Charvat v. Eastern Ohio Reg

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21  &KDUYDWY(DVWHUQ2KLR 1R 3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

5HJLRQDO:DVWHZDWHUHWDO (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS

:HODFNMXULVGLFWLRQWRUHYLHZDQ\RIWKHVHLVVXHVDWWKH SUHVHQWWLPH,QWKHDEVHQFHRIDFHUWLILFDWLRQFRQVLVWHQWZLWK 81,7('67$7(6&28572)$33($/6 5XOHERIWKH)HGHUDO5XOHVRI&LYLO3URFHGXUHSUHWULDO RUGHUVRIDGLVWULFWFRXUWDUHQRWILQDORUGHUVIRUWKHSXUSRVHV )257+(6,;7+&,5&8,7 RI86&†DQGDUHQRWDSSHDODEOHXQWLOWKHGLVWULFW BBBBBBBBBBBBBBBBB FRXUWKDVHQWHUHGDILQDOMXGJPHQW6HH*RRGY2KLR(GLVRQ &R)GWK&LU7KHGHIHQGDQWVLQVLVW '$9,' &+$59$7 ; KRZHYHU WKDW EHFDXVH &KDUYDW KDV DOOHJHGO\ IDLOHG WR 3ODLQWLII$SSHOOHH  HVWDEOLVKDFRQVWLWXWLRQDOYLRODWLRQZHVKRXOGXVHRXUSHQGHQW  DSSHOODWHMXULVGLFWLRQWRGHFLGHWKDWWKHGLVWULFWFRXUWHUUHGLQ  1R GHQ\LQJ WKHLU PRWLRQ IRU MXGJPHQW RQ WKH SOHDGLQJV  6HH Y  0DWWR[Y&LW\RI)RUHVW3DUN)GWK&LU !   KROGLQJ WKDW EHFDXVH WKH SODLQWLII GLG QRW DOOHJH D ($67(51 2+,2 5(*,21$/  FRQVWLWXWLRQDO LQMXU\ VXIILFLHQW WR VWDWH D †  FODLP IRU :$67(:$7(5 $87+25,7<  UHWDOLDWLRQ LQ YLRODWLRQ RI WKH )LUVW $PHQGPHQW WKH FRXUW HWDO  FRXOGUHYHUVHWKHGLVWULFWFRXUWjVGHQLDORIVXPPDU\MXGJPHQW WRWKH&LW\RI)RUHVW3DUN+HUHKRZHYHUWKHUHFRUGUHIOHFWV 'HIHQGDQWV$SSHOODQWV   WKDW&KDUYDWKDVVXIILFLHQWO\DOOHJHGDYLRODWLRQRIKLV)LUVW 1 $PHQGPHQW ULJKWV WR VXSSRUW D FODLP XQGHU †   :H WKHUHIRUHGHFOLQHWRH[HUFLVHSHQGHQWDSSHOODWHMXULVGLFWLRQWR $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW DGGUHVVWKHVHFODLPV IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&ROXPEXV 1Rn*HRUJH&6PLWK'LVWULFWsXGJH ,,,&21&/86,21 $UJXHG0DUFK )RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 WKH MXGJPHQW RI WKH GLVWULFW FRXUW DQG 5(0$1' WKH FDVH IRU 'HFLGHGDQG)LOHG$SULO IXUWKHUSURFHHGLQJVFRQVLVWHQWZLWKWKLVRSLQLRQ %HIRUH&2/(DQG*,/0$1&LUFXLWsXGJHV%250$1 'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8('sDPHV$.LQJ3257(5:5,*+70255,6  $57+85 &ROXPEXV 2KLR IRU $SSHOODQWV  (GZDUG

7KH +RQRUDEOH 3DXO ' %RUPDQ 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ

  &KDUYDWY(DVWHUQ2KLR 1R 1R &KDUYDWY(DVWHUQ2KLR  5HJLRQDO:DVWHZDWHUHWDO 5HJLRQDO:DVWHZDWHUHWDO

'HQQLV0XFKQLFNL'XEOLQ2KLRIRU$SSHOOHH21%5,() WKHGLVWULFWFRXUWFLWLQJDGGLWLRQDOUHDVRQVZK\LWVKRXOGKDYH sDPHV $ .LQJ 'DQLHO : &RVWHOOR 3257(5 :5,*+7 JUDQWHGWKHLUPRWLRQIRUMXGJPHQWRQWKHSOHDGLQJV7KH\ 0255,6  $57+85 &ROXPEXV 2KLR IRU $SSHOODQWV DUJXHWKDWWKH\FDQQRWEHKHOGOLDEOHXQGHU&KDUYDWjV† (GZDUG'HQQLV0XFKQLFNL'XEOLQ2KLR5LFKDUG55HQQHU UHWDOLDWLRQFODLPEHFDXVHWKH\SOD\HGQRUROHLQWKHGHFLVLRQ 7$7( 5(11(5'RYHU2KLRIRU$SSHOOHH PDNLQJ SURFHVV WR WHUPLQDWH &KDUYDW  $V D UHVXOW HYHQ LI &KDUYDWjV VWDWHPHQWV TXDOLI\ DV FRQVWLWXWLRQDOO\ SURWHFWHG BBBBBBBBBBBBBBBBB VSHHFK WKH\ FODLP WKDW WKH\ ZHUH QRW UHVSRQVLEOH IRU WKH DFWLRQWKDWDOOHJHGO\FDXVHGKLV)LUVW$PHQGPHQWLQMXU\6HH 23,1,21 %ORFKY5LEDU)GDWUHTXLULQJDSODLQWLIIWRVKRZ BBBBBBBBBBBBBBBBB mWKDWWKHGHIHQGDQWjVDGYHUVHDFWLRQFDXVHG WKHSODLQWLIIWR VXIIHU DQ LQMXU\l DV SDUW RI D )LUVW $PHQGPHQW UHWDOLDWLRQ 521$/'/((*,/0$1&LUFXLWsXGJH'DYLG&KDUYDW FODLPHPSKDVLVDGGHG D IRUPHU VXSHULQWHQGHQW RI WKH (DVWHUQ 2KLR 5HJLRQDO :DVWHZDWHU$XWKRULW\(25:$ILOHGVXLWXQGHU86& 3ROORFNDQG7KRPDVKRZHYHUGLGQRWUDLVHWKLVLVVXHDVDQ †FODLPLQJWKDWKHZDVWHUPLQDWHGLQYLRODWLRQRIKLV DVVLJQPHQWRIHUURURQDSSHDO,QVWHDGWKH\VLPSO\MRLQHGWKH )LUVW$PHQGPHQWULJKWV2Q6HSWHPEHUWKH%RDUGRI IRXU%RDUGPHPEHUVLQFRQWHVWLQJWKHGLVWULFWFRXUWjVGHQLDO 7UXVWHHVRI(25:$YRWHGWRILUH&KDUYDWRQWKHEDVLVRIKLV RI WKHLU PRWLRQ IRU VXPPDU\ MXGJPHQW EDVHG RQ TXDOLILHG DOOHJHGPDQDJHULDOLQFRPSHWHQFH&KDUYDWKRZHYHUFODLPV LPPXQLW\:HWKHUHIRUHDIILUPWKHGLVWULFWFRXUWjVGHQLDORI WKDW WKH %RDUG ILUHG KLP EHFDXVH KH UHSRUWHG (25:$jV TXDOLILHGLPPXQLW\DVWR3ROORFNDQG7KRPDVDORQJZLWKWKH YLRODWLRQVRIVHYHUDOHQYLURQPHQWDOUHJXODWLRQV+HLQLWLDOO\ %RDUGPHPEHUVEXWUHFRPPHQGWKDWWKHGLVWULFWFRXUWDGGUHVV ILOHG DQ DGPLQLVWUDWLYH FRPSODLQW SXUVXDQW WR WKH WKHLVVXHRIZKHWKHUWKH\DUHHYHQVXEMHFWWRD†FODLP ZKLVWOHEORZHUSURYLVLRQVRIWKH&OHDQ:DWHU$FW&:$DQG ZKHQWKHFDVHLVUHPDQGHG WKH6DIH'ULQNLQJ:DWHU$FW6':$&KDUYDWODWHUILOHG WKLV DFWLRQ LQ IHGHUDO FRXUW DJDLQVW (25:$ WKH IRXU & 7KLVFRXUWODFNVMXULVGLFWLRQWRUHYLHZWKHGLVWULFW PHPEHUVRI(25:$jV%RDUGRI7UXVWHHVDQGWZRDGGLWLRQDO FRXUWjVGHFLVLRQGHQ\LQJWKHGHIHQGDQWVjPRWLRQ (25:$HPSOR\HHV$OOSDUWLHVWRWKHGLVSXWHILOHGPRWLRQV IRUMXGJPHQWRQWKHSOHDGLQJV IRU VXPPDU\ MXGJPHQW  7KH GLVWULFW FRXUW LVVXHG DQ RUGHU GHQ\LQJWKHPRWLRQVIRUVXPPDU\MXGJPHQWILOHGE\&KDUYDW (25:$WKH%RDUGPHPEHUV3ROORFNDQG7KRPDVUDLVH DQG(25:$DVZHOODVWKHLQGLYLGXDOGHIHQGDQWVjPRWLRQIRU VHYHUDODUJXPHQWVVXSSRUWLQJWKHLUFODLPWKDWWKHGLVWULFWFRXUW VXPPDU\MXGJPHQWEDVHGRQTXDOLILHGLPPXQLW\ HUUHG E\ QRW JUDQWLQJ WKHLU PRWLRQ IRU MXGJPHQW RQ WKH SOHDGLQJV)LUVWWKH\LQVLVWWKDW&KDUYDWIDLOHGWRDOOHJHDQ\ (25:$DQGWKHVL[LQGLYLGXDOGHIHQGDQWVMRLQWO\DSSHDOHG YLRODWLRQRIDFRQVWLWXWLRQDOULJKW6HFRQGWKH\DUJXHWKDW 7KH\DUJXHWKDWWKHGLVWULFWFRXUWHUUHGLQIDLOLQJWRJUDQWWKH &KDUYDWjV VXLW DJDLQVW WKH %RDUG PHPEHUV 3ROORFN DQG LQGLYLGXDO GHIHQGDQWV TXDOLILHG LPPXQLW\ LQ GHQ\LQJ WKHLU 7KRPDV LQ WKHLU RIILFLDO FDSDFLWLHV LV GHILFLHQW EHFDXVH FROOHFWLYH PRWLRQ IRU MXGJPHQW RQ WKH SOHDGLQJV DQG LQ (25:$ LV WKH RQO\ UHOHYDQW GHIHQGDQW  )LQDOO\ WKH\ IDLOLQJWRKROGWKDWWKHZKLVWOHEORZHUSURYLVLRQVRIWKH&:$ PDLQWDLQ WKDW &KDUYDWjV FODLP DJDLQVW (25:$ PXVW IDLO DQGWKH6':$SUHFOXGHDVHSDUDWHDFWLRQXQGHU†)RU EHFDXVH KH KDV QRW VKRZQ WKDW DQ\ DOOHJHG FRQVWLWXWLRQDO WKHUHDVRQVVHWIRUWKEHORZZH$)),50WKHMXGJPHQWRIWKH GHSULYDWLRQZDVWKHUHVXOWRIDQRIILFLDOSROLF\  &KDUYDWY(DVWHUQ2KLR 1R 1R &KDUYDWY(DVWHUQ2KLR  5HJLRQDO:DVWHZDWHUHWDO 5HJLRQDO:DVWHZDWHUHWDO

DQG SRWHQWLDO WKUHDWV WR WKH SXEOLF KHDOWK DQG VDIHW\ RI WKH GLVWULFWFRXUWDQG5(0$1'WKHFDVHIRUIXUWKHUSURFHHGLQJV FRPPXQLW\7KLVFRXUWKDVGHFODUHGWKDWWKHm>S@XEOLFLQWHUHVW FRQVLVWHQWZLWKWKLVRSLQLRQ LVQHDULWV]HQLWKZKHQHQVXULQJWKDWSXEOLFRUJDQL]DWLRQVDUH EHLQJ RSHUDWHG LQ DFFRUGDQFH ZLWK WKH ODZl  0DURKQLF Y ,%$&.*5281' :DONHU)GWK&LU $ )DFWXDOEDFNJURXQG 7KHGHIHQGDQWVDOVRDUJXHWKDWWKHGLVWULFWFRXUWHUUHGE\ IDLOLQJ WR HQJDJH LQ DQ H[SOLFLW DQDO\VLV WKDW EDODQFHG 2IILFLDOV RI %HOPRQW &RXQW\ 2KLR FUHDWHG (25:$ &KDUYDWjVIUHHVSHHFKULJKWVDJDLQVWWKHmLQWHUHVWRIWKH6WDWH SXUVXDQW WR 2KLR 5HYLVHG &RGH †   7KLV IDFLOLW\ LV D DV DQ HPSOR\HU LQ SURPRWLQJ WKH HIILFLHQF\ RI WKH SXEOLF ZDVWHZDWHUWUHDWPHQWSODQWRQWKH2KLR5LYHUWKDWVHUYHVIRXU VHUYLFHVLWSHUIRUPVWKURXJKLWVHPSOR\HHVl3LFNHULQJ PXQLFLSDOLWLHV(DFKRIWKHIRXUPD\RUVDSSRLQWVDWUXVWHHWR 86DW7KH\FODLPWKDW&KDUYDWXQQHFHVVDULO\GHFUHDVHG (25:$7KH%RDUGRI7UXVWHHVJRYHUQVWKHRSHUDWLRQVRI HPSOR\HH PRUDOH E\ RSHQO\ FULWLFL]LQJ WKH RSHUDWLRQV RI (25:$XQGHU2KLR5HYLVHG&RGH† (25:$  7KH %RDUG PHPEHUV PDLQWDLQ WKDW WKH\ ZHUH UHTXLUHGWRUHVWUDLQ&KDUYDWjVVSHHFKLQRUGHUWRVDIHJXDUGWKH &KDUYDWEHJDQZRUNLQJDVWKHVXSHULQWHQGHQWRI(25:$ HIILFLHQF\RIWKHSODQWjVGD\WRGD\RSHUDWLRQV7KH\DJDLQ RQsXO\$WWKHWLPHRI&KDUYDWjVHPSOR\PHQWWKH PLVVWKHSRLQWZLWKWKLVFRQWHQWLRQ&KDUYDWjVUHVSRQVLELOLWLHV %RDUGFRQVLVWHGRI&KDUOHV:LOVRQWKHSUHVLGHQW0LFKDHO DVVXSHULQWHQGHQWRI(25:$LQFOXGHGPRUHWKDQPDQDJLQJ 7KRPDVWKHYLFHSUHVLGHQWsDPHV7HNHO\WKHVHFUHWDU\DQG LWVHPSOR\HHVRIDWOHDVWHTXDOLPSRUWDQFHZDVHQVXULQJWKDW )HOLSH/DYDSLHV&KDUYDWZRUNHGDORQJVLGH'DYLG7KRPDV WKHSODQWFRPSOLHGZLWKHQYLURQPHQWDOUHJXODWLRQV$OWKRXJK WKHRIILFHPDQDJHURI(25:$ZKRUHSRUWHGGLUHFWO\WRWKH WKHGLVWULFWFRXUWjVRUGHUGLGQRWGHWDLOLWVDQDO\VLVXQGHUWKH %RDUG DQG 3DXO 3ROORFN WKHQ (25:$jV FKLHI RSHUDWRU 3LFNHULQJ EDODQFLQJ WHVW LWV ZHLJKLQJ RI WKH FRPSHWLQJ (25:$ HPSOR\HG DERXW WZHQW\ SHUVRQV WR RSHUDWH LWV LQWHUHVWV LQ IDYRU RI &KDUYDW IRU WKH SXUSRVHV RI VXPPDU\ ZDVWHZDWHUDQGVHZDJHWUHDWPHQWIDFLOLW\DWWKHWLPHZKHQ MXGJPHQWLVLPSOLFLWLQLWVRUGHU &KDUYDWZDVVXSHULQWHQGHQW

+DYLQJFRQFOXGHGWKDW&KDUYDWjVVSHHFKLPSOLFDWHGPDWWHUV &KDUYDW DVVXPHG KLV SRVLWLRQ XQDZDUH RI (25:$jV RI SXEOLF FRQFHUQ LW VHHPV FOHDU WKDW &KDUYDW KDV PHW KLV QRQFRPSOLDQFHZLWKYDULRXVHQYLURQPHQWDOUHJXODWLRQV+H EXUGHQRIHVWDEOLVKLQJDSULPDIDFLHFDVHIRUUHWDOLDWLRQXQGHU TXLFNO\ OHDUQHG KRZHYHU RI LWV QXPHURXV UHJXODWRU\ %ORFKY5LEDU)GWK&LU*LYHQWKH YLRODWLRQV  7KH &:$  86& † D UHTXLUHV WRWDOLW\RIHYLGHQFHLQWKHUHFRUGWKHGHIHQGDQWVjDUJXPHQW (25:$ WR REWDLQ D 1DWLRQDO 3ROOXWDQW 'LVFKDUJH WKDW &KDUYDW KDV IDLOHG WR VWDWH D FODLP XQGHU WKH )LUVW (OLPLQDWLRQ 6\VWHP 13'(6 SHUPLW IURP WKH 2KLR $PHQGPHQWIRUWKHSXUSRVHVRIKLV†VXLWLVZHDN:H (QYLURQPHQWDO3URWHFWLRQ$JHQF\2(3$LQRUGHUWRRSHUDWH WKHUHIRUH DJUHH ZLWK WKH GLVWULFW FRXUWjV GHFLVLRQ WR GHQ\ DVDZDVWHZDWHUWUHDWPHQWIDFLOLW\(25:$LVDOVRUHTXLUHG VXPPDU\MXGJPHQWEDVHGRQTXDOLILHGLPPXQLW\IRUWKHIRXU WR IROORZ 2(3$jV VWDQGDUGV IRU WKH PDLQWHQDQFH RI WKUHH %RDUGPHPEHUV WKLQJVWKHZDVWHZDWHUFROOHFWLRQV\VWHPDWWKHSODQW WKHSODQWIDFLOLWLHVDQGWKHVOXGJHIDUPZKHUHZDVWHLV $ ILQDO QRWH FRQFHUQLQJ 3ROORFN DQG 7KRPDV LV GXH WUHDWHG2(3$UHJXODWLRQVUHTXLUHWKDWWUHDWPHQWIDFLOLWLHVWHVW $OWKRXJK 3ROORFN DQG 7KRPDV MRLQHG LQ WKH DSSHDO E\ WKH WKH ILQDO HIIOXHQW WKDW WKH\ SURGXFH DQG VHOIUHSRUW DQ\ IRXU%RDUGPHPEHUVWKH\ILOHGDVXSSOHPHQWDOPRWLRQEHIRUH YLRODWLRQVRIWKHUHJXODWLRQVWR2(3$  &KDUYDWY(DVWHUQ2KLR 1R 1R &KDUYDWY(DVWHUQ2KLR  5HJLRQDO:DVWHZDWHUHWDO 5HJLRQDO:DVWHZDWHUHWDO

&KDUYDWVRRQXQFRYHUHGSUREOHPVDW(25:$jVIDFLOLWLHV SURWHFWLRQ)XUWKHUPRUHWKH\DUJXHWKDWKLVILUVWOHWWHURQO\ )RUH[DPSOHKHGLVFRYHUHGWKDWVRPHWLPHEHWZHHQDQG FRQFHUQVSHUVRQQHOLVVXHVQRWPDWWHUVRISXEOLFFRQFHUQ  D ZDWHU SXPS DW (25:$ WKDW SURYLGHG QRQSRWDEOH ZDWHUIRUFOHDQLQJHTXLSPHQWKDGEURNHQ5DWKHUWKDQIL[WKH 7KHGHIHQGDQWVUHO\RQWKHFDVHRI&RQQLFNY0\HUV SXPSDQ(25:$HPSOR\HHKDGFURVVFRQQHFWHGWKHVHZHU 86LQVXSSRUWRIWKHLUDUJXPHQWRQWKLVLVVXH SODQWV\VWHPZLWKWKHSXEOLFZDWHUVXSSO\ZLWKRXWLQVWDOOLQJ ,Q &RQQLFN WKH 6XSUHPH &RXUW KHOG WKDW mZKHQ D SXEOLF DQ\ EDFNIORZ SUHYHQWHUV  7KLV PRGLILFDWLRQ FUHDWHG WKH HPSOR\HH VSHDNV QRW DV D FLWL]HQ XSRQ PDWWHUV RI SXEOLF SRWHQWLDO IRU UDZ VHZDJH WR HQWHU WKH SXEOLF ZDWHU VXSSO\ FRQFHUQ EXW LQVWHDG DV DQ HPSOR\HH XSRQ PDWWHUV RQO\ RI )XUWKHUPRUH &KDUYDW EHFDPH DZDUH WKDW (25:$ KDG SHUVRQDO LQWHUHVWl WKH IHGHUDO FRXUWV PXVW UHIUDLQ IURP HYDGHG HQIRUFHPHQW E\ IDLOLQJ WR VHOIUHSRUW LWV UHJXODWRU\ UHYLHZLQJDSXEOLFDJHQF\jVHPSOR\PHQWGHFLVLRQUHJDUGLQJ YLRODWLRQVWR2(3$ WKDWHPSOR\HH,GDW6XFKZDVIRXQGWREHWKHFDVHLQ &RQQLFNZKHUHWKH&RXUWGHWHUPLQHGWKDWDGLVWULFWDWWRUQH\jV ,Qs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jV VSHHFK LW FDQ QHYHU EH GHHPHG WR EH RI SXEOLF RIDQHQJLQHHULQJVWXG\RIWKHWUHDWPHQWIDFLOLWLHV7KH%RDUG FRQFHUQEHFDXVH&KDUYDWZDVDQHPSOR\HHRI(25:$QRW WRRN QR DFWLRQ LQ UHVSRQVH WR &KDUYDWjV UHTXHVW  &KDUYDW DSULYDWHFLWL]HQZKHQKHYRLFHGKLVFULWLFLVPRI(25:$jV UHSHDWHG KLV FRQFHUQV WR WKH %RDUG LQ DQRWKHU PHHWLQJ LQ QRQFRPSOLDQFH ZLWK WKH HQYLURQPHQWDO UHJXODWLRQV  :H $XJXVWRI7KH%RDUGDJDLQIDLOHGWRUHVSRQG GLVDJUHH7KH)LUVW$PHQGPHQWSURWHFWVVSHHFKRQPDWWHUV RISXEOLFFRQFHUQPDGHE\SXEOLFHPSOR\HHVLQWKHLUUROHDV (25:$jV HPSOR\HHV ZHUH QRW DFFXVWRPHG WR UHSRUWLQJ HPSOR\HHVHYHQLIWKHLUVSHHFKLVQRWFRPPXQLFDWHGWRWKH RSHUDWLRQDOYLRODWLRQVXQGHU&KDUYDWjVSUHGHFHVVRU,QIDFW SXEOLF6HH&KDSSHOY0RQWJRPHU\)LUH3URW'LVW1R &KDUYDWFODLPVWKDWWKHHPSOR\HHVIHDUHGORVLQJWKHLUMREVLI )GWK&LUm&RQVWLWXWLRQDOSURWHFWLRQ WKH\GLGVR2QHSODQWRSHUDWRU3DXO5XVVHOOKDGZULWWHQ IRUVSHHFKRQPDWWHUVRISXEOLFFRQFHUQLVQRWSUHPLVHGRQWKH DQRQ\PRXV OHWWHUV WR %RDUG 0HPEHU :LOVRQ RXWOLQLQJ FRPPXQLFDWLRQRIWKDWVSHHFKWRWKHSXEOLF7RWKHH[WHQW (25:$jV SHUPLW YLRODWLRQV  :KHQ :LOVRQ IDLOHG WR WDNH WKHQWKDW>WKH†SODLQWLII@VSRNHZLWKLQGLYLGXDOERDUG DFWLRQ5XVVHOOPDGHKLVUHSRUWVDYDLODEOHWR2(3$ZKLFK PHPEHUVDERXWWKHVHLPSRUWDQWPDWWHUVZHFRQFOXGHWKDW>KH@ FRQGXFWHGDQLQYHVWLJDWLRQRI(25:$LQFROODERUDWLRQZLWK VSRNHRQPDWWHUVRISXEOLFFRQFHUQl 2KLRjV%XUHDXRI&ULPLQDO,QYHVWLJDWLRQV2(3$LVVXHGD OHWWHUWR(25:$LQ'HFHPEHURIWKDWOLVWHGPDQ\RI &KDUDFWHUL]LQJ &KDUYDWjV VSHHFK DV UHJDUGLQJ RQO\ (25:$jV YLRODWLRQV  5XVVHOO DOOHJHG WKDW KLV FRZRUNHUV SHUVRQQHOLVVXHVDQGLQWHUQDORSHUDWLRQVLVGLVLQJHQXRXVDW VXEMHFWHGKLPWRDKRVWLOHZRUNHQYLURQPHQWDVDUHVXOWRIKLV EHVW&KDUYDWjVUHSRUWVDERXWWKHVHZDJHWUHDWPHQWIDFLOLW\jV DWWHPSWWRUHSRUWUHJXODWRU\YLRODWLRQVWR2(3$ YLRODWLRQ RI D QXPEHU RI HQYLURQPHQWDO UHJXODWLRQV ZKHQ DQDO\]HGIRUWKHLUmFRQWHQWIRUPDQGFRQWH[Wl&RQQLFN &KDUYDWjVHIIRUWVUHVXOWHGLQDJUHDWHUUHSRUWLQJRISHUPLW 86DWDUHDSHUIHFWH[DPSOHRISURWHFWHGVSHHFKWKDW YLRODWLRQV,Q1RYHPEHURI&KDUYDWDVNHG2(3$WR LVGHVLJQHGWRLQFUHDVHWKHDZDUHQHVVRIUHJXODWRU\YLRODWLRQV  &KDUYDWY(DVWHUQ2KLR 1R 1R &KDUYDWY(DVWHUQ2KLR  5HJLRQDO:DVWHZDWHUHWDO 5HJLRQDO:DVWHZDWHUHWDO

FKLOODSHUVRQRIRUGLQDU\ILUPQHVVIURPFRQWLQXLQJWR SURYLGHD7HFKQLFDO$VVLVW7HDPWRYLVLW(25:$jVSODQW HQJDJHLQWKDWDFWLYLW\DQGWKDWWKHDGYHUVHDFWLRQ 2(3$ VXEVHTXHQWO\ SODFHG (25:$ RQ LWV VLJQLILFDQW ZDV PRWLYDWHG DW OHDVW LQ SDUW DV D UHVSRQVH WR WKH QRQFRPSOLDQFHOLVW$Q2(3$VWDIISHUVRQFRQWDFWHG&KDUYDW H[HUFLVHRIWKHSODLQWLIIjVFRQVWLWXWLRQDOULJKWV RQ 'HFHPEHU   WR LQIRUP KLP WKDW 2(3$ ZRXOG UHRSHQLWVLQYHVWLJDWLRQRI(25:$6KRUWO\WKHUHDIWHU %ORFKY5LEDU)GWK&LU,WLVDOVR :LOVRQFDOOHG&KDUYDWDQGH[SUHVVHGKLVDQJHUWKDW&KDUYDWjV ZHOO HVWDEOLVKHG WKDW VSHHFK LQYROYLQJ PDWWHUV RI SXEOLF DFWLRQV KDG UHVXOWHG LQ WKH UHRSHQLQJ RI WKH 2(3$ FRQFHUQ FRQVWLWXWHV SURWHFWHG VSHHFK XQGHU WKH )LUVW LQYHVWLJDWLRQ  :LOVRQ DOVR DOOHJHGO\ PDGH D VWDWHPHQW WR $PHQGPHQW6HH5DQNLQY0F3KHUVRQ86 &KDUYDWWRWKHHIIHFWWKDW:LOVRQZRXOGQRWKDYHKLVSROLWLFDO  m7KH WKUHVKROG TXHVWLRQ    LV ZKHWKHU >DQ FDUHHUUXLQHGE\WKHVHZDJHDXWKRULW\ HPSOR\HHjV@ VSHHFK PD\ EH µIDLUO\ FKDUDFWHUL]HG DV FRQVWLWXWLQJ VSHHFK RQ D PDWWHU RI SXEOLF FRQFHUQjl &KDUYDWODWHULQIRUPHG%RDUG0HPEHU7HNHO\WKDW2IILFH FLWDWLRQVRPLWWHG7KLVULJKWWRSURWHFWHGVSHHFKKRZHYHU 0DQDJHU 3ROORFN DPRQJ RWKHUV ZDV LQ &KDUYDWjV RSLQLRQ LVQRWXQOLPLWHG2QFHDSODLQWLIIVWDWHVD†FODLPIRU UHVSRQVLEOH IRU RSHUDWLQJ WKH SODQW LQ YLRODWLRQ RI SHUPLW XQODZIXOUHWDOLDWLRQDFRXUWPXVWGHFLGHLImWKHLQWHUHVWRIWKH UHTXLUHPHQWVDQGIRUGLVFRXUDJLQJHPSOR\HHVIURPUHSRUWLQJ HPSOR\HHDVDFLWL]HQLQFRPPHQWLQJRQPDWWHUVRISXEOLF WKHYLRODWLRQV7HNHOH\VXJJHVWHGWKDW&KDUYDWUHRUJDQL]HWKH FRQFHUQRXWZHLJKVWKHHPSOR\HUjVLQWHUHVWLQSURPRWLQJWKH VWDII&KDUYDWDOOHJHVWKDWWKH%RDUGLQLWLDOO\DVVXUHGKLPRI HIILFLHQF\ RI WKH SXEOLF VHUYLFHV LW SHUIRUPV WKURXJK LWV LWVVXSSRUWIRUKLVUHRUJDQL]DWLRQSODQ7KH%RDUGKRZHYHU HPSOR\HHVl3HUU\Y0F*LQQLV)GWK&LU ODWHUFULWLFL]HGWKHSODQWKDWKHHYHQWXDOO\GHYLVHGDQGFLWHGLW KROGLQJWKDWDFRPSODLQWRIUDFHGLVFULPLQDWLRQPDGH DV DQ H[DPSOH RI KLV LQFRPSHWHQFH LQ PDQDJLQJ WKH WR DQ HPSOR\HU LQ WKH FRQWH[W RI DQ LQWHUQDO JULHYDQFH ZRUNSODFH  ,W DOVR LQYLWHG HPSOR\HHV WR D FRQILGHQWLDO FRQVWLWXWHG D PDWWHU RI SXEOLF FRQFHUQ PHULWLQJ )LUVW PHHWLQJ WR GLVFXVV WKH LPSOLFDWLRQV RI &KDUYDWjV $PHQGPHQWSURWHFWLRQLQWHUQDOTXRWDWLRQPDUNVRPLWWHG UHRUJDQL]DWLRQ SODQ  7KH %RDUG ODWHU WROG &KDUYDW WKDW 3ROORFN ZDV WKH RQO\ HPSOR\HH ZKR FRPSODLQHG DERXW 7KHHVVHQFHRIWKHGHIHQGDQWVjDUJXPHQWLVWKDWWKHOHWWHUV &KDUYDWjVSHUIRUPDQFHDVVXSHULQWHQGHQW WKDW&KDUYDWZURWHWR2(3$DQGWRWKH%RDUGGHWDLOLQJZKDW KH SHUFHLYHG WR EH EODWDQW YLRODWLRQV E\ (25:$ RI 7KHUDQFRUEHWZHHQ&KDUYDWDQGWKH%RDUGLQWHQVLILHGIURP HQYLURQPHQWDOUHJXODWLRQVFRQFHUQLQJZDVWHZDWHUWUHDWPHQW sDQXDU\ RI  XQWLO WKH WLPH RI &KDUYDWjV WHUPLQDWLRQ LQ LQ%HOPRQW&RXQW\2KLRGRQRWLQYROYHPDWWHUVRISXEOLF 6HSWHPEHURIWKDW\HDU)XUWKHUPRUH&KDUYDWDQG3ROORFN FRQFHUQ5DWKHUWKH\FRQWHQGWKDW&KDUYDWjVVWDWHPHQWVRQ KDG D GLVSXWH LQ 0D\ RI  WKDW UHVXOWHG LQ &KDUYDW WKHWHFKQRORJ\DQGRSHUDWLRQVRI(25:$RQO\LPSOLFDWHWKH GLVFLSOLQLQJ 3ROORFN IRU LQVXERUGLQDWLRQ  3ROORFN LQWHUQDOPDQDJHPHQWRI(25:$DVDEXVLQHVVHQWLW\DQG VXEVHTXHQWO\ ILOHG FKDUJHV DJDLQVW &KDUYDW ZLWK 2(3$ WKHUHIRUHGRQRWFRQFHUQWKHSXEOLF&KDUYDWjVILUVWOHWWHUZDV &KDUYDW UHVSRQGHG ZLWK D OHWWHU GHWDLOLQJ 3ROORFNjV WKH PRQWKO\ UHSRUW WKDW KH VXEPLWWHG WR 2(3$ LQ 0D\ RI PLVPDQDJHPHQW RI (25:$jV RSHUDWLRQV  7KH OHWWHU DOVR   +LV VHFRQG ZDV WKH OHWWHU WKDW KH VHQW WR WKH %RDUG KLJKOLJKWHGPRUH(25:$SHUPLWYLRODWLRQV7KH%RDUGKHOG UHJDUGLQJ(25:$jVHQYLURQPHQWDOFRPSOLDQFHRQsXQH D FORVHGGRRU PHHWLQJ RQ 0D\   DIWHU ZKLFK LW 7KHGHIHQGDQWVDUJXHWKDW&KDUYDWZURWHWKHVHOHWWHUV LQIRUPHG&KDUYDWWKDWKHKDGGD\VWRLPSURYHHPSOR\HH DVDQHPSOR\HHRI(25:$QRWDVDSXEOLFFLWL]HQDQGWKDW PRUDOHDQGSODQWRSHUDWLRQV WKH VWDWHPHQWV WKHUHIRUH GR QRW ZDUUDQW )LUVW $PHQGPHQW  &KDUYDWY(DVWHUQ2KLR 1R 1R &KDUYDWY(DVWHUQ2KLR  5HJLRQDO:DVWHZDWHUHWDO 5HJLRQDO:DVWHZDWHUHWDO

2Q sXQH   WKH 2KLR $WWRUQH\ *HQHUDO 2$* H[DPLQHmZKHWKHUWKHULJKWLVVRµFOHDUO\HVWDEOLVKHGjWKDWD QRWLILHG (25:$ WKDW KH ZDV FRPPHQFLQJ D FLYLO UHDVRQDEOHRIILFLDOZRXOGXQGHUVWDQGWKDWZKDWKHLVGRLQJ HQIRUFHPHQW DFWLRQ WKDW FRXOG LPSRVH D VXEVWDQWLDO FLYLO YLRODWHVWKDWULJKWl%UHQQDQY7RZQVKLSRI1RUWKYLOOH SHQDOW\RQ(25:$7KHOHWWHUDOVRSURSRVHGWKDW(25:$ )GWK&LUFLWDWLRQRPLWWHG HQJDJHLQQHJRWLDWLRQVZLWKWKH 2$* WRVHWWOHWKHGLVSXWH $ZDUHRIWKHJUDYLW\RIWKHVLWXDWLRQ&KDUYDWVHQWDIRUPDO 7KHIRXU%RDUGPHPEHUV3ROORFNDQG7KRPDVTXHVWLRQ OHWWHUWRWKH%RDUGUHFRPPHQGLQJWKHGLVFORVXUHRINQRZQ ZKHWKHU&KDUYDWjVUHSRUWLQJRIWKHHQYLURQPHQWDOYLRODWLRQV UHJXODWRU\ YLRODWLRQV DQG D FRPSUHKHQVLYH LQWHUQDO FRQVWLWXWHGVSHHFKSURWHFWHGE\WKH)LUVW$PHQGPHQWWKHUHE\ LQYHVWLJDWLRQ WR XQFRYHU WKH H[WHQW RI (25:$jV UDLVLQJDTXHVWLRQRIODZSURSHUO\UHYLHZDEOHRQLQWHUORFXWRU\ QRQFRPSOLDQFHZLWK2(3$jVSHUPLWUHTXLUHPHQWV&KDUYDW DSSHDO  6HH sRKQVRQ Y sRQHV  86    PDLQWDLQVWKDWWKLVOHWWHUFRQVWLWXWHGSURWHFWHGVSHHFKXQGHU KROGLQJWKDWWKHGHQLDORITXDOLILHGLPPXQLW\LVUHYLHZDEOH WKH )LUVW $PHQGPHQW \HW ZDV D VXEVWDQWLDO FDXVH RI WKH RQ LQWHUORFXWRU\ DSSHDO RQO\ LI WKH FDVH SUHVHQWV mDEVWUDFW %RDUGjVGHFLVLRQWRWHUPLQDWHKLPODWHUWKDW\HDU7KH%RDUG LVVXHV RI ODZl  :H UHYLHZ WKH GHQLDO RI D PRWLRQ IRU KHOG D VSHFLDO PHHWLQJ WR GLVFXVV &KDUYDWjV OHWWHU DQG LWV VXPPDU\ MXGJPHQW EDVHG RQ TXDOLILHG LPPXQLW\ GH QRYR SRVLWLRQ UHJDUGLQJ WKH 2$* FLYLO HQIRUFHPHQW DFWLRQ  ,W 6HH(VWDWHRI'LHWULFKY%XUURZV)GWK GHFLGHGWRH[FOXGH&KDUYDWIURPPHHWLQJZLWKWKH2$*DQG &LU IURPSDUWLFLSDWLQJLQ(25:$jVQHJRWLDWLRQVZLWKWKH2KLR DXWKRULWLHV  &KDUYDWjV OHWWHUV ZHUH SURWHFWHG VSHHFK EHFDXVH WKH\ LQYROYHG  PDWWHUV RI SXEOLF &KDUYDWDOOHJHVWKDWWKH%RDUGDQG%RDUG0HPEHU7KRPDV FRQFHUQ LQSDUWLFXODURUFKHVWUDWHGDSODQWRFRQYLQFHWKH2$*WKDWWKH %RDUG ZDV ODUJHO\ LJQRUDQW RI WKH H[WHQW RI (25:$jV (YHQ LI &KDUYDW KDV WKH ULJKW WR VXH XQGHU †  WKH HQYLURQPHQWDO YLRODWLRQV  $V SDUW RI WKH SODQ WKH %RDUG GHIHQGDQWV FRQWHQG WKDW KH KDV IDLOHG WR VWDWH D FODLP RI PDGH LW FOHDU WR (25:$ HPSOR\HHV WKDW WKH\ ZHUH QRW UHWDOLDWLRQ XQGHU WKH )LUVW $PHQGPHQW EHFDXVH KH KDV QRW SHUPLWWHG WR VSHDN GLUHFWO\ ZLWK WKH 2$* ZLWKRXW ILUVW VKRZQ WKDW KH ZDV SXQLVKHG IRU VSHDNLQJ RQ D PDWWHU RI JDLQLQJDSSURYDOIURPWKH%RDUG%RDUG0HPEHU7KRPDV mSXEOLFFRQFHUQl7KH\IXUWKHUPDLQWDLQWKDWXQGHU3LFNHULQJ DGPLWWHG WKDW &KDUYDW ZRXOG KDYH EHHQ ILUHG KDG KH Y %RDUG RI (GXFDWLRQ  86   (25:$jV DSSURDFKHG WKH 2$* ZLWK DQ\ LQIRUPDWLRQ UHJDUGLQJ LQWHUHVWDVDSXEOLFHPSOR\HULQUHVWUDLQLQJ&KDUYDWjVVSHHFK (25:$jVSHUPLWYLRODWLRQV7KH%RDUGjVHIIRUWVSDLGRII RXWZHLJKVDQ\EXUGHQLPSRVHGRQKLVULJKWVXQGHUWKH)LUVW OLWHUDOO\7KH2$*FRQFOXGHGKLVQHJRWLDWLRQVZLWK(25:$ $PHQGPHQW7KHLUSRVLWLRQWKHUHIRUHLVWKDW&KDUYDWKDV E\LPSRVLQJDILQHRIDSSUR[LPDWHO\UDWKHUWKDQWKH IDLOHGWRSURYHWKDWWKH%RDUGPHPEHUV3ROORFNRU7KRPDV PLOOLRQWKDWWKH2$*KDGLQLWLDOO\VRXJKW YLRODWHGDFOHDUO\HVWDEOLVKHGFRQVWLWXWLRQDOULJKW

&KDUYDWjVHIIRUWVWRGLVFRYHUUHSRUWDQGFRUUHFWUHJXODWRU\ 7KLVFLUFXLWKDVRXWOLQHGWKUHHHOHPHQWVWKDWIRUPWKHEDVLV YLRODWLRQVFUHDWHGWHQVLRQDPRQJWKHHPSOR\HHVDW(25:$ RID†FODLPIRUXQODZIXOUHWDOLDWLRQLQYLRODWLRQRIWKH $VDUHVXOWWKH%RDUGLQYLWHGDOOHPSOR\HHVWRDPHHWLQJWR )LUVW$PHQGPHQW7KHVHHOHPHQWVDUH H[SUHVVWKHLUFRPSODLQWVDERXW&KDUYDWLQ$XJXVWRI 2QO\ RQH HPSOR\HH DWWHQGHG DQG KLV WHVWLPRQ\ GLG QRW  WKDW WKH SODLQWLII ZDV HQJDJHG LQ D FRQVWLWXWLRQDOO\ FRQVWLWXWHDVWURQJFRPSODLQWDJDLQVW&KDUYDW SURWHFWHGDFWLYLW\WKDWWKHGHIHQGDQWjVDGYHUVHDFWLRQ FDXVHGWKHSODLQWLIIWRVXIIHUDQLQMXU\WKDWZRXOGOLNHO\  &KDUYDWY(DVWHUQ2KLR 1R 1R &KDUYDWY(DVWHUQ2KLR  5HJLRQDO:DVWHZDWHUHWDO 5HJLRQDO:DVWHZDWHUHWDO

6':$ ZKLVWOHEORZHU SURYLVLRQV SUHFOXGH &KDUYDW IURP 2Q $XJXVW   WKH %RDUG YRWHG WR FRPPHQFH SXUVXLQJ D UHPHG\ XQGHU †   7KH SODLQWLII LQ %XVK D WHUPLQDWLRQ SURFHHGLQJV DJDLQVW &KDUYDW  )LIWHHQ JURXQGV IHGHUDO HPSOR\HH VXHG KLV HPSOR\HU WKH 1DWLRQDO ZHUH OLVWHG WR MXVWLI\ WHUPLQDWLRQ  7KH UHDVRQV PRVWO\ $HURQDXWLFVDQG6SDFH$GPLQLVWUDWLRQ1$6$IRUGDPDJHV LQYROYHGFRPSODLQWVDERXW&KDUYDWjVPDQDJHPHQWVW\OHDQG EDVHG RQ WKH GRFWULQH RI %LYHQV Y 6L[ 8QNQRZQ )HGHUDO KLVIDLOXUHWRIROORZRUGHUVIURPWKH%RDUG$SUHWHUPLQDWLRQ 1DUFRWLFV$JHQWV86*LYHQWKHXQLTXHQHVV KHDULQJ ZDV KHOG E\ WKH %RDUG  %RDUG 0HPEHUV 7KRPDV RI WKH %LYHQV UHPHG\ WKH 6XSUHPH &RXUW KHOG WKDW 7HNHO\ DQG /DYDSLHV WKHQ PHW RQ 6HSWHPEHU   LQ DGPLQLVWUDWLYHUHPHGLHVDYDLODEOHWRIHGHUDOHPSOR\HHVZHUH H[HFXWLYH VHVVLRQ  7KH\ YRWHG WR WHUPLQDWH &KDUYDWjV VXIILFLHQWWRSUHFOXGH%LYHQVDFWLRQVIRUFODLPVEDVHGRQ)LUVW HPSOR\PHQWDQGWRQDPH3ROORFNDQGDQRWKHUHPSOR\HHDV $PHQGPHQWUHWDOLDWLRQ,WGLGVRKRZHYHULQOLJKWRIWKH FRVXSHULQWHQGHQWV  FRPSOH[UHJXODWLRQVDSSOLFDEOHWRIHGHUDOHPSOR\HHV6HHLG DW$VVXFKWKHKROGLQJRI%XVKDQGLWVSURJHQ\WKDW % 3URFHGXUDOEDFNJURXQG IHGHUDOHPSOR\HHVFDQQRWSXUVXHGDPDJHVUHPHGLHVDJDLQVW WKHLU  HPSOR\HUV IRU )LUVW $PHQGPHQW UHWDOLDWLRQ LV &KDUYDWILOHGDFRPSODLQWZLWKWKH'HSDUWPHQWRI/DERU GLVWLQJXLVKDEOHIURPRXUDQDO\VLVXQGHU† '2/ RQ 2FWREHU   SXUVXDQW WR WKH ZKLVWOHEORZHU SURYLVLRQV RI WKH &:$ DQG WKH 6':$  7KH RQO\ QDPHG ,Q FRQFOXVLRQ ZH DJUHH ZLWKWKH GLVWULFW FRXUWjV KROGLQJ GHIHQGDQWLQWKDWDFWLRQZDV(25:$+LVFRPSODLQWDOOHJHG WKDWWKHZKLVWOHEORZHUSURYLVLRQVRIWKH&:$DQGWKH6':$ WKDW(25:$XQODZIXOO\UHWDOLDWHGDJDLQVWKLPIRUUHSRUWLQJ GRQRWSUHFOXGH&KDUYDWIURPEULQJLQJVXLWXQGHU†IRU WKHIDFLOLW\jVUHJXODWRU\YLRODWLRQVWR(25:$jV%RDUGDQGWR DOOHJHG UHWDOLDWLRQ LQ YLRODWLRQ RI KLV SURWHFWHG )LUVW 2(3$7KH'2/jV(PSOR\PHQW6WDQGDUGV$GPLQLVWUDWLRQ $PHQGPHQWULJKWV :DJHDQG+RXU'LYLVLRQIRXQG&KDUYDWjVFRPSODLQWWREH ZLWKRXWPHULW&KDUYDWWKHQUHTXHVWHGDKHDULQJ$'2/ % 7KH GLVWULFW FRXUW SURSHUO\ KHOG WKDW WKH VL[ $GPLQLVWUDWLYH /DZ sXGJH $/s KHOG D VHULHV RI KHDULQJV LQGLYLGXDO GHIHQGDQWV QDPHG LQ &KDUYDWjV VXLW WKURXJKRXWRQKLVFODLP ZHUHQRWHQWLWOHGWRVXPPDU\MXGJPHQWEDVHGRQ TXDOLILHGLPPXQLW\ 2QsXO\WKH$/sLVVXHGD5HFRPPHQGHG'HFLVLRQ DQG2UGHUKROGLQJIRU&KDUYDW7KHRUGHUGHWDLOVDWOHQJWK  6WDQGDUGRIUHYLHZ WKHWHVWLPRQ\RIWKHZLWQHVVHVWKDWDSSHDUHGEHIRUHWKH$/s &KDUYDW SUHVHQWHG HYLGHQFH RI WKH %RDUGjV DWWHPSWV WR 7KH GRFWULQH RI TXDOLILHG LPPXQLW\ VKLHOGV JRYHUQPHQW XQGHUPLQH KLV HIIRUWV DW XQFRYHULQJ UHSRUWLQJ DQG IL[LQJ RIILFLDOVIURPOLDELOLW\DVZHOODVIURPVXLWDVORQJDVWKHLU YDULRXV UHJXODWRU\ YLRODWLRQV DW WKH WUHDWPHQW IDFLOLW\ RIILFLDOFRQGXFWmGRHVQRWYLRODWHFOHDUO\HVWDEOLVKHGVWDWXWRU\ (25:$RIIHUHGWKHWHVWLPRQ\RI%RDUG0HPEHU:LOVRQDQG RUFRQVWLWXWLRQDOULJKWVRIZKLFKDUHDVRQDEOHSHUVRQZRXOG VHYHUDO HPSOR\HHV  7KH\ FODLPHG WKDW &KDUYDW ZDV KDYH NQRZQl  +DUORZ Y )LW]JHUDOG  86   LQHIIHFWLYHDVDVXSHULQWHQGHQWWKDWKHORZHUHGPRUDOHDPRQJ $GLVWULFWFRXUWPXVWHQJDJHLQDWZRVWHSLQTXLU\ (25:$ HPSOR\HHV DQG WKDW KH ZDV LQVXERUGLQDWH LQ QRW ZKHQGHWHUPLQLQJZKHWKHUDVWDWHDFWRULVHQWLWOHGWRTXDOLILHG FRPSO\LQJZLWKWKH%RDUGjVRUGHUV LPPXQLW\)LUVWWKHFRXUWPXVWDVNZKHWKHUWKHSODLQWLIILQ WKH FLYLO DFWLRQ KDV GHPRQVWUDWHG WKH YLRODWLRQ RI D 7KH$/sIRXQGWKDW&KDUYDWKDGPHWKLVEXUGHQE\SURYLQJ FRQVWLWXWLRQDOO\ SURWHFWHG ULJKW  6HFRQG WKH FRXUW PXVW WKDW(25:$jVMXVWLILFDWLRQVIRUWHUPLQDWLRQZHUHDSUHWH[WWR  &KDUYDWY(DVWHUQ2KLR 1R 1R &KDUYDWY(DVWHUQ2KLR  5HJLRQDO:DVWHZDWHUHWDO 5HJLRQDO:DVWHZDWHUHWDO

PDVN LWV XQODZIXO PRWLYH RI SUHYHQWLQJ &KDUYDW IURP &RQJUHVVjVFDUHIXOO\WDLORUHGVFKHPHl,GDWLQWHUQDO UHSRUWLQJUHJXODWRU\YLRODWLRQV$VDUHVXOWRIKLVILQGLQJVWKH TXRWDWLRQPDUNVRPLWWHG $/sRUGHUHG(25:$WRUHLQVWDWH&KDUYDWDVVXSHULQWHQGHQW XQGHU KLV RULJLQDO HPSOR\PHQW WHUPV DQG WR SD\ &KDUYDW 7KHEXUGHQWKXVOLHVZLWKWKHGHIHQGDQWLQD†DFWLRQ  LQ EDFN SD\ ZLWK LQWHUHVW  IRU HPRWLRQDO WR SURYH SUHFOXVLRQ  m>,@I WKHUH LV D VWDWH GHSULYDWLRQ RI D GLVWUHVV DQG ORVV RI UHSXWDWLRQ  LQ H[HPSODU\ µULJKWj VHFXUHG E\ D IHGHUDO VWDWXWH †  SURYLGHV D GDPDJHVDQGDWWRUQH\IHHVLQFXUUHGLQWKHOLWLJDWLRQEHIRUH UHPHGLDOFDXVHRIDFWLRQXQOHVVWKHVWDWHDFWRUGHPRQVWUDWHV WKH$/s%RWKSDUWLHVILOHGDQDSSHDORIWKH$/sjVGHFLVLRQ E\ H[SUHVV SURYLVLRQ RU RWKHU VSHFLILF HYLGHQFH IURP WKH DSURFHHGLQJLQH[SOLFDEO\VWLOOSHQGLQJEHIRUHWKH'2/ VWDWXWHLWVHOIWKDW&RQJUHVVLQWHQGHGWRIRUHFORVHVXFKSULYDWH HQIRUFHPHQWl:ULJKWY&LW\RI5RDQRNH5HGHYHORSPHQW &KDUYDW DOVR FRPPHQFHG DQ DFWLRQ LQ IHGHUDO FRXUW RQ +RXV $XWK  86    KROGLQJ WKDW WKH 6HSWHPEHU   DJDLQVW (25:$ DQG WKH VL[ QDPHG %URRNH$PHQGPHQWWRWKH+RXVLQJ$FWZKLFKSURYLGHVWKH GHIHQGDQWV FODLPLQJ YLRODWLRQV RI  86& †  DQG 'HSDUWPHQW RI +RXVLQJ DQG 8UEDQ 'HYHORSPHQW ZLWK YDULRXV VWDWHODZ SURYLVLRQV  +H FRQWHQGV WKDW KLV PHFKDQLVPVWRHQIRUFHWKHULJKWVLQWKH$FWGRHVQRWSUHFOXGH WHUPLQDWLRQ ZDV LQ UHWDOLDWLRQ IRU WKH H[HUFLVH RI KLV )LUVW SODLQWLIIV IURP DOVR HQIRUFLQJ WKH $FW WKURXJK VXLWV XQGHU $PHQGPHQWIUHHVSHHFKULJKWV(25:$DQGWKHIRXU%RDUG † PHPEHUV ILOHG D FRPELQHG DQVZHU  3ROORFN DQG 7KRPDV MRLQWO\ILOHGDVHSDUDWHDQVZHU2Q)HEUXDU\WKH ,QHVVHQFHWKHGHIHQGDQWVDUJXHWKDWEHFDXVH&RQJUHVVKDV GLVWULFW FRXUW VWD\HG WKH FDVH SHQGLQJ WKH GLVSRVLWLRQ RI FUHDWHG D IHGHUDO VWDWXWRU\ ULJKW WR EH IUHH IURP DGYHUVH &KDUYDWjVDGPLQLVWUDWLYHFODLPEHIRUHWKH'2/7KHGLVWULFW HPSOR\PHQW DFWLRQ DV D UHVXOW RI EULQJLQJ WR OLJKW DQ FRXUWOLIWHGWKHVWD\RQFHWKH$/sLVVXHGKLVRUGHU HPSOR\HUjV YLRODWLRQV RI WKH &:$ DQG 6':$ WKH DGPLQLVWUDWLYH UHPHGLHV SURYLGHG E\ WKH ZKLVWOHEORZHU &KDUYDWWKHQILOHGDPRWLRQIRUSDUWLDOVXPPDU\MXGJPHQW SURYLVLRQV RI WKHVH $FWV VKRXOG EH H[FOXVLYH  7KH FUXFLDO DUJXLQJWKDWWKH$/sjVRUGHUZDVUHVMXGLFDWDLQKLVIDYRURQ SRLQWKRZHYHULVWKDW&KDUYDWjV†VXLWUDLVHVWKHLVVXH WKH LVVXHV RI OLDELOLW\ DQG LQMXQFWLYH UHOLHI XQGHU †  RIZKHWKHUWKHGHIHQGDQWVYLRODWHGKLVFRQVWLWXWLRQDOULJKWWR (25:$ WKH IRXU %RDUG PHPEHUV 3ROORFN DQG 7KRPDV IUHH VSHHFK QRW VLPSO\ ZKHWKHU &KDUYDW VXIIHUHG IURP DQ MRLQWO\RSSRVHG&KDUYDWjVPRWLRQ7KH\DOVRFURVVPRYHGIRU DGYHUVHHPSOR\PHQWDFWLRQ7KLVGLVWLQFWLRQLVSHUKDSVEHVW MXGJPHQW RQ WKH SOHDGLQJV RU DOWHUQDWLYHO\ VXPPDU\ GHPRQVWUDWHGE\RXUFLUFXLWLQWKHFDVHRI/LOODUGY6KHOE\ MXGJPHQWRQWKHEDVLVRITXDOLILHGLPPXQLW\3ROORFNDQG &RXQW\%RDUGRI(GXFDWLRQ)GWK&LU 7KRPDVILOHGDQDGGLWLRQDOVXSSOHPHQWDOPRWLRQIRUVXPPDU\ ZKLFKKHOGWKDW7LWOH,;jVVWDWXWRU\UHPHG\IRUFODLPV MXGJPHQWDUJXLQJLQSDUWLFXODUWKHLUODFNRIOLDELOLW\EHFDXVH RIGLVFULPLQDWLRQLQDQHGXFDWLRQDOSURJUDPUHFHLYLQJIHGHUDO WKH\KDGQRDXWKRULW\WRKLUHRUILUH&KDUYDW7KHGLVWULFWFRXUW ILQDQFLDODVVLVWDQFHGRHVQRWSUHFOXGHSODLQWLIIVIURPEULQJLQJ JUDQWHG&KDUYDWjVPRWLRQWRDPHQGKLVFRPSODLQWE\DGGLQJ DVXEVWDQWLYHGXHSURFHVVFODLPXQGHU†,QVXPWKH DFODLPIRUFRQVSLUDF\XQGHU86&† GHIHQGDQWVKDYHIDLOHGWRSURYHWKDW&RQJUHVVLQWHQGHGIRUWKH ZKLVWOHEORZHUSURYLVLRQVRIWKH&:$DQG6':$WRSUHFOXGH 2Q 0DUFK   WKH GLVWULFW FRXUW UXOHG RQ DOO RI WKH WKHHQIRUFHPHQWRIFRQVWLWXWLRQDOULJKWVWKURXJK† SHQGLQJ PRWLRQV  ,W KHOG WKDW &KDUYDW KDG VWDWHG D YLDEOH FODLPIRUD)LUVW$PHQGPHQWYLRODWLRQXQGHU†DQGWKDW )LQDOO\WKHGHIHQGDQWVFLWH%XVKY/XFDV86 WKH VWDWXWRU\ ZKLVWOHEORZHU SURYLVLRQV SURYLGLQJ IRU  LQ VXSSRUW RI WKHLU FRQWHQWLRQ WKDW WKH &:$ DQG  &KDUYDWY(DVWHUQ2KLR 1R 1R &KDUYDWY(DVWHUQ2KLR  5HJLRQDO:DVWHZDWHUHWDO 5HJLRQDO:DVWHZDWHUHWDO

SURYLGH IRU DQ DGPLQLVWUDWLYH UHPHG\ ZLWK ILQDO UHYLHZ DGPLQLVWUDWLYHUHPHGLHVGRQRWSUHFOXGHKLPIURPSURFHHGLQJ DYDLODEOHLQIHGHUDOFRXUW ZLWK KLV †  DFWLRQ  )XUWKHUPRUH LW GHQLHG WKH FURVV PRWLRQIRUMXGJPHQWRQWKHSOHDGLQJVDQGGHQLHGWKHPRWLRQV &KDUYDWUHVSRQGVWRWKHGHIHQGDQWVjFRQWHQWLRQE\LQVLVWLQJ RIWKHVL[LQGLYLGXDOGHIHQGDQWVIRUVXPPDU\MXGJPHQWRQWKH WKDW(QJOLVKY*HQHUDO(OHFWULF&R86LV EDVLV RI TXDOLILHG LPPXQLW\  )LQDOO\ LW JUDQWHG WKH GLUHFWO\RQSRLQW7KHSODLQWLIILQ(QJOLVKILOHGDFRPSODLQW GHIHQGDQWVjPRWLRQWRGLVPLVV&KDUYDWjVFRQVSLUDF\FODLPV ZLWKWKH6HFUHWDU\RI/DERUXQGHUWKHZKLVWOHEORZHUSURYLVLRQ XQGHU† RIWKH(QHUJ\5HRUJDQL]DWLRQ$FW6HH(QJOLVK86DW 6KHWKHQLQLWLDWHGDVHSDUDWHGLYHUVLW\VXLWLQIHGHUDOFRXUW ,,$1$/<6,6 DJDLQVWKHUHPSOR\HUUDLVLQJVWDWHODZFODLPVIRUZURQJIXO GLVFKDUJH DQG IRU WKH LQWHQWLRQDO LQIOLFWLRQ RI HPRWLRQDO $ 7KHZKLVWOHEORZHUSURYLVLRQVRI WKH&:$DQG GLVWUHVV6HHLGDW7KH&RXUWZDVIDFHGZLWKWKHTXHVWLRQ 6':$GRQRWSUHFOXGH&KDUYDWIURPSXUVXLQJ RI mZKHWKHU WKH )HGHUDO *RYHUQPHQW KDV SUHHPSWHG D )LUVW $PHQGPHQW UHWDOLDWLRQ FODLP XQGHU SHWLWLRQHUjVVWDWHODZWRUWFODLPIRULQWHQWLRQDOLQIOLFWLRQRI † HPRWLRQDOGLVWUHVVl,GDW%HFDXVHWKHLVVXHRIIHGHUDO SUHHPSWLRQ RI VWDWH ODZ GLIIHUV IURP WKH 1DWLRQDO 6HD 7KHGHIHQGDQWVPDLQWDLQWKDWWKHUHLVDWKUHVKROGTXHVWLRQ &ODPPHUV TXHVWLRQ RI ZKHWKHU VWDWXWRU\ HQIRUFHPHQW WKDWPXVWEHUHVROYHGEHIRUHUHYLHZLQJZKHWKHU&KDUYDWKDV PHFKDQLVPVSUHFOXGHIHGHUDOVXLWVXQGHU86&† VWDWHG D FODLP XQGHU  86& †   7KH\ DUJXH WKDW (QJOLVKLVQRWDVRQSRLQWDV&KDUYDWFODLPVLWWREH &RQJUHVV LQWHQGHG WR IRUHFORVH WKH W\SH RI UHWDOLDWLRQ VXLW EURXJKW E\ &KDUYDW XQGHU †  E\ HQDFWLQJ WKH 7KH6XSUHPH&RXUWKRZHYHUKDVQDUURZHGWKH1DWLRQDO ZKLVWOHEORZHU SURYLVLRQV RI WKH &:$ DQG 6':$  ,Q LWV 6HD&ODPPHUVGRFWULQHWKURXJKVXEVHTXHQWFDVHODZZKLFK SUHWULDORUGHUWKHGLVWULFWFRXUWKHOGWKDWWKHZKLVWOHEORZHU OHDGVWRWKHFRQFOXVLRQWKDWWKHZKLVWOHEORZHUPHFKDQLVPV SURYLVLRQVGRQRWSUHFOXGH&KDUYDWjV†VXLW SURYLGHG E\ WKH &:$ DQG WKH 6':$ GR QRW SUHFOXGH DQ HPSOR\HHRIDSXEOLFHPSOR\HUIURPVXLQJXQGHU†IRU $OWKRXJKZHKDYHMXULVGLFWLRQRQO\RYHUILQDOMXGJPHQWVRI D YLRODWLRQ RI KLV RU KHU )LUVW $PHQGPHQW ULJKWV  ,Q WKHGLVWULFWFRXUWSXUVXDQWWR86&†DQGVSHFLILF SDUWLFXODU WKH &RXUW KDV KHOG WKDW m>W@KH DYDLODELOLW\ RI NLQGV RI LQWHUORFXWRU\ RUGHUV ZH UHWDLQ WKH GLVFUHWLRQ WR DGPLQLVWUDWLYHPHFKDQLVPVWRSURWHFWWKHSODLQWLIIjVLQWHUHVWV H[HUFLVH SHQGHQW DSSHOODWH MXULVGLFWLRQ  m7KH GRFWULQH RI LV QRW QHFHVVDULO\ VXIILFLHQW WR GHPRQVWUDWH WKDW &RQJUHVV SHQGHQWDSSHOODWHMXULVGLFWLRQDOORZVDQDSSHOODWHFRXUWLQLWV LQWHQGHGWRIRUHFORVHD†UHPHG\l*ROGHQ6WDWH7UDQVLW GLVFUHWLRQ WR H[HUFLVH MXULVGLFWLRQ RYHU LVVXHV WKDW DUH QRW &RUS Y &LW\ RI /RV $QJHOHV  86    LQGHSHQGHQWO\DSSHDODEOHZKHQWKRVHLVVXHVDUHµLQH[WULFDEO\ KROGLQJWKDWWKH1DWLRQDO/DERU5HODWLRQV%RDUGjVH[FOXVLYH LQWHUWZLQHGj ZLWK PDWWHUV RYHU ZKLFK WKH DSSHOODWH FRXUW MXULVGLFWLRQWRUHPHG\XQIDLUODERUSUDFWLFHVE\HPSOR\HUVDQG SURSHUO\DQGLQGHSHQGHQWO\KDVMXULVGLFWLRQl&KDPEHUVY XQLRQV GRHV QRW SUHFOXGH D SODLQWLII IURP ILOLQJ VXLW XQGHU 2KLR 'HSjW RI +XPDQ 6HUYV  )G   WK &LU †  WR SURWHFW ODERU ULJKWV XQGHU WKH 1DWLRQDO /DERU   %HFDXVH ZH KDYH SURSHU MXULVGLFWLRQ RYHU WKH 5HODWLRQV$FWDJDLQVWJRYHUQPHQWDOLQWHUIHUHQFHm5DWKHU LQWHUORFXWRU\DSSHDOE\WKHIRXU%RDUGPHPEHUV3ROORFNDQG WKHVWDWXWRU\IUDPHZRUNPXVWEHVXFKWKDWDOORZLQJDSODLQWLII 7KRPDVIURPWKHGLVWULFWFRXUWjVGHQLDORIVXPPDU\MXGJPHQW WR EULQJ D †  DFWLRQ ZRXOG EH LQFRQVLVWHQW ZLWK EDVHG RQ TXDOLILHG LPPXQLW\ DQG EHFDXVH WKH WKUHVKROG TXHVWLRQ UDLVHG LV LQH[WULFDEO\ LQWHUWZLQHG ZLWK &KDUYDWjV  &KDUYDWY(DVWHUQ2KLR 1R 1R &KDUYDWY(DVWHUQ2KLR  5HJLRQDO:DVWHZDWHUHWDO 5HJLRQDO:DVWHZDWHUHWDO

†  FODLP ZH VKDOO H[HUFLVH RXU SHQGHQW DSSHOODWH $XWKRULW\ Y 1DWLRQDO 6HD &ODPPHUV $VVjQ  86  MXULVGLFWLRQWRUHYLHZWKHGLVWULFWFRXUWjVGHWHUPLQDWLRQWKDW  WKHZKLVWOHEORZHUSURYLVLRQVRIWKH&:$DQGWKH6':$GR QRWIRUHFORVH&KDUYDWIURPSXUVXLQJKLVFODLP ,Q 1DWLRQDO 6HD &ODPPHUV LQGLYLGXDO ILVKHUPHQ DQG DQ DVVRFLDWLRQ RI ILVKHUPHQ EURXJKW D FODVV DFWLRQ DJDLQVW 7KH&:$SURYLGHVDQDGPLQLVWUDWLYHUHPHG\WKDWSURWHFWV YDULRXV IHGHUDO VWDWH DQG ORFDO RIILFLDOV IRU YLRODWLQJ HPSOR\HHVZKRUHSRUWYLRODWLRQVRIWKDW$FW,WVWDWHV UHJXODWLRQV XQGHU WKH )HGHUDO :DWHU 3ROOXWLRQ DQG &RQWURO $FW ):3&$ WKH 0DULQH 3URWHFWLRQ 5HVHDUFK DQG 1R SHUVRQ VKDOO ILUH RU LQ DQ\ RWKHU ZD\ GLVFULPLQDWH 6DQFWXDULHV $FW RI  0356$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m>L@QYLHZRIWKHVHHODERUDWHHQIRUFHPHQWSURYLVLRQVLWFDQQRW 86&†D7KHVHFWLRQWKHQRXWOLQHVWKHSURFHGXUH EH DVVXPHG WKDW &RQJUHVV LQWHQGHG WR DXWKRUL]H E\ IRU ILOLQJ D FRPSODLQW ZLWK WKH 6HFUHWDU\ RI /DERU  $ LPSOLFDWLRQDGGLWLRQDOMXGLFLDOUHPHGLHVIRUSULYDWHFLWL]HQV ZKLVWOHEORZHU SURYLVLRQ LQ WKH 6':$ VHWV IRUWK WKH VDPH VXLQJ XQGHU 0356$ DQG ):3&$l  ,G  )XUWKHUPRUH LW SURFHGXUHVIRUDGPLQLVWUDWLYHUHPHGLHVIRUHPSOR\HHVFRYHUHG VWDWHG WKDW m>Z@KHQ WKH UHPHGLDO GHYLFHV SURYLGHG LQ D E\WKDW$FW6HH86&†ML%RWKVWDWXWHVSURYLGH SDUWLFXODU $FW DUH VXIILFLHQWO\ FRPSUHKHQVLYH WKH\ PD\ IRUDIDFWILQGLQJLQYHVWLJDWLRQDQGKHDULQJE\WKH6HFUHWDU\ VXIILFHWRGHPRQVWUDWHFRQJUHVVLRQDOLQWHQWWRSUHFOXGHWKH RI/DERU7KH6HFUHWDU\LVWKHQDXWKRUL]HGWRLVVXHDQLQLWLDO UHPHG\RIVXLWVXQGHU†l,GDW)LQDOO\WKH&RXUW RUGHU DQG JUDQW DSSURSULDWH UHOLHI  7KHVH RUGHUV DUH FRQFOXGHG WKDW mWKH H[LVWHQFH RI WKHVH H[SUHVV UHPHGLHV DSSHDODEOHWRDQ$/sZKRVHGHFLVLRQPD\DOVREHDSSHDOHG GHPRQVWUDWHV QRW RQO\ WKDW &RQJUHVV LQWHQGHG WR IRUHFORVH WR WKH $GPLQLVWUDWLYH 5HYLHZ %RDUG RI WKH '2/  6HH  LPSOLHGSULYDWHDFWLRQVEXWDOVRWKDWLWLQWHQGHGWRVXSSODQW &)5††G D)LQDODGPLQLVWUDWLYHRUGHUVDUH DQ\UHPHG\WKDWRWKHUZLVHZRXOGEHDYDLODEOHXQGHU†l DSSHDODEOHWRWKH86&RXUWRI$SSHDOVLQWKHUHJLRQZKHUH ,GDW WKHDOOHJHGYLRODWLRQRFFXUUHG6HH 86&††E E86&†ML  $ 7KH 1DWLRQDO 6HD &ODPPHUV GRFWULQH KRZHYHU LV QRW GLUHFWO\SDUDOOHOWRWKHTXHVWLRQRIZKHWKHUWKHZKLVWOHEORZHU 7KHGHIHQGDQWVFRQWHQGWKDWWKHFRQJUHVVLRQDOLQWHQWEHKLQG SURYLVLRQVRIWKH&:$DQG6':$IRUHFORVHD†VXLW WKHZKLVWOHEORZHUSURYLVLRQVFRQWDLQHGLQWKH&:$DQGWKH EDVHGRQWKHYLRODWLRQRIDQLQGLYLGXDOjVFRQVWLWXWLRQDOULJKWV 6':$ ZDV WR FUHDWH DQ H[FOXVLYH UHPHG\ WKDW SUHFOXGHV )LUVWWKHSODLQWLIIVLQ1DWLRQDO6HD&ODPPHUVZHUHVXLQJWR HPSOR\HHVVXFKDV&KDUYDWIURPEULQJLQJD†FODLPLQ HQIRUFHVXEVWDQWLYHULJKWVVHWIRUWKLQWKHYHU\VWDWXWHVWKDW IHGHUDOFRXUW1ROHJLVODWLYHKLVWRU\LVFLWHGWRVXSSRUWWKHLU SURYLGHIRUFLWL]HQVXLWVZKHUHDV&KDUYDWLVVHHNLQJUHOLHIIRU SRVLWLRQ0RUHRYHUWKHVWDWXWHVDUHVLOHQWRQWKLVLVVXH7KH DQDOOHJHGYLRODWLRQRIKLV)LUVW$PHQGPHQWULJKWV6HFRQG GHIHQGDQWVFODLPKRZHYHUWKDWWKHLUDUJXPHQWLVVXSSRUWHG WKHFLWL]HQVXLWSURYLVLRQVRIWKH):3&$DQGWKH0356$ E\ WKH GRFWULQH VHW IRUWK LQ 0LGGOHVH[ &RXQW\ 6HZHUDJH FUHDWHDGLUHFWFDXVHRIDFWLRQLQIHGHUDOFRXUWZKHUHDVWKH ZKLVWOHEORZHU SURYLVLRQV DW LVVXH LQ &KDUYDWjV FDVH RQO\