Review 22.2 FINAL

5HYLHZ

5IF +PVS OBM P G %S BN BU VS HZ 1VCMJTIFE CZ -J UFSBS Z . BOBHFS T BOE % SBNBUVSHT PG U IF "N FS JDBT

*44/

7KH (OOLRWW +D\HV $ZDUG

)URP 'HQYHU WR *XOX :LWK 7KDQNV WR /\QQ 1RWWDJH E\ 'RXJODV /DQJZRUWK\

/0'$ &RQIHUHQFH .H\QRWH 6SHHFK

/HDUQLQJ WR 6SHDN $PHULFDQ $ :ULWHU·V -RXUQH\ E\ 3HDUO &OHDJH

0LFKDHO 0DUN &KDPHUV· *KRVW /LJKW $Q ,QWURGXFWRU\ +DQGERRN IRU 'UDPDWXUJ\ 5HYLHZHG E\ -DQH %DUQHWWH DQG -XOHV 2GHQGDKO -DPHV

&UHDWLYH 3URFHVV LQ 7KHDWULFDO 7UDQVODWLRQ $Q ,QWHUYLHZ ZLWK $GDP 9HUVpQ\L E\ +HFWRU *DU]D

3HHU 5HYLHZHG $UWLFOH

&URLVDGHV LQ 4XpEHF 2Q WKH 6HPLRWLFV RI &RQWHPSRUDU\ )UHQFK 'UDPDWXUJLH E\ 6FRWW ' 7D\ORU

7PMVNF *TTVF 8JOUFS

1)050 $:/5)*" 403&--&

1)050 $:/5)*" 403&--& 1)050 $"30-*/& )"7&63

(',725ҋ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·V (OOLRWW +D\HV $ZDUG DFFHSWDQFH VSHHFK ZKLFK GHVFULEHV KLV H[WUDRUGL QDU\ ZRUN RQ WKH 'HQYHU &HQWHU 7KHDWUH &RPSDQ\·V SURGXFWLRQ RI 5XLQHG E\ /\QQ 1RWWDJH 'RXJ UHDFKHG RXW WR D ORFDO QRQ SURÀW IRU KHOS XQGHUVWDQGLQJ WKH FRQWH[W RI WKH SOD\ 7KDW JHVWXUH WXUQHG LQWR D PRQWKV ORQJ FROODERUDWLRQ FXOPLQDWLQJ LQ D WULS WR 8JDQGD IRU D ORFDO WKHDWUH IHVWLYDO

-XOHV 2GHQGDKO -DPHV DQG -DQH %DUQHWWH HQJDJH LQ D OLYHO\ FRQ YHUVDWLRQDO UHYLHZ RI 0LFKDHO 0DUN &KHPHUV· UHFHQW ERRN *KRVW /LJKW $Q ,QWURGXFWRU\ +DQGERRN IRU 'UDPDWXUJ\ D VLJQLÀFDQW FRQWULEXWLRQ WR GUDPDWXUJ\ LQ HGXFDWLRQDO VHWWLQJV +HFWRU *DU]D LQWHUYLHZV $GDP 9HUVpQ\L DERXW KLV RQOLQH MRXUQDO 7KH 0HUFXULDQ DQG WKH WZR GLVFXVV LQ FRQFUHWH WHUPV ERWK WKH WKH RU\ DQG DUWLVWU\ RI WUDQVODWLRQ IRU WKH VWDJH :H FRQFOXGH WKLV LVVXH ZLWK DQRWKHU SHHU UHYLHZHG DUWLFOH WKLV WLPH E\ 6FRWW 7D\ORU RI :HVWHUQ :DVKLQJWRQ 8QLYHUVLW\ ,Q LW KH H[SORUHV WUHQGV LQ FRQWHPSRUDU\ )UHQFK GUDPDWXUJLH WKURXJK D FDVH VWXG\ RI D 4XpEHTXRLV SURGXFWLRQ RI 0LFKHO $]DPD·V SOD\ &URLVDGHV $V DOZD\V ZH ORRN IRUZDUG WR UHFHLYLQJ \RXU UHVSRQVHV WR WKH ZRUN DQG WR KHDULQJ IURP WKRVH RI \RX ZKR DUH LQWHUHVWHG LQ FRQ WULEXWLQJ WR RXU RQJRLQJ FRQYHUVDWLRQ ZLWK DQ HVVD\ PDQLIHVWR DUWLFOH SURGXFWLRQ QRWHERRN RU DQ\WKLQJ HOVH \RX WKLQN PLJKW EH XVHIXO RU LQWHUHVWLQJ WR RXU DXGLHQFH 6HQG LQTXLULHV WR PH DW HGLWRU#OPGD RUJ

)LQDOO\ , ZLVK WR H[SUHVV SXEOLFO\ P\ WKDQNV WR /D\RXW (GLWRU 'HEUD &DUGRQD $VVRFLDWH (GLWRU -DQLQH 6REHFN 0DUWLQH .HL :H DUH WKULOOHG WR SXEOLVK SOD\ZULJKW 3HDUO &OHDJH·V NH\QRWH *UHHQ 5RJHUV -RVLDQH 'XERLV DQG 7\DQQDK 3ULFH IRU DOO WKHLU KHOS VSHHFK IURP /0'$·V DQQXDO FRQIHUHQFH LQ $WODQWD ODVW VXPPHU ,Q JHWWLQJ WKLV LVVXH ÀQLVKHG DW ODVW LW 0V &OHDJH VSHDNV SRHWLFDOO\ DERXW WKH LQWHUVHFWLRQ RI LGHQWLW\ FRPPXQLW\ DUW DQG DFWLYLVP RI KHU UHFHQW VWUXJJOH WR EHFRPH DQ 6&2 $PHULFDQ ZULWHU ZKR WHOOV WKH ´VWRULHV RI D QHZ $PHULFD µ

5HYLHZ (',725 6\GQH\ &KHHN 2·'RQQHOO 8QLYHUVLW\ RI 8WDK /$<287 (',725 'HEUD &DUGRQD &ODVVLFDO 7KHDWUH RI +DUOHP $662&,$7( (',725 -DQLQH 6REHFN %ULJKDP <RXQJ 8QLYHUVLW\ (',725,$/ %2$5' /RXLVH (GZDUGV 1RUWKZHVWHUQ 8QLYHUVLW\ '' .XJOHU 6LPRQ )UDVHU 8QLYHUVLW\ -RKQ /XWWHUELH 6WRQ\ %URRN 8QLYHUVLW\ 6\GQp 0DKRQH 8QLYHUVLW\ RI ,RZD 6KHOOH\ 2UU 6DQ 'LHJR 6WDWH 8QLYHUVLW\ *HRII 3URHKO 8QLYHUVLW\ RI 3XJHW 6RXQG -XGLWK 5XGDNRII <RUN 8QLYHUVLW\ 0LFKHOH 9RODQVN\ :DVKLQJWRQ &ROOHJH *DYLQ :LWW &HQWHUVWDJH

5HYLHZ

/0'$ +4 32 %R[ 3$&& 1HZ <RUN 1<

/0'$ &$1$'$ 7RURQWR 21 0 $ + &DQDGD

5HYLHZ LV SXEOLVKHG WZLFH \HDUO\ E\ /LWHUDU\ 0DQDJHUV DQG 'UD PDWXUJV RI WKH $PHULFDV $UWLFOHV VKRXOG FRQIRUP WR 0/$ IRUPDW EXW ZH DUH OHVV SLFN\ DERXW UHYLHZV PDQLIHVWRHV LQWHUYLHZV DQG RWKHU VKRUW IRUP VXEPLVVLRQV 6SHOOLQJ GLIIHUHQFHV EHWZHHQ &DQD GLDQ DQG 8 6 (QJOLVK ZLOO EH SUHVHUYHG $V SHU WKH RIÃ&#x20AC;FLDO QDPH RI RXU RUJDQL]DWLRQ ´GUDPDWXUJµ ZLOO EH WKH GHIDXOW VSHOOLQJ RI WKLV FRQWHQWLRXV WHUP EXW ZH ZLOO SUHVHUYH WKH VSHOOLQJ RI DQ\ FRQWULEX WRU ZKR SUHIHUV ´GUDPDWXUJH µ &RPSOHWH HGLWRULDO JXLGHOLQHV FDQ EH IRXQG RQOLQH DW /0'$·V ZHEVLWH ,QTXLULHV IURP SURVSHFWLYH FRQWULEXWRUV DUH ZHOFRPH $OO LQTXLULHV VKRXOG EH GLUHFWHG WR 6\GQH\ &KHHN 2·'RQQHOO HGLWRU#OPGD RUJ 5HYLHZ 9ROXPH QXPEHU :LQWHU 7KLV ZRUN LV OLFHQVHG XQGHU WKH &UHDWLYH &RPPRQV $WWULEXWLRQ 1RQ &RPPHUFLDO 1R'HULYV 8QSRUWHG /LFHQVH 7R YLHZ D FRS\ RI WKLV OLFHQVH YLVLW KWWS FUHDWLYHFRPPRQV RUJ OLFHQVHV E\ QF QG

(//,27 +$<(6 $:$5' $&&(37$1&( 63((&+

'SPN %FOWFS UP (VMV 8JUI 5IBOLT UP -ZOO /PUUBHF 'RXJODV /DQJZRUWK\ $WODQWD -XQH 7KLV LV WKH VWRU\ RI P\ WXPEOH GRZQ D GUDPDWXUJLFDO UDEELW KROH '28*/$6 /$1*:257+< LV FXUUHQWO\ WKH /LWHUDU\ WKDW WR P\ VXUSULVH GHSRVLWHG PH RQ WKH RWKHU VLGH RI WKH SODQHW 0DQDJHU DQG 'UDPDWXUJ DW WKH 'HQYHU &HQWHU 7KHDWUH &RPSDQ\ 3ULRU WR 'HQYHU 'RXJODV VHUYHG DV 'UD ,Q )HEUXDU\ WKH 'HQYHU &HQWHU 7KHDWUH &RPSDQ\³WKH WKH PDWXUJ DQG 'LUHFWRU RI 3OD\ 'HYHORSPHQW DW 0F&DUWHU DWUH ZKHUH , ZRUN³EHJDQ UHKHDUVDOV IRU LWV SURGXFWLRQ RI /\QQ 7KHDWUH LQ 3ULQFHWRQ 1- IRU WZR \HDUV DQG 'LUHFWRU RI 1RWWDJH·V EHDXWLIXOO\ ZULWWHQ EUXWDO DQWL ZDU GUDPD 5XLQHG $ERXW /LWHUDU\ 'HYHORSPHQW DQG 'UDPDWXUJ\ DW WKH 2UHJRQ VL[ PRQWKV SULRU WR WKDW , ZDV LQWURGXFHG WR .DUHQ 6XJDU D 'HQYHU 6KDNHVSHDUH )HVWLYDO 26) IRU VHYHQ :KLOH DW 26) ZRPDQ ZKR UXQV D QRQ SURÀW WKDW KHOSV HPSRZHU ZRPHQ LQ SRVW KH GHYHORSHG DQ DGDSWDWLRQ RI 'XPDVҋ 7KH 7KUHH 0XV FRQÁLFW 8JDQGD WKURXJK PLFUR ORDQV DQG HGXFDWLRQ /LWWOH GLG , NHWHHUV ZLWK /LQGD $OSHU DQG 3HQQ\ 0HWURSXORV D QHZ NQRZ WKDW WKDW PHHWLQJ ZRXOG IXQGDPHQWDOO\ FKDQJH WKH FRXUVH RI PXVLFDO 7UDF\ҋV 7LJHU ZLWK WKH VDPH WHDP DQG FRP P\ GUDPDWXUJ\ RQ 1RWWDJH·V SOD\ DQG XOWLPDWHO\ WDNH PH DOO WKH SRVHU 6WHUOLQJ 7LQVOH\ DQG D QHZ WUDQVODWLRQ RI %UHFKWҋV ZD\ WR $IULFD 7KH *RRG 3HUVRQ RI 6]HFKXDQ 'RXJODV KDV WUDQVODWHG SOD\V IURP WKH *HUPDQ ZKLFK LQFOXGH 6SULQJ $ZDN 7KH FROODERUDWLRQ EHWZHHQ WKH 'HQYHU &HQWHU DQG :RPHQ·V *OREDO HQLQJ E\ )UDQN :HGHNLQG DQG 7KH 3ULQFH RI +RPEXUJ (PSRZHUPHQW )XQG :*() 6XJDU·V RUJDQL]DWLRQ ZDV EXLOW RQ D 3HQWKHVLOHD DQG $PSKLWU\RQ E\ +HLQULFK YRQ .OHLVW VROLG IRXQGDWLRQ $V DQ H[SHUW LQ WKH SDUW RI WKH ZRUOG LQ ZKLFK WKH +LV WUDQVODWLRQ RI *RHWKHҋV )DXVW ZDV SURGXFHG LQ 1HZ SOD\ LV VHW .DUHQ FDPH WR WKDW ÀUVW PHHWLQJ ZLWK D JRRG GRVH RI VNHS <RUN &LW\ E\ 7DUJHW 0DUJLQ 7KHDWUH WLFLVP :KDW GLG ZH ZDQW" +RZ DXWKHQWLF ZDV WKLV GUDPD LQ SRUWUD\ LQJ D ÀHQGLVKO\ FRPSOH[ DQG YLROHQW ZDU" )RUWXQDWHO\ RQFH VKH UHDG 5XLQHG VKH ORYHG LW LPSUHVVHG QRW RQO\ ZLWK WKH HPRWLRQDO WUXWK RI WKH SOD\ EXW DOVR WKH GHSWK DQG DFFXUDF\ RI 1RWWDJH·V UHVHDUFK 7KH QH[W SKDVH RI RXU FROODERUDWLRQ ZDV WR GHWHUPLQH KRZ 6XJDU ZKR ZRUNV ZLWK ZRPHQ LQ *XOX 8JDQGD D UHJLRQ WKDW KDV EHHQ FRQÁLFW IUHH IRU VL[ \HDUV FRXOG KHOS PH FRQWH[WXDOL]H WKH SOD\ IRU RXU DUWLVWV DQG DXGLHQFH 6KH SRLQWHG RXW WKDW WKH ZDU WKDW LV VWLOO UDJLQJ LQ WKH 'HPRFUDWLF 5HSXEOLF RI WKH &RQJR ZKHUH 5X LQHG LV VHW KDG GHYDVWDWHG QRUWKHUQ 8JDQGD IRU RYHU WZHQW\ \HDUV 7KH ZRPHQ RI 8JDQGD KDYH KDG WKH SDVW KDQGIXO RI \HDUV WR VWDUW UHEXLOGLQJ WKHLU OLYHV 7KH KDUGVKLSV DQG YLROHQFH WKDW 1RWWDJH·V FKDUDFWHUV ZHUH IDFLQJ KDG EHHQ VXIIHUHG E\ WKH ZRPHQ .DUHQ KHOSV +HU FOLHQWV FRXOG VSHDN KRQHVWO\ WR DOO WKH LVVXHV LQ WKH SOD\ EXW IURP D KHDOLQJ SHUVSHFWLYH 7KLV FROODERUDWLRQ KDG WKH SRWHQ WLDO WR WDNH D GLUH VLWXDWLRQ DQG RIIHU D GHJUHH RI KRSH , KDG IRXQG P\ ZD\ LQ 5HYLHZ

FRQYHUVDWLRQ EURXJKW WKH SOD\ WR OLIH LQ D ZD\ WKDW DOO WKH ERRN UHVHDUFK LQ WKH ZRUOG FRXOG QHYHU GR %XW QRQHWKHOHVV , SUHSDUHG DQ SDJH UHVHDUFK SDFNHW IHHOLQJ LW·V EHVW WR DSSURDFK FRQWH[W IURP D YDULHW\ RI DQJOHV

1)050 $:/5)*" 403&--&

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´7KH +LJK &RVW RI &ROWDQµ WR KLJKOLJKW WKLV LVVXH 'RXJODV /DQJZRUWK\ SRVLQJ ZLWK 7KH (OOLRWW +D\HV $ZDUG

%XW WKHUH·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

$ORQJ WKH ZD\ , KDG EHHQ KHDULQJ ELWV DQG SLHFHV RI ZKDW NLQGV RI RXWUHDFK RWKHU WKHDWUHV ZHUH GRLQJ DURXQG WKHLU SURGXFWLRQV RI 5XLQHG $W ODVW \HDU·V /0'$ FRQIHUHQFH LQ 'HQYHU , FKDLUHG D SDQHO WKDW H[SORUHG WKLV IXUWKHU , ZDV WUXO\ LPSUHVVHG E\ WKH ZLGH DUUD\ RI ERWK ORFDO DQG LQWHUQDWLRQDO HIIRUWV GUDPDWXUJV DFURVV WKH 8QLWHG 6WDWHV DQG &DQDGD KDG ODXQFKHG DURXQG WKH SOD\ :RUNLQJ ZLWK ORFDO &RQJROHVH FRPPXQLWLHV HQKDQFHG WDONEDFNV OHFWXUH VHULHV Ã&#x20AC;OPV³RQH WKHDWUH HYHQ KDG D . UXQ WR UDLVH IXQGV IRU ZRPHQ LQ WKH &RQJR

7KHQ WR IXOO\ FRPSOHWH WKH FLUFOH WKH 'HQYHU &HQWHU VHQW PH WR $I ULFD WR DWWHQG WKH :*() GUDPD IHVWLYDO 7KH RQO\ DVVLJQPHQW ,Q 'HFHPEHU EHIRUH UHKHDUVDOV VWDUWHG .DUHQ EURXJKW WR 'HQYHU WKH WKHDWUH JDYH PH ZDV WR EORJ DERXW P\ H[SHULHQFH DQG SRVW LW RQ RQH RI KHU PRVW VXFFHVVIXO FOLHQWV *UDFH $NHOOR *UDFH KDG DO WKH 'HQYHU &HQWHU·V ZHEVLWH %HIRUH , OHIW WKDW 6HSWHPEHU , DOVR SUR UHDG\ VWDUWHG D QXPEHU RI VPDOO EXVLQHVVHV DQG ZDV SODQQLQJ WR SRVHG DQ DUWLFOH WR $PHULFDQ 7KHDWUH PDJD]LQH DERXW P\ WULS DQG WKH\ UXQ IRU ORFDO RIÃ&#x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·V )UHQFK 7KLV HYHQW GRYHWDLOHG QLFHO\ ZLWK WKH SLHFH RI WKH WULS ZDV WKH GUDPD IHVWLYDO LWVHOI 7KH WKHPH WKDW \HDU ZDV 'HQYHU &HQWHU·V :RPHQ·V 9RLFHV )XQG DQ HQGRZPHQW WR VXS WKH ULJKW RI ZRPHQ WR RZQ ODQG &XUUHQWO\ WKH FRQVWLWXWLRQ DOORZV LW SRUW WKH ZRUN RI ZRPHQ SOD\ZULJKWV DQG GLUHFWRUV 6LQFH *UDFH EXW WULEDO FXVWRPV SURKLELW LW 7ZR GD\V EHIRUH WKH HYHQW :RPHQ·V ZRXOGQ·W EH DURXQG GXULQJ WKH UHKHDUVDO SHULRG , Ã&#x20AC;OPHG DQ LQWHU *OREDO KHOG D WRZQ KDOO PHHWLQJ WKDW ZDV LQIRUPDWLYH DQG DW WLPHV YLHZ ZLWK KHU IRRWDJH WKDW , FRXOG VKDUH ZLWK WKH DFWRUV ZKHQ WKH\ FRQIURQWDWLRQDO ,W ZDV FOHDU WKDW WKLV ZDV D KRW EXWWRQ LVVXH DUULYHG LQ )HEUXDU\ 7KH SOD\V ZULWWHQ E\ :*() FOLHQWV WRRN WKH IRUP RI DJLW SURS 2QH RI WKH Ã&#x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Ã&#x20AC;FXOW DQG DW WLPHV DQG ZRPHQ DQG NHHS WKHP HQJDJHG ZLWK WKH SOD\ XQWLO LWV PHV SDLQIXO TXHVWLRQV ZKLFK WKH ZRPHQ DQVZHUHG IUHHO\ DQG ZLWK JUHDW VDJH KDG EHHQ PDGH ,W ZDV D UHYHODWLRQ WR VHH KRZ HIIHFWLYHO\ KRQHVW\ 7KH VHVVLRQ ODVWHG DERXW DQ KRXU DQG JDYH WKH DFWRUV D WKHVH ZRPHQ ZLWK QR IRUPDO WKHDWUH WUDLQLQJ EXW VWHHSHG LQ WKH VWURQJ SHUVRQDO FRQQHFWLRQ WR WKH PDWHULDO WKDW ZRXOG XQGHUSLQ WUDGLWLRQV RI VWRU\WHOOLQJ ZHUH XVLQJ GUDPD DV D YLEUDQW IRUP RI WKHLU SHUIRUPDQFHV 1RWWDJH·V SOD\ LV VWDUNO\ UHDOLVWLF DQG WKLV SXEOLF GLVFRXUVH 5HYLHZ

, FDPH EDFN WR WKH 6WDWHV UHLQYLJRUDWHG DQG UHDG\ WR WHOO P\ VWRU\ %DVHG RQ P\ EORJ WKH $PHULFDQ 7KHDWUH DUWLFOH DSSHDUHG LQ WKH )HEUXDU\ LVVXH ZKLFK ZDV GHYRWHG WR JOREDO FLWL]HQVKLS ,W ZDV GLVWULEXWHG WR WKH 'HQYHU &HQWHU ERDUG RI GLUHFWRUV DV ZHOO DV DWWHQGHHV RI WKH &RORUDGR 1HZ 3OD\ 6XPPLW 2YHU WKH SDVW IHZ \HDUV , KDYH EHFRPH PRUH DQG PRUH LQWHUHVWHG LQ FRQQHFWLQJ GUDPDWXUJLFDOO\ ZLWK RXU ORFDO FRPPXQLW\ ,Q SDUWQHULQJ ZLWK .DUHQ 6XJDU DQG WKH :RPHQ·V *OREDO (PSRZHUPHQW )XQG , ZDV DEOH WR XVH D ORFDO UHVRXUFH WR JR JOREDO , ZRXOG QHYHU KDYH EH OLHYHG WKDW P\ GHVLUH WR SURYLGH GUDPDWXUJLFDO FRQWH[W ZRXOG UHVXOW LQ P\ WUDYHOLQJ WR $IULFD 7KH 'HQYHU &HQWHU·V UHODWLRQVKLS ZLWK :*() DQG WKH ZRPHQ RI *XOX FRQWLQXHV 1H[W )HEUXDU\ ZH KRSH WR EULQJ RQH RI WKH 8JDQ GDQ SOD\ZULJKWV WR 'HQYHU IRU RXU 1HZ 3OD\ 6XPPLW .DUHQ LV HYHQ KRSLQJ WR KHOS *XOX EXLOG LWV Ã&#x20AC;UVW SHUPDQHQW WKHDWUH VWUXFWXUH DV ZHOO DV KHOS RWKHU 1*2V VWDUW WKHLU RZQ GUDPD IHVWLYDOV 6KH·V DVNHG PH WR EH LQYROYHG LQ ERWK HIIRUWV 2K \HV ODVW PRQWK *UDFH $NHOOR DJDLQ YLVLWHG 'HQYHU DQG ZDV DEOH WR YLHZ DUFKLYDO IRRWDJH RI RXU SURGXFWLRQ RI 5XLQHG FORVLQJ WKDW ORRS /RRNLQJ EDFN , JXHVV WKH ELJJHVW OHVVRQ , OHDUQHG LV WKDW WKHUH DUH ULFKHV WR EH PLQHG E\ H[WHQGLQJ \RXU GUDPDWXUJLFDO WHQWDFOHV LQWR \RXU ORFDO FRPPXQLW\ :LWK DQ RSHQ PLQG DQG D ZLOOLQJQHVV WR OHDUQ \RX PD\ Ã&#x20AC;QG \RXUVHOI OLNH , GLG WUDYHOLQJ GRZQ URDGV \RX FRXOG QHYHU KDYH IRUHVHHQ

5HYLHZ

/HDUQLQJ WR 6SHDN $PHULFDQ $ :ULWHUҋV -RXUQH\ 3HDUO &OHDJH .H\QRWH 5HPDUNV 'HOLYHUHG DW WKH $QQXDO &RQIHUHQFH RI WKH /LWHUDU\ 0DQDJHUV DQG 'UDPDWXUJV RI WKH $PHULFDV $OOLDQFH 7KHDWUH $WODQWD *$ -XQH 3($5/ &/($*( LV DQ $WODQWD EDVHG SOD\ZULJKW DQG QRYHOLVW +HU SOD\V LQFOXGH 7KH 1DFLUHPD 6RFLHW\ )O\LQҋ :HVW %OXHV IRU DQ $ODEDPD 6N\ %RXUERQ DW WKH %RUGHU DQG $ 6RQJ IRU &RUHWWD 6KH KDV ZULWWHQ HLJKW QRYHOV LQFOXGLQJ :KDW /RRNV /LNH &UD]\ RQ DQ 2UGL QDU\ 'D\ ZKLFK ZDV DQ 2SUDK %RRN &OXE VHOHFWLRQ DQG VSHQW QLQH ZHHNV RQ WKH 1HZ <RUN 7LPHV EHVWVHOOHU OLVW 3HDUO DQG KHU KXVEDQG ZULWHU =DURQ : %XUQHWW -U FROODERUDWHG RQ WKH DZDUG ZLQQLQJ SHUIRUPDQFH VHULHV /LYH DW &OXE =HEUD IRU \HDUV ,Q 3HDUO ZDV D VSHHFKZULWHU IRU WKH 0D\QDUG -DFNVRQ FDPSDLJQ DQG ODWHU VHUYHG DV KLV ÀUVW SUHVV VHFUHWDU\

7KLQNLQJ DERXW FRPLQJ KHUH WRGD\ , ZDV UHPLQGHG RI P\ IDWKHU ZKR ZDV DQ HDUQHVW \RXQJ VHPLQDU\ VWXGHQW LQ 'HFHPEHU RI +H GH OLYHUHG KLV À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ÀQDOO\ GUDJJHG KLPVHOI KRPH DQG VDW GRZQ KH FRXOGQ·W UHPHPEHU D VLQJOH ZRUG RI ZKDW KH KDG SUHDFKHG WKDW PRUQLQJ 1RW D ZRUG ,W ZDV DQ LPSRUWDQW OHVVRQ IRU D \RXQJ SUHDFKHU³QRW WR ZDVWH DQ RS SRUWXQLW\ WR VD\ VRPHWKLQJ PHDQLQJIXO DQG DV , WKLQN RI LW QRZ , KRSH WKDW WKH WKRXJKWV , VKDUH ZLWK \RX WRGD\ DUH LQ VRPH ZD\ D SDUW RI D ODUJHU FRQYHUVDWLRQ DERXW WKH UROH WKDW ZULWHUV FDQ DQG PXVW SOD\ LQ RXU FRXQWU\ DQG LQ RXU OLYHV ,Q VRPH SDUWV RI WKH ZRUOG ZH ZRXOG QRW EH DOORZHG WR FRPH WR JHWKHU OLNH WKLV WR VKDUH LGHDV DERXW ZKDW LW PHDQV WR EH KXPDQ EHLQJV LQ DOO RXU ÀHUFHO\ ÁDZHG IDEXORXVQHVV ,Q VRPH SDUWV RI WKH ZRUOG ZULWHUV DUH FRQVLGHUHG GDQJHURXV DQG XQSUHGLFWDEOH FRP PLWWHG DV ZH DUH WR ORRNLQJ DW WKH WUXWK DV KDUG DV ZH SRVVLEO\ FDQ DQG WKHQ ÀQGLQJ D ZD\ WR FRPPXQLFDWH ZKDW ZH·YH VHHQ WR RWKHUV RI RXU NLQG 6RPHWLPHV DV SDUW RI WKLV SURFHVV ZULWHUV DOVR IHHO IUHH WR PDNH VXJ JHVWLRQV DERXW D EHWWHU ZD\ WR GR LW ZKDWHYHU LW LV IDOO LQ ORYH RUJD QL]H WKH FRPPXQLW\ DURXQG XV HQHUJL]H WKH FDPSXV ZH PRYH DURXQG

5HYLHZ

1)050 $:/5)*" 403&--&

6SULQJÀHOG 0DVVDFKXVHWWV RQ $SULO ZKHUH P\ IDWKHU KDG D FKXUFK DQG ZKHUH WKH DXWKRU VLJQHG D FRS\ RI KLV ERRN IRU P\ JUDQGIDWKHU ZKR ZDV YLVLW LQJ XV IURP 'HWURLW )RU $ % &OHDJH 0' ZLWK WKH VLQFHUH UHJDUGV RI /DQJVWRQ +XJKHV ,W ZRXOG EH DQRWKHU WZR \HDUV EHIRUH , ZDV ERUQ DQG DQRWKHU ÀYH EHIRUH P\ PRWKHU EHJDQ WR UHDG 7KH %LJ 6HD WR P\ VLVWHU DQG PH DW EHGWLPH OLNH RWKHU PRWK HUV UHDG IDLU\ WDOHV , FRPH IURP D IDPLO\ RI GHYRWHG UHDGHUV DQG D IDLU QXPEHU RI IUXVWUDWHG ZULWHUV ZKR KDYH ÀQDOO\ IRXQG WKHLU IXOO H[SUHVVLRQ LQ PH WKH À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·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·W KDSSHQ KHUH DQG IRU WKDW , DP FRQVFLRXV DQG JUDWHIXO DERYH P\ SLOORZ WKDW WR P\ WZR \HDU ROG H\H ORRNHG OLNH DQ HDJOH EHFDXVH WKLQJV FDQ FKDQJH IRU EHWWHU RU ZRUVH LQ D KHDUWEHDW EXW ZKLFK OHDG PH WR 1DWLYH $PHULFDQV ZKLFK OHDG PH WR 7HFXPVHK ,·P JHWWLQJ DKHDG RI P\VHOI ZKR LQ P\ VDJD ZDV VWURQJ DQG SDVVLRQDWH DQG GRRPHG E\ IDWH RU KLVWRU\ RU EDG NDUPD WR SUHVLGH DW WKH GHPLVH RI KLV SHRSOH D /LVWHQ WR WKH ZRUGV RI /DQJVWRQ +XJKHV SHFXOLDU FRPELQDWLRQ RI FKDUDFWHULVWLFV WKDW FRQWLQXHV WR LQWHUHVW PH DOO WKHVH \HDUV ODWHU /LIH LV D ELJ VHD )XOO RI PDQ\ ÀVK , KDYH DOZD\V NQRZQ , ZDV D ZULWHU 0\ HDUOLHVW PHPRU\ LV RI VQRZ , OHW GRZQ P\ QHWV WKH ZLQWHU RI P\ ÀUVW ELUWKGD\ , UHPHPEHU OHDQLQJ DJDLQVW WKH FROG $QG SXOO JODVV RI RXU IURQW GRRU ZRQGHULQJ ZKR KDG UHSODFHG WKH ZHDWKHUHG ZRRGHQ VODWV RI RXU SRUFK ZLWK D VSRWOHVV FDUSHW RI ZKLWH WKDW H[ ´0HORGUDPDWLF PD\EH LW VHHPV WR PH QRZ µ KH ZURWH WHQGHG IURP WKH WRS VWHS GRZQ WKH ZDONZD\ DQG XS WR WKH URRI RI P\ IDWKHU·V FDU SDUNHG DW WKH HQG RI LW , UHPHPEHU WKLQNLQJ WKDW EXW WKHQ LW ZDV OLNH WKURZLQJ D PLOOLRQ EULFNV RXW RI P\ KHDUW ZKDWHYHU LW ZDV ORRNHG VRIW &ROG ZDV VWLOO DQ DEVWUDFW LGHD D GLV ZKHQ , WKUHZ WKH ERRNV LQWR WKH ZDWHU , OHDQHG RYHU WKH UDLO WDQW ZLQG WKDW P\ PRWKHU JXDUGHG DJDLQVW ZLWK KDWV DQG JORYHV DQG RI WKH 6 6 0DORQH DQG WKUHZ WKH ERRNV DV IDU DV , FRXOG RXW VFDUYHV DQG ERRWV DQG EODQNHWV DQG EXQWLQJV DQG P\ IDWKHU ZDUP LQWR WKH VHD³DOO WKH ERRNV , KDG KDG DW &ROXPELD DQG DOO LQJ WKH FDU EHIRUH VKH EURXJKW WKH EDE\ RXW 7KDW ZDV PH WKH ERRNV , KDG ODWHO\ ERXJKW WR UHDG 7KH ERRNV ZHQW GRZQ RQWR WKH PRYLQJ ZDWHU LQ WKH GDUN RII 6DQG\ +RRN 7KHQ , <HDUV ODWHU , UHPHPEHUHG DOO WKDW ZKHQ P\ VRXWKHUQ ERUQ GDXJKWHU VWUDLJKWHQHG XS WXUQHG P\ IDFH WR WKH ZLQG DQG WRRN D GHHS WKHQ DJHG WZR ZDONHG XS WR KHU ÀUVW HYHU EDQN RI XSSHU 0LFKL EUHDWK , ZDV D VHDPDQ JRLQJ WR VHD IRU WKH ÀUVW WLPH³D VHD JDQ PLG ZLQWHU VQRZ DQG IHOO LQWR LW VPLOLQJ EURDGO\ $V ZH SXOOHG PDQ RQ D ELJ PHUFKDQW VKLS $QG , IHOW QRWKLQJ ZRXOG HYHU KHU RXW VSXWWHULQJ ZLWK VXUSULVH DQG LQGLJQDWLRQ P\ PRWKHU VDLG KDSSHQ WR PH DJDLQ WKDW , GLGQ·W ZDQW WR KDSSHQ , IHOW JURZQ ´, WKLQN VKH WKRXJKW LW ZDV JRLQJ WR EH VRIW µ 2I FRXUVH VKH GLG , D PDQ LQVLGH DQG RXW 7ZHQW\ RQH , ZDV WZHQW\ RQH WKRXJKW ZLSLQJ P\ GDXJKWHU·V IDFH JHQWO\ 'LGQ·W HYHU\ERG\" 3HDUO &OHDJH VSHDNLQJ DW WKH /0'$ &RQIHUHQFH DW $WODQWDҋV $OOLDQFH 7KHDWUH

:KHQ /DQJVWRQ +XJKHV ZURWH WKRVH ZRUGV LQ RQ WKH ÀUVW SDJH RI WKH ÀUVW YROXPH RI KLV OXPLQRXV DXWRELRJUDSK\ 7KH %LJ 6HD , ZDVQ·W HYHQ D JOHDP LQ P\ IDWKHU·V H\H ,W ZRXOG EH ÀYH \HDUV EHIRUH WKH ERRN ZHQW WKURXJK WKUHH SULQWLQJV LQFOXGLQJ D HGL WLRQ SXEOLVKHG RQ WKLQ \HOORZ SDSHU EHFDXVH RI ZDU UHVWULFWLRQV DQG DQRWKHU \HDU EHIRUH /DQJVWRQ·V ZDQGHULQJV EURXJKW KLP WR

, JUDGXDWHG IURP KLJK VFKRRO LQ ,W ZDV TXLWH D \HDU 8 6 )RUFHV LQ 9LHWQDP KRYHUHG DW 6WRNHO\ &DUPLFKDHO ZDV QDPHG &KDLU PDQ RI WKH 6WXGHQW 1RQYLROHQW &RRUGLQDWLQJ &RPPLWWHH SURPSWO\ XWWHUHG WKH ZRUGV %ODFN 3RZHU IURP WKH EDFN RI D ÁDWEHG WUXFN RQ D 0LVVLVVLSSL KLJKZD\ DQG FKDQJHG WKH FRXUVH RI WKH &LYLO 5LJKWV 0RYH PHQW IRUHYHU -XOLDQ %RQG ZDV GHQLHG D VHDW LQ WKH *HRUJLD +RXVH RI 5HYLHZ

5HSUHVHQWDWLYHV EHFDXVH RI KLV RSSRVLWLRQ WR WKH ZDU LQ 9LHWQDP ZKLFK 0DUWLQ /XWKHU .LQJ KDG DOUHDG\ GHQRXQFHG DV D ´VRUGLG PLOLWDU\ DG YHQWXUH µ 5REHUW :HDYHU EHFDPH WKH ÀUVW EODFN FDELQHW PHPEHU ZKHQ KH ZDV VZRUQ LQ DV 6HFUHWDU\ RI +RXVLQJ DQG 8UEDQ 'HYHORSPHQW DQG WKH ÀUVW :RUOG )HVWLYDO RI %ODFN $UW ZDV KHOG LQ 'DNDU 6HQHJDO

7RQL &DGH %DPEDUD DQG RWKHUV WRR QXPHURXV WR PHQWLRQ KHUH E\ QDPH³WKHVH ZULWHUV ZHUH WKH FROOHFWLYH OLWHUDU\ YRLFH RI D GLYHUVH EODFN FRPPXQLW\ WKDW ZDV LQ WKH WKURHV QRW RQO\ RI D GDQJHURXV SURORQJHG H[KDXVWLQJ DFWLYH VWUXJJOH IRU HTXDO ULJKWV DQG SURWHF WLRQV XQGHU WKH ODZ EXW DQ HTXDOO\ FKDOOHQJLQJ LGHRORJLFDO VWUXJJOH EHWZHHQ WKRVH ZKR EHOLHYHG LQ 'U .LQJ·V SKLORVRSK\ RI QRQ YLR OHQW FLYLO GLVREHGLHQFH DQG WKRVH ZKR LGHQWLÀHG PRUH FORVHO\ ZLWK 0DOFROP ;·V EODFN QDWLRQDOLVW YLHZ 7KH GHEDWH ZDV FRQWLQXRXV DV ZHUH WKH DFWLRQV RI FLYLO ULJKWV ZRUNHUV DQG FRPPXQLW\ RUJD QL]HUV ZKR ULVNHG WKHLU OLYHV DQG WKHLU VDQLW\ WR IRUFH FKDQJH RQ D FRQIXVHG DQG UHOXFWDQW $PHULFD

%LOO 5XVVHOO ZDV QDPHG FRDFK RI WKH %RVWRQ &HOWLFV DQG EHFDPH WKH ÀUVW EODFN PDQ WR FRDFK DQ HVWDEOLVKHG WHDP LQ SURIHVVLRQDO VSRUWV 7KH 1DWLRQDO :HOIDUH 5LJKWV 2UJDQL]DWLRQ ZDV HQHUJL]HG E\ $IULFDQ $PHULFDQ ZRPHQ ZKR ZHUH VLFN DQG WLUHG RI EHLQJ VLFN DQG WLUHG &LYLO 5LJKWV SLRQHHU -DPHV 0HUHGLWK ZDV VKRW RQ 8 6 +LJKZD\ RQ WKH VHFRQG GD\ RI D YRWHU UHJLVWUDWLRQ PDUFK IURP 0HPSKLV WR -DFNVRQ DQG UDFLDO YLROHQFH LQ IRUW\ WKUHH FLWLHV VDZ HOHYHQ NLOOHG 7KH SDVVLRQDWH FRQQHFWLRQ EHWZHHQ VRFLDO DFWLYLVP DQG EODFN OLWHUD PRUH WKDQ IRXU KXQGUHG LQMXUHG DQG WKUHH WKRXVDQG DUUHVWHG WXUH KDG QHYHU EHHQ PRUH REYLRXV 7KH OLWHUDU\ WUDGLWLRQ , ZDV UDLVHG WR HPEUDFH LV DUWLFXODWHG PRVW FRPSOHWHO\ LQ WKH ZRUGV RI WKH ODWH 7KH $PHULFD WKDW KDG WZLFH HOHFWHG 'ZLJKW ' (LVHQKRZHU SUHVL 7RQL &DGH %DPEDUD LQ KHU SLHFH ´7KH (GXFDWLRQ RI D 6WRU\WHOOHU µ GHQW ZDV JRQH IRUHYHU &KDQJH ZDV LQ WKH DLU WKH YRLFH RI WKH SHR SOH ZDV FDUULHG RQ WKH ZLQG DOO WKLQJV ZHUH SRVVLEOH DQG , ZDV D ´,W ZDV *UDQGPD 'RURWK\ ZKR WDXJKW PH FULWLFDO WKHRU\ µ 7RQL ÀUVW \HDU SOD\ZULWLQJ VWXGHQW DW +RZDUG 8QLYHUVLW\ DZD\ IURP P\ ZURWH PRWKHU·V ZDWFKIXO H\H IRU WKH À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ÀHG E\ WKRVH IUHHGRP QDUUDWLYHV ZKLFK ZH·YH EHHQ WUDLQHG WR FDOO VODYH QDUUDWLYHV IRU UHDVRQ WRR REVFHQH :H ZHUH GUDJJLQJ RXU SDUHQWV DQG RXU SURIHVVRUV DQG RXU FRXQWU\ WR PHQWLRQ DV LI WKH ´VODYHµ ZHUH DQ LGHQWLW\ DQG QRW D VWDWXV NLFNLQJ DQG VFUHDPLQJ LQWR WKH QH[W SKDVH RI RXU FROOHFWLYH QD LQWHUUXSWHG E\ WKH YHU\ DFW RI ÁHHLQJ VSHDNLQJ ZULWLQJ DQG WLRQDO OLIH ,V LW DQ\ ZRQGHU WKHQ WKDW DV D ZULWHU , HPEUDFHG IXOO\ FRXQWHULQJ WKH KDSS\ GDUN\ SURSDJDQGD 6KH WDXJKW WKDW D WKH $IULFDQ $PHULFDQ OLWHUDU\ WUDGLWLRQ WKDW UHTXLUHG ERWK DFWLYLVP VWRU\ VKRXOG FRQWDLQ PLPHWLF GHYLFHV VR WKDW WKH WDOH LV PHP DQG DHVWKHWLF H[FHOOHQFH WKH WUDGLWLRQ WKDW $PLUL %DUDND VD\V UH RUDEOH VKDUDEOH WKDW D VWRU\ VKRXOG EH JURXQGHG LQ FXOWXUDO TXLUHV WKDW ZH ZULWH VRPHWKLQJ VR EDD D D G WKH\ KDYH WR EDQ LW VSHFLÀFLW\ DQG VKDSHG E\ WKH PRGHV RI %ODFN DUW SUDFWLFH 7KH %ODFN $UWV 0RYHPHQW WKH $QWL ZDU 0RYHPHQW WKH :RPHQ·V 7RQL VDLG LW DQG , EHOLHYHG LW :KHQ , DGGUHVVHG WKLV RUJDQL]DWLRQ·V 0RYHPHQW³WKHVH DUH WKH ELJ WKUHH WKDW VKDSHG P\ ZRUN DV D \RXQJ FRQIHUHQFH LQ $WODQWD HLJKWHHQ \HDUV DJR WKLV LV KRZ , RSHQHG P\ DUWLVW DFWLYLVW DQG WKDW FRQWLQXH WR JXLGH P\ KDQG WRGD\ DV D JORUL UHPDUNV RXVO\ JUDWHIXOO\ QRW VR \RXQJ DUWLVW DFWLYLVW $V D WKLUG JHQHUDWLRQ EODFN QDWLRQDOLVW DQG D UDGLFDO IHPLQLVW 7KH SURFHVV RI P\ VHOI GHÀQLWLRQ DV D ZULWHU EHJDQ GXULQJ WKRVH \HDUV WKH SULPDU\ HQHUJ\ WKDW IXHOV P\ ZRUN ERWK LQ DQG RXW RI WKH 7KH HDJHU WR SOHDVH VHFRQG FKLOG RI D SROLWLFDOO\ UDGLFDO PLQLVWHU ZKR WKHDWUH LV D GHWHUPLQDWLRQ WR EH D SDUW RI WKH RQJRLQJ ZRUOGZLGH ZRXOG KDYH SUHIHUUHG D VRQ EXW VHWWOHG IRU D GHYRWHG GDXJKWHU , ZDV VWUXJJOH DJDLQVW UDFLVP VH[LVP FODVVLVP DQG KRPRSKRELD , WKUXVW E\ P\ IDPLO\ WLHV LQWR WKH LQWR[LFDWLQJO\ LQWHUFRQQHFWHG ZRUOGV DSSURDFK P\ ZRUN ÀUVW DV D ZD\ RI H[SUHVVLQJ P\ HPRWLRQDO RI WKH %ODFN $UWV 0RYHPHQW DQG WKH %ODFN IUHHGRP VWUXJJOH UHVSRQVH WR RSSUHVVLRQ VLQFH QR UHYROXWLRQ KDV HYHU EHHQ IXHOHG SXUHO\ E\ LQWHOOHFW QR PDWWHU ZKDW WKH ER\V WHOO \RX 0\ IDWKHU·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

³-XQH WK 2XU KRXVH ZDV DOZD\V IXOO RI EODFN ERRNV DQG EODFN ZULWHUV VR WKDW E\ WKH WLPH , ZDV UHDG\ IRU FROOHJH FKRRVLQJ WR EH D ZULWHU ZDV QR PRUH DEVWUDFW WR PH WKDQ GHFLGLQJ WR EH D QXUVH , VDZ P\ ZULWLQJ DV WKH SHUIHFW SODFH WR SXUVXH P\ UHVSRQVLELOLWLHV DV DQ DUW LVW DQG DQ DFWLYLVW , VWLOO GR

7KH WUDGLWLRQ , HPEUDFH JRHV EDFN WR DQFLHQW FDPSÀUHV ZKHUH ZH JDWKHUHG WRJHWKHU WR VKDUH WKH VWRULHV WKDW ZRXOG ELQG XV DV D FRPPXQLW\ RI SHRSOH ,W ZDV WKURXJK RXU VWRULHV WROG DQG UHWROG LQ HYHU\ JHQHUDWLRQ WKDW ZH GHÀQHG ZKDW D ZRPDQ ZDV DQG KRZ D PDQ VKRXOG EHKDYH DQG ZKDW ZH ZRXOG FDOO FRXUDJH $QG LQ VSLWH RI WKH 1RRN DQG WKH .LQGOH DQG WKH DELOLW\ WR GRZQORDG :ULWHUV OLNH $PLUL %DUDND 'RQ / /HH 1LNNL *LRYDQQL 0DUL ZKROH ERRNV IDVWHU WKDQ DQ DXWKRU FDQ VD\ FRS\ULJKW LQIULQJHPHQW (YDQV 6RQLD 6DQFKH] $ % 6SHOOPDQ (G %XOOLQV /DUU\ 1HDO ZULWLQJ WKRVH VWRULHV LV QR OHVV UHOHYDQW QR OHVV FULWLFDO QR OHVV 5HYLHZ

QHFHVVDU\ LQ WKH 1HZ $PHULFD WKDQ LW HYHU ZDV LQ WKH ROG RQH

LQJ WKH SODFH ZKHUH D IHZ VKRUW \HDUV DQG RQH &LYLO :DU DJR RXU IHOORZ FLWL]HQV ERXJKW DQG VROG DQG EUHG XV OLNH OLYHVWRFN 0\ ID 7KHUH LV QR GHQ\LQJ WKDW ZH KDYH FRPH D ORQJ ZD\ VLQFH WKH 6L[ WKHU DJUHHG ZLWK 0DOFROP ; ZKR VDLG ´-XVW EHFDXVH \RX·UH LQ WKLV WLHV EXW ZH DUH VWLOO YHU\ PXFK LQ SURFHVV :H DUH VWLOO D QDWLRQ DW FRXQWU\ GRHVQ·W PDNH \RX DQ $PHULFDQ µ ZDU :H DUH VWLOO D QDWLRQ WKDW DOORZV WRR PDQ\ RI LWV FKLOGUHQ WR JR WR VOHHS DW QLJKW KXQJU\ DQG FROG DQG VLFN DQG VFDUHG ,Q WKH IDFH ,Q RXU KRXVH VHSDUDWHQHVV ZDV D IDFW DQG D FKDOOHQJH $Q REVWDFOH RI VXFK OLIH DQG GHDWK SUREOHPV RXU FKDOOHQJH LV WR ÀQG D ZD\ WR QRW RI RXU PDNLQJ WKDW ZH ZHUH UHTXLUHG WR UHVLVW DQG UHVLVW ZH GLG FRQWLQXH WR EHOLHYH LQ WKH SRVVLELOLW\ RI VROXWLRQV RI FKDQJH RI SROLWLFDOO\ FXOWXUDOO\ HFRQRPLFDOO\ DQG VSLULWXDOO\ :H KDG VXP JURZWK WUDQVIRUPDWLRQ DQG WUDQVFHQGHQFH 2XU FKDOOHQJH DV ZH PHU IUHHGRP VFKRROV ZKHUH ZH OHDUQHG EODFN KLVWRU\ DQG FXOWXUH EHJLQ WKLV VHFRQG GHFDGH RI WKH WZHQW\ ÀUVW FHQWXU\ LV WR ÀQG D ZD\ :H KDG RXU RZQ UHG EODFN DQG JUHHQ ÁDJ DQG RXU RZQ QDWLRQDO WR PDNH WKRVH EHOLHIV UHDO LQ RXU OLYHV DQG LQ RXU VWRULHV DQWKHP ´/LIW (YHU\ 9RLFH DQG 6LQJ µ ZULWWHQ E\ -DPHV :HOGRQ -RKQVRQ DQG VHW WR PXVLF E\ KLV EURWKHU -RKQ -RKQVRQ LQ )RU WKH ODVW IRXU RU ÀYH \HDUV P\ KXVEDQG =DURQ KDV EHHQ ZDWFK LQJ WKH QHZV RI WKH ZRUOG DQG TXRWLQJ $PHULFDQ SDWULRW 7RP /LIW HYHU\ YRLFH DQG VLQJ 3DLQH·V IDPRXV ZRUGV ´7KHVH DUH WKH WLPHV WKDW WU\ PHQ·V VRXOV µ 7LOO HDUWK DQG KHDYHQ ULQJ 2I FRXUVH , SRLQWHG RXW WKDW LW·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ÀUVW FODVV FLWL]HQ 6XFK DQG RXU FRPPLWPHQW WR ZKDWHYHU RU ZKRHYHU ZH EHOLHYH LQ 7KHVH D OLIH UHTXLUHV QRW RQO\ GLVFLSOLQH DQG FRXUDJH EXW WKH FXOWLYDWLRQ RI DUH WKH WLPHV WKDW WU\ RXU HYHU\WKLQJ PHQ DQG ZRPHQ \RXQJ DQG DQ RXWVLGHU SRLQW RI YLHZ WKDW LV GLIÀFXOW WR RYHUFRPH HVSHFLDOO\ VLQFH ROG UHDG\ RU QRW EHFDXVH WKLV LV RQH RI WKRVH GHÀQLQJ PRPHQWV LQ IRU PDQ\ \HDUV LW VHHPHG WR EH DOO WKDW NHSW XV DOLYH %XW HYHU\WKLQJ LV WKH KLVWRU\ RI RXU FRXQWU\ WKDW FDQ JR RQH RI WZR ZD\V GLIIHUHQW ZKHQ WKH SUHVLGHQW ORRNV OLNH IDPLO\ :H FDQ FRQWLQXH WR HPEUDFH YLROHQFH PHDQQHVV VHOÀVKQHVV VHOI GHFHSWLRQ VHOI GHVWUXFWLRQ DQG LJQRUDQFH RU ZH FDQ EHJLQ WR FRQ VFLRXVO\ HPEUDFH DQG HPERG\ WKH NLQG RI FRXUDJH DQG FRPPLW PHQW DQG FODULW\ DQG FRPSDVVLRQ WKDW ZLOO EH UHTXLUHG WR UHPDNH WKLV QDWLRQ HYHU\ GD\ LQ HYHU\ ZD\ XQWLO LW UHÁHFWV ZKDW ZH NQRZ ZH FDQ EH LI ZH ZLOO MXVW GHFLGH RQFH DQG IRU DOO WR VWRS WKH ZDUV DQG IHHG DQ\ERG\ ZKR·V KXQJU\ DQG PDNH VXUH HYHU\ERG\ KDV VRPHSODFH VDIH WR OLYH DQG YRWH HYHU\ FKDQFH ZH JHW IRU WKH EHVW SHUVRQ ZH FDQ ÀQG EHFDXVH WKDW·V ZKDW FLWL]HQV GR

$QG QRZ P\ VLVWHU ZULWHU $OLFH :DONHU LV WHOOLQJ PH WR UHPHPEHU WKDW ´\RX \RXUVHOI DUH $PHULFD µ DQG VLQFH VKH LV LQFDSDEOH RI O\LQJ , KDYH WR EHOLHYH KHU DQG , GR EXW LQ RUGHU WR XQGHUVWDQG ZKDW WKDW PHDQW , KDG WR XQGR D OLIHWLPH RI VHSDUDWHQHVV RI NHHSLQJ P\ GLV WDQFH VR , ZRXOGQ·W JHW VWRPSHG RQ RU SXVKHG EDFN RU FDVW DVLGH RU ZRUVH +RZ ZDV , JRLQJ WR EHFRPH DQ $PHULFDQ DIWHU DOO WKRVH \HDUV RI EHLQJ VR YHKHPHQWO\ DQWL $PHULFDQ"

, KDG QR LGHD KRZ WR SURFHHG DQG DOWKRXJK P\ KHDUW ZDV LQ WKH ULJKW SODFH ROG KDELWV DUH KDUG WR EUHDN DQG , ZDWFKHG P\VHOI $QG WKDW LV ZKDW ZH DUH &LWL]HQV IUHH FLWL]HQV ZKR ZLOO LQ WKH VWXPEOLQJ DURXQG JUDVSLQJ DW VWUDZV EXW XOWLPDWHO\ QR FORVHU WR DEVHQFH RI FDPSÀUHV FRQWLQXH WR JDWKHU LQ FRQIHUHQFHV DQG FODVV D ZD\ RI SURFHVVLQJ WKLV QHZ UHDOLW\ WKDW 6LVWHU $OLFH ZDV WU\LQJ WR URRPV DQG OLEUDULHV DQG OHFWXUH KDOOV DQG FRIIHH VKRSV DQG WKHDWUHV LQWURGXFH LQWR P\ FRQVFLRXVQHVV 0\ VWRULHV EHFDPH VWUDQJH VDG DQG KDLU VDORQV DQG JURFHU\ VWRUHV DQG ERRN FOXEV DQG EORFN FOXEV WDOHV RI FRQIXVLRQ DQG UHJUHW DQG FKXUFKHV DQG WHPSOHV DQG PRVTXHV DQG ERDUGURRPV DQG EDFN \DUGV WR À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ÀUVW VQRZ FDSSHG PRXQWDLQ :H )RU PH WKH PRVW GLIÀFXOW WKLQJ 3UHVLGHQW 2EDPD DVNHG PH WR ZHUH FRPLQJ WKURXJK $UL]RQD DQG VXGGHQO\ WKHUH LW ZDV $ UHDO GR ZDV WR WKLQN RI P\VHOI DV DQ $PHULFDQ 7KLV ZDV D UHDO FKDO OLYH SXUSOH PRXQWDLQ PDMHVW\ DQG LW ZDV VR EHDXWLIXO VR MXVW ZKDW OHQJH HVSHFLDOO\ VLQFH , ZDV QRW UDLVHG LQ $PHULFD XQOHVV \RX \RX ZDQW \RXU ÀUVW PRXQWDLQ WR EH WKDW , ZHSW IRU WKH EHDXW\ RI P\ FRXQW WKH :HVW 6LGH RI 'HWURLW ZKLFK ZH PRVW GHÀQLWHO\ GLG QRW FRXQWU\ DQG IRU KHU FRQWLQXLQJ LQDELOLW\ WR UHDOO\ EH WKH ODQG RI WKH 0\ IDWKHU·V SDVVLRQDWH EHOLHI LQ %ODFN 1DWLRQDOLVP GLG QRW DO IUHH DQG WKH KRPH RI WKH EUDYH $ SODFH ZKHUH HYHU\RQH ZDV IUHH WR ORZ IRU VXFK LQGXOJHQFHV , ZDV ERUQ LQWR D IDPLO\ RI SHRSOH ZKR SXUVXH OLIH OLEHUW\ DQG WKH SRVVLELOLW\ RI KDSSLQHVV $ SODFH ZKHUH WRRN WKH VLQJLQJ RI ´7KH 6WDU 6SDQJOHG %DQQHUµ E\ 1HJURHV DV D DOO SHRSOH ZHUH FUHDWHG HTXDO DQG ZHUH JXDUDQWHHG D IDLU VKDNH VLJQ RI LQVDQLW\ , QHYHU DFWXDOO\ VSHOOHG $PHULFD $PHUL ... D 7KRVH ZHUH WKH VWRULHV , ZDQWHG WR RIIHU WKH QHZ $PHULFD 6WRULHV DV VRPH RI P\ PRUH UDGLFDO IULHQGV GLG EXW , WKRXJKW DERXW LW WKDW FRXOG JLYH XV D ORRN DW WKH EHDXW\ ZH KDYH MXVW EHJXQ WR FODLP )RU XV EHLQJ FDXJKW SODFLQJ D KDQG RYHU \RXU KHDUW WR SOHGJH $O OHJLDQFH WR WKH $PHULFDQ ÁDJ ZDV WR EH JXLOW\ RI SXEOLFO\ DIÀUP

, ZDV VR PRYHG WKDW , ZHSW P\ ZD\ WKURXJK $UL]RQD DQG PRVW RI 1HZ 0H[LFR $IWHU DOO WKLV ZDV DQG *HRUJH : %XVK ZDV 5HYLHZ

VWLOO LQ WKH :KLWH +RXVH 7HDUV ZHUH QRW D FRPSOHWHO\ LQDSSURSUL DWH UHVSRQVH EXW DOO WKDW ZDV DERXW WR FKDQJH 'XULQJ RXU WLPH LQ &DOLIRUQLD ZH KDG PHW D \RXQJ VHQDWRU IURP &KLFDJR ZKR SHRSOH VDLG ZDV WKLQNLQJ DERXW UXQQLQJ IRU SUHVLGHQW (YHQ WKRXJK DW ÀUVW , FRXOGQ·W UHDOO\ ZUDS P\ PLQG DURXQG WKH LGHD WKDW WKLV \RXQJ PDQ FRXOG ZLQ DQG HYHQ WKRXJK , LPPHGLDWHO\ IHOW SURWHFWLYH RI KLV ZLIH VLQFH EHLQJ D SROLWLFLDQ·V ZLIH LV QRW QHFHVVDULO\ WKH HDVLHVW ÀW IRU D VWURQJ VPDUW LQGHSHQGHQW ZRPDQ DOO RI ZKLFK VKH FOHDUO\ ZDV , VWLOO KRSHG KH ZRXOG JR IRU LW :LSLQJ DZD\ WHDUV DV , ZDWFKHG DQ DPD]LQJ VXQVHW IURP RXU PRWHO SDUNLQJ ORW VRPHZKHUH MXVW RXWVLGH RI $PDULOOR 7H[DV , WKRXJKW LI WKDW VPDUW \RXQJ VHQDWRU ZDV LQ WKH :KLWH +RXVH PD\EH , FRXOG ÀJXUH RXW D ZD\ WR EH D UHDO $PHULFDQ ZULWHU DIWHU DOO $QG RI FRXUVH KH GLG UXQ $QG KH ZRQ ZKLFK PHDQV WKDW D PDMRULW\ RI P\ IHOORZ $PHULFDQV DJUHHG ZLWK PH WKDW KH ZDV WKH EHVW SHUVRQ IRU WKH MRE DQG KH LV DQG RXU ÀUVW ODG\ LV GRLQJ MXVW ÀQH WKDQN \RX ZKLFK PHDQV VKH·V HYHQ VPDUWHU DQG VWURQJHU WKDQ , WKRXJKW VKH ZDV EXW ZKHUH GRHV WKDW OHDYH PH D QHZO\ PLQWHG FLWL]HQ ZULWHU ZLWK LU UHIXWDEOH HYLGHQFH WKDW P\ FRXQWU\ LV QR ORQJHU WKH VDPH SODFH LW ZDV ÀIW\ \HDUV DJR RU IRUW\ RU WKLUW\ RU WZHQW\ RU WHQ RU \HVWHUGD\ 7KH KLVWRU\ RI $PHULFD LV XQGHQLDEO\ D EORRG VRDNHG FDWDORJXH RI RSSUHVVLRQ VODYHU\ YLROHQFH WULFNHU\ FKLOG DEXVH FODVV H[SORLWD WLRQ UDFLDO VHJUHJDWLRQ DQG UHSHDWHG DWWHPSWV WR VWHDO DV PXFK RI WKH ZRUOG·V UHVRXUFHV DV ZH FDQ JHW RXU KDQGV RQ %XW LW LV DOVR WKH VWRU\ RI JRRG $PHULFDQV RI DOO UDFHV UHOLJLRQV FODVVHV DQG SROLWLFDO SHUVXDVLRQV WU\LQJ SDVVLRQDWHO\ WR JHW LW ULJKW 7KH &LYLO :DU WKH $EROLWLRQLVW 0RYHPHQW :RPHQ·V 6XIIUDJH WKH /DERU 0RYHPHQW WKH &LYLO 5LJKWV 0RYHPHQW WKH DQWL :DU 0RYHPHQW /D 5D]D WKH :RPHQ·V /LEHUDWLRQ 0RYHPHQW WKH *D\ 5LJKWV 0RYHPHQW WKH KXQ JHU VWULNHV WKH VLW LQV WKH )UHHGRP 5LGHV 2FFXS\ :DOO 6WUHHW WKH WDNHRYHUV DQG ER\FRWWV DQG PDVV PHHWLQJV ,W QHYHU VWRSV 'HPRF UDF\ LV D PHVV\ RQJRLQJ EXVLQHVV EXW ZKHQ LW ZRUNV LW·V DV EHDXWLIXO DV WKDW VQRZFDSSHG PRXQWDLQ WKDW PRYHG PH WR WHDUV DQG DV UDUH %XW , DP DQ RSWLPLVW , DP DIWHU DOO SDUW RI D JHQHUDWLRQ WKDW VWRSSHG D OHJDOO\ VDQFWLRQHG UHLJQ RI WHUURU DJDLQVW EODFN $PHULFDQV ZKR ZDQW HG WR YRWH RU ULGH WKH EXV RU VHH D PRYLH $ JHQHUDWLRQ WKDW HQGHG DQ XQMXVW FRQÁLFW LQ 6RXWKHDVW $VLD $ JHQHUDWLRQ WKDW JXDUDQWHHG D ZRPDQ·V ULJKW WR FKRRVH QRW RQO\ ZKHQ DQG ZKHWKHU WR EHDU FKLO GUHQ EXW ZKDW NLQG RI ZRUN VKH ZLOO GR DV D SHDFHIXO DQG SURGXFWLYH FLWL]HQ RI WKH SODQHW :H JRW D 9RWLQJ 5LJKWV $FW SDVVHG LQ DQG IRUW\ WKUHH \HDUV DIWHU WKDW ZH ZHSW DW KRZ FRPSOHWHO\ WKDW KLVWRULF PRPHQW ZDV UHÁHFWHG LQ WKH HOHFWLRQ RI %DUDFN +XVVHLQ 2EDPD 7KHUH LV RQO\ RQH VWUXJJOH LQ ZKLFK ZH DUH DOO HQJDJHG DQG LW LV WKH VWUXJJOH WR EULQJ RXU QDWLRQDO EHKDYLRU LQ OLQH ZLWK WKH EHDXWLIXOO\ ZULWWHQ GRFXPHQWV XSRQ ZKLFK WKH FRXQWU\ LV IRXQGHG :H KROG WKHVH WUXWKV WR EH VHOI HYLGHQW WKDW DOO PHQ DUH FUHDWHG HTXDO ,I \RX KDYH HYHU GRXEWHG WKH SRZHU RI ZRUGV \RX VKRXOG UH UHDG VRPH RI WKRVH GRFXPHQWV <RX·OO EH VXUSULVHG DW KRZ FRQFLVH WKH\ DUH +RZ WKH\ JR VWUDLJKW WR WKH KHDUW RI WKH PDWWHU +RZ WKH SDV VLRQ RI WKH ZULWLQJ FRPHV WKURXJK LQ WKH ZRUGV WKH\ FKRVH WR GH FODUH WKHLU IUHHGRP DQG RXU RZQ 5HYLHZ

:H KROG WKHVH WUXWKV WR EH VHOI HYLGHQW 2I FRXUVH ZH NQRZ WKDW WKHLU GHÀQLWLRQ RI ´PHQµ ZDV OLPLWHG WR ZKLWH PDOH SURSHUW\ RZQHUV EXW WKDW GRHVQ·W PDNH WKH ZRUGV ULQJ IDOVH ,W MXVW PDNHV XV NQRZ WKDW WKHVH PHQ ZKR ZURWH VXFK SDVVLRQ DWH ZRUGV LQ GHIHQVH RI WKHLU QHZ FRXQWU\ ZHUH QRW SHUIHFW EHLQJV 6RPH RI WKHP ZHUH VODYH RZQHUV ZKR KDG PDGH WKHLU IRUWXQHV RII WKH XQSDLG ODERU RI RWKHU KXPDQ EHLQJV WKH\ ERXJKW DQG VROG OLNH FKDWWHO *HRUJH :DVKLQJWRQ DQG 7KRPDV -HIIHUVRQ DPRQJ WKHP %XW WKHLU LGHD ZDV VRXQG 7KHLU LGHD ZDV QREOH DQG FRXUDJHRXV DQG YL VLRQDU\ :KLFK LV ZK\ LW·V VWLOO ZRUNLQJ WRGD\ LQ VSLWH RI WKH EHVW HIIRUWV RI VRPH RI RXU IULJKWHQHG DQJU\ IHOORZ FLWL]HQV WR VORZ WKH QDWLRQ·V IRUZDUG PRWLRQ DQG GHQ\ WKH UHDOLW\ RI D QHZ PXOWL FXO WXUDO PXOWL FRORUHG PXOWL HWKQLF $PHULFD %XW LQ RUGHU IRU WKDW $PHULFD³RXU $PHULFD³WR ZRUN LQ RUGHU IRU WKLV QHZ VWRU\ WR EH WROG ZH QHHG PRUH WKDQ D JUHDW SUHVLGHQW :H QHHG WKH DFWLYH LQYROYHPHQW RI LQIRUPHG FLWL]HQV DQG WKDW·V \RX DQG PH 7KDW·V HDFK DQG HYHU\ RQH RI XV :H KDYH WR VWD\ HQ JDJHG DQG HQHUJL]HG DQG SUHVHQW LQ WKH OLIH RI RXU FRXQWU\ 'U 0DUWLQ /XWKHU .LQJ FDOOHG XSRQ XV WR UHFRJQL]H ´WKH ÀHUFH XUJHQF\ RI QRZ µ DQG WR HPEUDFH WKH IDFW WKDW ´QRZ LV WKH WLPH WR PDNH UHDO WKH SURPLVH RI GHPRFUDF\ µ 7KDW LV WKH FKDOOHQJH IDFLQJ XV DW WKLV FULWLFDO PRPHQW WR PDNH UHDO WKH SURPLVH RI GH PRFUDF\ 7KLV LV WKH PRPHQW ZKHQ ZH KDYH WR GHÀQH WKH JOREDO FRPPXQLW\ LQ D ZD\ WKDW ORRNV QRW MXVW DW WKH VSHHG RI FRPPX QLFDWLRQ EXW DW WKH TXDOLW\ RI WKH WKRXJKW EHKLQG LW 7KLV LV WKH PRPHQW ZKHQ ZH KDYH WR SURWHFW WKH HDUWK IURP KXPDQV DQG IRU KXPDQV EHFDXVH LW·V WKH RQO\ KRPH ZH·YH JRW 7KLV LV WKH PRPHQW ZKHQ ZH KDYH WR ÀQG D ZD\ WR HOLPLQDWH WKH K\SKHQDWHG $PHULFDQV $IULFDQ $PHULFDQV (XURSHDQ $PHUL FDQV 0H[LFDQ $PHULFDQV *D\ $PHULFDQV 2XU FKDOOHQJH LV WR VWLU WKH IDPRXV $PHULFDQ PHOWLQJ SRW RQH PRUH WLPH VR ZH FDQ DOO VLPSO\ EH $PHULFDQV :H DUH WKH RQHV ZKR KDYH WR ÀQG D QHZ VWRU\ DQG D QHZ VRQJ WKDW ZH FDQ DOO OLIW RXU YRLFHV WR VLQJ D QHZ QDWLRQDO QDUUDWLYH WKDW ZHDYHV DOO RXU VWRULHV WRJHWKHU LQWR RQH DPD]LQJ VWRU\ WKDW ZH FDQ ÀUVW WHOO HDFK RWKHU DQG WKHQ RXU FKLOGUHQ DQG WKHLU FKLOGUHQ DQG WKH RQHV ZKR FRPH DIWHU DQG WKH RQHV ZKR FRPH DIWHU WKDW %HFDXVH WKRVH VWRULHV³RXU VWRULHV ³DUH ZKDW ZH OHDYH EHKLQG WR WHOO WKH IXWXUH ZKR ZH ZHUH DQG ZKDW ZH YDOXHG LQ RXUVHOYHV DQG LQ RXU QHLJKERUV +LVWRULDQV FDQ WHOO \RX ZKDW KDSSHQHG DQG ZKHQ EXW ZULW HUV DUH WKH RQHV ZKR FDQ WHOO \RX KRZ LW IHOW WR EH WKHUH $QG KRZ LW IHHOV WR EH ULJKW KHUH ULJKW QRZ $GGLQJ RXU YRLFHV WR WKDW QDWLRQDO VWRU\ LV P\ MRE DQG P\ MR\ 6R ZKHQ SHRSOH DVN PH ZKDW , GR IRU D OLYLQJ , OHW /DQJVWRQ +XJKHV H[SODLQ /LIH LV D ELJ VHD )XOO RI PDQ\ ÀVK , OHW GRZQ P\ QHWV DQG SXOO 7KDQN \RX

.JDIBFM .BSL $IFNFST *KRVW /LJKW $Q ,QWURGXFWRU\ +DQGERRN IRU 'UDPDWXUJ\ UHYLHZHG E\ -DQH %DUQHWWH DQG -XOHV 2GHQGDKO -DPHV

´7KHUH DUH D ORW RI XUEDQ OHJHQGV DERXW WKH RULJLQV RI JKRVW OLJKWV P\ SHUVRQDO IDYRULWH LV WKDW WKH\ ZHUH RULJLQDOO\ OHIW RQVWDJH WR SUR SLWLDWH RU DEMXUH WKH JKRVWV WKDW ZHUH NQRZQ WR FRQJUHJDWH LQ WKH DWHUV ZKHUH WKH PHWDSK\VLFDO EDUULHUV EHWZHHQ WKLV ZRUOG DQG WKH QH[W DUH QRWRULRXVO\ WKLQ µ

²0LFKDHO 0DUN &KHPHUV *KRVW /LJKW

-2- , IRXQG *KRVW /LJKW DIWHU EHLQJ WDVNHG ZLWK VXJJHVWLQJ QHZ GUDPDWXUJLFDO WH[WV IRU RXU OLEUDU\ DW WKH VDPH WLPH , KDG D QHZ VHW RI VWXGHQWV LQWHUHVWHG LQ WKH SUDFWLFH ZLWKLQ D OLEHUDO DUWV FRQ WH[W ZDV D JRRG \HDU IRU 8 6 GUDPDWXUJ\ SXEOLVKLQJ ZLWK 7KH 3URFHVV RI 'UDPDWXUJ\ $ +DQGERRN E\ 6FRWW 5 ,UHODQ $QQH )OHWFKHU DQG -XOLH )HOLVH 'XELQHU DQG 7KH $UW RI $FWLYH 'UDPD WXUJ\ 7UDQVIRUPLQJ &ULWLFDO 7KRXJKW LQWR 'UDPDWLF $FWLRQ E\ /HQRUD ,QH] %URZQ MRLQLQJ *KRVW /LJKW DV WKH Ã&#x20AC;UVW ERRN OHQJWK WH[WV H[SORULQJ GUDPDWXUJ\ SHGDJRJ\ LQ WKH 8 6 WKHDWULFDO FRQWH[W VLQFH 'UDPDWXUJ\ LQ $PHULFDQ 7KHDWHU $ 6RXUFHERRN HGLWHG E\ *HRIIUH\ 3URHKO 0LFKDHO /XSX DQG 6XVDQ -RQDV

1)050 +6-&4 0%&/%")- +".&4

-6% 2I WKH KDQGIXO RI UHFHQW GUDPDWXUJ\ WH[WERRN SXEOLFDWLRQV , ZDV Ã&#x20AC;UVW GUDZQ WR &KHPHUV· *KRVW /LJKW EHFDXVH , IRXQG KLV <RX 7XEH YLGHR FOLS ´:KDW LV 'UDPDWXUJ\"µ WR EH VR KHOSIXO WR P\ ZRUN PHQWRULQJ VWXGHQW GUDPDWXUJV DW .HQQHVDZ 6WDWH 8QLYHUVLW\ 7KLV VHPHVWHU LW LV RXU SULPDU\ WH[WERRN IRU WKH 'UDPDWXUJ\ FRXUVH IRU WKH Ã&#x20AC;UVW WLPH $V WKH IRXQGHU GLUHFWRU RI &DUQHJLH 0HOORQ·V %)$ LQ 'UDPDWXUJ\ &KHPHUV GUDZV IURP KLV H[SHULHQFH DV DQ DGPLQLVWUD WRU SURIHVVRU DQG SURIHVVLRQDO XQLYHUVLW\ GUDPDWXUJ

-$1( %$51(77( WKH 5HVLGHQW 'UDPDWXUJ RI WKH 'HSDUWPHQW RI 7KHDWUH 3HUIRUPDQFH 6WXGLHV DW .HQ QHVDZ 6WDWH 8QLYHUVLW\ LV D WKHDWUH KLVWRULDQ ZKR GRHV DUFKLYDO UHVHDUFK RQ WUDLQ FXOWXUH DQG $PHULFDQ SDJHDQWU\ 6KH KDV SXEOLVKHG UHYLHZV DQG DUWLFOHV LQ 7KHDWUH -RXUQDO 7KHDWUH 6\P SRVLXP 7KHDWUH ,Q6LJKW DQG 734 %DUQHWWH VHUYHV DV /0'$Ò&#x2039;V 5HJLRQDO 9LFH 3UHVLGHQW IRU WKH 6RXWKHDVW DQG ZDV WKH FRQIHUHQFH FR FKDLU ZLWK &HOLVH .DONH RI WKH $OOLDQFH 7KHDWUH IRU WKH /0'$ FRQIHUHQFH LQ $W ODQWD )RU H[DPSOHV RI KHU GUDPDWXUJLFDO ZHEVLWHV VHH KWWS ZZZ NHQQHVDZ HGX WKHDWUH GUDPDWXUJ\6LWHV VKWPO 1)050 "/%3&8 &%8"3%4 1)050(3"1):

´*KRVW /LJKW LV DQ LQWURGXFWRU\ KDQGERRN IRU WKH DUW DQG VFLHQFH RI GUDPDWXUJ\ VSHFLÃ&#x20AC;FDOO\ DV LW LV SUDFWLFHG LQ WKH $PHULFDQ WKHDWHU µ

²0LFKDHO 0DUN &KHPHUV *KRVW /LJKW [L

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

-6% &KHPHUV· SUHYLRXV ERRN 6WDJLQJ 6WLJPD $ &ULWLFDO +LV WRU\ RI WKH $PHULFDQ )UHDN 6KRZ 3DOJUDYH LV LQ FRPSHO 5HYLHZ

OLQJ ZD\V LQ FRQYHUVDWLRQ ZLWK WKLV WH[WERRN LQVRIDU DV WKH GUDPDWXUJ WHQGV WR RFFXS\ D PDUJLQDO RXWVLGHU SRVLWLRQ LQ $PHULFDQ WKH DWUH :LWKLQ WKH ´7KHDWHU LQ WKH $PHULFDVµ VH ULHV SXEOLVKHG E\ 6RXWKHUQ ,OOLQRLV 8QLYHUVLW\ 3UHVV *KRVW /LJKW LV VRPHZKDW IUHDNLVK DV ZHOO³WKHUH DUH RQO\ WZR RWKHU ERRNV LQ WKLV VHULHV ZLWK D SHGDJRJLFDO EHQW 7HDFKLQJ 3HU IRUPDQFH 6WXGLHV DQG :RUGV DW 3OD\ DQG RQO\ WZR ERRNV RYHUDOO *KRVW /LJKW DQG :RUGV DW 3OD\ ZLWK D GUDPDWXUJLFDO IRFXV -2- ,·P IDVFLQDWHG E\ WKH ZD\V WKH WKHRU\ SUDFWLFH GLYLGH JHWV SOD\HG RXW LQ GUDPDWXUJL FDO ZULWLQJ DQG SXEOLVKLQJ 7R P\ PLQG GUD PDWXUJ\ LV RQH RI WKH IHZ SODFHV LQ RXU GLVFL SOLQH ZKHUH WKHRU\ DQG SUDFWLFH DUH LQGLYLVLEOH , FDQQRW GR GUDPDWXUJ\ ZLWKRXW XQGHUVWDQG LQJ WKH WKHRUHWLFDO XQGHUSLQQLQJV RI QDUUDWLYH VWUXFWXUH KLVWRULRJUDSK\ DXGLHQFH UHFHSWLRQ DHVWKHWLF SHULRGV DQG WKH OLVW JRHV RQ ,W LV &KHPHUV· LPDJH RI WKH GUDPDWXUJ DV FUHDWRU³LQIRUPHG E\ LQWHOOHFW DQG IRUJHG LQ DFWLRQ EDVHG RXW RI WKDW LQWHOOHFW³WKDW PRVW DSSHDOHG WR PH ERWK DV WKH ZD\ , ZDQW P\ VWXGHQWV WR XQGHUVWDQG ZKDW , GR DQG WKH ZD\ , ZDQW WKHP WR FUHDWH HQJDJH DQG LQWHUURJDWH GUDPDWXUJ\

SLWIDOOV RI XVLQJ WKLV WH[WERRN LQ DQ XQGHU JUDGXDWH FRXUVH , QRWLFHG WKDW VHYHUDO RI WKH PHWDSKRUV XVHG LQ WKH ERRN IDYRU D PDVFXOLQH WRQH )RU H[DPSOH KH H[SODLQV KLV IRFXV RQ WKH *HUPDQ (QOLJKWHQPHQW ZLWK UHIHUHQFH WR WKH ´PXVFXODU FURVV GLVFLSOLQDU\ DSSURDFKµ LW DOORZV KH DGYRFDWHV XVLQJ WKHRU\ DQG KLV WRU\ ERWK LQ GUDPDWXUJ\ EHFDXVH ´WKH GUDPD WXUJ·V LQWHOOHFWXDO DUVHQDO PXVW FRQWDLQ VKRWV IURP ERWK RI WKHVH ORFNHUVµ [LY )RU WKH PRVW SDUW WKLV VHHPV DXWKHQWLF JLYHQ WKH DXWKRU·V JHQGHU DQG SHUVSHFWLYH EXW WKHUH·V DOVR UHVLGXH RI DQ DWWHPSW WR WUDQVIRUP UHDG HUV· DVVXPSWLRQV IURP WKHLU OLNHO\ DVVRFLDWLRQ RI GUDPDWXUJ\ DV VHUYLFH DQG WKXV IHPLQLQH RU ´ZRPHQ·V ZRUNµ ZLWK D UREXVW YLULOH LP DJH RI GUDPDWXUJ\ DV SRZHUIXO DQG ZRUWK\ WKHDWUH SUDFWLFH

-2- ,QWHUHVWLQJO\ WKLV TXHVWLRQ RI ´IHPLQL ]DWLRQµ FDPH XS LQ D 7ZLWWHU GUDPDWXUJ\ WKUHDG MXVW D FRXSOH RI ZHHNV DJR ,Q WKDW FRQWH[W WKHUH ZDV UHVLVWDQFH E\ VRPH SRVWHUV ZKR IHOW VXFK D FKDUDFWHUL]DWLRQ ZDV XQKHOSIXO DQG RYHUO\ EURDG DQG RWKHU SRVWHUV ZKR DUJXHG WKLV ZDV D SDOSDEOH DWWLWXGH KHOG E\ FROODERUDWRUV 8OWLPDWHO\ ERWK JURXSV DJUHHG WKDW VXFK DQ LPSUHV VLRQ GLGQ·W FKDQJH WKH ULJRU RI GUDPDWXUJLFDO ZRUN ZKHWKHU GRQH $V PXFK DV P\ VWXGHQWV JREEOH XS WKH WH[W·V IXQFWLRQDO FRQQHF E\ PHQ RU ZRPHQ EXW FRXOG LQÁXHQFH KRZ WKDW ZRUN LV YDOXHG DQG WLRQV EHWZHHQ GUDPDWXUJ\ DQG SHGDJRJ\ IRU H[DPSOH KRZ WR ZLWKLQ WKH YDULRXV FRQWH[WV LQ ZKLFK GUDPDWXUJV FLUFXODWH FUDIW D 6WXG\ *XLGH UXQ D WDON EDFN ZLWK RXWVLGH DUWLVWV H[SHUWV ´WHDFKµ OHVVRQV DERXW ; KLVWRULFDO WLPH DQG < SOD\ZULJKW·V ERG\ , ZRQGHU ZKDW KDSSHQV LI ZH VHH WKDW PDVFXOLQH FRQVWUXFWLRQ LQ RI ZRUN *KRVW /LJKW LQVLVWV WKDW EHLQJ D GUDPDWXUJ LV PXFK PRUH *KRVW /LJKW DV FRQQHFWHG WR &KHPHUV· GHFLVLRQ WR IRFXV RQ WKH WKDQ VLPSO\ NQRZLQJ KRZ WR GR GUDPDWXUJLFDO WDVNV :KHWKHU ´*HUPDQ PRGHO >RI@ GUDPDWXUJ\ µ 7KDW FKRLFH SURGXFHV WZR DG VFKRODUO\ UHDGHUV ZLOO LGHQWLI\ *KRVW /LJKW DV DQ H[DPSOH RI FULWL GLWLRQDO HIIHFWV 7KH ÀUVW LV WR SUHVHQW WKH GUDPDWXUJ DV D VSHFLÀF FDO SHGDJRJ\ IRU WKH GUDPDWXUJ UHPDLQV WR EH VHHQ &HUWDLQO\ P\ XQLTXHO\ WUDLQHG DQG DWWXQHG WKHDWUH DUWLVW :KLOH FRQYHUVDQW LQ D XQGHUJUDGXDWH VWXGHQWV VHH LW LQ WKDW ZD\ 7KH RQO\ ÁLS VLGH WR ZLGH DUUD\ RI SHUIRUPDQFH WKHRULHV QDUUDWLYH VWUXFWXUHV DQG KLV WKDW DFKLHYHPHQW LV WKDW VWXGHQWV WHQG WR JORVV RYHU WKH PRUH WKHR WRULFDO SHULRGV WKH GUDPDWXUJ LQ WKLV PRGHO LV QRW LQWHUFKDQJHDEOH UHWLFDO VHFWLRQV RI WKH ERRN ORRNLQJ IRU FRQFUHWH H[DPSOHV DQG ZLWK FULWLF SOD\ZULJKW RU KLVWRULDQ $V &KHPHUV· WH[W LOOXVWUDWHV GHWDLOV WR HPXODWH RU HYDOXDWH GUDPDWXUJ\ EURDGO\ FRQFHLYHG FRPSULVHV VHWV RI UHVHDUFK ZULW LQJ DQG RXWUHDFK SUDFWLFHV DYDLODEOH HTXDOO\ WR DOO WKHDWHU DUWLVWV -6% 7KDW·V RQH RI WKH UHDVRQV ZK\ , GHVLJQHG RQH RI RXU IRXU VKRUW KRZHYHU XQLTXH DPRQJ WKRVH DUWLVWV WKH GUDPDWXUJ PXVW EH DEOH SURMHFWV WR FRYHU &KHPHUV· ´7KHRU\ &DSVXOHV µ $IWHU DQ LQLWLDO LQ WR FRPPXQLFDWH ZLWK DUWLVWV DFDGHPLFV DQG DXGLHQFHV ZLWK HTXDO WURGXFWRU\ GD\ DERXW WKH SRZHU RI WKHRU\ LQ WKHDWUH IRU ZKLFK , FODULW\ $V D UHVXOW KHU LQWHOOHFW DQG LQVLJKWV PXVW EH VKDUS DQG DVVLJQHG ERWK ´'UDPD DV 'LDOHFWLFµ IURP *KRVW /LJKW DQG WKH WKLUG ÁH[LEOH VNLOOV RQO\ DFKLHYHG WKURXJK GUDPDWXUJ\ H[SOLFLW WUDLQLQJ FKDSWHU RI 3URFHVV RI 'UDPDWXUJ\ ´&RQFHSWXDO )UDPHZRUNVµ DQG SUDFWLFH , GLYLGHG WKH WKHRU\ FDSVXOHV SRUWLRQ RI &KHPHUV· WKLUG FKDSWHU ´3RZHU 3OD\Vµ LQWR WZR SDUWV $V SDUW RI WKDW DVVLJQPHQW HDFK -6% 7KLV VDPH KROLVWLF DQG ZLGH UDQJLQJ WUDLQLQJ LV RQH RI WKH VWXGHQW FUHDWHG D VKRUW SUHVHQWDWLRQ IRU WKH FODVV IHDWXULQJ LPDJHV PDLQ UHDVRQV WKDW GUDPDWXUJLFDOO\ LQFOLQHG VWXGHQWV DUH DPRQJ WKH DQG RU YLGHRV WR H[SOLFDWH HDFK RI WKH SUDFWLWLRQHUV PHQWLRQHG LQ PRVW KLUDEOH LQ RXU PDMRU 2QH RI WKH JODULQJ RPLVVLRQV LQ WKLV WH[W SDVVLQJ E\ &KHPHUV ZLWK WKH JRDO RI EHWWHU XQSDFNLQJ ZK\ DQG LV WKH FRQFHSW RI WUDQVIHUDEOH VNLOOV³WKH IDFW WKDW WKH VNLOOV OHDUQHG KRZ WKLV ´WKHRU\ FDSVXOHµ FDQ EH VHHQ LQ WKDW SUDFWLWLRQHU·V ZRUN GXULQJ GUDPDWXUJ\ FDQ DOVR EH DSSOLHG LQ DQ DUUD\ RI ÀHOGV LQFOXG 7KHQ HDFK VWXGHQW FUHDWHG D 3UH]L VXPPDUL]LQJ WKH WKHRU\ FDSVXOH LQJ JUDQW ZULWLQJ GHYHORSPHQW SXEOLF UHODWLRQV DQG PDUNHWLQJ RYHUDOO LQFOXGLQJ DOO WKH SUDFWLWLRQHUV OLVWHG 7KLV VKRUW SURMHFW³ FRQVXOWLQJ HGXFDWLRQ DQG VHYHUDO DUHQDV RI JUDGXDWH VWXG\ %H LQFOXGLQJ ERWK WKH LQ FODVV PLQL SUHVHQWDWLRQ DQG WKH 3UH]L³ZDV FDXVH GUDPDWXUJV VKRXOG H[FHO DW FROODERUDWLRQ FRQQHFWLYLW\ DQG SHHU UHYLHZHG DV ZHOO DV HYDOXDWHG E\ PH DOORZLQJ IRU PXOWLSOH FRPPXQLFDWLRQ WKH\ FDQ WUDQVIHU WKHVH VNLOOV RXWVLGH RI WKHDWUH OD\HUV RI IHHGEDFN DQG D PRUH QXDQFHG XQGHUVWDQGLQJ RI WKH FRP SURGXFWLRQ DV QHHGHG %XW , LQWHUUXSWHG \RX³ZKDW·V WKH VHFRQG SOH[LW\ SRWHQWLDOO\ KLGGHQ LQ WKLV YLWDO SDUW RI &KHPHUV· ERRN HIIHFW RI &KHPHUV· XVH RI WKH *HUPDQ PRGHO" , ZDQW WR UHWXUQ WR WKH QRWLRQ RI EHLQJ D GUDPDWXUJ UDWKHU WKDQ -2- 7KH VHFRQG HIIHFW LV WR SUHVHQW SURGXFWLRQ VWUXFWXUH DV UHVR GRLQJ GUDPDWXUJ\ ODWHU EXW ZKLOH ZH·UH RQ WKH WRSLF RI SRWHQWLDO OXWHO\ KLHUDUFKLFDO ZLWK WKH $UWLVWLF 'LUHFWRU DW WKH KHDG RI WKH WKHDWHU 5HYLHZ

FRPSDQ\ DQG WKH 3URGXFWLRQ 'LUHFWRU DW WKH KHDG RI WKH UHKHDUVDO SURFHVV ,W LV KHUH ZKHUH WKH ZHOO RUGHUHG VWUXFWXUDOLVP RI WKH *HU PDQ PRGHO RI GUDPDWXUJ\ IDOOV VKRUW ZKHQ PHW ZLWK WKH VSHFLÃ&#x20AC;FV RI $PHULFDQ GUDPDWXUJLFDO SUDFWLFH ,Q WKH *HUPDQ PRGHO WKH GUD PDWXUJ LV RQ SDU ZLWK WKH DUWLVWLF GLUHFWRU ZRXOGQ·W WKDW EH QLFH

ERWK FUDIWLQJ DQG SODFLQJ DQ LQVWLWXWLRQ·V DUWLVWLF SKLORVRSKLHV LQWR VRFLDO DQG DHVWKHWLF FRQWH[WV ,Q $PHULFD WKH GULYLQJ IRUFHV EHKLQG LQVWLWXWLRQDO GHYHORSPHQW WHQG WR EH Ã&#x20AC;QDQFLDO EHIRUH GUDPDWXUJLFDO HYHQ LQ WKH QRQ SURÃ&#x20AC;W WKHDWHU ZRUOG $V IRU DFDGHPLF LQVWLWXWLRQV LW LV PRUH OLNHO\ EXW QRW FHUWDLQ WKDW FXUULFXODU LQWHUHVWV DUH LQKHUHQWO\ GUDPDWXUJLFDO 'RHV WKH SUHVHQWDWLRQ RI GUDPDWXUJ\ DV D XQLTXH DQG HVVHQWLDO DUWLVWLF SRVLWLRQ ZLWKLQ $PHULFDQ WKHDWULFDO LQVWLWXWLRQV FUH DWH IDOVH H[SHFWDWLRQV IRU RXU VWXGHQWV"

WKDW , FKRRVH WR DYRLG LQ P\ RZQ KLVWRU\ WKHRU\ FRXUVHV EXW LW·V KDUG WR LPDJLQH OHDUQLQJ WKH KLVWRU\ RI WKHDWUH ZLWKRXW UHIHUHQF LQJ %URFNHWW

-6% 3HUKDSV EXW LQ VR GRLQJ LW DOVR FUHDWHV IHUWLOH JURXQG IRU LPDJLQLQJ D QHZ PRGHO RI GUDPDWXUJ\ 0\ VWXGHQWV ZHUH LQVSLUHG E\ WKLV DSSURDFK DV LW KHOSHG WKHP HQYLVLRQ D EULJKWHU IXWXUH IRU WKH SRZHU RI GUDPDWXUJ\ LQ WKHDWUH SURGXFWLRQ

-6% +PP , PD\ EH LQ WKH PLQRULW\ RSLQLRQ KHUH EXW , QHYHU UH DOO\ HQMR\HG %URFNHWW·V WHDFKLQJ VW\OH LQ WKH KLVWRU\ FODVVURRP SHU VH LQVWHDG PRVW RI WKH OHDUQLQJ , FKHULVKHG ZDV OLPLQDO³LW KDS SHQHG LQ KLV RIÃ&#x20AC;FH RU LQ WKH KDOOZD\ RU LQ VRFLDO VHWWLQJV LQIRU PDOO\ DQG FRQYHUVDWLRQDOO\ $UJXDEO\ WKLV LV DOVR WKH ZD\ WKDW P\ RZQ GUDPDWXUJ\ WHQGV WR IXQFWLRQ ZLWKLQ D XQLYHUVLW\ VHWWLQJ DV , ZRUN ZLWK FROOHDJXHV ZKR DUH DV SUHVVHG IRU WLPH DQG HQHUJ\ DV , DP 7KDW VDLG WKH ZD\ %URFNHWW WDXJKW WKH GUDPDWLF WKHRU\ FODVV XVLQJ 'XNRUH·V 'UDPDWLF 7KHRU\ DQG &ULWLFLVP ZDV RXWVWDQG LQJ <RXU SRLQW DERXW WKH LQWULQVLFDOO\ GUDPDWXUJLFDO DSSURDFK WKDW %URFN W\SLFDOO\ WRRN LV VSRW RQ DQG VRPHWKLQJ , GLGQ·W UHFRJQL]H XQWLO D IHZ \HDUV LQWR P\ SRVW DV UHVLGHQW GUDPDWXUJ DW .HQQHVDZ 6WDWH 8QLYHUVLW\

-2- 3HUKDSV WKLV GHVLUH LV WKH UHVXOW RI RXU DSSUHFLDWLRQ RI WKH ZD\ %URFNHWW WDXJKW KLVWRU\ DQG WKHRU\ DV LQWHUWZLQHG ZLWK GUDPDWXUJ\" , FRQIHVV WKDW , IRXQG Ã&#x20AC;QG KLV WH[WERRNV UDWKHU GU\ DQG IDFWXDO QRW DW DOO UHSUHVHQWDWLYH H[FHSW PD\EH LQ EUHDGWK DQG GHSWK RI WKH ZD\V LQ ZKLFK KH DFWXDOL]HG WKDW KLVWRU\ WKURXJK KLV WHDFKLQJ 0D\ EH ZH QHHG WKH GUDPDWXUJ·V FRPSDQLRQ WR +LVWRU\ RI 7KHDWUH DQG IRU WKDW PDWWHU PDQ\ RWKHU VXFK KLVWRU\ WH[WERRNV WKDW FRXOG EULQJ WR OLIH KLV XQGHUVWDQGLQJ RI KRZ 7KHDWHU HQFRPSDVVHV VR PDQ\ OLY LQJ EUHDWKLQJ FKDQJLQJ SUDFWLFHV RYHU WLPH"

-2- $OVR ZKLOH WKH PRVW SUDFWLFDO DGYLFH &KHPHUV JLYHV WR EXG GLQJ $PHULFDQ GUDPDWXUJV LV WR OHDUQ GHIHUHQFH WR WKH GLUHFWRU WKH SOD\ZULJKW WKH LQVWLWXWLRQ DQG WKH DXGLHQFH LV WKDW WKH EHVW DGYLFH IRU D SURIHVVLRQ ZKLFK VWLOO KDV WR Ã&#x20AC;JKW IRU LWV HTXDO SODFH DW WKH DUWLVWLF WDEOH" ,Q &KHPHUV· ´3DUW 7KUHH 3UDFWLFHµ , IRXQG P\VHOI UHDFWLQJ ZLWK GLVFRPIRUW DV , GR WR VWXG\ JXLGH SDJHV WKDW LQFXOFDWH \RXQJ SHRSOH LQWR ´SURSHUµ WKHDWHU EHKDYLRU , UHFRJQL]H WKDW DQ LQWURGXFWRU\ WH[W LV QRW QHFHVVDULO\ WKH WLPH RU SODFH WR UDGLFDOL]H GUDPDWXUJLFDO SUDFWLFH EXW , IRXQG P\VHOI ZRQGHULQJ ZKDW NLQG RI LQQRYDWLRQ LV QHFHVVDULO\ IRUHVWDOOHG ZKHQ D GUDPDWXUJ·V FUHDWLYLW\ *LYHQ WKLV REVHUYDWLRQ SHUKDSV LW LV QRW VXUSULVLQJ WKDW RI DOO WKH LV WHPSHUHG E\ D FRQVWDQW DZDUHQHVV RI KHU ´SODFHµ LQ DQG GHSHQ FKDSWHUV LQ WKLV ERRN WKH PRVW XVHIXO WR PH WKXV IDU KDV EHHQ &KHP GHQFH XSRQ KLHUDUFKLFDO VWUXFWXUHV RI SRZHU HUV· DIRUHPHQWLRQHG WKLUG FKDSWHU ´3RZHU 3OD\V µ ZKLFK FRQWDLQV VHYHUDO WKHRU\ ´FDSVXOHVµ DQG GRHV DQ DGPLUDEOH MRE VXPPDUL]LQJ -6% , DJUHH DQG FRQIHVV WKDW , VKDUHG WKDW VDPH GLVFRPIRUW DO GUDPDWLF WKHRU\ :H VSHQW D ZHHN DQG D KDOI RQ WKLV FKDSWHU WKLV WKRXJK DW WKLV VWDJH DW OHDVW XQWLO XQOHVV &KHPHUV· SUHGLFWLRQV RI WHUP DQG LW SURYLGHG WKH VFDIIROGLQJ , QHHGHG WR PRYH LQWR WKH OHVV GUDPDWXUJ\ EHLQJ DV XELTXLWRXV DV GLUHFWLQJ FRPH WUXH , WKLQN LW·V IDPLOLDU DQG PRUH ULJRURXV WHUULWRU\ RI SODFH EDVHG VFKRODUVKLS ZRUWK WKH ULVN %HFDXVH WKH UHDOLW\ LV WKDW $PHULFDQ WKHDWUH³HV SHFLDOO\ ZLWKLQ WKH XQLYHUVLW\ VHWWLQJ³LV KLHUDUFKLFDO *LYHQ WKDW -2- 2Q SDJH LQ KLV GLVFXVVLRQ RI WKH KLVWRULFDO FULWLFLVP WKH GUDPDWXUJ\ WHQGV WR DWWUDFW VWXGHQWV IURP GLVFLSOLQHV RXWVLGH RI RU\ ´FDSVXOH µ &KHPHUV DUJXHV WKDW KLVWRULFDO UHVHDUFK LV ´WKH FRU WKHDWUH LW·V DOVR ZLVH WR LQFOXGH H[SHFWHG GHFRUXP LQ D WH[WERRN QHUVWRQH RI KXPDQLVWLF LQTXLU\ IRU WKH VLPSOH UHDVRQ WKDW KLVWRU\ LV DLPHG DW XQGHUJUDGXDWHV LGHQWLW\µ HPSKDVLV KLV +H JRHV RQ -2- $ ZRQGHUIXOO\ SURGXFWLYH IHDWXUH RI &KHPHUV· RUJDQL]D WLRQDO VWUXFWXUH ZKLFK OD\HUV KLVWRULRJUDSK\ WKHRU\ DQG SUDFWLFH LV WKH ZD\ LW FRQVWUXFWV SURGXFWLRQ GUDPDWXUJ\ DV IRXQGDWLRQDO WR QHZ SOD\ GUDPDWXUJ\ 3HUKDSV WKLV LV WKH UHVXOW RI WKH ERRN·V DQWLFLSDWHG XQGHUJUDGXDWH VWXGHQW DXGLHQFH ZKR LV OHVV OLNHO\ WR ZRUN LQ QHZ SOD\ GHYHORSPHQW ,W LV DOVR D FRQQHFWLRQ , ZRXOG OLNH WR VHH &KHPHUV H[SORUH WR JUHDWHU HIIHFW EH\RQG HQFRXUDJ LQJ WKH XVH RI ´*RHWKH·V µ WR LGHQWLI\ VWUXFWXUDO HOHPHQWV LQ ERWK HVWDEOLVKHG DQG HPHUJLQJ WH[WV 0D\EH LQ D IROORZ XS ERRN" ,W PLJKW WHPSHU WKH UHOLDQFH XSRQ KLHUDUFK\ DQG GLUHFWRULDO YLVLRQ DQG RIIHU GLIIHUHQW PRGHOV IRU FROODERUDWLRQ WR WKH QH[W JHQHUDWLRQ RI WKHDWHU DUWLVWV -6% *RRG SRLQW :KLOH , DSSUHFLDWHG WKH UHYLVLRQLVW DSSURDFK WR KLVWRULFL]LQJ GUDPDWXUJ\ UHFODLPLQJ VHYHUDO SUH /HVVLQJ Ã&#x20AC;JXUHV DV XU GUDPDWXUJV , ZDV GLVDSSRLQWHG WKDW $SSHQGL[ % GLG QRW LQ FOXGH +LVWRU\ RI 7KHDWUH LQ LWV ´WKHDWUH KLVWRU\µ VHFWLRQ , UHFNRQ , VKRXOG DYRLG MXGJLQJ &KHPHUV E\ WKH W\UDQQ\ RI FRPSOHWHQHVV

+LVWRU\ LV DIWHU DOO SUHVHQWDEOH RQO\ DV D VHULHV RI VWRULHV WKDW FRPPXQLWLHV WHOO DERXW WKHLU RULJLQV DQG GHYHORSPHQWV WULXPSKV DQG VWUXJJOHV DQG WRJHWKHU WKHVH FUHDWH D VHQVH RI WKH VRFLHW\ DQG WKH LQGLYLGXDO·V UROH ZLWKLQ LW ,·P VWXFN RQ WKLV SDVVDJH EHFDXVH LW H[SUHVVHV SHUKDSV XQZLW WLQJO\ &KHPHUV· DSSURDFK WR LQWURGXFLQJ WKH Ã&#x20AC;HOG RI GUDPDWXUJ\ ,W DOVR VSHDNV WR WKH LQHYLWDEOH JDSV DEVHQFHV DQG DEEUHYLDWLRQV WKDW SODJXH ´LQWURGXFWRU\µ WH[WV -6% &DQ \RX H[SDQG RQ WKLV WKRXJKW" ,V \RXU FRQFHUQ WKDW KH XVHV WKH LGHQWLW\ OHQV WR WKH H[FOXVLRQ RI RWKHU DSSURDFKHV RU WKDW KH IRUFHV D QDPLQJ FODLPLQJ DSSURDFK" -2- , FLWH WKLV PRPHQW QRW IRU FULWLTXH EXW WKH SURGXFWLYH ZD\ , ZDQW WR VHH &KHPHUV· ZULWLQJ DERXW GUDPDWXUJ\ DV LQKHUHQWO\ GUD PDWXUJLFDO 7KLV TXRWH VHHPHG WR H[HPSOLI\ KRZ D GUDPDWXUJ·V PLQGVHW DQG SUDFWLFHV KHU LGHQWLW\ LI \RX ZLOO LV GLUHFWO\ FRQ 5HYLHZ

QHFWHG WR WKH YDULHG KLVWRULHV RI GUDPDWXUJLFDO SUDFWLFH DQG WKHRU\ LQ WKH $PHULFDQ WKHDWHU $URXQG WKLV TXRWH &KHPHUV WDONV DERXW WKH LPSRUWDQFH RI KLVWRULFDO UHVHDUFK WR WKH SUDFWLFH RI GUDPDWXUJ\ KRZ D GUDPDWXUJ VKRXOG UHDG KLVWRU\ ERWK RI WKHDWHU SUDFWLFHV DQG RI VSHFLÃ&#x20AC;F VFULSWV ZLWK KHU H\H Ã&#x20AC;UPO\ WUDLQHG RQ LWV QDUUDWLYH FRQ VWUXFWLRQ DQG KHU XQGHUVWDQGLQJ WKDW DOO KLVWRULHV DUH QHFHVVDULO\ SDUWLDO ,W VHHPV LPSRUWDQW WKDW ZH UHDG &KHPHUV· WH[W LWVHOI ZLWK WKLV IDFW LQ PLQG +RZ XQGUDPDWXUJLFDO ZRXOG LW EH WR KROG WKH WH[W XS DV GHÃ&#x20AC;QLWLYH RU FRQYHUVHO\ FULWLFL]H LWV H[FOXVLRQV DV IDLOXUH 7KH ´1HZ 3OD\Vµ FKDSWHU KRZHYHU VHHPV GHFLGHGO\ WKLQ FRQVLGHU LQJ WKH WUHPHQGRXVO\ GLIÃ&#x20AC;FXOW FUDIW RI GHYHORSLQJ QHZ ZRUN $OVR E\ VDQGZLFKLQJ GLVFXVVLRQV RI GHYLVHG GRFXPHQWDU\ DQG DGDSWDWLRQ GUD PDWXUJ\ ZLWKLQ WKDW FKDSWHU &KHPHUV VKRUW FKDQJHV DOO WKUHH GRPDLQV , ZDV QHYHU PRUH DZDUH RI WKH DEVHQFH RI D WRSLF³WUDQVODWLRQ DV GUD PDWXUJ\ GUDPDWXUJLQJ WUDQVODWHG VFULSWV³DV , ZDV LQ WKLV FKDSWHU -6% 7KLV REVHUYDWLRQ LV DOO WKH PRUH VXUSULVLQJ JLYHQ WKH IDFW WKDW &KHPHUV DORQJ ZLWK - $ %DOO KDV WUDQVODWHG DGDSWHG $ULVWR SKDQHV· /\VLVWUDWD DQG WKDW KH KROGV DQ 0)$ LQ SOD\ZULWLQJ -2- , ZRQGHU LI LW·V PRUH SURGXFWLYH WR WXUQ WKLV FULWLTXH LQWR D RE VHUYDWLRQ WKDW &KHPHUV PLJKW XVH LQ KLV QH[W ERRN SURSRVDO WKHUH·V D GHVLUH IRU PRUH IXOO OHQJWK VWXGLHV DERXW VSHFLÃ&#x20AC;F DVSHFWV RI GUD PDWXUJLFDO SUD[LV VXFK DV WUDQVODWLRQ DGDSWDWLRQ FROODERUDWLYH GH YLVLQJ GLJLWXUJ\ DPRQJ RWKHUV -6% :KHWKHU WDNHQ E\ &KHPHUV RU RWKHUV WKH WLPH LV FHUWDLQO\ ULSH IRU FRQWLQXLQJ DQG H[SDQGLQJ WKH FRQYHUVDWLRQ DERXW GUDPD WXUJ\ LQ KLJKHU HGXFDWLRQ ERWK VWDWHVLGH DQG WKURXJKRXW WKH $PHU LFDV <RXU DWWUDFWLRQ WR &KHPHUV· KROLVWLF DSSURDFK WR GUDPDWXUJ\ KRZ WR EH D GUDPDWXUJ UDWKHU WKDQ GRLQJ GUDPDWXUJ\ VHHPV HV SHFLDOO\ ZRUWK\ RI IXUWKHU H[SORUDWLRQ JLYHQ P\ FXUUHQW UHVHDUFK $SSURSULDWHO\ HQRXJK RYHU WKH FRXUVH RI RXU FROODERUDWLRQ IRU WKLV UHYLHZ ,·YH FRPH WR UHDOL]H MXVW KRZ OLPLQDO GUDPDWXUJ\ LV³D IDFW WKDW &KHPHUV ERWK UHFRJQL]HV ZLWK KLV RYHUDOO PHWDSKRU RI GUDPD WXUJ\ DV WKH ´JKRVW OLJKWµ LQ WKHDWUH DQG LJQRUHV LQ KLV GHIHUHQFH WR KLHUDUFK\ DQG GHFRUXP LQ KLV HLJKWK FKDSWHU ´7KH &RPSDQ\µ

5HFHQWO\ ,·YH EHHQ H[SORULQJ WKH FRQQHFWLRQV EHWZHHQ ERG\ PLQG VSLULW DQG SHGDJRJ\³WKLV VDPH \RJLF OHQV VHHPV DSSURSULDWH IRU UHWKLQNLQJ GUDPDWXUJ\ D NLQG RI \RJDWXUJ\ LI \RX ZLOO (YHQ ZLWK RXW WKLV VSHFLÃ&#x20AC;F IRFXV DV , PHQWLRQHG HDUOLHU ,·P IDVFLQDWHG E\ WKH SURPLVH RI WUDQVIHUDEOH VNLOOV LQKHUHQW LQ JRRG GUDPDWXUJ\ +RZ FDQ WUDLQLQJ LQ GUDPDWXUJ\ EHWWHU SUHSDUH VRFLDO DFWLYLVWV PXVHXP GHVLJQHUV DQG HQWUHSUHQHXUV" 0\ VWXGHQWV ZRXOG Ã&#x20AC;QG D WH[WERRN H[SORULQJ WKHVH TXHVWLRQV LQWULJXLQJ DV ZRXOG , -2- $V ZRXOG , 8OWLPDWHO\ QR RQH ERRN FDQ DGGUHVV HYHU\ QRRN DQG FUDQQ\ RI ´WKH JDUGHQ RI IRUNLQJ SDWKVµ RQH RI &KHPHUV· PXFK ORYHG PHWDSKRUV WKDW LV $PHULFDQ GUDPDWXUJ\ $V KLV LPDJLQHG DXGLHQFH LV WKH XQGHUJUDGXDWH VWXGHQW LQ WKHLU Ã&#x20AC;UVW DQG SRVVLEO\ RQO\ GUDPDWXUJ\ FRXUVH &KHPHUV HUUV RQ WKH VLGH RI ZHDYLQJ GUDPDWXUJLFDO SUDFWLFHV LQWR WKH ZDUS DQG ZHIW RI $PHULFDQ WKHDWHU·V KLVWRULRJUDSKLFDO WKHR UHWLFDO DQG SURIHVVLRQDO WUDMHFWRULHV 6XFK DQ DSSURDFK IRU EHWWHU RU ZRUVH XUJHV WKHVH WZR UHDGHUV LQVWUXFWRUV RI VDLG VWXGHQWV· RQH RQO\ GUDPDWXUJ\ FRXUVH WR SUREH WKH ERRN·V RZQ GUDPDWXUJLFDO ERXQGDU LHV WR ´JR GHHS µ ´JR ZLGH µ DQG ´JR ORQJ µ MXVW DV WKH H[HUFLVHV DW WKH HQG RI HDFK FKDSWHU HQFRXUDJH RXU VWXGHQWV WR GR 5HYLHZ

127(6 6WDUWLQJ LQ WKH DFDGHPLF \HDU &KHPHUV ZLOO EH DQ $V VRFLDWH 3URIHVVRU DW 8& 6DQWD &UX] ZKHUH KH ZLOO WHDFK FRXUVHV LQ GUDPDWXUJ\ DQG WKHDWUH KLVWRU\ OLWHUDWXUH WKHRU\

$SFBUJWF 1SPDFTT JO 5IFBUSJDBM 5SBOTMBUJPO "O *OUFSWJFX XJUI "EBN 7FSTÏOZJ E\ +HFWRU *DU]D +HFWRU *DU]D :KDW ZDV \RXU UDWLRQDOH EHKLQG VWDUWLQJ 7KH 0HU FXULDQ " :KDW GR \RX KRSH WR DFFRPSOLVK" $GDP 9HUVpQ\L 7KH LQLWLDO LPSXOVH IRU LW ZDV WKDW ZLWK WKH GHPLVH RI 0RGHUQ ,QWHUQDWLRQDO 'UDPD³DERXW \HDUV DJR QRZ³WKHUH ZDV QR ORQJHU DQ\ SODFH GHGLFDWHG VSHFLÀ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·YH VHHQ LQ WKH VXEPLVVLRQ FULWHULD WKDW ZH·OO SXEOLVK DQ\WKLQJ KDYLQJ WR GR ZLWK WKLV DUHD RI WUDQVODWLRQ WKHRUHWLFDO DUWLFOHV SURGXFWLRQ KLVWRULHV SRVLWLRQ SDSHUV UDQWV PDQLIHVWRV , WKLQN WKHDWULFDO WUDQVODWLRQ KDV UHDOO\ RQO\ UHFHQWO\ EHFRPH VRPHWKLQJ WKDW SHRSOH DUH SD\LQJ DWWHQWLRQ WR LQ DQ LPSRUWDQW ZD\ ,W LV E\ QR PHDQV DV ZLGHVSUHDG D NLQG RI DWWHQWLRQ DV ERWK RI XV ZRXOG OLNH EXW WKHUH LV LQFUHDVLQJ WKRXJKW EHLQJ SDLG $QG WKH RWKHU WKLQJ ZDV WKDW SDUWLFXODUO\ IRU P\ ÀHOG /DWLQ $PHULFDQ 7KHDWUH LV WKDW ZKHQ , EHJDQ WR WUDQVODWH /DWLQ $PHULFDQ 7KHDWUH LQ WKH HDUO\ V WKHUH ZHUH IHZ LI DQ\ SHRSOH ZRUNLQJ RQ /DWLQ $PHULFDQ 7KHDWUH FRPLQJ RXW RI WKHDWUH VWXGLHV 7KH\ ZHUH DOO FRPLQJ RXW RI ODQJXDJH DQG OLWHUDWXUH GHSDUWPHQWV DQG WKH UHVXOW KDG EHHQ WKDW IRU TXLWH D QXPEHU RI \HDUV DQ\ /DWLQ $PHULFDQ WKHDWUH WKDW ZDV WUDQVODWHG WHQGHG WR EH WUDQVODWHG E\ SHRSOH ZKR NQHZ QRWKLQJ DERXW WKH WKHDWUH DQG WKH ZRUN ZDV SUHWW\ PXFK XQSOD\DEOH :H DUH QRZ LQFUHDVLQJO\ LQ WKH VLWXDWLRQ LQ WHUPV RI /DWLQ $PHULFD ZKHUH WKDW LV QR ORQJHU WKH FDVH , FDQ WKLQN RI KDOI D GR]HQ SHRSOH RII WKH WRS RI P\ KHDG ZKR DUH GRLQJ WUDQVOD WLRQV RI /DWLQ $PHULFDQ 7KHDWUH

$'$0 9(56e1<, LV WKH 0LOO\ 6 %DUUDQJHU 'LVWLQ JXLVKHG 7HUP 3URIHVVRU RI 'UDPDWLF $UW DQG 'UDPDWXUJ IRU 3OD\0DNHUV 5HSHUWRU\ &RPSDQ\ +LV WUDQVODWLRQV RI $UJHQWLQH SOD\ZULJKWV $JXVWtQ &X]]DQL DQG *ULVHOGD *DPEDUR DQG 0H[LFDQ SOD\ZULJKW 6DELQD %HUPDQ KDYH EHHQ SHUIRUPHG DW +(5( $UWV &HQWHU )ORULGD 6WXGLR 7KHDWUH DQG D QXPEHU RI FROOHJHV DQG XQLYHUVL WLHV $ WKHDWUH VFKRODU GUDPDWXUJ FULWLF WUDQVODWRU DQG GLUHFWRU KH LV WKH DXWKRU RI 7KHDWUH LQ /DWLQ $PHULFD 5HOLJLRQ 3ROLWLFV DQG &XOWXUH )URP &RUWp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

5HYLHZ

$GDP 9HUVpQ\L

1)050 30#*/ ,*3,

6R ZLWK 7KH 0HUFXULDQ , ZDQWHG LW WR EH D VSDFH ZKHUH \RX FRXOG ERWK JHW DFFHVV WR WKHDWULFDO WUDQVODWLRQV DQG D SODFH IRU WKLQNLQJ DERXW WKH QDWXUH RI WKHDWULFDO WUDQVODWLRQV 7KH ZD\ WKDW 7KH 0HUFX ULDQ ZRUNV , ZLOO SXEOLVK WUDQVODWLRQV IURP DQ\ ODQJXDJH IURP WKH ZRUOG LQWR (QJOLVK DQG WKDW LV DQRWKHU LPSRUWDQW DVSHFW RI LW IRU PH ,·P QRW TXLWH VXUH ZKDW WKH VWDWLVWLFV DUH DW WKH PRPHQW EXW WKH SHU FHQWDJH RI WUDQVODWLRQV LQWR (QJOLVK IURP RWKHU WKHDWUHV RWKHU OLWHUD WXUHV IRU WKDW PDWWHU WKH VWXII WKDW JHWV SXEOLVKHG LV WLQ\ :H KDYH QR WUDGLWLRQ RI WUDQVODWLRQ LQ WKH 8QLWHG 6WDWHV <RX NQRZ SDUW RI WKDW LV XQGHUVWDQGDEOH :H DUH D KXJH FRXQWU\ , WKLQN WKH ODWHVW VWDWLVWLF LV WKDW RI 8 6 FLWL]HQV GR QRW SRVVHVV D SDVVSRUW

ODWLQJ WKHDWUH IURP DQRWKHU ODQJXDJH LQWR (QJOLVK JLYHV XV QHZ SHUVSHFWLYHV DQG QHZ ZD\V RI VHHLQJ RI EHLQJ RI FUHDWLQJ +* , NQRZ WKH SXUYLHZ RI 7KH 0HUFXULDQ LV WR WUDQVODWH LQWR (QJ OLVK EXW KDYH \RX WKRXJKW DERXW SXEOLVKLQJ LQ RWKHU ODQJXDJHV IRU WKH VDNH RI WKH RULJLQDO" ,Q 7KH 0HUFXULDQ DOO ZH VHH LV WKH WDUJHW KRZ GR ZH RSHQ XS PRUH RI DQ RSSRUWXQLW\ WR VHH WKH VRXUFH IRU ZKDW LW LV"

$9 7KHUH FHUWDLQO\ DUH SXEOLFDWLRQV RI WKLQJV WKDW DUH SXUSRVHIXOO\ ELOLQJXDO VR WKDW WKH UHDGHU FDQ ORRN IURP RQH WR WKH RWKHU $Q RWKHU PRWLYDWLRQ IRU 7KH 0HUFXULDQ LQ JHQHUDO WKDW , GLGQ·W PHQWLRQ +* :LWK 7KH 0HUFXULDQ DUH \RX ORRNLQJ WR EUHDN GRZQ VRPH RI HDUOLHU FRPHV RXW RI P\ IUXVWUDWLRQ ZLWK JHWWLQJ P\ RZQ WUDQVOD WKRVH ZDOOV VR WKDW LW LV PRUH DFFHSWDEOH WR EULQJ LQ SOD\V IURP RWKHU WLRQV LQWR 8 6 WKHDWUHV $QRWKHU GHÀQLWH WKUXVW IRU WKH MRXUQDO LV SODFHV LQ WHUPV RI FUHDWLQJ D GLYHUVH FDQRQ ZLWKLQ ZKDW ZH FRQVLGHU SXEOLVKLQJ WKLQJV LQ RUGHU WR PRYH WKHP WR SURGXFWLRQ 6R LQ WKDW ZRUWK\ RI EHLQJ SURGXFHG" UHJDUG GRLQJ ELOLQJXDO WUDQVODWLRQV ZKLFK , WKLQN FDQ EH PRUH RI D VFKRODUO\ NLQG RI HQGHDYRU SHUKDSV LV QRW WKH GLUHFWLRQ , ZDQWHG WR $9 $EVROXWHO\ ,I \RX WDON WR SOD\ZULJKWV LQ (XURSH RU LQ /DWLQ WDNH WKH MRXUQDO 1RW WKDW WKHUH LVQ·W YDOXH WR GRLQJ WKDW 6RPHERG\ $PHULFD IRU WKDW PDWWHU WKH\ ZLOO WDON DERXW WKHLU RZQ DUW DQG WKHLU LV VLWWLQJ GRZQ WR WUDQVODWH GHSHQGLQJ XSRQ WKH SLHFH PLJKW ZDQW RZQ DUWLVWLF SURFHVV DV EHLQJ LQÁXHQFHG E\ FKDOOHQJHG E\ WKHDWUH WR ORRN DW SUHYLRXVO\ H[LVWLQJ WUDQVODWLRQ , SUHIHU WR ZRUN IURP WKH IURP RWKHU SODFHV LQ DGGLWLRQ WR WKHLU RZQ ,W DOZD\V VHHPV WR PH VRXUFH DOO RI WKH WLPH UDWKHU WKDQ VRPHERG\ HOVH·V WDNH XSRQ LW WKDW WKH PRUH WKHDWUH LV KDSSHQLQJ WKH PRUH WKHDWUH ZLOO KDSSHQ ,PSRVLQJ UHVWULFWLRQV LV XOWLPDWHO\ VHOI GHIHDWLQJ <RX FXW \RXU +* $V , ORRNHG WKURXJK VRPH RI WKH SURFHVVHV IRU WUDQVODWLQJ IHD RZQ WKURDW WKDW ZD\ 7KLV DOVR PD\ FRPH RXW RI P\ RZQ EDFN WXUHG LQ 7KH 0HUFXULDQ $QG\ %UDJHQ·V WUDQVODWLRQ RI 9HQJHDQFH JURXQG 0\ IDWKHU FDPH WR WKH 6WDWHV IURP +XQJDU\ LQ DQG &DQ :DLW VWDQGV RXW +H DGPLWV WKDW KH GRHV QRW NQRZ -DSDQHVH DV D +XQJDULDQ VLQFH QRERG\ RWKHU WKDQ +XQJDULDQV VSHDN +XQ +H KDG WR GHSHQG RQ VRPHERG\ HOVH WR GR D OLWHUDO WUDQVODWLRQ VR JDULDQ KH VSRNH RWKHU ODQJXDJHV $QG P\ PRWKHU ZDV ERUQ LQ WKDW KH FRXOG WUDQVODWH LW IRU WKH VWDJH 7KH TXHVWLRQ WKDW , ZDQW WR %URRNO\Q DQG UDLVHG VSHDNLQJ <LGGLVK DV KHU ÀUVW ODQJXDJH 6R LW DVN LV :KR FDQ WUDQVODWH" :KDW LV WKH DSSURSULDWH OHYHO RI IDPLO ZDV YHU\ LPSRUWDQW WR P\ SDUHQWV WKDW P\ VLVWHU DQG , DW OHDVW NQHZ LDULW\ ZLWK VRXUFH" RQH RWKHU ODQJXDJH WKH\ GLGQ·W FDUH ZKDW LW ZDV :H NQRZ WKDW UH DOO\ EHFRPLQJ ÁXHQW LQ DQRWKHU ODQJXDJH PHDQV WKDW \RX VHH WKLQJV $9 $QRWKHU DVSHFW RI 7KH 0HUFXULDQ LV WKDW LW VSHDNV WR WKLV GLIIHUHQWO\ \RX WKLQN LQ D GLIIHUHQW ZD\ %\ WKH VDPH WRNHQ WUDQV DQG JRHV WR ZKDW WKH VWUXFWXUH RI WKH 7KHDWULFDO 7UDQVODWLRQ DV 5HYLHZ

&UHDWLYH 3URFHVV $ &RQIHUHQFH )HVWLYDO ZDV DOO DERXW :LWK WKH MRXUQDO , ZDQWHG WR RSHQ XS D VSDFH IRU WDONLQJ DERXW WKH QDWXUH RI WKHDWULFDO WUDQVODWLRQ , DOVR GLGQ·W ZDQW WR FORVH GRZQ WKH GHILQLWLRQ RI WKHDWULFDO WUDQVODWLRQ , WKLQN WKHUH DV PDQ\ GLIIHUHQW ZD\V RI WUDQVODWLQJ DV WKHUH DUH WUDQVODWRUV )URP P\ RZQ SUDFWLFH RI WUDQVODWLRQ LW VHHPV WR PH WKHUH LV FRQWLQXXP :RUNLQJ RQ /DWLQ $PHULFDQ WKHDWUH , DP IUHTXHQWO\ WKH Ã&#x20AC;UVW SHUVRQ WUDQVODWLQJ VRPHWKLQJ LQWR (QJOLVK $QG WKHUH IRUH , IHHO OLNH , KDYH D UHVSRQVLELOLW\ WR KHZ DV FORVHO\ WR WKH RULJLQDO DV , FDQ 3DUWLFXODUO\ IRU SXEOLFDWLRQ LW PLJKW EH GLI IHUHQW LI , DP LQ D UHKHDUVDO KDOO DQG ,·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Ã&#x20AC;UVW VFUHDPLQJ ´, ORYH P\ GDXJKWHU , ORYH P\ ZLIH µ $QG DV KH GRHV VR KH FURVVHV KLPVHOI 6R LQ HDUO\ DQG VRPHWKLQJ .LUVWHQ 1LJUR ZKR ZDV WKHQ DW WKH 8QLYHUVLW\ RI &LQFLQQDWL GLG D IHVWLYDO FRQIHUHQFH FDOOHG 8Q (VFHQDULR 3URSLR $ 6WDJH RI WKHLU 2ZQ RQ IHPDOH 6SDQLVK DQG /DWLQ $PHULFDQ SOD\ZULJKWV DQG DVNHG PH WR FRPH DQG GLUHFW D VWDJHG UHDGLQJ RI 7KH $JRQ\ RI (FVWDV\ ZKLFK , GLG 6DELQD ZDV WKHUH DQG DIWHUZDUGV ZH ZHUH WDONLQJ DQG VKH VDLG ´:HOO WKH 8 6 LVQ·W D &DWKROLF FRXQWU\ :K\ GRQ·W \RX µ 7KLV ZDV ULJKW DURXQG WKH WLPH ZKHQ -LPP\ 6ZDJJDUW DQG DOO RI WKHVH 0RUDO 0DMRULW\ SUHDFKHUV ZHUH EHLQJ GLVFRYHUHG KDYLQJ DIIDLUV ZLWK SURVWLWXWHV ERWK PDOH DQG IHPDOH $QG VKH VDLG ´:HOO ZK\ GRQ·W \RX FKDQJH LW WR RQH RI WKRVH SUHDFKHUV 0DNH WKH PDOH LQ WKLV SLHFH OLNH WKDW"µ $QG P\ UHVSRQVH ZDV RQFH WKH SOD\ KDV EHHQ WUDQVODWHG RQFH WKDW Ã&#x20AC;UVW WUDQVODWLRQ KDV EHHQ GRQH RQFH LW·V EHHQ SXEOLVKHG WKHQ WKDW ZRXOG EH D ZRQGHU IXO WKLQJ IRU D GLUHFWRU WR GR ,W ZRXOG WDNH LW IXUWKHU LQ WHUPV RI WKH SURGXFWLRQ EXW WKDW , GLGQ·W IHHO FRPIRUWDEOH GRLQJ WKDW QRZ $QG , JXHVV ZKDW , DP VD\LQJ LV LV WKDW WKHUH LV WKLV NLQG RI FRQWLQXXP LW VHHPV WR PH 7KDW LI \RX·UH WUDQVODWLQJ VRPH WKLQJ IRU WKH Ã&#x20AC;UVW WLPH \RX GRQ·W ZDQW WR RU , ZRXOGQ·W ZDQW WR JR WRZDUG DGDSWDWLRQ ,I RQFH LW·V EHHQ WUDQVODWHG RQFH WKDW WUDQVODWLRQ H[LVWV WKHQ , DP WKLQNLQJ LQ WHUPV RI SURGXFWLRQ WKHQ WKHUH DUH IXUWKHU VWHSV WKDW , PLJKW ZDQW WR WDNH $QG LQ WKH FDVH RI VRPHWKLQJ OLNH 9HQJHDQFH &DQ :DLW \RX NQRZ , GRQ·W UHPHPEHU LI $QG\ WDONHG DERXW WKH ZKROH EDFNJURXQG RI KRZ WKDW WUDQVODWLRQ FDPH DERXW %XW , DP DVVXPLQJ WKDW WKHUH ZDV VRPHWKLQJ DERXW WKH RULJLQDO -DSDQHVH WKDW DWWUDFWHG KLP 2QH RI WKH EHVW SLHFHV RI WKHDWUH , FDQ UHPHPEHU HYHU VHHLQJ ZDV LQ WKH PLG V DW /D 0DPD LW ZDV D 3HUVLDQ WKHDWUH FRPSDQ\ , GLGQ·W XQGHUVWDQG D EORRG\ ZRUG EXW , FDQ VWLOO UHPHPEHU WKDW H[ SHULHQFH 6R LI LQ WKLV FDVH VRPHWKLQJ OLNH WKDW RFFXUUHG DQG \RX ZDQW WR Ã&#x20AC;QG D ZD\ RI UHFUHDWLQJ WKDW H[SHULHQFH EXW \RX \RXUVHOI GRQ·W NQRZ WKH VRXUFH ODQJXDJH WKHQ ZRUNLQJ IURP D NLQG RI

LQWHU WH[W D OLWHUDO WUDQVODWLRQ PDNHV VHQVH WR PH 3URYLGHG WKDW HYHU\RQH LQYROYHG LV WKLQNLQJ WKHDWULFDOO\ <RX NQRZ WKH RWKHU ELJ H[DPSOH RI WKLV , SXEOLVKHG LQ 7KH 0HUFXULDQ LV /LEE\ $S SHO DQG $OOLVRQ +RUVHO\·V &KHNKRY WUDQVODWLRQV 7KHUH \RX·YH JRW DQ H[WUHPHO\ H[SHULHQFHG GLUHFWRU DQG D YHU\ H[SHULHQFHG GUDPDWXUJ ZRUNLQJ MRLQWO\ $OOLVRQ LV GRLQJ D OLWHUDO WUDQVODWLRQ EXW LI \RX ORRN DW KHU OLWHUDO WUDQVODWLRQ LQ IDFW LW·V QRW MXVW D OLWHUDO WUDQVODWLRQ , ZDV MXVW WHDFKLQJ ERWK WKHLU WUDQVODWLRQV RI 6HDJXOO DQG 8QFOH 9DQ\D , JDYH WKH VWXGHQWV $OOLVRQ·V OLWHUDO WUDQVODWLRQV WR ORRN DW DORQJVLGH WKH Ã&#x20AC;QLVKHG WUDQVODWLRQ EHFDXVH ZKDW VKH GRHV LQ WKH OLWHUDO WUDQVODWLRQ LV UDWKHU WKDQ FORVH GRZQ WKH WUDQVODWLRQ VKH RSHQV LW XS 6KH GRHVQ·W JLYH /LEE\ KHU LGHD RI KRZ LW RXJKW WR EH WUDQVODWHG ZKDW WKH OLWHUDO UHQGLWLRQ LV UDWKHU VKH IUHTXHQWO\ SURYLGHV GLIIHUHQW SRVVLEOH PHDQLQJV IRU D JLYHQ ZRUG 2U VKH ZLOO SXW LQWR SDUHQWKHVHV VRPHWKLQJ KDYLQJ WR GR ZLWK WKH FXOWXUDO PHDQLQJ RI WKDW SDUWLFXODU VD\LQJ 6R LW LV QRW VLPSO\ SURYLGLQJ /LEE\ ZLWK WKH GLDORJXH LW LV D PXFK PRUH DPSOH YLVLRQ RI WKH 5XVVLDQ +* 7KDW·V JUHDW 7DON WR PH DERXW LQVWDQFHV ZKHUH \RX NQHZ WKDW , DP QRW QHFHVVDULO\ JRLQJ WR JHW D SURGXFWLRQ EXW , VWLOO QHHG WR WUDQV ODWH WKLV SOD\ $QG KRZ WKDW GLIIHUHG IURP RWKHU SURFHVVHV ZKHUH \RX NQHZ \RX ZHUH JRLQJ WR JHW D FKDQFH WR ZRUN ZLWK WKH WUDQVODWLRQ LQ WKH UHKHDUVDO VSDFH $UH WKHUH PDUNHG GLIIHUHQFHV EHWZHHQ WKH WZR DQG \RXU ZRUN DV WKH WUDQVODWRU DV \RX VLW GRZQ WR GR WKDW ZRUN" $9 ,·YH QHYHU DFWXDOO\ KDG WKH H[SHULHQFH RI ZRUNLQJ WKDW ZD\ :HOO QR WKDW·V QRW WUXH (YHU\WKLQJ WKDW ,·YH WUDQVODWHG ,·YH EH JXQ RQ P\ RZQ 7KLV LV D SLHFH RI PDWHULDO , ORYH , ZDQW LW WR KDYH D ZLGHU DXGLHQFH , DP JRLQJ WR WUDQVODWH LW $QG , ZDQW WR JHW LW SURGXFHG XOWLPDWHO\ 6R ZKHQ ,·P WUDQVODWLQJ KRZHYHU HYHQ LI LW·V PH DORQH LQ WKH URRP , DP FRQVWDQWO\ PRYLQJ EDFN DQG IRUWK EHWZHHQ GLIIHUHQW SHUVSHFWLYHV WUDQVODWRU GUDPDWXUJ GLUHFWRU DFWRU WHDFKHU , DP PRYLQJ EDFN DQG IRUWK EHWZHHQ DOO RI WKRVH KDWV VR LQ D FHUWDLQ VHQVH WKHUH LV PRUH WKDQ RQH SHUVRQ LQ WKH URRP $QG WKHQ E\ QR PHDQV GR , FRQVLGHU DQ\WKLQJ WKDW , WUDQVODWH WR EH Ã&#x20AC;QLVKHG XQWLO ,·YH KHDUG LW LQ DFWRUV· PRXWKV LQ VRPH IDVKLRQ ZKHWKHU WKDW LV MXVW JHWWLQJ D EXQFK RI DFWRUV WR JHWKHU DQG KDYLQJ WKHP UHDG LW IRU PH GRLQJ D VWDJHG UHDGLQJ RU ZKDWHYHU LW PLJKW EH EHFDXVH \RX GLVFRYHU VR PXFK ZKHQ \RX KHDU WKH ODQJXDJH WKDW \RX GRQ·W QHFHVVDULO\ Ã&#x20AC;QG ZKHQ \RX·UH RQO\ KHDULQJ LW LQ \RXU PLQG 7KH RQH H[SHULHQFH WKDW ,·YH KDG RI ZRUNLQJ RQ D WUDQVODWLRQ EH \RQG WKDW³WKH 7- DUWLFOH WKDW , SXEOLVKHG JRHV LQWR WKLV LQ PXFK PRUH GHWDLO³ZDV WDNLQJ P\ WUDQVODWLRQ RI *ULVHOGD *DPEDUR·V %LWWHU %ORRG WR )ORULGD 6WXGLR 7KHDWUH DQG ZH GLG D ZRUNVKRS WKHUH IRU D FRXSOH RI ZHHNV EHFDXVH WKH GLUHFWRU 5LFKDUG +RSNLQV ZDV FRQFHUQHG³KH ORYHG WKH SOD\³EXW KH ZDV FRQFHUQHG WKDW LW ZDV WRR $UJHQWLQH DQG WKDW LW ZRXOGQ·W UHDG IRU 8 6 DXGLHQFHV 3DUW RI WKDW LV WKDW LW LV YHU\ PXFK D SOD\ WKDW FRPHV RXW RI WKH JUR WHVFR FULROOR WUDGLWLRQ :H GRQ·W KDYH D WUDGLWLRQ RI WKH JURWHVTXH LQ WKH 8 6 6R ZH GLG WZR WKLQJV RQH ZDV WR VD\ WR WKH FDVW RND\ WKH FORVHVW WKDW ZH·YH JRW WKDW , FDQ WKLQN RI WR WKH VW\OH LQ ZKLFK WKLV SOD\ QHHGV WR EH GRQH LV &KDUOHV $GGDPV FDUWRRQV WKH DFWXDO FDUWRRQV RI WKH $GGDPV IDPLO\ QRW WKH 79 VKRZ QRW WKH PRYLH 6R ZH SODVWHUHG WKH ZDOOV ZLWK WKRVH <RX NQRZ LW·V &KULVWPDV DQG WKHUH DUH D EXQFK RI FDUROHUV RXWVLGH RI WKH $GGDPV )DPLO\·V IDOO LQJ GRZQ PDQVLRQ DQG WKH\·UH XS RQ WKH URRI WLSSLQJ RYHU D FDXO 5HYLHZ

GURQ RI ERLOLQJ RLO <RX NQRZ LW LV ERWK WHUULEOH DQG K\VWHULFDOO\ IXQQ\ DW WKH VDPH WLPH $QG WKDW·V ZKDW WKH JURWHVFR FULROOR WULHV WR FDSWXUH 6R WKDW ZDV RQH ZD\ ZH WULHG WR LPEXH WKH SOD\ LQ SUR GXFWLRQ ZLWK TXDOLWLHV WKDW ZRXOGQ·W EH WKHUH RWKHUZLVH 7KH RWKHU WKLQJ WKDW ZH GLG ZDV WKDW ZH KDG D FRPSRVHU LQ UHVLGHQFH DQG KH ZRUNHG WR XQGHUVFRUH WKH HQWLUH SLHFH PXVLFDOO\ 7KH LGHD ZDV WKDW GHSHQGLQJ XSRQ WKH PXVLF WKH DXGLHQFH ZRXOG JHW DXUDO FXHV DV WR ZKHQ LW ZDV DSSURSULDWH WR ODXJK DQG ZKHQ LW ZDVQ·W %XW VHH WKDW·V DQRWKHU GLIIHUHQFH EHWZHHQ WUDQVODWLQJ IRU SXEOLFDWLRQ DQG WKLQNLQJ DERXW LW LQ WHUPV RI SURGXFWLRQ $V ZH GR ZLWK DQ\ RWKHU SLHFH ZKHWKHU LW·V , GRQ·W NQRZ 6DP 6KHSDUG 6X]DQ /RUL 3DUNV *HQHW &KHNKRY ZKHQ ZH DUH LQ WKH UHKHDUVDO KDOO ZH DUH ORRNLQJ IRU ZD\V WR JHW WKLV WKLQJ DOLYH $QG , WKLQN LQ WHUPV RI P\ RZQ SUDFWLFH LI , DP ZRUNLQJ RQ D SLHFH ,·YH WUDQVODWHG LQ UHKHDUVDO , DP JRLQJ WR VKLIW PRUH WRZDUGV WKH GUDPDWXUJLFDO KDW RU WKH GLUHFWRULDO KDW DQG , DP JR LQJ WR EHFRPH PXFK PRUH FRQFHUQHG ZLWK KRZ GR , JHQHUDWH PHDQLQJ LQ SHUIRUPDQFH WKDQ LV WKLV WKH ULJKW ZRUG" +HUH" +* , UHDOO\ ZDQW WR SDUVH WKH GLIIHUHQFH EHWZHHQ DOO WKH ´KDWVµ WKDW \RX ZHUH WDONLQJ DERXW GLUHFWRU GUDPDWXUJ FDQ ZH ORRN DW WKH WUDQVODWRU DV SOD\ZULJKW" :KDW DUH WKRVH GLIIHUHQW KDWV DQG ZKDW GR WKH\ EULQJ WR WKH WDEOH" 2U KRZ LV LW GLIIHUHQW LQ WHUPV RI KRZ ZH ORRN DW WKH WUDQVODWLRQ IURP WKRVH GLIIHUHQW SRLQWV RI YLHZ" $9 ,QWHUHVWLQJ TXHVWLRQ , JXHVV LW·V DQRWKHU NLQG RI FRQWLQXXP 7KH WUDQVODWRU LV WU\LQJ WR ÀQG WKH PRVW HIIHFWLYH YHKLFOH WR FRQ YH\ ZKDW·V LQ WKH VRXUFH ODQJXDJH LQ WKH WDUJHW ODQJXDJH ZKLFK PD\ RU PD\ QRW EH D RQH WR RQH FRUUHVSRQGHQFH 6R \RX WDNH WKDW VWHS RU , WDNH WKDW VWHS DQG WKHQ ZKHQ ,·P WUDQVODWLQJ P\ LQL WLDO SDVV LV DOZD\V D YHU\ UDSLG GLUW\ WUDQVODWLRQ , WUDQVODWH WKDW ÀUVW SDVV ZLWKRXW XVH RI GLFWLRQDULHV RU DQ\ NLQG RI DLGV ,W·V MXVW ´ZKDW DP , JHWWLQJ LPPHGLDWHO\"µ DQG LI , UXQ DFURVV ZRUGV RU SKUDVHV WKDW , GRQ·W IHHO WKDW ,·YH JRW D KROG RI , MXVW OHDYH WKHP LQ WKH 6SDQLVK DQG WKHQ PRYH RQ 7KHQ ,·OO JR EDFN DQG LQYHVWLJDWH WKRVH SODFHV ZKHUH , GLGQ·W FDWFK LW LPPHGLDWHO\ 6R LW IHHOV WR PH WKDW ZKDW ,·P EHJLQQLQJ WR GR DW WKDW SRLQW LV PRYLQJ LQWR D PRUH GUDPDWXUJLFDO ZRUOG ´:KDW·V WKH PHDQLQJ KHUH"µ $QG , WKLQN VRPHWKLQJ WKDW GUDPDWXUJV DUH SULPDULO\ FRQFHUQHG ZLWK LV ´KRZ LV WKH PHDQLQJ RI WKLV WH[W FRQYH\HG DQG SHUIRUPHG"µ 6R WKDW·V DQRWKHU VWHS DQG LW·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·P JRLQJ WR SLFN WKH WKLQJ XS DQG ORRN DW LW DV D GLUHFWRU DV LI LW·V VRPHERG\ HOVH·V SLHFH 2ND\ QRZ KRZ GRHV WKLV JHW LQWR SHUIRUPDQFH" +RZ LV LW FRQYH\HG WR WKH DXGLHQFH" $QG WKH UHVW RI WKH VWXII KDV WR IDOO DZD\ +* $QG ZKHQ \RX KDQG LW RII WR VRPHERG\ ZKDW LV WKHQ \RXU ZRUN WKDW VWLOO QHHGV WR EH GRQH LQ WKDW VSDFH" 5HYLHZ

$9 , WKLQN LW·V PXFK PRUH D GUDPDWXUJLFDO UROH \RX NQRZ" $V , ZLOO EH GRLQJ LQ D ZHHN RU VR IRU D SURGXFWLRQ DW 3OD\0DNHUV VRPH WKLQJ ZH·UH FDOOLQJ 7KH 0DNLQJ RI D .LQJ WKDW ZH·YH WDNHQ IURP 6KDNHVSHDUH·V +HQU\ ,9 3DUWV DQG FRPELQHG WKHP LQWR D VLQJOH HYHQLQJ DQG WKH\·OO SOD\ LQ UHS ZLWK +HQU\ 9 ZLWK WKH VDPH FDVW LQ ERWK 6R LQ WKDW FDVH DQG IRU LQVWDQFH LQ WKH FDVH RI %LWWHU %ORRG DW )ORULGD 6WXGLR 7KHDWUH ,·P ZRUNLQJ RQ WKH VKRZV DV D GUDPDWXUJ , WKLQN WKH GUDPDWXUJLFDO DVSHFW EHFRPHV PRUH LPSRUWDQW WKDQ WKH WUDQVODWRU DVSHFW DW WKDW SRLQW ,W OHDQV RYHU LQWR WKH WHDFKHU UROH WRR $QVZHULQJ TXHVWLRQV FODULI\LQJ WKLQJV IRU WKH DFWRUV WKH GLUHFWRU WKH GHVLJQHUV SURYLGLQJ WKHP ZLWK D FXOWXUDO FRQWH[W IURP ZKLFK WR FUHDWH WKLV ZRUN 7KHUH DUH WKLQJV WKDW DUH LQHYLWDEO\ QRW JRLQJ WR DSSHDU LQ WKH WH[W LWVHOI EXW QHHG WR EH ÁHVKHG RXW LQ VRPH ZD\ IRU WKLV WR WUXO\ ZRUN LQ SHUIRUPDQFH DQG FRQYH\ ZKDW WKH DFWRU DQG WKH SOD\ZULJKW LQ WKH VRXUFH ZDQWHG WR FRQYH\ $QG \RX DOZD\V PDNH DJDLQ UHJDUGOHVV RI ZKHWKHU \RX·UH ZRUNLQJ RQ % FKQHU RU 6KDNH VSHDUH RU :LOO (QR LQHYLWDEO\ \RX·UH JRLQJ WR PDNH FKRLFHV DV WR ZKDW \RX·UH JRLQJ WR H[SUHVV LQ WKLV SDUWLFXODU SURGXFWLRQ +* *RLQJ EDFN WR VRPHWKLQJ \RX VDLG HDUOLHU DQG , ZDV WKLQN LQJ WR P\VHOI ´7KLV LV ZKDW ZH GR DV GLUHFWRUV µ <RX NQRZ ZKHQ \RX SUHVHQW WKH WUDQVODWLRQ ÀQLVKHG RU QRW LW·V JRLQJ WR KDYH D WROHUDQFH ULJKW" $OO SOD\V KDYH WROHUDQFH RI ZKDW WKH\ FDQ VXS SRUW DQG ZKDW WKH\ FDQQRW VXSSRUW ULJKW" :LWK WUDQVODWLRQ LW·V WKH VDPH SURFHVV EXW PRUH UHYHUHQFH KDV WR EH SDLG WR WKH VRXUFH LQ WKDW PRPHQW EHFDXVH LW LV PDOOHDEOH LQ WKH WDUJHW EHFDXVH , FDQ FKRRVH D GLIIHUHQW ZRUG EHFDXVH , FDQ FKDQJH WKH SKUDVH EXW \HW \RX VWLOO FDQ·W \RX VWLOO KDYH WR OLYH ZLWKLQ WKH WROHUDQFH RI ZKDW WKH SOD\ZULJKW LQWHQGHG 7KH LGHD RI D FRQWLQXXP KDV FRPH XS D FRXSOH WLPHV DQG LW ZRXOG EH LQWHUHVWLQJ IRU PH WR KHDU \RX WDON DERXW ZKHQ GRHV D WUDQVODWLRQV EHFRPH DQ DGDSWDWLRQ" 3DUVLQJ ´,V WKLV D WUDQVODWLRQ"µ ´,V WKLV D WUDQV DGDSWDWLRQ"µ ´,V WKLV LV DQ DGDS WDWLRQ"µ ,V WKHUH YDOXH LQ SDUVLQJ WKH GLIIHUHQFH EHWZHHQ D WUDQVOD WLRQ DQG WUDQV DGDSWDWLRQ DQG ZKHQ GRHV LW EHFRPH DQ DGDSWDWLRQ ZKHUH QRW HYHQ ZKHUH ZH·UH MXVW XVLQJ DQ HFKR RI WKH RULJLQDO RU WKH VRXUFH" $9 , WKLQN WKDW LW LV D FRQWLQXXP ,·P WKLQNLQJ DERXW DQ LQVWDQFH D QXPEHU RI \HDUV DJR ZKHQ WKHUH ZDV DQ XQGHUJUDGXDWH SURGXFWLRQ RI 6WULQGEHUJ·V 0LVV -XOLH KHUH DW 81& $ VWXGHQW WKDW , KDG LQ VHY HUDO FODVVHV GLUHFWHG LW DQG KH GLG LW LQ VXFK D ZD\ WKDW LW ZDV KLJKO\ SHUIRUPDWLYH DQG PDJLFDO EXW WKH SOD\ VRUW RI JRW ORVW LQ LW DOO $QG P\ LQLWLDO UHDFWLRQ XSRQ ZDWFKLQJ WKDW ZDV ´:HOO LI KH ZDQWHG WR GR KLV RZQ SLHFH ZK\ GLGQ·W KH GR WKDW"µ <RX NQRZ WR XVH 6WULQG EHUJ DV WKH VSULQJERDUG IRU FUHDWLQJ VRPHWKLQJ GLIIHUHQW UDWKHU WKDQ WU\LQJ WR VTXDVK VRPHWKLQJ GLIIHUHQW RQWR 6WULQGEHUJ 7KDW VHHPV WR PH WR EH TXLWH GLIIHUHQW WKDQ IRU LQVWDQFH -HDQ *UDKDP -RQHV· WUDQVODWLRQ³, GRQ·W NQRZ ZKDW \RX ZRXOG FDOO LW³RI 5LFDUGR 0RQWL·V )LQODQGLD ZKHUH VKH WDNHV WKH RULJLQDO EXW UH ZRUNV LW 6KH·V ZRUNLQJ FORVHO\ ZLWK 0RQWL DQG ZDV JLYHQ KLV SHUPLVVLRQ WR GR WKLV EXW VKH UHDOO\ ZULWHV DQHZ³VKH GRHVQ·W WKLQN WKDW WKH ZD\ WKDW WKH SOD\ ZDV ZULWWHQ IRU DQ $UJHQWLQH DXGLHQFH ZDV JRLQJ WR EH FRPSUHKHQVLEOH WR D 86 (QJOLVK DXGLHQFH 6R VKH ZDV JLYHQ KLV SHUPLVVLRQ WR ERWK WUDQVODWH DQG WR DGDSW WR FUHDWH D SLHFH WKDW ZRXOG KDYH WKH VDPH HVVHQFH DQG VSLULW RI WKH RULJLQDO EXW LW·V EHHQ IRUPHG LQ WKH WDUJHW ODQJXDJH $QG WKDW WR PH LV VWLOO D WUDQVODWLRQ <RX·UH QRW XVLQJ WKH VDPH ODQJXDJH HYHQ QHFHVVDULO\ WKH VDPH LP DJHV RU WKH VDPH FKDUDFWHUV EXW LI \RX UHDG 0RQWL·V SOD\ DQG WKHQ UHDG ZKDW VKH·V GRQH WKH\·UH GLIIHUHQW EXW WKH\·UH WKH VDPH SOD\

:KLFK LV D YHU\ YHU\ GLIIHUHQW WKLQJ WKDQ WKH 0LVV -XOLH WKDW , ZDV MXVW WDONLQJ DERXW +* $V D WUDQVODWRU , FRQVLGHU P\VHOI DQ DUWLVW EXW WKH FRQVHQVXV LW VHHPV WR PH HVSHFLDOO\ LQ DFDGHPLD LV WKDW WUDQVODWLRQ LV D FUDIW DQG QRW DQ DUW :KDW GR \RX WKLQN" $9 7KDW QRWLRQ LV FKDQJLQJ 6ORZO\ EXW LW·V FKDQJLQJ 7UDQVODWLRQ LV EHFRPLQJ PRUH YDOXHG ,·P OXFN\ WR EH LQ D GHSDUWPHQW ZKHUH RQH RI WKH WKLQJV WKDW KHOSHG PH PRYH IURP DVVRFLDWH WR IXOO SUR IHVVRU ZDV P\ FROOHFWLRQ RI 6DELQD %HUPDQ WUDQVODWLRQV³SUHFLVHO\ EHFDXVH SHRSOH DUH ORRNLQJ DW WKHP DV WKHDWUH DQG SDUW RI D FUHDWLYH SURFHVV , DEVROXWHO\ WKLQN WKDW WKH WUDQVODWRU LV DV PXFK RI D FUHDWRU DV WKH SOD\ZULJKW WKH VRXUFH SOD\ZULJKW $QG P\ WUDQVODWLRQ LV P\ ZRUN XOWLPDWHO\ , FRS\ULJKW LW WKH RULJLQDO SOD\ZULJKW GRHVQ·W $W WKH VDPH WLPH LW·V DOVR WKH RULJLQDO SOD\ZULJKW·V ,Q WKH VDPH ZD\ \RX GR D SURGXFWLRQ RI 7KH &KHUU\ 2UFKDUG DQG LW·V ERWK &KHN KRY DQG ZKRHYHU WKH FRPSDQ\ LV 1HLWKHU RQH RZQV LW H[FOXVLYHO\ +* 7R ZKRP DUH ZH PRVW HWKLFDOO\ UHVSRQVLEOH WKH RULJLQDO SOD\ ZULJKW WR WKH WDUJHW DXGLHQFH RU WR RXU RZQ DUWLVWLF VHQVLELOLWLHV" $9 ,W FDQ FKDQJH DQG VKLIW GHSHQGLQJ XSRQ WKH SURMHFW RU WKH QD WXUH RI WKH SLHFH 7KDW LV RQH DVSHFW ZKHQ ZH ZHUH WDONLQJ HDUOLHU DERXW LW³WKH GLIIHUHQW ´KDWVµ³ZKDW ZH OHIW RXW ZDV WKH DXGLHQFH $QG IRU PH LW LV HTXDOO\ ZKDW \RX ZHUH MXVW VD\LQJ WUDQVODWLRQ LV DOZD\V D WZR ZD\ VWUHHW 7KH VDPH ZD\ WKDW DJDLQ HYHQ LI LW·V D 86 (QJOLVK EDVHG SOD\ZULJKW ,·P JRLQJ KDYH WKH EHVW H[SHULHQFH DV DQ DXGLHQFH PHPEHU LI WKHUH·V VRPHWKLQJ WKDW FKDOOHQJHV PH WKDW GHPDQGV WKDW , MRLQ WKH ZRUOG RI WKH SOD\ UDWKHU WKDQ VLW EDFN DQG REVHUYH LW LQ VRPH IDVKLRQ WKDW·V VHDPOHVV WKDW LW FRPHV WR PH 3DUWLFXODUO\ ZKHQ \RX·UH WUDQVODWLQJ IURP DQRWKHU FXOWXUH LW VHHPV WR PH WKDW RQH RI WKH FUXFLDO DVSHFWV RI WKH YDOXH RI GRLQJ WKDW LV WKDW ZH DV DXGLHQFH PHPEHUV KDYH WR HQWHU WKDW FXOWXUH ,I WKHUH LVQ·W DQ\WKLQJ LQWULJXLQJ RGG SHUKDSV VOLJKWO\ RII NLOWHU WKHQ WKH WUDQVODWLRQ LW VHHPV WR PH KDV IDLOHG ,I \RX FDQ VLW WKHUH DQG WDNH LW LQ OLNH \RX ZRXOG D WHOHYLVLRQ FRPHG\ WKHQ ZKDW·V WKH SRLQW" +* , WRWDOO\ DJUHH ZLWK \RX ,W LV WKDW VHQVH RI LI ZH DUH WR EHJLQ WR VWDUW OLYLQJ LQ D JOREDO ZRUOG ZH DV 86 $PHULFDQV³DQG ,·OO LQFOXGH P\VHOI LQ WKLV³KDYH WR VWRS KDYH WR FKDOOHQJH WKH QRWLRQ WKDW ´-XVW PDNH LW HDV\ IRU PH 0DNH LW HDV\ VR WKDW , FDQ HDVLO\ GLJHVW LW WKH ZD\ WKDW , GR HYHU\WKLQJ HOVH LQ P\ RZQ FXOWXUH µ 1R 0DNH PH XQGHUVWDQG ZKHUH \RX·UH FRPLQJ IURP 2U FKDOOHQJH PH WR XQGHUVWDQG ZKHUH \RX·UH FRPLQJ IURP $QG DOO RI D VXGGHQ ZH FRPPXQLFDWH ZLWK D ELJJHU SDUW RI WKH ZRUOG $9 ,·YH XVHG WKLV LPDJH LQ DQRWKHU FRQWH[W EXW LW·V WKH GLIIHUHQFH EHWZHHQ WKLQNLQJ DERXW WUDQVODWLRQ DV WKLV NLQG RI LQWHUFXOWXUDO FUXLVH VKLS ZKHUH ZH WUDYHO DURXQG WKH ZRUOG DQG ZH JHW WKH VDPH IRRG WKH VDPH H[SHULHQFH WKH VDPH FORWKLQJ ZKHWKHU ZH·UH LQ ,VWDQEXO RU %XHQRV $LUHV DQG D NLQG RI WUDYHO ZKHUH HDFK SODFH LV XQLTXH DQG FRPSHOOLQJ DQG IDVFLQDWLQJ LQ DQG RI LWV RZQ ULJKW GLIIHUHQW %H FDXVH DJDLQ LI LW·V QRW GLIIHUHQW WKHQ ZK\ ERWKHU"

WKDW V YHUVLRQ RI 7KUHHSHQQ\ 2SHUD DQG WKHQ \RX VHH WKH 'RQPDU :DUHKRXVH YHUVLRQ RI WKH SOD\ 7KH\·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·UH DOVR JRLQJ WR ORVH FHUWDLQ WKLQJV DQG QRW FRQYH\ WR \RXU DXGLHQFH LQ WKH SUHVHQW ZKDW \RX ZDQW WR GR +* , ZDQW WR WDON DERXW EHVW SUDFWLFHV LQ WHUPV RI LQ WKH UHKHDUVDO DQG ZKHQ \RX·UH VLWWLQJ DORQH DW WKH WDEOH WUDQVODWLQJ 8QGHUVWDQG LQJ WKDW HYHU\ SURFHVV LV GLIIHUHQW :KDW ZRXOG \RX VD\ DUH WKH ´GR·V DQG GRQ·WVµ" $9 $JDLQ ,·P WDONLQJ DERXW P\ RZQ SUDFWLFHV DQG WKDW LV JRLQJ WR EH GLIIHUHQW IRU HYHU\RQH , PHDQ , IHHO VWURQJO\ WKDW , WUDQVODWH IURP 6SDQLVK LQWR (QJOLVK DQG ,·P QRW JRLQJ WR WUDQVODWH IURP (QJOLVK LQWR 6SDQLVK (YHQ WKRXJK , FRQVLGHU P\VHOI WR EH ÁXHQW LQ 6SDQLVK LQHYLWDEO\ WKHUH DUH JRLQJ WR EH PDWLFHV KXHV WKDW ,·P QRW JRLQJ WR FDWFK EHFDXVH LW·V QRW P\ QDWLYH ODQJXDJH , WKLQN WKDW·V WKH SODFH WKDW , ZRXOG FRPH GRZQ LQ WKH HQG $QG LQ WHUPV RI QRW FKRRVLQJ ZKDW \RX·UH JRLQJ WR WUDQVODWH , PHDQ ,·YH RQO\ KDG RQH H[SHULHQFH RI LW ZKLFK ZDV ZLWK D 3HUXYLDQ SOD\ZULJKW QDPHG 6DUD -RIIUH ZKR , PHW DQG , VSHQW WLPH ZLWK DQG VKH EDGO\ ZDQWHG PH WR WUDQVODWH D SOD\ WKDW VKH KDG ZULWWHQ DERXW &ROHWWH 6KH VHQW PH WKH WH[W DQG , VDW GRZQ DQG VWDUWHG ZRUNLQJ RQ LW DQG WKHUH ZDV QRWKLQJ DERXW LW WKDW VSRNH WR PH DQG , ZDV GRLQJ D ORXV\ MRE RI WUDQVODWLQJ LW DQG ÀQDOO\ , KDG WR VD\ WR KHU ´6RUU\ EXW WKLV LVQ·W ZRUNLQJ <RX QHHG WR ÀQG VRPHERG\ ZKR KDV D FRQ QHFWLRQ WR WKH SOD\ D ÀUH LQ WKH EHOO\ DERXW WUDQVODWLQJ LW µ , WKLQN HDFK WUDQVODWLRQ SURMHFW KDV WR EHJLQ WKDW ZD\ 7KHUH KDV WR EH VRPHWKLQJ DERXW WKH SLHFH LQ WKH VRXUFH ODQJXDJH WKDW JHWV \RX H[FLWHG %HFDXVH LI \RX GRQ·W KDYH WKDW LW ZRQ·W ZRUN ,W FDQ EH DQ\WKLQJ ,W FDQ EH³´WKLV LV D SOD\ WKDW , GRQ·W XQGHUVWDQG :K\ GRQ·W , XQGHUVWDQG LW"µ EHFDXVH LQ WKH SURFHVV RI WUDQVODWLQJ , GRQ·W WKLQN WKHUH LV DQ\ EHWWHU ZD\ WR WUXO\ JHW LQVLGH RI D WH[W DQG \RX·UH JRLQJ WR ÀQG RXW ZKDW LW LV WKDW \RX GRQ·W XQGHUVWDQG DQG WKHQ WU\ DQG ÀJXUH RXW ´2ND\ , GLGQ·W XQ GHUVWDQG WKLV +RZ GR , PDNH LW FRPSUHKHQVLEOH IRU P\ VRXUFH DXGLHQFH LQ WKH FRXUVH RI WUDQVODWLQJ"µ

/LNH , ZDV VD\LQJ HDUOLHU P\ SURFHVV LV GR WKLV YHU\ IDVW LQLWLDO WUDQVODWLRQ WKHQ , JR EDFN DQG UHYLVH DQG DW WKDW SRLQW ,·P VWLOO ZRUNLQJ ZLWK WKH VRXUFH DQG P\ WUDQVODWLRQ DQG LI , FRQWLQXH WR UHYLVH WKHUH FRPHV D SRLQW DW ZKLFK , SXW WKH VRXUFH ODQJXDJH DVLGH EHFDXVH QRZ LW·V DOO DERXW KRZ GRHV WKLV ZRUN LQ WKH WDUJHW ODQJXDJH" 3DUWLFXODUO\ ZKHQ \RX JHW WR WKH SRLQW RI KHDULQJ LW %\ +* :KDW H[SHULHQFH GR \RX KDYH ZLWK WHPSRUDOLW\" /LNH LV WKHUH WKDW SRLQW ,·P FRQÀGHQW HQRXJK WKDW , KDYH DQVZHUHG DOO RI WKH D SOD\ WKDW \RX·YH WUDQVODWHG WKDW KDV EHHQ WUDQVODWHG EHIRUH WKDW VHPDQWLF TXHVWLRQV DQG QRZ LW·V ´2ND\ ZKDW DUH WKH SHUIRUPD \RX·UH OLNH ´2ND\ WKDW WUDQVODWLRQ ZRUNHG IRU WKH V VD\³WKH WLYH TXHVWLRQV WKDW KDYH WR EH DQVZHUHG"µ <RX KDYH WR KHDU LW DQG WKLQJ WKDW FRPHV WR P\ PLQG LV 7KUHHSHQQ\ 2SHUD :KHQ \RX VHH \RX ZDQW WR GLVFRYHU WKLQJV :KLOH DQ DFWRU D JLYHQ DFWRU PD\ 5HYLHZ

QRW NQRZ WKH FXOWXUDO FRQWH[W WKH\·UH JRLQJ WR NQRZ ZKHQ VRPH WKLQJ IHHOV ULJKW RU ZURQJ DQG WKHUH DUH LQVWDQFHV , WKLQN WKDW \RX·UH JRLQJ WR ZDQW WR SUHVHUYH WKDW ZURQJQHVV EHFDXVH DJDLQ OLNH ZH ZHUH WDONLQJ DERXW HDUOLHU KRZ GR \RX JHW D SURGXFWLRQ WHDP DQG WKH DXGLHQFH WR FRPH FORVHU WR WKH SLHFH" <RX ZDQW WKHP WR ZRUN D ELW UDWKHU WKDQ LW EHLQJ FRPSOHWHO\ D VHDPOHVV H[ SHULHQFH $W WKH VDPH WLPH WKHUH DUH JRLQJ WR EH SODFHV ZKHUH WKH ZURQJQHVV LV ZURQJ DQG LV JRLQJ WR KDYH WR EH DOWHUHG , WKLQN WKDW Ã&#x20AC;UVW VWHS RI FKRRVLQJ VRPHWKLQJ WR WUDQVODWH EHFRPHV WKH PRVW LPSRUWDQW SDUW VRPHWKLQJ WKDW UHDOO\ FRPSHOV \RX IRU ZKDWHYHU UHDVRQ WKDW EHFRPHV WKH PRVW LPSRUWDQW WKLQJ EHFDXVH WKDW·V ZKDW·V JRLQJ WR EH \RXU WKURXJK OLQH WRZDUGV WKH Ã&#x20AC;QDO WUDQVOD WLRQ :KDWHYHU LW ZDV WKDW JUDEEHG P\ DWWHQWLRQ DERXW WKLV SLHFH LQ WKH RULJLQDO ODQJXDJH LV ZKDW , ZDQW WR EH DEOH WR FRQYH\ LQ WKH Ã&#x20AC;QDO WUDQVODWLRQ $QG DJDLQ LW FRXOG EH YLUWXDOO\ DQ\WKLQJ +* , ORYH KHDULQJ \RX WDON DERXW SURFHVV ,W KDV EHHQ D SOHDVXUH WDONLQJ WR \RX 7KDQN \RX IRU \RXU WLPH

127(6 KWWS GUDPD XQF HGX PHUFXULDQ KWPO <XNLNR 0RWR\D 9HQJHDQFH &DQ :DLW 7UDQV .\RNR <RVKLGD DQG $QG\ %UDJHQ 7KH 0HUFXULDQ

KWWS ZZZ FDUROLQDSHUIRUPLQJDUWV RUJ SURFHVV VHULHV 7KH 7KHDWUH RI 6DELQD %HUPDQ 7KH $JRQ\ RI (FVWDV\ DQG 2WKHU 3OD\V 7UDQVODWHG E\ $GDP 9HUVpQ\L &DUERQGDOH DQG (GZDUGV YLOOH 6RXWKHUQ ,OOLQRLV 8QLYHUVLW\ 3UHVV 7KH 0HUFXULDQ ´7UDQVODWLRQ DV DQ (SLVWHPRORJLFDO 3DUDGLJP IRU 7KHDWUH LQ WKH $PHULFDV µ 7KHDWUH -RXUQDO

*ULVHOGD *DPEDUR %LWWHU %ORRG 7UDQV $GDP 9HUVpQ\L 1HZ 3OD\ )HVWLYDO )ORULGD 6WXGLR 7KHDWUH 8QSXEOLVKHG KWWS ZZZ SOD\PDNHUVUHS RUJ PDNLQJRIDNLQJKHQU\,9

5HYLHZ

$SPJTBEFT JO 2VÏCFD 0O UIF 4FNJPUJDT PG $POUFNQPSBSZ 'SFODI %SBNBUVSHJF 6FRWW ' 7D\ORU ,QWURGXFWLRQ 'UDPDWXUJ\ YV 'UDPDWXUJLH 7KH WHUP ´GUDPDWXUJ\µ LV SUREOHPDWLF LQ WKHDWHU VWXGLHV IRU PDQ\ UHDVRQV ,Q (QJODQG DQG WKH 8QLWHG 6WDWHV IRU H[DPSOH WKH ´GUDPD WXUJµ LV WKH LQGLYLGXDO ZKR LV UHVSRQVLEOH IRU FRQGXFWLQJ DOO QHFHV VDU\ UHVHDUFK KLVWRULFDO VRFLDO SROLWLFDO OLWHUDU\ DQG SUDFWLFDO IRU WKH SXUSRVHV RI SURGXFWLRQ %XW WKH WHUP ´GUDPDWXUJµ RU ´GUDPD WXUJ\µ LV SUREOHPDWLF EHFDXVH LW PD\ DOVR UHIHU WR WKH DFW RI SOD\ZULW LQJ LWVHOI DQG DV ZH VKDOO VHH FRQWHPSRUDU\ )UHQFK GUDPDWXUJLH KDV HYROYHG LQWR D K\EULG DFWLYLW\ WKDW EOXUV WKH OLQHV EHWZHHQ DF WRU GLUHFWRU SOD\ZULJKW DQDO\VW 8OWLPDWHO\ WKH )UHQFK YLHZ RI GUD PDWXUJ\ GRHV QRW UHVWULFW WKHDWUH FRPSDQLHV WR D VR FDOOHG IDLWKIXO LQWHUSUHWDWLRQ RI WKH ZULWWHQ WH[W LQVWHDG LW DOORZV FRPSDQLHV WR H[ SORUH WKH OLPLWOHVV WHUULWRU\ RI WKHDWULFDO VLJQLÀFDWLRQ FRQVHTXHQWO\ UHLQIRUFLQJ WKH LPSRUWDQFH RI YLHZLQJ WKH UHODWLRQVKLS EHWZHHQ WH[W DQG SHUIRUPDQFH DV D ´WUDQV UHDGLQJµ UDWKHU WKDQ D ´WUDQVODWLRQ µ &RQWHPSRUDU\ )UHQFK GUDPDWXUJLH GHFODUHV WKH DXWRQRP\ RI WKH DUW RI PLVH HQ VFqQH DQG DIÀUPV D XQLTXH ODQJXDJH RI WKH VWDJH 1RZKHUH LV WKLV K\EULGLW\ PRUH HYLGHQW WKDQ LQ WKH ZRUN RI 3D WULFH 3DYLV ZKR KDV JLYHQ PXFK DWWHQWLRQ WR WKH TXHVWLRQ RI GUD PDWXUJ\ $V HDUO\ DV 3DYLV ÀUVW SXEOLVKHG D PRGHO RI GUD PDWXUJLFDO DQDO\VLV ZKLFK KH VWDWHV

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´'UDPD LQ WKH +RRGµ ZZZ 'UDPD,Q7KH+RRG FRP 6FRWW KDV VWXGLHG ERWK )UHQFK DQG 7KHDWUH VLQFH WKH DJH RI DQG WUDLQHG DV DQ DFWRU DQG GLUHFWRU DW WKH 8QLYHUVLW\ RI 7HQQHVVHH ² .QR[YLOOH $GGLWLRQDOO\ KH KDV WDXJKW DW D YDULHW\ RI XQLYHUVLWLHV LQ WKH 8QLWHG 6WDWHV DV ZHOO DV LQ )UDQFH ZKHUH KH ZDV DQ (QJOLVK /HFWXUHU DW WKH 8QLYHUVLWp GH 3DULV ² /D 6RUERQQH ,9 DQG DQ (QJ OLVK WHDFKLQJ DVVLVWDQW DW D )UHQFK KLJK VFKRRO +LV )UHQFK ODQJXDJH GLUHFWLQJ FUHGLWV LQFOXGH ZRUNV E\ ,RQHVFR %HFNHWW 9LDQ $UUDEDO 5RVWDQG DQG 0ROLqUH

JRHV EH\RQG D VHPLRORJLFDO GHVFULSWLRQ RI VWDJH V\VWHPV >,W@ DVNV SUDJPDWLFDOO\ ZKDW WKH VSHFWDWRU ZLOO JHW RXW RI WKH SHUIRUPDQFH KRZ WKHDWUH UHODWHV WR WKH DXGLHQFH·V LGHRORJLFDO DQG DHVWKHWLF IUDPH RI UHIHUHQFH ,W LQWHJUDWHV DQG UHFRQFLOHV D VHPLRORJLFDO DHVWKHWLF SHUVSHFWLYH RQ WKH SHUIRUPDQFH VLJQV ZLWK D VRFLRORJLFDO H[DPLQDWLRQ RI WKH SURGXFWLRQ DQG UHFHS WLRQ RI WKHVH VDPH VLJQV 'LFWLRQDU\

3DYLV·V YLHZ RI GUDPDWXUJLFDO DQDO\VLV LV D KROLVWLF RQH WKDW WDNHV ERWK WKH SURGXFWLRQ DQG UHFHSWLRQ RI WKH ZULWWHQ DQG SHUIRUPDQFH WH[WV LQWR FRQVLGHUDWLRQ ,W LV D FLUFXLWRXV PRGHO WKDW IRFXVHV RQ WZR 5HYLHZ

IXQGDPHQWDO SURFHVVHV ÀFWLRQDOL]DWLRQ DQG LGHRORJL]DWLRQ ,W FDQ EH DSSOLHG WR D VWXG\ RI WKH ZULWWHQ WH[W DQG RU WR WKH SHUIRUPDQFH WH[W SUH RU SRVW SURGXFWLRQ UHVSHFWLYHO\ 6XFFLQFWO\ LW LV D GUDPDWXUJL FDO PHWKRGRORJ\ WKDW VHWV LWV WDVN RQ WKH UHWULHYDO DQG UHGLVFRYHU\ RI D VR FDOOHG LGpRORJqPH D NHUQHO RI WKRXJKW ZKLFK IXQFWLRQV DV D WKURXJK OLQH EHWZHHQ YDULRXV OHYHOV RI WH[WXDOLW\ ,Q WKLV DUWLFOH ZH ZLOO XWLOL]H 3DYLV·V PRGHO RI GUDPDWXUJLFDO DQDO\ VLV LQ D VWXG\ RI D 4XpEHFRLV SURGXFWLRQ RI 0LFKHO $]DPD·V SOD\ &URLVDGHV ,Q VR GRLQJ ZH ZLOO GLVFRYHU KRZ FRQWHPSRUDU\ )UHQFK GUDPDWXUJLH KDV FRPH WR KHUDOG WKH DXWRQRP\ RI WKH DUW RI PLVH HQ VFqQH DV LW UHVSRQGV WR DQG DEVRUEV DQ LGpRORJqPH EDVHG RQ DQ LGHD RI ´8QLYHUVDOLW\µ WKDW KDV EHHQ LQKHULWHG IURP DQG FXOWLYDWHG E\ WKH KLVWRULFDO DQG SROLWLFDO PRYHPHQWV RI GHFHQWUDOL]DWLRQ DQG FROOHFWLY LVP %XW EHIRUH JRLQJ IXUWKHU OHW XV ÀUVW EULHÁ\ WDNH D ORRN DW WKH SOD\ZULJKW SOD\ DQG FRPSDQ\ ZKRVH ZRUN ZH ZLOO H[DPLQH LQ RUGHU WR EHWWHU XQGHUVWDQG WKLV WUHQG LQ FRQWHPSRUDU\ )UHQFK GUDPDWXUJLH $]DPD &URLVDGHV DQG /HV &UpDWLRQV 'LYLQJ +RUVH $ 1HZ *HQHUDWLRQ RI 'UDPDWXUJHV 0LFKHO $]DPD LV D PHPEHU RI D QHZ JHQHUDWLRQ RI SOD\ZULJKWV ZKR DFFRUGLQJ WR 3DYLV DUH WUDQVIRUPLQJ FRQWHPSRUDU\ )UHQFK WKHDWUH $PRQJ WKH PRVW LPSRUWDQW RI WKHVH WUDQVIRUPDWLRQV LV WKH DEDQGRQ PHQW RI VXSSRUW IRU D VLQJXODU SKLORVRSKLFDO V\VWHP RU DHVWKHWLF SR OLWLFDO DJHQGD ´7KH\ >FRQWHPSRUDU\ SOD\ZULJKWV@ GR QRW FOLQJ WR DQ\ RQH SDUWLFXODU SKLORVRSK\³([LVWHQWLDOLVP 1LKLOLVP $EVXUGLVP RU 0DU[LVP³QRU WR DQ\ RQH SDUWLFXODU DUWLVWLF PRYHPHQWµ 3DYLV ´6\QWKqVH µ +H DGGV WKDW WKH LGHD RI VXSSRUWLQJ D VR FDOOHG WKHVLV RU SDUWLFXODU LGHRORJ\ UHPDLQV IRUHLJQ WR WKLV QHZ VHW RI SOD\ZULJKWV ´7KHLU XQLYHUVH LV UDWKHU WKDW RI LQGLYLGXDO UHSUHVHQWDWLRQV ZKLFK GR QRW H[FOXGH D JOREDO VHL]LQJ RI WKH LVVXHVµ

VWRU\ RI ´0DPDQ 3RXOHµ DQG KHU HLJKW KXQGUHG \HDU MRXUQH\ WR WKH SURPLVHG ODQG RI -HUXVDOHP WKH LQGLYLGXDO VWRULHV RI WKH YLFWLPV RI YDULRXV ZDUV DQG FUXVDGHV ZKR LQ D SDLQIXO DQG VRPHWLPHV FRPLF URXWLQH DUH ZHOFRPHG WR WKH ODQG RI WKH GHDG E\ WKH FKDUDFWHUV RI WKH 2OG 0DQ DQG 2OG :RPDQ DQG ÀQDOO\ WKH FHQWUDO QDUUDWLYH ZKLFK LQYROYHV WKH OLYHV RI IRXU \RXQJ SHRSOH .ULP ,VPDwO <RQD WKRQ DQG %HOOD ZKR ÀQG WKHPVHOYHV FDXJKW LQ WKH FURVVÀUH RI ZDU 7KH WH[W LV WKHUHIRUH D VRUW RI WDSHVWU\ RI ÀFWLRQV $V IRU WKH FRPSDQ\ ZKRVH SURGXFWLRQ RQ ZKLFK ZH ZLOO IRFXV /HV &UpDWLRQV 'LYLQJ +RUVH SURGXFHG &URLVDGHV DW WKH 7KpkWUH 3URVSHUR LQ 0RQWUpDO &DQDGD LQ WKH ZLQWHU RI &HQWUDO WR WKH WKHDWUH FRPSDQ\·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

,Q LWV H[SHULHQFH ZLWK EXIIRRQHU\ *UHHQEHUJ·V DXGLHQFH VKRXOG QRW QHFHVVDULO\ ´LGHQWLI\µ ZLWK WKH ERXIIRQ LQ WKH WUDGLWLRQDO VHQVH LGH DOO\ WKH\ VKRXOG EH XQFRPIRUWDEO\ LQWULJXHG E\ KLP DQG VWUXJJOH WR ZDWFK IURP D VDIH GLVWDQFH WKDW DOORZV IRU UHIXJH LQ WKH EHOLHI WKDW WKLV ULGLFXORXV FUHDWXUH LV QRW D UHÁHFWLRQ WKHLU RZQ OLYHV ,QGHHG *UHHQEHUJ·V EXIIRRQV

JLYH WKH LPSUHVVLRQ WKDW WKH\ DUH QRW XV 7KH\ FRPH IURP HOVHZKHUH ZKLFK DOUHDG\ RIIHUV D IUHHGRP RI SOD\ DQG ZKLFK %RUQ LQ WKH 3\UHQHHV 0RXQWDLQV RI &DWDORQLD LQ $]DPD ZDV LQFLWHV XV HYHQ PRUH WR DFFHSW ZKDW WKH\ VD\ ,W·V GLIIHUHQW RULJLQDOO\ WUDLQHG DV DQ DFWRU DW WKH IDPRXV (FROH -DFTXHV /HFRT IURP D FORZQ :H LGHQWLI\ ZLWK WKH FORZQ ZKHQ KH KDV DQ DORQJ ZLWK $ULDQH 0QRXFKNLQH +H HYHQWXDOO\ DEDQGRQHG DFWLQJ LQ DFFLGHQW RQ VWDJH ZH ODXJK DERXW LW :KHUHDV ZH KDYH WKH LP RUGHU WR FRQFHQWUDWH RQ D FDUHHU DV D SOD\ZULJKW &XUUHQWO\ KH ZRUNV SUHVVLRQ WKDW OHV ERXIIRQV ODXJK DW XV $QG LW·V D KROORZ ODXJK DV D SOD\ZULJKW IRU WKH 1RXYHDX 7KpkWUH GH %RXUJRJQH DQG IRU WKH WKDW ERUGHUV RQ WKH WHUULWRU\ RI WUDJHG\ *UHHQEHUJ

&HQWUH 'UDPDWLTXH 1DWLRQDO GH 'LMRQ +H LV DOVR D OLWHUDU\ DGYLVRU IRU WKH &1(& &HQWUH 1DWLRQDO GHV (FULWXUHV &RQWHPSRUDLQHV ² /D &KDUWUHXVH DQG LV HGLWRU LQ FKLHI RI WKH WKHDWULFDO UHYXH /HV &DKLHUV 'UDPDWXUJLFDO $QDO\VLV RI WKH 3HUIRUPDQFH 7H[W &URLVDGHV GH 3URVSHUR +LV SOD\V LQFOXGH )DLWV 'LYHUV =RR GH 1XLW /HV 'HX[ LQ 4XpEHF 7HUUHV G·$NKHQDWRQ $]WqTXHV ,SKLJpQLH RX OH 3pFKp GHV 'LHX[ ,Q WKH SUHFHGLQJ GLVFXVVLRQ RI &URLVDGHV³WKH ZULWWHQ WH[W DQG WKH &URLVDGHV /H 6DV %OHG DQG 9LH HW 0RUW GH 3LHU 3DROR 3DVROLQL SHUIRUPDQFH WH[W³ZH FDQ DOUHDG\ EHJLQ WR SHHO RII WKH ÀUVW OD\HU LQ +LV RQH DFW SOD\ &URLVDGHV ZDV ÀUVW SURGXFHG LQ DW OD &KDUWUHXVH WKH JUDGXDO XQPDVNLQJ RI DQ LGpRORJqPH WKDW SHUPHDWHV DOO OHYHOV GH 9LOOHQHXYH OHV $YLJQRQ LQ )UDQFH $V WKH LQWURGXFWLRQ WR WKH SXE RI WH[WXDOLW\ UHIHUUHG WR HDUOLHU LQ 3DYLV·V PRGHO IRU GUDPDWXUJLFDO OLVKHG WH[W GHVFULEHV WKH SOD\ ZDV WKH UHVXOW RI DQ H[SHULPHQW FHQWHUHG DQDO\VLV 0RUH VSHFLÀFDOO\ WKH FRPPXQDO DQG H[SHULPHQWDO QDWXUH RQ WKHDWULFDO ZULWLQJ RUJDQL]HG E\ OH &,5&$ DQG 7+($75$/(6 ZLWK RI ERWK WH[WV UHÁHFWV DQ LGHRORJLFDO LQKHULWDQFH RI WZR PDMRU PRYH WKH KHOS RI WKH &HQWUH 1DWLRQDO GHV /HWWUHV *LUDUG DQG (QJHOEDFK PHQWV LQ FRQWHPSRUDU\ )UHQFK WKHDWUH GHFHQWUDOL]DWLRQ DQG FRO )RUHZRUG WR &URLVDGHV 7KH JRDO RI VXFK FRPPXQDO H[SHULPHQWD OHFWLYLVP %RWK WH[WV WKH ZULWWHQ DQG SHUIRUPDQFH UHVSRQG TXLWH WLRQ ZDV WR UHOLHYH WKH SOD\ZULJKW IURP KLV ´KDELWXDO VROLWXGHµ PDWHULDOO\ WR KLVWRU\ DQG WKHRU\ E\ DEVRUELQJ WKHVH LQÁXHQFHV LQWR 7KH VLJQLÀFDQFH RI WKLV ZLOO EHFRPH FOHDUHU RQFH ZH EHJLQ WR DSSO\ WKHLU RZQ SURGXFWLYH SURFHVVHV FRQWULEXWLQJ WR DQ LGHRORJLFDO GLV 3DYLV·V PRGHO WR RXU DQDO\VLV DV LW VLJQDOV WKH UROH WKDW GHFHQWUDOL]D FRXUVH WKDW PDQLIHVWV LWVHOI LQ WKH IRUP RI ZKDW 3DYLV ZRXOG FDOO DQ WLRQ DQG FROOHFWLYLVP SOD\ QRW RQO\ LQ WKH WH[WXDOL]DWLRQ RI &URLVDGHV LGHRWH[WXDO LGpRORJqPH EXW DOVR PRUH JHQHUDOO\ LQ FRQWHPSRUDU\ )UHQFK GUDPDWXUJLH /HW XV UHFDOO WKDW 3DYLV·V PRGHO RI GUDPDWXUJLFDO DQDO\VLV LV FLUFX 6WUXFWXUDOO\ VSHDNLQJ WKH SOD\ XQUDYHOV LQ D VHULHV RI ÀIWHHQ VHTXHQF LWRXV DQG LQYROYHV WZR SULPDU\ SURFHVVHV ÀFWLRQDOL]DWLRQ DQG LGH HV DQG FRQVLVWV RI WKUHH SULPDU\ QDUUDWLYHV WKH P\WKRORJLFDO RORJL]DWLRQ )LFWLRQDOL]DWLRQ UHSUHVHQWV DQ DWWHPSW WR H[SODLQ KRZ 5HYLHZ

WKH WH[WXDO DQG VFHQLF SURGXFWLRQV RI Ã&#x20AC;FWLRQ DUH FDSDEOH RI RUJDQL] LQJ WKH GUDPDWLF PDWHULDO LQWR D VWRU\ RU IDEOH ,W LV LQWLPDWHO\ OLQNHG ZLWK LGHRORJL]DWLRQ DQG FDQ XOWLPDWHO\ RQO\ EH XQGHUVWRRG LQ WHUPV RI WKLV UHODWLRQVKLS GXH WR WKH SHUYDVLYH QDWXUH RI LGHRORJ\ ZKLFK SHUPHDWHV HYHU\WKLQJ 7KXV WKH VHFRQG PDMRU FRPSRQHQW LQ 3DYLV·V FLUFXLW RI FRQFUHWL]DWLRQ LQYROYHV WKH ´WH[WXDOL]DWLRQ RI LGHRORJ\µ RU WKH ´LGHRORJL]DWLRQ RI WKH WH[W µ ZKLFK IRFXVHV RQ WKH H[WHQW WR ZKLFK LGHRORJ\ LQÃ&#x20AC;OWUDWHV WKH WH[W DV ZHOO DV WKH WH[W·V HIIHFW RQ LGH RORJ\ 7KLV LQTXLU\ LPSOLHV D WKHRUHWLFDO FRQFHSWLRQ RI WKH WH[W DV D WULDGLF VWUXFWXUH FRPSRVHG RI D WKH DXWRWH[WXDO E WKH LQWHUWH[WXDO DQG F WKH LGHRWH[WXDO )DFLOLWDWLQJ WKH SDVVDJH EHWZHHQ WKHVH YDUL RXV WH[WXDO OHYHOV LV WKH LGpRORJqPH GHVFULEHG DV ´D K\EULG EHLQJ WKDW IXQFWLRQV VLPXOWDQHRXVO\ DV D WH[WXDO DQG LGHRORJLFDO XQLW ZLWKLQ D JLYHQ VRFLDO LGHRORJLFDO DQG GLVFXUVLYH IRUPDWLRQµ 9RL[ HW LPDJHV GH OD VFqQH ,W LV RQ WKH LGHRWH[WXDO OHYHO WKHUHIRUH ZKHUH ZH FDQ EHJLQ WR GLVFRYHU KRZ WKH LGpRORJqPH RI &URLVDGHV ZDV FXOWL YDWHG E\ WKH PRYHPHQWV RI GHFHQWUDOL]DWLRQ DQG FROOHFWLYLVP

,Q SUDFWLFDO WHUPV GHFHQWUDOL]DWLRQ PDUNHG WKH PRYHPHQW RI SURIHV VLRQDO WKHDWHU FRPSDQLHV IURP WKH FDSLWDO 3DULV WR WKH VXEXUEV WR WKH YDULRXV UHJLRQV RXWVLGH RI WKH ,VODQG RI )UDQFH ZKHUH IHGHUDOO\ IXQGHG WKHDWHU KDG QRW UHDOO\ H[LVWHG -HDQ 9LODU ZDV DQ HVSHFLDOO\ LPSRUWDQW Ã&#x20AC;JXUH GXULQJ WKH Ã&#x20AC;UVW SKDVH RI GHFHQWUDOLVDWLRQ GXH WR KLV GHVLUH WR FUHDWH ´D WKHDWUH IRU DOO µ $V 'DYLG %UDGE\ H[SODLQV 9LODU EHOLHYHG WKDW WKHDWHU VHUYHG D QREOH FDXVH ´7R IXUQLVK D VSDFH ZKHUH RUGHU FRXOG WULXPSK IURP FKDRV DQG ZKHUH KXPDQ EHLQJV FRXOG JDWKHU LQ RUGHU WR DFTXLUH ZLVGRPµ ,Q LGHRORJLFDO WHUPV WKH FHOHEUDWLRQ RI FRPPXQLW\ DQG GHPRFUDF\ OHG 9LODU WR FXOWLYDWH D WKHDWHU WKDW HP SKDVL]HG VLPLODULWLHV UDWKHU WKDQ GLIIHUHQFHV DPRQJ SHRSOH RI YDU\LQJ VRFLDO FODVVHV +LV DWWHPSW WR EULQJ ´TXDOLW\ WKHDWHUµ RXW RI WKH FDSLWDO DQG LQWR OHV SURYLQFHV UHSUHVHQWHG D PHDQV E\ ZKLFK WR DFKLHYH VXFK D XQLI\LQJ JRDO +RZHYHU WKH YHU\ LGHD RI XQLW\ DQG XQLYHUVDOLW\ ZKLFK ZDV DW WKH KHDUW RI 9LODU·V WKHDWHU ZRXOG HYHQWXDOO\ EH FKDOOHQJHG GXULQJ WKH VHFRQG SKDVH RI GHFHQWUDOL]DWLRQ EHJLQQLQJ LQ WKH V 2EYLRXVO\ WKH XVH RI VXFK D FRQFHSW DV ´XQLYHUVDOLW\µ IRU WKH SXUSRVHV RI DU WLVWLF UHSUHVHQWDWLRQ LV YXOQHUDEOH WR FULWLFLVP 5RODQG %DUWKHV IRU H[DPSOH TXHVWLRQHG LWV YDOXH LQ KLV DUWLFOH ´7KH *UHDW )DPLO\ RI 0DQ µ ZKHUH KH UHIHUUHG WR WKH XQLYHUVDOL]LQJ FRQFHSW RI ´WKH KX PDQ FRQGLWLRQµ DV D ´P\WK >WKDW@ UHVWV RQ D YHU\ ROG P\VWLÃ&#x20AC;FDWLRQ ZKLFK DOZD\V FRQVLVWV LQ SODFLQJ 1DWXUH DW WKH ERWWRP RI +LVWRU\µ %DUWKHV 0RUH VSHFLÃ&#x20AC;FDOO\ KLV DUJXPHQW ZDV WKDW LGHDV RI XQL YHUVDOLW\ LQ IDFW FRQFHDO WKH KLVWRULFDO QDWXUH RI SROLWLFDO DQG HFR QRPLF SRZHU UHODWLRQV FRYHULQJ XS WKH LPSRUWDQW GHWDLOV WKDW H[SRVH

1)050 $"30-*/& )":&63

3DDYRODLQHQ GHVFULEHV WKH LGHRWH[W DV WKDW OHYHO RI WKH WH[W WKDW LV SUL PDULO\ FRQFHUQHG ZLWK ´WKH SUHYDOHQFH RI ZRUOG YLHZV LGHRORJLFDO DQG SV\FKRORJLFDO LQWHUSUHWDWLRQV DUH PRVW FHQWHU >DW WKLV OHYHO@ VR WKDW DOO WKH PHDQLQJV RI WKH ZRUN DUH RSHQHG XS WRZDUGV WKH H[WHUQDO ZRUOGµ ´3DWULFH 3DYLV $ *RRG (\H IRU 7KHDWHU µ RQ OLQH DUWLFOH

,Q LWV H[SHULPHQWDWLRQ ZLWK OD ERXIIRQQHULH /HV &UpDWLRQV 'LYLQJ +RUVH VRXJKW WR EULQJ D QHZ VHQVLWLYLW\ WR WKH SK\VLFDO DQG PHWD SK\VLFDO HOHPHQWV RI $]DPD·V WUDJLF IDUFH RQH WKDW HPSKDVL]HG DQ XQGHUVWDQGLQJ RI WKH KXPDQ FRQGLWLRQ LQ D JOREDOL]HG ZRUOG RXW VLGH RI FXOWXUDO QDWLRQDO RU SROLWLFDO UHIHUHQFHV ,W LV KHUH ZKHUH WKH LGpRORJqPH EHJLQV WR HPHUJH DQG OLQN ZLWK WKH PRYHPHQWV RI GHFHQWUDOL]DWLRQ DQG FROOHFWLYLVP³D OLQN IRXQG RQ WKH LGHRWH[WXDO OHYHO LQ WKH QRWLRQ RI ´8QLYHUVDOLVP µ

)LJXUH OHV YLHX[ WKH 2OG &RXSOH LQ /HV &UpDWLRQV 'LYLQJ +RUVHÒ&#x2039;V SURGXFWLRQ RI &URLVDGHV

WKH FDXVHV RI VRFLDO GLVSDULW\ LQ D FRPIRUWLQJ EODQNHW RI ´WRJHWKHU QHVV µ $V /DWLPHU H[SODLQV ,Q ´7KH *UHDW )DPLO\ RI 0DQ µ %DUWKHV VKRZV KRZ DQ HPR WLYH ZRUG OLNH ´IDPLO\µ FDQ Ã&#x20AC;OO XV ZLWK VHQWLPHQWDO IHHOLQJV RI FRPPRQ SXUSRVH DQG XQLYHUVDOLW\ IHHOLQJV ZKLFK ZRXOG QRW EH VR REMHFWLRQDEOH LI WKH\ GLG QRW KLGH WKH UHDO DGYDQWDJHV WKDW RQH EUDQFK RI WKH ´IDPLO\µ KDV RYHU RWKHU EUDQFKHV

7KXV LI WKH Ã&#x20AC;UVW SKDVH RI GHFHQWUDOL]DWLRQ ZDV FKDUDFWHUL]HG E\ D YLVLRQ RI VRFLDO XWRSLD WKH VHFRQG SKDVH GLVFDUGHG WKH URVH FRORUHG JODVVHV DQG DFNQRZOHGJHG WKH UHDOLW\ RI VRFLDO GLVSDULW\ 7KH GLVFRY HU\ RI %UHFKW DQG WKH DSSOLFDWLRQ RI KLV WKHRULHV E\ 5RJHU 3ODQFKRQ FRQWULEXWHG VLJQLÃ&#x20AC;FDQWO\ WR WKLV DHVWKHWLF UHYROXWLRQ ´/LNH %UHFKW 3ODQFKRQ IRXJKW WR FUHDWH D WKHDWUH WKDW UHVSHFWV WKH KXPDQ GLPHQ VLRQ RI OLYHG H[SHULHQFH EXW KH DOVR VHHNV WR VXUSULVH KLV DXGLHQFH E\ UHIXVLQJ IDPLOLDU LPDJHV DQG E\ PDNLQJ QHZ VLJQV DQG QHZ PHDQ LQJV DSSHDU LQ WKH UHSUHVHQWDWLRQµ 3ODQFKRQ·V ODUJHU SROLWL FDO JRDO ZDV WR SRSXODUL]H WKH WKHDWHU DQG PDNH LW SHUWLQHQW WR WKH ZRUNLQJ FODVV KH EHOLHYHG WKDW LW ZDV LPSRUWDQW WR SUHVHQW WKH ´QRQ FXOWLYDWHG DXGLHQFHµ ZLWK WKH ´YHU\ EHVWµ WKDW WKHDWHU KDG WR RIIHU ´DQG WKHQ VHH ZKDW KDSSHQVµ %UDGE\ :KHQ WKLV JRDO IDLOHG WR EH DFKLHYHG DQG WKH ZRUNLQJ FODVVHV UHPDLQHG LQGLIIHUHQW WR WKH WKHDWHU 3ODQFKRQ ZDV QRW VXUSULVHG DV %UDGE\ H[SODLQV EHFDXVH KH UHDOL]HG WKDW WKH WKHDWHU FRXOG QRW KDYH ´D ORW RI LPSDFW RQ D VWDWH RI WKLQJV WKDW RQO\ D FKDQJH LQ FLYLOL]DWLRQ FDQ DOWHUµ

5HYLHZ

KLGGHQ LQ GUDPDWXUJLFDO WHFKQLTXHV RI IUDJPHQWDWLRQ EDQDOL]DWLRQ DPELJXLW\ PRFNHU\ DQG GLVWDQFLDWLRQ LW SXQFWXDWHV D FRQVFLRXV UH MHFWLRQ RI D VWULFW UHDOLVWLF UHSUHVHQWDWLRQ LQ IDYRU RI D K\EULG SHUIRU PDQFH VW\OH WKDW RVFLOODWHV EHWZHHQ UHDOLVP DQG WKH IDQWDVWLF ZKHUH YUDLVHPEODQFH IXVHV ZLWK WKH H[WUDRUGLQDLUH

1)050 $"30-*/& )":&63

,Q RUGHU WR JHW D PRUH FRQFUHWH XQGHUVWDQGLQJ RI OD ERXIIRQQHULH DQG KRZ LW ZRUNV WRZDUG DFKLHYLQJ LWV SDUWLFXODU EUDQG RI XQLYHUVDO LVP OHW XV FRQVLGHU D IHZ SKRWRV IURP /HV &UpDWLRQV 'LYLQJ +RUVH·V SURGXFWLRQ RI &URLVDGHV 6WDUWLQJ ZLWK WKH SRUWUD\DO RI WKH 2OG &RXSOH ´OHV YLHX[ µ ZH QRWLFH WKDW WKH\ DSSHDU DV ERWK KXPDQ DQG QRQ KXPDQ ZLWK WKHLU VWUDQJHO\ FRORUHG VNLQ DQG IDFHV ORQJ FODZ OLNH QDLOV ZLOG DQG EHDVWO\ KDLU DQG WKHLU H[WUDYDJDQW VXUUHDOLVWLF FRVWXPHV )LJXUH $GGLWLRQDOO\ WKH DFWRUV FRQWRUW WKHLU ERGLHV DOWHU DQG GHIRUP WKHLU JHVWXUHV DQG SRVWXUH FDXVLQJ WKHP WR DSSHDU VRPHZKDW DOLHQ WR KXPDQLW\ WKH\ FDQ QHLWKHU EH ORFDOL]HG QRU LGHQ WLÀHG E\ QDWLRQDOLW\ HWKQLFLW\ VH[ QRU UDFH 7KLV DOORZV WKH FRXSOH WR DSSHDU DV VWUDQJHO\ IDPLOLDU FUHDWXUHV KDYLQJ VRPH UHODWLRQ WR WKH ´UHDO ZRUOG µ EXW QRW HQWLUHO\ D SDUW RI LW

)LJXUH 7KH DQGURJ\QRXV 0DPDQ 3RXOH

$QRWKHU H[DPSOH IURP WKH SURGXFWLRQ WKDW VHUYHV WR LOOXVWUDWH VRPH RI WKH XQLYHUVDOL]LQJ FKDUDFWHULVWLFV RI OD ERXIIRQQHULH LQFOXGHV WKH SRUWUD\DO RI WKH FKDUDFWHU ´0DPDQ 3RXOHµ )LJXUH 6KH DSSHDUV DQGURJ\QRXV LQ KHU FXULRXVO\ GHVLJQHG FRVWXPH FRPSRVHG RI D IUHH ÁRZLQJ IDGHG UXVWLF \HOORZ JRZQ DGRUQHG ZLWK D ODUJH KHDG SLHFH FRQVLVWLQJ RI D PHWDO SODWH WRSSHG ZLWK VNHOHWDO SURWUXVLRQV WKDW H[ WHQG QHDUO\ D IRRW LQWR WKH DLU +DQJLQJ IURP KHU QHFN DUH VHYHUDO OD\HUV RI EHDGV RI YDULRXV VL]HV DQG FRORUV +HU IDFH LV FRYHUHG HQ WLUHO\ ZLWK D KHDY\ WKLFN ZKLWH PDNHXS WKDW HUDVHV DQ\ WUDFH RI JHQ GHU VSHFLÀFLW\ $QG LQ VWDUN FRQWUDVW WR KHU DOO HQFRPSDVVLQJ ZKLWH PDNHXS LV WKH SDLQWHG RQ EORRG UHG PDVN WKDW HQFLUFOHV KHU H\HV 6KH FDUULHV ZLWK KHU D PXPPLÀHG GROO ZUDSSHG LQ WDWWHUHG FORWK DQG

%\ WKH V D QHZ JHQHUDWLRQ RI WKHDWHU DUWLVWV KDG FRPH WR LQKHULW WKH JRDOV DQG FRQVHTXHQWO\ WKH FRQWUDGLFWLRQV RI GHFHQWUDOL]DWLRQ DQG LW LV DW WKLV WLPH WKDW D QHZ YLVLRQ RI WKH GUDPDWXUJH GHYHORSHG 7KH FUpDWLRQ FROOHFWLYH UHSUHVHQWHG D UHQHZHG DWWHPSW WR PDNH WKH DWHU SHUWLQHQW WR WKH ZRUNLQJ FODVVHV ZKLOH DW WKH VDPH WLPH HTXDOL] LQJ LWV SRZHU G\QDPLFV E\ UHVSHFWLQJ WKH LPSRUWDQFH RI DOO FRQWULE XWLQJ WKHDWHU SUDFWLWLRQHUV H J DFWRUV GLUHFWRUV OLJKWLQJ GHVLJQHUV VHW GHVLJQHUV 7KH GLUHFWRU ZRXOG QR ORQJHU VHUYH DV GLFWDWRU RI WKH PLVH HQ VFqQH EXW UDWKHU HYHU\ PHPEHU ZRXOG FRQWULEXWH HTXDOO\ DQG PRVW LPSRUWDQWO\ EH SDLG HTXDOO\ %XW SHUKDSV WKH PRVW VLJQLÀ FDQW FRQVHTXHQFH RI WKH FUpDWLRQ FROOHFWLYH LV WKDW LW GLPLQLVKHG WKH WUDGLWLRQDO LPSRUWDQFH DFFRUGHG WR WKH SOD\ZULJKW GUDPDWXUJH ZKR KDG QRZ EHHQ UHGXFHG WR WKH UROH RI D OLWHUDU\ DGYLVRU WR WKH FROOHF WLYHO\ SURGXFLQJ FRPSDQ\

1)050 $"30-*/& )":&63

,Q DFFRUGDQFH ZLWK 3DYLV·V PRGHO WKLV H[DPLQDWLRQ RI WKH KLVWRULFDO DQG WKHRUHWLFDO WUDQVIRUPDWLRQV LQ FRQWHPSRUDU\ )UHQFK WKHDWHU IURP WKH ÀUVW SKDVH RI GHFHQWUDOL]DWLRQ WR WKH FUpDWLRQ FROOHFWLYH IXQFWLRQV DV WKH LGHRWH[WXDO OHYHO IURP ZKLFK WR H[DPLQH WKH LGpRORJqPH WKDW FRPSULVHV WKH GUDPDWXUJ\ RI &URLVDGHV LQ 4XpEHF 'XH WR WKH H[ WUDWH[WXDO QDWXUH RI WKH LGHRWH[W KRZHYHU WKLV LGpRORJqPH LV YLVLEOH RQO\ RQ WKH LQWHU DQG DXWR WH[WXDO OHYHOV ZKHUH LW LV IXUWKHU UHÀQHG DQG RU WUDQVIRUPHG XSRQ LWV LQVHUWLRQ LQWR WKH WH[W V ,Q WKH SHUIRU PDQFH WH[W OD ERXIIRQQHULH IDFLOLWDWHV WKH DGRSWLRQ RI YDULRXV GLV JXLVHV WKDW PDVN DQ LGpRORJqPH EDVHG RQ WKH QRWLRQ RI D XQLYHUVDOLW\ )LJXUH %XUQHG 0DQ DQG 5HG 0DQ 5HYLHZ

VKH JD]HV DKHDG ZLWK DQ H[SUHVVLRQ RI GHWDFKHG FRQFHUQ RQ KHU IDFH 7KH H[WUDRUGLQDU\ QDWXUH RI WKH FRVWXPHV DQG PDNHXS SURGXFHV DQ D WHPSRUDO HIIHFW WKDW LPSHGHV ORFDOL]DWLRQ RU LGHQWLÀFDWLRQ DQG WKDW FRQWULEXWHV WR WKH ´XQLYHUVDOL]LQJµ WKHPDWLFV RI WKH WH[W 7LPH DQG VSDFH UHPDLQ OLPLQDO LQ WKLV XQLYHUVH DFWLRQ LV QHLWKHU KHUH QRU WKHUH QRZ QRU WKHQ EXW HYHU\ZKHUH DQG QRZKHUH DOO DW RQFH 7KH ,QWHU DQG $XWR 7H[WV 6KLIWLQJ RXU IRFXV EDFN QRZ WR WKH LQWHUWH[WXDO OHYHO³WKH OHYHO ZKLFK DFFRUGLQJ WR 3DDYRODLQHQ ´PDLQWDLQV D GLVFXUVLYH UHODWLRQ VKLS WR HDUOLHU LQWHUSUHWDWLRQV DOVR RIIHULQJ D SRVVLELOLW\ WR IXWXUH LQWHUSUHWDWLRQVµ³ZH FDQ QRZ EHJLQ WR H[DPLQH WKH LGpRORJqPH RI &URLVDGHV DFFRUGLQJ WR LWV UHODWLRQVKLS ZLWK RWKHU WH[WV 3DDYRODLQ HQ +HUH D ODUJHU XQGHUVWDQGLQJ RI WKH WHUP ´WH[Wµ LV LPSOLHG RQH WKDW VXUSDVVHV WUDGLWLRQDO QRWLRQV RI ´WH[Wµ DV VRPHWKLQJ ZULWWHQ RU HYHQ SHUIRUPHG ,Q WKLV FDVH LW PD\ FHUWDLQO\ LQYROYH WKLV WUDGLWLRQ DO GHÀQLWLRQ EXW FDQ DOVR LQFRUSRUDWH D PRUH FRQWHPSRUDU\ PHDQLQJ EDVHG RQ WKH LGHD WKDW HYHU\WKLQJ LV WH[W WKDW REMHFWV LGHDV SHRSOH DQG SODFHV DUH WH[WXDO ERGLHV WKDW FDQ EH ´UHDG µ ,Q WKLV ZD\ D VWXG\ RI LQWHUWH[WXDOLW\ LQ &URLVDGHV LQFOXGHV WH[WXDO HOHPHQWV IURP YDUL RXV GRPDLQV H J SROLWLFDO OLWHUDU\ VFHQRJUDSKLF

1)050 $"30-*/& )":&63

7KURXJKRXW WKH FRXUVH RI WKH SOD\ WKHUH LV D FRQWLQXDO UHYHUVDO RI UROHV DPRQJ WKH FKDUDFWHUV IULHQGV EHFRPH HQHPLHV HQHPLHV EHFRPH ORY HUV ´8Vµ EHFRPHV ´2WKHUµ WKH VWDWXV RI FRXSOHV LV DPELJXRXV 7KLV LV DQ LQWHUWH[WXDO G\QDPLF WKDW FDQ EH UHWUDFHG WKURXJKRXW WKH FRXUVH RI WKHDWHU KLVWRU\ ,Q :DLWLQJ IRU *RGRW IRU H[DPSOH PDVWHU EHFRPHV VHUYDQW DV LV WKH FDVH ZLWK /XFN\ DQG 3R]]R (QHPLHV EHFRPH IULHQGV DV ZLWK =DSR DQG =pSR LQ $UUDEDO·V 3LTXH QLTXH HQ FDPSDJQH *R LQJ HYHQ IXUWKHU EDFN VODYH EHFRPHV PDVWHU LQ 0DULYDX[· /·vOH GHV HVFODYHV SHDVDQW EHFRPHV ERXUJHRLV LQ WKH WKHDWHU RI 0ROLqUH DQG SHUKDSV LQ WKH PRVW VKRFNLQJ UROH UHYHUVDO LQ WKHDWHU KLVWRU\ PRWKHU EHFRPHV ORYHU DV ZLWK 2HGLSXV WKH .LQJ 8QOLNH PDQ\ RI WKH SUH YLRXV H[DPSOHV KRZHYHU WKLV G\QDPLF RI UHYHUVDO LV WUDQVIRUPHG LQ &URLVDGHV WR LQFRUSRUDWH QRW RQO\ D VHQVH RI DPELJXLW\ EXW D VHQVH RI IXVLRQ DV ZHOO 7KH FKDUDFWHUV GR QRW VLPSO\ VKHG WKHLU RULJLQDO UROHV DQG DVVXPH QHZ RQHV EXW UDWKHU WKH\ FRPELQH WKH WZR WKH\ UHPDLQ IULHQG DQG HQHP\ DW RQFH DOLYH \HW GHDG ORYHU DQG PXUGHUHU 7KLV IXVLRQ WUDQVIRUPV WKH LQWHUWH[WXDO HOHPHQW RI UROH UHYHUVDO DQG FUH DWHV DQ HYHQ JUHDWHU VHQVH RI DPELJXLW\ WKDW IXUWKHU FRQWULEXWHV WR WKH XQLYHUVDOL]LQJ FKDUDFWHU RI WKH WH[W·V LGpRORJqPH

)LJXUH VROGLHUV <RQDWKDQ DQG ,VPDwO

$V IRU WKH SHUIRUPDQFH RI $]DPD·V WH[W E\ /HV &UpDWLRQV 'LYLQJ +RUVH *UHHQEHUJ·V SURGXFWLRQ FOHDUO\ SRLQWV WR FRQWLQXHG H[SHUL PHQWDWLRQ LQ WKHDWULFDOL]DWLRQ RQ WKH LQWHUWH[WXDO OHYHO DQG FRQVH TXHQWO\ DVVHUWV WKH DXWRQRP\ RI WKH VWDJH DQG LWV DELOLW\ WR WUDQV IRUP DQG WUDQVFHQG WKH ZULWWHQ WH[W 2QH H[DPSOH RI WKLV LQYROYHV WKH SRUWUD\DO RI WKH FKDUDFWHUV ´%XUQHG 0DQµ DQG ´5HG 0DQ µ ,Q *UHHQEHUJ·V SURGXFWLRQ WKH WZR FKDUDFWHUV DUH FORWKHG LQ EULJKWO\ FRORUHG DQG RUQDWHO\ GHVLJQHG FRVWXPHV ZLWK UXIÁHG FROODUV DQG ÁRZLQJ VOHHYHV WKDW HYRNH LPDJHV RI WKH FRPPHGLD GHOO·DUWH 7KH WZR V\PEROL]H WKH PDVWHU VHUYDQW WUDGLWLRQ RI D +DUOHTXLQ DQG 3DQ WDORQH EXW WKLV LQWHUH[WXDO DOOXVLRQ DOVR WUDQVFHQGV WUDGLWLRQ E\ DG YDQFLQJ D GUDPDWXUJLFDO WHFKQLTXH RI PHWDWKHDWUH RQH WKDW KDV D WUL IROG VWUXFWXUH D WKHDWHU ZLWKLQ WKHDWHU ZLWKLQ WKHDWHU )LJXUH

´MRXUQH\ WRZDUG GHDWK µ 7KLV PRWLI LV RQH RI WKH PRVW VLJQLÀFDQW GUD PDWXUJLFDO VWUXFWXUHV RI WKH ZULWWHQ WH[W DV LW UHSUHVHQWV DQ XQFRQVFLRXV MRXUQH\ WRZDUG GHDWK WKDW VXUSULVHV WKH FKDUDFWHUV RQFH WKH PRPHQW DU ULYHV ´'HDWK FRPHV WR PHQ DV LW GRHV WR DQLPDOV LQ WKH VXEFRQVFLRXV µ WKH 2OG :RPDQ UHPDUNV $]DPD 6XFK D VWDWHPHQW VXJJHVWV WKDW DOO DORQJ WKH MRXUQH\ WKH VLJQV WKDW IRUHVKDGRZ GHDWK·V LQHYLWDELOLW\ DUH DOZD\V SUHVHQW OLQJHULQJ LQ WKH EDFNJURXQG ZDLWLQJ IRU VRPH XQOXFN\ SHUVRQ WR XQFRYHU WKHP 7KHVH HOXVLYH VLJQV DFFXPXODWH FRQWLQXRXVO\ XQWLO HYHQWXDOO\ WKHLU VLJQDOV DUH XQDYRLGDEOH DQG DQRWKHU FKDUDFWHU FRPSOHWHV WKH MRXUQH\ IURP WKH XQFRQVFLRXV WR WKH FRQVFLRXV WR XVH WKH 2OG :RPDQ·V ORJLF ,Q WKH SHUIRUPDQFH WH[W WKH VXEWOH DFFXPXODWLRQ RI WKHVH ´EDFNJURXQG VLJQVµ DVVXPHV PDQ\ IRUPV 2Q ORRNLQJ FKDU DFWHUV OLNH WKH 2OG &RXSOH PD\ ZDWFK DQG ZDLW SDWLHQWO\ DW D GLVWDQFH OLJKWV PD\ VORZO\ IDGH IURP EULJKWQHVV WR GDUNQHVV VLJQDOLQJ WKH LOO IDWHG DSSURDFK RI WKH XQZDQWHG YLVLWRU VRXQG HIIHFWV PD\ HFKR IDLQW QRLVHV RI GHDWK·V LPSHQGLQJ DUULYDO (YHQ FRVWXPH PD\ FRQWULEXWH WR WKLV HIIHFW 2QFH DJDLQ WKH SRUWUD\DO RI 0DPDQ 3RXOH LQ *UHHQEHUJ·V SURGXFWLRQ LOOXVWUDWHV KRZ WKLV LV DFFRPSOLVKHG )LJXUH (DFK SLHFH RI KHU FRVWXPH DQG PDNHXS VHHPV WR HYRNH DQ LPDJH RI GHDWK 7KH DLU\ \HOORZ JRZQ DQG ZKLWH PDNHXS FDXVH 0DPDQ 3RXOH WR DSSHDU DV D IUHH ÁRDWLQJ JKRVW ZKR RIWHQ ORRPV RPLQRXVO\ LQ WKH GDUN VKDGRZV +HU UHG PDVNHG H\HV SURYRNH GLVWXUELQJ LPDJHV RI D ZRXQGHG EORRG FRYHUHG ERG\ ZKLOH WKH VNHOHWDO KHDGSLHFH VHUYHV DV D YLVXDO VLJQ RI GHFD\HG UHPDLQV 7KHVH DUH WKH VPDOO SLHFHV RI DQ DFFXPXODWLQJ YHFWRU WKDW KHOS WR DUWLFXODWH WKH ´GHDWK PDUFKµ PRWLI DQRWKHU GLPHQVLRQ RI WKH XQLYHUVDOL]LQJ LGpRORJqPH RQ WKH LQWHUWH[WXDO OHYHO

$QRWKHU H[DPSOH RI LQWHUWH[WXDO SOD\ LQ WKLV 4XpEHFRLV SURGXFWLRQ LV D PHGLWDWLRQ RQ WKH PRWLI RI OD PDUFKH IXQqEUH RU ZKDW LV NQRZQ DV WKH

)LQDOO\ RXU XQGHUVWDQGLQJ RI LGHRORJ\ DV DQ LQÀQLWHO\ SHUYDVLYH VWUXFWXUH WKDW LPSRVHV LWVHOI RQ ERWK SURGXFWLRQ DQG UHFHSWLRQ QHFHV 5HYLHZ

VDULO\ LPSOLHV WKDW DW DQ\ JLYHQ PRPHQW ZLWKLQ WKH DXWRWH[W RI SHU IRUPDQFH WKH WUDFHV RI WKH LGpRORJqPH DUH SUHVHQW DQG UHDGDEOH 7KH DXWRWH[W ´IRFXVHV RQ WKH FORVHG RII DVSHFW RI WKH ZRUOG FUHDWHG RQ VWDJH WKH SOD\ DV ZHOO DV LWV SHUIRUPDQFH UHPDLQV >VLF@ ¶ZLWKLQ WKHLU RZQ ZRUOG·µ 3DDYRODLQHQ 7KH DYDQW JDUGH DQG 6\PEROLVW VWDJHV DUH SULPH H[DPSOHV RI DXWRWH[WXDO PLVH HQ VFqQH LQ WKHLU DELOLW\ WR FUHDWH D XQLTXHO\ VHOI UHIHUHQWLDO WKHDWULFDO XQLYHUVH FXW RII IURP WKH RXWVLGH ZRUOG DQG QRW LQGXOJLQJ LQ WKH IHWLVK RI PLPHVLV 7KHUHIRUH ZH ZLOO FRQVLGHU DQRWKHU LPDJH IURP *UHHQEHUJ·V SURGXFWLRQ RI &URLVDGHV WKDW FOHDUO\ FRPPXQLFDWHV LQ D YHU\ SK\VLFDO VHQVH WKH DPELJXLW\ HYRNHG E\ WKH XQLYHUVDOL]LQJ LGpRORJqPH ,W LV DQ LPDJH RI WKH WZR SURWDJRQLVWV WKH VROGLHUV <RQDWKDQ DQG ,VPDwO DV WKH\ DUH UHXQLWHG DW WKH HQG RI WKH SOD\ )LJXUH $W WKLV PRPHQW <RQDWKDQ DQG ,VPDw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ÁH PDVN WKH RWKHU OHJ $OWKRXJK RQH VROGLHU DSSHDUV WR EH FDU U\LQJ WKH RWKHU LW LV QRW FOHDU ZKR VXSSRUWV ZKRP WKHLU ERGLHV PRYH IRUZDUG DV RQH HQWLW\ OLNH D SDLU RI FRQMRLQHG WZLQV WZR DXWRQRPRXV LQGLYLGXDOV PHOGHG LQWR RQH ,Q VKRUW WKH\ DUH EXIIRRQV

HU\ RI %UHFKW $OWKRXJK %UHFKW ZDV E\ QR PHDQV D PHWDSK\VLFLVW OLNH $UWDXG D SDUDOOHO EHWZHHQ WKH WZR LV QHYHUWKHOHVV DSSDUHQW LQ WKH LPSRUWDQFH WKDW ERWK PHQ SODFHG RQ WKH FRPPXQLFDWLYH SRZHU RI SHUIRUPDQFH DQG LWV DELOLW\ WR WUDQVFHQG WKH ZULWWHQ WH[W D EH OLHI WKDW FRQVHTXHQWO\ SURYRNHG %DUWKHV WR GHVFULEH %UHFKW DV ´D 0DU[LVW ZKR WKRXJKW DERXW WKH HIIHFWV RI WKH VLJQ D UDUH WKLQJ µ $V %UDGE\ FRQWLQXHV

7KLV VWXG\ RI OD ERXIIRQQHULH LQ &URLVDGHV LQ 4XpEHF VLJQDOV KRZ FRQWHPSRUDU\ )UHQFK GUDPDWXUJLH KDV HYROYHG WR HPSKDVL]H WKH LPSRUWDQFH RI WKH SK\VLFDOLW\ RI VWDJH ODQJXDJH 6LQFH $UWDXG WKH UHODWLRQVKLS EHWZHHQ WKH ZULWWHQ WH[W DQG SHUIRUPDQFH KDV EHHQ YLJ RURXVO\ GHEDWHG LQ )UHQFK WKHDWUH VHPLRWLFV VWXGLHV $UWDXG KLPVHOI DFNQRZOHGJHG WKH H[LVWHQFH RI D SXUHO\ WKHDWULFDO ODQJXDJH RQH WKDW FRXOG RQO\ EH ZULWWHQ DQG XQGHUVWRRG LQ VSDFH ZKHUH DFWRUV DQG WKHLU FRVWXPHV DSSHDUHG DV ´KLHURJO\SKV µ VLJQDOLQJ VRPH ORQJ IRU JRWWHQ PHVVDJH RULJLQDOO\ FRQFHLYHG DW WKH FUHDWLRQ RI WKH XQLYHUVH LWVHOI 7KH ZULWWHQ WH[W DW PRVW ZDV QR PRUH WKDQ D SURS IRU KLP LQ KLV SXUVXLW WR UHGLVFRYHU WKLV PHWDSK\VLFDO ODQJXDJH

´7KH WH[WV DUH HDVLHU WR DFW WR LQWHUSUHW RQ VWDJH E\ DQ DFWRU WKDQ WKH\ DUH WR UHDG DV LI LW VXIÀFHG WR XQIROG WKHP WR WDNH WKHP RXW RI WKHLU SDFNDJLQJ LQ RUGHU WR GHSOR\ WKHP RQ VWDJH DQG PDNH WKHP DFFHVVLEOH WR WKH VSHFWDWRU·V JD]Hµ 3DYLV ,Q WKH HQG FRQWHP SRUDU\ )UHQFK GUDPDWXUJLH LV WR EH WDNHQ DW IDFH YDOXH LW SUHVHQWV FRPSOH[ ZRUOGV ZLWKRXW VHHNLQJ LPPHGLDWH XQGHUVWDQGLQJ ´,W LV QR ORQJHU D TXHVWLRQ RI LQWHUSUHWLQJ RU WUDQVIRUPLQJ WKH ZRUOG LQ WKH ZD\ WKDW +HJHO RU 0DU[ IRUPHUO\ GLG EXW UDWKHU RI LQWHUSRODWLQJ TXHVWLRQLQJ ZLWKRXW KRZHYHU ZDLWLQJ IRU DQ LPPHGLDWH UHVSRQVH LQ UHWXUQµ $FFRUGLQJO\ FRQWHPSRUDU\ )UHQFK GUDPDWXUJLH W\SL FDOO\ KDV VSDUVH VWDJH GLUHFWLRQV VSDUVH FKDUDFWHU GHVFULSWLRQ VSDUVH QDUUDWLYH WKH VWRU\WHOOLQJ OLHV RQ VWDJH DQG LQ WKH LPDJLQDWLRQV RI GLUHFWRUV DFWRUV GHVLJQHUV WHFKQLFLDQV ZKR FRQFUHWL]H WKH VFULSW ZKR JLYH LW YRLFH LQWHQWLRQ DQG VLJQLÀFDQFH

%UHFKW ZDV YHU\ DZDUH RI YHUEDO DQG VHPLRORJLFDO FRPPX QLFDWLRQ RI WKH IXQFWLRQ RI JHVWXUH DV ZHOO DV WKH IXQFWLRQ RI ODQJXDJH DQG KLV SOD\V DUH QRW HQWLUHO\ WKHPVHOYHV DV PXFK DV WKH\ DUH GDWD LQ D ODQJXDJH ZKRVH HYHU\ HOHPHQW HYHU\ REMHFW HYHU\ PRYHPHQW FDUULHV PHDQLQJ

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ÀFDQFH LQ DQ LQGLIIHUHQW ZRUOG 7KH ODQJXDJH RI WKH WKHDWHU WXUQHG LQZDUG DXWRQRPLF EHFRPLQJ LQWURVSHFWLYH DQG VHOI UHIHUHQWLDO UDWKHU WKDQ PLPHWLF DQG UHSUHVHQWDWLRQDO LW VRXJKW WR FRQVWUXFW UHDOLW\ UDWKHU WKDQ UHÁHFW LW ,QGLYLGXDO LGHQWLW\ ZDV 7KLV EHJLQV WR GHPRQVWUDWH WKH LQWHUGHSHQGHQW UHODWLRQVKLS EHWZHHQ VDFULÀFHG DQG FKDUDFWHUV OLNH 'LGL DQG *RJR =DSR DQG =pSR DQG ÀFWLRQDOL]DWLRQ DQG LGHRORJ\ LQ 3DYLV·V ´FLUFXLW RI FRQFUHWL]DWLRQ µ 0U DQG 0UV 0DUWLQ PDGH WKHLU VWDJH GHEXWV FDOOLQJ LQWR TXHVWLRQ ,Q WKH SHUIRUPDQFH WH[W WKH HOHPHQW RI OD ERXIIRQQHULH WUDQVIRUPV WKH YDOLGLW\ RI LQGLYLGXDO HVVHQFH WKH LGpRORJqPH RI WKH SOD\ WKURXJK LWV LPSOHPHQWDWLRQ RI PRFNHU\ DQG SDURG\ LW WHVWLÀHV WR WKH HFOHFWLF QDWXUH RI FRQWHPSRUDU\ GUDPD 6LQFH WKHQ FRQWHPSRUDU\ )UHQFK GUDPDWXUJLH KDV UHVSRQGHG WR WXUJ\ FRPELQJ SRVW DEVXUGLVW NDOHLGRVFRSLF IUDJPHQWDWLRQ ZKLOH WKLV GLVFRXUVH FRQFHUQLQJ WKH VWDWXV RI ODQJXDJH E\ FUHDWLQJ SOD\V IXVLQJ WKH H[WUDRUGLQDU\ ZLWK WKH PXQGDQH 7KH ERXIIRQ·V ´WKHDWUL WKDW WHQG WR EH ´SHUIHFWO\ UHDGDEOH 7KHVH ZULWHUV· WH[WV DUH UHDG FDO ODQJXDJHµ DOWHUQDWHV GHOLFDWHO\ EHWZHHQ SHMRUDWLYH DUJRW DQG HO DV OLWHUDU\ ZRUNV 7KH\ ZHUH KRZHYHU ZULWWHQ IRU WKH VWDJHµ HYDWHG SRHWU\ WKH ERXIIRQ XQGHUPLQHV WKH YDOLGLW\ RI DOO NQRZOHGJH 3DYLV ´6\QWKqVH µ 7KHVH QHZ SOD\V E\ WKHVH \RXQJ SOD\ KH TXHVWLRQV WKH OHJLWLPDF\ RI ZDUV ´FUXVDGHVµ WKDW DUH ZDJHG RQ ZULJKWV DUH ´ZKDW WKH\ DUHµ WKH\ DUH WR EH WDNHQ DW IDFH YDOXH IDXOW\ OLQHV RI GHPDUFDWLRQ EHWZHHQ D QRW VR FOHDUO\ GHÀQHG ´8Vµ WKH\ SUHVHQW FRPSOH[ ZRUOGV ZLWKRXW VHHNLQJ LPPHGLDWH XQGHU DQG ´7KHP µ &RPSRVHG RI LWV H[DJJHUDWHG FORZQ OLNH PDNHXS DQG VWDQGLQJ :KHUHDV WKH QRXYHDX WKpkWUH RI %HFNHWW RU ,RQHVFR H[WUDYDJDQW FRVWXPHV WKH ERXIIRRQHVTXH SHUIRUPDQFH WUDQVIRUPV RIWHQ HPSKDVL]HG WKH LPSRVVLELOLW\ RI ODQJXDJH WR FRPPXQLFDWH WKH LGpRORJqPH RI XQLYHUVDOLW\ WR PDNH D PRFNHU\ RI FHUWDLQW\ DQG DQ\WKLQJ PHDQLQJIXO WRGD\·V )UHQFK SOD\ZULJKWV SUHIHU OLQJXLV WKURXJK D SDUDGR[LFDO GHVLUH IRU JUHDWHU REMHFWLYLW\ WKH ERXIIRQ VWULSV WLF VLPSOLÀFDWLRQ LQYLWLQJ WKHLU UHDGHUV WR ´WR WDNH WKHP DW WKHLU WKH LGpRORJqPH RI LWV FRQÀQLQJ VLQJXODULW\ LQ WKLV 4XpEHFRLV FRQWH[W ZRUG WR QRW ORRN IRU PHWDSKRULF RU KLGGHQ PHDQLQJVµ 6XFK D PRYH WRZDUG VLPSOLÀFDWLRQ FRQVHTXHQWO\ IDFLOLWDWHV HDVLHU DF &RQFOXVLRQ FHVV IRU WKH SXUSRVHV RI WKHDWULFDOL]DWLRQ

)XUWKHUPRUH FRQWULEXWLQJ WR WKLV GLVFRXUVH FRQFHUQLQJ WKH DXWRQR P\ RI WKHDWULFDO ODQJXDJH LQ )UHQFK GUDPDWXUJLH ZDV WKH GLVFRY 5HYLHZ

:25.6 &,7('

,OV >OHV GUDPDWXUJHV FRQWHPSRUDLQV@ QH VH UpFODPHQW G·DXFXQH $]DPD 0LFKHO &URLVDGHV (GLWLRQV 7KpkWUDOHV 3DULV SKLORVRSKLH³H[LVWHQWLDOLVPH QLKLOLVPH DEVXUGH PDU[LVPH³QL G·DXFXQ PRXYHPHQW DUWLVWLTXH $OO WUDQVODWLRQV IURP WKH )UHQFK %DUWKHV 5RODQG ´7KH *UHDW )DPLO\ RI 0DQ µ &RQWHPSRUDU\ &ULWLFDO 7KHRU\ 'DQ /DWLPHU HG +DUFRXUW %UDFH -RYDQRYLFK DUH WKH DXWKRU·V XQOHVV QRWHG RWKHUZLVH

/HXU XQLYHUV HVW SOXW{W FHOXL GHV UHSUpVHQWDWLRQV LQGLYLGXHOOHV 3XEOLVKHUV 6DQ 'LHJR OHVTXHOOHV Q·H[FOXHQW SDV XQH VDLVLH JOREDOH GHV SUREOqPHV /D ERXIIRQQHULH F·HVW WUqV YDVWH 3RXU PRL FH TXL HVW FDSLWDO F·HVW %UDGE\ 'DYLG /H 7KpkWUH )UDQoDLV &RQWHPSRUDLQ O·pOpPHQW GH SDURGLH /HV ERXIIRQV VH PRTXHQW GH QRXV PDLV DXVVL 7UDQV *HRUJHV DQG )UDQoRLVH 'RWWLQ /LOOH 3UHVVHV 8QLYHUVLWDLUHV GH QRV FUR\DQFHV GH QRV FRQYLFWLRQV OHV SOXV SURIRQGHV /·pOpPHQW GH /LOOH GH PRTXHULH SRUWH XQ FHUWDLQ P\VWqUH dD SHUPHW GH SRVHU XQ UHJDUG GLIIpUHQW VXU OHV FKRVHV GH V·HQ GLVWDQFLHU XQ SHX G·HQ SDUOHU G·XQH &RSHDX -DFTXHV /H 7KpkWUH SRSXODLUH 3DULV 3UHVVHV 8QLYHUVLWDLUHV IDoRQ TXL QH VHUDLW SDV SRVVLEOH j PRQ DYLV DYHF OH PpORGUDPH RX OD WUDJpGLH j XQH pSRTXH R OHV JHQV RQW XQH FHUWDLQH OXFLGLWp GRQQHQW O·LPSUHVVLRQ TX·LOV QH VRQW SDV QRXV ,OV YLHQQHQW *LUDUG 'DQLHO DQG -HDQ 3LHUUH (QJHOEDFK ´5pVLGHQFHV G·pFULWXUHV µ G·DLOOHXUV FH TXL RIIUH GpMj XQH OLEHUWp GH MHX QRXV LQFLWH GDYDQWDJH &URLVDGHV (GLWLRQV 7KpkWUDOHV 3DULV j DFFHSWHU FH TX·LOV GLVHQW &·HVW GLIIpUHQW GX FORZQ 2Q V·LGHQWLÀH DX FORZQ TXDQG LO D XQ DFFLGHQW VXU VFqQH RQ HQ ULW 7DQGLV TX·RQ D /DEUHFTXH 0DULH ´/H WHPSV GHV ERXIIRQVµ 9RLU D ZHHNO\ DUWV DQG O·LPSUHVVLRQ TXH OHV ERXIIRQV ULHQW GH QRXV (W F·HVW XQ ULUH MDXQH oD FXOWXUH MRXUQDO 0RQWUpDO )HEUXDU\ SHXW WRXFKHU OH WHUULWRLUH GH OD WUDJpGLH GH IRXUQLU XQ HVSDFH R O·RUGUH SRXYDLW WULRPSKHU GX FKDRV HW /DWLPHU 'DQ &RQWHPSRUDU\ &ULWLFDO 7KHRU\ +DUFRXUW %UDFH -RYD QRYLFK 3XEOLVKHUV 6DQ 'LHJR R OHV rWUHV KXPDLQV SRXYDLHQW V·XQLU SRXU DFTXpULU OD VDJHVVH &RPPH %UHFKW 3ODQFKRQ V·HVW EDWWX SRXU FUpHU XQ WKpkWUH TXL UHVSHFWH OD GLPHQVLRQ KXPDLQH GH O·H[SpULHQFH YpFXH PDLV FKHUFKH /H &RT -DFTXHV 7KH 0RYLQJ %RG\ 7HDFKLQJ &UHDWLYH 7KHDWUH DXVVL j VXUSUHQGUH VRQ SXEOLF HQ UHIXVDQW OHV LPDJHV IDPLOLqUHV HW 7UDQV 'DYLG %UDGE\ 5RXWOHGJH 1HZ <RUN HQ IDLVDQW DSSDUDvWUH j OD UHSUpVHQWDWLRQ GHV VLJQHV HW GHV VHQV QRX 3DDYRODLQHQ 3HQWWL ´3DWULFH 3DYLV²$ *RRG (\H IRU 7KHDWHU µ +HOVLQNL $FW YHDX[ 7KHDWUH $FDGHP\ RI )LQODQG 2FW KWWS ZZZ WHDN À WHDN $&7 HW HQVXLWH YRLU FH TXL VH SDVVH EHDXFRXS G·LPSDFW VXU XQ pWDW GH FKRVHV TXH VHXO XQ FKDQJH SDYLV KWPO !

PHQW GH FLYLOLVDWLRQ SHXW PRGLÀHU /D PRUW DUULYH DX[ KRPPHV FRPPH DX[ ErWHV GDQV 3DYLV 3DWULFH ´7KH 6WDWH RI &XUUHQW 7KHDWHU 5HVHDUFKµ $6 6$ $SSOLHG 6HPLRWLFV /D VpPLRWLTXH DSSOLTXpH 2FW O·LQFRQVFLHQFH XQ PDU[LVWH TXL DYDLW UpÁpFKL VXU OHV HIIHWV GX VLJQH FKRVH ZZZ FKDVV XWRURQWR FD IUHQFK DV VD $66$ 1R 33 KWPO! UDUH %UHFKW pWDLW WUqV VHQVLEOH j OD FRPPXQLFDWLRQ YHUEDOH HW VpPL 'LFWLRQDU\ RI WKH 7KHDWUH 7HUPV &RQFHSWV DQG $QDO\VLV RORJLTXH j OD IRQFWLRQ GX JHVWH DXWDQW TX·j FHOOH GX ODQJDJH HW VHV 7UDQV &KULVWLQH 6KDQW] 7RURQWR DQG %XIIDOR 8QLYHUVLW\ RI 7RURQWR SLqFHV QH VRQW SOHLQHPHQW HOOHV PrPHV TXH GRQQpHV GDQV XQ ODQJDJH 3UHVV GRQW FKDTXH pOpPHQW FKDTXH REMHW FKDTXH PRXYHPHQW HVW SRUWHXU ´3URGXFWLRQ DQG 5HFHSWLRQ LQ WKH 7KHDWUH µ 1HZ 'LUHFWLRQV LQ GH VHQV SDUIDLWHPHQW OLVLEOHV &HV WH[WHV G·DXWHXU VH OLDVHQW FRPPH 7KHDWUH (G -XOLDQ +LOWRQ 1HZ <RUN 6W 0DUWLQ·V 3UHVV GHV RHXYUHV OLWWpUDLUHV ,OV RQW FHUWHV pWp pFULWV SRXU OD VFqQH OHV SUHQGUH j OD OHWWUH GH QH SDV OHXU FKHUFKHU GHV VHQV PpWD ´6\QWKqVH SUHPDWXUH RX IHUPHWXUH SURYLVRLUH SRXU FDXVH G·LQYHQWDLUH GH ÀQ GH VLqFOH µ 7H[WH G·XQH FRQIHUHQFH SURQRQFpH j SKRULTXHV RX FDFKpV /HV WH[WHV VRQW SOXV IDFLOHV j MRXHU j LQWHUSUpWHU VXU XQH VFqQH 0DGULG OH QRYHPEUH ORUV GX FRQJUHVVR ,QWHUQDFLRQDO DXWRU SDU XQ DFWHXU TX·j OLUH FRPPH V·LO VXIÀVDLW GH OHV GpSOLHU GH OHV WHDWUDO \ VLJOR ;; RUJDQLVp SDU &pVDU 2OLYD (QJOLVK WUDQVODWLRQ VRUWLU GH OD ERvWH GX OLYUH SRXU OHV GpSOR\HU VXU OD VFqQH HW OHV UHQGUH ´3UHPDWXUH 6\QWKHVLV 7HPSRUDU\ &ORVXUH IRU (QG RI &HQWXU\ ,Q YHQWRU\µ 7KHDWUH )RUXP

DFFHVVLEOHV DX UHJDUG GX VSHFWDWHXU ,O QH V·DJLW SOXV G·LQWHUSUpWHU QL GH WUDQVIRUPHU OH PRQGH j OD PDQLqUH DQFLHQQH G·XQ +HJHO RX G·XQ 0DU[ PDLV GH O·LQWHUSHOOHU 9RL[ HW LPDJHV GH OD VFqQH /LOOH 3UHVVHV 8QLYHUVLWDLUHV GH /LOOH VDQV SRXUWDQW DWWHQGUH GH UpSRQVH LPPpGLDWH HQ UHWRXU 127(6

5HYLHZ