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

&21680(56 (1(5*< ; &203$1<  3HWLWLRQHU   1R    Y !   )('(5$/ (1(5*<  5(*8/$725< &200,66,21  5HVSRQGHQW   1 2Q3HWLWLRQIRU5HYLHZIURP WKH)HGHUDO(QHUJ\5HJXODWRU\&RPPLVVLRQ 1RV35  35  $UJXHG $XJXVW  'HFLGHGDQG)LOHG 6HSWHPEHU %HIRUH &2/(DQG*,/0$1&LUFXLWsXGJHV 7$512: 'LVWULFWsXGJH

7KH +RQRUDEOH $UWKXU s 7DUQRZ 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ

  &RQVXPHUV(QHUJ\&RY)(5& 1R   1R   &RQVXPHUV(QHUJ\&RY)(5& 

BBBBBBBBBBBBBBBBB 7UDQVPLVVLRQ&RY)(5& )G WK&LU    EXW ZH DUH QRW UHTXLUHG WR DFFHSW DQ DJHQF\jV &2816(/ UHSUHVHQWDWLRQWKDWDQRUGHUVD\VmGD\lZKHQLWVHHPVWRXV WKDW WKH RUGHU VD\V mQLJKWl  6HFRQG LI ZH ZHUH WR DFFHSW $5*8('   'HERUDK $ 0RVV &21680(56 (1(5*< )(5&jVVXJJHVWLRQDQGDVXEVHTXHQWGLVSXWHZHUHWRDULVH &2:DVKLQJWRQ'&IRU3HWLWLRQHU'DYLG+&RIIPDQ LW ZRXOG EH QHFHVVDU\ WR UHDG DQG LQWHUSUHW WKUHH VHSDUDWH )('(5$/ (1(5*< 5(*8/$725< &200,66,21 GRFXPHQWV )(5&jV RULJLQDO RUGHU )(5&jV RUGHU GHQ\LQJ :DVKLQJWRQ'&IRU5HVSRQGHQW21%5,() 'HERUDK$ UHKHDULQJDQGWKLVFRXUWjVRSLQLRQ VLPSO\WRXQGHUVWDQGZKDW 0RVV :LOOLDP 0 /DQJH &21680(56 (1(5*< &2 )(5&jV RUGHU DV mFODULILHGl E\ WKLV FRXUW UHTXLUHV :DVKLQJWRQ '& IRU 3HWLWLRQHU  %HWK * 3DFHOOD &RQVXPHUV WR GR  7KLV GRHV QRW VWULNH XV DV SDUWLFXODUO\ )('(5$/ (1(5*< 5(*8/$725< &200,66,21 HIILFLHQW  7KLUG LQ OLJKW RI )(5&jV DSSDUHQW GLIILFXOW\ :DVKLQJWRQ'&IRU5HVSRQGHQW UHPDLQLQJZLWKLQWKHOLPLWVRILWVVWDWXWRU\DXWKRULW\ZHILQG RXUVHOYHV UHOXFWDQW WR FRPPXQLFDWH WKH PHVVDJH WKDW HYHQ BBBBBBBBBBBBBBBBB ZKHQ)(5&RYHUVWHSVLWVSHUPLWWHGERXQGVLWVRUGHUVZLOOEH VDYHGE\KLJKO\VWUDLQHGMXGLFLDOmFODULILFDWLRQVl 23,1,21 BBBBBBBBBBBBBBBBB ,,,&21&/86,21 521$/' /(( *,/0$1 &LUFXLW sXGJH  &RQVXPHUV )RU DOO RI WKH DERYH UHDVRQV WKH SHWLWLRQ IRU UHYLHZ LV (QHUJ\&RPSDQ\KDVSHWLWLRQHGWKLVFRXUWIRUUHYLHZRIDQ *5$17('WKHFKDOOHQJHGRUGHULV6(7$6,'(DQGWKLV RUGHURIWKH)HGHUDO(QHUJ\5HJXODWRU\&RPPLVVLRQ )(5& FDVHLV5(0$1'('IRUIXUWKHUSURFHHGLQJVFRQVLVWHQWZLWK WKDWJUDQWHG&RQVXPHUVjVSHWLWLRQWRGHFUHDVHFHUWDLQRILWV WKLVRSLQLRQ UDWHVEXWDFFRUGLQJWR&RQVXPHUVLQGRLQJVRDWWHPSWHGWR H[WHQG LWV UHJXODWRU\ DXWKRULW\ EH\RQG WKH ERXQGDULHV DXWKRUL]HGE\&RQJUHVV)RUWKHUHDVRQVVHWIRUWKEHORZZH *5$17WKHSHWLWLRQ6(7$6,'(WKHFKDOOHQJHGRUGHUDQG 5(0$1'WKLVFDVHIRUIXUWKHUSURFHHGLQJVFRQVLVWHQWZLWK WKLVRSLQLRQ ,%$&.*5281' 7KH 1DWXUDO *DV $FW 1*$   86& †† ] FRQIHUVXSRQ)(5&FRPSUHKHQVLYHUHJXODWRU\DXWKRULW\RYHU QDWXUDOJDVFRPSDQLHVWKDWHQJDJHLQWKHVDOHRIQDWXUDOJDV IRU UHVDOH RU LQWHUVWDWH JDV WUDQVSRUWDWLRQ  &RQJUHVV KDV FDUYHGRXWVHYHUDOH[FHSWLRQVWR)(5&jVRWKHUZLVHSOHQDU\ DXWKRULW\  m+LQVKDZ SLSHOLQHVl PDNH XS RQH RI WKRVH H[FHSWLRQV$+LQVKDZSLSHOLQHLVDQDWXUDOJDVSLSHOLQHWKDW UHFHLYHVDOORILWVRXWRIVWDWHJDVIURPSHUVRQVmZLWKLQRUDW WKHERXQGDU\RID>V@WDWHLIDOOWKHQDWXUDOJDVVRUHFHLYHGLV XOWLPDWHO\FRQVXPHGlZLWKLQWKHVWDWHLQZKLFKLWLVUHFHLYHG  &RQVXPHUV(QHUJ\&RY)(5& 1R   1R   &RQVXPHUV(QHUJ\&RY)(5& 

)(5& RQFH &RQVXPHUV SURYLGHG WKH LQIRUPDWLRQ mWKH  86& †  F   &RQJUHVV FRQFOXGHG WKDW +LQVKDZ &RPPLVVLRQZRXOGKDYHWKHEXUGHQWRMXVWLI\DQ\FKDQJHLQ SLSHOLQHVDUHmPDWWHUVSULPDULO\RIORFDOFRQFHUQlDQGVRDUH &RQVXPHUVjVUDWHZKLFKZRXOGDSSO\SURVSHFWLYHO\l PRUHDSSURSULDWHO\UHJXODWHGE\SHUWLQHQWVWDWHDJHQFLHVUDWKHU WKDQE\)(5& 'HVSLWH)(5&jVDUJXPHQWV&RQVXPHUVjVVXVSLFLRQDSSHDUV MXVWLILHG,IDOO)(5&KDGUHDOO\ZDQWHGWRGRZDVUHTXLUH $OWKRXJK WKH\ DUH RUGLQDULO\ RXWVLGH RI )(5&jV &RQVXPHUVWRPDNHSHULRGLFmLQIRUPDWLRQDOILOLQJVlWKHQLW MXULVGLFWLRQ +LQVKDZ SLSHOLQHV mFDQ XQTXHVWLRQDEO\ FRPH LVGLIILFXOWWRXQGHUVWDQGZK\IRUH[DPSOH)(5&jVLQLWLDO XQGHU)(5&DXWKRULW\ZKHQ>WKH\@HQJDJHLQDFWLYLWLHVWKDWJR RUGHU SURYLGHV WKDW m>R@Q RU EHIRUH 'HFHPEHU   EH\RQGWKHLQWUDVWDWHWUDQVSRUWRIJDVl3XEOLF8WLOV&RPPjQ &RQVXPHUVVKDOOILOHDSHWLWLRQIRUUDWHDSSURYDOWRMXVWLI\LWV RI &D Y )(5&  )G   '& &LU    FXUUHQWUDWHRUWRHVWDEOLVKDQHZPD[LPXPUDWHl (PSKDVLV 1HYHUWKHOHVV)(5&KDVSURPXOJDWHGDUHJXODWLRQWKDWDOORZV DGGHG $OVRDV&RQVXPHUVFRUUHFWO\REVHUYHVQHLWKHUWKH +LQVKDZ SLSHOLQHV LQ OLPLWHG FLUFXPVWDQFHV WR HQJDJH LQ SKUDVHmLQIRUPDWLRQDOILOLQJVlQRUDQ\REYLRXVV\QRQ\PIRU DFWLYLWLHV WKDW ZRXOG RWKHUZLVH EULQJ WKHP IXOO\ ZLWKLQ WKDWSKUDVHDSSHDUVDQ\ZKHUHLQ)(5&jVRULJLQDORUGHURULQ )(5&jVMXULVGLFWLRQZKLOHVWLOOPDLQWDLQLQJ IRUWKHPRVWSDUW WKHRUGHUGHQ\LQJUHKHDULQJ WKHLUVWDWXVDV+LQVKDZSLSHOLQHV6HH&)5† ,QRUGHUWRDYDLOLWVHOIRIWKHUHJXODWLRQD+LQVKDZSLSHOLQH :HZLOOWKHUHIRUHJUDQW&RQVXPHUVjVSHWLWLRQVHWDVLGHWKH PXVWDSSO\IRUDEODQNHWmFHUWLILFDWHRISXEOLFFRQYHQLHQFH FKDOOHQJHG RUGHU DQG UHPDQG WKLV FDVH IRU IXUWKHU DQG QHFHVVLW\l WKH WULJJHULQJ HYHQW IRU IXOO )(5& SURFHHGLQJV  )(5& ZLOO EH IUHH WR HQWHU D QHZ RUGHU MXULVGLFWLRQ SXUVXDQWWR†RIWKH1*$86&†I DSSURYLQJ &RQVXPHUVjV SHWLWLRQ WR GHFUHDVH LWV UDWHV IRU EXWRQO\ZLWKUHJDUGWRWKHSLSHOLQHjVLQWHUVWDWHDFWLYLWLHV LQWHUUXSWLEOHQDWXUDOJDVWUDQVSRUWDWLRQVHUYLFHVSXUVXDQWWR †  RI WKH 1*$  6KRXOG )(5& ZLVK &RQVXPHUV WR PDNH 7KH+LQVKDZSLSHOLQHLVWKHQSHUPLWWHGWRHQJDJHLQFHUWDLQ SHULRGLF LQIRUPDWLRQDO ILOLQJV LW PD\ RI FRXUVH VR UHTXLUH LQWHUVWDWHDFWLYLWLHVZLWKRXWEHLQJVXEMHFWHGWRWKHIXOOUDQJH SXUVXDQWWR† D RIWKH1*$7KLVZLOODOORZ)(5&WRGR RIWKH1*$jVUHTXLUHPHQWVZKLFKLQFOXGHH[WHQVLYHILOLQJ ZKDW LW LQVLVWV LW KDV EHHQ WU\LQJ WR GR DOO DORQJ DQG ZLOO DQGUHSRUWLQJREOLJDWLRQV,QH[FKDQJHWKHDFWLYLWLHVRIWKH SHUPLWERWKVLGHVWRJHWZKDWWKH\KDYHDVVXUHGXVWKH\ZDQW SLSHOLQH WKDW ZRXOG RUGLQDULO\ VXEMHFW LW WR IXOO )(5& :HWUXVWWKDWWKLVWLPHKRZHYHUWKHRUGHUZLOOEHLVVXHGZLWK MXULVGLFWLRQPXVWEHSURYLGHGZLWKRXWXQGXHGLVFULPLQDWLRQ FODULW\DQGSUHFLVLRQ DQGDWmIDLUDQGHTXLWDEOHlUDWHV7KH+LQVKDZSLSHOLQHPD\ WKHQ EDVH LWV UDWHV RQ WKH UDWHV IRU FRPSDUDEOH VHUYLFH DV $W RUDO DUJXPHQW FRXQVHO IRU )(5& VXJJHVWHG WKDW WKLV DSSURYHGE\WKHSHUWLQHQWVWDWHUHJXODWRU\DJHQF\RULWPXVW FRXUWFRXOGUDWKHUWKDQVHWDVLGHWKHFKDOOHQJHGRUGHULQVWHDG DSSO\WR)(5&IRUDSSURYDORILWVSURSRVHGUDWHV GHQ\WKHSHWLWLRQIRUUHYLHZLQDQRSLQLRQmFODULI\LQJlWKDWWKH RUGHUDFWXDOO\VD\VZKDWLWZRXOGKDYHWRVD\IRULWWREHRQ &RQVXPHUV RSHUDWHV D +LQVKDZ SLSHOLQH SXUVXDQW WR D OHJDOO\VROLGJURXQGLHWKDWWKHRUGHUUHVWVRQ)(5&jV† mEODQNHWFHUWLILFDWHlREWDLQHGXQGHU&)5†2Q DXWKRULW\  :H FDQ WKLQN RI DW OHDVW WKUHH UHDVRQV ZK\ ZH 1RYHPEHU    &RQVXPHUV SHWLWLRQHG )(5& IRU VKRXOGQRWDFFHSWWKLVVXJJHVWLRQ)LUVWRIDOOmFODULI\LQJl DSSURYDO WR GHFUHDVH LWV SUHYLRXVO\ DXWKRUL]HG UDWH IRU WKDWDQRUGHUVD\VVRPHWKLQJWKDWWUXO\DSSHDUVWRFRQWUDGLFW LQWHUUXSWLEOH QDWXUDO JDV WUDQVSRUWDWLRQ VHUYLFHV  )(5& ZKDW WKH RUGHU LQ IDFW VD\V LV QRW FODULILFDWLRQ DW DOO  ,W LV DSSURYHG WKH SURSRVHG UHGXFWLRQ EXW LWV RUGHU UHTXLUHG UHZULWLQJ2XUUHYLHZRIDQDJHQF\jVLQWHUSUHWDWLRQRILWVRZQ &RQVXPHUVWRILOHRQRUEHIRUH'HFHPEHUDQGWKHQ RUGHUVLVRIFRXUVHKLJKO\GHIHUHQWLDOVHHHJ3DFLILF*DV DJDLQDWWKUHH\HDULQWHUYDOVSHWLWLRQVmIRUUDWHDSSURYDOWR  &RQVXPHUV(QHUJ\&RY)(5& 1R   1R   &RQVXPHUV(QHUJ\&RY)(5& 

MXVWLI\LWVFXUUHQWUDWHRUWRHVWDEOLVKDQHZPD[LPXPUDWHl ,,$1$/<6,6 &RQVXPHUV UHTXHVWHG D UHKHDULQJ HVVHQWLDOO\ DUJXLQJ WKDW )(5& H[FHHGHG LWV VWDWXWRU\ DXWKRULW\ E\ SODFLQJ RQ 7KLVLVRQHRIWKRVHSHFXOLDUFDVHVLQZKLFKLWLVQRWHDV\WR &RQVXPHUV WKH EXUGHQ RI MXVWLI\LQJ LWV UDWH DV IDLU DQG XQGHUVWDQGZKDWWKHOLWLJDQWVDUHGLVSXWLQJ&RQVXPHUVDQG HTXLWDEOH  8QGHU WKH DSSURSULDWH VHFWLRQ RI WKH 1*$ )(5& DJUHH WKDW XQGHU †  D  RI WKH 1*$  86& &RQVXPHUVDUJXHGLWLV)(5&WKDWPXVWVKRXOGHUWKHEXUGHQ †L D )(5&FDQUHTXLUH&RQVXPHUVWRSURYLGHLWZLWK RIVKRZLQJWKDW&RQVXPHUVjVUDWHLVXQIDLURULQHTXLWDEOH LQIRUPDWLRQDWUHJXODULQWHUYDOV7KH\DOVRDJUHHWKDWLI)(5& ZDQWVWRUHYLVH&RQVXPHUVjVUDWHV)(5&ZLOOKDYHWREHDU )(5& GHQLHG WKH UHTXHVW IRU UHKHDULQJ UHDVRQLQJ WKDW WKHEXUGHQRIMXVWLI\LQJDQ\FKDQJHDVLWPXVWXQGHU†RI EHFDXVH&RQVXPHUVLVQRWVXEMHFWWRWKHIXOODUUD\RIUHSRUWLQJ WKH1*$ REOLJDWLRQVWKDWDSSO\WRLQWHUVWDWHSLSHOLQHVLWZDVLPSRUWDQW WR UHTXLUH &RQVXPHUV WR SHULRGLFDOO\ WXUQ RYHU UHOHYDQW 7KH RQO\ DSSDUHQW VRXUFH RI FRQWHQWLRQ LV &RQVXPHUVjV LQIRUPDWLRQVRWKDW)(5&FRXOGHQVXUHWKHFRQWLQXHGIDLUQHVV VXVSLFLRQWKDW)(5&ZDVWU\LQJWRVOLGHWKURXJKDQDWWHPSWWR DQGHTXLWDELOLW\RI&RQVXPHUVjVUDWH,I&RQVXPHUVGLGQRW UHJXODWHLWXQGHU†RIWKH1*$UDWKHUWKDQXQGHU†,W ZDQWWRILOHWRUHHVWDEOLVKLWVUDWHHYHU\WKUHH \HDUV)(5& ZRXOG QRW EH WKH ILUVW WLPH WKDW )(5& KDV XWLOL]HG VXFK D FRQFOXGHG&RQVXPHUVZDVIUHHWRILOHDEODQNHWDSSOLFDWLRQ WDFWLF6HHHJ3XEOLF6HUY&RPPjQRI1<)GDW XQGHU†DQGEHWUHDWHGOLNHDQLQWHUVWDWHSLSHOLQHmZLWKDOO   m2QIRXURFFDVLRQVLQWKHODVWWKUHH\HDUVWKLVFRXUW RIWKHDWWHQGDQWUHJXODWRU\REOLJDWLRQVl KDVUHYLHZHG&RPPLVVLRQHIIRUWVWRFRPSURPLVH†jVOLPLWV RQLWVSRZHUWRUHYLVHUDWHV2QHDFKWKHFRXUWKDVUHSHOOHG 7KLVSHWLWLRQIRUUHYLHZIROORZHG&RQVXPHUVPDLQWDLQV WKH&RPPLVVLRQjVJDPELW7KLVLVQXPEHUILYHl :HVWHUQ WKDW LW ZDV QRW DQG LV QRW REMHFWLQJ WR EHLQJ UHTXLUHG WR 5HVRXUFHV,QFY)(5& )G '&&LU  SURYLGH)(5&ZLWKLQIRUPDWLRQVRWKDW)(5&FDQIRUPXODWH m:H QRZ PDNH LW DQ HYHQ VL[l   &RQVXPHUV FODLPV WKDW LQIRUPHGFRQFOXVLRQVDERXWWKHIDLUQHVVDQGHTXLWDELOLW\RI RQO\DIWHULWSHWLWLRQHGWKLVFRXUWIRUUHYLHZKDV)(5&WDNHQ &RQVXPHUVjVUDWH5DWKHU&RQVXPHUVLQVLVWVLWLVREMHFWLQJ WKHSRVLWLRQWKDWWKHFKDOOHQJHGRUGHUUHVWVRQ)(5&jV† WRZKDWLWSHUFHLYHVWREHDQDWWHPSWE\)(5&WRMXVWLI\LWV SRZHUVUDWKHUWKDQRQ† RUGHUDVDYDOLGH[HUFLVHRI)(5&jVDXWKRULW\XQGHU†RIWKH 1*$86&†F 6HFWLRQDSSOLHVZKHQDQDWXUDO )(5& DUJXHV WKDW &RQVXPHUV mIXQGDPHQWDOO\ JDVFRPSDQ\ILOHVIRUDUDWHFKDQJH 6HFWLRQDSSOLHVZKHQ PLVFRPSUHKHQGV WKH FKDOOHQJHG RUGHUVl FRQWHQGLQJ WKDW )(5& mWDNH>V@ WKH LQLWLDWLYH DQG GHWHUPLQH>V@ WKDW UDWHV )(5&ZDVQRWSXUSRUWLQJWRDFWXQGHULWV†SRZHU$IWHU DOUHDG\ILOHGDUHQRWMXVWDQGUHDVRQDEOH7KHXQLI\LQJ DOO )(5& SRLQWV RXW †  D  RI WKH 1*$  86& SULQFLSOHLVWKDWWKHSURSRQHQWRIFKDQJHEHDUVWKHEXUGHQl †L D H[SOLFLWO\DXWKRUL]HV)(5&WRGHPDQGWKDWSLSHOLQH 3XEOLF6HUY&RPPjQRI1<Y)(5&)G FRPSDQLHVVXFKDV&RQVXPHUVSHULRGLFDOO\ILOHLQIRUPDWLRQ '&&LU  +DG)(5&LVVXHGLWVRUGHUXQGHU†RI ZLWK)(5&VRWKDW)(5&FDQVDWLVI\LWVREOLJDWLRQVXQGHU† WKH1*$86&†GnZKLFK&RQVXPHUVPDLQWDLQV RI WKH 1*$  6HH  86& † L D  m(YHU\ QDWXUDOJDV ZDVDFWXDOO\WKHRQO\SURSHUEDVLVRIDXWKRULW\IRU)(5&jV FRPSDQ\VKDOOILOHZLWKWKH&RPPLVVLRQVXFKUHSRUWVDV RUGHUn)(5& ZRXOG KDYH WR VKRXOGHU WKH EXUGHQ RI WKH&RPPLVVLRQPD\SUHVFULEHDVQHFHVVDU\RUDSSURSULDWH HVWDEOLVKLQJ WKDW &RQVXPHUVjV UDWH LV XQIDLU RU LQHTXLWDEOH WRDVVLVWWKH&RPPLVVLRQLQWKHSURSHUDGPLQLVWUDWLRQRIWKLV 0RUHRYHUXQGHU†RIWKH1*$UDWHFKDQJHVPD\RQO\EH FKDSWHU7KH&RPPLVVLRQPD\UHTXLUHIURPVXFKQDWXUDO LPSRVHGSURVSHFWLYHO\6HFWLRQSHUPLWVFHUWDLQUHWURDFWLYH JDVFRPSDQLHVVSHFLILFDQVZHUVWRDOOTXHVWLRQVXSRQZKLFK DGMXVWPHQWV WKH &RPPLVVLRQ PD\ QHHG LQIRUPDWLRQl   $FFRUGLQJ WR