&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
&66EDVLFER[PRGHO:&:RUNLQJ'UDIW$XJXVW7KLVYHUVLRQ
KWWSZZZZRUJ75:'FVVER[/DWHVWYHUVLRQ
KWWSZZZZRUJ75FVVER[3UHYLRXVYHUVLRQ
KWWSZZZZRUJ75:'FVVER[(GLWRUV
%HUW%RV:&EHUW#ZRUJ
&RS\ULJKW:&0,7(5&,0.HLR$OO5LJKWV5HVHUYHG:&OLDELOLW\WUDGHPDUNDQGGRFXPHQWXVHUXOHVDSSO\
$EVWUDFW&66&DVFDGLQJ6W\OH6KHHWVGHVFULEHVWKHUHQGHULQJRIGRFXPHQWVRQYDULRXVPHGLD:KHQWH[WXDOGRFXPHQWVHJ+70/DUHODLGRXWRQYLVXDOPHGLDHJVFUHHQRUSULQW&66PRGHOVWKHGRFXPHQWDVDKLHUDUFK\RIER[HVFRQWDLQLQJZRUGVOLQHVSDUDJUDSKVWDEOHVHWFHDFKZLWKSURSHUWLHVVXFKDVVL]HFRORUDQGIRQW
7KLVPRGXOHGHVFULEHVWKHEDVLFW\SHVRIER[HVZLWKWKHLUSDGGLQJDQGPDUJLQDQGWKHQRUPDOIORZLHWKHVHTXHQFHRIEORFNVRIWH[WZLWKPDUJLQVLQEHWZHHQ,WDOVRGHILQHVIORDWLQJER[HVEXWRWKHUNLQGVRIOD\RXWVXFKDVWDEOHVDEVROXWHSRVLWLRQLQJUXE\DQQRWDWLRQVJULGOD\RXWVFROXPQVDQGQXPEHUHGSDJHVDUHGHVFULEHGE\RWKHUPRGXOHV$OVRWKHOD\RXWRIWH[WLQVLGHHDFKOLQHLQFOXGLQJWKHKDQGOLQJRIOHIWWRULJKWDQGULJKWWROHIWVFULSWVLVGHILQHGHOVHZKHUH
%R[HVPD\FRQWDLQHLWKHUKRUL]RQWDORUYHUWLFDOOLQHVRIWH[W%R[HVRIGLIIHUHQWRULHQWDWLRQVPD\EHPL[HGLQRQHIORZ7KLVLVDOHYHOIHDWXUH
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
7KLVLVDOHYHOIHDWXUH
6WDWXVRIWKLVGRFXPHQW7KLVVHFWLRQGHVFULEHVWKHVWDWXVRIWKLVGRFXPHQWDWWKHWLPHRILWVSXEOLFDWLRQ2WKHUGRFXPHQWVPD\VXSHUVHGHWKLVGRFXPHQW$OLVWRIFXUUHQW:&SXEOLFDWLRQVDQGWKHODWHVWUHYLVLRQRIWKLVWHFKQLFDOUHSRUWFDQEHIRXQGLQWKH:&WHFKQLFDOUHSRUWVLQGH[DWKWWSZZZZRUJ75
3XEOLFDWLRQDVD:RUNLQJ'UDIWGRHVQRWLPSO\HQGRUVHPHQWE\WKH:&0HPEHUVKLS7KLVLVDGUDIWGRFXPHQWDQGPD\EHXSGDWHGUHSODFHGRUREVROHWHGE\RWKHUGRFXPHQWVDWDQ\WLPH,WLVLQDSSURSULDWHWRFLWHWKLVGRFXPHQWDVRWKHUWKDQZRUNLQSURJUHVV
7KHDUFKLYHGSXEOLFPDLOLQJOLVWZZZVW\OH#ZRUJVHHLQVWUXFWLRQVLVSUHIHUUHGIRUGLVFXVVLRQRIWKLVVSHFLILFDWLRQ:KHQVHQGLQJHPDLOSOHDVHSXWWKHWH[WFVVER[LQWKHVXEMHFWSUHIHUDEO\OLNHWKLV>FVVER[@VXPPDU\RIFRPPHQW
7KLVGRFXPHQWZDVSURGXFHGE\WKH&66:RUNLQJ*URXSSDUWRIWKH6W\OH$FWLYLW\
7KLVGRFXPHQWZDVSURGXFHGE\DJURXSRSHUDWLQJXQGHUWKH)HEUXDU\:&3DWHQW3ROLF\:&PDLQWDLQVDSXEOLFOLVWRIDQ\SDWHQWGLVFORVXUHVPDGHLQFRQQHFWLRQZLWKWKHGHOLYHUDEOHVRIWKHJURXSWKDWSDJHDOVRLQFOXGHVLQVWUXFWLRQVIRUGLVFORVLQJDSDWHQW$QLQGLYLGXDOZKRKDVDFWXDONQRZOHGJHRIDSDWHQWZKLFKWKHLQGLYLGXDOEHOLHYHVFRQWDLQV(VVHQWLDO&ODLPVPXVWGLVFORVHWKHLQIRUPDWLRQLQDFFRUGDQFHZLWKVHFWLRQRIWKH:&3DWHQW3ROLF\
7KLVPRGXOHVKRXOGHYHQWXDOO\UHSODFHFRUUHVSRQGLQJSDUWVRIWKHUHYLVHG&66OHYHOVSHFLILFDWLRQ>&66@%XWWKLVLVDQHDUO\GUDIWDQGDQ\GLIIHUHQFHVWROHYHODUHPRVWOLNHO\XQLQWHQWLRQDOXQOHVVWKH\FRQFHUQQHZIHDWXUHVVXFKDVYHUWLFDOWH[WRUWKHPDUTXHHHIIHFW3OHDVHKHOSXVLPSURYHWKHQH[WGUDIWE\SRLQWLQJRXWVXFKGLIIHUHQFHV
7DEOHRIFRQWHQWV'HSHQGHQFLHVRQRWKHUPRGXOHV
,QWURGXFWLRQ
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
+RZWRUHDGWKLVVSHFLILFDWLRQ
7\SHVRIER[HV7KHGLVSOD\SURSHUW\%ORFNOHYHOER[HVFRQWDLQLQJEORFNVIORZVDQGDQRQ\PRXVER[HV5XQLQER[HV&RPSDFWER[HV
7KHSDGGLQJSURSHUWLHV
0DUJLQV7KHPDUJLQSURSHUWLHV&ROODSVLQJPDUJLQV
7KHZLGWKDQGKHLJKWSURSHUWLHV
7KHPLQZLGWKPD[ZLGWKPLQKHLJKWDQGPD[KHLJKWSURSHUWLHV
&DOFXODWLQJZLGWKVKHLJKWVDQGPDUJLQV,QOLQHQRQUHSODFHGHOHPHQWV,QOLQHRUIORDWLQJUHSODFHGHOHPHQWV%ORFNOHYHOQRQUHSODFHGHOHPHQWVLQQRUPDOIORZZKHQRYHUIORZFRPSXWHVWRYLVLEOH2WKHUEORFNOHYHOQRQUHSODFHGHOHPHQWVLQQRUPDOIORZ,QOLQHEORFNRUIORDWLQJQRQUHSODFHGHOHPHQWV$EVROXWHO\SRVLWLRQHGQRQUHSODFHGHOHPHQWV$EVROXWHO\SRVLWLRQHGUHSODFHGHOHPHQWV%ORFNOHYHOUHSODFHGHOHPHQWVLQQRUPDOIORZ)ORDWLQJQRQUHSODFHGHOHPHQWV$XWRKHLJKWVIRUIORZURRWV6KULQNWRILW
)ORDWLQJER[HV,QWURGXFWLRQWRIORDWV7KHIORDWSURSHUW\5XOHVIRUSRVLWLRQLQJIORDWV7KHFOHDUSURSHUW\
2YHUIORZ7KHRYHUIORZRYHUIORZ[DQGRYHUIORZ\SURSHUWLHV7KHRYHUIORZVW\OHSURSHUW\7KHPDUTXHHSURSHUWLHV
7KHYLVLELOLW\SURSHUW\
5RWDWLQJER[HV
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
5RWDWLQJER[HV
6WDFNLQJFRQWH[WV
&RQIRUPDQFHDQGSURILOHV
$FNQRZOHGJPHQWV
5HIHUHQFHV
,QGH[
3URSHUW\LQGH[
'HSHQGHQFLHVRQRWKHUPRGXOHV7KLV&66PRGXOHGHSHQGVRQWKHIROORZLQJRWKHU&66PRGXOHV
&667H[W/D\RXW0RGXOH>&667(;7/$&666&669$/@GHILQLWLRQVRIYDOXHW\SHVQXPEHU!DQJOH!DQGOHQJWK!GHILQHVWKHWHUPVFRPSXWHGYDOXHDQGXVHGYDOXH&667H[W0RGXOH>&667(;7@LQOLQHOD\RXWDQGGHILQLWLRQRIOLQHER[&66*HQHUDWHGDQG5HSODFHG&RQWHQWPRGXOH>&66*(1&21@GHILQHVWKHWHUPVUHSODFHGHOHPHQWDQGLQWULQVLFVL]HDQGLQWULQVLFUDWLR&66%DFNJURXQGVDQG%RUGHUV0RGXOH>&66%*@GHILQHVEJSRVLWLRQ!
,QWURGXFWLRQ1RWH7KHPRGHOLQWKLVVSHFLILFDWLRQGLIIHUVIURPWKHPRGHOGHVFULEHGLQWKH&66OHYHOVSHFLILFDWLRQ>&66@EHFDXVHLWLVJHQHUDOL]HGWRDSSO\DOVRWRYHUWLFDOWH[WDQGLWDGGVSURSHUWLHVWRFRQWUROWKHPDUTXHHHIIHFWVSHHGGLUHFWLRQHWF7KHPDUTXHHHIIHFWLVDOORZHGEXW8$GHSHQGHQWLQOHYHO
&66DVVXPHVWKDWWKHGRFXPHQWWROD\RXWLVPRGHOHGDVDWUHHRIHOHPHQWV(DFKHOHPHQWKDVDQRUGHUHGOLVWRI]HURRUPRUHFKLOGHOHPHQWVZLWKDQRSWLRQDOVWULQJRIWH[WEHIRUHWKH
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
OLVWLQEHWZHHQWKHFKLOGUHQDQGDIWHUWKHOLVW7KHXQLTXHHOHPHQWWKDWKDVQRSDUHQWLVFDOOHGWKHURRWHOHPHQW
&66GHVFULEHVKRZHDFKHOHPHQWDQGHDFKVWULQJRIWH[WLVODLGRXWE\WUDQVIRUPLQJWKHGRFXPHQWWUHHLQWRDWUHHRIUHFWDQJXODUER[HVZKRVHVL]HDQGSRVLWLRQGHSHQGVRQWKHLUSURSHUWLHV7KHUHDUHEORFNOHYHOER[HVOLQHER[HVDQGLQOLQHOHYHOER[HV$EORFNOHYHOER[LVOLNHDSDUDJUDSK$OLQHER[LVOLNHDOLQHRIWH[W$QGLQOLQHOHYHOER[HVDUHOLNHZRUGVLQVLGHDOLQH
7KHSUHFLVHUXOHVDUHEHORZDQGLQRWKHUPRGXOHVEXWLQVXPPDU\DEORFNOHYHOER[FRQWDLQVHLWKHURWKHUEORFNOHYHOER[HVHJDVHFWLRQFRQWDLQLQJSDUDJUDSKVRUDWDEOHFRQWDLQLQJURZVRULWFRQWDLQVOLQHER[HVHJDSDUDJUDSKFRQWDLQLQJOLQHVRIWH[W$OLQHER[FRQWDLQVLQOLQHOHYHOER[HVHJDOLQHZLWKZRUGVLQGLIIHUHQWVW\OHV$QLQOLQHOHYHOER[PD\FRQWDLQHLWKHUWH[WLQWHUVSHUVHGZLWKPRUHLQOLQHOHYHOER[HVRULWPD\FRQWDLQDEORFNOHYHOER[HJDVPDOOWDEOHWKDWLVUHQGHUHGLQOLQH
)LJXUH5HODWLRQEHWZHHQIRXUGLVSOD\HGER[HVLQWKHUHQGHUHGGRFXPHQWRQWKHULJKWDQGWKHWKUHH
FRUUHVSRQGLQJHOHPHQWVLQWKHVRXUFHGRFXPHQWRQWKHOHIW
7KHWUHHRIER[HVFORVHO\PLUURUVWKHWUHHRIHOHPHQWV(DFKHOHPHQWLVWUDQVIRUPHGLQWR]HURRUPRUHER[HV,IWKHHOHPHQWLVQRWWKHURRWHOHPHQWWKHQHDFKRILWVER[HVLVHLWKHUDFKLOG
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
RIDER[RIWKHSDUHQWHOHPHQWRULWLVDFKLOGRIDER[RIWKHHOHPHQWLWVHOI,QRWKHUZRUGVWKHUHPD\EHPRUHRUIHZHUER[HVWKDQWKHUHDUHHOHPHQWVEXWHDFKER[EHORQJVWRH[DFWO\RQHHOHPHQW
3URSHUWLHVDUHVHWRQHOHPHQWVDQGLQIOXHQFHKRZWKHHOHPHQWLVWXUQHGLQWRER[HVEXWLQWKLVVSHFLILFDWLRQZHUHIHULQWHUFKDQJHDEO\WRWKH3SURSHUW\RIDQHOHPHQWDQGWKH3SURSHUW\RIDER[ERWKRIZKLFKDFWXDOO\PHDQWKHYDOXHRISURSHUW\3RIXQOHVVLWLVLPSRUWDQWWRGLVWLQJXLVKWKHER[DQGWKHHOHPHQWHJEHFDXVHWKHHOHPHQWKDVVHYHUDOER[HVDQGWKH\GRQWDOOKDYHWKHVDPHYDOXHIRUWKHSURSHUW\
)RUH[DPSOHDIUDJPHQWRI+70/VXFKDV
PD\UHVXOWLQRQHEORFNOHYHOER[IRUWKHHOHPHQWFRQWDLQLQJWZREORFNOHYHOER[HVIRUWKHWZRHOHPHQWVHDFKRIZKLFKKDVRQHOLQHER[LHRQHOLQHRIWH[W%RWKOLQHER[HVFRQWDLQWZRLQOLQHOHYHOER[HVRQHWKDWFRQWDLQVWKHOLVWEXOOHWDQGRQHWKDWFRQWDLQVWKHWH[W
1RWHKRZWKHLVWUDQVIRUPHGLQWRPXOWLSOHER[HVLQFOXGLQJRQHWKDWFRQWDLQVJHQHUDWHGFRQWHQWYL]WKHOLVWEXOOHWZKLFKLVQRWSUHVHQWLQWKHVRXUFHGRFXPHQW
,IWKHGRFXPHQWLVUHQGHUHGLQDQDUURZZLQGRZLWPD\EHWKDWWKHHOHPHQWVJHWWUDQVIRUPHGLQWRHYHQPRUHER[HVEHFDXVHWKHWH[WUHTXLUHVPXOWLSOHOLQHV$QGLIWKHGRFXPHQWLVUHQGHUHGRQSDSHULWPD\EHWKDWDSDJHEUHDNIDOOVLQWKHPLGGOHRIWKHHOHPHQWVRWKDWLWLVQRWWUDQVIRUPHGLQWRDVLQJOHEORFNOHYHOER[EXWLQWRWZRVPDOOHURQHVHDFKRQDGLIIHUHQWSDJH
([DPSOH,
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
)LJXUH7KHYDULRXVDUHDVDQGHGJHVRIDW\SLFDOER[
%R[HVKDYHSDGGLQJDERUGHUDQGPDUJLQVVHHWKHILJXUH'LIIHUHQWSURSHUWLHVGHWHUPLQHWKHWKLFNQHVVRIHDFKRIWKHVHZKLFKPD\EH]HUR
(DFKER[KDVDFRQWHQWDUHD7KHUHFWDQJOHWKDWERXQGVWKLVDUHDLVWKHFRQWHQWHGJH$URXQGWKHFRQWHQWDUHDLVWKHSDGGLQJDUHDDQGLWVRXWVLGHERXQGVDUHFDOOHGWKHSDGGLQJHGJH2XWVLGHWKHSDGGLQJLVWKHERUGHUDUHDDQGWKHRXWVLGHERXQGDU\RIWKDWDUHDLVWKHERUGHUHGJH)LQDOO\RXWVLGHWKHERUGHULVWKHPDUJLQDUHDDQGLWVRXWHUHGJHLVWKHPDUJLQHGJH
:KHQWKHVSHFLILFDWLRQVD\VWKDWWKHSDGGLQJRUERUGHULVDEVHQWRQVRPHVLGHRIWKHER[WKDWDFWXDOO\PHDQVWKDWLWVWKLFNQHVVLV]HUR
1RWHWKDWWKHPDUJLQXQOLNHWKHERUGHUDQGSDGGLQJPD\KDYHDQHJDWLYHWKLFNQHVV7KDWLVRQHZD\WRPDNHDGMDFHQWER[HVRYHUODSHDFKRWKHU
$ER[LVKRUL]RQWDOLILWVEORFNSURJUHVVLRQSURSHUW\LVWERWKHUZLVHLWLVYHUWLFDO
+RZWRUHDGWKLVVSHFLILFDWLRQ$OOVHFWLRQVDUHQRUPDWLYHXQOHVVVWDWHGRWKHUZLVH
1RWHVORRNOLNHWKLVDQGQRUPDOO\VWDUWZLWKWKHZRUG1RWH1RWHVDUHQRWQRUPDWLYH
(GLWRULDOQRWHVORRNOLNHWKLV7KH\ZLOOEHUHPRYHGEHIRUHWKHGRFXPHQWEHFRPHV&DQGLGDWH5HFRPPHQGDWLRQ
(DFKSURSHUW\LVGHILQHGLQSDUWLQWKHWH[WDQGLQSDUWE\DWDEOHWKDWJURXSVWRJHWKHUDQXPEHURIIDFWVDERXWWKH
([DPSOHVORRNOLNHWKLVDQGQRUPDOO\VWDUWZLWKWKHZRUG([DPSOH([DPSOHVDUHQRWQRUPDWLYH
([DPSOH,,
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
WDEOHWKDWJURXSVWRJHWKHUDQXPEHURIIDFWVDERXWWKHSURSHUW\LQFOXGLQJDUHJXODUH[SUHVVLRQWRUHVWULFWLWVV\QWD[6HH>ZKHUH"@IRUWKHPHDQLQJ7KH,QKHULWHGDQG,QLWLDOURZVLQWKHWDEOHDUHXVHGE\WKH&DVFDGLQJDQG,QKHULWDQFHPRGXOH>&66&$6&$'(@DQG0HGLDE\WKH0HGLD4XHULHVVSHFLILFDWLRQ>0(',$4@
7KHVSHFLILFDWLRQPD\UHIHUWRWKHXVHGYDOXHDQGWKHFRPSXWHGYDOXHRIDSURSHUW\8QOHVVVWDWHGH[SOLFLWO\WKHVKRUWIRUPYDOXHPHDQVWKHFRPSXWHGYDOXH
7\SHVRIER[HV
7KHGLVSOD\SURSHUW\
1DPH GLVSOD\9DOXH LQOLQH_EORFN_LQOLQHEORFN_OLVWLWHP_UXQ
LQ_FRPSDFW_WDEOH_LQOLQHWDEOH_WDEOHURZJURXS_WDEOHKHDGHUJURXS_WDEOHIRRWHUJURXS_WDEOHURZ_WDEOHFROXPQJURXS_WDEOHFROXPQ_WDEOHFHOO_WDEOHFDSWLRQ_UXE\_UXE\EDVH_UXE\WH[W_UXE\EDVHJURXS_UXE\WH[WJURXS_WHPSODWH!_QRQH
,QLWLDO LQOLQH$SSOLHVWR DOOHOHPHQWV,QKHULWHG QR3HUFHQWDJHV 1$0HGLD YLVXDOQRQHDSSOLHVWRDOOPHGLD&RPSXWHGYDOXH VSHFLILHGYDOXHH[FHSWIRUIORDWVURRW
HOHPHQWVDQGSRVLWLRQHGHOHPHQWVVHHWH[W
7KLVSURSHUW\LQFRPELQDWLRQZLWKIORDWDQGSRVLWLRQGHWHUPLQHVWKHW\SHRIER[RUER[HVWKDWDUHJHQHUDWHGIRUDQHOHPHQW7KHYDOXHVDUHDVIROORZV
inline,QOLQHER[HV
block%ORFNER[HV
inlineblock$EORFNER[ZKLFKLWVHOILVIORZHGDVDVLQJOHLQOLQHER[VLPLODUWRDUHSODFHGHOHPHQW7KHLQVLGHRIDQLQOLQHEORFN
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
VLPLODUWRDUHSODFHGHOHPHQW7KHLQVLGHRIDQLQOLQHEORFNLVIRUPDWWHGDVDEORFNER[DQGWKHER[LWVHOILVIRUPDWWHGDVDQLQOLQHER[
listitem2QHRUPRUHEORFNER[HVDQGRQHPDUNHUER[0DUNHUER[HVDUHGHILQHGLQWKH/LVWVPRGXOH>&66/,67@,IWKH/LVWVPRGXOHLVQRWUHDG\GHILQHWKHSRVLWLRQRIWKHPDUNHUDQGWKHOLVWVW\OHSURSHUW\KHUH"2UUHIHUWR&66LQVWHDG"
runin(LWKHUEORFNRULQOLQHER[HVGHSHQGLQJRQFRQWH[WVHH5XQLQER[HV3URSHUWLHVDSSO\WRUXQLQER[HVEDVHGRQWKHLUILQDOVWDWXVLQOLQHOHYHORUEORFNOHYHO
compact(LWKHUEORFNER[HVRUDPDUNHUER[GHSHQGLQJRQFRQWH[WVHH&RPSDFWER[HV3URSHUWLHVDSSO\WRFRPSDFWER[HVEDVHGRQWKHLUILQDOVWDWXV
tableinlinetabletablerowgrouptableheadergrouptablefootergrouptablerowtablecolumngrouptablecolumntablecelltablecaption
6HHWKH7DEOHVPRGXOH>&667%/@rubyrubybaserubytextrubybasegrouprubytextgroup
6HHWKH5XE\PRGXOH>&6658%&66/$
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
LQOLQHUXQLQWDEOHURZJURXSWDEOHFROXPQWDEOHFROXPQJURXSWDEOHKHDGHUJURXSWDEOHIRRWHUJURXSWDEOHURZWDEOHFHOOWDEOHFDSWLRQLQOLQHEORFN
EORFN
RWKHUV VDPHDVVSHFLILHG
7KHYDOXHRISRVLWLRQPD\DOVRLQIOXHQFHWKHFRPSXWHGYDOXH6HH>&667%/@,QIDFWWKHFRPSOHWHUXOHVDUH
,IGLVSOD\LVQRQHWKHQIORDWDQGSRVLWLRQGRQRWDSSO\ 2WKHUZLVHLISRVLWLRQLVQHLWKHUVWDWLFQRUUHODWLYHWKHQ
GLVSOD\LVVHWDFFRUGLQJWRWKHWDEOHDERYH$QGIORDWGRHVQRWDSSO\
2WKHUZLVHLIIORDWLVQRWQRQHWKHQGLVSOD\LVVHWDFFRUGLQJWRWKHWDEOHDERYH
2WKHUZLVHLIWKHHOHPHQWLVWKHURRWHOHPHQWWKHQGLVSOD\LVVHWDFFRUGLQJWRWKHWDEOHDERYH
2WKHUZLVHWKHFRPSXWHGYDOXHRIGLVSOD\LVWKHVDPHDVWKHVSHFLILHGYDOXH
%ORFNOHYHOER[HVFRQWDLQLQJEORFNVIORZVDQGDQRQ\PRXVER[HV
$EORFNOHYHOER[LVDER[WKDWKDVDXVHGYDOXHIRUGLVSOD\RIEORFNOLVWLWHPWDEOHWDEOHLHDOOWDEOHER[HVRUWHPSODWH!$EORFNOHYHOHOHPHQWLVDQHOHPHQWDOORIZKRVHWRSOHYHOQRQDQRQ\PRXVER[HVDUHEORFNOHYHO
$QLQOLQHOHYHOER[LVDER[WKDWKDVDXVHGYDOXHIRUGLVSOD\RILQOLQHLQOLQHEORFNLQOLQHWDEOHRUUXE\>:KDWDERXWWKHRWKHUUXE\YDOXHV"@
$QDQRQ\PRXVER[LQIRUPDOO\LVDER[WKDWFDQQRWEHDGGUHVVHGZLWK&66VHOHFWRUV$OOLWVSURSHUWLHVH[FHSWIRUGLVSOD\KDYHWKHLUGHIDXOWYDOXHVHLWKHUWKHLQLWLDOYDOXHRULQKHULWHG$QRQ\PRXVER[HVDUHFUHDWHGZKHQWKH&66ER[PRGHOUHTXLUHVDFKLOGER[ZLWKDFHUWDLQYDOXHIRUGLVSOD\EXWWKHFKLOGDFWXDOO\KDVDGLIIHUHQWYDOXH,QWKDWFDVHDQDQRQ\PRXVER[RIWKHULJKWNLQGLVFUHDWHGDQGZUDSVWKHFKLOGRUFKLOGUHQ2WKHUPRGXOHVHJ>&667%/@>&667(;7@PD\DOVRGHILQHDQRQ\PRXVER[HV7KHDQRQ\PRXVER[HVGHILQHGE\WKLVPRGXOHDUHWKHIROORZLQJ
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
$EORFNOHYHOER[PD\FRQWDLQHLWKHUOLQHER[HVRUEORFNOHYHOER[HVEXWQRWERWK,IQHFHVVDU\DQ\OLQHER[HVWKDWEHORQJWRWKLVER[VHOHPHQWDUHZUDSSHGLQRQHRUPRUHDVIHZDVSRVVLEOHDQRQ\PRXVER[HVZLWKDGLVSOD\RIEORFN
$QH[DPSOHRIWKHODVWSRLQWDERYHLVWKLVGRFXPHQWIUDJPHQW
ZLWKWKHVHVW\OHUXOHV
7KHHOHPHQWKDVERWKOLQHER[HVDQGDFKLOGER[IRUWKHHOHPHQWZKLFKLVDEORFNOHYHOHOHPHQW7KHOLQHER[HVEHIRUHWKHDUHZUDSSHGLQDQDQRQ\PRXVEORFNOHYHOER[DQGVRDUHWKHOLQHER[HVDIWHUWKH7KHUHVXOWLQJWUHHRIER[HVPLJKWEHDVIROORZVUHIHUWRWKHILJXUH
EORFNOHYHOER[>S@EORFNOHYHOER[>DQRQ\PRXV@
OLQHER[6RPHERG\OLQHER[IRUJRWWHQ
EORFNOHYHOER[>T@OLQHER[DER[
EORFNOHYHOER[>DQRQ\PRXV@OLQHER[DQGKH
([DPSOH,,,
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
1RWHWKDWWKHDQRQ\PRXVER[HVGHILQHGLQWKLVPRGXOHDUHDOOEORFNOHYHOEXWDQRQ\PRXVER[HVGHILQHGLQRWKHUPRGXOHVPD\EHGLIIHUHQW
7KHFRQWDLQLQJEORFNRIDER[LVDUHFWDQJOHWKDWLVDVVRFLDWHGZLWKWKHER[DQGWKDWLVXVHGLQYDULRXVGHILQLWLRQVLQWKLVVSHFLILFDWLRQ$SDUWIURPDVL]HDQGDSRVLWLRQWKHUHFWDQJOHDOVRKDVGLUHFWLRQDQGEORFNSURJUHVVLRQSURSHUWLHV7KHFRQWDLQLQJEORFNRIDER[LVGHILQHGDVIROORZV
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
1RWHWKDWWKHDERYHLVPRGLILHGE\WKH$EVROXWH3RVLWLRQLQJPRGXOH>&66326@LQSDUWLFXODULIDER[VSRVLWLRQSURSHUW\LVQHLWKHUVWDWLFQRUUHODWLYHLWVFRQWDLQLQJEORFNLVHVWDEOLVKHGGLIIHUHQWO\
$IORZURRWLVDER[WKDWVDWLVILHVDWOHDVWRQHRIWKHIROORZLQJ
7KHYDOXHRIIORDWLVQRWQRQH7KHXVHGYDOXHRIRYHUIORZLVQRWYLVLEOH7KHYDOXHRIGLVSOD\LVWDEOHFHOOWDEOHFDSWLRQVHH>&667%/@LQOLQHEORFNRULQOLQHWDEOH7KHYDOXHRISRVLWLRQLVQHLWKHUVWDWLFQRUUHODWLYHVHH>&66326@7KHYDOXHRIEORFNSURJUHVVLRQLVOURUUODQGWKHYDOXH
)LJXUH:KHQWKHIUDJPHQWLVUHQGHUHGWKHWH[WEHIRUHWKHTLVZUDSSHGLQDQDQRQ\PRXVEORFNDQGWKHWH[WDIWHU
WKHTLQDQRWKHU
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
7KHYDOXHRIEORFNSURJUHVVLRQLVOURUUODQGWKHYDOXHRIEORFNSURJUHVVLRQRILWVSDUHQWER[LVWE7KHYDOXHRIEORFNSURJUHVVLRQLVWEDQGWKHYDOXHRIEORFNSURJUHVVLRQRILWVSDUHQWER[LVOURUUO
1RWHWKDWDQHOHPHQWZLWKGLVSOD\LQOLQHWKHUHIRUHFDQQRWEHDIORZURRWLWGRHVQWIORDWRWKHUZLVHLWVGLVSOD\ZRXOGEHEORFNDQGQHLWKHURYHUIORZQRUEORFNSURJUHVVLRQDSSO\WRLQOLQHV
7KHWHUPLQRORJ\LQWKH&66OHYHOVSHFLILFDWLRQLVGLIIHUHQW$IORZURRWLVFDOOHGDQHOHPHQWWKDWHVWDEOLVKHVDQHZIRUPDWWLQJFRQWH[W
2WKHUPRGXOHVPD\GHILQHDGGLWLRQDOIORZURRWV>&DQZHWKXVUHPRYHWDEOHFDSWLRQWDEOHFHOODQGSRVLWLRQIURPWKHOLVWDERYH"@
7KHIORZDNDQRUPDOIORZRIDJLYHQIORZURRWLVDVHWRIER[HV$ER[EHORQJVWRWKHIORZLI
7KHXVHGYDOXHRILWVGLVSOD\LVEORFNOLVWLWHPWDEOHRUWHPSODWH!
7KHXVHGYDOXHRILWVIORDWLVQRQH 7KHXVHGYDOXHRILWVSRVLWLRQLVVWDWLFRUUHODWLYH ,WLVHLWKHUDFKLOGRIWKHIORZURRWRUDFKLOGRIDER[WKDW
EHORQJWRWKHIORZ
)RUH[DPSOHWKHIUDJPHQW
ZLWKWKHVW\OH
GHILQHVWZRIORZV
7KHLVDIORZURRWEHFDXVHLWIORDWV,WVIORZFRQVLVWRIWKHVWQGDQGWKDQGWKH
7KHLVYHUWLFDOZKLOHLWVSDUHQWLVKRUL]RQWDODQGLWLVWKXVDIORZURRW,WVIORZLVIRUPHGE\WKHUG
7KHLWVHOIEHORQJVWRDWKLUGIORZEXWLWVIORZURRWLVQRW
([DPSOH,9
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
1RWHWKDWDIORZURRWLVQRWQHFHVVDULO\EORFNOHYHOLWPD\EHDQLQOLQHEORFNHJ
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
>'HILQHYLHZSRUWDQGFDQYDV@
5XQLQER[HV
$UXQLQER[EHKDYHVDVIROORZV
,IWKHUXQLQER[FRQWDLQVDEORFNER[WKHUXQLQER[EHFRPHVDEORFNER[
,IDVLEOLQJEORFNER[WKDWGRHVQRWIORDWDQGLVQRWDEVROXWHO\SRVLWLRQHGIROORZVWKHUXQLQER[WKHUXQLQER[EHFRPHVWKHILUVWLQOLQHER[RIWKHEORFNER[$UXQLQFDQQRWUXQLQWRDEORFNWKDWDOUHDG\VWDUWVZLWKDUXQLQRUWKDWLWVHOILVDUXQLQ
2WKHUZLVHWKHUXQLQER[EHFRPHVDEORFNER[
7KH LWVHOIEHORQJVWRDWKLUGIORZEXWLWVIORZURRWLVQRWVKRZQLQWKHIUDJPHQW
$UXQLQER[LVXVHIXOIRUUXQLQKHDGHUVDVLQWKLVH[DPSOH
([DPSOH9
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
'HVSLWHDSSHDULQJYLVXDOO\DVSDUWRIWKHIROORZLQJEORFNER[DUXQLQHOHPHQWVWLOOLQKHULWVSURSHUWLHVIURPLWVSDUHQWLQWKHVRXUFHWUHH3OHDVHFRQVXOWWKHVHFWLRQRQJHQHUDWHGFRQWHQWIRULQIRUPDWLRQDERXWKRZUXQLQER[HVLQWHUDFWZLWKJHQHUDWHGFRQWHQW>ZKHUH"@
&RPSDFWER[HV
'HILQHKHUHRULQH[WHQGHGER[PRGXOH"
7KHSDGGLQJSURSHUWLHV1DPH SDGGLQJ9DOXH >OHQJWK!_SHUFHQWDJH!@^`,QLWLDO VHHLQGLYLGXDOSURSHUWLHV$SSOLHVWR DOOHOHPHQWV,QKHULWHG QR3HUFHQWDJHV ZLGWKRIFRQWDLQLQJEORFN0HGLD YLVXDO&RPSXWHGYDOXH VHHLQGLYLGXDOSURSHUWLHV
LIWKHFRQWDLQLQJEORFNLVKRUL]RQWDORWKHUZLVHWKHKHLJKW
1DPH SDGGLQJWRSSDGGLQJULJKWSDGGLQJERWWRPSDGGLQJOHIW
9DOXH >OHQJWK!_SHUFHQWDJH!@,QLWLDO $SSOLHVWR DOOHOHPHQWV,QKHULWHG QR3HUFHQWDJHV ZLGWKRIFRQWDLQLQJEORFN0HGLD YLVXDO&RPSXWHGYDOXH OHQJWK!
LIWKHFRQWDLQLQJEORFNLVKRUL]RQWDORWKHUZLVHWKHKHLJKW
6HWVWKHWKLFNQHVVRIWKHSDGGLQJDUHD7KHYDOXHPD\QRWEHQHJDWLYH
7KLVH[DPSOHPLJKWEHIRUPDWWHGDV
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
3DGGLQJLVDVKRUWKDQGIRUWKHRWKHUIRXUSURSHUWLHV,ISDGGLQJKDVIRXUYDOXHVWKH\DUHIRUWRSULJKWERWWRPDQGOHIWLQWKDWRUGHU,IOHIWLVRPLWWHGLWLVWKHVDPHDVULJKW,IERWWRPLVRPLWWHGLWLVWKHVDPHDVWRSLIULJKWLVRPLWWHGLWLVWKHVDPHDVWRS
1RWHWKDWSHUFHQWDJHVRQSDGGLQJWRSDQGSDGGLQJERWWRPDUHUHODWLYHWRWKHZLGWKRIWKHFRQWDLQLQJEORFNQRWWKHKHLJKWDWOHDVWLQDKRUL]RQWDOIORZLQDYHUWLFDOIORZWKH\DUHUHODWLYHWRWKHKHLJKW
1RWHWKDWSHUFHQWDJHVDUHQRWUHTXLUHGIRU&66OHYHO
0DUJLQV
7KHPDUJLQSURSHUWLHV
1DPH PDUJLQWRSPDUJLQULJKWPDUJLQERWWRPPDUJLQOHIW
9DOXH OHQJWK!_SHUFHQWDJH!_DXWR,QLWLDO $SSOLHVWR VHHWH[W,QKHULWHG QR3HUFHQWDJHV ZLGWKRIFRQWDLQLQJEORFN0HGLD YLVXDO&RPSXWHGYDOXH WKHSHUFHQWDJHDVVSHFLILHGRUWKH
DEVROXWHOHQJWKRUDXWR
LIWKHFRQWDLQLQJEORFNLVKRUL]RQWDORWKHUZLVHWKHKHLJKW
1DPH PDUJLQ9DOXH >OHQJWK!_SHUFHQWDJH!_DXWR@^`,QLWLDO VHHLQGLYLGXDOSURSHUWLHV$SSOLHVWR VHHWH[W,QKHULWHG QR3HUFHQWDJHV ZLGWKRIFRQWDLQLQJEORFN
)RUH[DPSOHWKHIROORZLQJWZRZD\VWRVHWWKHSDGGLQJRIDUHHTXLYDOHQW
([DPSOH9,
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
3HUFHQWDJHV ZLGWKRIFRQWDLQLQJEORFN0HGLD YLVXDO&RPSXWHGYDOXH VHHLQGLYLGXDOSURSHUWLHV
LIWKHFRQWDLQLQJEORFNLVKRUL]RQWDORWKHUZLVHWKHKHLJKW
7KHVHSURSHUWLHVVHWWKHWKLFNQHVVRIWKHPDUJLQDUHD7KHYDOXHPD\EHQHJDWLYH
0DUJLQLVDVKRUWKDQGIRUWKHRWKHUIRXU,IPDUJLQKDVIRXUYDOXHVWKH\VHWWRSULJKWERWWRPDQGOHIWLQWKDWRUGHU,IOHIWLVRPLWWHGLWLVWKHVDPHDVULJKW,IERWWRPLVRPLWWHGLWLVWKHVDPHDVWRS,IULJKWLVRPLWWHGLWLVWKHVDPHDVWRS
7KHSURSHUWLHVDSSO\WRDOOER[HVH[FHSWFHUWDLQWDEOHER[HVVHH>&667%/@DQGFHUWDLQLQOLQHOHYHOER[HVVHH>&667(;7@
0DUJLQVPXVWVDWLVI\FHUWDLQFRQVWUDLQWVZKLFKPHDQVWKDWWKHXVHGYDOXHPD\EHGLIIHUHQWIURPWKHFRPSXWHGYDOXH6HH&DOFXODWLQJZLGWKVKHLJKWVDQGPDUJLQV
1RWHWKDWLQDKRUL]RQWDOIORZSHUFHQWDJHVRQPDUJLQWRSDQGPDUJLQERWWRPDUHUHODWLYHWRWKHZLGWKRIWKHFRQWDLQLQJEORFNQRWWKHKHLJKWDQGLQYHUWLFDOIORZPDUJLQOHIWDQGPDUJLQULJKWDUHUHODWLYHWRWKHKHLJKWQRWWKHZLGWK
&ROODSVLQJPDUJLQV
&HUWDLQDGMRLQLQJPDUJLQVFRPELQHWRIRUPDVLQJOHPDUJLQ7KRVHPDUJLQVDUHVDLGWRFROODSVH0DUJLQVDUHDGMRLQLQJLIWKHUHDUHQRQRQHPSW\FRQWHQWSDGGLQJRUERUGHUDUHDVRUFOHDUDQFHWRVHSDUDWHWKHP
)RUH[DPSOHWKHIROORZLQJWZRZD\VRIVHWWLQJWKHPDUJLQVRIDUHHTXLYDOHQW
([DPSOH9,,
)RUH[DPSOHLQWKHIROORZLQJIUDJPHQWZLWKWKHJLYHQVW\OHUXOHV
([DPSOH9,,,
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
,IDVHWRIDGMRLQLQJPDUJLQVFROODSVHVWKHQWKHZLGWKRIWKHUHVXOWLQJPDUJLQLV01ZKHUH0LVWKHPD[LPXPRIWKHDGMRLQLQJPDUJLQVWKDWDUHSRVLWLYHRU]HURLIWKHUHDUHQRQHDQG1LVWKHPLQLPXPRIWKHDGMRLQLQJPDUJLQVWKDWDUHQHJDWLYHRU]HURLIWKHUHDUHQRQH
:HFDOODQHOHPHQWRUER[FROODSVHGWKURXJKLIWZRRILWVPDUJLQVFROODSVHZLWKHDFKRWKHU
WKHERWWRPPDUJLQRIWKHILUVW HPWKHWRSPDUJLQRIWKH HPDQGWKHWRSPDUJLQRIWKHVHFRQG HPFROODSVH7KHUHVXOWLVDVLQJOHPDUJLQRIHPWKHPD[LPXPRIWKHWKUHHEHWZHHQWKHERWWRPRIWKHILUVWDQGWKHWRSRIWKHVHFRQG
>DGGLPDJH@
,QWKHIROORZLQJIUDJPHQW
WKHERWWRPPDUJLQRIWKHILUVWDQGWKHWRSPDUJLQRIWKHFROODSVHEXWWKHWRSPDUJLQRIWKHVHFRQGGRHVQRWFROODSVHZLWKWKHPEHFDXVHLWLVQRWDGMRLQLQJWKHERUGHURIWKHVHSDUDWHVWKHP
>DGGLPDJH@
([DPSOH,;
7KHPRVWFRPPRQXVHRIFROODSVLQJWKURXJKHOHPHQWVLVWKDWHPSW\SDUDJUDSKVGRQWFDXVHH[WUDZKLWHVSDFH
7KHUHLVHTXDOVSDFHEHWZHHQWKHILUVWDQGVHFRQG
([DPSOH;
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
7KHIROORZLQJWZRVHWVRIUXOHVGHWHUPLQHZKLFKPDUJLQVFROODSVH
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
([FHSWZKHQIRUELGGHQE\WKHOLVWDERYHWKHIROORZLQJPDUJLQVFROODSVH
,IDPDUJLQ3FROODSVHVZLWKDPDUJLQ4DQGPDUJLQ4ZLWKDPDUJLQ5WKHQ34DQG5FROODSVHWRJHWKHU&ROODSVLQJLVWUDQVLWLYH
7KHWRSPDUJLQRIDER[$FROODSVHVZLWKWKHWRSPDUJLQRILWVSDUHQWER[%LIWKHPDUJLQVDUHDGMRLQLQJDQG%LVWE
1RWHWKDW$LWVHOIPD\EHYHUWLFDOER[
7KHERWWRPPDUJLQRIDER[$FROODSVHVZLWKWKHERWWRPPDUJLQRILWVSDUHQWER[%LIWKHPDUJLQVDUHDGMRLQLQJDQG%LVWE
7KHOHIWPDUJLQRIDER[$FROODSVHVZLWKWKHOHIWPDUJLQRILWVSDUHQWER[%LIWKHPDUJLQVDUHDGMRLQLQJDQG%LVUORUOU
7KHULJKWPDUJLQRIDER[$FROODSVHVZLWKWKHULJKWPDUJLQRILWVSDUHQWER[%LIWKHPDUJLQVDUHDGMRLQLQJDQG%LVUORUOU
SDUDJUDSKVDVEHWZHHQWKHVHFRQGDQGODVW
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
7KHWRSPDUJLQRIDER[$FROODSVHVZLWKWKHERWWRPPDUJLQRIDVLEOLQJER[%LIWKHPDUJLQVDUHDGMRLQLQJDQGWKHLUSDUHQWLVWE
$ULJKWPDUJLQRIDER[$FROODSVHVZLWKWKHOHIWPDUJLQRIDVLEOLQJER[%LIWKHPDUJLQVDUHDGMRLQLQJDQGWKHLUSDUHQWLVUORUOU
7KHWRSDQGERWWRPPDUJLQVRIDER[$FROODSVHLIWKHPDUJLQVDUHDGMRLQLQJDQGWKHER[LVWE7KHER[LVFROODSVHGWKURXJK
,QWKLVFDVHWKHSRVLWLRQRIWKHHOHPHQWGHSHQGVRQLWVUHODWLRQVKLSZLWKWKHRWKHUHOHPHQWVZKRVHPDUJLQVDUHEHLQJFROODSVHG
,IWKHER[$VPDUJLQVDUHFROODSVHGZLWKLWVSDUHQWVWRSPDUJLQWKHWRSERUGHUHGJHRI$LVGHILQHGWREHWKHVDPHDVWKHSDUHQWV2WKHUZLVHHLWKHUWKHSDUHQWLVQRWWDNLQJSDUWLQWKHPDUJLQFROODSVLQJRURQO\WKHSDUHQWVERWWRPPDUJLQLVLQYROYHG7KHSRVLWLRQRI$VWRSERUGHUHGJHLVWKHVDPHDVLWZRXOGKDYHEHHQLI$KDGDQRQ]HURWRSERUGHU
1RWHWKDWWKHSRVLWLRQVRIHOHPHQWVWKDWKDYHEHHQFROODSVHGWKURXJKKDYHQRHIIHFWRQWKHSRVLWLRQVRIWKHRWKHUHOHPHQWVZLWKZKRVHPDUJLQVWKH\DUHEHLQJFROODSVHGWKHWRSERUGHUHGJHSRVLWLRQLVRQO\UHTXLUHGIRUOD\LQJRXWGHVFHQGDQWVRIWKHVHHOHPHQWV
7KHOHIWDQGULJKWPDUJLQVRIDER[$FROODSVHFROODSVHWKURXJKLIWKHPDUJLQVDUHDGMRLQLQJDQGWKHER[LVUORUOU
,QWKLVFDVHWKHSRVLWLRQRIWKHHOHPHQWGHSHQGVRQLWVUHODWLRQVKLSZLWKWKHRWKHUHOHPHQWVZKRVHPDUJLQVDUHEHLQJFROODSVHG
,I$VSDUHQWLVUO,I$VPDUJLQVDUHFROODSVHGZLWKLWVSDUHQWVULJKWPDUJLQWKHULJKWERUGHUHGJHRI$LVGHILQHGWREHWKHVDPHDVWKHSDUHQWV2WKHUZLVHLHHLWKHUWKHHOHPHQWVSDUHQWLVQRWWDNLQJSDUWLQWKHPDUJLQFROODSVLQJRURQO\WKHSDUHQWVOHIWPDUJLQLVLQYROYHGWKHSRVLWLRQRI$VULJKWERUGHUHGJHLVWKHVDPHDVLWZRXOGKDYHEHHQLI$KDGDQRQ]HURWRSERUGHU
,I$VSDUHQWLVOU
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
,I$VPDUJLQVDUHFROODSVHGZLWKLWVSDUHQWVOHIWPDUJLQWKHOHIWERUGHUHGJHRI$LVGHILQHGWREHWKHVDPHDVWKHSDUHQWV2WKHUZLVHLHHLWKHUWKHHOHPHQWVSDUHQWLVQRWWDNLQJSDUWLQWKHPDUJLQFROODSVLQJRURQO\WKHSDUHQWVULJKWPDUJLQLVLQYROYHGWKHSRVLWLRQRI$VOHIWERUGHUHGJHLVWKHVDPHDVLWZRXOGKDYHEHHQLI$KDGDQRQ]HUROHIWERUGHU
,QDKRUL]RQWDOIORZWKHERWWRPPDUJLQRIDQLQIORZEORFNOHYHOHOHPHQWLVDOZD\VDGMRLQLQJWRWKHWRSPDUJLQRILWVQH[WLQIORZEORFNOHYHOVLEOLQJXQOHVVWKDWVLEOLQJKDVFOHDUDQFH
7KHWRSPDUJLQRIDQLQIORZEORFNOHYHOHOHPHQWLVDGMRLQLQJWRLWVILUVWLQIORZEORFNOHYHOFKLOGVWRSPDUJLQLIWKHHOHPHQWKDVQRWRSERUGHUQRWRSSDGGLQJDQGWKHFKLOGKDVQRFOHDUDQFH
7KHERWWRPPDUJLQRIDQLQIORZEORFNOHYHOHOHPHQWZLWKDKHLJKWRIDXWRDQGPLQKHLJKWOHVVWKDQWKHHOHPHQWVXVHGKHLJKWDQGPD[KHLJKWJUHDWHUWKDQWKHHOHPHQWVXVHGKHLJKWLVDGMRLQLQJWRLWVODVWLQIORZEORFNOHYHOFKLOGVERWWRPPDUJLQLIWKHHOHPHQWKDVQRERWWRPSDGGLQJRUERUGHU
$QHOHPHQWVRZQPDUJLQVDUHDGMRLQLQJLIWKHPLQKHLJKWSURSHUW\LV]HURDQGLWKDVQHLWKHUYHUWLFDOERUGHUVQRUYHUWLFDOSDGGLQJDQGLWKDVDKHLJKWRIHLWKHURUDXWRDQGLWGRHVQRWFRQWDLQDOLQHER[DQGDOORILWVLQIORZFKLOGUHQVPDUJLQVLIDQ\DUHDGMRLQLQJ
([DPSOH;,
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
&ROODSVLQJLVEDVHGRQWKHXVHGYDOXHRISDGGLQJPDUJLQDQGERUGHULHDIWHUUHVROYLQJDQ\SHUFHQWDJHV7KHFROODSVHGPDUJLQLVFDOFXODWHGRYHUWKHXVHGYDOXHRIWKHYDULRXVPDUJLQV
7KHZLGWKDQGKHLJKWSURSHUWLHV1DPH ZLGWK9DOXH OHQJWK!_SHUFHQWDJH!_DXWR,QLWLDO DXWR$SSOLHVWR DOOHOHPHQWVEXWQRQUHSODFHGLQOLQH
HOHPHQWVWDEOHURZVDQGURZJURXSV,QKHULWHG QR3HUFHQWDJHV UHIHUWRZLGWKRIFRQWDLQLQJEORFN0HGLD YLVXDO&RPSXWHGYDOXH WKHSHUFHQWDJHRUDXWRDVVSHFLILHGRU
FKLOGUHQVPDUJLQVLIDQ\DUHDGMRLQLQJ
:KHQDQHOHPHQWVRZQPDUJLQVFROODSVHDQGWKDWHOHPHQWKDVKDGFOHDUDQFHDSSOLHGWRLWLWVWRSPDUJLQFROODSVHVZLWKWKHDGMRLQLQJPDUJLQVRIVXEVHTXHQWVLEOLQJVEXWWKDWUHVXOWLQJPDUJLQGRHVQRWFROODSVHZLWKWKHERWWRPPDUJLQRIWKHSDUHQWEORFN
7KHWRSDQGERWWRPPDUJLQVRIWKHWZRHPSW\3VFROODSVHDOOWRJHWKHU%XWWKH\FDQWFROODSVHZLWKWKHERWWRPRIWKH',9EHFDXVHRQHRIWKHWZRHPSW\3VKDVFOHDUDQFH
&KHFNWKLV7KLVLVSUREDEO\WKHRQO\SRVVLEOHLQWHUSUHWDWLRQRIWKHUXOHVEXWLWLVFHUWDLQO\QRWREYLRXVWKDWWKHFOHDUDQFHRIRQHHOHPHQWPD\VWRSODWHUHOHPHQWVIURPFROODSVLQJ
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
&RPSXWHGYDOXH WKHSHUFHQWDJHRUDXWRDVVSHFLILHGRUWKHDEVROXWHOHQJWKDXWRLIWKHSURSHUW\GRHVQRWDSSO\
1DPH KHLJKW9DOXH OHQJWK!_SHUFHQWDJH!_DXWR,QLWLDO DXWR$SSOLHVWR DOOHOHPHQWVEXWQRQUHSODFHGLQOLQH
HOHPHQWVWDEOHFROXPQVDQGFROXPQJURXSV
,QKHULWHG QR3HUFHQWDJHV VHHSURVH0HGLD YLVXDO&RPSXWHGYDOXH WKHSHUFHQWDJHRUDXWRVHHSURVHXQGHU
SHUFHQWDJH!RUWKHDEVROXWHOHQJWKDXWRLIWKHSURSHUW\GRHVQRWDSSO\
7KHVHSURSHUWLHVVSHFLI\WKHZLGWKDQGKHLJKWRIWKHFRQWHQWDUHDSDGGLQJDUHDRUERUGHUDUHDGHSHQGLQJRQER[VL]LQJRIFHUWDLQER[HV
9DOXHVKDYHWKHIROORZLQJPHDQLQJV
OHQJWK!6SHFLILHVWKHZLGWKRIWKHFRQWHQWDUHDXVLQJDOHQJWKXQLW
SHUFHQWDJH!6SHFLILHVDSHUFHQWDJHZLGWK7KHSHUFHQWDJHLVFDOFXODWHGZLWKUHVSHFWWRWKHZLGWKRIWKHJHQHUDWHGER[VFRQWDLQLQJEORFN,IWKHFRQWDLQLQJEORFNVZLGWKGHSHQGVRQWKLVHOHPHQWVZLGWKWKHQWKHUHVXOWLQJOD\RXWLVXQGHILQHGLQ&66
DXWR7KHZLGWKGHSHQGVRQWKHYDOXHVRIRWKHUSURSHUWLHV6HHWKHVHFWLRQVEHORZ
'RZHZDQWWRGHILQHXQNQRZQSHUFHQWDJHVLQ&66"6RPHWKLQJVLPSOHVXFKDVDXWRRUVRPHWKLQJPRUHIDQF\VXFKDVWU\LQJWRVROYHSHUFHQWDJHV"
1HJDWLYHYDOXHVDUHLOOHJDO
)RUH[DPSOHWKHIROORZLQJUXOHIL[HVWKHFRQWHQWZLGWKRISDUDJUDSKVDWS[
([DPSOH;,,
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
7KHPLQZLGWKPD[ZLGWKPLQKHLJKWDQGPD[KHLJKWSURSHUWLHV1DPH PLQZLGWKPLQKHLJKW9DOXH OHQJWK!_SHUFHQWDJH!_LQKHULW,QLWLDO $SSOLHVWR DOOHOHPHQWVEXWQRQUHSODFHGLQOLQH
HOHPHQWVWDEOHURZVDQGURZJURXSV,QKHULWHG QR3HUFHQWDJHV UHIHUWRZLGWKUHVSKHLJKWRIFRQWDLQLQJ
EORFN0HGLD YLVXDO&RPSXWHGYDOXH WKHSHUFHQWDJHDVVSHFLILHGRUWKH
DEVROXWHOHQJWK
1DPH PD[ZLGWKPD[KHLJKW9DOXH OHQJWK!_SHUFHQWDJH!_QRQH,QLWLDO QRQH$SSOLHVWR DOOHOHPHQWVEXWQRQUHSODFHGLQOLQH
HOHPHQWVWDEOHURZVDQGURZJURXSV,QKHULWHG QR3HUFHQWDJHV UHIHUWRZLGWKUHVSKHLJKWRIFRQWDLQLQJ
EORFN0HGLD YLVXDO&RPSXWHGYDOXH WKHSHUFHQWDJHDVVSHFLILHGRUWKH
DEVROXWHOHQJWKRUQRQH
7KHVHSURSHUWLHVDOORZDXWKRUVWRFRQVWUDLQFRQWHQWZLGWKVDQGKHLJKWVWRDFHUWDLQUDQJH9DOXHVKDYHWKHIROORZLQJPHDQLQJV
OHQJWK!6SHFLILHVDIL[HGPLQLPXPRUPD[LPXPIRUZLGWKRUKHLJKW
SHUFHQWDJH!6SHFLILHVDPLQLPXPRUPD[LPXPIRUZLGWKRUKHLJKWDVDSHUFHQWDJHRIWKHFRUUHVSRQGLQJGLPHQVLRQRIWKHFRQWDLQLQJEORFN,IWKDWFRQWDLQLQJEORFNVGLPHQVLRQLVQHJDWLYHWKHXVHGYDOXHLV]HUR,IWKDWFRQWDLQLQJEORFNVGLPHQVLRQGHSHQGVRQWKLVHOHPHQWVGLPHQVLRQWKHQWKHUHVXOWLQJOD\RXWLVXQGHILQHG2UXVHWKHLQLWLDOYDOXH"
QRQH1ROLPLWRQWKHZLGWKRUKHLJKWRIWKHER[
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
1ROLPLWRQWKHZLGWKRUKHLJKWRIWKHER[
1HJDWLYHYDOXHVDUHLOOHJDO
&DOFXODWLQJZLGWKVKHLJKWVDQGPDUJLQV7KHIROORZLQJWZRDOJRULWKPVGHILQHWKHXVHGYDOXHRIZLGWKDQGKHLJKWUHVSHFWLYHO\DQGDOVRWKHXVHGYDOXHVRIWKHPDUJLQSURSHUWLHVDQGRIWRSULJKWERWWRPDQGOHIW
1RWHWKDWWKH\GRQRWDIIHFWWKHFRPSXWHGYDOXHVRIZLGWKDQGKHLJKW$OVRQRWHWKDWLQVRPHFDVHVWKHXVHGZLGWKKDVWREHNQRZQLQRUGHUWRFDOFXODWHWKHXVHGKHLJKWRUYLFHYHUVD
)RUZLGWK
7KHWHQWDWLYHXVHGZLGWKLVFDOFXODWHGZLWKRXWPLQZLGWKDQGPD[ZLGWKIROORZLQJWKHUXOHVLQWKHVXEVHFWLRQVEHORZ
,IWKHWHQWDWLYHXVHGZLGWKLVJUHDWHUWKDQPD[ZLGWKWKHVDPHUXOHVDUHDSSOLHGDJDLQEXWWKLVWLPHXVLQJWKHFRPSXWHGYDOXHRIPD[ZLGWKDVWKHFRPSXWHGYDOXHIRU
ZLGWK
,IWKHUHVXOWLQJZLGWKLVVPDOOHUWKDQPLQZLGWKWKHVDPHUXOHVDUHDSSOLHGDJDLQEXWWKLVWLPHXVLQJWKHFRPSXWHGYDOXHRIPLQZLGWKDVWKHFRPSXWHGYDOXHIRUZLGWK
)RUKHLJKW
7KHWHQWDWLYHXVHGKHLJKWLVFDOFXODWHGZLWKRXWPLQKHLJKWDQGPD[KHLJKWIROORZLQJWKHUXOHVXQGHU&DOFXODWLQJZLGWKVKHLJKWVDQGPDUJLQVEHORZ
,IWKHWHQWDWLYHXVHGKHLJKWLVJUHDWHUWKDQPD[KHLJKWWKHVDPHUXOHVDUHDSSOLHGDJDLQEXWWKLVWLPHXVLQJWKHFRPSXWHGYDOXHRIPD[KHLJKWDVWKHFRPSXWHGYDOXHIRU
KHLJKW
,IWKHUHVXOWLQJKHLJKWLVVPDOOHUWKDQPLQKHLJKWWKHVDPHUXOHVDUHDSSOLHGDJDLQEXWWKLVWLPHXVLQJWKHFRPSXWHGYDOXHRIPLQKHLJKWDVWKHFRPSXWHGYDOXHIRUKHLJKW
+RZHYHUIRUUHSODFHGHOHPHQWVZLWKDQLQWULQVLFUDWLRDQGERWKZLGWKDQGKHLJKWVSHFLILHGDVDXWRWKHDOJRULWKPLVDVIROORZV
6HOHFWIURPWKHWDEOHWKHUHVROYHGKHLJKWDQGZLGWKYDOXHVIRUWKHDSSURSULDWHFRQVWUDLQWYLRODWLRQ7DNHWKHPD[ZLGWKDQG
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
IRUWKHDSSURSULDWHFRQVWUDLQWYLRODWLRQ7DNHWKHPD[ZLGWKDQGPD[KHLJKWDVPD[PLQPD[VRWKDWPLQPD[KROGVWUXH,QWKLVWDEOHZDQGKVWDQGIRUWKHUHVXOWVRIWKHZLGWKDQGKHLJKWFRPSXWDWLRQVLJQRULQJWKHPLQZLGWKPLQKHLJKWPD[ZLGWKDQGPD[KHLJKWSURSHUWLHV1RUPDOO\WKHVHDUHWKHLQWULQVLFZLGWKDQGKHLJKWEXWWKH\PD\QRWEHLQWKHFDVHRIUHSODFHGHOHPHQWVZLWKLQWULQVLFUDWLRV
&RQVWUDLQWYLRODWLRQ 5HVROYHGZLGWK5HVROYHGKHLJKW
QRQH Z K
Z!PD[ZLGWK PD[ZLGWKPD[PD[ZLGWKKZPLQKHLJKW
ZPLQZLGWK PLQZLGWKPLQPLQZLGWKKZPD[KHLJKW
K!PD[KHLJKWPD[PD[KHLJKWZKPLQZLGWK
PD[KHLJKW
KPLQKHLJKWPLQPLQKHLJKWZKPD[ZLGWK
PLQKHLJKW
Z!PD[ZLGWKDQGK!PD[KHLJKWZKHUHPD[ZLGWKZPD[KHLJKWK
PD[ZLGWKPD[PLQKHLJKWPD[ZLGWKKZ
Z!PD[ZLGWKDQGK!PD[KHLJKWZKHUHPD[ZLGWKZ!PD[KHLJKWK
PD[PLQZLGWKPD[KHLJKWZK
PD[KHLJKW
ZPLQZLGWKDQGKPLQKHLJKWZKHUHPLQZLGWKZPLQKHLJKWK
PLQPD[ZLGWKPLQKHLJKWZK
PLQKHLJKW
ZPLQZLGWKDQGKPLQKHLJKWZKHUHPLQZLGWKZ!PLQKHLJKWK
PLQZLGWKPLQPD[KHLJKWPLQZLGWKKZ
ZPLQZLGWKDQGK!PD[KHLJKW PLQZLGWK PD[KHLJKW
Z!PD[ZLGWKDQGKPLQKHLJKW PD[ZLGWK PLQKHLJKW
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
7KHQDSSO\WKHDSSURSULDWHUXOHVLQWKHVXEVHFWLRQVEHORZDVLIZLGWKDQGKHLJKWZHUHFRPSXWHGDVWKHVHYDOXHV
1RWHWKDWVRPHYDOXHVRIWKHLPDJHVFDOLQJSURSHUW\>&663$*(@PD\IXUWKHUFKDQJHWKHXVHGYDOXHVRIZLGWKDQGKHLJKW
7KHIROORZLQJVXEVHFWLRQVDSSO\LIWKHHOHPHQWVFRQWDLQLQJEORFNLVKRUL]RQWDO,ILWLVYHUWLFDOWKHVDPHUXOHVDSSO\EXWZLWKHYHU\RFFXUUHQFHRIOHIWUHSODFHGE\WRSULJKWE\ERWWRPWRSE\ULJKWERWWRPE\OHIWKHLJKWE\ZLGWKDQGZLGWKE\KHLJKW
,QOLQHQRQUHSODFHGHOHPHQWV
7KHZLGWKDQGKHLJKWSURSHUWLHVGRQRWDSSO\)RUHDFKRIOHIWULJKWWRSERWWRPPDUJLQOHIWPDUJLQULJKWPDUJLQWRSDQGPDUJLQERWWRPWKHXVHGYDOXHLVHTXDOWRWKHFRPSXWHGYDOXHH[FHSWWKDWDFRPSXWHGYDOXHRIDXWREHFRPHVDXVHGYDOXHRI
1RWHWKDWWKLVVHFWLRQDSSOLHVHTXDOO\ZKHQWKHFRQWDLQLQJEORFNLVKRUL]RQWDODVZKHQLWLVYHUWLFDO
,QOLQHRUIORDWLQJUHSODFHGHOHPHQWV
7KHXVHGYDOXHVRIPDUJLQOHIWPDUJLQULJKWPDUJLQWRSDQGPDUJLQERWWRPDUHHTXDOWRWKHFRPSXWHGYDOXHH[FHSWWKDWDFRPSXWHGYDOXHRIDXWREHFRPHVDXVHGYDOXHRI
,IKHLJKWDQGZLGWKERWKKDYHFRPSXWHGYDOXHVRIDXWRDQGWKHHOHPHQWDOVRKDVDQLQWULQVLFZLGWKWKHQWKDWLQWULQVLFZLGWKLVWKHXVHGYDOXHRIZLGWK
,IKHLJKWDQGZLGWKERWKKDYHFRPSXWHGYDOXHVRIDXWRDQGWKHHOHPHQWDOVRKDVDQLQWULQVLFKHLJKWWKHQWKDWLQWULQVLFKHLJKWLVWKHXVHGYDOXHRIKHLJKW
,IKHLJKWDQGZLGWKERWKKDYHFRPSXWHGYDOXHVRIDXWRDQGWKHHOHPHQWKDVQRLQWULQVLFZLGWKEXWGRHVKDYHDQLQWULQVLFKHLJKWDQGLQWULQVLFUDWLRRULIZLGWKKDVDFRPSXWHGYDOXHRIDXWRKHLJKWKDVVRPHRWKHUFRPSXWHGYDOXHDQGWKHHOHPHQWKDVDQLQWULQVLFUDWLRWKHQWKHXVHGYDOXHRIZLGWKLV
XVHGKHLJKWLQWULQVLFUDWLR
,IKHLJKWDQGZLGWKERWKKDYHFRPSXWHGYDOXHVRIDXWRDQGWKHHOHPHQWKDVQRLQWULQVLFKHLJKWEXWGRHVKDYHDQLQWULQVLF
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
WKHHOHPHQWKDVQRLQWULQVLFKHLJKWEXWGRHVKDYHDQLQWULQVLFZLGWKDQGLQWULQVLFUDWLRRULIKHLJKWKDVDFRPSXWHGYDOXHRIDXWRZLGWKKDVVRPHRWKHUFRPSXWHGYDOXHDQGWKHHOHPHQWKDVDQLQWULQVLFUDWLRWKHQWKHXVHGYDOXHRIKHLJKWLV
XVHGZLGWKLQWULQVLFUDWLR
,IKHLJKWDQGZLGWKERWKKDYHFRPSXWHGYDOXHVRIDXWRDQGWKHHOHPHQWKDVDQLQWULQVLFUDWLREXWQRLQWULQVLFKHLJKWRUZLGWKDQGWKHFRQWDLQLQJEORFNVZLGWKGRHVQWLWVHOIGHSHQGRQWKHUHSODFHGHOHPHQWVZLGWKWKHQWKHXVHGYDOXHRIZLGWKLVFDOFXODWHGIURPWKHFRQVWUDLQWHTXDWLRQXVHGIRUEORFNOHYHOQRQUHSODFHGHOHPHQWVLQQRUPDOIORZ7KHXVHGYDOXHIRUKHLJKWLVXVHGZLGWKLQWULQVLFUDWLR
,IZLGWKKDVDFRPSXWHGYDOXHRIDXWREXWQRQHRIWKHFRQGLWLRQVDERYHDUHPHWWKHQWKHXVHGYDOXHRIZLGWKEHFRPHVS[,IS[LVWRRZLGHWRILWWKHGHYLFH8$VVKRXOGXVHWKHZLGWKRIWKHODUJHVWUHFWDQJOHWKDWKDVDUDWLRDQGILWVWKHGHYLFHLQVWHDG
,IKHLJKWKDVDFRPSXWHGYDOXHRIDXWRDQGQRQHRIWKHUXOHVDERYHGHILQHLWVXVHGYDOXHWKHQWKHXVHGYDOXHRIKHLJKWPXVWEHVHWWRWKHKHLJKWRIWKHODUJHVWUHFWDQJOHWKDWKDVDUDWLRKDVDKHLJKWQRWJUHDWHUWKDQS[DQGKDVDZLGWKQRWJUHDWHUWKDQWKHGHYLFHZLGWK
7KHRUHWLFDOO\DGHYLFHPD\EHZLGHUWKDQWKDQS[EXWQRWWDOOHQRXJKIRUS[,QWKDWFDVHWKHUHVXOWLQJUHSODFHGHOHPHQWZLOOEHWRRWDOO%XWWKLVLVWKHIRUPXODWLRQLQ&66DQGLWVHHPVQRWZRUWKLPSURYLQJVXFKDQHGJHFDVH
3HUFHQWDJHLQWULQVLFZLGWKVDUHILUVWHYDOXDWHGZLWKUHVSHFWWRWKHFRQWDLQLQJEORFNVZLGWKLIWKDWZLGWKGRHVQWLWVHOIGHSHQGRQWKHUHSODFHGHOHPHQWVZLGWK,ILWGRHVWKHQDSHUFHQWDJHLQWULQVLFZLGWKRQWKDWHOHPHQWFDQWEHUHVROYHGDQGWKHHOHPHQWLVDVVXPHGWRKDYHQRLQWULQVLFZLGWK
1RWHWKDWWKLVVHFWLRQDSSOLHVHTXDOO\ZKHQWKHFRQWDLQLQJEORFNLVKRUL]RQWDODVZKHQLWLVYHUWLFDO
%ORFNOHYHOQRQUHSODFHGHOHPHQWVLQQRUPDOIORZZKHQRYHUIORZFRPSXWHVWRYLVLEOH
7KLVVHFWLRQDOVRDSSOLHVWREORFNOHYHOQRQUHSODFHGHOHPHQWVLQQRUPDOIORZZKHQRYHUIORZGRHVQRWFRPSXWHWRYLVLEOHEXWKDVEHHQSURSDJDWHGWRWKHYLHZSRUW
7KHIROORZLQJFRQVWUDLQWVPXVWKROGDPRQJWKHXVHGYDOXHVRIWKHSURSHUWLHV
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
PDUJLQOHIWERUGHUOHIWZLGWKSDGGLQJOHIWZLGWKSDGGLQJULJKWERUGHUULJKWZLGWKPDUJLQULJKWVFUROOEDUZLGWKLIDQ\ ZLGWKRIFRQWDLQLQJEORFN
,IZLGWKLVQRWDXWRDQGERUGHUOHIWZLGWKSDGGLQJOHIWZLGWKSDGGLQJULJKWERUGHUULJKWZLGWKVFUROOEDUZLGWKLIDQ\SOXVDQ\RIPDUJLQOHIWRUPDUJLQULJKWWKDWDUHQRWDXWRLVODUJHUWKDQWKHZLGWKRIWKHFRQWDLQLQJEORFNWKHQDQ\DXWRYDOXHVIRUPDUJLQOHIWRUPDUJLQULJKWDUHIRUWKHIROORZLQJUXOHVWUHDWHGDV]HUR:HVKRXOGGURSWKLVSDUDJUDSK,WFDXVHVEORFNVWKDWDUHZLGHUWKDQWKHLUSDUHQWQRWWREHFHQWHUHGXQOLNHEORFNVWKDWDUHQDUURZHUZKLFKORRNVVWUDQJH
$OOWKHDERYHSURSHUWLHVWKDWKDYHDFRPSXWHGYDOXHRWKHUWKDQDXWRKDYHDXVHGYDOXHHTXDOWRWKHFRPSXWHGYDOXHH[FHSWLIWKH\DOOKDYHDFRPSXWHGYDOXHRWKHUWKDQDXWR7KHQWKHYDOXHVDUHVDLGWREHRYHUFRQVWUDLQHGDQGRQHRIWKHXVHGYDOXHVZLOOKDYHWREHGLIIHUHQWIURPLWVFRPSXWHGYDOXH,IWKHGLUHFWLRQSURSHUW\RIWKHFRQWDLQLQJEORFNKDVWKHYDOXHOWUWKHVSHFLILHGYDOXHRIPDUJLQULJKWLVLJQRUHGDQGWKHYDOXHLVFDOFXODWHGVRDVWRPDNHWKHHTXDOLW\WUXH,IWKHYDOXHRIGLUHFWLRQLVUWOWKLVKDSSHQVWRPDUJLQOHIWLQVWHDG
,IWKHUHLVH[DFWO\RQHYDOXHVSHFLILHGDVDXWRLWVXVHGYDOXHIROORZVIURPWKHHTXDOLW\
,IZLGWKLVVHWWRDXWRDQ\RWKHUDXWRYDOXHVEHFRPHDQGZLGWKIROORZVIURPWKHUHVXOWLQJHTXDOLW\
,IERWKPDUJLQOHIWDQGPDUJLQULJKWDUHDXWRWKHLUXVHGYDOXHVDUHHTXDO7KLVKRUL]RQWDOO\FHQWHUVWKHHOHPHQWZLWKUHVSHFWWRWKHHGJHVRIWKHFRQWDLQLQJEORFN
7KHVFUROOEDUZLGWKYDOXHLVRQO\UHOHYDQWLIWKHXVHUDJHQWXVHVDVFUROOEDUDVLWVVFUROOLQJPHFKDQLVP6HHWKHGHILQLWLRQRIWKHRYHUIORZSURSHUW\
,IPDUJLQWRSRUPDUJLQERWWRPDUHDXWRWKHLUXVHGYDOXHLV,IKHLJKWLVDXWRWKHKHLJKWGHSHQGVRQZKHWKHUWKHHOHPHQWKDVDQ\EORFNOHYHOFKLOGUHQDQGZKHWKHULWKDVSDGGLQJRUERUGHUV
,ILWRQO\KDVLQOLQHOHYHOFKLOGUHQWKHKHLJKWLVWKHGLVWDQFHEHWZHHQWKHWRSRIWKHWRSPRVWOLQHER[DQGWKHERWWRPRIWKHERWWRPPRVWOLQHER[
,ILWKDVEORFNOHYHOFKLOGUHQWKHKHLJKWLVWKHGLVWDQFHEHWZHHQWKHWRSERUGHUHGJHRIWKHWRSPRVWEORFNOHYHOFKLOGER[WKDWGRHVQWKDYHPDUJLQVFROODSVHGWKURXJKLWDQGWKHERWWRPERUGHUHGJHRIWKHERWWRPPRVWEORFNOHYHOFKLOGER[
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
WKDWGRHVQWKDYHPDUJLQVFROODSVHGWKURXJKLW+RZHYHULIWKHHOHPHQWKDVDQRQ]HURWRSSDGGLQJDQGRUWRSERUGHURULVWKHURRWHOHPHQWWKHQWKHFRQWHQWVWDUWVDWWKHWRSPDUJLQHGJHRIWKHWRSPRVWFKLOG7KHILUVWFDVHH[SUHVVHVWKHIDFWWKDWWKHWRSDQGERWWRPPDUJLQVRIWKHHOHPHQWFROODSVHZLWKWKRVHRIWKHWRSPRVWDQGERWWRPPRVWFKLOGUHQZKLOHLQWKHVHFRQGFDVHWKHSUHVHQFHRIWKHSDGGLQJERUGHUSUHYHQWVWKHWRSPDUJLQVIURPFROODSVLQJ6LPLODUO\LIWKHHOHPHQWKDVDQRQ]HURERWWRPSDGGLQJDQGRUERWWRPERUGHUWKHQWKHFRQWHQWHQGVDWWKHERWWRPPDUJLQHGJHRIWKHERWWRPPRVWFKLOG
2QO\FKLOGUHQLQWKHQRUPDOIORZDUHWDNHQLQWRDFFRXQWLHIORDWLQJER[HVDQGDEVROXWHO\SRVLWLRQHGER[HVDUHLJQRUHGDQGUHODWLYHO\SRVLWLRQHGER[HVDUHFRQVLGHUHGZLWKRXWWKHLURIIVHW1RWHWKDWWKHFKLOGER[PD\EHDQDQRQ\PRXVEORFNER[
2WKHUEORFNOHYHOQRQUHSODFHGHOHPHQWVLQQRUPDOIORZ
7KLVVHFWLRQDSSOLHVWREORFNOHYHOQRQUHSODFHGHOHPHQWVZKHQRYHUIORZGRHVQRWFRPSXWHWRYLVLEOHH[FHSWLIWKHRYHUIORZSURSHUW\VYDOXHKDVEHHQSURSDJDWHGWRWKHYLHZSRUW
$SSO\WKHUXOHVIRUEORFNOHYHOQRQUHSODFHGHOHPHQWVLQQRUPDOIORZEXWLJQRUHWKHUHVXOWLQJYDOXHVIRUKHLJKWPDUJLQWRSDQGPDUJLQERWWRP
,IPDUJLQWRSRUPDUJLQERWWRPDUHDXWRWKHLUXVHGYDOXHLV,IKHLJKWLVDXWRLWVXVHGYDOXHLVGHILQHGE\$XWRKHLJKWVIRUIORZURRWV
,QOLQHEORFNRUIORDWLQJQRQUHSODFHGHOHPHQWV
7KHXVHGYDOXHVRIPDUJLQOHIWPDUJLQULJKWPDUJLQWRSDQGPDUJLQERWWRPDUHWKHLUFRPSXWHGYDOXHVH[FHSWWKDWDFRPSXWHGYDOXHRIDXWRJLYHVDXVHGYDOXHRI
7KHXVHGYDOXHRIZLGWKLVWKHFRPSXWHGYDOXHXQOHVVWKDWLVDXWRZKHQXVHGYDOXHLVWKHVKULQNWRILWZLGWK
7KHXVHGYDOXHRIKHLJKWLVWKHFRPSXWHGYDOXHXQOHVVWKDWLVDXWRZKHQWKHXVHGYDOXHLVGHILQHGE\$XWRKHLJKWVIRUIORZURRWV
)RULQOLQHEORFNER[HVWKHPDUJLQER[LVXVHGZKHQFDOFXODWLQJWKHKHLJKWRIWKHOLQHER['RHVWKLVEHORQJKHUH"
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
$EVROXWHO\SRVLWLRQHGQRQUHSODFHGHOHPHQWV
)RUWKHSXUSRVHVRIWKLVVHFWLRQDQGWKHQH[WWKHWHUPVWDWLFSRVLWLRQRIDQHOHPHQWUHIHUVURXJKO\WRWKHSRVLWLRQDQHOHPHQWZRXOGKDYHKDGLQWKHQRUPDOIORZ0RUHSUHFLVHO\
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
%XWUDWKHUWKDQDFWXDOO\FDOFXODWLQJWKHGLPHQVLRQVRIWKDWK\SRWKHWLFDOER[XVHUDJHQWVDUHIUHHWRPDNHDJXHVVDWLWVSUREDEOHSRVLWLRQ
)RUWKHSXUSRVHVRIFDOFXODWLQJWKHVWDWLFSRVLWLRQWKHFRQWDLQLQJEORFNRIIL[HGSRVLWLRQHGHOHPHQWVLVWKHLQLWLDOFRQWDLQLQJEORFNLQVWHDGRIWKHYLHZSRUWDQGDOOVFUROODEOHER[HVVKRXOGEHDVVXPHGWREHVFUROOHGWRWKHLURULJLQ
7KLVFRQVWUDLQWPXVWKROGDPRQJWKHXVHGYDOXHV
OHIWPDUJLQOHIWERUGHUOHIWZLGWKSDGGLQJOHIWZLGWKSDGGLQJULJKWERUGHUULJKWZLGWKPDUJLQULJKWULJKWVFUROOEDUZLGWKLIDQ\ ZLGWKRIFRQWDLQLQJEORFN
,IDOOWKUHHRIOHIWZLGWKDQGULJKWDUHDXWR)LUVWVHWDQ\DXWRYDOXHVIRUPDUJLQOHIWDQGPDUJLQULJKWWR7KHQLIWKHGLUHFWLRQSURSHUW\RIWKHFRQWDLQLQJEORFNLVOWUVHWOHIWWRWKH
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
GLUHFWLRQSURSHUW\RIWKHFRQWDLQLQJEORFNLVOWUVHWOHIWWRWKHVWDWLFSRVLWLRQDQGDSSO\UXOHQXPEHUWKUHHEHORZRWKHUZLVHVHWULJKWWRWKHVWDWLFSRVLWLRQDQGDSSO\UXOHQXPEHURQHEHORZ
,IQRQHRIWKHWKUHHLVDXWR,IERWKPDUJLQOHIWDQGPDUJLQULJKWDUHDXWRVROYHWKHHTXDWLRQXQGHUWKHH[WUDFRQVWUDLQWWKDWWKHWZRPDUJLQVJHWHTXDOYDOXHVXQOHVVWKLVZRXOGPDNHWKHPQHJDWLYHLQZKLFKFDVHZKHQGLUHFWLRQRIWKHFRQWDLQLQJEORFNLVOWUUWOVHWPDUJLQOHIWPDUJLQULJKWWR]HURDQGVROYHIRUPDUJLQULJKWPDUJLQOHIW6KRXOGZHUHPRYHWKHSKUDVHVWDUWLQJZLWKXQOHVV",IRQHRIPDUJLQOHIWRUPDUJLQULJKWLVDXWRVROYHWKHHTXDWLRQIRUWKDWYDOXH,IWKHYDOXHVDUHRYHUFRQVWUDLQHGLJQRUHWKHYDOXHIRUOHIWLQFDVHWKHGLUHFWLRQSURSHUW\RIWKHFRQWDLQLQJEORFNLVUWORUULJKWLQFDVHGLUHFWLRQLVOWUDQGVROYHIRUWKDWYDOXH
2WKHUZLVHVHWDXWRYDOXHVIRUPDUJLQOHIWDQGPDUJLQULJKWWRDQGSLFNWKHRQHRIWKHIROORZLQJVL[UXOHVWKDWDSSOLHV
OHIWDQGZLGWKDUHDXWRDQGULJKWLVQRWDXWRWKHQWKHZLGWKLVVKULQNWRILW7KHQVROYHIRUOHIW
OHIWDQGULJKWDUHDXWRDQGZLGWKLVQRWDXWRWKHQLIWKHGLUHFWLRQSURSHUW\RIWKHFRQWDLQLQJEORFNLVOWUVHWOHIWWRWKHVWDWLFSRVLWLRQRWKHUZLVHVHWULJKWWRWKHVWDWLFSRVLWLRQ7KHQVROYHIRUOHIWLIGLUHFWLRQLVUWORUULJKWLIGLUHFWLRQLVOWU
ZLGWKDQGULJKWDUHDXWRDQGOHIWLVQRWDXWRWKHQWKHZLGWKLVVKULQNWRILW7KHQVROYHIRUULJKW
OHIWLVDXWRZLGWKDQGULJKWDUHQRWDXWRWKHQVROYHIRUOHIW
ZLGWKLVDXWROHIWDQGULJKWDUHQRWDXWRWKHQVROYHIRUZLGWK
ULJKWLVDXWROHIWDQGZLGWKDUHQRWDXWRWKHQVROYHIRUULJKW
7KLVFRQVWUDLQWPXVWDOVRKROGDPRQJWKHXVHGYDOXHV
WRSPDUJLQWRSERUGHUWRSZLGWKSDGGLQJWRSKHLJKWSDGGLQJERWWRPERUGHUERWWRPZLGWKPDUJLQERWWRPERWWRPVFUROOEDUKHLJKWLIDQ\ KHLJKWRIFRQWDLQLQJEORFN
,IDOOWKUHHRIWRSKHLJKWDQGERWWRPDUHDXWRVHWWRSWRWKHVWDWLFSRVLWLRQDQGDSSO\UXOHQXPEHUWKUHHEHORZ
,IQRQHRIWKHWKUHHDUHDXWR,IERWKPDUJLQWRSDQG
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
,IQRQHRIWKHWKUHHDUHDXWR,IERWKPDUJLQWRSDQGPDUJLQERWWRPDUHDXWRVROYHWKHHTXDWLRQXQGHUWKHH[WUDFRQVWUDLQWWKDWWKHWZRPDUJLQVJHWHTXDOYDOXHV,IRQHRIPDUJLQWRSRUPDUJLQERWWRPLVDXWRVROYHWKHHTXDWLRQIRUWKDWYDOXH,IWKHYDOXHVDUHRYHUFRQVWUDLQHGLJQRUHWKHYDOXHIRUERWWRPDQGVROYHIRUWKDWYDOXH
2WKHUZLVHSLFNWKHRQHRIWKHIROORZLQJVL[UXOHVWKDWDSSOLHV
WRSDQGKHLJKWDUHDXWRDQGERWWRPLVQRWDXWR7KHXVHGYDOXHRIERWWRPLVLWVFRPSXWHGYDOXH7KHXVHGKHLJKWLVGHILQHGE\$XWRKHLJKWVIRUIORZURRWV7KHXVHGYDOXHVRIPDUJLQWRSDQGPDUJLQERWWRPDUHWKHLUFRPSXWHGYDOXHVH[FHSWWKDWDQ\DXWRJLYHVDXVHGYDOXHRI)LQDOO\WKHFRQVWUDLQWJLYHVWKHXVHGYDOXHRIWRS
WRSDQGERWWRPDUHDXWRDQGKHLJKWLVQRWDXWR7KHXVHGYDOXHRIWRSLVLWVVWDWLFSRVLWLRQ7KHXVHGYDOXHVRIPDUJLQWRSDQGPDUJLQERWWRPDUHWKHLUFRPSXWHGYDOXHVH[FHSWWKDWDQ\DXWRJLYHVDXVHGYDOXHRI)LQDOO\WKHFRQVWUDLQWJLYHVWKHXVHGYDOXHIRUERWWRP
KHLJKWDQGERWWRPDUHDXWRDQGWRSLVQRWDXWR7KHXVHGKHLJKWLVGHILQHGE\$XWRKHLJKWVIRUIORZURRWV7KHXVHGYDOXHVRIPDUJLQWRSDQGPDUJLQERWWRPDUHWKHLUFRPSXWHGYDOXHVH[FHSWWKDWDQ\DXWRJLYHVDXVHGYDOXHRI)LQDOO\WKHFRQVWUDLQWJLYHVWKHXVHGYDOXHRIERWWRP
WRSLVDXWRKHLJKWDQGERWWRPDUHQRWDXWR7KHXVHGYDOXHVRIPDUJLQWRSDQGPDUJLQERWWRPDUHWKHLUFRPSXWHGYDOXHVH[FHSWWKDWDQ\DXWRJLYHVDXVHGYDOXHRI7KHFRQVWUDLQWJLYHVWKHXVHGYDOXHIRUWRS
KHLJKWLVDXWRWRSDQGERWWRPDUHQRWDXWR7KHXVHGYDOXHVRIPDUJLQWRSDQGPDUJLQERWWRPDUHWKHLUFRPSXWHGYDOXHVH[FHSWWKDWDQ\DXWRJLYHVDXVHGYDOXHRI7KHFRQVWUDLQWJLYHVWKHXVHGYDOXHIRUKHLJKW
ERWWRPLVDXWRWRSDQGKHLJKWDUHQRWDXWR7KHXVHGYDOXHVRIPDUJLQWRSDQGPDUJLQERWWRPDUHWKHLUFRPSXWHGYDOXHVH[FHSWWKDWDQ\DXWRJLYHVDXVHGYDOXHRI7KHFRQVWUDLQWJLYHVWKHXVHGYDOXHIRUERWWRP
7KHVFUROOEDUKHLJKWDQGVFUROOEDUZLGWKYDOXHVDUHRQO\UHOHYDQWLIWKHXVHUDJHQWXVHVDVFUROOEDUDVLWVVFUROOLQJPHFKDQLVP6HHWKHGHILQLWLRQRIWKHRYHUIORZSURSHUW\
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
$EVROXWHO\SRVLWLRQHGUHSODFHGHOHPHQWV
7KLVVLWXDWLRQLVVLPLODUWRWKHSUHYLRXVRQHH[FHSWWKDWWKHHOHPHQWPD\KDYHDQLQWULQVLFVL]HRUUDWLR7KHVHTXHQFHRIVXEVWLWXWLRQVLVQRZ
7KHXVHGYDOXHRIZLGWKDQGKHLJKWLVGHWHUPLQHGDVIRULQOLQHUHSODFHGHOHPHQWV
)RUHDFKRIWRSULJKWERWWRPOHIWPDUJLQWRSPDUJLQULJKWPDUJLQERWWRPDQGPDUJLQOHIWLIWKHFRPSXWHGYDOXHLVQRWDXWRWKHXVHGYDOXHLVHTXDOWRWKHFRPSXWHGYDOXH
,IERWKOHIWDQGULJKWKDYHWKHYDOXHDXWRWKHQLIGLUHFWLRQRIWKHFRQWDLQLQJEORFNLVOWUWKHXVHGYDOXHRIOHIWLVLWVVWDWLFSRVLWLRQHOVHLIGLUHFWLRQLVUWOWKHXVHGYDOXHRIULJKWLVLWVVWDWLFSRVLWLRQ
,IERWKWRSDQGERWWRPKDYHWKHYDOXHDXWRWKHQWKHXVHGYDOXHRIWRSLVLWVVWDWLFSRVLWLRQ
,IOHIWRUULJKWRUERWKDUHDXWRDQGPDUJLQOHIWLVDXWRWKHQWKHXVHGYDOXHRIPDUJLQOHIWLV
,IOHIWRUULJKWRUERWKDUHDXWRDQGPDUJLQULJKWLVDXWRWKHQWKHXVHGYDOXHRIPDUJLQULJKWLV
,IQHLWKHUOHIWQRUULJKWDUHDXWRDQGERWKPDUJLQOHIWDQGPDUJLQULJKWDUHDXWRWKHQWKHXVHGYDOXHVVDWLVI\WKHH[WUDFRQVWUDLQWWKDWPDUJLQULJKWDQGPDUJLQOHIWDUHHTXDOXQOHVVWKLVZRXOGPDNHWKHPQHJDWLYHLQZKLFKFDVHZKHQWKHGLUHFWLRQRIWKHFRQWDLQLQJEORFNLVOWUUWOWKHXVHGYDOXHRIPDUJLQOHIWPDUJLQULJKWLV5HPRYHWKHSDUWVWDUWLQJZLWKXQOHVV",WORRNVEHWWHUWRFHQWHUWKHLPDJH
7KHUHPDLQLQJXVHGYDOXHVLIDQ\IROORZVIURPWKHVHWZRFRQVWUDLQWV
OHIWPDUJLQOHIWERUGHUOHIWZLGWKSDGGLQJOHIWZLGWKSDGGLQJULJKWERUGHUULJKWZLGWKPDUJLQULJKWULJKWVFUROOEDUZLGWKLIDQ\ ZLGWKRIFRQWDLQLQJEORFN
WRSPDUJLQWRSERUGHUWRSZLGWKSDGGLQJWRSKHLJKWSDGGLQJERWWRPERUGHUERWWRPZLGWKPDUJLQERWWRPERWWRPVFUROOEDUKHLJKWLIDQ\ KHLJKWRIFRQWDLQLQJEORFN
,IWKHILUVWHTXDWLRQLVRYHUFRQVWUDLQHGLJQRUHWKHYDOXHIRU
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
,IWKHILUVWHTXDWLRQLVRYHUFRQVWUDLQHGLJQRUHWKHYDOXHIRUHLWKHUOHIWLQFDVHWKHGLUHFWLRQSURSHUW\RIWKHFRQWDLQLQJEORFNLVUWORUULJKWLQFDVHGLUHFWLRQLVOWUDQGVROYHIRUWKDWYDOXH
,IWKHVHFRQGHTXDWLRQLVRYHUFRQVWUDLQHGLJQRUHWKHYDOXHIRUERWWRPDQGVROYHIRUWKDWYDOXH
%ORFNOHYHOUHSODFHGHOHPHQWVLQQRUPDOIORZ
$SSO\WKHUXOHVIRULQOLQHUHSODFHGHOHPHQWVEXWLJQRUHWKHUHVXOWLQJYDOXHVIRUPDUJLQOHIWDQGPDUJLQULJKW7RFRPSXWHWKHXVHGYDOXHRIWKRVHDSSO\WKHUXOHVIRUEORFNOHYHOQRQUHSODFHGHOHPHQWVXVLQJWKHXVHGYDOXHVMXVWIRXQGIRUZLGWKERUGHUDQGSDGGLQJDVLIWKH\ZHUHWKHFRPSXWHGYDOXHV
)ORDWLQJQRQUHSODFHGHOHPHQWV
7KHXVHGYDOXHVRIWKHPDUJLQVDUHHTXDOWRWKHFRPSXWHGYDOXHVH[FHSWWKDWWKHXVHGYDOXHVRIDQ\PDUJLQVFRPSXWHGDVDXWRDUH
7KHXVHGYDOXHRIZLGWKLVHTXDOWRWKHFRPSXWHGYDOXHH[FHSWWKDWLIZLGWKLVFRPSXWHGDVDXWRWKHXVHGYDOXHLVWKHVKULQNWRILWZLGWK
,IWKHFRPSXWHGYDOXHRIKHLJKWLVQRWDXWRWKHXVHGYDOXHLVWKHFRPSXWHGYDOXH2WKHUZLVHWKHXVHGKHLJKWGHSHQGVRQWKHGHVFHQGDQWVDVGHILQHGLQ$XWRKHLJKWVIRUIORZURRWV
$XWRKHLJKWVIRUIORZURRWV
,QFHUWDLQFDVHVVHHWKHSUHFHGLQJVHFWLRQVWKHKHLJKWRIDQHOHPHQWLVFRPSXWHGDVIROORZV
,ILWRQO\KDVLQOLQHOHYHOFKLOGUHQWKHKHLJKWLVWKHGLVWDQFHEHWZHHQWKHWRSRIWKHWRSPRVWOLQHER[DQGWKHERWWRPRIWKHERWWRPPRVWOLQHER[
,ILWKDVEORFNOHYHOFKLOGUHQWKHKHLJKWLVWKHGLVWDQFHEHWZHHQWKHWRSPDUJLQHGJHRIWKHWRSPRVWEORFNOHYHOFKLOGER[DQGWKHERWWRPPDUJLQHGJHRIWKHERWWRPPRVWEORFNOHYHOFKLOGER[
$EVROXWHO\SRVLWLRQHGFKLOGUHQDUHLJQRUHGDQGUHODWLYHO\SRVLWLRQHGER[HVDUHFRQVLGHUHGZLWKRXWWKHLURIIVHW1RWHWKDWWKHFKLOGER[PD\EHDQDQRQ\PRXVEORFNER[
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
,QDGGLWLRQLIWKHHOHPHQWKDVDQ\IORDWLQJGHVFHQGDQWVZKRVHERWWRPPDUJLQHGJHLVEHORZWKHERWWRPWKHQWKHKHLJKWLVLQFUHDVHGWRLQFOXGHWKRVHHGJHV2QO\IORDWVWKDWDUHFKLOGUHQRIWKHHOHPHQWLWVHOIRURIGHVFHQGDQWVLQWKHQRUPDOIORZDUHWDNHQLQWRDFFRXQWHJIORDWVLQVLGHDEVROXWHO\SRVLWLRQHGGHVFHQGDQWVRURWKHUIORDWVDUHQRW
6KULQNWRILW
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
7KHQWKHVKULQNWRILWZLGWKLVPLQPD[SUHIHUUHGPLQLPXPZLGWKDYDLODEOHZLGWKSUHIHUUHGZLGWK
'HILQHLQPRUHGHWDLOXVLQJDWH[WE\'DYLG%DURQ
)ORDWLQJER[HV
,QWURGXFWLRQWRIORDWV
7KLVVHFWLRQLVQRWQRUPDWLYH$IORDWLVDER[WKDWLVVKLIWHGWRWKHOHIWRUULJKWRQWKH
FXUUHQWOLQH7KHPRVWLQWHUHVWLQJFKDUDFWHULVWLFRIDIORDWRUIORDWLQJER[LVWKDWFRQWHQWPD\IORZDORQJLWVVLGHRUEHSURKLELWHGIURPGRLQJVRE\WKHFOHDUSURSHUW\&RQWHQWIORZVGRZQWKHULJKWVLGHRIDOHIWIORDWHGER[DQGGRZQWKHOHIWVLGHRIDULJKWIORDWHGER[7KHIROORZLQJLVDQRQQRUPDWLYHLQWURGXFWLRQWRIORDWSRVLWLRQLQJDQGFRQWHQWIORZWKHH[DFWUXOHVJRYHUQLQJIORDWSRVLWLRQLQJDUHJLYHQLQWKHQH[WVHFWLRQ
$IORDWHGER[LVVKLIWHGWRWKHOHIWRUULJKWXQWLOLWVRXWHUHGJHWRXFKHVWKHFRQWDLQLQJEORFNHGJHRUWKHRXWHUHGJHRIDQRWKHUIORDW,IWKHUHLVDOLQHER[WKHWRSRIWKHIORDWHGER[LV
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
DOLJQHGZLWKWKHWRSRIWKHFXUUHQWOLQHER[,IWKHUHLVQWHQRXJKKRUL]RQWDOURRPIRUWKHIORDWLWLV
VKLIWHGGRZQZDUGXQWLOHLWKHULWILWVRUWKHUHDUHQRPRUHIORDWVSUHVHQW
6LQFHDIORDWLVQRWLQWKHIORZQRQSRVLWLRQHGEORFNER[HVFUHDWHGEHIRUHDQGDIWHUWKHIORDWER[IORZYHUWLFDOO\DVLIWKHIORDWGLGQWH[LVW+RZHYHUOLQHER[HVFUHDWHGQH[WWRWKHIORDWDUHVKRUWHQHGWRPDNHURRPIRUWKHPDUJLQER[RIWKHIORDW,IDVKRUWHQHGOLQHER[LVWRRVPDOOWRFRQWDLQDQ\IXUWKHUFRQWHQWWKHQLWLVVKLIWHGGRZQZDUGXQWLOHLWKHULWILWVRUWKHUHDUHQRPRUHIORDWVSUHVHQW$Q\FRQWHQWLQWKHFXUUHQWOLQHEHIRUHDIORDWHGER[LVUHIORZHGLQWKHILUVWDYDLODEOHOLQHRQWKHRWKHUVLGHRIWKHIORDW,QRWKHUZRUGVLILQOLQHER[HVDUHSODFHGRQWKHOLQHEHIRUHDOHIWIORDWLVHQFRXQWHUHGWKDWILWVLQWKHUHPDLQLQJOLQHER[VSDFHWKHOHIWIORDWLVSODFHGRQWKDWOLQHDOLJQHGZLWKWKHWRSRIWKHOLQHER[DQGWKHQWKHLQOLQHER[HVDOUHDG\RQWKHOLQHDUHPRYHGDFFRUGLQJO\WRWKHULJKWRIWKHIORDWWKHULJKWEHLQJWKHRWKHUVLGHRIWKHOHIWIORDWDQGYLFHYHUVDIRUUWODQGULJKWIORDWV
,QWKHIROORZLQJGRFXPHQWIUDJPHQWWKHFRQWDLQLQJEORFNLVWRRQDUURZWRFRQWDLQWKHFRQWHQWQH[WWRWKHIORDWVRWKHFRQWHQWJHWVPRYHGWREHORZWKHIORDWVZKHUHLWLVDOLJQHGLQWKHOLQHER[DFFRUGLQJWRWKHWH[WDOLJQSURSHUW\
7KLVIUDJPHQWPLJKWORRNOLNHWKLV
([DPSOH;,,,
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
6HYHUDOIORDWVPD\EHDGMDFHQWDQGWKLVPRGHODOVRDSSOLHVWRDGMDFHQWIORDWVLQWKHVDPHOLQH
)LJXUH7KHWH[WLVWRRORQJWRILWLQDVKRUWHQHGOLQHER[QH[WWRWKHIORDWGDUNEOXHER[DQGVRLWLVSXVKHGGRZQ
XQWLOLWLVSDVVHGWKHIORDW
7KHIROORZLQJUXOHIORDWVDOO,0*ER[HVZLWKWRWKHOHIWDQGVHWVWKHOHIWPDUJLQWR
([DPSOH;,9
&RQVLGHUWKHIROORZLQJ+70/VRXUFHDQGVW\OHVKHHW
7KH,0*ER[LVIORDWHGWRWKHOHIW7KHFRQWHQWWKDWIROORZVLVIRUPDWWHGWRWKHULJKWRIWKHIORDWVWDUWLQJRQWKHVDPHOLQHDVWKHIORDW7KHOLQHER[HVWRWKHULJKWRIWKHIORDWDUHVKRUWHQHGGXHWRWKHIORDWVSUHVHQFHEXWUHVXPHWKHLUQRUPDOZLGWKWKDWRIWKHFRQWDLQLQJEORFNHVWDEOLVKHGE\WKH3HOHPHQWDIWHUWKHIORDW7KLVGRFXPHQWPLJKWEHIRUPDWWHGDV
([DPSOH;9
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
$VVWDWHGLQ&ROODSVLQJPDUJLQVWKHPDUJLQVRIIORDWLQJER[HVQHYHUFROODSVHZLWKPDUJLQVRIDGMDFHQWER[HV7KXVLQWKHSUHYLRXVH[DPSOHYHUWLFDOPDUJLQVGRQRWFROODSVHEHWZHHQWKH3ER[DQGWKHIORDWHG,0*ER[
7KHFRQWHQWVRIIORDWVDUHVWDFNHGDVLIIORDWVJHQHUDWHGQHZVWDFNLQJFRQWH[WVH[FHSWWKDWDQ\HOHPHQWVWKDWDFWXDOO\FUHDWHQHZVWDFNLQJFRQWH[WVWDNHSDUWLQWKHIORDWVSDUHQWVVWDFNLQJFRQWH[W$IORDWFDQRYHUODSRWKHUER[HVLQWKHQRUPDOIORZHJZKHQDQRUPDOIORZER[QH[WWRDIORDWKDVQHJDWLYHPDUJLQV:KHQWKLVKDSSHQVIORDWVDUHUHQGHUHGLQIURQWRIQRQSRVLWLRQHGLQIORZEORFNVEXWEHKLQGLQIORZLQOLQHV
)LJXUH$QLPDJHVKRZLQJWKHYDULRXVPDUJLQVRIWKH%2'
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
7KHIROORZLQJH[DPSOHLOOXVWUDWHVWKHXVHRIWKHFOHDUSURSHUW\WRSUHYHQWFRQWHQWIURPIORZLQJQH[WWRDIORDW
)LJXUH$IORDWLQJLPDJHREVFXUHVERUGHUVRIEORFNER[HVLWRYHUODSV
$VVXPLQJDUXOHVXFKDVWKLV
IRUPDWWLQJPLJKWORRNOLNHWKLV
([DPSOH;9,,
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
7KHIORDWSURSHUW\
1DPH IORDW9DOXH OHIW_ULJKW_QRQH_SDJHIORDWV!,QLWLDO QRQH$SSOLHVWR DOOEXWVHH,QKHULWHG QR3HUFHQWDJHV 1$0HGLD YLVXDO&RPSXWHGYDOXH DVVSHFLILHG
7KLVSURSHUW\VSHFLILHVZKHWKHUDER[VKRXOGIORDWWRWKHOHIWULJKWRUQRWDWDOO,WPD\EHVHWIRUDQ\HOHPHQWEXWRQO\DSSOLHVWRHOHPHQWVWKDWJHQHUDWHER[HVWKDWDUHQRWDEVROXWHO\SRVLWLRQHG7KHYDOXHVRIWKLVSURSHUW\KDYHWKHIROORZLQJPHDQLQJV
left
right
none
6HH*HQHUDWHG&RQWHQWIRU3DJHG0HGLD>&66*&30@
5XOHVIRUSRVLWLRQLQJIORDWV
>7RGRFRS\IURP&66>&66@DQGJHQHUDOL]HWRYHUWLFDOWH[W@
1RWHWKDWDER[ZLWKDYDOXHRIIORDWRWKHUWKDQQRQHLVDIORZURRW
7KHERUGHUER[RIDWDEOHDEORFNOHYHOUHSODFHGHOHPHQWRUDQHOHPHQWLQWKHQRUPDOIORZWKDWLVDIORZURRWVXFKDVDQHOHPHQWZLWKRYHUIORZRWKHUWKDQYLVLEOHPXVWQRWRYHUODS
)LJXUH%RWKSDUDJUDSKVKDYHVHWFOHDUOHIWZKLFKFDXVHVWKHVHFRQGSDUDJUDSKWREHSXVKHGGRZQWRDSRVLWLRQEHORZWKHIORDWFOHDUDQFHLVDGGHGDERYHLWVWRSPDUJLQWRDFFRPSOLVKWKLVVHHWKHFOHDUSURSHUW\
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
HOHPHQWZLWKRYHUIORZRWKHUWKDQYLVLEOHPXVWQRWRYHUODSDQ\IORDWVLQWKHVDPHIORZDVWKHHOHPHQWLWVHOI,IQHFHVVDU\LPSOHPHQWDWLRQVVKRXOGFOHDUWKHVDLGHOHPHQWE\SODFLQJLWEHORZDQ\SUHFHGLQJIORDWVEXWPD\SODFHLWDGMDFHQWWRVXFKIORDWVLIWKHUHLVVXIILFLHQWVSDFHE\LQFUHDVLQJRQHPDUJLQDQGGHFUHDVLQJWKHRSSRVLWHPDUJLQ6XIILFLHQWVSDFHPHDQVWKDWWKHRSSRVLWHPDUJLQGRHVQRWEHFRPHQHJDWLYH
7KHFOHDUSURSHUW\
1DPH FOHDU9DOXH QRQH_OHIW_ULJKW_ERWK,QLWLDO QRQH$SSOLHVWR EORFNOHYHOHOHPHQWV,QKHULWHG QR3HUFHQWDJHV 1$0HGLD YLVXDO&RPSXWHGYDOXH DVVSHFLILHG
>7RGRFRS\IURP&66>&66@DQGJHQHUDOL]HWRYHUWLFDOWH[W@
2YHUIORZ
7KHRYHUIORZRYHUIORZ[DQGRYHUIORZ\SURSHUWLHV
,QWKHSUHFHGLQJVHFWLRQVVHYHUDOWKLQJVVXFKDVIORZURRWVGHSHQGRQWKHYDOXHRIRYHUIORZ:HSUREDEO\QHHGWRUHZULWHWKHPLQWHUPVRIRYHUIORZ[DQGRU\RUVLPLODU
1DPH RYHUIORZ[RYHUIORZ\9DOXH YLVLEOH_KLGGHQ_VFUROO_DXWR_QRGLVSOD\_
QRFRQWHQW,QLWLDO YLVLEOH$SSOLHVWR QRQUHSODFHGEORFNOHYHOHOHPHQWVDQG
QRQUHSODFHGLQOLQHEORFNHOHPHQWV,QKHULWHG QR3HUFHQWDJHV 1$0HGLD YLVXDO&RPSXWHGYDOXH DVVSHFLILHGH[FHSWYLVLEOHVHHWH[W
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
1DPH RYHUIORZ9DOXH >YLVLEOH_KLGGHQ_VFUROO_DXWR_QRGLVSOD\
_QRFRQWHQW@^`,QLWLDO VHHLQGLYLGXDOSURSHUWLHV$SSOLHVWR QRQUHSODFHGEORFNOHYHOHOHPHQWVDQG
QRQUHSODFHGLQOLQHEORFNHOHPHQWV,QKHULWHG QR3HUFHQWDJHV 1$0HGLD YLVXDO&RPSXWHGYDOXH DVVSHFLILHGH[FHSWYLVLEOHVHHWH[W
7KHVHSURSHUWLHVVSHFLI\ZKHWKHUFRQWHQWLVFOLSSHGZKHQLWRYHUIORZVWKHHOHPHQWVFRQWHQWDUHD,WDIIHFWVWKHFOLSSLQJRIDOORIWKHHOHPHQWVFRQWHQWH[FHSWDQ\GHVFHQGDQWHOHPHQWVDQGWKHLUUHVSHFWLYHFRQWHQWDQGGHVFHQGDQWVZKRVHFRQWDLQLQJEORFNLVWKHYLHZSRUWRUDQDQFHVWRURIWKHHOHPHQW2YHUIORZ[GHWHUPLQHVFOLSSLQJDWWKHOHIWDQGULJKWHGJHVRYHUIORZ\DWWKHWRSDQGERWWRPHGJHV
2YHUIORZLVDVKRUWKDQG,ILWKDVRQHNH\ZRUGLWVHWVERWKRYHUIORZ[DQGRYHUIORZ\WRWKDWNH\ZRUGLILWKDVWZRLWVHWVRYHUIORZ[WRWKHILUVWDQGRYHUIORZ\WRWKHVHFRQG.H\ZRUGVKDYHWKHIROORZLQJPHDQLQJV
visible7KLVYDOXHLQGLFDWHVWKDWFRQWHQWLVQRWFOLSSHGLHLWPD\EHUHQGHUHGRXWVLGHWKHFRQWHQWER[
hidden7KLVYDOXHLQGLFDWHVWKDWWKHFRQWHQWLVFOLSSHGDQGWKDWQRVFUROOLQJPHFKDQLVPVKRXOGEHSURYLGHGWRYLHZWKHFRQWHQWRXWVLGHWKHFOLSSLQJUHJLRQ
scroll7KLVYDOXHLQGLFDWHVWKDWWKHFRQWHQWLVFOLSSHGDQGWKDWLIWKHXVHUDJHQWXVHVDVFUROOLQJPHFKDQLVPWKDWLVYLVLEOHRQWKHVFUHHQVXFKDVDVFUROOEDURUDSDQQHUWKDWPHFKDQLVPVKRXOGEHGLVSOD\HGIRUDER[ZKHWKHURUQRWDQ\RILWVFRQWHQWLVFOLSSHG7KLVDYRLGVDQ\SUREOHPZLWKVFUROOEDUVDSSHDULQJDQGGLVDSSHDULQJLQDG\QDPLFHQYLURQPHQW:KHQWKLVYDOXHLVVSHFLILHGDQGWKHWDUJHWPHGLXPLVSULQWRYHUIORZLQJFRQWHQWPD\EHSULQWHG
auto7KHEHKDYLRURIWKHDXWRYDOXHLV8$GHSHQGHQWEXWVKRXOGFDXVHDVFUROOLQJPHFKDQLVPWREHSURYLGHGIRURYHUIORZLQJER[HV
nodisplay
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
nodisplay:KHQWKHFRQWHQWGRHVQWILWLQWKHFRQWHQWER[WKHZKROHER[LVUHPRYHGDVLIGLVSOD\QRQHZHUHVSHFLILHG>7KLVLGHDLVGXHWR7LOO+DOEDFKWLOOK#RSHUDFRP!-XO\@
nocontent:KHQWKHFRQWHQWGRHVQWILWLQWKHFRQWHQWER[WKHZKROHFRQWHQWLVKLGGHQDVLIYLVLELOLW\KLGGHQZHUHVSHFLILHG>7KLVLGHDLVGXHWR7LOO+DOEDFKWLOOK#RSHUDFRP!-XO\@
(YHQLIRYHUIORZLVVHWWRYLVLEOHFRQWHQWPD\EHFOLSSHGWRD8$VGRFXPHQWZLQGRZE\WKHQDWLYHRSHUDWLQJHQYLURQPHQW
8$VPXVWDSSO\WKHRYHUIORZSURSHUW\VHWRQWKHURRWHOHPHQWWRWKHYLHZSRUW+70/8$VPXVWLQVWHDGDSSO\WKHRYHUIORZSURSHUW\IURPWKH%2'
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
+HUHLVWKHVW\OHVKHHWFRQWUROOLQJWKHVL]HVDQGVW\OHRIWKHJHQHUDWHGER[HV
7KHLQLWLDOYDOXHRIRYHUIORZLVYLVLEOHVRWKHEORFNTXRWH!ZRXOGEHIRUPDWWHGZLWKRXWFOLSSLQJVRPHWKLQJOLNHWKLV
)LJXUH3RVVLEOHUHQGHULQJZLWKRYHUIORZYLVLEOH
6HWWLQJRYHUIORZWRKLGGHQIRUWKHGLY!RQWKHRWKHUKDQGFDXVHVWKHEORFNTXRWH!WREHFOLSSHGE\WKHFRQWDLQLQJEORFN
)LJXUH3RVVLEOHUHQGHULQJZLWKRYHUIORZKLGGHQ
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
7KHFRPELQDWLRQRIFROODSVLQJPDUJLQVPD[KHLJKWDQGRYHUIORZDXWRFDQOHDGWRVXEWOHGLIIHUHQFHVLQLPSOHPHQWDWLRQVXQOHVVVSHFLDOFDUHLVWDNHQ$8$VKRXOGDVVXPHWKDWDQHOHPHQWFDQEHUHQGHUHGZLWKRXWDVFUROOLQJPHFKDQLVPILUVWSHUIRUPDOOWKHFROODSVLQJRIPDUJLQVDQGFKHFNWKDWWKHFRQWHQWKHLJKWLVLQGHHGOHVVWKDQWKHPD[KHLJKW,ILWLVQRWWKHSURFHVVLVUHSHDWHGXQGHUWKHDVVXPSWLRQWKDWDVFUROOLQJPHFKDQLVPLVQHHGHG
$YDOXHRIVFUROOZRXOGWHOO8$VWKDWVXSSRUWDYLVLEOHVFUROOLQJPHFKDQLVPWRGLVSOD\RQHVRWKDWXVHUVFRXOGDFFHVVWKHFOLSSHGFRQWHQW
&RQVLGHUWKLVFDVHZKHUHDQDEVROXWHO\SRVLWLRQHGHOHPHQWLVPL[HGZLWKDQRYHUIORZSDUHQW6W\OHVKHHW
'RFXPHQWIUDJPHQW
,QWKLVH[DPSOHWKHVFUROOHUHOHPHQWZLOOQRWVFUROOWKHVDWHOOLWHHOHPHQWEHFDXVHWKHODWWHUVFRQWDLQLQJEORFNLVRXWVLGHWKHHOHPHQWZKRVHRYHUIORZLVEHLQJFOLSSHGDQGVFUROOHG
([DPSOH;,;
,QWKHIROORZLQJGRFXPHQWIUDJPHQWWKHRXWHU',9KDVKHLJKWDXWREXWPD[KHLJKWHP7KHLQQHU',9KDVODUJHPDUJLQVDQGZRXOGQRUPDOO\MXVWILW
([DPSOH;;
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
7KHFRPSXWHGYDOXHVRIRYHUIORZ[DQGRYHUIORZ\DUHWKHVDPHDVWKHLUVSHFLILHGYDOXHVH[FHSWWKDWVRPHFRPELQDWLRQVZLWKYLVLEOHDUHQRWSRVVLEOHLIRQHLVVSHFLILHGDVYLVLEOHDQGWKHRWKHULVVFUROORUDXWRWKHQYLVLEOHLVVHWWRDXWR7KHFRPSXWHGYDOXHRIRYHUIORZLVHTXDOWRWKHFRPSXWHGYDOXHRIRYHUIORZ[LIRYHUIORZ\LVWKHVDPHRWKHUZLVHLWLVWKHSDLURIFRPSXWHGYDOXHVRIRYHUIORZ[DQGRYHUIORZ\
7KHVFUROOLQJPHFKDQLVPGHSHQGVRQWKH8$7KHPRVWFRPPRQPHFKDQLVPLVDVFUROOEDUEXWSDQQHUVKDQGFXUVRUVSDJHIOLFNHUVHWFDUHDOVRSRVVLEOH$YDOXHRIVFUROOZRXOGWHOO8$VWKDWVXSSRUWDYLVLEOHVFUROOLQJPHFKDQLVPWRGLVSOD\RQHVRWKDWXVHUVFDQDFFHVVWKHFOLSSHGFRQWHQW7KHRYHUIORZVW\OHSURSHUW\OHWVDQDXWKRUVSHFLI\RQHRUPRUHSUHIHUUHGVFUROOLQJPHFKDQLVP
1RWHWKDWRYHUIORZ[DQGRYHUIORZ\GLGQRWH[LVWLQ&66
1RWHWKDWWH[WRYHUIORZVHH>&667(;7@FDQEHXVHGWRJLYHDYLVXDOLQGLFDWLRQZKHUHWH[WKDVEHHQFOLSSHG
7KHRYHUIORZVW\OHSURSHUW\
1DPH RYHUIORZVW\OH9DOXH DXWR_>VFUROOEDU_SDQQHU_PRYH_
PDUTXHH@>>VFUROOEDU_SDQQHU_PRYH_PDUTXHH@@
,QLWLDO DXWR$SSOLHVWR VDPHDVRYHUIORZ,QKHULWHG \HV3HUFHQWDJHV 1$0HGLD YLVXDO&RPSXWHGYDOXH DVVSHFLILHG
,IZHDVVXPHWKDWGQHHGVVFUROOEDUVWKHQWKHKHLJKWRIGLQFOXGLQJWKHVLQJOHOLQHRIWH[WDQGWZLFHHPRIPDUJLQVDGGVXSWRHPSOXVDVFUROOEDU6LQFHWKDWLVJUHDWHUWKDQHPWKHPD[LPXPDOORZHGKHLJKWLWVHHPVZHPDGHWKHULJKWDVVXPSWLRQDQGGLQGHHGQHHGVVFUROOEDUV
+RZHYHUZHVKRXOGKDYHVWDUWHGE\DVVXPLQJWKDWQRVFUROOEDUVDUHQHHGHG,QWKDWFDVHWKHFRQWHQWKHLJKWRIGLVH[DFWO\WKHPD[LPXPKHLJKWRIHPSURYLQJWKDWWKHDVVXPSWLRQZDVFRUUHFWDQGGLQGHHGVKRXOGQRWKDYHVFUROOEDUV
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
7KLVSURSHUW\VSHFLILHVWKHSUHIHUUHGVFUROOLQJPHWKRGVIRUHOHPHQWVWKDWRYHUIORZVHHWKHRYHUIORZSURSHUW\7KHYDOXHLVHLWKHUDXWRPHDQLQJQRSUHIHUHQFHRUDOLVWRIPHWKRGVLQRUGHURISUHIHUHQFH7KH8$VKRXOGXVHWKHILUVWVFUROOLQJPHWKRGLQWKHOLVWWKDWLWVXSSRUWV,ILWVXSSRUWVQRQHRIWKHPLWPXVWDFWDVLIWKHYDOXHZDVDXWR
$8$WKDWVXSSRUWDFHUWDLQVFUROOLQJPHFKDQLVPPD\EHDEOHWRVXSSRUWLWRQO\LQFHUWDLQFDVHV(JD8$PD\EHDEOHWRXVHWKHPDUTXHHHIIHFWRQO\LQWKHKRUL]RQWDOGLUHFWLRQRUWKHOLQHSURJUHVVLRQGLUHFWLRQRULWPD\EHDEOHWRXVHDSDQQHURQO\LIQRQHRIWKHDQFHVWRUER[HVXVHVDSDQQHU
VFUROOEDU6FUROOEDUVDUHW\SLFDOO\QDUURZVWULSVLQVHUWHGRQRQHRUWZRHGJHVRIDQHOHPHQWDQGZKLFKRIWHQKDYHDUURZVWRFOLFNRQDQGDWKXPEWRGUDJXSDQGGRZQRUOHIWDQGULJKWWRPRYHWKHFRQWHQWVRIWKHHOHPHQW
SDQQHU$SDQQHULVW\SLFDOO\DUHFWDQJOHVKRZQLQRQHFRUQHURIWKHHOHPHQWZLWKDVPDOOHUUHFWDQJOHLQVLGH7KHODUJHUUHFWDQJOHUHSUHVHQWVDOOWKHDYDLODEOHFRQWHQWRIWKHHOHPHQWDQGWKHVPDOOHURQHWKHYLVLEOHSDUW7KHVPDOOHUUHFWDQJOHFDQEHPRYHGDURXQGE\WKHXVHUWRPRYHWKHFRQWHQWRIWKHHOHPHQWDFFRUGLQJO\
PRYH7KHYDOXHPRYHUHIHUVWRDPHWKRGZKHUHWKHXVHUFDQPRYHWKHFRQWHQWRIWKHHOHPHQWGLUHFWO\UDWKHUWKDQLQGLUHFWO\E\PRYLQJDVFUROOEDURUDSDQQHU7\SLFDOO\WKHPRXVHSRLQWHUFKDQJHVLQWRDKDQGRUDFURVVRIIRXUDUURZVWRLQGLFDWHWKDWWKHXVHUFDQGUDJWKHFRQWHQWDURXQGZLWKWKHPRXVH6RPHWLPHVWKHXVHUQHHGVWRH[SOLFLWO\DFWLYDWHWKHPRYHPRGHDQGLQWKDWFDVHKHRIWHQFDQXVHERWKGUDJJLQJZLWKWKHPRXVHDQGNH\HYHQWVWRPRYHWKHFRQWHQW
PDUTXHH7KHPDUTXHHHIIHFWYDOXHPDUTXHHFRQVLVWVRIWKHFRQWHQWPRYLQJDXWRQRPRXVO\ZLWKRXWDQ\XVHUHYHQWVWRFRQWUROLW$XVHUZKRZDLWVORQJHQRXJKZLOOHYHQWXDOO\VHHDOOWKHFRQWHQWWKDWRYHUIORZV
7KLVVSHFLILFDWLRQGRHVQRWGHILQHZKDWVFUROOEDUVSDQQHUVRUWKHYLVXDOLQGLFDWRUVIRUWKHPRYHPHWKRGORRNOLNH7KHPDUTXHHPHWKRGLVIXUWKHUGHILQHGEHORZ
$QRWKHULGHDLVWRPDNHRYHUIORZDVKRUWKDQGIRURYHUIORZ
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
$QRWKHULGHDLVWRPDNHRYHUIORZDVKRUWKDQGIRURYHUIORZVW\OHDQGRYHUIORZSROLF\ZKHUHRYHUIORZSROLF\KDVV\QWD[YLVLEOH_KLGGHQ_VFUROO_DXWRDQGRYHUIORZKDVRYHUIORZSROLF\!__RYHUIORZVW\OH!7KHQLWLVSRVVLEOHWRZULWHHJRYHUIORZDXWRPDUTXHHVFUROOEDU
:HZLOOSUREDEO\ZDQWWRLQWURGXFHRYHUIORZ[DQGRYHUIORZ\LQ&66WRVHSDUDWHWKHSROLF\LQWKHWZRGLUHFWLRQV,QWKDWFDVHZHPD\ZDQW
RYHUIORZVW\OH[DXWR_>VFUROOEDU_SDQQHU_PRYH_PDUTXHH@>@RYHUIORZVW\OH\GLWWRRYHUIORZSROLF\[YLVLEOH_KLGGHQ_VFUROO_DXWRRYHUIORZSROLF\\GLWWRRYHUIORZ[RYHUIORZVW\OH[!__RYHUIORZSROLF\[!RYHUIORZ\GLWWRRYHUIORZRYHUIORZ[!
RYHUIORZLVWKHQDVKRUWKDQGWKDWVHWV[DQG\WRWKHVDPHYDOXHRYHUIORZDXWRLVDPELJXRXVDVLVRYHUIORZDXWRDXWREXWLWGRHVQWPDWWHU
7KHPDUTXHHSURSHUWLHV
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
7KHIROORZLQJUXOHVSXWWKHFRQWHQWVRIHDFKOLVWLWHPRQDVLQJOHOLQHXQOHVVLWKDVKDUGOLQHEUHDNVDQGFDXVHVWKHOLVWLWHPVWKDWDUHWRRZLGHWRXVHDPDUTXHHHIIHFWRQ8$VWKDWVXSSRUWPDUTXHH
([DPSOH;;,
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
1DPH PDUTXHHVW\OH9DOXH VFUROO_VOLGH_DOWHUQDWH,QLWLDO VFUROO$SSOLHVWR VDPHDVRYHUIORZ,QKHULWHG QR3HUFHQWDJHV 1$0HGLD YLVXDO&RPSXWHGYDOXH DVVSHFLILHG
7KHYDOXHVDUH
scroll6WDUWFRPSOHWHO\RIIRQHVLGHVFUROODOOWKHZD\DFURVVDQGFRPSOHWHO\RII
slide6WDUWFRPSOHWHO\RIIRQHVLGHVFUROOLQDQGVWRSDVVRRQDVQRPRUHFRQWHQWLVRIIWKDWVLGH
alternate6WDUWZLWKDOORYHUIORZRQRQHVLGHWKHQVFUROOXQWLOWKHUHLVQRPRUHRYHUIORZRQWKDWVLGH)RUWKHQH[WORRSVWDUWZLWKFRQWHQWRYHUIORZLQJRQWKHRWKHUVLGHLHZKHUHWKHSUHYLRXVORRSHQGHG
,VERXQFHDEHWWHUQDPHWKDQDOWHUQDWH"7KHFRQWHQWRIDQHOHPHQWPRYHVDVRQHSLHFH(JLID
HOHPHQWKDVWZROLQHVRIWH[WERWKOLQHVVFUROOWRJHWKHUHYHQLIRQO\RQHRIWKHPRYHUIORZV
1DPH PDUTXHHORRS9DOXH QRQQHJDWLYHLQWHJHU!_LQILQLWH,QLWLDO $SSOLHVWR VDPHDVRYHUIORZ,QKHULWHG QR3HUFHQWDJHV 1$0HGLD YLVXDO&RPSXWHGYDOXH DVVSHFLILHG
7KLVSURSHUW\VSHFLILHVKRZRIWHQWKHFRQWHQWPRYHV8$VVKRXOGUHVWDUWWKHORRSFRXQWHYHU\WLPHWKHHOHPHQWWXUQVIURPFRPSOHWHO\LQYLVLEOHLQWRIXOO\RUSDUWLDOO\YLVLEOH(JDQHOHPHQWWKDWLVRXWVLGHWKHYLHZSRUWVWDUWVPRYLQJZKHQLWLVVFUROOHGLQWRYLHZ
$8$PD\DOVRWDNHWKHYLVLELOLW\RIWKH8$YLHZSRUWLWVHOILQWRDFFRXQWHJLIWKHHOHPHQWLVKLGGHQEHKLQGDSRSXS
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
LQWRDFFRXQWHJLIWKHHOHPHQWLVKLGGHQEHKLQGDSRSXSZLQGRZRULIWKH8$LVLFRQLILHG
,IPDUTXHHORRSLVGLIIHUHQWIRUGLIIHUHQWVWDWHVRIWKHHOHPHQWHJS^PDUTXHHORRS`SKRYHU^PDUTXHHORRSLQILQLWH`WKHORRSFRXQWHUPXVWEHUHVHWHDFKWLPHWKHHOHPHQWHQWHUVDVWDWHZLWKDGLIIHUHQWFRPSXWHGYDOXH
,VLQILQLWHDEHWWHUGHIDXOWWKDQ"
1DPH PDUTXHHGLUHFWLRQ9DOXH IRUZDUG_UHYHUVH,QLWLDO UHYHUVH$SSOLHVWR VDPHDVRYHUIORZ,QKHULWHG \HV3HUFHQWDJHV 1$0HGLD YLVXDO&RPSXWHGYDOXH OWURUUWO
7KLVSURSHUW\GHWHUPLQHVWKHLQLWLDOGLUHFWLRQLQZKLFKWKHFRQWHQWPRYHVLIWKHPDUTXHHHIIHFWLVXVHG7KHDFWXDOGLUHFWLRQGHSHQGVRQGLUHFWLRQDQGEORFNSURJUHVVLRQDVIROORZV
UHYHUVH IRUZDUG
WEOWU OHIW ULJKW
UWO ULJKW OHIW
UOOUOWU XS GRZQ
UWO GRZQ XS
1RWHWKDWPDUTXHHVW\OHDOWHUQDWHPRYHVFRQWHQWLQWKHRSSRVLWHGLUHFWLRQRQHYHQQXPEHUHGORRSV
1RWHWKDWUHYHUVHDOORZVWH[WWREHUHDGLQWKHQRUPDORUGHU(JLQ(QJOLVKWH[WEORFNSURJUHVVLRQWEDQGGLUHFWLRQOWU
)RUH[DPSOHLIWKHFRQWHQWRIDQOLRYHUIORZVXQGHUWKHIROORZLQJVW\OHUXOHVWKHFRQWHQWPRYHVRQFHZKHQWKHOLJHWVWKHIRFXVRULVKRYHUHGRYHU%XWZKHQLWDOUHDG\KDVWKHIRFXVZKHQLWLVKRYHUHGRYHUWKHPDUTXHHORRSSURSHUW\GRHVQWFKDQJHDQGWKXVWKHFRQWHQWGRHVQWPRYHDJDLQ
([DPSOH;;,,
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
(JLQ(QJOLVKWH[WEORFNSURJUHVVLRQWEDQGGLUHFWLRQOWUWH[WDSSHDUVDWWKHULJKWHGJHPRYHVWRWKHOHIWDQGGLVDSSHDUVDWWKHOHIWHGJH
1DPH PDUTXHHVSHHG9DOXH VORZ_QRUPDO_IDVW,QLWLDO QRUPDO$SSOLHVWR VDPHDVRYHUIORZ,QKHULWHG QR3HUFHQWDJHV 1$0HGLD YLVXDO&RPSXWHGYDOXH DVVSHFLILHG
7KLVSURSHUW\GHWHUPLQHVKRZIDVWWKHFRQWHQWVFUROOV7KHDFWXDOVSHHGGHSHQGVRQWKH8$DQGWKHW\SHRIFRQWHQW%XWIRUDJLYHQ8$DQGDJLYHQHOHPHQWWKHIROORZLQJPXVWDOZD\VEHWUXHVORZQRUPDOIDVW
7KHYLVLELOLW\SURSHUW\
1DPH YLVLELOLW\9DOXH YLVLEOH_KLGGHQ_FROODSVH,QLWLDO YLVLEOH$SSOLHVWR DOOHOHPHQWV,QKHULWHG \HV3HUFHQWDJHV 1$0HGLD YLVXDO&RPSXWHGYDOXH DVVSHFLILHG
7KLVSURSHUW\VSHFLILHVZKHWKHUWKHER[HVJHQHUDWHGE\DQHOHPHQWDUHUHQGHUHG,QYLVLEOHER[HVVWLOODIIHFWOD\RXWVHWWKHGLVSOD\SURSHUW\WRQRQHWRVXSSUHVVER[JHQHUDWLRQDOWRJHWKHU9DOXHVKDYHWKHIROORZLQJPHDQLQJV
visible7KHJHQHUDWHGER[LVYLVLEOH
hidden7KHJHQHUDWHGER[LVLQYLVLEOHIXOO\WUDQVSDUHQWQRWKLQJLVGUDZQEXWVWLOODIIHFWVOD\RXW)XUWKHUPRUHGHVFHQGDQWVRIWKHHOHPHQWZLOOEHYLVLEOHLIWKH\KDYHYLVLELOLW\YLVLEOH
collapse6HHWKH7DEOHVPRGXOH>&667%/@,IXVHGRQHOHPHQWVRWKHUWKDQURZVURZJURXSVFROXPQVRUFROXPQJURXSVFROODSVHKDVWKHVDPHPHDQLQJDVKLGGHQ
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
FROODSVHKDVWKHVDPHPHDQLQJDVKLGGHQ
5RWDWLQJER[HV6KRXOGSUREDEO\EHLQWKHH[WHQGHG%R[PRGXOHLQVWHDGRIKHUH
1DPH URWDWLRQ9DOXH DQJOH!,QLWLDO $SSOLHVWR EORFNOHYHOHOHPHQWVLQOLQHWDEOHDQG
LQOLQHEORFN,QKHULWHG QR3HUFHQWDJHV 1$0HGLD YLVXDO&RPSXWHGYDOXH GHJDQJOHGHJ
1DPH URWDWLRQSRLQW9DOXH EJSRVLWLRQ!,QLWLDO $SSOLHVWR EORFNOHYHOHOHPHQWV,QKHULWHG QR3HUFHQWDJHV :LGWKDQGKHLJKWRIERUGHUER[0HGLD YLVXDO&RPSXWHGYDOXH IRUOHQJWK!WKHDEVROXWHYDOXHRWKHUZLVH
DSHUFHQWDJH
7KHYDOXHRIURWDWLRQSRLQWLVDSDLURIYDOXHVWKDWGHILQHVDSRLQWDVDQRIIVHWIURPWKHWRSOHIWERUGHUHGJH3HUFHQWDJHVUHIHUWRWKHZLGWKDQGKHLJKWRIWKHERUGHUER[9DOXHVPD\EHQHJDWLYH
5RWDWLRQURWDWHVDEORFNOHYHOHOHPHQWFRXQWHUFORFNZLVHDURXQGWKHSRLQWJLYHQE\URWDWLRQSRLQW7KHERUGHUSDGGLQJDQGFRQWHQWDUHURWDWHGDQGDOVRDQ\EDFNJURXQGWKDWLVQRWIL[HG$OOVWDWLFRUUHODWLYHO\SRVLWLRQHGFKLOGHOHPHQWVDQGWKHLUVWDWLFDQGUHODWLYHO\SRVLWLRQHGFKLOGUHQUHFXUVLYHO\DUHURWDWHGDORQJ%XWDEVROXWHO\SRVLWLRQHGDQGIL[HGGHVFHQGDQWHOHPHQWVDUHQRW
1RWHWKDWWKLVPHDQVWKDWURWDWLRQLVUHODWLYH$FKLOGRIDER[WKDWLVURWDWHGGHJDQGWKDWKDVDURWDWLRQRIGHJLWVHOIDFWXDOO\HQGVXSKRUL]RQWDOEXWSUREDEO\LQDGLIIHUHQWORFDWLRQWKDQZKHQERWKURWDWLRQVKDGEHHQ
5RWDWLRQGRHVQWDIIHFWSDUHQWRUVLEOLQJHOHPHQWVWKH\DUH
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
ODLGRXWDVLIWKHHOHPHQWVURWDWLRQZDV&RQFHSWXDOO\WKHHOHPHQWLVILUVWODLGRXWZLWKRXWDQ\URWDWLRQWKHQDQ\UHODWLYHSRVLWLRQLQJLVDSSOLHGWRLWVHH>&66326@DQGILQDOO\DQ\URWDWLRQ7KHURWDWLRQSRLQWLVUHODWLYHWRWKHER[DIWHUUHODWLYHSRVLWLRQLQJ
1RWHWKDWOLNHUHODWLYHSRVLWLRQLQJURWDWLRQFDQWKXVFDXVHDQHOHPHQWVER[WRRYHUODSRWKHUER[HV,WLVWKHDXWKRUVUHVSRQVLELOLW\WRJLYHWKHHOHPHQWZLGHHQRXJKPDUJLQVLIVXFKRYHUODSSLQJLVQRWGHVLUHG
:KHQDER[LVEURNHQRYHUVHYHUDOFROXPQVRUSDJHVHDFKRIWKHER[HVLVURWDWHGVHSDUDWHO\DURXQGLWVRZQURWDWLRQSRLQW
7KHFRPSXWHGYDOXHRIURWDWLRQLVWKHDQJOHQRUPDOL]HGWRIDOOLQGHJDQJOHGHJ7KHFRPSXWHGYDOXHRUURWDWLRQSRLQWLVDSDLULQZKLFKDQ\OHQJWK!LVPDGHDEVROXWHNH\ZRUGVDUHUHSODFHGE\SHUFHQWDJHVDQGSHUFHQWDJHVDUHOHIWDVVSHFLILHG
7KLVH[DPSOHSXWV+HOHPHQWVXSVLGHGRZQ,WUHOLHVRQWKHURWDWLRQSRLQWKDYLQJLWVGHIDXOWYDOXHRI
([DPSOH;;,,,
7KLVH[DPSOHGLVSOD\VFROXPQKHDGHUVLQDWDEOHGLDJRQDOO\,WXVHVEORFNSURJUHVVLRQVHH>&667(;7/$
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
,QWKHWDEOHH[DPSOHKRZDUHWKHERUGHUVURWDWHG"%HFDXVHWKHERUGHUVEHORQJWRWZRHOHPHQWVWKDWDUHURWDWHGLQGLYLGXDOO\
'DYH+\DWWSURSRVHVWRJHQHUDOL]HWKHSURSHUW\DQGFDOOLWWUDQVIRUPZLWKDV\QWD[DQGIXQFWLRQDOLW\OLNHLQ69*LHDSURSHUW\WKDWDFFHSWVDVHULHVRIWUDQVIRUPDWLRQVURWDWLRQVWUDQVODWLRQVDUELWUDU\DIILQHWUDQVIRUPDWLRQV
6WDFNLQJFRQWH[WV7KLVVHFWLRQGHILQHVWKHSDLQWLQJRUGHULQPRUHGHWDLOWKDQGHVFULEHGLQWKHUHVWRIWKHVSHFLILFDWLRQ
'HILQLWLRQV
7UHH2UGHU3UHRUGHUGHSWKILUVWWUDYHUVDORIWKHUHQGHULQJWUHHLQORJLFDOQRWYLVXDORUGHUIRUELGLUHFWLRQDOFRQWHQWDIWHUWDNLQJLQWRDFFRXQWSURSHUWLHVWKDWPRYHER[HVDURXQGVXFKDVWKHUXQLQYDOXHRIGLVSOD\
(OHPHQW,QWKLVVHFWLRQHOHPHQWUHIHUVWRDFWXDOHOHPHQWVSVHXGRHOHPHQWVDQGDQRQ\PRXVER[HV3VHXGRHOHPHQWVDQGDQRQ\PRXVER[HVDUHWUHDWHGDVGHVFHQGDQWVLQWKHDSSURSULDWHSODFHV)RUH[DPSOHDQRXWVLGHOLVWPDUNHUFRPHVEHIRUHDQDGMRLQLQJEHIRUHER[LQWKHOLQHER[ZKLFKFRPHVEHIRUHWKHFRQWHQWRIWKHER[DQGVRIRUWK
7KHERWWRPRIWKHVWDFNLVWKHIXUWKHVWIURPWKHXVHUWKHWRSRIWKHVWDFNLVWKHQHDUHVWWRWKHXVHU
KHDGLQJV
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
)LJXUH6FKHPDWLFGLDJUDPRIDVWDFNLQJFRQWH[WZLWKIRXUOD\HUV
7KHVWDFNLQJFRQWH[WEDFNJURXQGDQGPRVWQHJDWLYHSRVLWLRQHGVWDFNLQJFRQWH[WVDUHDWWKHERWWRPRIWKHVWDFNZKLOHWKHPRVWSRVLWLYHSRVLWLRQHGVWDFNLQJFRQWH[WVDUHDWWKHWRSRIWKHVWDFN
7KHFDQYDVLVWUDQVSDUHQWLIFRQWDLQHGZLWKLQDQRWKHUDQGJLYHQD8$GHILQHGFRORULILWLVQRW,WLVLQILQLWHLQH[WHQWDQGFRQWDLQVWKHURRWHOHPHQW,QLWLDOO\WKHYLHZSRUWLVDQFKRUHGZLWKLWVWRSOHIWFRUQHUDWWKHFDQYDVRULJLQ
7KHVWDFNLQJRUGHUIRUDQHOHPHQWJHQHUDWLQJDVWDFNLQJFRQWH[WVHHWKH]LQGH[SURSHUW\LV
,IWKHHOHPHQWLVDURRWHOHPHQW EDFNJURXQGFRORURIHOHPHQWRYHUWKHHQWLUHFDQYDV EDFNJURXQGLPDJHRIHOHPHQWRYHUWKHHQWLUHFDQYDV
DQFKRUHGDWWKHRULJLQWKDWZRXOGEHXVHGLILWZDVSDLQWHGIRUWKHURRWHOHPHQW
,IWKHHOHPHQWLVDEORFNOLVWLWHPRURWKHUEORFNHTXLYDOHQW EDFNJURXQGFRORURIHOHPHQWXQOHVVLWLVWKHURRW
HOHPHQW EDFNJURXQGLPDJHRIHOHPHQWXQOHVVLWLVWKHURRW
HOHPHQW ERUGHURIHOHPHQW
2WKHUZLVHLIWKHHOHPHQWLVDEORFNOHYHOWDEOH WDEOHEDFNJURXQGVFRORUWKHQLPDJHXQOHVVLWLVWKH
URRWHOHPHQW FROXPQJURXSEDFNJURXQGVFRORUWKHQLPDJH FROXPQEDFNJURXQGVFRORUWKHQLPDJH URZJURXSEDFNJURXQGVFRORUWKHQLPDJH URZEDFNJURXQGVFRORUWKHQLPDJH FHOOEDFNJURXQGVFRORUWKHQLPDJH DOOWDEOHERUGHUVLQWUHHRUGHUIRUVHSDUDWHGERUGHUV
6WDFNLQJFRQWH[WVIRUPHGE\SRVLWLRQHGGHVFHQGDQWVZLWKQHJDWLYH]LQGLFHVH[FOXGLQJLQ]LQGH[RUGHUPRVWQHJDWLYHILUVWWKHQWUHHRUGHU
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
QHJDWLYHILUVWWKHQWUHHRUGHU )RUDOOLWVLQIORZQRQSRVLWLRQHGEORFNOHYHOGHVFHQGDQWV
LQWUHHRUGHU,IWKHHOHPHQWLVDEORFNOLVWLWHPRURWKHUEORFNHTXLYDOHQW EDFNJURXQGFRORURIHOHPHQW EDFNJURXQGLPDJHRIHOHPHQW ERUGHURIHOHPHQW
2WKHUZLVHWKHHOHPHQWLVDWDEOH WDEOHEDFNJURXQGVFRORUWKHQLPDJH FROXPQJURXSEDFNJURXQGVFRORUWKHQLPDJH FROXPQEDFNJURXQGVFRORUWKHQLPDJH URZJURXSEDFNJURXQGVFRORUWKHQLPDJH URZEDFNJURXQGVFRORUWKHQLPDJH FHOOEDFNJURXQGVFRORUWKHQLPDJH DOOWDEOHERUGHUVLQWUHHRUGHUIRUVHSDUDWHGERUGHUV
$OOQRQSRVLWLRQHGIORDWLQJGHVFHQGDQWVLQWUHHRUGHU)RUHDFKRQHRIWKHVHWUHDWWKHHOHPHQWDVLILWFUHDWHGDQHZVWDFNLQJFRQWH[WEXWDQ\GHVFHQGDQWVZKLFKDFWXDOO\FUHDWHDQHZVWDFNLQJFRQWH[WVKRXOGEHFRQVLGHUHGSDUWRIWKHSDUHQWVWDFNLQJFRQWH[WQRWWKLVQHZRQH
,IWKHHOHPHQWLVDQLQOLQHHOHPHQWWKDWJHQHUDWHVDVWDFNLQJFRQWH[WWKHQ )RUHDFKOLQHER[WKDWWKHHOHPHQWLVLQ
-XPSWRIRUWKHER[HVRIWKHHOHPHQWLQWKDWOLQHER[LQWUHHRUGHU
2WKHUZLVHILUVWIRUWKHHOHPHQWWKHQIRUDOOLWVLQIORZQRQSRVLWLRQHGEORFNOHYHOGHVFHQGDQWVLQWUHHRUGHU ,IWKHHOHPHQWLVDEORFNOHYHOUHSODFHGHOHPHQWWKHQ
WKHUHSODFHGFRQWHQWDWRPLFDOO\ 2WKHUZLVHIRUHDFKOLQHER[RIWKDWHOHPHQW
)RUHDFKER[WKDWLVDFKLOGRIWKDWHOHPHQWLQWKDWOLQHER[LQWUHHRUGHU EDFNJURXQGFRORURIHOHPHQW EDFNJURXQGLPDJHRIHOHPHQW ERUGHURIHOHPHQW )RULQOLQHHOHPHQWV
)RUDOOWKHHOHPHQWVLQIORZQRQSRVLWLRQHGLQOLQHOHYHOFKLOGUHQWKDWDUHLQWKLVOLQHER[DQGDOOUXQVRIWH[WLQVLGHWKHHOHPHQWWKDWLVRQWKLVOLQHER[LQWUHHRUGHU ,IWKLVLVDUXQRIWH[WWKHQ
DQ\XQGHUOLQLQJDIIHFWLQJWKHWH[WRIWKHHOHPHQWLQWUHHRUGHURIWKHHOHPHQWVDSSO\LQJ
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
RUGHURIWKHHOHPHQWVDSSO\LQJWKHXQGHUOLQLQJVXFKWKDWWKHGHHSHVWHOHPHQWVXQGHUOLQLQJLIDQ\LVSDLQWHGWRSPRVWDQGWKHURRWHOHPHQWVXQGHUOLQLQJLIDQ\LVGUDZQERWWRPPRVW
DQ\RYHUOLQLQJDIIHFWLQJWKHWH[WRIWKHHOHPHQWLQWUHHRUGHURIWKHHOHPHQWVDSSO\LQJWKHRYHUOLQLQJVXFKWKDWWKHGHHSHVWHOHPHQWVRYHUOLQLQJLIDQ\LVSDLQWHGWRSPRVWDQGWKHURRWHOHPHQWVRYHUOLQLQJLIDQ\LVGUDZQERWWRPPRVW
WKHWH[W DQ\OLQHWKURXJKDIIHFWLQJWKH
WH[WRIWKHHOHPHQWLQWUHHRUGHURIWKHHOHPHQWVDSSO\LQJWKHOLQHWKURXJKVXFKWKDWWKHGHHSHVWHOHPHQWVOLQHWKURXJKLIDQ\LVSDLQWHGWRSPRVWDQGWKHURRWHOHPHQWVOLQHWKURXJKLIDQ\LVGUDZQERWWRPPRVW
2WKHUZLVHMXPSWRIRUWKDWHOHPHQW
)RULQOLQHEORFNDQGLQOLQHWDEOHHOHPHQWV )RUHDFKRQHRIWKHVHWUHDWWKHHOHPHQW
DVLILWFUHDWHGDQHZVWDFNLQJFRQWH[WEXWDQ\GHVFHQGDQWVZKLFKDFWXDOO\FUHDWHDQHZVWDFNLQJFRQWH[WVKRXOGEHFRQVLGHUHGSDUWRIWKHSDUHQWVWDFNLQJFRQWH[WQRWWKLVQHZRQH
)RULQOLQHOHYHOUHSODFHGHOHPHQWV WKHUHSODFHGFRQWHQWDWRPLFDOO\
6RPHRIWKHER[HVPD\KDYHEHHQJHQHUDWHGE\OLQHVSOLWWLQJRUWKH8QLFRGHELGLUHFWLRQDODOJRULWKP
2SWLRQDOO\WKHRXWOLQHRIWKHHOHPHQWVHHEHORZ
2SWLRQDOO\LIWKHHOHPHQWLVEORFNOHYHOWKHRXWOLQHRIWKHHOHPHQWVHHEHORZ
$OOSRVLWLRQHGGHVFHQGDQWVZLWK]LQGH[DXWRRU]LQGH[LQWUHHRUGHU)RUWKRVHZLWK]LQGH[DXWRWUHDWWKHHOHPHQWDVLILWFUHDWHGDQHZVWDFNLQJFRQWH[WEXWDQ\GHVFHQGDQWVZKLFKDFWXDOO\FUHDWHDQHZVWDFNLQJFRQWH[W
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
GHVFHQGDQWVZKLFKDFWXDOO\FUHDWHDQHZVWDFNLQJFRQWH[WVKRXOGEHFRQVLGHUHGSDUWRIWKHSDUHQWVWDFNLQJFRQWH[WQRWWKLVQHZRQH)RUWKRVHZLWK]LQGH[WUHDWWKHVWDFNLQJFRQWH[WJHQHUDWHGDWRPLFDOO\
6WDFNLQJFRQWH[WVIRUPHGE\SRVLWLRQHGGHVFHQGDQWVZLWK]LQGLFHVJUHDWHUWKDQRUHTXDOWRLQ]LQGH[RUGHUVPDOOHVWILUVWWKHQWUHHRUGHU
)LQDOO\LPSOHPHQWDWLRQVWKDWGRQRWGUDZRXWOLQHVLQVWHSVDERYHPXVWGUDZRXWOLQHVIURPWKLVVWDFNLQJFRQWH[WDWWKLVVWDJH,WLVUHFRPPHQGHGWRGUDZRXWOLQHVLQWKLVVWHSDQGQRWLQWKHVWHSVDERYH
7KHEDFNJURXQGRIWKHURRWHOHPHQWLVRQO\SDLQWHGRQFHRYHUWKHZKROHFDQYDV
:KLOHWKHEDFNJURXQGVRIELGLUHFWLRQDOLQOLQHVDUHSDLQWHGLQWUHHRUGHUWKH\DUHSRVLWLRQHGLQYLVXDORUGHU6LQFHWKHSRVLWLRQLQJRILQOLQHEDFNJURXQGVLVXQVSHFLILHG>VWLOOWKHFDVH"@WKHH[DFWUHVXOWRIWKHVHWZRUHTXLUHPHQWVLV8$GHILQHG
&RQIRUPDQFHDQGSURILOHV
$FNQRZOHGJPHQWV
5HIHUHQFHV1RUPDWLYHUHIHUHQFHV
>&66%*@7LP%RODQG%HUW%RV&66%DFNJURXQGVDQG%RUGHUV0RGXOH)HEUXDU\:&:RUNLQJ'UDIW:RUNLQSURJUHVV85/KWWSZZZZRUJ75:'FVVEDFNJURXQG
>&66*(1&21@,DQ+LFNVRQ&66*HQHUDWHGDQG5HSODFHG&RQWHQW0RGXOH0D\:&:RUNLQJ'UDIW:RUNLQSURJUHVV85/KWWSZZZZRUJ75:'FVVFRQWHQW
>&666
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
:&:RUNLQJ'UDIW:RUNLQSURJUHVV85/KWWSZZZZRUJ75:'FVVV\QWD[
>&667(;7@(OLND-(WHPDG&667H[W0RGXOH-XQH:&:RUNLQJ'UDIW:RUNLQSURJUHVV85/KWWSZZZZRUJ75:'FVVWH[W
>&667(;7/$&66*&30@+nNRQ:LXP/LH&66*HQHUDWHG&RQWHQWIRU3DJHG0HGLD0RGXOH6HSWHPEHU:&:RUNLQJ'UDIW:RUNLQSURJUHVV85/KWWSZZZZRUJ75:'FVVJFSP
>&66/$
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
%HUW%RV&663RVLWLRQLQJ0RGXOHIRUWKFRPLQJ:&:RUNLQJ'UDIW:RUNLQSURJUHVV
>&6658%&667%/@%HUW%RV'DYLG+\DWW&667DEOHV0RGXOHIRUWKFRPLQJ:&:RUNLQJ'UDIW:RUNLQSURJUHVV
>0(',$4@+nNRQ:LXP/LH7DQWHNdHOLN'DQLHO*OD]PDQ0HGLD4XHULHV-XO\:&&DQGLGDWH5HFRPPHQGDWLRQ:RUNLQSURJUHVV85/KWWSZZZZRUJ75&5FVVPHGLDTXHULHV
,QGH[DOWHUQDWHDQRQ\PRXVER[DXWRYDOXHRIRYHUIORZ
EDFNJURXQGSRVLWLRQEORFNEORFNOHYHOEORFNSURJUHVVLRQERUGHUERUGHUDUHDERUGHUERWWRPZLGWKERUGHUHGJHERUGHUOHIWZLGWKERUGHUULJKWZLGWKERUGHUWRSZLGWKERWWRPFDQYDVFOHDUFROODSVHFROODSVHGWKURXJKFRPSDFWFRPSXWHGYDOXHFRQWDLQLQJEORFNFRQWHQWDUHDFRQWHQWHGJHGLUHFWLRQGLVSOD\
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
GLVSOD\HOHPHQWIORDWIORZIORZURRWKHLJKWKLGGHQKRUL]RQWDOLPDJHVFDOLQJLQLWLDOFRQWDLQLQJEORFNLQOLQHLQOLQHEORFNLQOLQHOHYHOLQOLQHWDEOHLQWULQVLFOHIWOLQHER[OLVWLWHPPDUJLQPDUJLQDUHDPDUJLQERWWRPPDUJLQHGJHPDUJLQOHIWPDUJLQULJKWPDUJLQWRSPDUTXHHGLUHFWLRQPDUTXHHORRSPDUTXHHVSHHGPDUTXHHVW\OHPD[KHLJKWPD[ZLGWKPLQKHLJKWPLQZLGWKQRFRQWHQWQRGLVSOD\QRQHQRUPDOIORZRYHUIORZRYHUIORZVW\OHRYHUIORZ[RYHUIORZ\SDGGLQJSDGGLQJDUHDSDGGLQJERWWRPSDGGLQJHGJH
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
SDGGLQJHGJHSDGGLQJOHIWSDGGLQJULJKWSDGGLQJWRSSRVLWLRQUHSODFHGULJKWURRWHOHPHQWURWDWLRQURWDWLRQSRLQWUXE\UXE\EDVHUXE\EDVHJURXSUXE\WH[WUXE\WH[WJURXSUXQLQVFUROOVFUROOLQJPHFKDQLVPVFUROOPDUTXHHVW\OHVKULQNWRILWVOLGHVWDWLFSRVLWLRQWDEOHWDEOHFDSWLRQWDEOHFHOOWDEOHFROXPQWDEOHFROXPQJURXSWDEOHIRRWHUJURXSWDEOHKHDGHUJURXSWDEOHURZWDEOHURZJURXSWRSXVHGYDOXHDQJOH!EJSRVLWLRQ!OHQJWK!QXPEHU!SDJHIORDWV!WHPSODWH!YHUWLFDOYLHZSRUWYLVLELOLW\YLVLEOHZLGWK]LQGH[
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
]LQGH[
3URSHUW\LQGH[
3URSHUW\ 9DOXHV ,QLWLDO $SSOLHVWR ,QK 3HUFHQWDJHV 0HGLD
FOHDU QRQH_OHIW_ULJKW_ERWK
QRQH EORFNOHYHOHOHPHQWV
QR 1$ YLVXDO
GLVSOD\ LQOLQH_EORFN_LQOLQHEORFN_OLVWLWHP_UXQLQ_FRPSDFW_WDEOH_LQOLQHWDEOH_WDEOHURZJURXS_WDEOHKHDGHUJURXS_WDEOHIRRWHUJURXS_WDEOHURZ_WDEOHFROXPQJURXS_WDEOHFROXPQ_WDEOHFHOO_WDEOHFDSWLRQ_UXE\_UXE\EDVH_UXE\WH[W_UXE\EDVHJURXS_UXE\WH[WJURXS_WHPSODWH!_QRQH
LQOLQH DOOHOHPHQWV
QR 1$ YLVXDOQRQHDSSOLHVWRDOOPHGLD
IORDW OHIW_ULJKW_QRQH_SDJHIORDWV!
QRQH DOOEXWVHH
QR 1$ YLVXDO
KHLJKW OHQJWK!_SHUFHQWDJH!_DXWR
DXWR DOOHOHPHQWVEXWQRQUHSODFHGLQOLQHHOHPHQWVWDEOHFROXPQVDQGFROXPQJURXSV
QR VHHSURVH YLVXDO
PDUJLQ >OHQJWK!_SHUFHQWDJH!_DXWR@^`
VHHLQGLYLGXDOSURSHUWLHV
VHHWH[W QR ZLGWKRIFRQWDLQLQJEORFN
YLVXDO
PDUJLQ OHQJWK!_ VHHWH[W QR ZLGWKRI YLVXDO
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
PDUJLQWRSPDUJLQULJKWPDUJLQERWWRPPDUJLQOHIW
OHQJWK!_SHUFHQWDJH!_DXWR
VHHWH[W QR ZLGWKRIFRQWDLQLQJEORFN
YLVXDO
PDUTXHHGLUHFWLRQ
IRUZDUG_UHYHUVH
UHYHUVH VDPHDVRYHUIORZ
\HV 1$ YLVXDO
PDUTXHHORRS
QRQQHJDWLYHLQWHJHU!_LQILQLWH
VDPHDVRYHUIORZ
QR 1$ YLVXDO
PDUTXHHVSHHG
VORZ_QRUPDO_IDVW
QRUPDO VDPHDVRYHUIORZ
QR 1$ YLVXDO
PDUTXHHVW\OH
VFUROO_VOLGH_DOWHUQDWH
VFUROO VDPHDVRYHUIORZ
QR 1$ YLVXDO
PD[ZLGWKPD[KHLJKW
OHQJWK!_SHUFHQWDJH!_QRQH
QRQH DOOHOHPHQWVEXWQRQUHSODFHGLQOLQHHOHPHQWVWDEOHURZVDQGURZJURXSV
QR UHIHUWRZLGWKUHVSKHLJKWRIFRQWDLQLQJEORFN
YLVXDO
PLQZLGWKPLQKHLJKW
OHQJWK!_SHUFHQWDJH!_LQKHULW
DOOHOHPHQWVEXWQRQUHSODFHGLQOLQHHOHPHQWVWDEOHURZVDQGURZJURXSV
QR UHIHUWRZLGWKUHVSKHLJKWRIFRQWDLQLQJEORFN
YLVXDO
RYHUIORZ >YLVLEOH_KLGGHQ_VFUROO_DXWR_QRGLVSOD\_QRFRQWHQW@^`
VHHLQGLYLGXDOSURSHUWLHV
QRQUHSODFHGEORFNOHYHOHOHPHQWVDQGQRQUHSODFHGLQOLQHEORFNHOHPHQWV
QR 1$ YLVXDO
RYHUIORZVW\OH
DXWR_>VFUROOEDU_SDQQHU_PRYH_PDUTXHH@>>VFUROOEDU_
DXWR VDPHDVRYHUIORZ
\HV 1$ YLVXDO
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
>VFUROOEDU_SDQQHU_PRYH_PDUTXHH@@
RYHUIORZ[RYHUIORZ\
YLVLEOH_KLGGHQ_VFUROO_DXWR_QRGLVSOD\_QRFRQWHQW
YLVLEOH QRQUHSODFHGEORFNOHYHOHOHPHQWVDQGQRQUHSODFHGLQOLQHEORFNHOHPHQWV
QR 1$ YLVXDO
SDGGLQJ >OHQJWK!_SHUFHQWDJH!@^`
VHHLQGLYLGXDOSURSHUWLHV
DOOHOHPHQWV
QR ZLGWKRIFRQWDLQLQJEORFN
YLVXDO
SDGGLQJWRSSDGGLQJULJKWSDGGLQJERWWRPSDGGLQJOHIW
>OHQJWK!_SHUFHQWDJH!@
DOOHOHPHQWV
QR ZLGWKRIFRQWDLQLQJEORFN
YLVXDO
URWDWLRQ DQJOH! EORFNOHYHOHOHPHQWVLQOLQHWDEOHDQGLQOLQHEORFN
QR 1$ YLVXDO
URWDWLRQSRLQW
EJSRVLWLRQ! EORFNOHYHOHOHPHQWV
QR :LGWKDQGKHLJKWRIERUGHUER[
YLVXDO
YLVLELOLW\ YLVLEOH_KLGGHQ_FROODSVH
YLVLEOH DOOHOHPHQWV
\HV 1$ YLVXDO
ZLGWK OHQJWK!_SHUFHQWDJH!_DXWR
DXWR DOOHOHPHQWVEXWQRQUHSODFHGLQOLQHHOHPHQWVWDEOHURZVDQGURZJURXSV
QR UHIHUWRZLGWKRIFRQWDLQLQJEORFN
YLVXDO
3URSHUWLHVGHILQHGHOVHZKHUH
EORFNSURJUHVVLRQGLUHFWLRQ>&667(;7/$
&66EDVLFER[PRGHO
KWWSZZZZRUJ75FVVER[
ERWWRPZLGWKERUGHUOHIWZLGWKEDFNJURXQGSRVLWLRQ>&66%*@ERWWRPWRS]LQGH[>&66326@LPDJHVFDOLQJ>&663$*(@SRVLWLRQ>&66326@DQG>&66/$