,17(51$7,21$/7+(50218&/($5(;3(5,0(17$/5($&725
,7(5('$1(:6/(77(5
92/1R )(%58$5<
,17(51$7,21$/$720,&(1(5*<$*(1&<9,(11$$8675,$
,661
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6(9(17+,7(57(&+1,&$/0((7,1*216$)(7<$1'(19,5210(17
E\'UV-5DHGHUDQG&*RUGRQ,7(5-&7*DUFKLQJ-RLQW:RUN6LWH ,QWURGXFWLRQ
$Q LPSRUWDQW IHDWXUH RI WKH ,7(5 GHVLJQ DFWLYLWLHV KDV DOZD\V EHHQ H[WHQVLYH VDIHW\ DQG HQYLURQPHQWDO DVVHVVPHQWV WR HQVXUH WKH DWWUDFWLYHQHVV RI ,7(5 LQ SDUWLFXODU DQG RI IXVLRQ LQ JHQHUDO ,Q DGGLWLRQ WKH GHVLJQLQFOXGLQJDOOVDIHW\DVSHFWVKDVWRDLPDWDIDFLOLW\WKDWFDQEHVLWHGLQDQ\RIWKHVSRQVRULQJ3DUWLHV¶
FRXQWULHVZLWKDPLQLPXPRIVLWHVSHFLILFDGDSWDWLRQV7KHDVVRFLDWHGVDIHW\JXLGHOLQHVIRUWKHSURMHFWKDYH EHHQEDVHGRQLQWHUQDWLRQDOO\UHFRJQL]HGSULQFLSOHVDQGFULWHULDPRVWQRWDEO\,$($UHFRPPHQGDWLRQV7KH FRPSUHKHQVLYHVDIHW\DQGHQYLURQPHQWDODVVHVVPHQWRIWKH,7(5GHVLJQKDVEHHQGRFXPHQWHGLQWKH 1RQ 6LWH6SHFLILF 6DIHW\ 5HSRUW 1665 6XEVHTXHQWO\ VWURQJ HIIRUWV ZHUH PDGH WR HVWDEOLVK ,7(5 RSWLRQV ZLWK PLQLPXP FRVW DQG UHGXFHG GHWDLOHG WHFKQLFDO REMHFWLYHV ZKLFK VWLOO VDWLVI\ WKH RYHUDOO SURJUDPPDWLF REMHFWLYH 7KLV ZRUN UHVXOWHG LQ WKH RXWOLQH GHVLJQ RI D IDFLOLW\ SURYLVLRQDOO\ QDPHG ,7(5 )($7GRFXPHQWHGLQ³7HFKQLFDO%DVLVIRUWKH,7(5)($72XWOLQH'HVLJQ´-DQXDU\,7(5±)($7LV QRZ EHLQJ DVVHVVHG ZLWK UHJDUG WR VDIHW\ DQG HQYLURQPHQWDO LPSDFW DQG WKLV DVVHVVPHQW ZLOO EH GRFXPHQWHGLQD*HQHULF6LWH6DIHW\5HSRUW*665
)URP)HEUXDU\WRWKH6HYHQWK7HFKQLFDO0HHWLQJRQ6DIHW\DQG(QYLURQPHQWZDVKHOGDWWKH
*DUFKLQJ-RLQW:RUN6LWHZKLFKQRZKRVWVWKH6DIHW\(QYLURQPHQWDQG+HDOWK*URXS6(+*RIWKH,7(5 -RLQW &HQWUDO 7HDP $W WKLV PHHWLQJ VDIHW\ H[SHUWV IURP WKH +RPH 7HDPV +7 ZRUNHG ZLWK WKH 6(+*
PHPEHUVWRZDUGVWKHIROORZLQJPDLQREMHFWLYHV
5HYLHZDQGDJUHHPHQWRQWKHFRQWHQWVRI*665
UHYLHZDQGDJUHHPHQWRQWKHWDVNVDQGWKHVFKHGXOHIRUWKHSURGXFWLRQRI*665 UHYLHZ DQG ILQDO VSHFLILFDWLRQ RI WKH GHVLJQ LQIRUPDWLRQ WR EH XVHG DQG RI WKH
DQDO\VHVWREHGRQHIRU*665 ,VVXHVSUHVHQWHGDQGGLVFXVVHG
7KH SDUWLFLSDQWV KHDUG D FRQFLVHSUHVHQWDWLRQRIWKH,7(5)($7FKDUDFWHULVWLFVDQGDUHODWHGWDONRQVLWH OD\RXW DQG EXLOGLQJ GHVLJQ %RWK FRQWULEXWLRQV H[SDQGHG LQ SDUWLFXODU RQ GHVLJQ LVVXHV ZLWK D EHDULQJ RQ VDIHW\ DQG GUHZ XSRQ WKH UHVXOWV IURP WKH ,7(5)($7 3RLQW 'HVLJQ 0HHWLQJ KHOG IURP )HEUXDU\ WR DWWKH,7(51DND-RLQW:RUN6LWH&KDQJHVPRVWO\IDYRXUDEOHIRUVDIHW\DUHDVIROORZV
5HGXFHGQHXWURQIOX[DQGIOXHQFHHQWDLOLQJOHVVGHFD\KHDWORZHUWHPSHUDWXUHVRIWKH SODVPDIDFLQJFRPSRQHQWVDQGOHVVPDWHULDOGDPDJH
VPDOOHUVXUIDFHORDGVIURPGLVUXSWLRQV
UHFRQVLGHUDWLRQRIWKHDUPRXUPDWHULDOVLQSDUWLFXODURIWXQJVWHQYVFDUERQ
ORZHU OLPLWV RQ K\GURJHQ JHQHUDWLRQ WR DFFRXQW IRU WKH VPDOOHU YROXPH RI WKH YDFXXP YHVVHO
IHZHUFRROLQJORRSVZKLFKVKRXOGOHDGWROHVVRFFXSDWLRQDOH[SRVXUH
WULWLXP LQYHQWRU\ JXLGHOLQHV EHORZ NJ LQ HDFK RI WKH YDFXXP YHVVHO WKH WULWLXP V\VWHPWKHKRWFHOODQGWKHVLWHVWRUDJH
WRNDPDNDQGWULWLXPEXLOGLQJZLWKDFRPPRQVHLVPLFLVRODWLRQ
7KH RYHUDOO VDIHW\ DSSURDFK IRU ,7(5)($7 ZDV SUHVHQWHG LQ WHUPV RI REMHFWLYHV SULQFLSOHV FULWHULD DQG LPSOHPHQWDWLRQ 7KH WRS OHYHO LV GRFXPHQWHG LQ WKH ,7(5)($7 3ODQW 'HVLJQ 6SHFLILFDWLRQ DQG ZLOO EH UHIOHFWHGLQWKH*6657KHSURGXFWLRQVFKHGXOHIRUWKH*665DQGWKHH[SHFWHGLQSXWIURPWKH+RPH7HDPV ZDVLQWURGXFHGLQWKLVFRQWH[W
7KH+RPH7HDPVSUHVHQWHGWKHLUWKRXJKWVRQ*665LQWHUPVRIFKDQJHVUHODWLYHWR1665VXJJHVWLRQV IRU *665 DQG H[SHULHQFH IURP GRPHVWLF OLFHQVLQJ H[HUFLVHV ,Q WKLV FRQWH[W H[WHQGHG GLVFXVVLRQV WRRN SODFHDQGHYHQWXDOO\IRFXVHGRQDFFLGHQWDQDO\VHVDQGUHODWHGGHWDLOV7KHVHGLVFXVVLRQVKHOSHGWRUHDFKD EHWWHUXQGHUVWDQGLQJDQGFRQVHQVXVRQLVVXHVVXFKDV
7KHPD[LPXPSHUPLVVLEOHILUVWZDOOWHPSHUDWXUHGULYHQE\GHFD\KHDWWRJHWKHUZLWKDORVVRIFRROLQJ WKHLPSDFWRIUXQDZD\HOHFWURQVRQSODVPDIDFLQJFRPSRQHQWV
H[YHVVHOORVVRIFRRODQWDFFLGHQWV/2&$DQG
FRQILQHPHQWRIUDGLRDFWLYLW\LQWKHFRXUVHRIDPD[LPXPH[YHVVHO/2&$
([SHULPHQWDO ,&( IDFLOLW\ ZKLFK VLPXODWHV WKH LQJUHVVRIFRROLQJZDWHULQWRWKHYDFXXPYHVVHO
7KH +RPH 7HDPV SUHVHQWHG WKHLU UHVXOWV IURP 5 ' DQG GHVLJQ WDVNV 7KLV ZRUN DLPV DW WKH SURYLVLRQ RI EDVLF VDIHW\ GDWD DV ZHOO DV DW EHQFKPDUNLQJ DQG YDOLGDWLRQRI FRPSXWHU FRGHV IRU VDIHW\ DQDO\VHV DQ DFWLYLW\ LQYROYLQJ DOO+RPH7HDPV$PDMRUH[DPSOHLVUHSUHVHQWHGE\WKH ILJXUHZKLFKVKRZVWKHH[SHULPHQWDO,&(IDFLOLW\RIWKH-$
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
7KH*665YROXPHHGLWRUVSUHVHQWHGWKHHQYLVDJHGVFRSHFRQWHQWVDQGVRPHWHFKQLFDOLWLHVRIWKHYROXPHV WKHZRUNLQJWLWOHVRIZKLFKUHDGDVIROORZV
9ROXPH, 6DIHW\$SSURDFK 9ROXPH,, 6DIHW\'HVLJQ
9ROXPH,,, 5DGLRORJLFDODQG(QHUJ\6RXUFH7HUPV 9ROXPH,9 1RUPDO2SHUDWLRQ
9ROXPH9 5DGLRDFWLYH0DWHULDOV'HFRPPLVVLRQLQJDQG:DVWH 9ROXPH9, 2FFXSDWLRQDO6DIHW\
9ROXPH9,, $QDO\VLVRI5HIHUHQFH(YHQWV 9ROXPH9,,, 8OWLPDWH6DIHW\0DUJLQV 9ROXPH,; ([WHUQDO+D]DUGV 9ROXPH; 6HTXHQFH$QDO\VLV 9ROXPH;, 6DIHW\0RGHOVDQG&RGHV
6XPPDU\DQGFRQFOXVLRQV
$OO SDUWLFLSDQWV IURP WKH +RPH 7HDPV DJUHHG WKDW WKH PHHWLQJ SURYLGHG D PRVW LPSRUWDQW IRUXP IRU GLVFXVVLRQVRQWKH,7(5)($7VDIHW\DSSURDFKDQGZDVYHU\IUXLWIXOVLQFHLWVWURQJO\HQKDQFHGWKHPXWXDO XQGHUVWDQGLQJ7KHPDLQSURGXFWRIWKHFRPELQHGHIIRUWWKH*HQHULF6LWH6DIHW\5HSRUWKDVEHHQSXWRQLWV ZD\VRWKDWWKHGHWDLOHGWHFKQLFDOZRUNFDQVWDUW7KHVFKHGXOHIRUWKH*665SURGXFWLRQLVFKDOOHQJLQJDQG QHHGVHYHU\RQH¶VFRRSHUDWLRQDQGEHVWHIIRUWV
6LQFH WKH ,7(5)($7 GHVLJQ LV VWLOO XQGHUZD\ *665 DQDO\VHV ZLOO QHHG WR ERXQG WKH GHVLJQ UDWKHU WKDQ DQDO\]HWKHH[DFWGHVLJQ7KHZRUNRQ*665ZLOOPDNHPD[LPXPXVHRIWKHH[WHQVLYHDVVHVVPHQWVRIWKH ,7(5GHVLJQDVGRFXPHQWHGLQ1665DQGLWVUHIHUHQFHV
7KH *665 LI SUHSDUHG DV GLVFXVVHG LV H[SHFWHG WR PHHW WKH +RPH 7HDPV¶ DQG WKH SRWHQWLDO +RVW
&RXQWULHV¶UHTXLUHPHQWVZLWKUHJDUGWRSUHSDULQJUHJXODWRU\VXEPLVVLRQV,WLVXQGHUVWRRGWKDWWKHXOWLPDWH VXEPLVVLRQVPXVWEHSUHSDUHGE\H[SHUWVIURPWKH+RVW&RXQWU\7KH*665ZLOOVXSSRUWVLWLQJGHFLVLRQV EXWIXUWKHUGHVLJQGHWDLODQGVSHFLILF+RVW&RXQWU\VDIHW\DVVHVVPHQWVDUHOLNHO\WREHQHHGHGIRUREWDLQLQJ UHJXODWRU\DSSURYDOIRUWKHFRQVWUXFWLRQ
7KHWDVNVWRWKH+RPH7HDPVZKLFKZLOOSURYLGHDPDMRUFRQWULEXWLRQWRWKH*665ZHUHDJUHHGDOWKRXJK IRUPDODSSURYDOVDUHVWLOOSHQGLQJ
7KHUHH[LVWVRPHLVVXHVZKLFKUHFHLYHGVXEVWDQWLDODWWHQWLRQDQGGLVFXVVLRQVGXULQJWKHPHHWLQJIRUZKLFK WKHDSSURDFKQHHGVIXUWKHULPSURYHPHQWMXVWLILFDWLRQDQGILQDODJUHHPHQW
8VHRISUREDELOLVWLFDUJXPHQWVLQWKHVDIHW\DSSURDFK
XVHRI6DIHW\,PSRUWDQFH&ODVVLILFDWLRQ6,&ZLWKUHJDUGWRLPSOLFDWLRQVLPSOHPHQWDWLRQ DQGDVVHVVPHQWDQGWRWKHUROHRIFRPSRQHQWVZLWK6,&ZKLFKLVLQWHQGHGWRPHDQ µQRWVDIHW\FODVV¶
DSSOLFDWLRQ RI WKH $V /RZ $V 5HDVRQDEO\ $FKLHYDEOH $/$5$ SULQFLSOH DQG WKH GHPRQVWUDWLRQWKDWWKHUHODWHGUHTXLUHPHQWVDUHPHW
MXVWLILFDWLRQRIERXQGLQJFDVHVDQGWKHVHOHFWLRQRILQLWLDODQGERXQGDU\FRQGLWLRQV DVVXPSWLRQV RQ LPSRUWDQW SODVPD SK\VLFV LVVXHV LQ SDUWLFXODU RQ SDVVLYH SODVPD
VKXWGRZQDQGPD[LPXPLQYHVVHOFRPSRQHQWGDPDJH
PRUH5 'RQWKHPRELOL]DWLRQRIFRGHSRVLWHGWULWLXPDQGGXVWXQGHUDFFLGHQWFRQGLWLRQV FRQILQHPHQWDSSURDFKIRUWKHWRNDPDNFRROLQJZDWHUV\VWHPYDXOWVLQWKHFRQWH[WRIODUJH H[YHVVHO ORVVRIFRRODQW DFFLGHQWV DQG WKH UHODWHG DVVXPSWLRQV RQ WKH EUHDN W\SH GRXEOHHQGHGJXLOORWLQHUXSWXUHRUOHDNEHIRUHEUHDN
7KHQH[W,7(57HFKQLFDO0HHWLQJRQ6DIHW\ (QYLURQPHQWWHQWDWLYHO\SODQQHGWREHKHOGE\PLG1RYHPEHU LVLQWHQGHGWRUHYLHZWKH*665UHVXOWVDQGFRQWHQWVDVZHOODVWKHVXPPDU\RIVDIHW\LQWKHJOREDO SUHVHQWDWLRQRI,7(5)($7LQWKH3ODQW'HVFULSWLRQ'RFXPHQW
/LVWRI3DUWLFLSDQWV
(8+RPH7HDP 6&LDWWDJOLD/'L3DFH:*XOGHQ-+DQGEXU\*0DUEDFK 17D\ORU
-$+RPH7HDP 7$UDNL.+DGD0+DVKLPRWR7,QDEH70DUXR(7DGD 77VXQHPDWVX
5)+RPH7HDP %.ROEDVRY0.ULYRVKHHY<3HWURY
-&7 +:%DUWHOV9&KX\DQRY&*RUGRQ5+HPPLQJV
7+RQGD0,VHOL.0RVKRQDV9+73-5DHGHU/7RSLOVNL
(;(&87,9( 6800$5< 2) 7+( (/(9(17+ ,7(5 6&5$3(2)) /$<(5 $1' ',9(57253+<6,&6(;3(57*52830((7,1*
E\'U$/RDUWH()'$&ORVH6XSSRUW8QLW*DUFKLQJDQG'U1$VDNXUD-78-$(5,1DND
7KHWK,7(56FUDSHRII/D\HUDQG'LYHUWRU3K\VLFV([SHUW*URXS0HHWLQJZDVKHOGDWWKH1DND,7(5-RLQW :RUN6LWHRQRI'HFHPEHU7KHZRUNVKRSDVVHVVHG
7KHODWHVWH[SHULPHQWDOUHVXOWVRQGLYHUWRURSHUDWLRQDOUHJLPHVDQGWKHLULPSOLFDWLRQVIRU,7(5 )($7
WKHPHDVXUHPHQWVDQGPHFKDQLVPVIRU6FUDSHRII/D\HU62/SDUDOOHODQGSHUSHQGLFXODUIORZV DQG WKHLU LQIOXHQFH RQ LPSXULW\ FRQWDPLQDWLRQ RI WKH EXON SODVPD DQG ZDOOGLYHUWRU PDWHULDO HURVLRQDQGUHGHSRVLWLRQ
WKHLQWHJUDWLRQRISODVPDUHJLPHVZLWKJRRGFRQILQHPHQWDQGJRRGGLYHUWRUSHUIRUPDQFHJRRG +HSXPSLQJ DQG WROHUDEOH SRZHU ORDG IRU WKH WZR ,7(5)($7 UHIHUHQFH UHJLPHV (/0\ + PRGH IRU WKH 4'7 LQGXFWLYHUHJLPHDQGRSWLPL]HGVKHDUGLVFKDUJHVIRUWKH4'7 VWHDG\VWDWHUHJLPH
WKHUROHRIFKHPLFDOSURFHVVHVLQGLYHUWRUFDUERQHURVLRQDQGGHXWHULXPWULWLXPFRGHSRVLWLRQLQ H[LVWLQJH[SHULPHQWV
WKH VWDWXV RI ,7(5)($7 SODVPD HGJH PRGHOOLQJ DQG RI WKH YDOLGDWLRQ RI PRGHOV DJDLQVW WKH PRVWUHFHQWH[SHULPHQWDOGDWD7KHVWDWXVRIWKHUHTXLUHGDWRPLFDQGPROHFXODUGDWDEDVHZDV UHYLHZHGDVZHOO
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
$36&RQIHUHQFH7KHUHVXOWVVKRZWKDWGHQVLWLHVLQH[FHVVRIWKH*UHHQZDOGYDOXHFDQEHDFKLHYHGE\WKLV PHWKRG ZLWK VRPH SHDNLQJ RI WKH GHQVLW\ SURILOHV DOWKRXJK FRQILQHPHQW GHJUDGDWLRQ DW KLJK GHQVLWLHV UHPDLQVDQLVVXH
([SHULPHQWV LQ -78 DW RXWHU PLGSODQH DQG -(7 DW SODVPD WRS VKRZODUJHSDUDOOHOIORZVLQWKH62/
SODVPDIURPWKHRXWHUWRWKHLQQHUGLYHUWRUIRURSHUDWLRQZLWKWKHQRUPDO%7GLUHFWLRQZKHUHWKHJUDG%LRQ GULIWGLUHFWLRQLVGLUHFWHGWRZDUGVWKH;SRLQWSUHYLRXVO\VHHQLQ$OFDWRU&PRG7KHVHIORZVZKLFKUHYHUVH GLUHFWLRQ ZKHQ WKH %7 GLUHFWLRQ LV FKDQJHG FDQQRW EH H[SODLQHG LQ WHUPV RI LRQL]DWLRQ VRXUFHV LQ WKH 62/GLYHUWRU7KHSUHVHQWXQGHUVWDQGLQJLVWKDWWKHVHIORZVDUHGXHWRSODVPDGULIWVZKLFKDUHQRWURXWLQHO\
LQFOXGHGLQWKHPRGHOOLQJRIWKH62/SODVPDV7KHW\SLFDOPDJQLWXGHRIWKHVHIORZVLV0 ZKLFKLV ODUJHU WKDQ WKH SDUWLFOHV LQMHFWHG ZLWK JDV SXII DQG UHPRYHG ZLWK SXPSLQJ 7KHVH SODVPD IORZV PD\
LQIOXHQFHWKHHIIHFWLYHQHVVRILPSURYLQJLPSXULW\UHWHQWLRQE\JDVSXIILQJDQGGLYHUWRUSXPSLQJDQGWKHLQRXW DV\PPHWU\RIWKHSDUWLFOHIOX[WRWKHGLYHUWRU:LWKUHVSHFWWRSUHGLFWLRQVWR,7(5LWLVZRUWKSRLQWLQJRXWWKDW VXFK IORZV DUH VHHQ WR GHFUHDVH ZLWK LQFUHDVLQJ GHQVLW\ DQG GLYHUWRU GHWDFKPHQW ZKLFK DUH WKH W\SLFDO FRQGLWLRQVIRUWKH,7(5GLYHUWRU7KXVLWLVSRVVLEOHWKDWWKHPRGHOOLQJGRQHVRIDUZLWKRXWGULIWVUHPDLQV YDOLG+RZHYHUWKLVPXVWEHSURSHUO\DVVHVVHGWRRSWLPL]HWKHGLYHUWRUGHVLJQLQ,7(5)($7
7KH JURXS UHDVVHVVHG WKH SUHVHQW NQRZOHGJH RQ GLYHUWRU JHRPHWU\ HIIHFWV ZLWK UHVSHFW WR GHWDFKPHQW LQFOXGLQJQHZUHVXOWVIURP7&9DQGGLYHUWRUSXPSLQJ7KHFRQFOXVLRQDGRSWHGE\WKHJURXSZDVWKDWWKH
SUHVHQW ,7(5)($7 YHUWLFDO GLYHUWRU GHVLJQ ZKLFK LQFOXGHV D GRPH LV LQ DFFRUGDQFH ZLWK WKH DLP RI DFKLHYLQJRSWLPXPGLYHUWRUSRZHUKDQGOLQJDQGSDUWLFOHFRQWURO
7KHVXEMHFWRI+HOLXPWUDQVSRUWDQGH[KDXVWZDVUHYLHZHGE\WKHJURXS$IWHUVHYHUDO\HDUVRIUHVHDUFKLW KDVEHHQGHPRQVWUDWHGWKDW+HOLXPFDQEHHIILFLHQWO\SXPSHGLQ(/0\+PRGHGLVFKDUJHVZKLFKDUHWKH EDVLVIRUWKH,7(5)($7LQGXFWLYHUHJLPH+RZHYHUWKHH[KDXVWLVVXHUHPDLQVXQUHVROYHGIRURSWLPL]HG VKHDUGLVFKDUJHVFDQGLGDWHVIRUWKH,7(5)($7VWHDG\VWDWHUHJLPHDVLWKDVEHHQGHPRQVWUDWHGLQ-7 8$WWKLVSRLQWLWLVQRWFOHDULIE\DFKLHYLQJKLJKHUGHQVLWLHVLQWKHVHGLVFKDUJHVWKHSUREOHPFDQEH DPHOLRUDWHGIXUWKHUUHVHDUFKLQWKLVDUHDLVLQSURJUHVV
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
8SJUDGHZKHUHWXQJVWHQKDVEHHQVXFFHVVIXOO\WHVWHGDVPDLQZDOOPDWHULDOZDVUHSRUWHGLQWKHPHHWLQJ 'HVSLWHWKHDWWUDFWLRQRIXVLQJWXQJVWHQIURPWKHWULWLXPUHWHQWLRQSRLQWRIYLHZTXHVWLRQVUHPDLQRYHUWKHULVN RIWXQJVWHQPHOWLQJZLWKODUJHSRZHUIOX[HVVXFKDV(/0VDQGGLVUXSWLRQV$VVHVVPHQWRIWKHVHSUREOHPV LQH[LVWLQJWRNDPDNVLVUHTXLUHGLQRUGHUWRHYDOXDWHWKLVPDWHULDORSWLRQIRUWKH,7(5)($7GLYHUWRU
7KHPHHWLQJZDVDWWHQGHGE\([SHUW*URXSPHPEHUVDQGLQYLWHGH[SHUWV
(8 3&RDG$/RDUWH*0DWWKHZV-1HXKDXVHU93KLOLSSV53LWWV'5HLWHU -$ 1$VDNXUD$+DWD\DPD6+LJDVKLMLPD.,WDPL7.DWR6.RQRVKLPD
+.XER.0DVDNL$6DNDVDL66DNXUDL66HQJRNX67DNDPXUD77DNL]XND +7DPDL77DPDQR77DQDEH.8HKDUD<:DWDQDEH
-&7 *)HGHULFL$.XNXVKNLQ06KLPDGD06XJLKDUD
,WHPVWREHFRQVLGHUHGIRULQFOXVLRQLQWKH,7(51HZVOHWWHUVKRXOGEHVXEPLWWHGWR%.XYVKLQQLNRY,7(52IILFH,$($
:DJUDPHU6WUDVVH32%R[$9LHQQD$XVWULDRU)DFVLPLOHRUHPDLOFEDVDOGHOOD#LDHDRUJ
SKRQH
3ULQWHGE\WKH,$($LQ$XVWULD
-XQH