NATIONAL CURRICULUM GUIDELINES

ON EARLY CHILDHOOD EDUCATION

AND CARE IN FINLAND

S T A K E S


1$7,21$/&855,&8/80*8,'(/,1(621($5/<
&+,/'+22'('8&$7,21$1'&$5(,1),1/$1'





7RWKH5HDGHU

7KLVLVWKH(QJOLVKWUDQVODWLRQRIWKH1DWLRQDO&XUULFXOXP*XLGHOLQHVRQ(DUO\&KLOGKRRG
(GXFDWLRQDQG&DUH(&(&LQ)LQODQG7KHRULJLQDO)LQQLVKGRFXPHQWZDVSXEOLVKHGLQ
6HSWHPEHU

(&(&LQ)LQODQGKDVWZRPDLQJRDOV2QHLVWRIXOILOWKHGD\FDUHQHHGVRIFKLOGUHQXQGHU
VFKRRODJHDQGWKHRWKHULVWRSURYLGHHDUO\FKLOGKRRGHGXFDWLRQ7KH&XUULFXOXP*XLGHOLQHV
DLPWRSURPRWHWKHSURYLVLRQRI(&(&RQHTXDOWHUPVWKURXJKRXWWKHFRXQWU\WRJXLGHWKH
GHYHORSPHQWRIWKHFRQWHQWRIDFWLYLWLHVDQGWRFRQWULEXWHWRGHYHORSLQJWKHTXDOLW\RI
DFWLYLWLHVE\LQWURGXFLQJXQLIRUPSULQFLSOHVIRURUJDQLVLQJVXFKDFWLYLWLHV

(DUO\FKLOGKRRGHGXFDWLRQDQGFDUH(&(&LVVRFLDOO\DQGFXOWXUDOO\GHSHQGHQW7KH

FRQFHSWVUHODWHGWR(&(&DUHDOVROLQNHGZLWKODQJXDJHDQGLWVPHDQLQJV7KHUHPD\EH
PDMRUGLIIHUHQFHVEHWZHHQWKHFRQFHSWVXVHGLQGLIIHUHQWFRXQWULHVWRUHIHUWRWKH(&(&
V\VWHPVHUYLFHVDQGFRQWHQWV1RWHYHQWKHWHUP
HDUO\FKLOGKRRGHGXFDWLRQ
FDQEHGHILQHGLQ
DXQLIRUPZD\2QWKHRWKHUKDQGWKHVDPHFRQFHSWPD\KDYHGLIIHUHQWFRQWHQWVGHSHQGLQJ
RQWKHFRQWH[WLQHDFKFRXQWU\

,QRUGHUWRRSHQWKHFRQWH[WDQGEDVLFLGHDVRIWKH1DWLRQDO&XUULFXOXP*XLGHOLQHVRQ(&(&
LQ)LQODQGDIHZFRUHFRQFHSWVZLOOEHGHILQHGEULHIO\


(DUO\FKLOGKRRGHGXFDWLRQDQGFDUH(&(&

7KHFRPPRQ(QJOLVKWHUPIRU\RXQJFKLOGUHQ
VJRDORULHQWHGHGXFDWLRQLV
HDUO\FKLOGKRRG
HGXFDWLRQ
7KH)LQQLVKHTXLYDOHQWIRUWKHWHUP
HGXFDWLRQ
LVNDVYDWXV,WKDVWUDGLWLRQDOO\
EHHQXVHGLQDQDUURZHUVHQVHWKDQWKH(QJOLVKWHUPH[FOXGLQJWKHSHGDJRJLFSHUVSHFWLYH
7KLVLVZK\WKH(QJOLVKWUDQVODWLRQXVHVWKHWHUP(&(&ZKLFKFRPSULVHVWKHSHUVSHFWLYHVRI
FDUHHGXFDWLRQDQGWHDFKLQJ

7KHWHUP(&(&KDVEHHQXVHGLQWKH2(&'7KHPDWLF5HYLHZRI(DUO\&KLOGKRRG(GXFDWLRQ
DQG&DUH3ROLF\7KHWHUPDOVRZHOOGHVFULEHVWKHFRPSUHKHQVLYHFKDUDFWHURIWKH)LQQLVK

 
V\VWHP,WFRYHUVERWKWKHGD\FDUHDUUDQJHPHQWVRIIHUHGWRIDPLOLHVDQGWKHSHUVSHFWLYHRI
JRDORULHQWHGHDUO\FKLOGKRRGHGXFDWLRQRSHQHGXSIRUFKLOGUHQ,QDGGLWLRQLWGHVFULEHVWKH
ZD\LQZKLFK)LQQLVKHDUO\FKLOGKRRGSHGDJRJ\FRPELQHVFDUHHGXFDWLRQDQGWHDFKLQJLQWRD
ZKROHWKDWLVUHDOLVHGLQGDLO\DFWLYLWLHV(DUO\FKLOGKRRGSHGDJRJ\YDULHVZLWKWKHDJHRIWKH
FKLOGUHQWKHHOHPHQWVRIFDUHHGXFDWLRQDQGWHDFKLQJKDYLQJGLIIHUHQWHPSKDVHVLQGLIIHUHQW
VLWXDWLRQV

7KH1DWLRQDO&XUULFXOXP*XLGHOLQHVRQ(&(&LQ)LQODQG

7KH)LQQLVKGRFXPHQWXVHVWKHWHUP&RUH3ODQZLWKUHJDUGWR(&(&7KH)LQQLVKHTXLYDOHQW
IRU
FXUULFXOXP
LVQRWXVHGVRDVWRHPSKDVLVHWKHKROLVWLFQDWXUHRI(&(&LQWKDWLW
FRPSULVHVFDUHHGXFDWLRQDQGWHDFKLQJ7KHXVHRIWKHWHUPDOVRDLPVWRXQGHUOLQHWKDWWKH
GRFXPHQWLVOLQNHGWRWKHSDUDGLJPDWLFFKRLFHPDGHZLWKLQWKH)LQQLVKV\VWHPRQWKHEDVLVRI
EURDGEDVHGQHJRWLDWLRQV

7KH(QJOLVKYHUVLRQKRZHYHUXVHVWKHFRQFHSW
FXUULFXOXP
IRUWKHVDNHRIFODULW\
,QWHUQDWLRQDOO\GRFXPHQWVDLPHGDWJXLGLQJWKHFRQWHQWVRI(&(&WKDWLVSHGDJRJ\DUH
UHIHUUHGWRDVFXUULFXOD

7KH(&(&HQYLURQPHQW

$Q(&(&HQYLURQPHQWLVDZKROHIRUPHGE\SK\VLFDOSV\FKRORJLFDODQGVRFLDOHOHPHQWV,W
LQFOXGHVEXLOWIDFLOLWLHVLPPHGLDWHQHLJKERXUKRRGDQGSV\FKRORJLFDODQGVRFLDOVHWWLQJV
IXQFWLRQDOO\OLQNHGWRGLIIHUHQWVLWXDWLRQVDVZHOODVYDULRXVPDWHULDOVDQGHTXLSPHQW

$VLPLODUPRUHIDPLOLDUWHUPLV
OHDUQLQJHQYLURQPHQW
7KHXVHRIWKHWHUP(&(&
HQYLURQPHQWXQGHUOLQHVFHUWDLQVSHFLILFHQYLURQPHQWDOIHDWXUHV7KHWHUPDLPVWRGHVFULEH
(&(&DVEHLQJPRUHJHQHUDOO\OLQNHGQRWRQO\WROHDUQLQJVLWXDWLRQVEXWDOVRWRFDUH
VLWXDWLRQVSOD\DQGQDWXUHDQGWKHHQYLURQPHQWDWODUJH,WDOVRDLPVWRKLJKOLJKWWKH
LPSRUWDQFHRIYDULRXVLQWHUDFWLYHUHODWLRQVKLSV

(&(&SDUWQHUVKLS

,Q)LQQLVK(&(&FRRSHUDWLRQEHWZHHQWKHVWDIIDQGSDUHQWVKDVDVROLGEDFNJURXQG7KH
1DWLRQDO&XUULFXOXP*XLGHOLQHVVHHNWRHPSKDVLVHDQHZPRUHSURIRXQGDSSURDFK±UHIHUUHG
WRDV(&(&SDUWQHUVKLS±ZKLFKLQYROYHVSDUWLFLSDWLRQWKDWJRHVIXUWKHUWKDQFRRSHUDWLRQ
(GXFDWRUVKDYHDNH\UROHLQVKDULQJWKHGD\WRGD\HGXFDWLRQDQGFDUHRIWKH\RXQJFKLOG
ZLWKWKHSDUHQWV,WIROORZVWKDWWKHQDWXUHRIWKHUHODWLRQVKLSEHWZHHQSDUHQWVDQGHGXFDWRUVLV
DQHVVHQWLDOSDUWRIWKHFKLOG
VZHOOEHLQJ7KHMRXUQH\IURPFRRSHUDWLRQWR(&(&SDUWQHUVKLS
UHTXLUHVPXWXDOFRQWLQXRXVDQGFRPPLWWHGLQWHUDFWLRQLQDOOPDWWHUVFRQFHUQLQJWKHFKLOG
7KHH[SHULHQFHRIEHLQJKHDUGDQGPXWXDOUHVSHFWDUHHVVHQWLDOIRUDWWDLQLQJVKDUHG
XQGHUVWDQGLQJ



 
 (GXFDWRU

7KHWHUP
HGXFDWRU
UHIHUVWR(&(&VWDIIUHVSRQVLEOHIRUFDUHHGXFDWLRQDQGWHDFKLQJLQDOO
GLIIHUHQWVHUYLFHW\SHV,Q)LQODQGGD\FDUHFHQWUHVKDYHPXOWLSURIHVVLRQDOVWDIIDQGWKHUHIRUH
WKHUHLVYDULDWLRQLQWKHOHYHORIHGXFDWLRQDPRQJWKHVWDII$WOHDVWRQHWKLUGRIWKHVWDIIPXVW
KDYHDWHUWLDU\GHJUHH%DFKHORURU0DVWHURI$UWVLQ(GXFDWLRQRU%DFKHORURI6RFLDO
6FLHQFHVDQGWKHUHPDLQLQJVWDIIPXVWKDYHDQXSSHUVHFRQGDU\HGXFDWLRQ,QIDPLO\GD\
FDUHWKHHGXFDWRUPRVWO\ZRUNVDORQHRULQWKHFDVHRIJURXSIDPLO\GD\FDUHWRJHWKHUZLWK
DQRWKHUHGXFDWRU7KHUHLVYDULDWLRQEHWZHHQPXQLFLSDOLWLHVDQGXQLWVLQWKHOHYHORIHGXFDWLRQ
DPRQJHGXFDWRUV$VRI.LQGHUJDUWHQWHDFKHUVKDYHVWXGLHGXSWRWKHXQLYHUVLW\OHYHOD
%DFKHORURI$UWVGHJUHH0RUHLQIRUPDWLRQKWWSZZZVWDNHVILYDUWWXD

+HOVLQNL$XJXVW

$QQD/HHQD9lOLPlNL   3lLYL/LQGEHUJ

'HYHORSPHQW0DQDJHU   6HQLRU3ODQQLQJ2IILFHU

 
 

3UHIDFH

7KH1DWLRQDO&XUULFXOXP*XLGHOLQHVRQ(DUO\&KLOGKRRG(GXFDWLRQDQG&DUHSURYLGH
JXLGDQFHIRULPSOHPHQWLQJWKHFRQWHQWRIHDUO\FKLOGKRRGHGXFDWLRQDQGFDUH(&(&LQ
)LQODQG$VWKLVLVWKHILUVWWLPHWKLVW\SHRIGRFXPHQWKDVEHHQSUHSDUHGIHHGEDFNRQLWV
FRQWHQWDQGXVDELOLW\ZLOOEHJDWKHUHGDVZLGHO\DVSRVVLEOH7KHGRFXPHQWZLOOEHUHYLHZHG
EDVHGRQWKHIHHGEDFNLQVXPPHU

7KHWDVNRIGUDIWLQJ1DWLRQDO&XUULFXOXP*XLGHOLQHVRQ(&(&ZDVDVVLJQHG67$.(6LQWKH
*RYHUQPHQW5HVROXWLRQ&RQFHUQLQJWKH1DWLRQDO3ROLF\'HILQLWLRQRQ(DUO\&KLOGKRRG
(GXFDWLRQDQG&DUH$W67$.(6DVWHHULQJJURXSDSSRLQWHGE\WKH'LUHFWRU*HQHUDOZDV
UHVSRQVLEOHIRUWKHSUHSDUDWLRQDQGFRQWHQWRIWKH1DWLRQDO&XUULFXOXP*XLGHOLQHV7KH
VWHHULQJJURXSZDVDVVLVWHGE\DZRUNLQJFRPPLWWHHWKH(&(&H[SHUWWHDPDW67$.(6DQG
RWKHUH[SHUWJURXSVHVWDEOLVKHGDVUHTXLUHGIRUGHDOLQJZLWKWKHGLIIHUHQWFRQWHQWDUHDV

7KHVWHHULQJJURXSFRQYHQHGWLPHVEHWZHHQ1RYHPEHUDQG6HSWHPEHU,WV
PHPEHUVZHUHDVIROORZV0DWWL+HLNNLOl'HSXW\'LUHFWRU*HQHUDO67$.(6&KDLU$QQD
/HHQD9lOLPlNL'HYHORSPHQW0DQDJHU67$.(6'HSXW\&KDLU$LQR,QNHUL+DQVVRQ
'HSXW\'LUHFWRU*HQHUDO.LUVL$OLOD6HQLRU2IILFHU0LQLVWU\RI6RFLDO$IIDLUVDQG+HDOWK
.LUVL/LQGURRV'LUHFWRU7LLQD.DYLOR6HQLRU2IILFHUDVRI0DUFK0LQLVWU\RI
(GXFDWLRQ+HO\3DUNNLQHQ3URMHFW0DQDJHU1DWLRQDO%RDUGRI(GXFDWLRQ$QQD0DLMD
+DOLVHYD/DKWLQHQ6HQLRU$GYLVRU$VVRFLDWLRQRI)LQQLVK/RFDODQG5HJLRQDO$XWKRULWLHV
-XKDQL+\W|QHQ3URIHVVRU+HOVLQNL8QLYHUVLW\.LUVWL.DULOD3URIHVVRUSURWHP7DPSHUH
8QLYHUVLW\3LUMR)RUVV3HQQDQHQ/HFWXUHU3RO\WHFKQLFV1HWZRUN0DUMDWWD.HNNRQHQ
/DXUL.XRVPDQHQDVRI$XJXVW6HFUHWDU\IRU3URIHVVLRQDO$IIDLUV8QLRQRI+HDOWK
DQG6RFLDO&DUH3URIHVVLRQDOV7HK\5DLOL/HLTYLVW%DUJDLQLQJ2IILFHU7UDGH8QLRQIRUWKH
0XQLFLSDO6HFWRU.796RLOH2OHDQGHU&KDLU7UDGH8QLRQRI(GXFDWLRQ$VVRFLDWLRQRI
.LQGHUJDUWHQ7HDFKHUV$LUL6DOPL6HFUHWDU\IRU3URIHVVLRQDO$IIDLUV8QLRQRI3URIHVVLRQDO
6RFLDO:RUNHUV7DOHQWLD+HOMl3HWlMl6HFUHWDU\IRU(DUO\(GXFDWLRQDQG&DUH2IILFHRIWKH




3XEOLFDWLRQVRIWKH0LQLVWU\RI6RFLDO$IIDLUVDQG+HDOWK

 
&KXUFK&RXQFLO6LUNND/LLVD,KDODLQHQZRUNHGDVDVHFUHWDU\IRUWKHZRUNLQJJURXSDW
67$.(6

7KHZRUNLQJFRPPLWWHHSUHSDUHGWKHPDWHULDOIRUWKHVWHHULQJJURXS,WFRQYHQHGWLPHV,WV
PHPEHUVZHUHDVIROORZV$QQD/HHQD9lOLPlNL'HYHORSPHQW0DQDJHU67$.(6&KDLU
+HO\3DUNNLQHQ3URMHFW0DQDJHU1DWLRQDO%RDUGRI(GXFDWLRQ$QQD0DLMD+DOLVHYD
/DKWLQHQ6HQLRU$GYLVRU$VVRFLDWLRQRI)LQQLVK/RFDODQG5HJLRQDO$XWKRULWLHV.LUVL$OLOD
6HQLRU2IILFHU0LQLVWU\RI6RFLDO$IIDLUVDQG+HDOWKDQG6LUNND/LLVD,KDODLQHQ3URMHFW
6HFUHWDU\67$.(6

$QXPEHURI(&(&H[SHUWVZHUHLQYLWHGWRFRQWULEXWHWRWKHZRUNRIWKHVWHHULQJJURXSDQG
WKHZRUNLQJFRPPLWWHHDQGWKH\ZHUHDOVRDVNHGWRFRPPHQWGUDIWJXLGHOLQHVDWGLIIHUHQW
VWDJHV7KHH[SHUWVSUHVHQWHGLQIRUPHGYLHZVFULWLFLVPDQGTXHVWLRQVDQGLWUHSUHVHQWHGD
PDMRUFKDOOHQJHWREHDEOHWRWDNHDFFRXQWRIWKHPLQWKHVKRUWWLPHIUDPHDYDLODEOH

7KHSUHSDUDWLRQRIWKH1DWLRQDO&XUULFXOXP*XLGHOLQHVFRXOGEHIROORZHGDWWKH9$5778$
ZHEVLWHKWWSZZZ67$.(6ILYDUWWXDDMDQNRKWDLVWDYDVXKWPPDLQWDLQHGE\67$.(6
7KHZHEVLWHDOVRPDNHVDYDLODEOHH[SHUWDUWLFOHVDQGRWKHULQIRUPDWLRQVXSSOHPHQWLQJWKH
&XUULFXOXP*XLGHOLQHV,WKDVSURYLGHGDQRSSRUWXQLW\WRH[SUHVVRSLQLRQVDQGFRPPHQWWKH
GUDIWJXLGHOLQHV$OOFRPPHQWVKDYHEHHQDYDLODEOHWRERWKWKHVWHHULQJJURXSDQGWKH
ZRUNLQJFRPPLWWHH7KHZHESDJHVVHWXSIRUWKH&XUULFXOXP*XLGHOLQHVDUHVWLOODFFHVVLEOHDW
WKH9$5778$VLWH

,QRXUFKDQJLQJZRUOGWKHSURYLVLRQRIJRRG(&(&FDOOVIRUWKHHQJDJHPHQWDQG
FRPPLWPHQWRIUHVHDUFKDQGWUDLQLQJXQLWVLQWHUHVWJURXSVPXQLFLSDOUHSUHVHQWDWLYHV
HGXFDWRUVDQGSDUHQWV7KHDLPLVWRLPSOHPHQWDVVHVVDQGFRQWLQXRXVO\GHYHORSERWKWKH
1DWLRQDO&XUULFXOXP*XLGHOLQHVDQGWKHORFDOFXUULFXODGUDZQXSRQWKHEDVLVRIWKHP

:HWKDQNDOOWKRVHZKRKDYHFRQWULEXWHGWRWKHGUDIWLQJRIWKH1DWLRQDO&XUULFXOXP
*XLGHOLQHVSHUVRQDOO\WKURXJKWKHLUUHSUHVHQWDWLYHVDQGEDFNJURXQGJURXSVRUYLDWKH
9$5778$ZHEVLWH

+HOVLQNL6HSWHPEHU

0DWWL+HLNNLOl  $QQD/HHQD9lOLPlNL

'HSXW\'LUHFWRU*HQHUDO 'HYHORSPHQW0DQDJHU

 
&RQWHQWV

7RWKH5HDGHU  
3UHIDFH 
1$7,21$/&855,&8/80*8,'(/,1(621($5/<&+,/'+22'('8&$7,21$1'
&$5( 
7KHDLPRIWKH1DWLRQDO&XUULFXOXP*XLGHOLQHV 
3ROLF\GRFXPHQWVJRYHUQLQJHDUO\FKLOGKRRGHGXFDWLRQDQGFDUH  
(DUO\FKLOGKRRGHGXFDWLRQDQGFDUH  
:KDWHDUO\FKLOGKRRGHGXFDWLRQDQGFDUHLV 
9DOXHVLQ(&(& 
(GXFDWLRQDOJRDOV  
,PSOHPHQWDWLRQRI(&(&  
7KHFKLOG
VZHOOEHLQJDVDWDUJHW 
&DUHHGXFDWLRQDQGWHDFKLQJ±DQLQWHJUDWHGZKROH  
7KHUROHRIHGXFDWRUVLQ(&(&  
7KH(&(&HQYLURQPHQW  
-R\RIOHDUQLQJ  
7KHUROHRIODQJXDJHLQ(&(&  
7KHFKLOG
VZD\RIDFWLQJ  
3OD\LQJ
3K\VLFDODFWLYLWLHV
$UWLVWLFH[SHULHQFHVDQGVHOIH[SUHVVLRQ 
([SORUDWLRQ 
&RQWHQWRULHQWDWLRQV 
0DWKHPDWLFDORULHQWDWLRQ 
1DWXUDOVFLHQFHVRULHQWDWLRQ 
+LVWRULFDOVRFLHWDORULHQWDWLRQ 
$HVWKHWLFRULHQWDWLRQ 
(WKLFDORULHQWDWLRQ
5HOLJLRXVSKLORVRSKLFDORULHQWDWLRQ 
&RQWLQXLW\EHWZHHQWKH(&(&FRQWHQWRULHQWDWLRQVDQGWKHVXEMHFWILHOGVRIWKH&RUH&XUULFXOXPIRU3UH
6FKRRO(GXFDWLRQLQ)LQODQG 
3DUHQWDOHQJDJHPHQWLQ(&(&  
(&(&SDUWQHUVKLS  
3DUHQWDOHQJDJHPHQWLQSODQQLQJDQGHYDOXDWLQJXQLWRSHUDWLRQ  
$QLQGLYLGXDO(&(&SODQDQGLWVHYDOXDWLRQ 
6SHFLDOVXSSRUWLQ(&(&  

 
&HUWDLQFRQVLGHUDWLRQVLQLPSOHPHQWLQJ(&(&  
1HWZRUNLQJ 
(&(&DQGFKLOGUHQZLWKGLIIHUHQWODQJXDJHDQGFXOWXUHEDFNJURXQGV 
/DQJXDJHLPPHUVLRQ(&(&LQDIRUHLJQODQJXDJHDQG(&(&DFWLYLWLHVEDVHGRQDQDOWHUQDWLYH
SHGDJRJ\ 
$FKLOGLQKRVSLWDO 
$ORFDO(&(&FXUULFXOXP  
'UDZLQJXSDORFDO(&(&FXUULFXOXP  
7KHFRQWHQWRIWKHORFDO(&(&FXUULFXOXP 
$ORFDO(&(&FXUULFXOXPDVSDUWRITXDOLW\LPSURYHPHQWHIIRUWV 

 
1$7,21$/&855,&8/80*8,'(/,1(621($5/<&+,/'+22'
('8&$7,21$1'&$5(

7KHDLPRIWKH1DWLRQDO&XUULFXOXP*XLGHOLQHV

7KH1DWLRQDO&XUULFXOXP*XLGHOLQHVRQ(DUO\&KLOGKRRG(GXFDWLRQDQG&DUHSURYLGHD
QDWLRQDOWRROIRUJXLGLQJHDUO\FKLOGKRRGHGXFDWLRQDQGFDUH(&(&,WLVEDVHGRQWKH
5HVROXWLRQ&RQFHUQLQJWKH1DWLRQDO3ROLF\'HILQLWLRQRQ(DUO\&KLOGKRRG(GXFDWLRQDQG
&DUHDSSURYHGE\WKH)LQQLVK*RYHUQPHQWRQ)HEUXDU\7KHSROLF\GHILQLWLRQ
FRQWDLQVWKHFHQWUDOSULQFLSOHVDQGGHYHORSPHQWSULRULWLHVIRUSXEOLFO\RSHUDWHGDQG
VXSHUYLVHG(&(&

7KH&XUULFXOXP*XLGHOLQHVDLPWRSURPRWHWKHSURYLVLRQRI(&(&RQHTXDOWHUPVWKURXJKRXW
WKHFRXQWU\WRJXLGHWKHGHYHORSPHQWRIWKHFRQWHQWRIDFWLYLWLHVDQGWRFRQWULEXWHWR
GHYHORSLQJWKHTXDOLW\RIDFWLYLWLHVE\LQWURGXFLQJXQLIRUPSULQFLSOHVIRURUJDQLVLQJVXFK
DFWLYLWLHV

7KH&XUULFXOXP*XLGHOLQHVDOVRDLPWRLQFUHDVHWKHSURIHVVLRQDODZDUHQHVVRI(&(&VWDII
SDUHQWDOHQJDJHPHQWLQ(&(&VHUYLFHVDQGPXOWLSURIHVVLRQDOFRRSHUDWLRQEHWZHHQGLIIHUHQW
VHUYLFHVVXSSRUWLQJFKLOGUHQDQGWKHLUIDPLOLHVEHIRUHWKHVWDUWRIFRPSXOVRU\HGXFDWLRQ:LWK
WKHFRUHFXUULFXODIRUSUHVFKRRODQGEDVLFHGXFDWLRQWKH&XUULFXOXP*XLGHOLQHVRQ(&(&
IRUPDQDWLRQDOIUDPHZRUNIRUSURPRWLQJFKLOGUHQ
VZHOOEHLQJGHYHORSPHQWDQGOHDUQLQJ

0XQLFLSDOLWLHVFDQODUJHO\RUJDQLVHWKHLU(&(&VHUYLFHVVRDVWRVHUYHWKHQHHGVRIIDPLOLHVLQ
DQRSWLPDOZD\$VPXQLFLSDOLWLHVGLIIHUPDUNHGO\IURPHDFKRWKHULWLVLPSRUWDQWWKDWHDFK
RQHRIWKHPGUDZXSLWVRZQVSHFLILHGVWUDWHJLFJXLGHOLQHVWREHWDNHQLQWRDFFRXQWLQGUDIWLQJ
ORFDO(&(&FXUULFXOD

7KH&XUULFXOXP*XLGHOLQHVFRQFHUQDOOIRUPVRISXEOLFO\RSHUDWHGDQGVXSHUYLVHG(&(&
0XQLFLSDOLWLHVDUHWRXVHWKHPLQDVVHVVLQJWKHH[WHQWWRZKLFKWKHLU(&(&VHUYLFHVPHHWWKH
VWDQGDUGDQGVSHFLI\WKHFRQWHQWDQGPRGHVRIDFWLRQIRUGLIIHUHQW(&(&DFWLYLWLHVLQWKHLU
RZQFXUULFXOD

(GXFDWLRQLVOLQNHGWRFXOWXUHDQGFRQVWDQWFKDQJHLQVRFLHW\ZKLFKVKRXOGEHWDNHQLQWR
DFFRXQWLQWKHFRQWLQXRXVDVVHVVPHQWRIWKHLPSOHPHQWDWLRQRI(&(&DVZHOODVLQWKH
SURFHVVRIJRDOVHWWLQJDQGDWWDLQPHQW7REHWWHUXQGHUVWDQGZKDWWKH&XUULFXOXP*XLGHOLQHV
DUHDERXWLWLVLPSRUWDQWWRVHHWKHPDVDIUDPHZRUNZKLFKLVWREHGLVFXVVHGDQGIXUWKHU
VSHFLILHGVRDVWRIRUPXODWHMRLQWO\DJUHHGSUDFWLFHVDQGSULQFLSOHVIRUDSSOLFDWLRQLQ
PXQLFLSDOLWLHVDQGXQLWV

 
3ROLF\GRFXPHQWVJRYHUQLQJHDUO\FKLOGKRRGHGXFDWLRQDQGFDUH

7KHUHDUHERWKQDWLRQDODQGORFDOSROLF\GRFXPHQWVJRYHUQLQJHDUO\FKLOGKRRGHGXFDWLRQDQG
FDUH(&(&

1DWLRQDOUHJXODWLRQVDQGSROLF\GRFXPHQWV

• /HJLVODWLRQRQFKLOGGD\FDUHDQGSUHVFKRROHGXFDWLRQUHJXODWHV
LPSOHPHQWDWLRQRIHDUO\FKLOGKRRGHGXFDWLRQDQGFDUHRIZKLFKSUHVFKRRO
HGXFDWLRQIRUPVDSDUW

• 1DWLRQDO3ROLF\'HILQLWLRQRQ(DUO\&KLOGKRRG(GXFDWLRQDQG&DUHFRQWDLQV
WKHFHQWUDOSULQFLSOHVDQGGHYHORSPHQWSULRULWLHVIRUSXEOLFO\RSHUDWHGDQG
VXSHUYLVHG(&(&

• 1DWLRQDO&XUULFXOXP*XLGHOLQHVRQ(DUO\&KLOGKRRG(GXFDWLRQDQG&DUH
SURYLGHQDWLRQDOJXLGHOLQHVIRUWKHFRQWHQWDQGTXDOLW\RI(&(&DQGIRUGUDZLQJ
XSORFDO(&(&FXUULFXOD

• &RUH&XUULFXOXPIRU3UH6FKRRO(GXFDWLRQLQ)LQODQGSURYLGHVQDWLRQDO
JXLGHOLQHVIRUWKHFRQWHQWDQGTXDOLW\RISUHVFKRROHGXFDWLRQDQGIRUGUDZLQJXS
ORFDOSUHVFKRROFXUULFXOD

/RFDOSROLF\GRFXPHQWV

• /RFDOSROLF\GHILQLWLRQVDQGVWUDWHJLHVIRU(&(&PD\IRUPSDUWRID
PXQLFLSDOLW\
VFKLOGSROLF\SURJUDPPHRUWKH\DUHLQFOXGHGLQRWKHUSROLF\
GRFXPHQWVFRQFHUQLQJFKLOGUHQDQGIDPLOLHV7KH\GHILQHWKHFHQWUDOSULQFLSOHV
DQGGHYHORSPHQWSULRULWLHVDSSOLHGLQRUJDQLVLQJ(&(&LQWKHPXQLFLSDOLW\DQG
GHVFULEHLWV(&(&VHUYLFHV\VWHP

• $ORFDO(&(&FXUULFXOXPLVDSROLF\GRFXPHQWGUDIWHGE\DPXQLFLSDOLW\RU
VHYHUDOPXQLFLSDOLWLHVRQWKHEDVLVRIWKH1DWLRQDO&XUULFXOXP*XLGHOLQHV7KH
FXUULFXOXPWDNHVDFFRXQWRIWKHPXQLFLSDOLW\
VRZQSROLF\GHILQLWLRQVVWUDWHJLHV
DQGJRDOVDQGGHILQHVJRDOVIRUWKHFRQWHQWRIGLIIHUHQWVHUYLFHIRUPV

• $ORFDOSUHVFKRROHGXFDWLRQFXUULFXOXPDQGWKH(&(&FXUULFXOXPIRUPDQ
LQWHJUDWHGZKROHDQGWKHUHLVDFOHDUFRQWLQXLW\EHWZHHQWKHP

 
 • $XQLWVSHFLILF(&(&FXUULFXOXPLVPRUHGHWDLOHGWKDQWKHORFDO(&(&
FXUULFXOXPGHVFULELQJDGLVWULFW
VRUDXQLW
VVSHFLDOIHDWXUHVDQGSULRULWLHV7KH
XQLWVSHFLILFFXUULFXOXPDOVRLQFOXGHVVSHFLILHGJRDOVIRUGLIIHUHQWVHUYLFHIRUPV

• $QLQGLYLGXDO(&(&SODQDQGDQLQGLYLGXDOSUHVFKRROHGXFDWLRQSODQDUH
GUDZQXSMRLQWO\EHWZHHQSURIHVVLRQDOVDQGWKHFKLOG
VSDUHQWVWRSURYLGHDEDVLV
IRUWKHLPSOHPHQWDWLRQRIWKHFKLOG
VFDUHHDUO\HGXFDWLRQDQGSUHVFKRRO
HGXFDWLRQ

 
($5/<&+,/'+22'('8&$7,21$1'&$5(

:KDWHDUO\FKLOGKRRGHGXFDWLRQDQGFDUHLV

(DUO\FKLOGKRRGHGXFDWLRQDQGFDUHLVHGXFDWLRQDOLQWHUDFWLRQWDNLQJSODFHLQ\RXQJFKLOGUHQ
V
GLIIHUHQWOLYLQJHQYLURQPHQWVDLPHGDWSURPRWLQJWKHLUEDODQFHGJURZWKGHYHORSPHQWDQG
OHDUQLQJ,QRUGHUIRUWKHHGXFDWLRQDOHIIRUWVRIIDPLOLHVDQGHGXFDWRUVWRIRUPDPHDQLQJIXO
ZKROHIURPWKHFKLOG
VSRLQWRIYLHZFORVHFRRSHUDWLRQLHDQ(&(&SDUWQHUVKLSLVQHHGHG
EHWZHHQSDUHQWVDQGHGXFDWRUV

3XEOLFO\RSHUDWHGVXSHUYLVHGDQGVXSSRUWHG(&(&FRPSULVHVFDUHHGXFDWLRQDQGWHDFKLQJ
(&(&LVV\VWHPDWLFDQGJRDORULHQWHGLQWHUDFWLRQDQGFROODERUDWLRQZKHUHWKHFKLOG
V
VSRQWDQHRXVSOD\LVRINH\LPSRUWDQFH,WLVEXLOWRQDKROLVWLFYLHZRQFKLOGUHQ
VJURZWK
GHYHORSPHQWDQGOHDUQLQJGUDZLQJRQDZLGHUDQJHRISHGDJRJLFNQRZOHGJHSDUWLFXODUO\
(&(&NQRZOHGJHFURVVGLVFLSOLQDU\LQIRUPDWLRQDQGUHVHDUFKDQGH[SHUWLVHRQSHGDJRJLF
PHWKRGRORJ\

$FHQWUDOUHVRXUFHIRU(&(&LVFRPSHWHQWVWDII0DLQWDLQLQJDKLJKTXDOLW\RI(&(&UHTXLUHV
WKDWERWKHGXFDWLRQDOFRPPXQLWLHVDQGLQGLYLGXDOHGXFDWRUVKDYHDVWURQJSURIHVVLRQDO
DZDUHQHVV

(&(&VHUYLFHVDUHSURYLGHGLQDFFRUGDQFHZLWKWKHQDWLRQDOSROLF\GHILQLWLRQWKHPRVW
LPSRUWDQWDFWLYLWLHVLQFOXGLQJGD\FDUHFHQWUHVIDPLO\GD\FDUHDQGYDULRXVFRPPXQLW\EDVHG
DFWLYLWLHV7KHVHUYLFHVDUHSURYLGHGE\PXQLFLSDOLWLHVRUJDQLVDWLRQVSULYDWHVHFWRUVHUYLFH
SURYLGHUVDQGSDULVKHV3UHVFKRROHGXFDWLRQLVV\VWHPDWLFWHDFKLQJDQGHGXFDWLRQLQWHQGHG
IRUFKLOGUHQZKRZLOOVWDUWWKHLUFRPSXOVRU\HGXFDWLRQWKHIROORZLQJ\HDU(DUO\FKLOGKRRG
HGXFDWLRQDQGFDUHRIZKLFKSUHVFKRROHGXFDWLRQIRUPVDSDUWDQGEDVLFHGXFDWLRQIRUPDQ
LQWHJUDWHGZKROHWKDWHQVXUHVFRQVLVWHQF\DQGFRQWLQXLW\LQWKHFKLOG
VGHYHORSPHQW(&(&
DOVRFRYHUVFKLOGUHQVXEMHFWWRFRPSXOVRU\HGXFDWLRQLIWKH\XVH(&(&VHUYLFHV




&RUHFXUULFXODIRUSUHVFKRRODQGEDVLFHGXFDWLRQDUHGHILQHGE\WKH1DWLRQDO%RDUGRI(GXFDWLRQ


$VIRUFKLOGUHQVXEMHFWWRFRPSXOVRU\HGXFDWLRQDFWLYLW\SODQQLQJWDNHVDFFRXQWRIWKHJXLGHOLQHVRQFOXE
DFWLYLWLHVDQGWKHSODQVRQPRUQLQJDQGDIWHUQRRQDFWLYLWLHVRUJDQLVHGIRUVFKRROFKLOGUHQLQFOXGHGLQWKHEDVLF
HGXFDWLRQFXUULFXOXP

 
9DOXHVLQ(&(&

7KHYDOXHVXQGHUO\LQJ(&(&LQ)LQODQGDUHEDVHGRQLQWHUQDWLRQDOFRQYHQWLRQVRQWKHULJKWV
RIWKHFKLOGQDWLRQDOOHJLVODWLRQDQGRWKHUJXLGHOLQHV

$FHQWUDOYDOXHLQWKH&RQYHQWLRQRQWKH5LJKWVRIWKH&KLOGLVWKHFKLOG
VKXPDQGLJQLW\
5HODWLQJWRWKLVEDVLFYDOXHWKH&RQYHQWLRQFRPSULVHVWKHIROORZLQJIRXURYHUDOOSULQFLSOHV

‰ 1RQGLVFULPLQDWLRQDQGHTXDOWUHDWPHQW

‰ 7KHFKLOG
VEHVWLQWHUHVW

‰ 7KHFKLOG
VULJKWWROLIHDQGIXOOGHYHORSPHQW

‰ *LYLQJGXHZHLJKWWRWKHYLHZVRIWKHFKLOG

'UDZLQJRQ)LQQLVKEDVLFULJKWVUHJXODWLRQVRWKHUOHJDOUHJXODWLRQDQGSROLF\GRFXPHQWV
FRUH(&(&SULQFLSOHVFDQEHGHILQHG7KHVHSULQFLSOHVHPERG\FKLOGUHQ
VULJKWWR

‰ :DUPSHUVRQDOUHODWLRQVKLSV

‰ 6HFXUHGJURZWKGHYHORSPHQWDQGOHDUQLQJ

‰ 6HFXUHKHDOWK\HQYLURQPHQWVWKDWDOORZSOD\DQGDZLGHUDQJHRIDFWLYLWLHV

‰ 5HFHLYHXQGHUVWDQGLQJDQGKDYHWKHLUVD\LQDFFRUGDQFHZLWKWKHLUDJHDQG
PDWXULW\

‰ 5HFHLYHWKHVSHFLDOVXSSRUWWKH\QHHG

‰ 7KHLURZQFXOWXUHODQJXDJHUHOLJLRQDQGEHOLHIV




,Q)LQODQGWKH&RQYHQWLRQRQWKH5LJKWVRIWKH&KLOGZKLFKVDIHJXDUGVFKLOGUHQ
VJURZWKDQGGHYHORSPHQW
FDPHLQWRIRUFHDVDOHJLVODWLYHDFWLQ

 
(GXFDWLRQDOJRDOV

,Q(&(&LWLVLPSRUWDQWWRXQGHUOLQHWKHLQWULQVLFYDOXHRIFKLOGKRRGWRIRVWHUFKLOGKRRGDQG
WRKHOSWKHFKLOGGHYHORSDVDKXPDQEHLQJ(&(&DFWLYLWLHVDUHJXLGHGE\EURDGHGXFDWLRQDO
JRDOVWKDWJREH\RQGDQ\VSHFLILFHGXFDWLRQDODQGFXUULFXODUWDUJHWV7KHWDVNRIHGXFDWRUVLV
WRHQVXUHWKDWWKHIROORZLQJWKUHHHGXFDWLRQDOJRDOVIRUGHYHORSPHQWDVDKXPDQEHLQJ
VLJQLILFDQWIRUWKHZKROHOLIHZLOOEHWDNHQLQWRDFFRXQWLQWKHDFWLYLWLHVLQDEDODQFHGDQG
VXIILFLHQWO\SURIRXQGPDQQHU

‰ 3URPRWLRQRISHUVRQDOZHOOEHLQJ

‰ 5HLQIRUFHPHQWRIFRQVLGHUDWHEHKDYLRXUDQGDFWLRQWRZDUGVRWKHUV

‰ *UDGXDOEXLOGXSRIDXWRQRP\

,QSURPRWLQJSHUVRQDOZHOOEHLQJWKHIRFXVLVRQUHVSHFWIRUHDFKFKLOG
VLQGLYLGXDOLW\7KLV
DOORZVFKLOGUHQWRDFWDQGGHYHORSDVWKHLURZQXQLTXHSHUVRQDOLWLHV

5HLQIRUFHPHQWRIFRQVLGHUDWHEHKDYLRXUDQGDFWLRQWRZDUGVRWKHUVDVDQHGXFDWLRQDOJRDO
PHDQVWKDWFKLOGUHQOHDUQWRWKLQNRIRWKHUSHRSOHDQGFDUHDERXWWKHP7KH\WKLQNSRVLWLYHO\
RIWKHPVHOYHVRWKHUSHRSOHDQGRWKHUFXOWXUHVDQGHQYLURQPHQWV(&(&FRQWULEXWHVWR
SURYLGLQJFRQGLWLRQVIDYRXUDEOHIRUWKHFUHDWLRQRIDJRRGVRFLHW\DQGDFRPPRQZRUOG

*UDGXDOEXLOGXSRIDXWRQRP\DLPVWRKHOSFKLOGUHQJURZXSLQWRDGXOWVZKRDUHDEOHWRWDNH
FDUHRIWKHPVHOYHVDQGWKHLUFORVHSHRSOHDQGWRPDNHGHFLVLRQVDQGFKRLFHVFRQFHUQLQJWKHLU
RZQOLIH

 
,03/(0(17$7,212)(&(&

7KHFKLOG
VZHOOEHLQJDVDWDUJHW

7KHSULQFLSDOWDUJHWRI(&(&LVWRSURPRWHWKHFKLOG
VRYHUDOOZHOOEHLQJVRDVWRHQVXUHWKH
EHVWSRVVLEOHFRQGLWLRQVIRUJURZWKOHDUQLQJDQGGHYHORSPHQW,QWKLVZD\WKHFKLOGLVDEOHWR
HQMR\WKHFRPSDQ\RIRWKHUFKLOGUHQDQGHGXFDWRUVH[SHULHQFLQJMR\DQGIUHHGRPRIDFWLRQLQ
DQXQKXUULHGVDIHDWPRVSKHUH7KHFKLOGLVLQWHUHVWHGLQKLVHQYLURQPHQWDQGFDQGLUHFWKLV
HQHUJ\WRSOD\OHDUQLQJDQGHYHU\GD\DFWLYLWLHVZLWKDQDSSURSULDWHOHYHORIFKDOOHQJH

7RSURPRWHWKHLUZHOOEHLQJFKLOGUHQ
VKHDOWKDQGIXQFWLRQDOFDSDFLW\DUHIRVWHUHGDQGWKHLU
EDVLFQHHGVDUHDGGUHVVHG+HQFHFKLOGUHQIHHOWKDWWKH\DUHDSSUHFLDWHGDQGDFFHSWHGDVWKH\
DUHDQGWKDWWKH\DUHKHDUGDQGVHHQ7KH\DUHKHOSHGWRGHYHORSDKHDOWK\VHOIHVWHHP7KH\
ZDQWWRWU\QHZWKLQJVDQGOHDUQVRFLDOVNLOOV)XUWKHUPRUHHDFKFKLOGLVHQFRXQWHUHGLQ
DFFRUGDQFHZLWKKLVLQGLYLGXDOQHHGVSHUVRQDOLW\DQGIDPLO\FXOWXUHDQGKDVDIHHOLQJRI
EHLQJWUHDWHGIDLUO\UHJDUGOHVVRIJHQGHURUVRFLDOFXOWXUDODQGHWKQLFEDFNJURXQG

&KLOGUHQ
VZHOOEHLQJLQ(&(&DFWLYLWLHVLVSURPRWHGWKURXJKVWDEOHDQGZDUPSHUVRQDO
UHODWLRQVKLSV7KHLUUHODWLRQVKLSVWRSDUHQWVHGXFDWRUVDQGRWKHUFKLOGUHQDUHIRVWHUHGDQG
WKH\KDYHDIHHOLQJRIEHORQJLQJLQDSHHUJURXS

&DUHHGXFDWLRQDQGWHDFKLQJ±DQLQWHJUDWHGZKROH

(&(&LVDZKROHFRPSULVLQJWKHLQWHUWZLQLQJGLPHQVLRQVRIFDUHHGXFDWLRQDQGWHDFKLQJ
7KHVHGLPHQVLRQVUHFHLYHDGLIIHUHQWHPSKDVLVDFFRUGLQJWRWKHDJHRIWKHFKLOGDQGWKH
VLWXDWLRQ7KH\RXQJHUWKHFKLOGLVWKHJUHDWHUWKHH[WHQWWRZKLFKLQWHUDFWLRQVEHWZHHQWKH
FKLOGDQGHGXFDWRUVWDNHSODFHLQFDUHVLWXDWLRQV7KHVHVLWXDWLRQVDOVRLQYROYHHGXFDWLRQ
WHDFKLQJDQGJXLGDQFHEHLQJLPSRUWDQWIRUERWKWKHFKLOG
VJHQHUDOZHOOEHLQJDQGOHDUQLQJ

*RRGFDUHSURYLGHVDEDVLVIRUDOO(&(&DFWLYLWLHV,WPHDQVWKDWFKLOGUHQ
VEDVLFQHHGVDUH
VDWLVILHGVRWKDWWKH\FDQGLUHFWWKHLUDWWHQWLRQWRRWKHUFKLOGUHQWKHHQYLURQPHQWDQGDFWLYLW\
7KH\RXQJHUWKHFKLOGLVWKHPRUHKHQHHGVWREHFDUHGIRUE\DGXOWV

$JRRGFRPELQDWLRQRIFDUHHGXFDWLRQDQGWHDFKLQJFDQSURPRWHWKHFKLOG
VSRVLWLYHVHOI
LPDJHH[SUHVVLYHDQGLQWHUDFWLYHVNLOOVDQGWKHGHYHORSPHQWRIWKLQNLQJ7KHFKLOG
VGD\
FRQVLVWVRIDYDULHW\RIHYHU\GD\VLWXDWLRQVZKLFKIRUPDEDVLVIRUDZHOOGHILQHGEXWIOH[LEOH
GDLO\UK\WKP7KHFDUHDQGRWKHULQWHUDFWLYHVLWXDWLRQVDQGVPDOOWDVNVFRQWDLQHGLQWKHFKLOG
V
GD\VDUHLPSRUWDQWIRUGHYHORSPHQWDQGOHDUQLQJ(GXFDWRUVWKXVHPEHGWKHGLPHQVLRQRI
WHDFKLQJLQWKHGLIIHUHQWSKDVHVRIWKHFKLOG
VGD\

 
7KHUROHRIHGXFDWRUVLQ(&(&

(&(&VWDIIFRPSRVHVDPXOWLSURIHVVLRQDOHGXFDWRUFRPPXQLW\ZKLFKIROORZVWKHYDOXHVDQG
PRGHVRIDFWLRQGHILQHGDQGMRLQWO\DJUHHGLQQDWLRQDOSROLF\GRFXPHQWV2QQHJRWLDWLQJ
DERXWWKHYDOXHVDQGPRGHVRIDFWLRQWKHHGXFDWRUFRPPXQLW\LVEXLOGLQJDFRPPRQ(&(&
FXOWXUH ,WLVLPSRUWDQWLQHGXFDWLRQZRUNWKDWVWDIIDUHDZDUHRIWKHLUHGXFDWRUUROHDQGWKH
XQGHUO\LQJYDOXHVDQGHWKLFDOSULQFLSOHV$QDO\VLQJDQGDVVHVVLQJWKHLURZQZRUNKHOSVWKHP
DFWFRQVFLRXVO\LQDFFRUGDQFHZLWKHWKLFDOO\DQGSURIHVVLRQDOO\VRXQGSULQFLSOHV

3URIHVVLRQDODQGYRFDWLRQDONQRZOHGJHDQGH[SHULHQFHSURYLGHDVROLGIRXQGDWLRQIRU
FRPSHWHQFH7KHHGXFDWRUFRPPXQLW\GRFXPHQWVHYDOXDWHVDQGPDNHVHIIRUWVWR
FRQWLQXRXVO\GHYHORSWKHLUZRUN(GXFDWRUVPDLQWDLQDQGGHYHORSWKHLUSURIHVVLRQDOVNLOOVDQG
DUHDZDUHRIWKHFKDQJLQJQHHGVRI(&(&DQGWKHQHZFKDOOHQJHVFUHDWHGE\WHFKQRORJLFDO
DGYDQFHPHQW

(GXFDWRUVQHHGWREHFRPPLWWHGVHQVLWLYHDQGDEOHWRUHDFWWRWKHFKLOG
VIHHOLQJVDQGQHHGV
,QWKHFRPPXQLW\RIDGXOWVDQGFKLOGUHQWKH\HQDEOHDJRRGDWPRVSKHUHZKHUHFKLOGUHQKDYH
DIHHOLQJRIWRJHWKHUQHVVDQGLQFOXVLRQ(GXFDWRUVIRVWHUWKHFRQWLQXLW\RIWKHFKLOG
V
IULHQGVKLSVDQGFDUHDQGHGXFDWLRQUHODWLRQVKLSV

)RUHGXFDWLRQDQGWHDFKLQJHIIRUWVWREHFRQVFLRXVDQGJRDORULHQWHGHGXFDWRUVDQGWKH
HGXFDWRUFRPPXQLW\QHHGWRPDNHFKRLFHV7KHWDVNRIHGXFDWRUVLVWRSODQDFWLYLWLHVDQGWR
EXLOGXSDQHQYLURQPHQWZKLFKERWKWDNHVDFFRXQWRIFKLOGUHQ
VPRVWW\SLFDOZD\VRIDFWLRQ
DQGGLIIHUHQWFRQWHQWRULHQWDWLRQV7KHYLHZWKDWFDUHHGXFDWLRQDQGWHDFKLQJIRUPDQ
LQWHJUDWHGZKROHDFWVDVDJXLGLQJSULQFLSOHIRUHGXFDWRUVZKRDUHDOVRDZDUHRIWKHFKLOG
V
SRWHQWLDOIRUJURZWKDQGOHDUQLQJ(GXFDWRUVHQFRXUDJHFKLOGUHQWRDFWLQGHSHQGHQWO\VRWKH
FKLOGUHQIHHOJRRGDERXWEHLQJDEOHWRGRWKLQJVZKLOHDOVRUHFHLYLQJVXSSRUWZKHQWKH\QHHG
LW(GXFDWRUVDOVRWUDQVPLWHDUOLHUJHQHUDWLRQV
H[SHULHQFHVDQGFXOWXUDOKHULWDJHDQGYDULRXV
DVSHFWVRIVFLHQWLILFNQRZOHGJHWRFKLOGUHQWKURXJKWKHHQYLURQPHQWDQGYDULRXVMRLQW
DFWLYLWLHV

(GXFDWRUVUHVSHFWFKLOGUHQ
VSDUHQWV
DQGRQHDQRWKHU
VH[SHULHQFHVDQGYLHZVDQGEDVHWKHLU
ZRUNRQWKHSULQFLSOHVRI(&(&SDUWQHUVKLS




6HHFKDSWHU

 
7KH(&(&HQYLURQPHQW

$Q(&(&HQYLURQPHQWLVDZKROHIRUPHGE\SK\VLFDOSV\FKRORJLFDODQGVRFLDOHOHPHQWV,W
LQFOXGHVEXLOWIDFLOLWLHVLPPHGLDWHQHLJKERXUKRRGDQGSV\FKRORJLFDODQGVRFLDOVHWWLQJV
IXQFWLRQDOO\OLQNHGWRGLIIHUHQWVLWXDWLRQVDVZHOODVYDULRXVPDWHULDOVDQGHTXLSPHQW:KHQ
WKHHQYLURQPHQWLVULFKDQGIOH[LEOHDQGFRQGXFLYHWROHDUQLQJLWDWWUDFWVLQWHUHVWDQG
FXULRVLW\LQFKLOGUHQDQGHQFRXUDJHVWKHPWRH[SHULPHQWDFWDQGH[SUHVVWKHPVHOYHV,Q
DGGLWLRQWKHHQYLURQPHQWLQWURGXFHVDUDQJHRINQRZOHGJHVNLOOVDQGH[SHULHQFHEDVHG
HOHPHQWVLQWRDFWLRQVLQYROYLQJERWKFKLOGUHQDQGHGXFDWRUV

,QSODQQLQJWKH(&(&HQYLURQPHQWERWKIXQFWLRQDODQGDHVWKHWLFDVSHFWVVKRXOGEHWDNHQLQWR
DFFRXQW$ZHOOEXLOWHQYLURQPHQWKDVJRRGDPELHQFHHQFRXUDJLQJFKLOGUHQWRSOD\H[SORUH
PRYHDFWDQGH[SUHVVWKHPVHOYHVLQPDQ\GLIIHUHQWZD\V&KLOGUHQFDQSDUWLFLSDWHLQ
SODQQLQJWKHVSDFHVDQGHTXLSPHQWDVSDUWRIWKHLPSOHPHQWDWLRQRIYDULRXVFRQWHQWDUHDVDQG
WKHPHV

7KHDWPRVSKHUHRIWKH(&(&HQYLURQPHQWVKRXOGEHSRVLWLYH7KHHQYLURQPHQWVKRXOGDOVR
EHVDIHDQGWDNHDFFRXQWRIIDFWRUVUHODWHGWRFKLOGUHQ
VKHDOWKDQGWKHLUZHOOEHLQJLQJHQHUDO

3ODQQLQJRIVSDFHVFDQEHXVHGDVDPHDQVWRSURPRWHLQWHUDFWLRQVLQSHHUJURXSVRIGLIIHUHQW
NLQGVDQGVL]HVDQGEHWZHHQFKLOGUHQDQGHGXFDWRUV$ZHOOGHVLJQHG(&(&HQYLURQPHQW
SURPRWHVDFWLYLWLHVLQVPDOOJURXSVZKHUHHYHU\RQHKDVDQRSSRUWXQLW\WRWDNHSDUWLQ
GLVFXVVLRQVDQGLQWHUDFWLRQV

-R\RIOHDUQLQJ

&KLOGUHQDUHQDWXUDOO\FXULRXVZDQWLQJWROHDUQQHZWKLQJVWRUHGRDQGUHSHDW7KH\OHDUQLQ
DKROLVWLFZD\7KH\SUDFWLVHDQGOHDUQYDULRXVVNLOOVDQGZKHQHQFRXQWHULQJQHZWKLQJV
WKH\PDNHXVHRIDOOWKHLUVHQVHVLQWKHSURFHVVRIOHDUQLQJ,QWHUDFWLQJZLWKWKHHQYLURQPHQW
DQGSHRSOHFKLOGUHQFRPELQHWKLQJVDQGVLWXDWLRQVZLWKWKHLURZQH[SHULHQFHVIHHOLQJVDQG
FRQFHSWXDOVWUXFWXUHV7KH\OHDUQEHVWZKHQDFWLYHDQGLQWHUHVWHG:KHQWKH\DFWLQD
PHDQLQJIXODQGUHOHYDQWZD\WKH\FDQH[SHULHQFHWKHMR\RIOHDUQLQJDQGIHHOLQJVRIVXFFHVV

:DUPSHUVRQDOUHODWLRQVKLSVSURYLGHDEDVLVIRUOHDUQLQJ7KHHGXFDWRU
VFRPPLWPHQWWRWKH
HGXFDWLRQDQGOHDUQLQJVLWXDWLRQPDQLIHVWVLWVHOIDVVHQVLWLYLW\WRFKLOGUHQ
VIHHOLQJVDQG
HPRWLRQDOZHOOEHLQJ7KHHGXFDWRUOLVWHQVWRFKLOGUHQJLYHVWKHPRSSRUWXQLWLHVWRPDNH
LQLWLDWLYHVGHFLGHRQWKHLUDFWLYLWLHVH[SORUHGUDZFRQFOXVLRQVDQGH[SUHVVWKHLUWKRXJKWV
(&(&DLPVWRGHYHORSDSRVLWLYHGLVSRVLWLRQWROHDUQLQJ

 
7KHUROHRIODQJXDJHLQ(&(&

)URPWKHYHU\EHJLQQLQJFKLOGUHQDUHLQWHUHVWHGLQWKHLUHQYLURQPHQWEXLOGLQJDSLFWXUHRI
WKHZRUOGDURXQGWKHPDQGWKHLUSRVLWLRQZLWKLQLW/DQJXDJHKDVDYLWDOUROHLQWKLVSURFHVV,W
VXSSRUWVWKHGHYHORSPHQWRIWKHFKLOG
VFRJQLWLYHSURFHVVHVDQGHQDEOHVWKHFRPPXQLFDWLRQRI
PHDQLQJV$VWKHFKLOGJURZVXSWKHIXQFWLRQRIODQJXDJHLQVXSSRUWLQJFRJQLWLYHSURFHVVHV
JURZVLQLPSRUWDQFHLQWHUPVRISUREOHPVROYLQJORJLFDOWKLQNLQJDQGLPDJLQDWLRQ$ELOLWLHV
UHODWHGWRWKHFRPPDQGRIODQJXDJHDUHWKHNH\WRWKHFKLOG
VDELOLW\WROHDUQ

,QHDUO\FKLOGKRRGSOD\DQGIDLU\WDOHVDUHRIFRUHLPSRUWDQFHIRUWKHGHYHORSPHQWRIWKH
FKLOG
VODQJXDJHVNLOOVDQGZRUOGYLHZ/DQJXDJHOHDUQLQJLVDOZD\VDFUHDWLYHDQGSHUVRQDO
SURFHVVZKHUHLPLWDWLRQSOD\VDPDMRUUROH,QWKHLUDGXOWDQGSHHUUHODWLRQVKLSVFKLOGUHQ
OHDUQFXOWXUDODQGVRFLDOFXVWRPVDQGFRPPXQLFDWLRQPRGHOV

,QLWLDOO\\RXQJFKLOGUHQH[SUHVVWKHPVHOYHVKROLVWLFDOO\E\PHDQVRIIDFLDOH[SUHVVLRQV
JHVWXUHVDQGPRYHPHQWV$WDQHDUO\DJHFKLOGUHQQHHGDQHGXFDWRUZKRLVUHJXODUO\QHDUE\
DQGNQRZVWKHLULQGLYLGXDOZD\RIFRPPXQLFDWLQJ7KHHGXFDWRUUHDFWVHPSDWKHWLFDOO\ZKHQ
WKHFKLOGLQLWLDWHVFRQWDFWWKXVHQFRXUDJLQJWKHFKLOGWRLQWHUDFW$WWKHVDPHWLPHWKHFKLOG
V
SRVLWLYHVHOILPDJHDQGVHOIDFFHSWDQFHDUHUHLQIRUFHG*UDGXDOO\WKHFKLOGOHDUQVWRFODVVLI\
WKLQJVE\PHDQVRIFRQFHSWVDQGWRXQGHUVWDQGWKHLULQWHUUHODWLRQVKLSV7KHFKLOGDOVROHDUQV
WRIRUPTXHVWLRQV

7KURXJKGDLO\URXWLQHV\RXQJFKLOGUHQOHDUQVLWXDWLRQVSHFLILFODQJXDJH:KLOHJURZLQJXS
FKLOGUHQPDNHOLQNVEHWZHHQODQJXDJHDQGDFWLRQZKHQSOD\LQJZKLFKJLYHVDJUHDWHU
HPSKDVLVWRWKHLURZQH[SHULHQFHVHVSHFLDOO\SOD\LQWKHOHDUQLQJRIODQJXDJH&KLOGUHQXVH
ODQJXDJHWRJLYHVKDSHWRWKHSXUSRVHRIWKHLUSOD\WRGHVFULEHKRZLWSURFHHGVDQGWR
UHJXODWHWKHLUUHODWLRQVKLSV

&KLOGUHQDUHQDWXUDOO\GLVSRVHGWRSOD\LQJZLWKZRUGV5K\PHVDQGIXQQ\QRQVHQVHZRUGV
GUDZWKHFKLOG
VDWWHQWLRQWRWKHIRUPRIODQJXDJHLQSODFHRILWVPHDQLQJDQGSURYLGHV
SUDFWLFHLQWKHDUHDRIOLQJXLVWLFDZDUHQHVV&KLOGUHQDOVRHQMR\VWRULHV%RWKVWRU\WHOOLQJE\
FKLOGUHQWKHPVHOYHVDQGFUHDWLYHDFWLYLWLHVLQVSLUHGE\IDLU\WDOHVDQGVWRULHVWROGE\HGXFDWRUV
LQFUHDVHFKLOGUHQ
VFRQILGHQFHLQWKHLURZQFDSDELOLWLHVDQGKHOSWKHPFRQWLQXRXVO\H[SUHVV
WKHPVHOYHV'LIIHUHQWW\SHVRIOLWHUDWXUHEHORQJWRWKHZRUOGRIHYHQWKH\RXQJHVWFKLOGUHQ
/LWHUDWXUHRIIHUVFKLOGUHQDZLGHUDQJHRILQVLJKWVLQWRWKHZRUOGDURXQGWKHPDQGWKHULFKQHVV
RIODQJXDJHDQGSURYLGHVSUDFWLFHLQOLVWHQLQJVNLOOV

$QHGXFDWRUJXLGHVFKLOGUHQ
VREVHUYDWLRQVWHDFKHVWKHPKRZWRDFWLQGLIIHUHQWVLWXDWLRQV
DQGGHVFULEHVDQGH[SODLQVHYHQWV&KLOGUHQDUHRIIHUHGPRGHOVIRUOHDUQLQJODQJXDJHDQG
FRQFHSWVDQGWKH\DUHVSRNHQWRLQVXFKDZD\WKDWWKH\XQGHUVWDQG)RUWKHFKLOG
V
GHYHORSPHQWDOHQYLURQPHQWWRVXSSRUWWKHGHYHORSPHQWRIODQJXDJHVNLOOVLWVKRXOGEH
VWLPXODWLQJDQGDFWLYDWLQJ7KHHQYLURQPHQWVKRXOGDOORZWKHFKLOGWRREVHUYHERWKVSRNHQ
DQGZULWWHQODQJXDJH

 
7KHFKLOG
VZD\RIDFWLQJ

3OD\LQJPRYHPHQWH[SORUDWLRQDQGVHOIH[SUHVVLRQWKURXJKGLIIHUHQWIRUPVRIDUWDUHZD\VRI
DFWLQJDQGWKLQNLQJSHFXOLDUWRFKLOGUHQ6XFKDFWLYLWLHVHQKDQFHWKHLUZHOOEHLQJDQG
SHUFHSWLRQRIWKHPVHOYHVDQGLQFUHDVHWKHLURSSRUWXQLWLHVIRUSDUWLFLSDWLRQ$QDFWLYLW\WKDW
FKLOGUHQILQGPHDQLQJIXODOVRJLYHVH[SUHVVLRQWRWKHLUWKRXJKWVDQGIHHOLQJV$VHGXFDWRUV
LQWHUDFWDQGGLVFXVVZLWKFKLOGUHQDQGREVHUYHWKHLUDFWLYLWLHVWKH\DOVRJHWLQVLJKWVLQWRWKHLU
ZRUOGDQGWKLQNLQJ

:D\VRIDFWLQJWKDWDUHSHFXOLDUWRFKLOGUHQDUHWDNHQLQWRDFFRXQWLQSODQQLQJDQG
LPSOHPHQWLQJDFWLYLWLHVDQGXVHGDVDJXLGLQJSULQFLSOHLQWKHHGXFDWRUFRPPXQLW\
V
LQWHUDFWLRQVZLWKFKLOGUHQ7KH\HPERG\WKHVLJQLILFDQFHRIODQJXDJHFRQWHQWRULHQWDWLRQV
DQGFKLOGUHQ
VOHDUQLQJSURFHVV(&(&LVGHYHORSHGKROLVWLFDOO\WKURXJKREVHUYLQJFKLOGUHQ
V
DQGWKHHGXFDWRUFRPPXQLW\
VDFWLYLWLHVDQGWKH(&(&HQYLURQPHQW

3OD\LQJ

7KHFKLOG
VPHDQLQJIXOH[SHULHQFHV

&KLOGUHQSOD\IRUWKHVDNHRISOD\LQJDQGDWEHVWSOD\FDQJLYHWKHPGHHSVDWLVIDFWLRQ
$OWKRXJKFKLOGUHQGRQRWSOD\LQRUGHUWROHDUQWKH\OHDUQWKURXJKSOD\3OD\LVUDWKHUDQ
DWWLWXGHWKDQDQDFWLYLW\RIDFHUWDLQNLQGDQGWKHVDPHDFWLYLW\PD\VLJQLI\SOD\IRURQHFKLOG
EXWQRWIRUDQRWKHU$VSOD\LQJLVVRFLDOE\QDWXUHSHHUJURXSVKDYHDVLJQLILFDQWHIIHFWRQWKH
ZD\WKHSOD\LQJVLWXDWLRQGHYHORSV

9HU\\RXQJFKLOGUHQSOD\LQLQWHUDFWLRQZLWKDGXOWVRUROGHUFKLOGUHQ$WDQHDUO\DJHFKLOGUHQ
DOVRVWDUWWRDFWLYHO\H[SORUHWKHLUREMHFWHQYLURQPHQWZKLFKSUHSDUHVWKHPWRDWUDQVLWLRQWR
LPDJLQDU\SOD\,PDJLQDU\JDPHVPHDQGHWDFKPHQWIURPKHUHDQGQRZDQGWKHRQVHWRI
LPDJLQDWLRQDQGDEVWUDFWWKLQNLQJ2OGHUFKLOGUHQLQSDUWLFXODUDUHDWWUDFWHGE\JDPHVZLWK
UXOHV

&KLOGUHQXVHHYHU\WKLQJWKH\VHHKHDUDQGH[SHULHQFHDVHOHPHQWVLQWKHLUSOD\:KHQWKH\
SOD\WKH\LPLWDWHDQGFUHDWHQHZWKLQJV7KH\SLFNXSWKLQJVWKDWDUHPHDQLQJIXOIRUWKHP
IURPWKHVSKHUHRIERWKWKHUHDOZRUOGDQGWKDWRIIDQWDV\DQGILFWLRQWUDQVODWLQJWKHPLQWRWKH
ODQJXDJHRISOD\$OOWKDWLVYLVLEOHLQWKHSOD\LVPHDQLQJIXOWRWKHFKLOGEXWQRWDOOWKDWLV
PHDQLQJIXOWRWKHFKLOGLVYLVLEOHLQWKHSOD\




 
7KHHGXFDWRUFRPPXQLW\
VDFWLYLW\

7KHH[WHQWWRZKLFKSOD\JLYHVVDWLVIDFWLRQWRWKHFKLOGRIWHQGHSHQGVRQHGXFDWRUV
DFWLYLWLHV
6XSSRUWLQJFKLOGUHQ
VSOD\UHTXLUHVFDUHIXOREVHUYDWLRQDQGDQDELOLW\WRDQDO\VHSOD\
VLWXDWLRQV6HQVLWLYHFRPPLWWHGHGXFDWRUVUHFRJQLVHFKLOGUHQ
VYHUEDODQGQRQYHUEDO
LQLWLDWLYHVDQGLQWHQWLRQVDQGUHVSRQGWRWKHP(GXFDWRUVDOORZIUHHGRPWRFKLOGUHQZKRDUH
HQJDJHGLQSOD\EXWWREHVXFFHVVIXOFKLOGUHQ
VSOD\DOVRRIWHQQHHGVWREHJXLGHGGLUHFWO\RU
LQGLUHFWO\'HSHQGLQJRQFKLOGUHQ
VDJHSOD\LQJVNLOOVW\SHRISOD\DQGRWKHUVLWXDWLRQDO
IDFWRUVHGXFDWRUV
UROHYDULHVIURPSDUWLFLSDWLRQWRRXWVLGHREVHUYDWLRQ,QGLUHFWJXLGDQFH
DLPVWRHQULFKSOD\ZLWKLGHDVRUWRROVIRULQVWDQFH

(GXFDWRUVXQGHUVWDQGWKHVLJQLILFDQFHRIWKHSHHUJURXSLQHQDEOLQJFKLOGUHQ
VVSRQWDQHRXV
SOD\7KH\VKRZDSSUHFLDWLRQRIWKHSOD\E\OLVWHQLQJWRWKHFKLOGUHQWKDWLVWKH\ERWK
REVHUYHWKHSOD\DQGFRPPXQLFDWHRUDOO\ZLWKWKHFKLOGUHQ(GXFDWRUVDOVRIDPLOLDULVH
WKHPVHOYHVZLWKWKHUHDOLW\UHIOHFWHGLQFKLOGUHQ
VSOD\E\IROORZLQJFKLOGUHQ
VSRSXODUFXOWXUH
IRULQVWDQFH

(GXFDWRUVDUHDOVRDEOHWRDQDO\VHFKLOGUHQ
VSOD\LQWHUPVRIOHDUQLQJ7KH\UHFRJQLVHWKH
LPSRUWDQFHRISOD\WRLPDJLQDWLYHFDSDELOLWLHVHPSDWK\WRZDUGVRWKHUSHRSOH
VVLWXDWLRQV
VRFLDOVNLOOVODQJXDJHOHDUQLQJDQGSK\VLFDOVNLOOVDPRQJRWKHUV(GXFDWRUVDUHDZDUHRIDQG
FDSDEOHRIPDNLQJXVHRIWKHOLQNVEHWZHHQSOD\DQGRWKHUDUHDVRIDFWLYLW\EXWWKH\DOVR
OHDYHURRPIRUFKLOGUHQ
VVSRQWDQHRXVVRPHWLPHVHYHQURXJKLGHDVDERXWSOD\

7KH(&(&HQYLURQPHQW

(&(&W\SLFDOO\LQYROYHVFRQVFLRXVHIIRUWVWREXLOGXSDVWLPXODWLQJSOD\HQYLURQPHQWDQGWR
PDLQWDLQDQGUHQHZLW%XLOGLQJDJRRGSOD\HQYLURQPHQWLVEDVHGRQHGXFDWRUV
H[SHUWLVHRI
SOD\FXOWXUHDQGWKHLUNQRZOHGJHRIWKHVWDJHVWKURXJKZKLFKFKLOGUHQ
VSOD\GHYHORSV
&KLOGUHQ
VFXUUHQWLQWHUHVWVDUHDOVRWDNHQLQWRDFFRXQW&KLOGUHQWKHPVHOYHVSDUWLFLSDWHLQWKH
PDLQWHQDQFHDQGUHQHZDORIWKHHQYLURQPHQWDFFRUGLQJWRWKHLUFDSDELOLWLHV$OVRLPSURYLQJ
WKHSOD\HQYLURQPHQWRIIHUVSDUHQWVDJRRGRSSRUWXQLW\IRUSDUWLFLSDWLRQ

&KLOGUHQ
VDJHDQGGHYHORSPHQWDOVWDJHDQGWKHQHFHVVDU\DUUDQJHPHQWVLQWHUPVRIWLPH
VSDFHDQGHTXLSPHQWDUHLPSRUWDQWFRQVLGHUDWLRQVZKHQSODQQLQJLQDQGRXWGRRUVSDFHV
(TXLSPHQWVKRXOGEHYHUVDWLOHDQGFRQYHUWLEOHDQGDGHTXDWHLQQXPEHU

 
3K\VLFDODFWLYLWLHV

7KHFKLOG
VPHDQLQJIXOH[SHULHQFHV

'DLO\SK\VLFDODFWLYLW\LVIXQGDPHQWDOWRFKLOGUHQ
VZHOOEHLQJDQGKHDOWK\JURZWK:KHQ
HQJDJLQJLQSK\VLFDODFWLYLWLHVFKLOGUHQWKLQNH[SHULHQFHMR\H[SUHVVWKHLUIHHOLQJVDQGOHDUQ
QHZWKLQJV3K\VLFDODFWLYLW\DOVRPHDQVH[SHULHQFLQJPRYLQJVZLIWO\SHUVSLULQJDQGJHWWLQJ
EUHDWKOHVV3K\VLFDOO\DFWLYHOLIHVW\OHVVWDUWWRGHYHORSLQHDUO\FKLOGKRRG

)RUFKLOGUHQSK\VLFDODFWLYLW\LVDQDWXUDOZD\RIJHWWLQJWRNQRZWKHPVHOYHVRWKHUSHRSOH
DQGWKHHQYLURQPHQW&KLOGUHQ
VDZDUHQHVVDQGPDVWHULQJRIWKHLURZQERG\SURYLGHVDEDVLV
IRUVRXQGVHOIHVWHHP

7KHHGXFDWRUFRPPXQLW\
VDFWLYLW\

,WLVLPSRUWDQWWKDWWKHDFWLRQVDQGHYHU\GD\FKRLFHVRIWKHHGXFDWRUFRPPXQLW\SURYLGH
FKLOGUHQZLWKDQRSSRUWXQLW\WRKDYHGDLO\SK\VLFDODFWLYLW\(GXFDWRUVVKRXOGFUHDWHDQ
HQYLURQPHQWWKDWHQFRXUDJHVSK\VLFDODFWLYLWLHVDPRQJFKLOGUHQUHPRYHREVWDFOHVWRSK\VLFDO
DFWLYLW\DQGWHDFKUHODWHGVDIHW\VNLOOVWRFKLOGUHQ&KLOGUHQZKRDUHOHVVDFWLYHSK\VLFDOO\
VKRXOGEHHQFRXUDJHGWRPRYH

5HJXODUSK\VLFDOHGXFDWLRQDFWLYLWLHVDUHRIFRUHLPSRUWDQFHWRWKHFKLOG
VGHYHORSPHQWDQG
PRWRUOHDUQLQJ,WLVLPSRUWDQWWKDWHGXFDWRUVEHDEOHWRPDNHXVHRIGLIIHUHQWVW\OHVRI
WHDFKLQJDQGWKDWHDFKFKLOG
VPRWRUGHYHORSPHQWLVREVHUYHGUHJXODUO\/LQNLQJPRWRU
DFWLYLW\WRRWKHUDFWLYLWLHVDQGWHDFKLQJLQFUHDVHVFKLOGUHQ
VRSSRUWXQLWLHVWROHDUQ

7KHHGXFDWRUFRPPXQLW\VKRXOGWRJHWKHUFRQVLGHUWKHUROHRISK\VLFDODFWLYLW\LQFKLOGUHQ
V
OHDUQLQJWKXVSURYLGLQJDEDVLVIRUKLJKTXDOLW\SK\VLFDODQGKHDOWKHGXFDWLRQDQGDQDFWLRQ
FXOWXUHWKDWIDYRXUVSK\VLFDODFWLYLW\

7KH(&(&HQYLURQPHQW

$JRRG(&(&HQYLURQPHQWUHLQIRUFHVFKLOGUHQ
VLQQDWHGHVLUHWRPRYHDURXVHVWKHLULQWHUHVW
LQOHDUQLQJQHZWKLQJVDQGHQFRXUDJHVWKHPWRGHYHORSWKHLUVNLOOV,WVKRXOGRIIHUDQ
DSSURSULDWHOHYHORIFKDOOHQJHDQGPRWLYDWHSK\VLFDODFWLYLWLHVDQGSOD\%HLQJWKHPRVW
LPSRUWDQWSODFHIRUFKLOGUHQ
VSK\VLFDODFWLYLWLHVWKHSOD\JURXQGVKRXOGHQFRXUDJHFKLOGUHQWR
PRYH&KLOGUHQVKRXOGDOVREHDOORZHGWRXVHWKHSOD\JURXQGHTXLSPHQWLQWKHLUVSRQWDQHRXV
SK\VLFDODFWLYLW\DQGSOD\1DWXUDODUHDVDQGVSRUWVIDFLOLWLHVLQWKHQHLJKERXUKRRGVKRXOGEH
XWLOLVHG

&RQYHUWLELOLW\LVDNH\FRQVLGHUDWLRQLQSODQQLQJDQGXVLQJGLIIHUHQWVSDFHVDVFKLOGUHQQHHG
URRPWRPRYH(YHQLQLQGRRUIDFLOLWLHVFKLOGUHQVKRXOGKDYHDQRSSRUWXQLW\WRPRYHDQG
SOD\YLJRURXVO\



 
$UWLVWLFH[SHULHQFHVDQGVHOIH[SUHVVLRQ


7KHFKLOG
VPHDQLQJIXOH[SHULHQFHV

&KLOGUHQJDLQWKHLUEDVLFDUWLVWLFH[SHULHQFHVLQDGHYHORSPHQWDOHQYLURQPHQWWKDWIRVWHUVD
ZLGHUDQJHRIDUWLVWLFDFWLYLWLHVVXFKDVPXVLFGUDZLQJGDQFHGUDPDKDQGLFUDIWVDQG
FKLOGUHQ
VOLWHUDWXUH7KHLQWHQVLW\DQGHQFKDQWPHQWRIDUWLVWLFH[SHULHQFHVDFWLYDWHVFKLOGUHQ
DQGJULSVWKHLUDWWHQWLRQ$UWLVWLFDFWLYLWLHVDQGH[SHULHQFHVLQWURGXFHWKHFKLOGWRDQDHVWKHWLF
ZRUOGWKHMR\RIOHDUQLQJDUWLVWLFGUDPDIRUPVVRXQGVFRORXUVVFHQWVVHQWLPHQWVDQG
FRPELQDWLRQVRIH[SHULHQFHVEDVHGRQWKHGLIIHUHQWVHQVHV$UWJLYHVWKHFKLOGDQRSSRUWXQLW\
WRH[SHULHQFHDQLPDJLQDU\ZRUOGZKHUHHYHU\WKLQJLVSRVVLEOHDQGWUXHLQDPDNHEHOLHYH
ZD\

$UWDOVRLQYROYHVUHJXODULW\LQWHUPVRIWKHFKLOG
VOHDUQLQJDQGSUDFWLVLQJ&KLOGUHQHQMR\
DUWLVWLFDFWLYLW\VNLOOVDQGVHOIH[SUHVVLRQERWKZKHQZRUNLQJDORQHDQGZKHQZRUNLQJ
WRJHWKHUZLWKRWKHUFKLOGUHQLQYDULRXVSURGXFWLRQV7KURXJKDUWLVWLFH[SHULHQFHVDQG
DFWLYLWLHVFKLOGUHQGHYHORSDVLQGLYLGXDOVDQGJURXSPHPEHUV%DVLFDUWLVWLFH[SHULHQFHV
JDLQHGLQHDUO\FKLOGKRRGIRUPDEDVLVIRUFKLOGUHQ
VODWHUDUWSUHIHUHQFHVDQGFKRLFHVDVZHOO
DVWKHLUFXOWXUDOYDOXHV

7KHHGXFDWRUFRPPXQLW\
VDFWLYLW\

7KHHGXFDWRUFRPPXQLW\HQDEOHVFKLOGUHQ
VDUWLVWLFH[SHULHQFHDQGH[SUHVVLRQVKRZLQJ
UHVSHFWIRUWKHLURZQSHUVRQDOFKRLFHVDQGREVHUYDWLRQV&KLOGUHQ
VRZQLPDJLQDWLRQDQG
FUHDWLYLW\DUHJLYHQURRPWLPHDQGSHDFH7KHLPSOHPHQWDWLRQDQGVFKHGXOLQJRIDFWLYLWLHV
DUHOHGE\FUHDWLYHLGHDVDQGWKHMR\RIZRUNLQJWRJHWKHU&KLOGUHQVKRXOGEHSURYLGHGZLWK
RSSRUWXQLWLHVIRUDZLGHUDQJHRIDFWLYLWLHVLQGLIIHUHQWDUWIRUPVLQFOXGLQJSDLQWLQJGUDZLQJ
SOD\LQJDQLQVWUXPHQWVLQJLQJEXLOGLQJDFWLQJGDQFLQJZRRGZRUNEULFRODJHVHZLQJDQG
OLVWHQLQJDQGWHOOLQJVWRULHVDQGSRHPV

7KHHGXFDWRUJXLGHVFKLOGUHQLQWDVNVWKDWUHTXLUHWHFKQLFDOVNLOOVDQGDOVRKHOSVWKHPSUDFWLVH
WKHLUVNLOOVZKHUHWKHIRFXVLVRQWKHLQYDOXDEOHWDUJHWVVHWE\WKHFKLOGUHQWKHPVHOYHV7KH
HGXFDWRUGRFXPHQWVFKLOGUHQ
VDUWLVWLFDFWLYLWLHVDQGRUJDQLVHVHYHQWVIRUSUHVHQWLQJWKHUHVXOWV
RIWKHVHDFWLYLWLHV$PRQJWKHPVHOYHVWKHHGXFDWRUFRPPXQLW\VKRXOGVXSSRUWWKHLUYDULHG
SURIHVVLRQDOVNLOOVFUHDWLYLW\VSRQWDQHLW\DQGFRXUDJHWRLPSURYLVH$UWSURYLGHVHGXFDWRUV
ZLWKPHDQVWRGHYHORSDVDKXPDQEHLQJDQGWRKHOSGHYHORSKXPDQLW\LQFKLOGUHQ

7KH(&(&HQYLURQPHQW

7KH(&(&HQYLURQPHQWVKRXOGRIIHUFKLOGUHQRSSRUWXQLWLHVIRUDUWLVWLFH[SHULHQFHVDQGHQVXUH
WKDWWKH\KDYHWLPHDQGURRPWRIUHHO\H[SORUHDUWLVWLFPDWHULDOVLGHDVDQGFRQFHSWVDQG
SUDFWLVHWKHLUVNLOOVLQYDULRXVZD\V$QDHVWKHWLFHQYLURQPHQWDVVXFKFDQEHDQDUWLVWLF
H[SHULHQFHIRUWKHFKLOG7KH(&(&HQYLURQPHQWFRQWULEXWHVWREULQJLQJRXWWKHFKLOG
VDUWLVWLF
H[SUHVVLRQDQGVNLOOV

 
$UWLVWLFH[SHUWLVHFDQEHH[WHQGHGWKURXJKFRRSHUDWLRQZLWKORFDOFXOWXUDODXWKRULWLHVRURWKHU
H[SHUWVSURPRWLQJFKLOGUHQ
VFXOWXUH:KHQHGXFDWRUVWKHPVHOYHVHQMR\DUWWKH\FUHDWHDQ
LQVSLULQJDWPRVSKHUHLQWKHLUHQYLURQPHQWDWWKHVDPHWLPHSURYLGLQJDSRVLWLYHPRGHOIRU
DUWLVWLFDSSUHFLDWLRQ

([SORUDWLRQ

7KHFKLOG
VPHDQLQJIXOH[SHULHQFHV

&KLOGUHQLQQDWHO\KDYHDVHQVHRIH[SORUDWLRQDQGZRQGHU2QH[SORULQJWKH\VDWLVI\WKHLU
FXULRVLW\DQGKDYHDIHHOLQJRIEHORQJLQJLQWKHZRUOGDQGFRPPXQLW\DURXQGWKHP$W
GLIIHUHQWDJHVFKLOGUHQ
VRZQLQQHUZRUOGVLQWHUDFWLRQVZLWKRWKHUFKLOGUHQDQGDGXOWVDQG
WKHLULPPHGLDWHHQYLURQPHQWLQVSLUHWKHPWRVSRQWDQHRXVH[SORUDWLRQ&KLOGUHQIHHOWKDWWKHLU
H[SORUDWLRQVTXHVWLRQVWKLQNLQJDQGDFWLYLW\DUHPHDQLQJIXO,QGLYLGXDOO\RUWRJHWKHULQD
JURXSWKH\FDQWDNHWKHLUWLPHH[SHULPHQWLQJZLWKQHZWKLQJV([SHULHQFHVRIWULDODQGHUURU
DQGPRPHQWVRILQVLJKWPDLQWDLQDQGVWUHQJWKHQWKHFKLOG
VMR\RIOHDUQLQJ

7KHHGXFDWRUFRPPXQLW\
VDFWLYLW\

7KURXJKWKHLURZQDWWLWXGHVDQGDFWLYLW\HGXFDWRUVFUHDWHDQRSHQDWPRVSKHUHWKDWLQVSLUHV
DQGHQFRXUDJHVH[SORUDWLRQ7KH\DOORZWLPHIRUH[SORUDWLRQDQGZRQGHULQJDQGPDNHLW
SRVVLEOHIRUFKLOGUHQWRJDLQDZLGHUDQJHRIH[SHULHQFHVWKDWNHHSXSWKHLULQWHUHVW:KHQ
OHDUQLQJDQGH[SORULQJWRJHWKHUZLWKFKLOGUHQHGXFDWRUVJXLGHDQGHQFRXUDJHFKLOGUHQLQ
YDULRXVFDUHHGXFDWLRQDQGWHDFKLQJVLWXDWLRQVWRH[SHULPHQWDQGWRILQGH[SODQDWLRQVWR
SKHQRPHQDLQWKHZRUOGDURXQGWKHP7KURXJKWKHLUDFWLYLW\HGXFDWRUVHQDEOHDQGHQFRXUDJH
FKLOGUHQ
VRZQWKLQNLQJSUREOHPVROYLQJDQGLPDJLQDWLRQ

7KH(&(&HQYLURQPHQW

$SRVLWLYHHQFRXUDJLQJ(&(&HQYLURQPHQWVXSSRUWVFKLOGUHQ
VH[SORUDWLYHDFWLYLWLHV7R
HQFRXUDJHH[SORUDWLRQWKH(&(&HQYLURQPHQWVKRXOGEHYHUVDWLOHRIIHULQJDZLGHYDULHW\RI
LQVSLULQJPDWHULDOVDQGHTXLSPHQW1DWXUHDQGWKHLPPHGLDWHQHLJKERXUKRRGDUHLPSRUWDQW
HOHPHQWVRIWKHH[SORUDWLRQHQYLURQPHQW7KHHQYLURQPHQWDOVRLQWURGXFHVDUDQJHRI
NQRZOHGJHDQGH[SHULHQFHEDVHGHOHPHQWVLQWRWKHDFWLRQVVKDUHGE\FKLOGUHQDQGHGXFDWRUV
$ULFKIOH[LEOH(&(&HQYLURQPHQWHQDEOHVWKHXVHRIDOOVHQVHVDQGWKHZKROHERG\IRU
H[SORUDWLRQH[SHULPHQWDWLRQDQGLQVLJKWV

 
 &RQWHQWRULHQWDWLRQV

&KLOGUHQOHDUQDOOWKHWLPHLQGLIIHUHQWHQYLURQPHQWVDQGVLWXDWLRQV,QLQWHUDFWLRQVZLWKWKH
HQYLURQPHQWDQGSHRSOHFKLOGUHQSURFHVVDQGDQDO\VHLQIRUPDWLRQXVLQJWKHLUH[LVWLQJ
FRQFHSWXDOIUDPHZRUNVEHLQJDFWLYHOHDUQHUV(GXFDWLRQDODFWLYLW\LQKHUHQWO\UHTXLUHVWKDW
HGXFDWRUVPDNHYDOXHFKRLFHV7KLVFDQEHVHHQIRULQVWDQFHLQWKHFKRLFHVPDGHZKHQ
IRUPXODWLQJWKH(&(&HQYLURQPHQW

,Q(&(&LWLVQHFHVVDU\WRDFKLHYHDGHYHORSPHQWDOEDODQFHWKURXJKDVSHFWUXPRIGLIIHUHQW
DFWLYLWLHVDQGWKHHGXFDWRUVKRXOGEHDZDUHRIWKHVWDJHRIHDFKFKLOG
VJURZWKDQG
GHYHORSPHQW7KHEDODQFHEHWZHHQWKHGLIIHUHQWFRQWHQWDUHDVRI(&(&FDQEHH[DPLQHGE\
XVLQJFHUWDLQEDVLFIRUPVRIKXPDQXQGHUVWDQGLQJNQRZOHGJHDQGH[SHULHQFH7KHUHDUH
VHYHUDOVXFKEDVLFIRUPVDQGWKH\DUHPXWXDOO\FRPSOHPHQWDU\7KLVNLQGRIIUDPHZRUNLV
XVHGLQRUGHUWRHQVXUHWKDWWKHFKLOGJHWVDSLFWXUHRIWKHZRUOGWKDWLVPDQ\VLGHGLQWHJUDWHG
DQGFRPSUHKHQVLYH

7KHFRUHFRQWHQWDUHDVRI(&(&DUHEXLOWRQWKHIROORZLQJVL[RULHQWDWLRQV

• PDWKHPDWLFDORULHQWDWLRQ

• QDWXUDOVFLHQFHVRULHQWDWLRQ

• KLVWRULFDOVRFLHWDORULHQWDWLRQ

• DHVWKHWLFRULHQWDWLRQ

• HWKLFDORULHQWDWLRQ

• UHOLJLRXVSKLORVRSKLFDORULHQWDWLRQ

7KHFRQFHSWRIRULHQWDWLRQXQGHUOLQHVWKHQRWLRQWKDWWKHLQWHQWLRQLVQRWIRUFKLOGUHQWRVWXG\
WKHFRQWHQWRIGLIIHUHQWVXEMHFWVEXWWRVWDUWWRDFTXLUHWRROVDQGFDSDELOLWLHVE\PHDQVRI
ZKLFKWKH\DUHDEOHWRJUDGXDOO\LQFUHDVHWKHLUDELOLW\WRH[DPLQHXQGHUVWDQGDQGH[SHULHQFH
DZLGHUDQJHRISKHQRPHQDLQWKHZRUOGDURXQGWKHP(DFKRULHQWDWLRQKDVLWVRZQVSHFLILF
ZD\RIFULWLFDOWKLQNLQJDQGRIH[SUHVVLQJFUHDWLYLW\SUDFWLVLQJLPDJLQDWLRQUHILQLQJIHHOLQJV
DQGGLUHFWLQJDFWLYLW\




2ULHQWDWLRQVDUHEDVLFDOO\GLIIHUHQWZD\VRIIHHOLQJDERXWRUUHDFWLQJWRSKHQRPHQDDQGWKLQJV

 
,QDGGLWLRQWKHDFWXDOVHOHFWLRQDQGPRGLILFDWLRQRIFRQWHQWLQGLIIHUHQWRULHQWDWLRQVYDULHV
GHSHQGLQJRQHQYLURQPHQWDQGVLWXDWLRQ7KHHGXFDWRUFRPPXQLW\QHHGVWRKDYHGLGDFWLF
NQRZOHGJHDERXWFKLOGUHQRIGLIIHUHQWDJHVDQGGLIIHUHQWGHYHORSPHQWDOVWDJHVDQGLQRUGHUWR
EHDEOHWRVHOHFWDQGPRGLI\FRQWHQWLQVSHFLILFFDVHVWKH\QHHGNQRZOHGJHDERXWWKHFKLOG
JURXSRSHUDWLQJHQYLURQPHQWDQGFRQGLWLRQV$WEHVWVXFFHVVIXOVHOHFWLRQRIFRQWHQWKHOSV
FKLOGUHQJDLQDQXQGHUVWDQGLQJRIWKHEDVLFZD\VRIVKDSLQJDQGH[SODLQLQJKXPDQH[SHULHQFH
WKDWKDYHGHYHORSHGWKURXJKKLVWRULFDOGHYHORSPHQWSURFHVVHV

7KHWKHPHVSKHQRPHQDDQGFRQWHQWVRIGLIIHUHQWRULHQWDWLRQVDUHOLQNHGWRFKLOGUHQ
V
LPPHGLDWHHQYLURQPHQWGDLO\OLIHDQGFRQFUHWHH[SHULHQFHVVRWKDWWKHFKLOGUHQDUHDEOHWR
PDNHREVHUYDWLRQVDQGIRUPWKHLURZQYLHZV&RQWHQWVRIGLIIHUHQWRULHQWDWLRQVDUHDOVR
DYDLODEOHLQOLEUDULHVWKHDWUHVH[KLELWLRQVHWF)XUWKHUPRUHPRGHUQLQIRUPDWLRQWHFKQRORJ\
ZLWKLWVYDULRXVDUHDVRIDSSOLFDWLRQRIIHUVDQDEXQGDQFHRIFRQWHQWV&KLOGUHQ
VRZQLQWHUHVWV
DQGQHHGVDQGORFDOFLUFXPVWDQFHVVKRXOGEHGHFLVLYHIDFWRUVLQVHOHFWLQJFRQWHQWVLQVSHFLILF
FDVHV

,Q(&(&WKHFKLOGGRHVQRWVWXG\RUDVVLPLODWHWKHFRQWHQWRIGLIIHUHQWRULHQWDWLRQVRU
GLIIHUHQWVXEMHFWVDQGWKHUHDUHQRSHUIRUPDQFHUHTXLUHPHQWV7KHRULHQWDWLRQVSURYLGH
HGXFDWRUVZLWKDIUDPHZRUNWKDWWHOOVWKHPZKDWNLQGRIH[SHULHQFHVVLWXDWLRQVDQG
HQYLURQPHQWVWKH\VKRXOGORRNIRUJLYHVKDSHWRDQGRIIHULQRUGHUWRHQVXUHFKLOGUHQ
V
EDODQFHGJURZWKDQGGHYHORSPHQW

/DQJXDJHLVDPHDQVRIFRPPXQLFDWLRQDQGLQWHUDFWLRQLQWKHFRQWH[WRIDOORULHQWDWLRQV
7KHUHIRUHLWLVRIYLWDOLPSRUWDQFHLQDOOFDUHHGXFDWLRQDQGWHDFKLQJVLWXDWLRQVWKDWHGXFDWRUV
XVHODQJXDJHWKDWLVDVFDUHIXODQGDFFXUDWHDVSRVVLEOHDQGDOVRWKDWWKH\H[SODLQQHZ
FRQFHSWVWRFKLOGUHQ

0DWKHPDWLFDORULHQWDWLRQ

0DWKHPDWLFDORULHQWDWLRQLVEDVHGRQPDNLQJFRPSDULVRQVFRQFOXVLRQVDQGFDOFXODWLRQVLQD
FORVHGFRQFHSWXDOV\VWHP,Q(&(&WKLVWDNHVSODFHLQDSOD\IXOPDQQHULQGDLO\VLWXDWLRQVE\
XVLQJFRQFUHWHPDWHULDOVREMHFWVDQGHTXLSPHQWWKDWFKLOGUHQNQRZDQGWKDWWKH\ILQG
LQWHUHVWLQJ

1DWXUDOVFLHQFHVRULHQWDWLRQ

7KHSKHQRPHQDRIWKHQDWXUDOZRUOGDUHH[DPLQHGE\REVHUYLQJVWXG\LQJDQGH[SHULPHQWLQJ
,QWKHVDPHZD\DVDERYHWKHFRQWHQWDUHDVRIWKLVRULHQWDWLRQZLWKWKHLUYDULRXVSKHQRPHQD
VXFKDVDQLPDOVDQGSODQWVIRXQGGXULQJGLIIHUHQWVHDVRQVFDQEHORFDWHGLQFKLOGUHQ
V
LPPHGLDWHHQYLURQPHQWLQGRRUVDQGRXWGRRUV$W\SLFDOIHDWXUHRIWKHQDWXUDOVFLHQFHV
RULHQWDWLRQLVWKHXVHRIH[SHULPHQWDWLRQ&DXVDOUHODWLRQVKLSVEHFRPHIDPLOLDULQFRQWUROOHG
FRQGLWLRQVZKLFKKHOSVFKLOGUHQJUDGXDOO\JDLQLQVLJKWVLQWRQDWXUDOSKHQRPHQDDQGWKH
IDFWRUVLQIOXHQFLQJWKHP



 
+LVWRULFDOVRFLHWDORULHQWDWLRQ

,QWKHKLVWRULFDORULHQWDWLRQREMHFWVDQGGRFXPHQWVIURPWKHSDVWDUHXVHGWREXLOGDSLFWXUHRI
WKHSDVWWRJHWKHUZLWKFKLOGUHQ,QVLJKWVLQWRSDVWHYHQWVFDQDOVREHJDLQHGWKURXJKROGHU
SHRSOHFKLOGUHQ
VSDUHQWVDQGFKLOGUHQWKHPVHOYHV,QWKLVZD\DWLPHGLPHQVLRQDQGQHZ
PHDQLQJVDUHLQWURGXFHGWRWKHSODFHVDQGVLJKWVRIWKHLPPHGLDWHHQYLURQPHQWDQGORFDO
GLVWULFW$WWKHVDPHWLPHLWLVSRVVLEOHWRGHYHORSDQXQGHUVWDQGLQJRIWKHRSHUDWLRQRI
PRGHUQVRFLHW\

$HVWKHWLFRULHQWDWLRQ

7KHDHVWKHWLFRULHQWDWLRQLVEURDGDQGPXOWLIDFHWHG,WLVH[WHQGHGE\REVHUYLQJOLVWHQLQJ
IHHOLQJDQGFUHDWLQJEXWDOVRWKURXJKLPDJLQDWLRQDQGLQWXLWLRQ7KHREMHFWVRIWKLV
RULHQWDWLRQJLYHFKLOGUHQSHUVRQDOVHQWLPHQWVIHHOLQJVDQGH[SHULHQFHVRIEHDXW\KDUPRQ\
PHORG\UK\WKPVW\OHH[FLWHPHQWDQGMR\DVZHOODVWKHLUDQWLWKHVHV7KHFKLOG
VYDOXHV
DWWLWXGHVDQGYLHZVVWDUWWRGHYHORS$VIRUERWKGHYHORSPHQWDVDKXPDQEHLQJDQG
GHYHORSLQJKXPDQLW\LGHQWLILFDWLRQLVRQHRIWKHLPSRUWDQWSURFHVVHVRIWKLVRULHQWDWLRQ

(WKLFDORULHQWDWLRQ

,QWKHHWKLFDORULHQWDWLRQWKHIRFXVLVRQLVVXHVUHODWHGWRYDOXHVDQGQRUPV&KLOGUHQ
VGDLO\
OLIHFRQWDLQVVLWXDWLRQVDQGHYHQWVWKDWFDQEHFRQVLGHUHGDQGDQDO\VHGIURPWKHYLHZSRLQWRI
WKHTXHVWLRQVRIULJKWDQGZURQJJRRGDQGEDGWUXWKDQGOLH7KHTXHVWLRQVRIMXVWLFH
HTXDOLW\UHVSHFWDQGIUHHGRPFDQDOVREHGHDOWZLWKQDWXUDOO\LQWKHFRQWH[WRIGDLO\HYHQWV,W
LVHVVHQWLDOWRWDNHDFFRXQWRIWKHFKLOG
VGHYHORSPHQWDOVWDJH)HDUVDQ[LHW\DQGJXLOWDUHSDUW
RIFKLOGUHQ
VOLIHWRR7KHVHLVVXHVDUHGLVFXVVHGZLWKFKLOGUHQLQVXFKDZD\WKDWWKH\FDQIHHO
VDIH

5HOLJLRXVSKLORVRSKLFDORULHQWDWLRQ

7KHFRUHRIWKHUHOLJLRXVSKLORVRSKLFDORULHQWDWLRQLVIRUPHGE\UHOLJLRXVVSLULWXDODQG
SKLORVRSKLFDOLVVXHVDQGSKHQRPHQD,QWHUHVWLVWDNHQLQWKHWUDGLWLRQVFXVWRPVDQGSUDFWLFHV
RIWKHFKLOG
VRZQUHOLJLRQRUEHOLHIV7KHFKLOGLVRIIHUHGDQRSSRUWXQLW\WRH[SHULHQFHVLOHQFH
DQGZRQGHUWRDVNTXHVWLRQVDQGSRQGHURYHULVVXHV7KHFKLOG
VVHQVLWLYLW\DQGDELOLW\WR
XQGHUVWDQGWKHQRQYHUEDODQGV\PEROLFDUHUHVSHFWHGVXSSRUWHGDQGVWUHQJWKHQHG,QVLJKWV
DUHJDLQHGLQWRWKHFXVWRPVRIYDULRXVUHOLJLRQVDQGEHOLHIVFORVHWRWKHFKLOG7KHFRQWHQWRI
WKHUHOLJLRXVSKLORVRSKLFDORULHQWDWLRQLVDJUHHGRQZLWKHDFKFKLOG
VSDUHQWVLQGUDZLQJXSWKH
LQGLYLGXDO(&(&SODQ

&RQWLQXLW\EHWZHHQWKH(&(&FRQWHQWRULHQWDWLRQVDQGWKHVXEMHFWILHOGVRIWKH
&RUH&XUULFXOXPIRU3UH6FKRRO(GXFDWLRQLQ)LQODQG

7KURXJKWKH(&(&FRQWHQWRULHQWDWLRQVDEURDGVSHFWUXPRIKXPDQXQGHUVWDQGLQJ
NQRZOHGJHDQGH[SHULHQFHDQGUHODWHGSURFHVVHVDUHJUDGXDOO\LQWURGXFHGWRWKHFKLOG7KH
RULHQWDWLRQVDUHODUJHULQVFRSHWKDQVFKRROVXEMHFWV7KHSUHVFKRROHGXFDWLRQFRUH


 
FXUULFXOXPGRHVQRWHLWKHUFRQWDLQDQ\VXEMHFWVEXWFRUHVXEMHFWILHOGV:KHQWKHVHFRUH
VXEMHFWILHOGVDUHMX[WDSRVHGZLWKWKH(&(&FRQWHQWRULHQWDWLRQVWKHFRQWLQXLW\EHWZHHQWKHP
EHFRPHVREYLRXV

7KHPDWKHPDWLFDORULHQWDWLRQLVFOHDUO\OLQNHGWRWKHFRUHVXEMHFWILHOGRIPDWKHPDWLFV7KH
QDWXUDOVFLHQFHVRULHQWDWLRQLQWXUQKDVOLQNVZLWKWKHVXEMHFWILHOGVRIHQYLURQPHQWDODQG
QDWXUDOVFLHQFHVEXWDOVRZLWKWKRVHRISK\VLFDODQGPRWRUGHYHORSPHQWDQGKHDOWK7KH
KLVWRULFDORULHQWDWLRQLVOLQNHGZLWKWKHVXEMHFWILHOGVRIODQJXDJHDQGLQWHUDFWLRQHWKLFVDQG
SKLORVRSK\HQYLURQPHQWDODQGQDWXUDOVWXGLHVKHDOWKDQGDUWDQGFXOWXUH7KHDHVWKHWLF
RULHQWDWLRQLVFRQQHFWHGWRWKHVXEMHFWILHOGVRIODQJXDJHDQGLQWHUDFWLRQHWKLFVDQG
SKLORVRSK\DQGDUWDQGFXOWXUH7KHDHVWKHWLFRULHQWDWLRQDQGWKHUHOLJLRXVSKLORVRSKLFDO
RULHQWDWLRQLQWXUQDUHFOHDUO\FRQQHFWHGZLWKWKHVXEMHFWILHOGRIHWKLFVDQGSKLORVRSK\
DOWKRXJKWKH\FDQDOVREHVHHQWREHOLQNHGZLWKWKHVXEMHFWILHOGVRIODQJXDJHDQGLQWHUDFWLRQ
DQGDUWDQGFXOWXUH

 
3$5(17$/(1*$*(0(17,1(&(&

(&(&SDUWQHUVKLS

,Q(&(&(&(&SDUWQHUVKLSPHDQVDFRQVFLRXVFRPPLWPHQWE\SDUHQWVDQGVWDIIWR
FROODERUDWLRQIRUVXSSRUWLQJFKLOGUHQ
VJURZWKGHYHORSPHQWDQGOHDUQLQJ7KLVUHTXLUHV
PXWXDOWUXVWDQGUHVSHFWDQGHTXDOLW\3DUHQWVKDYHWKHSULPDU\ULJKWWRDQGUHVSRQVLELOLW\IRU
WKHLUFKLOG
VHGXFDWLRQDQGDOVRNQRZWKHLUFKLOGZHOO6WDIILQWXUQGUDZLQJRQWKHLU
SURIHVVLRQDONQRZOHGJHDQGFRPSHWHQFHDUHUHVSRQVLEOHIRUFUHDWLQJFRQGLWLRQVIDYRXUDEOH
IRU(&(&SDUWQHUVKLSDQGFRRSHUDWLRQRQHTXDOWHUPV

(&(&SDUWQHUVKLSLVEXLOWRQWKHFKLOG
VQHHGVWKHUHDOLVDWLRQRIWKHFKLOG
VEHVWLQWHUHVWVDQG
ULJKWVEHLQJWKHJXLGLQJSULQFLSOHLQDOO(&(&DFWLYLWLHV(&(&SDUWQHUVKLSFRPELQHVWKH
NQRZOHGJHDQGH[SHULHQFHVRISDUHQWVDQG(&(&VWDIIERWKRIZKLFKDUHLPSRUWDQW
LQIOXHQFHVLQWKHFKLOG
VOLIH7KHFKLOG
VZHOOEHLQJLVEHVWIRVWHUHGZKHQSDUHQWVDQG
HGXFDWRUVFRPELQHWKHLUNQRZOHGJHRIWKHFKLOG9DOXHVYLHZVDQGUHVSRQVLELOLWLHVLQWHUPVRI
WKHSDUWQHUVKLSDUHGLVFXVVHGERWKZLWKLQWKHHGXFDWRUFRPPXQLW\DQGZLWKSDUHQWV

(&(&SDUWQHUVKLSLVFRQFHUQHGQRWRQO\ZLWKWKHDWWLWXGHVRISDUHQWVDQGVWDIIPHPEHUV
WRZDUGVWKHLUFRPPRQHGXFDWLRQWDVNEXWDOVRZLWKWKHUHODWHGSUDFWLFDORUJDQLVDWLRQDQG
DUUDQJHPHQWVLQZD\VWKDWPHHWWKHZLVKHVRIERWKSDUWLHV6WDIIKDYHWKHSULPDU\
UHVSRQVLELOLW\IRUHPSOR\LQJWKHSDUWQHUVKLSDSSURDFKIURPWKHYHU\EHJLQQLQJLQWKHFKLOG
V
HDUO\HGXFDWLRQDQGFDUHWDNLQJLQWRFRQVLGHUDWLRQHDFKIDPLO\
VVSHFLILFQHHGV3DUHQWVDUH
SURYLGHGZLWKRSSRUWXQLWLHVIRUGLVFXVVLQJWKHLUFKLOG
VHGXFDWLRQDQGDOVRIRUGLVFXVVLRQV
ZLWKRWKHUSDUHQWVDQGWKHZKROHVWDII7KHSDUWQHUVKLSDSSURDFKDOVRDLPVWRHQKDQFHFR
RSHUDWLRQEHWZHHQSDUHQWV

$QRWKHUDLPRIWKH(&(&SDUWQHUVKLSDSSURDFKLVWRHQDEOHHDUO\DFFXUDWHLGHQWLILFDWLRQRI
WKHFKLOG
VSRWHQWLDOQHHGIRUVXSSRUWLQVRPHDUHDVRIJURZWKGHYHORSPHQWRUOHDUQLQJDQGWR
FROODERUDWHZLWKWKHSDUHQWVWRFUHDWHDFRPPRQVWUDWHJ\IRUVXSSRUWLQJWKHFKLOG7KH
SDUWQHUVKLSDSSURDFKVKRXOGDOVREHSXUVXHGLQSUREOHPVLWXDWLRQVLQLQWHUDFWLRQVEHWZHHQWKH
FKLOG
VSDUHQWVDQGVWDIIPHPEHUV

 
3DUHQWDOHQJDJHPHQWLQSODQQLQJDQGHYDOXDWLQJXQLWRSHUDWLRQ

6WDIIDUHUHVSRQVLEOHIRUGUDIWLQJDXQLWVSHFLILF(&(&FXUULFXOXP+RZHYHUSDUHQWVVKRXOG
WRJHWKHUEHSURYLGHGZLWKDQRSSRUWXQLW\WRLQIOXHQFHLWVFRQWHQWDQGSDUWLFLSDWHLQLWV
HYDOXDWLRQ

,QRUGHUIRUSDUHQWVDQGFKLOGUHQWREHDEOHWRSDUWLFLSDWHLQHYDOXDWLRQWKH(&(&FXUULFXOXP
VKRXOGEHGUDZQXSMRLQWO\E\WKHZKROHHGXFDWLRQDOFRPPXQLW\LQDGGLWLRQWRZKLFKLW
VKRXOGEHXVHGDFWLYHO\DQGDOOVWDIIPHPEHUVDQGSDUHQWVVKRXOGEHDZDUHRILWVFRQWHQWDQG
XQGHUO\LQJSULQFLSOHV(YDOXDWLRQE\SDUHQWVDQGFKLOGUHQIRUPVSDUWRIWKHRQJRLQJ
GHYHORSPHQWRI(&(&3DUHQWVPRQLWRUDQGHYDOXDWHWKHDWWDLQPHQWRIWKHJRDOVVHWLQWKH
(&(&FXUULFXOXPDQGVWDIIHYDOXDWHDQGGHYHORSWKHFXUULFXOXPDWUHJXODULQWHUYDOVDQG
ZKHQHYHUQHFHVVDU\

$QLQGLYLGXDO(&(&SODQDQGLWVHYDOXDWLRQ

$QLQGLYLGXDO(&(&SODQLVGUDZQXSIRUHDFKFKLOGLQGD\FDUHLQFROODERUDWLRQZLWKWKH
SDUHQWVDQGWKHLPSOHPHQWDWLRQRIWKHSODQLVDVVHVVHGUHJXODUO\

7KHHDUO\HGXFDWLRQDQGFDUHRIDQLQGLYLGXDOFKLOGLVEDVHGRQWKHLQGLYLGXDO(&(&SODQ
GUDZQXSMRLQWO\E\WKHVWDIIDQGWKHFKLOG
VSDUHQWVDWWKHVWDUWRIWKHFDUHUHODWLRQVKLS7KH
SODQDLPVWRWDNHDFFRXQWRIWKHFKLOG
VLQGLYLGXDOLW\DQGWKHSDUHQW
VYLHZVLQDUUDQJLQJWKH
FKLOG
VFDUH,WHQDEOHVWKHVWDIIWRDFWFRQVLVWHQWO\DQGEHDZDUHRIWKHFKLOG
VLQGLYLGXDO
QHHGV7KHVWDIIVKRXOGV\VWHPDWLFDOO\DQGFRQVFLRXVO\REVHUYHWKHFKLOG
VGHYHORSPHQWDQG
WDNHDFFRXQWRIWKHLUREVHUYDWLRQVLQSODQQLQJDFWLYLWLHVDQGLQWKHFKLOG
VLQGLYLGXDO(&(&
SODQ

7KHLQGLYLGXDO(&(&SODQWDNHVLQWRFRQVLGHUDWLRQWKHFKLOG
VH[SHULHQFHVFXUUHQWQHHGVDQG
IXWXUHSHUVSHFWLYHVLQWHUHVWVDQGVWUHQJWKVDQGLQGLYLGXDOQHHGVIRUVXSSRUWDQGJXLGDQFH,Q
GLVFXVVLRQVZLWKWKHSDUHQWVDWWHQWLRQVKRXOGEHGUDZQWRSRVLWLYHDVSHFWVWKDWIRVWHUWKH
FKLOG
VGHYHORSPHQW&RQFHUQVDQGSUREOHPVUHODWHGWRWKHFKLOG
VZHOOEHLQJDUHEURXJKWXS
LQDVFRQFUHWHWHUPVDVSRVVLEOHDQGVROXWLRQVDUHVRXJKWWRJHWKHUZLWKWKHSDUHQWV

:D\VRIFRRSHUDWLRQDUHDJUHHGRQLQWKHLQGLYLGXDO(&(&SODQMRLQWO\ZLWKWKHSDUHQWV
(YHQWKHFKLOGPD\SDUWLFLSDWHLQGUDIWLQJDQGDVVHVVLQJWKHSODQLQVXFKZD\VDVDJUHHG
EHWZHHQSDUHQWVDQGVWDII7KHLPSOHPHQWDWLRQRIWKHLQGLYLGXDO(&(&SODQLVPRQLWRUHGDQG
DVVHVVHGUHJXODUO\ERWKDPRQJWKHVWDIIDQGZLWKWKHSDUHQWV




7KH$FWRQWKH6WDWXVDQG5LJKWVRI6RFLDO:HOIDUH&OLHQWV

 
7KHVWDIIVKRXOGHQVXUHWKDWWKHLQGLYLGXDO(&(&SODQDQGWKHLQGLYLGXDOSUHVFKRROHGXFDWLRQ
SODQIRUPDIXQFWLRQLQJZKROH



























 
63(&,$/6833257,1(&(&

7KHFKLOG
VQHHGIRUVXSSRUWDQGQHHGVDVVHVVPHQW

,Q(&(&WKHFKLOG
VQHHGIRUVXSSRUWLVDVVHVVHGE\FRQVLGHULQJERWKWKHSDUHQWV
DQGWKH
VWDII
VREVHUYDWLRQVRUEDVHGRQWKHFKLOG
VHDUOLHUHVWDEOLVKHGQHHGIRUVSHFLDOVXSSRUW7KH
FKLOGPD\QHHGVXSSRUWLQWKHSK\VLFDOFRJQLWLYHHPRWLRQDORUVRFLDODUHDVRIGHYHORSPHQWRU
LQWKHGHYHORSPHQWRIVNLOOVIRUYDU\LQJSHULRGVRIWLPH7KHQHHGIRUVXSSRUWPD\DOVRDULVH
LQVLWXDWLRQVZKHQWKHFKLOG
VKHDOWKRUGHYHORSPHQWLVHQGDQJHUHGRULVQRWDGHTXDWHO\
IRVWHUHGE\GHYHORSPHQWDOFRQGLWLRQV

2QDVVHVVLQJWKHFKLOG
VQHHGIRUVXSSRUWLWLVLPSRUWDQWWRLGHQWLI\DQGGHILQHWKHFKLOG
V
LQGLYLGXDORSSRUWXQLWLHVWRDFWLQGLIIHUHQWHQYLURQPHQWVDQGLQGLIIHUHQWHGXFDWLRQDO
VLWXDWLRQVDQGWRDOVRGHILQHUHODWHGQHHGIRUVXSSRUWDQGJXLGDQFH)RUSODQQLQJVXSSRUW
PHDVXUHVLWLVDOVRLPSRUWDQWWRFUHDWHDQRYHUDOOSLFWXUHRIWKHFKLOGKLVVWUHQJWKVLQWHUHVWV
DQGLQVSLUDWLRQV

,IQHFHVVDU\DQDSSURSULDWHH[SHUWRSLQLRQWKDWKHOSVWRSURYLGHVXSSRUWWRWKHFKLOGLV
REWDLQHGWRIDFLOLWDWHWKHDVVHVVPHQW+RZHYHUPHDVXUHVWRVXSSRUWWKHFKLOGWKURXJK(&(&
DFWLYLWLHVDUHLQLWLDWHGLPPHGLDWHO\DIWHUEHFRPLQJDZDUHRIWKHQHHGIRUVXSSRUW)XUWKHULI
QHHGEH(&(&RURWKHUH[SHUWVDUHFRQVXOWHGLQZD\VDJUHHGZLWKWKHSDUHQWV7KHDLPLVWR
SUHYHQWWKHFKLOG
VQHHGIRUVXSSRUWIURPDFFXPXODWLQJDQGEHFRPLQJSURORQJHG

3ULQFLSOHVIRUSURYLGLQJVXSSRUWDQG(&(&VXSSRUWPHDVXUHV

$VIDUDVSRVVLEOHVXSSRUWLVSURYLGHGLQWKHFRQWH[WRIJHQHUDO(&(&VHUYLFHVVRWKDWWKH
FKLOGDFWVDVDPHPEHURIDJURXSZLWKRWKHUFKLOGUHQDQGKLVVRFLDOLQWHUDFWLRQVZLWKLQWKH
JURXSDUHVXSSRUWHG7KHVXSSRUWQHHGHGE\WKHFKLOGLVVWDUWHGDVHDUO\DVSRVVLEOH7KH
SURYLVLRQRIVXSSRUWLQFOXGHVLQWHQVLILHGFRRSHUDWLRQEHWZHHQWKHSDUHQWVDQG(&(&VWDII

$VSDUWRI(&(&VXSSRUWPHDVXUHVWKHFKLOG
VSK\VLFDOSV\FKLFDQGFRJQLWLYHHQYLURQPHQWLV
DGMXVWHGWRWKHFKLOG
VQHHGV'DLO\HGXFDWLRQDODFWLYLWLHVDUHDGMXVWHGE\GLIIHUHQWLDWLQJ
SUDFWLVLQJEDVLFVNLOOVDQGVWUHQJWKHQLQJWKHFKLOG
VVHOIHVWHHP,QDGGLWLRQWKHUHKDELOLWDWLYH




7KH$FWRQ&KLOG'D\&DUHXVHVWKHFRQFHSWRI
FKLOGUHQLQQHHGRIVSHFLDOFDUHDQGHGXFDWLRQ
7KLVSDSHULVEDVHGRQ
DFRPSUHKHQVLYHYLHZRIWKHFKLOG
VQHHGIRUVXSSRUWDQGZD\VRIDGGUHVVLQJWKHPE\VXSSRUWLQJWKHFKLOG
VHDUO\
HGXFDWLRQDQGFDUH

 
 HOHPHQWVRIGDLO\(&(&DFWLYLWLHVDUHUHLQIRUFHGV\VWHPDWLFDOO\LQFOXGLQJVWUXFWXUH
LQWHUDFWLRQJXLGDQFHRIWKHFKLOG
VVSRQWDQHRXVDFWLYLW\DQGJURXSEDVHGDFWLYLWLHV

,QGLYLGXDOLVLQJ(&(&

7KHLQGLYLGXDO(&(&SODQLQFOXGHVDQDVVHVVPHQWRIWKHFKLOG
VQHHGIRUVXSSRUWDQG
DUUDQJHPHQWVIRUSURYLGLQJVXSSRUW7KHSODQGHVFULEHVKRZWKHFKLOG
VLQGLYLGXDOLVHG
JXLGDQFHDQG(&(&DFWLYLWLHVDUHFRPELQHGDQGZKDWFKDQJHVDUHWREHPDGHLQHGXFDWLRQDO
DFWLYLWLHVDQGWKHSK\VLFDOHQYLURQPHQW2QDVVHVVLQJWKHQHHGIRUFKDQJHVWKHHGXFDWRU
FRPPXQLW\DQDO\VHVLWVRZQDFWLYLWLHVDQGLWVSRVVLELOLWLHVIRUJXLGLQJWKHFKLOG

7KHHGXFDWLRQUHKDELOLWDWLRQDQGSUHVFKRROHGXFDWLRQSODQVGUDZQXSIRUWKHFKLOGLQ
GLIIHUHQWFRQWH[WVVKRXOGIRUPDQLQWHJUDWHGZKROH:KHQGD\FDUHSUHVFKRROHGXFDWLRQRU
VFKRROEHJLQVRUGD\FDUHSODFHVFKDQJHRUWKHUHDUHRWKHUWUDQVLWLRQVLQWKHFKLOG
VOLIHWKH
FRQWLQXLW\RIVXSSRUWVKRXOGEHHQVXUHG


,PSOHPHQWDWLRQRIVXSSRUWVHUYLFHVLQ(&(&

'HSHQGLQJRQWKHFKLOG
VQHHGV(&(&PD\DOVRLQFOXGHRWKHUVXSSRUWVHUYLFHVVXFKDV
UHKDELOLWDWLRQJXLGDQFHWKHUDS\DQGRUVSHFLDOHGXFDWLRQIRUFKLOGUHQVXEMHFWWRFRPSXOVRU\
HGXFDWLRQ7KHVHVHUYLFHVDUHSURYLGHGDVDQLQWHJUDWHGZKROHLQFOXGLQJERWKHGXFDWLRQDO
DQGPHGLFDOUHKDELOLWDWLRQDQGDWWHQWLRQLVSDLGWRWKHFRRUGLQDWLRQRIWKHVHUYLFHV7KLVFDOOV
IRUFRRSHUDWLRQEHWZHHQGLIIHUHQWDXWKRULWLHVDQDGHTXDWHSURYLVLRQRIFRPSHWHQWVWDIIDQG
WKHIDFLOLWLHVPHDQVDQGPDWHULDOVWKDWPHHWWKHFKLOG
VQHHGV




7KHVWUXFWXUHRIWKHGD\FDUHHQYLURQPHQWFRQVLVWVRIDFOHDUVWUXFWXUDOGHVLJQRIWLPHVSDFHDQGSHRSOH
HQDEOLQJWKHFKLOGWRDQWLFLSDWHDQGOHDUQWKHFRXUVHRIHYHQWV6WUXFWXUHDVVHVVPHQWUHTXLUHVDQDQDO\VLVRIWKH
FKLOG
VGDLO\DFWLYLWLHVPRGHVRIDFWLRQDQGVRFLDOFRQWDFWV7KHPDLQWHQDQFHRIWKHVWUXFWXUHIRUPVSDUWRIWKH
PHWKRGRORJ\RIVSHFLDOSHGDJRJLFDOJXLGDQFH

*XLGLQJWKHFKLOG
VVSRQWDQHRXVDFWLYLW\LPSURYHVWKHFKLOG
VDELOLW\WRDVVHVVDQGGHYHORSLWVRZQDFWLYLWLHV


DQGEHKDYLRXULQUHODWLRQWRRWKHUVRUKHOSVLGHQWLI\ZD\VRIZRUNLQJWKDWVXSSRUWVXVWDLQHGDWWHQWLRQ

7KLVSDUWRIWKHLQGLYLGXDO(&(&SODQFRUUHVSRQGVWRWKHUHKDELOLWDWLRQSODQIRUDFKLOGLQQHHGRIVSHFLDOFDUH


DQGHGXFDWLRQUHIHUUHGWRLQWKH$FWRQ%DVLF(GXFDWLRQ

6HFWLRQRIWKH$FWRQ%DVLF(GXFDWLRQ6HFWLRQRIWKH&RUH&XUULFXOXPIRU3UH6FKRRO

(GXFDWLRQLQ)LQODQG

 
&(57$,1&216,'(5$7,216,1,03/(0(17,1*(&(&

1HWZRUNLQJ

&RRSHUDWLRQWDNHVSODFHLQDFFRUGDQFHZLWKWKH1DWLRQDO3ROLF\'HILQLWLRQRQ(DUO\
&KLOGKRRG(GXFDWLRQDQG&DUHZLWKWKHZKROHODUJHQHWZRUNSURYLGLQJVHUYLFHVIRUFKLOGUHQ
DQGIDPLOLHV,IQHHGEHWKHUHLVDOVRFRRSHUDWLRQDWDUHJLRQDOOHYHO.H\SDUWQHUVLQFOXGH
HGXFDWLRQDOVRFLDODQGKHDOWKDXWKRULWLHVDJHQFLHVLQWKHDUHDVRIFXOWXUHDQGVSRUWVSULYDWH
VHUYLFHSURYLGHUVSDULVKHVDQGRUJDQLVDWLRQV3UDFWLFHVDQGSULQFLSOHVVKRXOGEHVSHFLILHGIRU
FRRSHUDWLRQ/RFDODQGXQLWVSHFLILF(&(&FXUULFXODVSHFLI\ZD\VIRUQHWZRUNEDVHGFR
RSHUDWLRQLWVJRDOVDQGUHDOLVDWLRQ

&RRSHUDWLRQZLWKHGXFDWLRQDODXWKRULWLHVSULPDULO\FRQVLVWVRIWKHFUHDWLRQDQGGHYHORSPHQW
RIFRRSHUDWLRQIRUPVDQGVWUXFWXUHVWKDWHQVXUHFRQWLQXLW\LQWKHFKLOG
VHGXFDWLRQDQG
OHDUQLQJ,QFROODERUDWLRQZLWKFKLOGKHDOWKFOLQLFVDV\VWHPLVFUHDWHGDQGGHYHORSHGWKDW
HQDEOHVWKHFKLOG
VJURZWKDQGGHYHORSPHQWWREHPRQLWRUHGMRLQWO\ZLWKWKHSDUHQWVDQG
DGYLFHWREHJLYHQWRWKHIDPLO\RQGLIIHUHQWVHUYLFHVLIQHHGHG

2QHRIWKHFHQWUDOJRDOVRIQHWZRUNEDVHGFRRSHUDWLRQLVWRHQVXUHHDUO\LQWHUYHQWLRQLQULVN
VLWXDWLRQV)RUGHDOLQJZLWKDQLQGLYLGXDOFKLOG
VDIIDLUVDQGIRUFDVHVUHTXLULQJFKLOGZHOIDUH
LQWHUYHQWLRQSUDFWLFHVDQGSULQFLSOHVHVWDEOLVKHGLQWKHFKLOG
VEHVWLQWHUHVWVKRXOGH[LVWIRU
FRRSHUDWLRQZLWKFKLOGZHOIDUHIDPLO\ZRUNIDPLO\FRXQVHOOLQJKRPHKHOSDQGRWKHUVRFLDO
ZHOIDUHVHUYLFHXQLWV

(&(&DQGFKLOGUHQZLWKGLIIHUHQWODQJXDJHDQGFXOWXUHEDFNJURXQGV

&KLOGUHQZLWKGLIIHUHQWODQJXDJHDQGFXOWXUHEDFNJURXQGVKHUHUHIHUVWR6iPLDQG5RPD
FKLOGUHQFKLOGUHQXVLQJVLJQODQJXDJHDQGFKLOGUHQZLWKDQLPPLJUDQWEDFNJURXQG&KLOGUHQ
EHORQJLQJWRFXOWXUDOPLQRULWLHVVKRXOGEHSURYLGHGZLWKRSSRUWXQLWLHVWRJURZXSLQD
PXOWLFXOWXUDOVRFLHW\DVPHPEHUVRIERWKWKHLURZQFXOWXUDOFRPPXQLWLHVDQG)LQQLVKVRFLHW\
(DUO\HGXFDWLRQDQGFDUHIRUWKHVHFKLOGUHQLVSURYLGHGZLWKLQPDLQVWUHDP(&(&VHUYLFHV
HDFKFKLOGEHORQJLQJWRDJURXSRIFKLOGUHQDQGUHFHLYLQJVXSSRUWIRUVRFLDOLQWHUDFWLRQV

3XEOLFO\RSHUDWHG(&(&VHUYLFHVLQ)LQODQGDUHEDVHGRQJHQHUDO(&(&JRDOVSD\LQJ
DWWHQWLRQWRWKHFKLOG
VFXOWXUDOEDFNJURXQGDQGPRWKHUWRQJXH$OWKRXJKJHQGHUUHODWLRQV
YDU\LQGLIIHUHQWFXOWXUHV)LQQLVK(&(&LVEDVHGRQHTXDOLW\EHWZHHQJLUOVDQGER\V
,PSOHPHQWLQJ(&(&DFWLYLWLHVUHTXLUHVWKDWVWDIIVKRXOGKDYHDJRRGFXOWXUDOXQGHUVWDQGLQJWR
EHDEOHWRGLVFXVVZLWKSDUHQWVWKHYDU\LQJQHHGVRIFKLOGUHQFRPLQJIURPGLIIHUHQWIDPLOLHV
DQGIRUSDUHQWV
HGXFDWLRQDOJRDOVWREHWDNHQLQWRDFFRXQWRQHTXDOWHUPVLQWKHVSLULWRI
UHFLSURFLW\

 
7KHSULPDU\UHVSRQVLELOLW\IRUUHWDLQLQJDQGGHYHORSLQJWKHFKLOG
VRZQODQJXDJHDQGFXOWXUH
UHVWVZLWKWKHIDPLO\,Q(&(&FKLOGUHQDUHHQFRXUDJHGWRXVHWKHLURZQODQJXDJH$VIDUDV
SRVVLEOHWKHGHYHORSPHQWRIWKHFKLOGUHQ
VPRWKHUWRQJXHLVDOVRVXSSRUWHGLQ(&(&
DFWLYLWLHVE\PDNLQJXVHRIWKHNQRZOHGJHDQGFRPSHWHQFHRIWKHLUDQGWKHLUSDUHQWV
RZQ
ODQJXDJHHQYLURQPHQW

7KURXJKSDUWLFLSDWLRQLQ(&(&FKLOGUHQZLWKGLIIHUHQWODQJXDJHDQGFXOWXUHEDFNJURXQGV
KDYHSRVVLELOLWLHVWROHDUQ)LQQLVKRU6ZHGLVKDVWKHLUVHFRQGODQJXDJHLQQDWXUDOVLWXDWLRQV
ZLWKRWKHUFKLOGUHQDQGHGXFDWRUV,QDGGLWLRQFKLOGUHQQHHGJXLGDQFHLQDGRSWLQJDQGXVLQJ
WKHODQJXDJH7KHZD\VLQZKLFKWKHFKLOG
VODQJXDJHDQGFXOWXUHDUHWREHVXSSRUWHGDUH
VSHFLILHGLQWKHLQGLYLGXDO(&(&SODQGUDZQXSMRLQWO\ZLWKWKHSDUHQWV

,Q(&(&WKHFKLOG
VRZQFXOWXUHFXVWRPVDQGKLVWRU\DUHVWXGLHGDQGDSSUHFLDWHGDQGWKH\
IRUPDYLVLEOHSDUWRIWKHGDLO\DFWLYLWLHV,QFRRSHUDWLRQZLWKSDUHQWVDQGGLIIHUHQWFXOWXUDO
FRPPXQLWLHVHIIRUWVDUHPDGHWRPDLQWDLQFKLOGUHQ
VFXOWXUDOWUDGLWLRQVDQGWRVXSSRUWWKHLU
SRVVLELOLWLHVWRH[SUHVVWKHLURZQFXOWXUDOEDFNJURXQGLQ(&(&

,QDGGLWLRQWKHVSHFLDOQHHGVDQGSULRULWLHVRIGLIIHUHQWFXOWXUDOJURXSVDUHWDNHQLQWR
FRQVLGHUDWLRQLQ(&(&DFWLYLWLHVDVIROORZV

6iPLFKLOGUHQ

7KUHHGLIIHUHQW6iPLODQJXDJHVDUHVSRNHQLQ)LQODQG1RUWK6iPL,QDUL6iPLDQG6NROW
6iPL(IIRUWVDUHPDGHWRVXSSRUWWKH6iPLODQJXDJHDQGWRPDNHWKH6iPLFXOWXUHNQRZQ
ZLWKLQ(&(&DFWLYLWLHVLQFRRSHUDWLRQZLWKFKLOGUHQ
VSDUHQWVDQGRWKHUUHSUHVHQWDWLYHVRIWKH
6iPLFXOWXUH(&(&DFWLYLWLHVIRUD6iPLVSHDNLQJFKLOGSULQFLSDOO\WDNHSODFHLQJURXSV
IRUPHGE\6iPLVSHDNLQJFKLOGUHQ

5RPDFKLOGUHQ

5HSUHVHQWDWLYHVRIWKH5RPDFXOWXUHDUHZRUNHGZLWKWRFUHDWHFRRSHUDWLRQQHWZRUNVDQGWKH
NQRZOHGJHRIWKH5RPDFXOWXUHDPRQJVWDIILVLPSURYHG3DUWLFLSDWLRQLQ(&(&DFWLYLWLHV
DPRQJ5RPDFKLOGUHQLVLQFUHDVHGLQFRRSHUDWLRQZLWKWKHLUSDUHQWV5RPDFKLOGUHQVKRXOG
EHVXSSRUWHGLQWKHLU)LQQLVKRU6ZHGLVKODQJXDJHVNLOOV

&KLOGUHQXVLQJVLJQODQJXDJH

6LJQODQJXDJHFDQEHWKHFKLOG
VPRWKHUWRQJXHILUVWODQJXDJHRUVHFRQGODQJXDJH(&(&IRU
FKLOGUHQXVLQJVLJQODQJXDJHSULPDULO\WDNHVSODFHLQDVLJQODQJXDJHJURXSRUDPL[HGJURXS
FRQVLVWLQJRIFKLOGUHQXVLQJVLJQODQJXDJHDQGFKLOGUHQXVLQJERWKVLJQFRPPXQLFDWLRQDQG
VSRNHQODQJXDJH2QHDLPLVWRIDPLOLDULVHWKHFKLOGZLWKWKHXVHRIDQLQWHUSUHWHULQGLIIHUHQW
(&(&VLWXDWLRQV

 
 &KLOGUHQZLWKDQLPPLJUDQWEDFNJURXQG

,Q(&(&DFWLYLWLHVIRUFKLOGUHQZLWKDQLPPLJUDQWEDFNJURXQGLWLVRISULPHLPSRUWDQFHWR
LQIRUPWKHSDUHQWVRIWKHJRDOVDQGSULQFLSOHVRI)LQQLVK(&(&DQGWRGLVFXVVWKHVHZLWK
WKHP3DUHQWVDUHHQFRXUDJHGWRPDLQWDLQWKHLUFKLOG
VRZQODQJXDJHDQGJLYHQDGYLFHRQ
ZD\VRIVXSSRUWLQJWKHGHYHORSPHQWRIWKHFKLOG
VPRWKHUWRQJXHDWKRPHWKXVFUHDWLQJD
EDVLVIRUDZRUNLQJELOLQJXDOLVP(&(&SURPRWHVFKLOGUHQ
VLQWHJUDWLRQLQWR)LQQLVKVRFLHW\

/DQJXDJHLPPHUVLRQ(&(&LQDIRUHLJQODQJXDJHDQG(&(&DFWLYLWLHVEDVHGRQDQ
DOWHUQDWLYHSHGDJRJ\

7KH1DWLRQDO3ROLF\'HILQLWLRQVDQG1DWLRQDO&XUULFXOXP*XLGHOLQHVRQ(DUO\&KLOGKRRG
(GXFDWLRQDQG&DUHDOVRDSSO\WRLPPHUVLRQSURJUDPPHVDQGDFWLYLWLHVDUUDQJHGLQD
ODQJXDJHRWKHUWKDQ)LQQLVKRU6ZHGLVKRUXVLQJDQDOWHUQDWLYHSHGDJRJ\,QWKHVHFDVHVLWLV
LPSRUWDQWWKDWWKHFKLOG
VSDUHQWVDUHDGHTXDWHO\LQIRUPHGRIWKHXQGHUO\LQJSKLORVRSK\DQG
DQ\VSHFLDO(&(&JRDOV

/DQJXDJHLPPHUVLRQ

/DQJXDJHLPPHUVLRQFDQEHDUUDQJHGLQWKHVHFRQGGRPHVWLFODQJXDJH6ZHGLVKRU)LQQLVK
RULQDPLQRULW\ODQJXDJHPDLQO\IRUFKLOGUHQZKRVHPRWKHUWRQJXHLVDORFDOPDMRULW\
ODQJXDJH,QWKLVZD\WKHRSSRUWXQLWLHVRIIHUHGE\DELOLQJXDOHQYLURQPHQWFDQEHXWLOLVHGIRU
VXSSRUWLQJWKHFKLOG
VOLQJXLVWLFGHYHORSPHQWLQWKHVHFRQGGRPHVWLFODQJXDJHRUDPLQRULW\
ODQJXDJH,QRUGHUWKDWWKHOHDUQLQJRIDQHZODQJXDJHZRXOGQRWKDYHDQ\QHJDWLYHHIIHFWVRQ
WKHGHYHORSPHQWRIPRWKHUWRQJXHVNLOOVPRQROLQJXDOFKLOGUHQVKRXOGQRWSDUWLFLSDWHLQWRWDO
ODQJXDJHLPPHUVLRQXQWLOVWDUWLQJIURPWKHDJHRIWKUHHZKHQWKHLUPRWKHUWRQJXHVNLOOVDUH
JRRGHQRXJK:KHQODQJXDJHLPPHUVLRQLVXVHGLWVKRXOGEHHQVXUHGLQFRRSHUDWLRQZLWK
WKHSDUHQWVWKDWWKHFKLOG
VPRWKHUWRQJXHVNLOOVGHYHORSPHQWLVDSSURSULDWHWRKLVDJH7KH
PXQLFLSDOLW\VKRXOGHQVXUHWKDWWKHUHLVFRQWLQXLW\EHWZHHQODQJXDJHLPPHUVLRQVWDUWHGLQ
(&(&DQGSULPDU\HGXFDWLRQ


(&(&LQDIRUHLJQODQJXDJH

(&(&LQDIRUHLJQODQJXDJHUHIHUVWRWKHDFWLYLWLHVWDNLQJSODFHLQDODQJXDJHRWKHUWKDQ
)LQQLVKRU6ZHGLVK:KHQWKHFKLOGSDUWLFLSDWHVLQVXFKDFWLYLWLHVWKHUHVSRQVLELOLW\IRUWKH
GHYHORSPHQWRIWKHFKLOG
VPRWKHUWRQJXHUHVWVZLWKWKHSDUHQWV


(&(&XVLQJDQDOWHUQDWLYHSHGDJRJ\RUHGXFDWLRQSKLORVRSK\

(&(&FDQEHEDVHGRQGLIIHUHQWSHGDJRJLFDODSSURDFKHVRUHGXFDWLRQSKLORVRSKLHVVXFKDV
6WHLQHU0RQWHVVRUL)UHLQHWDQG5HJJLR(PLOLDSHGDJRJLHV

 
$FKLOGLQKRVSLWDO

:KHUHDSSOLFDEOHWKH1DWLRQDO3ROLF\'HILQLWLRQVDQG1DWLRQDO&XUULFXOXP*XLGHOLQHVRQ
(DUO\&KLOGKRRG(GXFDWLRQDQG&DUHDUHDSSOLHGWR(&(&RUJDQLVHGLQKRVSLWDOVDQGRWKHU
LQVWLWXWLRQV'XULQJWKHFKLOG
VKRVSLWDOLVDWLRQWKHFRQWLQXLW\RIHDUO\HGXFDWLRQDFFRUGLQJWR
WKHFKLOG
VQHHGVLVHQVXUHGWKURXJKFRRSHUDWLRQEHWZHHQGLIIHUHQW(&(&VHUYLFHV6SHFLDO
DWWHQWLRQVKRXOGEHSDLGWRPDLQWDLQLQJDQGHVWDEOLVKLQJZDUPSHUVRQDOUHODWLRQVKLSVDQG
FRQWLQXLQJLQWHUDFWLRQVEHWZHHQWKHFKLOGDQGWKHDGXOWVDQGRWKHUFKLOGUHQ&RRSHUDWLRQZLWK
SDUHQWVLVRIYLWDOLPSRUWDQFH

 
$/2&$/(&(&&855,&8/80

'UDZLQJXSDORFDO(&(&FXUULFXOXP

7KH1DWLRQDO&XUULFXOXP*XLGHOLQHVRQ(DUO\&KLOGKRRG(GXFDWLRQDQG&DUHSURYLGHDEDVLV
IRUORFDO(&(&FXUULFXODGUDZQXSLQPXQLFLSDOLWLHV,QDGGLWLRQORFDO(&(&FXUULFXODWDNH
DFFRXQWRIDQ\ORFDOSODQVFRQFHUQLQJFKLOGUHQDQGIDPLOLHVORFDO(&(&SROLF\GHILQLWLRQV
DQGORFDOSUHVFKRROHGXFDWLRQFXUULFXOD/RFDO(&(&SROLF\GHILQLWLRQVRUSODQVGHILQHZKDW
NLQGRISODQVWKHPXQLFLSDOLW\VKRXOGPDNHDWUHJLRQDOGLVWULFWDQGXQLWOHYHOVDQGWKHZD\V
LQZKLFKWKH\DUHFRQILUPHGDQGUHYLVHGUHJXODUO\7KHORFDOSUHVFKRROHGXFDWLRQDQG(&(&
FXUULFXODIRUPDQLQWHJUDWHGZKROHDQGWKHUHLVDFOHDUFRQWLQXLW\EHWZHHQWKHP7KHORFDO
(&(&FXUULFXOXPVSHFLILHVDQGUHFRUGVWKHVSHFLDOIHDWXUHVJRDOVDQGPRGHVRIRSHUDWLRQRI
GLIIHUHQWVHUYLFHIRUPV

/RFDO(&(&FXUULFXODSURYLGHDWRROIRUJXLGLQJPXQLFLSDOO\RSHUDWHG(&(&DQGDOVRDNH\
WRROIRUVWDII7KH1DWLRQDO3ROLF\'HILQLWLRQVDQG&XUULFXOXP*XLGHOLQHVVKRXOGEH
GLVFXVVHGEURDGO\LQWKHPXQLFLSDOLW\7KHHQWLUHVWDIIVKRXOGFRPPLWWKHPVHOYHVWRGUDIWLQJ
LPSOHPHQWLQJPRQLWRULQJDQGHYDOXDWLQJWKHP

$XQLWVSHFLILF(&(&FXUULFXOXPFRPSOHPHQWVWKHORFDORQHGHVFULELQJWKHVSHFLDOIHDWXUHV
DQGSULRULWLHVRIHDFKRSHUDWLRQDOHQYLURQPHQWDQGXQLW,WDOVRLQFOXGHVWKHVSHFLILHGWDUJHWV
RIGLIIHUHQWVHUYLFHIRUPV(DFKFXUULFXOXPLVFRPSOHPHQWHGDQGVSHFLILHGJUDGXDOO\DV
VLWXDWLRQDOYDULDWLRQLQWKHRSHUDWLRQDOWDUJHWVQHHGVWREHWDNHQLQWRDFFRXQWWKHVHOHFWLRQRI
FRQWHQWGHSHQGLQJRQFKLOGUHQJURXSVDQGRSHUDWLRQDOHQYLURQPHQWDQGFRQGLWLRQVLQHDFK
VSHFLILFFDVH$FWLYLWLHVDUHGRFXPHQWHGDQGDVVHVVHGDWUHJXODULQWHUYDOV7KHXQLWVSHFLILF
(&(&FXUULFXOXPLVRQHRIWKHFRUHHOHPHQWVRIWKHFUHDWLRQRIDJRRGHGXFDWLRQDO
FRPPXQLW\EHWZHHQSDUHQWVDQGVWDII

7KHFRQWHQWRIWKHORFDO(&(&FXUULFXOXP

2QGUDIWLQJLWV(&(&FXUULFXOXPWKHPXQLFLSDOLW\WDNHVDFFRXQWRILWVH[LVWLQJSUDFWLFHVDQG
RWKHUSODQV7KHIROORZLQJLVDQLQGLFDWLYHOLVWRILVVXHVWKDWFDQEHLQFOXGHGLQWKH
FXUULFXOXP

• $GHVFULSWLRQRIORFDO(&(&JXLGHOLQHVDQGVWUDWHJLHV

.H\JXLGHOLQHVDQGVWUDWHJLHVFRQFHUQLQJWKHSODQQLQJRI(&(&FRQWHQW

 ZD\VRISURYLGLQJ(&(&VHUYLFHVPRGHVRIRSHUDWLRQDQGWKHLU

 
 VSHFLDOIHDWXUHV

 RUJDQLVLQJVXSSRUWVHUYLFHV

 DQ(&(&TXDOLW\DVVXUDQFHV\VWHP

 FRRSHUDWLRQSDUWQHUVDQGSULQFLSOHV

 DVDIHW\SODQ

 VSHFLILFORFDORUUHJLRQDO(&(&SURJUDPPHVDQGSURMHFWV

• 7KHPLVVLRQDQGYDOXHVRI(&(&

• *RDOVDQGWDUJHWV

• 3XWWLQJWKHORFDO(&(&FXUULFXOXPLQWRSUDFWLFHDQGJLYLQJLWDPRUHFRQFUHWH
IRUPLQXQLWVSHFLILF(&(&FXUULFXOD

• ,PSOHPHQWDWLRQRI(&(&

• 3URYLGLQJVSHFLDOVXSSRUWIRUDFKLOG

• 2UJDQLVLQJ(&(&IRUFKLOGUHQZLWKGLIIHUHQWODQJXDJHDQGFXOWXUHEDFNJURXQGV

• (QVXULQJFRQWLQXLW\DQGFRRSHUDWLRQEHWZHHQ(&(&SUHVFKRROHGXFDWLRQDQG
EDVLFHGXFDWLRQ

• &RRSHUDWLRQ

 LPSOHPHQWLQJ(&(&SDUWQHUVKLS

 PXOWLSURIHVVLRQDODQGQHWZRUNEDVHGFRRSHUDWLRQPXQLFLSDO
DJHQFLHVWKHWKLUGVHFWRUDQGSDULVKHV

• 3ULQFLSOHVIRUWKHGUDIWLQJDQGIROORZXSRILQGLYLGXDO(&(&SODQV

 
 • (YDOXDWLRQGHYHORSPHQWDQGPRQLWRULQJRI(&(&FRQWHQW

 ORFDO(&(&GHYHORSPHQWSULRULWLHV

$ORFDO(&(&FXUULFXOXPDVSDUWRITXDOLW\LPSURYHPHQWHIIRUWV

7KH1DWLRQDO3ROLF\'HILQLWLRQVDQG&XUULFXOXP*XLGHOLQHVRQ(DUO\&KLOGKRRG(GXFDWLRQ
DQG&DUHDVZHOODVDQ\ORFDOSROLF\GHILQLWLRQVDQGSODQVSURYLGHDEDVLVIRUHYDOXDWLQJDQG
GHYHORSLQJ(&(&LQPXQLFLSDOLWLHV

7KH1DWLRQDO&XUULFXOXP*XLGHOLQHVSURYLGHDQRXWOLQHRIJRRG(&(&WKDWVKRXOGEHDLPHG
DW/RFDO(&(&FXUULFXODIRUPDQLQWHJUDOSDUWRITXDOLW\PDQDJHPHQWDWPXQLFLSDOLW\DQG
XQLWOHYHOVZKHUHWKHDLPLVWRHYDOXDWHDQGGHYHORSDFWLYLWLHVLQPDQ\GLIIHUHQWZD\VRQD
UHJXODUEDVLV,QDGGLWLRQWR(&(&DQGDGPLQLVWUDWLYHVWDIISDUHQWVFKLOGUHQDQGGLIIHUHQWFR
RSHUDWLRQSDUWQHUVFDQSDUWLFLSDWHLQHYDOXDWLRQ

(YDOXDWLRQLVDSUHFRQGLWLRQRIGHYHORSPHQW,WKHOSVGHWHUPLQHWRZKDWH[WHQWJRDOVKDYH
EHHQDWWDLQHGDQGLGHQWLILHVRSHUDWLRQDOVWUHQJWKVDQGGHYHORSPHQWQHHGV7KHTXDOLW\
DVVHVVPHQWSURFHVVLWVHOILVVXEMHFWWRHYDOXDWLRQ5HJXODUGRFXPHQWDWLRQDVDSDUWRITXDOLW\
PDQDJHPHQWHQDEOHVORQJUDQJHPRQLWRULQJDQGHYDOXDWLRQ