(3,/

*/

EHHQUHIHUUHGWRD/DERXU&RXUW7ULEXQDORU1DWLRQDO7ULEXQDOIRUDGMXGLFDWLRQDQGLQWKHFRXUVHRIWKHDGMXGLFDWLRQ
SURFHHGLQJVWKH/DERXU&RXUW7ULEXQDORU1DWLRQDO7ULEXQDODVWKHFDVHPD\EHLVVDWLVILHGWKDWWKHRUGHURI
GLVFKDUJHRUGLVPLVVDOZDVQRWMXVWLILHGLWPD\E\LWVDZDUGVHWDVLGHWKHRUGHURIGLVFKDUJHRUGLVPLVVDODQG
GLUHFWUHLQVWDWHPHQWRIWKHZRUNPDQRQVXFKWHUPVDQGFRQGLWLRQVLIDQ\DVLWWKLQNVILWRUJLYHVXFKRWKHUUHOLHI
WRWKHZRUNPDQLQFOXGLQJWKHDZDUGRIDQ\OHVVHUSXQLVKPHQWLQOLHXRIGLVFKDUJHRUGLVPLVVDODVWKHFLUFXPVWDQFHV
RIWKHFDVHPD\UHTXLUH
$FFRUGLQJWRWKHSURYLVRWR6HFWLRQ$LQDQ\SURFHHGLQJXQGHUWKLV6HFWLRQWKH/DERXU&RXUW7ULEXQDORU
1DWLRQDO 7ULEXQDO DV WKH FDVH PD\ EH VKDOO UHO\ RQO\ RQ WKH PDWHULDOV RQ UHFRUG DQG VKDOO QRW WDNH IUHVK
HYLGHQFHLQUHODWLRQWRWKHPDWWHU
%HIRUHWKHHQDFWPHQWRI6HFWLRQ$WKHUHZDVQRSURYLVLRQFLUFXPVFULELQJWKHSHULPHWHURIWKHMXULVGLFWLRQRI
WKH7ULEXQDOWRLQWHUIHUHZLWKWKHGLVFLSOLQDU\DFWLRQRIGLVFKDUJHRUGLVPLVVDOIRUPLVFRQGXFWWDNHQE\DQHPSOR\HU
DJDLQVWDQLQGXVWULDOZRUNPDQ

,Q ,QGLDQ,URQDQG6WHHO&R/WG Y 7KHLU:RUNPHQ,//-WKH6XSUHPH

&RXUWZKLOHFRQVLGHULQJWKH7ULEXQDO¶VSRZHUWRLQWHUIHUHZLWKWKHPDQDJHPHQWV
GHFLVLRQ WR GLVPLVV GLVFKDUJH RU WHUPLQDWH WKH VHUYLFH RI D ZRUNPDQ KDV
REVHUYHGWKDWLQFDVHVRIGLVPLVVDOIRUPLVFRQGXFWWKH7ULEXQDOGRHVQRWDFWDV
D&RXUWRIDSSHDODQGVXEVWLWXWHLWVRZQMXGJHPHQWIRUWKDWRIWKHPDQDJHPHQW
DQG WKDW WKH 7ULEXQDO ZLOO LQWHUIHUH RQO\ ZKHQ WKHUH LV ZDQW RI JRRG IDLWK
YLFWLPLVDWLRQXQIDLUODERXUSUDFWLFHHWFRQWKHSDUWRIWKHPDQDJHPHQW
7KHDERYH6HFWLRQ KDVQRUHOHYDQFHWR SXQLVKPHQWVRWKHUWKDQGLVPLVVDO RUGLVFKDUJH5DMDVWKDQ657& Y
/DERXU&RXUW//-

675,.(6$1'/2&.2876
6WULNHVDQGORFNRXWVDUHWKHWZRZHDSRQVLQWKHKDQGVRIZRUNHUVDQGHPSOR\HUVUHVSHFWLYHO\ZKLFKWKH\FDQ
XVHWRSUHVVWKHLUYLHZSRLQWVLQWKHSURFHVVRIFROOHFWLYHEDUJDLQLQJ7KH,QGXVWULDO'LVSXWHV$FWGRHVQRW
JUDQWDQXQUHVWULFWHGULJKWRIVWULNHRUORFNRXW8QGHU6HFWLRQDQG6HFWLRQ$$WKH*RYHUQPHQWLV
HPSRZHUHGWRLVVXHRUGHUIRUSURKLELWLQJFRQWLQXDQFHRIVWULNHRUORFNRXW6HFWLRQVDQGPDNHIXUWKHU
SURYLVLRQVUHVWULFWLQJWKHFRPPHQFHPHQWRIVWULNHVDQGORFNRXWV
L*HQHUDOSURKLELWLRQRIVWULNHVDQGORFNRXWV
1RZRUNPDQZKRLVHPSOR\HGLQDQ\LQGXVWULDOHVWDEOLVKPHQWVKDOOJRRQVWULNHLQEUHDFKRIFRQWUDFWDQGQR
HPSOR\HURIDQ\VXFKZRUNPDQVKDOOGHFODUHDORFNRXW
D GXULQJWKHSHQGHQF\RIFRQFLOLDWLRQSURFHHGLQJVEHIRUHD%RDUGDQGVHYHQGD\VWKHFRQFOXVLRQRIVXFK
SURFHHGLQJV
E GXULQJWKHSHQGHQF\RISURFHHGLQJVEHIRUHD/DERXU&RXUW7ULEXQDORU1DWLRQDO7ULEXQDODQGWZRPRQWKV
DIWHUWKHFRQFOXVLRQRIVXFKSURFHHGLQJV
EE GXULQJWKHSHQGHQF\RIDUELWUDWLRQSURFHHGLQJVEHIRUHDQDUELWUDWRUDQGWZRPRQWKVDIWHUWKHFRQFOXVLRQ
RIVXFKSURFHHGLQJVZKHUHDQRWLILFDWLRQKDVEHHQLVVXHGXQGHUVXEVHFWLRQ$RI6HFWLRQ$RU
F GXULQJDQ\SHULRGLQZKLFKDVHWWOHPHQWRUDZDUGLVLQRSHUDWLRQLQUHVSHFWRIDQ\RIWKHPDWWHUVFRYHUHG
E\WKHVHWWOHPHQWRUDZDUG6HFWLRQ
7KH SXUSRVH RI DERYH SURYLVLRQV LV WR HQVXUH SHDFHIXO DWPRVSKHUH GXULQJ WKH SHQGHQF\ RI DQ\ SURFHHGLQJ
EHIRUHD&RQFLOLDWLRQ2IILFHU/DERXU&RXUW7ULEXQDORU1DWLRQDO7ULEXQDORU$UELWUDWRUXQGHU6HFWLRQ$
LL3URKLELWLRQRIVWULNHVDQGORFNRXWVLQSXEOLFXWLOLW\VHUYLFH
7KHDERYHPHQWLRQHGUHVWULFWLRQVRQVWULNHVDQGORFNRXWVDUHDSSOLFDEOHWRERWKXWLOLW\VHUYLFHVDQGQRQXWLOLW\
 /HVVRQ ,QGXVWULDO'LVSXWHV$FW 

VHUYLFHV6HFWLRQSURYLGHVIRUIROORZLQJDGGLWLRQDOVDIHJXDUGVIRUWKHVPRRWKDQGXQLQWHUUXSWHGUXQQLQJRI
SXEOLFXWLOLW\VHUYLFHVDQGWRREYLDWHWKHSRVVLELOLW\RILQFRQYHQLHQFHWRWKHJHQHUDOSXEOLFDQGVRFLHW\6WDWHRI
%LKDUY 'HRGDU-KD$,53DW
 1RSHUVRQHPSOR\HGLQDSXEOLFXWLOLW\VHUYLFHVKDOOJRRQVWULNHLQEUHDFKRIFRQWUDFW
D ZLWKRXW JLYLQJ WR WKH HPSOR\HU QRWLFH RI VWULNH DV KHUHLQDIWHU SURYLGHG ZLWKLQ VL[ ZHHNV EHIRUH
VWULNLQJLHIURPWKHGDWHRIWKHQRWLFHWRWKHGDWHRIVWULNHDSHULRGRIVL[ZHHNVVKRXOGQRWKDYH
HODSVHGRU
E ZLWKLQGD\VRIJLYLQJRIVXFKQRWLFHLHDSHULRGRIGD\VPXVWKDYHHODSVHGIURPWKHGDWHRI
QRWLFHWRWKHGDWHRIVWULNHRU
F EHIRUHWKHH[SLU\RIWKHGDWHRIVWULNHVSHFLILHGLQDQ\VXFKQRWLFHDVDIRUHVDLGLHWKHGDWHVSHFLILHG
LQWKHQRWLFHPXVWKDYHH[SLUHGRQWKHGD\RIVWULNLQJRU
G GXULQJWKHSHQGHQF\RIDQ\FRQFLOLDWLRQSURFHHGLQJVEHIRUHDFRQFLOLDWLRQRIILFHUDQGVHYHQGD\V
DIWHUWKHFRQFLOLDWLRQRIVXFKSURFHHGLQJV
 1RHPSOR\HUFDUU\LQJRQDQ\SXEOLFXWLOLW\VHUYLFHVKDOOORFNRXWDQ\RIKLVZRUNPHQ
D ZLWKRXWJLYLQJWKHPQRWLFHRIORFNRXWDVKHUHLQDIWHUSURYLGHGZLWKLQVL[ZHHNVEHIRUHORFNLQJRXWRU
E ZLWKLQGD\VRIJLYLQJVXFKQRWLFHRU
F EHIRUHWKHH[SLU\RIWKHGDWHRIORFNRXWVSHFLILHGLQDQ\VXFKQRWLFHDVDIRUHVDLGRU
G GXULQJWKHSHQGHQF\RIDQ\FRQFLOLDWLRQSURFHHGLQJVEHIRUHD&RQFLOLDWLRQ2IILFHUDQGGD\VDIWHU
WKHFRQFLOLDWLRQRIVXFKSURFHHGLQJV
5LJKWWR6WULNHLVWREHH[HUFLVHGDIWHUFRPSO\LQJZLWKFHUWDLQFRQGLWLRQVUHJDUGLQJVHUYLFHRIQRWLFHDQG
DOVR DIWHU H[KDXVWLQJ LQWHUPHGLDWH DQG VDOXWDU\ UHPHG\ RI FRQFLOLDWLRQ SURFHHGLQJV 'KDUDP 6LQJK
5DMSXW Y%DQNRI,QGLD%RPED\/DE,&
7KH$FWQRZKHUHFRQWHPSODWHVWKDWDGLVSXWHZRXOGFRPHLQWRH[LVWHQFHLQDQ\SDUWLFXODURUVSHFLILHG
PDQQHU )RU FRPLQJ LQWR H[LVWHQFH RI DQ LQGXVWULDO GLVSXWH D ZULWWHQ GHPDQG LV QRW D VLQH TXD QRQ
XQOHVVRIFRXUVHLQWKHFDVHRISXEOLFXWLOLW\VHUYLFHEHFDXVH6HFWLRQIRUELGVJRLQJRQVWULNHZLWKRXW
JLYLQJDVWULNHQRWLFH,/DERXU/DZ-RXUQDO6&
 7KH QRWLFH RI ORFNRXW RU VWULNH XQGHU WKLV 6HFWLRQ VKDOO QRW EH QHFHVVDU\ ZKHUH WKHUH LV DOUHDG\ LQ
H[LVWHQFHDVWULNHRUDVWKHFDVHPD\EHORFNRXWLQWKHSXEOLFXWLOLW\VHUYLFHEXWWKHHPSOR\HUVKDOO
VHQGLQWLPDWLRQRIVXFKORFNRXWRUVWULNHRQWKHGD\RQZKLFKLWLVGHFODUHGWRVXFKDXWKRULW\DVPD\EH
VSHFLILHGE\WKHDSSURSULDWH*RYHUQPHQWHLWKHUJHQHUDOO\RUIRUDSDUWLFXODUDUHDRUIRUDSDUWLFXODUFODVV
RISXEOLFXWLOLW\VHUYLFHV
 7KH QRWLFH RI VWULNH UHIHUUHG WR LQ 6HFWLRQ  VKDOO EH JLYHQ E\ VXFK QXPEHU RI SHUVRQV WR VXFK
SHUVRQRUSHUVRQVDQGLQVXFKPDQQHUDVPD\EHSUHVFULEHG
 7KHQRWLFHRIORFNRXWUHIHUUHGWRLQ6HFWLRQVKDOOEHJLYHQLQVXFKPDQQHUDVPD\EHSUHVFULEHG
 ,IRQDQ\GD\DQHPSOR\HUUHFHLYHVIURPDQ\SHUVRQVHPSOR\HGE\KLPDQ\VXFKQRWLFHVDVDUHUHIHUUHG
WRLQVXEVHFWLRQRUJLYHVWRDQ\SHUVRQVHPSOR\HGE\KLPDQ\VXFKQRWLFHVDVDUHUHIHUUHGWRLQVXE
VHFWLRQKHVKDOOZLWKLQILYHGD\VWKHUHRIUHSRUWWRWKHDSSURSULDWH*RYHUQPHQWRUWRVXFKDXWKRULW\DV
WKDW*RYHUQPHQWPD\SUHVFULEHWKHQXPEHURIVXFKQRWLFHVUHFHLYHGRUJLYHQRQWKDWGD\6HFWLRQ
(3,/ */

7HVW\RXUNQRZOHGJH
6WDWHZKHWKHUWKHIROORZLQJVWDWHPHQWLV³7UXH´RU³)DOVH´
1RSHUVRQHPSOR\HGLQDSXEOLFXWLOLW\VHUYLFHVKDOOJRRQVWULNHZLWKRXWJLYLQJWRWKH
HPSOR\HUDQRWLFHRIVWULNHZLWKLQILYHZHHNVEHIRUHVWULNLQJ
‡ 7UXH
‡ )DOVH
&RUUHFW$QVZHU)DOVH

LLL,OOHJDOVWULNHVDQGORFNRXWV
$VWULNHRUORFNRXWVKDOOEHLOOHJDOLI
L LWLVFRPPHQFHGRUGHFODUHGLQFRQWUDYHQWLRQRI6HFWLRQRU 6HFWLRQRU
LL ,WLVFRQWLQXHGLQFRQWUDYHQWLRQRIDQRUGHUPDGHXQGHU6HFWLRQRU6HFWLRQ$$
:KHUHDVWULNHRUORFNRXWLQSXUVXDQFHRIDQLQGXVWULDOGLVSXWHKDVDOUHDG\FRPPHQFHGDQGLVLQH[LVWHQFH
DWWKHWLPHRIUHIHUHQFHRIWKHGLVSXWHWRD%RDUGDQDUELWUDWRUD/DERXU&RXUW7ULEXQDORU1DWLRQDO7ULEXQDOWKH
FRQWLQXDQFHRIVXFKVWULNHRUORFNRXWVKDOOQRWEHGHHPHGWREHLOOHJDOSURYLGHGWKDWVXFKVWULNHRUORFNRXWZDV
QRW DW LWV FRPPHQFHPHQW LQ FRQWUDYHQWLRQ RI WKH SURYLVLRQV RI WKLV$FW RU WKH FRQWLQXDQFH WKHUHRI ZDV QRW
SURKLELWHGXQGHU6HFWLRQRU6HFWLRQ$$
$ORFNRXWGHFODUHGLQFRQVHTXHQFHRIDQLOOHJDOVWULNHRUVWULNHGHFODUHGLQFRQVHTXHQFHRIDQLOOHJDOORFNRXW
VKDOOQRWEHGHHPHGWREHLOOHJDO6HFWLRQ
1RSHUVRQVKDOONQRZLQJO\H[SHQGRUDSSO\DQ\PRQH\LQGLUHFWIXUWKHUDQFHRUVXSSRUWRIDQ\LOOHJDOVWULNHRU
ORFNRXW6HFWLRQ

-867,),('$1'81-867,),('675,.(6
,IDVWULNHLVLQFRQWUDYHQWLRQRIWKHDERYHSURYLVLRQVLWLVDQLOOHJDOVWULNH6LQFHVWULNHLVWKHHVVHQFHRIFROOHFWLYH
EDUJDLQLQJ LIZRUNHUV UHVRUWWR VWULNHWR SUHVVIRU WKHLU OHJLWLPDWHULJKWV WKHQLW LVMXVWLILHG :KHWKHUVWULNH LV
MXVWLILHGRUXQMXVWLILHGZLOOGHSHQGXSRQWKHIDLUQHVVDQGUHDVRQDEOHQHVVRIWKHGHPDQGVRIZRUNHUV

,QWKHFDVHRI &KDQGUDPDODL(VWDWH Y ,WV:RUNPHQ,,//-6&WKH

6XSUHPH&RXUWREVHUYHG³:KLOHRQWKHRQHKDQGLWEHUHPHPEHUHGWKDWVWULNH
LVDOHJLWLPDWHDQGVRPHWLPHVXQDYRLGDEOHZHDSRQLQWKHKDQGVRIODERXULWLV
HTXDOO\LPSRUWDQWWRUHPHPEHUWKDWLQGLVFULPLQDWHDQGKDVW\XVHRIWKLVZHDSRQ
VKRXOGQRWEHHQFRXUDJHG,WZLOOQRWEHULJKWIRUODERXUWRWKLQNWKDWIRUDQ\NLQG
RI GHPDQG D VWULNH FDQ EH FRPPHQFHG ZLWK LPSXQLW\ ZLWKRXW H[KDXVWLQJ
UHDVRQDEOH DYHQXHVIRU SHDFHIXO DFKLHYHPHQWRI WKHLU REMHFWV 7KHUHPD\ EH
FDVHVZKHUHWKHGHPDQGLVRIVXFKDQXUJHQWDQGVHULRXVQDWXUHWKDWLWZRXOGQRWEHUHDVRQDEOHWR
H[SHFWODERXUWRZDLWWLOODIWHUDVNLQJWKH*RYHUQPHQWWRPDNHDUHIHUHQFH,QVXFKFDVHVVWULNHHYHQ
EHIRUHVXFKDUHTXHVWKDVEHHQPDGHZLOOEHMXVWLILHG´

7KXVLIZRUNPHQJRRQVWULNHZLWKRXWFRQWUDYHQLQJVWDWXWRU\UHTXLUHPHQWVLQVXSSRUWRIWKHLUGHPDQGVWKH
VWULNH ZLOO EH MXVWLILHG ,Q WKH EHJLQQLQJ VWULNH ZDV MXVWLILHG EXW ODWHU RQ ZRUNPHQ LQGXOJHG LQ YLROHQFH LW ZLOO
EHFRPHXQMXVWLILHG
,QWKHFDVHRI ,QGLDQ*HQHUDO1DYLJDWLRQDQG5O\&R/WGY 7KHLU:RUNPHQ,//-WKH6XSUHPH
&RXUWKHOGWKDWWKHODZKDVPDGHDGLVWLQFWLRQEHWZHHQDVWULNHZKLFKLVLOOHJDODQGRQHZKLFKLVQRWEXWLWKDV
QRWPDGHGLVWLQFWLRQEHWZHHQDQLOOHJDOVWULNHZKLFKPD\EHVDLGWREHMXVWLILDEOHDQGRQHZKLFKLVQRWMXVWLILDEOH
 /HVVRQ ,QGXVWULDO'LVSXWHV$FW 

7KLVGLVWLQFWLRQLVQRWZDUUDQWHGE\WKH$FWDQGLVZKROO\PLVFRQFHLYHGVSHFLDOO\LQWKHFDVHRIHPSOR\HHVLQD
SXEOLFXWLOLW\VHUYLFH7KHUHIRUHDQLOOHJDOVWULNHLVDOZD\VXQMXVWLILHG
,WLVZHOOVHWWOHGWKDWLQRUGHUWRHQWLWOHWKHZRUNPHQWRZDJHVIRUWKHSHULRGRIVWULNHVWULNHVKRXOGEHOHJDODVZHOO
DVMXVWLILHG$VWULNHLVOHJDOLILWGRHVQRWYLRODWHDQ\SURYLVLRQRIWKHVWDWXWH$JDLQDVWULNHFDQQRWEHVDLGWREH
XQMXVWLILHGXQOHVVWKHUHDVRQVIRULWDUHHQWLUHO\SHUYHUVHRUXQUHDVRQDEOH:KHWKHUDSDUWLFXODUVWULNHLVMXVWLILHG
RUQRWLVDTXHVWLRQRIIDFWZKLFKKDVWREHMXGJHGLQWKHOLJKWRIWKHIDFWVDQGFLUFXPVWDQFHVRIHDFKFDVHLWLV
DOVRZHOOVHWWOHGWKDWWKHXVHRIIRUFHRUYLROHQFHRUDFWVRIVDERWDJHUHVRUWHGWRE\WKHZRUNPHQGXULQJDVWULNH
GLVHQWLWOHGWKHPWRZDJHVIRUWKHVWULNHSHULRG&URPSWRQ*UHDYHV/LPLWHGY :RUNPHQ/DE,&
:KHUHSHQGLQJDQLQGXVWULDOGLVSXWHWKHZRUNHUVZHQWRQVWULNHWKHVWULNHWKXVEHLQJLOOHJDOWKHORFNRXWWKDW
IROORZHGEHFRPHVOHJDODGHIHQVLYHPHDVXUH,/DERXU/DZ-RXUQDO6&

7HVW\RXUNQRZOHGJH
6WDWHZKHWKHUWKHIROORZLQJVWDWHPHQWLV³7UXH´RU³)DOVH´
$ORFNRXWGHFODUHGLQFRQVHTXHQFHRIDQLOOHJDOVWULNHRUVWULNHGHFODUHGLQFRQVHTXHQFH
RIDQLOOHJDOORFNRXWVKDOOQRWEHGHHPHGWREHLOOHJDO
‡ 7UXH
‡ )DOVH
&RUUHFWDQVZHU7UXH

:$*(6)25675,.(3(5,2'
7KHSD\PHQWRIZDJHVIRUWKHVWULNHSHULRGZLOOGHSHQGXSRQZKHWKHUWKHVWULNHLVMXVWLILHGRUXQMXVWLILHG7KLV
DOVRGHSHQGVXSRQVHYHUDOIDFWRUVVXFKDVVHUYLFHFRQGLWLRQVRIZRUNPDQWKHFDXVHZKLFKOHGWRVWULNHWKH
XUJHQF\RIFDXVHRUGHPDQGRIZRUNPDQWKHUHDVRQIRUQRWUHVRUWLQJWRGLVSXWHVHWWOHPHQWPDFKLQHU\XQGHUWKH
$FWRUVHUYLFHUXOHVUHJXODWLRQVHWF6&&1RZDJHVDUHSD\DEOHLIWKHVWULNHLVLOOHJDORULWLVXQMXVWLILHG
)XUWKHULIWKHZRUNHUVLQGXOJHLQYLROHQFHQRZDJHVZLOOEHSDLGHYHQZKHQWKHLUVWULNHZDVOHJDODQGMXVWLILHG
'XP'XP$OXPLQLXP:RUNHUV8QLRQY $OXPLQLXP0IJ&R7KHZRUNPHQPXVWQRWWDNHDQ\KDVW\VWHSVLQ
UHVRUWLQJWRVWULNH7KH\PXVWILUVWWDNHVWHSVWRVHWWOHWKHGLVSXWHWKURXJKFRQFLOLDWLRQRUDGMXGLFDWLRQH[FHSW
ZKHQWKHPDWWHULVXUJHQWDQGRIVHULRXVQDWXUH7KXVLQ &KDQGUDPDODL(VWDWHY :RUNPHQLWZDVREVHUYHGWKDW
ZKHQZRUNPHQPLJKWZHOOKDYHZDLWHGIRUVRPHWLPHDIWHUFRQFLOLDWLRQHIIRUWVKDGIDLOHGEHIRUHVWDUWLQJDVWULNH
DQGLQWKHPHDQWLPHFRXOGKDYHDVNHGWKH*RYHUQPHQWWRPDNHDUHIHUHQFHWKHVWULNHZRXOGEHXQMXVWLILHGDQG
WKHZRUNPHQZRXOGQRWEHHQWLWOHGWRZDJHVIRUWKHVWULNHSHULRG

,QWKHFDVHRI &URPSWRQ*UHDYHV/WGY 7KH:RUNPHQ $,56&LW

ZDVREVHUYHGWKDWIRUHQWLWOHPHQWRIZDJHVIRUWKHVWULNHSHULRGWKHVWULNHVKRXOG
EHOHJDODQGMXVWLILHG5HLWHUDWLQJWKLVSRVLWLRQWKH&RXUWKHOGLQ6\QGLFDWH%DQN
Y8PHVK1D\DN6&&WKDWZKHUHWKHVWULNHLVOHJDOEXWDWWKHVDPH
WLPHXQMXVWLILHGWKHZRUNHUVDUHQRWHQWLWOHGIRUZDJHVIRUWKHVWULNHSHULRG,W
FDQQRWEHXQMXVWLILHGXQOHVVUHDVRQVIRULWDUHHQWLUHO\SUHYHUVHRUXQUHDVRQDEOH
7KHXVHRIIRUFHYLROHQFHRUDFWVRIVDERWDJHE\ZRUNPHQGXULQJWKHVWULNHSHULRGZLOOQRWHQWLWOHWKHP
IRUZDJHVIRUWKHVWULNHSHULRG

6XSUHPH&RXUWLQ %DQNRI,QGLD Y 76.HODZDOD,,//-6&GHFLGHGWKDWZKHUHHPSOR\HHVDUHJRLQJ

RQDVWULNHIRUDSRUWLRQRIWKHGD\RUIRUZKROHGD\DQGWKHUHZDVQRSURYLVLRQLQWKHFRQWUDFWRIHPSOR\PHQWRU
VHUYLFHUXOHVRUUHJXODWLRQVIRUGHGXFWLQJZDJHVIRUWKHSHULRGIRUZKLFKWKHHPSOR\HHVUHIXVHGWRZRUNDOWKRXJK
ZRUNZDVRIIHUHGWRWKHPDQGVXFKGHGXFWLRQLVQRWFRYHUHGE\DQ\RWKHUSURYLVLRQHPSOR\HULVHQWLWOHGWR
GHGXFWZDJHVSURSRUWLRQDWHO\IRUWKHSHULRGRIDEVHQFHRUIRUWKHZKROHGD\GHSHQGLQJXSRQWKHFLUFXPVWDQFHV
(3,/ */

',60,66$/2):25.0(1$1',//(*$/675,.(
,I ZRUNHUV SDUWLFLSDWH LQ DQ LOOHJDO VWULNH WKH HPSOR\HU LV ZLWKLQ KLV ULJKW WR GLVPLVV WKH VWULNLQJ ZRUNPHQ RQ
JURXQGRIPLVFRQGXFW)RUWKLVLWLVQHFHVVDU\WKDWDSURSHUDQGUHJXODUGRPHVWLFHQTXLU\LVKHOG,QWKHFDVHRI
,QGLDQ*HQHUDO1DYLJDWLRQDQG5O\&RY 7KHLU:RUNPHQWKH6XSUHPH&RXUWODLGGRZQWKHJHQHUDOUXOHWKDW
PHUH WDNLQJ SDUW LQ DQ LOOHJDO VWULNH ZLWKRXW DQ\WKLQJ IXUWKHU ZRXOG QRW QHFHVVDULO\ MXVWLI\ WKH GLVPLVVDO RI DOO
ZRUNPHQWDNLQJSDUWLQWKHVWULNHDQGWKDWLWZDVQHFHVVDU\WRKROGDUHJXODULQTXLU\DIWHUIXUQLVKLQJFKDUJHVKHHW
WRHDFKRIWKHZRUNPDQVRXJKWWREHGHDOWZLWKIRUKLVSDUWLFLSDWLRQLQWKHVWULNH,WZDVIXUWKHUREVHUYHGWKDW
EHFDXVHZRUNPHQJRRQVWULNHLWGRHVQRWMXVWLI\WKHPDQDJHPHQWLQWHUPLQDWLQJWKHLUVHUYLFHV,QDQ\FDVHLI
DOOHJDWLRQVRIPLVFRQGXFWKDYHEHHQPDGHDJDLQVWWKHPWKRVHDOOHJDWLRQVKDYHWREHHQTXLUHGLQWRE\FKDUJLQJ
WKHPZLWKVSHFLILFDFWVRIPLVFRQGXFWDQGJLYLQJWKHPDQRSSRUWXQLW\WRGHIHQGWKHPVHOYHVDWWKHHQTXLU\,QWKH
FDVHRI ([SUHVV1HZVSDSHU3/WGY 0LFKDHO0DUN,,//-6&WKH6XSUHPH&RXUWKHOGWKDW
ZKHUH WKH ZRUNPHQ ZKR KDG SDUWLFLSDWHG LQ DQ LOOHJDO VWULNH GLG QRW MRLQ WKHLU GXWLHV ZKLFK UHVXOWHG LQ WKHLU
GLVPLVVDOXQGHUWKH6WDQGLQJ2UGHUVSDUWLFLSDWLRQLQVWULNHPHDQVWKDWWKH\KDYHDEDQGRQHGWKHLUHPSOR\PHQW
+RZHYHU WKH HPSOR\HU FDQ WDNH GLVFLSOLQDU\ DFWLRQ DJDLQVW WKH HPSOR\HHV XQGHU WKH 6WDQGLQJ 2UGHUV DQG
GLVPLVVWKHP
)XUWKHUWKHTXDQWXPRISXQLVKPHQWVKRXOGGHSHQGXSRQWKHH[WHQWRILQYROYHPHQWLQWKHVWULNH7KRVHZKRDUH
JXLOW\RIYLROHQFHHQFRXUDJHRWKHUZRUNHUVWRMRLQDQLOOHJDOVWULNHDQGSK\VLFDOO\REVWUXFWWKHOR\DOZRUNHUVIURP
MRLQLQJ WKHLU GXWLHV WKH\ FDQ EH GLVPLVVHG IURP WKHLU VHUYLFH %XW GLVPLVVDO RI SHDFHIXO VWULNHUV ZKR PHUHO\
DFWHGDVGXPEGULYHQFDWWOHFDQQRWEHMXVWLILHG7KHTXHVWLRQRISXQLVKPHQWKDVWREHFRQVLGHUHGE\WKHLQGXVWULDO
DGMXGLFDWLRQNHHSLQJLQYLHZWKHRYHUULGLQJFRQVLGHUDWLRQRIWKHIXOODQGHIILFLHQWZRUNLQJRIWKHLQGXVWU\DVD
ZKROH

+RZHYHU WKH 6XSUHPH &RXUW LQ DQ XQSUHFHGHQWHG MXGJHPHQW LQ 7.

5DQJDUDMDQ Y *RYHUQPHQW RI 7DPLO 1DGX DQG 2WKHUV   6&& 
,,,//-KHOGWKDWWKHJRYHUQPHQWHPSOR\HHVKDYHQRIXQGDPHQWDO
ULJKW VWDWXWRU\ RUHTXLWDEOH RU PRUDO WR UHVRUW WRVWULNH DQG WKH\ FDQ QRW
WDNHWKHVRFLHW\DWUDQVRPE\JRLQJRQVWULNHHYHQLIWKHUHLVLQMXVWLFHWR
VRPHH[WHQW
7KH$SH[&RXUWZHQWWRREVHUYHWKDWVWULNHDVDZHDSRQLVPRVWO\XVHGZKLFKUHVXOWVLQFKDRVDQGWRWDOPDO
DGPLQLVWUDWLRQ7KHMXGJHPHQWKDVHYRNHGDOLYHO\GHEDWHIRUDQGDJDLQVWWKHSURSRVLWLRQ
7KH6XSUHPH&RXUWKDVDJUHHGWRKHDUDSHWLWLRQVHHNLQJUHYLHZRILWVMXGJHPHQWEDQQLQJVWULNHE\DOOJRYHUQPHQW
HPSOR\HHVDQGLWLVH[SHFWHGWKDWWKHLQFRQVLVWHQFLHVLQWKHMXGJHPHQWDUHOLNHO\WREHUHVROYHG

7HVW\RXUNQRZOHGJH
6WDWHZKHWKHUWKHIROORZLQJVWDWHPHQWLV³7UXH´RU³)DOVH´
7KHSD\PHQWRIZDJHVIRUWKHVWULNHSHULRGZLOOQRWGHSHQGXSRQZKHWKHUWKHVWULNH
LVMXVWLILHGRUXQMXVWLILHG
‡ 7UXH
‡ )DOVH
&RUUHFWDQVZHU)DOVH

-867,),&$7,212)/2&.287$1':$*(6)25/2&.2873(5,2'
$ORFNRXWLQYLRODWLRQRIWKHVWDWXWRU\UHTXLUHPHQWVLVLOOHJDODQGXQMXVWLILHGDQGZRUNHUVDUHHQWLWOHGWRZDJHVIRU
 /HVVRQ ,QGXVWULDO'LVSXWHV$FW 

WKHORFNRXWSHULRG)RUOHJDOORFNRXWQRZDJHVDUHSD\DEOHWRZRUNPHQ%XWZKHUHWKHORFNRXWWKRXJKOHJDO
LVGHFODUHGZLWKWKHXOWHULRUPRWLYHRIYLFWLPLVDWLRQRIZRUNPHQRUKDVEHHQFRQWLQXHGIRUXQUHDVRQDEOHSHULRGRI
WLPHLWLVXQMXVWLILHGDQGWKHZRUNPHQDUHHQWLWOHGWRZDJHV,Q /RUG.ULVKQD6XJDU0LOOV/WG Y6WDWHRI83
,,//-$OOLWZDVREVHUYHGWKDWORFNLQJRXWWKHZRUNPHQZLWKRXWDQ\SULRUQRWLFHWRWKHPDQGDVD
UHWDOLDWRU\PHDVXUHWRWHUURULVHWKHPLVLOOHJDORUXQMXVWLILHG:KHUHLOOHJDORUXQMXVWLILHGVWULNHLVIROORZHGE\DQ
XQMXVWLILHGORFNRXWWKHZDJHVIRUORFNRXWSHULRGZLOOGHSHQGXSRQWKHH[WHQWRIEODPHIRUHDFKRWKHUVDFW,QGLD
0DULQH6HUYLFHV3/WGY 7KHLU:RUNPHQ,//-6&

&+$1*(,1&21',7,2162)6(59,&(
&KDQJHLQVHUYLFHFRQGLWLRQVZKHQQRSURFHHGLQJVDUHSHQGLQJEHIRUH/DERXU&RXUW7ULEXQDOHWF
1RWLFHRIFKDQJH6HFWLRQ$RIWKH,QGXVWULDO'LVSXWHV$FWOD\VGRZQWKDWDQ\HPSOR\HUZKRSURSRVHVWR
HIIHFWDQ\FKDQJHLQWKHFRQGLWLRQVRIVHUYLFHDSSOLFDEOHWRDQ\ZRUNPDQLQUHVSHFWRIDQ\PDWWHUVSHFLILHGLQ
6FKHGXOH,9JLYHQLQWKHHQGRIWKLVVWXG\LVUHTXLUHGWRIROORZWKHSURFHGXUHODLGGRZQLQ6HFWLRQ$RIWKH$FW
$FFRUGLQJWR6HFWLRQ$WKHZRUNPHQOLNHO\WREHDIIHFWHGE\WKHSURSRVHGFKDQJHVDUHWREHJLYHQDQRWLFHLQ
WKHSUHVFULEHGPDQQHU1RFKDQJHFDQEHPDGHZLWKLQGD\VRIJLYLQJVXFKQRWLFH+RZHYHUQRQRWLFHLV
UHTXLUHGIRUHIIHFWLQJDQ\VXFKFKDQJHZKHQLWLVLQSXUVXDQFHRIDQ\VHWWOHPHQWRUDZDUG7KHVHSURYLVLRQVDUH
ZKROO\LQDSSOLFDEOHWRDQ\DOOHJHGULJKWWRZRUNUHOLHIIRURIILFHEHDUHUVRIWUDGHXQLRQV1RVXFKULJKWLVUHFRJQLVHG
XQGHUSURYLVLRQVRIWKH$FW//-,,0DG
$FFRUGLQJWR6HFWLRQ%ZKHUHWKHDSSURSULDWH*RYHUQPHQWLVRIRSLQLRQWKDWWKHDSSOLFDWLRQRIWKHSURYLVLRQV
RI6HFWLRQ$WRDQ\FODVVRILQGXVWULDOHVWDEOLVKPHQWVRUWRDQ\FODVVRIZRUNPHQHPSOR\HGLQDQ\LQGXVWULDO
HVWDEOLVKPHQWDIIHFWWKHHPSOR\HUVLQUHODWLRQWKHUHWRVRSUHMXGLFLDOO\WKDWVXFKDSSOLFDWLRQPD\FDXVHVHULRXV
UHSHUFXVVLRQRQWKHLQGXVWU\FRQFHUQHGDQGWKDWSXEOLFLQWHUHVWVRUHTXLUHVWKHDSSURSULDWH*RYHUQPHQWPD\
E\QRWLILFDWLRQLQWKH2IILFLDO*D]HWWHGLUHFWWKDWWKHSURYLVLRQVRIWKHVDLG6HFWLRQVKDOOQRWDSSO\RUVKDOODSSO\
VXEMHFWWRVXFKFRQGLWLRQVDVPD\EHVSHFLILHGLQWKHQRWLILFDWLRQWRWKDWFODVVRILQGXVWULDOHVWDEOLVKPHQWVRUWR
WKDWFODVVRIWKHZRUNPHQHPSOR\HGLQDQ\LQGXVWULDOHVWDEOLVKPHQW
&KDQJHLQFRQGLWLRQVRIVHUYLFHGXULQJSHQGHQF\RISURFHHGLQJV
6HFWLRQSURKLELWVWKHHPSOR\HUIURPEULQJLQJDQ\FKDQJHWRWKHSUHMXGLFHRIDQ\ZRUNPDQLQWKHFRQGLWLRQV
RIVHUYLFHLQUHVSHFWRIDQ\PDWWHUFRQQHFWHGZLWKWKHGLVSXWHZKLFKLVSHQGLQJEHIRUHD&RQFLOLDWLRQ2IILFHURU
&RQFLOLDWLRQ %RDUG RU DQ$UELWUDWRU RU /DERXU &RXUW RU 7ULEXQDO RU 1DWLRQDO 7ULEXQDO 7KH SXUSRVH RI VXFK D
SURKLELWLRQ LV WR SURWHFW WKH ZRUNPHQ FRQFHUQHG GXULQJ WKH SHQGHQF\ RI SURFHHGLQJV DJDLQVW HPSOR\HUV
KDUDVVPHQW DQG YLFWLPLVDWLRQ RQ DFFRXQW RI WKHLU KDYLQJ UDLVHG WKH LQGXVWULDO GLVSXWH RI WKHLU FRQWLQXLQJ WKH
SHQGLQJ SURFHHGLQJV 7KLV 6HFWLRQ DOVR VHHNV WR PDLQWDLQ VWDWXV TXR E\ SUHVFULELQJ PDQDJHPHQW FRQGXFW
ZKLFKPD\JLYHULVHWRIUHVKGLVSXWHZKLFKIXUWKHUH[DFHUEDWHWKHDOUHDG\VWUDLQHGUHODWLRQVEHWZHHQWKHHPSOR\HU
DQGWKHZRUNPHQ$XWRPRELOH3URGXFWVRI,QGLD/WGY 5XNPDML%DOD$,56&7KXVRUGLQDU\ULJKWRI
WKHHPSOR\HUWRDOWHUWKHWHUPVRIKLVHPSOR\HHVVHUYLFHWRWKHLUSUHMXGLFHRUWRWHUPLQDWHWKHLUVHUYLFHVXQGHU
WKHJHQHUDOODZJRYHUQLQJWKHFRQWUDFWRIHPSOR\PHQWKDVEHHQEDQQHGVXEMHFWWRFHUWDLQFRQGLWLRQV+RZHYHU
XQGHU6HFWLRQHPSOR\HULVIUHHRIGHDOZLWKHPSOR\HHVZKHQWKHDFWLRQDJDLQVWWKHFRQFHUQHGZRUNPDQLVQRW
SXQLWLYHRU PDODILGHRUGRHVQRWDPRXQWWRYLFWLPLVDWLRQRUXQIDLUODERXUSUDFWLFH$LU,QGLD&RUSRUDWLRQY $
5HEHOOR,//-6&$GHWDLOHGVWXG\RI6HFWLRQZLOOIXUWKHUFODULI\WKDWDVSHFW
$FFRUGLQJWR6HFWLRQGXULQJWKHSHQGHQF\RIDQ\SURFHHGLQJVEHIRUH&RQFLOLDWLRQ2IILFHURUD%RDUGRU
DQ$UELWUDWRURUD/DERXU&RXUWRU7ULEXQDORU1DWLRQDO7ULEXQDOLQUHVSHFWRIDQLQGXVWULDOGLVSXWHWKHHPSOR\HU
LVSURKLELWHGIURPWDNLQJIROORZLQJDFWLRQVDJDLQVWWKHZRUNPHQH[FHSWZLWKWKHH[SUHVVSHUPLVVLRQLQZULWLQJRI
WKHDXWKRULW\EHIRUHZKLFKWKHSURFHHGLQJVDUHSHQGLQJ
D WRDOWHULQUHJDUGWRDQ\PDWWHUFRQQHFWHGZLWKWKHGLVSXWHWRWKHSUHMXGLFHRIWKHZRUNPHQFRQFHUQHGLQ
VXFKGLVSXWHWKHFRQGLWLRQVRIVHUYLFHDSSOLFDEOHWRWKHPLPPHGLDWHO\EHIRUHWKHFRPPHQFHPHQWRI
VXFKSURFHHGLQJV