           5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
                3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

        (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
                    )LOH 1DPH DS




81,7('67$7(6&28572)$33($/6
                   )257+(6,;7+&,5&8,7
                     BBBBBBBBBBBBBBBBB


 /28,6 7 %$8(5                 ;
           3ODLQWLII$SSHOODQW   
                                  
                                    1R
           Y                     
                                   !
                                  
 %(77< ' 0217*20(5<             
         'HIHQGDQW$SSHOOHH 
                                 1
      $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
      IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW7ROHGR
     1Rn'DYLG$.DW]'LVWULFWsXGJH
                  $UJXHG6HSWHPEHU
               'HFLGHGDQG)LOHGsXQH
  %HIRUH%$7&+(/'(5DQG*,/0$1&LUFXLWsXGJHV
               +22''LVWULFWsXGJH
                       BBBBBBBBBBBBBBBBB
                             &2816(/
$5*8('  : 'DYLG $UQROG 1$7+$1 	 52%(576
7ROHGR2KLRIRU$SSHOODQWsDFN:'HFNHU2)),&(2)
7+( $77251(< *(1(5$/ (03/2<0(17 /$:

    
     7KH +RQRUDEOH 'HQLVH 3DJH +RRG 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU
WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ



                                    
     %DXHUY0RQWJRPHU\                          1R

6(&7,21&ROXPEXV2KLRIRU$SSHOOHH21%5,():
'DYLG$UQROG1$7+$1	52%(5767ROHGR2KLRIRU
$SSHOODQWsDFN:'HFNHU2)),&(2)7+($77251(<
*(1(5$/(03/2<0(17/$:6(&7,21&ROXPEXV
2KLRIRU$SSHOOHH
  +22''sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK
*,/0$1 s MRLQHG  %$7&+(/'(5 s SS 
GHOLYHUHGDVHSDUDWHGLVVHQWLQJRSLQLRQ
                    BBBBBBBBBBBBBBBBB
                        23,1,21
                    BBBBBBBBBBBBBBBBB
  '(1,6(3$*(+22''LVWULFWsXGJH2Q0D\
/RXLV 7 %DXHU ILOHG WKH LQVWDQW VXLW DJDLQVW %HWW\ '
0RQWJRPHU\WKH2KLR$WWRUQH\*HQHUDOFODLPLQJWKDW
0RQWJRPHU\YLRODWHG%DXHUjVULJKWWRIUHHGRPRIVSHHFKDQG
DVVRFLDWLRQXQGHUWKH)LUVWDQG)RXUWHHQWK$PHQGPHQWVWRWKH
8QLWHG6WDWHV&RQVWLWXWLRQDVVHFXUHGE\86&
WKDW0RQWJRPHU\YLRODWHG3ODLQWLIIjVOLEHUW\LQWHUHVWDULVLQJ
XQGHU WKH )RXUWHHQWK $PHQGPHQW RI WKH 8QLWHG 6WDWHV
VHFXUHG E\  86&   DQG  WKDW 0RQWJRPHU\
YLRODWHG%DXHUjVULJKWWRIUHHGRPRIVSHHFKDQGDVVRFLDWLRQ
XQGHU$UWLFOHDQGRIWKH2KLR&RQVWLWXWLRQ
   ,Q  /RXLV 7 %DXHU ZDV DQ H[HFXWLYH DVVLVWDQW WR
8QLWHG6WDWHV6HQDWRUsRKQ*OHQQD'HPRFUDWLQFKDUJHRI
WKH6HQDWRUjV7ROHGR2IILFH6HQDWRU*OHQQFORVHGKLV7ROHGR
2IILFHLQsDQXDU\DQG%DXHUORVWKLVMRE6HQDWRU*OHQQ
PDGH LQTXLULHV RQ %DXHUjV EHKDOI DQG %DXHU ZDV ODWHU
FRQWDFWHG E\ .HYLQ .HUQV &KLHI RI WKH &ULPH 9LFWLPV
6HFWLRQRIWKH$WWRUQH\*HQHUDOjV2IILFH%DXHUZDVKLUHGDV
DILHOGLQYHVWLJDWRU)URP$SULOWRsXQH
/RXLV 7 %DXHU ZDV HPSOR\HG DV D &ULPH 9LFWLPV &ODLP
,QYHVWLJDWRUIRUWKH6WDWHRI2KLRjV$WWRUQH\*HQHUDOjV2IILFH
%DXHU LV D UHJLVWHUHG 'HPRFUDW  )URP  WR  D
'HPRFUDWKHOGWKHSRVLWLRQRI$WWRUQH\*HQHUDOLQ2KLR,Q
1RYHPEHU  %HWW\ ' 0RQWJRPHU\ ZDV HOHFWHG DV WKH
$WWRUQH\ *HQHUDO  6KH LV D 5HSXEOLFDQ  0RQWJRPHU\
1R                          %DXHUY0RQWJRPHU\            

UHSODFHG%DXHUZLWKsHUU\(YHUVPDQ(YHUVPDQKDGVHUYHG
DVDsXYHQLOH3UREDWLRQ2IILFHUIRUILYHDQGRQHKDOI\HDUV
LPPHGLDWHO\EHIRUHEHFRPLQJDILHOGLQYHVWLJDWRU(YHUVPDQ
LVDOVRWKH&KLHIRI3ROLFHIRUWKH9LOODJHRI+DVNLQV2KLR
  $WDFDVHPDQDJHPHQWFRQIHUHQFHRQ2FWREHUWKH
GLVWULFW FRXUW ELIXUFDWHG SUHWULDO EULHILQJ RQ WKH LVVXHV RI
TXDOLILHGLPPXQLW\DQGWKHPHULWVRI%DXHUjVFODLPV  7KH
RQO\LVVXHEHIRUHWKHGLVWULFWFRXUWZDV0RQWJRPHU\jVPRWLRQ
IRUVXPPDU\MXGJPHQWEDVHGRQTXDOLILHGLPPXQLW\2QsXO\
  WKH GLVWULFW FRXUW LVVXHG DQ RSLQLRQ DQG RUGHU
JUDQWLQJ0RQWJRPHU\jVPRWLRQIRUVXPPDU\MXGJPHQWDQG
GLVPLVVLQJ WKH &RPSODLQW ZLWKRXW UHDFKLQJ WKH TXDOLILHG
LPPXQLW\LVVXH7KHGLVWULFWFRXUWLQVWHDGIRXQGWKDW%DXHU
IDLOHG WR VWDWH D FODLP XQGHU 6HFWLRQ  DQG WKDW %DXHU
IDLOHGWRDOOHJHWKHYLRODWLRQRIDIHGHUDOULJKW
   2Q DSSHDO %DXHU FODLPV WKDW WKH GLVWULFW FRXUW HUUHG LQ
JUDQWLQJVXPPDU\MXGJPHQWWR0RQWJRPHU\EHFDXVHWKHUHLV
D JHQXLQH LVVXH RI PDWHULDO IDFW DV WR ZKHWKHU WKHUH ZDV D
FKDQJH LQ WKH LQKHUHQW GXWLHV RI WKH SRVLWLRQ IURP ZKLFK
%DXHUZDVWHUPLQDWHG0RQWJRPHU\FODLPVWKDWEHFDXVHVKH
KDV PRGLILHG WKH SRVLWLRQ VR WKDW SROLWLFDO DIILOLDWLRQ LV DQ
DSSURSULDWHFRQVLGHUDWLRQWKHGLVWULFWFRXUWSURSHUO\JUDQWHG
VXPPDU\ MXGJPHQW  )RU WKH UHDVRQV VHW IRUWK EHORZ WKH
GLVWULFWFRXUWjVRUGHUDQGMXGJPHQWLV5(9(56('
                      ,s85,6',&7,21
  sXULVGLFWLRQLVSURSHUXQGHU86&EHFDXVHWKH
&RPSODLQWDOOHJHVDFODLPXQGHU86&$SSHOODWH
MXULVGLFWLRQLVDSSURSULDWHXQGHU86&EHFDXVH
%DXHUDSSHDOVIURPDILQDOMXGJPHQWHQWHUHGE\WKHGLVWULFW
FRXUW%DXHUWLPHO\ILOHGDQRWLFHRIDSSHDO
     %DXHUY0RQWJRPHU\                            1R       1R                        %DXHUY0RQWJRPHU\        

                        ,,$1$/<6,6                                  HQKDQFHGFDSDFLW\ZLWKUHVSHFWWR0RQWJRPHU\7KXVZKLOH
                                                                       WKHVHZLWQHVVHVjOLPLWHGWHVWLPRQ\LVSHUKDSVLQVWUXFWLYHRQ
$ 6WDQGDUGRI5HYLHZ                                                  WKHLVVXHRIWKHVFRSHRI0U(YHUVPDQjVFXUUHQWGXWLHVLWLV
                                                                       QRW FRQFOXVLYH  0RUHRYHU EHFDXVH WKHLU WHVWLPRQ\ LV
  %DXHU FODLPV WKDW WKH GLVWULFW FRXUW HUUHG LQ HQWHULQJ       UHFRQFLODEOH ZLWK WKH WHVWLPRQ\ RI 0RQWJRPHU\ DQG
VXPPDU\ MXGJPHQW LQ IDYRU RI 0RQWJRPHU\  $ GLVWULFW           (YHUVPDQ LW GRHV QRW FUHDWH D JHQXLQH GLVSXWHG LVVXH RI
FRXUWjVJUDQWRIVXPPDU\MXGJPHQWLVVXEMHFWWRDGHQRYR              PDWHULDOIDFW
UHYLHZE\WKHDSSHOODWHFRXUW((2&Y8QLYHUVLW\RI'HWURLW
 )G   WK &LU  (DWRQ Y 0RQWJRPHU\          )LQDOO\EHFDXVH,DJUHHZLWKWKHGLVWULFWFRXUWjVFRQFOXVLRQ
&RXQW\)GWK&LU                                  WKDW0U%DXHUjVGXHSURFHVVFODLPZDVGHSHQGHQWXSRQKLV
                                                                       )LUVW $PHQGPHQW FODLP , ZRXOG DOVR DIILUP WKH GLVWULFW
   5XOH F SURYLGHV WKDW VXPPDU\ MXGJPHQW VKRXOG EH          FRXUWjV GLVPLVVDO RI &RXQW ,, RI 0U %DXHUjV FRPSODLQW
HQWHUHGRQO\ZKHUHWKHSOHDGLQJVGHSRVLWLRQVDQVZHUVWRWKH         7KHUHIRUH IRU WKH UHDVRQV GHVFULEHG DERYH , UHVSHFWIXOO\
LQWHUURJDWRULHV DQG DGPLVVLRQV RQ ILOH WRJHWKHU ZLWK           GLVVHQWIURPWKHPDMRULW\jVRSLQLRQ
DIILGDYLWVLIDQ\VKRZWKDWWKHUHLVQRJHQXLQHLVVXHDVWRDQ\
PDWHULDO IDFW DQG WKDW WKH PRYLQJ SDUW\ LV HQWLWOHG WR D
MXGJPHQW DV D PDWWHU RI ODZ  )HG5&LY3 F  7KH
SUHVHQFH RI IDFWXDO GLVSXWHV ZLOO SUHFOXGH JUDQWLQJ RI
VXPPDU\ MXGJPHQW RQO\ LI WKH GLVSXWHV DUH JHQXLQH DQG
FRQFHUQPDWHULDOIDFWV$QGHUVRQY/LEHUW\/REE\,QF
86     $ GLVSXWH DERXW D PDWHULDO IDFW LV
JHQXLQHRQO\LIWKHHYLGHQFHLVVXFKWKDWDUHDVRQDEOHMXU\
FRXOG UHWXUQ D YHUGLFW IRU WKH QRQPRYLQJ SDUW\  ,G
$OWKRXJKWKH&RXUWPXVWYLHZWKHPRWLRQLQWKHOLJKWPRVW
IDYRUDEOHWRWKHQRQPRYLQJSDUW\ZKHUHWKHPRYLQJSDUW\
KDVFDUULHGLWVEXUGHQXQGHU5XOHFLWVRSSRQHQWPXVWGR
PRUHWKDQVLPSO\VKRZWKDWWKHUHLVVRPHPHWDSK\VLFDOGRXEW
DVWRWKHPDWHULDOIDFWV0DWVXVKLWD(OHFWULF,QGXVWULDO&R
Y =HQLWK 5DGLR &RUS  86    &HORWH[
&RUS Y &DWUHWW  86     6XPPDU\
MXGJPHQWPXVWEHHQWHUHGDJDLQVWDSDUW\ZKRIDLOVWRPDNHD
VKRZLQJVXIILFLHQWWRHVWDEOLVKWKHH[LVWHQFHRIDQHOHPHQW
HVVHQWLDOWRWKDWSDUW\
VFDVHDQGRQZKLFKWKDWSDUW\ZLOOEHDU
WKHEXUGHQRISURRIDWWULDO,QVXFKDVLWXDWLRQWKHUHFDQEH
QRJHQXLQHLVVXHDVWRDQ\PDWHULDOIDFWVLQFHDFRPSOHWH
IDLOXUH RI SURRI FRQFHUQLQJ DQ HVVHQWLDO HOHPHQW RI WKH
QRQPRYLQJ SDUW\
V FDVH QHFHVVDULO\ UHQGHUV DOO RWKHU IDFWV
LPPDWHULDO&HORWH[&RUS86DW$FRXUWPXVW
ORRN WR WKH VXEVWDQWLYH ODZ WR LGHQWLI\ ZKLFK IDFWV DUH
PDWHULDO$QGHUVRQ86DW
    %DXHUY0RQWJRPHU\                             1R       1R                          %DXHUY0RQWJRPHU\           

ZKHWKHU WKH MRE GXWLHV RI VXFK D SRVLWLRQ DUH SROLWLFDO ZH   % 3ROLWLFDO3DWURQDJH'LVPLVVDOV
PXVWDQDO\]HWKHSRVLWLRQLQOLJKWRIWKHMREGHVFULSWLRQDVWKH
MRELVHQYLVLRQHGE\WKHQHZDSSRLQWLQJDXWKRULW\6HH6PLWK             7KH6XSUHPH&RXUWLQDWULORJ\RIFDVHVKDVGHWHUPLQHG
Y6XVKND)GWK&LUm7KHWZRWHVWV            WKDW ZLWK OLPLWHG H[FHSWLRQV WKH *RYHUQPHQW FDQQRW
RXWOLQHGLQ)DXJKHQGHUµWKHMREDVDFWXDOO\SHUIRUPHGjDQG             FRQGLWLRQ SXEOLF HPSOR\PHQW RQ WKH EDVLV RI SROLWLFDO
µWKH MRE DV HQYLVLRQHGj DUH QRW FRPSOHWHO\ VHSDUDWH DQG        DIILOLDWLRQ(OURGY%XUQV86%UDQWLY
LQGHSHQGHQW5DWKHULIRQHRUWKHRWKHUWHVWLVFOHDUO\DQG           )LQNHO86DQG5XWDQY5HSXEOLFDQ3DUW\
GLUHFWO\DSSOLFDEOHWKHRWKHULVQRWLQGHSHQGHQWO\QHFHVVDU\          RI,OOLQRLV86
DOWKRXJKLWPD\EHVRPHZKDWLQIRUPDWLYHlFLWLQJ0F&ORXG
Y7HVWD)GWK&LU                             ,Q (OURG WKH 6XSUHPH &RXUW KHOG WKDW mWKH SUDFWLFH RI
                                                                        SDWURQDJH GLVPLVVDOV FOHDUO\ LQIULQJHV )LUVW $PHQGPHQW
  7KH7ROHGR&9&,SRVLWLRQLVDQmXQFODVVLILHGlSRVLWLRQ               LQWHUHVWVl86DW7KH6XSUHPH&RXUWQRWHGWKDW
+RZHYHUFRQWUDU\WRRXULQVWUXFWLRQLQ0F&ORXGWKHPDMRULW\           H[FHSWLRQVH[LVWXQGHUDSSURSULDWHFLUFXPVWDQFHV3DWURQDJH
WDNHVDQDUURZYLHZRIWKHHYLGHQFHDQGFRQFOXGHVWKDW0U              GLVPLVVDOVDUHSHUPLWWHGZKHQWKHSRVLWLRQVLQYROYHSROLF\
(YHUVPDQjVGXWLHVDUHQRQSROLWLFDO$VWKHPDMRULW\RSLQLRQ           PDNLQJ UROHV  ,G DW   ,Q GHWHUPLQLQJ ZKHWKHU DQ
DFNQRZOHGJHV $WWRUQH\ *HQHUDO 0RQWJRPHU\ DUJXHV WKDW              HPSOR\HHRFFXSLHVDSROLF\PDNLQJSRVLWLRQWKHIRFXVVKRXOG
(YHUVPDQLVKHUmH\HVDQGHDUVlLQWKHFRPPXQLW\DQGKHU                EH ZKHWKHU WKH HPSOR\HH DFWV DV DQ DGYLVRU RU IRUPXODWHV
mDOWHUHJRlDWWKHUHJLRQDOOHYHO0RQWJRPHU\jVYLVLRQRIWKH          SODQV IRU WKH LPSOHPHQWDWLRQ RI EURDG JRDOV  ,G  7KH
UROHRIWKH7ROHGR&9&,LVREYLRXVO\SROLWLFDO2YHUDOOWKH          6XSUHPH&RXUWLQ%UDQWLUHDIILUPHGWKH(OURGKROGLQJWKDWDQ
GXWLHV RI WKH 7ROHGR &9&,  ERWK DV HQYLVLRQHG E\             LQGLYLGXDOHPSOR\HHjV)LUVW$PHQGPHQWULJKWVPXVW\LHOGWR
0RQWJRPHU\DQGDVDFWXDOO\LPSOHPHQWHGE\(YHUVPDQDQG                  WKH*RYHUQPHQWjVLQWHUHVWRQO\ZKHQWKHHPSOR\HHjVSROLWLFDO
0RQWJRPHU\  HVWDEOLVK WKDW WKH 7ROHGR &9&, SRVLWLRQ            DIILOLDWLRQ mZRXOG LQWHUIHUH ZLWK WKH GLVFKDUJH RI SXEOLF
LQYROYHVWKHFRPPXQLFDWLRQRIFRQILGHQWLDOLQIRUPDWLRQWR               GXWLHVl%UDQWL86DW$SXEOLFHPSOR\HUPXVW
RQHZLWKSROLF\PDNLQJDXWKRULW\7KXV,ZRXOGILQGWKDWWKH           GHPRQVWUDWHWKDWDFHUWDLQSROLWLFDODIILOLDWLRQLVmHVVHQWLDOWR
7ROHGR&9&,SRVLWLRQLVVXIILFLHQWO\SROLWLFDOWRIDOOZLWKLQ           WKHGLVFKDUJHRIWKHHPSOR\HHjVJRYHUQPHQWUHVSRQVLELOLWLHVl
&DWHJRU\7KUHHDQGLVWKXVDQH[FHSWLRQWRWKHUXOHODLGRXWLQ         ,GDW,Q5XWDQWKH6XSUHPH&RXUWQDUURZHGWKHUDQJH
%UDQWL                                                                 RIMREVOHJLWLPDWHO\VXEMHFWWRSDWURQDJHUHPRYDOZKHQLWKHOG
                                                                        WKDWD*RYHUQPHQWjVLQWHUHVWLQVHFXULQJHPSOR\HHVZKRZLOO
  7KHPDMRULW\RSLQLRQUHOLHVXSRQWKHWHVWLPRQ\RIsHII)U\H           EH OR\DO LQ WKH LPSOHPHQWDWLRQ RI LWV SROLFLHV FDQ EH
DQG %LOO 'LQDQ %DXHUjV GLUHFW VXSHUYLVRU DQG (YHUVPDQjV         DGHTXDWHO\VHUYHGE\FKRRVLQJRUGLVPLVVLQJRQO\mKLJKOHYHO
FXUUHQW VXSHUYLVRU UHVSHFWLYHO\ DV WKH EDVLV IRU ILQGLQJ D    HPSOR\HHVlRQWKHEDVLVRISROLWLFDOYLHZV5XWDQ86
GLVSXWHGLVVXHRIPDWHULDOIDFWWKDWZRXOGSUHFOXGHVXPPDU\             DW
MXGJPHQW+RZHYHUWKHWHVWLPRQ\RI)U\HDQG'LQDQIRFXVHV
JHQHUDOO\RQWKHUROHRIWKH&9&,VWDWHZLGHDVRSSRVHGWRWKH            7KHGLVWULFWFRXUWIRXQGWKDWWKH%UDQWLH[FHSWLRQDSSOLHGWR
VSHFLILFIXQFWLRQRIWKH&9&,LQWKH7ROGHRDUHD0RUHRYHU            WKHLQVWDQWFDVH$SSO\LQJWKH%UDQWLH[FHSWLRQWRDJLYHQ
WKH\WHVWLILHGZLWKUHJDUGWRWKHUHVSRQVLELOLWLHVLQKHUHQWLQ          HPSOR\PHQWSRVLWLRQWKHGLVWULFWFRXUWPXVWH[DPLQHERWKWKH
(YHUVPDQjVSRVLWLRQDVLWUHODWHVWR)U\HDQG'LQDQRQO\DQG           LQKHUHQW GXWLHV RI WKH SRVLWLRQ DQG WKH GXWLHV WKDW WKH QHZ
QRW ZLWK UHJDUG WR KLV GXWLHV UHODWLQJ WR $WWRUQH\ *HQHUDO     KROGHURIWKHSRVLWLRQZLOOSHUIRUP)DXJKHQGHUY&LW\RI
0RQWJRPHU\7KHUHLVQRHYLGHQFHWKDWHLWKHU)U\HRU'LQDQ             1RUWK2OPVWHG)GWK&LU:KHQ
ZRXOG KDYH DQ\ NQRZOHGJH RU DZDUHQHVV RI (YHUVPDQjV              ORRNLQJ DW WKH QDWXUH RI WKH SRVLWLRQ DQG WKH GXWLHV WR EH
      %DXHUY0RQWJRPHU\                            1R    1R                          %DXHUY0RQWJRPHU\          

SHUIRUPHGWKHFRXUWPXVWORRNDWWKHSRVLWLRQDVHQYLVLRQHG                               BBBBBBBBBBBBBBBBB
E\WKHQHZO\HOHFWHGRIILFLDODQGDVSHUIRUPHGE\WKH QHZ
HPSOR\HH UDWKHU WKDQ WKH WDVNV WKDW KDG SUHYLRXVO\ EHHQ                               ',66(17
SHUIRUPHG E\ WKH SODLQWLII EHFDXVH WKH RIILFLDO PXVW EH                           BBBBBBBBBBBBBBBBB
SHUPLWWHGWRUHRUJDQL]HWKHVWDII,GDW7KH6L[WK
&LUFXLW KDV LGHQWLILHG IRXU FDWHJRULHV RI SRVLWLRQV ZKLFK       $/,&(0%$7&+(/'(5&LUFXLWsXGJHGLVVHQWLQJ,
SUHVXPSWLYHO\IDOOLQWRWKH%UDQWLH[FHSWLRQ                        ZULWHVHSDUDWHO\EHFDXVH,EHOLHYHWKDWWKHSRVLWLRQRI&ULPH
                                                                     9LFWLPV&ODLPV,QYHVWLJDWRUm&9&,lLQ7ROHGRLVRQHWKDW
      &DWHJRU\2QHSRVLWLRQVVSHFLILFDOO\QDPHGLQUHOHYDQW        IDOOV ZLWKLQ WKH %UDQWL H[FHSWLRQ DQG EHFDXVH , EHOLHYH
    IHGHUDO VWDWH FRXQW\ RU PXQLFLSDO ODZ WR ZKLFK          0U%DXHUKDVSUHVHQWHGQRJHQXLQHLVVXHVRIPDWHULDOIDFW
    GLVFUHWLRQDU\DXWKRULW\ZLWKUHVSHFWWRWKHHQIRUFHPHQWRI       WKDWZRXOGSUHFOXGHVXPPDU\MXGJPHQWLQWKLVFDVH,ZRXOG
    WKDW ODZ RU WKH FDUU\LQJ RXW RI VRPH RWKHU SROLF\ RI   WKHUHIRUHDIILUPWKHGLVWULFWFRXUWjVRSLQLRQ
    SROLWLFDOFRQFHUQLVJUDQWHG
                                                                       $VWKHPDMRULW\RSLQLRQULJKWO\VHWVIRUWKWKLV&LUFXLWKDV
      &DWHJRU\7ZRSRVLWLRQVWRZKLFKDVLJQLILFDQWSRUWLRQ        LGHQWLILHGIRXUFDWHJRULHVRISRVLWLRQVZKLFKSUHVXPSWLYHO\
    RIWKHWRWDOGLVFUHWLRQDU\DXWKRULW\DYDLODEOHWRFDWHJRU\       IDOOLQWRWKH%UDQWLH[FHSWLRQ6HH0F&ORXGY7HVWD)G
    RQHSRVLWLRQKROGHUVKDVEHHQGHOHJDWHGRUSRVLWLRQVQRW        WK&LU7KHGLVWULFWFRXUWIRXQGWKDWWKH
    QDPHGLQODZSRVVHVVLQJE\YLUWXHRIWKHMXULVGLFWLRQjV         7ROHGR&9&,SRVLWLRQILWLQWR&DWHJRU\7KUHHDQG,DJUHH
    SDWWHUQ RU SUDFWLFH WKH VDPH TXDQWXP RU W\SH RI          ZLWKWKLVFRQFOXVLRQIRUWKHIROORZLQJUHDVRQV
    GLVFUHWLRQDU\DXWKRULW\FRPPRQO\KHOGE\FDWHJRU\RQH
    SRVLWLRQVLQRWKHUMXULVGLFWLRQV                                  $FFRUGLQJWR(YHUVPDQKHSURYLGHVLQIRUPDWLRQWRSROLFH
                                                                     FKLHIVUHJDUGLQJVHUYLFHVFRQIHUHQFHVDQGWUDLQLQJRIIHUHGE\
      &DWHJRU\ 7KUHH  FRQILGHQWLDO DGYLVRUV ZKR VSHQG D      WKH $WWRUQH\ *HQHUDOjV RIILFH KH UHFHLYHV IHHGEDFN RQ
    VLJQLILFDQW SRUWLRQ RI WKHLU WLPH RQ WKH MRE DGYLVLQJ    $WWRUQH\ *HQHUDO SURJUDPV KH QHWZRUNV WR mHQKDQFH WKH
    FDWHJRU\RQHRUFDWHJRU\WZRSRVLWLRQKROGHUVRQKRZWR          OHYHORIWUXVWFRRSHUDWLRQDQGFRPPXQLFDWLRQEHWZHHQORFDO
    H[HUFLVH WKHLU VWDWXWRU\ RU GHOHJDWHG SROLF\PDNLQJ          ODZHQIRUFHPHQWlDQGWKH$WWRUQH\*HQHUDOjVRIILFHDQGKH
    DXWKRULW\RURWKHUFRQILGHQWLDOHPSOR\HHVZKRFRQWURO           VSHDNVDWWKHORFDOXQLYHUVLW\DQGKLJKVFKRRO7KHVHGXWLHV
    WKHOLQHVRIFRPPXQLFDWLRQVWRFDWHJRU\RQHSRVLWLRQV           GHPRQVWUDWHKLVSROLWLFDOUROHDVDQDGYLVRUDQGUHSUHVHQWDWLYH
    FDWHJRU\WZRSRVLWLRQVRUFRQILGHQWLDODGYLVRUV                 RIWKH$WWRUQH\*HQHUDOWRWKHODZHQIRUFHPHQWFRPPXQLW\LQ
                                                                     WKH7ROHGRDUHD
      &DWHJRU\)RXUSRVLWLRQVWKDWDUHSDUWRIDJURXSRI
    SRVLWLRQV ILOOHG E\ EDODQFLQJ RXW SROLWLFDO SDUW\             :HKDYHKHOGWKDWWKH%UDQWLH[FHSWLRQmLVWREHFRQVWUXHG
    UHSUHVHQWDWLRQ RU WKDW DUH ILOOHG E\ EDODQFLQJ RXW       EURDGO\VRDVSUHVXPSWLYHO\WRHQFRPSDVVSRVLWLRQVSODFHG
    VHOHFWLRQV PDGH E\ GLIIHUHQW JRYHUQPHQWDO DJHQWV RU        E\ WKH OHJLVODWXUH RXWVLGH RI WKH µPHULWj FLYLO VHUYLFHl
    ERGLHV                                                          0F&ORXG)GDW$FFRUGLQJO\HYHQmLIWKHUHLVDQ\
                                                                     DPELJXLW\DERXWZKHWKHUDSDUWLFXODUSRVLWLRQIDOOVLQWRDQ\RI
0F&ORXGY7HVWD)GWK&LU                WKH>WKHFDWHJRULHV@DQGVRDOVRZLWKLQWKH%UDQWLH[FHSWLRQ
                                                                     LWLVWREHFRQVWUXHGLQIDYRURIWKHJRYHUQPHQWDOGHIHQGDQWV
  7KHGLVWULFWFRXUWEHORZIRXQGWKDWWKHILHOGLQYHVWLJDWRU         ZKHQWKHSRVLWLRQDWLVVXHLVXQFODVVLILHGRUQRQPHULWXQGHU
SRVLWLRQILWLQWR&DWHJRU\7KUHH7KHGLVWULFWFRXUWUHOLHGRQ      VWDWH ODZ   l  ,G DW   )XUWKHU ZKHQ FRQVLGHULQJ
0RQWJRPHU\jVYLVLRQRIWKHILHOGLQYHVWLJDWRUjVSRVLWLRQDV
   %DXHUY0RQWJRPHU\                  1R    1R                        %DXHUY0RQWJRPHU\          

5(0$1'('IRUIXUWKHUSURFHHGLQJVQRWLQFRQVLVWHQWZLWK   SHUIRUPHGE\(YHUVPDQ7KHSRVLWLRQZDVWRLQFOXGHDPRUH
WKLVRSLQLRQ                                            DFWLYH UROH LQ VXSSRUWLQJ FULPLQDO ODZ HQIRUFHPHQW E\
                                                         SURYLGLQJPRUHH[WHQVLYHVHUYLFHVWRORFDOODZHQIRUFHPHQW
                                                         DJHQFLHV  7KH GLVWULFW FRXUW IRXQG WKDW (YHUVPDQ DWWHQGV
                                                         PRUH PRQWKO\ PHHWLQJV RI WKH UHJLRQDO FRQVRUWLXP RI
                                                         QRUWKZHVWHUQ2KLRSROLFHDJHQFLHVDFWVDVDOLDLVRQEHWZHHQ
                                                         ORFDO SROLFH DJHQFLHV DQG WKH $WWRUQH\ *HQHUDOjV RIILFH
                                                         GLVWULEXWHVLQIRUPDWLRQWRYLFWLPZLWQHVVSURJUDPVOHFWXUHV
                                                         WR ORFDO KLJK VFKRRO DQG XQLYHUVLW\ FODVVHV DQG JDWKHUV
                                                         IHHGEDFN IRU LPSURYLQJ WKH FULPH YLFWLPVj SURJUDP  7KH
                                                         GLVWULFW FRXUW UHOLHG RQ 0RQWJRPHU\jV DUJXPHQWV WKDW
                                                         (YHUVPDQ LV GLUHFWO\ LQYROYHG LQ WKH LPSOHPHQWDWLRQ RI
                                                         SROLFLHV WKDW ZHUH SDUW RI KHU FDPSDLJQ SODWIRUP DQG WKDW
                                                         SROLWLFDO OR\DOW\ IURP WKH LQGLYLGXDO LPSOHPHQWLQJ WKRVH
                                                         SROLFLHVLVQHFHVVDU\WRHIIHFWXDWHWKRVHSROLFHV0RQWJRPHU\
                                                         DOVR DUJXHV WKDW (YHUVPDQ LV KHU mH\HV DQG HDUVl LQ WKH
                                                         FRPPXQLW\ FROOHFWLQJ IHHGEDFN IURP WKH FRPPXQLW\ DQG
                                                         H[FKDQJLQJLQIRUPDWLRQDQGSURPRWLQJDZDUHQHVVRIFULPH
                                                         YLFWLPVjLVVXHV0RQWJRPHU\FODLPVWKDW(YHUVPDQDFWVDV
                                                         KHU mDOWHU HJRl DW WKH UHJLRQDO OHYHO EHFDXVH KH SURYLGHV
                                                         LQIRUPDWLRQWRWKHSXEOLFDERXWWKH$WWRUQH\*HQHUDOjVFULPH
                                                         YLFWLPVj SURJUDP  0RQWJRPHU\ DVVHUWV WKDW HYHQ LI WKH
                                                         LQKHUHQW JHQHUDO GXWLHV RI (YHUVPDQjV SRVLWLRQ DUH QRW
                                                         SROLWLFDO(YHUVPDQjVMREWDVNVDVHQYLVLRQHGE\0RQWJRPHU\
                                                         DUHSROLWLFDO
                                                           7KHUHLVQRGLVSXWHWKDWWKHmLQKHUHQWGXWLHVlRIWKHILHOG
                                                         LQYHVWLJDWRUSRVLWLRQDUHQRQSROLWLFDO6RPHRIWKH GXWLHV
                                                         LQFOXGHG LQ WKH SRVLWLRQ GHVFULSWLRQ DUH WR SHUIRUP
                                                         EDFNJURXQG LQYHVWLJDWLRQV RI UHSDUDWLRQV DSSOLFDWLRQV RI
                                                         FULPLQDOO\ LQMXULRXV FRQGXFW WR FRUUHVSRQG ZLWK ODZ
                                                         HQIRUFHPHQWRIILFLDOVLQWHUYLHZFODLPDQWVPDLQWDLQUHFRUGV
                                                         RILQYHVWLJDWLRQVDQGILOHWLPHO\UHSRUWV,QWKLVUHJDUG%DXHU
                                                         KDVPHWWKHILUVWSURQJRIWKH)DXJKHQGHUWHVW
                                                           $VWRWKHVHFRQGSURQJnWKHGXWLHVRIWKHQHZKROGHURIWKH
                                                         SRVLWLRQnWKH GLVWULFW FRXUW HUUHG LQ IDLOLQJ WR ILQG WKDW
                                                         JHQXLQHLVVXHVRIPDWHULDOIDFWH[LVWHGUHJDUGLQJWKHGXWLHV
                                                         DFWXDOO\ SHUIRUPHG E\ (YHUVPDQ  $OWKRXJK 0RQWJRPHU\
                                                         WHVWLILHGWRKHUmYLVLRQlRIZKDWWKHSRVLWLRQVKRXOGHQWDLO
     %DXHUY0RQWJRPHU\                              1R       1R                          %DXHUY0RQWJRPHU\           

WKHUH LV WHVWLPRQ\ IURP RIILFLDOV  LQWLPDWHO\ IDPLOLDU ZLWK      & /LEHUW\,QWHUHVW
(YHUVPDQjVZRUNWKDWKLVMREIXQFWLRQVDUHQRGLIIHUHQWWKDQ
WKRVHSHUIRUPHGE\%DXHUsHII)U\HWKHVWDWHZLGHVXSHUYLVRU              &RXQW ,, RI %DXHUjV &RPSODLQW DOOHJHV WKDW KLV OLEHUW\
RI WKH ILHOG LQYHVWLJDWRUV DQG %LOO 'LQDQ %DXHUjV GLUHFW       LQWHUHVWKDVEHHQYLRODWHG7KHUHLVQRGLVSXWHWKDW3ODLQWLII
VXSHUYLVRUDQG(YHUVPDQjVFXUUHQWVXSHUYLVRUWHVWLILHGWKDW             KDVQRVWDWXWRULO\FUHDWHGLQWHUHVWLQFRQWLQXHGHPSOR\PHQWDV
WKHUHKDVEHHQQRFKDQJHLQWKHMREGHVFULSWLRQMREGXWLHVRU           DQ XQFODVVLILHG FLYLO VHUYDQW  9RGLOD Y &OHYHODQG 
UHTXLUHPHQWVMRESURFHGXUHVMREIXQFWLRQVVRXUFHRIVDODU\            )6XSS1'2KLR+RZHYHU%DXHUFODLPV
DQGSHUVRQQHOSRVLWLRQFRQWUROQXPEHUIRUWKHSRVLWLRQ7KHUH           WKDWKHKDVDOLEHUW\LQWHUHVWXQGHUWKH)LUVWDQG)RXUWHHQWK
LVWHVWLPRQ\WKDWWKHILHOGLQYHVWLJDWRUPDNHVQRHFRQRPLF               $PHQGPHQW7KH)RXUWHHQWK$PHQGPHQWSURYLGHVWKDWQR
GHWHUPLQDWLRQVDQGQRUHFRPPHQGDWLRQDVWRZKRLVHOLJLEOH               VWDWH VKDOO GHSULYH DQ\ SHUVRQ RI OLIH OLEHUW\ RU SURSHUW\
IRUEHQHILWV7KHUHLVQRGLVSXWHWKDWWKHGXWLHVLQYROYHGDUH         ZLWKRXW GXH SURFHVV RI ODZ  7KLV $PHQGPHQW UHFRJQL]HV
JRYHUQHGE\VWDWXWH7KHUHDUHJHQXLQHLVVXHVRIPDWHULDO              mOLEHUW\lDQGmSURSHUW\lDVFRH[LVWHQWKXPDQULJKWV)LUVW
IDFWVDVWRZKHWKHUWKHQHZHPSOR\HHLVSHUIRUPLQJGLIIHUHQW             $PHQGPHQWIUHHGRPVRIVSHHFKDQGDVVRFLDWLRQDUHZLWKLQ
MREIXQFWLRQVWKDQWKRVHSHUIRUPHGE\%DXHU                             WKHWHUPmOLEHUW\lDVSURWHFWHGE\WKHGXHSURFHVVFODXVHRI
                                                                         WKH)RXUWHHQWK$PHQGPHQW*LWORZY1HZ<RUN86
   $VWR0RQWJRPHU\jVDUJXPHQWWKDW(YHUVPDQLVKHUmH\HV                1HZ<RUNH[UHO%U\DQWY=LPPHUPDQ86
DQGHDUVlLQWKHFRPPXQLW\DVGHILQHGLQ&DWHJRU\7KUHHLQ              +XJKHVY6XSHULRU&RXUWRI&DOLIRUQLD86
0F&ORXG WKH GLVWULFW FRXUW GRHV QRW FLWH DQ\ HYLGHQFH           DQG1$$&3Y$ODEDPD86
VKRZLQJ WKDW WKH ILHOG LQYHVWLJDWRU SURYLGHV mFRQILGHQWLDO
DGYLFHlWRDQ\RQH$WKHUGHSRVLWLRQ0RQWJRPHU\WHVWLILHG                 7KHGLVWULFWFRXUWJUDQWHGVXPPDU\MXGJPHQWLQIDYRURI
WKDWVKHFRXOGEDUHO\UHPHPEHUZKHQVKHKDGODVWVSRNHQWR               0RQWJRPHU\ RQ %DXHUjV OLEHUW\ LQWHUHVW FODLP EHFDXVH LW
(YHUVPDQDERXWSROLWLFDOPDWWHUV0RQWJRPHU\SURYLGHVQR                IRXQGWKDW%DXHUIDLOHGWRHVWDEOLVKD)LUVW$PHQGPHQWFODLP
HYLGHQFHWKDW(YHUVPDQFRQWUROVWKHOLQHVRIFRPPXQLFDWLRQ               )RUWKHUHDVRQVVHWIRUWKDERYHWKHGLVWULFWFRXUWHUUHGLQLWV
WR 0RQWJRPHU\  ,Q 0F&ORXG WKH WZR H[DPSOHV XVHG WR            ILQGLQJV%DXHUKDVVWDWHGD)LUVW$PHQGPHQWFODLPDQGKDV
LOOXPLQDWH WKH FRQFHSW RI FRQWUROOLQJ WKH OLQHV RI                HVWDEOLVKHGVXIILFLHQWIDFWVWRSUHFOXGHVXPPDU\MXGJPHQWRQ
FRPPXQLFDWLRQ ZHUH D MXGJHjV VHFUHWDU\ RU D ODZ FOHUN           KLV )LUVW $PHQGPHQW FODLP  7KH GLVWULFW FRXUW LPSURSHUO\
(YHUVPDQjVSRVLWLRQGRHVQRWDSSHDUWREHDNLQWRWKRVHWZR              JUDQWHGVXPPDU\MXGJPHQWRQ%DXHUjVOLEHUW\LQWHUHVWFODLP
SRVLWLRQV
                                                                         ' 4XDOLILHG,PPXQLW\
   %DVHG RQ WKH UHFRUG EHORZ WKH GLVWULFW FRXUW HUUHG LQ
ILQGLQJWKDW%DXHUmKDVQRWVWDWHGDFODLPIRUWKHYLRODWLRQRI            $OWHUQDWLYHO\ 0RQWJRPHU\ FODLPV WKDW VKH LV HQWLWOHG WR
DFRQVWLWXWLRQDOULJKWEDVHGRQDSDWURQDJHGLVPLVVDOIURPWKDW          TXDOLILHGLPPXQLW\%HFDXVHWKHGLVWULFWFRXUWGLGQRWUHDFK
SRVLWLRQl2UGHUs$%DXHUjV&RPSODLQWGRHVVWDWHD             WKLVLVVXHWKLV&RXUWFDQQRWFRQVLGHUWKHTXDOLILHGLPPXQLW\
FODLP IRU WKH YLRODWLRQ RI D FRQVWLWXWLRQDO ULJKW EDVHG RQ D   GHIHQVH7KHGLVWULFWFRXUWPD\DGGUHVVWKLVLVVXHRQUHPDQG
SDWURQDJHGLVPLVVDOFODLPDQG%DXHUKDVSUHVHQWHGVXIILFLHQW
IDFWVVKRZLQJWKDWWKHUHDUHJHQXLQHLVVXHVRIPDWHULDOIDFWWR                               ,,,&21&/86,21
SUHFOXGHVXPPDU\MXGJPHQW
                                                                           )RUWKHUHDVRQVVWDWHGDERYHWKHGLVWULFWFRXUWjVRUGHUDQG
                                                                         MXGJPHQW JUDQWLQJ VXPPDU\ MXGJPHQW LQ IDYRU RI
                                                                         0RQWJRPHU\DQGDJDLQVW%DXHULV5(9(56('DQGWKHFDVH
