01a0256p.06

0LOOVDSVHWDOY7KRPSVRQHWDO 1R
SODLQWLIIVFDQQRWVHULRXVO\FRQWHQGWKDW&RQJUHVVLQWHQGHGWKH
IHGHUDOHOHFWLRQVWDWXWHVWRSUHHPSWDGGLWLRQDO6WDWHPHDVXUHV
GHVLJQHGWRSURWHFWDJDLQVWIUDXG:HGHFOLQHWRDFFHSWDQ
DUJXPHQWWKDWZRXOGQHJDWHWKHDELOLW\RIWKH6WDWHVWRJXDUG
DJDLQVW IUDXG LQ WKH H[HUFLVH RI WKH IXQGDPHQWDO ULJKW RI
YRWLQJ
9,&RQFOXVLRQ
8QGHUFRQIOLFWSUHHPSWLRQSULQFLSOHVIHGHUDOODZSUHHPSWV
6WDWHODZZKHQWKHWZRDFWXDOO\FRQIOLFW*XVWDIVRQ)G
DW,QWKLVFDVHFRPSOLDQFHZLWKERWK7HQQHVVHH¶V(DUO\
9RWLQJ6WDWXWHVDQGWKHIHGHUDOHOHFWLRQGD\VWDWXWHVGRHVQRW
SUHVHQW³DSK\VLFDOLPSRVVLELOLW\´)ORULGD/LPH $YRFDGR
*URZHUV86DWEHFDXVHWKHFRPELQHGDFWLRQV
RI YRWHUV DQG RIILFLDOV PHDQW WR PDNH D ILQDO VHOHFWLRQ RI
IHGHUDO RIILFHKROGHUV²ZLWKLQ WKH PHDQLQJ RI )RVWHU Y
/RYH²RFFXU RQ IHGHUDO HOHFWLRQ GD\ 1RU GR WKH 7(96
³VWDQG>@DVDQREVWDFOHWRWKHDFFRPSOLVKPHQWDQGH[HFXWLRQ
RIWKHIXOOSXUSRVHVDQGREMHFWLYHVRI&RQJUHVV´+LQHV
86DW3XWDQRWKHUZD\WKHUHLVQRUHDVRQWRWKLQNWKDW
VLPSO\EHFDXVH&RQJUHVVHVWDEOLVKHGDIHGHUDOHOHFWLRQGD\LW
GLVSODFHGDOO6WDWHUHJXODWLRQRIWKHWLPHVIRUKROGLQJIHGHUDO
HOHFWLRQV
7KH 6WDWH PD\ PDNH UHJXODWLRQV RQ WKH VXEMHFW >RI
KROGLQJ HOHFWLRQV IRU UHSUHVHQWDWLYHV WR &RQJUHVV@
&RQJUHVVPD\PDNHUHJXODWLRQVRQWKHVDPHVXEMHFWRU
PD\DOWHURUDGGWRWKRVHDOUHDG\PDGH7KHSDUDPRXQW
FKDUDFWHURIWKRVH PDGHE\&RQJUHVVKDVWKHHIIHFWWR
VXSHUVHGHWKRVHPDGHE\WKH6WDWHVRIDUDVWKHWZRDUH
LQFRQVLVWHQWDQGQRIDUWKHU7KHUHLVQRVXFKFRQIOLFW
EHWZHHQWKHPDVWRSUHYHQWWKHLUIRUPLQJDKDUPRQLRXV
V\VWHP SHUIHFWO\ FDSDEOH RI EHLQJ DGPLQLVWHUHG DQG
FDUULHGRXWDVVXFK
([ 3DUWH 6LHEROG 86 DW HPSKDVLV DGGHG
7HQQHVVHH ODZ LQWHUDFWV ZLWK IHGHUDO ODZ WR IRUP D
KDUPRQLRXVV\VWHPIRUWKHDGPLQLVWUDWLRQRIIHGHUDOHOHFWLRQV
DWOHDVWVRIDUDVWKHLUWLPLQJLVFRQFHUQHG$FFRUGLQJO\ZH
DIILUPWKHMXGJPHQWRIWKHGLVWULFWFRXUW 7KH +RQRUDEOH 3DXO 5 0DWLD 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU WKH
1RUWKHUQ '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
0$57+$ / 0,//6$36 )5$1.
- &217, 5$&+(/ ' &217,
3ODLQWLIIV$SSHOODQWV
Y
%522. 7+203621LQKLV
RIILFLDOFDSDFLW\DV7HQQHVVHH
&RRUGLQDWRURI(OHFWLRQV
5,/(< & '$51(//LQKLV
RIILFLDOFDSDFLW\DV6HFUHWDU\
RI6WDWHRI7HQQHVVHH
'HIHQGDQWV$SSHOOHHV
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH(DVWHUQ'LVWULFWRI7HQQHVVHHDW&KDWWDQRRJD
1R²5$OODQ(GJDU&KLHI'LVWULFW-XGJH
$UJXHG$SULO
'HFLGHGDQG)LOHG$XJXVW
%HIRUH5<$1DQG%$7&+(/'(5&LUFXLW-XGJHV
0$7,$'LVWULFW-XGJH

-- 1 of 12 --

0LOOVDSVHWDOY7KRPSVRQHWDO 1R
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 0 0LOOHU %DNHU 0F'(50277 :,//
(0(5< :DVKLQJWRQ '& IRU $SSHOODQWV 0LFKDHO :
&DWDODQR 2)),&( 2) 7+( $77251(< *(1(5$/
1DVKYLOOH7HQQHVVHHIRU$SSHOOHH21%5,()00LOOHU
%DNHU0F'(50277:,// (0(5<:DVKLQJWRQ'&
&DPHURQ 6 +LOO %$.(5 '21(/621 %($50$1
&$/':(// &KDWWDQRRJD 7HQQHVVHH 0LFKDHO 6 1DGHO
-DPHV0LFKDHO/HKPDQQ&$55*22'621 :$51(5
:DVKLQJWRQ '& IRU $SSHOODQWV 0LFKDHO : &DWDODQR
2)),&( 2) 7+( $77251(< *(1(5$/ 1DVKYLOOH
7HQQHVVHHIRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
$/,&( 0 %$7&+(/'(5 &LUFXLW -XGJH 0DUWKD /
0LOOVDSV)UDQN-&RQWLDQG5DFKHO'&RQWLDOORIZKRP
KDYHSUHYLRXVO\YRWHGLQIHGHUDOHOHFWLRQVKHOGLQ7HQQHVVHH
DQG LQWHQG WR GR VR DJDLQ EURXJKW VXLW XQGHU 86&
†DOOHJLQJWKDW7HQQHVVHH¶VHDUO\YRWLQJV\VWHPFRQIOLFWV
ZLWKIHGHUDOVWDWXWHVWKDWHVWDEOLVKWKHILUVW7XHVGD\DIWHUWKH
ILUVW 0RQGD\ LQ 1RYHPEHU LQ HYHQQXPEHUHG \HDUV DV
HOHFWLRQGD\IRUIHGHUDORIILFHKROGHUVGLOXWHVWKHLUULJKWWR
YRWHDQGLPSHGHVWKHLUDELOLW\WRSDUWLFLSDWHLQSROOZDWFKLQJ
SURJUDPV7KHFRPSODLQWQDPHGWKH7HQQHVVHH&RRUGLQDWRU
RI(OHFWLRQVDQGWKH6HFUHWDU\RI6WDWHRI7HQQHVVHHLQWKHLU
RIILFLDOFDSDFLWLHVDVGHIHQGDQWVDQGVRXJKWGHFODUDWRU\DQG
LQMXQFWLYHUHOLHIFRVWVDQGDWWRUQH\V¶IHHV
3ODLQWLIIVSURPSWO\PRYHGIRUVXPPDU\MXGJPHQWDQGWKH
GHIHQGDQWV UHVSRQGHG E\ VHHNLQJ GLVPLVVDO XQGHU 5XOH
E RIWKH)HGHUDO5XOHVRI&LYLO3URFHGXUH)ROORZLQJ
D KHDULQJ RQ WKH PDWWHU WKH GLVWULFW FRXUW LVVXHG D
PHPRUDQGXPRSLQLRQJUDQWLQJWKHGHIHQGDQWV¶PRWLRQZKLFK
LWFRQYHUWHGWRRQHIRUVXPPDU\MXGJPHQWSXUVXDQWWR5XOH
1R 0LOOVDSVHWDOY7KRPSVRQHWDO
SUHHPSWV6WDWHODZZKHQWKHODWWHU³VWDQGVDVDQREVWDFOHWR
WKH H[HFXWLRQ RI WKH IXOO SXUSRVHV DQG REMHFWLYHV RI
&RQJUHVV´
7KHSODLQWLIIVDUJXHWKDWWKH(DUO\9RWLQJ6WDWXWHVFRQIOLFW
ZLWK IHGHUDO ODZ EHFDXVH WKH\ LQWHUIHUH ZLWK WKH PHWKRG
&RQJUHVVFKRVHWRHQVXUHWKHLQWHJULW\RIHOHFWLRQV,QWKH
SODLQWLIIV¶YLHZWKDWWKH7(96PDNHYRWLQJPRUHFRQYHQLHQW
DQGDFFHVVLEOHDQGFRQWDLQWKHLURZQVDIHJXDUGVDJDLQVWIUDXG
KDVQRUHOHYDQFHWRWKHSUHHPSWLRQDQDO\VLV,QVWHDGEHFDXVH
³&RQJUHVV VHWWOHG XSRQ GHFODULQJ D VLQJOH XQLIRUP GD\ IRU
YRWLQJDVDPHWKRGIRUSUHYHQWLQJHOHFWLRQIUDXG´WKH7(96
PXVWDGKHUHWRWKHFRQJUHVVLRQDOO\FKRVHQPHWKRG
:HUHMHFWWKHSODLQWLIIV¶DUJXPHQWIRUWZRUHDVRQV)LUVW
WKHOHJLVODWLYHKLVWRU\VXJJHVWVWKDW&RQJUHVVHVWDEOLVKHGD
XQLIRUP IHGHUDO HOHFWLRQ GD\ WR IXOILOO PXOWLSOH REMHFWLYHV
6SHFLILFDOO\&RQJUHVVVRXJKWWRSUHYHQWHDUO\HOHFWLRQVLQRQH
6WDWHIURPLQIOXHQFLQJWKRVHLQ6WDWHVYRWLQJODWHUWRUHPRYH
WKHEXUGHQRIYRWLQJLQPXOWLSOHHOHFWLRQVLQDVLQJOH\HDUDQG
WR PLQLPL]H WKH RSSRUWXQLW\ IRU YRWHUV WR FDVW EDOORWV LQ
HOHFWLRQVKHOGLQPRUHWKDQRQH6WDWH/RYH)GDW
%XVEHH ) 6XSS DW $W PRVW &RQJUHVV KDV
GHPRQVWUDWHGFRQFHUQIRUIUDXGRQO\LQWKHQDUURZHVWVHQVH
WKDWRIYRWLQJLQIHGHUDOHOHFWLRQVKHOGLQPRUHWKDQRQH6WDWH
,QDQ\HYHQW&RQJUHVVGLGQRWHVWDEOLVKDIHGHUDOHOHFWLRQGD\
VROHO\IRUSXUSRVHVRIFRPEDWLQJIUDXGHYHQLQWKLVOLPLWHG
VHQVH $FFRUGLQJO\ WKH GD\ UHSUHVHQWV WKH PHDQV RI
DFFRPSOLVKLQJWKHFRPELQHGREMHFWLYHVXQGHUO\LQJHQDFWPHQW
RIWKHIHGHUDOVWDWXWHVDQGWKH(DUO\9RWLQJ6WDWXWHVGRQRW
VWDQGDVDQREVWDFOHWRVXEVWDQWLDODFKLHYHPHQWRIWKHVHJRDOV
6HFRQG XQGHU WKH SODLQWLIIV¶ DUJXPHQW WKDW &RQJUHVV
HVWDEOLVKHGDVLQJOHGD\IRUYRWLQJWRSUHYHQWHOHFWLRQIUDXG
IHGHUDO ODZ ZRXOG SUHHPSW DOO 6WDWH VWDWXWHV DLPHG DW
SURWHFWLQJDJDLQVWIUDXGLQIHGHUDOHOHFWLRQVEHFDXVHOLPLWLQJ
YRWLQJ WR WKDW GD\ LWVHOI ZRXOG VHW WKH RXWHU OLPLWV RI WKH
VDIHJXDUGVGHHPHGQHFHVVDU\WRDFKLHYLQJWKDWJRDO-XVWDV
WKHSODLQWLIIV¶SRVLWLRQDVNVWRRPXFKEHFDXVHLWFDQQRWLQD
SULQFLSOHG IDVKLRQ GLVWLQJXLVK DEVHQWHH YRWLQJ VR WRR WKH

-- 2 of 12 --

0LOOVDSVHWDOY7KRPSVRQHWDO 1R
YRWLQJVWDWXWHVDQGKDOIKHDUWHGO\PDLQWDLQWKDWDFRXUWFRXOG
H[FXVHVXFKDGHPLQLPLVYLRODWLRQRIWKHIHGHUDOHOHFWLRQGD\
VWDWXWHV³>7@KHYHQHUDEOHPD[LPGHPLQLPLVQRQFXUDWOH[
μWKH ODZ FDUHV QRW IRU WULIOHV¶ LV SDUW RI WKH HVWDEOLVKHG
EDFNJURXQGRIOHJDOSULQFLSOHVDJDLQVWZKLFKDOOHQDFWPHQWV
DUH DGRSWHG DQG ZKLFK DOO HQDFWPHQWV DEVHQW FRQWUDU\
LQGLFDWLRQ DUH GHHPHG WR DFFHSW´ :LVFRQVLQ 'HS¶W RI
5HYHQXH Y :LOOLDP :ULJOH\ -U &R 86
)LQGLQJVXFKDQH[FHSWLRQKHUHZRXOGFUHDWHDWOHDVW
WZRSUREOHPV)LUVWWKHSODLQWLIIVDVNXVWRDFFHSWWKDWWKH
OHJLVODWLYH KLVWRU\ RI WKH IHGHUDO VWDWXWHV HYLQFHV D FOHDU
FRQJUHVVLRQDOLQWHQWWRHVWDEOLVKDVLQJOHGD\IRUYRWLQJ\HW
VRPHKRZ FRXQWHQDQFHV GH PLQLPLV H[FHSWLRQV GHVSLWH
DPRQJRWKHUWKLQJVWKHFRQWUDU\H[DPSOHRIWKH$FW
7KHVDPHOHJLVODWLYHKLVWRU\RQZKLFKWKHSODLQWLIIVUHO\WR
PDNH WKHLU DUJXPHQW ZRXOG DSSHDU WR SURYLGH D ³FRQWUDU\
LQGLFDWLRQ´DQGUXOHRXWDQ\H[FHSWLRQV6HFRQGUHFRJQLWLRQ
RIDGHPLQLPLVH[FHSWLRQIRUDEVHQWHHYRWLQJLQYLWHVDUELWUDU\
OLQHGUDZLQJDVFRXUWVVWUXJJOHWRLGHQWLI\WKHSRLQWDWZKLFK
YRWLQJRFFXUVRQGD\VRWKHUWKDQIHGHUDOHOHFWLRQGD\WRVXFK
DQH[WHQWWKDWD6WDWH¶VDEVHQWHHYRWLQJVWDWXWHVFRQIOLFWZLWK
IHGHUDOODZ:HVLPSO\FDQQRWDFFHSWWKHJUDYHLPSOLFDWLRQV
RIWKHSODLQWLIIV¶DUJXPHQWV
()UXVWUDWLRQRI&RQJUHVVLRQDO3XUSRVHVDQG2EMHFWLYHV
³,GHQWLW\RIHQGVGRHVQRWHQGRXUDQDO\VLVRISUHHPSWLRQ´
&URVE\Y1DWLRQDO)RUHLJQ7UDGH&RXQFLO86
Q FLWLQJ :LVFRQVLQ 'HS¶W RI ,QGXV /DERU
+XPDQ5HODWLRQVY*RXOG,QF86
:KHQWKHODZRID6WDWHVKDUHVWKHVDPHJRDODVIHGHUDOODZ
IHGHUDOODZZLOOSUHHPSWWKH6WDWHODZLILW³LQWHUIHUHVZLWKWKH
PHWKRGVE\ZKLFKWKHIHGHUDOVWDWXWHZDVGHVLJQHGWRUHDFK
WKLVJRDO´,QWHUQDWLRQDO3DSHU&RY2XHOOHWWH86
6HHDOVR*HLHUY$PHULFDQ+RQGD0RWRU
&R86 $FRPPRQHQGZLOOQRW
QHXWUDOL]H FRQIOLFWLQJ PHDQV &URVE\ 86 DW
7KHUHIRUHWRVXUYLYHSUHHPSWLRQDQDO\VLV6WDWHODZPXVWQRW
³DFWXDOO\FRQIOLFW´ZLWKWKHPHDQV&RQJUHVVFKRVHWRHIIHFWLWV
SXUSRVH +LQHV 86 DW VWDWLQJ WKDW IHGHUDO ODZ
1R 0LOOVDSVHWDOY7KRPSVRQHWDO
E DQG GHQ\LQJ WKDW RI WKH SODLQWLIIV 6HH JHQHUDOO\
0LOOVDSVY7KRPSVRQ)6XSSG ('7HQQ
7KLVWLPHO\DSSHDOIROORZHGDQGUDLVHVWKHTXHVWLRQZKHWKHU
7HQQHVVHH¶VHDUO\YRWLQJV\VWHPFRQIOLFWVZLWKIHGHUDOVWDWXWHV
HVWDEOLVKLQJ WKH ILUVW 7XHVGD\ DIWHU WKH ILUVW 0RQGD\ LQ
1RYHPEHU DV IHGHUDO HOHFWLRQ GD\ :H ZLOO DIILUP WKH
MXGJPHQWRIWKHGLVWULFWFRXUW
,7HQQHVVHH¶V(DUO\9RWLQJ6WDWXWHV
7HQQHVVHH KROGV HOHFWLRQV IRU 0HPEHUV RI &RQJUHVV
8QLWHG 6WDWHV 6HQDWRUV (OHFWRUV IRU 3UHVLGHQW DQG 9LFH
3UHVLGHQWDQGYDULRXVVWDWHRIILFHUV³DWWKHUHJXODU1RYHPEHU
HOHFWLRQ´7(11 &2'( $11† 6XSS 6LQFH
WKH7HQQHVVHH&RQVWLWXWLRQKDVVSHFLILHGWKHGDWHIRU
WKLVHOHFWLRQDV³WKHILUVW7XHVGD\DIWHUWKHILUVW0RQGD\LQ
1RYHPEHU 6DLG HOHFWLRQV VKDOO WHUPLQDWH WKH VDPH GD\´
7(11 &2167DUW,,†6LQFH7HQQHVVHHODZKDVDOVR
DOORZHG WKRVH DEVHQW RQ HOHFWLRQ GD\ IURP WKH FRXQW\ LQ
ZKLFKWKH\DUHUHJLVWHUHGWRYRWHWRFDVWEDOORWVE\PDLOSULRU
WR HOHFWLRQ GD\ 7(11 &2'( $11 † 6HH DOVR
+LOOLDUGY3DUN6:G 7HQQ
,QWKH7HQQHVVHH*HQHUDO$VVHPEO\HQDFWHGDV\VWHP
IRU HDUO\ YRWLQJ WR HQDEOH UHJLVWHUHG YRWHUV WR FDVW EDOORWV
GXULQJDVSHFLILHGSHULRGSULRUWRWKHGD\VFKHGXOHGIRUWKH
UHJXODU 1RYHPEHU HOHFWLRQ 7HQQHVVHH¶V (DUO\ 9RWLQJ
6WDWXWHV ³(DUO\ 9RWLQJ 6WDWXWHV´ RU ³7(96´ FUHDWH D
SURFHGXUHIRUWKRVHZLVKLQJWRYRWHSULRUWRHOHFWLRQGD\
$YRWHUZKRGHVLUHVWRYRWHHDUO\VKDOOJRWRWKHFRXQW\
HOHFWLRQFRPPLVVLRQRIILFHZLWKLQWKHSRVWHGKRXUVQRW
PRUHWKDQWZHQW\ GD\VQRUOHVVWKDQILYH GD\V
EHIRUHWKHGD\RIWKHHOHFWLRQ$YRWHUGHVLULQJWRYRWHLQ
WKH HDUO\ YRWLQJ SHULRG VKDOO VLJQ DQ DSSOLFDWLRQ IRU D
EDOORW
7(11 &2'( $11 † D HPSKDVLVDGGHG :KHQ
DQ HDUO\ YRWHU FDVWV D EDOORW LQ DFFRUGDQFH ZLWK WKH (DUO\
9RWLQJ6WDWXWHVFRXQW\HOHFWLRQRIILFLDOVGRQRWLPPHGLDWHO\
FRXQWWKHYRWHUDWKHUWKH\KROGWKHEDOORWVRIHDUO\YRWHUV

-- 3 of 12 --

0LOOVDSVHWDOY7KRPSVRQHWDO 1R
XQWLOWKHFORVHRIDOOSROOLQJSODFHVRQWKHILUVW7XHVGD\DIWHU
WKHILUVW0RQGD\LQ1RYHPEHUWKHQUHFRUGWKHHDUO\YRWHV
DORQJZLWKDEVHQWHHYRWHV,G† H ,QFRQWUDVWWR
DEVHQWHHYRWLQJZKLFKUHTXLUHVDYRWHUWRLGHQWLI\RQHRID
IHZVSHFLILFDOO\HQXPHUDWHGUHDVRQVIRUYRWLQJDEVHQWHHLG
††WKH7(96DOORZDQ\UHJLVWHUHGYRWHUWRYRWH
HDUO\ LI KH RU VKH ZLVKHV ,G † D 7KH (DUO\
9RWLQJ6WDWXWHVFOHDUO\VHWIRUWKWKHUDWLRQDOHIRUWKLVV\VWHP
³7KHSXUSRVHRIWKLVSDUWLVWRHVWDEOLVKDQHDUO\YRWLQJSHULRG
ZKHQHOLJLEOHUHJLVWHUHGYRWHUVPD\YRWHEHIRUHDQHOHFWLRQDW
WKH FRXQW\ HOHFWLRQ FRPPLVVLRQ RIILFH RU DQRWKHU SROOLQJ
SODFH DSSURSULDWHO\ GHVLJQDWHG E\ WKH FRXQW\ HOHFWLRQ
FRPPLVVLRQ´,G† E HPSKDVLVDGGHG
(DUO\YRWLQJKDVSURYHGWREHDSRSXODUPHWKRGIRUFDVWLQJ
EDOORWV ,Q WKH SUHVLGHQWLDO HOHFWLRQ RI WKH
YRWHVFDVWLQ7HQQHVVHHSHUFHQWZHUHHDUO\
YRWHVDQDGGLWLRQDOYRWHUVUHSUHVHQWLQJSHUFHQW
RIWKHWRWDOYRWHVFDVWLQ7HQQHVVHHYRWHGDEVHQWHH,QWKH
SUHVLGHQWLDO HOHFWLRQ WKH QXPEHU RI HDUO\ YRWHV
LQFUHDVHGGUDPDWLFDOO\RIWKHYRWHVFDVW
SHUFHQW ZHUH FDVW HDUO\ ZLWK DQ DGGLWLRQDO
YRWHUVSHUFHQWFDVWLQJDEVHQWHHEDOORWV
,,6WDQGDUGRI5HYLHZDQG3UHHPSWLRQ6WDQGDUGV
:HUHYLHZDGLVWULFWFRXUW¶VJUDQWRIVXPPDU\MXGJPHQWGH
QRYRXVLQJWKHVDPHVWDQGDUGXQGHU5XOH F XVHGE\WKH
GLVWULFWFRXUW:LOOLDPVY0HKUD)G WK&LU
HQEDQF
8QGHU WKH 6XSUHPDF\ &ODXVH RI WKH 8QLWHG 6WDWHV
&RQVWLWXWLRQ³VWDWHODZVWKDWμLQWHUIHUHZLWKRUDUHFRQWUDU\
WR WKH ODZV RI FRQJUHVV PDGH LQ SXUVXDQFH RI WKH
FRQVWLWXWLRQ¶ DUH LQYDOLG´ :LVFRQVLQ 3XE ,QWHUYHQRU Y
0RUWLHU 86 TXRWLQJ *LEERQV Y
2JGHQ86 :KHDW :KHWKHUIHGHUDO
ODZ SUHHPSWV VWDWH ODZ WXUQV SULQFLSDOO\ RQ FRQJUHVVLRQDO
LQWHQW 1RUWKZHVW &HQW 3LSHOLQH &RUS Y 6WDWH &RUS
&RPP¶QRI.DQ86 ,QDQDO\]LQJ
SUHHPSWLRQ³ZHVWDUWZLWKWKHDVVXPSWLRQWKDWWKHKLVWRULF
1R 0LOOVDSVHWDOY7KRPSVRQHWDO
$OWHUQDWLYHO\ WKH 6HQDWH FRXOG KDYH YLHZHG DQ DPHQGPHQW WR DOORZ
YRWLQJ RYHU PRUH WKDQ RQH GD\ DV XQQHFHVVDU\ VLQFH QRW IRUHFORVHG E\ WKH
VWDWXWRU\ ODQJXDJH DW LVVXH
86 DW ZH DFNQRZOHGJH WKDW WKH UHPDUNV RI
5HSUHVHQWDWLYH%XWOHUDQG6HQDWRU7UXPEXOOOHQGVXSSRUWWR
WKHSODLQWLIIV¶LQWHUSUHWDWLRQRIWKHVWDWXWH$GGLWLRQDOO\WKH
6HQDWH¶V UHMHFWLRQ RI DQ DPHQGPHQW WR DOORZ YRWLQJ RQ
PXOWLSOH GD\V LQ FRQJUHVVLRQDO HOHFWLRQV VXJJHVWV WKDW WKH
/HJLVODWLYH%UDQFKLQWHQGHGWKHIHGHUDOHOHFWLRQGD\VWDWXWHV
WR HVWDEOLVK D VLQJOH GD\ IRU YRWLQJ &I ,16 Y &DUGR]D
)RQVHFD86 ³)HZSULQFLSOHVRI
VWDWXWRU\ FRQVWUXFWLRQ DUH PRUH FRPSHOOLQJ WKDQ WKH
SURSRVLWLRQWKDW&RQJUHVVGRHVQRWLQWHQGVXEVLOHQWLRWRHQDFW
VWDWXWRU\ ODQJXDJH WKDW LW KDV HDUOLHU GLVFDUGHG LQ IDYRU RI
RWKHU ODQJXDJH´ 3DUWLFXODUO\ WURXEOLQJ LV WKH $FW
ZKLFKPRVWOLNHO\LPSOLHVDFRQJUHVVLRQDOXQGHUVWDQGLQJRI
YRWLQJLQIHGHUDOHOHFWLRQVDVOLPLWHGWRDVLQJOHGD\:LWKRXW
TXHVWLRQWKH6XSUHPH&RXUWNQRZVRIWKLVOHJLVODWLYHKLVWRU\
6HHHJ)RVWHU86DW UHO\LQJRQWKHUHPDUNVRI
5HSUHVHQWDWLYH %XWOHU WR LQWHUSUHW WKH IHGHUDO HOHFWLRQV
VWDWXWHV 1RQHWKHOHVVWKH&RXUWKDGQRWURXEOHGHILQLQJDQ
³HOHFWLRQ´DV³WKHFRPELQHGDFWLRQVRIYRWHUVDQGRIILFLDOV
PHDQWWRPDNHDILQDOVHOHFWLRQRIDQRIILFHKROGHU´,GDW
:KDWHYHURQHPDNHVRIWKHOHJLVODWLYHKLVWRU\SUHVHQWHGE\
WKH SODLQWLIIV ZH DUH ERXQG E\ )RVWHU¶V GHILQLWLRQ RI
³HOHFWLRQ´ LQ WKHVH VWDWXWHV 8QGHU WKDW GHILQLWLRQ ZH
FRQFOXGH WKDW XQGHU WKH 7(96 WKH ³FRPELQHG DFWLRQV RI
YRWHUV DQG RIILFLDOV PHDQW WR PDNH D ILQDO VHOHFWLRQ RI DQ
RIILFHKROGHU´RFFXURQO\RQIHGHUDOHOHFWLRQGD\DVUHTXLUHG
E\IHGHUDOODZ
/LNHRWKHUFRXUWVWKDWKDYHFRQVLGHUHGWKHTXHVWLRQZHVHH
QRSULQFLSOHGGLVWLQFWLRQEHWZHHQWKH(DUO\9RWLQJ6WDWXWHVDW
LVVXHLQWKLVFDVHDQGWKHPHFKDQLFVRIDEVHQWHHYRWLQJ,Q
SUDFWLFDOHIIHFWWKHQ WKHSODLQWLIIV¶DUJXPHQWZRXOGDSSO\
ZLWKHTXDOIRUFHWRDEVHQWHHYRWLQJDQGUHVXOWLQDGHFODUDWLRQ
WKDWIHGHUDOODZSUHHPSWVDZLGHO\DFFHSWHGDQGORQJVWDQGLQJ
HOHFWRUDOSUDFWLFH5HFRJQL]LQJWKLVGLIILFXOW\WKHSODLQWLIIV
SURWHVWWKDWWKH\KDYHQRWFKDOOHQJHG7HQQHVVHH¶VDEVHQWHH

-- 4 of 12 --

0LOOVDSVHWDOY7KRPSVRQHWDO 1R
'([SUHVVLR8QLXV(VW([FOXVLR$OWHULXV
7DNLQJDVRPHZKDWGLIIHUHQWWDFNLQPDNLQJWKHLUFRQIOLFW
SUHHPSWLRQ DUJXPHQW WKH SODLQWLIIV LQYRNH WKH WUDGLWLRQDO
FDQRQRIVWDWXWRU\LQWHUSUHWDWLRQH[SUHVVLRXQLXVHVWH[FOXVLR
DOWHULXV ³WKH H[SUHVVLRQ RI RQH WKLQJ LV WKH H[FOXVLRQ RI
RWKHUV´ DQGFODLPWKDWE\GHVLJQDWLQJWKHILUVW7XHVGD\DIWHU
WKHILUVW0RQGD\LQ1RYHPEHUDV³WKHGD\IRUWKHHOHFWLRQ´
&RQJUHVV HVWDEOLVKHGWKHH[FOXVLYHGD\IRUKROGLQJIHGHUDO
HOHFWLRQVDQGSUHFOXGHGYRWLQJRQDQ\RWKHUGD\8QGHUWKH
H[SUHVVLRXQLXVSULQFLSOH³>Z@KHQDVWDWXWHOLPLWVDWKLQJWR
EHGRQHLQDSDUWLFXODUPRGHLWLQFOXGHVWKHQHJDWLYHRIDQ\
RWKHU PRGH´ 1DWLRQDO 55 3DVVHQJHU &RUS Y 1DWLRQDO
$VV¶QRI553DVVHQJHUV86 TXRWLQJ
%RWDQ\ :RUVWHG 0LOOV Y 8QLWHG 6WDWHV 86
7KHUHIRUH WKH SODLQWLIIV PDLQWDLQ ³>E@HFDXVH
&RQJUHVVSURYLGHGIRURQHGD\IRUYRWLQJPXOWLSOHGD\YRWLQJ
LV QRW SHUPLWWHG XQGHU WKH SODLQ PHDQLQJ RI WKH )HGHUDO
(OHFWLRQ 'D\ 6WDWXWHV´ 7R EROVWHU WKLV FRQFOXVLRQ WKH
SODLQWLIIVUHO\RQWKHOHJLVODWLYHKLVWRU\RIWKHIHGHUDOVWDWXWHV
SDUWLFXODUO\WKH$FWJUDQWLQJ7H[DVSHUPLVVLRQWRFKRRVH
SUHVLGHQWLDOHOHFWRUVWKDW\HDURQPRUHWKDQDVLQJOHGD\
%\ GHILQLQJ DQ ³HOHFWLRQ´ DV ³WKH FRPELQHG DFWLRQV RI
YRWHUV DQG RIILFLDOV PHDQW WR PDNH D ILQDO VHOHFWLRQ RI DQ
RIILFHKROGHU´)RVWHU86DWWKH6XSUHPH&RXUWKDV
IRUHFORVHG WKLV DUJXPHQW 6R ORQJ DV QR FRPELQHG DFWLRQ
RFFXUVRQDQ\GD\RWKHUWKDQIHGHUDOHOHFWLRQGD\RUVRORQJ
DVDQ\VXFKFRPELQHGDFWLRQLVQRWLQWHQGHGWRPDNHDILQDO
VHOHFWLRQRIDIHGHUDORIILFHKROGHUD6WDWHKDVFRPSOLHGZLWK
WKHIHGHUDOHOHFWLRQVVWDWXWHV3XWDQRWKHUZD\WKHSODLQWLIIV¶
DUJXPHQWDVVXPHVWKHDQVZHUWRWKHTXHVWLRQSUHVHQWHGE\
WKLVFDVHQDPHO\WKHVWDWXWRU\PHDQLQJRIDQ³HOHFWLRQ´XQGHU
IHGHUDOODZ$Q³HOHFWLRQ´XQGHUWKHIHGHUDOVWDWXWHVUHTXLUHV
PRUHWKDQMXVWYRWLQJDQGWKH(DUO\9RWLQJ6WDWXWHVGRQRW
FUHDWHDUHJLPH RIFRPELQHGDFWLRQPHDQWWRPDNHDILQDO
VHOHFWLRQRQDQ\GD\RWKHUWKDQIHGHUDOHOHFWLRQGD\
,Q OLJKW RI WKH LPSRUWDQFH RI FRQJUHVVLRQDO LQWHQW WR
SUHHPSWLRQ DQDO\VLV 1RUWKZHVW &HQW 3LSHOLQH &RUS
1R 0LOOVDSVHWDOY7KRPSVRQHWDO
SROLFHSRZHUVRIWKH6WDWHVZHUHQRWWREHVXSHUVHGHGE\WKH
)HGHUDO$FWXQOHVVWKDWZDVWKHFOHDUDQGPDQLIHVWSXUSRVHRI
&RQJUHVV´5LFHY6DQWD)H(OHYDWRU&RUS86

7KLVFRXUWZLOOJLYHSUHHPSWLYHHIIHFWWRIHGHUDOODZXQGHU
WKUHHFLUFXPVWDQFHV/DUNLQY6WDWHRI0LFKLJDQ'HS¶WRI
6RF6HUYV)G WK&LU )LUVWDIHGHUDO
VWDWXWHPD\H[SUHVVO\SUHHPSWVWDWHODZ*XVWDIVRQY&LW\RI
/DNH$QJHOXV)G WK&LU FLWLQJ
3DFLILF*DV (OHF&RY6WDWH(QHUJ\5HV&RQVHUYDWLRQ
'HY&RPP¶Q86 6HFRQGIHGHUDO
ODZPD\LPSOLHGO\SUHHPSWVWDWHODZ,G FLWLQJ6LONZRRGY
.HUU0F*HH &RUS 86 ,PSOLHG
SUHHPSWLRQRFFXUV
LIDVFKHPHRIIHGHUDOUHJXODWLRQLV³VRSHUYDVLYHDVWR
PDNHUHDVRQDEOHWKHLQIHUHQFHWKDW&RQJUHVVOHIWQRURRP
IRUWKH6WDWHVWRVXSSOHPHQWLW´LI³WKH$FWRI&RQJUHVV
WRXFKHV D ILHOG LQ ZKLFK WKH IHGHUDO LQWHUHVW LV VR
GRPLQDQW WKDW WKH IHGHUDO V\VWHP ZLOO EH DVVXPHG WR
SUHFOXGHHQIRUFHPHQWRIVWDWHODZVRQWKHVDPHVXEMHFW´
RU LI WKH JRDOV ³VRXJKW WR EH REWDLQHG´ DQG WKH
³REOLJDWLRQVLPSRVHG´UHYHDODSXUSRVHWRSUHFOXGHVWDWH
DXWKRULW\
0RUWLHU 86 DW TXRWLQJ 5LFH 86 DW
DOWHUDWLRQVRPLWWHG 7KLUGIHGHUDOODZSUHHPSWVVWDWHODZ
ZKHQWKHWZRDFWXDOO\FRQIOLFW*XVWDIVRQ)GDW
6WDWHDQGIHGHUDOODZDFWXDOO\FRQIOLFWZKHQ³FRPSOLDQFHZLWK
ERWKIHGHUDODQGVWDWHUHJXODWLRQVLVDSK\VLFDOLPSRVVLELOLW\´
)ORULGD/LPH $YRFDGR*URZHUV,QFY3DXO86
RUZKHQDVWDWHODZ³VWDQGVDVDQREVWDFOHWR
WKHDFFRPSOLVKPHQWDQGH[HFXWLRQRIWKHIXOOSXUSRVHVDQG
REMHFWLYHVRI&RQJUHVV´+LQHVY'DYLGRZLW]86

-- 5 of 12 --

0LOOVDSVHWDOY7KRPSVRQHWDO 1R
,,,7KH(OHFWLRQV&ODXVHRIWKH8QLWHG6WDWHV
&RQVWLWXWLRQ
7KH (OHFWLRQV &ODXVH RI WKH 8QLWHG 6WDWHV &RQVWLWXWLRQ
VWDWHV
7KH7LPHV3ODFHVDQG0DQQHURIKROGLQJ(OHFWLRQVIRU
6HQDWRUVDQG5HSUHVHQWDWLYHVVKDOOEHSUHVFULEHGLQHDFK
6WDWHE\WKH/HJLVODWXUHWKHUHRIEXWWKH&RQJUHVVPD\DW
DQ\WLPHE\/DZPDNHRUDOWHUVXFK5HJXODWLRQVH[FHSW
DVWRWKH3ODFHVRIFKXVLQJ6HQDWRUV
86 &2167DUW,†FO/LNHZLVHWKHFRXQWHUSDUWWRWKH
(OHFWLRQV&ODXVHIRUWKH([HFXWLYH%UDQFKSURYLGHV³7KH
&RQJUHVVPD\GHWHUPLQHWKH7LPHRIFKXVLQJWKH(OHFWRUV
DQGWKH'D\RQZKLFKWKH\VKDOOJLYHWKHLU9RWHVZKLFK'D\
VKDOOEHWKHVDPHWKURXJKRXWWKH8QLWHG6WDWHV´,GDUW,,
†FO
2QQXPHURXVRFFDVLRQVWKH6XSUHPH&RXUWKDVH[SRXQGHG
WKHPHDQLQJRIWKHVHFODXVHV8QGHUWKH(OHFWLRQV&ODXVH
³WKHVWDWHVDUHJLYHQ>@DQGLQIDFWH[HUFLVHZLGHGLVFUHWLRQLQ
WKHIRUPXODWLRQRIDV\VWHPIRUWKHFKRLFHE\WKHSHRSOHRI
UHSUHVHQWDWLYHVLQ&RQJUHVV´8QLWHG6WDWHVY&ODVVLF
86 7KHSRZHURIWKH6WDWHVWRSUHVFULEH
WKH ³WLPHV SODFHV DQG PDQQHU´ IRU HOHFWLQJ IHGHUDO
UHSUHVHQWDWLYHVHQFRPSDVVHVQHDUO\HYHU\SURFHGXUDOIDFHWRI
DIHGHUDOHOHFWLRQ
,W FDQQRW EH GRXEWHG WKDW WKHVH FRPSUHKHQVLYH ZRUGV
HPEUDFH DXWKRULW\ WR SURYLGH D FRPSOHWH FRGH IRU
FRQJUHVVLRQDOHOHFWLRQVQRWRQO\DVWRWLPHVDQGSODFHV
EXW LQ UHODWLRQ WR QRWLFHV UHJLVWUDWLRQ VXSHUYLVLRQ RI
YRWLQJ SURWHFWLRQ RI YRWHUV SUHYHQWLRQ RI IUDXG DQG
FRUUXSWSUDFWLFHVFRXQWLQJRIYRWHVGXWLHVRILQVSHFWRUV
DQGFDQYDVVHUVDQGPDNLQJDQGSXEOLFDWLRQRIHOHFWLRQ
UHWXUQVLQVKRUWWRHQDFWWKHQXPHURXVUHTXLUHPHQWVDV
WRSURFHGXUHDQGVDIHJXDUGVZKLFKH[SHULHQFHVKRZVDUH
QHFHVVDU\ LQ RUGHU WR HQIRUFH WKH IXQGDPHQWDO ULJKW
LQYROYHG$OOWKLVLVFRPSULVHGLQWKHVXEMHFWRI
³WLPHVSODFHVDQGPDQQHURIKROGLQJHOHFWLRQV>@´
1R 0LOOVDSVHWDOY7KRPSVRQHWDO
DGPLQLVWUDWLYH DFWLRQV QHFHVVDU\ XQGHU 7HQQHVVHH ODZ WR
ILQDOL]HWKHYRWHUV¶SUHIHUHQFHIRUDFDQGLGDWHWKHSODLQWLIIV¶
IRFXV RQ WKH VLQJOH DFW RI UHFHLYLQJ D EDOORW IURP D YRWHU
SUHVHQWVDQXQQDWXUDODQG VWLOWHGFRQFHSWLRQRIWKHDFWLRQV
WDNHQE\RIILFLDOVXQGHU7HQQHVVHH¶VHOHFWLRQODZVDQGORVHV
VLJKW RI WKH IDFW WKDW DQ RIILFLDO¶V PHUH UHFHLSW RI D EDOORW
ZLWKRXWPRUHLVQRWDQDFWPHDQWWRPDNHDILQDOVHOHFWLRQ
,QIDFW)RVWHU¶VQDUURZKROGLQJVXJJHVWVWKDWVRORQJDVD
6WDWHGRHVQRWFRQFOXGHDQHOHFWLRQSULRUWRIHGHUDOHOHFWLRQ
GD\WKH6WDWH¶VODZZLOOQRW³DFWXDOO\FRQIOLFW´ZLWKIHGHUDO
ODZ)RVWHU86DW Q7RVXSSRUWWKHLUSRVLWLRQ
WKHSODLQWLIIVILQHO\SDUVH)RVWHU¶VODQJXDJHDQGFKDUDFWHUL]H
WKH 6XSUHPH &RXUW DV GUDZLQJ D GLVWLQFWLRQ EHWZHHQ WKH
DFWLRQV WKDW PXVW WDNH SODFH RQ IHGHUDO HOHFWLRQ GD\ WR
FRQVWLWXWHDQ³HOHFWLRQ´DQGWKH³ILQDODFWRIVHOHFWLRQ´RIDQ
RIILFHKROGHUZKLFKFDQRFFXUDIWHUIHGHUDOHOHFWLRQGD\LIRQH
RI WKH H[FHSWLRQV LQ 86& † DSSOLHV ,Q OLJKW RI WKH
&RXUW¶VH[SUHVVGLVDYRZDOLQ)RVWHUWKDWLWZDVHVWDEOLVKLQJ
DQ\SDUWLFXODUDFWLRQVD6WDWHPXVWSHUIRUPRQHOHFWLRQGD\WR
FRPSO\ZLWKWKHIHGHUDOVWDWXWHVWKLVUHDGLQJVLPSO\DVNVWRR
PXFK $OWKRXJK WKH SODLQWLIIV UDLVH WKH VSHFWHU RI 6WDWHV
VFKHGXOLQJYRWLQJWRRFFXUDWWLPHVHQWLUHO\UHPRYHGIURP
IHGHUDOHOHFWLRQGD\DQGVLPSO\FRXQWLQJEDOORWVRQWKHILUVW
7XHVGD\ DIWHU WKH ILUVW 0RQGD\ LQ 1RYHPEHU RVWHQVLEO\
FRPSO\LQJ ZLWK )RVWHU ZKLOH LQ IDFW PDQLSXODWLQJ IHGHUDO
HOHFWLRQV WKLV FDVH GRHV QRW SUHVHQW VXFK D VFHQDULR
7HQQHVVHH¶VVWDWXWHUHTXLUHVVXEVWDQWLDORIILFLDODFWLRQRQWKH
FRQJUHVVLRQDOO\ SUHVFULEHG GD\ DQG FRQVLGHUDEOH YRWLQJ
FRQWLQXHV WR WDNH SODFH RQ HOHFWLRQ GD\ LWVHOI )XUWKHU
7HQQHVVHH KDV GUDIWHG LWV HOHFWLRQ FRGH DURXQG IHGHUDO
HOHFWLRQ GD\ 6HH HJ 7(11 &2'( $11 †
FDOFXODWLQJ GHDGOLQHV IRU TXDOLI\LQJ IRU SODFHPHQW RI D
FDQGLGDWH¶VQDPHRQWKHEDOORWE\UHIHUHQFHWRIHGHUDOHOHFWLRQ
GD\ † D DOORZLQJHDUO\YRWHUVWRFDVWEDOORWV
³EHIRUHWKHGD\RIWKHHOHFWLRQ´

-- 6 of 12 --

0LOOVDSVHWDOY7KRPSVRQHWDO 1R
0RUHRYHU RIILFLDO DFWLRQ WR FRQILUP RU YHULI\ WKH UHVXOWV RI WKH
HOHFWLRQ H[WHQGV ZHOO EH\RQG IHGHUDO HOHFWLRQ GD\ FRXQW\ HOHFWLRQ
RIILFLDOV PXVW PHHW WR YHULI\ DQG FHUWLI\ WKH UHVXOWV DQQRXQFHG RQ HOHFWLRQ
GD\ LG †† WR SUHVHUYH SROOERRNV DQG EDOORWV LG ††
WR DQG WUDQVPLW FHUWLILHG UHVXOWV DQG YDULRXV DGGLWLRQDO
PDWHULDOV WR WKH VHFUHWDU\ RI VWDWH LG †† ZKR WKHQ ZLWK WKH
JRYHUQRU DQG DWWRUQH\ JHQHUDO IRUPDOO\ DQQRXQFHV WKH RIILFLDO UHVXOWV ,G
† :H XQGHUVWDQG WKHVH SURFHGXUHV WR SDUDOOHO WKRVH GHVFULEHG E\
WKH 6XSUHPH &RXUW ZKHQ LW UHFHQWO\ FDWDORJXHG WKH DGPLQLVWUDWLYH DFWLRQV
RFFXUULQJ LQ )ORULGD ³>D@IWHU WKH HOHFWLRQ KDV WDNHQ SODFH´ WR FRQFOXGH WKDW
6WDWH¶V HOHFWLRQ SURFHVV %XVK Y *RUH 86 6 &W
5HKQTXLVW &- FRQFXUULQJ
$$ VOLS RS DW 1R FRXUW KDV JLYHQ VHULRXV
FRQVLGHUDWLRQWRWKHLVVXHOHIWRSHQE\WKH6XSUHPH&RXUWLQ
)RVWHUUHJDUGLQJZKLFKDFWLRQVPXVWRFFXURQIHGHUDOHOHFWLRQ
GD\ LQ RUGHU IRU D 6WDWH¶V HOHFWLRQ VWDWXWH WR FRPSO\ ZLWK
IHGHUDOODZ
&$QDO\VLVRIWKH(DUO\9RWLQJ6WDWXWHVXQGHU)RVWHU
2QDSSHDOWKHSODLQWLIIVFRQWHQGWKDW³WKHFDVWLQJRIEDOORWV
E\WKHHOHFWRUDWHDWODUJH WKDWLVWKHHOHFWRUDWH¶VFROOHFWLYH
PDUNLQJ DQG GHSRVLWLQJ RI EDOORWV ZLWK HOHFWLRQ RIILFLDOV ´
VDWLVILHVWKH)RVWHUGHILQLWLRQ7KHSODLQWLIIVDVVHUWWKDWWKH
7(96 FRQIOLFW ZLWK IHGHUDO ODZ E\ DOORZLQJ YRWHUV WR
SDUWLFLSDWH LQ WKH ILQDO VHOHFWLRQ RI RIILFHKROGHUV SULRU WR
IHGHUDOHOHFWLRQGD\E\PDUNLQJDEDOORWDQGWHQGHULQJLWWRD
ORFDOHOHFWLRQRIILFLDO%HFDXVHWKLVDUJXPHQWRYHUORRNVWKH
6XSUHPH&RXUW¶VVLOHQFHLQ)RVWHUDVWRZKLFKDFWVD6WDWH
PXVWWDNHRQIHGHUDOHOHFWLRQGD\DQGQRWHDUOLHU)RVWHU
86DWZHGLVDJUHH$OWKRXJKWKHSODLQWLIIVPDLQWDLQWKDW
WKHUHFHLSWRIEDOORWVSULRUWRIHGHUDOHOHFWLRQGD\E\HOHFWLRQ
RIILFLDOVFRQVWLWXWHVVXIILFLHQWFRPELQHGDFWLRQRIYRWHUVDQG
RIILFLDOV WR YLRODWH IHGHUDO ODZ ³ILQDO VHOHFWLRQ´ RI DQ
RIILFHKROGHUUHTXLUHVPRUHWKDQPHUHUHFHLSWRIEDOORWVFDVWE\
YRWHUV)RUH[DPSOHRQHOHFWLRQGD\RIILFLDOVPXVWFORVHDQG
VHFXUHWKHSROOV7(11 &2'( $11††WR
WRFRXQWWKHEDOORWVLG††FRPSOHWH
DQGFHUWLI\RIILFLDOWDOO\VKHHWVLG†DQGSXEOLFO\
DQQRXQFH WKH UHVXOWV ,G † :LWK VR PDQ\
1R 0LOOVDSVHWDOY7KRPSVRQHWDO
6PLOH\ Y +ROP 86 2I FRXUVH
&RQJUHVVFDQRYHUULGHVWDWHHOHFWLRQUHJXODWLRQVSXUVXDQWWR
LWV SRZHU WR ³PDNH RU DOWHU VXFK UHJXODWLRQV´ &RRN Y
*UDOLNH866&W 7KLV
³PDNHRUDOWHU´SRZHUVZHHSVEURDGO\([3DUWH6LHEROG
86 ³&RQJUHVVE\LWVSRZHUWRPDNHRU
DOWHUWKHUHJXODWLRQVKDVDJHQHUDOVXSHUYLVRU\SRZHURYHUWKH
ZKROH VXEMHFW>@´ ³7KH SKUDVH μVXFK UHJXODWLRQV¶ SODLQO\
UHIHUVWRUHJXODWLRQVRIWKHVDPHJHQHUDOFKDUDFWHUWKDWWKH
OHJLVODWXUHRIWKH6WDWHLVDXWKRUL]HGWRSUHVFULEHZLWKUHVSHFW
WR FRQJUHVVLRQDO HOHFWLRQV ,Q H[HUFLVLQJ WKLV SRZHU WKH
&RQJUHVV PD\ VXSSOHPHQW WKHVH VWDWH UHJXODWLRQV RU PD\
VXEVWLWXWHLWVRZQ´6PLOH\86DW,QVKRUWWKH
(OHFWLRQV&ODXVHRIWKH&RQVWLWXWLRQ³LVDGHIDXOWSURYLVLRQ
LWLQYHVWVWKH6WDWHVZLWKUHVSRQVLELOLW\IRUWKHPHFKDQLFVRI
FRQJUHVVLRQDOHOHFWLRQVEXWRQO\VRIDUDV&RQJUHVVGHFOLQHV
WRSUHHPSWVWDWHOHJLVODWLYHFKRLFHV´)RVWHUY/RYH86
FLWDWLRQVRPLWWHG
%\ FUHDWLQJ D FRQJUHVVLRQDO FKHFN RQ WKH SRZHU RI WKH
6WDWHVWRUHJXODWHIHGHUDOHOHFWLRQVWKH)UDPHUVVRXJKWWRFXUE
WKHSRWHQWLDOIRUDEXVHVE\WKH6WDWHVDQGWRJLYHWKHQDVFHQW
QDWLRQDOJRYHUQPHQWWKHSRZHUWRSUHVHUYHLWVHOI867HUP
/LPLWV ,QF Y 7KRUQWRQ 86
FROOHFWLQJTXRWHVIURP-DPHV0DGLVRQ*RXYHUQHXU0RUULV
DQG $OH[DQGHU +DPLOWRQ H[SUHVVLQJ FRQFHUQ WKDW E\
UHJXODWLQJIHGHUDOHOHFWLRQVWKH6WDWHVFRXOGPDQLSXODWHWKHLU
RXWFRPH RU FULSSOH WKH IXQFWLRQLQJ RI WKH QDWLRQDO
JRYHUQPHQW 6HH DOVR LG DW 7KRPDV -
GLVVHQWLQJ SURYLGLQJ DGGLWLRQDO HYLGHQFH IURP RWKHU
FRQWHPSRUDQHRXV ZULWLQJV WKDW WKH ³PDNH RU DOWHU´ SRZHU
DIIRUGHG &RQJUHVV WKH PHDQV WR VXSSRUW WKH QDWLRQDO
JRYHUQPHQWDQGSUHYHQWGLVVROXWLRQRIWKH8QLRQ :LWKRXW
DFRQJUHVVLRQDORYHUULGHWKH)UDPHUVIHDUHGWKDWWKHH[LVWHQFH
RIWKHIHGHUDOJRYHUQPHQWZRXOGGHSHQGXSRQWKHZLOOLQJQHVV
RI WKH 6WDWHV WR KROG IHGHUDO HOHFWLRQV ,G 6HH DOVR 7+(
)('(5$/,67 12 $OH[DQGHU+DPLOWRQ $GGLWLRQDOO\IRU
WKH )UDPHUV IHGHUDO XQLIRUPLW\ DVVXUHG WKDW 6WDWHV GLG QRW
FRQVSLUH WR WLPH HOHFWLRQV VR DV WR GHSULYH &RQJUHVV RI D
TXRUXP'2&80(17$5< +,6725< 2) 7+( 5$7,),&$7,21

-- 7 of 12 --

0LOOVDSVHWDOY7KRPSVRQHWDO 1R
$GGLWLRQDOO\ WKH SODLQWLIIV FLWH +DPLOWRQ¶V GHVFULSWLRQ RI WKH SRZHU
FRQIHUUHG RQ &RQJUHVV E\ WKH (OHFWLRQV &ODXVH WR HVWDEOLVK ³XQLIRUPLW\
LQ WKH WLPH RI HOHFWLRQV IRU WKH )HGHUDO +RXVH RI 5HSUHVHQWDWLYHV´ DV D
³SRVLWLYH DGYDQWDJH WKDW PD\ EH IRXQG E\ H[SHULHQFH WR EH RI JUHDW
LPSRUWDQFH WR WKH SXEOLF ZHOIDUH>@´ 7+( )('(5$/,67 12 DW
$OH[DQGHU +DPLOWRQ &OLQWRQ 5RVVLWHU HG 7KH IXOO SDVVDJH LQ
ZKLFK WKLV TXRWH RFFXUV UHDGV
%XW WKHUH UHPDLQV WR EH PHQWLRQHG D SRVLWLYH DGYDQWDJH ZKLFK
ZLOO UHVXOW IURP WKLV GLVSRVLWLRQ DQG ZKLFK FRXOG QRW DV ZHOO
KDYH EHHQ REWDLQHG IURP DQ\ RWKHU , DOOXGH WR WKH FLUFXPVWDQFH
RI XQLIRUPLW\ LQ WKH WLPH RI HOHFWLRQV IRU WKH )HGHUDO +RXVH RI
5HSUHVHQWDWLYHV ,W LV PRUH WKDQ SRVVLEOH WKDW WKLV XQLIRUPLW\
PD\ EH IRXQG E\ H[SHULHQFH WR EH RI JUHDW LPSRUWDQFH WR WKH
SXEOLF ZHOIDUH ERWK DV VHFXULW\ DJDLQVW WKH SHUSHWXDWLRQ RI WKH
VDPH VSLULW LQ WKH ERG\ DQG DV D FXUH IRU WKH GLVHDVHV RI IDFWLRQ
,I HDFK 6WDWH PD\ FKRRVH LWV RZQ WLPH RI HOHFWLRQ LW LV SRVVLEOH
WKHUH PD\ EH DW OHDVW DV PDQ\ GLIIHUHQW SHULRGV DV WKHUH DUH
PRQWKV LQ WKH \HDU 7KH WLPHV RI HOHFWLRQ LQ WKH VHYHUDO 6WDWHV
DV WKH\ DUH QRZ HVWDEOLVKHG IRU ORFDO SXUSRVHV YDU\ EHWZHHQ
H[WUHPHV DV ZLGH DV 0DUFK DQG 1RYHPEHU 7KH FRQVHTXHQFH RI
WKLV GLYHUVLW\ ZRXOG EH WKDW WKHUH FRXOG QHYHU KDSSHQ D WRWDO
GLVVROXWLRQ RU UHQRYDWLRQ RI WKH ERG\ DW RQH WLPH ,I DQ LPSURSHU
VSLULW RI DQ\ NLQG VKRXOG KDSSHQ WR SUHYDLO LQ LW WKDW VSLULW ZRXOG
EH DSW WR LQIXVH LWVHOI LQWR WKH QHZ PHPEHUV DV WKH\ FRPH
IRUZDUG LQ VXFFHVVLRQ 7KH PDVV ZRXOG EH OLNHO\ WR UHPDLQ
2) 7+( &2167,787,21 -.DPLQVNL *6DODGLQRHGV
DUJXLQJWKDWLIWKH6WDWHVFKRVHWKHWLPHVIRUKROGLQJ
FRQJUHVVLRQDOHOHFWLRQV³WKHUHPLJKWKDYHEHHQDVPDQ\WLPHV
RIFKRRVLQJDVWKHUHDUH6WDWHV´DQG³VXFKLQWHUYDOVPLJKW
HODSVHEHWZHHQWKHILUVWDQGODVWHOHFWLRQDVWRSUHYHQWWKHUH
EHLQJ D VXIILFLHQW QXPEHU WR IRUP D +RXVH´ UHPDUNV RI
*HRUJH 1LFKRODV DW WKH 9LUJLQLD UDWLI\LQJ FRQYHQWLRQ
$FFRUGLQJO\ WKH (OHFWLRQV &ODXVH JLYHV &RQJUHVV ³WKH
FDSDFLW\ WR SUHVFULEH ERWK WKH GDWH DQG WKH PHFKDQLFV RI
FRQJUHVVLRQDO HOHFWLRQV´ 7KRUQWRQ 86 DW
7KRPDV-GLVVHQWLQJ 2WKHU)UDPHUVMXVWLILHGWKH&ODXVH
RQWKHJURXQGWKDWIHGHUDOHOHFWLRQVVKRXOGEH³KHOGRQWKH
VDPHGD\WKURXJKRXWWKH8QLWHG6WDWHVWRSUHYHQWFRUUXSWLRQ
RUXQGXHLQIOXHQFH´(//,27¶6 '(%$7(6 -(OOLRWHG
UHPDUNV RI 7KRPDV 0F.HDQ DW WKH 3HQQV\OYDQLD
UDWLI\LQJFRQYHQWLRQ
1R 0LOOVDSVHWDOY7KRPSVRQHWDO
GRHVQRWFRQIOLFWZLWKDQGLVWKHUHIRUHQRWSUHHPSWHGE\WKH
IHGHUDOODZVGHVLJQDWLQJIHGHUDOHOHFWLRQGD\´,G
/LNHWKHGLVWULFWFRXUWWKHRWKHUIHGHUDOFRXUWVWKDWKDYH
FRQVLGHUHG DUJXPHQWV VLPLODU WR WKRVH DGYDQFHG E\ WKH
SODLQWLIIV KDYH GHIHUUHG WR WKH DXWKRULW\ RI )RVWHU )RU
LQVWDQFHWKH)LIWK&LUFXLWKHOGWKDW³>E@HFDXVHWKHHOHFWLRQRI
IHGHUDO UHSUHVHQWDWLYHV LQ 7H[DV LV QRW GHFLGHG RU
μFRQVXPPDWHG¶EHIRUHIHGHUDOHOHFWLRQGD\WKH7H[DVVFKHPH
LV QRW LQFRQVLVWHQW ZLWK WKH IHGHUDO HOHFWLRQ VWDWXWHV DV
LQWHUSUHWHGE\WKHFRXUWLQ)RVWHU´9RWLQJ,QWHJULW\3URMHFW
,QFY%RPHU)G WK&LU FHUWGHQLHG
86 )XUWKHUEDVHGRQWKHSODLQODQJXDJHRIWKH
IHGHUDOVWDWXWHVWKHFRXUWUHDVRQHGWKDWWKH6XSUHPH&RXUW
ZRXOGQRWDOWHU)RVWHU¶VGHILQLWLRQRI³HOHFWLRQ´WRUHTXLUH
6WDWHVWREHJLQWKHLUIHGHUDOHOHFWLRQVRQIHGHUDOHOHFWLRQGD\
,G$FFRUGLQJO\³VRPHDFWVDVVRFLDWHGZLWKWKHHOHFWLRQPD\
EHFRQGXFWHGEHIRUHWKHIHGHUDOHOHFWLRQGD\ZLWKRXWYLRODWLQJ
WKHIHGHUDOHOHFWLRQVWDWXWHV´,G2QHGLVWULFWFRXUWKDVKHOG
$FDQGLGDWHLVQRW³VHOHFWHGIRURIILFH´DWWKHWLPHDYRWHU
GHSRVLWVDFRPSOHWHGEDOORWLQWKHEDOORWER[UHJDUGOHVV
RIZKHWKHUWKHEDOORWLVGHSRVLWHGDWDSROOLQJSODFHRQ
HOHFWLRQ GD\ LQ WKH PDLOER[ RU DW DQ RIILFLDO VLWH IRU
EDOORWGHSRVLWRQRUEHIRUHWKHGHVLJQDWHGGD\3URYLGLQJ
YDULRXVRSWLRQVIRUWKHWLPHDQGSODFHRIGHSRVLWLQJ D
FRPSOHWHG EDOORW GRHV QRW FKDQJH ³WKH GD\ IRU WKH
HOHFWLRQ´
.HLVOLQJ&LY1R$$VOLSRSDW
%RWK WKH )LIWK &LUFXLW DQG WKH 1LQWK &LUFXLW UHIXVHG WR
DFFHSW DUJXPHQWV WKDW WKH\ WRRN WR UHTXLUH VWULNLQJ GRZQ
DEVHQWHHYRWLQJVWDWXWHVE\LPSOLFDWLRQ%RPHU)GDW
.HLVOLQJBBB)GDWBBB:/DW
$GGLWLRQDOO\DOOFRXUWVWKDWKDYHFRQVLGHUHGWKHLVVXHKDYH
YLHZHGVWDWXWHVWKDWIDFLOLWDWHWKHH[HUFLVHRIWKHIXQGDPHQWDO
ULJKW RI YRWLQJ DV FRPSDWLEOH ZLWK WKH IHGHUDO VWDWXWHV
.HLVOLQJBBB)GDWBBB:/DW %RPHU
)GDW9RWLQJ,QWHJULW\3URMHFW,QFY%RPHU)
6XSSG 6'7H[ .HLVOLQJ&LY1R

-- 8 of 12 --

0LOOVDSVHWDOY7KRPSVRQHWDO 1R
%7KH'LVWULFW&RXUW¶V2SLQLRQ
,QDQDO\]LQJZKHWKHUWKH7(96FRQIOLFWZLWKWKHIHGHUDO
VWDWXWHVHVWDEOLVKLQJWKHILUVW7XHVGD\DIWHUWKHILUVW0RQGD\
LQ1RYHPEHUDVIHGHUDOHOHFWLRQGD\WKHGLVWULFWFRXUWIRFXVHG
RQWKHVWDWXWRU\PHDQLQJRIWKHZRUG³HOHFWLRQ´0LOOVDSV
) 6XSS G DW 'UDZLQJ RQ )RVWHU DV ZHOO DV WKH
GHFLVLRQV RI WKH RWKHU IHGHUDO FRXUWV WKDW KDYH FRQVLGHUHG
ZKHWKHUHDUO\YRWLQJVWDWXWHVFRQIOLFWZLWKIHGHUDOODZ9RWLQJ
,QWHJULW\3URMHFW,QFY%RPHU)6XSSG 6'
7H[ DII¶G)G WK&LU FHUWGHQLHG
86 9RWLQJ,QWHJULW\3URMHFWY.HLVOLQJ&LY
1R$$ '2U0DU DII¶GBBB)GBBB
:/ WK&LU-XO\ WKHGLVWULFWFRXUW
IDYRUHGDEURDGFRQVWUXFWLRQRIWKHGHILQLWLRQDQGFRQFOXGHG
WKDWDQ³HOHFWLRQLVWKHHQWLUHSURFHVVE\ZKLFKERWKYRWHUV
DQGRIILFLDOVPDNHDILQDOVHOHFWLRQRIDQRIILFHKROGHU´DQG
HQFRPSDVVHVPRUHWKDQPHUHO\FDVWLQJEDOORWV0LOOVDSV
)6XSSGDW
%HFDXVH WKH (DUO\ 9RWLQJ 6WDWXWHV KDYH QR HIIHFW LQ
GHFLGLQJWKHZLQQHURIDQHOHFWLRQXQWLOWKHSROOVFORVH RQ
IHGHUDOHOHFWLRQGD\WKHFRXUWUHDVRQHGWKDWWKH7(96KDYH
QR LQIOXHQFH RQ HOHFWLRQV LQ RWKHU VWDWHV DQG VR GR QRW
IUXVWUDWHWKHFRQJUHVVLRQDOSXUSRVHLQHVWDEOLVKLQJDXQLIRUP
IHGHUDO HOHFWLRQ GD\ ,G DW 0RUHRYHU WKH 7(96
IDFLOLWDWH UDWKHU WKDQ IUXVWUDWH YRWLQJ WKHUHE\ DGYDQFLQJ
DQRWKHU RI &RQJUHVV¶V JRDOV LQ HQDFWLQJ WKH VWDWXWH ,G
)LQDOO\WKHORQJKLVWRU\RIDEVHQWHHYRWLQJWKURXJKRXWWKH
FRXQWU\ SHUVXDGHG WKH GLVWULFW FRXUW WKDW WKH (DUO\ 9RWLQJ
6WDWXWHV GR QRW FRQIOLFW ZLWK IHGHUDO ODZ ³&RQJUHVV KDV
VXUHO\EHHQDZDUHRIDEVHQWHHYRWLQJDQGKDVWDNHQQRDFWLRQ
WRFXUELW7KLVPDNHVLWFOHDUWKDW&RQJUHVVQHYHULQWHQGHG
WKDW WKH VWDWHV FDQQRW KROG DQ HOHFWLRQ IRU IHGHUDO RIILFLDOV
XQOHVV DOO EDOORWV DUH FDVW RQ WKH 7XHVGD\ DIWHU WKH ILUVW
0RQGD\LQ1RYHPEHU´,GDW,QFRQFOXVLRQWKHFRXUW
VXPPDUL]HG WKDW WKH (DUO\ 9RWLQJ 6WDWXWHV ³SUHVHQW>@ QR
REVWDFOHWRDFFRPSOLVKLQJWKHJRDOVRIWKHIHGHUDOHOHFWLRQGD\
VWDWXWHV 7HQQHVVHH¶V HIIRUW WR LQFUHDVH YRWHU SDUWLFLSDWLRQ
1R 0LOOVDSVHWDOY7KRPSVRQHWDO
QHDUO\ WKH VDPH DVVLPLODWLQJ FRQVWDQWO\ WR LWVHOI LWV JUDGXDO
DFFUHWLRQV 7KHUH LV D FRQWDJLRQ LQ H[DPSOH ZKLFK IHZ PHQ
KDYH VXIILFLHQW IRUFH RI PLQG WR UHVLVW , DP LQFOLQHG WR WKLQN
WKDW WUHEOH WKH GXUDWLRQ LQ RIILFH ZLWK WKH FRQGLWLRQ RI D WRWDO
GLVVROXWLRQ RI WKH ERG\ DW WKH VDPH WLPH PLJKW EH OHVV
IRUPLGDEOH WR OLEHUW\ WKDQ RQH WKLUG RI WKDW GXUDWLRQ VXEMHFW WR
JUDGXDO DQG VXFFHVVLYH DOWHUDWLRQV
,G DW ,Q FRQWH[W WKHUHIRUH WKH SDVVDJH FLWHG E\ 3ODLQWLIIV HYLQFHV
D JUHDWHU FRQFHUQ IRU HVWDEOLVKLQJ D XQLIRUP GDWH IRU WKH H[SLUDWLRQ RI
IHGHUDO WHUPV LQ RIILFH WKDQ WKH SDUWLFXODU GD\ RI WKH ZHHN DQG PRQWK RQ
ZKLFK WKH 6WDWHV KROG IHGHUDO HOHFWLRQV
,9)HGHUDO(OHFWLRQV6WDWXWHV
,Q&RQJUHVVHVWDEOLVKHGDQDWLRQDOXQLIRUPHOHFWLRQ
GD\IRUFKRRVLQJPHPEHUVRIWKH+RXVHRI5HSUHVHQWDWLYHVE\
HQDFWLQJ86&†ZKLFKSURYLGHV
7KH7XHVGD\QH[WDIWHUWKHVW0RQGD\LQ1RYHPEHULQ
HYHU\HYHQQXPEHUHG\HDULVHVWDEOLVKHGDVWKHGD\IRU
WKHHOHFWLRQLQHDFKRIWKH6WDWHVDQG7HUULWRULHVRIWKH
8QLWHG6WDWHVRI5HSUHVHQWDWLYHVDQG'HOHJDWHVWRWKH
&RQJUHVV FRPPHQFLQJ RQ WKH G GD\ RI -DQXDU\ QH[W
WKHUHDIWHU
8SRQUDWLILFDWLRQRIWKH6HYHQWHHQWK$PHQGPHQW&RQJUHVV
DGRSWHG D VLPLODU SURYLVLRQ UHVSHFWLQJ WKH HOHFWLRQ RI
6HQDWRUV
$WWKHUHJXODUHOHFWLRQKHOGLQDQ\6WDWHQH[WSUHFHGLQJ
WKH H[SLUDWLRQ RI WKH WHUP IRU ZKLFK DQ\ 6HQDWRU ZDV
HOHFWHG WR UHSUHVHQW VXFK 6WDWH LQ &RQJUHVV DW ZKLFK
HOHFWLRQD5HSUHVHQWDWLYHWR&RQJUHVVLVUHJXODUO\E\ODZ
WR EH FKRVHQ D 8QLWHG 6WDWHV 6HQDWRU IURP VDLG 6WDWH
VKDOO EH HOHFWHG E\ WKH SHRSOH WKHUHRI IRU WKH WHUP
FRPPHQFLQJRQWKHGGD\RI-DQXDU\QH[WWKHUHDIWHU
86&†/LNHZLVH&RQJUHVVKDVVHWWKHVDPHGDWHIRUWKH
VHOHFWLRQRISUHVLGHQWLDOHOHFWRUV³7KHHOHFWRUVRI3UHVLGHQW
DQG9LFH3UHVLGHQWVKDOOEHDSSRLQWHGLQHDFK6WDWHRQWKH

-- 9 of 12 --

0LOOVDSVHWDOY7KRPSVRQHWDO 1R
86& † FUHDWHV WZR H[FHSWLRQV WR WKLV UXOH 6WDWHV UHTXLULQJ
D PDMRULW\ YRWH IRU HOHFWLRQ RI D 5HSUHVHQWDWLYH PD\ KROG D UXQRII
EHWZHHQ IHGHUDO HOHFWLRQ GD\ DQG WKH LQDXJXUDWLRQ RI WKH QHZ &RQJUHVV
DQG D FRQJUHVVLRQDO HOHFWLRQ PD\ RFFXU RQ DQRWKHU GD\ LI D YDFDQF\
RFFXUV LQ WKH RIILFH /RYH Y )RVWHU )G WK &LU
DII¶G 86 6HH DOVR 3XEOLF &LWL]HQ Y 0LOOHU ) 6XSS
1' *D DII¶G )G WK &LU %XVEHH Y
6PLWK ) 6XSS ''& DII¶G 86

7XHVGD\QH[WDIWHUWKHILUVW0RQGD\LQ1RYHPEHULQHYHU\
IRXUWK\HDUVXFFHHGLQJHYHU\HOHFWLRQRID3UHVLGHQWDQG9LFH
3UHVLGHQW´86&†,QFRPELQDWLRQWKHVHSURYLVLRQV
³PDQGDWH>@ KROGLQJ DOO HOHFWLRQV IRU &RQJUHVV DQG WKH
3UHVLGHQF\RQDVLQJOHGD\WKURXJKRXWWKH8QLRQ´)RVWHU
86DW
$OWKRXJKWKHVHVWDWXWHVFOHDUO\HVWDEOLVKDXQLIRUP³)HGHUDO
(OHFWLRQ 'D\´ WKURXJKRXW WKH QDWLRQ WKH RPLVVLRQ RI D
GHILQLWLRQRIWKHWHUP³HOHFWLRQ´KDVOHGWKH6XSUHPH&RXUWWR
FRPPHQWRQWKHRSDFLW\RIWKHVWDWXWRU\ODQJXDJHDWLVVXHLQ
WKLV FDVH SDUWLFXODUO\ UHJDUGLQJ WKH SUHFLVH DFWV WKDW WKH
VWDWXWHVUHTXLUHD6WDWHWRSHUIRUPRQWKDWGD\)RVWHU
86DW$FFRUGLQJO\ZHWXUQWRWKHVWDWXWHV¶OHJLVODWLYH
KLVWRU\RQZKLFKWKHSODLQWLIIVJUHDWO\UHO\IRUJXLGDQFH6HH
6FKUR\HU Y )UDQNHO )G WK &LU
³:KHQWKHODQJXDJHRIDSURYLVLRQLVDPELJXRXVZHORRNWR
WKHOHJLVODWLYHKLVWRU\RIWKHVWDWXWHLQTXHVWLRQWRDVFHUWDLQLWV
FRQILQHV´ FLWLQJ %OXP Y 6WHQVRQ 86

%\HVWDEOLVKLQJDXQLIRUPGDWHIRUKROGLQJIHGHUDOHOHFWLRQV
&RQJUHVVVRXJKW³WRUHPHG\PRUHWKDQRQHHYLODULVLQJIURP
WKHHOHFWLRQ RI PHPEHUVRIFRQJUHVVRFFXUULQJDWGLIIHUHQW
WLPHVLQWKHGLIIHUHQWVWDWHV´([3DUWH<DUEURXJK86
6SHFLILFDOO\ D UHYLHZ RI WKH OHJLVODWLYH
KLVWRU\RIWKHVHSURYLVLRQVGHPRQVWUDWHVWKDW&RQJUHVVZDQWHG
WR SUHYHQW 6WDWHV WKDW YRWHG HDUO\ IURP XQGXO\ LQIOXHQFLQJ
WKRVH YRWLQJ ODWHU WR FRPEDW IUDXG E\ PLQLPL]LQJ WKH
RSSRUWXQLW\ IRU YRWHUV WR FDVW EDOORWV LQ PRUH WKDQ RQH
HOHFWLRQ DQG WR UHPRYH WKH EXUGHQ RI YRWLQJ LQ PXOWLSOH
1R 0LOOVDSVHWDOY7KRPSVRQHWDO
)HZ RWKHU FDVHV KDYH DWWHPSWHG D GHILQLWLRQ RI WKH FRQVWLWXWLRQDO RU
VWDWXWRU\ PHDQLQJ RI WKH WHUP ³HOHFWLRQ´ ,Q 1HZEHUU\ Y 8QLWHG 6WDWHV
86 WKH &RXUW UHFRJQL]HG WKDW HQDFWPHQW RI WKH
6HYHQWHHQWK $PHQGPHQW GLG QRW DOWHU WKH RULJLQDO FRQVWLWXWLRQDO
XQGHUVWDQGLQJ RI DQ ³HOHFWLRQ´ DV WKH ³ILQDO FKRLFH RI DQ RIILFHU E\ WKH
GXO\ TXDOLILHG HOHFWRUV´ $GGLWLRQDOO\ WKH &RXUW KDV UHFRJQL]HG WKDW
SULPDU\ HOHFWLRQV IDOO ZLWKLQ WKH VFRSH RI FRQJUHVVLRQDO SRZHU WR UHJXODWH
WKH ³WLPHV SODFHV DQG PDQQHU´ RI KROGLQJ IHGHUDO HOHFWLRQV DV D VWHS LQ
WKH SURFHVV RI PDNLQJ D ILQDO VHOHFWLRQ RI D IHGHUDO RIILFHKROGHU 6HH HJ
&ODVVLF 86 DW )RVWHU KRZHYHU UHSUHVHQWV WKH PRVW VHULRXV
HIIRUW WR GDWH WR LQIXVH PHDQLQJ LQWR WKH WHUP ³HOHFWLRQ´ DQG OHDYHV XV
ZLWK ³WKH FRPELQHG DFWLRQV RI YRWHUV DQG RIILFLDOV PHDQW WR PDNH D ILQDO
VHOHFWLRQ RI DQ RIILFHKROGHU´ DV D GHILQLWLRQ )RVWHU 86 DW
:KHQWKHIHGHUDOVWDWXWHVVSHDN RI³WKHHOHFWLRQ´RID
6HQDWRU RU 5HSUHVHQWDWLYH WKH\ SODLQO\ UHIHU WR WKH
FRPELQHGDFWLRQVRIYRWHUVDQGRIILFLDOVPHDQWWRPDNH
DILQDOVHOHFWLRQRIDQRIILFHKROGHU6HH1:HEVWHU
$Q$PHULFDQ'LFWLRQDU\RIWKH(QJOLVK/DQJXDJH
&*RRGULFK 13RUWHUHGV GHILQLQJ³HOHFWLRQ´
DV³WKHDFWRIFKRRVLQJDSHUVRQWRILOODQRIILFH´ %\
HVWDEOLVKLQJDSDUWLFXODUGD\DV³WKHGD\´RQZKLFKWKHVH
DFWLRQVPXVWWDNHSODFHWKHVWDWXWHVVLPSO\UHJXODWHWKH
WLPHRIWKHHOHFWLRQDPDWWHURQZKLFKWKH&RQVWLWXWLRQ
H[SOLFLWO\JLYHV&RQJUHVVWKHILQDOVD\
,GDW HPSKDVLVDGGHG 7KH&RXUWGHFOLQHGWRLGHQWLI\
WKHVHFRPELQHGDFWVRIYRWHUVDQGRIILFLDOVRUWRVSHFLI\ZKLFK
RIWKHPPXVWRFFXURQIHGHUDOHOHFWLRQGD\IRUDVWDWXWHWR
SDVVPXVWHU,GDW ³>2@XUGHFLVLRQGRHVQRWWXUQRQDQ\
QLFHW\LQLVRODWLQJSUHFLVHO\ZKDWDFWVD6WDWHPXVWFDXVHWREH
GRQHRQIHGHUDOHOHFWLRQGD\ DQGQRWEHIRUHLW LQRUGHUWR
VDWLVI\WKHVWDWXWH´ $FFRUGLQJO\WKH&RXUWFUDIWHGDQDUURZ
KROGLQJ ³D FRQWHVWHG VHOHFWLRQ RI FDQGLGDWHV IRU D
FRQJUHVVLRQDO RIILFH WKDW LV FRQFOXGHG DV D PDWWHU RI ODZ
EHIRUHWKHIHGHUDOHOHFWLRQGD\ZLWKQRDFWLQODZRULQIDFWWR
WDNHSODFHRQWKHGDWHFKRVHQE\&RQJUHVVFOHDUO\YLRODWHV´
WKH IHGHUDO VWDWXWHV ,G 7R XQGHUVFRUH WKH JURXQG OHIW
XQFRYHUHGE\LWVKROGLQJWKH&RXUWIXUWKHUQRWHGWKDW³>Z@H
KROGWRGD\RQO\WKDWLIDQHOHFWLRQGRHVWDNHSODFHLWPD\QRW
EHFRQVXPPDWHGSULRUWRIHGHUDOHOHFWLRQGD\´,GDWQ

-- 10 of 12 --

0LOOVDSVHWDOY7KRPSVRQHWDO 1R
$)RVWHUY/RYHDQGWKH6WDWXWRU\0HDQLQJRIWKH7HUP
³(OHFWLRQ´
7KHSODLQWLIIVDVVHUWWKDWDQ³HOHFWLRQ´ZLWKLQWKHPHDQLQJ
RIWKHIHGHUDOHOHFWLRQVVWDWXWHVPHDQV³WKHSURFHVVRIYRWLQJ
E\WKHHOHFWRUDWHDWODUJHWRVHOHFWDQRIILFHKROGHU´8QGHU
WKLV YLHZ WKH 7(96 FRQIOLFW ZLWK IHGHUDO ODZ E\ DOORZLQJ
YRWLQJWRWDNHSODFHDWWLPHVRWKHUWKDQIHGHUDOHOHFWLRQGD\
,Q FRQWUDVW WR WKLV FRQFHSWLRQ RI YRWLQJ DV D SURFHVV WKH
GHIHQGDQWV SRVLW D IXQGDPHQWDO GLVWLQFWLRQ EHWZHHQ WKH
SK\VLFDODFWRIFDVWLQJDEDOORWDQGWKHHOHFWLRQRIDIHGHUDO
RIILFLDOZKLFKUHTXLUHVPLQLVWHULDODFWLRQVRIVWDWHDQGORFDO
HOHFWLRQ RIILFLDOV WR WUDQVIRUP WKH YRWHUV¶ SUHIHUHQFH IRU D
FDQGLGDWH LQWR D ILQDO DFW RI VHOHFWLRQ $FFRUGLQJO\ WKH
GHIHQGDQWVVXEPLWWKDWEHFDXVHWKH7(96IRUHVWDOOWDOO\LQJ
UHVXOWV XQWLO WKH ILUVW 7XHVGD\ DIWHU WKH ILUVW 0RQGD\ LQ
1RYHPEHUWKH\GRQRWFRQIOLFWZLWKWKHHVWDEOLVKPHQWRID
IHGHUDOHOHFWLRQGD\
:KLOH DFNQRZOHGJLQJ WKH GLIILFXOW\ RI GHILQLQJ ZLWK
SUHFLVLRQWKHWHUP³HOHFWLRQ´DVXVHGLQWKHIHGHUDOHOHFWLRQV
VWDWXWHVWKH6XSUHPH&RXUWUHFHQWO\SURYLGHGJXLGDQFHRQWKH
TXHVWLRQLQ)RVWHUY/RYH86 7KHUHWKH
FRXUW UHYLHZHG D FKDOOHQJH WR /RXLVLDQD¶V RSHQ SULPDU\
V\VWHPIRUFRQGXFWLQJFRQJUHVVLRQDOHOHFWLRQVLQZKLFKDOO
FDQGLGDWHVUHJDUGOHVVRISDUW\DSSHDUHGRQWKHVDPHEDOORWLQ
2FWREHU RI IHGHUDO HOHFWLRQ \HDUV $Q\ FDQGLGDWH ZKR
UHFHLYHGDPDMRULW\ZRQHOHFWLRQZLWKRXWIXUWKHUDFWLRQRQ
IHGHUDOHOHFWLRQGD\EXWLIQRFDQGLGDWHUHFHLYHGDPDMRULW\
WKHWRSWZRFDQGLGDWHVFRPSHWHGLQDUXQRIIHOHFWLRQKHOGRQ
WKH ILUVW 7XHVGD\ DIWHU WKH ILUVW 0RQGD\ LQ 1RYHPEHU
%HFDXVHWKH/RXLVLDQDVWDWXWHFRXQWHQDQFHGILQDOVHOHFWLRQRI
PHPEHUVRI&RQJUHVVZLWKQRDFWLRQDWDOORQIHGHUDOHOHFWLRQ
GD\DVLQIDFWKDSSHQHGLQRYHUHLJKW\SHUFHQWRIHOHFWLRQV
KHOGXQGHUWKLVRSHQSULPDU\V\VWHPWKH&RXUWUXOHGWKDWLW
FRQIOLFWHGZLWKIHGHUDOODZ,GDW
,QUHDFKLQJWKLVFRQFOXVLRQWKH&RXUWVXUYH\HGWKHIHGHUDO
HOHFWLRQVVWDWXWHVDQGWKHLUOHJLVODWLYHKLVWRU\DQGVXSSOLHGWKH
IROORZLQJGHILQLWLRQRIDQ³HOHFWLRQ´
1R 0LOOVDSVHWDOY7KRPSVRQHWDO
HOHFWLRQVLQDVLQJOH\HDU/RYH)GDW%XVEHHY
6PLWK)6XSS ''& DII¶G86
7KHVHREMHFWLYHVUHIOHFWWKHLPSRUWDQFHYRWLQJ
SOD\HG LQ WKH SROLWLFDO GHEDWHV RI WKH 5HFRQVWUXFWLRQ HUD
9RWLQJ,QWHJULW\3URMHFW,QFY.HLVOLQJBBB)GBBBBBB
:/DW WK&LU-XO\ SODFLQJ
FRQJUHVVLRQDOGHEDWHVRYHUHQDFWPHQWRI86&†DQG
DOORZLQJYRWLQJRYHUPXOWLSOHGD\VLQWKHLUKLVWRULFDOFRQWH[W
,QDGYDQFLQJWKHVHUDWLRQDOHVSURSRQHQWVH[SUHVVHGWKHLU
XQGHUVWDQGLQJRIZKDWHVWDEOLVKLQJDQDWLRQDOXQLIRUPIHGHUDO
HOHFWLRQGD\PHDQW5HSUHVHQWDWLYH%XWOHURI0DVVDFKXVHWWV
ZKRDXWKRUHGWKHODZDUWLFXODWHGKLVDLPLQVSRQVRULQJ
WKHOHJLVODWLRQ
7KHREMHFWRIWKLVDPHQGPHQWLVWRSURYLGHDXQLIRUP
WLPHRIHOHFWLQJ5HSUHVHQWDWLYHVLQ&RQJUHVV%XWRQ
DFFRXQW RI WKH IDFLOLW\ IRU FRORQL]DWLRQ DQG UHSHDWLQJ
DPRQJ WKH ODUJH FHQWUDO 6WDWHV 1HZ <RUN KROGLQJ LWV
HOHFWLRQ LQ 1RYHPEHU DQG 2KLR 3HQQV\OYDQLD DQG
,QGLDQDKROGLQJWKHLUHOHFWLRQVLQ2FWREHUWKHSULYLOHJH
LVDOORZHGWKHERUGHU6WDWHVLIDQ\PDQLVVRGLVSRVHGRI
WKURZLQJYRWHUVDFURVVIURPRQHLQWRWKHRWKHU,WKLQNLW
ZLOOEHIDLUIRUHYHU\ERG\WKDWRQWKHGD\ZKHQRQHYRWHV
DOOVKRXOGYRWHDQGWKDWWKHZKROHTXHVWLRQVKRXOGEH
GHFLGHGWKHQ
&21* */2%( G &RQJ G 6HVV HPSKDVLV
DGGHG 5HSUHVHQWDWLYH%XWOHUIXUWKHUHODERUDWHG
8QOHVV ZH GR IL[ VRPH WLPH DW ZKLFK DV D UXOH
5HSUHVHQWDWLYHVVKDOOEHHOHFWHGLWZLOOEHLQWKHSRZHU
RIHDFK6WDWHWRIL[XSRQDGLIIHUHQWGD\DQGZHPD\
KDYHDFDQYDVVJRLQJRQDOORYHUWKH8QLRQDWGLIIHUHQW
WLPHV,WJLYHVVRPHVWDWHVXQGXHDGYDQWDJH,WJLYHV
VRPHSDUWLHVXQGXHDGYDQWDJH
&21* */2%(G&RQJG6HVV
,QFRQJUHVVLRQDOGHEDWHRYHUHVWDEOLVKLQJDVLQJOHQDWLRQDO
HOHFWLRQGD\WKH6HQDWHGHIHDWHGDQDPHQGPHQWWKDWZRXOG

-- 11 of 12 --

0LOOVDSVHWDOY7KRPSVRQHWDO 1R
7KRXJK QRW FRGLILHG LQ WKH 8QLWHG 6WDWHV &RGH WKLV $FW UHPDLQV SDUW
RI WKH 6WDWXWHV DW /DUJH :KHQ WKH WZR FRQIOLFW WKH ODWWHU SUHYDLOV
8QLWHG 6WDWHV Y :HOGRQ 86 Q ³>7@KH &RGH FDQQRW
SUHYDLO RYHU WKH 6WDWXWHV DW /DUJH ZKHQ WKH WZR DUH LQFRQVLVWHQW´
TXRWLQJ 6WHSKDQ Y 8QLWHG 6WDWHV 86 :DUQHU Y
*ROWUD 86 FLWLQJ DQ HDUOLHU YHUVLRQ RI 86&
† D
KDYHSHUPLWWHGYRWLQJIRU5HSUHVHQWDWLYHVRYHUPXOWLSOHGD\V
LQ6WDWHVWKDWFRQGXFWHGHOHFWLRQVIRUWKHLURZQRIILFHUVRQ
PRUHWKDQRQHGD\&21* */2%(G&RQJG6HVV
$UJXLQJ DJDLQVW WKH DPHQGPHQW 6HQDWRU
7UXPEXOORI1HZ-HUVH\H[SODLQHG
, WKLQN WKH VDPH GD\ VKRXOG EH IL[HG WKURXJKRXW WKH
FRXQWU\IRUWKHHOHFWLRQRIPHPEHUVRI&RQJUHVV
>,@Q DV PXFK DV LQ VRPH RI WKH 6WDWHV WKH\ YRWH IRU
VHYHUDO GD\V DQG KDYH EXW RQH SODFH IRU YRWLQJ LQ D
FRXQW\LWZDVVXJJHVWHGWKDWZHRXJKWWRH[WHQGWKHWLPH
RI YRWLQJ IRU PHPEHUV RI &RQJUHVV DV ORQJ DV LW LV
H[WHQGHGIRUYRWLQJIRURWKHURIILFHUV,GRQRWNQRZ
QRZKRZHYHUWKDWWKHUHZLOOEHDQ\SDUWLFXODUQHFHVVLW\
IRUWKLVDPHQGPHQW7KHUHLVQRSURYLVLRQFRQILQLQJ
WKHHOHFWLRQRIPHPEHUVRI&RQJUHVVWRDVLQJOHGD\XQWLO
DQG WKHUH ZLOO EH WLPH HQRXJK IRU WKH VWDWHV WR
FRQIRUPWKHLUOHJLVODWLRQWRWKHODZZKLFKZLOOWDNHHIIHFW
LQ , DP QRW VXUH QRZ WKDW WKLV DPHQGPHQW LV
QHFHVVDU\DWDOO,UDWKHUWKLQNWKDWLWLVQRW
&21* */2%( G &RQJ G 6HVV HPSKDVLV
DGGHG
,Q&RQJUHVVDPHQGHG86&†WRDOORZ6WDWHVWR
FRQGXFWEDOORWLQJIRUSUHVLGHQWLDOHOHFWRUVRYHUPRUHWKDQRQH
GD\LQWKDW\HDU¶VSUHVLGHQWLDOHOHFWLRQ$FWRI0D\
FK6WDW&RQJUHVVHQDFWHGWKLVSURYLVLRQDVD
RQHWLPH H[FHSWLRQ WR WKH VWDWXWRU\ DQG FRQVWLWXWLRQDO
UHTXLUHPHQW IRU D XQLIRUP GD\ IRU VHOHFWLRQ RI HOHFWRUV WR
DGGUHVV WKH FLUFXPVWDQFHV RI 5HFRQVWUXFWLRQHUD 7H[DV
&21* */2%( G &RQJ G 6HVV
1R 0LOOVDSVHWDOY7KRPSVRQHWDO
5HSUHVHQWDWLYH*LGGLQJVRI7H[DVVXPPDUL]HGWKHVLWXDWLRQ
LQKLVKRPH6WDWH
0U6SHDNHUWKHSDVVDJHRIWKLVELOOVRIDUDVWKH6WDWHRI
7H[DVLVFRQFHUQHGLVDQDEVROXWHQHFHVVLW\%\WKHODZ
RIWKH6WDWHDVQRZLQIRUFHEXWRQHSODFHRIYRWLQJLV
DOORZHGLQHDFKFRXQW\7KHFRXQWLHVDUHODUJH6RPH
YRWHUV KDYH WR WUDYHO LQ VRPH RI WKH IURQWLHU FRXQWLHV
IURP WKLUW\ WR VHYHQW\ILYH PLOHV WR JHW WR WKH YRWLQJ
SODFH7KH/HJLVODWXUHRIRXU6WDWHFDQQRWFRQYHQHXQWLO
DIWHUWKHQH[WHOHFWLRQ7KHUHLVQROHJLVODWLYHERG\DW
SUHVHQWLQH[LVWHQFHWKHUH$QHOHFWLRQKHOGLQRQHGD\LQ
WKH6WDWHRI7H[DVXQGHUWKHSUHVHQW6WDWHODZZRXOGEH
VLPSO\DIDUFH,WLVDPDWWHURILPSRVVLELOLW\WRSROODW
RQHSODFHWKHHQWLUHYRWHRIDFRXQW\HYHQLIWKHSHRSOH
FRXOG EH JDWKHUHG DW WKH SODFH LQ RQH GD\ 7KH
SDVVDJHRIWKLVELOOLVDQDEVROXWHQHFHVVLW\LQRUGHUWR
VHFXUHDIXOODQGIDLUHOHFWLRQLQ7H[DV1ROHJLVODWLYH
FKDQJHFDQEHPDGHLQWKH6WDWHODZEHWZHHQQRZDQG
>IHGHUDOHOHFWLRQGD\@IURPWKHIDFWQR/HJLVODWXUHFDQ
FRQYHQH7KHWLPHDOORZHGWKH/HJLVODWXUHKDVH[SLUHG
7KHUH LV QR OHJLVODWLYH ERG\ LQ 7H[DV DQG QRQH FDQ
FRQYHQHXQWLO1RYHPEHUQH[WDQGE\WKH6WDWHODZWKDW
HOHFWLRQVKDOORFFXUDWWKHVDPHWLPHDVWKHHOHFWLRQIRU
SUHVLGHQWLDOHOHFWRUV
&21* */2%(G&RQJG6HVV
9&RQIOLFW3UHHPSWLRQ$QDO\VLV
$OWKRXJKWKHSODLQWLIIVFKDOOHQJHWKH(DUO\9RWLQJ6WDWXWHV
RQWKHEDVLVRIFRQIOLFWSUHHPSWLRQ7HQQHVVHHGHIHQGVWKH
7(96DJDLQVWSUHHPSWLRQRQDOOSRVVLEOHJURXQGV%HFDXVH
WKHSODLQWLIIVRQO\PDNHDFRQIOLFWSUHHPSWLRQFKDOOHQJHZH
OLPLWRXUGLVFXVVLRQWRWKHPHULWVRIWKHSODLQWLIIV¶FODLPRQ
WKLV JURXQG :KHWKHU WKH (DUO\ 9RWLQJ 6WDWXWHV ³DFWXDOO\
FRQIOLFW´ZLWKIHGHUDOODZWXUQVRQWKHDQVZHUWRWKHTXHVWLRQ
³:KDWLVDQHOHFWLRQ"´²SDUWLFXODUO\DVLWUHODWHVWRWKHXVHRI
WKHWHUPLQWKHIHGHUDOHOHFWLRQVVWDWXWHV

-- 12 of 12 --