Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
MINUTES - 02032015 - D.3
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¶VLQGHSHQGHQWMXGJPHQWDQGDQDO\VLV7KH 'HSDUWPHQWRI&RQVHUYDWLRQDQG'HYHORSPHQW&RPPXQLW\'HYHORSPHQW'LYLVLRQORFDWHGDW0XLU5RDG 0DUWLQH]&$LVWKHFXVWRGLDQRIWKHGRFXPHQWVDQGRWKHUPDWHULDOZKLFKFRQVWLWXWHWKHUHFRUGRISURFHHGLQJVXSRQ ZKLFKWKLVGHFLVLRQLVEDVHG '(1<WKHDSSHDOVIURP&RPPXQLWLHVIRUD%HWWHU(QYLURQPHQWDQG5RGHR&LWL]HQV$VVRFLDWLRQDQG83+2/' WKH&RXQW\3ODQQLQJ&RPPLVVLRQ¶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¶VDFWLRQ $'237WKHDWWDFKHG0LWLJDWLRQ0RQLWRULQJDQG5HSRUWLQJ3URJUDP ',5(&7WKH&RPPXQLW\'HYHORSPHQW'LYLVLRQWRSRVWD1RWLFHRI'HWHUPLQDWLRQZLWKWKH&RXQW\&OHUN ),6&$/,03$&7 1RQH7KHDSSOLFDQW3KLOOLSV&RPSDQ\LVREOLJDWHGWRSD\DQ\DGGLWLRQDOFRVWVDERYHWKHLQLWLDODSSOLFDWLRQ GHSRVLWDVVRFLDWHGZLWKWKHSURFHVVLQJRIWKHDSSOLFDWLRQ %$&.*5281' 2Q-DQXDU\WKH%RDUGRI6XSHUYLVRUVUHFHLYHGWHVWLPRQ\RQWZRDSSHDOVILOHGLQUHVSRQVHWRWKH 3ODQQLQJ&RPPLVVLRQ¶VGHFLVLRQWRDSSURYHWKH3KLOOLSV3URSDQH5HFRYHU\3URMHFW6WDII VUHVSRQVHVWRWKH DSSHDOVDUHFRQWDLQHGLQWKHDWWDFKHG-DQXDU\ERDUGRUGHU ([KLELWVDQG 3ULRUWRWKH%RDUG KHDULQJRQ-DQXDU\WKH%D\$UHD$LU4XDOLW\0DQDJHPHQW'LVWULFW %$$40'RU$LU'LVWULFW VXEPLWWHGDOHWWHUUHTXHVWLQJDGGLWLRQDOLQIRUPDWLRQLQRUGHUWRYHULI\WKH3URMHFW¶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¶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²5HFLUFXODWLRQRIDQ(,53ULRUWR&HUWLILFDWLRQ VWDWHV³7KH&RXQW\'HSDUWPHQWRI&RQVHUYDWLRQDQG'HYHORSPHQWLVUHTXLUHGWRUHFLUFXODWHWKH(,5ZKHQ VLJQLILFDQWQHZLQIRUPDWLRQLVDGGHGWRWKH(,5DIWHUSXEOLFQRWLFHLVJLYHQRIWKHDYDLODELOLW\RIWKHGUDIW(,5EXW EHIRUHFHUWLILFDWLRQ1HZLQIRUPDWLRQDGGHGWRDQ(,5LVQRWµVLJQLILFDQW¶XQOHVVWKH(,5LVFKDQJHGLQDZD\WKDW GHSULYHVWKHSXEOLFRIDPHDQLQJIXORSSRUWXQLW\WRFRPPHQWXSRQDVXEVWDQWLDODGYHUVHHQYLURQPHQWDOHIIHFWRQ WKHSURMHFW´7KHDGGLWLRQDO*+*DQGKHDOWKULVNDQDO\VHVZHUHGHWHUPLQHGWRFRQVWLWXWH³VLJQLILFDQWQHZ LQIRUPDWLRQ´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¶VKHDOWKULVNJXLGDQFHZDVXVHGWRHYDOXDWH3URMHFWVSHFLILFDQGFXPXODWLYHKHDOWKULVNV7KDWJXLGDQFH UHFRPPHQGVWKDWFXPXODWLYHKHDOWKULVNVILUVWEHHVWLPDWHGE\FRPELQLQJ3URMHFWVSHFLILFULVNVZLWKWKHULVNVIURP RWKHUH[LVWLQJDQGSURSRVHGVRXUFHVRIWR[LFDLUFRQWDPLQDQWV7KHQWKHWRWDOFRPELQHGKHDOWKULVNVDUHFRPSDUHG WR%$$40'¶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¶V VLJQLILFDQFHWKUHVKROGRISHUPLOOLRQ6LPLODUO\WKHDQDO\VLVIRXQGWKDWWKHPD[LPXPFXPXODWLYHFKURQLF KD]DUGIURPDOOVRXUFHVZRXOGEHOHVVWKDQ%$$40'¶VVLJQLILFDQFHWKUHVKROGRISHUPLOOLRQ 'XULQJWKHSXEOLFFRPPHQWSHULRGWKH$LU'LVWULFWLVVXHGDOHWWHURQ'HFHPEHU ([KLELW VWDWLQJWKH\ ZHUHLQDJUHHPHQWZLWKWKHUHVXOWVRIWKHKHDOWKULVNDQGHPLVVLRQVDQDO\VHV7KH$LU'LVWULFWIXUWKHUVWDWHGWKDWWKH 5'(,5MXVWLILHVWKH3URMHFW V*+*HPLVVLRQGHFUHDVHEDVHGRQWKHDQWLFLSDWHGFKDQJHLQIXHOJDVXVH2WKHU FRPPHQWVZHUHUHFHLYHGGXULQJWKHSXEOLFFRPPHQWSHULRGDQGDWWKH=RQLQJ$GPLQLVWUDWRU¶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¶VUHODWLRQVKLSZLWKRWKHUSURMHFWVEHLQJSXUVXHGDWWKH3KLOOLSV UHILQHU\LQ6DQWD0DULD2YHUDOOWKHDSSHOODQWVVWDWHGWKDWWKHSURSRVHG3URMHFWZRXOGDOORZWKH5RGHR 5HILQHU\WRSURFHVVPRUHKHDY\KLJKVXOIXUFUXGHVE\UDLOVXFKDVWDUVDQGV7KH\IXUWKHUFLWHGWKH³*UHJ.DUUDV 'HFODUDWLRQ´DQG³)R[5HSRUW´DVHYLGHQFHRILQVXIILFLHQWDPRXQWVRIEXWDQHDQGSURSDQHLQWKH5HILQHU\¶V H[LVWLQJ5HILQHU\)XHO*DV 5)* WKXVDVVHUWLQJWKDWWKH3URMHFWLVWKHUHIRUHGHSHQGHQWRQDFKDQJHWRLWVFUXGH VODWHLQRUGHUWRSURGXFHWKHSURSRVHGOHYHOVRISURSDQHDQGEXWDQH5)*LVGHILQHGDVDQ\JDVJHQHUDWHGDQG FRPEXVWHGDWDSHWUROHXPUHILQHU\DVDIXHOXVHGWRUXQUHILQHU\SURFHVVLQJXQLWV 7KH3URMHFWDSSOLFDWLRQDQG5'(,5SURSRVHVWKHUHFRYHU\RISURSDQHDQGEXWDQHDQGWKH3URMHFWLVEDVHGRQ H[LVWLQJOHYHOVRISURSDQHDQGEXWDQHLQWKH5)*SURGXFHGE\WKHH[LVWLQJ5HILQHU\FUXGHVODWH6XIILFLHQWOHYHOV RIEXWDQHDQGSURSDQHDOUHDG\H[LVWLQWKH5)*XQGHUFXUUHQWFRQGLWLRQVDWWKH5HILQHU\7KH3URMHFWZDV DFFRUGLQJO\GHVLJQHGWRJLYHWKHIDFLOLW\WKHDELOLW\WRFDSWXUHRUUHFRYHUH[LVWLQJSURSDQHDQGEXWDQHQRWWR SURGXFHQHZRUKLJKHUOHYHOVRISURSDQHDQGEXWDQH/LNHZLVHZLWKRXWWKHSURSRVHG3URMHFWWKHUHZRXOGEHQR SURMHFWUHODWHGGHFUHDVHLQ*UHHQKRXVH*DVDQGVXOIXUGLR[LGHHPLVVLRQVRUDGHFUHDVHLQWKHQXPEHURIIODULQJ HYHQWVDWWKH5HILQHU\ &XUUHQWO\WKHSURSDQHDQGEXWDQHWKDWLVQRWUHFRYHUHGLVXVHGDVIXHOIRUWKHUHILQHU\ LH5)* ([KLELW VKRZVWKHEXWDQHDQGSURSDQHSURGXFWLRQDWESG EDUUHOVSHUGD\ IRU$XJXVW5HYLHZRIVLPLODUGDWD IRU-DQXDU\WKURXJK1RYHPEHURI VHH([KLELW LQGLFDWHVOHYHOVFRQVLVWHQWZLWKWKHOHYHOVRIEXWDQHDQG SURSDQHPHDVXUHGLQ$XJXVWRI7KHSURMHFWSURSRQHQWV¶SURSRVDOLQFOXGHVVL[SUHVVXUL]HGVWRUDJHWDQNV KROGLQJEDUUHOVRISURSDQHHDFK7KHFDSDFLW\RIWKHUHPRYDOHTXLSPHQWLQFOXGLQJWKHDPRXQWRISURSDQH DQGEXWDQHLVVSHFLILHGLQWKH3URMHFW¶V%$$40'SHUPLWDSSOLFDWLRQDQGZLWKLQWKHSURMHFWGHVFULSWLRQDV ESG7KHSURMHFWGHVFULSWLRQLVFRQVLVWHQWZLWKWKH%$$40'SHUPLWDQGGRHVQRWVHHNWRPD[LPL]HEXWDQHDQG SURSDQHSURGXFWLRQE\DQLQFUHDVHRUFKDQJHLQFUXGHRLOEXWSURSRVHVWRUHFRYHUEXWDQHDQGSURSDQHWKDWDOUHDG\ H[LVWVLQWKH5HILQHU\)XHO*DVVWUHDPDQGWRUHSODFHWKHIXHOYDOXHRIWKHVHH[WUDFWHGJDVHVZLWKSXUFKDVHGQDWXUDO JDV7KHSURMHFWOLPLWVDQGHTXLSPHQWDUHFOHDUO\GHVFULEHGZLWKLQWKH5'(,5DQGWKH\GRQRWLPSO\WKH5RGHR 5HILQHU\ZLOOFKDQJHLWVIDFLOLW\RUHTXLSPHQWWREULQJLQKHDY\WDUVDQGVRUFKDQJHWKHFUXGHVODWH1RULVWKH SURSRVHG3URMHFWGHSHQGHQWRQDQ\SURMHFWVDWWKH3KLOOLSV6DQWD0DULDUHILQHU\7RIXUWKHUHPSKDVL]HWKDWWKH UHFRYHU\RIWKHSURSDQHDQGEXWDQH /LTXLG3HWUROHXP*DVRU/3* LVOLPLWHGWROHYHOVRI/3*FXUUHQWO\ SURGXFHGVWDIIUHFRPPHQGVDQDGGLWLRQDOFRQGLWLRQZKLFKUHTXLUHVWKDW3KLOOLSV&RPSDQ\VKDOOHQVXUHWKDWWKH WKURXJKSXWRISURSDQHDQGEXWDQHEHOLPLWHGWREDUUHOVSHUGD\7KHWH[WRIWKHUHFRPPHQGHGFRQGLWLRQLV FLWHGEHORZ &2$ 3KLOOLSVVKDOOHQVXUHWKDWWKHWKURXJKSXWRISURSDQHDQGEXWDQHDWWKH/3*5HFRYHU\8QLWVKDOOQRW H[FHHGEDUUHOVSHUGD\ 7KHSURMHFWGHVFULSWLRQLVFRPSOHWHDQGDGHTXDWHDQGDOODVSHFWVRIWKHSURSRVHG3URMHFWDUHVXSSRUWHGE\ VXEVWDQWLDOHYLGHQFHLQWKHDGPLQLVWUDWLYHUHFRUG WKHUHIRUHDQLQDGHTXDWHSURMHFWGHVFULSWLRQZDVQRWDIDFWRULQ WKHUHFLUFXODWLRQRIWKH(,5 )LUH'LVWULFW3XEOLF6DIHW\DQG6HUYLFHV 6HYHUDOVSHDNHUVDWWKH-DQXDU\KHDULQJH[SUHVVHGFRQFHUQVUHJDUGLQJWKHDELOLW\RIWKH5RGHR+HUFXOHV )LUH'LVWULFW 5+)' WRUHVSRQGWRILUHVH[SORVLRQVRURWKHUHPHUJHQFLHVDWWKH5HILQHU\7KHVHFRQFHUQVDSSHDU WRVWHPIURPWKHFORVXUHRI6WDWLRQORFDWHGDW7KLUG6WUHHWLQ5RGHRZKLFKLVSHUFHLYHGWRKDYHOHIW WKH5HILQHU\ZLWKRXWDGHTXDWHFRYHUDJHLQWKHHYHQWRIDQHPHUJHQF\DWWKHIDFLOLW\,QRWKHUZRUGVWKHUHLVSXEOLF FRQFHUQWKDWWKH5+)'QRZKDVDGHFUHDVHGHPHUJHQF\UHVSRQVHFDSDELOLW\DQGLVWKXVXQGHUHTXLSSHGWREHWKH ILUVWUHVSRQGHUVWRHPHUJHQFLHVDWWKH5HILQHU\GXHWRWKHFORVXUHRI6WDWLRQ5+)'6WDWLRQLQ5RGHR UHRSHQHGRQ2FWREHU WKHUHIRUHDQ\FRQFHUQVUHJDUGLQJWKHFORVXUHRI6WDWLRQKDYHEHHQUHVROYHG IRUWKHSUHVHQWWLPH,WLVDOVRLPSRUWDQWWRQRWHWKDW5+)'6WDWLRQZDVQRWDQGVWLOOLVQRWWKHILUVWUHVSRQGHU IRUHPHUJHQFLHVDWWKH5HILQHU\ QHYHUWKHOHVVVLQFHWKH5HILQHU\LVLQWKHLUMXULVGLFWLRQWKH5RGHR+HUFXOHV)LUH 'LVWULFWDXWRPDWLFDOO\UHVSRQGVWRDQ\LQFLGHQWVDWWKHIDFLOLW\LQDVWDQGE\RUDGYLVRU\FDSDFLW\ 3KLOOLSVJHQHUDOO\SURYLGHVLWVRZQHPHUJHQF\UHVSRQVHIRU5HILQHU\LQFLGHQWVLQGHSHQGHQWRIWKH5+)',WV HPHUJHQF\WHDPVDUHWUDLQHGDQGHTXLSSHGWRUHVSRQGWRILUHVUHVFXHVKD]DUGRXVPDWHULDOVUHOHDVHVDQGRWKHU HPHUJHQFLHVWKDWFRXOGRFFXUDWWKH5HILQHU\LQFOXGLQJDQ\SRWHQWLDOLQFLGHQWVLQYROYLQJWKHSURSRVHG3URMHFW FRQVWUXFWLRQDQGRURSHUDWLRQV7KH5HILQHU\LVDOVRDPHPEHURIWKH%D\$UHD3HWURFKHPLFDO,QGXVWU\0XWXDO $LG2UJDQL]DWLRQ 30$2 ZKLFKLVFRPSRVHGRIPRUHWKDQKDOIDGR]HQUHILQHULHVDQGFKHPLFDOSODQWVZKRVH RSHUDWRUVKDYHDJUHHGWRSURYLGHRQHDQRWKHUZLWKHPHUJHQF\UHVSRQVHUHVRXUFHVLQWKHHYHQWRIDPDMRU HPHUJHQF\7KH30$2KROGVPRQWKO\PHHWLQJVDQGFRQGXFWVTXDUWHUO\HTXLSPHQWGHSOR\PHQWGULOOVLQFOXGLQJ DQDQQXDOWUDLQLQJH[HUFLVHWRPDLQWDLQLQWHUIDFLOLW\ZRUNLQJUHODWLRQVKLSV$VVLVWDQFHLVDOVRDYDLODEOHLQWKH HYHQWRIFHUWDLQKD]DUGRXVFKHPLFDOUHOHDVHVIURPWKH&RXQW\+D]DUGRXV0DWHULDOV5LFKPRQG)LUH+D]DUGRXV 0DWHULDOVDQGWKH6DQ5DPRQ9DOOH\)LUH+D]DUGRXV0DWHULDOV7KHVHDJHQFLHVDUHDXWRPDWLFDOO\DOHUWHGWRDQ\ LQFLGHQWVDWWKHUHILQHULHV 7KHJHQHUDOSURFHGXUHLQWKHHYHQWRIDQHPHUJHQF\DWWKH5HILQHU\EHJLQVZLWKWKHLQLWLDOUHSRUWRIWKHHPHUJHQF\ FRQGLWLRQVXFKDVDILUHLQMXU\HWF$5HILQHU\HPHUJHQF\LVUHSRUWHGE\GLDOLQJQXPEHURQWKH5HILQHU\¶V LQWHUQDOSKRQHV\VWHPRUYLDWKHLQSODQW5HILQHU\UDGLRWRDXQLWFRQWUROURRP'LDOLQJLVWKH5HILQHU\¶V HTXLYDOHQWRIFDOOLQJ 7KHHPHUJHQF\SKRQHLVDQVZHUHGE\WKH0DULQH7HUPLQDO'LVSDWFKHUZKRWKHQXVHV WKH³$OO&DOO´IXQFWLRQWRDQQRXQFHWKHW\SHRIHPHUJHQF\DQGWKHORFDWLRQRYHUDOORIWKH5HILQHU\¶VUDGLRVDQG WKHSXEOLFDGGUHVVV\VWHP7KH5RGHR5HILQHU\XVHVWKH,QFLGHQW&RPPDQG6\VWHPWRGLUHFWDQGFRQWUROWKH HPHUJHQF\RSHUDWLRQV7KH6KLIW6XSHULQWHQGHQWLVWKH,QFLGHQW&RPPDQGHU7KH,QFLGHQW&RPPDQGHUZLOO FRQGXFWDQLQLWLDODVVHVVPHQWRIWKHVLWXDWLRQDQGGHWHUPLQHLILWFDQEHKDQGOHGE\WKH5HILQHU\¶V(PHUJHQF\ 5HVSRQVH7HDP (57 RULIDGGLWLRQDODVVLVWDQFHZLOOEHUHTXLUHGIURPWKHRXWVLGHHPHUJHQF\UHVSRQVHUHVRXUFHV 7KH5RGHRUHILQHU\KDV(57PHPEHUVDVVLJQHGRQDEDVLVWRUHVSRQGWRDOOW\SHVRIHPHUJHQF\VFHQDULRV ZLWKLQWKHUHILQHU\2QFHDQHPHUJHQF\QRWLILFDWLRQLVPDGHWKHGHVLJQDWHG(57PHPEHUVUHVSRQGWRDQ DQQRXQFHGVWDJLQJORFDWLRQIRUIXUWKHULQVWUXFWLRQVDQGGHSOR\PHQW,QWKHHYHQWWKDWDGGLWLRQDO HPHUJHQF\UHVSRQVHVXSSRUWLVQHHGHGEH\RQGWKH5HILQHU\¶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³WKHFRQVWUXFWLRQDFTXLVLWLRQRSHUDWLRQDEDQGRQPHQWRUGLVFRQWLQXDQFHRIVSXULQGXVWULDOWHDPVZLWFKLQJRU VLGHWUDFNVRUIDFLOLWLHV>7@KHUHPHGLHVSURYLGHGXQGHUWKLVSDUWZLWKUHVSHFWWRUHJXODWLRQRIUDLO WUDQVSRUWDWLRQDUHH[FOXVLYHDQGSUHHPSWWKHUHPHGLHVSURYLGHGXQGHU)HGHUDORU6WDWHODZ7KHFRXUWVKDYH UHSHDWHGO\KHOGWKDWWKH,&&7$SUHHPSWVVWDWHDQGORFDOUHJXODWLRQLH³WKRVHVWDWHODZVWKDWPD\UHDVRQDEO\EH VDLGWRKDYHWKHHIIHFWRIµPDQDJLQJ¶RUµJRYHUQLQJ¶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¶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¶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¶VFRQVXOWLQJJHRORJLVW$GGLWLRQDOO\DSSURSULDWHJUDGLQJDQGGHVLJQLQDFFRUGDQFHZLWKWKH&%& UHTXLUHPHQWVDQGWKH&RXQW\¶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²*HRORJ\DQG6RLOVRIWKH5'(,5DV ZHOODVLQWKH-XQH'UDIW(,5DQGLQ0DVWHU5HVSRQVH²/LTXHIDFWLRQDQG6HLVPLFLW\RIWKH1RYHPEHU )LQDO(,57KHUHIRUHWKHSURSRVHGSURMHFWZLOOQRWKDYHDQ\LPSDFWVWRJHRORJ\WKDWFDQQRWEHDGGUHVVHG XQGHUWKH&RXQW\¶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¶VFOLPDWHFKDQJHUHODWHGLPSDFWV 7KH3URSDQH5HFRYHU\3URMHFWSURSRVHVWRVWRUHDQGWUDQVSRUWSURSDQHE\UDLODQGWRUHFRYHUDGGLWLRQDODPRXQWV RIEXWDQH WKH5HILQHU\FXUUHQWO\VKLSVEXWDQHE\UDLOEXWQRWSURSDQH7KH3URSDQH5HFRYHU\3URMHFWZLOOXWLOL]H WKH5RGHR5HILQHU\¶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¶VRQFHWKURXJKFRROLQJ 27& V\VWHP7KH27& V\VWHPLVWKHFXUUHQWSURFHVVLQZKLFK3KLOOLSVXVHVVDOWZDWHUH[WUDFWHGIURPWKHED\WRUHGXFHWKHWHPSHUDWXUH DQGFRRORIISURFHVVVWUHDPVWKHQGLVFKDUJLQJWKHZDWHUEDFNLQWRWKHED\7KHXVHRIWKH27&V\VWHPZDV DQDO\]HGLQ+\GURORJ\DQG:DWHU4XDOLW\6HFWLRQ D RIWKH-XQH'UDIW(,5DQGIXUWKHUFODULILHGLQ +\GURORJ\DQG:DWHU4XDOLW\6HFWLRQ D DQG%LRORJLFDO5HVRXUFHV6HFWLRQ G RIWKH5'(,5ZKLFK FRQFOXGHGWKDWDQ\27&V\VWHPLPSDFWVWRELRORJLFUHVRXUFHVRUZDWHUTXDOLW\ZLOOEHOHVVWKDQVLJQLILFDQW EHFDXVHWKHLQFUHDVHGXVHRIWKH27&V\VWHPZRXOGQRWUHTXLUHDQ\QHZFRQVWUXFWLRQRUH[SDQVLRQRIWKHH[LVWLQJ V\VWHP7KHLQFUHDVHGXVHZRXOGEHDFFRPPRGDWHGHQWLUHO\E\WKHH[LVWLQJILYHSXPSVDQGHTXLSPHQWDQGZRXOG FRQWLQXHWRRSHUDWHZLWKLQWKH5HILQHU\ V1DWLRQDO3ROOXWDQW'LVFKDUJH(OLPLQDWLRQ6\VWHP 13'(6 SHUPLW FRQGLWLRQVDVGHWHUPLQHGE\WKH5HJLRQDO:DWHU4XDOLW\&RQWURO%RDUG %RLOLQJ/LTXLG([SDQGLQJ9DSRU([SORVLRQ %/(9( 6HYHUDOFRPPHQWHUVDWERWKWKH-DQXDU\%RDUGKHDULQJDQGWKH1RYHPEHU=RQLQJ $GPLQLVWUDWRUSXEOLFFRPPHQWKHDULQJH[SUHVVHGFRQFHUQVDERXWSURSDQHDQGEXWDQHH[SORVLRQVHVSHFLDOO\LQWKH IRUPRIDERLOLQJOLTXLGH[SDQGLQJYDSRUH[SORVLRQ$ERLOLQJOLTXLGH[SDQGLQJYDSRUH[SORVLRQFRXOGRFFXU ZKHQVHDOHGWDQNVRIOLTXLGRUJDVHRXVKD]DUGRXVPDWHULDOVDUHH[SRVHGWRILUHZKLFKPD\FDXVHH[FHVVLYH SUHVVXUHVZLWKLQWKHWDQNFRPELQHGZLWKZHDNHQLQJRIWKHWDQNZDOOV7KHVXGGHQIDLOXUHRIWKHYHVVHODQGUDSLG YDSRUL]DWLRQDQGH[SDQVLRQRILWVFRQWHQWVLVWHUPHGD³%/(9($4XDQWLWDWLYH5LVN$QDO\VLVZDVSHUIRUPHGWR DGGUHVVWKHFRQFHUQVUHJDUGLQJSURSDQHDQGEXWDQHH[SORVLRQVDQGWKHUHVXOWVDUHSUHVHQWHGLQ+D]DUGVDQG +D]DUGRXV0DWHULDOV6HFWLRQ D RIWKH5'(,5DQGWKHULVNDVVRFLDWHGZLWKWKHSURSRVHG3URMHFW¶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³3KLOOLSVVKDOO HQVXUHWKDWWKHWKURXJKSXWRISURSDQHDQGEXWDQHDWWKH/3*5HFRYHU\8QLWVKDOOQRWH[FHHGEDUUHOV SHUGD\´ 02',),('&RQGLWLRQRI$SSURYDOWRUHDG³3KLOOLSVVKDOOGHOLYHUDQGH[HFXWHDQ LQGHPQLILFDWLRQDJUHHPHQWEHWZHHQ3KLOOLSVDQG&RQWUD&RVWD&RXQW\´ 02',),('&RQGLWLRQRI $SSURYDOEWRUHDG D $SSOLFDWLRQDQGPDWHULDOVUHFHLYHGRQ-XQHE 5HFLUFXODWHG'UDIWDQG)LQDO (QYLURQPHQWDO,PSDFW5HSRUWDQGDSSHQGLFHVGDWHG2FWREHUDQG-DQXDU\F 3RUWLRQVRIWKH'UDIW DQG)LQDO(QYLURQPHQWDO,PSDFW5HSRUWDQGDSSHQGLFHVGDWHG-XQHDQG1RYHPEHUG 0LWLJDWLRQ 0RQLWRULQJDQG5HSRUWLQJ3URJUDPGDWHG2FWREHUDQG$'237('5HVROXWLRQ1RZLWKWKH PLQRUWHFKQLFDOFRUUHFWLRQVPDGHWRGD\ZKLFK$&&(376WKH&RXQW\=RQLQJ$GPLQLVWUDWRU¶V UHFRPPHQGDWLRQVWRFHUWLI\WKH'UDIWDQG)LQDO(,5LQFOXGLQJWKHHQWLUH5HFLUFXODWHG(QYLURQPHQWDO ,PSDFW5HSRUW 5(,5 FRQVLVWLQJRIWKH5HFLUFXODWHG'UDIW(,5 5'(,5 GDWHG2FWREHUDQG 5HFLUFXODWHG)LQDO(,5 5)(,5 GDWHG-DQXDU\$&&(376WKH&RXQW\3ODQQLQJ&RPPLVVLRQ¶V UHFRPPHQGDWLRQVDVRXWOLQHGLQ3ODQQLQJ&RPPLVVLRQ5HVROXWLRQ1R &(57,),(6WKH'UDIW DQG)LQDO(,5LQFOXGLQJWKHHQWLUH5HFLUFXODWHG(QYLURQPHQWDO,PSDFW5HSRUW 5(,5 FRQVLVWLQJRIWKH 5HFLUFXODWHG'UDIW(,5 5'(,5 GDWHG2FWREHUDQGWKH5HFLUFXODWHG)LQDO'UDIW 5)(,5 GDWHG -DQXDU\ DQG&(57,),(6WKDWWKH%RDUGKDVUHYLHZHGDQGFRQVLGHUHGLWVFRQWHQWVWKDWLWLVDGHTXDWH DQGFRPSOHWHWKDWLVKDVEHHQSUHSDUHGLQFRPSOLDQFHZLWKWKH&DOLIRUQLD(QYLURQPHQWDO4XDOLW\$FW &(4$ DQGWKH6WDWHDQG&RXQW\&(4$*XLGHOLQHVDQGWKDWLWUHIOHFWVWKH&RXQW\¶VLQGHSHQGHQWMXGJPHQWDQG DQDO\VLV7KH'HSDUWPHQWRI&RQVHUYDWLRQDQG'HYHORSPHQW&RPPXQLW\'HYHORSPHQW'LYLVLRQORFDWHGDW 0XLU5RDG0DUWLQH]&$LVWKHFXVWRGLDQRIWKHGRFXPHQWVDQGRWKHUPDWHULDOWKDWFRQVWLWXWHWKHUHFRUGRI SURFHHGLQJVXSRQZKLFKWKLVGHFLVLRQLVEDVHG '(1,(6WKHDSSHDOVIURP&RPPXQLWLHVIRUD%HWWHU(QYLURQPHQWDQG5RGHR&LWL]HQV$VVRFLDWLRQDQG 83+2/'6WKH&RXQW\3ODQQLQJ&RPPLVVLRQ¶VGHFLVLRQWRDSSURYHWKH/DQG8VH3HUPLW &RXQW\)LOH /3 ZLWKWKHDGGHGFRQGLWLRQVRIDSSURYDO$'2376WKHILQGLQJVFRQWDLQHGLQWKH&RXQW\ 3ODQQLQJ&RPPLVVLRQ5HVROXWLRQ1R ZKLFKLQFOXGHVWKH&(4$ILQGLQJV*URZWK0DQDJHPHQW 6WDQGDUGVDQG/DQG8VH3HUPLWILQGLQJVDVWKHEDVLVIRUWKH%RDUG¶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³'UDIW(,5´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³)LQDO(,5´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¶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³5HFLUFXODWHG)LQDO(,5´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³WKH%RDUG´ WDNHVWKHIROORZLQJDFWLRQV $&&(37WKH&RXQW\=RQLQJ$GPLQLVWUDWRU¶VUHFRPPHQGDWLRQWRFHUWLI\ZLWKUHVSHFWWRSRUWLRQVRIWKH)LQDO(,5 DQGWKHHQWLUH5HFLUFXODWHG)LQDO(,5 $ $&&(37WKH&RXQW\3ODQQLQJ&RPPLVVLRQ¶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¶VLQGHSHQGHQWMXGJPHQWDQG DQDO\VLVDQGVSHFLI\LQJWKDWWKH&RPPXQLW\'HYHORSPHQW'LYLVLRQLVWKHFXVWRGLDQRIWKHGRFXPHQWVDQGRWKHUPDWHULDO ZKLFKFRQVWLWXWHVWKHUHFRUGRISURFHHGLQJVXSRQZKLFKWKLVGHFLVLRQLVEDVHG ' $'2376WKH&(4$)LQGLQJVWKDWDGGUHVVHQYLURQPHQWDOLPSDFWVDQGPLWLJDWLRQPHDVXUHVDQG$'2376WKH0LWLJDWLRQ 0RQLWRULQJDQG5HSRUWLQJ3URJUDPLQWKH5HFLUFXODWHG)LQDO(,5 ( $33529(6WKHSURSRVHG/DQG8VH3HUPLW&RXQW\)LOH/3EDVHGRQWKH&(4$)LQGLQJV*URZWK0DQDJHPHQW 6WDQGDUGVDQG/DQG8VH3HUPLW)LQGLQJVVXEMHFWWRWKH&RQGLWLRQVRI$SSURYDODQG0LWLJDWLRQ0HDVXUHV ) %(,7)857+(55(62/9('WKDWWKHUHDVRQVIRUWKHVHUHFRPPHQGDWLRQVDUHDVIROORZV 352-(&7),1',1*6 &(4$)LQGLQJV$ ,QWURGXFWLRQ 7KH&RQWUD&RVWD&RXQW\%RDUGRI6XSHUYLVRUVDGRSWVWKHIROORZLQJILQGLQJVIRUFHUWLILFDWLRQRIWKH(QYLURQPHQWDO,PSDFW5HSRUWDQG5HFLUFXODWHG (QYLURQPHQWDO,PSDFW5HSRUW (,5 DQGDSSURYDORIWKH3URSDQH5HFRYHU\3URMHFWSXUVXDQWWRWKH&DOLIRUQLD(QYLURQPHQWDO4XDOLW\$FW&DOLIRUQLD3XEOLF5HVRXUFHV&RGH6HFWLRQV HWVHTWKH*XLGHOLQHVIRU,PSOHPHQWDWLRQRI&(4$7LWOHRIWKH&DOLIRUQLD&RGHRI5HJXODWLRQV6HFWLRQVHWVHT &(4$*XLGHOLQHV DQGWKH&RXQW\¶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¶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³'UDIW(,5´ 6WDWH&OHDULQJKRXVH1XPEHUZDVUHOHDVHGIRUSXEOLFUHYLHZRQ-XQHDQGRQ 2FWREHUIRUWKHUHFLUFXODWHG'UDIW(,57KHLQLWLDOSXEOLFFRPPHQWSHULRGZDVVFKHGXOHGIRUGD\VDQGZDVH[WHQGHG DQDGGLWLRQDOGD\VHQGLQJRQ$XJXVW 7KHSXEOLFFRPPHQWSHULRGIRUWKHUHFLUFXODWLRQ'UDIW(,5ZDVVFKHGXOHGIRU GD\VHQGLQJRQ'HFHPEHU$SXEOLFKHDULQJEHIRUHWKH=RQLQJ$GPLQLVWUDWRUWRUHFHLYHFRPPHQWVRQWKH'UDIW (,5ZDVKHOGRQ-XO\DQGRQ1RYHPEHUIRUWKHUHFLUFXODWHG'UDIW(,57KH)LQDO(QYLURQPHQWDO,PSDFW 5HSRUW ³)LQDO(,5´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¶VLPSDFWVDQGFXPXODWLYHLPSDFWVWR ZKLFKWKHSURMHFWZRXOGFRQWULEXWH7KH(,5VLQFOXGHUHVSRQVHVWRDOOZULWWHQDQGRUDOFRPPHQWVUHFHLYHGGXULQJWKHFRPPHQW SHULRGDQGSURYLGHDGHTXDWHJRRGIDLWKDQGUHDVRQHGUHVSRQVHVWRDOOFRPPHQWVUDLVLQJVLJQLILFDQWHQYLURQPHQWDOLVVXHV7KH (,5VDOVRDGGUHVVDUHDVRQDEOHUDQJHRIDOWHUQDWLYHV(YLGHQFHUHJDUGLQJWKHUDQJHRIDOWHUQDWLYHVDQGWKHHYLGHQFHLQGLFDWLQJ WKDWRIIVLWHDQGUHGXFHGGHYHORSPHQWDOWHUQDWLYHVZHUHQRWVWXGLHGLQGHWDLOEHFDXVHWKH\ZRXOGQRWDFKLHYHPRVWRIWKHSURMHFW REMHFWLYHVDUHLQWKH(,5VDQGLQWKHUHFRUG7KH%RDUGDGRSWVWKHDQDO\VLVDQGFRQFOXVLRQVRIWKH(,5VDQGEDVHVLWVGHFLVLRQ XSRQWKHHYLGHQFHUHIHUHQFHGLQWKH(,5VDQGWKHLUDSSHQGLFHV 7KHFRPSUHKHQVLYHDQDO\VLVZLWKLQWKH(,5VSURYLGHVWKH%RDUGZLWKWKHQHFHVVDU\LQIRUPDWLRQUHTXLUHGE\WKH&DOLIRUQLD (QYLURQPHQWDO4XDOLW\$FW &(4$ WRSURSHUO\DQDO\]HDQGHYDOXDWHDQ\DQGDOORIWKHSRWHQWLDOHQYLURQPHQWDOLPSDFWVRIWKH 3URMHFW &HUWLILFDWLRQRI(,5 7KH%RDUGILQGVWKDWERWK(,5VKDYHEHHQFRPSOHWHGLQFRPSOLDQFHZLWK&(4$ WKDWWKH%RDUGUHYLHZHGDQGFRQVLGHUHGWKH LQIRUPDWLRQFRQWDLQHGLQWKH(,5VSULRUWRDSSURYLQJWKHSURMHFW DQGWKH(,5VUHIOHFWWKH&RXQW\¶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¶VILQGLQJVRQWKHVLJQLILFDQFHRIHDFKLPSDFWDIWHULPSRVLWLRQRIWKHDGRSWHGPLWLJDWLRQ PHDVXUHV$IXOOH[SODQDWLRQRIWKHVHHQYLURQPHQWDOILQGLQJVDQGFRQFOXVLRQVFDQEHIRXQGLQWKHUHFLUFXODWHG'UDIW(,57KH %RDUGDGRSWVDQGLQFRUSRUDWHVWKHDQDO\VLVDQGH[SODQDWLRQLQWKHUHFLUFXODWHG(,5DGRSWVLQWKHVHILQGLQJVWKHGHWHUPLQDWLRQV DQGFRQFOXVLRQVRIWKHUHFLUFXODWHG(,5UHODWLQJWRHQYLURQPHQWDOLPSDFWVDQGPLWLJDWLRQPHDVXUHV7KHVHILQGLQJVDUHEDVHG XSRQWKHHYLGHQFHFRQWDLQHGLQDQGUHIHUHQFHGLQWKH'UDIW(,5UHFLUFXODWHG'UDIW(,5LQVWDIIUHSRUWVLQWKHVXEPLWWDOV IURPWKHDSSOLFDQWDQGRQWKHUHFRUGDVDZKROH 7KH0LWLJDWLRQ0RQLWRULQJ5HSRUWLQJ3URJUDP>0053@ZLWKLQWKHUHFLUFXODWHG'UDIW(,5DV$SSHQGL['LVKHUHE\DGRSWHGE\ WKH%RDUGDQGLVLQFRUSRUDWHGLQWRWKHVHILQGLQJV7KHPLWLJDWLRQPHDVXUHVZLOOUHGXFHRUDYRLGWKHSRWHQWLDOO\VLJQLILFDQWDQG VLJQLILFDQWLPSDFWVRIWKHSURMHFWWROHVVWKDQVLJQLILFDQWOHYHOVDQGZLOOUHGXFHVRPHOHVVWKDQVLJQLILFDQWLPSDFWVDVZHOO,Q DGRSWLQJWKHVHPLWLJDWLRQPHDVXUHVWKH%RDUGLQWHQGVWRDGRSWHDFKRIWKHPLWLJDWLRQPHDVXUHVLGHQWLILHGE\WKHUHFLUFXODWHG (,5$FFRUGLQJO\LQWKHHYHQWDPLWLJDWLRQPHDVXUHUHFRPPHQGHGLQWKHUHFLUFXODWHG(,5KDVLQDGYHUWHQWO\EHHQRPLWWHGVXFK PLWLJDWLRQPHDVXUHLVKHUHE\DGRSWHGDQGLQFRUSRUDWHGLQWKHVHILQGLQJVE\UHIHUHQFH,QDGGLWLRQLQWKHHYHQWWKHODQJXDJH GHVFULELQJDPLWLJDWLRQPHDVXUHVHWIRUWKIDLOVWRDFFXUDWHO\UHIOHFWWKHVXEVWDQFHRIWKHPLWLJDWLRQPHDVXUHVLQWKHUHFLUFXODWHG (,5GXHWRDFOHULFDOHUURUWKHODQJXDJHRIWKHPLWLJDWLRQPHDVXUHDVVHWIRUWKLQWKHUHFLUFXODWHG(,5VKDOOFRQWUROXQOHVVWKH ODQJXDJHRIWKHPLWLJDWLRQPHDVXUHKDVEHHQVSHFLILFDOO\DQGH[SUHVVO\PRGLILHGE\WKHVHILQGLQJV6RPHODQJXDJHKDVEHHQ PRGLILHGWRUHIOHFW&RXQW\SUDFWLFHVDQGSURFHGXUHVUHJDUGLQJGHSDUWPHQWDSSURYDOSURFHVVHVDQGWRUHIOHFWWHFKQLFDOGHWDLOVRI WKHSURMHFWWKDWGRQRWVXEVWDQWLYHO\DIIHFWWKHPLWLJDWLRQRILPSDFWV 7KH%RDUGILQGVWKDWFKDQJHVRUDOWHUDWLRQVKDYHEHHQUHTXLUHGLQRULQFRUSRUDWHGLQWRWKHSURMHFWZKLFKDYRLGRUVXEVWDQWLDOO\ OHVVHQWKHVLJQLILFDQWHQYLURQPHQWDOHIIHFWVRQWKHHQYLURQPHQW$VVKRZQLQWKH0053$SSHQGL['RIWKHUHFLUFXODWHG'UDIW (,5SULPDU\UHVSRQVLELOLW\IRULPSOHPHQWDWLRQPRQLWRULQJDQGHQIRUFHPHQWRIDOOPLWLJDWLRQPHDVXUHVOLHVZLWKWKH&RXQW\ 2WKHUDJHQFLHVPD\SOD\DUROHLQDSSURYLQJWKHSURMHFW)RUH[DPSOHWKHUHPD\EHFRQVXOWDWLRQZLWKWKH5HJLRQDO:DWHU4XDOLW\ &RQWURO%RDUGUHJDUGLQJVWRUPZDWHUSODQVDQGRWKHUZDWHUTXDOLW\DVSHFWVRIWKHSURMHFWDQGUHVRXUFHDJHQFLHVPD\EHFRPH LQYROYHGVKRXOGDQ\UHVRXUFHLVVXHVQHHGWKHLULQSXWDVDUHVXOWRIWKHSURMHFW 6RPHRIWKH(,5¶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¶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¶VH[LVWLQJ HQWLWOHPHQWV7KHDGGLWLRQDOZDWHUVXSSO\UHTXLUHGGXULQJSURMHFWFRQVWUXFWLRQZRXOGEHRQO\DVPDOOWHPSRUDU\LQFUHPHQWDV FRPSDUHGWRH[LVWLQJDQGSURSRVHGZDWHUXVDJH 6HZDJH'LVSRVDO $OWKRXJKWKHUHILQHU\OLHVZLWKLQWKH5RGHR6DQLWDU\'LVWULFW VVHUYLFHDUHDWKHUHILQHU\FROOHFWVWUHDWVDQG GLVFKDUJHVDOOZDVWHZDWHUDQGVWRUPZDWHUWRLWVRZQRQVLWHZDVWHZDWHUWUHDWPHQWV\VWHP6LQFHWKHUHILQHU\GRHVQRWGLVFKDUJH WRWKHSXEOLFZDVWHZDWHUWUHDWPHQWIDFLOLWLHVWKHFDSDFLW\RIWKH5RGHR6DQLWDU\'LVWULFW VZDVWHZDWHUWUHDWPHQWIDFLOLW\ZRXOGEH XQDIIHFWHGE\WKHSURMHFW7KHUHILQHU\FXUUHQWO\GLVFKDUJHVDSSUR[LPDWHO\PLOOLRQJDOORQVSHUGD\RIZDVWHZDWHUWRWKH RQVLWHWUHDWPHQWSODQWEXWLWKDVWKHDELOLW\WRWUHDWXSWRPLOOLRQJDOORQVSHUGD\7KHSURMHFWZRXOGLQFUHDVHZDVWHZDWHUIORZV WRWKHUHILQHU\¶VWUHDWPHQWSODQWE\PLOOLRQJDOORQVSHUGD\ZHOOEHORZWKHSODQW¶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¶VIDFLOLW\VWDWLRQDUHDDQGVXSSRUW IDFLOLWLHVIRUHYHU\PHPEHURIWKHSRSXODWLRQ7KH6PDOOSRSXODWLRQLQFUHDVHDVVRFLDWHGZLWKWKLVSURMHFWLVQRWFRQVLGHUHG VLJQLILFDQWEHFDXVHWKHSURMHFWZRXOGFUHDWHWHPSRUDU\QHZMREVDQGRQO\WZRSHUPDQHQWMREV$Q\SRSXODWLRQJURZWKUHVXOWLQJ IURPWKHQHZSHUPDQHQWMRESRVLWLRQVZRXOGEHLQVLJQLILFDQWDQGSRVLWLYHWRWKHHFRQRP\DQGZRXOGQRWLPSDFWWKH&RXQW\¶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³+,´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¶VFXUUHQWODQGXVHQRUZLOOLWEHLQFRQVLVWHQWZLWKWKHSUHVHQWLQGXVWULDOXVHV LQWKHYLFLQLW\RIWKHUHILQHU\LQFOXGLQJWKRVHFRQGXFWHGDWWKH3* (VXEVWDWLRQWKH6KRUH7HUPLQDO IRUPHUO\1X6WDU IDFLOLW\ DQGWKH5RGHR6DQLWDU\'LVWULFW7KHUHILQHU\DOVRFRQVLVWVRIDSSUR[LPDWHO\DFUHVRIXQGHYHORSHGODQGDSRUWLRQRIZKLFKLV XVHGE\WKHUHILQHU\DVDEXIIHU]RQHWROLPLWSRWHQWLDOLPSDFWRIWKHUHILQLQJRSHUDWLRQVRQQRQLQGXVWULDOODQGXVHVORFDWHGLQWKH UHILQHU\¶VJHQHUDOYLFLQLW\ 7KHFRQVWUXFWLRQDQGRSHUDWLRQRIWKHSURSRVDOZLOOUHVXOWLQWKHKLULQJRIWHPSRUDU\DQGSHUPDQHQWHPSOR\HHVDWWKHUHILQHU\ )XUWKHULPSOHPHQWDWLRQRIWKH3URSDQH5HFRYHU\3URMHFWZRXOGLQFUHDVHWKHDVVHVVHGYDOXHRIWKHUHILQHU\SURSHUW\ZKLFK ZRXOGH[SDQGWKH&RXQW\¶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²0DVWHU 5HVSRQVHVRQSDJHWKHUHILQHU\DQGWKHFRPPXQLWLHVFRQWLQXHWRZRUNRQDIHQFHOLQHPRQLWRULQJV\VWHPDVUHTXLUHGDV SDUWRIDSUHYLRXVODQGXVHSHUPLW7KH3URSDQH5HFRYHU\3URMHFWDSSHDUVXQOLNHO\WRUHVXOWLQDQLQFUHDVHRIRGRURXVHPLVVLRQV DVFHUWDLQHTXLSPHQWDQGWHFKQRORJ\DUHDQWLFLSDWHGWREHLQVWDOOHGDQGRUXVHGDVSDUWRIWKHIHQFHOLQHPRQLWRULQJV\VWHP 7KH1RLVH(OHPHQWRIWKH*HQHUDO3ODQGRHVFRQWDLQODQGXVHFRPSDWLELOLW\VWDQGDUGVIRUQRLVHZKLFKDUHLQWHQGHGWROLPLWWKH QRLVHLPSDFWV1RLVHIURPRSHUDWLRQRIWKH3URSDQH5HFRYHU\3URMHFWZDVGHWHUPLQHGWREHGHFLEHOVIURPIHHW WKH GLVWDQFHWRWKHFORVHVWUHVLGHQWLDOUHFHSWRUV ZKLFKZRXOGEHOHVVWKDQWKH&RXQW\H[WHULRUGD\QLJKWQRLVHOHYHOWKUHVKROGRI GHFLEHOV$VVHWIRUWKLQWKH)LQDO(,5DQ\QRLVHLPSDFWVIURPFRQVWUXFWLRQZLOOEHPLWLJDWHGWROHVVWKDQVLJQLILFDQWOHYHOV 7HPSRUDU\WUDIILFLPSDFWVIRUWKHFRQVWUXFWLRQRIWKHSURSRVHGSURMHFWZRXOGEHWKHPRVWOLNHO\SRWHQWLDOVRXUFHRI SURMHFWUHODWHGQXLVDQFHVLQWKHYLFLQLW\RIWKHUHILQHU\7KHVHWUDIILFLPSDFWVZLOOEHPLWLJDWHGWROHVVWKDQVLJQLILFDQWOHYHOVE\ WKHLPSOHPHQWDWLRQRI0LWLJDWLRQ0HDVXUHVZKLFKLQFOXGHWKHUHTXLUHPHQWRIWUDIILFFRQWUROSODQVDQGSUHVFULEHG FRQVWUXFWLRQWUDIILFURXWHV7KHUHIRUHWKHSURSRVDOZLOOQRWFUHDWHDQXLVDQFHDQGRUHQIRUFHPHQWSUREOHPZLWKLQWKH QHLJKERUKRRGRUFRPPXQLW\ 7KDWWKHSURSRVHGFRQGLWLRQDOODQGXVHVKDOOQRWHQFRXUDJHPDUJLQDOGHYHORSPHQWZLWKLQWKHQHLJKERUKRRG 3URMHFW)LQGLQJ 7KH3URSDQH5HFRYHU\3URMHFWZLOOEHORFDWHGLQDUHDV]RQHG+,XQGHUWKH&RXQW\2UGLQDQFH&RGHDQG GHVLJQDWHG+HDY\,QGXVWU\LQWKH&RXQW\*HQHUDO3ODQ0RVWRIWKHXQGHYHORSHGODQGDGMDFHQWWRWKH DFUHGHYHORSHGSRUWLRQ RIWKHUHILQHU\LVPDLQWDLQHGE\3KLOOLSVDVRSHQVSDFHWRVHUYHDVDEXIIHUEHWZHHQUHILQLQJRSHUDWLRQVDQGWKHDGMDFHQW QRQLQGXVWULDOODQGXVHV7KHDUHDVWRWKHQRUWKDQGVRXWKZHVWDUHDOUHDG\GHYHORSHGIRULQGXVWULDOXVH7KHUHILQHU\ZLOOQRWDOWHU LWVXVHRIWKHEXIIHU]RQH7KHSURSRVDOLVLQWHQGHGWRUHFRYHUDQGVHOOWKHH[FHVVSURSDQHZKLFKLVDE\SURGXFWWKDWLVDOUHDG\ SURGXFHGDWWKHUHILQHU\GXULQJWKHUHILQLQJSURFHVVDQGEXWQRWVROGEXWLVUDWKHUEXUQHGDVSURFHVVLQJIXHOLQWKHUHILQHU\IXHO JDV7KLVSURMHFWZLOOPDLQWDLQWKHH[LVWLQJODQGXVHLQDPDQQHUWKDWZLOOHQVXUHLWVFRQWLQXHGDELOLW\WRPHHWIXWXUHGHPDQGV7KH SURSRVDOZLOOQRWHQFRXUDJHPDUJLQDOGHYHORSPHQWZLWKLQWKHQHLJKERUKRRG 7KDWVSHFLDOFRQGLWLRQVRUXQLTXHFKDUDFWHULVWLFVRIWKHVXEMHFWSURSHUW\DQGLWVORFDWLRQRUVXUURXQGLQJVDUHHVWDEOLVKHG 3URMHFW)LQGLQJ 7KH3KLOOLSV5RGHRUHILQHU\KDVH[LVWHGLQLWVSUHVHQWORFDWLRQIRUPRUHWKDQ\HDUVDQGLVRQHRIWKHIHZ DUHDVLQWKH&RXQW\VXLWDEOHIRUWKHSURSRVHGSURMHFW7KHSURMHFWDUHDVDUH]RQHG+HDY\,QGXVWULDO'LVWULFW +, E\WKH&RXQW\ 2UGLQDQFH&RGH7KLVGHVLJQDWLRQDOORZVDSHUPLWWHGXVHRIRLOUHILQLQJDQGRWKHUPDQXIDFWXULQJRSHUDWLRQV7KHSURMHFWZLOOQRW UHVXOWLQDQ\FKDQJHVLQWKHH[LVWLQJXVHRIWKHUHILQHU\LQWKDWSURSDQHDQGEXWDQHDUHERWKDOUHDG\SURGXFHGDWWKHIDFLOLW\ 7KHORFDWLRQDQGFXVWRGLDQRIWKHGRFXPHQWVDQGPDWHULDOVWKDWFRPSULVHWKHUHFRUGLV&RQWUD&RVWD&RXQW\'HSDUWPHQWRI &RQVHUYDWLRQDQG'HYHORSPHQW0XLU5RDG0DUWLQH]&$ WHOHSKRQH &RQWDFW /DVKXQ&URVV ,KHUHE\FHUWLI\WKDWWKLVLVDWUXHDQGFRUUHFWFRS\RIDQDFWLRQWDNHQDQGHQWHUHGRQWKHPLQXWHVRIWKH%RDUGRI6XSHUYLVRUVRQWKHGDWHVKRZQ $77(67(' )HEUXDU\ 'DYLG-7ZD&RXQW\$GPLQLVWUDWRUDQG&OHUNRIWKH%RDUGRI6XSHUYLVRUV %\ -XQH0F+XHQ'HSXW\ FF