MC 10176102 0001
MC 10176102 0001
MC 10176102 0001
6ROXWLRQ.
:HGQHVGD\0D\30&(67
62/87,21
7LWOH 9ROYR&KDVVLV$XWRPDWHG0DQXDO7UDQVPLVVLRQ$07,6KLIW&OXWFK
&RQWURO$FWXDWRU&&$'LDJQRVWLF$QG,QVSHFWLRQ,QIRUPDWLRQ&&$5HXVH
2U5HSODFH*XLGHOLQHV86$QG1HZHU(PLVVLRQV&RPPRQ0RGHO<HDUV
$QG1HZHU
9ROYR0RGHOV
9ROYR0RGHO 9191/91091591;9$+9+'97
(PLVVLRQ6WDQGDUG
(PLVVLRQ6WDQGDUG 8686862%'862%'862%'
862%'862%'862%'
(QJLQHIDPLO\
(QJLQHIDPLO\ /(QJLQH/(QJLQH/(QJLQH
7UDQVPLVVLRQ
7UDQVPLVVLRQ $07&$07'$07):LWK&UDZOHU*HDUV$07):LWKRXW&UDZOHU*HDUV
62/87,21
&DXVH ,QIRUPDWLRQFRQFHUQLQJWKHLQVSHFWLRQDQGGLDJQRVLVRIWKHFOXWFKFRQWURO
DFWXDWRUDQGUHXVHUHSODFHJXLGHOLQHVIRUREVHUYHGZHDU
7KH&&$LVLQFRQVWDQWFRQWDFWZLWKWKHFOXWFKGLDSKUDJPVSULQJ7KH
EHDULQJIDFHURWDWHVFRQVWDQWO\ZLWKWKHFOXWFK,QDQLGHDOVLWXDWLRQWKH
EHDULQJIDFHDQGFOXWFKZRXOGDOZD\VURWDWHDWWKHVDPHUDWH+RZHYHULQ
UHDOZRUOGRSHUDWLRQWKHUHLVDOZD\VVRPHVOLSSDJHEHWZHHQWKHWZRDQG
EHFDXVHRIWKDWWKHUHZLOOEHZHDURYHUWLPH
6ROXWLRQ :KHQ)DXOWWUDFLQJIRUDVKLIWLQJFRPSODLQWRUIDXOWFRGHVWKH
IROORZLQJLWHPVVKRXOGEHFRQVLGHUHG
,*DWKHULQIRUPDWLRQDQGFKHFNV\VWHPIXQFWLRQ
5HYLHZVHUYLFHKLVWRU\WRGHWHUPLQHLIWKH&&$KDVHYHUEHHQ
UHSODFHG1RWHWKHYHKLFOH
VFXUUHQWDJHPLOHDJHDQGHQJLQHKRXUV
+LJKPLOHDJHRUDJHRIWKHYHKLFOHFDQEHDFRQWULEXWLQJIDFWRULQZKHWKHURU
QRWWKH&&$LVZRUQDQGFDXVLQJFRQWUROSUREOHPVWKDWDUHEHLQJSLFNHGXSLQ
WKHGLDJQRVWLFWKDWORJVWKHFRGHVOLVWHGLQWKH)DXOW&RGHVVHFWLRQ
&OXWFK:HDU&KHFN7HVW
&OXWFK'UDJ7HVW
3:09DOYHV&OXWFK$FWLYDWLRQ7HVW
&RXQWHU6KDIW%UDNH6ROHQRLG9DOYH7HVW
&OXWFK&\OLQGHU7HVW
3:09DOYHV&OXWFK7HVW
:KLOHWKLVLVLQWHQGHGWRHYDOXDWH&&$IXQFWLRQSULRUWRUHPRYLQJWKH
WUDQVPLVVLRQIURPWKHFKDVVLVWKHVWHSVEHORZPD\DOVREHSHUIRUPHGZLWK
WKHWUDQVPLVVLRQRXWRIWKHYHKLFOHDQG377FRQQHFWHGGLUHFWO\WRWKH7(&8
:KHQHYDOXDWLQJWKH&&$IRUDOHDNDQGWKHXQLWVWLOOLQWKHFKDVVLVWKH
&OXWFK/HDN7HVWLQ377ZLOOOLNHO\SDVVLQDOOEXWWKHPRVWVHYHUHFDVHV
(YHQZKHQLWGRHVIDLOWKHFDXVHPD\QRWEHWKH&&$7KHDLUOLQHRUWKH
&98PD\EHWKHFDXVH
)URPWKH7HVWWDELQ377RSHQRSHUDWLRQ3:0
9DOYHV&OXWFK5XQWKH/HDN7HVW7KLVZLOOFDXVHWKH7(&8WRVWRSLWV
DWWHPSWVWRUHOHDVHWKHFOXWFK
127(,IWKHWHVWVIURPVHFWLRQ,ZHUHUXQLPPHGLDWHO\EHIRUHWKLVVWHSDQG
WKHLJQLWLRQKDVQRWEHHQF\FOHGWKLVVWHSPD\EHVNLSSHG
2SHQRSHUDWLRQ,QSXW6LJQDOVIRU*HDU6HOHFWLRQ
IURPWKH7HVWWDELQ377([SDQGWKHVHFWLRQVIRU&OXWFKDQG*HDU
5HIHUWRWKHDQLPDWLRQVEHORZIRU6WHSVDQG7KHILUVWPHWKRG
VKRZQLVSUHIHUUHG
0HWKRG&RQQHFWDKDQGRSHUDWHGYDFXXPSXPSWRWKHDLU
VXSSO\SRUWIRUWKH&98'UDZLQJDYDFXXPYLDWKLVSRUWZLOO
FRPSUHVVWKH&&$
0HWKRG,QVHUWDSU\EDUWKURXJKWKH&98RSHQLQJ0DNLQJ
VXUHWKHHOHFWULFDOKDUQHVVLVKHOGDVLGHXVHWKHSU\EDUWR
FRPSUHVVWKH&&$3OXJWKH&98DLUVXSSO\SRUWRQFHFRUUHFW
SRVLWLRQLVUHDFKHG
:KHQXVLQJDSU\EDUGRQRWXVHH[FHVVLYHIRUFHRQWKH&&$'DPDJHWR
WKHKRXVLQJRURWKHUFRPSRQHQWVFRXOGUHVXOW
7KHHOHFWULFDOKDUQHVVLVQRWDVXLWDEOHVXUIDFHIRUOHYHUDJHDQGPXVWEH
KHOGRXWRIWKHZD\ZKHQXVLQJDSU\EDU
8QEROWWKH&98DQGUHPRYHLWIURPWKHKRXVLQJ/HDYHWKH
HOHFWULFDOFRQQHFWRUSOXJJHGLQ
&RPSUHVVWKH&&$DSSUR[LPDWHO\KDOIRILWVWRWDOWUDYHO
/HDYHWKHYDFXXPSXPSFRQQHFWHGRUSOXJWKHDLUVXSSO\SRUW
,Q377ZDWFKWKHYDOXHIRU&OXWFK&\OLQGHU3RVLWLRQ
,IWKHYDOXHLQFUHDVHVWKHUHLVDQDLUOHDNLQHLWKHUWKH&&$RURQHRIWKH
DLUVXSSO\FRPSRQHQWVWKDWVKRXOGEHORFDWHGDQGUHSDLUHG
,IWKHYDOXHUHPDLQVWKHVDPHSURFHHGWRWKHQH[WVWHS
$&&$DVVHPEOHGZLWKWKHUXEEHUERRWWRSUHYHQWGLUWDQGGHEULVLQWUXVLRQ
ZLOOPRVWOLNHO\QRWEHWKHVRXUFHRIDQDLUOHDN2WKHUFRPSRQHQWVVKRXOG
EHFKHFNHGFDUHIXOO\ILUVWWKHQWKH&&$FKHFNHGWKRURXJKO\DVRXWOLQHGLQ
VHFWLRQ,,,EHORZ
+ROGLQJWKHHOHFWULFDOKDUQHVVWRWKHVLGHLQVHUWDSU\EDULQWRWKH
&98RSHQLQJDQGURFNWKH&&$EDFNDQGIRUWKDVVKRZQEHORZ
6RPHSOD\LVQRUPDODQGDFFHSWDEOHXQOHVVDLUOHDNDJHLVREVHUYHGZKLOH
PRYLQJWKH&&$
,IH[FHVVLYHSOD\LVREVHUYHGWKH&&$ZLOOQHHGWREHUHSODFHG$QH[DPSOHRI
H[FHVVLYHSOD\WUDQVPLVVLRQUHPRYHGIRUH[DPSOHRQO\FDQEHYLHZHGEHORZ
:DWFKWKH&OXWFK&\OLQGHU3RVLWLRQVLJQDOLQ377ZKLOHPRYLQJWKH
&&$DVVKRZQLQWKHDQLPDWLRQDERYH
,IWKHVLJQDOVKRZVODUJHIOXFWXDWLRQMXPSVRUFUHHSVXSLQYDOXHWKH
&&$LVZRUQDQGDOORZLQJDLUWRSDVVDURXQGLWVVHDOV
,IWKHVLJQDOVKRZVDVPDOOIOXFWXDWLRQEXWUHWXUQVWRWKHVDPHYDOXH
HDFKWLPHWKH&&$LVQRWOHDNLQJ
,IWKH&&$LVQRWOHDNLQJLQVSHFWWKHRWKHUFOXWFKFRPSRQHQWV
ZKLOHWKH&&$LVVWLOOFRPSUHVVHG$ERUHVFRSHLVXVHIXOIRUWKLV
,,,$IWHUUHPRYLQJWKHJHDUER[
&KHFNWKHIDFHRIWKH&&$EHDULQJIRUZHDU
7KHH[DPSOHEHORZVKRZVDEHDULQJIDFHZLWKQRUPDOZHDUFDXVHGE\
WKHPRYHPHQWEHWZHHQWKHFOXWFKILQJHUVDQGWKHEHDULQJIDFH
:HDUDVVKRZQDERYHGRHVQRWFDXVHDIXQFWLRQDOLVVXH7KHEHDULQJ
VKRXOGEHUHXVHGLIQRWKLQJHOVHLVIRXQGZURQJ
127(:LWKH[FHVVLYHZHDUDFFRPSDQLHGE\DFOXWFKUHSODFHPHQW
5HSODFHPHQWRIWKH&&$VKRXOGEHFRQVLGHUHGDVZHOO
&KHFNWKHIXQFWLRQRIWKH&&$%HDULQJ
7KHEHDULQJVKRXOGWXUQIUHHO\DQGVPRRWKO\
&KHFNWKH&&$*XLGH6OHHYHV
7KH&&$KDVJXLGHVOHHYHVLQVLGHWKHDVVHPEO\WRNHHSWKHXQLWFHQWHUHG
RQWKHFOXWFK$YLGHRRIDQHZSURSHUO\IXQFWLRQLQJ&&$FDQEHYLHZHG
EHORZ
&RPSUHVVWKH&&$DERXWKDOIZD\EDFNLQLWVWUDYHODQGURFNWKHEHDULQJ
IURPVLGHWRVLGH
6RPHSOD\LVQRUPDODQGDFFHSWDEOHXQOHVVDLUOHDNDJHLVREVHUYHGZKLOHPRYLQJ
WKH&&$
,IH[FHVVLYHSOD\LVREVHUYHGWKH&&$ZLOOQHHGWREHUHSODFHG5HIHUWRWKH
YLGHRLQWKHSUHYLRXVVHFWLRQIRUDQH[DPSOHRIH[FHVVLYHSOD\
&KHFNIRU$LU/HDNV
,ISHUIRUPLQJWKLVSRUWLRQRIWKHWHVWZLWKWKHJHDUER[UHPRYHG$LU
PXVWEHVXSSOLHGWRWKH*HDUER[RUWRWKH&98GLUHFWO\WRPRUHFORVHO\
VLPXODWHQRUPDORSHUDWLQJFRQGLWLRQV
)DLOXUHWRGRWKLVPD\OHDGWRDIDOVHLQGLFDWLRQRIDOHDN
3XVKWKH&&$DOOWKHZD\EDFNDQGSOXJWKH&OXWFK9DOYH8QLW&98
2EVHUYHWKH&&$IRUPRYHPHQW
,IDLUOHDNVRXWLPPHGLDWHO\DQGWKH&&$FDQQRWKROGSRVLWLRQUHSODFH
WKH&&$DQGLWVDLUVXSSO\OLQH
,IDLUGRHVQRWOHDNLPPHGLDWHO\EXWWKH&&$H[KLELWHGH[FHVVLYHZHDU
URFNWKH&&$IURPVLGHWRVLGHDVVKRZQLQWKHYLGHREHORZ
,IDLUOHDNVDUHREVHUYHGUHSODFHWKH&&$DQGWKHRULQJVIRUWKHDLUVXSSO\
OLQH7KHDLUOLQHRULQJVDUHDYDLODEOHDVDNLWLQ,03$&77KHDLUOLQHVKRXOGQRW
EHUHSODFHGXQOHVVLWLVGDPDJHG7KHUHLVQRUPDOO\QRWKLQJZURQJZLWKWKH
DLUOLQHLWVHOIDQGWKHRULQJVDUHDOOWKDWLVQHHGHG
,IURFNLQJWKHEHDULQJGRHVQRWSURGXFHDQDLUOHDNWKH&&$LVOLNHO\QRW
OHDNLQJ
&KHFNIRU+HDW'DPDJH
$&&$WKDWKDVKDGDFOXWFKIDLOXUHZLWKH[WUHPHKHDWVKRXOGEH
LQVSHFWHGXVLQJWKHDERYHSURFHGXUHV$PHOWHGFHQWHUGXVWERRWRU
PLVVLQJGXVWERRWZLWKH[WUHPHZHDUVKRXOGEHUHSODFHG$&&$WKDW
SDVVHVDOORIWKHWHVWVEXWKDVDPHOWHGSRVLWLRQVHQVRUFDQEHUHXVHG
KWWSVVHFXUHYROYRFRPFEUSULQW&DVHDFWLRQ"FDVH,G
3ULQW&DVH
DQGWKHVHQVRUUHSODFHGVHSDUDWHO\$QH[DPSOHLVVKRZQEHORZ
,9&KHFN7KH7UDQVPLVVLRQ(OHFWURQLF&RQWURO8QLW7(&8
6RIWZDUH/HYHO9HKLFOHVEXLOWEHWZHHQDQG
ZLWKDQ$07)21/<
,IWKHVRIWZDUHLVQRWWKHFXUUHQWYHUVLRQ
8SGDWHWKH7(&8VRIWZDUHLIWKH6:LVRUROGHU
7HVWGULYHWKHYHKLFOHWRHQVXUHWKHUHDUHQRRWKHULVVXHVWKHQUHOHDVH
,IWKHVRIWZDUHLVFXUUHQW
1RIXUWKHUDFWLRQLVUHTXLUHG
1$B6LVWHUVROXWLRQV .
6ROXWLRQYLVLELOLW\ 'HDOHUGLVWULEXWLRQ
)XQFWLRQ*URXS
)XQFWLRQ*URXS UHOHDVHEHDULQJIRUNVKDIWFOXWFKFRQWUROJHDUER[
&XVWRPHUHIIHFW
0DLQFXVWRPHUHIIHFW QRLVHURDGEHKDYLRXUGLDJQRVWLFVPHWKRGRORJ\MXGGHUVOLSSLQJ
1RLVH KLVVLQJQRLVHEORZLQJQRLVH
)OXLGSUREOHP OHDN
)OXLGLPSOLFDWHG $LU
5RDGEHKDYLRXU GULYHDELOLW\
)DXOW&RGHV$QG(UURU&RGHV
-)DXOW&RGHV
0,'36,')0,0,'36,')0,
0,'3,')0,)RUPDW
2%',,'LDJQRVWLF
7URXEOH&RGHV38% 33
)RUPDW
&RQGLWLRQV
9HKLFOHRSHUDWLQJ
ZKHQDFWLYDWLQJZKHQGULYLQJFUXLVHFRQWUROZKHQVWDWLRQDU\
PRGH
)UHTXHQF\RI
UDQGRP
RFFXUUHQFHRISUREOHP
/RFDWLRQRISUREOHP XQGHUQHDWKFDE
$GPLQLVWUDWLRQ
$XWKRU 87+
'HDOHU,' 87+
/DVWPRGLILHGE\ 589
&UHDWLRQGDWH
'DWHRIODVWXSGDWH
5HYLHZGDWH
6WDWXV 3XEOLVKHG
$YHUDJHVFRUH
1XPEHURIVFRUHV
1$B5HYLHZHU XWK
1$B$XWKRUB*URXS *77
9DULDQWHV.ROD
5:;75$160,66,21 '6(5,(6$7'92/92$8720$7('75$160,66,2110
63(('
81&21752//('&23<3ULQWHGGRFXPHQWLVIRUWHPSRUDU\XVHRQO\DQGVKRXOGQRWEHUHWDLQHG