NLRB v. V&S Schuler Eng

U.S. Court of Appeals for the Sixth Circuit

NLRB v. V&S Schuler Eng

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21  1/5%Y9 66FKXOHU(QJLQHHULQJ 1R 3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

(/(&7521,& &,7$7,21  )(' $SS 3 WK &LU

QRHUURULQWKLVUHJDUG,GDW FLWLQJ$75:LUH &DEOH )LOH 1DPH DS

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jVREMHFWLRQV Y !   &RQFOXVLRQ 9 6 6&+8/(5   %HFDXVH ZH ILQG VXEVWDQWLDO HYLGHQFH LQ WKH UHFRUGWR (1*,1((5,1* ,1&  VXSSRUWWKH%RDUG VGHFLVLRQZHKHUHE\JUDQWWKHDSSOLFDWLRQ 5HVSRQGHQW  IRUHQIRUFHPHQWRIWKH%RDUG VRUGHU   81,7(' 67((/:25.(56 2)  $0(5,&$ $)/&,2&/&  ,QWHUYHQRU   1 2Q$SSOLFDWLRQIRU(QIRUFHPHQWRIDQ2UGHURIWKH 1DWLRQDO/DERU5HODWLRQV%RDUG 1R&$ $UJXHG 6HSWHPEHU 'HFLGHGDQG)LOHG 2FWREHU %HIRUH .583$16.<DQG&/$<&LUFXLWsXGJHV *:,1 'LVWULFWsXGJH

7KH +RQRUDEOH sDPHV 6 *ZLQ 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ

  1/5%Y9 66FKXOHU(QJLQHHULQJ 1R 1R 1/5%Y9 66FKXOHU(QJLQHHULQJ 

BBBBBBBBBBBBBBBBB DQHOHFWLRQ7KHUHWKHHPSOR\HUVKRZHGHYLGHQFHWKDWXQLRQ VXSSRUWHUVZHDULQJXQLRQKDWVDQGLQVLJQLDVVWRRGQHDUWKH &2816(/ OLQHWRWKHSROOVDQGXUJHGYRWHUVWRSURWHFWWKHLUMREVZLWKD YRWHIRUWKHXQLRQ,QDGGLWLRQ&ROTXHVWJDYHHYLGHQFHWKDW $5*8('   $QGUHZ & 6PLWK 925<6 6$7(5 WKHXQLRQHOHFWLRQREVHUYHUHQWUHDWHGYRWHUVWRYRWHIRUWKH 6(<0285  3($6( &ROXPEXV 2KLR IRU 5HVSRQGHQW XQLRQE\WHOOLQJWKHPWKDWWKLVZDVWKHRQO\ZD\WKH\FRXOG sHIIUH\+LUVFK1$7,21$//$%255(/$7,216%2$5' JHW EDFN WKHLU MREV   )G DW   'HVSLWH VKRZLQJ 2)),&(2)7+(*(1(5$/&2816(/:DVKLQJWRQ'& HYLGHQFHRIFRQGXFWPRUHFRHUFLYHWKDQKHUHLQYROYHGZH IRU 3HWLWLRQHU  $QJHOD ( 3DFH $66,67$17 *(1(5$/ UHMHFWHG&ROTXHVWjVFODLP &2816(/ 81,7(' 67((/:25.(56 2) $0(5,&$ $)/&,2&/& 3LWWVEXUJK 3HQQV\OYDQLD IRU ,QWHUYHQRU 7KH DIILGDYLWV SURGXFHG E\ &ROTXHVW GR QRW GHSLFW 21 %5,()   $QGUHZ & 6PLWK 'DYLG $ &DPSEHOO HJUHJLRXVH[DPSOHVRIHOHFWLRQHHULQJWDFWLFV1RUGRWKH 925<66$7(56(<0285 3($6(&ROXPEXV2KLR DIILGDYLWVGHPRQVWUDWHHYLGHQFHWKDWWKHXQLRQVXSSRUWHUV

IRU 5HVSRQGHQW  s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m>$@VLQJOHFKDQFH FRPPHQW >E\ D XQLRQ UHSUHVHQWDWLYH@ HYHQ LI PDGH LQ D 23,1,21 GHVLJQDWHG QRHOHFWLRQHHULQJ DUHD WR D VLQJOH HPSOR\HH BBBBBBBBBBBBBBBBB RXWVLGHWKHLPPHGLDWHSROOLQJDUHDGXULQJDQHOHFWLRQZRQE\ DPDUJLQRIDOPRVWYRWHVIDOOVIDUVKRUWRILPSDLULQJWKH *:,1 'LVWULFW sXGJH  :LWK WKLV RSLQLRQ WKH &RXUW H[HUFLVH RI HPSOR\HH IUHH FKRLFH      7KXV WKLV UHYLHZVWKH1DWLRQDO/DERU5HODWLRQV%RDUGjV WKHm%RDUGl HOHFWLRQHHULQJLQFLGHQWFDQQRWEHWKHEDVLVIRUVHWWLQJDVLGH 1RYHPEHU RUGHUDQGGHFLVLRQE\ZKLFKWKH%RDUG WKHHOHFWLRQl  DVNV WKLV &RXUW WR HQIRUFH WKH RUGHU LW LVVXHG DJDLQVW 5HVSRQGHQW9 66FKXOHU(QJLQHHULQJ,QF m&RPSDQ\lRU :HKHOGWKHVDPHLQ1/5%Y6XSHULRU&RDWLQJV,QF m6FKXOHU(QJLQHHULQJl ,QWKDWGHFLVLRQWKH%RDUGIRXQG )G  WK &LU     7KHUH WKH %RDUG IRXQG WKDW D WKDWWKH&RPSDQ\YLRODWHG6HFWLRQV D  DQG D  RIWKH XQLRQUHSUHVHQWDWLYHjVVWDWHPHQWWKDWLQGLFDWHGWKDWHPSOR\HHV 1DWLRQDO/DERU5HODWLRQV$FWDVDPHQGHG 86&† ZRXOGEHILUHGLIWKHXQLRQORVWWKHHOHFWLRQGLGQRWLQWHUIHUH HW VHT WKH $FW RU m1/5$l  E\ UHIXVLQJ WKH UHTXHVW RI ZLWK WKH ULJKW WR D IDLU XQLRQ UHSUHVHQWDWLRQ HOHFWLRQ  7KH ,QWHUYHQRU8QLWHG6WHHOZRUNHUVRI$PHULFD$)/&,2&/& %RDUGIRXQGWKH8QLRQGLGQRWLQWHUIHUHZLWKDIDLUHOHFWLRQ WKH8QLRQ WREDUJDLQDQGIXUQLVKLQIRUPDWLRQ HYHQ WKRXJK WKH WKUHDWHQLQJ EHKDYLRU RI D 8QLRQ DJHQW LV JLYHQPRUHZHLJKWWKDQWKDWRIDWKLUGSDUW\ZKHQGHWHUPLQLQJ ZKHWKHURUQRWWKHHOHFWLRQVKRXOGEHVHWDVLGHDQGZHIRXQG   1/5% 1R   /550 %1$     1/5%Y9 66FKXOHU(QJLQHHULQJ 1R 1R 1/5%Y9 66FKXOHU(QJLQHHULQJ 

$XFWLRQ,QFY1/5%1RV    :/  6FKXOHU(QJLQHHULQJKDVUHIXVHGWRUHFRJQL]HWKH8QLRQDV DW  WK&LUsXQH  XQSXEOLVKHGWDEOH  WKHUHSUHVHQWDWLYHRIWKHHPSOR\HHVDOOHJLQJWKDWWKH%RDUG LPSURSHUO\ JUDQWHG LWV FHUWLILFDWLRQ RI WKH 8QLRQ DV WKH %HFDXVH*DUQHUZDVQRWDQDJHQWRIWKH8QLRQZHFRQVLGHU FROOHFWLYHEDUJDLQLQJUHSUHVHQWDWLYH5HJDUGLQJLWVFODLPWKDW ZKHWKHU *DUGQHUj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jVREMHFWLRQVWRWKH VLQFHLWGLGQRWmVRVXEVWDQWLDOO\LPSDLUWKHHPSOR\HHVj VHFRQG HOHFWLRQ  ,Q REMHFWLQJ WR WKH VHFRQG HOHFWLRQ WKH H[HUFLVHRIIUHHFKRLFHVRDVWRUHTXLUHWKDWWKHHOHFWLRQ &RPSDQ\DUJXHGWKDWDQDOWHUHGVDPSOHEDOORWDQHPSOR\HHjV EHVHWDVLGHl HOHFWLRQGD\FRQGXFWDQGDVXSHUYLVRUjVDOOHJHGO\SURXQLRQ FRQGXFWZDUUDQWHGDQHZHOHFWLRQ 6XSSOHPHQWDO5HSRUWRQ2EMHFWLRQVDWsRLQW$SSHQGL[  %HFDXVH ZH ILQG WKDW VXEVWDQWLDO HYLGHQFH VXSSRUWVWKH  $FFHSWLQJ WKH &RPSDQ\jV GHVFULSWLRQ RI*DUGQHUjV %RDUGjV HOHFWLRQ FHUWLILFDWLRQ DQG LWV ILQGLQJ WKDW 6FKXOHU FRQGXFWWKH%RDUGGLGQRWDEXVHLWVGLVFUHWLRQZKHQLWGHQLHG (QJLQHHULQJ YLRODWHG WKH $FW E\ IDLOLQJ WR EDUJDLQ LQ JRRG WKH &RPSDQ\jV REMHFWLRQ ZLWKRXW KHDULQJ  7R ZDUUDQW D IDLWKZHFHUWLI\WKH%RDUGjVRUGHUUHTXLULQJWKH&RPSDQ\WR KHDULQJ6FKXOHU(QJLQHHULQJPXVWVKRZDSULPDIDFLHFDVH EDUJDLQFROOHFWLYHO\ZLWKWKH8QLRQ IRULQYDOLGDWLQJWKHHOHFWLRQ&ROTXHVW(QHUJ\,QFY1/5% )G  WK&LU  ,QRUGHUWRPDNHDSULPD %DFNJURXQG IDFLHFDVHIRULQYDOLGDWLQJDQHOHFWLRQDQREMHFWLQJSDUW\VXFK DVWKHHPSOR\HUVKHUHmEHDUVWKHEXUGHQ RI GHPRQVWUDWLQJ 6FKXOHU(QJLQHHULQJLVDQ2KLRFRUSRUDWLRQZLWKDQRIILFH WKDWWKHUHH[LVWPDWHULDOLVVXHVRIIDFWFRQFHUQLQJZKHWKHUWKH DQG SODFH RI EXVLQHVV LQ &DQWRQ 2KLR ZKHUH LW IDEULFDWHV REMHFWLRQDEOHFRQGXFWDIIHFWHGWKHUHVXOWVRIWKHHOHFWLRQl,G VWHHOSURGXFWV DW 7KH\PXVWSURYHQRWRQO\WKDWXQODZIXODFWVRFFXUUHG EXWWKDWmWKHFRQGXFWLQWHUIHUHGZLWKWKHYRWHUV H[HUFLVHRI  2Q)HEUXDU\ WKH8QLRQILOHGDSHWLWLRQZLWKWKH IUHH FKRLFHl DQG WKDW LW GLG VR mWR VXFK DQ H[WHQW WKDW >LW@ %RDUG VHHNLQJ FHUWLILFDWLRQ DV WKH UHSUHVHQWDWLYH RI WKH PDWHULDOO\DIIHFWHGWKHUHVXOWVRIWKHHOHFWLRQl,GDW  SURGXFWLRQDQGPDLQWHQDQFHHPSOR\HHVDWWKH&DQWRQIDFLOLW\ VHH DOVR /HVOLH +DXOHUV ,QF Y 1/5% 1RV   $IWHUWKHSDUWLHVDJUHHGRQWKHWHUPVRIDQHOHFWLRQWKH%RDUG       :/   DW  WK &LU FRQGXFWHGDVHFUHWEDOORWHOHFWLRQRQ0DUFK 7KH 1RY   XQSXEOLVKHGWDEOH  ILQGLQJWKDW&ROTXHVWVHWV 8QLRQORVWWKHHOHFWLRQE\RQHYRWHZLWKWZHQW\HPSOR\HHV DmKLJKVWDQGDUGlIRURYHUWXUQLQJDQHOHFWLRQ   ,Q &ROTXHVW ZH IRXQG WKH HPSOR\HU IDLOHG WRUDLVH VXEVWDQWLDOLVVXHVVXIILFLHQWWRZDUUDQWDKHDULQJRUWRRYHUWXUQ  1/5% &DVH 5&  1/5%Y9 66FKXOHU(QJLQHHULQJ 1R 1R 1/5%Y9 66FKXOHU(QJLQHHULQJ 

YRWLQJ DJDLQVW XQLRQ UHSUHVHQWDWLRQ DQG QLQHWHHQ YRWLQJ LQ EHHQDIIHFWHG,QUHMHFWLQJWKDW&RPSDQ\j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jV WHQGHQF\ WR PLVOHDG OLWHUDWXUH RQ WKH HPSOR\HH EXOOHWLQ ERDUG DQG E\ WKH HPSOR\HHVLQWREHOLHYLQJWKDWWKH%RDUGIDYRUVDSDUWLFXODU &RPSDQ\jV 3UHVLGHQW VROLFLWLQJ JULHYDQFHV WR GLVFRXUDJH SDUW\XVLQJDQREMHFWLYHVWDQGDUG6HH1/5%Y'LFNLQVRQ VXSSRUWIRUWKH8QLRQ 3UHVV,QF)G WK&LU   UHIXVLQJWRUHO\ RQVXEMHFWLYHHYLGHQFHRIXQLRQPLVFRQGXFW ,QUXOLQJRQWKH  $IWHU DIIRUGLQJ D KHDULQJ RQ WKH REMHFWLRQV WKH%RDUG &RPSDQ\jVREMHFWLRQVWRWKHVHFRQGHOHFWLRQWKH%RDUGKDG UHMHFWHG WKH 8QLRQjV FKDOOHQJH WR FHUWDLQ EDOORWV DQG WKHDOWHUHGEDOORWDYDLODEOHWRLWDQGZDVDEOHWRGHFLGHLIWKH VXUYHLOODQFH KDUDVVPHQW DQG GLVFULPLQDWLRQ FODLPV  ,Q D EDOORWVXJJHVWHG%RDUGVXSSRUWIRUWKH8QLRQ sXO\     GHFLVLRQ WKH %RDUG KRZHYHU VHW DVLGH WKH HOHFWLRQ DQG RUGHUHG D QHZ YRWH EHFDXVH WKH &RPSDQ\ /LNHRXUGHFLVLRQLQ+XE3ODVWLFV,QFZHILQGQRUHDVRQ LPSURSHUO\ SURKLELWHG XQLRQ OLWHUDWXUH RQ WKH HPSOR\HH WR XSVHW WKH %RDUGj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j REVHUYHU DIWHU VWDWLQJ WKDW WKH EDOORW SURFHGXUHV ZHUH QRW ULJKWV  $IWHU UHYLHZLQJ WKH &RPSDQ\jV REMHFWLRQV WKH VHFUHW7KH8QLRQVXSSRUWHUPDGHWKLVGLVSOD\ZKLOHWZRRU 5HJLRQDO 'LUHFWRU UHFRPPHQGHG RYHUUXOLQJ WKH REMHFWLRQV WKUHHHPSOR\HHVZHUHSUHVHQWLQWKHYRWLQJDUHD7KH%RDUG ZLWKRXWDKHDULQJDQGFHUWLI\LQJWKH8QLRQWRUHSUHVHQWWKH IRXQGWKDW*DUGQHUmZDVQRWDFWLQJDVDQDJHQWRIWKH8QLRQl EDUJDLQLQJXQLW 7KH%RDUGUDUHO\RYHUWXUQVWKHUHVXOWVRIDUHSUHVHQWDWLRQ HOHFWLRQEHFDXVHRIPLVFRQGXFWQRWDWWULEXWDEOHWRDSDUW\WR  WKHHOHFWLRQ7KH%RDUGZLOORYHUWXUQDQHOHFWLRQEDVHGXSRQ 2Q $XJXVW  WKH &RPSDQ\ ILOHG D PRWLRQ IRU UHFRQVLGHUDWLRQ %RDUG GHQLHG WKH PRWLRQ RQ 6HSWHPEHU    7KH WKHPLVFRQGXFWRIWKLUGSDUWLHVRQO\LIWKDWmPLVFRQGXFWZDV VRDJJUDYDWHGDVWRFUHDWHDJHQHUDODWPRVSKHUHRIIHDUDQG  7ZR EDOORWV ZHUH FKDOOHQJHG D QXPEHU LQVXIILFLHQW WR DIIHFW WKH UHSULVDO UHQGHULQJ D IUHH HOHFWLRQ LPSRVVLEOHl :HVWZRRG RXWFRPH +RUL]RQV+RWHO1/5%   'HWURLW$XWR  1/5%Y9 66FKXOHU(QJLQHHULQJ 1R 1R 1/5%Y9 66FKXOHU(QJLQHHULQJ 

LQWR EHOLHYLQJ WKDW WKH %RDUG KDG WDNHQ D SRVLWLRQ RQ WKH  7KH &RPSDQ\ H[FHSWHG WR WKH 5HJLRQDO'LUHFWRUjV HOHFWLRQ UHFRPPHQGDWLRQ  2Q 'HFHPEHU    WKH %RDUG RYHUUXOHGWKH&RPSDQ\jVREMHFWLRQVWRWKHVHFRQGHOHFWLRQ  ,QWKHLQVWDQWFDVHLWLVFOHDUWKDWWKHGRFXPHQWGLGQRW DQG FHUWLILHG WKH 8QLRQ DV WKH HPSOR\HHVj FROOHFWLYH PLVOHDGHPSOR\HHVLQWREHOLHYLQJWKDWWKH%RDUGIDYRUHG EDUJDLQLQJUHSUHVHQWDWLYH WKH8QLRQ7KXVWKHGRFXPHQWLQGLVSXWHZDVFOHDUO\QRW D%RDUG1RWLFHDVWKHLQFRPSOHWHODQJXDJHGHPRQVWUDWHV  $IWHU EHLQJ FHUWLILHG DV WKH UHSUHVHQWDWLYH IRUFROOHFWLYH DWWKHWRSDQGERWWRP EDUJDLQLQJSXUSRVHVWKH8QLRQVROLFLWHGQHJRWLDWLRQVZLWKWKH &RPSDQ\ UHJDUGLQJ WHUPV DQG FRQGLWLRQV RI HPSOR\PHQW 6XSSOHPHQWDO5HSRUWRQ2EMHFWLRQVsRLQW$SSHQGL[ 7KH &RPSDQ\ UHIXVHG WR QHJRWLDWH DQG WKH 8QLRQ ILOHG DQ XQIDLUODERUSUDFWLFHFKDUJH7KH%RDUGjV5HJLRQDO'LUHFWRU  ,QILQGLQJWKDWWKHDOWHUHGHOHFWLRQQRWLFHKDGQRWHQGHQF\ LVVXHG D FRPSODLQW DOOHJLQJ WKDW WKH &RPSDQ\ UHIXVHG WR WR DIIHFW  WKH HOHFWLRQ WKH %RDUG HPSKDVL]HG D QXPEHU RI EDUJDLQ DQG SURYLGH UHTXHVWHG LQIRUPDWLRQ LQ YLRODWLRQ RI PDWWHUV)LUVWWKH%RDUGIRXQGWKDWUHDGHUVZRXOGNQRZWKH 6HFWLRQ D  DQG  RIWKH$FW  86&† D  DQG DOWHUHG HOHFWLRQ QRWLFH ZDV QRW D %RDUG GRFXPHQW EHFDXVH    7KH &RPSDQ\ DGPLWWHG LWV UHIXVDO WR EDUJDLQ DQG RQO\DSDUWRIWKHGRFXPHQWZDVSRVWHG(OHFWRUVZRXOGNQRZ SURYLGHLQIRUPDWLRQEXWGHIHQGHGDJDLQVWWKHFRPSODLQWRQ WKDWWKH%RDUGZRXOGQRWSRVWSDUWLDOQRWLFHVHVSHFLDOO\JLYHQ WKHJURXQGWKDWWKH8QLRQZDVLPSURSHUO\FHUWLILHG WKDWmWKHHPSOR\HHVKHUHKDGDOUHDG\EHHQLQYROYHGLQRQH HOHFWLRQDQGFRXOGVHHWKHSDUWLDO1RWLFHIRUZKDWLWZDV  5HMHFWLQJWKLVGHIHQVHWKH%RDUGIRXQGWKH&RPSDQ\KDG SUR8QLRQ JUDIILWLl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jV SUHHOHFWLRQ  :H H[DPLQHG D VLPLODU IDFWXDO VHWWLQJ LQ 1/5% Y+XE PLVFRQGXFW  6HFRQG 6FKXOHU (QJLQHHULQJ VD\V WKH %RDUG 3ODVWLFV,QF)G WK&LU  7KHUHWZR1/5% VDPSOHEDOORWVZHUHGHIDFHGWRLQGLFDWHVXSSRUWIRUWKH8QLRQ $IWHUDQmH[WUHPHO\FORVHlHOHFWLRQWKH&RPSDQ\FKDOOHQJHG  WKH UHVXOWV DUJXLQJ WKDW WKH VDPSOH EDOORW GHIDFHPHQW &RXUWV FDQQRW GLUHFWO\ UHYLHZ UHSUHVHQWDWLRQ SURFHHGLQJV 6HH $P

LQWHUIHUHGZLWKHPSOR\HHULJKWVDQGZDUUDQWHGDQHZHOHFWLRQ )HG Q RI /DERU Y 1/5%  86     $Q HPSOR\HU VHHNLQJ 7KH5HJLRQDO'LUHFWRURYHUUXOHGWKH&RPSDQ\jVREMHFWLRQV MXGLFLDO UHYLHZ RI HOHFWLRQ LVVXHV PXVW UHIXVH WR EDUJDLQ ZLWK WKH YLFWRULRXV XQLRQ 7KH YDOLGLW\ RI WKH HOHFWLRQ FDQ WKHQ EH FKDOOHQJHG LQ WKH ZLWKRXW D KHDULQJ  ,G DW   :H UHMHFWHG WKDW HQVXLQJ XQIDLU ODERU SUDFWLFH SURFHHGLQJ ,G VHH DOVR 7ZLQ &LW\ +RVS &RPSDQ\jV DUJXPHQW WKDW WKH IDLUQHVV RI WKH HOHFWLRQ KDG &RUS Y 1/5%  )G   WK &LU     1/5%Y9 66FKXOHU(QJLQHHULQJ 1R 1R 1/5%Y9 66FKXOHU(QJLQHHULQJ 

HUUHG ZKHQ LW UHMHFWHG ZLWKRXW KHDULQJ WKH &RPSDQ\jV ,GDW,IWKHVRXUFHRIWKHDOWHUDWLRQLVFOHDUWKHQWKH REMHFWLRQVWRWKHVHFRQGHOHFWLRQDQHOHFWLRQWKH&RPSDQ\ HOHFWLRQ VWDQGV EHFDXVH WKH HPSOR\HH ZLOO NQRZ mWKDW WKH ORVWE\DZLGH PDUJLQZLWKWZRWKLUGVRIYRWHUVDVNLQJIRU GRFXPHQWLVSURSDJDQGDDQGZLOOWUHDWLWDFFRUGLQJO\l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jV GLVFUHWLRQDQGZKHWKHUWKH%RDUG VILQGLQJVDUHUHDVRQDEOH QRWLFH7KHSRVWLQJFRQWDLQHGDKDQGZULWWHQm;lPDUNHGLQ 5DQGDOO%XUNDUW5DQGDOO'LYRI7H[WURQ,QFY1/5% WKHER[XVHGWRYRWHIRUWKH8QLRQDQGWKDWER[ZDVFLUFOHG )G    WK&LU  7KH%RDUG VILQGLQJVRIIDFW ,WGLGQRWLQFOXGH%RDUGUXOHVDQGUHJXODWLRQV,QUHTXHVWLQJ DUH FRQFOXVLYH LI VXSSRUWHG E\ VXEVWDQWLDO HYLGHQFH  7KH D QHZ HOHFWLRQ WKH &RPSDQ\ JDYH QR VSHFLILF HYLGHQFH m%RDUG V UHDVRQDEOH LQIHUHQFHV PD\ QRW EH GLVSODFHG RQ GHVFULELQJWKHFLUFXPVWDQFHVRIWKHSRVWLQJRUWKHGDWHWKH UHYLHZHYHQWKRXJKWKHFRXUWPLJKWMXVWLILDEO\KDYHUHDFKHG SRVWLQJWRRNSODFH DGLIIHUHQWFRQFOXVLRQKDGWKHPDWWHUEHHQEHIRUHLWGHQRYRl 1/5%Y6W)UDQFLV+HDOWKFDUH&HQWUH)G    ,QDVPXFKDVWKHSRVWLQJZDVDQRQ\PRXVZHFRQVLGHU WK&LU (YLGHQFHLVVXEVWDQWLDOZKHQLWLVmDGHTXDWH ZKHWKHULWKDGDWHQDQF\WRPLVOHDGHPSOR\HHVLQWREHOLHYLQJ LQDUHDVRQDEOHPLQGWRXSKROGWKH>%RDUG V@GHFLVLRQl,G WKDWWKH%RDUGIDYRUHGWKH8QLRQ5HYLHZLQJWKLVTXHVWLRQ DW   TXRWLQJ'75,QGXV,QFY1/5% )G WKH%RDUGIRXQGWKHSRVWLQJFRXOGQRWKDYHPLVOHDGYRWHUV  WK&LU    7RGHFLGHZKHWKHUWKH%RDUGKDVDEXVHGLWVGLVFUHWLRQZH GHWHUPLQHZKHWKHULWVRUGHUVKDYHDmUHDVRQDEOHEDVLVLQODZl  6HHNLQJ D QHZ HOHFWLRQ RQ WKH JURXQG RI WKH DOWHUHG QRWLFH WKH 3DQQLHU&RUS*UDSKLFV'LYY1/5%)G &RPSDQ\ UHOLHG XSRQ WKH DIILGDYLW RI *HRUJH &RRN ,Q KLV DIILGDYLW &RRN WK &LU    TXRWLQJ 9DQ 'RUQ 3ODVWLF 0DFK &R Y WHVWLILHG

1/5%)G WK&LU  %RDUGRUGHUVKDYH QRUHDVRQDEOHEDVLVLQODZmHLWKHUEHFDXVHWKHSURSHUOHJDO m,Q DGGLWLRQ RQH RI WKH SRVWLQJV ZDV GHIDFHG 6SHFLILFDOO\ WKH

VWDQGDUGZDVQRWDSSOLHGRUEHFDXVHWKH%RDUGDSSOLHGWKH 1RWLFH ZDV PDUNHG ZLWK DQ m;l LQ WKH FKRLFH RI 8QLRQ

FRUUHFWVWDQGDUGEXWIDLOHGWRJLYHWKHSODLQODQJXDJHRIWKH UHSUHVHQWDWLRQ DQG WKH ER[ ZLWK WKH m;l ZDV FLUFOHG VR DV WR PDNH WKH VHOHFWLRQ REYLRXV WR WKH UHDGHU RI WKH 1RWLFHl VWDQGDUGLWVRUGLQDU\PHDQLQJl,G TXRWLQJ)RUG0RWRU&R Y1/5%86     sRLQW $SSHQGL[ 

  %RDUGjV5HYLHZRI2ULJLQDO(OHFWLRQ ,Q UXOLQJ XSRQ WKH &RPSDQ\jV REMHFWLRQV WR WKH VHFRQG HOHFWLRQ WKH %RDUGjV 5HJLRQDO 'LUHFWRU IRXQG m>W@KHUH LV QR HYLGHQFH DV WR ZKR SRVWHG

 2Q0DUFK WKH%RDUGKHOGDVHFUHWEDOORWHOHFWLRQ WKH GRFXPHQWV DSDUW IURP WKH (PSOR\HUjV DVVHUWLRQ WKDW WKH\ ZHUH CSUR

DW6FKXOHU(QJLQHHULQJ7KH8QLRQFKDOOHQJHGFHUWDLQEDOORWV 8QLRQ VXSSRUWHUV 7KHUH LV QR HYLGHQFH WKDW DQ DOWHUHG RU GHIDFHG 1RWLFH

DQGREMHFWHGWRWKHHOHFWLRQDUJXLQJWKDWWKH&RPSDQ\KDG RI (OHFWLRQ ZDV SRVWHG LQ WKH SROOLQJ SODFH GXULQJ WKH HOHFWLRQl

VXUYHLOOHG KDUDVVHG DQG GLVFULPLQDWHG DJDLQVW XQLRQ sRLQW $SSHQGL[   1/5%Y9 66FKXOHU(QJLQHHULQJ 1R 1R 1/5%Y9 66FKXOHU(QJLQHHULQJ 

DOWHUHGVDPSOHEDOORW6HFRQGWKH&RPSDQ\VDLGWKDWDXQLRQ VXSSRUWHUV  SURPXOJDWHG D UXOH SURKLELWLQJ WKH SRVWLQJ RI VXSSRUWHULPSURSHUO\FDPSDLJQHGLQWKHYRWLQJDUHD7KLUG XQLRQOLWHUDWXUHRQWKHHPSOR\HHEXOOHWLQERDUG DQGVROLFLWHG 6FKXOHU (QJLQHHULQJ FODLPHG WKDW D VXSHUYLVRU LPSURSHUO\ JULHYDQFHVWRGLVFRXUDJHVXSSRUWIRUWKH8QLRQ FDPSDLJQHGLQVXSSRUWRIWKH8QLRQ  $IWHU DQ LQYHVWLJDWLRQ WKH %RDUGjV 5HJLRQDO'LUHFWRU $IWHUFRQGXFWLQJDQLQYHVWLJDWLRQWKH5HJLRQDO'LUHFWRU RUGHUHGDKHDULQJRQWKH8QLRQjVREMHFWLRQWRWKHHOHFWLRQ UHFRPPHQGHG WKDW WKH %RDUG RYHUUXOH WKH &RPSDQ\jV $IWHU WKH 0D\    KHDULQJ WKH KHDULQJ RIILFHU REMHFWLRQVDQGFHUWLI\WKH8QLRQDVWKHUHSUHVHQWDWLYHRIWKH UHFRPPHQGHG UHMHFWLQJ WKH 8QLRQjV REMHFWLRQ EDVHG XSRQ HPSOR\HHV$IWHUUHFHLYLQJH[FHSWLRQVIURPWKH&RPSDQ\ VXUYHLOODQFH KDUDVVPHQW DQG GLVFULPLQDWLRQ EXW FRQFHUQLQJWKLVUHFRPPHQGDWLRQWKH%RDUGDJUHHGZLWKWKH UHFRPPHQGHGWKDWWKH%RDUGVHWDVLGHWKHHOHFWLRQEHFDXVH 5HJLRQDO'LUHFWRUjVUHFRPPHQGDWLRQDQGFHUWLILHGWKH8QLRQ WKH &RPSDQ\ VROLFLWHG JULHYDQFHV DQG SURKLELWHG XQLRQ DV WKH HPSOR\HHVj FROOHFWLYHEDUJDLQLQJ UHSUHVHQWDWLYH  ,Q OLWHUDWXUHRQWKHHPSOR\HHEXOOHWLQERDUG $IWHU &RPSDQ\ UXOLQJXSRQWKH&RPSDQ\jVREMHFWLRQVWKH%RDUGGHQLHGWKH H[FHSWLRQV WR WKH UHFRPPHQGDWLRQ ZHUH GHQLHG WKH %RDUG &RPSDQ\jVUHTXHVWVIRUDKHDULQJ7KH&RPSDQ\FRQWHQGV DGRSWHGWKHKHDULQJRIILFHUj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mWKH EXUGHQ RI VKRZLQJ WKDW WKH HPSOR\HHVZHUHOLNHO\PLVOHGWREHOLHYHWKDWWKH%RDUGLWVHOI HOHFWLRQ ZDV QRW FRQGXFWHG IDLUO\l  1/5% Y 6XSHULRU WRRNDSRVLWLRQLQWKHHOHFWLRQ$VGHVFULEHGLQ6'&,QY &RDWLQJV,QF )G WK&LU  7RPDNH ,QF WKLV VKRZLQJ WKH 8QLRQ PXVW GHPRQVWUDWH WKDW mXQODZIXO FRQGXFWRFFXUUHGZKLFKLQWHUIHUHGZLWKHPSOR\HHV H[HUFLVH >:@HEHOLHYHWKDWWKHFUXFLDOTXHVWLRQVKRXOGEHZKHWKHU RIIUHHFKRLFHWRVXFKDQH[WHQWWKDWLWPDWHULDOO\DIIHFWHGWKH WKHDOWHUHGEDOORWLQLVVXHLVOLNHO\WRKDYHJLYHQYRWHUV UHVXOWRIWKHHOHFWLRQl1/5%Y6KUDGHU V,QF )G  WKHPLVOHDGLQJLPSUHVVLRQWKDWWKH%RDUGIDYRUHGRQHRI   WK&LU   WKHSDUWLHVWRWKHHOHFWLRQ:KHQLWLVHYLGHQWWKDWWKH DOWHUHG EDOORW LV WKH ZRUN RI D SDUW\ UDWKHU WKDQ WKH  7KH%RDUGH[HUFLVHVSULPDU\UHVSRQVLELOLW\LQFRQWUROOLQJ %RDUG HPSOR\HHV DUH SHUIHFWO\ FDSDEOH RI MXGJLQJ LWV FHUWLILFDWLRQHOHFWLRQV,QGRLQJWKLVWKHm%RDUGKDVEURDG SHUVXDVLYHYDOXH GLVFUHWLRQ WR GHWHUPLQH ZKHWKHU WKH FLUFXPVWDQFHV RI DQ HOHFWLRQKDYHDOORZHGWKHHPSOR\HHVWRH[HUFLVHIUHHFKRLFH 1/5%    LQGHFLGLQJZKHWKHUWREHUHSUHVHQWHGE\DXQLRQl1/5%Y 'XULURQ&R,QF )G WK&LU    ,Q1/5%Y+XE3ODVWLFV,QF)G WK&LU   ZHKHOGWKDWZKHQUHYLHZLQJDOWHUHGEDOORWVRQDQRWLFHZH  :KHQ SUHHOHFWLRQ FRQGXFW LV FODLPHG WR KDYH PDGHD ILUVWORRNWRZKHWKHUWKHVRXUFHRIWKHDOWHUDWLRQLVDSSDUHQW UHSUHVHQWDWLRQHOHFWLRQXQIDLUWKHSDUW\VHHNLQJWRRYHUWXUQ 7KHSULQFLSDOFRQVLGHUDWLRQLVmZKHWKHUWKHDOWHUHGGRFXPHQW WKH HOHFWLRQ PXVW VKRZ WKDW XQODZIXO DFWV LQWHUIHUHG ZLWK RQLWVIDFHLGHQWLILHVWKHSDUW\UHVSRQVLEOHIRULWVSUHSDUDWLRQl HPSOR\HHVjIUHHFKRLFHDQGVLJQLILFDQWO\DIIHFWHGWKHHOHFWLRQ  1/5%Y9 66FKXOHU(QJLQHHULQJ 1R 1R 1/5%Y9 66FKXOHU(QJLQHHULQJ 

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j8VHRIWKH%XOOHWLQ%RDUG KHOG  6FKXOHU(QJLQHHULQJKDGORQJPDLQWDLQHGDEXOOHWLQERDUG  $ KHDULQJ LV QRW UHTXLUHG ZKHQ DOO WKH FODLPV RIWKH LQWKHWLPHFORFNDUHDIRULWVH[FOXVLYHXVH,QODWH WKH REMHFWLQJSDUW\LIDFFHSWHGDVWUXHZRXOGQRWZDUUDQWVHWWLQJ &RPSDQ\LQVWDOOHGDVHFRQGEXOOHWLQERDUGLQWKHHPSOR\HHVj DVLGHWKHHOHFWLRQ1/5%Y6PLWK,QGXV,QF)G  OXQFKURRPIRUH[FOXVLYHXVHE\HPSOR\HHV(PSOR\HHVXVHG   WK &LU     $ KHDULQJ LQ D SRVWHOHFWLRQ WKH  EXOOHWLQ ERDUG  WR SODFH QRWLFHV RI FDU VDOHV FKXUFK UHSUHVHQWDWLRQSURFHHGLQJLVXQQHFHVVDU\ZKHUHLIDOOIDFWV QRWLFHVDQGRWKHULQIRUPDOSRVWLQJV([SODLQLQJWKHOLPLWVRQ FRQWHQGHGIRUE\WKHREMHFWLQJSDUW\ZHUHFUHGLWHGQRJURXQG SRVWLQJVRQWKHHPSOR\HHERDUGWKH&RPSDQ\YLFHSUHVLGHQW ZRXOG EH VKRZQ ZKLFK ZRXOG ZDUUDQW VHWWLQJ DVLGH WKH RIRSHUDWLRQVVDLGmWKHRQO\UHVWULFWLRQRQSRVWLQJVZDVWKDW HOHFWLRQ &)5† F  WKH\FRXOGQRWEHREVFHQHl 7KH%RDUGFRQGXFWHGWKHVHFRQGHOHFWLRQRQ6HSWHPEHU  $IWHUWKH8QLRQjVUHSUHVHQWDWLRQFDPSDLJQWKH&RPSDQ\  ,QWKDWHOHFWLRQWKHHPSOR\HHVYRWHGLQIDYRURIXQLRQ SRVWHG OLWHUDWXUH RQ LWV ERDUG H[SUHVVLQJ RSSRVLWLRQ WR WKH UHSUHVHQWDWLRQ E\ D WZHQW\RQH WR IRXUWHHQ PDUJLQ 7KH 8QLRQ RUJDQL]LQJ FDPSDLJQ  ,Q DGGLWLRQ WR H[SUHVVLQJ &RPSDQ\ ILOHG WKUHH REMHFWLRQV WR WKH HOHFWLRQ  )LUVW WKH RSSRVLWLRQ WR WKH 8QLRQjV FDPSDLJQ WKH &RPSDQ\ EHJDQ &RPSDQ\DOOHJHGWKDWWKH8QLRQLPSURSHUO\GLVVHPLQDWHGDQ UHVWULFWLQJ IRU WKH ILUVW WLPH SRVWLQJV RQ WKH HPSOR\HH EXOOHWLQERDUGDQGEHJDQVWRSSLQJWKHSRVWLQJRISURXQLRQ PDWHULDOV  $OVR IRU  WKH ILUVW WLPH WKH &RPSDQ\ EHJDQ  UHTXLULQJ &RPSDQ\ DSSURYDO EHIRUH HPSOR\HHV FRXOG SRVW  &)5 †  G

PDWHULDOVRQWKHHPSOR\HHERDUG ,Q LVVXLQJ D UHSRUW RQ REMHFWLRQV RU FKDOOHQJHG EDOORWV RU ERWK

 ,Q 0DUFK   DQ HPSOR\HH SRVWHG D OHWWHU ZLWKD IROORZLQJ SURFHHGLQJV XQGHU ††  E RU  RU LQ

mVRPHZKDW DQWLXQLRQ    WRQHl RQ WKH HPSOR\HH EXOOHWLQ LVVXLQJ D GHFLVLRQ RQ REMHFWLRQV RU FKDOOHQJHG EDOORWV RU ERWK

IROORZLQJ SURFHHGLQJV XQGHU †  WKH UHJLRQDO GLUHFWRU PD\

ERDUG  9LFHSUHVLGHQW 6KDKHHQ mGHWHUPLQHG WKDW DOO DFW RQ WKH EDVLV RI DQ DGPLQLVWUDWLYH LQYHVWLJDWLRQ RU XSRQ WKH

HPSOR\HHV VKRXOG UHDG LWl DQG SODFHG WKH OHWWHU RQ WKH UHFRUG RI D KHDULQJ EHIRUH D KHDULQJ RIILFHU 6XFK KHDULQJ VKDOO

&RPSDQ\jVEXOOHWLQERDUG$WWKHVDPHWLPHWKH&RPSDQ\ EH FRQGXFWHG ZLWK UHVSHFW WR WKRVH REMHFWLRQV RU FKDOOHQJHV

SURKLELWHG WKH SRVWLQJV RI SURXQLRQ PDWHULDOV RQ WKH ZKLFK WKH UHJLRQDO GLUHFWRU FRQFOXGHV UDLVH VXEVWDQWLDO DQG

HPSOR\HHEXOOHWLQERDUG PDWHULDO IDFWXDO LVVXHV

 ,Q WKH VHFRQG HOHFWLRQ  EDOORWV ZHUH FKDOOHQJHG D QXPEHU

LQVXIILFLHQW WR DIIHFW WKH RXWFRPH  1/5%Y9 66FKXOHU(QJLQHHULQJ 1R 1R 1/5%Y9 66FKXOHU(QJLQHHULQJ

 :HGRQRWGLVWXUE%RDUGILQGLQJVDVWRZKHWKHUDQHOHFWLRQ  *HQHUDOO\ DQ HPSOR\HU PD\ QRW UHVWULFWFRPPXQLFDWLRQ UHIOHFWHG WKH mIUHH DQG IDLU FKRLFHl RI HPSOR\HHV ZKHUH DPRQJ HPSOR\HHV UHJDUGLQJ UHSUHVHQWDWLRQ RU VHOI VXEVWDQWLDO HYLGHQFH VXSSRUWV WKH %RDUGjV FRQFOXVLRQV RUJDQL]DWLRQ LVVXHV H[FHSW ZKHQ VXFK mD UHVWULFWLRQ LV &RQWHFK'LY63;&RUSY1/5%)G  WK QHFHVVDU\ WR PDLQWDLQ SURGXFWLRQ RU GLVFLSOLQHl  1/5% Y &LU   FLWLQJ1/5%Y'LFNLQVRQ3UHVV,QF)G &KDOOHQJH&RRN %URV ,QF  )G   WK &LU  WK&LU  7KH%RDUGKDGVXEVWDQWLDOHYLGHQFH   VHHDOVR1/5%Y%DEFRFN :LOFR[&R86 VXSSRUWLQJLWVRUGHURIDQHZHOHFWLRQ:HGHFOLQHWRUHYHUVH     WKH%RDUGjVFRQFOXVLRQVLQWKLVDUHDFRPPLWWHGWRWKH%RDUGjV H[SHUWLVH  7KHULJKWRIVHOIRUJDQL]DWLRQLQFOXGHVWKHULJKWWRXVHWKH FRPSDQ\EXOOHWLQERDUGIRUXQLRQQRWLFHVLIWKHEXOOHWLQERDUG &RPSDQ\2EMHFWLRQVWRWKH6HFRQG(OHFWLRQ KDVEHHQXVHGIRURWKHUQRWLFHVZLWKRXWDQ\UHTXLUHGDGYDQFH DXWKRUL]DWLRQ  *UHHQ *LDQW &R  1/5%     $V WR 6FKXOHU (QJLQHHULQJjV FODLP WKDW WKH %RDUGHUUHG 1/5%Y&KDOOHQJH&RRN%URVRI2KLR,QF)G ZKHQ LW UHIXVHG WR FRQGXFW DQ HYLGHQWLDU\ KHDULQJ RQ WKH WK&LU  $QHPSOR\HUFDQQRWGLVFULPLQDWHDJDLQVWWKH &RPSDQ\jV REMHFWLRQV WR WKH VHFRQG HOHFWLRQ ZH PDNH D SRVWLQJ RI HPSOR\HH VXSSRUW IRU RUJDQL]DWLRQ XQOHVV WKH OLPLWHG UHYLHZ  7KH 1/5% KDV EURDG GLVFUHWLRQ LQ SRVWLQJ LQWHUIHUHV ZLWK SURGXFWLRQ RU GLVFLSOLQH  8QLRQ HVWDEOLVKLQJDQGDGPLQLVWHULQJUHSUHVHQWDWLRQHOHFWLRQUXOHV &DUELGH &RUS Y 1/5%  )G   WK &LU DQGLQUHVROYLQJUHSUHVHQWDWLRQGLVSXWHV1/5%Y6KUDGHU V   VHHDOVR5RDGZD\([SUHVV,QFY1/5%)G ,QF )G   WK&LU   FLWLQJ1/5%Y+\DWW   WK&LU   +RWHOV ,QF  )G    WK &LU    1/5% Y %DVLF:LUH3URGV,QF)G WK&LU    :KLOHUHFRJQL]LQJWKDW6L[WK&LUFXLWDXWKRULW\KROGVWKDW ZKHUHDSROLF\mSHUPLWVHPSOR\HHDFFHVVWREXOOHWLQERDUGV  :HUHYLHZWKHFODLPXVLQJDQDEXVHRIGLVFUHWLRQVWDQGDUG IRUDQ\SXUSRVH6HFWLRQRIWKH$FW 86&6HFWLRQ &ROTXHVW(QHUJ\ )GDW 7RVKRZWKDWWKH%RDUG VHFXUHVWKHHPSOR\HHV ULJKWWRSRVWXQLRQPDWHULDOVl8QLRQ DEXVHGLWVGLVFUHWLRQWKH&RPSDQ\PXVWVKRZWKH XQLRQjV &DUELGH &RUS Y 1/5%  )G   WK &LU SUHHOHFWLRQ FRQGXFW XQGXO\ LQIOXHQFHG WKH UHVXOWV RI DQ   6FKXOHU(QJLQHHULQJDUJXHVWKDWWKH%RDUGFKDQJHG HOHFWLRQ E\ LQWHUIHULQJ ZLWK mHPSOR\HHV  H[HUFLVH RI IUHH WKLVDXWKRULW\LQ&DWHUSLOODU,QF1/5%    FKRLFHWRVXFKDQH[WHQWWKDWLWPDWHULDOO\DIIHFWHGWKHUHVXOW RIWKHHOHFWLRQl&RPFDVW)GDW  FLWLQJ1/5%Y  ,Q &DWHUSLOODU WKH %RDUG DGRSWHG DQ DGPLQLVWUDWLYHODZ 7HQQ3DFNHUV,QF )G WK&LU   MXGJHjVILQGLQJWKDWWKHHPSOR\HUYLRODWHGHPSOR\HHULJKWV XQGHU6HFWLRQ D  RIWKH$FW  86&†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

SRVWLQJDQ\WKLQJWKDWUHTXLUHVPRUHWKDQDIHZVHFRQGV WRH[HUFLVHIUHHFKRLFHLQGHFLGLQJZKHWKHUWREHUHSUHVHQWHG WRUHDGDQGDQ\PDWHULDOVHVSRXVLQJSDUWLFXODUSRLQWVRI E\DXQLRQl6HH&RQWHFK'LYY1/5%)G  YLHZ  WK&LU   TXRWLQJ1/5%Y'XULURQ&R )G   WK &LU     7KH %RDUG V ILQGLQJV ZLWK ,GDW+RZHYHUDVWKHDGPLQLVWUDWLYHODZMXGJHVWDWHG UHVSHFW WR ZKHWKHU DQ HOHFWLRQ UHIOHFWHG WKH IUHH DQG IDLU WKHHPSOR\HULQ&DWHUSLOODUKDGQRVXFKmVKRUWHQRXJKWREH FKRLFH  RI WKH HPSOR\HHV ZLOO QRW EH GLVWXUEHG RQ DSSHDO TXLFNO\ UHDGl UXOH  7KH DGPLQLVWUDWLYH ODZ MXGJHjV ZKHUH WKHUH LV VXEVWDQWLDO HYLGHQFH    WR VXSSRUW LWV LPSUHVVLRQVDUHQRWWKHKROGLQJRIWKHFDVHEXWDUHGLFWD$QG FRQFOXVLRQV1/5%Y'LFNLQVRQ3UHVV,QF)G DV GLFWD WKH\ GR QRW HVWDEOLVK D %RDUG UXOH DQG DUH QRW  WK&LU   TXRWLQJ0LWFKHOODFH,QFY1/5%  VXIILFLHQWSUHFHGHQWWRVZD\WKLV&RXUW )G WK&LU  m6XEVWDQWLDOHYLGHQFHlLV mVXFKUHOHYDQWHYLGHQFHDVDUHDVRQDEOHPLQGPLJKWDFFHSWDV  %XWPRUHLPSRUWDQWWKH&RPSDQ\LQLWVGLVFXVVLRQRQWKH DGHTXDWH WR VXSSRUW D FRQFOXVLRQl  &RQVRO (GLVRQ &R Y PDWWHUFRPSOHWHO\LJQRUHVFOHDU%RDUGSUHFHGHQWDQGFOHDU 1/5%86      SUHFHGHQW RI WKLV &LUFXLW  )RU H[DPSOH LQ :DVWH 0DQDJHPHQW,QF1/5%1R :/ DW  7KH%RDUGIRXQGWKH&RPSDQ\jVVROLFLWDWLRQRIJULHYDQFHV

 )HE WKH%RDUGDGRSWHGDQDGPLQLVWUDWLYHODZ DQGUHIXVDOWRDOORZSRVWLQJRISURXQLRQOLWHUDWXUHLQWHUIHUHG MXGJHjVUHDVRQLQJWKDW ZLWKWKHUHVXOWVRIWKHHOHFWLRQ7KH%RDUGKDGVXSSRUWIRU WKLVILQGLQJ  ,WKDVORQJEHHQKHOGWKDWDQHPSOR\HUYLRODWHVWKH$FW LILWSURKLELWVWKHSRVWLQJRIPDWHULDOUHODWLQJWRDQGLQ  )LUVW6FKXOHU(QJLQHHULQJjVXQODZIXODFWVWRRNSODFHLQD WKHFRXUVHRIFRQFHUWHGDFWLYLW\RILWVHPSOR\HHVZKLOH YHU\ FORVH HOHFWLRQ  $ VLQJOH YRWH GHFLGHG WKH RXWFRPH KDYLQJ SUHYLRXVO\ DOORZHG WKH SRVWLQJ RI RWKHU *LYHQWKHH[WUHPHFORVHQHVVRIWKHHOHFWLRQWKH&RPSDQ\jV PLVFHOODQHRXV PDWWHUV E\ WKH HPSOR\HHV  7KH PLVFRQGXFWFDQWDLQWWKHHOHFWLRQUHVXOWHDVLHU6HH&ROTXHVW (PSOR\HU VPRWLYDWLRQLQWKLVUHJDUGQRPDWWHUKRZ (QHUJ\ ,QF Y 1/5%  )G   WK &LU   ZHOOPHDQWLVLUUHOHYDQW,WLVDOVRLUUHOHYDQWDVWRKRZ ILQGLQJ WKDW FORVHQHVV LQ HOHFWLRQ UHVXOWV LV DQ LPSRUWDQW WKH (PSOR\HU WUHDWV DQWLXQLRQ OLWHUDWXUH RQFH LW LV FRQVLGHUDWLRQ 1/5%Y0U3RUWR,QF )G HVWDEOLVKHG WKDW RWKHU HPSOR\HH QRWLFHV DUH WUHDWHG WK&LU   m>$@FORVHHOHFWLRQLVDIDFWRUZKLFKGHPDQGV GLVSDUDWHO\IURPSURXQLRQQRWLFHV WKDWHYHQPLQRULQIUDFWLRQVEHVFUXWLQL]HGFDUHIXOO\l  FLWDWLRQV RPLWWHG   7R OLNH HIIHFW WKH %RDUG LQ %HQWHOHU  6HFRQGWKH&RPSDQ\HQJDJHGLQWKHXQODZIXODFWLRQVRQ ,QGXV,QF1/5%   HQIRUFHGPHP WKHGRRUVWHSRIWKHHOHFWLRQ1LHKDXVVROLFLWHGJULHYDQFHVLQ )G  WK &LU    IRXQG WKDW ZKHQ DQ HPSOR\HU H[FKDQJHIRUDmQRYRWHlRQO\ILYHGD\VEHIRUHWKHHOHFWLRQ DOORZV WKH XVH RI HPSOR\HH EXOOHWLQ ERDUGV IRU SHUVRQDO 7KHWHPSRUDOSUR[LPLW\WRWKHHOHFWLRQVXSSRUWVWKH%RDUGjV PDWWHUVWKHHPSOR\HUPD\QRWWKHUHDIWHUVWRSWKHSRVWLQJRI ILQGLQJ WKDW WKH &RPSDQ\ LPSURSHUO\ LQWHUIHUHG ZLWK XQLRQIO\HUV HPSOR\HHVj IUHH FKRLFH  7KH &RPSDQ\jV SROLF\ FKDQJH UHJDUGLQJWKHEXOOHWLQERDUGDOVRFDPHQHDUWKHHOHFWLRQ6HH &RQWHFK 'LY Y 1/5%  )G     WK &LU    7RUELWW &DVWOHPDQ,QFY1/5%)G   ,Q %HQWOHU WKH %RDUG GHVFULEHG WKLV UXOH WK&LU   m>(@YHQDVPDOOEHQHILW>JUDQWHG@GXULQJWKH %RDUG ODZ LV ZHOO HVWDEOLVKHG WKDW WKHUH LV QR VWDWXWRU\ ULJKW RI FULWLFDOSHULRGPD\EHDFWLRQDEOHl  HPSOR\HHV RU D XQLRQ WR XVH DQ HPSOR\HU V EXOOHWLQ ERDUG  1/5%Y9 66FKXOHU(QJLQHHULQJ 1R 1R 1/5%Y9 66FKXOHU(QJLQHHULQJ 

LQTXLULHVDQGOLNHZLVHXUJLQJKLVHPSOR\HHVWKDWWKHFRPELQHG  6FKXOHU(QJLQHHULQJWKHUHIRUHYLRODWHG6HFWLRQ D  RI SURJUDP RI LQTXLU\ DQG FRUUHFWLRQ ZLOO PDNH XQLRQ WKH$FW 86&† D  ZKHQLWUHPRYHGHPSOR\HH UHSUHVHQWDWLRQXQQHFHVVDU\l2UELW/LJKWVSHHG&RXULHU6\V SRVWLQJV WKDW VXSSRUWHG WKH XQLRQ DQG ZKHQ LW UHIXVHG 1/5%     SHUPLVVLRQWRPDNHVLPLODUSRVWLQJV  :H UHYLHZ WKH %RDUGjV ILQGLQJV XQGHU DQ DEXVHRI 6ROLFLWDWLRQRI*ULHYDQFHVE\WKH&RPSDQ\3UHVLGHQW GLVFUHWLRQVWDQGDUG$QGZHPXVWJLYHWKH%RDUGOHHZD\LQ WKLVDUHDVSHFLDOO\FRPPLWWHGWRLWVH[SHUWLVHLILWVILQGLQJVDUH  ,QDGGLWLRQWRILQGLQJWKDWWKH&RPSDQ\YLRODWHGWKH$FWE\ UHDVRQDEOHDQGVXSSRUWHGE\VXEVWDQWLDOHYLGHQFH,QILQGLQJ LPSDLULQJHPSOR\HHVjDELOLW\WRFRPPXQLFDWHE\VWRSSLQJXVH WKDW WKH &RPSDQ\ YLRODWHG HPSOR\HH ULJKWV WKURXJK RI WKH HPSOR\HH EXOOHWLQ ERDUG WKH %RDUG IRXQG WKDW WKH VROLFLWDWLRQVWKH%RDUGKDGPRUHWKDQVXIILFLHQWHYLGHQFH &RPSDQ\ KDG YLRODWHG WKH $FW E\ VROLFLWLQJ HPSOR\HH JULHYDQFHVZLWKWKHLPSOLFDWLRQWKDWWKH\ZRXOGEHUHVROYHG %RDUGjV'HFLVLRQWR2UGHUD1HZ(OHFWLRQ LIWKHHPSOR\HHVWXUQHGWKHLUEDFNVRQXQLRQUHSUHVHQWDWLRQ 0DNLQJ D VRPHZKDW PRUH SODXVLEOH DUJXPHQW 6FKXOHU  ,Q UHVSRQVH WR WKH %RDUGjV ILQGLQJ WKDW WKH&RPSDQ\ (QJLQHHULQJFRQWHQGVWKDWWKH%RDUGDEXVHGLWVGLVFUHWLRQLQ YLRODWHGWKH$FWE\VROLFLWLQJJULHYDQFHV6FKXOHU(QJLQHHULQJ RUGHULQJDQHZHOHFWLRQHYHQLIWKH%RDUGKDGJURXQGVWRILQG VD\V WKH %RDUG DEXVHG LWV GLVFUHWLRQ EHFDXVH VXEVWDQWLDO YLRODWLRQ RI WKH $FW LQ WKH VROLFLWDWLRQ DQG EXOOHWLQ ERDUG HYLGHQFHGRHVQRWVXSSRUWLWVILQGLQJ+RZHYHUPRUHWKDQ LVVXHV%XWJLYHQWKHQDUURZPDUJLQRIWKH0DUFK  VXIILFLHQWHYLGHQFHVXSSRUWVWKH%RDUGjVILQGLQJ HOHFWLRQ WKH &RPSDQ\ IDLOV WR SURYH WR WKLV &RXUW WKDW WKH %RDUGDEXVHGLWVGLVFUHWLRQLQRUGHULQJDQHZHOHFWLRQ  7KH EDFNJURXQG RI WKLV LVVXH EHJDQ VKRUWO\ EHIRUHWKH 0DUFK    HOHFWLRQ  2Q 0DUFK    &RPSDQ\  7RMXVWLI\DQHZHOHFWLRQWKHREMHFWLQJSDUW\PXVWVKRZ SUHVLGHQW :HUQHU 1LHKDXV YLVLWHG DQG ZDONHG WKURXJK WKH mQRW RQO\ WKDW XQODZIXO DFWV RFFXUUHG EXW DOVR WKDW WKH\ 6FKXOHU (QJLQHHULQJ &DQWRQ 2KLR SODQW WDONLQJ ZLWK LQWHUIHUHGZLWKWKHHPSOR\HHV H[HUFLVHRIIUHHFKRLFHWRVXFK HPSOR\HHV,QKLVGLVFXVVLRQZLWKWKHHPSOR\HHV1LHKDXV DQ H[WHQW WKDW WKH\ PDWHULDOO\ DIIHFWHG WKH UHVXOWV RI WKH mDVN>HG@WKHHPSOR\HHVIRUWLPHWRGHDOZLWKWKHVHSUREOHPV HOHFWLRQl1/5%Y%RVWLN'LY860&RUS)G  DQG WKDW WKH\ FRXOG KDYH DQRWKHU YRWH RQ WKH XQLRQ LQ WKH  WK&LU   TXRWLQJ1/5%Y:KLWH.QLJKW0IJ&R IXWXUHLIWKH\ZDQWHGl+HPDGHSURPLVHVWRPHHWIXUWKHU  )G   WK &LU    7R MXVWLI\ D QHZ HOHFWLRQWKHXQODZIXODFWVPXVWLQWHUIHUHZLWKWKHHPSOR\HHV

IUHHFKRLFHDQGPXVWPDWHULDOO\DIIHFWWKHHOHFWLRQ  ,QUHYLHZLQJWKH%RDUGjVGHWHUPLQDWLRQRIWKHVHTXHVWLRQV ZHUHYLHZWKH%RDUG VILQGLQJVRIIDFWDQGLWVDSSOLFDWLRQRI +RZHYHU LI WKH HPSOR\HU SHUPLWV HPSOR\HHV WR XVH LWV EXOOHWLQ

ODZ WR WKH IDFWV XQGHU D VXEVWDQWLDO HYLGHQFH VWDQGDUG ERDUG IRU WKH SRVWLQJ RI QRWLFHV UHODWLQJ WR SHUVRQDO

(YHUJUHHQ+HDOWKFDUH,QFY1/5%)G WK QRQZRUNUHODWHG LWHPV VXFK DV VDOHV RI SHUVRQDO SURSHUW\ FDUGV

DQG WKDQN\RX QRWHV LW FDQQRW YDOLGO\ GLVFULPLQDWH DJDLQVW

&LU  1/5%Y3HQWUH(OHF,QF )G WK QRWLFHV RI XQLRQ PHHWLQJV ZKLFK HPSOR\HHV KDYH SRVWHG

&LU   0RUHRYHU LQ VXFK FDVHV WKH HPSOR\HU V PRWLYDWLRQ QR PDWWHU

KRZ ZHOO PHDQW LV LUUHOHYDQW

 :HJLYHWKH%RDUGmEURDGGLVFUHWLRQWRGHWHUPLQHZKHWKHU %HQWHOHU ,QGXV ,QF  1/5%       WKHFLUFXPVWDQFHVRIDQHOHFWLRQKDYHDOORZHGWKHHPSOR\HHV )G  WK &LU    03147.0/ 202  1/5%Y9 66FKXOHU(QJLQHHULQJ 1R 1R 1/5%Y9 66FKXOHU(QJLQHHULQJ 

ZLWKHPSOR\HHVDQGKHDVNHGHPSOR\HHVIRUDFRPPLWPHQW LPSOLFLWO\ RU H[SOLFLWO\ SURPLVH WR FRUUHFW JULHYDQFHV WKH WRJLYHKLPWLPHDQGWRYRWHm1RlLQWKHTXLFNO\XSFRPLQJ VROLFLWDWLRQ PD\ YLRODWH VHFWLRQ  D    6ROLFLWDWLRQ RI HOHFWLRQ  1LHKDXV DOVR DVNHG WKH HPSOR\HHV ZKHWKHU KH JULHYDQFHVFDQYLRODWH6HFWLRQ D  EHFDXVHmWKHFRPELQHG VKRXOGILUHWKHFXUUHQWPDQDJHPHQW 1LHKDXVIROORZHGXS SURJUDP RI LQTXLU\ DQG FRUUHFWLRQl VXJJHVWV WKDW mXQLRQ ZLWKDOHWWHUWRHPSOR\HHVSURSRVLQJDVHULHVRIPHHWLQJVWR UHSUHVHQWDWLRQ >LV@ XQQHFHVVDU\l 5HOLDQFH (OHF  &R   GLVFXVVHPSOR\HHSUREOHPV 1/5%   HQI G)G WK&LU  $Q HPSOR\HU ZKR KDV QRW SUHYLRXVO\ VROLFLWHG JULHYDQFHV EXW  'LVFUHGLWLQJ FODLPV WKDW WKH SUHVLGHQW KDG WDONHGWR EHJLQVWRGRVRLQWKHPLGVWRIDXQLRQFDPSDLJQFUHDWHVD HPSOR\HHVLQDVLPLODUIDVKLRQRQHDUOLHURFFDVLRQVWKH%RDUG mFRPSHOOLQJ LQIHUHQFHl WKDW WKH HPSOR\HU LV mLPSOLFLWO\ IRXQGWKDWWKHUHFRUGmHYHQZKHQOLPLWHGWRWKHWHVWLPRQ\RI SURPLVLQJlWRFRUUHFWWKHSUREOHPV,G 1LHKDXVDORQHHVWDEOLVKHVDFODVVLFVROLFLWDWLRQRIJULHYDQFHV E\DQHPSOR\HUl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mLVDFFRPSDQLHGE\DQH[SUHVVRULPSOLHGSURPLVH HPSOR\HHVUHMHFWXQLRQUHSUHVHQWDWLRQ RIEHQHILWVVSHFLILFDOO\DLPHGDWLQWHUIHULQJZLWKUHVWUDLQLQJ DQGFRHUFLQJHPSOR\HHVLQWKHLURUJDQL]DWLRQDOHIIRUWl,77 6HHDOVR7RUELWW &DVWOHPDQ,QFY1/5%)G  7HOHFRPP1/5%       WK&LU    7KHVROLFLWDWLRQRIJULHYDQFHVLVQRWLWVHOIDQXQIDLUODERU  7KH %RDUG IRXQG WKDW 1LHKDXV KDG QHYHUSUHYLRXVO\ SUDFWLFH  %XW ZKHQ WKH FLUFXPVWDQFHV RI WKH VROLFLWDWLRQ HQJDJHG HPSOR\HHV LQ VLPLODU VROLFLWDWLRQV   :KHQ DQ HPSOR\HU LQVWLWXWHV D QHZ SUDFWLFH RI VROLFLWLQJ HPSOR\HH JULHYDQFHVGXULQJDXQLRQRUJDQL]DWLRQDOFDPSDLJQmWKHUHLV D FRPSHOOLQJ LQIHUHQFH WKDW KH LV LPSOLFLWO\ SURPLVLQJ WR  1LHKDXV WHVWLILHG FRUUHFW WKRVH LQHTXLWLHV KH GLVFRYHUV DV D UHVXOW RI KLV $    $QG OHW XV LPSURYH WKH FRPPXQLFDWLRQ DQG , ZLOO EH DW \RXU VHUYLFH RQFH D PRQWK WR KHOS \RX WR JHW FRPPXQLFDWLRQ WRJHWKHU ZLWK o ZLWK 6FKXOHU PDQDJHPHQW DQG \RX 7KH %RDUG VWDWHG

sRLQW $SSHQGL[  7KH (PSOR\HU GHIHQGV IXUWKHU RQ WKH EDVLV WKDW 1LHKDXV KDG SUHYLRXVO\ FRQGXFWHG WKH VDPH VRUW RI SUREOHPVROYLQJ  7KH KHDULQJ RIILFHU IRXQG GLVFXVVLRQV ZLWK HPSOR\HHV , ILQG WKDW DUJXPHQW WR EH ZLWKRXW DQ\ VXSSRUW LQ WKLV UHFRUG 1LHKDXV PDGH VHYHUDO YDJXH FODLPV +H DGPLWV WKDW KH DVNHG WKH HPSOR\HHV DPRQJ RWKHU WKLQJV LI KH WKDW KH KDG WDONHG WR HPSOR\HHV GXULQJ SUHYLRXV YLVLWV DERXW WKHLU VKRXOG ILUH FXUUHQW ORFDO PDQDJHPHQW RU LI PDQDJHPHQW VKRXOG SUREOHPV %DVHG RQ P\ REVHUYDWLRQ RI KLV WHVWLPRQ\ EH SURYLGHG ZLWK DGGLWLRQDO WUDLQLQJl XQVXSSRUWHG E\ DQ\ RWKHU HYLGHQFH , GLVFUHGLW WKHVH FODLPV

sRLQW $SSHQGL[  sRLQW $SSHQGL[ DW 

Reference

Status
Published