Air Tractor, Inc Maintenance Page 2-i

AT-602 July 20, 2018

TABLE OF CONTENTS
SECTION 2 - MAINTENANCE
Page No.

INTRODUCTION ............................................................................................... 2-1

AMSAFE AIRBAG SYSTEM ............................................................................ 2-1

AILERON AND FLAPS ..................................................................................... 2-1

Ailerons .................................................................................................... 2-1

Flaps ......................................................................................................... 2-2

Flap Removal ........................................................................................... 2-3

Flap Installation ....................................................................................... 2-3

Aileron and Flap Rigging......................................................................... 2-4

Aileron and Flap Bellcranks and Supports .............................................. 2-4

Flap Actuator ........................................................................................... 2-5

Flap Actuator Troubleshooting ................................................................ 2-6

Flap Motor Troubleshooting .................................................................... 2-7

Flap Actuator Removal Instructions ........................................................ 2-7

Flap Actuator Installation Instructions..................................................... 2-8

Flap Relay Troubleshooting ..................................................................... 2-9

ENGINE DRIVEN AIR CONDITIONER ........................................................ 2-10

Cautionary Information .......................................................................... 2-11

R134a Information ................................................................................. 2-12

Application Specifications ..................................................................... 2-13

Diagnosis Confirmation of Compressor Failure .................................... 2-14

Compressor Repair................................................................................. 2-18

Compressor Replacement ...................................................................... 2-22

Air Tractor, Inc Maintenance Page 2-ii
AT-602 July 20, 2018

TABLE OF CONTENTS
SECTION 2 - MAINTENANCE (Continued)
Page No.

Service Procedures ................................................................................. 2-23

Common Causes of Compressor Failure ............................................... 2-29

AVIONICS ........................................................................................................ 2-30

BATTERIES ...................................................................................................... 2-31

Battery Removal and Replacement ........................................................ 2-31

Checking the Batteries ........................................................................... 2-32

Installing a New Gill Dry-Charged Battery ........................................... 2-33

BRAKES ............................................................................................................ 2-34

Brake Removal and Installation ............................................................. 2-34

Brake Discs ............................................................................................ 2-35

Brake Linings ......................................................................................... 2-35

Brake Master-Cylinders ......................................................................... 2-36

Brake Bleeding....................................................................................... 2-36

Parking Brake......................................................................................... 2-37

COCKPIT CONTROLS ........................................................................ 2-39

ELECTRICAL SYSTEM ...................................................................... 2-39

General ....................................................................................... 2-39

Starter/Generator ........................................................................ 2-40

Voltage Regulator ...................................................................... 2-40

Engine Instruments .................................................................... 2-41

Voltmeter ................................................................................... 2-41

Air Tractor, Inc Maintenance Page 2-iii
AT-602 July 20, 2018

TABLE OF CONTENTS
SECTION 2 – MAINTENANCE (Continued)
Page No.

Low-Voltage Warning Light...................................................... 2-41

Engine Overspeed Solenoid ....................................................... 2-41

Boost Pump ................................................................................ 2-41

Fuel Gauging .............................................................................. 2-42

Wing Flaps ................................................................................. 2-42

Stall-Warning Horn .................................................................... 2-42

Windshield Washer .................................................................... 2-42

Windshield Wiper ...................................................................... 2-43

Cockpit Lighting ........................................................................ 2-43

Flap Light ................................................................................... 2-43

Position and Strobe Lighting ..................................................... 2-43

Taxi Lights ................................................................................. 2-43

Night Working Lights ................................................................ 2-43

Hopper Quantity Gauges............................................................ 2-44

Oil Cooler Blower ...................................................................... 2-45

Air Conditioner .......................................................................... 2-45

ELECTRONIC STARTING AND CHARGING SYSTEM

THEORY OF OPERATION.................................................................. 2-46

Generator Mode ......................................................................... 2-46

Line Contact Relay (LCR) Control ............................................ 2-47

Reverse Current Protection ........................................................ 2-47

Over-Voltage (OV) Protection ................................................... 2-47

Air Tractor, Inc Maintenance Page 2-iv
AT-602 July 20, 2018

TABLE OF CONTENTS
SECTION 2 - MAINTENANCE (Continued)
Page No.

Charging System Troubleshooting Guide .................................. 2-47

General Considerations .................................................. 2-47

Equipment ...................................................................... 2-47

Troubleshooting Procedures .......................................... 2-48

LIGHTING SYSTEM TROUBLESHOOTING .................................... 2-50

Electronic Instrument Light Dimmer ......................................... 2-50

Description ..................................................................... 2-50

Troubleshooting ............................................................. 2-51

ENGINE MAINTENANCE .................................................................. 2-52

Cleaning Engine Exterior ........................................................... 2-53

Fuel Requirements ..................................................................... 2-53

Fuel Filter Cleaning ................................................................... 2-54

Fuel Header Tank Sump Draining ............................................. 2-54

Negative Fuel Pressure Warning ............................................... 2-54

Fuel Nozzle Cleaning ................................................................. 2-55

Oil Requirements ....................................................................... 2-56

Oil Filter ..................................................................................... 2-57

Chip Detector ............................................................................. 2-57

Air Filters ................................................................................... 2-57

Engine Control Cables ............................................................... 2-58

Engine Rigging Procedures........................................................ 2-58

Power Lever ................................................................... 2-58

Air Tractor, Inc Maintenance Page 2-v
AT-602 July 20, 2018

TABLE OF CONTENTS
SECTION 2 – MAINTENANCE (Continued)
Page No.

Propeller Lever............................................................... 2-60

Start Control ................................................................... 2-60

Compressor Washes ................................................................... 2-61

Engine Starting Procedures ........................................................ 2-62

Ground Run Procedures ............................................................. 2-63

FIN AND RUDDER .............................................................................. 2-64

Vertical Fin ................................................................................ 2-64

Rudder ........................................................................................ 2-65

Rudder Controls ......................................................................... 2-65

Rudder Trim Tab........................................................................ 2-66

Rudder Trim Controls ................................................................ 2-66

FUEL SYSTEM ..................................................................................... 2-67

Fuel Tanks .................................................................................. 2-67

Fuel Tank Sealing ...................................................................... 2-67

Fuel Tank Senders...................................................................... 2-68

Fuel Tank Receiver .................................................................... 2-69

Fuel System Drains .................................................................... 2-70

Fuel System Screens and Filters ................................................ 2-70

Airframe Fuel Pump .................................................................. 2-71

Air Tractor, Inc Maintenance Page 2-vi
AT-602 July 20, 2018

TABLE OF CONTENTS
SECTION 2 - MAINTENANCE (Continued)
Page No.

FUSELAGE ........................................................................................... 2-72

Fuselage Removable Skins ........................................................ 2-72

Fuselage Fixed Skins ................................................................. 2-73

Fuselage Cockpit Skins .............................................................. 2-73

Fuselage Frame .......................................................................... 2-73

Windshield ................................................................................. 2-74

Canopy Doors ............................................................................ 2-75

Seat ............................................................................................. 2-76

HOPPER AND DISPERSAL EQUIPMENT ........................................ 2-76

Hopper Tank .............................................................................. 2-76

Hopper Gate Box and Adapter ................................................... 2-77

Hopper Lid ................................................................................. 2-78

Gate Box Controls...................................................................... 2-79

Spray Lever Control ................................................................... 2-79

Spray Pump ................................................................................ 2-80

Spray Plumbing .......................................................................... 2-81

Bottom-Load Plumbing ............................................................. 2-81

Spray Nozzles ............................................................................ 2-82

Flow Rate Chart ............................................................. 2-82

Filling the Hopper Tanks ........................................................... 2-82

Air Tractor, Inc Maintenance Page 2-vii
AT-602 July 20, 2018

TABLE OF CONTENTS
SECTION 2 – MAINTENANCE (Continued)
Page No.

HORIZONTAL STABILIZERS AND ELEVATORS .......................... 2-83

Horizontal Stabilizers................................................................. 2-83

Stabilizer Struts .......................................................................... 2-84

Stabilizer Rigging ...................................................................... 2-85

Elevators .................................................................................... 2-85

Elevator Controls ....................................................................... 2-86

Elevator Trim Tabs .................................................................... 2-86

Elevator Trim Tab Controls ....................................................... 2-87

ITT INSTRUMENT CALIBRATION CHECK .................................... 2-87

Description ................................................................................. 2-87

Procedure ................................................................................... 2-88

LEVELING ............................................................................................ 2-91

LIFTING AND JACKING .................................................................... 2-92

MAIN AND TAIL GEAR ATTACH BOLTS ...................................... 2-93

MAIN LANDING GEAR ...................................................................... 2-93

Main Wheels .............................................................................. 2-93

Main Wheel Alignment.............................................................. 2-94

Main Gear Spring ....................................................................... 2-95

Air Tractor, Inc Maintenance Page 2-viii
AT-602 July 20, 2018

TABLE OF CONTENTS
SECTION 2 - MAINTENANCE (Continued)
Page No.

TIE-DOWN INSTRUCTIONS .............................................................. 2-96

PROPELLER MAINTENANCE ........................................................... 2-97

ROUTINE MAINTENANCE INSPECTON ......................................... 2-98

STATIC SYSTEM ................................................................................. 2-99

STORAGE ............................................................................................. 2-99

STRIPPING AND RE-PAINTING ....................................................... 2-99

Stripping and Re-Painting Aluminum Parts .............................. 2-99

Priming Aluminum Parts with Chromated Alkyd Primer........ 2-101

Stripping and Re-Painting Steel Parts ...................................... 2-101

Materials Used for Stripping, Painting, and Preservation........ 2-102

TAIL LANDING GEAR ..................................................................... 2-103

Tail Wheel ................................................................................ 2-103

Tail Wheel Fork ....................................................................... 2-103

Tail Wheel Fork Housing......................................................... 2-104

Tail Wheel Lock Pin and Housing ........................................... 2-104

Tail Gear Spring ....................................................................... 2-105

TIME LIMITED PARTS ..................................................................... 2-105

Main and Tail Gear Attach Bolts ............................................. 2-106

Tail Spring ............................................................................... 2-106

Air Tractor, Inc Maintenance Page 2-ix
AT-602 July 20, 2018

TABLE OF CONTENTS
SECTION 2 – MAINTENANCE (Continued)
Page No.

Main Gear Spring ..................................................................... 2-106

AmSafe Airbag System............................................................ 2-106

TIRE INFLATION .............................................................................. 2-107

TORQUE VALUES FOR SHOP USE ................................................ 2-108

TOWING ............................................................................................. 2-108

WEIGHT AND BALANCE ................................................................ 2-109

WINGS ................................................................................................ 2-109

Wing Attachment to Fuselage .................................................. 2-109

Wing Center Splice Connection............................................... 2-110

Wing Walk ............................................................................... 2-112

$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


,1752'8&7,21

7KLV VHFWLRQ LV SUHVHQWHG WR GHVFULEH PDLQWHQDQFH IXQFWLRQV WKDW DUH DSSOLFDEOH WR WKH $7
DLUSODQH$LUIUDPHPDLQWHQDQFHLWHPVWKDWDUHQRWVSHFLILFDOO\FRYHUHGLQWKLVVHFWLRQDUHDGGUHVVHG
LQ)$$$GYLVRU\&LUFXODU $& $GGLWLRQDOPDLQWHQDQFHIXQFWLRQVIRUWKHHQJLQHSURSHOOHU
DQGRWKHUDFFHVVRULHVFDQEHIRXQGLQWKHVSHFLILFPDQXIDFWXUHU¶VPDLQWHQDQFHGRFXPHQWDWLRQ

$06$)($,5%$*6<67(0

7KH$P6DIH$LUEDJV\VWHPFRQVLVWVRIDODSEHOWDQGFURWFKVWUDSDWWDFKHGWRWKHVHDWIUDPHDVKRXOGHU
KDUQHVVZLWKLQWHJUDWHGDLUEDJVWZRFRPSUHVVHGJDVLQIODWRUVDQGDQHOHFWURQLFVPRGXOHDQGFDEOLQJ
$OO PDLQWHQDQFH RQ WKH V\VWHP PXVW EH SHUIRUPHG E\ DQ $P6DIH $XWKRUL]HG 6HUYLFH &HQWHU SHU
$P6DIH$YLDWLRQ'RFXPHQW1XPEHU(

7KHPDLQWHQDQFHUHTXLUHPHQWVRIWKHV\VWHPLQFOXGHDQDQQXDOLQVSHFWLRQDQGIXQFWLRQDOWHVWRIWKH
V\VWHP7KHHOHFWURQLFVPRGXOHPXVWEHUHWXUQHGWR$P6DIHIRUUHIXUELVKPHQWDIWHUDSHULRGRIVHYHQ
\HDUVIURPPRQWKRIPDQXIDFWXUHDQGPXVWEHWDNHQRXWRIVHUYLFHDIWHUDSHULRGRI \HDUVIURP
PRQWKRIPDQXIDFWXUH7KHLQIODWRUVPXVWEHUHPRYHGDQGUHSODFHGDIWHUDSHULRGRI\HDUVIURPWKH
PRQWKRIPDQXIDFWXUH

$Q\WLPHDQ\FRPSRQHQWRIWKH$P6DIH$LUEDJV\VWHPLVGLVFRQQHFWHGRUUHPRYHGIURPWKHDLUFUDIW
WKHV\VWHPUHTXLUHVDIXQFWLRQDOWHVWSHUIRUPHGE\DQ$P6DIH$XWKRUL]HG6HUYLFH&HQWHU

$,/(5216$1')/$36

$LOHURQV

7KHDLOHURQVDUHDOOPHWDODQGUHTXLUHYHU\OLWWOHPDLQWHQDQFH7KHOHDGFRXQWHUZHLJKWZLOOVRPHWLPHV
ORRVHQRQWKHORQJ$1$EROWWKURXJKWKHOHDGDQGWKHVXSSRUWWXEH,IWKLVLVWKHFDVHLWZRXOGEH
DGYLVDEOHWRUHPRYHWKHFRXQWHUZHLJKWDQGVXSSRUWWXEHDQGGULOODQGUHDPIRUDODUJHUEROW7RGRWKLV
UHPRYHWKHDLOHURQIURPWKHDLUFUDIWE\UHPRYLQJWKHQXWVIURPWKHWKUHHKLQJHILWWLQJVUHPRYLQJWKH
IRXUVFUHZVLQWKHLQVSHFWLRQSODWHZKHUHWKHSXVKURGDWWDFKHVWRWKHZLQJEHOOFUDQNDQGUHPRYLQJWKH
QXWIURPWKHEROWWKURXJKWKHEHOOFUDQNDQGSXVKURG1RWHWKDWWKHUHLVDVSDFHUZDVKHUEHWZHHQWKH
DOXPLQXPKLQJHDQGWKHVXSSRUWDUPEHDULQJDQGWKDWWKHUHLVD$1ODUJHZDVKHURQWKHRXWERDUG
VLGHRIWKHEHDULQJXQGHUWKHEROWKHDG

:LWKWKH$1$EROWVSRLQWLQJLQERDUGWKHFRUUHFWRUGHURISDUWVLVD$1ZDVKHUXQGHUWKH
EROWKHDGWKHQD$1/ZDVKHUWKHQWKHEHDULQJWKHQD$1ZDVKHUWKHQWKHDOXPLQXP
DLOHURQKLQJHWKHQD$1ZDVKHUWKHQD$1QXW7KHVWHHOLQERDUGKLQJHXVHVD$1
$EROWZLWKDQ$1ZDVKHUXQGHUWKHKHDGWKHQD$1ZDVKHUWKHQWKHEHDULQJWKHQ
WKHVWHHOKLQJHWKHQDQ$1ZDVKHUWKHQD$1QXW/HDYHWKHSXVKURGDWWDFKHGWR
WKHDLOHURQDQGUHDFKWKURXJKWKHLQVSHFWLRQSODWHRSHQLQJDQGUHPRYHWKHEROWDWWDFKLQJWKHSXVKURG
WRWKHZLQJEHOOFUDQN%HVXUHWRKDYHVRPHRQHKROGLQJXSRQWKHDLOHURQWUDLOLQJHGJHDQGWKHFRQWURO
VWLFNORFNVKRXOGEHLQSODFH7KHQUHPRYHWKHFHQWHUKLQJHEROWZLWKVRPHRQHDWHDFKHQGRIWKH
DLOHURQUHPRYHWKHWZRRXWERDUGEROWVOLIWXSRQWKHSXVKURGWRNHHSLWIURPGUDJJLQJDQGUHPRYH
WKHDLOHURQIURPWKHDLUFUDIW
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


$GLDJUDPVKRZLQJSURFHGXUHVWRUHPRYHDQGLQVWDOOWKHDLOHURQLVVKRZQLQ)LJXUH

7KHFRXQWHUZHLJKWVXSSRUWWXEHLVSQDQGFDQEHUHPRYHGIURPWKHDLOHURQE\UHPRYLQJWKH
WZRSOXJEXWWRQVRQWKHXSSHUDQGORZHUVLGHRIWKHDLOHURQQRVHVNLQDQGUHPRYLQJWKH$1$EROW
WKDWDWWDFKHVWKHVXSSRUWWXEHWRWKHVXSSRUWVWUXFWXUHWKDWLVULYHWHGWRWKHDLOHURQ7KHFRXQWHUZHLJKW
DQG VXSSRUW WXEH FDQ WKHQ EH WDNHQ WR WKH ZRUNEHQFK ZKHUH WKH ORQJ $1$ EROW LV UHPRYHG
/HDYLQJWKHSDUWVWRJHWKHUFODPSWKHFRXQWHUZHLJKWWRWKHEDVHRIWKHGULOOSUHVVXVLQJDORQJ
GULOOELWFKXFNHGLQWKHGULOOSUHVVDOLJQWKHVSLQGOHZLWKWKHKROHWKURXJKWKHFRXQWHUZHLJKWDQG
VXSSRUWWXEH7KHQFKDQJHWRDGULOOELWDQGHQODUJHWKHKROH7KHQUHDPWKURXJKERWKSDUWV
*UHDVHWKHQHZ$1$EROWDQGLQVWDOO5HLQVWDOOWKHFRXQWHUZHLJKWDQGVXSSRUWWXEHRQWKHDLOHURQ
DQGFKHFNIRUDVQXJILW7KH$1EROWVKDYHDWRUTXHRILQFKSRXQGVDSSOLHGDWWKHQXWWKH$1
EROWVKDYHDWRUTXHRILQFKSRXQGVDSSOLHGDWWKHQXW%RQGWKHFRXQWHUZHLJKWWRWKHDLOHURQZLWK
35$ WKLVLVGRQHRQRULJLQDODVVHPEO\DWWKHIDFWRU\ 5HLQVWDOOWKHDLOHURQLQWKHUHYHUVHRUGHU
DVUHPRYHGWDNLQJFDUHWKDWWKHZDVKHUDUUDQJHPHQWLVFRUUHFW7KHEROWWKURXJKWKHSXVKURGDQG
ZLQJEHOOFUDQNLVDQ$1$ZLWKD$1ZDVKHUXQGHUWKHKHDGDQGRQHXQGHUWKH$1
$QXW

:KLOHWKHDLOHURQLVUHPRYHGFKHFNWKHDOXPLQXPKLQJHVIRUVHFXUHDWWDFKPHQWWRWKHVSDUDQGFKHFN
WKHVWHHOKLQJHIRUVLJQVRIFRUURVLRQRLOORRVHULYHWVRUFUDFNVLQWKHZHOGHGDUHDV,QVSHFWERWKHQGV
RIWKHSXVKURGVIRUFUDFNVLQWKHWKUHDGVFKHFNWKHURGHQGEHDULQJ )DIQLU5() IRUFRQGLWLRQ
DQGOXEULFDWLRQDQGEHVXUHWKHFKHFNQXWDJDLQVWWKHEHDULQJLVVQXJ

$IWHU WKH DLOHURQ KDV EHHQ UHLQVWDOOHG DQG DQ LQVSHFWLRQ RI DOO FRQQHFWLRQV KDV EHHQ PDGH UHDFK
WKURXJKWKHLQVSHFWLRQSODWHRSHQLQJDQGFKHFNWRVHHLIWKHSXVKURGLVIUHHWRURWDWHVOLJKWO\DVWKH
DLOHURQLVPRYHGWKURXJKWKHIXOOUDQJHRIWUDYHO$IWHUEHLQJVXUHWKHEROWWKURXJKWKHSXVKURGDQG
ZLQJEHOOFUDQNKDVEHHQWRUTXHGUHLQVWDOOWKHLQVSHFWLRQSODWHZLWKWKHIRXUVFUHZV

7KHEHDULQJVLQWKHDLOHURQVXSSRUWDUPVDUH)DIQLU.3$DQGPDNHDSUHVVILWLQWRWKHDOXPLQXP
DUPDQGDUHVWDNHGRQERWKVLGHV7KHVHEHDULQJVDUHVHDOHGUHTXLUHQROXEULFDWLRQDQGVKRXOGJLYH
ORQJOLIH

)ODSV

7KHIODSVDUHDWWDFKHGWRWKHDOXPLQXPRXWERDUGDQGLQERDUGIODSDUPVZLWK$1$EROWV7KH
RUGHURIZDVKHUVDQGSDUWVZLWKWKHEROWSRLQWLQJLQERDUGLVD$1ODUJHZDVKHUXQGHUWKHEROW
KHDGWKHQWKHEHDULQJ )DIQLU.3 WKHQWKHVWHHOIODSDUPWKHQD$1ZDVKHUWKHQD$1
QXW7KHIODSVDUHDWWDFKHGWRWKHPLGGOHIODSDUPZLWK$1$EROWV7KHRUGHURISDUWVZLWK
WKHEROWSRLQWLQJLQERDUGLVD$1ZDVKHUXQGHUWKHEROWKHDGDQGXQGHUWKH$1QXW


$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


7KHIODSSXVKURGLVDWWDFKHGWRWKHIODSZLWKD$1$EROWWKDWLVSRLQWLQJRXWERDUGDQGWKHRUGHU
RISDUWVLV$1ZDVKHUXQGHUWKHEROWKHDGWKHQD$1ZDVKHUWKHQWKHVWHHOIODSDUP
WKHQD$1ZDVKHUDQGILQDOO\WKH$1QXW

7KHSXVKURGKDVDQDGMXVWDEOH)DIQLU5()EHDULQJZLWKD$1FKHFNQXW%HVXUHWKDWWKH
EHDULQJLVSRVLWLRQHGWRDOORZWKHSXVKURGWREHURWDWHGVOLJKWO\IURPVLGHWRVLGH

'XULQJDQQXDOLQVSHFWLRQVWKH$1$EROWWKURXJKWKHSXVKURGVKRXOGEHFKHFNHGIRUVWUDLJKWQHVV
DQGLIEHQWERWKWKHEROWDQGEHDULQJVKRXOGEHUHSODFHGLPPHGLDWHO\$WKRXULQWHUYDOVUHPRYH
WKHORZHUIXVHODJHVLGHVNLQVXQGHUWKHFRFNSLWDQGZKLOHWKHIODSVDUHEHLQJF\FOHGWKURXJKWKHIXOO
UDQJHRIWUDYHOFKHFNWRVHHLIWKHSXVKURGVGUDJRQDQ\IXVHODJHSDUWV:LWKWKHIODSVIXOOXSPRYH
WKHDLOHURQVWKURXJKWKHIXOOUDQJHRIWUDYHODQGFKHFNFRQWUROV\VWHPFOHDUDQFHV

'HWDLOV VKRZLQJ IODS UHPRYDO DQG LQVWDOODWLRQ DUH VKRZQ LQ )LJXUH   7KH SURFHGXUHV IRU WKHVH
RSHUDWLRQVDUHVKRZQEHORZ

)ODS5HPRYDO

5HPRYHIXVHODJHVLGHVNLQLPPHGLDWHO\LQERDUGRIWKHIODS¶VOHDGLQJHGJH

3DUWLDOO\H[WHQGWKHIODSWRJDLQHDV\DFFHVVWRWKHEROWWKDWDWWDFKHVWKHIODSSXVKURGWRWKH
IODS

5HPRYHWKH$1EROWWKDWDWWDFKHVWKHIODSSXVKURGWRWKHIODS

$OORZWKHWUDLOLQJHGJHRIWKHIODSWRUHVWRQWKHERRPKDQJHUV

5HPRYHWKHQXWVIURPWKH$1EROWVWKDWFRQQHFWWKHIODSVWRWKHIODSVXSSRUWEUDFNHW
EHDULQJV

5HPRYHWKHZDVKHUVDQGEROWIURPWKHFHQWHUODSVXSSRUWEHDULQJ

:LWKDVVLVWDQFHLQVXSSRUWLQJWKHIODSDWERWKHQGVUHPRYHWKHUHPDLQLQJZDVKHUVDQGWKH
LQERDUGDQGRXWERDUGEROWV

&DUHIXOO\OLIWWKHIODSFOHDURIWKHDLUSODQH

)ODS,QVWDOODWLRQ

 7KHIODSLVLQVWDOOHGE\UHYHUVLQJWKHSURFHGXUHVOLVWHGXQGHU)/$35(029$/


3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


$LOHURQDQG)ODS5LJJLQJ

:LWKWKHIODSDFWXDWRULQWKH83SRVLWLRQWKHIODSSXVKURGVDUHDGMXVWHGVRWKDWWKHORZHUVLGHRIWKH
IODSVIRUPDVWUDLJKWOLQHZLWKWKHORZHUVLGHRIWKHIXHOWDQNDWVWDWLRQ)ODSWUDYHOIURPWKLV
SRLQWLVWKHQVHWƒ“ƒ)ODSPDUNLQJVRQWKHIODSDUHORFDWHGRSSRVLWHWKHZLQJIODSED\XSSHU
VNLQVRWKDWWKHSLORWZLOOYLHZWKHPDUNLQJVDWƒƒDQGDWIXOOWUDYHO8VHDSURWUDFWRUDQGDGMXVW
WKHIODSWUDYHOOLPLWPLFURVZLWFKHVWRREWDLQWKHSURSHUWUDYHO7KHDLOHURQVDUHULJJHGZLWKWKHWUDLOLQJ
HGJH  WR  EHORZ WKH IODS WUDLOLQJ HGJH VR WKDW IOLJKW ORDGV ZLOO EULQJ WKH WUDLOLQJ HGJH XS
DSSUR[LPDWHO\HYHQZLWKWKHIODSWUDLOLQJHGJH$LOHURQWUDYHO ZLWKIODSVXS LVƒXS “ƒ DQGƒ
GRZQ “ƒ $LOHURQFRQWUROVWRSVDUHORFDWHGXQGHUWKHFRFNSLWIORRURQHDFKVLGHRIWKHWRUTXHWXEH
KRUQDQGLQWKHZLQJIRUZDUGRIWKHLQERDUGHQGRIWKHDLOHURQ7KHDGMXVWPHQWFRQVLVWVRIWLJKWHQLQJ
RUORRVHQLQJWKHEROWVWKDWFRPSUHVVDVWDFNRIWRQHRSUHQHZDVKHUV SQ 7KHQHRSUHQH
ZDVKHUVDFWDVVKRFNDEVRUEHUVIRUWKHFRQWUROV\VWHPEXWVRPHWLPHVVSOLWDQGIDOORXWVRLWLVDGYLVDEOH
WRLQVSHFWWKHVWRSVGXULQJDQQXDOLQVSHFWLRQV

7KHFRQWUROVWRSVLQWKHZLQJDUHXSDLOHURQVWRSVRQO\7KH\XVHDVSULQJORDGHGSOXQJHUWRFXVKLRQ
WKHVKRFNRIFRQWDFWZLWKWKHVWRSV

$LOHURQDQG)ODS%HOOFUDQNVDQG6XSSRUWV

7KH DLOHURQ EHOOFUDQN EHQHDWK WKH FRFNSLW IORRU LV SQ  DQG LV LQWHUFKDQJHDEOH ULJKW WR OHIW
7KHVHEHOOFUDQNVKDYH)DIQLU.3$EHDULQJVLQVWDOOHGZLWKDVWDLQOHVVVSDFHUWKDWDOORZVWKH
$1$EROWWKDWFRQQHFWVWKHEHOOFUDQNWRWKHVXSSRUWIUDPHDVVHPEO\WREHIXOO\WRUTXHG LQFK
SRXQGVDWWKHQXW 

7KH.3$EHDULQJVDUHVHDOHGDQGUHTXLUHQROXEULFDWLRQ6RPHHQGSOD\ZLOOGHYHORSGXHWRWROHUDQFH
DFFXPXODWLRQEXWXSWRLVDFFHSWDEOH

7KHDLOHURQEHOOFUDQNVLQWKHZLQJVDUHDWWDFKHGWRDZHOGHGVWUXFWXUHZLWKDQ$1$EROWDQGKDYH
DSQVWDLQOHVVVSDFHUWRDOORZIXOOEROWWRUTXH%HDULQJVDUH)DIQLU.3$7KHZLQJEHOOFUDQNV
DUHSQ /+ DQG 5+ 0D[LPXPHQGSOD\RIWKHZLQJEHOOFUDQNLV7KHEROW
DWWDFKLQJWKHZLQJEHOOFUDQNVPD\EHUHDFKHGE\UHPRYLQJWKHSOXJEXWWRQV  RQWKHWRSDQG
ERWWRPVNLQV7RUHPRYHWKHEHOOFUDQNIURPWKHZLQJLWLVQHFHVVDU\WRUHPRYHVRPHULYHWVDWWDFKLQJ
WKHORZHUZLQJVNLQ5HPRYHULYHWVWKDWFDQEHHDVLO\UHDFKHGIRUUHLQVWDOODWLRQ

7KHƒEHOOFUDQNVWKDWDWWDFKWRWKHIXVHODJHIUDPHDUHSQDQGDUHLQWHUFKDQJHDEOH5+WR
/+7KH\DUHFRQQHFWHGWRWKHIXVHODJHIUDPHZLWK$1$EROWVDQGSQRUVSDFHU
EXVKLQJVWRDOORZIXOOWRUTXHRILQFKSRXQGVWREHXVHGGXULQJEROWLQVWDOODWLRQ$WHDFKHQGRIWKH
VSDFHUEXVKLQJLVDODUJHZDVKHUWRFRQWDLQWKH7RUULQJWRQSQ%QHHGOHEHDULQJ7KHVH
QHHGOHEHDULQJVVKRXOGEHFKHFNHGFOHDQHGDQGSDFNHGZLWKJHQHUDOSXUSRVHJUHDVHRQFHD\HDUGXULQJ
DQQXDOLQVSHFWLRQV'XULQJUHDVVHPEO\PDNHVXUHWKDWWKHVSDFHUEXVKLQJKDV


$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


EHHQIDFHGRIIVTXDUHRQHDFKHQGEHFDXVHLILWLVQRWWKHVOLJKWFKDPIHURUEHYHOZLOOFDXVHWKH
ZDVKHUWRGLVWRUWDQGGUDJWKHIDFHRIWKHEHOOFUDQN:LWKWKH$1$EROWIXOO\WRUTXHGWKHUH
VKRXOGEHDSRVLWLYHFOHDUDQFHEHWZHHQWKHZDVKHUVDQGWKHEHOOFUDQNZLWKHQGSOD\QRWWR
H[FHHG&KHFNWKHEHOOFUDQNHQGIRUH[FHVVLYHZREEOHWKDWZRXOGLQGLFDWHDZRUQQHHGOHEHDULQJ
VSDFHUEXVKLQJRUERWK7KHQHHGOHEHDULQJVKRXOGOLJKWO\SUHVVILWLQWRWKHERUHRIWKHEHOOFUDQNDQG
WKHVSDFHUEXVKLQJVKRXOGEHDORRVHVOLGLQJILWLQVLGHWKHQHHGOHEHDULQJ7KHEROWVKRXOGPDNHDORRVH
VOLGLQJILWRQWKHVSDFHUEXVKLQJ:KLOHWKHEHOOFUDQNLVUHPRYHGFKHFNIRUDQ\VLJQRIEHQGLQJRIWKH
SODWHVRUFUDFNVLQWKHZHOGV7KHVHEHOOFUDQNVDUHVXEMHFWWREHQGLQJLIWKHDLUFUDIWLVSDUNHGZLWKWKH
WDLOLQWRDKLJKZLQGDQGWKHDLOHURQVEHJLQDIOXWWHULQJPRWLRQHYHQWKRXJKWKHFRQWUROVWLFNLVORFNHG
,IWKHEHOOFUDQNVDUHEHQWUHSODFHWKHP

7KHEHOOFUDQNMXVWDIWRIWKHƒRQHLVSQ,WDWWDFKHVWRWKHIUDPHZLWKDQ$1$EROW
ZLWKWKHVDPHEHDULQJVSDFHUDQGZDVKHUVRQHDFKVLGH,WLVVHUYLFHGMXVWOLNHWKHƒEHOOFUDQN

7KHIODSWRUTXHWXEHLVDWWDFKHGWRWKHIXVHODJHIUDPHZLWKWZR$1$EROWV7KHEHDULQJVZKLFK
DUHSUHVVHGLQWRWKHWRUTXHWXEHILWWLQJVDQGVWDNHGDUH10%3106DQGDUHVSKHULFDOEHDULQJV
ZLWKDVWDLQOHVVEDOODQGD7HIORQOLQLQJ$VWKLVW\SHRIEHDULQJKDVVRPHGUDJEHVXUHWKH$1$
DWWDFKEROWVDUHIXOO\WRUTXHG7KHVHEHDULQJVGRQRW UHTXLUHOXEULFDWLRQ7KHGLDPHWHUIODS
WRUTXHWXEHFRQVLVWVRIWKHZHOGHGDVVHPEO\DQGEHDULQJVRQO\$WWKHH[WUHPHHQGRIHDFKVLGHRIWKH
WRUTXHWXEHLV DDOXPLQXP DUP SQ ZKLFKDOVR KDV D10%SQ 06EHDULQJ
LQVWDOOHG7KHWZRIODSSXVKURGVDWWDFKWRWKHEHDULQJVZLWK$1$EROWDQGVKRXOGEHWRUTXHGWR
LQFKSRXQGVDWWKHQXWWKHVDPHDVWKHIXVHODJHDWWDFKEROWV

)ODS$FWXDWRU

'HWDLOVRIWKHIODSDFWXDWRUDUHVKRZQLQ )LJXUH7KHIODSDFWXDWRUDVVHPEO\LVD&RPPHUFLDO
$LUFUDIW3URGXFWVSQ&7KLVDFWXDWRUXVHVPLFURVZLWFKHVWROLPLWWKHGRZQDQGXSWUDYHO
RI WKH IODSV 7KH PLFURVZLWFKHV DUH SQ %=5$ DQG WKH DUP ZLWK WKH UROOHU DWWDFKHG WKDW
DFWXDWHVWKHPLFURVZLWFKLVD$1DUP

7KHPRWRUIRUWKHDFWXDWRUFDQEHSXUFKDVHGVHSDUDWHO\DQGLVSQ'7KHDFWXDWRUDVVHPEO\
DWWDFKHVWRWKHIXVHODJHIUDPHZLWKD$1$EROW$WWKLVFRQQHFWLRQWKHUHLVDOVRDVSDFHU
EXVKLQJDQGD%XQWLQJ3EURQ]HEXVKLQJ,IWKHDFWXDWRULV UHSODFHGRUUHPRYHGEHVXUHERWK
EXVKLQJVDUHLQSODFH

7KHDFWXDWRUDVVHPEO\KDVDWKUHDGHGFROODU7KLVFROODULVWKUHDGHGLQWHUQDOO\WRPDWFKWKHWKUHDGVRQ
WKHZRUPGULYHWKUHDGVRIWKHDFWXDWRUDQGLVWKUHDGHGH[WHUQDOO\WRPDWFKWKHWKUHDGVRIWKH$LU7UDFWRU
7HHDVVHPEO\ZKLFKLVSQ7KH7HHDVVHPEO\LVDWWDFKHGWRWKHWZRDOXPLQXP
DUPDVVHPEOLHVWKDWDUHEROWHGWRWKHIODSWRUTXHWXEHDVVHPEO\7KH7HHDVVHPEO\KDVDVWHHOJUHDVH
VKLHOGDQGFDSDWWDFKHG7KHVKLHOGLVSQDQGLVDWWDFKHGWRWKH7HHZLWKWZR$1$
VFUHZVDQGORFNZDVKHUV7KHFDSLVD6&&DSOXJDWWDFKHGWRWKHVKLHOGZLWKD7<7\UDS

0DLQWHQDQFH3DJH $LU7UDFWRU,QF
-XO\ $7


7KH7HHDVVHPEO\WKDWVFUHZVLQWRWKH7KUHDGHGEDOOQXWKDVD$1'+VHWVFUHZWKDWLVORFDWHG
RQWKHWRSVXUIDFHRIWKH7HH7KHEDOOQXWKDVDODUJHGLDPHWHUURXQGHGVXUIDFHDQGMXVWIRUZDUGLVD
VPDOOHU GLDPHWHU SDUW RQ WKH EDOO QXW WKDW LV WR EH XVHG IRU WLJKWHQLQJ WKH EDOO QXW DJDLQVW WKH 7HH
:KHQHYHULWLVQHFHVVDU\WRUHPRYHWKHIODSDFWXDWRUWKHIDFWRU\SUDFWLFHLVWRUHPRYHWKHJURXQGZLUH
IURPDLUIUDPHDQGGLVFRQQHFWWKHIODSDFWXDWRUSRZHUZLUHZULVWORFNV5HPRYHWKH$1EROWVWKDW
KROGWKHDUPIURPWKHWHHWRWKHWRUTXHWXEH$VWKHVHEROWVDUHUHPRYHGKDYHVRPHRQHKROGXSWKH
WUDLOLQJHGJHRIWKHIODSVVRWKH\ZLOOQRWIDOO5HPRYHWKH$1EROWIURPWKHDFWXDWRUJHDUER[DQG
DLUIUDPHHDUV&DUHIXOO\OLIWWKHDFWXDWRUDVVHPEO\RXWRIWKHDLUIUDPH




 &$87,21
 +DYHVRPHRQHKROGXSRQWKHIODSWUDLOLQJHGJHVRWKHIODSV
 ZLOOQRWIDOOGRZQDJDLQVWWKHERRPKDQJHUV




$OOZLUHVIURPWKHIODSDFWXDWRUDVVHPEO\KDYH:ULVWORFNFRQQHFWLRQVVRWKDWLWLVQRWQHFHVVDU\WRFXW
RUVSOLFHZLUHVZKHQWKHDFWXDWRULVUHPRYHG$OVRLWLVSRVVLEOHWRUHSODFHWKHPRWRUZLWKRXWUHPRYLQJ
WKHDFWXDWRUDVVHPEO\

)ODS$FWXDWRU7URXEOHVKRRWLQJ

,IDQ\WURXEOHGHYHORSVILUVWFKHFNERWKWKHIODSFLUFXLWEUHDNHUDQGIODSVZLWFKFLUFXLWEUHDNHURQWKH
SDQHO,IWKLVGRHVQRWSURGXFHDQ\UHVXOWVDYLVXDOLQVSHFWLRQRIWKHPLFURVZLWFKHVDQGPLFURVZLWFK
DUPVVKRXOGEHPDGH(QWHUWKHIXVHODJHDQGLQVSHFWWKHPLFURVZLWFKHVIRUEURNHQDFWXDWRUDUPVRU
ORRVHZLUHV,QVSHFWWKHUHOD\VIRUEURNHQRUORRVHZLUHV

,IWKHIODSVDUHXSEXWZRQ¶WJRGRZQFKDQFHVDUHWKHUHLVVRPHWKLQJZURQJZLWKWKHGRZQPLFUR
VZLWFK  ,I WKH IODSV DUH GRZQ EXW ZRQ¶W JR XS ORRN IRU WURXEOH ZLWK WKH XS PLFURVZLWFK  ,I LW LV
QHFHVVDU\WRNHHSIO\LQJDQGPDNHUHSDLUVODWHUWKHIODSVFDQEHUHWUDFWHGE\URWDWLQJE\KDQGWKHUXEEHU
FRXSOLQJDWWKHPRWRUVKDIW7KLVLVVORZEXWWKHIODSVFDQEHUDLVHGWKLVZD\

,IWKHIODSJRHVGRZQSDVWWKHƒPDUNFKHFNWKHGRZQPLFURVZLWFK+DYHVRPHRQHF\FOHWKHIODSV
DQGVHHLIWKHUROOHURQWKHPLFURVZLWFKDUPOLIWVSURSHUO\RQWKHVWULNHUSODWHDQGSXVKHVLQWKHPLFUR
VZLWFK SOXQJHU WR VWRS WKH WUDYHO  ,I WKHUH LV DQ\ GRXEW SXVK WKH SOXQJHU LQ ZLWK WKH IODS PLGZD\
WKURXJKWKHVWURNH,IWKHVZLWFKLVZRUNLQJWKHIODSZLOOVWRS,QWKLVFDVHWKHGRZQPLFURVZLWFK
QHHGVWREHUHSRVLWLRQHGWRDFWLYDWHWKHPLFURVZLWFK


$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


&KHFNWKHPLFURVZLWFKHVZLWKDQ2KPPHWHU&KHFNFRQWLQXLW\EHWZHHQWKH&SLQDQGWKH1&3LQ
RQERWKVZLWFKHV$FWLYDWHWKHVZLWFKE\SXVKLQJWKHSOXQJHULQDQGFKHFNFRQWLQXLW\EHWZHHQWKH&
SLQDQGWKH123LQ,IWKHVHFKHFNVDUHSRVLWLYHWKHPLFURVZLWFKHVDUH2.DQGGRQRWQHHGWREH
FKDQJHG,IDVZLWFKLVEDGFKDQJHLW

)ODS0RWRU7URXEOHVKRRWLQJ

,IWKHPLFURVZLWFKHVDSSHDU2.WKHIODSPRWRUPD\EHFKHFNHGDVIROORZV

 1RWHZKLFKZLUHWKHEODFNDQGUHGZLUHIURPWKHPRWRUFRQQHFWVWR

 6OLGHWKHFRQGXLWGRZQIURPWKHZLUHVSOLFH :ULVWORFN ZKHUHWKHUHGDQGEODFNZLUHVJR
LQWRWKHZLUHEXQGOH'LVFRQQHFWWKHZULVWORFNV

 8VHDQRXWVLGHVRXUFHRISRZHU YROWV SURWHFWHGZLWKDFLUFXLWEUHDNHU&RQQHFWWKH
QHJDWLYHSRZHUVRXUFHWRWKHEODFNZLUHIURPWKHPRWRU7RXFKWKHSRVLWLYHOHDGIURPWKH
SRZHUVRXUFHWRWKHPRWRU¶VUHGZLUH7KHPRWRUVKRXOGUXQDQGWKHIODSVVKRXOGJRGRZQ
5HYHUVHWKHOHDGVDQGWKHPRWRUVKRXOGUXQLQWKHRWKHUGLUHFWLRQ

 ,IWKHPRWRUGRHVQRWUHVSRQGDVGHVFULEHGDERYHLWLVIDXOW\DQGVKRXOGEHUHSODFHG,WLV
DWWDFKHGWRWKHDFWXDWRUE\WZRQXWV%HVXUHUXEEHUFRXSOLQJLVLQJRRGFRQGLWLRQ
ZKHQPRWRULVUHSODFHG

)ODS$FWXDWRU5HPRYDO,QVWUXFWLRQV

 'LVFRQQHFW DOOZLUHV DW ZULVWORFNFRQQHFWLRQVLQ ZLUHKDUQHVVDQGLGHQWLI\ZLUHV IRUUH
DVVHPEO\

 5HPRYHWKH$1EROWVWKDWDWWDFKWKHDOXPLQXPDUPVRQWKHIODS7HHWRWKHWRUTXHWXEH



 &$87,21

+DYHVRPHRQHKROGXSWKHIODSWUDLOLQJHGJHEHIRUHWKHODVW

 EROWVDUHUHPRYHG



 5HPRYH WKH QXW DQG ZDVKHU IURP WKH $1 EROW DWWDFKLQJ WKH DFWXDWRU DVVHPEO\ WR WKH
IXVHODJHIUDPH


3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


 5HPRYH WKH $1 EROW SD\LQJ FORVH DWWHQWLRQ WR WKH VSDFHU EXVKLQJ LQVLGH WKH EURQ]H
EXVKLQJDQGORZHUWKHIODSVWRUHVWRQERRPKDQJHUV

 &KHFNUXEEHUFRXSOLQJRQPRWRUVKDIWIRUH[FHVVLYHEDFNODVK

:LWKWKHFRPSOHWHDFWXDWRURQWKHZRUNEHQFKLILWLVGHVLUHGWRFKDQJHWKHDFWXDWRUJHDUER[SHUIRUP
WKHIROORZLQJ

 5HPRYHWKHWZRVFUHZVWKDWKROGWKHGXVWVKLHOGWRWKHORZHUHQGRIWKHDVVHPEO\

 8VH RSHQ HQG ZUHQFK WR UHPRYH GRZQ RYHUULGH VWRS QXW IURP HQG RI MDFNVFUHZ
&$87,217KLVVWRSLVOHIWKDQGWKUHDGV

 /RRVHQWKHVHWVFUHZLQWKHWRSRIWKH7HHDVVHPEO\ZLWKDVPDOO$OOHQZUHQFK

 :LWKZDWHUSXPSSOLHUVRUYLVHJULSVEUHDNORRVHWKHEDOOQXWIURPWKH7HHDVVHPEO\

 8QVFUHZEDOOQXWE\KDQGRXWRI7HHDVVHPEO\

7RLQVWDOOQHZDFWXDWRUXVHWKHUHYHUVHSURFHGXUHEXWDSSO\DIHZGURSVRI/RFNWLWHWRHQGRIMDFN
VFUHZWKUHDGVEHIRUHDWWDFKLQJWKHOHIWKDQGWKUHDGHGVWRS:KHQDOOSDUWVDUHLQVWDOOHGWKHFRPSOHWH
XQLWLVUHDG\WREHLQVWDOOHGLQDLUFUDIW:KHQDVVHPEOLQJWKHEDOOQXWDQG7HHEHFDUHIXOQRWWRGHQWRU
GDPDJHWKHH[WHULRURIWKHEDOOQXW

)ODS$FWXDWRU,QVWDOODWLRQ,QVWUXFWLRQV

7KHGHWDLOVIRUIODSDFWXDWRULQVWDOODWLRQDUHVKRZQLQ)LJXUH

 5HLQVWDOODFWXDWRULQDLUFUDIWLQUHYHUVHRUGHUDVUHPRYDO

 5DLVHIODSVWRIXOOXSSRVLWLRQZLWKIODSVZLWFKLQFRFNSLW&KHFNSRVLWLRQRIIODSVUHODWLYH
WRZLQJ 6HH)ODSDQG$LOHURQ5LJJLQJVHFWLRQRIWKLVPDQXDO 

 :LWKIODSVSURSHUO\SRVLWLRQHGZLWKUHVSHFWWRWKHORZHUVLGHRIWKHZLQJWKHUHVKRXOGEH
DJDSWREHWZHHQWKHEDOOQXWHQGDQGWKHJHDUER[IDFH,IWKHJDSLVQRWZLWKLQ
WKHSURSHUUDQJHXVHWKHIODSVZLWFKLQWKHFRFNSLWWRSURYLGHWKHSURSHUJDS,WZLOOWKHQ
EHQHFHVVDU\WRVHWWKHIODSSRVLWLRQZLWKUHVSHFWWRWKHORZHUZLQJVXUIDFHE\DGMXVWLQJ
WKHIODSSXVKURGV




$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


 7KHQORRVHQWKHWZRVFUHZVKROGLQJWKH83PLFURVZLWFKDQGDGMXVWWKHPLFURVZLWFKXQWLO
DFOLFNLVKHDUG7LJKWHQWKHWZRVFUHZVDQGRQFHPRUHXVHWKHIODSVZLWFKWRORZHUDQG
WKHQUDLVHWKHIODSVWRWKHIXOO83SRVLWLRQ$JDLQFKHFNWKHJDSEHWZHHQWKHEDOOQXWHQG
DQGWKHJHDUER[IDFHIRUWRJDS&KHFNWKHSRVLWLRQRIWKHIODSVZLWKUHVSHFW
WRWKHORZHUZLQJVXUIDFH,IDOOLVLQRUGHUSURFHHGWRVHWWKH'2:1PLFURVZLWFK

 ([WHQGWKHIODSVWRGHJUHHVDQGDGMXVWWKHPLFURVZLWFKXQWLODFOLFNLVKHDUG5HF\FOH
WKHIODSVDQGFKHFN'2:1WUDYHODJDLQ8VHDSURWUDFWRUWRPHDVXUHWKHIODSWUDYHO

 5HFKHFNWKHSRVLWLRQRIWKH83PLFURVZLWFKWZRZD\V5DLVHWKHIODSVDOOWKHZD\ZLWK
WKHIODSVZLWFK$IWHUWKHIODSVDUHIXOO\UHWUDFWHGFRQWLQXHWRKROGWKHIODSVZLWFKXSDQG
REVHUYHWKH9ROWPHWHU,IWKH9ROWPHWHUVKRZVH[FHVVLYHYROWDJHGURSWKHPLFURVZLWFK
KDVQRWWXUQHG2))WKHFXUUHQW,IWKLVFKHFNLV2.WKHQFKHFNWKHGLVWDQFHEHWZHHQWKH
EDOOQXWHQGDQGWKHJHDUER[IDFHZKLFKVKRXOGEHWRDVPHQWLRQHGLQVWHSV
DQG


)ODS5HOD\7URXEOHVKRRWLQJ

,IWKHPLFURVZLWFKHVDQGWKHIODSPRWRUDSSHDU2.WKHQWKHWURXEOHPD\EHLQWKHUHOD\V'HWDLOVRI
WKHIODSUHOD\VDUHVKRZQLQ)LJXUH

:LWKWKHPDVWHUVZLWFKRQXVHDYROWPHWHUWRFKHFNWKDWWKHUHLVSRZHUWRWKHUHOD\VDWWKHDQG
ZLUHV,IWKHUHLVEDWWHU\YROWDJHWKHUHKDYHVRPHRQHDWWHPSWWRH[WHQGDQGUHWUDFWWKHIODSVZLWK
WKHIODSVZLWFKZKLOHFKHFNLQJIRUEDWWHU\YROWDJHDWWKHUHOD\FRLOVZLUHDQGIRUGRZQDQG
XS UHVSHFWLYHO\  ,I WKHUH LV QR EDWWHU\ YROWDJH ZKHQ WKH IODS VZLWFK LV DFWLYDWHG FKHFN WKH PLFUR
VZLWFKHVDQGWKHIODSVZLWFK,IWKHUHLVEDWWHU\YROWDJHDWWKHUHVSHFWLYHUHOD\FRLOVZKHQWKHIODS
VZLWFKLVDFWLYDWHG\RXVKRXOGKHDUWKHUHOD\³FOLFN´DQGWKHIODSPRWRUVKRXOGRSHUDWH,IWKHUHOD\
³FOLFNV´DQGWKHIODSPRWRUGRHVQRWRSHUDWHFKHFNIRUEDWWHU\YROWDJHDWWKHPRWRU,IWKHUHLVQRW
EDWWHU\YROWDJHDWWKHPRWRUZKHQWKHUHOD\FOLFNVWKHUHOD\FRQWDFWVDUHSUREDEO\EDGDQGWKHUHOD\
VKRXOGEHUHSODFHG,IWKHUHOD\GRHVQRWFOLFNWXUQRIIWKHPDVWHUVZLWFKUHPRYHRQHRIWKHFRLOZLUHV
DQGFKHFNWKHFRLOZLWKDQRKPPHWHU7KHUHOD\FRLOWHUPLQDOVDUHWKHWZRVPDOOHUVWXGVRQWKHUHOD\
FDVH7KHUHVLVWDQFHWKURXJKWKHUHOD\FRLOVKRXOGEHDERXWRKPV8VHWKH2KPPHWHU
WRFKHFNWKDWWKHUHOD\FRLOLVQRWVKRUWHGWRJURXQG,IWKHFRLOLVEDGUHSODFHWKHUHOD\






3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


(1*,1('5,9(1$,5&21',7,21(5

$OO$LU7UDFWRUDLUFUDIWXVHDJDVF\FOHDLUFRQGLWLRQLQJV\VWHPIRUFOLPDWHFRQWURO7KHDLUFRQGLWLRQLQJ
V\VWHPOHWVWKHSLORWVHOHFWUDPDLUIURPRXWVLGHUHFLUFXODWHFRFNSLWDLURUDPL[RIWKHWZR7KHUDP
DLUFRQWUROKDQGOHORFDWLRQLVRQWKHDIWFRFNSLWZDOORQWKH5+VLGHRIWKHSLORW

7KH;FRPSUHVVRUKDVILYHUHFLSURFDWLQJSLVWRQVGULYHQE\DURWDWLQJZREEOHSODWH,WXVHVUHHG
W\SHYDOYHVWRFRQWUROIORZDWWKHVXFWLRQDQGSUHVVXUHSRUWV0HFKDQLFDOSRZHUWRGULYHWKHFRPSUHVVRU
FRPHVIURPDQHQJLQHDFFHVVRU\GULYHSDG*HDUVLQWKHHQJLQHGULYHDUHDVSOLQHGTXLOOVKDIWWKDWWXUQV
DVPDOOSRO\³9´JURRYHSXOOH\WKDWGULYHVWKHIO\ZKHHOSXOOH\ZLWKDVHUSHQWLQHEHOW7KHIO\ZKHHO
SXOOH\LVFRQQHFWHGWRWKHFRPSUHVVRUVKDIWE\DQHOHFWURPDJQHWLFFOXWFK

7KH;FRPSUHVVRULVIDFWRU\FKDUJHGWRWKHFRUUHFWOHYHOZLWK6DQGHQ63RLO7KHLQLWLDORLO
FKDUJHLVFF,WLVQRWQHFHVVDU\WRFKHFNWKHFRPSUHVVRU¶VRLOOHYHODVURXWLQHPDLQWHQDQFH7KHRLO
OHYHOPXVWEHFKHFNHGZKHQDV\VWHPFRPSRQHQWKDVEHHQUHSODFHGRULI\RXWKLQNWKHUHLVDQRLOOHDN
$OOUHIULJHUDQWPXVWEHUHPRYHGIURPWKHV\VWHP GHSUHVVXUL]HG EHIRUHWKHRLOLVFKHFNHG

7KHDLUFRQGLWLRQHUIDQVEORZHUVDQGFRPSUHVVRUFOXWFKDUHSRZHUHGE\WKHDLUFUDIWEXV$OOFRQWURO
VZLWFKHV IRUWKHDLUFRQGLWLRQLQJV\VWHP DUHORFDWHGRQWKH ,QVWUXPHQW3DQHO 7KHSLORW FDQXVHWKH
VZLWFKHVWRWXUQWKHV\VWHPRQRURIIDQGWRFRQWUROWKHFRFNSLWEORZHUVSHHGDV+,*+0('RU/2:

$)UHRQ5HF\FOLQJ8QLW )58 WKDWUHFODLPVWKH5DUHIULJHUDQWLVUHFRPPHQGHGZKHQUHIULJHUDQW
LVDGGHGRUUHPRYHG

6HUYLFLQJSURFHGXUHVIRUWKHDLUFRQGLWLRQHUDUHJHQHUDOO\WKHVDPHDVWKRVHIRUFRPSDUDEOHDXWRPRWLYH
XQLWV0RVWVHUYLFLQJLVDFFRPSOLVKHGE\DGGLQJRUUHPRYLQJ5HIULJHUDQW5DDWWKHVHUYLFLQJSRUWV
7KHVHSRUWVDUHORFDWHGEHQHDWKWKHXSSHUULJKWKDQGVLGHVNLQLPPHGLDWHO\DIWRIWKHFRFNSLW



$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


 &DXWLRQDU\,QIRUPDWLRQ

$ 3UHVVXUH5HOHDVH
‡ %HIRUHGLVFRQQHFWLQJDQ\OLQHVRUUHPRYLQJWKHRLOSOXJDOZD\VPDNHVXUHUHIULJHUDQW
KDV EHHQ UHPRYHG IURP WKH DLU FRQGLWLRQLQJ V\VWHP E\ UHFRYHULQJ LW ZLWK WKH
DSSURSULDWHUHFRYHU\HTXLSPHQW
‡ :KHQZRUNLQJRQFRPSUHVVRUVVHSDUDWHIURPWKHV\VWHPDOZD\VEHVXUHWRUHOLHYH
LQWHUQDO SUHVVXUH ILUVW ,QWHUQDO FRPSUHVVRU SUHVVXUH FDQ EH UHOLHYHG E\ UHPRYLQJ
VKLSSLQJFDSVSDGVIURPERWKSRUWV

% 5HFRYHU\RI5HIULJHUDQW
‡ 1HYHUGLVFKDUJHUHIULJHUDQWWRWKHDWPRVSKHUH$OZD\VXVHDSSURYHGUHIULJHUDQW
UHFRYHU\UHF\FOLQJHTXLSPHQWWRFDSWXUHUHIULJHUDQWZKLFKLVUHPRYHGIURPWKHDLU
FRQGLWLRQLQJV\VWHP'RQRWPL[UHIULJHUDQWVLQWKHVDPHSLHFHRIHTXLSPHQWRQH
VKRXOGEHGHVLJQDWHGIRU5DQGDQRWKHUIRU5D

& +DQGOLQJRI5HIULJHUDQW
‡ $OZD\VZHDUH\HDQGKDQGSURWHFWLRQZKHQZRUNLQJRQDQDLUFRQGLWLRQLQJV\VWHPRU
FRPSUHVVRU/LTXLGUHIULJHUDQWFDQFDXVHIURVWELWHDQGRUEOLQGQHVV

' 9HQWLODWLRQ
‡ .HHSUHIULJHUDQWVDQGRLOVDZD\IURPRSHQIODPHV5HIULJHUDQWVFDQSURGXFHSRLVRQRXV
JDVVHVLQWKHSUHVHQFHRIDIODPH:RUNLQDZHOOYHQWLODWHGDUHD

( $YRLG8VHRI&RPSUHVVHG$LU
‡ 'RQRWLQWURGXFHFRPSUHVVHGDLULQWRDQDLUFRQGLWLRQLQJV\VWHPGXHWRWKHGDQJHURI
FRQWDPLQDWLRQ

1RWH
5HF\FOLQJPDFKLQHVPXVWEHYDOLGDWHGWRWKHDSSURSULDWH6$(VWDQGDUGDQGE\8QGHUZULWHUV
/DERUDWRULHV5HF\FOHGUHIULJHUDQWIURPRWKHUVRXUFHVPXVWPHHWWKHDSSURSULDWH$5,VWDQGDUGV
)DLOXUHWRFRPSO\ZLWKWKHVHSURYLVLRQVPD\YRLGDQ\ZDUUDQW\RQWKHFRPSUHVVRU

3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


 5D,QIRUPDWLRQ

$ 5D3$*2LO+DQGOLQJ3UHFDXWLRQV

7KLVPDQXDOIRFXVHVRQVHUYLFHLQIRUPDWLRQIRU6DQGHQFRPSUHVVRUVLQWHQGHGIRUXVHZLWK5D
DQG3$*RLOV

D  $OZD\VIROORZVDIHW\SUHFDXWLRQV
E  'RQRWGLVFKDUJH5DLQWRWKHDWPRVSKHUH(YHQWKRXJKLWVR]RQHGHSOHWLRQSRWHQWLDO
LV]HURLWGRHVKDYHJOREDOZDUPLQJSRWHQWLDO5HFRYHU\DQGUHF\FOLQJDUHPDQGDWHG
E\ WKH &OHDQ$LU$FW 8VH UHFRYHU\ HTXLSPHQW GHVLJQDWHG RQO\ IRU 5D 1HYHU
LQWURGXFHDQRWKHUUHIULJHUDQWLQWRWKH5DHTXLSPHQW
F  1HYHUPL[5DZLWKRWKHUUHIULJHUDQWVRUDLUFRQGLWLRQLQJV\VWHPVIDLOXUHPD\WR
RFFXU
G  8VH RQO\ 6DQGHQ VSHFLILHG 3$* OXEULFDQWV IRU 5D V\VWHPV XVLQJ 6DQGHQ
FRPSUHVVRUV,IRWKHUOXEULFDQWVDUHXVHGDLUFRQGLWLRQLQJV\VWHPIDLOXUHLVOLNHO\WR
RFFXU
H  7KH6DQGHQVSHFLILHG3$*RLOVXVHGLQ5DV\VWHPVDEVRUEDWPRVSKHULFPRLVWXUH
YHU\ TXLFNO\ 0RLVWXUH LQ WKH DLU FRQGLWLRQLQJ V\VWHP FDQ FDXVH PDMRU GDPDJH RU
IDLOXUH
‡ 1HYHU OHDYH 3$* RLO H[SRVHG WR DLU IRU D SURORQJHG WLPH 7LJKWO\ UHVHDO WKH RLO
FRQWDLQHULPPHGLDWHO\DIWHUHDFKXVH
‡ 'XULQJDLUFRQGLWLRQLQJV\VWHPUHSDLUFDSDOOILWWLQJVDVVRRQDVRSHQHGDQGOHDYH
FDSSHGXQWLOMXVWEHIRUHWKH\DUHUHFRQQHFWHG
‡ ,IDUHSDLULVSHUIRUPHGRQDQ5DFRPSUHVVRURUV\VWHPHYDFXDWHWKHV\VWHPIRU
DWOHDVWPLQXWHVEHIRUHUHFKDUJLQJWRHQVXUHWKHUHPRYDORIPRLVWXUHZKLFKPD\
KDYHEHHQDEVRUEHGE\WKH3$*RLOLQWKHFRPSUHVVRUDQGV\VWHP
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


% 7DEOHRI6DWXUDWLRQ7HPSHUDWXUHVDQG3UHVVXUHV 5D 




7HPS )  3UHVVXUH 7HPS )  3UHVVXUH 7HPS )  3UHVVXUH

SVLJ  SVLJ  SVLJ 
 LQ+J    
 LQ+J    
 LQ+J    
     
     
     
     
     
     
     
     

& 6\VWHP5HTXLUHPHQWV

$76\VWHP5HTXLUHPHQWV
2LO R] FF 
5HIULJHUDQW OEV NJ 

 $SSOLFDWLRQ6SHFLILFDWLRQV

$ 2LO)ORZ7KHRU\

‡ &RPSUHVVRUOXEULFDWLRQRFFXUVDVWKHRLOZKLFKFLUFXODWHVZLWKWKHUHIULJHUDQWSDVVHVWKURXJK
WKH FRPSUHVVRU FUDQNFDVH GXULQJ RSHUDWLRQ 7KH 6DQGHQ 6' VHULHV FRPSUHVVRU DFKLHYHV
RSWLPDOGXUDELOLW\DQGFRROLQJSHUIRUPDQFHZKHQRLOFLUFXODWHVWKURXJKWKHV\VWHPDWDUDWLR
RIWRRLOWRUHIULJHUDQW([FHVVRLOFDQDFWDVDQLQVXODWRUOLPLWLQJKHDWWUDQVIHULQ
WKHHYDSRUDWRUDQGFRQGHQVHUZKLOHWRROLWWOHRLOFDQQHJDWLYHO\DIIHFWGXUDELOLW\
‡ 2LOZLOOFROOHFWLQORZSUHVVXUHFRROFRPSRQHQWV HYDSRUDWRUDFFXPXODWRUDQGVXFWLRQKRVH 
RIWKHUHIULJHUDQWORRS)RUH[DPSOHDORQJVXFWLRQKRVHZKLFKVDJVFDQFROOHFWVHYHUDORXQFHV
WKXVUHGXFLQJRYHUDOORLOFLUFXODWLRQUDWLR
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


% 2LO&KDUJLQJ

D  )RUDQHZFRPSUHVVRUWREHXVHGLQ
WKLV W\SH RI V\VWHP VXEWUDFW WKH
GHOLYHUHG RLO DPRXQW IURP WKH
GHVLUHGWRWDORLOFKDUJHWRGHWHUPLQH
KRZ PXFK RLO VKRXOG EH DGGHG WR
WKH FRPSUHVVRU DQG V\VWHP  )RU 
WRWDO V\VWHP UHTXLUHG RLO DPRXQW
VHH 6HFWLRQ & 6\VWHP
5HTXLUHPHQWV 
E  5HPRYHWKHRLOILOOHUSOXJDQGFKDUJHWKHFRPSUHVVRUZLWKWKHDPRXQWRIDGGLWLRQDORLO
GHWHUPLQHGLQVWHSD 8VHRQO\QHZRLORIWKHFRUUHFWW\SHDVVKRZQRQWKHFRPSUHVVRU
ODEHO,IFDOFXODWHGDPRXQWLVJUHDWHUWKDQFF R] RLOFDQEHDGGHGWRRWKHUV\VWHP
FRPSRQHQWV
F  5HLQVWDOORLOSOXJ6HDWDQG2ULQJPXVWEHFOHDQDQGQRWGDPDJHG7RUTXHWR
IW‡OE 1‡PNJI‡FP 

 'LDJQRVLV&RQILUPDWLRQRI&RPSUHVVRU)DLOXUH

‡ 7KHFRPSUHVVRULVWKHPRVWH[SHQVLYHFRPSRQHQWLQWKHDLUFRQGLWLRQLQJV\VWHPORRS
6WHSV$ WKURXJK ' VKRXOG EH XVHG WR GHWHUPLQH LI WKH FRPSUHVVRU LV IXQFWLRQLQJ
FRUUHFWO\RUQRWDQGSUHYHQWUHPRYDORIDJRRGFRPSUHVVRU

$ &RPSUHVVRU5RWDWLRQ7HVW

‡ 0RVWLQWHUQDOFRPSUHVVRUIDLOXUHVFDQ
EHTXLFNO\LGHQWLILHGE\SHUIRUPLQJD
VKDIWURWDWLRQWHVW1RUPDOURWDWLRQRI
WKHFRPSUHVVRUVKDIWVKRXOGEHVPRRWK
ZLWKRXWFDWFKLQJRUELQGLQJ
‡ &RPSUHVVRUV ZKLFK ELQG RU KDQJ
GXULQJ WKH VKDIW URWDWLRQWHVW KDYH DQ
LQWHUQDO SDUW ZKLFK LV EURNHQ RU
FRQWDPLQDWLRQSUHYHQWLQJFRPSUHVVRU
RSHUDWLRQ7KLVFRPSUHVVRUVKRXOGEH
UHPRYHGDQGUHSODFHGZLWKDQHZXQLW

$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


% &OXWFK,QVSHFWLRQ

D  9ROWDJH&KHFN
‡ &RQILUP WKDW WKH FOXWFK LV UHFHLYLQJ DW D
PLQLPXP9RU9IRU9DQG9 9ROWV
V\VWHPV UHVSHFWLYHO\ ,I YROWDJH LV QRW
EHLQJ UHFHLYHG DW WKH FOXWFK UXQ D
GLDJQRVWLFRQWKHYHKLFOHHOHFWULFDOV\VWHP
1RWHSHUIRUPWHVWZLWKSRZHUDSSOLHGWR
FRLOWRIXOO\ORDGWKHFLUFXLW 
‡ 3XOOH\RU5RWRU6SLQ&KHFN
‡ :LWK FOXWFK GLVHQJDJH WKH SXOOH\ VKRXOG
VSLQ IUHHO\  ZLWK QR ZREEOLQJ RU
URXJKQHVVYLEUDWLRQ

E  $LU*DS&KHFN
‡ $LU JDSV H[FHHGLQJ ´  PP  FDQ
SUHYHQW HQJDJHPHQW 7KLV RIWHQ LV QRWLFHG
DIWHUWKHFOXWFKDQGFRPSUHVVRUWHPSHUDWXUH
LVKHDWHGWKURXJKQRUPDOXVH

F  5HVLVWDQFH&KHFN
‡ )LHOGFRLOVZLWKLQWHUQDOVKRUWVFDQEHWHVWHG 2KPV
E\PHDVXULQJUHVLVWDQFHDFURVVWKHILHOGFRLO
5HVLVWDQFHVKRXOGIDOOZLWKLQWKHVHYDOXHV
¾  9ROW FRLO UHVLVWDQFH VKRXOG PHDVXUH
EHWZHHQ Ÿ DQG  Ÿ # URRP
WHPSHUDWXUH
¾  9ROW FRLO UHVLVWDQFH VKRXOG PHDVXUH
EHWZHHQ   Ÿ DQG  Ÿ # URRP
WHPSHUDWXUH
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7



& 3UHVVXUHRU3XPSLQJ7HVW

‡ &RPSUHVVRUV FDXVH UHIULJHUDQW WR IORZ WKURXJK WKH V\VWHP E\ FUHDWLQJ D SUHVVXUH
GLIIHUHQWLDOKLJKDQGORZSUHVVXUHV,IWKHFRPSUHVVRUFDQEHIRUFHGWRSURGXFHD
KLJKSUHVVXUHLQH[FHVVRISVLJLWLVDJRRGFRPSUHVVRU

,PSRUWDQW7KLVWHVWPXVWEHSHUIRUPHGZLWKDIXOOV\VWHPFKDUJH&RQILUPWKHV\VWHPLV
FKDUJHGSHU$LU7UDFWRUUHTXLUHPHQWVLQWKLVVHFWLRQEHIRUHSURFHHGLQJ

D  'LVFRQQHFWHOHFWULFFRROLQJIDQ7KHFRQGHQVHUFDQDOVREHEORFNHGZLWKVKHHWRIFDUG
ERDUG7KH SXUSRVH LV WR OLPLW KHDW UHPRYDO IURP WKH V\VWHP DQG EXLOG FRPSUHVVRU
GLVFKDUJHSUHVVXUH
E  6WDUWHQJLQHDQGHQJDJHFOXWFK
F  &RPSUHVVRUVRSHUDWLQJZLWKLQVSHFLILFDWLRQVKRXOGEHFDSDEOHRIUHDFKLQJSVLJ


,PSRUWDQW7KLVWHVWVKRXOGRQO\EHUXQIRUDVKRUWWLPHSHULRG6KXWWKHV\VWHPGRZQ
LPPHGLDWHO\RQFHSVLJLVDFKLHYHG

' /HDN&KHFNLQJ

D  9LVXDO,QVSHFWLRQ
$OWKRXJKRLOVHHSDJHGRHVQRWQHFHVVDULO\LQGLFDWHOHDNDJHRIUHIULJHUDQWLWVKRXOGEH
FRQVLGHUHGDVLJQWKDWDOHDNPD\H[LVW/RRNIRUWKHIROORZLQJLWHPV
‡ 2LOVHHSDJHLQVKDIWVHDODUHD EHWZHHQFOXWFKDQGFRPSUHVVRU UHSDLUDEOH
‡ 3LQFKLQJRUH[WUXVLRQRIIURQWKRXVLQJ2ULQJ±QRQUHSDLUDEOH
‡ 2LODURXQGF\OLQGHUKHDG JDVNHWVVHUYLFHYDOYHVILWWLQJV UHSDLUDEOH
‡ 2LODURXQGRLOSOXJUHSDLUDEOH
‡ 6WULSSHGWKUHDGV±QRQUHSDLUDEOH
‡ 2LODURXQGFUDFNLQFRPSUHVVRUERG\±QRQUHSDLUDEOH

E  6RDS%XEEOH'HWHFWLRQ
‡ 6RDSEXEEOHVDUHDPHDQVWRGHWHFWJURVVOHDNV,QJHQHUDORQHYHU\VPDOOEXEEOH
UHOHDVHGSHUVHFRQGLVHTXDOWRR]RIUHIULJHUDQWORVVSHU\HDU)LQGLQJOHDNVVPDOOHU
WKDQRXQFHVSHU\HDUUHTXLUHVDQHOHFWURQLFGHWHFWRU
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


F  6KRS7\SH(OHFWURQLF'HWHFWRUV
‡ (QVXUH WKDW WKH GHWHFWRU EHLQJ XVHG LV VHQVLWLYH WR 5D UHIULJHUDQW 0DQ\ OHDN
GHWHFWRUV LQWHQGHG IRU 5 FDQQRW GHWHFW 5D OHDNV 8VH WKH OHDN GHWHFWRU LQ
DFFRUGDQFHZLWKWKHPDQXIDFWXUHU VLQVWUXFWLRQV7KHOHDNUDWHDWDQ\SRUWLRQRIWKH
FRPSUHVVRUVKRXOGQRWH[FHHGR]\U0DNHVXUHWKDWDVXVSHFWHGOHDNLVDQDFWXDO
IORZRIUHIULJHUDQWQRWDVPDOOSRFNHWRIUHIULJHUDQWWUDSSHGLQDUHFHVV&OHDQLQJ
WKHVXVSHFWDUHDZLWKVRDSDQGZDWHU QHYHUDVROYHQW RUEORZLQJRIIWKHDUHDZLWK
FRPSUHVVHGDLUFDQKHOSFRQILUPDVXVSHFWHGOHDN

G  /HDN'HWHFWLRQ'\HV
‡ /HDNGHWHFWLRQG\HVDUHWREHXVHGLQDFFRUGDQFHZLWKWKHPDQXIDFWXUHVLQVWUXFWLRQV
‡ /HDNGHWHFWLRQG\HVZRUNE\VWDLQLQJWKHV\VWHPRLO6RZKHQDGGLQJG\HWRDV\VWHP
ZKLFKGLGQRWLQLWLDOO\FRQWDLQG\HWKHV\VWHPZLOOQHHGWRRSHUDWHIRUVRPHWLPHWR
DOORZDOOWKHRLOWREHFRPHVWDLQHGDQGDUULYHDWWKHOHDN


( 1RLVH

D  8QXVXDO1RLVH1RWGXHWR&RPSUHVVRU
8QXVXDOQRLVHVPD\EHFDXVHGE\FRPSRQHQWVRWKHUWKDQWKHFRPSUHVVRU
&RPSUHVVRU0RXQWLQJ&KHFNIRU
‡ /RRVHEHOWVHHEHOWWHQVLRQVSHFLILFDWLRQV
‡ %URNHQEUDFNHWRUFRPSUHVVRUPRXQWLQJHDU5HSODFHEURNHQFRPSRQHQW
‡ 0LVVLQJEURNHQRUORRVHPRXQWLQJEROWV5HSODFHUHLQVWDOORUWLJKWHQ
‡ 'ULYHSDGVKDIWRUEHDULQJSUREOHP,QVSHFWGULYHSDGEHDULQJDQGVKDIWFRQGLWLRQ

E  8QXVXDO1RLVHV'XHWR&RPSUHVVRU
‡ 6XFWLRQSUHVVXUHOHVVWKDQDERXWSVLJFDQFDXVHXQXVXDOQRLVH&KDUJHUHIULJHUDQW
WRSURSHUDPRXQWDQGWHVWE\DSSO\LQJKHDWWRHYDSRUDWRUWRLQFUHDVHVXFWLRQSUHVVXUH
‡ &OXWFKEHDULQJ
‡ 2LOOHYHOLQVXIILFLHQWRLOFDQFDXVHXQXVXDOQRLVH
‡ &RPSUHVVRUVXFWLRQRUGLVFKDUJHYDOYHEUHDNDJHZLOOFDXVHDFODFNLQJVRXQGDWLGOH
‡ ,IKHDGJDVNHWIDLOXUHRFFXUVGLVFKDUJHSUHVVXUHZLOOEHORZDQGVXFWLRQSUHVVXUHZLOO
EHKLJKDWLGOH
 3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


 &RPSUHVVRU5HSDLU

&OXWFK&RPSRQHQWV

 
 

   
 
   
 

 
 





$UPDWXUHGXVW 3XOOH\ %HDULQJ
$UPDWXUHSODWH )LHOG&RLO
FRYHUVFUHZ 6QDS5LQJ
$UPDWXUHGXVW 3XOOH\ %HDULQJ 
&OXWFK6KLPV
FRYHU $VVHPEO\
5RWRU%HDULQJ )LHOG&RLO6QDS 
6KDIWQXW
'XVW&RYHU 5LQJ

$ &OXWFK5HPRYDO
D  $UPDWXUH1XW5HPRYDO
‡ ,IDUPDWXUHGXVWFRYHULVSUHVHQWUHPRYHWKHRU
EROWV KROGLQJ LW LQ SODFH DQG UHPRYH FRYHU ,I
DX[LOLDU\VKHHW PHWDO SXOOH\LV SUHVHQW UHPRYHWKH
VFUHZVKROGLQJLWLQSODFHWKHQUHPRYHSXOOH\
‡ ,QVHUWSLQVRIDUPDWXUHSODWHVSDQQHULQWRWKUHDGHG
KROHVRIDUPDWXUHDVVHPEO\
‡ +ROGDUPDWXUHDVVHPEO\VWDWLRQDU\ZKLOHUHPRYLQJ
UHWDLQLQJ QXW ZLWK  PP RU PP VRFNHW
ZUHQFKDVDSSURSULDWH

E  .H\6KDIW$UPDWXUH5HPRYDO
‡ 5HPRYHDUPDWXUHSODWHDVVHPEO\XVLQJSXOOHU7KUHDG
SXOOHUEROWVLQWRWKHWKUHDGHGKROHVLQWKHDUPDWXUH
DVVHPEO\7XUQFHQWHUVFUHZFORFNZLVHXQWLODUPDWXUH
DVVHPEO\FRPHVORRVH
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


25 E  6SOLQH6KDIW$UPDWXUH5HPRYDO
‡ 7KH VSOLQH VKDIW DUPDWXUH ZLOO QRW KDYH WKUHDGHG
KROHVWRDFFHSWWKHDUPDWXUHSXOOHU
‡ /LIW RII DUPDWXUH SODWH ZLWK ILQJHUV ,I DUPDWXUH
GRHVQRWFRPHRIIHDVLO\VSUD\DQDQWLVHL]HVRLOLQWR
VKDIW WR ORRVHQ$UPDWXUH SODWH FDQ DOVR EH
ORRVHQHGE\JHQWO\SU\LQJEHWZHHQURWRUDQG
DUPDWXUHSODWHZLWKWZRIODWVFUHZGULYHUV




F  5HPRYH&OXWFK$FFHVVRULHV
‡ %HDULQJ'XVW&RYHU LIDSSOLFDEOH 
‡ 6KDIW.H\ LIDSSOLFDEOH 
‡ 6KLPV

G  5RWRU3XOOH\$VVHPEO\5HPRYDO
‡ 5HPRYHURWRUVQDSULQJ
‡ ,QVHUWWKHOLSRIWKHMDZVLQWRWKHVQDSULQJJURRYH
‡ 3ODFH URWRU SXOOH\ VKDIW SURWHFWRU 3XOOHU VHW  RYHU WKH
H[SRVHGVKDIW
‡ $OLJQWKXPEVFUHZVWRSXOOHUMDZVDQGILQJHUWLJKWHQ
‡ 7XUQSXOOHUFHQWHUEROWFORFNZLVHXVLQJDVRFNHWZUHQFK
XQWLOURWRUSXOOH\LVIUHH






H  )LHOG&RLO$VVHPEO\5HPRYDO
‡ /RRVHQ OHDG ZLUH FODPS VFUHZ ZLWK  3KLOOLSV
VFUHZGULYHUXQWLOZLUH V FDQEHVOLSSHG RXWIURP
XQGHUFODPS
‡ 8QGR DQ\ ZLUH FRQQHFWLRQV RQ WKH FRPSUHVVRU
ZKLFK ZRXOG SUHYHQW UHPRYDO RI WKH ILHOG FRLO
DVVHPEO\
‡ 5HPRYHILHOGFRLOVQDSULQJ
‡ 5HPRYHWKHILHOGFRLODVVHPEO\
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


% &OXWFK5HSODFHPHQW

D  )LHOG&RLO$VVHPEO\,QVWDOODWLRQ
‡ 5HYHUVH WKH VWHSV RI WKH SUHYLRXV VHFWLRQ  3URWUXVLRQ RQ
XQGHUVLGH RI FRLO ULQJ PXVW PDWFK KROH LQ IURQW KRXVLQJ WR
SUHYHQWPRYHPHQWDQGFRUUHFWO\ORFDWHOHDGZLUH V 

E  5RWRU$VVHPEO\,QVWDOODWLRQ
‡ 3ODFHFRPSUHVVRURQVXSSRUWVWDQGVXSSRUWHGDWUHDUHQGRI
FRPSUHVVRU ,I WKH FRPSUHVVRU PXVW EH FODPSHG LQ D YLVH
FODPSRQO\RQWKHPRXQWLQJHDUVQHYHURQWKHERG\RIWKH
FRPSUHVVRU
‡ 6HWURWRUVTXDUHO\RYHUWKHIURQWKRXVLQJERVV
‡ 3ODFHWKHURWRULQVWDOOHUULQJLQWRWKHEHDULQJERUH(QVXUHWKDW
WKHHGJHUHVWVRQO\RQWKHLQQHUUDFHRIWKHEHDULQJQRWRQWKH
VHDOSXOOH\RURXWHUUDFHRIWKHEHDULQJ
‡ 3ODFHWKHGULYHULQWRWKHULQJDQGGULYHWKHURWRUGRZQRQWRWKH
IURQW KRXVLQJ ZLWK D KDPPHU RU DUERU SUHVV 'ULYH WKH URWRU
DJDLQVWWKHIURQWKRXVLQJVWHS$GLVWLQFWFKDQJHRIVRXQGFDQ
EHKHDUGZKHQXVLQJWKHKDPPHUWRLQVWDOOWKHURWRU
‡ 5HLQVWDOOURWRUUHWDLQLQJVQDSULQJZLWKH[WHUQDOVQDSULQJSOLHUV,IDEHYHOLVSUHVHQW
RQWKHVQDSULQJLWVKRXOGIDFHXS DZD\IURPWKHERG\RIWKHFRPSUHVVRU 
‡ 5HLQVWDOOURWRUEHDULQJGXVWFRYHU LISUHVHQW E\JHQWO\WDSSLQJLWLQWRSODFH

F  $UPDWXUH$VVHPEO\,QVWDOODWLRQ
‡ ,QVWDOO FOXWFK VKLPV 127(
&OXWFK DLU JDS LV GHWHUPLQHG E\
VKLPWKLFNQHVV:KHQLQVWDOOLQJD
FOXWFK RQ D XVHG FRPSUHVVRU WU\
WKH RULJLQDO VKLPV ILUVW :KHQ 6KLPV
LQVWDOOLQJDFOXWFKRQDFRPSUHVVRU
WKDWKDVQRWKDGDFOXWFKLQVWDOOHG
EHIRUHILUVWWU\DQG PP VKLPV

 .H\HG6KDIW2QO\
‡ ,QVWDOOVKDIWNH\ZLWKSOLHUV
‡ $OLJQNH\ZD\LQDUPDWXUHDVVHPEO\WRVKDIW
NH\ 8VLQJ GULYHU DQG D KDPPHU RU DUERU
SUHVV GULYH WKH DUPDWXUH DVVHPEO\ GRZQ
RYHUWKHVKDIWXQWLOLWERWWRPVRQWKHVKLPV
$ GLVWLQFW VRXQG FKDQJH ZLOO EH QRWHG LI
GULYLQJZLWKDKDPPHU
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


 6SOLQH6KDIW2QO\
‡ $OLJQVORWLQDUPDWXUHZLWKORFDWRU WRRWKRQVKDIW 3UHVV
DUPDWXUH WRZDUGV URWRU ZLWK KDQG XQWLO DUPDWXUH UHVWV
DJDLQVWWKHVKLPV

G  $UPDWXUH5HWDLQLQJ1XW
‡ 5HSODFHUHWDLQLQJQXWDQGWRUTXHWRVSHFLILFDWLRQ
IW‡OE 1‡PNJ‡FP 0IW‡OE
1‡PNJI‡FP 

H  $LU*DS&RQIRUPDWLRQ
‡ &KHFNDLUJDSZLWKIHHOHUJDXJH6SHFLILFDWLRQLV
 PP ,IJDSLVQRWHYHQDURXQGWKHFOXWFK
JHQWO\WDSGRZQDWWKHKLJKVSRWV
‡ ,I WKH RYHUDOO JDS LV RXW RI VSHF UHPRYH WKH DUPDWXUH
DVVHPEO\DQGFKDQJHWKHVKLPVDVQHFHVVDU\
‡ 5HSODFHDUPDWXUHGXVWFRYHU LIXVHG DQGWRUTXHRU
EROWVWRVSHFLILFDWLRQEHORZ
ā EROWV 6' IW‡OE 1‡PNJI‡FP 
ā 0EROWV 6' IW‡OE 1‡PNJI‡FP 

1RWH2YHUWRUTXHRI6'6+GXVWFRYHUEROWVZLOOFDXVHDLUJDSWREHFRPHRXWRIVSHF

& 5HPRYLQJDQG5HSODFLQJWKH&RPSUHVVRU

7RUHPRYHWKHFRPSUHVVRUWKHVHVWHSVVKRXOGEHIROORZHG

‡ 5HPRYHDOOUHIULJHUDQWIURPWKHV\VWHPXVLQJD)UHRQ5HFRYHU\8QLW )58 

‡ 5HPRYHWKHKRVHILWWLQJVDWWKHUHDURIWKHFRPSUHVVRUE\ILUVWUHPRYLQJWKHEROWDQG
VWUDSWKDWKROGWKH7KHDGFODPSLQSODFH7KHKRVHILWWLQJVFDQQRZEHUHPRYHG
IURPWKHFRPSUHVVRU¶VKHDGZLWKRXWWRROV

‡ 6HSDUDWHWKHZULVWORFNFRQQHFWRULQWKHZLUHWKDWSRZHUVWKHFOXWFK

‡ /RRVHQWKHQXWVRQWKHWZR$1SLYRWEROWVWKDWVHFXUHWKHFRPSUHVVRUWRWKHGULYH
VKDIWKRXVLQJ

‡ 5HPRYHVDIHW\ZLUHDQGORRVHQWKHEHOWWHQVLRQWXUQEXFNOHDQGUHPRYHEHOWV

‡ 5HPRYHWKHEROWWKDWFRQQHFWVWKHEHOWDGMXVWPHQWWXUQEXFNOHWRWKHFRPSUHVVRU
FDVH

3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


‡ 6XSSRUW WKH FRPSUHVVRU DQG UHPRYH WKH $1 EROWV DQG QXWV WKDW VHFXUH WKH
FRPSUHVVRUWRWKHGULYHVKDIWKRXVLQJ7KLVDOVRUHOHDVHVWKHWXUQEXFNOHWKDWVHUYHV
DVDVLGHEUDFH

‡ *HQWO\OLIWWKHFRPSUHVVRUIURPWKHHQJLQHFRPSDUWPHQW

7RUHSODFHWKHFRPSUHVVRUWKHSUHYLRXVVWHSVVKRXOGEHIROORZHGLQWKHUHYHUVHRUGHU7KHEHOWVIRUWKH
5V\VWHPVKRXOGEHWHQVLRQHGWROEVXVLQJD'HFRGHQVLWRPHWHURUHTXLYDOHQW7HQVLRQWKHIODW
VHUSHQWLQHEHOWRIWKH5DV\VWHPDVGHVFULEHGLQ6HUYLFH/HWWHU
8VHFRPSDWLEOHUHIULJHUDWLRQRLORQWKH2ULQJVDWWKHFRPSUHVVRUKRVHILWWLQJEHIRUHUHFRQQHFWLQJWR
FRPSUHVVRU)ROORZHYDFXDWLRQDQGUHIULJHUDQWFKDUJLQJLQVWUXFWLRQVVSHOOHGRXWLQWKLVVHFWLRQRIWKLV
PDQXDO

 &RPSUHVVRU5HSODFHPHQW

x ,W¶V FULWLFDO IRU VXFFHVVIXO FRPSUHVVRU UHSODFHPHQW WKDW WKH QHZ FRPSUHVVRU LV
LQVWDOOHGLQDFOHDQV\VWHPZLWKDFRUUHFWRLOFKDUJH&RQWDPLQDWLRQUHPDLQLQJLQWKH
V\VWHPZLOOEH SXOOHGLQWRWKHQHZFRPSUHVVRUDQGORGJHXQGHUWKHYDOYHV DQGLQ
EHDULQJVFDXVLQJTXLFNIDLOXUHRIWKHQHZFRPSUHVVRU$OVRLW¶VLPSRUWDQWWRPDLQWDLQ
WKHRULJLQDORLOFKDUJHDPRXQWZKHQUHSODFLQJWKHFRPSUHVVRU

$ &RQWDPLQDWLRQ,QVSHFWLRQ
‡ &RQWDPLQDWLRQIURPIRUHLJQPDWHULDOFDQEHIRXQGE\ORRNLQJDWWKHRLOGUDLQHGIURP
HLWKHUWKHFRPSUHVVRURUWKHVXFWLRQDQGGLVFKDUJHOLQHV&RQWDPLQDWLRQFDQDOVREH
VHHQFROOHFWLQJLQWKHRULILFHWXEHRUH[SDQVLRQYDOYH






 &OHDQRLOLVFOHDU
 RUWUDQVOXFHQW
 2YHUKHDWHGRLOLVGDUN
&RQWDPLQDWHGRLOZLWK
 DQGZLOOUHTXLUHIOXVKLQJ
PHWDOSDUWLFOHVZLOO
 UHTXLUHV\VWHPIOXVKLQJ


‡ 7R LOOXVWUDWH KRZ FRQWDPLQDWLRQ ZLOO TXLFNO\ ZUHFN D
JRRG FRPSUHVVRU WKH SKRWR WR WKH ULJKW VKRZV D VPDOO
PHWDO VKDYLQJ ORGJHG XQGHU WKH GLVFKDUJH YDOYH 7KH
YDOYH ZLOO RSHQ DQG FORVH DJDLQVW WKH PHWDO VKDYLQJ
UHVXOWLQJLQDIDWLJXHEUHDNRIWKHYDOYH7KHEURNHQYDOYH
LV QRZ IUHH WR WUDYHO LQVLGH WKH FRPSUHVVRU FDXVLQJ
DGGLWLRQDO LQWHUQDO IDLOXUHV (YHQWXDOO\ WKH FRPSUHVVRU
ZLOOVWRSSXPSLQJDQGRYHUKHDW
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


% 2LO$PRXQW )OXVKHG6\VWHPRU1HZ6\VWHPV 
‡ 6\VWHPVZKLFKKDYHQRRLOLQWKHPGXHWRIOXVKLQJRUWKHV\VWHPLVEHLQJEXLOWIURP
QHZFRPSRQHQWVZLOOUHTXLUHRLODPRXQWVLQDFFRUGDQFHZLWKWKHRLOFKDUJLQJVHFWLRQ
UHTXLUHPHQWVLQWKLVPDQXDO
1RWH
‡ 7KHIDFWRU\RLOFKDUJHIRUWKHFRPSUHVVRUFDQEH
IRXQGRQWKHFRPSUHVVRUODEHO)RUWRWDOV\VWHP
UHTXLUHG RLO DPRXQW VHH 6HFWLRQ & 6\VWHP
5HTXLUHPHQWV$OVRVHHRLOFKDUJLQJVHFWLRQRI
WKLVPDQXDOIRUDGGLWLRQDOLQIRUPDWLRQ

& 2LO$PRXQW &RPSUHVVRUVZDSQRIOXVKLQJ 
‡ 7KHJRDORIWKLVSURFHGXUHLVWRPHDVXUHWKHRLODPRXQW
LQWKHIDLOHGFRPSUHVVRUDQGDGMXVWWKHDPRXQWLQWKH
QHZFRPSUHVVRUWRHTXDOWKDWRIWKHIDLOHG

D  5HPRYH WKH RLO SOXJ IURP WKH IDLOHG FRPSUHVVRU DQG
GUDLQDVPXFKRLODVSRVVLEOHLQWRDVXLWDEOHFRQWDLQHU
E  'UDLQ RLO IURP WKH VXFWLRQ DQG GLVFKDUJH SRUWV LQWR D
VXLWDEOHFRQWDLQHUZKLOHWXUQLQJWKHVKDIWFORFNZLVHRQO\
ZLWKDVRFNHWZUHQFKRQWKHDUPDWXUHUHWDLQLQJQXW
F  0HDVXUHDQGUHFRUGWKHDPRXQWRIRLOGUDLQHGIURPWKH
FRPSUHVVRU
G  'UDLQRLOIURPWKHQHZFRPSUHVVRUIROORZLQJVWHSVD 
DQGE 
H  $GG RLO EDFN LQWR WKH QHZ FRPSUHVVRU LQ DQ DPRXQW
HTXDOPHDVXUHPHQWWDNHQLQVWHSF 
I  5HLQVWDOORLOSOXJ6HDODQG2ULQJPXVWEHFOHDQDQG
QRWGDPDJHG7RUTXHWRIW‡OE 1‡P
NJI‡FP %HFDUHIXOQRWWRFURVVWKUHDGWKHRLOSOXJ

 6HUYLFH3URFHGXUHV

$ )OXVKLQJ

D  (TXLSPHQWW\SHV
‡ 5HIULJHUDQWUHFRYHU\UHF\FOHPDFKLQHVZKLFKFRQWDLQDIOXVKLQJFLUFXODWLQJSXPSWR
VROYHQWFOHDQXVLQJ5D
‡ $FORVHGORRSIOXVKLQJPDFKLQHLQZKLFKWKHFLUFXODWHGIOXVKLQJIOXLGLVUHWXUQHGWR
DUHVHUYRLUIRUILOWHULQJDQGFRQWLQXHGFLUFXODWLRQ0RVWRIWKHVHPDFKLQHVSURYLGHD
SXOVLQJDFWLRQWRGLVORGJHSDUWLFOHVWKDWDUHVWXFNLQVPDOOSDVVDJHZD\V
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


‡ $SUHVVXUL]HGIOXVKJXQZLWKDSXOVDWLQJVSUD\FDQDOVREHXVHG7RXVHWKLVWHFKQLTXH
EORFNRQHHQGRIDDLUFRQGLWLRQLQJV\VWHPFRPSRQHQWEHLQJIOXVKHGLQRUGHUWREXLOG
SUHVVXUHLQVLGHWKHFRPSRQHQWDQGWKHQTXLFNO\UHOHDVHWKHEORFNDJHWRSXOVHWKH
IOXVKLQJVROYHQWRXW

E  6DIHW\
‡ 'RQRWXVHIODPPDEOHIOXLGV
‡ 3URWHFWH\HVZLWKVDIHW\JRJJOHV
‡ :HDUFKHPLFDOUHVLVWDQWJORYHV
‡ 8VHDSSURYHGIOXLGV&)&V5RUDQG0HWK\O&KORURIRUPDOVRNQRZQDV
7ULFKORURHWKDQHDUHQRWDFFHSWDEOHSHUWKH&OHDQ$LU$FW

F  $FFHSWDEOH)OXVKLQJ)OXLGV
‡ )OXLGV GHVLJQDWHG IRU DLU FRQGLWLRQLQJ IOXVKLQJ VKRXOG EH XVHG DQG PD\ EH HLWKHU
VROYHQW RU OXEULFDQW EDVHG )OXLGV XVHG WR IOXVK WKH V\VWHP VKRXOG PHHW 6$(
VSHFLILFDWLRQ - WR LQVXUH FRPSDWLELOLW\ ZLWK UHIULJHUDQW RLO DQG DQ\ PDWHULDOV
XVHGLQWKHDLUFRQGLWLRQLQJV\VWHP

G  &RPSRQHQWVWR)OXVK
‡ )OXVK KRVHV KDUG OLQHV DQG KHDW H[FKDQJHUV '2 127 IOXVK WKH FRPSUHVVRU
DFFXPXODWRU RU UHFHLYHU GULHU UHIULJHUDQW OLQHV ZLWK PXIIOHUV WKHUPDO H[SDQVLRQ
YDOYHRURULILFHWXEHEHFDXVHUHVLGXDOIOXVKLQJIOXLGFDQQRWEHUHPRYHGIURPWKHVH
FRPSRQHQWVDQGWKH\UHVWULFWWKHIORZRIIOXVKLQJDJHQWWKURXJKRWKHUFRPSRQHQWV

H  :K\6XFWLRQ6LGH)OXVKLQJ,V,PSRUWDQW
‡ :KHQWKHRIIF\FOHSUHVVXUHHTXDOL]HVLQWKHEDFNZDUGVGLUHFWLRQWKURXJKGDPDJHG
FRPSUHVVRU YDOYHV GHEULV PD\ EH IRUFHG EDFN XS WKH VXFWLRQ KRVH ,I LW LV QRW
UHPRYHGWKLVGHEULVZLOOWUDYHOLQWRWKHUHSODFHPHQWFRPSUHVVRUDQGEHFLUFXODWHG
WKURXJKRXWWKHDLUFRQGLWLRQLQJV\VWHPFDXVLQJVXEVHTXHQWIDLOXUHV

I  )OXVKLQJ5HDU(YDSRUDWRU/LQHV
x 'HEULVLVGLVWULEXWHGWKURXJKRXWWKHHQWLUHDLUFRQGLWLRQLQJV\VWHPVRLWLVLPSRUWDQW
WR IOXVKWKHUHDUOLQHV7KHUHDUH[SDQVLRQYDOYHFDQEHJXWWHGRUGULOOHGRXWDQG
UHPRXQWHGVRWKDWWKHUHDUHYDSRUDWRUDQGKRVHVFDQEHEDFNIOXVKHGDVDQDVVHPEO\
$IWHUEORZLQJRXWWKHIOXVKLQJIOXLGDQGIXPHVDQHZWKHUPDOH[SDQVLRQYDOYHVKRXOG
EHPRXQWHG

J  ,PSRUWDQFH2I)OXVKLQJ'LUHFWLRQ
x ³%DFN IOXVK´ RU IOXVKLQJ LQ WKH UHYHUVH GLUHFWLRQ WR QRUPDO IORZ LV WKH PRVW
HIIHFWLYH7KHSODWHILQHYDSRUDWRUVXVHGRQPDQ\IURQWDQGUHDUHYDSRUDWRUVKDYH
PDQ\VPDOOSDVVDJHVZKLFKDUHGLIILFXOWWRFOHDQZLWKRXWDVWURQJSXOVDWLQJUHYHUVH
IORZ
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


K  +RZORQJGR,IOXVK"
‡ &ORVHG ORRS SURFHGXUH IOXVK XQWLO WKH IOXVKLQJ IOXLG OHDYLQJ WKH DLU FRQGLWLRQLQJ
FRPSRQHQWVDUHFOHDQ0DQXDOSUHVVXUL]HGJXQPHWKRGUHTXLUHVDPLQLPXPRIWKUHH
WLPHVEXWPRUHLIH[LWLQJIOXLGLVQRWFOHDQ

L  5HPRYDORI5HVLGXDO)OXVKLQJ)OXLGEHIRUH(YDFXDWLRQDQG&KDUJH
‡ 7KH SULPDU\ YDFXXP SXPS VKRXOG EH SURWHFWHG IURP IOXVKLQJ IOXLG DQG IXPHV
3XUJLQJ RI IOXVKLQJ VROYHQW LV QHFHVVDU\ EHIRUH FRQQHFWLQJ WKH UHFRYHU\ UHF\FOH
PDFKLQHWRHYDFXDWHDQGFKDUJHWKHDLUFRQGLWLRQLQJV\VWHP7KHEHVWPHWKRGLVWR
DOORZ1LWURJHQWRIORZWKURXJKWKHFRPSRQHQWV,I1LWURJHQLVQRWDYDLODEOHFOHDQ
DQG GULHG FRPSUHVVHG DLU FDQ EH EORZQ WKURXJKWKH IOXVKHG FRPSRQHQWV XQWLO WKH
IOXVKOLTXLGLVHYDSRUDWHG

% (YDFXDWLRQ
x (YDFXDWLRQLVWKHSURFHVVRIUHPRYLQJDLUDQGPRLVWXUHIURPWKHUHIULJHUDWLRQV\VWHP
EHIRUHFKDUJLQJWKHV\VWHPZLWKUHIULJHUDQW$LURUPRLVWXUHUHPDLQLQJLQWKHV\VWHP
EHIRUHDQGGXULQJWKHUHIULJHUDQWFKDUJHSURFHVVZLOOFDXVHLQFUHDVHGSUHVVXUHVGXULQJ
RSHUDWLRQUHVXOWLQJLQUHGXFHGRUSRRUFRROLQJDQGJUHDWO\UHGXFHWKHFRPSUHVVRUOLIH

D  ([SODQDWLRQRI(YDFXDWLRQ :DWHU%RLOV8QGHUD9DFXXP
x $V YDFXXP LV LQFUHDVHG WKH WHPSHUDWXUH DW
6\VWHP9DFXXP %RLOLQJ3RLQW
ZKLFK ZDWHU ERLOV GURSV $V WKH
,QFKHV0HUFXU\ 'HJUHHV)
ZDWHUPRLVWXUHERLOVLWVYDSRUFDQEHGUDZQ
RXWRIWKHV\VWHPE\WKHYDFXXPSXPS,WLV ´ )ž
UHFRPPHQGHG WR SHUIRUP WKH HYDFXDWLRQ ´ )ž
SURFHVVLQDZDUP DUHD7KHYHKLFOHHQJLQH ¶ )ž
FDQ DOVR EH UXQ LQ RUGHU WR ZDUP XS WKH ´ )ž
FRPSRQHQWVRIWKHDLUFRQGLWLRQLQJV\VWHPWR ´ )ž
HQKDQFHWKHHYDFXDWLRQSURFHVV ´ )ž

´ )ž

x $OORZ WKH YDFXXP SXPS WR UXQ IRU  ´ )ž
PLQXWHV GUDZLQJ GRZQ QHDU WR ´ +J$IWHU  PLQXWHV RI HYDFXDWLRQ FORVH WKH
VHUYLFHYDOYHVDQGWXUQRIIWKHSXPS/HWWKHV\VWHPVLWIRUPLQXWHVLIYDFXXP
ORVVRI´RUJUHDWHURFFXUVWKHUHLVSUREDEO\DOHDN
o 2WKHUUHDVRQVDYDFXXPFDQQRWEHKHOGIRUPLQXWHVDIWHUVKXWRII
▪ )OXVKZDVQRWFRPSOHWHO\UHPRYHGIURPV\VWHPEHIRUHHYDFXDWLRQVWDUWHG
▪ 5HIULJHUDQWLVWUDSSHGLQUHIULJHUDQWRLOIURPSUHYLRXVFKDUJH
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


E  9DFXXP3XPS6HUYLFH
x 9DFXXP SXPSV QRW UHFHLYLQJ UHJXODU VHUYLFH ZLOO EH XQDEOH WR GUDZ DQ DGHTXDWH
YDFXXP,QPRVWFDVHVVLPSOHFKDQJLQJWKHSXPSVRLOZLOOFRUUHFWWKHSUREOHP%H
VXUH WR IROORZ WKH PDQXIDFWXUHU¶V UHFRPPHQGDWLRQV IRU DQ\ PDLQWHQDQFH RQ \RXU
HYDFXDWLRQ SXPS &KDQJH WKH RLO DIWHU XVH ZKLOH WKH RLO LV VWLOO KRW EHFDXVH
FRQWDPLQDQWVDUHVWLOOLQVXVSHQVLRQDQGZLOOEHUHPRYHGZLWKWKHRLO,IFRQWDPLQDQWV
FRROVROLGLI\DQGVWD\LQWKHSXPSWKH\ORZHUYDFXXPHIILFLHQF\,QH[WUHPHFDVHV
WKHRLOVWRSVOXEULFDWLQJDQGWKHSXPSVHL]HV7KHRQO\ZD\WRGHWHUPLQHRLOFRQGLWLRQ
LVWRWHVWYDFXXPSXOOHGZLWKDQHOHFWURQLFYDFXXPJDXJH&RQWDPLQDWLRQFDQQRWEH
GHWHUPLQHGE\RLOFRORU

& &KDUJLQJWKH$LU&RQGLWLRQLQJ6\VWHP
D  &KDUJLQJV\VWHPV
‡ (OHFWURQLFZHLJKWVFDOHV
‡ &KDUJLQJVWDWLRQV

6DIHW\1RWH
1HYHURSHQWKHKLJKVLGHVHUYLFHYDOYHZLWKWKHV\VWHPUXQQLQJ7KLVFDQGDPDJH
HTXLSPHQWDQGFDXVHERGLO\LQMXU\

E  7ZRZD\VWRFKDUJHWKHV\VWHP

 7KURXJKWKHKLJKVLGHZLWKDLUFRQGLWLRQLQJV\VWHPRII
x &KDUJHV\VWHPVWKDWKHDWWKHUHIULJHUDQWZLOOIRUFHWKHFRUUHFWFKDUJHDPRXQWLQWRWKH
V\VWHP2QFHWKHIXOOFKDUJHKDVEHHQGLVSHQVHGWKHVHUYLFHYDOYHPXVWEHFORVHGDQG
WKHDLUFRQGLWLRQLQJV\VWHPFDQEHVWDUWHG

 7KURXJKWKHORZVLGHZLWKWKHV\VWHPUXQQLQJ
x :LWKWKHHQJLQHUXQQLQJDWIOLJKWLGOHVSHHG DSSUR[LPDWHO\SHUFHQW1J ZLWKWKH
SURSHOOHULQWKHIHDWKHUHGSRVLWLRQ7KHDLUFRQGLWLRQHUPDVWHUVZLWFKLVWXUQHG21
7KHEORZHUVZLWFKLVWXUQHG21+,*+DQGWKHVHUYLFHJDXJHVDUHPRQLWRUHGWRVHH
WKDWWKHUHDGLQJRQWKHKLJKSUHVVXUHJDXJHLVLQFUHDVLQJZKLOHWKHUHDGLQJRQWKH
ORZSUHVVXUHJDXJHLVGHFUHDVLQJ,IWKHJDXJHVIDLOWREHKDYHDVVSHFLILHGWXUQWKH
DLUFRQGLWLRQHUPDVWHUVZLWFK2))VWRSWKHHQJLQHDQGLQYHVWLJDWHWKHFDXVHRIWKH
FRPSUHVVRU¶VIDLOXUHWRHQJDJH,IWKHJDXJHVEHKDYHSURSHUO\WKHQFKDUJLQJFDQ
FRQWLQXH
x 5HIULJHUDQWLVLQWURGXFHGLQWRWKHORZSUHVVXUHVHUYLFHYDOYHZKLOHWKHFRPSUHVVRU
LV RSHUDWLQJ 7KH ORZ SUHVVXUH PDQLIROG YDOYH VKRXOG EH RSHQHG WR DOORZ VORZ
LQFUHDVHVLQSUHVVXUHLQERWKWKHKLJKDQGORZSUHVVXUHVLGHVRIWKHV\VWHP7KLV
ILOOLQJVKRXOGFRQWLQXHXQWLOWKHORZSUHVVXUHVLGHRIWKHV\VWHPVWDELOL]HVDWWR
SVLDQGWKHKLJKSUHVVXUHVLGHLVEHWZHHQDQGSVL7KHVLJKWJODVVRQWRS
RIWKHUHFHLYHUGU\HUVKRXOGVKRZFOHDUOLTXLGIORZZLWKRXWEXEEOHV
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


' 6\VWHP2LO%DODQFH

D  2LO)ORZ
x &RPSUHVVRUOXEULFDWLRQRFFXUVDVWKHRLOZKLFKFLUFXODWHVZLWKWKHUHIULJHUDQWSDVVHV
WKURXJK WKH FRPSUHVVRU FUDQNFDVH GXULQJ RSHUDWLRQ 7KH 6DQGHQ 6' VHULHV
FRPSUHVVRUDFKLHYHVRSWLPDOGXUDELOLW\DQGFRROLQJSHUIRUPDQFHZKHQRLOFLUFXODWHV
WKURXJKWKHV\VWHPDWDUDWLRRIWRRLOWRUHIULJHUDQW([FHVVRLOFDQDFWDV
DQLQVXODWRUOLPLWLQJKHDWWUDQVIHULQWKHHYDSRUDWRUDQGFRQGHQVHUZKLOHWRROLWWOHRLO
FDQQHJDWLYHO\DIIHFWGXUDELOLW\

E  2LO&KHFNLQJ,V1RW5HTXLUHG8QGHU1RUPDO&RQGLWLRQV
x 7KHPRELOHUHIULJHUDWLRQV\VWHPLVDFORVHGORRSV\VWHPKHQFHLWLVQRWQHFHVVDU\WR
FKHFNRUFKDQJHRLOLQV\VWHPVIXQFWLRQLQJQRUPDOO\DQGQRWLQQHHGRIUHSDLU7KH
V\VWHPLVRODWHVWKHRLODQGUHIULJHUDQWIURPPRLVWXUHDQGFRQWDPLQDQWVZKLOHQRUPDO
RSHUDWLQJWHPSHUDWXUHVZLOOEHZHOOEHORZDSRLQWWKDWZLOOFDXVHRLOGHJUDGDWLRQ

F  :KHQ2LO$GGLWLRQRU%DODQFLQJLVUHTXLUHG
x &RPSUHVVRURUFRPSRQHQWUHSODFHPHQW
x /RVVRIUHIULJHUDQWDQGRLOPL[WXUH
x $GGLQJRLOWRWKHV\VWHPLVUHTXLUHGZKHQUHIULJHUDQWORVVRFFXUVGXHWROHDNDJHDW
DQ\V\VWHPFRPSRQHQW6LQFHRLOLVKHOGLQVXVSHQVLRQZLWKWKHUHIULJHUDQWRLOZLOO
EH ORVW ZLWK WKH HVFDSLQJ UHIULJHUDQW JDV 2LO ZLOO QHHG WR EH LQVSHFWHG IRU
FRQWDPLQDWLRQGXULQJUHSDLUVWRGHWHUPLQHLIIOXVKLQJLVUHTXLUHG

G  2LO$GGLWLRQ:KHQ5HSODFLQJ6\VWHP&RPSRQHQWV
x $LU FRQGLWLRQLQJ V\VWHPV DUH GHVLJQHG WR KDYH D JLYHQ RLO FKDUJH VR GXULQJ
FRPSRQHQWUHSODFHPHQWWKHJRDOVKRXOGEHWRPDLQWDLQWKHLQLWLDOIDFWRU\RLOFKDUJH
,W LV XQGHUVWRRGWKDW V\VWHP RLO EDODQFH UHVXOWLQJ IURP VHUYLFH DFWLYLWLHV LV QRW DQ
H[DFW SURFHVV KRZHYHU XVLQJ WKHVH JXLGHOLQHV VKRXOG URXJKO\ PDLQWDLQ WKH 2(0
V\VWHPRLOFKDUJH
x 2SHUDWLQJFRQGLWLRQVDWWKHWLPHRIV\VWHPVKXWGRZQZLOOGHWHUPLQHZKHUHDQGKRZ
PXFKRLOVHWWOHVLQDQ\JLYHQFRPSRQHQWLQWKHDLUFRQGLWLRQLQJV\VWHP7KHUHIRUH
WKHH[DFWDPRXQWRIRLOUHPRYHGGXULQJUHIULJHUDQWORVVRUFRPSRQHQWUHSODFHPHQW
FDQRQO\EHHVWLPDWHGLQDVKRSHQYLURQPHQW6DQGHQUHFRPPHQGVDGGLQJ63RLO
XVLQJWKHVHJXLGHOLQHV
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


H  6\VWHP2LO$PRXQW
x 2LOFLUFXODWHVZLWKWKHUHIULJHUDQWGXULQJRSHUDWLRQ'XULQJRIISHULRGVRLOZLOOVHWWOH
LQDOOV\VWHPFRPSRQHQWVZLWKPRUHFROOHFWLQJLQFRROFRPSRQHQWVOLNHHYDSRUDWRUV
DFFXPXODWRUDQGVXFWLRQOLQHV



(YDSRUDWRU

'ULHU



'XULQJVKXWGRZQRLOVHWWOHVWKURXJKRXWWKHV\VWHPFROOHFWLQJLQDOOFRPSRQHQWV

I  2LO5HSODFHPHQW$PRXQW'XULQJ6HUYLFH
x :KHQUHSODFLQJDV\VWHPFRPSRQHQWWKHJRDOLVWRUHVWRUHWRWKHRULJLQDOIDFWRU\RLO
DPRXQW8VHWKHFKDUWEHORZDVDJXLGHIRUUHVWRULQJRLOTXDQWLWLHVZKHQUHSODFLQJ
V\VWHPFRPSRQHQWV



7\SLFDO2LO$PRXQW 7\SLFDO2LO$PRXQW
&RPSRQHQW 'XDO&RQG 6LQJOH&RQG
IOR] FF IOR] FF
0DMRU6\VWHP/HDN
   
6XFWLRQ/LQH7R(YDSRUDWRU
&RQGHQVHU
   
(YDSRUDWRU
5HFHLYHU'ULHU
0LQRU6\VWHP/HDN    
2WKHU+RVHVRU+DUG/LQHV
&RPSUHVVRU (TXDOWRDPRXQWGUDLQHGIURPROGFRPSUHVVRU

$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


([DPSOH
$ODUJHV\VWHPZLWKQROHDNUHTXLUHVQHZFRPSUHVVRUVXFWLRQ
KRVHDQGGULHU 1RWH 1HZ FRPSUHVVRUV DUH
 GHOLYHUHGZLWKIXOORLOFKDUJH,WZLOO
'UDLQRLOIURPROGFRPSUHVVRU R] EH QHFHVVDU\ WR DGG RU VXEWUDFW
2LOUHPDLQLQJLQROGFRPSUHVVRU R] VHHQRWHEHORZ  IURP WKH GHOLYHUHG RLO DPRXQW VR
2LOORVWIURPROGVXFWLRQKRVH R] IURPWDEOH  WKHWRWDOLQWKHFRPSUHVVRUequals
2LOUHPDLQLQJLQROGGULHU R] IURPWDEOH  the amount to be added
$PRXQWWREHDGGHG R]


([DPSOH²,IWKHQHZFRPSUHVVRUFRQWDLQVR] FF \RX
PXVWGUDLQR]VRWKHWRWDOLQWKHFRPSUHVVRULVR]

1RWH:KHQGUDLQLQJWKHROGFRPSUHVVRUURXJKO\R]ZLOOUHPDLQLQWKHFRPSUHVVRUDV
ILOPFRDWLQJDOOLQWHUQDOVXUIDFHV

 &RPPRQ&DXVHVRI&RPSUHVVRU)DLOXUH
$ &RPSUHVVRU2YHUKHDWHG
x 2YHUKHDWLQJLV PRVW RIWHQ FDXVHGE\ ORVVRI UHIULJHUDQW FKDUJH &RRO VXFWLRQ VLGH
UHIULJHUDQWUHWXUQLQJIURPWKHHYDSRUDWRUSURYLGHVFRROLQJIRUWKHFRPSUHVVRU2QFH
WKHUHIULJHUDQWFKDUJHLVORVWWKHUHLVQRUHIULJHUDQWHQWHULQJWKHFRPSUHVVRUKHQFHQR
FRPSUHVVRUFRROLQJ%ORFNDJHVLQWKHV\VWHPZLOODOVRSUHYHQWFRROUHIULJHUDQWIORZ
WRWKHFRPSUHVVRU

% &RPSUHVVRU&RQWDPLQDWHG
7KHUHDUHVHYHUDOW\SHVRIFRQWDPLQDWLRQ7KHPRVW
FRPPRQW\SHVDUH
x )RUHLJQPDWHULDOOLNHPHWDOFKLSVGLUWDQG
GHVLFFDQW5HVXOWLQJLQEURNHQLQWHUQDO
FRPSUHVVRUFRPSRQHQWVHYHQWXDOO\ORFNLQJ
XSWKHFRPSUHVVRU
x 0RLVWXUH IURP LPSURSHU HYDFXDWLRQ RU KRVH
SHUPHDWLRQ 0RLVWXUH ZLOO FRUURGH LQWHUQDO
SDUWVUHVXOWLQJLQIDLOXUH0RLVWXUHZLOOFUHDWH
KLJKHU V\VWHP SUHVVXUHV RU IUHH]H LQ WKH
H[SDQVLRQ GHYLFH DQG EORFNLQJ UHIULJHUDQW
IORZ
x $LU&RQGLWLRQLQJV\VWHPIOXVK
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


& &OXWFK6OLSSDJH
x 7KHFRPSUHVVRUFOXWFKLVVLPSO\WZRIULFWLRQ
VXUIDFHVIRUFHGWRJHWKHUOLNHDVHWRIEUDNHV
(DFKWLPHWKHFOXWFKLVHQJDJHGVRPHDPRXQW
KHDW LV JHQHUDWHG ,I WKH HQJDJHPHQWV RFFXU
UDSLGO\ RU WKH V\VWHP YROWDJH LV WR ORZ
H[FHVVLYH KHDW FUHDWHG ZLOO FDXVH IDLOXUH RI
EHDULQJVHDOVDQGRUPHOWLQJRIWKHILHOGFRLO
HSR[\


' +DQGOLQJRU,PSDFW'DPDJH
x 6WULNLQJGURSSLQJRURYHUWRUTXHZLOOUHVXOWLQWKHVHW\SHVRIGDPDJH














$9,21,&6

2SWLRQDOUDGLRHTXLSPHQWPD\LQFOXGHWKRVHOLVWHGLQGUDZLQJ5HPRYDORUUHSODFHPHQWRIDQ\
RI WKH UDGLRV UHTXLUHV UHPRYDO RI DSSOLFDEOH IDVWHQHUV LQ DFFRUGDQFH ZLWK WKHLU FRUUHVSRQGLQJ
LQVWDOODWLRQ GUDZLQJ DV LQGLFDWHG RQ GUDZLQJ   $OO IDVWHQHUV PXVW EH URXWLQHO\ LQVSHFWHG IRU
WLJKWQHVV$QWHQQDVPXVWEHURXWLQHO\LQVSHFWHGIRUVHFXUHDWWDFKPHQWWRWKHDLUFUDIWDQGVWUXFWXUDO
LQWHJULW\5RXWLQHFOHDQLQJRIWKHDYLRQLFVER[DQGLWVFRPSRQHQWVPD\EHGRQHE\ZLSLQJZLWKDGDPS
FORWK9HQWLODWLRQRSHQLQJVLQHTXLSPHQWKRXVLQJVVKRXOGEHRSHQDQGIUHHIURPREVWUXFWLQJOLQWDQG
GXVW  )RU IXUWKHU LQIRUPDWLRQ RQ WHVWLQJ DGMXVWPHQW WURXEOHVKRRWLQJ DQG UHSDLUV RI WKH HOHFWURQLF
HTXLSPHQW DQG V\VWHPV UHIHU WR WKH PDQXIDFWXUHU¶V PDLQWHQDQFH LQVWUXFWLRQV PDQXDOV DQG WKH
DSSOLFDEOH)HGHUDO$YLDWLRQ5HJXODWLRQV $GGLWLRQDODYLRQLFVPDLQWHQDQFHLQIRUPDWLRQLVIRXQGLQ
)$$$&%&KDSWHUDQG

(OHFWULFDOSRZHUWRWKHUDGLRVLVFRQWUROOHGE\DFLUFXLWEUHDNHUVZLWFKORFDWHGRQWKHUDGLRER[3RZHU
LVWKHQGLVWULEXWHGWRHDFKDYLRQLFVFRPSRQHQWZKLFKLVSURWHFWHGE\DQDGHTXDWHO\UDWHGFLUFXLWEUHDNHU
ORFDWHGRQWKHUDGLRER[RULQWKHORZHUSDQHO:LULQJVFKHPDWLFVVSHFLILFWRHDFKDYLRQLFVFRPSRQHQW
PD\EHREWDLQHGIURPPDQXIDFWXUHU¶VGDWD7KHVHVFKHPDWLFVDUHIRXQGLQWKHILJXUHVVHFWLRQRIWKH
PDQXDO
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


%$77(5,(6

$FFHVVWRWKHEDWWHULHVLVVKRZQLQ)LJXUH7KHEDWWHULHVRQ\RXUWXUELQHZLOOUHTXLUH5(*8/$5
VHUYLFLQJ<RXUEDWWHULHVZLOOODVWORQJHULI\RXPDLQWDLQWKHSURSHUZDWHUOHYHODQGWKHSURSHUYROWDJH
RQWKHYROWDJHUHJXODWRU7RRKLJKDYROWDJHRQWKHUHJXODWRUZLOOERLOWKHEDWWHULHV0RVWRSHUDWRUVXVH
DGLJLWDOYROWPHWHUWRVHWWKHUHJXODWRUWRDPHDVXUHGYROWDJHRI

2QHRIWKHKDUGHVWWKLQJVRQ\RXUEDWWHULHVLVQHJOHFWLQWKHRIIVHDVRQ$LU7UDFWRUVZLWK&URSKDZN
IORZPHWHUVRUDQ\WKLQJHOVHZLUHGGLUHFWWRWKHEDWWHU\VKRXOGEHGLVFRQQHFWHGGXULQJWKHRIIVHDVRQ
VRDVQRWWRGUDLQWKHEDWWHU\3HULRGLFFKHFNVVKRXOGEHPDGHGXULQJWKHRIIVHDVRQWRLQVXUHWKDWWKH
EDWWHULHVVWD\FKDUJHG<RXPD\WXUQRQWKHPDVWHUVZLWFKDQGUHDGEDWWHU\YROWDJHRQWKHYROWPHWHU
%DWWHULHVEHORZYROWVVKRXOGEHSXWRQWKHFKDUJHUDQGFKDUJHGEDFNWRIXOOVWUHQJWK,I\RXZLOO
NHHS WKHP VHUYLFHG GXULQJ WKH VHDVRQ DQG JLYH WKHP D OLWWOH PDLQWHQDQFH LQ WKH RIIVHDVRQ WKHLU
ORQJHYLW\ZLOOLQFUHDVH'RQ¶WIRUJHWWRGUDLQWKHEDWWHU\DFLGVXPSDWUHJXODULQWHUYDOVDVGHVFULEHGLQ
)LJXUH.HHSWKHEDWWHULHVFOHDQ'LUWDQGDFLGRQWKHRXWVLGHRIWKHEDWWHU\SURYLGHDSDWKIRUD
VOLJKWIORZRIHOHFWULFLW\7KLVZLOOGLVFKDUJHDEDWWHU\LQWLPH

%DWWHU\5HPRYDODQG5HSODFHPHQW

$EDWWHU\PD\EHUHPRYHGE\IROORZLQJWKHVHVWHSV

 5HPRYHWKHVLGHVNLQVLPPHGLDWHO\IRUZDUGRIWKHILUHZDOORQERWKVLGHVRIWKHDLUSODQH

 5HOHDVHWKHVSULQJODWFKHVDQGUHPRYHFRYHUVIURPDOOWKUHHRIWKHEDWWHU\ER[HV

 5HPRYHWKHJURXQGFDEOHVIURPWKHLUWHUPLQDOSRVWVRQDOOWKUHHEDWWHULHVDQGVHFXUH
WKHPZHOOFOHDURIWKHEDWWHULHV

 5HPRYHWKHSRVLWLYHFDEOHIURPWKHEDWWHU\RUEDWWHULHVWKDWDUHGHVLUHGWREHUHPRYHG

 ,ISRVVLEOHOLIWWKHEDWWHU\ V YHUWLFDOO\RXWRIWKHEDWWHU\ER[DQGUHPRYHIURPWKHULJKW
KDQGVLGHRIWKH DLUSODQH ,IWKLV LV QRW SUDFWLFDO SDVV DORQJVWXUG\URGWKURXJK WKH
HQJLQHPRXQWWLHFORVHWRWKHEDWWHU\ZLWKVXLWDEOHURSHRUFRUGWKHQOLIWIURPERWKVLGHV
RIWKHDLUSODQHWRFOHDUWKHEDWWHU\ER[DQGSDVVRXWWKURXJKWKHULJKWKDQGVLGHRIWKH
DLUSODQH

5HSODFHPHQWRIWKHEDWWHULHVPD\EHDFFRPSOLVKHGE\UHYHUVLQJWKHVWHSVIRUUHPRYDOOLVWHGDERYH
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


'$1*(5

$OORIWKHEDWWHULHVDUHFRQQHFWHGLQSDUDOOHO7KHSRVLWLYHOHDGIURP

DQ\ EDWWHU\ LV +27 HYHQ LI LW DQG LWV DVVRFLDWHG JURXQG OHDG DUH

GLVFRQQHFWHGIURPWKHLUEDWWHU\,WLVYLWDOWKDWDOOJURXQGOHDGVDUH

GLVFRQQHFWHGILUVWDQGUHFRQQHFWHGODVWZKHQEDWWHULHVDUHUHPRYHG

DQGUHSODFHG)LUHH[SORVLRQDQGSHUVRQDOLQMXU\DUHSRVVLEOHLIWKLV

SUHFDXWLRQLVQRWREVHUYHG


&KHFNLQJWKH%DWWHULHV

$OZD\V ZHDU SURWHFWLYH FORWKLQJ UXEEHU JORYHV DQG D IDFH VKLHOG ZKHQ VHUYLFLQJ EDWWHULHV 7KH
EDWWHULHVDUHFKHFNHGE\GHWHUPLQLQJWKHOHYHORIWKHHOHFWURO\WHLQHDFKFHOO)LUVWRIDOOWKHEDWWHU\FDSV
DUHUHPRYHG7KHQHDFKFHOOLVLQVSHFWHGLQGLYLGXDOO\8VLQJDOLJKWLIQHFHVVDU\WKHHOHFWURO\WHOHYHO
VKRXOGEHREVHUYHGDWRUVOLJKWO\DERYHWKHSODVWLFVSOLWULQJWKDWLVYLVLEOHWKURXJKWKHILOOLQJKROH




%DWWHU\&XWRXW

,IWKHHOHFWURO\WHIOXLGOHYHOLVORZDQGDGGLQJIOXLGLVQHFHVVDU\WKHHOHFWURO\WHOHYHOFDQEHUDLVHGE\
DGGLQJGLVWLOOHGZDWHU7KHEDWWHU\VKRXOGQRWEHRYHUILOOHG7KHHOHFWURO\WHOHYHOVKRXOGQRWEHPRUH
WKDQRQHTXDUWHULQFKDERYHWKHVSOLWULQJ

:KHQ D EDWWHU\ VHHPV ZHDN RU ZLOO QRW KROG D FKDUJH DIWHU FKDUJLQJ UHSODFLQJ WKH EDWWHU\ PD\ EH
QHFHVVDU\7KHFKDUJHFDSDFLW\RILQGLYLGXDOFHOOVPD\EHGHWHUPLQHGE\FKHFNLQJWKHVSHFLILFJUDYLW\
RIWKHHOHFWURO\WHLQWKRVHFHOOV

7KH VSHFLILFJUDYLW\ FKHFN FDQ EH GRQH ZLWK WKH XVH RI D K\GURPHWHU FRQVWUXFWHG RI DFLGUHVLVWDQW
PDWHULDOV 7KH VSHFLILFJUDYLW\ VKRXOG UDQJH IURP  IRU D IXOO\GLVFKDUJHG FHOO WR  IRU D IXOO\
FKDUJHGFHOODVSHFLILFJUDYLW\RIRUPRUHLVFRQVLGHUHGDQDGHTXDWHFKDUJH$VSHFLILFJUDYLW\
RIOHVVWKDQLQGLFDWHVFKDUJLQJLVUHTXLUHG$YDULDQFHRIVSHFLILFJUDYLW\PRUHWKDQIURP
RWKHUFHOOVLQWKHEDWWHU\LVDQLQGLFDWLRQRIDZHDNFHOODQGWKHEDWWHU\VKRXOGEHUHSODFHG$VSHFLILF
JUDYLW\UHDGLQJRIWRLQGLFDWHVDIXOO\FKDUJHGFHOO
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


&RPPHUFLDO EDWWHU\ K\GURPHWHUV DUH QRUPDOO\ XVHG IRU VSHFLILFJUDYLW\ FKHFNV 7KHVH K\GURPHWHUV
PD\GLVSOD\VSHFLILFJUDYLW\UHDGLQJVRUPLJKWKDYHUHGDQGJUHHQEDQGV'HSHQGLQJRQWKHVWDWHRI
FKDUJHWKHVSHFLILFJUDYLW\UHDGLQJVVKRXOGQRWEHLQWHUSUHWHGDVDEVROXWHEXWDVFRPSDUDWLYHUHDGLQJV
ZLWKRWKHUFHOOVLQWKHEDWWHU\$VLQJOHFHOOZKRVHVSHFLILFJUDYLW\UHDGLQJLVDWZLGHYDULDQFHVZLWK
RWKHUFHOOVLQWKHEDWWHU\VXJJHVWVDGHDGFHOOUHTXLULQJUHSODFHPHQWRIWKHEDWWHU\

7KHVSHFLILFJUDYLW\RIWKHHOHFWURO\WHLQWKHEDWWHU\LVRQO\DQLQGLFDWLRQRIWKHOHYHORIFKDUJHDQGLV
QRWWKHRQO\GHWHUPLQDWLRQRIWKHFRQGLWLRQRIWKHEDWWHU\,IWKHEDWWHU\VKRZVWREHFKDUJHGDORDGWHVW
FDQEHSHUIRUPHGWRGHWHUPLQHLIWKHEDWWHU\LVJRRG7RSHUIRUPDORDGWHVWDQDUWLILFLDOORDGLVDSSOLHG
WRWKHEDWWHU\DQGWKHEDWWHU\YROWDJHDQGFHOOHOHFWURO\WHDUHPRQLWRUHGZKLOHWKHORDGLVDSSOLHG

7RFKHFND* *$7 EDWWHU\ILUVWGLVFRQQHFWLWIURPWKHRWKHUEDWWHULHVDQGPDNHVXUHWKDWLW
LVIXOO\FKDUJHG&RQQHFWDDPSORDGWRWKHEDWWHU\DQGPRQLWRUWKHEDWWHU\YROWDJH$DPSORDG
FDQEHREWDLQHGE\FRQQHFWLQJWZRZDWW*(ODPSVLQSDUDOOHO,IDIWHUPLQXWHVWKHEDWWHU\
YROWDJHLVDWOHDVW9ROWVRUPRUHWKHEDWWHU\LVVHUYLFHDEOH:KLOHWKHEDWWHU\LVORDGHGPRQLWRUWKH
HOHFWURO\WHLQWKHFHOOV(OHFWURO\WHERLOLQJLQDFHOOLQGLFDWHVDEDGFHOO5HSODFHWKHEDWWHU\LILWIDLOVWR
PHHWWKLVUHTXLUHPHQW,IWKHEDWWHU\SDVVHVWKLVWHVWUHFKDUJHLWEHIRUHUHWXUQLQJLWWRVHUYLFH

,QVWDOOLQJD1HZ*LOO'U\&KDUJHG%DWWHU\

:KHQDQHZ*LOO* *$7 EDWWHU\LVLQVWDOOHGLQWKHDLUSODQHFHUWDLQSURFHGXUHVPXVWEH
REVHUYHGWRHQVXUHWKHVDWLVIDFWRU\VHUYLFHRIWKHEDWWHU\

 &$87,21
 'RQRWUHPRYHVHDOVRUYHQWSOXJVXQWLO
 UHDG\WRILOOZLWKHOHFWURO\WH


7KHSURFHGXUHIRUFKDUJLQJWKHEDWWHU\LVVKRZQEHORZ

 5HPRYHVHDOVIURPFHOOV

 2Q,1,7,$/:(7'2:1ILOOHDFKFHOOZLWKVSHFLILFJUDYLW\VXOIXULFDFLGWRD
OHYHO-867$%29(7+(6(3$5$7256

 5RFNEDWWHU\IURPVLGHWRVLGHWRUHOHDVHDQ\WUDSSHGDLU5HDGMXVWHOHFWURO\WHOHYHODV
SHU6WHSDERYH

 /HWEDWWHU\VWDQGIRURQHKRXU

 &KHFN HOHFWURO\WH OHYHO DQG UHDGMXVW LI QHFHVVDU\ WR D OHYHO -867 $%29( 7+(
6(3$5$7256 (OHFWURO\WH OHYHO ZLOO JHQHUDOO\ H[SDQG RU ULVH GXH WR WKH JDVVLQJ
H[SHULHQFHGGXULQJWKHFKDUJLQJSURFHVVRXWOLQHGEHORZ 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


 ,167$//9(173/8*67,*+7/<,172($&+&(//

 3ULRUWRFKDUJLQJFOHDQDQGQHXWUDOL]HDQ\VSLOOHGDFLGRQWKHEDWWHU\XVLQJDVROXWLRQ
RIEDNLQJVRGDDQGZDWHU5LQVHZLWKFOHDQZDWHU

 &KDUJHEDWWHU\DWDQLQLWLDOFKDUJHUDWHRI$PSVXQWLODOOFHOOVDUHJDVVLQJIUHHO\DQG
WKHFKDUJHYROWDJHDQGVSHFLILFJUDYLW\RIHOHFWURO\WHVDUHFRQVWDQWRUWKHYROWDJHGURSV
RYHUWKUHHVXFFHVVLYHUHDGLQJVWDNHQDWRQHKRXULQWHUYDOV 7KLVSURFHGXUHPD\WDNH
KRXUVZLWKDFRQVWDQWFXUUHQWFKDUJHU 7KHFKDUJHUDWHLVUHGXFHGWR$PSVZKHQ
WKH FHOOV VWDUW JDVVLQJ 7KH IXOO\FKDUJHG EDWWHU\¶V HOHFWURO\WH OHYHO VKRXOG EH DW WKH
ERWWRPRIWKHVSOLWULQJZLWKWKHFKDUJHUVWLOORQ

 'XULQJWKHSHULRGRIFKDUJLQJWKHHOHFWURO\WHWHPSHUDWXUHVVKDOOEHPDLQWDLQHGEHWZHHQ
ƒ)DQGƒ) ƒ&DQGƒ& 

 :KHQEDWWHU\LVFRPSOHWHO\FKDUJHGWKHVSHFLILFJUDYLW\VKRXOGEHJUHDWHUWKDQ
5HDGLQJVVKRXOGEHWDNHQZLWKDQDLUFUDIWEDWWHU\K\GURPHWHUPDNLQJVXUHWRWDNHWKH
UHDGLQJVDVRXWOLQHGRQWKHK\GURPHWHULQVWUXFWLRQV

 $IWHU WKH EDWWHU\ LV )8//< &+$5*(' $1' :,7+ &+$5*(5 67,// 21
$'-867 (/(&752/<7( /(9(/ 72 7+( %27720 2) 7+( 63/,7 5,1* DQG
FRQWLQXHWRFKDUJHIRURQHKRXU&OHDQDQGQHXWUDOL]HDQ\VSLOOHGDFLGSULRUWRLQVWDOOLQJ
LQDLUFUDIW

)RUPRUHGHWDLOHGLQVWUXFWLRQVFDOODQGDVNIRU\RXUIUHH³*,//´VHUYLFHPDQXDO

%5$.(6

7KHZKHHOEUDNHXQLWVDUH&OHYHODQG7KHEUDNHXQLWFRQVLVWVRIWKHZKHHOF\OLQGHUDVVHPEO\
DQGWKHWRUTXHSODWHZKLFKLVDWWDFKHGWRWKHJHDUOHJZLWKWKHILYHD[OHEROWV7KHWRUTXHSODWHVDUH
LQWHUFKDQJHDEOHIURPULJKWWROHIWEXWWKHF\OLQGHUDVVHPEO\FDQEHFRQYHUWHGWRD5+RUD/+E\
PRYLQJWKHHOERZWRWKHIOXLGHQWU\SRUW

%UDNH5HPRYDODQG,QVWDOODWLRQ

%UDNHGHWDLOVDUHVKRZQLQ)LJXUH

%UDNHIOXLGXVHGLVUHG0LO+$SHWUROHXPEDVHIOXLGZKLFKLVXVHGLQPRVWOLJKWDLUFUDIW'R
QRWXVHDXWRPRWLYHEUDNHIOXLGDVWKLVZLOOVZHOOWKH2ULQJV

7KHZKHHOXQLWVFDQEHUHPRYHGE\XVLQJDZUHQFKWRUHPRYHWKHVL[EROWVDWWDFKLQJWKHWZRKDOYHVRI
HDFK EUDNH DVVHPEO\  7KH EUDNH OLQH PD\ EH OHIW FRQQHFWHG LI RQO\ WKH OLQLQJV DUH WR EH FKDQJHG
/LQLQJVDUH&OHYHODQGSQ DQGDUHLQVWDOOHGRYHUGRZHO SLQV $GDERIJHQHUDO SXUSRVH
KRXVHKROGJOXHPD\EHXVHGWRWHPSRUDULO\KROGWKHSDGLQSODFHIRULQVWDOODWLRQ7KHUHDUHOLQLQJV
SHUDLUFUDIW
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


(DFKEUDNHDVVHPEO\KDVWKUHHSLVWRQVZKLFKDUH&OHYHODQGSQ7KH2ULQJLQVWDOOHGLQWKH
F\OLQGHULVD&OHYHODQGSQ06(DFKSLVWRQDOVRLQFRUSRUDWHVDGUDJULQJZKLFKKROGVWKH
SLVWRQDJDLQVWWKHEDFNLQJSODWHRIWKHOLQLQJVRWKDWH[FHVVLYHSHGDOWUDYHOLVQRWUHTXLUHGIRUSRVLWLYH
EUDNHDFWLRQ

7RUHPRYHWKHSLVWRQVLQRUGHUWRFKDQJH2ULQJVUHPRYHWKHEUDNHOLQHDQGDSSO\DLUSUHVVXUHDWWKH
IOXLGHQWU\SRUW7KHSLVWRQVDUHDOXPLQXPDQGVKRXOGEHFKHFNHGIRUZHDURUEXUUVWKDWFRXOGFXW
WKH2ULQJ&KHFNWKHERUHLQWKHKRXVLQJDWWKHVDPHWLPH:KHQLQVWDOOLQJQHZ2ULQJVVRDNWKHP
LQ0,/+$IOXLGEHIRUHUHSODFLQJWKHP5HLQVWDOOWKHSLVWRQVZLWKFDUHVRWKDWWKH2ULQJLV
QRWGDPDJHG

%UDNH'LVFV

7KHEUDNHGLVFLVD&OHYHODQGSQDQGLVDWWDFKHGWRWKHEROWVWKDWDWWDFKWKHWZRULPKDOYHV
WRJHWKHU7KHZKHHOPXVWEHUHPRYHGIURPWKHDLUFUDIWSHUSUHYLRXVLQVWUXFWLRQVWKHWLUHGHIODWHGDQG
WKH ZKHHO GLVDVVHPEOHG LQ RUGHU WR UHPRYH WKH EUDNH GLVF  :LWK WKH QHZ EUDNH GLVF LQ SODFH UH
DVVHPEOHZKHHODQGWLUHSHUSUHYLRXVLQVWUXFWLRQV

7KHEUDNHVKLPVSQDUHWKHSDUWVWKDWORRNOLNHDUFVRIDFLUFOHLQ)LJXUH7KH\VKRXOG
EHUHSODFHGDWWKHWLPHWKHEUDNHGLVFVDUHUHQHZHG7KHVHVKLPVWHQGWRJHWWKLQQHUZLWKXVH:KHQ
WKHQHZIXOOWKLFNQHVVEUDNHGLVFLVLQVWDOOHGWKHEUDNHVZLOOSUREDEO\GUDJEHFDXVHRIWKHWKLQQLQJRI
WKLVVKLP,WLVYHU\HDV\WRRUGHUWKHVHVKLPVZKLOH\RXDUHRUGHULQJWKHUHVWRI\RXUEUDNHSDUWV

8QGHU DYHUDJH ILHOG FRQGLWLRQV D EUDNH GLVF VKRXOG JLYH \HDUV RI WURXEOH IUHH VHUYLFH  +RZHYHU
XQLPSURYHGILHOGVVWDQGLQJZDWHUKHDY\LQGXVWULDOSROOXWLRQRULQIUHTXHQWXVHRIWKHDLUFUDIWPD\
QHFHVVLWDWHPRUHIUHTXHQWLQVSHFWLRQRIGLVFVWRSURORQJWKHOLIHRIWKHEUDNHOLQLQJ

*HQHUDOO\WKHGLVFIDFHVVKRXOGEHFKHFNHGIRUZHDUJURRYHVGHHSVFUDWFKHVH[FHVVLYHJHQHUDOSLWWLQJ
RU FRQLQJ RI WKH EUHDN GLVF  &RQLQJ EH\RQG  LQFK LQ HLWKHU GLUHFWLRQ ZRXOG EH FDXVH IRU
UHSODFHPHQW

6LQJOHRULVRODWHGJURRYHVXSWRLQFKGHHSVKRXOGQRWEHFDXVHIRUUHSODFHPHQWDOWKRXJKJHQHUDO
JURRYLQJRIWKHGLVFIDFHVZLOOUHGXFHOLQLQJOLIH

%UDNH/LQLQJV

7KHUHDUHVL[SDLUVRIWKHEUDNHOLQLQJVRQHDFKEUDNH7KH\DUH&OHYHODQGSQ7KUHHRI
WKHSDLUVDUHRQWKHIURQWRIWKHEUDNHDQGWKUHHWRWKHUHDU7KHSDLUVDUHORFDWHGRQHLWKHUVLGHRIWKH
EUDNHGLVFGLUHFWO\EHQHDWKHDFKRIWKHVL[SLVWRQV

7KHHQGSDLURIEUDNHOLQLQJVFDQEHVHHQRQWKHWRSDQGERWWRPHQGVRIERWKVLGHVRIWKHEUDNHGLVN
ZKLOH LQVWDOOHG RQ WKH DLUSODQH  1HZ EUDNH SDGV DUH LQFK WKLFN  7KH EUDNH OLQLQJV VKRXOG EH
UHSODFHG ZKHQWKHOLQLQJPDWHULDO LV OHVVWKDQLQFKWR SUHYHQW GDPDJHWR WKHEUDNHGLVF1HZ
OLQLQJVVKRXOGEHFRQGLWLRQHGDVIROORZVDIWHULQVWDOODWLRQ
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


 3HUIRUPWZR  FRQVHFXWLYHIXOOVWRSEUDNLQJDSSOLFDWLRQVIURPWRNQRWV'RQRW
DOORZWKHEUDNHGLVFVWRFRROVXEVWDQWLDOO\EHWZHHQWKHVWRSV

 $OORZWKHEUDNHVWRFRROIRUWRPLQXWHV

 $SSO\EUDNHVDQGFKHFNIRUUHVWUDLQWDWKLJKVWDWLFWKURWWOH,IEUDNHVKROGFRQGLWLRQLQJ
LVFRPSOHWH

 ,IEUDNHVFDQQRWKROGDLUFUDIWGXULQJVWDWLFUXQXSDOORZEUDNHVWRFRPSOHWHO\FRRODQG
UHSHDWVWHSVWKURXJK

%UDNH0DVWHU&\OLQGHUV

7KHPDVWHUF\OLQGHUVDUH&OHYHODQGSQ)7KHORZHUHQGLVEROWHGWRDOXPLQXPVWUDSVFRQQHFWHG
WRWKHUXGGHUSHGDO

%RWKWKHVWUDSDQGWKHSHGDOKDYHEURQ]HEXVKLQJVWKDWFDQEHUHSODFHGZKHQZRUQ7KHEXVKLQJV
DUHRLOLPSUHJQDWHGDQGGRQRWUHTXLUHOXEULFDWLRQ'HWDLOVRIWKHEUDNHPDVWHUF\OLQGHUVDUHVKRZQ
LQ)LJXUH

,I WKH UXGGHU SHGDO SRVLWLRQ DQJOH  VKRXOG QHHG FKDQJLQJ IRU SLORW FRPIRUW WKH FKHFN QXW FDQ EH
ORRVHQHG5HPRYHWKH$1$EROWDWORZHUHQGRIPDVWHUF\OLQGHUDQGURWDWHWKHFOHYLVLQHLWKHU
GLUHFWLRQWRLQFUHDVHRUGHFUHDVHWKHGHVLUHGDQJOH5HLQVWDOO$1$EROWWRUTXHQXWWRLQOE
6QXJ$1FKHFNQXW7RUHPRYHWKHPDVWHUF\OLQGHUORRVHQFKHFNQXWDQGURWDWHSOXQJHURXWRI
WKHFOHYLV7KHQUHPRYHWKHEROWDWWDFKLQJWKHPDVWHUF\OLQGHUWRWKHVWHHOSODWHVDQGGLVFRQQHFWWKH
WZREUDNHOLQHVDWWKHF\OLQGHU

$UHSDLUNLWLVDYDLODEOHIRUWKHPDVWHUF\OLQGHUZKLFKLV&OHYHODQGSQ7KHF\OLQGHUPD\
EHGLVDVVHPEOHGDQGUHSDLUSDUWVLQVWDOOHGSHULQVWUXFWLRQVIXUQLVKHGZLWKNLW,IWKHFKHFNQXWDWWKH
ERWWRP LV OHIW LQ WKH RULJLQDO SRVLWLRQ WKH SHGDO DQJOH ZLOO EH WKH VDPH DV EHIRUH ZKHQ WKH PDVWHU
F\OLQGHULVUHLQVWDOOHG%HVXUHWKHF\OLQGHULVIUHHWRVZLQJWKURXJKWKHIXOOUDQJHRIUXGGHUSHGDO
WUDYHO,ILWGRHVQRWWKHWZRSODWHVZKLFKDWWDFKWKHF\OLQGHUDUHWRRFORVHWRJHWKHUDQGUHTXLUHDQ
DGGLWLRQDOVSDFHUZDVKHU

,IDVSRWRIEUDNHIOXLGDSSHDUVRQWKHFRFNSLWIORRURQWKH/+VLGHLWGRHVQRWQHFHVVDULO\PHDQWKDW
WKHPDVWHUF\OLQGHULVOHDNLQJ7KHXVXDOFDXVHLVRYHUILOOLQJWKHEUDNHUHVHUYRLUVRWKDWZKHQEUDNHV
DUHXVHGDQGIOXLGUHWXUQVWRWKHUHVHUYRLULWVRPHWLPHVOHDNVWKURXJKWKHYHQWKROHLQWKHUHVHUYRLU
FDS

%UDNH%OHHGLQJ

,IDLUHQWHUVWKHEUDNHV\VWHPEHFDXVHRIZRUQ2ULQJVRUWKHUHSODFHPHQWRIEUDNHV\VWHPFRPSRQHQWV
WKH EUDNH SHGDO ZLOO EHFRPH VRIW DQG WKH EUDNHV ORVH VRPH RI WKHLU HIIHFWLYHQHVV  ,W ZLOO WKHQ EH
QHFHVVDU\WREOHHGWKHEUDNHVWRUHPRYHWKHDLU'HWDLOVRIWKHEUDNHEOHHGLQJSRUWVDUHVKRZQLQ)LJXUH

$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


7KH FRQYHQWLRQDO SUDFWLFH RI SODFLQJ D SUHVVXUH SRW OLQH DW WKH EOHHG VFUHZ ORFDWLRQ RQ WKH ZKHHO
F\OLQGHUDQGIRUFLQJIOXLGXSWKURXJKWKHV\VWHPJHQHUDOO\GRHVQRWZRUN7KHIDFWRU\SUDFWLFHLVWR
SODFHRQHSHUVRQLQWKHFRFNSLWDQGDQRWKHUDWWKHZKHHOF\OLQGHUZLWKDEOHHGVFUHZZUHQFKDQGD
&RNHERWWOHWRFDWFKWKHIOXLG%HIRUHWKHEOHHGLQJSURFHVVEHJLQVLWLVQHFHVVDU\WRREWDLQDVKRUWSLHFH
DERXWORQJ RIZLQGVKLHOGZLSHUKRVHZKLFKZLOOILWVQXJO\RYHUWKHEOHHGVFUHZKHDGVRWKDWDOOWKH
IOXLGFDQEHFDXJKWLQWKH&RNHERWWOHDQGQRWZDVWHG

7KHSURFHGXUHLVDVIROORZV

 7KHFRFNSLWPDQSXOOVRQWKHSDUNLQJEUDNHDQGOHDYHVLWRQ7KHQKHSXPSVWKHSHGDO
RQWKHVLGHEHLQJEOHGVHYHUDOWLPHVXQWLOWKHSHGDOEHJLQVWRJHWILUP7KHSDUNLQJEUDNH
LVOHIWRQVLQFHLWLVDFWXDOO\DRQHZD\FKHFNYDOYH

 7KHQWKHFRFNSLWPDQSXVKHVRQWKHSHGDODQGVKRXWV³2SHQ´WRWKHPDQDWWKHZKHHO
F\OLQGHUZKRSURFHHGVWRRSHQWKHEOHHGVFUHZZLWKDRSHQHQGZUHQFK%UDNH
IOXLGDQGDLUWKHQUXVKWKURXJKWKHEOHHGVFUHZWKURXJKWKHKRVHDQGLQWRWKH&RNH
ERWWOH

 7KHFRFNSLWPDQZKRKDVKHOGWKHSHGDODOOWKHZD\GRZQWKHQVKRXWV³&ORVH´DVVRRQ
DV WKH SHGDO UHDFKHV WKH GRZQ SRVLWLRQ DQG WKH RWKHU SHUVRQ FORVHV WKH EOHHG VFUHZ
LPPHGLDWHO\

 7KHFRFNSLWPDQXVHV WKHSURFHGXUHRXWOLQHGLQ  WR REWDLQDILUP SHGDO DQGDJDLQ
UHSHDWVVWHS  DQG  

 7KH DERYH SURFHGXUH LV UHSHDWHG DV PDQ\ DV D GR]HQ RU VR WLPHV XQWLO ILUP EUDNH LV
REWDLQHGZLWKWKHSDUNLQJEUDNHRII%HVXUHWRDGGEUDNHIOXLGWRWKHUHVHUYRLUEHIRUH
WKHUHVHUYRLULVHPSWLHGRUHOVH\RXZLOOKDYHWRVWDUWDOORYHUDJDLQ'RQ¶WXVHWKHIOXLG
LQWKH&RNHERWWOHDVLWZLOOKDYHEXEEOHVRIDLU:KHQWKHEXEEOHVDUHJRQHLWLV2.WR
XVHKRZHYHU

 5HSHDWWKHSURFHVVIRUWKHRWKHUZKHHO

3DUNLQJ%UDNH

7KHSDUNLQJEUDNHYDOYHXVHGRQODWHU$LU7UDFWRUVLVD6FRWWSQ$7ZRRIWKHVHYDOYHVDUH
PRXQWHGWRJHWKHUZLWKDFRPPRQOHYHUWRSXOOWKHYDOYHWRWKH21SRVLWLRQ25LQJVZLWKLQWKHYDOYHV
PD\EHUHSODFHGZKHQQHHGHG$QH[SORGHGYLHZRIWKHSDUNLQJEUDNHYDOYHLVVKRZQLQ)LJXUH
/HDNLQJRIEUDNHIOXLGIURPWKHWRSRIWKHYDOYHERG\LQGLFDWHVIDLOXUHRIWKH2ULQJWKDWVHDOVWKHYDOYH
VWHP  2ULQJ UHSODFHPHQW PD\ EH SHUIRUPHG E\ UHPRYLQJ WKH GHIHFWLYH YDOYH ERG\ RQO\  25LQJ
UHSODFHPHQWPD\EHGRQHXVLQJWKHIROORZLQJVWHSV

3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


 &ODPSWKHIOXLGVXSSO\OLQHIURPWKHEUDNHUHVHUYRLUWRWKHPDVWHUF\OLQGHU

 5HPRYHWKHORQJ$1EROWVDQGQXWVWKDWFODPSWKHYDOYHERGLHVWRJHWKHU

 3XOOERWKYDOYHERGLHVIUHHRIWKHLUVXSSRUWEUDFNHW

 5HPRYHWKH$1EROWDQGVSDFHUVIURPWKHDFWXDWLQJOHYHUV7KHEROWLVWKUHDGHGLQWR
WKHUHGNQRE

 6HSDUDWHWKHYDOYHERGLHV

 5HPRYHWKHEUDNHOLQHVIURPWKHSRUWVLQWKHQHDUVLGHDQGORZHUHQGRIWKHYDOYHERG\

 &OLSWKHHQGRIWKHLQFK'LD[LQFKORQJVWHHOULYHWWKDWVHFXUHVWKHDFWXDWLQJ
DUPWRVSDFHWKHYDOYHVWHP

 5HPRYHWKHULYHWDQGZDVKHUVIUHHLQJWKHDUPIURPWKHYDOYHVWHP

 :KLOHKROGLQJWKHYDOYHERG\JHQWOHLQDVPRRWKMDZYLVHUHPRYHWKHHOERZILWWLQJDQG
ODUJHILWWLQJ YDOYHVHDW DWWKHORZHUHQGRIWKHYDOYHERG\

 5HPRYHWKHLQFK2'[LQFK,'25LQJIURPWKHYDOYHVHDW

 5HPRYHWKHVSDFHUIURPWKHWRSRIWKHYDOYHVWHPDQGSXVKWKHYDOYHVWHPRXWRIWKH
YDOYHERG\WKURXJKWKHKROHQRUPDOO\ILOOHGE\WKHYDOYHVHDW

 8VLQJDQ2ULQJSLFNUHPRYHWKHLQFK2'[LQFK,'2ULQJIURPWKHORZHUHQG
RIWKHERUHWKDWJXLGHVWKHYDOYHVWHP

%ORZWKHERUHFOHDQZLWKFRPSUHVVHGDLUWKHQFRDWWKHERUHZLWK0,/+$IOXLG'RQRWXVHDQ\
RWKHUVROYHQWVWRFOHDQWKHERUH

&RDWWKHUHSODFHPHQW2ULQJZLWK0,/+$IOXLGDQGVOLGHLQWRSRVLWLRQLQWKHDQQXODUJURRYHLQ
WKHYDOYHVWHPKRXVLQJ$OOSDUWVWREHUHDVVHPEOHGVKRXOGEHFRDWHGZLWK0,/+

$IOXLGEHIRUHDVVHPEO\7KHUHPDLQGHURIWKHUHSODFHPHQWFDQEHGRQHE\ZRUNLQJEDFNZDUGV
IURP6WHSRIWKHUHPRYDOSURFHGXUH7KHULYHWWKDWZDVGHVWUR\HGLQ6WHSDERYHFDQEHUHSODFHG
ZLWK6FRWWSDUWQXPEHURURWKHUVXLWDEOH[5+VWHHOULYHW

$IWHUWKHSDUNLQJEUDNHYDOYHLVUHWXUQHGWRWKHDLUSODQHDQGKRVHVDUHUHFRQQHFWHGWKHEUDNHVPXVWEH
EOHGDVGHVFULEHGLQ%5$.(%/((',1*LQ6HFWLRQRIWKLVPDQXDO


$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


&2&.3,7&21752/6

'HWDLOVRIWKHFRFNSLWFRQWUROVDUHVKRZQLQ)LJXUH)LJXUH)LJXUHDQG)LJXUH

7KHFRQWUROVWLFNDVVHPEO\LVSQDQGLVDWWDFKHGWRWKHWRUTXHWXEHDVVHPEO\ZLWKD
1$6 EROW  7KH ORZHU HQG RI WKH FRQWURO VWLFN LV D PDFKLQHG DOXPLQXP SDUW SQ  
ZKLFKKRXVHVWZR)DIQLU.3EHDULQJVKHOGLQSODFHE\WZRSQVQDSULQJV7KHFRQWUROVWLFN
ZHOGDVVHPEO\LVSQDQGLVFKURPHSODWHGDQGRLOHGLQWHUQDOO\7KHFRQWUROVWLFNJULSLVDQ
$XWRPDWLF)ODJPDQSQ1$

$SQHOHYDWRUSXVKURGFRQQHFWVWKHFRQWUROVWLFNWRWKHIRUZDUGLGOHUDVVHPEO\ZLWKD$1
$EROWLQHDFKHQG7KHSXVKURGKDV)DIQLU5(+EHDULQJVLQHDFKHQGWKDWDUHDWWDFKHGZLWK
UROOSLQV,IQHZEHDULQJVDUHRUGHUHGEHVXUHWRVSHFLI\WKDWWKH\DUHWREHGULOOHGIRU
LQVWDOODWLRQ

7KHFRQWUROVWLFNWRUTXHWXEHLVVXSSRUWHGRQHDFKHQGZLWKDSQKRXVLQJDVVHPEO\
ZKLFKDWWDFKHVWRWKHIXVHODJHIUDPHZLWK$1$EROWV(DFKKRXVLQJDVVHPEO\KDVDJUHDVHILWWLQJ
LQVWDOOHGDQGWKHJUHDVHVKRXOGEHDSSOLHGDWOHDVWGXULQJDQQXDOLQVSHFWLRQV7KHEURQ]HEHDULQJVLQ
WKHKRXVLQJVDUH%XQWLQJ()ZKLFKPD\EHUHSODFHGLIUHTXLUHG7KLVEXVKLQJLVIODQJHGDQG
DIWHUDSHULRGRIWLPHZLOOZHDUFDXVLQJIRUHDQGDIWVODFNLQWKHWRUTXHWXEHDVWKHHOHYDWRUVDUH
PRYHGXSDQGGRZQZLWKWKHFRQWUROVWLFN7KHVODFNPD\EHUHPRYHGE\DGGLQJDWKLFNVKLP
SQ$ ZKLFKLV,'[2':LWKWKHWRUTXHWXEHDOOWKHZD\DJDLQVWWKHUHDU
IODQJHFOHDUDQFHRQWKHIURQWIODQJHVKRXOGEHEHWZHHQDQG,IWKHVKLPLVDOLWWOHWRRWKLFN
WKHIDFHRIWKHIRUZDUGIODQJHFDQEHIDFHGRIIVOLJKWO\LIGHVLUHG7KHIRUZDUGHQGRIWKHWRUTXHWXEH
KDVDSQERRWDQGDERRWULQJLQVWDOOHGZLWKVFUHZVDWWDFKLQJWKHERRW
ULQJWR WKH IORRU2QWKHDIWFRFNSLWZDOODSQERRW DQGULQJVHDO WKHIRUZDUG
HOHYDWRUSXVKURGHQWUDQFH7KHKRSSHUKDQGOHKDVDSQERRWZLWKDSQERRWULQJ
DQGWKHVSUD\OHYHUSXVKURGKDVDSQERRWZLWKSQERRWULQJ7KHWULPSXVKURG
KDVDSQERRWDQGDSQERRWULQJ

$ SQ  FRQWURO ORFN DVVHPEO\ LV DWWDFKHG WR WZR $1%$ H\HEROWV WKDW DUH SDUW RI WKH
LQVWUXPHQWSDQHODWWDFKPHQW$Q$MD[1RVSULQJNHHSVWKHFRQWUROORFNSXOOHGXSRXWRIWKHZD\

(/(&75,&$/6<67(0

*HQHUDO

(DFKRIWKHVHSDUDWHHOHFWULFDOFLUFXLWVGLVFXVVHGLQWKLVVHFWLRQLVDFFRPSDQLHGE\LWVSDUWLFXODUZLULQJ
VFKHPDWLF GUDZLQJ VKRZQ DV D ILJXUH LQ 6HFWLRQ   7KH DVVRFLDWHG $LU 7UDFWRU SDUW QXPEHU RI D
FRPSRQHQWLVWKHGUDZLQJQXPEHUSOXVRUIRUOHIWKDQGDQGULJKWKDQGSDUWVUHVSHFWLYHO\,QWKH
HYHQWWKDWWKHSDUWLVV\PPHWULFDOZLWKRXWDKDQGGHVLJQDWLRQWKHVXIIL[QXPEHULV

$OOWURXEOHVKRRWLQJRIHOHFWULFDOV\VWHPVLVGLUHFWHGWRZDUGWKHLGHQWLILFDWLRQRIIDXOW\FRPSRQHQWV
7KHPRVWYDOXDEOHWRROIRUXVHLQWURXEOHVKRRWLQJLVWKH9ROW2KPPHWHU
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


7KH 9ROWPHWHU LV XVHG ZLWK HOHFWULFDO SRZHU 21 IRU WKH FLUFXLW XQGHU H[DPLQDWLRQ  ,W LV XVHG WR
GHWHUPLQHWKDWWKHSURSHUYROWDJHLVDYDLODEOHDWWKHDSSOLDQFHRUDWDQ\ORFDWLRQLQWKHFLUFXLWEHWZHHQ
WKHDLUSODQHEXVDQGWKHDSSOLDQFH$VRFNHWHG9ROWEXOEPD\EHVXEVWLWXWHGIRUWKH9ROWPHWHUZLWK
RQHZLUHOHDGFRQQHFWHGWRDZLUHRUWHUPLQDOZKLOHWKHRWKHUZLUHOHDGLVFRQQHFWHGWRJURXQG

7KH 2KPPHWHU PXVW EH XVHG ZLWK HOHFWULFDO SRZHU 2)) IRU WKH FLUFXLW XQGHU H[DPLQDWLRQ  ,W LV
SULPDULO\XVHIXOIRUHVWDEOLVKLQJWKHFRQWLQXLW\RIZLULQJRUJURXQGFRQWDFWV+HUHWKHUHVLVWDQFHRI
WKH ZLULQJ DQG JURXQG FLUFXLWV VKRXOG UHDG QHDU =(52 2KPV  7KH 2KPPHWHU LV RI OLWWOH YDOXH LQ
HYDOXDWLQJ DSSOLDQFHV VXFK DV PRWRUV ODPSV HWF VLQFH WKH GHVLUDEOH UHVLVWDQFH RI WKH DSSOLDQFH LV
XQNQRZQ7KHH[FHSWLRQLVZKHQWKHUHVLVWDQFHLVYHU\KLJK LQILQLWH LQGLFDWLQJDQRSHQFLUFXLWDQGD
IDLOHGFRPSRQHQW

7KH VLPSOHVW PHDQV RI DVFHUWDLQLQJ D IDXOW\ FRPSRQHQW LV VXEVWLWXWLRQ ZLWK D NQRZQ IXQFWLRQLQJ
FRPSRQHQW7KLVLVSUDFWLFDOLIWKHVXEVWLWXWHGSDUWLVDVZLWFKRUOLJKWEXOERUHDVLO\DYDLODEOHSDUW

6WDUWHU*HQHUDWRU

7KH ZLULQJ VFKHPDWLF IRU WKH 6WDUWHU*HQHUDWRU LV VKRZQ LQ )LJXUH   :KHQ WKH VWDUWHU VZLWFK LV
HQJDJHG D VPDOO FXUUHQW LV VHQW WR WKH FRLO RI WKH VWDUWHU UHOD\  7KLV UHOD\ FRPSOHWHV WKH FLUFXLW WR
SURYLGHVWDUWLQJFXUUHQWWRWKHVWDUWHU

7KH6WDUWHU*HQHUDWRUZKLOHDFWLQJDVDJHQHUDWRULVFDSDEOHRISURGXFLQJDPSVFRQWLQXRXVO\

9ROWDJH5HJXODWRU

7KH ZLULQJ VFKHPDWLF IRU WKH 9ROWDJH 5HJXODWRU LV VKRZQ LQ )LJXUH   7KLV VROLGVWDWH 9ROWDJH
5HJXODWRUFRQWUROVWKHJHQHUDWRURXWSXWDWWRYROWV7KHYROWDJHUHJXODWRULV DFWLYDWHGE\
FORVXUHRIWKHJHQHUDWRUVZLWFK:KHQWKHJHQHUDWRURXWSXWKDVULVHQWRQHDUYROWVDVLJQDOIURPWKH
9ROWDJH5HJXODWRUDFWLYDWHVWKHOLQHFRQWDFWUHOD\SODFLQJWKHJHQHUDWRURQOLQH7KHOLQHFRQWDFWUHOD\
SHUIRUPVWKHVDPHIXQFWLRQDVWKHROGHUUHYHUVHFXUUHQWUHOD\LQWDNLQJWKHJHQHUDWRURIIOLQHZKHQWKH
JHQHUDWRURXWSXWYROWDJHIDOOVEHORZUHVLGXDOEDWWHU\YROWDJH

7KH9ROWDJH5HJXODWRUXVHVORJLFEDVHGRQWKHVWDWXVRIWKHV\VWHPWRFRQWUROWKHUHJXODWRURXWSXW7KLV
ORJLFXVHVVDPSOHVRIYROWDJHVLQWKHV\VWHPWRGHWHUPLQHWKHFXUUHQWV\VWHPFRQGLWLRQ7KHVHLQFOXGH
YROWDJHVRQERWKVLGHVRIWKHOLQHFRQWDFWRUUHOD\WRGHWHUPLQHLIWKHUHOD\LVRSHQRUFORVHG$OVR
YROWDJHVDWWKHVWDUWHUVZLWFKDUHPRQLWRUHGWRGHWHUPLQHWKHSRVLWLRQRIWKHVWDUWHUVZLWFK

7KHYROWDJHRXWSXWRIWKH9ROWDJH5HJXODWRULVSUHVHWWRWRYROWV7KHYROWDJHRXWSXWPD\
EHVHWWREHWZHHQWRYROWVE\DGMXVWLQJWKHYROWDJHDGMXVWPHQWVFUHZDWWKHHQGRIWKHFDVH7KH
FRYHUVFUHZPXVWEHUHPRYHGWRDOORZDFFHVVWRWKHYROWDJHDGMXVWPHQWVFUHZLQVLGH
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


(QJLQH,QVWUXPHQWV

7KH 13 ,QGLFDWRU 1* ,QGLFDWRU DQG WKH ,77 ,QGLFDWRU DUH LQGHSHQGHQW RI WKH DLUSODQH¶V HOHFWULFDO
V\VWHP7KH\DUHSRZHUHGE\WKHLUUHVSHFWLYHWDFKJHQHUDWRUVRUWKHUPRFRXSOH

7KH)XHO)LOWHU3UHVVXUH/LJKW/RZ2LO3UHVVXUH/LJKW2LO7HPSHUDWXUH,QGLFDWRU$LU)LOWHU3UHVVXUH
/LJKW&KLS/LJKWDQG+RXU0HWHUDUHDOOSRZHUHGE\WKHDLUSODQH¶VHOHFWULFDOV\VWHP

7KHZLULQJVFKHPDWLFVIRUWKHHQJLQHLQVWUXPHQWVDUHVKRZQLQ)LJXUH

9ROWPHWHU

7KHZLULQJVFKHPDWLFIRUWKH9ROWPHWHULVVKRZQLQ)LJXUH7KH9ROWPHWHUVKRZVWKHYROWDJHRQ
WKHDLUSODQH¶VHOHFWULFDOEXV9ROWPHWHUUHDGLQJVPD\EHXVHGWRGHWHUPLQHWKHFRQGLWLRQRIWKHEDWWHU\
DQG6WDUWHU*HQHUDWRU

:KHQWKH0DVWHU6ZLWFKLV21ZLWKWKH6WDUWHU*HQHUDWRUQRWFKDUJLQJZLWKQRORDGRQWKHV\VWHP
WKHIXOO\FKDUJHGEDWWHU\YROWDJHVKRXOGEHEHWZHHQDQGYROWV:KHQWKH6WDUWHU*HQHUDWRULV
FKDUJLQJWKHYROWDJHRQWKHDLUSODQHEXVVKRXOGEHDSSUR[LPDWHO\YROWV

/RZ9ROWDJH:DUQLQJ/LJKW

7KHZLULQJVFKHPDWLFIRUWKH/RZ9ROWDJH:DUQLQJ/LJKWLVVKRZQLQ)LJXUH7KLVZDUQLQJOLJKW
RSHUDWHVSDUDOOHOZLWKWKH9ROWPHWHUWRSURYLGHDQLQGLFDWLRQRI6WDUWHU*HQHUDWRUIDLOXUH7KHZDUQLQJ
OLJKWVHQVHVWKHYROWDJHRQWKHDLUSODQHEXV7KHOLJKWFRPHV21DWDQ\WLPHWKDWWKHPDVWHUVZLWFKLV
21DQGWKHYROWDJHRQWKHDLUSODQHEXVGURSVEHORZYROWV%HFDXVHWKHQRUPDOEDWWHU\YROWDJHLV
YROWVLWIROORZVWKDWWKHOLJKWZLOOEH21DWDQ\WLPHWKDWWKHJHQHUDWRULVQRWSURGXFLQJPRUHWKDQ
YROWVRQWKHEXV

7KH/RZ9ROWDJH:DUQLQJ/LJKWLVDVHOIFRQWDLQHGXQLWWKDWXVHVVROLGVWDWHFLUFXLWU\DQGDOLJKWEXOE
7KHOLJKWEXOELVQRWUHSODFHDEOH)DLOXUHRIWKHZDUQLQJOLJKWUHTXLUHVUHSODFHPHQWRIWKHHQWLUHXQLW

(QJLQH2YHUVSHHG6ROHQRLG

7KHZLULQJVFKHPDWLFIRUWKH(QJLQH2YHUVSHHG6ROHQRLGLVVKRZQLQ)LJXUH7KHIXQFWLRQRI
WKLVVROHQRLGLVWRVZLWFKWKHK\GUDXOLFSURSHOOHUFRQWUROFLUFXLWIURPYDULDEOH530WRIL[HG530LQ
WKHHYHQWRIJRYHUQRUIDLOXUH:KHQDFWLYDWHGWKLVFLUFXLWPDLQWDLQVSURSHOOHU530WRWR530
EHORZWKHHQJLQH¶VPD[LPXPRI530

%RRVW3XPS

7KHZLULQJVFKHPDWLFIRUWKHERRVWSXPSLVVKRZQLQ)LJXUH
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


)XHO*DXJLQJ

7KH ZLULQJ VFKHPDWLF IRU WKH IXHO JDXJLQJ V\VWHP LV VKRZQ LQ )LJXUH   'XDO JDXJHV FRQVWDQWO\
PRQLWRUIXHOTXDQWLW\LQHDFKWDQN

(DFK RI WKH IXHO WDQNV KDV WZR IXHOTXDQWLW\ VHQGLQJ HOHPHQWV  7KHVH WZR VHQGLQJ HOHPHQWV DUH
FRQQHFWHGLQVHULHVHOHFWULFDOO\7KHLQERDUGVHQGLQJHOHPHQWLVDFWLYHLQVHQVLQJIXHOOHYHOZKHQWKH
IXHOOHYHOLVLQWKHORZHUWKLUGRIWKHWDQN

7KHRXWERDUGVHQGLQJHOHPHQWLVDFWLYHZKHQWKHIXHOOHYHOLVLQWKHXSSHUWKLUGRIWKHWDQN%RWKWKH
HOHPHQWVDUHDFWLYHZKHQWKHIXHOOHYHOLVLQWKHPLGUDQJH

7KHSDQHOPRXQWHGIXHOJDXJHLVDPLFURDPPHWHUZLWKDIXOOVFDOHUDQJHRIPLFURDPSV$FLUFXLW
ERDUGNQRZQDVWKHUHFHLYHULVDWWDFKHGWRWKHELQGLQJSRVWVRIWKHLQVWUXPHQW&LUFXLWU\RQWKLVERDUG
SURYLGHV D YROW SRZHU VXSSO\ IRU WKH IXHOJDXJLQJ V\VWHP  7KLV ERDUG DOVR KDV D WULPPHU
SRWHQWLRPHWHU7KLVWULPPHULVXVHGWRFDOLEUDWHWKHIXOOVFDOHUHDGLQJVRQWKHPLFURDPPHWHU

7KHLQERDUGVHQGHULVLQVXODWHGIURPJURXQGE\WKHWHQLQVXODWLQJEXVKLQJVWKDWDUHXVHGRQERWKVLGHV
RIWKHILYHKROHVLQLWVIODQJH7KHRXWERDUGVHQGHULVJURXQGHGWKURXJKLWVPRXQWLQJEROWV

:LQJ)ODSV

7KHZLULQJVFKHPDWLFIRUWKHZLQJIODSVLVVKRZQLQ)LJXUH3RZHUWRGULYHWKHIODSVXSDQGGRZQ
LVSURYLGHGE\WZRUHOD\VZLWKRQHUHOD\IRUHDFKGLUHFWLRQRIWUDYHO(DFKRIWKH83RU'2:1UHOD\V
LVDFWXDWHGE\SODFLQJWKHFRFNSLWIODSVZLWFKLQWKHDSSURSULDWHORFDWLRQ7KHZLULQJIURPWKHIODS
VZLWFKWRWKHUHOD\VLVURXWHGWKURXJKWKHPLFURVZLWFKHVWKDWVHUYHDVOLPLWVZLWFKHVIRUWKHIXOO83
DQGIXOO'2:1SRVLWLRQV

6WDOO:DUQLQJ+RUQ

7KHZLULQJVFKHPDWLFIRUWKHVWDOOZDUQLQJKRUQLVVKRZQLQ)LJXUH7KHKRUQLVFRQQHFWHGLQVHULHV
ZLWKWKHOLIWGHWHFWRUVZLWFKWKDWLVORFDWHGQHDUWKHOHDGLQJHGJHDWPLGVSDQRIWKHOHIWKDQGZLQJ
7KHOLIWGHWHFWRUVZLWFKLVFRQWUROOHGE\DWDEWKDWSURMHFWVIRUZDUGLQWRWKHSUHYDLOLQJDLUVWUHDP:KHQ
DW UHVW WKH ZHLJKW RI WKH WDE KROGV LW GRZQ RSHQLQJ WKH VZLWFK  :KHQ WKH DLUIORZ DURXQG WKH OLIW
GHWHFWRUVKLIWVWRDIRUZDUGGLUHFWLRQWKHWDELVOLIWHGFORVLQJWKHVZLWFKDQGFDXVLQJWKHKRUQWRVRXQG

:LQGVKLHOG:DVKHU

7KHZLULQJVFKHPDWLFIRUWKHZLQGVKLHOGZDVKHULVVKRZQLQ)LJXUH:KHQWKHVZLWFKLVFORVHGWKH
SXPS¶VPRWRUVWDUWVDQGWKHVROHQRLGYDOYHLVRSHQ7KHIORZRIZLQGVKLHOGZDVKLQJIOXLGZLOOFRQWLQXH
XQWLOWKHVZLWFKLVUHOHDVHG7KHSXUSRVHRIWKHVROHQRLGLVWRSURYLGHDVKDUSFXWRIIRIIOXLGZKHQWKH
VZLWFKLVUHOHDVHG7KLVSUHYHQWVWKHGULEEOLQJRIIOXLGRQWRWKHZLQGVKLHOG
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


:LQGVKLHOG:LSHU

7KHZLULQJVFKHPDWLFIRUWKHZLQGVKLHOGZLSHULVVKRZQLQ)LJXUH7KHZLSHUVZLWFKKDVWKUHH
SRVLWLRQV+,*+/2:DQG3$5.:KHQWKHVZLWFKLVLQWKH3$5.SRVLWLRQWKHZLSHUEODGHVDUH
SDUNHGDQGWKHSRZHUWRWKHZLSHUPRWRULVRII

&RFNSLW/LJKWLQJ

7KHZLULQJVFKHPDWLFIRUWKHFRFNSLWOLJKWVLVVKRZQLQ)LJXUH7KHLQWHQVLW\OHYHORIWKHFRFNSLW
OLJKWVH[FHSWIRUWKHGRPHDQGPDSOLJKWVLVFRQWUROOHGE\WKHVROLGVWDWHGLPPLQJFLUFXLW:KHQ
WKH SDQHO OLJKW VZLWFK LV WXUQHG 21 SRZHU LV DYDLODEOH WR WKH GLPPLQJ FLUFXLW  7KH SDQHOOLJKW
LQWHQVLW\LVFRQWUROOHGE\WKHSDQHOOLJKWUKHRVWDWRQWKHLQVWUXPHQWSDQHO

)ODS/LJKW

7KHZLULQJVFKHPDWLFIRUWKHIODSOLJKWLVVKRZQLQ)LJXUH7KHIODSOLJKWLVORFDWHGLQDKRXVLQJRQ
WKHXSSHUVLGHRIWKHOHIWKDQGZLQJMXVWIRUZDUGRIWKHZLQJIODSQHDUWKHFHQWHURIWKHVSDQRIWKH
IODS7KHOLJKWLOOXPLQDWHVPDUNVRQWKHOHDGLQJHGJHRIWKHIODSSURYLGLQJDQLQGLFDWLRQRIWKHDPRXQW
RIGHIOHFWLRQRIWKHIODS7KHIODSOLJKWLVFRQWUROOHGE\WKHLQVWUXPHQWOLJKWVZLWFKEXWLWLVQRWGLPPHG
E\WKHSDQHOOLJKWGLPPLQJFLUFXLWU\

3RVLWLRQDQG6WUREH/LJKWLQJ

7KHZLULQJVFKHPDWLFIRUWKHSRVLWLRQOLJKWVDQGWKHVWUREHOLJKWVLVVKRZQLQ)LJXUH7KHVHOLJKWV
DUHFRQWUROOHGE\WKHQDYLJDWLRQOLJKWVZLWFKRQWKHORZHULQVWUXPHQWSDQHO:KHQWKHVZLWFKLVSODFHG
LQWKH'2:1SRVLWLRQSRZHULVVHQWWRWKHUHGOLJKWRQWKHOHIWKDQGZLQJWLSWKHJUHHQOLJKWRQWKH
ULJKWKDQGZLQJWLSDQGWKHZKLWHOLJKWRQWKHUXGGHU:KHQWKHVZLWFKLVSODFHGLQWKH83SRVLWLRQ
SRZHULVVHQWWRWKHWKUHHSRVLWLRQOLJKWVSOXVWKHVWUREHOLJKWVORFDWHGRQHDFKZLQJWLS

7D[L/LJKWV

7KHZLULQJVFKHPDWLFIRUWKHWD[LOLJKWVLVVKRZQLQ)LJXUH7KHWD[LOLJKWVDOVRFDOOHG1RVH/LJKWV
DUHWKHWZRZDWWEXOEVORFDWHGLQWKHH[WUHPHQRVHRIWKHDLUSODQHMXVWEHORZWKHSURSHOOHUKXE

7KHWD[LOLJKWVZLWFKLVORFDWHGRQWKHORZHULQVWUXPHQWSDQHO7KLVVZLWFKUHFHLYHVLWVHOHFWULFDOSRZHU
IURPHLWKHUWKHDLUSODQHEXVRUIURPWKHZRUNOLJKWUHOD\,WPD\EHVZLWFKHGWRSURYLGHSRZHUWRWKH
FRLORIWKHWD[LOLJKWUHOD\7KLVUHOD\LQWXUQVXSSOLHVFXUUHQWWRERWKRIWKHWD[LOLJKWV

1LJKW:RUNLQJ/LJKWV

7KHZLULQJVFKHPDWLFIRUWKHQLJKWZRUNLQJOLJKWVLVVKRZQLQ)LJXUH7KHQLJKWZRUNLQJOLJKWV
FRPELQH WKH IXQFWLRQV RI WKH ZDWW ODQGLQJ OLJKWV DQG WKH ZDWW WXUQ OLJKWV IRU RSWLPXP
YLVLELOLW\ZKLOHRSHUDWLQJDWQLJKW

 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


7KHH[WHQVLRQRIWKHODQGLQJOLJKWVLVLQGLYLGXDOO\FRQWUROOHGE\WKHH[WHQGDQGUHWUDFWVZLWFKHVORFDWHG
RQWKHORZHUVZLWFKSDQHO7KHVHVZLWFKHVDOORZWKHODQGLQJOLJKWVWREHVWRSSHGDWDQ\SRLQWLQWKHLU
H[WHQVLRQRUUHWUDFWLRQWRSURYLGHWKHEHVWSODFHPHQWRIOLJKWLQJWRVXLWWKHSLORW7KHODQGLQJOLJKWV
FDQEHWXUQHG21RU2))E\XVHRIWKH0$,1VZLWFKWRWKHULJKWRIWKHH[WHQGDQGUHWUDFWVZLWFKHVRQ
WKHORZHUSDQHO

7KHWXUQOLJKWVZLWFKLVDSXVKRQSXVKRIIEXWWRQVZLWFKORFDWHGDWWKHXSSHUOHIWRIWKHFRQWUROVWLFN
:KHQWKHODQGLQJOLJKWPDLQVZLWFKLV21DQGWKHWXUQOLJKWVZLWFKLVWXUQHGRQWKHWXUQOLJKWVHOHFWRU
VZLWFKDWRSWKHFRQWUROVWLFNLVHQDEOHG7KLVVZLWFKKDV/()75,*+7DQGFHQWHU2))SRVLWLRQV
:KHQ WKH WXUQOLJKW VHOHFWRU VZLWFK LV PRYHG RXW RI LWV FHQWHU SRVLWLRQ OHIW RU ULJKW WKH ZLQJWLS
PRXQWHGWXUQOLJKWLVWXUQHG21IRUWKHVHOHFWHGVLGHZKLOHWKHODQGLQJOLJKWVDUHVLPXOWDQHRXVO\WXUQHG
2))5HWXUQRIWKHWXUQOLJKWVZLWFKWRLWVFHQWHUSRVLWLRQUHVWRUHVWKHODQGLQJOLJKWWR21DQGWKH
VHOHFWHGWXUQOLJKWWR2))

$OO RI WKH ODPS ILODPHQW FLUFXLWV DUH VZLWFKHG E\ UHOD\V  6LQFH WKH PDLQ ODQGLQJ OLJKWV DUH QRW
LQGLYLGXDOO\VHOHFWHG21DVLQJOHUHOD\VZLWFKHVERWKODPSVVLPXOWDQHRXVO\7KLVUHOD\LVDFWLYDWHG
21ZKHQWKH0$,1VZLWFKLV21DQGERWKRIWKHGRXEOHSROHGRXEOHWKURZWXUQUHOD\VDUHLQWKHLU
QRUPDOO\FORVHGSRVLWLRQV:KHQWKHZRUNLQJOLJKWVZLWFKLV21DQGWKHWXUQOLJKWVHOHFWRUVZLWFKLV
PRYHGIURPLWVFHQWHUSRVLWLRQWKHFRLORIWKHVHOHFWHGWXUQUHOD\LVHQHUJL]HG7KLVFDXVHVWKHDUPDWXUH
RIWKHUHOD\WRPRYHWXUQLQJWKHOLJKW21DQGVLPXOWDQHRXVO\EUHDNLQJWKHFLUFXLWWRWKHUHOD\FRLOWKDW
SRZHUVWKHPDLQODQGLQJOLJKWV

:KHQWKHZRUNLQJOLJKWVZLWFKLV2))PRYHPHQWRIWKHWXUQOLJKWVHOHFWRUVZLWFKKDVQRHIIHFW

+RSSHU4XDQWLW\*DXJHV

7KH$LU7UDFWRU'LJLWDO'LVSHUVDO0RQLWRULQJ6\VWHPPDQXIDFWXUHGE\$PWHFK0DQXIDFWXULQJ,QF
)RUW :RUWK 7H[DV SURYLGHV WKH SLORW DQG ORDGHU ZLWK D GLJLWDO GLVSOD\ RI KRSSHU TXDQWLW\ DQG
LQVWDQWDQHRXVVSUD\ERRPSUHVVXUH

7KHV\VWHPFRQVLVWVRIDVWDLQOHVVVWHHOSUREHDQGIORDWDVVHPEO\IRUKRSSHUTXDQWLW\PHDVXUHPHQWD
SUHVVXUHWUDQVGXFHUIRUERRPSUHVVXUHPHDVXUHPHQWDQLQVWUXPHQWSDQHOPRXQWHGPDLQGLVSOD\DVLGH
ORDGHUUHPRWHGLVSOD\DQGDZLULQJKDUQHVV

7KHKHUPHWLFDOO\VHDOHGVWDLQOHVVVWHHOSUREHRXWSXWVDSDUWLFXODUYROWDJHEDVHGRQWKHIORDWSRVLWLRQ
DORQJWKHSUREHXVLQJDV\VWHPRIUHHGVZLWFKHVWKDWDUHDFWXDWHGE\DPDJQHWLQWKHIORDW7KHSUHVVXUH
WUDQVGXFHUVHQVHVWKHSUHVVXUHLQWKHVSUD\ERRPV7KHPDLQGLVSOD\ RUKHDGXQLW LVLQVWDOOHGLQWKH
LQVWUXPHQWSDQHOLQIXOOYLHZRIWKHSLORW7KHKHDGXQLWFRQWDLQVWKHDFWXDOGLJLWDOKRSSHUTXDQWLW\DQG
ERRPSUHVVXUHLQIRUPDWLRQRQDQ/&'VFUHHQDORQJZLWKWKHVRIWZDUHDQGWKHSURFHVVRUUHTXLUHGWR
UXQWKHV\VWHP7KHUHPRWHGLVSOD\LVORFDWHGRQWKHOHIWside of the aircraft, just above the loader valve
and displays hopper quantity information only. Both displays are backlit for night viewing.
 $LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


Care and Maintenance:

Your Digital Dispersal Monitoring System comes pre-calibrated from the factory and should never
require adjustment. Periodic cleaning and preventative maintenance will ensure that your system
remains in good working order. Below is a list of recommended inspection items and intervals.

Item Action Frequency

Unplug, clean contacts with electrical contact
cleaner, and reassemble with Dow Corning 4
Electrical Insulating Compound to prevent water
Connectors 100 Hr
entry into plug. Ensure connectors are locked
tightly together upon re-assembly.

Check all wiring for routing, security, chaffing, or

Wiring pulling. Annual

Ensured hopper float slides easily along the entire

Float length of the stainless steel probe. Annual

Boom pressure line Inspect for leaks. Annual



2LO&RROHU%ORZHU ,I,QVWDOOHG 

7KHZLULQJVFKHPDWLFIRUWKHRLOFRROHUEORZHULVVKRZQLQ)LJXUHZLWKFRQWLQXDWLRQRQ)LJXUH
7KH2LO&RROHU%ORZHULVSRZHUHGWKURXJKWKHUHOD\SQ7KHUHOD\LVWXUQHGRQLQGHSHQGHQWO\
E\WKHEHWDVZLWFKRUWKHSURSHOOHUJRYHUQRUVZLWFK/DWHU$7VKDYHSQHMHFWRULQVWDOODWLRQ
DQGGRQRWUHTXLUHDEORZHU

$LU&RQGLWLRQHU

7KHZLULQJVFKHPDWLFIRUWKHHQJLQHSRZHUHGDLUFRQGLWLRQHULVVKRZQLQ)LJXUH

7KH$LU7UDFWRUHQJLQHSRZHUHGDLUFRQGLWLRQHUXVHVD6DQGHQFRPSUHVVRUZLWK DLQFKSRO\
VKHDYHGSXOOH\DQGHOHFWURPDJQHWLFFOXWFK$VSOLQHGVKDIWLQWKHFRPSUHVVRUPRXQWFDVWLQJHQJDJHV
DGULYHJHDULQWKHDFFHVVRU\FDVHRIWKHHQJLQH7KHSXOOH\VKDIWKDVDVPDOOSRO\EHOWVKHDYHRQLWV
GULYHHQG7KLVSXOOH\GULYHVWKHFRPSUHVVRU¶VIO\ZKHHOE\WKHXVHRID*RRG\HDUSQEHOW
7KHVSOLQHGVKDIWVPDOOSXOOH\EHOWDQGFRPSUHVVRUIO\ZKHHODUHHQJDJHGDQGPRYLQJDQ\WLPHWKDW
WKHFRPSUHVVRUVHFWLRQRIWKHHQJLQHLVWXUQLQJ

7KHFOXWFKLVHQJDJHGDQ\WLPHWKDWWKHDLUFRQGLWLRQLQJVZLWFKLVRQDQGWKHV\VWHPSUHVVXUHLVZLWKLQ
RSHUDWLQJOLPLWV+LJKSUHVVXUHFDXVHVWKHRYHUSUHVVXUHFRQWDFWVLQWKHWULQDU\VZLWFKWRRSHQ7KLV
RSHQLQJ EUHDNV WKH FLUFXLW WR WKH FOXWFK DQG LW LV GHHQHUJL]HG  7KH WULQDU\ VZLWFK DOVR KDV D ORZ
SUHVVXUHFLUFXLWWKDWEUHDNVWKHFLUFXLWWRWKHFOXWFKLQWKHHYHQWWKDWVXIILFLHQWUHIULJHUDQWLVORVWIURP
WKHV\VWHPWRFDXVHGDPDJHWRWKHFRPSUHVVRU
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


7KHFRQGHQVHULVDFRSSHUFRUHVLQJOHSDVVLQFKE\LQFKFRLO5HIULJHUDQWHQWHUVWKHWRSRIWKH
FRLODQGH[LWVDWLWVORZHUVLGH$LUIRUFRROLQJWKHFRQGHQVHULVGUDZQLQWKURXJKORXYHUVLQWKHOHIW
VLGHRIWKHDIWIXVHODJH7KLVFRROLQJDLUPRYHVDFURVVWRWKHGXDOSXVKHUW\SHIDQVWKDWGULYHLWWKURXJK
WKHFRQGHQVHUFRLODQGRXWWKURXJKWKHORXYHUVLQWKHULJKWKDQGVLGHRIWKHDIWIXVHODJH

7KHUHFHLYHUGU\HULVVXLWDEOHIRUXVHZLWKHLWKHUUHIULJHUDQW5RU5$+RZHYHUWKHUHFHLYHU
GU\HUPXVWEHUHSODFHGLIDFKDQJHLVPDGHIURPRQHUHIULJHUDQWWRWKHRWKHU

7KHH[SDQVLRQYDOYHLVDEORFNW\SHZLWKLQWHUQDOWHPSHUDWXUHDQGSUHVVXUHFRPSHQVDWLRQ

7KHHYDSRUDWRUXVHVDPXOWLSDVVFRLODQGDVTXLUUHOFDJHEORZHU$UDPDLUVHOHFWRURQWKHDIWFDELQ
ZDOODOORZVWKHLQSXWRIRXWVLGHDLUIRUPL[LQJZLWKFDELQDLUZKLOHWKHDLUFRQGLWLRQHULVLQXVH

$OOKRVHVLQWKHV\VWHPDUH7HIORQVKHDWKHGWRPLQLPL]HWUDQVSLUDWLRQOHDNDJHRIWKHUHIULJHUDQW

7KHKRVHVDUHPDWHGWRWKHLUHQGILWWLQJVZLWKEXEEOHFULPSVZDJHV$OORIWKHHQGILWWLQJFRQQHFWLRQV
DUHPDGHZLWK2ULQJDQG7XEHFRQQHFWRUV

7KHVHUYLFHYDOYHVDUHFORVHWRJHWKHULQVLGHWKHILUVWUHPRYDEOHVNLQEHKLQGWKHFRFNSLWRQWKHULJKW
KDQGVLGHRIWKHDLUSODQH

(/(&7521,&67$57,1*$1'&+$5*,1*6<67(07+(25<2)23(5$7,21

7KHVWDUWLQJDQGFKDUJLQJV\VWHPVFKHPDWLFLVVKRZQLQ)LJXUH6WDUWLQJ$FWXDWLQJWKH6WDUW6ZLWFK
HQHUJL]HVWKH6WDUW5HOD\ZKLFKDSSOLHVEDWWHU\YROWDJHWRWHUP&RIWKH6*ZKLFKRSHUDWHVDVDVHULHV
ZRXQG'&PRWRU1RWHWKDWDWWKHVDPHWLPHEDWWHU\YROWDJHLVDSSOLHGWRSLQ1RIWKH*&8ZKLFK
VLJQDOVLWWRUHPRYHILHOGH[FLWDWLRQIURPWKH6*7KHSXUSRVHRIWKLVIHDWXUHLVWRSUHYHQWWKHSRRU
VWDUWSHUIRUPDQFHWKDWZRXOGRWKHUZLVHUHVXOWLIWKH*HQHUDWRU6ZLWFKZHUHOHIWLQWKH21SRVLWLRQ


 1RWH
 ,WLVUHFRPPHQGHGWKDWWKH*HQHUDWRU6ZLWFKEHLQWKH2))SRVLWLRQGXULQJ67$57
 EHFDXVHWKHKLJKLQUXVKFXUUHQWWRWKHEDWWHULHVLPPHGLDWHO\XSRQ6WDUWWHUPLQDWLRQ
 ZLOOUHVXOWLQ KLJKHUWKDQQRUPDO JDVWHPSHUDWXUH ,77  ,W LV EHWWHUWR DOORZWKH
 HQJLQHWRVWDELOL]HDW*URXQG,GOHEHIRUHWXUQLQJWKH*HQHUDWRU6ZLWFK21


*HQHUDWRU0RGH

)ROORZLQJHQJLQHVWDUWLQJDQGSULRUWRWXUQLQJWKH*HQHUDWRU6ZLWFK21 7KHHQJLQHDWJURXQGLGOH 
WKHYROWDJHRXWSXWRIWKH6* 7HUPLQDO% VKRXOGEHWRYROWV7KLVLVDUHVLGXDOYROWDJHWKDW
UHVXOWVIURPUHVLGXDOPDJQHWLVPLQWKH6*HYHQWKRXJKWKHILHOGH[FLWDWLRQIURPWKH*&8LV]HUR
7XUQLQJWKH*HQHUDWRU6ZLWFK21FDXVHVWKLVUHVLGXDOYROWDJHWREHDSSOLHGWRSLQ-ZKLFKWKH*&8
LQWXUQRXWSXWVRQSLQ0$VDUHVXOWWKH6&RXWSXWZLOOEXLOGXSUDSLGO\DQGVWDELOL]HDWWKHYROW
VHWWLQJ RI WKH *&8 H[WHUQDOO\ DGMXVWHG IURP  WR  YROWV   6HQVLQJ IRU 9ROWDJH 5HJXODWLRQ LV
EHWZHHQSLQV%DQG*
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


/LQH&RQWDFW5HOD\ /&5 &RQWURO

7KH*&8PRQLWRUVWKH6*RXWSXWDQGWKH%XV9ROWDJHRQSLQV%DQG$UHVSHFWLYHO\$VWKH 6*
YROWDJHEXLOGV XSWR ZLWKLQ DSSUR[LPDWHO\YROWVRIWKH%XV9ROWDJHWKH*&8ZLOORXWSXW V\VWHP
YROWDJHRQSLQ+UHVXOWLQJLQDFWLYDWLRQRIWKH/&53RZHUIRUWKLVFLUFXLWLVGHULYHGIURPSLQ-VR
WXUQLQJWKH*HQHUDWRU6ZLWFK2))GLVDEOHVWKH/&5DVZHOODVWKH6*

5HYHUVH&XUUHQW3URWHFWLRQ

,IWKH6*YROWDJHGURSVEHORZWKH%XVYROWDJH EDWWHU\ GXHWRQRUPDOFRQGLWLRQVVXFKDVHQJLQHVKXW
GRZQ RU DEQRUPDO FRQGLWLRQV VXFK DV ORVV RI ILHOG H[FLWDWLRQ WKH 6* ZLOO GUDZ UHYHUVH FXUUHQW
GLVFKDUJHWKHEDWWHU\ 7KH*&8VHQVHVWKLVFRQGLWLRQYLDSLQ'ZKLFKLVFRQQHFWHGWRWHUPLQDO'RI
WKH6*7HUPLQDO'RXWSXWLVDSRVLWLYHYROWDJHSURSRUWLRQDOWRUHYHUVHFXUUHQW

2YHU9ROWDJH 29 3URWHFWLRQ

,QWKHHYHQWWKDWV\VWHPIDXOWVRFFXUHLWKHULQWHUQDORUH[WHUQDOWRWKH*&8WKDWUHVXOWVLQRYHUH[FLWDWLRQ
RIWKH6*WKH29FLUFXLWZLOOSUHYHQWWKH%XVYROWDJHIURPJRLQJDERYHDSSUR[LPDWHO\YROWV7KLV
SURWHFWLRQLVDFFRPSOLVKHGE\D&URZEDUFLUFXLWLQWKH*&8ZKLFKLQWHUQDOO\VKRUWVSLQ-WR'7KLV
UHVXOWVLQLPPHGLDWHUHPRYDORIYROWDJHIURPWKH6*ILHOGDQGWKH/&5FRLO$WWKHVDPHWLPHKLJK
FXUUHQWIORZVWKURXJKWKH$JHQHUDWRUILHOGFLUFXLWEUHDNHUFDXVLQJLWWRWULS7KH29&LUFXLWKDVD
WLPHGHOD\WRSUHYHQWQXLVDQFHWULSVGXHWRV\VWHPWUDQVLHQWV

&KDUJLQJ6\VWHP7URXEOHVKRRWLQJ*XLGH

*HQHUDO&RQVLGHUDWLRQV$VDJHQHUDOUXOHLIWKH6WDUWHU*HQHUDWRUIXQFWLRQVQRUPDOO\LQWKH6WDUW
PRGHWKHUHZLOOEHQRWKLQJZURQJZLWKLWWKDWZRXOGSUHYHQWLWIURPIXQFWLRQLQJLQWKH*HQHUDWHPRGH

%HIRUH DWWHPSWLQJ WR FRUUHFW DQ\ SUREOHP ZLWK WKLV V\VWHP ILUVW UHDG DQG XQGHUVWDQG WKH
'(6&5,37,21DQG7+(25<2)23(5$7,21VHFWLRQVDQGDFTXDLQW\RXUVHOIZLWKWKHORFDWLRQDQG
IXQFWLRQRIWKHYDULRXVFRPSRQHQWV/RRNIRUREYLRXVSUREOHPVVXFKDVRYHUKHDWLQJEXUQHGZLUHV
ORRVHFRPSRQHQWVDQGORRVHHOHFWULFDOFRQQHFWLRQV'LVFRQQHFWWKH&DQQRQSOXJDQGLQVSHFWLWDQGDOO
RWKHUHOHFWULFDOFRQQHFWLRQVIRUFRUURVLRQ&RUUHFWDQ\RIWKHVHSUREOHPVEHIRUHSURFHHGLQJ

(TXLSPHQW(TXLSPHQWUHFRPPHQGHGIRUWURXEOHVKRRWLQJWKHFKDUJLQJV\VWHPLVVKRZQEHORZ

  $PXOWLPHWHUFDSDEOHRI9 UHVROXWLRQ LQ WKH 9UDQJH9UHVROXWLRQ LQ WKH9
UDQJHDQGFDSDEOHRIUHDGLQJIURPDIUDFWLRQRIDQ2+0WRVHYHUDO.,/2+06ZLOOEHUHTXLUHG
$QDXWRUDQJLQJGLJLWDOLQVWUXPHQWLVLGHDOEXWDQ\JRRGTXDOLW\XQLWZLOOZRUN)RUSRLQWWR
SRLQWULQJRXWWKHRKPPHWHUIXQFWLRQZLOOEHXVHG

  $%UHDNRXW%R[7KLVLVQRWDEVROXWHO\HVVHQWLDOEXWLWLVYHU\HIIHFWLYHLQORFDOL]LQJPDQ\
SUREOHPV,WFDQEHIDEULFDWHGSHU)LJXUHRULWLVDYDLODEOHIURP3UHFLVLRQ$LUPRWLYHDWD
UHDVRQDEOHSULFH
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


7URXEOHVKRRWLQJ3URFHGXUHV5HFRPPHQGHGVHTXHQFHVIRUWURXEOHVKRRWLQJWKHFKDUJLQJV\VWHPDUH
VKRZQEHORZ

6WDWLF 7HVWV  %HIRUH JRLQJ LQWR VSHFLILF 6\PSWRPV ZKLFK ZLOO UHVXOW LQ RSHUDWLRQDO VTXDZNV LW LV
SURGXFWLYHWRSRLQWRXWDVWDWLFWHVWURXWLQHWKDWLVTXLFNDQGHDV\DQGZLOOUHVXOWLQORFDOL]LQJVRPH
SUREOHPVZLWKRXWVWDUWLQJWKHHQJLQH7KLVSURFHGXUHHQWDLOVUHPRYLQJWKHFRQQHFWRUIURPWKH*&8
DQGFKHFNLQJZLWKWKHRKPPHWHUIURPGHVLJQDWHGVRFNHWVLQWKHDLUFUDIWVLGHRIWKH*&8FRQQHFWRUWR
YDULRXVRWKHUGHVLJQDWHGSRLQWVLQWKHV\VWHP%HDULQPLQGWKDWWKHRKPPHWHUWHVWOHDGVZLOOXVXDOO\
KDYHDVPDOOUHVLVWDQFHVD\WRRKPVVREHIRUHVWDUWLQJVKRUWWKHSUREHVWRJHWKHUDQGJHWWKLV
UHDGLQJ6XEWUDFWWKLVUHDGLQJIURPDOOSRLQWWRSRLQWUHDGLQJV

,QLWLDO6HWXS0DVWHU6ZLWFK2))*HQHUDWRU6ZLWFK21


 )URP 7R 1RUPDO 1RWHV
   9DOXH

 *&8 - 6* %  ,IKLJKFKHFN6WDUW6ZLWFK*HQHUDWRU6ZLWFK$
      &%DQGDOODVVRFLDWHGZLUHVDQGFRQQHFWLRQV

 *&8 / 6* (  ,IKLJKFKHFNZLUHDQGFRQQHFWLRQVIURP/WRJURXQG

 *&8 * 6* (  ,IKLJKFKHFNZLUHDQGFRQQHFWLRQV

 *&8 0 6* $  ,IKLJKFKHFNZLUHDQGFRQQHFWLRQV

 6* $ 6* (  ,IKLJKVXVSHFW6*ILHOGLVRSHQ
 
      ,IORZVXVSHFWWKDW6*ILHOGLVVKRUWHGRU*&80WR
      6*$ZLUHVKRUWHGWRJURXQG

 *&8 ' 6* '  ,IKLJKFKHFNZLUHDQGFRQQHFWLRQV

 *&8 + /&5;  ,IKLJKFKHFNZLUHDQGFRQQHFWLRQV

 /&5 ; 6* (  ,IKLJKVXVSHFW/&5FRLOLVRSHQ

      ,IORZVXVSHFW/&5&RLOLVVKRUWHGRU*&8+WR
      /&5;ZLUHLVVKRUWHGWRJURXQG

 *&8 $ /&5$=  ,IKLJKFKHFNZLUHDQGFRQQHFWLRQV

 *&8 % /&5$  ,IKLJKFKHFNZLUHDQGFRQQHFWLRQV
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


,QWKHIROORZLQJWKHH[SUHVVLRQ³*(1ZLOOQRWFRPHRQOLQH´LVHYLGHQFHGE\DORZ/RZHU,QVWUXPHQW
3DQHO9ROWPHWHUUHDGLQJ 9RUORZHU DQGWKH/9/LJKWVWD\LQJRQ

6\PSWRP  $IWHU HQJLQH VWDUW *(1 ZLOO QRW FRPH RQ OLQH XQOHVV WKH 6WDUW 6ZLWFK LV HQJDJHG
PRPHQWDULO\DIWHUWKH*HQHUDWRU6ZLWFKLVWXUQHGRQ

3UREDEOH&DXVH)LHOG)ODVKIXQFWLRQRI*&8LQRSHUDWLYH

)L[5HSDLURUUHSODFH*&8

1RWHV7KHV\VWHPFDQEHRSHUDWHGDVGHVFULEHGZLWKRXWFUHDWLQJIXUWKHUGHWULPHQWDOHIIHFWVXQWLOD
FRQYHQLHQWWLPHWRKDYHWKH*&8UHSODFHGRUUHSDLUHG

6\PSWRP'XULQJHQJLQHVKXWGRZQWKHVWDUWHUFRQWLQXHVWRUXQLIWKH*HQHUDWRU6ZLWFKLVOHIW21

3UREDEOH&DXVH5HYHUVH&XUUHQW3URWHFWLRQIXQFWLRQRI*&8LVGHIHFWLYH

)L[5HSDLURUUHSODFH*&8

1RWHV  7XUQLQJ WKH *HQHUDWRU 6ZLWFK RII SULRU WR HQJLQH VKXWGRZQ ZLOO FRUUHFW WKLV FRQGLWLRQ DV D
VWRSJDSPHDVXUHEXWWKHRSHUDWRUVKRXOGEHDZDUHWKDWLIWKLVSUHFDXWLRQLVRYHUORRNHGGDPDJHWRWKH
VWDUWHUJHQHUDWRUFDQUHVXOW

6\PSWRP$IWHUDQHQJLQHVWDUWWKH*HQHUDWRUZLOOQRWFRPHRQOLQH ORZ90UHDGLQJDQGRU/9/LWH
21 EXWQRUPDOJHQHUDWRURXWSXWYROWDJHH[LVWV QRPLQDOO\9 DW$RIWKH/&5

3UREDEOH&DXVHV7KLVV\PSWRPZRXOGLQGLFDWHWKDWWKH*HQHUDWRUKDVEXLOWXSDQGLVEHLQJUHJXODWHG
EXWWKH/&5LVQRWFRQQHFWLQJWKH*HQHUDWRUWRWKH%XV7KLVFDQEHFDXVHGE\

 D  &KHFNWKH$PS%XV&LUFXLW%UHDNHU

 E  1RRXWSXW QRPLQDOO\9 RQSLQ+RIWKH*&8 GHIHFWLYH*&8 

 F  2XWSXWRQSLQ+EXWQR9ROWDJHRQ;RI/&5 GHIHFWLYHZLULQJ 

 G  1RUPDOYROWDJH QRPLQDOO\9 IURP;WR;RI/&5 GHIHFWLYH/&5 

 H  1RUPDO9ROWDJH QRPLQDOO\9 IURPERWK;DQG;RI/&5 RSHQJURXQGZLUH 

)L[

 D  5HSODFHRUUHSDLU*&8

 E DQGH 5LQJRXWDQGUHSDLUZLULQJDVUHTXLUHG
 
 F  5HSODFH/&5
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


6\PSWRP$IWHUDQHQJLQHVWDUWWKH*HQHUDWRUZRQ¶WFRPHRQOLQHDQGWKHYROWDJHDW$WRWKH/&5LV
RQO\DERXW9ROWDQGWKHUHLVQRWYROWDJHRQSLQ-RIWKH*&8

3UREDEOH&DXVHV7KHUHLVDGLVFRQWLQXLW\LQWKHFLUFXLWIHHGLQJSRZHUWRWKH*&8ZKLFKLQFOXGHVWKH
ZLULQJWKH$&%*HQHUDWRU6ZLWFKDQGWKH6WDUW6ZLWFK

)L[0DNHVXUHWKDWWKH$&%LVQRWWULSSHGDQGWKDWWKH*HQHUDWRU6ZLWFKLV21DQGWKHQSURFHHG
WRULQJRXWDQGLVRODWHWKHGLVFRQWLQXLW\IURP$RIWKH/&5WRSLQ-

6\PSWRP7KH*HQHUDWRUZRQ¶WFRPHRQOLQHDQGWKHYROWDJHRQ$RIWKH/&5LVORZ 9 

3UREDEOH&DXVHVWKH9ROWDJH5HJXODWRUVHFWLRQRIWKH*&8LVGHIHFWLYH

)L[5HSDLURUUHSODFHWKH*&8

6\PSWRP7KH/RZHU,QVWUXPHQW3DQHO9ROWPHWHULQGLFDWHVUDSLGO\LQFUHDVLQJEXVYROWDJHDQGWKHQ
DWDERXW9VXGGHQO\GURSVWRDERXW9DQGWKHQVORZO\GHFUHDVHVDVWKHEDWWHULHVGLVFKDUJH

3UREDEOH&DXVHV7KLVLVLQGLFDWLYHRIDQ2YHUYROWDJHWULSDQGPD\EHDFFRPSDQLHGE\WKH$&%
WULSSLQJ,QWKRVHFDVHVZKHUHWKH&%GRHVQRWWULSWKHV\VWHPFDQEHUHVWRUHGWRQRUPDORSHUDWLRQE\
PRPHQWDULO\WXUQLQJWKH*HQHUDWRU6ZLWFKRIIDQGEDFNRQ

)L[,IUHVHWWLQJWKH&%RUF\FOLQJWKH*HQHUDWRU6ZLWFKUHVWRUHVWKHV\VWHPDQGWKH*HQHUDWRUVWD\V
RQOLQHWKH*&8LVVXVSHFWRIDQLQWHUPLWWHQWFRQGLWLRQ,IWKHV\PSWRPVUHSHDWWKH*&8LVIDXOW\
DQGVKRXOGEHUHSDLUHGRUUHSODFHG

/,*+7,1*6<67(07528%/(6+227,1*

(OHFWURQLF,QVWUXPHQW/LJKW'LPPHU

'HVFULSWLRQ

7KHLQVWUXPHQWOLJKWVDUHGLPPHGE\WZRVHSDUDWHGLPPHUFRQWUROV2QHRIWKHVHLVIRUWKHXSSHU
SDQHOLQVWUXPHQWOLJKWVDQGWKHRWKHULVIRUWKHORZHUSDQHOOLJKWV7KHLQVWUXPHQWOLJKWVZLWFKIHHGV
SRZHUWRWKHGLPPHUFLUFXLWVDQGWKHIODSOLJKWWKURXJKWKHILYH$PSLQVWUXPHQWOLJKWFLUFXLWEUHDNHU

7KHSLORWKDVFRQWURORIWKHLQVWUXPHQWOLJKWLQWHQVLW\WKURXJKWKHNQRERQWKHYDULDEOHUHVLVWRU31
591$<6'$PRXQWHGLQWKHXSSHUSDQHO7KHUHLVDVHSDUDWHFRQWUROIRUHDFKRIWKHXSSHU
SDQHODQGWKHORZHUSDQHOOLJKWV7KHFRQWUROVIRUWKHXSSHUDQGORZHUSDQHOVDUHLGHQWLFDOH[FHSWIRU
ZLUH QXPEHUV  7KH YDULDEOH UHVLVWRU FRQWUROV WKH ELDV RQ WKH EDVH SLQ RI WKH 31 1 SRZHU
WUDQVLVWRU3RZHULVIHGWRWKHFROOHFWRURIWKHWUDQVLVWRUZKLOHWKHHPLWWHURIWKHWUDQVLVWRURXWSXWV
FXUUHQWWRWKHOLJKWLQJEXV7KHVFKHPDWLFRIWKHGLPPHUFLUFXLWLVVKRZQRQGUDZLQJSDJH
DQGWKHDVVHPEO\GHWDLOVDUHVKRZQRQGUDZLQJ
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


7URXEOHVKRRWLQJ

7KHIROORZLQJLQVWUXFWLRQVDUHIRUWKHXSSHUSDQHOGLPPHUFLUFXLW7URXEOHVKRRWLQJWKHORZHUSDQHO
LVLGHQWLFDOH[FHSWWKDWRQODWHUDLUFUDIWWKHZLUHVDUHQXPEHUHGGLIIHUHQWO\IURPWKHXSSHUSDQHOFRQWURO
WR WKHORZHUSDQHO FRQWURO 8VHWKHVFKHPDWLF GUDZLQJSDJH DQGWKHDVVHPEO\GUDZLQJ
WRDLGLQWURXEOHVKRRWLQJ

,IRQHRIWKHHOHFWURQLFGLPPHUVVKRXOGIDLOWRRSHUDWHILUVWFKHFNWKHILYH$PSLQVWUXPHQWOLJKWFLUFXLW
EUHDNHU,IWKHIODSOLJKWEXUQVZKHQWKHPDVWHUVZLWFKDQGWKHLQVWUXPHQWOLJKWVZLWFKHVDUHDFWLYDWHG
WKHFLUFXLWEUHDNHUDQGVZLWFKDUHJRRG2SHQWKHORZHUSDQHODQGYLVXDOO\LQVSHFWWKHZLULQJKDUQHVV
IRUEURNHQZLUHVDQGFRUURGHGRUEDGFRQQHFWLRQV

7RFKHFNIRUDVKRUWLQWKHLQVWUXPHQWOLJKWIL[WXUHVPDNHVXUHWKHPDVWHUVZLWFKLV2))DQGGLVFRQQHFW
WKHWUDQVLVWRURXWSXWZLUHIURP WKHOLJKWLQJEXV )DEULFDWHD WHVWOHDGZLWK DILYH$PS
FLUFXLW EUHDNHU WZR DOOLJDWRU FOLSV DQG DERXW  LQFKHV RI JDXJH ZLUH  0DNH VXUH WKDW WKH
LQVWUXPHQWOLJKWVZRUNE\FRQQHFWLQJWKHWHVWOHDGZLWKWKHFLUFXLWEUHDNHULQOLQHEHWZHHQWKHSRZHU
EXVVDQGWKHOLJKWLQJEXV7XUQ21WKHPDVWHUVZLWFK,IWKHOLJKWVLOOXPLQDWHWKHIL[WXUHVDQGZLULQJ
DUHILQH,IWKHFLUFXLWEUHDNHULQWKHWHVWOHDGSRSVWKHUHLVDVKRUWLQWKHLQVWUXPHQWOLJKWIL[WXUHVRU
ZLULQJ,IWKHUHLVDVKRUWLVRODWHLWDQGPDNHWKHQHFHVVDU\UHSDLUV0DNHVXUHDOORIWKHOLJKWVDQG
ZLULQJ RI WKH V\VWHP DUH ZRUNLQJ EHIRUH SURFHHGLQJ VLQFH VKRUWV DUH WKH PRVW FRPPRQ FDXVH RI
WUDQVLVWRUIDLOXUH

2QFHLWLVNQRZQWKDWWKHLQVWUXPHQWOLJKWVDQGZLULQJDUHJRRGDQGWKHGLPPHUVWLOOZLOOQRWFRQWURO
WKHP XVH D 9ROW PHWHU WR PDNH VXUH WKDW WKH LQVWUXPHQWOLJKW VZLWFK LV IHHGLQJ EXV YROWDJH WR WKH
YDULDEOHUHVLVWRUDQGWKH&WHUPLQDORIWKHWUDQVLVWRU7RDFFHVVWKHWHUPLQDOVRIWKHWUDQVLVWRUUHPRYH
WKHWZRVFUHZVWKDWKROGWKHKHDWVLQNWRWKHORZHUSDQHO7KHYDULDEOHUHVLVWRUWHUPLQDOZLWKWKH
ZLUHLVWKHSRZHUZLUHIURPWKHLQVWUXPHQWOLJKWVZLWFK,IYROWDJHLVQRWSUHVHQWDWHLWKHURQHRU
ERWKRIWKHVHWHUPLQDOVLVRODWHWKHWURXEOHDQGPDNHWKHQHFHVVDU\UHSDLUVWRWKHZLULQJ8VHWKH9ROW
PHWHUWRFKHFNWKHYROWDJHDWWKH%WHUPLQDORIWKHWUDQVLVWRU7KLVYROWDJHVKRXOGYDU\IURPWREXV
OHYHOZKHQWKHFRQWURONQRELVWXUQHG

,IWKHYROWDJHLVQRWSURSHUDWWKH%WHUPLQDOUHPRYHWKHWUDQVLVWRUDQGUHFKHFNWKHYROWDJHDWWKH%
WHUPLQDORIWKHWUDQVLVWRUVRFNHW7RUHPRYHWKHWUDQVLVWRUIURPWKHVRFNHWUHPRYHWKHWZRVFUHZV
KROGLQJLWWRWKHKHDWVLQN3XOOWKHWUDQVLVWRURXWRIWKHVRFNHW,IWKHYROWDJHLVVWLOOQRWSURSHUDWWKH
%WHUPLQDOWKHYDULDEOHUHVLVWRU 31591$<6'$ LVEDGRUKDVDEDGJURXQG,IWKHYROWDJHV
WRWKH%DQG&WHUPLQDOVRIWKHWUDQVLVWRUDUHJRRGDQGWKHGLPPHUGRHVQRWZRUNWKHWUDQVLVWRULVEDG
7RLQVWDOODQHZWUDQVLVWRU 311 FRDWWKHERWWRPRIWKHWUDQVLVWRUZLWKDWKLQFRDWRIKHDWVLQN
FRPSRXQG  ,QVHUW WKH PLFD LQVXODWRU RYHU WKH WZR WUDQVLVWRU OHDGV DQG VWLFN LW WR WKH KHDWVLQN
FRPSRXQG&RDWWKHERWWRPRIWKHPLFDLQVXODWRUZLWKDWKLQFRDWRIKHDWVLQNFRPSRXQG:KLWHKHDW
VLQNFRPSRXQGFDQEHREWDLQHGDWPRVW5DGLR6KDFNRUHOHFWURQLFVXSSO\VWRUHV0RVW5DGLR6KDFN
VWRUHVDOVRVWRFNWKH1WUDQVLVWRU3OXJWKHWUDQVLVWRUWKURXJKWKHKHDWVLQNDQGLQWRWKHVRFNHW
,QVWDOOWKHVFUHZVWKDWZHUHUHPRYHG0DNHVXUHWKDWWKHVKRXOGHUVRIWKHWUDQVLVWRUVRFNHWVFUHZKROHV
VHDWSURSHUO\LQWKHKHDWVLQNKROHV7KHFDVHRIWKHWUDQVLVWRULVRQHRIWKHHOHFWULFDOFRQQHFWLRQVRI
WKHWUDQVLVWRUDQGPXVWQRWEHJURXQGHGWRWKHKHDWVLQNRUWKHDLUFUDIW,IWKHFDVHLVVKRUWHGWRJURXQG
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


ZLWKWKHSRZHURQWKHWUDQVLVWRUZLOOEHUXLQHG2QFHWKHZLUHVKDYHEHHQUHFRQQHFWHGDQGWKHXQLWLV
ZRUNLQJSURSHUO\PRXQWWKHKHDWVLQNWRWKHORZHUSDQHODQGVHFXUHDQ\ORRVHZLUHVDVQHFHVVDU\
'RXEOHFKHFNWKHRSHUDWLRQRIWKHXQLWEHIRUHIDVWHQLQJWKHORZHUSDQHODQGUHWXUQLQJWKHDLUFUDIWWR
VHUYLFH

(1*,1(0$,17(1$1&(

0DLQWHQDQFHRQ\RXU3UDWW :KLWQH\37$HQJLQHLVWREHGRQHLQDFFRUGDQFHZLWK3UDWWDQG:KLWQH\
0DQXDOVWKDWDUHOLVWHGXQGHU³,QVWUXFWLRQVIRU&RQWLQXHG$LUZRUWKLQHVV´LQWKH'HVFULSWLRQVHFWLRQ
7LPHDQGH[SHULHQFHKDYHSURYHQWKDWDQHQJLQHSURSHUO\PDLQWDLQHGZLOOJLYHH[FHOOHQWVHUYLFHZLWK
DPLQLPXPRIGRZQWLPHDQGH[SHQVH(VWDEOLVKDURXWLQHPDLQWHQDQFHVFKHGXOHDQGDGKHUHWRLWDV
FORVHO\DVSRVVLEOHWDNLQJLQWRFRQVLGHUDWLRQWKHSUREOHPVRIEXV\VFKHGXOHVLQPLGVHDVRQ

7KHSURSHUHQJLQHPDQXDOVIRUWKHDLUSODQHDUHOLVWHGEHORZ

 ³0DLQWHQDQFH0DQXDO7XUERSURS*DV7XUELQH(QJLQH0RGHOV37$$%5´
 0DQXDO3DUW1R9ROV 

 ³0DLQWHQDQFH0DQXDO7XUERSURS*DV7XUELQH(QJLQH0RGHO37$$*´
 0DQXDO3DUW1R9ROV 

 ³0DLQWHQDQFH 0DQXDO  7XUERSURS *DV 7XUELQH (QJLQH  0RGHOV 37$$*$5%
 5´
0DQXDO3DUW1R9ROV 

$OORIWKHVHPDQXDOVPD\EHREWDLQHGIURP

    3UDWW :KLWQH\&DQDGD
    0DULH9LFWRULQ
    /RQJXHXLO4XHEHF
    -*$&DQDGD

(TXDOO\LPSRUWDQWWRSURSHUPDLQWHQDQFHLVWKHNHHSLQJRIUHFRUGV0DLQWHQDQFHUHFRUGVRQDWXUELQH
HQJLQHDUHH[WUHPHO\LPSRUWDQWDQGHYHU\HIIRUWVKRXOGEHPDGHWRVHHWKDWDOOWKHZRUNSHUIRUPHGLV
SURSHUO\UHFRUGHG$UHFRUGRIWKHQXPEHURIVWDUWVDQGIOLJKWV0867EHNHSWIRUILJXULQJF\FOHFRXQWV
RQWKHURWRUFRPSRQHQWVLQ\RXUHQJLQHDWHDFKDQQXDO7KHF\FOHVDUHILJXUHGXVLQJWKHQXPEHURI
VWDUWVDQGIOLJKWVZLWKDIRUPXODIRXQGLQWKHDSSOLFDEOHHQJLQH6HUYLFH%XOOHWLQ:KHQWKHVHSDUWV
UHDFKWKHLUOLIHOLPLWLQHLWKHUKRXUVFRQVXPHGRUF\FOHVWKH\PXVWEHUHPRYHGDQGGLVFDUGHG)HZRI
\RXZLOOHYHUVHHDSDUWUHDFKWKDWOLPLWEXWWKHUHFRUGVPXVWEHNHSWIRU\RXUORJERRNVWREHLQSURSHU
RUGHU3OHDVHUHIHUWR6HFWLRQ$,5:257+,1(66/,0,7$7,216
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


:KLOHRQWKHVXEMHFWRIUHFRUGNHHSLQJLWLVDJRRGLGHDWRNHHSDVPDOOSDGLQWKHFRFNSLWWRUHFRUG
HQJLQHSDUDPHWHUVRQDUHJXODUEDVLV)RUH[DPSOHRQWKHUHWXUQIURP\RXUILUVWORDGHDFKGD\DWWKH
VDPHDOWLWXGHZLWKWKHVDPHWRUTXHDQGSURSHOOHU530VHWWLQJUHFRUGWKHIROORZLQJKRXUPHWHUWLPH
SUHVVXUHDOWLWXGH2$77T,771J1SRLOSUHVVXUHRLOWHPSHUDWXUHIXHOSUHVVXUHDQGIXHOIORZ

:KHQWURXEOHDSSHDUVWKLVLQIRUPDWLRQZLOOVDYHORWVRIWLPHWURXEOHVKRRWLQJDQGZLOODOVRJLYH\RXD
JRRGSLFWXUHRIWKHWUHQGVLQ\RXUHQJLQH5HPHPEHUQRWZRHQJLQHVZLOOUXQWKHVDPH7KHFKDQJH
LQ\RXUHQJLQHSDUDPHWHUVRYHUDSHULRGRIWLPHLVZKDWUHDOO\PDWWHUV.HHSLWZULWWHQGRZQEHFDXVH
\RXUPLQGZLOOGHFHLYH\RXRYHUWKHVSDQRIDVHDVRQDQGLWLVWKHEHVWZD\IRUPDLQWHQDQFHSHUVRQQHO
WRPDNHDQDFFXUDWHGLDJQRVLVZKHQSUREOHPVDULVH

&OHDQLQJ(QJLQH([WHULRU

7KHFOHDQLQJRI\RXUHQJLQHPD\EHDFFRPSOLVKHGRQO\ZKHQWKHHQJLQHLVFROG1(9(5:$6+$
+27(1*,1(<RXPD\ZDVKWKHHQJLQHH[WHULRUZLWKZDWHURUZLWKDSHWUROHXPEDVHVROYHQW:KLOH
FOHDQLQJ \RXU HQJLQH LW LV D JRRG WLPH WR LQVSHFW DOO WKH HQJLQH H[WHUQDOV WXELQJ ZLULQJ FRQWURO
OLQNDJHVKRVHDVVHPEOLHVHWF<RXVKRXOGORRNIRUHYLGHQFHRIZHDUFKDILQJFUDFNVFRUURVLRQIXHO
DQGRLOOHDNVDQGWKHVHFXULW\RIKRVHVEUDFNHWVFODPSVDQGFRQQHFWLRQV$OVRLQVSHFW\RXUDLULQOHW
V\VWHPIRUVLJQVRIOHDNVWKDWZRXOGDOORZXQILOWHUHGDLULQWRWKHHQJLQH

$IWHUFOHDQLQJ\RXUHQJLQHEORZLWRIIZLWKFRPSUHVVHGDLUDQGUXQWKHHQJLQHXQWLOLWLVGU\.HHSLQJ
WKHRXWVLGHRI\RXUHQJLQHFOHDQZLOOKHOSLQVSRWWLQJSUREOHPVPDNHFRQWUROVHDVLHUWRRSHUDWHDQG
OLPLWWKHZHDURQWKHEHWDEORFNDQGEHWDULQJ5HPHPEHUDOVRWRNHHS\RXURLOFRROHUFOHDQHGRQD
UHJXODUEDVLVWRPDLQWDLQWKHHIILFLHQF\RIWKHFRROHUIRURSHUDWLRQLQKRWZHDWKHU

)XHO5HTXLUHPHQWV

7KH3UDWW :KLWQH\37$HQJLQHZLOOUXQRQ-HW$NHURVHQHGLHVHORU$Y*DV$Y*DVPD\EH
XVHGRQO\LQWKHFDVHRIDQHPHUJHQF\DQGIRUDGXUDWLRQRIQRORQJHUWKDQKRXUVEHWZHHQRYHUKDXOV
'LHVHOLVQRWUHFRPPHQGHG'LHVHOGRHVQRWEXUQDVFOHDQDV-HW$RUNHURVHQHFDXVLQJSUREOHPVZLWK
IXHOQR]]OHVFRPEXVWLRQOLQHUVDQGKRWVHFWLRQSDUWV

$LU7UDFWRUUHFRPPHQGVWKHXVHRI-HW$IXHOWKDWKDVEHHQWUHDWHGZLWKD)XHO6\VWHP,FLQJ,QKLELWRU
)6,, VXFKDV3ULVW6RPH-HW$FRPHVIURPWKHVXSSOLHUZLWK)6,,LQLWDQGVRPHGRHVQRWVRFKHFN
ZLWK \RXUVXSSOLHUWR EHVXUH  ,W LV DOVR UHFRPPHQGHGWKDWIXHO EHWUHDWHGZLWK D %LRFLGH VXFKDV
%LR%DU WRSUHYHQWWKHJURZWKRIEDFWHULDDQGIXQJXVLQ\RXUIXHOVWRUDJHWDQN V 

2Q\RXUJURXQGHTXLSPHQWLQVWDOODIXHOILOWHUZDWHUVHSDUDWRUWKDWZLOOVKXWRIIWKHIXHOIORZZKHQ
ZDWHULVSUHVHQW)XHO0867EHNHSWFOHDQZDWHUIUHHDQGIUHHRIEDFWHULDODQGIXQJDOJURZWK&DUH
VKRXOGEHWDNHQZKHQIXHOLQJWKHDLUFUDIWLQGXVW\FRQGLWLRQVWRNHHSGLUWIURPHQWHULQJWKHIXHOWDQNV

6HHWKHDSSURYHG$LUSODQH)OLJKW0DQXDOIRUGHWDLOV

 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


)XHO)LOWHU&OHDQLQJ

7KHILUHZDOOIXHOILOWHULVVKRZQLQ)LJXUH7KLVIXHOILOWHUPD\EHD)UDP)63/0IXHOILOWHU
RUDQ$LU7UDFWRUSQIXHOILOWHU%RWKIXHOILOWHUVXVHWKH$LU7UDFWRUSQIXHOILOWHU
HOHPHQW,QVSHFWLRQDQGPDLQWHQDQFHSURFHGXUHVIRUERWKIXHOILOWHUVDUHDOPRVWLGHQWLFDO7KHILOWHU
VKRXOGEHFOHDQHGDQGLQVSHFWHGIRUJHQHUDOFRQGLWLRQLQDFFRUGDQFHZLWK6HUYLFH/HWWHU )UDP
)63/0IXHOILOWHU RU6HUYLFH/HWWHU$ $LU7UDFWRUSQIXHOILOWHU $FRS\RIWKLV
6HUYLFH/HWWHUVDUHIRXQGLQWKH6HUYLFH/HWWHU%RRNWKDWLVLQFOXGHGZLWKHDFK2:1(560$18$/

:KHQWKHIXHOILOWHUERZOKDVEHHQUHPRYHGIRUILOWHUFOHDQLQJLWPXVWEHUHPHPEHUHGWKDWWKHIXHO
OLQHVIURPWKHHQJLQHIXHOFRQWUROWRWKHKHDGHUWDQNKDYHEHHQGUDLQHGDQGWKHVHOLQHVZLOOEHDLU
ORFNHGLIDVWDUWLVDWWHPSWHGZLWKRXWILUVWSULPLQJWKHOLQHVZLWKIXHO8VHWKHHOHFWULFERRVWSXPSIRU
WKLV

7KHHQJLQHDOVRKDVDGLVSRVDEOHIXHOILOWHURQWKHKLJKSUHVVXUHSXPSORFDWHGDWWKHR¶FORFNSRVLWLRQ
RQWKHDFFHVVDU\FDVH7KLV HOHPHQW LV DQ$1$7KLV ILOWHUVKRXOG EHFKDQJHGDQ\WLPH WKH
ILUHZDOO ILOWHU LV IRXQG FRQWDPLQDWHG RU HYHU\  KRXUV  6HH WKH SURSHU HQJLQH PDQXDO LQ
,16758&7,216)25&217,18('$,5:257+,1(66LQ6HFWLRQIRUGHWDLOVRQUHPRYLQJDQG
UHSODFLQJWKLVILOWHU

 &$87,21
 ,IDQ\FRQWDPLQDWLRQLVIRXQGLQHLWKHUIXHOILOWHU
 LQYHVWLJDWHWKHFDXVHDQGUHFWLI\WKHSUREOHP


)XHO+HDGHU7DQN6XPS'UDLQLQJ

'UDLQWKHIXHOKHDGHUWDQNVXPS'$,/<WRUHPRYHDQ\PRLVWXUHLQWKHIXHOV\VWHPIURPFRQGHQVDWLRQ
RUFRQWDPLQDWLRQ'UDLQLQJWKHVXPSGDLO\DOVRZLOOSUHYHQWWKHGUDLQYDOYHIURPIUHH]LQJXSIURP
FRQWDFWZLWKIHUWLOL]HUDQGFKHPLFDOV7KHORFDWLRQDQGDFFHVVWRWKLVGUDLQLVVKRZQLQ)LJXUH

1HJDWLYH)XHO3UHVVXUH:DUQLQJ

<RXU$LU7UDFWRULVHTXLSSHGZLWKDQHOHFWULFIXHOERRVWSXPSDQGDQHQJLQHGULYHQORZSUHVVXUHIXHO
SXPS7KHHOHFWULFERRVWSXPSLVLQVWDOOHGDVDEDFNXSIRUWKHHQJLQHGULYHQORZSUHVVXUHSXPS,W
DOVR ILOOV WKH IXHO OLQHV SULRU WR VWDUWLQJ  7KH KLJK SUHVVXUH IXHO SXPS DORQH FDQ NHHS WKH HQJLQH
UXQQLQJQRUPDOO\LIDSRVLWLYHIORZRISUHVVXUHLVORVW ORVVRIHLWKHUWKHHOHFWULFERRVWSXPSRUWKH
HQJLQHGULYHQORZSUHVVXUHSXPS WKHQWKHKLJKSUHVVXUHSXPSKDVDKRXUOLIHOLPLW

7KH$7KDVDQHJDWLYHSUHVVXUHVZLWFKDQGZDUQLQJOLJKWZLWKWKHVZLWFKRQWKHRXWOHWVLGHRI
WKHIXHOILOWHU,IWKLVZDUQLQJOLJKWVKRXOGFRPHRQWXUQRQWKHHOHFWULFERRVWSXPSDQGKDYHWKH
SUREOHPFRUUHFWHGSURPSWO\$FKHFNRIWKHIXHOILOWHUVLVLQRUGHUKHUHDVRQHPD\EHVWDUWLQJWR
FORJEHFDXVHRIIXHOFRQWDPLQDWLRQ5HIHUWR)LJXUHDQG\RXU(QJLQH0DLQWHQDQFH0DQXDOIRU
GHWDLOVRQUHSODFLQJWKHILOWHU7KHZLULQJVFKHPDWLFIRUWKLVQHJDWLYHSUHVVXUHZDUQLQJOLJKWLVVKRZQ
LQ)LJXUH,QWKLVILJXUHWKHOLJKWLVPDUNHG)8(/),/7(535(666:
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


)XHO1R]]OH&OHDQLQJ

)XHOQR]]OHVDUHWKHPRVWLPSRUWDQWURXWLQHPDLQWHQDQFHLWHPRQ\RXUHQJLQH1RRQHVLQJOHLWHP
KDVDVPXFKGLUHFWHIIHFWRQWKHFRQGLWLRQRIWKHLQVLGHRI\RXUHQJLQH'LUW\IXHOQR]]OHVFDQUXLQ
FRPEXVWLRQ OLQHUV JXLGH YDQHV WXUELQH EODGHV DQG WKH JDV JHQHUDWRU FDVH  )XHO QR]]OHV DUH QRW
FOHDQHG:+(1WKH\DUHGLUW\EXWWRNHHSWKHPIURP%(&20,1*',57<<RXUIXHOQR]]OHVPD\
EHFOHDQHGE\\RXUPDLQWHQDQFHSHUVRQQHORUWKH\PD\EHVHQWWRDQXPEHURIORFDWLRQVIRUFOHDQLQJ
DQGUHWXUQHGWR\RXIRULQVWDOODWLRQ$LU7UDFWRUUHFRPPHQGVQR]]OHFOHDQLQJDWKRXULQWHUYDOV
DVORQJDV\RXDUHXVLQJ-HW$IXHODQG\RXDUHJHWWLQJJRRGUHSRUWVIURPWKHSHUVRQQHOFOHDQLQJWKH
QR]]OHV \RX UHPRYH  (QJLQHV LQFRUSRUDWLQJ GXSOH[ IXHO QR]]OHV 37$$* RQO\  ZLOO KDYH
DGGLWLRQDOSDUWVLQWHUQDOO\LQWKHIXHOQR]]OHDGDSWHUDWWKHORFDWLRQZKHUHWKHIXHOLQWHUFRQQHFWWXEHV
HQWHUWKHDGDSWHU&DUHVKRXOGEHWDNHQQRWWRORVHWKHVHSDUWVGXULQJGLVDVVHPEO\

7KHIXHOQR]]OHDVVHPEOLHVRQDOO37$DQG$*HQJLQHVDUHVLPSOH[W\SHIXHOQR]]OHVLID
37$$*LVLQVWDOOHGGHSHQGLQJRQ6%LQFRUSRUDWLRQWKH\PD\KDYHGXSOH[QR]]OHVLQVWDOOHG
37$VHULHVHQJLQHVPD\FRPHZLWKHLWKHUDSULPDU\VHFRQGDU\25SULPDU\VHFRQGDU\
IXHOQR]]OHFRQILJXUDWLRQ7KH37$$*FRPHVRQO\ZLWKDSULPDU\VHFRQGDU\IXHOQR]]OH
FRQILJXUDWLRQ37$$*HQJLQHVZLWKGXSOH[QR]]OHVUHTXLUHGLIIHUHQWWRROLQJDQGSURFHGXUHVIRU
FOHDQLQJ  (DUO\ 37$ VHULHV HQJLQHV PD\ KDYH VLPSOH[ QR]]OHV LQVWDOOHG ZKLFK FDQ EH IORZ
FKHFNHG WKH VDPH DV WKH  DQG $* VHULHV  )XHO QR]]OHV VKRXOG EHDVVHPEOHG SHU 3 :&¶6
PDLQWHQDQFHPDQXDOIRUWKHDSSOLFDEOHHQJLQH%HVLGHVDILQDOWRUTXHIRUWKHDWWDFKLQJEROWVWKHUHLV
DUHTXLUHPHQWIRUDIHHOHUJDXJHFKHFN6HHVHFWLRQ3 :&ERRN

%HIRUH \RX UHPRYH WKH IXHO QR]]OHV UHIHU WR WKH SURSHU 3UDWW DQG :KLWQH\ PDQXDO LQ 6HFWLRQ 
,16758&7,216)25&217,18('$,5:257+,1(66:ULWHGRZQWKHORFDWLRQRIWKHSULPDU\
DQGVHFRQGDU\QR]]OHV7KHSULPDU\QR]]OHPD\EHLGHQWLILHGE\DZHOGVSRWRQWKHIODWDUHDQH[WWR
RQHRIWKHEROWV6HH)LJXUH'21270$5.217+(*$6*(1(5$725&$6(:,7+$
3(1&,/

7RUHPRYHWKHIXHOQR]]OHVUHPRYHWKHVDIHW\ZLUHIURPWKHUHWDLQLQJEROWVDQGUHPRYHWKHEROWVZLWK
DWZHOYHSRLQWLQFKVRFNHW$IWHUUHPRYLQJWKHEROWVDQGWUDQVIHUWXEHUHWDLQHUWKHWUDQVIHUWXEH
ZLOOVOLGHRQHGLUHFWLRQRUWKHRWKHULQWRWKHQR]]OHERG\$IWHUVOLGLQJWKHWUDQVIHUWXEHVFOHDUWKHIXHO
QR]]OHPD\EHUHPRYHGIURPWKHHQJLQH7KHIXHOVXSSO\OLQHVZLOOKDYHWREHGLVFRQQHFWHGIURPWKH
ORZHUQR]]OH

:KHQLQVWDOOLQJWKHIXHOQR]]OHVXVHDQWLVHL]HRUPRO\OXEHRQWKHEROWVDQGWRUTXHWKHPWRLQ
OEVDQGVDIHW\WKHEROWV([WUHPHFDXWLRQVKRXOGEHXVHGLQKDQGOLQJWKHFOHDQIXHOQR]]OHV'2
127728&+7+(12==/(7,3:,7+<285),1*(56

%HFDUHIXOZKHQZRUNLQJDURXQGWKH7ZLUHVRQWKHULJKWVLGHRIWKHHQJLQH7KHVHZLUHVDQGWKHLU
DWWDFKLQJSRLQWVDUHIUDJLOHDQGVKRXOGQRWEHEXPSHGRUPRYHG


 ,03257$17
 7KHTXDOLW\RIIXHODQGWKHFRQGLWLRQRIWKHIXHODQGIXHOQR]]OHVZLOOKDYH
 DGLUHFWUHODWLRQWRWKHFRQGLWLRQDQGWKHORQJHYLW\RI\RXUHQJLQH

 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


2LO5HTXLUHPHQWV

2LOXVHGLQWKH3UDWW :KLWQH\37$HQJLQHLVV\QWKHWLFEDVHRLOGHVLJQHGIRUJDVWXUELQHHQJLQHV
8QOLNHSHWUROHXPEDVHOXEULFDQWVWXUELQHRLOFDQQRWEHPL[HGRQHEUDQGZLWKDQRWKHU,I\RXKDYHWR
FKDQJHEUDQGV\RXVKRXOGGUDLQWKHRLOWDQNRLOFRROHUJHDUUHGXFWLRQFDVHDQGDFFHVVRU\FDVH6HH
)LJXUHIRUWKHGUDLQORFDWLRQV

7KHRLOWDQN )LJXUHLWHP1R LVORFDWHGRQWKHERWWRPRIWKHDLULQOHWFDVHDQGPD\EHUHPRYHG
E\UHPRYLQJWKHFOHYLVSLQ )LJXUHLWHP1R LQVHUWLQJD1)EROWLQWRWKHWKUHDGHGSOXJ
DQGSXOOLQJ

7KHGUDLQSOXJMXVWKDVDQ2ULQJ )LJXUHLWHP1R RQLWDQGZLOOFRPHRXWZLWKDOLWWOHSXOO7KH
RLOFRROHUPD\EHGUDLQHGE\UHPRYLQJERWKKRVHVDQGDOORZLQJWKHRLOWRUXQRXW5HPRYLQJWKHFKLS
GHWHFWRU )LJXUHLWHP1R ZLOOGUDLQWKHJHDUUHGXFWLRQFDVHDVZLOOUHPRYDORIWKHGUDLQSOXJ
)LJXUHLWHP1R ORFDWHGLQWKHORZHVWSRLQWWRWKHDFFHVVRU\FDVH<RXFDQQRWJHWLWDOORXWEXW
LI\RXGRWKDWPXFK\RXZLOOEHLQJRRGVKDSH7KH37$$*DQG$*KDYHDVKRUWWKUHDGHG
EROWDV WKHRLOGUDLQ SOXJ1RUPDORLOFKDQJHVUHTXLUHRQO\WKHUHPRYDORIRLOIURP WKHPDLQWDQN
XVXDOO\WKHUHLVRQO\TXDUWRIRLOOHIWLQERWKWKH5*%DQG$*%VRWKHPDMRULW\RIWKHRLOZLOOEH
FDSWXUHGZKHQGUDLQLQJWKHPDLQRLOWDQN7KHRQO\WLPHDOOGUDLQSOXJVVKRXOGEHUHPRYHGLVZKHQ
\RXDUHFKDQJLQJEUDQGVRIRLO,WLVUHFRPPHQGHGWKDWWKHRLOEHFKDQJHGRQFHD\HDU

&KHFNLQJWKHRLOVKRXOGDOZD\VEHGRQHZLWKLQPLQXWHVRIVKXWGRZQ8QOLNHRWKHU3UDWWVWKLVRQH
GRHVQRWUHTXLUHILOOLQJEHIRUHFKHFNLQJ7KHUHDVRQIRUFKHFNLQJWKHOHYHOULJKWDIWHUVKXWGRZQLVWKDW
LWGRHVQRWDOORZWKHRLOWLPHWRHVFDSHWRRWKHUDUHDVRIWKHHQJLQH6RPHWLPHVEDGVHDOVDOORZWKHRLO
WROHDNEDFNLQWRFDYLWLHVLQVLGHWKHHQJLQHJLYLQJ\RXDIDOVHLQGLFDWLRQRQWKHGLSVWLFN2QFHWKHHQJLQH
VWDUWVWXUQLQJWKHVFDYHQJHUSXPSSLFNVXSWKHRLODQGUHWXUQVLWWRWKHRLOWDQN

 &$87,21
 ,QVXUHWKHRLOGLSVWLFNLVSURSHUO\VHFXUHGDIWHUFKHFNLQJRLOOHYHO$ORRVHGLSVWLFNFDQ
 DOORZPRVWRIWKHRLOWREHORVWRYHUERDUGZLWKLQDVKRUWDPRXQWRIWLPH

2LOXVHGDWWKHIDFWRU\LV(DVWPDQ([[RQ%37XUER2LORU0RELO-HW2LO,,7KHRLOEUDQGDQG
W\SHZLOOEHPDUNHGRQWKHRLODFFHVVGRRUDWWKHWLPHRIGHOLYHU\IURPWKHIDFWRU\,IDGLIIHUHQWEUDQG
LVXVHGWKHHQJLQHDQGOLQHVVKRXOGEHGUDLQHGDQGDIOXVKLQJSURFHGXUHZLWKWKHQHZRLOVKRXOGEH
FDUULHG RXW LQ DFFRUGDQFH ZLWK WKH 3UDWW  :KLWQH\ 37$ 0DLQWHQDQFH 0DQXDO  $OVR VHH )OLJKW
0DQXDO

127(

 )RU DOO 37$ VHULHV HQJLQHV DV LQVWDOOHG RQ $7 DLUFUDIW ZKHQ SHUIRUPLQJ PRWRULQJ
 FRPSUHVVRUUXQVRIWKHHQJLQHVXFKDVIRUDFRPSUHVVRUZDVKDQGRUDWXUELQHZDVKWKHPDLQRLO
 SUHVVXUHSXPSFDQVXSSO\PRUHRLOWRWKHHQJLQHWKDQWKHRLOVFDYHQJHSXPSVFDQUHWXUQWRWKHRLO
 WDQN7KLVFDQOHDGWRHQJLQHRLOILOOLQJWKH$X[LOLDU\*HDU%R[ $*% WRDOHYHOKLJKHQRXJKIRU
 WKHRLOWRGUDLQRYHUERDUGYLDWKHKLJKSUHVVXUHIXHOSXPSGUDLQ7KLVVKRXOGQRWEHDFDXVHIRU
 FRQFHUQRQFHWKHHQJLQHLVVWDUWHGDQGUXQDWLGOHIRUVHYHUDOPLQXWHVWKHRLOLQWKH$*%ZLOOEH
 VFDYHQJHGEDFNLQWRWKHRLOWDQN$IWHUWKHHQJLQHLVVKXWGRZQWKHRLOOHYHOVKRXOGEHFKHFNHG
 ZLWKLQPLQXWHVDQGWKHRLOOHYHOUHVWRUHGWRLWVQRUPDOUDQJH7KLVVLWXDWLRQZLOOQRWKDYHDQ\
 HIIHFWRQQRUPDOHQJLQHRSHUDWLRQ
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


2LO)LOWHU

7KHRLOILOWHUORFDWHGWRWKHULJKW VLGHRIWKHDLULQOHW FDVHLV KHOG LQ SODFHE\DFRYHUZLWK QXWV
5HPRYLQJ WKH RLO ILOWHU UHTXLUHV D VSHFLDO SXOOHU DQG VKRXOG QRW EH UHPRYHG E\ DQ\ RWKHU PHDQV
&OHDQLQJ WKH ILOWHU PD\ EH DFFRPSOLVKHG E\ JHQWO\ DJLWDWLQJ WKH HOHPHQW LQ FOHDQ VROYHQW  $IWHU
FOHDQLQJDOORZWKHHOHPHQWWRVWDQGLQDFOHDQHQYLURQPHQWXQWLOGU\5HIHUWRWKHSURSHU3UDWWDQG
:KLWQH\0DQXDOLQ6HFWLRQ,16758&7,216)25&217,18('$,5:257+,1(662LOILOWHUV
KDYHDKRXUOLIHOLPLWDIWHUZKLFKWKH\PXVWEHGLVFDUGHG&RQWLQXHGXVHRIRLOILOWHUVZLWKPRUH
WKDQKRXUVPD\OHDGWRORZHURLOSUHVVXUH


&$87,21

 8QGHUQRFLUFXPVWDQFHVPD\WKHHOHPHQWEH
 XOWUDVRQLFDOO\FOHDQHGSUHVVXUHIOXVKHGRUGULHG
 ZLWKFRPSUHVVHGDLU6XFKFOHDQLQJDQGGU\LQJ
 FDXVHVGDPDJHWRWKHILOWHUPHGLD


&KLS'HWHFWRU

%HVLGHVFOHDQLQJWKHILOWHUSXOOWKHFKLSGHWHFWRURQWKHERWWRPRIWKHJHDUUHGXFWLRQFDVHDQGNHHSLW
FOHDQHG RII HYHU\  KRXUV  7KH GLVFRYHU\ RI $1< PDJQHWLF SDUWLFOHV VKRXOG EH LQYHVWLJDWHG E\
TXDOLILHGSHUVRQQHO5HIHUWR)LJXUHLWHP1HZHU37$HQJLQHVKDYHWZRFKLSGHWHFWRUVRQHLQ
WKH5*%DQGRQHLQWKH$*%%RWKGHWHFWRUVDUHZLUHGWRDVLQJOHZDUQLQJOLJKWLQWKHFRFNSLW

$LU)LOWHUV

7KH 37$ HQJLQH UHTXLUHV D ODUJH DPRXQW RI DLU DW IXOO SRZHU VHWWLQJV  7R KDQGOH WKLV ORDG ZKLOH
DGHTXDWHO\FOHDQLQJWKHDLU\RXU$LU7UDFWRULVHTXLSSHGZLWKODUJHHIILFLHQWDLUILOWHUV7KHOHQJWKRI
VHUYLFHIRUWKHVHILOWHUVGHSHQGVHQWLUHO\RQWKHRSHUDWLQJFRQGLWLRQV:KHQ\RXUHSODFHWKHVHILOWHUV
XVHWKHRULJLQDOHTXLSPHQWILOWHUVIRUUHSODFHPHQW&KHDSHUDIWHUPDUNHWILOWHUVDUHQRWWKHVDPHTXDOLW\
VRWKH\QHLWKHUSHUIRUPDVZHOOQRUODVWDVORQJ5HPHPEHU\RXUHQJLQHUHTXLUHVDORWRIDLUWRSHUIRUP
SURSHUO\)LOWHUVVKRXOGEHLQVSHFWHGFOHDQHGUHSODFHGLQDFFRUGDQFHZLWKWKH,QVSHFWLRQ6FKHGXOHLQ
6HFWLRQ,OOXPLQDWLRQRIWKH$LU)LOWHU&$87,21OLJKWLQGLFDWHVWKDWQRUPDODLUIORZWKURXJKWKH
ILOWHULVUHVWULFWHG6KRXOGWKH$LU)LOWHU&$87,21OLJKWLOOXPLQDWHODQGDVVRRQDVSUDFWLFDO DQG
VHUYLFHWKHDLUILOWHUV\VWHPLQFOXGLQJFOHDQLQJRUUHSODFLQJWKHILOWHU V DVQHFHVVDU\ 6HHLQVWUXFWLRQ
EHORZ 'RQRWUHO\RQWKLVOLJKWWRGHWHUPLQHDLUILOWHUFOHDQLQJUHSODFHPHQWLQWHUYDOV

)RUDLUFUDIWZLWKWKHODUJHF\OLQGULFDOFRPPHUFLDOWUXFNILOWHUV 'RQDOGVRQSQ3 DOWHUQDWHLV
3  UHPRYDO RI WKHVH ILOWHUV LV DFFRPSOLVKHG E\ UHPRYLQJ WKH DLUVFRRS DVVHPEO\ DQG WKH DIW
ORZHU HQJLQH FRZO  7KHUH LV D ´ EROW ZLWK DFKHFN QXW RQ WKH DIW FHQWHU RI HDFK ILOWHU DQG LW LV
QHFHVVDU\WRORRVHQWKLVEROWEHIRUHWKHILOWHUVFDQEHUHPRYHG7KHEROWLVWRSUHVVWKHILOWHUVDJDLQVW
WKHIRUZDUGZDOORIWKHILOWHUER[IRUDWLJKWVHDO:LWKWKHILOWHUVORRVHWKHVPDOOVXSSRUWDQJOHVDUH
UHPRYHG DQG WKH ILOWHUV ZLOO VOLGH RXW WKH ERWWRP RSHQLQJ  7KHVH ILOWHUV PD\ EH FOHDQHG XVLQJ WKH
LQVWUXFWLRQVLQ$LU7UDFWRU6HUYLFH/HWWHU7KHILOWHUVDUHLQVWDOOHGLQUHYHUVHRUGHURIUHPRYDO
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


)RUDLUFUDIWZLWKWKHSQ5DP$LUILOWHUUHPRYDORIWKHILOWHULVDFFRPSOLVKHGE\UHPRYLQJ
WKHORZHUDQGVLGHFRZOVNLQVIURPWKHDLUFUDIW7KHQFRPSOHWHO\UHPRYHWKHORZHUSOHQXPFRYHUWR
JDLQDFFHVVWRWKHILOWHU)URPWKHULJKWKDQGVLGHRIWKHDLUSODQHUHPRYHWKHILOWHUUHWDLQLQJEDQGRQ
WKHDIWSOHQXPEXONKHDGE\UHPRYLQJWKHHLJKWEROWVWKDWKROGLWLQSODFH7KHKHDGVRIWKHVHEROWVDUH
RQWKHDIWVLGHRIWKHDIWSOHQXPEXONKHDG/DVWO\UHPRYHWKHILOWHUE\ORRVHQLQJWKHIRXUZRUPGULYH
FODPSVWKDWKROGWKHILOWHULQSODFH7KLVILOWHUPD\EHFOHDQHGXVLQJWKHLQVWUXFWLRQVLQ$LU7UDFWRU
6HUYLFH/HWWHU7KHILOWHUVDUHLQVWDOOHGLQUHYHUVHRUGHURIUHPRYDO

)RU DLUFUDIW ZLWK WKH %UDFNHWW %$( IRDP 5DP $LU ILOWHU UHPRYDO RI WKH ILOWHU HOHPHQW LV
DFFRPSOLVKHG E\ UHPRYLQJ WKH ORZHU DQG VLGH HQJLQH FRZOV DQG WKH ORZHU HQJLQH SOHQXP FRYHU
5HPRYHWKHFHQWHUILOWHUVXSSRUWURGVE\UHPRYLQJWKHVFUHZRQWKHIRUZDUGHQGDQGVOLGLQJWKHPRXW
RIWKHLUUHWDLQLQJEUDFNHWVDWWKHDIWHQG5HPRYHWKHROGILOWHUHOHPHQWDQGUHSODFHZLWKDQHZRQH
HQVXULQJ WKDW WKH ILOWHU HOHPHQW FRPSOHWHO\ ILOOV WKH VWDLQOHVV VWHHO IUDPH HVSHFLDOO\ LQ WKH FRUQHUV
5HSODFHWKHILOWHUVXSSRUWURGVSOHQXPFRYHUDQGFRZOVNLQVLQUHYHUVHRUGHURIUHPRYDO7KLVILOWHU
VKRXOGQRWEHFOHDQHGDVWKLVPD\UHPRYHWKHZHWWDQWDQGGHFUHDVHWKHILOWHULQJDELOLW\RIWKHIRDP
$Q\H[FHVVGLUWRUGHEULVWKDWKDVDFFXPXODWHGRQWKHIRUZDUGIDFHRIWKHILOWHUPD\EHEUXVKHGRIIZLWK
D EULVWOH EUXVK OLNH D SDLQWEUXVK DQG YDFXXPHG RXW RI WKH SOHQXP  7KH %UDFNHWW DLU ILOWHU KDV D
PD[LPXPUHFRPPHQGHGVHUYLFHOLIHRIFDOHQGDUPRQWKVUHJDUGOHVVRIWKHDFWXDOIOLJKWWLPH7KH
UHDVRQLVWRHQVXUHWKDWDFFHSWDEOHOHYHOVRIZHWWDQWUHPDLQLQWKHILOWHUWRDGHTXDWHO\FDSWXUHGXVWDQG
GHEULV

(QJLQH&RQWURO&DEOHV

7KHFRQWUROVDQGFRQWUROFDEOHVVKRXOGEHNHSWFOHDQDQGGU\'RQRWSXWJUHDVHRQWKHFRQWUROVDVLW
DWWUDFWVGLUWFDXVLQJH[FHVVLYHZHDUDQGELQGLQJ

(QJLQH5LJJLQJ3URFHGXUHV

3RZHU/HYHU

 5HIHUWR3UDWW :KLWQH\0DLQWHQDQFH0DQXDOIRUDSSURSULDWHHQJLQHIRUJHQHUDOLQVWUXFWLRQVDQG
GUDZLQJV5LJHQJLQH3RZHU&RQWUROVDQG5HYHUVLQJV\VWHPDVIROORZV 37$5RQO\ 

 D  'LVFRQQHFWUHYHUVLQJFDEOHIURPSURSHOOHUFRQWUROFDPRQDIWUKVLGHRIHQJLQH0RYHIRUN
DQGFDEOHDVV\XS LQERDUGRXWRIWKHZD\RIWKHSURSHOOHUFRQWUROFDP

 E  5HPRYHSURSHOOHUUHYHUVLQJOHYHUIURPIZGHQGRISXVKSXOOFDEOHDVV\'RQRWORVHWKH
EXVKLQJ 3 :SQ LQWKHWRSRIWKHDUP,QVWDOO+DUW]HOOSQ$FDUERQ
EORFNLQUHYHUVLQJDUP

 F  ,QVWDOOFDUERQEORFNDWHQGRIUHYHUVLQJOHYHULQWRWKHEHWDULQJ%ORFNVKRXOGKDYH
FOHDUDQFH,IQRWXVHILQHVDQGSDSHURQIODWVDQGLQJVXUIDFHVDQGLQJDOLWWOHRIIEORFN
XQWLOFOHDUDQFHLVREWDLQHG
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


 G  ,QVWDOOWKHQHZ3 :SQEXVKLQJRQWRSRIWKHSURSHOOHUUHYHUVLQJDUPDQGLQVWDOO
EROWQXWDQGFRWWHUSLQ&KHFNWKHLQVLGHVXUIDFHRIWKH%HWDYDOYHFOHYLVWRVHHLILWLV
IOXVKZLWKWKHIZGHQGRIWKH%HWD9DOYHQXW,IQRWDGMXVWSURSHOOHUJRYHUQRULQWHUFRQQHFW
URGXQWLOLWLVIOXVK*RYHUQRU$LU%OHHG/LQN$UPPXVWEHDJDLQVWVWXG7RUTXHMDPQXWV
VDIHW\ZLWK06&ZLUH,QVWDOOQXW3 :SQZDVKHUVHDFKVLGHRI
URGHQGEHDULQJ FRWWHU

 H  :LWKSRZHUOHYHUDWJURXQGLGOHSRVLWLRQDGMXVWUHDUHQGRIUHYHUVLQJFDEOHIRUNZKHUH
WKHFOHYLVSLQLVIUHHLQWKHWRSKROHRIWKH3URSHOOHU&RQWURO&DP7KHQVKRUWHQIRUN
WXUQWRWDNHRXWDQ\VODFN5HLQVWDOOFOHYLVSLQZDVKHUDQGFRWWHUSLQ

 I  :LWKSRZHUOHYHULQJURXQGLGOHSRVLWLRQDGMXVWWKH)&8URGWRFOHDUWKH)&8H[WHQVLRQ
DUP$GMXVWHDFKHQGDVQHFHVVDU\WLJKWHQFKHFNQXWVHDFKHQGRI)&8URGDQGLQVWDOO
FRWWHUSLQV

 J  7LJKWHQDOOFKHFNQXWVDQGURGHQGVVDIHW\ZLUHZKHUHUHTXLUHGDQGFRWWHUDOOFDVWOHQXWV

 K  0DNHDQ\RWKHUDGMXVWPHQWVRQIOLJKWOLQHDIWHUILUVWUXQRIHQJLQH

 5LJ(QJLQH3RZHU&RQWUROVDQG5HYHUVLQJ6\VWHPDVIROORZV )RU37$$*$* 

 D  'LVFRQQHFWUHYHUVLQJFDEOHIURPSURSHOOHUFRQWUROFDPRQDIWUKVLGHRIHQJLQH0RYHIRUN
DQGFDEOHDVV\XS LQERDUGRXWRIWKHZD\RIWKHSURSHOOHUFRQWUROFDP

 E  5HPRYHSURSHOOHUUHYHUVLQJOHYHUIURPIZGHQGRISXVKSXOOFDEOHDVV\'RQRWORVHWKH
EXVKLQJ 3 :SQ LQWKHWRSRIWKHDUP,QVWDOO+DUW]HOOSQ$FDUERQ
EORFNLQUHYHUVLQJDUP

 F  ,QVWDOOFDUERQEORFNDWHQGRIUHYHUVLQJOHYHULQWRWKHEHWDULQJ%ORFNVKRXOGKDYH
FOHDUDQFH,IQRWXVHILQHVDQGSDSHURQIODWVDQGLQJVXUIDFHVDQGLQJDOLWWOHRIIEORFN
XQWLOFOHDUDQFHLVREWDLQHG

 G  ,QVWDOOWKHQHZ3 :SQEXVKLQJRQWRSRIWKHSURSHOOHUUHYHUVLQJDUPDQGLQVWDOO
EROWQXWDQGFRWWHUSLQ&KHFNWKHLQVLGHVXUIDFHRIWKH%HWDYDOYHFOHYLVWRVHHLILWLV
IOXVKZLWKWKHIZGHQGRIWKH%HWD9DOYHQXW,IQRWDGMXVWSURSHOOHUJRYHUQRULQWHUFRQQHFW
URGXQWLOLWLVIOXVK*RYHUQRU$LU%OHHG/LQN$UPPXVWEHDJDLQVWVWXG7RUTXHMDPQXWV
VDIHW\ZLWK06&ZLUH,QVWDOOQXW3 :SQZDVKHUVHDFKVLGHRI
URGHQGEHDULQJ FRWWHU

 H  :LWK3RZHU/HYHUDW*URXQGLGOHDGMXVWSRZHUFDEOHWRSRVLWLRQFRQWUROFDPVKDIWRQSRLQW
RISURSHOOHUFRQWUROFDP

 I  $GMXVW)&8URGIURPSURSHOOHUFRQWUROFDPIRUSUHOLPLQDU\LGOHVHWWLQJRQ)&8

 J  7LJKWHQDOOFKHFNQXWVDQGURGHQGV6DIHW\ZLUHZKHUHUHTXLUHGDQGFRWWHUDOOFDVWOH
QXWV

 K  0DNHDQ\RWKHUDGMXVWPHQWVRQIOLJKWOLQHDIWHUILUVWUXQRIHQJLQH 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


3URSHOOHU/HYHU

5HIHUWR3 :0DLQWHQDQFH0DQXDOIRUDSSURSULDWHHQJLQHIRUJHQHUDOLQVWUXFWLRQVDQGGUDZLQJV5LJ
3URS&RQWUROVDVIROORZV

 D  3RVLWLRQ JRYHUQRU DUP RQ JRYHUQRU DJDLQVW VWRS DV VKRZQ RQ GUDZLQJ  $ 
  

 E  3RVLWLRQSURSOHYHULQFRFNSLWDWIHDWKHUVWRSDQGDGMXVWVZLYHOHQGVDQG5(%1
EHDULQJVRWKDWJRYHUQRUDUPLVDOVRDJDLQVWIHDWKHUVWRS

 F  :LWKJRYHUQRUDUPDJDLQVWKLJK530VWRSSURSOHYHULQFRFNSLWVKRXOGEHIXOOIRUZDUG
ZLWKPLQFXVKLRQDWIRUZDUGVWRS

 G  &KHFNRSHUDWLRQRISURSFDEOHIZGDQGDIWIRUIUHHPRYHPHQW/RFNDOOFKHFNQXWV

 H  3HUIRUPIOLJKWOLQHHQJLQHUXQXS&KHFNIHDWKHUSRVLWLRQDQGKLJK530VHWWLQJRI
530$GMXVWKLJK530VWRSLIUHTXLUHG5HVHWPLQFXVKLRQRQIRUZDUGHQGRI
SURSOHYHU

6WDUW&RQWURO

5HIHU WR 3UDWW  :KLWQH\ 0DLQWHQDQFH 0DQXDO IRU DSSURSULDWH HQJLQH IRU JHQHUDO LQVWUXFWLRQV DQG
GUDZLQJV5LJ(QJLQH6WDUW&RQWURODVIROORZV

 D  3RVLWLRQ6WDUW/HYHULQ&RFNSLWLQ³581´SRVLWLRQ

 E  $GMXVW 5(%1 EHDULQJ DW HQG RI FDEOH VR WKDW FRQGLWLRQ OHYHU RQ HQJLQH LV VWUDLJKW XS
PLGZD\EHWZHHQVWRSV

 F  3XOO6WDUW/HYHULQ&RFNSLWDOOWKHZD\EDFNDJDLQVWWKHTXDGUDQWVWRS&RQGLWLRQOHYHURQ
HQJLQHVKRXOGEHDWWKHIXHOFXWRIISRVLWLRQ

 G  3HUIRUPIOLJKWOLQHHQJLQHUXQXS$GMXVW5(%1EHDULQJDQGRUFDEOHDVVHPEO\VRWKDW
LQ³581´SRVLWLRQHQJLQHLGOHVSHHGLVVHWSHUSDUDJUDSK³J´

 H  6HWWKH)&8FRQWUROURGVWRSIRU)/,*+7,'/(VSHHG 1J 

 I  7LJKWHQ DOO MDP QXWV FKHFN QXWV IRU FRWWHUV LQVWDOO 06& 6DIHW\ ZLUH ZKHUH
UHTXLUHG

 J  *URXQGLGOHVSHHGVDVIROORZV1J

 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


&RPSUHVVRU:DVKHV

&RPSUHVVRUZDVKHVDUHSHUIRUPHGWRUHPRYHGLUWDQGGHSRVLWVZKLFKKDPSHUWKHHIILFLHQF\RIWKH
FRPSUHVVRU7KHTXDOLW\RIWKH$LU7UDFWRULQGXFWLRQV\VWHPLVVRJRRGWKDWPRVWHQJLQHVUHTXLUHD
FRPSUHVVRUZDVKRQO\RQFHD\HDU$QLQVSHFWLRQRI\RXUHQJLQHLQOHWLVDJRRGLQGLFDWRURIZKHQWR
SHUIRUPDFRPSUHVVRUZDVK,IWKHILUVWVWDJHFRPSUHVVRUEODGHVDQGRUFRQHRQWKHLQVLGHRI\RXU
HQJLQHLQOHWDUHGLUW\WKHQWKHFRPSUHVVRULVWRR$Q\WKLQJJRLQJLQWRWKHFRPSUHVVRUKDVWRJRE\
KHUH,IWKHHQJLQHLQOHWFRQHLVFOHDQ\RXFDQEHVXUHWKHLQVLGHRI\RXUHQJLQHLVLQSUHWW\JRRG
VKDSH'RQ¶WGRDFRPSUHVVRUZDVKMXVWWREHGRLQJRQH

6HH)LJXUHIRUWKHORFDWLRQRIHQJLQH FRPEXVWLRQGUDLQV WR EHRSHQHGIRUFRPSUHVVRUZDVKHV
5HJDUGOHVVRIKRZPDQ\FRPSUHVVRUZDVKHV\RXGRWKHUHLVRQO\RQHZD\WRDFFRPSOLVKWKHWDVN
ZLWKPD[LPXPUHVXOWV5HPRYHWKHHQJLQHFRZOLQJDQGWKHDLULQOHWFRYHURYHUWKHHQJLQHLQOHW
&RQQHFWDQGVWDUWWKHEDWWHU\FKDUJHU5HPRYHWKH3ILOWHU ORFDWHGRQWKHULJKWVLGHDWWKHUHDURI
WKH HQJLQH  DQG OHDYH WKH ILOWHU ERZO RII  ,I \RXU HQJLQH GRHV QRW KDYH D 3 ILOWHU UHPRYH WKH
FRPSUHVVRUGLVFKDUJHOLQHIURPWKHULJKWKDQGVLGHRIWKH)&85HPRYHWKHWZRJDVJHQHUDWRUFDVH
IXHOGUDLQYDOYHVWRDOORZWKHGLUW\ZDWHUWRHVFDSHUDSLGO\7KHQHZHU37HQJLQHVKDYHD3ILOWHU
ERZOWKDWKDVDGUDLQILWWLQJWRDOORZIRUFRPSUHVVRUZDVKLQJZLWKRXWKDYLQJWRGLVFRQQHFWDQ\WKLQJ

,I\RXGRQRWUHPRYHWKHYDOYHVZKDWKDSSHQVLQVLGH\RXUHQJLQHVWURQJO\UHVHPEOHVWKHEDWKWXEDIWHU
WKHNLGVILQLVKWKHLUEDWK7KHULQJVOHIWLQWKHHQJLQHZLOOGRPRUHKDUPWKDQWKHZDVKLQJGRHVJRRG

7KH3 :&PDLQWHQDQFHPDQXDOOLVWVDOOWKHDSSURYHGFRPSUHVVRUZDVKLQJPDWHULDOV7KHPDQXDO
DOVRJLYHVWKHSURSHUPL[LQJUDWLRVIRUWKHZDVKVROXWLRQ


 &$87,21
 'R127PL[FRPSUHVVRUZDVKLQJPDWHULDOVLQVWURQJHUVWUHQJWKVWKDQVKRZQ
 LQWKH3 :&PDQXDO7KHUDWLRVDUHWKH0$;,080DOORZHG$QRSHUDWRU
 PD\GRPRUHGDPDJHWKDQJRRGLIWU\LQJWRZDVKDFRPSUHVVRUZLWKDKLJKHU
 FRQFHQWUDWLRQRIFOHDQLQJDJHQWWKDQWKDWUHFRPPHQGHGE\3 :&


3ULRUWRSHUIRUPLQJDFRPSUHVVRUZDVKWKHHQJLQH0867EHDOORZHGWRFRROIRUDPLQLPXPRIWKUHH
KRXUVWRDYRLGVWUHVVLQJ+6,FRPSRQHQWV

0RVW$LU7UDFWRUVKDYHDEXLOWLQZDVKULQJZKLFKDOORZVWKHZDVKLQJVROXWLRQWREHLQMHFWHGLQWRWKH
FRPSUHVVRUDWWKHPRVWHIILFLHQWUDWH$FFHVVWRWKHZDVKULQJLVE\UHPRYLQJWKH$1FDSIURPWKH
ILWWLQJORFDWHGLQWKHHQJLQHFRZOFRUQHUVNLQXQGHUWKHOHIWKDQGH[KDXVWVWDFN7KHVDPHZDVKULQJLV
WREHXVHGWRLQMHFWIUHVKFOHDQZDWHURIGULQNLQJTXDOLW\IRUULQVLQJSXUSRVHVDIWHUWKHZDVKVROXWLRQ
KDVEHHQLQMHFWHG$VPDOOORZSUHVVXUH DSSUR[LPDWHO\SVL ZDWHUSXPSVXFKDVDERDWELOJHSXPS
ZLOOGRWKHMRE,I\RXKDYHUHODWLYHO\ORZFRQFHQWUDWLRQVRIPLQHUDOVLQ\RXUWDSZDWHUDJDUGHQKRVH
FDQEHSOXPEHGWRWKHZDVKULQJILWWLQJGLUHFWO\WRWKHWDSIRUULQVLQJ<RXVKRXOGXVHZDWHUWKDWLVDV
IUHH IURP PLQHUDO FRQFHQWUDWLRQ DV SRVVLEOH  ,I \RX OLYH LQ DQ DUHD WKDW KDV KLJK FRQFHQWUDWLRQV RI
PLQHUDOV LQ WKH WDS ZDWHU LW LV DGYLVDEOH WR XVH GHPLQHUDOL]HG ZDWHU  7KH HQJLQH VKRXOG EH ULQVHG
PRQLWRULQJWKHVWDUWHUOLPLWDWLRQV XQWLOWKHOLTXLGGUDLQLQJIURPWKHHQJLQHGUDLQVLVFOHDUZDWHU,WLV
PRVWLPSRUWDQWWRLQVXUHDOOWKHZDVKLQJDJHQW VRDS KDVEHHQULQVHGRXWRIWKHHQJLQH$IWHUWKH
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


FRPSUHVVRUZDVKLV ILQLVKHGVWDUW DQGUXQWKHHQJLQHDW KLJKLGOHIRUWRPLQXWHVWR GU\RXW WKH
FRPSUHVVRU

$WXUELQHZDVKXVLQJ3 :&WRROSQ3:& FRVWDSSUR[ LVYHU\HIIHFWLYHLQUHPRYLQJ
PDWHULDOVZKLFKPD\KDYHEHHQDOORZHGWRDFFXPXODWHRQ&7EODGHV6RPHRIWKHVHPDWHULDOVPD\
FDXVH VXOSKLGDWLRQ D IRUP RI KLJK WHPSHUDWXUH FRUURVLRQ WKDW DFWLYHO\ DWWDFNV WKH SDUHQW PHWDO RI
FRPSUHVVRUWXUELQHEODGHV8VHRIWKLVWRROKDVSURYHQWREHYHU\HIIHFWLYHLQUHGXFLQJWKHQXPEHUVRI
&7EODGHVUHMHFWHGDW+6,GXHWRVXOSKLGDWLRQ

3 :&ZLOOQRWKRQRUZDUUDQW\RQ&7EODGHVUHPRYHGGXHWRVXOSKLGDWLRQ

$IWHUWKHZDWHUVWRSVGULSSLQJRXWRIWKHHQJLQHUHSODFHWKHIXHOGUDLQYDOYHVDQGVDIHW\WKHPUHSODFH
WKHDLULQOHWFRYHU3ILOWHUDQGHQJLQHFRZOLQJ:KHQHYHU\WKLQJKDVEHHQUHSODFHGVWDUWWKHHQJLQH
DQGUXQIRUDWOHDVWPLQXWHVWRGU\WKHHQJLQHRXW1HYHUSXWWKHDLUSODQHXSZLWKRXWUXQQLQJWKH
HQJLQHXQWLOLWLVGU\

(QJLQH6WDUWLQJ3URFHGXUHV

RI+6,GHWHULRUDWLRQWDNHVSODFHGXULQJWKHVWDUWSURFHVV:KLOHWKH37HQJLQHLVYHU\FDSDEOH
RIEHLQJVWDUWHGRIIWKHLQWHUQDOEDWWHULHVDPXFKFRROHUVWDUWLQJWHPSHUDWXUHZLOOEHVHHQZLWKWKHXVH
RIDQH[WHUQDOSRZHUFDUW$VXJJHVWLRQLVWRWDNHWKUHHODUJHEDWWHULHV WZRYROWDQGRQHYROW
EDWWHU\  WR PDNH D  YROW EDWWHU\ FDUW  2QFH WKH VWDUW VZLWFK LV HQJDJHG WKH YROWDJH ZLOO GURS WR
DSSUR[LPDWHO\WRYROWVZKLFKZLOODVVXUHDJRRGFRROVWDUW7KHPLQLPXP1JVSHHGUHTXLUHGWR
DWWHPSWDVWDUWLVKRZHYHUVWDUWVDWWHPSWHGDWWKLVORZDFUDQNLQJVSHHGZLOODOPRVWFHUWDLQO\UHVXOW
LQDZDUPHUWKDQQRUPDOVWDUWDQGPD\UHVXOWLQDKRWVWDUW7KHEHVWSURFHGXUHLVWRDOORZWKHVWDUWHU
WRDFFHOHUDWHWKHHQJLQHWRWKHKLJKHVWFUDQNLQJVSHHGSRVVLEOHQRUPDOO\DURXQGWR1JEHIRUH
LQWURGXFLQJIXHO,IFUDQNLQJVSHHGZLWKWKHDLUFUDIWEDWWHU\RQO\IDOOVEHORZ1JLQYHVWLJDWHDQG
FRUUHFWWKHFDXVH8VXDOO\EDWWHU\UHSODFHPHQWZRUQEUXVKHVLQWKHVWDUWHURUEDGZLUHFRQQHFWLRQV
DUHWKHFDXVHVRIORZFUDQNLQJVSHHGV)URPWKHSRLQWZKHUHIXHOKDVEHHQVHOHFWHGWKHHQJLQHVKRXOG
OLJKWRIIQRUPDOO\ZLWKLQWRVHFRQGVLIOLJKWRIIKDVQRWRFFXUUHGZLWKLQVHFRQGVRILQWURGXFLQJ
IXHOPRYHWKHIXHOFRQGLWLRQOHYHUWRFXWRIIDQGSHUIRUPDGU\PRWRULQJUXQWRFOHDUWKHFRPEXVWLRQ
DUHDRIH[FHVVIXHODQGWKHQDWWHPSWDVHFRQGVWDUW

'HSHQGLQJRQWKHHQJLQHPRGHOLQVWDOOHGLQWKH$7DVZHOODVWKHIXHOQR]]OHFRQILJXUDWLRQD
KHVLWDWLRQ LQ DFFHOHUDWLRQ WR LGOH PD\ EH VHHQ DURXQG WKH  WR  1J VSHHG UDQJH QHZHU 37$
HQJLQHVZLOODFFHOHUDWHFRQWLQXRXVO\WRJURXQGLGOHVSHHGVLQFHWKH\DUHHTXLSSHGZLWKGXSOH[IXHO
QR]]OHV


 &$87,21
 7KH37KDVWZRUHGOLQH,77OLPLWVRQHIRUVWDUWLQJRQO\WKHRWKHUIRUQRUPDO
 HQJLQHRSHUDWLRQ)RUVWDUWLQJRQO\WKHHQJLQHLVDOORZHGWRJRWRƒ&IRU
 VHFRQGV,I\RXVHHWKH,77H[FHHGLQJƒ&DERUWWKHVWDUWE\PRYLQJ
 WKHFRQGLWLRQOHYHUWRFXWRII'2127:$,7726((,)7+(
 7(03(5$785(:,//*(772ƒ&

 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


6WDUWLQJWHPSHUDWXUHVH[FHHGLQJƒ&RQDUHJXODUEDVLVVKRXOGEHLQYHVWLJDWHGIRUWKHUHDVRQDQG
FRUUHFWHG7KHZDUPHUWKH2$7LVWKHZDUPHUWKHVWDUWWHPSHUDWXUHVZLOOEHHVSHFLDOO\LIWKHHQJLQH
LVZDUPIURPSUHYLRXVRSHUDWLRQ

1RUPDOJURXQGORZLGOHVSHHGVKRXOGEHDURXQG1JIRUD37$$*RU$*WKH37$
ZLOOLGOHDWDURXQG1J,QYHU\KRWZHDWKHULWLVUHFRPPHQGHGWKDW+LJKLGOH QRUPDOO\
1J EHVHOHFWHGSULRUWRWXUQLQJWKH$LU&RQGLWLRQHUDQG*HQHUDWRURQWRNHHSWKHHQJLQHUXQQLQJDV
FRRODVSRVVLEOH,QYHU\KRWZHDWKHULIWKHFRQGLWLRQOHYHULVOHIWLQJURXQGLGOHZLWKERWKWKHJHQHUDWRU
DQGDLUFRQGLWLRQLQJVHOHFWHGRQWKHHQJLQHPD\DFFHOHUDWHYHU\VORZO\RUQRWDWDOO,IWKLVRFFXUV
WXUQWKHDLUFRQGLWLRQHUDQGJHQHUDWRURIIDGYDQFHWKHFRQGLWLRQOHYHUWRKLJKLGOHWKHQUHVHOHFWWKH
DLUFRQGLWLRQHUDQGJHQHUDWRURQDQGFRQWLQXHQRUPDORSHUDWLRQ

*URXQG5XQ3URFHGXUHV

7KH IROORZLQJ DUH $LU 7UDFWRU¶V UHFRPPHQGDWLRQV RQ SHUIRUPLQJ JURXQG HQJLQH UXQV  7KHVH
UHFRPPHQGDWLRQVDSSO\WRDOO$LU7UDFWRUDLUFUDIW

 ,WLVUHFRPPHQGHGWKDWWKHKRSSHUEHILOOHGZLWKZDWHUSULRUWRSHUIRUPLQJJURXQGUXQV

 7KHDLUSODQHVKRXOGEHSRVLWLRQHGRQWKHWLHGRZQVXFKWKDW)2'SURSZDVKGDPDJHWRRWKHU
DLUFUDIWVWUXFWXUHVSHUVRQQHORUHTXLSPHQWZLOOQRWRFFXUQRUEHGLUHFWHGDWRUDFURVVDQDFWLYH
UXQZD\$OVRSD\FORVHDWWHQWLRQWRWKHJURXQGVXUIDFHEHORZWKHSURSHOOHUDUF6DQGJUDYHO
GLUWWRROV GHEULVHWF FDQEH SLFNHG XSE\ WKH SURS DQG FDQFDXVH GDPDJHWR WKH SURSHOOHU
EODGHV

 7KHLGHDO WLHGRZQDQFKRULV DVWHHO ORRS RUH\H VHW LQ FRQFUHWH$´ GLDPHWHU[´WDOO
FROXPQRIFRQFUHWHEXULHG´LQWKHJURXQGLVXVXDOO\DGHTXDWH6RIWRUVDQG\VRLOPD\UHTXLUH
DGGLWLRQDOFRQFUHWH

 7KHDLUSODQHVKRXOGEHWLHGGRZQDWWKHWDLOXVLQJDSRO\HVWHURUQ\ORQWRZVWUDSRUOLIWVWUDS
ORRSHGDURXQGWKHWDLOZKHHOKRXVLQJDWWDFKEORFNDQGURXWHGWKURXJKWKHWDLOZKHHOIRUN6HH
)LJXUHEHORZIRUDVXJJHVWHGVWUDSURXWLQJ([HUFLVHH[WUHPHFDXWLRQWKDWWKHWLHGRZQVWUDS
GRHVQRWFRQWDFWWKHVWHHULQJSLQPHFKDQLVPDWDQ\WLPHGXULQJWKHJURXQGUXQ7LHGRZQVWUDS
VKRXOGEHPLQLPXPOEVEUHDNLQJVWUHQJWK7KHDLUSODQHVKRXOGEHSRVLWLRQHGDVFORVHDV
SRVVLEOHWRWKHWLHGRZQDQFKRUWRSURYLGHVXIILFLHQWYHUWLFDOWHQVLRQLQWKHWLHGRZQVWUDS

 &KRFNVVKRXOGEHUHPRYHGWRSUHYHQWWKHDLUFUDIWIURPURWDWLQJRQWKHPDLQZKHHOVDQGQRVLQJ
LQWRWKHJURXQGLQWKHHYHQWRIWLHGRZQDQGRUEUDNHIDLOXUH3HUVRQQHOFRQGXFWLQJWKHJURXQG
UXQVKRXOGDQWLFLSDWHIRUZDUGPRYHPHQWRIWKHDLUFUDIWLQWKLVHYHQW

 2QO\TXDOLILHGSHUVRQQHOVKRXOGFRQGXFWWKHJURXQGUXQV

 7KHDLUSODQHEUDNHVVKRXOGEHVHWRUKHOGGXULQJWKHJURXQGUXQ

 7KHFRQWUROVWLFNVKRXOGEHKHOGIXOODIW QRVHXS GXULQJWKHJURXQGUXQ
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7




)LJXUH6XJJHVWHG7DLO7LH'RZQ0HWKRG

),1$1'58''(5

9HUWLFDO)LQ

'HWDLOVRIWKHYHUWLFDOILQDUHVKRZQLQ)LJXUH

7KH FDQWLOHYHU YHUWLFDO ILQ LV DWWDFKHG WR WKH IXVHODJH IUDPH DW WKH IURQW VSDU ORFDWLRQ ZLWK WZR
1$6EROWVDQG$1QXWV,WKDVEHHQIRXQGWKDWWKHVHWZREROWVPD\WHQGWRORRVHQLQ
VHUYLFH1RGRXEWEXIIHWLQJIURPWKHSURSHOOHUVOLSVWUHDPGXULQJUXQXSDQGVWUHVVHVIURPWXUQVWHQG
WRSURGXFHFRQVWDQWORDGVIURPVLGHWRVLGHWKDWWHQGWRORRVHQWKHQXWV

&KHFNWKHWRUTXHRQWKHWZR1$6EROWVDWKRXULQWHUYDOV,IWKHEROWLVKHOGVWDWLRQDU\DQG
WKHWRUTXHZUHQFKDSSOLHGWRWKHQXWWKHWRUTXHYDOYHVKRXOGEHLQFKSRXQGV,IKROGLQJWKHQXW
VWDWLRQDU\DQGWXUQLQJWKHEROWWRUTXHVKRXOGEHLQFKSRXQGV

7KH UHDU VSDU DWWDFKHV WR WKH IXVHODJH IUDPH ZLWK $1 EROWV RI YDULRXV OHQJWKV GHSHQGLQJ RQ WKH
DPRXQW RI VKLPV UHTXLUHG EHWZHHQ WKH IXVHODJH IUDPH DQG WKH UHDU VSDU  7KH VKLPV DUH RI YDULRXV
WKLFNQHVV  DQGWKHXSSHUVKLPVDUHFRPELQDWLRQVRISQRUZKLOHWKH
ORZHUVKLPVDUHFRPELQDWLRQVRISQRU

7KHYHUWLFDOILQUHDUVSDULVGULOOHGRQLQVWDOODWLRQZKHUHWKHDWWDFKPHQWLVPDGHWRWRSORQJHURQ,ID
QHZILQLVLQVWDOOHGPDNHDGULOOWHPSODWHIURPWKHRULJLQDOILQUHDUVSDULQRUGHUWRGULOOWKHIRXU
KROHVIRUWKHDWWDFKPHQWWRWKHXSSHUORQJHURQ7KHWHPSODWHVKRXOGEHZLGHDQGORQJHQRXJKWR
SLFNXSWKHWZRORZHUDWWDFKEROWV7KHWHPSODWHVKRXOGEHPDGHRIHLWKHUDOXPLQXPRUVWHHODWOHDVW
WKLFN
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


,QVWDOOWKHILQRQWKHDLUFUDIWDQGLQVWDOOWKHEROWVDWWKHIURQWDQGUHDUVSDUORFDWLRQV%HVXUHWKHFRUUHFW
DPRXQWRIVKLPVLVXVHGEHWZHHQWKHIXVHODJHIUDPHDQGWKHUHDUVSDU7KH1$6IURQWVSDU
EROWVKDYHDWRUTXHRILQFKSRXQGVDWWKHQXW7KHUHDUVSDUEROWVKDYHDWRUTXHRILQFKSRXQGV
DWWKHQXW

5XGGHU

'HWDLOVRIWKHUXGGHUDUHVKRZQLQ)LJXUH

7KHUXGGHULVDWWDFKHGWRWKHYHUWLFDOILQZLWKWKUHH$1$EROWVZLWKD$1ZDVKHUXQGHU
WKH EROW KHDG DQG WZR ZDVKHUV XQGHU WKH $1$ QXW  7KH UXGGHU KLQJHV KDYH 10% SQ
06EHDULQJVLQVWDOOHGZKLFKDUHVWDNHGRQHDFKVLGHRIWKHWKLFNKLQJHILWWLQJ6LQFH
WKHUHLVDFHUWDLQDPRXQWRIGUDJZLWKWKHVHVSKHULFDOEHDULQJVLWLVYHU\LPSRUWDQWWRIXOO\WRUTXH 
LQFKSRXQGVDWWKHQXW WKHWKUHH$1$EROWVWKDWDWWDFKWKHUXGGHUWRWKHILQ,IWKHEROWVDUHORRVH
WKHEROWVZLOOWXUQRQWKHILQKLQJHEUDFNHWVDQGFDXVHWKHKROHVWREHFRPHHORQJDWHG

7KHEHDULQJVKDYHOLWWOHZHDUEXWLILWLVQHFHVVDU\WRUHSODFHWKHPFRQVWUXFWDSXOOHUWKDWZLOODSSO\
IRUFHWRWKHRXWHUULQJRIWKHEHDULQJZLWKWKHRSSRVLQJIRUFHDJDLQVWWKHDOXPLQXPKRXVLQJ$$1
EROWWKURXJKERWKSDUWVRIWKHSXOOHUVKRXOGEHWLJKWHQHGXQWLOWKHEHDULQJULPLVSXOOHGSDVWWKHVWDNH
PDUNVDQGWKHEHDULQJFRPHVRXWRIWKHKRXVLQJ:KHQWKHQHZEHDULQJLVLQVWDOOHGUHVWDNHZLWKD
FHQWHUSXQFK

7KH UXGGHU KRUQ LV SQ  DQG KDV WZR SQ  EXVKLQJV LQVWDOOHG IRU ZHDU DW WKH FDEOH
DWWDFKPHQW7KHKRUQLVDWWDFKHGWRWKHUXGGHUDVVHPEO\ZLWKWZR$1&$EROW

5XGGHUFRQWUROVWRSVDUHDWWKHUXGGHUKRUQDQGWKHUXGGHUWUDYHOLVƒ“ƒOHIWDQGƒ“ƒULJKW

Rudder Controls

Details of the rudder controls are shown in Figure 7.

7KHUXGGHUFDEOHVDUHSQ7KH\DUHDWWDFKHGWRVWDLQOHVVOLQNSODWHV SQ DWWKH

UXGGHUKRUQZLWK$1&EROWV$1&QXWV$1&ZDVKHUVDQG06FRWWHUV
7KHUHDUHIRXU06%SXOOH\VLQWKHUXGGHUFDEOHV\VWHPWRWKHFRFNSLW

,QWKHFRFNSLWWKHUXGGHUFDEOHVDWWDFKWRDVWHHOSQSODWHZKLFKLVEROWHGWRDSQ
DOXPLQXPDGMXVWFKDQQHO$OVRDWWDFKHGWRWKHSODWHLVDSQFDEOHDVVHPEO\WKDW
LQWHUFRQQHFWVWKHUXGGHUZLWKWKHDLOHURQFRQWUROV\VWHP7KHLQWHUFRQQHFWVSULQJVXQGHUWKHFRFNSLW
IORRUDUHSQ7KH\DWWDFKWRD06/6FDEOHH\H0656FDEOHH\H$1&
WKLPEOHDQG*1LFURSUHVVVOHHYH

7KHUXGGHUSHGDOKDQJHUDVVHPEO\ SQ VOLGHVLQWKHDGMXVWFKDQQHODQGLVKHOGLQSODFHZLWK
D'7)DVSLQ7KHKDQJHUDVVHPEO\KDVDVSULQJDWWDFKHGWRSXOOLWIRUZDUGWRUHPRYHVODFN
IURPWKHUXGGHUFDEOH7KHVSULQJLVDWWDFKHGWRDQH\HEROWLQWKHKDQJHUDVVHPEO\DQGLVSQ
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


7KHUXGGHUSHGDOFDVWLQJVDUHSQ /+ DQG 5+ DQGPD\EHUHPRYHGE\WDNLQJ
RXWWKH$1EROWWKRXJKWKHSQ6&&DSOXJRQWKHLQERDUGHQGRIWKHKDQJHUDVVHPEO\DQGUHPRYLQJ
WKH$1EROWDWWDFKLQJWKHPDVWHUF\OLQGHUVWUDS7KHFDVWLQJVVKRXOGEHUHPRYHGDWKRXU
LQWHUYDOVDQGLQVSHFWHGIRUFUDFNVDURXQGWKHEURQ]HEXVKLQJ SQ EXVKLQJZHDUDQGJHQHUDO
FRQGLWLRQ*UHDVHWKHKDQJHUDVVHPEO\DQGVOLGHWKHFDVWLQJEDFNLQSODFH%HVXUHWRXVHWKH$1
FDVWOHQXWZLWKD06FRWWHURQWKH$1EROWFRQQHFWLQJWKHPDVWHUF\OLQGHUVWUDS$OVR
EHVXUHWZR$1ZDVKHUVDUHLQVWDOOHGEHWZHHQWKHVWUDSDQGFDVWLQJDQGZRUNWKHEUDNHVHYHUDO
WLPHVWREHVXUHFOHDUDQFHH[LVWVEHWZHHQWKHVWUDSDQGWKHFDVWLQJ:KLOHWKHFDVWLQJLVUHPRYHGFKHFN
WKHFRQGLWLRQRIWKH SQ EURQ]HEXVKLQJLQWKHPDVWHUF\OLQGHUVWUDSV SQ 2LOWKH
EURQ]HEXVKLQJVZLWKDJHQHUDOSXUSRVHRLOEHIRUHUHLQVWDOOLQJWKHEROWV

5XGGHU7ULP7DE

7KHUXGGHUWULPWDELVDOVRXVHGDVDERRVWWDEWRUHGXFHSHGDOIRUFHVLQQRUPDOIOLJKW7KHWDELVPDGH
RIDVLQJOHVNLQZUDSSHGDURXQGDZHOGHGVSDUDQGULEIUDPH7KHWDELVFRQWUROOHGE\DVLQJOHFRQWURO
DUPRQLWVULJKWKDQGVLGH7KHWDELQVWDOODWLRQLVVKRZQLQ)LJXUH

7KHWDELVKHOGLQSODFHE\WZRVWXGVWKDWILWORRVHO\LQWRSUHRLOHGSRURXVEURQ]HEHDULQJVLQHDFKHQG
RIWKHWDEVSDU7KHXSSHUVWXGLVIL[HGWRWKHUXGGHUDQGWKHORZHUVWXGLVDWWDFKHGWRWKHHQGRID
PHWDOVWUDSWKDWLVLWVHOIEROWHGWRWKHERWWRPDIWRIWKHUXGGHU

7KHWDEPD\EHUHPRYHGE\ILUVWUHPRYLQJWKH$1QXWDQG$1EROWWKDWUHWDLQVWKHFRQWURO
URGWRWKHWDEDUP7KHFRQWUROURGFDQQRZEHGLVFRQQHFWHG7KHWDEFDQEHVHSDUDWHGIURPWKHUXGGHU
E\UHPRYLQJWKHWZR$1EROWVWKDWIDVWHQWKHVWUDSDQGVWXGWRWKHERWWRPRIWKHUXGGHU7KHORZHU
VWXGFDQEHSXOOHGIUHHDQGWKHWDEFDQEHUHPRYHG

5XGGHU7ULP&RQWUROV

7KHUXGGHUWULPFRQWUROVLQWKHFRFNSLWDUHVKRZQLQ)LJXUH

5XGGHU WULP LV FRQWUROOHG E\ D KRUL]RQWDO KDQGZKHHO RQ WKH OHIWKDQG ZDOO RI WKH FRFNSLW  7KLV
KDQGZKHHOLVSXVKURGFRQQHFWHGWRD4XDGUD6WDWVHFWRUOHYHULQWKHDIWIXVHODJH7KH4XDGUD6WDWLV
D SRVLWLRQLQJ VHFWRU WKDW SURYLGHV D IULFWLRQ ORFN DW WKH SRVLWLRQ VHOHFWHG E\ WKH FRQWURO OHYHU  7KH
4XDGUD6WDWLVVKRZQLQ)LJXUH

7KH4XDGUD6WDWRXWSXWDUPLVFRQQHFWHGYLDSXVKURGVWRWKHLGOHUEORFNWKDWLVSRVLWLRQHGRQWKHULJKW
KDQGIDFHRIWKHILQ¶VUHDUVSDUMXVWEHORZWKHKRUL]RQWDOVWDELOL]HU'XDOURGVDWWDFKHGWRWKHDUPVRI
WKLVLGOHUSURJUHVVDIWWRWKHLUDWWDFKPHQWVWRWKHUXGGHUWDE
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


)8(/6<67(0

)XHO7DQNV

7KHIXHOWDQNVDUHRIWKHZHWZLQJW\SHZLWKLQWHUPHGLDWHULEVVHUYLQJDVEDIIOHV7KHUHLVRQHWDQNLQ
HDFKZLQJ7KHLQERDUGHQGRIWKHIXHOWDQNLVFORVHGE\WKHVROLGULEDWWKHZLQJURRW


 '$1*(5
 7KHXVHRIRSHQIODPHQRQH[SORVLRQSURRIOLJKWLQJRUSRZHUWRROV
 LQVLGHWKHIXHOWDQNVRUQHDUIXHOWDQNRSHQLQJVFDQFDXVHILUHH[SORVLRQ
 RUERWK:KHQXVLQJDIODVKOLJKWRUH[SORVLRQSURRIOLJKWLQJ'2127
 6:,7&+7+(/,*+721252)):+,/(,16,'(7+(7$1.



)XHO7DQN6HDOLQJ

7KHIXHOWDQNVDUHVHDOHGZLWK3URGXFWV5HVHDUFK35$ZKLFKLVEUXVKHGRQDQG35%
ZKLFKLVDWKLFNHUSXWW\OLNHPDWHULDOIRUVHDOLQJFRUQHUVRUODUJHFUDFNV $OWHUQDWHVHDOHULV0RUWRQ
$HURVSDFH0&FODVV$RU% 6HDOLQJEHWZHHQPDWLQJSDUWVLVGRQHGXULQJDVVHPEO\DQGILQDO
FRDWLQJLVGRQHWKURXJKWKHQLQHLQVSHFWLRQRSHQLQJVLQWKHWRSRIWKHWDQN

,IDOHDNGHYHORSVLQVHUYLFHUHPRYHWKHLQVSHFWLRQSODWHVRQWKHORZHUVLGHRIWKHZLQJOHDGLQJHGJH
DQGZLWKDIODVKOLJKWDQGPLUURUGHWHUPLQHZKLFKDUHDRIWKHWDQNVDSSHDUVWREHOHDNLQJ7KLVLV
GLIILFXOWDQGVRPHWLPHVLWLVQHFHVVDU\WRUHVHDODODUJHDUHDRIWKHWDQNWRPDNHVXUHWKHOHDNLVFRYHUHG

5HPRYHWKHIXHOOLQHIURPWKHWDQNWREHGUDLQHGDQGFDSLWRIIVRWKDWERWKWDQNVZLOOQRWQHHGWREH
GUDLQHG7KHQGUDLQWKHIXHOLQWRFOHDQFRQWDLQHUVE\UHPRYLQJWKHGUDLQYDOYHIURPWKHWDQNIODQJH
5HPRYH WKH LQVSHFWLRQ SODWH RQ WRS RI WKH IXHO WDQN QHDUHVW WKH OHDN DUHD  7KHUH DUH SODWHQXWV
1$6$ ULYHWHGWRWKHIXHOWDQNWRSWRIDFLOLWDWHSODWHUHPRYDO6RPHWLPHVLWLVQHFHVVDU\WR
GULOORXWWKHVFUHZVLQWKHSODWH

,QVSHFWLQVLGHWKHIXHOWDQNZLWKDIODVKOLJKWDQGPLUURURUDGURSOLJKW2EVHUYHWKHZDUQLQJDERXW
OLJKWVLQWKHWDQNV$VSDUNIURPWKHVZLWFKKDVFDXVHGDQH[SORVLRQDQGLQMXU\LQDSDVWLQVWDQFH/RRN
IRUDYRLGRUEXEEOHRIDLUWKDWFRXOGKDYHSRSSHGOHDYLQJDSLQKROHOHDN,IQRVXVSLFLRXVDUHDVDUH
IRXQGSUHSDUHWRUHVHDOWKHJHQHUDODUHDRIWKHOHDN

&OHDQWKHDUHDWREHUHVHDOHGZLWKDQLQKLELWHGDONDOLQHFOHDQHUVXFKDV0(.ZLWKDFOHDQZKLWHUDJ
$SURJUHVVLYHFOHDQLQJSURFHGXUHVKRXOGEHXVHG:DVKRQHVPDOODUHDDWDWLPHWKHQGU\ZLWKDFOHDQ
FORWK EHIRUH VROYHQW HYDSRUDWHV WR SUHYHQW UHGHSRVLWLRQ RI RLO RU IXHO WUDFHV  7R PDLQWDLQ D FOHDQ
VROYHQWVXSSO\DOZD\VSRXUWKHVROYHQWRQWKHZDVKLQJFORWK
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


7KHVHDOHUNLWFRQVLVWVRIWKHSURSHUSURSRUWLRQRIEDVHFRPSRXQGDQGDFFHOHUDWRU7KHDFFHOHUDWRU
FRQWDLQVVRPHYRODWLOHPDWHULDOVZKLFKXVXDOO\FRPHWRWKHVXUIDFHVRLWLVH[WUHPHO\LPSRUWDQWWRVWLU
WKHDFFHOHUDWRUWKRURXJKO\LQLWVFRQWDLQHUXQWLODQHYHQFRQVLVWHQF\LVREWDLQHG2QFHWKHDFFHOHUDWRU
LVDGGHGWRWKHEDVHPDWHULDOWKHSRWOLIHLVOLPLWHGWRWZRKRXUVDWƒ)UHODWLYHKXPLGLW\)RU
HYHU\ ƒ) ULVH LQ WHPSHUDWXUH DSSOLFDWLRQ OLIH LV UHGXFHG E\ KDOI DQG IRU HYHU\ ƒ) GURS LW LV
GRXEOHG  +LJK KXPLGLW\ DW WKH WLPH RI PL[LQJ VKRUWHQV DSSOLFDWLRQ OLIH  )RU WKLV UHDVRQ LW LV
VXJJHVWHGWKDWRQO\RIWKHDFFHOHUDWRULVPL[HGZLWKRIWKHEDVHPDWHULDOVRWKDWLIWKHILUVW
DWWHPSWWRVHDOWKHWDQNLVXQVXFFHVVIXOWKHUHZLOOEHRQHPRUHPL[RIVHDOHUOHIWIRUDQRWKHUDWWHPSW
EHIRUHDQHZFDQKDVWREHRSHQHG,IWKLVDSSURDFKLVWDNHQEHVXUHWKHDFFHOHUDWRULVVHDOHGLQDQ
DLUWLJKWFRQWDLQHUDVZHOODVWKHEDVHPDWHULDODQGWKDWFDUHLVWDNHQWRDVVXUHWKDWH[DFWO\RIHDFK
FRPSRQHQWLVPL[HGWRJHWKHU

6ORZO\VWLUWKHDFFHOHUDWRULQWRWKHEDVHFRPSRXQGDQGWKRURXJKO\PL[DSSUR[LPDWHO\WRPLQXWHV
%HVXUHWRVFUDSHWKHVLGHVDQGERWWRPRIWKHFRQWDLQHULQRUGHUWRLQFOXGHDOOWKHFRPSRXQGLQWKH
PL[WXUH DQG WR DVVXUH XQLIRUP EOHQGLQJ  6FUDS PL[LQJ SDGGOH SHULRGLFDOO\ WR UHPRYH XQPL[HG
FRPSRXQG6ORZPL[LQJE\KDQGLVUHFRPPHQGHG

2EWDLQDVPDOOSDLQWEUXVKDSSUR[LPDWHO\WRZLGHDQGWULPWKHEULVWOHVWRDSSUR[LPDWHO\
ORQJ WR LQFUHDVH EUXVK VWLIIQHVV  %UXVK WKH WKRURXJKO\ PL[HG VHDOLQJ FRPSRXQG RYHU WKH FOHDQHG
VXVSHFWHGOHDNDUHDVLQJHQHURXVDPRXQWVEXWIHDWKHURXWDQ\UXQVWKDWPLJKWRFFXU:DWFKIRUEXEEOH
DQGUHVHDODQ\SLQKROHV

,QVSHFW\RXUZRUNFDUHIXOO\DVIDLOXUHPHDQVGRLQJWKHMREDOORYHUDJDLQ6FUDSHRIIWKHROGVHDOHU
IURPWKHIXHOWDQNFRYHUSODWHDQGPDWLQJVXUIDFHEHLQJFDUHIXOQRWWRJHWDQ\VKDYLQJVLQVLGHWKHWDQN
6HDOERWKWKHFRYHUSODWHDQGWKHPDWLQJVXUIDFHDQGLQVWDOOFRYHUSODWH:KHUHWKHVHDOHULVVTXHH]HG
RXWDURXQGWKHSHULPHWHURIWKHSODWHXVH\RXUILQJHUWRPDNHDVPRRWKILOOHW

6HDOHULVDOVRDYDLODEOHLQR]6HPNLWV7KHVHDUHFRQYHQLHQWDVWKHEDVHDQGDFFHOHUDWRUDUHSUH
PHDVXUHGDQGORDGHGLQWKHPL[LQJWXEH)ROORZWKHGLUHFWLRQVRQWKHVHPNLWSDFNDJHIRUPL[LQJ

$OORZWKHVHDOHUWRGU\DWOHDVWKRXUV RYHUQLJKWLVSUHIHUDEOH EHIRUHIXHOLQJWKHWDQN&KHFNFDUHIXOO\
IRUOHDNVEHIRUHFRQQHFWLQJWKHIXHOOLQHWRWKHRWKHUWDQN,IWKHWDQNVWLOOOHDNVUHSHDWWKHHQWLUHSURFHVV
XQWLOWKHOHDNLVVHDOHG


)XHO7DQN6HQGHUV

7KHIXHOWDQNVHQGLQJXQLWVDUHVKRZQVFKHPDWLFDOO\LQ)LJXUH

(DFK RI WKH IXHO WDQNV KDV WZR IXHOTXDQWLW\ VHQGLQJ HOHPHQWV  7KHVH WZR VHQGLQJ HOHPHQWV DUH
FRQQHFWHGLQVHULHVHOHFWULFDOO\7KHRXWERDUGVHQGLQJHOHPHQWLVDFWLYHLQVHQVLQJIXHOOHYHOZKHQ
WKHIXHOOHYHOLVLQWKHXSSHUWKLUGRIWKHWDQN7KHLQERDUGVHQGLQJHOHPHQWLVDFWLYHZKHQWKHIXHO
OHYHOLVLQWKHORZHUWKLUGRIWKHWDQN%RWKRIWKHHOHPHQWVDUHDFWLYHZKHQWKHIXHOOHYHOLVLQWKH
PLGUDQJH
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


7KHLQERDUGVHQGHULVLQVXODWHGIURPJURXQGE\WKHWHQLQVXODWLQJEXVKLQJVWKDWDUHXVHGRQERWKVLGHV
RIWKHILYHKROHVLQLWVIODQJH,WKDVWZRZLUHVDWWDFKHG2QHRIWKHZLUHVH[LWVWKHIXHOWDQNZDOO
WKURXJKDEDQDQDMDFNHQURXWHWRWKHRXWERDUGVHQGHU7KHRWKHUZLUHH[LWVWKHIXHOWDQNZDOOWKURXJK
DEDQDQDMDFNHQURXWHWRWKHIXHOJDXJH

7KH RXWERDUG VHQGHU LV JURXQGHG WKURXJK LWV PRXQWLQJ EROWV  7KH ZLUH DWWDFKHG WR LWV FHQWHU SRVW
FRQQHFWVLWWKURXJKWKHEDQDQDMDFNWRWKHLQERDUGVHQGHU

7KHLQERDUGWDQNVHQGHULVSQDQGWKHRXWERDUGVHQGHULVSQ&7KHVHQGHULVDWWDFKHG
ZLWKILYH[VWDLQOHVVVWHHOVFUHZVEXVKLQJVDQG$1&QXWV%RWKVHQGHUV
KDYHSQ7HIORQZDVKHUVXQGHUWKHEROWKHDGIRUVHDOLQJSXUSRVHV

,IDVHQGHULVQRWZRUNLQJSURSHUO\WKHSURFHGXUHLVWRUHPRYHWKHLQVSHFWLRQFRYHUIURPWKHIXHOWDQN
WRSMXVWIRUZDUGRIWKHILYHVHQGHUDWWDFKEROWVDQGEHIRUHUHPRYLQJWKHVHQGHUILUVWSXVKWKHEDQDQD
SOXJILUPO\LQWRWKHMDFNWREHVXUHSURSHUFRQQHFWLRQKDVSUHYLRXVO\EHHQPDGH,IWKLVKDVQRHIIHFW
SXOORXWWKHEDQDQDSOXJDQGFRQQHFWWRDQ2KPPHWHUZLWKWKHRWKHUOHDGJURXQGHGWRWKHIODQJHRI
WKHVHQGHU:LWKWKHIORDWDUPDOOWKHZD\GRZQWKH2KPPHWHUVKRXOGUHDG]HURDQGWKHDUPDOOWKH
ZD\XSWKH2KPPHWHUVKRXOGUHDG2KPV&\FOHWKHDUPDQGWKHQHHGOHVKRXOGQRWKDYHDQ
HUUDWLFPRYHPHQW,IDOOLV2.WKHVHQGHUGRHVQRWKDYHWREHUHSODFHG,IWKHUHLVVWLOOLQGLFDWLRQRI
DIDXOW\VHQGHUUHPRYHWKHILYHVFUHZVDWWDFKLQJLWWRWKHWDQNWRSEHLQJFDUHIXOQRWWRGDPDJHWKH
7HIORQZDVKHUVXQGHUWKHKHDGRIHDFKVFUHZ7KHIXHOWDQNVKRXOGEHGUDLQHGEHIRUHWKHVHQGHULV
UHSODFHG7KHILYHEXVKLQJZLOOSUREDEO\EHKHOGLQSODFHE\WKHWDQNVHDOLQJFRPSRXQGLIFDUHLV
WDNHQZKHQUHPRYLQJWKHVHQGHU3XOOWKHEDQDQDSOXJVIURPWKHMDFNVDQGUHPRYHWKHVHQGHU

:KHQWKHVHQGHULVEHLQJUHSODFHGWKHIORDWDWWKHHQGRIWKHIORDWDUPVKRXOGMXVWWRXFKWKHERWWRP
RIWKHWDQNZKHQWKHDUPLVDWWKHORZHUHQGRILWVVWURNH,WVKRXOGDOPRVWWRXFKWKHWRSRIWKHWDQNDW
WKHXSSHUHQGRIWKHVWURNH,ILWZLOOQRWTXLWHWRXFKWKHWDQNERWWRPRUWRXFKHVWRRVRRQEHQGWKHDUP
JHQWO\E\KDQGWRDFKLHYHWKHGHVLUHGSRVLWLRQ

%HIRUHUHLQVWDOOLQJWKHLQVSHFWLRQSODWHRQWKHIXHOWDQNWRSPRYHWKHIORDWDUPWKURXJKWKHIXOOVWURNH
ZLWKWKHEDWWHU\VZLWFK³2Q´WRVHHWKDWWKHVHQGHUDQGJDXJHDUHZRUNLQJSURSHUO\6HDOWKHLQVSHFWLRQ
SODWHSHULQVWUXFWLRQLQ³)XHO7DQN´DQGUHLQVWDOO


)XHO7DQN5HFHLYHU

7KHORFDWLRQRIWKHIXHOWDQNUHFHLYHULVVKRZQVFKHPDWLFDOO\LQ)LJXUH7KHUHFHLYHULVWKHFLUFXLW
ERDUGDWWDFKHGWRWKHEDFNRIWKHJDXJH

7KHIXHOWDQNUHFHLYHULVSQ7KHUHLVDQDGMXVWPHQWVFUHZIRUWKH(VLGHRIWKHQHHGOHUDQJH
RQWKHFHQWHUORZHUVLGHRIWKHLQVWUXPHQWIDFH7KHWULPPHUVFUHZIRUWKH)VLGHRIWKHQHHGOHUDQJH
LVRQWKHFLUFXLWERDUGDWWKHHQGRIWKHLQVWUXPHQWEHKLQGWKHSDQHODQGVLQFHWKHVORWWHGHQGRIWKH
WULPPHUVFUHZLVWRZDUGVWKHDLUFUDIWFHQWHUOLQHLWLVSRVVLEOHWRUHDFKXQGHUWKHSDQHODQGZLWKDVPDOO
VFUHZGULYHUUHDFKWKH)WULPPHUVFUHZ %HVXUHSRZHULVRII 
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


7RFKHFNWKHUHFHLYHUVHWWLQJVGUDLQ DOOWKHIXHO IURPWKHDLUFUDIWDQGMDFNWKH WDLOZKHHOXSRQWR D
SODWIRUPDQGOHYHOWKHDLUFUDIW%HVXUHSDUNLQJEUDNHLV21DVWKHWDLOLVTXLWHKLJKLQWKLVSRVLWLRQ
/HYHOWKHDLUFUDIWODWHUDOO\E\OHWWLQJDLURXWRIWKHPDLQWLUHRQWKHKLJKVLGH

5HPRYHWKH/+IXHOOLQHIURPWKHWDQNDQGFDSWKH/+WDQNRXWOHWDQGSOXJWKHOLQHWRLVRODWHWKHWZR
WDQNV6HWWKHQHHGOHRQ(ZLWKWKHDGMXVWVFUHZRQWKHIDFHRIWKHUHFHLYHU*UDGXDOO\DGGIXHOWRWKH
5+ZLQJWDQNZLWKWKHEDWWHU\VZLWFK21DQGWKHIXHOUHFHLYHUVZLWFKRQ5+7KHEDWWHU\VKRXOGEH
IXOO\FKDUJHGIRUWKLVFKHFN

7KHUHFHLYHUQHHGOHVKRXOGVWDUWWRPRYHYHU\VOLJKWO\RIIWKH(PDUNDIWHUJDOORQVRIIXHOKDYHHQWHUHG
WKHWDQN$GGIXHOWRWKHOHIWWDQN:KHQDSSUR[LPDWHO\JDOORQVKDYHHQWHUHGWKHWDQNWKHQHHGOHV
VKRXOGPRYHVOLJKWO\RIIWKH(PDUN7RFKHFNWKH)PDUNORZHUWKHWDLOZKHHOWRWKHJURXQGDQGILOO
ERWKWDQNVFRPSOHWHO\IXOO$GMXVWWKHWULPPHUVFUHZEHKLQGWKHSDQHOXQWLOERWKWDQNVVKRZ)'XH
WRVOLJKWGLIIHUHQFHVLQUHVLVWDQFHLQWKHVHQGHUVRQHWDQNPD\VKRZ)ZLWKWKHQHHGOHDWWKHERWWRP
VLGHRIWKH)PDUNDQGWKHRWKHUWDQNDWWKHWRSVLGH

:KHQWKHFDOLEUDWLRQLVFRPSOHWHUHFRQQHFWWKH5+IXHOOLQHWRWKHWDQN%HVXUHDQGDGGDLUWRDQ\
WLUHVWKDWDLUZDVOHWRXWRI


)XHO6\VWHP'UDLQV

5HIHUWR)LJXUHIRUWKHORFDWLRQRIWKHIXHOWDQNDQGKHDGHUWDQNGUDLQV7KHVHGUDLQVDUHGHVLJQDWHG
IRUGDLO\DFWLYDWLRQGXULQJWKHSLORW¶VZDONDURXQGLQVSHFWLRQDVVKRZQLQWKH$,53/$1()/,*+7
0$18$/

)XHOV\VWHPGUDLQVDQGRWKHUGUDLQVRQWKHHQJLQHDUHVKRZQLQ)LJXUH

7KHZLQJWDQNVKDYH&XUWLV&&$GUDLQYDOYHV7KHKHDGHUWDQNXVHVWKH&XUWLVGUDLQ
YDOYH,IWKHYDOYHVOHDNUHPRYHWKHPDQGFKHFNWKHVHDOVIRUQLFNVRUORRNIRUWUDVKEHWZHHQWKH
VHDODQGWKHYDOYHVHDW$SSO\VRPH+3HUPDWH[RUHTXLYDOHQWWRWKHWKUHDGVRIDOOGUDLQVEHIRUH
WKH\DUHUHLQVWDOOHG,IWKHVHDOVQHHGUHSODFLQJUHSODFHWKHYDOYH

7KHKHDGHUWDQNGUDLQKDVDWHQGHQF\WRIUHH]HXSGXULQJIHUWLOL]HURSHUDWLRQVLILWLVQRWDFWLYDWHGGDLO\
,IWKLV VKRXOGKDSSHQUHSODFHLWLPPHGLDWHO\DVWKLVLV WKHPRVW LPSRUWDQW GUDLQ LQ WKHV\VWHP %H
FDUHIXOQRWWRFURVVWKUHDGGUDLQVZKHQUHSODFLQJ


)XHO6\VWHP6FUHHQVDQG)LOWHUV

(DFKZLQJWDQNKDVDILQJHUVWUDLQHUVROGHUHGWRWKHGHJUHHHOERZDWWKHWDQNRXWOHW7KLVILWWLQJ
VKRXOGEHUHPRYHGDQGWKHVFUHHQFOHDQHGDWOHDVWRQFHD\HDUGXULQJWKHDQQXDOLQVSHFWLRQ6HH6HFWLRQ
)8(/6<67(0IRULQVWUXFWLRQVRQFKDQJLQJWKHFDUWULGJHLQWKHILUHZDOOPRXQWHGIXHOILOWHU
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


5HPRYHWKHILQJHUVWUDLQHUVFUHHQILWWLQJIURPHDFKZLQJWDQNDVIROORZV

 'HIXHOERWKZLQJWDQNVDVGHVFULEHGLQWKHIXHOWDQNVHDOLQJVHFWLRQ

 5HPRYHWKHKRVHHQGILWWLQJIURPWKHHOERZILWWLQJWKDWHQWHUVWKHIXHOFHOOWKURXJKWKH
LQERDUGULERIWKHZLQJ

  5HPRYHWKHHOERZILWWLQJIURPWKHWDQN7KHVWUDLQHUVFUHHQLVSDUWRIWKHHOERZILWWLQJ

$IWHULQVSHFWLRQDQGFOHDQLQJWKHVWUDLQHUDQGLWVILWWLQJVPD\EHUHSODFHGE\UHYHUVLQJWKHVWHSVVKRZQ
DERYH  7KH WKUHDGV RI WKH HOERZ ILWWLQJ VKRXOG EH FOHDQHG DQG UHFRDWHG ZLWK 5HFWRU6HDO  RU
HTXLYDOHQWIXHOUHVLVWDQWSLSHWKUHDGVHDOHU

7KH ILUHZDOO IXHO ILOWHU LV VKRZQ LQ )LJXUH   7KH ILOWHU FDQ EH UHSODFHG E\ IROORZLQJ WKHVH
SURFHGXUHV

  5HPRYHVDIHW\ZLUHDQGORRVHQWKHORQJEROWRQWRSRIWKHILOWHUEDVHWKDWVHFXUHVWKH
FDUWULGJHDQGWKHFDQLVWHUFRYHUWRWKHILOWHUEDVH

  &DUHIXOO\ORZHUWKHFDQLVWHUDQGILOWHUSURWHFWLQJWKHZDVKHUVJDVNHWVDQGVHDOV

  ,QVHUWWKHQHZILOWHUDQGWKHQHZ2ULQJLQWRWKHFDQLVWHU

  $IWHULQVSHFWLQJWKHJDVNHWVDQGVHDOVIRUFRQGLWLRQUHDWWDFKWKHILOWHUDQGWKHFDQLVWHU
FRYHUWRWKHILOWHUEDVH

  7RUTXHWKHORQJEROWWRWROEIW

  5XQWKHHOHFWULFERRVWSXPSWRSUHVVXUL]HWKHILOWHU&KHFNIRUOHDNV

  5HSODFHVDIHW\ZLUHWKDWVHFXUHVWKHORQJEROW

  7KH ILUHZDOO PRXQWHG IXHO ILOWHU PD\ EH D )UDP )63/0 RU DQ $LU 7UDFWRU SQ
IXHOILOWHU%RWKIXHOILOWHUVXVHWKH$LU7UDFWRUSQIXHOILOWHUHOHPHQW
,QVSHFWLRQDQGPDLQWHQDQFHSURFHGXUHVDUHDOPRVWLGHQWLFDO6HH6/DQG$
IRUPRUHGHWDLOV


$LUIUDPH)XHO3XPS

7KHDLUIUDPHSXPSKDVDSUHVVXUHDGMXVWPHQWWKDWKDVEHHQVHWDWWKHIDFWRU\IRUDSSUR[LPDWHO\
SVLZLWKWKHHQJLQHRSHUDWLQJDWSRZHU

,IDQHZDLUIUDPHSXPSLVLQVWDOOHGDQGLIDQHJDWLYHSUHVVXUHLVUHDGRQVWDUWXSLWLVDVLJQWKDWWKH
DLUIUDPHSXPSLVQRWVHWXSIRUSURSHUURWDWLRQDQGWKHERG\RIWKHSXPSFDQEHUHPRYHGDQGURWDWHG
(WRREWDLQDSRVLWLYHUHDGLQJ
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


7KHHQJLQHPDQXIDFWXUHUHTXLUHVWKDWDPLQLPXPSUHVVXUHRISVLLVEHLQJGHOLYHUHGWRWKHIXHOFRQWURO
DWDOOWLPHVZLWKDPD[LPXPSUHVVXUHRISVL$QHJDWLYHSUHVVXUHVZLWFKDQGZDUQOLJKWKDYHEHHQ
LQVWDOOHGRQWKHRXWOHWVLGHRIWKHIXHOILOWHUVRWKDWLIWKHIXHOILOWHUZDUQOLJKWFRPHVRQWKHHOHFWULFIXHO
ERRVWSXPSVKRXOGEHWXUQHGRQ7KHSLORWVKRXOGODQGDVVRRQDVSRVVLEOHDQGLQYHVWLJDWH3RVVLEOH
FDXVHZRXOGEHDFRQWDPLQDWHGIXHOILOWHURUORRVHIXHOOLQH

)86(/$*(

)XVHODJH5HPRYDEOH6NLQV

'HWDLOVRIWKHIXVHODJHUHPRYDEOHVNLQVDUHVKRZQLQ)LJXUH

7KHVLGHVNLQVRIWKHIXVHODJHDUHDWWDFKHGWRWKHIL[HGVNLQVZLWK&DPORFVWXGVRIYDULRXVOHQJWKV
7KHVWXG KDVDEDVLFSDUW QXPEHURIDQGWKHGDVKQXPEHUGHVLJQDWHVWKHOHQJWK 7KHPRVW
FRPPRQVWXGLVZLWKWKHQH[WPRVWFRPPRQD$OOVWXGVKDYHWKHGDVKQXPEHUVRQ
WKHKHDG6WXGOHQJWKVXVHGDUHWKURXJK6WXGLQVWDOODWLRQUHTXLUHVD1JURPPHWDQGD
5*VQDSULQJ,QVWDOODWLRQSOLHUVDUHQHHGHGIRUVWXGLQVWDOODWLRQRUUHPRYDO$OO&DPORFUHFHSWDFOHV
DUHSQ5

7KHVLGHVNLQVFDQEHHDVLO\UHPRYHG7KHVLGHVNLQVKDYHDWKLQVWULSRIQHRSUHQHWRSUHYHQWFKDILQJ
7KLVQHRSUHQHLVWKLFNE\ZLGHFRPHVLQIWUROOVKDVSUHVVXUHVHQVLWLYHDGKHVLYHEDFNLQJ
DQGLVSQ16

$SXQFKLVPDGHRIDSLHFHRI2'WXELQJDQGRQHHQGVKDUSHQHGRQDJULQGHU$WHDFK&DPORF
SRVLWLRQWKHQHRSUHQHLVPDUNHGDQGDKROHLVSXQFKHG

7KHVLGHVNLQVDUHVKHDUHGWRVL]HEXWWKH&DPORFKROHVZLOOUHTXLUHGULOOLQJRQLQVWDOODWLRQ7KHROG
VNLQ PD\ EHXVHGIRUD SDWWHUQRULILWLV GDPDJHGDVNWKH IDFWRU\WR SURYLGHDKROH ILQGHU 8VHD
&DPORFKROHVDZGLDPHWHUWRGULOOWKHVLGHVNLQVWRPDWFKWKHUHFHSWDFOHV7KHVHKROHVDZVKDYH
D1RSLORW

$OWHUQDWHSDUWQXPEHUVIRU&DPORFIDVWHQHUVDUH

 &DPORF 0RQDGQRFN 'HVFULSWLRQ

 5  5HFHSWDFOH
 1  *URPPHW
 5*  6QDS5LQJ
   *URPPHW
       6WXG6ORWWHG
       6WXG&URVV3RLQW
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\

)XVHODJH)L[HG6NLQV

'HWDLOVRIWKHXSSHUIXVHODJHIL[HGVNLQVDUHVKRZQLQ)LJXUH'HWDLOVRIWKHORZHUIXVHODJHIL[HG
VNLQVDUHVKRZQLQ)LJXUH6HHWKHSDUWVPDQXDOIRUUHSODFHPHQWSDUWQXPEHUVDQGJUHDWHUGHWDLO

7KHIL[HGVNLQVDUHDWWDFKHGZLWKPDFKLQHVFUHZVDQGQXWV1XWVLQWKHORZHUVNLQVDUHVWDLQOHVV
06&DQGLQWKHXSSHUIXVHODJHDUHDVDUH$17KHƒFRXQWHUVXQNPDFKLQHVFUHZV
DUHSQIRUWKH[VL]HIRUWKH[VL]H7KH7UXVVKHDGPDFKLQHVFUHZV
DUHSQIRUWKH[ORQJIRUORQJIRUORQJDQGIRUWKHORQJ

7KHORQJORZHUVNLQLVDWWDFKHGWRWKHVNLQXQGHUWKHFRFNSLWIORRUZLWKULYHWVEXWLILWLVGHVLUHGWR
UHPRYHRQHVNLQEXWQRWWKHRWKHUWKHULYHWVFDQEHGULOOHGRXWDQGUHSODFHGZLWKRUVFUHZV
DQGVWDLQOHVVQXWV,IWKHEDJJDJHIORRULVWREHUHPRYHGLWLVQHFHVVDU\WRUHPRYHWKHORQJORZHUVNLQ
LQRUGHUWRUHDFKWKHQXWV

'XULQJDQQXDOLQVSHFWLRQVDOOVFUHZVDWWDFKLQJWKHIL[HGVNLQVVKRXOGEHFKHFNHGWRVHHLIWKH\DUH
WLJKW

7KH&DPORFUHFHSWDFOHVDUHDWWDFKHGWRDOOORZHUVNLQVDQGVWULQJHUVEHIRUHWKHVHSDUWVDUHDWWDFKHGWR
WKHDLUFUDIW,IDVNLQRUVWULQJHULVUHSODFHGEHVXUHWRLQVWDOOWKHVLGHVNLQDQGDWWDFKLWWRWKHSDUWEHLQJ
UHSODFHGVRWKDWLWZLOOEHSURSHUW\SRVLWLRQHGIRUWKHVLGHVNLQVWRILWDIWHULQVWDOODWLRQWRWKHDLUIUDPH

)XVHODJH&RFNSLW6NLQV

7KHFRFNSLWPHWDOVNLQVDUHULYHWHGWRWKHIORRUDQGWRWKHVXSSRUWDQJOHVZLWK06$'ULYHWV
$WWDFKPHQWVWRWKHGRRUIUDPHVDUH&5&KHUU\ULYHWV7KHFRFNSLWVNLQVPD\EHUHPRYHGE\
GULOOLQJRXWWKHULYHWVZKHUHQHFHVVDU\DQGLVQRWDGLIILFXOWRSHUDWLRQ7KHKRSSHUVKRXOGEHUHPRYHG
LQRUGHUWRUHPRYHWKHFRFNSLWIORRUKRZHYHU

7KHXSSHUDIWVLGHRIWKHKRSSHUWDQNIRUPVWKHIRUZDUGZDOORIWKHFRFNSLW7KLVSRUWLRQRIWKHFRFNSLW
HQFORVXUHLVLQWHJUDOZLWKWKHKRSSHUWDQN0DLQWHQDQFHFRQFHUQLQJWKHKRSSHULVDGGUHVVHGLQ6HFWLRQ
+233(56

)XVHODJH)UDPH

7KHIXVHODJHIUDPHLVPDGHRI1WXELQJ,WPD\EHUHSDLUHGLQFRQYHQWLRQDOZD\VDVGHVFULEHGLQ
)$$$&$$OOILWWLQJVDUHDOVRRI21PDWHULDO7KHUHSDLUHGDUHDVKRXOGEHVDQGHGDQG
EXUQHGSDLQWVKRXOGEHUHPRYHGWRDSRLQWZKHUHLWFDQEHIHDWKHUHGJHGE\VDQGLQJ$JRRGHWFKLQJ
VROXWLRQ ZRXOG EH D PL[WXUH RI  IOXLG R] RI FRQFHQWUDWHG SKRVSKRULF DFLG LQ RQH JDOORQ RI
LVRSURSDQRO LVRSURS\ODOFRKRO ,IUHODWLYHKXPLGLW\LVH[WUHPHO\ORZDGGFXSRIGLVWLOOHGZDWHU
WRWKHVROXWLRQ)DFWRU\SULPHULVSLJPHQWHG\HOORZSULPHU
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


:LQGVKLHOG

'HWDLOVRIWKHZLQGVKLHOGDUHVKRZQLQ)LJXUH

)RUWKHSOH[LJODVVSRUWLRQRIWKHZLQGVKLHOGEHFDUHIXOWRDOZD\VXVHDFOHDQUDJDQGSODVWLFZLQGVKLHOG
FOHDQHUWRSUHYHQWVFUDWFKHV,IDFUDFNLVIRXQGQHDURQHRIWKHDWWDFKLQJVFUHZVVWRSGULOOZLWKDQR
GULOOELW

7KHVDIHW\JODVVFHQWHUZLQGVKLHOGFDQEHFOHDQHGZLWKDVRIWUDJDQGDQ\JRRGJODVVFOHDQHU

7KHZLQGVKLHOGLVVHDOHGDURXQGWKHXSSHUDQGORZHUHGJHXQGHUWKHPHWDOIODQJHVZLWK0$XWRPRWLYH
:LQGVKLHOG6WULS&DXON7KHQWKHHQWLUHSHULPHWHURIWKHZLQGVKLHOGLVVHDOHGZLWK

35$ 6HH)8(/7$1.6LQ6HFWLRQIRUPL[LQJLQVWUXFWLRQV 'ULOOKROHVWKURXJKWKH
FRUQHUZLQGRZVWR PDWFKWKHDOXPLQXPDWWDFKPHQWV7KHQUHPRYHWKHZLQGVKLHOG DQG HQODUJHWKH
KROHVLQWKHFRUQHUZLQGRZVWRWRSUHYHQWWKHDWWDFKVFUHZVIURPRYHUVWUHVVLQJDQGFUDFNLQJWKH
ZLQGVKLHOGDWDQ\ORFDWLRQ
     
7RUHPRYHDQ\RIWKHZLQGVKLHOGVWKHIROORZLQJSURFHGXUHPD\EHIROORZHG

  5HPRYHDOORIWKHDQGVFUHZVWKDWVHFXUHWKHXSSHUDQGORZHUUHWDLQLQJVWULSVRQ
WKHRXWVLGHRIWKHZLQGVKLHOG

  5HPRYHDOORIWKHDQGVFUHZVLQWKHUHWDLQLQJVWULSVRQWKHOHIWKDQGDQGULJKW
KDQGVLGHVRIWKHUHVSHFWLYHSRUWLRQRIWKHZLQGVKLHOGWKDWLVWREHUHPRYHG

  5HPRYH WKH UHWDLQLQJ VWULSV DQG DVVRFLDWHG IDVWHQHUV DQG ILWWLQJV WKDW VXUURXQG WKH
VXEMHFWZLQGVKLHOGSDQHO

  *HQWO\SU\WKHZLQGVKLHOGIUHHIURPWKHVHDOLQJVWULSEHQHDWK3U\JHQWO\DURXQGWKH
SHULPHWHURIWKHSDQHOZLWKDSXWW\NQLIHRURWKHUVXLWDEOHIOH[LEOHZLGHEODGHWRRO

  /LIWWKHZLQGVKLHOGSDQHOIUHHRIWKHDLUSODQH

7KHVHDODQWPD\EHUHPRYHGIURPWKHHGJHVRIWKHSDQHODQGWKHZLQGVKLHOGUHFHVVLQWKHZLQGVKLHOG
IUDPHE\VFUDSLQJJHQWO\ZLWKDGXOOEODGH7KHSODWHJODVVPD\EHFOHDQHGZLWKWKHXVHRIDFHWRQHRU
PHWK\OHWK\ONHWRQH 0(. 


 &$87,21
 7KHXVHRIVROYHQWVRQWKHSOH[LJODVVSDQHOVZLOO
 GLVWRUWWKHVXUIDFHVDQGUHQGHUWKHPXQXVDEOH

 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


7KHZLQGVKLHOGPD\EHUHLQVWDOOHGE\UHYHUVLQJWKHUHPRYDOVWHSVDERYH8VHSOHQW\RI0VWULS
FDXONRQDVVHPEO\WRSUHYHQWOHDNLQJ$IWHUWKHZLQGVKLHOGLVLQSODFHLWVKRXOGEHUHVHDOHGRQLWV
RXWHUVXUIDFHXVLQJ&RXUWDXOGV$HURVSDFH35$RU%VHDODQW7KHVHDODQWLVFDWDO\]HGZLWK
VXSSOLHGPDWHULDO

7KHEHVWPHWKRGWRDSSO\WKHVHDODQWLVWRPDVNWKHUHWDLQLQJVWULSVILUVWDQGWKHQPDVNWKHZLQGVKLHOG
OHDYLQJRIZLQGVKLHOGVXUIDFHH[SRVHGEHWZHHQWKHWDSHDQGWKHUHWDLQLQJVWULS$SSO\WKHVHDODQW
VSDULQJO\WRWKHH[SRVHGZLQGVKLHOGVXUIDFHWKHQUHPRYHPDVNLQJWDSH

7KHVHDODQWVWDUWVWRFXUHZKHQFDWDO\]HGVRWLPHLVSUHFLRXVZKHQDSSO\LQJVHDODQW7KHVHDODQW
VKRXOGEHDOORZHGDKRXUFXUHEHIRUHVWUHVVLQJ

&DQRS\'RRUV

7KH FDQRS\ GRRUV VHDO DJDLQVW WKH GRRU IUDPH ZLWK  [  SQ 6& QHRSUHQH VSRQJH  7KLV
PDWHULDOKDVD36$EDFNLQJEXWLWLVEHVWWRDSSO\0DGKHVLYHWRWKHGRRUIUDPHLQRUGHUWR
JHWEHWWHUDGKHVLRQ%HFDUHIXOQRWWRVWUHWFKWKHQHRSUHQHVSRQJHGXULQJLQVWDOODWLRQRULWZLOOFRPH
ORRVH

7KHGRRUVKDYHDVOLJKWLQZDUGERZRIWRDOORZIRUGRRUGHIOHFWLRQRXWZDUGDWKLJKVSHHGV7KH
ORZSUHVVXUHDURXQGWKHFDQRS\FDXVHVWKHGRRUVWRERZRXWZDUG7KHGRRUODWFKVKRXOGSURYLGHD
VQXJGRRUILWDQGLILWGRHVQRWDQGWKHZHDWKHUVWULSLVLQJRRGFRQGLWLRQEHQGWKHODWFKDUPWKDWULGHV
RQWKHSODWHGVWULNHUSODWH SQ /+ RU 5+ 

7KHGRRUJODVVLVSQDQGLVDWWDFKHGZLWK[IHOWZLWK36$EDFNLQJ SQ) DURXQG
WKHSHULPHWHU7KHPDFKLQHVFUHZVDURXQGWKHJODVVDUH$1DQGWKHQXWVDUH$1
%HFDUHIXOQRWWRRYHUWLJKWHQWKHVFUHZVRUWKHJODVVZLOOFUDFN

$OO$7VKDYHHPHUJHQF\GRRUUHOHDVHVRQWKHOHIWKDQGGRRU7KHVHGRRUVFDQEHUHPRYHGE\
VXSSRUWLQJWKHRSHQGRRUDQGUHPRYLQJWKHVSULQJSLQV

7KHULJKWKDQGFDQRS\GRRUPD\EHUHPRYHGE\IROORZLQJWKHVHVWHSV

 &ORVHDQGORFNWKHFDQRS\GRRU

 5HPRYHQXWVDQGZDVKHUVIURPKLQJHEROWV

 2SHQWKHGRRUDQGVXSSRUWLWZKLOHUHPRYLQJWKH$1KLQJHEROWV

 5HPRYHWKHGRRUIURPWKHDLUSODQH

7KHGRRUPD\EHUHSODFHGE\UHYHUVLQJWKHRUGHURIWKHVWHSVDERYH
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


6HDW

7KHVHDWLVDWWDFKHGWRWKHVHDWUDLOVZLWKWZR&5)DVSLQV7KHVHDWPD\EHDGMXVWHGE\
UHPRYLQJWKHIDVSLQDQGVOLGLQJWKHVHDWIUDPHXSRUGRZQWKHVHDWUDLO$OLJQWKHKROHLQWKHVOHHYH
ZLWKWKHSUHGULOOHGKROHVLQWKHUDLODQGLQVWDOOWKHIDVSLQV

7KHVHDWFRYHUVZHDUDQGQHHGFKDQJLQJIURPWLPHWRWLPH7KHEDFNFRYHULVSQDQGWKH
ERWWRPFRYHULVSQ,IWKHFURWFKVWUDSLVLQVWDOOHGWKURXJKWKHERWWRPVHDWFRYHU XVHGZLWK
$P6DIH$LUEDJ6\VWHP XVHERWWRPFRYHUSQ7RROVDUHDYDLODEOHIURPWKHIDFWRU\WRPDNH
VHDWFRYHUUHSODFHPHQWHDVLHU

+233(5$1'',63(56$/(48,30(17

+RSSHUWDQN

7KHKRSSHULVPDGHRI'HHUDNDQHDQGLVKHDWFXUHGIRUJUHDWHUFKHPLFDOUHVLVWDQFH+RZHYHULWLVQRW
JRRGSUDFWLFHWROHDYHFKHPLFDOVLQWKHKRSSHURYHUQLJKWLILWLVNQRZQWKDWWKHVHFKHPLFDOVKDYHDQ
DGYHUVHHIIHFWRQILEHUJODVVKRSSHUV

7KHKRSSHUDWWDFKHVWRWKHIXVHODJHIUDPHZLWK$1&$&$DQG&$EROWVDQG06&
QXWV

7KHZLQJFHQWHUVSOLFHILWWLQJVPD\EHLQVSHFWHGE\UHPRYLQJWKHKRSSHU7RUHPRYHWKHKRSSHULWLV
QHFHVVDU\WRUHPRYHWKHZLQGVKLHOG

'HWDLOVRIWKHXSSHUYLHZRIWKHKRSSHUDUHVKRZQLQ)LJXUH7RUHPRYHWKHKRSSHUWKHIROORZLQJ
SURFHGXUHPD\EHIROORZHG

  5HPRYHWKHKRSSHUJDWHER[DQGJDWHER[DGDSWHUSHUSURFHGXUHVVKRZQXQGHU+RSSHU
*DWH%R[DQG$GDSWHU

  5HPRYHWKHIXVHODJHVLGHVNLQVRQERWKVLGHVRIWKHKRSSHUWDQN

  5HPRYHWKHXSSHUHQJLQHFRZOVNLQV

  5HPRYHWKHZLQGVKLHOGDQGUHDUKRSSHUWRIXVHODJHIDLULQJV

  8VLQJDFKDLQKRLVWZLWKD[ERDUGDFURVVWKHERWWRPRIWKHKRSSHUWKURDWDSSO\
VOLJKWXSZDUGSUHVVXUHWRUHOLHYHORDGRQKRSSHUVXSSRUWV
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


  5HPRYHDOOEROWVIURPWKHKRSSHUVXSSRUWVDQGEUDFHVWKDWVHFXUHWKHKRSSHUWDQNWR
WKHIXVHODJHVWUXFWXUH0RYHPHQWRIWKHFKDLQKRLVWZLOOEHQHFHVVDU\WRUHOLHYHWKH
ORDGRQWKHDWWDFKLQJEROWV

  8VHFDXWLRQWRKROGWKHFKDLQLQWKHFHQWHURIWKHRSHQLQJLQWKHWRSRIWKHKRSSHUDQG
JHQWO\OLIWWKHKRSSHUFOHDURIWKHDLUFUDIW

5HSODFHPHQWRIWKHKRSSHULVGRQHE\UHYHUVLQJWKHRUGHURIWKHDERYHSURFHGXUH&OHDQVXUIDFHVDQG
DSSO\QHZVHDODQWZKHUHUHTXLUHG5HSODFHDOOJDVNHWV

+RSSHU*DWH%R[DQG$GDSWHU

'HWDLOVRIWKHKRSSHUJDWHER[DUHVKRZQLQ)LJXUH'HWDLOVRIWKHKRSSHUDGDSWHUDUHVKRZQLQ
)LJXUH

7KHJDWHER[LVSQ 7UDQVODQG DQGWKHDGDSWHULVSQ*DVNHWVIRUERWKVKRXOGEH
UHSODFHGZKHQHLWKHULVUHPRYHG*DVNHWVIRUWKHKRSSHUWRDGDSWHUFRQQHFWLRQDUHSQ HD 
*DVNHWVIRUWKHDGDSWHUWRJDWHER[FRQQHFWLRQDUH7UDQVODQGSQ HD DQG HD %ROWV
IRUDWWDFKLQJWKHDGDSWHUWRWKHKRSSHUVDUHVWDLQOHVVLQFKORQJSQ$%ROWVIRUWKHJDWH
ER[DWWDFKDUHORQJSQ$*DVNHWVVKRXOGEHVHDOHGRQERWKVLGHVZLWK35$RU
%%ROWWRUTXHLVLQFKSRXQGV

7KHJDWHER[DQGDGDSWHUPD\EHUHPRYHGE\XVHRIWKHIROORZLQJSURFHGXUH

 5HPRYHIXVHODJHVLGHVNLQVDGMDFHQWWRWKHKRSSHUWDQN

 5HPRYHWKHJDWHFRQWUROURGDWWDFKPHQWVWRWKHJDWHER[

 5HPRYHDWWDFKPHQWVWRVSUD\SXPSOLQH

 5HPRYHWKHEROWVWKDWDWWDFKWKHJDWHER[WRWKHKRSSHUDGDSWHUDQGORZHUWKHJDWHER[
JHQWO\WRWKHJURXQG

 5HPRYHWKHERWWRPORDGILOODWWDFKPHQWVWRWKHDGDSWHU

 5HPRYHWKHKRVHFRXSOLQJVEHWZHHQWKHKRSSHUYHQWRXWOHWVDQGWKHYHQWVWDFNVRQERWK
VLGHVRIWKHKRSSHUDGDSWHU5HPRYHWKHLQWHUQDOKRSSHUYHQWWXEH

 5HPRYHDOOEROWVWKDWFRQQHFWWKHDGDSWHUWRWKHKRSSHUERWWRPIODQJHVDQGORZHUWKH
DGDSWHUJHQWO\WRWKHJURXQG

7KHJDWHER[DQGDGDSWHUPD\EHUHSODFHGE\UHYHUVLQJWKHUHPRYDOSURFHGXUH&OHDQVXUIDFHVDQG
DSSO\QHZVHDODQWZKHUHUHTXLUHG,QVSHFWJDVNHWVDQGUHSODFHDVQHFHVVDU\
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


+RSSHU/LG

7KHKRSSHUOLGLVPDGHRIILEHUJODVV,WLVVHDOHGZLWKVWULSVRIPHGLXPGHQVLW\QLWULOH[7KHOLG
ZLOOQRWOHDNLIWKHQLWULOHLV LQ JRRGFRQGLWLRQ DQGWKHODWFKDVVHPEO\LVDGMXVWHGWR WHQVLRQWKHOLG
VROLGO\DJDLQVWWKHKRSSHUIODQJHDQGWKHIRXURYHUFHQWHU'HVWDNRFODPSVDUHDGMXVWHGSURSHUO\7KH
QLWULOHVKRXOGEHFKDQJHGDVUHTXLUHGGXULQJWKHVSUD\VHDVRQ

7KHSURFHGXUHIRUVHDWLQJWKHOLGVROLGO\DJDLQVWWKHOLGRSHQLQJLV

  )DEULFDWHDJDJHIURPWKLFN[VWDLQOHVVVWHHOVKHHW

  /RRVHQDOORIWKHOLG¶VKROGGRZQFODPSV

  /XEULFDWHWKHORZHUHQGRIWKHJDJHVWULSZLWKPLQHUDORLODQGSODFHEHWZHHQWKHKRSSHU
GRRUJDVNHWDQGKRSSHUIODQJHORFDWHGEHQHDWKRQHRIWKHFHQWHUKROGGRZQFODPSVRQ
WKHVLGHRSSRVLWHWKHKLQJH

  &ODPSWKHGRRUVKXWDQGSXOOWKHVWULSRXWZDUGIUHHRIWKHJDVNHW7KHUHVLVWDQFHWRSXOO
VKRXOGEHWROE

  $GMXVWWKHSDUWLFXODUKROGGRZQFODPSXQWLOGHVLUHGSXOOLVDFKLHYHG

  0RYHWRRWKHURSSRVLWHFHQWHUKROGGRZQFODPSVRSSRVLWHWKHKLQJHDQGUHSHDWVWHSV
DQG

  0RYHWRRQHRIWKHRXWERDUGKROGGRZQFODPSVRSSRVLWHWKHKLQJHDQGUHSHDWVWHSV
DQG

  0RYHWRWKHRWKHURXWERDUGKROGGRZQFODPSRSSRVLWHWKHKLQJHDQGUHSHDWVWHSVDQG


  0RYHWKHKROGGRZQFODPSQHDUHVWWKHKLQJHDWWKHIRUZDUGHQGRIWKHGRRUDQGUHSHDW
VWHSVDQG

  0RYHWKHKROGGRZQFODPSQHDUHVWWKHKLQJHDWWKHIRUZDUGHQGRIWKHGRRUDQGUHSHDW
VWHSVDQG

  0RYHWR WKHKROGGRZQFODPSIDUWKHVW IURP WKHKLQJHDW WKHDIWHQGRIWKHGRRUDQG
UHSHDWVWHSVDQG

  0RYHWKHKROGGRZQFODPSQHDUHVWWKHKLQJHDWWKHDIWHQGRIWKHGRRUDQGUHSHDWVWHSV
DQG

6KRXOGWKHKRSSHUOLGOHDNWKHJDVNHWDQGPDWLQJVXUIDFHVKRXOGEHH[DPLQHGDWWKHOHDNIRUWHDUVRU
JRXJHV,IWKHJDVNHWLVIDXOW\LWVKRXOGEHUHSODFHG*DXJHVLQWKHPDWLQJIODQJHVRIWKHKRSSHUWDQN
PD\EHWUHDWHGZLWKFRQYHQWLRQDOILEHUJODVVUHSDLU
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


*DWH%R[&RQWURO

'HWDLOVRIWKHJDWHER[FRQWUROVDUHVKRZQLQ)LJXUH

7KHORQJSXVKURGDVVHPEO\DWWDFKHGWRWKHRYHUFHQWHUFRQWUROVRIWKHJDWHER[LVSQDQG
KDVD10%06EHDULQJLQWKHDIWHQGDQGD%XQWLQJ3EURQ]HEXVKLQJLQWKHIRUZDUGHQG
7KHDIWHQGFRQQHFWVWRWKHSQWRUTXHWXEHDVVHPEO\ZKLFKLVVXSSRUWHGRQWKHIXVHODJHORZHU
ORQJHURQVZLWKWZR)DIQLU3%EHDULQJVDWWDFKHGZLWK$1$EROWV

7KHERRWDWWDFKHGWRWKHORZHUIXVHODJHVNLQLVSQZLWKDSQERRWULQJDQG
VFUHZV 06& QXWV  $ SQ  SXVKURG FRQQHFWV WKH ORZHU WRUTXH WXEH WR WKH KRSSHU
KDQGOHLQWKHFRFNSLW7KLVSXVKURGKDVDQDGMXVWDEOH)DIQLU5(0EHDULQJRQWKHORZHUHQGDQGD
)DIQLU5(+EHDULQJLQWKHRWKHUHQG7KHKRSSHUKDQGOH SQ LVVXSSRUWHGRQHDFKHQG
ZLWK)DIQLU3%EHDULQJV%ROWVWKURXJKWKHEHDULQJVDUH$1$

6SUD\/HYHU&RQWUROV

'HWDLOVRIWKHVSUD\OHYHUFRQWUROVDUHVKRZQLQ)LJXUH

7KHSQVSUD\OHYHUDVVHPEO\LVDWWDFKHGWRWKHDIWFRFNSLWZDOODQGKDVD$*0LFUR
FRQWURODWWDFKHGWROLPLWWKHOHYHUWUDYHODQGKHQFHWKHVSUD\SUHVVXUH.HHSWKHWKUHDGHGVFUHZRQWKH
0LFURFRQWUROJUHDVHGDQGPDNHVXUHWKHWDERQWKHVSUD\OHYHUFRQWDFWVRQO\WKHKHDGRIWKH$1$
EROWWKDWLVDWWDFKHGWRWKHORZHUDGMXVWPHQWEORFN

7KHSXVKURGIURPWKHVSUD\OHYHULVSQDQGKDVDQDGMXVWDEOH)DIQLU5(0EHDULQJLQWKH
ORZHUHQGDQGD)DIQLU5(0EHDULQJLQWKHXSSHUHQG

7KHORZHUEHOOFUDQNLVDWWDFKHGWRWKHIXVHODJHIUDPHZLWKD$1$EROW7KHEHOOFUDQNKDVWZR
)DIQLU.3$EHDULQJVZLWKDSQVSDFHUEXVKLQJWKDWDOORZVWKHEROWWREHIXOO\WRUTXHG7KH
EHOOFUDQNLVSQDQGKDVDSQERRWERRWULQJDWWDFKHGWRWKHORZHUIXVHODJH
VNLQZLWKVFUHZV06&QXWV

7KHSXVKURGIURPWKHEHOOFUDQNWRWKHYDOYHLVDSQZKLFKKDVD10%06EHDULQJ
LQHDFKHQG
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


7KHVSUD\OHYHULQWKHFRFNSLWFDQEHDGMXVWHGWRSHUVRQDOSUHIHUHQFHE\DGMXVWLQJWKH6SUD\+DQGOH
$GMXVWPHQW%HDULQJDVVKRZQLQ)LJXUH7KHSURFHGXUHWKDWPD\EHIROORZHGIRUDGMXVWPHQWRIWKH
VSUD\OHYHUSRVLWLRQLQWKHFRFNSLW

 5HPRYHWKHEROWWKDWVHFXUHVWKHDGMXVWPHQWEHDULQJWRWKHEHOOFUDQN

 /RRVHQWKHFKHFNQXWRQWKHVWHPRIWKHEHDULQJ

 6HFXUHWKHEHOOFUDQNWRKROGWKHVSUD\YDOYHLQWKH635$<2))SRVLWLRQ

 6HFXUHWKHFRFNSLWVSUD\KDQGOHLQWKHGHVLUHGSRVLWLRQIRU635$<2))

 $GMXVWWKHEHDULQJWRDOLJQZLWKWKHEROWKROHVLQWKHEHOOFUDQN

 5HSODFHWKHEROWZDVKHU V DQGQXWDQGUHWLJKWHQWKHFKHFNQXW

 &KHFNWUDYHORIVSUD\KDQGOHLQFRFNSLW,IQHFHVVDU\UHSHDWVWHSVWKURXJKIRUEHVW
ILW

6SUD\3XPS

7KHVSUD\SXPSLVDQ$JULQDXWLFVSQDWWDFKHGWRDQ$JULQDXWLFVSQVWUXWDVVHPEO\
ZLWK$1$EROWV

7KHVWDQGDUGIDQLVWKH0LFURQDLU$7ILYHEODGHIDQZKLFKLVXVHGIRUPRGHUDWHVSUD\YROXPH
)RUKLJKYROXPHDSSOLFDWLRQVLQVWDOOWKH$UURZSURS$$77IRXUEODGHIDQ$GGQR]]OHVWR
VSUD\ERRPVDQGFKDQJHWKHWLSVRQWKHVSUD\QR]]OHVWRDODUJHUVL]H)LJXUHVKRZVWKHIDFWRU\
VSUD\QR]]OHFRQILJXUDWLRQ

7KHSURFHGXUHIRUUHPRYLQJWKHVSUD\SXPSIROORZV

  5HPRYHIDQSLWFKFRQWUROFDEOHRUEUDNHFRQWUROFDEOH

  /RRVHQWKHKRVHFRXSOLQJWKDWVHFXUHVWKHSXPSLQOHWOLQHWRWKHSXPS

  /RRVHQWKHKRVHFRXSOLQJWKDWVHFXUHVWKHSXPSRXWOHWSRUWWRWKHVSUD\YDOYHOLQH

  5HOHDVHWKHODWFKHVRQWKH$JULQDXWLFVVWUXWDVVHPEO\DQGUHPRYHWKHSXPSDQGIDQ
 
25

  5HPRYHWKHVWUXWWKURXJKEROWRQWKHDOWHUQDWHFRQILJXUDWLRQDQGUHPRYHWKHSXPSDQG
IDQ

7KHSXPSPD\EHUHSODFHGE\UHYHUVLQJWKHRUGHURIUHPRYDOVKRZQDERYH
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


6SUD\3OXPELQJ

'HWDLOVRIWKHVSUD\SOXPELQJDUHVKRZQLQ)LJXUH

7KHSOXPELQJIURPWKHKRSSHUJDWHER[WRWKHVSUD\SXPSFRQVLVWVRIDSQWXEHDVVHPEO\DQG
DKRVHDWWDFKHGWRWKHWXEHDVVHPEO\7KHKRVHLVFODPSHGZLWK4606FODPSV
ZKLFKDUHHQWLUHO\VWDLQOHVV

7KHSOXPELQJIURPWKHGLVFKDUJHVLGHRIWKHSXPSWRWKHYDOYHLVSQDQGDQGKDVD
SQ  FRXSOHU DW WKH YDOYH HQG  7KH KRVHV DUH SQ  DQG DUH GRXEOH FODPSHG ZLWK
4606FODPSV,QDGGLWLRQDSQVWUDSLVXVHGWRVDIHW\WKHWXEHWRWKHWRSRIWKHSXPS
WRSUHYHQWWKHWXEHIURPEORZLQJRIIGXHWRKLJKSUHVVXUHDQGZDWHUKDPPHUHIIHFWV

7KHWXEHDWWDFKLQJWRWKHVWUDLQHULVSQDQGWKHERRP7HHDVVHPEO\LVSQ6WDQGDUG
VSUD\ERRPVDUHSQDQGZLOOILWRQHLWKHUVLGH

7KHERRP7HHDVVHPEO\LVVXSSRUWHGZLWKDSQDVVHPEO\ /+ DQGDVVHPEO\ 5+ 
7KHVWUDSVRQWKHVXSSRUWDVVHPEOLHVDUHSQDQGDUHDWWDFKHGZLWK$1&$EROWV'7
)DVSLQVDUHXVHGWRDWWDFKWKHVXSSRUWDVVHPEOLHVWRWKHIXVHODJHIUDPH

%RWWRP/RDG3OXPELQJ

'HWDLOVRIWKHERWWRPORDGSOXPELQJDUHVKRZQLQ)LJXUH

7KHERWWRPORDGYDOYHLVLQFKDQGLVORFDWHGRQWKH/+VLGHRIWKHDLUFUDIW7KHYDOYHLV7UDQVODQG
SQ7KHDIWKDOIRIWKHERWWRPORDGSOXPELQJLVDLQFKWXEHDQGLVSQ7KHIRUZDUG
WXEHLVSQ$OOKRVHVDUHDQGZLWK4606FODPSV&ODPSVWKDWDWWDFK
WKHKRVHWRWKH212))YDOYHDUH4606
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


6SUD\1R]]OHV

)RUW\HLJKWVSUD\QR]]OHVDUHVWDQGDUG7KHVHDUH6SUD\LQJ6\VWHPV,QFSQGLDSKUDJPFKHFN
YDOYHSQ4--YERG\DQGSQ48VSUD\WLS7KHDLUFUDIWLVHTXLSSHGDWWKHIDFWRU\ZLWK
VSUD\WLSVWKDWDUHIRUPHGLXPYROXPHDSSOLFDWLRQV)RUKLJKYROXPHVSUD\LQJODUJHUVSUD\WLSV
VKRXOGEHLQVWDOOHGDQGLIQHFHVVDU\DQDGGLWLRQDOQR]]OHVVKRXOGEHLQVWDOOHG5HPRYHWKHSQ
[SOXJVDQGLQVWDOOSQ[KH[QLSSOHVIRUWKHH[WUDQR]]OHV%HVXUHWRDSSO\+3HUPDWH[RU
HTXLYDOHQWWRWKHWKUHDGVRIWKHKH[QLSSOHVGXULQJLQVWDOODWLRQ

6SUD\6\VWHP,QF)ORZ5DWH&KDUW

&DSDFLW\ 4XLFN (TXLY &DSDFLW\
6L]H 9HH-HW 'LDP *DOORQVSHU0LQXWH 
 6SUD\ 1RP          
 7LSV ,QFKHV SVL SVL SVL SVL SVL SVL SVL SVL SVL SVL

 499           
 499           
 499           
 499           
 499           
 499           
 499           
 499           
 499           
 499           
 499           
 499           
 499           
 48           
 48           
 48           
 48           
 48           
 48           
 48           
 48           


)LOOLQJWKH+RSSHU7DQNV

1RUPDOILOOLQJRIWKHKRSSHULVDFFRPSOLVKHGE\XVHRIWKHVLQJOHSRLQWILOOLQJFRQQHFWLRQWKDWLV
ORFDWHGEHORZDQGDIWRIWKHLQERDUGHQGRIWKH/+ZLQJIODS

,QQRUPDORSHUDWLRQVVSUD\FKHPLFDOVDUHSXPSHGGLUHFWO\LQWRWKHDLUSODQH¶VKRSSHUIURPDUHPRWH
PL[LQJWDQN$PDOHTXLFNGLVFRQQHFWILWWLQJDQGDIORZFRQWUROYDOYHDUHSURYLGHGDWWKHVLQJOH
SRLQWILOOLQJFRQQHFWLRQ
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


$IWHUDTXLFNGLVFRQQHFWKRVHLVDWWDFKHGWRWKHILOOLQJFRQQHFWLRQWKHILOOLQJYDOYHLVRSHQHGDQGWKH
VSUD\FKHPLFDOIORZVLQWRWKHKRSSHUDWDUDWHXSWRJDOORQVSHUPLQXWH7KHTXDQWLW\RIPDWHULDO
LQWKHWDQNVFDQEHPRQLWRUHGE\XVHRIWKHKRSSHUTXDQWLW\JDJHDQGE\YLVXDOUHIHUHQFHWRWKHPDUNLQJV
RQWKHRXWVLGHRIWKHKRSSHU

7KHKRSSHUWDQNVDUHYHQWHGWRDOORZWKHUHOHDVHRIDLUWKDWLVGLVSODFHGGXULQJWKHILOOLQJSURFHVVDWD
ILOOLQJUDWHXSWRJDOORQVSHUPLQXWH7KHKRSSHUYHQWVZLOOQRWDFFRPPRGDWHWKHIORZRIOLTXLGLQ
WKHHYHQWWKHWDQNVDUHRYHUILOOHG


 &$87,21
 6WUXFWXUDOGDPDJHWRWKHKRSSHUZLOORFFXULIWKHWDQNLVRYHUILOOHGXVLQJWKH
 VLQJOHSRLQWILOOLQJFRQQHFWLRQV,WLVLPSHUDWLYHWKDWWKHKRSSHUTXDQWLW\LV
 YLVXDOO\ PRQLWRUHG WKURXJK WKH ILOOLQJ SURFHVV DQG WKH IORZ RI PDWHULDOV LV
 VKXW RII SULRU WR WKH KRSSHU EHFRPLQJ IXOO  6XIILFLHQW PDUJLQ VKRXOG EH
 DOORZHGWRHQVXUHWKDWWKHTXDQWLW\RIPDWHULDOLQWKHKRSSHUGRHVQRWH[FHHG
 WKH)8//OHYHO


:KHQWKHGHVLUHGKRSSHUTXDQWLW\LVUHDFKHGWKHYDOYHLVFORVHGDQGWKHTXLFNGLVFRQQHFWKRVHLV
UHPRYHGDOORZLQJDTXLFNUHWXUQRIWKHDLUFUDIWWRVHUYLFH

+25,=217$/67$%,/,=(56$1'(/(9$7256

+RUL]RQWDO6WDELOL]HUV

7KHGHWDLOVRIWKHKRUL]RQWDOVWDELOL]HUDUHVKRZQLQ)LJXUH

7KHKRUL]RQWDOVWDELOL]HUVUHTXLUHYHU\OLWWOHPDLQWHQDQFHVLQFHWKH\DUHDOOPHWDO7KH\DUHDWWDFKHGWR
WKHIXVHODJHIUDPHZLWKWZR$1$EROWVZKLFKKDYHDZDVKHUXQGHUWKHKHDGDQGRQHRUWZRXQGHU
WKH QXW  2Q DQQXDO LQVSHFWLRQV WKH JDS FRYHU VKRXOG EH UHPRYHG IURP WKH VWDELOL]HU DQG WKH EROW
FRQGLWLRQDQGWRUTXHFKHFNHG$WWKHVDPHWLPHLQVSHFWWKHIXVHODJHILWWLQJVFORVHO\IRUFUDFNV7RUTXH
LVLQFKSRXQGVDWWKHQXW7KHJDSFRYHUVDUHDWWDFKHGZLWKVWDLQOHVVVHOIWDSSLQJVFUHZV
ZKLFKDUH3KLOOLSVWUXVVKHDG[ORQJ$1RKROHLVGULOOHGIRUWKHVFUHZLQVWDOODWLRQ7KH
69:UXEEHUFKDQQHOLVD&HVVQDSDUWDQGLVDWWDFKHGZLWK0$GKHVLYH

7KHVWDELOL]HULVVHDOHGRQWKHHQGVZLWK35$WRSUHYHQWFKHPLFDOHQWU\7KHUHDUHWZRH\HEROWV
WKDWDWWDFKWRDZHOGHGVWHHOEUDFHLQVLGHWKHVWDELOL]HU7KHH\HEROWVDUHIRUVWUXWDWWDFKPHQWDQGERWK
H\HEROWVDUH$1$7KHH\HEROWVVKRXOGEHUHSODFHGDIWHUKRXUV7,6DQGWKHUHDIWHUDW
KRXULQWHUYDOVLQDFFRUGDQFHZLWKVHUYLFHOHWWHU8QGHUHDFKQXWDUHWZR$1ZDVKHUVDQG
WKHQXWLVD$17KHIDFWRU\SURFHGXUHLVWRDOLJQWKHIDFHRIWKHH\HEROWVZLWKWKHVWUXWFOHYLV
EHIRUHWKHQXWRQWKHH\HEROWLVIXOO\WRUTXHG LQFKSRXQGV $ERYHWKHQXWLVDSOXJEXWWRQ
75:SQ66 
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


7KHUHLVDSQ /+ DQG 5+ WULPFRQWUROLGOHUDWWDFKHGWRHDFKVWDELOL]HUUHDUVSDU
RQ WKH LQERDUG HQG  (DFK WULP LGOHU KDV WZR %XQWLQJ 3 EXVKLQJV SUHVV ILW LQVLGH WKH ZHOGHG
DVVHPEO\DQGDSQVSDFHUEXVKLQJDOORZVWKH$1$DWWDFKEROWWREHIXOO\WRUTXHG 
LQFKSRXQGVDWWKHQXW 7KHEUDFNHWVWKDWDWWDFKWKHWULPLGOHUVDUHSQDQG7KH\
VKRXOGQHYHUQHHGUHSODFLQJXQOHVVWKH$1$EROWKDVEHFRPHORRVHDQGFDXVHGZHDULQWKHKROHV

7ZRRIWKHLGOHUDUPVDUHDWWDFKHGWRWKHSXVKURGVFRQQHFWHGWRWKHWULPWDEKRUQVDQGWKHVHDUPVKDYH
D%XQWLQJ3EXVKLQJSUHVVILWLQWRWKHLGOHUDUPV%RWKVKRXOGEHUHSODFHGZKHQH[FHVVLYHWULP
WDEIUHHSOD\GHYHORSV7KH%XQWLQJEXVKLQJVDUHRLOLPSUHJQDWHGEXWLIQHZRQHVDUHLQVWDOOHGILOO
WKHEXVKLQJVWRRYHUIORZLQJZLWKJHQHUDOSXUSRVHRLODQGZLWKILQJHUSUHVVXUHVTXHH]HRQWKHEXVKLQJ
HQGVWRIRUFHWKHRLOLQWRWKHVPDOOFDYLWLHVLQVLGHWKHEXVKLQJV

6WDELOL]HU6WUXWV

'HWDLOVRIWKHVWDELOL]HUVWUXWVDUHVKRZQLQ)LJXUHDQG)LJXUH

7KHVWDELOL]HUVWUXWVDWWDFKWRWKHIXVHODJHIUDPHZLWKD$1&$EROWDQGWRWKHVWDELOL]HUH\HEROWV
ZLWK$1$EROWV7KHUHDUHSQVWDLQOHVVWHUPLQDOVZLWK$1&FKHFNQXWVDWHDFKVWUXW
HQGWRDOORZIRUDGMXVWPHQW

7KH VWUXWV DUH FRQVWUXFWHG RI  [  [  1 VWUHDPOLQHG WXELQJ DQG PD\ EH UHSDLUHG LI
QHFHVVDU\&KHFNZLWKWKHIDFWRU\IRULQVWUXFWLRQVVLQFHDQLQWHUQDOWXEHLVLQVWDOOHG7KH\DUHRLOHG
LQWHUQDOO\WKURXJKWKHWKUHDGHGILWWLQJVRQWKHHQGVDQGVKRXOGEHUHRLOHGLIUHSDLUHG7KH\DUHVDQG
EODVWHGDQGJLYHQDSRZGHUHGFRDWLQJIRUFRUURVLRQUHVLVWDQFH

$WYDULRXVLQWHUYDOVWKHVWUXWVVKRXOGEHUHVDQGEODVWHGDQGILQLVKHGDVFDOOHGRXWDERYH%HVXUHWR
UHPRYHWKHWHUPLQDOVDQGSOXJWKHRSHQKROHVEHIRUHVDQGEODVWLQJ7KHOHDGLQJHGJHRIWKHVWUXWV
DUHFRYHUHGZLWK0SQWDSHIRUDEUDVLRQUHVLVWDQFH5HSODFHWKHOHDGLQJHGJHWDSHZKHQ
QHFHVVDU\

 :$51,1*
 7KHIRUZDUGJXVVHWRQWKHLQERDUGHQGRIWKHVWUXWVZLOOHURGHIURPKDYLQJGU\
 IHUWLOL]HU SDUWLFOHV VWULNH WKH ORZHU DIW SRUWLRQ RI WKH IXVHODJH VWUXFWXUH
 6XEVWDQWLDOVWUHQJWKUHGXFWLRQRIWKHVWUXWWRIXVHODJHFRQQHFWLRQZLOORFFXUZKHQ
 WKHJXVVHWLVVHYHUHO\HURGHG&RQVXOW6HUYLFH/HWWHUIRUDSSURSULDWHDFWLRQ

 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


6WDELOL]HU5LJJLQJ

'HWDLOVRIWKHWHUPLQDOVDQGFOHYLVEROWVXVHGIRUVWDELOL]HUULJJLQJDUHVKRZQLQ)LJXUH

7RULJWKHVWDELOL]HUVWKHHOHYDWRUVPXVWEHUHPRYHG7KHIDFWRU\SUDFWLFHLVWRDGMXVWWKHWHUPLQDO
LQWKHIRUZDUGVWUXWVRWKDWDSSUR[LPDWHO\WKHVDPHDPRXQWRIWKUHDGVLVVKRZLQJRQERWK5+DQG
/+VWUXWV7KHVWUXWVDUHSLQQHGWRWKHIXVHODJHILWWLQJVDQGWKHVWDELOL]HUVDUHSLQQHGWRWKHIXVHODJH
DWWDFKILWWLQJV 'RQ¶WIRUJHWWKHZDVKHUVXQGHUHDFKEROWKHDG EXWQRQXWV\HW+DYHVRPHRQHKROG
XSWKHVWDELOL]HUWLSVZKHQWKH\DUHEHLQJDWWDFKHG7KHQDWWDFKWKHVWUXWVWRWKHUHDUH\HEROWVRQO\
6LJKWGRZQWKHVWDELOL]HUKLQJHOLQHWRVHHWKDWWKHKLQJHVRQERWKVLGHVRIWKHDLUFUDIWOLQHXSZLWKLQ
$GMXVWHDFKVWUXWOHQJWKWKHVDPHDPRXQWXQWLOWKHKLQJHVDUHLQOLQH6WDQGGLUHFWO\EHKLQGWKH
DLUFUDIWRQWKHH[DFWIXVHODJHFHQWHUOLQHDQGUDLVHRUORZHU\RXUOLQHRIVLJKWXQWLOWKHVDPHSDUWRI
HDFKVWDELOL]HUIDOOVLQWKHOLQHRIVLJKWZLWKDUHIHUHQFHSRLQWRQWKHZLQJV,WLVOLNHO\WKDWWKHWHUPLQDO
RQRQHVWUXWZLOOKDYHWREHOHQJWKHQHGDFHUWDLQQXPEHURIWXUQVDQGWKHRSSRVLWHVWUXWVKRUWHQHGWKH
VDPHQXPEHURIWXUQVVRWKDWWKHVWDELOL]HUVOLQHXSZLWKWKHZLQJV

7KHQDGMXVWWKHWHUPLQDODWWKHIURQWH\HEROWRQHDFKVLGHVRWKDWWKHEROWVFDQEHLQVHUWHGZLWKRXW
FDXVLQJDWZLVWLQWKHVWDELOL]HUV

$OOEROWVDUHQRZLQSODFHDQGLWLVQHFHVVDU\WRUHFKHFNWKHKLQJHDOLJQPHQWIURPVLGHWRVLGHDQG
UHFKHFNWKHVWDELOL]HUSRVLWLRQZLWKWKHZLQJV,IDOOLVVWLOOLQRUGHULQVWDOOWKHZDVKHUVDQGQXWVRQ
DOOWHQDWWDFKEROWV ILYHHDFKVLGH 7RUTXHWKH$1EROWVWRLQFKSRXQGVRQWKHQXWDQGWRUTXH
WKH$1EROWVWRLQFKSRXQGVRQWKHQXW7KHQWLJKWHQWKHFKHFNQXWVDWWKHHQGRIHDFKWHUPLQDO
WRLQFKSRXQGVWRUTXH,QVHUWDSLHFHRIVDIHW\ZLUHLQWKHVPDOOLQVSHFWLRQKROHDWHDFKWHUPLQDO
ORFDWLRQWREHVXUHWKHWHUPLQDOLVVFUHZHGLQWRWKHVWUXWILWWLQJIDUHQRXJK

5HFKHFNQXWLQVWDOODWLRQRQWKHVWDELOL]HUWRIUDPHORFDWLRQDQGLQVWDOOWKHJDSFRYHUVZLWKWKH
VFUHZV,IWKHUXEEHUFKDQQHOLVORRVHRQWKHJDSFRYHUUHDWWDFKZLWK0DGKHVLYHEHIRUHWKH
JDSFRYHULVLQVWDOOHG

(OHYDWRUV

7KHHOHYDWRUVDUHDWWDFKHGWRWKHVWDELOL]HUVDQGWRWKHSHGHVWDOLQWKHIXVHODJHZLWK$1$EROWV
ZLWKD$1ZDVKHUXQGHUWKHEROWKHDGDQGWZRZDVKHUVXQGHUWKH$1$QXWH[FHSWDW
WKHSHGHVWDOZKHUHRQO\RQHZDVKHULVXQGHUWKHQXW7KHHOHYDWRUKRUQVFRQQHFWWRWKHDIWSXVKURG
ZLWKD$1$EROWWZR$1ZDVKHUV SODFHGWRJLYHPD[LPXPIXVHODJHFOHDUDQFH DQGD
$1$QXW

/LNH WKH UXGGHU WKH HOHYDWRUV DQG FHQWHU SHGHVWDO KDYH 10% SQ 06 VSKHULFDO EHDULQJV
LQVWDOOHGDQGGXHWREHDULQJGUDJLWLVYHU\LPSRUWDQWIRUDOOEROWVFRQQHFWLQJWKHHOHYDWRUVDQGWKH
KRUQV WR EH IXOO\ WRUTXHG  LQFKSRXQGV DW WKH QXW   :H KDYH VHHQ HOHYDWRU KRUQV ZLWK EDGO\
HORQJDWHGKROHVEHFDXVHWKHHOHYDWRUVKDGEHHQUHSODFHGLQWKHILHOGDQGWKHEROWVZHUHQRWIXOO\WRUTXHG
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


$UHSDLUIRUHORQJDWHGKROHVLQWKHKRUQVKDVEHHQWRGULOORXWWKHKROHVWRUHDPZLWKDVSHFLDO
UHDPHU DYDLODEOHDWWKHIDFWRU\LIUHTXLUHG DQGLQVWDOOLQJDSUHVVILW1VWHHOEXVKLQJ
WR2'[,'[ORQJ:LWKWKHEXVKLQJLQSODFHKHOLDUFZHOGWKHEXVKLQJWRWKHKRUQ
LQWZRSODFHVZLWKORQJZHOGEHDGV7KHQVDQGHWFKSULPHDQGILQLVKDVGHVFULEHGLQWKH6WULSLQJ
DQG5HSDLQWLQJVHFWLRQ

7RUHSODFHWKHEHDULQJVVHHWKHVHFWLRQRQ58''(5IRULQVWUXFWLRQV

(OHYDWRU VWRSV DUH DW WKH HOHYDWRU KRUQ  7KH GRZQ VWRS KDV D SQ  QHRSUHQH ZDVKHU LQ
FRPSUHVVLRQ WR DEVRUE VKRFNV DQG VRPHWLPHV WKLV ZDVKHU VSOLWV DQG IDOOV RXW VR GXULQJ  KRXU
LQVSHFWLRQVFKHFNWRVHHLIWKHVHZDVKHUVDUHLQSODFH$OVRLIWKHFRQWUROVWLFNLVSXOOHGEDFNVKDUSO\
DJDLQVWWKHXSVWRSRULIDZLQGJXVWEORZVWKHHOHYDWRUXSWKHXSVWRSEUDFNHWZLOOEHQGDQGVKRXOGEH
VWUDLJKWHQHGLIIRXQGWREHEHQW

(OHYDWRUWUDYHOLVƒXSƒGRZQ“ƒ

(OHYDWRU&RQWUROV

'HWDLOVRIWKHHOHYDWRUFRQWUROVDUHVKRZQLQ)LJXUH

7KHDIWHOHYDWRUSXVKURGWKDWFRQQHFWVWRWKHHOHYDWRUKRUQVLVSQDQGLVDGMXVWDEOHRQWKH
IRUZDUGHQGZKLFKKDVD)DIQLU5(0EHDULQJLQVWDOOHG7KHDIWHQGRIWKHSXVKURGKDVD10%SQ
06EHDULQJVDPHDVWKHHOHYDWRUVDQGUXGGHUDQGLVSUHVVHGLQWRSODFHDQGVWDNHGVDPHDVLQ
RWKHUDSSOLFDWLRQV,ILWLVWREHUHPRYHGVHHWKH58''(5VHFWLRQIRUUHPRYDOLQVWUXFWLRQV

(OHYDWRU7ULP7DEV

'HWDLOVRIWKHHOHYDWRUWULPWLDEVDUHVKRZQLQ)LJXUH

7KHHOHYDWRUWULPWDEVDUHSQ/+5+DQGDWWDFKWRWKHHOHYDWRUVZLWKDSQ
KLQJHWKDWEROWVWRWKHLQERDUGULEZLWK$1$EROWVDQG$1ZDVKHUV$Q$1ZDVKHU
LVEHWZHHQWKHRXWERDUGKLQJHDQGHOHYDWRULIUHTXLUHG

$SQSXVKURGDWWDFKHVWRWKHWULPWDEKRUQZLWK$1$EROWV$1QXWVDQGWRWKH
LGOHUDUPLQWKHVWDELOL]HUZLWK$1EROWV$1QXWV$1ZDVKHUV06FRWWHUV
7KHUHLVD%XQWLQJ3EXVKLQJDWWKHIRUZDUGMRLQWZKLFKVKRXOGEHUHSODFHGLIWKHWDEIUHHSOD\DW
WKHWUDLOLQJHGJHH[FHHGVLQFKHV,IWKHUHLVVWLOOH[FHVVLYHIUHHSOD\FKHFNWKHEROWVIRUZHDUDQG
FKHFNWKHSXVKURGHQGVIRUZHDU,QVWDOOQHZSXVKURGVLIWKHKROHVDUHZRUQ
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


(OHYDWRU7ULP7DE&RQWUROV

'HWDLOVRIWKHHOHYDWRUWULPWDEFRFNSLWFRQWUROVDUHVKRZQLQ)LJXUH

7KHWULPOHYHULVSQ4TXDGUDVWDW,WKDVDSQVWRSLQVWDOOHGZLWKVORWWHGKROHVWKDW
DOORZPRYHPHQWXSDQGGRZQWRDGMXVWWKHWDEWUDYHO7RSRVLWLRQWKHOHYHULQQHXWUDOLQVWDOOWKHFRQWURO
ORFNSRVLWLRQWKHOHYHULQWKHJUHHQEDQGDQGDGMXVWWKHIRUZDUGSXVKURGXQWLOWKHWULPWDEVDUHOLQHG
XSZLWKWKHHOHYDWRU¶VWUDLOLQJHGJH7KHVWRSFDQWKHQEHPRYHGXSRUGRZQ
WRSURYLGHDWDEWUDYHORIƒXSƒGRZQ“ƒ

,IWKHWULPOHYHUFUHHSVLQIOLJKWDGMXVWWKHVWRSVRQHDFKVLGHRIWKHWULPOHYHUVRWKDWDJDSRILV
SURYLGHGRQHDFKVLGHRIWKHOHYHU$SQWULPEHOOFUDQNLVDWWDFKHGWRWKHIXVHODJHIUDPHZLWK
$1$EROWV%XQWLQJ3EXVKLQJVSQVSDFHUEXVKLQJV$1QXWVDQG$1
 ZDVKHUV XQGHU WKH QXWV  7KH EHOOFUDQN VKRXOG EH UHPRYHG GXULQJ DQQXDO LQVSHFWLRQV DQG WKH
EXVKLQJVLQVSHFWHGIRUZHDUDQGOXEULFDWHG


7KHSXVKURGVIURPWKHWULPEHOOFUDQNWRWKHLGOHUDUPRQWKHVWDELOL]HUUHDUVSDUDUHSQDQG
DUHDGMXVWDEOH7KHHQGVDUH$1&OHYLVHQGVZLWK$1FKHFNQXWV$WWDFKPHQWVDUHZLWK
$1EROWV$1QXWV$1ZDVKHUV06FRWWHUV

7KH SXVKURG JRLQJ IRUZDUG IURP WKH EHOOFUDQN LV SQ  DQG KDV D )DIQLU 5(%1 EHDULQJ
DWWDFKHGWRWKHEHOOFUDQNZLWKD$1$EROW$1ZDVKHUXQGHUWKHEROWKHDG$1ZDVKHU
XQGHUWKHQXW$1QXW

)DLUOHDGVDUHSQZLWKVQDSULQJV7KHIRUZDUGHQGJRLQJLQWRWKHFRFNSLWFRQQHFWV
WRWKHWRSKROHLQWKHWULPOHYHUZLWKWKHVDPHKDUGZDUHDVFRQQHFWLQJWRWKHWULPEHOOFUDQN

,77,167580(17&$/,%5$721&+(&.

'HVFULSWLRQ

7KLV VHFWLRQ SURYLGHV LQVWUXFWLRQV IRU FKHFNLQJ WKH FDOLEUDWLRQ RI WKH ,77 LQGLFDWRU IRU $LU 7UDFWRU
DLUFUDIWZLWK 3UDWW  :KLWQH\37$WXUELQHHQJLQHV7KHVHLQVWUXFWLRQV DUHZULWWHQ IRUXVHZLWK D
%DUILHOG777XUELQH7HPSHUDWXUH7HVW6HW2WKHU,77FDOLEUDWLRQHTXLSPHQWPD\EHXVHGLIWKDW
HTXLSPHQWLVDSSURSULDWHIRUXVHZLWK$LU7UDFWRU,77V\VWHPV:KHQRWKHUHTXLSPHQWLVXVHGWKH
RSHUDWRUVKDOOIROORZWKHPDQXIDFWXUHU¶VRSHUDWLQJLQVWUXFWLRQV(QVXUHWKDWWKHWHVWHTXLSPHQWKDVD
FXUUHQWFDOLEUDWLRQEHIRUHSHUIRUPLQJDFDOLEUDWLRQFKHFNRIWKHHQJLQHLQVWUXPHQW

$SSURYHGWROHUDQFHVIRUHDFKJDXJHDUHGLIIHUHQW7ZRWDEOHVDUHSURYLGHGLQWKLVVXSSOHPHQWVKRZLQJ
WKHWROHUDQFHVIRUHDFKHQJLQH

7KH,77V\VWHPPD\EHLQRQHRIWZRFRQILJXUDWLRQVZLWKOHDGUHVLVWDQFHRUZLWKRXWOHDGUHVLVWDQFH
&DOLEUDWLRQFKHFNLQJLQVWUXFWLRQVIRUHDFKVW\OHDUHGLIIHUHQW6\VWHPVZLWKRXWOHDGUHVLVWDQFHXVHDQ
HOHFWURQLFLQGLFDWRUDQGDUHHDVLO\UHFRJQL]HGE\PXOWLSOHSLQFRQQHFWRUVRQWKHEDFNRIWKHLQVWUXPHQW
7KHVHV\VWHPVW\SLFDOO\XVHD´LQVWUXPHQWDQGDUHPRUHFRPPRQRQQHZHUDLUFUDIW6\VWHPVZLWK
OHDGUHVLVWDQFHKDYHRQO\WZRZLUHVFRQQHFWLQJWKHLQVWUXPHQWWRWKHHQJLQH7KHVHV\VWHPVW\SLFDOO\
XVHD´LQVWUXPHQWDQGDUHPRUHFRPPRQRQROGHUDLUFUDIW
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


0RVW DLUFUDIW PDQXIDFWXUHG DIWHU PLG KDYH DQ ,77 LQVWUXPHQW ZLWKRXW OHDG UHVLVWDQFH  7KHVH
V\VWHPVZLOOQRWSURYLGHDWHPSHUDWXUHLQGLFDWLRQXQOHVVWKHLQGLFDWRULVSRZHUHGZLWKWRYROWV
RUQRUPDODLUFUDIWSRZHU7KHWHVWHUZLOOEHVHW XSWRVLPXODWHWKH,77VHQVRUVLQWKHHQJLQH7KH
RXWSXWRIWKHWHVWHUZLOOEHDGMXVWHGXQWLOWKHFRFNSLWLQGLFDWRUVKRZVDPDUNHGWHPSHUDWXUH H[ƒ& 
7KH FDOLEUDWHG WHPSHUDWXUH ZLOO WKHQ EH UHDG IURP WKH GLVSOD\ RI WKH WHVWHU  8VH WKH IRUPDW RI WKH
WHPSHUDWXUHVIURPWKH6DPSOH7HVW&DUGSURYLGHGLQWKLVVHFWLRQ

6&+('8/(',163(&7,21

 <HDUV  &DOLEUDWHWKH,77JDXJHRUIROORZWKHSURFHGXUHVZLWKLQWKLVVHFWLRQWRFKHFNWKH
FDOLEUDWLRQ

3URFHGXUH

6<67(06:,7+287/($'5(6,67$1&( 3RZHU5HTXLUHG 

 'LVFRQQHFWDLUFUDIWSRZHUWRWKHLQVWUXPHQW7KHVLPSOHVWZD\WRGRWKLVLVWRGLVHQJDJH
RUSRSRXWWKHDPS³(QJLQH,QVWUXPHQWV´FLUFXLWEUHDNHU

 'LVFRQQHFWDWOHDVWRQHRIWKHLQVWUXPHQWOHDGVIURPWKHHQJLQHWKHUPRFRXSOHWHUPLQDO
EORFN1RWHZKLFKOHDGZDVFRQQHFWHGWRZKLFKWHUPLQDO

 2QWKH77VHWWKH³)81&7,21´VZLWFKWR³,1'7(67´

 6HWWKH³5$1*(´VZLWFKWR³. ȍ6\V5HV´

 6HWWKH³ƒ&ƒ&´VZLWFKWR³ƒ&´

 6HWWKH³ƒ&09´VZLWFKWR³ƒ&´

 &RQQHFWWKH77KDUQHVVWRWKH³7(67´FRQQHFWRURQWKH77WHVWVHW

 &RQQHFW WKHEODFNFOLSRIWKHWHVWHUWR WKHHQGRIWKHLQVWUXPHQW OHDG 5HG WKDWZDV
FRQQHFWHGWRWKH$OXPHO  WHUPLQDORQWKHHQJLQHWKHUPRFRXSOHEORFN&RQQHFWWKH
UHGFOLSWRWKHOHDG <HOORZ WKDWZDVFRQQHFWHGWRWKH&KURPHO  WHUPLQDO

 &RQQHFW DLUFUDIW SRZHU WR WKH LQVWUXPHQW DQG WXUQ WKH 0DVWHU VZLWFK 21  6HW WKH
³212))´VZLWFKRIWKH77WR³21´

 )RUWKHFDOLEUDWLRQFKHFNWKHRSHUDWRUZLOOQHHGWRWDNHUHDGLQJVIURPWKHJDXJHLQVLGH
RIWKHFRFNSLWDVZHOODVDWWKHWHVWVHWQHDUWKHHQJLQH
D 5RWDWH WKH ³7(03 $'-´ NQRE RQ WKH WHVW VHW VR WKDW D WHPSHUDWXUH RI ƒ& LV
LQGLFDWHG RQ WKH ,77 LQGLFDWRU LQ WKH FRFNSLW  5HFRUG WKH WHPSHUDWXUH RII RI WKH
77WHVWVHW
E 5HSHDWWKLVIRUHDFKWHPSHUDWXUHVKRZQRQWKH6DPSOH7HVW&DUG
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


F $GMXVWWKHWHPSHUDWXUHNQRERQWKHWHVWVHWVRWKDWWKH,77LQGLFDWRUOLQHVXSH[DFWO\
ZLWK WKHUHGOLQH5HFRUGWKHWHPSHUDWXUHRIWKHOLQHDV ZHOODV WKHWHPSHUDWXUH
LQGLFDWHGRQWKHWHVWVHW
G /DVWO\DGMXVWWKHWHPSHUDWXUHNQRERQWKHWHVWVHWVRWKDWWKH,77LQGLFDWRUSRLQWVDW
WKH UHG WULDQJOH  5HFRUG WKH WHPSHUDWXUH RI WKH UHG WULDQJOH DV ZHOO DV WKH
WHPSHUDWXUHLQGLFDWHGRQWKHWHVWVHW

 2QFH DOO WHPSHUDWXUHV DUH UHFRUGHG IURP WKH 77 DQG WKH LQVWUXPHQW WXUQ WKH
DLUSODQH0DVWHUVZLWFK2))WXUQWKH772))GLVFRQQHFWWKHWHVWHTXLSPHQWDQG
UHWXUQWKHDLUFUDIWWRWKHFRQILJXUDWLRQSULRUWRWHVWLQJ

 &RPSDUHWKHUHDGLQJVIURPWKH77DQGLQVWUXPHQW6HHWKHDSSURSULDWHWDEOHEHORZ
IRUWROHUDQFHV,IWKHLQVWUXPHQWLVQRWZLWKLQDFFHSWDEOHFDOLEUDWLRQVHQGWKHLQVWUXPHQW
WRDVKRSIRURYHUKDXODQGFDOLEUDWLRQ

6<67(06:,7+/($'5(6,67$1&( 3RZHU1275HTXLUHG 

 $LUFUDIWSRZHUVKRXOGEH2))GXULQJWKLVSURFHGXUH

 'LVFRQQHFW WKH OHDGV IURP WKH EDFN RI WKH LQVWUXPHQW LQ WKH FRFNSLW  1RWH ZKLFK OHDG
FRQQHFWVWRZKLFKWHUPLQDO

 2QWKH77VHWWKH³)81&7,21´VZLWFKWR³5(60($6´

 6HWWKH³5$1*(´VZLWFKWR³´

 $WWDFKWKHKDUQHVVWRWKH³7(67´FRQQHFWRURQWKH77

 6HWWKH³212))´VZLWFKRIWKH77WR³21´

 6KRUWWKHWHVWHUE\FRQQHFWLQJWKHUHGDQGEODFNFOLSVRIWKHKDUQHVVWRJHWKHU:KLOHWKH
WHVWHULVVKRUWHGSUHVVDQGKROGWKH³376´EXWWRQZKLOHDGMXVWLQJWKH³6<65(6´FRQWURO
NQREXQWLOWKH³ȍ´LVGLVSOD\HGRQWKHWHVWHU

 'LVFRQQHFWWKHKDUQHVVFOLSVDQGVHWWKH³)81&7,21´VZLWFKWR³,1'7(67´

 6HWWKH³ƒ&ƒ&VZLWFKWR³ƒ&´

6HWWKH³&09´VZLWFKWR³&´

&RQQHFWWKHEODFNFOLSRIWKHKDUQHVVWRWKHLQVWUXPHQWWHUPLQDOWKDWKDGWKH5HG  OHDG
DWWDFKHGDQGFRQQHFWWKHUHGFOLSWRWKHLQVWUXPHQWWHUPLQDOWKDWKDGWKH<HOORZ  OHDG
DWWDFKHG
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


)RUWKHFDOLEUDWLRQFKHFNWKHRSHUDWRUZLOOQHHGWRWDNHUHDGLQJVIURPWKHJDXJHLQVLGHRI
WKHFRFNSLWDVZHOODVDWWKHWHVWVHWQHDUWKHHQJLQH
D 5RWDWH WKH ³7(03 $'-´ NQRE RQ WKH WHVW VHW VR WKDW D WHPSHUDWXUH RI ƒ& LV
LQGLFDWHG RQ WKH ,77 LQGLFDWRU LQ WKH FRFNSLW  5HFRUG WKH WHPSHUDWXUH RII RI WKH
77WHVWVHW
E 5HSHDWWKLVIRUHDFKWHPSHUDWXUHVKRZQRQWKH6DPSOH7HVW&DUG
F $GMXVWWKHWHPSHUDWXUHNQRERQWKHWHVWVHWVRWKDWWKH,77LQGLFDWRUOLQHVXSH[DFWO\
ZLWK WKHUHGOLQH5HFRUGWKHWHPSHUDWXUHRIWKHOLQHDV ZHOODVWKHWHPSHUDWXUH
LQGLFDWHGRQWKHWHVWVHW
G /DVWO\DGMXVWWKHWHPSHUDWXUHNQRERQWKHWHVWVHWVRWKDWWKH,77LQGLFDWRUSRLQWVDW
WKH UHG WULDQJOH  5HFRUG WKH WHPSHUDWXUH RI WKH UHG WULDQJOH DV ZHOO DV WKH
WHPSHUDWXUHLQGLFDWHGRQWKHWHVWVHW

2QFHDOOWHPSHUDWXUHVDUHUHFRUGHGIURPWKH77DQGWKHLQVWUXPHQWWXUQWKH77
2)) GLVFRQQHFW WKH WHVW HTXLSPHQW DQG UHWXUQ WKH DLUFUDIW WR WKH FRQILJXUDWLRQ SULRU WR
WHVWLQJ

&RPSDUH WKH UHDGLQJV IURP WKH 77 DQG WKH LQVWUXPHQW  6HH WKH WDEOH EHORZ IRU
WROHUDQFHV,IWKHLQVWUXPHQWLVQRWZLWKLQDFFHSWDEOHFDOLEUDWLRQVHQGWKHLQVWUXPHQWWRD
VKRSIRURYHUKDXODQGFDOLEUDWLRQ




5HG 5HG
(QJLQH0RGHO 7ROHUDQFHV
/LQH 7ULDQJOH

ƒ&WRƒ& ƒ&WRƒ& %H\RQGƒ& ƒ& ƒ&

37$
6HULHV ƒ& ƒ& ƒ& ƒ& ƒ&

ƒ&WRƒ& ƒ&WRƒ& %H\RQGƒ& 9DULHV ƒ&

37$
6HULHV ƒ& ƒ& ƒ& ƒ& ƒ&


 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


Sample Test Card
Date 2/16/11
Aircraft Model AT-502B
Operator J. Smith
s/n 502-5555
Engine PT6A-34AG
TIS 1000
Power Rqd? No

,QGLFDWHG7HPS ,77LQ&RFNSLW  &DOLEUDWHG7HPS %DUILHOG77 

 211
 392
 512
 609
 697
 804
5HG/LQH725 731
 /DUJH(QJLQHV2QO\ n/a
5HG7ULDQJOH1090 1080
:LWKLQ&DOLEUDWLRQ" Yes

/(9(/,1*

7KH DLUSODQH LV OHYHOHG WR ³OHYHO IOLJKW DWWLWXGH´ E\ MDFNLQJ WKH WDLOZKHHO  6HH /,)7,1* $1'
-$&.,1*VHFWLRQRIWKLVPDQXDO7KHDLUSODQHVKRXOGEHLQWKLVOHYHOSRVLWLRQIRUDLUFUDIWZHLJKLQJ
DQG RWKHU PDLQWHQDQFHLQVWDOODWLRQ LWHPV WKDW UHTXLUH WKH DLUFUDIW WR EH LQ OHYHO IOLJKW DWWLWXGH  7KH
DLUSODQHLVLQOHYHOIOLJKWDWWLWXGHZKHQWKHWRS ULJKWQH[WWRWKHVLGHRIWKHIXVHODJH RIWKH/+ODQGLQJ
JHDUOHJLVDWDQDQJOHRIGHJUHHV WDLOGRZQ IURPOHYHO7RPHDVXUHWKLVDQJOHXVHDQHOHFWURQLF
OHYHOSODFHGDWRSWKHPDLQJHDUOHJ

$OWHUQDWHO\WKHDLUSODQHPD\EHOHYHOHGZLWKDQDFFXUDWHEXEEOHOHYHODQGDZHGJH7KHZHGJHPD\
EHIDEULFDWHGRIZRRGZLWKDQLQFOXGHGDQJOHRIILYHGHJUHHV  7KHZHGJHZRXOGEHSODFHG
RQWKHIODWSDUWRIWKHODQGLQJJHDUOHJQH[WWRWKHIXVHODJHZLWKWKHVKDUSHQGRIWKHZHGJHSRLQWLQJ
WRZDUGWKHIURQWRIWKHDLUSODQH$EXEEOHOHYHOSODFHGRQWRSRIWKHZHGJHZLOOLQGLFDWHOHYHOZKHQ
WKHDLUFUDIWLVOHYHO

2QDLUFUDIWHTXLSSHGZLWKWKHDOXPLQXPHQJLQHDLUVFRRSRQWKHERWWRPRIWKHFRZOLQJ QRQUDPDLU
LQGXFWLRQV\VWHP WKHUHDUHWZRVPDOOVFUHZVSURYLGHGRQWKHOHIWKDQGVLGHRIWKHHQJLQHDLUVFRRS
WKDW SURYLGH D OHYHO UHIHUHQFH  :KHQ D EXEEOH OHYHO LV DOLJQHG ZLWK WKH KHDGV RI WKHVH VFUHZV WKH
EXEEOHOHYHOZLOOLQGLFDWHOHYHOZKHQWKHDLUFUDIWLVOHYHO
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


/,)7,1*$1'-$&.,1*


 &$87,21
 7KHKRSSHUVKRXOGEH(037<EHIRUHMDFNLQJ&DUHVKRXOG
 DOZD\VEHWDNHQZKHQWKHDLUFUDIWLVOLIWHGWRSUHYHQW'DPDJHWR
 WKHDLUFUDIWRUKDUPWRSHRSOHQHDULW


$MDFNSDGLVSURYLGHGZLWKHDFKDLUFUDIWIRUWKHPDLQJHDU7KLVMDFNSDGLVWREHXVHGIRUFKDQJLQJ
RUUHPRYLQJDZKHHO7RLQVWDOOWKHMDFNSDGOD\DVRIWUDJRQWKHLQVLGHVRWKDWLWZLOOQRWFKLSWKH
SDLQWIURPWKHPDLQJHDUOHJDQGVOLGHWKHMDFNSDGXSWKHORZHUHQGRIWKHPDLQJHDUOHJXQWLOLWLV
VQXJ,WZLOOEHQHFHVVDU\WRUHPRYHDQGUHSODFHWKHORZHUSODVWLFEDQGWKDWKROGVWKHEUDNHOLQHLQ
SODFH7KHEDQGLVD7\WRQ70DQGVKRXOGEHVWRFNHGDVDVWDQGDUGVSDUHVLWHP$IWHUWKHMDFN
SDGLVLQSODFHLQVWDOOWKHEROWDQGQXWWKURXJKWKHSDGIODQJHVZLWKWKHEROWRQWKHWRSVLGHRIWKHJHDU
OHJ  7KLV LV WR NHHS WKH SDG IURP VSUHDGLQJ DSDUW DQG VOLSSLQJ  8VH D K\GUDXOLF MDFN RI DGHTXDWH
FDSDFLW\WROLIWWKHZKHHORIIWKHJURXQG%HVXUHWKHWDLOZKHHOLVORFNHGDQGFKRFNVDUHLQSODFHRQ
WKHRWKHUPDLQZKHHO7KHKRSSHUVKRXOGEHHPSW\EHIRUHMDFNLQJ

$OWHUQDWHO\WRVHUYLFHWKHPDLQZKHHOWLUHVRUEUDNHVWKHSODQHPD\EHMDFNHGXWLOL]LQJDW\SLFDOWULSRG
JHQHUDODYLDWLRQZLQJMDFNRIDWOHDVWOEFDSDFLW\DQGWKHMDFNSRLQWLQFOXGHGLQWKHGHOLYHU\NLW
7RDFFRPSOLVKWKLVUHPRYHWKHPDLQODQGLQJJHDUFXIIDQGH[SRVHWKHPDLQJHDUVSULQJFODPS,QVHUW
WKHMDFNSRLQWLQWRWKHKHDGRIWKHVRFNHWKHDGEROWDWWDFKLQJWKHFODPSEORFN<RXPD\QHHGWRSODFH
D GDE RI JUHDVH RU SXWW\ LQ WKH VRFNHW KHDG RI WKH EROW WR WHPSRUDULO\ KROG WKH MDFN SRLQW LQ SODFH
3RVLWLRQWKHMDFNXQGHUWKHMDFNSRLQWDQGOLIWWKHZKHHORIIWKHJURXQG%HIRUHOLIWLQJWKHSODQHEHVXUH
WKHRWKHUPDLQJHDULVFKRFNHGDQGWKDWWKHWDLOZKHHOLVORFNHG8VHFDXWLRQPDNLQJVXUHWKHMDFNLV
VWDEOHXQGHUVWDQGLQJWKDWWKHPDLQJHDUVSULQJGHIOHFWVODWWHUO\DVWKHSODQHLVOLIWHGDQGORZHUHG

7RMDFNWKHWDLOZKHHOSODFHDVPDOOERDUG DVKRUW[ XQGHUWKHWDLOVSULQJDERXWPLGZD\EHWZHHQ
WKHIRUZDUGVSULQJDWWDFKEROWDQGWKHPDLQFODPSEORFNWKDWDWWDFKHVWKHVSULQJWRWKHIXVHODJH3ODFH
WKHMDFNRQWKHERDUGDQGOLIWWKHZKHHO%HVXUHWKHSDUNLQJEUDNHLVVHWEHIRUHMDFNLQJ

,IWKHWDLOVSULQJLVWREHUHPRYHGRUFKHFNHGIRUORRVHQHVVRUKDYHEROWVFKDQJHGSODFHWKHVPDOO
K\GUDXOLFMDFNXQGHUWKHSRLQWRIWKH/+VWDELOL]HUVWUXWDWWDFKILWWLQJWKDWZHOGVWRWKHORZHUIXVHODJH
ORQJHURQ$JDLQEHVXUHWKHSDUNLQJEUDNHLVVHWEHIRUHMDFNLQJ

,IWKHPDLQJHDUVSULQJVDUHWREHFKHFNHGIRUORRVHQHVVRUEROWVFKDQJHG RWKHUWKDQWKHIRUZDUGFODPS
EROW WKHDLUFUDIWPXVWEHOLIWHGZLWKDKRLVWDVWKHUHDUHQRMDFNSRLQWVRQWKHZLQJGXHWRWKHODUJH
GHIOHFWLRQVRIWKHPDLQJHDUVSULQJV$VOLQJVKRXOGEHFRQVWUXFWHGZLWKHDFKVLGHRIWKHVOLQJDWWDFKLQJ
WRDFKDLQRUFDEOHZUDSSHGDURXQGWKHDIWHQGRIWKHHQJLQHPRXQWDWWKHILUHZDOO%HVXUHWRZUDS
UDJVDURXQGWKHPRXQWVWUXFWXUHVRDVQRWWRVFUDWFKWKHSDLQWDQGKDYHWKHKRSSHUHPSW\EHIRUHOLIWLQJ

$WKUHHWRQKRLVWVKRXOGEHXVHGDQGDVWKHZKHHOVFOHDUWKHJURXQGSODFHDQHPSW\JDOORQGUXP
ZLWKVXIILFLHQWERDUGVXQGHUHDFKZLQJDWWKHWLHGRZQORFDWLRQWRVWHDG\WKHDLUFUDIWDQGSURYLGHVDIHW\
LQFDVHWKHKRLVWVKRXOGIDLO'RQRWDWWHPSWWRMDFNWKHZLQJVDWWKHWLHGRZQULQJVDVVWUXFWXUDOGDPDJH
ZLOOUHVXOWWRWKHZLQJV
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


0$,1$1'7$,/*($5$77$&+%2/76

'HWDLOVIRUWKHPDLQJHDUDWWDFKPHQWEROWVDUHVKRZQLQ)LJXUH'HWDLOVIRUWKHWDLOJHDUDWWDFKPHQW
EROWVDUHVKRZQLQ)LJXUH

7KHEROWVDWWDFKLQJWKHPDLQDQGWDLOJHDUVSULQJVWRWKHIXVHODJHVWUXFWXUHDUHDPRQJWKHPRVWLPSRUWDQW
VWUXFWXUDOFRPSRQHQWVRIWKHDLUFUDIW%HLQJVWUXFWXUDOFRPSRQHQWVXQGHUFRQVWDQWVWUHVVWKHVHEROWV
KDYHGHILQLWHIDWLJXHOLYHV7KHSUHGLFWDELOLW\RIWKHIDWLJXHOLIHRIHDFKEROWLVLPSRVVLEOHGXHWRWKH
ZLGHYDULHW\RIRSHUDWLQJFRQGLWLRQVWKDWLQFOXGHVPRRWKQHVVRIODQGLQJVWULSVQXPEHURIODQGLQJVSHU
KRXUSLORWODQGLQJWHFKQLTXHORDGFDUULHGWKHZD\WKHWXUQVRQWKHJURXQGDUHPDGHWKHZD\WKHEUDNHV
DUHXVHGDQGPDQ\RWKHUVPDOOEXWVLJQLILFDQWIDFWRUV'URSSLQJLQRYHUWKHWUHHVDQGKLWWLQJWKHJURXQG
GXULQJDVSUD\UXQPD\QRWFDXVHDJHDUEROWIDLOXUHEXWWKHHIIHFWRQWKHIDWLJXHOLIHRIWKHEROWFRXOG
EHWKHVDPHDVVHYHUDOWKRXVDQGODQGLQJVRQDURXJKVWULS$EROWWKDWLVQRWWLJKWHQHGWRWKHSURSHU
WRUTXHHVSHFLDOO\ZKHQWKHUHLVYLVLEOHFOHDUDQFHEHWZHHQWKHJHDUVSULQJDQGWKHIXVHODJHZLOOODVW
RQO\DIUDFWLRQRIWKHWLPHQRUPDOO\H[SHFWHG

:HKDYHHVWDEOLVKHGZKDWZHIHHOLVDFRQVHUYDWLYH\HW UHDOLVWLFWLPHSHULRGIRUJHDUEROWFKDQJHV
EDVHG RQ ILHOG H[SHULHQFH DW WKLV WLPH  7KH EROW OLIH VKRZQ LV EDVHG RQQRUPDO RSHUDWLRQV  ,I \RX
GLVFRYHUVODFNLQWKHODUJHEROWDWWDFKLQJWKHPDLQJHDUOHJFKDQJHLWLPPHGLDWHO\

0DLQDQGWDLOJHDUDWWDFKPHQWEROWIDWLJXHOLYHVDUHOLVWHGLQ7,0(/,0,7('3$576LQWKLVVHFWLRQ
RIWKLVPDQXDO

0$,1/$1',1**($5

0DLQ:KHHOV

7R UHPRYH D PDLQ ZKHHO MDFN WKH ZKHHO FOHDU RI WKH JURXQG SHU /,)7,1* $1' -$&.,1*
,16758&7,2166HH)LJXUHIRUGHWDLOVRIWKHPDLQZKHHOV5HPRYHWKHVL[EROWVDWWDFKLQJWKH
WZRKDOYHVRIHDFKEUDNHDVVHPEO\/HDYHWKHEUDNHOLQHFRQQHFWHGDQGVOLGHWKHEUDNHDVVHPEO\RXW
RIWKHZD\

5HPRYHWKHRXWHUVQDSULQJDQGGXVWFDSUHPRYHWKHWZRFRWWHUVLQWKHFDVWHOODWHGQXWDQGEDFNRII
WKHFDVWHOODWHGQXW7KHZKHHOFDQWKHQEHSXOOHGIUHHRIWKHD[OH%HVXUHWRFDWFKWKHRXWHUFRQHUROOHU
EHDULQJ7KHLQQHUFRQHUROOHUEHDULQJZLOOFRPHRIIWKHD[OHZLWKWKHZKHHO5HPRYHWKHVQDSULQJ
KROGLQJWKHLQQHUJUHDVHVHDOLQWKHZKHHO5HPRYHWKHVHDODQGWKHLQQHUFRQHUROOHUEHDULQJ&OHDQ
WKHERUHRIWKHZKHHO([FHVVJUHDVHLQWKHERUHRIWKHZKHHOFDQFDXVHWKHZKHHODQGWLUHDVVHPEO\WR
EHFRPHRXWRIEDODQFH7KHLQQHUVHDOFRQVLVWVRIWZRSQVWHHOZDVKHUVDQGRQHSQ
IHOWZDVKHU&OHDQDQGLQVSHFWWKHVHDODVVHPEO\&OHDQDQGKDQGSDFNWKH7LPNHQSQLQQHU
EHDULQJDQGWKH7LPNHQSQRXWHUEHDULQJ6HWWKHVHDVLGHIRUODWHULQVWDOODWLRQ&OHDQWKHD[OH
DQGLQVSHFWLWIRUFUDFNVSD\LQJVSHFLDODWWHQWLRQWRWKHORZHUVLGHUDGLXVDGMDFHQWWRWKHD[OHPRXQWLQJ
IODQJH&RDWWKHD[OHZLWKDWKLQILOPRIJUHDVHIRUFRUURVLRQUHVLVWDQFH
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


7RUHPRYHWKHWLUHGHIODWHLWE\UHPRYLQJWKHYDOYHVWHPFRUH8VHDQDLUFUDIWWLUHEHDGEUHDNHUDQG
EUDNHWKHWLUHEHDGIURPHDFKZKHHOKDOI5HPRYHWKHQLQH$1$EROWVWKDWKROGWKHWZRZKHHO
KDOYHV WRJHWKHU  &DUHIXOO\ LQVSHFW WKH EROWV QXWV DQG ZDVKHUV IRU FUDFNV H[FHVVLYH DEUDVLRQ IURP
QXPHURXV LQVWDOODWLRQV DQG JHQHUDO FRQGLWLRQ  5HSODFH DOO TXHVWLRQDEOH KDUGZDUH  &$87,21
1(9(5 5(029( 7+( :+((/ +$/) %2/76 81/(66 7+( 7,5( ,6 &203/(7(/<
'()/$7('5HPRYHWKHZKHHOKDOYHVIURPWKHWLUHDQGWXEH&OHDQDQGLQVSHFWWKHZKHHOKDOYHVIRU
FUDFNVDQGRWKHUGDPDJH5HPRYHWKHYDOYHFRUHIURPWKHYDOYHVWHPRIWKHQHZWXEH3DUWLDOO\LQIODWH
WKHWXEHDQGFRDWLWZLWKWDOFXPSRZGHU,QVHUWWKHWXEHLQWKHQHZWLUH$OLJQWKHYDOYHVWHPRIWKH
WXEHZLWKWKHUHGVSRWRQWKHVLGHZDOORIWKHWLUH&RDWWKHWLUHEHDGDQGWKHLQQHUGLDPHWHURIWKHWXEH
ZLWKWDOFXPSRZGHU,QVHUWWKHRXWHUKDOIRIWKHZKHHOLQWRWKHWLUHDQGWXEHDVVHPEO\ORFDWLQJWKH
YDOYHVWHPLQWKHZKHHO&KHFNWRVHHWKDWWKHUHGVSRWRQWKHWLUHVLGHZDOODQGWKHYDOYHVWHPDUH
VWLOODOLJQHG

7XUQWKHDVVHPEO\RYHUDQGLQVHUWWKHLQQHUKDOIRIWKHZKHHODOLJQLQJWKHEROWKROHV%HFDUHIXOQRWWR
SLQFKWKHWXEHDVWKHWZRZKHHOKDOYHVJRWRJHWKHU,QVWDOOWKHEUDNHGLVFDQGWKHQLQH$1$EROWV
,QVWDOOWKH$1ZDVKHUVDQG061QXWV7RUTXHWKHQXWVWRLQOEVGU\,QIODWHWKH
WLUHWRVHYHUDOSVLDQGDOORZWKHWLUHWRGHIODWH7KLVDOORZVWKHWXEHWRSRVLWLRQLWVHOILQWKHWLUHEHIRUH
ILQDOLQIODWLRQ,QVWDOOWKHQHZYDOYHFRUHDQGLQIODWHWKHWLUHWRSVL&$87,21$/:$<686($
7,5(*$8*($1'1(9(5+2/'7+($,5&+8&.:,7+<285+$1':+,/(,1)/$7,1*
7,5(6,QVWDOOWKHLQQHUEHDULQJJUHDVHVHDODQGVQDSULQJLQWKHZKHHO

0DLQ:KHHO$OLJQPHQW

7KH QHHG IRUPDLQ ZKHHO DOLJQPHQWLV LQGLFDWHG E\ DQXPEHURIVXEMHFWLYHREVHUYDWLRQV 7KHILUVW
SUREDEOHVLJQRIWKHQHHGIRUDOLJQPHQWLVH[FHVVLYHWLUHZHDURUIHDWKHULQJDWWKHHGJHVRIWKHWLUHWUHDG
EHDGV'RJWUDFNLQJRUWKHWHQGHQF\RIWKHDLUSODQHWRFUDEGXULQJWD[LDQGUROORXWDIWHUODQGLQJLV
DQRWKHUVLJQWKDWDOLJQPHQWPD\EHUHTXLUHG$YLVXDOREVHUYDWLRQRIERWKRIWKHZKHHOVIRUV\PPHWU\
RIDQJOHZLWKUHVSHFWWRWKHDLUSODQHFHQWHUOLQHZKHQYLHZHGIURPWKHIURQWPD\VKRZWKHQHHGIRU
DOLJQPHQW

0DQXIDFWXULQJGLIIHUHQFHVLQIRUPLQJRIWKHPDLQJHDUOHJVFDOOVIRUWKHXVHRIWDSHUHGVKLPVWRSURYLGH
WKHFRUUHFWFDPEHUDQGWRHLQRQWKHPDLQZKHHOV1RFDVWHUDGMXVWPHQWLVDYDLODEOH$GLDJUDPRIWKH
FDPEHUDQGWRHLQPHDVXUHPHQWVLVVKRZQLQ)LJXUH

7KHIROORZLQJSURFHGXUHVKRXOGEHIROORZHGWRDOLJQWKHPDLQZKHHOV

  7KHDLUFUDIWLVWREHIXHOHGEXWZLWKHPSW\KRSSHU7D[LWKHDLUFUDIWDVKRUWGLVWDQFHLQ
DVWUDLJKWOLQHWRDOORZWKHJHDUOHJVWRDVVXPHWKHQDWXUDOSRVLWLRQ7KHDLUFUDIWVKRXOG
EHRQSDYHGVXUIDFHRUIODWVPRRWKJURXQG

 $ORQJVWUDLJKWHGJHLVSODFHGDFURVVWKHIURQWRIWKHWLUHVDSSUR[LPDWHO\DWD[OHKHLJKW
7KLV VWUDLJKW HGJH LV VXSSRUWHG E\ EORFNV RU FDQV RU ERWK  $ LQFK RU ODUJHU
FDUSHQWHU¶VVTXDUHLVSODFHGDJDLQVWWKHVWUDLJKWHGJHDQGWKHRXWVLGHVXUIDFHRIWKHWLUH
DQGKHOGOHYHOZLWKWKHJURXQGDWWKHD[OHKHLJKW7KHWLUHVKRXOGEHVTXDUHZLWKWKH
VWUDLJKWHGJHRUKDYHXSWRLQFKWRHLQPHDVXUHGDWWKHFHQWHUOLQHRIWKHWUHDGRI
WKHWLUH
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


  &DPEHU LV WKHQ PHDVXUHG E\ SODFLQJ D SURWUDFWRU RQ WKH YHUWLFDO D[LV RI WKH ZKHHO
WKURXJKWKHD[OH&DPEHUVKRXOGPHDVXUHƒWRƒ

  6KRXOGWKHZKHHOIDLOWRFKHFNZLWKLQWKHVHOLPLWVWKHD[OHEROWVDUHUHPRYHGDQGWKH
WDSHUHGVKLPVURWDWHGGHOHWHGRUDGGHGWRXQWLOWKHZKHHOVFKHFNZLWKWKHVHOLPLWV:LWK
WKHDLUFUDIWKRLVWHGDQGWKHZKHHOVEDUHO\WRXFKLQJWKHJURXQGWRHLQVKRXOGPHDVXUH
WRDQGFDPEHUVKRXOGPHDVXUHLQFKHV

0DLQ*HDU6SULQJ

'HWDLOVRIWKHPDLQJHDUVSULQJDUHVKRZQLQ)LJXUH

7KHPDLQJHDUVSULQJLVSQ,WZLOOILWRQHLWKHUVLGHRIWKHDLUFUDIW,WLVPDFKLQHGRI(
DLUFUDIWTXDOLW\VWHHOIRUPHGKHDWWUHDWHGDQGVKRWSHHQHGIRUIDWLJXHUHVLVWDQFH,WLVVDQGEODVWHGDQG
SULPHG ZLWK DQ HSR[\ SULPHU 86 3DLQW 5. SLJPHQWHG HSR[\ SULPHU  DQG ILQLVKHG ZLWK
$OXPLJULS*\HOORZSRO\XUHWKDQHSDLQW

7KHLQERDUGDWWDFKPHQWRIWKHVSULQJWRWKHIXVHODJHIUDPHLVZLWKD1$6$EROW06&
ZDVKHUXQGHUWKHEROWKHDG EHVXUHWKHFKDPIHUHGVLGHRIWKHZDVKHULVQH[WWRWKHKHDG  RQHRU
PRUH 06 ZDVKHUV XQGHU WKH QXW $1 QXW DQG 06 FRWWHU  7KH EROW LV
LQVWDOOHG XSVLGH GRZQ DQG WRUTXH VKRXOG EH  LQFKSRXQGV WRUTXH ZUHQFK RQ EROW KHDG   $
VLPSOHDGDSWHUIRU\RXUWRUTXHZUHQFKLVDVKRUWSLHFHRIKH[VWRFNWRHQWHUWKHEROWKHDGDQGD
VRFNHWIRU\RXUWRUTXHZUHQFK

,WLVQHFHVVDU\WRKRLVWWKHDLUFUDIWDVGHVFULEHGXQGHU/,)7,1*$1'+2,67,1*ZKHQFKDQJLQJWKH
LQERDUGEROW%HVXUHWRJUHDVHWKHEROWZLWKJHQHUDOSXUSRVHJUHDVHEHIRUHLQVWDOOLQJ$OVREHVXUH
WKHEROWLVPDUNHG5RQWKHKHDGWRLQGLFDWHWKHWKUHDGVZHUHUROOHGDIWHUKHDWWUHDW

7KH JHDU VSULQJ LV FODPSHG WR WKH IXVHODJH IUDPH ZLWK D SQ  FODPS EORFN ZLWK RQH
1$6$EROWDQGRQH1$6'+EROW06&ZDVKHUVJRXQGHUWKHDIWEROWKHDGDQG
06&ZDVKHUVJRXQGHUWKHIRUZDUGEROWKHDG 0DNHVXUHWKHFKDPIHUHGVLGHRIWKHZDVKHU
LVXQGHUWKHEROWKHDG 9DULRXVQXPEHUVRI$URXQGVKLPZDVKHUVJREHWZHHQWKHFODPS
EORFNDQGIXVHODJHIUDPHDWWKHDIWEROWORFDWLRQ7KHIZGEROWXVHVSQ$VKLPV7KHVKLPV
DUHVHOHFWHGWRDOORZWKHEROWVWREHIXOO\WRUTXHGZLWKRXWEHQGLQJWKHFODPSEORFN7KH$VKLPV
DUHWKLFN,IWRRPDQ\WKLFNVKLPVDUHXVHGWKHJHDUFRQQHFWLRQZLOOEHWRRORRVHDQGZLOOUDWWOH
GXULQJWD[LRUODQGLQJ,IWKHJHDUOHJEHFRPHVORRVHGXULQJVHUYLFHHYHQWKRXJKWKHFODPSEORFNEROWV
DUHDWIXOOWRUTXHLWLVQHFHVVDU\WRUHPRYHDVKLP

7KHPHWKRGHPSOR\HGDWWKHIDFWRU\WRGHWHUPLQHWKHDPRXQWRIVKLPVUHTXLUHGLVWRLQVWDOOWKHFODPS
EORFN DQG IXOO\ WRUTXH WKH EROWV EHIRUH LQVWDOOLQJ WKH ODUJH LQERDUG EROW  7KH EORFN FKHFNHG IRU
VWUDLJKWQHVVZLWKDVPDOOVWUDLJKWHGJH DVL[LQFKVWHHOVFDOHLV2. WREHVXUHWKHEORFNLVQRWEHQWE\
QRWKDYLQJVXIILFLHQWVKLPV7KHQWKHJHDUOHJLVJUDVSHGDWWKHORZHUHQGJLYHQDQRXWERDUGWXJE\
KDQG$PRGHUDWHWXJVKRXOGPRYHWKHLQERDUGHQGRIWKHOHJGRZQIURPWKHDWWDFKEXVKLQJLQWKH
IXVHODJHIUDPHDGLVWDQFHRIWR,ILWLVDJUHDWHUGLVWDQFHWKDQWKHFRQQHFWLRQLVWRRORRVH
DQGIHZHUVKLPVDUHWULHGDQGWKHSURFHVVUHSHDWHG2QFHWKHSURSHUVKLPVDUHGHWHUPLQHGWKHEROWV
DUHORRVHQHGDQGWKHODUJHLQERDUGEROWLVLQVWDOOHG7KHQWKHFODPSEORFNEROWVDUHWLJKWHQHGWRIXOO
WRUTXH LQFKSRXQGVRQDIWEROWLQFKSRXQGVRQIZGEROW 
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


%H VXUH WR JUHDVH WKH EROWV EHIRUH LQVWDOOLQJ  7KH FODPS EORFN EROWV VKRXOG DOVR KDYH WKH OHWWHU 5
VWDPSHGRQWKHKHDGWRLQGLFDWHWKHWKUHDGVZHUHUROOHGDIWHUKHDWWUHDW

,IDQREVWUXFWLRQLVKLWZLWKWKHPDLQJHDUFKDQJHWKHIRUZDUGFODPSEROWLPPHGLDWHO\DQGFKHFNWKH
FODPSEORFNIRUVWUDLJKWQHVV7KHIRUZDUGFODPSEROWFDQEHFKDQJHGZLWKRXWKRLVWLQJWKHDLUFUDIW
7KHSDUNLQJEUDNHVKRXOGEHVHWDQGXVHFDUHVRDVQRWWRGLVWXUEWKHVKLPVWKDWDUHLQSODFH

6LQFHHDFKPDLQJHDUOHJLVVOLJKWO\GLIIHUHQWLQWKLFNQHVVDQGVLQFHHDFKFODPSEORFNLVPDFKLQHG
ZLWKLQDVSHFLILFWROHUDQFHLWLVQHFHVVDU\WRPDNHDVKLPVHOHFWLRQDVGHVFULEHGHDUOLHULIHLWKHUWKH
JHDUOHJRUWKHFODPSEORFNLVFKDQJHG

$VLQWKHFDVHRIWKHWDLOJHDUVSULQJWKHPDLQJHDUVSULQJZLOOIDWLJXHDQGEUHDNDWVRPHSRLQWLQWKH
OLIHRIWKHDLUFUDIW$JDLQWKHQXPEHURIKRXUVEHIRUHIDLOXUHZLOOYDU\FRQVLGHUDEO\DVVRPHRSHUDWRUV
PDNHPRUHODQGLQJVSHUKRXUWKDQRWKHUVRUFDUU\KHDYLHUORDGVRURSHUDWHIURPYHU\URXJKVWULSV
3LORWWHFKQLTXHLVDJDLQDIDFWRUDVVRPHSLORWVDUHYHU\URXJKRQDLUSODQHV)RUWKHVHUHDVRQVLWLV
LPSRVVLEOHWRSUHGLFWZKHQDIDLOXUHPLJKWRFFXU5HIHUWRWKH$,5:257+,1(66/,0,7$7,216
VHFWLRQIRUPDLQJHDUOLIH

:KHQWKHPDLQJHDUVSULQJVDUHFKDQJHGXVHQHZEROWVDQGQXWVDWDOOORFDWLRQV7KHD[OHDWWDFKEROWV
DUH1$6RUDQGVRPHWLPHV,QVWDOOWKHVSULQJVWRWKHIXVHODJHLQDFFRUGDQFHZLWKWKH
LQVWUXFWLRQVLQWKLVVHFWLRQDQGLQVWDOOWKHD[OHVWRWKHVSULQJXVLQJWKHSURFHGXUHWRFKHFNFDPEHUDQG
WRHLQRXWOLQHGLQWKHVHFWLRQRQ0$,1:+((/$/,*10(17%HVXUHWRPDNHORJERRNHQWULHV
ZKHQEROWVRUJHDUVSULQJVDUHFKDQJHG

:KHQRUGHULQJQHZPDLQJHDUVSULQJVRUFODPSEORFNVDOVRRUGHUHD$DQG$VKLPV
LQFDVHWKH\DUHQHHGHG,QDGGLWLRQWKHODUJHDOXPLQXPWDSHUHGVKLPVDWWKHD[OHDWWDFKPHQWPLJKW
QHHGDQDGGLWLRQRUFKDQJHVRLWZRXOGEHDJRRGLGHDWRRUGHUHDVKLPVDQGHD
VKLPVLQFDVHWKH\DUHQHHGHG

:KHQHYHUWKHDLUSODQHLVJURXQGORRSHGRULQYROYHGLQDQLQFLGHQWWKDWSXWVDSHUPDQHQWEHQGLQRQH
JHDUVSULQJWKHRWKHUVSULQJPXVWEHFKDQJHGDVLWPD\KDYHEHHQRYHUVWUHVVHG

7,('2:1,16758&7,216

7RKHOSSURWHFWDJDLQVWGDPDJHIURPVWURQJRUJXVW\ZLQGVZKHQSDUNHG\RXU$LU7UDFWRUDLUSODQH
VKRXOGEHWLHGGRZQWRJURXQGWLHGRZQIDFLOLWLHVXVLQJOLQHVPDGHRIQ\ORQURSHYLQ\OFRYHUHGFKDLQ
RUFDEOHRUQ\ORQZHEELQJ7KHOLQHVVKRXOGKDYHDWHQVLOHVWUHQJWKRIPRUHWKDQOEV

7KHDLUSODQHVKRXOGEHSDUNHGZLWKWKHQRVHSRLQWHGLQWRWKHDQWLFLSDWHGZLQGLISRVVLEOH7KHSDUNLQJ
EUDNHVKRXOGEHVHWDQGWKHPDLQODQGLQJJHDUWLUHVVKRXOGEHFKRFNHGIURQWDQGUHDU &$87,21
'RQRWVHWWKHSDUNLQJEUDNHZKHQWKHEUDNHVDUHRYHUKHDWHGRUGXULQJFROGZHDWKHUZKHQDFFXPXODWHG
PRLVWXUHPD\IUHH]HWKHEUDNHV7KHPDLQZKHHOVVKRXOGDOZD\VEHFKRFNHGZKHQSDUNHGEXWWKLVLV
HVSHFLDOO\LPSRUWDQWLIWKHSDUNLQJEUDNHLVQRWVHW ,QVWDOOWKHFRQWUROVWLFNORFNDQGUXGGHUORFNDQG
VHWDOOWULPWDEVWRQHXWUDOSRVLWLRQ,IDYDLODEOHLQVWDOODSLWRWWXEHFRYHUHQJLQHLQOHWFRYHUHQJLQH
H[KDXVWFRYHUV ZKHQFRRO DQGLQVWDOOWKHSURSHOOHUWHWKHU
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


6HFXUHWKHZLQJVWRWKHJURXQGDQFKRUVXVLQJWKHZLQJWLHGRZQULQJVORFDWHGEHQHDWKWKHIURQWVSDUV
RIHDFKZLQJDQGVHFXUHWRWKHJURXQGDQFKRUV7KHVHOLQHVVKRXOGEHRULHQWHGDVFORVHWRYHUWLFDODV
SRVVLEOH ZLWKLQGHJUHHVRIYHUWLFDO 7KHWDLOZKHHOLVVHFXUHGE\ZUDSSLQJDQGW\LQJWKHWLHGRZQ
OLQHDURXQGWKHWDLOZKHHOVSULQJ7KLVOLQHVKRXOGEHWLHGWRDJURXQGDQFKRUORFDWHGVOLJKWO\DIWRIWKH
WDLOZKHHO8VHFDUHWRDYRLGGDPDJLQJWKHWDLOZKHHOORFNPHFKDQLVP

,IZLQGVLQH[FHVVRIPSKIURPWKHUHDURIWKHDLUFUDIWDUHH[SHFWHGRUSRVVLEOHVXLWDEOHEORFNV
VKRXOGEHXVHGWRORFNWKHFRQWUROVXUIDFHV DLOHURQVHOHYDWRUVDQGUXGGHU LQSODFHDQGUHOLHYHVWUDLQ
RQWKHFRQWUROV\VWHPV9HU\ODUJHGDPDJLQJG\QDPLFORDGVDUHSRVVLEOHZLWKDJXVW\UHYHUVHIORZRI
DLURYHUWKHFRQWUROVXUIDFHV6KRXOGWKLVKDSSHQZLWKRXWEORFNVLQSODFHEHVXUHWRFKHFNDOOSXVK
URGVDQGURGHQGVLQWKHDLOHURQFRQWUROV\VWHPIRUGDPDJHEHIRUHIOLJKW

3523(//(50$,17(1$1&(

0DLQWHQDQFHRQ\RXU+DUW]HOOSURSHOOHULVWREHGRQHLQDFFRUGDQFHZLWKWKH3URSHOOHU2ZQHU¶V0DQXDO
DQG /RJ %RRN OLVWHG XQGHU ³,QVWUXFWLRQV IRU &RQWLQXHG $LUZRUWKLQHVV´ LQ WKH 'HVFULSWLRQ VHFWLRQ
(VWDEOLVKDURXWLQHPDLQWHQDQFHVFKHGXOHDQGDGKHUHWRLWDVFORVHO\DVSRVVLEOH7KHSURSHUSURSHOOHU
PDLQWHQDQFHPDQXDOIRUWKLVDLUSODQHLV³3URSHOOHU2ZQHU¶V0DQXDODQG/RJ%RRN´0DQXDO7KH
PDQXDOPD\EHREWDLQHGIURP

+DUW]HOO3URSHOOHU,QF
2QH3URSHOOHU3ODFH
3LTXD2KLR86$

3URSHOOHUSLWFKVHWWLQJVDUHGHJUHHV UHYHUVH GHJUHHV ORZSLWFK DWWKHVWDWLRQIRUWKH
$7SURSHOOHU6HH3URSHOOHU2ZQHU¶V0DQXDOIRUUHTXLUHGPDLQWHQDQFHDQGOLIHOLPLWHGSDUWV

7KHSURFHGXUHIRUFKHFNLQJWKHRYHUVSHHGJRYHUQRULVDVIROORZV

32:(5/(9(5,'/(
3523/(9(5 3 )XOOIRUZDUGIRU530
352329(563(('7(676:,7&+21
32:(5/(9(5$'9$1&(
3523530(1685(1SVWDELOL]HVDW“530
32:(5/(9(55('8&(WROHVVWKDQ530
352329(563(('7(676:,7&+2))DQG*8$5'('
32:(5/(9(5$'9$1&( (QVXUHWKDW530LVDYDLODEOH 
32:(5/(9(5,'/(

7KLVFKHFNVKRXOGEHPDGHDWKRXULQWHUYDOVDVFDOOHGRXWLQ6HFWLRQ,163(&7,216

 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


5287,1(0$,17(1$1&(,163(&7,21

7KHIROORZLQJLVDJXLGHWR\RXUURXWLQHPDLQWHQDQFHLQVSHFWLRQV,WLVQRWDQDEVROXWHEXWLQWHQGHGWR
EHDJXLGHWRKHOS\RXLQHVWDEOLVKLQJDVFKHGXOHWKDWZLOOPDLQWDLQ\RXUDLUFUDIWLQWKHSURSHUPDQQHU

7KH HQJLQH DQG SURSHOOHU VKRXOG EH LQVSHFWHG DQG PDLQWDLQHG LQ DFFRUGDQFH ZLWK WKH DSSURSULDWH
PDLQWHQDQFH PDQXDO OLVWHG XQGHU ³,QVWUXFWLRQV IRU &RQWLQXHG $LUZRUWKLQHVV´ LQ WKH 'HVFULSWLRQ
VHFWLRQ


 &+$1*(2,/,1$&&25'$1&(:,7+$33/,&$%/(35$77$1':+,71(<
 6(59,&(%8//(7,1

 5(029( $1' 5(3/$&( ,1'8&7,21 $,5 ),/7(5 %5$&.(77 )2$0 $,5
),/7(521/< $70217+,17(59$/6

 9(5,)<$&&85$&<2),77*$8*($77:2<($5,17(59$/6

 29(5+$8/67$57(5*(1(5$725$7+285,17(59$/6

 '<1$0,&%$/$1&(3523(//(5$7+285,17(59$/6

 5(3/$&($1$ 7+5861 25 61$1'68%6
$1'7+26(02',),(',$:6/$ 72548(72,1/%)25$1
$,1/%)25$7+285,17(59$/6

 5(3/$&(2529(5+$8/&200(5&,$/$,5&5$)7352'8&76
 31'$&8$725$7+285,17(59$/6

 5(3/$&(5(0%($5,1*217+($)7(1'2)7+()/$3386+52'6
 $7+285,17(59$/6

 29(5+$8/ 3523(//(5 3(5 +$57=(// 5(48,5(0(176 6HH +DUW]HOO
 6HUYLFH/HWWHU+&6/<5HYRUODWHU 

 &+$1*(0$,1*($5%2/76,1$&&25'$1&(:,7+6&+('8/(,1³0$,1
$1'7$,/*($5$77$&+%2/76´2)7+,66(&7,21

  &+$1*(7$,/*($5%2/76,1$&&25'$1&(:,7+6&+('8/(,1³0$,1
  $1'7$,/*($5$77$&+%2/76´2)7+,66(&7,21

 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


67$7,&6<67(0

7KHVWDWLFSRUWVRQWKH$7DUHWKHORZSRLQWVRIWKHV\VWHPDQGDUHQRUPDOO\VHOIGUDLQLQJ7KHUH
DUH³7´ILWWLQJVRQWKHUHDUIDFHRIWKHVWDWLFSRUWEXWWRQV7KHGRZQZDUGIDFLQJDUPRIWKH³7´ILWWLQJV
DUHSOXJJHG7KHVHSOXJVPXVWEHUHPRYHGWRGUDLQUHVLGXDOPRLVWXUHLQWKHVWDWLFV\VWHPOLQHV

6725$*(

:KHQOHDYLQJ\RXUDLUSODQHRXWVLGHEHVXUHWRFRYHUWKHH[KDXVWSRUWVDQGNHHSWKHSURSHOOHUWHWKHUHG
7KHSURSHOOHUQHHGVWREHWHWKHUHGWRSUHYHQWWKHZLQGPLOOLQJRIWKHSRZHUVHFWLRQ

7KHUHDVRQIRUWKLVLVWKDWWKHRLOSXPSLVLQWKHUHDURIWKHHQJLQHDQGZLOOQRWWXUQZLWKWKHSURSDQG
WKHUHIRUHZLOOQRWSURYLGHRLOWRWKHIURQWRIWKHHQJLQH

675,33,1*$1'5(3$,17,1*

6WULSSLQJDQG5HSDLQWLQJ$OXPLQXP3DUWV
 
 7KHSDLQWVWULSSHUPRVWHIIHFWLYHRQXUHWKDQHSDLQWLV7XUFR

 7KHVWULSSHULVHLWKHUVSUD\HGRQZLWKDEDUUHOSXPSRUDSSOLHGRQVPDOOSDUWVZLWKDODUJHSDLQW
EUXVK  ,I VSUD\HG RQ EH VXUH WR FRQVLGHU ZLQG GLUHFWLRQ VR WKDW RYHUVSUD\ ZLOO QRW GDPDJH
VXUURXQGLQJYHKLFOHVRUDLUFUDIW

 :KHQDSSO\LQJVWULSSHUZHDUSURWHFWLYHFORWKLQJDQGVDIHW\JRJJOHV

 $SSO\DPHGLXPWRKHDY\FRDWRIVWULSSHU7HPSHUDWXUHVKRXOGEHƒ)RUZDUPHUIRUEHVWUHVXOWV
$OORZVWULSSHUWRUHDFWZLWKSDLQWDQGUHPRYHZLWKVSHFLDOEUXVKKDYLQJVWLIIEULVWOHVWKDWZLOOQRW
VRIWHQZLWKVWULSSHU

 6SUD\RQDVHFRQGOLJKWFRDWRIVWULSSHUDVQHFHVVDU\DQGUHPRYHUHPDLQLQJSDLQWZLWKEUXVK

 5LQVHWKRURXJKO\ZLWK DSSUR[ƒ) ZDWHUXQGHUSUHVVXUH%HVXUHHQWLUHILOPRIVWULSSHULV
UHPRYHG

 $SSO\$FLG(WFKZLWK6FRWFK%ULWHSDGVDQGVFUXEPHWDOVXUIDFHVWKRURXJKO\5LQVHZLWK FROG
ZDWHU

 %HIRUHWKHSDUWLVGU\DSSO\JHQHURXVDPRXQWVRI$ORGLQHZLWKDFOHDQZKLWHUDJ7KH$ORGLQH
VKRXOGDFWZLWKLQWZRRUWKUHHPLQXWHVDQGZKHQULQVHGRIIZLWKFROGZDWHUVKRXOGOHDYHDYHU\
OLJKWJROGVXUIDFH'RQRWOHDYHWKH$ORGLQHWRRORQJRUDOORZLWWRGU\DVDGDUNEURZQILOPZLOO
UHVXOWZKLFKLVXQGHVLUDEOHDQGVKRXOGEHUHPRYHGDQGWKHSDUWUHSURFHVVHG
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


 :KHQWKHSDUWLVFRPSOHWHO\GU\DSSO\DFRDWRI+LJK6ROLGV(SR[\3ULPHU

  0L[LQJ UDWLR LV  SDUWV 3LJPHQWHG &RPSRQHQW DQG  SDUW $GGXFW  $OZD\V IROORZ
PDQXIDFWXUHUUHFRPPHQGHGPL[LQJUDWLRV

  6XUIDFHV PXVW EH FOHDQ DQG IUHH RI JUHDVH GLUW RLO UXVW ILQJHUSULQWV DQG RWKHU
FRQWDPLQDQWVWRLQVXUHRSWLPXPDGKHVLRQDQGSHUIRUPDQFHSURSHUWLHV3DUWVPD\EH
FOHDQHGXVLQJDQDOFRKROVRDNHGVRIWUDJ

  $SSO\SULPHUXVLQJFRQYHQWLRQDOVSUD\HTXLSPHQWRU+9/3VSUD\HTXLSPHQW

  ,GHDOFRDWLQJWKLFNQHVVLVPLOVGU\

  6SUD\FRDWLQJVZLWKVPRRWKHYHQVWURNHV5XQVDQGVDJVDUHWREHDYRLGHG

  $SSOLFDWLRQWHPSHUDWXUHVKRXOGEHEHWZHHQƒƒ)

  (SR[\SULPHUVKRXOGEHDOORZHGWRIODVKEHIRUHUHFRDWLQJZLWKHSR[\SULPHU

  $LUGU\WLPHWRWRSFRDWDWƒƒ)LVKRXUVPLQLPXP

  )XOOFXUHLVDFKLHYHGDIWHUDSSUR[LPDWHO\KRXUVRIDLUGU\

  ,ISDUWVDUHDOORZHGWRGU\LQH[FHVVRIKRXUVEHIRUHWRSFRDWDSSOLFDWLRQWKH\PXVW
EHVDQGHGDQGUHSULPHG

$SSO\8UHWKDQH7RSFRDWRQ3ULPHG3DUWV

  0L[LQJUDWLRLVSDUWVEDVHFRPSRQHQWSDUWKDUGHQHUDQGSDUWDFWLYDWRU$OZD\V
IROORZPDQXIDFWXUHUUHFRPPHQGHGPL[LQJUDWLRV

  6XUIDFHV PXVW EH FOHDQ DQG IUHH RI JUHDVH GLUW RLO UXVW ILQJHUSULQWV DQG RWKHU
FRQWDPLQDQWVWRLQVXUHRSWLPXPDGKHVLRQDQGSHUIRUPDQFHSURSHUWLHV3DUWVPD\EH
FOHDQHGXVLQJDQDOFRKROVRDNHGOLQWIUHHFRWWRQFORWK

  3DUWVVKRXOGEHZLSHGZLWKDXUHWKDQHJUDGHWDFNFORWKDQGWKHQDLUEORZQWRUHPRYH
DQ\IRUHLJQPDWHULDOV

  0L[ WRSFRDW LQ DFFRUGDQFH ZLWK PDQXIDFWXUHU LQVWUXFWLRQV  'R QRW GHYLDWH IURP
PDQXIDFWXUHUUHFRPPHQGHGPL[LQJUDWLRV

  7KH SDLQW ERRWK WHPSHUDWXUH VKRXOG EH PDLQWDLQHG EHWZHHQ ƒƒ)  ,GHDO ERRWK
FRQGLWLRQVDUHƒƒ)DQGDUHODWLYHKXPLGLW\RI

  $SSO\WRSFRDWXVLQJFRQYHQWLRQDOVSUD\HTXLSPHQWRU+9/3VSUD\HTXLSPHQW
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


  ,GHDOFRDWLQJWKLFNQHVVLVPLOVGU\

  6SUD\FRDWLQJVZLWKVPRRWKHYHQVWURNHV5XQVDQGVDJVDUHWREHDYRLGHG

  &XUHWLPHLVKRXUVWRWDSHDWƒ)RUKRXUVWRWDSHDWƒ)

  &OHDQHTXLSPHQWXVLQJ.HWRQH 0(. VROYHQW'RQRWDOORZPDWHULDOWRFXUHLQVLGH
VSUD\HTXLSPHQW

3ULPLQJ$OXPLQXP3DUWVZLWK&KURPDWHG$ON\G3ULPHU

3DUWVWKDWGRQRWUHFHLYHDILQLVKFRDWRISDLQW VXFKDVZLQJULEV DUHSULPHGZLWK&KURPDWHG$ON\G
3ULPHUFRQIRUPLQJWRVSHF773%7\SH,&ODVV&6XUIDFHVPXVWEHFOHDQDQGIUHHRIJUHDVH
GLUW RLO UXVW ILQJHUSULQWV DQG RWKHU FRQWDPLQDQWV WR LQVXUH RSWLPXP DGKHVLRQ DQG SHUIRUPDQFH
SURSHUWLHV3DUWVPD\EHFOHDQHGXVLQJDQDOFRKROVRDNHGVRIWUDJ)ROORZWKH$FLG(WFKDQG$ORGLQH
SURFHVVGHVFULEHGLQWKH³6WULSSLQJDQG5HSDLQWLQJ$OXPLQXP3DUWV´VHFWLRQDERYH$SSO\DOLJKW
FRDWRI&KURPDWHG$ON\G3ULPHUWKLQQHGZLWK7ROXHQH5.RU;\OHQH5.LIQHFHVVDU\WRDFKLHYH
SURSHUYLVFRVLW\6SUD\FRDWLQJVZLWKVPRRWKHYHQVWURNHV5XQVDQGVDJVDUHWREHDYRLGHG7KH
SULPHUDSSOLFDWLRQVKRXOGEHDWKLQILOP

6WULSSLQJDQG5HSDLQWLQJ6WHHO3DUWV

6WHHOSDUWVDUHWREHFOHDQHGRIDOORLOVDQGWKHQVDQGEODVWHG,IVDQGEODVWLQJLVQRWDYDLODEOHFOHDQ
WKHSDUWWKRURXJKO\ZLSHGU\VDQGDQGHWFKZLWKDPL[WXUHRIJDO,VRSURS\O$OFRKRODQGIOXLG
R]RIFRQFHQWUDWHG3KRVSKRULFDFLG ,IDSSO\LQJILQLVKFRDWRYHUEDUHPHWDOSULPHILUVWZLWK+LJK
6ROLGV (SR[\ 3ULPHU VHH LQVWUXFWLRQV DERYH  DQG SDLQW XVLQJ 8UHWKDQH 7RSFRDW SURFHVV VHH
LQVWUXFWLRQVDERYH 
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


0DWHULDOV8VHGIRU6WULSSLQJ3DLQWLQJDQG3UHVHUYDWLRQ

8UHWKDQH7RSFRDW0DWHULDOV


3DUW1R 6KHUZLQ:LOOLDPV  'HVFULSWLRQ $PRXQWXVHGSHU$&
&0 <HOORZILQLVKFRDW JDO
= %ODFNILQLVKFRDW JDO
= %OXHILQLVKFRDW JDO
&0 +DUGHQHU JDO
&0$ $FWLYDWRU ƒ)  JDO
&0 VORZ RU&0 8UHWKDQH5HGXFHU JDO
&0 3ULPHU3LJPHQWHG&RPSRQHQW JDO
&0 6WDQGDUG(SR[\$GGXFW JDO
&0 3ULPHU5HGXFHU JDO


&KURPDWHG$ON\G3ULPHU0DWHULDOV


3DUW1R 'HVFULSWLRQ $PRXQWXVHGSHU$&
,773% <HOORZ]LQFFKURPDWHSULPHU JDO
,777& 7ROXHQH 5.  JDO


6XUIDFH3UHSDUDWLRQ0DWHULDOV

3DUW1R 'HVFULSWLRQ $PRXQWXVHGSHU$&
7XUFR 6WULSSHU JDO
 $FLG(WFK JDO
 $ORGLQH OEV
 ,VRSURS\O$OFRKRO JDO
 3KRVRSKRULF$FLG IOXLGR]



,QWHUQDO2LOLQJ6WHHO3DUWV

3DUW1R 'HVFULSWLRQ $PRXQWXVHGSHU$&
 /LQVHHG2LO JDO

 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


7$,//$1',1**($5

7DLOZKHHO

7KHWDLOZKHHOLVD&OHYHODQGSQ&.HHSLQJWKHEHDULQJVSURSHUO\OXEULFDWHGLVWKHNH\WR
ORQJEHDULQJOLIH$JUHDVHILWWLQJLVLQVWDOOHGLQWKHVLGHRIWKHZKHHO'HWDLOVRIWKHWDLOZKHHODUH
VKRZQLQ)LJXUH

7RUHPRYHWKHWDLOZKHHOMDFNWKHZKHHOFOHDURIWKHJURXQGSHU/,)7,1*$1'-$&.,1*LQVWUXFWLRQV
DQGUHPRYHWKHORQJ$1&$EROWWKDWDWWDFKHVWKHD[OHWRWKHIRUN1RWHWKHPHWKRGRIVDIHW\ZLUH
RQWKHODUJHVWDLQOHVVMDPQXWDQGFXWWKHZLUHORRVHIURPWKHIRUN7KHWDLOZKHHOLVQRZIUHHDQGUHDG\
IRUGLVDVVHPEO\%DFNRIIWKHMDPQXWIURPWKHD[OHDQGUHPRYHWKHD[OH,QVSHFWWKHD[OHIRUZHDUDW
WKHEHDULQJSRVLWLRQVDVLQVXIILFLHQWJUHDVLQJSURFHGXUHVZLOOFDXVHWKHEHDULQJWRWXUQRQWKHD[OHDQG
UXLQERWKSDUWV,QVSHFWWKH$1EROWIRUZHDUDQGVWUDLJKWQHVVDQGVOLGHWKHEROWWKURXJKWKHIRUNWR
FKHFN WKH KROH LQ WKH IRUN IRU ZHDU  7KHUH VKRXOG EH QR ZHDU LQ WKH IRUN KROHV VLQFH WKHUH LV QR
PRYHPHQWEHWZHHQIRUNDQGEROW,IWKHWLUHLVWREHUHPRYHGGHIODWHDQGUHPRYHWKHEROWVKROGLQJWKH
ZKHHOKDOYHVWRJHWKHU

&OHDQDOOSDUWVDQGUHDVVHPEOH3DUWLDOO\LQIODWHWKHWXEHWRNHHSIURPSLQFKLQJLW7DLOZKHHOEHDULQJV
DUH7LPNHQFRQH WKHSDUWZLWKWKHUROOHUV DQG&3FXS WKHSDUWSUHVVHGLQWRWKHZKHHO
KDOI +DQGSDFNWKHEHDULQJVZLWKJHQHUDOSXUSRVHJUHDVH0,/*DQGLQVWDOOZKHHORQWKH
D[OH  ,QVWDOO WKH  MDP QXW DQG WRQJXH ZDVKHU RQ WKH D[OH ZLWK WKH URXQG VKRXOGHU
LQERDUGDQGWLJKWHQXQWLODOOEHDULQJVODFNLVUHPRYHGEXWWKHZKHHOLVIUHHWRWXUQ,QIODWHWKHWLUHWR
SVL*UHDVHWKHD[OHEROWDQGLQVWDOOZKHHODQGD[OHDVVHPEO\RQWKHIRUN7RUTXHWKHQXWWR
LQFKSRXQGV6DIHW\WKHMDPQXWDJDLQVWWKHURWDWLRQRIWKHZKHHOZLWK06&VWDLQOHVVVDIHW\
ZLUH

7DLO:KHHO)RUN

'HWDLOVRIWKHWDLOZKHHOIRUNDUHVKRZQLQ)LJXUH7KHWDLOZKHHOIRUNPD\EHUHPRYHGIURPWKH
KRXVLQJE\UHPRYLQJWKHVLQJOH$1&$VWDLQOHVVEROWIURPWKHDUPDVVHPEO\WKDWFRQQHFWVWRWKH
FHQWHULQJVSULQJV:LWKWKHIRUNUHPRYHGFKHFNIRUZHDURQWKHVSLQGOHDWWKHEURQ]HEHDULQJORFDWLRQ
$OVRFKHFNIRUFRQGLWLRQRIWKHVWHHOEXVKLQJWKDWWKHORFNSLQGURSVLQWR7KLVEXVLQJLVSUHVVHGLQWR
WKHVWHHOSODWHDWWKHERWWRPHQGRIWKHVSLQGOHDQGVWDNHGLQIRXUSODFHVRQHDFKVLGHRIWKHSODWHZLWK
DFHQWHUSXQFK7KLVKROGVWKHEXVKLQJLQSODFHVLQFHLWKDVDEHYHOHGHGJHRQERWKVLGHV7KLVEXVKLQJ
LVSQ([FHVVLYHZHDURQWKHIRUNVSLQGOHDWWKHEURQ]HEHDULQJORFDWLRQLVLQGLFDWLRQWKDW
JUHDVHLVQRWUHDFKLQJWKHSURSHUDUHD

7RJUHDVHWKHEURQ]HEHDULQJSURSHUO\MDFNWKHWDLOZKHHOFOHDURIWKHJURXQGDQGDSSO\0,/*
JUHDVHDWWKHXSSHUILWWLQJRQWKHKRXVLQJDQGURWDWHWKHIRUNXQWLOJUHDVHLVUXQQLQJRXWRIWKHIXOO
SHULPHWHURIWKHEHDULQJV([FHVVLYHZHDULQWKHVSLQGOHZLOOUHTXLUHDQHZIRUNDVVHPEO\ZKLFKLVSQ
DQGLQFOXGHVWKHVWHHOORFNSLQEXVKLQJ7KHFHQWHULQJVSULQJVDUHSQDQGDWWDFKWR
DSQEUDFNHWZKLFKZHDUVRQDSQEXVKLQJ7KHEROWLVD$1&$
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


7DLO:KHHO)RUN+RXVLQJ

'HWDLOVRIWKHWDLOZKHHOIRUNKRXVLQJDUHVKRZQLQ)LJXUH

7KHKRXVLQJLVDWWDFKHGWRWKHWDLOVSULQJZLWKWZR1$6'+EROWVDQG06&VDIHW\ZLUH
WLHVWKHEROWKHDGVWRJHWKHU7KHVHEROWVKDYHDWHQGHQF\WRORRVHQLQVHUYLFHSDUWLFXODUO\LQWKHILUVW
KRXUVRIRSHUDWLRQDVSDLQWEHWZHHQPDWLQJVXUIDFHVLVFRPSUHVVHG$WKRXULQWHUYDOVWKHWDLO
ZKHHOVKRXOGEHMDFNHGFOHDURIWKHJURXQGDQGZLWKWKHORFNLQJSLQLQSODFHJLYHWKHWDLOZKHHOD
YLJRURXVWXJIURPVLGHWRVLGHWRFKHFNIRUPRYHPHQWEHWZHHQWKHKRXVLQJDQGWKHVSULQJ7RUTXHWKH
EROWVWRLQFKSRXQGV)RUURZFURSRSHUDWLRQIURPVPRRWKVWULSVWKHVHEROWVVKRXOGEHUHSODFHG
DWOHDVWHYHU\KRXUVDQGIRUULFHRSHUDWLRQIURPURXJKVWULSVVKRXOGEHFKDQJHGHYHU\KRXUV
RURQFHD\HDU%HVXUHWRJUHDVHWKHEROWVEHIRUHLQVWDOODWLRQZLWK*3JUHDVHDQGDQDGGHGSUHFDXWLRQ
ZRXOGEHWRDSSO\JUHDVHWRWKHWKUHDGVRIWKHKRXVLQJWRSUHYHQWWKHEROWIURPVHL]LQJ

$ 7LPNHQ UROOHU EHDULQJ LV LQVWDOOHG DW WKH ORZHU HQG RI WKH IRUN KRXVLQJ DVVHPEO\  7KLV EHDULQJ
FRQVLVWVRID7LPNHQFRQHDQGDFXS7KHVHDOLVDSQ7KHODUJHEURQ]HEXVKLQJ
LQVLGHWKHKRXVLQJLVSQ XSSHU 7KHEXVKLQJLVSUHVVHGLQWRSODFHDQGPD\EHGULYHQRXW
ZLWKDSLQSXQFK7KHKRXVLQJDVVHPEO\LVSQZKLFKLVOHVVEXVKLQJEHDULQJVHDODQGJUHDVH
ILWWLQJ

7DLO:KHHO/RFN3LQDQG+RXVLQJ

'HWDLOVRIWKHWDLOZKHHOORFNSLQKRXVLQJDUHVKRZQLQ)LJXUH

7KHORFNSLQKRXVLQJLVSQDQGDWWDFKHVWRWKHVWHHOSODWHRQWKHORZHUHQGRIWKHIRUNKRXVLQJ
ZLWKIRXUFRXQWHUVXQNVFUHZV7KHIRXUKROHVLQWKHEDVHRIWKHORFNSLQKRXVLQJDUHRYHUVL]HWRDOORZ
DGMXVWPHQWRIWKHORFNLQJSLQ

,IWKHDLUFUDIWWHQGVWRVWHHUWRWKHOHIWRUWRWKHULJKWRQWKHJURXQGZLWKWKHORFNSLQHQJDJHGLWLV
QHFHVVDU\WRUHSRVLWLRQWKHORFNSLQKRXVLQJ-DFNWKHWDLOZKHHOFOHDURIWKHJURXQGOLIWWKHORFNSLQ
XSDQGVZLYHOWKHIRUNWRRQHVLGHVRWKDWWKHIRXUVFUHZKHDGVDUHH[SRVHG0DNHDSHQFLOPDUNDORQJ
WKHHGJHRIWKHORFNSLQKRXVLQJSODWHIRUDUHIHUHQFHDQGHVWLPDWHWKHDPRXQWRIPRYHPHQWIRUWKH
ORFNSLQKRXVLQJ/RRVHQWKHVFUHZVDQGPRYHWKHKRXVLQJWKHGHVLUHGGLUHFWLRQ6ZLYHOWKHIRUN
EDFNLQWRSRVLWLRQDQGDOORZWKHORFNLQJSLQWRHQJDJHWKHIRUNWKHQWLJKWHQWKHWZRRXWERDUGVFUHZV
7KHQURWDWHWKHIRUNEDFNVRWKDWWKHWZRLQERDUGVFUHZVFDQEHWLJKWHQHG&KHFNWKHORFNSLQDJDLQWR
VHHWKDWLWIUHHO\HQJDJHVWKHIRUN7D[LWKHDLUFUDIWLQDQRZLQGFRQGLWLRQRULIWKHUHLVDOLJKWZLQG
WD[LERWKXSZLQGDQGGRZQZLQGZLWKWKHUXGGHUSHGDOVLQWKHQHXWUDOSRVLWLRQDQGWKHVWLFNEDFNVR
WKDW\RXDUHVXUHWKHORFNSLQLVHQJDJHG.HHSDGMXVWLQJWKHORFNLQJSLQKRXVLQJXQWLOWKHDLUFUDIWZLOO
WD[LLQDVWUDLJKWOLQH

'XULQJDQQXDOLQVSHFWLRQV RUPRUHIUHTXHQWO\LIUHTXLUHG UHPRYHWKHKRXVLQJDQGVOLGHRXWWKHORFNLQJ
SLQWRFKHFNLWIRUZHDUDQGVWUDLJKWQHVV7KHFRPSUHVVLRQVSULQJLQVLGHWKHKRXVLQJVKRXOGDOVREH
FKHFNHGIRUEURNHQFRLOV7KHORFNLQJSLQLVSQDQGWKHVSULQJLVSQ

 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


7DLO*HDU6SULQJ

7KHWDLOJHDUVSULQJLVVKRZQLQ)LJXUH

7KHWDLOJHDUVSULQJLVSQ,WLVPDFKLQHGRI(DLUFUDIWTXDOLW\VWHHOIRUPHGKHDWWUHDWHG
DQGVKRWSHHQHGIRUIDWLJXHUHVLVWDQFHDQG0DJQDIOX[HGIRUFUDFNV,WLVVDQGEODVWHGDQGSULPHGZLWK
DQ HSR[\ SULPHU 86 3DLQW 5.  DQG ILQLVKHG ZLWK $OXPLJULS * \HOORZ SRO\XUHWKDQH
SDLQW

7KHIRUZDUGDWWDFKPHQWRIWKHVSULQJWRWKHIXVHODJHIUDPHLVZLWKDQ1$6EROW,WLVFODPSHG
DWWKHUHDUDWWDFKPHQWZLWKDSQFODPSEORFNZKLFKDWWDFKHVWRWKHIXVHODJHIUDPHZLWKWZR
1$6EROWV7KHUHLVDSQDOXPLQXPSDGWKDWLVLQVWDOOHGEHWZHHQWKHFODPSEORFNDQG
WKHVSULQJWRDOORZWKHVSULQJWRZRUNZLWKRXWSXWWLQJVHFRQGDU\ORDGVLQWRWKHIXVHODJHIUDPHRUDWWDFK
EROWV

7KHUHDUHWKLFNVKLPV SQ$ DQGVRPHWLPHVDVSDFHUZDVKHUORFDWHGEHWZHHQWKHFODPS
EORFNDQGWKHIXVHODJHIUDPH'XULQJDQQXDOLQVSHFWLRQVWKHWDLOJHDUVKRXOGEHMDFNHGDWWKHVWDELOL]HU
VWUXWILWWLQJDVGHVFULEHGXQGHU/,)7,1*$1'-$&.,1*DQGWKHWDLOVSULQJFKHFNHGIRUORRVHQHVVDW
WKHFODPSEORFN/RRVHQHVVFDQEHHOLPLQDWHGE\UHPRYLQJRQHRUPRUHRIWKHVKLPVIURPXQGHUWKH
FODPSEORFN:LWKWKHFODPSEORFNUHPRYHGDOVRFKHFNWKHDOXPLQXPSDGIRUFRQGLWLRQ

%HVLGHVVDYLQJDSRVVLEOHIDWLJXHIDLOXUHWKHIRUZDUGEROWWHQGVWRIUHH]HXSLIQRWFKDQJHGRIWHQ%H
VXUHWRJUHDVHWKHEROWDQGVQXJWKHQXWRQO\ QRWRUTXH DVWKHVSULQJPXVWPRYHRQWKHEROW7RUTXH
WKHFODPSEROWVWRLQFKSRXQGV WRUTXHZUHQFKRQEROWKHDG DQGPDNHVXUHWKHUHDUHVXIILFLHQW
VKLPVEHWZHHQWKHFODPSEORFNDQGWKHIXVHODJHIUDPHWRSUHYHQWEHQGLQJWKHFODPSEORFNDVWKHEROWV
DUHWRUTXHG

7KHWDLOJHDUVSULQJZLOOIDWLJXHDQGEUHDNDWVRPHSRLQWLQWKHOLIHRIWKHDLUFUDIW7KHQXPEHURIKRXUV
EHIRUHIDLOXUHZLOOYDU\FRQVLGHUDEO\DVVRPHRSHUDWRUVPDNHPDQ\PRUHODQGLQJVSHUIOLJKWKRXUWKDQ
RWKHUVRUFDUU\KHDYLHUORDGVRURSHUDWHIURPYHU\URXJKVWULSV3LORWWHFKQLTXHLVDIDFWRUDOVRVLQFH
VRPHSLORWVDUHYHU\URXJKRQDLUSODQHV)RUWKHVHUHDVRQVLWLVQRWSRVVLEOHWRSUHGLFWZKHQDIDLOXUH
PLJKWRFFXU6HH$,5:257+,1(66/,0,7$7,216VHFWLRQ

8VXDOO\WKHWDLOVSULQJZLOOVKRZVLJQVRI\LHOGLQJMXVWSULRUWRIDLOXUHDQGWKHWDLORIWKHDLUFUDIWZLOOVLW
DVOLJKWELWORZHUWRWKHJURXQGWKDQSUHYLRXVO\:KHQRUGHULQJDQHZWDLOJHDUVSULQJDOVRRUGHUWZR
HD $VKLPVLQ FDVHWKH\DUHQHHGHG 'HVWUXFWLRQRIWKHROG VSULQJ ZLWK D FXWWLQJWRUFKLV
UHFRPPHQGHG

7,0(/,0,7('3$576

7LPHOLPLWHGSDUWVDUHWKRVHSDUWVUHFRPPHQGHGIRUUHSODFHPHQWDWWKHWLPHVLQGLFDWHGEHORZ)DLOXUH
WRUHSODFHWKHVHSDUWVDWWKHWLPHVVKRZQPD\UHVXOWLQXQH[SHFWHGIDLOXUHRIWKHVHSDUWVGXULQJDLUFUDIW
RSHUDWLRQ
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


0DLQDQG7DLO*HDU$WWDFK%ROWV

+RXUV VKRZQ LQ WKH FKDUW EHORZ DUH IRU QRUPDO RSHUDWLRQV LQ URZFURS RU ULFH RSHUDWLRQV  ,I \RXU
EXVLQHVVFRPELQHVERWKW\SHVRIIO\LQJXVHDQDYHUDJHRIWKHWZRILJXUHV,I\RXUVWULSVDUHURXJKHU
WKDQQRUPDOWKHQFXWWKHKRXUVVKRZQLQKDOI

%ROW/RFDWLRQ %ROW7LPH/LPLW %ROW7LPH/LPLW 7RUTXH
%ROW6L]H
2Q)XVHODJH  +RXUV 5RZ&URS  +RXUV 5LFH2SQV  /E,Q 
)ZGPDLQJHDU±
1$6$   
&ODPSEORFN
$IWPDLQJHDU±
1$6'+   
&ODPSEORFN
,QERDUGPDLQJHDU
1$6$   
/DUJHEROW
$[OH$WWDFK 1$6   
7DLO6SULQJ±&ODPS
1$6   
%ROWV
7DLO6SULQJ±
1$6   1RQH
)RUZDUG%ROW
EROWVDIWHQG±7DLO
1$6'+   
VSULQJ

7DLO6SULQJ

,WDSSHDUVWKDWWKHWDLOVSULQJVKRXOGEHFKDQJHGDERXWHYHU\KRXUVIRUZRUVWFRQGLWLRQVRIULFH
RSHUDWLRQVIURPURXJKVWULSVDQGHYHU\KRXUVIRUWKHEHVW FRQGLWLRQVRIURZFURSZRUNIURP
VPRRWKVWULSV(DFKRSHUDWRUVKRXOGGHWHUPLQHDWZKDWSRLQWLQEHWZHHQWKHVHH[WUHPHVKLVRSHUDWLRQ
ILWVDQGFKDQJHWKHWDLOVSULQJDWWKHDSSURSULDWHLQWHUYDO

0DLQ*HDU6SULQJ

,QWKHLQWHUHVWRIVDIHW\DQGWKHKLJKILQDQFLDOFRQVHTXHQFHVRIDEURNHQPDLQJHDUOHJLWZRXOGEH
DGYLVDEOHWR WDNH DKLJKO\ FRQVHUYDWLYH DSSURDFKDQGFKDQJHWKHPDLQ JHDUVSULQJVZHOOEHIRUHWKH
SUREDEOHIDWLJXHOLIH7KHPDLQJHDUVSULQJVVKRXOGEHFKDQJHGDIWHUKRXUVRUODQGLQJV
ZKLFKHYHUFRPHVILUVW6HH/,)(/,0,7('$,5)5$0(3$576LQ6HFWLRQ$,5:257+,1(66
/,0,7$7,216

$P6DIH$LUEDJ6\VWHP LILQVWDOOHG 

,IWKH$P6DIH$LUEDJ6\VWHPLVLQVWDOOHGWKHIROORZLQJDUHWLPHOLPLWHGSDUWV

7KH(0$ (OHFWURQLFV0RGXOH$VVHPEO\ LVWREHUHPRYHGIRUGLVSRVDODIWHU

x DPD[LPXPVWRUDJHSHULRGRIIRXUWHHQ  \HDUVFDOFXODWHGIURPWKHPRQWKRIPDQXIDFWXUH
RU
x XSRQH[SLUDWLRQRIWKHVHUYLFHOLIHGHILQHGDVWKHWRWDOVXPRIVWRUDJHOLIHDQGLQVWDOODWLRQOLIH
ZKLFKPXVWQRWH[FHHGIRXUWHHQ  \HDUVFDOFXODWHGIURPWKHPRQWKRIPDQXIDFWXUH
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


8SRQH[SLUDWLRQRIWKHVHUYLFHOLIH WRWDOOLIH WKH(0$FDQQRWEHUHQHZHG

7KH,QIODWRU$VVHPEO\LVWREHUHPRYHGDQGUHWXUQHGWR$P6DIH$YLDWLRQIRUGLVSRVDODIWHU

x D PD[LPXP VWRUDJH SHULRG RI WHQ   \HDUV FDOFXODWHG IURP WKH PRQWK RI PDQXIDFWXUH DV
LQGLFDWHGLQWKHH[SLUDWLRQGDWHVWDPSHGRQWKHJDVF\OLQGHURU
x XSRQH[SLUDWLRQRIWKHVHUYLFHOLIHGHILQHGDVWKHWRWDOVXPRIVWRUDJHOLIHDQGLQVWDOODWLRQOLIH
ZKLFKPXVWQRWH[FHHGWHQ  \HDUVFDOFXODWHGIURPWKHPRQWKRIPDQXIDFWXUHDVLQGLFDWHGLQ
WKHH[SLUDWLRQGDWHVWDPSHGRQWKHJDVF\OLQGHU

8SRQH[SLUDWLRQRIWKHVHUYLFHOLIH WRWDOOLIH WKH,QIODWRU$VVHPEO\FDQQRWEHUHQHZHG

,QDGGLWLRQWKH(0$LVWREHUHPRYHGDQGUHWXUQHGWR$P6DIH$YLDWLRQIRUUHIXUELVKPHQWDIWHU

x DSHULRGRIVHYHQ  \HDUVFDOFXODWHGIURPWKHPRQWKRIPDQXIDFWXUHUHJDUGOHVVRIVWRUDJHRU
VHUYLFHWLPHRUFRPELQDWLRQRIERWK

7KH(0$FDQRQO\EHUHQHZHGE\$P6DIH$YLDWLRQ

7,5(,1)/$7,21

7KHPDLQWLUHVDUHLQIODWHGWRDSUHVVXUHRISVL XQORDGHG RUSVL ORDGHG 7KHWDLOZKHHOWLUHLV
LQIODWHGWRDSUHVVXUHRISVL ORDGHGRUXQORDGHG 
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


72548(9$/8(6)256+2386(

7RUTXHYDOXH LQFK3RXQGV 

6L]HRI1XWRU%ROW 7HQVLRQ7\SH1XWV 6KHDU7\SH1XWV
  
  
  
  
  
  
  
  
  
  
  
  

127(

 7KHFKDUWDSSOLHVWRDOOVWDQGDUGRUKLJKVWUHQJWKDLUFUDIWDOOR\VWHHOEROWV

 7KHORZHUYDOXHLVXVHGZKHQWKHEROWLVKHOGVWDWLRQDU\DQGWRUTXHDSSOLHGWRWKHQXW
8VHWKHXSSHUYDOXHZKHQWXUQLQJWKHEROWKHDGDQGKROGLQJWKHQXW

 7HQVLRQW\SHQXWVDUH$1$1$1

  6KHDUW\SHQXWVDUH$1$1

72:,1*

7KHDLUSODQHFDQEHWRZHGZLWKWKHXVHRIDQDSSURSULDWHWRZEDUDWWDFKHGWRWKHPDLQODQGLQJJHDU
7KHSURSHUWRZLQJSRLQWVDUHWKHVWHHOULQJVRQWKHLQQHUVLGHRIWKHODQGLQJJHDUVWUXWLQWKHVDPHSODQH
DVWKHD[OH7RZLQJZLWKDWWDFKPHQWWRWKHWDLOZKHHOVSULQJLVQRWUHFRPPHQGHG7KHWDLOZKHHOORFN
VKRXOGDOZD\VEHGLVHQJDJHGZKLOHWKHDLUSODQHLVEHLQJWRZHG

7KHDLUSODQHFDQEHSXOOHGRUSXVKHGXVLQJWKHWRZEDU,IWKHDLUSODQHLVWRZHGLQWRWLJKWTXDUWHUVD
ZLQJZDONHU VKRXOG EH HQJDJHG WR DYRLG GDPDJH WR ZLQJ WLSV DQG WDLO PHPEHUV ZKHUH YLVLELOLW\ LV
OLPLWHG

7KHDLUSODQHVKRXOGQRWEHWRZHGIDVWHUWKDQPLOHVSHUKRXURQDVPRRWKVXUIDFHZLWKRXWFKXFNKROHV
RUVKDUSEXPSV/DQGLQJJHDUGDPDJHSDUWLFXODUO\WDLOZKHHOGDPDJHFDQUHVXOWIURPGURSSLQJWKH
JHDULQWRKROHVDWKLJKVSHHGV
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


([FHVVLYHO\EXPS\VXUIDFHVPXVWEHQHJRWLDWHGFDXWLRXVO\WRDYRLGODQGLQJJHDUGDPDJH$OVREXPS\
VXUIDFHVPD\FDXVHWKHWRZEDUWRERXQFHDQGGLVHQJDJHIURPWKHWRZULQJVRQWKHODQGLQJJHDU6KRXOG
WKLVRFFXUGLUHFWLRQDOFRQWURORIWKHDLUSODQHLVORVW$JHQWOHVWRSVKRXOGEHH[HFXWHGLPPHGLDWHO\WR
PLQLPL]HGDPDJH7KHVDIHVWDSSURDFKWRWRZLQJRQEXPS\VXUIDFHVLVWRVWDWLRQDFUHZPHPEHULQ
WKHSLORW¶VVHDWWRDFWXDWHWKHDLUSODQH¶VEUDNHVLIWKHKLWFKRUWRZEDUVKRXOGIDLORUGLVHQJDJH8VHRI
DVSULQJSLQWKURXJKWKHGULOOHGKROHVPLQLPL]HVWKHOLNHOLKRRGRIGLVFRQQHFWRQDURXJKVXUIDFH

6ORSHGVXUIDFHVZLWKDJUDGHPRUHWKDQWHQGHJUHHVVKRXOGEHDSSURDFKHGGLDJRQDOO\WRUHGXFHWKHORDG
RQWKHWRZEDUDQGKLWFKSRLQWV

6XGGHQVWDUWVDQGVWRSVPXVWEHDYRLGHGSDUWLFXODUO\ZLWKDKHDYLO\ODGHQDLUSODQHWRSUHYHQWIDLOXUH
RIWKHWRZEDURUWHDURXWRIWKHWRZLQJULQJV

:(,*+7$1'%$/$1&(

7KH SURSHU PDLQWHQDQFH RI ZHLJKW DQG EDODQFH UHFRUGV LV LPSRUWDQW WR HQVXUH WKDW WKH DLUSODQH LV
RSHUDWHGZLWKLQWKHZHLJKWDQGFHQWHURIJUDYLW\OLPLWVWKDWDUHHVWDEOLVKHGLQWKH)OLJKW0DQXDO7KH
ZHLJKW DQG EDODQFH GLDJUDP ZLWK VDPSOH FDOFXODWLRQ LV VKRZQ LQ )LJXUH   7KH DLUSODQH PXVW EH
ZHLJKHGLQWKHDWWLWXGHGHVFULEHGXQGHU/(9(/,1*

:,1*6

7KHZLQJLVRIDOOPHWDOFRQVWUXFWLRQZLWKWKHPDLQVSDUGHVLJQHGWRWDNHDOORIWKHEHQGLQJORDG7KLFN
ZLQJVNLQVDUHHPSOR\HGQHDUWKHZLQJURRWZLWKDJUDGXDOGURSLQWKLFNQHVVDWHDFKVNLQODSDVZLQJ
ORDGVGLPLQLVK1RVSDQZLVHVWULQJHUVDUHXVHGLQRUGHUWRVLPSOLI\FRQVWUXFWLRQDQGUHSDLUVDQGIRU
WKDWUHDVRQZULQNOHVLQWKHXSSHUVNLQDQGFDQVEHWZHHQWKHULEVZLOOEHQRWLFHGGXULQJPDQHXYHUVZLWK
KHDY\ ORDGV  7KLV LV D QDWXUDO FRQGLWLRQ DQG XQOHVV WKH FDQV RU ZULQNOHV FKDQJH QRWLFHDEO\ LQ D
SDUWLFXODUORFDWLRQWKHUHLVQRFDXVHIRUDODUP$Q\FKDQJHVDVPHQWLRQHGZLOOUHTXLUHFORVHLQVSHFWLRQ
RIDOOLQWHUQDOVWUXFWXUDOSDUWVLQWKHDUHDZKHUHWKHFKDQJHKDVWDNHQSODFH

7KHZLQJOHDGLQJHGJHLVRIWKLFN7DQGFDQEHUHSODFHGLQWKHILHOGDVGHVFULEHGXQGHUWKH
5HSDLUVVHFWLRQRIWKLVPDQXDO7KHZLQJUHDUVSDUDWWDFKSODWHLVRI 7+,&.1VWHHOIRUH[WUD
VWUHQJWK,WLVFDGPLXPSODWHGDQGSULPHGZLWK&KURPDQR[LGHHSR[\SULPHUEHIRUHDVVHPEO\WRWKH
UHDUVSDU

$OOZLQJSDUWVDUHFOHDQHGZLWKDGHWHUJHQWVRDSVFUXEEHGZLWKDQHWFKLQJVROXWLRQDQGGLSSHGLQWRDQ
$ORGLQHVROXWLRQWKHQSULPHGEHIRUHDVVHPEO\6NLQODSVVHDOHGRQWKHWRSDQGERWWRPRIWKH
ZLQJDUHVHDOHGZLWK35$DVLQWKHZLQJURRWWRSUHYHQWFKHPLFDOHQWU\

:LQJ$WWDFKPHQWWR)XVHODJH

'HWDLOVRIWKHZLQJ¶VIURQWVSDUDWWDFKPHQWWRWKHIXVHODJHDUHVKRZQLQ)LJXUH7KHZLQJ¶VUHDU
VSDUDWWDFKPHQWWRWKHIXVHODJHLVVKRZQLQ)LJXUH

7ZRZLQJDWWDFKDQJOHVDUHXVHGWRDWWDFKWKHZLQJPDLQVSDUWRWKHIXVHODJHYHUWLFDOWXEHMXVWDIWRI
WKHPDLQVSDU7KHUHDUHIRXU$1$EROWVWKDWDWWDFKHDFKYHUWLFDOWXEHWRWKHZLQJDQJOHV
 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


,WVKRXOGDOVREHQRWHGWKDWWKHUHLVQREROWWKURXJKWKHDWWDFKDQJOHDQGWKURXJKWKHVPDOOOHJRIWKH
ORZHUVSDUFDS7KLVLVWRHOLPLQDWHEROWIUHWWLQJDQGPDNHWKHMRLQWPRUHIDWLJXHUHVLVWDQW

7KHZLQJDWWDFKDQJOHVDUHSQDQGDUHDWWDFKHGWRWKHPDLQVSDUZLWKVL[$1$DQGWZR
$1$EROWV,ILWLVQHFHVVDU\WRFKDQJHWKHZLQJDWWDFKDQJOHVGXHWREROWZHDURUIXVHODJHUHSDLUV
DVNWKHIDFWRU\IRUGHWDLOHGLQVWUXFWLRQVRQKRZWRGULOOWKHDWWDFKDQJOHVDWWKHWLPHWKH\DUHRUGHUHG
DVWKHVHDQJOHVDUHGULOOHGWRPDWFKHDFKLQGLYLGXDODLUFUDIW

7KHUHDUVSDUSODWHLVDWWDFKHGWRWKHIXVHODJHIUDPHZLWKDVLQJOH1$6EROW VHH)LJXUH 
7KHVHEROWVZHDUVOLJKWO\DQGVKRXOGEHFKHFNHGDWKRXULQWHUYDOVDQGUHSODFHGLIZRUQRUUXVW\
'RQRWXVH$1EROWVDWWKLVORFDWLRQ7RUHPRYHWKHEROWVILUVWUHPRYHWKHORZHUZLQJJDSFRYHU
ZKLFKLVDWWDFKHGZLWKVFUHZV5HPRYDOGHWDLORIWKHJDSFRYHULVVKRZQLQ)LJXUH

3ODFHDVPDOOK\GUDXOLFMDFNXQGHUWKHZLQJUHDUVSDUSODWHDQGDSSO\RQO\DVPDOODPRXQWRISUHVVXUH
WRVXSSRUWWKHZLQJZKHQWKHEROWLVUHPRYHG/RFNWKHSDUNLQJEUDNHVRWKHDLUFUDIWZLOOQRWPRYH
5HPRYHWKHQXWDQGJHQWO\GULYHWKHEROWRXWZLWKDVPDOOKDPPHUSURWHFWLQJWKHWKUHDGVIURPGDPDJH
,QVSHFWWKHEROWYLVXDOO\WKHQSODFHLWRQDVPRRWKSODWHDQGURWDWHWRVHHLILWLVEHQW,QVSHFWIRU
WKUHDGGDPDJHRUUXVW'RQRWXVHH[FHVVLYHIRUFHWRUHPRYHWKHEROWVDQGGRQRWKHDW,IWKHUHLV
GLIILFXOW\LQUHPRYLQJWKHEROWVFRQWDFWWKHIDFWRU\

:HHQFRXUDJHUHSODFHPHQWRIROGEROWVZLWKQHZEROWVDWDOOWLPHVEXWLIWKHROGEROWVDUHLQJRRGVKDSH
DQGWKHWLPHLQWHUYDOVPHQWLRQHGDERYHDUHQRWH[FHHGHGWKH\PD\EHUHLQVWDOOHG%HVXUHWRJUHDVH
WKH EROWV ZLWK 0,/* JUHDVH EHIRUH LQVWDOOLQJ  7RUTXH YDOXHV DUH  LQFKSRXQGV WRUTXH
ZUHQFKRQQXW 

:LQJ&HQWHU6SOLFH&RQQHFWLRQ

'HWDLOVRIWKHZLQJFHQWHUVSOLFHFRQQHFWLRQDUHVKRZQLQ)LJXUH

7KHPDLQVSDUFDSVRIHDFKZLQJDUHDWWDFKHGWRHDFKRWKHUZLWKSQDWWDFKEORFNV XSSHU
VSDUFDSV DQGDWWDFKEORFNV ORZHUFDSV 7KHPDLQVSDUZHEVDUHDWWDFKHGWRHDFKRWKHU
E\SQWKLFNKHDWWUHDWHGVWHHOSODWH7KHFRQQHFWLRQWRWKHIXVHODJHRQWKHDLUFUDIWFHQWHU
OLQHLVPDGHZLWKDSQWKLFNVWHHOSODWHFRQQHFWHGWRWKHIXVHODJHVWUXFWXUHZLWKWZR
$1$EROWVDQGWRWKHWZREROWVWKURXJKWKHXSSHUVSDUFDSDWWDFKEORFN

7KHUHDUHIRXUSQWXEHQXWZHOGHGDVVHPEOLHVDQGWZRSQVOHHYHVLQHDFKZLQJ
LQVWDOODWLRQ7KHVOHHYHVDQGWXEHQXWVDUHGULOOHGDQGUHDPHGDIWHUWKHWXEHQXWVKDYH
EHHQIXOO\WLJKWHQHGDQGWZR$1$EROWVLQVWDOOHGLQHDFKVOHHYH,IWKHZLQJVDUHUHPRYHGIURP
WKHDLUFUDIWLWLVXVXDOO\QHFHVVDU\WRUHSODFHWKHIRXUWXEHQXWDVVHPEOLHVDQGWKHWZRVOHHYHVVLQFH
WKHUHDPHGKROHVWKURXJKERWKSDUWVZLOOSUREDEO\QRWOLQHXS,QWKLVFDVHWLJKWHQWKHQHZWXEH
QXWVLQFKSRXQGVWRUTXHSRVLWLRQWKHQHZVOHHYHVPLGZD\EHWZHHQWKHWXEHQXWVGULOO
WKURXJKWKHVOHHYHDQGWXEHQXWDQGUHDPIRUWKH$1$EROWLQVWDOODWLRQ

7KHWXEHQXWDQGVOHHYHLQVWDOODWLRQLVWRWDNHWKH³NLFNORDG´LPSRVHGE\GLKHGUDODQJOHDQGFDQFHOLW
RXWE\WUDQVIHUULQJWKLVORDGIURPWKHXSSHUVSDUFDSVWRWKHORZHUVSDUFDSV
 
$LU7UDFWRU,QF 0DLQWHQDQFH3DJH
$7 -XO\


7RUHPRYHWKHZLQJVRUWRLQVSHFWWKHZLQJFHQWHUVSOLFHFRQQHFWLRQSURSHUO\WKHIURQWKRSSHUVKRXOG
EHUHPRYHG

7RUTXH YDOXHV VKRXOG EH FKHFNHG RQ WKH QXWV WR OHDUQ LI WKH EROWV KDYH HORQJDWHG RU LI IUHWWLQJ KDV
ORRVHQHGWKHILWRIWKHMRLQW7RUTXHYDOXHVWREHFKHFNHGDUHDVIROORZV

LQFKSRXQGVRQWKHQXW LQFKSRXQGVRQWKHQXW
LQFKSRXQGVRQWKHQXW LQFKSRXQGVRQWKHQXW
LQFKSRXQGVRQWKHQXW LQFKSRXQGVRQWKHWXEHQXWDVVHPEO\
LQFKSRXQGVRQWKHQXW 


7KHUHDUH1$6EROWVWKURXJKWKHVPDOOOHJVRIWKHVSDUFDSVWKDWDWWDFKWRWKHSODWH
RQWKHDIWVLGHRIWKHZHE7KHUHDUH1$6EROWVWKURXJKWKHVSDUZHEWKDWDWWDFKWKH
SODWH7KHVHQXWVDUHFKHFNHGIRUWRUTXHDWLQFKSRXQGV7KHUHDUH1$6VFUHZV
ZLWK$1QXWVWRUTXHGWRLQFKSRXQGV

7KHUHDUH1$6 EROWVWKURXJKWKHVSDUFDSV DQG1$6WKURXJKWKHVSDUZHEWKDW
DWWDFKWKHSODWHZLWK$1QXWVWRUTXHLVLQFKSRXQGV

,QVSHFW WKH HQWLUH VSOLFH FRQQHFWLRQ FDUHIXOO\ IRU VLJQV RI EROW ZRUNLQJ FRUURVLRQ RU FUDFNV  7KH
FULWLFDODUHDIRUWKHORZHUVSDUFDSLVDWVWDWLRQIURPWKHDLUFUDIWFHQWHUOLQHZKHUHWKH1$6
EROWDWWDFKHVWKHEORFNVWRWKHPDLQOHJRIWKHFDS,IDFUDFNZHUHWRGHYHORSDWWKDWSRLQW
LWZRXOGSUREDEO\SURJUHVVWRWKHVPDOOOHJRIWKHFDSDWVWDWLRQ

7KHQH[WFULWLFDODUHDRIWKHORZHUVSDUFDSZRXOGEHLQWKHULYHWSDWWHUQDWWDFKLQJWKHVPDOOOHJWRWKH
ZHEIURPDSSUR[LPDWHVWDWLRQVWRZKLFKLVZKHUHWKHLQERDUGIXHOWDQNZDOOLVORFDWHG,W
ZRXOGDOVREHDGYLVDEOHWRFKHFNFDUHIXOO\WKHORZHUVLGHRIWKHPDLQOHJLQWKHDUHDZKHUHWKHIXHO
WDQNERWWRPHQGV 

$OZD\VXVHDQHZQXWIRUUHSODFHPHQWDIWHUDQXWLVUHPRYHG

)RUDSSURSULDWHLQVSHFWLRQLQWHUYDOVRIWKHZLQJFHQWHUVSOLFHFRQQHFWLRQVHHWKH,163(&7,21
VHFWLRQRIWKLVPDQXDO,IDQHZZLQJLVWREHLQVWDOOHGFRQWDFWWKHIDFWRU\IRUZLQJLQVWDOODWLRQ
LQVWUXFWLRQVDWWKHWLPHWKHZLQJLVRUGHUHG


&$87,21



&RQVXOWWKHIDFWRU\IRUWRROVMLJVDQGIL[WXUHVWR

HQVXUHSURSHULQVWDOODWLRQRIDQHZZLQJ


 
3DJH0DLQWHQDQFH $LU7UDFWRU,QF
-XO\ $7


:LQJ:DON

7KHPDLQZLQJZDONLVPDGHRI0VDIHW\ZDONZLGHDQGLVSQ7KHVPDOOURXQGZDON
SDUWLVSQDQGWKHIODSZDONLVSQ

7KHZDONPDWHULDOKDVDGKHVLYHEDFNLQJEXWLQRUGHUWRLPSURYHWKHERQGWRWKHZLQJVNLQ06DIHW\
:DON$GKHVLYHLVDSSOLHGWRWKHZLQJVXUIDFH7RSUHYHQWIXHOIURPJHWWLQJXQGHUWKHZDONDQGOLIWLQJ
LW0HGJHVHDOLQJFRPSRXQGLVDSSOLHGDORQJWKHSHULPHWHURIWKHZDON,IWKHZDONLVFKDQJHGEH
VXUHWRRUGHUWKHDGKHVLYHDQGWKHHGJHVHDOLQJFRPSRXQGIRUEHVWUHVXOWV