                                                                               5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
    6NDJJVY3DUNHU                               1R                    3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

                                                                            (/(&7521,& &,7$7,21  )(' $SS $ WK &LU

   m,IDQH[SHULHQFHGWULDOMXGJHZKRGDLO\IDFHVWKHGLIILFXOW                        )LOH 1DPH DD

WDVN RI LPSRVLQJ VHQWHQFHV KDV D YLWDO QHHG IRU DFFXUDWH
LQIRUPDWLRQDERXWDGHIHQGDQWDQGWKHFULPHKHFRPPLWWHGLQ
RUGHUWREHDEOHWRLPSRVHDUDWLRQDOVHQWHQFHLQWKHW\SLFDO          81,7('67$7(6&28572)$33($/6
FULPLQDO FDVH WKHQ DFFXUDWH VHQWHQFLQJ LQIRUPDWLRQ LV DQ                      )257+(6,;7+&,5&8,7
LQGLVSHQVDEOH SUHUHTXLVLWH WR D UHDVRQHG GHWHUPLQDWLRQ RI                         BBBBBBBBBBBBBBBBB
ZKHWKHUDGHIHQGDQWVKDOOOLYHRUGLHE\DMXU\RISHRSOHZKR
PD\QHYHUEHIRUHKDYHPDGHDVHQWHQFLQJGHFLVLRQl*UHJJ
 86 DW  HPSKDVLV DGGHG  *LYHQ WKH IDFW WKDW
GHIHQVHFRXQVHOjVSHUIRUPDQFHUHVXOWHGLQWKHMXU\LPSRVLQJ             '$9,' /(52< 6.$**6              ;
DGHDWKVHQWHQFHEDVHGRQLQDFFXUDWHmSV\FKREDEEOHlDQGWKH                   3HWLWLRQHU$SSHOODQW      
FRQVLGHUDEOH PLWLJDWLRQ HYLGHQFH WKDW FRXOG KDYH EHHQ                                               
SUHVHQWHG E\ DQ DFWXDO H[SHUW KDG FRXQVHO IXQFWLRQHG                                                  1R
SURSHUO\ ZH ILQG WKDW mFRXQVHOjV GHILFLHQW SHUIRUPDQFH                      Y                     
UHQGHU>HG@ WKH UHVXOW RI WKH WULDO XQUHOLDEOH >DQG@ WKH                                            !
                                                                                                          
SURFHHGLQJIXQGDPHQWDOO\XQIDLUl/RFNKDUWY)UHWZHOO            3+,/ 3$5.(5:DUGHQ              
86    $FFRUGLQJO\ ZH ILQG WKDW WKH                      5HVSRQGHQW$SSHOOHH 
VHQWHQFLQJSURFHHGLQJVYLRODWHG6NDJJVjV6L[WK$PHQGPHQW                                                 1
ULJKWWRHIIHFWLYHDVVLVWDQFHRIFRXQVHO
                                                                               $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
                     ,,,&21&/86,21                                    IRUWKH:HVWHUQ'LVWULFWRI.HQWXFN\DW%RZOLQJ*UHHQ
                                                                        1RnsRVHSK+0F.LQOH\sU'LVWULFWsXGJH
  )RU WKH IRUHJRLQJ UHDVRQV ZH 5(9(56( WKH GLVWULFW
FRXUWjVGHQLDORI6NDJJVjVSHWLWLRQIRUDZULWRIKDEHDVFRUSXV                        $UJXHG1RYHPEHU
EDVHG RQ WKH LQHIIHFWLYH DVVLVWDQFH RI FRXQVHO UHFHLYHG E\
6NDJJV DW WKH SHQDOW\ SKDVH RI KLV WULDO  $FFRUGLQJO\ ZH             'HFLGHGDQG)LOHG'HFHPEHU
5(0$1'WRWKHGLVWULFWFRXUWZLWKLQVWUXFWLRQVWRLVVXHD
ZULWRIKDEHDVFRUSXVYDFDWLQJ6NDJJVjVGHDWKVHQWHQFHXQOHVV          %HIRUH0(55,771(/621DQG&2/(&LUFXLWsXGJHV
WKH&RPPRQZHDOWKFRQGXFWVDQHZSHQDOW\SURFHHGLQJZLWKLQ
GD\VRIUHPDQG                                                                       BBBBBBBBBBBBBBBBB
                                                                                               &2816(/
                                                                       $5*8('  5RGQH\ 0F'DQLHO '(3$570(17 2)
                                                                       38%/,&$'92&$&<)UDQNIRUW.HQWXFN\IRU$SSHOODQW
                                                                       'DYLG $ 6PLWK $66,67$17 $77251(< *(1(5$/
                                                                       )UDQNIRUW .HQWXFN\ IRU $SSHOOHH  21 %5,()  5RGQH\
                                                                       0F'DQLHO 7KRPDV 0 5DQVGHOO '(3$570(17 2)
                                                                       38%/,&$'92&$&<)UDQNIRUW.HQWXFN\IRU$SSHOODQW
                                                                       'DYLG$6PLWK,DQ*6RQHJR$66,67$17$77251(<
                                                                       *(1(5$/)UDQNIRUW.HQWXFN\IRU$SSHOOHH

                                                                                                    
     6NDJJVY3DUNHU                              1R       1R                               6NDJJVY3DUNHU       

                  BBBBBBBBBBBBBBBBBBBBBB                              WKHUH LV D UHDVRQDEOH SUREDELOLW\ WKDW EXW IRU FRXQVHOjV
                                                                      XQSURIHVVLRQDOHUURUVWKHUHVXOWRIWKHSURFHHGLQJZRXOGKDYH
                   $0(1'('23,1,21                                    EHHQ GLIIHUHQW  $ UHDVRQDEOH SUREDELOLW\ LV D SUREDELOLW\
                  BBBBBBBBBBBBBBBBBBBBBB                              VXIILFLHQWWRXQGHUPLQHFRQILGHQFHLQWKHRXWFRPHl%UHVOHU
                                                                      PLVUHSUHVHQWHG KLPVHOI DV D OLFHQVHG FOLQLFDO DQG IRUHQVLF
   5*8<&2/(s5&LUFXLWsXGJH3HWLWLRQHU$SSHOODQW             SV\FKRORJLVWKLVSUHVHQWDWLRQWRWKHMXU\ZDVIUDXGXOHQWDQG
'DYLG/HUR\6NDJJVZDVFRQYLFWHGE\D.HQWXFN\MXU\RIWZR            UHVXOWHG LQ WKH MXU\ PDNLQJ D GHWHUPLQDWLRQ UHJDUGLQJ WKH
FRXQWVRIFDSLWDOPXUGHURQHFRXQWRIILUVWGHJUHHUREEHU\          DSSURSULDWH VHQWHQFH IRU 6NDJJV ZLWKRXW WKH DLG RI FULWLFDO
DQGRQHFRXQWRIILUVWGHJUHHEXUJODU\6NDJJVZDVVHQWHQFHG         PLWLJDWLQJLQIRUPDWLRQ$V'U(QJXPVWDWHG
WRGHDWKRQWKHPXUGHUFRQYLFWLRQVWZHQW\\HDUVHDFKRQWKH
UREEHU\ FRQYLFWLRQV DQG WZHQW\ \HDUV RQ WKH EXUJODU\            0U%UHVOHUGHWHUPLQHGWKDW0U6NDJJVZDVSHUIRUPLQJ
FRQYLFWLRQ7KH.HQWXFN\6XSUHPH&RXUWDIILUPHG6NDJJVjV               ZLWKLQ WKH DYHUDJH UDQJH RI LQWHOOHFWXDO IXQFWLRQLQJ D
FRQYLFWLRQDQGVHQWHQFH6HH6NDJJVY&RPPRQZHDOWK               ILQGLQJWKDWLVGHILQLWHO\EHOLHGE\>6NDJJVjV@PRVWUHFHQW
6:G.\7KH8QLWHG6WDWHV'LVWULFW&RXUWIRU            LQWHOOLJHQFH WHVWLQJ  0U %UHVOHU ZDV DOVR FRPSOHWHO\
WKH:HVWHUQ'LVWULFWRI.HQWXFN\GHQLHG6NDJJVjVSHWLWLRQIRU           QHJOLJHQWDQGWRWDOO\LQFRPSHWHQWLQWHUPVRIHYDOXDWLQJ
DZULWRIKDEHDVFRUSXVSXUVXDQW WR86&VHH              0U6NDJJVjVRYHUDOOQHXURSV\FKRORJLFDOVWDWXV:KLOH
6NDJJVY3DUNHU)6XSSG:'.\DQG                WKLVH[DPLQHUFDQQRWGHILQLWHO\GLDJQRVH0U6NDJJVDV
WKHQ LVVXHG D FHUWLILFDWH RI SUREDEOH FDXVH SXUVXDQW WR      VXIIHULQJIURPDQXQGHUO\LQJRUJDQLFEUDLQV\QGURPHD
86&    2Q DSSHDO WR WKLV &RXUW 6NDJJV UDLVHV        VLPSOH TXDQWLWDWLYH DQDO\VLV RI KLV QHXURSV\FKRORJLFDO
QXPHURXVDVVLJQPHQWVRIHUURURQO\RQHRIZKLFKKDVPHULW              WHVW UHVXOWV UHYHDOV VLJQLILFDQW FRPSURPLVH LQ EUDLQ
DQG ZDUUDQWV RXU GLVFXVVLRQ  ZKHWKHU 6NDJJV UHFHLYHG            EHKDYLRUUHODWLRQVKLSV
LQHIIHFWLYH DVVLVWDQFH RI FRXQVHO LQ YLRODWLRQ RI KLV 6L[WK
$PHQGPHQWULJKWV)RUWKHUHDVRQVWKDWIROORZZHFRQFOXGH             
WKDW6NDJJVjVWULDOFRXQVHOSURYLGHGLQHIIHFWLYHDVVLVWDQFHRI
FRXQVHO DW WKH SHQDOW\ SKDVH RI WKH WULDO DFFRUGLQJO\ ZH     %\ LQHIIHFWLYHO\ HYDOXDWLQJ WKH FOLHQW E\ DUULYLQJ DW
5(9(56(WKHGLVWULFWFRXUWjVGHQLDORI6NDJJVjVSHWLWLRQIRU            FOHDUO\ HUURQHRXV GLDJQRVWLF LPSUHVVLRQV E\ SRVLWLQJ
DZULWRIKDEHDVFRUSXV                                              FULPLQDO LQVDQLW\ ZKHQ QRQH H[LVWHG E\ IDLOLQJ WR
                                                                        LGHQWLI\ 0U 6NDJJVjV ORZ ERUGHUOLQH LQWHOOHFWXDO
                      ,%$&.*5281'                                     IXQFWLRQLQJ E\ IDLOLQJ WR LGHQWLI\ 0U 6NDJJVjV
                                                                        QHXURSV\FKRORJLFDOGHILFLWVDQGE\SURGXFLQJDUHSRUW
   2Q0D\+HUPDQDQG0DH0DWWKHZVZHUHVKRWDQG                ZKLFK FRQWDLQHG ZKDW PD\ EH FKDULWDEO\ WHUPHG
NLOOHGLQWKHLUKRPHQHDU*ODVJRZ.HQWXFN\7KHHQVXLQJ               SV\FKREDEEOH0U6NDJJVjVSV\FKRORJLFDOVWDWXVZDV
LQYHVWLJDWLRQ OHG SROLFH WR 6NDJJV LQ &ROXPEXV ,QGLDQD         PLVUHSUHVHQWHG DQG WKH VDOLHQW IHDWXUHV ZHUH RPLWWHG
6HYHUDO GD\V ODWHU ODZ HQIRUFHPHQW RIILFLDOV WUDQVSRUWHG         IURPWKHMXU\jVSXUYLHZ
6NDJJV WR .HQWXFN\ ZKHUH KH ZDV DUUDLJQHG  'XULQJ WKLV
WLPH 6NDJJV PDGH WZR FRQIHVVLRQV DQG RWKHU LQFXOSDWRU\        )XUWKHUPRUHGHIHQVHFRXQVHOIDLOHGWRSUHSDUHRUSUHVHQWDQ\
VWDWHPHQWV6NDJJVDOVROHGSROLFHWRWKHPXUGHUZHDSRQDQG          RWKHU PHDQLQJIXO PLWLJDWLRQ HYLGHQFH WKDW PLJKW KDYH
0DH0DWWKHZVjVSXUVH                                                FRPSHQVDWHG IRU WKHLU XVH RI %UHVOHU RU DLGHG WKH MXU\ LQ
                                                                      XQGHUVWDQGLQJ6NDJJVjVDFWXDOPHQWDOVWDWXV
 3ULRUWRWULDO6NDJJVLQIRUPHGWKH%DUUHQ&RXQW\&LUFXLW
&RXUWWKDWKHLQWHQGHGWRLQWURGXFHHYLGHQFHRIKLVPHQWDO
       6NDJJVY3DUNHU                                 1R        1R                               6NDJJVY3DUNHU        

                                                                      LOOQHVV  7KH FRXUW DSSRLQWHG WZR SV\FKLDWULVWV WR HYDOXDWH
                                                                             6NDJJVjVPHQWDOFRQGLWLRQ2QHSV\FKLDWULVW'U/DZUHQFH
  ,Q DGGLWLRQ WKHUH DUH VWURQJ SDUDQRLG IHDWXUHV ZKLFK               3 *UHHQ ZDV WR HYDOXDWH 6NDJJV DQG SURYLGH ERWK WKH
  VXJJHVWWKDWWKLVFOLHQWKDVOLYHGXQGHUWKHIHDURIDWWDFN                &RPPRQZHDOWK DQG WKH GHIHQVH ZLWK D FRS\ RI KLV UHSRUW
  DQGKXPLOLDWLRQ7KHUHDSSHDUVWREHDFRQVWDQWVHQVHRI                  7KH RWKHU SV\FKLDWULVW 'U :LOOLDP s .HUQRKDQ ZDV
  WKUHDWRIEHLQJDWWDFNHG7KHUHLVDOVRDQDVVRFLDWHG               DSSRLQWHGDVDmGHIHQVHSV\FKLDWULVWlDQGZDVWRSURYLGHKLV
  FRQVWDQWHIIRUWWRGHILQHZKDWLVWKHDSSURSULDWHEHKDYLRU                 UHSRUW WR RQO\ 6NDJJVjV FRXQVHO  'U .HUQRKDQ UHIXVHG WR
  LQDSDUWLFXODUVLWXDWLRQ                                              HYDOXDWH6NDJJVUHVXOWLQJLQDFRXUWRUGHUIRU6NDJJVWREH
                                                                             HYDOXDWHGE\'U3UDQ5DYDQLRIWKH.HQWXFN\&RUUHFWLRQDO
                                                                      3V\FKLDWULF&HQWHUm.&3&l6NDJJVREMHFWHGWRWKHFRXUW
                                                                             RUGHU DQG UHTXHVWHG WKDW WKH FRXUW DSSRLQW DQ LQGHSHQGHQW
  7KHH[WUHPHHOHYDWLRQRIWKH6FKL]RSKUHQLD6FDOHIXUWKHU                   SV\FKLDWULVWIRUKLVGHIHQVH6NDJJVjVDWWRUQH\VVHOHFWHG(O\D
  EROVWHUVWKHDVVXPSWLRQWKDWWKHFOLQLFDOSURILOHDFFXUDWHO\               %UHVOHUZKRFODLPHGWREHDOLFHQVHGFOLQLFDODQGIRUHQVLF
  UHIOHFWV0U6NDJJVjVFXUUHQWOHYHORIIXQFWLRQLQJ                 SV\FKRORJLVWDQGWKHFRXUWDSSURYHGSD\PHQWRIIRU
  7KH HOHYDWLRQ RQ WKH 6FKL]RSKUHQLD 6FDOH DSSHDUV WR                 %UHVOHUjVVHUYLFHV%UHVOHUHYDOXDWHG6NDJJVLQSUHSDUDWLRQ
  UHIOHFW DQ LQGLYLGXDO ZKR LV FRQIXVHG ZLWKGUDZQ                    IRU6NDJJVjVLQVDQLW\GHIHQVHDWWULDO
  VXVSLFLRXVDQGVRFLDOO\LVRODWHG6XFKDQHOHYDWLRQLV
  RIWHQDVVRFLDWHGZLWKDFWLYHSV\FKRWLFWKRXJKWSURFHVVHV                     7KH JXLOW SKDVH RI WKH WULDO FRPPHQFHG RQ )HEUXDU\ 
  H[WUHPHO\SRRUMXGJPHQWDQGVLJQLILFDQWLPSDLUPHQWLQ                     $WWULDO%UHVOHUWHVWLILHGWKDW6NDJJVVXIIHUHGIURPD
  UHDOLW\WHVWLQJ,WLVOLNHO\WKDWWKLVLQGLYLGXDOH[SHULHQFHV            mGHSUHVVLYH GLVRUGHUl DQG mSDUDQRLG SHUVRQDOLW\ GLVRUGHUl
  XQXVXDOSHUFHSWXDOHYHQWVSRVVLEOHKDOOXFLQDWRU\DFWLYLW\                ERWK RI ZKLFK ZRXOG KDYH DIIHFWHG 6NDJJVjV DELOLW\ WR
  DQGXQXVXDOLGHDVWKDWPD\LQFOXGHPDJLFDOWKLQNLQJRU                     XQGHUVWDQGWKHFULPLQDOLW\RIKLVDFWLRQVDQGWRGLVWLQJXLVK
  GHOXVLRQDOEHOLHIV                                                      ULJKW IURP ZURQJ  +RZHYHU %UHVOHUjV WHVWLPRQ\ ZDV
                                                                             UDPEOLQJFRQIXVLQJDQGDWWLPHVLQFRKHUHQWWRWKHSRLQWRI
FLWDWLRQV RPLWWHG  %DVHG RQ WKLV LQIRUPDWLRQ LW LV               EHLQJFRPLFDO7KH&RPPRQZHDOWKSUHVHQWHGWKHWHVWLPRQ\
UHDVRQDEOH WR WKLQN WKDW WKH MXU\ FRXOG KDYH IRXQG WKH              RI 'U 5DYDQL ZKR WHVWLILHG WKDW 6NDJJV KDG D KLVWRU\ RI
VWDWXWRU\PLWLJDWLQJFLUFXPVWDQFHRI6NDJJVjVLPSDLUHGDELOLW\               DOFRKRODEXVHDQGGLVSOD\HGDmVFKL]RSKUHQLFWUHQGlEXWFRXOG
WRmDSSUHFLDWHWKHFULPLQDOLW\RIKLVFRQGXFWWKHUHTXLUHPHQWV               DSSUHFLDWHWKHGLIIHUHQFHEHWZHHQULJKWDQGZURQJ7KHMXU\
RIODZDVDUHVXOWRIPHQWDOLOOQHVVRUUHWDUGDWLRQl           UHMHFWHG6NDJJVjVLQVDQLW\GHIHQVHDQGUHWXUQHGYHUGLFWVRI
6HH.< 5(9 67$7$11E                                     JXLOW\ RQ DOO FKDUJHV  7KH FRXUW SURFHHGHG WR WKH SHQDOW\
                                                                             SKDVH RI WKH WULDO EXW GHIHQVH FRXQVHO FKRVH QRW WR FDOO
  ,QVXPZHEHOLHYHWKDWWKHUHLVDUHDVRQDEOHSUREDELOLW\WKDW             %UHVOHUEHFDXVHKLVSHUIRUPDQFHZDVVRSRRUGXULQJWKHJXLOW
WKHMXU\ZRXOGKDYHZHLJKHGWKHPLWLJDWLQJDQGDJJUDYDWLQJ                   SKDVH7KHMXU\FRXOGQRWDJUHHRQDQDSSURSULDWHSHQDOW\IRU
IDFWRUVGLIIHUHQWO\KDGFRXQVHOSHUIRUPHGDGHTXDWHO\6HH                  WKHWZRPXUGHUFRQYLFWLRQVUHVXOWLQJLQDPLVWULDO
6WULFNODQG86DWm7KHGHIHQGDQWPXVWVKRZWKDW
                                                                               2QsXQHIRXUPRQWKVODWHUWKHFRXUWFRQYHQHGD
                                                                             VHFRQG SHQDOW\ SKDVH KHDULQJ EHIRUH D QHZ MXU\  7KH
     
     $OWKRXJK QRW GLVSRVLWLYH RI RXU GHFLVLRQ ZH QRWH WKDW WKH ILUVW MXU\
                                                                             &RPPRQZHDOWKUHLQWURGXFHGPXFKRIWKHVDPHHYLGHQFHLW
WR VHQWHQFH 6NDJJV ZKLFK GLG QRW KHDU WKH WHVWLPRQ\ RI %UHVOHU IRU          KDG LQWURGXFHG DW WKH JXLOW SKDVH RI WKH WULDO DQG WKH
SXUSRVHV RI VHQWHQFLQJ H[SUHVVHG LWV KHVLWDWLRQ WR JLYH 6NDJJV WKH GHDWK    WHVWLPRQ\RIWKRVHZLWQHVVHVZDVHVVHQWLDOO\WKHVDPH7KH
SHQDOW\ DQG LQ WKH HQG FRXOG QRW DJUHH RQ DQ DSSURSULDWH VHQWHQFH
       6NDJJVY3DUNHU                                 1R      1R                                   6NDJJVY3DUNHU         

&RPPRQZHDOWK DOVR LQWURGXFHG RYHU GHIHQVH REMHFWLRQV                   'U (QJXPjV QHXURSV\FKRORJLFDO
6NDJJVjVSULRUFULPLQDOUHFRUGLQFOXGLQJFRQYLFWLRQVRIQRQ             DVVHVVPHQWRI6NDJJVUHYHDOHG
DVVDXOWLYHRIIHQVHV'HIHQVHFRXQVHOFDOOHG6NDJJVjVIDWKHU
5RODQG 6NDJJV ZKR WHVWLILHG WKDW KLV VRQ ZDV ERUQ LQ DQ          0U 6NDJJV VXIIHUV IURP VLJQLILFDQW FRPSURPLVH LQ
mLQVDQHDV\OXPlZDVUDLVHGE\KLVJUDQGPRWKHUDQGVWDUWHG                 DOPRVW DOO DUHDV RI FRJQLWLYH IXQFWLRQ     ,Q IDFW
JHWWLQJ LQWR FULPLQDO WURXEOH RQO\ DIWHU OHDYLQJ KRPH               FRQVLGHULQJWKHIRXUPRVWVHQVLWLYHLQGLFDWRUVRIEUDLQ
'HIHQVH FRXQVHO DOVR GHFLGHG WR UHFDOO %UHVOHU GHVSLWH KLV         G\VIXQFWLRQLQWHUPVRIOHYHORISHUIRUPDQFH0U
SUHYLRXV SRRU SHUIRUPDQFH  %UHVOHU WHVWLILHG WKDW 6NDJJV            6NDJJVjVVFRUHVZHUHFOHDUO\LQWKHEUDLQGDPDJHGUDQJH
VXIIHUHGIURPDGHSUHVVLYHGLVRUGHUDQGDSDUDQRLGSHUVRQDOLW\              LQ HDFK LQVWDQFH     $FFRUGLQJO\ WKH UHVXOWV RI
GLVRUGHU ZKLFK ZRXOG KDYH LPSDLUHG KLV FDSDFLW\ WR                   FRPSUHKHQVLYH QHXURSV\FKRORJLFDO DVVHVVPHQW FOHDUO\
DSSUHFLDWH WKH QDWXUH RI KLV FRQGXFW DQG WR FRQIRUP KLV            UHIOHFWDSDWWHUQRIUHVXOWVFRQVLVWHQWZLWKVRPHIRUPRI
FRQGXFW WR WKH UHTXLUHPHQWV RI WKH ODZ  2Q UHEXWWDO WKH         RUJDQLFEUDLQV\QGURPH
&RPPRQZHDOWKFDOOHG'U5DYDQLZKRDJDLQWHVWLILHGWKDW
GHVSLWH6NDJJVjVmVFKL]RSKUHQLFWUHQGlKHKDGWKHVXEVWDQWLDO              
FDSDFLW\WRUHVLVWDQLPSXOVHWRYLRODWHWKHODZ
                                                                            7KHSULPDU\HOHYDWLRQVRIWKHFOLQLFDOSURILOHUHIOHFWDQ
  $WWKHFRQFOXVLRQRIWKHSHQDOW\SKDVHWKHFRXUWLQVWUXFWHG              LQGLYLGXDO ZKR PD\ EH LQ D ERUGHUOLQH SV\FKRWLF
WKHMXU\RQWZRDJJUDYDWLQJFLUFXPVWDQFHVZLWKUHJDUGWRWKH                FRQGLWLRQZLWKVHYHUHGLVWXUEDQFHVRIWKRXJKWPRRGDQG
GHDWK RI +HUPDQ 0DWWKHZV   6NDJJV ZDV HQJDJHG LQ               EHKDYLRU  6XFK LQGLYLGXDOV W\SLFDOO\ KDUERU LQWHQVH
FRPPLWWLQJ D ILUVWGHJUHH UREEHU\ DW WKH WLPH +HUPDQ                 IHHOLQJV RI LQVHFXULW\ DQG LQIHULRULW\  7KH\ ODFN VHOI
0DWWKHZVZDVNLOOHGDQG6NDJJVjVDFWRINLOOLQJ+HUPDQ                 FRQILGHQFH DQG VHOIHVWHHP DQG IHHO JXLOW\ DERXW
0DWWKHZVZDVLQWHQWLRQDODQGDOVRUHVXOWHGLQWKHGHDWKRI                  SHUFHLYHGIDLOXUHV
0DH 0DWWKHZV  7KH FRXUW DOVR LQVWUXFWHG WKH MXU\ RQ WKH
DJJUDYDWLQJFLUFXPVWDQFHVZLWKUHJDUGWRWKHGHDWKRI0DH
0DWWKHZV6NDJJVZDVHQJDJHGLQFRPPLWWLQJDILUVWGHJUHH
UREEHU\DQGILUVWGHJUHHEXUJODU\DWWKHWLPH0DH0DWWKHZV                    
                                                                                &XUUHQW .HQWXFN\ ODZ EDQV WKH H[HFXWLRQ RI PHQWDOO\ UHWDUGHG
ZDVNLOOHG)LQDOO\WKHFRXUWLQVWUXFWHGWKHMXU\WRFRQVLGHU                          < (9 7$7
                                                                          SHUVRQV $00 .  5     6     $11     8QGHU WKLV VWDWXWH ZKLFK
WKHPLWLJDWLQJIDFWRUVRI6NDJJVjVHPRWLRQDOGLVWXUEDQFHDQG              EHFDPH HIIHFWLYH sXO\   DQG GRHV QRW DSSO\ WR 6NDJJV WKH FRXUW
ZKHWKHU 6NDJJV FRXOG DSSUHFLDWH WKH FULPLQDOLW\ RI KLV             PXVW GHWHUPLQH SULRU WR WULDO ZKHWKHU D GHIHQGDQW LV PHQWDOO\ UHWDUGHG
FRQGXFWRUFRQIRUPKLVFRQGXFWWRWKHUHTXLUHPHQWVRIWKHODZ             7R WKLV HQG WKH FRXUW PXVW HYDOXDWH D QXPEHU RI IDFWRUV LQFOXGLQJ
LQ OLJKW RI KLV PHQWDO GLVHDVH RU GHIHFW  7KH MXU\            ZKHWKHU WKH GHIHQGDQWjV ,4 LV  RU EHORZ 6HH .  5<   (9 7$7
                                                                                                                                        6    $ 11 
                                                                             VHH DOVR 7   (11    &2'( 11
                                                                                                                          $       
                                                                          EDUULQJ WKH LPSRVLWLRQ RI D GHDWK VHQWHQFH RQ D PHQWDOO\ UHWDUGHG SHUVRQ
                                                                          7R EH VXUH LPSRVLQJ D GHDWK VHQWHQFH RQ D SHUVRQ ZKR LV FRQVLGHUHG WR
    
     $V LW H[LVWHG DW WKH WLPH WKH .HQWXFN\ VWDWXWH UHJDUGLQJ D MXU\jV   EH PHQWDOO\ UHWDUGHG DQG ZKR KDV FRPPLWWHG D FDSLWDO FULPH KDV QRW EHHQ
FRQVLGHUDWLRQ RI PLWLJDWLQJ HYLGHQFH SURYLGHG                            IRXQG WR EH D SHU VH YLRODWLRQ RI WKH (LJKWK $PHQGPHQW VHH 3HQU\ 
                                                                          86 DW  QRQHWKHOHVV PHQWDO UHWDUGDWLRQ IUHTXHQWO\ LV FRQVLGHUHG D
     ,Q DOO FDVHV RI RIIHQVHV IRU ZKLFK WKH GHDWK SHQDOW\ PD\ EH                               < (9 7
                                                                          PLWLJDWLQJ IDFWRU VHH .  5    6 $ 11                   +,2 (9 2'(
                                                                                                                       FI 2    5   &
    DXWKRUL]HG WKH MXGJH VKDOO FRQVLGHU RU KH VKDOO LQFOXGH LQ KLV      $11    % %DQNV%DOGZLQ  OLVWLQJ DV D VWDWXWRU\
    LQVWUXFWLRQV WR WKH MXU\ IRU LW WR FRQVLGHU DQ\ PLWLJDWLQJ           PLWLJDWLQJ IDFWRU mZKHWKHU DW WKH WLPH RI FRPPLWWLQJ WKH RIIHQVH WKH
    FLUFXPVWDQFHV RWKHUZLVH DXWKRUL]HG E\ ODZ DQG DQ\ RI WKH              RIIHQGHU EHFDXVH RI D PHQWDO GLVHDVH RU GHIHFW ODFNHG VXEVWDQWLDO
    IROORZLQJ VWDWXWRU\    PLWLJDWLQJ FLUFXPVWDQFHV>@                 FDSDFLW\ WR DSSUHFLDWH WKH FULPLQDOLW\ RI WKH RIIHQGHUjV FRQGXFW RU WR
                                                                          FRQIRUP WKH RIIHQGHUjV FRQGXFW WR WKH UHTXLUHPHQWV RI WKH ODZl
    6NDJJVY3DUNHU                                 1R       1R                                  6NDJJVY3DUNHU            

DVWRKROGWKDW6NDJJVZDVHQWLWOHGWRDFRPSHWHQWGHIHQVH               UHFRPPHQGHG WKDW 6NDJJV EH VHQWHQFHG WR GHDWK DQG WKH
H[SHUWEHFDXVHKHUHWKHSUHMXGLFHWR6NDJJVUHVXOWHGIURP              FRXUWHQWHUHGDILQDOVHQWHQFHRIGHDWKRQsXO\
KLV RZQ FRXQVHOjV IDLOXUH WR DVVHUW HIIHFWLYHO\ KLV ULJKWV DW
VHQWHQFLQJLQFOXGLQJWKHSUHVHQWDWLRQRIPLWLJDWLQJHYLGHQFH              6NDJJVILOHGVHYHUDOPRWLRQVIRUDQHZWULDORQWKHEDVLVRI
0RUH VSHFLILFDOO\ FRXQVHOjV IDLOXUH WR SUHVHQW DQ HYHQ           QHZO\GLVFRYHUHGHYLGHQFHDOORIZKLFKZHUHGHQLHG+LV
PDUJLQDOO\FRPSHWHQWH[SHUWRQFUXFLDOHYLGHQFHSUHMXGLFHG               ILUVW PRWLRQ ZDV EDVHG XSRQ WKH GLVFRYHU\ E\ DSSHOODWH
6NDJJVDWWKHSHQDOW\SKDVHRIWKHWULDO6NDJJVjVRQHFKDQFH           FRXQVHOWKDW%UHVOHUKDGFRPSOHWHO\IDOVLILHGKLVFUHGHQWLDOV
DWPLWLJDWLRQnDQGDYRLGDQFHRIDGHDWKVHQWHQFHnZDVKLV              ZDVQRWDOLFHQVHGFOLQLFDORUIRUHQVLFSV\FKRORJLVWDQGKDG
ERUGHUOLQHPHQWDOUHWDUGDWLRQDQGRWKHUFOLQLFDOSV\FKRORJLFDO           QR DFDGHPLF GHJUHHV RU WUDLQLQJ DV D SV\FKRORJLVW
FRQGLWLRQVZKLFKFRXQVHOGLGQRWSUHVHQWWRWKHMXU\                 ZKDWVRHYHUnLQIDFWKLVSRVWVHFRQGDU\HGXFDWLRQFRQVLVWHG
                                                                         RIWZR\HDUVRIFROOHJHDVDQ(QJOLVKPDMRU6NDJJVjVWKLUG
  'U(QJXPjVUHSRUWVWDWHG                                             PRWLRQ IRU D QHZ WULDO RQ JURXQGV RI QHZO\ GLVFRYHUHG
                                                                         HYLGHQFHRIIHUHGWKHHYDOXDWLRQVRIWZRSV\FKLDWULFH[SHUWV
  >:@LWK UHJDUG WR WKH PRVW VLJQLILFDQW LVVXHV QDPHO\            ZKRH[DPLQHG6NDJJVLQSUHSDUDWLRQIRUKLVIHGHUDOKDEHDV
  LQWHOOLJHQFHWKHSUHVHQFHRUDEVHQFHRILQGLFLDRIRUJDQLF            SHWLWLRQ 'U&KDUOHV<RQWDFHUWLILHGSV\FKRORJLVWVWDWHG
  EUDLQGDPDJHDQGWKHSUHVHQFHRUDEVHQFHRIDPDMRU                   WKDW6NDJJVZDVPLOGO\UHWDUGHGDQGIXQFWLRQHGDWWKHOHYHORI
  SV\FKRVLVVFKL]RSKUHQLDDIIHFWLYHGLVRUGHURURUJDQLF               D WZHOYH RU WKLUWHHQ\HDUROG  'U (ULF (QJXP D FOLQLFDO
  EUDLQV\QGURPHZLWKSV\FKRVLV0U%UHVOHUjVILQGLQJV                 QHXURSV\FKRORJLVW GHWHUPLQHG WKDW 6NDJJVjV LQWHOOLJHQFH
  ZHUHHUURQHRXVLPSURSHUQRWVXSSRUWHGE\WKHGDWDDQG               TXRWLHQWm,4lRILQGLFDWHGWKDW6NDJJVZDVERUGHUOLQH
  DUJXDEO\PLVUHSUHVHQWDWLYHRIWKHFOLHQW                            PHQWDOO\ UHWDUGHG DQG WKDW %UHVOHUjV WHVWLPRQ\ ZDV mVR IDU
                                                                         EHORZ WKH VWDQGDUG RI FDUH DV WR WRWDOO\ PLVUHSUHVHQW 0U
'U (QJXP IXUWKHU RSLQHG WKDW m%UHVOHUjV REYLRXV                   6NDJJVWRWKHMXU\l
LQFRPSHWHQFHVRGHWUDFWHGIURPWKHSURFHHGLQJVWKDWWKHMXU\
ZDV HLWKHU QRW DOORZHG WR KHDU RU QHYHU KDG D FKDQFH WR         7KHWULDOFRXUWDFNQRZOHGJHG%UHVOHUjVODFNRIFUHGHQWLDOV
FRQVLGHU WKH PRUH VXEWOH DVSHFWV RI 0U 6NDJJVjV                  EXW RYHUUXOHG 6NDJJVjV PRWLRQV   6NDJJV DSSHDOHG WR WKH
SV\FKRORJLFDOGHYHORSPHQWSHUVRQDOLW\VWDWXVSUHVHQWOHYHO             .HQWXFN\ 6XSUHPH &RXUW ZKLFK XQDQLPRXVO\ DIILUPHG
RI FRJQLWLYH IXQFWLRQLQJ HPRWLRQDO VWDWXV RU SRWHQWLDO IRU
ORQJWHUPDGMXVWPHQWLQDSHQDOIDFLOLW\l,QRWKHUZRUGV
WKHMXU\WKDWVHQWHQFHG6NDJJVWRGHDWKGLGQRWKDYHDFFXUDWH
LQIRUPDWLRQ DERXW WKH PHQWDO VWDWXV RI WKH SHUVRQ LW ZDV
VHQWHQFLQJ  ,I FRXQVHO KDG SHUIRUPHG DGHTXDWHO\ WKH MXU\               E 0LWLJDWLQJ &LUFXPVWDQFHV
ZRXOGKDYHKDGVLJQLILFDQWPLWLJDWLQJHYLGHQFHWRFRQVLGHU
                                                                                      $W WKH WLPH RI WKH FDSLWDO RIIHQVH WKH FDSDFLW\ RI WKH
                                                                                     GHIHQGDQW WR DSSUHFLDWH WKH FULPLQDOLW\ RI KLV FRQGXFW
   'U (QJXP DQG 'U <RQW ERWK LQGLFDWHG WKDW 6NDJJV LV                     >RU WR FRQIRUP WKH FRQGXFW@ WR WKH UHTXLUHPHQWV RI ODZ
PLOGO\PHQWDOO\UHWDUGHGEHFDXVH6NDJJVVFRUHGRQRQH                             ZDV LPSDLUHG DV D UHVXOW RI PHQWDO LOOQHVV RU UHWDUGDWLRQ
,4WHVWZKLFKLVEHORZWKHFXUUHQW.HQWXFN\VWDQGDUGIRU                          RU LQWR[LFDWLRQ HYHQ WKRXJK WKH LPSDLUPHQW RI WKH
HOLJLELOLW\IRUWKHGHDWKSHQDOW\6HH.< 5(9 67$7$11                          FDSDFLW\ RI WKH GHIHQGDQW WR DSSUHFLDWH WKH FULPLQDOLW\
                                                                                     RI KLV FRQGXFW RU WR FRQIRUP WKH FRQGXFW WR WKH
                                                                                     UHTXLUHPHQWV RI ODZ LV LQVXIILFLHQW WR FRQVWLWXWH D
                                                                                     GHIHQVH WR WKH FULPH    

                                                                          < (9 67$7 $11   %DQNV%DOGZLQ 
                                                                         . 5
     6NDJJVY3DUNHU                             1R      1R                                   6NDJJVY3DUNHU        

6NDJJVjV FRQYLFWLRQ DQG VHQWHQFH  7KH 8QLWHG 6WDWHV           
6XSUHPH&RXUWGHQLHGFHUWLRUDUL
                                                                      %\RUJDQL]LQJDGHIHQGDQWjVPHQWDOKLVWRU\H[DPLQDWLRQ
  2QsDQXDU\6NDJJVILOHGDIHGHUDOKDEHDVSHWLWLRQ         UHVXOWVDQGEHKDYLRUDQGRWKHULQIRUPDWLRQLQWHUSUHWLQJ
SXUVXDQWWR86&UDLVLQJQXPHURXVDVVLJQPHQWV            LW LQ OLJKW RI WKHLU H[SHUWLVH DQG WKHQ OD\LQJ RXW WKHLU
RIHUURU7KHGLVWULFWFRXUWKHOGDQHYLGHQWLDU\KHDULQJOLPLWHG     LQYHVWLJDWLYH DQG DQDO\WLF SURFHVV WR WKH MXU\ WKH
WR6NDJJVjVFODLPRILQHIIHFWLYHDVVLVWDQFHRIFRXQVHO2Q           SV\FKLDWULVWVIRUHDFKSDUW\HQDEOHWKHMXU\WRPDNHLWV
sXO\WKHGLVWULFWFRXUWGHQLHG6NDJJVjVSHWLWLRQIRU        PRVW DFFXUDWH GHWHUPLQDWLRQ RI WKH WUXWK RQ WKH LVVXH
KDEHDVUHOLHIJUDQWHGKLPLQIRUPDSDXSHULVVWDWXVIRUDSSHDO       EHIRUHWKHP
DQGLVVXHGDFHUWLILFDWHRISUREDEOHFDXVH
                                                                    $NH  86 DW  FLWDWLRQV RPLWWHG  :H KDYH
  2Q DSSHDO 6NDJJV UDLVHV WZHQW\VHYHQ DVVLJQPHQWV RI        LQWHUSUHWHG$NHWRUHFRJQL]HWKDWLQDGGLWLRQWRWKHULJKWWRD
HUURULQFOXGLQJLQHIIHFWLYHDVVLVWDQFHRIFRXQVHODWERWKWKH      SV\FKLDWULFH[SHUWDWWKHJXLOWSKDVHDQLQGLJHQWGHIHQGDQWLV
JXLOWDQGVHQWHQFLQJSKDVHVRIKLVWULDO$OWKRXJKZHDJUHH        FRQVWLWXWLRQDOO\ HQWLWOHG WR WKH SV\FKLDWULF RU SV\FKRORJLFDO
ZLWKWKHGLVWULFWFRXUWWKDW6NDJJVjVFKDOOHQJHVWRWKHJXLOW       DVVLVWDQFHGXULQJWKHVHQWHQFLQJSKDVHLImWKHGHIHQGDQWjV
SKDVHRIKLVWULDOGRQRWVDWLVI\ WKH VWDQGDUGIRUJUDQWRID     VDQLW\ZDVDVLJQLILFDQWLVVXHGXULQJWKHWULDORUGHIHQGDQW
KDEHDVSHWLWLRQZHFRQFOXGHWKDW6NDJJVUHFHLYHGLQHIIHFWLYH       LVRQWULDOIRUKLVOLIHDQGWKHVWDWHILUVWSUHVHQWVSV\FKLDWULF
DVVLVWDQFHRIFRXQVHOGXULQJWKHSHQDOW\SKDVHRIKLVWULDODQG   HYLGHQFHRIIXWXUHGDQJHURXVQHVVl8QLWHG6WDWHVY2VRED
WKHUHIRUHJUDQWKLVKDEHDVSHWLWLRQEDVHGRQWKDWLVVXH           )G   WK &LU  FLWLQJ .RUGHQEURFN Y
                                                                    6FURJJ\)GWK&LUHQEDQF
                       ,,$1$/<6,6
                                                                      7KH FDVH EHIRUH XV LV QRW RQH RI D PHUH GLVDJUHHPHQW
                   $6WDQGDUGRI5HYLHZ                           EHWZHHQ H[SHUWV RU D FDVH LQ ZKLFK WKH H[SHUW IRU WKH
                                                                    SHWLWLRQHU GLG QRW WHVWLI\ DV IDYRUDEO\ DV WKH SHWLWLRQHU KDG
   6NDJJVILOHGKLVIHGHUDOSHWLWLRQIRUZULWRIKDEHDVFRUSXV      KRSHG n ERWK FLUFXPVWDQFHV LQ ZKLFK WKH JUDQWLQJ RI D
LQsDQXDU\SULRUWRWKHHQDFWPHQWRIWKH$QWLWHUURULVP        KDEHDVSHWLWLRQZRXOGEHLQDSSURSULDWH1RUGRZHUHO\RQ
DQG(IIHFWLYH'HDWK3HQDOW\$FWRIm$('3$lZKLFK            WKHVXJJHVWLRQIURP$NHQRWH[SOLFLWO\DGRSWHGE\WKLV&RXUW
EHFDPH HIIHFWLYH RQ $SULO    $FFRUGLQJO\ SUH      WKDW WKH SHWLWLRQHU LV HQWLWOHG WR D FRPSHWHQW H[SHUW LQ KLV
$('3$ODZJRYHUQV6NDJJVjVHQWLWOHPHQWWRKDEHDVUHOLHI            GHIHQVH&RPSDUH9LFNHUVY6WHZDUW)GWK
6HH/LQGKY0XUSK\861RQHWKHOHVV        &LUVXJJHVWLQJWKDWDUHYLHZLQJFRXUWFRXOGVFUXWLQL]H
WKHFHUWLILFDWHRIDSSHDODELOLW\m&2$lUHTXLUHPHQWVVHWIRUWK     WKHVWDWHjVDFWLRQVUHJDUGLQJSURYLGLQJHIIHFWLYHDVVLVWDQFHRI
LQ86&FDIWHUWKHHQDFWPHQWRI$('3$DSSO\           DGHIHQVHH[SHUWZLWK:LOVRQY*UHHQH)G
WR6NDJJVjVDSSHDORIWKHGLVWULFWFRXUWjVGHQLDORIKLVKDEHDV     WK&LUmUHMHFW>LQJ@WKHQRWLRQWKDWWKHUHLVHLWKHUD
SHWLWLRQZKLFKZDVLQLWLDWHGDIWHU$('3$jVHIIHFWLYHGDWH         SURFHGXUDORUFRQVWLWXWLRQDOUXOHRILQHIIHFWLYHDVVLVWDQFHRI
6HH6ODFNY0F'DQLHO6&WKROGLQJ        DQH[SHUWZLWQHVVl,QWKLVFDVHWKHUHLVQRQHHGWRJRVRIDU
WKDWZKHQDKDEHDVSHWLWLRQHUVHHNVWRLQLWLDWHDQDSSHDORIWKH
GLVPLVVDO RIKLVSHWLWLRQDIWHU$('3$jVHIIHFWLYHGDWHWKH
ULJKWWRDSSHDOLVJRYHUQHGE\WKH&2$UHTXLUHPHQWVIRXQGLQ            
FUHJDUGOHVVRIZKHWKHUWKHKDEHDVSHWLWLRQZDVILOHG           :H QRWH KRZHYHU sXGJH 0XUQDJKDQjV GLVVHQW LQ 5DPGDVV Y
                                                                    $QJHORQH   )G   Q WK &LU  LQ ZKLFK KH FKDVWLVHG
LQWKHGLVWULFWFRXUWEHIRUH$('3$jVHIIHFWLYHGDWH              WKH PDMRULW\jV RSLQLRQ QRWLQJ WKDW $NH FOHDUO\ mUHTXLUHV PRUH WKDQ MXVW D
                                                                    ZDUP ERG\ ZLWK D SUHIL[ DWWDFKHG WR KLV QDPH    l
   6NDJJVY3DUNHU                                1R     1R                               6NDJJVY3DUNHU         

HVVHQWLDOO\QRPLWLJDWLQJHYLGHQFHDWDOOHVSHFLDOO\RQWKHRQH       :HUHYLHZWKHGLVWULFWFRXUWjVGHQLDORIDSHWLWLRQIRUZULW
WRSLF ZKLFK PD\ KDYH FRQYLQFHG WKH MXU\ WKDW D GHDWK        RIKDEHDVFRUSXVGHQRYR6HH0F4XHHQY6FURJJ\)G
VHQWHQFHZDVQRWMXVWLILHG6NDJJVjVPLOGPHQWDOUHWDUGDWLRQ        WK&LU$OWKRXJKWKLVVWDQGDUGDSSOLHVWR
DQGKLVGLPLQLVKHGPHQWDOFDSDFLW\                                TXHVWLRQVRIIHGHUDOFRQVWLWXWLRQDOODZILQGLQJVRIIDFWPDGH
                                                                     E\WKHGLVWULFWFRXUWDUHUHYLHZHGIRUFOHDUHUURU6HHLG:H
  7KH 6XSUHPH &RXUW KDV FRQVLGHUHG WKH SLYRWDO UROH WKDW     PD\LVVXHDZULWRIKDEHDVFRUSXVLIWKHVWDWHFRXUWSURFHHGLQJ
SV\FKLDWU\ KDV FRPH WR SOD\ LQ FULPLQDO SURFHHGLQJV          ZDV IXQGDPHQWDOO\ XQIDLU DV D UHVXOW RI D YLRODWLRQ RI WKH
DFNQRZOHGJLQJ WKH LPSRUWDQFH DQG SRZHU RI H[SHUW               &RQVWLWXWLRQ ODZV RU WUHDWLHV RI WKH 8QLWHG 6WDWHV  6HH
WHVWLPRQ\                                                         (VWHOOHY0F*XLUH86)LQGLQJVRI
                                                                     IDFWDQGGHWHUPLQDWLRQVUHJDUGLQJWKHFUHGLELOLW\RIZLWQHVVHV
  >:@KHQ WKH 6WDWH KDV PDGH WKH GHIHQGDQWjV PHQWDO            PDGHE\WKHVWDWHFRXUWVDUHSUHVXPHGWREHFRUUHFW6HH
  FRQGLWLRQUHOHYDQWWRKLVFULPLQDOFXOSDELOLW\DQGWRWKH          86&G7KRPSVRQY.HRKDQH86
  SXQLVKPHQW KH PLJKW VXIIHU WKH DVVLVWDQFH RI D             7KLVSUHVXPSWLRQRIFRUUHFWQHVVKRZHYHU
  SV\FKLDWULVWPD\ZHOOEHFUXFLDOWRWKHGHIHQGDQWjVDELOLW\        DSSOLHV RQO\ WR EDVLF SULPDU\ IDFWV DQG QRW WR PL[HG
  WRPDUVKDOKLVGHIHQVH,QWKLVUROHSV\FKLDWULVWVJDWKHU        TXHVWLRQVRIODZDQGIDFWZKLFKDUHUHYLHZHGGHQRYR6HH
  IDFWVWKURXJKSURIHVVLRQDOH[DPLQDWLRQLQWHUYLHZVDQG           0F4XHHQ)GDW
  HOVHZKHUH WKDW WKH\ ZLOO VKDUH ZLWK WKH MXGJH RU MXU\
  WKH\DQDO\]HWKHLQIRUPDWLRQJDWKHUHGDQGIURPLWGUDZ                            %&HUWLILFDWHRI$SSHDODELOLW\
  SODXVLEOH FRQFOXVLRQV DERXW WKH GHIHQGDQWjV PHQWDO
  FRQGLWLRQ DQG DERXW WKH HIIHFWV RI DQ\ GLVRUGHU RQ           +HUH WKH GLVWULFW FRXUW LVVXHG D FHUWLILFDWH RI SUREDEOH
  EHKDYLRU DQG WKH\ RIIHU RSLQLRQV DERXW KRZ WKH             FDXVHVWDWLQJRQO\WKDWm>W@KH&RXUWJUDQWV3HWLWLRQHUOHDYHWR
  GHIHQGDQWjV PHQWDO FRQGLWLRQ PLJKW KDYH DIIHFWHG KLV         DSSHDOE\LVVXLQJDFHUWLILFDWHRISUREDEOHFDXVHSXUVXDQW
  EHKDYLRU DW WKH WLPH LQ TXHVWLRQ  7KH\ NQRZ WKH          WR86&l$VSUHYLRXVO\VWDWHGKRZHYHU
  SUREDWLYH TXHVWLRQV WR DVN RI WKH RSSRVLQJ SDUW\jV          ZH PXVW DSSO\ WKH &2$ UHTXLUHPHQWV IRXQG LQ WKH SRVW
  SV\FKLDWULVWVDQGKRZWRLQWHUSUHWWKHLUDQVZHUV8QOLNH          $('3$YHUVLRQRIEHFDXVH6NDJJVILOHGKLVQRWLFHRI
  OD\ZLWQHVVHVZKRFDQPHUHO\GHVFULEHV\PSWRPVWKH\               DSSHDODIWHUWKHHIIHFWLYHGDWHRI$('3$6HH6ODFN6
  EHOLHYHPLJKWEHUHOHYDQWWRWKHGHIHQGDQWjVPHQWDOVWDWH         &WDW3XUVXDQWWRSRVW$('3$FD&2$PD\
  SV\FKLDWULVWV FDQ LGHQWLI\ WKH mHOXVLYH DQG RIWHQ            LVVXH RQO\ XSRQ D mVXEVWDQWLDO VKRZLQJ RI WKH GHQLDO RI D
  GHFHSWLYHlV\PSWRPVRILQVDQLW\DQGWHOOWKHMXU\ZK\             FRQVWLWXWLRQDOULJKWl)XUWKHUFUHTXLUHVWKH&2$WR
  WKHLUREVHUYDWLRQVDUHUHOHYDQW)XUWKHUZKHUHSHUPLWWHG         mLQGLFDWHZKLFKVSHFLILFLVVXHRULVVXHVVDWLVI\WKHVKRZLQJ
  E\HYLGHQWLDU\UXOHVSV\FKLDWULVWVFDQWUDQVODWHDPHGLFDO        UHTXLUHGl  ,Q WKH SUHVHQW FDVH WKH GLVWULFW FRXUW GLG QRW
  GLDJQRVLVLQWRODQJXDJHWKDWZLOODVVLVWWKHWULHURIIDFW        VSHFLI\WKHSDUWLFXODULVVXHVRULVVXHWKDWVDWLVI\WKHF
  DQGWKHUHIRUHRIIHUHYLGHQFHLQDIRUPWKDWKDVPHDQLQJ            VWDQGDUGEXWLQVWHDGLVVXHGDEODQNHWFHUWLILFDWHRISUREDEOH
  IRU WKH WDVN DW KDQG  7KURXJK WKLV SURFHVV RI            FDXVH
  LQYHVWLJDWLRQLQWHUSUHWDWLRQDQGWHVWLPRQ\SV\FKLDWULVWV
  LGHDOO\DVVLVWOD\MXURUVZKRJHQHUDOO\KDYHQRWUDLQLQJ            :H GHFOLQH WR DGGUHVV WKH TXHVWLRQ RI ZKHWKHU D &2$
  LQSV\FKLDWULFPDWWHUVWRPDNHDVHQVLEOHDQGHGXFDWHG            VKRXOGKDYHLQIDFWLVVXHGIRUHDFKDQGHYHU\JURXQGUDLVHG
  GHWHUPLQDWLRQ DERXW WKH PHQWDO FRQGLWLRQ RI WKH              E\6NDJJVLQKLVKDEHDVSHWLWLRQ$VZHVWDWHGDWWKHRXWVHW
  GHIHQGDQWDWWKHWLPHRIWKHRIIHQVH                              ZH ILQG WKDW RQO\ RQH LVVXH UDLVHG E\ 6NDJJV ZDUUDQWV RXU
                                                                     GLVFXVVLRQ  ZKHWKHU 6NDJJV ZDV GHQLHG KLV 6L[WK
      6NDJJVY3DUNHU                             1R      1R                                6NDJJVY3DUNHU        

$PHQGPHQWULJKW WR HIIHFWLYHDVVLVWDQFHRIFRXQVHO:LWK            :H KDYH KHOG WKDW DW VHQWHQFLQJ D GHIHQGDQW PXVW EH
UHVSHFWWRWKLVLVVXHZHFRQFOXGHWKDWWKHUHTXLUHPHQWVVHW         DIIRUGHG WKH RSSRUWXQLW\ WR SXW IRUWK UHOHYDQW PLWLJDWLQJ
IRUWK LQ SRVW$('3$  F KDYH EHHQ PHW EHFDXVH         HYLGHQFH  6HH $XVWLQ  )G DW  *OHQQ  )G DW
6NDJJVjV 6L[WK $PHQGPHQW FODLPV PDNH D mVXEVWDQWLDO            ,Q$XVWLQZHQRWHG
VKRZLQJRIWKHGHQLDORIDFRQVWLWXWLRQDOULJKWl86&
FVHH0DFNH\Y'XWWRQ)GWK             7KH(LJKWK$PHQGPHQWUHTXLUHVDMXU\WRFRQVLGHUWKH
&LU  KROGLQJ WKDW ZKHQ D GLVWULFW FRXUW JUDQWV D       FLUFXPVWDQFHV RI WKH FULPH DQG WKH GHIHQGDQWjV
FHUWLILFDWHRISUREDEOHFDXVHLQVWHDGRID&2$DUHYLHZLQJ            EDFNJURXQGDQGFKDUDFWHUGXULQJWKHVHQWHQFLQJSKDVHRI
FRXUW PD\ FRQVLGHU DQ LVVXH UDLVHG VR ORQJ DV WKH LVVXH      D FDSLWDO WULDO  7KH &RQVWLWXWLRQ DOVR UHTXLUHV GHIHQVH
VDWLVILHV WKH VWDWXWRU\ VWDQGDUGV VHW IRUWK LQ  F     FRXQVHO WR UHDVRQDEO\ LQYHVWLJDWH D GHIHQGDQWjV
$FFRUGLQJO\ 6NDJJVjV FODLP RI LQHIIHFWLYH DVVLVWDQFH RI         EDFNJURXQG DQG SUHVHQW LW WR WKH MXU\  )DLOXUH WR
FRXQVHOLVSURSHUO\EHIRUHWKLVFRXUW                                 LQYHVWLJDWHRUSUHVHQWPLWLJDWLQJHYLGHQFHDWVHQWHQFLQJ
                                                                       PD\FRQVWLWXWHLQHIIHFWLYHDVVLVWDQFHRIFRXQVHO
             &,QHIIHFWLYH$VVLVWDQFHRI&RXQVHO
                                                                     FLWDWLRQV RPLWWHG  )XUWKHUPRUH DOWKRXJK .HQWXFN\ ODZ
  7KH IDPLOLDU VWDQGDUG E\ ZKLFK D 6L[WK $PHQGPHQW            SURYLGHVDOLVWRIVWDWXWRU\PLWLJDWLQJIDFWRUVVHH.< 5(9
LQHIIHFWLYHDVVLVWDQFHRIFRXQVHOFODLPLVUHYLHZHGLVVHWIRUWK     67 $11 DFULPLQDOGHIHQGDQWLVQRWOLPLWHGWR
LQ6WULFNODQGY:DVKLQJWRQ86                    SUHVHQWLQJ HYLGHQFH RI RQO\ WKHVH VWDWXWRU\ FLUFXPVWDQFHV
                                                                     6HH3HQU\86DWm>7@KH(LJKWKDQG)RXUWHHQWK
    )LUVW WKH GHIHQGDQW PXVW VKRZ WKDW FRXQVHOjV              $PHQGPHQWV UHTXLUH WKDW WKH VHQWHQFHU µQRW EH SUHFOXGHG
    SHUIRUPDQFHZDVGHILFLHQW7KLVUHTXLUHVVKRZLQJWKDW           IURP FRQVLGHULQJ DV D PLWLJDWLQJ IDFWRU DQ\ DVSHFW RI D
    FRXQVHO PDGH HUURUV VR VHULRXV WKDW FRXQVHO ZDV QRW      GHIHQGDQWjVFKDUDFWHURUUHFRUGDQGDQ\RIWKHFLUFXPVWDQFHV
    IXQFWLRQLQJDVWKHmFRXQVHOlJXDUDQWHHGWKHGHIHQGDQWE\         RI WKH RIIHQVH WKDW WKH GHIHQGDQW SURIIHUV DV D EDVLV IRU D
    WKH6L[WK$PHQGPHQW6HFRQGWKHGHIHQGDQWPXVWVKRZ             VHQWHQFHOHVVWKDQGHDWKjlTXRWLQJ/RFNHWWY2KLR86
    WKDW WKH GHILFLHQW SHUIRUPDQFH SUHMXGLFHG WKH GHIHQVH     
    7KLV UHTXLUHV VKRZLQJ WKDW FRXQVHOjV HUURUV ZHUH VR
    VHULRXVDVWRGHSULYHWKHGHIHQGDQWRIDIDLUWULDODWULDO        &RQVLGHULQJWKHIRUHJRLQJZHQRZPXVWHYDOXDWHZKHWKHU
    ZKRVHUHVXOWLVUHOLDEOH                                        GHIHQVHFRXQVHOjVIDLOXUHVSUHMXGLFHG6NDJJVLQOLJKWRIWKH
                                                                     SXUSRVH RI D FDSLWDO VHQWHQFLQJ KHDULQJ  $W WKH VHFRQG
,GDW,QRWKHUZRUGVLQRUGHUWRSUHYDLORQDFODLPRI       SHQDOW\ KHDULQJ WKH WULDO FRXUW LQVWUXFWHG WKH MXU\ RQ WZR
LQHIIHFWLYHUHSUHVHQWDWLRQWKHSHWLWLRQHUPXVWHVWDEOLVKWKDW      VWDWXWRU\ PLWLJDWLQJ IDFWRUV   H[WUHPH HPRWLRQDO
LQOLJKWRIDOOWKHFLUFXPVWDQFHVWULDOFRXQVHOjVSHUIRUPDQFH       GLVWXUEDQFHDQGZKHWKHU6NDJJVjVDELOLW\WRDSSUHFLDWHWKH
IHOOEHORZDQREMHFWLYHVWDQGDUGRIUHDVRQDEOHQHVVDQGWKDW          FULPLQDOLW\RIKLVFRQGXFWRUWRFRQIRUPKLVFRQGXFWWRWKH
WKHUHVXOWLQJSUHMXGLFHGHSULYHGKLPRIDIDLUWULDO6HHsRQHV     UHTXLUHPHQWVRIODZZDVLPSDLUHGEHFDXVHRIPHQWDOGLVHDVH
Y8QLWHG6WDWHV)GWK&LUFLWLQJ          RUGHIHFW7KHRQO\PLWLJDWLQJHYLGHQFHUHODWLQJWR6NDJJVjV
6WULFNODQG Y :DVKLQJWRQ  86             PHQWDOVWDWHSUHVHQWHGE\GHIHQVHFRXQVHOZDVWKHWHVWLPRQ\
$OWKRXJK ZH UHYLHZ WKH GLVWULFW FRXUWjV ILQGLQJV RI IDFW     RI %UHVOHUnD IUDXGXOHQW mH[SHUWl ZKRP FRXQVHO KDG QRW
SHUWLQHQWWRWKLVTXHVWLRQIRUFOHDUHUURUWKHSHUIRUPDQFHDQG      LQYHVWLJDWHGEXWFKRVHWRXVHGHVSLWHWKHPRFNHU\KHFUHDWHG
SUHMXGLFHFRPSRQHQWVRIWKH6WULFNODQGWHVWDUHFRQVLGHUHG           WKURXJKKLVWHVWLPRQ\DWWKHJXLOWSKDVH&RXQVHOjVGHILFLHQW
PL[HGTXHVWLRQVRIODZDQGIDFWDQGDUHWKXVVXEMHFWWRGH          SHUIRUPDQFH DW VHQWHQFLQJ UHVXOWHG LQ WKH SUHVHQWDWLRQ RI
    6NDJJVY3DUNHU                              1R       1R                                          6NDJJVY3DUNHU            

&LU  m7KH TXHVWLRQ IRU UHYLHZLQJ FRXUWV LV ZKHWKHU     QRYRUHYLHZ6HH6LPVY/LYHVD\)GWK
FRXQVHO
VHUURUVKDYHOLNHO\XQGHUPLQHGWKHUHOLDELOLW\RIDQG       &LUFLWLQJ6WULFNODQG86DW
FRQILGHQFHLQWKHUHVXOWl$VWKH6XSUHPH&RXUWH[SODLQHG
LQ6WULFNODQGm:KHQDGHIHQGDQWFKDOOHQJHVDGHDWKVHQWHQFH             :HEHOLHYHWKDW6NDJJVFDQQRWPHHWWKH6WULFNODQGVWDQGDUG
WKHTXHVWLRQLVZKHWKHUWKHUHLVDUHDVRQDEOHSUREDELOLW\       ZLWKUHVSHFWWRFRXQVHOjVSHUIRUPDQFHDWWKHJXLOWSKDVHRIWKH
WKDWDEVHQWWKHHUURUVWKHVHQWHQFHUnLQFOXGLQJDQDSSHOODWH         WULDOKRZHYHUZHILQGWKDWFRXQVHOjVYHU\VLJQLILFDQWHUURUV
FRXUW WR WKH H[WHQW LW LQGHSHQGHQWO\ UHZHLJKV WKH             DWWKHSHQDOW\SKDVHRIWKHWULDOnSDUWLFXODUO\WKHIDLOXUHWR
HYLGHQFHnZRXOG KDYH FRQFOXGHG WKDW WKH EDODQFH RI               LQYHVWLJDWHDQGSUHVHQWPHDQLQJIXOPLWLJDWLQJHYLGHQFHDQG
DJJUDYDWLQJ DQG PLWLJDWLQJ FLUFXPVWDQFHV GLG QRW ZDUUDQW        WKHLU GHFLVLRQ WR XVH DQ LQFRPSHWHQW DQG IUDXGXOHQW
GHDWKl  6WULFNODQG  86 DW   7KH &RXUW UHFHQWO\   mSV\FKRORJLVWlDVWKHFHQWUDOPLWLJDWLRQZLWQHVVnUHQGHUHG
HPSKDVL]HG WKDW D SHWLWLRQHU QHHG QRW SURYH E\ D              FRXQVHOFRQVWLWXWLRQDOO\LQHIIHFWLYHVXFKWKDWRXUFRQILGHQFH
SUHSRQGHUDQFHRIWKHHYLGHQFHWKDWWKHUHVXOWZRXOGKDYHEHHQ         LQWKHRXWFRPHRIWKHSHQDOW\SKDVHRI6NDJJVjVWULDOKDVEHHQ
GLIIHUHQWEXWPHUHO\WKDWWKHUHLVDUHDVRQDEOHSUREDELOLW\WKDW     QXOOLILHG
WKHUHVXOWZRXOGKDYHEHHQGLIIHUHQW6HH:LOOLDPVY7D\ORU
6&W                                                                    *XLOW3KDVH

   ,Q*UHJJY*HRUJLD86ZKLFKUHLQVWDWHG           %HIRUHWULDO6NDJJVjVFRXQVHOLQIRUPHGWKHFRXUWWKDWKH
WKH GHDWK SHQDOW\ WKH 6XSUHPH &RXUW GLVFXVVHG WKH             ZLVKHG WR UDLVH D PHQWDO LOOQHVV GHIHQVH DW WULDO  %HFDXVH
LPSRUWDQFHRIDFDVHE\FDVHGHWHUPLQDWLRQDWWKHVHQWHQFLQJ          6NDJJVZDVDQLQGLJHQWGHIHQGDQWZLWKDSSRLQWHGFRXQVHOKH
KHDULQJ  m:H KDYH ORQJ UHFRJQL]HG WKDW µ>I@RU WKH            KDGWKHULJKWWRDSV\FKLDWULFH[SHUWXQGHU$NHY2NODKRPD
GHWHUPLQDWLRQRIVHQWHQFHVMXVWLFHJHQHUDOO\UHTXLUHVWKDW     7KHFRXUWDSSRLQWHGWZRSV\FKLDWULFH[SHUWVWRDVVLVW6NDJJV
WKHUHEHWDNHQLQWRDFFRXQWWKHFLUFXPVWDQFHVRIWKHRIIHQVH
WRJHWKHUZLWKWKHFKDUDFWHUDQGSURSHQVLWLHVRIWKHRIIHQGHUjl            
,GDWTXRWLQJ3HQQV\OYDQLDH[UHO6XOOLYDQY$VKH              86   ,Q DGGLWLRQ WR KLV FODLPV RI LQHIIHFWLYH
866LQFH*UHJJWKH&RXUWKDVUHDIILUPHG           DVVLVWDQFH RI FRXQVHO 6NDJJV DUJXHV WKDW EHFDXVH %UHVOHU ZDV D IUDXG KH

WKDWVHQWHQFLQJGHWHUPLQDWLRQVPXVWEHPDGHEDVHGXSRQDQ             ZDV GHQLHG DFFHVV WR D FRPSHWHQW SV\FKLDWULVW WR DVVLVW LQ KLV GHIHQVH DQG

H[DPLQDWLRQRIWKHSDUWLFXODUFKDUDFWHULVWLFVRIWKHGHIHQGDQW       WKDW VXFK D GHQLDO YLRODWHG KLV GXH SURFHVV ULJKWV ,Q        $NH
                                                                                                                                   WKH 6XSUHPH
                                                                      &RXUW KHOG mWKDW ZKHQ D GHIHQGDQW GHPRQVWUDWHV WR WKH WULDO MXGJH WKDW KLV
6HH 3HQU\ Y /\QDXJK  86    m>7@KH       VDQLW\ DW WKH WLPH RI WKH RIIHQVH LV WR EH D VLJQLILFDQW IDFWRU DW WKH WULDO WKH
(LJKWK$PHQGPHQWPDQGDWHVDQLQGLYLGXDOL]HGDVVHVVPHQWRI             6WDWH PXVW DW D PLQLPXP DVVXUH WKH GHIHQGDQW DFFHVV WR D FRPSHWHQW

WKHDSSURSULDWHQHVVRIWKHGHDWKSHQDOW\l=DQWY6WHSKHQV        SV\FKLDWULVW ZKR ZLOO FRQGXFW DQ DSSURSULDWH H[DPLQDWLRQ DQG DVVLVW LQ

86UHTXLULQJWKDWRQFHWKHGHIHQGDQW           HYDOXDWLRQ SUHSDUDWLRQ DQG SUHVHQWDWLRQ RI WKH GHIHQVHl          ,G DW 
LVSXWLQWKHFDWHJRU\RISHUVRQVHOLJLEOHIRUWKHGHDWKSHQDOW\          8SRQ FDUHIXO H[DPLQDWLRQ RI WKH UHFRUG WKH SDUWLHVj EULHIV DQG
                                                                      LQIRUPDWLRQ DGGXFHG DW RUDO DUJXPHQW ZH ILQG QRWKLQJ WR LQGLFDWH WKDW WKH
WKHMXU\PXVWPDNHDQLQGLYLGXDOL]HGGHWHUPLQDWLRQmRQWKH            &RPPRQZHDOWK       GHQLHG   6NDJJV    DFFHVV    WR    D   FRPSHWHQW   SV\FKLDWULF
EDVLVRIWKHFKDUDFWHURIWKHLQGLYLGXDODQGWKHFLUFXPVWDQFHV        HYDOXDWLRQ   7KH WULDO FRXUW JUDQWHG 6NDJJVjV PRWLRQ IRU DSSRLQWPHQW RI

RIWKHFULPHl                                                     DQ LQGHSHQGHQW SV\FKLDWULVW WR HYDOXDWH 6NDJJV DQG DSSURYHG SD\PHQW IRU
                                                                      KLV RU KHU VHUYLFHV ,W ZDV GHIHQVH FRXQVHO ZKR FKRVH %UHVOHU DQG GHVSLWH
                                                                      WKH IDFW WKDW GHIHQVH FRXQVHO PD\ KDYH FKRVHQ VRPHRQH LQFRPSHWHQW RXU
                                                                      FRQFHUQ XQGHU   $NH LV ZLWK WKH DFWLRQV RI WKH &RPPRQZHDOWK DQG ZKHWKHU
                                                                      6NDJJV KDG mDFFHVV WR D FRPSHWHQW SV\FKLDWULVWl LQ SUHSDUDWLRQ RI KLV
                                                                      GHIHQVH   :H ILQG WKDW KH GLG     7KH IDFW WKDW GHIHQVH FRXQVHO IDLOHG WR
                                                                      HQJDJH D FRPSHWHQW SV\FKLDWULVW WR WHVWLI\ RQ 6NDJJVjV EHKDOI KRZHYHU
                                                                      LV VLJQLILFDQW WR 6NDJJVjV LQHIIHFWLYH DVVLVWDQFH RI FRXQVHO FODLP
    6NDJJVY3DUNHU                              1R      1R                                 6NDJJVY3DUNHU       

EXWERWKH[SHUWVUHIXVHGWRVHUYH7KHFRXUWWKHQRUGHUHGWKH         &RPPRQZHDOWK $QG , EHOLHYH WKH 6HFUHWDU\ RI WKH
.&3& WR HYDOXDWH 6NDJJV EXW 6NDJJVjV FRXQVHO LQVWHDG                         ,QWHULRU \RX VDLG VLPLODUO\ 0U
UHTXHVWHGIXQGVIRUDQLQGHSHQGHQWH[SHUW8SRQDSSURYDOE\                         :DWWV"
WKHFRXUWFRXQVHOWKHUHDIWHUVHFXUHGWKHVHUYLFHVRI%UHVOHU
'XULQJ WKH JXLOW SKDVH RI 6NDJJVjV WULDO %UHVOHU IDOVHO\      'HVSLWHDFNQRZOHGJLQJWKDW%UHVOHUZDVQRWDFRPSHWHQW
WHVWLILHG WKDW KH ZDV D OLFHQVHG FOLQLFDO DQG IRUHQVLF       ZLWQHVVDQGLQIDFWPDGHDPRFNHU\RIWKHILUVWWULDOGHIHQVH
SV\FKRORJLVW+HDOVRIDOVHO\FODLPHGWRKDYHD%DFKHORUjV          FRXQVHO QHYHUWKHOHVV FDOOHG KLP WR WHVWLI\ DW WKH VHFRQG
GHJUHHD0DVWHUjVGHJUHHDQG'RFWRUDWHGHJUHHVIURP6DQ            SHQDOW\ SKDVH SULPDULO\ EHFDXVH FRXQVHO ZDLWHG XQWLO WKH
'LHJR6WDWH8QLYHUVLW\DQGWKH8QLYHUVLW\RI&DOLIRUQLDDQG         HOHYHQWKKRXUWRSUHSDUHIRUWKHSHQDOW\SKDVHDQGWROLQHXS
WREHOLFHQVHGLQQXPHURXVVWDWHVLQFOXGLQJ.HQWXFN\             DSV\FKLDWULFH[SHUWWRWHVWLI\RQ6NDJJVjVEHKDOI&RXQVHOjV
                                                                     GHFLVLRQ WR FDOO %UHVOHU DW WKH UHWULDO RI WKH SHQDOW\ SKDVH
   6NDJJV DVVHUWV WKDW WULDO FRXQVHO 'RQQD %R\FH DQG sRH     GHVSLWHWKHLUEHOLHIWKDW%UHVOHUjVWHVWLPRQ\FRXOGUHDOLVWLFDOO\
.LUZLQZHUHLQHIIHFWLYHGXULQJWKHJXLOWSKDVHRIKLVWULDOE\       EH PRUH KDUPIXO WKDQ KHOSIXO VLPSO\ EHFDXVH FRXQVHO
IDLOLQJWRLQYHVWLJDWH%UHVOHUjVFUHGHQWLDOVRUEDFNJURXQGDQG       EHOLHYHGLWZRXOGQRWEHZRUWKWKHLUWLPHWRUHTXHVWDGGLWLRQDO
SUHVHQWLQJ %UHVOHU DV DQ H[SHUW GHIHQVH ZLWQHVV  $W WKH    PRQH\ IURP WKH FRXUW FDQQRW EH GHHPHG WR KDYH EHHQ D
GLVWULFWFRXUWjVHYLGHQWLDU\KHDULQJFRQGXFWHGLQFRQQHFWLRQ         UHDVRQDEOH H[HUFLVH RI SURIHVVLRQDO MXGJPHQW  %HFDXVH
ZLWK6NDJJVjVLQHIIHFWLYHDVVLVWDQFHRIFRXQVHOFODLP%R\FH         GHIHQVH FRXQVHO IDLOHG WR LQWURGXFH RWKHU FRPSHWHQW
WHVWLILHGWKDWVKHDQGFRFRXQVHO.LUZLQKDYLQJREMHFWHGWR         PLWLJDWLQJ HYLGHQFH WKH\ HVVHQWLDOO\ IDLOHG WR SXW RQ DQ\
6NDJJVEHLQJH[DPLQHGE\DVWDWHSV\FKLDWULVWKDGDGLIILFXOW       PLWLJDWLQJ HYLGHQFH DW DOO  7KXV ZH KROG WKDW FRXQVHOjV
WLPH ILQGLQJ D SV\FKRORJLVW ZKR FRXOG SHUIRUP D WLPHO\      GHFLVLRQWRSUHVHQW%UHVOHUjVWHVWLPRQ\DVFUXFLDOPLWLJDWLQJ
LQGHSHQGHQW SV\FKLDWULF HYDOXDWLRQ RI 6NDJJV  'XULQJ WKH     HYLGHQFH DW WKH SHQDOW\ SKDVH RI WKH WULDO KDYLQJ KDG WKH
KHDULQJ%R\FHZDVDVNHGWRWHOOWKHFRXUWZKDWLQYHVWLJDWLRQ        DGYDQWDJH RI ZLWQHVVLQJ %UHVOHUjV SUHYLRXV EL]DUUH
VKHFRQGXFWHGLQWR%UHVOHUjVEDFNJURXQGDQGTXDOLILFDWLRQV           SHUIRUPDQFH DQG PRUH LPSRUWDQWO\ FRXQVHOjV FRPSOHWH
EHIRUHXWLOL]LQJKLPDVDZLWQHVVVKHUHVSRQGHGm$EVROXWHO\        IDLOXUH WR SUHVHQW RWKHU PLWLJDWLQJ HYLGHQFH RQ 6NDJJVjV
QRQHl%R\FHWHVWLILHGKRZHYHUWKDWVKHKDGXVHG%UHVOHULQ       EHKDOI IHOO EHORZ DQ REMHFWLYH VWDQGDUG RI UHDVRQDEOHQHVV
DQRWKHUWULDOFRQGXFWHGLQWKUHH\HDUVEHIRUH6NDJJVjV         6HH6WULFNODQG86DW
WULDO%R\FHWHVWLILHGm+HGLGILQH%DVLFDOO\ZHZHUH
SUHVHQWLQJDQLQVDQLW\GHIHQVHDQGKHGLGRND\,PHDQ                                  E3UHMXGLFH
KHZDVRND\+HZDVQjWJUHDW,PHDQKHZDVWKHSHUVRQ
, ZHQW WR ZKHQ , FRXOGQjW ILQG DQ\ERG\ HOVH EXW KH ZDV     7RHVWDEOLVKWKHSUHMXGLFHSURQJRIDQLQHIIHFWLYHDVVLVWDQFH
RND\l  %R\FH DOVR H[SODLQHG WKDW WZR DWWRUQH\V VKH NQHZ    FODLP 6NDJJV mPXVW VKRZ WKDW WKHUH LV D UHDVRQDEOH
IURP WKH .HQWXFN\ 'HSDUWPHQW RI 3XEOLF $GYRFDF\                SUREDELOLW\WKDWEXWIRUFRXQVHOjVXQSURIHVVLRQDOHUURUVWKH
m.'3$ln$VVLVWDQW 3XEOLF $GYRFDWH %LOO 5DGLJDQ DQG             UHVXOW RI WKH SURFHHGLQJ ZRXOG KDYH EHHQ GLIIHUHQW  $
*HQHUDO&RXQVHO9LQFH$SULOHnKDGUHFRPPHQGHG%UHVOHUWR              UHDVRQDEOHSUREDELOLW\LVDSUREDELOLW\VXIILFLHQWWRXQGHUPLQH
KHU)LQDOO\%R\FHUHFDOOHGWKDWDWWKHWLPHVKHKLUHG%UHVOHU     FRQILGHQFHLQWKHRXWFRPHl6WULFNODQG86DWVHH
IRUWKHWULDOKHKDGEHHQZRUNLQJDVDSV\FKRORJLVWLQ         DOVR/RFNKDUWY)UHWZHOO86m>7@KH
(DVWHUQ .HQWXFN\ IRU D mFRPSFDUH W\SH IDFLOLW\l  .LUZLQ    µSUHMXGLFHjFRPSRQHQWRIWKH6WULFNODQGWHVWIRFXVHVRQ
DOVRWHVWLILHGDWWKHHYLGHQWLDU\KHDULQJWKDWKHKDGFRQGXFWHG      WKHTXHVWLRQZKHWKHUFRXQVHOjVGHILFLHQWSHUIRUPDQFHUHQGHUV
QRLQYHVWLJDWLRQLQWR%UHVOHUjVTXDOLILFDWLRQV.LUZLQVWDWHG      WKH UHVXOW RI WKH WULDO XQUHOLDEOH RU WKH SURFHHGLQJ
KRZHYHUWKDWKHKDGEHHQIDPLOLDUZLWK%UHVOHUDWWKHWLPHKH       IXQGDPHQWDOO\XQIDLUl :HVWY6HDEROG)GWK
   6NDJJVY3DUNHU                               1R     1R                              6NDJJVY3DUNHU      

      ZLWQHVV  $QG RXU RQO\ UHDVRQ FRXOG EH WKDW ZH       DQG %R\FH GHFLGHG WR XVH %UHVOHU DV DQ H[SHUW ZLWQHVV
      GLGQjW WKLQN WKDW RXU H[SHUW WXUQHG RXW WR EH YHU\   .LUZLQ WHVWLILHG WKDW KH NQHZ WKDW WKH .'3$ KDG D SULRU
      FRPSHWHQWRQWKHVWDQG                                     UHODWLRQVKLSZLWK%UHVOHUDQGKDGXVHGKLPDVDSV\FKLDWULF
                                                                    H[SHUWDQGWKDWKHKLPVHOIKDGPHW%UHVOHUZKLOHZRUNLQJRQ
      6R ZH GHFLGHG ZH ZRXOG DVN WKH MXGJH IRU PRUH        DSUHYLRXVFDSLWDOFDVHLQZKLFK%UHVOHUKDGWHVWLILHGDVDQ
      PRQH\ VR (OOLRWW >VLF@ %UHVOHU FRXOG FRPH EDFN        H[SHUW
      WKLQNLQJ WKDW SUREDEO\ WKH MXGJH ZRXOG GHQ\ WKDW
      %XW KH JUDQWHG LW DQG VR ZH HQGHG XS UHFDOOLQJ         8QGHU6WULFNODQGWKHREMHFWLYHVWDQGDUGRIUHDVRQDEOHQHVV
      >%UHVOHU@IRUWKHUHWULDO                                    LV D KLJKO\ GHIHUHQWLDO VWDQGDUG DQG LQFOXGHV D mD VWURQJ
                                                                    SUHVXPSWLRQ WKDW FRXQVHOjV FRQGXFW IDOOV ZLWKLQ WKH ZLGH
8SRQ%UHVOHUjVFURVVH[DPLQDWLRQGXULQJWKHSHQDOW\SKDVH          UDQJHRIUHDVRQDEOHSURIHVVLRQDODVVLVWDQFHl6WULFNODQG
WKHSURVHFXWLRQTXHVWLRQHGKLPRQVRPHRIWKHPRUHSHFXOLDU         86DW:LWKUHVSHFWWRFRXQVHOjVIDLOXUHWRLQYHVWLJDWH
DVSHFWVRIKLVHDUOLHUWHVWLPRQ\
                                                                      >6@WUDWHJLFFKRLFHVPDGHDIWHUWKRURXJKLQYHVWLJDWLRQRI
  &RPPRQZHDOWK 7KH ODVW WLPH ZH WDONHG ,ZDV                  ODZDQGIDFWVUHOHYDQWWRSODXVLEOHRSWLRQVDUHYLUWXDOO\
                 LQWHUHVWHG WKDW D JUHDW QXPEHU RI               XQFKDOOHQJHDEOH DQG VWUDWHJLF FKRLFHV PDGH DIWHU OHVV
                 IDPRXV SHRSOH \RX WKRXJKW ZHUH                   WKDQFRPSOHWHLQYHVWLJDWLRQDUHUHDVRQDEOHSUHFLVHO\WR
                 SV\FKRWLF JUHDW o JUHDW SHRSOH OLNH            WKHH[WHQWWKDWUHDVRQDEOHSURIHVVLRQDOMXGJPHQWVVXSSRUW
                 (LQVWHLQ                                            WKHOLPLWDWLRQVRQLQYHVWLJDWLRQ,QRWKHUZRUGVFRXQVHO
                                                                      KDVDGXW\WRPDNHUHDVRQDEOHLQYHVWLJDWLRQVRUWRPDNH
  %UHVOHU           , QHYHU VDLG WKDW (LQVWHLQ ZDV              DUHDVRQDEOHGHFLVLRQWKDWPDNHVSDUWLFXODULQYHVWLJDWLRQV
                     SV\FKRWLF                                       XQQHFHVVDU\
  &RPPRQZHDOWK <RX UHPHPEHU ZKDW \RX WROG PH                  ,GDW
                DERXWWKDW"
                                                                       %R\FHDQG.LUZLQORFDWHG%UHVOHUDQGUHWDLQHGKLVVHUYLFHV
  %UHVOHU           , VDLG KH KDG VRPH HFFHQWULFLWLHV  ,   PXFK WKH VDPH ZD\ PDQ\ WULDO DWWRUQH\V REWDLQ DQ H[SHUW
                     VDLGKHKDGVRPHHFFHQWULFLWLHV)LUVW        WKURXJK UHFRPPHQGDWLRQV IURP FROOHDJXHV DQG JHQHUDO
                     RIDOO,ZRXOGQHYHUVD\DQ\RQHZDV           IDPLOLDULW\ZLWKLQWKHOHJDOFRPPXQLW\*LYHQWKHPDJQLWXGH
                     SV\FKRWLF XQOHVV , KDG H[DPLQHG           RIZKDWZDVDWVWDNHDQGWKHFHQWUDOLW\RI6NDJJVjVPHQWDO
                     WKHP,GRQRWPDNHYDOXHMXGJPHQWV          VWDWHWRDOHJLWLPDWHGHIHQVHFRXQVHOVKRXOGKDYHWDNHQPRUH
                                                                    WLPH DQG JLYHQ PRUH WKRXJKW WR WKHLU H[SHUW ZLWQHVV
  &RPPRQZHDOWK <RX REYLRXVO\ KDGQjW KDG DQ                   1RQHWKHOHVVFRQVLGHULQJFRXQVHOjVJHQHUDOIDPLOLDULW\ZLWK
                RSSRUWXQLW\WRH[DPLQH'U(LQVWHLQ"                %UHVOHUDVDQH[SHUW ZLWQHVVDQG%R\FHjVXWLOL]DWLRQRIKLV
                                                                    VHUYLFHVLQWKHSDVWZHKROGWKDWFRXQVHOjVIDLOXUHWRFRQGXFW
  %UHVOHU           ,NQHZ(LQVWHLQSHUVRQDOO\EXW,QHYHU        DIXOOEORZQLQYHVWLJDWLRQLQWR%UHVOHUjVDFDGHPLFKLVWRU\RU
                     H[DPLQHG KLP DQG KH KDG VRPH             WRYHULI\KLVFUHGHQWLDOVDQ\IXUWKHUWKDQKDGEHHQGRQHGLG
                     HFFHQWULFLWLHV                                QRWIDOOEHORZDQREMHFWLYHVWDQGDUGRIUHDVRQDEOHQHVVXQGHU
                                                                    6WULFNODQG'HIHQVHFRXQVHOjVGHFLVLRQWRKLUH%UHVOHUIRUWKH
                                                                    JXLOWSKDVHRIWKHWULDOPD\QRWKDYHEHHQWKHEHVWSRVVLEOH
                                                                    FKRLFH IRU 6NDJJVjV GHIHQVH EXW LQ OLJKW RI DOO WKH
    6NDJJVY3DUNHU                              1R       1R                              6NDJJVY3DUNHU       

FLUFXPVWDQFHVZHFDQQRWVD\WKDWWKHGHFLVLRQZDVDQmHUURU>@        LQHIIHFWLYHDVVLVWDQFHZKHQPLWLJDWLQJLQIRUPDWLRQZDVQRW
VRVHULRXVWKDWFRXQVHOZDVQRWIXQFWLRQLQJDVWKHµFRXQVHOj          SUHVHQWHG WR WKH MXU\ DW VHQWHQFLQJ EHFDXVH FRXQVHO PDGH
JXDUDQWHHGWKHGHIHQGDQWE\WKH6L[WK$PHQGPHQWl,GDW             YLUWXDOO\ QR DWWHPSW WR SUHSDUH IRU VHQWHQFLQJ SKDVH  ,Q
                                                                  $XVWLQZHUHFRJQL]HGWKDWWKHIDLOXUHWRSUHVHQWPLWLJDWLQJ
                                                                      HYLGHQFH ZKHQ LW ZDV DYDLODEOH FRXOG QRW EH FRQVLGHUHG D
                       3HQDOW\3KDVH                              VWUDWHJLFGHFLVLRQ EXWUDWKHUDQmDEGLFDWLRQRIDGYRFDF\l
                                                                      )GDW6XFKDQDEGLFDWLRQRFFXUUHGLQWKHSUHVHQW
                            D&DXVH                                  FDVH
  6NDJJVDOVRDUJXHVLQKLVKDEHDVSHWLWLRQWKDWKHUHFHLYHG             $W WKH HYLGHQWLDU\ KHDULQJ %R\FH ZDV TXHVWLRQHG DERXW
LQHIIHFWLYHDVVLVWDQFHRIFRXQVHODWWKHSHQDOW\SKDVHEDVHGRQ       %UHVOHUjVWHVWLPRQ\GXULQJWKHJXLOWSKDVHRIWKHWULDODQGKHU
FRXQVHOjVIDLOXUHWRSUHVHQWPLWLJDWLQJHYLGHQFHLQSDUWLFXODU      LQLWLDOGHFLVLRQQRWWRXVH%UHVOHUGXULQJWKHSHQDOW\SKDVH
FRXQVHOjVIDLOXUHWRSUHVHQWWKHMXU\ZLWKDUHDOLVWLFYLHZRI        VWDWLQJ
6NDJJVjV PHQWDO VWDWXV  $OWKRXJK ZH ILQG WKDW LW ZDV QRW
XQUHDVRQDEOHIRUFRXQVHOWRKDYHXVHG%UHVOHUGXULQJWKHJXLOW          $ >+@HZDVDZIXO+HZDVLQFRKHUHQW+HZDVWDONLQJ
SKDVHRIWKHWULDOFRXQVHOjVGHFLVLRQWRXVH%UHVOHUDJDLQDW             DERXWWKLQJVWKDWGLGQjWPDNHVHQVH<RXFRXOGQjW
WKH SHQDOW\ SKDVH SUHVHQWV XV ZLWK DQ HQWLUHO\ GLIIHUHQW           VWRSKLP<RXFRXOGQjWUHHOKLPEDFNLQ3HRSOHLQ
TXHVWLRQ                                                                 WKHDXGLHQFHZHUHODXJKLQJDWKLP
   $IWHU KDYLQJ REVHUYHG %UHVOHUjV EL]DUUH DQG HFFHQWULF               6RsRH>.LUZLQ@DQG,WDONHGDIWHUZDUGV2XULQLWLDO
WHVWLPRQ\ GLG FRXQVHO KDYH D GXW\ WR ILQG D GLIIHUHQW              LQWHQWKDGEHHQWRUHFDOOKLPDWWKHSHQDOW\SKDVH
SV\FKLDWULFH[SHUWIRUWKHUHWULDORIWKHSHQDOW\SKDVH"3XW                :HGLVFXVVHGLWDQGGHFLGHGZHZRXOGEHLQEHWWHU
GLIIHUHQWO\ GLG FRXQVHO KDYH D UHVSRQVLELOLW\ WR SUHVHQW             VKDSHQRWFDOOLQJKLPWKDQZHZRXOGEHLIZHFDOOHG
PHDQLQJIXOPLWLJDWLQJHYLGHQFH":HWKLQNWKDWWKH\GLG:H                 KLP6RZHGLGQRWUHFDOOKLPDWWKHSHQDOW\SKDVH
ILQGWKDW6NDJJVjVFRXQVHODFWHGEHORZDQREMHFWLYHVWDQGDUG
RI UHDVRQDEOHQHVV DW VHQWHQFLQJ HVVHQWLDOO\ SURYLGLQJ QR       %R\FHWKHQZDVTXHVWLRQHGDERXWZK\VKHKDGFKDQJHGKHU
OHJLWLPDWHPLWLJDWLQJHYLGHQFHRQ6NDJJVjVEHKDOIDQGWKDW           PLQG DQG GHFLGHG WR FDOO %UHVOHU DW WKH VHFRQG SHQDOW\
WKLV IDLOXUH VHYHUHO\ XQGHUPLQHV RXU FRQILGHQFH LQ WKH MXVW   KHDULQJ
RXWFRPHRIWKLVSURFHHGLQJ
                                                                        4 %HWZHHQWKHPLVWULDODQGWKHUHWULDORIWKHSHQDOW\
  )DLOXUH WR SUHVHQW PLWLJDWLQJ HYLGHQFH DW VHQWHQFLQJ               SKDVHZKDWHIIRUWVRUGLVFXVVLRQVZHUHKDGDVIDUDV
FRQVWLWXWHVLQHIIHFWLYHDVVLVWDQFHRIFRXQVHO6HH$XVWLQY              JHWWLQJ DQ H[SHUW ZLWQHVV LQ WKH >VHFRQG@ SHQDOW\
%HOO)GWK&LUKROGLQJWKDWGHIHQVH              SKDVH"
FRXQVHOjV IDLOXUH WR LQYHVWLJDWH RU SUHVHQW DQ\ PLWLJDWLQJ
HYLGHQFH EHFDXVH FRXQVHO EHOLHYHG WKDW LW ZRXOG EH RI QR       $ sRHDQG,WDONHGDERXWZKDWWRGRDJDLQDERXW(OOLRWW
EHQHILW FRQVWLWXWHG LQHIIHFWLYH DVVLVWDQFH RI FRXQVHO ZKHQ           >VLF@ %UHVOHU ZKR KDG EHHQ VXFK D EDG ZLWQHVV
VHYHUDO ZLWQHVVHV ZHUH DYDLODEOH DQG ZLOOLQJ WR WHVWLI\ RQ         8OWLPDWHO\ZHGHFLGHGVLQFHZHKDGVXFKDGLIILFXOW
GHIHQGDQWjV EHKDOI DV WKH IDLOXUH WR SUHVHQW PLWLJDWLQJ            WLPHJHWWLQJDQ\PRQH\RUWKHULJKWWRFDOORUKDYH
HYLGHQFHXQGHUPLQHGWKHDGYHUVDULDOSURFHVVDQGUHQGHUHGWKH               'DYLG>6NDJJV@HYDOXDWHGE\RXURZQH[SHUWWKDWLW
GHDWK VHQWHQFH XQUHOLDEOH *OHQQ Y 7DWH  )G            ZDV XQOLNHO\ WKDW sXGJH :DOGRQ ZRXOG JLYH D
 WK &LU  KROGLQJ WKDW FRXQVHO SURYLGHG              VXPPRQV IRU DQRWKHU ZLWQHVV DQRWKHU H[SHUW
