVSLHVWKDWDUHJLYHQDVH[DPSOHVVKRZWKDWWKH\ PDNHXSZKDWZHWHQGWRFDOO¶NQRZLQJWKHZRUOG·,QVWUXPHQWDOVFULSWV KRZHYHUDUHVWUXFWXUDOO\LGHQWLFDOZLWKVLWXDWLRQDOVFULSWV\HW´WKHRUGHURI HYHQWV LV YHU\ ULJLG DQG HYHU\ RQH RI WKH HYHQWV LQ WKH VFULSW PXVW EH GRQHµ ,Q DGGLWLRQ ´LQVWUXPHQWDO VFULSWV WDNH PXOWLSOH DFWRUV ZKLOH LQ VWUXPHQWDO VFULSWV KDYH RQO\ RQH SDUWLFLSDQWµ   DQG DQ\ QXPEHU RI H[DPSOHVFDQEHIRXQGIRULQVWDQFHLQDFRRNERRNRUUHSDLUPDQXDO +HOSIXODVVFULSWVDUHSHRSOHLQUHDOOLIHVLWXDWLRQVDQGUHDGHUVRIVWR ULHV ZLOO DOVR KDYH WR FRSH ZLWK VLWXDWLRQV WKH\ KDYH QHYHU HQFRXQWHUHG EHIRUHDQGWKH\FDQGRVRE\XVLQJ¶SODQV· 3ODQVGHVFULEHWKHVHWRIFKRLFHVWKDWDSHUVRQ KDVZKHQKHVHWVRXWWR DFFRP SOLVK D JRDO ,Q OLVWHQLQJ WR GLVFRXUVH SHRSOH XVH SODQV WR PDNH VHQVH RI VHHP LQJO\ GLVFRQQHFWHG VHQWHQFHV %\ ILQGLQJ D SODQ DQ XQGHUVWDQGHU FDQ PDNH JXHVVHV DERXW WKH LQWHQWLRQV RI DQ DFWLRQ LQ DQ XQIROGLQJ VWRU\ DQG XVH WKHVH JXHVVHVWRPDNHVHQVHRIWKHVWRU\ 

,QDGGLWLRQWRVFULSWVWKHUHDUHWKHQVHWVRISRVVLEOHDFWLRQVFDOOHG¶SODQ ER[HV·E\WKHDXWKRUV WKDWKHOSXVWRXQGHUVWDQGDQGPDNHSUHGLFWLRQV DQGMXVWDV´XQGHUVWDQGLQJLVSUHGLFWLYHLQLWVQDWXUHµ VRLVZRUOGPDN LQJ´VRPHWLPHVDOOSODQEDVHGVRPHWLPHVDOOVFULSWEDVHGDQGVRPHWLPHV DPL[µ 7KHUHDUHDOVRURXWLQHVHTXHQFHVRIVFULSWVDQGSODQVWKDWWKH DXWKRUV FDOO ¶1DPHG 3ODQV· ZHOONQRZQ VHTXHQFHV WKDW FRQVLGHUDEO\ HQ KDQFHRXUZRUOGPDNLQJFDSDELOLW\ERWKLQWHUPVRIFUHDWLQJDQGRIXQGHU VWDQGLQJ OLWHUDU\ ZRUOGV 3ODQV DUH FKRVHQ RU GHYHORSHG WR DFFRPSOLVK JRDOVDQG LQ VWRULHV ZLWK D ORW RI FRQWH[WXDO LQIRUPDWLRQ DERXW WKH PDLQ FKDUDFWHU DQG LQ ZHOOGHYHORSHGEHOLHIV\VWHPVDERXWWKHZRUOGWKHUHDUHPDQ\H[SHFWDWLRQVDERXW OLNHO\HYHQWV7KHVHH[SHFWDWLRQVDUHEDVHGRQGHWDLOHGNQRZOHGJHRIWKHJHQHVLV DQGQDWXUHRISDUWLFXODUJRDOV6LQFHVXFKH[SHFWDWLRQVDUHFUXFLDOWRXQGHUVWDQG LQJZHPXVWNQRZZKDWNLQGVRIJRDOVWKHUHDUHDQGKRZWKH\LQWHUDFWZLWKHDFK RWKHULQRUGHUWRIRUPXODWHH[SHFWDWLRQV 

*RDOV FDQ EH RI YDU\LQJ VSHFLILFLW\ DQG FDQ IRUP KLHUDUFKLHV RI PDQ\ OHYHOVDQG6FKDQNDQG$EHOVRQHYHQDWWHPSWDPRGHVWWD[RQRP\RIJRDOV WKDW KDV VHYHQ IRUPV RI ¶VWDQGDUG JRDOV· VDWLVIDFWLRQ JRDOV HQMR\PHQW JRDOV DFKLHYHPHQW JRDOV SUHVHUYDWLRQ JRDOV FULVLV JRDOV LQVWUXPHQWDO JRDOV GHOWD JRDOV  ´D QXPEHU RI SUHFHGHQFH UXOHV JRYHUQLQJ SULRULWLHV DPRQJJRDOIRUPVZKHQPRUHWKDQRQHIRUPLVVLPXOWDQHRXVO\DFWLYDWHGµ   DQG ´H[SHFWDQF\ UXOHVµ EDVHG RQ ´D VHW RI EHOLHIV DERXW ZKDW DQ LQGLYLGXDO LV OLNHO\ WR ZDQW LQ D JLYHQ FLUFXPVWDQFHµ   $FFRUGLQJ WR WKHYHU\EHJLQQLQJRI-DQH$XVWHQ·V3ULGHDQG3UHMXGLFHIRULQVWDQFH´>L@WLV

7KUHH7KHRULHVRI/LWHUDU\:RUOGPDNLQJ



DWUXWKXQLYHUVDOO\DFNQRZOHGJHGWKDWDVLQJOHPDQLQSRVVHVVLRQRIDJRRG IRUWXQHPXVWEHLQVHDUFKRIDZLIHµ  7KHQ6FKDQNDQG$EHOVRQE\DVNLQJTXHVWLRQVOLNH´:KHUHGRJRDOV FRPHIURP"7KDWLVZKHQGRZHH[SHFWFHUWDLQJRDOV"µDUHOHGWRORRNIRU ¶WKHPHV· EHFDXVH WKHPHV ZH DUH LQIRUPHG ´FRQWDLQ WKH EDFNJURXQG LQIRUPDWLRQ XSRQ ZKLFK ZH EDVH RXU SUHGLFWLRQV WKDW DQ LQGLYLGXDO ZLOO KDYHD FHUWDLQJRDOµ  7KH\GLYLGHWKHGRPDLQRIWKHPHVLQWRWKUHH FDWHJRULHV UROH LQWHUSHUVRQDO DQG OLIH WKHPHV DQG WKHQ GHVFULEH ZKDW PDNHVXSWKHSDUWLFXODU¶EXQGOHVRINQRZOHGJH·RIHDFKRIWKHVHJURXSVRI WKHPHV1RWXQH[SHFWHGO\LWVKRZVWKDWWKHLQWHUSHUVRQDOWKHPHVGHVHUYH PRVWDWWHQWLRQEHFDXVHDOOVRFLDOUHODWLRQVKLSVDUHWKHPHVDQGPHQWLRQHG DUH IRU LQVWDQFH ¶/RYHUV· ¶+XVEDQG:LIH· ¶)DWKHU6RQ· RU ¶%RVV(P SOR\HH· :KDW PXVW QRW EH IRUJRWWHQ IRU DOO WKH GHWDLOHG DQDO\VHV LQ 6FULSWV 3ODQV*RDOVDQG8QGHUVWDQGLQJDUHKRZHYHUWKHUHVHUYDWLRQVILQDOO\PDGHE\ WKH DXWKRUV DERXW WKHLU V\VWHP 7KH\ VWUHVV WKDW LW LV ´RULHQWHG WRZDUGV KDQGOLQJDFWLRQVE\JRDORULHQWHGKXPDQV3UREOHPVLQUHSUHVHQWLQJLQQHU DIIHFWLYHOLIHRUGHVFULSWLRQRIVFHQHVDVZHOODVRWKHUQRQKXPDQHYHQWV DUHLVVXHVVWLOOWREHGHDOWZLWKDVZHOO:HDUHQRWUHDG\WRKDQGOHQRYHOV LQRWKHUZRUGV² 1HYHUWKHOHVVWKHLQVLJKWVLQWRERWKHYHU\GD\DQG WH[WXDOZRUOGPDNLQJWKH\JDLQHGDUHFRQVLGHUDEOH³WKH\DUHLQVRPHZD\ PRUHYDOXDEOHEHFDXVHPRUHVSHFLILFWKDQPDQ\RIWKHPRUHUHFHQWFDWH JRULHVSUHVHQWHGE\WKHRULVWVZRUNLQJLQWKHFRQWDFW]RQHEHWZHHQPLQG VFLHQFH DQG FRJQLWLYH SV\FKRORJ\ 8QIRUWXQDWHO\ WKH IRUPDO QRWDWLRQ V\VWHPGHYHORSHGWRFUHDWHDEDVHIRUWKHFRPSXWHUSURJUDPPLQJRI¶DUWL ILFLDO LQWHOOLJHQFH· ZLOO KDYH GHWHUUHG DQG ZLOO GHWHU PDQ\ FULWLFV ,W PXVW WKHUHIRUHEHVWUHVVHGWKDWWKHUHDUHWRRPDQ\YDOXDEOHLGHDVLQWKLVVWXG\ WR GR ZLWKRXW LW ZKHQ LQYHVWLJDWLQJ ZRUOGPDNLQJ ,W KDV WR EH VDLG WKRXJKWKDWDVLQWKHFDVHRI*RRGPDQ·V:D\VRI:RUOGPDNLQJWKHGLIIHU HQFH EHWZHHQ WKH ZRUOGPDNLQJ LQ ILFWLRQDO DQG UHIHUHQWLDO GLVFRXUVHV DO PRVW WRWDOO\ GLVDSSHDUV DQG WKHUHE\ RQH RI WKH VLJQLILFDQW IHDWXUHV RI OLWHUDU\ZRUOGPDNLQJGRHVQRWUHFHLYHGXHDWWHQWLRQ  )RUUHDGHUVZKRKDYHFRPHWKLVIDUDQGPD\KDYHQRWLFHGWKDWLWPDNHV VHQVHWRLQFOXGHROGHUZRUNVLQWKHSUHVHQWGLVFXVVLRQ,ZRXOGOLNHWRGUDZ DWWHQWLRQWRDIXUWKHUVWXG\WKDWZLOOSURYHSHUWLQHQW:KDW,PHDQLV+DQV 9DLKLQJHU·V 3KLORVRSKLH GHV $OV 2E 6\VWHP GHU WKHRUHWLVFKHQ SUDNWLVFKHQ XQG UHOLJL|VHQ )LNWLRQHQ GHU 0HQVFKKHLW IURP  WKDW ILUVW DSSHDUHG LQ (QJOLVK WUDQVODWLRQLQDQGDJDLQLQXQGHUWKHWLWOH7KH3KLORVRSK\RI$V,I 7KH SDUWLFXODU UHDVRQ ZK\ WKLV PRQXPHQWDO VWXG\ RI  SDJHV VKRXOG FRPHLQKHUHLVWKDW,UHDGZLWKFRQVLGHUDEOHDPD]HPHQWRQWKHILUVWSDJH RIWKHLQWURGXFWLRQWR5XWK5RQHQ·VPRUHUHFHQW3RVVLEOH:RUOGVLQ/LWHUDU\



+HUEHUW*UDEHV

7KHRU\WKDW´>X@QWLOWKHPLGVHYHQWLHVILFWLRQDOLW\ZDVDQREMHFWRIVHSDUDWH GLVFLSOLQDU\ SXUVXLWV LW ZDV LQWHUSUHWHG DV D SURSHUW\ RI WH[WV E\ OLWHUDU\ WKHRULVWVDQGHLWKHUH[FOXGHGDVORJLFDODEQRUPDOLW\RUHQWLUHO\LJQRUHGE\ SKLORVRSKHUVµ :KRLVDFWXDOO\JXLOW\RIVRPHLJQRULQJEHFRPHVREYL RXV ZKHQ 9DLKLQJHU LV QHYHU HYHQ PHQWLRQHG DQ\ZKHUH LQ WKH ZKROH ERRN $QG LW VKRXOG EH DGGHG WKDW LW ZHUH LQVWDQFHV OLNH WKLV RQH WKDW PRWLYDWHGPHWREULQJ,QJDUGHQ*RRGPDQDQG6FKDQNDQG$EHOVRQLQWR WKHSUHVHQWGLVFXVVLRQDQGWRGHPRQVWUDWHWKHUHE\WKDWLQFRQWUDVWWRWKH VFLHQFHVUHVHDUFKLQWKHKXPDQLWLHVLVEDVHGRQDQHSLVWHPRORJ\RIFRP SOHPHQWDWLRQ UDWKHU WKDQ RQ RQH RI VXEVWLWXWLRQ 7KH PRUH UHFHQW VH TXHQFHRIWUHQG\¶WXUQV·PD\KDYHSXVKHGWKLVEDVLFDVVXPSWLRQVRPHZKDW LQWRWKHEDFNJURXQGDQGWKHIDFWWKDWVRPHWUDGLWLRQDOSXEOLVKHUVLQWKH ILHOG RI WKH KXPDQLWLHV DUH EHLQJ PDQDJHG QRZ ¶$PHULFDQ VW\OH· DQG VFKRODUO\ERRNVDUHUHPDLQGHUHGDIWHUDIHZ\HDUVWLPHKDVDOVRFRQWULE XWHGWRFXOWXUDODPQHVLDDQGWKHHQVXLQJLOOXVLRQWKDWWKHZKHHOKDVQRW\HW EHHQLQYHQWHG$VREHUUHIOHFWLRQZLOOKRZHYHUUHYHDOWKDWLQWKHKXPDQL WLHVWKHUHLVQRVWUDLJKWOLQHRISURJUHVVLRQEXWUDWKHUDFRQWLQXRXVHQFLU FOLQJ RI SUREOHP ]RQHV E\ HYHU QHZ DSSURDFKHV WKDW RQO\ YHU\ UDUHO\ LQYDOLGDWHROGHURQHVEXWUDWKHUDGGIXUWKHULQVLJKWV)RUWKDWUHDVRQWKH KLVWRU\RIOLWHUDU\WKHRU\DQGFULWLFLVPUHPDLQVDQLQWHJUDOSDUWRIV\VWHP DWLFUHVHDUFKLQWKHILHOG

5HIHUHQFHV $XVWHQ-DQH3ULGHDQG3UHMXGLFH/RQGRQ'HQW 'HUULGD -DFTXHV ´¶7KLV 6WUDQJH ,QVWLWXWLRQ &DOOHG /LWHUDWXUH· $Q ,QWHUYLHZ ZLWK -DFTXHV'HUULGDµ-DFTXHV'HUULGD$FWVRI/LWHUDWXUH(G'HUHN$WWULGJH1HZ«@ WR WKH XQLW\ ZKLFK KDG EHHQ EURNHQµ ,Q *HQHVLV GLPWUDFHVRIWKLVHDUO\KLVWRU\DUHSUHVHUYHG+XPDQLW\XWWHUO\WRUQDSDUW VRXJKW´WRKROGRXWDJDLQVWWKHRXWEXUVWVRIDQDWXUHµIRUPHUO\IULHQGO\ DQG WUDQTXLO ´QRZ KRVWLOHµ )RU WKLV ´QDWXUH KDG WR EH PDVWHUHGµ DOO +HJHO´6SLULWµ 6REHJDQ+HJHO·VSKLORVRSKLFDOSURMHFWRIUHFRQFLOLD WLRQLQ´7KH6SLULWRI&KULVWLDQLW\DQG,WV)DWHµ² QRWZLWK&UH DWLRQEXWWKH)ORRG³ORVVRUDOLHQDWLRQRIKXPDQLW\·VQDWXUDOVWDWH 7KLVHVVD\ZLOODUJXHWKDW+HJHO·VHDUO\ZRUNUHPDLQVRIXVHLQUHDGLQJ DQGUHVSRQGLQJWRWKRVHSOXUDOLVWDQGFRQVWUXFWLYLVWHSLVWHPRORJLHVZKLFK LQ WKHLU UHMHFWLRQV RI QDwYH UHDOLVP VHW WKH GLVFXUVLYHO\ RU WKRXJKW SURGXFHGZRUOGVRIH[SHULHQFHDQGNQRZOHGJHDJDLQVW¶QDWXUH·RU¶UHDOLW\· EDUULQJ DFFHVV WR WKLV RWKHU 6XFK WKHRULHV IROORZ .DQW·V H[HPSODU\ GLV WLQFWLRQ EHWZHHQ NQRZOHGJH DQG WKLQJV LQ WKHPVHOYHV $V ZLOO EHFRPH FOHDU LW LV SUHFLVHO\ WKH HPHUJHQFH RI WKLV IRXQGDWLRQDO GLVWLQFWLRQ WKDW +HJHOQDUUDWHVLQKLVVWUDQJHELEOLFDOH[HJHVLV,QWUXWKWKHVHFRQVWUXFWLYLVW WKHRULHVWKHPVHOYHVVXVWDLQDFRUUHVSRQGHQFHPRGHORINQRZOHGJHZKLFK DUH EHOLHYHG WR KDYH WUDQVFHQGHG DYRLGHG RU GLVVROYHG  E\ PDLQWDLQLQJ WKHGLVWLQFWLRQEHWZHHQH[SHULHQFHRUNQRZOHGJHRQWKHRQHKDQGDQGDQ XQNQRZDEOH¶UHDOLW\·RQWKHRWKHU)RUEHWWHURUIRUZRUVHWKH\KROGWKLV GLVWLQFWLRQRSHQWKURXJKWKHEORFNZKLFKWKH\REVHUYHRQDOODFFHVVWRD ZRUOG LQ LWVHOI 6SHFWUDOO\ WKLV NHHSV WKH SRVVLELOLW\ RI SXUH LPPHGLDF\ RSHQ ZKHUH +HJHOLDQ WKRXJKW DFNQRZOHGJLQJ WKH FXOWXUDOO\ VKDUHG DQG KLVWRULFDOO\ ERXQG SUHFRQGLWLRQV RI WKRVH YHU\ FDWHJRULHV DQG FRQFHSWV WKURXJKZKLFKWKHZRUOGLVFRQVWLWXWHGLQH[SHULHQFHVWULSVWKHVHSUHFRQ GLWLRQV RI WKHLU LQFRPSUHKHQVLELOLW\ DQG QDPHV WKHP ¶DFWXDO· ,Q +HJHO·V



%HQ'DZVRQ

H\HVWKLVKLVWRULFDODFWXDOLW\LVWKHUDWLRQDOLWVHOI³ZKLFKLVQHYHUWKHOHVVIDU IURPVD\LQJWKDWHYHU\WKLQJLVMXVWDVLWVKRXOGEH ,QWKLVOLJKW1HOVRQ*RRGPDQ·VSRZHUIXODUJXPHQWIRU´PXOWLSOHDF WXDO ZRUOGVµ   HQKDQFHG E\ KLV ULFK GHVFULSWLRQV RI YDULRXV ´ZD\V RI ZRUOGPDNLQJµ DUWLFXODWHV WKH WDWWHUHG DQG GLVWUDFWHG FRQGLWLRQ RI WKH ZRUOG.DQW·VWUDQVFHQGHQWDOHSLVWHPRORJ\DFWVLQVRPHHVVHQWLDOUHVSHFWV DV JXDUDQWRU RI WKLV SOXUDOLVWLF DQG FRQVWUXFWLYLVW GLVFRXUVH DQG DV VXFK +HJHO·V SKHQRPHQRORJLFDO FULWLTXH RI .DQWLDQLVP UHPDLQV RI XVH LQ XQ GHUVWDQGLQJ LW³XQGHUVWDQGLQJ LW LQ WKH VHQVH RI ORFDWLQJ ¶ZRUOGPDNLQJ· LQDQGUHDGLQJLWWRSHUFHLYHWKHZRUOGLQZKLFKLWLVWUXH,I*RRGPDQ·V SOXUDOLVP H[HPSOLILHV D FHUWDLQ SKLORVRSKLFDO UHSUHVVLRQ RI WKH ZKROH LW QRQHWKHOHVV XQFRQVFLRXVO\ VXVWDLQV KRSH RI LWV UHVWRUDWLRQ +HJHO·V WH[W KHOSV UHQGHU H[SOLFLW WKH SRVVLELOLW\ DQG FRXUVH D UHFRYHU\ RI YLWDO XQLW\ ZRXOGKDYHWRIROORZ7KHZRUOGVDQGZD\VRIZRUOGPDNLQJGHVFULEHGE\ *RRGPDQ KDYH D VLQJXODU DQG KLVWRULFDOO\ VSHFLILF FRPPRQ DFWXDO ZRUOG³PRUHEDVLFWKDQWKHSROHVRIVXEMHFWLYLW\DQGREMHFWLYLW\³DVWKHLU SUHFRQGLWLRQ 7KXVFRQFLVHO\SXWWKHFRQWHQWLRQRIWKLVHVVD\LV WKDWWRVSHDNRI ¶ZD\V RI ZRUOGPDNLQJ· LV LQHYLWDEO\ WR UHSHDW WKH WUDQVFHQGHQWDO PD[LP WKDW ZH NQRZ DSSHDUDQFHV RQO\ QRW WKLQJV LQ WKHPVHOYHV   WKDW WKH ZRUOGLQZKLFKWKLVLVWUXHLVLWVHOIDQDSSHDUDQFHDQGDVVXFKKLVWRULFDOO\ VSHFLILFRQHLQZKLFKLQVWUXPHQWDOUDWLRQDOLW\DSSHDUVWRKDYHWULXPSKHG    WKDWSOXUDOLVWLF FRQVWUXFWLYLVP QR OHVV WKDQWUDQVFHQGHQWDO LGHDOLVP LV ZLWKLQ WKLV ZRUOG WKH SKLORVRSKLFDO FLSKHU DQG WKH V\PSWRP RI VRFLHWDO SURFHVVHVRIDOLHQDWLRQLQVWUXPHQWDOLVDWLRQDQGGRPLQDWLRQDQG WKDW LQVHQVLQJZKDWRXJKWWRKDYHEHHQJLYHQEXWLVQRWWKHZRUNLQJRIIDWH FRPPHQFHVUHFRQFLOLDWLRQDQGWKHUHWXUQWRDGLIIHUHQWVRFLDOO\PHGLDWHG  XQLW\DUHFRYHU\RIHWKLFDOOLIHLVSURPLVHG7KLVFRPSOH[ERG\RIFODLPV FDQ EH IRXQG LQ HPEU\RQLF IRUP LQ +HJHO·V HDUO\ JHQHDORJLFDO H[HJHVLV ´7KH6SLULWRI&KULVWLDQLW\DQG,WV)DWHµ7KHIRXUWKHOHPHQWRIWKHDUJX PHQWKRSHRUWKHSRVVLELOLW\RIUHFRQFLOLDWLRQ ZLOOEHFRPHFOHDULQUHOD WLRQWR+HJHO·VFRQFHSWLRQRIIDWH +HJHO·V SKLORVRSK\ VWDUWV QHLWKHU ZLWK L@Q WKH %HJLQQLQJµ EHJLQV DO UHDG\LQWKHSURFHVVRILWVORVV:KDW·VPRUHIDUIURPGHQ\LQJRUREIXV FDWLQJ WKH LPSRUWDQFH RI QDUUDWLYH +HJHO·V SURMHFW GHFLGHGO\ KLJKOLJKWV LW³EXW QRW LQ WKH VHQVH RI EOLWKHO\ DIILUPLQJ WKH GLVFXUVLYLW\ DQG FRQ VWUXFWHGQHVVRI¶ZRUOGV·,QWKLVVWUDQJHHDUO\PL[WXUHRIH[HJHVLVJHQHDO RJ\DQGFULWLTXH+HJHOQDUUDWHVWKHHPHUJHQFHRIWKH*RGRI*HQHVLVRI WKH QRXPHQDO  DV D KLVWRULFDO DQG FXOWXUDO SKHQRPHQRQ ¶*RG· KHUH LV V\PSWRPDWLF RI LQ LWV PRVW HOHPHQWDU\ IRUP WKH DOLHQDWLRQ IURP DQG

:RUOGPDNLQJDV)DWH





VXEVHTXHQWGRPLQDWLRQRIQDWXUHE\DQLQVWUXPHQWDOLVHGDQGLQVWUXPHQWDO LVLQJ LQWHOOHFW 1RDK GLYLGHG ´WKH ZKROHµ LQWR LGHD DQG UHDOLW\ JLYLQJ ´EHLQJµWRDQGGHLI\LQJKLVRZQ´WKRXJKWSURGXFHGLGHDOµDQGWKHQVHW WLQJ´HYHU\WKLQJHOVHRYHUDJDLQVWLWVRWKDWLQWKLVRSSRVLWLRQHYHU\WKLQJ ZDV UHGXFHG WR D WKRXJKW LH WR VRPHWKLQJ PDVWHUHGµ +HJHO ´6SLULWµ  PRGLILHG WUDQVODWLRQ  +HJHO UHDGV WKLV LGHDO %HLQJ DV HVVHQWLDOO\ DQ DWWHPSWWRPDVWHUDQDWXUHGHHPHGLQGLIIHUHQWDOLHQDQGHYHQKRVWLOHWR KXPDQLW\ D YLFDULRXV PDVWHU\ ZKLFK DW RQFH SUHVXSSRVHV UHVSRQGV WR DQGUHSURGXFHV³LQGHHGGUDVWLFDOO\HQKDQFHV³KXPDQLW\·VDOLHQDWLRQIURP LWV QDWXUH :LWKDFHQWUDODPELJXLW\LPSOLHGIURPWKHVWDUW¶QDWXUH·KHUHVLJQLILHV ERWK WKH QDWXUDO ZRUOG DQG KXPDQ QDWXUH )ROORZLQJ WKH )ORRG GLVWUDF WLRQ RU GLYLVLRQ FKDUDFWHULVHV QRW VLPSO\ KXPDQLW\·V UHODWLRQ WR H[WHUQDO QDWXUHEXWDOVRLWVUHODWLRQWRLWVRZQ5HODWHGO\LQWKHRSHQLQJSDJHVRI +HJHO·VWH[WWKHGLVWUDFWLRQDQGGLYLVLRQRIWKHZKROHLVWZRIROG³ILUVWLQ WKHHPHUJHQFHRIQDWXUHDVIRUFHIHOWQRWPHUHO\DVLQGLIIHUHQFHEXWGHY DVWDWLQJ KRVWLOLW\ DQG DJDLQ DQG DSSDUHQWO\ PRUH IXQGDPHQWDOO\  LQ 1RDK·V UHVSRQVH -XVW DV WRGD\ WHFKQRORJ\ LV WXUQHG WR IRU SURWHFWLRQ DJDLQVWHFRORJ\´>D@JDLQVWWKHKRVWLOHSRZHU1RDKVDYHGKLPVHOIE\VXE MHFWLQJERWKLWDQGKLPVHOIWRVRPHWKLQJPRUHSRZHUIXOµ+HJHO´6SLULWµ   %\ FRQWUDVW DIWHU DIORRG LQWKHLU WLPH WKH ´EHDXWLIXOµ *UHHN SDLU 'HXFDOLRQ DQG 3\UUKD ´LQYLWHG PHQ RQFH DJDLQ WR IULHQGVKLS ZLWK WKH ZRUOGWRQDWXUH«>DQG@PDGHDSHDFHRIORYHµ+HJHO´6SLULWµ  7R WKLV EHDXW\ DQG ORYH +HJHO FRQWUDVWV 1RDK·V ´SHDFH RI QHFHVVLW\µ ZKLFK LQ SODFH RI WUXH UHFRQFLOLDWLRQ UDWKHU ´SHUSHWXDWHG WKH KRVWLOLW\µ LELG  $OWKRXJK ¶QHHG· KDV DQ DPELJXRXV VWDWXV WKURXJKRXW WKH WH[W LQ WKHGHVFULSWLRQRI1RDK·VFRQWUDFWXDOUHVROXWLRQKHUHWKHUHIOLFNHUVWKHDQWL OHJDOLVP WKDW ZLOO UXQ WKURXJK +HJHO·V HQWLUH H[HJHVLV %HQHDWK LW DQG DW PRPHQWV H[SOLFLWO\ KH ILUVW EHJLQV WR IRUPXODWH KLV FULWLTXH RI PRGHUQ SKLORVRSK\DQGPRUHVSHFLILFDOO\.DQWLDQLGHDOLVP 7KHFRQFHSWRIODZKHUHLVWDNHQDQGFULWLFLVHGLQDYHU\ZLGHVHQVH %\WKHWLPHRI0RVHVOHJDOLVPFKDUDFWHULVHVWKHWRWDOLQQHUDQGRXWHUOLIH RI WKLV VRFLHW\ ZKLFK LV WKHUHIRUH XQGHUVWRRG DV WKRURXJKO\ SRVLWLYH ZKLFK LV WR VD\ QRQOLYLQJ ,W LV RQO\ ZLWK WKH DSSHDUDQFH RI -HVXV LQ +HJHO·V WH[W WKDW D GLIIHUHQWLDWLRQ EHWZHHQ ´WKH YDULRXV NLQGV RI -HZLVK ODZVµHPHUJHVYLDKLV´UHDFWLRQWRWKHPµ+HJHO´6SLULWµ %XWDWHDFK PRPHQWRIWKLVZRUN+HJHODWWHPSWVWRUHPDLQZLWKLQRUIROORZWKHXQ GHUVWDQGLQJKHSHUFHLYHVDQGDVFULEHVWRKLVREMHFWIRU´WKH-HZLVKSHR

––––––– 

+HJHO·VHDUO\WKRXJKWFDQHDVLO\EHDVVLJQHGQHLWKHUWRWKH.DQWLDQQRUWKH+HUGHULDQSROH RISKLORVRSKLFDODQWKURSRORJ\+HUHKHHPSOR\VWKHODQJXDJHRIWKHKXPDQUDFHDQGVSH FLHV0HQVFKHQJHVFKOHFKW DORQJVLGHWKDWRIVSLULWDQGSHRSOH9RON 



%HQ'DZVRQ

SOHµDQGWKHUHIRUHIRUWKHWH[WKHUH´UHOLJLRXVPRUDODQGFLYLOODZVZHUH DOOHTXDOO\SRVLWLYHµLELG &OHDUO\SUDFWLFDOUDWKHUWKDQWKHRUHWLFDOUHDVRQ LVSULPDU\IRU+HJHOLQWKLVZRUN%HIHKO@ 2Q *RG WKH -HZV DUH GHSHQGHQW WKURXJKRXW DQG WKDW RQ ZKLFK D PDQ GHSHQGVFDQQRWKDYHWKHIRUPRIWUXWKµ+HJHO´6SLULWµ  $V WUDQVFHQGHQWDO IRUPDOLVP DQG DEVWUDFW PRUDOLW\ .DQWLDQLVP PD\ EH JOLPSVHG DV HDUO\ DV 1RDK·V JHVWXUH RI VHWWLQJ D ´WKRXJKWSURGXFHG LGHDOµ*RGRUWKH/DZRYHUDQGDJDLQVWQDWXUHLQFOLQDWLRQVDQGGHVLUHV  $V %HUQVWHLQ H[SODLQV ´+HJHO LQWHUSUHWV ELEOLFDO -XGDLVP DV WKH FRPLQJ WREHRIWUDQVFHQGHQWDOLGHDOLVPDVDIRUPRIOLIHRUZKDWLVWKHVDPHKH LQWHUSUHWV-XGDLVPDVWKHJHQHDORJLFDORULJLQRI:HVWHUQUHDVRQLQLWVIXQ GDPHQWDO3ODWRQLFDQG.DQWLDQGLVSHQVDWLRQµ%HUQVWHLQ´/RYHDQG/DZµ  %HUQVWHLQ·VVXPPDU\DSWO\SRLQWVWRWKHDPELJXRXVLGHQWLW\RIDOOH JRULFDO FULWLTXH DQG JHQHDORJLFDO QDUUDWLYH WKDW LV FUXFLDO WR WKH ´6SLULWµ HVVD\·V LQVLJKW DQG RULJLQDOLW\ +HJHO·V QDUUDWLRQ RI WKH SURFHVV WKURXJK ZKLFKKXPDQLW\DOLHQDWHGLWVHOIGUDZLQJDFXUWDLQEHWZHHQLWVHOIDQGWKH ZRUOGDOOHJRULFDOO\UHFRQVWUXFWVWKHWUDQVFHQGHQWDOHSLVWHPRORJ\LQZKLFK KXPDQLW\·V LQWLPDWH DQG LPPHGLDWH UHODWLRQVKLS ZLWK QDWXUH LV EURNHQ «@$EUDKDPFDPHLQWRD PHGLDWHUHODWLRQZLWKWKHZRUOGWKHRQO\NLQGRIOLQNZLWKWKHZRUOGSRV VLEOHIRUKLPµ ,IRULJLQDOLPPHGLDF\ZDVEURNHQE\QDWXUHLWPLJKW KDYHEHHQUHWULHYHGWKURXJKORYH%XW´$EUDKDPZDQWHGQRWWRORYHZDQ WHGWREHIUHHE\QRWORYLQJµ  +HJHO LPDJLQHV .DQWLDQ PRUDOLW\ DV OLNHZLVH SUHPLVHG RQ D IRUP RI DXWRQRP\WKDWLVLQWUXWK´DQREHGLHQFHZLWKRXWMR\ZLWKRXWSOHDVXUHRU ORYHµ   VXFK PRUDOLW\ KH SUHVHQWV DV VHOILQFXUUHG LQKXPDQLW\ DQG VHUYLWXGH :KHQ KH ZULWHV RI -HVXV·V RSSRVLWLRQ WR -XGDLF ODZ +HJHO·V VWUHVV IDOOV RQ WKHSULPDF\RI QHHG DQG WKH SRZHU WR FKRRVHWRVDWLVI\D

–––––––  

%OLQGQHVVDQGYDFXLW\ZLOOEHGLVFXVVHGLQWKHWKLUGDQGILQDOVHFWLRQRIWKLVHVVD\ 7KH 3KHQRPHQRORJ\ KRZHYHU UHYHDOV WKDW DW DQ\ WLPH WKH LPPHGLDWH REMHFWLYH FRQWH[W RI UHODWLRQVKLSVKDELWVDQGFXVWRPVHWF RQO\VHHPVJLYHQDQGQRWPDGH,WLVRQHRIWKHSXU SRVHVRIWKDWZRUNWRGHPRQVWUDWHV\VWHPDWLFDOO\WKDWERWKWKHFRPPXQDOZRUOGDQGVHOI FRQVFLRXVQHVV DUH D KLVWRULFDO DFKLHYHPHQW )RU WKH V\VWHPDWLF UHDGLQJ RI WKLV WH[W VHH +DUULV+HJHO·V/DGGHU

:RUOGPDNLQJDV)DWH





QHHGZKLFKLQ.DQW·VWHUPVVHWVSDWKRORJLFDOLQWHUHVWVDQGWKHDJHQF\RI :LOONU RYHU WKH PRUDO ODZ DQG WKH DXWRQRPRXV :LOOH -HVXV SURIDQHV 0RVDLF/DZE\LQKLVYDULRXVDFWLRQVIRUHJRLQJ´QRWHYHQWKHVDWLVIDFWLRQ RI D ZKLP >HLQH :LOONU@ RI D YHU\ RUGLQDU\ QHHGµ  +RZHYHU IURP WKHFDSULFHZLWKZKLFK-HVXVIRULQVWDQFH´GHVHFUDWHVWKH6DEEDWKµ+HJHO LQWHUSUHWVQRWDUHDGLQHVVWRSURIDQH-HZLVKVDQFWLWLHVLQPRPHQWVRIQHHG -HVXV·VVWDWHGUHDVRQ EXWUDWKHUDPXFKPRUHJHQHUDOUHQXQFLDWLRQDQG ZLWKGUDZDO´IURPWKHZKROHOLIHRIKLVSHRSOHµ  ,Q5HOLJLRQ:LWKLQWKH%RXQGDULHVRI0HUH5HDVRQ WKHWH[WWRZKLFK +HJHO·V´6SLULWµHVVD\PRVWLPPHGLDWHO\UHVSRQGV.DQWKDGKLPVHOIFRP SOLFDWHGWKHUHODWLRQVEHWZHHQIUHHGRPODZDQGWKHSRZHURIFKRLFH+H KDG GRQH VR E\ PDNLQJ WKH ODWWHU :LOONU  UHVSRQVLEOH IRU GHFLGLQJ WKH ´VXEMHFWLYH ILUVW JURXQGµ RI WKH KXPDQ VSHFLHV· PRUDO FKDUDFWHU ,W ZDV RQO\WKH´ILUVWDFWµRIWKLVIUHHSRZHURIFKRLFH.DQWFRQVLGHUHGZKLFK FRXOG KDYH PDGH HYLO UDGLFDO DQG UDGLFDOO\ LPSXWDEOH ´1RWKLQJ LV >«@ PRUDOO\ LH LPSXWDEO\  HYLO EXW WKDW ZKLFK LV RXU RZQ GHHGµ .DQW 5HOLJLRQ 7KHUDGLFDOSURSHQVLW\WRHYLOLVWKHUHIRUHD´GHHGµDQDFWRU IDFWXPLWLVWKHIRXQGDWLRQDOFKRLFHQRWDQGWKHUHIRUHQHYHU WRDGRSWWKH ODZDVWKHVXSUHPHPD[LPRIWKHZLOO ,QWKLV.DQWFDQEHXQGHUVWRRGWR KDYHDGGUHVVHGWKHFULWLFLVPQRWDEO\5HLQKROG·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¶QDWXUH· QRW ¶PRUDOLW\· EXW KHUH .DQW DGGHG D VXSSOHPHQWDU\ PRPHQW LQ ZKLFK WKURXJK DQ DFW DOEHLW LQVFUXWDEOH WR RXU XQGHUVWDQGLQJ WKH HYLO KXPDQ EHLQJ IUHHO\ FKRVH DQ LQQDWH LQFDSDFLW\ WR DFFHSW WKH PRUDO ODZ DV WKH VROH GHWHUPLQDWLRQ RI PD[LPV7KDWLVWKH´QDWXUDOSURSHQVLW\WRHYLOµRIWKHKXPDQVSHFLHVLV DOZD\VDOUHDG\´PRUDOO\HYLOµ >7KH@ QDWXUDO SURSHQVLW\ WR HYLO >«@ LV PRUDOO\ HYLO VLQFH LW PXVW XOWLPDWHO\ EH VRXJKWLQDIUHHSRZHURIFKRLFHDQGKHQFHLVLPSXWDEOH7KLVHYLOLVUDGLFDOVLQFH LWFRUUXSWVWKHJURXQGRIDOOPD[LPVDVDQDWXUDOSURSHQVLW\LWLVDOVRQRWWREH

––––––– 

,Q KLV &ULWLTXH RI 3UDFWLFDO 5HDVRQ .DQW H[SODLQV WKDW´IUHHGRP DQG XQFRQGLWLRQDO SUDFWLFDO ODZUHFLSURFDOO\UHIHUWRHDFKRWKHUµ.DQW&ULWLTXH ´>2@QHZRXOGQHYHUKDYHFRQVLG HUHGWKHGDULQJGHHGRILQWURGXFLQJIUHHGRPLQWRVFLHQFHKDGQRWWKHPRUDOODZDQGZLWK LWSUDFWLFDOUHDVRQFRPHLQDQGWKUXVWWKLVFRQFHSWXSRQXVµ 



%HQ'DZVRQ

H[WLUSDWHG WKURXJK KXPDQ IRUFHV >«@ RQWKH0RXQW@GRHVQRWWHDFKUHYHUHQFHIRUWKHODZVRQWKHFRQ WUDU\LWH[KLELWVWKDWZKLFKIXOILOVWKHODZEXWDQQXOVLWDVODZDQGVRLVVRPHWKLQJ KLJKHUWKDQREHGLHQFHWRODZDQGPDNHVODZVXSHUIOXRXV6LQFHWKHFRPPDQGVRI GXW\SUHVXSSRVHDFOHDYDJH>EHWZHHQUHDVRQDQGLQFOLQDWLRQ@DQGVLQFHWKHGRPL QDWLRQRIWKHFRQFHSWGHFODUHVLWVHOILQD¶WKRXVKDOW·WKDWZKLFKLVUDLVHGDERYH WKLVFOHDYDJHLVE\FRQWUDVWDQ¶LV·DPRGLILFDWLRQRIOLIH>«@+HJHO´6SLULWµ 

7KHVXEODWLRQRIODZLQORYHWKHWRWDOFRUUHVSRQGHQFHRIGXW\DQGGHVLUH  FRPSOHWHVWKHPDWWHURIWKHODZE\VWULSSLQJLWRILWVOHJDOIRUP/RYHLV UDLVHG DERYH WKH RSSRVLWLRQ EHWZHHQ XQLYHUVDO DQG SDUWLFXODU EHFRPLQJ DQLPPHGLDWHPRGLILFDWLRQRIOLIH,QFRQWUDVWWRWKHGXWLIXOIUHHGRPFRP PDQGHGDQGHQDEOHGE\WKHPRUDOODZZKLFKUHPDLQVLQWKHDQWLQRPLFDO UHDOPRIRXJKWWKLVORYLQJOLYLQJRUDHVWKHWLFIUHHGRPLV

–––––––  ´3ROLWLFDOHPDQFLSDWLRQ>«@LVQRWLQGHHGWKHILQDOIRUPRIKXPDQHPDQFLSDWLRQEXWLWLV WKHILQDOIRUPRIKXPDQHPDQFLSDWLRQZLWKLQWKHIUDPHZRUNRIWKHSUHYDLOLQJVRFLDORUGHU ,WJRHVZLWKRXWVD\LQJKHUHWKDWZHDUHVSHDNLQJRIUHDOSUDFWLFDOHPDQFLSDWLRQµ0DU[  6HH0DU[·VFULWLFLVPRI$UWLFOHRIWKH'HFODUDWLRQRIWKH5LJKWVRI0DQDQGRIWKH&LWL]HQ ´/DOLEHUWpHVWOHSRXYRLUTXLDSSDUWLHQWjO·KRPPHGHIDLUHWRXWFHTXLQHQXLWSDVDX[GUR LWVG·DXWUXLµ>´/LEHUW\LVWKHSRZHUZKLFKPDQKDVWRGRHYHU\WKLQJZKLFKGRHVQRWKDUP WKHULJKWVRIRWKHUVµ@7RZKLFK0DU[UHVSRQGV´7KLVLQGLYLGXDOOLEHUW\DQGLWVDSSOLFDWLRQ >LHWKHULJKWRISURSHUW\@IRUPWKHEDVLVRIFLYLOVRFLHW\,WOHDGVHYHU\PDQWRVHHLQRWKHU PHQQRWWKHUHDOL]DWLRQEXWUDWKHUWKHOLPLWDWLRQRIKLVRZQOLEHUW\µ0DU[ 7KHFRQWLQXL WLHVEHWZHHQ-HVXV·VSURIDQDWLRQVXEODWLRQRI0RVDLF/DZ+HJHO·VFULWLTXHRI.DQWLDQPR UDOLW\ DQG 0DU[·V FULWLTXH RI WKH ERXUJHRLV FRQFHSW RI IUHHGRP DV OLPLWHG UDWKHU WKDQ FRQVWLWXWHGE\RWKHUVHQVKULQHGLQWKH5LJKWVRI0DQDSSHDUSURIRXQG



%HQ'DZVRQ

%H\RQGDOOLWV6FKLOOHULDQDQG5RPDQWLFIHDWXUHV+HJHO·VWKRXJKWKHUH LVSHUIHFWO\LQOLQHZLWKDORQJ&KULVWLDQDQWL-HZLVKDQWLOHJDOLVWWUDGLWLRQ RI DQQXOOLQJ DQG IXOILOOLQJ WKH GLFWDWHV RI ODZ ZLWK DQ HWKLFV RI ORYH DQG OLIH$WZKLFKSRLQWWKHQLIDQ\GRHV+HJHOLDQWKRXJKWFHDVHWRSHUSHWX DWH DQG DFFODLP WKLV ´UHLJQ RI DQWLGRJPDWLF GRJPDWLFVµ WR ERUURZ /HJHQGUH "2QHZD\RIDSSURDFKLQJWKLVTXHVWLRQKDVEHHQRSHQHG E\$JDPEHQ·VVXJJHVWLRQZKLFKSLFNVXS6FKPLWW·VIDPRXVFODLPUHJDUG LQJPRGHUQSROLWLFDOFRQFHSWVWKDW´DOORI>+HJHOLDQWKRXJKW·V@GHWHUPLQ LQJFRQFHSWVµEHJLQQLQJZLWKWKHUHODWLRQEHWZHHQ$XIKHEXQJDQGNDWDUJHLQ ¶GHDFWLYDWLRQ· DUH´PRUHRUOHVVFRQVFLRXVLQWHUSUHWDWLRQVDQGVHFXODUL]D WLRQV RI PHVVLDQLF WKHPHVµ $JDPEHQ   ,Q 7KH 7LPH WKDW 5HPDLQV $JDPEHQ XQFRYHUV LQ 3DXO·V PHVVLDQLVP DQ DSRUHWLF FULWLTXH RI WKH ODZ WKDWLVLUUHGXFLEOHWRWKHDQWLQRPLDOWUDGLWLRQZLWKZKLFKKLVQDPHLVDVVR FLDWHG,I$JDPEHQZKRGRHVQRWKDYH+HJHO·VHDUO\VRFDOOHGWKHRORJL FDOZULWLQJVLQPLQGKHUHSRLQWVWRWKHVHGLPHQWHGPHVVLDQLFFRQWHQWVRI WKH GLDOHFWLFDO SKLORVRSK\ DV D ZKROH WKLV HVVD\ E\ FRQWUDVW KRSHV WR EULQJRXWWKHUHOHYDQFHRIWKHIRUP+HJHO·VZULWLQJEHJDQWRWDNHDVWKH GLDOHFWLFHPHUJHGDVWKHPHGLXPRIKLVWKRXJKW ,W ZDV E\ IRUPXODWLQJ KLV FULWLTXH RI .DQW LQ WKH DOOHJRULFDO JHQHDORJLFDO IRUP RI WKH ´6SLULWµ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·V UHDGLQJ RI .DQW GHYHORSV DQG FRPHV WR OLIH DV KH EHJLQV WR UHZULWH WKH ORJLFDOWUDMHFWRU\RI.DQW·VPRUDOSKLORVRSK\DVDSKHQRPHQRORJ\RIWKH LQGLYLGXDODFWRIWUHVSDVV6SHFLILFDOO\+HJHOFDQEHVHHQKHUHUHKHDUVLQJ ¶DQWKURSRORJLFDOO\·WKHWZLVWVDQGWXUQVRI5HOLJLRQFXOPLQDWLQJLQWKHORVV RIIUHHGRP·VXOWLPDWHFRPSUHKHQVLELOLW\DQGWKHVXEVHTXHQWQHHGIRURU IDOO WR  VXSHUQDWXUDO JUDFH +HJHO·V UHSUHVHQWDWLRQ RI WUHVSDVV LQ PDQ\ UHVSHFWVUHVHPEOHVZKDWLQKLV5HOLJLRQ.DQWKDGIRUPXODWHGDVWKH´LQWHO OLJLEOH GHHGµ )RU +HJHO KRZHYHU DQG WKLV LV FUXFLDO WKH ILUVW DFW WKH

–––––––  ´7KHPHVVLDQLFODZLVWKHODZRIIDLWKDQGQRWMXVWWKHQHJDWLRQRIODZ7KLVKRZHYHUGRHV QRWPHDQVXEVWLWXWLQJWKHROGPLVZRWK>OHJDOSUHFHSWV+HEUHZ @ZLWKQHZSUHFHSWVUDWKHULW PHDQVVHWWLQJDQRQQRUPDWLYHILJXUHRIWKHODZDJDLQVWWKHQRUPDWLYHILJXUHRIWKHODZµ $JDPEHQ 

:RUOGPDNLQJDV)DWH





DUELWUDU\ FULPH RI WKH SRZHU RI FKRLFH GRHV QRW WDNH SODFH QRXPHQDOO\ 2Q WKH FRQWUDU\ LW RFFXUV HQWLUHO\ ´ZLWKLQ WKH RUELW RI OLIHµ +HJHO ´6SLULWµ DVKHVD\V,WLVWKXVWKDWWKHSRVVLELOLW\RIUHFRQFLOLDWLRQLV SRVVLEOHIRUDZRUOGWKDWOLHWKLQHYLO³LQWKHWHUPV.DQWWRRNIURP-RKQ·V *RVSHO³ZLWKRXWWKHVXSSOHPHQWDWLRQRIPRUDOHIIRUWE\JUDFH,QVWHDGRI JUDFH DQG EH\RQG DQ\ SXQLVKPHQW LQIOLFWHG RQ WKHERG\ RIWKH FULPLQDO E\SHQDOMXVWLFH+HJHOSRLQWVWRIDWHRUPRUHSUHFLVHO\WRWKHSHUVSHFWLYH RIIDWH7KDW+HJHOUHSHDWHGO\UHIHUVWRIDWHDVDSHUVSHFWLYHLQGLFDWHVLWLV D ZD\ RI UHSUHVHQWLQJ ZKDW KDSSHQV %XW WKLV UHSUHVHQWDWLRQ RI HYHQWV SDUDGLJPDWLFDOO\LQWUHVSDVVDQGSXQLVKPHQW UHYHDOVDGHHSHUDFWXDOLW\RI OLIHEH\RQGRUEHQHDWKGLVWLQFWLRQVRIVXEMHFWLYLW\IURPREMHFWLYLW\QDWXUH IURPWKHVRFLDO)DWHLVWKHUHSUHVHQWDWLRQWKHQRIZKDW´RXWUDQNVµLELG  DOOUHSUHVHQWDWLRQQDPHO\DFWLRQDQGWKHPRGLILFDWLRQVRIOLIH)URPWKH YLWDODQGZKROO\LPPDQHQWSHUVSHFWLYHRIIDWHVXEVWDQFHLVIXQFWLRQDOOWKH ZD\GRZQ )DWH FRPHV RQ WKH VFHQH ZKHQHYHU DQ LQGLYLGXDO RU D SHRSOH EUHDN ZKDW +HJHO FDOOV ´XQLWHG OLIHµ  ³WKH IXQGDPHQWDO FRQQHFWLRQ EH WZHHQ KXPDQLW\ DQG QDWXUH HQFRPSDVVLQJ WKHVHQVH RI VHOI IRXQG FRP PXQDOO\ LQ DQG WKURXJK HDFK RWKHU ZLWK ZKRP WKH LQGLYLGXDO OLYHV LQ EHDXWLIXOXQLRQ6XFKIXQGDPHQWDOLPPDQHQFHIXQFWLRQVKHUHLQSODFHRI WKH DEVROXWH DV WKH VSHFXODWLYH SRVVLELOLW\ HQDEOLQJ +HJHO·V QDUUDWLYH FUL WLTXHWRJHWXQGHUZD\ 2QO\WKURXJKDGHSDUWXUHIURPXQLWHGOLIHZKLFKLVQHLWKHUUHJXODWHGE\ODZQRU DWYDULDQFHZLWKODZRQO\WKURXJKWKHNLOOLQJRIOLIHLVVRPHWKLQJDOLHQSURGXFHG 'HVWUXFWLRQRIOLIHLVQRWWKHQXOOLILFDWLRQRIOLIHEXWLWVGLUHPSWLRQDQGWKLVGH VWUXFWLRQ FRQVLVWV LQ LWV WUDQVIRUPDWLRQ LQWR DQ HQHP\ >«@ 7KH WUHVSDVVHU LQ WHQGHGWRKDYH>GRQH@ZLWKDQRWKHU·VOLIHEXWKHKDVRQO\GHVWUR\HGKLVRZQIRU OLIHLVQRWGLIIHUHQWIURPOLIHVLQFHOLIHGZHOOVLQWKHVLQJOH*RGKHDG,QKLVDUUR JDQFHKHKDVGHVWUR\HGLQGHHGEXWRQO\WKHIULHQGOLQHVVRIOLIHKHKDVSHUYHUWHG OLIHLQWRDQHQHP\,ELG 

7KH DFWLRQ LQ ZKLFK DQ LQGLYLGXDO GHQLHV DQRWKHU WKHLU ULJKWV RU OLIH RU IUHHGRP LQ LWVHOI VHYHUV IUHHGRP DQG FKRRVHV OLIHOHVV VHUYLWXGH (YHU\ WUHVSDVV KDV VRPHWKLQJ RI $EUDKDP·V ´ILUVW DFWµ WR LW ´D GLVVHYHUDQFH ZKLFKVQDSVWKHERQGVRIFRPPXQDOOLIHDQGORYHµ DWWKHVDPHWLPH WKDWLWUHVHPEOHV.DQW·V´LQWHOOLJLEOHGHHGµWKHJURXQGFRQVWLWXWLQJ´ILUVW DFWµRIWKHSRZHURIFKRLFH7KHWUHVSDVVHUVSOLWVKLVRUKHUZLOOIURPWKDW

–––––––  0XFK RI WKH FRPSOH[LW\ RI WKLV LGHD LV FRQGHQVHG LQ +HJHO·V XVH RI ¶DV· RI ZKLFK WKH H[HPSODU\LQVWDQFHLV´SXQLVKPHQWDVIDWHµ´6SLULWµ 7KHSKLORVRSKLFDOLPSOLFDWLRQV RIWKLV¶DV·DUHREOLTXHO\WKHVXEMHFWRIWKHSUHVHQWLQTXLU\)RUVRPHLQGLFDWLRQVDVWRKRZ +HJHO·VXVDJHPLJKW EH DSSURDFKHGPRUH GLUHFWO\ IRU LQVWDQFH LQUHODWLRQ WR WKH.DQWLDQ ´DVLIµVHH$JDPEHQ·VGLVFXVVLRQRIWKH3DXOLQH´DVQRWµ$JDPEHQII 



%HQ'DZVRQ

RI WKH FRPPXQLW\ DQG WKHUHE\ GHVWUR\V FRPPXQLW\ DQG WKH OLYLQJ IUHH GRP LW DOORZV IRU KLPKHUVHOI ,W LV ZLWK WKLV ORJLF WKDW +HJHO EHJLQV KLV HODERUDWLRQRIWKHFRQFHSWRIIDWH³WKHUHWURDFWLYLW\RIWKHLQGLYLGXDODFW RI WUHVSDVV WKH UHWXUQ RI WKDW QDWXUH RU OLIH ZKLFK VHOIOHJLVODWLYH LQGH SHQGHQFHUHSUHVVHV$QGLWLVKHUHDERYHDOOWKDWKLVJHQHDORJLFDOUHDGLQJ EHFRPHVDGLDOHFWLFDODQGSKHQRPHQDOLVLQJUHVWDJLQJRI.DQW ´7UHVSDVVµ+HJHOZULWHV´LVDGHVWUXFWLRQRIQDWXUHDQGVLQFHQDWXUH LV RQH WKHUH LV DV PXFK GHVWUXFWLRQ LQ ZKDW GHVWUR\V DV LQ ZKDW LV GHV WUR\HGµ   7KLV XQLW\ VLJQDOV WKH XOWLPDWH RU ¶DEVROXWH·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´FOLQJV WR KLV WUHVSDVVµ +HJHO ´6SLULWµ  )URP WKLV SHUVSHFWLYH KRZHYHUUHFRQFLOLDWLRQRIWKHIRUPDQGFRQWHQWRIWKHODZDQGRIXQL YHUVDO DQG SDUWLFXODU LQ OLIH  LV LPSRVVLEOH $IWHU SXQLVKPHQW WKH ´ODZ ZLWKGUDZVWRDWKUHDWHQLQJDWWLWXGHLWKDVQRWORVWLWVVKDSH>LHDXQLYHUVDO RSSRVHGWRWKHLQGLYLGXDO@RUEHHQPDGHIULHQGO\µ 2QWKHLQGLYLG XDO·V VLGH D IDPLOLDU FRQGLWLRQ KDV HPHUJHG )RU KLV ´EDG FRQVFLHQFHµ SXQLVKPHQW DOWHUV QRWKLQJ ´WKH WUHVSDVVHU DOZD\V VHHV KLPVHOI DV D WUHV SDVVHURYHUKLVDFWLRQDVDUHDOLW\KHKDVQRSRZHU>LHKHFDQQRWXQGR WKHWUHVSDVV@DQGWKLVKLVUHDOLW\LVLQFRQWUDGLFWLRQZLWKKLVFRQVFLRXVQHVV RIWKHODZµLELG $OOWKDWUHPDLQV+HJHOZULWHVLVDQXQEHDUDEOHGLVTXLHW $QJVW  UDGLFDO HYLO WRJHWKHU ZLWK D VWLOO FDWHJRULFDO \HW QRZ XQVDWLVILDEOH

:RUOGPDNLQJDV)DWH





PRUDOLPSHUDWLYH$QG´IURPWKHWHUULI\LQJUHDOLW\RIHYLODQGWKHLPPXWD ELOLW\RIWKHODZKHFDQIO\WRJUDFHDORQHµLELG  +RZHYHU DVVXJJHVWHGWKHUH LV DQRWKHU SHUVSHFWLYH IURP ZKLFK WKLV SXQLVKPHQWFDQEHUHSUHVHQWHG7KLVSHUVSHFWLYH+HJHOGHVFULEHVDVIDWH DQG´IDWHVRIDUDVUHFRQFLODELOLW\LVFRQFHUQHGKDVWKLVDGYDQWDJHRI>RU RYHU@ WKH SHQDO ODZ WKDW LWRFFXUV ZLWKLQ WKH RUELWRI OLIHµ   ,Q WKLV OLJKWWKHWUHVSDVVHUFDQQRWXOWLPDWHO\EHXQGHUVWRRGWRKDYHSRVHGKLVZLOO DJDLQVWWKHXQLYHUVDOLW\RIDQ\H[LVWLQJODZEHFDXVHSULRUWRWKHWUHVSDVV WKHUH ZDV QR ODZ SULRUWR WKH WUHVSDVV WKH XQLYHUVDO ZDV WKH FRPPXQDO ERQGVRIORYHDQGOLIH,QWKH´WUHVSDVVRIWKHPDQUHJDUGHGDVWKHWRLOVRI IDWHµWKHUHZDVSULRUWRKLVDFW´QRFOHDYDJHQRRSSRVLWLRQPXFKOHVV PDVWHU\µ +HQFH´>R@QO\WKURXJKDGHSDUWXUHIURPXQLWHGOLIHZKLFK LVQHLWKHUUHJXODWHGE\ODZQRUDWYDULDQFHZLWKODZRQO\WKURXJKWKHNLOO LQJRIOLIHLVVRPHWKLQJDOLHQ>LHWKHODZ@SURGXFHGµ 5HSUHVHQWHGDV IDWH´>L@WLVWKHGHHGLWVHOIZKLFKKDVFUHDWHGDODZZKRVHGRPLQDWLRQQRZ FRPHVRQWKHVFHQHµ² $QGZLWKWKLVUHFRJQLWLRQRIWKH´KRVWLOH SRZHUDVWKHSRZHURIOLIHPDGHKRVWLOHµ WKHSRVVLELOLW\RIUHFRQ FLOLDWLRQDQGDUHWXUQWRXQLW\DQGIUHHGRPUHRSHQV )URP WKH .DQWLDQ-XGDLF SHUVSHFWLYH RI ODZ WKH WUHVSDVVHU LV D SDU WLFXODURSSRVHGWRWKHXQLYHUVDODQGVLQFHWKHDFWRIWUHVSDVVFRQWUDGLFWV WKH XQLYHUVDOLW\ RI WKH ODZ WKH ODZ PXVW DQQXO WKDW FRQWUDGLFWLRQ ´WKH EXQJOLQJ DFKLHYHPHQW RI WKH WUHVSDVVµ E\ GRPLQDWLQJ SXQLVKLQJ DQG VXEVXPLQJWKHLQGLYLGXDO)URPWKHSHUVSHFWLYHRIIDWHRQWKHRWKHUKDQG LWZDVWKHGHHGLWVHOIWKDWFUHDWHGODZFUHDWHGWKDWRSSRVLQJXQLYHUVDOLW\ ,QWKHFDVHRISXQLVKPHQWDVIDWH>«@WKHODZLVODWHUWKDQOLIHDQGLVRXWUDQNHG E\LW7KHUHWKHODZLVRQO\WKH ODFNRIOLIHGHIHFWLYHOLIHDSSHDULQJDVDSRZHU $QGOLIHFDQKHDOLWVZRXQGVDJDLQWKHVHYHUHGKRVWLOHOLIHFDQUHWXUQLQWRLWVHOI DJDLQ DQG DQQXO WKH EXQJOLQJ DFKLHYHPHQW RI D WUHVSDVV FDQ DQQXO WKH ODZ DQG SXQLVKPHQW+HJHO´6SLULWµ 

)DWH EHORQJV DQG LWV UHSUHVHQWDWLRQUHIHUV WR D GLPHQVLRQ DW ZKLFK XQL YHUVDO DQG WKH SDUWLFXODU DUH LQVHSDUDEOH LWV KRVWLOLW\ WR WKH WUHVSDVVHU LV QRWIHOWDVDQDXWKRULW\ZKROO\DOLHQWRKLPDVDSDUWLFXODU%RWKDUHLQD VHQVHLQGLYLGXDOV³WKHWUHVSDVVHUDQGKLVIDWH³DQGIDWHLVWKHUHIRUHMXVW ´WKH HQHP\µ ZKLFK WKH WUHVSDVVHU PHHWV RQ HTXDO IRRWLQJ DV ´D SRZHU ILJKWLQJDJDLQVWLWµ )URPWKLVSHUVSHFWLYHWKHGLUHPSWLRQRIOLIHLV QRW DEVROXWH DQG WKH FKRLFH RI XQIUHHGRP LV WKHUHIRUH QHLWKHU WLPHOHVV QRULQQHHGRIUHGHPSWLRQE\VXSHUQDWXUDOJUDFH$VVXFKQHLWKHULPPRU WDOLW\ QRU D GLYLQH LQWHUYHQWLRQ JLYLQJ KXPDQLW\ EDFN IUHHGRP DQG WKH QDWXUDO FDSDFLW\ WR VDWLVI\ WKH PRUDO ODZ DUH UHTXLUHG 5DWKHU IURP WKH SHUVSHFWLYH RI IDWH D GLVVROXWLRQ RI WKH FRQFHSW RI ODZ LWVHOI DSSHDUV WR



%HQ'DZVRQ

EHFRPHSRVVLEOH,WLVWKLVGLVVROXWLRQWKDWUHFRQVWLWXWHVDOLYLQJIUHHGRP UDLVHGDERYHLQGLYLGXDOLVWVHOIGHWHUPLQDWLRQRUDEVWUDFWVHOIOHJLVODWLRQ 7KH IDWH LQ ZKLFK PDQ VHQVHV ZKDW KDV EHHQ ORVW FUHDWHV D ORQJLQJ IRU WKH ORVW OLIH7KLVORQJLQJLIZHDUHWRVSHDNRIEHWWHULQJDQGEHLQJEHWWHUHG>LH.DQW·V FRQFHSWV RI DQ LQILQLWH SURJUHVVLRQ WRZDUGV WKH JRRG VXSSOHPHQWHG E\ GLYLQH JUDFH@PD\LQLWVHOIEHFDOOHGDEHWWHULQJEHFDXVHVLQFHLWLVDVHQVHRIWKHORVVRI OLIHLWUHFRJQLVHVZKDWKDVEHHQORVWDVOLIHDVZKDWZDVRQFHLWVIULHQGDQGWKLV UHFRJQLWLRQLVDOUHDG\DQHQMR\PHQWRIOLIH,ELG 

7KXVWKURXJKKLVFRPPLWPHQWWROLIH·VIXQGDPHQWDOXQLW\+HJHOLVDEOH WR SRVLW EH\RQG RU EHQHDWK SHQDO MXVWLFH ´SXQLVKPHQW DV IDWHµ )RU +HJHO WKH WUHVSDVVHU LV FDSDEOH RI UHFRJQLVLQJ WKDW LQ EUHDNLQJ IURP XQLWHGOLIHDQGLQMXULQJDQRWKHUGHQ\LQJDQRWKHUWKHLUULJKWVDQGIUHHGRP KHKDVLQMXUHGKLPVHOIIRUIHLWHGKLVRZQ7KHWUHVSDVVHUKDVSHUYHUWHGWKH FRPPXQLW\RIOLIHLQWRDQHQHP\ZKLFKQRZDSSHDUVKRVWLOHWRKLP%XW WKHODZRUHPSW\XQLYHUVDOLW\´FORWKHGZLWKPLJKWµ LVDWWKHGHHSHVW OHYHODQHQHP\KHKLPVHOIKDVDUPHG,Q+HJHO·VQDUUDWLRQWKHVWUXFWXUHRI .DQW·VUDGLFDOHYLOUHFXUVVDYHWKDWKHUHLQWKHDEVHQFHRIDQ\QRXPHQDO GHHG HYHU\WKLQJ UHPDLQV LPPDQHQW WR WKH DFW RI WUHVSDVV $QG IRU WKLV UHDVRQLQ´SXQLVKPHQWDVIDWHµ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

,Q.DQWLDQWHUPV+HJHOILQGVKRSHLQWKHILQLWHEHLQJ·VUHFRJQLWLRQRIWKH WUDQVFHQGHQWDOGHHGWKURXJKZKLFKKHRUVKHIUHHO\FKRVHERQGDJH+HUH KRZHYHU HYHU\WKLQJ LV LQWHUQDO WR OLIH WKH WUDQVFHQGHQWDO GHHG LV D VHOI DOLHQDWLRQ LQ ZKLFK OLIH LV VSOLW LQWR XQLYHUVDO DQG SDUWLFXODU VHWWLQJ WKH LQGLYLGXDO DW RGGV ZLWK WKH LQILQLWH XQLYHUVDOLW\ WKDW LV WKH QRZ KRVWLOH IRUP RI OLIH ´4X·XQH FHUWDLQH RGHXU VRLW SDU H[HPSOH WRXMRXUVGDQVXQWULDQJOHXQHDXWUHGDQVXQFDUUp>«@(OOHFURLUDVHQWLU XQH ILJXUH GDQV XQH RGHXU HW WRXFKHU XQH RGHXU GDQV XQH ILJXUHµ ´/D URVH GLIIqUH GH O·±LOOHW SDUFH TX·HOOH D WHOOH IRUPH WHO WLVVXµ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·V7KH2UGHU RI 7KLQJV VSDQV IURP WKH JUDPPDWLFDO WUHDWLHV RI 3RUW5R\DO DQG WKH PDWKHPDWLFDOZRUOGV\VWHPVRI/HLEQL]E\ZD\RIWKHJHRJUDSKLFDOPDSV RIWKHH[SORUHUVDQGWKHWDEXODWLRQVRIWKHQHZVWDWLVWLFDOVFLHQFHVWRWKH WDEOHDX[ pFRQRPLTXHV RI 4XHVQD\ DQG WKH ERWDQLFDO V\VWHPV RI /LQQp $QG ILQDOO\DV)RXFDXOWXQGHUOLQHVVHYHUDOWLPHV7D[RQRP\GRHVQRWSUHFOXGH FRPPXQLFDWLRQLWRUGHUVWKHZRUOGWKXVSURYLGLQJWKHPHGLXPWKURXJK ZKLFK WKH WUDQVIHU RI LQIRUPDWLRQ RI UHSUHVHQWDWLRQV RI WKH ZRUOG PD\ WDNH SODFH 7KHVH UHSUHVHQWDWLRQV DUH LQ &RQGLOODF·V DQDORJ\ QHLWKHU OLQ JXLVWLFQRUJHRPHWULFDOLQDVWULFWPDWKHPDWLFDOVHQVHEXWDUHQHYHUWKHOHVV RI D JHQHUDO FKDUDFWHU DQG KDYH WKH QDWXUH RI VLJQV 7KXV VHQVDWLRQV DUH WXUQHG LQWR REMHFWV WKDW FDQ EH UHSUHVHQWHG RUJDQLVHG DQG LQ WKH HQG WUDQVIHUUHGDQGVHWLQWRFLUFXODWLRQ ,QIRUPDWLRQLVWKXVWKHUHVXOWRIDVHULHVRIRSHUDWLRQVEHJLQQLQJZLWK VHQVDWLRQ7KHILUVWVWHSFRQVLVWVRIVHQVDWLRQVWKDWDUHZLWKUHJDUGWRWKH LQGLYLGXDO IRUP RI SHUFHSWLRQ GLIIHUHQWLDWHG V\VWHPDWLVHG DQG RUGHUHG LQWR VHULHV ´6LQJOH FKDQQHOµ LQIRUPDWLRQ LV MX[WDSRVHG WR DQG FRPSDUHG ZLWKLQIRUPDWLRQVWHPPLQJIURPRWKHUFKDQQHOVWKXVE\WKHDFWRIUHIOHF WLRQ SURGXFLQJ DEVWUDFW LGHDV PHQWDO UHSUHVHQWDWLRQV WR DEVWUDFW LV IRU &RQGLOODFWRVHSDUDWHRQHLGHDIURPVHYHUDORWKHUVWKDWHQWHUZLWKLWLQD FRPSRVLWH ZKROH.QRZOHGJH LV WKH SURGXFW RI UHSHDWHG DEVWUDFWLRQV OHDGLQJWRKDELWVDQGJHQHUDOLGHDV7KHUHSHWLWLRQRUVHULDOQDWXUHRIVHQVH LPSUHVVLRQV LV WKH FRQGLWLRQ RI WKH SRVVLELOLW\ RI UHFRJQLVLQJ DQ REMHFW

5HPDUNVRQWKH+LVWRULFLW\RIWKH0HGLD&RQFHSW



WXUQLQJ SHUFHSWLRQ LQWR FRJQLWLRQ &RJQLWLRQ LV WKXV EDVHG RQ KDELWV LQ RWKHUZRUGVDXWRPDWHGFRJQLWLYHSURFHVVHVVHHLQJDQGMXGJLQJDUHGRQH VLPXOWDQHRXVO\DQGDUHFRQIXVHG &RQGLOODF·VHPSKDVLVRQWKHDXWRPDWLRQRIFRJQLWLRQLVZRUWKGZHOO LQJXSRQDVKHH[SUHVVO\FRQVLGHUVLWRQHRISKLORVRSK\·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·VPHQWDOSURFHVVHVGRHV LQ IDFW SRLQW WRZDUGV DQ REYLRXV DQDORJ\ WKH VWDWXH LV DQDORJRXV WR DQ DXWRPDWRQ DQ DQGURLGVHWLQWR PRYHPHQW E\ LWV PDNHU LW LV D FRPSOH[ PDFKLQH IRU UHJLVWHULQJ UHFRUGLQJ DQG HYHQ LQ SULQFLSOH GLVWULEXWLQJ LQIRUPDWLRQ DERXW WKH ZRUOG :KDW ZH DUH FRQIURQWHG ZLWK LV DQ HQWLW\ WKDW LV UHFHSWLYH DQG SURJUDPPDEOH DW WKH VDPH WLPH D NLQG RI RUJDQLF PHFKDQLVPFRQWUROOHGE\H[WHUQDOVWLPXOLDQGZLWKUHVSRQVHV $XWRPDWRQVDQG$XWRPDWLRQ &RQGLOODF·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·VGHIHQGHUVRIWKHQRWLRQRIWKHPHFKDQLF QDWXUHRIOLYLQJRUJDQLVPV+RZHYHUWKHDQGURLG·VUHODWLRQWRSKLORVRSK\ JRHVEDFNDFHQWXU\WRDUHPDUNLQWKH'LVFRXUVHRQWKH0HWKRG ZKHUH 'HVFDUWHVQRWHVWKDWDQLPDOVPXVWEHFRQVLGHUHGDXWRPDWRQVDVWKHWZR FDQQRWEHGLVWLQJXLVKHGIURPHDFKRWKHU'HVFDUWHVHODERUDWHVKLVLGHDVRQ ODErWHPDFKLQHZKHQKHVWUHVVHVWKDWLQSULQFLSOHLWZRXOGEHSRVVLEOHWKDW DXWRPDWD PLJKW EH VR FOHYHUO\ GHVLJQHG WKDW WKH\ FRXOG QRW EH GLVFULPL QDWHG IURP D OLYLQJ RUJDQLVP $QLPDOV DUH FRPSOH[ RUJDQLF PDFKLQHV WKXV VXVFHSWLEOH WR PHFKDQLVWLF H[SODQDWLRQ )URP D &DUWHVLDQ SRLQW RI



.QXW2YH(OLDVVHQ

YLHZWKHUHLVZLWKUHJDUGWRSK\VLFDODFWLYLWLHVQRDEVROXWHFULWHULRQVHSD UDWLQJWKHDQLPDWHVXEMHFWIURPWKHDQLPDWHGREMHFW 7KHPHFKDQLVHGSXSSHWVRIWKHHLJKWHHQWKFHQWXU\VXUSDVVHGWKRVHRI WKHSUHYLRXVFHQWXU\ZLWKVNLOOVWKDWZHUHQRWRQO\DVWRQLVKLQJEXWLQIDFW TXLWH FRQYLQFLQJ 7KH WKUHH IDPRXV DQGURLGV PDGH E\ IDWKHU DQG VRQ 'UR]³WKH SLDQR SOD\HU WKH GUDXJKWVPDQ DQG WKH VFULEH³ZHUH DEOH WR SOD\GUDZDQGZULWH7KHVFULEHUHSRUWHGO\HYHQWRRNGLFWDWLRQ9DXFDQ VRQ·V IDPRXV IOXWLVW FRPELQHG PHFKDQLFV DQG SQHXPDWLFV ZLWK VXFK VRSKLVWLFDWLRQWKDWKLVIOXWHFRXOGEHH[FKDQJHGZLWKDQ\RWKHUIOXWHDQG WKH SXSSHW ZRXOG VWLOO SURGXFH WKH PRVW EHDXWLIXO PXVLF :HOONQRZQ LV DOVR 9DXFDQVRQ·V GXFN WKDW QRW RQO\ IODSSHG LWV ZLQJV DQG TXDFNHG EXW DOVR DWH DQG GHIHFDWHG +RZHYHU WKH PRVW IDPRXV LV SUREDEO\ 9DUJDV .HPSHOHQ·VFKHVVSOD\HUZKLFKWRXUHGWKHFRXUWVRI(XURSHIRUGHFDGHV YLUWXDOO\DFRXQWHUSDUWWRWKHPRGHUQPHGLDHYHQWDQGOLNH9DXFDQVRQ·V DQG 'UR]·V GROOV DQ HOHPHQW LQ WKH SURSDJDQGD RI WKH QHZ UDWLRQDOLW\ KHUDOGHG E\ WKH VSRNHVPHQ RI WKH (QOLJKWHQPHQW 7KH LPSRUWDQFH RI WKHVH SXSSHWV DW OHDVW LQ WKLV FRQWH[W OLHV QRW LQ WKH REYLRXV WHQVLRQV EHWZHHQWKHUDWLRQDOLVPRIWKHPHFKDQLVWLFZRUOGYLHZWKH\LOOXVWUDWHGDQG WKHHOHPHQWVRIWULFNHU\RULOOXVLRQLVPLQYROYHGLQWKHVXFFHVVIXOSUHVHQWD WLRQ DQG VWDJLQJ RI WKH GROOV ZHOONQRZQIURP .HPSHOHQ·V FKHVV SOD\HU DQG 9DXFDQVRQ·V GXFN  EXW UDWKHU LQ WKH SKDQWDVPDJRULFDO RU HYHQ XWR SLDQGLPHQVLRQRIWKHDQGURLG9DXFDQVRQZDVUHSXWHGIRUKLVDPELWLRQ WR EXLOG D PRYLQJ DQG WDONLQJ PHFKDQLFDO PDQ 7KH UHSUHVHQWDWLYHV RI ZKDW -RQDWKDQ ,VUDHO KDV UHFHQWO\ FDOOHG ´5DGLFDO (QOLJKWHQPHQWµ VXE VFULEHG PRUH RU OHVV ZKROO\ WR 6SLQR]D·V IDPRXV GHILQLWLRQ RI PDQ DV D VSLULWXDO DXWRPDWRQ DXWRPDWD VSLULWXDOH  $QG HYHQ WKH PRUH PRGHUDWH /HLEQL] VWDWHV LQ 7KH 0RQDGRORJ\   WKDW ´WKH RUJDQLF ERG\ RI HDFK OLYLQJEHLQJLVDNLQGRIGLYLQHPDFKLQHRUQDWXUDODXWRPDWRQµSDUDJUDSK   9DXFDQVRQ³ZKRLVRQHRIWKHLQYHQWRUVRIWKHSXQFKFDUGDQGZKR WKXVKHOSHGSDYHWKHZD\IRU%DEEDJH³ZDVQRWWKHRQO\RQHSOD\LQJZLWK WKHLGHDRIPDNLQJDJHQXLQHDXWRPDWHGLQGLYLGXDO+RZHYHUWKHUHLVWRD PRGHUQREVHUYHUDUHPDUNDEOHDEVHQFHRIDQ\XQFDQQ\GLPHQVLRQVLQWKH HLJKWHHQWKFHQWXU\·VDQGURLGV7KH\DUHDIDUFU\IURP+RIIPDQ·VRU6KHO OH\·V 5RPDQWLF WURXEOLQJ DQG WURXEOHG PRQVWHUV ´:KDW ILQHVVH LQ WKH GHWDLOV:KDWJUDFHGRHVQRWLWVPHFKDQLVPKDYHLQDOOLWVGHWDLOVµ'HQLV 'LGHURWH[FODLPVLQDGPLUDWLRQRI9DXFDQVRQ·VPHFKDQLFDOPLUDFOHVLQWKH (QF\FORSHGLDDUWLFOH´$QGURwGHµ $QGLQKLVQRYHO-DFTXHVOHIDWDOLVWHHW VRQPDvWUHWKHLGHDRIWKHQDWXUDODXWRPDWRQLVH[SOLFLWO\FHOHEUDWHGDQGEH FRPHV DQ HPEOHP IRU WKH FDXVDO UHODWLRQVKLSV WKDW JRYHUQ RUJDQLF DQG SV\FKRORJLFDOOLIH7KHQDUUDWRUDQGWKHQRYHO·VWZRFHQWUDOFKDUDFWHUVDUH UHIHUUHG WR DV DXWRPDWRQV WKURXJKRXW WKH WH[W WKH IRUPHU FRPSODLQLQJ

5HPDUNVRQWKH+LVWRULFLW\RIWKH0HGLD&RQFHSW



WKDWWKHUHDGHUWUHDWVKLPOLNHDQDXWRPDWRQZKLOHERWKWKHPDVWHUDQGKLV VHUYDQW-DFTXHVDFWDVLIWKH\DUHSUHSURJUDPPHGRQQXPHURXVRFFDVLRQV 7KHLUDXWRPDWHGEHKDYLRXULVLQOLQHZLWKWKHPDWHULDOLVWLFSKLORVRSK\RI WKHWLPHDVLWLVIRUPXODWHGIRULQVWDQFHLQ'LGHURW·VRZQ3HQVpHVSKLORVR SKLTXHV ´7KHZRUOGLVTXLWHVLPSO\DPDFKLQHZLWKZKHHOVURSHV EORFNVDQGWDFNOHVVSULQJVDQGZHLJKWVµP\WUDQVODWLRQ  &RQGLOODF·VKXPDQRLGVWDWXHLVWKXVYHU\PXFKLQDFFRUGDQFHZLWKWKH HLJKWHHQWK FHQWXU\ DQWKURSRORJ\ ,WV NLQVKLS WR RQH RI WKH HUD·V PRVW SRSXODUP\WKV3\JPDOLRQLVREYLRXV/LNHLWVPRUHIDPRXVP\WKRORJLFDO SUHGHFHVVRU&RQGLOODF·VVWDWXHLVVHWLQWRPRYHPHQWDQGLWVDQLPDWLRQLVD IXQFWLRQRILWVDQLPD7KHFUXFLDOPRPHQWLQ&RQGLOODF·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



.QXW2YH(OLDVVHQ

WKXV LQIOXHQFH WKH H[SHULPHQWDO ZRUOG LQ VHYHUDO ZD\V2Q WKH RQH KDQG WKH\ SURYLGH WKH VWDQGDUGV RI KRZ WKH ZRUOG VKRXOG EH SHUFHLYHG WKH\ UHSURGXFH UHDOLW\ WUXWKIXOO\ REMHFWLYHO\ ZLWKRXW WKH LQWHUIHUHQFH RI DQ\ LQWHUSUHWLQJ RU HUULQJ KXPDQ DJHQW WKHUHE\ WKH\ KHOS VROLGLI\ D QHZ UH JLPH RI HSLVWHPRORJLFDO UHDOLVP³WKH LGHD WKDW WKH ZRUOG LV RXW WKHUH REMHFWLILHG DQG REMHFWLILDEOH GLYLGHG LQ GLVFUHWH HQWLWLHV DOZD\V DOUHDG\ WKHUHDZDLWLQJLWVPHDVXULQJ³DVZHOODVSURYLQJWKHIODZVRIWKHVHQVRULDO DSSDUDWXV WKXV LQ D GRXEOH RSHUDWLRQ ERWK HVWDEOLVKLQJ WKH IDFWXDO DQG REMHFWLYHZRUOGRIWKLQJVDQGWKHSKHQRPHQRORJLFDODQGVXEMHFWLYHZRUOG RIH[SHULHQFH2QWKHRWKHUKDQGPHGLDDOVRIRUPDWWKHZRUOGRIH[SHUL HQFH³QRWPHUHO\DVDFWLQJDVSURVWKHVHVEXWDOVRUHILJXULQJDQGUHIXQF WLRQDOLVLQJRXUSHUFHSWXDOVFKHPDWD )RU WKH HSLVWHPRORJ\ RI WKH QLQHWHHQWKFHQWXU\ PHGLD UHJLPH WKH ZRUOGLVDJLYHQIRUWKHHLJKWHHQWKFHQWXU\WKHZRUOGLVDSURGXFW:KDW 'HVFDUWHV·V0RO\QHX[·V'LGHURW·VDQG+HUGHU·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·V XQGHUVWDQGLQJ RI WKH VHYHQWHHQWK DQG WKH HLJKWHHQWKFHQWXU\NH\HSLVWHPRORJLFDOFRQFHSWUHSUHVHQWDWLRQ2IFRXUVH WKHWHUPPHGLDWLRQDVFRQFHSWXDOLVHGEH5p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·V PRVW GHYHORSHG WRROIRUZRUOGPDNLQJ

5HIHUHQFHV %DFRQ)UDQFLV7KH$GYDQFHPHQWRI/HDUQLQJ(G6WHSKHQ-D\*RXOG1HZ«@,QWKHHQGXELFRPSFUHDWHGDQHZILHOGRIFRP SXWHUVFLHQFHRQHWKDWVSHFXODWHGRQDSK\VLFDOZRUOGULFKO\DQGLQYLVLEO\LQWHU ZRYHQZLWKVHQVRUVDFWXDWRUVGLVSOD\VDQGFRPSXWDWLRQDOHOHPHQWVHPEHGGHG VHDPOHVVO\LQWKHHYHU\GD\REMHFWVRIRXUOLYHVDQGFRQQHFWHGWKURXJKDFRQWLQX RXVQHWZRUN>«@>:H@KDYHEHJXQWRVSHDNRIFDOPFRPSXWLQJDVWKHJRDOGH VFULELQJ WKH GHVLUHG VWDWH RI PLQG RI WKH XVHU DV RSSRVHG WR WKH KDUGZDUH FRQILJXUDWLRQRIWKHFRPSXWHU-XVWDVDJRRGZHOOEDODQFHGKDPPHU·GLVDSSHDUV· LQWKHKDQGVRIDFDUSHQWHUDQGDOORZVKLPRUKHUWRFRQFHQWUDWHRQWKHELJSLF WXUHZHKRSHWKDWFRPSXWHUVFDQSDUWLFLSDWHLQDVLPLODUPDJLFGLVDSSHDULQJDFW :HLVHU*ROGDQG%URZQ 

%OXU%XLOGLQJDVDQDXJPHQWDWLRQRIWKHZRUOGLQYROYLQJ¶FDOP·XELTXLWRXV FRPSXWLQJSHUIRUPVDQHQWLUHVHULHVRIVXFKPRUHRUOHVVFRPSOHWHGLV DSSHDULQJDFWVDZKROHIORFNRIPRYHVWRZDUGVDPRUHRUOHVVSXUHLP PDQHQFH ZKLFK RXU PRGHV RI HPERGLPHQW DQG VHQVH PHHW DV VR PDQ\ YDULDQWVRIDYDJXHQHVVWKDWFRPHVWRVHHPLUUHGXFLEOH

–––––––  ,UHIHULQGLUHFWO\WR¶WKHERG\·DQG¶HPERGLPHQW·ZLWKDYLHZWRWKHGLVWLQFWLRQEHWZHHQ WKHVHZKLFK.DWKHULQH+D\OHVGHSOR\V7KDWLV¶WKHERG\·ZRXOGUHIHUWRDQDEVWUDFWJHQ HUDOLVLQJDQGQRUPDWLYHFRQFHSWZKLFKJUDVSVWKHERG\DVDFXOWXUDOFRQVWUXFWZKLOH¶HP ERGLPHQW· ZRXOG LQGLFDWH DQ LQGLYLGXDO·V XQLTXH H[SHULHQFHV RI HPERGLPHQW DV DQ H[SHULHQFHOLYHGIURPWKHLQVLGH³LQFOXGLQJWKHHQWLUHVSDQIURPRQH·VRZQVHQVDWLRQVDQG DIIHFWV WR·WH[WXUHV RI OLIH· RQ GLIIHUHQW ELRORJLFDO DQG SK\VLFDO SODQHV 6HH +D\OHV ´)OHVK DQG0HWDOµ²,UHPDLQLQWHUHVWHGLQWKHLQYHVWLJDWLRQRIGLVWLQFWLRQVWRGD\DPRQJ  RXUH[SHULHQFH(UIDKUXQJ RIDJHQHUDOLVLQJDQGQRUPDWLYHO\WUHQGVHWWLQJGHVLJQRIWKH



8OULN(NPDQ

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´'LVSOD\(QJLQHHUVµ 

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´WKHQRELOLW\RIVLJKWµ +HQFHZKDWLVDWVWDNHKHUHLVQRWVRPXFK\HWDQRWKHUKDLOLQJRIYL VLRQDVWKHPRVWH[FHOOHQWVHQVHQRUWKHSXUVXLWRIWKHRULDDVWKHQREOHVW DFWLYLW\RIWKHPLQG³WUDGLWLRQDOO\GHVFULEHGSULPDULO\LQPHWDSKRUVWDNHQ IURPWKHYLVXDOGRPDLQ5DWKHULWLQYROYHVDFHUWDLQH[SHULPHQWDWLRQZLWK WKHVXSSRUWVRUVXSSOHPHQWVRIYLVLRQLHZLWKWKHRWKHUVHQVHVVHQVD WLRQLQJHQHUDODVZHOODV´WKHPRUHYXOJDUPRGHVRIFRPPHUFHZLWKWKH LPSRUWXQLW\ RI WKLQJVµ -RQDV   7R WKDW H[WHQW DXJPHQWHG ZRUOGLQJ FDQQRW EXW EOXU WKH WKUHHPDLQ FKDUDFWHULVWLFV RI WKH LPDJHSHUIRUPDQFH XQLTXH WR VLJKW %OXU %XLOGLQJ UHVLVWV KDYLQJ LWV SUHVHQWDWLRQ RI D VHQVDWH

–––––––

ERG\ RXUOLYHGH[SHULHQFHV(UOHEQLV RIHPERGLPHQWDQG VLQJXODUO\OLYLQJHPERGL PHQW DQG LWV FRQWLQJHQWO\ SRVVLEOH LQWHUODFLQJ ZLWK LQ KXPDQ FRPSOH[LW\ DQG RWKHUQHVV VSHFLILFDOO\ UHVSHFWLQJ LPSOLFDWLRQV DQG UDPLILFDWLRQV PDNLQJ WKHPVHOYHV IHOW DORQJ ZLWK 'LOOHU 6FRILGLR·VSURMHFWWRZDUGVDZRUOGLQJRIPL[HGRUDXJPHQWHGUHDOLWLHV

,UUHGXFLEOH9DJXHQHVV



PDQLIROG\LHOGWRVLPXOWDQHLW\WKHFDXVDOLW\RIVHQVHDIIHFWLRQLQVLVWVRQLWV QRQQHXWUDOLW\DQGLWZLOOUHPDLQGLIILFXOWLIQRWLPSRVVLEOHWRDFKLHYHD SURSHUREMHFWLI\LQJGLVWDQFHLQWKHVSDWLDODQGFRJQLWLYHPHQWDOVHQVHV,Q RWKHUZRUGV'LOOHU 6FRILGLR·VFRXQWHUVWUDWHJ\YHU\PXFKEULQJVYLVLRQ WR D GLIIHUHQW VRUW RI DWWHQWLRQ LQ WKH SURFHVV PDNLQJ IHOW WKH RWKHUZLVH IRUJRWWHQRUVXSSUHVVHGEXWDOOWKHPRUHRULJLQDU\QHHGIRUFRPSOHPHQ WDWLRQ IURP WKH RWKHU VHQVHV DQG IURP WKH PRWLOLW\ RI RXU ERGLHV LQ WKH SUDFWLFDO VSKHUH RI LQWHUDFWLRQ -RQDV   7KXV EOXUULQJ KHUH LPSOLHV D PRYHPHQWWRZDUGVHPERGLHGSHUIRUPDWLYLW\DQGWKHIRUFHVDWSOD\ZLWKLQ GLIIHUHQWLDWHGDQGGLVWULEXWHGVHQVDWLRQ 0RUH VSHFLILFDOO\ %OXU %XLOGLQJ ZDV RI ¶WKH HQG RI WKH ZRUOG· RQ DQ\ JHQHUDO JUDQG VFDOH RI YLHZLQJ VLQFH LW ZHQW IDU ZLWK LWV WUDQVLPPDQHQW UHVLVWDQFHWREHFRPLQJSDUWRIWRXULVPDVGRPLQDWHGE\VSHFWDFXODUVLJKWV DQG DWWUDFWLRQV DQ RIILFLDO VHW RI VFHQLF YLHZV LPDJH H[SHFWDWLRQV TXD ¶JRRG·SKRWRRSSRUWXQLWLHVDQGE\DFHUWDLQVFRSLFFRQWUROJUDQWHGWRWKH ¶VLJKWVHHU· 'LOOHU DQG 6FRILGLR ´6XLWFDVH 6WXGLHVµ II  7KLV DUWLIDFWXDO DUFKLWHFWXUDOLQVWDOODWLRQUHIXVHGEHLQJSULPDULO\DYLVXDOFXOWXUHREMHFWIRU FRQVXPSWLRQLQWKHH[SHULHQFHHFRQRP\RIWRGD\MXVWDVLWSUREOHPDWLVHG LQTXLWHLURQLFZD\VDQ\*RG·VRUHDJOHH\HYLHZRIWKHZRUOGIURPDERYH $VWKHDUFKLWHFWVWKHPVHOYHVKDGLWLQDQLQWHUYLHZ :HNQHZULJKWDZD\WKDWZHZDQWHGWRXVHWKHWRXULVWLFVHWWLQJDVDIRLO:HUH DOL]HGZHFRXOGXVHWKHODNHZDWHUWRSUREOHPDWL]HYLVLRQWRJHWLQWKHZD\RIWKH ODNHYLHZ:HDOVRZDQWHGWRSURGXFHDQDQWLKHURLFDUFKLWHFWXUHLQWKHIRUPRID VSHFLDO HIIHFW DQ DWPRVSKHUH ,W ZDV D UHDFWLRQ WR WKH QHZ RUWKRGR[\ RI KLJK GHILQLWLRQ DQG VLPXODWLRQ WHFKQRORJLHV :H ZDQWHG WR FUHDWH D ORZGHILQLWLRQ VSDFHDEOXU%HWVN\ 

,IWKHUHLVDQ\YLHZRIWKHZRUOGLQYROYHGLQWKLVORILZRUOGVSDFLQJSDU WDNLQJRIDFOHDUYLVLRQRIWKHVHQVHRIWKHZRUOGWKLVLVPLQLPLVHGSODFH ZLVH DQG UHPDLQV D GHOD\HG DQG GHIHUUHG HSLSKHQRPHQRQ QDPHO\ ZKDW WDNHVSODFHRQ¶WKH$QJHO'HFN·KRYHULQJTXLWHXQFHUWDLQO\DERYHWKHPRUH SULPDU\H[WHQVLYHDQGFKDRWLFDOO\G\QDPLFPLVWFORXGVGRZQKHUHZKLFK DOOLQKDELWDQWVRIWKLVIX]]\DXJPHQWHGZRUOGPXVWWUDYHUVHILUVWDQGODVW 'LOOHU  6FRILGLR·V DOWHUQDWLYH HQJDJHPHQW ZLWK WKH FRPPRGLILFDWLRQ RI YLVLRQE\JOREDOLVHGWRXULVPPLJKWZHOOOHDGRQHWRVXVSHFWWKDW%OXU%XLOG LQJFRQFUHWLVHGDVWURQJYHUVLRQRIWKDW´SURIRXQGVXVSLFLRQRIYLVLRQDQG LWV KHJHPRQLF UROH LQ WKH PRGHUQ HUDµ -D\   ZKLFK 0DUWLQ -D\ KDV

–––––––  1RWH(GZDUG'LPHQGEHUJ·VFKDUDFWHULVDWLRQRI'LOOHU 6FRILGLRVWUHVVLQJDVNH\LQWKHLU LQVWDOODWLRQV WKHLU VWDWXV DV HPERGLHG FRQFHSWXDO DUW ´>«@ LQ ZKLFK YLVLWRUV ¶SHUIRUP·WKH LQVWDOODWLRQWKURXJKWKHLUERGLO\QHJRWLDWLRQRILWVVSDFHDQGWKHLUYDU\LQJLQWHOOHFWXDODQG HPRWLRQDOUHVSRQVHVWRLWµ'LPHQGEHUJ²HVS 



8OULN(NPDQ

WUDFHG ZLWK D FHUWDLQ GLVDSSURYDO LQ UHFHQW )UHQFK WKRXJKW RQO\ WR FRXQWHU VXFK DQWLRFXODUFHQWULVP ZLWK DQ XQUHSHQWDQW UHVXVFLWDWLRQ RI HQOLJKWHQHGFODULILFDWLRQ2QWKDWDSSURDFK%OXU%XLOGLQJZRXOGEHRI¶WKH HQGRIWKHZRUOG·WRWKHH[WHQWWKDWLWVLPSO\DQGVWULFWO\UHIXVHGDQ\FHU WDLQ VWDEOH DQG YLVXDO GRPHVWLFDWLRQ RI ZRUOG VSDFH DV ERWK LQKHUHQWO\ PHDQLQJIXO DQG FODULILDEOH WR WKH SRLQW RI KDYLQJ OLJKW RU HQOLJKWHQPHQW HUDGLFDWHDOOUHPQDQWVRIREVFXUHPHWDSKRULFDOWH[WXUH+RZHYHULGHQWLI\ LQJLQWKLVSURMHFWRQO\DSXUH´GHQLJUDWLRQRIYLVLRQµUHPDLQVWRRUHGXF WLYHDVGRHVDQLQYHUVHPRYHPHQWWRZDUGVDQDOWRJHWKHUOLYHPHWDSKRURI WKHVXQLHZKDW-DFTXHV'HUULGDUHWUDFHVDVWKHFLUFOHRIWKHKHOLRWURSH ZKRVH SHUYDVLYH GD]]OLQJ OLJKW ZKHWKHU LGHDO RU D TXHVWLRQ RI OXPHQ QDWXUDOH  DOOHJHGO\ LOOXPLQDWHV HYHU\WKLQJ 'HUULGD ´:KLWH 0\WKRORJ\µ ² +HUHWKHEOXUULQJRI:HOWELOGDQGYLVLRQLVQHLWKHUDPDWWHURID IDOOLQWRVWULFWEOLQGQHVVQRURIDQXQZDUUDQWHGFHOHEUDWLRQRIDQDFFLGHQ WDOREVFXULW\WKDWLVWREHUHPRYHGE\WKHUHWXUQRIRUWRUDGLDQWHQOLJKW HQPHQW 5DWKHU 'LOOHU  6FRILGLR·V SURMHFW SXUVXHV ZKDW PRYHV GLIIHUHQWO\ZLWKLQYLVLRQDQGLWVLOOXPLQDWLQJLPDJHSHUIRUPDQFHZKDWKDV SUHVHQFLQJGLVDSSHDULQLWVRZQUDGLDQFHRUWKHLQGHILQLWHVHOIHUDVXUHRI OLJKWWKDWSHUPLWVLWWRFRPHDVOLJKW%OXULVDIWHUDQRWKHUVHOIHUDVXUHRU ZLWKGUDZDO RI WKH YLVLEOH RQH ZKRVH GLIIHUHQW DQG GHIHUUHG WH[WXUHV RI OLJKW WRXFK LWV ZRUOGLQKDELWDQWV LQ SUDFWLFH 3HUKDSV LQ WKDW ZD\ LW DS SUR[LPDWHV DQ DUFKLWH[WXUH ZLWKLQ DQ DUFKLWHFWXUDO SURMHFW GUDZLQJ RQ VXSSOHPHQWDU\ KDSWLF SUDFWLFHV VR DV WR WUDQVIRUP D YLVLEOH EXLOGLQJ LQWR LQKDELWDQWV· XQIROGLQJ RI ¶FULWLFDO· GHEDWH RI DQG LQWHUDFWLYH HQJDJHPHQW

–––––––  ,DPWKLQNLQJKHUHQRWOHDVWRI-D\·VVWDWHPHQW´>«@,UHPDLQXQUHSHQWDQWO\EHKROGHQWR WKHLGHDORILOOXPLQDWLRQWKDWVXJJHVWVDQ(QOLJKWHQPHQWIDLWKLQFODULI\LQJLQGLVWLQFWLGHDV >«@ , ZLOO HPSOR\ D PHWKRG WKDWXQDSRORJHWLFDOO\HPEUDFHV RQH RI WKH DQWLRFXODUFHQWULF GLVFRXUVH·V RWKHUPDMRU WDUJHWV D V\QRSWLF VXUYH\RI DQ LQWHOOHFWXDO ILHOG DW VRPH UHPRYH IURPLWµ-D\   6HH 'HUULGD ´:KLWH 0\WKRORJ\µ ² 5HVSRQGLQJ WR -D\·VUHDGLQJ RQ WKLV VFRUH RQH ZRXOGZDQWWRHPSKDVLVHWKDW'HUULGDWUDFHVWZRFRXUVHVRSHQWRDKHOLRWURSHFRQVWUXFWLQJ LWVGHVWUXFWLRQ2QHFRXUVHZRXOGUHPDLQFORVHWR-D\·VFDOOIRUHQOLJKWHQPHQWQHYHUFHDV LQJWRIROORZDOLQHRIUHVLVWDQFHWRWKHGLVVHPLQDWLRQRIWKHPHWDSKRULFDOLQV\QWDFWLFVDQG PHDQLQJ7KHRWKHUKRZHYHUZKLOHUHVHPEOLQJWKHILUVWWRWKHSRLQWRIEHLQJWDNHQIRULW ZLOOWUDYHUVHDQGGRXEOHLWDVLWVVXSSOHPHQWDWLRQZLWKRXWOLPLWWKXVGLVUXSWLQJWKHRSSRVL WLRQV RI WKH VHPDQWLF DQG WKH V\QWDFWLF WKH PHWDSKRULF DQG WKH SURSHU³DORQJ ZLWK WKH WUDGLWLRQDOSULYLOHJLQJRIWKHODWWHUDERYHWKHIRUPHU,QWKLVFRQWH[W%OXUUHPDLQVZLWKYL VLRQDQGLOOXPLQDWLRQEXWLVSHUKDSVPRUHHQWLFLQJLQLWVDIILUPDWLRQRIWKHKDSWLFWH[WXUHV RIOLJKWWKDWPRYHDVLPPDQHQWVHQVDWHVXSSOHPHQWVWRFOHDUVLJKWDQG:HOWELOG,DPDOOXG LQJDOVRWRWKHDWWUDFWLRQVRI&DWKU\Q9DVVHOHX·VUHDGLQJRI/XFH,ULJDUD\·VWKRXJKWRIHURWLF OLJKWDVWH[WXUH+HUHWH[WXUHZRXOGEHERWKWKHODQJXDJHDQGPDWHULDORIYLVXDOSUDFWLFHV DQLQYLVLEOHLQWHUZHDYLQJRIGLIIHUHQFHVZKLFKIRUPWKHIDEULFRIWKHYLVLEOH2QHLQWHUHVW LQJDVSHFWRIWKHWH[WXUHRIOLJKWLVWKDWLW´LPSOLFDWHVWRXFKLQYLVLRQLQZD\VWKDWFKDOOHQJH WKH WUDGLWLRQDO GLIIHUHQWLDWLRQ RI WKHVH VHQVHV ZLWKLQ WKH VHQVLEOHLQWHOOLJLEOH ELQDULVP RI SKRWRORJ\µ9DVVHOHX 

,UUHGXFLEOH9DJXHQHVV



ZLWKYLVLRQ'LOOHU 6FRILGLR·VLVWKXVDJHQWOHDQGDIILUPDWLYH¶FULWLTXH·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·VGLDJQRVLVRISRVWPRGHUQLVP DVSUHGRPLQDQWO\V\QFKURQLFDQGVSDWLDOVWDWLQJWKDWLWLVLQWKHUHDOPRI DUFKLWHFWXUH TXD OLYLQJ VSDFH WKDW PRGLILFDWLRQV RI FXOWXUDO DQG DHVWKHWLF SURGXFWLRQPDNHWKHPVHOYHVIHOWPRVWGUDPDWLFDOO\³QRWOHDVWLQWHUPVRI DSUREOHPDWLVDWLRQRIPRGHUQLVWGLVWLQFWLRQVEHWZHHQKLJKDQGORZFXOWXUH DORQJZLWKDPRUHSRSXOLVWVKDSLQJDQGVKDULQJRXWRIWKHPXOWLSOLFLWRXV VXUIDFHVRIRXUPLOLHXRUZRUOG%OXU%XLOGLQJDVDQRSHQHQGHGEHFRP LQJRIDXJPHQWHGRUPL[HGUHDOLW\QRWRQO\WDNHVRQ´WKHQHZPDFKLQHµ -DPHVRQ+DUGWDQG:HHNV WKHQHWZRUNHGFRPSXWHU RIDK\SHU VSDWLDO SRVWPRGHUQLVP RI VXUIDFHV DORQJ ZLWK WKH LPSHUDWLYH IURP QHZ DUFKLWHFWXUH´WRJURZQHZRUJDQVWRH[SDQGRXUVHQVRULXPDQGRXUERG\ WRVRPHQHZDV\HWXQLPDJLQDEOHSHUKDSVXOWLPDWHO\LPSRVVLEOHGLPHQ VLRQVµ %OXUDOVROHDSVDKHDGWRRYHUWDNHPRUHUHFHQWGHYHORSPHQWV

–––––––

 6HH 'LOOHU  6FRILGLR·V VWDWHPHQW WKDW WKH\ RSHUDWH ´>«@ ZLWK DQ XQGHUVWDQGLQJ WKDW WKH WDUJHWDQGWKHZHDSRQFDQEHWKHVDPHD¶JHQWOH·FULWLTXHRIWRXULVPIURPZLWKLQIRUWKH LQVWDOODWLRQDFFHSWVLWVRZQUROHDVWRXULVWDWWUDFWLRQµ'LOOHUDQG6FRILGLR´6XLWFDVH6WXG LHVµ²HVS   6HH-DPHVRQ



8OULN(NPDQ

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¶EOREV·RI*UHJ/\QQDQGRWKHUV0DUFXV 1RYDN·V ¶OLTXLG DUFKLWHFWXUHV· WKH ZRUN RI 12; DQG /DUV 6SUX\EURHN 1HLO/HDFK·V¶VZDUPWHFWRQLFV·$V\PSWRWH·V1HZ@ E\ KHLJKWHQLQJTXHVWLRQLQJRUIUXVWUDWLQJWKHDFWRIGLVSOD\DQGE\GRLQJWKLVZLWKLQGLVSOD\ LWVHOIµ%HWVN\²HVS   ,DPUHIHUULQJWR'DYLG1\H·VFRLQDJHRIWKLVWHUPVHH1\H:KHQUHDFWXDOLVLQJWKLV WHUP,DPDWRQHZLWK:ROIH††²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²HVS² &RPSDUH:ROIH·VUHPDUNWRWKHHIIHFWWKDW'LO OHU  6FRILGLR ´XQGHUVWDQG WKH UHODWLRQVKLS EHWZHHQ DUW WKH VXEMHFW DQG ZRUOG LQ UHVR OXWHO\SRVWKXPDQLVWWHUPV>«@WKHKXPDQDQGWKHQRQRUDQWLRUDKXPDQGRQRWH[LVWLQ IXQGDPHQWDOO\ GLVFUHWH RQWRORJLFDO UHJLVWHUV EXW³TXLWH WKH FRQWUDU\³LQKDELW WKH VDPH VSDFHLQPXWXDOUHODWLRQVRIFRLPSOLFDWLRQDQGLQVWDELOLW\7KLVERXQGDU\EUHDNGRZQWHQGV WR EH WKHPDWLVHG LQ WKHLU ZRUN LQ WKH LQWHUODFLQJ RI WKH KXPDQ DQG WKH WHFKQRORJLFDOµ :ROIH† 



8OULN(NPDQ

SXPSLQJ DQG ILOWHULQJ WKH ZDWHU 9LVLWRULQKDELWDQWV PHHW LW SULPDULO\ DW WKH HQGLQWHUIDFH DV PRUH WKDQ  VPDOO KLJKSUHVVXUH IRJ QR]]OHV SHUYDGLQJ WKH EXLOGLQJ³HQDEOHG QRW OHDVW E\ -DSDQHVH DUWLVW )XMLNR 1D ND\D ZKR LQYHQWHG WKLVIRUWKH 3HSVL3DYLOLRQ DW WKH  :RUOG )DLU LQ 2VDND$GGLWLRQDOLQIRUPDWLRQIURPWKHDUFKLWHFWVRUWKRURXJKLQYHVWLJD WLRQ RI WKH EXLOGLQJ ZRXOG GLVFORVH WKDW WKH SXPSV DUH RSHUDWHG YLD D YLUWXDO FRPSXWHULVHG FOLPDWH FRQWURO 7KLV ¶VPDUW ZHDWKHU V\VWHP·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pORVRXWVLGHWKLVZRUOGMXVWDVWKHUHLVQRORQJHUDQ\VSLULWRI

–––––––  ,DPWKLQNLQJEURDGO\KHUHRIWKHRIIWKHJULGEXLOGLQJVZKLFKQRZGHPRQVWUDWHFRPSOHWH HQHUJHWLF VHOIVXIILFLHQF\ UHFHQW ¶]HUR HQHUJ\ EXLOGLQJV· UHGXFLQJ QHW DQQXDO HQHUJ\ FRQ VXPSWLRQZKLOHSURGXFLQJH[FHVVHQHUJ\DQGVHOOLQJLWEDFNWRWKHSRZHUFRPSDQ\DVZHOO DVSDVVLYHVRODUEXLOGLQJGHVLJQUHGXFLQJHQHUJ\FRQVXPSWLRQE\WR0RUHVSH FLILFDOO\,KDYHLQPLQGWKHVWDWHPHQWIURPWKH$PHULFDQ,QVWLWXWHRI$UFKLWHFWVWKDWLP PHGLDWH DFWLRQ E\ WKH EXLOGLQJ VHFWRU LV HVVHQWLDO WR DYRLG KD]DUGRXV PDQPDGH FOLPDWH FKDQJHVLQFHKDOIRIWKHJOREDOZDUPLQJJUHHQKRXVHJDVHPLVVLRQVWRGD\FRPHIURPEXLOG LQJV³PRUHWKDQWUDQVSRUWDWLRQRULQGXVWU\6HHDOVRWKH´$UFKLWHFWXUHµSODQIRUUH GXFLQJQHZEXLOGLQJHQHUJ\FRQVXPSWLRQE\RYHUWKHQH[WWZRGHFDGHVVXEPLWWHGWR WKH2EDPDDGPLQLVWUDWLRQ

,UUHGXFLEOH9DJXHQHVV



WKHZRUOGQRUD+LVWRU\EHIRUHZKRVHWULEXQDORQHFRXOGVWDQG7KHEOXU DV ¶WKH YDJXH RSHQ· RI WKHEXLOGLQJ DV WKH IX]]\ VHQVH RI DQ DXJPHQWHG ZRUOG VXJJHVWV WKDW WKHUH LV QR ORQJHU DQ\ DVVLJQDEOH VLJQLILFDWLRQ RI ¶ZRUOG· 2U WKDW WKH ¶ZRUOG· LV ZLWKGUDZLQJ ELW E\ ELW IURP WKH HQWLUH RUGHURIFOHDUVLJQLILFDWLRQDYDLODEOHWRXVDVLWVOLYLQJWUDYHUVLQJGHVLULQJ LQKDELWDQWV ([FHSW SHUKDSV WKH QRQDVVXUHG ¶FRVPLF· VLJQLILFDWLRQ RI ZRUOG DV ¶XQLYHUVH·³DQQRXQFHG RU FDOOHG XS DV DQ LQILQLWH PLVW\ H[SDQ VLRQ $Q DXJPHQWHG ZRUOG %OXU %XLOGLQJ LV QRW D PDWWHU RI UHYHDOHG RU GLVFORVHGQRUDQQRXQFHGRUGHVLUHGPHDQLQJ ,WLVQRGRXEWFRQWLQXHGFRQVLGHUDWLRQRIWKLVFRQGLWLRQZKLFKOHDGV 0DUN%+DQVHQWRFODLPUDWKHUSRLQWHGO\WKDW'LOOHU 6FRILGLR·VSURMHFW WDNHVWKHFRQVHTXHQFHRIWRGD\·V´KLVWRULFDOO\XQSUHFHGHQWHGLQWHUSHQHWUD WLRQRIERG\DQGPHGLDµQDPHO\IROORZLQJXSRQWKHQHFHVVLW\WRGHYHORS ´D SRVWYLVXDO DIIHFWLYH SKHQRPHQRORJ\µ ´ZKDW LV DW VWDNH LQ WKH %OXU %XLOGLQJLVQRWVLPSO\D¶VHHLQJWKDWFDQQRORQJHULQWHUSUHW·EXWDZKROH VDOH VKRUWFLUFXLWLQJ RI WKH UROH RI YLVLRQ VXFK WKDWWKH DIIHFWLYH ERG\ LV OLWHUDOO\FRPSHOOHGWR¶VSDFHWKHYRLG·µ+DQVHQ² :KDWPDNHVLWVHOI IHOWDVWKHVWURQJHVWDIILUPDWLRQRIVXFKDFODLPIRUEOXUTXD´DZKROHVDOH VKRUWFLUFXLWLQJRIWKHUROHRIYLVLRQµZKRVHOLWHUDOIRUFHVRSHUDWHEHIRUH RU EH\RQG LQVLJKW LV SHUKDSV IRXQG UDWKHU GHHSO\ HPEHGGHG ZLWKLQ WKH FRQVWUXFWLRQVPHQWLRQHGDERYHWKHV\VWHPRIZHDUDEOHFRPSXWLQJDV\HW DQRWKHUFOXVWHURIFRPSXWHUVDQH[WHQVLYHZLUHOHVVQHWZRUNZLWKWUDFNLQJ FDSDFLW\ GLVWULEXWHG DFURVVWKH EXLOGLQJ 9LVLWRUV PHHWWKLVV\VWHP DW WKH ODNHVKRUHLQDWZRIROGPDQQHU3DUWO\DVDSHUVRQDOSUHIHUHQFHVTXHVWLRQ QDLUH WR EH ILOOHG RXW DW WKH ORJLQ VWDWLRQ7KLV LV VFDQQHG DQG VHQW WR D KLGGHQ FHQWUDOFRPSXWHUZKLFKLQWHUSUHWVWKHLQIRUPDWLRQVXSSOLHGLQWR DVRFLDOSURILOH7KHVHSURILOHVDUHWKHQGRZQORDGHGLQWRWKHZLUHOHVVGH YLFHV LQ ZDWHUSURRI ¶EUDLQFRDWV· 7KDW LV DV D VHFRQG FRPSRQHQW RI WKH ZLUHOHVVV\VWHP¶ZHDUDEOHFRPSXWLQJ·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



8OULN(NPDQ

FHUWDLQ PRGLFXP RI YLVLELOLW\ LV UHWDLQHG ZKHQ VLJKW LV GHSOR\HG RQ WKH PRUHRUOHVVIRJJ\GHFNVZKHQWKHQXPHURXV/('SRVWVDQGWKHLUFRO RXUHGGLVSOD\VLQVWDOOHGDVSDUWRIWKHV\VWHPRIZHDUDEOHVVHQGRIIWKHLU EOLQNLQJVLJQDOVDQGZKHQWKHEUDLQFRDWVRSHUDWHWKHLUYLVXDOLQWHUIDFHLQ UHG DQG JUHHQ FRORXULVDWLRQV )LQDOO\ WKH H[SHULHQWDO SDVVDJH WKURXJK OLQJXLVWLF RU GLVFXUVLYH VLJQLILFDWLRQ WRZDUGV WKH OLWHUDO IRUFH RI PL[LQJ ZLWK DOWHULW\ LQ DXJPHQWDWLRQ PLJKW ZHOO EH WDNHQWR UHPDLQ FRPSOH[ WR WKH SRLQW RI EHLQJ LQILQLWHO\ H[WHQGDEOH +HQFH JHQHUDOO\ VSHDNLQJ WKH ¶SRVWYLVXDOLW\·DWVWDNHLIWKHUHLVDQ\VHHPVWRVROLFLWDGLIIHUHQWLQWHUQDO ZRUNLQJWKURXJK RI LPDJHSHUIRUPDQFH DQG WKH YLVLEOH³E\ ZD\ RI WKH YDULRXV LPPDQHQW PRGHV RI EOXUULQJ YLVLRQ HQFRXQWHUHG LQ WKLV SURMHFW 0RYLQJ FDUHIXOO\ RQ WKLV SDWK RQH FRXOG EHJLQ WR DSSURDFK EOXUULQJ YLD ERWKWKHYLVLEOHDQGWKHDXGLWRU\VSKHUHVRIKDSWLFVVRDVWRWUDFHKRZ%OXU %XLOGLQJ LV SHUKDSV QRW LPPHGLDWHO\ RI D OLWHUDO IRUFH EH\RQG VHQVH EXW UDWKHU UHPDLQV ¶OLDEOH WR VHQVH·³LQVRIDU DV LW WRXFKHV XV ERWK YLD KDSWLF YLVLRQ DQG YLD DQ DXGLWRU\ DPELHQFH RU DWPRVSKHUH 6WLPPXQJ  EHIRUH RU EH\RQGDZRUOGYLHZTXDGHILQLWHFRJQLWLYHPDS/HLWELOG  $VUHJDUGVEOXUUHGYLVLELOLW\H[SHULHQFHGLQWKHPRGHRIKDSWLFYLVLRQ RQH ZRXOG LQVLVW WKDW LQVRIDU DV LW WRXFKHV XV IURP WKH RXWVLGH LQVLGH JOREDO YLVXDO FXOWXUH DQG LWV LPDJHZRUOG %OXU LV QRW IRUFLQJ XV RXWVLGH VHQVHZLWKRXWIXUWKHUDGREXWUHPDLQV¶OLDEOHWRVHQVH·DVLWH[SRVHVXVWR ZRUOGLQJDVRXU LQILQLWHILQLWXGHOHWWLQJXVH[LVWRQWKHFRQWRXUVDWWKH VHQVDWH OLPLW RI WKH ZRUOG RI VHQVH ,W NHHSV OHDGLQJ XV WR WKLV OLPLW ,W DWWUDFWVXVWRZDUGZKDWGUDZVWKHFRQWRXUVRIWKHZRUOGDVVHQVHE\LQWH JUDWLQJ DVHW RI RULJLQDULO\ RU VXUSULVLQJO\ LQYHQWLYH FXOWXUDOWHFKQRORJLFDO H[SHULPHQWV LQ LQWHUDFWLYH SUDFWLFH ,W LV WKHVH H[SHULPHQWV ZKLFK XQGHU WDNH DQ LPPDQHQW WUDQVIRUPDWLRQ RI YLVXDOLW\ GLVSODFLQJ FODULW\ RI VLJKW DQGVHQVH³KHUHWRZDUGVDKDSWLFYLVLRQLQWKHILUVWSODFH2QHPLJKWVD\ WKDWLQWHUPVRIOLJKWLQJWKHG\QDPLFVRIWKHPLVWFORXGWKHPXOWLWXGHRI /(' GLVSOD\V DQG WKH HQWLUH YDJXHO\ JUDGHG VSHFWUXP RI UHG DQG JUHHQ HPLVVLRQVIURPDOOWKHEUDLQFRDWVZRUQKDYHYHUVLRQVRIDQHZ(J\SWULVH XSLQ'LOOHU 6FRILGLR·VSURMHFWKDSWLFVSDFHVFRPSRVHGLQXQLTXHZD\V RIFRORXUDQGE\FRORXUMX[WDSRVHVRPDQ\SXUHWRQHVRQIODWVXUIDFHV 7KHVHKDSWLFVSDFHVVROLFLWDSURSHUO\KDSWLFIXQFWLRQLQJRIWKHH\HFDSD EOHRIGHDOLQJZLWKWKH¶VHQVH·RIFRORXUVQRWSULPDULO\LQWKHUHSUHVHQWD WLRQDOPDQQHUUHODWLQJWRGHSWKFRQWRXURUUHOLHILQDQLGHDOWDFWLOHRSWLFDO VSDFHQRULQDSXUHO\PDQXDOVSDFHZKHUHWRXFKLVVWULFWO\VXSHURUGLQDWH WR WKH H\H 5DWKHU WKH VHQVH RI %OXU TXD KDSWLF VSDFH LPSOLHV DQ LQ EHWZHHQ ¶VHHLQJ· D QRQRSWLFDO FORVHXS UK\WKP RI YLHZLQJ ZKRVH VHQVH

–––––––  0\XVDJHRI´KDSWLFYLVLRQµUHIHUVRIFRXUVHWR*LOOHV'HOHX]H·VUHWKLQNLQJRIWKLVDVSHFW RI$ORLV5LHJO·VZRUNVHH'HOHX]H)UDQFLV%DFRQII 

,UUHGXFLEOH9DJXHQHVV



RI VLJKW EHKDYHV MXVW OLNH WKH VHQVH RI WRXFK DQG JHQHUDWHV DQ LQYHQWLYH H[SHULHQFHZKHUHIRUPDQGJURXQGDUHRQWKHVDPHSODQH 7KXV 'LOOHU  6FRILGLR·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²  7KLV SXOVH XQGHUJRHV FRQWLQXRXV YDULDWLRQ EXW QHYHU FHDVHV WR LQGLFDWH ZKHWKHU RWKHUYLVLWRULQKDELWDQWVDUHIDUDZD\GHFHOHUDWHGRUVWHDG\VRQDUSLQJLQJ SXOVH  RU FORVH E\ DFFHOHUDWHG VRQDU SLQJLQJ SXOVH  DQG VR WRXFKHV RQH DXGLWRULO\SURYLGLQJSUHVVXUHVWKDWDUHYDJXHO\GLVSHUVHGEXWUHWDLQDFHU WDLQUHJXODULW\WKDWPDNHVSRVVLEOHDGUDZLQJXSRIVHPLGLVWLQFWGRWOLQHV RU VHQVLEOH QDYLJDWLRQDO KRUL]RQV³LQ WKH DXGLWRU\ DWPRVSKHUH LQ WKH VRXQGVFDSH IRUPLQJ D UDWKHU LQGHWHUPLQDWH DPELHQW VRFLRFXOWXUDO HQYL URQPHQW %OXUUHGWR%OLQGQHVV )URP+DSWLF:RUOG6SDFLQJWR2ULJLQDU\7DFWLOLW\ >«@VDOXWREVFXULW\6DOXWWRWKLVHUDVXUHRIILJXUHVDQGVFKHPDV$QGVDOXWWRWKH EOLQG ZKRP ZH EHFRPH>«@ VDOXW WR WKH YLVLRQ WKDW GLG QRW FOLQJWR IRUPV DQG LGHDVEXWWKDWOHWLWVHOIEHWRXFKHGE\IRUFHV1DQF\´6DOXWWR«@ WKH ZRUOGOLQHVV RI WKH ZRUOG TXD DEVROXWH H[LVWHQWLDO FRQGLWLRQ H[KDXVWV LWV ILQLWH VHQVH³H[KDXVWV LW WKDWLVRSHQVLWLQILQLWHO\0XQGXVSDWHW1DQF\7KHVHQVHRIWKH:RUOG² 

$VDXJPHQWHGZRUOGLQJ%OXUGLUHFWO\HQJDJHVWKHZD\LQZKLFKLQIRUPD WLRQ DQG FRPPXQLFDWLRQ WHFKQRORJLHV WRGD\ PRYH WRZDUGV EHFRPLQJ LQGLVFHUQLEOH IURP DQ\ RQWRORJLFDO H[WHULRU LQVLGH QDWXUH WKH HQYLURQ PHQWWKHPLOLHXHPERGLPHQWRUJDQVERGLHVWKHERG\ 3DUWDNLQJRIWKH HPHUJHQW PRYHPHQW RI SHUYDVLYH FRPSXWLQJ 'LOOHU 6FRILGLR·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·V QHWZRUNVZLWKQHWZRUNVRIWKHIXWXUH$GDSWLYHVRIWZDUHZLOOEHVHOIRUJDQL]LQJ VHOIFRQILJXULQJ UREXVW DQG UHQHZDEOH $W HYHU\ OHYHO DQG LQ HYHU\ FRQFHLYDEOH HQYLURQPHQWFRPSXWLQJZLOOEHIXOO\LQWHJUDWHGZLWKRXUGDLO\OLYHV

–––––––

TXD D WKLUG RQWLF GRPDLQ RI ´RUJDQL]HG LQRUJDQLF EHLQJVµ DQG RQ D QRWLRQ RI ´HSLSK\ ORJHQHVLVµTXDWKDWFRRULJLQDULW\RIWKHKXPDQDQGWHFKQLFVZKLFKOHWVXVHYROYHVSHFLIL FDOO\ YLD WKH LQYHQWLRQ RI WHFKQLFV LH YLD OLYLQJ RQ WKURXJK PHDQV RWKHU WKDQ OLIH VHH 6WLHJOHU   6HH 0F&XOORXJK 6HH DOVR WKHPRUH UHFHQW VWDWHPHQW IURPWKHUHVHDUFK SURJUDPPH ´)X WXUH DQG (PHUJLQJ 7HFKQRORJLHVµ ODXQFKHG E\ '* ,QIRUPDWLRQ 6RFLHW\ DQG 0HGLD WKH (XURSHDQ&RPPLVVLRQ´>«@¶WKHFRPSXWHUDVZHNQRZLW·ZLOOVRRQKDYHQRUROHLQRXU IXWXUH HYHU\GD\ OLYHV DQG HQYLURQPHQWV ,W ZLOO EHUHSODFHG E\D QHZ JHQHUDWLRQ RI WHFK QRORJLHVZKLFKZLOOPRYHWKHFRPSXWLQJSRZHURIIWKHGHVNWRSDQGXOWLPDWHO\LQWHJUDWHLW ZLWKUHDOZRUOGREMHFWVDQGHYHU\GD\HQYLURQPHQWV&RPSXWLQJEHFRPHVWKXVDQLQVHSDUD EOHSDUWRIRXUHYHU\GD\DFWLYLWLHVZKLOHVLPXOWDQHRXVO\GLVDSSHDULQJLQWRWKHEDFNJURXQG,W EHFRPHVDXELTXLWRXVXWLOLW\WDNLQJRQDUROHVLPLODUWRHOHFWULFLW\³DQHQDEOLQJEXWLQYLVLEOH DQG SHUYDVLYH PHGLXP UHYHDOLQJ LWV IXQFWLRQDOLW\ RQ UHTXHVW LQ DQ XQREWUXVLYH ZD\ DQG VXSSRUWLQJSHRSOHLQWKHLUHYHU\GD\OLYHVµ6WUHLW]HWDOQSDJ 

,UUHGXFLEOH9DJXHQHVV



$W VXFK D KHUH DQGQRZ WKH %OXU ZRUOG DQG LWV HYHQWV DUH QRW ZKDW ZH PDNHVHQVHRI5DWKHUEOXUUHGZRUOGLQJLQYLVLEO\RYHUODLGZLWKWKHSHUYD VLYHO\HPEHGGHGDQGFDOPFRPSXWLQJRIDXJPHQWHGUHDOLW\LQWKHZLGHVW ¶VHQVH·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¶FRQWDFWDPRQJ·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

–––––––

 ,QGLFDWLQJVHQVHLQWKHJUHDWHVWVHPDQWLFJHQHUDOLW\DVVHQVLQJDIIHFWLYHGLUHFWLRQDOLW\DQG RULHQWDWLRQ  ,UHPDLQLQYHQWLYHO\LQGHEWHGWRWKHRWKHUSODFHV-DFTXHV'HUULGDZLOOKDYHJRQHZLWKWKH XQWRXFKDEOH+HQFH,ZLOOQRWHYHQWKDQN6HH'HUULGD´7KH8QWRXFKDEOHµ²



8OULN(NPDQ

5HIHUHQFHV  $UFKLWHFWXUH ´7KH  &KDOOHQJH 6WLPXOXV 3ODQµ   -DQ  KWWSZZZDUFKLWHFWXUHRUJGRZQORDGVVWLPXOXVSODQSGI! $]XPD5RQDOG7´$6XUYH\RI$XJPHQWHG5HDOLW\µ3UHVHQFH7HOHRSHUDWRUVDQG9LUWXDO (QYLURQPHQWV ² %HLJO 0LFKDHO ´8ELTXLWRXV &RPSXWLQJ &RPSXWDWLRQ (PEHGGHG LQ WKH :RUOGµ 'LVDSSHDULQJ $UFKLWHFWXUH )URP 5HDO WR 9LUWXDO WR 4XDQWXP (GV 0LFKDHO %HLJO DQG 3HWHU:HLEHO%HUOLQ%LUNKlXVHU² %HUWRO'DQLHODDQG'DYLG)RHOO'HVLJQLQJ'LJLWDO6SDFH1HZ.@YDOLWHWVEHJUHSHWHUHQXWIRUGULQJDYQHVWHQSURYRNDWLYDUWIRUVWRUSDUWHQDYGHPVRP OHVHUE¡NHUIRUGLGHWIUDWDUGHPGHQVWRUHDYPHGLDSnVWnWWHGHPRNUDWLVNHOHVHUPDNWYHGn JM¡UHGHQLOOXVRULVNµ 7KHZRUGLQJLVDZNZDUGLQ1RUZHJLDQ

/LWHUDU\:RUOGPDNLQJ



VLGHVµQRORQJHUDOLJQLQJZLWKVSLULWEXWZLWKSRZHU,QWKLVZD\6ROVWDG HQDFWVKLVSRZHUE\HVWDEOLVKLQJDSULYLOHJHGFRQVHQVXVZKLOHKHUXOHVRXW DQ\RQHKROGLQJFRQIOLFWLQJYLHZV 6SLULWYV3RZHU :KHQ6¡UHQ.LHUNHJDDUGLQWKHEHJLQQLQJRI7KH6LFNQHVV8QWR'HDWKDVNV ZKDWLWPHDQVWKDWWKHKXPDQEHLQJLVVSLULWKHDQVZHUVWKDWWKHVSLULWRI WKHKXPDQEHLQJLVKLVVHOIFRQVFLRXVQHVVWKDWPDNHVKLPDFRQWUDGLFWRU\ V\QWKHVLVRIWKHLGHDODQGWKHFRQFUHWHDQGWKHUHIRUHLWLVQRWDVHOIEXWD GHULYDWHUHODWLRQVKLSWR´WKDWZKLFKHVWDEOLVKHGWKHHQWLUHUHODWLRQµ  6ROVWDGKRZHYHUGRHVQRWKROGOLWHUDWXUHWREHVSLULWLQWKHFRQWH[WRIDQ\ VXFK SKLORVRSKLFDO VSHFXODWLRQ EXW HPSKDVLVHV WKDW OLWHUDWXUH LV XQLTXH /LWHUDWXUH·V VSLULW LVVRPHWKLQJ LW H[SUHVVHV LQ DGGLWLRQ WR ´GHMHFWLRQ DQG PLVHU\RUVHOIFRQWHPSODWLRQDQGYLWDOLW\µDV´ZRUNRIWKHVSLULWµOLWHUD WXUH LV XQWRXFKHG E\ DQ\ KXPDQ DFWLYLW\ DQG WKHUHIRUH LW FDQ RQO\ EH MXGJHG E\ ´WKH TXDOLWLHV RI WKH ZRUN LWVHOI WKDW GHFLGH ZKHWKHU LW LV DQ LPSRUWDQW ZRUN RU QRWµ $V KH VHHV LW WKH VSLULW LV ERWK WKH XQZRUOGO\ OHJLWLPLVLQJVRXUFHRIWKHZRUNDVZHOODVLWVXQLTXHTXDOLW\ 7KH LGHDV FRQQHFWLQJ VSLULWXDOLW\ WR OLWHUDWXUH DUH GHHSO\ URRWHG LQ :HVWHUQFXOWXUH7KHGR[DRISRHWU\·VGLYLQHLQVSLUDWLRQDOVRXUFHODVWHGLQ YDULRXVIRUPVIURP$QWLTXLW\XQWLO5RPDQWLFLVP:LWKWKHVHFXODULVDWLRQ RI FXOWXUH DQG WKH GLJQLI\LQJ RI SURIDQH OLWHUDWXUH ZULWHUV HPHUJHG DV D QHZ ´VHFXODU SULHVWKRRGµ %pQLFKRX  ILUVW DV WKH SKLORVRSKHUV RI WKH (QOLJKWHQPHQWWKHQDVWKH5RPDQWLFSRHWV%HWZHHQDQGWKH SRHWSKLORVRSKHU D QHZ NLQG RI ZULWHU HPHUJHG DW WKH VDPH WLPH DQ LQVSLUHGEHDUHURIPRGHUQHQOLJKWHQPHQWDQGRIGDUNP\VWHULHVKHZDVD OHDGHU RQ WKH SDWK WR D SXUH IXWXUH %\ WKHQ OLWHUDWXUH KDG EHFRPH WKH FRQYH\RU RI LGHDV DQG QRW VROHO\ RI DHVWKHWLF YDOXHV 7KH ORQJODVWLQJ ILJXUH RI WKH SRHWSKLORVRSKHU VKRXOG EH H[DPLQHG DV D KLVWRULFDO SKH QRPHQRQDVVKRXOGWKHLGHDRI´OLWHUDWXUHDVVSLULWµ,QKHUVWXG\RIWKH LQWHUGHSHQGHQFH RI OLWHUDWXUH DQG WKH ZULWHU·V ELRJUDSK\ $QQ -HIIHUVRQ SRLQWV WR WKH FRPPRQ VRXUFH RI WKHVH SKHQRPHQD ´:LWK WKH JUDGXDO FRQVROLGDWLRQRIDILHOGHYHQWXDOO\NQRZQDV¶OLWHUDWXUH·DQGWKHFRQFRPL WDQWGHFOLQHRIJHQUHDQGSRHWLFVDVLWVIUDPHZRUNLWLVSRVVLEOHWRVHHWKH

–––––––   

´>.@YDOLWHWVEHJUHSHW HU HQ KHPVNR IRU DNDGHPLD IRUGL GHW JM¡U GHP EO UHWH L JRGWIRONV ¡\QHRJGHUIRUHUPDQJHLQQHQIRUDNDGHPLDLIHUGPHGnVNLIWHVLGHµ  ´>«@PLVPRWRJHOHQGLJKHWHOOHUVHOYEHVNXHOVHRJYLWDOLWHWµ  ´$OWVnGHWHUHJHQVNDSHUYHGYHUNHWVHOYVRPDYJM¡URPGHWHUHWEHW\GQLQJVIXOOWYHUNHOOHU LNNHRJLNNHOHVHUQHNULWLNHUQHIRUODJHQHDNDGHPLDPHGLHQHHOOHUIRUGHQVDNVVN\OGIRU IDWWHUHQµ 



,QJHU‘VWHQVWDG

FRQVHFUDWLRQRIWKHZULWHUGHVFULEHGE\%pQLFKRXDVDFRXQWHUSDUWWRWKLV SURFHVVµ   $OO OLWHUDWXUH LV KRZHYHU QRW VSLULW ,Q WKH ODVW SDUW RI KLV OHFWXUHZKLOHKHLGHQWLILHVKLPVHOIZLWK´KLVµJUHDWZULWHUV6ROVWDG´FDQ QRWVHHWKDW>KHDQGPRVWRIKLVFRQWHPSRUDU\QRYHOLVWV@DUHZRUNLQJLQ WKHVDPHOLQHµ6RPHRQHIDPLOLDUZLWK6ROVWDG·VZRUNNQRZVWKHOLVWRI ´KLVµZULWHUVE\QRZDVKHVKDUHVWKHPZLWKWKHSURWDJRQLVWVRIKLVQRY HOV )RU H[DPSOH ZLWK (OLDV 5XNOD LQ 6K\QHVV DQG 'LJQLW\  *HQDQVHRJ YHUGLJKHW ´+HPRVWO\UHDGQRYHOVRIWKHVZKLFKZHUHDFRQ FHSWWRKLP0DUFHO3URXVW)UDQ].DIND+HUPDQQ%URFK7KRPDV0DQQ DQG0XVLOZHUHWKHDXWKRUVKHOLNHGWRUHDGDQGWKH\ZHUHDOODXWKRUVRI WKHVWRKLPµ6K\QHVVDQG'LJQLW\ 4XLWHLQOLQHZLWKZKDW$QQ -HIIHUVRQFDOOVWKH´VHOIFRQWHVWLQJFKDUDFWHURIWKHOLWHUDU\µ 6ROVWDGLV LGHQWLI\LQJKLPVHOIDQGKLVZRUNZLWKDFHUWDLQFDQRQLVHGKLJKPRGHUQLVP ZKLOHKHLVGLVWDQFLQJKLPVHOIIURPPRVWRWKHUOLWHUDU\SURGXFWLRQ/LWHUD WXUHDVVSLULWLVDSULYLOHJHRQO\DIHZDUHFKRVHQ6ROVWDG·VFODLPWKDWOLW HUDWXUHLVVSLULWLVGHOLPLWDWLYHQRWGHILQLWLRQDO ,I OLWHUDWXUH LV WR EH FKDUDFWHULVHG DV VSLULWXDO LQ DQ\ GHVFULSWLYH RU GHILQLWLRQDOVHQVHLWPXVWEHLQDUDWKHUUHVWULFWHGZD\$WWKHVDPHWLPH DVLWEHORQJVWRWKHUHDOPRIPDWHULDOWKLQJVOLNHERRNVLQVFULEHGZLWKERWK WH[W DQG SDUDWH[W PHUFKDQGLVH LQ D PDUNHWSODFH DQG WH[WV FRQVLVWLQJ RI VHTXHQFHV RI ODQJXDJH VLJQV ZLWK D FRPPXQLFDWLYH IXQFWLRQ OLWHUDWXUH LV VSLULWXDOLQWKHVHQVHWKDWLWFUHDWHVPHQWDOLPDJHVDQGLGHDVLQWKHUHDG HUV³DQG WKXV VKDSHV WKHLU ZRUOGV $V WKH VLJQLILHU DQG WKH VLJQLILHG EH ORQJ WRJHWKHU OLNH WKHWZRVLGHVRIDVKHHWRISDSHU6DXVVXUH ERWKWKH PDWHULDOWH[WDQGWKHPHQWDOLGHDVWKDWWKLVVHTXHQFHRIVLJQVFUHDWHVLQWKH UHDGHU DUH QHFHVVDU\ IRU OLWHUDWXUH WR EH OLWHUDWXUH ,I *RRGPDQ LV ULJKW DERXWWKHGLIIHUHQFHEHWZHHQDIDFWDQGDILFWLRQMXVWEHLQJDGLIIHUHQFHLQ ´UHIHUHQWLDO GLVWDQFHµ OLWHUDWXUH FDQQRW EH VSLULWXDO LQ WKH VHQVH WKDW WKLV NLQGRIGLVFRXUVHODFNVLQIRUPDWLRQDOYDOXHDERXWWKHPDWHULDOZRUOGDQG KDVQRWDQJLEOHUHIHUHQWLQUHDOLW\$¶ILFWLRQ·FDQRQO\EHLGHQWLILHGWRWKH H[WHQWLWGRHVQRWUHIHUWRD¶IDFW·RU¶UHDOLW\·LVQRW¶YHUDFLRXV·DQGVRRQ ,W LV DOVR GLIILFXOW WR DFFHSW 6ROVWDG·V ULJLG GLFKRWRP\ EHWZHHQ VSLULW DQGSRZHU+LVGHQLDORIDQ\UHOHYDQFHRISRZHUPDNW WRWKHPDNLQJRI OLWHUDWXUHWDNHVLQWRFRQVLGHUDWLRQWKHFRPSOH[LWLHVQHLWKHURIWKHSURFHVV RIVXEMHFWLRQLQWKHOLWHUDU\FUHDWLRQQRURIWKHSURGXFWLRQRIZRUOGVE\ WKHPHDQVRIODQJXDJHLQDQDFWXDOFXOWXUDOVXUURXQGLQJQRURIWKHFRQ FHSW RI SRZHU LWVHOI +LV QRWLRQ RI SRZHU VHHPV VLPSOLVWLF FRPSDUHG WR

–––––––  ´-DGHIOHVWHURPDQIRUIDWWHUHVWnUPHJ\WWHUVWIMHUQWMHJKDUYDQVNHOLJIRUnVHDWYLDUEHLGHU LVDPPHJHQUHQ0HQVnHUGHWXQQWDNHQHGDPLQHVWRUHURPDQIRUIDWWHUHPHGGHPHUGHW QRHDQQHWIUDGHPKDUMHJPRWWDWWG\SHRJOLYEHVWHPPHQGHLQQWU\NNµ 

/LWHUDU\:RUOGPDNLQJ



-XGLWK%XWOHU·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

7KH URRW RI WKH ZRUGV 0DFKW *HUPDQ  DQG PDNW 1RUZHJLDQ  LV FRQ QHFWHG WR ´NQRZOHGJH DSWLWXGHµ DQG WR ´DFFHVVµ %MRUYDQG DQG /LQGH PDQ )DON DQG 7RUS  ZKLOH WKH PRGHUQ ZRUG PDNW LV V\QRQ\PRXV WR ´SRZHUµ DQG VLJQLILHV   ERGLO\  IRUFH DSWLWXGH ZHDOWK   YLROHQFH IRUFH   PDVWHU\ DXWKRULW\ VWURQJ LQIOXHQFH   VRPHWKLQJ KROGLQJ SRZHU LQ WKH PHDQLQJ RI >@    DUPHG IRUFH   D VXSHUQDWXUDO EHLQJ %RNPnOVRUGERND $V6ROVWDGZDVIDFLQJKLVDXGLHQFHGHQ\LQJKROGLQJDQ\ SRZHUDVDZULWHUKLVDSWLWXGHDQGDFFHVVWRVSHDNLQWKLVZD\LQWKLVFRQ WH[W DV ZHOO DV KLV DXGLHQFH·V UHFHSWLYLW\ WR KLV ZRUGV QRQHWKHOHVV ZDV JUDQWHGWRKLPEHFDXVHKHDVDZULWHULVUHQRZQHGIRUKLVPDVWHU\RIOLW HUDWXUH7KHGLVFXUVLYHDFWRIOHFWXULQJLQZKLFKRQHSHUVRQLVSRVLWLRQHG DSDUWIURPDQGRIWHQSK\VLFDOO\DERYHWKHDXGLHQFHZLWKWKHULJKWWRVSHDN XQLQWHUUXSWHG RQ KLV RU KHU RZQ WHUPV VHUYHV DV DQ LOOXVWUDWLRQ RI WKH XQHYHQ UHODWLRQVKLS EHWZHHQ WKH ZULWHU DQG KLV UHDGHUVKLS /HFWXULQJ DV GRHVOLWHUDWXUHFRQGLWLRQVDXWKRULW\DQGDV6ROVWDGLVGHYRLGRIDQ\UHSUH VHQWDWLRQDORUHFRQRPLFSRZHURQO\KLVDXWKRULW\DQGSRZHUDVDZULWHU JUDQWKLPWKHULJKWWRVSHDNLQWKLVZD\ $VDSXEOLFILJXUH6ROVWDGLVUHSXWHGWREHXQSUHGLFWDEOHDQGIXOORI VXUSULVHV ,Q DGGLWLRQ WR WKH SOHDVXUH RIVHHLQJ DQG KHDULQJ RQH RI1RU ZD\·V JUHDWHVW OLYLQJ ZULWHUV LQ WKH IOHVK DQG WKH DWWUDFWLRQ WR IDPH WKH EHVWLQIRUPHGPHPEHUVRIWKHDXGLHQFHKDGUHDVRQWRH[SHFWWRVHHVRPH IODLURIWKHQH[WWXUQLQ6ROVWDG·VFDUHHUGXULQJKLVSXEOLFDSSHDUDQFHDWWKH EHJLQQLQJ RI D QHZ PLOOHQQLXP +H KDV DOZD\V EHHQ REVHVVHG ZLWK WKH SDVVDJHRIWLPHDQGZLWKQXPEHUVFRXQWLQJKLVERRNVDQGVHFWLRQLQJKLV FDUHHUE\GHFDGHV+LVPRGHUQLVWSKDVHKDGODVWHGIURPKLVILUVWERRNLQ XQWLOGXULQJZKLFKKHLPSHUVRQDWHGWKHUHQHJDGHZULWHUWKUHDW HQLQJWKHHYLOERXUJHRLVVRFLHW\,QWKHVKHFRQYHUWHGWR0DU[LVP /HQLQLVP DQG ZURWH VRFLDO UHDOLVW QRYHOV LQ WKH VHUYLFH RI WKH ZRUNLQJ FODVV$IWHUKDYLQJJLYHQDOHFWXUHWRKLVIHOORZSDUW\PHPEHUVZKHUHKH GHFODUHGKLVUHWXUQWRERXUJHRLVOLWHUDWXUHLQKHEHFDPHWKHFKURQL FOHURIKLVJHQHUDWLRQZULWLQJQRYHOVUHSOHWHZLWKSRVWPRGHUQLURQ\RQWKH WKHPHRIKLVSROLWLFDOH[SHULHQFHGXULQJWKHVLQWURGXFHGDQHZ



,QJHU‘VWHQVWDG

VXUSULVLQJEUHDNDVKHSXEOLVKHGWKHFRUSRUDWHKLVWRU\RI1RUZD\·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·VDQGWKH DXGLHQFH·VZRUOGV7KHDXGLHQFH·VH[SHFWDWLRQVDQGWKHZULWHU·VIXOILOPHQW RIWKHVHH[SHFWDWLRQVUHFLSURFDOO\FRQGLWLRQRQHDQRWKHU 7KHOHFWXUHDFKLHYHGDVWURQJHUPRUHODVWLQJOLWHUDU\LPSDFWDVLWZDV LQFRUSRUDWHG LQWR WKH QRYHO  2QH FRXOG GZHOO RQ WKH IROORZLQJ SDUDGR[ ZKLOH WKH SHUVRQ 'DJ 6ROVWDG LQ KLV FDSDFLW\ DV D UHQRZQHG ZULWHUVWDQGVIDFLQJKLVDXGLHQFHWKHJHQHUDOHWKLFVRIWKHVLWXDWLRQSUH VXSSRVHVWKDWKHVSHDNVFDQGLGO\7KLVFDQGRXULVQRORQJHUSUHVXSSRVHG ZKHQ WKH OHFWXUH LV LQFRUSRUDWHG LQ DQ DXWRELRJUDSKLFDO WH[W JHQHULFDOO\ ODEHOOHG ¶QRYHO· DQG SUHVHQWHG DV WKH ZRUGV RI WKH ILFWLRQDO FKDUDFWHU RI ´'DJ6ROVWDGµSUHVXPHGOHFWXUHUDW/LOOHKDPPHUDVZHOODVWKHZULWHURI WKHQRYHOWKDWWKHUHDGHULVLQWKHSURFHVVRIUHDGLQJ2QWKHFRQWUDU\WKH SOD\IXO VHOIFRQWUDGLFWRU\ PRGH ZKLFK WKH PHPEHUV RI KLV DXGLHQFH ´NQRZLQJµ6ROVWDGSUREDEO\H[SHFWHGLQWKHDFWXDOOHFWXUHEXWQHYHUWKH OHVVIRXQG LW GLIILFXOWWR LGHQWLI\ LV HQKDQFHG E\ WKH PHWDFRQVFLRXVQHVV RI WKH QRYHO ´'DJ 6ROVWDGµ IRU H[DPSOH FRPPHQWV RQ WKH ZD\ KH LV VWDJLQJKLVRIILFLDOSHUVRQDIDFLQJKLVDXGLHQFHDW/LOOHKDPPHUÅ7KHOHFWXUH SURYRNHGLPPHQVHDSSODXVHIRUZKLFK,WKDQNHGE\ERZLQJDZNZDUGO\ VRPHWKLQJZKLFKLVSDUWO\GXHWRQDWXUHEXWZKLFKJUDGXDOO\PXVWEHVDLG WREHORQJWRWKHSURSV,XVHLQWKHSXEOLFVWDJLQJRIP\VHOI,QDSSDUHQW FRQILGHQWLDOLW\ ZLWK WKH UHDGHU ´'DJ 6ROVWDGµ KHUH GLVFORVHV WKH VHOI FRQVFLRXVUROHSOD\LQJRI'DJ6ROVWDGLQKLVSXEOLFDSSHDUDQFHV+RZHYHU WKLV FDQGRXU DERXW KLV ODFN RI FDQGRXUUHIOHFWV EDFN RQ WKH ZULWHUFRQ WUROOLQJWKHGLVFORVXUHRIFDQGRXUDQGODFNRIFDQGRXU DQGFRQWULEXWHVWR

–––––––  ´)RUHGUDJHWIUHPEUDNWHVWRUDSSODXVVRPMHJWDNNHWIRUPHGnEXNNHSnHQNHLWHWHPnWH QRHVRPGHOYLVVN\OGHVQDWXUPHQVRPHWWHUKYHUWQRNPnVLHVnWLOK¡UHGHUHNYLVLWWHUMHJ EHQ\WWHUWLOGHQRIIHQWOLJHLVFHQHVHWWHOVHQDYPHJVHOYµ 

/LWHUDU\:RUOGPDNLQJ



WKH FRQVWUXFWLRQ RI KLV HWKRV ERWK DV DQ HQXQFLDWRU RI OLWHUDU\ GLVFRXUVH DQGDVDSHUVRQVWDJLQJKLPVHOILQDFWXDOVLWXDWLRQVLQWKHOLWHUDU\ILHOG$V WKLV DGGV WR WKH XQFHUWDLQW\ RI KRZ WR LQWHUSUHW 6ROVWDG·V ZRUGV DQG KLV ZRUNVDQGJLYHVHDFKDQGHYHU\UHDGHUDIHHOLQJRIWKHXQLTXHQHVVRIKLV RUKHULQWHUSUHWDWLRQLWXQGRXEWHGO\HQKDQFHV6ROVWDG·VSRZHUDVDZULWHU DQGSHUIRUPHU6ROVWDG·VGRXEOLQJWKXVUHVHPEOHVWKHHOHJDQWGRXEOLQJLQ %RUJHV·IDPRXVWH[W´%RUJHVDQG,µLQZKLFK%RUJHVLVFRQIXVHGZLWKWKH ´, LQ WKH WH[Wµ EHLQJ FRQIXVHG ZLWK WKH ´, RXWVLGH WKH WH[Wµ EHLQJ RI FRXUVHLGHQWLFDOWRWKH´,LQWKHWH[Wµ7KH´,VLQVLGHDQGRXWVLGHWKHWH[Wµ VRXQGLQGXHWZKHQWKHWH[WFRQFOXGHV´,GRQRWNQRZZKLFKRIXVKDV ZULWWHQWKLVSDJHµ%RUJHV ZKLOHWKHZKROHFRQIXVLRQEHORQJVWRWKH UHDGHU·VZRUOGDQGKLVRUKHUPHQWDOUHSUHVHQWDWLRQRIDWH[WXDOVFHQHLQ ZKLFK WKH GUDPDWLVW LV %RUJHV KLPVHOI KDYLQJ VWDJHG WKH GRXEOLQJ RI ´KLPVHOIµLQWKHWH[W ,Q%RUJHV·DVLQ6ROVWDG·VFDVHWKHVWDJHRIWKHFRQ IXVLRQLVQRWUHVWULFWHGWRWKHWH[WEXWHQODUJHGWRLQFOXGH´UHDOLW\µ3RXO %HKUHQGWKDVODEHOOHGWKLV´DHVWKHWLFLQQRYDWLRQµRIHQWDQJOHPHQWRIIDFW DQG ILFWLRQ WKDW KDV EHFRPH VR ZLGHVSUHDG LQ FRQWHPSRUDU\ OLWHUDWXUH ´>W@KH'RXEOH&RQWUDFWµP\WUDQVODWLRQV EHWZHHQZULWHUDQGUHDGHU 7KH:ULWHU·V6\PEROLF3RZHU 7KH RSSRUWXQLW\ WR PDNH RQH·V ZRUOG PDQLIHVW LQ ZRUGV DQG GHHGV DQG WKXVWRH[SRVHLWWRWKHLQWHUHVWDQGWKHUHFRJQLWLRQRIRQH·VIHOORZEHLQJV LVRIFRXUVHXQHYHQO\GLVWULEXWHG$SHUVRQ·VFDSDFLW\WRSURGXFHXQGHU VWDQGDEOH VHQWHQFHV FDQ EH ZKROO\ LQVXIILFLHQW IRU KLV RU KHU FDSDFLW\ WR SURGXFH GLVFRXUVH WKDW LV DFWXDOO\ OLVWHQHG WR DQG FRQVLGHUHG VLJQLILFDQW %RXUGLHX  :LWKRXW D OHJLWLPDWH FRPSHWHQFH D SHUVRQ LV H[FOXGHG IURP DFWLYHSDUWLFLSDWLRQLQWKHVRFLDODQGFXOWXUDOILHOGVZKHUHLQGLYLGXDOZRUOGV DUH IRUPHG DQG WKH FRPPRQ ZRUOGV VKDSHG /LWHUDU\ ¶ZRUOGPDNLQJ· LQ YROYHVFRPPXQLFDWLQJVRPHWKLQJXQH[SHFWHGDQGQHZDQGUHVKDSLQJWKH FRQVHQVXVLWUHTXLUHVDPRUHVSHFLDOLVHGFRPSHWHQFHWKDQWKHRQHQHFHV VDU\ IRU FRPPXQLFDWLQJ PHUH VHQVLEOH VHQWHQFHV :LWKRXW ´V\PEROLF SRZHUµWREDFNXSWKHGLVFXUVLYHSURGXFWLRQQROLWHUDU\ZRUOGPDNLQJFDQ WDNHSODFH$V%RXUGLHXKDVFRQFHLYHGWKHQRWLRQRI´V\PEROLFSRZHUµLW GRHVQRWLPSO\VROHO\WKHDELOLW\RIDQLQGLYLGXDORUDQLQVWLWXWLRQWRPDLQ WDLQDJLYHQ´V\PEROLFV\VWHPµEXWDOVRWKHDXWKRULW\RIDQDJHQWWRLP SRVHLWVRZQ 6\PEROLF SRZHU³DV D SRZHU RI FRQVWLWXWLQJ WKH JLYHQ WKURXJK HQXQFLDWLQJ RI PDNLQJ SHRSOHVHHDQG EHOLHYH RIFRQILUPLQJ RUWUDQVIRUPLQJWKHYLVLRQRIWKH ZRUOG DQG WKHUHE\ DFWLRQ RQ WKH ZRUOG DQG WKXV WKH ZRUOG LWVHOI DQ DOPRVW PDJLFDOSRZHUZKLFKHQDEOHVRQHWRREWDLQWKHHTXLYDOHQWRIZKDWLVREWDLQHGE\



,QJHU‘VWHQVWDG

IRUFHZKHWKHUSK\VLFDORUHFRQRPLFDO E\YLUWXHRIWKHVSHFLILFHIIHFWRIPRELOL ]DWLRQ³LVDSRZHUWKDWFDQEHH[HUFLVHGRQO\LILWLVUHFRJQL]HGWKDWLVPLVUHFRJ QL]HG DV DUELWUDU\ 7KLV PHDQV WKDW V\PEROLF SRZHU GRHV QRW UHVLGH LQ WKH ¶V\PEROLFV\VWHPV·LQWKHIRUPRIDQ¶LOORFXWLRQDU\IRUFH·EXWWKDWLWLVGHILQHGLQ DQGWKURXJKDJLYHQUHODWLRQEHWZHHQWKRVHZKRH[HUFLVHSRZHUDQGWKRVHZKR VXEPLWWRLWLHLQWKHYHU\VWUXFWXUHRIWKHILHOGLQZKLFKEHOLHILVSURGXFHGDQG UHSURGXFHG 

,QWKHOHFWXUHKDOOWKHDXGLHQFHKDVFRPHWRZLWQHVVWKHPDQLIHVWDWLRQRI 6ROVWDG·VV\PEROLFSRZHU³KLVVWDWXVDVDQDWLRQDOO\UHQRZQHGZULWHUWKH SRZHURIKLVZRUGVWRVKDSHWKHLUZRUOGV³DQGLWDSSODXGVDVKHLVGHQ\ LQJKROGLQJDQ\SRZHUDWDOOHQKDQFLQJKLVSRZHUE\WKLVDFW7KLVLOOXV WUDWHVWKDWV\PEROLFSRZHULVDQLQYLVLEOHSRZHUWKDWFDQRQO\EHH[HUFLVHG ´ZLWK WKH FRPSOLFLW\ RI WKRVH ZKR GR QRW ZDQW WR NQRZ WKDW WKH\ DUH VXEMHFWWRLWRUHYHQWKDWWKH\WKHPVHOYHVDUHH[HUFLVLQJLWµ%RXUGLHX  %RXUGLHX FODLPV WKDW ODQJXDJH·V SRZHU WR PDLQWDLQ RU VXEYHUW WKH VRFLDO RUGHU³LWVZRUOGPDNLQJSRZHU³UHVLGHVLQ´WKHEHOLHIRIWKHOHJLWLPDF\RI ZRUGVDQGRIWKRVHZKRXWWHUWKHP$QGZRUGVFDQQRWFUHDWHWKLVEHOLHIµ %RXUGLHX  WUDQVODWLRQ PRGLILHG  :KDW %RXUGLHX KHUH PDLQWDLQV LV WKDW WKH GLVFRXUVH LWVHOI KDV QR EHDULQJ XSRQ LWV V\PEROLF SRZHU DV WKH SRZHU GRHV QRW UHVLGH LQ WKH ´V\PEROLF V\VWHPµ EXW LQ WKH VRFLDO ILHOG ZKHUHWKHV\PEROLFV\VWHPLVDWZRUN7KXVV\PEROLFSRZHULVDGHOHJDWHG SRZHUHQGRZHGWRFHUWDLQGLVFRXUVHVE\DVRFLDOV\VWHP7KLVUDGLFDODV VHUWLRQKDVJUHDWLPSOLFDWLRQVDWOHDVWIRUWKHDFDGHPLFVWXG\RIOLWHUDWXUH ,WLVDOVRVLWXDWHGDWWKHRWKHUH[WUHPHRI6ROVWDG·VLGHDOLVPRQEHKDOIRI OLWHUDWXUH·V LQWULQVLF TXDOLW\ DQG LWV OHJLWLPDWH FODLP WR UHFRJQLWLRQ DQG DXWKRULW\UHJDUGOHVVRIDQ\KXPDQDFWLYLW\ 'RHV,W0DWWHU:KRWKH:ULWHU,V" ,I6ROVWDGLVULJKWLQKLVLGHDOLVPLWGRHVQRWUHDOO\PDWWHUZKRWKHZULWHU LVOLWHUDWXUH·VDXWKRULW\DQGLWVV\PEROLFSRZHUDUHRIDVXSUHPHNLQGDQG WKHZULWHULVDGHSHUVRQDOLVHGPHGLXP (YHU\WKLQJLQP\OLIHLVZULWWHQZRUGV7KHZULWLQJWKHSRHWU\,WLV,>@QRW'DJ 6ROVWDGIURP6DQGHIMRUG7KHUH,DPVRPHRQHHOVH:KDWFRQFHUQV'DJ6ROVWDG

–––––––  ´&HTXLIDLWOHSRXUYRLUGHVPRWVHWGHVPRWVG·RUGUHSRXYRLUGHPDLQWHQLUO·RUGUHRXGHOH VXEYHUWLUF·HVWODFUR\DQFHGDQVODOpJLWLPLWpGHVPRWVHWGHFHOXLTXLOHVSURQRQFHFUR\DQFH TX·LOQ·DSSDUWLHQWSDVDX[PRWVGHSURGXLUHµ/DQJXDJHHWSRXYRLUV\PEROLTXH 

/LWHUDU\:RUOGPDNLQJ



LVQRWVLJQLILFDQWWRPHHYHQWKHWKLQJVWRZKLFK,DPDWWDFKHG(YHU\WKLQJLQP\ OLIHLVZULWLQJ

7KLV GLVDSSHDUDQFH RI WKH ZULWHU LQWR WKH ZULWLQJ VHHPV WR IXOILO 7 6 (OLRW·V LGHDO LQ 7KH 6DFUHG :RRG ´7KH SURJUHVV RI DQ DUWLVW LV D FRQWLQXDO VHOIVDFULILFHDFRQWLQXDOH[WLQFWLRQRISHUVRQDOLW\µ 6HYHQW\ILYH\HDUV DIWHU(OLRW6ROVWDGDOVRUHDFKHVEDFNWR5RPDQWLFLGHDVGDWLQJEDFNWRWKH HQG RI WKH HLJKWHHQWK FHQWXU\ ZKHQ WKH 5RPDQWLFV WUDQVIRUPHG WKH ¶,· LQWRDFUHDWLYHPHGLXPIRUDXQLYHUVDODEVROXWH,GHDFRPELQLQJ/LEHUW\ %HDXW\7UXWKDQG*RRGQHVVDQGDVVLJQHGDKLJKHUYDOXHWRSRHWU\LQWKH LQWHOOHFWXDODQGVRFLDOKLHUDUFK\2QHDQVZHUWRWKHTXHVWLRQRIZK\6RO VWDGILQGVLWQHFHVVDU\WRUHSHDWWKLVVWHSWRZDUGVDXQLYHUVDOLVLQJLGHDOLVP DW WKH EHJLQQLQJ RI WKH WZHQW\ILUVW FHQWXU\ PLJKW ZHOO EH IRXQG LQ 6WHSKHQ7RXOPLQ·VWKHRU\RIWKHWZRSKDVHVRIPRGHUQLW\)RU7RXOPLQ PRGHUQLW\·V ILUVW SKDVH ZDV WKH WROHUDQW DQG VFHSWLF KXPDQLVP RI WKH VL[WHHQWKFHQWXU\7KLVZDVWKHWLPHRI(UDVPXV5DEHODLV0RQWDLJQHDQG 6KDNHVSHDUHDQGLWZDVPDUNHGE\´8UEDQHRSHQPLQGHGQHVVDQGVFHSWL FDO WROHUDQFHµ 7RXOPLQ   7KH WUDQVLWLRQ IURP PRGHUQLW\·V ILUVW WR LWV VHFRQG SKDVH LV D WUDQVLWLRQ IURP WKH DFFHSWHG FRH[LVWHQFH RI PDQ\ ZRUOGV WR WKH SULPDF\ RI DQ LGHDOLVHG PXQGXV ,W ZHQW IURP 0RQWDLJQH·V D[LRP ´, GHFLGH QRWKLQJ³, GRQ·W XQGHUVWDQG³, KROG P\VHOI LQ WKH GRXEW³,H[DPLQHµWR'HVFDUWHV·´&RJLWRHUJRVXPµDQGZDVDFKLHYHG ZLWK WKH VHYHQWHHQWK FHQWXU\·V VHDUFK IRU FHUWDLQW\ DQG DXWKRULWDWLYH UD WLRQDOLVP ´WKFHQWXU\ SKLORVRSKHUV VHW DVLGH WKH ORQJVWDQGLQJ SUHRF FXSDWLRQV RI 5HQDLVVDQFH KXPDQLVP ,Q SDUWLFXODU WKH\ GLVFODLPHG DQ\ VHULRXV LQWHUHVW LQ IRXU GLIIHUHQW NLQGV RI SUDFWLFDO NQRZOHGJH WKH RUDO WKHSDUWLFXODUWKHORFDODQGWKHWLPHO\µ7RXOPLQ  $V SKLORVRSKLFDO WKRXJKW VRXJKW WR JURXQG DHVWKHWLF MXGJPHQW LQ XQLYHUVDOWLPHOHVVDQGQRQFRQWH[WXDOYDOLGLW\VKDUHGE\DOOUDWLRQDOEHLQJV LQ WKH XQLYHUVH LW GLG QRW EUHDN ZLWK WKH XQLYHUVDOLVLQJ WHQGHQF\ RI LWV WLPHLWRQO\FKRVHWKHRWKHUVLGHRIWKHGLFKRWRP\UHDVRQIHHOLQJ$WWKH WUDQVLWLRQ IURP WKH WZHQWLHWK WR WKH WZHQW\ILUVW FHQWXU\ KRZHYHU WKHUH VHHPVWREHDUHQHZHGLQWHUHVWIRUWKHSOXUDOLW\RILQGLYLGXDOZRUOGVDQG ´XUEDQH RSHQPLQGHGQHVV DQG VFHSWLFDO WROHUDQFHµ 7RXOPLQ   H[HPSODULO\ UHSUHVHQWHG E\ WKH *RRGPDQLDQ FRQFHSW RI ´ZRUOGPDNLQJµ ,QWKLVFRQWH[WLWLVWHPSWLQJWRVHH6ROVWDG·VUHWXUQWR5RPDQWLFLGHDOLVP

–––––––  ´$OWLPLWWOLYHUVNULIW6NULYLQJHQGLNWQLQJHQ'HWHUMHJ>@LNNH'DJ6ROVWDGIUD6DQGHIMRUG 'HUHUMHJHQDQQHQ'HWVRPKDUPHG'DJ6ROVWDGnJM¡UHEHW\ULNNHQRNIRUPHJVHOYLN NHWLQJMHJKDUHWNM UWIRUKROGWLO$OWLPLWWOLYHUVNULIWµ   ´-HQHGpFLGHULHQ³-HQHFRPSUHQGVSDV³-HPHWLHQVGDQVOHGRXWH³-·H[DPLQHµ 0RQWDLJQH/;;,,WKHTXRWDWLRQVLQVFULEHGLQWKHURRIEHDPVRI0RQWDLJQH·VZRUNURRP ZHUHWDNHQIURP6H[WXV(PSLULFXV+\SRW\SRVHV, 



,QJHU‘VWHQVWDG

DV D UHDFWLRQ WR WKH WKUHDW WR OLWHUDWXUH·V SULYLOHJHG VWDWXV WKDW FRQVWUXFWLYLVW·VUHODWLYLVPVHHPVWRLPSO\ ,I %RXUGLHX LV ULJKW QRW 6ROVWDG DQG ´DXWKRULW\ FRPHV WR ODQJXDJH IURPRXWVLGHµ%RXUGLHX LWPHDQVWKDWTXHVWLRQVUHJDUGLQJWKHVRFLDO LGHQWLW\DQGSRVLWLRQLQJRIWKHDXWKRUDQGWKHVRXUFHRIKLVRUKHUZRUOG PDNLQJSRZHUDUHHVVHQWLDOTXHVWLRQVWRDVN7KHVRFDOOHGLQWULQVLFTXDOL WLHVRIWKHOLWHUDU\ZRUNLWV´JHQXLQHO\QRYHOLVWLFµTXDOLWLHVLWV´LQGLVVROX EOH HSLF HOHPHQWµ WKH ´SRVVLEOH PDJLF RI WKH QRYHOLVWLF DUWµ RU WKH ´QHFHVVLW\RIDUWµDUHRIQRGHILQLWLYHVLJQLILFDQFH7KHFRQWHVWIRUOLWHUD WXUH·V SRZHU LV IRXJKW E\PHDQV RI WKH ZULWHU·V SRVLWLRQ LQ D VRFLDO ILHOG ZKHUHKHRUVKHFRPSHWHVIRUVRPHGHOHJDWHGDXWKRULW\DORQJZLWKRWKHU ZULWHUV 7KHV\PEROLFSRZHURIDZULWHUZLWK6ROVWDG·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¶UHDO·ZULWHUWKHQKDGDQREOL JDWLRQWRUHJDLQOLWHUDWXUH·VSRZHUWRSURYRNHFKDQJH1HYHUTXHVWLRQLQJ E\ZKLFKDXWKRULW\D\RXQJSHUVRQDWWKHEHJLQQLQJRIKLVFDUHHUJDLQVWKLV FRPSHWHQFH DQG WKH ULJKW WR FDOO KLPVHOI D ZULWHU 6ROVWDG GHDOW ZLWK WKH DSRULDRIWKHUHFRJQLWLRQRIWKHZULWHU·VZRUNEHLQJDSUHFRQGLWLRQIRUWKH ZULWHU·V SRZHU WR PDNH DQ LPSDFW RQ KLV UHDGHU·V ZRUOGV DQG SUHVHQWHG KLPVHOI DV D VXEYHUVLYH ZULWHU RI JUHDW LPSRUWDQFH IURP KLV YHU\ ILUVW ZRUGV &RPSDUHG WR%RXUGLHX·V YLHZ RQ DXWKRULW\ DVVRPHWKLQJ WKDW QHFHV VDULO\ FRPHV WR ODQJXDJH IURP ZLWKRXW DQG WKH ROGHU 6ROVWDG·V YLHZ RQ OLWHUDWXUH·V LQWULQVLF TXDOLW\ DQG DXWKRULW\ WKH YLHZ RI WKH \RXQJ 6ROVWDG WKDW WKH ZULWHU KDV WR FODLP OLWHUDWXUH LQ RUGHU WR FRQTXHU ZRUOGPDNLQJ SRZHUUHSUHVHQWVDWKLUGYLHZ7KHVHVHHPLQJO\FRQWUDGLFWRU\SHUVSHFWLYHV DUHFRPELQHGLQWKHQRWLRQRIOLWHUDWXUHDVD´VHOIFRQVWLWXWLQJGLVFRXUVHµ 3URSRVHGE\'RPLQLTXH0DLQJXHQHDXDQG)UpGpULTXH&RVVXWWDWKLVQR

–––––––  ´'HWJHQXLQWURPDQPHVVLJHYHGHQKYHUURPDQµ6ROVWDG ´5RPDQNXQVWHQV PXOLJHPDJLµ ´URPDQHQVXRSSO¡VHOLJHHSLVNHHOHPHQWµ ´NXQVWHQVQ¡GYHQGLJ KHWµ 

/LWHUDU\:RUOGPDNLQJ



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´$QDO\VLQJ6HOI&RQVWLWXWLQJ'LVFRXUVHVµ 

7KXVZKHQ6ROVWDGLVWDONLQJRI´OLWHUDWXUHDVVSLULWµKHLVQRWVWDWLQJDQ XQFRQGLWLRQHGWUXWKEXWLQYRNLQJDWUDQVFHQGHQWVRXUFHZKLFKHPSRZHUV KLPZLWKV\PEROLFSRZHUDVKHLQYRNHVLWLQWKLVZD\,QWKLVNLQGRIVHOI FRQILUPLQJ PRYHPHQW RI OHJLWLPLVDWLRQ OLWHUDWXUH WRJHWKHU ZLWK GLV FRXUVHV VXFK DV SKLORVRSK\ VFLHQFH DQG UHOLJLRQ LV VHW DSDUW IURP WKH PDMRULW\ RI VRFLHW\·V GLVFXUVLYH SURGXFWLRQ ,W EHFRPHV D VSHFLDO NLQG RI SULYLOHJHG GLVFRXUVH ZKLFK IRXQGV RWKHU GLVFRXUVHV DQG WKXV FRQWULEXWHV WR WKH FRQVWLWXWLRQ RI D VRFLHW\³RI LWV YDOXHV LWV PHPRU\ LWV DXWKRULW\ DQGVRRQ,WLVLQWKHYHU\SURFHVVRIXVLQJODQJXDJHDWDFHUWDLQDLPLQD FHUWDLQ ZD\ LQ D FHUWDLQ VLWXDWLRQ WKDW D >VHOI@FRQVWLWXWLQJ GLVFRXUVH DF TXLUHVLWVHOHYDWHGVWDWXV7KXVWKHQRWLRQRI>VHOI@FRQVWLWXWLQJGLVFRXUVH DOVR VXSSRUWV WKH \RXQJHU 6ROVWDG·V YLHZ WKDW WKH ZULWHU FRQTXHUV OLWHUD WXUH·V ZRUOGPDNLQJ FDSDFLW\ E\ XQFRPSURPLVLQJO\ VHWWLQJ KLPVHOI DSDUW IURPKLVIRUHUXQQHUVDQGLPSRVLQJKLVDOWHUQDWLYHZRUOGYLHZ$QGLWVXS SRUWVWKHROGHU6ROVWDGYLHZRQOLWHUDWXUH·VLQWULQVLFDXWKRULW\QHYHUWKHOHVV WKLVDXWKRULW\GRHVQRWEHORQJWRWKHGHKXPDQLVHGZRUGRIWKHLGHDOLVHG VSLULWEXWLVJHQHUDWHGE\OLWHUDWXUHDVKXPDQDFWLYLW\LQDGLVFXUVLYHILHOG ZKHUHWKHZULWHU·VDQGWKHUHDGHU·VZRUOGVDUHFRQIURQWHGZLWKHDFKRWKHU DQGWKHLUVKDUHGZRUOGV7KHQRWLRQRI>VHOI@FRQVWLWXWLQJGLVFRXUVHPDNHV WKHTXHVWLRQRIZULWHU·VSRZHUYHUVXVUHDGHU·VSRZHUDOHJLWLPDWHTXHVWLRQ WRDVNDVUHFRJQLVHGDXWKRUVDUH SHUFHLYHG DV GHOLYHULQJ QRW MXVW DQ\ PHVVDJH EXW RQH DXWKRUL]HG E\ WKHLU SULYL OHJHG DFTXDLQWDQFH ZLWK ¶XOWLPDWH· GLVFRXUVHV GLVFRXUVHV XSRQ ZKLFK RWKHUV DUH EDVHG³WKDW KDYH D SDUWLFXODU UHODWLRQVKLS ZLWK WKH IRXQGDWLRQV RI VRFLHW\ DQG ZLWK WKH VLJQLILFDWLRQ RI KXPDQ GHVWLQ\ ´$QDO\VLQJ 6HOI&RQVWLWXWLQJ 'LV FRXUVHVµ 

6\PEROLF SRZHU PLJKW EH VHHPLQJO\ PDJLFDO LW LV QHYHUWKHOHVV H[HUFLVHG E\DQDJHQWXSRQWKRVHZKRVXEPLWWRLW(YHU\ZRUOGLVPDGHE\VRPH



,QJHU‘VWHQVWDG

RQHDQGWKHEDUHIDFWWKDWDZRUOGLVPDGHPDQLIHVWDQGSXEOLFUDLVHVWKH TXHVWLRQRIWKHVRXUFHRIWKHOHJLWLPDF\DQGUHFRJQLWLRQRILWVPDNHU 7KH¶,PSRVVLEOH·$XWKRU $GRXEOLQJVLPLODUWRWKHVHOIFRQVFLRXVGRXEOLQJRUVSOLWWLQJRIWKHDXWKRU LQ´%RUJHVDQG,µWDNHVSODFHLQVHYHUDORI6ROVWDG·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·VFDVHZKHUHWKH JDPHUHVLGHVLQWKHHVVHQWLDOGLIIHUHQFHEHWZHHQ´'DJ6ROVWDGµWKHFKDU DFWHU JLYHQ WKLV QDPH LQ VRPH RI 'DJ 6ROVWDG·V QRYHOV ZLWK WKH DFWXDO ZULWHU'DJ6ROVWDGLWSUHVXSSRVHVWKDWDOLWHUDU\ZULWHUKDVDFFHVVWRWZR GLVWLQFWPRGHVRIDXWRJUDSKLFDOGLVFRXUVH,QVRPHW\SHVRIOLWHUDU\GLV FRXUVHVXFKDVILFWLRQDOSURVHRUSRHWU\WKHZULWHUE\FRQYHQWLRQLVQRW ERXQGE\UHDOLW\,IWKHDXWKRUXWWHUV¶,·WKLV¶,·LVZLWKRXWD¶UHDO·UHIHUHQW ,QRWKHUNLQGVRIOLWHUDU\GLVFRXUVHVXFKDVDOHFWXUHDQLQWHUYLHZRUDQ HVVD\WKHERUGHUEHWZHHQDWUXWKDQGDOLHLVHVVHQWLDOFOHDUDQGELQGLQJ ,IWKHDXWKRUXWWHUV¶,·LWUHIHUVWRKLV¶UHDO·SHUVRQ7KLVQLFHGLVWLQFWLRQ VHHPVKRZHYHUWREHZLWKRXWEHDULQJLQH[SHULHQFH%HVLGHV*RRGPDQ·V FODLP WKDW WKH GLIIHUHQFH EHWZHHQ D IDFW DQG D ILFWLRQ UHSUHVHQWV D PHUH GLIIHUHQFH LQ UHIHUHQWLDOGLVWDQFH LW LV DOVR HVVHQWLDO WRNHHS LQ PLQG WKDW WUXWK DQG XQWUXWK DUH IOXLGFDWHJRULHV LQ WKH RQJRLQJ KXPDQ VKDSLQJ RI WKH VHOI 8QGRXEWHGO\ WKH WUXWK RI WKH VHOI DV D XQLTXH DQG FKDQJLQJ SK\VLFDO DQG VSLULWXDO EHLQJ LV LQDFFHVVLEOH WR RWKHUV 7KH ZRUOG RI RQH SHUVRQFDQQHYHUEHWUDQVSDUHQWRUVKDUHG1HYHUWKHOHVVWKHVHOIDVVRFLDO UHDOLW\ FRPHV LQWR EHLQJ DV WKH VXEMHFWLYLW\ WKDW XWWHUV ¶,· GLIIHUHQWLDWHV LWVHOIIURP¶\RX·7KHDXWKRUZKRXWWHUV´¶,·µLQDILFWLRQDOWDOHGLIIHUHQWL DWHVWKLV´¶,·µIURPWKH¶UHDO·¶,·WKDWLVWKH¶,·WKDWXWWHUV´¶,·µ,WLVRIQR UHOHYDQFH ZKHWKHU WKH H[SUHVVLRQ RI WKH VHOI LV ¶WUXH· RU ¶IDOVH· ¶UHDO· RU ¶ILFWLYH·\HWZKDWLVUHOHYDQWLVKRZLWFRQVWUXFWVWKHVHOI³DVLWDFWVDQGLWV DFWVDUHLQWHUSUHWHGDQGPHWE\RWKHUV´¶(JR·LVWKHRQHZKRVD\V¶HJR·µ

–––––––  7RDYRLGWKHGLVWLQFWLRQEHWZHHQ¶DXWRELRJUDSK\·DQGWKHQHRORJLVP¶DXWRILFWLRQ·,SUHIHU WKHWHUP¶DXWRJUDSK\·RU¶VHOIZULWLQJ·SURSRVHGE\3DVFDOH'HORUPDV

/LWHUDU\:RUOGPDNLQJ



DFFRUGLQJ WR %HQYHQLVWH $V H[SUHVVLRQ RI WKH VHOI VXEMHFWLYLW\ LV SUR GXFWLYHDQGLWLVQRWSRVVLEOHWRLGHQWLI\WKHVXEMHFWWKDWH[SUHVVHVLWVHOILQ GLVFRXUVHEHIRUHGLVFRXUVHWKHVXEMHFWLVVKDSHGE\GLVFRXUVHDQGVRFLDO LQWHUSOD\ ,QKLVIDPRXVSDSHU´:KDWLVDQDXWKRU"µ)RXFDXOW·VVWDUWLQJSRLQWLV D VHQWHQFH IURP %HFNHWW·V7H[W IRU 1RWKLQJ ´¶:KDW GRHV LW PDWWHU ZKR LV VSHDNLQJ· VRPHRQH VDLG ¶ZKDW GRHV LW PDWWHU ZKR LV VSHDNLQJ·µ )RX FDXOW·VFODLPLQWKHSDSHU·VODVWSDUDJUDSKVLVWKDWWKHLPDJHRIWKHDXWKRU GRPLQDWLQJ DQ\ GLVFRXUVH ZLWK DXWKRUIXQFWLRQ LV ´WKH LGHRORJLFDO ILJXUH E\ ZKLFK RQH PDUNV WKH PDQQHU LQ ZKLFK ZH IHDU WKH SUROLIHUDWLRQ RI PHDQLQJµ ´:KDW LV DQ $XWKRU"µ   :LWK LWV GLVDSSHDUDQFH GLV FRXUVHV ZLOO ´GHYHORS WKH DQRQ\PLW\ RI WKH PXUPXUµ   DQG EH PHW ZLWKRWKHUTXHVWLRQVWKDQWKHUHFXUUHQWTXHVWLRQVDERXWWKHKXPDQVXE MHFWDWWKHVRXUFHRIWKHGLVFRXUVH7KLVLVDGHYHORSPHQW)RXFDXOWIDYRXUV DVKHIRUHVHHVWKDWWKHLQWHUSUHWDWLRQRIILFWLRQDOGLVFRXUVHWKHQZLOOKDS SHQPRUHIUHHO\DQGDPRUHDQDO\WLFDSSURDFKWRWKHYDULHW\RIGLVFXUVLYH SUDFWLFHVZLOOFRPHLQWREHLQJDVTXHVWLRQVDERXWWKHLUPRGHRIH[LVWHQFH DQG WKH FRQGLWLRQV RI WKHLU FLUFXODWLRQ DQG DSSURSULDWLRQ PRYH WR WKH IRUHIURQW ,Q UHVSRQVH WR WKH FRQFOXVLRQ RI )RXFDXOW·V SDSHU RQH FDQ DVN ZKHWKHU D GHYHORSPHQW WRZDUGV WKH ´DQRQ\PLW\ RI WKH PXUPXUµ ZRXOG QRWDOVROHDGWRWKHFROODSVHRIGLVFRXUVHDVDQ\DQVZHUUHJDUGLQJZKDWLV VDLGWKHQZRXOGHFKRWKHLQGLIIHUHQFHRI%HFNHWW·V7H[WIRU1RWKLQJ´:KDW GLIIHUHQFHGRHVLWPDNHZKRLVVSHDNLQJ"µ,ILWLVRIQRLPSRUWDQFHZKRLV VSHDNLQJRIZKDWLPSRUWDQFHFDQLWWKHQEHZKDWLVVDLG",IVSHHFKLVERWK SURGXFWLYHDQGDSURGXFWRIVXEMHFWLYLW\FDQGHKXPDQLVHGVSHHFKWKHQEH SRVVLEOH",IDOOWKDWFDQEHKHDUGLVXWWHUHGLQ´WKHDQRQ\PLW\RIWKHPXU PXUµLWVHHPVWKDWHLWKHUWKHVKDSLQJRIWKHFRPPRQZRUOGLVQRORQJHU JRLQJRQRUWKDWWKHLQGLYLGXDOZRUOGVKDYHEHFRPHWRWDOO\DOLNH :KLOHWKH´LPDJHRIWKHDXWKRUµDFFRUGLQJWR)RXFDXOWLVDQ´LGHR ORJLFDO ILJXUHµ ZKLFK LV LPSRVHG RQ WH[WV IURP WKH RXWVLGH WH[WV ZLWK DXWKRUIXQFWLRQ DUH SURGXFHG IURP WKH LQVLGH E\ D ´SOXUDOLW\ RI VHOIµ ´:KDW LV DQ $XWKRU"µ   )RU H[DPSOH WKH ´,µV RI D PDWKHPDWLFDO

–––––––  ´(VW¶HJR·TXLGLW¶HJR·µ%HQYHQLVWH   4XRWHGDIWHU)RXFDXOW´:KDWLVDQ$XWKRU"µ  7KH ILUVW YHUVLRQ RI )RXFDXOW·V SDSHU ZDV SUHVHQWHGWR WKH ´6RFLpWp IUDQoDLVHGH SKLORVR SKLHµ LQ  ,Q  )RXFDXOW SUHVHQWHG D VOLJKWO\ PRGLILHG YHUVLRQ LQ (QJOLVK DW WKH 6WDWH8QLYHUVLW\RI1HZVHOI@FRQVWLWXWLQJGLVFRXUVHDVWKHIRUFHWKDWVSOLWVKLVRU KHUVXEMHFWLYLW\LQWRWKUHHLQVWDQFHVDQGDVVHPEOHVWKHPLQWKH´LPSRVVL EOHµ ILJXUH RI WKH DXWKRU1RW XQOLNH )RXFDXOW·V WD[RQRP\ WKH WKUHH LQ VWDQFHVRIWKHVXEMHFWLYLW\DUHODEHOOHGWKH´SHUVRQµUHIHUULQJWRWKHDFWXDO PDQRUZRPDQWKH´ZULWHUµUHIHUULQJWRWKHZD\KHRUVKHSOD\VWKHUROH RI WKH ZULWHU LQ WKH OLWHUDU\ ILHOG DQG WKH ´LQVFULSWRUµ GHVLJQDWLQJ WKH LQVWDQFHZKLFKDVVXPHVUHVSRQVLELOLW\IRUWKHWH[WLQLWVVLQJXODULW\DQGLWV JHQUH DQG DV LQ )RXFDXOW·V PRGHO WKHUH LV QR KLHUDUFK\ EHWZHHQ WKHVH LQVWDQFHV VLQFH WKH\ JHQHUDWH HDFK RWKHU LQ D G\QDPLF RI GLIIHUHQWLDWLRQ DQG FRQYHUJHQFH 7RJHWKHU WKH\ IRUP D SDUDGR[LFDO LQGHWHUPLQDWH DQG PXOWLSOH LPDJH RI WKH DXWKRU WKDW LV ´ODUJHUµ WKDQ HDFK RI WKH WKUHH LQ VWDQFHVWKDWSURGXFHVLWDQGGLIIHUHQWIURPWKHVXPRIWKHP7KHPHWD SKRU 0DLQJXHQHDX SURSRVHV WR YLVXDOLVH WKLV PRGHO LV WKH ´%RUURPHDQ NQRWµDILJXUHFRQVLVWLQJRIWKUHHULQJVWKDWDUHOLQNHGLQVXFKDZD\WKDW UHPRYLQJRQHULQJUHVXOWVLQWKHXQOLQNLQJRIWKHWZRRWKHUULQJVZKLOHKH GHVLJQDWHV´SDUDWRSLDµDV´WKHFOLQDPHQZKLFKUHQGHUVWKLVNQRWSRVVLEOH DQGZKLFKLVUHQGHUHGSRVVLEOHE\WKLVNQRWµ+HUH´FOLQDPHQµUHIHUVWR /XFUHWLXV· QRWLRQ RI WKH WLQ\ GHYLDWLRQ RI WKH DWRPV WKDW DOORZV WKHP WR PHHW DQG PDWWHU WR IRUP ZKLOH ´SDUDWRSLDµ LV WKH QRWLRQ SURSRVHG E\ 0DLQJXHQHDXWRGHVLJQDWHWKH SDUDGR[LFDOUHODWLRQRILQFOXVLRQDQGH[FOXVLRQLQDVRFLDOVSDFHWKDWIROORZVIURP WKHVSHFLDOVWDWXVRIDWH[WEHORQJLQJWROLWHUDWXUH>«@7KLVSDUDGR[LFDOVWDWXVLVD UHVXOW RI WKH GLVWLQFW FKDUDFWHU RI WKHVH GLVFRXUVHV WKDW FDQ RQO\ DXWKRUL]H WKHP VHOYHV,IWKHVSHDNHUKDVDWRSLFSRVLWLRQKHFDQQRWVSHDNRQEHKDOIRIDWUDQVFHQ

–––––––  ´OHFOLQDPHQTXLUHQGSRVVLEOHFHQ±XGHWTXHFHQ±XGUHQGSRVVLEOHµ/HGLVFRXUVOLWWpUDLUH  

/LWHUDU\:RUOGPDNLQJ



GHQFHEXWLIKHGRHVQRWLQDQ\ZD\ZULWHKLPVHOILQWRWKHVRFLDOVSDFHKHFDQQRW VSUHDGDUHFHLYDEOHPHVVDJH

%\ZD\RIKLVRUKHUSDUDWRSLFSRVLWLRQLQJDQGWKHSDUDGR[LFDOWHQVLRQLW FUHDWHV WKH DXWKRU EHFRPHV VLPXOWDQHRXVO\ DQ LQWHJUDWHG PHPEHU DQG D PDUJLQDOGLVVLGHQWWR¶KLV·RU¶KHU·FRPPXQLW\7RYLVXDOLVHKRZWKLVSDUD WRSLF SRVLWLRQLQJ ZRUNV LW FDQ EH XVHIXO WR WKLQN RI WKH SURSKHW·V ZLWK GUDZDO LQWR WKH GHVHUW WR GLVWDQFH KLPVHOI IURP ¶KLV· SHRSOH DQG WKHLU ZURQJGRLQJV ZKLOH KH GUDZV WKHP RXW LQ WKH GHVHUW ZLWK KLP ZLWK KLV ZRUGV  0DLQJXHQHDX·V FRQFHSWV DQG WKH PRGHO RI WKH ´%RUURPHDQ NQRWµ FRQWULEXWHVLJQLILFDQWO\WRWKHXQGHUVWDQGLQJRIOLWHUDU\ZRUOGPDNLQJDQG WKH GLVFXUVLYH G\QDPLF WKDW JHQHUDWHV OLWHUDWXUH·V V\PEROLF SRZHU 6LQFH WKHUHH[LVWVLQDVRFLHW\DFHUWDLQNLQGRIGLVFRXUVHZLWKDSULYLOHJHGVWDWXV DQGUROHLQWKHVKDSLQJRIWKHFRPPRQZRUOGVWKHIRXQGLQJFKDUDFWHULV WLFV RI WKHVH GLVFRXUVHV KDYH WR EH DQDO\VHG DFFRUGLQJ WR WKH VSHFLDO G\ QDPLFVRIVHOIOHJLWLPLVLQJDQGDSSURSULDWLRQRIV\PEROLFSRZHUE\ZKLFK WKH\FRPHLQWREHLQJDQGDFTXLUHWKHLUIRUFH7KHLUDWWULEXWLRQWRDSUR GXFWLYH VXEMHFWLYLW\ DQG WKH PRUH RU OHVV OLWHUDO FRQFUHWLVDWLRQ RI WKLV VXEMHFWLYLW\LQWRWKHILJXUHRIWKHDXWKRUGRHVQRWKDSSHQIURPWKH´RXW VLGHµDVDQLGHRORJLFDOFRQWDPLQDWLRQWRKLQGHUWKHIUHHLQWHUSUHWDWLRQRI WKHWH[WDV)RXFDXOWFODLPV$VDZRUOGLVDOZD\VWKHZRUOGRIVRPHRQH OLWHUDWXUH·VZRUOGPDNLQJSRZHUZRXOGEHLPSRVVLEOHLIWKHUHDGHUGLGQRW KDYHVRPHLGHDDERXWLWVHQXQFLDWRU,WLVE\XQGHUVWDQGLQJKRZWKHLPDJH RIWKHDXWKRUWKDWHPHUJHVIURPWKHWH[WEHFRPHV´LPSRVVLEOHµWKDWRQH DOVR FDQ XQGHUVWDQG WKH SULYLOHJHG VWDWXV RI OLWHUDWXUH DQG RWKHU >VHOI@FRQVWLWXWLQJGLVFRXUVHVDQGWKHVSHFLDOUROHWKH\KDYHWRSOD\LQWKH VKDSLQJRIWKHVKDUHGZRUOGVWKDWELQGVXVWRJHWKHULQFXOWXUHVDQGVRFLH WLHV

5HIHUHQFHV $PRVV\5XWK,PDJHVGHVRLGDQVOHGLVFRXUV/DFRQVWUXFWLRQGHO·pWKRV/DXVDQQH'HODFKDX[ HW1LHVWOp %HKUHQGW3RXO'REEHOWNRQWUDNWHQ(Q VWHWLVNQ\GDQQHOVH&RSHQKDJHQ*\OGHQGDO

–––––––  ´>«@ OD UHODWLRQ SDUDGR[DOH G·LQFOXVLRQH[FOXVLRQ GDQV XQ HVSDFH VRFLDO TX·LPSOLTXH OH VWDWXW GH ORFXWHXU G·XQ WH[WH UHOHYDQW GHV GLVFRXUV FRQVWLWXDQWV >«@ &H VWDWXW SDUDGR[DO GpFRXOHGHODVSpFLILFLWpGHFHVGLVFRXUVTXLQHSHXYHQWV·DXWRULVHUTXHG·HX[PrPHVVLOH ORFXWHXU RFFXSH XQH SRVLWLRQWRSLTXH LO QH SHXW SDUOHU DX QRP GH TXHOTXH WUDQVFHQGDQFH PDLV V·LO QH V·LQVFULW SDV HQ TXHOTXH IDoRQ GDQV O·HVSDFH VRFLDO LO QH SHXW SURIpUHU XQ PHVVDJHUHFHYDEOHµ0DLQJXHQHDXLQ&KDUDXGHDXDQG0DLQJXHQHDX 



,QJHU‘VWHQVWDG

%pQLFKRX3DXO/HVDFUHGHO·pULYDLQ²(VVDLVXUO·DYqQHPHQWG·XQSRXYRLUVSLULWXHO ODwTXHGDQVOD)UDQFHPRGHUQH3DULV/LEUDLULH-RVp&RUWL %HQYHQLVWHePLOH´'HODVXEMHFWLYLWpGDQVOHODQJDJHµ3UREOqPHVGHOLQJXLVWLTXHJpQpUDOH 9RO3DULV*DOOLPDUG² %MRUYDQG+DUDOGDQG)UHGULN/LQGHPDQ9nUHDUYHRUGHW\PRORJLVNRUGERNUHYDQGH[W HGLWLRQ2VOR1RYXV %RNPnOVRUGERND$SULOKWWSZZZGRNSURXLRQRRUGERNVRHNKWPO! %RXUGLHX 3LHUUH /DQJXDJH DQG 6\PEROLF 3RZHU 7UDQV *LQR 5D\PRQG DQG 0DWKHZ $GDPVRQ&DPEULGJH3ROLW\3UHVV7UDQVRI/DQJXDJHHWSRXYRLUV\PEROLTXH 3DULVeGLWLRQVGX6HXLO %RUJHV-RUJH/XLV´%RUJHVDQG,µ7UDQV-DPHV(,UE\$XWKRUVKLS)URP3ODWR WRWKH3RVWPRGHUQ$5HDGHU(G6HiQ%XUNH(GLQEXUJK(GLQEXUJK83 %XWOHU -XGLWK 7KH 3V\FKLF /LIH RI 3RZHU 7KHRULHV LQ 6XEMHFWLRQ 6WDQIRUG 6WDQIRUG 83  &KDUDXGHDX 3DWULFN DQG 'RPLQLTXH 0DLQJXHQHDX 'LFWLRQQDLUH G·DQDO\VH GX GLVFRXUV 3DULV6HXLO 'HORUPDV3DVFDOH´/·LPDJHGHVRLGDQVOHV©DXWRJUDSKLHVªGH5RXVVHDXHWOHUHFRXUV j OD UKpWRULTXH WUDGLWLRQQHOOHµ$UJXPHQWDWLRQ HW $QDO\VH GX GLVFRXUV    (GV 5XWK $PRVV\ DQG 5RVHO\QH .RUHQ $SULO  KWWSDDGUHYXHVRUJ LQGH[KWPO! (OLRW 76 7KH 6DFUHG :RRG (VVD\V RQ 3RHWU\ DQG &ULWLFLVP  /RQGRQ 0HWKXHQ  )DON +MDOPDU DQG $OI 7RUS (W\PRORJLVN RUGERJ RYHU GHW QRUVNH RJ GHW GDQVNH VSURJ 2UG U¡WWHU RJ RSSULQQHOLJH EHW\GQLQJ ² 2VOR %M¡UQ 5LQJVWU¡PV $QWLNYDULDW  )RXFDXOW 0LFKHO ´:KDW LV DQ $XWKRU"µ  0RGHUQ &ULWLFLVP DQG 7KHRU\ $ 5HDGHU (G'DYLG/RGJH/RQGRQ/RQJPDQ² ³ ´4X·HVWFH TX·XQ DXWHXU"µ 'LWV HW pFULWV 9RO  (GV 'DQLHO 'HIHUW DQG )UDQFRLV (ZDOG3DULV*DOOLPDUG² *RRGPDQ1HOVRQ:D\VRI:RUOGPDNLQJ+DVVRFNV+DUYHVWHU3UHVV ³2I0LQGVDQG2WKHU0DWWHU&DPEULGJH0$+DUYDUG83 -HIIHUVRQ $QQ %LRJUDSK\ DQG WKH 4XHVWLRQ RI /LWHUDWXUH LQ )UDQFH 2[IRUG 2[IRUG 83  .LHUNHJDDUG6¡UHQ´7KH6LFNQHVVXQWR'HDWKD&KULVWLDQ3V\FKRORJLFDO([SRVLWLRQ IRU8SEXLOGLQJDQG$ZDNHQLQJE\$QWL&OLPDFXVµ7KH(VVHQWLDO.LHUNHJDDUG (GV+RZDUG9+RQJDQG(GQD++RQJ3ULQFHWRQ3ULQFHWRQ83 0DLQJXHQHDX'RPLQLTXH´$QDO\VLQJ6HOI&RQVWLWXWLQJ'LVFRXUVHVµ'LVFRXUVH6WXGLHV 9RO/RQGRQ6DJH ² ³/HGLVFRXUVOLWWpUDLUH3DUDWRSLHHWVFqQHG·pQRQFLDWLRQ3DULV$UPDQG&ROLQ 0DLQJXHQHDX 'RPLQLTXH DQG )UpGpULF &RVVXWWD ´/·DQDO\VH GHV GLVFRXUV FRQVWL WXDQWVµ/DQJDJHV ² 0DWXUDQD +XPEHUWR 5 DQG )UDQFLVFR - 9DUHOD 7KH 7UHH RI .QRZOHGJH 7KH %LRORJLFDO 5RRWVRI+XPDQ8QGHUVWDQGLQJ7UDQV5REHUW3DROXFFL/RQGRQ6KDPEKDOD  0RQWDLJQH 0LFKHO GH /HV HVVDLV (GLWLRQ GH 3LHUUH 9LOOH\ ² 3DULV 3UHVVHV 8QLYHUVLWDLUHVGH)UDQFH 6DXVVXUH)HUGLQDQGGH&RXUVGHOLQJXLVWLTXHJpQpUDOH3DULV3D\RW

/LWHUDU\:RUOGPDNLQJ



6ROVWDG 'DJ ´6SLOOHUHQµ 0RGHUQH SURVD $UEHLGVERN IUn HLW OLWWHUDWXUVHPLQDU (GV 7RU 2EUHVWDGDQG(LQDU‘NODQG2VOR6DPODJHW ³5RPDQ2VOR2NWREHU ³$UPDQG9)RWQRWHUWLOHQXXWJUDYGURPDQ2VOR2NWREHU ³6K\QHVVDQG'LJQLW\7UDQV6YHUUH/\QJVWDG/RQGRQ+DUYLOO6HFNHU 7RXOPLQ 6WHSKHQ &RVPRSROLV 7KH +LGGHQ $JHQGD RI 0RGHUQLW\  &KLFDJR 8 RI &KLFDJR3 :KLWH+D\GHQ´7KH+LVWRULFDO7H[WDV/LWHUDU\$UWLIDFWµ&OLR ²

:ULWLQJ/LYHVDQG¶:RUOGV·(QJOLVK)LFWLRQDO %LRJUDSK\DWWKH7XUQRI WKHVW&HQWXU\ &$52/,1(/86,1 7KHUHFDQEHPDJLFLQDQDPH$QDPHFDQFRQMXUHXSDZRUOGDQG¶DZRUOG·FDQ EHDVWRU\ &.6WHDG$6HFUHW+LVWRU\RI0RGHUQLVP 

%LRJUDSK\:RUOGPDNLQJDQG1DUUDWLYH ,Q KLV ILFWLRQDO DXWRELRJUDSK\ $ 6HFUHW +LVWRU\ RI 0RGHUQLVP   &. 6WHDG VXPV XS WKH FRQQHFWLRQ EHWZHHQ ELRJUDSK\ ZRUOGPDNLQJ DQG QDUUDWLYH LQ D IHZ ZRUGV $ SHUVRQ·V QDPH HYRNHV KLV RU KHU OLIH DQG ¶ZRUOG·DQGWKLV¶ZRUOG·FDQEHWXUQHGLQWRDVWRU\,QUHDOLW\KRZHYHUWKLV SURFHVV LV IDU PRUH FRPSOH[ DQG ULFKHU WKDQ LW DSSHDUV WR EH LQ 6WHDG·V VLPSOH VWDWHPHQW 7RGD\ QXPHURXV IRUPV RI DXWR ELRJUDSK\³DQG WKHUHIRUH QXPHURXV YHUVLRQV RI ZKDW 1HOVRQ *RRGPDQ FDOOHG ¶ZD\V RI ZRUOGPDNLQJ·³DUHDYDLODEOHWRWKHELRJUDSKHU7KH\UDQJHIURPWKHFODV VLFIDFWXDOELRJUDSK\WRZKDW$QVJDU1QQLQJ´9RQGHUILNWLRQDOHQ0H WDELRJDUSKLHµ ´)LFWLRQDO 0HWDELRJUDSKLHVµ  KDV FDOOHG ¶ELRJUDSKLFDO PHWDILFWLRQ· RU ¶ILFWLRQDO PHWDELRJUDSK\· 7KH IRUPHU³WKH IDFWXDO ELRJ UDSK\³FRQFHQWUDWHV RQ IDFWV WHQGV WR IROORZ WKH WUDGLWLRQDO SDWWHUQ RI EHJLQQLQJPLGGOHHQGDQGIRFXVHVRQDVWUDLJKWIRUZDUGGHYHORSPHQWRI FKDUDFWHU7KHILFWLRQDOPHWDELRJUDSK\LQFRQWUDVWGLVFDUGVIDFWXDOUHDOLW\ LQIDYRXURIPHWDILFWLRQDOUHIOHFWLRQVRQSUREOHPVRIUHFRQVWUXFWLRQDQG UHSUHVHQWDWLRQ ,Q ILFWLRQDO PHWDELRJUDSKLHV WKH HPSKDVLV LV WKXV SODFHG RQWKHLQGHWHUPLQDF\RIELRJUDSKLFDONQRZOHGJHDVZHOODVRQWKHHSLVWH PRORJLFDOXQFHUWDLQWLHVLQYROYHGLQWKHUHSUHVHQWDWLRQRIELRJUDSKLFDOIDFWV VHH $ 1QQLQJ ´)LFWLRQDO 0HWDELRJUDSKLHVµ II  )LFWLRQDO PH WDELRJUDSKLHVVXFKDV-XOLDQ%DUQHV·V)ODXEHUW·V3DUURW RU$6%\DWW·V 7KH%LRJUDSKHU·V7DOH VKRZWKDWWKHELRJUDSKHU·VVHDUFKIRUGHSHQG DEOH IDFWV DQG GLVDPELJXDWLRQ PXVW LQYDULDEO\ EH LQ YDLQ DV WKHUH LV QR

––––––– 

)RU D PRUH FRPSUHKHQVLYH DQG GHWDLOHG VXUYH\ RI WKH RWKHU VXEJHQUHV VHH $ 1QQLQJ ´)LFWLRQDO0HWDELRJUDSKLHVµII 



&DUROLQH/XVLQ

VXFKWKLQJDVDVLQJOHGHILQLWHWUXWKVHH0DDFN ,QVWHDGRISUHVHQW LQJ RQH GHILQLWHO\ ¶WUXH· VWRU\ %DUQHV $FNUR\G DQG %\DWW ´MX[WDSRVH VHYHUDO VWRULHV WKDW SUHVHQW WKH UHDGHU ZLWK KLJKO\ VHOIUHIOH[LYH LQWHUWH[ WXDO RU UDWKHU LQWHUPHGLDO ELRJUDSKLFDO TXHVWV IRU WKH UHVSHFWLYH ELRJUD SKHHµ$1QQLQJ´)LFWLRQDO0HWDELRJUDSKLHVµ  ,QDQDUWLFOHSXEOLVKHGLQ7KH*XDUGLDQLQWKHQRYHOLVWDQGFULWLF 'DYLG /RGJH SRLQWV RXW WKDW DQRWKHU ELRJUDSKLFDO VXEJHQUH KDV JDLQHG SRSXODULW\ VLQFH WKH V &RPELQLQJ FHUWDLQ FRQYHQWLRQV RI WKH QRYHO DQGRIELRJUDSK\WKHVRFDOOHG¶ILFWLRQDOELRJUDSK\·FHQWUHVRQDKLVWRULFDO SHUVRQDQGKLVRUKHUOLIH7KHQDUUDWLYHVWUDWHJLHVRIWKLVK\EULGJHQUHGR QRWSULPDULO\DLPDWWKHSUHVHQWDWLRQRI¶KDUG·IDFWVEXWHQFRXUDJHDXWKRUV WRWDNHUHFRXUVHWRWKHLPDJLQDWLYHSRVVLELOLWLHVRIILFWLRQLQRUGHUWRFORVH JDSVLQIDFWXDOLQIRUPDWLRQVHH/RGJH $FFRUGLQJWRDGHILQLWLRQE\,QD 6FKDEHUW´),&7,21$/%,2*5$3+E@LRJUDSK\LVIXQGDPHQWDOO\DQDUUDWLYHZKLFKKDVDVLWVSULPDU\WDVN WKHHQDFWPHQWRIFKDUDFWHUDQGSODFHWKURXJKODQJXDJH³DJRDOVLPLODUWR WKDW RI ILFWLRQµ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¶WUXWKRIILFWLRQ·DQGWKH¶WUXWKRIIDFW·KDVDO ZD\V ILJXUHG SURPLQHQWO\ LQ GLVFXVVLRQV DERXW WKH IDXOWV DQG PHULWV RI ZRUOGPDNLQJ LQ ILFWLRQDO DXWR ELRJUDSK\ ,Q QHZHU H[DPSOHV RI WKH

––––––– 

6LPLODUO\3K\OOLV5RVHVWDWHVWKDW´DUWIXOELRJUDSK\FRPSRVHGDQGQRWFRPSLOHGELRJUDSK\ >«@DVSLUHVWRWKHFRQGLWLRQRIWKHQRYHOµ 



&DUROLQH/XVLQ

JHQUH IRU H[DPSOH 'DYLG /RGJH·V $XWKRU $XWKRU   DQG &ROP 7yLEtQ·V7KH0DVWHU WKHLVVXHRIZRUOGPDNLQJPRUHSUHFLVHO\WKH TXHVWIRUWKHELRJUDSKLFDOVXEMHFWDVZHOODVWKHWHQVLRQEHWZHHQ¶IDFW·DQG ¶ILFWLRQ· SOD\ D FUXFLDO DQGFRPSOH[ UROH $ FORVHU ORRN DW WKHVH WZR ILF WLRQDOLVHGOLYHVRI+HQU\-DPHVQRWRQO\KHOSVWRLGHQWLI\FUXFLDOFKDUDFWHU LVWLFVRI(QJOLVKILFWLRQDOELRJUDSK\DWWKHWXUQRIWKHWZHQW\ILUVWFHQWXU\ EXW DOVR VKHGV OLJKW RQ VRPH PRUH JHQHUDO WHQGHQFLHV RI FRQWHPSRUDU\ ILFWLRQLQ(QJOLVK ¶7KH6XSUHPH1RYHOLVW·:RUOGPDNLQJLQ'DYLG/RGJH·V $XWKRU$XWKRU DQG&ROP7yLEtQ·V7KH0DVWHU  ,QWKHLUILFWLRQDOELRJUDSKLHVDERXW+HQU\-DPHV'DYLG/RGJHDQG&ROP 7yLEtQSURFHHGLQDQH[HPSODU\ZD\DFFRUGLQJWRWKHILYH¶DFWV·RIQDUUD WLYHZRUOGPDNLQJ$QVJDU1QQLQJLGHQWLILHVLQKLVDUWLFOHLQWKLVYROXPH 7KH DXWKRUV PXVW FKRRVH WKRVH LQFLGHQWV RI -DPHV·V OLIH WKDW DUH WR EH FRPH WKH HYHQWV RI WKHLU UHVSHFWLYH VWRULHV ,QWHJUDWLQJ WKHVH VHSDUDWH HYHQWVLQWRDQDUUDWLYHLHDVWRU\LQYROYHVDJUHDWGHDORIVHOHFWLRQGHOH WLRQ DEVWUDFWLRQ DQG SULRULWLVDWLRQ 7KH GLIIHUHQFHV EHWZHHQ WKH WZR ELRJUDSKLHV SURYH WKDW DV 1QQLQJ SRLQWV RXW WKHUH LV ´D SOXUDOLW\ RI VWRULHV QDUUDWLYHV WH[WV DQG RWKHU PHGLD SURGXFWV WKDWFDQ EH JHQHUDWHG DERXWDQ\HYHQWµ$1QQLQJLQWKLVYROXPH LQWKLVFDVHDERXWFHUWDLQ HYHQWVLQWKHOLIHRI+HQU\-DPHV 3HUVSHFWLYHDQGWKH%LRJUDSKLFDO6XEMHFW )RFXVLQJRQ+HQU\-DPHV·OLIHERWK/RGJHDQG7yLEtQWU\WRIXOILOZKDW -DPHV·VIULHQG(GPXQG*RVVHGHPDQGHGIURPDJRRGELRJUDSK\WKDWLW GUDZV´WKHIDLWKIXOSRUWUDLWRIDVRXOLQLWVDGYHQWXUHVWKURXJKOLIHµ  7KHVWUDWHJLHVWKH\HPSOR\LQRUGHUWRDFKLHYHWKLVDLPKRZHYHUDUHTXLWH GLIIHUHQWIURPWKRVH*RVVHPXVWKDYHKDGLQPLQG'DYLG/RGJHFHQWUHV $XWKRU $XWKRU $$  RQ -DPHV·V IDLOHG DWWHPSWV WR EHFRPH D SOD\ZULJKW DQGKLVHIIRUWVWRFRPHWRWHUPVZLWKWKHSXEOLFKXPLOLDWLRQWKLVHQWDLOHG ZKHUHDV&ROP7yLEtQJLYHVDOLQHDUDFFRXQWRI-DPHV·VPLGGOH\HDUVIURP WRZKLFKLVLQWHUUXSWHGE\IUHTXHQWIODVKEDFNV7KHFKDUPDQG TXDOLW\ RI $XWKRU $XWKRU DQG 7KH 0DVWHU 70  DUH GXH SUHFLVHO\ WR WKHLU ODFNRIDQ\IL[HGRURQHVLGHGMXGJPHQWVFRQFHUQLQJHLWKHUWKHVXEMHFWRI DUWRUWKHOLIHRI+HQU\-DPHVZKLFKUHVXOWVDERYHDOOIURPWKHQDUUDWLYH SHUVSHFWLYHWKHDXWKRUVKDYHFKRVHQ%RWKXVH-DPHVDVDIRFDOLVHUZKLFK QRW RQO\ JLYHV EHWWHU LQVLJKW LQWR KLV OLIH EXW HQFRXUDJHV UHDGHUV PRUH

:ULWLQJ/LYHVDQG¶:RUOGV·



VWURQJO\ WR V\PSDWKLVH RU LGHQWLI\ ZLWK KLP DQG WR SHUFHLYH WKH ZRUOG WKURXJKKLV´LGHRORJLFDOSHUVSHFWLYHµLH´KLV>«@YDOXHVDQGQRUPVµDV $QVJDU 1QQLQJ SXWV LW LQ WKLV YROXPH 7R VRPH GHJUHH WKRXJK ERWK DXWKRUV LQWURGXFH RWKHU SHUVSHFWLYHV WRR SDUWLFXODUO\ /RGJH LQ $XWKRU $XWKRU,QWKLVQRYHO·VFUXFLDOVHFWLRQZKLFKGHVFULEHVWKHIDLOXUHRI*X\ 'RPYLOOH RQ WKH VWDJH /RGJH GUDZV RQ PXOWLSHUVSHFWLYH SUHVHQWDWLRQ LQ RUGHUWRJLYHDPRUHPXOWLIDFHWHGEDODQFHGDQGOLYHO\DFFRXQWRIKLVEL RJUDSKHH $OWKRXJK 7yLEtQ LQ FRQWUDVW SHUVLVWHQWO\ VWLFNV WR MXVW RQH IRFDOLVHUKHDOVRLQWURGXFHVRWKHUSRLQWVRIYLHZ0RUHVSHFLILFDOO\7yLEtQ LQFRUSRUDWHV GLDORJXHV EHWZHHQ -DPHV DQG KLV IULHQGV RU DFTXDLQWDQFHV ZKLFK SURYLGH UHDGHUV ZLWK GLIIHUHQW HYHQ FRQWUDVWLQJ SHUVSHFWLYHV RQ KLP'LIIHUHQWDVWKHWZRQRYHOVVHHPDFORVHUORRNDWWKHLUVWUDWHJLHVRI HPSORWPHQWWKHUHIRUHUHYHDOVWKDWWKH\KDYHPXFKLQFRPPRQFRQFHUQLQJ ERWKWKHQDUUDWLYHWHFKQLTXHVDQGWKHWRSLFVWKH\H[SORUH %XWZK\KDYH/RGJHDQG7yLEtQFKRVHQ+HQU\-DPHVDVWKHLUVXEMHFW" ,VWKLVLQWHUHVWLQ+HQU\-DPHVMXVWDVRQHFULWLFVWDWHGZLWKUHIHUHQFHWR /RGJH·V$XWKRU$XWKRUDQHZZD\´WRSD\KRPDJHWRWKHQLQHWHHQWK>RU WZHQWLHWK@FHQWXU\ QRYHOµ *XLJQHU\  " ,Q KLV VDWLUH 0HQVRQJH   0DOFROP %UDGEXU\ ZKLPVLFDOO\ GHILQHV WKH LQWULFDF\ RI WKH RYHUDUFKLQJ JHQUHDVIROORZV´%LRJUDSKLHVDUHVDLGWREHILFWLRQVUHYHDOLQJPRUHDERXW WKHELRJUDSKHUWKDQWKH\GRDERXWWKHLUVXEMHFWVZKRRIFRXUVHGRQRW H[LVWDQ\ZD\µ ,URQLFDODQGKLJKO\H[DJJHUDWHGDVLWLVWKLVVWDWHPHQW QHYHUWKHOHVVJHWVWRWKHFRUHRIWKHPDWWHUGXHWRWKHQDWXUHRIWKHLUVXE MHFWILFWLRQDOELRJUDSKLHVDERYHDOOWKRVHDERXWDXWKRUVOHQGWKHPVHOYHV SHUIHFWO\ WR VHOISURMHFWLRQ VHOIUHIOH[LYLW\ DQG PHWDILFWLRQ VHH $ 1QQLQJ´)LFWLRQDOPHWDELRJUDSKLHVµ ,QWKLVUHVSHFW+HQU\-DPHV ZKR ZDV IUHTXHQWO\ SUDLVHG DV ´WKH VXSUHPH H[DPSOH LQ (QJOLVK RI WKH QRYHOLVW·VQRYHOLVWµ6DXQGHUV LVDSDUWLFXODUO\ILWWLQJVXEMHFWIRUKH DOORZV KLV ELRJUDSKHUV WR WKHPDWLVH VHYHUDO FUXFLDO LVVXHV FRQFHUQLQJ DX WKRUVKLSWKHYDULRXVOLQNVEHWZHHQDXWKRUVKLSDQGOLWHUDU\ZRUOGPDNLQJ DXWKRUVKLSDQGHWKLFVDVZHOODVDXWKRUVKLSDQGPHPRU\

–––––––  

0RUHRYHU WKLV PHWKRG HQDEOHV /RGJH WR GHVFULEH WKH SHUIRUPDQFH RI WKH SOD\ ZKLFK -DPHVGLGQRWDWWHQGKLPVHOI 6LPLODUO\ 2OVVRQ VWDWHV WKDW 7KH 0DVWHU ´LV D WH[W DERXW OLWHUDWXUH DQG ZULWLQJ DERXW WKH FRQGLWLRQVRIOLWHUDWXUHDQGWKHUHODWLRQRIOLWHUDWXUHWROLIHµ 6DXQGHUVJLYHVDPDWWHU RIIDFWEDFNJURXQGH[SODQDWLRQRIWKHLQWHUHVWLQ-DPHVDVVHUWLQJWKDW´WKHZD\IRUWKHVH QRYHOVZDVSUHSDUHGE\YHU\VSHFLILFGHYHORSPHQWVLQ-DPHVELRJUDSK\DQGFULWLFLVP7KH\ GLGQ·WFRPHRXWRIQRZKHUHRURXWRIDJHQHUDOLVHG¶=HLWJHLVW·EXWRXWRIUHFHQWUHWKLQNLQJ RI-DPHV·IULHQGVKLSVZLWKPHQDQGZRPHQµ 6LPLODUO\+DUYH\H[SRXQGVWKDW´LQWKH \HDU  WKH QDPH ¶+HQU\ -DPHV· LV V\QRQ\PRXV ZLWK /LWHUDWXUH³KLJK OLWHUDWXUH WKH JHQXLQHGLIILFXOWDUWLFOHµ 



&DUROLQH/XVLQ

$XWKRUVKLSDQG/LWHUDU\:RUOGPDNLQJ 1HLWKHU/RGJHQRU7yLEtQWDNHDQ\WURXEOHWRGLVJXLVHWKHVHOISURMHFWLRQ DQGVHOIUHIOH[LYLW\LQYROYHGLQWKHLUDFFRXQWVRI+HQU\-DPHV,QDQDUWLFOH SXEOLVKHGWZR\HDUVDIWHU7KH0DVWHU7yLEtQFRQVFLRXVO\VW\OLVHGKLPVHOIDV +HQU\ -DPHV·V GRSSHOJDQJHU 7yLEtQ GHVFULEHV KLPVHOI GXULQJ D VWD\ LQ )ORUHQFHZKHUHKHHPEDUNHGRQZULWLQJWKHQRYHODVIROORZV´,ZDVLQ P\ PLGIRUWLHV EDOG XQDWWDFKHG ERRNLVK , OLNHG FRPSDQ\ DQG , OLNHG EHLQJDORQH7KLVPHDQWWKDWWKHKRXVHDW6DQWD0DGGDOHQDZRUNHGZRQ GHUVIRUPH7KHUHZDVFRPSDQ\IRUOXQFKDQGVXSSHUEXWP\RZQTXDU WHUV ZHUH VDFURVDQFWµ 7yLEtQ ´+HQU\ -DPHV IRU 9HQLFHµ   ,Q WKLV GHVFULSWLRQ 7yLEtQ QRW RQO\ ORRNV OLNH +HQU\ -DPHV EXW DOVR VKDUHV KLV QHHGIRUXQGLVWXUEHGVROLWXGH7KHSDUDOOHOVEHWZHHQWKHWZRDXWKRUVHYHQ SHUWDLQ WR WKH QRYHO·V H[LVWHQWLDO GLPHQVLRQ )RU LQVWDQFH LQ WKH VDPH DUWLFOH 7yLEtQ ²  WUDFHV KLV FODXVWURSKRELF GHVFULSWLRQ RI -DPHV·V IDLOXUH DV D SOD\ZULJKW EDFN WR KLV RZQ H[SHULHQFH RI QRW KDYLQJ EHHQ DZDUGHGWKH%RRNHU3UL]HIRUKLVVKRUWOLVWHGQRYHO7KH%ODFNZDWHU/LJKWVKLS LQ3DUDOOHOVEHWZHHQ/RGJHDQGKLV-DPHVFDQHDVLO\EHIRXQGWRR OLNH-DPHV/RGJHDOVRWULHGWRZULWHIRUWKHVWDJHVHH*XLJQHU\ DQG MXVWOLNHWKH-DPHVKHGHSLFWVLQKLVQRYHOKHLVDOUHDG\DIDPRXVDXWKRULQ KLV ODWHU \HDUV (YHQ WKH QRYHOLVWV· FKRLFHV FRQFHUQLQJ ZHLJKWLQJ RU HP SKDVLVVHHPWRFRQIRUPWRSHUVRQDOLQWHUHVWVRUSUHGLVSRVLWLRQVZKHUHDV /RGJHFRQFHQWUDWHVPDLQO\RQTXHVWLRQVRIIDPHLQWHJULW\DQG¶VHOODELOLW\· WKH ,ULVK 7yLEtQ ZKR KDV ZULWWHQ D PRQRJUDSK RQ KRPRVH[XDO DUWLVWV /RYH LQ D 'DUN 7LPH *D\ /LYHV IURP :LOGH WR $OPRGyYDU   TXLWH VWURQJO\ IRUHJURXQGV-DPHV·V ,ULVKRULJLQV DV ZHOO DVKLV SUHVXPHG ODWHQW KRPRVH[XDOLW\ ,QERWKQRYHOVKRZHYHUVHOISURMHFWLRQDQGVHOIUHIOH[LYLW\JRIDUEH \RQGWKHPHUHO\SHUVRQDO$FFRUGLQJWR7yLEtQLWLVLPSRVVLEOHWRLGHQWLI\ ´WKHDPRXQWRIWKHVHFUHWVHOIWKDWJRHVLQWRDQ\ERRNµ DQGWRGH ILQHWKHQDUURZOLQHEHWZHHQLQYHQWLRQDQGDXWRELRJUDSK\7yLEtQ·VLQWHQ WLRQLQEDULQJWKLVDXWRELRJUDSKLFDOGLPHQVLRQWKRXJKLVWRGHPRQVWUDWH KRZILFWLRQZRUNV , DP SRLQWLQJ WKLV RXW³PXFK RI LW LV REYLRXV³PHUHO\ WR VKRZ WKDW P\ RZQ PHWKRGRIPHUJLQJWKHGHHSO\SHUVRQDOZLWKWKHLPDJLQHGPDWWHUVZKLFKFRPH GHOLEHUDWHO\DQGDOVRXQZLOOLQJO\DQGXQFRQVFLRXVO\EHORQJVWRWKHPDLQPHWKRG E\ZKLFKQRYHOLVWVZRUNDQGE\ZKLFK-DPHVKLPVHOIWKHVXSUHPHQRYHOLVWDOVR ZRUNHG7yLEtQ´+HQU\-DPHVIRU9HQLFHµ 

––––––– 

,QWKHQRYHOLWVHOIWKRXJKDQ\WUDFHVRIWKHDXWKRUVKRXOGDFFRUGLQJWR7yLEtQGLVDSSHDU HQWLUHO\$VKHZULWHVDERXWKLVH[SHULHQFHVLQUHDGLQJ-DPHV´,QHYHURQFHWKRXJKWDERXW

:ULWLQJ/LYHVDQG¶:RUOGV·



:KLOH 7yLEtQ KDV NHSW DQ\ VXFK VWDWHPHQWV RXW RI KLV ILFWLRQ /RGJH PDNHV KLV SURWDJRQLVW WKLQN WKH YHU\ VDPH ´:ULWLQJ ILFWLRQ KRZHYHU DUWIXOZDVLQHYLWDEO\WRVRPHGHJUHHDQH[SRVXUHRIWKHDXWKRU·VRZQVHOI KLVRZQVRXOµ$$ ,QRWKHUZRUGV7KH0DVWHUDQG$XWKRU$XWKRUDUH E\ QR PHDQV RQO\ GHVLJQHG WR GHSLFW WKH OLIH RI D IDPRXV QRYHOLVW RU WR PLUURUWKHLGLRV\QFUDVLHVRIWKHLUDXWKRUVEXWDUHPHDQWWRLOOXVWUDWHFHU WDLQDVSHFWVRIDXWKRUVKLSDQGQDUUDWLYHZRUOGPDNLQJLQJHQHUDO7KHWLWOH $XWKRU$XWKRUUHIHUVSULPDULO\WRWKHIDWDOFDOOZLWKZKLFK-DPHVZDVOXUHG RQWRWKHVWDJHDIWHUWKHFRPSOHWHIDLOXUHRI*X\'RPYLOOH,WDOVRGUDZVWKH UHDGHU·VDWWHQWLRQWRWKHDXWKRUDQGKLVVXEMHFWDQRWKHUDXWKRU6LPLODUO\ WKHWLWOH7KH0DVWHUUHIHUVOHVVWR+HQU\-DPHVDVDQLQGLYLGXDOLVHGSHUVRQ WKDQWRKLVRXWVWDQGLQJDFKLHYHPHQWVDVDQDXWKRU,QWKLVZD\WKHLVVXHRI ZULWLQJ DXWKRUVKLS DQG WKXV FUHDWLYH ¶ZRUOGPDNLQJ· LV IRUHJURXQGHG LQ ERWKQRYHOVIURPWKHEHJLQQLQJ 2EYLRXVO\ILFWLRQDOELRJUDSKLHVOLNH$XWKRU$XWKRUDQG7KH0DVWHUDUH GHWHUPLQHG QRW RQO\ E\ WKHLU UHVSHFWLYH DXWKRU·V ZD\V RI VKDSLQJ WKH ZRUOG 7KH\ DOVR VWDJH WKH FRUUHVSRQGLQJ VWUDWHJLHV RI WKHLU DXWKRU VXEMHFWV,QWKHVHQRYHOVLWLVWKHUHIRUHWKHDXWKRUZKRUHDOO\FRPHVWRWKH IRUH DV DQ DJHQW RI ZRUOGPDNLQJ $XWKRUV VNHWFK WKH ZRUOGV RI DXWKRUV ZKRZHUHLQWXUQHQJDJHGLQILFWLRQDOZRUOGPDNLQJ1HJRWLDWLQJWKHWHQ VLRQEHWZHHQ¶IDFW·DQG¶ILFWLRQ·WKHELRJUDSKLHV·DXWKRUVWU\WRHYRNHWKH OLYHV DQG ¶ZRUOGV· RI RWKHU DXWKRUV 7KXV ¶ZRUOGPDNLQJ· KHUH LQYROYHV D PDQ\OD\HUHG SURFHVV ,Q $XWKRU $XWKRU 'DYLG /RGJH WHQGV WR GHYLDWH IURPKLVRZQXVXDOZD\RIZULWLQJWRLPLWDWHWKHHODERUDWHO\HOHJDQWVW\OH RI+HQU\-DPHVLQVWHDGMXVWDV7yLEtQGRHVLQ7KH0DVWHU,QWKDWUHVSHFW WKH WHUP ¶ZD\V RI ZRUOGPDNLQJ· ILWV WKHVH ZRUNV RI DUW SHUIHFWO\ 7KH\ UHDOO\ DUH ´FXOWXUDOO\ VKDSHG ZRUOG PRGHOV RU YHUVLRQVµ $ 1QQLQJ LQ WKLVYROXPH LQWKHPRVWOLWHUDOVHQVHRIWKHWHUP+RZHYHUWKHWZRQRY HOV DUH ¶ILFWLRQDO ELRJUDSKLHV· QRW RQO\ E\ JHQUH %RWK DXWKRUV VKLIW WKH PHDQLQJRIWKHWHUP¶ELRJUDSK\·ZKLFKLVFRPSRVHGRIWKH*UHHNZRUGV IRU¶OLIH·¶ELRV· DQG¶ZULWLQJ·¶JUDSKLD· WRDPRUHJHQHUDOPHWDILFWLRQDO SODQH 7KH\ VKRZ KRZ ¶OLIH· EHFRPHV ¶OLWHUDWXUH· KRZ ¶UHDOLW\· EHFRPHV ¶QDUUDWLYH·,QRWKHUZRUGV7KH\GHVFULEHKRZWKHUHDOZRUOGEHFRPHVD ILFWLRQDOZRUOG $V IDU DV WKLV FRQQHFWLRQ RI OLIH OLWHUDWXUH DQG ZRUOGPDNLQJ LV FRQ FHUQHG +HQU\ -DPHV SURYHV D SDUWLFXODUO\ ILWWLQJ VXEMHFW 6LQFH -DPHV LV NQRZQ IRU PRGHOOLQJ WKH WRSLFV RU SORWV RI KLV VWRULHV RQ UHDOOLIH LQFL

––––––  

+HQU\ -DPHV KLPVHOI +H VHHPHG EHDXWLIXOO\ DEVHQW IURP KLV RZQ QRYHO ZKLFK ZDV DQ RWKHUDVSHFWRIKLVSRZHUµ7yLEtQ´+HQU\-DPHVIRU9HQLFHµ  )RUDZKROHUDQJHRIIXUWKHUH[SODQDWLRQVRIWKLVWLWOHVHH*XLJQHU\² )RUGHWDLOVDVZHOODVDFULWLFDOHYDOXDWLRQRIWKHLUUHVSHFWLYHVW\OLVWLFH[SHULPHQWVVHH6DXQ GHUV² 



&DUROLQH/XVLQ

GHQWV KH PHHWV WKH GHPDQGV RI LOOXVWUDWLQJ WKH IRUWXQHV DQG KD]DUGV RI OLWHUDU\ZRUOGPDNLQJYHU\ZHOO'XHWRWKLVKDELWRIWXUQLQJUHDOOLIHPDWH ULDO LQWR VWRULHV KH JLYHV KLV ELRJUDSKHUV WKH SHUIHFW RSSRUWXQLW\ WR DG GUHVVWKHFRPSOH[UHODWLRQVKLSRIOLWHUDWXUHDQGUHDOLW\$WWKHEHJLQQLQJRI $XWKRU$XWKRUIRULQVWDQFHWKHG\LQJPDVWHUPXPEOHVVLJQLILFDQWVFUDSV RIRQHRIKLVPRVWIDPRXVPDWXUHVWRULHV´7KH%HDVWLQWKH-XQJOHµ´,W·V WKHEHDVWLQWKHMXQJOHDQGLW·VVSUXQJµ$$ 7KHIXOOPHDQLQJRIWKLV VHQWHQFHEHFRPHVFOHDURQO\LQWKHFRXUVHRIWKHQRYHO,QWKHIUDPHVWRU\ WKHUHDGHULVRQO\WROGWKHSORWRIWKDWVWRU\ZKLFKFHQWUHVRQXQUHTXLWHG ORYHRQWKHLQDELOLW\WRORYHDQGRQGHDWK,QWKHPLGGOHVHFWLRQ/RGJH WKHQHODERUDWHVRQWKHVWRU\·VSRVVLEOHRULJLQV-DPHV·VLQWLPDWHEXWDWWKH VDPHWLPHGLVWDQFHGDQGSODWRQLFUHODWLRQVKLSZLWKWKH$PHULFDQH[SDWUL DWHZULWHU&RQVWDQFH)HQLPRUH:RROVRQZKLFKHQGHGZLWKKHUFRPPLW WLQJ VXLFLGH 9LFH YHUVD /RGJH DOVR UHIHUV WR D QXPEHU RI :RROVRQ·V VWRULHVZKLFKDUHLQWXUQPRGHOOHGRQKHUH[SHULHQFHVZLWK+HQU\-DPHV ,QRUGHUWRVWUHVVWKHFRQQHFWLRQRIOLIHDQGOLWHUDWXUHIXUWKHU/RGJHHYHQ SURYLGHVVRPHNLQGRID¶UHDOOLIHH[DPSOH·IRUWKLVVWRU\ZKLFKKHLQVHUWV DV PLVH HQ DEvPH LQWR WKH IUDPH WKH UHODWLRQVKLS EHWZHHQ WZR RI -DPHV·V VHUYDQWV QRW RQO\ UHVHPEOHV WKDW RI -DPHV DQG :RROVRQ EXW SHUIHFWO\ FRUUHVSRQGVWRWKHSDWWHUQGHVFULEHGLQ´7KH%HDVWLQWKH-XQJOHµ,Q7KH 0DVWHU7yLEtQSURFHHGVVLPLODUO\FRQQHFWLQJGLIIHUHQWOHYHOVRIILFWLRQDQG UHDOLW\+HUHIHUVWRWKHUHDOOLIHLPSOLFDWLRQVRI´7KH%HDVWLQWKH-XQJOHµ WRR IRU KH PDNHV KLV SURWDJRQLVW EHJLQ WKH VWRU\ DW WKH QRYHO·V HQG 0RUHRYHULQKLVDFFRXQWRI-DPHV·VOLIH7yLEtQEOHQGVKLVILFWLRQ-DPHV·V ILFWLRQ DQG ELRJUDSKLFDO GRFXPHQWV 7KLV LV EHVW LOOXVWUDWHG E\ D VFHQH IURP7KH0DVWHUII LQZKLFK\RXQJ+HQU\ZDONVZLWKKLVIDWKHURQD EHDFK7KLVVFHQHLQZKLFK-DPHVVHQLRUVWDUHVDWDEDWKLQJZRPDQJRHV EDFNWRDQHYHQWLQWKH\HDUZKLFKKHUHFRUGHGLQDOHWWHUWR$QQH :DUG«@ DQG WKH\ KDYH DOZD\V EHHQ ERWK , DOZD\V VD\ WKDW \RX·YH JRW WR EH DQ DUWLVW ZKHQ \RX ZULWHDQRYHODQGDEXVLQHVVPDQZKHQ\RXSXEOLVKLW³EXWLW·VTXLWHGLIIL FXOWWRNHHSWKDWVHSDUDWLRQ·µ7RQNLQ 7KHDUWLVWLFYDOXHRIDZRUNRIDUW KRZHYHUKDVLWVIRXQGDWLRQVDWOHDVWSDUWLDOO\LQWKHUHODWLRQEHWZHHQDX WKRUVKLSDQGPHPRU\ $XWKRUVKLSDQG0HPRU\ 7KH FRQQHFWLRQ RI DXWKRUVKLS DQG PHPRU\ FRQFHUQV ERWK WKH FUHDWLYH SURFHVVDQGWKHFRPSOHWHGZRUNRIDUW'XHWR-DPHV·VPHWKRGRIWXUQLQJ UHDOOLIH LQFLGHQWV DQG FKDUDFWHUV H[SHULHQFHV KH PDGH RU VWRULHV KH ZDV WROGLQWRILFWLRQKLVZRUNVEHFRPHDUHVHUYRLURIWKHSDVWDQGRIKLVSDVW VHOI,QKLVHVVD\RQ-DPHV7yLEtQSRLQWVWRWKHPQHPRQLFTXDOLW\ZKLFK -DPHV·V ZRUNV DFKLHYH LQ WKDW ZD\ ´:H SUHVXPH WKDW -DPHV· QRYHOV DUH SHSSHUHGZLWK>«@UDLGVRQWKHUHDODVDZD\RIDQFKRULQJWKHPLQWLPHDV D ZD\ RI UHVWRULQJ ZKDW LV ORVW WR WKH SXEOLFLW\ RI WKH SULQWHG SDJHµ ´+HQU\ -DPHV IRU 9HQLFHµ   ,Q7KH0DVWHU 7yLEtQ HYHQ VKRZV KRZ WKLVSHUWDLQVWRRWKHUSHRSOH·VOLYHVWRR)RULQVWDQFH-DPHVKDVREYLRXVO\ ¶SURORQJHG·KLVGHDGFRXVLQ·VOLIHE\JLYLQJKHUDQRWKHUOLIHLQKLVILFWLRQ ´,Q3RRU5LFKDUGKHKDGVHQWKHUWR(XURSHZKHUHVKHGLGQRWPDUU\,Q 'DLV\0LOOHU LQ ZKLFK KH KDG HPSKDVLVHGKHUEUDVKQHVV DQG EUDYHU\ DQG FDUHOHVVDWWLWXGHWRFRQYHQWLRQVVKHKDGGLHGLQ5RPH,Q7UDYHOOLQJ&RP

–––––––  ,Q RUGHU WR GUDPDWLVH WKLV DVSHFW RI DXWKRUVKLS HYHQ IXUWKHU DQG WR VWUHVV LWV UHOHYDQFH ERWK/RGJHDQG7yLEtQLQWURGXFHDQRWKHUDUWLVWILJXUHZKLFKPD\EHVHHQDVDFRQWUDVWRU FRPSOHPHQWWR+HQU\-DPHV,Q$XWKRU$XWKRUWKLVLV-DPHV·VDUWLVWIULHQGDQGFDULFDWXULVW *HRUJH'X0DXULHUZKRQRWRQO\OLYHGZLWKDYHU\OLYHO\DQGEORVVRPLQJIDPLO\EXWDOVR DFKLHYHGWUHPHQGRXVVXFFHVVZLWKKLVSRSXODUQRYHO7ULOE\,Q7KH0DVWHUWKH\RXQJHJR WLVWLFDO DQG KLJKO\ DPELWLRXV VFXOSWRU +HQGULN $QGUHVHQ³ZKRP -DPHV EHIULHQGV LQ 5RPH³IXOILOVDVLPLODUIXQFWLRQ

:ULWLQJ/LYHVDQG¶:RUOGV·



SDQLRQVKHKDGLQYHQWHGDPDUULDJHIRUKHUµ70 7KXVERWKQRYHOV GUDZEDFNRQWKHDJHROGWRSRVRIDUWDVDPHDQVWRUHDOLVHORVWSRVVLELOL WLHVDQGDERYHDOOWRDFKLHYHLPPRUWDOLW\ +RZHYHU/RGJHDQG7yLEtQHYRNHDQRWKHUNLQGRILPPRUWDOLW\LQH[ WULFDEO\ OLQNHG WR FRQVFLRXVQHVV DQG WKH OLIH RI WKHPLQG ,Q KLV SUHIDFH /RGJHVWDWHVZLWKUHJDUGWRWKHQRYHO·VVWUXFWXUH´,WEHJLQVDWWKHHQGRI WKHVWRU\RUQHDUWKHHQGDQGWKHQJRHVEDFNWRWKHEHJLQQLQJDQGZRUNV LWVZD\WRWKHPLGGOHDQGWKHQUHMRLQVWKHHQGZKLFKLVZKHUHLWEHJLQV «µSUHIDFH 7KHIUDPHVWRU\RI$XWKRU$XWKRULVGHYRWHGWRWKHODVWGD\V RI-DPHV·VOLIHKLVGHDWKDQG³WRVRPHH[WHQW³KLVDIWHUOLIH+RZHYHUWKH HQGGRHVQRWMXVWUHMRLQWKHQRYHO·VEHJLQQLQJLQGHVFULELQJ-DPHV·VGHDWK LW DOVR FRQVWLWXWHV WKH EHJLQQLQJ RI KLV SRVWKXPRXV IDPH ,Q TXLWH DQ XQH[SHFWHG UHFRXUVH WR D SRVWPRGHUQLVW GHYLFH WKH QRYHO·V DXWKRU QRZ HQWHUVWKHGLVFRXUVH'UDZLQJRQRQHRI-DPHV·VHVVD\V/RGJHFRPSOHWHV WKH QRYHO ZLWK JHQHUDO WKRXJKWV RQ DUW DQG LPPRUWDOLW\ DV VXFK %HIRUH /RGJHKDGPDGH-DPHVFRQIHVVKLVPRGHUQLVWDUWLVWLFFUHGR´¶&RQVFLRXV QHVVLVP\UHOLJLRQKXPDQFRQVFLRXVQHVV5HILQLQJLWLQWHQVLI\LQJLW³DQG SUHVHUYLQJ LW·µ   )XQFWLRQLQJ DV D PHGLDWRU EHWZHHQ -DPHV DQG WKH UHDGHU/RGJHQRZOLQNVWKLVFUHGRWRLPPRUWDOLW\ZKHQKHVD\VDERXWKLV ELRJUDSKHHLQFRUSRUDWLQJ-DPHV·VRZQZULWLQJLQUHJXODUSULQW 6R ZKDW JLYHV KLP DQ\ FRQILGHQFH LQ WKH SRVVLELOLW\ RI SHUVRQDO LPPRUWDOLW\" 6LPSO\¶WKHDFFXPXODWLRQRIWKHYHU\WUHDVXUHLWVHOIRIFRQVFLRXVQHVV·DQDFFXPX ODWLRQ KHLJKWHQHG DQG UHILQHG E\ WKH FLUFXPVWDQFH RI EHLQJ DQ DUWLVW ,W LV LQ D ZRUG WKH DUWLVWLF FRQVFLRXVQHVV DQG SULYLOHJH LQ LWVHOI WKDW WKXV VKLQHV DV IURP LPPHUVLRQ LQ WKH IRXQWDLQ RI EHLQJ ,QWR WKDW IRXQWDLQ >«@ RXU VSLULW GLSV³WR WKHHIIHFWRIIHHOLQJLWVHOITXDLPDJLQDWLRQDQGDVSLUDWLRQDOOVFHQWHGZLWKXQLYHU VDOVRXUFHV>«@>+@RZFDQZHDIWHULWKROGFRPSOHWHGLVFRQQHFWLRQOLNHO\"$$  

$OWKRXJK7KH0DVWHUGRHVQRWKDYHVXFKDPDUNHGFLUFXODUDQGWKHUHIRUH ¶SUHVHUYLQJ·VWUXFWXUHDV$XWKRU$XWKRU7yLEtQDFKLHYHVDFORVXUHVLPLODU WR/RGJH·V:KLOHWKHILUVWOLQHVRI7KH0DVWHULQFOXGHDGUHDPDERXWWKH GHDG WKH QRYHO·V ILQDO VHQWHQFH PHQWLRQV OLIH DQG WKH ZRUOG EHLQJ ´UH PHPEHUHGDQGFDSWXUHGDQGKHOGµ 2QDPRUHDEVWUDFWOHYHOERWK DXWKRUV WKXV VWDUW ZLWK GHDWK DQG HQG ZLWK VRPH NLQG RI LPPRUWDOLW\ 0RUHRYHUDWWKHHQGRI7KH0DVWHU7yLEtQGHVFULEHVDGLVFXVVLRQEHWZHHQ (GPXQG *RVVH DQG +HQU\·V EURWKHU :LOOLDP -DPHV RQH RI WKH PRVW UHQRZQHGVFLHQWLILFVSHFLDOLVWVLQFRQVFLRXVQHVV

–––––––  )RUDFORVHUUHDGLQJRIWKH´PHPRU\VWUXFWXUHµRI7KH0DVWHUVHH2OVVRQII



&DUROLQH/XVLQ

7KHZRUOGEH\RQGWKHVHQVHLQZKLFKDVSKHUHRIOLIHPRUHSRZHUIXODQGODUJHU WKDQ RXUVHOYHV H[LVWV PD\ EH FRQWLQXRXV ZLWK RXU FRQVFLRXVQHVV DQG ZH PD\ NQRZ WKLV DQG WKLV PD\ FDXVH XV WR EHOLHYH RU KDYH UHOLJLRXV IHHOLQJ KRZHYHU YDJXHLQDPRUHVDWLVI\LQJZD\WKDQZHKDYHUHOLJLRXVDUJXPHQW70 

:KLOH 7yLEtQ GRHV QRW FRQQHFW WKLV NLQG RI LPPRUWDOLW\ WR OLWHUDWXUH DV H[SOLFLWO\ DV /RGJH GRHV KH OLQNV LW WR WKH SURFHVVRI HQJDJLQJ LQ VRPH WKLQJ RXWVLGH RQH·V FRQVFLRXVQHVV WRR $IWHU DOO WKLV LV SUHFLVHO\ ZKDW D ZULWHU ZKRVH ZRUN LV GHYRWHG WR FRQVFLRXVQHVV DQG WR WKH PLQG GRHV :KDWLVVHHQDVWKHJDWHZD\WRLPPRUWDOLW\DSSHDUVLQERWKFDVHVWREHQRW MXVW DV LQ +RUDFH·V ¶([HJLPRQXPHQWXP· WKH ZRUNRI DUW LWVHOI EXW WKH LPDJLQDWLYH SURFHVV LQYROYHG LQ FUHDWLQJ LW ,Q RWKHU ZRUGV ERWK /RGJH DQG7yLEtQKHUHGRQRWIRUHJURXQGWKHZRUOGWKDWLVPDGHEXWWKHSUR FHVV RI ¶ZRUOGPDNLQJ· LQ LWVHOI WKH IDFW RIEHLQJ FUHDWLYHO\ DFWLYH $W WKH VDPHWLPHWKRXJKERWKDXWKRUVDOVRUHIOHFWRQWKHLURZQSUHVHQWOLWHUDU\ LHELRJUDSKLFDODFWLYLW\LQYHVWLJDWLQJLQWRWKHUHODWLRQVKLSEHWZHHQOLWHUD WXUHDQGUHDOLW\ 7KH¶7UXWKRI)LFWLRQ·DQGWKH¶7UXWKRI)DFW· $GGUHVVLQJ WKHPVHOYHV WR WKH FRQWUDVW EHWZHHQ WKH ¶WUXWK RI ILFWLRQ· DQG WKH¶WUXWKRIIDFW·/RGJHDQG7yLEtQLQDILQDOVHOIUHIOH[LYHWXUQVLPXOWD QHRXVO\LQYHVWLJDWHWKHVSHFLRXVRSSRVLWLRQRI¶ILFWLRQ·DQG¶ELRJUDSK\·,Q $XWKRU$XWKRU/RGJHOHWV-DPHVLQWRQHDELWWHUVWULNHDJDLQVWFRQYHQWLRQDO ELRJUDSK\ LQ ZKLFK WKH YRLFH RI WKH DXWKRU KLPVHOI LV KDUGO\ GLVJXLVHG ´7KHUHLVQRSULYDF\QRGHFHQF\DQ\PRUH-RXUQDOLVWVLQWHUYLHZHUVELRJ UDSKHUV³WKH\·UH SDUDVLWHV ORFXVWV WKH\ VWULS HYHU\ OHDI 7KH DUW ZH ODY LVK³WKHSDLQVZHWDNH³WRFUHDWHLPDJLQDU\ZRUOGV³LVZDVWHGRQWKHP 7KH\ FDUH RQO\ IRU WULYLDO IDFWµ $$   :KLOH -DPHV FDULFDWXUHG WKH ELRJUDSKHU·V XQTXHQFKDEOH WKLUVW IRU VHQVDWLRQDO IDFWV LQ KLV QRYHOOD 7KH $VSHUQ3DSHUVWRZKLFK$XWKRU$XWKRUDQG7KH0DVWHUPDNHJHQHURXVUHI HUHQFH-DPHV·¶ELRJUDSKHUV·/RGJHDQG7yLEtQHYDGHVHQVDWLRQDOLVWSLWIDOOV E\ KLJKOLJKWLQJ WKH ¶WUXWK RI ILFWLRQ· $V IDU DV ZRUOGPDNLQJ ELRJUDSK\ DQG ILFWLRQ DUH FRQFHUQHG WKH\ DGRSW D VWDQFH WKDW VWURQJO\ UHVHPEOHV WKRVHRIERWK1HOVRQ*RRGPDQDQG&.6WHDG-DPHV·VVHOIDSSHDUVWR EHFRPSRVHGDQGVXSSOHPHQWHGE\KLVILFWLRQEHFDXVHDV7yLEtQPXVHV LQ7KH0DVWHU´HDFKERRNKHKDGZULWWHQHDFKVFHQHGHVFULEHGRUFKDUDF WHU FUHDWHG KDG EHFRPH DQ DVSHFW RI KLP KDG HQWHUHG LQWR KLV GULYHQ VSLULWDQGOD\WKHUHPXFKDVWKH\HDUVWKHPVHOYHVµ )RUFRQFOXVLRQV

–––––––  ,URQLFDOO\RIFRXUVH/RGJHLQWKLVQRYHOIXQFWLRQVDVDELRJUDSKHUKLPVHOI

:ULWLQJ/LYHVDQG¶:RUOGV·



FRQFHUQLQJ -DPHV·V OLIH DQG SHUVRQDOLW\ ERWK ¶ELRJUDSKHUV· WKHUHIRUH QRW RQO\UHO\RQGRFXPHQWDU\VRXUFHVEXWGRDWOHDVWWKHVDPHGHJUHHGUDZRQ -DPHV·VILFWLRQ $VDSULPHH[DPSOHIRUWKHLQWULFDWHOLQNEHWZHHQWKHDXWKRUDQGKLV ZRUN/RGJHDQG7yLEtQUHIHUWR-DPHV·VODWHVWRU\´7KH%HDVWLQWKH-XQ JOHµ $XWKRU $XWKRU SUDFWLFDOO\ EHJLQV ZLWK WKDW VWRU\ EHLQJ PHQWLRQHG ZKHUHDV7KH0DVWHUHQGVZLWK-DPHVSODQQLQJWRZULWHLW7KHVWRU\·VSORW DV7yLEtQVXPVLWXSLVTXLWHVLPSOHWKH3URWDJRQLVW´WHOOVDZRPDQRIKLV XQNQRZQ FDWDVWURSKH DQG VKH EHFRPHV KLV JUHDWHVW IULHQG EXW ZKDW KH GRHVQRWVHHLVWKDWKLVIDLOXUHWREHOLHYHLQKHUKLVRZQFROGQHVVLVWKH FDWDVWURSKH LW KDV FRPH DOUHDG\ LW KDV OLYHG ZLWKLQ KLP DOO DORQJµ 70  7KLVVWURQJO\DXWRELRJUDSKLFDOVWRU\ZKLFKGHDOVZLWKWKHIDLOXUHWR ORYHDQGUHDOO\HQJDJHLQKXPDQUHODWLRQVKLSVUHSUHVHQWVWKHYHU\FRUHRI ERWK QRYHOV 7yLEtQ OLQNV WKLV IDLOXUH ZKLFK KH LOOXVWUDWHV ZLWK -DPHV·V IODZHGUHODWLRQVKLSWR$OLFH-DPHV0LQQLH7HPSOHDQG&RQVWDQFH)HQL PRUH:RROVRQWR-DPHV·VSURIHVVLRQDOQHHGIRUVROLWXGH/RGJHVWUHVVHV WKHFRQQHFWLRQEHWZHHQDUWDQGKXPDQIDLOXUHHYHQPRUHVWURQJO\ZKHQ KHTXRWHV0DGDPH)ODXEHUWZULWLQJWRKHUVRQ´¶«@WRWKHLUEHOLHIVGHVLUHVWKHRULHVYDOXHV DQG VR RQµ   7KHVLJQLILFDQFH RI QDUUDWLYHV WKHQ OLHV LQ WKH DELOLW\ WR JLYH H[SUHVVLRQ WR WKH VRFDOOHG UHOLJLRXV H[SHULHQFH HQDEOLQJ WKH KXPDQ EHLQJWRJLYHDQDFFRXQWRIKLVRUKHUIHHOLQJVRIDZHIHDUORYHDQGGH SHQGHQF\RQ¶VRPHWKLQJEH\RQG·,WLVLPSHUDWLYHWRVWUHVVKRZHYHUWKDW QDUUDWLYHVQHLWKHUVLPSO\UHSUHVHQWWKHUHOLJLRXVH[SHULHQFHQRUFDQWKH\ EHUHJDUGHGDVDQHXWUDOFRQWDLQHURIVRPHUHOLJLRXVRUWKHRORJLFDOFRQWHQW 5DWKHUWKH\JHQHUDWHYHUVLRQVRIWKHVHOI·VZRUOGLQPRVWSURGXFWLYHZD\V %\ FRXFKLQJ HYHQWV VWDWHV IHHOLQJV DQG WKRXJKWV LQ FDXVDOWHOHRORJLFDO RUGHUZLWKDEHJLQQLQJDPLGGOHDQGDQHQGQDUUDWLYHVLPSRVHRUGHUDQG PHDQLQJRQFRQWLQJHQWH[SHULHQFHDQGHVWDEOLVKPHDQLQJIXOFRQQHFWLRQV

–––––––

 7KLV WKHVLV LV RI FRXUVH PRVW FRPSUHKHQVLYHO\ FRQGXFWHG LQ KLV IDPRXV ERRN :D\V RI :RUOGPDNLQJ  ,QKLVHVVD\%HO]HQSRLQWVRXW´)RUZKDWHYHUUHOLJLRQPD\EHEHVLGHVWKLVLWLVLQDQ\FDVH DOVR D UHVHUYRLU RI YHUEDO HOHPHQWV VWRULHV LQWHUSUHWDWLRQV SUHVFULSWLRQV DQG FRPPDQG PHQWVZKLFKLQWKHLUSRZHUWRGHWHUPLQHH[SHULHQFHDQGFRQGXFWDQGLQWKHLUOHJLWLPL]D WLRQSRVVHVVQDUUDWLYHFKDUDFWHUµ² 

)LFWLRQDO1DUUDWLYHVDQG7KHLU:D\VRI6SLULWXDO:RUOGPDNLQJ



ZKLFKUHQGHUVUHDOLW\LQWHOOLJLEOHWRWKHVXEMHFWVHH5LF±XU 0XFKRI QDUUDWLYHZRUOGPDNLQJWKHQGHULYHVIURPWKLVFRQILJXUDWLRQDODFWRIQDU UDWLQJ ZKHUH WHPSRUDOO\ DQG WKHPDWLFDOO\ GLYHUVH HOHPHQWV DUH JDWKHUHG DQGMRLQHGWRJHWKHUWRIRUPDPHDQLQJIXOZKROHVHH1HXPDQQ  0RUHRYHU ZKDW PDNHV QDUUDWLYH DWWUDFWLYH DV D PRGH IRU UHOLJLRXV ZRUOGFRQVWUXFWLRQLVWKDWWKH\RIIHUDSODFHZKHUHVXEMHFWLYHH[SHULHQFH DQGWKHVHOI·VLPDJLQDWLRQRI*RGLVMRLQHGWRRYHUDUFKLQJVDFUHGVWRULHV WKDW DUH SDUWLFXODU RI D VSHFLILF UHOLJLRQ 7KLV DVSHFW LVZHOO H[SUHVVHG E\ 6WHSKHQ&ULWHVZKRSRLQWVRXWWKDW´WKHVDFUHGVWRU\IRUPVWKHYHU\FRQ VFLRXVQHVVWKDWSURMHFWVDWRWDOZRUOGKRUL]RQµ ,QWKLVZRUOGRIFRQ VFLRXVQHVVWKHVHOIWKDWLVRULHQWHGWRLWFUHDWHVLQWXUQLWVRZQVWRU\7KH SHUIRUPDWLYHIRUFHRIVDFUHGVWRULHVLVQRWDEO\H[HUWHGE\QDUUDWLYHGHYLFHV VXFKDVVFKHPDWDVFULSWVLPDJHVRUSORWZKLFKVHUYHDVDIUDPHRIUHIHU HQFHIRULQGLYLGXDODQGFRPPXQDOVWRU\WHOOLQJ&RQVLGHUIRUH[DPSOHWKH FORVHFRQQHFWLRQEHWZHHQWKHVHOI·VQDUUDWLYHDQGWKHELEOLFDOVWRULHVLQWKH VSLULWXDO DXWRELRJUDSK\ +HUH WKH QDUUDWRU HQYLVDJHV DQG LGHQWLILHV ZLWK ILJXUHVIURPWKHELEOHKDQGOLQJKLVRZQVLWXDWLRQE\UHHQDFWLQJHVVHQWLDO SDUWV RI WKH VDLQWV· VWRULHV VHH /HUQHU  7KH VHOIQDUUDWLRQ LV WKXV SHU IRUPHGLQWKHOLJKWRIVDFUHGVWRULHVWKDWSUHILJXUHUHDOLW\IRUWKHEHOLHYHU DQGVKDSHWKHZD\VKHFRQVWUXFWVDPHDQLQJIXOZRUOG ,QYLHZRIWKLVWUDQVIRUPDWLRQLQWRQDUUDWLYHDQGODQJXDJHWKHUHIRUH WKH ¶UHOLJLRXV H[SHULHQFH·³ZKDWHYHU WKLV FRQWURYHUVLDO QRWLRQ PD\ EH LQ LWV HVVHQFH³ILQDOO\ KDV DQ DHVWKHWLF GLPHQVLRQ HPSORWPHQW WURSHV PHWDSKRUV DQG JHQUH SDWWHUQV DUH HVVHQWLDO DHVWKHWLF FKDUDFWHULVWLFV RI UHOLJLRXVQDUUDWLYHVZKLFKRSHUDWHZLWKLQDFXOWXUHDQGGHWHUPLQHWKHZD\ WKH LQGLYLGXDO DQG FROOHFWLYH WKLQN DQG VSHDN RI WKH ¶GLYLQH· WKH ¶WUDQV FHQGHQWDO·RUWKH¶XOWLPDWH· ,W LV WKLV LQWHUGHSHQGHQFH RI QDUUDWLYH DHVWKHWLF DQG WKH UHOLJLRXV ZKLFKLVPRVWFRQVFLRXVO\H[SORUHGLQOLWHUDWXUH$JDLQVWDVVXPSWLRQVWKDW OLWHUDU\ QDUUDWLYHV PHUHO\ LPLWDWH H[LVWLQJ YHUVLRQV RI VSLULWXDO ZRUOGPDN LQJRQHVKRXOGDVVHUWWKDWWKH\WKHPVHOYHVRULJLQDWHHVVHQWLDODVSHFWVWKDW FDQQRW EH H[SUHVVHG E\ RWKHU V\PEROLF PRGHV RU DFWLYLWLHV VXFK DV DUW ILOP RU WKHDWULFDO SHUIRUPDQFH /LWHUDU\ WH[WV FORVHO\ LQWHUDFW ZLWK RWKHU VWRULHV RI IDLWK ZHDYLQJ WRJHWKHU QDUUDWLYHV DOUHDG\ LQ FLUFXODWLRQ DQG

––––––– 

3DXO5LF±XUSRLQWVRXWWKHSRVVLELOLWLHVDQGOLPLWVRILQWHUSUHWLQJWKHVSLULWXDOE\LQYHVWLJDW LQJLWVWH[WXDOH[SUHVVLRQ+HHPSKDVLVHVWKDWDQDO\VLQJWKHGLVFRXUVHRIUHOLJLRQGRHVQRW VD\ ´WKDW ODQJXDJH WKDW OLQJXLVWLF H[SUHVVLRQ LV WKH RQO\ GLPHQVLRQ RI WKH UHOLJLRXV SKH QRPHQRQQRWKLQJLVVDLG³HLWKHUSURRUFRQ³FRQFHUQLQJWKHFRQWURYHUVLDOQRWLRQRIUHOL JLRXV H[SHULHQFH ZKHWKHU ZH XQGHUVWDQG H[SHULHQFH LQ D FRJQLWLYH D SUDFWLFDO RU DQ HPRWLRQDOVHQVH:KDWLVVDLGLVRQO\WKLVZKDWHYHUXOWLPDWHO\PD\EHWKHQDWXUHRIWKHVR FDOOHGUHOLJLRXVH[SHULHQFHLWFRPHVWRODQJXDJHLWLVDUWLFXODWHGLQDODQJXDJHDQGWKHPRVW DSSURSULDWHSODFHWRLQWHUSUHWLWRQLWVRZQWHUPLVWRLQTXLUHLQWRLWVOLQJXLVWLFH[SUHVVLRQµ  



+DQQD%LQJHO

LPDJLQDWLYHO\FRQILJXULQJWKHPLQWRQHZFRQFHSWVRIUHOLJLRXVUHDOLW\7KH FORVH UHODWLRQ RI UHOLJLRQ QDUUDWLYH DQG OLWHUDWXUH UDLVHV WKH TXHVWLRQ RI KRZH[DFWO\OLWHUDU\WH[WVFUHDWHWUDQVFHQGHQWDOZRUOGVDQGKRZWKHLUUROH ZLWKLQDFXOWXUHDQGLWVRYHUDUFKLQJEHOLHIKRUL]RQVFDQEHGHILQHG,ZLOO DGGUHVVWKLVVXEMHFWPDWWHURQDEDVLFOHYHOWU\LQJWRSLQSRLQWWKHGLVWLQF WLYHIHDWXUHVRIWKHILFWLRQDOWH[WWKDWVSHFLILFDOO\FRQWULEXWHWRFRQVWUXLQJ WKH UHOLJLRXV 7KHVH IHDWXUHV DV ZLOO EH VKRZQ GLVWLQJXLVK WKH ILFWLRQDO H[SUHVVLRQ RI WKH UHOLJLRXV IURP RWKHU NLQGV RI UHOLJLRXV QDUUDWLYHV LQ D QDUURZVHQVH 7KHH[DPLQDWLRQRIWKHILFWLRQDOGLVFRXUVHDQGLWVQDUUDWLYL VDWLRQRIVDFUHGXQLYHUVHKDVEHFRPHHYHQPRUHXUJHQWJLYHQWKDWVLQFH ¶WKHQDUUDWLYH·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³OLNH DQ\ RWKHU FXOWXUDO SKHQRPHQD³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µ 5LF±XU   7KH VFULSWXUDO ILJXUDWLRQ RI WKH GLYLQH WKXV IXQGDPHQWDOO\ GHSHQGV RQ WKH JHQUH HP SOR\HG E\ WKH ELEOLFDO ZULWHUV (DFK GLVFRXUVH LV D FRPSRQHQW ZLWKLQ D PDQLIROG QHW RI VLJQLILFDWLRQV UHIHUULQJ WR ¶*RG· WKH ¶WUDQVFHQGHQWDO· RU WKH¶UHOLJLRXV·,QWKLVQHWHDFKRIWKHGLVFRXUVHVIXOILOVDVSHFLILFIXQFWLRQ ZLWKLQWKHELEOHDVDZKROH %\DSSO\LQJGLVFRXUVHDQDO\VLVWRWKHELEOH5LF±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´DGLVWLQF WLYHIRUPRIWH[WXDOLW\ZKLFKRQO\JDLQVLWVVSHFLILFFXOWXUDOO\LQGLVSHQVD EOHIXQFWLRQWKURXJKLWVDHVWKHWLFWUDQVIRUPDWLRQRIFXOWXUDOH[SHULHQFHµ ´'DV)XQNWLRQVPRGHOOGHU/LWHUDWXUµP\WUDQVODWLRQ +RZHYHUVXU SULVLQJO\ OLWWOH UHVHDUFK KDV EHHQ GHGLFDWHG WR H[DPLQLQJ ILFWLRQ ZULWLQJ DQGLWVUHOLJLRXVZRUOGFRQVWUXFWLRQ7KLVLVHYHQPRUHFXULRXVZKHQZH FRQVLGHU WKDW WKH QDUUDWLYH WXUQ KDV QRW RQO\ EURXJKW DERXW VLJQLILFDQW FKDQJHVLQWKHWKHRULHVDQGPHWKRGVRIWKHRORJ\EXWDOVRWRWKHVWDWXVRI

––––––– 

´>/@LWHUDWXU>VWHOOW@HLQH|NRORJLVFKH.UDIWLQQHUKDOELKUHU.XOWXUZHOWQLFKWSULPlUDXIJUXQG LKUHU ,QKDOWH >GDU«@ VRQGHUQ DXIJUXQG LKUHU +HUDXVELOGXQJ DOV HLQHU XQYHUZHFKVHOEDUHQ )RUP GHU 7H[WXDOLWlW GLH HUVW LQ LKUHU lVWKHWLVFKHQ 7UDQVIRUPDWLRQ NXOWXUHOOHU (UIDKUXQJ LKUHEHVRQGHUHNXOWXUHOOXQYHU]LFKWEDUH)XQNWLRQJHZLQQWµ´'DV)XQNWLRQVPRGHOOGHU/L WHUDWXUµP\WUDQVODWLRQ 

)LFWLRQDO1DUUDWLYHVDQG7KHLU:D\VRI6SLULWXDO:RUOGPDNLQJ



ILFWLRQDOWH[WVLQTXHVWLRQVRI*RGDQGWUDQVFHQGHQFH+RZWKHQFDQWKH LQWULFDWH UHODWLRQVKLS EHWZHHQ QDUUDWLYH OLWHUDWXUH DQG WKH UHOLJLRXV EH FDSWXUHG LQ RUGHU WR XQGHUVWDQG WKH SURGXFWLYH TXDOLW\ RI OLWHUDU\ GLV FRXUVHIRUWKHPDNLQJRIWUDQVFHQGHQWDOZRUOGV" ,QZKDWIROORZVHPSKDVLVZLOOEHSODFHGRQWKHREVHUYDWLRQWKDWWKH WZHQWLHWK FHQWXU\³ZLWK LWV WXUQ DZD\ IURP RYHUDUFKLQJ PHWDSK\VLFDO V\VWHPVRIWKRXJKWWRLQGLYLGXDOQDUUDWLYHDQGVWRU\WHOOLQJ³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¶ILFWLRQV RIVSLULWXDOLW\· 7R EHJLQ ZLWK WKH OLWHUDU\ H[SORUDWLRQ RI WKH UHOLJLRXV GLIIHUV IURP RWKHU QDUUDWLYHV LQWKDW WKHILFWLRQDO WH[W LVQRWSULPDULO\ ERXQGWR SUDJ PDWLFSXUSRVHV,WLVUHOHDVHGIURPDQ\DVVHUWLYHGLGDFWLFDQGGHVFULSWLYH UHODWLRQ WR WKH H[WUDOLWHUDU\ ZRUOG 5DWKHU WKDQ GHSLFWLQJ WKH ZRUOG LQ D VWUDLJKWIRUZDUGGHVFULSWLYHPDQQHUWKHWH[WLVHQDEOHGWRFRQILJXUHUHDOLW\ XQGHU WKH JXLGDQFH RI WKH LPDJLQDU\ DQG WKH SRVVLEOH +XEHUW =DSI LQ ´/LWHUDWXUHDV&XOWXUDO(FRORJ\µKDVFRLQHGWKHWHUPRI¶GHSUDJPDWLVDWLRQ· LQRUGHUWRGHILQHWKHVWUXFWXUDOFRQGLWLRQVWKDWDOORZWKHILFWLRQDOWH[WWR LQYHVWLJDWHDJLYHQUHDOLW\LQDQH[SORUDWLYHDQGVSHFXODWLYHZD\'HSUDJ PDWLVDWLRQ´HQDEOHVWKHDHVWKHWLFLVLQJGLVWDQFLQJRIUHDOZRUOGH[SHULHQFHV DQGDWWKHVDPHWLPHPDNHVSRVVLEOHWKHLULPDJLQDWLYHH[SORUDWLRQµ´/LW HUDWXUHDV&XOWXUDO(FRORJ\µ ,QDVLPLODUYHLQ3DXO5LF±XUDUJXHVWKDW ´LWLVWKLVGLVWDQFLDWLRQRIWKHUHDOIURPLWVHOI>«@WKDWILFWLRQLQWURGXFHV LQWR RXU DSSUHKHQVLRQ RI UHDOLW\µ   $FFRUGLQJ WR5LF±XU WKH H[SORU DWLYHDQGLPDJLQDU\DVSHFWRIILFWLRQZULWLQJPD\REWDLQDUHOLJLRXVGLPHQ VLRQ ZKHQ WKH OLWHUDU\ LPDJLQDWLRQ JHQHUDWHV QHZ PHWDSKRUV ZKLFK EHFRPHDYLDEOHWRROIRUWKHLPDJLQDWLRQRI*RG+HUHWKHPHWDSKRULFDO LPDJLQDWLRQRIILFWLRQLVPDGHDQDOO\IRUWKHXQGHUVWDQGLQJDQGDUWLFXOD



+DQQD%LQJHO

WLRQRIIDLWK5LF±XUFODLPVWKDWWKHWH[WXDOILJXUDWLRQRIWKHZRUOGKDVWKH SRWHQWLDO WR UHYHDO GLPHQVLRQV RI WKH KXPDQ FRQGLWLRQ QRW XQGHUVWRRG EHIRUH +H DWWULEXWHV D UHYHODWRU\ SRZHU WR ILFWLRQ ZKLFK XQIROGV ZKHQ WKH¶ZRUOGRIWKHWH[W·HQJDJHVZLWKWKH¶ZRUOGRIWKHUHDGHU·7KLVHQFRXQ WHUPD\FDXVHDSURGXFWLYHFODVKZKHQWKHZRUOGILJXUHGE\WKHWH[WUXQV DJDLQVWWKHUHDGHU·VRZQXQGHUVWDQGLQJRIVHOIDQGWKHZRUOG7KHUHDGHU PLJKWLQKDELWWKHZRUOGSURSRVHGSURMHFWLQJKHU´¶RZQPRVW·SRVVLELOLWLHVµ LQWR LW 7KLV LV ZK\ WKURXJK ILFWLRQ ´QHZ SRVVLELOLWLHV RI EHLQJLQWKH ZRUOGµ DUHRSHQHGXSLWLVWKHUHDOLW\RIWKH¶SRVVLEOH· $ VHFRQG LPSOLFDWLRQ RI WKH DVSHFW RI GHSUDJPDWLVDWLRQ PD\ EH GH VFULEHG ZLWK ZKDW -HURPH%UXQHU KDV FDOOHG WKH ´¶EUHDFK· FRPSRQHQW RI WKH QDUUDWLYHµ   :KHUHDV UHOLJLRXV QDUUDWLYHV VXFK DV WKH VHUPRQ RU FRQIHVVLRQDOWH[WVIXQFWLRQWREXLOGFRQVHQVXVDPRQJWKHUHOLJLRXVJURXS DILFWLRQDOWH[WPD\VXEYHUWWKHSDWWHUQVWKHUHOLJLRXVFRPPXQLW\KDVFKR VHQ DV D FRPPRQ JURXQG DQG WKXV UXSWXUH FRPPRQ DVVXPSWLRQV DERXW WKH QDWXUH RI ¶*RG· WKH ¶WUDQVFHQGHQWDO· RU WKH ¶VDFUHG· 7KH DVSHFW RI GHSUDJPDWLVDWLRQ DOORZV WKH WH[W WR JR EH\RQG WKH FRQYHQWLRQDO DQG WR RIIHUQHZH[SUHVVLRQVRIWKHUHOLJLRXV7KURXJKEUHDFKHVRIWKHFDQRQLFDO OLWHUDU\VWRU\WHOOLQJPD\WKHUHIRUHFKDOOHQJHWKHFRQWHQWRIVDFUHGWH[WVDQG SUREOHPDWLVH WKH LPSOLFLW UXOHV WKDW FRQVWUXFW RIILFLDO QDUUDWLYH VHH DOVR 'LVFK %UXQHUH[SODLQVWKDWWKH¶EUHDFK·FRPSRQHQWRIWKHQDUUDWLYHLV ZKDWPDNHVVWRU\WHOOLQJDQLQQRYDWLYHDFWLYLW\4XRWLQJ7]YHWDQ7RGRURY KHJRHVRQWRDUJXHWKDWWRHQJDJHLQWKHOLWHUDU\LQYHQWLRQRIDQHZUHDOLW\ LV LQGHHG QRWVR PXFK WRSURSRVH QHZ SORWV DV WR FKDOOHQJH DQG SURE OHPDWLVH WKH SUHYLRXVO\ IDPLOLDU DQG WR FRQIURQW WKH UHDGHU ZLWK IUHVK LQWHUSUHWDWLYHDFWLYLWLHV%UXQHU²  $OWHUQDWLYH UHDOLWLHV LQ ILFWLRQ DUH QRW RQO\ FRQVWLWXWHG E\ ZD\ RI EUHDFKHVLQFDQRQLFLW\7KHLPDJLQDWLYHFUHDWLRQRIVSLULWXDOZRUOGVLVDOVR HVVHQWLDOO\ OLQNHG ZLWK WKH IXQFWLRQ RI WKH OLWHUDU\ WH[W DV ¶UHLQWHJUDWLYH LQWHUGLVFRXUVH· VHH /LQN ´/LWHUDWXU DOV ,QWHUGLVNXUVDQDO\VHµ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

)LFWLRQDO1DUUDWLYHVDQG7KHLU:D\VRI6SLULWXDO:RUOGPDNLQJ



GRFWULQHRIWKHVFLHQWLVWDQGWKDWRIWKHWKHRORJLDQWKXVVRXQGDOLNHERWK FODLP WKHLU RZQ YHUVLRQ RI WKH ZRUOG DV WKH RQO\ RQH FRUUHFW VHH DOVR *RRGPDQ²  7KH FRQIOLFW EHWZHHQ UHOLJLRQ DQG VFLHQFH LV D PDMRU WKHPH LQ 86 $PHULFDQILFWLRQ/LWHUDWXUHKRZHYHULVIUHHWRH[SORUHWKH*RGTXHVWLRQ LQ YDULRXV GLVFXUVLYH FRQWH[WV DQG FDQ WKXV ZRUN DJDLQVW WKH VSHFLDOLVW·V WHQGHQF\WRIDEULFDWHKLVZRUOGE\REMHFWLYLVLQJGDWDDQGUHGXFLQJLWWRD RQHGLPHQVLRQDO H[SODQDWLRQ $V /LQN HPSKDVLVHV OLWHUDWXUH GRHV QRW UHSUHVHQWVSHFLDOLVHGNQRZOHGJHEXWLQWHJUDWHVGLIIHUHQWNLQGVRIORJLFE\ PHDQV RI LQWHUGLVFXUVLYH HOHPHQWV UDQJLQJ IURP VWHUHRW\SHG FKDUDFWHUV WRFROOHFWLYHV\PEROVWRQDUUDWLYHVFKHPDWDHJP\WK WRWKHPHVSURE OHPV RU DUJXPHQWV LQ WKH ZLGHVW VHQVH /LQN ´'LVNXUVLYH (UHLJQLVVH 'LVNXUVH,QWHUGLVNXUVHµ² 7KHIXQFWLRQRIVXFKHOHPHQWVQRWRQO\ OLHV LQ JHQHUDOLVLQJ DQG LQWHJUDWLQJ VHOHFWLYH NQRZOHGJH IRU VXEMHFWV LQ HYHU\GD\ OLIH FRQWH[W /LQN ´'LVNXUVLYH (UHLJQLVVH 'LVNXUVH ,Q WHUGLVNXUVHµ EXWWKH\DOVRDOORZWKHWH[WWRVHOHFWDQGHGLWSRVWXOD WLRQV D FXOWXUH FRQVLGHUV PXWXDOO\ H[FOXVLYH &RQVLGHU IRU LQVWDQFH 8SGLNH·V 5RJHU·V 9HUVLRQ   7KH SORW RI WKH QRYHO UHYROYHV DURXQG D GLVSXWHEHWZHHQ5RJHU/DPEHUWDSURIHVVRURIWKHRORJ\DQG'DOH.RK OHUDVWXGHQWRIFRPSXWHUVFLHQFHVZKRE\PHDQVRIWHFKQRORJ\ZDQWVWR SURYHWKDW*RGFUHDWHGWKHZRUOGQROHVV7KHFKRLFHRIFKDUDFWHUDOORZV WKHQRYHOWRLQWHJUDWHWKHVSHFLDOLVHGGLVFRXUVHRIWKHWKHRORJLDQDVZHOODV RI WKDWRI WKH VFLHQWLVW 8QOLNH DQ LQWHOOHFWXDO WUHDWLVH KRZHYHU 8SGLNH·V QRYHO GRHV QRW VLPSO\ HODERUDWH RQ WKH WHQVLRQORDGHG FRQIURQWDWLRQ RI VFLHQFHWKHRORJ\DQGUHOLJLRXVIDLWK,WLVRQHRIWKHVDOLHQWFKDUDFWHULVWLFV RIWKHWH[WWKDWWKHWKHPHRIVHDUFKIRUWKH¶ULJKW·YHUVLRQRIWKHZRUOGLV ULGLFXOHG E\ WKH ZD\ WKH VWRU\ LV PHGLDWHG WKURXJK WKH XQUHOLDEOH ILUVW SHUVRQ QDUUDWRU 7KH PHGLXPVSHFLILF GHYLFH RI XQUHOLDEOH QDUUDWLRQ EULQJVWRWKHIRUHWKHUROHRIVXEMHFWLYHLPDJLQDWLRQLQWKHSURFHVVHVWKDW FRQVWLWXWHUHDOLW\7KHQRYHOWKXVFUHDWHVDILFWLYHZRUOGZKHUHWKHFXOWXU DOO\ JLYHQ ERXQGDULHV EHWZHHQ ¶VXEMHFWLYH EHOLHI· DQG ¶VFLHQWLILF REMHFWLYH NQRZOHGJH·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·VFODLPWKDW´WKHDUWVPXVWEHWDNHQQROHVVVHULRXVO\WKDQWKH VFLHQFHV DV PRGHV RI GLVFRYHU\ FUHDWLRQ DQG HQODUJHPHQW RI NQRZOHGJH



+DQQD%LQJHO

LQWKHEURDGVHQVHRIDGYDQFHPHQWRIWKHXQGHUVWDQGLQJDQGWKXVWKDWWKH SKLORVRSK\RIDUWVKRXOGEHFRQFHLYHGDVDQLQWHJUDOSDUWRIPHWDSK\VLFV DQGHSLVWHPRORJ\µ  7KLUGO\ILFWLRQKDVWKHSRWHQWLDOWRUHIOHFWRQLWVHOIWREHDZRUNRIILF WLRQZKLFKLVDGLVFXUVLYHPHWDPRUSKRVLVRIUHDOLW\UDWKHUWKDQDGHSRVLW RI VRPH WUXWK SURSRVLWLRQV 7KH VHOIUHIOH[LYH GLPHQVLRQ LV XQLTXH WR OLWHUDU\ GLVFRXUVH DQG PDNHV WKH ILFWLRQDO WH[W IXQGDPHQWDOO\ GLVWLQFWLYH IURPRWKHUGRFXPHQWVRIIDLWK'RFXPHQWVRIIDLWKIXQFWLRQWRVWDELOLVHD FRPPXQLW\·V EHOLHI LQ D UHDOLW\ PRUH YDOXDEOH DQGPRUH UHOLDEOH WKDQ WKH HYHU\GD\ ZRUOG DQG DGYLVH SHRSOH WR GHSHQG RQ WKLV UHDOLW\ ,Q FRQWUDVW VHOIUHIOH[LYH ILFWLRQ SRVHV TXHVWLRQV DERXW WKH EHOLHYHUV· UHDOLW\ WKHLU UHOLJLRXV FRPPLWPHQW DQG WUXVW LQ WKH ¶RWKHU·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¶EHKLQG·WKHWH[WWRWKHZRUOGRIWKHWH[WWKDWFDQSURPSWD UHFRQVLGHUDWLRQRIDJLYHQUHDOLW\  $FFRUGLQJWRWKHLQVLJKWVJOHDQHGIURPWKHVHUHIOHFWLRQV,FDQQRZFODULI\ WKHJHQUHWHUP¶ILFWLRQVRIVSLULWXDOLW\·LQWURGXFHGDERYH¶)LFWLRQVRIVSLUL WXDOLW\· UHIHU WR WKHVH QDUUDWLYHV WKDW RYHU WKH ODVW IHZ GHFDGHV KDYH LQ FUHDVLQJO\WXUQHGWRPDWWHUVRIIDLWKDQGWUDQVFHQGHQFHZKLOHWDSSLQJWKH IXOO SRWHQWLDO RI WKH SULYLOHJHV RI ILFWLRQ ZULWLQJ LQ WKHLU FRQVWUXDO RI WKH UHOLJLRXVPDQ\RIWKHPYHU\FRQVFLRXVO\H[SORULQJWKHLQWHUGHSHQGHQFHRI QDUUDWLYH SURFHVVHV DHVWKHWLF GHYLFHV DQG IDLWK LQ *RG ,Q ¶ILFWLRQV RI VSLULWXDOLW\·WKHVHDUFKIRUVHQVHDQGPHDQLQJWHQGVWREHDFFRPSDQLHGE\ DVHOIUHIOH[LYHGLPHQVLRQ1RYHOVVXFKDV&LW\RI*RGE\(/'RFWRURZ  5RJHU·V9HUVLRQE\-RKQ8SGLNH $3UD\HUIRU2ZHQ0HDQ\E\ -RKQ,UYLQJ RU*LOHDGE\0DU\OLQQH5RELQVRQ H[SORUHUHOL JLRXVVXEMHFWPDWWHUVRQ DPHWDOHYHO GUDZLQJ DWWHQWLRQ WR KRZUHOLJLRXV IDLWKLVFRQVWUXFWHGDQGXQIROGVLQPXWXDOH[FKDQJHZLWKDFXOWXUH·VVWRULHV RI*RGDQGWKHVDFUHG,QVXFKOLWHUDU\QDUUDWLYHVUHOLJLRXVUHDOLW\FDQQRW EH VLJQLILHG LQ DQ HVSHFLDOO\ FRQFOXVLYH PDQQHU $QG \HW LQ LQWHJUDWLQJ

)LFWLRQDO1DUUDWLYHVDQG7KHLU:D\VRI6SLULWXDO:RUOGPDNLQJ



V\QWKHVLVLQJ DQG UHWKLQNLQJ SUHYDOHQW UHOLJLRXV LGHDV H[SHULHQFH EHOLHIV DQG DVVXPSWLRQV WKH\ WDNH SDUW LQ WKH IRUPDWLRQ DQG UHVWUXFWXULQJ RI D FXOWXUH·V EHOLHI V\VWHPV DQG LQ WKLV HQJDJHPHQW HGXFH QHZ YHUVLRQV RI UHOLJLRXVLPDJLQDWLRQ,WLVLQWKLVVHQVHWKDWWKHLUUROHDVERWKZRUOGPDNHUV DQGFULWLFVRIWUDQVFHQGHQWDOZRUOGPDNLQJPD\EHXQGHUVWRRG*LYHQWKH JUHDWYDULHW\LQWKHFRQWHQWIRUPVDQGIXQFWLRQVRIFRQWHPSRUDU\OLWHUDU\ QDUUDWLYHVGHDOLQJZLWKWKH*RGTXHVWLRQWKHWHUP¶ILFWLRQVRIVSLULWXDOLW\· VHHPV WR EH GHFLGHGO\ XVHIXO DV LW FRYHUV WKH UDQJH IURP WKH UHOLJLRXV QRYHO DW RQH HQG RI WKH VSHFWUXP WR WKH QRYHO WKDW ILQDOO\ GHQLHV DQ\ WUDQVFHQGHQWDOO\ RULHQWHG ZRUOG FRQVWUXFWLRQ DW WKH RWKHU +HQFH WKHLU GHILQLQJ IHDWXUH LV E\ QR PHDQV D VSHFLILFDOO\ UHOLJLRXV ZRUOG YLHZ EXW UDWKHU OLHV LQ WKHLU H[WHQVLYH UHIHUHQFH WR DQG G\QDPLF GLDORJXH ZLWK WKH FXUUHQWGLVFRXUVHVRIWKHSUHYDOHQWGHEDWHVDERXW¶*RG·WKH¶VSLULWXDO·DQG WKH¶VDFUHG· 0HWDILFWLRQDQG0XOWLSHUVSHFWLYLW\LQ&LW\RI*RG &LW\RI*RG&* SXEOLVKHGLQLVDUHPDUNDEOHH[DPSOHIRUWKHJHQUH RI ¶ILFWLRQV RI VSLULWXDOLW\·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´KDV EHFRPH HYHQ VKDUSHU DQG PRUH SRZHUIXO RYHU WKH FRXUVH RI WKH WK FHQWXU\ DW WKH VDPHWLPHWKDWWKHJHQHUDOFXOWXUHKDVVOLSSHGPRUHREYLRXVO\EH\RQGWKH FRQWURORI&KULVWLDQLQVWLWXWLRQµ ,QWKHLUQHJRWLDWLQJRIWKHVSLULWXDO 86$PHULFDQ QRYHOV RVFLOODWH EHWZHHQ D UHLQIRUFHPHQW RI WKH QDWLRQ·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



+DQQD%LQJHO

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µ&*²  0RUHRYHUWKHQRYHOHUDGLFDWHVWKHERXQGDULHVRIVWRU\WHOOLQJDQGVFL HQWLILFH[SODQDWLRQLQGHSLFWLQJWKHWKHRU\RIHYROXWLRQLQWKHPDQQHURI DQH[SHULPHQWDOVFLHQFHILFWLRQVWRU\,QVRGRLQJWKHQRYHOIRUHJURXQGV WKHQDUUDWLYHSDWWHUQVWKDWOLHXQGHUQHDWKDWKHRU\WKDWKDVWXUQHGLQWRDQ DOOHPEUDFLQJIRUPXODLQWKHWZHQWLHWKFHQWXU\DQGDUHOLNHZLVHLQWHJUDWHG E\3HPEHUWRQDQG6DUDDVDFHQWUDOFRQFHSWIRUWKHLUQHZWKHRORJ\7KH DQRQ\PRXVILUVWSHUVRQQDUUDWRULQWKHQRYHOZKRJLYHVDVKRUWLQWURGXF

)LFWLRQDO1DUUDWLYHVDQG7KHLU:D\VRI6SLULWXDO:RUOGPDNLQJ



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

+HQFH ZKHUHDV 3HPEHUWRQ DQG 6DUD RSWLPLVWLFDOO\ DLP WR ´UHFDVWµ &*   *RG E\ KDUPRQLVLQJ VFLHQFH DQG WKHRORJ\ WKH WH[WXDO VWUXFWXUH RI &LW\RI*RGGHHSO\UHODWLYLVHVWKHWKHRORJLDQV·YLVLRQOD\LQJEDUHWKHFRQ VWUXFWHG DQG VHOHFWLYH FKDUDFWHU RI WKH EDVLV WKDW VHUYHV 3HPEHUWRQ DQG 6DUDDVDVWDUWLQJSRLQWIRUWKHLUUHIRUPXODWLRQRI*RG %\EOXUULQJWKHOLQHEHWZHHQVFLHQWLILFUHOLJLRXVKLVWRULFDODQGOLWHUDU\ GLVFRXUVHDQGE\GLVFKDUJLQJWKHGLVWLQFWLRQRI¶LPDJLQDWLRQ·DQG¶UHDOLW\· WKH QRYHO VKRZV WKH UHDGHU WKH ZRUOG DV D WLJKWO\ ZRYHQ ZHE RI VWRULHV DQGGUDZVDWWHQWLRQWRWKHILQHOLQHEHWZHHQIDFWDQGILFWLRQDQGEHWZHHQ P\WKRORJ\ DQG WUXWK $V D FRQVHTXHQFH &LW\ RI *RG SRVHV D SURIRXQG FKDOOHQJHQRWRQO\WR3HPEHUWRQ·VDQG6DUD·VVSHFLILFUHOLJLRXVYLVLRQEXW DOVRWRIDLWKLQ*RGLQJHQHUDODVLWOHDYHVRSHQWKHTXHVWLRQDVWRZKHWKHU *RGLVPHUHO\DFKLPHUDZLWKLQPDQNLQG·VFUHDWLYHDQGSURGXFWLYHLQWHU SUHWDWLRQ RI WKH ZRUOG ,Q WKLV VHQVH RQH PD\ FRQFOXGH WKDW WKH QRYHO VXJJHVWV WKDW DOO LGHDV RI *RG GHI\ WKH FDWHJRULHV RI DEVROXWH WUXWK DQG EDUHUHDOLW\EXWLQVWHDGDUHLQGLVWLQJXLVKDEO\LQWHUZRYHQZLWKLQDFRPEL QDWLRQ RI IDEXODWLRQ DQG UHDOLW\ DQG LQWULQVLFDOO\ GHSHQG RQ PDQNLQG·V QHHGWRIDEULFDWHDQGLPDJLQHKLVZRUOGWKURXJKDQGZLWKLQVWRULHV  7RVXPXS%\ZD\RIPXOWLSHUVSHFWLYLW\DQGPHWDILFWLRQWKHQRYHONHHSV WKH UHDGHU FRQVWDQWO\ RQ WKH PRYH EHWZHHQ SHUVSHFWLYHV DV ZHOO DV EH WZHHQGLIIHUHQWOHYHOVRIWH[WXDOUHDOLW\7KHVWUXFWXUDOIUDPHZRUNZLWKLQ ZKLFKWKHFKDUDFWHUV·VHDUFKIRU*RGXQIROGVUHQGHUVWKHUHDGLQJSURFHVV XQFHUWDLQ DQG DPELJXRXV ,Q GLVFRQQHFWLQJ WKH VSLULWXDO VHDUFK IURP D SDUWLFXODU SHUVSHFWLYH WKH QRYHO UHTXLUHV WKDW WKH UHDGHU VLPXOWDQHRXVO\ VXVWDLQV WKH WZR FRQIOLFWLQJ SRVWXODWLRQV RI WKH H[LVWHQFH DQG WKH QRQ H[LVWHQFHRI*RG:KDWWKHQRYHOH[HPSOLILHVWKHQLVDGUDVWLFUHRUJDQL VDWLRQ RI IDPLOLDU ZD\V RI WKLQNLQJ DQG SHUFHLYLQJ VLQFH LW FRPELQHV GL YHUJLQJ YHUVLRQV RI WKH ZRUOG WKDW LQ IDFW SUHVHQW PXWXDOO\ H[FOXVLYH WUXWKV,WGHYHORSVDQDUUDWLYHIRUPWKDWHVFDSHVIURPWKHIDPLOLDUGLFWXP WKDW WKHUH LV RQO\ RQH ZRUOG DQG GHSLFWV LQVWHDG D PXOWLGLPHQVLRQDO XQL



+DQQD%LQJHO

YHUVH ,Q WKLV UHVSHFW &LW\ RI *RG VHHPV WR VKDUH *RRGPDQ·V FRQYLFWLRQ WKDW WKHUH LV QR ¶UHDO· ZRUOG EXW RQO\ YHUVLRQV RI LW +RZHYHU WKH QRYHO DOVR VKRZV WKDW WKH *RG TXHVWLRQ ILQDOO\ H[FHHGV DQ\ SKLORVRSKLFDO RU OLWHUDU\LQTXLU\,WLQYHVWLJDWHVSRVVLELOLWLHVIRUD¶QHZEHLQJLQWKHZRUOG· VHH5LF±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´DORQJLQJD QDYLJDWLQJSULQFLSOHUHGHPSWLYHQRWRQDUULYDOEXWLQQHYHUTXLWHJHWWLQJ KHUHµ&*  &RQFOXVLRQ +RZ WKHQ PD\ ZH ILQDOO\ DQVZHU WKH LQWURGXFWRU\ TXHVWLRQ RI KRZ WR GHILQH WKH UROH RI OLWHUDWXUH WKDW GHDOV ZLWK WKH VSLULWXDO ZLWKLQ D FXOWXUH DQGLWVRYHUDUFKLQJEHOLHIKRUL]RQV":KDWLVWKHSRWHQWLDORIOLWHUDU\WH[WV WRGHSLFWILFWLRQDOZRUOGVVKDSHGE\UHOLJLRXVDQGWKHRORJLFDOLGHDVEHOLHIV DQGIHHOLQJV")LUVWLI*RRGPDQ² LVULJKWLQFODLPLQJWKDWDGYDQFLQJ LQVLJKWDQGXQGHUVWDQGLQJLVQRWILUVWDQGIRUHPRVWDPDWWHURIIRUPXODW LQJDSURSRVLWLRQRURIGLVFHUQLQJZKDWLVWUXHEXWRIOHDUQLQJ´WRVHHRU KHDURUJUDVSIHDWXUHVDQGVWUXFWXUHVZHFRXOGQRWGLVFHUQEHIRUHµWKHQ ¶ILFWLRQV RI VSLULWXDOLW\·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¶ZRUOGVRIILFWLRQDQGZRUOGVRIIDFW·RI ¶EHOLHI DQG NQRZOHGJH· RU RI ¶IDLWK DQG UHDVRQ· ,Q WKLV YHLQ &LW\ RI *RG VHUYHV DV DQ LGHDO H[DPSOHRI OLWHUDWXUHWKDWVHHNVWR FUHDWH QHZ DYHQXHV IRUUHOLJLRXVH[SORUDWLRQ,WERWKGHSLFWVWKHKXPDQTXHVWIRUDZRUOGWKDW

)LFWLRQDO1DUUDWLYHVDQG7KHLU:D\VRI6SLULWXDO:RUOGPDNLQJ



SHUYDGHV KXPDQ H[SODQDWLRQ DQG VHOIFRQVFLRXVO\ GUDZV DWWHQWLRQ WR WKH SURFHVVHVWKDWJRLQWRVSLULWXDOZRUOGPDNLQJ,QWKLVGLDOHFWLFRIDUHOLJLRXV VHDUFKDQGDQDO\WLFLQWHUSUHWDWLRQ³RUDV5LF±XUSXWVLWRIGLVWDQFLDWLRQ DQG DSSURSULDWLRQ³ILFWLRQ PD\ H[KLELW QHZ GLPHQVLRQV RI UHDOLW\ FKDO OHQJLQJERWKWKHFULWLF·VDQGWKHEHOLHYHU·VWHQGHQF\WRUHGXFHRQH·VZRUOG WRDVLQJOHEDVH 6HFRQG DOZD\V EHDULQJ LQ PLQG WKDW OLWHUDWXUH·V ZRUOGFUHDWLRQ GRHV QRWZRUNDVDFORVHGV\VWHPEXWLQWHUDFWVZLWKRWKHUVLJQLI\LQJSURFHVVHV DQGHQJDJHVZLWKDFXOWXUH·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·VPRVWSRZHUIXOPDVWHUVWRU\&LW\RI*RGDIILUPVWKLVPDVWHUVWRU\ E\HPSOR\LQJ*RGDVDXQLI\LQJPHWDSKRUDSRVLWLYHNHUQHORIWKHHFOHFWLF VFHQHU\RIWKHWH[W\HWLWUHIRUPXODWHVLWZKLOHVKLIWLQJLWIURPWUDQVFHQ GHQFHWRUDGLFDOLPPDQHQFHE\GHSLFWLQJLWZLWKLQWKHKXPDQGLVFXUVLYLVD WLRQ RI WKH ZRUOG ,Q WKH UHIRUPXODWLRQ IURP WKH WUDQVFHQGHQWDO WR WKH



+DQQD%LQJHO

LPPDQHQW WKH QRYHO UHQGHUV WKLV FRQVWUXFW ¶*RG· VSLULWXDOO\ PRELOH \HW SURSRVHVLWDVDSODFHIURPZKLFKWKHQHJRWLDWLRQRIXQLYHUVDOYDOXHVDQG HWKLFDOQRUPVZLWKLQDSRVWPRGHUQFXOWXUHPD\SURFHHG7KLV¶*RG·WKHQ LV UHVHPDQWLVLVHG DQG UHFRQFHSWXDOLVHG DV D UHVXOW RI EHLQJ GLVFRQQHFWHG IURP WKH FRQFHSW RI PLPHVLV DQG UHFRQVWUXFWHG ZLWKLQ WKH SURFHVV RI QDUUDWLRQDQGVWRU\WHOOLQJ,WHYROYHVZLWKLQDGLVFXUVLYHDQGPXOWLIDFHWHG UHDOLW\ ZKLFK GHILHV DQ\ GHILQLWH FDWHJRULHV RI WUXH DQG IDOVH %\ HYRNLQJ WKLVVLPXOWDQHRXVQHVVRIVDFUHGDEVHQFHDQGSUHVHQFH&LW\RI*RGFHQWUHV WKHILFWLRQDOZRUOGDURXQGDPLGGOHZKLFKLVH[WUHPHO\LQVWDEOHDQGIOXLG \HW ZKLFK VWLOO KROGV LWWRJHWKHU DQG SURYLGHV D IRXQGDWLRQ IRUUHLQWHJUD WLRQ ,WLVFOHDUWKDWWKHWHUP¶ILFWLRQVRIVSLULWXDOLW\·LVXVHIXOLQGLVFXVVLRQV RI VSLULWXDO ZRUOG FRQVWUXFWLRQ DV D PHDQV RI SD\LQJ WULEXWH WR D EURDG UDQJHRIWKHILFWLRQDOH[SUHVVLRQVRI*RGDQGWKHVSLULWXDOZKLFKFDQQRW QHFHVVDULO\EHFDOOHGUHOLJLRXVLQDQDUURZVHQVH&LW\RI*RGFDQWKXVKDUGO\ EH FDOOHG D UHOLJLRXV QRYHO SURYLGHG WKDW RQH LV FRQYLQFHG WKDW IDLWK LV DOZD\V ´PRUH WKDQ D PHUH LPDJLQDWLYH OHDS LQWR D>«@ SRVVLEOH ZRUOGµ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¶*RG·WKH¶WUDQVFHQGHQWDO·RUWKH¶UHOLJLRXV·³DQHWZKLFKLQ LWVWRWDOLW\FUHDWHVWKHDV\PPHWULFDOLQWHUWH[WRIDFXOWXUH·V*RGWDON

5HIHUHQFHV %HOODK5REHUW1%H\RQG%HOLHI(VVD\VRQ5HOLJLRQLQD3RVWWUDGLWLRQDO:RUOG%HUNH OH\8RI&DOLIRUQLD3 %HO]HQ -DFRE $ ´7KH &XOWXUDO 3V\FKRORJLFDO $SSURDFK WR 5HOLJLRQ &RQWHPSRUDU\ 'HEDWHVRQWKH2EMHFWRIWKH'LVFLSOLQHµ7KHRU\DQG3V\FKRORJ\ ²  %UXQHU-HURPH´7KH1DUUDWLYH &RQVWUXFWLRQRI5HDOLW\µ&ULWLFDO,QTXLU\  ²

)LFWLRQDO1DUUDWLYHVDQG7KHLU:D\VRI6SLULWXDO:RUOGPDNLQJ



&ULWHV 6WHSKHQ ´7KH 1DUUDWLYH 4XDOLW\ RI ([SHULHQFHµ :K\ 1DUUDWLYH" 5HDGLQJV LQ 1DUUDWLYH 7KHRORJ\ (GV 6WDQOH\ +DXHUZDV DQG / *UHJRU\ -RQHV *UDQG 5DSLGV (HUGPDQV² 'HWZHLOHU 5REHUW ´7KHRORJLFDO 7UHQGV RI 3RVWPRGHUQ )LFWLRQµ -$$5   ² 'LVFK /LVD +DQQDK $UHQGW DQG WKH /LPLWV RI 3KLORVRSK\ ,WKDFD/RQGRQ &RUQHOO 83  'RFWRURZ(/&LW\RI*RG/RQGRQ$EDFXV (LVHQ 8WH ( 'LH 3RHWLN GHU $SRVWHOJHVFKLFKWH (LQH QDUUDWRORJLVFKH 6WXGLH *|WWLQJHQ 9DQGHQKRHFN5XSUHFKW )OXFN :LQIULHG 7KHRULHQ DPHULNDQLVFKHU /LWHUDWXU .RQVWDQ] 8QLYHUVLWlWVYHUODJ .RQVWDQ] *RRGPDQ1HOVRQ:D\VRI:RUOGPDNLQJ,QGLDQDSROLV+DFNHWW3XEOLVKLQJ *ULIILQ 'DYLG 5D\ ´,QWURGXFWLRQ 3RVWPRGHUQ 6SLULWXDOLW\ DQG 6RFLHW\µ 6SLULWXDOLW\ DQG 6RFLHW\ 3RVWPRGHUQ 9LVLRQV (G 'DYLG 5D\ *ULIILQ $OEDQ\ 1I@HPDOH OHDGHUV ZHUH WKUHDWHQLQJ EHFDXVH WKH\ XSVHW DW D VWDWHOHYHOWKHHVWDEOLVKHGPDOHIHPDOHSRZHUEDODQFHLQVRFLHW\XQOHDVK LQJDQJVWDERXWXSSLW\ZLYHVGDQJHURXVVHGXFWUHVVHVDQGIHPDOHZDUULRUV JDLQLQJWKHXSSHUKDQGLQWKHGRPHVWLFVSKHUHµ'L[RQ  &RQVLGHULQJWKHJUHDWQXPEHURIWH[WVGHSLFWLQJWKHZRPDQDWWKHWRS DVV\PEROLVLQJDZRUOGWXUQHGXSVLGHGRZQIIROOLRWW·VGHVFULSWLRQRIUXOLQJ ZRPHQ·V ELRJUDSKLHV DV HLWKHU VWUHVVLQJ H[HPSODU\ JRRGQHVV RU IRFXVLQJ RQ WKH HYLOV LQ ZRPDQ PDNHV VHQVH 7KHUH LV KRZHYHU WKH QHHG IRU D PRUH GHWDLOHG VWXG\ RI HDUO\ PRGHUQ ELRJUDSKLFDO ZULWLQJ RQ UXOLQJ ZRPHQVLQFHWKHODFNRIFRKHUHQFHDPRQJWKHWH[WVLQGLFDWHVWKDWWKHUHLV PRUH WR WKHVH WH[WV WKDQ D VLPSOH VHSDUDWLRQ RI JRRG IURP HYLO 7KH ZRPDQLQSRZHUFDQQRWEHVROHO\HYLOLISRUWUD\HGLQKHUOLIHWLPH³XQOHVV IURPWKHSRLQWRIYLHZRIWKHHQHP\DVZDVWKHFDVHZLWK&KULVWLQDVHH EHORZ  6KH LV IXUWKHUPRUH DQ H[FHSWLRQ ZLWK IHZ FRQQHFWLRQV WR ¶ZRPDQ·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³DV ZHUH VR PDQ\ HDUO\ PRGHUQ ELRJUDSKLHV³WKH QDUUDWHGOLIHFKDQJHVLWVVKDSHDVZLOOEHVKRZQEHORZ$JUHDWPDQ\HDUO\ PRGHUQ ELRJUDSKHUV W\SLFDOO\ OHJLWLPLVH WKHLU WH[WV E\ UHIHUULQJ WR H\HZLWQHVV DFFRXQWVWKDW FDQQRWEH YHULILHG RU WR WKHLU RZQ H[SHULHQFHV 2QWKHOHYHORIGLVFRXUVHWKH\FUHDWH´V\VWHPVRIWUXWKµDVGLVFXVVHGE\



(OLVDEHWK:nJKlOO1LYUHDQG0DUHQ(FNDUW

)UHGHULN7\JVWUXSLQKLVFRQWULEXWLRQ,QWKH&KULVWLQDELRJUDSKLHVFHUWDLQ SDUWVDUHWROGDQGUHWROGZKLOHRWKHUSDUWVDUHDGGHGORRVHO\WRWKHVWRU\ 7KH DXWKRUHGLWRUWUDQVODWRU DW WLPHV UHIHUV WR ´VHFUHW EXW UHOLDEOHµ VRXUFHVDQGDWWLPHVTXHVWLRQVVRXUFHVZKLOHFODLPLQJKLVRZQVWRU\WREH WUXHRUDWOHDVWWUXWKIXO+HVRPHWLPHVHPHUJHVZLWKKLVRZQFRPPHQWV ZKLOH DW RWKHU WLPHV KH GLVDSSHDUV KLGLQJ EHKLQG WKH VWRU\ DOORZLQJ GRFXPHQWVWRVSHDNIRUWKHPVHOYHVRUKHRYHUWO\VWDWHVKLVRZQSRVLWLRQ +H FRXOG SHUKDSV EH WHUPHG DQ XQUHOLDEOH ELRJUDSKHU LI XVLQJ PRGHUQ WHUPLQRORJ\EXWLQVHYHUDORIWKHWH[WVSXEOLVKHGRQWKHOLIHRI&KULVWLQD ZHFDQDOVRWUDFHWKHYRLFHRIDQDUUDWRUZKRDSSHDUVLQWKHWH[WWRWHOOKHU OLIHVWRU\³WKLVQDUUDWRUZULWHVKLPVHOILQWRWKHWH[WDVKHUELRJUDSKHU 'DOH 6SHQGHU KDV QRWHG WKDW WKH DXWKRUV RI OLIH VWRULHV QHHG WR JHW FORVHWRWKHLUREMHFWRIVWXG\DQGWRPDNHWKHPILWLQWRWKHLURZQXQGHU VWDQGLQJRIWKHZRUOG7KHDXWKRURIELRJUDSKLHVFDQRQO\ZULWHIURPKLV RUKHURZQSHUVSHFWLYHDQGWKXVEHFRPHVFHQWUDOWRWKHOLIHGHSLFWHG³WKH ELRJUDSK\FDQQRWEHDQ\WKLQJEXWDFRQVWUXFWLRQRIDOLIH³RIOLIHLQFRQ WH[W 6SHQGHU YLLL²L[  7KH UHODWLRQVKLS EHWZHHQ ELRJUDSKHU DQG ELRJUD SKHH FDQ KHQFH EH UHJDUGHG DV LGHRORJLFDOO\ GHWHUPLQHG DQG ERXQG E\ JHQUH7KHFKRLFHRIVXEMHFWDQGWKHFKRLFHRIZKDWWRWHOODERXWWKHVXE MHFWDUHFUXFLDOIDFWRUVIRUWKHUHSUHVHQWDWLRQRIDSHUVRQLQWKHQDUUDWLYH ,Q FDVHV ZKHUH FRQYHQWLRQDO QRUPV DUH WXUQHG XSVLGH GRZQ WKH ELRJUD SKHUILQGVKLPVHOILQDGLIILFXOWSRVLWLRQ+HKDVWRZULWHDERXWVRPHWKLQJ DV WUXH³WKH UHLJQLQJ ZRPDQ³ZKLOH DW WKH VDPH WLPH VWUHVVLQJ WKH H[ WUDRUGLQDU\VLWXDWLRQLQRUGHUWRUHVWRUHRUGHU7KHIHPDOHVRYHUHLJQFDQ WKXV RQO\ H[LVW DV GHYLDQW .DWKOHHQ %DUU\ DOOXGHV WR WKH LPDJH RI WKH ZRPDQDVHYLODOPRVWPRQVWURXVDFUHDWXUHWRWDPHLIGLYHUJLQJIURPWKH JHQHUDOQRUP 3DWULDUFKDO VRFLHW\ ZLOO QRW DFFHSW DQ\ ZRPDQ ZKR UHIXVHV WR EH GRPLQDWHG ,I VKH SHUVLVWV WKXV LW UHZULWHV KHU KLVWRU\ DQG UHVKDSHV KHU FKDUDFWHU SXQLWLYHO\ WZLVWLQJKHUZLOOEHQGLQJKHULPDJHDQGGLVWRUWLQJKHULGHQWLW\KHUGHILDQFHDS SHDUVDVDGHIRUPLW\³DQDEHUUDWLRQRIQDWXUH 

:RPHQZKRZHUHRIILFLDOO\DSSRLQWHGWRUXOHLQHDUO\PRGHUQ(XURSH³LQ WKHLURZQULJKWRUDVFRQVRUWUXOHUV³EHORQJWRDVPDOOJURXSRIZRPHQ ZKRDUHWRRRXWVWDQGLQJIRUDJHQHUDOFRPSDULVRQZLWKRWKHUZRPHQRU JURXSVRIZRPHQ,WLVQHYHUWKHOHVVLPSRUWDQWWRORRNDWWKHLUELRJUDSKLHV DQGELRJUDSKHUVVLQFHWKH\EHORQJWRWKHIHZHDUO\PRGHUQZRPHQZKR ZHUH JLYHQ SHUVRQDO DWWHQWLRQ DQG ZKRVH OLYHV ZHUH WXUQHG LQWR ZULWWHQ QDUUDWLYHV/RRNLQJLQWRWKH*HUPDQSXEOLFDWLRQVRQ4XHHQ&KULVWLQDLW EHFRPHV HYLGHQW WKDW PDQ\ RI WKHP FODLP WR IRFXV RQ KHU OLIH EXW WKDW WKH\GRQRWSULPDULO\WHOOKHUOLIHVWRU\7KH\GRQRWVROHO\HQJDJHZLWKKHU ´EHLQJµ EXW UDWKHU ZLWK WKH WXUEXOHQFH WKDW FKDUDFWHULVHG KHU OLIHWLPH LQ

1DUUDWLQJ/LIH



(XURSH 7KHLU LQWHUHVW LQ H[SODLQLQJ &KULVWLQD WR WKH UHDGHU³ZKHWKHU SRVLWLYHO\RUQHJDWLYHO\³QRQHWKHOHVVGHPRQVWUDWHVWKHLURQWRORJLFDOFRQ FHUQVZLWKWKHSHUVRQSRUWUD\HG+HUHRQO\DIHZWH[WXDOH[DPSOHVZLOOEH SUHVHQWHG WR LOOXVWUDWH WKH LQWHUGHSHQGHQFH EHWZHHQ JHQGHU DQG JHQUH ZKHQQDUUDWLQJWKHOLIHRIDQHDUO\PRGHUQTXHHQDQGPDNLQJDZRUOGWR ILWKHU +DUGO\DQ\RWKHUIHPDOH(XURSHDQUXOHUKDVDWWUDFWHGDVPXFKDWWHQ WLRQ XS WR WKH SUHVHQW GD\ DV 4XHHQ &KULVWLQD HYHQ WKRXJK KHU UHLJQ ODVWHGDPHUHWHQ\HDUV²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³ZKHQWKHIDPLO\OLQHKDVWREHVDYHG 7KH RIILFLDOO\ VDQFWLRQHG LPDJH RI &KULVWLQD GRXEWOHVVO\ SOD\V DQ LP SRUWDQW UROH LQ WKH OLWHUDU\ LQWHUSUHWDWLRQ RI KHU OLIH ,Q WKH SDQHJ\ULFDO UHSUHVHQWDWLRQV ZKLFK ZHUH PDQLIHVWHG LQ K\PQV SUDLVLQJ WKH VRYHUHLJQ RQ FRLQV HQJUDYLQJV DQG PHGDOV WKUHH IDFWRUV DUH HVSHFLDOO\ HYLGHQW QDPHO\&KULVWLQD·VUROHDV*XVWDYXV$GROSKXV·VGDXJKWHUDVWKH´4XHHQ RI3HDFHµDQGDVDQLQWHOOHFWXDOUXOHULQWHUHVWHGLQDUWDQGFXOWXUH)URP KHUYHU\ELUWK&KULVWLQDDFTXLUHGDQH[FHSWLRQDOSRVLWLRQDVGDXJKWHUDQG KHLUWRWKHWKURQHRIKHUIDWKHU*XVWDYXV$GROSKXVWKH3URWHVWDQWKHUR NLQJ UHYHUHG DV WKH ´/LRQ RI WKH 1RUWKµ 7KLV ZDV D UROH WKDW HQWDLOHG VSHFLILFH[SHFWDWLRQVYLUWXHVDQGGXWLHVVHH)DONGDOHQII *XVWDYXV $GROSKXV ZDV WKH SUHFRQGLWLRQ IRU KHU OHJLWLPDF\ DQG SRVLWLRQ DV PRQ DUFKLWZDVKHZKREHVWRZHGDXWKRULW\XSRQKHUUHLJQ7KLVSRVLWLRQLQJ RIDZRPDQWKURXJKWKHPDQLVFKDUDFWHULVWLFRIDJHQGHUUHODWHGSDWWHUQ

––––––– 

´>7@KHHSLVWHPRORJLFDOFKDOOHQJHWRELRJUDSK\KDVEHHQLQWHQVLILHGE\SRVWVWUXFWXUDOLVWDQG SRVWPRGHUQLVWFULWLTXHVRIODQJXDJHVHOIKRRGDQGKLVWRULFDOQDUUDWLYH,IODQJXDJHFDQQRW WUDQVSDUHQWO\FRQYH\UHDOLW\LIWKHVHOILVDILFWLYHFRQVWUXFWRUPHUHPXOWLSOLFLW\RIVXEMHFW SRVLWLRQVLIQDUUDWLYHLWVHOILPSRVHVDIDOVHFRKHUHQFHRQHYHQWVWKHQQRELRJUDSKLFDODF FRXQWRIVRPHRQH·VOLIHFDQEHLQDQ\VHQVH¶WUXH·µ+REHUPDQII 



(OLVDEHWK:nJKlOO1LYUHDQG0DUHQ(FNDUW

WKDW ZDV WKH UXOH IRU IHPDOH PRQDUFKV 7KH LGHQWLILFDWLRQ RI &KULVWLQD WKURXJK KHU IDWKHU ZDV HPSKDVLVHG LQ DOOHJRULFDO UHSUHVHQWDWLRQV RIWHQ V\PEROLVHGE\WKHSKRHQL[7KHJHQHDORJLFDOLFRQRJUDSK\PDUNVKHUQRW RQO\DVWKHOHJLWLPDWHVXFFHVVRUEXWDOVRDVWKHWUXVWHHRIWKHOHJDF\RIKHU IDWKHU·VVSLULW2QHRIPDQ\H[DPSOHVDQHQJUDYLQJIURPWKH\HDU VKRZV*XVWDYXV$GROSKXVLQWKHILJXUHRI-XSLWHU=HXVIO\LQJRQDQHDJOH DQG KDQGLQJ WKH PDOH V\PEROV RI +HUFXOHV·V FOXE DQG OLRQ VNLQ WR KLV GDXJKWHUVHH%DXPJlUWHO'L[RQ ,QWKLVDSRWKHRVLVRIWKHUXOHU ERWK WKH VRYHUHLJQV DUH UHQGHUHG P\WKLFDO HYHQ UHSUHVHQWHG DV DQFLHQW JRGV$QRWKHUSDUWRIWKHRIILFLDO&KULVWLQDLFRQRJUDSK\LVWKHSLFWXUHRI KHUDVDUXOHUFRPPLWWHGWRSHDFHPDLQO\EHFDXVHLWZDVGXULQJKHUUHLJQ WKDWWKH3HDFHRI:HVWSKDOLDZDVUDWLILHGLQWKXVHQGLQJWKH7KLUW\ «@YRQGHP3ULYDWOHEHQGHU.|QLJLQXQGLKUHQEHVRQGHUHQ+DQGOXQJHQµ   6HH)DONGDOHQDERXWIHPDOHUXOHUVLQHDUO\PRGHUQWLPHVDQGWKHLUPDOHUROHV

1DUUDWLQJ/LIH



FLWDWLRQRUUHYLHZRIVRXUFHVZKLFKDUHQRWDUUDQJHGDFFRUGLQJWRKLVWRUL FDOUHOHYDQFH,QWXUQWKHVHDUHWKHQDQQRWDWHGSULPDULO\LQWKHIRRWQRWHV /LNH3XIHQGRUI·VHQF\FORSHGLFZRUNWKHWH[WLVFKURQRORJLFDODQGLQFOXGHV PDUJLQDOLDOLVWLQJNH\WHUPVIURPWKHPDLQWH[WDVZHOODVGDWHV7KLVVWUXF WXUHDGPLWWHGO\GHWUDFWVIURPWKHOLWHUDU\TXDOLW\RIWKHWH[W$UFNHQKROW] GHIHQGVKLVFKRVHQQDUUDWLYHVWUXFWXUHE\VD\LQJWKDWWKHUHDGHUVKRXOGXVH WKH VRXUFHV WR LQGHSHQGHQWO\ ´GUDZ FRQFOXVLRQV DQG IRUP MXGJPHQWVµ ,Q RWKHU ZRUGV WKH ELRJUDSKHU KHUH ZLWKGUDZV IURP KLV DXWKRULDO DQG MXGJPHQWDO UROH $UFNHQKROW]·V ELRJUDSK\ LV QRW LQWHQGHG DV VXFK LQ WKH VWULFW VHQVH RI WKH ZRUG KH ZULWHV EXW VXFK D RQH PLJKW IROORZ ODWHU +HUH KH WRXFKHV RQ WKH IXQGDPHQWDO QDUUDWLYH ZHDNQHVV LQ KLV WH[W QDPHO\WKHSUREOHPRIUHDGDELOLW\7KRVHZLWKDGLIIHUHQWPRWLYDWLRQIRU UHDGLQJ WKH ZRUN DUH JLYHQWKH SUDJPDWLF DGYLFHWRVLPSO\ VNLS RYHU WKH PDQ\TXRWDWLRQVIURPWKHVRXUFHPDWHULDO2QWKHERUGHUEHWZHHQOLWHUD WXUHDQGVFKRODUVKLS$UFNHQKROW]·VDLPFOHDUO\OHDQVWRZDUGWKHODWWHU7KH GHOHFWDUHDVSHFWRIZDQWLQJWRHQWHUWDLQKDVEHFRPHXQLPSRUWDQW ,Q $UFNHQKROW]·V GHVFULSWLRQ &KULVWLQD DSSHDUV LQFRPSDUDEOH LQ KHU JHQGHULGHQWLW\DVDZRPDQSDUWLFXODUO\ZLWKUHIHUHQFHWRKHULQWHOOLJHQFH DQG FXOWXUH ,Q WKH VHFRQG YROXPH $UFNHQKROW] LQFUHDVLQJO\ HPSKDVLVHV KHUUHOLJLRXVFRQYLFWLRQV+LVSUDLVHFXOPLQDWHVDWWKHHQGRIWKHELRJUD SK\ ZKHUH KH ZULWHV ´WKDW LW ZRXOG WDNH HQWLUH FHQWXULHV WR EULQJ IRUWK DQRWKHU SHUVRQ RI KHU VH[ ZKR ZRXOG EH HTXDO WR KHUµ ,Q FRQWUDVW WR HDUOLHU ELRJUDSKLHV ZKLFK SULPDULO\ UHSURDFK WKH 4XHHQ IRU KHU IHPDOH LQFRQVWDQF\ $UFNHQKROW]·V WH[W WKHPDWLVHV WKH JHQGHU DVSHFW RQO\ ZKHQ KHZDQWVWRHPSKDVLVHKHUVXSHUEFKDUDFWHU&KULVWLQD·VKLVWRULFDOO\GRFX PHQWHG DPELJXRXV JHQGHU EHKDYLRXU LV ODUJHO\ GLVUHJDUGHG LQ RUGHU WR FUHDWH D SRVLWLYH LPDJH ZKLFK HYLGHQWO\ UHTXLUHG KHU EHLQJ FOHDUO\ DWWULE XWHGWRWKHIHPDOHVH[+RZHYHUKHDOVRH[SODLQVWKDWVKHZDVQRWSUR FODLPHG4XHHQEXWUDWKHU.LQJZKLFKSLFNVXSWKHLGHDRIDUXOHU³PDOH RU IHPDOH³KDYLQJ WZR ERGLHV WKH QDWXUDO DQG WKH SROLWLFDO VHH %DXP JlUWHO   7KH IDFW WKDW &KULVWLQD QHYHU PDUULHG UHSUHVHQWV D SROLWLFDO SUREOHP $UFNHQKROW]· DFFRXQW RIWKH SXEOLF GHEDWH DERXWKHUVXFFHVVRU WR WKH WKURQH DQG SRVVLEOHPDUULDJH ILOOV VHYHUDO SDJHV8OWLPDWHO\ $UFN

–––––––  ´)ROJHUXQJHQ]LHKHQXQG8UWKHLOH]LHKHQµ   ´'D PDQ EULJHQV GLHVHV DOOHV QXU JOHLFKVDP DOV 6WRII XQG %DXJHUlWKH DQJHVHKHQ KDEHQ ZLOO GDUDXV HLQVW HLQPDO HLQH I|UPOLFKH /HEHQVJHVFKLFKWH GLHVHU GXUFKODXFKWHQ .|QLJLQQ DXIJHIKUWZHUGHQN|QQWHµSUHIDFH²   ´(QGOLFK NDQQ PDQGHQHQMHQLJHQGLH YRQ JDU ]X NW]OLFKHQ *HVFKPDFNH VH\Q P|FKWHQ NHLQHEHVVHUHQ5DWKJHEHQDOVGDVVVLHVLFKDQGHQ7H[WJHJHQZlUWLJHQ:HUNHVVHOEVWKDO WHQXQGWKXQDOVREVLHGLHHLQJHUFNWHQ6WHOOHQ$QPHUNXQJHQXQG9HUZHLVHDXIIUHPGH 9HUIDVVHUGLHDXFK]XGHP(QGHDXIMHGHU6HLWHXQWHQVWHKHQQLFKWVlKHQµSUHIDFH   ´>«@ GD‰ JDQ]H -DKUKXQGHUWHGD]XJHK|UHQ XP LQ LKUHP *HVFKOHFKWHQRFK HLQH 3HUVRQ KHUYRU]XEULQJHQGLHLKUJOHLFKNRPPHµYRO 



(OLVDEHWK:nJKlOO1LYUHDQG0DUHQ(FNDUW

HQKROW]H[SODLQV&KULVWLQD·VEHKDYLRXUE\VXJJHVWLQJWKDW´SUREDEO\RQHRI KHUORYHVKDGPDGHKHUDEKRUWKHLGHDRIPDWULPRQ\µ$UFKHQKROW]KHUH VLPSO\PDNHVXVHRIUHGXFWLRQDQGOHDYHVRXWZKDWGRHVQRWILWKLVSXU SRVHV $VDELRJUDSKHU$UFNHQKROW]H[SODLQVPRUHWKDQKHMXGJHV+HIRUH JRHV QRYHOODOLNH DQHFGRWHV DQG FRXUW JRVVLS +RZHYHU LQ WKH IRRWQRWHV RQHGRHVILQGVXESORWVLQZKLFKUXPRXUVDUHUHSXGLDWHGDGYHUVDULHVRI WKH 4XHHQ FULWLFLVHG DQG VRXUFHV FRUUHFWHGRUVXSSOHPHQWHG $V DOUHDG\ PHQWLRQHGWKHIRFXVLVRQWKHUHSUHVHQWDWLRQRIWKH4XHHQ·VLQWHOOHFWXDO VXSHULRULW\ +HU DEGLFDWLRQ DQG FRQYHUVLRQ DUH GHDOW ZLWK LQ JUHDW GHWDLO 8VLQJDZLGHYDULHW\RIVRXUFHV$UFNHQKROW]LOOXVWUDWHVWKHGLIIHUHQWRSLQ LRQV WKDW IORXULVKHG LQ (XURSH DW WKH WLPH 7KH PRWLYH KH SURYLGHV IRU &KULVWLQD·VUHQXQFLDWLRQRIWKHWKURQHLVWKDWDIWHUKHUGHFLVLRQWRUHPDLQ XQPDUULHGDQGQRWKDYHDQ\FKLOGUHQWKHUHZDVQRUHDVRQIRUKHUWREXU GHQ KHUVHOI ZLWK WKH WURXEOHV RI JRYHUQLQJ 7KDW &KULVWLQD DIWHU KHU DEGLFDWLRQRIWHQDSSHDUHGLQPHQ·VFORWKHVLVPHQWLRQHGVHH EXWQRW GLVFXVVHG $UFNHQKROW] FLWHV VXFK GHSDUWXUHV IURP FRQYHQWLRQDO JHQGHU EHKDYLRXUZLWKRXWSURYLGLQJDQ\FRPPHQWDU\,QVWHDGWKHVRXUFHVGHSLFW WKHZD\LQZKLFK&KULVWLQDZDVUHJDUGHGE\KHUFRQWHPSRUDULHV)RUH[ DPSOH RQH UHSRUW GHVFULEHV KRZ ,WDOLDQ ZRPHQ ZHUH WDNHQ DEDFN XSRQ &KULVWLQD·VHQWU\LQWR5RPHQ 'HVSLWHWKHQDUUDWLYHLQWHQWLRQWROHW WKH VRXUFHV VSHDN IRU WKHPVHOYHV $UFNHQKROW] GRHV HYDOXDWH WKH IHZ VRXUFHVSHQQHGE\ZRPHQGLIIHUHQWO\IURPWKHH\HZLWQHVVUHSRUWVE\PDOH DXWKRUV&KULVWLQD·VHQWU\LQWR3DULVLVGRFXPHQWHGLQWZRGHWDLOHGUHSRUWV E\ODGLHVLQZDLWLQJWKH'XFKHVVHGH0RQWSHQVLHUDQG0DGDPHGH0RW WHYLOOH VHH   7KH WH[WV GHVFULEH IURP D IHPDOH SHUVSHFWLYH KRZ SHRSOH UHDFWHG WR &KULVWLQD 7KH ODGLHVLQZDLWLQJ DUH ILUVW DVWRQLVKHG E\ &KULVWLQD·V XQIHPLQLQH PDQQHU +RZHYHU RQFH WKH\ KDYH JRWWHQ RYHU WKHLU VKRFN RYHU KHU DSSHDUDQFH WKH\ DUH IDVFLQDWHG E\ KHU SHUVRQDOLW\ :KDW $UFNHQKROW] FULWLFLVHV LQ WKHVH ZRPHQ·V WH[WV LV WKDW WKH )UHQFK ODGLHVVKRXOGKDYHWKHDXGDFLW\WREHVRFRQWHPSWXRXVWRZDUGVZRPHQRI RWKHUQDWLRQVHVSHFLDOO\DV&KULVWLQD·VDSSHDUDQFHZDVWKHUHVXOWRIDODFN RIERWKPRQH\DQGLQWHUHVWVHH²Q 7KHZRPHQ·VUHSRUWVDUHDOVR

–––––––  ´(VPX‰QRWKZHQGLJZRKOHLQHUYRQLKUHQ/LHEOLQJHQLKUGHQ(KHVWDQG]XZLGHUJHPDFKW KDEHQµ²   ´'HQQ GD &KULVWLQD HLQPDO IU DOOHPDO VLFK IHVW XQG VWHLI HQWVFKORVVHQ KDWWH QLHPDOV ]X KHLUDWKHQVRZROOWHVLHGLHEULJH/HEHQV]HLWIUVLFK]XEULQJHQ8QGGDVLHNHLQH.LQGHU HUZDUWHWHVRILHODXFKGLH1RWKZHQGLJNHLWVLFKPLW5HJLHUXQJVVRUJHQ]XSODJHQZHJ=X PDKOGDLKUVRZRKOGLH(KUHDOVGLH0KVHOLJNHLWHQXQG8QUXKHQGHVN|QLJOLFKHQ6WDQGHV ]XU /DVW ZXUGHQ 'D VLH HLQHQ HUKDEHQHQ *HLVW EHVD‰ VR VFKPlXFKHOWH VLH VLFK EH\ GHQ PLWWlJOLFKHQ9|ONHUQXQEHNDQQWH5HL]HDQ]XWUHIIHQXQGYHUVSUDFKVLFKQHXHV9HUJQJHQ ZHQQVLHLQGHPVFK|QHQ,WDOLHQOHEHQ>@N|QQWHµ   6HHHYHQ:RUWPDQQ

1DUUDWLQJ/LIH



WULYLDOLVHGDOWKRXJK$UFNHQKROW]VWDWHVWKDWRQHFDQQRWFDVWGRXEWRQWKH VRXUFHVKHSROHPLFLVHVWKDWWKH\DUHMXVWDQH[SUHVVLRQRIIHPDOHHQY\ $VFRPSHQVDWLRQKHLQFOXGHVDSRVLWLYHGHVFULSWLRQRI&KULVWLQDE\D'XF GH*XLVHZKRVWUHVVHVWKDW&KULVWLQDVHHVKHUVHOIDVDQ$PD]RQDQGLVMXVW DVZLOGDQGSURXGDVKHUIDWKHU0DOHZLWQHVVHVGRQRWFULWLFLVHXQIHPL QLQH JHQGHU EHKDYLRXU RQ WKH FRQWUDU\ WKH\ HPSKDVLVH KHU PDVFXOLQH VSLULWDQGPHQWDOLW\)URPDPDOHSHUVSHFWLYHPDVFXOLQLW\LVDSSOLHGDVD SRVLWLYHQRUPHYHQIRUDIHPDOHVRYHUHLJQ$UFNHQKROW]·VIXUWKHUYLQGLFD WLRQRIWKH4XHHQ·VKRQRXULVSURYLGHGH[QHJDWLYRZLWKWKHFRQFOXVLRQWKDW WKHUHZRXOGXQGRXEWHGO\KDYHEHHQWDONDERXWKHULOOLFLWVH[XDOSUDFWLFHV KDGSURRIRIVXFKEHKDYLRXUHYHUH[LVWHGVHH9RO  %HVLGHV WKH PDQ\ ZULWWHQ GRFXPHQWV $UFNHQKROW] FRPPHQWV RQ FRLQV ZKLFK PLUURU FHQWUDO HYHQWV LQ &KULVWLQD·V OLIH 7KLV LV QRWHZRUWK\ LQVRIDUDVFRLQVDUHDSDUWRIWKHRIILFLDOYLVXDOODQJXDJH7KLVLQWXUQJLYHV ULVH WR WKH TXHVWLRQ RI ZKDW $UFNHQKROW] XQGHUVWDQGV LQ JHQHUDO E\ KLV QDUUDWLYHLQWHQWRISUHVHQWLQJWKH4XHHQ·VSULYDWHVSKHUH7KHVRXUFHVGR GHVFULEHDQGGRFXPHQWWKH4XHHQ·VQDWXUHEXWPXFKRIWKDWZKLFK$UFN HQKROW] UHSUHVHQWV EHORQJV LQ WKH UHDOP RI SROLWLFDO HYHQWV DQG MXULGLFDO UHIOHFWLRQV RU H[SODLQV SDUWLFXODU LVVXHV VXFK DV WKH XQLYHUVLW\ V\VWHP LQ 6ZHGHQ $UFNHQKROW]·V ZRUN XVKHUV LQ D QHZ SKDVH LQ WKH ELRJUDSKLFDO ZULWLQJDERXW&KULVWLQD+HUHFRUGV&KULVWLQD·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

–––––––  ´0DQZUGH]ZDUXQUHFKWKDQGHOQZHQQPDQGLH(U]lKOXQJHQGLHVHUEH\GHQ+RIGDPHQ YRQ&KULVWLQHQVHUVWHQ$XIHQWKDOWHLQ)UDQNUHLFKEHUKDXSWLQ=ZHLIHO]LHKHQZROOWH$O OHLQHVIUDJWVLFKQXUREPDQDOOHQXQGMHGHQNOHLQHQXQGEHVRQGHUHQ8PVWlQGHQLKUHV%H ULFKWHVNHFNOLFKWUDXHQGDUIRGHUREPDQQLFKWYLHOPHKUVDJHQPVVWHGLHGHPVFK|QHQ *HVFKOHFKWHVRVHKUHLJHQH(LIHUVXFKWKDEHLKUHU)HGHUGLHDQ]JOLFKHQ$XVGUFNHZLHGHU &KULVWLQHQ HLQJHIO|‰HW XQG VROFKH 8QRUGQXQJHQ LKU DXIEUGHQ XQG VROFKH )HKOHU DQ LKU ILQGHQODVVHQGLHZHQLJVWHQGHQHQJUR‰HQ(LJHQVFKDIWHQGLHLKUQLHPDQGVWUHLWLJPDFKHQ NRQQWHGLH:DJHKLHOWHQµ²   ´6LHLVWHLQ:HLVHUGHUYRPZHLEOLFKHQQLFKWVDOVGLH*HVFKOHFKWVJOLHGHUKDW,KU*HLVWLVW GHUJHVWDOW]XU2IIHQKHU]LJNHLWJHQHLJWGD‰VLHVLFKQLHPDOVGHQ%OLFNHQXQG*HEHUGHQGLH ]X6SLHOXQJGHUZHLEOLFKHQ5ROOHHUIRUGHUWZHUGHQXQWHU]LHKHQDXFKQLFKWHLQPDOLQGHU $EVLFKW :HLEHUWUDFKW DQOHJHQ N|QQHQ 6LH EHWUDFKWHW GLH :HOW PLW GHU JHVHW]WHQ XQG PlQQOLFKHQ(QWVFKOLH‰XQJGLHLKU6FHSWHUXQG8HEHUIOX‰YHUDFKWHQµ 



(OLVDEHWK:nJKlOO1LYUHDQG0DUHQ(FNDUW

4XHHQ UHPLQG WKH FRQWHPSRUDU\ UHDGHU WKDW WZHQW\ILUVWFHQWXU\ JHQUH FDWHJRULVDWLRQLVQRWDSSOLFDEOHWRWKHVHNLQGVRIWH[WV)XUWKHUPRUHLWLV QRWSRVVLEOHWRLGHQWLI\D¶SRHWLFVRIELRJUDSK\·RXWRIWKHWH[WXDOPDWHULDO SUHVHQWHG KHUH :H ZRXOG KRZHYHU FODLP WKDW WKH DXWKRUV RI WKH WH[WV GLVFXVVHGDERYHZHUHZHOODZDUHRIPDQ\RIWKHSRVVLELOLWLHVRSWLRQVDQG WUDSV VXUURXQGLQJ OLIHZULWLQJ 7KH\ SLFN DQG FKRRVH LQ WKHLU VHDUFK IRU ¶WKHLU·SUHVHQWDWLRQRIWKHELRJUDSKHHZKLOHDOPRVWDOZD\VUHODWLQJWRWKH VH[JHQGHU RI WKH 6ZHGLVK PRQDUFK³GLUHFWO\ RU LQGLUHFWO\ 7KH\ PDNH QHZ QDUUDWLYH  ZRUOGV E\ UHPDNLQJ DQ LPSRUWDQW KLVWRULF ILJXUH LQ WKHLU QDUUDWLYHV 3HUVRQDO FKDUDFWHULVWLFV RI WKH 4XHHQ DUH PL[HG ZLWK HYHQWV OLQNHGWRKHUOLIH7KHUHVHHPVWRKDYHEHHQDQRQJRLQJH[FKDQJHRILGHR ORJLFDOO\SROLWLFDOO\DQGUHOLJLRXVO\FKDUJHGLGHDVEHWZHHQ&KULVWLQDELRJ UDSKHUV LQ (XURSH DOUHDG\ GXULQJ KHU OLIHWLPH 7KH\ ZDQWHG WR WHOO WKH ULJKW RU WUXH VWRU\ WR HQWHUWDLQ RU WR VWUHVV PRUDO YDOXHV DQG FKRVH WR ZULWHLQGLIIHUHQWWUDGLWLRQVDQGJHQUHV7KHLUFRPPRQJRDO³WRJHQHUDWH DOLIHIURPWKHSDUWVVHOHFWHGE\DQGDYDLODEOHWR WKHP³VKRZVGLIIHUHQW ZD\V RI ZRUOGPDNLQJ EXW WKH &KULVWLQD ELRJUDSKHUV RI WKH VHYHQWHHQWK DQG HLJKWHHQWK FHQWXULHV ZHUH ZULWLQJ ZLWK D GHVLUH WR FUHDWH D ¶ZKROH· ZRUOGD&KULVWLDQZRUOGRIJRRGDQGHYLOZLWKFOHDUERXQGDULHVDQGOLPLWV ,Q KLV HVVD\ ´$Q ,QWURGXFWLRQ WR 5DGLFDO &RQVWUXFWLYLVPµ   (UQVW YRQ*ODVHUVIHOGVWDWHV >,@WVHHPVWRPHWKDWWKHUHVLVWDQFHPHWLQWKHHLJKWHHQWKFHQWXU\E\*LDPEDWWLVWD 9LFR WKH ILUVW WUXH FRQVWUXFWLYLVW DQG E\ 6LOYLR &HFFDWR DQG -HDQ 3LDJHW LQ WKH PRUHUHFHQWSDVWLVQRWVRPXFKGXHWRLQFRQVLVWHQFLHVRUJDSVLQWKHLUDUJXPHQ WDWLRQDVWRWKHMXVWLILDEOHVXVSLFLRQWKDWFRQVWUXFWLYLVPLQWHQGVWRXQGHUPLQHWRR ODUJHDSDUWRIWKHWUDGLWLRQDOYLHZRIWKHZRUOG 

*ODVHUVIHOGLQKLVGLVFXVVLRQRI*RRGPDQ·VWKHRULHVQRWRQO\SRLQWVRXW WKHFRQVHUYDWLVPLQKHUHQWLQWKHKXPDQEHLQJDQGWKHIHDURIQHZZRUOGV DQGZRUOGRUGHUV+HXOWLPDWHO\UHIHUVWRWKHQDUUDWLRQRIOLIHVWRULHVVLQFH KXPDQOLIHWRXVLVZKDWPDNHVRXUZRUOG¶WKHZRUOG·:LWKWKHH[DPSOH RI 4XHHQ &KULVWLQD ZH KDYH VHHQ WKDW VKH LV DOORZHG HFFHQWULF WUDLWV DV ORQJDVWKH\GRQRWFRQIOLFWZLWKFRQYHQWLRQTXHVWLRQJHQGHUQRUPVRU WKUHDWHQLQVWLWXWLRQVRISRZHUVXFKDVWKHSDSDF\RUDEVROXWLVWPRQDUFK\ $V VRRQ DV WKH 4XHHQ WUDQVJUHVVHV WKH ERXQGDULHV VR FORVHO\ FRQQHFWHG ZLWKKHUVRFLDOSRVLWLRQDQGKHUVH[³DVLVGHVFULEHGLQDOPRVWDOOWKHWH[WV ZULWWHQDERXWKHU³KHUELRJUDSKHUVKDYHWRDGMXVWWKHWH[WXDOZRUOGWRILW WKHLUSXUSRVHV$ZRUOGWKHQWDNHVVKDSHWKDWPRUHRIWHQWKDQQRWVWUHVVHV YDOXHVRIWUDGLWLRQDQGFRQYHQWLRQWKDWW\SLFDOO\FDUU\PDOHFRQQRWDWLRQV

–––––––  6HHDOVR6WHYHQ&RQQRU·VFRQWULEXWLRQLQWKLVYROXPH&RQQRUWDONVDERXWWKHZRUOGDV´DQ RSHQQHFHVVLW\µWRWKHKXPDQEHLQJ

1DUUDWLQJ/LIH



5HIHUHQFHV $UFNHQKROW] -RKDQ +LVWRULVFKH 0HUNZUGLJNHLWHQ GLH .|QLJLQQ &KULVWLQD YRQ 6FKZHGHQ EHWUHIIHQG]XU(UOlXWHUXQJGHU*HVFKLFKWHLKUHU5HJLHUXQJXQGLQVRQGHUKHLWLKUHV3ULYDWOHEHQV ZLHDXFKGHU&LYLOXQG*HOHKUWHQKLVWRULHLKUHU=HLWQHEVW]Z\HQQRFKQLHJHGUXFNWHQ:HUNHQ GLHVHUJHOHKUWHQ3ULQ]HVLQQ'XUFKJHKHQGVDXIGHUHQ%ULHIHJHJUQGHWXQGDXVGHQEHZlKUWHVWHQ *HVFKLFKWVFKUHLEHUQ EHJODXEWHQ +DQGVFKULIWHQ XQG JHGUXFNWHQ 8UNXQGHQ ]XVDPPHQJHWUDJHQ PLW KLVWRULVFKHQ SROLWLVFKHQ NULWLVFKHQ XQG JHOHKUWHQ $QPHUNXQJHQ ZLH DXFK PLW *HGlFKW QL‰PQ]HQHUOlXWHUW1HEVWHLQHP$QKDQJHHLQLJHU6WFNH]XIHUQHUHU%HOHKUXQJXQG5HFKWIHU WLJXQJ  YROV 7UDQV -RKDQQ )ULHGULFK 5HLIIVWHLQ /HLS]LJ$PVWHUGDP 0RUWLHU ² %DOODVWHU 5RV 6HGXFWLYH )RUPV :RPHQ·V $PDWRU\ )LFWLRQ IURP  WR  2[IRUG 2[IRUG83 %DUU\.DWKOHHQ´7RZDUGD7KHRU\RI:RPHQ·V%LRJUDSK\)URPWKH/LIHRI6XVDQ % $QWKRQ\µ $OO 6LGHV RI WKH 6XEMHFW :RPHQ DQG %LRJUDSK\ (G 7HUHVD ,OHV 1HZ RIEHLQJWKHODVWJHQHUDWLRQ@DQGWKHQ\HWDQRWKHU JHQHUDWLRQWUXPSHWVILQDOLW\µ%ORRPTWGLQ3HUORII 



5HQp'LHWULFK

HYHQFUHDWLQJD´SRVWDSRFDO\SWLFVLWXDWLRQµ)UD]LHU 7KHTXRWHDWWKH EHJLQQLQJ RI WKH HVVD\ LOOXVWUDWHV WKDW WKH ZRUOG DV VHHQ E\ 0HUZLQ·V ´\RXµLVDOUHDG\YDQLVKLQJZKLFKIRUWKHVSHDNHUFOHDUO\LPSOLFDWHVWKLV ´\RXµLQWKHSURFHVVRIHQGLQJ7DNHQIURPRQHRIWKHODVWSRHPVLQ7KH 0RYLQJ 7DUJHW   WKHVH OLQHV LQGLFDWH ZKDW LV DW VWDNH LQ WKH SRVW DSRFDO\SWLFYLVLRQGHYHORSHGIXOO\LQWKH7KH/LFH´:KHQWKHIRUHVWVKDYH EHHQGHVWUR\HGWKHLUGDUNQHVVUHPDLQVµ7/ ,QWKHILUVWOLQHRIWKH 9LHWQDPSRHP´7KH$VLDQV'\LQJµWKHZRUOGKDVYDQLVKHGLVXQPDGH VKDWWHUHG E\ D KLVWRULFDO FDWDVWURSKH DQG ZKDW LV OHIW WR EH VHHQ LV WKDW ZKDW FDQ QR ORQJHU EH VHHQ 3DUDGR[HV VXFK DV WKLV DERXQG LQ D SRVW DSRFDO\SWLFYLVLRQDQGZLOOLQIRUPWKHGLVFXVVLRQRI:60HUZLQ·V7KH /LFHDQG&DURO\Q)RUFKp·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´ZRUOGPDNLQJµDQG GHYHORSVLWVRZQSDUWLFXODUZD\RIZRUOGPDNLQJ)RUWKHUHSUHVHQWDWLRQRI D ZRUOG DOUHDG\ HQGHG LOOXVWUDWHV KRZ WKH FRQFHSWRI ´ZRUOGPDNLQJµ H[ WHQGV EH\RQG D FRQVWUXFWLYLVW GLPHQVLRQ WR LVVXHV RI VSHFLILF FXOWXUDO KLVWRULFDO VLWXDWLRQV DQG WR XOWLPDWHO\ SHUVRQDOH[LVWHQWLDO FRQFHUQV ,Q DUJXLQJ ZKDW ZRUOGV DUH PDGH RI *RRGPDQ VWDWHV ´1RW IURP QRWKLQJ DIWHUDOOEXWIURPRWKHUZRUOGV:RUOGPDNLQJDVZHNQRZLWDOZD\VVWDUWV IURPZRUOGVDOUHDG\RQKDQGWKHPDNLQJLVDUHPDNLQJµ 7KLVDVSHFW RI UHPDNLQJ LQ WKH SURFHVVHV RI ZRUOGPDNLQJ KRZHYHU FDQ EH FKDUJHG ZLWK WKH VSHFLILF XUJHQF\ RI D SHUVRQDOH[LVWHQWLDO FRQFHUQ ZKHQ FRQ IURQWHGZLWKDFXOWXUDOKLVWRULFDOVLWXDWLRQLQZKLFKWKHZRUOGDVRQHNQHZ LWDQGWKHJURXQGVRQZKLFKWKLVZRUOGZDVPDGHKDYHLQIDFWFRPHWR QRWKLQJKDYHWREHUHPDGHEHFDXVHWKH\ZHUHXWWHUO\GHVWUR\HG,QVXFKD VLWXDWLRQ WKH UHPDNLQJ RI ZRUOGV VWDUWV LQVLGH RI UXLQV UXLQV RI D ZRUOG PDGHDQGUXLQVRIZD\VRIZRUOGPDNLQJ,QWKHDIWHUPDWKRIDFDWDVWUR SKHRIVXFKGHYDVWDWLRQ´UHPDNLQJµDQG´QRWKLQJµEHFRPHFKDUJHGZLWK

––––––– 

$OORI0HUZLQ·VSRHWU\LVTXRWHGIURP7KH6HFRQG)RXU%RRNVRI3RHWU\

6HHLQJD:RUOG8QPDGHDQG0DNLQJD:RUOG2XW RI5HPDLQV



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´:D\VRI1RWKLQJQHVVµ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·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¶QRUPDO SHRSOH·³D SRLQW RI FRQYHUJHQFH ZLWK WKH ILJXUH RI WKH YLVLRQDU\ SRHW RU SURSKHWSRHW WKDW KDV UHFHLYHG FRQVLGHUDEOHFULWLFDODWWHQWLRQIRUHPRVWLQWKHILJXUHRI%ODNH$IDLOLQJ

–––––––  

)RU WKH LQWHUUHODWLRQ RI WKH VSHDNHU·V SHUVSHFWLYH DQG WKH ZRUOG GHSLFWHG VHH 0OOHU =HWWHOPDQQ  %ODNH·VSRVLWLRQLQWKHDSRFDO\SWLFFDQRQRIZULWLQJFDQEHWUDFHGEDFNWR1RUWKURS)U\H·V LQWHUSUHWDWLRQLQ)HDUIXO6\PPHWU\6HH5RELQVRQ·VDQDO\VLV´/LWHUDWXUHDQG$SRFDO\SWLFµRI WKH ´URPDQWLF RU YLVLRQDU\µ   %ODNHDQ DSRFDO\SVH DQG )U\H·V ´%ODNHDQ DSRFDO\SWLF PDQµDVDQDO\VHGE\5REVRQ 



5HQp'LHWULFK

RIYLVLRQWKHQDVZHOODVKLIWIURPYLVLRQWRUHYLVLRQWUDQVSRUWVH[DFWO\ ZKDW LV LPSOLHG LQ D FKDQJH IURP DQ DSRFDO\SWLF WR D SRVWDSRFDO\SWLF SHUVSHFWLYHRIWKHHQGDVKLIWWKDWLQ0HUZLQDQG)RUFKp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¶ODWWHU KDOI· LQ WKDW LW KDV EHHQ FRQFHLYHG RI DV D FDWDVWURSKH RI D WUXO\ ZRUOG VKDWWHULQJDSRFDO\SWLFLPSDFW %RWKDWWKHWLPHDQGVXEVHTXHQWO\:RUOG:DU,,KDVEHHQXQGHUVWRRGWRVLJQLI\ DPRPHQWRIUXSWXUHWKDWSHUPDQHQWO\GHYDOXHVWKHSULQFLSOHVDQGDVSLUDWLRQVDV VRFLDWHG ZLWK (XUR$PHULFDQ WUDGLWLRQ 7KH ZDU VLJQLILHV WKH HQG RI WKH JUHDW QDUUDWLYHVWKDWKDYHVKDSHG:HVWHUQFLYLOL]DWLRQIRUWKHSDVWWZRKXQGUHG\HDUV 'HOODPRUD´,QWURGXFWLRQµ 

,QDGGLWLRQWRKDYLQJVLJQLILHGDQHQGLQJWRWKH´JUHDWQDUUDWLYHVWKDWKDYH VKDSHG:HVWHUQFLYLOL]DWLRQµ::,,KDVDOVREHFRPHDSLYRWDOODQGPDUN IRURXUFRQWHPSRUDU\XQGHUVWDQGLQJRIWKHHQGRIWKHZRUOG,Q WKHGH VWUXFWLRQWKDWZDVZURXJKWE\WKHJHQRFLGHRIWKH(XURSHDQ-HZVDQGWKH DQQLKLODWLRQRI+LURVKLPDDQG1DJDVDNLWKURXJKDWRPLFERPEVPDQNLQG KDVSURYHQFDSDEOHRIEULQJLQJWKHHQGRQLWVHOIDQGLQRUGHUWRLPDJLQH LWWKHVHLPDJHVQHHGRQO\WREHUHPHPEHUHGDQGUHSURGXFHG7KHLUQRWK LQJQHVV FDQQRW EH HQKDQFHG DQG LQVWHDG RI D PRYHPHQW IRUZDUGV WKH\ RQO\ VLJQDO ´:D\V RI 1RWKLQJQHVVµ*HU\  DV SRVVLEOH IXUWKHU URXWHVIRU KXPDQLW\ $GGLWLRQDOO\ VLWHV RI DEVROXWH GHVWUXFWLRQ VXFK DV $XVFKZLW] DQG +LURVKLPD SUHVHQW XV ZLWK LPDJHV RI ZKDW WKH ZRUOG DIWHU WKH HQG ZRXOGORRNOLNHDQGWKXVPDNHLWSRVVLEOHWRYLHZWKHPRPHQWDIWHUWKH PRPHQWRIRXURZQH[WLQFWLRQ

––––––– 

6HH6FKZHQJHURQWKHH[SHULHQFHRI+LURVKLPDVXUYLYRUV´WKHLQVWDQWDIWHUWKHEODVWWKH LQWHUQDO SHUFHSWLRQV RI WKH YLFWLPV ZDV WKDW DEVROXWHO\ QRWKLQJ UHPDLQHG RI WKH UHDOLW\

6HHLQJD:RUOG8QPDGHDQG0DNLQJD:RUOG2XW RI5HPDLQV



6XFK D SRVWDSRFDO\SWLF YLVLRQ KDV EHHQ SURPLQHQWO\ FDSWXUHG LQ WKH PLGVWRI:RUOG:DU,,E\:DOWHU%HQMDPLQLQKLVLPDJHRI´7KH$QJHORI +LVWRU\µ LQWHUSUHWLQJ WKH SDLQWLQJ $QJHOXV 1RYXV E\ 3DXO .OHH -XVW DV /\RWDUG OHDGV XV WKURXJK ´WKH HQG RI WKH JUHDW QDUUDWLYHVµ WR WKH SRVW PRGHUQ KHWHURJHQHLW\ RI WKH PDQ\ OLWWOH QDUUDWLYHV DQG ILQDOLWLHV VHH 'HOODPRUD´,QWURGXFWLRQµ/\RWDUG VRGRHV%HQMDPLQ·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´7KHVHVRQWKH3KLORVR SK\RI+LVWRU\,;µTWGLQWKHHSLJUDSKWR)RUFKp·V7KH$QJHORI+LVWRU\ 

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´DQJHORIKLVWRU\µLQDSRVLWLRQDNLQ WR WKH RQH RFFXSLHG E\ WKH VSHDNHU LQ PXFK RI SRVWDSRFDO\SWLF SRHWU\ FRPELQLQJ LQ WKH WHUP ¶ZLWQHVV· WKH VSHFLDO FDSDFLW\ WR VHH WKH XOWLPDWH SRZHUOHVVQHVV RI WKH SRVLWLRQ DQG WKH LPSOLFDWLRQ LQ WKH FDWDVWURSKLF KLVWRU\ LWVHOI :LWK WKH VKLIW IURP SURSKHW WR ZLWQHVV SRVWDSRFDO\SWLF UHSUHVHQWDWLRQV EHFRPH OHVV FRQFHUQHG ZLWK SURSKHF\ WKDQ ZLWK WUDXPD ,QWKHSRVWDSRFDO\SWLFYLVLRQWKHVLJQVRIWKHHQGEHFRPHV\PSWRPVRI

––––––



DURXQGWKHPµ DQG*HU\´)RURQHZKRKDVVXUYLYHGDWRPLFZDUQRWKLQJQHVVLVQRW RQO\DQDEVHQFHDQGDYRLGLWKDVDOVREHFRPHDZD\RIOLIHµ )RUDODUJHUVHQVHRIWKH SRVWDSRFDO\SWLFVHH%HUJHU´,WVHHPVVLJQLILFDQWWKDWLQWKHODWHWZHQWLHWKFHQWXU\ZHKDYH KDG WKH RSSRUWXQLW\ >@ WR VHHDIWHU WKHHQG RI RXU FLYLOL]DWLRQ³WR VHHLQ D VWUDQJH SUR VSHFWLYHUHWURVSHFWZKDWWKHHQGZRXOGDFWXDOO\ORRNOLNHLWZRXOGORRNOLNHD1D]LGHDWK FDPSRUDQDWRPLFH[SORVLRQRUDQHFRORJLFDORUXUEDQZDVWHODQGµ[LLL  6HHWKHH[FHOOHQWDQDO\VLVRI%HQMDPLQ·V¶DQJHORIKLVWRU\·LQ.DODLGMDQ7KH(GJHRI0RGHUQ LVPII VHHDOVR'HOODPRUD´,QWURGXFWLRQµ 



5HQp'LHWULFK

GHVWUXFWLRQ³DQGWKHVSHDNHULVQRWH[HPSWIURPWKDWVWDWHRIUXLQV-XVW OLNHWKH´DQJHORIKLVWRU\µWKHVSHDNHULQSRVWDSRFDO\SWLFSRHWU\LVFDS WXUHGE\WKHHQGKHPHDQVWRFDSWXUHFDXJKWLQUHYLVLQJWKHHQGKHFDQ QRWFKDQJH7KXVWKHVSHDNHUKLPVHOIDSSHDUVWUDXPDWLVHGE\WKHHQGLQJ KHYLHZVDIWHUWKHIDFW(TXDOO\EORZQDZD\E\WKHVWRUPRISURJUHVVWKH DQJHO RI KLVWRU\ GRHV QRW UHPDLQ XQDIIHFWHG E\ WKH FDWDVWURSKHV ZKRVH UHVXOWVRQO\KHFDQVHH+LVSRVLWLRQLVRQHRIFRQVWDQWUHWURVSHFWLRQDQG KH LV DV PXFK SURSHOOHG LQWR WKH IXWXUH DV SURMHFWHG E\ %HQMDPLQ LQWR D SRVWDSRFDO\SWLFIXWXUHWKDWSUHVHQWVLWVHOIDVD´FRPSOH[IRUPRIVWDVLVµ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³PRVW SURPLQHQWO\ IRU WKH ODWWHU KDOI RI WKHWZHQWLHWKFHQWXU\:RUOG:DU,, :LWKWKHHQGLQJRIWKHJUHDWQDUUDWLYHVLQDZRUOGVKDWWHULQJFDWDVWUR SKH DQ\ FRQFHSW RI WRWDOLW\ ZKLFK ZDV VWLOO D WRXFKVWRQH IRU PXFK RI PRGHUQLVPEHFDPHTXHVWLRQDEOHDQGLQGHHGVXVSHFW7KHLGHDRIWRWDOLW\ LWVHOIZDVLQFUHDVLQJO\FRQFHLYHGRIDVDSRFDO\SWLFVLQFHVXFKDQLGHRORJ\ ZDV WKH PDLQ FRQGLWLRQ IRU DQ\ PHWDQDUUDWLYH UXQQLQJ WRZDUGV VRPH JUHDWLPDJLQDU\HQG³OHDYLQJUHDOGDPDJHLQLWVZDNH)RU$PHULFDQSRVW ZDUSRVWDSRFDO\SWLFSRHWVIUDJPHQWDWLRQSUHVHQWHGLWVHOILQWZRGLIIHUHQW ZD\V LW DSSHDUHG ERWK DV D JLYHQ DQ LQHYLWDEOH KLVWRULFDO FRQGLWLRQ WR VWUXJJOH ZLWK DQG ZDV DFWLYHO\ FUHDWHG WKURXJK SRHWLF WHFKQLTXHV DV D PHDQVRIFULWLFDOUHIOHFWLRQ2EMHFWVRIVXFKFULWLFLVPZHUHVSHFLILFSUHVHQW FRQIOLFWV WKDW ZHUH DSRFDO\SWLFDOO\ FRORXUHG HJ WKH 9LHWQDP :DU WKH JHQHUDOGRPLQDQFHRIWKHDSRFDO\SWLFVHQVLELOLW\LQWKH$PHULFDQFXOWXUDO LPDJLQDU\DQGDQXQIOLQFKLQJSURJUHVVLYLVPWKDWKDVEHHQDSRFDO\SWLFDOO\ FKDUJHG VLQFH WKH ILUVW VHWWOHUV 6XFK DQ HPEHGGLQJ RI SRVWDSRFDO\SWLF

––––––– 



7KH SV\FKRDQDO\WLF YRFDEXODU\ WKDW ¶V\PSWRPV· HYRNHV LV QRW LQFLGHQWDO )RU WKH OLQN EHWZHHQSRVW DSRFDO\SVHDQGWUDXPDVHH%HUJHU´$SRFDO\SVHDQGWUDXPDDUHFRQJUXHQW LGHDVIRUERWKUHIHUWRVKDWWHULQJRIH[LVWLQJVWUXFWXUHVRILGHQWLW\DQGODQJXDJHDQGERWK HIIHFW WKHLU RZQ HUDVXUHV IURP PHPRU\ DQG PXVW EH UHFRQVWUXFWHG E\ PHDQV RI WKHLU WUDFHVUHPDLQVVXUYLYRUVDQGJKRVWVWKHLUV\PSWRPVµ  6HHIRUSRHWLFUHDFWLRQVWRWKH9LHWQDP:DU&KDWWDULMIRULWVDSRFDO\SWLFVLJQLILFDQFHLQ86 FXOWXUH2·/HDU\´3RSXODU&XOWXUHDQG$SRFDO\SWLFLVPµ² )RUWKHDSRFDO\SWLFVHQ VLELOLW\LQ$PHULFDQFXOWXUHIURPWKH3XULWDQVHWWOHUVWRWKHEHJLQQLQJRIWKHVWFHQWXU\ VHHIRULQVWDQFHWKHUHOHYDQWFKDSWHUVLQYROXPH,,,RI&ROOLQV0F*LQQDQG6WHLQ)RUWKH

6HHLQJD:RUOG8QPDGHDQG0DNLQJD:RUOG2XW RI5HPDLQV



SRHWU\LQLWVVRFLRFXOWXUDOVLWXDWLRQDWWDFKHVDSROLWLFDOVLJQLILFDQFHWRWKH WHUP ¶ZLWQHVV· DQG HOXFLGDWHV LWV SRVLWLRQ WRZDUGV FHQWUDO WHQHWV RI SRVW PRGHUQLVP ,W PXVW ILUVW RI DOO EH FOHDUO\ VWDWHG WKDW ¶SRVWDSRFDO\SWLF· FDQQRW EH HTXDWHGZLWK¶SRVWPRGHUQLVW·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³ZH ILQG LQ KLV SRHWU\ WKH ´LGHDO RI QRWKLQJQHVVµ DV VWURQJO\DVKLVUHVLVWDQFHWRWKHDSRFDO\SWLFGHVLUHIRUWRWDOGHVWUXFWLRQ +RZHYHUWKLVUHVLVWDQFHDOVRVWHPVIURPWKHGHVLUHWRSUHVHUYHDIRUPRI WRWDOLW\ IURP GHVWUXFWLRQ DQG WKXV HQWDLOV HLWKHU D UHVLVWDQFH DJDLQVW WKH ORVVRIRUDPRXUQLQJRIDORVWWRWDOLW\:RRGODQG·VDUJXPHQW[L WKDWWKH TXHVWLRQVZKHWKHU6WHYHQVVKRXOGEHUHJDUGHGDVDPRGHUQLVWRUDSRVW PRGHUQLVWSRHWDQGZKHWKHUKHVKRXOGEHFRQFHLYHGRIDVDQDSRFDO\SWLF

––––––

ODWWHUKDOIRIWKHWKFHQWXU\HVSHFLDOO\VHH%R\HUIRUDFRPSDULVRQEHWZHHQDSRFDO\SWLF UKHWRULFLQWKHWKDQGWKFHQWXULHV2·/HDU\$UJXLQJWKH$SRFDO\SVH IRUDFROOHFWLRQRI LQVLJKWIXOHVVD\VRQDSRFDO\SWLFDQGPLOOHQQLDOGLVFRXUVHVIURPWKHWKWRWKHWKFHQWXU\ (QJOHU )LFKWH DQG 6FKHLGLQJ 5RELQVRQ $PHULFDQ $SRFDO\SVHV  SURYLGHV D FRPSUHKHQVLYH GLVFXVVLRQ RI WKH UHODWLRQ EHWZHHQ WKH DSRFDO\SVH DQG $PHULFDQ OLWHUDWXUH DQG FRQYLQF LQJO\DUJXHVIRUDGLIIHUHQWLDWHGDSRFDO\SWLFKHUPHQHXWLF  6HHIRUDQLQVLJKWIXOGLVFXVVLRQRI6WHYHQV·VUHODWLRQWRWKHDSRFDO\SVH:RRGODQG´7KHVH HDUOLHUHQJDJHPHQWVZLWKDSRFDO\SWLFGLVFRXUVHKDYHPRUHLQFRPPRQZLWKWKHRSWLPLVWLF HDUO\PRGHUQLVWXVHRIDSRFDO\SVHDVDZD\RIWURSLQJPRGHUQLVP·VGHVLUHWREUHDNZLWKWKH SDVW>@7KLVODWHUYHUVLRQRIDSRFDO\SVHWKUHDWHQVWRHQGWKHHUDWKDWWKHHDUOLHUYHUVLRQ KHOSHGLQDXJXUDWHDQG6WHYHQV·UHVLVWDQFHWRWKLVHQGWHOOVXVDJUHDWGHDODERXWKLVDHVWKHW LFVDQGKLVSODFHLQOLWHUDU\KLVWRU\µ[YLL 



5HQp'LHWULFK

RU DQWLDSRFDO\SWLF SRHW DUH UHODWHG WR HDFK RWKHU IXUWKHUPRUHSRLQW RXW WKDWLQWKHVSHFLILFUHODWLRQWRWKHDSRFDO\SVHRQHFDQPDLQWDLQDVKLIWRI HPSKDVLVIURPPRGHUQLVPWRSRVWPRGHUQLVP2QHUHDVRQIRUVXFKDVKLIW PLJKWEHIRXQGLQWKHFKDQJHGUHODWLRQWRWKHZRUOG·VHQGLQWKHZDNHRI :RUOG:DU,,·VHQGRIWKHZRUOGVFHQDULRV,QWKHDWRPLFDJHSRHPVRQ QRWKLQJQHVVWDNHRQDKLVWRULFDOXUJHQF\DQGFXUUHQF\WKDW6WHYHQV·V´WKH QRWKLQJ WKDW LV QRW WKHUHµ 5DPD]DQL (OOPDQQ DQG 2·&ODLU   LQ KLV ´6QRZPDQµ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³LQ D SRVWDSRFDO\SWLF ZRUOGWKLVFRQFHSWRIWKHXOWLPDWHDQGGHILQLQJFDWDVWURSKHKDVEHFRPH REVROHWHSDUWRIWKHUXLQVRIWKHSDVW6LQFHWKHDSRFDO\SVHKDVWREHXOWL PDWHLWLVLQGHHGGHVWUR\HGE\DFDWDVWURSKHWKDWOHDYHVQRWKLQJEXWUXLQV ,Q VXFK D ZRUOG RI UHPDLQV LQ ZKLFK DOO LV RSHQHG XS EXW QRWKLQJ UH YHDOHG UHYHODWLRQ LWVHOI LV REOLWHUDWHG ,Q 'HUULGD·V IDPRXV SRVW

–––––––

 6HH IRU WKH GLVWLQFWLRQ EHWZHHQ DEVHQFH DQG ORVV /D&DSUD·V VDOLHQW HVVD\ ´7UDXPD $E VHQFH/RVVµ 2QH ILQGVD VLPLODU DUJXPHQW LQ WKHGLVWLQFWLRQ EHWZHHQ VWUXFWXUDO DQG KLV WRULFDOWUDXPDLQ%HUJHU² *HU\GLVFXVVHVWKLVGLVWLQFWLRQLQUHODWLRQWRWKHFKDQJHG FRQFHSW RI QRWKLQJQHVV LQ D SUH DQG SRVW+LURVKLPD ZRUOG LQ D FRPSDUDWLYH DQDO\VLV RI ´7KH 6QRZPDQµDQG 7KRP *XQQ·V ´7KH $QQLKLODWLRQ RI 1RWKLQJµ ´7KH GLIIHUHQFH EH WZHHQWKHPUHYHDOV,EHOLHYHDSDUDGLJPRIKRZLGHDVRIQRWKLQJQHVVKDYHFKDQJHGLQWKH QXFOHDU DJH :KLOH 6WHYHQV· SRHP LV KLJKO\ VHGXFWLYH LQ WKH ZD\ LW LPDJLQHV QRWKLQJQHVV *XQQ·V SRHP >@ SURYLGHV D PRUH UHDOLVWLFDOO\ RU ¶H[WULQVLFDOO\·  JURXQGHG H[SUHVVLRQ RI QRWKLQJQHVVDVZHKDYHFRPHWRWKLQNRILWVLQFH+LURVKLPDµ *HU\FRQWLQXHVWRDU JXH :KHUHDV 6WHYHQV· ´SRHP DSSURDFKHV DQ DOPRVW LGHDO H[SUHVVLRQ RI QRWKLQJQHVVµ  *XQQLPEXHVQRWKLQJQHVVZLWKWKH´FRQFHSWRISUHVHQWDQQLKLODWLRQµ*HU\ )RU D GLVFXVVLRQ RI WKH LPSRUWDQFH RI WKH QXFOHDU DJH WR SRHWU\ VHH WKH FKDSWHUV LQ %UXQHU ´1RLU3RHWLFVµ DQG´1XFOHDU)DPLO\µ 

6HHLQJD:RUOG8QPDGHDQG0DNLQJD:RUOG2XW RI5HPDLQV



VWUXFWXUDOLVWGHFRQVWUXFWLRQRIDSRFDO\SWLFWKRXJKWWRQHWKLVVWDWHLVFDS WXUHGWKURXJKDSRUHWLFFRQVWUXFWLRQV´DQHQGZLWKRXWHQGµ´WKHDSRFD O\SVH RI WKH DSRFDO\SVHµ LQGHHG ´WKH DSRFDO\SVH ZLWKRXW DSRFDO\SVH DQ DSRFDO\SVH ZLWKRXW YLVLRQ ZLWKRXW WUXWK ZLWKRXW UHYHODWLRQµ ´2I DQ $SRFDO\SWLF7RQHµ² ³DQDSRFDO\SVHVRXVUDWXUHXQGHUHUDVXUH 7KHFRQVHTXHQWLPSOLFDWLRQVRIVXFKSURFHVVHVRIHUDVXUHIRUWKHSR HWLFIRUPDUHDQDO\VHGE\%ULDQ0F+DOHLQWKHFRQWH[WRIKLVGLVFXVVLRQRI SRVWPRGHUQ´3RHWU\XQGHU(UDVXUHµ´:KHQWKHVHPDQWLFEXLOGLQJEORFNV RI WKH SRHP IDOO XQGHU HUDVXUH LWV ZRUOG RVFLOODWHV RU IOLFNHUV³EHWZHHQ RQH VWDWH RI DIIDLUV DQG DQRWKHU HYHQ EHWZHHQ EHLQJ DQG QRQEHLQJ VRPHWKLQJDQGQRWKLQJµ +HQFHVXFKSRHWU\KHFRQWLQXHV´SURE OHPDWL]HV ZRUOGPDNLQJ >«@ 3URMHFWHG ZRUOGV RU SDUWV RI ZRUOGV DUH VXVFHSWLEOHRIEHLQJSODFHGXQGHUHUDVXUHUHWURVSHFWLYHO\³XQPDGHµ  0F+DOHGRHVQRWH[SOLFLWO\OLQNVXFK´SRHWU\XQGHUHUDVXUHµWRQRWLRQVRI DSRFDO\SVH RU SRVWDSRFDO\SVH EXW WKH ZD\ LQ ZKLFK KH KLVWRULFLVHV LW EHWZHHQ´WKHHUDVXUHRIWKH(XURSHDQ-HZV>DQG@WKHPDVVHUDVXUHVRPH WLPH LQ WKH LQGHWHUPLQDWH IXWXUH RI XV DOOµ   HFKRHV %HUJHU·V ²  WKHRULVDWLRQVRIWKHSRVWDSRFDO\SWLFWKDWLVSRVLWLRQHGEHWZHHQWZRFDWDV WURSKHV D UHDO RQH LQ WKH SDVW DQG DQ LPDJLQHG RQH SURMHFWHG RQWR WKH IXWXUH (TXDOO\ WKH IOLFNHULQJ EHWZHHQ VRPHWKLQJ DQG QRWKLQJ FDSWXUHV WKHLQWULFDWHUHODWLRQVKLSRIFUHDWLRQDQGGHVWUXFWLRQRQHILQGVDWWKHKHDUW RISRVWDSRFDO\SWLFSRHWU\ 0F+DOH·V DVVHUWLRQ WKDW VXFK SRHWU\ ´SUREOHPDWL]HV ZRUOGPDNLQJµ DGGLWLRQDOO\ KLJKOLJKWV WKDW SRHWU\ SUHVHQWLQJ WKH ZRUOG ´XQPDGHµ EULQJV WRDWWHQWLRQWKHH[LVWHQWLDODQGSHUVRQDOGLPHQVLRQWKDWLVDFWXDOO\DWVWDNH LQ ZRUOGPDNLQJ DQG UHVSHFWLYHO\ ZRUOGXQPDNLQJ )RU *RRGPDQ·V GLF WXP WKDW LW LV ZH ZKR PDNH RXU ZRUOGV UHPDNLQJ WKHP RXW RI RWKHU ZRUOGV VKRXOG QRW EH WDNHQ WRR OLJKWO\ 7KLV VWDWHPHQW RI UDGLFDO FRQ VWUXFWLYLVP FDUULHV ZLWK LW D QRWH RI H[LVWHQWLDO FRQFHUQ WKDW LV QRW WR EH RYHUORRNHG8QGHUVWRRGLQWKLVPDQQHU´ZRUOGPDNLQJµGRHVQRWOLEHUDWH XVIURPFRQIURQWLQJWKHZRUOGDVLWLV(YHQPRUHVRLWLVQRWDFUHDWLYH RSWLRQZHKDYHRUDQDUELWUDU\DFWRIRXUFKRLFHEXWVRPHWKLQJZHQHHG WRGRLQRUGHUWRH[LVWLQWKHZRUOGDVVXFK$FFRUGLQJO\LWGRHVQRWPDNH RXUDFWLRQVDQ\OHVVLQFRQVHTXHQWLDOWKDWZHFDQQRWDFFHVVWKHZRUOGRWKHU WKDQ WKURXJK WKH YHU\ FDSDFLWLHV RI WKH VHOI WKDW PDNH RXU VXEMHFWLYH ZRUOG ,QVWHDG WKLV XQGHQLDEOH OLQN EHWZHHQ RXU VHOI DQG RXU ZRUOG FDQ PDNHXVUHDOLVHKRZYHU\IUDJLOHRXUZRUOGWKHZRUOGRIHDFKRQHRIXVLQ IDFWLV³WKHZRUOGZHPDNHDQGE\ZKLFKZHLQWXUQDUHPDGH:KDWLVDW VWDNH LQ WKLV PDNLQJ DQG ZKDW LW PHDQV IRU RQH·V ZRUOG WR EH XQPDGH (ODLQH6FDUU\KDVSRLQWHGRXWZLWKDGPLUDEO\SDLQVWDNLQJFODULW\LQGLVVHFW LQJWKHSKHQRPHQDRIZDUDQGWRUWXUHIRULWPHDQVSUHFLVHO\WKHGHVWUR\



5HQp'LHWULFK

LQJRIYRLFHVSDFHDQGVHOIRIVRPHRQH7KHVHDUHLQGHHGWKHYHU\DV SHFWVRIKXPDQH[LVWHQFHWKDWZHOLYHE\ZKLFKDGGLWLRQDOO\DUHHVVHQWLDO FRQFHSWVWRRXUPDNLQJRIWKHZRUOGLQWKHVHQVHRIFUHDWLQJDFLYLOLVDWLRQ RI¶FXOWXUHPDNLQJ·:KDWLVXQPDGHWKHQDUHQRWPHUHO\WKHHOHPHQWV RUSDUWVDZRUOGLVPDGHRIEXWWKHYHU\VWUXFWXUHRIPDNLQJLWVHOILQWKDW LWLV´EHLQJUHYHUVHGRUXQFUHDWHGRUGHFRQVWUXFWHGµ6FDUU\ $FFRUG LQJO\6FDUU\KDVWHUPHGERWKZDUDQGWRUWXUHSURFHVVHVRI´XQPDNLQJRI FLYLOL]DWLRQµ ´XQFUHDWLQJ RI WKH FUHDWHG ZRUOGµ ´ZRUOG XQPDNLQJµ   ,Q WKHVH DFWLRQV HYHU\WKLQJ WKDW PDNHV RXU ZRUOG LQFOXGLQJ WKH YHU\ VWUXFWXUHVWKDWPDNHVXFKPDNLQJSRVVLEOHLVXQPDGHE\´WKHVWUXFWXUHRI XQPDNLQJµ6FDUU\ %H\RQGWKHVWDQGDUGDVVXPSWLRQWKDW´WRUWXUHDQG ZDU DUH DFWV RI GHVWUXFWLRQ DQG KHQFH VRPHZKDW WKH RSSRVLWH RI FUHD WLRQ WKDWWKH\HQWDLOWKHVXVSHQVLRQRIFLYLOL]DWLRQDQGDUHVRPHKRZWKH RSSRVLWHRIWKDWFLYLOL]DWLRQ µLQYHVWLJDWLQJWKHLU´VWUXFWXUHRIXQPDNLQJµ UHYHDOV WKDW WKH\ DUH ´LQ WKH PRVW OLWHUDO DQG FRQFUHWH ZD\ SRVVLEOH DQ DSSURSULDWLRQDSLQJDQGUHYHUVLQJRIWKHDFWLRQRIFUHDWLQJLWVHOIµ6FDUU\   7KH UHYHUVDO ZKLFK ILJXUHV VR LPSRUWDQWO\ LQ D SRVWDSRFDO\SWLF YL VLRQ FRQVWLWXWHV IRU 6FDUU\ WKH GHVWUXFWLRQ WKDW LV WKH XQPDNLQJ RI WKH ZRUOG )XUWKHUPRUHDUHGLUHFWLRQRIWKHIRFXVZLWK6FDUU\·VKHOSWRZKDWLW PHDQV WR XQPDNH VRPHRQH·V ZRUOG DQG ZKLFK LQVWDQFHV GR WKLV LQ WKH PRVW SHUVLVWLQJ ZD\ DOVR KLJKOLJKWV WKH QHFHVVLW\ RI RXU ZRUOGPDNLQJ LQ UHODWLRQWRWKHZRUOGDWODUJH)RUDVKHUKLVWRULFDOUHIHUHQFHVWRGLFWDWRU VKLSV ZDUV DQG WKH +RORFDXVW GHPRQVWUDWH WKH XQFDULQJ GHVWUXFWLRQ RI VRPHRQH·V ZRUOG LV HFKRHG LQ WKH GHVWUXFWLRQ RI WKH ZRUOG DW ODUJH WKH REMHFWLILFDWLRQRISHRSOHILQGVLWVHTXLYDOHQWLQUHJDUGLQJWKHZRUOGZLWK RXW DQ\ FRQQHFWLRQWR KXPDQ OLIH ,QIDFW WKH ZRUOGVKDWWHULQJ FDWDVWUR SKHV RI :RUOG :DU ,, ZKLFK KDYH VKDSHG RXU LPDJH RI WKH HQG RI WKH ZRUOGGRQRWPHUHO\SUHVHQWHQGLQJVWRWKHSKLORVRSKLFDODQGVRFLDO¶JUHDW QDUUDWLYHV·7KH\FDQHTXDOO\EHUHJDUGHGDVWKHXQPDNLQJRIWKHZRUOGVRI PLOOLRQVRISHRSOH³ZKHWKHUWKH\GLHGRUVXUYLYHGLQDFWXDOUXLQVDQGRU WUDXPDWLVHGLQDVWDWHRI'HDWKLQ/LIH,QWKHVDPHUHVSHFWWKHKRUURURI

–––––––  6HHIRUWKHLQWHUUHODWHGQHVVRIWKHVHSKHQRPHQDKHUDQDO\VLVRILQWHQVHSDLQLQWRUWXUH´,W LVWKHLQWHQVHSDLQWKDWGHVWUR\VDSHUVRQ·VVHOIDQGZRUOGDGHVWUXFWLRQH[SHULHQFHGVSD WLDOO\DVHLWKHUWKHFRQWUDFWLRQRIWKHXQLYHUVHGRZQWRWKHLPPHGLDWHYLFLQLW\RIWKHERG\ RUDVWKHERG\VZHOOLQJWRILOOWKHHQWLUHXQLYHUVH,QWHQVHSDLQLVDOVRODQJXDJHGHVWUR\LQJ DVWKHFRQWHQWRIRQH·VZRUOGGLVLQWHJUDWHVVRWKHFRQWHQWRIRQH·VODQJXDJHGLVLQWHJUDWHV VR WKDW ZKLFK ZRXOGH[SUHVVDQG SURMHFW WKH VHOI LV UREEHG RI LWV VRXUFH DQG LWV VXEMHFWµ 6KHJRHVRQWRVXPPDULVH´:RUOGVHOIDQGYRLFHDUHORVWRUQHDUO\ORVWWKURXJKWKHLQ WHQVHSDLQRIWRUWXUHµ6FDUU\   7KH H[WHQW RI WKHLU LPSRUWDQFH WR SRHWU\PDNLQJ DQG LWV FULWLFDO DQDO\VLV ZLOO EH GHPRQ VWUDWHGLQWKHUHDGLQJVRI0HUZLQDQG)RUFKp  6RWKHWLWOHRI5REHUW-D\/LIWRQ·VIDPRXVVWXG\RQ+LURVKLPDVXUYLYRUV

6HHLQJD:RUOG8QPDGHDQG0DNLQJD:RUOG2XW RI5HPDLQV



HFRORJLFDO GLVDVWHUV WKDW VSXUQ DSRFDO\SWLF IHDUV WRGD\ LV DOVR WKH KRUURU YLVLRQRIDZRUOGWKDWFDQQRORQJHUEHPDGHE\XVRIDZRUOGZHKDYH XQPDGHDQGHQGHGE\PDNLQJLWKRVWLOHWRKXPDQKDELWDWLRQ ,Q W\LQJ WKH DIWHUWKHHQGRIWKHZRUOG VWDWH WR WKH SHUVSHFWLYH RI D VSHDNHU ZKHWKHU H[SOLFLWO\ RU LPSOLFLWO\ SUHVHQW SRVWDSRFDO\SWLF SRHWU\ EULQJVWRWKHIRUHWKHSHUVRQDOGLPHQVLRQRIWKHH[SHULHQFHDQGHIIHFWVRI ZRUOG GHVWUXFWLRQ 1RW VLPSO\ DQ DOOVHHLQJ DQG VWUDQJHO\ GLVFRQQHFWHG ´DQJHO RI KLVWRU\µ WKH SRVWDSRFDO\SWLF VSHDNHU UHIOHFWV WKH WUDXPDWLVHG SRVLWLRQRIVRPHRQHIURPZKRPWKHZRUOGKDVEHHQWDNHQDZD\DQGWKH SRVWDSRFDO\SWLFSRHPUHSUHVHQWVWKHSRVLWLRQRIVRPHWKLQJWKDWKDVEHHQ ZUHVWOHG IURP D ZRUOG WKDW LV JRQH DQG HTXDOO\ WUDXPDWLVHG QRZ H[LVWV DIWHULWVHQG7KURXJKWKHXQPDNLQJXQFUHDWLQJRIWKHYHU\VWUXFWXUHVRI PDNLQJWKHFRQFHSWRIZRUOGPDNLQJLVSUREOHPDWLVHGWRWKHSRLQWRILWV UHYHUVDO7KXVWKHSRHWLFIRUPUHIOHFWVWKHVSHDNHU·VQHHGWRVWUXJJOHZLWK WKH SURSHUWLHV RI YRLFH VHOI YLVLRQ VSDFH DQG WLPH LQ RUGHU WR UHFUHDWH VRPHWKLQJRID³UHSKUDVLQJWKHWLWOHRI.HUPRGH·VVHPLQDOVWXG\RQWKH PRGHUQ DSRFDO\SVH³VHQVHRI DQ DIWHUWKHHQGLQJ VLWXDWLRQ LQ WKH SRHP 3RVWDSRFDO\SWLF SRHWU\ WKHQ GHPRQVWUDWHV WKDW WKH GHSLFWLRQ RI D ZRUOG XQPDGHRUVKDWWHUHGLQWRIUDJPHQWVGRHVQRWRQO\HQWDLODKLVWRULFDODQG DIRUPDOGLPHQVLRQEXWDOVRDYHU\SHUVRQDOH[LVWHQWLDORQHDQGWKDWDQ\ DSRFDO\SWLF YLVLRQ RU SRVWDSRFDO\SWLF UHYLVLRQ LV DERXW WKH HQG RI WKH ZRUOG DV ZH NQRZ LW EXW DOVR DERXW WKH HQG RI WKH ZRUOG WKDW ZH KDYH PDGH IRU XV E\ RXU YHU\ VHQVHV $V 0HUZLQ VWDWHG DW WKH RXWVHW RI WKH HVVD\´7HOOPHZKDW\RXVHHYDQLVKLQJDQG,ZLOOWHOO\RXZKR\RXDUHµ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·V V SRVWDSRFDO\SWLF SRHWU\ RI WKH ´GHHS LPDJHµ LQ 7KH /LFH   LQ ZKLFK VXUUHDO LPDJHU\ LV FRQQHFWHG WR D FULWLTXH RI $PHULFDQ DSRFDO\SWLF SURJUHVVLYLVP DQG &DURO\Q )RUFKp·V SRHWU\ RI WKH SRVW DSRFDO\SWLF ZLWQHVV LQ 7KH $QJHO RI +LVWRU\   DQ HSLF ZRUN RI IUDJ PHQWHG SRHWLF VSHHFK WKDW GHSLFWV D FRQWHPSRUDU\ ´ZDVWHODQGµ LQ UHIHU HQFHWRKLVWRULFDOFDWDVWURSKHVRIWKHWZHQWLHWKFHQWXU\



5HQp'LHWULFK

´@:KHQ7KH/LFHUHYHDOHGKLPDVIXOO\WKHSRHWRIQRWKLQJQHVVRIWKHFRQWLQXLQJ DSRFDO\SVHWKDWIDLOVWREULQJUHYHODWLRQLWZDVFOHDUWKDWKLVSHUVSHFWLYHKDGGDUNHQHGZHOO EH\RQGWKHOLPLWVRISROLWLFDOSURWHVW3URWHVWDVVXPHVWKHSRVVLELOLW\RIDQDOWHUQDWLYHDQG IRU0HUZLQE\WKHHQGRIWKHVL[WLHVLWVHHPHGWRODWHIRUDOWHUQDWLYHV0DQWKHGHVWUR\HUDV FXWRIIIURPDQ\QDWXUDORUVSLULWXDOFHQWHUVRIYDOXHLQDULFKO\GHVHUYHGH[LOHKHZDLWHGLQ GDUNQHVVIRUWKHHQGRIWKH(QGµ´0HUZLQ·V3ODQHWµ² 



5HQp'LHWULFK

WRSLFDOSRHPVWKDWDGGUHVVWKHFDXVHVRIWKHZRUOG·VGHVWUXFWLRQGHSLFWHG LQ WKH SRHWU\ 0HUZLQ ZDJHV D KHDY\ FULWLTXH VSHFLILFDOO\ DJDLQVW FHUWDLQ DVSHFWVRI$PHULFDQFXOWXUHWKDWDUHGULYHQE\WKHDSRFDO\SWLFQDUUDWLYHRI SURJUHVVLQJIRUWKHVDNHRIDJUHDWHQG´7KH/DVW2QHµ7/² IRU LQVWDQFH ODXQFKHV DQ DWWDFN DJDLQVW $PHULFDQ H[SDQVLRQ UHJDUGOHVV RI FRQVHTXHQFHLQZKRVHPDUFKDFURVVWKHFRQWLQHQWWKHQDWLRQIROORZHGLWV ¶PDQLIHVW GHVWLQ\· LQ D KHDYHQO\ SUHGHWHUPLQHG KLVWRU\RI SURJUHVV ´7KH $VLDQV'\LQJµ7/ DQG´:KHQWKH:DULV2YHUµ7/ ZLWKWKH 9LHWQDP:DUDVEDFNGURSWDNHXSWKHWRSLFRI$PHULFDQLPSHULDOLVPDVD KLVWRU\ RI FUHDWLQJ ¶JRRG ZDUV· ZKLFK EHFRPH DSRFDO\SWLFDOO\ PHWD SKRULVHGLQWRHQGEDWWOHVRIJRRGYVHYLO0HUZLQ·VLPDJHU\RIGHYDVWD WLRQ WKH DEVWUDFWLRQ RI WKH $PHULFDQV LQWR ´SRVVHVVRUVµ ZKR ´PRYH HYHU\ZKHUH XQGHU 'HDWK WKHLU VWDUµ 7/   DQG KLV VFDWKLQJ UHPDUNV WKDW´ZHZLOODOOHQOLVWDJDLQµ7/ DIWHU´WKH:DULV2YHUµPDNHFOHDU WKDWWKHVHHQGEDWWOHVFUHDWHQRQHZEHJLQQLQJEXWVLPSO\GHDWKGHVWUXF WLRQ DQG WKHLU FRQWLQXDWLRQ LQ DQRWKHU ZDU ,Q /D]HU·V DQDO\VLV  VHH DOVR /LEE\ ´:6 0HUYLQµ   0HUZLQ·V VHHPLQJO\ JHQHUDO XVH RI ´ZHµ DQG ´PDQµ EHFRPHV WLHG WR WKH 86 LQ WKDW KH WDNHV XS WKH PRWLI RI ´$PHULFD·V LPSRUWDQFH DV DQ H[DPSOH WR PDQNLQGµ GDWLQJ EDFN WR :LQ WKURS·V´FLW\XSRQDKLOOµDQGWZLVWVLWXSRQLWVHOI´,Q0HUZLQ·VH\HVRXU $PHULFDQ SROLWLFDO HFRORJLFDO DQG LQGXVWULDO H[DPSOH EHFRPHV D WKRU RXJKO\QHJDWLYHRQHµ/D]HU 2QHPLJKWUDGLFDOLVHVXFKDQDUJXPHQW LQ VXJJHVWLQJ WKDW 0HUZLQ FULWLFLVHV WKH YHU\ LGHD WKDW $PHULFD VKRXOG UHJDUGLWVHOIDVD´FLW\XSRQDKLOOµDUHGHHPHUQDWLRQIURPZKLFKRWKHU QDWLRQV VKRXOG WDNH WKHLU H[DPSOH RQ WKH ZD\ WR D KHDYHQO\ NLQJGRP )RFXVLQJRQWKHRXWFRPHRISROLWLFDODQGHFRQRPLFDOLQVWUXPHQWDOLVDWLRQV RIWKLVLGHRORJ\RIVHOILPSRUWDQFHKLVSRHWU\GHSLFWVWKHUHVXOWVRIVXFK DQ XQIDLOLQJ EHOLHI LQ RQH·V ULJKWQHVV DQG SURJUHVV WRZDUGV VRPH JUHDW LPDJLQDU\¶(QG·ZLWKWKHUHVXOWVEHLQJUHDOGHVWUXFWLRQOHIWLQLWVZDNH 7KH GHVWUXFWLRQ RI 0HUZLQ·V ´EXUQHG RXW ODQGVFDSHµ /LEE\ ´:6 0HUZLQµ LVUHIOHFWHGERWKLQWKHSRHWU\·VVWDUNLPDJHU\DQGWKHSRHWLF IRUPZLWKRXWSXQFWXDWLRQDQGUHJXODUPHWHU7KHUHSULQWRI´7KH*RGVµ DERYHGLVSOD\VWKHHIIHFWRIVXFKD´VWULSSHGEDUUHQµSDJH)ROVRP  7KH´,µ´7KHRQHQRWHµ´7KHRWKHUZRUOGµDUHGHSLFWHGERWKDVVLQJXODU DQG LVRODWHG 7KH OLQH EUHDNV VLJQLI\ ERWK RSHQLQJV WR YDULRXV PHDQLQJV EXW DOVR DFWXDO UXSWXUHV GLVFRQQHFWLQJ ZRUGV DQG PHDQLQJV IURP WKHLU VXUURXQGLQJV GLVORGJLQJ WKHP IURP WH[W DQG FRQWH[W VHH DOVR 5DPVH\  ,Q´:KHQHYHU,*R7KHUHµVXFKDEUHDNEHFRPHVWKHIRUPDOPDQL

–––––––  7KLVWHQGHQF\FDQEHQRWHGLQWKH´D[LVRIHYLOµDQG´HYLOHPSLUHµUKHWRULFRIUHFHQW86 SUHVLGHQWV +RZHYHU VXFK D FRQFHSWLRQ FDQ EH WUDFHG EDFN WR YHU\ EHJLQQLQJ RI WKH $PHULFDQQDWLRQLQWKHDSRFDO\SWLFFKDUJLQJRIWKH:DURI,QGHSHQGHQFHVHH%R\HU² ² 

6HHLQJD:RUOG8QPDGHDQG0DNLQJD:RUOG2XW RI5HPDLQV



IHVWDWLRQ RI WKH FRQWHQW ´WKH EHJLQQLQJ  LVEURNHQµ 7/   ZKLOH LQ ´7KH $VLDQV '\LQJµ ´5HPDLQVµ 7/   LV DOO WKDW UHPDLQV IURP RQH OLQH³DJDLQ RSHQLQJ XS WKH OLQH WR UHDGLQJV H[WHQGLQJ EH\RQG ZKDW LWV FRQWH[WVXJJHVWV´3DLQWKHKRUL]RQ5HPDLQVµLELG $GGLWLRQDOO\7KH /LFHKDVWREHXQGHUVWRRGDVSRVWDSRFDO\SWLFSRHWU\LQWKDWLWDSSHDUVDV KDYLQJEHHQZULWWHQ´DIWHUWKHHQGµ*URVVTWGLQ/LEE\´:60HUZLQµ   )URP WKH SHUVSHFWLYH WKDW WKH SRHWU\ LWVHOI LV SURMHFWHG LQWR D SRVW DSRFDO\SWLFPRPHQWSXQFWXDWLRQDQGUHJXODUPHWUHVLJQLI\DSDVWRUGHUD IL[HG VWUXFWXUH RI XQLWLHV WKDW LV ERWK ORVW DQG DFWLYHO\ DEDQGRQHG LQ WKH DIWHUPDWK 0HUZLQ·V LUUHJXODU EURNHQ OLQHV GHPRQVWUDWH ERWK DVSHFWV RI WKHSRVWDSRFDO\SWLFWKURXJKWKHPZHZLWQHVVWKHSURFHVVHVRIUHJDLQLQJ SRHWLFVSHHFKDIWHUDZRUOGDQGODQJXDJHVKDWWHULQJFDWDVWURSKHDQGWKH\ WHVWLI\WRWKHIDFWWKDWRQHFDQQRWUHYHUWWRWKHSRHWLFIRUPRIROGLQRUGHU WR FDSWXUH WKH LPSDFW RI DSRFDO\SWLF FDWDVWURSKHV WKDW LQ GRLQJ VR RQH ZRXOGLQIDFWDYRLGZKDWRQHDSSHDUVWRDGGUHVV7KHFDWDVWURSKLFUXSWXUH DIWHUZKLFK7KH/LFHSODFHVLWVHOIKDVWRLPSOLFDWHSRHWLFIRUPDQGWUDGLWLRQ DVZHOODVODQJXDJHDQGWKHSURGXFWLRQRIWH[WDVVXFK0HUZLQ·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·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

–––––––  'HUULGD´1R$SRFDO\SVHµ DUJXHVLQUHIHUHQFHWRDQXFOHDUH[SORVLRQWKDWDQXOWLPDWH FDWDVWURSKH ´ZRXOG LUUHYHUVLEO\ GHVWUR\ WKH HQWLUH DUFKLYH DQG DOO V\PEROLF FDSDFLW\µ VHH *HU\5REVRQ6FKZHQJHU[YL ,QWHUPVRIWKLVHVVD\VXFKDZRUOGXQPDNLQJFDWDV WURSKHZRXOGXQPDNHWKHYHU\VWUXFWXUHVE\ZKLFKZHPDNHPHDQLQJ



5HQp'LHWULFK

´DSSHDUVDVFKLHIDPRQJWKHJKRVWVµ5DPVH\ 7KHVSHDNHULVWKHQ QRWRQO\RQHDPRQJPDQ\LQWKHZRUOGDIWHUWKHHQGEXWDFFRUGLQJWRWKH ORJLF RI SRHWU\ KDV DOVR JHQHUDWHG WKLV ZRUOG KLPVHOI VHH 0OOHU =HWWHOPDQQ II HVS   $OO WKDW LV OHIW IRU WKH VSHDNHU LV WKH GH VWUR\HG ZRUOG KH VHHV RXWVLGH RI KLP EXW WKDW ILQGV LWV RULJLQ LQVLGH RI KLP$OOWKDWLVOHIWIRUWKHUHDGHULVWKHGHSLFWLRQRIHQGLQJVDQGWKHTXHV WLRQZKHWKHUWKLVUHSUHVHQWVDQLQQHURUDQRXWHUVWDWH,Q0HUZLQ·VFRO ODSVLQJ RI ERXQGDULHV KRZHYHU WKLV QR ORQJHU PDWWHUV $V WKH VSHDNHU ZDQGHUV DPRQJ WKH GHDG KH DSSHDUVWR KDYH FUHDWHG WKH GLVWLQFWLRQ EH WZHHQLQVLGHDQGRXWVLGHGLVDSSHDUV:KHWKHUWKHUHLVQRZRUOGDQ\PRUH RUQRRWKHUZRUOGDYDLODEOHWRWKHVSHDNHUDQ\PRUH³HLWKHUZD\WKHUHLV QRWKLQJ HOVH OHIW LQ WKLV SRHWLF XQLYHUVH ´,DP DOO WKDW EHFDPH RI WKHP&OHDUO\ DOO LV ORVWµ :LWK WKH VSHDNHU EHLQJ ´DOOµ ´DOO LV ORVWµ 7KH ´,µ WKDW EHFRPHV ´DOOµ LQ D SRHWU\ LQ ZKLFK QRWKLQJ HOVH FDQ EH DVFHU WDLQHGLV´ORVWµGZLQGOHVWRQRWKLQJ³DQGRXWRILWVRZQYDQLVKLQJJHQ HUDWHVWKHSRHWLFYLVLRQRIDZRUOGFRQWLQXDOO\IDGLQJRXW ´:KHUH2QFHWKH:RUOG+DG%HHQµ5HYLVLWLQJ5XLQVDVD:LWQHVVRI WKH(QGLQ&DURO\Q)RUFKp·V7KH$QJHORI+LVWRU\ 3RHWU\ LV JHQHUDOO\ UHJDUGHG DV WKH PRVW ¶SULYDWH· RI OLWHUDU\ JHQUHV DQG GHEDWHVDERXWWKHVWDWXVRISROLWLFDOSRHWU\KDYHVXUIDFHGUHJXODUO\DPRQJ SRHWV DQG FULWLFV ,Q WKH LQWURGXFWLRQ WR KHU DQWKRORJ\ $JDLQVW )RUJHWWLQJ WK&HQWXU\3RHWU\RI:LWQHVV&DURO\Q)RUFKpWDNHVDVWDQGE\DUJXLQJIRUD ´WKLUG WHUP RQH WKDW FDQ GHVFULEH WKH VSDFH EHWZHHQ WKH VWDWH DQG WKH VXSSRVHGO\VDIHKDYHQVRIWKHSHUVRQDOµDQGVXJJHVWLQJWR´FDOOWKLVVSDFH ¶WKH VRFLDO·µ $JDLQVW )RUJHWWLQJ   6XFK DQ DUJXPHQW IRU SRHWU\·V VRFLDO VSDFH DOVR LQIHUV WKDW SRHWU\ DOZD\V H[LVWV LQ WKH VRFLDO VSKHUH ZKHWKHU D VSHFLILFSRHPPDNHVWKLVH[SOLFLWRUQRW6LPLODUWRWKHFRQFHSWRISRVW DSRFDO\SWLF SRHWU\ VXJJHVWHG LQ WKLV HVVD\ )RUFKp·V ´SRHWU\ RI ZLWQHVVµ VWDQGV LQ GLUHFW LQWHUDFWLRQ ZLWK KLVWRULFDO HYHQWV SDUWLFXODUO\ WKRVH ZLWK WKH HIIHFW RI D WUDXPDWLF UXSWXUH 6XFK SRHWU\ LQ UHDFWLRQ WR WKH :RUOG :DUVWKH$UPHQLDQ*HQRFLGHRUWKHVRFLDOXSKHDYDOVRIWKHVEHDUV ´WKHWUDFHRIH[WUHPLW\ZLWKLQWKHPµ)RUFKp$JDLQVW)RUJHWWLQJ ZKLFK ´GHPDQGV QHZ IRUPV RU DOWHUV ROGHU PRGHV RI SRHWLF WKRXJKW ,W DOVR EUHDNVIRUPVDQGFUHDWHVIRUPVIURPWKHVHEUHDNVµ ,QWKHILUVWPDMRU

–––––––  6HHDOVR/D]HU 6HH%HUJHUII IRUWKHSRVLWLRQRIJKRVWVDVVXEMHFWVLQWKHSRVW DSRFDO\SVH  6HH.DODLGMLDQ/DQJXDJHVRI/LEHUDWLRQ 6WHLQDQG%UXQQHUIRUUHFHQWFRQVLGHUDWLRQVRQWKH VRFLDOWH[WLQ$PHULFDQSRHWU\6HHDOVRWKHVHFWLRQRQ´3RHWU\DV6RFLDO$FWµLQ)LQFNDQG 6FKHLGLQJ 

6HHLQJD:RUOG8QPDGHDQG0DNLQJD:RUOG2XW RI5HPDLQV



ZRUN WR GHSLFW WKH UHODWLRQ EHWZHHQ $PHULFDQ SRHWU\ DQG KLVWRULFDO WUDXPD 7KH (GJH RI 0RGHUQLVP .DODLGMLDQ SURSRVHV D SDUWLFXODU UHODWLRQ EHWZHHQSRHWU\DQGWHVWLPRQ\LQDUJXLQJWKDWSRHWU\FDQWDNHRQDVSHFLDO UROHLQ´VWDJLQJWUDXPDWLFKLVWRULHVµ FODLPLQJWKDWLW´SURYLGHVDIRU PDOPHGLXPIRUJLYLQJWHVWLPRQ\WRWUDXPDDFURVVWKHJHQHUDWLRQVRWKHU ZLVH VHSDUDWLQJ SULPDU\ DQG VHFRQGDU\ ZLWQHVVµ   ,Q ERWK RI WKHVH FRQFHSWLRQVIRUPDO FRQVLGHUDWLRQV SODFH DQ HPSKDVLV RQ WKH IUDJPHQWD WLRQDQGGLVUXSWLRQRISRHWLFODQJXDJH´LQYRNHGLQWHUUXSWLRQVRIDEVHQFH DQGVLOHQFH>@QRQVHTXLWXUVDQGVKLIWLQJSDWWHUQVRIV\QWD[µ $QG DOWKRXJK DV )RUFKp DUJXHV WKH ´IUDJPHQW LV QRW QHZ WR SRHWU\µ DQG LV LQGHHG´DVWDQGDUGIHDWXUHRIOLWHUDU\PRGHUQLVPµLWVLPSDFWPXVWDOVREH UHDGLQUHODWLRQWRWKHREMHFWRILWVUHSUHVHQWDWLRQ´%XWWKHIUDJPHQWJDLQV XUJHQF\LQWKHDIWHUPDWKRIH[WUHPLW\µ)RUFKp$JDLQVW)RUJHWWLQJ  ,Q7KH$QJHORI+LVWRU\$+ )RUFKpSUHVHQWVKHURZQVSDFHRI IUDJPHQWV WKDW JDLQ XUJHQF\ LQ WKDW WKH\ VLJQDO WKH DPDVVHG UXLQV RI WKH WZHQWLHWK FHQWXU\ LQ D IRUP ZKLFK VKH GHVFULEHV KHUVHOI DV ´SRO\SKRQLF EURNHQKDXQWHGDQGLQUXLQVZLWKQRSRVVLELOLW\RIUHVWRUDWLRQµQRWHVWR $QJHORI+LVWRU\QSDJ %HDULQJDVWKHWLWOH%HQMDPLQ·VLPDJHIRUDKLVWRU\ GHVWUXFWLYHEH\RQGUHGHPSWLRQRUKHDOLQJDQGIHDWXULQJKLV´1LQWK7KHVLV RQWKH3KLORVRSK\RI+LVWRU\µDVDQHSLJUDSK)RUFKp·VYROXPHEHFRPHVD SDUDGLJPDWLF H[DPSOH RI D ´SRHWU\ RI ZLWQHVVµ RI WKH HQG ,Q )RUFKp·V SRVWDSRFDO\SWLF YLVLRQ WKH VWDWXV RI WKH ´DQJHO RI KLVWRU\µ DV ZLWQHVV EHFRPHVFHQWUDODQGLVDV.DODLGMLDQFRQYLQFLQJO\DUJXHVGLUHFWO\DVVRFL DWHGZLWKWKHYLVXDOSRZHURIWKHDQJHO·VJD]H,QKLV/DFDQLDQDQDO\VLVWKH DQJHO·VJD]HLWVHOILVUHSUHVHQWHGLQ)RUFKp·VSRHWU\WKURXJKWKHGLVUXSWLRQ RI WKH ZRUOG·V YLVXDO FKDUDFWHULVWLFV ,W LV OHVV WKDW WKH ´DQJHO RI KLVWRU\µ ILJXUHVDVDVSHDNHULQWKHYROXPHWKDQWKDWWKHZRUOGGHSLFWHGLVWKHRQH DV VHHQ E\ WKH DQJHO DQG DIIHFWHG E\ LWV JD]H ´3RVLWLRQHG DV KLVWRULFDO ZLWQHVVUDWKHUWKDQPHVVHQJHU%HQMDPLQ·VDQJHODVVXPHVDVSHFLDODJHQF\ WKURXJKWKHWHVWLPRQ\RIKLVJD]Hµ.DODLGMLQ7KH(GJHRI0RGHUQLVP  7KH DQJHO·V UHWURVSHFW YLVLRQ LWV UHYLVLRQ DIIHFWV WKH VLJQLILFDQFH RI WKH YLVXDOLQWKHSRHP )RUFKp·VYLVXDOODQGVFDSHGLVSHUVHVDXQLIRUPO\RYHUH[SRVHGGHSWKRIILHOG,OOX PLQDWLRQQRORQJHUFRQQRWHVWKHUHGHPSWLYHTXDOLWLHVRIPHWDSK\VLFDOYDOXHV,Q VWHDGLWUHWXUQVOLNHDQLQWUXVLYHWUDXPDRIPHPRU\LQIOHFWHGE\WKHILUHLPDJHU\ RI1D]LGHDWKFDPSVDQGWKHQXFOHDUIODVKRI+LURVKLPD 

7KH PHDQLQJ DQG WKH TXDOLW\ RI WKH YLVXDO LWVHOI EHDUV ZLWQHVV WR WKH ZRUOG·V WUDXPDWLVDWLRQ MXVW DV )RUFKp·V IUDJPHQWHG SRHWLF VSHHFK EHDUV ZLWQHVV WR WKH FKDQJHG VWDWXV RI ODQJXDJH LQ VXFK D WUDXPDWLVHG ZRUOG 1HLWKHUODQJXDJHQRUWKHYLVLEOHUHPDLQH[HPSWIURP´WKHZRUOGKLVWRULFDO UXSWXUHRIWKH+RORFDXVWµ 7KHFRQVHTXHQFHRIWKDWUXSWXUHIRUODQ



5HQp'LHWULFK

JXDJHHVSHFLDOO\IRUSRHWLFVSHHFKIRXQGDGLUHFWDQGGLGDFWLFH[SUHVVLRQ GLUHFWO\ LQ LWV DIWHUPDWK WKDW VWLOO PHULWV FORVH DWWHQWLRQ WRGD\ ´7KHRGRU $GRUQR·VIDPRXVVORJDQWKDW¶WRZULWHSRHWU\DIWHU$XVFKZLW]LVEDUEDULF· WDFLWO\DVVXPHVDWHPSRUDOLW\ORFDWLQJXV¶DIWHU·WKH+RORFDXVWUDWKHUWKDQ ZLWKLQ WKH GHIHUUHG DFWLRQ RI LWV XQIROGLQJ HYHQWµ   $GRUQR·V UDGLFDO VWDWHPHQWZKLFKKHRIFRXUVHODWHUPRGLILHGFDQKRZHYHUDOVREHUHDGLQ WKHZD\WKDWSRHWU\ZKLFKSODFHVLWVHOIVHFXUHO\´DIWHU$XVFKZLW]µLQVWHDG RI´ZLWKLQWKHGHIHUUHGDFWLRQµRIWKH+RORFDXVWLVLQGHHGEDUEDULFVLQFH LW IDLOV WR DFNQRZOHGJH WKH ODVWLQJ LPSDFW RI WUDXPDWLF UXSWXUH RU HYHQ DFWLYHO\ HUDVHV LW IURP PHPRU\ ,Q WKLV VHQVH $GRUQR·V VWDWHPHQW EH FRPHVRIYLWDOLPSRUWDQFHWR)RUFKp·VSRVWDSRFDO\SWLFSRHWU\RIZLWQHVV VLQFH LW H[SOLFLWO\ SODFHV LWVHOI ZLWKLQ WKH ´GHIHUUHG DFWLRQµ RI KLVWRULFDO WUDXPDV7KHSRHWU\RI$QJHORI+LVWRU\SDLQIXOO\DWWHPSWVWRZRUNWKURXJK WKHLUVKDWWHULQJLPSDFWE\OHWWLQJWKLVLPSDFWVKDWWHULWVRZQSRHWLFYRLFH LQWRUXLQVDQGE\WHVWLI\LQJWRWKH´FULVLVLQYLVXDOLW\µWKHZRUOGVXIIHUHG DIWHUWKH+RORFDXVW ,WFRPPHQWVQRWRQO\RQWKHFKDQJHGFRQGLWLRQV RI SRHWLF UHSUHVHQWDWLRQ EXW DOVR RQ WKH FKDQJH WKDW KDV DIIHFWHG WKH TXDOLW\RIWKHYLVXDOE\ZKLFKWKHZRUOGSUHVHQWVLWVHOIWRXV 7KH$QJHO·VJD]HIROORZVWKH+RORFDXVW·V´YLVLEOHWUDFHRQWKHYLVXDO ILHOG RI SRVWPRGHUQLW\µ   DQG LWV WH[WXDO WUDFHV LQ WKH LQWHUSOD\ RI YDULRXVYRLFHVE\UHYLVLWLQJVSHFLILFVLWHVRIDSRFDO\SWLFGHVWUXFWLRQLQWKH WZHQWLHWKFHQWXU\´7KH7HVWLPRQ\RI/LJKWµ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

6HHLQJD:RUOG8QPDGHDQG0DNLQJD:RUOG2XW RI5HPDLQV



7KHZRUVWLVRYHU 7KHZRUVWLV\HWWRFRPH$+ 

,QWKHSODFHLQZKLFKWKH´YLVLEOHDQGLQYLVLEOHµFROODSVHDQGDUHVLJQLILHG E\ ´D EOD]LQJ PDSOHµ DQ\ PDWWHU RI VXEVWDQFH LV FDOOHG LQWR TXHVWLRQ :KHUHDV0HUZLQSRUWUD\HGKLVZRUOGDVRQHUREEHGRIDOPRVWHYHU\WKLQJ YLVLEOHWKHYLVXDOPRWLYHVLQ)RUFKp·VSRHWU\GHVFULEHDZRUOGUREEHGRI LWVVXEVWDQFHHYDSRUDWLQJEHIRUHRQH·VH\HV7KHREMHFWVRIWKHZRUOGDUH UHSODFHG HYHQ HUDVHG E\ WKHLU YLVXDO LPSUHVVLRQV LQ WKH PRPHQW RI GH VWUXFWLRQ ´OHJV RI WKH ZRPHQ VKLPPHUHGµ ´FRDO ERQHVµ ´NLPRQR RI VPRNHµ $ SDVVDJH LQ WKH ´5HFRUGLQJ $QJHOµ VWDWHV WKLV HYHQ PRUH GL UHFWO\´LQOLJKWSXOVLQJWKURXJKDVKOLJKWRIZKLFKWKHFRDWZDVPDGH /LJKWRIWKHLUEULFNKRXVHVµ$+ 7KHUHVXOWLQJLPSUHVVLRQLVDZRUOG RIZHLJKWOHVVQHVVZKLFKVLJQDOVQRWOLEHUDWLRQEXWDVXVSHQVLRQRIUHDOLW\ DQGOLIHLQDGUHDPVWDWHRIJKRVWV´WKHGUHDPZKHUHRQFHWKHZRUOGKDG EHHQµ,Q)RUFKp·V´XQLIRUPO\RYHUH[SRVHGGHSWKRIILHOGµWKHYLVXDODFW RIEOHDFKLQJRXWLVDNLQWRWKHHUDVXUHRIPDWWHUWKHHUDVXUHRIWKHYLVXDO VXUIDFH LV WKH GHVWUXFWLRQ RI PDWWHU LWVHOI $V WKH ZRUOG DSSHDUV ´LQ WKH HHULHJKRVWOLNHVKDGLQJRIDSKRWRJUDSKLFQHJDWLYHµ.DODLGMLDQ7KH(GJH RI 0RGHUQLVP   WKH ZRUOG LV QRWKLQJ PRUH EXW LWV RZQ VKDGH JKRVW VPRNHDQGDVKDIWHUWKHILUH´7KURZQXSLQWKHVN\E\DZLQGµ :KLOHWKHSRHPFRQMXUHVXSDYLVXDOUHSUHVHQWDWLRQRIWKHZRUOG·VDI WHUPDWK LWV XVH RI SRHWLF VSHHFK LV FKDUDFWHULVHG E\ IUDJPHQWDWLRQ DQG HUDVXUH HYHQ LQWKH TXRWLQJ RI RWKHUV ,Q D V\QWD[ WKDW EHFRPHV EURNHQ DQGVXEMHFWOHVV´0XVWXQGHUVWDQGKRZQRWWRVSHDNZRXOGFDUU\LWZLWK XV:LWKERQHVSXWLQULFHERZOVµ )RUFKpGHYHORSVDSRHWU\RIUXLQV WKDWVHHPVWRVWUXJJOHZLWKDQDUWLVWLFUHQGHULQJRI'HDWKLQ/LIHWKHWLWOHRI 5REHUW -D\ /LIWRQ·V VWXG\ RI +LURVKLPD VXUYLYRUV ,WV TXRWDWLRQ LQ WKH SRHP VXPV XS WKH SRHP·V HUDVXUHV SDUDGR[LFDOO\ LQ WKH DEVHQFH RI WKH SRHW·V YRLFH ´0XJDPXFKX ZLWKRXW VHOI ZLWKRXW FHQWHUµ :LWK D VHFRQG TXRWH SODFHG LQ WKH PLGGOH RI WKH SRHP DQ H[FHUSW WDNHQ IURP 3HWHU 6FKZHQJHU·VZRUNRIQXFOHDUFULWLFLVP/HWWHU%RPE1XFOHDU+RORFDXVWDQGWKH ([SORGLQJ:RUG´7HVWLPRQ\RI/LJKWµGHPRQVWUDWHVLQPLQLDWXUHWKHLQWHU WH[WXDOPHWKRGWKDWUXQVWKURXJKRXWWKHYROXPH7KURXJKERWKLQFRUSR UDWLQJDQGYLVXDOO\PDUNLQJWH[WVE\RWKHUVFDVWLQLWDOLFVWKURXJKRXWWKH ERRNWKHYROXPHWXUQVLWVSRO\SKRQ\RIYRLFHVLQWRWH[WXDOWUDFHVRIKLV WRULFDOWUDXPD·VDIWHUPDWK7KHVHLQWHUWH[WXDOWUDFHVKDXQW)RUFKp·VSRHWU\ LQDSDUDGR[LFDOFRPELQDWLRQRIVLOHQFHDQGH[SUHVVLRQWKHSRHW·VYRLFHLV VLOHQFHG ZKLOH YRLFHV DUH JLYHQ WR RWKHUV -XVW DV WKH IUDJPHQW WKH SKH QRPHQRQRILQWHUWH[WXDOLW\LVRIFRXUVHDOVRQRWQHZDQGLVLQIDFWDVWDQ GDUG IHDWXUH RI SRVWPRGHUQLVP +RZHYHU LQ )RUFKp·V SRVWDSRFDO\SWLF SRHWU\RIZLWQHVVRQHFDQGHWHFWDVHQVHRIXUJHQF\UDWKHUWKDQRISOD\



5HQp'LHWULFK

+HU TXRWDWLRQV LQ GLIIHUHQW ODQJXDJHV IURP LQWHUYLHZV GLDULHV FULWLFDO WH[WVRWKHUSRHWVDQGSKLORVRSKHUVGRQRWMXVWVLJQLI\DQGHQDFWWKHGLD ORJLFDOUHODWLRQVKLSVRIDOOWH[WVEXWDOVRSRSXODWHWKHWH[WZLWKWKHJKRVWO\ YRLFHVRIDGHYDVWDWHGSDVWPRUHIUDJPHQWVDQGOHIWRYHUVRIWKHFDWDVWUR SKLFKLVWRU\WKDWWKHDQJHOUHFRUGV5HDGLQJ)RUFKp·VSRHWU\WKURXJKWKH SHUVSHFWLYHRIWKHSRVWDSRFDO\SWLFUHWURVSHFWZKLFKPDNHVWKHIXWXUHRI WKHFDWDVWURSKLFDIWHUPDWKLWVSUHVHQWHYHU\TXRWHLVLQIXVHGZLWKVXFKD TXDOLW\RIWKHDIWHUPDWKDSSHDULQJDVDUHPQDQWRIVSHHFKDQGFLYLOLVDWLRQ QRZORVWDQGGHVWUR\HG )LQDOO\WKHJKRVWO\YRLFHVWKDWUXQWKURXJKWKHWH[WDOVRVWDQGLQIRU WKHYRLFHVRIWKRVHWKDWKDYHEHHQFRPSOHWHO\HUDVHGIURPWKHSRO\SKRQ\ KDYHEHHQXOWLPDWHO\VLOHQFHG´7KHSDJHLVDFKDUUHGILHOGZKHUHWKHGHDG ZRXOGKDYHZULWWHQµ´(OHJ\µ$+ $VDQ\RWKHUZLWQHVVWKHVSHDNHU LQ WKH SRVWDSRFDO\SWLF SRHWU\ RI ZLWQHVV ´DWWHPSW>V@ WR VSHDN IRU WKH GHDGµ%HUJHU UHODWLQJQRWRQO\WKHH[SHULHQFHRIWKHLUGHDWKEXWDOVR JLYLQJ D YRLFH WR WKRVH ZKR QR ORQJHU SRVVHVV RQH )XUWKHUPRUH WKH VSHDNHU HUDVHV QRW RQO\ WKH ERXQGDU\ EHWZHHQ SULPDU\ DQG VHFRQGDU\ ZLWQHVVLQJDV.DODLGMLDQKDVDUJXHGEXWDOVREHWZHHQWKHOLYLQJDQGWKH GHDG 3ODFLQJ RQHVHOI LQ WKH PRPHQW RI GHVWUXFWLRQ RI QXFOHDU JURXQG ]HUR ´7HVWLPRQ\ RI /LJKWµ EHFRPHV DOVR DQ DWWHPSW ´WR VSHDN DV WKH GHDGµ LELG  ´ZLWKRXW VHOI ZLWKRXW FHQWHUµ7KHUHFRUGLQJ RI WKH ¶DQJHO RIKLVWRU\·LVDUHFRUGLQJRIHUDVXUHVZLWKWKHVSHDNHUHUDVLQJKHUVHOIRU KLPVHOI IURPWKHSDJHE\JLYLQJYRLFHWRRWKHUVVSHDNLQJIURPWKHSODFH RI WKRVH HUDVHG 3DUDGR[LFDOO\ WKLV HUDVXUH ZKLFK )RUFKp·V SRHWU\ FRQ VWDQWO\GHSLFWVUHODWHVLQWKHODVWLQVWDQFHWRWKHWKUHDWRIWKHHUDVXUHIURP PHPRU\7KHVWUXJJOHZLWKDQDUWLVWLFUHQGHULQJRIHUDVXUHVDQGUHPDLQVLV WKH VWUXJJOH RI KHU SRHWU\ RI ZLWQHVV DJDLQVW VXFK SURFHVVHV RI PHPRU\ HUDVXUHV:ULWLQJLWVHOIWKHQWDNHVRQDVSHFLDOIRUPRIDJHQF\7KH´7HV WLPRQ\RIOLJKWµWHVWLILHVWRWKHIDFWWKDWWKHPRPHQWRIDEVROXWHGHVWUXF WLRQQHHGVWREHFDSWXUHGLQRUGHUQRWWREHHUDVHGLQWKHVDPHOLJKWRI H[WLQFWLRQ 7KH ZKLWH OLJKW RI HUDVXUH LV FRXQWHUHG E\ D ZULWLQJ WKDW LV ILJXUHGDVDQLQWUXGLQJEODFNQHVVVRWKDWWKHZKLWHQHVVRIWKHHPSW\SDJH RQZKLFKWKHGHDGZRXOGKDYHZULWWHQQHHGVWREHFKDUUHGE\KHURZQ ZULWLQJ 7KH ZKLWH IODVK RI H[WLQFWLRQ WKDW FKDUDFWHULVHV WKH YLVXDO ODQG VFDSHRI)RUFKp·VSRVWDSRFDO\SVHILQGVLWVUHIOHFWLRQLQWKHZKLWHQHVVRI WKH ¶LQQRFHQW· HPSW\ SDJH XQWLO VKH LQVFULEHV LQ LW WKH ´FRDO ERQHVµ RI UHPDLQV

6HHLQJD:RUOG8QPDGHDQG0DNLQJD:RUOG2XW RI5HPDLQV



:KDW5HPDLQV8Q 0DNLQJWKH'LVDSSHDULQJDQG(PHUJLQJ :RUOGVRI3RVW$SRFDO\SWLF3RHWU\ 6HSDUDWHG E\ QHDUO\ WKLUW\ \HDUV DQG GUDZLQJ RQ GLIIHUHQW SRHWLFDO WUDGL WLRQV0HUZLQ·VDQG)RUFKH·VSRHWU\DORQHGHPRQVWUDWHWKHGLYHUVLW\SRVW DSRFDO\SWLFH[SUHVVLRQKDVWDNHQLQ$PHULFDQSRHWU\LQWKHODVWILIW\\HDUV 7KHVHH[DPSOHVIXUWKHUPRUHWHVWLI\WRWKHHQGXUDQFHRISRVWDSRFDO\SWLF H[SUHVVLRQ LQ WKH ODWH WZHQWLHWK FHQWXU\ DQG FODULI\ WKDW DQ RFFXSDWLRQ ZLWKWKHZRUOG·VHQGLVE\QRPHDQVUHVWULFWHGWRWKHDSRFDO\SWLFGHFDGH RI WKH V DQG FRQWLQXHV WR ILQG UHSHUFXVVLRQV LQ D SRVW&ROG :DU ZRUOGZKRVHFXUUHQWDQ[LHWLHVJOREDOWHUURULVPJOREDOZDUPLQJ LQIRUPV LWV DIWHUWKHHQG VFHQDULRV $SRFDO\SWLFDOO\ FKDUJHG  EHFRPHV IRU 1DWLYH$PHULFDQSRHWDQGDFWLYLVW-R\+DUMRWKHGD\´:KHQWKH:RUOGDV :H.QHZ,W(QGHGµ ,QWKH3XOLW]HU3UL]HZLQQLQJ7KH5RDGIURP &RUPDF0F&DUWK\YHHUVIDUEH\RQGDQXOWLPDWHFDWDVWURSKHWRGH SLFW D ZRUOG EDUHO\ UHFRJQLVDEOH DV RXU RZQ EXW WKDW LV QHYHUWKHOHVV DQ VZHULQJWKHJUHDWHVWIHDUVRIDVRQHUHYLHZHUKDGLW´WKHJOREDOO\ZDUPHG JHQHUDWLRQµ0F&DUWK\EDFNFRYHU  7KHVHYDULRXVYLVLRQVDQGUHYLVLRQVRIWKHHQGWUDQVSRUWGLYHUVHYLVX DOLVDWLRQVRIWKHHQGRIIHULQJUHVSRQVHVWRWKHZD\VHHLQJWKHHQGLVUH ODWHG WR WKH HQG RI VHHLQJ :KHWKHU IDGLQJ DZD\ LQWR WKH REOLYLRQ RI GDUNQHVVDQGEOLQGQHVVRUIODVKLQJLQDZKLWHOLJKWRIH[WLQFWLRQDQGHUD VXUH DJDLQVW ZKLFK WKH ´FRDO ERQHVµ RI WHVWLPRQLDO ZULWLQJ FRPH LQWR UHOLHISRVWDSRFDO\SWLFYLVLRQUHJXODUO\GUDZVRQYLVXDOH[WUHPHVRIUHGXF WLRQLQGHSLFWLQJWKHHQG0HUZLQ·VGDUNQHVVDQG)RUFKp·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·VYRLFHWKH ILJXUDWLYH ODQJXDJH WKH HYRFDWLRQ RI D VHWWLQJ DQG D SDUWLFXODU PRPHQW SRHWU\ FUHDWHV WKH SUHVHQFH RI D ZRUOG LQ WKH PRPHQW RI UHDGLQJ 7KH UHVXOW RI SRHWLF ZRUOGPDNLQJ FDQ VROHO\ EH WKH JOLPSVH LQWR RQH FRQ VFLRXVQHVVDWRQHLQVWDQWWKHEULHIRYHUKHDULQJRIDYRLFHDVSHFLILFYLHZ RIRQHVLQJOHWKLQJ³DQGGXHWRWKLVFRQFHQWUDWLRQRQRQHDVSHFWLWPLJKW DSSHDUWREHOLPLWHGZHDN DQGLQHIIHFWXDO%XWDWWKHVDPHWLPHSRHWLF ZRUOGPDNLQJ ZRUNV FORVHO\ FRQQHFWHG WR WKH ZD\V³WKLQNLQJ KHDULQJ



5HQp'LHWULFK

VHHLQJ³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p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·VGHYDVWDWLRQ 3HUKDSVLQWKHZRUOG·VGHVWUXFWLRQLWZRXOGEHSRVVLEOHWRVHHDWODVWKRZLWZDV PDGH2FHDQVPRXQWDLQV7KHSRQGHURXVFRXQWHUVSHFWDFOHRIWKLQJVFHDVLQJWR EH7KHVZHHSLQJZDVWHK\GURSWLFDQGFROGO\VHFXODU7KHVLOHQFH

5HIHUHQFHV %HUJHU -DPHV $IWHU WKH (QG 5HSUHVHQWDWLRQV RI 3RVW$SRFDO\SVH 0LQQHDSROLV 8 RI 0LQQHVRWD3 %R\HU3DXO6:KHQ7LPH6KDOO%H1R0RUH3URSKHF\%HOLHILQ0RGHUQ$PHULFDQ&XOWXUH SULQWLQJ&DPEULGJH0$%HONQDS3UHVVRI+DUYDUG83 %UXQQHU(GZDUG&ROG:DU3RHWU\7KH6RFLDO7H[WLQWKH)LIWLHV3RHP8UEDQD8QLYHUVLW\ RI,OOLQRLV3UHVV &KDWWDULM6XEDUQR0HPRULHVRID/RVW:DU$PHULFDQ3RHWLF5HVSRQVHVWRWKH9LHWQDP:DU 2[IRUG&ODUHQGRQ3UHVV

6HHLQJD:RUOG8QPDGHDQG0DNLQJD:RUOG2XW RI5HPDLQV



&ROOLQV -RKQ -RVHSK %HUQDUG 0F*LQQ DQG 6WHSKHQ - 6WHLQ 7KH (QF\FORSHGLD RI $SRFDO\SWLFLVP1HZ