51&28'(1+29(.

$/(5*,

35$&7,&$/,'($/,60
12%,/,7<ߟ7(&+12/2*<3$&,),60
)25(:25'

12%,/,7<ߟ
3$5721(
2)585$/$1'85%$10(1
 585$/0$1ߟ85%$1,7(
 -81.(5:5,7(5
 *(17/(0(1ߟ%2+(0,$1
 ,1%5((',1*ߟ&5266%5((',1*
 +($7+(1$1'&+5,67,$10(17$/,7<
3$577:2
&5,6,62)12%,/,7<
 0,1'58/(,167($'2)6:25'58/(
 '$:12)7+(12%,/,7<
 3/872&5$&<
 %/22'12%,/,7<$1')8785(12%,/,7<
 -8'$,60$1')8785(12%,/,7<
287/22.
$32/2*<2)7(&+12/2*<ߟ
,7+(/2673$5$',6(
7+(&856(2)&8/785(
 '(9(/230(17$1')5(('20
 29(53238/$7,21$1'0,*5$7,21727+(1257+
 62&,(7<$1'&/,0$7(
 /,%(5$7,21$77(03762)0$1.,1'
,, (7+,&6$1'7(&+12/2*<
 7+(62&,$/48(67,21
 ,1$'(48$&<2)32/,7,&6
 67$7($1'(03/2<0(17
 $1$5&+<$1'/(,685(
 29(5&20,1*2)67$7($1'/$%25
 (7+,&6$1'7(&+12/2*<
,,, $6,$$1'(8523(
 $6,$$1'(8523(
 &8/785($1'&/,0$7(
 7+(7+5((5(/,*,216
 +$5021<$1')25&(
,9 (8523(ߥ67(&+12/2*,&$/:25/'0,66,21
 7+((8523($163,5,7
 *5((&($635((8523(
 7+(7(&+1,&$/%$6,&62)(8523(
 7(&+12/2*,&$/:25/'&+$1*(
 (8523($6&8/785$/$*(17
  /(21$5'2$1'%$&21
9+817,1*ߟ:$5ߟ:25.
 32:(5$1')5(('20
 +817,1*
 :$5
 :25.
 :$5$6$1$&+521,60
 7(&+12/2*<
9, 7(&+12/2*<ߥ6&$03$,*1
 (8523(ߥ60$660,6(5<
 &2/21,$/32/,&<
 62&,$/32/,&<
 7(&+12/2*,&$/:25/'5(92/87,21
 7(&+12/2*<ߥ6$50<
 7+((/(&75,&:$5
 7+(,19(1725$65('((0(5
9,, (1'*2$/2)7(&+12/2*<
 &8/785($1'6/$9(5<
 7+(0$&+,1(
 ',60$17/,1*7+(%,*&,7<
 7+(&8/785$/3$5$',6(2)7+(0,//,21$,5(
9,,, 63,5,72)7+(7(&+12/2*,&$/$*(
 +(52,&3$&,),60
 7+(63,5,72)/$=,1(66
 %($87<$1'7(&+12/2*<
 (0$1&,3$7,21
 &+5,67,$1,7<$1'.1,*+7+22'
 7+(%8''+,67'$1*(5
,; 67,11(6$1'.5$66,1
 (&2120,&67$7(6
 7+(5866,$1),$6&2
 &$3,7$/,67$1'&20081,67352'8&7,21
 0(5&(1$5,(6$1'62/',(562)/$%25
 62&,$/&$3,7$/,60ߟ/,%(5$/&20081,60
 &25325$7,21$1'81,216
;)520:25.(567$7(72&8/7585(67$7(
 &+,/':256+,3
 0$1'$725</$%25
 352'8&(5$1'&21680(567$7(
 5(92/87,21$1'7(&+12/2*<
 '$1*(562)7(&+12/2*<
 520$17,&,602)7+()8785(
3$&,),60ߟ
 7(1<($562):$5
 &,7,&,602)3$&,),60
 5(/,*,286$1'32/,7,&$/3$&,),60
 5()2502)3$&,),60
 :25/'3($&($1'(8523($13($&(
 5($/32/,7,.3($&(352*5$0
 352027,1*7+(,'($2)3($&(
 3($&(3523$*$1'$
 1(:+(52,60
)25(:25'

3 UDFWLFDO ,GHDOLVP LV KHURLVP SUDFWLFDO PDWHULDOLVP LV

HXGHPRQLVP 7KRVH ZKR QRW EHOLHYH LQ LGHDOV KDYH
QR UHDVRQ WR DFW LGHDOO\ RU WR ILJKW RU VXIIHU IRU
LGHDOV %HFDXVH WKH\ NQRZ DQG DFNQRZOHGJH RQO\ RQH YDOXH SOHDVXUH
RQO\DVLQJOHHYLOSDLQ
+HURLVP QHFHVVLWDWHV IDLWK DQG FRPPLWPHQW WR WKH LGHDO WKH
FRQYLFWLRQ WKDW WKHUH DUH KLJKHU YDOXHV WKDQ SOHDVXUH DQG JUHDWHU HYLO
WKDQSDLQ
7KLVFRQWUDGLFWLRQUXQVWKURXJKWKHZKROHRIKXPDQKLVWRU\LWLVWKH
GLIIHUHQFH EHWZHHQ WKH HSLFXUHDQV DQG VWRLFV 7KLV GLIIHUHQFH LV PXFK
JUHDWHU WKDQ WKDW EHWZHHQ WKHLVWV DQG DWKHLVWV EHFDXVH WKHUH ZHUH
(SLFXUHDQV ZKR EHOLHYHG LQ JRGV DV (SLFXUXV KLPVHOI DQG WKHUH ZHUH
,GHDOLVWVZKRZHUHDWKHLVWVOLNH%XGGKD
6RWKLVLVQRWDERXWEHOLHYLQJLQJRGVߟEXWDERXWEHOLHYLQJLQYDOXHV
0DWHULDOLVP LV XQFRQGLWLRQDO ߟ EXW XQLPDJLQDWLYH DQG XQFUHDWLYH
LGHDOLVPLVDOZD\VSUREOHPDWLFDQGLVRIWHQHQWDQJOHGZLWKQRQVHQVHDQG
LQVDQLW\QHYHUWKHOHVVKXPDQLW\RZHVLWVJUHDWHVWZRUNVDQGGHHGVWRLW
+HURLVPLVWKHQRELOLW\RIHWKRV+HURLVPLVDVFORVHO\UHODWHGWRWKH
DULVWRFUDWLF LGHDO DV PDWHULDOLVP LV WR WKH GHPRFUDWLF (YHQ GHPRFUDF\
EHOLHYHVPRUHLQQXPEHUVWKDQLQYDOXHPRUHLQOXFNWKDQLQJUHDWQHVV
7KHUHIRUH SROLWLFDO GHPRFUDF\ FDQ RQO\ EHFRPH IUXLWIXO DQG FUHDWLYH
ZKHQ LW GHVWUR\V WKH SVHXGRDULVWRFUDF\ RI QDPH DQG RI ZHDOWK DQG
HWHUQDOO\JLYHVELUWKWRDQHZDULVWRFUDF\RIPLQGDQGHWKRV
7KH XOWLPDWH SRLQW RI SROLWLFDO GHPRFUDF\ WKHUHIRUH LV VSLULWXDO
GHPRFUDF\LWZDQWVWRFUHDWHHQMR\PHQWIRUWKHPDWHULDOLVWVDQGSRZHU
IRUWKHLGHDOLVWV
7KHOHDGHUVKDOOUHSODFHWKHUXOHUߟWKHQREOHVSLULWVKDOOUHSODFHWKH
QREOH QDPH ߟ WKH ULFK KHDUW VKDOO UHSODFH WKH ULFK SRFNHW 7KDW LV WKH
PHDQLQJRISURJUHVVZKLFKLVFDOOHGGHPRFUDF\
$Q\RWKHUPHDQLQJZRXOGEHFXOWXUDOVXLFLGH
 7KHUHIRUH LW LV QR FRLQFLGHQFH WKDW 3ODWR WKH SURSKHW RI WKH
LQWHOOHFWXDO DULVWRFUDF\ ZDV DW WKH VDPH WLPH WKH IDWKHU RI WKH VRFLDOLVW
HFRQRP\DQGDOVRWKHIDWKHURIWKHLGHDOLVWLFZRUOGYLHZ
)RUERWKDULVWRFUDF\DQGVRFLDOLVPDUHSUDFWLFDOLGHDOLVP
7KH DVFHWLF LGHDOLVP RI WKH 6RXWK PDQLIHVWHG LWVHOI LQ UHOLJLRQ WKH
KHURLFLGHDOLVPRIWKH1RUWKLQWHFKQRORJ\
%HFDXVHQDWXUHLQWKH1RUWKZDVDFKDOOHQJHWRSHRSOH2WKHUWULEHV
VXFFXPEHG WKH (XURSHDQV DFFHSWHG WKH FKDOOHQJH DQG IRXJKW 7KH\
IRXJKW XQWLO WKH\ ZHUH VWURQJ HQRXJK WR VXEGXH WKH HDUWK WKH\ IRXJKW
XQWLO WKH\ IRUFHG WKH YHU\ QDWXUH ZKLFK KDG FKDOOHQJHG WKHP WR VHUYH
WKHP
7KLVILJKWGHPDQGHGKHURLVPDQGEHJRWKHURLVP6RIRU(XURSHWKH
KHUR EHFDPH ZKDW WKH VDLQW ZDV IRU $VLD KHUR ZRUVKLS FRPSOHPHQWHG
WKHZRUVKLSRIVDLQWV
7KHLGHDORIDFWLRQWRRNWKHSODFHRIWKHLGHDORIGHYRWLRQDQGLWZDV
FRQVLGHUHGJUHDWHUWRILJKWIRUDQLGHDOWKDQWRVXIIHU
7KHPHDQLQJRIWKLVKHURLFZRUOGPLVVLRQKDVRQO\EHHQJUDVSHGE\
(XURSH LQ PRGHUQ WLPHV IRU LW LV RQO\ ZLWK PRGHUQ WLPHV WKDW LWV
WHFKQRORJLFDO DJH  WKH OLEHUDWLRQ ZDU DJDLQVW ZLQWHU  EHJLQV 7KLV
WHFKQRORJLFDODJHLVDOVRWKHDJHRIODERU7KHZRUNHULVWKHKHURRIRXU
DJH KLV RSSRVLWH LV QRW WKH FLWL]HQ EXW WKH IUHHORDGHU 7KH JRDO RI WKH
ZRUNHULVߟWRFUHDWHWKDWRIWKHIUHHORDGHUߟWRFRQVXPH
7KHUHIRUH WHFKQRORJ\ LV PRGHUQ KHURLVP DQG WKH ZRUNHU LV D
SUDFWLFDOLGHDOLVW
7KH SROLWLFDO DQG VRFLDO SUREOHP RI WKH WK FHQWXU\ LV FDWFKLQJ XS
ZLWKWKHWHFKQRORJLFDOSURJUHVVRIWKHWKFHQWXU\7KLVFKDOOHQJHRIWKH
WLPHV LV H[FHHGLQJO\ GLIILFXOW EHFDXVHWHFKQRORJ\ FRQWLQXHVGHYHORSLQJ
DWDIDVWHUSDFHWKDQWKHGHYHORSPHQWRIPDQDQGPDQNLQG7KLVGDQJHU
FDQ HLWKHU EH DYHUWHG E\ VORZLQJ WHFKQRORJLFDO SURJUHVV RU E\
DFFHOHUDWLQJ VRFLDO SURJUHVV 2WKHUZLVH KXPDQLW\ ZLOO ORVH LWV EDODQFH
DQGFDSVL]H7KH:RUOG:DUZDVDZDUQLQJ7HFKQRORJ\JLYHVKXPDQLW\
DFKRLFHVXLFLGHRUDJUHHPHQW
7KHGHYHORSPHQWRIWKHZRUOGLQWKHFRPLQJGHFDGHVZLOOEHZLWKRXW
SUHFHGHQW 7KH FXUUHQW LPEDODQFH RI WHFKQRORJLFDO DQG VRFLDO
RUJDQL]DWLRQZLOOHLWKHUOHDGWRGHVWUXFWLYHFDWDVWURSKHVߟRUWRSROLWLFDO
GHYHORSPHQWWKDWTXLFNO\DQGWKRURXJKO\OHDYHVDOOSDVWPRGHOVEHKLQG
DQGRSHQVDQHZSDJHLQKXPDQKLVWRU\
6LQFHWHFKQRORJ\PDNHVQHZSDWKVIRUWKHKXPDQPRPHQWXPDQGIRU
KHURLVP WKH ZDU LV EHJLQQLQJ WR SOD\ LWV KLVWRULFDO UROH LQ KXPDQ
FRQVFLRXVQHVV ,WV VXFFHVVRU LV ZRUN 0DQNLQG ZLOO RUJDQL]H RQH GD\
DQGZUHVWIURPWKHHDUWKHYHU\WKLQJWKDWVKHGHQLHVXVWRGD\$VVRRQDV
WKLV FRQFHSW LV UHDOL]HG HYHU\ ZDU ZLOO EH D FLYLO ZDU DQG HYHU\ NLOO D
PXUGHU7KHDJHRIZDUZLOOWKHQVHHPMXVWDVEDUEDULFDVWRGD\WKHDJH
FDQQLEDOLVP
7KLVGHYHORSPHQWZLOOKDSSHQLIZHEHOLHYHLQLWDQGILJKWIRULWLIZH
DUHQHLWKHUVRVKRUWVLJKWHGDVWRORVHVLJKWRIWKHGHYHORSPHQWߟQRUVR
IDUVLJKWHG DV WR RYHUORRN WKH SUDFWLFDO SDWKV DQG REVWDFOHV WKDW OLH
EHWZHHQXVDQGRXUJRDOVLIZHDUHFOHDUVLJKWHGDQGFOHDUO\NQRZKRZ
WR RYHUFRPH WKH XSFRPLQJ VWUXJJOHV DQG GLIILFXOWLHV ZLWK RXU KHURLF
ZLOO
2QO\WKLVRSWLPLVPRIWKHZLOOFDQFRPSOHWHDQGGHIHDWWKHSHVVLPLVP
RINQRZOHGJH
,QVWHDGRIUHPDLQLQJLQWKHJULSRIWKHRXWGDWHGSUHVHQWDQGGUHDPLQJ
RI EHWWHU RSSRUWXQLWLHV ZH ZDQW WR WDNH DQ DFWLYH SDUW LQ WKH
GHYHORSPHQWRIWKHZRUOGWKURXJKSUDFWLFDOLGHDOLVP
9LHQQD
1RYHPEHU
 12%,/,7<ߟ

,Q PHPRU\ RI P\ IDWKHU
'U +HLQULFK &RXQW &RXGHQKRYH.DOHUJL 
LQ DGPLUDWLRQ DQG JUDWLWXGH
3$5721(

2)585$/$1'85%$10(1

585$/0$1ߟ85%$1,7(

& RXQWU\ DQG FLW\ DUH WKH WZR SROHV RI KXPDQ
H[LVWHQFH &RXQWU\ DQG FLW\ SURGXFH WKHLU VSHFLDO
KXPDQWKHUXUDODQGXUEDQSHUVRQ
5XUDO DQG DQ XUEDQ SHRSOH DUH SV\FKRORJLFDO RSSRVLWHV )DUPHUV RI
GLIIHUHQW DUHDV UHVHPEOH HDFK RWKHU HPRWLRQDOO\ RIWHQ PRUH WKDQ WKH\
UHVHPEOH WKH SHRSOH LQ WKH QHLJKERULQJ FLW\ %HWZHHQ IDUP DQG IDUP
EHWZHHQFLW\DQGFLW\LVVSDFHߟEHWZHHQFLW\DQGIDUPLVWLPH$PRQJ
(XURSHDQ UXUDO SHRSOH OLYH WKH UHSUHVHQWDWLYHV RI HYHU\ DJH IURP WKH
6WRQH$JHWRWKH0LGGOH$JHVZKLOHRQO\WKHPHWURSROLWDQFLWLHVRIWKH
2FFLGHQW ZKLFK SURGXFHG WKH PRVW H[WUHPH XUEDQ W\SH DUH
UHSUHVHQWDWLYH RI PRGHUQ FLYLOL]DWLRQ &HQWXULHV RIWHQ PLOOHQQLD
VHSDUDWHWKHELJFLW\IURPWKHIDUPODQGWKDWVXUURXQGVLW
7KHXUEDQPDQWKLQNVGLIIHUHQWO\MXGJHVGLIIHUHQWO\IHHOVGLIIHUHQWO\
DFWVGLIIHUHQWO\WKDQWKHUXUDOPDQ%LJFLW\OLIHLVDEVWUDFWPHFKDQLFDO
UDWLRQDO ߟ UXUDO OLIH LV FRQFUHWH RUJDQLF LUUDWLRQDO 7KH XUEDQLWH LV
UDWLRQDO VNHSWLFDO FULWLFDO ߟ WKH UXUDO PDQ LV HPRWLRQDO UHOLJLRXV
VXSHUVWLWLRXV
(YHU\WKLQJUXUDOPDQWKLQNVDQGIHHOVIRFXVHVDURXQGQDWXUHKHOLYHV
LQV\PELRVLVZLWKWKHDQLPDOWKHOLYLQJFUHDWXUHRI*RGKHLVRQHZLWK
KLVODQGVFDSHGHSHQGHQWRQZHDWKHUDQGVHDVRQ7KHIRFDOSRLQWRIWKH
XUEDQ VRXO RQ WKH RWKHU KDQG LV VRFLHW\ KH OLYHV LQ V\PELRVLV ZLWK
PDFKLQHV WKH GHDG FUHDWLRQV RI PHQ WKURXJK WKHP WKH XUEDQ PDQ
PDNHV KLPVHOI DV LQGHSHQGHQW DV SRVVLEOH IURP WLPH DQG VSDFHVHDVRQ
DQGFOLPDWH
7KH UXUDO PDQ EHOLHYHV LQ WKH IRUFH RI QDWXUH RYHU PDQ ߟ WKH XUEDQ
PDQEHOLHYHVLQWKHIRUFHRIPDQRYHUQDWXUH7KHUXUDOPDQLVDQDWXUDO
SURGXFWWKHXUEDQPDQDVRFLDOSURGXFWRQHVHHVSXUSRVHPHDVXUHDQG
JRDORIWKHZRUOGLQWKHFRVPRVWKHRWKHULQKXPDQLW\
5XUDO PDQ LV DV FRQVHUYDWLYH DV QDWXUH LWVHOI ߟ XUEDQ PDQ DV
SURJUHVVLYH DV VRFLHW\ $OO SURJUHVV LV EDVHG RQ FLWLHV DQG FLW\ SHRSOH
7KH FLW\ GZHOOHU KLPVHOI LV XVXDOO\ D SURGXFW RI D UHYROXWLRQ ZLWKLQ D
JHQHUDWLRQWKDWEURNHZLWKLWVUXUDOWUDGLWLRQPRYHGWRWKHELJFLW\DQG
VWDUWHGOLYLQJWKHUHRQDQHZEDVLV
7KHFLW\UREVLWVLQKDELWDQWVRIWKHHQMR\PHQWRIQDWXUHߥVEHDXW\DV
FRPSHQVDWLRQ LW RIIHUV WKHP WKH DUWV 7KHDWHU FRQFHUWV JDOOHULHV DUH
VXUURJDWHVIRUWKHHWHUQDODQGFKDQJLQJEHDXW\RIWKHODQGVFDSH$IWHUD
GD\ߥVZRUNIXOORIXJOLQHVVWKHVHDUWLQVWLWXWHVRIIHUXUEDQLWHVEHDXW\LQ
FRQFHQWUDWHG IRUP ,Q WKH FRXQWU\ WKH\ DUH UHGXQGDQW 1DWXUH LV WKH
H[WHQVLYHDUWWKHLQWHQVLYHPDQLIHVWDWLRQRIEHDXW\
7KH UHODWLRQVKLS EHWZHHQ XUEDQ PDQ DQG QDWXUH ZKLFK KH ODFNV LV
UXOHG E\ \HDUQLQJ ZKLOH QDWXUH LV DOZD\V IXOILOOLQJ WKH UXUDO PDQ
7KHUHIRUH XUEDQ PDQ SHUFHLYHV LW DV URPDQWLF UXUDO PDQ DV FODVVLF
6RFLDO &KULVWLDQ  PRUDO LV DQ XUEDQ SKHQRPHQRQ EHFDXVH LW LV D
IXQFWLRQ RI KXPDQ FRH[LVWHQFH RI VRFLHW\ 7KH W\SLFDO FLW\ GZHOOHU
FRPELQHV&KULVWLDQPRUDOLW\ZLWKKLVLUUHOLJLRXVVNHSWLFLVPUDWLRQDOLVWLF
PDWHULDOLVP DQG PHFKDQLFDO DWKHLVP 7KH UHVXOWLQJ ZRUOG YLHZ LV
6RFLDOLVPWKHPRGHUQUHOLJLRQRIWKHPRGHUQFLW\
&KULVWLDQLW\ LV OLWWOH PRUH WKDQ D UHLQWHUSUHWDWLRQ RI SDJDQLVP ZLWK
DOWHUHG P\WKRORJ\ DQG QHZ VXSHUVWLWLRQ IRU WKH UXUDO EDUEDULDQV RI
(XURSHDWUXHUHOLJLRQLVWKHEHOLHILQQDWXUHLQSRZHULQIDWH
8UEDQ DQG UXUDO SHRSOH GR QRW NQRZ HDFK RWKHU WKHUHIRUH WKH\
PLVWUXVW DQG PLVXQGHUVWDQG HDFK RWKHU DQG OLYH LQ YHLOHG RU RSHQ
KRVWLOLW\7KHUHDUHPDQ\FDWFKZRUGVXQGHUZKLFKWKLVEDVLFRSSRVLWLRQ
KLGHV UHG DQG JUHHQ LQWHUQDWLRQDOLVP LQGXVWULDOLVP DQG DJUDULDQLVP
SURJUHVVDQGUHDFWLRQ-XGDLVPDQG$QWL6HPLWLVP
$OOFLWLHVGUDZWKHLUVWUHQJWKIURPWKHFRXQWU\WKHFRXQWU\GUDZVLWV
FXOWXUHIURPWKHFLW\7KHFRXQWU\LVWKHVRLOIURPZKLFKWKHFLWLHVUHQHZ
WKHPVHOYHV WKH VRXUFH WKDW IHHGV WKHP WKH URRW IURP ZKLFK WKH\
IORXULVK&LWLHVJURZDQGGLHWKHFRXQWU\LVHWHUQDO

-81.(5:5,7(5
 7KHJORU\RIWKHUXUDOPDQLVWKHQREOHPDQWKHMXQNHU7KHJORU\RI
WKHXUEDQPDQLVWKHLQWHOOHFWXDOWKHZULWHU
%RWK FRXQWU\ DQG FLW\ KDYH VLUHG WKHLU VSHFLILF QRELOLW\ QREOH ZLOO
YHUVXV QREOH VSLULW QREOH EORRG YHUVXV QREOH PLQG 7KH W\SLFDO MXQNHU
FRPELQHV D PD[LPXP RI FKDUDFWHU ZLWK D PLQLPXP RI LQWHOOHFW ߟ WKH
W\SLFDOZULWHUDPD[LPXPRILQWHOOHFWZLWKDPLQLPXPRIFKDUDFWHU
1RW DOZD\V DQG HYHU\ZKHUH ODFNHG WKH QREOHPDQ LQWHOOHFW RU WKH
LQWHOOHFWXDOFKDUDFWHUDVLQPRGHUQ(QJODQGLQWKHWLPHRIPLQQHVLQJHUV
EORRG QRELOLW\ ZDV DQ RXWVWDQGLQJ FXOWXUDO HOHPHQW LQ *HUPDQ\ ZKLOH
RQ WKH RWKHU KDQG WKH &DWKROLF QRELOLW\ RI WKH -HVXLWV DQG WKH &KLQHVH
QRELOLW\RIWKH0DQGDULQVSURYHGWRKDYHDVPXFKFKDUDFWHUDVLQWHOOHFW
LQWKHLUKH\GD\
7KHJDSEHWZHHQUXUDODQGXUEDQSHRSOHSHDNVLQWKHMXQNHUDQGWKH
ZULWHU7KHMXQNHUߥVW\SLFDORFFXSDWLRQLVRIILFHUWKHW\SLFDORFFXSDWLRQ
RIWKHLQWHOOHFWXDOLVMRXUQDOLVW
7KH MXQNHURIILFHU UHPDLQHG SV\FKRORJLFDOO\ DQG PHQWDOO\ DW WKH
OHYHORINQLJKW+DUGRQKLPVHOIDQGRWKHUVGXWLIXOHQHUJHWLFVWHDGIDVW
FRQVHUYDWLYH DQG QDUURZPLQGHG KH OLYHV LQ D ZRUOG RI G\QDVWLF
PLOLWDULVWLF QDWLRQDO DQG VRFLDO SUHMXGLFHV :LWK D GHHS PLVWUXVW RI
HYHU\WKLQJ PRGHUQ DJDLQVW WKH ELJ FLW\ GHPRFUDF\ VRFLDOLVP
JOREDOLVPKHKDVDGHHSEHOLHILQEORRGW\SHLQKRQRUDQGWKHZRUOG
YLHZ RI KLV IDWKHUV +H GHVSLVHV WKH XUEDQLWHV HVSHFLDOO\ WKH -HZLVK
ZULWHUV
7KHZULWHUUXVKHVDKHDGRIKLVWLPHZLWKRXWSUHMXGLFHKHUHSUHVHQWV
PRGHUQLGHDVLQSROLWLFVDUWVFLHQFH+HLVSURJUHVVLYHVNHSWLFDOZLWW\
YHUVDWLOHPXWDEOHKHLVDHXGDHPRQLVWUDWLRQDOLVWVRFLDOLVWPDWHULDOLVW
+HRYHUHVWLPDWHVWKHPLQGXQGHUHVWLPDWHVWKHERG\DQGFKDUDFWHUDQG
WKHUHIRUHKHGHVSLVHVWKHMXQNHUDVDEDFNZDUGEDUEDULDQ
7KHQDWXUHRIWKHMXQNHULVVWUHQJWKRIZLOOߟWKHQDWXUHRIWKHZULWHU
LV DJLOLW\ RI WKH PLQG -XQNHU DQG ZULWHU DUH ERUQ ULYDOV DQG HQHPLHV
ZKHQ WKH QREOH FODVV UXOHV LQWHOOHFW PXVW \LHOG WR YLROHQFH LQ VXFK
UHDFWLRQDU\WLPHVSROLWLFDOLQIOXHQFHRIWKHLQWHOOHFWXDOVLVVZLWFKHGRII
RUDWOHDVWOLPLWHG:KHQWKHLQWHOOHFWXDOFODVVUXOHVYLROHQFHPXVW\LHOG
WR WKH PLQG GHPRFUDF\ WULXPSKV RYHU IHXGDOLVP VRFLDOLVP RYHU
PLOLWDULVP
 7KH KDWUHG RI WKH DULVWRFUDF\ RI WKH ZLOO DQG WKH DULVWRFUDF\ RI WKH
PLQGLQ*HUPDQ\LVURRWHGRQPLVXQGHUVWDQGLQJ(DFKRQHVHHVRQO\WKH
VKDGRZ\ VLGH RI WKH RWKHUDQG LV EOLQGWR WKHLUYLUWXHV 7KHVRXORI WKH
UXUDO DULVWRFUDW UHPDLQV IRUHYHU KLGGHQ HYHQ IURP KLJKUDQNLQJ
LQWHOOHFWXDOVZKLOHWKHVRXORIWKHXUEDQZULWHUUHPDLQVDOLHQWRDOPRVW
DOO DULVWRFUDWV ,QVWHDG RI OHDUQLQJ IURP HDFK RWKHU D \RXQJ OLHXWHQDQW
ORRNV GRZQ RQ WKH OHDGLQJ PLQGV RI PRGHUQ OLWHUDWXUH ZLWK GLVGDLQ
ZKLOH WKH ZRUVW MRXUQDOLVW IHHOV RQO\ FRQWHPSW IRU RXWVWDQGLQJ RIILFHUV
)LUVW WKURXJK WKLV GRXEOH PLVXQGHUVWDQGLQJ PLOLWDULVW *HUPDQV
XQGHUHVWLPDWHG WKH UHVLVWDQFH RI WKH XUEDQ PDVVHV DJDLQVW WKH ZDU DQG
WKHQ WKH UHYROXWLRQDU\ *HUPDQV XQGHUHVWLPDWHG WKH UHVLVWDQFH RI WKH
UXUDO PDVVHV DJDLQVW WKH UHYROXWLRQ 7KH UXUDO OHDGHUV PLVMXGJHG WKH
SV\FKH RI WKH UXUDO PHQ DQG WKHLU WHQGHQF\ WRZDUG UHDFWLRQLVP VR
*HUPDQ\ILUVWORVWWKHZDUWKHQWKHUHYROXWLRQ
7KLVGLIIHUHQFHEHWZHHQWKHUXUDODQGXUEDQPDQLVWKHIDFWWKDWERWK
W\SHVDUHH[WUHPHVDQGQRWWRWRSRIEORRGDQGPLQGDULVWRFUDF\)RU
WKH KLJKHVW PDQLIHVWDWLRQ RI WKH EORRGDULVWRFUDF\ LV WKH GLVWLQJXLVKHG
JHQWOHPDQ WKDW RI WKH PLQGDULVWRFUDF\ LV WKH JHQLXV 7KHVH WZR
DULVWRFUDWVDUHQRWRQO\FRPSDWLEOHWKH\DUHUHODWHG&DHVDUWKHSHUIHFW
JUDQGVHLJQHXUZDVDOVRWKHPRVWEULOOLDQW5RPDQ*RHWKHWKHSHDNRI
JHQLXVZDVWKHXOWLPDWHJUDQGVHLJQHXURIDOOWKH*HUPDQSRHWV+HUH
DV HYHU\ZKHUH WKH PLGGOH FODVVHV GLYHUJH WKH PRVW ZKLOH WKH XSSHU
FODVVHVDUHLGHQWLFDO
7KHLGHDODULVWRFUDWLVDWWKHVDPHWLPHQRELOLW\RIWKHZLOODQGPLQG
EXWQHLWKHUMXQNHUQRUZULWHU+HFRPELQHVZRUOGYLHZZLWKZLOOSRZHU
MXGJHPHQW ZLWK DFWLRQ PLQG ZLWK FKDUDFWHU ,I VXFK V\QWKHWLF
SHUVRQDOLWLHV GR QRW H[LVW WKH GLYHUJHQW DULVWRFUDWV RI WKH ZLOO DQG WKH
PLQG VKRXOG FRPSOHPHQW HDFK RWKHU LQVWHDG RI ILJKWLQJ HDFK RWKHU ,Q
(J\SW,QGLD&KDOGHDSULHVWVDQGNLQJV LQWHOOHFWXDOVDQGZDUULRUV RQFH
UXOHGWRJHWKHU7KHSULHVW\LHOGHGWRWKHSRZHURIWKHZLOOWKHNLQJVWR
WKHSRZHURIWKHPLQGPLQGVVKRZHGWKHZD\DUPVPDGHWKHZD\

*(17/(0(1ߟ%2+(0,$1

(XURSHߥVEORRGDQGPLQGQRELOLW\FUHDWHGHDFKWKHLUVSHFLILFW\SHRI
SHUVRQ (QJODQGߥV EORRGDULVWRFUDWV FUHDWHG WKH JHQWOHPDQ )UDQFHߥV
PLQGDULVWRFUDWLVWKHERKHPLDQ
*HQWOHPDQ DQG ERKHPLDQ PHHW LQ DQ HIIRUW WR HVFDSH WKH GHVRODWH
XJOLQHVVRIWKHLUERXUJHRLVH[LVWHQFHWKHJHQWOHPDQDFKLHYHVLWWKURXJK
VW\OHWKHERKHPLDQWKURXJKWHPSHUDPHQW7KHJHQWOHPDQJLYHVIRUPWR
IRUPOHVVILIHߟWKHERKHPLDQJLYHVFRORUWRFRORUOHVVOLIH
7KH JHQWOHPDQ EULQJV RUGHU LQWR WKH FKDRV RI UHODWLRQVKLSV ߟ WKH
ERKHPLDQEULQJVIUHHGRP
7KH EHDXW\ LGHDO RI WKH JHQWOHPDQ LV EDVHG RQ IRUP VW\OH DQG
KDUPRQ\ LW LV VWDWLF FODVVLF $SROORQLDQ 7KH EHDXW\ LGHDO RI WKH
ERKHPLDQ LV EDVHG RQ WHPSHUDPHQW IUHHGRP YLWDOLW\ LW LV G\QDPLF
URPDQWLF'LRQ\VLDQ
7KH JHQWOHPDQ LGHDOL]HV DQG VW\OL]HV KLV ZHDOWK ߟ WKH ERKHPLDQ
LGHDOL]HVDQGVW\OL]HVKLVSRYHUW\
7KH JHQWOHPDQ LV VHW RQ WUDGLWLRQ WKH ERKHPLDQ RQ SURWHVW 7KH
HVVHQFHRIWKHJHQWOHPDQLVFRQVHUYDWLYHWKHHVVHQFHRIWKHERKHPLDQLV
UHYROXWLRQDU\7KHPRWKHURIWKHߨJHQWOHPDQLGHDOߩLV(QJODQG(XURSHߥV
PRVW FRQVHUYDWLYH QDWLRQ 7KH FUDGOH RI ߨERKHPLDQLVPߩ LV )UDQFH
(XURSHߥVPRVWUHYROXWLRQDU\QDWLRQ
7KH JHQWOHPDQLGHDO SRLQWV EH\RQG (QJODQG EDFN WR WKH 5RPDQ
VWRLFLVP ߟ WKH ERKHPLDLGHDO SRLQWV EH\RQG )UDQFH EDFN WR WKH *UHHN
DJRUD 7KH 5RPDQ VWDWHVPHQ DUH OLNH WKH JHQWOHPDQW\SH ߟ WKH *UHHN
SKLORVRSKHUV WKH ERKHPLDW\SH &DHVDU DQG 6HQHFD ZHUH JHQWOHPHQ
6RFUDWHVDQG'LRJHQHVZHUHERKHPLDQV
7KHIRFXVRIWKHJHQWOHPDQLVSK\VLFDOSV\FKRORJLFDOߟWKHIRFXVRI
WKHERKHPLDQLVVSLULWXDOWKHJHQWOHPDQPD\EHDIRROWKHERKHPLDQD
FULPLQDO
%RWKLGHDOVDUHKXPDQFU\VWDOOL]DWLRQSKHQRPHQDDVWKHFU\VWDOFDQ
RQO\ IRUP LWVHOI LQ DQ XQVWDEOH HQYLURQPHQW VR GR ERWK RZH WKHLU
H[LVWHQFHWRWKHIUHHGRPVLQ(QJODQGDQG)UDQFH
,Q LPSHULDO *HUPDQ\ WKLV DWPRVSKHUH RI FU\VWDOOL]DWLRQ RI
SHUVRQDOLWLHVZDVPLVVLQJWKHUHIRUHLWFRXOGQRWGHYHORSVXFKDQLGHDO
7KH*HUPDQODFNHGWKHVW\OHRIWKHJHQWOHPDQWKHWHPSHUDPHQWRIWKH
ERKHPLDQDQGWKHJUDFHDQGVPRRWKQHVVRIERWK
 6LQFH WKH *HUPDQ FRXOG QRW ILQG LQ KLV UHDOLW\ DQ\ IRUP RI LGHDO
OLIHVW\OH KH VRXJKW WKH *HUPDQ HVVHQFH LQ SRHWU\ DV SK\VLFDO
SV\FKRORJLFDOLGHDOKHIRXQG\RXQJ6LHJIULHGDVVSLULWXDOLGHDOKHIRXQG
ROG)DXVW
%RWKLGHDOVZHUHURPDQWLFDQGXQWLPHO\LQDGLVWRUWLRQRIUHDOLW\WKH
URPDQWLF6LHJIULHGLGHDOEHFDPHWKH3UXVVLDQRIILFHUWKHOLHXWHQDQWߟWKH
URPDQWLF)DXVWLGHDOEHFDPHWKH*HUPDQVFKRODUWKHSURIHVVRU,QVWHDG
RI RUJDQLF WKH\ ZHUH PHFKDQLFDO LGHDOV WKH RIILFHU UHSUHVHQWV WKH
PHFKDQL]DWLRQRIWKHSV\FKHWKHPHFKDQLFDO6LHJIULHGWKHSURIHVVRUWKH
PHFKDQLFDO)DXVW
:LOKHOPߥV*HUPDQ\ZDVSURXGHURILWVRIILFHUVDQGSURIHVVRUVWKDQRI
DQ\RWKHUFODVV,QWKHVHLWVDZWKHJORU\RIWKHQDWLRQOLNH(QJODQGLQ
LWVSROLWLFDOOHDGHUVDQGOLNHWKH5RPDQQDWLRQVVDZLQWKHLUDUWLVWV
,I WKH *HUPDQ QDWLRQ ZDQWV WR HYROYH LW PXVW UHYLVH LWV LGHDOV LWV
HQHUJ\PXVWJREH\RQGPLOLWDULVWLFRQHVLGHGQHVVDQGZLGHQWRLQFOXGH
SROLWLFDOVRFLDO GLYHUVLW\LWV PLQG PXVW JR EH\RQG WKH SXUHO\VFLHQWLILF
DQGZLGHQWRV\QWKHVL]HWKHߨSRHWWKLQNHUߩ
7KHWKFHQWXU\JDYHWKH*HUPDQSHRSOHWZRPHQRIJUHDWHVWVW\OH
ZKRHPERGLHGWKHVHDVSLUDWLRQVIRUDKLJKHU*HUPDQQHVV%LVPDUFNWKH
KHURRIDFWLRQ*RHWKHWKHKHURRIWKHPLQG
%LVPDUFN UHQHZV GHHSHQV DQG DQLPDWHV WKH FRUQ\ 6LHJIULHG LGHDO ߟ
*RHWKHUHQHZVGHHSHQVDQGDQLPDWHVWKHGXVW\)DXVWLGHDO
%LVPDUFN SRVVHVVHG WKH SRVLWLYH TXDOLWLHV RI WKH *HUPDQ RIILFHU ߟ
ZLWKRXW KLV IODZV *RHWKH SRVVHVVHG WKH TXDOLWLHV RI WKH HGXFDWHG
*HUPDQ ߟ ZLWKRXW KLV IODZV ,Q %LVPDUFN WKH VXSHULRULW\ RI WKH
VWDWHVPDQ RYHUFRPHV WKH OLPLWHG QDWXUH RI WKH RIILFHU ߟ LQ *RHWKH WKH
VXSHULRULW\RIWKHSRHWWKLQNHURYHUFRPHVWKHOLPLWVRIWKHLQWHOOHFWXDOLQ
ERWK WKH RUJDQLF SHUVRQDOLW\ LGHDO RYHUFRPHV WKH PHFKDQLFDO WKH PDQ
RYHUFRPHVWKHSXSSHW
7KURXJKKLVH[HPSODU\SHUVRQDOLW\%LVPDUFNKDVGRQHPRUHIRUWKH
GHYHORSPHQW RI *HUPDQQHVV WKDQ E\ IRXQGLQJ WKH 5HLFK (PSLUH 
WKURXJK KLV ORIW\ 2O\PSLDQ  H[LVWHQFH *RHWKH KDV JLYHQ KLV FRXQWU\
PRUHWKDQZLWKKLV)DXVWEHFDXVH)DXVWLVOLNH*RHW] :HUWKHU 0HLVWHU
DQG7DVVRPHUHO\DIUDJPHQWLQ*RHWKHߥVEHLQJ
 *HUPDQ\VKRXOGKRZHYHUEHFDUHIXOQRWWRPHVVXSDQGSXOOGRZQ
WKHVH WZR LGHDOV E\ PDNLQJWKHP WRR FRPPRQQRW PDNHDVHUJHDQW RI
%LVPDUFNDQGDVFKRROPDVWHURI*RHWKH
*HUPDQ\ FRXOG JURZ DQG KHDO DV D UHVXOW RI WKHVH WZR *HUPDQ
JHQLXVHV LW FRXOG OHDUQ IURP WKHP DFWLYH DQG FRQWHPSODWLYH JUHDWQHVV
SURGXFWLYLW\ DQG ZLVGRP )RU %LVPDUFN DQG *RHWKH DUH WKH WZR IRFDO
SRLQWVDURXQGZKLFKDQHZ*HUPDQOLIHVW\OHFRXOGHPHUJHZKLFKZRXOG
EHHTXDOWR:HVWHUQLGHDOV

,1%5((',1*ߟ&5266%5((',1*

8VXDOO\ WKH UXUDO PDQ LV D SURGXFW RI LQEUHHGLQJ WKH XUEDQ PDQ D
PL[HGEUHHG
7KH SDUHQWV DQG JUDQGSDUHQWV RI D IDUPHU XVXDOO\ FRPH IURP WKH
VDPH VSDUVHO\SRSXODWHG DUHD WKH QREOHPDQ FRPHV IURP WKH VDPH
VSDUVH XSSHU FODVV RI WKH VDPH VSDUVHO\SRSXODWHG DUHD ,Q ERWK FDVHV
WKH DQFHVWRUV DUH UHODWHG WR HDFK RWKHU E\ EORRG DQG DUH WKHUHIRUH
SK\VLFDOO\ SV\FKRORJLFDOO\ DQG PHQWDOO\ VLPLODU $V DUHVXOWWKH\SDVV
RQWRWKHLUFKLOGUHQDQGGHVFHQGDQWVWKHLUFRPPRQWUDLWVWHQGHQFLHVRI
ZLOOSDVVLRQVSUHMXGLFHVDQGLQKLELWLRQVWRDQHYHQJUHDWHUGHJUHH7KH
HVVHQWLDO IHDWXUHV UHVXOWLQJ IURP VXFK LQEUHHGLQJ DUH OR\DOW\ SLHW\
VHQVH RI IDPLO\ DQG FDVWH FRQVLVWHQF\ VWXEERUQQHVV YLJRU FORVH
PLQGHGQHVV PRUH SUHMXGLFHV OHVV REMHFWLYLW\ DQG D QDUURZ KRUL]RQ
+HUHLVDJHQHUDWLRQWKDWLVQRWDYDULDWLRQRIWKHSUHYLRXVEXWVLPSO\D
GXSOLFDWLRQ&RQVHUYDWLRQLQSODFHRIHYROXWLRQ
,Q WKH ELJ FLW\ UDFHV DQG FODVVHV PHHW $V D UXOH XUEDQLWHV DUH
PLVFHJHQDWLRQDO PL[HGUDFH  DQG IURP YDULRXV VRFLDO DQG QDWLRQDO
JURXSV ,Q WKHP WKH FKDUDFWHU WUDLWV SUHMXGLFHV LQKLELWLRQV WHQGHQFLHV
RI ZLOO DQG ZRUOG YLHZV RI WKHLU SDUHQWV DQG JUDQGSDUHQWV DUH
HOLPLQDWHG RU DW OHDVW ZHDNHQHG 7KH UHVXOW LV WKDW PL[HGEUHHGV RIWHQ
VXSSOHPHQWWKHLUODFNRIFKDUDFWHUODFNRILQKLELWLRQVZHDNQHVVRIZLOO
LQFRQVLVWHQF\LPSLHW\DQGGLVOR\DOW\ZLWKREMHFWLYLW\YHUVDWLOLW\PHQWDO
UHVWOHVVQHVV IUHHGRP IURP SUHMXGLFHV DQG D EURDGHU KRUL]RQ 0L[HG
EUHHGV DUH DOZD\V GLIIHUHQW IURP WKHLU SDUHQWV DQG JUDQGSDUHQWV HDFK
JHQHUDWLRQLVDYDULDWLRQRIWKHSUHYLRXVRQHHLWKHULQWHUPVRIHYROXWLRQ
RUGHJHQHUDWLRQ
 7KHLQEUHGPDQLVDOZD\VDRQHVRXOSHUVRQߟWKHPL[HGEUHHGPDQD
PXOWLVRXOSHUVRQ,QHDFKLQGLYLGXDOKLVDQFHVWRUVOLYHRQDVHOHPHQWV
RIKLVVRXOLIWKH\UHVHPEOHHDFKRWKHUKLVVRXOLVXQLIRUPLIWKH\DUH
GLYHUVHWKHPDQLVGLYHUVHFRPSOLFDWHGGLVWLQFW
7KH VL]H RI D PLQG OLHV LQ LWV H[WHQVLYHQHVV WKDW LV LQ LWV DELOLW\ WR
JUDVSDQGWRHPEUDFHHYHU\WKLQJWKHVL]HRIDFKDUDFWHUGHSHQGVRQLWV
GHSWK WKDW LV LQ LWV DELOLW\ WR ZLOO LQWHQWO\ DQG VLQJOHPLQGHGO\ ,Q D
FHUWDLQVHQVHZLVGRPDQGUHVWOHVVQHVVDUHFRQWUDGLFWRU\
7KH PRUH SURQRXQFHG WKH DELOLW\ DQG WHQGHQF\ RI D SHUVRQ LV WR
ZLVHO\ VHH WKLQJV IURP DOO VLGHV DQG ZLWKRXW SUHMXGLFH ߟ WKH ZHDNHU
XVXDOO\KLVZLOOWRDFWLPSXOVLYHO\DQGELDVHGEHFDXVHHYHU\PRWLYHLV
TXHVWLRQHG E\ D FRXQWHUPRWLYH HYHU\ EHOLHI E\ VNHSWLFLVP DQG HYHU\
DFWLRQ E\ WKH XQGHUVWDQGLQJ RI LWV FRVPLF LQVLJQLILFDQFH 2QO\ WKH
ELDVHG VLQJOHPLQGHG PDQ FDQ EH HIIHFWLYH %XW WKHUH LV QRW RQO\ DQ
XQFRQVFLRXV QD±YH QDUURZPLQGHGQHVV EXW DOVR D FRQVFLRXV KHURLF
QDUURZPLQGHGQHVV 7KH KHURLF VLQJOHPLQGHG PDQ ߟ DQG WR WKLV W\SH
EHORQJDOOWUXO\JUHDWPHQRIDFWLRQߟIURPWLPHWRWLPHVZLWFKHVRIIDOO
WKHVLGHVRIKLVEHLQJH[FHSWWKHRQHUHTXLUHGIRUKLVDFWLRQ+HFDQEH
REMHFWLYHFULWLFDOVNHSWLFDODQGPLQGIXOEHIRUHRUDIWHUWKHDFWLRQEXW
KHLVVXEMHFWLYHIDLWKIXOQDUURZPLQGHGDQGXQIDLUGXULQJWKHDFWLRQ
:LVGRPLQKLELWVDFWLRQߟDFWLRQGHQLHVZLVGRP7KHVWURQJHVWZLOOLV
LQHIIHFWLYHLILWKDVQRGLUHFWLRQHYHQDZHDNZLOOWULJJHUVWKHVWURQJHVW
HIIHFWLILWLVIRFXVHG
7KHUH LV QR OLIH RI DFWLRQ ZLWKRXW ZURQJGRLQJ HUURU JXLOW ZKR LV
DIUDLGRIDQLPRVLW\VWD\VLQWKHUHDOPRIWKRXJKWWUDQTXLOLW\SDVVLYLW\
7UXWKIXOSHRSOHDUHDOZD\VVLOHQWEHFDXVHHYHU\DVVHUWLRQLVLQDFHUWDLQ
VHQVH D OLH D VLQ SXUHKHDUWHG SHRSOH DUH DOZD\V LQDFWLYH EHFDXVH
HYHU\DFWLRQLVLQDVHQVHZURQJ%XWLWLVEUDYHWRVSHDNDWWKHULVNRI
O\LQJWRDFWDWWKHULVNRIZURQJGRLQJ
,QEUHHGLQJ VWUHQJWKHQV WKH FKDUDFWHU EXW ZHDNHQV WKH PLQG
0LVFHJHQDWLRQ ZHDNHQV WKH FKDUDFWHU EXW VWUHQJWKHQV WKH PLQG :KHQ
LQEUHHGLQJ DQG UDFH PL[LQJ DUH IDYRUDEOH WKH\ UHVXOW LQ WKH KLJKHVW
KXPDQ W\SH FRPELQLQJ WKH VWURQJHVW FKDUDFWHU ZLWK WKH VKDUSHVW RI
PLQGV:KHUHLQEUHHGLQJDQGUDFHPL[LQJDUHXQIDYRUDEOHWKH\UHVXOWLQ
DGHJHQHUDWHW\SHZLWKZHDNFKDUDFWHUDQGGXOOPLQG
 7KHPDQRIWKHIXWXUHZLOOEHDPL[HGEUHHG7RGD\ߥVUDFHVDQGFDVWHV
ZLOO IDOO YLFWLP WR WKH LQFUHDVHG RYHUFRPLQJ RI VSDFH WLPH DQG
SUHMXGLFH7KH(XUDVLDQ1HJURLGUDFHRIWKHIXWXUHVLPLODULQLWVIHDWXUHV
WR WKH DQFLHQW (J\SWLDQV ZLOO UHSODFH WKH GLYHUVLW\ RI QDWLRQV ZLWK D
GLYHUVLW\ RI ߨSHUVRQDOLWLHVߩ $FFRUGLQJ WR KHUHGLW\ ODZV YDULHW\ RI WKH
GHVFHQGDQWVJURZVRXWRIWKHYDULHW\RIWKHDQFHVWRUVDQGXQLIRUPLW\RI
GHVFHQGDQWV RXW RI XQLIRUPLW\ RI WKH DQFHVWRUV ,Q VLQJOHUDFH IDPLOLHV
RQHFKLOGUHVHPEOHVWKHRWKHUEHFDXVHDOOUHSUHVHQWRQHFRPPRQIDPLO\
W\SH,QPL[HGUDFHIDPLOLHVWKHFKLOGUHQORRNGLIIHUHQWIURPHDFKRWKHU
HDFK IRUPV D QHZ YDULDWLRQ RI WKH GLYHUVH SDUHQWDO DQG DQFHVWUDO
HOHPHQWV
,QEUHHGLQJ SURGXFHV D FKDUDFWHULVWLF W\SH ߟ UDFH PL[LQJ SURGXFHV
RULJLQDOSHUVRQDOLWLHV
7KHSUHGHFHVVRURIWKHSODQHWDU\UDFHRIWKHIXWXUHLQPRGHUQ(XURSH
LVWKH5XVVLDQDVD6ODYLF7DWDULDQDQG)LQQLVKPL[HGEUHHGEHFDXVH
KHDPRQJDOO(XURSHDQQDWLRQDOVKDVWKHOHDVWDPRXQWRIDQ\UDFHDQG
KH LV WKH W\SLFDO PXOWLVRXO SHUVRQ ZLWK D ZLGH ULFK DOOHQFRPSDVVLQJ
VRXO
+LVVWURQJHVWRSSRVLWHLVWKHLVRODWHG%ULWWKHKLJKO\LQEUHGRQHVRXO
SHUVRQZKRVHVWUHQJWKOLHVLQFKDUDFWHUZLOODQGLQWKHW\SLFDO0RGHUQ
(XURSH RZHV WR KLP WKH PRVW UHVHUYHG PRVW FRPSOHWH W\SH WKH
JHQWOHPDQ

+($7+(1$1'&+5,67,$10(17$/,7<

7ZR W\SHV RI VRXOV FRPSHWH IRU ZRUOG GRPLQDWLRQ SDJDQLVP DQG
&KULVWLDQLW\:LWKWKHGHQRPLQDWLRQVWKDWFDUU\WKHVHQDPHVWKHVHVRXOV
KDYH RQO\ VXSHUILFLDO UHODWLRQVKLSV ZLWK WKH GHQRPLQDWLRQV WKDW FDUU\
WKHVHQDPHV,IWKHHPSKDVLVLVVKLIWHGIURPWKHGRJPDWLFWRWKHHWKLFDO
DQGIURPP\WKRORJLFDOWRSV\FKRORJLFDO%XGGKLVPLVWUDQVIRUPHGLQWR
8OWUD&KULVWLDQLW\ ZKHUHDV ߨ$PHULFDQLVPߩ DSSHDUV DV PRGHUQL]HG
SDJDQLVP7KH2ULHQWLVWKHPDLQEHDUHURI&KULVWLDQWKH2FFLGHQWWKH
PDLQEHDUHURISDJDQPHQWDOLW\WKH&KLQHVHSDJDQVDUHEHWWHU&KULVWLDQV
WKDQWKH&KULVWLDQ*HUPDQV
3DJDQLVP SODFHV HQHUJ\ &KULVWLDQLW\ ORYH DW WKH WRS RI WKH HWKLFDO
VFDOH 7KH &KULVWLDQ LGHDO LV WKH ORYLQJ VDLQW WKH SDJDQ LGHDO WKH
YLFWRULRXV KHUR &KULVWLDQLW\ ZDQWV WR WUDQVIRUP WKH KRPR IHUXV LQWR D
KRPRGRPHVWLFXVDQGWKHSUHGDWRUKXPDQLQWRWKHSHWKXPDQZKHUHDV
SDJDQLVPZDQWVWRPDNHPDQߨVXSHUKXPDQߩ&KULVWLDQLW\ZDQWVWRWDPH
DOLRQWREHDKRXVHFDWSDJDQLVPWRUDLVHDFDWWREHDWLJHU
7KH PDLQ KHUDOG RI PRGHUQ &KULVWLDQLW\ ZDV 7ROVWRL WKH PDLQ
SUHDFKHURIPRGHUQSDJDQLVP1LHW]VFKH
7KH ROG *HUPDQLF UHOLJLRQ ZDV SXUH SDJDQLVP ,W OLYHG RQ XQGHU D
&KULVWLDQ PDVN ,Q WKH 0LGGOH $JHV DV FKLYDOU\ LQ PRGHUQ WLPHV DV
LPSHULDOLVW DQG PLOLWDULVWLF LGHRORJ\ 2IILFHUV MXQNHUV FRORQLVWV DQG
FDSWDLQV RI LQGXVWU\ DUH WKH OHDGLQJ UHSUHVHQWDWLYHV RI PRGHUQGD\
SDJDQLVP 'ULYH EUDYHU\ JUHDWQHVV IUHHGRP SRZHU IDPH DQG KRQRU
WKHVH DUH WKH LGHDOV RI SDJDQLVP ZKHUHDV ORYH JHQWOHQHVV KXPLOLW\
FRPSDVVLRQ DQG VHOIGHQLDO DUH &KULVWLDQ LGHDOV 7KH DQWLWKHVLV
SDJDQLVP ߟ &KULVWLDQLW\ GRHV QRW FRLQFLGH ZLWK WKH DQWLWKHVLV UXUDO ߟ
XUEDQ QRU ZLWK LQEUHHGLQJ ߟ UDFH PL[LQJ %XW GRXEWOHVV UXUDO
EDUEDULDQLVP DQG LQEUHHGLQJ IDYRU WKH GHYHORSPHQW RI D SDJDQ
FLYLOL]DWLRQDQGUDFHPL[LQJWKHGHYHORSPHQWRID&KULVWLDQPHQWDOLW\
*HQHUDOO\SDJDQLQGLYLGXDOLVPLVRQO\SRVVLEOHLQVSDUVHO\SRSXODWHG
SDUWV RI WKH HDUWK ZKHUH WKH LQGLYLGXDO FDQ IORXULVK DQG XQIROG
UHFNOHVVO\ ZLWKRXW LPPHGLDWHO\ DQWDJRQL]LQJ KLV IHOORZ KXPDQV ,Q
RYHUSRSXODWHGDUHDVZKHUHSHRSOHOLYHLQFORVHSUR[LPLW\WRHDFKRWKHU
WKH VRFLDO SULQFLSDO RI PXWXDO VXSSRUW PXVW FRPSOHPHQW DQG LQ SDUW
VXSHUVHGHWKHLQGLYLGXDOVWUXJJOHIRUVXUYLYDO
&KULVWLDQLW\DQGVRFLDOLVPDUHFRVPRSROLWDQSURGXFWV&KULVWLDQLW\DV
DZRUOGUHOLJLRQWRRNLWVVWDUWLQJSRLQWLQWKHGLYHUVHFRVPRSROLWDQFLW\
RI 5RPH VRFLDOLVP IURP WKH PXOWLQDWLRQDO LQGXVWULDO FLWLHV RI WKH
RFFLGHQW %RWK PDQLIHVWDWLRQV RI &KULVWLDQ PHQWDOLW\ DUH EDVHG RQ
LQWHUQDWLRQDOLVP7KHUHVLVWDQFHWR&KULVWLDQLW\HPDQDWHGIURPWKHUXUDO
SRSXODWLRQV SDJDQV MXVWDVWRGD\WKHUXUDOSRSXODWLRQLVWKHVWURQJHVW
UHVLVWDQFHWRWKHUHDOL]DWLRQRIDVRFLDOLVWZD\RIOLYLQJ
6SDUVHO\SRSXODWHGQRUWKHUQDUHDVZHUHDOZD\VWKHFHQWHUVRISDJDQ
ZLOOSRZHUDQGGHQVHO\SRSXODWHGVRXWKHUQDUHDVZHUHVLWHVRI&KULVWLDQ
VHQWLPHQW :KHUH WRGD\ WKHUH LV WDON RI WKH GLIIHUHQFH EHWZHHQ (DVWHUQ
DQG:HVWHUQVSLULWXDOLW\LWXVXDOO\PHDQVQRWKLQJHOVHEXWWKHGLIIHUHQFH
EHWZHHQ WKH SHRSOH RI WKH VRXWK DQG WKH QRUWK 7KH -DSDQHVH DV WKH
QRUWKHUQPRVW 2ULHQWDO LV RIWHQ PRUH ߨ2FFLGHQWDOߩ ZKLOH WKH PHQWDOLW\
RI 6RXWKHUQ ,WDOLDQV DQG 6RXWK $PHULFDQV LV PRUH ߨ2ULHQWDOߩ )RU WKH
VWDWHRIWKHVRXOWKHODWLWXGHVHHPVWREHPRUHGHFLVLYHWKDQWKHGHJUHH
RIORQJLWXGH
1RW RQO\ WKH JHRJUDSKLFDO ORFDWLRQ EXW WKH KLVWRULFDO GHYHORSPHQW
KDVDGHWHUPLQLQJLQIOXHQFHRQWKHVRXORIDQDWLRQ7KH&KLQHVHDVZHOO
DV WKH -HZV IHHO PRUH &KULVWLDQV WKDQ WKH *HUPDQLF QDWLRQV EHFDXVH
WKHLUFXOWXUHVDUHROGHU*HUPDQLFSHRSOHDUHFORVHULQWLPHWRSULPLWLYH
PDQWKDQWKH&KLQHVHRUWKH-HZVWKHVHWZRDQFLHQWFLYLOL]DWLRQVZHUH
DEOHWRHPDQFLSDWHWKHPVHOYHVPRUHWKRURXJKO\IURPWKHSDJDQQDWXUDO
ZD\RIOLIHEHFDXVHWKH\KDGDWOHDVWWKUHHWKRXVDQG\HDUVORQJHUWRGR
VR3DJDQLVPLVDV\PSWRPRIFXOWXUDO\RXWK&KULVWLDQLW\DV\PSWRPRI
FXOWXUDOPDJH
7KUHH QDWLRQV *UHHNV 5RPDQV DQG -HZV KDYH FRQTXHUHGHDFKRQH
LQ KLV RZQ ZD\ WKH DQFLHQW FXOWXUDO ZRUOG )LUVW WKH HVWKHWLF
SKLORVRSKLFDO*UHHNVLQ+HOOHQLVPWKHQSUDFWLFDOSROLWLFDO5RPDQVLQ
WKH5RPDQHPSLUHDQGHWKLFDOUHOLJLRXV-HZVLQ&KULVWLDQLW\
&KULVWLDQLW\ PDGH HWKLFDO E\ WKH -HZLVK (VVHQHV -RKQ  DQG
LQWHOOHFWXDO E\ -HZLVK $OH[DQGULDQV 3KLOR ZDV UHFRQVWUXFWHG-XGDLVP
$VIDUDV(XURSHLV&KULVWLDQLWLV LQWKHHWKLFDOVSLULWXDOVHQVH -HZLVK
DV IDU DV (XURSH LV PRUDO LW LV -HZLVK $OPRVW WKH ZKROH RI (XURSHDQ
HWKLFV LV URRWHG LQ -XGDLVP $OO SUHFXUVRUV RI UHOLJLRXV RU LUUHOLJLRXV
&KULVWLDQPRUDOLW\IURP$XJXVWLQHWR5RXVVHDX.DQWDQG7ROVWR\ZHUH
-HZVE\FKRLFHLQDVSLULWXDOZD\1LHW]VFKHLVWKHRQO\QRQ-HZLVKWKH
RQO\ SDJDQ HWKLFLVW LQ (XURSH 7KH PRVW SURPLQHQW DQG FRQILGHQW
UHSUHVHQWDWLYHVRI&KULVWLDQLGHDVWKDWLQWKHLUPRGHUQUHELUWKDUHFDOOHG
SDFLILVPDQGVRFLDOLVPDUH-HZV
,Q WKH (DVW WKH &KLQHVH DUH WKH HWKLFDO QDWLRQ SDU H[FHOOHQFH DV
RSSRVHG WR WKH HVWKHWLFKHURLF -DSDQHVH DQG WKH UHOLJLRXVVSHFXODWLYH
,QGLDQV  LQ WKH :HVW LW LV WKH -HZV *RG ZDV KHDG RI VWDWH RI WKH ROG
-HZVWKHLUPRUDOODZZDVFLYLOFRGHVLQZDVDFULPH
-XGDLVPKDVUHPDLQHGOR\DOWRWKHWKHRFUDWLFLGHDRILGHQWLILFDWLRQRI
SROLWLFVZLWKHWKLFVWKURXJKRXWWKHPLOOHQQLD&KULVWLDQLW\DQGVRFLDOLVP
DUHERWKDWWHPSWVWRHVWDEOLVKD.LQJGRPRI*RG7ZRPLOOHQQLDDJRWKH
HDUO\&KULVWLDQVQRWWKH3KDULVHHVDQG6DGGXFHHVLQKHULWHGDQGUHYLYHG
WKH WUDGLWLRQV RI 0RVHV WRGD\ LW LV QHLWKHU WKH =LRQLVWV QRU WKH
&KULVWLDQV EXW WKH -HZLVK OHDGHUV RI VRFLDOLVP IRU WKH\ DOVR ZDQW WR
HUDGLFDWHZLWKJUHDWVHOIGHQLDOWKHRULJLQDOVLQRIFDSLWDOLVPDQGIUHH
KXPDQLW\ RI LQMXVWLFH YLROHQFH DQG VODYHU\ DQG WUDQVIRUP WKH DWRQHG
ZRUOGLQWRDQHDUWKO\SDUDGLVH
7R WKHVH -HZLVK SURSKHWV ZKR DUH SUHSDULQJ D QHZ ZRUOG HSRFK
HWKLFV DUH SULPDU\ LQ DOO WKLQJV SROLWLFV UHOLJLRQ SKLORVRSK\ DQG DUW
)URP 0RVHV WR 2WWR :HLQLQJHU HWKLFV ZDV WKH PDLQ LVVXH LQ -HZLVK
SKLORVRSK\,QWKLVHWKLFDODWWLWXGHWRZDUGWKHZRUOGOLHVWKHURRWRIWKH
XQLTXHJUHDWQHVVRIWKH-HZLVKSHRSOHߟDQGDWWKHVDPHWLPHWKHGDQJHU
WKDW -HZV ZKR ORVH WKHLU IDLWK LQ HWKLFV WR IDOO LQWR F\QLFDO HJRLVP
ZKHUHDV RWKHUV HYHQ DIWHU ORVV RI WKHLU HWKLFV VWLOO UHWDLQ D ZHDOWK RI
NQLJKWO\YDOXHVDQGSUHMXGLFHV PDQRIKRQRUJHQWOHPDQFDYDOLHUHWF
WKDWVDIHJXDUGWKHPIURPDIDOOLQWRYDOXHFKDRV
:KDWVHSDUDWHVWKH-HZVIURPWKHDYHUDJHXUEDQFLWL]HQLVPDLQO\WKDW
WKH\ DUH LQEUHG SHRSOH 6WUHQJWK RI FKDUDFWHU FRPELQHG ZLWK VKDUS
LQWHOOHFWSUHGHVWLQHVWKHPRVWH[FHOOHQWVSHFLPHQRIWKH-HZVWREHFRPH
OHDGHUV RI KXPDQLW\ HLWKHU IDOVH RU UHDO VSLULWXDO DULVWRFUDWV DQG
SURWDJRQLVWVRIFDSLWDOLVPRUUHYROXWLRQ
b
3$577:2

&5,6,62)12%,/,7<

0,1'58/(,167($'2)6:25'58/(

2 XU GHPRFUDWLF DJH LV D PLVHUDEOH LQWHUOXGH EHWZHHQ

WZRJUHDWDULVWRFUDWLFHUDVWKHIHXGDODULVWRFUDF\RI
WKH VZRUG DQG WKH VRFLDO DULVWRFUDF\ RI WKH PLQG
)HXGDO DULVWRFUDF\ LV LQ GHFOLQH LQWHOOHFWXDO DULVWRFUDF\ LV RQ WKH ULVH
7KHLQWHULPLVFDOOHGGHPRFUDF\EXWLVUXOHGE\WKHSVHXGRDULVWRFUDF\
RIPRQH\
,Q WKH 0LGGOH $JHV WKH UXUDO NQLJKW UXOHG RYHU WKH XUEDQ FLWL]HQ LQ
(XURSH SDJDQ PHQWDOLW\ RYHU &KULVWLDQ DQG EORRG QRELOLW\ RYHU PLQG
QRELOLW\7KHNQLJKWߥVVXSHULRULW\RYHUWKHFLWL]HQZDVEDVHGRQVWUHQJWK
RIERG\DQGFKDUDFWHUSRZHUDQGFRXUDJH
7ZR LQYHQWLRQV FRQTXHUHG 0LGGOH $JHV RSHQLQJ WKH QHZ HUD WKH
LQYHQWLRQ RI JXQSRZGHU PHDQW WKH HQG RI NQLJKWO\ UXOH DQG WKH
LQYHQWLRQ RI WKH SULQWLQJ SUHVV WKH VWDUW RI LQWHOOHFWXDO UXOH :LWK WKH
LQWURGXFWLRQ RI ILUHDUPV VWUHQJWK DQG FRXUDJH ORVW WKHLU GHILQLQJ
LPSRUWDQFHLQWKHVWUXJJOHIRUVXUYLYDOPLQGLQWKHVWUXJJOHIRUSRZHU
DQGOLEHUW\EHFDPHWKHZHDSRQRIFKRLFH
7KHSULQWLQJSUHVVJDYHWKHPLQGSRZHURIXQOLPLWHGVFRSHZULWLQJ
PDQNLQGPRYHGLQWRWKHFHQWHURIDUHDGLQJKXPDQLW\DQGWKXVHOHYDWHG
WKH ZULWHU WR LQWHOOHFWXDO OHDGHU RI WKH PDVVHV *XWHQEHUJ JDYH WKH
IHDWKHUWKHSRZHUWKDW *HRUJ 6FKZDU]KDGWDNHQIURPWKHVZRUG:LWK
WKHKHOSRISULQWLQJLQN/XWKHUKDVFRQTXHUHGDJUHDWHUHPSLUHWKDQDOO
*HUPDQHPSHURUV
,Q WKH HSRFK RI HQOLJKWHQHG GHVSRWLVP UXOHUV DQG VWDWHVPHQ REH\HG
WKH LGHDV WKDW FDPH IURP WKLQNHUV 7KH DXWKRUV RI WKDW WLPH IRUPHG DQ
LQWHOOHFWXDO DULVWRFUDF\ RI (XURSH 7KH YLFWRU\ RI DEVROXWLVP RYHU
IHXGDOLVPPHDQWWKHILUVWYLFWRU\RIWKHFLW\RYHUWKHUXUDOFRXQWU\DQGDW
WKHVDPHWLPHWKHILUVWVWDJHLQWKHYLFWRU\UXQRIPLQGQRELOLW\WKHIDOO
RI WKH VZRUG QRELOLW\ ,QVWHDG RI WKH PHGLHYDO GLFWDWRUVKLS RI FRXQWU\
RYHUFLW\FDPHWKHPRGHUQGLFWDWRUVKLSRIFLW\RYHUFRXQWU\
:LWKWKH)UHQFKUHYROXWLRQZKLFKHQGHGWKHSULYLOHJHVRIWKHEORRG
QRELOLW\ WKH VHFRQG HSRFK RI WKH LQWHOOHFWXDO HPDQFLSDWLRQ EHJDQ
'HPRFUDF\ LV EDVHG RQ WKH RSWLPLVWLF SUHPLVH WKDW D QRELOLW\ RI PLQG
FRXOGEHUHFRJQL]HGDQGHOHFWHGE\SRSXODUPDMRULW\
1RZZHDUHDWWKHWKUHVKROGRIWKHWKLUGHSRFKRIWKHPRGHUQDJHRI
VRFLDOLVP,WWRRUHOLHVRQWKHXUEDQFODVVRILQGXVWULDOZRUNHUVOHGE\
WKHDULVWRFUDF\RIUHYROXWLRQDU\DXWKRUV
7KHLQIOXHQFHRIWKHEORRGQRELOLW\LVGHFOLQLQJDQGWKHLQIOXHQFHRI
WKHLQWHOOHFWXDOQRELOLW\LVJURZLQJ
7KLV GHYHORSPHQW DQG WKH FKDRV RI PRGHUQ SROLWLFV ZLOO RQO\ HQG
ZKHQ DQ LQWHOOHFWXDO DULVWRFUDF\ VHL]HV WKH SRZHU UHVRXUFHV RI VRFLHW\
DPPXQLWLRQJROGDQGLQNDQGXVHVWKHPIRUWKHEHQHILWRIHYHU\RQH
$ GHFLVLYH VWHS WRZDUGV WKLV JRDO LV 5XVVLDQ %ROVKHYLVP ZKHUH D
VPDOO JURXS RI FRPPXQLVW LQWHOOHFWXDO DULVWRFUDWLF UXOHUV JRYHUQV D
QDWLRQ DQG GHOLEHUDWHO\ EUHDNV ZLWK WKH SOXWRFUDWLF GHPRFUDF\ WKDW
GRPLQDWHVWKHUHVWRIWKHZRUOGWRGD\
7KHVWUXJJOHEHWZHHQFDSLWDOLVPDQGFRPPXQLVPIRUWKHLQKHULWDQFH
RIWKHGHIHDWHGEORRGQRELOLW\LVDFLYLOZDUEHWZHHQWKHYLFWRULRXVPLQG
QRELOLW\ D ZDU EHWZHHQ LQGLYLGXDOLVP DQG VRFLDOLVP HJRLVP DQG
DOWUXLVP SDJDQ DQG &KULVWLDQ VSLULW 7KH JHQHUDO VWDII RI ERWK SDUWLHV
UHFUXLWHG IURP WKH PHQWDO UXOLQJ FODVV RI (XURSH WKH -HZV &DSLWDOLVP
DQGFRPPXQLVPDUHERWKUDWLRQDOERWKPHFKDQLFDOERWKDEVWUDFWERWK
XUEDQ7KHQRELOLW\RIWKHVZRUGKDVILQDOO\RXW7KHHIIHFWRIWKHPLQG
SRZHURIWKHPLQGEHOLHIWKHLQPLQGDQGKRSHLQWKHPLQGJURZVDQG
ZLWKLWDQHZQRELOLW\

'$:12)7+(12%,/,7<

,QWKHFRXUVHRIPRGHUQWLPHVWKHQRELOLW\RIEORRGZDVSRLVRQHGE\
WKHFRXUW\DUGDWPRVSKHUHWKHQRELOLW\RIPLQGE\FDSLWDOLVP
6LQFH WKH HQG RI WKH HUD RI NQLJKWV KLJK QRELOLW\ RI FRQWLQHQWDO
(XURSH ZLWK VPDOO H[FHSWLRQV LV LQ D VWDWH RI SURJUHVVLYH GHFDGHQFH
7KURXJKXUEDQL]DWLRQLWKDVORVWLWVSK\VLFDODQGPHQWDODGYDQWDJH
$WWKHWLPHRIIHXGDOLVPEORRGQRELOLW\ZDVFDOOHGWRSURWHFWLWVODQG
DJDLQVW DWWDFNV E\ WKH HQHP\ DQG RYHUWKURZLQJ RI WKHLU UXOHU 7KH
QREOHPDQ ZDV IUHH DQG FRQILGHQW DURXQG VXERUGLQDWHV HTXDOV DQG
KLJKHU UDQNLQJ OLNH D NLQJ RQ KLV HVWDWH KLV SHUVRQDOLW\ ZDV DEOH WR
XQIROGDFFRUGLQJWRNQLJKWO\SULQFLSOHV
$EVROXWLVP FKDQJHG WKLV VLWXDWLRQ WKH UHVLVWLQJ QRELOLW\ ZKR ZDV
IUHHSURXGDQGEUDYHLQVLVWHGRQWKHLUKLVWRULFDOULJKWVDQGZHUHIRUWKH
PRVWSDUWHUDGLFDWHGWKHUHVWZDVSXOOHGWRWKHNLQJߥVFRXUWDQGIRUFHG
LQWRUHVSOHQGHQWVHUYLWXGH7KLVFRXUWQRELOLW\ZDVXQIUHHDQGGHSHQGHQW
RQ WKH ZKLPV RI WKH UXOHU DQG KLV FDEDO VR KH ORVW KLV EHVW DWWULEXWHV
FKDUDFWHUIUHHGRPSULGHOHDGHUVKLS,QRUGHUWREUHDNWKHFKDUDFWHUDQG
WKXV WKH UHVLVWDQFH RI WKH )UHQFK QRELOLW\ /RXLV ;,9 OXUHG WKHP WR
9HUVDLOOHV WKH JUHDW UHYROXWLRQ ZDV UHVHUYHG IRU WKH FRPSOHWLRQ RI KLV
ZRUN LW WRRN DZD\ WKH UHPDLQLQJ ULJKWV RI WKH QRELOLW\ ZKR KDG
DEDQGRQHGDQGORVWWKHLUDVVHWV2QO\QDWLRQVLQ(XURSHUHWDLQHGDQREOH
OHDGHU ZKHUH WKH QRELOLW\  WUXH WR WKHLU NQLJKWO\ PLVVLRQ ߟ ZHUH WKH
OHDGHUV DQG ILJKWHUV RI WKH QDWLRQDO RSSRVLWLRQ DJDLQVW PRQDUFKLF
GHVSRWLVPDQGVXSUHPDF\(QJODQG+XQJDU\3RODQG,WDO\
6LQFHWKHWUDQVIRUPDWLRQRI(XURSHDQFXOWXUHIURPDNQLJKWO\UXUDOWR
D FLYLFXUEDQ WKH EORRG QRELOLW\ IHOO EHKLQG RUGLQDU\ FLWL]HQV LQ
LQWHOOHFWXDOWHUPV:DUSROLWLFVDQGWKHPDQDJHPHQWRIKLVHVWDWHVZHUH
VR GHPDQGLQJ WKDW WKHLU PHQWDO DELOLWLHV DQG LQWHUHVWV ZHUH RIWHQ
VWXQWHG
7KHVHKLVWRULFDOFDXVHVRIDQHZGDZQRIQRELOLW\ZHUHFRPSRXQGHG
E\SK\VLRORJLFDORQHV,QVWHDGRIWKHKDUGPHGLHYDOPLOLWDU\VHUYLFHWKH
QHZ HUD EURXJKW QRELOLW\ PRVWO\ XQHPSOR\HG OLIH RI OX[XU\ WKURXJK
LQKHULWHG ZHDOWK QRELOLW\ ZHQW IURP EHLQJ WKH PRVW HQGDQJHUHG VWDWXV
WR WKH PRVW VHFXUH LQ DGGLWLRQ WKHUH ZHUH GHJHQHUDWLYH LQIOXHQFHV RI
H[DJJHUDWHG LQEUHHGLQJ ZKLFK WKH (QJOLVK QRELOLW\ DYRLGHG E\
IUHTXHQWO\ EUHHGLQJ ZLWK FRPPRQ FLWL]HQV 7KURXJK WKH FRPELQHG
HIIHFWVRIWKHVHFLUFXPVWDQFHVWKHSK\VLFDOSV\FKRORJLFDODQGVSLULWXDO
W\SHRIWKHDULVWRFUDWKDVGHFD\HG
7KH LQWHOOHFWXDO QRELOLW\ ZDV QRW DEOH WR UHSODFH WKH EORRG QRELOLW\
EHFDXVHLWWRRLVLQDFULVLVDQGDVWDWHRIGHFD\'HPRFUDF\ZDVFUHDWHG
RXWRIDTXDQGDU\QRWEHFDXVHSHRSOHGLGQߥWZDQWQRELOLW\EXWEHFDXVH
WKH\FRXOGQߥWILQGDQ\$VVRRQDVDQHZDUHDOQRELOLW\LVFRQVWLWXWHG
GHPRFUDF\ ZLOO GLVDSSHDU E\ LWVHOI (QJODQG SRVVHVVLQJ UHDO QRELOLW\
UHPDLQHGDULVWRFUDWLFGHVSLWHLWVGHPRFUDWLFFRQVWLWXWLRQ
*HUPDQ\ߥVDFDGHPLFQRELOLW\RIPLQGDFHQWXU\DJRWKHOHDGHURIWKH
RSSRVLWLRQWRDEVROXWLVPDQGIHXGDOLVPDQGDSLRQHHURIPRGHUQOLEHUDO
LGHDVKDVQRZIDOOHQWRWKHPDLQVWD\RIWKHUHDFWLRQDULHVWKHHQHPLHVRI
PHQWDODQGSROLWLFDOUHQHZDO7KLVSVHXGRQRELOLW\RIPLQGLQ*HUPDQ\
ZDVDQDGYRFDWHRIPLOLWDULVPGXULQJWKHZDUDQGGXULQJWKHUHYROXWLRQ
DGHIHQGHURIFDSLWDOLVP7KHLUJXLGLQJVORJDQVQDWLRQDOLVPPLOLWDULVP
DQWLVHPLWLVPDOFRKROLVPDUHDOVRVORJDQVLQWKHILJKWDJDLQVWWKHPLQG
$FDGHPLF LQWHOOLJHQWVLD KDV PLVMXGJHG GHQLHG DQG EHWUD\HG LWV
UHVSRQVLEOHPLVVLRQWRUHSODFHWKHIHXGDOQRELOLW\DQGSUHSDUHDQRELOLW\
RIPLQG
7KH MRXUQDOLVWLF LQWHOOLJHQWVLD KDV DOVR EHWUD\HG LWV OHDGHUVKLS
PLVVLRQ &DOOHG WR EHFRPH WKH LQWHOOHFWXDO OHDGHU DQG WHDFKHU RI WKH
PDVVHV WR VXSSOHPHQW DQG LPSURYH ZKDW D EDFNZDUGV VFKRRO V\VWHP
PLVVHG DQG YLRODWHG GHPHDQHG LWVHOI DV WKH VODYH RI FDSLWDO WKH
WDVWHPDNHU LQ SROLWLFV DQG DUW ,WV FKDUDFWHU EURNH XQGHU WKHSUHVVXUHWR
UHSUHVHQW DQG GHIHQG VWUDQJHUVߥ LQWHUHVWV UDWKHU WKDQ LWV RZQ ߟ DQG LWV
VSLULWEHFDPHWULYLDOE\WKHRYHUSURGXFWLRQWKHMREGHPDQGV
/LNHWKHRUDWRURIDQWLTXLW\WKHMRXUQDOLVWRIWKHPRGHUQHUDVWDQGVLQ
WKH FHQWHU RI WKH JRYHUQPHQW PDFKLQH KH PRYHV WKH YRWHUV WKH YRWHUV
PRYH WKH GHOHJDWHV WKH GHOHJDWHV PRYH WKH PLQLVWHUV 7KDW LV KRZ WKH
KLJKHVW UHVSRQVLELOLW\ IRU HYHU\ SROLWLFDO RFFXUUHQFH IDOOV RQ WKH
MRXUQDOLVWDQGLWߥVKHLQW\SLFDOXUEDQVSLQHOHVVIDVKLRQZKRIHHOVIUHH
RIDQ\REOLJDWLRQDQGUHVSRQVLELOLW\
6FKRROVDQGSUHVVDUHWKHWZRSRLQWVIURPZKLFKWKHZRUOGFRXOGEH
PDGH QHZ DQG QREOH ZLWKRXW EORRGVKHG RU YLROHQFH 6FKRRO HLWKHU
QRXULVKHVRUSRLVRQVDFKLOGߥVVRXOWKHSUHVVHLWKHUQRXULVKHVRUSRLVRQV
WKH VRXO RI DQ DGXOW 6FKRROV DQG SUHVV WRGD\ DUH LQ WKH KDQGV RI DQ
XQLQWHOOHFWXDO LQWHOOLJHQWVLD WR SXW WKHP EDFN LQWR WKH KDQGV RI WKH
LQWHOOHFWVKRXOGEHWKHKLJKHVWWDVNRILGHDOSROLWLFVDQGLGHDOUHYROXWLRQ
7KH UXOLQJ G\QDVWLHV RI (XURSH KDYH IDOOHQ WKURXJK LQEUHHGLQJ WKH
G\QDVWLHVRIWKHSOXWRFUDWVWKURXJKDOLIHRIOX[XU\7KHQRELOLW\RIEORRG
GHJHQHUDWHGEHFDXVHLWEHFDPHWKHVHUYDQWRIWKHPRQDUFK\WKHQRELOLW\
RIPLQGGHJHQHUDWHGEHFDXVHLWEHFDPHWKHVHUYDQWRIFDSLWDO
 %RWK DULVWRFUDFLHV KDG IRUJRWWHQ WKDW ZLWK HYHU\ SULYLOHJH HYHU\
DZDUG HYHU\ H[FHSWLRQDO SRVLWLRQ FRPHV UHVSRQVLELOLW\ 7KH\ KDYH
IRUJRWWHQWKHPRWWRRIWUXHDULVWRFUDF\ߨQREOHVVHREOLJHߩ7KH\FKRVHWR
HQMR\WKHIUXLWVRIWKHLUDGYDQWDJHZLWKRXWWKHLUUHVSRQVLELOLWLHVWKH\VHH
WKHPVHOYHVDVJHQWOHPHQDQGVXSHULRUVQRWDVOHDGHUVDQGH[DPSOHVWR
WKHLU IHOORZ PHQ ,QVWHDG RI VKRZLQJ WKH QDWLRQ QHZ KRUL]RQV DQG
SDYLQJWKHZD\WKH\OHWWKHUXOHUVDQGFDSLWDOLVWVWXUQWKHPLQWRWRROVIRU
WKHLULQWHUHVWVLQH[FKDQJHIRUOX[XU\KRQRUDQGPRQH\WKH\VROGWKHLU
VRXOVEORRGDQGPLQG
7KHROGEORRGQRELOLW\DVZHOODVWKHPLQGQRELOLW\ORVWWKHLUFODLPWR
EH FDOOHG DULVWRFUDF\ EHFDXVH WKH\ ODFN HYHU\ VLJQ RI UHDO DULVWRFUDF\
FKDUDFWHUIUHHGRPUHVSRQVLELOLW\7KH\KDYHFXWWKHWLHVWKH\KDGZLWK
WKH QDWLRQV WKURXJK VRFLDO VQREEHU\ RQ WKH RQH KDQG DQG HGXFDWLRQDO
VQREEHU\RQWKHRWKHU
,W LV LQ D VHQVH RI KLVWRULFDO QHPHVLV WKDW WKH JUHDW IORRG ZKLFK
HPDQDWHV IURP 5XVVLD ZLOO FOHDQVH WKH ZRUOG LQ D EORRG\ RU EORRGOHVV
PDQQHU RI WKH XVXUSHUV ZKR ZDQW WR KROG RQ WR WKHLU SULYLOHJHG
SRVLWLRQVZKLOHKDYLQJORQJORVWWKHLUPHQWDOSUHUHTXLVLWHV

3/872&5$&<

$WWKHORZSRLQWRIEORRGDQGPLQGQRELOLW\LWZDVQRVXUSULVHWKDWD
WKLUGFODVVRISHRSOHWHPSRUDULO\VHL]HGSRZHUWKHSOXWRFUDWV7KHIRUP
RI FRQVWLWXWLRQ WKDW UHSODFHG IHXGDOLVP DQG DEVROXWLVP ZDVGHPRFUDF\
WKH IRUP RI JRYHUQPHQW SOXWRFUDF\ 7RGD\ GHPRFUDF\ LV D ID©DGH RI
SOXWRFUDF\ VLQFH QDWLRQV ZRXOG QRW WROHUDWH D SXUH IRUP RI SOXWRFUDF\
WKH\ ZHUH JUDQWHG QRPLQDO SRZHUV ZKLOH WKH UHDO SRZHU UHVWV LQ WKH
KDQGV RI SOXWRFUDWV ,Q UHSXEOLFDQ DV ZHOO DV PRQDUFKLFDO GHPRFUDFLHV
WKHVWDWHVPHQDUHSXSSHWVWKHFDSLWDOLVWVDUHWKHSXSSHWHHUVWKH\GLFWDWH
WKHJXLGHOLQHVRISROLWLFVUXOHWKURXJKSXUFKDVHWKHSXEOLFRSLQLRQRIWKH
YRWHUVDQGWKURXJKSURIHVVLRQDODQGVRFLDOUHODWLRQVKLSVWKHPLQLVWHUV
,QVWHDG RI WKH IHXGDO VWUXFWXUH RI VRFLHW\ WKH SOXWRFUDWLF VWHSSHG LQ
ELUWK LV QR PRUH WKH GHFLVLYH IDFWRU IRU VRFLDO UDQN EXW LQFRPH LV
7RGD\ߥV SOXWRFUDF\ LV PLJKWLHU WKDQ \HVWHUGD\ߥV DULVWRFUDF\ EHFDXVH
QRERG\LVDERYHLWEXWWKHVWDWHZKLFKLVLWVWRRODQGKHOSHUߥVKHOSHU
 :KHQWKHUHZDVVWLOOWUXHEORRGQRELOLW\WKHV\VWHPRIDULVWRFUDF\E\
ELUWKZDVIDLUHUWKDQWKDWRIWKHPRQH\HGDULVWRFUDF\WRGD\EHFDXVHWKHQ
WKH UXOLQJ FDVWH KDG D VHQVH RI UHVSRQVLELOLW\ FXOWXUH DQG WUDGLWLRQ
ZKHUHDVWKHFODVVWKDWUXOHVWRGD\LVEDUUHQRIIHHOLQJVRIUHVSRQVLELOLW\
FXOWXUHRUWUDGLWLRQ5DUHH[FHSWLRQVRIWKLVGRQߥWGHQ\WKLVIDFW
:KLOH WKH ZRUOG YLHZ RI IHXGDOLVP ZDV KHURLFUHOLJLRXV WKH
SOXWRFUDWLF VRFLHW\ NQRZV QR KLJKHU ZRUWK WKDQ PRQH\ DQG OX[XU\ D
SHUVRQߥVYDOXHLVHVWLPDWHGE\ZKDWKHKDVQRWZKDWKHLV
1HYHUWKHOHVV WKH OHDGHUV RI SOXWRFUDF\ DUH EXLOGLQJ D VHQVH RI
DULVWRFUDF\ RI VHOHFWLRQ VLQFH D QXPEHU RI H[FHOOHQW SHUVRQDO
FKDUDFWHULVWLFV DUH QHFHVVDU\ WR DPDVV ODUJH ZHDOWK GULYH SUXGHQFH
FOHYHUQHVV OHYHOKHDGHGQHVV TXLFNZLWWHGQHVV LQLWLDWLYH EROGQHVV DQG
JHQHURVLW\ 7KURXJK WKHVH YLUWXHV WKH VXFFHVVIXO HQWUHSUHQHXUV DUH
OHJLWLPL]HG DV PRGHUQGD\ FRQTXHURUV ZKRVH VXSHULRU ZLOO DQG
LQWHOOHFWXDO SRZHUV DUH YLFWRULRXV RYHU WKH PDVVHV RI LQIHULRU
FRPSHWLWRUV
7KLV VXSHULRULW\ RI WKH SOXWRFUDWV RQO\ DSSOLHV ZLWKLQ WKHLU FODVV RI
SURIHVVLRQDOV  EXW LW GLVDSSHDUV ZKHQ WKHVH VXSHUE PRQH\ HDUQHUV DUH
FRPSDUHGWRVXSHUEUHSUHVHQWDWLYHVRIߨLGHDOߩSURIHVVLRQV7KHUHIRULWLV
IDLU WKDW D FRPSHWHQW LQGXVWULDOLVW RU VDOHVPDQ FOLPEV KLJKHU PDWHULDOO\
DQGVRFLDOO\WKDQKLVOHVVFRPSHWHQWFROOHDJXHVߟEXWLWLVQRWIDLUWKDWKH
KDVPRUHVRFLDOSRZHUDQGLQIOXHQFHWKDQDQDUWLVWDFDGHPLFSROLWLFLDQ
DXWKRU WHDFKHU MXGJH RU GRFWRU ZKR LV HTXDOO\ FDSDEOH LQ KLV
SURIHVVLRQ EXW ZKRVH DELOLWLHV VHUYH ߨLGHDOߩ DQG VRFLDO JRDOV WKDW WKH
FXUUHQW HJRLVWLFDOPDWHULDOLVWLF PHQWDOLW\ LV DZDUGHG KLJKHU WKDQ WKH
DOWUXLVWLFLGHDOLVWLF
7KH IXQGDPHQWDO HYLO RI D FDSLWDOLVWLF VRFLHW\ VWUXFWXUH OLHV LQ WKH
IDYRULQJ RI HJRLVWLFDO RYHU DOWUXLVWLF DQG PDWHULDOLVWLF RYHU LGHDOLVWLF
SURZHVVZKLOHWKHUHDODULVWRFUDWVRIPLQGDQGKHDUWWKHZLVHDQGNLQG
OLYH LQ SRYHUW\ DQG SRZHUOHVVQHVV HJRLVWLF DQG YLROHQW KXPDQV XVXUS
WKHLUSRVLWLRQV
7KXV SOXWRFUDF\ LV DULVWRFUDF\ LQ LWVVHQVH RI HQHUJ\ DQGLQWHOOHFWߟ
DQGSVHXGRDULVWRFUDF\LQDQHWKLFDODQGVSLULWXDOVHQVHIURPDZRUNLQJ
FODVV YLHZ SRLQW LW LV DULVWRFUDF\ ߟ IURP WKH YLHZ SRLQW RI PRUH LGHDO
SURIHVVLRQVLWLVSVHXGRDULVWRFUDF\
 -XVW DV DULVWRFUDF\ RI EORRG RU RI PLQG VR LV DULVWRFUDF\ RI ZHDOWK
FXUUHQWO\ LQ D GHFD\LQJ SHULRG 7KH VRQV DQG JUDQGVRQV RI EXVLQHVV
PRJXOV ZKR FDPH WR JUHDW SRZHU IURP QRWKLQJ WKURXJK WKHLU ZLOO DQG
ZRUNVODFNRIILQOX[XU\DQGLGOHQHVV9HU\UDUHO\WKHIDWKHUߥVGULYHLV
LQKHULWHGRULVVXEOLPDWHGLQWRPHQWDORULGHDOFUHDWLYLW\7KHSOXWRFUDWLF
IDPLOLHV ODFN WKH WUDGLWLRQ DQG ZRUOG YLHZ DQG WKH FRQVHUYDWLYH UXUDO
VSLULWWKDWXVHGWRSUHVHUYHGQREOHIDPLOLHVIURPH[WLQFWLRQIRUFHQWXULHV
:HDN VXFFHVVRUV WDNH RYHU WKH LQKHULWDQFH RI WKHLU IDWKHUV ZLWKRXW
WKHPVHOYHVEHLQJJLIWHGZLWKWKHZLOODQGLQWHOOHFWWKURXJKZKLFKLWZDV
FUHDWHG3RZHUDQGGHVLUHJHWLQWRDFRQIOLFWDQGXQGHUPLQHWKHLQWHUQDO
OHJLWLPDF\ RI FDSLWDOLVP +LVWRULF SURJUHVV KDV DFFHOHUDWHG WKLV QDWXUDO
GHFD\ 7KH QHZ SOXWRFUDF\ RI GHDOHUV WKDW LV HPHUJLQJ EHFDXVH RI WKH
HFRQRPLFERRPRIWKHZDULVGLVSODFLQJDQGUHSODFLQJWKHSOXWRFUDF\RI
EXVLQHVV PHQ :KLOH WKH SURVSHULW\ RI WKH QDWLRQ LQFUHDVHV ZLWK WKH
HQULFKPHQW RI EXVLQHVV PHQ LW GHFUHDVHV ZLWK HQULFKPHQW RI GHDOHUV
%XVLQHVV PHQ DUH OHDGHUV RI LQGXVWU\ ߟ GHDOHUV DUH SDUDVLWHV
,QGXVWULDOLVPLVSURGXFWLYHGHDOHUV\QGURPHLVXQSURGXFWLYHFDSLWDOLVP
7KH FXUUHQW HFRQRPLF ERRP PDNHV LW HDVLHU IRU XQVFUXSXORXV
XQLQKLELWHGDQGLUUHVSRQVLEOHSHRSOHWRHDUQPRQH\)RUVSHFXODWLRQDQG
GHDOHUߥVSURILWVOXFNDQGUXWKOHVVQHVVDUHPRUHHVVHQWLDOWKDQVWURQJZLOO
DQGPLQG7KHFXUUHQWGHDOHUSOXWRFUDF\UHVHPEOHVPRUHDNDNLVWRFUDF\
RIFKDUDFWHUWKDQDQDULVWRFUDF\RIJUHDWVNLOO7KURXJKWKHLQFUHDVLQJO\
EOXUUHG OLQHV EHWZHHQ HQWHUSULVH DQG UDFNHW FDSLWDOLVP LV EHLQJ
FRPSURPLVHGDQGEURXJKWGRZQLQIURQWRIWKHIRUXPRIWKHPLQGDQGLQ
SXEOLF1RDULVWRFUDF\FDQODVWZLWKRXWPRUDODXWKRULW\:KHQWKHUXOLQJ
FODVVVWRSVEHLQJDV\PERORIHWKLFDODQGHVWKHWLFYDOXHVLWVFROODSVHLV
LQHYLWDEOH
3OXWRFUDF\LVZKHQFRPSDUHGWRRWKHUDULVWRFUDFLHVSRRULQHVWKHWLF
YDOXHV ,W IXOILOOV WKH SROLWLFDO IXQFWLRQV RI DULVWRFUDF\ ZLWKRXW RIIHULQJ
DQ\RIWKHFXOWXUDOYDOXHVRIQRELOLW\%XWZHDOWKLVRQO\EHDUDEOHGUHVVHG
LQEHDXW\DQGMXVWLILHGRQO\DVFDUULHURIDQHVWKHWLFFXOWXUH,QVWHDGWKH
QHZ SOXWRFUDF\ FORWKHV LWVHOI LQ GHVRODWH WDVWHOHVVQHVV DQG EUDVK
XJOLQHVVLWVZHDOWKLVEDUUHQDQGUHSXOVLYH
(XURSHDQ SOXWRFUDF\ XQOLNH WKH $PHULFDQ QHJOHFWV KHU HWKLFDO DV
PXFKDVKHUHVWKHWLFPLVVLRQVRFLDOEHQHIDFWRUVRIJUHDWVW\OHDUHDVUDUH
DV SDWURQV ,QVWHDG RI UHFRJQL]LQJ VRFLDO FDSLWDOLVP DV WKH SXUSRVH RI
WKHLUH[LVWHQFH WRFRPELQHWKHIUDJPHQWHGQDWLRQDODVVHWVIRUJHQHURXV
ZRUNV RI D FUHDWLYH KXPDQLW\  ߟ WKH SOXWRFUDWV IHHO MXVWLILHG LQ WKHLU
RSSUHVVLYH PDMRULW\ WR LUUHVSRQVLEO\ EXLOG ZHDOWK RQ WKH EDFNV RI WKH
PLVHUDEOH PDVVHV 7KH\ DUH H[SORLWHUV RI KXPDQLW\ LQVWHDG RI WUXVWHHV
PLVOHDGHUVLQVWHDGRIOHDGHUV
7KURXJK WKLV ODFN RI HVWKHWLF DQG HWKLFDO FXOWXUH SOXWRFUDF\ FUHDWHV
KDWH DQG FRQWHPSW LQ WKH SXEOLF RSLQLRQ DQG LWV OHDGHUV ,I VKH GRHVQߥW
HPSDWKL]HVKHPXVWIDOO
7KH 5XVVLDQ UHYROXWLRQ PHDQV WKH EHJLQQLQJ RI WKH HQG IRU WKLV
KLVWRULFDOHUD'HVSLWHWKHGHIHDWRI/HQLQKLVVKDGRZZLOOGRPLQDWHWKH
WZHQWLHWK FHQWXU\ DV WKH )UHQFK UHYROXWLRQ GHVSLWH LWV IDOO GRPLQDWHG
WKH QLQHWHHQWK IHXGDOLVWV DQG DEVROXWLVWV ZRXOG QRW KDYH UHVLJQHG
YROXQWDULO\ LQ FRQWLQHQWDO (XURSH WKH\ GLG RXW RI IHDU RI WKH WHUURUV
DJDLQVWWKH)UHQFKDULVWRFUDF\DQGNLQJEHLQJUHSHDWHG,WZLOOEHHDVLHU
IRUWKHEROVKHYLVWVZRUGRI'DPRFOHVWRVRIWHQWKHKHDUWVRISOXWRFUDWV
DQG PDNH VRFLDO IXQGLQJ DYDLODEOH WKDQ WKH JRVSHO RI &KULVW LQ WZR
WKRXVDQG\HDUV

%/22'12%,/,7<$1')8785(12%,/,7<

1RELOLW\LVGHILQHGE\SK\VLFDOVSLULWXDODQGPHQWDOEHDXW\EHDXW\RI
FRPSOHWH KDUPRQ\ DQG VSLULWXDO HQHUJ\ ZKRHYHU FDQ RXWGR KLV
VXUURXQGLQJVLQWKLVZD\LVDQDULVWRFUDW
7KHROGW\SHRIDULVWRFUDWLVG\LQJRXWWKHQHZW\SHKDVQRW\HWEHHQ
FRQVWUXFWHG DQG WKH LQWHULP LV SRRU LQ JUHDW SHUVRQDOLWLHV EHDXWLIXO
SHRSOH QREOH SHRSOH DQG ZLVH SHRSOH ,QVWHDG WKH VXFFHVVRUV RI WKH
VLQNLQJQRELOLW\XVXUSWKHGHDGIRUPVRIWKHIRUPHUDULVWRFUDF\DQGILOO
WKHPZLWKWKHFRQWHQWVRISDOWU\ERXUJHRLV7KHVWURQJOLIHIRUFHRIWKH
IRUPHU DULVWRFUDF\ SDVVHG RYHU WR XSVWDUWV EXW WKHVH ODFN LWV IRUP
JHQWLOLW\DQGEHDXW\
7LPH PXVW QRW GHVSDLU E\ WKH LGHD RI QRELOLW\ RU WKH IXWXUH RI
QRELOLW\ ,I KXPDQLW\ LV WR PDUFK IRUZDUG ZH QHHG OHDGHUV WHDFKHUV
JXLGHV WKHVH DUH H[DPSOHV RI ZKDW KXPDQLW\ ZLVKHV WR EHFRPH WKH
SLRQHHUVRIIXWXUHHOHYDWLRQWRKLJKHUVSKHUHV:LWKRXWQRELOLW\WKHUHLV
QR HYROXWLRQ (XGHPRQLVWLF SROLWLFV FDQ EH GHPRFUDWLF ߟ HYROXWLRQDU\
SROLWLFV PXVW EH DULVWRFUDWLF 7R ULVH XS DQG PDUFK IRUWK JRDOV DUH
QHFHVVDU\ UHDFKLQJ JRDOV UHTXLUHV SHRSOH EXW VHWWLQJ DQG OHDGLQJ WR
WKHVHJRDOVUHTXLUHVDULVWRFUDWV
7KHDULVWRFUDWDVDOHDGHULVDSROLWLFDOFRQFHSWWKHDULVWRFUDWDVUROH
PRGHOLVDQߨLGHDOߩFRQFHSW7KHKLJKHVWUHTXLUHPHQWLVWKDWDULVWRFUDF\
FRLQFLGHV ZLWK QRELOLW\ DQG OHDGHUVKLS ZLWK UROH PRGHOV WKDW SHUIHFW
SHRSOHEHFRPHOHDGHUV
)URP WKH PDMRULW\ RI PDQNLQG LQ (XURSH WKDW RQO\ EHOLHYHV LQ
QXPEHUV LQ PDMRULW\ WZR TXDOLW\ UDFHV VWDQG RXW EORRG QRELOLW\ DQG
-XGDLVP6HSDUDWHIURPHDFKRWKHUERWKEHOLHYHLQWKHLUKLJKHUFDOOLQJ
LQ WKHLU VXSHULRU EORRG DQG LQWKH GLIIHUHQFH RI WKH UDFHV,QWKHVHWZR
KHWHURJHQHRXV VXSHULRU UDFHV OLHV WKH KHDUW RI (XURSHߥV IXWXUH QRELOLW\
WKHIHXGDOEORRGQRELOLW\DVIDUDVLWLVQRWFRUUXSWHGE\WKHFRXUWDQG
WKH-HZLVKQRELOLW\RIPLQGLILWLVQRWFRUUXSWHGE\PRQH\$PRQJVWWKH
FLWL]HQVRIDEHWWHUIXWXUHDIHZPRUDOKLJKUDQNLQJUXUDODULVWRFUDWVDQG
D VPDOO ILJKWLQJ IRUFH RI WKH UHYROXWLRQDU\ LQWHOOLJHQFH UHPDLQ 7KH
FRPPXQLW\ JURZV LQWR D V\PERO RI /HQLQ WKH PDQ RI ORZHU UXUDO
QRELOLW\ DQG 7URW]NL WKH -HZLVK OLWHUDU\ ILJXUH KHUH WKH RSSRVLWHV RI
FKDUDFWHU DQG VSLULW MXQNHU DQG ZULWHU UXUDO DQG XUEDQ SDJDQ DQG
&KULVWLDQDUHUHFRQFLOHGDQGDUHYROXWLRQDU\DULVWRFUDF\LVFUHDWHG
2QH VPDOO PHQWDO VWHS IRUZDUG ZRXOG EH HQRXJK WR HQOLVW WKH EHVW
HOHPHQWVRIWKHEORRGQRELOLW\WRVHUYHWKLVQHZKXPDQOLEHUDWLRQ7KHLU
WUDGLWLRQDO FRXUDJH DQWLERXUJHRLV DQG DQWLFDSLWDOLVW PHQWDOLW\
SUHGHVWLQHV WKHP IRU WKLV SRVLWLRQ DV GR WKHLU UHVSRQVLELOLW\ FRQWHPSW
IRU PDWHULDOLVWLF DGYDQWDJH WKHLU VWRLF ZLOO LQWHJULW\ DQG LGHDOLVP ,I
OHDG RQWR VSLULWXDO DQG IUHH SDWKV WKH VWURQJ QREOH HQHUJLHV WKDW VR IDU
VXSSRUWHG WKH UHDFWLRQDULHV FDQ EH UHJHQHUDWHG DQG EHJHW OHDGHU W\SHV
WKDWFRPELQHULJLGZLOOELJVSLULWDQGVHOIOHVVQHVVDQGMRLQWKHUDQNVRI
WKH UHMXYHQDWHG UHSUHVHQWDWLYHV RI WKH QRELOLW\ RI PLQG DQG WR OLEHUDWH
DQGLPSURYHPDQNLQG
,Q(XURSHSROLWLFVIRUFHQWXULHVZDVDSULYLOHJHRIWKHQREOHV+LJK
QRELOLW\FUHDWHGDQLQWHUQDWLRQDOSROLWLFDOFODVVZKHUHGLSORPDWLFWDOHQWV
ZHUHFXOWLYDWHG)RUPDQ\JHQHUDWLRQVWKH(XURSHDQEORRGQRELOLW\OLYHV
LQDSROLWLFDODWPRVSKHUHIURPZKLFKWKHRUGLQDU\FLWL]HQVDUHNHSWDZD\
2QWKHLUODUJHSULYDWHHVWDWHVWKHDULVWRFUDF\OHDUQHGWKHDUWRIUXOLQJRI
KRZWRWUHDWSHRSOHDQGLQWKHOHDGLQJSRVLWLRQVRIJRYHUQPHQWKRZWR
WUHDWQDWLRQV3ROLWLFVLVDQDUWQRWDVFLHQFHLWUHOLHVRQLQVWLQFWQRWWKH
EUDLQ 2Q WKH VXEFRQVFLRXV QRW WKH FRQVFLRXV 3ROLWLFDO WDOHQW FDQ EH
DZDNHQHG DQG QXUVHG QRW OHDUQHG *HQLXV EUHDNV HYHU\ UXOH EXW WKH
QRELOLW\ LV ULFKHU LQ SROLWLFDO WDOHQWV WKDQ RUGLQDU\ FLWL]HQV %HFDXVH LW
RQO\WDNHVRQHOLIHWRDFTXLUHNQRZOHGJHEXWLWWDNHVPDQ\JHQHUDWLRQV
WR DFTXLUH LQVWLQFWV ,Q VFLHQFH DQG WKH DUWV WKH RUGLQDU\ FLWL]HQ H[FHOV
WKHQREOHVEXWLQSROLWLFVLWLVUHYHUVH7KDWLVZK\HYHQLQGHPRFUDWLF
(XURSHIRUHLJQSROLWLFVLVGHOHJDWHGWRWKHRIIVSULQJRIKLJKQRELOLW\,WLV
LQ WKH EHVW LQWHUHVW RI WKH VWDWH WR XWLOL]H IRU WKH FRPPRQ JRRG WKH
KHUHGLWDU\ SROLWLFDO WDOHQWV ZKLFK WKH DULVWRFUDF\ KDV DEVRUEHG IRU
FHQWXULHV 7KH SROLWLFDO WDOHQWV RI KLJK QRELOLW\ FDQ EH WUDFHG WR WKHLU
VWURQJ EORRGOLQHV 7KLV QDWLRQDO UDFH EURDGHQV WKH KRUL]RQ DQG
FRXQWHUDFWV WKH EDG UHVXOWV RI LQEUHHGLQJ WKH PDMRULW\ RI WKH ORZHU
DULVWRFUDWV FRPELQH WKH GLVDGYDQWDJHV RI LQEUHHGLQJ VXFK DV ODFN RI
FKDUDFWHU DQG VSLULWXDO SRYHUW\ ZKHUHDV LQ WKH UDUH KLJK IRUPV RI
QRELOLW\WKHSRVLWLYHVPHHWFKDUDFWHUDQGVSLULW
,QWHOOHFWXDOO\ VSHDNLQJ WKHUH LV D JDSLQJ GLIIHUHQFH EHWZHHQ WKH
H[WUHPHULJKW FRQVHUYDWLYHEORRGQRELOLW\ DQGH[WUHPHOHIW QRELOLW\RI
PLQG  ZKHUHDV WKH FKDUDFWHU RI WKRVH VHHPLQJ RSSRVLWHV DUH YHU\
VLPLODU %XW DOO PDWWHUV LQWHOOHFWXDO DQG FRQVFLRXV DUH RQ WKH VXUIDFH
DQG WKLQJV FRQFHUQLQJ FKDUDFWHU DQG WKH XQFRQVFLRXV OLH GHHS LQ WKH
SHUVRQDOLW\ .QRZOHGJH DQG RSLQLRQV DUH HDVLHU WR DFTXLUH DQG FKDQJH
WKDQFKDUDFWHUDQGZLOO
/HQLQ DQG /XGHQGRUII DUH RSSRVLWHV LQ WKHLU SROLWLFDO LGHDOV EXW
EURWKHUV LQ WKHLU ZLOO +DG /XGHQGRUII EHHQ UDLVHG LQ D UHYROXWLRQDU\
HQYLURQPHQWZLWK5XVVLDQVWXGHQWVDV/HQLQKHZRXOGKDYHOLNH/HQLQ
ZLWQHVVHGWKHH[HFXWLRQRIKLVEURWKHUE\LPSHULDOKDQJPHQ:HZRXOG
SUREDEO\ VHH KLP OHDGLQJ UHG 5XVVLD +DG /HQLQ EHHQ UDLVHG LQ D
3UXVVLDQPLOLWDU\DFDGHP\KHPLJKWKDYHEHFRPHD6XSHU/XGHQGRUII
:KDW VHSDUDWHV WKHVH WZR VLPLODU FKDUDFWHUV LV WKHLU LQWHOOHFW /HQLQߥV
GLPQHVV VHHPV KHURLF DQG FRQVFLRXV /XGHQGRUIIߥV VHHPV WR EH QD±YH
DQGXQFRQVFLRXV/HQLQLVQRWMXVWDOHDGHUߟKHDOVRVHHPVVSLULWXDOD
VSLULWXDO/XGHQGRUIIVRWRVSHDN
7KHVDPHSDUDOOHOFDQEHPDGHEHWZHHQWZRRWKHUUHSUHVHQWDWLYHVRI
WKH H[WUHPH OHIW DQG ULJKW )ULHGULFK $GOHU DQG *UDI $UFR %RWK ZHUH
PXUGHUHGIRULGHDOLVPDQGPDUW\UVIRUWKHLUFRQYLFWLRQV+DG$GOHUOLYHG
LQ WKH PLOLWDULVWLFUHDFWLRQDU\ HQYLURQPHQW RI *HUPDQ EORRG QRELOLW\
DQG $UFR LQ WKH VRFLDOLVWUHYROXWLRQDU\ HQYLURQPHQW RI $XVWULDQ
DULVWRFUDWV RI PLQG $UFRߥV EXOOHW ZRXOG KDYH NLOOHG SULPH PLQLVWHU
6WXUJNK DQG $GOHUߥV EXOOHW ZRXOG KDYH NLOOHG SULPH PLQLVWHU (LVQHU
%HFDXVHWKH\DUHEURWKHUVVHSDUDWHGE\WKHGLIIHUHQFHRIWKHLULQVWLOOHG
SUHMXGLFHVDQGFRQQHFWHGE\WKHLUKHURLFVHOIOHVVFKDUDFWHUV+HUHWRR
LVWKHGLIIHUHQFHLQWHOOHFWXDO $GOHULVVSLULWXDO QRWLQWKHSXULW\RIWKHLU
WKRXJKWV ,I \RX SUDLVH WKH FKDUDFWHU RI RQH \RX FDQQRW PLQLPL]H WKH
RWKHUߟDVHYHU\RQHGRHVWKHVHGD\V
:KHUHWKHUHLVLQFUHDVHGYLWDOLW\WKHUHLVWKHIXWXUH7KHHOLWHRIWKH
SHDVDQWU\WKHUXUDODULVWRFUDWVKDYH LIWKH\UHPDLQHGKHDOWK\ WKURXJKD
WKRXVDQG\HDUV\PELRVLVZLWKWKHOLYLQJDQGOLIHJLYLQJQDWXUHJDWKHUHG
DQG VWRUHG D ZHDOWK RI YLWDO IRUFHV ,I QHZ HGXFDWLRQ FRXOG VXFFHHG LQ
VXEOLPDWLQJWKHVHHQKDQFHGOLIHHQHUJLHVLQWKHLQWHOOHFWWKHQPD\EHWKH
DULVWRFUDF\RIWKHSDVWFRXOGSOD\DVLJQLILFDQWSDUWLQWKHFUHDWLRQRIWKH
DULVWRFUDF\RIWKHIXWXUH

-8'$,60$1')8785(12%,/,7<

0DLQ EHDUHUV RI FRUUXSW DV ZHOO DV XQFRUUXSW QRELOLW\ RI PLQG
FDSLWDOLVP MRXUQDOLVP OLWHUDWXUH DUH WKH -HZV 7KH\ DUH SUHGHVWLQHG
WKURXJK WKHLU LQWHOOHFWXDO VXSHULRULW\ WR EH D PDLQ LQIOXHQFH RQ IXWXUH
DULVWRFUDWV
$ JOLPSVH LQWR WKH KLVWRU\ RI WKH -HZLVK SHRSOH ZLOO H[SODLQ
DGYDQWDJH LQ WKH EDWWOH WR OHDG KXPDQLW\ 7ZRWKRXVDQG \HDUV DJR WKH
-HZV ZHUH D UHOLJLRXV FRPPXQLW\ FRPSULVHG RI HWKLFDO DQG VSLULWXDO
LQGLYLGXDOVIURPDOODQFLHQWQDWLRQVZLWKWKHLUQDWLRQDO+HEUHZFHQWHULQ
3DOHVWLQH(YHQWKHQZKDWERXQGWKHPWRJHWKHUZDVSULPDULO\UHOLJLRQ
QRW QDWLRQ ,Q WKH FRXUVH RI WKH ILUVW WKRXVDQG \HDUV FRQYHUWV IURP DOO
QDWLRQV MRLQHG WKHP WKH ODVW EHLQJ NLQJ QREOHV DQG FLWL]HQV IURP
.KD]DULD6RXWK5XVVLD)URPWKHQRQWKHUHOLJLRXV-HZLVKFRPPXQLW\
XQLWHGDVDQDUWLILFLDOQDWLRQDOLW\DQGVWRRGDJDLQVWDOORWKHUV
7KURXJK XQVSHDNDEOH SHUVHFXWLRQV &KULVWLDQ (XURSH KDV WULHG WR
H[WLQJXLVK WKH -HZLVK QDWLRQ IRU D WKRXVDQG \HDUV 7KH UHVXOW ZDV WKDW
-HZV ZKR ZHUH ZHDN ZLOOHG XQVFUXSXORXV RSSRUWXQLVWLF RU VNHSWLFDO
ZHUH EDSWL]HG LQ RUGHU WR HVFDSH WKH QHYHUHQGLQJ SHUVHFXWLRQV 2WKHU
-HZVZKRZHUHQRWFOHYHUVPDUWRULQYHQWLYHSHULVKHGXQGHUWKHKDUVK
FRQGLWLRQV
:KDW XOWLPDWHO\ HPHUJHG IURP DOO WKHVH SHUVHFXWLRQV ZDV D VPDOO
FRPPXQLW\WKDWZDVKDUGHQHGE\WKHKHURLFPDUW\UGRPIRUDQLGHDDQG
SXULILHG RI DOO ZHDNQHVVHV DQG SRRU PHQWDO TXDOLWLHV ,QVWHDG RI
GHVWUR\LQJ-XGDLVP(XURSHKDVDJDLQVWLWVNQRZOHGJHWKURXJKDUWLILFLDO
QDWXUDO VHOHFWLRQ UDLVHG WKH OHDGLQJ QDWLRQ RI WKH IXWXUH 6R LW LV QR
ZRQGHUWKDWWKLVQDWLRQWKHGHVFHQGDQWVRIJKHWWRSULVRQHUVLVEHFRPLQJ
WKH DULVWRFUDWV RI WKH PLQG LQ (XURSH .LQG SURYLGHQFH KDV JUDFLRXVO\
JLYHQ (XURSH WKURXJK WKH HPDQFLSDWLRQ RI WKH -HZV D QHZ UDFH RI
DULVWRFUDWVRIWKHPLQGZKHQIHXGDODULVWRFUDF\GHFD\HG
7KH ILUVW H[DPSOH RI WKLV JURZLQJ DULVWRFUDF\ RI WKH IXWXUH ZDV WKH
UHYROXWLRQDU\ QREOH -HZ /DVVDOOH ZKR FRPELQHG WR D JUHDW H[WHQG
SK\VLFDO EHDXW\ FKDUDFWHU RI QREOH FRXUDJH DQG VKDUSQHVV RI PLQG
DULVWRFUDW LQ WKH WUXHVW DQG KLJKHVW VHQVH RI WKH ZRUG KH ZDV D ERUQ
OHDGHUDQGJXLGHRIKLVWLPH
-XGDLVP LV QRW WKH QHZ QRELOLW\ EXW LW LV WKH ZRPE IURP ZKLFK D
QHZLQWHOOHFWXDOQRELOLW\DULVHVWKHFRUHDURXQGZKLFKDQHZLQWHOOHFWXDO
QRELOLW\ LV JURXSHG $Q LQWHOOHFWXDOXUEDQ ߨPDVWHU UDFHߩ LV LQ WKH
PDNLQJ LGHDOLVWV VSLULWXDO ILQHO\ WXQHG MXVW DQG WUXWKIXO EUDYH DV WKH
IHXGDO DULVWRFUDWV LQ WKHLU EHVW GD\V ZKR KDSSLO\ HPEUDFH GHDWK DQG
SHUVHFXWLRQ KDWH DQG VFRUQ LQ RUGHU WR PDNH KXPDQLW\ PRUH PRUDO
PRUHVSLULWXDODQGKDSSLHU
7KH -HZLVK KHURHV DQG PDUW\UV RI (DVW DQG 0LGGOH (XURSHߥV
UHYROXWLRQDUHQROHVVEUDYHHQGXULQJRULGHDOLVWLFWKDQWKH1RQ-HZLVK
KHURHV RI WKH :RUOG :DU  EXW WKH\ VXUSDVV WKHP LQWHOOHFWXDOO\ 7KH
HVVHQFH RI WKRVH PHQ DQG ZRPHQ ZKR WU\ WR OLEHUDWH DQG UHQHZ
KXPDQLW\ LV D VWUDQJH V\QWKHVLV RI UHOLJLRXV DQG SROLWLFDO HOHPHQWV
KHURLF PDUW\UGRP LQWHOOHFWXDO SURSDJDQGD UHYROXWLRQDU\ YLJRU DQG
VRFLDO ORYH RI MXVWLFH DQG FRPSDVVLRQ 7KHVH FKDUDFWHULVWLFV WKDW RQFH
PDGH WKHP WKH FUHDWRUV RI WKH &KULVWLDQ ZRUOG PRYHPHQW DUH SODFLQJ
WKHPWRGD\DWWKHWRSRIWKHVRFLDOLVWLF
:LWKERWKRIWKHVHDWWHPSWVDWVDOYDWLRQ VSLULWXDODQGPRUDO -XGDLVP
KDVJLIWHGWKHGLVLQKHULWHGPDVVHVRI(XURSHPRUHZHDOWKWKDQDQ\RWKHU
QDWLRQ-XVWDVPRGHUQ-XGDLVPKDVPRUHLPSRUWDQWPHQSHUFDSLWDWKDQ
WKHRWKHUQDWLRQVEDUHO\DFHQWXU\DIWHULWVOLEHUDWLRQWKLVWLQ\QDWLRQLV
ZLWK(LQVWHLQDWWKHWRSRIPRGHUQVFLHQFH0DKOHUDWWKHWRSRIPRGHUQ
PXVLF %HUJVRQ DW WKH WRS RI PRGHUQ SKLORVRSK\ 7URWVN\ DW WKH WRS RI
PRGHUQSROLWLFV7KHSURPLQHQWSRVLWLRQWKDW-XGDLVPRFFXSLHVWRGD\LW
RZHV RQO\ WR LWV VXSHULRU PLQG ZKLFK HQDEOHV LW WR VXFFHHG DJDLQVW D
FRPSHWLWLRQRIHQRUPRXVO\IDYRUHGKDWHIXODQGHQYLRXVULYDOV0RGHUQ
DQWL6HPLWLVP LV RQH RI PDQ\ UHDFWLRQV RI WKH RUGLQDU\ DJDLQVW WKH
H[WUDRUGLQDU\LWLVDPRGHUQIRUPRIRVWUDFLVPRIDQHQWLUHQDWLRQ$VD
QDWLRQ -XGDLVP H[SHULHQFHV WKH HWHUQDO VWUXJJOH RI TXDQWLW\ YHUVXV
TXDOLW\ DQG LQIHULRU JURXSV DJDLQVW VXSHULRU LQGLYLGXDOV DV ZHOO DV
LQIHULRUPDMRULWLHVDJDLQVWVXSHULRUPLQRULWLHV
7KHURRWVRIDQWLVHPLWLVPDUHWREHIRXQGLQQDUURZPLQGHGQHVVDQG
HQY\QDUURZPLQGHGQHVVLQUHOLJLRQRULQHFRQRPLFVHQY\LQLQWHOOHFWRU
HFRQRPLF
%HFDXVH -HZV HPHUJHG IURP DQ LQWHUQDWLRQDO UHOLJLRXV FRPPXQLW\
UDWKHUWKDQDORFDOUDFHWKH\DUHWKHQDWLRQZLWKWKHPRVWPL[HGEORRG
EHFDXVH WKH\ KDYH GLVWDQFHG WKHPVHOYHV IURP RWKHU QDWLRQV IRU D
WKRXVDQG \HDUV DUH WKH\ DOVR WKH QDWLRQ ZLWK WKH PRVW LQEUHHGLQJ 7KH
FKRVHQRQHVDPRQJVWWKHPFRPELQHOLNHKLJKQRELOLW\VWUHQJWKRIZLOO
ZLWK VWUHQJWK RI LQWHOOHFW ZKHUHDV DQRWKHU JURXS RI -HZV FRPELQH WKH
GHIHFWVRILQEUHHGLQJZLWKWKHGHIHFWVRIUDFHPL[LQJDODFNRIFKDUDFWHU
PL[HGZLWKFORVHPLQGHGQHVV+HUHZHILQGWKHKROLHVWRIVHOIVDFULILFH
QH[W WR LQGLYLGXDO VHOILVKQHVV DQG WKH SXUHVW LGHDOLVP QH[W WR FUDVV
PDWHULDOLVP+HUHWKHUXOHLVIROORZHGWKHPRUHPL[HGDQDWLRQLVWKH
OHVVWKHFLWL]HQVDUHDOLNHDQGWKHOHVVSRVVLEOHLWLVWRFRQVWUXFWDVLQJOH
UDFHW\SH
:KHUHWKHUHLVOLJKWWKHUHDUHVKDGRZV)DPLOLHVZLWKJHQLXVHVVKRZ
D ODUJHU SHUFHQWDJH RI PHQWDOO\ LOO IDPLO\ PHPEHUV WKDQ DYHUDJH WKLV
UXOHDOVRDSSOLHVWRQDWLRQV1RWRQO\WRPRUURZߥVDULVWRFUDWVRIPLQGEXW
DOVR WRGD\ߥV GHDOHUNDNLVWRFUDWV UHFUXLW SULPDULO\ -HZV DQG VR VKDUSHQ
WKHZHDSRQVRIDQWL6HPLWLVP
$WKRXVDQG\HDUVRIVODYHU\WRRNIURPWKH-HZVZLWKIHZH[FHSWLRQV
WKH IHHOLQJ RI EHLQJ WKH PDVWHU UDFH &RQVWDQW RSSUHVVLRQ LQKLELWV WKH
GHYHORSPHQW RI WKH SHUVRQDOLW\ LW WDNHV DZD\ WKH PDLQ HOHPHQW RI WKH
HVWKHWLF LGHDO RI QRELOLW\ 7KH PDMRULW\ RI -HZV VXIIHU IURP WKLV ODFN
SV\FKRORJLFDOO\DQGSK\VLFDOO\DQGLWLVWKHPDLQUHDVRQWKDW(XURSHDQV
DUHLQVWLQFWLYHO\DJDLQVWUHFRJQL]LQJ-HZVDVDQREOHUDFH
 7KH UHVHQWPHQW ZLWK ZKLFK -XGDLVP LV DIIOLFWHG JLYHV LW PXFK YLWDO
WHQVLRQ EXW WDNHV DZD\ QREOH KDUPRQ\ ([DJJHUDWHG LQEUHHGLQJ
FRPELQHGZLWKK\SHUXUEDQLW\RIWKHLUJKHWWRSDVWKDGDVDFRQVHTXHQFH
WUDLWRISK\VLFDODQGSV\FKRORJLFDOGHFDGHQFH7KDWZKLFKWKHPLQGVRI
WKH-HZVJDLQHGWKHLUERGLHVKDYHORVWWKDWZKLFKWKHEUDLQVRIWKH-HZV
JDLQHGWKHLUQHUYRXVV\VWHPVKDYHORVW
7KH-HZVVXIIHUIURPK\SHUWURSK\RIWKHEUDLQZKLFKLVWKHRSSRVLWH
RI ZKDW WKH GHYHORSPHQW RI QREOH SHUVRQDOLW\ GHPDQGV 7KH SK\VLFDO
DQG QHUYRXV ZHDNQHVV RI PDQ\ LQWHOOHFWXDOO\ VXSHULRU -HZV OHDGV WR D
ODFN LQ SK\VLFDO FRXUDJH UHODWHG WR WKH KLJKHVW PRUDO FRXUDJH  DQG
LQVHFXULW\ LQ SHUIRUPDQFH WUDLWV ZKLFK VWLOO DUH LQFRPSDWLEOH ZLWK WKH
NQLJKWO\LGHDORIQREOHPHQ
7KH LQWHOOHFWXDO PDVWHU UDFH RI WKH -HZV VXIIHUV IURP WKH
FKDUDFWHULVWLFV RI D VODYH UDFH ZKLFK WKH\ DFTXLUHG LQ WKHLU KLVWRULFDO
GHYHORSPHQW WKHUH DUH VWLOO -HZLVK OHDGHUV WKDW H[KLELW WKH SRVWXUH DQG
JHVWXUHV RI WKH RSSUHVVHG VODYH ,Q WKHLU JHVWXUHV WKH ORZHU DULVWRFUDWV
VHHP QREOHU WKDQ WKH PRVW H[FHOOHQW -HZ 7KHVH GHIHFWV GHYHORSHG LQ
HYROXWLRQ DQG ZLOO GLVDSSHDU LQ HYROXWLRQ 0DNLQJ -HZV PRUH UXUDO D
PDLQJRDORI=LRQLVP FRPELQHGZLWKSK\VLFDOHGXFDWLRQZLOOIUHHWKH
-HZVIURPDQ\UHVLGXDORIWKHJKHWWRWKDWWKH\VWLOOFDUU\ZLWKLQ7KDWWKLV
LVSRVVLEOHSURYHVWKHHYROXWLRQRI$PHULFDQ-HZV7KHUHDOIUHHGRPDQG
SRZHU WKDW -HZV KDYH ZRQ ZLOO VRRQ EH IROORZHG E\ WKH SRVWXUH DQG
JHVWXUHVRIIUHHSRZHUIXOSHRSOH
1RW RQO\ WKH -HZV ZLOO FKDQJH LQ WKH GLUHFWLRQRI WKHZHVWHUQ QREOH
LGHDOߟEXWWKHZHVWHUQQREOHLGHDOZLOOXQGHUJRDFKDQJHWKDWZLOOPHHW
-XGDLVP KDOIZD\ ,Q D SHDFHIXO (XURSH RI WKH IXWXUH QRELOLW\ ZLOO WDNH
RII LWV ZDUOLNH FKDUDFWHU DQG UHSODFH LW ZLWK DQ LQWHOOHFWXDOSULHVWO\ $
SDFLILVWLFDQGVRFLDOLVWLFZHVWHUQZRUOGZLOOQRWQHHGORUGVDQGUXOHUVߟ
RQO\OHDGHUVHGXFDWRUVDQGLGROV,QDQRULHQWDO(XURSHWKHDULVWRFUDWRI
WKHIXWXUHZLOOUHVHPEOHPRUHD%UDKPDQDQGD&KLQHVHRIILFLDOWKDQD
NQLJKW
287/22.
7KHDULVWRFUDWRIWKHIXWXUHZLOOEHQHLWKHUIHXGDOQRU-HZLVKQHLWKHU
ERXUJHRLVQRUSUROHWDULDQKHZLOOEHV\QWKHWLF7KHUDFHVDQGFODVVHVRI
WRGD\ZLOOGLVDSSHDUWKHSHUVRQDOLWLHVZLOOUHPDLQ
2QO\WKURXJKPL[LQJZLWKWKHEHVWEORRGWKHYLDEOHWUDLWVRIIRUPHU
IHXGDOQRELOLW\ZLOOULVHWRQHZKHLJKWVRQO\WKURXJKEUHHGLQJZLWKWKH
WRS1RQ-HZLVK(XURSHDQVZLOOWKH-HZLVKHOHPHQWRIWKHIXWXUHQRELOLW\
UHDFKLWVIXOOSRWHQWLDO7RWKHFKRVHQSHRSOHRIWKHIXWXUHDSK\VLFDOO\
ZHOOEUHG UXUDO QRELOLW\ PD\ JLIW SHUIHFW ERGLHV DQG JHVWXUHV DQG D
KLJKO\ HGXFDWHG XUEDQ QRELOLW\ ZLOO DGG PHQWDO SURZHVV VRXOIXO H\HV
DQGKDQGV
7KHQRELOLW\RIWKHSDVWZDVEXLOWRQTXDQWLW\IHXGDOQRELOLW\RQWKH
QXPEHU RI WKHLU DQFHVWRUV SOXWRFUDF\ RQ WKH QXPEHU RI WKHLU PLOOLRQV
7KH QRELOLW\ RI WKH IXWXUH ZLOO GHSHQG RQ TXDOLW\ RQ SHUVRQDO ZRUWK
SHUVRQDOSHUIHFWLRQSHUIHFWLRQRIWKHERG\VRXODQGLQWHOOHFW
7RGD\ DW WKH GRRUZD\ RI D QHZ HUD UDQGRP QRELOLW\ UHSODFHV
KHUHGLWDU\ QRELOLW\ LQVWHDG RI D QREOH UDFH QREOH LQGLYLGXDOV +XPDQV
ZKRVHUDQGRPEORRGFRPELQDWLRQHOHYDWHVWKHPWRDQLGHDOW\SH
)URPWKLVUDQGRPQRELOLW\RIWRGD\ZLOOHPHUJHWKHQHZLQWHUQDWLRQDO
DQG LQWHUVRFLDO QREOH UDFH RI WRPRUURZ (YHU\WKLQJ RXWVWDQGLQJ LQ
EHDXW\ SRZHU HQHUJ\ DQG LQWHOOHFW ZLOO UHFRJQL]H LWVHOI DQG XQLWH
DFFRUGLQJ WR WKH VHFUHW ODZV RI HURWLF DWWUDFWLRQ :KHQ WKH DUWLILFLDO
EDUULHUV IHXGDOLVP DQG FDSLWDOLVP KDYH EXLOW IDOO  WKHQ WKH PRVW
LPSRUWDQW PHQ ZLOO DWWUDFW WKH PRVW EHDXWLIXO ZRPHQ DQG WKH PRVW
LPSRUWDQW ZRPHQ ZLOO DWWUDFW WKH PRVW SHUIHFW PHQ 7KH PRUH SHUIHFW
SK\VLFDOO\ SV\FKRORJLFDOO\ DQG PHQWDOO\ D PDQ LV WKH JUHDWHU WKH
QXPEHU RI ZRPHQ KH ZLOO KDYH WR FKRRVH IURP 2QO\ WKH QREOHVW PHQ
ZLOOEHDEOHWRFKRRVHWKHQREOHVWZRPHQDQGYLFHYHUVDߟWKHLQIHULRU
ZLOO KDYH WR EH VDWLVILHG ZLWK WKH LQIHULRU 7KH HURWLF OLIH VW\OH IRU WKH
LQIHULRU DQG WKH DYHUDJH ZLOO EH ߨIUHH ORYHߩ IRU WKH VXSHULRU ߨIUHH
PDUULDJHߩ 7KH UDFH RI WKH IXWXUH QRELOLW\ ZLOO QRW EH ERUQ RXW RI WKH
DUWLILFLDO QRUPV RI KXPDQ FODVVHV EXW RXW RI WKH GLYLQH ODZV RI HURWLF
HXJHQLFV
 7KH QDWXUDO VHOHFWLRQ RI KXPDQ SHUIHFWLRQ ZLOO WDNH WKH SODFH RI WKH
DUWLILFLDOVHOHFWLRQRIIHXGDOLVPDQGFDSLWDOLVP
6RFLDOLVPZKLFKEHJDQDEROLVKLQJQRELOLW\DQGOHYHOLQJRIKXPDQLW\
ZLOO SHDN LQ WKH EUHHGLQJ RI QRELOLW\ DQG GLIIHUHQWLDWLRQ RI KXPDQLW\
+HUHLQVRFLDOHXJHQLFVLVLWVKLJKHVWPLVVLRQZKLFKVRFLDOLVPGRHVQRW
UHDOL]H \HW WR OHDG IURP XQIDLU LQHTXDOLW\ WKURXJK HTXDOLW\ WR HTXDO
LQHTXDOLW\ RYHU WKH UXLQV RI DOO SVHXGRDULVWRFUDF\ WR D UHDO QHZ
QRELOLW\
 $32/2*<2)7(&+12/2*<ߟ

0RWWR(WKLFV LV WKH VRXO RI RXU FXOWXUH ߟ WHFKQRORJ\ LWV ERG\ PHQV

VDQD LQ FRUSRUH VDQR
,7+(/2673$5$',6(

7+(&856(2)&8/785(

& XOWXUHKDVWXUQHG(XURSHLQWRDQLQVDQHDV\OXPDQG
WKH PDMRULW\ RI SHRSOH LQWR IRUFHG ODERUHUV 7KH
KXPDQRIWKHPRGHUQFXOWXUHHNHVRXWDOLYLQJWKDWLV
PRUHPLVHUDEOHWKDQWKDWRIDQDQLPDOOLYLQJLQWKHZLOG7KHRQO\OLYLQJ
EHLQJVWKDWDUHHYHQPRUHSLWLIXODUHGRPHVWLFDQLPDOVEHFDXVHWKH\DUH
HYHQOHVVIUHH
7KH H[LVWHQFH RI D EXIIDOR LQ WKH MXQJOH D FRQGRU LQ WKH $QGHV D
VKDUNLQWKHRFHDQLVXQEHOLHYDEO\PRUHEHDXWLIXOIUHHUDQGKDSSLHUWKDQ
WKDWRID(XURSHDQIDFWRU\ZRUNHUZKRGD\LQDQGGD\RXWKRXUDIWHU
KRXU FKDLQHG WR D PDFKLQH SHUIRUPV LQRUJDQLF KDQG PRYHPHQWV LQ
RUGHUQRWWRVWDUYH
,QSUHKLVWRULFWLPHVPDQZDVDOVRDKDSS\EHLQJDKDSS\DQLPDO+H
OLYHGLQIUHHGRPDVDSDUWRIWKHWURSLFDOQDWXUHZKLFKIHGDQGZDUPHG
KLP +LV OLIH FRQVLVWHG RI VDWLVI\LQJ KLV XUJHV +H HQMR\HGOLIHXQWLOKH
PHWDQDWXUDORUDYLROHQWGHDWK+HZDVIUHHOLYHGLQQDWXUHLQVWHDGRI
LQWKHVWDWHKHSOD\HGLQVWHDGRIZRUNWKHUHIRUKHZDVEHDXWLIXODQG
KDSS\+LVFRXUDJHDQGKLVMR\ZHUHJUHDWHUWKDQDQ\SDLQWKDWKHIHOWRU
GDQJHUVWKDWKHIDFHG
2YHU WKH PLOOHQQLD PDQ ORVW WKLV GHOLFLRXV IUHH H[LVWHQFH 7KH
(XURSHDQV ZKR WKLQN RI WKHPVHOYHV DV WKH JORU\ RI FLYLOL]DWLRQ OLYH
XQQDWXUDOXJO\XQIUHHXQKHDOWK\DQGOLYHVLQXQQDWXUDODQGXJO\FLWLHV
:LWK ZLWKHUHG LQVWLQFWV DQG ZHDN KHDOWK KH EUHDWKHV EDG DLU LQ GDUN
URRPVRUJDQL]HGVRFLHW\WKHVWDWHUREVKLPRIDQ\IUHHGRPWRPRYHRU
DFWZKLOHWKHKDUVKFOLPDWHIRUFHVKLPWRZRUNKLVHQWLUHOLIH
7KHIUHHGRPKHRQFHNQHZKHKDVORVWDQGZLWKLWKLVOXFN

'(9(/230(17$1')5(('20

:LWK DOO OLIH RQ HDUWK WKH HQG JRDO LV GHYHORSPHQW 5RFNV ZLOO
FU\VWDOL]H SODQWV ZLOO JURZ DQG EORRP KXPDQV DQG DQLPDOV ZLOO OLYH
7KH SOHDVXUH ZKLFK RQO\ KXPDQV DQG DQLPDOV IHHO KDV QR RWKHU YDOXH
H[FHSWV\PSWRPDWLFDQLPDOVGRQߥWVDWLVI\WKHLULQVWLQFWEHFDXVHLWJLYHV
WKHPSOHDVXUHߟWKH\IHHOSOHDVXUHEHFDXVHWKH\VDWLVI\WKHLULQVWLQFWV
'HYHORSPHQW PHDQV JURZLQJ DFFRUGLQJ WR LQWHUQDO ODZV JURZLQJ
IUHHGRP $Q\ H[WHUQDO SUHVVXUH DQG IRUFH LQKLELW WKH IUHHGRP RI
GHYHORSPHQW ,Q D GHWHUPLQLVWLF ZRUOG IUHHGRP KDV QR RWKHU PHDQLQJ
WKDQ GHSHQGHQFH RQ LQQHU ODZV ZKLOH ERQGDJH PHDQV GHSHQGHQFH RQ
RXWHU FRQGLWLRQV 7KH FU\VWDO GRHV QRW KDYH WKH IUHHGRP WR FKRRVH D
IDYRULWHVKDSHWKHEXGGRHVQRWKDYHWKHIUHHGRPWRJURZLQWRDIDYRULWH
IORZHUEXWWKHIUHHGRPOLHVLQWKHURFNߥVDELOLW\WREHFRPHDFU\VWDODQG
WKDWRIWKHEXGWREHFRPHDIORZHU7KHXQIUHHURFNUHPDLQVDPRUSKRXV
RU FU\VWDOOLQH ߟ WKH XQIUHH EORVVRP ZLWKHUV ,Q ERWK FDVHV WKH H[WHULRU
IRUFH LV VWURQJHU WKDQ WKH LQWHULRU 7KH SURGXFW RI KXPDQ IUHHGRP LV D
GHYHORSHGKXPDQDQXQIUHHKXPDQLVDVWXQWHGKXPDQ
,I PDQ FDQ GHYHORS IUHHO\ KH LV EHDXWLIXO DQG KDSS\ 7KH IUHH
GHYHORSHG PDQ LV WKH JRDO RI DOO GHYHORSPHQW DQG WKH PHDVXUH RI DOO
KXPDQZRUWK
0DQ KDV ORVW DOO IUHHGRP WKLV ZDV WKH RULJLQDO VLQ 7KLV LV KRZ KH
EHFDPHDQXQKDSS\LQFRPSOHWHEHLQJ$OOZLOGDQLPDOVDUHEHDXWLIXOߟ
ZKLOH PRVW KXPDQV DUH XJO\ 7KHUH DUH PRUH SHUIHFW WLJHUV HOHSKDQWV
HDJOHVILVKRULQVHFWVWKDQKXPDQEHLQJVEHFDXVHPDQWKURXJKORVVRI
KLVIUHHGRPVWXQWHGDQGGHJHQHUDWH
7KHSUHKLVWRULFOHJHQGRIWKHSDUDGLVHORVWKHUDOGVWKHWUXWKWKDWPDQ
LVEDQLVKHGIURPWKHNLQJGRPRIIUHHGRPRIOHLVXUHRIQDWXUDOOLYLQJLQ
ZKLFKWKHIDXQDRIWKHMXQJOHVWLOOOLYHVWRGD\DQGWRZKLFKRQO\VRPH
6RXWK6HDLVODQGHUVDUHFORVHVWWR
7KLVORVWSDUDGLVHLVWKHWLPHZKHQKXPDQVOLYHGLQWKHWURSLFVOLNH
DQLPDOVEHFDXVHWKHUHZHUHQRW\HWFLWLHVVWDWHVRUZRUNLQH[LVWHQFH

29(53238/$7,21$1'0,*5$7,21727+(1257+

7ZR WKLQJV GURYH PDQ RXW RI KLV SDUDGLVH RYHUSRSXODWLRQ DQG WKH
PLJUDWLRQ LQWR FROG FOLPDWHV 7KURXJK RYHUSRSXODWLRQ PDQ ORVW WKH
IUHHGRPRIVSDFHHYHU\ZKHUHKHEXPSVLQWRKLVIHOORZPHQDQGWKHLU
LQWHUHVWVߟDQGVREHFDPHDVODYHWRVRFLHW\
 7KURXJK PLJUDWLRQ WR WKH QRUWK PDQ ORVW WKH IUHHGRP RI WLPH KLV
OHLVXUH7KHKDUVKFOLPDWHIRUFHVKLPWRZRUNDJDLQVWKLVZLOOLQRUGHUWR
HNHRXWDOLYLQJ6RKHEHFDPHDVODYHRIQRUWKHUQQDWXUH
&XOWXUHKDVGHVWUR\HGWKHWKUHHIRUPVRIEHDXW\WKDWEHORQJHGWRWKH
QDWXUDO PDQ IUHHGRP OHLVXUH QDWXUH LQ WKHLU SODFH FDPH WKH VWDWH
ZRUNDQGWKHFLW\
7KHFXOWXUHG(XURSHDQLVH[LOHGIURPWKH6RXWKH[LOHGIURPQDWXUH

62&,(7<$1'&/,0$7(

7KH WZR W\UDQWV RI WKH FXOWXUHG (XURSHDQ DUH QDPHG 6RFLHW\ DQG
&OLPDWH
6RFLDOERQGDJHUHDFKHVLWVFOLPD[LQWKHPRGHUQPHWURSROLVEHFDXVH
KHUHRYHUSRSXODWLRQDQGKXVWOHDUHJUHDWHVW7KHUHSHRSOHOLYHQRWRQO\
QH[W WR HDFK RWKHU EXW OD\HUHG RQ WRS RI HDFK DQRWKHU ZDOOHG LQ LQ
DUWLILFLDO EORFNV RI VWRQH KRXVHV  FRQVWDQWO\ JXDUGHG DQG XQGHU
VXVSLFLRQWKURXJKWKHRUJDQVRIVRFLHW\KDYLQJWRVXEPLWWRDQXPEHURI
UXOHVDQGUHJXODWLRQVDQGLIWKH\GRQߥWFRPSO\WKH\ZLOOEHWRUWXUHGIRU
\HDUV ORFNHG XS  RU PXUGHUHG SXW WR GHDWK  6RFLDO XQIUHHGRP LV OHVV
VHYHUHLQWKHFRXQWU\DQGOHDVWVHYHUHLQVSDUVHO\SRSXODWHGDUHDVDVLQ
:HVWHUQ 8QLWHG 6WDWHV RI $PHULFD *UHHQODQG 0RQJROLD RU $UDELD
7KHUH SHRSOH FDQ VWLOO GHYHORS LQ WKH VSDFH ZLWKRXW JHWWLQJ LQ FRQIOLFW
ZLWKVRFLHW\WKHUHVRFLDOIUHHGRPVWLOOH[LVWV
7KH XQIUHHGRP IURP FOLPDWH LV PRVW RSSUHVVLYH LQ WKH FLYLOL]HG
QDWLRQVRIWKH1RUWK7KHUHPDQPXVWZUHVWKLVIRRGIRUWKHHQWLUH\HDU
IURPWKHVXQOHVVHDUWKLQDIHZVKRUWVXPPHUPRQWKVZKLOHDWWKHVDPH
WLPH SURWHFW KLPVHOI IURP WKH ZLQWHU IURVW WKURXJK WKH SURFXUHPHQW
FORWKLQJVKHOWHUDQGKHDW,IKHUHVLVWVWKLVIRUFHGODERUKHZLOOVWDUYHRU
IUHH]HWRGHDWK+HLVIRUFHGWRWHGLRXVH[KDXVWLQJZRUNE\WKHQRUWKHUQ
FOLPDWH+HLVJUDQWHGPRUHIUHHGRPLQPLOGHU]RQHVZKHUHPDQPXVW
VHUYHRQO\RQHW\UDQWKXQJHUߟZKLOHWKHRWKHUIURVWLVUHVWUDLQHGE\WKH
VXQ)UHHVWLVWKHWURSLFDOPDQEHFDXVHKHFDQHDWIUXLWDQGQXWVZLWKRXW
KDYLQJWRZRUN2QO\WKHUHH[LVWVIUHHGRPIURPFOLPDWH
(XURSH LV DQ RYHUSRSXODWHG 1RUWKHUQ VWULS RI ODQG WKHUHIRUH WKH
(XURSHDQLVWKHPRVWXQIUHHPDQDVODYHWRVRFLHW\DQGQDWXUH
 6RFLHW\DQGQDWXUHVXSSO\HDFKRWKHUߥVYLFWLPVWKHPDQZKRHVFDSHV
WKHFLW\IRUWKHFRXQWU\LQRUGHUWROHDYHWKHKXVWOHRIVRFLHW\RQO\WREH
WKUHDWHQHGE\WKHFUXHOFOLPDWHKXQJHUDQGIURVW7KHPDQZKRHVFDSHV
WKH IRUFHV RI QDWXUH DQG PRYHV WR WKH FLW\ LQ RUGHU WR ILQG VDIHW\ LV
WKUHDWHQHGE\DUXWKOHVVVRFLHW\WKDWH[SORLWVDQGFUXVKHVKLP

/,%(5$7,21$77(03762)0$1.,1'

:RUOG KLVWRU\ FRQVLVWV RI OLEHUDWLRQ DWWHPSWV RI KXPDQV IURP WKH
SULVRQRIVRFLHW\DQGH[LOHRIWKHQRUWK
7KHIRXUPDLQZD\VLQZKLFKKXPDQLW\KDVWLHGWRUHWXUQWRWKHORVW
SDUDGLVHDQGOHLVXUHZHUHWKHVH
,7KH ZD\ EDFN HPLJUDWLRQ  WR SULYDF\ DQG WR WKH VXQ :LWK
WKLV JRDO SHRSOH DQG QDWLRQV KDYH EHHQ PLJUDWLQJ IURP GHQVHO\
SRSXODWHG VWULSV RI ODQG WR VSDUVHO\ SRSXODWHG DQG IURP FROGHU WR
ZDUPHU DUHDV $OPRVW DOO PLJUDWLRQV RI WKH QDWLRQV DQG D ODUJH
QXPEHU RI ZDUV FDQ EH WUDFHG EDFN WR WKLV RULJLQDO \HDUQLQJ IRU
IUHHGRPRIPRYHPHQWDQGIRUWKHVXQ
,,7KH ZD\ WR WKH WRS SRZHU  RXW RI WKH KXPDQ KXVWOH LQWR
VHFOXVLRQIUHHGRPDQGOHLVXUHRIWKHߨWRSWHQWKRXVDQGߩ7KLVFDOO
VRXQGHGZKHQGXHWRRYHUSRSXODWLRQSRZHUEHFDPHDSUHFRQGLWLRQ
IRU IUHHGRP DQG GXH WR FOLPDWH FRQGLWLRQV SRZHU EHFDPH WKH
SUHFRQGLWLRQ IRU OHLVXUH 2QO\ WKH SRZHUIXO FDQ GHYHORS ZLWKRXW
KDYLQJWREHFRQVLGHUDWHRIKLVIHOORZPDQߟRQO\WKHSRZHUIXOFDQ
HVFDSH IRUFHG ODERU E\ PDNLQJ RWKHUV ZRUN IRU KLP ,Q
RYHUSRSXODWHGQDWLRQVKHPXVWFKRRVHEHWZHHQZDONLQJDOORYHUKLV
IHOORZ PDQ RU EHLQJ ZDONHG RQ WR EH ORUG RU VHUYDQW UREEHU RU
EHJJDU 7KLV JHQHUDO XUJH IRU SRZHU ZDV WKH IDWKHU RI ZDUV
UHYROXWLRQVDQGEDWWOHVEHWZHHQSHRSOH
,,,7KHZD\LQZDUG HWKLFV DZD\IURPWKHRXWZDUGKXVWOHLQWR
WKH LQZDUG VHFOXVLRQ IURP WKH RXWZDUG ODERU LQWR WKH LQQHU
KDUPRQ\ /LEHUDWLRQ RI PDQ WKURXJK VHOIFRQWURO VHOIFRQVWUDLQW
VDFULILFHDVSURWHFWLRQIURPQHHGLQHVVWKHVFDOLQJEDFNRIVWDQGDUGV
RIOHLVXUHDQGIUHHGRPXQWLOWKH\PHHWWKHPLQLPXPUHTXLUHGIRUDQ
RYHUSRSXODWHGVRFLHW\LQDKDUVKFOLPDWH$OOUHOLJLRXVPRYHPHQWV
FDQ EH WUDFHG EDFN WR WKLV XUJH WR VXEVWLWXWH WKH RXWHU XQIUHHGRP
DQGODERUZLWKWKHFDOPQHVVRIWKHKHDUW
,97KHZD\IRUZDUG WHFKQRORJ\ RXWRIWKHHUDRIVODYHODERU
LQWR D QHZ HUD RI IUHHGRP DQG OHLVXUH WKURXJK WKH YLFWRU\ RI WKH
KXPDQ VSLULW RYHU WKH IRUFHV RI QDWXUH 7KH RYHUFRPLQJ RI
RYHUSRSXODWLRQWKURXJKLQFUHDVHLQSURGXFWLYLW\DQGRIVODYHODERU
WKURXJKWKHHQVODYHPHQWRIWKHIRUFHVRIQDWXUH7HFKQRORJLFDODQG
VFLHQWLILF SURJUHVV LV EDVHG RQ WKLV XUJH WR EUHDN WKH W\UDQQ\ RI
QDWXUH
,,(7+,&6$1'7(&+12/2*<

7+(62&,$/48(67,21

7 KHTXHVWLRQDERXWWKHGHVWLQ\RI(XURSHDQFXOWXUHLV
ߨ+RZZLOOLWEHSRVVLEOHWRSURWHFWPDQNLQGOLYLQJRQ
DQDUURZFROGDQGEDUUHQVWULSRIODQGIURPIDPLQH
K\SRWKHUPLD KRPLFLGH DQG H[KDXVWLRQ DQG JLYH WR LW WKH IUHHGRP DQG
OHLVXUHWKDWRQFHJDYHLWKDSSLQHVVDQGEHDXW\"ߩ
7KHDQVZHULVߨ7KURXJKWKHGHYHORSPHQWRIHWKLFVDQGWHFKQRORJ\ߩ
(WKLFVLQVFKRROVWKHSUHVVDQGLQUHOLJLRQFDQWUDQVIRUP(XURSHDQPDQ
IURPSUHGDWRULQWRDGRPHVWLFDQLPDODQGPDNHKLPPDWXUHHQRXJKIRU
DIUHHVRFLHW\7HFKQRORJ\FDQJLYHWKH(XURSHDQIUHHWLPHDQGHQHUJ\
WKURXJK LQFUHDVHG SURGXFWLYLW\ DQG WKURXJK RSHUDWLQJ PDFKLQHVLQVWHDG
RIKDUGODERUZKLFKLVQHHGHGWRH[SDQGFXOWXUH
(WKLFV VROYHV WKH VRFLDO SUREOHP IURP ZLWKLQ WHFKQRORJ\ IURP
ZLWKRXW ߟ LQ (XURSH RQO\ WZR FODVVHV RI SHRSOH KDYH WKH SUHUHTXLVLWHV
IRU KDSSLQHVV WKH ULFK EHFDXVH WKH\ FDQ GR DQG KDYH ZKDWHYHU WKH\
ZDQW DQG WKH KRO\ EHFDXVH WKH\ GRQߥW ZDQW WR GR RU KDYH PRUH WKDQ
WKHLU GHVWLQ\ JUDQWV WKHP 7KH ULFK FRQTXHU DQ REMHFWLYH IUHHGRP
WKURXJKWKHSRZHUWKH\KDYHWRWXUQWKHLUIHOORZPHQDQGWKHIRUFHVRI
QDWXUH LQWR D WRRO IRU WKHLU ZLOO ߟ DQG WKH KRO\ FRQTXHU D VXEMHFWLYH
IUHHGRPWKURXJKWKHLULQGLIIHUHQFHZLWKZKLFKWKH\YLHZHDUWKO\JRRGV
7KHULFKFDQGHYHORSRXWZDUGO\ߟWKHKRO\LQZDUGO\
$OO UHPDLQLQJ (XURSHDQV DUH VODYHV RI QDWXUH DQG VRFLHW\ IRUFHG
ODERUHUVDQGSULVRQHUV

,1$'(48$&<2)32/,7,&6

,WLVWKHLGHDORIHWKLFVWRFUHDWHDVRFLHW\RIVDLQWVLQ(XURSHLWLVWKH
LGHDO RI WHFKQRORJ\ WR FUHDWH D VRFLHW\ RI ZHDOWK\ (XURSHDQV (WKLFV
ZDQWVWRDEROLVKJUHHGVRWKDWSHRSOHGRQߥWIHHOSRRUߟWHFKQRORJ\ZDQWV
WRDEROLVKKDUGVKLSVRWKDWSHRSOHGRQߥWKDYHWREH SRRU
3ROLWLFVLVQRWLQDSRVLWLRQWRPDNHSHRSOHKDSS\RUULFK7KDWLVZK\
WKHLUDUELWUDU\DWWHPSWVWRDQVZHUWKHVRFLDOTXHVWLRQPXVWIDLO2QO\LQ
WKHVHUYLFHRIHWKLFVRUWHFKQRORJ\FDQSROLWLFVSDUWLFLSDWHLQWKHVROXWLRQ
RIWKHVRFLDOTXHVWLRQ
:LWKWKHFXUUHQWVWDWHRIHWKLFVDQGWHFKQRORJ\SROLWLFVZRXOGRQO\EH
DEOHWRXQLYHUVDOL]HXQIUHHGRPSRYHUW\DQGIRUFHGODERU,WFRXOGRQO\
HTXDOL]HWKHHYLOQRWFDQFHOLW,WFRXOGWXUQ(XURSHLQWRDSHQLWHQWLDU\RI
HTXDO VODYHV ߟ EXW QRW D SDUDGLVH 7KH FLWL]HQ RI WKH LGHDO VRFLDO VWDWH
WRGD\ZRXOGEHOHVVIUHHDQGPRUHWRUPHQWHGWKDQ6RXWK6HHLVODQGHUVLQ
WKHLUQDWXUDOVWDWH&XOWXUDOKLVWRU\ZRXOGEHWKHKLVWRU\RIDGLVDVWURXV
IUDXGRQKXPDQLW\

67$7($1'(03/2<0(17

$VORQJDVHWKLFVDUHWRRLQVLJQLILFDQWWRSURWHFWKXPDQEHLQJVIURP
HDFKRWKHUDQGWHFKQRORJ\QRWGHYHORSHGHQRXJKWRVKLIWWKHZRUNORDG
RQWRWKHIRUFHVRIQDWXUHKXPDQLW\ZLOOWU\WRZDUGRIIWKHGDPDJHVRI
RYHUSRSXODWLRQ WKURXJK WKH VWDWH WKH GDPDJHV RI WKH FOLPDWH WKURXJK
ZRUN
7KHVWDWHSURWHFWVKXPDQVIURPDUELWUDULQHVVRIRWKHUKXPDQVߟZRUN
SURWHFWVKLPIURPWKHIRUFHVRIQDWXUH
7KH RUJDQL]HG ߨFRHUFLYH VWDWHߩ JUDQWV XQGHU FHUWDLQ FRQGLWLRQV
SURWHFWLRQIURPPXUGHUDQGUREEHU\RIFLWL]HQVZKRDUHZLOOLQJWRJLYH
XS WKHLU IUHHGRP DQG RUJDQL]HG IRUFHG ODERU JUDQWV SURWHFWLRQ IURP
KXQJHUDQGIURVWWRWKRVHZLOOLQJWRJLYHXSWKHLUHQHUJ\DQGWLPH
7KHVHWZRLQVWLWXWLRQVSDUGRQWKH(XURSHDQVZKRQDWXUDOO\ZRXOGEH
GRRPHG WR GLH WR OLIHORQJ IRUFHG ODERU 7R VDYH WKHLU OLYHV WKH\ PXVW
JLYHXSWKHLUIUHHGRP$VDFLWL]HQRIWKHVWDWHKHLVORFNHGLQWRWKHFDJH
RIKLVULJKWVDQGREOLJDWLRQVߟDVIRUFHGODERUHULQWKHKDUG\RNHRIKLV
SHUIRUPDQFH ,I KH UHMHFWV WKH VWDWH KH IDFHV WKH JDOORZV LI KH UHMHFWV
ODERUKHIDFHVVWDUYDWLRQ

$1$5&+<$1'/(,685(

%RWK WKH VWDWH DQG ODERU SUHWHQG WR EH LGHDOV ߟ GHPDQGLQJ DZH DQG
ORYH IURP WKHLU YLFWLPV %XW WKH\ DUH QRW LGHDOV ߟ WKH\ DUH VRFLDO DQG
FOLPDWLFQHFHVVLWLHVZKLFKDUHXQEHDUDEOH
 6LQFHWKHVWDWHVFDPHLQWRH[LVWHQFHKXPDQLW\GUHDPVRIDQDUFK\WKH
LGHDO FRQGLWLRQ WKDW LV IUHH RI WKH VWDWH DQG VLQFH ODERU FDPH LQWR
H[LVWHQFHKXPDQVGUHDPRIOHLVXUHWKHLGHDOFRQGLWLRQRIIUHHWLPH
$QDUFK\DQGOHLVXUHDUHLGHDOVߟQRWVWDWHDQGODERU
$QDUFK\ LV QRW SRVVLEOH LQ D GHQVHO\ SRSXODWHG VRFLHW\ ZKLFK GRHV
QRWKDYHKLJKHWKLFDOVWDQGDUGV,WVUHDOL]DWLRQZRXOGKDYHWRGHVWUR\WKH
UHPDLQLQJIUHHGRPDQGFKDQFHRIVXUYLYDORIWKHFLWL]HQV,QWKHJHQHUDO
SDQLF RI FROOLGLQJ HJRV SHRSOH ZRXOG RSSUHVV HDFK RWKHU $QDUFK\
ZRXOGOHDGWRWRWDOXQIUHHGRP
8QLYHUVDO OHLVXUH ZRXOG OHDG WR WKH GHDWK E\ VWDUYDWLRQ RU
K\SRWKHUPLDRIWKHPDMRULW\RISHRSOHLQWKHQRUWK'LVWUHVVDQGPLVHU\
ZRXOGUHDFKWKHLUSHDN
,QVXODWHGDQDUFK\H[LVWVLQWKHGHVHUWVRI%HGRXLQVDQGLQWKHVQRZ
ILHOGVRI(VNLPRV/HLVXUHH[LVWVLQWKLQO\SRSXODWHGDQGIHUWLOHVRXWKHUQ
QDWLRQV

29(5&20,1*2)67$7($1'/$%25

7KH FRHUFLYH VWDWH DQG IRUFHG ODERU WKH SURWHFWRUV DQG W\UDQWV RI
FLYLOL]DWLRQ FDQQRW EH RYHUFRPH E\ D SROLWLFDO UHYROXWLRQ EXW RQO\ E\
HWKLFV DQG WHFKQRORJ\ 8QWLO HWKLFV RYHUFRPHV WKH FRHUFLYH VWDWH
DQDUFK\PHDQVXQLYHUVDOPXUGHUDQGWKHIWXQWLOWHFKQRORJ\RYHUFRPHV
IRUFHG ODERU OHLVXUH FDQ RQO\ PHDQ XQLYHUVDO VWDUYDWLRQ DQG
K\SRWKHUPLD
2QO\WKURXJKHWKLFVFDQFLWL]HQVRIRYHUSRSXODWHGQDWLRQVHVFDSHWKH
W\UDQQ\RIVRFLHW\DQGWKURXJKWHFKQRORJ\WKHFLWL]HQVLQFROGFOLPDWHV
FDQHVFDSHWKHW\UDQQ\RIWKHIRUFHVRIQDWXUH
0LVVLRQRIWKHVWDWHLVWRPDNHLWVHOIXQQHFHVVDU\WKURXJKHWKLFVDQG
ILQDOO\ OHDG WR DQDUFK\ 0LVVLRQ RI ODERU LV WR PDNH LWVHOI XQQHFHVVDU\
WKURXJKWHFKQRORJ\DQGILQDOO\OHDGWROHLVXUH
7KH YROXQWDU\ KXPDQ VRFLHW\ LV QRW D FXUVH ߟ RQO\ WKH IRUFHG VWDWH
9ROXQWDU\ ODERU LV QRW D FXUVH ߟ RQO\ IRUFHG ODERU 1RW ZDQWRQQHVV LV
LGHDOEXWIUHHGRPQRWOD]LQHVVEXWOHLVXUH
7KHFRHUFLYHVWDWHDQGIRUFHGODERUDUHWKLQJVWKDWPXVWEHRYHUFRPH
EXW WKH\ FDQQRW EH RYHUFRPH E\ DQDUFK\ DQG OHLVXUH EHIRUH HWKLFV DQG
WHFKQRORJ\ DUH FRPSOHWH WR DFKLHYH WKLV KXPDQV PXVW GHYHORS WKH
FRHUFLYH VWDWH WR GHYHORS HWKLFV DQG GHYHORS IRUFHG ODERU WR GHYHORS
WHFKQRORJ\
7KHURDGWRDQHWKLFDODQDUFK\OHDGVWKURXJKDIRUFHGVWDWHDQGOHDGV
WRWHFKQLFDOOHLVXUHWKURXJKIRUFHGODERU
7KH FXUYHV RI WKH FXOWXUDO VSLUDO WKDW OHDGV IURP WKH SDUDGLVH RI WKH
SDVWWRWKHSDUDGLVHRIWKHIXWXUHUXQDVIROORZV
1DWXUDODQDUFK\ߟRYHUSRSXODWLRQߟFRHUFLYHVWDWHߟHWKLFVߟFXOWXUDO
DQDUFK\
$QG QDWXUDO OHLVXUH ߟ HPLJUDWLRQ WR WKH QRUWK ߟ IRUFHG ODERU ߟ
WHFKQRORJ\ߟFXOWXUDOOHLVXUH
:HDUHFXUUHQWO\LQWKHFHQWHURIWKHVHFXUYHVHTXDOO\IDUIURPERWK
SDVWDQGIXWXUHSDUDGLVHWKDWLVWKHUHDVRQIRURXUPLVHU\7KHDYHUDJH
PRGHUQ (XURSHDQ LV QR ORQJHU D QDWXUDO KXPDQ EHLQJ  EXW QRW \HW
FLYLOL]HGQRORQJHUDQLPDOEXWQRW\HWKXPDQQRORQJHUSDUWRIQDWXUH
EXWQRW\HWUXOHURIQDWXUH

(7+,&6$1'7(&+12/2*<

(WKLFV DQG WHFKQRORJ\ DUH VLVWHUV (WKLFV UXOH WKH QDWXUDO HQHUJ\
ZLWKLQXVߟWHFKQRORJ\UXOHVWKHQDWXUDOIRUFHVDURXQGXV%RWKVHHNWR
FRQTXHUQDWXUHWKURXJKIRUPDWLYHVSLULW
(WKLFV VHHN WR UHGHHP KXPDQLW\ WKURXJK KHURLF GHQLDO ߟ WHFKQRORJ\
WKURXJKKHURLFDIILUPDWLRQ DFWLRQ 
(WKLFV WXUQ WKH ZLOO WR SRZHU LQZDUG LW ZDQWV WR FRQTXHU WKH
PLFURFRVP 7HFKQRORJ\ WXUQV WKH ZLOO WR SRZHU RXWZDUG LW ZDQWV WR
FRQTXHU WKH PDFURFRVP 1HLWKHU HWKLFV QRU WHFKQRORJ\ DORQH FDQ VDYH
WKHQRUWKHUQPDQEHFDXVHDVWDUYLQJDQGIUHH]LQJPDQFDQQRWEHVDWHG
DQGZDUPHGWKURXJKHWKLFVDQGDZLFNHGDQGFRYHWRXVPDQNLQGFDQQRW
EHSURWHFWHGIURPLWVHOI
:KDWJRRGDUHPRUDOVLIKXPDQLW\VWDUYHVDQGIUHH]HV":KDWJRRGLV
WHFKQRORJLFDO SURJUHVV LI KXPDQV PLVXVH LW WR VODXJKWHU DQG PDLP RQH
DQRWKHU"
&LYLOL]HG $VLD VXIIHUV IURP RYHUSRSXODWLRQ PRUH WKDQ IURP
K\SRWKHUPLD ,W FRXOG WKHUHIRU IRUJR WHFKQRORJ\ PXFK HDVLHU WKDQ
(XURSHZKHUHHWKLFVDQGWHFKQRORJ\PXVWFRPSOHPHQWHDFKRWKHU
,,,$6,$$1'(8523(

$6,$$1'(8523(

$ VLDߥVJUHDWQHVVOLHVLQLWVHWKLFVߟ(XURSHߥVJUHDWQHVV
LQ LWV WHFKQRORJ\ $VLD LV D WHDFKHU PDVWHU RI VHOI
FRQWUROIRUWKHZRUOG(XURSHLVWKHWHDFKHUPDVWHU
LQWKHPDVWHU\RYHUQDWXUH,Q$VLDWKHPDLQIRFXVRIWKHVRFLDOTXHVWLRQ
LVLQRYHUSRSXODWLRQLQ(XURSHLWLVLQFOLPDWH
$VLD PXVW HQDEOH SHDFHIXO FRKDELWDWLRQ RI WKH PDMRULW\RISHRSOHLW
FDQDFFRPSOLVKWKLVWKURXJKHGXFDWLQJLWVFLWL]HQVLQHWKLFV VHOIOHVVQHVV
DQGVHOIFRQWURO 
(XURSH PXVW H[RUFLVH WKH KRUURUV RI VWDUYDWLRQ DQG K\SRWKHUPLD
ZKLFKFRQVWDQWO\WKUHDWHQKHUFLWL]HQV6KHFDQDFKLHYHWKLVRQO\WKURXJK
WHFKQRORJ\ ZRUN DQG LQYHQWLRQ  7KHUH DUH WZR FRUH YDOXHV LQ OLIH
KDUPRQ\DQGHQHUJ\ߟRQZKLFKDOORWKHUYDOXHVDUHGHSHQGHQW
$VLDߥVJUHDWQHVVDQGEHDXW\GHSHQGVRQKDUPRQ\
(XURSHߥV JUHDWQHVV DQG EHDXW\ GHSHQGV RQ HQHUJ\ $VLD OLYHV LQ WKH
GLPHQVLRQ RI VSDFH LWV VSLULW LV WUDQTXLO LQZDUGORRNLQJ FDOP LW LV
IHPLQLQH SODQWOLNH VWDWLF $SROORQLDQ FODVVLF LG\OOLF (XURSH OLYHV LQ
WKHGLPHQVLRQRIWLPHLWVVSLULWLVDFWLYHGLUHFWHGRXWZDUGVPRYLQJDQG
GHWHUPLQHGLWLVPDVFXOLQHDQLPDOLVWLFG\QDPLF'LRQ\VLDQURPDQWLF
KHURLF
$VLDߥV V\PERO LV WKH DOOHQFRPSDVVLQJ VHD WKH FLUFOH  (XURSHߥV
V\PEROLVWKHIRUZDUGORRNLQJSRZHUWKHVWUDLJKWOLQH+HUHWKHGHHSHVW
PHDQLQJ RI WKH FRVPLF V\PEROV WKH $OSKD DQG 2PHJD LV UHYHDOHG ,W
FRQYH\V WR XV WKH P\VWLFDO UHFXUUHQW SRODULW\ RI IRUFH DQG IRUP WLPH
DQGVSDFHPDQDQGFRVPRVWKDWKLGHVEHKLQGWKHVRXOVRI(XURSHDQG
$VLDWKHFDSLWDO2PHJDWKHFLUFOHWKDWRSHQVWKHJDWHWRWKHFRVPRVLV
D V\PERO RI WKH GLYLQH KDUPRQ\ RI $VLD WKH FDSLWDO $OSKD D VKDUS
XSZDUGVSRLQWLQJ DUURZ WKDW SLHUFHV WKURXJK WKH FLUFOH LV D V\PERO RI
WKHDFWLRQDQGGHWHUPLQDWLRQ(XURSHߥVZKLFKEUHDNVWKHHWHUQDOFDOPQHVV
RI$VLD$DQG2DUHDOVRLQWKH)UHXGLDQVHQVHXQPLVWDNDEOHV\PEROVRI
PDVFXOLQLW\ DQG IHPLQLQLW\ WKH XQLRQ RI WKHVH V\PEROV VLJQLILHV
FRQFHSWLRQDQGOLIHDVZHOODVUHYHDOVWKHHWHUQDOGXDOLVPRIWKHZRUOG
7KH VDPH V\PEROLVP SUREDEO\ H[LVWV LQ WKH QXPEHUV  DQG  DV WKH
ILQLWHDJDLQVWWKHLQILQLWHߟߨ\HVߩDJDLQVWߨQRߩ

&8/785($1'&/,0$7(

7KHVRXOVRI$VLDDQG(XURSHHPHUJHGRXWRIWKH$VLDQDQG(XURSHDQ
FOLPDWHV$VLDߥVFXOWXUDOFHQWHUVDUHORFDWHGLQZDUPߟ(XURSHߥVFXOWXUDO
FHQWHUVLQFROGDUHDV7KLVUHYHDOVWKHLURSSRVLQJUHODWLRQVKLSVWRQDWXUH
ZKLOHD6RXWKHUQHUIHHOVOLNHDFKLOGDQGDIULHQGRIQDWXUHLQWKH1RUWK
RQHLVIRUFHGWRZUHVWHYHU\WKLQJKHQHHGVWROLYHLQDKDUGEDWWOHDJDLQVW
WKH FROG HDUWK +H KDV WZR FKRLFHV EHLQJ WKH PDVWHU RU WKH VODYH RI
QDWXUHߟDQGGHILQLWHO\DQRSSRQHQW
,QWKH6RXWKWKHFRQIURQWDWLRQEHWZHHQPDQDQGQDWXUHZDVIULHQGO\
KDUPRQLRXV,QWKH1RUWKZDUOLNHDQGKHURLF
(XURSHߥV G\QDPLF H[SODLQV LWVHOI EHFDXVH LW LV WKH FXOWXUDO FHQWHU RI
WKH ZRUOG )RU WHQV RI WKRXVDQGV RI \HDUV FROG DQG ODFN SUHVHQW
(XURSHDQVZLWKDFKRLFHߨ:RUNRUGLHߩ,IRQHFRXOGQߥWZRUNKHKDGWR
VWDUYHWRGHDWKRUGLHRIK\SRWKHUPLD)RUPDQ\JHQHUDWLRQVWKHZLQWHU
KDV V\VWHPDWLFDOO\ HUDGLFDWHG ZHDN SDVVLYH VOXJJLVK LQZDUGORRNLQJ
(XURSHDQVDQGEUHGDKDUGHQHUJHWLFDQGKHURLFKXPDQUDFH
6LQFHSUHKLVWRULFWLPHVWKHZKLWHUDFHߟHYHQORQJHUWKHZKLWHVZLWK
EORQGKDLUߟZUHVWOHZLWKZLQWHUZKLFKPDGHWKHPSDOHUDQGSDOHUEXW
DOVR WRXJKHU DQG WRXJKHU ,W LV WKLV KDUGHQLQJ WKDW (XURSHDQV RZH WKHLU
VXSHULRUKHDOWKDQGHQHUJ\XQWLOWKLVGD\
7KH ZKLWH PDQ LV WKH VRQ RI ZLQWHU WKH ODFN RI VXQVKLQH 7R
RYHUFRPH WKLV KH KDG WR XVH PXVFOH DQG PLQG WR WKH IXOOHVW WR FUHDWH
ߨQHZ VXQVߩ KH KDG WR EDWWOH DQ HWHUQDOO\ XQIULHQGO\ QDWXUH DQG WR
FRQTXHULW
7KH FKRLFH EHWZHHQ DFWLRQ DQG GHDWK FUHDWHG LQ WKH 1RUWK RI HYHU\
FXOWXUH LWV VWURQJHVW PRVW KHURLF W\SH LQ (XURSH LW LV WKH *HUPDQ LQ
$VLDLWLVWKH-DSDQHVHLQ$PHULFDWKH$]WHN+HDWIRUFHVPDQWROLPLW
KLV DFWLYLW\ WR D PLQLPXP WKH FROG IRUFHV KLP WR LQFUHDVH LW WR D
PD[LPXP
7KHDFWLYHKHURLFPDQRIWKH1RUWKKDVDOZD\VFRQTXHUHGWKHPRUH
SDVVLYHKDUPRQLRXV6RXWKIRUWKDWWKHFXOWXUHG6RXWKDVVLPLODWHGDQG
FLYLOL]HG WKH EDUEDULF QRUWKHUQHUV ߟ XQWLO KH ZDV FRQTXHUHG EDUEDUL]HG
DQGUHJHQHUDWHGE\DQHZ1RUWK
0RVW PLOLWDU\ FRQTXHVWV LQ KLVWRU\ DUH VWDUWHG E\ QRUWKHUQ VWDWHV
DJDLQVW WKH 6RXWK DQG PRVW VSLULWXDOUHOLJLRXV FRQIOLFWV VWDUWHG E\
VRXWKHUQVWDWHVDJDLQVWWKH1RUWK
(XURSH ZDV FRQTXHUHG LQ D UHOLJLRXV ZDU E\ WKH -HZV DQG
PLOLWDULVWLFDOO\ E\ *HUPDQV ,Q $VLD WKH UHOLJLRQV RI ,QGLD DQG $UDELD
ZRQZKLOHLWLVSROLWLFDOO\GRPLQDWHGE\-DSDQ
7KH PRUH DFWLYH QDWLRQV RI ZDUPHU DUHDV $UDEV 7XUNV 7DUWDUV
0RQJROLDQV RULJLQDWHGLQGHVHUWVRUVWHSSHV7KHUHLQVWHDGRIWKHFROG
WKHGURXJKWZDVWKHLUGLVFLSOLQDULDQEXWKHUHDOVRLQHYLWDEO\YLFWRU\RI
WKHKHURLFPDQRYHUWKHLG\OOLFWRRNSODFHYLFWRU\RIWKHDFWLYHRYHUWKH
SDVVLYHDQGWKHKXQJU\RYHUWKHZHOOIHG

7+(7+5((5(/,*,216

,QGLDߥVKHDWWKDWSDUDO\]HVHYHU\DFWLYLW\FUHDWHGWKHLUFRQWHPSODWLYH
PHQWDOLW\(XURSHߥVFROGZKLFKIRUFHVKXPDQDFWLYLW\FUHDWHGDQDFWLYH
PHQWDOLW\ &KLQDV WHPSHUDWH FOLPDWH ZKLFK HQFRXUDJHV D KDUPRQLRXV
URWDWLRQ EHWZHHQ DFWLYLW\ DQG WUDQTXLOLW\ FUHDWHG D KDUPRQLRXV
PHQWDOLW\
7KHWKUHHGLIIHUHQWFOLPDWHVFUHDWHGWKUHHGLIIHUHQWW\SHVRIUHOLJLRQV
WKHFRQWHPSODWLYHWKHKHURLFDQGWKHKDUPRQLRXV
7KH KHURLF UHOLJLRQ DQG HWKLFV RI WKH 1RUWK LV H[SUHVVHG LQ (GGD DV
ZHOO DV LQ WKH ZRUOG YLHZ RI (XURSHDQ DQG -DSDQHVH NQLJKWKRRG
H[SHULHQFLQJ LWV UHVXUUHFWLRQ LQ WKH WHDFKLQJV RI 1LHW]VFKH ,WV KLJKHVW
YLUWXH DQG HQHUJ\ DUH WKH EDWWOH DQG WKH KHUR 6LHJIULHG 7KH
FRQWHPSODWLYH UHOLJLRQV DQG HWKLFV RI WKH 6RXWK ILQG SHUIHFWLRQ LQ
%XGGKLVP ,WV KLJKHVW YLUWXH LV VHOIUHVWUDLQW DQG JHQWOHQHVV LWV KLJKHVW
LGHDOLVSHDFHDQGWKH%XGGKD
7KHKDUPRQLRXVUHOLJLRQDQGHWKLFVRIWKHPLGGOHXQIROGHGLQ*UHHFH
LQ WKH :HVW DQG LQ &KLQD LQ WKH (DVW ,W UHTXLUHG QHLWKHU DVFHWLFLVP RI
EDWWOH QRU VHOIUHVWUDLQW ,W LV RSWLPLVWLF DQG ZRUOGO\ ,WV LGHDO LV WKH
QREOH PDQ ZLVH &RQIXFLXV WKH DUWLVW $SROOR 7KH *UHHN LGHDO RI WKH
$SROORQLDQ PDQ VWDQGV LQ WKH PLGGOH LQ EHWZHHQ WKH *HUPDQ KHUR
6LHJIULHGDQGWKH,QGLDQKRO\RQH%XGGKD
$OO UHOLJLRXV RUJDQL]DWLRQV DUH FRPELQDWLRQV RI WKHVH WKUHH EDVLF
W\SHV (YHU\ UHOLJLRQ WKDW VSUHDGV RXW PXVW DGMXVW WR WKHVH FOLPDWLF
FRQGLWLRQV $VLDQ &KULVWLDQV RI WKH VRXWK &DWKROLFV RI WKH PLGGOH DQG
3URWHVWDQWV RI WKH 1RUWK DUH VLPLODU 7KH VDPH DSSOLHV WR %XGGKLVWV LQ
&H\ORQ&KLQDDQG-DSDQ&KULVWLDQLW\KDVWUDQVPLWWHGWKH$VLDQYDOXHV
RIWKH6RXWKLQWRRXUFXOWXUH5HQDLVVDQFHKDVJLYHQXVWKHROGYDOXHVRI
WKHPLGGOHNQLJKWKRRGKDVWUDQVPLWWHGWKH*HUPDQYDOXHVRIWKH1RUWK

+$5021<$1')25&(

(XURSHߥV FXOWXUDO YDOXHV DUH PL[HG  LWV VSLULW LV SUHGRPLQDQWO\

1RUGLF
$VLDQV DUH VXSHULRU WR (XURSHDQV LQ NLQGQHVV DQG ZLVGRP EXU WUDLO
(XURSHDQVLQHQHUJ\DQGFOHYHUQHVV
(XURSHDQ ߨKRQRUߩ LV D KHURLF YDOXH ߟ WKH $VLDQ ߨGLJQLW\ߩ LV D
KDUPRQLF YDOXH &RQVWDQW EDWWOH KDUGHQV FRQVWDQW SHDFH VRIWHQV WKH
KHDUW 7KHUHIRU WKH $VLDQ LV PLOGHU DQG JHQWOHU WKDQ WKH (XURSHDQ
$GGLWLRQDOO\ ,QGLDQ &KLQHVH -DSDQHVH DQG -HZLVK VRFLHW\ LV PXFK
ROGHUWKDQWKDWRI*HUPDQVZKRXQWLO\HDUVDJROLYHGLQDQDUFK\
$VLDQV KDYH GHYHORSHG WKHLU VRFLDO YLUWXHV EHWWHU DQG ORQJHU WKDQ
(XURSHDQV
7KH JRRGQHVV RI WKH KHDUW FRUUHVSRQGV WR WKH ZLVGRP RI WKH PLQG
:LVGRPLVEDVHGRQKDUPRQ\LQWHOOLJHQFHLVEDVHGRQVKDUSQHVVRIWKH
PLQG
:LVGRPLVDIUXLWRIWKHPRUHPDWXUH6RXWKEXWUDUHO\H[LVWVLQWKH
1RUWK (YHQ WKH (XURSHDQ SKLORVRSKHUV DUH UDUHO\ ZLVH WKH HWKLFLVWV
UDUHO\NLQG$QFLHQWFXOWXUHZDVULFKHULQZLVHPHQZKRVHSHUVRQDOLWLHV
ZHUHPDUNHGE\VSLULWXDOLW\ZKHUHDVWKH\DUHDOPRVWH[WLQFWLQPRGHUQ
(XURSH XQGHU&KULVWLDQLW\ 7KHUHDVRQLVWKHUHODWLYHO\\RXQJ*HUPDQ
FXOWXUHDQGWKHYHKHPHQFHRIWKH*HUPDQVSLULW$OVRWKHPRQDVWHULHV
ZHUHWKHRQO\VDQFWXDULHVIRUFRQWHPSODWLYHZLVGRPLQWKHPLGGOHDJHV
7KHZLVHPHQUHWUHDWHGDQGGLHGWKHUHDVYLFWLPVRIWKHLUFKDVWLW\YRZV
 (XURSHDQ GHSLFWLRQV RI &KULVW DUH VHULRXV DQG VDG ZKLOH %XGGKDߥV
VWDWXHVVPLOH(XURSHDQWKLQNHUVDUHGHHSO\VHULRXVZKHUHDVWKHZLVHLQ
$VLDVPLOHEHFDXVHWKH\OLYHLQKDUPRQ\ZLWKWKHPVHOYHVWKHLUVRFLHW\
DQG ZLWK QDWXUH ߟ QRW LQ EDWWOH WKH\ WU\ HYHU\ UHIRUP RQ WKHPVHOYHV
LQVWHDG RI RWKHUV DQG KDYH DQ HIIHFW RQ RWKHUV WKURXJK WKHLU H[DPSOH
UDWKHU WKDQ ERRNV %H\RQG WKLQNLQJ WKH\ UHGLVFRYHU WKHLU FKLOGKRRG 
ZKLOH(XURSHߥVWKLQNHUVDJHWRRHDUO\
1HYHUWKHOHVV (XURSH LV DV JUHDW DV $VLD EXW KHU JUHDWQHVV GRHV QRW
OLH LQ KHU JRRGQHVV RU KHU ZLVGRP ߟ EXW LQ KHU SURGXFWLYLW\ DQG
LQQRYDWLRQ
(XURSHLVWKHKHURRIWKHZRUOGRQHYHU\EDWWOHIURQWRIKXPDQLW\LW
LV DW WKH WRS LQ KXQWLQJ ZDU DQG WHFKQRORJ\ (XURSHDQV KDYH
DFFRPSOLVKHGPRUHWKDQDQ\RWKHUFXOWXUHLQKLVWRU\7KH\KDYHDOPRVW
HUDGLFDWHG DOO GDQJHURXV DQLPDOV FRQTXHUHG DOPRVW DOO GDUNVNLQQHG
QDWLRQVDVZHOODVWKURXJKVFLHQFHDQGWHFKQRORJ\DFKLHYHGVXFKWRWDO
GRPLQDWLRQRYHUQDWXUHDVQHYHUKDVEHHQWKRXJKWSRVVLEOH$VLDߥVZRUOG
PLVVLRQ LV WKH VDOYDWLRQ RI KXPDQLW\ WKURXJK HWKLFV ߟ (XURSHߥV ZRUOG
PLVVLRQLVWROLEHUDWHKXPDQLW\WKURXJKWHFKQRORJ\
(XURSHߥVV\PEROLVQRWWKHZLVHWKHVDLQWWKHPDUW\UߟEXWWKHKHUR
WKHILJKWHUWKHZLQQHUWKHOLEHUDWRU
,9(8523(ߥ67(&+12/2*,&$/:25/'
0,66,21

7+((8523($163,5,7

: LWK WKH PRGHUQ DJH EHJLQV WKH FXOWXUDO PLVVLRQ

(XURSHߥV 7KH HVVHQFH RI (XURSH LV WKH ZLOO WR
FKDQJH DQG LPSURYH WKH ZRUOG WKURXJK DFWLRQ
(XURSH FRQVFLRXVO\ VWULYHV IURP WKH SUHVHQW LQWR WKH IXWXUH LW LV LQ D
FRQVWDQWVWDWHRIHPDQFLSDWLRQUHIRUPDWLRQUHYROXWLRQLWLVDGGLFWHGWR
UHQHZDOVNHSWLFDOLPSLRXVDQGZUHVWOHVZLWKLWVFXVWRPVDQGWUDGLWLRQV
,Q-HZLVKP\WKRORJ\WKH(XURSHDQVSLULWFRUUHVSRQGVWR/XFLIHUߟLQ
WKH*UHHN3URPHWKHXVWKHOLJKWEULQJHUZKRFDUULHVWKHGLYLQHVSDUNWR
HDUWK DQG ZKR UHEHOV DJDLQVW WKH KHDYHQO\$VLDQ KDUPRQ\ WKH GLYLQH
ZRUOGRUGHUWKHSULQFHRIWKHZRUOGWKHIDWKHURIEDWWOHRIWHFKQRORJ\
RI HQOLJKWHQPHQW DQG RI SURJUHVV WKH OHDGHU RI PDQ LQ KLV VWUXJJOH
DJDLQVWQDWXUH
7KH VSLULW RI (XURSH KDV EURNHQ SROLWLFDO GHVSRWLVP DQG WKH
GRPLQDWLRQRIWKHIRUFHVRIQDWXUH7KH(XURSHDQGRHVQRW\LHOGWRKLV
IDWHEXWVHHNVWRPDVWHULWWKURXJKKLVDFWLRQVDQGPLQGDVDQDFWLYLVW
DQGDUDWLRQDOLVW

*5((&($635((8523(

*UHHFH ZDV WKH SUHFXUVRU RI (XURSH LW ILUVW SHUFHLYHG WKH HVVHQWLDO
GLIIHUHQFHEHWZHHQLWVHOIDQG$VLDDQGGLVFRYHUHGLWVDFWLYLVWUDWLRQDOLVW
VRXO,WV2O\PSXVZDVQRWWKHSDUDGLVHRISHDFHEXWDVLWHRIEDWWOHVLWV
KLJKHVWJRGZDVDQLPSLRXVUHEHO*UHHFHRYHUWKUHZNLQJVDQGJRGVDQG
SXWLQWKHLUSODFHWKHVWDWHRIWKHFLWL]HQDQGWKHUHOLJLRQRIPDQ
7KLV(XURSHDQSHULRGRI*UHHFHEHJDQZLWKWKHIDOORIWKHW\UDQWVDQG
HQGHG ZLWK WKH ߨ$VLDQߩ GHVSRWLVP RI $OH[DQGHU DQG KLV VXFFHVVRUV LW
ZDVEULHIO\FRQWLQXHGLQWKHUHSXEOLFRI5RPHDQGHQGHGIRUJRRGZLWK
WKH5RPDQ(PSLUH
 $OH[DQGHU WKH *UHDW *UHHN NLQJV DQG 5RPDQ HPSHURUV ZHUH WKH
KHLUV RI WKH $VLDQ LGHD RI JUHDW NLQJGRPV 7KH 5RPDQ HPSLUH ZDV QR
GLIIHUHQW IURP WKH GHVSRWLF UHJLPHV LQ &KLQD 0HVRSRWDPLD ,QGLD DQG
3HUVLD
,QWKHPLGGOHDJHV(XURSHZDVDFXOWXUDOVXEXUERI$VLD,WZDVUXOHG
E\WKH$VLDQUHOLJLRQRI-HVXV(XURSHDQUHOLJLRXVFXOWXUHP\VWLFPRRG
PRQDUFKLFDO IRUP RI JRYHUQPHQW DQG WKH GXDOLVP RI SRSHV DQG
HPSHURUVRIPRQNVDQGNQLJKWVߟWKHVHZHUHDOO$VLDQ
(XURSHFDPHWRLWVVHQVHVWKURXJKWKHHPDQFLSDWLRQIURP&KULVWLDQLW\
WKDW VWDUWHG ZLWK WKH UHQDLVVDQFH DQG UHIRUPDWLRQ DQG FRQWLQXHG ZLWK
1LHW]VFKHDQGVSLULWXDOO\VHSDUDWHGIURP$VLD

7+(7(&+1,&$/%$6,&62)(8523(

7KH ZRUOG RI 3KLOLSS ,, GLG QRW VLJQLILFDQWO\ DOWHU RXU ZRUOG FXOWXUH
VLQFHWKH+DPPXUDEL1HLWKHULQDUWQRUVFLHQFHQRWSROLWLFVMXGLFLDU\
RUDGPLQLVWUDWLRQ7KHZRUOGKDVFKDQJHGPRUHGUDPDWLFDOO\LQWKHODVW
\HDUVWKDQLQWKH\HDUVSULRU
,W ZDV WHFKQRORJ\ WKDW DZRNH (XURSH IURP KHU 6OHHSLQJ %HDXW\
VOXPEHU RI WKH PLGGOH DJHV 7HFKQRORJ\ GHIHDWHG NQLJKWKRRG DQG
IHXGDOLVP WKURXJK WKH LQYHQWLRQ RI ILUHDUPV DQG SRSHGRP DQG
VXSHUVWLWLRQ WKURXJK WKH LQYHQWLRQ RI WKH SULQWLQJ SUHVV WKURXJK WKH
FRPSDVVDQGVKLSWHFKQRORJ\IRUHLJQSDUWVRIWKHZRUOGRSHQHGXSDQG
ZHUHFRQTXHUHGZLWKWKHKHOSRIJXQSRZGHU
7KH SURJUHVV RI PRGHUQ VFLHQFH LV LQVHSDUDEOH IURP WHFKQRORJ\
:LWKRXW D WHOHVFRSH WKHUH ZRXOG EH QR PRGHUQ DVWURQRP\ ZLWKRXW D
PLFURVFRSHWKHUHZRXOGQRWEHEDFWHULRORJ\(YHQPRGHUQDUWLVUHODWHG
WR WHFKQRORJ\ 0RGHUQ LQVWUXPHQWDO PXVLF PRGHUQ DUFKLWHFWXUH DQG
PRGHUQ WKHDWHU DUH EDVHG SDUWLDOO\ RQ WHFKQRORJ\ 7KH LPSDFW WKDW
SKRWRJUDSK\KDVRQSRUWUDLWSDLQWLQJZLOOLQFUHDVH6LQFHSKRWRJUDSK\LV
XQVXUSDVVHG LQ WKH UHSURGXFWLRQ RI WKH IDFLDO IRUP SDLQWHUV ZLOO EH
IRUFHGWRORRNLQZDUGDQGFDSWXUHWKHDEVWUDFWQDWXUHDQGVRXORIPDQ$
VLPLODU HIIHFW DV SKRWRJUDSK\ KDV RQ SDLQWLQJ FRXOG DOVR DSSO\ WR
FLQHPDWRJUDSK\DQGWKHDWHU
0RGHUQ VWUDWHJ\ KDV IXQGDPHQWDOO\ FKDQJHG XQGHU WKH LQIOXHQFH RI
WHFKQRORJ\ :DUIDUH KDV FKDQJHG IURP D SV\FKRORJLFDO WR D
WHFKQRORJLFDO VFLHQFH 7RGD\ߥV PHWKRGV RI ZDU PHWKRGV GLIIHU PRUH
VLJQLILFDQWO\ IURP WKRVH RI WKH PLGGOH DJHV WKDQ WKHVH GLIIHU IURP WKH
FRPEDWRISULPLWLYHSHRSOH
$OO RI WRGD\ߥV SROLWLFVSRLQW WRD WHFKQRORJLFDO SURJUHVVGHPRFUDF\
QDWLRQDOLVP DQG QDWLRQDO HGXFDWLRQ DUH EDVHG RQ WKH LQYHQWLRQ RI WKH
SULQWLQJ SUHVV ,QGXVWULDOLVP DQG FRORQLDO LPSHULDOLVP FDSLWDOLVP DQG
VRFLDOLVP DUH FRQVHTXHQFHV RI WHFKQRORJLFDO SURJUHVV DQG D FKDQJLQJ
JOREDOHFRQRP\-XVWDVDJULFXOWXUHRQFHFUHDWHGDSDWULDUFKDODQGFUDIWV
RQFHFUHDWHGDQLQGLYLGXDOLVWLFPHQWDOLW\ߟVRZLOOFROOHFWLYHRUJDQL]HG
LQGXVWULDOLVPFUHDWHDVRFLDOLVWPHQWDOLW\2UJDQL]DWLRQRIODERUWKURXJK
WHFKQRORJ\FUHDWHVDVRFLDOLVWRUJDQL]DWLRQRIZRUNHUV
$WODVWSURJUHVVLQWHFKQRORJ\KDVFKDQJHGWKH(XURSHDQ+HLVPRUH
UXVKHG DQG QHUYRXV OHVV VHWWOHG PRUH DZDNH DOHUW UDWLRQDO DFWLYH
SUDFWLFDODQGVPDUWHU
,IZHGHOHWHDOOWKHFRQVHTXHQFHVWHFKQRORJ\KDGRQRXUFXOWXUHWKDW
ZKLFK UHPDLQV LV LQ QR ZD\ PRUH HYROYHG WKDQ DQFLHQW (J\SWLDQ RU
%DE\ORQLDQFXOWXUHߟLQVRPHUHVSHFWLWLVOHVVHYROYHG
(XURSH RZHV LWV FXOWXUDO DGYDQWDJH WR WHFKQRORJ\ 2QO\ WKURXJK
WHFKQRORJ\KDV(XURSHEHFRPHWKHPDVWHUDQGOHDGHURIWKHZRUOG
(XURSH LV D IXQFWLRQ RI WHFKQRORJ\ ߟ $PHULFD LV DQ HVFDODWLRQ RI
(XURSH

7(&+12/2*,&$/:25/'&+$1*(

7KH DJH RI WHFKQRORJ\ LQ (XURSH LV D SKHQRPHQRQ LQ ZRUOG KLVWRU\
WKDWFDQEHFRPSDUHGWRWKHLQYHQWLRQRIKHDWLQJLQSULPHYDOWLPHV7KH
LQYHQWLRQ RI ILUH VSDUNHG WKH KLVWRU\ RI KXPDQ FXOWXUH DQG WKH
GRPHVWLFDWLRQRIWKHKXPDQDQLPDO$OOVXEVHTXHQWPHQWDODQGPDWHULDO
SURJUHVV RI KXPDQLW\ DUH EDVHG RQ WKLV GLVFRYHU\ E\ SULPHYDO
3URPHWKHXV
7HFKQRORJ\ PDUNV D VLPLODU WXUQLQJ SRLQW LQ KXPDQ KLVWRU\ DV ILUH
GRHV,QWHQWKRXVDQG\HDUVKLVWRU\ZLOOEHGLYLGHGLQWKHSUHDQGSRVW
WHFKQRORJLFDO DJHV7KH (XURSHDQV ߟ ZKR E\ WKDW WLPH ZLOO EH ORQJ
H[WLQFW ߟ ZLOO DV WKH IDWKHUV RI WKH WHFKQRORJLFDO ZRUOG FKDQJH EH
SUDLVHGDVVDYLRUV
 7KH SRVVLEOH HIIHFWV RI D WHFKQRORJLFDO DJH ZKLFK ZH DUH QRZ
HQWHULQJDUHXQPLVWDNDEOH7HFKQRORJ\LVFUHDWLQJWKHIRXQGDWLRQVRIDOO
FXOWXUHVZKLFKEHFDXVHRIWKHFKDQJHGFRQGLWLRQVZLOOGLIIHUIURPDQ\
FXUUHQWFXOWXUHV
$OO FXOWXUHV WR GDWH IURP DQFLHQW (J\SW WR WKH PLGGOH DJHV KDYH
EHFRPHSURJUHVVLYHO\PRUHVLPLODUEHFDXVHWKH\ZHUHEDVHGRQFHUWDLQ
WHFKQLFDO SULQFLSDOV 7KHUH ZDV QR VLJQLILFDQW WHFKQRORJLFDO SURJUHVV
IURPWKHDQFLHQW(J\SWLDQVWRWKHHQGRIWKHPLGGOHDJHV
7KHFXOWXUHWKDWZLOOHPHUJHIURPWKHWHFKQRORJLFDODJHZLOOGLIIHUDV
PXFKIURPWKHDQFLHQWDQGPLGGOHDJHVDVWKRVHGLIIHUHGIURPWKHVWRQH
DJHV

(8523($6&8/785$/$*(17

(XURSH LV D F\FOH RI FXOWXUH  D FXOWXUDO WDQJHQW WKH WDQJHQWV WKDW
GHYHORSHG IURP WKH F\FOH RI $VLDQ FXOWXUH KDYH EORRPHG ZLOWHG DQG
ULVHQDJDLQLQDQRWKHUORFDWLRQ
(XURSH EOHZ XS WKLV F\FOH DQG LQVWHDG LQWURGXFHG D GLUHFWLRQ RI
XQNQRZQOLIHIRUPV
(YHU\WKLQJ DOUHDG\ H[LVWHG LQ WKH 2ULHQWDO FXOWXUHV RI WKH (DVW DQG
:HVW WKH WHFKQRORJLFDO FXOWXUH (XURSHߥV LV WUXO\ DQ XQNQRZQ WUXO\
VRPHWKLQJQHZ
(XURSHLVDEULGJHEHWZHHQWKHFRPSOH[NQRZQFXOWXUHVWKURXJKRXW
KLVWRU\DQGWKHFXOWXUDOIRUPVRIWKHIXWXUH
2QHHUDWKDWFRPSDUHVWRWKH(XURSHDQLQPHDQLQJDQGG\QDPLFVEXW
ZKRVH WUDFHV DUH ORVW PXVW KDYH SUHFHGHG WKH DQFLHQW %DE\ORQLDQ
FXOWXUH WKH DQFLHQW &KLQHVH DQG (J\SWLDQ FXOWXUH 7KLV 3UH(XURSH
FUHDWHG WKH IRXQGDWLRQ IRU DOO WKH FXOWXUHV RI WKH ODVW PLOOHQQLD OLNH
PRGHUQ(XURSHLWZDVDFXOWXUDOWDQJHQWWKDWVHSDUDWHGIURPWKHF\FOHRI
WKHDQFLHQWSUHFXOWXUHV
7KHVHTXHQFHRIWKHJUHDWZRUOGKLVWRU\FRQVLVWVRI$VLDQF\FOHVDQG
(XURSHDQ FXOWXUDO WDQJHQWV :LWKRXW WKHVH WDQJHQWV ZKLFK DUH RQO\
(XURSHDQ LQ D VSLULWXDO QRW D JHRJUDSKLFDO VHQVH  WKHUH ZRXOG RQO\ EH
H[SDQVLRQ QRW GHYHORSPHQW $IWHU D ORQJ SHULRG RI PDWXULW\ RQH
LQJHQLRXVQDWLRQHPHUJHVIURPWKHGDUNQHVVEORZVXSWKHQDWXUDOFRXUVH
RIFXOWXUHDQGUDLVHVKXPDQLW\WRDKLJKHUOHYHO
,QYHQWLRQV QRW SRHWU\ RU UHOLJLRQ PDUN WKHVH VWDWHV RI FXOWXUDO
GHYHORSPHQWV WKH LQYHQWLRQ RI EURQ]H LURQ HOHFWULFLW\ 7KHVH
LQYHQWLRQV EXLOG WKH HWHUQDO OHJDF\ RI DQ HUD IRU DOO IXWXUH FXOWXUHV
1RWKLQJ ZLOO UHPDLQ IURP WKH DQFLHQWV  ZKLOH WKH PRGHUQ HUD LV
HQULFKLQJ FXOWXUH WKURXJK WKH FRQTXHVW RI HOHFWULFLW\ DQG RWKHU QDWXUDO
IRUFHVWKHVHLQYHQWLRQVZLOOVXUYLYH)DXVWWKH'LYLQH&RPHG\DQGWKH
,OLDG
:LWK WKH PLGGOH DJHV WKH FXOWXUDO F\FOH RI LURQ HQGHG ߟ ZLWK WKH
PRGHUQ DJH WKH FXOWXUDO F\FOH RI WKH PDFKLQH LV EHJLQQLQJ QRW D QHZ
FXOWXUHEXWDQHZHUD
&UHDWRUVRIWKLVWHFKQRORJLFDOHUDLVWKHLQJHQLRXV3URPHWKHDQQDWLRQ
RI ߨ*HUPDQL]HGߩ (XURSHDQV 0RGHUQ FXOWXUH LV IRXQGHG DV PXFK RQ
WKHLULQQRYDWLYHVSLULWDVRQWKHHWKLFVRIWKH-HZVWKHDUWRIWKH*UHHNV
DQGWKHSROLWLFVRIWKH5RPDQV

/(21$5'2$1'%$&21

$W WKH VWDUW RI WKH DJH RI WHFKQRORJ\ WZR JUHDW (XURSHDQV KDYH
VHQVHG WKH PHDQLQJ RI (XURSH /HRQDUGR GD 9LQFL DQG %DFRQ YRQ
9HUXODP /HRQDUGR GHGLFDWHG KLPVHOI WR WHFKQRORJ\ ZLWK DV PXFK
SDVVLRQDVWRDUW+LVIDYRULWHSUREOHPZDVKXPDQIOLJKWWKHVROXWLRQRI
ZKLFKRXUHUDKDVZLWQHVVHG
,W LV VDLG WKDW WKHUH DUH \RJLV LQ ,QGLD ZKR FDQ WKURXJK HWKLFV DQG
DVFHWLFLVPEUHDNWKHODZVRIJUDYLW\DQGIORDWLQWKHDLU,Q(XURSHWKH
LQYHQWLYH VSLULW RI HQJLQHHUV DQG WKHLU PDWHULDOL]DWLRQ WKH DLUSODQH
FRQTXHUHG WKH ODZV RI JUDYLW\ WKURXJK WHFKQRORJ\ /HYLWDWLRQ DQG
DYLDWLRQV\PEROLFDOO\UHSUHVHQWWKH$VLDQDQG(XURSHDQIRUPVRIKXPDQ
SRZHUDQGIUHHGRP
%DFRQZDVWKHFUHDWRURIWKHEROGXWRSLDQQRYHOߨ1HZ$WODQWLVߩ,WV
WHFKQRORJLFDO FKDUDFWHU GLVWLQJXLVKHV LW IURP DOO SUHYLRXV XWRSLDV IURP
3ODWR WR 7KRPDV 0RUXV 7KH VKLIW IURP PLGGOHDJH $VLDQ WKLQNLQJ WR
PRGHUQDJH (XURSHDQ LV IRXQG LQ WKH FRQWUDVW EHWZHHQ 0RUXVߥ
HWKLFDOSROLWLFDOߨ8WRSLDߩDQG%DFRQߥVߨ1HZ$WODQWLVߩ0RUXVVWLOOVHHV
VRFLDOHWKLFDO UHIRUPV DV WKH OHYHU RI ZRUOG LPSURYHPHQW %DFRQ WKH
WHFKQRORJLFDOLQYHQWLRQV
0RUXVZDVVWLOOD&KULVWLDQߟ%DFRQZDV(XURSHDQ
9+817,1*ߟ:$5ߟ:25.

32:(5$1')5(('20

7 KH FRQWHPSODWLYH PDQ OLYHV LQ SHDFH ZLWK KLV

VXUURXQGLQJV WKH DFWLYH PDQ LQ D FRQVWDQW VWDWH RI
ZDU )RU VHOISUHVHUYDWLRQ IXOILOOPHQW DQG
GHYHORSPHQW KH PXVW FRQVWDQWO\ ILJKW IRUHLJQ SRZHUV GHVWUR\ DQG
HQVODYH
7KH ILJKW IRU VXUYLYDO LV D ILJKW IRU IUHHGRP DQG SRZHU 9LFWRU\
PHDQVWRHQIRUFHKLVZLOO2QO\WKHZLQQHULVIUHHPLJKW\7KHUHLVQR
OLQH EHWZHHQ IUHHGRP DQG SRZHU WKH IXOO HQMR\PHQW RI RQHߥV IUHHGRP
KXUWV IRUHLJQ LQWHUHVWV 3RZHU LV WKH RQO\ DVVXUDQFH RI XQLQKLELWHG
IUHHGRP
+XPDQLW\ߥV ILJKW IRU IUHHGRP FRLQFLGHV ZLWK WKH ILJKW IRU SRZHU ,Q
LWV FRXUVH KXPDQLW\ KDV FRQTXHUHG WKH JOREH WKH DQLPDO NLQJGRP
WKURXJKKXQWLQJDQGEUHHGLQJߟWKHSODQWNLQJGRPWKURXJKDJULFXOWXUHߟ
WKH PLQHUDO NLQJGRP WKURXJK PLQLQJ ߟ QDWXUDO IRUFHV WKURXJK
WHFKQRORJ\)URPDQRQGHVFULSWZHDNDQLPDOPDQURVHXSDVWKHORUGRI
WKHZRUOG

+817,1*

7KHILUVWSKDVHRIKXPDQVWUXJJOHZDVWKHDJHRIKXQWLQJ
$IWHU KXQGUHGV RI WKRXVDQGV RI \HDUV RI EDWWOHV PDQ KDV ZRQ
GRPLQDWLRQ RYHU WKH DQLPDO ZRUOG 7KLV YLFWRULRXV ILJKW RI UHODWLYHO\
ZHDN PDQ DJDLQVW DOO H[WLQFW DQG VWLOO H[LVWLQJ ODUJH DQG ZLOG DQLPDO
VSHFLHV LV D JUHDWQHVV WKDW FDQ EH FRPSDUHG WR WKH FRQTXHVW RI WKH
DQFLHQWZRUOGE\DVPDOOYLOODJH5RPH
0DQ ZRQ DJDLQVW DOO KRUQV DQG WHHWK SDZV DQG FODZV RI KLV EHWWHU
HTXLSSHG ULYDO RQO\ ZLWK WKH ZHDSRQ RI KLV VXSHULRU PLQG ZKLFK KH
FRQWLQXDOO\VKDUSHQHGLQWKHILJKW
7KH JRDOV LQ WKH KXPDQ ZDU DJDLQVW KLV DQLPDO HQHPLHV ZHUH
GHIHQVLYHDQGRIIHQVLYHSURWHFWLRQDQGHQVODYHPHQW
 $W ILUVW PDQ ZDV FRQWHQW WR UHQGHU KLV HQHPLHV KDUPOHVV WKURXJK
GHIHQVH DQG H[WHUPLQDWLRQ ODWHU KH EHJDQ WR WDPH DQG XVH WKHP +H
WXUQHG ZROYHV LQWR GRJV EXIIDOR LQWR FDWWOH ZLOG HOHSKDQWV FDPHOV
GRQNH\V KRUVHV ODPDV JRDWV VKHHS DQG FDWV LQWR GRPHVWLF RQHV +H
VXEGXHGDKRVWRIIRUPHUULYDOVLQWRDQDUP\RIDQLPDOVODYHVDQDUVHQDO
RI OLYLQJ PDFKLQHV WR ZRUN DQG ILJKW IRU KLP DQG WR LQFUHDVH KLV
IUHHGRPDQGKLVSRZHU

:$5

7RPDLQWDLQWKHSRZHUKHZRQDQGWRLQFUHDVHLWPDQPRYHGWRILJKW
KLVIHOORZPDQZLWKWKHVDPHPHWKRGVDVKHIRXJKWWKHDQLPDONLQJGRP
7KHHUDRIKXQWLQJEHFDPHWKHHUDRIZDU0DQIRXJKWZLWKPDQRYHUWKH
GLVWULEXWLRQRIWKHFRQTXHUHGHDUWK7KHVWURQJHUZDUGHGRIIWKHZHDNHU
DQG HLWKHU NLOOHG RU HQVODYHG KLP ZDU ZDV D VSHFLDO IRUP RI KXQWLQJ
VODYHU\DVSHFLDOIRUPRIDQLPDOKXVEDQGU\,QWKHILJKWIRUIUHHGRPDQG
SRZHU WKH VWURQJHU EROGHU DQG ZLVHU ZRQ RYHU WKH ZHDNHU WKH
FRZDUGO\ DQG GXPEHU :DU DOVR VKDUSHQHG WKH KXPDQ PLQG DQG
PDQSRZHU

:25.

,QWKHORQJUXQKXQWLQJDQGZDUFRXOGQRWIHHGKXPDQLW\&KDQJLQJ
DJDLQ PDQ ZHQW WR ZDU DJDLQVW LQDQLPDWH QDWXUH 7KH DJH RI ZRUN
EHJDQ:DUVDQGKXQWLQJVWLOOEURXJKWIDPHDQGJORU\EXWWKHHPSKDVLV
RIOLIHVKLIWHGWRZDUGVZRUNEHFDXVHLWJDYHKLPIRRGZKLFKKHQHHGHG
IRUKLVSUHVHUYDWLRQ
:RUN ZDV D VSHFLDO IRUP RI ZDU ߟ WHFKQRORJ\ D VSHFLDO IRUP RI
VODYHU\LQVWHDGRIKXPDQVQDWXUDOIRUFHVZHUHGRPLQDWHGDQGHQVODYHG
7KURXJK ZRUN PDQ IRXJKW KXQJHU KH VXEGXHG WKH JURXQG DQG WKH
FURSV DQG UHDSHG WKH SURILW 7KURXJK ZRUN PDQ IRXJKW DJDLQVW WKH
ZLQWHU+HEXLOWKRXVHVZRYHIDEULFVIHOOHGZRRG+HSURWHFWHGKLPVHOI
DJDLQVWWKHIRUFHVRIQDWXUHWKURXJKZRUN

:$5$6$1$&+521,60
 7KH ZD\ KXQWLQJ ZDU DQG ZRUN PHUJHG LQWR HDFK RWKHU PDNHV LW
LPSRVVLEOHWRVHSDUDWHWKHPFKURQRORJLFDOO\)RUWKRXVDQGVRI\HDUVWKH
DJHRIKXQWLQJUDQSDUDOOHOWRWKHDJHRIZDUDVWRGD\WKHDJHRIZDUUXQV
SDUDOOHOWRWKHDJHRIZRUNEXWWKHFHQWHURIJUDYLW\RIZDUVKLIWHGDQG
VKLIWVFRQWLQXDOO\:KLOHRULJLQDOO\KXQWLQJZDVDWWKHFHQWHURIKXPDQ
DFWLYLW\ZDUWRRNLWVSODFHDQGILQDOO\ZRUN
:DUZKLFKZDVRQFHQHFHVVDU\IRUWKHDGYDQFHPHQWRIFXOWXUHORVW
LWVPHDQLQJDQGKDVEHFRPHDGDQJHURXVGHVWUR\HURIFXOWXUH7RGD\LWLV
LQYHQWLRQVWKDWPDUNSURJUHVVQRWZDUV
7RGD\KXPDQLW\ߥVGHFLGLQJEDWWOHVIRUIUHHGRPSOD\RXWLQZRUN
,QWLPHZKHQWKHZRUOGZDUZLOOIDVFLQDWHRQO\KLVWRULDQVRXUWXUQRI
WKHFHQWXU\ZLOOEHIDPRXVIRUWKHELUWKRIDYLDWLRQ
,QWKHHUDRIZDUKXQWLQJDFWHGDVDQDFKURQLVPVRLQWKHHUDRIZRUN
ZDUDFWVDVDQDFKURQLVP%XWLQWKLVHUDHYHU\ZDULVDFLYLOZDUEHFDXVH
LWLVGLUHFWHGWRZDUGIHOORZILJKWHUVDQGWKHHQWLUHDUP\RIZRUNHUV
,Q WKH HUD RI ZRUN WKH JORULILFDWLRQ RI ZDU LV DV XQWLPHO\ DV WKH
JORULILFDWLRQRIKXQWLQJLQWKHHUDRIZDU2ULJLQDOO\WKHGUDJRQDQGOLRQ
VOD\HUZHUHKHURHVWKHQLWZDVWKHFRPPDQGHUILQDOO\LWLVWKHLQYHQWRU
/DYRLVLHU KDV FRQWULEXWHG PRUH WR WKH KXPDQ GHYHORSPHQW WKDQ
5REHVSLHUUHDQG%RQDSDUWHSXWWRJHWKHU
$VWKHKXQWHUUXOHGWKHHUDRIKXQWLQJWKHZDUULRULQWKHHUDRIZDU
WKHZRUNHUZLOOUXOHLQWKHHUDRIZRUN

7(&+12/2*<

7KHHUDRIZRUNLVGLYLGHGLQWRDJULFXOWXUHDQGWHFKQRORJ\
$V D IDUPHU PDQ LV GHIHQVLYH DJDLQVW QDWXUH ߟ DV WHFKQLFLDQ KH LV
RIIHQVLYH
7KH PHWKRGV RI ZRUN FRUUHVSRQG WR WKRVH RI ZDU DQG KXQWLQJ
GHIHQVH DQG HQVODYHPHQW 7KH HUD RI DJULFXOWXUH LV OLPLWHG WR ZDUG RII
KXQJHU DQG FROG ZKLOH WHFKQRORJ\ JRHV EH\RQG WR HQVODYH RQFH
KDUPIXOQDWXUDOIRUFHV0DQUXOHVRYHUVWHDPDQGHOHFWULFLW\DQGRYHUD
VODYHDUP\RIPDFKLQHV:LWKWKHVHKHQRWRQO\GHIHQGVKLPVHOIDJDLQVW
KXQJHUDQGFROGQDWXUDOGLVDVWHUDQGGLVHDVHVEXWKHHYHQWULHVWRWDFNOH
WKHEDUULHUVRIWLPHVSDFHDQGJUDYLW\+LVEDWWOHIRUIUHHGRPIURPWKH
IRUFHVRIQDWXUHFURVVHVLQWRDVWUXJJOHIRUSRZHURYHUVXFKIRUFHV
7HFKQRORJ\LVWKHSUDFWLFDODSSOLFDWLRQRIVFLHQFHIRUWKHGRPLQDWLRQ
RI QDWXUH &KHPLVWU\ DV LQ DWRPLF HQJLQHHULQJ DQG PHGLFLQH LV LQ D
VHQVHRUJDQLFWHFKQRORJ\
7HFKQRORJ\ LQWHOOHFWXDOL]HV ZRUN LW OHVVHQV WKH ZRUN ORDG DQG
LQFUHDVHVSURILW
7HFKQRORJ\ LV IRXQGHG RQ D KHURLF DQG DFWLYLVW DWWLWXGH WRZDUGV
QDWXUHLWGRHVQRWREH\WKHZLOORIQDWXUHEXWGRPLQDWHVLW7KHZLOOWR
SRZHULVWKHPRWLYDWLQJIRUFHIRUSURJUHVV7KHWHFKQLFLDQVHHVDW\UDQW
LQWKHIRUFHVRIQDWXUHWKDWPXVWEHRYHUWKURZQߟDQHQHP\WKDWPXVWEH
GHIHDWHG7HFKQRORJ\LVWKHFKLOGRIWKH(XURSHDQVSLULW
9,7(&+12/2*<ߥ6&$03$,*1

(8523(ߥ60$660,6(5<

7 KURXJK WKH SRSXODWLRQ LQFUHDVH WKH VLWXDWLRQ LV

EHFRPLQJ LQFUHDVLQJO\ GHVSHUDWH IRU WKH (XURSHDQ
'HVSLWH DOO SUHYLRXV DGYDQFHV LQ WHFKQRORJ\ KH LV
VWLOOLQDPLVHUDEOHVWDWH+HKDVSXVKHGEDFNWKHJKRVWVRIIDPLQHDQG
K\SRWKHUPLDߟDWWKHSULFHRIKLVIUHHGRPDQGOHLVXUH
)RU WKH (XURSHDQ IUXLWIXO IRUFHG ODERU EHJLQV DW DJH VHYHQ ZLWK
IRUFHG VFKRROLQJ DQG HQGV XVXDOO\ ZLWK GHDWK +LV FKLOGKRRG LV
SRLVRQHGE\KLVSUHSDUDWLRQIRUDOLIHRIILJKWLQJZKLFKLQWKHIROORZLQJ
GHFDGHVGHYRXUVKLVWLPHSHUVRQDOLW\YLWDOLW\DQG]HVWIRUOLIH/HLVXUHLV
SXQLVKHGE\WKHGHDWKSHQDOW\7KHDYHUDJHDVVHWOHVV(XURSHDQFLWL]HQ
KDVWZRFKRLFHVHLWKHUZRUNWRH[KDXVWLRQRUVWDUYHWRGHDWKWRJHWKHU
ZLWK KLV FKLOGUHQ 7KH ZKLS RI KXQJHU GULYHV KLP WR FRQWLQXH WR ZRUN
GHVSLWHH[KDXVWLRQGLVJXVWDQGELWWHUQHVV
7KH(XURSHDQQDWLRQVKDYHPDGHWZRSROLWLFDODWWHPSWVDWLPSURYLQJ
WKLVZUHWFKHGVWDWHFRORQLDOSROLF\DQGVRFLDOLVP

&2/21,$/32/,&<

7KHILUVWIRUPRIFRORQLDOSROLF\FRQVLVWVRIFRQTXHVWDQGVHWWOHPHQW
LQ WKLQO\ SRSXODWHG DUHDV RI ODQG E\ QDWLRQV VXIIHULQJ IURP
RYHUSRSXODWLRQ (PLJUDWLRQ LV DFWXDOO\ DEOH WR VDYH QDWLRQV IURP
RYHUSRSXODWLRQDQGVHFXUHDGLJQLILHGH[LVWHQFHIRUSHRSOHZKRILQGWKH
(XURSHDQKXVWOHXQEHDUDEOH(PLJUDWLRQVWLOORIIHUVPLOOLRQVRISHRSOHDQ
HVFDSH IURP (XURSHDQ KHOO DQG VKRXOG WKHUHIRU EH SURPRWHG LQ HYHU\
ZD\
7KHVHFRQGIRUPRIFRORQLDOSROLF\FRQVLVWVRIH[SORLWDWLRQRIZDUPHU
DUHDV DQG FRORUHG SHRSOHV 3HRSOH RI VRXWKHUQ UDFHV DUH URXVHG IURP
WKHLU JROGHQ OHLVXUH ZLWK (XURSHDQ FDQQRQV DQG ULIOHV DQG IRUFHG WR
ZRUN LQ WKH VHUYLFH RI (XURSH 7KH SRRUHU EXW VWURQJHU 1RUWK
V\VWHPDWLFDOO\SOXQGHUVWKHULFKHUEXWZHDNHU6RXWKLWVWHDOVWKHZHDOWK
IUHHGRP DQG OHLVXUH DQG XVHV WKHP IRU LWV RZQ ZHDOWK IUHHGRP DQG
OHLVXUH
6HYHUDO(XURSHDQQDWLRQVKDYHWKLVUREEHU\DQGVODYHU\WRWKDQNIRU
WKHLU SURVSHULW\ ZKLFK HQDEOHV WKHP WR LPSURYH WKH OLYHV RI WKHLU RZQ
ZRUNHUV
,WZLOOIDLOLQWKHORQJUXQEHFDXVHWKHLQHYLWDEOHRXWFRPHZLOOEHDQ
HQRUPRXV UHYROW RI VODYHV DQG (XURSHDQV ZLOO EH H[SHOOHG IURP WKH
FRORUHGFRORQLHVDQG(XURSHߥVWURSLFDOFXOWXUHEDVHZLOOEHRYHUWKURZQ
(YHQ HPLJUDWLRQ LV RQO\ D SURYLVLRQDO VROXWLRQ 6RPH FRORQLHV DUH
QRZ DOPRVW DV RYHUSRSXODWHG DV WKHLU PRWKHUODQGV DSSURDFKLQJ D
VLPLODU PLVHU\ 7KH WLPH PXVW FRPH ZKHQ WKHUH DUH QR PRUH GHVHUWHG
DUHDVRQHDUWK
%\WKHQQHZZD\VKDYHWREHIRXQGWRFRXQWHUWKH(XURSHDQGRRP

62&,$/32/,&<

7KHVHFRQGHIIRUWWRDOOHYLDWH(XURSHDQPDVVPLVHU\LVVRFLDOLVP
6RFLDOLVP ZLOO H[RUFLVH WKH (XURSHDQ KHOO WKURXJK HYHQ GLVWULEXWLRQ
RIWKHZRUNORDGDQGHDUQLQJV7KHUHLVQRGRXEWWKHIDWHRIWKHPDVVHV
FRXOGEHPXFKLPSURYHGWKURXJKVHQVLEOHUHIRUPV%XWLIVRFLDOSURJUHVV
LV QRW VXSSRUWHG E\ D ERRP LQ WHFKQRORJ\ WKH PLVHU\ FDQ RQO\ EH
DOOHYLDWHGQRWHOLPLQDWHG
7KH ZRUNORDG WKDW LV QHFHVVDU\ WR IHHG DQG SURYLGH ZDUPWK IRU WRR
PDQ\ (XURSHDQV LV KXJH WKH HDUQLQJV IURP D URXJK DQG QRW IHUWLOH
HQRXJK(XURSHLVUHODWLYHO\VPDOOHYHQHTXDOGLVWULEXWLRQZRXOGUHVXOW
LQWRRPXFKZRUNDQGWRROLWWOHSD\IRUHYHU\(XURSHDQ$WWRGD\ߥVOHYHO
RI WHFKQRORJ\ OLIH LQ D VRFLDOLVW (XURSH ZRXOG GLVVROYH LQ D GRXEOH
DFWLYLW\ ZRUN WR HDW DQG HDW WR ZRUN 7KH HTXDOLW\ LGHDO ZRXOG EH
UHDOL]HG EXW (XURSH ZRXOG EH IXUWKHU UHPRYHG IURP IUHHGRP OHLVXUH
DQG FXOWXUH WKDQ HYHU EHIRUH 7R OLEHUDWH KXPDQLW\ (XURSH LV WRR
EDUEDULF DQG WRR SRRU 7KH IRUWXQH RI WKH IHZ ZHDOWK\ LI HTXDOO\
GLVWULEXWHGWRDOOZRXOGGLVDSSHDUSRYHUW\ZRXOGQRWEHHOLPLQDWHGEXW
JHQHUDOL]HG
6RFLDOLVPDORQHLVQRWDEOHWROHDG(XURSHRXWRIPLVHU\DQGERQGDJH
LQWROLEHUW\DQGSURVSHULW\1HLWKHUEDOORWVQRUVWRFNVFDQFRPSHQVDWHD
FRDO PLQHU IRU D OLIH VSHQW LQ PLQHV DQG VKDIWV 0RVW VODYHV RI $VLDQ
GHVSRWVDUHIUHHUWKDQWKHߨIUHHߩZRUNHURIVRFLDOL]HGODERU
6RFLDOLVPLVPLVMXGJLQJWKHߨ(XURSHDQ3UREOHPߩZKHQLWVHHVXQIDLU
GLVWULEXWLRQDVWKHSUREOHPIRUWKH(XURSHDQHFRQRP\QRWLQVXIILFLHQW
SURGXFWLRQ7KHURRWVRIWKH(XURSHDQPLVHU\OLHLQWKHQHHGIRUIRUFHG
ODERUQRWLQXQIDLUGLVWULEXWLRQ6RFLDOLVPPLVWDNHQO\VHHVFDSLWDOLVPDV
URRWFDXVHIRUIUXLWIXOIRUFHGODERUXQGHUZKLFK(XURSHLVVXIIHULQJLQ
UHDOLW\ RQO\ D VPDOO SHUFHQWDJH RI WKH ODERU RXWSXW IORZV WR WKH
FDSLWDOLVWVDQGWKHLUOX[XULHVWKHODUJHVWSDUWRIWKHODERUVHUYHVWRWXUQD
EDUUHQ DUHD RI WKH ZRUOG IHUWLOH DQG D FROG LQWR D ZDUP WR VXVWDLQ WKH
QXPEHURIKXPDQVZKLFKZRXOGQDWXUDOO\DOOSHULVK
:LQWHUDQGRYHUSRSXODWLRQLQ(XURSHDUHKDUGHUDQGFUXHOHUGHVSRWV
WKDQ DOO WKH FDSLWDOLVWV 1HYHUWKHOHVV SROLWLFLDQV DUH QRW OHDGLQJ WKH
(XURSHDQUHYROXWLRQDJDLQVWWKHVHUXWKOHVVW\UDQWVߟEXWLQYHQWRUV

7(&+12/2*,&$/:25/'5(92/87,21

&RORQLDO ,PSHULDOLVP OLNH 6RFLDOLVP DUH SDLQNLOOHUV QRW FXUHV IRU

WKH (XURSHDQ GLVHDVH WKH\ FDQ DOOHYLDWH WKH SDLQ QRW KHDO WKH GLVHDVH
SXWRIIWKHFDWDVWURSKHEXWQRWSUHYHQWLW(XURSHZLOOKDYHWRGHFLGHWR
HLWKHU GHFLPDWH LWV SRSXODWLRQ DQG FRPPLW VXLFLGH ߟ RU WR UHFRYHU
WKURXJKJUHDWO\LQFUHDVLQJSURGXFWLRQDQGSHUIHFWLQJWHFKQRORJ\
(XURSH PXVW XQGHUVWDQG WKDW WHFKQRORJLFDO SURJUHVV LV D OLEHUDWLRQ
ZDU DJDLQVW WKH KDUGHVW FUXHOHVW DQG PRVW XQFKDULWDEOH W\UDQW 1RUGLF
QDWXUH
,WGHSHQGVRQWKHUHVXOWRIWKLVUHYROXWLRQZKHWKHUKXPDQLW\XVHVWKH
RQFHLQHRQVRSSRUWXQLW\WREHFRPHWKHPDVWHURIQDWXUHߟRUZKHWKHULW
LVDZDVWHGRSSRUWXQLW\SHUKDSVIRUHYHU
2QHKXQGUHG \HDUV DJR (XURSH RSHQHG WKH RIIHQVLYH DJDLQVW WKH
VXSHULRU QDWXUH DJDLQVW ZKLFK XS WR WKDW SRLQW LW KDG RQO\ GHIHQGHG
LWVHOI(XURSHZDVQRORQJHUVDWLVILHGEHLQJDWWKHPHUF\RIWKHQDWXUDO
IRUFHVEXWEHJDQWRHQVODYHLWVHQHPLHV
7HFKQRORJ\KDVEHJXQVXSSOHPHQWLQJWKHDUP\RIVODYHDQLPDOVDQG
UHSODFLQJ WKH DUP\ RI VODYH ZRUNHUV WKURXJK PDFKLQHV ZKLFK DUH
RSHUDWHGE\QDWXUDOIRUFHV
7(&+12/2*<ߥ6$50<

(XURSH DVZHOODV$PHULFD KDVPRELOL]HGWKHJOREHIRUWKHJUHDWHVW

DQGPRVWPRPHQWRXVZDU
7KHIURQWOLQHVROGLHUVRIWKHJOREDODUP\RIODERUHUVILJKWLQJDJDLQVW
WKHZLOORIWKHQDWXUDOIRUFHVDUHWKHLQGXVWULDOZRUNHUVWKHLURIILFHUVDUH
HQJLQHHUVHQWUHSUHQHXUVDQGPDQDJHUVLQYHQWRUVDUHWKH*HQHUDO6WDII
WKHPDFKLQHVDUHWKH$UWLOOHU\WKHPLQHVDUHWKHLUWUHQFKHVIDFWRULHVDUH
WKHIRUWV
:LWKWKLVDUP\DQGWKHUHVHUYHVKHGUDZVIURPDOOSDUWVRIWKHZRUOG
WKHZKLWHPDQKRSHVWREUHDNWKHW\UDQQ\RIPRWKHUQDWXUHDQGVXEGXH
KHUIRUFHVWRWKHKXPDQVSLULWDQGILQDOO\OLEHUDWHPDQ

7+((/(&75,&:$5

7HFKQRORJ\ߥV DUP\ KDV ZRQ LWV ILUVW GHFLVLYH YLFWRU\ RYHU RQH RI
PDQNLQGߥVROGHVWDQWDJRQLVWVOLJKWQLQJ
6LQFHWLPHLPPHPRULDOWKHHOHFWULFVSDUNDVOLJKWQLQJKDVWKUHDWHQHG
ZRXQGHGDQGNLOOHGPDQLWEXUQHGKLVKRPHVDQGVODLQKLVFDWWOH)RU
WKRXVDQGV RI \HDUV PDQ ZDV H[SRVHG WR WKLV WUHDFKHURXV HQHP\ ZKR
QHYHUKHOSHGKLPLQDQ\ZD\XQWLO%HQMDPLQ)UDQNOLQEURNHLWVUXOHRI
WHUURUE\LQYHQWLQJWKHOLJKWQLQJURG7KHHOHFWULFVSDUNDVWKHVFRXUJHRI
PDQNLQGZDVWKXVZDUGHGRII%XWWKHZKLWH PDQZDVQRWVDWLVILHGZLWK
WKLV GHIHQVLYH YLFWRU\ KH ZHQW RQ WKH RIIHQVLYH DQG LQ RQH FHQWXU\
PDQDJHG WR WXUQ WKLV HQHP\ LQWR D VODYH WXUQLQJ WKLV PRVW GDQJHURXV
SUHGDWRULQWRDXVHIXOSHW
7RGD\ WKH HOHFWULF VSDUN WKDW RQFH ILOOHG RXU IRUHIDWKHUV ZLWK KRUURU
OLJKWVRXUURRPVFRRNVRXUWHDLURQVRXUODXQGU\ULQJVRXUEHOOVFDUULHV
RXUOHWWHUV WHOHJUDPV SXOOVWUDLQVDQGZDJRQVGULYHVPDFKLQHVߟLQD
ZRUG EHFDPH RXU PHVVHQJHU SRVWPDQ VHUYDQW FRRN KHDWHU OLJKWLQJ
ZRUNHUFDUULHUDQGHYHQRXUKDQJPDQ:KDWWKHHOHFWULFVSDUNLQ(XURSH
DQG $PHULFD GRHV WRGD\ LQ WKH VHUYLFH RI PDQNLQG ZRXOG QRW EH
SRVVLEOHHYHQLIKXPDQZRUNLQJKRXUVZHUHGRXEOHG
-XVWDVWKLVIRUPHUO\KRVWLOHQDWXUDOIRUFHZDVQRWRQO\EHDWHQEDFN
EXW ZDV WUDQVIRUPHG LQWR WKH LQGLVSHQVDEOH DQG PRVW XVHIXO VHUYDQW RI
PDQ VR WRR ZLOO WKH IORRGV RI WKH VHD WKH KHDW RI WKH VXQ VWRUPV DQG
IORRGV RQH GD\ EHFRPH WKH VODYHV RI PHQ 3RLVRQV EHFRPH UHPHGLHV
GHDGO\ YLUXVHV EHFRPH YDFFLQDWLRQV -XVW DV PDQ XVHG WR WDPH DQG
VXEGXH ZLOG DQLPDOV LQ SULPHYDO WLPHV PRGHUQ PDQ LV WDPLQJ DQG
VXEMXJDWLQJWKHZLOGIRUFHVRIQDWXUH
%\ VXFK YLFWRU\ 1RUGLF PDQ ZLOO RQH GD\ FRQTXHU IUHHGRP OHLVXUH
DQGFXOWXUH1RWWKURXJKGHSRSXODWLRQRUUHQXQFLDWLRQQRWWKURXJKZDU
DQG UHYROXWLRQ ߟ EXW WKURXJK LQYHQWLRQ DQG ZRUN WKURXJK VSLULW DQG
DFWLRQ

7+(,19(1725$65('((0(5

,Q RXU (XURSHDQ HSRFK WKH LQYHQWRU LV D JUHDWHU EHQHIDFWRU RI

KXPDQLW\WKDQWKHVDLQW
7KHLQYHQWRURIWKHDXWRPRELOHKDVGRQHPRUHIRUKRUVHVDQGVSDUHG
WKHP PRUH VXIIHULQJ WKDQ DQ\ DQLPDO ZHOIDUH DVVRFLDWLRQ LQ WKH ZRUOG
7KH FDU LV DERXW WR VDYH WKRXVDQGV RI (DVW $VLDQ ULFNVKDZ RSHUDWRUV
IURPDOLIHDVDGUDIWDQLPDO
7KHLQYHQWRUVRIGLSKWKHULDDQGLWVDQWLWR[LQVKDYHVDYHGWKHOLYHVRI
PRUHFKLOGUHQWKDQDOOEDE\KRVSLWDOV
7KH JDOOH\VODYHV RZH WKHLU OLEHUDWLRQ WR PRGHUQ VKLS WHFKQRORJ\
ZKLOHZLWKWKHLQWURGXFWLRQRISHWUROHXPKHDWLQJPRGHUQWHFKQRORJ\LV
EHJLQQLQJWROLEHUDWHWKHVKLSߥVILUHVWRNHUVIURPWKHLUKHOOLVKSURIHVVLRQ
7KHLQYHQWRUZKRE\DWRPLFGHVWUXFWLRQILQGVDSUDFWLFDOVXEVWLWXWH
IRU FRDO ZLOO KDYH GRQH PRUH IRU PDQNLQG WKDQ WKH PRVW VXFFHVVIXO
UHIRUPHU EHFDXVH KH ZLOO UHVFXH PLOOLRQV RI FRDO ZRUNHUV IURP WKHLU
LQKXPDQH H[LVWHQFH DQG ZLSH RXW D ODUJH SDUW RI WKH KXPDQ ZRUNORDG
ZKHUHDVWRGD\QRFRPPXQLVWGLFWDWRUFRXOGDYRLGFRQGHPQLQJSHRSOHWR
WKDWOLIHXQGHUJURXQG
7KH FKHPLVW ZKR VXFFHHGV LQ PDNLQJ ZRRG HGLEOH ZRXOG IUHH WKH
SHRSOH IURP WKH \RNH RI IDPLQH ZKLFK KDV EHHQ VXSSUHVVLQJ WKHP
ORQJHUDQGPRUHFUXHOO\WKDQDQ\KXPDQGRPLQDWLRQ
1HLWKHU HWKLFV QRU DUW QRU UHOLJLRQ QRU SROLWLFV ZLOO ZLSH RXW WKH
ELEOLFDO FXUVH EXW WHFKQRORJ\ 2UJDQLF WHFKQRORJ\ ߟ PHGLFLQH LV
H[SHFWHGWREDQLVKWKHZRPDQߥVFXUVHߨ:LWKSDLQIXOODERU\RXZLOOJLYH
ELUWKWRFKLOGUHQߩ,QRUJDQLFWHFKQRORJ\LVH[SHFWHGWREDQLVKWKHPDQߥV
FXUVHߨ%\WKHVZHDWRI\RXUEURZ\RXZLOOHDW\RXUEUHDGߩ
,Q PDQ\ UHVSHFWV RXU DJH LV VLPLODU WR WKH EHJLQQLQJ RI WKH 5RPDQ
HPSLUH$WWKDWWLPHWKHZRUOGKRSHGIRUVDOYDWLRQWKURXJKWKHHPSLUHߥV
3D[ 5RPDQD 7KH KRSHGIRU FKDQJH FDPH EXW IURP D FRPSOHWHO\
GLIIHUHQW GLUHFWLRQ 1RW IURP WKH RXWVLGH EXW IURP ZLWKLQ 1RW E\
SROLWLFVEXWUHOLJLRQ1RWE\&DHVDU$XJXVWXVEXW-HVXV&KULVW
:HWRRDUHIDFLQJDZRUOGWXUQ+XPDQLW\WRGD\H[SHFWVWKHVRFLDOLVW
HUDWREHWKHGDZQRIWKHJROGHQHUD7KHKRSHGIRUZRUOGFKDQJHZLOO
FRPH PD\EH EXW QRW WKURXJK SROLWLFV EXW E\ WHFKQRORJ\ 1RW E\ D
UHYROXWLRQDU\EXWE\DQLQYHQWRU1RWWKURXJK/HQLQEXWE\DPDQZKR
PD\DOUHDG\EHOLYLQJQDPHOHVVVRPHZKHUHWRGD\DQGZKRZLOOVRPHGD\
VXFFHHG LQ OLEHUDWLQJ KXPDQLW\ IURP IDPLQH IURVW DQG IRUFHG ODERU E\
RSHQLQJXSQHZXQLPDJLQHGHQHUJ\VRXUFHV
9,,(1'*2$/2)7(&+12/2*<

&8/785($1'6/$9(5<

( YHU\ SUHYLRXV FXOWXUH ZDV EDVHG RQ VODYHU\ WKH

DQFLHQWRQVODYHVWKHPHGLHYDORQVHUIVWKHPRGHUQ
RQWKHZRUNLQJFODVV7KHLPSRUWDQFHRIWKHVODYHVLV
EDVHGRQWKHIDFWWKDWWKH\FUHDWHIUHHGRPDQGOHLVXUH SUHFRQGLWLRQVIRU
DQ\ FXOWXUH  IRU WKHLU ORUGV WKURXJK WKHLU RZQ ODFN RI IUHHGRP DQG
H[FHVVLYH ZRUNLQJ %HFDXVH LW LV QRW SRVVLEOH IRU WKH VDPH SHRSOH WR
SHUIRUP WKH PRQVWURXV SK\VLFDO ODERU QHFHVVDU\ IRU IRRG FORWKLQJ DQG
KRXVLQJRIDJHQHUDWLRQDQGDWWKHVDPHWLPHSHUIRUPWKHPHQWDOZRUN
QHFHVVDU\IRUWKHFUHDWLRQDQGPDLQWHQDQFHRIDFXOWXUH
(YHU\ZKHUH WKHUH H[LVWV D GLYLVLRQ RI ODERU VR WKDW WKH EUDLQ FDQ
WKLQNWKHVWRPDFKPXVWGLJHVWZLWKRXWURRWLQJLWVURRWVLQWKHHDUWKQR
SODQW FDQ IORZHU 7KH EHDUHUV RI HYHU\ FXOWXUH DUH GHYHORSHG SHRSOH
'HYHORSPHQW LV LPSRVVLEOH ZLWKRXW WKH DWPRVSKHUH RI IUHHGRP DQG
OHLVXUHHYHQURFNVFDQRQO\FU\VWDOOL]HLQDOLTXLGIUHHVWDWH:KHUHLWLV
HQFORVHGXQIUHHLWPXVWUHPDLQDPRUSKRXV
7KH FXOWXUHEXLOGLQJ IUHHGRP DQG OHLVXUH RI WKH IHZ FRXOG RQO\ EH
FUHDWHGWKURXJKERQGDJHDQGH[FHVVLYHODERULQJRIWKHPDQ\,QQRUWKHUQ
DQGRYHUSRSXODWHGSDUWVRIWKHZRUOGWKHGLYLQHH[LVWHQFHRIWKRXVDQGV
ZDV DOZD\V DQG HYHU\ZKHUH EXLOW RQ RQHKXQGUHG WKRXVDQG OLYLQJ OLNH
DQLPDOV
7KH PRGHUQ DJH ZLWK LWV &KULVWLDQ VRFLDO LGHDV VWRRG EHIRUH WZR
FKRLFHV HLWKHU WR UHQRXQFH FXOWXUH RU WR PDLQWDLQ VODYHU\ $HVWKHWLF
FRQVLGHUDWLRQV ZHUH DJDLQVW WKH ILUVW FKRLFH ߟ HWKLFDO FRQVLGHUDWLRQV
DJDLQVW WKH VHFRQG 7KH ILUVW ZDV UHVLVWHG E\ WDVWH WKH VHFRQG E\
HPRWLRQ
:HVWHUQ(XURSHRSWHGIRUWKHVHFRQGFKRLFH,QRUGHUWRSUHVHUYHWKH
UHVWRILWVERXUJHRLVFXOWXUHVODYHU\UHPDLQHGEXWGLVJXLVHGLQLQGXVWULDO
ODERUߟZKLOH5XVVLDLVSUHSDULQJWRPDNHWKHILUVWFKRLFHOLEHUDWLQJWKH
ODERU IRUFH EXW VDFULILFLQJ LWV HQWLUH FXOWXUH IRU WKLV OLEHUDWLRQ RI WKH
VODYHV
 %RWK VROXWLRQV DUH XQEHDUDEOH 7KH KXPDQ VSLULW PXVW ORRN IRU DQ
HVFDSH IURP WKLV GLOHPPD LW LVIRXQG LQWHFKQRORJ\ 7HFKQRORJ\DORQH
FDQEUHDNVODYHU\DQGVDYHFXOWXUH

7+(0$&+,1(

7KH XOWLPDWH JRDO RI WHFKQRORJ\ LV WKH UHSODFHPHQW RI VODYH ODERU
WKURXJKPDFKLQHZRUNHOHYDWLQJWKHZKROHRIKXPDQLW\LQWRDFODVVRI
PHQ LQ ZKRVH VHUYLFH DQ DUP\ RI QDWXUDO IRUFHV ZRUNV LQ WKH IRUP RI
PDFKLQHV
:H DUH RQ WKH ZD\ WR WKLV JRDO ,Q WKH SDVW DOPRVW DOO WHFKQLFDO
HQHUJLHVKDGWREHJHQHUDWHGE\KXPDQRUDQLPDOPXVFOHV7RGD\WKH\
DUHIUHTXHQWO\UHSODFHGE\VWHDPHOHFWULFLW\DQGPRWRUL]DWLRQ0RUHDQG
PRUHSHRSOHDUHDVVXPLQJWKHUROHRIDPDQDJHURIHQHUJ\LQVWHDGRID
JHQHUDWRU (YHQ \HVWHUGD\ WKH ZRUNHU SXOOHG FXOWXUH IRUZDUG LQ D
ULFNVKDZ 7RPRUURZ LW ZLOO EH LWV FKDXIIHXU ZKR REVHUYHV WKLQNV DQG
VWHHUVLQVWHDGRIUXQQLQJDQGVZHDWLQJ
7KH PDFKLQH LV WKH OLEHUDWLRQ RI SHRSOH IURP WKH VODYH ODERU HUD
7KURXJK PDFKLQHV D PLQG FDQ GR PRUH ZRUN DQG FUHDWH PRUH YDOXH
WKDQ PLOOLRQV RI KDQGV 7KH PDFKLQH LV PDWHULDOL]HG KXPDQ VSLULW 7KH
JUDWHIXOFUHDWLRQRIPDQEHJRWWHQE\WKHVSLULWRIWKHLQYHQWRUERUQRI
WKHSK\VLFDOVWUHQJWKRIWKHZRUNHUV
7KH PDFKLQH KDV D GRXEOH WDVN WR LQFUHDVH SURGXFWLRQ DQG UHGXFH
ODERU
%\LQFUHDVLQJSURGXFWLRQWKHPDFKLQHZLOOPHHWQHHGVE\UHGXFLQJ
WKHODERUHQGVODYHU\
7RGD\ZRUNHUVPD\RQO\EHWKHOHDVWSDUWKXPDQEHFDXVHKHPXVWEH
ODUJHO\PDFKLQH,QWKHIXWXUHWKHPDFKLQHZLOOSHUIRUPWKHPHFKDQLFDO
ZRUNDQGOHDYHWKHKXPDQWKHRUJDQLFWRWKHKXPDQV7KLVLVKRZWKH
PDFKLQHRSHQVXSWKHSURVSHFWRIUDLVLQJKXPDQZRUNWRDQLQWHOOHFWXDO
DQGLQGLYLGXDOSODQHWKHIUHHDQGFUHDWLYHFRPSRQHQWZLOOJURZRYHUWKH
DXWRPDWLFPHFKDQLFDO WKH VSLULWXDO YHUVXV WKH PDWHULDO 2QO\ WKHQ ZLOO
ZRUN VWRS WR GHSHUVRQDOL]H PHFKDQL]H DQG GHJUDGH SHRSOH WKHQ ZRUN
ZLOOEHVLPLODUWRSOD\VSRUWVDQGIUHHFUHDWLYHDFWLYLW\6KHZLOOQRWDV
WRGD\ EH FDSWRU WKDW RSSUHVVHV HYHU\WKLQJ KXPDQ EXW D WRRO DJDLQVW
ERUHGRP D GLVWUDFWLRQ DQG SK\VLFDO RU PHQWDO H[HUFLVH IRU WKH
GHYHORSPHQWRIDOORIKLVDELOLWLHV7KLVZRUNZKLFKPDQZLOOSHUIRUP
DV WKH EUDLQ RI KLV PDFKLQH DQG ZKLFK LV EDVHG RQ GRPLQDWLRQ ZLOO
VWLPXODWHLQVWHDGRIGXOOOLIWXSLQVWHDGRIGHSUHVV

',60$17/,1*7+(%,*&,7<

,Q DGGLWLRQ WR WKHVH WZR WDVNV DOOHYLDWLQJ QHHG E\ LQFUHDVLQJ
SURGXFWLYLW\ DQG GLVPDQWOLQJ VODYHU\ E\ UHGXFLQJ DQG LQGLYLGXDOL]LQJ
ZRUN WKH PDFKLQH KDV D WKLUG FXOWXUDO PLVVLRQ WKH GLVVROXWLRQ RI WKH
PRGHUQPHWURSROLVDQGWKHUHWXUQRIPDQWRQDWXUH
7KHRULJLQVRIWKHPRGHUQPHWURSROLVFDPHDWDWLPHZKHQWKHKRUVH
ZDV WKH IDVWHVW PHDQV RI WUDQVSRUW DQG WKHUH ZDV QR WHOHSKRQH $W WKDW
WLPH LW ZDV QHFHVVDU\ IRU SHRSOH WR OLYH LQ FORVH SUR[LPLW\ WR WKHLU
ZRUNSODFHVDQGDVDUHVXOWOLYHGLQDFUDPSHGVSDFH
7HFKQRORJ\KDVFKDQJHGWKHVHFRQGLWLRQVIDVWWUDLQFDUELF\FOHDQG
WKHWHOHSKRQHDOORZWKHZRUNHUWRGD\WROLYHPDQ\PLOHVDZD\IURPKLV
RIILFH7KHUHLVQRQHHGIRUWKHFRQVWUXFWLRQRIIRUWKHFRQVWUXFWLRQDQG
DFFXPXODWLRQ RI UHQWDO EDUUDFNV ,Q WKH IXWXUH SHRSOH ZLOO KDYH WKH
RSSRUWXQLW\ WR OLYH QH[W WR HDFK RWKHU LQVWHDG RI RQ WRS RI HDFK RWKHU
EUHDWKLQJKHDOWK\DLULQJDUGHQVDQGOLYLQJKHDOWK\FOHDQGHFHQWOLYHVLQ
EULJKW DQG VSDFLRXV URRPV (OHFWULF DQG JDV RYHQV ZLOO SURWHFW DJDLQVW
WKHZLQWHUFROGHOHFWULFODPSVDJDLQVWWKHORQJZLQWHUQLJKWV7KHKXPDQ
VSLULW ZLOO WULXPSK RYHU WKH ZLQWHU DQG PDNH WKH QRUWKHUQ ]RQH MXVW DV
FRPIRUWDEOHDVWKHPRGHUDWHRQH
7KHGHYHORSPHQWWRZDUGVWKHJDUGHQFLW\KDVDOUHDG\EHJXQ7KHULFK
DUHOHDYLQJWKHFHQWHUVRIWKHELJFLWLHVDQGVHWWOHRQWKHLUSHULSKHU\RU
WKHLUVXUURXQGLQJV7KHQHZLQGXVWULDOFLWLHVDUHH[SDQGLQJKRUL]RQWDOO\
LQVWHDG RI YHUWLFDOO\ $W D KLJKHU OHYHO WKH FLWLHV RI WKH IXWXUH ZLOO EH
VRPHZKDWVLPLODUWRWKRVHRIWKH0LGGOH$JHV$VWKHORZFLYLFKRXVHV
ZHUH JURXSHG DURXQG D KXJH FDWKHGUDO WKXV ZLOO EH D KXJH VN\VFUDSHU
ZKLFK ZLOO LQFOXGH DOO SXEOLF DQG SULYDWH RIILFHV DQG GLQLQJ KDOO
VXUURXQGHG E\ WKH ORZ KRXVHV DQG ZLGH JDUGHQV RI WKH JDUGHQ FLW\ ,Q
LQGXVWULDOL]HGFLWLHVWKHIDFWRU\ZLOOEHWKHFHQWUDOFDWKHGUDORIZRUNWKH
GHYRWLRQRIWKHSHRSOHLQWKHVHFDWKHGUDOVRIWKHIXWXUHZLOOEHWKHZRUN
IRUWKHFRPPXQLW\
 7KRVH QRW WLHG WR WKH FLW\ E\ SURIHVVLRQ ZLOO OLYH LQ WKH FRXQWU\VLGH
DQGWDNHSDUWLQWKHFRQYHQLHQFHVDFWLYLWLHVDQGGLYHUVLRQVRIWKHFLWLHV
WKURXJKORQJGLVWDQFHVHUYLFHVDQGZLUHOHVVFRQQHFWLRQV
7KHUHZLOOFRPHDWLPHZKHQSHRSOHZLOOQRWXQGHUVWDQGKRZLWZDV
RQFHSRVVLEOHWROLYHLQWKHVWRQHODE\ULQWKVZHQRZNQRZDVPRGHUQELJ
FLWLHV 7KH UXLQV ZLOO WKHQ EH DGPLUHG DV WRGD\ WKH FDYHV RI WKH FDYH
GZHOOHUV'RFWRUVZLOOVFUDWFKWKHLUKHDGVKRZLWZDVSRVVLEOHIURPWKH
VWDQGSRLQW RI K\JLHQH WKDW SHRSOH FRXOG OLYH DQG WKULYH LQ VXFK DQ
HQYLURQPHQWFORVHGRIIIURPQDWXUHIUHHGRPOLJKWDQGDLULQVXFKDQ
DWPRVSKHUHRIVRRWVPRNHGXVWDQGGLUW
7KH FRPLQJ GRZQVL]LQJ RI WKH ELJ FLW\ DV D FRQVHTXHQFH RI WKH
XSWXUQLQWUDIILFHQJLQHHULQJLVDQHFHVVDU\SUHFRQGLWLRQIRUUHDOFXOWXUH
%HFDXVHLQWKHXQQDWXUDODQGXQKHDOWK\DWPRVSKHUHRIWRGD\ߥVELJFLW\
SHRSOHDUHV\VWHPDWLFDOO\SRLVRQHGDQGFULSSOHGERG\VRXODQGVSLULW
7KH XUEDQ FXOWXUH LV D PDUVK SODQW EHFDXVH LW LV ERUQH E\ GHJHQHUDWH
PRUELGDQGGHFDGHQWSHRSOHZKRKDYHYROXQWDULO\RULQYROXQWDULO\IDOOHQ
LQWRWKLVGHDGHQGOLIH

7+(&8/785$/3$5$',6(2)7+(0,//,21$,5(

7HFKQRORJ\ LV DEOH WR RIIHU PRGHUQ KXPDQ EHLQJV PRUH KDSSLQHVV
DQGSRVVLELOLWLHVWKDQSDVW\HDUVRIIHUHGWKHLUSULQFHVDQGNLQJV
2I FRXUVH DW WKH EHJLQQLQJ RI WKH WHFKQRORJLFDO ZRUOG SHULRG WKH
QXPEHURIWKRVHWRZKRPWKHLQYHQWLRQVRIWKHPRGHUQDJHDUHDYDLODEOH
LVVWLOOVPDOO
$PRGHUQPLOOLRQDLUHFDQVXUURXQGKLPVHOIZLWKOX[XU\FRPIRUWDQG
EHDXW\WKHZRUOGKDVWRRIIHU+HFDQHQMR\DOOWKHIUXLWVRIQDWXUHDQG
FXOWXUHDQGFDQOLYHZLWKRXWZRUNLQJZKHUHDQGKRZKHOLNHV%\SKRQH
RUFDUKHFDQFKRRVHWREHFRQQHFWHGZLWKWKHZRUOGRUQRWKHFDQOLYH
DVDKHUPLWLQWKHELJFLW\RULQVRFLHW\RQKLVFRXQWU\HVWDWHKHGRHVQRW
KDYH WR VXIIHU HLWKHU IURP WKH FOLPDWH RU IURP RYHUSRSXODWLRQ KXQJHU
DQGIURVWDUHDOLHQWRKLPWKURXJKKLVDLUSODQHKHLVPDVWHURIWKHVN\
WKURXJK KLV \DFKW ORUG RI WKH VHDV ,Q PDQ\ ZD\V KH LV IUHHU DQG PRUH
SRZHUIXO WKDQ 1DSROHRQ DQG &DHVDU 7KH\ FRXOG RQO\ FRQWURO KXPDQV
EXWWKH\FRXOGQRWIO\RYHURFHDQVDQGFRPPXQLFDWHDFURVVFRQWLQHQWV
+HRQWKHRWKHUKDQGLVWKHORUGRIQDWXUH)RUFHVRIQDWXUHVHUYHKLP
OLNH LQYLVLEOH PLJKW\ VHUYDQWV DQG VSLULWV :LWK WKHLU KHOS KH FDQ IO\
IDVWHU DQG KLJKHU WKDQ D ELUG GULYH IDVWHU RYHU WKH HDUWK WKDQ D JD]HOOH
DQGOLYHXQGHUZDWHUOLNHDILVK7KURXJKWKHVHDELOLWLHVDQGSRZHUVKHLV
HYHQ IUHHU WKDQ WKH QDWLYH RI WKH 6RXWK 6HDV DQG KDV RYHUFRPH WKH
ELEOLFDO FRXUVH 2Q WKH URDG WKURXJK FXOWXUH KH KDV UHWXUQHG WR D PRUH
SHUIHFWSDUDGLVH
7KHEDVLVIRUVXFKDIXOILOOHGOLIHKDVEHHQFUHDWHGE\WHFKQRORJ\)RU
WKH FKRVHQ IHZ WHFKQRORJ\ KDV WXUQHG WKH IRUHVWV DQG VZDPSV LQWR D
FXOWXUDO SDUDGLVH ,Q WKHVH OXFN\ FKLOGUHQ PDQ FDQ VHH WKH SURPLVH RI
GHVWLQ\IRUKLVJUDQGFKLOGUHQ7KH\DUHWKHYDQJXDUGRIPDQNLQGRQWKHLU
ZD\ LQWR WKH JDUGHQ RI (GHQ RI WKH IXWXUH :KDW LV H[FHSWLRQDO WRGD\
FDQ ZLWK PRUH WHFKQLFDO SURJUHVV EHFRPH WKH UXOH 7HFKQRORJ\ KDV
EXVWHGWKHJDWHVRISDUDGLVHRQO\DIHZKDYHSDVVHGWKURXJKWKHQDUURZ
HQWUDQFHVRIDUEXWWKHZD\LVRSHQDQGWKURXJKGLOLJHQFHDQGVSLULWDOO
KXPDQLW\FDQIROORZWKHVHOXFN\FKLOGUHQ0DQGRHVQRWQHHGWRGHVSDLU
KHKDVQHYHUEHHQVRFORVHWRKLVJRDODVKHLVWRGD\
-XVW D IHZ FHQWXULHV DJR WKH SRVVHVVLRQ RI D JODVV ZLQGRZ PLUURU
FORFN VRDS RU VXJDU ZDV D JUHDW OX[XU\ WHFKQRORJ\ KDV VSUHDG WKHVH
RQFHUDUHFRPPRGLWLHVRYHUWKHPDVVHV-XVWDVHYHU\RQHWRGD\ZHDUVD
ZDWFK DQG RZQV D PLUURU VR PD\EH LQ D FHQWXU\ RU VR HYHU\ SHUVRQ
FRXOGKDYHDFDUKLVRZQYLOODDQGKLVRZQWHOHSKRQH3URVSHULW\KDVWR
LQFUHDVHDOOWKHPRUHTXLFNO\DQGEHFRPHPRUHFRPPRQWKHIDVWHUWKH
SURGXFWLRQQXPEHUVLQFUHDVHLQUHODWLRQWRWKHSRSXODWLRQQXPEHUV,WLV
WKHFXOWXUDOJRDORIWHFKQRORJ\WRRIIHUWRDOOSHRSOHWKHRSSRUWXQLWLHVLQ
OLIH WKDW WRGD\ DUH DYDLODEOH WR WKRVH PLOOLRQDLUHV 7KDW LV ZK\
WHFKQRORJ\ LV ILJKWLQJ DJDLQVW QHFHVVLW\ QRW DJDLQVW ZHDOWK $JDLQVW
ERQGDJH QRW DJDLQVW GRPLQDWLRQ 7KH JRDO LV ZHDOWK SRZHU OHLVXUH
EHDXW\ DQG KDSSLQHVV IRU HYHU\RQH 1RW SUROHWDULDQL]DWLRQ EXW
DULVWRFUDWL]DWLRQRIKXPDQLW\
9,,,63,5,72)7+(7(&+12/2*,&$/$*(

+(52,&3$&,),60

7 KHSDUDGLVHRIWKHIXWXUHZLOOQRWEHZRQE\FRXSV,W
FDQ RQO\ EH FRQTXHUHG E\ ZRUN 7KH VSLULW RI WKH
WHFKQRORJLFDODJHLVKHURLFSDFLILVWLFKHURLFEHFDXVH
WHFKQRORJ\LVZDUZLWKDFKDQJHGZHDSRQSDFLILVWEHFDXVHWKHEDWWOHLV
QRWGLUHFWHGDJDLQVWSHRSOHEXWDJDLQVWQDWXUH
7KH WHFKQRORJLFDO KHURLVP LVEORRGOHVV WKHKHUR ZRUNVWKLQNVDFWV
DQGGDUHVQRWVHHNLQJWRWDNHWKHOLIHRIKLVIHOORZPDQEXWWRUHOHDVH
KLPIURPWKHVODYHU\RIKXQJHUFROGGLVWUHVVDQGIRUFHGODERU
7KH KHUR RI WKH WHFKQRORJLFDO DJH LV D SHDFHIXO KHUR RI ZRUN DQG
LQWHOOHFW
7KHZRUNRIWKHWHFKQRORJLFDODJHLVDVFHWLFLVPVHOIFRQWURODQGVHOI
VDFULILFH,QLWVSUHVHQWIRUPDQGH[WHQWLWLVQRWDSOHDVXUHEXWDKDUG
VDFULILFHZHRIIHUWRRXUIHOORZKXPDQEHLQJVDQGRXUGHVFHQGDQWV
$VFHWLFLVP PHDQV H[HUFLVH LW LV WKH *UHHN H[SUHVVLRQ IRU ZKDW LQ
(QJOLVK LV ߨWUDLQLQJߩ WKURXJK WKLV WUDQVODWLRQ WKH ZRUG ߨDVFHWLFLVPߩ
ORVHVLWVSHVVLPLVWLFFKDUDFWHUDQGEHFRPHVRSWLPLVWLFKHURLF
7KH RSWLPLVWLF OLIHDIILUPLQJ DVFHWLFLVP RI WKH WHFKQRORJLFDO DJH LV
SUHSDULQJ JRGߥV NLQJGRP RQ HDUWK FOHDULQJ WKH HDUWK IRU SDUDGLVH IRU
WKLV SXUSRVH LW PRYHV PRXQWDLQV ULYHUV DQG ODNHV ZUDSV WKH JOREH LQ
ZLUHV DQG UDLOV FUHDWHV SODQWDWLRQV IURP IRUHVWV DQG IDUPODQG IURP
VWHSSHV /LNH D VXSHUQDWXUDO EHLQJ PDQ LV FKDQJLQJ WKH VXUIDFH RI WKH
HDUWKDFFRUGLQJWRKLVQHHGV

7+(63,5,72)/$=,1(66

,Q WKH DJH RI ZRUN DQG WHFKQRORJ\ WKHUH LV QR JUHDWHU YLFH WKDQ
OD]LQHVVDVLQWKHDJHRIZDUWKHUHLVQRJUHDWHUYLFHWKDQFRZDUGLFH
7KHRYHUFRPLQJRILQHUWLDLVWKHPDLQWDVNRIWHFKQRORJLFDOKHURLVP
:KHUH OLIH PDQLIHVWV DV HQHUJ\ LQHUWLD LV WKH VLJQ RI GHDWK 7KH
VWUXJJOHRIOLIHDJDLQVWGHDWKLVDVWUXJJOHRIHQHUJ\DJDLQVWLQHUWLD7KH
YLFWRU\ RI GHDWK RYHU OLIH LV D YLFWRU\ RI LQHUWLD RYHU HQHUJ\ 7KH
PHVVHQJHUVRIGHDWKDUHROGDJHDQGGLVHDVH,QWKHPLQHUWLDZLQVRYHU
WKHOLIHIRUFHOLPEVDQGPRYHPHQWVJHWOLPS9LWDOLW\FRXUDJHDQGMR\
RI OLYLQJ VLQN HYHU\WKLQJ WLOWV WR WKH JURXQG JHWV WLUHG DQG OHWKDUJLF
XQWLO WKH PDQ ZKR FDQ QR ORQJHU PRYH IRUZDUG DQG FDQ QRW VWDQG XS
VLQNVLQWRWKHJUDYHDVDYLFWLPRIOHWKDUJ\WKHUHLQHUWLDWULXPSKVRYHU
OLIH
$OO \RXQJ IORZHUV JURZ DJDLQVW JUDYLW\ WRZDUGV WKH VXQ DOO ULSH
IUXLWVIDOORYHUZKHOPHGE\JUDYLW\WRWKHHDUWK
7KHV\PERORIWHFKQRORJ\ߥVYLFWRU\RYHUJUDYLW\RIKXPDQZLOODQG
KXPDQVSLULWRYHUWKHLQHUWLDRIPDWWHULVWKHIO\LQJPDQ)HZWKLQJVDUH
DV VXEOLPH DQG DV EHDXWLIXO DV KH 3RHWU\ DQG WUXWK URPDQFH DQG
WHFKQRORJ\WKHP\WKRORJLHVRI'DHGDOXVDQG:LHODQGDUHPDUULHGKHUH
ZLWK WKH YLVLRQV RI /HRQDUGR DQG *RHWKH 7KURXJK WKH DFWLRQV RI
VFLHQWLVWV WKH ZLOGHVW GUHDPV RI SRHWU\ EHFRPH UHDOLW\ RQ ZLQJV
VWUHWFKHGE\KLVPLQGDQGZLOOPDQULVHVDERYHVSDFHWLPHDQGJUDYLW\
RYHUWKHHDUWKDQGWKHVHD

%($87<$1'7(&+12/2*<

$Q\RQHZKRVWLOOGRXEWVWKHEHDXW\RIWHFKQRORJ\LVVLOHQFHGLQWKH
IDFHRIWKHIO\LQJPDQ%XWQRWRQO\WKHSODQHJLYHVXVQHZEHDXW\WKH
DXWRPRELOH PRWRUERDW IDVW ORFRPRWLYH JHQHUDWRU KDYH WKHLU RZQ
VSHFLILF EHDXW\ RI DFWLRQ DQG PRYHPHQW %XW EHFDXVH WKLV EHDXW\ LV
G\QDPLF LW FDQQRW OLNH WKH VWDWLF EHDXW\ RI WKH ODQGVFDSH EH KHOG LQ
SODFHE\EUXVKVW\OXVDQGFKLVHOWKHUHIRUHLWGRHVQRWH[LVWIRUSHRSOH
ZKR KDYH QR RULJLQDO VHQVH RI EHDXW\ ZKLFKDUW XVHV DV DJXLGH LQWKH
PD]HRIEHDXW\ߥVJDUGHQ
$ WKLQJ LV EHDXWLIXO E\ WKH LGHDO RI KDUPRQ\ DQG YLWDOLW\ WKDW LW
FRQYH\VWRXVDQGWKHLPSXOVHVZHKDYHLQWKHLUGLUHFWLRQ(DFKFXOWXUH
FUHDWHV LWV RZQ V\PEROV RI SRZHU DQG EHDXW\ WKH *UHHN LQFUHDVHG KLV
RZQ KDUPRQ\ LQ WKH VWDWXHV DQG WHPSOHV WKH 5RPDQ LQFUHDVHG KLV
VWUHQJWK LQ FLUFXV ILJKWV RI SUHGDWRUV DQG JODGLDWRUV WKH PHGLHYDO
&KULVWLDQ GHHSHQHG DQG WUDQVILJXUHG KLV VRXO WKURXJK WKH ORYH RI
VDFULILFHVDQGVDFUDPHQWVWKHPRGHUQFLWL]HQJUHZXSZLWKWKHKHURHVRI
KLV WKHDWHUV DQG QRYHOV WKH -DSDQHVH OHDUQHG DERXW JUDFH DQG GHVWLQ\
IURPKLVIORZHUV
,Q D WLPH RI UHVWOHVV SURJUHVV WKH LGHDO RI EHDXW\ KDG WR EHFRPH
G\QDPLFDQGZLWKLWLWVV\PERO7KHPDQRIWKHWHFKQRORJLFDODJHLVD
VWXGHQWRIWKHPDFKLQHKHKDVFUHDWHGIURPLWKHOHDUQVWLUHOHVVDFWLYLW\
DQG FRQFHQWUDWHG SRZHU 7KH PDFKLQH DV FUHDWXUH DQG WHPSOH RI KRO\
KXPDQ VSLULW V\PEROL]HV WKH RYHUFRPLQJ RI PDWWHU E\ WKH PLQG RI WKH
VWDWLFE\PRYHPHQWRIOD]LQHVVE\SRZHUJHWWLQJXSLQWKHVHUYLFHRIDQ
LGHDOLEHUDWLQJKXPDQLW\WKURXJKDFWLRQ
7HFKQRORJ\KDVJLIWHGWKHFRPLQJDJHDQHZIRUPRIH[SUHVVLRQWKH
FLQHPD&LQHPDLVDERXWWRUHSODFHWRGD\ߥVWKHDWHU\HVWHUGD\ߥVFKXUFK
FLUFXV DQG DPSKLWKHDWHU RI WKH GD\ EHIRUH \HVWHUGD\ DQG WR SOD\ D
OHDGLQJUROHLQWKHFXOWXUHRIWKHZRUNLQJVWDWHRIWKHIXWXUH
,Q DOO RI LWV DUWLVWLF GHILFLHQFLHV ILOP LV DOUHDG\ EHJLQQLQJ WR
XQFRQVFLRXVO\ FDUU\ D QHZ JRVSHO WR WKH PDVVHV WKH JRVSHO RI SRZHU
DQG EHDXW\ ,W DQQRXQFHV EH\RQG JRRG DQG HYLO WKH YLFWRU\ RI WKH
VWURQJHVWPDQDQGWKHPRVWEHDXWLIXOZRPDQZKHWKHUWKHPDQVXUSDVVHV
KLV ULYDO LQ ERGLO\ ZLOO RU LQWHOOHFWXDO SRZHU DGYHQWXUHU RU KHUR
FULPLQDORUGHWHFWLYHDQGZKHWKHUWKHZRPDQLVVH[LHURUQREOHUPRUH
JUDFLRXV RU VHOIOHVV WKDQ WKH RWKHUV D FRXUWHVDQ RU PRWKHU 7KH VFUHHQ
VFUHDPV WR WKH PHQ LQ WKRXVDQGV RI YDULDWLRQV ߨ%H VWURQJߩ 7R WKH
ZRPHQߨ%HEHDXWLIXOߩ
7RSXULI\DQGH[SDQGWKLVPLVVLRQRIPDVVHGXFDWLRQWKDWVOXPEHUVLQ
FLQHPD LV RQH RI WRGD\ߥV DUWLVWV ELJJHVW DQG PRVW LPSRUWDQW WDVNV
EHFDXVH WKH FLQHPD RI WKH IXWXUH ZLOO XQGRXEWHGO\ KDYH D JUHDWHU
LQIOXHQFHRQWKHSUROHWDULDQ ZRUNLQJFODVV FXOWXUHWKDQWKHDWHUKDGRQ
WKHERXUJHRLV

(0$1&,3$7,21

7KHFXOWRIWKHWHFKQRORJLFDODJHLVDFXOWRISRZHU7KHUHLVQRWLPH
DQG OHLVXUH IRU WKH GHYHORSPHQW RI KDUPRQ\ ,Q LWV QDPH ZLOO EH WKH
JROGHQDJHRIFXOWXUHZKLFKZLOOIROORZWKHLURQDJHRIZRUN
7\SLFDO IRU WKH G\QDPLF DWWLWXGH RI RXU DJH LV LWV PDOH(XURSHDQ
FKDUDFWHU 1LHW]VFKHߥV PDOH(XURSHDQ HWKLFV DUH RXU WLPHߥV SURWHVW
DJDLQVWWKHIHPLQLQH$VLDQPRUDOLW\RI&KULVWLDQLW\
 7KH HPDQFLSDWLRQ RI ZRPHQ LV DOVR D V\PSWRP RI WKH
PDVFXOLQL]DWLRQRIRXUZRUOGEHFDXVHLWGRHVQRWOHDGWKHIHPLQLQHW\SH
WRSRZHUEXWWKHPDVFXOLQH:KLOHLQWKHSDVWWKHIHPLQLQHZRPDQE\
KHULQIOXHQFHRQWKHPDQSDUWLFLSDWHGLQZRUOGOHDGHUVKLSWRGD\ߨPHQߩ
RI ERWK VH[HV ZLHOG WKH VFHSWHU RI HFRQRPLF DQG SROLWLFDO SRZHU 7KH
HPDQFLSDWLRQRIZRPHQVLJQLILHVWKHWULXPSKRIWKHߨPDQZRPDQߩRYHU
WKH UHDO IHPLQLQH ZRPDQ LW GRHV QRW OHDG WR WKH YLFWRU\ EXW WR WKH
DEROLWLRQRIZRPHQ7KHߨODG\ߩLVDOUHDG\H[WLQFWWKHߨZRPDQߩVKRXOG
IROORZ KHU 7KURXJK HPDQFLSDWLRQ WKH IHPDOH VH[ ZKLFK KDV EHHQ
SDUWLDOO\ H[FOXGHG LV EHLQJ PRELOL]HG IRU WKH WHFKQRORJLFDO ZDU DQG
SODFHGLQWKHDUP\RIODERU
7KHHPDQFLSDWLRQRI$VLDQVWDNHVSODFHXQGHUWKHVDPHFRQGLWLRQVDV
WKHHPDQFLSDWLRQRIZRPHQLWLVDV\PSWRPRIWKH(XURSHDQL]DWLRQRI
RXU ZRUOG EHFDXVH LW GRHV QRW OHDG WKH $VLDQ W\SH WR YLFWRU\ EXW WKH
(XURSHDQ:KLOHLQWKHSDVWWKH$VLDQVSLULWGRPLQDWHG(XURSHWKURXJK
&KULVWLDQLW\ WRGD\ ZKLWH DQG FRORUHG (XURSHDQV VKDUH ZRUOG
GRPLQDWLRQ7KHVRFDOOHG2ULHQWߥV$ZDNHQLQJPHDQVWKHWULXPSKRIWKH
\HOORZ(XURSHDQRYHUWKHWUXH2ULHQWDOLWGRHVQRWOHDGWRWKHYLFWRU\
EXW WR WKH GHVWUXFWLRQ RI $VLDQ FXOWXUH :KHUH WKH EORRG RI $VLD
WULXPSKV LQ WKH (DVW WKH VSLULW RI (XURSH ZLQV ZLWK LW WKH PDVFXOLQH
KDUGG\QDPLFSXUSRVHIXODFWLYHUDWLRQDOPLQG,QRUGHUWRSDUWLFLSDWH
LQSURJUHVV$VLDPXVWUHSODFHLWVKDUPRQLRXVVRXODQGFXOWXUHZLWKWKH
(XURSHDQ 7KH HPDQFLSDWLRQ RI WKH $VLDQV PHDQV WKHLU HQWU\ LQWR WKH
(XURSHDQ$PHULFDQDUP\RIZRUNDQGWKHLUPRELOL]DWLRQIRUWKHZDURI
WHFKQRORJ\$IWHULWVFRPSOHWLRQ$VLDZLOODJDLQEH$VLDQDQGZRPHQ
ZLOOEHDEOHWREHIHPLQLQHDJDLQWKHQ$VLDDQGZRPHQZLOOHGXFDWHWKH
ZRUOGLQDSXUHUKDUPRQ\8QWLOWKHQKRZHYHU$VLDQVZLOOKDYHWRZHDU
WKH(XURSHDQXQLIRUPZRPHQWKHPDOH

&+5,67,$1,7<$1'.1,*+7+22'

$Q\RQH ZKR XQGHUVWDQGV FXOWXUH DV KDUPRQ\ ZLWK QDWXUH PXVW FDOO
RXUHUDEDUEDULFDQ\RQHZKRXQGHUVWDQGVFXOWXUHDVFRQIURQWDWLRQZLWK
QDWXUHUHFRJQL]HVWKHVSHFLILFPDVFXOLQH(XURSHDQIRUPRIRXUFXOWXUH
7KH &KULVWLDQ$VLDQ RULJLQ RI (XURSHDQ HWKLFV PDGH XV PLVXQGHUVWDQG
WKH HWKLFDO YDOXH RI WKH SURJUHVV RI WHFKQRORJ\ LW LV RQO\ XQGHU WKH
SHUVSHFWLYH RI 1LHW]VFKH WKDW WKH KHURLFDVFHWLF VWUXJJOH RI WKH
WHFKQRORJLFDODJHIRUVDOYDWLRQWKURXJKPLQGDQGZRUNDSSHDUVDVJRRG
DQGQREOH
7KH YLUWXHV RI WKH WHFKQRORJLFDO DJH DUH DERYH DOO HQHUJ\
SHUVHYHUDQFH EUDYHU\ UHQXQFLDWLRQ VHOIFRQWURO DQG VROLGDULW\ 7KHVH
TXDOLWLHVVWHHOWKHVRXOWRWKHEORRGOHVVKDUGILJKWRIVRFLDOZRUN
7KHHWKLFRIZRUNIROORZVWKHNQLJKWO\HWKLFVRIEDWWOHERWKDUHPDOH
ERWK1RUGLFV1RZWKLVHWKLFZLOODGDSWWRQHZFRQGLWLRQVDQGSXWDQHZ
ZRUNKRQRULQSODFHRIWKHVXUYLYLQJNQLJKWO\KRQRU7KHQHZFRQFHSWRI
KRQRU ZLOO EH EDVHG RQ ZRUN ߟ WKH QHZ VKDPH RQ OD]LQHVV 7KH OD]\
SHUVRQ ZLOO EH FRQVLGHUHG DQG GHVSLVHG DV D GHVHUWHU RI WKH ZRUNLQJ
IURQW7KHREMHFWVRIWKHQHZKHURZRUVKLSZLOOEHLQYHQWRUVLQVWHDGRI
EDURQVYDOXHFUHDWRUVLQVWHDGRIYDOXHGHVWUR\HUV
)URPWKH&KULVWLDQPRUDOLW\WKHHWKLFRIZRUNZLOOWDNHRYHUWKHVSLULW
RI SDFLILVP DQG VRFLDOLVP EHFDXVH RQO\ SHDFH LV SURGXFWLYH IRU
WHFKQRORJLFDO SURJUHVV DQG ZDU LV GHVWUXFWLYH DQG EHFDXVH RQO\ WKH
VRFLDO VSLULW RI FRRSHUDWLRQ RI DOO FUHDWRUV FDQ OHDG WR WHFKQRORJ\ߥV
YLFWRU\RYHUQDWXUH

7+(%8''+,67'$1*(5

$Q\ SDVVLYLVW DQG KRVWLOH SURSDJDQGD DJDLQVW WKH WHFKQRORJLFDO DQG

LQGXVWULDOGHYHORSPHQWLVWUHDVRQDJDLQVWWKHDUP\RIWKH(XURSHDQZRUN
IRUFH EHFDXVH LW LV D FDOO IRU UHWUHDW DQG GHVHUWLRQ GXULQJ WKH GHFLGLQJ
FDPSDLJQ7ROVWRLDQVDQGQHR%XGGKLVWVDUHJXLOW\RIWKLVFXOWXUDOFULPH
WKH\ FKDOOHQJH PDQNLQG WR VXUUHQGHU WR QDWXUH VKRUWO\ EHIRUH WKH ILQDO
YLFWRU\WRHYDFXDWHWKHWHUUDLQFRQTXHUHGE\WHFKQRORJ\DQGYROXQWDULO\
UHWXUQ WR WKH SULPLWLYHQHVV RI DJULFXOWXUH DQG FDWWOH EUHHGLQJ 7LUHG RI
WKHEDWWOHWKH\ZDQW(XURSHWROLYHDSRRUFKLOGLVKH[LVWHQFHLQVWHDGRI
FUHDWLQJ D QHZ ZRUOG WKURXJK WKH KLJKHVW DSSOLFDWLRQ RI WKH PLQG ZLOO
DQGPXVFOHV
7KDW ZKLFK VWLOO LV YLDEOH DQG YLWDO LQ (XURSH UHMHFWV WKLV FXOWXUDO
VXLFLGHLWVHQVHVWKHXQLTXHQHVVRILWVVLWXDWLRQDQGLWVUHVSRQVLELOLW\WR
IXWXUH JHQHUDWLRQV /D\LQJ GRZQ WKH ZHDSRQV RI WHFKQRORJ\ ZRXOG
WKURZ WKH ZRUOG EDFN LQWR WKH $VLDQ FXOWXUH F\FOH 7KH WHFKQRORJLFDO
ZRUOGUHYROXWLRQZKLFKLVFDOOHG(XURSHZRXOGFROODSVHDQGEXU\RQHRI
WKH JUHDWHVW KRSHV RI PDQNLQG (XURSH ZKLFK OLYHV IURP LWV KHURLF
FUHDWLRQV PXVW LQZDUGO\ UHMHFW WKH VSLULW RI %XGGKLVP -DSDQ DV LW
EHFRPHV PRUH LQGXVWULDOL]HG PXVW LQWHUQDOO\ UHMHFW %XGGKLVP VR WKH
PRUH(XURSHLQWHUQDOO\VXEPLWVWR%XGGKLVPLWPXVWQHJOHFWDQGEHWUD\
LWVWHFKQRORJLFDOPLVVLRQ%XGGKLVPLVDZRQGHUIXOFURZQLQJIRUPDWXUH
FXOWXUHV EXW D GDQJHURXV SRLVRQ IRU QDVFHQW FXOWXUHV ,WV ZRUOGYLHZ LV
JRRGIRUROGDJHIRUDXWXPQߟDVWKHUHOLJLRQRI1LHW]VFKHLVIRU\RXWK
DQGVSULQJߟ*RHWKHߥVEHOLHILVIRUWKHEORRPRIVXPPHU
%XGGKLVP ZRXOG VXIIRFDWH WHFKQRORJ\ DQG ZLWK LW WKH VSLULW RI
(XURSH
(XURSHVKRXOGUHPDLQWUXHWRLWVPLVVLRQDQGQHYHUGHQ\WKHURRWVRI
LWVQDWXUHKHURLVPDQGUDWLRQDOLVP*HUPDQLFZLOODQG+HOOHQLVWLFVSLULW
%HFDXVHWKHPLUDFOHWKDWLV(XURSHDURVHIURPWKHPDUULDJHRIWKHVHWZR
HOHPHQWV 7KH EOLQG GULYH RI WKH 1RUGLF EDUEDULDQV EHFDPH VHHLQJ DQG
IUXLWIXOWKURXJKFRQWDFWZLWKWKHVSLULWXDOFXOWXUHRIWKHPLGGOH(XURSHDQ
QDWLRQVVRZDUULRUVEHFDPHWKLQNHUVKHURHVEHFDPHLQYHQWRUV
$VLDߥVP\VWLFLVPWKUHDWHQV(XURSHߥVPHQWDOFODULW\$VLDߥVSDVVLYLVP
WKUHDWHQV LWV PDOH HQHUJ\ 2QO\ LI (XURSH UHVLVWV WKHVH WHPSWDWLRQV DQG
GDQJHUVDQGUHPHPEHUVLWV+HOOHQLFDQG*HUPDQLFLGHDOVZLOOLWEHDEOH
WR ILJKW WKH EDWWOH RI WHFKQRORJ\ WR WKH HQG WR UHGHHP LWVHOI DQG WKH
ZRUOG
,;67,11(6$1'.5$66,1

(&2120,&67$7(6

6 WLQQHV LV WKH OHDGHU RI WKH FDSLWDOLVW HFRQRP\ RI

*HUPDQ\  .UDVVLQ LV WKH OHDGHU RI WKH FRPPXQLVW
HFRQRP\ RI 5XVVLD ,Q WKH IROORZLQJ WKH\ DUH
FRQVLGHUHGDVH[SRQHQWVRIFDSLWDOLVWDQGFRPPXQLVWSURGXFWLRQQRWDV
SHUVRQDOLWLHV
6LQFHWKHFROODSVHRIWKHWKUHHPDMRU(XURSHDQPLOLWDU\PRQDUFKLHV
WKHUH DUH RQO\ HFRQRPLF VWDWHV OHIW LQ RXU SDUW RI WKH ZRUOG HFRQRPLF
SUREOHPV DUH DW WKH FHQWHU RI LQWHUQDO DQG H[WHUQDO SROLWLFV 0HUFXU\
UXOHVWKHZRUOGDVWKHKHLURI0DUVߟDVDIRUHUXQQHURI$SROOR
7KHWUDQVIRUPDWLRQIURPWKHPLOLWDU\VWDWHWRWKHHFRQRPLFVWDWHLVWKH
SROLWLFDO H[SUHVVLRQ RI WKH IDFW WKDW LQVWHDG RI WKH ZDU IURQW WKH ODERU
IURQWKDVPRYHGLQWRWKHIRUHJURXQGRIKLVWRU\
0LOLWDU\ VWDWHV FRUUHVSRQG WR WKH DJH RI ZDU ߟ HFRQRPLF VWDWHV
FRUUHVSRQGWRWKHDJHRIODERU
7KH FRPPXQLVW DV ZHOO DV WKH FDSLWDOLVW VWDWH DUH ODERU VWDWHV QR
ORQJHU ZDU VWDWHV ߟ QRW \HW FXOWXUH VWDWHV %RWK DUH FKDUDFWHUL]HG E\
SURGXFWLRQ DQG E\ SURJUHVV %RWK DUH UXOHG E\ SURGXFHUV DV RQFH WKH
PLOLWDU\VWDWHVZHUHUXOHGE\PLOLWDULHVWKHFRPPXQLVWE\WKHOHDGHUVRI
WKHLQGXVWULDOZRUNHUVWKHFDSLWDOLVWE\WKHOHDGHUVRIWKHLQGXVWULDOLVWV
&DSLWDOLVPDQGFRPPXQLVPDUHMXVWDVPXFKUHODWHGWRRQHDQRWKHUDV
DUH &DWKROLFLVP DQG 3URWHVWDQWLVP ZKLFK IRU FHQWXULHV WKRXJKW RI
WKHPVHOYHV DV H[WUHPH RSSRVLWHV DQG IRXJKW EORRGLO\ 1RW WKHLU
GLIIHUHQFHEXWWKHLUNLQVKLSLVWKHFDXVHRIWKHELWWHUKDWUHGZLWKZKLFK
WKH\SHUVHFXWHHDFKRWKHU
$V ORQJ DV FDSLWDOLVWV DQG FRPPXQLVWV KROG WKH YLHZ WKDW LW LV
SHUPLVVLEOH DQG LPSHUDWLYH WR NLOO RU VWDUYH SHRSOH IRU DGYRFDWLQJ
GLIIHUHQWHFRQRPLFSULQFLSOHVWKH\DUHERWKDWDYHU\ORZOHYHORIHWKLFDO
GHYHORSPHQW 7KHRUHWLFDOO\ RI FRXUVH WKH SUHPLVHV DQG JRDOV RI
FRPPXQLVPDUHPRUHHWKLFDOWKDQWKRVHRIFDSLWDOLVPEHFDXVHWKH\DUH
EDVHGRQPRUHREMHFWLYHDQGIDLUHUSRLQWVRIYLHZ
 +RZHYHU HWKLFDO FRQVLGHUDWLRQV DUH QRW GHFLVLYH IRU WHFKQRORJLFDO
SURJUHVV KHUH WKH GHFLVLYH TXHVWLRQ LV ZKHWKHU WKH FDSLWDOLVW RU WKH
FRPPXQLVW V\VWHP LV PRUH UDWLRQDO DQG PRUH DSSURSULDWH WR FDUU\ RXW
WHFKQRORJ\ߥVOLEHUDWLRQZDUDJDLQVWWKHIRUFHVRIQDWXUH

7+(5866,$1),$6&2

7KHVXFFHVVVSHDNVIRU6WLQQHVDJDLQVW.UDVVLQFDSLWDOLVWHFRQRP\LV
IORXULVKLQJZKLOHWKHFRPPXQLVWLVDWDVWDQGVWLOO7RGHGXFHWKHYDOXH
RI WKH WZR V\VWHPV IURP WKLV VWDWHPHQW ZRXOG EH VLPSO\ XQIDLU )RU LW
PXVW QRW EH RYHUORRNHG XQGHU ZKLFK FLUFXPVWDQFHV &RPPXQLVP WRRN
RYHUDQGOHGWKH5XVVLDQHFRQRP\DIWHUDPLOLWDU\SROLWLFDODQGVRFLDO
FROODSVHDIWHUWKHORVVRILPSRUWDQWLQGXVWULDODUHDVLQDILJKWDJDLQVWWKH
ZKROHZRUOGXQGHUSUHVVXUHRI\HDUVRIDEORFNDGHFRQWLQXRXVFLYLOZDU
DQGSDVVLYHUHVLVWDQFHE\IDUPHUVFLYLOLDQVDQGLQWHOOLJHQWVLDWRWKLVZDV
DGGHG WKH FDWDVWURSKLF FURS IDLOXUH ,I RQH FRQVLGHUV DOO WKHVH
FLUFXPVWDQFHVDVZHOODVWKHORZHURUJDQL]DWLRQDOWDOHQWDQGHGXFDWLRQ
RI WKH 5XVVLDQ SHRSOH RQH FDQ RQO\ PDUYHO WKDW VRPH RI WKH 5XVVLDQ
LQGXVWU\KDVVXUYLYHG
7R FRPSDUH WKH IDLOXUH RI WKH ILYH\HDU ROG FRPPXQLVP ZLWK WKH
VXFFHVV RI WKH PDWXUH FDSLWDOLVP XQGHU WKHVH FLUFXPVWDQFHV ZRXOG EH
MXVW DV XQIDLU DV FRPSDULQJ D QHZERUQ FKLOG WR DQ DGXOW PDQ DQG WKHQ
GHWHUPLQLQJWKDWWKHFKLOGZDVLVLGLRWߟZKLOHLQKLPPD\EHVOHHSVD
JHQLXV
(YHQLIFRPPXQLVPLQ5XVVLDFROODSVHVLWZRXOGEHHTXDOO\QD±YHWR
GHFODUH WKH UHYROXWLRQ D WKLQJ RI WKH SDVW ߟ MXVW DV LW ZRXOG KDYH EHHQ
IRROLVK DIWHU WKH FROODSVH RI WKH +XVVLWH PRYHPHQW WR EHOLHYH WKH
UHIRUPDWLRQZDVRYHUEHFDXVHDIWHUDIHZGHFDGHV/XWKHUDSSHDUHGDQG
OHGPDQ\RIWKH+XVVLWHLGHDVWRYLFWRU\

&$3,7$/,67$1'&20081,67352'8&7,21

7KH HVVHQWLDO DGYDQWDJH RI WKH FDSLWDOLVW HFRQRP\ OLHV LQ LWV
H[SHULHQFH ,W FRQWUROV DOO PHWKRGV RI RUJDQL]DWLRQ DQG SURGXFWLRQ DOO
VWUDWHJLFVHFUHWVLQWKHVWUXJJOHEHWZHHQPDQDQGQDWXUHDQGKDVDVWDII
RIWUDLQHGLQGXVWULDORIILFHUV&RPPXQLVPRQWKHRWKHUKDQGLVIRUFHG
WR GHVLJQ QHZ ZDU SODQV ZLWK DQ LQDGHTXDWH JHQHUDO VWDII DQG RIILFHU
VWDII WR WU\ QHZ PHWKRGV RI RUJDQL]DWLRQ DQG SURGXFWLRQ 6WLQQHV FDQ
DGYDQFHRQNQRZQWUDFNVZKLOH.UDVVLQPXVWEHDVFRXWLQWKHMXQJOHRI
WKHHFRQRPLFUHYROXWLRQ
7KURXJK FRPSHWLWLRQ SURILW DQG ULVN FDSLWDOLVP RZQV DQ
XQVXUSDVVDEOH HQJLQH WKDW NHHSV WKH HFRQRPLF DSSDUDWXV LQ FRQVWDQW
PRWLRQ HJRLVP (YHU\ HQWUHSUHQHXU LQYHQWRU HQJLQHHU DQG ZRUNHU LQ
WKH FDSLWDOLVW VWDWH LV FRQVWDQWO\ KDUQHVVLQJ LWV IRUFHV WR DYRLG EHLQJ
RYHUUXQE\FRPSHWLWLRQDQGJRLQJXQGHU7KHVROGLHUVDQGRIILFHUVRIWKH
ODERUDUP\PXVWDGYDQFHVRDVWRQRWJHWXQGHUWKHZKHHOV
,QWKHIUHHLQLWLDWLYHRIDFRPSDQ\LVDQRWKHUDGYDQWDJHRIFDSLWDOLVP
WR ZKLFK WHFKQRORJ\ RZHV D ORW 2QH RI WKH PRVW GLIILFXOW SUREOHPV RI
FRPPXQLVPLVWKHDYRLGDQFHRIWKHHFRQRPLFEXUHDXFUDF\E\ZKLFKLWLV
FRQVWDQWO\WKUHDWHQHG
7KH PDLQ WHFKQLFDO DGYDQWDJH RI FRPPXQLVP OLHV LQ WKH IDFW WKDW LW
KDV WKH RSSRUWXQLW\ WR FRPELQH DOO WKH SURGXFWLYH IRUFHV DQG QDWXUDO
UHVRXUFHVRILWVHFRQRPLFDUHDDQGWRUDWLRQDOO\XVHWKHPDFFRUGLQJWRD
XQLIRUP SODQ ,Q GRLQJ VR KH VDYHV DOO WKH IRUFHV WKDW FDSLWDOLVP LV
ZDVWLQJ RQ GHIHQGLQJ DJDLQVW WKH FRPSHWLWLRQ 7KH EDVLF V\VWHPDWLF
QDWXUHRIWKHFRPPXQLVWHFRQRP\ZKLFKWRGD\XQGHUWDNHVWRUDWLRQDOL]H
WKH 5XVVLDQ HPSLUH LQ DFFRUGDQFH ZLWK D XQLILHG SODQ WHFKQLFDOO\
UHSUHVHQWV D VXEVWDQWLDO DGYDQWDJH RYHU WKH &DSLWDOLVW SURGXFWLRQ
DQDUFK\7KH&RPPXQLVWODERUDUP\ILJKWVXQGHURQHXQLWHGFRPPDQG
DJDLQVW WKH KRVWLOH QDWXUH ZKLOH WKH IUDJPHQWHG ODERU EDWWDOLRQV RI
FDSLWDOLVP QRW RQO\ ILJKW DJDLQVW WKH FRPPRQ HQHP\ EXW DOVR DJDLQVW
HDFKRWKHUWRGHIHDWWKHFRPSHWLWLRQ,QDGGLWLRQ.UDVVLQKROGVKLVDUP\
ILUPHULQKLVKDQGWKDQ6WLQQHVEHFDXVHWKHZRUNHUVRIWKH6WLQQHVDUP\
DUH DZDUH WKDW SDUW RI WKHLU ZRUN LV IRU WKH HQULFKPHQW RI D IRUHLJQ
KRVWLOHHQWHUSULVHZKLOHWKH.UDVVLQDUP\DUHDZDUHWKDWWKH\ZRUNIRU
WKHFRPPXQLVWVWDWHRIZKLFKWKH\DUHSDUWQHUVDQGVXSSRUWHUV6WLQQHV
DSSHDUVWRKLVZRUNHUVDVRSSUHVVRUDQGDGYHUVDU\.UDVVLQDVOHDGHUDQG
DVVRFLDWH 7KHUHIRUH .UDVVLQ FDQ GDUH WR EDQ VWULNHV DQG LQWURGXFH
6XQGD\ZRUNZKLOHIRU6WLQQHVWKLVZRXOGEHLPSRVVLEOH
7KH 6WLQQHV DUP\ LV GHFRPSRVHG E\ JURZLQJ GLVVDWLVIDFWLRQ DQG
PXWLQ\ZKLOHWKH.UDVVLQDUP\GHVSLWHLWVPDWHULDOQHHGVLVVXSSRUWHG
E\DQߨLGHDOߩJRDO,QVKRUWWKHZDUDJDLQVWWKHIRUFHVRIQDWXUHLVDFLYLO
ZDU LQ 5XVVLD ZKHUHDV LQ (XURSH DQG $PHULFD LW LV D G\QDVWLF ZDU RI
LQGXVWU\NLQJV
7KH ODERU RI WKH FRPPXQLVW ZRUNHU LV D EDWWOH IRU KLV VWDWH DQG KLV
IRUPRIVWDWHWKHODERURIWKHFDSLWDOLVWZRUNHULVDEDWWOHIRUKLVOLIH
+HUHWKHPDLQGULYLQJIRUFHEHKLQGODERULVHJRLVPWKHUHLWLVSROLWLFDO
LGHDOLVP 8QIRUWXQDWHO\ DW WKH SUHVHQW VWDWH RI HWKLFV HJRLVP LV D
VWURQJHUPRWRUWKDQLGHDOLVPDQGWKXVWKHILJKWLQJYDOXHRIWKHFDSLWDOLVW
ODERU DUP\ LV JUHDWHU WKDQ WKDW RI WKH FRPPXQLVW &RPPXQLVP KDV D
PRUHUDWLRQDOHFRQRPLFSODQߟFDSLWDOLVPKDVDVWURQJHUZRUNHQJLQH
&DSLWDOLVP ZLOO IDLO QRW EHFDXVH RI LWV WHFKQLFDO EXW EHFDXVH RI LWV
HWKLFDO GHIHFWV 7KH GLVFRQWHQW RI 6WLQQHVߥ DUP\ ZLOO QRW EH KHOG GRZQ
E\ULIOHVLQWKHORQJUXQ3XUHFDSLWDOLVPLVEDVHGRQWKHGHSHQGHQFHDQG
LJQRUDQFHRIWKHZRUNHUVߟOLNHWKHVODYHREHGLHQFHRIWKHPLOLWDU\7KH
PRUH LQGHSHQGHQW VHOIFRQILGHQW DQG HGXFDWHG WKH ZRUNLQJ FODVV
EHFRPHVWKHPRUHLPSRVVLEOHLWZLOOEHIRUSULYDWHLQGLYLGXDOVWRPDNH
WKHPZRUNIRUWKHLUSULYDWHLQWHUHVWV
7KH IXWXUH EHORQJV WR .UDVVLQ  WKH 5XVVLDQ H[SHULPHQW ZLOO GHFLGH
WRGD\ߥVHFRQRP\7KDWLVZK\LWLVLQWKHEHVWLQWHUHVWRIWKHZKROHZRUOG
QRW RQO\ QRW WR GLVWXUE WKLV H[SHULPHQW EXW WR VWURQJO\ VXSSRUW LW
%HFDXVH RQO\ WKHQ ZRXOG LWV RXWFRPH EH DQ DQVZHU WR WKH TXHVWLRQ RI
ZKHWKHU FRPPXQLVP LV FDSDEOH RI UHIRUPLQJ WRGD\ߥV HFRQRP\ ߟ RU
ZKHWKHUWKHQHFHVVDU\HYLORIFDSLWDOLVPLVSUHIHUDEOHWRLW

0(5&(1$5,(6$1'62/',(562)/$%25

&DSLWDOLVP FRUUHVSRQGV WR WKH PHUFHQDU\ DUP\ LQ WKH DJH RI ZDU ߟ
FRPPXQLVP WR WKH SHRSOHߥV DUP\ ,Q WKH WLPH RI PHUFHQDULHV HYHU\
ZHDOWK\PDQFRXOGUHFUXLWDQGHTXLSDPLOLWDU\DUP\ZKLFKKHVDODULHG
DQGFRPPDQGHGߟMXVWDVWRGD\HYHU\ULFKPDQFDQUHFUXLWDQGHTXLSD
ODERUDUP\ZKLFKKHVDODULHVDQGFRPPDQGV
7KUHH FHQWXULHV DJR :DOOHQVWHLQ SOD\HG DQ DQDORJRXV UROH LQ
*HUPDQ\ DV 6WLQQHV WRGD\ ZLWK WKH KHOS RI KLV IRUWXQH ZKLFK KH KDG
PXOWLSOLHG LQ WKH %RKHPLDQ ZDU DQG WKHDUP\ ZKLFK KH SURPRWHGDQG
PDLQWDLQHG :DOOHQVWHLQ WUDQVIRUPHG IURP D SULYDWH PDQ WR WKH PRVW
SRZHUIXO SHUVRQDOLW\ RI WKH *HUPDQ 5HLFK ߟ MXVW DV 6WLQQHV WRGD\
WKURXJK KLV IRUWXQH ZKLFK KH LQFUHDVHG LQ WKH ZRUOG ZDU DV ZHOO DV
WKURXJK WKH SUHVV DQG D ODERU DUP\ ZKLFK KH SURPRWHV DQG PDLQWDLQV
EHFDPHWKHPRVWSRZHUIXOPDQLQWKH*HUPDQ5HSXEOLF
,QWKHFDSLWDOLVWVWDWHWKHZRUNHULVDPHUFHQDU\WKHHQWUHSUHQHXULV
WKHFRPPDQGHUߟLQWKHFRPPXQLVWVWDWHWKHZRUNHULVDVROGLHUZKLFK
LV VXERUGLQDWH WR WKH VWDWHFRQWUROOHG JHQHUDOV $V WKH FRPPDQGHUV
FRQTXHUHGDQGEXLOWG\QDVWLHVZLWKWKHEORRGRIWKHLUPHUFHQDULHVVRWKH
PRGHUQFRPPDQGHUVFRQTXHUZLWKWKHVZHDWRIWKHLUODERUHUVZHDOWKDQG
SRZHUDQGEXLOGSOXWRFUDWLFG\QDVWLHV
$V HYHU\ PHUFHQDU\ FRPPDQGHU WKHQ VR LQGXVWU\ OHDGHUV WRGD\
QHJRWLDWHDVHTXDOVZLWKJRYHUQPHQWVDQGVWDWHVWKH\LQIOXHQFHSROLWLFV
ZLWKWKHLUPRQH\DVWKH\RQFHGLGZLWKWKHLUSRZHU
7KH UHIRUP RI WKH ODERU DUP\ ZKLFK LV FDUULHG RXW E\ FRPPXQLVP
FRUUHVSRQGVLQDOOGHWDLOVWRWKHUHIRUPRIWKHDUP\ZKLFKDOOWKHPRGHUQ
VWDWHVKDYHXQGHUJRQH
7KH DUP\ UHIRUP KDV UHSODFHG WKH PHUFHQDU\ DUPLHV ZLWK SHRSOHߥV
DUPLHV LW LQWURGXFHG PDQGDWRU\ HQUROOPHQW QDWLRQDOL]HG WKH DUP\
EDQQHG SULYDWH UHFUXLWPHQW UHSODFHG WKH ODQGRZQHUV ZLWK VWDWH
HPSOR\HGRIILFHUVDQGHWKLFDOO\JORULILHGWKHPLOLWDU\
7KHODERUVWDWHLVLQWURGXFLQJWKHVDPHUHIRUPVLQWKHODERUDUP\LW
SURFODLPV PDQGDWRU\ ODERU QDWLRQDOL]HV WKH LQGXVWU\ EDQV SULYDWH
HQWHUSULVH UHSODFHV WKH SULYDWH HQWUHSUHQHXUV ZLWK VWDWHDSSRLQWHG
GLUHFWRUVDQGJORULILHVZRUNDVDPRUDOGXW\
6WLQQHV DQG .UDVVLQ DUH ERWK FRPPDQGHUV RI PLJKW\ ODERU IRUFHV
ILJKWLQJDJDLQVWWKHFRPPRQHQHP\WKH1RUGLFQDWXUH6WLQQHVOHDGVD
PHUFHQDU\ DUP\ DV D PRGHUQ :DOOHQVWHLQ  .UDVVLQ OHDGV D SHRSOHߥV
DUP\DVILHOGPDUVKDORIDODERUVWDWH:KLOHWKHVHWZROHDGHUVFRQVLGHU
WKHPVHOYHVRSSRQHQWVWKH\DUHDOOLHVPDUFKLQJVHSDUDWHVWULNHDVRQH

62&,$/&$3,7$/,60ߟ/,%(5$/&20081,60

-XVW DV WKH UHJHQHUDWLRQ RI &DWKROLFLVP ZDV D FRQVHTXHQFH RI WKH
UHIRUPDWLRQVRFRXOGWKHULYDOU\RIFDSLWDOLVPDQGFRPPXQLVPIHUWLOL]H
ERWK LI LQVWHDG RI ILJKWLQJ HDFK RWKHU WKURXJK PXUGHU VODQGHU DQG
VDERWDJH WKH\ ZRXOG OLPLW WKHPVHOYHV WR VKRZLQJ WKHLU KLJKHU ZRUWK
WKURXJKFXOWXUDODFKLHYHPHQWV
 1R WKHRUHWLFDO MXVWLILFDWLRQ RI FDSLWDOLVP SURPRWHV WKLVV\VWHP PRUH
WKDQ WKH LQGLVSXWDEOH IDFW WKDW WKH OLIH RI $PHULFDQ ZRUNHUV VRPH RI
ZKRP GULYH WR ZRUN LQ WKHLU RZQ FDU  LV LQ IDFW EHWWHU WKDQ WKDW RI WKH
5XVVLDQV ZKR DUH HTXDOO\ VWDUYLQJ DQG VWDUYLQJ WR GHDWK %HFDXVH
SURVSHULW\ LV PRUH LPSRUWDQW WKDQ HTXDOLW\ LW LV EHWWHU DOO SURVSHU DQG
IHZ JHW ULFK WKDQ WKDW JHQHUDO HTXDO PLVHU\ SUHYDLOV 2QO\ HQY\ DQG
SHGDQWU\FDQUHVLVWWKLVMXGJHPHQW%HVWRIFRXUVHZRXOGEHXQLYHUVDO
HTXDOZHDOWKߟEXWWKDWLVLQWKHIXWXUHQRWLQWKHSUHVHQWLWFDQRQO\EH
EURXJKWDERXWE\WHFKQRORJ\QRWSROLWLFV
$PHULFDQ FDSLWDOLVP LV DZDUH WKDW LW FDQ RQO\ KROG LWV RZQ WKURXJK
JHQHURXVVRFLDODFWLRQ,WFRQVLGHUVLWVHOIDWUXVWHHRIWKHQDWLRQDOZHDOWK
ZKLFKLWXVHVWRSURPRWHLQYHQWLRQVFXOWXUDODQGKXPDQLWDULDQSXUSRVHV
2QO\ D VRFLDO FDSLWDOLVP WKDW PDNHVVXFK DQ HIIRUW WRUHFRQFLOHZLWK
WKHZRUNIRUFHKDVDFKDQFHRIVXUYLYDORQO\DOLEHUDOFRPPXQLVPWKDW
VHHNV WR UHFRQFLOH ZLWK WKH LQWHOOLJHQWVLD KDV D FKDQFH RI VXUYLYDO
(QJODQG LV WU\LQJ WKH ILUVW URXWH 5XVVLD WKH VHFRQG &RQGXFWLQJ D ZDU
DJDLQVWWKHZLOORIWKHRIILFHUVLVMXVWDVLPSRVVLEOHLQWKHORQJUXQDVLWLV
DJDLQVW WKH ZLOO RI WKH WURRSV 7KLV DOVR DSSOLHV WR WKH ODERU DUP\ LW
GHSHQGVRQH[SHUWOHDGHUVDVZHOODVRQZLOOLQJZRUNHUV
.UDVVLQ UHDOL]HG WKDW LW LV QHFHVVDU\ IRU FRPPXQLVP WR OHDUQ IURP
FDSLWDOLVP 7KDW LV ZK\ KH UHFHQWO\ SURPRWHG WKH SULYDWH LQLWLDWLYH
DSSRLQWLQJ WR KHDGV RI VWDWHRZQHG HQWHUSULVHV HQHUJHWLF DQG H[SHUW
HQJLQHHUV ZLWK WKH EURDGHVW DXWKRULW\ DQG SURILW VKDULQJ DQG EURXJKW
EDFN SDUW RI WKH GLVSODFHG LQGXVWULDOLVWV ILQDOO\ KH VXSSRUWV WKH ZHDN
HQJLQHRILGHDOLVPZLWKHJRLVPDPELWLRQDQGFRHUFLRQDQGWKURXJKWKLV
PL[HG V\VWHP VHHNV WR LQFUHDVH WKH ZRUN SHUIRUPDQFH RI WKH 5XVVLDQ
SUROHWDULDW
2QO\ WKHVH FDSLWDOLVW PHWKRGV FDQ VDYH FRPPXQLVP .UDVVLQ KDV
FRPHWRUHDOL]HWKDWZLQWHUDQGWKHGURXJKWDUHFUXHOHU5XVVLDQGHVSRWV
WKDQ DOO WKH WVDUV DQG JUDQG GXNHV WKDW WKH PRUH GHFLVLYH ZDU RI
OLEHUDWLRQ DSSOLHV WR WKHP 7KDW LV ZK\ WRGD\ KH LV IRFXVLQJ RQ
FRPEDWLQJ KXQJHU RQ HOHFWULFLW\ DQG WKH UHEXLOGLQJ RI LQGXVWU\ DQG
UDLOZD\V HYHQ VDFULILFLQJ D VHULHV RI SROLWLFDO SULQFLSOHV IRU WKHVH
WHFKQLFDO SODQV +H NQRZV WKDW KLV HFRQRPLF VXFFHVV RU IDLOXUH ZLOO
GHWHUPLQH KLV SROLWLFDO DQG WKDW LW ZLOO GHSHQG RQ KLP ZKHWKHU WKH
5XVVLDQ UHYROXWLRQ HYHQWXDOO\ OHDGV WR WKH ZRUOGߥV VROXWLRQ RU WKH
ZRUOGߥVGLVDSSRLQWPHQW
%\ WKH FXUUHQW VWDWH RI HWKLFV WKH DEROLWLRQ RI SULYDWH SURSHUW\ ZLOO
IDLO GXH WR LQVXUPRXQWDEOH SV\FKRORJLFDO UHVLVWDQFH 1HYHUWKHOHVV
FRPPXQLVP UHPDLQV D WXUQLQJ SRLQW LQ HFRQRPLF GHYHORSPHQW RI WKH
HQWUHSUHQHXULDO VWDWH WR WKH ZRUNHUߥV VWDWH DV ZHOO DV WKH SROLWLFDO
HYROXWLRQ IURP WKH EDUUHQ V\VWHP RI SOXWRFUDWLF GHPRFUDF\ WR D QHZ
VRFLDODULVWRFUDF\RILQWHOOLJHQWSHRSOH

&25325$7,21$1'81,216

$VORQJDVFRPPXQLVPSURYHVWRRLPPDWXUHWROHDGWKHWHFKQRORJLFDO
OLEHUDWLRQ EDWWOH .UDVVLQ DQG 6WLQQHV ZLOO KDYH WR FRPH WR DQ
XQGHUVWDQGLQJ7KLVZD\RIFRRSHUDWLRQLQVWHDGRIZRUNLQJDJDLQVWHDFK
RWKHU ZLOO EH UHMHFWHG E\ WKH IDQDWLFDO IRROV RI FDSLWDOLVP DQG
FRPPXQLVP RQO\ WKH EHVW KHDGV RI ERWK FDPSV ZLOO PHHW LQ WKH
UHDOL]DWLRQ WKDW LW LV EHWWHU WR VDYH ZRUOG FXOWXUH E\ SHDFH RI
XQGHUVWDQGLQJ WKDQ WR GHVWUR\ LW E\ D YLROHQW YLFWRU\ 7KHQ WKH
FRPPDQGHUV RI WKH PHUFHQDULHV ZLOO EHFRPH WKH JHQHUDOV RI HFRQRP\
DQGWKHPHUFHQDULHVVROGLHUV
,Q WRPRUURZߥV ߨUHGߩ HFRQRP\ WKHUH FDQQRW EH HTXDOLW\ EHWZHHQ WKH
OHDGHUV DQG WKH OHG EXW IXWXUH LQGXVWULDOLVWV ZLOO QR ORQJHU EH DV
LUUHVSRQVLEOHDVWKH\DUHWRGD\ߟEXWIHHOUHVSRQVLEOHIRUWKHFRPPXQLW\
8QSURGXFWLYHLQGXVWULDOLVWV GHDOHUV ZLOOYDQLVKIURPWKHHFRQRPLFOLIH
MXVWDVRQFHWKHGHFRUDWHGFRXUWJHQHUDOVYDQLVKHGIURPWKHDUP\$VLV
RIWHQ WKH FDVH WRGD\ WKH SURGXFWLYH FDSLWDOLVW ZLOO KDYH WR EHFRPH WKH
PRVW LQWHQVLYH ZRUNHU LQ KLV IDFWRU\ %\ VLPXOWDQHRXVO\ UHGXFLQJ KLV
H[FHVV SURILWV D IDLU EDODQFH ZLOO EH PDGH EHWZHHQ KLV ZRUN DQG KLV
LQFRPH
7ZR JURXSV RI HFRQRPLF IRUFHV DUH EHJLQQLQJ WR VKDUH LQ WKH
OHDGHUVKLS RI WKH HFRQRP\ LQ WKH FDSLWDOLVW ZRUNHUߥV VWDWH WKH
UHSUHVHQWDWLYHV RI WKH HQWUHSUHQHXUV DQG RI WKH ZRUNHUV &RUSRUDWLRQV
DQGXQLRQV7KHLULQIOXHQFHRQSROLWLFVLVJURZLQJDQGZLOORXWVWULSWKH
LPSRUWDQFH RI SDUOLDPHQWV 7KH\ ZLOO FRPSOHPHQW DQG FRQWURO HDFK
RWKHU OLNH WKH VHQDWH DQG WULEXQDWH XSSHU KRXVH DQG ORZHU KRXVH 7KH
FRQTXHVWRIQDWXUDOIRUFHVDQGFDSWXUHRIQDWXUDOUHVRXUFHVZLOOEHOHGE\
FRUSRUDWLRQVߟWKHGLVWULEXWLRQRIWKHVSRLOVFRQWUROOHGE\WKHXQLRQV
2Q D FRPPRQ JURXQG RI SURGXFWLRQ LQFUHDVH DQG SHUIHFWLRQ RI
WHFKQRORJ\ 6WLQQHV DQG .UDVVLQ ZLOO PHHW WKH\ DUH RSSRQHQWV LQ WKH
TXHVWLRQRIGLVWULEXWLRQEXWIHOORZVLQWKHTXHVWLRQRISURGXFWLRQWKH\
ILJKWDJDLQVWHDFKRWKHULQWKHTXHVWLRQRIWKHHFRQRPLFPHWKRGߟILJKW
WRJHWKHULQWKHSHRSOHߥVZDUDJDLQVWWKHIRUFHVRIQDWXUH
;)520:25.(567$7(72&8/7585(
67$7(

&+,/':256+,3

2 XU DJH LV DW WKH VDPH WLPH DQ HSRFK RI WHFKQRORJ\
DQGRIFXOWXUH,WKDVWZRGHPDQGV
([SDQVLRQRIWKH:RUNHU6WDWH
3UHSDUDWLRQRIWKH&XOWXUH6WDWH
7KHILUVWWDVNSXWVSROLWLFVLQWKHVHUYLFHRIWHFKQRORJ\WKHVHFRQGLQ
WKHVHUYLFHRIHWKLFV2QO\WKHIRFXVRQWKHFRPLQJDJHRIFXOWXUHJLYHV
WKH VXIIHULQJ DQG VWUXJJOLQJ KXPDQLW\ RI WKH WHFKQRORJLFDO DJH WKH
VWUHQJWKWRFRQWLQXHWKHEDWWOHDJDLQVWWKHIRUFHVRIQDWXUHWRYLFWRU\
7KHH[WUDZRUNGRQHE\PRGHUQPDQLVKLVOHJDF\WRWKHSHRSOHRIWKH
IXWXUHWKURXJKWKLVH[WUDZRUNKHDFFXPXODWHVDFDSLWDORINQRZOHGJH
PDFKLQHVDQGYDOXHVZKRVHLQWHUHVWKLVJUDQGFKLOGUHQZLOOHQMR\
7KHGLYLVLRQRIKXPDQLW\LQWRPDVWHUVDQGVODYHVLQWRFXOWXUHEHDUHUV
DQGIRUFHGODERUHUVLVUHFRJQL]HGWRGD\%XWWKHVHFODVVHVDUHVWDUWLQJWR
VKLIW IURP VRFLDO WR WHPSRUDO :H DUH QRW WKH VODYHV RI RXU
FRQWHPSRUDULHV EXW RI RXU JUDQGFKLOGUHQ ,QVWHDG RI MX[WDSRVHG VODYH
DQGPDVWHUFODVVHVRXUFXOWXUHLVEDVHGRQDVXFFHVVLRQRIPDVWHUVDQG
VODYHV7RGD\ߥVZRUNLQJZRUOGVHWVWKHIRXQGDWLRQIRUWRPRUURZߥVZRUOG
RIFXOWXUH
$VRQFHFXOWXUDOSOHDVXUHRIWKHORUGVZDVEXLOWRQWKHRYHUZRUNE\
VODYHV VR WKH FXOWXUDO HQMR\PHQW RI WKH IXWXUH ZLOO EH EXLOW RQ SUHVHQW
RYHUZRUN 7KH SUHVHQW SRSXODWLRQ LV LQ WKH VHUYLFH RI WKH FRPLQJ ZH
VRZ VR WKDW RWKHUV PD\ UHDS RXU WLPH ZRUNV UHVHDUFKHV DQG VWUXJJOHV
IRUDIXWXUHZRUOGWRHPHUJHLQEHDXW\
7KXV ZRUVKLS RI FKLOGUHQ WDNHV WKH SODFH RI WKH (DVWHUQ DQFHVWRU
ZRUVKLS ,W IORXULVKHV LQ WKH FDSLWDOLVW DV ZHOO DV WKH FRPPXQLVW ODERU
VWDWHLQ$PHULFDDVLQ5XVVLD7KHZRUOGNQHHOVEHIRUHWKHFKLOGDVDQ
LGRODVWKHSURPLVHRIDEHWWHUIXWXUH,WKDVEHFRPHDGRJPDWRFRQVLGHU
ILUVW WKH FKLOG LQ DOO FKDULW\ ,Q WKH &DSLWDOLVW :HVW IDWKHUV ZRUN
WKHPVHOYHVWRGHDWKWROHDYHWKHLUFKLOGUHQULFKHURSSRUWXQLWLHVLQOLIH,Q
WKH&RPPXQLVW(DVWDQHQWLUHJHQHUDWLRQLVOLYLQJDQGG\LQJLQPLVHU\
WR HQVXUH D KDSSLHU DQG PRUH MXVW IXWXUH IRU WKHLU GHVFHQGDQWV 7KH
(XURSHDQDJHLVGHYRWHGWRWKHIXWXUH
:HVWHUQ FKLOG ZRUVKLS LV URRWHG LQ WKH EHOLHI LQ HYROXWLRQ 7KH
(XURSHDQ UHJDUGV WKH QHZHU DV EHWWHU PRUH VRSKLVWLFDWHG KH EHOLHYHV
WKDW KLV JUDQGFKLOGUHQ ZLOO EH ZRUWKLHU RI IUHHGRP WKDQ KH DQG KLV
FRQWHPSRUDULHVKHEHOLHYHVWKDWWKHZRUOGLVPRYLQJIRUZDUG:KLOHWKH
2ULHQWDOVHHVWKHSUHVHQWEDODQFHGEHWZHHQSDVWDQGIXWXUHLWDSSHDUVWR
WKH (XURSHDQ DV D UROOLQJ EDOO ZKLFK IUHHG IURP WKH SDVW UXVKHV WR DQ
XQNQRZQ IXWXUH 7KH $VLDQ LV EH\RQG WLPH WKH (XURSHDQ PRYHV ZLWK
WLPHKHUHMHFWVKLVSDVWDQGHPEUDFHVKLVIXWXUH+LVVWRU\LVDFRQVWDQW
VWDWHPHQW DERXW WKH SDVW DQG SXVK IRU WKH IXWXUH %HFDXVH KH IHHOV WKH
SURJUHVVRIWLPHVWDQGVWLOOIRUKLPPHDQVDVWHSEDFNZDUGV+HOLYHVLQ
D +HUFXOHDQ ZRUOG RI EHFRPLQJ WKH $VLDQ OLYHV LQ WKH 3DUPHQLGHDQ
ZRUOGRIEHLQJ
$V D UHVXOW RI WKLV YLHZ RXU DJH FDQ RQO\ EH MXGJHG IURP WKH
SHUVSHFWLYH RI WKH FRPLQJ RQH ,W LV D WLPH RI SUHSDUDWLRQ DQG EDWWOH
LPPDWXULW\DQGWUDQVLWLRQ:HDUHD\RXQJJHQHUDWLRQWKDWVWULGHVDFURVV
WKH EULGJH EHWZHHQ WZR ZRUOGV DQG VWDQGV DW WKH EHJLQQLQJ RI DQ
XQUHVWUDLQHG FXOWXUDO FLUFOH :H IHHO WKH PRVW ZKHQ ZH PRYH IRUZDUG
JURZDQGILJKWߟQRWLQWKHSHDFHIXOHQMR\PHQWRI2ULHQWDOPDWXULW\2XU
JRDOLVQRWSOHDVXUHEXWIUHHGRPWUDQTXLOLW\LVQRWRXUURDGEXWDFWLRQ

0$1'$725</$%25

7KH H[SDQVLRQ RI WKH ODERU VWDWH LV D FXOWXUDO REOLJDWLRQ RI RXU DJH
7KH ODERU VWDWH LV WKH ODVW VWDJH RI PDQ RQ KLV ZD\ WR WKH FXOWXUDO
SDUDGLVHRIWKHIXWXUH
([SDQGLQJWKHODERUVWDWHPHDQVWRSXWDOODYDLODEOHIRUFHVRIQDWXUH
DQG RI PDQ LQ WKH PRVW UDWLRQDO ZD\ DW WKH VHUYLFH RI SURGXFWLRQ DQG
WHFKQRORJLFDOSURJUHVV
,QDQDJHWKDWLVEXLOGLQJWKHIRXQGDWLRQVRIIXWXUHFXOWXUHVQRERG\
KDVWKHULJKWWROHLVXUH0DQGDWRU\ODERULVDQHWKLFDODQGWHFKQLFDOGXW\
DWWKHVDPHWLPH
3RSSHU/\QNHXVKDVGHVLJQHGDQLGHDOSURJUDPIRUWKHGHYHORSPHQW
RI WKH ODERU VWDWH LQKLV ZRUN ߨ$*XDUDQWHHG 6XEVLVWHQFHIRU$OOߩ+H
GHPDQGV WKDW FRPSXOVRU\ PLOLWDU\ VHUYLFH EH UHSODFHG E\ FRPSXOVRU\
ODERUVHUYLFH7KLVZRXOGODVWPRUH\HDUVDQGZRXOGHQDEOHWKHVWDWHWR
JXDUDQWHH WR DOO LWV PHPEHUV D PLQLPXP RI IRRG KRXVLQJ FORWKLQJ
KHDWLQJDQGPHGLFDOFDUHWKURXJKRXWWKHLUOLYHV7KLVSURJUDPFRXOGHQG
WKH PLVHU\ DQG ZRUU\ DQG DW WKH VDPH WLPH WKH GLFWDWRUVKLS RI WKH
FDSLWDOLVWVDQGSUROHWDULDQV&ODVVGLIIHUHQFHVZRXOGFHDVHDVDUHVXOWRI
PDQGDWRU\ ODERU DV WKH GLIIHUHQFH EHWZHHQ SURIHVVLRQDO VROGLHUV DQG
FLYLOLDQVFHDVHGDVDUHVXOWRIPDQGDWRU\PLOLWDU\VHUYLFH7KHDEROLWLRQ
RIWKHSUROHWDULDWKRZHYHULVDPRUHGHVLUDEOHLGHDOWKDQLWVUHJXODWLRQ
8QLYHUVDOPDQGDWRU\ODERULVWKHSULFHWKDW3RSSHU/\QNHXVGHPDQGV
IRUWKHHOLPLQDWLRQRIPLVHU\DQGZRUU\5HGXFLQJWKLVPDQGDWRU\ODERU
WR D PLQLPXP E\ LPSURYLQJ WHFKQRORJ\ DQG RUJDQL]DWLRQ ߟ DQG
HYHQWXDOO\ UHSODFLQJ LW ZLWK YROXQWDU\ ODERU IRUPV WKH VHFRQG VWDJH RI
WKHZRUNVWDWH
7KH KRSH ZKLFK /HQLQ H[SUHVVHV LQ ߨ6WDWH DQG 5HYROXWLRQߩ WKDW
SHRSOH ZRXOG FRQWLQXH WR ZRUN YROXQWDULO\ HYHQ DIWHU WKH DEROLWLRQ RI
PDQGDWRU\ ODERU LV QR XWRSLD IRU 1RUWKHUQHUV %HFDXVH WKH UHVWOHVV
(XURSHDQ DQG $PHULFDQ ILQGV QR VDWLVIDFWLRQ LQ LQDFWLYLW\ WKURXJK
VHYHUDOWKRXVDQG\HDUVRIQHFHVVLW\ZRUNKDVEHFRPHVHFRQGQDWXUHWR
KLPKHQHHGVLWWRH[HUFLVHKLVSRZHUVDQGEDQWKHJKRVWVRIERUHGRP
+LV LGHDO LV DFWLRQ ߟ QRW FRQWHPSODWLRQ )RU WKLV UHDVRQ ߟ QRW RXW RI
JUHHGߟPRVWPLOOLRQDLUHVLQWKH:HVWFRQWLQXHWRZRUNUHVWOHVVO\LQVWHDG
RIHQMR\LQJWKHLUZHDOWK)RUWKHVDPHUHDVRQPDQ\HPSOR\HHVFRQVLGHU
WKHLUUHWLUHPHQWDVDVKRFNWKH\SUHIHUWKHLUXVXDOZRUNWRIRUFHGOHLVXUH
,Q WKH FXUUHQW VWDWH RI WHFKQRORJ\ YROXQWDU\ ZRUN ZRXOG EH
LQVXIILFLHQW WR VXSSO\ DOO WKH QHFHVVLWLHV VWLOO PXFK RYHUZRUN DQG
PDQGDWRU\ODERUDUHQHFHVVDU\WRFOHDUWKHURDGIRUDEHDXWLIXODQGIUHH
ZRUNRIWKHIXWXUH
,QYHQWRUVSDYHWKHZD\LQWRWKHIXWXUH7KHLUWLUHOHVVDQGTXLHWODERU
LVPRUHHVVHQWLDODQGPHDQLQJIXOWRWKHFXOWXUHWKDQWKHORXGSROLWLFLDQV
DQG DUWLVWV ZKR DUH SXVKLQJ LQWR WKH IRUHJURXQG RI WKH ZRUOG DUHQD
0RGHUQVRFLHW\LVREOLJHGWRSURPRWHLWVLQYHQWRUVDQGWKHLUDFWLYLWLHVLQ
HYHU\FRQFHLYDEOHZD\LWVKRXOGJUDQWWKHPWKHSULYLOHJHGSRVLWLRQWKDW
WKH 0LGGOH $JHV JUDQWHG WR PRQNV DQG SULHVWV WKXV RIIHULQJ WKHP WKH
RSSRUWXQLW\WRLQYHQWZLWKRXWZRUULHV
 ,QYHQWRUVDUHWKHPRVWLPSRUWDQWSHUVRQDOLWLHVRIRXUWLPHLQGXVWULDO
ZRUNHUVDUHWKHLUSLOODUVWKH\DUHWKHIRUHUXQQHUVLQKXPDQLW\ߥVVWUXJJOH
IRUVRYHUHLJQW\JLYLQJELUWKWRWKHFUHDWLRQVEHJRWWHQE\LQYHQWLRQ

352'8&(5$1'&21680(567$7(

$QRWKHU GXW\ RI WKH ODERU VWDWH LV WR UDLVH JHQHUDO SURVSHULW\ E\
LQFUHDVLQJSURGXFWLRQ
$VVRRQDVPRUHIRRGLVWKURZQLQWKHPDUNHWWKDQFDQEHFRQVXPHG
KXQJHU VWRSV DQG WKH EOLVVIXO VWDWH RI WKH FRXQWU\ UHWXUQV DW D KLJKHU
OHYHO
2QO\ ZKHQ WKH FLW\ EXLOGV PRUH IODWV WKDQ LW KRXVHV IDPLOLHV FDQ LW
EDQLVK WKH KRXVLQJ VKRUWDJH ZKLFK LW RQO\ UHOLHYHV UHGLVWULEXWHV DQG
VKLIWVWKURXJKIRUFHGKRXVLQJ
2QO\ZKHQDVPDQ\FDUVDUHEHLQJSURGXFHGDVSRFNHWZDWFKHVHYHU\
ZRUNHU EHFRPHV D FDU RZQHU QRW E\ JLYLQJ WKH FRPPLVVLRQHUV
FRQILVFDWHGFDUVRIEDQNGLUHFWRUV
2QO\WKURXJKSURGXFWLRQQRWWKURXJKFRQILVFDWLRQFDQWKHSURVSHULW\
RIDSHRSOHFRQWLQXDOO\LQFUHDVH
,Q WKH FDSLWDOLVW VWDWH SURGXFWLRQ GHSHQGV RQ SULFLQJ ,I LW LV LQ WKH
LQWHUHVW RI SULFLQJ WKH SURGXFHU LV MXVW DV GHWHUPLQHG WR GHVWUR\ KLV
SURGXFWV DV WR SURGXFH WKHP WR LQKLELW WHFKQRORJ\ DV WR SURPRWH LW WR
UHGXFHSURGXFWLRQDVWRLQFUHDVHLW,IWHFKQRORJLFDODQGFXOWXUDOSURJUHVV
LV FRQVLVWHQW ZLWK KLV LQWHUHVWV KH LV UHDG\ WR SURPRWH WKHP LI WKH\
FRQIOLFW ZLWK HDFKRWKHU KH KDV QR TXDOPV DERXW FKRRVLQJSURILWVRYHU
WHFKQRORJ\ SURGXFWLRQ DQG FXOWXUH ,W LV LQ WKH FRQVWDQW LQWHUHVW RI
SURGXFHUVWKDWGHPDQGDOZD\VH[FHHGVVXSSO\ZKLOHLWLVLQWKHLQWHUHVW
RIFRQVXPHUVWKDWVXSSO\H[FHHGVGHPDQG
7KHSURGXFHUOLYHVRIIWKHFRQVXPHUߥVQHHGJUDLQSURGXFHUVOLYHRII
WKH IDFW WKDW SHRSOH DUH VWDUYLQJ FRDO SURGXFHUV OLYH RII WKH IDFW WKDW
SHRSOH DUH IUHH]LQJ 7KH\ KDYH DQ LQWHUHVW LQ SHUSHWXDWLQJ KXQJHU DQG
IURVW 7KH EUHDG LQGXVWU\ ZRXOG VDERWDJH WKH LQYHQWLRQ RI D EUHDG
VXEVWLWXWH WKH FRDO LQGXVWU\ WKH LQYHQWLRQ RI D FRDO VXEVWLWXWH WKH\
ZRXOG DOVR WU\ WR EX\ DQG GHVWUR\ VXFK LQYHQWLRQV 7KH ZRUNHUV LQ WKH
UHOHYDQWVHFWRUVZRXOGEHLQVROLGDULW\ZLWKWKHFRPSDQLHVVRDVQRWWR
ORVHZRUNDQGLQFRPH
7KHLQGXVWULDOLVWVDQGZRUNHUVDUHLQWHUHVWHGLQKLJKHUSULFHVIRUWKHLU
LQGXVWULDO SURGXFWV WKH IDUPHUV DQG IDUP ZRUNHUV LQ KLJKHU SULFHV IRU
WKHLU IDUP SURGXFWV $V SURGXFHUV WKH GHVLUHV RI WKH SHRSOH GLYHUJH
ZKHUHDV DV FRQVXPHUV DOO SHRSOH KDYH WKH VDPH FRPPRQ JRDO
UHGXFLQJSULFHVE\LQFUHDVLQJSURGXFWLRQ
$QRWKHU PLVFKLHI RI WKH ߨSURGXFHU VWDWHߩ LV DGYHUWLVHPHQW ,W LV D
QHFHVVDU\ FRQVHTXHQFH RI FRPSHWLWLRQ DQG FRQVLVWV RI DQ LQFUHDVH LQ
GHPDQGWKURXJKDUWLILFLDODGYHUWLVLQJRIKXPDQGHVLUH7RVKRZFDVHDQG
LPSRVHOX[XU\ZKLFKDZDNHQVGHVLUHZLWKRXWHYHUEHLQJDEOHWRVDWLVI\
LWLWDFWVDVWKHPDLQFDXVHRIJHQHUDOHQY\JHQHUDOGLVVDWLVIDFWLRQDQG
ELWWHUQHVV 1R FLW\ GZHOOHU FDQ EX\ DOO WKH JRRGV WKDW EOLQG KLV H\HV LQ
WKH GLVSOD\V KH WKHUHIRUH DOZD\V IHHOV SRRU UHODWLYH WR WKH H[KLELWHG
ULFKHVDQGSOHDVXUHV7KHVSLULWXDOGHYDVWDWLRQFDXVHGE\DGYHUWLVHPHQW
FDQRQO\EHHOLPLQDWHGE\DEROLVKLQJFRPSHWLWLRQFRPSHWLWLRQFDQRQO\
EHHOLPLQDWHGE\WXUQLQJDZD\IURPFDSLWDOLVP
,QVSLWHRIWKHJUHDWDGYDQFHPHQWWKDWWKHWHFKQRORJLFDODJHRZHVWR
FDSLWDOLVP LW PXVW QRW EH EOLQGHG WR WKH WKUHDWV IURP WKLV VLGH LW PXVW
EULQJDERXWDEHWWHUV\VWHPLQWLPHWRDYRLGWKHPLVWDNHVRIFDSLWDOLVP
7KHULYDODQGKHLURIWKHFDSLWDOLVWHQWUHSUHQHXUVWDWHߟWKHFRPPXQLVW
ߨODERUVWDWHߩߟFRQWDLQVDSDUWRIWKHPLVWDNHVRILWVSUHGHFHVVRUEHFDXVH
HYHQLQLWWKHUHLVDJURXSRISURGXFHUVLWWRRLVDSURGXFHUVWDWH
7KHFXOWXUHVWDWHRIWKHIXWXUHRQWKHRWKHUKDQGZLOOEHDFRQVXPHU
VWDWH LWV SURGXFWLRQ ZLOO EH FRQWUROOHG E\ WKH FRQVXPHU QRW DV LW LV
WRGD\WKHFRQVXPHUE\WKHSURGXFHUV3URGXFWLRQZLOOQRWEHIRUSURILW
EXWIRUWKHVDNHRIWKHJHQHUDOZHOIDUHDQGFXOWXUHQRWIRUWKHVDNHRIWKH
SURGXFHUVEXWWKHFRQVXPHUV
,W LV WKH IXWXUH PLVVLRQ RI WKH SDUOLDPHQW WR UHSUHVHQW WKH FRPPRQ
LQWHUHVWV RI DOO FRQVXPHUV ZKRVH PRXWKSLHFHV WRGD\ DUH VWLOO WKH
UHSUHVHQWDWLYHVDQGSDUWLHV

5(92/87,21$1'7(&+12/2*<
 7KHRYHUWKURZRIWKHHFRQRP\WKDWLVVXSSRVHGWRWUDQVIRUP(XURSHߥV
FXUUHQW SURGXFWLRQ DQDUFK\ LQWR D QHZ RUGHU PXVW QHYHU IRUJHW LWV
SURGXFWLYHPLVVLRQDQGPXVWEHRQJXDUGQRWWRIDOOLQWRWKHGHVWUXFWLYH
PHWKRGVRI5XVVLD%HFDXVHRILWVQRUWKHUQORFDWLRQDQGRYHUSRSXODWLRQ
(XURSHLVPRUHGHSHQGHQWRQRUJDQL]HGODERUDQGSURGXFWLRQ,WFDQQRW
HYHQWHPSRUDULO\OLYHRQWKHDOPVRILWVVWLQJ\QDWXUHHYHU\WKLQJLWKDV
DFKLHYHGLWRZHVWRWKHGHHGVRILWVODERUDUP\5DGLFDOGLVRUJDQL]DWLRQ
WKURXJK ZDU RU DQDUFK\ ZRXOG PHDQ WKH FXOWXUDO GHDWK RI (XURSH
EHFDXVHDWHPSRUDU\VWDQGVWLOORI(XURSHDQSURGXFWLRQZRXOGPHDQWKDW
RQHKXQGUHG PLOOLRQ (XURSHDQV ZRXOG VWDUYH WR GHDWK (XURSH ZKLFK
ODFNV WKH UHVLOLHQFH RI 5XVVLD FRXOG QRW VXUYLYH VXFK D FDWDVWURSKH
(WKLFV GHPDQG RI WKH FRPLQJ RYHUWKURZ RI (XURSH WKDW LW SURWHFWV DQG
VDQFWLILHVKXPDQOLIHWHFKQRORJ\GHPDQGVRIWKHFRPLQJRYHUWKURZRI
(XURSHWKDWLWSURWHFWVDQGVDQFWLILHVKXPDQFUHDWLRQV
$Q\RQHZKRZLOOIXOO\NLOOVDKXPDQEHLQJVLQVDJDLQVWWKHKRO\VSLULW
RIWKHFRPPXQLW\DQ\RQHZKRZLOOIXOO\GHVWUR\VDPDFKLQHVLQVDJDLQVW
WKHKRO\VSLULWRIODERU&DSLWDOLVPZDVJXLOW\RIWKLVGRXEOHFULPHLQWKH
ZRUOG ZDU FRPPXQLVP LQ WKH 5XVVLDQ UHYROXWLRQ 1HLWKHU UHYHUHG
KXPDQOLIHRUKXPDQODERU
,I(XURSHLVWHDFKDEOHLWFDQOHDUQIURPWKH5XVVLDQUHYROXWLRQZKLFK
PHWKRGVLWVKRXOGQRWXVHEHFDXVHLWKDVDZDUQLQJDERXWWKHLPSRUWDQFH
RIWHFKQRORJ\DQGWKHUHYHQJHLWWDNHVRQLWVGHWUDFWRUV5XVVLDߥVOHDGHUV
WKRXJKWWKDWWKH\FRXOGVDYHWKHLUFRXQWU\DQGWKHZRUOGWKURXJKHWKLFDO
JRDOV DQG PLOLWDU\ PHDQV DORQH UDWKHU WKDQ WKURXJK ZRUN DQG
WHFKQRORJ\7KH\VDFULILFHGWKHLQGXVWU\DQGWHFKQRORJ\RIWKHLUFRXQWU\
IRU SROLWLFV $V WKH\ UHDFKHG IRU WKH VWDUV WKH\ ORVW WKH JURXQG RI
SURGXFWLRQXQGHUWKHLUIHHWDQGIHOOLQWRWKHDE\VVRIPLVHU\,QRUGHUWR
VDYH WKHPVHOYHV IURP WKLV DE\VV LQ ZKLFK 5XVVLDQ SHRSOHV DUH
GHWHULRUDWLQJ WKH FRPPXQLVW OHDGHUV DUH IRUFHG WR DVN WKHLU PRUWDO
FDSLWDOLVW HQHPLHV IRU KHOS DJDLQVW WKH RYHUSRZHULQJ 5XVVLDQ FOLPDWH
ZKLFK RQFH VKDWWHUHG 1DSROHRQߥV JUHDW DUP\ DQG WRGD\ WKUHDWHQV
%ROVKHYLVPZLWKWKHVDPHIDWH
,I(XURSHIROORZVWKHGHVWUXFWLYHH[DPSOHRIWKH5XVVLDQUHYROXWLRQ
LWULVNVLQVWHDGRIHVWDEOLVKLQJDQHZSRVWFDSLWDOLVPRUGHUVLQNLQJEDFN
LQWR WKH SULPLWLYHQHVV RI SUHFDSLWDOLVW EDUEDULVP DQG EHLQJ IRUFHG WR
UHOLYHWKHFDSLWDOLVWHUD&OHDUPLQGHGQHVVPD\SURWHFWLWIURPWKLVWUDJLF
IDWH RWKHUZLVH LW ZLOO EH OLNH D SDWLHQW ZKR GLHV RI KHDUW IDLOXUH IURP
DQHVWKHVLD ZKLOH DQ RSHUDWLRQ LV EHLQJ SHUIRUPHG RI KLP %HFDXVH WKH
KHDUWEHDW RI (XURSH LV WHFKQRORJ\ ZLWKRXW WHFKQRORJ\ LW FDQQRW OLYH
HYHQXQGHUWKHIUHHVWFRQVWLWXWLRQ%HIRUHWKHGLVWULEXWLRQRIJRRGVFDQ
EHLPSURYHGWKHSURGXFWLRQRIJRRGVPXVWEHVHFXUHGEHFDXVHZKDWXVH
LV HTXDOLW\ LI HYHU\RQH VWDUYHV WR GHDWK" $QG ZKDW KDUP LV LQHTXDOLW\
ZKHQQRRQHLVVXIIHULQJ"
7KH (XURSHDQ UHYROXWLRQ ZRXOG KDYH WR PXOWLSO\ LWV SURGXFWLRQ
LQVWHDGRIGHVWUR\LQJLWߟUHYLYLQJLWVWHFKQRORJ\LQVWHDGRIGHVWUR\LQJLW
2QO\ WKHQ ZRXOG LW KDYH WKH SURVSHFW RI VXFFHVV DQG SHUPDQHQW
UHDOL]DWLRQRILWVHWKLFDOLGHDOV
7KH RUJDQL]DWLRQ DQG PDFKLQHU\ RI (XURSH IRUPV WKH EDVLV RI LWV
IXWXUHFXOWXUH,I(XURSHWULHVWRVHWXSWKHSROLWLFDOURRIRIWKLVFXOWXUDO
FRQVWUXFWLRQ EHIRUH WKH WHFKQRORJLFDO IRXQGDWLRQV WKH FRQVWUXFWLRQ
FROODSVHV DQG EXULHV WKH IULYRORXV DUFKLWHFWVDORQJ ZLWK WKHXQIRUWXQDWH
UHVLGHQWV

'$1*(562)7(&+12/2*<

7KH FRXUVH RI WKH 5XVVLDQ UHYROXWLRQ KDV VKRZQ ZKHUH HWKLFDO
GHPDQGVOHDGLIWKH\DUHEOLQGWRWHFKQRORJLFDOQHHGV7KHFRXUVHRIWKH
:RUOG:DUKDVVKRZQZKHUHWHFKQRORJLFDODGYDQFHVOHDGZKHQWKH\DUH
EOLQGWRHWKLFDOQHHGV
7HFKQRORJ\ ZLWKRXW HWKLFV PXVW OHDG WR FDWDVWURSKHV MXVW DV HWKLFV
ZLWKRXWWHFKQRORJ\,I(XURSHPDNHVQRSURJUHVVLQHWKLFDOWHUPVLWKDV
WRVWXPEOHIURPRQHZRUOGZDUWRDQRWKHUWKHVHZLOOEHWKHPRUHWHUULEOH
WKH KLJKHU WHFKQRORJ\ GHYHORSV (XURSHߥV FROODSVH LV LQHYLWDEOH LI LWV
HWKLFDOSURJUHVVGRHVQRWNHHSSDFHZLWKLWVWHFKQRORJLFDO1HYHUWKHOHVV
LW ZRXOG EH HTXDOO\ ULGLFXORXV DQG FRZDUGO\ WR ILJKW DQG FRQGHPQ
WHFKQRORJ\ DV VXFK EHFDXVH RI WKH SRVVLELOLW\ RI WHFKQRORJLFDO DQG
FXOWXUDOGLVDVWHUVDVLWZRXOGEHWRDYRLGDQGEODPHWKHUDLOURDGEHFDXVH
RISRVVLELOLWLHVRIUDLOURDGDFFLGHQWV
:KLOH (XURSH LV H[SDQGLQJ WKH ODERU VWDWH LW PXVW QHYHU IRUJHW WR
SUHSDUHWKHFXOWXUHVWDWHWHDFKHUVDQGSULHVWVDUWLVWVDQGZULWHUVSUHSDUH
WKH SHRSOH IRU D JUHDW IHDVW WKDW LV WKH JRDO RI WHFKQRORJ\ 7KHLU
LPSRUWDQFHLVDVJUHDWDVWKDWRIHQJLQHHUVFKHPLVWVDQGGRFWRUVWKHVH
VKDSH WKH ERG\ RI WKH FRPLQJ FXOWXUH WKRVH VKDSH WKH VRXO %HFDXVH
WHFKQRORJ\ LV WKH ERG\ ߟ HWKLFV WKH VRXO RI FXOWXUH +HUH OLHV WKHLU
FRQWUDVWDQGWKHLUUHODWLRQVKLS
(WKLFV WHDFK SHRSOH WKH ULJKW XVH RI WKH SRZHU DQG IUHHGRP WKDW
WHFKQRORJ\ JLYHV WKHP $EXVH RI SRZHU DQG IUHHGRP LV PRUH IDWDO WR
KXPDQVWKDQSRZHUOHVVQHVVDQGXQIUHHGRP+XPDQPDODG\FRXOGPDNH
OLIH ZRUVH LQ WKH IXWXUH HUD RI OHLVXUH WKDQ LQ WKH SUHVHQW HUD RI IRUFHG
ODERU,WGHSHQGVRQHWKLFVZKHWKHUWHFKQRORJ\ZLOOOHDGSHRSOHWRKHOORU
KHDYHQ 7KH PDFKLQH LV ZHDULQJ WKH +HDG RI -DQXV LI KDQGOHG
UHVSRQVLEOHLWEHFRPHVWKHVODYHJLUORIIXWXUHPDQDQGZLOOSURYLGHKLP
ZLWK SRZHU IUHHGRP OHLVXUH DQG FXOWXUH ߟ KDQGOHG LUUHVSRQVLEO\ WKH
PDFKLQH ZLOO HQVODYH PDQ DQG URE KLP RI KLV UHPDLQLQJ SRZHU DQG
FXOWXUH ,I LW LV QRW SRVVLEOH WR WXUQ WKH PDFKLQH LQWR DQ RUJDQ RI PDQ
WKHQPDQZLOOVLQNWREHLQJDFRPSRQHQWRIWKHPDFKLQH
7HFKQRORJ\ ZLWKRXW HWKLFV LV ߨSUDFWLFDO PDWHULDOLVPߩ LW OHDGV WR WKH
GRZQIDOORIPDQߥVKXPDQLW\DQGWRKLVWUDQVIRUPDWLRQLQWRDPDFKLQHLW
PLVOHDGV PDQ WR EHFRPH DQ DOLHQ XQG JLYH KLV VRXO WR WKLQJV %XW DOO
WHFKQRORJLFDO SURJUHVV EHFRPHV KDUPIXO DQG ZRUWKOHVV ZKHQ PDQ
ZKLOHFRQTXHULQJWKHZRUOGORVHVKLVVRXOLWZRXOGEHEHWWHULIKHKDG
UHPDLQHGDQLPDO
-XVWDVDUPLHVDQGZDUVZHUHRQFHQHFHVVDU\IRUWKHSUHVHUYDWLRQRI
IUHHGRPDQGFXOWXUHDPRQJQDWLRQVODERUDQGWHFKQRORJ\DUHQHFHVVDU\
LQSRRUDQGRYHUSRSXODWHGSDUWVRIWKHZRUOGIRUWKHSUHVHUYDWLRQRIOLIH
DQGFXOWXUH%XWWKHDUP\PXVWGHIHQGSROLWLFDOJRDOVWHFKQRORJ\HWKLFV
$WHFKQRORJ\WKDWHPDQFLSDWHVLWVHOIIURPHWKLFVDQGFRQVLGHUVLWVHOIWR
EHDQHQGLQLWVHOILVMXVWDVFDWDVWURSKLFIRUFXOWXUHDVLWLVIRUDQDUP\
WKDWHPDQFLSDWHVLWVHOIIURPSROLWLFVDQGFRQVLGHUVLWVHOIDQHQGLQLWVHOI
DOHDGHUOHVVLQGXVWULDOLVPZLOOWHDUGRZQFXOWXUHDVPXFKDVDOHDGHUOHVV
PLOLWDULVPGHVWUR\VWKHVWDWH
$VWKHERG\LVDQRUJDQRIWKHVRXOWHFKQRORJ\PXVWVXEPLWWRHWKLFDO
OHDGHUVKLS LW PXVW EH FDUHIXO QRW WR IDOO LQWR WKH HUURU ZKLFK DUW KDV
FRPPLWWHG LQ SURFODLPLQJ ߨDUW IRU DUWߥV VDNHߩ 1HLWKHU DUW QRU
WHFKQRORJ\ QRU VFLHQFH QRU SROLWLFV DUH HQGV LQ WKHPVHOYHV WKH\ DUH
ZD\VWROHDGWRKXPDQLW\ߟDVWURQJFRPSOHWHKXPDQ

520$17,&,602)7+()8785(
 ,QWLPHVRIKDUGVKLSQRVWDOJLDJURZVDQGZLWKLWURPDQWLFLVP
(YHQ RXU WLPH KDV JLYHQ ELUWK WR URPDQWLFLVP HYHU\ZKHUH WKHUH LV
ORQJLQJIRUIRUHLJQPRUHEHDXWLIXOZRUOGVZKLFKDUHVXSSRVHGWRKHOS
XV RYHUFRPH WKH JUH\ RI RXU ZRUN GD\ 7KH QXUVHULHV RI PRGHUQ
URPDQWLFLVPFLQHPDWKHDWHUVDQGQRYHOVDUHOLNHZLQGRZVIURPZKLFK
WKH IRUFHG ODERUHUV RI WKH (XURSHDQ SHQLWHQWLDU\ FDQ ORRN RXW LQWR
IUHHGRP
0RGHUQURPDQWLFLVPKDVIRXUPDLQIRUPV
7KHURPDQFHRIWKHSDVWWKDWWDNHVXVEDFNWRWKHPRUHFRORUIXODQG
IUHHUDJHVRIRXUKLVWRU\WKHURPDQFHRIGLVWDQFHWKDWRSHQVXSWKH*UHDW
(DVWDQGWKH:LOG:HVWWKHURPDQFHRIWKHRFFXOWSHQHWUDWLQJLQWRWKH
PRVW LQWLPDWH DUHDV RI OLIH DQG VRXO DQG ILOO WKH EOHDNQHVV RI HYHU\GD\
OLIHZLWKZRQGHUVDQGVHFUHWVWKHURPDQFHRIWKHIXWXUHZKLFKFRQVROHV
SHRSOHE\ORRNLQJIRUDJROGHQWRPRUURZ
6SHQJOHU .D\VHUOLQJ XQG 6WHLQHU PHHW WKH PRGHUQ URPDQWLFLVP
6SHQJOHU RSHQV WKH FXOWXUHV RI WKH SDVW .D\VHUOLQJ WKH FXOWXUHV RI WKH
GLVWDQFH6WHLQHUWKHULFKHVRIWKH2FFXOW7KHJUHDWLQIOXHQFHWKDWWKHVH
PHQ KDYH RQ *HUPDQ LQWHOOHFWXDO OLIH LV SDUWO\ GXH WR WKH URPDQWLF
ORQJLQJ RI WKH KHDYLO\WHVWHG *HUPDQ SHRSOH ZKR ORRN WR WKH SDVW WR
WKHGLVWDQFHDQGWRKHDYHQWRILQGFRPIRUWWKHUH
,PDJLQDWLRQ OHDGV WR WKH SDVW WR WKH GLVWDQFH DQG WR EH\RQG EXW
DFWLRQ OHDGV LQWR WKH IXWXUH 7KHUHIRU QHLWKHU KLVWRU\ QRU 2ULHQWDOLVP
QRU RFFXOWLVP ZRUNV DV WKH GULYLQJ IRUFH RI RXU WLPH EXW WKH
URPDQWLFLVPRIWKHIXWXUHLWKDVJLYHQELUWKWRWKHLGHDRIWKHIXWXUHVWDWH
DQGWKXVWRWKHZRUOGPRYHPHQWRIVRFLDOLVPLWKDVFRQFHLYHGWKHLGHD
RIWKHVXSHUKXPDQDQGWKXVLQLWLDWHGWKHVXEPLVVLRQRIYDOXHV
0DU[WKHKHUDOGRIWKHIXWXUHVWDWHDQG1LHW]VFKHWKHKHUDOGRIWKH
VXSHUKXPDQDUHERWKURPDQWLFVRIWKHIXWXUH7KH\OD\SDUDGLVHQHLWKHU
LQWKHSDVWQRULQWKHGLVWDQFHQRULQWKHRFFXOWEXWLQWKHIXWXUH
0DU[ KHUDOGV WKH FRPLQJ ZRUOG HPSLUH RI ODERU ߟ 1LHW]VFKH WKH
FRPLQJ ZRUOG FXOWXUH (YHU\WKLQJ WKDW GHDOV ZLWK WKH H[SDQVLRQ RI WKH
ODERU VWDWH PXVW FRQVLGHU VRFLDOLVP HYHU\WKLQJ WKDW GHDOV ZLWK WKH
SUHSDUDWLRQRIWKHFXOWXUHVWDWHPXVWFRQVLGHUWKHVXSHUKXPDQ0DU[LV
WKH SURSKHW RI WRPRUURZ 1LHW]VFKH WKH SURSKHW RI WKH GD\ DIWHU
WRPRUURZ
 $OOPDMRUVRFLDODQGLQWHOOHFWXDOHYHQWVRIPRGHUQ(XURSHVRPHKRZ
WLH WR WKH ZRUNV RI WKHVH WZR PHQ WKH VRFLDO DQG SROLWLFDO UHYROXWLRQ
VWDQGVLQWKHVLJQRI0DU[WKHHWKLFDODQGPHQWDOZRUOGUHYROXWLRQLQ
WKHVLJQRI1LHW]VFKH:LWKRXWWKHVHWZRPHQWKHIDFHRI(XURSHZRXOG
ORRNGLIIHUHQW
0DU[ DQG 1LHW]VFKH WKH KHUDOGV RI VRFLDO DQG LQGLYLGXDO IXWXUH
LGHDOV DUH ERWK (XURSHDQ PHQ DQG G\QDPLF IRUFHV 7KHLU LGHDOV ZLOO
KDYH WR EH UHDOL]HG WKURXJK DFWLRQV LQ WKH IXWXUH 7KHLU G\QDPLF LGHDOV
FRQWDLQGHPDQGVWKH\QRWRQO\ZDQWWRWHDFKEXWIRUFHPHQWKH\WXUQ
PDQߥVH\HVIRUZDUGDQGWKXVWKH\DFWDVFUHDWRUVRIVRFLHW\DQGRIPHQ
7KHLUSRODULW\UHIOHFWVWKHHVVHQFHRIWKH(XURSHDQVSLULWDQGWKHIXWXUH
RI(XURSHDQGHVWLQ\
7KHKLJKHVWXOWLPDWHLGHDORI(XURSHDQURPDQWLFLVPRIWKHIXWXUHLV
QRW WXUQLQJ DZD\ EXW UHWXUQLQJ WR QDWXUH RQ D KLJKHU OHYHO &XOWXUH
HWKLFVDQGWHFKQRORJ\DUHLQWKHVHUYLFHRIWKLVLGHDO$IWHUKXQGUHGVRI
WKRXVDQGVRI\HDUVRIZDUKXPDQEHLQJVVKRXOGRQFHDJDLQPDNHSHDFH
ZLWKQDWXUHDQGUHWXUQKRPHWRKHUHPSLUHߟEXWQRWDVKHUFUHDWXUHEXW
DVKHUPDVWHU%HFDXVHPDQLVDERXWWRRYHUWKURZWKHFRQVWLWXWLRQRIKLV
SODQHW \HVWHUGD\ LW ZDV DQDUFKLVWLF WRPRUURZ LW VKDOO EH PRQDUFKLF
2QH DPRQJ WKH ELOOLRQ FUHDWXUHV UHDFKHV IRU WKH FURZQ RI FUHDWLRQ WKH
IUHHHYROYHGKXPDQEHLQJDVNLQJRIWKHHDUWK
 3$&,),60ߟ

7R WKH GHDG OLYLQJ FRPLQJ KHURHV RI SHDFH

7(1<($562):$5

7 KHSHDFHZKLFKIHOOLQWRUXLQVWHQ\HDUVDJRKDVQRW
EHHQ UHVWRUHG WR WKLV GD\ 7KH ILYH\HDU ZDU SHULRG
ZDV IROORZHG E\ D ILYH\HDU VHPLZDU SHULRG IRU
(XURSH7KH5XVVLDQ3ROLVKDQG*UHHN7XUNLVKZDUV5XKURFFXSDWLRQ
ILJKWLQJ LQ 8SSHU 6LOHVLD /LWKXDQLD :HVW +XQJDU\ )LXPH &RUIX WKH
FLYLOZDUVLQ*HUPDQ\,WDO\6SDLQ+XQJDU\,UHODQG*UHHFH%XOJDULD
DQG $OEDQLD IDOO LQWR WKLV SHULRG DV ZHOO DV WKH SROLWLFDO PXUGHUV DQG
VHGLWLRQ WKH FROODSVH RI FXUUHQFLHV DQG WKH LPSRYHULVKPHQW RI HQWLUH
SHRSOHV
7KLVZRUVWGHFDGHRI(XURSHDQKLVWRU\VLQFHWKHPLJUDWLRQLVDZRUVH
LQGLFWPHQWDJDLQVWWKHZDUWKDQSDFLILVWVFRXOGHYHULVVXHQHYHUWKHOHVV
WKLVGHIHQGDQWKDVQRWEHHQSXQLVKHGEXWFDQEHFHOHEUDWHGHYHU\ZKHUH
DVWULXPSKDQWGLFWDWHV(XURSHDQSROLWLFVSUHSDUHVWRDWWDFNWKHSHRSOHV
RI(XURSHDQHZDQGWRILQDOO\GHVWUR\WKHP
8QGRXEWHGO\ DV D UHVXOW RI WKH DGYDQFH RI WHFKQRORJ\ RI ZDU ߟ
HVSHFLDOO\ WKH PDQXIDFWXUH RI SRLVRQ DQG DYLDWLRQ WKH QH[W (XURSHDQ
ZDUZRXOGQRWZHDNHQWKLVSDUWRIWKHHDUWKEXWGHVWUR\LW
7KLVGDQJHUZKLFKDIIHFWVKLPSHUVRQDOO\PXVWEHWDNHQLQWRDFFRXQW
E\ HYHU\ (XURSHDQ ,I LW DSSHDUV LQHYLWDEOH WR KLP WKH HPLJUDWLRQ WR D
IRUHLJQ SDUW RI WKH HDUWK UHPDLQV WKH ORJLFDO FRQVHTXHQFH ,I LW DSSHDUV
DYRLGDEOH WR KLP WKH ILJKW DJDLQVW WKH GDQJHU RI ZDU DQG LWV FDUULHUV
UHPDLQVKLVGXW\ߟWKHGXW\WRSDFLILVP
7RGD\VWD\LQJ(XURSHDQLVQRWMXVWDIDWHEXWDOVRDUHVSRQVLEOHWDVN
RQWKHVROXWLRQRIZKLFKGHSHQGVWKHIXWXUHRIHDFKDQGHYHU\RQHRIXV
3DFLILVP LV WKH RQO\ ߨUHDOSROLWLNߩ LQ (XURSH WRGD\ +RSLQJ IRU
VDOYDWLRQWKURXJKZDULVJLYLQJLQWRURPDQWLFLOOXVLRQV
7KHPDMRULW\RI(XURSHDQSROLWLFLDQVVHHPWRUHFRJQL]HWKLVDQGZLVK
IRUSHDFHDQGZLWKWKHPWKHRYHUZKHOPLQJPDMRULW\RI(XURSHDQV
7KLV IDFW FDQQRW UHDVVXUH WKH SDFLILVW ZKR UHPHPEHUV WKDW WKLV ZDV
DOVR WKH FDVH LQ  WKHQ PRVW RI WKH VWDWHVPHQ DQG WKH PDMRULW\ RI
(XURSHDQVZDQWHGSHDFH$QG\HWDJDLQVWWKHLUZLOOWKHZDUEURNHRXW
7KLVRXWEUHDNRIZDUZDVWKHUHVXOWRIDQLQWHUQDWLRQDOFRXSGߥ«WDWE\WKH
ZDUIULHQGO\PLQRULWLHVDJDLQVWWKHDQWLZDUPDMRULWLHV
7KLV VWDWH VHL]HGRQ D IDYRUDEOHRFFDVLRQ DQG ZLWK OLHVDQGVORJDQV
VXUSULVHG XQVXVSHFWLQJ SHRSOHV ZKRVH GHVWLQ\ ZDV OHIW WR WKRVH
PLQRULWLHVIRU\HDUV
7KH :RUOG :DU ZDV WKH UHVXOW RI WKH PLOLWDULVWVߥ GHWHUPLQDWLRQ DQG
WKH SDFLILVWVߥ ZHDNQHVV $V ORQJ DV WKLV UHODWLRQVKLS UHPDLQV D QHZ
(XURSHDQ ZDU FRXOG EUHDN RXW DQ\ GD\ 7RGD\ DV WKHQ D VPDOO EXW
HQHUJHWLF SURZDU PLQRULW\ IDFHV D ODUJH EXW SRZHUOHVV PDMRULW\ RI
SHDFH LW SOD\V ZLWK WKH ZDU LQVWHDG RI FUXVKLQJ LW LW DSSHDVHV WKH
ZDUPRQJHUV LQVWHDG RI RYHUWKURZLQJ WKHP WKXV FUHDWLQJ WKH VDPH
VLWXDWLRQDVLQ
3DFLILVPIRUJHWVWKDWDZROILVVWURQJHUWKDQDWKRXVDQGVKHHSߟDQG
WKDWLQSROLWLFVDVZHOODVVWUDWHJ\QXPEHUVRQO\GHFLGHLIWKH\DUHZHOO
PDQDJHGDQGRUJDQL]HG
,WLVZKDWSDFLILVPODFNVWRGD\DVLWGLGWHQ\HDUVDJR+DGSDFLILVP
EHHQEHWWHUPDQDJHGDQGRUJDQL]HGWKHQWKHZDUZRXOGQRWKDYHEURNHQ
RXWZRXOGLWEHWRGD\(XURSHZRXOGEHVDIHIURPDQHZZDU
7KH SRZHUOHVVQHVV RI SDFLILVP OLHV DV LW GLG WKHQ LQ WKH IDFW WKDW
PDQ\ZLVKIRUSHDFHEXWYHU\IHZZDQWLWPDQ\IHDUZDUEXWRQO\IHZ
ILJKWLW
&,7,&,602)3$&,),60

3 DVVLYH ZDU JXLOW DIIHFWV (XURSHDQ SDFLILVP %DG

OHDGHUVKLS ZHDNQHVV DQG ODFN RI FKDUDFWHU
HQFRXUDJHGWKHZDUPRQJHUVWRVWDUWWKHZDU
7KHIROORZHUVRIWKHLGHDRISHDFHZKRLQGLGQRWDGYRFDWHIRU
WKHLULGHDOLQWLPHDQGQRWVWURQJO\HQRXJKDUHSDUWO\UHVSRQVLEOHIRUWKH
RXWEUHDNRIZDU
%XWLIWRGD\DIWHUWKLVH[SHULHQFHDQGNQRZOHGJHDQRSSRQHQWRIZDU
SHUVLVWVLQKLVSDVVLYLW\KHLQYLWHVDQHYHQKHDYLHUEODPHRQKLPVHOIE\
LQGLUHFWO\SURPRWLQJDIXWXUHZDU
$ULFKSDFLILVWZKRGRHVQRWILQDQFHSHDFHWRGD\LVKDOIZDUPRQJHU
$SDFLILVWPLQGHGMRXUQDOLVWZKRWRGD\GRHVQRWSURSDJDWHSHDFHLV
DOVRDKDOIZDUPRQJHU
$YRWHUZKRIRUGRPHVWLFSROLF\UHDVRQVFKRRVHVDFDQGLGDWHZKRVH
FRPPLWPHQWWRSHDFHKHGRHVQRWEHOLHYHVLJQVDKDOIGHDWKVHQWHQFHIRU
KLPVHOIDQGKLVFKLOGUHQ
7KHGXW\RIHYHU\SDFLILVWLVWRPDNHHYHU\IHDVLEOHHIIRUWWRSUHYHQW
WKHWUHDWRIDIXWXUHZDULIKHGRHVQRWIROORZWKLVGLUHFWLRQKHLVHLWKHU
QRWDSDFLILVWRUREOLYLRXVWRKLVGXWLHV
3DFLILVP OHDUQHG QRWKLQJ IURP WKH ZDU LW LV HVVHQWLDOO\ WKH VDPH
WRGD\ DV LQ  ,I LW GRHV QRW UHFRJQL]H LWV PLVWDNHV DQG GRHV QRW
FKDQJH PLOLWDULVP ZLOO FRQWLQXH WR ZDON DOO RYHU LW LQ WKH IXWXUH 7KH
PDLQ PLVWDNHV RI (XURSHDQ SDFLILVP DUH 3DFLILVP LV QRQSROLWLFDO
DPRQJ LWV OHDGHUV DUH WRR PDQ\ DGPLUHUV DQG WRR IHZ SROLWLFLDQV
7KHUHIRUH SDFLILVP LV RIWHQ EDVHG RQ LOOXVLRQV GRHV QRW FRXQW IDFWV
KXPDQ ZHDNQHVV XQUHDVRQDEOHQHVV DQG PDOLFH LW GUDZV ZURQJ
FRQFOXVLRQVIURPZURQJDVVXPSWLRQV3DFLILVPLVERXQGOHVVLWGRHVQRW
NQRZ KRZ WR OLPLW LWV JRDOV ,W DFKLHYHV QRWKLQJ EHFDXVH LW ZDQWV
HYHU\WKLQJDWWKHVDPHWLPH
3DFLILVP LV IDUVLJKWHG LW LV UHDVRQDEOH DERXW WKH WDUJHW EXW
XQUHDVRQDEOHDERXWWKHPHDQV,WGLUHFWVLWVZLOOWRZDUGVWKHIXWXUHDQG
OHDYHVWKHSUHVHQWWRWKHLQWULJXHVRIWKHPLOLWDULVWV
 3DFLILVP LV KDSKD]DUG LW ZDQWV WR SUHYHQW ZDU ZLWKRXW UHSODFLQJ LW
LWV QHJDWLYH JRDO ODFNV WKH SRVLWLYH SURJUDP RI DQ DFWLYH ZRUOG SROLF\
3DFLILVP LV VSOLQWHUHG LW KDV VHFWV EXW QR FKXUFK LWV JURXSV ZRUN LQ
LVRODWLRQZLWKRXWXQLIRUPOHDGHUVKLSDQGRUJDQL]DWLRQ
3DFLILVP WHQGV WR EH DQ DSSHQGDJH UDWKHU WKDQ D FHQWHUSLHFH RI
SROLWLFDO SURJUDPV WKHLU IRFXV LV RQ GRPHVWLF SROLWLFV ZKLOH WKHLU
SDFLILVPLVPRUHDWDFWLFWKDQDSULQFLSOH
3DFLILVP LV LQFRQVHTXHQWLDO LW XVXDOO\ DJUHHV WR UHVLJQ ZLWKRXW
FULWLFLVPWRDKLJKHULGHDO WKDWLVWRVD\DFOHYHUFDWFKSKUDVH DVLWGLG
LQDQGZRXOGEHZLOOLQJWRGRVRLQWKHIXWXUH
7KHELJJHVWHYLORISDFLILVPLVWKHSDFLILVWV7KLVGRHVQRWFKDQJHWKH
IDFWWKDWDPRQJWKHPDUHWKHEHVWDQGPRVWLPSRUWDQWPHQRIRXUWLPH
7KHVHDUHH[FOXGHGIURPWKHIROORZLQJFULWLFLVP
0RVW SDFLILVWV DUH IDQDWLFV ZKR GHVSLVH SROLWLFV DQG LWV PHDQV
LQVWHDG RI SXUVXH WKHP 7KHUHIRUH PXFK WR WKH GHWULPHQW RI WKHLU
SXUSRVHWKH\DUHQRWWDNHQVHULRXVO\SROLWLFDOO\
0DQ\ SDFLILVWV EHOLHYH WKDW WKH\ FDQFKDQJH WKHZRUOG E\SUHDFKLQJ
UDWKHU WKDQ DFWLRQ WKH\ FRPSURPLVH SROLWLFDO SDFLILVP E\ DVVHUWLQJ LW
ZLWKUHOLJLRXVDQGPHWDSK\VLFDOVSHFXODWLRQV
8VXDOO\WKHIHDURIZDULVWKHPRWKHURISDFLILVP,IWKLVIHDUH[WHQGV
WR WKH UHVW RI WKH SDFLILVWVߥ OLYHV LW SUHYHQWV WKHP IURP H[SRVLQJ
WKHPVHOYHVWRWKHLGHDRISHDFH
%UDYHU\DQGVDFULILFHDUHOHVVFRPPRQLQSDFLILVWVWKDQLQPLOLWDULVWV
0DQ\UHFRJQL]HWKHGDQJHURIZDUߟEXWIHZPDNHSHUVRQDORUPDWHULDO
VDFULILFHV WR DYHUW WKHP ,QVWHDG RI ILJKWHUV WKH\ DUH TXDUUHOVRPH
SDFLILVWVZKROHDYHRWKHUVWRWKHEDWWOHLQZKRVHIUXLWVWKH\SDUWDNH
0DQ\SDFLILVWVKDYHJHQWOHQDWXUHVDQGQRWRQO\VK\DZD\IURPZDU
EXWDOVRIURPWKHEDWWOHDJDLQVWZDUWKHLUKHDUWLVSXUHEXWWKHLUZLOOLV
ZHDNDQGWKHUHIRUHWKHLUILJKWLQJYDOXHLOOXVRU\
0RVW SDFLILVWV DUH ZHDNPLQGHG OLNH PRVW SHRSOH XQDEOH WR UHVLVW
PDVV VXJJHVWLRQ DW WKH GHFLVLYH PRPHQW ߟ WKH\ DUH SDFLILVWV GXULQJ
SHDFHPLOLWDULVWVGXULQJWKHZDU2QO\DVROLGRUJDQL]DWLRQOHGE\VWURQJ
ZLOOFDQIRUFHWKHPLQWRWKHVHUYLFHRISHDFH
5(/,*,286$1'32/,7,&$/3$&,),60

5 HOLJLRXVSDFLILVPILJKWVZDUEHFDXVHLWLVQRWPRUDOߟ
SROLWLFDOSDFLILVPEHFDXVHLWLVQRWSURILWDEOH

SDFLILVPVHHVVWXSLGLW\
5HOLJLRXVSDFLILVPVHHVFULPHLQDZDUߟSROLWLFDO

5HOLJLRXV SDFLILVP VHHNV WR DEROLVK ZDU E\ FKDQJLQJ SHRSOH ߟ

SROLWLFDOSDFLILVPE\FKDQJLQJVLWXDWLRQV
%RWKIRUPVRISDFLILVPDUHJRRGDQGMXVWLILHGVHSDUDWHO\WKH\VHUYH
KXPDQ SHDFH DQG SURJUHVV PHUJHG WKH\ KDUP RQH DQRWKHU PRUH WKDQ
WKH\EHQHILWHDFKRWKHU+RZHYHUWKH\VKRXOGFRQVFLRXVO\VXSSRUWHDFK
RWKHUVRLWJRHVZLWKRXWVD\LQJWKDWWKHSROLWLFDOSDFLILVWVKRXOGDOVRXVH
HWKLFDO DUJXPHQWV WR VWUHQJWKHQ WKH DGYHUWLVLQJ SRZHU RI SURSDJDQGD
DQG D UHOLJLRXV SDFLILVW VKRXOG VXSSRUW SDFLILVW SROLWLFV LQVWHDG RI
PLOLWDULVWLFߟLIKHKDVDFKRLFH
,Q LWV PHWKRGV KRZHYHU SUDFWLFDO SDFLILVP PXVW HPDQFLSDWH LWVHOI
IURP HWKLFDO SDFLILVP RWKHUZLVH LW ZLOO EH XQDEOH WR VXFFHVVIXOO\ OHDG
WKH ILJKW DJDLQVW PLOLWDULVP ,Q SROLWLFV WKH 0DFKLDYHOOLDQ PHWKRGV RI
PLOLWDULVP KDYH SURYHG PRUH HIIHFWLYH WKDQ WKH 7ROVWRLDQ PHWKRGV RI
SDFLILVP ZKLFK FRQVHTXHQWO\ KDG WR VXUUHQGHU LQ  DQG  ,I
SDFLILVPZDQWVWRZLQLQWKHIXWXUHLWPXVWOHDUQIURPLWVRSSRQHQWVDQG
SXUVXHLWVJRDOVZLWK0DFKLDYHOOLDQPHDQVKHKDVWROHDUQIURPUREEHUV
KRZWRGHDOZLWKUREEHUV%HFDXVHZKRHYHUWKURZVKLVZHDSRQDZD\LQ
WKH QDPH RI QRQYLROHQFH ZKLOH EHLQJ UREEHG KHOSV RQO\ WKH UREEHUV
RQO\ YLROHQFH RQO\ WKH ZURQJ 7KHUHIRUH WKH SROLWLFDO SDFLILVW PXVW
DFNQRZOHGJH WKH IDFW WKDW LQ GDLO\ SROLWLFV QRQYLROHQFH LV QRW HTXDO WR
YLROHQFHWKDWRQO\KHFDQUHQRXQFHYLROHQFHZKRDVRQFH&KULVWLDQLW\
FDQZDLWIRUFHQWXULHV%XW(XURSHFDQQRWLISHDFHGRHVQRWSUHYDLOKHUH
LQ  \HDUV RQO\ &KLQHVH DUFKDHRORJLVWV ZLOO GLVWXUE LWV UHVW LQ WKH
FHPHWHU\6RLWLVQRWHQRXJKIRU(XURSHDQSHDFHWRZLQLILWGRHVQRW
ZLQVRRQLWVYLFWRU\LVLOOXVRU\
$Q\RQH ZKR ZDQWV WR SOD\ D JDPH VXFFHVVIXOO\ PXVW VXEPLW WR WKH
UXOHVRIWKHJDPH7KH UXOHV RI SROLWLFV DUH FXQQLQJ DQG YLROHQFH
 ,ISDFLILVPZDQWVWRLQWHUYHQHLQSROLWLFVLWPXVWXVHWKHVHPHDQVWR
FRPEDWPLOLWDULVP2QO\DIWHULWVYLFWRU\FRXOGLWFKDQJHWKHUXOHVRIWKH
JDPHDQGSXWODZLQSODFHRISRZHU
%XWDVORQJDVLQSROLWLFVSRZHULVDERYHODZSDFLILVPPXVWOHDQRQ
SRZHU,IKHOHDYHVSRZHUWRWKHIULHQGVRIZDUZKLOHLWRQO\UHOLHVRQ
KLVRZQULJKWVDVDPDWWHURISULQFLSOHLWRQO\DGYDQFHVWKHIXWXUHZDUV
$SROLWLFLDQZKRGRHVQRWZDQWWRXVHYLROHQFHLVOLNHDVXUJHRQZKR
GRHV QRW ZDQW WR FXW KHUH DQG WKHUH LW LV LPSRUWDQW WR ILQG WKH ULJKW
PHDVXUH EHWZHHQ WRR PXFK DQG WRR OLWWOH RWKHUZLVH WKH SDWLHQW GLHV
LQVWHDGRIUHFRYHULQJ
3ROLWLFV LV WKH VFLHQFH RI FRQTXHVW DQG WKH ULJKW XVH RI SRZHU 7KH
LQQHUSHDFHRIDOOFRXQWULHVLVXSKHOGE\ODZDQGYLROHQFHODZZLWKRXW
YLROHQFH ZRXOG LPPHGLDWHO\ OHDG WR FKDRV DQG DQDUFK\ WKDW LV WR WKH
ZRUVWIRUPRIYLROHQFH
7KHVDPHIDWHLVWKUHDWHQLQJLQWHUQDWLRQDOSHDFHLILWVULJKWVDUHQRW
VXSSRUWHGE\DQLQWHUQDWLRQDORUJDQL]DWLRQRISRZHU
3DFLILVPDVDSROLWLFDOSURJUDPPXVWWKHUHIRUHQHYHUUHMHFWYLROHQFH
LWPXVWXVHLWDJDLQVWWKHZDUߟQRWIRULW
7KHPLVWUXVWRIWKHSHDFHORYLQJPDVVHVLQWKHSROLWLFDOOHDGHUVKLSRI
WKHSDFLILVWVZKLFKVHHPVWREHSDUDGR[LFDOLVH[SODLQHGE\WKHIDFWWKDW
PRVW SDFLILVWV GR QRW NQRZ WKH $%&V RI SROLWLFV %HFDXVH MXVW DV ZH
SUHIHU WR HQWUXVW RXU UHSUHVHQWDWLRQ WR D VNLOOHG ODZ\HU UDWKHU WKDQ D
FOXPV\RQHHYHQLIKHLVNLQGVRWRRQDWLRQVSUHIHUWRSXWWKHLUIDWHLQWR
FOHYHUKDQGVUDWKHUWKDQLQEHQHYROHQWKDQGV
3DFLILVWVZLOORQO\FRQTXHUWKHSROLWLFDOWUXVWRIWKHPDVVHVLILQWKH
ZRUGVRIWKHELEOHWKH\DUHQRWRQO\JHQWOHDVGRYHVEXWDOVRFOHYHUDV
VQDNHVLIWKH\DUHQRWRQO\QREOHUEXWDOVRPRUHVNLOOHGLQWKHPHDQV
WKDQWKHLUPLOLWDULVWLFULYDOV
5()2502)3$&,),60

7 KH QHZ HUD GHPDQGV D QHZ SDFLILVP 6WDWHVPHQ

VKRXOG EH LWV OHDGHUV LQVWHDG RI GUHDPHUV ILJKWHUV
VKRXOGILOOLWVUDQNVLQVWHDGRIFRPSODLQHUV
2QO\ DQ LQWHOOLJHQW SDFLILVP FDQ FRQYLQFHWKH PDVVHV RQO\D KHURLF
SDFLILVPFDQVZD\WKHP
7KH QHZ SDFLILVWV VKRXOG EH RSWLPLVWV RI WKH ZLOO EXW SHVVLPLVWV RI
NQRZOHGJH 7KH\ VKRXOG QHLWKHU RYHUORRN QRU H[DJJHUDWH WKH GDQJHUV
WKUHDWHQLQJ SHDFH ߟ EXW ILJKW WKHP 7KH FODLP ߨD QHZ ZDU LV
LPSRVVLEOHߩLVDZURQJDVߨDQHZZDULVLQHYLWDEOHߩ:KHWKHURUQRWWKH
SRVVLELOLW\ RI ZDU ZLOO WXUQ LQWR WKH UHDOLW\ RI ZDU GHSHQGV ILUVW DQG
IRUHPRVWRQWKHSDFLILVWVߥHQHUJ\DQGSUXGHQFH%HFDXVHZDUDQGSHDFH
DUHQRWQDWXUDOHYHQWVߟEXWPDQPDGH
7KHUHIRUHWKHSDFLILVWPXVWWDNHWKHIROORZLQJSRLQWRIYLHZߨ3HDFH
LV EHLQJ WKUHDWHQHG SHDFH LV SRVVLEOH SHDFH LV GHVLUDEOH OHWߥV FUHDWH
SHDFHߩ
7KHQHZSDFLILVPPXVWOLPLWLWVJRDOVLQRUGHUWRDFKLHYHWKHPDQGWR
RQO\ GHPDQG ZKDW KH LV GHWHUPLQHG WR HQIRUFH %HFDXVH WKH UHDOP RI
SHDFHFDQRQO\EHFRQTXHUHGVWHSE\VWHSDQGRQHVWHSIRUZDUGLQUHDOLW\
LVZRUWKPRUHWKDQDWKRXVDQGVWHSVLQWKHLPDJLQDWLRQ
%RXQGOHVV SURJUDPV RQO\ OXUH IDQWDVLVWV ZKLOH UHSHOOLQJ SROLWLFLDQV
EXWDSROLWLFLDQFDQGRPRUHIRUSHDFHWKDQDWKRXVDQGIDQWDVLVWV
7KH SDFLILVWV RI DOO QDWLRQV SDUWLHV DQG LGHRORJLHV PXVW IRUP D
SKDODQ[ LQ LQWHUQDWLRQDO SROLWLFV ZLWK XQLILHG OHDGHUVKLS DQG FRPPRQ
V\PEROV
0HUJLQJ VR PDQ\ GLYHUVH JURXSV LV LPSRVVLEOH DQG LQDSSURSULDWH ߟ
EXWWKHLUFRRSHUDWLRQLVSRVVLEOHDQGQHFHVVDU\
3DFLILVPPXVWGHPDQGFODULW\IURPHYHU\SROLWLFLDQDERXWKLVSRVLWLRQ
RQZDUDQGSHDFH,QWKLVOLIHTXHVWLRQHYHU\YRWHUKDVDULJKWWRNQRZ
WKHSRVLWLRQRIKLVFDQGLGDWHWRNQRZXQGHUZKDWSUHFLVHFLUFXPVWDQFHV
KH ZRXOG YRWH IRU WKH ZDU DQG ZKDW PHDQV KH ZDQWV WR XVH WR SUHYHQW
ZDU
 2QO\LIYRWHUVLQWHUYHQHLQIRUHLJQSROLF\LQWKLVZD\LQVWHDGRIEHLQJ
FRQWHQWZLWKSKUDVHVDQGVORJDQVFRXOGWKHSDUOLDPHQWVEHFRPHPLUURU
LPDJHV RI WKH ZLOO WKDW DQLPDWH WKH PDVVHV RI ZRUNHUV IDUPHUV DQG
FLWL]HQVRIDOOQDWLRQV
$ERYHDOOWKHQHZSDFLILVPPXVWUHIRUPWKHSDFLILVWV
3DFLILVP FDQ RQO\ ZLQ LI WKH SDFLILVWV DUH ZLOOLQJ WR VDFULILFH KRQRU
PRQH\DQGOLIHLIULFKSDFLILVWVSD\WKHVWURQJSDFLILVWVDFW
$VORQJDVWKHPDVVHVVHHKHURHVLQWKHPLOLWDULVWVZKRDUHSUHSDUHG
GDLO\WRJLYHWKHLUOLYHVIRUWKHLULGHDOVEXWRQO\ZHDNOLQJVDQGFRZDUGV
LQWKHSDFLILVWVHQWKXVLDVPIRUZDUZLOOEHVWURQJHUWKDQHQWKXVLDVPIRU
SHDFH
%HFDXVH WKH SRZHU WR FRQYLQFH OLHV LQ WKLQJV ߟ WKH SRZHU RI
HQWKXVLDVP LQ SHRSOH 7KH PRUH SDFLILVWV EHFRPH ILJKWHUV DSRVWOHV
KHURHV DQG PDUW\UV RI WKHLU LGHD UDWKHU WKDQ WKHLU DGYRFDWHV DQG
EHQHILFLDULHVWKHVWURQJHUWKHLUSRZHUWRLQVSLUHZLOOEH
:25/'3($&($1'(8523($13($&(

7 KH REMHFWLYHV RI UHOLJLRXV SDFLILVP DUH DEVROXWH DQG

VLPSOH ߟ WKH REMHFWLYHV RI SROLWLFDO SDFLILVP DUH
UHODWLYHDQGGLYHUVH(YHU\SROLWLFDOSUREOHPFDOOVIRU
DVSHFLILFW\SHRISDFLILVP
7KHUHDUHWKUHHPDLQW\SHVRIZDURIIHQVLYHZDUGHIHQVLYHZDUDQG
ZDURIOLEHUDWLRQ
$OOSDFLILVWVDUHRSSRQHQWVRIWKHZDURIFRQTXHVWWKHZD\WRFRPEDW
LW LV FOHDU PXWXDO FRPPLWPHQW RI VWDWHV WR D FRPPRQ GHIHQVH DJDLQVW
SHDFHEUHDNHUV,QWKHIXWXUHVXFKDQRUJDQL]DWLRQZKLFKWKH/HDJXHRI
1DWLRQV LV SODQQLQJ WKURXJK WKH *XDUDQWHH 3DFW ZLOO SURWHFW QDWLRQV
IURP ZDUV RI FRQTXHVW DQG DW WKH VDPH WLPH VSDUH WKHP LQGLYLGXDO
GHIHQVLYHDFWLRQV
7KHSUREOHPRIWKHOLEHUDWLRQZDULVPXFKPRUHGLIILFXOW%HFDXVHLWV
IRUPLVWKDWRIDQRIIHQVLYHZDUEXWLWVVRXOLVWKDWRIDGHIHQVLYHZDU
DJDLQVWDFRQTXHVW3DFLILVPZKLFKPDNHVZDUVRIOLEHUDWLRQLPSRVVLEOH
VLGHV ZLWK WKH SDUW\ RI WKH RSSUHVVRUV 2Q WKH RWKHU KDQG DQ
LQWHUQDWLRQDOOHJLWLPL]DWLRQRIWKHOLEHUDWLRQZDUZRXOGEHDSURPLVHRI
ZDUVRIFRQTXHVW
%HFDXVH WKH OLEHUDWLRQ RI RSSUHVVHG SHRSOHV DQG FODVVHV LV WKH PRVW
SRSXODUH[FXVHIRUDOOZDUVRIFRQTXHVWDQGEHFDXVHHYHU\ZKHUHWKHUH
H[LVW QDWLRQV UDFHV DQG FODVVHV ZKR IHHO RSSUHVVHG RU UHDOO\ DUH
RSSUHVVHG WRGD\ D SDFLILVP WKDW SHUPLWV D ZDU RI OLEHUDWLRQ ZRXOG EH
SUDFWLFDOO\LOOXVRU\
7ZR WKHRULHV DUH IDFLQJ HDFK RWKHU KHUH FRQVHUYDWLYH SDFLILVP
ZKRVHJRDOLWLVWRILJKWHYHU\SHDFHEUHDNHUWRSUHVHUYHWKHVWDWXVTXR
DQGWKHFXUUHQWFRQGLWLRQVRIUXOLQJߟDQGUHYROXWLRQDU\SDFLILVPZKRVH
JRDO LV RQH ODVW ZRUOG ZDU IRU WKH OLEHUDWLRQ RI DOO RSSUHVVHG FODVVHV
SHRSOHV DQG UDFHV DQG WKXV WKH GHVWUXFWLRQ RI DQ\ IXWXUH FDXVH IRU ZDU
DQGWKHFUHDWLRQRIWKHZRUOGUHSXEOLF
&RQVHUYDWLYHSDFLILVPLVFHQWHUHGLQWKH*HQHYDOHDJXHRI1DWLRQVߟ
UHYROXWLRQDU\SDFLILVPLQWKH0RVFRZ7UHDW\
 *HQHYD SDFLILVP ZDQWV WR PDLQWDLQ SHDFH ZLWKRXW HOLPLQDWLQJ WKH
ZHDSRQVWKDWWKUHDWHQWROHDGWRDIXWXUHZDU0RVFRZSDFLILVPZDQWVWR
DFFHOHUDWH WKH LQWHUQDWLRQDO H[SORVLRQ LQ RUGHU WR VHFXUH SHDFH IRU WKH
IXWXUH
,W LV WR EH IHDUHG WKDW *HQHYD ZLOO EH WRR ZHDN WR NHHS WKH SHDFH ߟ
DQG 0RVFRZ WRR ZHDN WR EXLOG LW 7KDW LV ZK\ ERWK EUDQGV WKUHDWHQ
ZRUOGSHDFHZLWKWKHLUUDGLFDOLVP
$SDUWLDOZD\RXWRIWKLVGLOHPPDLVDQHYROXWLRQDU\SDFLILVPZKRVH
REMHFWLYH LV D JUDGXDO HURVLRQ RI QDWLRQDO DQG VRFLDO RSSUHVVLRQ ZKLOH
PDLQWDLQLQJSHDFH7KLVSDFLILVPZKLFKOHDGVOLNHDQDUURZURSHRYHUD
GRXEOHDE\VVUHTXLUHVWKHKLJKHVWSROLWLFDOVNLOORIWKHOHDGHUVDQGJUHDW
SROLWLFDOXQGHUVWDQGLQJE\QDWLRQV1HYHUWKHOHVVLWPXVWEHWULHGE\DOO
WKRVHZKRKRQHVWO\ZDQWSHDFH
7KHWZRPRVWGLIILFXOWSHDFHSUREOHPVRIWKHIXWXUH7KH,QGLDQDQG
WKH$XVWUDOLDQSUREOHP,QWKH,QGLDQTXHVWLRQ ZKLFKLVDVSHFLDOFDVH
RI WKH JHQHUDO FRORQLDO LVVXH  WKH ZLOO RI WKH ,QGLDQ QDWLRQ IRU SROLWLFDO
LQGHSHQGHQFH DQG WKH ZLOO RI WKH 8. WR NHHS LW LQ LWV XQLRQ DUH
VHHPLQJO\ LUUHFRQFLODEOH 7KLV VLWXDWLRQ WHPSWV WKH $VLDQ DQG VHPL
$VLDQ SHRSOHVWRRQHGD\XQLWHZLWK,QGLDLQDJUHDWZDURIOLEHUDWLRQ
7KH $XVWUDOLDQ TXHVWLRQ ZKLFK LV D VSHFLDO FDVH RI WKH 3DFLILF
LPPLJUDWLRQLVVXH UHYROYHVDURXQGWKHORFNRXWRIWKH0RQJROVIURPWKH
$QJOR6D[RQVHWWOHPHQWV7KHVWURQJSRSXODWLRQJURZWKRIWKH0RQJROV
LVQRWSURSRUWLRQDWHWRWKHLUODFNRIVHWWOHPHQWDUHDVDQGWKUHDWHQVWRRQH
GD\FDXVHDQH[SORVLRQLQWKH3DFLILF2FHDQLIDYDOYHLVQRWRSHQHG2Q
WKH RWKHU KDQG WKH ZKLWH $XVWUDOLDQV NQRZ WKDW DGPLWWDQFH RI WKH
0RQJROV ZRXOG VRRQ SXVK WKHP LQWR D PLQRULW\ :KLFK VROXWLRQ ILQGV
WKLVSUREOHPRQFH&KLQDLVDVDUPHGDV-DSDQLVXQFOHDU
7KHSHDFHIXOVROXWLRQWRWKHVHZRUOGSUREOHPVLVDYHU\GLIILFXOWWDVN
IRUWKH%ULWLVK$VLDQDQG$XVWUDOLDQSDFLILVWV
+RZHYHU (XURSHDQ SDFLILVWV PXVW FOHDUO\ UHFRJQL]H WKDW D YLROHQW
VROXWLRQWRWKHVHTXHVWLRQVLVPRUHOLNHO\WKDQDSHDFHIXORQHߟEXWWKDW
WKH\ODFNWKHSRZHUDQGWKHLQIOXHQFHWRSUHYHQWWKHVHWKUHDWHQLQJZDUV
7KLV LQVLJKW FODULILHV WKH PLVVLRQ RI (XURSHDQ SDFLILVPKHGRHVQRW
KDYHWKHSRZHUWRSDFLI\WKHJOREHߟEXWLWGRHVKDYHWKHSRZHUWRJLYH
SHUPDQHQW SHDFH WR (XURSH E\ VROYLQJ WKH (XURSHDQ TXHVWLRQ DQG E\
SUHYHQWLQJKLVSDUWRIWKHHDUWKIURPJHWWLQJLQYROYHGLQWKH$VLDQDQG
3DFLILF FRQIOLFWV $V D UHVXOW (XURSHߥV SROLWLFDO SDFLILVP PXVW OLPLW LWV
REMHFWLYHVDQGOHDUQWRGLVWLQJXLVKEHWZHHQZKDWLWZDQWVDQGZKDWLW
FDQ DFKLHYH :LWKRXW RYHUVWUHWFKLQJ LWV SRZHUV LW PXVW ILUVW ILJKW IRU
SHDFHLQKLVRZQSDUWRIWKHZRUOGDQGOHDYHLWWRWKH$PHULFDQV%ULWV
5XVVLDQVDQG$VLDQVWRNHHSWKHSHDFHLQWKHSDUWVRIWKHZRUOGWKDWKDYH
IDOOHQWRWKHP%XWDOOSDFLILVWVDURXQGWKHZRUOGPXVWVWD\LQFRQVWDQW
FRQWDFWZLWKHDFKRWKHUDVPDQ\SUREOHPV HVSHFLDOO\GLVDUPDPHQW DUH
WREHVROYHGLQWHUQDWLRQDOO\DQGVLQFHLQWHUQDWLRQDOSDFLILVPPXVWWU\WR
DYRLGDQGVHWWOHFRQIOLFWVEHWZHHQWKRVHZRUOGFRPSOH[HV
&RPSDUHGWRWKRVH(DVW$VLDQZDUWKUHDWV(XURSHDQSHDFHLVVXHVDUH
UHODWLYHO\HDV\WRVROYH1RLQVXUPRXQWDEOHREVWDFOHVWDQGVLQWKHZD\RI
(XURSHDQ SHDFH 1RERG\ FRXOG ZLQ DQ\WKLQJ LQ D (XURSHDQ ZDU EXW
HYHU\RQHFRXOGORVHHYHU\WKLQJ7KHYLFWRUZRXOGEHPRUWDOO\ZRXQGHG
ߟWKHGHIHDWHGZRXOGHPHUJHGHVWUR\HGIURPWKLVPDVVPXUGHU
7KHUHIRUHDQHZ(XURSHDQZDUFRXOGRQO\DULVHIURPDFULPHE\WKH
PLOLWDULVWV WKURXJK FDUHOHVVQHVV RI WKH SDFLILVWV DQG VWXSLGLW\ RI
SROLWLFLDQV
,W FDQ EH SUHYHQWHG LI WKH ZDUPRQJHUV DUH NHSW LQ FKHFN LQ HYHU\
FRXQWU\ LI SDFLILVWV IXOILOO WKHLU GXW\ DQG WKH VWDWHVPHQ VDIHJXDUG WKH
LQWHUHVWVRIWKHLUSHRSOHV
7KHVHFXULQJRISHDFHLQ(XURSHZKLFKKDVEHFRPHWKH%DONDQRIWKH
ZRUOGUHSUHVHQWVDVLJQLILFDQWVWHSIRUZDUGWRZDUGVZRUOGSHDFH-XVWDV
WKH :RUOG :DU HPDQDWHG IURP (XURSH ߟ ZRUOG SHDFH PLJKW HPDQDWH
IURP(XURSH
7KHUH LV QR ZD\ RI WKLQNLQJ DERXW ZRUOG SHDFH XQOHVV (XURSHDQ
SHDFHLVDQFKRUHGLQDVWDEOHV\VWHP
5($/32/,7,.3($&(352*5$0

7 KH(XURSHDQWKUHDWRIZDULVGLYLGHGLQWRWZRJURXSV
WKH ILUVW LV IRXQGHG RQ QDWLRQDO RSSUHVVLRQ ߟ WKH
VHFRQGLQVRFLDORSSUHVVLRQ7RGD\WKHERUGHULVVXH
DQGWKH5XVVLDQTXHVWLRQWKUHDWHQ(XURSHDQSHDFH
7KH HVVHQFH RI WKH ERUGHU LVVXH LV WKDW PRVW (XURSHDQ VWDWHV DQG
SHRSOHV DUH GLVVDWLVILHG ZLWK WKHLU FXUUHQW ERUGHUV EHFDXVH WKH\ GR QRW
PHHWWKHQDWLRQDOHFRQRPLFRUVWUDWHJLFGHPDQGVRIWKH1DWLRQDOLVWV$
SHDFHIXO FKDQJH RI WRGD\ߥV ERUGHUV LV LPSRVVLEOH WKHUHIRUH WKH
QDWLRQDOLVWV RI WKRVH GLVVDWLVILHG VWDWHV DUH SUHSDULQJ IRU YLROHQWFKDQJH
RIWKHERUGHUVE\DQHZZDUIRUFLQJWKHLUQHLJKERUVWRDUPWKHPVHOYHV
7KH5XVVLDQTXHVWLRQLVURRWHGLQWKHIDFWWKDWWKHUHLVDZRUOGSRZHU
RQ WKH RSHQ ERUGHU ZLWK (XURSH ZKRVH OHDGHUVߥ JRDO LW LV WR YLROHQWO\
RYHUWKURZ WKH H[LVWLQJ (XURSHDQ V\VWHP ,Q RUGHU WR DFKLHYH WKLV JRDO
WKH\ VXSSRUW WKH VRFLDO LUUHGHQWD RI (XURSH ZLWK PRQH\ DQG KRSH WR
IROORZ XS ZLWK 6RYLHW WURRSV DIWHU WKH RXWEUHDN RI D (XURSHDQ
UHYROXWLRQ
)RUUHDVRQVRISULQFLSOH5XVVLDLVRSSRVLQJPRGHUQGD\SDFLILVPLV
FRPPLWWHGWRPLOLWDULVWLFPHWKRGVDQGRUJDQL]LQJDVWURQJDUP\WRXVHLW
WRFKDQJHWKHZRUOGPDSߟDWOHDVWLQ(XURSHDQG$VLD2QFHWKLVDUP\LV
VWURQJHQRXJKLWZLOOXQGRXEWHGO\PDUFKDJDLQVWWKHZHVW
7KHVH WZR SUREOHPV ZKLFK RFFXU DW LQGLYLGXDO SRLQWV %HVVDUDELD
(DVWHUQ *DOLFLD  WKUHDWHQ WKH SHDFH RI (XURSH RQ D GDLO\ EDVLV (YHU\
(XURSHDQSDFLILVWPXVWGHDOZLWKWKHPDQGWU\WRDYHUWWKHP
7KH ߨ3DQ(XURSD 3URJUDPߩ LV WKH RQO\ ZD\ WR SUHYHQW WKHVH WZR
WKUHDWVZLWKUHDOSROLWLFDOPHDQVDQGWRHQVXUH(XURSHDQSHDFH
,WVJRDOLV
6HFXULQJ LQQHU(XURSHDQ SHDFH WKURXJK D SDQ(XURSHDQ
DUELWUDWLRQ DJUHHPHQW JXDUDQWHHSDFW FXVWRPV XQLRQDQG PLQRULW\
SURWHFWLRQ
6HFXULQJSHDFHZLWK5XVVLDWKURXJKDSDQ(XURSHDQDOOLDQFH
WKURXJKPXWXDOUHFRJQLWLRQQRQLQWHUIHUHQFHDQGERUGHUJXDUDQWHH
 MRLQW GLVDUPDPHQW DQG HFRQRPLF FRRSHUDWLRQ DV ZHOO DV E\
UHGXFLQJVRFLDORSSUHVVLRQ
6HFXULQJ SHDFH ZLWK %ULWDLQ $PHULFD DQG (DVW $VLD WKURXJK
DUELWUDWLRQ DJUHHPHQWV DQG UHJLRQDO UHIRUP RI WKH /HDJXH RI
1DWLRQV
7KH 3DQ(XURSD 3URJUDP LV WKH RQO\ SRVVLEOH VROXWLRQ WR WKH
(XURSHDQ ERUGHU SUREOHP 7KH LQFRPSDWLELOLW\ RI DOO QDWLRQDO
DVSLUDWLRQV DV ZHOO DV WKH WHQVLRQ EHWZHHQ JHRJUDSKLFVWUDWHJLF
KLVWRULFDOHFRQRPLFDQGQDWLRQDOERUGHUVLQ(XURSHPDNHVDIDLUERUGHU
PDQDJHPHQW LPSRVVLEOH $ FKDQJH RI WKH ERUGHUV ZRXOG HOLPLQDWH ROG
LQMXVWLFHVEXWSXWQHZRQHVLQWKHLUSODFH
7KHUHIRUHDVROXWLRQRIWKH(XURSHDQERUGHUSUREOHPLVRQO\SRVVLEOH
E\WXUQLQJLWRII
7KHWZRHOHPHQWVRIWKHVROXWLRQDUH
$7KH FRQVHUYDWLYH HOHPHQW RI WHUULWRULDO VWDWXV TXR ZKLFK
VWDELOL]HVWKHH[LVWLQJERUGHUVDQGWKXVSUHYHQWVDQLPSHQGLQJZDU
%7KH UHYROXWLRQDU\ HOHPHQW RI JUDGXDO HOLPLQDWLRQ RI ERUGHUV
LQVWUDWHJLFHFRQRPLFDQGQDWLRQDOZD\VWKDWGHVWUR\WKHSRVVLELOLW\
RIIXWXUHZDUV
7KLV VHFXULQJ RI WKH ERUGHUV FRPELQHG ZLWK WKHLU GLVPDQWOLQJ
SUHVHUYHVWKHIRUPDORUJDQL]DWLRQRI(XURSHZKLOHFKDQJLQJWKHZHVW
,Q WKLV ZD\ LW VHFXUHV WKH SUHVHQW DQG IXWXUH SHDFH DV ZHOO DV WKH
HFRQRPLFDQGQDWLRQDOGHYHORSPHQWRI(XURSH
7KH RWKHU (XURSHDQ GDQJHU RI ZDU LV WKH 5XVVLDQ RQH 2Q WKH RQH
KDQG 5XVVLDQ PLOLWDUL]DWLRQ VSULQJV IURP IHDU RI DQ DQWL%ROVKHYLN
LQYDVLRQ VXSSRUWHG E\ (XURSH ߟ RQ WKH RWKHU WKH ZLOO WR ODXQFK DQ
DJJUHVVLYHZDUDJDLQVW(XURSHLQWKHQDPHRIVRFLDOOLEHUDWLRQ
7KHUHIRUH LW PXVW EH WKH DLP RI (XURSHDQ SDFLILVP WR VHFXUH ERWK
5XVVLDIURPD(XURSHDQDQG(XURSHIURPD5XVVLDQDWWDFN7KHILUVWLV
RQO\ SRVVLEOH WKURXJK D ZLOO RI SHDFH ߟ WKH VHFRQG WKURXJK PLOLWDU\
VXSHULRULW\ 7KLV PLOLWDU\ VXSHULRULW\ FDQ EH LPPHGLDWHO\ DFKLHYHG E\
(XURSH ZLWKRXW LQFUHDVLQJ LWV DUPDPHQWV WKURXJK D SDQ(XURSHDQ
GHIHQVHDOOLDQFH
 (XURSHDQSDFLILVPPXVWQRWDOORZWKLVVXSHULRULW\WRGHJHQHUDWHLQWR
DQ DUPV UDFH EXW PXVW PDNH LW WKH EDVLV RI 5XVVLDQ(XURSHDQ
GLVDUPDPHQWDQGXQGHUVWDQGLQJ
(XURSHGRHVQRWKDYHWKHSRVVLELOLW\WRFKDQJHWKHSROLWLFDOVWDQFHRI
WKH5XVVLDQUXOHUVZKRVHV\VWHPLVH[SDQVLYH6LQFHLWFDQQRWSHUVXDGH
WKHP RI SHDFH LW PXVW IRUFH WKHP LQWR SHDFH ,I RQH QHLJKERU LV
SHDFHIXO WKH RWKHU ZDUOLNH SDFLILVP GHPDQGV WKDW PLOLWDU\ VXSHULRULW\
EHRQWKHVLGHRISHDFH$UHYHUVDORIWKLVUHODWLRQVKLSPHDQVZDU
,WLVDGHOXVLRQRIPDQ\SDFLILVWVWRVHHWKHVDIHZD\WRSHDFHLQWKHLU
RZQ GLVDUPDPHQW 8QGHU FHUWDLQ FLUFXPVWDQFHV SHDFH GHPDQGV
GLVDUPDPHQW  EXW LQ RWKHU FLUFXPVWDQFHV DUPDPHQW )RU H[DPSOH LI
(QJODQGDQG%HOJLXPKDGVWURQJDUPLHVLQWKH%ULWLVKPHGLDWLRQ
SURSRVDOZRXOGKDYHEHHQPRUHOLNHO\WREHDFFHSWHGVKRUWO\EHIRUHWKH
FDWDVWURSKH
,I IRU H[DPSOH D SDFLILVW QDWLRQ UHIXVHV WR MRLQ WKH ZDU ZKLOH WKHLU
QHLJKERUV OXUN RQ WKH RSSRUWXQLW\ WR LQYDGH LW LW GRHV QRW SURPRWH
SHDFHEXWZDU
,I DQRWKHU QDWLRQ LQFUHDVHV LWV ZHDSRQV WR VHFXUH LWV SHDFH DQG
WKHUHE\ SURYRNHV D SHDFHIXO QHLJKERU WR DQ DUPV UDFH LW GRHV QRW
SURPRWHSHDFHEXWZDU
(YHU\ SHDFH SUREOHP GHPDQGV DQ LQGLYLGXDO DFWLRQ 7KHUHIRUH
(XURSH FDQQRW DSSO\ WKH VDPH PHWKRGV IRU SHDFH ZLWK (QJODQG DQG
5XVVLD
3HDFHZLWK(QJODQGZKRVHSROLF\LVVWDEOHDQGSDFLILVWFDQEHEDVHG
RQ WUHDWLHV ߟ SHDFH ZLWK 5XVVLD ZKLFK LV LQ D UHYROXWLRQ DQG GRHV QRW
GHQ\LWVZDUSODQVDJDLQVWWKH(XURSHDQV\VWHPQHHGVPLOLWDU\VHFXULW\
,W ZRXOG EH HTXDOO\ XQSROLWLFDO DQG XQSDFLILVWLF WR UHO\ RQ
DJUHHPHQWV ZLWK WKH 6RYLHWV DV WRZDUGV (QJODQG RQ WKH IOHHW 2Q WKH
RWKHU KDQG (XURSHDQ SDFLILVP PXVW DOZD\V EH SUHSDUHG WR IDFH D
SDFLILVW5XVVLDZKLFKKDVGLVDUPHGDQGKRQHVWO\UHQRXQFHGLWVSODQVIRU
LQYDVLRQWKHVDPHZD\DVDSDFLILVW(QJODQG
%XW(XURSHDQSDFLILVWVPXVWQHYHUIRUJHWWKDW5XVVLDLVDUPLQJLWVHOI
LQ WKH QDPH RI VRFLDO OLEHUDWLRQ DQG WKDW PLOOLRQV RI (XURSHDQV ZRXOG
UHJDUGD5XVVLDQLQYDVLRQDVDZDURIOLEHUDWLRQ7KLVZDUEHFRPHVDOO
WKH PRUH WKUHDWHQLQJ WKH PRUH WKLV FRQYLFWLRQ VSUHDGV WKURXJKRXW WKH
PDVVHVRI(XURSH
-XVW DV WKH QDWLRQDO WKUHDWV RI ZDU FDQ RQO\ EH DYHUWHG E\ EUHDNLQJ
GRZQQDWLRQDORSSUHVVLRQWKLVVRFLDOGDQJHURIZDUFDQRQO\EHDYHUWHG
E\EUHDNLQJGRZQVRFLDORSSUHVVLRQ
7KH VRFLDO LUUHGHQWD RI (XURSH ZLOO RQO\ GURS RXW RI WKH 0RVFRZ
7UHDW\LILWLVSURYLGHGZLWKSUDFWLFDOSURRIWKDWWKHVLWXDWLRQDQGIXWXUH
RI ZRUNHUV LQ WKH GHPRFUDWLF FRXQWULHV LV EHWWHU WKDQ LQ WKH 6RYLHW ,I
FRPPXQLVPFDQSURYHWKHRSSRVLWHQRIRUHLJQSROLF\FDQVDYH(XURSH
IURPWKHUHYROXWLRQDQGWKHXQLRQZLWK6RYLHW5XVVLD
7KLVVKRZVWKHFORVHFRQQHFWLRQEHWZHHQGRPHVWLFDQGIRUHLJQSROLF\
ߟ IUHHGRPDQGSHDFH$VDQ\RSSUHVVLRQZKHWKHULWLVQDWLRQDORUVRFLDO
FDUULHV ZLWK LW WKH VHHGV RI ZDU WKH ILJKW DJDLQVW RSSUHVVLRQ IRUPV DQ
LQWHJUDOSDUWRIWKHILJKWIRUSHDFH
(YHU\ RSSUHVVLRQ IRUFHV WKH RSSUHVVRUV WR PDLQWDLQ PLOLWDU\ SRZHU
DQG WKH RSSUHVVHG DQG WKHLU DOOLHV WR ZDUPRQJHULQJ &RQYHUVHO\ D ZDU
DQG DUPDPHQW SROLF\ SURYLGH VWDWH UXOHUV ZLWK WKH VWURQJHVW LQVWUXPHQW
IRU GRPHVWLFRSSUHVVLRQWKHDUP\ 7KHUHIRUHWKHSHDFHRI(XURSHDQG
WKHZRUOGZLOORQO\EHSHUPDQHQWO\VHFXUHGZKHQUHOLJLRQVQDWLRQVDQG
FODVVHVFHDVHIHHOLQJRSSUHVVHG
7KDW LV ZK\ SHDFHIXO IRUHLJQ SROLF\ JRHV KDQG LQ KDQG ZLWK OLEHUDO
GRPHVWLFSROLF\ߟEXWIRUHLJQZDUSROLF\ZLWKRSSUHVVLRQLQVLGH
352027,1*7+(,'($2)3($&(

, Q DGGLWLRQ WR ILJKWLQJ IRU LWV IRUHLJQ SROLF\ SHDFH

SURJUDPWKHSDFLILVWVKRXOGQRWPLVVWKHRSSRUWXQLW\WR
SURPRWHLQWHUQDWLRQDOFRRSHUDWLRQDQGXQGHUVWDQGLQJ
7KLVGHWHUPLQHVWKHDWWLWXGHRISDFLILVPWRWKH/HDJXHRI1DWLRQV
7RGD\ߥV /HDJXH RI 1DWLRQV LV YHU\ LPSHUIHFW DV D SHDFH LQVWLWXWLRQ
DERYHDOOLWLVKHDYLO\EXUGHQHGE\WKHLQKHULWDQFHRIWKHZDUWKDWJDYH
ELUWKWRLW,WLVZHDNXQDUWLFXODWHGXQUHOLDEOHLWLVXQILQLVKHGDVORQJDV
WKH8QLWHG6WDWHV*HUPDQ\DQG5XVVLDDUHDEVHQWIURPLW1HYHUWKHOHVV
WKH*HQHYD/HDJXHRI1DWLRQVLVWKHILUVWGUDIWRIDQLQWHUQDWLRQDOZRUOG
RUJDQL]DWLRQWKDWLVWRUHSODFHWKHFXUUHQWDQDUFK\RIWKHQDWLRQV
,WKDV WKLV LPPHQVH DGYDQWDJH RYHU DOO EHWWHULQVWLWXWLRQV ZKLFKDUH
RQO\SURMHFWV
7KHUHIRUH HYHU\ SDFLILVW PXVW VXSSRUW WKH ZHDN IUDLO HPEU\RQLF
/HDJXH RI 1DWLRQV KH VKRXOG FULWLFL]H LW EXW QRW ILJKW LW ZRUN RQ LWV
WUDQVIRUPDWLRQEXWQRWRQLWVGHVWUXFWLRQ
(YHU\ SDFLILVW VKRXOG KHOS HOLPLQDWH WKH VWXSLG KDWUHG EHWZHHQ
QDWLRQVZKLFKKDUPVHYHU\RQHDQGGRHVQRJRRG+HFDQGRWKLVEHVWE\
VSUHDGLQJ WKH WUXWK DQG FRPEDWLQJ PDOLFLRXV DQG XQHGXFDWHG KDWH
VSHHFK
2QHRIWKHPDLQFDXVHVRIQDWLRQDOKDWUHGLVWKDWQDWLRQVGRQRWNQRZ
HDFK RWKHU DQG VHHLQJ RQO\ WKH VWDWHPHQWV RI D FKDXYLQLVW SUHVV DQG
OLWHUDWXUHSHUFHLYHWKHPRQO\LQGLVWRUWHGLPDJHV,QRUGHUWRILJKWWKHVH
DWWLWXGHV SDFLILVP VKRXOG FUHDWH DQ HQOLJKWHQHG OLWHUDWXUH SURPRWH
WUDQVODWLRQVDVZHOODVWKHH[FKDQJHRISURIHVVRUVWHDFKHUVVWXGHQWVDQG
FKLOGUHQ $Q LQWHUQDWLRQDO DJUHHPHQW VKRXOG DLP WR FRPEDW FKDXYLQLVW
KDWHVSHHFKDJDLQVWIRUHLJQQDWLRQVLQVFKRROVDQGWKHSUHVV
,Q RUGHU WR SURPRWH WKH LGHD RI SHDFH DQG WR FRPEDW ZDU SHDFH
PLQLVWULHVVKRXOGEHHVWDEOLVKHGLQDOOQDWLRQVZKLFKLQFRQVWDQWFRQWDFW
ZLWK HDFK RWKHU DQG ZLWK DOO WKH SDFLILVW RUJDQL]DWLRQV DW KRPH DQG
DEURDGVHUYHLQWHUQDWLRQDOUHFRQFLOLDWLRQ
2QHRIWKHPRVWLPSRUWDQWWDVNVRISDFLILVPLVWKHLQWURGXFWLRQRID
FRPPRQODQJXDJH%HFDXVHEHIRUHWKHQDWLRQVFDQWDONWRHDFKRWKHULW
LVGLIILFXOWWRH[SHFWWKHPWRXQGHUVWDQGHDFKRWKHU
$Q LQWHUQDWLRQDO FRPPRQ ODQJXDJH ZRXOG KDYH WKH SXUSRVH WKDW
HYHU\ SHUVRQ VSHDNV WKHLU QDWLYH ODQJXDJH DW KRPH ZKLOH XVLQJ WKH
FRPPRQODQJXDJHLQGHDOLQJZLWKIRUHLJQQDWLRQDOV(YHU\SHUVRQZKR
OHDYHV KLV KRPHODQG QHHGV RQO\ RQH FRPPRQ ODQJXDJH ZKHUHDV WRGD\
KH QHHGV VHYHUDO ODQJXDJHV DEURDG $V D FRPPRQ ODQJXDJH RQO\
(VSHUDQWRDQG(QJOLVKFRPHLQWRTXHVWLRQ:KLFKRIWKHVHLVFKRVHQLV
LUUHOHYDQWDVORQJDVWKHZRUOGDJUHHVRQRQHRIWKHVHWZR
7KH(QJOLVKODQJXDJHKDVWKHJUHDWDGYDQWDJHRYHU(VSHUDQWRWKDWLW
KDV DOUHDG\ DVVXPHG WKH UROH RI DQ LQWHUQDWLRQDO FRPPRQ ODQJXDJH LQ
KDOI RI $VLD $IULFD DQG $PHULFD DV ZHOO DV ODUJH SDUWV RI (XURSH VR
WKDW LQ WKHVH DUHDV WKHLU RIILFLDO LQWURGXFWLRQ ZRXOG RQO\ EH WKH
VDQFWLRQLQJ RI H[LVWLQJ SUDFWLFH ,Q LWV LQWHUPHGLDWH SRVLWLRQ EHWZHHQ
*HUPDQLF DQG 5RPDQ ODQJXDJHV LW LV HDVLO\ OHDUQDEOH IRU *HUPDQV DV
ZHOODVIRU5RPDQVDVZHOODVIRU6ODYVZKRDOUHDG\VSHDND*HUPDQLF
RU5RPDQODQJXDJH,QDGGLWLRQ(QJOLVKLVWKHODQJXDJHRIWKHWZRPRVW
SRZHUIXOSDUWVRIWKHHDUWKDQGWKHPRVWZLGHO\XVHGQDWLYHODQJXDJHRI
ZKLWHPDQNLQG
7KH LQWURGXFWLRQ RI WKH LQWHUQDWLRQDO FRPPRQ ODQJXDJH FRXOG EH
PDGH WKURXJK D SURSRVDO E\ WKH /HDJXH RI 1DWLRQV WR HQIRUFH LW LQ DOO
PLGGOH VFKRROV DQG WHDFKHU WUDLQLQJ FHQWHUV LQ WKH ZRUOG DQG DIWHU D
GHFDGHDOVRLQSULPDU\VFKRROV
7KH VSUHDGLQJ RI HQOLJKWHQPHQW DQG WKH ILJKW DJDLQVW KXPDQ
LJQRUDQFHKDYHIDVWHUFKDQFHVRIVXFFHVVIRUSHDFHSURSDJDQGDWKDQWKH
VSUHDGLQJRIFKDULW\DQGWKHILJKWDJDLQVWHYLO
%HFDXVH KXPDQ EHOLHIV FKDQJH IDVWHU WKDQ KXPDQ LQVWLQFWV DQG DW
OHDVW LQ (XURSH WKH SHDFH PRYHPHQW ZRXOG KDYH QR QHHG WR DSSHDO WR
WKHKXPDQKHDUWߟLILWFRXOGUHO\RQWKHKXPDQPLQG
-XVW DV HQOLJKWHQPHQW HQGHG ZLWFKEXUQLQJ WRUWXUH DQG VODYHU\ ߟ VR
ZLOOLWVRPHGD\HQGZDUWKHUHPQDQWRIDEDUEDULFDJHRIPDQNLQG
:KHQ WKLV ZLOO KDSSHQ LV XQNQRZQ WKDW LW ZLOO KDSSHQ LV FHUWDLQ ,W
GHSHQGV RQ WKH SDFLILVWV 7KDW KXPDQV ILQDOO\ OHDUQHG WR IO\ DIWHU
KXQGUHGVRIWKRXVDQGVRI\HDUVZDVPXFKPRUHZRQGHUIXODQGXQOLNHO\
WKDQRQHGD\OHDUQLQJWROLYHLQSHDFHZLWKRQHDQRWKHU
3($&(3523$*$1'$

3 HDFH SURSDJDQGD LV WKH QHFHVVDU\ FRPSOHPHQW WR

SHDFH SROLF\ EHFDXVH SDFLILVW SROLF\ LV VKRUW WHUP ߟ
SDFLILVWSURSDJDQGDORQJWHUP
3HDFH SURSDJDQGD DORQH LV LQFDSDEOH RI SUHYHQWLQJ WKH LPPLQHQW
WKUHDW RI ZDU VLQFH LW UHTXLUHV DW OHDVW WZR JHQHUDWLRQV IRU LWV LPSDFW
SHDFH SROLF\ DORQH LV LQFDSDEOH RI VHFXULQJ SHUPDQHQW SHDFH DV WKH
UDSLGGHYHORSPHQWRIRXUDJHEDUHO\H[WHQGVWKHVSKHUHRILQIOXHQFHRI
SROLWLFVRYHUWZRJHQHUDWLRQV
$W EHVW SHDFH SROLF\ FDQ ZLWK JUHDW VNLOO FUHDWH D WHPSRUDU\
DUUDQJHPHQWWRJLYHSHDFHSURSDJDQGDWKHRSSRUWXQLW\WRPRUDOO\GLVDUP
WKHQDWLRQVDQGWRFRQYLQFHWKHPWKDWZDULVDEDUEDULFLPSUDFWLFDODQG
RXWPRGHGPHDQVRIGHDOLQJZLWKLQWHUQDWLRQDOGLIIHUHQFHV
)RU DV ORQJ DV WKLVNQRZOHGJH KDV QRW SUHYDLOHGLQWHUQDWLRQDOO\DQG
DV ORQJ DV WKHUH DUH QDWLRQV ZKR UHJDUG ZDU DV WKH PRVW DSSURSULDWH
PHDQVRIDFFRPSOLVKLQJWKHLUSROLWLFDOJRDOVSHDFHFDQQRWEHEDVHGRQ
GLVDUPDPHQWEXWRQO\RQWKHPLOLWDU\VXSHULRULW\RIWKHSDFLILVWV
&RPSOHWHGLVDUPDPHQWLVRQO\SRVVLEOHDIWHUWKHYLFWRU\RIWKHSHDFH
LGHDߟWKHDEROLWLRQRIWKHSROLFHZRXOGEHSRVVLEOHDIWHUWKHH[WLQFWLRQ
RI FULPLQDOLW\ RWKHUZLVH WKH DEROLWLRQ RI WKH SROLFH OHDGV WR D
GLFWDWRUVKLSRIFULPHߟWKHDEROLWLRQRIWKHDUP\WRDGLFWDWRUVKLSRIZDU
3DFLILVWSURSDJDQGDLVGLUHFWHGDJDLQVWZDULQVWLQFWVZDULQWHUHVWVDQG
LGHDOV RI ZDU 7KH ILJKW DJDLQVW ZDU LQVWLQFWV PXVW EH OHG E\ WKHLU
ZHDNHQLQJ DQG E\ GLVWUDFWLRQ DV ZHOO DV E\ VWUHQJWKHQLQJ RI RSSRVLQJ
LQVWLQFWV
$ERYHDOOLWLVLPSRUWDQWWRZHDQZDUQDWLRQVDQGWKXVOHWWKHLUZDU
LQVWLQFWV GLH RII OLNH VPRNHUV DOFRKROLFV DQG PRUSKLQH DGGLFWV ORVLQJ
WKHLU DGGLFWLRQV E\ QRW XVLQJ 7KH PHDQV IRU WKH FHVVDWLRQ RI ZDU LV
SHDFHSROLF\
6SRUW LV YHU\ VXLWDEOH WR GLVWUDFW KXPDQ ߟ HVSHFLDOO\ PDOH ILJKWLQJ
LQVWLQFWV IURP WKH DWWUDFWLRQ RI ZDU ,W LV QR FRLQFLGHQFH WKDW WKH PRVW
VSRUWVORYLQJ QDWLRQV RI (XURSH (QJODQG 6FDQGLQDYLD  DUH DOVR WKH
PRVWSHDFHIXO
 2QO\ KXQWLQJ LV DQ H[FHSWLRQ KHUH LW SUHVHUYHV WKH PRVW SULPLWLYH
IRUPRIFRPEDWDQGVWUHQJWKHQVWKHLQVWLQFWWRNLOOUDWKHUWKDQGLYHUWLW
,WKDVGRQHPXFKWRSUHVHUYH(XURSHDQPLOLWDULVPVLQFHKXQWLQJZDVWKH
PDLQ VSRUW RI WKH UXOLQJ FODVVHV DQG UXOHUV EHFDXVH KXQWLQJ LQFLWHV
GLVUHVSHFWIRUOLIHDQGGHVHQVLWL]HVDJDLQVWEORRGVKHG
&RQGHPQDWLRQ RI ZDU PXVW QHYHU GHJHQHUDWH LQWR FRQGHPQDWLRQ RI
ILJKWLQJ6XFKGHUDLOPHQWRISDFLILVPZRXOGRQO\SOD\LQWRWKHKDQGVRI
WKHPLOLWDULVWVHWKLFDOO\DQGELRORJLFDOO\FRPSURPLVLQJSDFLILVP
%HFDXVHILJKWLQJDQGWKHZLOOWRILJKWDUHFUHDWRUVDQGSUHVHUYHUVRI
KXPDQFXOWXUH
7KHHQGRIILJKWLQJDQGWKHGHDWKRIKXPDQILJKWLQJLQVWLQFWVZRXOG
EHV\QRQ\PRXVZLWKWKHHQGDQGGHDWKRIFXOWXUHDQGRIPDQ
)LJKWLQJLVJRRGRQO\ZDULVEDGEHFDXVHLWLVDSULPLWLYHFUXGHDQG
REVROHWHIRUPRILQWHUQDWLRQDOEDWWOHDVGXHOVDUHDSULPLWLYHFUXGHDQG
REVROHWHIRUPRIVRFLDOEDWWOH
7KH JRDO RI SDFLILVP LV QRW WKH DEROLWLRQ RI FRPEDW EXW WKH
UHILQHPHQWVXEOLPDWLRQDQGPRGHUQL]DWLRQRILWVPHWKRGV
1RZDGD\V HFRQRPLF FRPEDW LV DERXW WR UHSODFH WKH DUPHG FRPEDW
ER\FRWW DQG EORFNDGH DUH UHSODFLQJ ZDU DQG WKH SROLWLFDO SURWHVW KDV
UHSODFHG WKH UHYROXWLRQ &KLQD KDV ZRQ VHYHUDO SROLWLFDO EDWWOHV DJDLQVW
-DSDQ ZLWK ER\FRWWV DQG *DQGKL LV WU\LQJ WR ZLQ WKH ,QGLDQ OLEHUDWLRQ
ZDULQWKLVEORRGOHVVZD\
$WLPHZLOOFRPHZKHQQDWLRQDOULYDOU\ZLOOEHIRXJKWZLWKZHDSRQV
RIWKHPLQGLQVWHDGRINQLYHVDQGEXOOHWV,QVWHDGRIDUPVUDFHVQDWLRQV
ZLOO FRPSHWH ZLWK HDFK RWKHU LQ VFLHQWLILF DUWLVWLF DQG WHFKQRORJLFDO
DFKLHYHPHQWVLQMXVWLFHDQGVRFLDOZHOIDUHLQSXEOLFKHDOWKDQGSXEOLF
HGXFDWLRQDQGLQEULQJLQJIRUWKJUHDWSHUVRQDOLWLHV
7KH VHFRQG WDVN RI SHDFH SURSDJDQGD LV WKH ILJKW DJDLQVW ZDU
LQWHUHVWV 7KLV SURSDJDQGD LV WR VKRZ QDWLRQV DQG LQGLYLGXDOV WKH ORZ
FKDQFHV RI SURILW DQG WKH WUHPHQGRXV ULVN RI ORVVHV ZLWK WKH UHVXOW RI
ZDUEHFRPLQJDEDGULVN\DQGXQSURILWDEOHEXVLQHVV
$VIDUDVQDWLRQVDUHFRQFHUQHG1RUPDQ$QJHOODOUHDG\SURYHGWKLV
EHIRUHWKHZDUDQGWKHZRUOGZDUKDVFRQILUPHGKLVWKHVLVEULOOLDQWO\
 :KHWKHUIURPDQDWLRQDOSRLQWRIYLHZDYLFWRULRXVOLEHUDWLRQZDULQ
,QGLD RU D FRQTXHVW RI $XVWUDOLD E\ WKH 0RQJROV ZRXOG RXWZHLJK WKH
YLFWLPV PD\ UHPDLQ XQH[SODLQHG KHUH EXW LW LV FHUWDLQ WKDW LQ D QHZ
(XURSHDQ ZDU WKH ZLQQHU ZRXOG HPHUJH VHYHUHO\ GDPDJHG SROLWLFDOO\
HFRQRPLFDOO\ DQG QDWLRQDOO\ ZKLOH WKH GHIHDWHG QDWLRQ ZRXOG EH
GHVWUR\HGIRUHYHU7KHSRWHQWLDOSURILWLVLQQRZD\UHODWLYHWRWKHORVVHV
,QWHUHVWHG LQ ZDU DUH RQO\ DPELWLRXV SROLWLFLDQV DQG PLOLWDU\ ZKR
KRSHIRUJORU\RQWKHRQHKDQGDQGJUHHG\ZDUVXSSOLHUVZKRKRSHIRU
EXVLQHVVRQWKHRWKHU7KHVHJURXSVDUHYHU\VPDOOEXWYHU\SRZHUIXO
7KHILUVWJURXSFDQEHFRROHGE\DGHWHUPLQHGSDFLILVPLQGHPRFUDWLF
VWDWHVSROLWLFLDQVZKRSODFHWKHLUDPELWLRQVDERYHWKHZHOOEHLQJRIWKHLU
QDWLRQVKDOOEHWUHDWHGOLNHFULPLQDOV
,W LV RIWHQ VDLG DERXW RIILFHUV WKDW WKHLU ZDU DPELWLRQV DUH WKHLU
SURIHVVLRQDOGXW\,QSDFLILVWQDWLRQVWKLVZRXOGEHDIODZEHFDXVHWKHUH
WKHDUP\LVQRWDPHDQVRIFRQTXHVWEXWDVDQHFHVVDU\ZHDSRQDJDLQVW
IRUHLJQZLOORIZDU,WZRXOGWKHUHIRUHEHQHFHVVDU\IRUWKHRIILFHUVWREH
HGXFDWHG DV SDFLILVWV EXW KHURLF SDFLILVWV ZKR DUH DOZD\V SUHSDUHG WR
VDFULILFHWKHLUOLYHVWRWKHPDLQWHQDQFHRISHDFHDQGZKRVHHWKHPVHOYHV
DVFUXVDGHUVLQWKHILJKWDJDLQVWZDU
7KH LQGXVWULDOLVWV ZKR ORQJ IRU ZDU IRU WKH SURILWV VKRXOG EH
UHPLQGHGWKDWDWWKHHQGRIWKHQH[W(XURSHDQZDULV%ROVKHYLVP7KH\
FDQH[SHFWH[SURSULDWLRQLIQRWWKHJDOORZV7KHZDUEXVLQHVVORVHVLWV
DSSHDO WKURXJK WKLV SURVSHFW )RU LW VHHPV PRUH DGYDQWDJHRXV IRU
LQGXVWU\ WR EH FRQWHQW ZLWK UHODWLYHO\ QDUURZ EXW VDIH SHDFH JDLQV
LQVWHDGRIUHDFKLQJIRUWKHIDWEXWOLIHWKUHDWHQLQJZDUSURILWV
7KHVH DUJXPHQWV DUH LPSRUWDQW EHFDXVH WKH\ UHPRYH WKH JROGHQ
HQJLQHIURPZDUSURSDJDQGDDQGJLYHLWWRWKHSHDFHSURSDJDQGD
3HDFH SURSDJDQGD PXVW DOVR PRELOL]H KXPDQ LPDJLQDWLRQ DJDLQVW D
IXWXUH ZDU ,W KDV WR HGXFDWH WKH PDVVHV DERXW WKH GDQJHUV DQG KRUURUV
WKDWWKUHDWHQWKHPLQFDVHRIDZDUDERXWWKHQHZUD\VDQGJDVVHVWKDW
FDQ NLOO HQWLUH FLWLHV DERXW WKH WKUHDW RI DQ H[WHUPLQDWLRQ ZDU ZKLFK
ZRXOG EH GLUHFWHG OHVV WR WKH IURQW EXW WR WKH UXUDO DUHDV DERXW WKH
SROLWLFDO DQG HFRQRPLF FRQVHTXHQFHV RI VXFK D ZDU IRU YLFWRUV DQG
GHIHDWHG
 7KLV SURSDJDQGD PXVW KHOS ZHDN KXPDQ PHPRU\ DQG ZHDN KXPDQ
LPDJLQDWLRQ IRU LI SHRSOH KDG PRUH LPDJLQDWLRQ ߟ WKHUH ZRXOG EH QR
PRUHZDU7KHZLOOWROLYHZRXOGEHWKHVWURQJHVWDOO\RISDFLILVP
:DULQVWLQFWVDUHFUXGHDQGSULPLWLYHߟZDULQWHUHVWVDUHSUREOHPDWLF
DQGGDQJHURXVߟWKHLGHDOVRIZDUDUHIDOVHDQGRXWGDWHG
7KH\ IDOVHO\ HTXDWH ZDU ZLWK ILJKWLQJ ZDUULRUV ZLWK KHURHV
XQLPDJLQDWLYHQHVVZLWKEUDYHU\IHDUZLWKFRZDUGLFH
7KH\ DUH IURP D ORVW HSRFK IURP FRQGLWLRQV WKDW KDYH EHHQ
RYHUFRPH 7KH\ ZHUH RQFH VKDSHG E\D ZDU FDVWH DQG DGRSWHG E\IUHH
QDWLRQVZLWKRXWFULWLFLVP
2QFHWKHZDUULRUZDVWKHJXDUGLDQRIFXOWXUHWKHZDUKHURZDVDWUXH
KHURZDUZDVDYLWDOHOHPHQWRIWKHQDWLRQVZKRVHIDWHZDVGHFLGHGE\
WKHLUEUDYHU\LQWKHILHOG
6LQFHWKHQZDUKDVEHFRPHXQFKLYDOURXVLWVPHWKRGVYLOHLWVIRUPV
XJO\SHUVRQDOEUDYHU\LVQRORQJHUFUXFLDOWKHPLVHUDEOHXJOLQHVVRID
PDVVVODXJKWHUKRXVHKDVWDNHQWKHSODFHRIWKHNQLJKWO\EHDXW\RIDPDVV
WRXUQDPHQW7RGD\ߥVPHFKDQL]HGZDUKDVIRUHYHUORVWLWVURPDQFH
)URP DQ HWKLFDO SRLQW RI YLHZ D GHIHQVLYH ZDU LV RUJDQL]HG VHOI
GHIHQVH ߟ DQ RIIHQVLYH ZDU LV RUJDQL]HG PXUGHU :RUVH VWLOO SHDFHIXO
SHRSOH DUH EHLQJ IRUFHG WR SRLVRQ DQG WHDU RWKHU SHDFHIXO SHRSOH WR
SLHFHV :RUVH VWLOO SHDFHIXOSHRSOH DUH EHLQJ EUXWDOO\ IRUFHGWRSRLVRQ
DQGWHDURWKHUSHDFHIXOSHRSOHWRSLHFHV
7KH EODPH IRU WKLV LQVWLJDWHG PDVV PXUGHU GRHV QRW IDOO RQ WKH
H[HFXWRUV EXW RQ WKH LQVWLJDWRUV ,Q GHPRFUDWLF VWDWHV WKHVH LQVWLJDWRUV
DUHWKHSURZDUSDUOLDPHQWDULDQVDQGLQGLUHFWO\WKHLUYRWHUV7KHUHIRUH
DQ\RQHZKRLVDIUDLGWRFRPPLWPXUGHUVKRXOGWKLQNWZLFHDERXWZKRP
KHVHQGVWRSDUOLDPHQW
 1(:+(52,60

7
PRQRSRO\RQKHURLVP
KH UHQHZDO RI WKH KHUR LGHDO WKURXJK SDFLILVP
VKDWWHUV WKH PDLQ ZHDSRQ RI PLOLWDULVW SURSDJDQGD
)RU QRWKLQJ JLYHV PLOLWDULVP JUHDWHU SRZHU WKDQ D

3DFLILVPZRXOGFRPPLWVXLFLGHE\ILJKWLQJWKHKHURLFLGHDOKHZRXOG
ORVH DOO KLV YDOXDEOH IROORZHUV ߟ IRU WKH UHYHUHQFH IRU KHURLVP LV WKH
PHDVXUHRIKXPDQQREOHQHVV
7KH NQRZOHGJH WKDW WKH KHURLVP RI &KULVW LV D KLJKHU IRUP RI
HYROXWLRQ WKDQ WKH KHURLVP RI $FKLOOHV PXVW SHQHWUDWH ߟ DQG WKDW WKH
SK\VLFDOKHURHVRIWKHSDVWDUHRQO\WKHSUHFXUVRUVRIWKHPRUDOKHURRI
WKHIXWXUH
1RKRQHVWSDFLILVWZRXOGWU\WRNLOOWKHKHURLVPRIPHQZKRKDYHSXW
WKHLUOLYHVRQWKHOLQHIRUWKHLULGHDOVEH\RQGPDQGDWRU\PLOLWDU\VHUYLFH
ZKR KDYH YROXQWDULO\ VHW DVLGH WKHLU IDPLO\ߥV KDSSLQHVV WKHLU FRPIRUW
VDIHW\DQGKHDOWKWRIXOILOOWKHLUGXW\7KHLUKHURLVPLVQRWDIIHFWHGE\WKH
TXHVWLRQ RI ZKHWKHU LW RULJLQDWHG IURP IDOVH RU FRUUHFW DVVXPSWLRQV
1RWKLQJZRXOGEHPHDQHUWKDQWKHPRFNHU\RIWKLVW\SHRIKHURLVP
7KHRSSRVLWHRI WKRVHKHURHV DUHWKHGHPDJRJXHVZKR SURPRWHZDU
LQDVVHPEOLHVHGLWRULDORIILFHVDQGSDUOLDPHQWVDQGWKHQIDUIURPWKH
IURQWPDNHXVHRIVXFKKHURLVP
7KH DWWHPSW E\ VRPH PLOLWDULVWV WR PRQRSROL]H KHURLVP IRU WKH ZDU
SDUW\ LV MXVW DV GLVKRQHVW DV WKH DWWHPSW E\ VRPH QDWLRQDOLVWV WR
PRQRSROL]HWKHQDWLRQDOVSLULW
%HFDXVH ZKRHYHU ZDQWV WR SUHVHUYH KLV SHRSOH IURP WKH JUHDWHVW
FDWDVWURSKHLQZRUOGKLVWRU\LVDWOHDVWDVSDWULRWLFDVWKHRQHZKRKRSHV
IRUQHZSRZHUWKURXJKDYLFWRULRXVZDUWKHIRUPHULVEXLOGLQJRQHUURU
WKHODWWHURQWUXWK
7RGD\ WKHUH DUH VRPH (XURSHDQ FRXQWULHV ZKHUH LW LV PRUH OLIH
WKUHDWHQLQJWRILJKWIRU SHDFHWKDQIRU ZDULQWKHVHFRXQWULHVSDFLILVWV
SURYHDJUHDWHUKHURLFFRXUDJHWKDQZDUPRQJHUV
7KHPRVWVHULRXVDQGXQMXVWLQVXOWWRDQDWLRQLVZKHQDUDQNVXFKDV
WKH UDQN RI RIILFHU PRQRSROL]HV WKH KHURLF FKDUDFWHU EHFDXVH WKHUH LV
KHURLVP LQ HYHU\ SURIHVVLRQ TXLHW DQG JUHDW KHURLVP ZLWKRXW IDPH
ZLWKRXW URPDQFH DQG ZLWKRXW D JOLWWHULQJ ID©DGH WKH KHURLVP RI ZRUN
DQGPLQGWKHKHURLVPRIPRWKHUKRRGWKHKHURLVPRIFRQYLFWLRQ
$QG ZKRHYHU VWXGLHV WKH ELRJUDSKLHV RI JUHDW DUWLVWV WKLQNHUV
UHVHDUFKHUV LQYHQWRUV DQG SK\VLFLDQV ZLOO XQGHUVWDQG WKDW WKHUH LV
KHURLVPRWKHUWKDQWKDWRIZDUULRUVDQGDGYHQWXUHUV
(YHU\RQHLVDKHURZKRVDFULILFHVKLVRZQLQWHUHVWIRUKLVLGHDOWKH
JUHDWHUWKHVDFULILFHWKHJUHDWHUWKHKHURLVP
+HZKRLVQRWDIUDLGLVQRWKHURLFEXWXQLPDJLQDWLYH2QO\KHDFWV
KHURLFDOO\ZKRRYHUFRPHVKLVIHDUIRUWKHVDNHRIKLVLGHDOWKHJUHDWHU
WKHIHDUWKHJUHDWHUKLVRYHUFRPLQJDQGKHURLVP
(XURSHKDVIUHHGLWVHOIIURPWKHUXOHRIIHXGDOLVPߟEXWQRWIURPWKH
UXOH RI IHXGDO YDOXHV $V D UHVXOW WKH KHURLF LGHDO KDV EHFRPH MXVW DV
XQWLPHO\DQGURWWHQDVWKHFRQFHSWRIKRQRU2QO\DUHQHZDOFDQVDYHLW
7KH KRQRU RI D KXPDQ EHLQJ DQG RI D QDWLRQ VKRXOG EH GHWHUPLQHG
LQGHSHQGHQWIURPIRUHLJQDFWLRQDQGEHGHWHUPLQHGVROHO\E\WKHLURZQ
DFWLRQV
7KH SULQFLSDO PXVW SUHYDLO WKDW WKH KRQRU RI D QDWLRQ FDQ QHYHU EH
YLRODWHGE\LWVIODJEHLQJORZHUHGE\GUXQNVVRPHZKHUHEXWRQO\E\WKH
IDFW WKDW LWV MXGJHV DUH SDUWLVDQ WKHLU RIILFLDOV FDQ EH EULEHG DQG WKHLU
VWDWHVPHQ GRQߥW NHHS WKHLU ZRUG WKDW LW EDQLVKHV RU PXUGHUV LWV EHVW
VRQV SURYRNHV ZHDNHU QHLJKERUV RSSUHVVHV PLQRULWLHV QHJOHFWV LWV
REOLJDWLRQVDQGEUHDNVLWVDJUHHPHQWV
7KURXJK WKLV QHZ FRGH RI KRQRU DOOWKH TXDUUHOV WKDW GLYLGHQDWLRQV
DQG GULYH WKHP WR ZDUV ZLOO QDWXUDOO\ FHDVH IRU HYHU\ QDWLRQ ZLOO WKHQ
FRQVLGHULWWKHLUKRQRUWRGRVRPHWKLQJIRURWKHUVߟQRWWRKRQRUWKHP
EXW WR SUHVHUYH RU UHVWRUH WKHLU RZQ QDWLRQDO KRQRU 6DWLVIDFWLRQ RI WKLV
FRGHFDQWKHQHDVLO\EHGHWHUPLQHGE\DUELWUDWLRQ
3DFLILVPPXVWHGXFDWHSUHVHQWDQGIXWXUHHGXFDWLRQVLQWKHKHURLVP RI
FRQYLFWLRQ /LHV DQG FRZDUGLFH ZHUH WR EODPH IRU WKH RXWEUHDN RI WKH
ZDU WKH\ QRXULVKHG DQG VXVWDLQHG LW DQG ILQDOO\ SXW WKHLU VWDPS RQ
SHDFH DV ZHOO 7KDW LV ZK\ WKH ILJKW DJDLQVW OLHV LV DOVR D ILJKW DJDLQVW
ZDU+HURLVPRISHDFHEHFRPHVKHURLVPRIWKHPLQGRIFRQYLFWLRQVHOI
FRQWURORQO\WKHQFDQLWWULXPSKRYHUWKHKHURLVPRIWKHPLOLWDULVWV
 7KLVKHURLVPRISHDFHLVPRUHGLIILFXOWDQGUDUHUWKDQWKDWRIZDU,WLV
KDUGHU WR GLUHFW RQHߥV SDVVLRQV WKDQ RQHߥV WHDP KDUGHU WR GLVFLSOLQH
RQHߥV RZQ FKDUDFWHU WKDQ DQ DUP\ RI UHFUXLWV $QG PDQ\ ZKR FRXOG
HDVLO\UXQ DED\RQHWLQWRWKHERG\ RI DIRHGR QRWILQGWKHFRXUDJHWR
DGPLWWKHLUFRQYLFWLRQVWRDIULHQG7KLVPRUDOFRZDUGLFHLVWKHVRLOIRU
DOO GHPDJRJ\ LQFOXGLQJ WKH PLOLWDULVWLF RXW RI IHDU RI DSSHDULQJ
FRZDUGO\ PLOOLRQV WRGD\ GHQ\ WKHLU LQQHU SDFLILVP SUHIHUULQJ WR EH
FRZDUGO\UDWKHUWKDQDSSHDUFRZDUGO\
7KHYLFWRU\RIWKHSHDFHLGHDLVLQWLPDWHO\UHODWHGWRWKHWULXPSKRI
PRUDO KHURLVP ZKLFK LV ZLOOLQJ WR VDFULILFH HYHU\WKLQJ EXW LWV
FRQYLFWLRQ DQG WR NHHS LWVHOI SXUH DJDLQVW DOO DWWHPSWV RI SHUVXDVLRQ
H[WRUWLRQDQGEULEHU\LQDQLPSXUHWLPH
6XFKSHDFHKHURHVVKRXOGEHRUJDQL]HGLQWRDYROXQWDU\SHDFHDUP\
LQDOO(XURSHDQQDWLRQV
7KLVDUP\RISHDFHVKRXOGEHUHFUXLWHGIURPKHURHVZKRUHMHFWZDUDV
D EDUEDULF DQG QRQVHQVLFDO PHDQV RI SROLWLFV DQG DV DQ HQHP\ RI
KXPDQLW\ DQG ZKR DUH DOZD\V SUHSDUHG WR VDFULILFH IRU WKHLU SDFLILVW
EHOLHIV
)LUVW WKHVH ZDUULRUV RI SHDFH VKRXOG EH SURSDJDQGLVWV DQG DJLWDWRUV
ZKR VSUHDG WKHLU LGHDV WR WKH PLOOLRQV ZKR ZDQW SHDFH %XW WKH SHDFH
DUP\PXVWEHDOVRUHDG\WRPDWFKDWWKHFUXFLDOPRPHQWDJDLQVWWKHZDU
DQGWRVDYHSHDFHWKURXJKLWVDFWLYHLQWHUYHQWLRQ
$W WKH IRUHIURQW RI WKLV DUP\ VKRXOG EH PHQ ZKR FRPELQH D
VWDWHVPDQOLNHLQVLJKWZLWKXQEHQGLQJDQGXQZDYHULQJZLOOIRUSHDFH
2QO\LIVXFKOHDGHUVDUHDWWKHKHDGRIVXFKILJKWHUV(XURSHFDQKRSH
WRQHYHUEHRYHUUXQDQGSRXQGHGE\ZDUDJDLQ