ABSTRACT

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

SKHQRPHQRQ DOEHLW PDUNHG E\ UHJLRQDO DQG FDVWHVSHFLILF GLIIHUHQFHV ,WV LQIOXHQFH KDV QRW EHHQ OLPLWHG WR WKRVH GHILQHG DFFRUGLQJ WR WKH ODZ DV 6FKHGXOHG&DVWHV WKRXJK 5DWKHU WKH'DOLWVWUXJJOHIRUKXPDQULJKWVKDVKDG

DSURIRXQGLPSDFWRQRWKHUFRPPXQLWLHVDVZHOO PRVWSDUWLFXODUO\WKHODUJH FDWHJRU\RIFDVWHVNQRZQFROOHFWLYHO\DVWKH2WKHU%DFNZDUG&ODVVHV2%&V ZKR IRUP RYHU KDOI WKH ,QGLDQ SRSXODWLRQ DV ZHOO DV WKH &KULVWLDQV DQG 0XVOLPV PRVWRIZKRPVKDUH LQWHUPVRIVRFLDODQGHFRQRPLFEDFNJURXQG PXFKLQFRPPRQZLWKWKH'DOLWV 7KLVFKDSWHUORRNVDWWKHJURZLQJFRQVFLRXVQHVVDQGDVVHUWLYHQHVVRIDODUJH

FRQJORPHUDWH RI0XVOLP FDVWHV VRPH RIZKRVH OHDGHUV DUH QRZ VHHNLQJ WR DGYDQFHIRUWKHPDQHZLGHQWLW\DV¶'DOLW0XVOLPV· ,WH[DPLQHV WKHSROLWLFV SURJUDPPHVDQGEURDGHUDJHQGDVWKDWDGYRFDWHVRIWKLVQHZLGHQWLW\VHHNWR SXWIRUZDUGRQEHKDOIRIDODUJHVHFWLRQRI,QGLD·V0XVOLPSRSXODWLRQ:HGHDO KHUHZLWKWKHRULJLQVDQGGHYHORSPHQWRIDSDUWLFXODU0XVOLPRUJDQL]DWLRQ WKH $OO,QGLD %DFNZDUG 0XVOLP 0RUFKD $,%00 WR VHH KRZ WKLV QHZ LGHQWLW\VHHNVWRSRVLWLRQLWVHOILQWKHFRQWH[WRIGHEDWHVRYHU0XVOLPLGHQWLW\ LQ ,QGLD DV ZHOO DV KRZ LW UHODWHV LWVHOI WR WKH ZLGHU PXOWLUHOLJLRXV 'DOLW FRPPXQLW\

7KH¶'DOLW0XVOLPV· ZKRDUHWKH\" 0DQ\ ,QGLDQ0XVOLPV DUH GHVFHQGDQWV RI¶XQWRXFKDEOH· ¶ORZ·FDVWH FRQYHUWV DQGRI LQGLJHQRXVSHRSOHVZKRVH DQFHVWRUVZHUHQRWFRQVLGHUHGSDUWRI WKH +LQGXIRXUIROGVRFLDORUGHU ZLWKRQO\DVPDOOPLQRULW\WUDFLQJ WKHLURULJLQV WR$UDE ,UDQLDQDQG&HQWUDO$VLDQVHWWOHUVDQGLQYDGHUV $OWKRXJKWKH4XU¶DQ LV ILHUFHO\ HJDOLWDULDQ LQ LWV VRFLDO HWKLFV LQVLVWLQJRQ D UDGLFDO HTXDOLW\RI DOO EHOLHYHUV ,QGLDQ 0XVOLP VRFLHW\ LV FKDUDFWHUL]HG E\ QXPHURXV FDVWHOLNH IHDWXUHV FRQVLVWLQJ RI VHYHUDO FDVWHOLNH JURXSV MDWLV ELUDGHULV 0XVOLPVZKR FODLP IRUHLJQ GHVFHQW VXFK DV WKH 6D\\HGV 6KDLNKV 0XJKDOV DQG 3DWKDQV FODLP D VXSHULRU VWDWXV IRU WKHPVHOYHV DV DVKUDI RU ¶QREOH· 'HVFHQGDQWV RI LQGLJHQRXVFRQYHUWVDUH RQWKHRWKHUKDQG FRPPRQO\UHIHUUHGWRFRQWHPS WXRXVO\DVDMODI RU¶EDVH· RU¶ORZO\· ,QWKHFHQWXULHVRI0XVOLPUXOHLQ,QGLD WKHDVKUDI SOD\HGDNH\UROH LQ WKH VWDWHDGPLQLVWUDWLRQ DVDGYLVRUV PLQLVWHUV JRYHUQRUV DUP\RIILFLDOVDQGHVWDWHPDQDJHUV DVZHOODV6XILVDQG¶XODPD 2Q WKH RWKHU KDQG GHVSLWH WKHLU FRQYHUVLRQ WR ,VODP WKH VRFLDO DQG HFRQRPLF FRQGLWLRQVRIWKHPDVVRIWKHDMODI 0XVOLPVKDUGO\FKDQJHG DQGWKH\UHPDLQHG ODUJHO\WLHGWRWKHLUWUDGLWLRQDORFFXSDWLRQVDVDUWLVDQV SHDVDQWVDQGODERXUHUV $VDPRQJWKH+LQGXV WKHYDULRXVMDWLVDPRQJWKHDMODI 0XVOLPVPDLQWDLQD

VWURQJVHQVHRIMDWL LGHQWLW\ 7KHHPHUJHQFHRIGHPRFUDWLFSROLWLFVLV KRZHYHU EULQJLQJDERXWDUDGLFDOFKDQJHLQWKHPDQQHULQZKLFKWKLVVHQVHRILGHQWLW\ LV DUWLFXODWHG $ZDUH RI WKH LPSRUWDQFH RI QXPEHUV LQ DFTXLULQJ SROLWLFDO SRZHUDQGWKHHFRQRPLFEHQHILWVWKDWDFFUXHIURPLW WKH'DOLWPRYHPHQWKDV VRXJKW WRHVWDEOLVKDZLGHU VHQVHRI'DOLW LGHQWLW\ WKDW WUDQVFHQGV LQWHUFDVWH DQGLQWHUUHOLJLRXVGLYLVLRQVDQGGLIIHUHQFHVDPRQJWKH¶ORZHU·FDVWHPDMRULW\ 7KLV ZLGHU 'DOLW LGHQWLW\ GRHV QRW VHHN WR GHQ\ LQGLYLGXDO MDWL LGHQWLWLHV 5DWKHU LW WDNHV WKHP LQWR DFFRXQW EXW VHHNV WR VXEVXPH WKHPZLWKLQ WKH ZLGHUFROOHFWLYH'DOLWLGHQWLW\ EDVHGRQDFRPPRQKLVWRU\RIVXIIHULQJDVZHOO

DV FRPPRQ UDFLDO RULJLQV DV LQGLJHQRXV SHRSOH 7KLV VHHPV WR KDYH EHHQ D FUXFLDOIDFWRULQWKHHPHUJHQFHRIDVSHFLILF¶'DOLW0XVOLP· LGHQWLW\ ZKLFKWKH $,%00 VHHNV WR DUWLFXODWH $ZDUH WKDW FROOHFWLYH HIIRUW DQG FROODERUDWLRQ KDYH EHHQ DEOH WR ZLQ IRU WKH 'DOLWV VHYHUDO FRQFHVVLRQV IURP WKH VWDWH ¶ORZHU·FDVWH0XVOLPLGHRORJXHVDQGDFWLYLVWVLQWKH$,%00DUHQRZLQWKH SURFHVV RI IDVKLRQLQJ D QHZ ¶'DOLW 0XVOLP· LGHQWLW\ VHHNLQJ WR EULQJ DOO ¶ORZHU·FDVWH0XVOLPVXQGHURQHXPEUHOOD GHILQHGE\WKHLUFRPPRQLGHQWLW\ DV0XVOLPDVZHOODV'DOLW

7KH$,%00 7KH$,%00ZDVVHWXSLQE\(MD]¶$OL D\RXQJ0XVOLPPHGLFDOGRFWRU IURP3DWQD WKHFDSLWDORIWKHHDVWHUQ,QGLDQVWDWHRI%LKDU EHORQJLQJWRWKH .XQMHUDFDVWHRI0XVOLPYHJHWDEOHVHOOHUV %LKDU ,QGLD·VSRRUHVWVWDWH LVQRWR ULRXV IRU LWV DFXWH FDVWH SUREOHP DQG IRU LWV IUHTXHQW DQWL'DOLW SRJURPV &RQVHTXHQWO\ WKH'DOLWVLQ%LKDUKDYHEHHQDPRQJWKHILUVWWRWDNHWRPLOL WDQWIRUPVRIVWUXJJOH 7KH0XVOLPVRI%LKDU ZKRIRUPRYHUSHUFHQWRI WKH VWDWH·V SRSXODWLRQ DUH DOVR FKDUDFWHUL]HG E\ VKDUS FDVWH GLYLVLRQV 7KH SOLJKW RI %LKDU·V¶'DOLW 0XVOLPV· ZKRP WKH $,%00 HVWLPDWHV DV IRUPLQJ DOPRVWSHUFHQWRIWKHVWDWH·V0XVOLPSRSXODWLRQDQGFRQVLVWLQJRIWZHQW\ QLQH GLIIHUHQW FDVWH JURXSV LV SDUWLFXODUO\ SDWKHWLF 0RVW %LKDUL ¶'DOLW 0XVOLPV· ZRUN DV GDLO\ ZDJH ODERXUHUV PDQXDO ZRUNHUV DUWLVDQV DQG SHWW\ SHDVDQWV EDUHO\ PDQDJLQJ WR HNH RXW DQ H[LVWHQFH 7KH HPHUJHQFH RI WKH $,%00LQ%LKDUQHHGVWREHXQGHUVWRRGLQWKLVFRQWH[W DQGLQWKHEDFNGURS RI WKHJURZLQJ VDOLHQFHRI FDVWHEDVHGPRELOL]DWLRQ DPRQJERWK WKH¶ORZHU· DQG¶XSSHU·FDVWH+LQGXVDVZHOODV0XVOLPV $FFRUGLQJWR¶$OL WKHSOLJKWRIWKHRYHUZKHOPLQJPDMRULW\RIWKH0XVOLPV

RI %LKDU DV ZHOO DV DQ DFXWH DZDUHQHVV RI WKH OLPLWDWLRQV RI WKH WUDGLWLRQDO 0XVOLP OHDGHUVKLS VXJJHVWHG WR KLP WKH QHHG IRU WKH HVWDEOLVKPHQW RI WKH $,%00 WR VWUXJJOH IRU WKH ULJKWV RI WKH ¶'DOLW 0XVOLPV· +H UHJDUGV WKH GHVWUXFWLRQRIWKH%DEULPRVTXHDW$\RGK\DLQDVDODQGPDUNHYHQWLQ WKLVUHJDUG VHHLQJWKHWUDGLWLRQDO DQGODUJHO\¶XSSHU·FDVWH 0XVOLPOHDGHUVKLS DV KDYLQJ RQO\ IXUWKHU FRPSOLFDWHG PDWWHUV E\ SOD\LQJ LQWR WKH KDQGV RI +LQGXPLOLWDQWVDQGDVKDYLQJPLVOHGWKH0XVOLPPDVVHVIRUWKHLURZQSHWW\ JDLQV $VKHSXWVLW

7KHZD\WKHWUDGLWLRQDO0XVOLPOHDGHUVUHDFWHGWRWKH%DEUL0DVMLG LVVXH PDGH PH WKLQN WKDW WKHUH ZDV DQ XUJHQW QHHG IRU WKH 'DOLW 0XVOLPV WR FRPH XS ZLWK WKHLU RZQ OHDGHUV FKDPSLRQLQJ EUHDG DQGEXWWHUFRQFHUQVUDWKHUWKDQHPRWLRQDODQGV\PEROLFLVVXHV ,GR QRWVD\WKDWWKH%DEULLVVXHZDVQRWLPSRUWDQW EXW,GRLQVLVW WKDWLW ZDVQRW WKHSULPDU\ LVVXH IRUXV 2XU ILUVW FRQFHUQ VKRXOGEH MREV DQGHGXFDWLRQIRURXUSHRSOH DQGLWLVRQO\DIWHUWDFNOLQJWKHVHWKDW RWKHU VHFRQGDU\LVVXHVFDQEHWDNHQXS $OODORQJ KRZHYHU WKHWUDGL

WLRQDO 0XVOLP OHDGHUVKLS KDV EHHQ FKDPSLRQLQJ PHUHO\ V\PEROLF LVVXHV EHLWWKHFDXVHRI8UGX WKHPLQRULW\FKDUDFWHURIWKH$OLJDUK 0XVOLP8QLYHUVLW\ 0XVOLP3HUVRQDO/DZRUWKH%DEUL0DVMLG :KDW ZH DUH FDOOLQJ IRU LV D QHZ OHDGHUVKLS WKDW KDV D QHZ VHQVH RI WKH SULRULWLHV RI WKH FRPPXQLW\ ZKLFK IRU WKH 'DOLW 0XVOLPV DUH SULPDULO\WKHUHDO WKLVZRUOGO\LVVXHVRIVKHHUSK\VLFDOVXUYLYDO

:LWKLQOHVVWKDQDGHFDGHRILWVIRXQGLQJ E\HDUO\WKH$,%00KDG HPHUJHGDVDQXPEUHOODJURXSRIRYHUIRUW\RUJDQL]DWLRQVFODLPLQJWRUHSUH VHQWYDULRXVGLIIHUHQW¶'DOLW0XVOLP· FDVWHV ,WQRZKDVEUDQFKHVLQWKHVWDWHVRI 8WWDU 3UDGHVK 0DGK\D 3UDGHVK :HVW %HQJDO 'HOKL 5DMDVWKDQ DQG 0DKDUDVKWUD LQ DGGLWLRQ WR %LKDU ZKHUH LW KDV LWV KHDGTXDUWHUV ,W KDV DOVR HVWDEOLVKHG FRQWDFW ZLWK 0XVOLP %DFNZDUG&DVWH RUJDQL]DWLRQV LQ $QGKUD 3UDGHVK DQG .DUQDWDND LQ VRXWK ,QGLD (MD] ¶$OL IXQFWLRQV DV LWV DOO,QGLD FRQYHQRU DQG WKHUH DUH VWDWH FRQYHQRUV LQ HDFK RI WKH VWDWHV ZKHUH LW KDV EUDQFKHV

7KHDLPVDQGREMHFWLYHVRIWKH$,%00 7KHIRUHPRVWSULRULW\IRUWKH$,%00LVWRJHWUHFRJQLWLRQIURP WKH,QGLDQ VWDWHIRUWKHRYHUPLOOLRQ¶'DOLW0XVOLPV· DV6FKHGXOHG&DVWHVVRWKDWWKH\ FDQ DYDLO WKHPVHOYHV RI WKH VDPH EHQHILWV DV WKH+LQGX 6LNK DQG %XGGKLVW 6FKHGXOHG&DVWHVHQMR\ LQFOXGLQJUHVHUYHGJRYHUQPHQWMREV UHVHUYHGVHDWVLQ VWDWH OHJLVODWXUHV DQG LQ WKH ,QGLDQ3DUOLDPHQW VSHFLDO FRXUWV WR WU\ FDVHV RI DWURFLWLHV DJDLQVW WKHP DV ZHOO DV VRFLDO DQG HFRQRPLF GHYHORSPHQW SURJUDPPHVPHDQWVSHFLDOO\ IRU WKHP ,QD OHDIOHWGHVFULELQJ LWVREMHFWLYHV LW GHVFULEHV WKLV DV LWV ¶VLQJOH DLP· 7KH $,%00 LQVLVWV WKDW LWV GHPDQG IRU 6FKHGXOHG&DVWH VWDWXV IRU ¶'DOLW 0XVOLPV· LV IXOO\ LQ FRQVRQDQFH ZLWK WKH VSLULW RI WKH ,QGLDQ &RQVWLWXWLRQ 5HFRJQL]LQJ WKH IDFW WKDW GHPDQGV IRU VSHFLDOOHJDOVWDWXVIRU0XVOLPVKDYHEHHQYLHZHGLQWKHSDVWDV¶VHSDUDWLVW· DQG ¶DQWLQDWLRQDO· DQG HYHQ¶SUR3DNLVWDQ· WKH$,%00 LV FDUHIXO WR SURMHFW LWV GHPDQGVDVDLPHGDWLQWHJUDWLQJWKH¶'DOLW0XVOLPV· LQWRWKH¶QDWLRQDOPDLQ VWUHDP· E\ HQDEOLQJ WKHP WR SURJUHVV HFRQRPLFDOO\ DQG VRFLDOO\ DORQJZLWK RWKHUGHSULYHGVHFWLRQVRIWKH,QGLDQSRSXODWLRQ $FFRUGLQJWR,QGLDQODZDVLWVWDQGVDWSUHVHQW RQO\WKRVH'DOLWVZKRFODLP

WREH+LQGXV 6LNKVDQG%XGGKLVWVFDQEHFRQVLGHUHGWREHPHPEHUVRI WKH 6FKHGXOHG&DVWHVDQGWKHUHE\HOLJLEOHIRUWKHVSHFLDOEHQHILWVWKDWWKHVWDWHKDV PDGH DYDLODEOH WR WKHVH FDVWHV 7KH$,%00 VHHV WKLV DV YLRODWLQJ WKH EDVLF FKDUDFWHU RI WKH ,QGLDQ &RQVWLWXWLRQ LQ SDUWLFXODU $UWLFOHV DQG $UWLFOH OD\V GRZQ WKDW¶>W@KH VWDWH VKDOO QRW GHQ\ WR DQ\ SHUVRQ HTXDOLW\ EHIRUH WKH ODZ RU WKH HTXDO SURWHFWLRQ RI WKH ODZV ZLWKLQ WKH WHUULWRU\ RI ,QGLD· $UWLFOH VWDWHV WKDW¶>W@KH VWDWH VKDOO QRW GLVFULPLQDWH DJDLQVW DQ\ FLWL]HQ RQ JURXQGV RQO\ RI UDFH FDVWH VH[ SODFH RI ELUWK RU DQ\ RI WKHP· ZKLOHDFFRUGLQJWR$UWLFOH¶>W@KHUHVKDOOEHHTXDOLW\RI RSSRUWXQLW\IRU

DOO FLWL]HQV LQPDWWHUV UHODWLQJ WR HPSOR\PHQWRU DSSRLQWPHQW WR DQ\RIILFH XQGHU WKH VWDWH· $UWLFOH KDV D FODXVH DWWDFKHG WR LW ZKLFK VWDWHV WKDW ¶>Q@RWKLQJ VKDOO SUHYHQW WKH VWDWH IURPPDNLQJ DQ\ VSHFLDO SURYLVLRQ IRU WKH DGYDQFHPHQWRIDQ\VRFLDOO\DQGHGXFDWLRQDOO\EDFNZDUGFODVVHV·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

DQGFRPSOH[RQH LQZKLFKLVVXHVRISRZHUDQGFRPPXQDOSROLWLFVVHHPWREH LQH[WULFDEO\LQYROYHG 6SHFLDOIDFLOLWLHVIRUWKHEHQHILWRIWKH'DOLWVRZHWKHLU RULJLQ WR WKH *RYHUQPHQW RI ,QGLD$FW DFFRUGLQJ WRZKLFK D OLVW RU VFKHGXOHZDVGUDZQXSFRQWDLQLQJWKHQDPHVRIFDVWHVFRQVLGHUHGWREHORZ LQWKHVRFLDOKLHUDUFK\IRUZKRPVSHFLDO IDFLOLWLHVZHUHH[WHQGHGLQRUGHUWR SDUWLDOO\FRPSHQVDWHWKHPIRUFHQWXULHVRIGHSULYDWLRQDQGWRHQDEOHWKHPWR DGYDQFHHFRQRPLFDOO\ DQGHGXFDWLRQDOO\ 0DQ\RI WKHVH FDVWHVKDGPHPEHUV ZKR FODLPHG GLIIHUHQW UHOLJLRXV DIILOLDWLRQV QRW DOO RI WKHP EHLQJ +LQGX 6HYHUDO 6FKHGXOHG &DVWHV VXFK DV WKH %DQMDUDV 'KRELV 1DWV /DOEHJLV +DODONKRUV -RJLV 3DVLV 0RFKLV .DKWLNV -XODKDV 'DU]LV DQG WKH5DQJUH]HV FRQVLVWHGRIERWK+LQGXVDQG0XVOLPV +RZHYHU LQD3UHVLGHQWLDO2UGHU ZDVSDVVHGDPHQGLQJ$UWLFOHRI WKH ,QGLDQ&RQVWLWXWLRQ ZKLFKHQDEOHV WKH 3UHVLGHQW RI ,QGLD WR QRWLI\ D SDUWLFXODU FDVWH DV 6FKHGXOHG &DVWH $FFRUGLQJWRWKHDPHQGHGODZRQO\WKRVH'DOLWVZKRFODLPHGWREH+LQGXV FRXOGEHFRQVLGHUHGPHPEHUVRID6FKHGXOHG&DVWHDQGKHQFHHOLJLEOHIRUWKH VSHFLDOEHQHILWVWKDWVXFKFDVWHVHQMR\ )XUWKHUPRUH DQRQ+LQGX'DOLWZRXOG EHFRQVLGHUHG IRU VXFKEHQHILWVRQO\ LIKHRU VKHFRQYHUWHG WR+LQGXLVPRU GHFODUHG KLPVHOI RU KHUVHOI WR EH D +LQGX WKLV LWVHOI EHLQJ D YLRODWLRQ RI $UWLFOH RI WKH ,QGLDQ&RQVWLWXWLRQ ZKLFK OD\V GRZQ WKH ULJKW WR WKH IUHH SUDFWLFH RI UHOLJLRQ :LWK RQH VWURNH RI WKH SHQ PLOOLRQV RI 0XVOLP &KULVWLDQ 6LNKDQG%XGGKLVW'DOLWVZHUHVWUXFNRIIWKH6FKHGXOHG&DVWHOLVW ,QFUHDVLQJ+LQGX QXPEHUV DQG SUHYHQWLQJ'DOLW FRQYHUVLRQV WR QRQ+LQGX UHOLJLRQV VHHP WR EH DPRQJ WKH SUREDEOH UHDVRQV EHKLQG WKH DPHQGPHQW 2ZLQJWRPDVVLYHVWUXJJOHVODXQFKHGE\'DOLW6LNKVDQG'DOLW%XGGKLVWV WKH ODZZDVODWHUDPHQGHGWRDOORZIRU6FKHGXOHG&DVWHVWDWXVWREHH[WHQGHGWR 'DOLWVSURIHVVLQJ6LNKLVPLQDQG ODWHU %XGGKLVPLQ 7KH WZR RWKHUPDMRU'DOLW JURXSV WKH¶'DOLW0XVOLPV· DQG WKH¶'DOLW&KULVWLDQV· DUH VWLOOGHQLHGWKHULJKWVDYDLODEOHWRRWKHU'DOLWV:KLOHYDULRXV&KULVWLDQJURXSV KDYH EHHQ SURPLQHQW LQ SURWHVWLQJ DJDLQVW WKLV GLVFULPLQDWLRQ LW LV RQO\ UHFHQWO\ ZLWK WKH HPHUJHQFH RI WKH$,%00 WKDW WKH¶'DOLW0XVOLPV· KDYH DOVREHJXQWRPRELOL]HWRILJKWIRUZKDWWKH\VHHDVWKHULJKWVWKDWKDYHEHHQ

GHQLHGWRWKHPE\ODZ EUDQGLQJWKLVDVDJURVVYLRODWLRQRIWKHVHFXODUFKDU DFWHURIWKH,QGLDQ&RQVWLWXWLRQ

%HVLGHV EHLQJ FRQVLGHUHG¶DQWLVHFXODU· WKH ODZ DV LW VWDQGV WRGD\ LV DOVR FRQGHPQHG E\ WKH $,%00 DV D JURVV YLRODWLRQ RI KXPDQ ULJKWV )XUWKHUPRUH LW LV VHHQ DV D SOR\ WR NHHS WKHPRUH WKDQ PLOOLRQ¶'DOLW 0XVOLPV· LQSHUSHWXDO WKUDOGRP DFRQVSLUDF\ LQZKLFKERWK WKH+LQGXDQG WKH 0XVOLP ¶XSSHU·FDVWH HOLWH DUH VHHQ DV EHLQJ LQYROYHG ([WHQGLQJ 6FKHGXOHG&DVWHVWDWXVWR¶'DOLW0XVOLPV· LV DVWKH$,%00VHHVLW DQXUJHQW QHFHVVLW\ DQGQRWVLPSO\WREULQJWKHODZLQOLQHZLWKWKHVSLU LWDQGH[SOLFLW FRPPDQGV RI WKH ,QGLDQ &RQVWLWXWLRQ %HFDXVH WKH\ KDYH EHHQ GHQLHG 6FKHGXOHG&DVWHVWDWXVDQGWKHEHQHILWVWKDWDFFUXHIURPVXFKVWDWXV WKH¶'DOLW 0XVOLPV· DUHVDLGWRODJIDUEHKLQGWKH+LQGX'DOLWV ZKRKDYHEHHQDEOHWR PDNHFRQVLGHUDEOHSURJUHVVLQDOOILHOGVEHFDXVHRIWKHVSHFLDOIDFLOLWLHVWKDWWKH VWDWHKDVSURYLGHGIRUWKHP

,Q RUGHU WR SUHVV IRU WKH LQFOXVLRQ RI¶'DOLW0XVOLPV· LQ WKH 6FKHGXOHG &DVWH OLVW WKH $,%00 KDV RUJDQL]HG VLJQDWXUH FDPSDLJQV FRQIHUHQFHV DQG SURWHVWPDUFKHV DQGKDVPHWZLWKOHDGHUVRIYDULRXV,QGLDQSROLWLFDOSDUWLHVWR JDLQ WKHLU VXSSRUW IRU WKHLU GHPDQG ,W DOVR VHHNV WR SURSDJDWH LWV PHVVDJH WKURXJK OHDIOHWV DQG ERRNOHWV DQG WKURXJK WKH FROXPQV RI WKH 3DWQDEDVHG 8UGXGDLO\6DQJDP HGLWHGE\ LWV QDWLRQDO FRQYHQRU (MD]¶$OL 7KH$,%00 KDV EHHQ DEOH WR JHW YDULRXV SROLWLFDO SDUWLHV WR WHQWDWLYHO\ DJUHH WR LWV GHPDQGV WKRXJKWKLVLV\HWWRUHVXOWLQDQDPHQGPHQWRIWKHODZ ,WZDVGXH WRLWVHIIRUWVWKDWLQ-XO\WKH/HJLVODWLYH$VVHPEO\RI%LKDUSDVVHGDUHVR OXWLRQDVNLQJIRU6FKHGXOHG&DVWHVWDWXVIRU¶'DOLW0XVOLPV· ZKLFKKDVEHHQ VHQWWRWKH3UHVLGHQWRI,QGLDIRUKLVDSSURYDO 7ZRPRQWKVHDUOLHULWKDGEHHQ DEOH WR JHW D ELOO LQWURGXFHG LQ WKH ,QGLDQ 3DUOLDPHQW PDNLQJ WKH VDPH GHPDQG ZKLFK KRZHYHU WKH,QGLDQJRYHUQPHQWLV\HWWRFRQVLGHU

7KH$,%00SULGHVLWVHOILQKDYLQJFRLQHGWKHWHUP¶'DOLW0XVOLPV· DQGLQ WKLV LW VHHNV WR UDGLFDOO\ UHIDVKLRQ QRWLRQV RI 0XVOLP FRPPXQLW\ LGHQWLW\ 'HFRQVWUXFWLQJWKHQRWLRQRI0XVOLPVDVDKRPRJHQRXVEORF LWEU LQJVWRWKH IRUH WKH H[LVWHQFHRI FDVWHGLVWLQFWLRQV DPRQJ WKH ,QGLDQ0XVOLPV ZKLFK LW VHHVDVRQHRIWKHSULPDU\DQGGHILQLQJIHDWXUHVRI,QGLDQ0XVOLPVRFLHW\ ,Q DUWLFXODWLQJ D VHSDUDWH¶'DOLW0XVOLP· LGHQWLW\ LW ILQGV LWVHOI DW RGGVZLWK WKH WUDGLWLRQDO ODUJHO\¶KLJK·FDVWH 0XVOLPOHDGHUVKLS ZKLFK LQVHHNLQJWRVSHDN IRU DOO 0XVOLPV VHHV WKH TXHVWLRQ RI FDVWH WKDW WKH $,%00 VR VWULGHQWO\ VWUHVVHVDVGLYLVLYH /HDGLQJ0XVOLPVSRNHVPHQKDYH QRWVXUSULVLQJO\ DFFXVHG WKH $,%00 RI VHHNLQJ WR FUHDWH GLYLVLRQV ZLWKLQ WKH0XVOLP FRPPXQLW\ DQG RI VSUHDGLQJ ¶FDVWHLVP· DQG WKXV SOD\LQJ LQWR WKH KDQGV RI PLOLWDQW +LQGXV 7KH\KDYHDVVHUWHGWKDWWKHGLYLVLRQRI0XVOLPVRQWKHEDVLVRIFDVWH LVLWVHOI¶DQWL,VODPLF· DQGKHQFHWRDUJXHIRUVSHFLDOULJKWV IRU¶'DOLW0XVOLPV·

DV RSSRVHG WR RWKHU0XVOLPV LV DJDLQVW ,VODP HYHQ JRLQJ WR WKH H[WHQW RI DFFXVLQJ WKH $,%00 RI ¶EHLQJ IXQGHG E\ IRUHLJQ HOHPHQWV WR ZHDNHQ ,VODP· 7KH $,%00 KDV DOVR EHHQ DOOHJHG WR EH PHUHO\ D SROLWLFDO IURQW IORDWHG E\¶$OL·V IDWKHULQ ODZ *KXODP 6DUZDU IRUPHU VSHDNHU RI WKH %LKDU /HJLVODWLYH$VVHPEO\ LQRUGHU WR IXUWKHUKLVRZQSROLWLFDO LQWHUHVWV D FKDUJH WKDW¶$OLYHKHPHQWO\GHQLHV ¶$OLVHHV,VODPDVKDYLQJKLVWRULFDOO\SOD\HGDNH\UROHLQWKHHPDQFLSDWLRQ

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¶+LJK·FDVWH+LQGXV LQRUGHUWRVDYHWKHLUSURSHUW\RUWR VHFXUH KLJK SRVLWLRQV LQ 0XVOLPUXOHG WHUULWRULHV FRQYHUWHG WR ,VODP EULQJLQJZLWK WKHPQRWLRQV RI FDVWH VXSHULRULW\ WKDW DUH IRUHLJQ WR SULVWLQH ,VODP 'RFWULQHVZHUHGHYHORSHGWKDWVRXJKWWROHJLWLPL]HFDVWHLQHTXDOLWLHVE\ VHHNLQJ4XU¶DQLFVDQFWLRQIRUWKHP *UDGXDOO\ KHVD\V WKH¶VSLULWRI,VODP· ZDV UHSODFHGE\WKH¶ULWXDOVRI,VODP·

2QH RI WKH FUXFLDO WDVNV EHIRUH WKH¶'DOLW0XVOLPV· DV¶$OL VHHV LW LV WR UHVFXH,VODPIURPWKHFOXWFKHVRI WKRVHZKRFODLPWRVSHDNLQ LWVQDPH WKH ¶KLJK·FDVWH0XVOLPOHDGHUVKLS 7KXV KHFDOOVIRUDUHYLYDORI¶WKHWUXHVSLULWRI ,VODP· ZKLFK ILHUFHO\ FRQGHPQV DOO FDVWH DQG UDFLDO GLYLVLRQV 7KLV ZRXOG HQWDLODUDGLFDOTXHVWLRQLQJRIZLGHO\SUHYDOHQWQRUPVDQGFXVWRPVDQGDWRWDO WUDQVIRUPDWLRQ RI DWWLWXGHV 7KH SUDFWLFH RI XQWRXFKDELOLW\ ZKLFK ,VODP URXQGO\FRQGHPQV LVVWLOOREVHUYHGWRYDU\LQJGHJUHHV ¶$OLFODLPV E\¶XSSHU· FDVWH 0XVOLPV ZKR ORRN GRZQ XSRQ ¶ORZHU·FDVWH 0XVOLPV DV LQKHUHQWO\ LQIHULRU :KLOH ,VODPFDOOV IRU0XVOLPV WR VKDUH LQ WKHSOLJKWRI WKHLU IHOORZ EHOLHYHUVDQGWRZRUNIRUWKHLUVRFLDOHPDQFLSDWLRQ WKH0XVOLP¶XSSHUFDVWH IHXGDOORUGV· DUHVDLGWREH¶GHDI GXPEDQGEOLQGWRWKHVXIIHULQJRIEDFNZDUG FDVWH0XVOLPV·

¶$OLLVELWWHUO\FULWLFDORIWKHWUDGLWLRQDO ODUJHO\¶KLJK·FDVWH 0XVOLPOHDGHU VKLS ERWK ¶XODPD DVZHOODV¶OD\· 2YHUWKHFHQWXULHVRI0XVOLPUXOH KHVD\V WKHUXOLQJFODVVDPRQJWKH0XVOLPVGLVSOD\HGQRFRQFHUQIRUWKHSOLJKWRIWKH ¶'DOLW0XVOLPV· ZKRUHPDLQHGWLHGWRWKHLUWUDGLWLRQDORFFXSDWLRQV PLUHGLQ SRYHUW\ DQG LJQRUDQFH 7KH RQO\ FRQFHUQ RI WKH UXOLQJFODVV 0XVOLPV KH ZULWHV ZDV WR SHUSHWXDWH WKHLU RZQ UXOH DQG IRU WKLV WKH\ HQWHUHG LQWR DOOLDQFHV ZLWK ¶XSSHU·FDVWH +LQGXV NHHSLQJ WKH 'DOLWV +LQGXV DV ZHOO DV 0XVOLPV FUXHOO\VXSSUHVVHGXQGHUWKHLU ILUPFRQWURO ¶:KLOH WKH\EXLOW ODUJH

SDODFHV IRU WKHPVHOYHV· KH VD\V ¶WKH\ GLG QRW HVWDEOLVK HYHQ RQH SULPDU\ VFKRROIRUWKHSRRU· 7KLVGLVGDLQIRUWKH'DOLWV KHZULWHV ZDVFDUULHGGRZQ ULJKW WKURXJK WKHSHULRGRI0XVOLPDQG WKHQ%ULWLVK UXOH DQGFRQWLQXHV WR WKLV GD\ +H DFFXVHV WKH SUHVHQWGD\ 0XVOLP ¶KLJK·FDVWH OHDGHUVKLS RI SOD\LQJ WKH ¶PLQRULW\ FDUG· DQG SUDFWLVLQJ WKH SROLWLFV RI ¶PLQRULW\LVP· LQ RUGHUWRJDUQHUSRZHUIRUWKHPVHOYHVZKLOHFODLPLQJWRVSHDNRQEHKDOIRIDOO 0XVOLPV WKHYDVWPDMRULW\RIZKRPDUH'DOLWV 7KH\ KHVD\V UHIXVHWRUHFRJ QL]HWKHDFXWHSUREOHPRIFDVWHZLWKLQWKHFRPPXQLW\EHFDXVH¶WKH\GRQRW ZDQWWRORVHWKHLUMDJLUGDUL SRZHUDQGSULYLOHJHV· <HWWKH\FOLQJWRWKHLUFDVWH WLWOHV VXFKDV¶6D\\HG· ¶6KDLNK· DQG¶.KDQ· VLPSO\ WR¶SURGXFHDQ LPSUHVVLRQ RI VXSUHPDF\ DQG WRGHPRUDOL]H WKHEDFNZDUG FDVWH0XVOLPV· ,Q WKHLU DWWL WXGHVWRZDUGVWKHODWWHUWKH\DUHVDLGWREHDFWLQJKDUGO\GLIIHUHQWO\IURPKRZ WKH +LQGX ¶XSSHU· FDVWHV WUHDW WKHLU RZQ 'DOLWV KDYLQJ QHYHU VKRZQ DQ\ JHQXLQHFRQFHUQIRUWKHLUVRFLDODQGHFRQRPLFDGYDQFHPHQW +HWDONVRIWKH ¶YLFHOLNHJULS· WKDW WKH6D\\HGV WKRVHZKRFODLPGHVFHQW IURP WKH3URSKHW 0XKDPPDG DUH VDLG WRKROG WKH¶'DOLW0XVOLPV· LQ DGGLQJ WKDW¶WKH ,VODPLF FRQFHSWV RI HTXDOLW\ QRQGLVFULPLQDWLRQ DQG IUDWHUQLW\ >DUH@ D KRD[ LQ WKH ,QGLDQFRQWH[W· +HVHHVWKH,QGLDQ0XVOLPFRPPXQLW\DVDZKROHDVKDYLQJ ¶DOO WKH LQJUHGLHQWV RI WKH %UDKPLQLFDO RUGHU· 7KH ¶XSSHU·FDVWH 0XVOLP OHDGHUVKLS KH ZULWHV GHPDQGV VSHFLDO SULYLOHJHV VXFK DV UHVHUYDWLRQV LQ JRYHUQPHQWVHUYLFHV IRUWKHHQWLUH0XVOLPFRPPXQLW\DVDZKROH EXWWKLVLV KHVD\V ¶KDUPIXOWRWKHEDFNZDUGFDVWH0XVOLPV· IRUQRWRQO\DUHVXFKEHQH ILWV IRU DQ HQWLUH UHOLJLRXV FRPPXQLW\ XQFRQVWLWXWLRQDO WKH\ ZRXOG DOVR LI JUDQWHG EHQHILWRQO\WKHHOLWH 7KH¶XSSHU·FDVWH0XVOLPOHDGHUVKLS KHDUJXHV WKULYHVRQFKDPSLRQLQJVXFK¶FRPPXQDO· ¶QRQLVVXHV· DVWKHSURWHFWLRQRIWKH 0XVOLP3HUVRQDO/DZRUWKH%DEULPRVTXH ZKLFKKDYHRQO\KHOSHGPLOLWDQW +LQGX ¶XSSHU·FDVWH IRUFHV UHVXOWLQJ LQ WHUULEOH YLROHQFH XQOHDVKHG DJDLQVW 0XVOLPVDQGFRPPXQDOULRWVLQZKLFKWKHPDMRUYLFWLPVDUHWKH'DOLWV ERWK +LQGXDQG0XVOLP %\SOD\LQJRQVXFK¶QRQLVVXHV· WKH\KDYHDOVREHHQDEOH WRJDUQHUYDVWDPRXQWVRIPRQH\ IURP0XVOLPFRXQWULHV IRU WKHPVHOYHV KH DOOHJHV ¶7KH WLPH KDV QRZ FRPH· KH VD\V IRU WKH¶XSSHU·FDVWH0XVOLPV WR ¶VWRSWKLQNLQJRIWKHHQWLUH0XVOLPFRPPXQLW\>@DVWKH\KDYHEHHQ>@FOHDUO\ UHGXFHGWRWKHLU>RZQ@FDVWHOHDGHUVKLS ZKLFKWKH\ZHUHGRLQJIURPWKHYHU\ EHJLQQLQJXQGHUWKHSVHXGRXPEUHOODRI0XVOLPXQLW\·

*LYHQ WKH VWUHVV WKDW ,VODP SODFHV RQ UDGLFDO VRFLDO HTXDOLW\ RQ WKH RQH KDQG DQGZKDWKHVHHVDVWKHIDLOXUHRIWKHWUDGLWLRQDO0XVOLP OHDGHUVKLSLQ FKDPSLRQLQJWKHULJKWVDQGLQWHUHVWVRIWKH%DFNZDUG&DVWH0XVOLPV RQWKH RWKHU ¶$OL FDOOV IRU D ¶SRZHU VKLIW· IURP WKH ¶$UDERULJLQ DVKUDI· WR WKH ¶RSSUHVVHG0XVOLPV· 'HQ\LQJWKDWKLVVWUXJJOHLVDLPHGDJDLQVWWKH¶XSSHU· FDVWH0XVOLPV KH VD\V WKDW LW LV GLUHFWHG SULQFLSDOO\ DW WKH JRYHUQPHQW WR IRUFHLWWRJUDQW6FKHGXOHG&DVWHVWDWXVWRWKH¶'DOLW0XVOLPV· $QHZ ¶'DOLW 0XVOLP· OHDGHUVKLS LVFDOOHG IRU IRU LW DORQH LV VHHQDVDEOH WRFKDPSLRQ WKH ULJKWVRIWKHRSSUHVVHGDPRQJWKH0XVOLPV +LWKHUWR ¶$OLZULWHV DOO0XVOLP PRYHPHQWVLQ,QGLD KDYLQJEHHQOHGE\¶HOLWH· 0XVOLPV KDYHEURXJKWQRJDLQV

WR WKH UHDOO\RSSUHVVHG LQZKRVHQDPH WKHVH VWUXJJOHVZHUHZDJHG 5DWKHU WKH\KDYHDOOEHHQXQGHUWDNHQZLWKWKHKLGGHQPRWLYHRIDGYDQFLQJWKHLQWHU HVWVRIWKHHOLWHV %\WDNLQJXSWKHLQWHUHVWVRIWKH¶'DOLW0XVOLPV· KHZULWHV WKH$,%00LVQRWVHHNLQJWRGLYLGHWKH0XVOLPFRPPXQLW\RQFDVWHOLQHV DV VRPHKDYHDFFXVHGKLPRIGRLQJ 5DWKHU KHVD\V FKDPSLRQLQJWKHFDXVHRI WKHRSSUHVVHGLVZKDW,VODPLWVHOIFDOOVIRU DUDGLFDOFRQFHUQ IRUWKHSRRUDQG WKH ZHDN ZKLFK ¶LV UHSHDWHGO\ VWUHVVHG LQ WKH +RO\ 4XU¶DQ DQG LQ WKH +DGLWK· 7KH3URSKHW0XKDPPDG·V HDUO\ IROORZHUV KHQRWHV ZHUH ODUJHO\ SRRU DQG GLVSRVVHVVHG SHRSOH DQG EHFDXVH KH VSRNH RXW RQ WKHLU EHKDOI KH ZDVILHUFHO\RSSRVHGE\WKHULFK4XU¶DLVKRI0HFFD ,VODP KHVD\V LQVLVWVRQD SDVVLRQDWH FRPPLWPHQW WR WKH SRRU +HQFH WKH DFFXVDWLRQV DJDLQVW WKH $,%00RI DOOHJHGO\ GLYLGLQJ0XVOLPV E\ WDNLQJ XS WKH FDXVH RI WKH SRRU 0XVOLPV DORQH DUH GLVPLVVHG DV EDVHOHVV %\ GHQ\LQJ WKH H[LVWHQFH RI FDVWH ZLWKLQ WKH0XVOLPFRPPXQLW\ KH VD\V WKH WUDGLWLRQDO0XVOLP OHDGHUVKLS LV RQO\KHOSLQJWRSHUSHWXDWHLW

1RWKLQJOHVVWKDQDMLKDG LQWKHIRUPRIDQRQYLROHQWVWUXJJOH QHHGVWREH ZDJHG ¶$OL ZULWHV WR ILJKW WR H[WHQG 6FKHGXOHG&DVWH VWDWXV WR ¶'DOLW 0XVOLPV· EXWWKLVMLKDG LVWREHIRXJKWE\WKH¶'DOLW0XVOLPV· DORQJZLWKQRQ 0XVOLP VHFXODU DQGSURJUHVVLYH IRUFHV WRZKLFK VWLII RSSRVLWLRQ LV H[SHFWHG IURP PDQ\ ¶XSSHU·FDVWH 0XVOLPV DV ZHOO DV ¶XSSHU·FDVWH +LQGXV 7KH VWUXJJOHZRXOGQHHG WKHKHOSRIQRQ0XVOLP'DOLWVDVZHOO IRU LI WKH¶'DOLW 0XVOLPV· JDLQ6FKHGXOHG&DVWHVWDWXVWKH\FRXOGMRLQKDQGVZLWK'DOLWVIURP RWKHUUHOLJLRQVDQGEHFRPHRQHVWURQJIRUFH DOPRVWKDOI WKH,QGLDQSRSXOD WLRQ 7KH\FRXOG WRJHWKHU HYHQFDSWXUHSROLWLFDOSRZHU EULQJWKHLU LQWHUHVWV DQGGHPDQGVWRWKHFHQWUHRIWKH,QGLDQSROLWLFDODJHQGDDQGSXWDQHQGWR DWURFLWLHV DJDLQVW WKHP 7KH RWKHU 'DOLWV QHHG WR EH FRQYLQFHG WKDW WKH LQFOXVLRQRI WKHUHOLJLRXVFODXVH LQ$UWLFOH LVD¶SRZHUIXOSORW WRGHVWUR\ WKH VWUHQJWKRI WKH LQGLJHQRXV'DOLWV· FUHDWLQJGLYLVLRQDPRQJ WKHPRQ WKH EDVLV RI UHOLJLRQ ,W LV PRUHRYHU D FOHYHU SOR\ WR GULYH D ZHGJH EHWZHHQ +LQGXV DQG0XVOLPV +HQFH UHPRYDO RI WKH UHOLJLRQ FODXVH LV VHHQ DV D QHFHVVDU\ VWHS ERWK WR FHPHQW D EURDGHU LQWHUUHOLJLRXV 'DOLW XQLW\ DQG WR EULGJHWKHGLYLGHEHWZHHQ0XVOLPVDQG+LQGXV ¶$OL VHHV WKH QHZ 0XVOLP OHDGHUVKLS WKDW KH HQYLVDJHV DV EHLQJ GUDZQ

SULPDULO\ IURP DPRQJ WKH %DFNZDUG&DVWH 0XVOLPV ZKR IRUP WKH YDVW PDMRULW\RIWKH0XVOLPSRSXODWLRQLQ,QGLD IRUWKH\DORQHFDQWUXO\VSHDNIRU WKHLU SHRSOH 7KH ¶XSSHU·FDVWH OHDGHUVKLS DUH OHIW WR UHSUHVHQW WKHLU RZQ SHRSOH 6LQFH WKH SULPDU\ FRQFHUQV RI WKH %DFNZDUG&DVWH 0XVOLPV DUH VKHHU SK\VLFDO VXUYLYDO MREV ZDJHV DQG WKH OLNH WKLV QHZ OHDGHUVKLS ZRXOG VHHN WR EULQJ DERXW D ¶UHYROXWLRQ RI SULRULWLHV· ,QVWHDG RI WDNLQJ XS ¶FRPPXQDO· LVVXHV WKDWZRXOG IXUWKHU H[DFHUEDWH+LQGX²0XVOLP GLIIHUHQFHV E\SOD\LQJLQWRWKHKDQGVRIILHUFHO\DQWL0XVOLP+LQGX]HDORWV ZKLFKRQO\ ZRUNVWRIXUWKHUWKHLQWHUHVWVRIWKH+LQGXDQG0XVOLPHOLWHV WKLVQHZOHDG HUVKLS ZRXOG IRFXV RQ LVVXHV VXFK DV HPSOR\PHQW IRRG KRXVLQJ DQG HOHPHQWDU\ HGXFDWLRQ LVVXHVZKLFK DIIHFW WKH GDLO\ OLYHV RI DOO SRRU SHRSOH

LUUHVSHFWLYHRI UHOLJLRQ ,Q WKLVZD\ +LQGX²0XVOLPDQWDJRQLVPVZRXOG IDGH DZD\ WKH 'DOLWV RI DOO UHOLJLRQV WKH SULPDU\ YLFWLPV RI WKH SROLWLFV RI FRPPXQDO KDWUHG ZRXOG XQLWH DQG WKH FRQGLWLRQV RI WKH SRRU ZRXOG LPSURYH

6LQFH WKH ¶'DOLW 0XVOLPV· VKDUH VLPLODU FRQFHUQV RI VKHHU VXUYLYDO ZLWK 'DOLWV RI RWKHU UHOLJLRQV WKH QHZ 0XVOLP OHDGHUVKLS ZRXOG VHHN WR EXLOG EULGJHV EHWZHHQ WKH0XVOLP'DOLWV DQG WKRVH RI RWKHU IDLWKV 7KLV HQWDLOV D FUXFLDO UHGHILQLWLRQRIZKDW LWPHDQV WREHD0XVOLP LQ ,QGLD WRGD\ $V¶$OL VHHVLW FDVWHLVSUREDEO\RIJUHDWHUVLJQLILFDQFHLQGHILQLQJFRPPXQLW\LGHQWL WLHV WKDQ UHOLJLRQ $OO 'DOLWV LUUHVSHFWLYH RI UHOLJLRQ EHORQJ WR WKH VDPH ¶QDWLRQ· TDXP KH VD\V 0HUH FKDQJH RI UHOLJLRQ FDQQRW ZLSH DZD\ WKH FRPPRQEORRGWKDWUXQVLQWKHLUYHLQV 7KH'DOLW¶QDWLRQ· UHSUHVHQWLQJWKH LQGLJHQRXV LQKDELWDQWVRI,QGLDZKRWRGD\IROORZYDULRXVGLIIHUHQWUHOLJLRQV KDVEHHQIUDFWXUHGLQWRYDULRXVDQWDJRQLVWLFJURXSV EXWWKH\PXVWEHXQLWHG 7KH ILUVW VWHS LQ WKLV GLUHFWLRQ LV WR UHPRYH WKH UHOLJLRXV FODXVH DWWDFKHG WR $UWLFOH WKDW VHHNV WR GLYLGH WKH 'DOLWV RQ WKH EDVLV RI UHOLJLRQ DQG WR SUHYHQWWKHPIURPFRPLQJWRJHWKHURQDFRPPRQSODQN 7KH¶GLYLGHG'DOLW QDWLRQ· KHZULWHV ZLOO EHXQLWHGRQFH DJDLQZKHQDOO'DOLWV LUUHVSHFWLYHRI UHOLJLRQ DUHJUDQWHGWKHVDPHVWDWXVDV6FKHGXOHG&DVWHV +HQFH LQRUGHUWR UHXQLI\ WKH'DOLW¶QDWLRQ· VR WKDW WKH'DOLWV HPHUJH DV D SRZHUIXO FROOHFWLYH IRUFHDOO'DOLWVPXVWXQLWH WRVXSSRUW WKH$,%00·VGHPDQGIRU6FKHGXOHG &DVWH VWDWXV IRU WKH ¶'DOLW 0XVOLPV· DV ZHOO LQWHUHVWLQJO\ IRU WKH ¶'DOLW &KULVWLDQV· ZKRDUHDOVRGHQLHGVXFKVWDWXV %\MRLQLQJKDQGVZLWK'DOLWV RIRWKHU IDLWKV DQG MRLQWO\ VWUXJJOLQJ WR LPSURYH WKHLU OLYLQJ FRQGLWLRQV ¶$OL ZULWHV WKH¶'DOLW0XVOLPV· ZRXOGEHDEOHWRMRLQWKH¶QDWLRQDOPDLQVWUHDP· RI ,QGLDQ VRFLHW\ 7KH¶HOLWH· 0XVOLPV KH RSLQHV KDYH DOO DORQJ KDG D ¶YHVWHG LQWHUHVW· LQ ¶PDLQWDLQLQJ H[FOXVLYLVP· DPRQJ WKH 0XVOLPV SUHYHQWLQJ WKHP IURPHVWDEOLVKLQJWLHVZLWKRWKHUV VRWKDWWKH\FRXOGSXUVXHWKHLURZQLQWHU HVWVLQWKHJXLVHRISURPRWLQJWKHFDXVHRIWKHFRPPXQLW\DVDZKROH ,WZDV WKLV H[FOXVLYLVWPLQGVHW KH VD\V WKDW OHG WR WKH FUHDWLRQ RI 3DNLVWDQ ZKLFK DFWXDOO\ EHQHILWHG RQO\ WKH 0XVOLP HOLWH DQG RQO\ IXUWKHU H[DFHUEDWHG WKH SUREOHPVRIWKH¶'DOLW0XVOLPV· :LWKDQHZ0XVOLPOHDGHUVKLSGUDZQIURP WKH¶'DOLW0XVOLPV· FRPLQJ WR WKH IRUH WKHFRPPXQLW\ZRXOG WXUQ LWVEDFN RQWKHFRPPXQDODQWDJRQLVPVRIWKHSDVWURRWHGLQDWUDGLWLRQRIH[FOXVLYLVP DQG VHSDUDWLVP 7KH¶'DOLW0XVOLPV· ZRXOG EHJLQ WR FROODERUDWHZLWK RWKHU 'DOLWV ZLWKZKRPWKH\KDYH¶DJUHDWFRPPRQDOLW\RILQWHUHVWV· SXUVXLQJWKH VDPH RFFXSDWLRQV DQG IDFLQJ WKH VDPH HFRQRPLF DQG VRFLDO SUREOHPV ,Q WKLVZD\D MRLQWVWUXJJOH IRUVRFLDO MXVWLFHDQGLQWHUFRPPXQDOKDUPRQ\FDQ EHODXQFKHGIRUDOO'DOLWV LUUHVSHFWLYHRIUHOLJLRQ

7KH JURZWK RI WKH$,%00 LV LPSRUWDQW LQ VHYHUDO LPSRUWDQW UHVSHFWV )RU RQH LW KLJKOLJKWV WKH PXOWLSOLFLW\ RI YRLFHV DQG DJHQGDV ZLWKLQ WKH ODUJHU ,QGLDQ0XVOLPFRPPXQLW\ FOHDUO\VKRZLQJKRZVXEDOWHUQXQGHUVWDQGLQJVRI UHOLJLRQDQGLGHQWLW\FDQUDGLFDOO\GLIIHU LQFUXFLDOUHVSHFWV IURPWKRVHRIWKH

HOLWHV ZKR KDYH ORQJ EHHQ FRQVLGHUHG LQ ERWK SROLWLFV DVZHOO DV DFDGHPLF VFKRODUVKLS WREHWKH¶QDWXUDOVSRNHVPHQ· RIWKH0XVOLPVDVDZKROH 7KHULVH RIWKH$,%00LQGLFDWHVDJURZLQJDVVHUWLYHQHVVRIORQJVXSSUHVVHGDQGQRZ JUDGXDOO\ HPHUJLQJ ¶ORZHU·FDVWH 0XVOLPV VHHNLQJ WR EULQJ WKHLU RZQ FRQFHUQV ZKLFKLQPDQ\ZD\VGLIIHUVKDUSO\IURPWKRVHRIWKH0XVOLPHOLWHV WR WKH IRUHIURQW RI WKH FRPPXQLW\·V SROLWLFDO DJHQGD $ QHZ OHDGHUVKLS FRQVLVWLQJRI¶'DOLW0XVOLPV· WKHPVHOYHV LVEHLQJSURPRWHG RQHWKDWVHHNVWR EULQJ DERXW D UDGLFDO VKLIW LQ WKH SULRULWLHV RI WKH FRPPXQLW\ ² DZD\ IURP ZKDW LW VHHV DV WKH¶V\PEROLF· ¶QRQLVVXHV· WKDWKDYHRQO\ IXUWKHUH[DFHUEDWHG +LQGX²0XVOLPDQWDJRQLVPVDQGVHUYHG WKH LQWHUHVWVRIERWK WKH+LQGXDQG 0XVOLPHOLWHV DQGWRZDUGVLVVXHVWKDWDIIHFWPRVWLQWLPDWHO\WKHVKHHUVXUYLYDO DQG OLIH FKDQFHV RI WKH SRRUHVW RI WKH SRRU 'HPDQGLQJ 6FKHGXOHG&DVWH VWDWXVIRUWKH¶'DOLW0XVOLPV· PD\ LQLWVHOI QRWEHDYHU\UDGLFDOVWHS JLYHQWKH SUHVHQWFOLPDWHRISULYDWL]DWLRQLQWKHFRXQWU\ ZKHUHWKHQXPEHUVRIJRYHUQ PHQW MREV DUH EHLQJ VKDUSO\ FXUWDLOHG DQG SXEOLF H[SHQGLWXUH DQG VXEVLGLHV GUDVWLFDOO\ UHGXFHG +RZHYHU LWV ZLGHU LPSOLFDWLRQV DUH FHUWDLQO\ PRUH PRPHQWRXV LQ WKHLU SUREDEOH FRQVHTXHQFHV 7KH GHPDQGV RI WKH$,%00 OLPLWHGDVWKH\PD\ZHOOEH PLJKWDFWXDOO\KHOSIDFLOLWDWHDUDGLFDOVKLIWLQWKH YHU\WHUPVRI0XVOLPSROLWLFDOGLVFRXUVH 7KH$,%00·VUDGLFDOUHUHDGLQJRI WKH ,VODPLF WUDGLWLRQ DQG WKH LPSOLFLW FULWLTXH WKDW WKLV LPSOLHVRI WKH WUDGL WLRQDO 0XVOLP UHOLJLRXV DQG SROLWLFDO OHDGHUVKLS VXJJHVWV QHZ ZD\V RI HQYLVLRQLQJ FRPPXQLW\ LGHQWLWLHV ,W IRUFHIXOO\ FKDOOHQJHV WKH QRWLRQ RI D 0XVOLP PRQROLWK DQG SRLQWV WR DOWHUQDWLYH XQGHUVWDQGLQJV RI FRPPXQLW\ VWUHVVLQJWKDWVKDUHGHWKQLFRULJLQVXQLWLQJ¶'DOLW0XVOLPV· ZLWK'DOLWVRIRWKHU IDLWKVPLJKW LQVRPHFRQWH[WV EHRIHYHQJUHDWHUVDOLHQFHWKDQDVKDUHGIDLWK LQ,VODPWKDWXQLWHVWKHPZLWK¶XSSHU·FDVWH0XVOLPV ,WVVWUHVVRQVHFXODULVP DQGKXPDQULJKWV ZKLFKLW VHHVDVEHLQJJURVVO\YLRODWHGE\WKHSUHVHQW ODZ UHODWHGWR6FKHGXOHG&DVWHVWDWXV LWVFDOOIRU¶LQWHJUDWLRQ· RI WKH0XVOLPVLQWR WKH¶QDWLRQDOPDLQVWUHDP· LWVGLVDYRZDORIFRPPXQDOSROLWLFV LWVDGYRFDF\RI LQWHUFRPPXQDO KDUPRQ\ DQG LWV DSSHDO IRU EXLOGLQJ EULGJHV ZLWK RWKHU 'DOLWVLQRUGHUWRUHXQLI\WKH¶'DOLWQDWLRQ· PLJKWZHOOSURYLGHDNH\WRZKDW KDVVRIDUVHHPHGWKHLQWUDFWDEOHFRPPXQDOSUREOHPLQ,QGLD