Isle Royale Boaters v. Norton

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH   ,VOH5R\DOH%RDWHUV$VVjQ 1R (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU HWDOY1RUWRQHWDO )LOH 1DPH DS

.LP 81,7(' 67$7(6 '(3$570(17 2) s867,&( 81,7('67$7(6&28572)$33($/6 :DVKLQJWRQ '& IRU $SSHOOHHV  21 %5,()  sRKQ s %XUVFK:$51(5125&5266 s8''*UDQG5DSLGV )257+(6,;7+&,5&8,7 0LFKLJDQIRU$SSHOODQWV7RGG6.LP81,7('67$7(6 BBBBBBBBBBBBBBBBB '(3$570(172)s867,&(:DVKLQJWRQ'&*OHQGD* *RUGRQ 81,7(' 67$7(6 $77251(< 0DUTXHWWH 0LFKLJDQIRU$SSHOOHHV ,6/( 52<$/( %2$7(56 ; $662&,$7,21HWDO  0225( GHOLYHUHG WKH RSLQLRQ RI WKH FRXUW LQ ZKLFK )25(67(5'sMRLQHG%$7&+(/'(5sMRLQHGLQs 3ODLQWLIIV$SSHOODQWV  0225(jVRSLQLRQDVWR3DUWV,DQG,,DQGLQWKHMXGJPHQW  1R  Y ! BBBBBBBBBBBBBBBBB   23,1,21 *$/( 125721HWDO  BBBBBBBBBBBBBBBBB 'HIHQGDQWV$SSHOOHHV   .$5(1 1(/621 0225( &LUFXLW sXGJH  7KLV FDVH 1 LQYROYHVDFKDOOHQJHWRWKH*HQHUDO0DQDJHPHQW3ODQWKDWWKH $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW 1DWLRQDO3DUN6HUYLFHLVVXHGIRU,VOH5R\DOH1DWLRQDO3DUNRQ IRUWKH:HVWHUQ'LVWULFWRI0LFKLJDQDW0DUTXHWWH $XJXVW    7KH SODLQWLIIV WKH ,VOH 5R\DOH %RDWHUV 1Rn*RUGRQs4XLVW'LVWULFWsXGJH $VVRFLDWLRQ DQG D QXPEHU RI LQGLYLGXDO ERDWHUV DQG RWKHU YLVLWRUVWR,VOH5R\DOHDUJXHWKDWE\UHPRYLQJFHUWDLQGRFNV $UJXHG'HFHPEHU DQGDOWHULQJWUDLODFFHVVDQGVKHOWHUIDFLOLWLHVDWRWKHUGRFNV WKH 3DUN 6HUYLFHjV  *HQHUDO 0DQDJHPHQW 3ODQ ZLOO 'HFLGHGDQG)LOHG0D\ VLJQLILFDQWO\ OLPLW WKH ERDWHUVj DFFHVV WR WKH LVODQG DQG FRQWUDYHQHWKHLQWHQWRI&RQJUHVVZKHQLWPDGH,VOH5R\DOH %HIRUH%$7&+(/'(5DQG0225(&LUFXLWsXGJHV D1DWLRQDO:LOGHUQHVV$UHDLQ:HFRQFOXGHWKDWWKH )25(67(5&KLHI'LVWULFWsXGJH DGGLWLRQUHPRYDODQGUHORFDWLRQRIGRFNVSURSRVHGLQWKH *HQHUDO0DQDJHPHQW3ODQLVZLWKLQWKHGLVFUHWLRQJUDQWHGE\ BBBBBBBBBBBBBBBBB WKH:LOGHUQHVV$FWDQGWKH1DWLRQDO3DUN6HUYLFHjV2UJDQLF $FW7KXVZH$)),50WKHGLVWULFWFRXUWjVGHFLVLRQJUDQWLQJ &2816(/ VXPPDU\MXGJPHQWWRWKHGHIHQGDQWV $5*8('5REHUWssRQNHU:$51(5125&5266 ,%$&.*5281' s8'' *UDQG 5DSLGV 0LFKLJDQ IRU $SSHOODQWV  7RGG 6 ,VOH5R\DOH1DWLRQDO3DUNFRQVLVWVRIDVHULHVRILVODQGVLQ WKHQRUWKHUQUHDFKHVRI/DNH6XSHULRU7KHPDLQLVODQGLV

7KH +RQRUDEOH .DUO 6 )RUHVWHU &KLHI 8QLWHG 6WDWHV 'LVWULFW sXGJH DERXW IRUW\ILYH PLOHV ORQJ DQG QLQH PLOHV ZLGH LW LV IRU WKH (DVWHUQ 'LVWULFW RI .HQWXFN\ VLWWLQJ E\ GHVLJQDWLRQ VXUURXQGHGE\DERXWIRXUKXQGUHGVPDOOHULVODQGV,WKDVEHHQ

 1R ,VOH5R\DOH%RDWHUV$VVjQ   ,VOH5R\DOH%RDWHUV$VVjQ 1R HWDOY1RUWRQHWDO HWDOY1RUWRQHWDO

DQDWLRQDOSDUNVLQFHDQGLWZDVGHVLJQDWHGDVDQDWLRQDO WKH *03 DLPHG WR mVHSDUDWH PRWRUL]HG DQG QRQPRWRUL]HG ZLOGHUQHVVDUHDLQ7KHSDUNjVDSSUR[LPDWHO\ XVHVLQVRPHDUHDVls$DW*03DW YLVLWRUVHDFK\HDUDUULYHE\IHUU\VHDSODQHDQGSULYDWHERDWWR KLNHFDPSDQGHQMR\WKHSDUNjVZDWHUV7KHSDUNKDV $VSDUWRIDQHIIRUWWRVHSDUDWHQRQPRWRUL]HGXVHVRIWKH PLOHVRIWUDLOVPDQ\FDPSJURXQGVDQGRQHRYHUQLJKWORGJH SDUNIURPPRWRUL]HGXVHVRIWKHSDUNWKHILQDO*03LQFOXGHG $OWKRXJKWKHSDUNLVFORVHGWRYLVLWRUVIURP2FWREHUWKURXJK DQXPEHURIFKDQJHVWKDWZRXOGDIIHFWPRWRUL]HGERDWXVHUVj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 WR WDNH WKH SODFH RI WKH PDVWHU SODQ WKDW KDG ERDWHUV ZRXOG VWLOO EH DEOH WR DFFHVV DOO DUHDV RI WKH SDUN JRYHUQHG WKH SDUN VLQFH   7KH *03 ZRXOG VHUYH WR DOEHLWZLWKSHUKDSVDORQJHUKLNHIURPDUHORFDWHGGRFNWKH JXLGH mIXWXUH XVH RI UHVRXUFHV DQG IDFLOLWLHV WR FODULI\ FKDQJHVZRXOGLQVRPHZD\VOLPLWERDWHUVjDFFHVVWRVKHOWHUV UHVHDUFKDQGUHVRXUFHPDQDJHPHQWQHHGVDQGSULRULWLHVDQG DQGWUDLOV8QGHUWKH*03WKH3DUN6HUYLFHZRXOGHOLPLQDWH WRDGGUHVVFKDQJLQJOHYHOVRISDUNYLVLWDWLRQDQGXVHlsRLQW WKHGRFNVDW7KUHH0LOHZKLFKJDYHERDWHUVDFFHVVWRHLJKW $SSHQGL[ms$lDW*03DW*HQHUDOPDQDJHPHQW VKHOWHUVDW'XQFDQ%D\ZKLFKRIIHUHGWZRVKHOWHUVDQGDW SODQVXVXDOO\SURYLGHJXLGDQFHRYHUDILIWHHQWRWZHQW\\HDU 6LVNLZLW%D\ZKLFKJDYHERDWHUVGLUHFWDFFHVVWRWKHLVODQGjV SHULRG)ROORZLQJDVHULHVRISXEOLFIRUXPVDQGQHZVOHWWHUV WUDLOV\VWHP7KHGRFNDW0F&DUJRH&RYHZKLFKRIIHUHGVL[ DGUDIWRIWKH*03ZDVGLVWULEXWHGLQ0DUFKRI$IWHU VKHOWHUVDQGZDVGLUHFWO\RQWKHWUDLOV\VWHPZRXOGEHPRYHG DIXUWKHUSHULRGRISXEOLFFRPPHQWWKH3DUN6HUYLFHLVVXHG DSSUR[LPDWHO\RQHPLOHWRZDUGWKHPRXWKRIWKHFRYHVRWKDW WKHILQDOYHUVLRQRQ$XJXVW ERDWHUVFRXOGUHDFKWKHPDLQWUDLOV\VWHPDQGWKHVKHOWHUVRQO\ E\DRQHPLOHmVSXUlWUDLO6LPLODUO\WKH*03FDOOVIRUWKH $PRQJRWKHUFRQFHUQVWKH*03VRXJKWWRDGGUHVVYLVLWRUVj 3DUN6HUYLFHWRUHPRYHDFFHVVWRWKHPDLQWUDLOV\VWHPIURP FRPSODLQWVUHJDUGLQJQRLVHOHYHOVZLWKLQWKHSDUN7KH*03 WKH GRFN DW &KLSSHZD +DUERU E\ HOLPLQDWLQJ WKH WZRPLOH QRWHGWKDWDOWKRXJK,VOH5R\DOHUHFHLYHVIHZHUYLVLWRUVWKDQ ,QGLDQ3RUWDJH7UDLOWKDWFRQQHFWHGWKHP%RDWHUVFRXOGVWLOO PDQ\ QDWLRQDO SDUNV LW KDV D KLJK QXPEHU RI RYHUQLJKW UHDFKWKHPDLQWUDLOV\VWHPYLDRWKHUGRFNV YLVLWRUVDQGm>Z@LWK,VOH5R\DOHjVGHQVLW\RIEDFNFRXQWU\XVH GLIIHULQJSUHIHUHQFHVDQGH[SHFWDWLRQVDUHHVSHFLDOO\HYLGHQWl 7KH WKUHH GRFNV WKDW WKH *03 ZRXOG HOLPLQDWH HQWLUHO\ s$DW*03DWm6RPHYLVLWRUVFRPSODLQWKDWWKHLU ZRXOGEHUHSODFHGZLWKILYHQHZGRFNV+RZHYHUXQOLNHWKH ZLOGHUQHVV H[SHULHQFHV DUH EHLQJ FRPSURPLVHG E\ YLVXDO WKUHH SUHYLRXV GRFNV ZKLFK ZHUH DOO ORFDWHG RQ WKH PDLQ LQWUXVLRQVDQGQRLVHIURPSDUNGHYHORSPHQWVMHWVDQGRWKHU LVODQGIRXURIWKHILYHQHZGRFNVZRXOGEHRQVXUURXQGLQJ DLUFUDIW ERDWV DQG WKH EHKDYLRU DQG DFWLYLWLHV RI RWKHU LVODQGVZLWKQRDFFHVVWRWKHPDLQLVODQG7KHVHIRXUGRFNV YLVLWRUV VXFK DV KDYLQJ ORXG SDUWLHV DQG SOD\LQJ VWHUHRVl ZRXOGEHDWsRKQV,VODQG:DVKLQJWRQ,VODQG:ULJKW,VODQG s$DW*03DW%HFDXVH,VOH5R\DOHjVGHVLJQDWLRQDV DQG&U\VWDO&RYHRIWKHIRXUQRQHRIWKHVLWHVZRXOGKDYH D ZLOGHUQHVV DUHD mFDUULHV ZLWK LW FHUWDLQ H[SHFWDWLRQV IRU VKHOWHUVLPPHGLDWHO\EXWKLVWRULFDOVWUXFWXUHVDW:DVKLQJWRQ YLVLWRUVVXFKDVVROLWXGHDQGTXLHWls$DW*03DW ,VODQGDQG&U\VWDO&RYHZRXOGEHDGDSWHGIRUVXFKXVH7KH ILIWK QHZ GRFN ZRXOG EH DW )LVKHUPDQjV +RPH  7KH 1R ,VOH5R\DOH%RDWHUV$VVjQ   ,VOH5R\DOH%RDWHUV$VVjQ 1R HWDOY1RUWRQHWDO HWDOY1RUWRQHWDO

)LVKHUPDQjV+RPHGRFNZRXOGRIIHUQRDFFHVVWRWKHPDLQ H[LVWHQFHWRSHUSHWXLW\RIHYHU\GRFNFXUUHQWO\DWWKH3DUNl WUDLOV\VWHPEXWWKHVLWHKDVKLVWRULFDOVWUXFWXUHVWKDWZRXOGEH s$ DW  DQG EHFDXVH WKH 3DUN 6HUYLFHjV GHFLVLRQV FRQVLGHUHGIRUFRQYHUVLRQWRVKHOWHUV1RQVKHOWHUFDPSLQJ UHJDUGLQJWKHGRFNVZHUHQRWDUELWUDU\RUFDSULFLRXVXQGHUWKH ZRXOGEHDYDLODEOHDWDOOILYHVLWHV :LOGHUQHVV$FWDQGWKH,VOH5R\DOH:LOGHUQHVV$FWWKHFRXUW ZRXOGQRWLQWHUYHQH7KHFRXUWDOVRUHMHFWHGWKHSODLQWLIIVj )LQDOO\ WKH *03 FDOOV IRU WKH 3DUN 6HUYLFH WR UHSODFH D 2UJDQLF $FW DQG 1DWLRQDO (QYLURQPHQWDO 3ROLF\ $FW GRFNDW+D\%D\7KH*03GRHVQRWFDOOIRUUHEXLOGLQJWKH DUJXPHQWVDVZHOODVWKHSODLQWLIIVjSRVWFRPSODLQWDUJXPHQWV GRFNDW+XJLQQLQ&RYHZKLFKZDVGDPDJHGE\ZHDWKHULQ WKDWWKH*03YLRODWHGWKH5HKDELOLWDWLRQ$FWDQGWKH$'$ WKHPLGV QRQHRIZKLFKDOOHJDWLRQVWKHSODLQWLIIVSUHVVRQDSSHDO 7KH ,VOH 5R\DOH %RDWHUV $VVRFLDWLRQ ,5%$ DQG ILYH 7KH SODLQWLIIV WLPHO\ DSSHDOHG DQG ZH KDYH MXULVGLFWLRQ LQGLYLGXDO SODLQWLIIV ILOHG VXLW LQ IHGHUDO GLVWULFW FRXUW RQ XQGHU  86& †   :H UHYLHZ GH QRYR WKH GLVWULFW $XJXVW    $FFRUGLQJ WR WKHLU )LUVW $PHQGHG FRXUWjV GHFLVLRQ DZDUGLQJ VXPPDU\ MXGJPHQW WR WKH &RPSODLQWWKHSODLQWLIIVLQFOXGHDQDVVRFLDWLRQUHSUHVHQWLQJ GHIHQGDQWVDQGDSSO\WKHVWDQGDUGRIUHYLHZDSSURSULDWHWRD PRUH WKDQ VL[ KXQGUHG PHPEHUV ZKR UHJXODUO\ YLVLW ,VOH UHYLHZRIWKHDJHQF\DFWLRQLQTXHVWLRQ&RPPXQLW\)LUVW 5R\DOHDQGERDWLQLWVZDWHUVIRXULQGLYLGXDOVZKRIUHTXHQWO\ %DQNY1DWjO&UHGLW8QLRQ$GPLQ)GWK YLVLW ,VOH 5R\DOH LQ WKHLU ERDWV DQG RQH LQGLYLGXDO ZKR &LU8QGHU&KHYURQ86$,QFY1DWXUDO5HVRXUFHV UHJXODUO\ YLVLWV WKH LVODQG WR FDQRH KLNH DQG ILVK  7KH 'HIHQVH &RXQFLO ,QF  86   ZH ILUVW SODLQWLIIVDOOHJHGWKDWWKH3DUN6HUYLFHjV*03DQGWKHSURFHVV GHWHUPLQH mZKHWKHU &RQJUHVV KDV GLUHFWO\ VSRNHQ WR WKH XQGHUWDNHQWRDGRSWLW YLRODWHGWKH:LOGHUQHVV$FW3XEOLF SUHFLVH TXHVWLRQ DW LVVXHl LG DW  LI LW KDV QRW ZH DVN /DZ  ZKLFK LV WKH DFW GHVLJQDWLQJ ,VOH 5R\DOH DV D mZKHWKHU WKH DJHQF\jV DQVZHU LV EDVHG RQ D SHUPLVVLEOH ZLOGHUQHVV DUHD DQG ZKLFK WKH SDUWLHV UHIHU WR DV WKH ,VOH FRQVWUXFWLRQRIWKHVWDWXWHlLGDW6HFWLRQ $RI 5R\DOH:LOGHUQHVV$FWWKH2UJDQLF$FWWKDWHVWDEOLVKHG WKH$GPLQLVWUDWLYH3URFHGXUH$FWSHUPLWVXVWRVHWDVLGHWKH WKH1DWLRQDO3DUN6HUYLFHWKH1DWLRQDO(QYLURQPHQWDO3ROLF\ DJHQF\jVGHWHUPLQDWLRQRQO\LILWLVmDUELWUDU\FDSULFLRXVDQ $FWDQGWKH$GPLQLVWUDWLYH3URFHGXUH$FW DEXVHRIGLVFUHWLRQRURWKHUZLVHQRWLQDFFRUGDQFHZLWKODZl 86&† $VHHDOVR6SLW]HU*UHDW/DNHV/WGY 2Q sXQH   WKH GLVWULFW FRXUW GHQLHG WKH SODLQWLIIVj 8QLWHG6WDWHV(QYWO3URW$JHQF\)GWK&LU PRWLRQIRUVXPPDU\MXGJPHQWDQGJUDQWHGWKHGHIHQGDQWVj  PRWLRQIRUVXPPDU\MXGJPHQW7KH3DUN6HUYLFHj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jV GHFLVLRQ WR VHSDUDWH XVHV RQ ,VOH SDUNjVVKHOWHUVDQGWUDLOVE\KLNLQJND\DNLQJDQGFDQRHLQJ 5R\DOH E\ UHPRYLQJ DGGLQJ DQG UHORFDWLQJ GRFNV LV MXVW DV RWKHU LVODQG YLVLWRUV GLG  %HFDXVH WKH ,VOH 5R\DOH FRQVLVWHQW ZLWK &RQJUHVVjV LQVWUXFWLRQV  $OWKRXJK WKH :LOGHUQHVV$FWmFRQWHPSODWHVWKHFRQWLQXHGPDLQWHQDQFHRI SODLQWLIIVGRQRWH[SOLFLWO\DGGUHVVWKH2UJDQLF$FWLQWKHLU GRFNVDWWKH3DUNlEXWQRWmWKHFRQWLQXHGPDLQWHQDQFHDQG DSSHOODWHEULHIWKHSODLQWLIIVFKDOOHQJHWKHUHPRYDORIWKUHH 1R ,VOH5R\DOH%RDWHUV$VVjQ   ,VOH5R\DOH%RDWHUV$VVjQ 1R HWDOY1RUWRQHWDO HWDOY1RUWRQHWDO

GRFNVWKDWDUHLQDUHDVGHVLJQDWHGRQO\DVQDWLRQDOSDUNODQG LW ZDV SURWHFWHG E\ DQ DUWLILFLDO EUHDNZDOO WKDW GLVUXSWHG QRWDVZLOGHUQHVVDUHDDFFRUGLQJO\ZHUHYLHZWKHHIIHFWVRI QDWXUDOFXUUHQWVPRYLQJWKH0F&DUJRH&RYHGRFNFORVHUWR WKH*03RQWKHGRFNVDW6LVNLZLW%D\0F&DUJRH&RYHDQG WKHPRXWKRIWKHFRYHLQRUGHUWRUHGXFHQRLVHRQWKHPDLQ 7KUHH0LOHIRUDUELWUDULQHVVDQGFDSULFLRXVQHVVZLWKUHVSHFW WUDLOV\VWHPDQGUHPRYLQJWKH7KUHH0LOHGRFNLQRUGHUWR WR WKH 2UJDQLF $FW  :H UHYLHZ WKH *03jV HIIHFWV RQ WKH mHDVHXVHSUHVVXUHVHSDUDWHXVHVDQGHOLPLQDWHWKHQHHGWR RWKHUGRFNVLQOLJKWRIWKH:LOGHUQHVV$FWDQGWKH,VOH5R\DOH PDLQWDLQDSXEOLFGRFNLQWKLVYHU\H[SRVHGORFDWLRQls$DW :LOGHUQHVV$FW,QHDFKFDVHZHDVNZKHWKHUWKH*03DQG  *03 DW   7KHVH JRDOV DQG WKH *03jV SODQ WR VSHFLILFDOO\WKHUHPRYDODGGLWLRQDQGUHORFDWLRQRIGRFNVLV DFKLHYH WKHP ZLWK LWV FKDQJHV WR WKH WKUHH GRFNV DUH ZHOO LQFRQVLVWHQWZLWKWKHFOHDULQWHQWRI&RQJUHVVDVH[SUHVVHGLQ ZLWKLQWKHSROLFLHVLGHQWLILHGLQWKH2UJDQLF$FW5HPRYLQJ WKHUHOHYDQWDFW6HH6RXWKHUQ8WDK:LOGHUQHVV$OOLDQFHY GRFNVKHOSVWRFRQVHUYHVFHQHU\DQGPRYLQJGRFNVWRUHGXFH 'DEQH\)GWK&LU QRLVHRQWKHWUDLOVIDFLOLWDWHVWKHHQMR\PHQWRIWKHVFHQHU\ QDWXUDOREMHFWVDQGZLOGOLIHWKDWWKHLVODQGRIIHUV7KLVLV $1DWLRQDO3DUN FRQVLVWHQWZLWK&RQJUHVVjVUHTXLUHPHQWV6HH86&† ,VOH 5R\DOH KDV EHHQ D QDWLRQDO SDUN VLQFH   $V D 7KLVFDVHLVVRPHZKDWDQDORJRXVWRWKDWIDFHGE\WKH1LQWK QDWLRQDOSDUNLWVSXUSRVHLVmWRFRQVHUYHWKHVFHQHU\DQGWKH &LUFXLWLQ%LF\FOH7UDLOV&RXQFLORI0DULQY%DEELWW)G QDWXUDODQGKLVWRULFREMHFWVDQGWKHZLOGOLIHWKHUHLQDQGWR WK&LU7KHUHDJURXSRIELF\FOHHQWKXVLDVWV SURYLGHIRUWKHHQMR\PHQWRIWKHVDPHLQVXFKPDQQHUDQGE\ FKDOOHQJHG D SODQ DGRSWHG IRU WKH *ROGHQ *DWH 1DWLRQDO VXFKPHDQVDVZLOOOHDYHWKHPXQLPSDLUHGIRUWKHHQMR\PHQW 5HFUHDWLRQ $UHD DV LPSHUPLVVLEO\ UHVWULFWLQJ WKH ELNHUVj RIIXWXUHJHQHUDWLRQVl86&†3ULRUWRZKHQ DFFHVV WR WKH QDWLRQDO SDUN  7KH FRXUW KHOG WKDW WKH SODQ &RQJUHVVGHVLJQDWHGPRVWRI,VOH5R\DOHDZLOGHUQHVVDUHD ZKLFKOHIWDQXPEHURIWUDLOVFORVHGWRELNHVZDVZHOOZLWKLQ WKH6HFUHWDU\RIWKH,QWHULRUKDGWKHSRZHUWRUHPRYHGRFNVRU WKHGLVFUHWLRQJUDQWHGE\WKH2UJDQLF$FWDQGWKH**15$ DOWHUERDWHUVjDFFHVVWRWKHSDUNDVWKH6HFUHWDU\VDZILW7KLV $FWZKLFKKDGGHVLJQDWHGWKHDUHDDQDWLRQDOSDUNm>7@KH SRZHU FDPH SXUVXDQW WR  86& † DK ZKLFK **15$$FWLQQRZD\PDQGDWHVWKDWDQ\SDUWLFXODUW\SHRI DXWKRUL]HV WKH 6HFUHWDU\ WR m>S@URPXOJDWH DQG HQIRUFH UHFUHDWLRQEHJLYHQSULPDF\RYHURWKHUW\SHV7KHUHLVVLPSO\ UHJXODWLRQV FRQFHUQLQJ ERDWLQJ DQG RWKHU DFWLYLWLHV RQ RU QRWKLQJLQWKH**15$$FWRUWKH1362UJDQLF$FWUHTXLULQJ UHODWLQJWRZDWHUVORFDWHGZLWKLQDUHDVRIWKH1DWLRQDO3DUN WKH136WRJLYHELF\FOLVWVXQIHWWHUHGUHLJQRIWKHSDUNZLWKRXW 6\VWHPl UHJDUG WR WKH UHFUHDWLRQDO LQWHUHVWV RI WKRVH ZKRVH FKRVHQ PRGHRIUHFUHDWLRQLVLQFRQVLVWHQWZLWKVXFKXQIHWWHUHGUHLJQl 7KH2UJDQLF$FWPDNHVQRUHIHUHQFHWRWKHSODFHPHQWRI ,GDW6HHDOVR0DXVROIY%DEELWW)G GRFNV RU WKH DFFHVV WKDW GRFNV PXVW SURYLGH WR QDWLRQDO WK&LUILQGLQJWKDWSODQWRFORVHFHUWDLQWUDLOVWR SDUNODQG$FFRUGLQJO\WKH1DWLRQDO3DUN6HUYLFHKDVEURDG VQRZPRELOHVIXUWKHUHGSDUNREMHFWLYHVRImSUHVHUYDWLRQDQG GLVFUHWLRQ WR GHWHUPLQH ZKHUH GRFNV DUH ORFDWHG RQ ,VOH SURWHFWLRQRIZLOGOLIHlFHUWGHQLHG86 5R\DOHDQGLQGHHGZKHWKHUWRSHUPLWGRFNVDWDOODOWKRXJK 6LPLODUO\KHUHWKH1DWLRQDO3DUN6HUYLFHKDVGHWHUPLQHGWKDW WKHVWDWXWHUHTXLUHVWKH6HFUHWDU\WRSURYLGHIRUWKHHQMR\PHQW PRWRUERDWXVHUVjDFFHVVPXVWEHDOWHUHGnDOWKRXJKDUJXDEO\ RI QDWLRQDO SDUNODQGV  86& †  WKH VWDWXWH GRHV QRW QRWHYHQUHGXFHGnLQRUGHUWRVHSDUDWHXVHVDQGSURWHFWWKH UHTXLUHWKH6HFUHWDU\WRSURYLGHDFFHVVYLDGRFNVRUERDWV,Q QDWXUDOH[SHULHQFHJRDOVSHUIHFWO\FRQVLVWHQWZLWKWKH2UJDQLF WKH*03WKH1DWLRQDO3DUN6HUYLFHSURSRVHGHOLPLQDWLQJWKH $FW,QVRIDUDVWKH*03DIIHFWVGRFNVRQQDWLRQDOSDUNODQG 6LVNLZLW%D\GRFNZKLFKKDGUHPDLQHGLQWDFWRQO\EHFDXVH LWLVQHLWKHUDUELWUDU\QRUFDSULFLRXV 1R ,VOH5R\DOH%RDWHUV$VVjQ   ,VOH5R\DOH%RDWHUV$VVjQ 1R HWDOY1RUWRQHWDO HWDOY1RUWRQHWDO

%:LOGHUQHVV$UHD VXEMHFWWRUHVWULFWLRQVHPSKDVLVDGGHG:HFDQQRWEHOLHYH WKDW &RQJUHVV ZRXOG EDQ PRWRUERDWV EXW UHTXLUH GRFNV ,I WKH 3DUN 6HUYLFH KDV WKH SRZHU WR OLPLW DFFHVV WR WKH ZLWKRXWJLYLQJVRPHLQGLFDWLRQWKDWLWZDVGRLQJVR$VWKH LVODQG YLD GRFNV LQ DUHDV GHVLJQDWHG RQO\ DV QDWLRQDO SDUN UHPRYDOUHORFDWLRQDQGDGGLWLRQRIGRFNVIXUWKHUVWKH*03jV ODQGWKH3DUN6HUYLFHDIRUWLRULKDVWKHSRZHUWROLPLWDFFHVV JRDO RI VHSDUDWLQJ XVHV DQG WKXV IXUWKHUV WKH :LOGHUQHVV WR WKH LVODQG YLD GRFNV LQ ZLOGHUQHVV DUHDV  &RQJUHVVjV $FWjV JRDO RISURYLGLQJDmFRQWUDVWlWRmWKRVHDUHDVZKHUH GHVLJQDWLRQLQRIDOOEXWDIHZSRUWLRQVRI,VOH5R\DOHDV PDQDQGKLVRZQZRUNVGRPLQDWHWKHODQGVFDSHl86& ZLOGHUQHVVDUHDWRmEHDGPLQLVWHUHGE\WKH6HFUHWDU\RIWKH †FZHFRQFOXGHWKDWWKH*03LVQHLWKHUDUELWUDU\QRU ,QWHULRULQDFFRUGDQFHZLWKWKHDSSOLFDEOHSURYLVLRQVRIWKH FDSULFLRXVLQLWVHIIHFWVRQWKHGRFNVLQZLOGHUQHVVDUHDV :LOGHUQHVV$FWl$FWRI2FWREHU3XE/1R †I6WDWm,VOH5R\DOH:LOGHUQHVV$FWlGLG ,,,/(*,6/$7,9(+,6725<$1'$*(1&< QRWOHVVHQWKH1DWLRQDO3DUN6HUYLFHjVREOLJDWLRQWRSUHVHUYH 67$7(0(176 WKH LVODQGjV FKDUDFWHU   86& † D  m>7@KH GHVLJQDWLRQRIDQ\XQLWRIWKHQDWLRQDOSDUNV\VWHPDVD :KHQDVWDWXWHjVWH[WLVXQDPELJXRXVWKHUHLVRUGLQDULO\QR ZLOGHUQHVVDUHDSXUVXDQWWRWKLVFKDSWHUVKDOOLQQRPDQQHU QHHGWRUHYLHZLWVOHJLVODWLYHKLVWRU\6HH$XGHWWHY6XOOLYDQ ORZHUWKHVWDQGDUGVHYROYHGIRUWKHXVHDQGSUHVHUYDWLRQRI )GWK&LU+RZHYHUWKHUHDUHWKRVH VXFKSDUNl5DWKHUEHFDXVHm>J@UHDWHUSURWHFWLRQVDSSO\WR mUDUHFDVHVLQZKLFKWKHOLWHUDODSSOLFDWLRQRIDVWDWXWHZLOO ZLOGHUQHVVDUHDVWKDQWRRUGLQDU\SDUNODQGVl$ODVND:LOGOLIH SURGXFHDUHVXOWGHPRQVWUDEO\DWRGGVZLWKWKHLQWHQWLRQVRI $OOLDQFHYsHQVHQ)GWK&LUWKH LWVGUDIWHUVl8QLWHG6WDWHVY5RQ3DLU(QWHUV,QF86 GHVLJQDWLRQLQFUHDVHGWKH3DUN6HUYLFHjVREOLJDWLRQ    DFFRUG ,PPLJUDWLRQ DQG 1DWXUDOL]DWLRQ 6HUYY&DUGR]D)RQVHFD86Q 7KHUHLVQRTXHVWLRQWKDWWKH:LOGHUQHVV$FWHPSRZHUVWKH DQG,5%$DUJXHVWKDWPDWHULDOVQRWDSSHDULQJLQWKHWH[WRI 3DUN6HUYLFHWRUHPRYHRUUHORFDWHGRFNVLQRUGHUWRmVHSDUDWH WKHVWDWXWHOLPLWWKH3DUN6HUYLFHjVSRZHUWRPRYHRUUHPRYH PRWRUL]HGDQGQRQPRWRUL]HGXVHVls$DW*03DW WKH GRFNV RQ ,VOH 5R\DOH  6SHFLILFDOO\ ,5%$ DUJXHV WKDW $VDZLOGHUQHVVDUHDWKHSDUNLVWREHDGPLQLVWHUHGmIRUWKH &RQJUHVVLQWHQGHGIRUWKH3DUN6HUYLFHWRSUHVHUYHERDWHUVj XVHDQGHQMR\PHQWRIWKH$PHULFDQSHRSOHLQVXFKPDQQHUDV DFFHVVDVLWH[LVWHGZKHQ&RQJUHVVGHVLJQDWHG,VOH5R\DOHD ZLOOOHDYHWKHPXQLPSDLUHGIRUIXWXUHXVHDQGHQMR\PHQWDV ZLOGHUQHVV DUHD LQ   $FFRUGLQJ WR ,5%$ OHJLVODWLYH ZLOGHUQHVVl86&†D7KH3DUN6HUYLFHPXVW HQVXUH WKDW mWKH HDUWK DQG LWV FRPPXQLW\ RI OLIH DUH XQWUDPPHOHGE\PDQlDQGWKDWWKHODQGmUHWDLQ>V@LWVSULPHYDO FKDUDFWHUl   86& † F  7KH 6HFUHWDU\ WKXV KDV ,5%$  VXJJHVWV WKDW VHFWLRQ G  LV PDQGDWRU\ DQG WKDW WKH 6HFUHWDU\ LV UHTXLUHG WR SHUPLW SUHH[LVWLQJ PRWRUERDW XVHV WR FRQWLQXH LQ EURDG GLVFUHWLRQ WR SUHVHUYH WKH ODQG DQG LWV FKDUDFWHU ZLOGHUQHVV DUHDV $OWKRXJK ,5%$ LV FRUUHFW WKDW mPD\l LV QRW QHFHVVDULO\ $OWKRXJKWKH:LOGHUQHVV$FWGRHVQRWVSHFLILFDOO\PHQWLRQ SHUPLVVLYH &RUWH] %\UG &KLSV ,QF Y %LOO +DUEHUW &RQVWU &R  86 GRFNV LW GRHV H[SOLFLWO\ EDQ PRWRUERDWV VWUXFWXUHV DQG    ZH DVVXPH WKDW mPD\l LV XVLQJ LWV mFRPPRQVHQVHl LQVWDOODWLRQV  86& † F XQOHVV WKH 6HFUHWDU\ SHUPLVVLYH GHILQLWLRQ XQOHVV WKH FRQWH[W RI WKH VWDWXWH VXJJHVWV RWKHUZLVH 8QLWHG 6WDWHV Y 5RGJHUV  86    +HUH ZKHUH WKH GHFLGHVWRSHUPLWDSUHH[LVWLQJPRWRUERDWXVHWRFRQWLQXH VWDWXWH H[SOLFLWO\ VHHNV WR HQVXUH WKDW mWKH HDUWK DQG LWV FRPPXQLW\ RI OLIH 86& † G  VWDWLQJ WKDW ZKHQ PRWRUERDW XVH ZDV DUH XQWUDPPHOHG E\ PDQl  86& † F DQG DGRSWV VXEMHFW WR DOUHDG\HVWDEOLVKHGWKHXVHmPD\EHSHUPLWWHGWRFRQWLQXHl H[LVWLQJ SULYDWH ULJKWV D JHQHUDO EDQ RQ PRWRUERDW XVH  86& † F ZH FDQQRW SUHVXPH WKDW WKH 1DWLRQDO 3DUN 6HUYLFH LV UHTXLUHG WR SHUPLW PRWRUERDWV LQ ZLOGHUQHVV DUHDV 1R ,VOH5R\DOH%RDWHUV$VVjQ   ,VOH5R\DOH%RDWHUV$VVjQ 1R HWDOY1RUWRQHWDO HWDOY1RUWRQHWDO

KLVWRU\VKRZVWKDWLQHQDFWLQJWKH,VOH5R\DOH:LOGHUQHVV$FW DFRPPLWWHHPXFKOHVVDQHQWLUHOHJLVODWLYHERG\l6LJPRQ &RQJUHVV H[SUHVVHG LWV LQWHQWLRQ WKDW WKH GHVLJQDWLRQ QRW &RDO&RY$SIHO)GWK&LUDIIjG HQDEOH WKH 3DUN 6HUYLFH WR LPSRVH WKH NLQGV RI VLJQLILFDQW 86:HDUHZDU\RIUHO\LQJRQLQGLYLGXDO OLPLWDWLRQVRQERDWHUDFFHVVWKDWWKH*03SURSRVHV,5%$ OHJLVODWRUVj VWDWHPHQWV EHFDXVH LQGLYLGXDO VWDWHPHQWV DUH UHOLHV RQ VWDWHPHQWV E\ LQGLYLGXDO OHJLVODWRUV D FRPPLWWHH RIWHQFRQWUDGLFWHGRUDWOHDVWXQGHUPLQHGE\RWKHUVWDWHPHQWV UHSRUWDQGFRUUHVSRQGHQFHIURPWKH3DUN6HUYLFH LQ WKH OHJLVODWLYH UHFRUG  7KH VWDWHPHQWV RI &RQJUHVVPDQ 5XSSHDQG6HQDWRUsRKQVWRQWKDW,5%$FLWHVVXJJHVWDWOHDVW )LUVW ,5%$ SRLQWV WR OHJLVODWRUVj VWDWHPHQWV GXULQJ LQWHUHVWLQPDLQWDLQLQJERDWHUVjDFFHVVWRWKHLVODQGLIQRWWKH FRQVLGHUDWLRQ RI WKH ELOO WKDW GHVLJQDWHG ,VOH 5R\DOH DV D DOORXWSURKLELWLRQRQPRYLQJRUUHPRYLQJGRFNVWKDW,5%$ ZLOGHUQHVV DUHD  7HVWLI\LQJ EHIRUH WKH 6HQDWH RQ WKH VXJJHVWV+RZHYHURWKHUVWDWHPHQWVGXULQJWKHVDPHKHDULQJ LPSRUWDQFHRISURWHFWLQJWKHGRFNV&RQJUHVVPDQ3KLOLS( VXJJHVW D VLPLODU LQWHUHVW LQ DOORZLQJ WKH 3DUN 6HUYLFH WKH 5XSSHZKRVSRQVRUHGWKH,VOH5R\DOH:LOGHUQHVV$FWLQWKH GLVFUHWLRQ WR PDQDJH WKH GRFNV LQ DFFRUGDQFH ZLWK WKH +RXVH H[SUHVVHG KLV mVWURQJ YLHZ WKDW WKH FRQWLQXHG :LOGHUQHVV $FWjV XVXDO SURYLVLRQV  6HQDWRU &OLIIRUG 3 PDLQWHQDQFHRIWKHVHIDFLOLWLHVLVDEVROXWHO\HVVHQWLDOWRWKH +DQVHQIRUH[DPSOHTXHVWLRQHGWKHZLVGRPRImW\LQJWKH FRQWLQXHG HDVH RI DFFHVV DQG HQMR\PHQW WKH SXEOLF QRZ KDQGV RI WKH 3DUN 6HUYLFHl +HDULQJ DW  DQG 6HQDWRU DVVRFLDWHV ZLWK ,VOH 5R\DOH 1DWLRQDO 3DUNl  :LOGHUQHVV sRKQVWRQ KLPVHOI QRWHG WKDW FRQVHUYDWLRQ JURXSV RSSRVHG $GGLWLRQVn1DWLRQDO3DUN6\VWHP+HDULQJRQ6DQG LQFOXGLQJ LQ WKH ELOO DQ\ UHVWULFWLRQV RQ WKH 3DUN 6HUYLFHjV 6%HIRUHWKH6HQDWH6XEFRPPRQ3DUNVDQG5HFUHDWLRQ XVXDOGLVFUHWLRQ+HDULQJDW$OWKRXJKVWDWXWRU\ODQJXDJH RIWKH&RPPRQWKH,QWHULRUDQG,QVXODU$IIDLUVWK&RQJ FDQ VRPHWLPHV EH DPELJXRXV OHJLVODWRUVj VWDWHPHQWV DUH VWDWHPHQWRI5HS3KLOLS(5XSSHKHUHLQDIWHU DOPRVWDOZD\VFDFRSKRQRXVDQGZHGHFOLQHWRUHO\RQWKHP m+HDULQJl6HQDWRUs%HQQHWWsRKQVWRQZKRSUHVLGHGRYHU KHUH WKHKHDULQJUHVSRQGHGE\DJUHHLQJWKDWmHYHU\RQHDJUHHVWKDW WKH\ RXJKW WR FRQWLQXH XVLQJ WKH ERDW GRFNVl  ,G DW  6HFRQG,5%$SRLQWVWRODQJXDJHLQWKHUHSRUWRIWKH6HQDWH ,5%$ DUJXHV WKDW WKLV FROORTX\ H[SUHVVHG &RQJUHVVjV &RPPLWWHHRQ,QWHULRUDQG,QVXODU$IIDLUVWKDWDFFRPSDQLHG LQWHQWLRQWKDWWKHGRFNVUHPDLQZKHUHWKH\ZHUHLQnDV WKH,VOH5R\DOH:LOGHUQHVV$FW7KHFRPPLWWHHUHSRUWWREH PDGHFOHDUE\&RQJUHVVPDQ5XSSHjVIXUWKHUVXJJHVWLRQWKDW VXUH LQGLFDWHV WKDW WKH FRQWLQXHG PDLQWHQDQFH RI WKH ERDW GRFNVEHPDLQWDLQHGWRSURWHFWWKHHQMR\PHQWWKHSXEOLFmQRZ GRFNVZDVDFRQFHUQ$IWHUQRWLQJWKDWWKH6HQDWHKDGVWUXFN DVVRFLDWHVlZLWKWKHSDUNDQGWKDWERDWHUVEHDEOHWRXVHWKH ODQJXDJHIURPWKH+RXVHYHUVLRQRIWKHELOOWKDWZRXOGKDYH SDUNmLQWKHVDPHIDVKLRQDVWKH\KDYHXVHGLWKHUHWRIRUHl,G UHTXLUHGFRQVWUXFWLRQDQGPDLQWHQDQFHRIERDWGRFNVmDVORQJ DW$OWKRXJKDFNQRZOHGJLQJWKDWWKH3DUN6HUYLFHFRXOG DVWKHLUSXUSRVHLVIRUVDIHW\RIYLVLWRUVDQGWKHSURWHFWLRQRI PRYHWKHGRFNVDFRXSOHRIKXQGUHG\DUGV,5%$VXJJHVWV WKHZLOGHUQHVVUHVRXUFHlWKHFRPPLWWHHUHSRUWH[SODLQHGWKH WKDW WKH OHJLVODWRUVj FRPPHQWV PDNH FOHDU WKDW WKH 3DUN FKDQJH 6HUYLFHFRXOGQHLWKHUUHPRYHGRFNVQRUPRYHGRFNVLQVXFK DZD\DVWRDOWHUERDWHUVjDFFHVVWRWKHLVODQGjVRIIHULQJV 7KLVWHFKQLFDOGHFLVLRQE\WKH&RPPLWWHHVKRXOGKDYHQR HIIHFWRQWKHFRQWLQXDQFHRIWKRVHDFWLYLWLHVSXUVXDQWWR 7KLVFDVHSUHVHQWVDFOHDUH[DPSOHRIZK\&RQJUHVVjVLQWHQW WKHDSSURSULDWHSURYLVLRQVRIWKH:LOGHUQHVV$FW LV EHWWHU GHULYHG mIURP WKH ZRUGV RI WKH VWDWXWH LWVHOI WKDQ IURPDSDWFKZRUNUHFRUGRIVWDWHPHQWVLQVHUWHGE\LQGLYLGXDO 7KH&RPPLWWHHXQGHUVWDQGVWKDWQRVLJQLILFDQWH[SDQVLRQ OHJLVODWRUVDQGSURSRVDOVWKDWPD\QHYHUKDYHEHHQDGRSWHGE\ RIERDWGRFNVQXPEHUVLVDQWLFLSDWHGEXWWKDWFRQWLQXHG 1R ,VOH5R\DOH%RDWHUV$VVjQ   ,VOH5R\DOH%RDWHUV$VVjQ 1R HWDOY1RUWRQHWDO HWDOY1RUWRQHWDO

PDLQWHQDQFH RI WKHVH IDFLOLWLHV LV HVVHQWLDO WR WKH UXOLQJVRIWKHDJHQF\ZKLFKWKH\GRQRWm>W@KH6HFUHWDU\RI FRQWLQXHGHDVHRIDFFHVVDVZHOODVWKHKHDOWKDQGVDIHW\ WKH,QWHULRUKDVWKHLQKHUHQWDXWKRULW\WRUHFRQVLGHUDQHDUOLHU RIWKHYLVLWRUV DJHQF\GHFLVLRQl%HOYLOOH0LQLQJ&RY8QLWHG6WDWHV )GWK&LU 65HS1RDW 7KXV WKLV LV QRW WKH mUDUH FDVH>@ LQ ZKLFK WKH OLWHUDO (YHQLIWKLVSDVVDJHUHIOHFWVWKHZLOORI&RQJUHVVZKLFKLV DSSOLFDWLRQRIDVWDWXWHZLOOSURGXFHDUHVXOWGHPRQVWUDEO\DW TXHVWLRQDEOHVHH6KDQQRQY8QLWHG6WDWHV86 RGGVZLWKWKHLQWHQWLRQVRILWVGUDIWHUVl5RQ3DLU(QWHUV H[SUHVVLQJDQLQDELOLW\WRILQGmDQ\FDVHLQZKLFK ,QF86DW7KHOHJLVODWLYHKLVWRU\LQGLFDWHVWKDW ZH KDYH JLYHQ DXWKRULWDWLYH ZHLJKW WR D VLQJOH SDVVDJH RI GXULQJFRQVLGHUDWLRQRIWKH,VOH5R\DOH:LOGHUQHVV$FWVRPH OHJLVODWLYHKLVWRU\WKDWLVLQQRZD\DQFKRUHGLQWKHWH[WRIWKH PHPEHUVRI&RQJUHVVVRXJKWH[SOLFLWVWDWXWRU\SURWHFWLRQIRU VWDWXWHlDQGFDXWLRQLQJDJDLQVWUHOLDQFHRQFRPPLWWHHUHSRUWjV ERDWHUVjDFFHVVWR,VOH5R\DOH6RPHPHPEHUVRI&RQJUHVV HQGRUVHPHQWRIDYLHZWKDWLVQRWOLQNHGWRDQ\SRUWLRQRIWKH RSSRVHG VXFK VWDWXWRU\ SURWHFWLRQ  $ FRPSURPLVH ZDV VWDWXWH LW GRHV QRW XQGHUPLQH WKH GLVFUHWLRQ WKDW WKH UHDFKHGDQGDOWKRXJKWKHILQDOELOOFRQWDLQHGQRPHQWLRQRI :LOGHUQHVV $FWjV WH[W JUDQWV  7DNHQ LQ IXOO FRQWH[W WKH WKH GRFNV WKH FRPPLWWHH UHSRUW PHQWLRQHG WKH GRFNVj ,QWHULRUDQG,QVXODU$IIDLUV&RPPLWWHHjVSUHIHUHQFHIRUWKH LPSRUWDQFH DQG VWDWHG WKDW WKH :LOGHUQHVV $FWjV XVXDO mFRQWLQXHG PDLQWHQDQFHl RI WKH GRFNV LV VXEMHFW mWR WKH SURYLVLRQVZRXOGDSSO\,WLVRQWKRVHSURYLVLRQVDQGWKRVH DSSURSULDWHSURYLVLRQVRIWKH:LOGHUQHVV$FWl65HS1R RI WKH 2UJDQLF $FW WKDW ZH UHO\  6HH  86& †  DW$VGLVFXVVHGLQ3DUW,,VXSUDGRFNVPD\EH UHFRJQL]LQJDJHQF\jVSRZHUWRDGPLQLVWHUQDWLRQDOSDUNVDV UHPRYHGRUUHORFDWHGLQRUGHUWKDWWKHZLOGHUQHVVDUHDVRI,VOH QHFHVVDU\WRHIIHFWXDWHSXUSRVHVRIQDWLRQDOSDUNV\VWHP 5R\DOH EH DGPLQLVWHUHG mIRU WKH XVH DQG HQMR\PHQW RI WKH 86& † E UHFRJQL]LQJ DJHQF\jV SRZHU WR UHJXODWH $PHULFDQ SHRSOH LQ VXFK PDQQHU DV ZLOO OHDYH WKHP ZLOGHUQHVVDUHDDVWKHDJHQF\KDGEHHQHPSRZHUHGSULRUWR XQLPSDLUHGIRUIXWXUHXVHDQGHQMR\PHQWDVZLOGHUQHVVl WKHGHVLJQDWLRQDVDZLOGHUQHVVDUHD 86&†D ,9&21&/86,21 )LQDOO\,5%$SRLQWVWRSUHYLRXV3DUN6HUYLFHVWDWHPHQWV LQZKLFKWKH3DUN6HUYLFHDOOHJHGO\FODLPHGWKDWSDVVDJHRI %HFDXVHWKHDGGLWLRQUHPRYDODQGUHORFDWLRQRIGRFNVWKDW WKH,VOH5R\DOH:LOGHUQHVV$FWGLGLQGHHGUHTXLUHWKH3DUN ,VOH5R\DOHjV*HQHUDO0DQDJHPHQW3ODQSURSRVHVZLOOIXUWKHU 6HUYLFHWRPDLQWDLQWKHGRFNVDVWKH\H[LVWHG,5%$SRLQWHG WKH VWDWXWRULO\VXSSRUWHG JRDO RI VHSDUDWLQJ PRWRUL]HG DQG WROHWWHUVWKDW3DUN6HUYLFHRIILFLDOVKDGZULWWHQRYHUWKH\HDUV QRQPRWRUL]HGXVHVDQGLVQHLWKHUDUELWUDU\QRUFDSULFLRXVLQ LQUHVSRQVHWRSDUNYLVLWRUVjFRPSODLQWVDQGUHTXHVWVWKDWWKH 3DUN6HUYLFHUHPRYHWKHGRFNV,QVHYHUDOOHWWHUVWKH3DUN 6HUYLFHUHVSRQGHGE\VWDWLQJWKDWm&RQJUHVVDOVRVSHFLILFDOO\  PDQGDWHG WKDW H[LVWLQJ GRFNV H[WHQGLQJ LQWR WKH QRQ $00 &KULVWHQVHQ Y +DUULV &RXQW\  86    ZLOGHUQHVVRI/DNH6XSHULRUIURPZLOGHUQHVVFDPSVLWHV m>,@QWHUSUHWDWLRQV FRQWDLQHG LQ IRUPDWV VXFK DV RSLQLRQ OHWWHUV DUH HQWLWOHG

UHPDLQ DQG EH PDLQWDLQHG E\ WKH 1DWLRQDO 3DUN 6HUYLFHl WR UHVSHFW    EXW RQO\ WR WKH H[WHQW WKDW WKRVH LQWHUSUHWDWLRQV KDYH WKH SRZHU WR SHUVXDGHl TXRWDWLRQV DQG FLWDWLRQV RPLWWHG 3HDUFH Y 8QLWHG (Js$DW+RZHYHUHYHQLIWKHVHUHVSRQVHV 6WDWHV  )G   WK &LU  QRWLQJ WKDW LQWHUQDO WRYLVLWRUFRPSODLQWVDERXWWKHGRFNVjXVHUVFRQVWLWXWHGILQDO RSHUDWLQJ PDQXDO GLG QRW FRQVWLWXWH DQ HQIRUFHDEOH UHJXODWLRQ ZKLFK LV GLIIHUHQW IURP mDQ LQWHUSUHWDWLYH UXOH JHQHUDO VWDWHPHQW RI SROLF\ RU UXOH RI DJHQF\ RUJDQL]DWLRQ SURFHGXUH RU SUDFWLFHl 1R ,VOH5R\DOH%RDWHUV$VVjQ  HWDOY1RUWRQHWDO

OLJKW RI WKH JRYHUQLQJ VWDWXWHV ZH $)),50 WKH GLVWULFW FRXUWjV GHFLVLRQ JUDQWLQJ VXPPDU\ MXGJPHQW WR WKH GHIHQGDQWV