                                                                            5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
   %XUWRQYsRQHVHWDO                    1R                      3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

                                                                         (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU

8QLWHG6WDWHV86ZHFRQFOXGHWKDWKLV                        )LOH 1DPH DS

FODLPVRIMXGLFLDOELDVODFNPHULW
                               ,,,                              81,7('67$7(6&28572)$33($/6
  )RUWKHIRUHJRLQJUHDVRQVZH5(9(56(WKHMXGJPHQWRI                             )257+(6,;7+&,5&8,7
WKH GLVWULFW FRXUW GLVPLVVLQJ %XUWRQjV )LUVW $PHQGPHQW                          BBBBBBBBBBBBBBBBB
UHWDOLDWLRQ FODLP XQGHU  H DQG UHPDQG IRU IXUWKHU
SURFHHGLQJV
                                                                  5211,( %85721                  ;
                                                                           3ODLQWLII$SSHOODQW    
                                                                                                   
                                                                                                      1R
                                                                            Y                     
                                                                                                    !
                                                                                                   
                                                                  :(1'(( s21(6HWDO            
                                                                          'HIHQGDQWV$SSHOOHHV 
                                                                                                  1
                                                                        $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
                                                                   IRUWKH:HVWHUQ'LVWULFWRI0LFKLJDQDW*UDQG5DSLGV
                                                                   1Rn'DYLG:0F.HDJXH'LVWULFWsXGJH
                                                                                  6XEPLWWHG6HSWHPEHU
                                                                              'HFLGHGDQG)LOHG)HEUXDU\
                                                                 %HIRUH.(11('<DQG0225(&LUFXLWsXGJHV'2:'
                                                                                6HQLRU'LVWULFWsXGJH
                                                                                        BBBBBBBBBBBBBBBBB
                                                                                              &2816(/
                                                                 21 %5,()  6KDQQRQ 1 :RRG 2)),&( 2) 7+(
                                                                 $77251(< *(1(5$/ &255(&7,216 ',9,6,21


                                                                     
                                                                      7KH +RQRUDEOH 'DYLG ' 'RZG 6HQLRU 8QLWHG 6WDWHV 'LVWULFW sXGJH
                                                                 IRU WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ



                                                                                                     
     %XUWRQYsRQHVHWDO                           1R       1R                          %XUWRQYsRQHVHWDO    

/DQVLQJ 0LFKLJDQ IRU $SSHOOHH  5RQQLH %XUWRQ 'HWURLW          JULHYDQFHVVDWLVI\HLQUHVSHFWWRHDFKRIWKHGHIHQGDQWV
0LFKLJDQSURVH                                                         EHFDXVH%XUWRQJDYHSULVRQRIILFLDOVIDLUQRWLFHRI%XUWRQjV
                                                                          UHWDOLDWLRQ FODLP DJDLQVW WKH GHIHQGDQWV ZKHQ %XUWRQ
                      BBBBBBBBBBBBBBBBB                                   DVVRFLDWHGWKHGHIHQGDQWVZLWKWKHDOOHJHGPLVFRQGXFWLQ6WHS
                                                                          ,RIWKHJULHYDQFHV
                          23,1,21
                      BBBBBBBBBBBBBBBBB                                      :H DOVR ILQG WKDW ,&)  ZKLFK DOOHJHV GHOLEHUDWH
                                                                          LQGLIIHUHQFHRQWKHSDUWRI1XUVHsRQHVDQG,&)ZKLFK
   .(11('< &LUFXLW sXGJH  3ODLQWLII$SSHOODQW 5RQQLH               DOOHJHV GHOLEHUDWH LQGLIIHUHQFH RQ WKH SDUW RI 1XUVH sRQHV
%XUWRQ D SULVRQHU SURFHHGLQJ SUR VH DSSHDOV WKH GLVWULFW        1XUVH6LFNOHUDQG+HDOWK8QLW0DQDJHU/\RQVJDYHSULVRQ
FRXUWjVGLVPLVVDORIKLV86&FLYLOULJKWVODZVXLW            RIILFLDOV IDLU QRWLFH RI %XUWRQjV UHWDOLDWLRQ FODLP DQG
IRU IDLOXUH WR H[KDXVW DYDLODEOH DGPLQLVWUDWLYH UHPHGLHV DV        WKHUHIRUHH[KDXVWHGWKDWFODLPDJDLQVWWKHGHIHQGDQWV7KH
UHTXLUHGE\86&H%XUWRQDUJXHVWKDWWKHGLVWULFW           OHJDO HOHPHQWV RI DQ (LJKWK $PHQGPHQW GHOLEHUDWH
FRXUWHUUHGZKHQLWFRQFOXGHGWKDWKLVHQWLUHODZVXLWZKLFK              LQGLIIHUHQFHFODLPLQFOXGHSURRIRIDGHIHQGDQWjVVXIILFLHQWO\
DOOHJHV WZR FDXVHV RI DFWLRQ KDG WR EH GLVPLVVHG ZLWKRXW        FXOSDEOHVWDWHRIPLQGZKLFKPD\LQFOXGHSURRIRIPRWLYH
SUHMXGLFH EHFDXVH %XUWRQ IDLOHG WR H[KDXVW WKH DYDLODEOH           6HH )DUPHU Y %UHQQDQ  86     ,I D
DGPLQLVWUDWLYHUHPHGLHVZLWKUHVSHFWWRRQHRIKLVFODLPV+H            GHIHQGDQWjVPRWLYHLVURRWHGLQXQFRQVWLWXWLRQDOFRQGXFWVXFK
FRQWHQGVWKDWKHKDVH[KDXVWHGKLVFODLPV)RUWKHUHDVRQVVHW           DVSXQLVKLQJRUWKUHDWHQLQJDSULVRQHUIRUH[HUFLVLQJKLV)LUVW
IRUWKEHORZZH5(9(56(WKHMXGJPHQWRIWKHGLVWULFWFRXUW                $PHQGPHQWULJKWVWKHSULVRQHUPD\DOVRVWDWHDUHWDOLDWLRQ
DQGUHPDQGIRUIXUWKHUSURFHHGLQJV                                       FODLP7KDGGHXV;Y%ODWWHU)GWK&LU
                                                                          :KHQ%XUWRQDOOHJHGGHOLEHUDWHLQGLIIHUHQFHRQWKH
                                  ,                                      SDUWRI1XUVHsRQHVLQ,&)DQGGHOLEHUDWHLQGLIIHUHQFH
                                                                          RQWKHSDUWRIDOOWKHGHIHQGDQWVLQ,&)KHJDYHSULVRQ
  5RQQLH %XUWRQ LV D SULVRQHU DW WKH ,RQLD 0D[LPXP                RIILFLDOVIDLUQRWLFHWKDWWKHPRWLYHXQGHUO\LQJWKHGHIHQGDQWVj
&RUUHFWLRQDO)DFLOLW\LQ,RQLD0LFKLJDQZKRVXIIHUVIURP               FRQGXFW ZDV DW LVVXH  $V D UHVXOW WKHVH JULHYDQFHV DOVR
XOFHUDWLYHFROLWLV,QDFRPSODLQWILOHG'HFHPEHU              H[KDXVWHG%XUWRQjVUHWDOLDWLRQFODLPDJDLQVWWKHGHIHQGDQWV
%XUWRQDOOHJHGWZRFDXVHVRIDFWLRQDJDLQVWWZRSULVRQQXUVHV
:HQGHH sRQHV DQG .DWK\ 6LFNOHU DQG WKH +HDOWK 8QLW                  %HFDXVHZHKDYHFRQFOXGHGWKDWGLVWULFWFRXUWHUUHGZKHQ
0DQDJHU0LFKDHO/\RQV7RKLVFRPSODLQW%XUWRQDWWDFKHG                 LWGHWHUPLQHGWKDW%XUWRQKDGQRWDGPLQLVWUDWLYHO\H[KDXVWHG
FRSLHVRIILYHJULHYDQFHVUHJDUGLQJKLVDOOHJDWLRQVZKLFKKH             KLV)LUVW$PHQGPHQWUHWDOLDWLRQFODLPDJDLQVWWKHGHIHQGDQWV
FRQWHQGV H[KDXVWHG ERWK (LJKWK $PHQGPHQW DQG )LUVW                  ZHGRQRWQHHGWRUHDFKWKHTXHVWLRQRIZKHWKHUWKHGLVWULFW
$PHQGPHQWFODLPVDJDLQVWWKHGHIHQGDQWV                                  FRXUWHUUHGZKHQLWGLVPLVVHG%XUWRQjVHQWLUHODZVXLWEHFDXVH
                                                                          %XUWRQIDLOHGWRH[KDXVWWKHDYDLODEOHDGPLQLVWUDWLYHUHPHGLHV
  2Q0D\GHIHQGDQWVILOHGDPRWLRQIRUVXPPDU\                  ZLWKUHVSHFWWRRQHRIKLVFODLPV
MXGJPHQWRI%XUWRQjVFODLPV,QLWV0DUFKRSLQLRQ
WKH GLVWULFW FRXUW IRXQG WKDW WKH IDFWV VHW IRUWK LQ %XUWRQjV                                   %
FRPSODLQW SUHVHQWHG WZR (LJKWK $PHQGPHQW FODLPV RQH
DULVLQJIURPGHOLEHUDWHPHGLFDOLQGLIIHUHQFHWRKLVXOFHUDWLYH              %XUWRQ DOVR DFFXVHV WKH GLVWULFW FRXUW DQG WKH PDJLVWUDWH
FROLWLV DQG WKH RWKHU DULVLQJ IURP GHOLEHUDWH PHGLFDO              MXGJHRIEDGFRQGXFWDQGELDVDJDLQVWKLP%HFDXVHKHGRHV
LQGLIIHUHQFHWRKLVFKURQLFGU\VNLQFRQGLWLRQD)RXUWHHQWK             QRWDOOHJHDQ\WKLQJFORVHWRDmSUHGLVSRVLWLRQVRH[WUHPH
$PHQGPHQWGXHSURFHVVFODLPDULVLQJIURPDQXQZDUUDQWHG                  DVWRGLVSOD\FOHDULQDELOLW\WRUHQGHUIDLUMXGJPHQWl/LWHN\Y
       %XUWRQYsRQHVHWDO                        1R        1R                          %XUWRQYsRQHVHWDO        

WXEH EDFN  ,Q ,&)  GDWHG sXO\             PHGLFDOFRSD\PHQWFKDUJHDQGD)UHHGRPRI,QIRUPDWLRQ
KHUHLQDIWHU,&)%XUWRQUHSHDWHGWKHIDFWVDOOHJHGLQ               $FW )2,$ FODLP DULVLQJ IURP WKH GHQLDO RI D UHFRUGV
,&)WKDW1XUVHsRQHVKDGEHHQGHOLEHUDWHO\LQGLIIHUHQW               UHTXHVW  7KH FRXUW DOVR FRQVLGHUHG ZKHWKHU %XUWRQjV
WR KHDOWK FDUH UHTXHVWV DQG LPSRVHG DQ XQZDUUDQWHG FR             FRPSODLQWSUHVHQWHGDGGLWLRQDOFODLPVDJDLQVWWKHGHIHQGDQWV
SD\PHQW FKDUJH LQ UHWDOLDWLRQ IRU %XUWRQ ILOLQJ D SUHYLRXV         EDVHGRQ%XUWRQjVDOOHJDWLRQVWKDWKLVKRVSLWDOUHFRUGVZHUH
ODZVXLWDJDLQVWKHU7KHJULHYDQFHHQGHGZLWKWKHDOOHJDWLRQ             LPSURSHUO\FRQILVFDWHGDQGWKDWWKHGHIHQGDQWVLQWHUIHUHGZLWK
WKDW 1XUVHsRQHV1XUVH6LFNOHUDQG+HDOWK8QLW0DQDJHU                  WKHSURFHVVLQJRIKLVJULHYDQFHV
/\RQV KDG LQWHUIHUHG ZLWK WKH SURFHVVLQJ RI KLV LQLWLDO
JULHYDQFHUHJDUGLQJWKHFRSD\PHQWWRFRYHUXSWKHLU                    7KHGLVWULFWFRXUWGHQLHGGHIHQGDQWVjVXPPDU\MXGJPHQW
mOLHVlUHJDUGLQJ%XUWRQjVPHGLFDOWUHDWPHQWDQGFKDUJHVDQG               PRWLRQLQSDUWDQGJUDQWHGLWLQSDUW7KHGLVWULFWFRXUWGHQLHG
WRUHWDOLDWHIRU%XUWRQILOLQJDSUHYLRXVODZVXLWDJDLQVWWKHP            WKHPRWLRQDVWR%XUWRQjV(LJKWK$PHQGPHQWFODLPDULVLQJ
                                                                           IURP GHIHQGDQWVj DOOHJHG GHOLEHUDWH LQGLIIHUHQFH WR KLV
   %DVHGRQRXUUHYLHZRI%XUWRQjVJULHYDQFHVZHPXVWDJUHH               XOFHUDWLYHFROLWLV7KHFRXUWJUDQWHGWKHPRWLRQDVWR%XUWRQjV
ZLWK%XUWRQjVFRQWHQWLRQWKDWWKHGLVWULFWFRXUWHUUHGZKHQLW             (LJKWK$PHQGPHQWFODLPDULVLQJIURPGHIHQGDQWVjDOOHJHG
IRXQG WKDW KH IDLOHG WR DGPLQLVWUDWLYHO\ H[KDXVW     KLV )LUVW     GHOLEHUDWH LQGLIIHUHQFH WR KLV FKURQLF GU\ VNLQ FRQGLWLRQ
$PHQGPHQW FODLP DJDLQVW WKH GHIHQGDQWV  6WHS , RI ,&)           EHFDXVHKLVFRPSODLQWVWDWHGDFODLPDJDLQVWQRQGHIHQGDQWV
 SODLQO\ DOOHJHV WKDW 1XUVH sRQHV ZDV GHOLEHUDWHO\              KLV)RXUWHHQWK$PHQGPHQWGXHSURFHVVFODLPDULVLQJIURP
LQGLIIHUHQW WR D VHULHV RI %XUWRQjV KHDOWK FDUH UHTXHVWV DQG      WKH XQZDUUDQWHG FRSD\PHQW FKDUJH EHFDXVH KLV FRPSODLQW
WKHQLPSURSHUO\FKDUJHGKLPIRUWKHKHDOWKFDUHYLVLWKHGLG               IDLOHGWRVWDWHDFODLPDQGKLV)2,$FODLPDULVLQJIURPWKH
UHFHLYHEHFDXVH%XUWRQKDGILOHGDSUHYLRXVODZVXLWDJDLQVW                GHQLHGUHFRUGVUHTXHVWEHFDXVHKLVFRPSODLQWVWDWHGDFODLP
KHU6LPLODUO\6WHS,RI,&)SODLQO\DOOHJHVWKDW1XUVH              DJDLQVW QRQGHIHQGDQWV  7KH FRXUW DOVR JUDQWHG VXPPDU\
6LFNOHUGLGQRWUHWXUQ%XUWRQjVKRVSLWDOUHFRUGVDQGSHWUROHXP            MXGJPHQWLQIDYRURIWKHGHIHQGDQWVRQWKHKRVSLWDOUHFRUGV
MHOO\EHFDXVH%XUWRQKDGILOHGDSUHYLRXVODZVXLWDJDLQVWKHU             FODLP EHFDXVH WKH UHFRUGV ZHUH QRW FRQILVFDWHG E\ WKH
$QG ILQDOO\ 6WHS , RI ,&)  SODLQO\ DOOHJHV WKDW 1XUVH       GHIHQGDQWV DQG WKH JULHYDQFH LQWHUIHUHQFH FODLP EHFDXVH
sRQHV 1XUVH 6LFNOHU DQG +HDOWK 8QLW 0DQDJHU /\RQV                  %XUWRQ KDG IDLOHG WR SURYLGH IDFWXDO VXSSRUW IRU WKDW
LQWHUIHUHGZLWKWKHSURFHVVLQJRI,&)WRFRYHUXSmOLHVl              DOOHJDWLRQ  /DVW WKH FRXUW QRWHG WKDW LW KDG QRW DGGUHVVHG
UHJDUGLQJ WKHLU GHOLEHUDWH LQGLIIHUHQFH WR %XUWRQjV FKURQLF          %XUWRQjV UHWDOLDWLRQ FODLP EHFDXVH LW ZDV QRW LQFOXGHG LQ
XOFHUDWLYH FROLWLV DQG GLG VR EHFDXVH %XUWRQ KDG ILOHG D          GHIHQGDQWVjVXPPDU\MXGJPHQWPRWLRQ
SUHYLRXV ODZVXLW DJDLQVW WKHP  7KXV WKHVH H[KDXVWHG
                                                                             'HIHQGDQWVVXEVHTXHQWO\ILOHGDPRWLRQWRGLVPLVV%XUWRQjV
                                                                           UHWDOLDWLRQ FODLP XQGHU )HGHUDO 5XOH RI &LYLO 3URFHGXUH
     0103/,398
     
                  KDYH QRW DSSHDOHG WKH GLVWULFW FRXUWjV FRQFOXVLRQ WKDW
                                                                           EDQG86&H6HFWLRQHDVDPHQGHG
%XUWRQ H[KDXVWHG KLV (LJKWK $PHQGPHQW FODLP ZLWK UHVSHFW WR HDFK RI WKH    E\WKH3ULVRQ/LWLJDWLRQ5HIRUP$FWRI3/5$UHTXLUHV
GHIHQGDQWV DQG EDVHG RQ RXU UHYLHZ RI %XUWRQjV JULHYDQFHV ZH DJUHH       DSULVRQHUWRH[KDXVWDYDLODEOHDGPLQLVWUDWLYHUHPHGLHVDVD
WKDW %XUWRQ GLG DGPLQLVWUDWLYHO\ H[KDXVW WKDW FODLP                       SUHUHTXLVLWHWREULQJLQJVXLWXQGHURUDQ\RWKHUIHGHUDO
                                                                          ODZ$PHQGHGHSURYLGHVLQSHUWLQHQWSDUW
     ,Q FRQVLGHULQJ D SULVRQHUjV FODLPV D GLVWULFW FRXUW VKRXOG ILUVW
GHWHUPLQH ZKHWKHU WKH FODLP KDV EHHQ H[KDXVWHG DQG WKHQ FRQVLGHU
ZKHWKHU D SULVRQHU KDV VWDWHG DQ DFWLRQDEOH FODLP  HD F :H
                                                                             D$SSOLFDWLRQRIDGPLQLVWUDWLYHUHPHGLHV
KDYH FRQFOXGHG WKDW %XUWRQ KDV SUHVHQWHG DQ H[KDXVWHG UHWDOLDWLRQ FODLP
DJDLQVW 1XUVH 6LFNOHU :H OHDYH LW WR WKH GLVWULFW FRXUW WR GHWHUPLQH
ZKHWKHU %XUWRQ KDV SUHVHQWHG DQ DFWLRQDEOH FODLP
         %XUWRQYsRQHVHWDO                        1R        1R                              %XUWRQYsRQHVHWDO          

    1R DFWLRQ VKDOO EH EURXJKW ZLWK UHVSHFW WR SULVRQ               GDWHGsXQHKHUHLQDIWHU,&)%XUWRQDOOHJHG
    FRQGLWLRQVXQGHUVHFWLRQRIWKLVWLWOHRUDQ\RWKHU               WKDW1XUVHsRQHVGHOLEHUDWHO\GHQLHGKLPPHGLFDOWUHDWPHQW
    )HGHUDOODZE\DSULVRQHUFRQILQHGLQDQ\MDLOSULVRQRU             IRUKLVXOFHUDWLYHFROLWLVE\IDLOLQJWRDGPLQLVWHUDVHULHVRI
    RWKHU FRUUHFWLRQDO IDFLOLW\ XQWLO VXFK DGPLQLVWUDWLYH              SK\VLFLDQRUGHUHGWHVWVDQGWKDW1XUVHsRQHVDOZD\VGHOD\V
    UHPHGLHVDVDUHDYDLODEOHDUHH[KDXVWHG                                JLYLQJ %XUWRQ PHGLFDO WUHDWPHQWV DQG PHGLFDWLRQ 7KH
                                                                            JULHYDQFH FORVHG ZLWK WKH DOOHJDWLRQV WKDW OHJDO SDSHUV KDG
                                                                     EHHQWDNHQRII%XUWRQjVGHVNDQGWKDW1XUVHsRQHVDQG1XUVH
                                                                            6LFNOHUmDUHIXOORIFRUUXSWLRQl%XUWRQjV6WHS,,UHDVRQVIRU
    F'LVPLVVDO                                                          DSSHDOIXUWKHUH[SODLQWKDWKHVXVSHFWVWKDW1XUVH6LFNOHUjV
                                                                            mFRUUXSWLRQlLQUHVSHFWWRKHUWUHDWPHQWRIKLPLVEHFDXVHKH
    7KHFRXUWVKDOORQLWVRZQPRWLRQRURQWKHPRWLRQRI               ILOHGDSUHYLRXVODZVXLWDJDLQVWKHU,Q,&)
    DSDUW\GLVPLVVDQ\DFWLRQEURXJKWZLWKUHVSHFWWRSULVRQ               GDWHGsXQHKHUHLQDIWHU,&)%XUWRQREMHFWHG
    FRQGLWLRQVXQGHUVHFWLRQRIWKLVWLWOHRUDQ\RWKHU               WR D  PHGLFDO FRSD\PHQW FKDUJH  7KDW JULHYDQFH
    )HGHUDOODZE\DSULVRQHUFRQILQHGLQDQ\MDLOSULVRQRU             DOOHJHGWKDW1XUVHsRQHVLPSRVHGWKHFRSD\PHQWDQGIDLOHG
    RWKHUFRUUHFWLRQDOIDFLOLW\LIWKHFRXUWLVVDWLVILHGWKDWWKH          WRUHVSRQGWR%XUWRQjVZULWWHQKHDOWKFDUHUHTXHVWVEHFDXVH
    DFWLRQLVIULYRORXVPDOLFLRXVIDLOVWRVWDWHDFODLPXSRQ             %XUWRQKDGILOHGDSUHYLRXVODZVXLWDJDLQVWKHU%XUWRQjV6WHS
    ZKLFK UHOLHI FDQ EH JUDQWHG RU VHHNV PRQHWDU\ UHOLHI           ,, UHDVRQV IRU DSSHDO IXUWKHU H[SODLQ WKDW 1XUVH sRQHV ZDV
    IURPDGHIHQGDQWZKRLVLPPXQHIURPVXFKUHOLHI                        DZDUH RI WKH VHYHULW\ RI KLV LOOQHVV ZKHQ VKH LPSRVHG WKH
                                                                            XQZDUUDQWHGFRSD\PHQWDQGIDLOHGWRUHVSRQGWRKLVKHDOWK
86&$H6XSS                                          FDUHUHTXHVWV,Q,&)GDWHGsXQH
   2Q 6HSWHPEHU   WKH GLVWULFW FRXUW JUDQWHG                 KHUHLQDIWHU ,&)  %XUWRQ EHJDQ E\ DFFXVLQJ SULVRQ
GHIHQGDQWVjPRWLRQEHFDXVH%XUWRQKDGIDLOHGWRH[KDXVWWKH                 PHGLFDOVWDIIDQGVSHFLILFDOO\1XUVH6LFNOHURIFRUUXSWLRQ
DYDLODEOH DGPLQLVWUDWLYH UHPHGLHV ZLWK UHVSHFW WR KLV                 EHFDXVH%XUWRQKDGILOHGDODZVXLWDJDLQVW6LFNOHU%XUWRQ
UHWDOLDWLRQFODLPDVUHTXLUHGE\HDZKHQKHIDLOHGWR                ZHQWRQWRDOOHJHWKDWSULVRQRIILFLDOVZURQJIXOO\FRQILVFDWHG
ILOH D JULHYDQFH UHJDUGLQJ GHIHQGDQWVj DOOHJHG UHWDOLDWRU\            KLVPHGLFDOUHFRUGVDQGDWXEHRISHWUROHXPMHOO\XSRQKLV
FRQGXFW  7KH FRXUW REVHUYHG WKDW ZKLOH WKH JULHYDQFH               UHWXUQWRSULVRQIURPDQRXWVLGHKRVSLWDODQGLGHQWLILHG1XUVH
LGHQWLILHGDV,&)PDGHDYDJXHUHIHUHQFHWR                  6LFNOHU DV WKH SULVRQ RIILFLDO ZKR LQIRUPHG %XUWRQ WKDW KH
%XUWRQjV SUHYLRXV ODZVXLW DJDLQVW WKH GHIHQGDQWV WKH                 ZRXOGQRWEHJHWWLQJKLVKRVSLWDOUHFRUGVRUSHWUROHXPMHOO\
JULHYDQFHGLGQRWVHWIRUWKWKHIDFWXDOEDVLVIRUWKHFODLPWKDW
WKH GHIHQGDQWVj DFWLRQV ZHUHLQ UHWDOLDWLRQ IRU WKH ODZVXLW
%XUWRQKDGILOHGDJDLQVWWKHP 5DWKHUWKHFRXUWIRXQGWKDW               PLVFRQGXFW LQFOXGLQJ D YLRODWLRQ RI WKH JULHYDQFH SURFHGXUHV LV PDGH DW
                                                                            6WHS ,, RU 6WHS ,,, RI WKH JULHYDQFH SURFHVV 7KHUHIRUH WKLV JULHYDQFH
WKHJULHYDQFHVHWIRUWKWKHIDFWXDOEDVLVIRU%XUWRQjVFODLPWKDW           GRHV QRW DGPLQLVWUDWLYHO\ H[KDXVW D UHWDOLDWLRQ FODLP DJDLQVW 1XUVH
                                                                            6LFNOHU

                                                                                
                                                                                   $JDLQ 1XUVH 6LFNOHU ZDV WKH 6WHS , UHVSRQGHQW WR WKLV JULHYDQFH
                                                                           DQG DOOHJDWLRQV RI UHWDOLDWRU\ FRQGXFW RQ KHU SDUW DUH ILUVW UDLVHG LQ
      7KH HDUOLHU ODZVXLW UHIHUHQFHG LQ %XUWRQjV FRPSODLQW DQG JULHYDQFHV
ZDV ILOHG DJDLQVW 1XUVH 6LFNOHU 1XUVH sRQHV DQG +HDOWK 8QLW 0DQDJHU        %XUWRQjV 6WHS ,, UHDVRQV IRU DSSHDO )RU WKH UHDVRQ VWDWHG LQ IRRWQRWH IRXU
/\RQV DQG ZDV GHFLGHG LQ WKHLU IDYRU RQ sDQXDU\   :7943 ;        WKLV JULHYDQFH GRHV QRW DGPLQLVWUDWLYHO\ H[KDXVW D UHWDOLDWLRQ FODLP DJDLQVW
6LFNOHU 1R &9 :' 0LFK 7KDW GHFLVLRQ ZDV DIILUPHG RQ        1XUVH 6LFNOHU
'HFHPEHU   %XUWRQ Y 6LFNOHU  )G  WK &LU 
                                                                                
XQSXEOLVKHG                                                                   7KLV JULHYDQFH UHVXOWHG LQ WKH FDQFHOODWLRQ RI WKH FRSD\PHQW FKDUJH
       %XUWRQYsRQHVHWDO                             1R         1R                           %XUWRQYsRQHVHWDO    

86$GPLQLVWUDWLYHH[KDXVWLRQUHGXFHV                    KH KDG EHHQ LPSURSHUO\ FKDUJHG D PHGLFDO FRSD\PHQW LQ
WKH TXDQWLW\ RI SULVRQHU VXLWV E\ JLYLQJ VWDWH RIILFLDOV DQ            YLRODWLRQRIWKH)RXUWHHQWK$PHQGPHQW'XH3URFHVV&ODXVH
RSSRUWXQLW\WRWDNHFRUUHFWLYHDFWLRQLQUHVSRQVHWRSULVRQHU                   &RQVHTXHQWO\ WKH FRXUW FRQFOXGHG WKDW %XUWRQjV ODZVXLW
JULHYDQFHVDQGWKHUHE\HOLPLQDWHVWKHQHHGIRUVRPHFODLPV                    LQFOXGLQJ KLV H[KDXVWHG (LJKWK $PHQGPHQW PHGLFDO
WR EH OLWLJDWHG SDUWLFXODUO\ IULYRORXV FODLPV  ,G DW            LQGLIIHUHQFHFODLPKDGWREHGLVPLVVHGZLWKRXWSUHMXGLFH2Q
$GPLQLVWUDWLYHH[KDXVWLRQLPSURYHVWKHTXDOLW\RISULVRQHU                      sDQXDU\%XUWRQILOHGDWLPHO\QRWLFHRIDSSHDO
VXLWV E\ IDFLOLWDWLQJ WKH GHYHORSPHQW RI mDQ DGPLQLVWUDWLYH
UHFRUG WKDW FODULILHV WKH FRQWRXUV RI WKH FRQWURYHUV\l LQ                                               ,,
DGYDQFHRIOLWLJDWLRQ,G$IDLUQRWLFHVWDQGDUGFRQWLQXHVWR
JLYH VWDWH SULVRQ RIILFLDOV ILUVW RSSRUWXQLW\ WR UHVSRQG WR D                                          $
SULVRQHUjV DOOHJDWLRQV RI PLVWUHDWPHQW RU PLVFRQGXFW  ,I D
GLVWULFWFRXUWGHWHUPLQHVWKDWSULVRQRIILFLDOVKDYHQRWEHHQ                     :HUHYLHZGHQRYRDGLVWULFWFRXUWjVGLVPLVVDOIRUIDLOXUHWR
JLYHQ IDLU QRWLFH RI WKH FODLP EHLQJ OLWLJDWHG DJDLQVW D               H[KDXVW DGPLQLVWUDWLYH UHPHGLHV XQGHU  H  &XUU\ Y
GHIHQGDQW WKH FRXUW ZLOO GLVPLVV WKH FODLP DJDLQVW WKDW                6FRWW  )G   WK &LU   %HIRUH ZH FDQ
GHIHQGDQW IRU IDLOXUH WR H[KDXVW  %HFDXVH D SULVRQHUjV                 FRQVLGHU ZKHWKHU %XUWRQ DGPLQLVWUDWLYHO\ H[KDXVWHG KLV
DOOHJDWLRQVRIPLVWUHDWPHQWDQGPLVFRQGXFWZLOOEHUHYLHZHG                     FODLPVZHPXVWILUVWGHWHUPLQHZKDWFODLPVDUHDGYDQFHGLQ
DQGDFWHGXSRQILUVWE\SULVRQRIILFLDOVWKHGLVWULFWFRXUWVDOVR              %XUWRQjVFRPSODLQW$KDQGZULWWHQSURVHFRPSODLQWVKRXOG
ZLOOFRQWLQXHWRUHFHLYHWKHEHQHILWRIDQDGPLQLVWUDWLYHUHFRUG                EHOLEHUDOO\FRQVWUXHGm$OOSOHDGLQJVVKDOOEHVRFRQVWUXHG
WKDW FODULILHV WKH FRQWURYHUV\  $FFRUGLQJO\ WKH OHJLVODWLYH            DVWRGRVXEVWDQWLDOMXVWLFHl(VWHOOHY*DPEOH86
SXUSRVHV RI  H DV DUWLFXODWHG LQ 3RUWHU ZLOO QRW EH            VHHDOVR)5&LY3I+XH\Y6WLQH)G
LPSDLUHG                                                                      WK&LUH[DPLQLQJmWKUXVWlQRWMXVWWH[WRI
                                                                                SURVHOLWLJDQWjVDUJXPHQWV
  7KHIROORZLQJUHVWDWHVWKHSULPDU\DOOHJDWLRQV%XUWRQVHW
IRUWKLQWKHILYHJULHYDQFHVDWWDFKHGWRKLVFRPSODLQWZKLFK                      %XUWRQjV ILUVW FDXVH RI DFWLRQ DOOHJHV mGHOLEHUDWH>@
KHFRQWHQGVDGPLQLVWUDWLYHO\H[KDXVWHGKLVFODLPVDJDLQVWWKH                   LQGLIIHUHQFHuWRSODLQWLII>jV@VHULRXVPHGLFDOQHHGVuLQ
GHIHQGDQWV  ,Q ,&)  GDWHG sXQH                  YLRODWLRQRIWKHWK$PHQGPHQWl+LVVHFRQGFDXVHRIDFWLRQ
KHUHLQDIWHU ,&)  %XUWRQ DOOHJHG WKDW 1XUVH *DUGQHU                DOOHJHV WKDW WKH GHIHQGDQWV mGHQ>LHG@ SODLQWLII PHGLFDO
DQG 2IILFHU *RRGULFK QHLWKHU RI ZKRP DUH SDUWLHV WR WKLV              WUHDWPHQWuWRIRUFHSODLQWLIIWRGURSFLYLODFWLRQRQWKHPu
FDVHPDGHUDFLDOO\GHURJDWRU\UHPDUNVDQGFRQVSLUHGWRGHQ\                    LQYLRODWLRQ>RIWKH@WK$PHQGPHQWuVXEVWDQWLDO>VLF@GXH
%XUWRQ PHGLFDO WUHDWPHQW  ,Q ,&)  DOVR                  SURFHVV FODXVH SULVRQHU HTXDOSURWHFWLRQ DQG UHWDOLDWLRQl
                                                                                %XUWRQjVFRPSODLQWLVSURSHUO\FRQVWUXHGDVVWDWLQJDQ(LJKWK
                                                                                $PHQGPHQWGHOLEHUDWHLQGLIIHUHQFHFODLPDVWKHILUVWFDXVHRI
    
      :H KDYH SULQFLSDOO\ UHOLHG RQ %XUWRQjV 6WHS , SUREOHP VWDWHPHQWV
                                                                                DFWLRQDQGD)LUVW$PHQGPHQWUHWDOLDWLRQFODLPDVWKHVHFRQG
IRU RXU UHVWDWHPHQW RI KLV SULPDU\ DOOHJDWLRQV %XUWRQjV 6WHS ,, DQG            FDXVHRIDFWLRQ6RFRQVWUXLQJWKHVHFRQGFDXVHRIDFWLRQLV
6WHS ,,, UHDVRQV IRU DSSHDO SURYLGHG D VHFRQGDU\ VRXUFH WR WKH H[WHQW WKDW      VXEVWDQWLDOO\ MXVW EHFDXVH WKH FRPSODLQW FOHDUO\ LQGLFDWHV
WKH VWDWHG UHDVRQV FODULILHG D IDFW DOOHJHG DW 6WHS ,                          %XUWRQjV LQWHQW WR SURFHHG RQ D WKHRU\ RI XQFRQVWLWXWLRQDO
                                                                               UHWDOLDWLRQZKLFKLVDFWLRQDEOHXQGHUWKH)LUVW$PHQGPHQW
      1XUVH 6LFNOHU ZDV WKH 6WHS , UHVSRQGHQW WR WKLV JULHYDQFH                DQG EHFDXVH QHLWKHU WKH (LJKWK $PHQGPHQW QRU WKH
$OOHJDWLRQV RI UHWDOLDWRU\ FRQGXFW RQ WKH SDUW RI 1XUVH 6LFNOHU DUH ILUVW
UDLVHG LQ %XUWRQjV 6WHS ,, UHDVRQV IRU DSSHDO $V VWDWHG DERYH ZH UHDG
                                                                                )RXUWHHQWK $PHQGPHQW 'XH 3URFHVV DQG (TXDO 3URWHFWLRQ
WKH 0'2& JULHYDQFH SURFHGXUHV WR SUHFOXGH DGPLQLVWUDWLYH H[KDXVWLRQ
                                                                                &ODXVHVSURYLGHDOHJDOWKHRU\RQZKLFK%XUWRQFDQSURFHHG
RI D FODLP DJDLQVW D SULVRQ RIILFLDO LI WKH ILUVW DOOHJDWLRQ RI DQ RIILFLDOjV
       %XUWRQYsRQHVHWDO                         1R        1R                              %XUWRQYsRQHVHWDO          

   1H[W ZH FRQVLGHU ZKHWKHU %XUWRQjV JULHYDQFHV                      DGLVWULFWFRXUWVKRXOGHQIRUFHWKHH[KDXVWLRQUHTXLUHPHQWVXD
DGPLQLVWUDWLYHO\H[KDXVWHGKLVFODLPVDJDLQVWWKHGHIHQGDQWV               VSRQWHLIQRWUDLVHGE\WKHGHIHQGDQWV%URZQY7RRPEV
DVUHTXLUHGE\H2XUH[KDXVWLRQDQDO\VLVLVLQIRUPHG                )GWK&LU7KXVIRUDFRXUWWRILQGWKDW
E\ WKH 0LFKLJDQ 'HSDUWPHQW RI &RUUHFWLRQV 0'2&                     DSULVRQHUKDVDGPLQLVWUDWLYHO\H[KDXVWHGDFODLPDJDLQVWD
JULHYDQFHSROLFLHVDQGSURFHGXUHVDVZHOODVFLUFXLWFDVHODZ              SDUWLFXODU GHIHQGDQW D SULVRQHU PXVW KDYH DOOHJHG
LQWHUSUHWLQJWKHUHTXLUHPHQWVRIH)LUVWWKH0LFKLJDQ              PLVWUHDWPHQWRUPLVFRQGXFWRQWKHSDUWRIWKHGHIHQGDQWDW
'HSDUWPHQWRI&RUUHFWLRQVUHTXLUHVDSULVRQHUWRGHILQHWKH                6WHS , RI WKH JULHYDQFH SURFHVV  ,Q GHVFULELQJ WKH DOOHJHG
JULHYDEOH LVVXH DW 6WHS , RI WKH JULHYDQFH SURFHVV  3ROLF\      PLVWUHDWPHQWRUPLVFRQGXFWKRZHYHUZHZRXOGQRWUHTXLUH
'LUHFWLYH   8 2FW   3ULVRQHU3DUROHH           DSULVRQHUjVJULHYDQFHWRDOOHJHDVSHFLILFOHJDOWKHRU\RUIDFWV
*ULHYDQFH)RUP6WHSV,,DQG,,,RIWKH                 WKDWFRUUHVSRQGWRDOOWKHUHTXLUHGHOHPHQWVRI D SDUWLFXODU
JULHYDQFH SURFHVV SURYLGH D SULVRQHU WKH RSSRUWXQLW\ WR             OHJDOWKHRU\5DWKHULWLVVXIILFLHQWIRUDFRXUWWRILQGWKDWD
H[SUHVV GLVVDWLVIDFWLRQ ZLWK WKH UHVSRQVH UHFHLYHG DW WKH           SULVRQHUjV6WHS,SUREOHPVWDWHPHQWJDYHSULVRQRIILFLDOVIDLU
SUHYLRXV VWHS  3ROLF\ 'LUHFWLYH   7 '' **          QRWLFHRIWKHDOOHJHGPLVWUHDWPHQWRUPLVFRQGXFWWKDWIRUPV
2FW3ULVRQHU3DUROHH*ULHYDQFH)RUP                WKHEDVLVRIWKHFRQVWLWXWLRQDORUVWDWXWRU\FODLPPDGHDJDLQVW
  :H XQGHUVWDQG WKHVH SROLFLHV WR UHTXLUH WKDW D           DGHIHQGDQWLQDSULVRQHUjVFRPSODLQW&I6WURQJY'DYLG
SULVRQHUVHHNLQJWRDGPLQLVWUDWLYHO\H[KDXVWDFODLPDJDLQVW               )GWK&LUKROGLQJWKDWZKHQVWDWH
D SULVRQ RIILFLDO GHVFULEH WKH DOOHJHG PLVWUHDWPHQW RU              JULHYDQFHUXOHVGRQRWSUHVFULEHWKHFRQWHQWVRIDJULHYDQFHRU
PLVFRQGXFWDW6WHS,RIWKHJULHYDQFHSURFHVV%\QHJDWLYH                 WKHQHFHVVDU\GHJUHHRIIDFWXDOSDUWLFXODULW\DJULHYDQWQHHG
LPSOLFDWLRQ ZH XQGHUVWDQG WKHVH SROLFLHV WR SUHFOXGH                RQO\mREMHFWLQWHOOLJLEO\WRVRPHDVVHUWHGVKRUWFRPLQJlDQG
DGPLQLVWUDWLYHH[KDXVWLRQRIDFODLPDJDLQVWDSULVRQRIILFLDO             QHHGQRWmOD\RXWIDFWVDUWLFXODWHOHJDOWKHRULHVRUGHPDQG
LIWKHILUVWDOOHJDWLRQRIPLVWUHDWPHQWRUPLVFRQGXFWRQWKH               SDUWLFXODUUHOLHIl
SDUW RI WKDW RIILFLDO LV PDGH DW 6WHS ,, RU 6WHS ,,, RI WKH
JULHYDQFH SURFHVV  6HH 3ROLF\ 'LUHFWLYH   (               $ IDLU QRWLFH VWDQGDUG IRU GHWHUPLQLQJ DGPLQLVWUDWLYH
2FWDQDOOHJHGYLRODWLRQRIWKLVSROLF\GLUHFWLYH             H[KDXVWLRQGRHVQRWGLVWXUEWKHSROLFLHVDGYDQFHGE\DPHQGHG
LVDJULHYDEOHLVVXHWKDWVKRXOGEHUDLVHGDW6WHS,QRWDUHDVRQ         H&RQJUHVVDPHQGHGHWRUHGXFHWKHTXDQWLW\
IRUDSSHDODW6WHS,,RU,,,:HGRQRWKRZHYHUXQGHUVWDQG             DQGLPSURYHWKHTXDOLW\RISULVRQHUODZVXLWV3RUWHUY1XVVOH
WKHVH SROLFLHV WR SUHFOXGH D SULVRQHU IURP SUHVHQWLQJ
DGGLWLRQDOIDFWXDOGHWDLODW6WHS,,DQG6WHS,,,WKDWFODULILHVDQ
DOOHJDWLRQPDGHDW6WHS,DVDPHDQVRIMXVWLI\LQJDQDSSHDO
                                                                           $PHQGPHQW ZKHQ WKH\ SODFHG KLP LQ EHG UHVWUDLQWV ZLWKRXW D KHDULQJ DQG
  6HFRQGDSULVRQHUPXVWDGPLQLVWUDWLYHO\H[KDXVWKLVRUKHU              WKDW WKH\ YLRODWHG WKH (TXDO 3URWHFWLRQ &ODXVH RI WKH )RXUWHHQWK
                                                                           $PHQGPHQW EHFDXVH WKH\ LQWHQWLRQDOO\ GLVFULPLQDWHG DJDLQVW KLP E\ XVLQJ
FODLP DV WR HDFK GHIHQGDQW DVVRFLDWHG ZLWK WKH FODLP
+DUWVILHOGY9LGRU)GWK&LUDQG
                                                                           KDUG UHVWUDLQWV RQ KLP ZKLOH XVLQJ VRIW UHVWUDLQWV RQ D ZKLWH SULVRQHU ,G
                                                                           DW      $SSO\LQJ H WKLV &RXUW DIILUPHG WKH GLVPLVVDO RI
                                                                           +DUWVILHOGjV FODLPV DJDLQVW GHIHQGDQWV 9LGRU DQG 0RZDWW EHFDXVH WKH
                                                                           UHFRUG LQGLFDWHG WKDW +DUWVILHOG KDG IDLOHG WR DGPLQLVWUDWLYHO\ H[KDXVW KLV
                                                                           UHPHGLHV DV WR WKRVH GHIHQGDQWV 7KLV &RXUW WKHQ DIILUPHG WKH GLVWULFW
    
     ,Q WKDW FDVH +DUWVILHOG D SULVRQHU SURFHHGLQJ SUR VH ILOHG VXLW    FRXUWjV GHFLVLRQ RQ WKH PHULWV RI +DUWVILHOGjV (LJKWK $PHQGPHQW FODLP
DJDLQVW GHIHQGDQWV 9LGRU 0RZDWW &UXPS .DYDQDXJK DQG %UHLPD\HU          DJDLQVW WKH UHPDLQLQJ WKUHH GHIHQGDQWV ,G DW  7KXV WKH +DUWVILHOG
FODLPLQJ WKDW WKHLU DFWLRQV ZHUH FUXHO DQG XQXVXDO LQ YLRODWLRQ RI WKH     KROGLQJ LOOXVWUDWHV WKDW D SULVRQHUjV ODZVXLW ZKLFK DOOHJHV PXOWLSOH FODLPV
(LJKWK $PHQGPHQW ZKHQ WKH\ GHQLHG KLP DFFHVV WR D WRLOHW DQG IUHVK         DJDLQVW PXOWLSOH GHIHQGDQWV LV QRW YXOQHUDEOH WR GLVPLVVDO XQGHU
ZDWHU IRU HLJKWHHQ KRXUV ,G DW  +H DOVR FODLPHG WKDW GHIHQGDQWV       HD VLPSO\ EHFDXVH WKH SULVRQHU KDV IDLOHG WR H[KDXVW D SDUWLFXODU
9LGRU DQG 0RZDWW YLRODWHG WKH 'XH 3URFHVV &ODXVH RI WKH )RXUWHHQWK         FODLP DV WR D VSHFLILF GHIHQGDQW
