7KHLQIRUPDWLRQVWUXFWXUHRI-DSDQHVH 5HLNR9HUPHXOHQ 7KLVFKDSWHUGHVFULEHVYDULRXVPHDQVLQ-DSDQHVHRIH[SUHVVLQJLQIRUPDWLRQ VWUXFWXUDO IXQFWLRQV -DSDQHVH LV LQWHUHVWLQJ LQ VHYHUDO UHVSHFWV LW LV D KHDGILQDO ODQJXDJH ZLWK FDVH PDUNLQJ ZKLFK DOORZV IRU UHODWLYHO\ ³IUHH´ ZRUG RUGHU ±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µ:KRGUDQNZLQH"¶ % >7DURJD@) ZDLQR QRQGD 7DUR120 ZLQH$&& GUDQN µ7DURGUDQNZLQH¶ 7KH H[DPSOHV LQ ± DUH EDVHG RQ DQ H[DPSOH LQ ,VKLKDUD $EEUHYLDWLRQV$&& DFFXVDWLYH&23 FRSXOD*(5 JHUXQG10= QRPLQDO L]HU 120 QRPLQDWLYH 3$66 SDVVLYH 4 TXHVWLRQSDUWLFOH 6)3 VHQWHQFH ILQDOSDUWLFOH 7KHLQIRUPDWLRQVWUXFWXUHRI-DSDQHVH $ 7DURZD QDQLR QRQGD QR"2EMHFW 7DUR:$ ZKDW$&& GUDQN 4 µ:KDWGLG7DURGULQN"¶ % 7DURZD >ZDLQR@) QRQGD 7DUR:$ ZLQH$&& GUDQN $7DURZD QDQLR VLWD QR"93 7DUR:$ ZKDW$&& GLG 4 µ:KDWGLG7DURGR"¶ % 7DURZD >ZDLQR QRQGD@) 7DUR:$ ZLQH$&& GUDQN $QDQLJD DWWD QR"6HQWHQFH ZKDW120 KDSSHQHG 4 µ:KDWKDSSHQHG"¶ % >7DURJD ZDLQR QRQGD QR@) 7DUR120 ZLQH$&& GUDQN 6)3 7KH DQVZHUV DUH JLYHQ DV IXOO VHQWHQFHV DERYH EXW DV ZLOO EH GLVFXVVHG LQ 6HFWLRQ JLYHQ LWHPV DUH SUHIHUDEO\ XQSURQRXQFHG 7KXV WKH DERYH DQVZHUV DUH DFWXDOO\ UDWKHU DZNZDUG ,W LV PRUH QDWXUDO WR VLPSO\ SUR QRXQFHWKHUHOHYDQWFRQVWLWXHQWSOXVDFRSXODRUWKHYHUEDVLOOXVWUDWHGIRU VXEMHFWEHORZ D >7DUR@) GHVX 7DUR &23 µ,W¶V7DUR¶ E >7DURJD@) QRQGD 7DUR120 GUDQN µ7DURGUDQNLW¶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µGHDFFHQWLQJ¶ µGHSKUDVLQJ¶ DQGµHUDGLFDWLRQ¶LQWKHOLWHUDWXUH,ZLOOLQGLFDWHLWE\XQGHUOLQLQJRQO\ZKHUH UHOHYDQWWRPDNHWKHSRLQW7KHUHLVDFODXVHILQDOULVLQJLQWRQDWLRQIRUTXHVWLRQV KHUHKHQFHWKHTXHVWLRQSDUWLFOHLVQRWXQGHUOLQHG 5HLNR9HUPHXOHQ 1DR\DZD 1$QLR QRPL\DGH QRQGD QR" GUDQN 4 1DR\D:$ ZKDW$&& EDUDW µ:KDWGLG1DR\DGULQNDWWKHEDU"¶ ,VKLKDUD $FRQVWLWXHQWWKDWDQVZHUVWKHZKSDUWRIDSUHFHGLQJTXHVWLRQLVQRWQHFHV VDULO\ PDUNHG ZLWK D VKDUS ULVH RI WKH )SHDN OLNH ZKSKUDVHV 5DWKHU LW W\SLFDOO\ EHDUV RQO\ D VOLJKW ULVH LQ WKH )SHDN 'HJXFKL DQG .LWDJDZD ,VKLKDUD 7KH FRQWRXU DVVRFLDWHG ZLWK ZKSKUDVHV DUH REVHUYHGZLWKFRQWUDVWLYHIRFXVZKLFKLVGLVFXVVHGEHORZ 6FUDPEOLQJ ± RSWLRQDO PRYHPHQW RI FRQVWLWXHQWV LQWR QRQFDQRQLFDO SRVLWLRQV ± FDQ DIIHFW WKH IRFXV VWUXFWXUH RI D VHQWHQFH LQ YDULRXV ZD\V )LUVWVFUDPEOLQJPD\WDUJHWWKHIRFXVFRQVWLWXHQWLWVHOILQZKLFKFDVHWKH VFUDPEOHGLWHPEHDUVDQHPSKDWLFVWUHVVRIWKHW\SHERUQHE\ZKSKUDVHV 6RPH VSHDNHUV DUH DEOH WR VFUDPEOH WKH DQVZHU FRQVWLWXHQW LQ % IRU LQVWDQFH HYHQ ORQJGLVWDQFH EXW WKH\ UHSRUW WKDW LW QHFHVVDULO\ OHDGV WR D FRQWUDVWLYHLQWHUSUHWDWLRQ $µ:KDWGLG7DURGULQN"¶ %>:$LQRL@) 7DURZD WLQRQGD ZLQH$&& 7DUR:$ GUDQN µ7DURGUDQNZLQHDQGQRWEHHU¶ 6HFRQGLWKDVEHHQDUJXHGWKDWDQLPPHGLDWHO\SUHYHUEDOLWHPLQ-DSDQHVH UHFHLYHV WKH GHIDXOW PDLQ VWUHVV RI WKH VHQWHQFH 6FUDPEOLQJ FDQ PDQLSX ODWHWKLVGHIDXOWVWUHVVSRVLWLRQIRUIRFXVSXUSRVHV1HHOHPDQDQG5HLQKDUW ,VKLKDUD,WFDQUHPRYHDQLWHPIURPWKHGHIDXOWVWUHVVSRVLWLRQ VRWKDWDIRFXVHGLWHPHQGVXSLQWKDWSRVLWLRQ7KXVRQHZD\RIDQVZHULQJ $LVWRVFUDPEOHWKHREMHFW7KHDGYHUELDOLVQRZLQWKHSUHYHUEDOSRVL WLRQ UHFHLYLQJ WKH PDLQ VWUHVV RI WKH VHQWHQFH DOORZLQJ IRU D IRFXV LQWHU SUHWDWLRQ7KHGHIDXOWVWUHVVLVPDUNHGZLWKDQDF~WHDFFHQWKHUH 7KLVRSWLRQLVDOVRDYDLODEOHIRUIRFXVLQJWKHVXEMHFW,VKLKDUDEXWDGGL WLRQDOIDFWRUVDUHLQYROYHGZKLFKDUHQRW\HWZHOOXQGHUVWRRG7KHUHSO\LQL% LVIHOLFLWRXVRQO\LILQWKHSUHFHGLQJTXHVWLRQLQL$WKHREMHFWLVVFUDPEOHGVR WKDWWKHVXEMHFWZKSKUDVHLVDOUHDG\LQWKHSUHYHUEDOSRVLWLRQ%¶VXWWHUDQFHLV LQIHOLFLWRXVDVDQDQVZHUWRDTXHVWLRQZLWKWKHFDQRQLFDOZRUGRUGHUVXFKDV $ 7KHUH LV QR FRPSDUDEOH UHVWULFWLRQ RQ WKH SUHFHGLQJ TXHVWLRQ ZKHQ WKH REMHFWVFUDPEOHVRYHUDIRFXVHGDGYHUELDODVLQRUDIRFXVHGLQGLUHFWREMHFW L $ZDLQRL '$UHJDWL QRQGD QR" % ZDLQRL 7iURJD WL QRQGD ZLQH$&&ZKR120 GUDQN 4 ZLQH$&& 7DUR120 GUDQN µ:KRGUDQNWKHZLQH"¶ µ7DURGUDQNWKHZLQH 7KHLQIRUPDWLRQVWUXFWXUHRI-DSDQHVH $µ:KHUHGLG7DURGULQNZLQH"¶ %7DURZD ZDLQRL >QRPt\DGH@) WL QRQGD GUDQN 7DUR:$ ZLQH$&& EDUDW µ7DURGUDQNZLQHDWDEDU¶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µDPRQJWKHWKLQJVLQDSUHVXSSRVHGVHWWKHVSHDNHUZDQWVWRNQRZ ZKLFKRIWKHP7DURGUDQN¶ 1$QLRL 7DURZD WL QRQGDQR" ZKDW$&& 7DUR:$ GUDQN4 µ:KDWGLG7DURGULQN"¶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µ:KREURXJKWZKDWWR\HVWHUGD\¶VSDUW\"¶ 0XOWLSOH ZKTXHVWLRQV FDQ EH DQVZHUHG E\ VHQWHQFHV FRQWDLQLQJ PXOWLSOH IRFL7KHUHLVDSUHIHUHQFHWRNHHSWKHRUGHURIDUJXPHQWVWKHVDPHDVLQWKH SUHFHGLQJTXHVWLRQDVRXQGVPRVWQDWXUDOIRUWKHTXHVWLRQLQDDQG EIRUE D E >7$URJD@) >:$LQR@) 7DUR120 ZLQH$&& >:$LQRL@) >7$URJD@) ZLQH$&& 7DUR120 µ7DUREURXJKWZLQH¶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« +DQDNR120 EULQJFDPH DQG« E >:$LQR@) PRWWHNLWH >+$QDNRZD@&7 ZLQH$&& EULQJFRPH*(5 +DQDNR:$ PRWWHNLWD 6RVLWH« EULQJFDPH DQG«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µ+DQDNRVWROHFRRNLHV¶ %L WLJDLPDVX >R6(QEHHRL @) +DQDNRZDWL QXVXQGDQR GHVX LQFRUUHFW&23 ULFHFUDFNHU$&& +DQDNR:$ VWROH 10= &23 µ7KDW¶VQRWWUXH+DQDNRVWROHULFHFUDFNHUV¶ LLWLJDLPDVX >+DQDNRJDHL QXVXQGD QR@ZD >R6(QEHHL @)GHVX 10=:$ULFHFUDFNHU &23 LQFRUUHFW&23 +DQDNR120 VWROH µ7KDW¶VQRWWUXH,WLVULFHFUDFNHUVWKDW+DQDNRVWROH¶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¶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µ:KDWKDSSHQHG"¶ >ND*$PLRLNDJDPL2L +DQDNRJD WLNRZDVLWHVLPDWWD QR@) PLUURU$&& PLUURU$&& +DQDNR120 EUHDNHQGHGXS 6)3 µ+DQDNREURNHDPLUURU¶ ,QWHUPVRILQWHUSUHWDWLRQVSHDNHUVUHSRUWDVHQVHRIµVXUSULVH¶DWWKHIDFW WKDWLWZDVDPLUURUWKDWZDVEURNHQDVRSSRVHGWRRWKHUWKLQJV7KLVNLQG VFUDPEOLQJ GLIIHUV V\QWDFWLFDOO\ IURP FRQWUDVWLYH IRFXV LQ WKDW LW FDQQRW XQGHUJRORQJGLVWDQFHPRYHPHQW µ:KDWKDSSHQHG"¶ ND*$PLRL 7DURRJD >&3+DQDNRJD WL NRZDVLWHVLPDWWD WR@ LWWD PLUURU$&& 7DUR120 +DQDNR120 EUHDNHQGHGXS WKDW VDLG µ7DURVDLGWKDW+DQDNREURNHDPLUURU¶ )DQVHORZ DQG /HQHUWRYi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µ'LG7DUREX\WKDWERRN"¶ % L XQ VLWD \R \HV GR3$67 6)3 LL XQ 7DURZD DQRKRQR .$77$ \R \HV 7DUR:$ WKDWERRN$&& ERXJKW 6)3 LLL XQ .$77$ \R \HV ERXJKW 6)3 µ<HV7DURERXJKWWKDWERRN¶ ([DFWO\ WKH VDPH PHDQV DV VKRZQ LQ WKH H[DPSOH DERYH FDQ EH XVHG IRU LQVWDQFHV LQ ZKLFK WKH SRODULW\ RI D VWDWHPHQW LV FRQILUPHG RU FRUUHFWHG 7KXVWKHXWWHUDQFHVLQ%LLDQG%LLLPD\EHXVHGLQDIILUPLQJWKH VWDWHPHQW7DURZDDQRKRQRNDWWDµ7DURERXJKWWKDWERRN¶ )RFXVVHQVLWLYHSDUWLFOHV 7KHIRFXVVHQVLWLYHSDUWLFOHVGDNHµRQO\¶PRµDOVR¶DQGVDHµHYHQ¶DQGWKH QHJDWLYHSRODULW\LWHP13,VLNDµRQO\¶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µ2QO\$OVR(YHQ7DURERXJKW-DSDQHVHQRYHOVDWWKDWVKRS¶ 7DURJD DQRPLVHGHGDNHPRVDH QLKRQJRQRV\RRVHWXRNDWWD 7DUR120 WKDWVKRSDWRQO\DOVRHYHQ -DSDQHVH*(1QRYHO$&& ERXJKW µ7DURERXJKW-DSDQHVHQRYHOVRQO\DOVRHYHQDWWKDWVKRS¶ 7DURJD DQRPLVHGH QLKRQJRQR V\RRVHWXGDNHPRVDH NDWWD 7DUR120 WKDWVKRSDW -DSDQHVH*(1 QRYHORQO\DOVRHYHQ ERXJKW µ7DURERXJKWRQO\DOVRHYHQ-DSDQHVHQRYHOVDWWKDWVKRS¶ 7DURJD DQRPLVHGH QLKRQJRQR V\RRVHWXR NDLGDNHPRVDH VLWD 7DUR120 WKDWVKRSDW -DSDQHVH*(1 QRYHO$&& EX\RQO\DOVRHYHQGLG µ7DURRQO\DOVRHYHQERXJKW-DSDQHVHQRYHOVDWWKDWVKRS¶ 7KHWDUJHWRIWKHIRFXVVHQVLWLYHSDUWLFOHVLVQRWOLPLWHGWRWKHOH[LFDOLWHP WKDWWKH\DUHDWWDFKHGWR7KXVIRULQVWDQFHWKHWDUJHWLQPD\EHWKH REMHFWQLKRQJRQRV\RRVHWXµ-DSDQHVHQRYHOV¶DVZHOODVLWVVXESDUWVV\RR VHWX µQRYHO¶ DQG QLKRQJRQR µ-DSDQHVH¶ ,Q WKH WDUJHW RI WKH SDUWLFOH FDQEHWKHYHUENDLµEX\¶WKHREMHFWQLKRQJRQRV\RRVHWXµ-DSDQHVHQRYHOV¶ V\RRVHWXµQRYHO¶QLKRQJRQRµ-DSDQHVH¶WKH93DVZHOODVWKHORFDWLYHDQR PLVHGHµDWWKDWVKRS¶$VVRFLDWLRQZLWKWKHVXEMHFWLQ±LVQRWSRV VLEOH .XURGD )XWDJL .LVKLPRWR 7KH IROORZLQJ SDUDSKUDVHVZLWKDGGHGFRQWH[WXDOPDWHULDOGHVFULEHUHDGLQJVDYDLODEOHIRU WKHYDULRXVSRWHQWLDODVVRFLDWLRQVZLWKGDNHµRQO\¶LQ D NDLµEX\¶µ7DURRQO\ERXJKW-DSDQHVHQRYHOVDWWKDWVKRSEXWKH GLGQ¶WUHDGWKHP¶ E QLKRQJRQRV\RRVHWXµ-DSDQHVHQRYHOV¶µ7DURERXJKWRQO\ -DSDQHVHQRYHOVDWWKDWVKRSEXWQRWDQ\RWKHUUHDGLQJPDWHULDO -DSDQHVHRUQRW¶ F V\RRVHWXµQRYHO¶µ7DURERXJKWRQO\-DSDQHVHQRYHOVDWWKDWVKRS EXWQRW-DSDQHVHQRQILFWLRQ-DSDQHVHSRHWU\HWF¶ G QLKRQJRQRµ-DSDQHVH¶µ7DURERXJKWRQO\-DSDQHVHQRYHOVDWWKDW VKRSEXWQRW(QJOLVK)UHQFKHWFQRYHOV¶ 7KHLQIRUPDWLRQVWUXFWXUHRI-DSDQHVH H QLKRQJRQRV\RRVHWXRNDLµEX\-DSDQHVHQRYHOV¶µ7KHRQO\WKLQJ 7DURGLGZDVWREX\-DSDQHVHQRYHOVDWWKDWVKRS+HGLGQ¶WJRDQG VHHDILOPDWWKHFLQHPD¶ I DQRPLVHGHµWKDWVKRSDW¶µ7KHRQO\SODFHWKDW7DURERXJKW -DSDQHVHQRYHOVLVWKDWVKRS¶ $VVRFLDWLRQZLWKDOH[LFDOLWHPDFURVVDQLVODQGLVDOVRSRVVLEOH,QWKH IRFXVVHQVLWLYHSDUWLFOHVDUHDWWDFKHGWRWKHUHODWLYHKHDGQRXQDQGWKH\FDQ DVVRFLDWHZLWKLWEXWWKH\PD\DOVRDVVRFLDWHZLWKDQLWHPLQVLGHWKHUHOD WLYHFODXVH7KXVIRUGDNHµRQO\¶LWKDVWKHUHDGLQJµ7DURERXJKWRQO\WKH ERRN WKDW +DQDNR UHFRPPHQGHG¶ DV ZHOO DV µ7DUR ERXJKW WKH ERRN WKDW RQO\ +DQDNR UHFRPPHQGHG¶ 7KH WDUJHW RI WKH IRFXV SUHIHUDEO\ EHDUV DQ HPSKDWLFVWUHVV 7DURZD >&3+DQDNRJD HLVXLVHQVLWD@ KRQLGDNHPRVDH NDWWD 7DUR:$ +DQDNR120 UHFRPPHQGHG ERRNRQO\DOVRHYHQ ERXJKW 7KHSDUWLFOHGDNHµRQO\¶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³H[KDXVWLYHOLVWLQJUHDGLQJ´DQG³QHXWUDOGHVFULS WLRQ´LQ.XQR¶VWHUPLQRORJ\DVLQE.XURGD.XQR 'LHVLQJ+H\FRFND7RPLRNDDE D 7DURJD JDNXVHH GHVX E 7DURJD KDVLWWD 7DUR120 UDQ 7DUR120 VWXGHQW &23 µ,WLV7DURZKRLVDVWXGHQW¶ µ,WLV7DURZKRUDQ¶RUµ7DURUDQ¶ 7KHH[KDXVWLYHUHDGLQJDSSHDUVWREHDQLPSOLFDWXUHUDWKHUWKDQHQWDLOPHQW DV LW PD\ EH FDQFHOOHG HDVLO\ 7KXV D FDQ EH IROORZHG IHOLFLWRXVO\ E\ VRVLWH+DQDNRPRJDNXVHHGHVXµDQG+DQDNRWRRLVDVWXGHQW¶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µ,W¶VWKHHOHSKDQWVWKDWKDYHORQJWUXQNV¶ 7RN\RJD ]LNRJD RRL 7RN\R120 DFFLGHQW120 PDQ\ µ,W¶VLQ7RN\RWKDWWKHUHDUHPDQ\DFFLGHQWV¶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³FDWHJRULFDO´YV³WKHWLF´VHQWHQFHV±RUVHQWHQFHVZLWKRUZLWKRXW DWRSLF±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µWRSLFPDUNHU¶GHSHQGVWRDJUHDWH[WHQW RQ WKH GHILQLWLRQ RI µWRSLF¶ +HUH , ZLOO JHQHUDOO\ IROORZ WKH QRWLRQ RI WRSLFLQ5HLQKDUWDVGLVFXVVHGLQWKHLQWURGXFWLRQWRWKLVYROXPHEXW ,ZLOODOVRSRLQWRXWFDVHVZKHUHWKHWRSLFVWDWXVRIDZDPDUNHGLWHPLVQRW VRREYLRXV (YHU VLQFH WKH VHPLQDO ZRUNV RI .XURGD DQG .XQR WZR XVHV RI ZD KDYH EHHQ ZLGHO\ UHFRJQL]HG µWKHPDWLF¶ DQG µFRQWUDVWLYH¶ LQ .XQR¶VWHUPLQRORJ\,WHPVPDUNHGZLWKZDLQLWVWKHPDWLFXVHURXJKO\FRU UHVSRQG WR µVHQWHQFH WRSLFV¶ LQ WKH VHQVH RI 5HLQKDUW ZKLOH LWHPV PDUNHG ZLWK ZD LQ LWV FRQWUDVWLYH XVH URXJKO\ FRUUHVSRQG WR FRQWUDVWLYH WRSLFVLQWKHVHQVHGLVFXVVHGLQWKHLQWURGXFWLRQWRWKLVYROXPH)ROORZLQJ +H\FRFN¶V SUDFWLFH , ZLOO UHIHU WR WKH IRUPHU DV µQRQFRQWUDVWLYH¶ WRSLFVWREHPRUHWKHRU\QHXWUDO )RUWKLVUHDVRQ,JORVVWKHSDUWLFOHZDDVµ:$¶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µ7HOOPHVRPHWKLQJDERXW7DUR¶ DQRERRVLR NDWWD %L >7DURZD@7 NLQRR 7DUR:$ \HVWHUGD\ WKDWKDW$&& ERXJKW LL DQRERRVLRL >7DURZD@7 NLQRR WL NDWWD WKDWKDW$&& 7DUR:$ \HVWHUGD\ ERXJKW µ7DURERXJKWWKDWKDW\HVWHUGD\¶ $DQR ERRVLQLWXLWH QDQLND RVLHWHNXGDVDL WKDW KDWDERXW VRPHWKLQJ WHOOJLYH µ7HOOPHVRPHWKLQJDERXWWKDWKDW¶ %L >DQRERRVLZDL@7 7DURJD NLQRR HL NDWWD WKDWKDW:$ 7DUR120 \HVWHUGD\ ERXJKW NDWWD LL 7DURJD >DQR ERRVLZD@7 NLQRR \HVWHUGD\ ERXJKW 7DUR120 WKDW KDW:$ µ7DURERXJKWWKDWKDW\HVWHUGD\¶ $UJXPHQWWRSLFVDUHLQVHQVLWLYHWRLVODQGV.XQR+RML6DLWR ,QRWKHUZRUGVDQDUJXPHQWWRSLFFDQDSSHDULQDQRQWKHPDWLFOHIWSHULSK HUDOSRVLWLRQDQGEHFRQVWUXHGDVDQDUJXPHQWLQVLGHDQLVODQGVXFKDVD UHODWLYH FODXVH DV LOOXVWUDWHG EHORZ +RML 7KH WRSLF DQR ERRVL ZD µWKDW KDW:$¶ LV LQWHUSUHWHG DV WKH REMHFW LQVLGH WKH UHODWLYH FODXVH DQG FDQEHUHVXPHGE\DSURQRPLQDOVRUHRµLW$&&¶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µ6SHDNLQJRIWKDWKDW-RKQNQRZVZHOOWKHSHUVRQZKRZDVZHDULQJLW¶ 1RQDUJXPHQWVLQFOXGLQJH[WUDQRPLQDWLYHSKUDVHVLQWKHPXOWLSOHQRPLQD WLYHFRQVWUXFWLRQPHQWLRQHGDERYHFDQEHWRSLFV(DFKVHQWHQFHEHORZFDQ EHDQDQVZHUWRWKHUHTXHVWRIWKHIRUPWHOOPHVRPHWKLQJDERXW;ZKHUH; LVWKHZDPDUNHGLWHPLQWKHUHVSRQVH D E F >]RRZD@7 KDQDJD QDJDL HOHSKDQW:$ WUXQN120 ORQJ µ$QHOHSKDQWKDVDORQJWUXQN¶ RRLL >7RN\RZD@7 ]LNRJD 7RN\R:$ DFFLGHQW120 PDQ\ µ7KHUHDUHPDQ\DFFLGHQWVLQ7RN\R¶ >DQR NRRHQGHZD@7 NRGRPRWDWLJD \RNX DVREX FKLOGUHQ120 RIWHQ SOD\ WKDW SDUNDW:$ µ&KLOGUHQRIWHQSOD\LQWKDWSDUN¶ )UDPHVHWWHUVDUHDOVRZDPDUNHGDQGWKH\JHQHUDOO\RFFXS\VHQWHQFHLQLWLDO SRVLWLRQ([DPSOHVDUHJLYHQEHORZ7KHZDPDUNHGDGYHUELDOVLQDQG VRPHWLPHV FDOOHG µSXUH WRSLFV¶ DQG µFRQGLWLRQDO WRSLFV¶ UHVSHFWLYHO\ DUH QRW LQWHUSUHWHG DV ZKDW WKH VHQWHQFH LV DERXW LQ D PRVW REYLRXV ZD\ .XURGDDE7DWHLVKL N\RRZD 7DURJD WRV\RNDQH LNX WRGD\:$ 7DUR120 OLEUDU\WR JR µ7RGD\7DURLVJRLQJWRWKHOLEUDU\¶ KDQQLQZD -LURRJD D\DVLL SHUSHWUDWRU:$ -LUR120 VXVSLFLRXV /LWµ$VIRUWKHSHUSHWUDWRU-LURLVVXVSLFLRXV¶ VOLJKWO\PRGLILHGIURP7DWHLVKL \RPLWDL@ KLWRL@ZD NRNRQL DULPDVX >13>&3HLVLQEXQR QHZVSDSHU$&& UHDGZDQW SHUVRQ:$ KHUHDW H[LVW µ,I\RXZDQWWRUHDGQHZVSDSHUVWKH\DUHKHUH¶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µ<HVWHUGD\7DURERXJKWWKDWKDW¶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µ:KDWGLG7DUREX\"¶ %L 7DURZD NLQRR DQRERRVLR NDWWD 7DUR:$ \HVWHUGD\ WKDWKDW$&& ERXJKW LL DQRERRVLRL 7DURZD NLQRRWL NDWWD WKDWKDW$&& 7DUR:$ \HVWHUGD\ ERXJKW µ7DURERXJKWWKDWKDW\HVWHUGD\¶ $DQRERRVLZDGDUHJD NDWWD QR" WKDWKDWZD ZKRQRP ERXJKW 4 µ6SHDNLQJRIWKDWKDWZKRERXJKWLW"¶ 7KHLQIRUPDWLRQVWUXFWXUHRI-DSDQHVH %L DQRERRVLZDL7DURJD NLQRRHL NDWWD WKDWKDW:$ 7DUR120\HVWHUGD\ERXJKW LL 7DURJD DQRERRVLZD NLQRR NDWWD 7DUR120 WKDWKDW:$ \HVWHUGD\ ERXJKW µ7DURERXJKWWKDWKDW\HVWHUGD\¶ 5HFDOOWKDWZHVDZLQWKDWWKHZRUGRUGHULQ%LLLVLQIHOLFLWRXVDVD UHVSRQVHWRWKHUHTXHVWWHOOPHDERXW7DUR2QHUHOHYDQWGLIIHUHQFHEHWZHHQ WKHWZRFRQWH[WVDSSHDUVWREHWKHVWDWXVRI;LQWKHUHTXHVWV,QWKH TXHVWLRQ LQWURGXFHV 7DUR DV WKH WRSLF ZKLFK LV VXJJHVWHG E\ WKH IDFW WKDW 7DURLVPDUNHGE\ZDDQGWKHTXHVWLRQLVLQWHUSUHWHGDVEHLQJDERXW7DUR &RQVHTXHQWO\ 7DUR LQ WKH UHVSRQVH LV D FRQWLQXLQJ WRSLF LQ WKH VHQVH RI *LYyQ2QWKHRWKHUKDQGWHOOPHDERXW7DURLVDQH[SOLFLWLQVWUXF WLRQWRWKHKHDUHUWRLQWURGXFH7DURDVWKHWRSLF7KXV7DURLQWKHUHVSRQVH LQWURGXFHV WKH WRSLF DQG LV QRW D FRQWLQXLQJ WRSLF 7KH ODWWHU SRLQW LV VXS SRUWHGE\WKHIDFWWKDWWKHUHTXHVWFDQEHOHVVVSHFLILFVXFKDVWHOOPHDERXW VRPHRQHLQ\RXUFODVVIRUZKLFKWKHXWWHUDQFHLQ%L%LFDQVWLOO EH XVHG 6HH 5HLQKDUW *LYyQ /DPEUHFKW 9DOOGXYt DQG (QJGDKODPRQJRWKHUVIRUGLVFXVVLRQRQWKLVGLVWLQFWLRQ $FODXVHPD\KDYHPXOWLSOHQRQFRQWUDVWLYHZDSKUDVHV$WW\SLFDOH[DP SOHVLQYROYHVDIUDPHVHWWHUDQGDVXEMHFW.XURGD7KHDGYHUELDOPD\ DSSHDUZLWKRXWZDEXWWKHGLIIHUHQFHLQWKHLQWHUSUHWDWLRQLVQRWYHU\FOHDU 1RWUH'DPHQR 3DULVGHZD 0DVDRZD >13 (LIIHOWRRWR 3DULVLQ:$ 0DVDR:$ (LIIHOWRZHUDQG 1RWUH'DPH*(1 WRR@QL QRERWWD WRZHULQ FOLPEHG µ,Q3DULV0DVDRFOLPEHGXSWKH(LIIHOWRZHUDQGWKHWRZHURI1RWUH 'DPH¶ 1RQFRQWUDVWLYH ZDSKUDVHV DUH URRW SKHQRPHQD DQG DUH H[FOXGHG IURP PRVW VXERUGLQDWH FODXVHV VXFK DV FRQGLWLRQDOV UHODWLYH FODXVHV DGYHUELDO FODXVHV FRPSOHPHQW FODXVHV RI QRXQV DQG IDFWLYH SUHGLFDWHV 0DNL HW DO 7KHVH FODXVHV QRUPDOO\ GR QRW DOORZ D WRSLFFRPPHQW VWUXFWXUH RI WKHLU RZQ +RZHYHU QRQFRQWUDVWLYH ZDSKUDVHV GR RFFXU LQ DUJXPHQW FODXVHVKHDGHGE\YHUEVOLNHVLQ]LWHLUXµEHOLHYH¶DVLQDQGRWKHUVWKDW DUJXDEO\ VXEFDWHJRUL]H IRU VSHHFK DFWV VXFK DV HPEHGGHG LQWHUURJDWLYH FODXVHVDVLQ7KHH[DPSOHVDUHPRGLILHGIURP0DNLHWDO± FIDOVR.XURGD+DUD 5HLNR9HUPHXOHQ -RKQZD >NRQRKRQZD 0DU\JD \RQGD WR@ VL]LWHLUX -RKQ:$ WKLVERRN:$ 0DU\120 UHDG WKDW EHOLHYH µ-RKQEHOLHYHVWKDWWKLVERRN0DU\UHDG¶ -RKQZD >NRQRKRQZD 0DU\JD \RQGD NDGRRND@ VLULWDJDWWHLUX -RKQ:$ WKLV ERRN:$0DU\120 UHDG ZKHWKHU ZDQWWRNQRZ µ-RKQZDQWVWRNQRZZKHWKHUWKLVERRN0DU\UHDG¶ ,Q WHUPV RI SURVRG\ QRW DV PXFK DWWHQWLRQ KDV EHHQ SDLG WR ZDPDUNHG SKUDVHV DV WR FRQWUDVWLYH IRFXV DQG ZKSKUDVHV ,W KDV EHHQ FODLPHG RQ RFFDVLRQ WKDW D QRQFRQWUDVWLYH ZDSKUDVH IRUPV D VHSDUDWH LQWHUPHGLDWH SKUDVH1DJDKDUDDQG1DNDQLVKLSURYLGHVRPHVXJJHV WLYHHYLGHQFHIURPDQH[SHULPHQWDOVWXG\EHDULQJRXWWKHFODLP )LQDOO\WKHUHDUHDIHZRWKHUSDUWLFOHVWKDWPD\LQGLFDWHWRSLFKRRGVXFK DV QDUD 0XQDNDWD DQG WR LHED 6XFK SDUWLFOHV DUH FRPSDUDEOH WR WKH(QJOLVKSKUDVHVDVIRU«DQGVSHDNLQJRI«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¶VUHVSRQVHVHQVXUHWKHWRSLFVWDWXVRI WKHLQWHQGHGFRQWUDVWLYHWRSLFVµ%LOO¶DQGµEHDQV¶9HUPHXOHQWRDSSHDU([ ± 0RUH VSHFLILFDOO\ WKH JHQHUDOL]DWLRQ LV WKDW D ZDPDUNHG REMHFW LQVLWX PXVW EHLQWHUSUHWHGFRQWUDVWLYHO\+RZHYHUWKLVJHQHUDOL]DWLRQVHHPVWRKROGRQO\LI WKHSUHFHGLQJVXEMHFWLVPDUNHGZLWKWKHQRPLQDWLYHFDVHPDUNHU.XURGD 9HUPHXOHQWRDSSHDU,IWKHSUHFHGLQJVXEMHFWLVPDUNHGZLWKZDWKHQLWLVSRV VLEOHIRUWKHREMHFWZDSKUDVHLQVLWXWREHLQWHUSUHWHGZLWKRXWFRQWUDVW 7KHLQIRUPDWLRQVWUXFWXUHRI-DSDQHVH $ µ:KDWGLG-RKQHDWDWWKHSDUW\\HVWHUGD\"¶ % KPP-RKQZD GRRND VLUDQDL NHGR ZHOO -RKQ:$ KRZZKHWKHU NQRZQRW EXW µ:HOO,GRQ¶WNQRZDERXW-RKQEXW«¶ >PD0(R@) WDEHWHLWD \R L >%,OOZD@&7 ]LJRUR %LOO:$ R¶FORFNDURXQG EHDQV$&& HDWLQJZDV6)3 LL >PD0(RL@) >%,OOZD@&7 ]LJRURWL WDEHWHLWD \R R¶FORFNDURXQGHDWLQJZDV6)3 EHDQV$&& %LOO:$ µDVIRU%LOOKHZDVHDWLQJEHDQVDURXQGR¶FORFN¶ $ µ:KRDWHWKHSDVWDDWWKHSDUW\\HVWHUGD\"¶ % KPPSDVXWDZD GRRND VLUDQDL NHGR ZHOO SDVWD:$ KRZZKHWKHU NQRZQRW EXW µ:HOO,GRQ¶WNQRZDERXWWKHSDVWDEXW«¶ WDEHWHLWD \R L >%,OOJD@) >PD0(ZD@&7 ]LJRUR R¶FORFNDURXQG HDWLQJZDV 6)3 %LOO120 EHDQV:$ LL >PD0(ZDL@&7 >%,OOJD@) ]LJRURWL WDEHWHLWD \R %LOO120 R¶FORFNDURXQG HDWLQJZDV 6)3 EHDQV:$ µDVIRUWKHEHDQV%LOOZDVHDWLQJWKHPDURXQGR¶FORFN¶ 8QOLNHQRQFRQWUDVWLYHWRSLFVFRQWUDVWLYHWRSLFVDUHVHQVLWLYHWRLVODQGFRQ GLWLRQV7KLVLVLOOXVWUDWHGEHORZVOLJKWO\PRGLILHGIURP+RML "6XVDQ]\DQDNXWH>0$U\MZD@&7 -RKQJD >13>73HLNDQR]\RMREXWWD@ VKH$&& KLW 6XVDQQRWEXW 0DU\:$ -RKQ120 VDJDVLWHLUX KLWRLR SHUVRQ$&& ORRNLQJIRU /LWµ1RW6XVDQEXW0DU\-RKQLVORRNLQJIRUDSHUVRQZKRKLWKHU¶ 'LIIHUHQWNLQGVRIFRQWH[WVDUHUHTXLUHGIRUFRQWUDVWLYHO\ZDPDUNHGLWHPV WR DSSHDU HOVHZKHUH IHOLFLWRXVO\ 6XFK FRQWH[WV LQFOXGH SDUWLDO DQVZHUV DQGFDVHVZKHUHWKH\DUHSDUWRIDODUJHUIRFXV,QWHUHVWLQJO\LQ WKH ODWWHU FDVH WKH FRQWUDVWLYH LPSOLFDWXUH RI FRQWUDVWLYH ZD FDQ SHUFR ODWH WR D ODUJHU FRQVWLWXHQW OLNH IRFXV 7KXV LQ µUDLQ¶ DQG µXPEUHOOD¶ DUHQRWFRQWUDVWHGZLWKHDFKRWKHUEXWUDWKHUWKHWZRHYHQWVGHVFULEHGE\ WKH FODXVHV WKDW µLW ZDV UDLQLQJ¶ DQG WKDW µ-RKQ GLG QRW WDNH DQ XPEUHOOD ZLWK KLP¶ DUH )XUWKHUPRUH ZD PD\ DWWDFK GLUHFWO\ WR YHUEV FRQWUDVWLQJ WKHPH[SOLFLWO\LQZKLFKFDVHGRVXSSRUWLVUHTXLUHG:KHWKHUWKHVH ZDSKUDVHV VKRXOG EH DQDO\]HG DV FRQWUDVWLYH µWRSLFV¶ GHSHQGV RQ RQH¶V 5HLNR9HUPHXOHQ GHILQLWLRQ RI µFRQWUDVWLYH WRSLF¶ ,Q SDUWLFXODU WKH UHOHYDQW VHQWHQFHV GR QRWDSSHDUWREHµDERXW¶WKHZDPDUNHGLWHPVQRUDUHWKH\VSHFLILFERWKRI ZKLFKDUHFKDUDFWHULVWLFVRIµWRSLFV¶ $µ'LG-RKQEX\WKHVZHHWV"¶ % -RKQZD R6(QEHHZD NDWWD NHGR.8NNLLZD NDZDQDNDWWD -RKQ:$ ULFHFUDFNHU:$ERXJKW EXW FRRNLHV:$EX\QRW3$67 µ-RKQERXJKWULFHFUDFNHUVEXWKHGLGQ¶WEX\FRRNLHV¶ PRWWHLNDQDNDWWD@ >73$PHZD KXWWHLWDJD@ >73-RKQJD .$VDZD UDLQ:$ IDOOLQJZDVEXW-RKQ120 XPEUHOOD:$ EULQJJRQRW3$67 µ,WZDVUDLQLQJEXW-RKQGLGQRWWDNHDQXPEUHOODZLWKKLP¶ -RKQZD DQRKRQR ND,ZD VLWDJDPDGD \R0,ZD VLWHLQDL -RKQ:$WKDWERRN$&& EX\:$GLGEXW VWLOO UHDG:$ GRQRW µ-RKQERXJKWWKDWERRNEXWKHKDVQ¶WUHDGLW\HW¶ 7KH GLVWULEXWLRQ RI ZD LQ ±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µ$VIRUERRNVWKDW&KRPVN\ZURWHWKH\DUHDOZD\VSXEOLVKHG¶ ,PSOLFDWXUHµEXWERRNVWKDWRWKHUSHRSOHZURWHDUHQRWDOZD\VSXE OLVKHG¶ &RQWUDVWLYHZDSKUDVHVDUHSHUPLWWHGLQDZLGHUUDQJHRIHQYLURQPHQWVWKDQ QRQFRQWUDVWLYHZDSKUDVHV+DUD)RULQVWDQFHWKH\PD\DSSHDULQ EHFDXVHFODXVHV DV VKRZQ EHORZ 7KH H[DPSOH LV VOLJKWO\ PRGLILHG IURP +DUD 7KHLQIRUPDWLRQVWUXFWXUHRI-DSDQHVH LWVXPR >XWLQL -RKQZD NXUX QRGH@ R\DWVXR \RXLVXUX DOZD\V KRXVHWR-RKQ:$ FRPH EHFDXVH VZHHWV$&& SUHSDUHGR µ%HFDXVHDWOHDVW-RKQFRPHVWRRXUKRXVH,DOZD\VSUHSDUHVRPH VZHHWV¶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µ$ERRNZKLFKDWOHDVW&KRPVN\ZURWHLVDOZD\VSXEOLVKHG¶ KRQL@R NDWWD 7DURZD>13>&3+DQDNRPRHL VXLVHQVLWD@ +DQDNRDOVR UHFRPPHQGHG ERRN$&& ERXJKW 7DUR:$ µ7DURERXJKWWKHERRNWKDW+DQDNRWRRUHFRPPHQGHG¶ $ ILQDO LQVWDQFH RI VHQWHQFHPHGLDO FRQWUDVWLYH ZDPDUNHG SKUDVHV WR EH PHQWLRQHGLVVRFDOOHGµPLQLWRSLFV¶.XURGDZKLFKKDYHQRW UHFHLYHGPXFKDWWHQWLRQ7ZRH[DPSOHVDUHJLYHQEHORZVOLJKWO\PRGLILHG IURP.XURGD 7DQDNDJD DQRNDLJLQL KXUDQVX]LQZD DQRNDLJLQL 7DQDND120 WKDWPHHWLQJWR)UDQFHSHUVRQ:$WKDWPHHWLQJWR JHQJRJDNXV\DR\RQGD OLQJXLVW$&&LQYLWHG µ7DQDNDLQYLWHGOLQJXLVWVVRIDUDVWKH)UHQFKDUHFRQFHUQHGWRWKDW PHHWLQJ¶ )RU LQVWDQFH .XURGD UHSRUWV WKDW D FRQWUDVWLYHZDSKUDVH LV SHUPLWWHG LQVLGHDFRQGLWLRQDOFODXVHZKLOH+DUDUHSRUWVWKDWWKLVLVGLVDOORZHG 5HLNR9HUPHXOHQ 7DQDNDJD N\RQHQ ZDLQR $PHULNDNDUDZD N\RQHQ 7DQDN120 ODVW\HDU ZLQH$&& $PHULFDIURP:$ ODVW\HDU .DULKRUXQLDNDUD \XQ\XXVLWD &DOLIRUQLDIURP LPSRUWHG µ7DQDNDLPSRUWHGZLQHIURP&DOLIRUQLDODVW\HDUVRIDUDV$PHULFDLV FRQFHUQHG¶ $QLQWHUHVWLQJIHDWXUHRIPLQLWRSLFVLVWKDWWKH\VHHPWRKDYHDSDUWZKROH RU VHWVXEVHW UHODWLRQ ZLWK WKH IROORZLQJ REMHFW RU DGYHUELDO DQG KDYH WKH VDPH VHPDQWLF UHODWLRQ WR WKH YHUE 7KH ODWWHU SRLQW FDQ EH VHHQ IURP WKH IDFW WKDW LQ WKH ZDSKUDVH EHDUV WKH SRVWSRVLWLRQ NDUD µIURP¶ 7KLV LV QRWYLVLEOHLQDVFDVHPDUNHUVDUHJHQHUDOO\RPLWWHGLQWKHSUHVHQFHRI ZD6\QWDFWLFDOO\WKH\DUHVHSDUDWHIURPWKHDVVRFLDWHGREMHFWRUDGYHUELDO DWWKHFODXVDOOHYHODVDVHQWHQWLDODGYHUELDOPD\LQWHUYHQHEHWZHHQWKHP DVLQGLFDWHGDERYH,QWHUPVRILQWHUSUHWDWLRQ.XURGDFODLPVWKDWDFRQWUDVW ZLWK DOWHUQDWLYHV LV LPSOLFDWHG )RU LQVWDQFH WKH VSHDNHU PD\ IROORZ ZLWKµEXWDVIDUDVWKH.RUHDQVDUHFRQFHUQHG7DQDNDLQYLWHGSV\FKRORJLVWV¶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µ7DURSURPLVHG+DQDNRWKDWKHZRXOGPDUU\KHU¶ 7KHLQIRUPDWLRQVWUXFWXUHRI-DSDQHVH >2EVHUYLQJDVWXGHQWVPRNLQJLQWKHFODVVURRP@ D HKDLJDQGH VLQX NDPRVLUHQDL OXQJFDQFHURI GLH PD\ µ+HPD\GLHRIOXQJFDQFHU¶ E VHQVHHJD H VLNDUX GDURR WHDFKHU120 VFROG ZLOO µ7KHWHDFKHUZLOOVFROGKLP¶ 2Q WKH RWKHU KDQG DQ LWHP LQWURGXFLQJ D QHZ WRSLF FRQWUDVWLYH RU QRW FDQQRWEHD]HURH[SUHVVLRQHYHQLIWKHUHOHYDQWOH[LFDOLWHPLVPHQWLRQHG SUHYLRXVO\WKXVLQDQGWKHQRQFRQWUDVWLYHWRSLFFDQQRWEHDEVHQW DQGLQWKHFRQWUDVWLYHWRSLFPXVWEHRYHUW $µ:KDWGLG7DURDQG-LURHDW"¶ %+PP7DURZDGRRND VLUDQDL NHGR>-LURZDH@&7 ZHOO 7DUR:$KRZZKHWKHUNQRZQRWEXW -LUR:$ SDVXWDR WDEHWD SDVWD$&& DWH µ:HOO,GRQ¶WNQRZDERXW7DUREXW-LURDWHSDVWD¶ 6HFRQG DQ LQWHUPHGLDWH OHYHO RI JLYHQQHVV PD\ EH LQGLFDWHG E\ FDVH PDUNHUGURS$QREMHFWDGMDFHQWWRWKHYHUEDOORZVWKLVPRUHHDVLO\WKDQD VXEMHFWEXWWKHODWWHULVLQSULQFLSOHSRVVLEOHDVVKRZQEHORZ&DVHPDUNHU GURS RQ WKH VXEMHFW UHTXLUHV D KLJKHU OHYHO RI LQIRUPDOLW\ DQG D VHQWHQFH ILQDOSDUWLFOH7VXWVXL0DVXQDJD)XNXGD/HH DPHJD KXWWHLUX \R UDLQ120 IDOOLQJ6)3 RK µ2KLW¶VUDLQLQJ¶ 7KH SDUWLFOH ZD PD\ EH GURSSHG IURP D WRSLF DOWKRXJK WKLV DOVR UHTXLUHV LQIRUPDOLW\DQGDKLJKOHYHORIVDOLHQF\RIWKHKRVWLWHP7VXWVXL $WKLUGZD\RIH[SUHVVLQJJLYHQQHVVLVE\FRPSUHVVLRQRI)PRYHPHQW 7KLV RSWLRQ LV DYDLODEOH RQO\ WR SRVWIRFDO RU SRVWZK PDWHULDO 6XJDKDUD +ZDQJ+DUDDQG.DZDKDUD)pU\DQG,VKLKDUD )LQDOO\JLYHQPDWHULDOFDQULJKWGLVORFDWHWKDWLVDSSHDUWRWKHULJKWRI WKHYHUEZLWKRUZLWKRXWDFDVHPDUNHUDSRVWSRVLWLRQRUZD.XQR (QGR7DQDNDDQGPRUHWKDQRQHDUJXPHQWDGYHUELDOPD\GRVR VLPXOWDQHRXVO\,QWKHVXEMHFWDQGWKHREMHFWDUHULJKWGLVORFDWHG6HH 5HLNR9HUPHXOHQ 6KLPRMRIRUWKHGLIIHUHQWOHYHOVRIJLYHQQHVVDVVRFLDWHGZLWKVRPHRI WKHVWUDWHJLHVPHQWLRQHGKHUH \RQGD\R -RKQJDZD VRQRKRQRZD UHDG 6)3 -RKQ120:$ WKLVERRN$&&:$ µ-RKQUHDGWKLVERRN¶/LWµKHUHDGLW-RKQWKLVERRN¶ $ JLYHQ LWHP PD\ EH SDUW RI D IRFXV ,Q VXFK LQVWDQFHV WKH JLYHQ LWHP FDQQRWJHQHUDOO\EHD]HURH[SUHVVLRQDVVKRZQLQWKHIROORZLQJH[DPSOHV 7KH\DUHEHVWUHDOL]HGDVIXOO'3V $>+HDULQJVRPHQRLVHLQ7DUR¶VURRP@µ:KDWKDSSHQHGLQ7DUR¶VURRP"¶ % >737DURJD "NDUHJDH NDELQR NRZDVLWHVLPDWWD@) YDVH$&& EUHDNHQGHGXS 7DUR120 KH120 µ7DURKDVEURNHQDYDVH¶ $µ:KDWGLG7DUR¶VPRWKHUGR"¶ % NDQR]\RZD >937DURR"NDUHRH KRPHWD@) 7DUR$&&KH$&& SUDLVHG VKH:$ µ6KHSUDLVHG7DUR¶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± $R\DJL+LURVKLDQG6DFKLNR.DWR 2Q LQIRUPDWLRQ SDFNDJLQJ RI WRSLFDOL]HG DQG VFUDPEOHG VHQWHQFHV LQ -DSDQHVH &XUUHQW ,VVXHV LQ 8QLW\ DQG 'LYHUVLW\ RI /DQJXDJHV &ROOHFWLRQRI3DSHUV6HOHFWHGIURP&,/,QWHUQDWLRQDO&RQJUHVVRI /LQJXLVWV+HOGDW.RUHDQ8QLYHUVLW\LQ6HRXO3XEOLVKHGE\7KH /LQJXLVWLF6RFLHW\RI.RUHD± %HFNPDQ0DU\DQG-DQHW%3LHUUHKXPEHUW -DSDQHVH 7RQH 6WUXFWXUH &DPEULGJH 0DVVDFKXVHWWV ,QVWLWXWH RI 7HFKQRORJ\3UHVV &ODQF\3DWULFLD0 5HIHUHQWLDO FKRLFH LQ (QJOLVK DQG -DSDQHVH QDUUDWLYH GLVFRXUVH ,Q 7KH 3HDU 6WRULHV &RJQLWLYH &XOWXUDO DQG /LQJXLVWLF $VSHFWV RI 1DUUDWLYH 3URGXFWLRQ :DOODFH / &KDIH HG ± 1RUZRRG $EOH[ %ULQJ'DQLHO 7KH0HDQLQJRI7RSLFDQG)RFXV/RQGRQ5RXWOHGJH 'HJXFKL0DVDQRULDQG<RVKLKLVD.LWDJDZD 3URVRG\DQGZKTXHVWLRQV1RUWK(DVW/LQJXLVWLF6RFLHW\± 'LHVLQJ0ROO\ %DUHSOXUDOVXEMHFWVDQGWKHVWDJHLQGLYLGXDOFRQWUDVW,Q*HQHULFLW\ LQ1DWXUDO/DQJXDJH3URFHHGLQJVRIWKH7ELQJHQ&RQIHUHQFH 0DQIUHG.ULINDHG (QGR<RVKLR 5LJKW GLVORFDWLRQ )RUPDO $SSURDFKHV WR -DSDQHVH /LQJXLVWLFV 0DVVDFKXVHWWV,QVWLWXWHRI7HFKQRORJ\:RUNLQJ3DSHUVLQ/LQJXLVWLFV ± )DQVHORZ*LVEHUWDQG'HQLVD/HQHUWRYi /HIWSHULSKHUDOIRFXV0LVPDWFKHVEHWZHHQV\QWD[DQGLQIRUPDWLRQ VWUXFWXUH1DWXUDO/DQJXDJHDQG/LQJXLVWLF7KHRU\± )pU\&DUROLQHDQG6KLQLFKLUR,VKLKDUD +RZ IRFXV DQG JLYHQQHVV VKDSH SURVRG\ ,Q ,QIRUPDWLRQ 6WUXFWXUH IURP 'LIIHUHQW 3HUVSHFWLYHV 0DOWH =LPPHUPDQQ DQG &DUROLQ )pU\ HGV±2[IRUG2[IRUG8QLYHUVLW\3UHVV 5HLNR9HUPHXOHQ )XNXGD0LQRUX +HDG JRYHUQPHQW DQG FDVH PDUNHU GURS LQ -DSDQHVH /LQJXLVWLF ,QTXLU\± )XND\D7HUXKLNRDQG+DMLPH+RML 6WULSSLQJDQGVOXLFLQJLQ-DSDQHVHDQGVRPHLPSOLFDWLRQV:HVW&RDVW &RQIHUHQFHRQ)RUPDO/LQJXLVWLFV )XWDJL<RNR -DSDQHVHIRFXVSDUWLFOHVDWWKHV\QWD[VHPDQWLFVLQWHUIDFH3K'GLV VHUWDWLRQ5XWJHUV8QLYHUVLW\ *LYyQ7DOP\ 7RSLF&RQWLQXLW\LQ'LVFRXUVH$4XDQWLWDWLYH&URVV/DQJXDJH6WXG\ $PVWHUGDP-RKQ%HQMDPLQV +DUD<XULH *UDPPDURINQRZOHGJHUHSUHVHQWDWLRQ-DSDQHVHGLVFRXUVHLWHPVDW LQWHUIDFHV3K'GLVVHUWDWLRQ8QLYHUVLW\RI'HODZDUH +DUD<XULHDQG6KLJHWR.DZDKDUD 'HDFFHQWLQJ 0 $;,0,=( 35(683326,7,21 DQG HYLGHQWLDO VFDOHV ,Q3URFHHGLQJVRIWKH6SHHFK3URVRG\&RQIHUHQFH± +DUD<XULHDQG5REHUWYDQ5RRLM &RQWUDVWLYHWRSLFVUHYLVLWHGDVLPSOHUVHWRIWRSLFDOWHUQDWLYHV7DON SUHVHQWHGDW1RUWK(DVW/LQJXLVWLF6RFLHW\8QLYHUVLW\RI2WWDZD &DQDGD +DUDJXFKL6KRVXNH $FFHQW ,Q 7KH +DQGERRN RI -DSDQHVH /LQJXLVWLFV 1 7VXMLPXUD HG±2[IRUG%ODFNZHOOV +H\FRFN&DUROLQH D )RFXVSURMHFWLRQLQ-DSDQHVH3URFHHGLQJVRI1RUWK(DVW/LQJXLVWLF 6RFLHW\± +H\FRFN&DUROLQH E 6\QWDFWLFSUHGLFDWLRQLQ-DSDQHVH-RXUQDORI(DVW$VLDQ/LQJXLVWLFV ± +H\FRFN&DUROLQH -DSDQHVHZDJDDQGLQIRUPDWLRQVWUXFWXUH,Q 7KH2[IRUG+DQG ERRNRI-DSDQHVH/LQJXLVWLFV0DPRUX6DLWRDQG6KLJHUX0L\DJDZD HGV±2[IRUG2[IRUG8QLYHUVLW\3UHVV +LQGV-RKQ6HQNR0D\QDUGDQG6KRLFKL,ZDVDNL 3HUVSHFWLYHVRQ7RSLFDOL]DWLRQWKH&DVHRI-DSDQHVH:$$PVWHUGDP -RKQ%HQMDPLQV +LUDLZD.HQDQG6KLQLFKLUR,VKLKDUD 0LVVLQJOLQNVFOHIWVOXLFLQJDQGµµQRGD¶¶FRQVWUXFWLRQLQ-DSDQHVH 0DVVDFKXVHWWV,QVWLWXWHRI7HFKQRORJ\:RUNLQJ3DSHUVLQ/LQJXLVWLFV ± +RML+DMLPH /RJLFDOIRUPFRQVWUDLQWVDQGFRQILJXUDWLRQDOVWUXFWXUHVLQ-DSDQHVH 3K'GLVVHUWDWLRQ8QLYHUVLW\RI:DVKLQJWRQ 7KHLQIRUPDWLRQVWUXFWXUHRI-DSDQHVH +RML+DMLPH -DSDQHVH FOHIWV DQG UHFRQVWUXFWLRQFKDLQ ELQGLQJ HIIHFWV +DQGRXW RIWDONSUHVHQWHGDW:HVW&RDVW&RQIHUHQFHRQ)RUPDO/LQJXLVWLFV 8QLYHUVLW\RI$UL]RQD +ZDQJ+\XQ.\XQJ :KLQWRQDWLRQ DQG LQIRUPDWLRQ VWUXFWXUH LQ 6RXWK .\HRQJVDQJ .RUHDQ )XNXRND -DSDQHVH DQG 7RN\R -DSDQHVH 7DON SUHVHQWHG DW :RUNVKRSRQ,QWHUIDFHEDVHG$SSURDFKHVWR,QIRUPDWLRQ6WUXFWXUH 8QLYHUVLW\&ROOHJH/RQGRQ ,VKLKDUD6KLQLFKLUR 6WUHVVIRFXVDQGVFUDPEOLQJLQ-DSDQHVH0DVVDFKXVHWWV,QVWLWXWHRI 7HFKQRORJ\:RUNLQJ3DSHUVLQ/LQJXLVWLFV$)HZIURP%XLOGLQJ (± ,VKLKDUD6KLQLFKLUR ,QYLVLEOH EXW DXGLEOH ZKVFRSH PDUNLQJ :KFRQVWUXFWLRQV DQG GHDFFHQWLQJLQ-DSDQHVH3URFHHGLQJVRI:HVW&RDVW&RQIHUHQFHRQ )RUPDO/LQJXLVWLFV± ,VKLKDUD6KLQLFKLUR 3URVRG\ E\ SKDVH HYLGHQFH IURP IRFXV LQWRQDWLRQ ± ZKVFRSH FRU UHVSRQGHQFH LQ -DSDQHVH ,QWHUGLVFLSOLQDU\ 6WXGLHV RQ ,QIRUPDWLRQ 6WUXFWXUH± ,VKLKDUD6KLQLFKLUR 0DMRU SKUDVH IRFXV LQWRQDWLRQ PXOWLSOH VSHOORXW 7KH /LQJXLVWLF 5HYLHZ± ,VKLKDUD6KLQLFKLUR WRDSSHDU ,QWRQDWLRQ RI ZK DQG \HVQRTXHVWLRQ LQ 7RN\R -DSDQHVH ,Q &RQ WUDVWLYHQHVVDQG6FDODU,PSOLFDWXUH)HUHQF.LHIHU0DQIUHG.ULIND DQG&KXQJPLQ/HHHGV ,VKL]XND7RPRNR $OLHQDEOH,QDOLHQDEOH$V\PPHWU\LQ-DSDQHVHDQG.RUHDQ3RVVHVVLRQ 83HQQ:RUNLQJ3DSHUVLQ/LQJXLVWLFV -DFNHQGRII5D\ 6HPDQWLF,QWHUSUHWDWLRQLQ*HQHUDWLYH*UDPPDU&DPEULGJH0DVVD FKXVHWWV,QVWLWXWHRI7HFKQRORJ\3UHVV .LP6RRZRQ 6ORSS\VWULFWLGHQWLW\HPSW\REMHFWVDQG13HOOLSVLV-RXUQDORI(DVW $VLDQ/LQJXLVWLFV± .LVKLPRWR+LGHNL 7RSLFSURPLQHQF\LQ-DSDQHVH7KH/LQJXLVWLF5HYLHZ±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± 5HVHDUFK ,QVWLWXWHRI/RJRSHGLFVDQG3KRQLDWULFV8QLYHUVLW\RI7RN\R .XURGD6LJH<XNL 7KH FDWHJRULFDO DQG WKH WKHWLF MXGJPHQW HYLGHQFH IURP -DSDQHVH V\QWD[)RXQGDWLRQVRI/DQJXDJH± .XURGD6LJH<XNL D 0RYHPHQW RI QRXQ SKUDVHV LQ -DSDQHVH 5HSULQWHG LQ 6LJH<XNL .XURGD .XURGD6LJH<XNL E :KDW KDSSHQHG DIWHU WKH PRYHPHQW RI QRXQ SKUDVH LQ /D -ROOD 5HSULQWHGLQ6LJH<XNL.XURGD .XURGD6LJH<XNL :KHWKHU ZH DJUHH RU QRW $ FRPSDUDWLYH V\QWD[ RI (QJOLVK DQG -DSDQHVH/LQJXLVWLFDH,QYHVWLJDWLRQHV± .XURGD6LJH<XNL &RJQLWLYH DQG V\QWDFWLF EDVHV RI WRSLFDOL]HG DQG QRQWRSLFDOL]HG VHQWHQFHV LQ -DSDQHVH ,Q -DSDQHVH.RUHDQ /LQJXLVWLFV +DMLPH +RML HG ± 6WDQIRUG &HQWHU IRU WKH 6WXG\ RI /DQJXDJH DQG ,QIRUPDWLRQ .XURGD6LJH<XNL -DSDQHVH 6\QWD[ DQG 6HPDQWLFV &ROOHFWHG 3DSHUV 'RUGUHFKW .OXZHU .XURGD6LJH<XNL )RFXVLQJRQWKHPDWWHURIWRSLF$VWXG\RIZDDQGJDLQ-DSDQHVH -RXUQDORI(DVW$VLDQ/LQJXLVWLFV± /DPEUHFKW.QXG ,QIRUPDWLRQ 6WUXFWXUH DQG 6HQWHQFH )RUP &DPEULGJH &DPEULGJH 8QLYHUVLW\3UHVV /HH.LUL 1RPLQDWLYHFDVHPDUNHUGHOHWLRQLQVSRNHQ-DSDQHVHDQDQDO\VLVIURP WKHSHUVSHFWLYHRILQIRUPDWLRQVWUXFWXUH-RXUQDORI3UDJPDWLFV ± 7KHLQIRUPDWLRQVWUXFWXUHRI-DSDQHVH 0DNL+LGHNL/L]DQQH.DLVHUDQG0DVDR2FKL (PEHGGHGWRSLFDOL]DWLRQLQ(QJOLVKDQG-DSDQHVH/LQJXD± 0DVXQDJD.L\RNR 1RQWKHPDWLF SRVLWLRQV DQG GLVFRXUVH DQDSKRUD 3K' GLVVHUWDWLRQ +DUYDUG8QLYHUVLW\ 0DVXQDJD.L\RNR &DVH GHOHWLRQ DQG GLVFRXUVH FRQWH[W ,Q 3DSHUV IURP WKH 6HFRQG ,QWHUQDWLRQDO:RUNVKRSRQ-DSDQHVH6\QWD[:LOOLDP-3RVHUHG ±6WDQIRUG&HQWHUIRUWKH6WXG\RI/DQJXDJHDQG,QIRUPDWLRQ 0F&UHDG\(ULF 2QWKHPHDQLQJRI-DSDQHVH\R/HFWXUH1RWHVLQ&RPSXWHU6FLHQFH ± 0L\DJDZD6KLJHUX 2QWKHµµXQGRLQJ¶¶SURSHUW\RIVFUDPEOLQJ$UHVSRQVHWR%RãNRYLü /LQJXLVWLF,QTXLU\± 0XQDNDWD7DNDVKL -DSDQHVH WRSLFFRQVWUXFWLRQV LQ WKH PLQLPDOLVW YLHZ RI WKH V\QWD[ VHPDQWLFVLQWHUIDFH,Q0LQLPDOLVW(VVD\V&HGULF%RHFN[HG± $PVWHUGDP-RKQ%HQMDPLQ 1DJDKDUD+LUR\XNL 3KRQRORJLFDOSKUDVLQJLQ-DSDQHVH3K'GLVVHUWDWLRQ8QLYHUVLW\RI &DOLIRUQLD/RV$QJHOHV 1DNDQLVKL.LPLNR 3URVRG\DQGLQIRUPDWLRQVWUXFWXUHLQ-DSDQHVH$FDVHVWXG\RIWRSLF PDUNHUZD-DSDQHVH.RUHDQ/LQJXLVWLFV± 1DNDQLVKL.LPLNR 3URVRG\DQGVFRSHLQWHUSUHWDWLRQVRIWKHWRSLFPDUNHUZDLQ-DSDQHVH ,Q7RSLFDQG)RFXV&URVVOLQJXLVWLF3HUVSHFWLYHVRQ0HDQLQJDQG ,QWRQDWLRQ &KXQJPLQ /HH 0DWWKHZ *RUGRQ DQG 'DQLHO %ULQJ HGV±'RUGUHFKW6SULQJHU 1HHOHPDQ$GDQG7DQ\D5HLQKDUW 6FUDPEOLQJ DQG WKH 3) LQWHUIDFH ,Q 7KH 3URMHFWLRQ RI $UJXPHQWV 0LULDP%XWWDQG:LOKHOP*HXGHUHGV±6WDQIRUG&HQWHU IRUWKH6WXG\RI/DQJXDJHDQG,QIRUPDWLRQ 2VKLPD'DYLG< 0RUSKRORJLFDOYVSKRQRORJLFDOFRQWUDVWLYHWRSLFPDUNLQJ3URFHHGLQJV RI&KLFDJR/LQJXLVWLF6RFLHW\± 6DLWR0DPRUX 6RPH $V\PPHWULHV LQ -DSDQHVH DQG WKHLU WKHRUHWLFDO LPSOLFDWLRQV 3K'WKHVLV0DVVDFKXVHWWV,QVWLWXWHRI7HFKQRORJ\ 6DLWR0DPRUX 6FUDPEOLQJ DV VHPDQWLFDOO\ YDFXRXV $¶PRYHPHQW ,Q $OWHUQDWLYH &RQFHSWLRQVRI3KUDVH6WUXFWXUH0DUN%DOWLQDQG$QWKRQ\.URFK HGV±&KLFDJR8QLYHUVLW\RI&KLFDJR3UHVV 5HLNR9HUPHXOHQ 6DVVH+DQV-UJHQ 7KHWKHWLFFDWHJRULFDOGLVWLQFWLRQUHYLVLWHG/LQJXLVWLFV± 6HONLUN(OLVDEHWKDQG.RLFKL7DWHLVKL 6\QWD[DQGGRZQVWHSLQ-DSDQHVH,Q ,QWHUGLVFLSOLQDU\$SSURDFKHV WR/DQJXDJH(VVD\VLQ+RQRURI6<.XURGD&DURO*HRUJRSRXORXV DQG5REHUWD,VKLKDUDHGV±'RUGUHFKW.OXZHU 6KLEDWDQL0DVD\RVKL 7KH/DQJXDJHVRI-DSDQ&DPEULGJH&DPEULGJH8QLYHUVLW\3UHVV 6KLPRMR0LWVXDNL $UJXPHQW(QFRGLQJ,Q-DSDQHVH&RQYHUVDWLRQ1HZ<RUN3DOJUDYH 0DFPLOODQ 6XJDKDUD0DULNR 'RZQWUHQGVDQGSRVWIRFXVLQWRQDWLRQLQ7RN\R-DSDQHVH3K'GLV VHUWDWLRQ8QLYHUVLW\RI0DVVDFKXVHWWV 7DNDKDVKL'DLNR 1RXQSKUDVHHOOLSVLV,Q7KH2[IRUG+DQGERRNRI-DSDQHVH/LQJXLV WLFV0DPRUX6DLWRDQG6KLJHUX0L\DJDZDHGV±2[IRUG 2[IRUG8QLYHUVLW\3UHVV 7DNDQR<XML 6XUSULVLQJFRQVWLWXHQWV-RXUQDORI(DVW$VLDQ/LQJXLVWLFV± 7DQDND+LGHND]X 5LJKWGLVORFDWLRQDVVFUDPEOLQJ-RXUQDORI/LQJXLVWLFV± 7DWHLVKL.RLFKL 7KH6\QWD[RI6XEMHFWV6WDQIRUG&HQWHUIRUWKH6WXG\RI/DQJXDJH DQG,QIRUPDWLRQ 7RPLRND6DWRVKL ,QIRUPDWLRQ VWUXFWXUH DQG GLVDPELJXDWLRQ LQ -DSDQHVH :HVW &RDVW &RQIHUHQFHRQ)RUPDO/LQJXLVWLFV± 7RPLRND6DWRVKL D 3UDJPDWLFVRI/)LQWHUYHQWLRQHIIHFWV-DSDQHVHDQG.RUHDQZKLQWHU URJDWLYHV-RXUQDORI3UDJPDWLFV± 7RPLRND6DWRVKL E 7KH-DSDQHVHH[LVWHQWLDOSRVVHVVLRQ$FDVHVWXG\RISUDJPDWLFGLV DPELJXDWLRQ/LQJXD± 7RPLRND6DWRVKL &RQWUDVWLYHWRSLFVRSHUDWHRQVSHHFKDFWV,Q,QIRUPDWLRQ6WUXFWXUH 7KHRUHWLFDO 7\SRORJLFDO DQG ([SHULPHQWDO 3HUVSHFWLYHV 0DOWH =LPPHUPDQQ DQG &DUROLQ )pU\ HGV 2[IRUG 2[IRUG 8QLYHUVLW\ 3UHVV 7VXWVXL0LFKLR 3DUWLFOHHOOLSVHVLQ-DSDQHVH3K'GLVVHUWDWLRQ8QLYHUVLW\RI,OOLQRLV 9DOOGXYt(QULFDQG(OLVDEHW(QJGDKO 7KHOLQJXLVWLFUHDOL]DWLRQRILQIRUPDWLRQSDFNDJLQJ /LQJXLVWLFV ± 7KHLQIRUPDWLRQVWUXFWXUHRI-DSDQHVH 9HUPHXOHQ5HLNR 3RVVHVVLYHDQGDGMXQFWPXOWLSOHQRPLQDWLYHFRQVWUXFWLRQVLQ-DSDQHVH /LQJXD± 9HUPHXOHQ5HLNR 1RQWRSLFDO ZDSKUDVHV LQ -DSDQHVH ,Q ,QWHUIDFHV LQ /LQJXLVWLFV 1HZ 5HVHDUFK 3HUVSHFWLYHV 5DIIDHOOD )ROOL DQG &KULVWLDQH 8OEULFK HGV±2[IRUG2[IRUG8QLYHUVLW\3UHVV 9HUPHXOHQ5HLNR WRDSSHDU 2Q WKH SRVLWLRQ RI WRSLFV LQ -DSDQHVH 7R DSSHDU LQ 7KH /LQJXLVWLF 5HYLHZ :DWDQDEH$NLUD :KDQGRSHUDWRUFRQVWUXFWLRQVLQ-DSDQHVH/LQJXD±
© Copyright 2026 Paperzz