01a0416p.06

7KH +RQRUDEOH *RUGRQ - 4XLVW 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU WKH
:HVWHUQ 'LVWULFW RI 0LFKLJDQ 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
7+20$6 8//02 -$&48(/,1(
8//02DQG-$621 8//02
E\DQGWKURXJKKLVSDUHQWV
DQGOHJDOJXDUGLDQV7KRPDV
DQG-DFTXHOLQH8OOPR
3ODLQWLIIV$SSHOODQWV
Y
*,/0285 $&$'(0<
'HIHQGDQW$SSHOOHH
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG
1R²3DWULFLD$*DXJKDQ'LVWULFW-XGJH
$UJXHG2FWREHU
'HFLGHGDQG)LOHG'HFHPEHU
%HIRUH%2**6DQG*,/0$1&LUFXLW-XGJHV48,67
'LVWULFW-XGJH

-- 1 of 8 --

8OOPRHWDOY*LOPRXU$FDGHP\ 1R
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 6WHSKHQ 2 :DONHU %HDFKZRRG 2KLR IRU
$SSHOODQWV*UHJRU\90HUVRO%$.(5 +267(7/(5
&OHYHODQG 2KLR IRU $SSHOOHH 21 %5,() 6WHSKHQ 2
:DONHU %HDFKZRRG 2KLR IRU $SSHOODQWV *UHJRU\ 9
0HUVRO 7KRPDV - 3LDWDN %$.(5 +267(7/(5
&OHYHODQG2KLRIRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
521$/' /(( *,/0$1 &LUFXLW -XGJH 7KRPDV DQG
-DFTXHOLQH8OOPREURXJKWVXLWLQVWDWHFRXUWDJDLQVW*LOPRXU
$FDGHP\DOOHJLQJEUHDFKRIFRQWUDFWIUDXGDQGDYLRODWLRQ
RIWKH,QGLYLGXDOVZLWK'LVDELOLWLHV(GXFDWLRQ$FW ,'($
86& †† 7KH\ EDVHG WKHLU FODLPV XSRQ
*LOPRXU¶VDOOHJHGIDLOXUHWRSURYLGHWKHLUVRQ-DVRQZLWKDQ
HGXFDWLRQ GHVLJQHG WR KHOS KLP RYHUFRPH KLV OHDUQLQJ
GLVDELOLW\$IWHUUHPRYLQJWKHFDVHWRIHGHUDOGLVWULFWFRXUW
*LOPRXUILOHGWZRVXFFHVVLYHPRWLRQVIRUVXPPDU\MXGJPHQW
EDVHG XSRQ GLIIHUHQW DVSHFWV RI WKH 8OOPRV¶ FODLPV 7KH
GLVWULFWFRXUWJUDQWHGERWKPRWLRQVUHVXOWLQJLQWKHGLVPLVVDO
RIWKH8OOPRV¶FRPSODLQW)RUWKHUHDVRQVVHWIRUWKEHORZZH
$)),50WKHMXGJPHQWRIWKHGLVWULFWFRXUW
,%$&.*5281'
$ )DFWXDOEDFNJURXQG
*LOPRXU LV D SULYDWH &DWKROLF HOHPHQWDU\ DQG VHFRQGDU\
VFKRRO ORFDWHG LQ *DWHV 0LOOV 2KLR -DVRQ DWWHQGHG ILUVW
JUDGHDW*LOPRXUGXULQJZKLFKWLPHKHZDVGLDJQRVHGZLWK
GHDIQHVV LQ KLV OHIW HDU +LV KHDULQJ LPSDLUPHQW PDGH LW
GLIILFXOWIRUKLPWRFRPPXQLFDWHZLWKKLVILUVWJUDGHWHDFKHU
&RQYLQFHGWKDWWKHVLWXDWLRQDW*LOPRXUZRXOGQRWLPSURYH
1R 8OOPRHWDOY*LOPRXU$FDGHP\
³DQLPXV´WRZDUGKLP6XFKDFRQFOXVRU\VWDWHPHQWGRHVQRW
HVWDEOLVKELDVIRUWKHSXUSRVHVRIDPRWLRQWRUHFXVH*HQHUDO
$YLDWLRQ ,QF )G DW ³&RQFOXVLRQV UXPRUV
EHOLHIV DQG RSLQLRQV DUH QRW VXIILFLHQW WR IRUP D EDVLV IRU
GLVTXDOLILFDWLRQ´ LQWHUQDO TXRWDWLRQ PDUNV RPLWWHG
)LQDOO\DQDIILGDYLWILOHGXQGHU†PXVWEH³DFFRPSDQLHG
E\DFHUWLILFDWHRIFRXQVHORIUHFRUGVWDWLQJWKDWLWLVPDGHLQ
JRRG IDLWK´ 86& † 1R VXFK FHUWLILFDWH
DFFRPSDQLHGWKHDIILGDYLWILOHGE\WKH8OOPRV%DVHGXSRQ
WKHVHIDFWRUVZHFRQFOXGHWKDWWKHFXPXODWLYHHIIHFWRIWKH
GLVWULFWFRXUW¶VGHQLDORIWKH8OOPRV¶PRWLRQWRUHFXVHDQGLWV
RWKHU SUHWULDO UXOLQJV GLG QRW GHSULYH WKH 8OOPRV RI GXH
SURFHVV
,,,&21&/86,21
)RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 WKH
MXGJPHQWRIWKHGLVWULFWFRXUW

-- 2 of 8 --

8OOPRHWDOY*LOPRXU$FDGHP\ 1R
MXGJPHQW´/RJDQY'D\WRQ+XGVRQ&RUS)G
WK&LU
7KH8OOPRVIDLOHGWRSURSHUO\VXSSRUWWKHLUPRWLRQWR
UHFXVHDQGRIIHUQRHYLGHQFHWKDWELDVLQIOXHQFHGDQ\
RIWKHGLVWULFWMXGJH¶VSUHWULDOUXOLQJV
$FFRUGLQJ WR WKH 8OOPRV WKH GLVWULFW MXGJH ZDV ELDVHG
DJDLQVWWKHLUFRXQVHO7KH\LQVLVWWKDWWKLVELDVLQIOXHQFHGWKH
GLVWULFWMXGJH¶VSUHWULDOUXOLQJV7KHVHUXOLQJVLQFOXGLQJWKH
GLVWULFW MXGJH¶V UHIXVDO WR UHFXVH KHUVHOI IURP WKLV FDVH
DOOHJHGO\GHQLHGWKH8OOPRVWKHGXHSURFHVVRIODZ
7KH8OOPRVKRZHYHUIDLOWRVKRZWKDWWKHGLVWULFWFRXUW
DEXVHGLWVGLVFUHWLRQLQGHQ\LQJWKHLUPRWLRQIRUUHFXVDO$
PRWLRQIRUUHFXVDOEDVHGXSRQSHUVRQDOELDVLVJRYHUQHGE\
86&†ZKLFKPDNHVUHFXVDOPDQGDWRU\ZKHUHDSDUW\
ILOHVD³VXIILFLHQW´DIILGDYLWGHVFULELQJWKHMXGJH¶V³SHUVRQDO
ELDVRUSUHMXGLFH´7KHDIILGDYLWRIIHUHGLQVXSSRUWRI WKH
8OOPRV¶PRWLRQIRUUHFXVDOZDVQRWVXIILFLHQWIRUWKHSXUSRVHV
RI†
7RZDUUDQWUHFXVDOXQGHU†DQDIILGDYLWPXVW³DOOHJH>@
IDFWVZKLFKDUHDVRQDEOHSHUVRQZRXOGEHOLHYHZRXOGLQGLFDWH
D MXGJH KDV D SHUVRQDO ELDV DJDLQVW WKH PRYLQJ SDUW\´
*HQHUDO$YLDWLRQ,QFY&HVVQD$LUFUDIW&R)G
WK &LU 7KH DOOHJHG IDFWV PRUHRYHU PXVW
UHODWH WR ³H[WUDMXGLFLDO FRQGXFW UDWKHU WKDQ MXGLFLDO
FRQGXFW´8QLWHG6WDWHVY6WRU\)G WK
&LU LQWHUQDOTXRWDWLRQPDUNVRPLWWHG ,QRWKHUZRUGV
WKHDIILGDYLWPXVWDOOHJHIDFWVVKRZLQJ³DSHUVRQDOELDVDV
GLVWLQJXLVKHGIURPDMXGLFLDORQHDULVLQJRXWRIWKHMXGJH¶V
EDFNJURXQGDQGDVVRFLDWLRQDQGQRWIURPWKHMXGJH¶VYLHZRI
WKHODZ´,GDW LQWHUQDOTXRWDWLRQPDUNVRPLWWHG
7KHDIILGDYLWRIIHUHGLQVXSSRUWRIWKH8OOPRV¶PRWLRQWR
UHFXVHKRZHYHUVHHNVWRHVWDEOLVKELDVEDVHGVROHO\XSRQWKH
GLVWULFWMXGJH¶VSUHWULDOUXOLQJV1RHYLGHQFHZDVSUHVHQWHGRI
DQ\ H[WUDMXGLFLDO ELDV )XUWKHUPRUH WKH RQO\ PHQWLRQ RI
SHUVRQDOELDVLQWKHDIILGDYLWLVWKHVWDWHPHQWE\WKH8OOPRV¶
FRXQVHO WKDW KH ³SHUFHLYHG´ WKDW WKH GLVWULFW MXGJH KDG DQ
1R 8OOPRHWDOY*LOPRXU$FDGHP\
WKH8OOPRVHQUROOHG-DVRQDW5DWQHU0RQWHVVRUL6FKRRODIWHU
KHFRPSOHWHGWKHILUVWJUDGH
-DVRQZDVVXEVHTXHQWO\GLDJQRVHGZLWKDOHDUQLQJGLVDELOLW\
LQYROYLQJ ZULWWHQ H[SUHVVLRQ %HFDXVH RI WKLV OHDUQLQJ
GLVDELOLW\ 5DWQHU SURYLGHG -DVRQ ZLWK DQ LQGLYLGXDOL]HG
OHDUQLQJ GLVDELOLW\ HGXFDWLRQ +H UHVSRQGHG ZHOO WR WKH
LQGLYLGXDOL]HG SURJUDP SURJUHVVLQJ IURP VHFRQG WKURXJK
VL[WKJUDGHDW5DWQHU-DVRQKRZHYHUGHVLUHGWRUHWXUQWR
*LOPRXU IRU WKH VHYHQWK JUDGH WHOOLQJ KLV SDUHQWV WKDW KH
³ZDQWHGWREHSDUWRIWKH*LOPRXUIDPLO\´
6HYHUDO PRQWKV EHIRUH -DVRQ¶V VHYHQWKJUDGH \HDU
-DFTXHOLQH8OOPRPHWZLWK5REHUW,VDEHOODWKH'LUHFWRURI
$GPLVVLRQVDW*LOPRXUWRGLVFXVV-DVRQ¶VSRVVLEOHUHWXUQ
6KHFODLPVWKDW,VDEHOODDVVXUHGKHU³WKDWLWGLGQ¶WPDNHDQ\
GLIIHUHQFHWKDW-DVRQKDGOHDUQLQJGLVDELOLWLHV´,VDEHOOD
DOVR DOOHJHGO\ WROG KHU WKDW *LOPRXU PDLQWDLQHG D ³YHU\
QXUWXULQJHQYLURQPHQW´DQGWKDWLW³ZRXOGZRUNZLWK-DVRQ´
-DVRQ VXEVHTXHQWO\ UHWXUQHG WR *LOPRXU IRU WKH VHYHQWK
JUDGHDQGFRQWLQXHGKLVVFKRROLQJWKHUHWKURXJKWKHWZHOIWK
JUDGH(DFK\HDUWKDW-DVRQDWWHQGHG*LOPRXUWKH8OOPRV
VLJQHGDQ(QUROOPHQW$JUHHPHQWWKDWREOLJDWHGVWXGHQWVDQG
WKHLU SDUHQWV WR DELGH E\ WKH UXOHV VHW IRUWK LQ *LOPRXU¶V
6WXGHQW DQG 3DUHQW +DQGERRN 7KH +DQGERRN FRQWDLQV
SROLFLHVUHJDUGLQJDFDGHPLFVGLVFLSOLQHDQGUHODWHGPDWWHUV
,WDOVRLQFOXGHVDVHFWLRQWLWOHG³3KLORVRSK\´ZKLFKVWDWHV
$VDSUHPLHULQGHSHQGHQW&DWKROLFSUHSDUDWRU\VFKRRO
SUHVFKRRO WKURXJK KLJK VFKRRO *LOPRXU $FDGHP\
PRGHOVLWVHOIRQWKHIDPLO\DQGWDNHVDVLWVPLVVLRQWKH
VHDUFKIRUH[FHOOHQFHLQHDFKSHUVRQ
*LOPRXUWHDFKHUVPLUURUWKH+RO\&URVVWUDGLWLRQDVWKH\
ZRUNIRUWKHIXOOGHYHORSPHQWRIWKHLUVWXGHQWVLQDQG
RXWRIWKHFODVVURRPUHVSHFWLQJSXSLOV¶GLIIHULQJDELOLWLHV
DQGVW\OHVRIOHDUQLQJ
$IWHUUHWXUQLQJWR*LOPRXU-DVRQVWUXJJOHGDFDGHPLFDOO\
+H URXWLQHO\ IDLOHG WR FRPSOHWH DVVLJQPHQWV DQG HDUQHG

-- 3 of 8 --

8OOPRHWDOY*LOPRXU$FDGHP\ 1R
EHORZDYHUDJH JUDGHV 7KH 8OOPRV DWWULEXWHG -DVRQ¶V
GLIILFXOWLHVWR*LOPRXU¶VIDLOXUHWRDGHTXDWHO\DFFRPPRGDWH
KLV OHDUQLQJ GLVDELOLW\ 7KH\ ZHUH SDUWLFXODUO\ GLVVDWLVILHG
ZLWK*LOPRXU¶VUHIXVDOWRDGRSWWKHUHFRPPHQGDWLRQVPDGH
E\-DVRQ¶VSV\FKRORJLVWZKRVXJJHVWHGDPRQJRWKHUWKLQJV
WKDW-DVRQEHDOORZHGWRWDNHWHVWVRUDOO\DQGEHJLYHQPRUH
WLPH WR FRPSOHWH KLV DVVLJQPHQWV %XW WKH 8OOPRV
QHYHUWKHOHVVKDG-DVRQUHWXUQWR*LOPRXUHDFK\HDU'HVSLWH
KLVFRQVLVWHQWO\SRRUDFDGHPLFSHUIRUPDQFH-DVRQJUDGXDWHG
IURP*LOPRXULQ
% 3URFHGXUDOEDFNJURXQG
7KH8OOPRVEURXJKWVXLWLQVWDWHFRXUWDJDLQVW*LOPRXULQ
6HSWHPEHURI6XLQJRQEHKDOIRIWKHPVHOYHVDQG-DVRQ
WKH\ VRXJKW GDPDJHV IRU EUHDFK RI FRQWUDFW IUDXG DQG D
YLRODWLRQ RI WKH ,'($ 7KH\ PDLQWDLQHG WKDW *LOPRXU
EUHDFKHGLWVSURPLVHWR³ZRUNIRUWKHGHYHORSPHQW´RILWV
VWXGHQWVDQGWRUHVSHFWVWXGHQWV¶³GLIIHULQJDELOLWLHVDQGVW\OHV
RIOHDUQLQJ´DVVHWIRUWKLQWKH+DQGERRN7KH8OOPRVDOVR
FRQWHQGHG WKDW WKLV SURPLVH ZDV IUDXGXOHQW )LQDOO\ WKH
8OOPRVDOOHJHGWKDW*LOPRXUYLRODWHGWKH,'($E\IDLOLQJWR
KHOS-DVRQRYHUFRPHKLVOHDUQLQJGLVDELOLW\
*LOPRXU UHPRYHG WKH 8OOPRV¶ VXLW WR WKH 8QLWHG 6WDWHV
'LVWULFW&RXUWIRUWKH1RUWKHUQ'LVWULFWRI2KLR$WLPHO\
PRWLRQIRUVXPPDU\MXGJPHQWZDVILOHGE\*LOPRXURQWKH
8OOPRV¶ EUHDFK RI FRQWUDFW DQG IUDXG FODLPV ZKLFK WKH
GLVWULFWFRXUWJUDQWHG$IWHUWKHGHDGOLQHIRUILOLQJGLVSRVLWLYH
PRWLRQV KDG SDVVHG WKH GLVWULFW FRXUW JUDQWHG OHDYH IRU
*LOPRXUWRDOVRPRYHIRUVXPPDU\MXGJPHQWRQWKH8OOPRV¶
UHPDLQLQJFODLPXQGHUWKH,'($
7KH 8OOPRV UHVSRQGHG WR *LOPRXU¶V VHFRQG PRWLRQ IRU
VXPPDU\MXGJPHQWE\ILOLQJDPRWLRQIRUWKHGLVWULFWMXGJHWR
UHFXVHKHUVHOI7KH\DOOHJHGWKDWWKHGLVWULFWMXGJH¶VGHFLVLRQ
WRJUDQW*LOPRXUOHDYHWRILOHLWVODWHPRWLRQIRUVXPPDU\
MXGJPHQW DV ZHOO DV WKH MXGJH¶V RWKHU SUHWULDO UXOLQJV
HYLGHQFHGKHUELDVDJDLQVWWKHLUFRXQVHO,QDGGLWLRQWRWKHLU
PRWLRQWRUHFXVHWKH8OOPRVILOHGDPRWLRQUHTXHVWLQJWKDW
WKHGLVWULFWFRXUWYDFDWHLWVHDUOLHURUGHUJUDQWLQJVXPPDU\
1R 8OOPRHWDOY*LOPRXU$FDGHP\
IRUVXPPDU\MXGJPHQWRQWKHLU,'($FODLP7KH\PDLQWDLQ
WKDW*LOPRXUSXUSRVHO\GHOD\HGILOLQJLWVPRWLRQIRUVXPPDU\
MXGJPHQWRQWKHLU,'($FODLPVRWKDWLWFRXOGILUVWREWDLQD
IHGHUDOMXGJPHQWRQWKHLUVWDWHODZFODLPV$FFRUGLQJWRWKH
8OOPRV 5XOH RI WKH )HGHUDO 5XOHV RI &LYLO 3URFHGXUH
SURKLELWV*LOPRXUIURP³PDQLSXODWLQJWKHMXGLFLDOSURFHVVWR
LPSRVHIHGHUDOVWDQGDUGVRIUHYLHZRQHQWLUHO\6WDWH&RXUW
FODLPV´
7KH8OOPRVKRZHYHURIIHUQRDXWKRULW\IRUWKHSURSRVLWLRQ
WKDW 5XOH REOLJDWHG *LOPRXU WR ILUVW VHHN VXPPDU\
MXGJPHQW RQ WKHLU ,'($ FODLP 0RUHRYHU DV WKH GLVWULFW
FRXUW UHFRJQL]HG ³WKHUH LV QR LQGLFDWLRQ WKDW *LOPRXU¶V
IDLOXUHWRLQLWLDOO\PRYHIRUVXPPDU\MXGJPHQW>RQWKH,'($
FODLP@ ZDV WKH UHVXOW RI IRXO SOD\´ 7KH VHTXHQFH RI
*LOPRXU¶VPRWLRQVIRUVXPPDU\MXGJPHQWWKHUHIRUHGRHVQRW
HQWLWOHWKH8OOPRVWRSXUVXHWKHLUEUHDFKRIFRQWUDFWDQGIUDXG
FODLPVLQVWDWHFRXUW6HH(QORZY7LVKRPLQJR&W\0LVV
)G WK&LU ³6XFKDGHWHUPLQDWLRQ>WR
DOORZ D VXFFHVVLYH PRWLRQ IRU VXPPDU\ MXGJPHQW@
SDUWLFXODUO\UHJDUGLQJTXHVWLRQVRIWKHWLPLQJDQGVHTXHQFHRI
PRWLRQVLQWKHGLVWULFWFRXUWEHVWOLHVDWWKHGLVWULFWFRXUW¶V
GLVFUHWLRQ´
$FFRUGLQJO\ZHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLGQRWHUU
LQGHQ\LQJWKH8OOPRV¶PRWLRQWRYDFDWHDQGUHPDQG
& 7KHFXPXODWLYHHIIHFWRIWKHGLVWULFWMXGJH¶VSUHWULDO
UXOLQJV DQG KHU UHIXVDO WR UHFXVH KHUVHOI IURP WKLV
FDVHGLGQRWGHSULYHWKH8OOPRVRIGXHSURFHVV
6WDQGDUGRIUHYLHZ
7KH8OOPRVEDVHWKHLUGXHSURFHVVFKDOOHQJHSULPDULO\XSRQ
WKH GLVWULFW MXGJH¶V GHQLDO RI WKHLU PRWLRQ WR UHFXVH 7KLV
FRXUW³UHYLHZVGHFLVLRQVGHQ\LQJPRWLRQVWRUHFXVHXQGHU
WKHDEXVHRIGLVFUHWLRQVWDQGDUG´8QLWHG6WDWHVY+DUWVHO
)G WK&LU $QDEXVHRIGLVFUHWLRQLV
IRXQG ZKHUH WKLV FRXUW LV OHIW ZLWK WKH ³GHILQLWH DQG ILUP
FRQYLFWLRQ WKDW WKH WULDO FRXUW FRPPLWWHG D FOHDU HUURU RI

-- 4 of 8 --

8OOPRHWDOY*LOPRXU$FDGHP\ 1R
7KH8OOPRVDOVREDVHGWKHLUPRWLRQWRYDFDWHDQGUHPDQGRQ
*LOPRXU¶VDOOHJHGYLRODWLRQRI5XOHRIWKH)HGHUDO5XOHV
RI&LYLO3URFHGXUH7KLVFRXUWDSSOLHV³DQDEXVHRIGLVFUHWLRQ
VWDQGDUGLQUHYLHZLQJDOODVSHFWVRIDGLVWULFWFRXUW¶V5XOH
GHWHUPLQDWLRQ´&RRWHU *HOOY+DUWPDU[&RUS86

*LOPRXUZDVIXOO\ZLWKLQLWVULJKWVWRUHPRYHWKLVFDVH
WRIHGHUDOFRXUWDQGWRVHHNVXPPDU\MXGJPHQWRQWKH
8OOPRV¶VWDWHODZFODLPVEHIRUHWKHLU,'($FODLP
7KH8OOPRVILUVWFRQWHQGWKDWWKHGLVWULFWFRXUWVKRXOGKDYH
JUDQWHGWKHLUPRWLRQWRYDFDWHDQGUHPDQGEHFDXVH*LOPRXU
LPSURSHUO\UHPRYHGWKLVFDVHWRIHGHUDOFRXUW7KH\SRLQWRXW
WKDWWKH,'($DXWKRUL]HVVXLWVLQERWKVWDWHDQGIHGHUDOFRXUW
%HFDXVHWKH\ILOHGVXLWLQVWDWHFRXUWWKH8OOPRVLQVLVWWKDW
WKHGLVWULFWFRXUWODFNHGMXULVGLFWLRQRYHUWKHLU,'($FODLP
7KLVDUJXPHQWLVZLWKRXWPHULW5HPRYDOLVSURSHUZKHUH
DFRPSODLQWUDLVHVDFODLPWKDWLVZLWKLQWKHMXULVGLFWLRQRIWKH
IHGHUDOFRXUWV86&† D 7KH,'($LVDIHGHUDO
VWDWXWH $Q\ FODLP DULVLQJ XQGHU WKH ,'($ LV WKHUHIRUH
VXEMHFW WR WKH MXULVGLFWLRQ RI WKH GLVWULFW FRXUW 86&
† ³7KHGLVWULFWFRXUWVVKDOOKDYHRULJLQDOMXULVGLFWLRQRI
DOO FLYLO DFWLRQV DULVLQJ XQGHU WKH &RQVWLWXWLRQ ODZV RU
WUHDWLHV RI WKH 8QLWHG 6WDWHV´ $OWKRXJK WKH ,'($ DOVR
SHUPLWVVXLWVWREHEURXJKWLQVWDWHFRXUW³WKHIDFWWKDWWKH
,'($SURYLGHVWKHSODLQWLIIZLWKWKHFKRLFHRIVWDWHRUIHGHUDO
FRXUWGRHVQRWSUHFOXGHWKHUHPRYDORIWKHUHVXOWLQJDFWLRQWR
IHGHUDOFRXUW´)D\HWWHYLOOH3HUU\/RFDO6FK'LVWY5HFNHUV
)6XSS 6'2KLR VHHDOVR'RUVH\Y
&LW\ RI 'HWURLW )G WK &LU ³7KH
ZHLJKW RI MXGLFLDO DXWKRULW\ VXSSRUWV WKH FRQFOXVLRQ WKDW D
&RQJUHVVLRQDO JUDQW RI FRQFXUUHQW MXULVGLFWLRQ LQ D VWDWXWH
GRHV QRW LPSO\ WKDW UHPRYDO LV SURKLELWHG´ LQWHUQDO
TXRWDWLRQPDUNVRPLWWHG
7KH8OOPRVQH[WDUJXHWKDWWKHGLVWULFWFRXUWVKRXOGKDYH
JUDQWHGWKHLUPRWLRQWRYDFDWHDQGUHPDQGEHFDXVH*LOPRXU
DOOHJHGO\HQJDJHGLQIRUXPVKRSSLQJE\ILOLQJLWVPRWLRQIRU
VXPPDU\MXGJPHQWRQWKHLUVWDWHODZFODLPVEHIRUHPRYLQJ
1R 8OOPRHWDOY*LOPRXU$FDGHP\
MXGJPHQWRQWKHLUEUHDFKRIFRQWUDFWDQGIUDXGFODLPVDQG
UHPDQGWKRVHFODLPVWRVWDWHFRXUW$IWHUGHQ\LQJWKH8OOPRV¶
PRWLRQV WKH GLVWULFW FRXUW JUDQWHG VXPPDU\ MXGJPHQW WR
*LOPRXURQWKH8OOPRV¶,'($FODLP
7KH8OOPRVWKHQILOHGWKLVWLPHO\DSSHDO7KH\FRQWHQG
WKDWWKHGLVWULFWFRXUWHUUHGLQJUDQWLQJVXPPDU\MXGJPHQWWR
*LOPRXURQWKHLUEUHDFKRIFRQWUDFWIUDXGDQG,'($FODLPV
)XUWKHUPRUHWKH\DUJXHWKDWWKHGLVWULFWFRXUWHUUHGLQGHQ\LQJ
WKHLUPRWLRQWRYDFDWHWKHJUDQWRIVXPPDU\MXGJPHQWRQWKHLU
VWDWHODZFODLPVDQGWRUHPDQGWKRVHFODLPVWRVWDWHFRXUW
)LQDOO\WKH8OOPRVFODLPWKDWWKHFXPXODWLYHHIIHFWRIWKH
GLVWULFWFRXUW¶VGHQLDORIWKHLUPRWLRQWRUHFXVHDQGLWVYDULRXV
RWKHUSUHWULDOUXOLQJVGHSULYHGWKHPRIWKHGXHSURFHVVRIODZ
,,$1$/<6,6
$ *LOPRXUZDVHQWLWOHGWRVXPPDU\MXGJPHQWRQWKH
8OOPRV¶EUHDFKRIFRQWUDFWIUDXGDQG,'($FODLPV
6WDQGDUGRIUHYLHZ
7KLV FRXUW UHYLHZV GH QRYR WKH GLVWULFW FRXUW¶V JUDQW RI
VXPPDU\MXGJPHQW+ROORZD\Y%UXVK)G
WK&LU 6XPPDU\MXGJPHQWLVSURSHUZKHUHWKHUHDUH
QRJHQXLQHLVVXHVRIPDWHULDOIDFWLQGLVSXWHDQGWKHPRYLQJ
SDUW\LVHQWLWOHGWRMXGJPHQWDVDPDWWHURIODZ)HG5&LY
3 F ,QGHFLGLQJDPRWLRQIRUVXPPDU\MXGJPHQWWKH
FRXUW PXVW YLHZ WKH HYLGHQFH DQG GUDZ DOO UHDVRQDEOH
LQIHUHQFHVLQIDYRURIWKHQRQPRYLQJSDUW\0DWVXVKLWD(OHF
,QGXV&RY=HQLWK5DGLR&RUS86
7KHFRXUWLVQRWWR³ZHLJKWKHHYLGHQFHDQGGHWHUPLQHWKH
WUXWKRIWKHPDWWHUEXWWRGHWHUPLQHZKHWKHUWKHUHLVDJHQXLQH
LVVXHIRUWULDO´$QGHUVRQY/LEHUW\/REE\,QF86
$JHQXLQHLVVXHIRUWULDOH[LVWVRQO\ZKHUH
WKHUH LV VXIILFLHQW ³HYLGHQFH RQ ZKLFK WKH MXU\ FRXOG
UHDVRQDEO\ILQGIRUWKHSODLQWLII´,GDW

-- 5 of 8 --

8OOPRHWDOY*LOPRXU$FDGHP\ 1R
7KH³3KLORVRSK\´VHFWLRQRI*LOPRXU¶V+DQGERRNLV
WRR JHQHUDO DQG DVSLUDWLRQDO WR FRQVWLWXWH DQ
HQIRUFHDEOHSURPLVH
,QVXLQJIRUEUHDFKRIFRQWUDFWWKH8OOPRVGLGQRWDOOHJH
WKDW*LOPRXUWRWDOO\IDLOHGWRSURYLGHHGXFDWLRQDOVHUYLFHVDV
SURPLVHGWRWKHPLQWKH(QUROOPHQW$JUHHPHQW7KH\LQVWHDG
VRXJKWWRHQIRUFHWKHODQJXDJHFRQWDLQHGLQWKH3KLORVRSK\
VHFWLRQRIWKH+DQGERRNZKLFKVWDWHVWKDW³*LOPRXUWHDFKHUV
PLUURU WKH +RO\ &URVV WUDGLWLRQ DV WKH\ ZRUN IRU WKH IXOO
GHYHORSPHQWRIWKHLUVWXGHQWVLQDQGRXWRIWKHFODVVURRP
UHVSHFWLQJSXSLOV¶GLIIHULQJDELOLWLHVDQGVW\OHVRIOHDUQLQJ´
7KH+DQGERRNIXUWKHUSURYLGHVWKDW*LOPRXU³PRGHOVLWVHOI
RQ WKH IDPLO\ DQG WDNHV DV LWV PLVVLRQ WKH VHDUFK IRU
H[FHOOHQFHLQHDFKSHUVRQ´
1RZKHUH LQ WKH 3KLORVRSK\ VHFWLRQ KRZHYHU LV WKHUH D
GHVFULSWLRQRIWKHIDFXOW\¶VWHDFKLQJPHWKRGVRUDQ\SURPLVH
DVWRWKHPDQQHULQZKLFKWKHIDFXOW\ZLOODFFRPPRGDWHD
VWXGHQW¶VOHDUQLQJGLVDELOLWLHV1RVWDQGDUGVDUHVHWIRUWKWR
GHWHUPLQH ZKHWKHU *LOPRXU KDV ZRUNHG IRU WKH IXOO
GHYHORSPHQWRILWVVWXGHQWVRUUHVSHFWHGLWVVWXGHQWV¶GLIIHULQJ
DELOLWLHV,QVWHDGWKHVHFWLRQVLPSO\DVVXUHVVWXGHQWVDQG
SDUHQWVWKDW*LOPRXU¶VPLVVLRQLVWRVHDUFKIRUH[FHOOHQFHLQ
HDFK SHUVRQ 7KH ODQJXDJH LQ WKH 3KLORVRSK\ VHFWLRQ
WKHUHIRUHVHWVIRUWKRQO\D JHQHUDOVWDWHPHQWRI*LOPRXU¶V
LGHDOV
,QGHILQLWHDQGDVSLUDWLRQDOODQJXDJHGRHVQRWFRQVWLWXWHDQ
HQIRUFHDEOH SURPLVH XQGHU 2KLR ODZ 7KH 2KLR 6XSUHPH
&RXUWKDVPDGHFOHDUWKDWYDJXHODQJXDJHZLOOQRWZDUUDQW
MXGLFLDOHQIRUFHPHQWVWDWLQJWKDW³>D@FRXUWFDQQRWHQIRUFHD
FRQWUDFWXQOHVVLWFDQGHWHUPLQHZKDWLWLV´5XOOLY)DQ&R
1(G 2KLR KROGLQJWKDWWKHWULDOFRXUW
HUUHG LQ HQIRUFLQJ DQ DPELJXRXV VHWWOHPHQW DJUHHPHQW
LQWHUQDOTXRWDWLRQPDUNVRPLWWHG ,QDGGLWLRQDEUHDFKRI
FRQWUDFW FODLP ZLOO QRW DULVH IURP WKH IDLOXUH WR IXOILOO D
VWDWHPHQWRIJRDOVRULGHDOV$OOHQY(WKLFRQ,QF)
6XSS 6'2KLR ,Q$OOHQWZRGLVFKDUJHG
HPSOR\HHVVXHGWKHLUIRUPHUHPSOR\HUIRUEUHDFKRIFRQWUDFW
1R 8OOPRHWDOY*LOPRXU$FDGHP\
)G WK &LU TXRWLQJ *DGVE\ Y
*UDVPLFN)G WK&LU
,QWKHSUHVHQWDFWLRQWKH8OOPRVVXHG*LOPRXUXQGHUWKH
,'($7KH\DUJXHWKDW*LOPRXUVHUYHGDVD/($EHFDXVHLW
UHFHLYHG ERWK IHGHUDO DQG VWDWH HGXFDWLRQ IXQGV %XW WKH
8OOPRVDFNQRZOHGJHWKDW*LOPRXUUHFHLYHGSXEOLFIXQGVRQO\
IRUJHQHUDOHGXFDWLRQSXUSRVHVDVRSSRVHGWRIXQGVSURYLGHG
XQGHUWKH,'($IRUGLVDELOLW\HGXFDWLRQ)XUWKHUPRUHWKH
,'($GHILQHVD/($DVDSXEOLFDGPLQLVWUDWLYHERG\FKDUJHG
ZLWK RYHUVHHLQJ SXEOLF VFKRROV 86& † D
GHILQLQJ D /($ DV ³D SXEOLF ERDUG RI HGXFDWLRQ RU RWKHU
SXEOLF DXWKRULW\ OHJDOO\ FRQVWLWXWHG IRU HLWKHU
DGPLQLVWUDWLYHFRQWURORUGLUHFWLRQRIRUWRSURYLGHDVHUYLFH
IXQFWLRQIRUSXEOLFHOHPHQWDU\RUVHFRQGDU\VFKRROV´
7KH8OOPRVFRQFHGHWKDW*LOPRXULVDSULYDWHLQVWLWXWLRQ
*LOPRXUPRUHRYHULVDVFKRROUDWKHUWKDQDQDGPLQLVWUDWLYH
ERG\$FFRUGLQJO\WKH,'($¶VGHILQLWLRQRID/($OHDYHV
³QRURRP´IRU*LOPRXUWRILWZLWKLQWKHVWDWXWRU\WHUP6W
-RKQVEXU\$FDGHP\Y'+)G G&LU
KROGLQJWKDWDSULYDWHVFKRROLVQRWD/($EHFDXVHWKH,'($
GHILQHVD/($DVDSXEOLFDGPLQLVWUDWLYHERG\ *LOPRXULV
WKHUHIRUHQRWVXEMHFWWROLDELOLW\XQGHUWKH,'($
)RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH KROG WKDW WKH
GLVWULFWFRXUWGLGQRWHUULQJUDQWLQJVXPPDU\MXGJPHQW WR
*LOPRXURQWKH8OOPRV¶,'($FODLP
% 7KHGLVWULFWFRXUWGLGQRWHUULQGHQ\LQJWKH8OOPRV¶
PRWLRQWRYDFDWHWKHJUDQWRIVXPPDU\MXGJPHQWRQ
WKHLU EUHDFK RI FRQWUDFW DQG IUDXG FODLPV DQG WR
UHPDQGWKRVHFODLPVWRVWDWHFRXUW
6WDQGDUGRIUHYLHZ
7KH8OOPRV¶PRWLRQWRYDFDWHDQGUHPDQGZDVDFKDOOHQJH
LQSDUWWRWKHGLVWULFWFRXUW¶VVXEMHFWPDWWHUMXULVGLFWLRQRYHU
WKLV FDVH 7KLV FRXUW UHYLHZV ³GH QRYR WKH H[LVWHQFH RI
VXEMHFWPDWWHUMXULVGLFWLRQDVDTXHVWLRQRIODZ´:ULJKW
Y*HQHUDO0RWRUV&RUS)G WK&LU

-- 6 of 8 --

8OOPRHWDOY*LOPRXU$FDGHP\ 1R
RIHGXFDWLRQVHUYLFHV´:LVHY2KLR'HS¶WRI(GXF)G
WK&LU 0RVWQRWDEO\WKH,'($UHTXLUHV
VWDWHVWRSURYLGH³>D@IUHHDSSURSULDWHSXEOLFHGXFDWLRQWR
DOOFKLOGUHQZLWKGLVDELOLWLHVUHVLGLQJLQWKH6WDWH´
86&† D
8QGHU WKH ,'($ WKH UHVSRQVLELOLW\ IRU HQVXULQJ WKDW
GLVDEOHGVWXGHQWVUHFHLYHDIUHHDSSURSULDWHSXEOLFHGXFDWLRQ
OLHV ZLWK WKH VWDWH HGXFDWLRQDO DJHQF\ 6($ 86&
† D UHFRJQL]LQJWKH6($DVWKHSULPDU\DXWKRULW\
IRUHVWDEOLVKLQJDVWDWH¶VFRPSOLDQFHZLWKWKH,'($ 7KH
6($ GLVWULEXWHV D VXEVWDQWLDO SRUWLRQ RI WKH VWDWH¶V ,'($
IXQGVWRORFDOHGXFDWLRQDODJHQFLHV /($V ZKLFKGLUHFWO\
SURYLGH GLVDEOHG VWXGHQWV ZLWK D IUHH DSSURSULDWH SXEOLF
HGXFDWLRQ86&† J HVWDEOLVKLQJWKH/($V¶
ULJKWWRDWOHDVWRIWKH,'($IXQGVSDLGWRWKHVWDWH
3DUHQWVRIDGLVDEOHGVWXGHQWPD\FKDOOHQJHZKHWKHUWKHLU
FKLOG LV UHFHLYLQJ WKH IUHH DSSURSULDWH SXEOLF HGXFDWLRQ
UHTXLUHGXQGHUWKH,'($86&† E UHTXLULQJ
WKH 6($ DQG WKH /($ WR SURYLGH DQ RSSRUWXQLW\ IRU WKH
SDUHQWVRIDGLVDEOHGFKLOGWRSUHVHQWFRPSODLQWVUHJDUGLQJ
³WKHSURYLVLRQRIDIUHHDSSURSULDWHSXEOLFHGXFDWLRQWRVXFK
FKLOG´ 7R GR VR WKH SDUHQWV PXVW ILOH D FRPSODLQW ZLWK
HLWKHUWKH6($RUWKH/($ZKLFKLVWKHQREOLJDWHGWRFRQGXFW
D KHDULQJ UHJDUGLQJ WKH SDUHQWV¶ FRPSODLQW 86&
† I SURYLGLQJ WKDW SDUHQWV ZKR ILOH D FRPSODLQW
UHJDUGLQJWKHLUGLVDEOHGFKLOG¶VHGXFDWLRQDUHHQWLWOHGWRDQ
LPSDUWLDOGXHSURFHVVKHDULQJ
7KH,'($SURYLGHVWKDWDQ\SHUVRQ³DJJULHYHG´E\WKHILQDO
GHFLVLRQ UHDFKHG DW WKH FRQFOXVLRQ RI WKLV DGPLQLVWUDWLYH
SURFHVVPD\EULQJDFLYLODFWLRQLQVWDWHRUIHGHUDOFRXUW
86& † L D $OWKRXJK WKH ,'($ GRHV QRW
VSHFLILFDOO\QDPHWKHSDUW\DJDLQVWZKRPVXFKDQDFWLRQPD\
EH EURXJKW WKH ³μODQJXDJH DQG VWUXFWXUH RI >WKH@ ,'($
VXJJHVWWKDWHLWKHURUERWKHQWLWLHV>WKH6($RU/($@PD\EH
KHOGOLDEOHIRUWKHIDLOXUHWRSURYLGHDIUHHDSSURSULDWHSXEOLF
HGXFDWLRQ ¶´6W7DPPDQ\3DULVK6FK%GY/RXLVLDQD
1R 8OOPRHWDOY*LOPRXU$FDGHP\
DOOHJLQJ WKDW VWDWHPHQWV FRQWDLQHG LQ WKH HPSOR\HU¶V FUHGR
FRQVWLWXWHG D SURPLVH RI HPSOR\PHQW 7KH FUHGR VWDWHG
DPRQJRWKHUWKLQJVWKDWWKHHPSOR\HUZDV³UHVSRQVLEOH´WRLWV
HPSOR\HHVDQGWKDWHPSOR\HHV³PXVWKDYHDVHQVHRIVHFXULW\
LQWKHLUMREV´,GDW%XWWKHGLVWULFWFRXUWFRQFOXGHG
WKDWUDWKHUWKDQDSURPLVHRIHPSOR\PHQWWKLVODQJXDJHZDV
³DQ DUWLFXODWLRQ RI >WKH HPSOR\HU¶V@ DVSLUDWLRQDO JRDOV DQG
LGHDOV´,GDW
7KH8OOPRVLQVLVWWKDWWKH$OOHQGHFLVLRQLVGLVWLQJXLVKDEOH
IURPWKHSUHVHQWFDVHDUJXLQJWKDW³2KLRLVDQHPSOR\PHQW
DWZLOOVWDWHDQGDVORQJDVWKHILULQJZDVQRWGLVFULPLQDWRU\
WKHODQJXDJHLQDFUHGRZDVLQUHDOLW\LUUHOHYDQW´
7KLV DUJXPHQW ODFNV PHULW KRZHYHU EHFDXVH WKH FRXUW LQ
$OOHQKDGWRGHFLGHZKHWKHUWKHODQJXDJHLQWKHFUHGRFUHDWHG
DQHQIRUFHDEOHSURPLVHRIHPSOR\PHQWVRDVWRHVWDEOLVKDQ
H[FHSWLRQWR2KLR¶VGHIDXOWUXOHRIHPSOR\PHQWDWZLOO7KXV
WKHODQJXDJHLQWKHFUHGRZDVDWLVVXHLQ$OOHQ
7KH8OOPRVIXUWKHUFRQWHQGWKDWHYHQLI$OOHQLVSHUVXDVLYH
DXWKRULW\ WKH ODQJXDJH LQ WKH 3KLORVRSK\ VHFWLRQ LV QRW
DVSLUDWLRQDO7KH\UHO\XSRQWKHWHVWLPRQ\RI5REHUW/DYDOOH
WKH +HDGPDVWHU DW *LOPRXU WR VXSSRUW WKHLU DUJXPHQW
/DYDOOHWHVWLILHGGXULQJKLVGHSRVLWLRQWKDW*LOPRXU³ZDQWHG´
DQG³H[SHFWHG´SDUHQWVWRUHO\XSRQWKHUHSUHVHQWDWLRQVLQWKH
+DQGERRN+HDOVRVWDWHGWKDW*LOPRXU¶VIDLOXUHWRSURYLGH
WKHVHUYLFHVSURPLVHGLQWKH +DQGERRNZRXOGFRQVWLWXWHD
EUHDFK RI FRQWUDFW /DYDOOH KRZHYHU GHQLHG WKDW WKH
3KLORVRSK\ VHFWLRQ FRQWDLQHG DQ\ VSHFLILF SURPLVHV RI
HGXFDWLRQDO VHUYLFHV +H VSHFLILFDOO\ VWDWHG WKDW WKH
3KLORVRSK\VHFWLRQ³SXWVIRUWKWKHLGHDOVZKLFKWKH>*LOPRXU@
$FDGHP\VHWVIRUWKDVWRWKDWZKLFKLWDVSLUHV´
%DVHGRQWKHDERYHZHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLG
QRW HUU LQ JUDQWLQJ VXPPDU\ MXGJPHQW WR *LOPRXU RQ WKH
8OOPRV¶EUHDFKRIFRQWUDFWFODLP

-- 7 of 8 --

8OOPRHWDOY*LOPRXU$FDGHP\ 1R
7KH8OOPRVIDLOHGWRDOOHJHDPDWHULDOUHSUHVHQWDWLRQ
RIIDFWVXIILFLHQWWRVXVWDLQDFODLPIRUIUDXG
7KHODQJXDJHFRQWDLQHGLQWKH3KLORVRSK\VHFWLRQRIWKH
+DQGERRNLVDOVRWKHEDVLVIRUWKH8OOPRV¶IUDXGFODLP7KH\
DOOHJHGWKDWWKH\UHDVRQDEO\UHOLHGXSRQWKHSURPLVHVPDGHLQ
WKH3KLORVRSK\VHFWLRQQDPHO\WKDW*LOPRXUZRXOGZRUNWR
IXOO\ GHYHORS LWV VWXGHQWV DQG ZRXOG UHVSHFW LWV VWXGHQWV¶
GLIIHULQJDELOLWLHVDQGVW\OHVRIOHDUQLQJ$FFRUGLQJWRWKH
8OOPRV*LOPRXUQHLWKHUIXOILOOHGWKHVHSURPLVHVQRUHYHUKDG
DQ\LQWHQWLRQRIGRLQJVR
%XW WKH 8OOPRV IDLOHG WR DOOHJH WKDW *LOPRXU PDGH D
UHSUHVHQWDWLRQRIIDFWVXIILFLHQWWRJLYHULVHWRDIUDXGFODLP
XQGHU2KLRODZ%XUUY6WDUN&RXQW\%GRI&RPP¶UV
1(G 2KLR 6\OODEXVˆ KROGLQJWKDW
³DUHSUHVHQWDWLRQRIIDFW´LVWKHILUVWHOHPHQWRIDIUDXG
FODLP )RUWKHSXUSRVHVRIDIUDXGFODLPDUHSUHVHQWDWLRQRI
IDFWPXVWEHGHILQLWH)ULHVQHUY0LG$PHULFDQ1DW¶O%DQN
7UXVW&R1R:':/DW 2KLR
&W$SS6HSW KROGLQJWKDWDEDQN¶VSURPLVHQRW
WR IRUHFORVHRQDGHOLQTXHQWORDQLIWKHSODLQWLIIFRQWLQXHG
IXQGLQJ D FRUSRUDWLRQ ZDV ³WRR YDJXH DQG LQGHILQLWH DV D
PDWWHU RI ODZ VR DV WR DPRXQW WR D IUDXGXOHQW
PLVUHSUHVHQWDWLRQ´ $P-XUG)UDXGDQG'HFHLW†
³$VDSUHGLFDWHIRUDIUDXGDFWLRQDUHSUHVHQWDWLRQ
PXVWEHGHILQLWHPHUHYDJXHJHQHUDORULQGHILQLWHVWDWHPHQWV
DUHLQVXIILFLHQW´
7KHODQJXDJHLQWKH3KLORVRSK\VHFWLRQLVLQGHILQLWH$V
H[SODLQHG LQ 3DUW ,,$ DERYH WKH 3KLORVRSK\ VHFWLRQ
SURPLVHVQRVSHFLILFHGXFDWLRQDOVHUYLFHV,WLQVWHDGVHWVIRUWK
DQDVSLUDWLRQDOVWDWHPHQWRI*LOPRXU¶VJRDOV7KHODQJXDJH
LQ WKH 3KLORVRSK\ VHFWLRQ WKHUHIRUH FRQWDLQV QR
UHSUHVHQWDWLRQRIIDFWVXIILFLHQWO\GHILQLWHIRUDIUDXGFODLP
3HUKDSVUHFRJQL]LQJWKLVWKH8OOPRVVHHNWREURDGHQWKH
VFRSHRIWKHLUIUDXGFODLPRQDSSHDO7KH\QRZFRQWHQGWKDW
WKHLUIUDXGFODLPZDVEDVHGXSRQERWKWKHODQJXDJHLQWKH
3KLORVRSK\ VHFWLRQ DQG ³VLPLODU RUDO UHSUHVHQWDWLRQV´ $V
VXSSRUWIRUWKHLUH[SDQGHGFODLPWKH8OOPRVDSSDUHQWO\VHHN
1R 8OOPRHWDOY*LOPRXU$FDGHP\
WRUHO\XSRQ$GPLVVLRQ'LUHFWRU,VDEHOOD¶VDOOHJHGDVVXUDQFHV
WR-DFTXHOLQH8OOPRWKDW³LWGLGQ¶WPDNHDQ\GLIIHUHQFHWKDW
-DVRQ KDG OHDUQLQJ GLVDELOLWLHV´ DQG WKDW *LOPRXU ³ZRXOG
ZRUNZLWK-DVRQ´LQD³YHU\QXUWXULQJHQYLURQPHQW´
7KH8OOPRV¶FRPSODLQWKRZHYHUPDNHVQRPHQWLRQRIDQ\
RUDO UHSUHVHQWDWLRQV FRQFHUQLQJ WKH QDWXUH RU TXDOLW\ RI
-DVRQ¶VHGXFDWLRQDW*LOPRXU%RWK5XOH E RIWKH)HGHUDO
5XOHVRI&LYLO3URFHGXUHDQG5XOH % RIWKH2KLR5XOHVRI
&LYLO3URFHGXUHUHTXLUHIUDXGWREHSOHGZLWKSDUWLFXODULW\7R
VDWLVI\WKLVUHTXLUHPHQWD³SODLQWLIIPXVWDOOHJHVSHFLILFDOO\
WLPHVSODFHV>DQG@FRQWHQWVRIWKHXQGHUO\LQJIUDXG´
9LOG Y 9LVFRQVL )G WK &LU
GLVFXVVLQJWKHVKRZLQJUHTXLUHGWRVDWLVI\)HGHUDO5XOH E
$OXPLQXP/LQH3URGV&RY%UDG6PLWK5RRILQJ&R
1(G 2KLR &W $SS VWDWLQJ WKDW LQ
RUGHUWRVDWLVI\2KLR5XOH % WKHFRPSODLQWPXVW³LQFOXGH
WKH WLPH SODFH DQG FRQWHQW RI WKH IDOVH UHSUHVHQWDWLRQ´
%HFDXVH WKH 8OOPRV GLG QRW SOHDG DQ\ IUDXGXOHQW RUDO
UHSUHVHQWDWLRQV LQ WKHLU FRPSODLQW D FODLP IRU IUDXG EDVHG
XSRQVXFKUHSUHVHQWDWLRQVLVQRWSURSHUO\EHIRUHXV
7KH8OOPRVLQDQ\HYHQWFDQQRWUHFRYHUIRUIUDXGEDVHG
XSRQ ,VDEHOOD¶V DOOHJHG RUDO UHSUHVHQWDWLRQV ,VDEHOOD¶V
DVVXUDQFHVWKDW*LOPRXUZRXOGZRUNZLWK-DVRQDQGSURYLGH
D QXUWXULQJ HQYLURQPHQW DUH MXVW DV YDJXH DV WKH ODQJXDJH
FRQWDLQHGLQWKH3KLORVRSK\VHFWLRQRIWKH+DQGERRN7KHVH
VWDWHPHQWV WKHUHIRUH DUH WRR LQGHILQLWH WR FRQVWLWXWH D
UHSUHVHQWDWLRQRIIDFWIRUSXUSRVHVRIDIUDXGFODLP
)RUWKHVHUHDVRQVZHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLG
QRW HUU LQ JUDQWLQJ VXPPDU\ MXGJPHQW WR *LOPRXU RQ WKH
8OOPRV¶IUDXGFODLP
*LOPRXULVQRWVXEMHFWWROLDELOLW\XQGHUWKH,'($
7KH ,'($ SURYLGHV IHGHUDO IXQGV WR KHOS VWDWHV HGXFDWH
GLVDEOHGVWXGHQWV86&† DXWKRUL]LQJJUDQWVWR
VWDWHVWRDVVLVWWKHPLQSURYLGLQJVSHFLDOHGXFDWLRQWRVWXGHQWV
ZLWKGLVDELOLWLHV $VWDWHUHFHLYLQJIXQGVXQGHUWKH,'($
³PXVWDELGHE\DKRVWRIUHJXODWLRQVJRYHUQLQJWKHSURYLVLRQ

-- 8 of 8 --