01a0210p.06

7KH +RQRUDEOH -DPHV / *UDKDP 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU
WKH 6RXWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
3XUVXDQW WR 6L[WK &LUFXLW 5XOH
(/(&7521,& &,7$7,21 )(' $SS 3 WK &LU
)LOH 1DPH DS
81,7('67$7(6&28572)$33($/6
)257+(6,;7+&,5&8,7
BBBBBBBBBBBBBBBBB
:5(1&+ //&D0LFKLJDQ
/LPLWHG/LDELOLW\&RPSDQ\
-26(3+ 6+,(/'67+20$6
5,1.6
3ODLQWLIIV$SSHOODQWV
Y
7$&2 %(// &253
'HIHQGDQW$SSHOOHH
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH:HVWHUQ'LVWULFWRI0LFKLJDQDW*UDQG5DSLGV
1R²*RUGRQ-4XLVW'LVWULFW-XGJH
$UJXHG6HSWHPEHU
'HFLGHGDQG)LOHG-XO\
%HIRUH%$7&+(/'(5DQG&2/(&LUFXLW-XGJHV
*5$+$0'LVWULFW-XGJH

-- 1 of 14 --

:UHQFK//&HWDOY7DFR%HOO&RUS 1R
BBBBBBBBBBBBBBBBB
&2816(/
$5*8('-HIIUH\2%LUNKROG:$51(5125&5266
-8'' //3 *UDQG 5DSLGV 0LFKLJDQ IRU $SSHOODQWV
5DQGDOO*/LWWRQ35,&(+(1(9(/'&223(5'H:,77
/,7721 *UDQG 5DSLGV 0LFKLJDQ IRU $SSHOOHH
21 %5,() -HIIUH\ 2 %LUNKROG 'RXJODV $ 'R]HPDQ
9DOHULH36LPPRQV:$51(5125&5266 -8''//3
*UDQG5DSLGV0LFKLJDQIRU$SSHOODQWV5DQGDOO*/LWWRQ
35,&( +(1(9(/' &223(5 'H:,77 /,7721
*UDQG5DSLGV0LFKLJDQ5LFKDUG-2¶%ULHQ3DXO(9HLWK
6,'/(< $867,1&KLFDJR,OOLQRLV$UWKXU6)ULHGPDQ
)5,('0$1:$1* %/(,%(5*3&1HZ<RUN1HZ
<RUNIRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
-$0(6/*5$+$0'LVWULFW-XGJH7KLVFDVHUDLVHVD
TXHVWLRQRIILUVWLPSUHVVLRQLQWKLVFLUFXLWUHJDUGLQJWKHH[WHQW
WRZKLFKWKH&RS\ULJKW$FWSUHHPSWVVWDWHODZFODLPVEDVHG
RQ EUHDFK RI DQ LPSOLHGLQIDFW FRQWUDFW 3ODLQWLIIV
$SSHOODQWV:UHQFK//&-RVHSK6KLHOGVDQG7KRPDV5LQNV
EURXJKWWKLVGLYHUVLW\DFWLRQDJDLQVW'HIHQGDQW$SSHOOHH7DFR
%HOO&RUSRUDWLRQ ³7DFR%HOO´ FODLPLQJEUHDFKRILPSOLHG
FRQWUDFWDQGYDULRXVWRUWVUHODWHGWR7DFR%HOO¶VDOOHJHGXVHRI
DSSHOODQWV¶LGHDV,QWKUHHVHSDUDWHRSLQLRQVWKHGLVWULFWFRXUW
IRXQGWKDWWKH&RS\ULJKW$FW86&†SUHHPSWHGDOO
RIDSSHOODQWV¶FODLPVLQFOXGLQJWKRVHEDVHGRQEUHDFKRIDQ
LPSOLHGLQIDFW FRQWUDFW 2Q WKDW EDVLV DV ZHOO DV RQ WKH
DOWHUQDWHJURXQGWKDWDSSHOODQWV¶FRQFHSWODFNHGWKHQRYHOW\
QHFHVVDU\ WR VXVWDLQ WKHLU FODLPV WKH GLVWULFW FRXUW JUDQWHG
VXPPDU\MXGJPHQWWR7DFR%HOO$SSHOODQWVQRZDSSHDOWKH
GLVWULFW FRXUW¶V JUDQW RI VXPPDU\ MXGJPHQW DQG DUJXH WKH
IROORZLQJ WKDWWKHGLVWULFWFRXUWHUUHGLQLWVSUHHPSWLRQ
DQDO\VLVXQGHUERWKWKH³VXEMHFWPDWWHU´DQG³HTXLYDOHQF\´
SURQJVRI86&† D DQG WKDWWKHGLVWULFWFRXUW

-- 2 of 14 --

:UHQFK//&HWDOY7DFR%HOO&RUS 1R
JHQHUDOO\ EXW WKDW QRYHOW\ WR WKH EX\HU ZRXOG VXIILFH WR
VXSSRUWDFRQWUDFWEDVHGFODLP6HH1DGHOY3OD\%\3OD\
7R\V 1RYHOWLHV,QF)G QG&LU
³>7@KH$SIHOFRXUWFODULILHGWKDWWKHORQJVWDQGLQJUHTXLUHPHQW
WKDWDQLGHDKDYHRULJLQDOLW\RUJHQHUDO QRYHOW\LQRUGHUWR
VXSSRUWDPLVDSSURSULDWLRQFODLPGRHVQRWDSSO\WRFRQWUDFW
FODLPV)RUFRQWUDFWEDVHGFODLPVLQVXEPLVVLRQRILGHD
FDVHVDVKRZLQJRIQRYHOW\WRWKHEX\HUZLOOVXSSO\VXIILFLHQW
FRQVLGHUDWLRQWRVXSSRUWDFRQWUDFW´
:KLOH ZH FRQFOXGH WKDW 0LFKLJDQ ZRXOG QRW LPSRVH D
UHTXLUHPHQW RI QRYHOW\ LQ DQ DFWLRQ EDVHG XSRQ D FRQWUDFW
LPSOLHGLQIDFWLWGRHVQRWDSSHDUWKDWWKHUHVXOWRIWKLVFDVH
ZRXOGFKDQJHHYHQLI0LFKLJDQZHUHWRIROORZWKH1HZ<RUN
YLHZZKLFKUHTXLUHVRQO\QRYHOW\WRWKHGHIHQGDQW+HUH
7DFR %HOO GRHV QRW FODLP WKDW LW ZDV DZDUH RI DSSHOODQWV¶
LGHDV SULRU WR GLVFORVXUH $FFRUGLQJO\ ZH ILQG WKDW WKH
GLVWULFW FRXUW HUUHG LQ JUDQWLQJ VXPPDU\ MXGJPHQW WR WKH
DSSHOOHHRQWKHJURXQGWKDWDSSHOODQWVIDLOHGWRVKRZWKDWWKHLU
LGHDVZHUHQRYHORURULJLQDO
,,,&21&/86,21
7KHMXGJPHQWRIWKHGLVWULFWFRXUWLV5(9(56('DQGWKLV
DFWLRQ LV 5(0$1'(' WR WKH GLVWULFW FRXUW IRU IXUWKHU
SURFHHGLQJVFRQVLVWHQWZLWKWKLVRSLQLRQ
1R :UHQFK//&HWDOY7DFR%HOO&RUS
HUUHG LQ KROGLQJ WKDW QRYHOW\ ZDV UHTXLUHG WR VXVWDLQ WKHLU
LPSOLHGLQIDFWFRQWUDFWFODLPDQGIXUWKHUWKDWWKHLULGHDVDQG
FRQFHSWVODFNHGQRYHOW\DVDPDWWHURIODZ)RUWKHUHDVRQV
WKDWIROORZZH5(9(56(WKHMXGJPHQWRIWKHGLVWULFWFRXUW
DQGUHPDQGWKLVFDVHIRUIXUWKHUSURFHHGLQJV
,%$&.*5281'
$SSHOODQWV7KRPDV5LQNVDQG-RVHSK6KLHOGVDUHFUHDWRUV
RI WKH ³3V\FKR &KLKXDKXD´ FDUWRRQ FKDUDFWHU ZKLFK WKH\
SURPRWH PDUNHW DQG OLFHQVH WKURXJK WKHLU ZKROO\RZQHG
0LFKLJDQ OLPLWHG OLDELOLW\ FRPSDQ\ :UHQFK //& 7KH
SDUWLHVKDYHGHVFULEHG3V\FKR&KLKXDKXDDVDFOHYHUIHLVW\
GRJZLWKDQDWWLWXGHDVHOIFRQILGHQWHGJ\FRROGRJZKR
NQRZVZKDWKHZDQWVDQGZLOOQRWEDFNGRZQ
,Q-XQH6KLHOGVDQG5LQNVDWWHQGHGDOLFHQVLQJWUDGH
VKRZLQ1HZ<RUN&LW\ZKHUHWKH\ZHUHDSSURDFKHGE\WZR
7DFR%HOOHPSOR\HHV5XG\3ROODNDYLFHSUHVLGHQWDQG(G
$OIDUR D FUHDWLYH VHUYLFHV PDQDJHU 3ROODN DQG $OIDUR
H[SUHVVHGLQWHUHVWLQWKH3V\FKR&KLKXDKXDFKDUDFWHUZKLFK
WKH\WKRXJKWZRXOGDSSHDOWR7DFR%HOO¶VFRUHFRQVXPHUV
PDOHV DJHG HLJKWHHQ WR WZHQW\IRXU 3ROODN DQG $OIDUR
REWDLQHGVRPH3V\FKR&KLKXDKXDPDWHULDOVWRWDNHZLWKWKHP
EDFNWR7DFR%HOO¶VKHDGTXDUWHUVLQ&DOLIRUQLD
8SRQUHWXUQLQJWR&DOLIRUQLD$OIDUREHJDQSURPRWLQJWKH
3V\FKR&KLKXDKXDLGHDZLWKLQ7DFR%HOO$OIDURFRQWDFWHG
5LQNVDQGDVNHGKLPWRFUHDWHDUWERDUGVFRPELQLQJ3V\FKR
&KLKXDKXDZLWKWKH7DFR%HOOQDPHDQGLPDJH5LQNVDQG
6KLHOGVSUHSDUHGWKHDUWERDUGVDQGVHQWWKHPWR$OIDURDORQJ
ZLWK3V\FKR&KLKXDKXD7VKLUWVKDWVDQGVWLFNHUVIRU$OIDUR
WRXVHLQSURPRWLQJWKHFKDUDFWHU%HFDXVH$OIDURZDVQRW
SDUWRIWKHPDUNHWLQJJURXSDW7DFR%HOOKHILUVWVRXJKWWR
JDLQ VXSSRUW IRU 3V\FKR &KLKXDKXD IURP WRS H[HFXWLYHV
RXWVLGHRIWKHPDUNHWLQJGHSDUWPHQW$IWHUVHYHUDOPHHWLQJV
ZLWKQRQPDUNHWLQJH[HFXWLYHV$OIDURVKRZHGWKH3V\FKR
&KLKXDKXDPDWHULDOVWR9DGD+LOO7DFR%HOO¶VYLFHSUHVLGHQW
RIEUDQGPDQDJHPHQWDVZHOODVWR7DFR%HOO¶VWKHQRXWVLGH
DGYHUWLVLQJDJHQF\%R]HOO:RUOGZLGH$OIDURDOVRWHVWHGWKH
3V\FKR&KLKXDKXDPDUNHWLQJFRQFHSWZLWKIRFXVJURXSVWR

-- 3 of 14 --

:UHQFK//&HWDOY7DFR%HOO&RUS 1R
JDXJHFRQVXPHUUHDFWLRQWRWKHGHVLJQVVXEPLWWHGE\5LQNV
DQG6KLHOGV
'XULQJWKLVWLPHSHULRG5LQNVWROG$OIDURWKDWLQVWHDGRI
XVLQJ WKH FDUWRRQ YHUVLRQ RI 3V\FKR &KLKXDKXD LQ LWV
WHOHYLVLRQDGYHUWLVHPHQWV7DFR%HOOVKRXOGXVHDOLYHGRJ
PDQLSXODWHG E\ FRPSXWHU JUDSKLF LPDJLQJ ZLWK WKH
SHUVRQDOLW\RI3V\FKR&KLKXDKXDDQGDORYHIRU7DFR%HOO
IRRG5LQNVDQG$OIDURDOVRGLVFXVVHGZKDWLWZDVJRLQJWR
FRVWIRU7DFR%HOOWRXVHDSSHOODQWV¶FKDUDFWHUDQGDOWKRXJK
QRVSHFLILFQXPEHUVZHUHPHQWLRQHG$OIDURXQGHUVWRRGWKDW
LI7DFR%HOOXVHGWKH3V\FKR&KLKXDKXDFRQFHSWLWZRXOG
KDYHWRSD\DSSHOODQWV
,Q 6HSWHPEHU 5LQNV DQG 6KLHOGV KLUHG 6WUDWHJ\
/LFHQVLQJ ³6WUDWHJ\´ DOLFHQVLQJDJHQWWRUHSUHVHQW:UHQFK
LQLWVGHDOLQJVZLWK7DFR%HOO5HSUHVHQWDWLYHVIURP6WUDWHJ\
FRQWDFWHG $OIDUR DERXW 7DFR %HOO¶V LQWHUHVW LQ WKH 3V\FKR
&KLKXDKXD FRQFHSW DQG SUHVHQWHG KLP ZLWK DGGLWLRQDO
PDWHULDOVIRUSUHVHQWDWLRQWR7DFR%HOO¶VDGYHUWLVLQJDJHQF\
7KHVHPDWHULDOVGHVFULEHG3V\FKR&KLKXDKXDDV³LUUHYHUHQW´
³HGJ\´DQG³VSLF\´ZLWKDQ³RYHUWKHWRS´DWWLWXGHDQGDQ
³LQVDWLDEOHFUDYLQJ´IRU7DFR%HOOIRRG7KURXJKRXWWKHODWH
VXPPHUDQGIDOORI$OIDURFRQWLQXHGKLVGLVFXVVLRQV
ZLWK:UHQFKDERXWGHYHORSLQJ3V\FKR&KLKXDKXDIRU7DFR
%HOO¶VXVH
2Q1RYHPEHU6WUDWHJ\UHSUHVHQWDWLYHVIRUZDUGHG
DOLFHQVLQJSURSRVDOWR$OIDUR7KHSURSRVDOSURYLGHGWKDW
7DFR%HOOZRXOGSD\:UHQFKDIHHEDVHGXSRQDSHUFHQWDJH
RI WKH PRQH\ VSHQW RQ DGYHUWLVLQJ D SHUFHQWDJH RI 7DFR
%HOO¶VUHWDLOOLFHQVLQJVDOHVDQGDSHUFHQWDJHRIWKHFRVWRI
SUHPLXPVVXFKDVWR\VVROGDW7DFR%HOOUHVWDXUDQWV7DFR
%HOOGLGQRWDFFHSWWKLVSURSRVDODOWKRXJKLWGLGQRWH[SOLFLWO\
UHMHFWLWRULQGLFDWHWKDWLWZDVFHDVLQJIXUWKHUGLVFXVVLRQVZLWK
:UHQFK
2Q'HFHPEHU$OIDURPHWZLWK+LOOZKRKDGEHHQ
SURPRWHG WR WKH SRVLWLRQ RI FKLHI PDUNHWLQJ RIILFHU DQG
RWKHUVWRSUHVHQWYDULRXVOLFHQVLQJLGHDVLQFOXGLQJ3V\FKR
&KLKXDKXD 2Q )HEUXDU\ $OIDUR DJDLQ PHW ZLWK
1R :UHQFK//&HWDOY7DFR%HOO&RUS
5HHYHV3GDW6LQFHWKH0LFKLJDQ
FRXUWLQ6DUYHUTXRWHG5HHYHVRQWKHUHTXLUHPHQWRIQRYHOW\
LQDQDFWLRQEDVHGRQFRQYHUVLRQDQGZHQWRQWRKROGWKDWWKH
SODLQWLII¶V FRQWUDFW FODLP VXUYLYHG QRWZLWKVWDQGLQJ ODFN RI
QRYHOW\ZHFRQFOXGHWKDW0LFKLJDQIROORZV5HHYHVDQGWKH
&DOLIRUQLD FDVHV ZKLFK GLVSHQVH ZLWK WKH UHTXLUHPHQW RI
QRYHOW\LQDFWLRQVEDVHGRQLPSOLHGLQIDFWFRQWUDFWV
,Q LWV DQDO\VLV RI WKH LVVXH RI QRYHOW\ LQ :UHQFK ,,, WKH
GLVWULFWFRXUWUHOLHGKHDYLO\RQ1HZ<RUNFDVHV6HH:UHQFK
,,,)6XSSGDW:HWKLQNLWXQOLNHO\WKDW0LFKLJDQ
ZRXOGIROORZWKH1HZ<RUNSRVLWLRQRQQRYHOW\LQOLJKWRI
6DUYHU%HWKDWDVLWPD\WKHFRQIOLFWEHWZHHQWKH&DOLIRUQLD
DQG1HZ<RUNDXWKRULWLHVUHIHUUHGWRLQ5HHYHVZDVODUJHO\
UHVROYHGE\DGHFLVLRQRI1HZ<RUN¶VKLJKHVWDSSHOODWH
FRXUW LQ $SIHO Y 3UXGHQWLDO%DFKH 6HFV ,QF 1(G
1< ZKHUHLQWKH1HZ<RUN&RXUWRI$SSHDOV
H[SUHVVO\UHMHFWHGWKHSURSRVLWLRQWKDWQRYHOW\LVUHTXLUHGLQ
DOOFDVHVLQYROYLQJGLVFORVXUHRILGHDV
'HIHQGDQWGRHVQRWFODLPWKDWLWZDVDZDUHRIWKHLGHD
EHIRUHSODLQWLIIVGLVFORVHGLWEXWUDWKHUFRQFHGHVWKDWWKH
LGHDFDPHIURPWKHP:KHQDVHOOHU¶VFODLPDULVHVIURP
DFRQWUDFWWRXVHDQLGHDHQWHUHGLQWRDIWHUWKHGLVFORVXUH
RI WKH LGHD WKH TXHVWLRQ LV QRW ZKHWKHU WKH EX\HU
PLVDSSURSULDWHGSURSHUW\IURPWKHVHOOHUEXWZKHWKHUWKH
LGHD KDG YDOXH WR WKH EX\HU DQG WKXV FRQVWLWXWHV YDOLG
FRQVLGHUDWLRQ,QVXFKDFDVHWKHEX\HUNQRZVZKDWKH
RUVKHLVEX\LQJDQGKDVDJUHHGWKDWWKHLGHDKDVYDOXH
DQG WKH &RXUW ZLOO QRW RUGLQDULO\ JR EHKLQG WKDW
GHWHUPLQDWLRQ7KHODFNRIQRYHOW\LQDQGRILWVHOIGRHV
QRW GHPRQVWUDWH D ODFN RI YDOXH >FLWLQJ .HOOHU Y
$PHULFDQ&KDLQ&R1<1( @
1(GDW
7KH 6HFRQG &LUFXLW FLWLQJ $SIHO UHFHQWO\ UHYHUVHG WKH
DZDUGRIVXPPDU\MXGJPHQWLQ1DGHOY3OD\%\3OD\7R\V
1RYHOWLHV,QF)6XSSG 6'1< RQHRI
WKHFDVHVFLWHGE\WKHGLVWULFWFRXUWLQ:UHQFK,,,KROGLQJWKDW
1HZ <RUN ODZ QR ORQJHU UHTXLUHG QRYHOW\ DQG RULJLQDOLW\

-- 4 of 14 --

:UHQFK//&HWDOY7DFR%HOO&RUS 1R
UDWKHU WKDQ IRU WKH LGHD LWVHOI VKH KDV VWDWHG D EUHDFK RI
FRQWUDFW FODLP´ ,G 7KH 6DUYHU FRXUW GLG QRW LPSRVH D
UHTXLUHPHQWRIQRYHOW\RQSODLQWLII¶VFRQWUDFWFODLP
$VQRWHGDERYHWKH6DUYHUFRXUWTXRWHGZLWKDSSURYDOWKH
GHFLVLRQRIWKH6XSUHPH&RXUWRI$ODVNDLQ5HHYHVY$O\HVND
3LSHOLQH6HUYLFHV&R,Q5HHYHVSODLQWLIIKDGSURSRVHGWKH
LGHDRIFUHDWLQJDYLVLWRUFHQWHUDWDORFDWLRQZKHUHYLVLWRU¶V
FRXOG YLHZ WKH $ODVND RLO SLSHOLQH +H EURXJKW DQ DFWLRQ
DOOHJLQJWRUWDQGFRQWUDFWFODLPVDJDLQVWWKHSLSHOLQHVHUYLFLQJ
FRPSDQ\ ZKLFK VXEVHTXHQWO\ HVWDEOLVKHG VXFK D YLVLWRU
FHQWHU7KH6XSUHPH&RXUWRI$ODVNDKHOGWKDWWKHHOHPHQW
RIQRYHOW\ZDVQRWUHTXLUHGIRUSODLQWLII¶VLPSOLHGFRQWUDFW
FODLP
5HO\LQJODUJHO\RQFDVHVIURP1HZ<RUN$O\HVNDDUJXHV
WKDW QRYHOW\ DQG RULJLQDOLW\ VKRXOG EH UHTXLUHG LQ DQ
LPSOLHGLQIDFWFODLP5HHYHVUHVSRQGVWKDWZHVKRXOG
IROORZ&DOLIRUQLD¶VH[DPSOHDQGQRWUHTXLUHQRYHOW\DVDQ
HVVHQWLDOHOHPHQWRIWKLVVRUWRIFODLP
,GHDEDVHG FODLPV DULVH PRVW IUHTXHQWO\ LQ WKH
HQWHUWDLQPHQWFHQWHUVRI1HZ<RUNDQG&DOLIRUQLDEXW
1HZ<RUNUHTXLUHVQRYHOW\ZKHUHDV&DOLIRUQLDGRHVQRW
&LWDWLRQVRPLWWHG
:H SUHIHU WKH &DOLIRUQLD DSSURDFK $Q LGHD PD\ EH
YDOXDEOHWRWKHUHFLSLHQWPHUHO\EHFDXVHRILWVWLPLQJRU
WKHPDQQHULQZKLFKLWLVSUHVHQWHG
,PSOLHGLQIDFWFRQWUDFWVDUHFORVHO\UHODWHGWRH[SUHVV
FRQWUDFWV(DFKUHTXLUHVWKHSDUWLHVWRIRUPDQLQWHQWWR
HQWHULQWRDFRQWUDFW,WLVRUGLQDULO\QRWWKHFRXUW¶VUROH
WR HYDOXDWH WKH DGHTXDF\ RI WKH FRQVLGHUDWLRQ DJUHHG
XSRQE\WKHSDUWLHV&DUUROOY/HH$UL]RQD
3G 7KHEDUJDLQVKRXOGEHOHIWLQ
WKHKDQGVRIWKHSDUWLHV,ISDUWLHVYROXQWDULO\FKRRVHWR
EDUJDLQ IRU DQ LQGLYLGXDO¶V VHUYLFHV LQ GLVFORVLQJ RU
GHYHORSLQJDQRQQRYHORUXQRULJLQDOLGHDWKH\KDYHWKH
SRZHUWRGRVR
1R :UHQFK//&HWDOY7DFR%HOO&RUS
DSSHOODQWV DQG UHSUHVHQWDWLYHV RI 6WUDWHJ\ WR UHYLHZ DQG
ILQDOL]H D IRUPDO SUHVHQWDWLRQ IHDWXULQJ 3V\FKR &KLKXDKXD
WKDWZDVWREHJLYHQWR7DFR%HOO¶VPDUNHWLQJGHSDUWPHQWLQ
HDUO\ 0DUFK $W WKLV PHHWLQJ DSSHOODQWV H[KLELWHG
H[DPSOHV RI SRVVLEOH 3V\FKR &KLKXDKXD SURPRWLRQDO
PDWHULDOV DQG DOVR RUDOO\ SUHVHQWHG VSHFLILF LGHDV IRU
WHOHYLVLRQFRPPHUFLDOVIHDWXULQJDOLYHGRJPDQLSXODWHGE\
FRPSXWHU JUDSKLFV LPDJLQJ 7KHVH LGHDV LQFOXGHG D
FRPPHUFLDOLQZKLFKDPDOHGRJSDVVHGXSDIHPDOHGRJLQ
RUGHUWRJHWWR7DFR%HOOIRRG
:KLOH $OIDUR ZDV PHHWLQJ ZLWK DSSHOODQWV DQRWKHU
PDUNHWLQJ ILUP 7/3 3DUWQHUVKLS ³7/3´ ZDV DOVR
SURPRWLQJ DSSHOODQWV¶ 3V\FKR &KLKXDKXD WR 7DFR %HOO
PDUNHWLQJH[HFXWLYHV7/3SUHVHQWHGVHYHUDOLGHDVLQFOXGLQJ
WKH3V\FKR&KLKXDKXDFRQFHSWWR7DFR%HOOLQDQWLFLSDWLRQRI
DQ XSFRPLQJ VXPPHU SURPRWLRQ 7/3 KDG GLVFRYHUHG
3V\FKR &KLKXDKXD DW D WUDGH VKRZ LQ 1HZ <RUN DQG KDG
UHFHLYHG 6WUDWHJ\¶V FRQVHQW WR XVH WKH LPDJH LQ LWV
SUHVHQWDWLRQ$OIDURZDVQRWDZDUHRI7/3¶VSUHVHQWDWLRQ
)ROORZLQJWKHSUHVHQWDWLRQ7DFR%HOOFRQGXFWHGDVHULHVRI
IRFXV JURXSV WR UHVHDUFK WKH UHDFWLRQ WR 7/3¶V SURSRVDOV
3V\FKR&KLKXDKXDZDVUHFHLYHGSRVLWLYHO\E\FRQVXPHUVEXW
7DFR%HOOGHFLGHGQRWWRXVHDQ\RI7/3¶VLGHDV
$OIDURZDVXQDEOHWRDUUDQJHDPHHWLQJZLWKWKHPDUNHWLQJ
GHSDUWPHQW GXULQJ 0DUFK WR SUHVHQW WKH 3V\FKR
&KLKXDKXDPDWHULDOV2Q$SULOKRZHYHU6WUDWHJ\
PDGH D IRUPDO SUHVHQWDWLRQ WR $OIDUR DQG KLV JURXS XVLQJ
VDPSOHVRIXQLIRUPGHVLJQV7VKLUWVIRRGZUDSSHUVSRVWHUV
DQG FXS GHVLJQV EDVHG RQ WKH LGHDV GLVFXVVHG GXULQJ WKH
)HEUXDU\ PHHWLQJ $OIDUR DQG KLV JURXS ZHUH
LPSUHVVHGZLWK6WUDWHJ\¶VSUHVHQWDWLRQ
2Q 0DUFK 7DFR %HOO KLUHG D QHZ DGYHUWLVLQJ
DJHQF\7%:$&KLDW'D\ ³&KLDW'D\´ 7DFR%HOODGYLVHG
&KLDW'D\WKDWLWZDQWHGDFDPSDLJQUHDG\WRODXQFKE\-XO\
WKDWZRXOGUHFRQQHFW7DFR%HOOZLWKLWVFRUHJURXSRI
FRQVXPHUV &KXFN %HQQHWW DQG &OD\ :LOOLDPV ZHUH
GHVLJQDWHGDVWKHFUHDWLYHGLUHFWRUVRI7DFR%HOO¶VDFFRXQW

-- 5 of 14 --

:UHQFK//&HWDOY7DFR%HOO&RUS 1R
2Q -XQH %HQQHWW DQG :LOOLDPV SURSRVHG D
FRPPHUFLDOWR7DFR%HOOLQZKLFKDPDOH&KLKXDKXDZRXOG
SDVVXSDIHPDOH&KLKXDKXDWRJHWWRDSHUVRQVHDWHGRQD
EHQFKHDWLQJ7DFR%HOOIRRG%HQQHWWDQG:LOOLDPVVD\WKDW
WKH\FRQFHLYHGRIWKHLGHDIRUWKLVFRPPHUFLDORQHGD\DVWKH\
ZHUH HDWLQJ 0H[LFDQ IRRG DW D VLGHZDON FDIp DQG VDZ D
&KLKXDKXDWURWWLQJGRZQWKHVWUHHWZLWKQRPDVWHURUKXPDQ
LQWHUYHQWLRQ³RQDPLVVLRQ´%HQQHWWDQG:LOOLDPVFRQWHQG
WKDWWKLVLPDJHFDXVHGWKHPMRLQWO\WRFRQFHLYHRIWKHLGHDRI
XVLQJD&KLKXDKXDDVDZD\RISHUVRQLI\LQJWKHLQWHQVHGHVLUH
IRU 7DFR %HOO IRRG :LOOLDPV VXEVHTXHQWO\ ZURWH DQ
DGYHUWLVHPHQW VFULSW XVLQJ D &KLKXDKXD ZKLFK 7DFR %HOO
GHFLGHGWRSURGXFHDVDWHOHYLVLRQFRPPHUFLDO
:KHQ LQ -XQH $OIDUR OHDUQHG WKDW &KLDW'D\ ZDV
SODQQLQJWRXVHD&KLKXDKXDLQDFRPPHUFLDOKHFRQWDFWHG
+LOODJDLQDERXWWKHSRVVLELOLW\RIXVLQJ3V\FKR&KLKXDKXD
+LOOSDVVHG$OIDURRQWR&KULV0LOOHUD7DFR%HOODGYHUWLVLQJ
PDQDJHU DQG WKH OLDLVRQ EHWZHHQ 7DFR %HOO¶V PDUNHWLQJ
GHSDUWPHQWDQG&KLDW'D\2Q-XQH$OIDURJDYH
3V\FKR &KLKXDKXD PDWHULDOV WR 0LOOHU DORQJ ZLWK D QRWH
VXJJHVWLQJWKDW7DFR%HOOFRQVLGHUXVLQJ3V\FKR&KLKXDKXD
DVDQLFRQDQGDVDFKDUDFWHULQLWVDGYHUWLVLQJ0LOOHUVHQW
WKHVHPDWHULDOVWR&KLDW'D\ZKLFKUHFHLYHGWKHPVRPHWLPH
EHWZHHQ-XQHDQG-XO\
7DFR %HOO DLUHG LWV ILUVW &KLKXDKXD FRPPHUFLDO LQ WKH
QRUWKHDVWHUQ8QLWHG6WDWHVLQ-XO\DQGUHFHLYHGDYHU\
SRVLWLYHFRQVXPHUUHDFWLRQ2QWKDWEDVLV7DFR%HOOGHFLGHG
WKDWWKH&KLKXDKXDZRXOGEHWKHIRFXVRILWVPDUNHWLQJ
HIIRUWV DQG ODXQFKHG D QDWLRQZLGH DGYHUWLVLQJ FDPSDLJQ
IHDWXULQJ&KLKXDKXDFRPPHUFLDOVLQODWH'HFHPEHU
$SSHOODQWVEURXJKWVXLWLQ-DQXDU\DOOHJLQJEUHDFKRI
LPSOLHGLQIDFWFRQWUDFWDVZHOODVYDULRXVWRUWDQGVWDWXWRU\
FODLPVXQGHU0LFKLJDQDQG&DOLIRUQLDODZ$SSHOOHHILOHGD
PRWLRQWRGLVPLVVZKLFKWKHGLVWULFWFRXUWJUDQWHGLQSDUWDQG
GHQLHGLQSDUW6HH:UHQFK//&Y7DFR%HOO&RUS1R
&9:/DW 8634G :'
0LFK -XQH ³:UHQFK ,´ $OWKRXJK WKH GLVWULFW
1R :UHQFK//&HWDOY7DFR%HOO&RUS
1HYHUWKHOHVVPDQ\FRXUWVGRUHTXLUHQRYHOW\LQDQDFWLRQ
EDVHGXSRQDQLPSOLHGFRQWUDFWWKHRU\RQWKHJURXQGWKDW
WKHUHFDQEHQRFRQVLGHUDWLRQIRUDQLPSOLHGSURPLVHWRSD\
LIWKHLGHDGRHVQRWFRQVWLWXWH³SURSHUW\´6HH1LPPHURQ
&RS\ULJKW † >%@ DW 7KH DXWKRUV RI
1LPPHURQ&RS\ULJKWKDYHFULWLFL]HGWKLVYLHZ5HIHUULQJ
VSHFLILFDOO\ WR WKH GLVVHQWLQJ RSLQLRQ RI IRUPHU &DOLIRUQLD
&KLHI-XVWLFH7UD\QRULQ6WDQOH\Y&ROXPELD%URDG6\V
3G &DO WKHDXWKRUVRI1LPPHURQ&RS\ULJKW
VWDWH
,IDVVXJJHVWHGDERYHDQLPSOLHGFRQWUDFWLVUHJDUGHGDV
DQDJUHHPHQWWRSD\IRUWKHGLVFORVXUHRIDQLGHDUDWKHU
WKDQ IRU WKH LGHD LWVHOI &KLHI -XVWLFH 7UD\QRU¶V
UHPDUNV ORVH PXFK RI WKHLU SHUVXDVLYHQHVV ,W ZRXOG
VHHPWREHDSHUIHFWO\UHDVRQDEOHDVVXPSWLRQWKDWRQH
ZRXOGREOLJDWHKLPVHOIWRSD\IRUWKHGLVFORVXUHRIDQ
LGHDWKDWKHZRXOGRWKHUZLVHEHOHJDOO\IUHHWRXVHEXW
WKDW LQ IDFW KH ZRXOG EH XQDEOH WR XVH ZLWKRXW VXFK
GLVFORVXUH6RPHVXEVHTXHQWGHFLVLRQVLQ&DOLIRUQLDDQG
HOVHZKHUHKDYHUHFRJQL]HGWKDWWKHQRYHOW\UHTXLUHPHQW
VKRXOGQRWEHLQMHFWHGE\WKHFRXUWLQLPSOLHGFRQWUDFW
DFWLRQV
1LPPHU RQ &RS\ULJKW † >%@ DW IRRWQRWHV
RPLWWHG
6DUYHUWHOOVXVZKHUH0LFKLJDQOLNHO\VWDQGVRQWKLVLVVXH
,Q6DUYHUSODLQWLIIEURXJKWDQDFWLRQDJDLQVWKHUHPSOR\HU
VHHNLQJGDPDJHVIRUFRQYHUVLRQDQGEUHDFKRIFRQWUDFWEDVHG
RQWKHDOOHJDWLRQWKDWGHIHQGDQWDSSURSULDWHGDQLGHDZKLFK
VKHVXEPLWWHGWKURXJKDQHPSOR\HHVXJJHVWLRQSURJUDP7KH
FRXUWUHMHFWHGSODLQWLII¶VFRQYHUVLRQFDXVHRIDFWLRQILQGLQJ
WKDWSODLQWLII¶VLGHD³ZDVQHLWKHUQRYHOQRUXQLTXH´DQG³GLG
QRW FRQVWLWXWH SURSHUW\ VXEMHFW WR D FRQYHUVLRQ FDXVH RI
DFWLRQ´6DUYHU1:GDW7KH6DUYHUFRXUWZHQW
RQ WR KROG KRZHYHU WKDW SODLQWLII KDG VWDWHG D EUHDFK RI
FRQWUDFW FODLP VWDWLQJ ³WR WKH H[WHQW WKDW SODLQWLII VHHNV
FRPSHQVDWLRQIRUIRUPXODWLQJGUDIWLQJDQGVXEPLWWLQJKHU
LGHDSXUVXDQWWRGHIHQGDQW¶VHPSOR\HHVXJJHVWLRQSURJUDP

-- 6 of 14 --

:UHQFK//&HWDOY7DFR%HOO&RUS 1R
,WKHGLVWULFWFRXUWFLWHG6DUYHUY'HWURLW(GLVRQ&R
1:G 0LFK &W $SS LQ VXSSRUW RI LWV
FRQFOXVLRQWKDW0LFKLJDQZRXOGUHFRJQL]HVXFKDFODLP6HH
:UHQFK,:/DW /DWHULQ:UHQFK,,,WKH
GLVWULFW FRXUW UHOLHG SULPDULO\ RQ 1HZ <RUN FDVH ODZ WR
VXSSRUWLWVILQGLQJWKDWDSSHOODQWV¶LGHDVDQGFRQFHSWVZHUH
QRWQRYHODVDPDWWHURIODZ7KHGLVWULFWFRXUWVHHPVWRKDYH
DVVXPHG ZLWKRXW IXUWKHU GLVFXVVLRQ WKDW LI WKH QRYHOW\
UHTXLUHPHQW DSSOLHG WR DSSHOODQWV¶ FRQYHUVLRQ DQG
PLVDSSURSULDWLRQFODLPVLWZRXOGDOVRDSSO\WRDSSHOODQWV¶
LPSOLHGLQIDFWFRQWUDFWFODLP
&RQYHUVLRQ LV EDVHG RQ SURSHUW\ ODZ SULQFLSDOV 6HH
6DUYHU1:GDW&RXUWVKDYHXVXDOO\UHIXVHGWR
SURWHFWLGHDVRQDSURSHUW\WKHRU\EXWZKHQWKH\KDYHLWKDV
JHQHUDOO\ EHHQ VXEMHFW WR WKH UHTXLUHPHQWV RI QRYHOW\ DQG
FRQFUHWHQHVV6HH1LPPHURQ&RS\ULJKW†DWWR
,Q 6DUYHU WKH 0LFKLJDQ FRXUW TXRWHG WKH IROORZLQJ
ODQJXDJHIURP5HHYHVY$O\HVND3LSHOLQH6HUY&R3G
$OD SHUFXULDP
³7RSURWHFWDQLGHDXQGHUDSURSHUW\WKHRU\UHTXLUHVWKDW
WKHLGHDSRVVHVVSURSHUW\OLNHWUDLWV&RXUWVFRQVLGHUWKH
HOHPHQWVRIQRYHOW\RURULJLQDOLW\QHFHVVDU\IRUDFODLP
RIμRZQHUVKLS¶LQDQLGHDRUFRQFHSW7KHVHHOHPHQWV
GLVWLQJXLVKSURWHFWDEOHLGHDVIURPRUGLQDU\LGHDVWKDWDUH
IUHHO\DYDLODEOHIRURWKHUVWRXVH,WLVWKHHOHPHQW RI
RULJLQDOLW\RUQRYHOW\WKDWOHQGVYDOXHWRWKHLGHDLWVHOI´
6DUYHU 1:G DW TXRWLQJ 5HHYHV 3G DW

0RVW FRXUWV DSSO\ D GLIIHUHQW UXOH WR FRQWUDFW FODLPV
PRGLI\LQJWKHUHTXLUHPHQWRIQRYHOW\LQVRPHFLUFXPVWDQFHV
DQGGLVSHQVLQJZLWKLWDOWRJHWKHULQRWKHUV7KHUHDVRQIRUWKH
GLVWLQFWLRQLVWKLVSURSHUW\ULJKWVDUHULJKWVDJDLQVWWKHZRUOG
DQG FRXUWV DUH JHQHUDOO\ XQZLOOLQJ WR DFFRUG WKDW NLQG RI
SURWHFWLRQ WR LGHDV FRQWUDFW ULJKWV RQ WKH RWKHU KDQG DUH
OLPLWHGWRWKHFRQWUDFWLQJSDUWLHVDQGLWVKRXOGEHIRUWKHPWR
GHFLGHLIDQLGHDLVVXIILFLHQWO\YDOXDEOHWREHSXUFKDVHG6HH
1LPPHURQ&RS\ULJKW†DW†>%@DW
1R :UHQFK//&HWDOY7DFR%HOO&RUS
$SSHOOHH KDV QRW FKDOOHQJHG WKH GLVWULFW FRXUW¶V UXOLQJ WKDW LQVRIDU
DV SUHHPSWLRQ LV FRQFHUQHG DSSHOODQWV¶ WRUW FODLPV VWDQG RU IDOO ZLWK WKHLU
FRQWUDFW FODLPV
FRXUW GLVPLVVHG DSSHOODQWV¶ XQMXVW HQULFKPHQW FRQYHUVLRQ
DQGGLOXWLRQFODLPVRQWKHEDVLVWKDWWKH\ZHUHSUHHPSWHGE\
WKH&RS\ULJKW$FWVHH:UHQFK,:/DW
WKHFRXUWKHOGWKDWDSSHOODQWV¶PLVDSSURSULDWLRQDQGXQIDLU
FRPSHWLWLRQFODLPVZHUHQRWSUHHPSWHGEHFDXVHWKH\UHTXLUHG
DSSHOODQWV WR SURYH DQ ³H[WUD HOHPHQW´ QRW UHTXLUHG IRU D
FRS\ULJKWLQIULQJHPHQWFODLPQDPHO\WKHH[LVWHQFHRIDOHJDO
UHODWLRQVKLSDULVLQJIURPDQLPSOLHGFRQWUDFW6HHLGDW
7KHGLVWULFWFRXUWDOVRJUDQWHGDSSHOODQWVOHDYHWRDPHQGWKHLU
FRQYHUVLRQFODLPVRWKDWLWPLJKWVXUYLYHSUHHPSWLRQ6HHLG
DW
,QDVHFRQGSXEOLVKHGGHFLVLRQWKHGLVWULFWFRXUWGHQLHG
DSSHOOHH¶VUHQHZHGPRWLRQWRGLVPLVVDSSHOODQWV¶WRUWFODLPV
WRWKHH[WHQWWKDWWKH\GHULYHGIURPDQDOOHJHGLPSOLHGLQIDFW
FRQWUDFW6HH:UHQFK//&Y7DFR%HOO&RUS)6XSSG
:'0LFK ³:UHQFK,,´ +RZHYHUWKH
GLVWULFWFRXUWJUDQWHGDSSHOOHH¶VPRWLRQWRVWULNHDSSHOODQWV¶
FODLPVWRWKHH[WHQWWKDWWKH\GHULYHGIURPDWKHRU\RITXDVL
FRQWUDFW RU LPSOLHGLQODZ FRQWUDFW 6HH :UHQFK ,,
)6XSSGDW7KHGLVWULFWFRXUWUHDVRQHGWKDWVXFK
DOOHJDWLRQVZHUHLQFRQVLVWHQWZLWKWKHFRXUW¶VSULRUUXOLQJLQ
:UHQFK , WKDW DSSHOODQWV¶ XQMXVW HQULFKPHQW FODLP ZDV
SUHHPSWHG6HHLG
$W WKH FORVH RI GLVFRYHU\ WKH GLVWULFW FRXUW JUDQWHG
DSSHOOHH¶VPRWLRQIRUVXPPDU\MXGJPHQW6HH:UHQFK//&
Y7DFR%HOO&RUS)6XSSG :'0LFK
³:UHQFK,,,´ 7KHGLVWULFWFRXUWGHWHUPLQHGWKDWWKHUHZDV
VXIILFLHQWHYLGHQFHWRVXSSRUWDSSHOODQWV¶DOOHJDWLRQVWKDWWKH
SDUWLHV KDG HQWHUHG LQWR DQ LPSOLHGLQIDFW FRQWUDFW 6HH
:UHQFK ,,, ) 6XSS G DW 7KH GLVWULFW FRXUW
QHYHUWKHOHVV KHOG WKDW DSSHOODQWV¶ FRQWUDFW FODLP ZDV
SUHHPSWHGXQGHUWKH&RS\ULJKW$FWEHFDXVHLQWKHFRXUW¶V
YLHZ DSSHOODQWV¶ ULJKW WR EH SDLG XQGHU WKH FRQWUDFW ZDV
HTXLYDOHQW WR WKH H[FOXVLYH ULJKWV WKDW WKH &RS\ULJKW $FW

-- 7 of 14 --

:UHQFK//&HWDOY7DFR%HOO&RUS 1R
JUDQWVWRDXWKRUV6HHLGDW%DVHGRQWKHFRXUW¶V
UHDVRQLQJLQ:UHQFK,DQG:UHQFK,,DSSHOODQWV¶UHPDLQLQJ
WRUW FODLPV FRQYHUVLRQ PLVDSSURSULDWLRQ DQG XQIDLU
FRPSHWLWLRQZHUHDOVRSUHHPSWHG6HHLG$OWKRXJKWKH
GLVWULFW FRXUW UHMHFWHG DSSHOOHH¶V DUJXPHQW WKDW VXPPDU\
MXGJPHQW ZDV ZDUUDQWHG EDVHG RQ DSSHOOHH¶V HYLGHQFH RI
³LQGHSHQGHQWFUHDWLRQ´WKHFRXUWIRXQGDVDPDWWHURIODZWKDW
DSSHOODQWV¶H[SUHVVLYHZRUNZDVQRWQRYHORURULJLQDODQG
WKXVGLVPLVVHGDSSHOODQWV¶FODLPVRQWKDWDGGLWLRQDOJURXQG
6HHLG
7KHLVVXHVEHIRUHXVRQDSSHDODUH ZKHWKHUWKHGLVWULFW
FRXUWHUUHGLQILQGLQJWKDWDSSHOODQWV¶LPSOLHGLQIDFWFRQWUDFW
FODLPLVSUHHPSWHGE\WKH&RS\ULJKW$FWDQG ZKHWKHUWKH
GLVWULFWFRXUWHUUHGLQILQGLQJWKDWQRYHOW\ZDVUHTXLUHGDVDQ
HOHPHQWRIDSSHOODQWV¶LPSOLHGLQIDFWFRQWUDFWFODLPDQGLI
VR ZKHWKHU WKH GLVWULFW FRXUW HUUHG LQ LWV ILQGLQJ WKDW
DSSHOODQWV¶LGHDVDQGFRQFHSWVZHUHQRWQRYHODVDPDWWHURI
ODZ
,,',6&866,21
7KLV FRXUW UHYLHZV D GLVWULFW FRXUW¶V JUDQW RI VXPPDU\
MXGJPHQWGHQRYR6HH$OOHQY0LFK'HS¶WRI&RUU
)G WK &LU 6XPPDU\ MXGJPHQW LV
DSSURSULDWH ZKHUH ³WKH SOHDGLQJV GHSRVLWLRQV DQVZHUV WR
LQWHUURJDWRULHV DQG DGPLVVLRQV RQ ILOH WRJHWKHU ZLWK WKH
DIILGDYLWVLIDQ\VKRZWKDWWKHUHLVQRJHQXLQHLVVXHDVWRDQ\
PDWHULDO IDFW DQG WKDW WKH PRYLQJ SDUW\ LV HQWLWOHG WR D
MXGJPHQWDVDPDWWHURIODZ´)HG5&LY3 F 7KH
PRYLQJSDUW\KDVWKHLQLWLDOEXUGHQRIVKRZLQJWKHDEVHQFHRI
DJHQXLQHLVVXHRIPDWHULDOIDFWDVWRDQHVVHQWLDOHOHPHQWRI
WKHQRQPRYLQJSDUW\¶VFDVH6HH6WUHHWY-&%UDGIRUG
&R )G WK &LU FLWLQJ &HORWH[
&RUSY&DWUHWW86 $QLVVXHRIIDFWLV
³JHQXLQH´LIWKHHYLGHQFHLVVXFKWKDWDUHDVRQDEOHMXU\FRXOG
UHWXUQDYHUGLFWIRUWKHQRQPRYDQW6HH$QGHUVRQY/LEHUW\
/REE\ ,QF 86 2QFH WKH PRYLQJ
SDUW\VDWLVILHVLWVEXUGHQ³WKHEXUGHQVKLIWVWRWKHQRQPRYLQJ
SDUW\ WR VHW IRUWK VSHFLILF IDFWV VKRZLQJ D WULDEOH LVVXH´
1R :UHQFK//&HWDOY7DFR%HOO&RUS
SURYLQJ WKDW DSSHOOHH XVHG DSSHOODQWV¶ 3V\FKR &KLKXDKXD
FRQFHSW7KHGLVWULFWFRXUWGLGQRWDJUHHZLWKDSSHOODQWVWKDW
7DFR %HOO¶V &KLKXDKXD VWURQJO\ UHVHPEOHG 3V\FKR
&KLKXDKXD EXW QHYHUWKHOHVV IRXQG WKDW 7DFR %HOO ZDV QRW
HQWLWOHGWRVXPPDU\MXGJPHQWRQWKHEDVLVRILWVDIILUPDWLYH
GHIHQVHRILQGHSHQGHQWFUHDWLRQ6HH:UHQFK,,,)6XSS
G DW 6SHFLILFDOO\ WKH GLVWULFW FRXUW IRXQG WKDW
WHVWLPRQ\ IURP 7DFR %HOO¶V LQWHUHVWHG ZLWQHVVHV RQ WKH
TXHVWLRQRILQGHSHQGHQWFUHDWLRQE\LWVHOIZDVLQVXIILFLHQWWR
VXSSRUWVXPPDU\MXGJPHQW,G
:HDJUHHZLWKWKHGLVWULFWFRXUW¶VFRQFOXVLRQWKDWWKHLVVXH
RILQGHSHQGHQWFUHDWLRQSUHVHQWVJHQXLQHLVVXHVRIPDWHULDO
IDFW
&1RYHOW\
$SSHOODQWVDVVHUWWKDWWKHGLVWULFWFRXUWHUUHGLQGHWHUPLQLQJ
WKDWQRYHOW\ZDVUHTXLUHGWRVXVWDLQWKHLUFRQWUDFWFODLP7KH
GLVWULFWFRXUWIRXQGWKDW0LFKLJDQODZUHTXLUHGDSSHOODQWVWR
SURYH WKH RULJLQDOLW\ RU QRYHOW\ RI WKHLU LGHDV LQ RUGHU WR
PDLQWDLQWKHLUFODLPVFRQFOXGLQJWKDWDSSHOODQWV¶LGHDVZHUH
QRW QRYHO EHFDXVH WKH\ ³PHUHO\ FRPELQHG WKHPHV DQG
H[HFXWLRQV WKDW KDG EHHQ XVHG PDQ\ WLPHV LQ D YDULHW\ RI
FRPPHUFLDOV IRU GLIIHUHQW SURGXFWV´ :UHQFK ,,,
)6XSSGDW7KHGLVWULFWFRXUWWKXVJUDQWHGVXPPDU\
MXGJPHQWLQIDYRURIDSSHOOHHRQWKLVDOWHUQDWLYHEDVLV6HHLG
DW:HFRQFOXGHWKDWWKHGLVWULFWFRXUWHUUHGLQILQGLQJ
WKDW0LFKLJDQODZUHTXLUHVQRYHOW\LQDFRQWUDFWEDVHGFODLP
,Q:UHQFK,,,WKHGLVWULFWFRXUWEHJDQLWVGLVFXVVLRQRIWKH
LVVXHRIQRYHOW\ZLWKDUHIHUHQFHWRLWVGHFLVLRQLQ:UHQFK,,
)6XSSGDWLQZKLFKQRYHOW\ZDVGLVFXVVHGLQWKH
FRQWH[W RI DSSHOODQWV¶ PLVDSSURSULDWLRQ DQG FRQYHUVLRQ
FODLPV6HH:UHQFK,,,)6XSSGDWFLWLQJ:UHQFK
,,)6XSSGDW,QWKLVVHFWLRQRILWV:UHQFK,,
GHFLVLRQ WKH GLVWULFW FRXUW DGGUHVVHG WKH LVVXH RI ZKHWKHU
0LFKLJDQZRXOGUHFRJQL]HDQDFWLRQIRUFRQYHUVLRQRIDQLGHD
³μLI WKH LGHD ZDV QRYHO RU RULJLQDO DQG IXUQLVKHG E\ WKH
SODLQWLIIWRWKHGHIHQGDQWSXUVXDQWWRDOHJDOUHODWLRQVKLS¶´
,G TXRWLQJ:UHQFK,:/DW ,Q:UHQFK

-- 8 of 14 --

:UHQFK//&HWDOY7DFR%HOO&RUS 1R
7KLV IRRWQRWH LQ 1LPPHU RQ &RS\ULJKW DSSHDUV LQ WKH VDPH VHFWLRQ
FLWHG E\ WKH (QGHPRO FRXUW IRU WKH SURSRVLWLRQ WKDW DOO LPSOLHG FRQWUDFW
FODLPV DUH SUHHPSWHG
WKDW HVVHQWLDO HOHPHQW QDPHO\ H[SHFWDWLRQ RI
FRPSHQVDWLRQE\ERWKSDUWLHVEHHQSUHVHQWLWZRXOG
VHHP WKDW WKH &DOLIRUQLD FDXVH RI DFWLRQ IRU XQMXVW
HQULFKPHQW FRXOG EH DVVLPLODEOH WR D FDXVH RI DFWLRQ
VRXQGLQJ LQ FRQWUDFW IRU LW ZRXOG WKHQ FRQWDLQ DQ
HVVHQWLDOHOHPHQWQRWHQYLVLRQHGE\6HFWLRQ,QWKDW
HYHQWWKHXQMXVWHQULFKPHQWFXPFRQWUDFWFODLPZRXOG
QRWEHSUHHPSWHG6HH†>%@>@>D@VXSUD
1LPPHURQ&RS\ULJKW†>%@>@>J@DWQ
+HUHDSSHOODQWV¶LPSOLHGLQIDFWFRQWUDFWFODLPFRQWDLQVWKH
HVVHQWLDOHOHPHQWRIH[SHFWDWLRQRIFRPSHQVDWLRQZKLFKLVDQ
HOHPHQWQRWHQYLVLRQHGE\†6HH&DVFDGHQ1:DW
³3ODLQWLIIVFDQQRWUHFRYHURQWKHWKHRU\RIDFRQWUDFW
LPSOLHG LQ IDFW IRU WKH ZRUN ZDV QRW GRQH XQGHU
FLUFXPVWDQFHV DXWKRUL]LQJ SODLQWLIIV WR HQWHUWDLQ DQ
H[SHFWDWLRQRISD\IURPGHIHQGDQWV´
:HFRQFOXGHWKDWWKHGLVWULFWFRXUWHUUHGZLWKUHVSHFWWRWKH
HTXLYDOHQF\SURQJRIWKHSUHHPSWLRQDQDO\VLVDQGILQGWKDW
DSSHOODQWV¶ VWDWH ODZ LPSOLHGLQIDFW FRQWUDFW FODLP LV QRW
SUHHPSWHGE\WKH&RS\ULJKW$FW
%,QGHSHQGHQW&UHDWLRQ
$SSHOOHHDUJXHVRQDSSHDOWKDWVXPPDU\MXGJPHQWVKRXOG
KDYHEHHQJUDQWHGRQWKHDOWHUQDWHJURXQGWKDWLWKDVVKRZQ
WKDWWKHLGHDWRXVHDOLYH&KLKXDKXDLQ7DFR%HOODGYHUWLVLQJ
ZDV LQGHSHQGHQWO\ FUHDWHG E\ :LOOLDPV DQG %HQQHWW DW
&KLDW'D\$SSHOOHHSRLQWVWR.LHQ]OHY&DSLWDO&LWLHV$P
%URDG&R)6XSS ('0LFK IRUWKH
SURSRVLWLRQ WKDW DSSHOOHH PD\ UHEXW D SULPD IDFLH FDVH RI
LPSURSHUXVHRIDSSHOODQWV¶LGHDVE\VKRZLQJWKDWWKHLGHDV
ZHUHLQGHSHQGHQWO\FUHDWHG$SSHOODQWVGLVDJUHHDQGFRQWHQG
WKDW WKH\ KDYH SUHVHQWHG VWURQJ FLUFXPVWDQWLDO HYLGHQFH
1R :UHQFK//&HWDOY7DFR%HOO&RUS
0DWVXVKLWD(OHF,QGXV&R/WGY=HQLWK5DGLR&RUS
86
7KHGLVWULFWFRXUWIRXQGWKDWDSSHOODQWVSURGXFHGVXIILFLHQW
HYLGHQFHWRFUHDWHDJHQXLQHLVVXHRIPDWHULDOIDFWUHJDUGLQJ
ZKHWKHU DQ LPSOLHGLQIDFW FRQWUDFW H[LVWHG EHWZHHQ WKH
SDUWLHV6HH:UHQFK,,,)6XSSGDW2QDSSHDO
7DFR %HOO DUJXHV WKDW WKLV FRQFOXVLRQ ZDV HUURQHRXV DQG
DVVHUWVWKDWWKHUHFRUGFRQWDLQVQRHYLGHQFHRIDQHQIRUFHDEOH
FRQWUDFW :H DJUHH ZLWK WKH GLVWULFW FRXUW¶V ILQGLQJ WKDW
DSSHOODQWVSUHVHQWHGVXIILFLHQWHYLGHQFHWRVXUYLYHVXPPDU\
MXGJPHQW RQ WKH TXHVWLRQ RI ZKHWKHU DQ LPSOLHGLQIDFW
FRQWUDFW H[LVWHG XQGHU 0LFKLJDQ ODZ :H PXVW WKHUHIRUH
GHWHUPLQHZKHWKHUDSSHOODQWV¶LPSOLHGLQIDFWFRQWUDFWFODLP
LVSUHHPSWHGE\IHGHUDOODZ
$3UHHPSWLRQ
6HFWLRQRIWKH&RS\ULJKW$FWSURYLGHVWKDW
2QDQGDIWHU-DQXDU\DOOOHJDORUHTXLWDEOHULJKWV
WKDWDUHHTXLYDOHQWWRDQ\RIWKHH[FOXVLYHULJKWVZLWKLQ
WKHJHQHUDOVFRSHRIFRS\ULJKWDVGHILQHGE\VHFWLRQ
LQ ZRUNV RI DXWKRUVKLS WKDW DUH IL[HG LQ D WDQJLEOH
PHGLXP RI H[SUHVVLRQ DQG FRPH ZLWKLQ WKH VXEMHFW
PDWWHURIFRS\ULJKWDVVSHFLILHGE\VHFWLRQVDQG
ZKHWKHU FUHDWHG EHIRUH RU DIWHU WKDW GDWH DQG ZKHWKHU
SXEOLVKHGRUXQSXEOLVKHGDUHJRYHUQHGH[FOXVLYHO\E\
WKLVWLWOH7KHUHDIWHUQRSHUVRQLVHQWLWOHGWRDQ\VXFK
ULJKW RU HTXLYDOHQW ULJKW LQ DQ\ VXFK ZRUN XQGHU WKH
FRPPRQODZRUVWDWXWHVRIDQ\6WDWH
86& † D ,Q VXP XQGHU † D VWDWH
FRPPRQODZRUVWDWXWRU\FODLPLVSUHHPSWHGLI WKHZRUN
LVZLWKLQWKHVFRSHRIWKH³VXEMHFWPDWWHURIFRS\ULJKW´DV
VSHFLILHGLQ86&††DQG WKHULJKWVJUDQWHG
XQGHUVWDWHODZDUHHTXLYDOHQWWRDQ\H[FOXVLYHULJKWVZLWKLQ
WKHVFRSHRIIHGHUDOFRS\ULJKWDVVHWRXWLQ86&†
6HH+DUSHU 5RZ3XEOLVKHUV,QFY1DWLRQ(QWHUSULVHV
)G G&LU UHY¶GRQRWKHUJURXQGV
86 VHHDOVR1DWLRQDO%DVNHWEDOO$VV¶QY

-- 9 of 14 --

:UHQFK//&HWDOY7DFR%HOO&RUS 1R
6HFWLRQ SURYLGHV
† 6XEMHFW PDWWHU RI FRS\ULJKW ,Q JHQHUDO
D &RS\ULJKW SURWHFWLRQ VXEVLVWV LQ DFFRUGDQFH ZLWK WKLV WLWOH
LQ RULJLQDO ZRUNV RI DXWKRUVKLS IL[HG LQ DQ\ WDQJLEOH PHGLXP RI
H[SUHVVLRQ QRZ NQRZQ RU ODWHU GHYHORSHG IURP ZKLFK WKH\ FDQ
EH SHUFHLYHG UHSURGXFHG RU RWKHUZLVH FRPPXQLFDWHG HLWKHU
GLUHFWO\ RU ZLWK WKH DLG RI D PDFKLQH RU GHYLFH :RUNV RI
DXWKRUVKLS LQFOXGH WKH IROORZLQJ FDWHJRULHV
OLWHUDU\ ZRUNV
PXVLFDO ZRUNV LQFOXGLQJ DQ\ DFFRPSDQ\LQJ ZRUGV
GUDPDWLF ZRUNV LQFOXGLQJ DQ\ DFFRPSDQ\LQJ PXVLF
SDQWRPLPHV DQG FKRUHRJUDSKLF ZRUNV
SLFWRULDO JUDSKLF DQG VFXOSWXUDO ZRUNV
PRWLRQ SLFWXUHV DQG RWKHU DXGLRYLVXDO ZRUNV
VRXQG UHFRUGLQJV DQG
DUFKLWHFWXUDO ZRUNV
E ,Q QR FDVH GRHV FRS\ULJKW SURWHFWLRQ IRU DQ RULJLQDO ZRUN RI
DXWKRUVKLS H[WHQG WR DQ\ LGHD SURFHGXUH SURFHVV V\VWHP
0RWRUROD ,QF )G G &LU 8QLWHG
6WDWHVH[UHO%HUJHY%GRI7UXVWHHVRIWKH8QLYRI$OD
)G WK&LU (KDWY7DQQHU)G
WK&LU &RXUWVDQGFRPPHQWDWRUVKDYH
GHVFULEHG WKLV SUHHPSWLRQ DQDO\VLV DV HQFRPSDVVLQJ D
³VXEMHFW PDWWHU UHTXLUHPHQW´ DQG D ³JHQHUDO VFRSH´ RU
³HTXLYDOHQF\´UHTXLUHPHQW6HH1DWLRQDO%DVNHWEDOO$VV¶Q
)GDW0HOYLOOH%1LPPHU 'DYLG1LPPHU
1LPPHURQ&RS\ULJKW†>%@>@>@DWWR
>KHUHLQDIWHU1LPPHURQ&RS\ULJKW@
6XEMHFW0DWWHU5HTXLUHPHQW
$SSHOODQWVFRQWHQGWKDWWKHGLVWULFWFRXUWHUUHGLQILQGLQJ
WKDWWKHLUFODLPVIHOOZLWKLQWKHVXEMHFWPDWWHUSURYLVLRQVRI
WKH &RS\ULJKW $FW $SSHOODQWV DUJXH WKDW WKHLU VWDWH ODZ
FODLPVDUHEDVHGRQLGHDVDQGFRQFHSWVWKDWZHUHFRQYH\HGWR
7DFR %HOO LQ ERWK WDQJLEOH DQG LQWDQJLEOH IRUP 7KH\
FRQFOXGH WKDW WKHLU FODLPV GR QRW FRPH ZLWKLQ WKH VXEMHFW
PDWWHU RI FRS\ULJKW DQG DUH WKXV QRW SUHHPSWHG EHFDXVH
† E H[SUHVVO\ H[FOXGHV LQWDQJLEOH LGHDV DQG FRQFHSWV
IURPWKHVXEMHFWPDWWHURIFRS\ULJKW
1R :UHQFK//&HWDOY7DFR%HOO&RUS
7DFR %HOO DQG WKH GLVWULFW FRXUW LQ :UHQFK ,,, ) 6XSS G DW
ERWK FLWH WKH 1LQWK &LUFXLW¶V GHFLVLRQ LQ 'HO 0DGHUD 3URSHUWLHV IRU WKH
SURSRVLWLRQ WKDW LPSOLHGLQIDFW FRQWUDFWV DUH SUHHPSWHG
DUHWKH\SURPLVHV7KH\DUHREOLJDWLRQVFUHDWHGE\ODZ
IRUUHDVRQVRIMXVWLFH¶4XDVLFRQWUDFWXDOUHFRYHU\LV
EDVHGXSRQEHQHILWDFFHSWHGRUGHULYHGIURPZKLFKWKH
ODZLPSOLHVDQREOLJDWLRQWRSD\´$QLPSOLHGLQIDFW
FRQWUDFW RQ WKH RWKHU KDQG LV D FRQVHQVXDO DJUHHPHQW
SUHVHQWLQJWKHVDPHHOHPHQWVDVDUHIRXQGLQDQH[SUHVV
FRQWUDFW H[FHSW WKDW LQ DQ LPSOLHG LQ IDFW FRQWUDFW WKH
SURPLVHLVQRWH[SUHVVHGLQZRUGVEXWLVUDWKHULPSOLHG
IURPWKHSURPLVRU¶VFRQGXFW
1LPPHURQ&RS\ULJKW†DWWR TXRWLQJ
:HLW]HQNRUQY/HVVHU&DOG3G
IRRWQRWHVRPLWWHG
)RU WKH SXUSRVH RI WKH SUHHPSWLRQ DQDO\VLV WKHUH LV D
FUXFLDOGLIIHUHQFHEHWZHHQDFODLPEDVHGRQTXDVLFRQWUDFW
LH D FRQWUDFW LPSOLHG LQ ODZ DQG D FODLP EDVHG XSRQ D
FRQWUDFWLPSOLHGLQIDFW,QWKHIRUPHUWKHDFWLRQGHSHQGVRQ
QRWKLQJPRUHWKDQWKHXQDXWKRUL]HGXVHRIWKHZRUN7KXVDQ
DFWLRQEDVHGRQDFRQWUDFWLPSOLHGLQODZUHTXLUHVQRH[WUD
HOHPHQWLQDGGLWLRQWRDQDFWRIUHSURGXFWLRQSHUIRUPDQFH
GLVWULEXWLRQRUGLVSOD\ZKHUHDVDQDFWLRQEDVHGRQDFRQWUDFW
LPSOLHGLQIDFWUHTXLUHVWKHH[WUDHOHPHQWRIDSURPLVHWRSD\
IRUWKHXVHRIWKHZRUNZKLFKLVLPSOLHGIURPWKHFRQGXFWRI
WKHSDUWLHV7KHDXWKRUVRI1LPPHURQ&RS\ULJKWH[SODLQWKH
VLJQLILFDQFHRIWKLVGLIIHUHQFHLQWKHLUDQDO\VLVRIWKH1LQWK
&LUFXLW¶V GHFLVLRQ LQ 'HO 0DGHUD 3URSV Y 5KRGHV
*DUGQHU,QF)G WK&LU LQZKLFKWKH
FRXUW KHOG WKDW DQ XQMXVW HQULFKPHQW FODLP EDVHG RQ
&DOLIRUQLDODZZDVSUHHPSWHG
,Q'HO0DGHUDKRZHYHUWKHFRXUW¶VGLVSRVLWLRQRIWKH
SUHHPSWLRQDUJXPHQWPD\KDYHEHHQGLFWXPJLYHQWKH
FRXUW¶V DOWHUQDWLYH KROGLQJ WKDW XQGHU WKH IDFWV WKHUH
SUHVHQWHGDQHVVHQWLDOHOHPHQWIRUXQMXVWHQULFKPHQWZDV
ODFNLQJXQGHU&DOLIRUQLDODZ,GDW)XUWKHUKDG

-- 10 of 14 --

:UHQFK//&HWDOY7DFR%HOO&RUS 1R
7KLV ODQJXDJH LV IRXQG LQ WKH HGLWLRQ RI 1LPPHU RQ
&RS\ULJKW LQ † >%@>@>D@ DW >J@ DW WR
XQDXWKRUL]HGUHSURGXFWLRQDQGXVHDSURPLVHWRSD\SODLQWLII
IRUXVHRIKLVSURGXFW´ .DW]'RFKUHUPDQQ (SVWHLQ,QF
Y +RPH %R[ 2IILFH 1R &,9 73* :/
DW 6'1<0DU ³.'(¶VDOOHJDWLRQ
WKDW +%2 PDGH DQ LPSOLHG SURPLVH WR SD\ IRU LWV LGHD LV
HQWLUHO\ VHSDUDWH DQG DSDUW IURP DQ\ FODLP IRU FRS\ULJKW
LQIULQJHPHQW.'(¶VFODLPIRUEUHDFKRILPSOLHGSURPLVH
WRSD\LVQRWSUHHPSWHG´
,Q(QGHPRO(QWP¶W%9Y7ZHQWLHWK7HOHYLVLRQ,QF1R
&9$%& %45; :/8634G
&'&DO6HSW WKHFDVHSULQFLSDOO\UHOLHG
XSRQ E\ WKH GLVWULFW FRXUW WKH FRXUW IRXQG WKDW SODLQWLII¶V
LPSOLHG FRQWUDFW FODLP ZDV SUHHPSWHG EHFDXVH LW IHOO
³VTXDUHO\LQWRWKHFDWHJRU\RIFRQWUDFWFODLPVWKDWDOOHJHQR
DGGLWLRQDOULJKWVRWKHUWKDQSURPLVLQJQRWWREHQHILWIURPWKH
FRS\ULJKWHGZRUN´,GDW7KH(QGHPROFRXUWFLWHG
1LPPHU RQ &RS\ULJKW † >%@>@>D@ DW >J@ DW
IRU WKH SURSRVLWLRQ WKDW ³LPSOLHG FRQWUDFWV DV D
VSHFLHV RI TXDVLFRQWUDFW μVKRXOG EH UHJDUGHG DV DQ
³HTXLYDOHQWULJKW´DQGSUHHPSWHG>@¶´,G,QWKHLQVWDQWFDVH
KRZHYHUDSSHOODQWV¶FODLPLVQRWEDVHGRQTXDVLFRQWUDFW
LQVWHDGLWLVEDVHGXSRQDQLPSOLHGLQIDFWFRQWUDFWZKLFK
XQGHU0LFKLJDQODZGRHVQRWH[LVWXQOHVVWKHPLQGVRIWKH
SDUWLHVPHHWE\UHDVRQRIZRUGVRUFRQGXFW
7KH DXWKRUV RI 1LPPHU RQ &RS\ULJKW ZDUQ DJDLQVW
FRQIXVLQJ FRQWUDFWV LPSOLHG LQ ODZ TXDVLFRQWUDFW DQG
FRQWUDFWVLPSOLHGLQIDFW
8QIRUWXQDWHO\PDQ\FRXUWVLQGHDOLQJZLWKLGHDFDVHVIDLO
WRGLVWLQJXLVKEHWZHHQDFRQWUDFWLPSOLHGLQODZDQGD
FRQWUDFWLPSOLHGLQIDFW$QDFWLRQLQTXDVLFRQWUDFWLV
QRW D WUXH FRQWUDFW VLQFH ³μTXDVL FRQWUDFWV XQOLNH WUXH
FRQWUDFWVDUHQRWEDVHGXSRQWKHDSSDUHQWLQWHQWLRQRI
WKHSDUWLHVWRXQGHUWDNHWKHSHUIRUPDQFHVLQTXHVWLRQQRU
1R :UHQFK//&HWDOY7DFR%HOO&RUS
PHWKRG RI RSHUDWLRQ FRQFHSW SULQFLSOH RU GLVFRYHU\ UHJDUGOHVV
RI WKH IRUP LQ ZKLFK LW LV GHVFULEHG H[SODLQHG LOOXVWUDWHG RU
HPERGLHG LQ VXFK ZRUN
,Q:UHQFK,WKHGLVWULFWFRXUWIRXQGWKDWDSSHOODQWV¶FODLPV
IHOOZLWKLQWKHVXEMHFWPDWWHURIFRS\ULJKW³EHFDXVHWKH\DUH
SUHPLVHGXSRQLGHDVDQGFRQFHSWVIL[HGLQDWDQJLEOHPHGLXP
RI H[SUHVVLRQ QDPHO\ μVWRU\ERDUGV¶ DQG μSUHVHQWDWLRQ
PDWHULDOV¶IXUQLVKHGE\3ODLQWLIIV´:/DW
7KHGLVWULFWFRXUWUHDVRQHGWKDWDSSHOODQWV¶VWDWHODZFODLPV
GHSHQGHGVXEVWDQWLDOO\XSRQZRUNVVXEMHFWWRWKHFRS\ULJKW
SURWHFWLRQDQGGLGQRWDULVHVROHO\RXWRILQWDQJLEOHFRQFHSWV
WKDWZHUHRUDOO\FRQYH\HGWR7DFR%HOO,G
,QUHDFKLQJWKLVFRQFOXVLRQWKHGLVWULFWFRXUWUHOLHGRQWKH
)RXUWK &LUFXLW¶V GHFLVLRQ LQ %HUJH LQ ZKLFK D SODLQWLII
EURXJKW D VWDWH ODZ FRQYHUVLRQ DFWLRQ FODLPLQJ WKDW
GHIHQGDQWV KDG XVHG LGHDV DQG PHWKRGV FRQWDLQHG LQ
SODLQWLII¶VGLVVHUWDWLRQZLWKRXWKHUSHUPLVVLRQ6HH)G
DW7KHSODLQWLIIFRQWHQGHGWKDWEHFDXVHLGHDV
DQGPHWKRGVDUHH[FOXGHGIURPFRS\ULJKWSURWHFWLRQXQGHU
† KHU VWDWH ODZ FODLPV FRXOG QRW EH SUHHPSWHG XQGHU
†7KHFRXUWUHMHFWHGWKLVDUJXPHQWRQWKHJURXQGWKDW
WKHVFRSHRISURWHFWLRQDIIRUGHGXQGHUFRS\ULJKWODZLVQRWWKH
VDPHDVWKHVFRSHRISUHHPSWLRQ5DWKHUWKHFRXUWFRQFOXGHG
WKDW ³WKH VKDGRZ DFWXDOO\ FDVW E\ WKH >&RS\ULJKW@ $FW¶V
SUHHPSWLRQLVQRWDEO\EURDGHUWKDQWKHZLQJRILWVSURWHFWLRQ´
,GDW
$SSHOODQWVXUJHWKLVFRXUWWRUHMHFWWKLVFRQFOXVLRQIRUWKH
VDPH UHDVRQ XUJHG E\ WKH SODLQWLII LQ %HUJH 6SHFLILFDOO\
DSSHOODQWVDUJXHWKDW%HUJHGRHVQRWFRPSRUWZLWKDOLWHUDO
UHDGLQJRI† E ZKLFKH[SUHVVO\H[FOXGHVLGHDVDQGRWKHU
LQWDQJLEOH IRUPV RI H[SUHVVLRQ IURP FRS\ULJKW SURWHFWLRQ
$SSHOODQWVUHO\RQVHYHUDOGLVWULFWFRXUWFDVHVZKLFKKDYHKHOG
WKDWEHFDXVHLGHDVDQGFRQFHSWVDUHQRWDIIRUGHGFRS\ULJKW

-- 11 of 14 --

:UHQFK//&HWDOY7DFR%HOO&RUS 1R
6HH 0D\HU Y -RVLDK :HGJZRRG 6RQV /WG ) 6XSS
Q 6'1< ³VWDWH ODZV WKDW SURWHFW LGHDV DV GLVWLQFW IURP
WKHLU H[SUHVVLRQ DUH ZLWKRXW WKH VXEMHFW PDWWHU RI FRS\ULJKW´ &DQWHU Y
:HVW 3XE &R ) 6XSS G :/ DW 1' &DO
ZLWKGUDZQ IURP SXEOLFDWLRQ ³7R WKH H[WHQW 3ODLQWLIIV VHHN
FRPSHQVDWLRQ IRU WKH XQGHUO\LQJ FRQFHSWV SURFHVVHV DQG SURFHGXUHV
UDWKHU WKDQ WKH VSHFLILF H[SUHVVLRQ >WKH@ FDXVH RI DFWLRQ LV QRW
SUHHPSWHG´ /DWWLH Y 0XUGDFK 8634G :/ DW
1' &DO -DQ ILQGLQJ WKDW ³LGHDV GR QRW FRPH XQGHU WKH
VXEMHFW PDWWHU RI FRS\ULJKW DQG FODLPV EDVHG XSRQ WKHP DUH QRW
SUHHPSWHG´
SURWHFWLRQ WKH\ DUH QRW ZLWKLQ WKH VXEMHFW PDWWHU RI
FRS\ULJKW
7KHDSSHOODWHFRXUWVWKDWKDYHDGGUHVVHGWKLVTXHVWLRQKDYH
GLVDJUHHG ZLWK WKH UHDVRQLQJ RI WKH GHFLVLRQV FLWHG E\
DSSHOODQWV KRZHYHU 7KH 6HFRQG )RXUWK DQG 6HYHQWK
&LUFXLWV KDYH KHOG WKDW WKH VFRSH RI WKH &RS\ULJKW $FW¶V
VXEMHFWPDWWHUH[WHQGVEH\RQGWKHWDQJLEOHH[SUHVVLRQVWKDW
FDQ EH SURWHFWHG XQGHU WKH $FW WR HOHPHQWV RI H[SUHVVLRQ
ZKLFKWKHPVHOYHVFDQQRWEHSURWHFWHG6HHHJ1DWLRQDO
%DVNHWEDOO$VV¶Q)GDW KROGLQJWKDWVXEMHFW
PDWWHURIFRS\ULJKWXQGHU†LQFOXGHV³XQFRS\ULJKWDEOH´
DVZHOODV³FRS\ULJKWDEOH´HOHPHQWV %HUJH)GDW
ILQGLQJWKDW³VFRSHDQGSURWHFWLRQDUHQRWV\QRQ\PV´DQG
KROGLQJWKDWXQFRS\ULJKWDEOHLGHDVWKDWPDNHXSFRS\ULJKWDEOH
ZRUNVDUHZLWKLQVXEMHFWPDWWHURIFRS\ULJKW 3UR&',QFY
=HLGHQEHUJ)G WK&LU ILQGLQJWKDW
XQFRS\ULJKWDEOH GDWD XQGHUO\LQJ D FRS\ULJKWDEOH FRPSXWHU
SURJUDP DUH ZLWKLQ VXEMHFW PDWWHU RI FRS\ULJKW $V WKH
6HFRQG&LUFXLWUHDVRQHGWKHIDFWWKDWFRS\ULJKWDEOHPDWHULDO
FRQWDLQVXQFRS\ULJKWDEOHH[SUHVVLRQVVKRXOGQRWUHPRYHWKH
ZRUN IURP WKH VXEMHFW PDWWHU RI FRS\ULJKW XQGHU †
EHFDXVH RWKHUZLVH ³VWDWHV ZRXOG EH IUHH WR H[SDQG WKH
SHULPHWHUVRIFRS\ULJKWSURWHFWLRQWRWKHLURZQOLNLQJRQWKH
WKHRU\WKDWSUHHPSWLRQZRXOGEHQREDUWRVWDWHSURWHFWLRQRI
PDWHULDOQRWPHHWLQJIHGHUDOVWDWXWRU\VWDQGDUGV´+DUSHU
5RZ)GDW TXRWLQJ+55HS1RDW
UHSULQWHGLQ86&&$1
1R :UHQFK//&HWDOY7DFR%HOO&RUS
7KH 6HYHQWK &LUFXLW LQ =HLGHQEHUJ GLG TXDOLI\ VRPHZKDW LWV EURDG
KROGLQJ WKDW EHFDXVH FRQWUDFWV XQOLNH WKH &RS\ULJKW $FW GR QRW FUHDWH
H[FOXVLYH ULJKWV EXW JHQHUDOO\ DIIHFW RQO\ WKHLU SDUWLHV WKH\ DUH QRW
SUHHPSWHG VWDWLQJ ³>:@H WKLQN LW SUXGHQW WR UHIUDLQ IURP DGRSWLQJ D UXOH
WKDW DQ\WKLQJ ZLWK WKH ODEHO μFRQWUDFW¶ LV QHFHVVDULO\ RXWVLGH WKH
SUHHPSWLRQ FODXVH WKH YDULDWLRQV DQG SRVVLELOLWLHV DUH WRR QXPHURXV WR
IRUHVHH´ )G DW
,QILQGLQJWKDWDSSHOODQWV¶VWDWHODZFRQWUDFWFODLPLVQRW
SUHHPSWHGZHGRQRWHPEUDFHWKHSURSRVLWLRQWKDWDOOVWDWH
ODZFRQWUDFWFODLPVVXUYLYHSUHHPSWLRQVLPSO\EHFDXVHWKH\
LQYROYH WKH DGGLWLRQDO HOHPHQW RI SURPLVH 6HH HJ
=HLGHQEHUJ)GDW7DTXLQRY7HOHG\QH0RQDUFK
5XEEHU )G WK &LU DSSHQGL[
8QGHU WKDW UDWLRQDOH D FRQWUDFW ZKLFK FRQVLVWHG RQO\ RI D
SURPLVHQRWWRUHSURGXFHWKHFRS\ULJKWHGZRUNZRXOGVXUYLYH
SUHHPSWLRQHYHQWKRXJKLWZDVOLPLWHGWRRQHRIWKHH[FOXVLYH
ULJKWVHQXPHUDWHGLQ86&†,IWKHSURPLVHDPRXQWV
RQO\WRDSURPLVHWRUHIUDLQIURPUHSURGXFLQJSHUIRUPLQJ
GLVWULEXWLQJRUGLVSOD\LQJWKHZRUNWKHQWKHFRQWUDFWFODLPLV
SUHHPSWHG7KHFRQWUDU\UHVXOWZRXOGFOHDUO\YLRODWHWKHUXOH
WKDW VWDWH ODZ ULJKWV DUH SUHHPSWHG ZKHQ WKH\ ZRXOG EH
DEULGJHGE\DQDFWZKLFKLQDQGRILWVHOIZRXOGLQIULQJHRQH
RIWKHH[FOXVLYHULJKWVRI†$VWKHDXWKRUVQRWHLQ
1LPPHURQ&RS\ULJKW†>%@>@>D@DW³$OWKRXJKWKH
YDVW PDMRULW\ RI FRQWUDFW FODLPV ZLOO SUHVXPDEO\ VXUYLYH
VFUXWLQ\QRQHWKHOHVVSUHHPSWLRQVKRXOGFRQWLQXHWRVWULNH
GRZQFODLPVWKDWWKRXJKGHQRPLQDWHGμFRQWUDFW¶QRQHWKHOHVV
FRPSODLQ GLUHFWO\ DERXW WKH UHSURGXFWLRQ RI H[SUHVVLYH
PDWHULDOV´
2XUDQDO\VLVRIWKHSUHHPSWLRQLVVXHLVVXSSRUWHGE\WKH
IROORZLQJFDVHV$FRUQ6WUXFWXUHV,QFY6ZDQW])G
WK&LU GHIHQGDQW¶VDJUHHPHQWWKDWLIKHXVHG
$FRUQ¶VEXLOGLQJSODQVWKHQKHZDVREOLJDWHGWRHLWKHUSD\
IRUWKHSODQVRUSXUFKDVHKLVEXLOGLQJPDWHULDOVIURP$FRUQ
GLGQRWDULVHRXWRIWKHVXEMHFWPDWWHURIFRS\ULJKWDQGZDV
QRWSUHHPSWHG %ULJQROLY%DOFK+DUG\ 6FKHLQPDQ,QF
)6XSS 6'1< ILQGLQJWKDWWKH
EUHDFK RI FRQWUDFW FODLPV ³LQYROYH DQ HOHPHQW EH\RQG

-- 12 of 14 --

:UHQFK//&HWDOY7DFR%HOO&RUS 1R
%XW VHH 'HOWDN ,QF Y $GYDQFHG 6\VWHPV ,QF )G
WK &LU ³7KH YDOXH RI WKH LQIULQJHU¶V XVH LV D SHUPLVVLEOH EDVLV
IRU HVWLPDWLQJ DFWXDO GDPDJHV´ 7KLV LVVXH LV GLVFXVVHG DW OHQJWK DW
1LPPHU RQ &RS\ULJKW † >$@ DW WR
GDPDJHV DQG DQ\ DGGLWLRQDO SURILWV RI WKH LQIULQJHU RU
VWDWXWRU\ GDPDJHV DQG FRVWV DQG DWWRUQH\V IHHV 6HH
86&††DQG7KHUHPHGLHVDYDLODEOH
XQGHU FRS\ULJKW ODZ GR QRW LQFOXGH GDPDJHV IRU WKH
UHDVRQDEOH YDOXH RI WKH GHIHQGDQWV¶ XVH RI WKH ZRUN 6HH
%XVLQHVV7UHQGV$QDO\VWV,QFY)UHHGRQLD*URXS,QF
)G QG&LU
7KHSURSRVLWLRQWKDWDVWDWHODZEUHDFKRIFRQWUDFWFODLP
EDVHGXSRQDSURPLVHWRSD\IRUWKHXVHRIWKHZRUNLVQRW
SUHHPSWHGLVVXSSRUWHGE\DQHPLQHQWDXWKRULW\RQFRS\ULJKW
ODZ6HH1LPPHURQ&RS\ULJKW†>%@>@>D@DWWR
ZKLFKVWDWHV
>D@%UHDFKRI&RQWUDFW$GYHUWLQJILUVWWRFRQWUDFWULJKWV
DQDXWKRU¶VULJKWWRUR\DOWLHVXQGHUDSXEOLFDWLRQFRQWUDFW
PD\ EH FRQGLWLRQHG XSRQ WKH SXEOLVKHU¶V DFWV RI
UHSURGXFWLRQDQGGLVWULEXWLRQRIFRSLHVRIWKHZRUNEXW
WKHUHLVDOVRDQRWKHUFUXFLDODFWWKDWVWDQGVDVDFRQGLWLRQ
WRWKHSXEOLVKHU¶VOLDELOLW\WKHSXEOLVKHU¶VSURPLVHWRSD\
WKH VWDWHG UR\DOW\ :LWKRXW D SURPLVH WKHUH LV QR
FRQWUDFWZKLOHDSURPLVHRQWKHSDUWRIRQHZKRHQJDJHV
LQXQOLFHQVHGUHSURGXFWLRQRUGLVWULEXWLRQLVQRWUHTXLUHG
LQ RUGHU WR FRQVWLWXWH KLP D FRS\ULJKW LQIULQJHU
&HUWDLQO\SUHHPSWLRQVKRXOGEHGHQLHGWRWKHH[WHQW
WKDW D EUHDFK RI FRQWUDFW FDXVH RI DFWLRQ DOOHJHV PRUH
WKDQ UHSURGXFWLRQ DGDSWDWLRQ HWF VLPSOLFWHU RI D
FRS\ULJKWHGZRUN )RRWQRWHVRPLWWHG
+HUHDVLQWKHH[DPSOHJLYHQLQ 1LPPHURQ&RS\ULJKW
WKHUHLVDQRWKHUFUXFLDODFWWKDWVWDQGVDVDFRQGLWLRQWRWKH
DSSHOOHH¶VOLDELOLW\WRZLWLWVSURPLVHWRSD\IRUWKHXVHRIWKH
ZRUN7KXVWKLVLVDFDVHLQZKLFKWKHEUHDFKRIFRQWUDFW
FDXVHRIDFWLRQDOOHJHVPRUHWKDQUHSURGXFWLRQDGDSWDWLRQ
HWFVLPSOLFWHU
1R :UHQFK//&HWDOY7DFR%HOO&RUS
6HFWLRQ SURYLGHV
† ([FOXVLYH ULJKWV LQ FRS\ULJKWHG ZRUNV
6XEMHFW WR VHFWLRQV WKURXJK WKH RZQHU RI FRS\ULJKW
XQGHU WKLV WLWOH KDV WKH H[FOXVLYH ULJKWV WR GR DQG WR DXWKRUL]H DQ\
RI WKH IROORZLQJ
WR UHSURGXFH WKH FRS\ULJKWHG ZRUN LQ FRSLHV RU
SKRQRUHFRUGV
WR SUHSDUH GHULYDWLYH ZRUNV EDVHG XSRQ WKH FRS\ULJKWHG
ZRUN
WR GLVWULEXWH FRSLHV RU SKRQRUHFRUGV RI WKH FRS\ULJKWHG ZRUN
:HMRLQRXUVLVWHUFLUFXLWVLQKROGLQJWKDWWKHVFRSHRIWKH
&RS\ULJKW$FW¶VVXEMHFWPDWWHULVEURDGHUWKDQWKHVFRSHRI
WKH $FW¶V SURWHFWLRQV 7KH UHFRUG GHPRQVWUDWHV WKDW
DSSHOODQWV H[SHQGHG FRQVLGHUDEOH HIIRUW SUHSDULQJ DQG
SUHVHQWLQJWDQJLEOHH[SUHVVLRQVRIWKHLU3V\FKR&KLKXDKXD
FRQFHSWIRUDSSHOOHHZKLFKH[SUHVVLRQVLQFOXGHGVWRU\ERDUGV
VFULSWV GUDZLQJV FORWKLQJ GHVLJQV DQG SDFNDJLQJ 7KH
SRVLWLRQQRZXUJHGE\DSSHOODQWVZRXOGUHTXLUHXVWRVHSDUDWH
RXW DSSHOODQWV¶ LQWDQJLEOH LGHDV IURP WKHVH WDQJLEOH
H[SUHVVLRQVDQGZRXOGDIIRUGDSSHOODQWVDVWDWHODZFODLPLQ
WKHIDFHRIFOHDUFRQJUHVVLRQDOLQWHQWWRSUHHPSWVXFKDFWLRQ
$VWKH6HYHQWK&LUFXLWKDVQRWHG³>R@QHIXQFWLRQRI† D
LVWRSUHYHQWVWDWHVIURPJLYLQJVSHFLDOSURWHFWLRQWRZRUNVRI
DXWKRUVKLSWKDW&RQJUHVVKDVGHFLGHGVKRXOGEHLQWKHSXEOLF
GRPDLQZKLFKLWFDQDFFRPSOLVKRQO\LIμVXEMHFWPDWWHURI
FRS\ULJKW¶LQFOXGHVDOOZRUNVRIDW\SHFRYHUHGE\VHFWLRQV
DQGHYHQLIIHGHUDOODZGRHVQRWDIIRUGSURWHFWLRQWR
WKHP´=HLGHQEHUJ)GDW7KXVZHFRQFOXGHWKDW
WKHGLVWULFWFRXUWGLGQRWHUUZLWKUHVSHFWWRWKHVXEMHFWPDWWHU
SURQJRILWVSUHHPSWLRQDQDO\VLV
(TXLYDOHQF\5HTXLUHPHQW
7KH VHFRQG SURQJ RI WKH SUHHPSWLRQ DQDO\VLV WKH VR
FDOOHG ³HTXLYDOHQF\´ RU ³JHQHUDO VFRSH´ UHTXLUHPHQW
DXJPHQWVWKHVXEMHFWPDWWHULQTXLU\E\DVNLQJZKHWKHUWKH
VWDWHFRPPRQODZRUVWDWXWRU\DFWLRQDWLVVXHDVVHUWVULJKWV
WKDW DUH WKH VDPH DV WKRVH SURWHFWHG XQGHU † RI WKH
&RS\ULJKW$FW8QGHU† D HYHQLIDSSHOODQWV¶VWDWHODZ

-- 13 of 14 --

:UHQFK//&HWDOY7DFR%HOO&RUS 1R
WR WKH SXEOLF E\ VDOH RU RWKHU WUDQVIHU RI RZQHUVKLS RU E\ UHQWDO
OHDVH RU OHQGLQJ
LQ WKH FDVH RI OLWHUDU\ PXVLFDO GUDPDWLF DQG FKRUHRJUDSKLF
ZRUNV SDQWRPLPHV DQG PRWLRQ SLFWXUHV DQG RWKHU DXGLRYLVXDO
ZRUNV WR SHUIRUP WKH FRS\ULJKWHG ZRUN SXEOLFO\
LQ WKH FDVH RI OLWHUDU\ PXVLFDO GUDPDWLF DQG FKRUHRJUDSKLF
ZRUNV SDQWRPLPHV DQG SLFWRULDO JUDSKLF RU VFXOSWXUDO ZRUNV
LQFOXGLQJ WKH LQGLYLGXDO LPDJHV RI D PRWLRQ SLFWXUH RU RWKHU
DXGLRYLVXDO ZRUN WR GLVSOD\ WKH FRS\ULJKWHG ZRUN SXEOLFO\ DQG
LQ WKH FDVH RI VRXQG UHFRUGLQJV WR SHUIRUP WKH FRS\ULJKWHG
ZRUN SXEOLFO\ E\ PHDQV RI D GLJLWDO DXGLR WUDQVPLVVLRQ
FODLPVFRQFHUQZRUNVZLWKLQWKHVXEMHFWPDWWHURIFRS\ULJKW
VXFKFODLPVZLOORQO\EHSUHHPSWHGLIWKH\DVVHUWULJKWVWKDW
DUH ³HTXLYDOHQW WR DQ\ RI WKH H[FOXVLYH ULJKWV ZLWKLQ WKH
JHQHUDOVFRSHRIFRS\ULJKWDVVSHFLILHGE\VHFWLRQ>@´
86&† D
(TXLYDOHQF\H[LVWVLIWKHULJKWGHILQHGE\VWDWHODZPD\EH
DEULGJHGE\DQDFWZKLFKLQDQGRILWVHOIZRXOGLQIULQJHRQH
RIWKHH[FOXVLYHULJKWV6HH+DUSHU 5RZ)GDW
&RQYHUVHO\LIDQH[WUDHOHPHQWLVUHTXLUHGLQVWHDGRIRULQ
DGGLWLRQWRWKHDFWVRIUHSURGXFWLRQSHUIRUPDQFHGLVWULEXWLRQ
RU GLVSOD\ LQ RUGHU WR FRQVWLWXWH D VWDWHFUHDWHG FDXVH RI
DFWLRQWKHUHLVQRSUHHPSWLRQSURYLGHGWKDWWKHH[WUDHOHPHQW
FKDQJHV WKH QDWXUH RI WKH DFWLRQ VR WKDW LW LV TXDOLWDWLYHO\
GLIIHUHQW IURP D FRS\ULJKW LQIULQJHPHQW FODLP 6HH LG
5RVFLV]HZVNLY$UHWH$VVRFLDWHV,QF)G WK
&LU 1DWLRQDO &DU 5HQWDO 6\V ,QF Y &RPSXWHU
$VVRFV,QWQ¶O,QF)G WK&LU :H
ILQGWKDWDSSHOODQWV¶VWDWHODZLPSOLHGLQIDFWFRQWUDFWFODLP
VXUYLYHVSUHHPSWLRQXQGHUWKHVHUXOHV
8QGHU 0LFKLJDQ ODZ ³>D@Q LPSOLHG FRQWUDFW OLNH RWKHU
FRQWUDFWVUHTXLUHVPXWXDODVVHQWDQGFRQVLGHUDWLRQ´6SUX\WWH
Y 'HS¶W RI &RUU 1:G 0LFK
0LFKLJDQGUDZVDFOHDUGLVWLQFWLRQEHWZHHQFRQWUDFWVLPSOLHG
LQIDFWDQGFRQWUDFWVLPSOLHGLQODZ
7KHILUVWGRHVQRWH[LVWXQOHVVWKHPLQGVRIWKHSDUWLHV
PHHW E\ UHDVRQ RI ZRUGV RU FRQGXFW 7KH VHFRQG LV
1R :UHQFK//&HWDOY7DFR%HOO&RUS
TXDVLRUFRQVWUXFWLYHDQGGRHVQRWUHTXLUHDPHHWLQJRI
PLQGVEXWLVLPSRVHGE\ILFWLRQRIODZ>@
&DVFDGHQY0DJU\WD1: 0LFK
7KHJLVWRIDSSHOODQWV¶VWDWHODZLPSOLHGLQIDFWFRQWUDFW
FODLPLVEUHDFKRIDQDFWXDOSURPLVHWRSD\IRUDSSHOODQWV¶
FUHDWLYH ZRUN ,W LV QRW WKH XVH RI WKH ZRUN DORQH EXW WKH
IDLOXUHWRSD\IRULWWKDWYLRODWHVWKHFRQWUDFWDQGJLYHVULVHWR
WKHULJKWWRUHFRYHUGDPDJHV7KXVWKHVWDWHODZULJKWLVQRW
DEULGJHGE\DQDFWZKLFKLQDQGRILWVHOIZRXOGLQIULQJHRQH
RIWKHH[FOXVLYHULJKWVJUDQWHGE\†VLQFHWKHULJKWWREH
SDLGIRUWKHXVHRIWKHZRUNLVQRWRQHRIWKRVHULJKWV
$QH[WUDHOHPHQWLVUHTXLUHGLQVWHDGRIRULQDGGLWLRQWRWKH
DFWVRIUHSURGXFWLRQSHUIRUPDQFHGLVWULEXWLRQRUGLVSOD\LQ
RUGHUWRFRQVWLWXWHWKHVWDWHFUHDWHGFDXVHRIDFWLRQ7KHH[WUD
HOHPHQW LV WKH SURPLVH WR SD\ 7KLV H[WUD HOHPHQW GRHV
FKDQJH WKH QDWXUH RI WKH DFWLRQ VR WKDW LW LV TXDOLWDWLYHO\
GLIIHUHQW IURP D FRS\ULJKW LQIULQJHPHQW FODLP 7KH
TXDOLWDWLYHGLIIHUHQFHLQFOXGHVWKHUHTXLUHPHQWRISURRIRIDQ
HQIRUFHDEOH SURPLVH DQG D EUHDFK WKHUHRI ZKLFK UHTXLUHV
LQWHUDOLDSURRIRIPXWXDODVVHQWDQGFRQVLGHUDWLRQDVZHOO
DVSURRIRIWKHYDOXHRIWKHZRUNDQGDSSHOOHH¶VXVHWKHUHRI
7KLV TXDOLWDWLYH GLIIHUHQFH LV IXUWKHU UHIOHFWHG E\ WKH
GLIIHUHQFH LQ WKH UHPHG\ DIIRUGHG E\ WKH VWDWH ODZ FODLP
8QGHU0LFKLJDQODZDSODLQWLII¶VUHPHG\IRUEUHDFKRIDQ
LPSOLHGLQIDFWFRQWUDFWLQFOXGHVUHFRYHU\RIWKHUHDVRQDEOH
YDOXHRIWKHVHUYLFHVUHQGHUHGFRQVLGHULQJIDFWRUVVXFKDVWKH
JHQHUDOSUDFWLFHRIWKHLQGXVWU\6HH5RFNZHOO %RQG,QF
Y)O\LQJ'XWFKPDQ,QF1(G 0LFK&W
$SS VHHDOVR-RKQVRQY-RQHV)6XSS
('0LFK UHY¶GLQSDUWRQRWKHUJURXQGV
)G WK &LU &RPEHU 7RRO DQG 0ROG
(QJLQHHULQJ,QFY*HQHUDO0RWRUV&RUS)6XSS
('0LFK
8QGHU WKH &RS\ULJKW $FW UHPHGLHV IRU LQIULQJHPHQW DUH
OLPLWHG WR LQMXQFWLRQV LPSRXQGLQJ DQG GHVWUXFWLRQ RI
LQIULQJLQJDUWLFOHVUHFRYHU\RIWKHFRS\ULJKWRZQHU¶VDFWXDO

-- 14 of 14 --