BOJ 11-15 PDF
Document Details
Uploaded by DistinctiveKnowledge
Advanced Training Institute of America
Tags
Summary
This document discusses the history and philosophy of human behavior, specifically the relationship between individuals and society. It explores different perspectives on human interaction and the role of history in shaping those interactions.
Full Transcript
/HVVRQVIURPWKH$QLPDOV 3HRSOHRIWHQILQGLWKDUGWREHOLHYHWKDWOLYLQJDVFORVHWR/RV$QJHOHVDV,GR²OHVVWKDQDQKRXU RU WKUHHGHSHQGLQJRQWUDIILF IURPGRZQWRZQ²,JHWWRHQMR\VHHLQJZLOGOLIHQHDUO\HYHU\GD\%HFDXVH P\KRPHLVQHVWOHGDJDLQVWWKH6DQ*DEULHO0RXQWDLQVZLOGFUHDWXUH...
/HVVRQVIURPWKH$QLPDOV 3HRSOHRIWHQILQGLWKDUGWREHOLHYHWKDWOLYLQJDVFORVHWR/RV$QJHOHVDV,GR²OHVVWKDQDQKRXU RU WKUHHGHSHQGLQJRQWUDIILF IURPGRZQWRZQ²,JHWWRHQMR\VHHLQJZLOGOLIHQHDUO\HYHU\GD\%HFDXVH P\KRPHLVQHVWOHGDJDLQVWWKH6DQ*DEULHO0RXQWDLQVZLOGFUHDWXUHV²VNXQNVRSRVVXPVUDFFRRQV KDZNVDQGRZOV²VRPHWLPHVVKRZXSLQP\\DUG$QGPDQ\PRUH²GHHUFR\RWHVEHDUVDQG EREFDWV²,VHHRQWKHWUDLOVZKHUH,UXQ ,ZLVK,KDGPRUHFRQWDFWZLWKDQLPDOV$V\RXPD\KDYHQRWLFHGSHRSOHZKROLYHLQFORVH DVVRFLDWLRQZLWKDQLPDOVGRPHVWLFDWHGRUZLOGWHQGWRGHYHORSDNHHQDZDUHQHVVRIKRZWRUHODWHWR WKHPDQGKRZWROHDUQIURPWKHP7KDWJRHVIRUIDUPHUVUDQFKHUVKHUGVPHQYHWHULQDULDQVWUDLQHUV YLOODJHUVDQGUXUDOIRONV:KHQ-REVD\V³$VNWKHDQLPDOVDQGWKH\ZLOOWHDFK\RX´WKHVHSHRSOH GRQ¶WVFUDWFKWKHLUKHDGVDQGZRQGHU+RZ" $QLPDO&RPPXQLFDWLRQ 1RQKXPDQDQLPDOVVSHDNZLWKRXWZRUGV7KH\WHDFKXVE\DOORZLQJXVWRNQRZWKHPDQGLQWHUDFWZLWK WKHP7KH\WHDFKE\H[DPSOHDQGLOOXVWUDWLRQVXEWO\DWWLPHVEXWQHYHUZLWKPDVNV,QRQHVHQVH-RE DQGKLVIULHQGVKHOGDQDGYDQWDJHRYHUPDQ\RIXVZKRQRZUHDGWKHLUVWRU\7KH\OLYHGFORVHUWRWKH QHSHVK7KH\GHSHQGHGRQWKHQHSHVKIRUWKHLUGDLO\VXVWHQDQFH7KH\LQWHUDFWHGZLWKERWKWDPHDQG ZLOGQHSHVKDQGQRWZLWKMXVWDIHZVSHFLHVEXWDODUJHDQGGLYHUVHPpODQJH 7RGD\PRVWRIWKHZRUOG¶VSRSXODWLRQOLYHVVRPHGLVWDQFHZKHWKHUJHRJUDSKLFDOO\RURWKHUZLVH IURPVRXOLVKDQLPDOV:LGHVSUHDGXUEDQL]DWLRQKDVFUHDWHGFRQFUHWHMXQJOHVZKHUHPRVWKXPDQV¶ FRQWDFWZLWKQHSHVKFUHDWXUHVLVOLPLWHGWRKLJKO\EUHGGRPHVWLFDWHGGRJVDQGFDWV WKRXJKVRPHKDYH H[RWLFSHWV DQGDIHZZLOGDQLPDOVRQGLVSOD\LQUHJLRQDO]RRVRUSUHVHUYHV7R-REDQGKLVSHHUV *RG¶VKDQGLZRUNDQGGLYLQHQDWXUHVHHPHGYROXPLQRXVO\DQGXELTXLWRXVO\HYLGHQW+RZHYHUPRVW KXPDQVWRGD\OLYHWRRIDUIURPQDWXUHWRQRWLFHWKHHYLGHQFHWR³DVNWKHDQLPDOV´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³ZKRJLYHVVRQJVLQWKHQLJKWZKRWHDFKHVXVPRUH WKDQKHWHDFKHVWKHEHDVWVRIWKHHDUWKDQGPDNHVXVZLVHUWKDQWKHELUGVLQWKHVN\´ -RE± 7HDFKLQJ8VDERXW*RG $OOIRUPVRIOLIHOLNHJORULRXVZRUNVRIDUWSURYLGHLQVLJKWVLQWRWKHKHDUWRIWKH$UWLVWZKRFUHDWHG WKHP6FHQHVRIQDWXUH¶VJUDQGHXUYLHZHGWKURXJKYLUWXDOO\DQ\OHQV²KXPDQH\HFDPHUD PLFURVFRSHDQGWHOHVFRSH²ILOOXVZLWKZRQGHU+RZHYHUWKHUHVSRQVHWKDWFRPHVIURPREVHUYLQJ DQGKDQGOLQJQHSHVKFODLPVDFDWHJRU\DOOLWVRZQDQLQWHQVHO\SHUVRQDORQH%HDXW\DQGLQWULFDFLHV RIGHVLJQPD\EHUHVSOHQGHQWLQIORZHUVDQGVWDUVEXWRQO\QHSHVKUHYHDOWKHLQILQLWHYDULHW\DQG P\VWHU\RIEHKDYLRUVPDGHSRVVLEOHE\VRXOLVKUHODWLRQDOFDSDFLWLHV :HFDQOHDUQIURPWKHVHFUHDWXUHVLQWZRZD\VE\REVHUYLQJWKHPLQWKHLUQDWXUDOKDELWDWVDQG UHODWLRQVKLSVDQGE\LQWHUDFWLQJZLWKWKHPGLUHFWO\(YHQWKHPRVWVXSHUILFLDOREVHUYDWLRQRIDQLPDOV LQWKHZLOGUHYHDOVVRPHLQVLJKWLQWR*RG¶VFKDUDFWHUDQGYDOXHV(DFKVRXOLVKVSHFLHVLQLWVRZQ XQLTXHZD\QXUWXUHVLWV\RXQJDQGWUDLQVWKHPIRULQGHSHQGHQWDGXOWOLIHZKHWKHUWKLVSURFHVVWDNHVD IHZZHHNVDVLQWKHFDVHRIVKUHZVRUPDQ\\HDUVDVZLWKHOHSKDQWVDQGZKDOHV(DFKLVHQGRZHG ZLWKDVSHFLILFDGYDQWDJHRYHURWKHUVSHFLHVLQDFTXLULQJLWVQXWULWLRQDODQGRWKHUVXUYLYDOQHHGV7KH FKHHWDKUXQVIDVWHURYHUVKRUWGLVWDQFHVWKHOHPXUFOLPEVZLWKHDVHWRUHDFKVHHGVDQGQXWVWKH JLUDIIH¶VORQJQHFNDQGWRQJXHDOORZLWWRSOXFNOHDYHVIURPWKRUQ\EUDQFKHVQHDUO\WZHQW\IHHWRIIWKH JURXQGDQGWKHRZO¶VQLJKWYLVLRQHQDEOHVLWWRKXQWXQGHUFRYHURIGDUNQHVV(DFKKDVLWVRZQ UHSURGXFWLYHF\FOHVDQGULWXDOVDQGWKRVHWKDWOLYHLQKHUGVRUVRFLDOJURXSVSRVVHVVLQQDWHPHDQVRI HVWDEOLVKLQJRUGHUDQGSURWHFWLQJWKHHQWLUHFRPPXQLW\ (DFKVSHFLHVDOVRSRVVHVVHVVRPHVSHFLILFGHIHQVHPHFKDQLVP V WRSURWHFWLWVHOIIURPQDWXUDO SUHGDWRUV:KHWKHUWKHYDULHW\RIFDPRXIODJHSDWWHUQVIURPVSRWVWRVWULSHVDQGIURPVXEWOHFRORUVWR EROGRUWKHGLYHUVLW\RIVKDSHVDQGVL]HVIURPWLQ\IOH[LEOHIUDPHVWRPDVVLYHVWXUG\RQHV²WKHOLVW RIYDULDWLRQVVHHPVDOPRVWHQGOHVVDQGHDFKVHHPVIL[HGDWRSWLPDOOHYHOVWRHQVXUHDVSHFLHV¶ DGDSWDELOLW\DQGORQJHYLW\DSDUWIURPKXPDQLQWHUIHUHQFH :KHQKXPDQVEHJLQWRLQWHUDFWZLWKWKHVHFUHDWXUHVHYHQPRUHZRQGHUVFRPHWROLJKW$OPRVW LPPHGLDWHO\ZHUHDOL]HKRZVXFKDQLPDOVUHVSRQGWRUHZDUG7KHPRUHZHOHDUQDERXWWKHUHZDUGV WKH\YDOXHDQGHQMR\WKHFORVHURXUUHODWLRQVKLSVZLWKWKHPFDQJURZ)URP6FULSWXUHZHOHDUQWKDW *RGH[SHFWVXVWRVHHKLPDVRXUUHZDUGHU7KHZULWHURI+HEUHZVVDLGRXUIDLWKLVEXLOWRQWKHEHOLHI WKDW*RGH[LVWVDQG³WKDWKHUHZDUGVWKRVHZKRHDUQHVWO\VHHNKLP´ $VZHORRNWRWKH DQLPDOVZHVHHHYLGHQFHWRVXSSRUWERWKWKHVHEHOLHIV 7KHWHQQHSHVKGHVFULEHGLQFKDSWHUUHSUHVHQWMXVWDVDPSOLQJRIWKHFRXQWOHVVZD\V*RG H[SUHVVHVKLVFDUHIRUKXPDQLW\WKURXJKWKHVRXOLVKDQLPDOV+LVORYHVHHPVDSSDUHQWERWKLQWKH GHJUHHWRZKLFKWKHVHFUHDWXUHVDUHZLOOLQJDQGDEOHWRVHUYHXVDQGEULQJXVH[TXLVLWHSOHDVXUHDQG DOVRLQWKHYDULHW\RIZD\VWKH\GRVR7KHQHSHVKWHVWLI\RI*RG¶VH[WUDYDJDQWJHQHURVLW\WRXV %HFDXVHWKH\KDYHQRFDSDFLW\IRUVLQVRXOLVKDQLPDOVFDQLOOXVWUDWHDSXULW\RIGHYRWLRQZHKXPDQV ORQJIRU²ERWKWRUHFHLYHDQGWRJLYH7DPHGDQLPDOVVKRZDOHYHORIWUXVWDQGOR\DOW\WKDWPDNHVXV ZDQWWRGHVHUYHWKHLUIDLWK:KHQKXPDQVLQYHVWLQWKHFKDOOHQJHVRIEXLOGLQJVXFKWUXVWLQJOR\DO UHODWLRQVKLSV*RGUHYHDOVDJOLPSVHRIKLVSHUIHFWSDWLHQFHSHUVLVWHQFHDQGZLVGRPLQEXLOGLQJD UHODWLRQVKLSZLWKHDFKRIXV$SHUVRQZKREHJLQVWRFRPSUHKHQGWKHSRZHUDQGORYHRI*RG UHYHDOHGLQWKHVRXOLVKFUHDWXUHVKDVDOUHDG\WDNHQWKHILUVWFUXFLDOVWHSWRZDUGDFFHSWLQJ*RG¶VRIIHU RIUHODWLRQVKLS7KHQHSHVKVKRZXVWKDWZKDWHYHU³ZLOGQHVV´LQXVVHSDUDWHVXVIURP*RG*RGLV SRZHUIXOHQRXJKSDWLHQWHQRXJKZLVHHQRXJKDQGFDULQJHQRXJKWRRYHUFRPHLW 7HDFKLQJ8VDERXW2XUVHOYHV +XPDQ³ZLOGQHVV´VKRZVXSLQRXULQQDWHWHQGHQF\WRJRRXURZQZD\GRLQJZKDWZHZDQWRUZKDW ZHGHHPEHVWUDWKHUWKDQZKDW*RGVKRZVXVWREHULJKWDQGJRRG6RXOLVKDQLPDOVFDQKHOSXV UHFRJQL]HWKHOLPLWVRIRXU³WDPLQJ´DELOLW\OLPLWVWKDWVKRXOGHQJHQGHUDPHDVXUHRIKXPLOLW\3HUKDSV ZHKXPDQVDUHQRWVRJUHDWDQGSRZHUIXODVZHRIWHQEHOLHYHRXUVHOYHVWREH *RGUHPLQGHG-REDQGKLVIULHQGVWKDWQRKXPDQFDQWDPHHLWKHUSULGHRUVSHHFK*RGDORQHKDVWKH SRZHUWRWDPHWKHP2QO\*RGFDQ³ORRNDWDOOZKRDUHSURXGDQGKXPEOHWKHP´ -RE 6SHDNLQJWKURXJK-DPHVLQWKH1HZ7HVWDPHQW*RGVDLG³1RKXPDQEHLQJFDQWDPHWKHWRQJXH,WLVD UHVWOHVVHYLOIXOORIGHDGO\SRLVRQ´ -DPHV :KHQZHKXPDQVDWWHPSWWRKXPEOHRWKHUVZHWHQGWRGRKDUPLQWKHSURFHVV:HKXPLOLDWHLQ ZD\VWKDWHLWKHUWHDUGRZQDQGGHVWUR\DSHUVRQRUSURSHODSHUVRQLQVHOIGHIHQVHWRZDUGJUHDWHU H[SUHVVLRQVRISULGHRUVHOIH[DOWDWLRQ2QO\*RGKDVWKHFDSDFLW\WRFDXVHWKHSUHFLVHLQWHUQDODQG H[WHUQDOFLUFXPVWDQFHVWKDWZLOOEULQJDSHUVRQWRDSSURSULDWHKXPLOLW\2QO\*RGSRVVHVVHVWKHORYH DQGZLVGRPQHFHVVDU\WRGHDOZLWKKXPDQSULGHLQDFRQVLVWHQWO\FRQVWUXFWLYHPDQQHU 7KHVDPHSUREOHPFURSVXSLQRXUHIIRUWVWRVD\WKHULJKWWKLQJ-RE¶VERRNPDNHVWKDWSRLQWZLWK DEXQGDQWFODULW\,I(OLSKD]=RSKDUDQG%LOGDGFDPHWR-REIRUWKHULJKWUHDVRQWRRIIHUFRPIRUWDQG VXSSRUWWKHLUZRUGVDFFRPSOLVKHGWKHRSSRVLWHHIIHFW7KH\DFFXVHG-RERIVHFUHWVLQDQG ZLFNHGQHVV7KH\H[DOWHGWKHLURZQYLUWXHDQGZLVGRPRYHUKLV7KH\GHHSHQHGDQGSURORQJHG-RE¶V VXIIHULQJ :KHUHDODFNRIFRQWUROGRHVREYLRXVGDPDJHRYHUFRQWUROKDUPVSHRSOHPRUHVXEWO\%\FODPSLQJ GRZQRQRXURZQRURWKHUV¶ZRUGVZHPD\IDLOWRH[SUHVVRUWRKHDUZKDWQHHGVWREHFRPPXQLFDWHG )HHOLQJVWKDWQHHGWREHH[SUHVVHGWXUQLQZDUGDQGSUREOHPVUHTXLULQJDWWHQWLRQJHWLJQRUHG7KH RQO\SHUVRQHYHUWRVSHDNZLWKSHUIHFWWLPLQJDQGZRUGVZDV-HVXVRI1D]DUHWK+HVSRNHKDUGZRUGV DQGWHQGHUZRUGVZKDWHYHUWKHUHODWLRQVKLSDQGFLUFXPVWDQFHVFDOOHGIRU+HVSRNHGLUHFWO\DV QHHGHGDQGLQVWRULHVDVQHHGHGSHUIHFWO\DWWXQHGWRKLVKHDUHUV¶KHDUWVDQGXWWHUO\ZLWKRXWJXLOH1R RUDWRUWKHZRUOGKDVHYHUVHHQFDQFRPSDUH 6DGO\ZHKXPDQVKDYHGLIILFXOW\DFFHSWLQJRXUSRZHUOHVVQHVVDQGXWWHUGHSHQGHQF\RQ*RGLQ WKHVHDUHDV0HDQZKLOHHYHQWKHSURXGHVWDQLPDOVZLOOWUXVWDQGGHSHQGXSRQXVRQFHZHKDYH SURYHQRXUVHOYHVWUXVWZRUWK\%H\RQGVKRZLQJXVKRZZH¶YHUXQDPRNQHSHVKDOVRRIIHUXV YDOXDEOHOHVVRQVLQKRZWROLYHOHVVRQVDERXWVHUYLQJDQGGHOLJKWLQJHDFKRWKHUDQGWKXVVHUYLQJDQG GHOLJKWLQJWKH2QHZKRFDUHVIRUXVDQGFUHDWHGXVLQKLVLPDJH 7HDFKLQJ8V+RZWR/LYH7RJHWKHU 'HYHORSLQJDUHZDUGLQJUHODWLRQVKLSZLWKDVRXOLVKDQLPDORQHLQZKLFKWKHFUHDWXUHFRPHVWRXV UDWKHUWKDQFRZHUVRUIOHHVUHTXLUHVVHQVLWLYLW\WRWKDWDQLPDO¶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¶VLQGLYLGXDOVDQGPDWLQJEHKDYLRUKHOSVHVWDEOLVKWKDWWUXVW7KHWHDPPDGHRQHIXUWKHU REVHUYDWLRQWKDWGHVHUYHVPHQWLRQ7KHVSHFLHVZLWKKLJKHUOHYHOVRIILGHOLW\DQGFROODERUDWLRQDOVR GLVSOD\HGKLJKHUVXUYLYDOUDWHVDQGJUHDWHUTXDOLW\RIOLIHIRULQGLYLGXDOVZLWKLQWKHJURXS ,IZHORRNWRWKHELUGVIRULQVWUXFWLRQDV-REVD\VZHILQGWKDW*RG¶VSODQIRUPDUULDJHUHSUHVHQWV PRUHWKDQVRPHDUELWUDU\PRUDOUXOHRUFRQYHQWLRQ0RQRJDP\FRQWULEXWHVWRWKHSURGXFWLYHDQG SHDFHDEOHGLYLVLRQRIODERUWKDWPDNHVDKLJKWHFKQRORJ\JOREDOFLYLOL]DWLRQIXQFWLRQDWLWVEHVW %HKLQGHDFKRI*RG¶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³VRPHWKLQJ´LVQRWDWKLQJDWDOOEXWD %HLQJLQVRPHZD\OLNHRXUVHOYHVEXWSHUIHFWO\JRRG$VPXFKDVQHSHVKDSSHDUGHVLJQHGDQG PRWLYDWHGWRUHVSRQGWRXVKXPDQVDQGERQGZLWKXVOLNHZLVHZHKXPDQVDSSHDUGHVLJQHGDQG PRWLYDWHGWRUHVSRQGWR*RG,QRXUSULGHKRZHYHUZHKDQGOHWKDWPRWLYDWLRQLQVWUDQJHZD\V:H PD\DWWHPSWWRWDPHRXUVHOYHVWKURXJKDVHWRIGLVFLSOLQHVRUULWXDOVWRPDNHXVZRUWK\RI*RG¶VFDUH 2UKDYLQJVHHQRUH[SHULHQFHGH[DPSOHVRIWKDWHPSW\HIIRUWZHPD\GHFLGHOLYLQJE\RXURZQZLWV EULQJVPRUHPRPHQWDU\H[FLWHPHQWDQGSOHDVXUHWKDQOLYLQJWRVHUYHDQGSOHDVH*RGHYHUFRXOG²DW OHDVWQRWQRZ 7HDFKLQJ8V+XPLOLW\ ,IZHDOORZWKHPWKHQHSHVKFDQKHOSXVUHFRJQL]HWKHIROO\RIDWWHPSWLQJWRPDNHRXURZQZD\LQWR *RG¶VJRRGJUDFHVRURIILQGLQJDWHPSRUDU\VXEVWLWXWHIRUUHODWLRQVKLSZLWKKLP6RXOLVKDQLPDOV VKLQHDVSRWOLJKWRQKXPDQLW\¶VFDSDFLW\IRUERWKJUHDWQHVVDQGZUHWFKHGQHVVDPRVWKXPEOLQJYLHZLI ZHIXOO\WDNHLWLQ :KDWHYHUSRWHQWLDOIRUJORU\DQGPDJQLILFHQFHZHSRVVHVVFOHDUO\FDPHQRWIURPRXUVHOYHVRUE\ LQKHULWDQFHIURPRXUSDUHQWVRUIURPVRPHHDUOLHUOLIHIRUP$FFRUGLQJWRWKHODZVRIWKHXQLYHUVHDQ ³HIIHFW´FDQQRWEHJUHDWHUWKDQLWV³FDXVH´:KDWHYHUSRWHQWLDOZHRZQWKDWH[FHHGVWKDWRIRXU VSOHQGLGDQLPDOFRPSDQLRQVRQWKLVHDUWKPXVWEHDWWULEXWHGWRRXU&UHDWRU DQGWKHLUV $V(OLKX VD\V³7KH6SLULWRI*RGKDVPDGHPHWKHEUHDWKRIWKH$OPLJKW\JLYHVPHOLIH´ 'HVSLWHRXUEHVWHIIRUWV DQGQRWHYHQFRXQWLQJRXUZRUVW WKHKDUPZHKXPDQVKDYHFDXVHGHDFK RWKHUDQGDOO(DUWK¶VOLIHIRUPVUHYHDOVWKHGHJUHHWRZKLFKZHKDYHLJQRUHGRXU&UHDWRUDQGOLYHG DXWRQRPRXVO\:KDWFOHDUHULOOXVWUDWLRQFRXOGZHZDQWRIRXUQHHGIRUKLVORYLQJDXWKRULW\EHVLGHDQG LQVLGHHDFKRIXV")RUWKRVHLQGLYLGXDOVZKRQHHGPRUHKXPEOLQJ*RGSURYLGHGDFRXSOHRIXQLTXHO\ IHDUVRPHQHSHVKWRWDFNOHWKDWWDVN $QVZHUVWR'LQRVDXU4XHVWLRQV 2QDEDOP\HYHQLQJQHDU6DQ'LHJRWKHFKXUFKVDQFWXDU\RYHUIORZHGZLWKDGXOWVDQGNLGVPRVWO\ MXQLRUKLJKDJHDQGXSWRKHDUP\WDONFDOOHG³6FLHQFHDQGWKH%LEOH+RZWKH/DWHVW6FLHQWLILF 'LVFRYHULHV$IILUP6FULSWXUH¶V5HOLDELOLW\´$V,ZUDSSHGXSP\PHVVDJH,ZDVGHOLJKWHGWRVHH ORQJOLQHVIRUPLQJEHKLQGWZRPLFURSKRQHVSODFHGLQWKHDLVOHVWRDFFRPPRGDWHWKHDXGLHQFH¶V TXHVWLRQV 0\IULHQGVWHDVHPHDERXWDFFHSWLQJVSHDNLQJHQJDJHPHQWVIRUWKHVROHSXUSRVHRIJHWWLQJ WRWKHSURJUDP¶V4 $SRUWLRQ $WWKHPLFURSKRQHWRP\ULJKWDZRPDQLQWURGXFHGKHUVHOIDVDELRORJ\WHDFKHUDQGSRVHGWKH HYHQLQJ¶VILUVWTXHVWLRQ³:K\´VKHDVNHG³GLG\RXIDLOWRPHQWLRQWKHGLQRVDXUVGHVFULEHGLQ-RE ±DQGDOOWKHQHZHYLGHQFHVKRZLQJWKDWGLQRVDXUVDQGSHRSOHOLYHGWRJHWKHUEHIRUHWKHWLPHRI WKHIORRG"´7KHJDXQWOHWIORDWLQJQRWVRJHQWO\WRZDUGPHUDLVHGDIHZH\HEURZVDQGGHILQLWHO\VRPH WHQVLRQ+RZHYHUKDYLQJUHDGDERXWWKLV³HYLGHQFH´DQGKDYLQJVWXGLHG-RE±,ZDVJODGIRU WKHRSSRUWXQLW\WRWDNHXSWKHLVVXH 7KHLGHQWLW\RIWKH³EHKHPRWK´DQG³OHYLDWKDQ´GHVFULEHGLQ-REDQGKDVEHFRPHDPDWWHURI GHEDWHDPRQJ&KULVWLDQVRQO\LQWKHODVWIHZKXQGUHG\HDUV3ULRUWRWKHQLQHWHHQWKFHQWXU\WKLVWRSLF UHFHLYHGVFDQWDWWHQWLRQ7RFRQVLGHUZK\WKDW¶VVRVHHPHGDJRRGVWDUWLQJSRLQW0\DQVZHUEHJDQ ZLWKWKDWTXHVWLRQ 'LQRVDXUVLQ-RE" 7KHVSHFLILFSDVVDJHWKDWKDVFRQYLQFHGVRPH&KULVWLDQVLQFOXGLQJWKHELRORJ\WHDFKHUWKDWGLQRVDXUV DQGKXPDQVFRKDELWHGLV-RE±7KHWZRFUHDWXUHVGHVFULEHGWKHUHVHHPIDUWRRWHUULI\LQJ WKH\VD\WRHTXDWHZLWKDQ\NLQGRIDQLPDOWKDWVWLOOURDPVWKHODQGVFDSHWRGD\3HUKDSVVHHLQJ GLQRVDXUVSRUWUD\HGLQWKH-XUDVVLF3DUNPRYLHVVROLGLILHGWKHLUEHOLHIWKDWRQO\GLQRVDXUVFRXOGKDYH HQJHQGHUHGWKHGHJUHHRIWHUURUDURXVHGE\WKHEHKHPRWKLQ-REDQGWKHOHYLDWKDQLQ-RE:KDW DQLPDODOLYHWRGD\FRXOGSRVVLEO\ILWDOLWHUDOUHDGLQJRI-RE¶VGHVFULSWLRQV":KDWDQLPDOFRXOGEH DQ\ZKHUHDVPRQVWURXVDQGIHDUVRPH" 2QHNH\SUREOHPZLWKWKHGLQRVDXULQWHUSUHWDWLRQOLHVLQWLPLQJ,WLPSOLHVGLQRVDXUVOLYHGORQJDIWHU ZHOOHVWDEOLVKHGGDWHVRIWKHLUH[WLQFWLRQV,WDOVRRYHUORRNVWKDWNQRZOHGJHRIGLQRVDXUVLVUHODWLYHO\ UHFHQW1RWXQWLOKDGDQ\IRVVLOERQHVEHHQIRXQGDQGLGHQWLILHGDVEHORQJLQJWRJLDQWOL]DUGOLNH FUHDWXUHV>@(YHQIRUVSHFLDOLVWVNQRZOHGJHRIGLQRVDXUVFDQEHWUDFHGEDFNRQO\DFRXSOHRI FHQWXULHV6RIRUWKLVSDVVDJHWRFRQYH\LWVLQWHQGHGLPSDFWWR-RE¶VFRQWHPSRUDULHV²DQGWRPDQ\ FHQWXULHVRIKHDUHUVDQGUHDGHUVRIKLVVWRU\EHWZHHQWKHQDQGWKHHDUO\V²LWPRVWOLNHO\UHIHUV WRFUHDWXUHVWKHVHSHRSOHZRXOGKDYHUHFRJQL]HG 7RXQWDQJOHTXHVWLRQVRYHULQWHUSUHWDWLRQRID%LEOHSDVVDJHWKHUHDGHUPXVWHVWDEOLVKWKHFRQWH[W DQGSRLQWRIYLHZ-RE±UHFRUGVWKHVHFRQGSRUWLRQRI*RG¶VUHVSRQVHWRWKHGLDORJXHEHWZHHQ -REDQGKLVIULHQGV,QWKHILUVWSRUWLRQUHFRUGHGLQ-RE*RGFKDOOHQJHVWKHPHQWRFRQVLGHUKLV WUDQVFHQGHQWSRZHUGHPRQVWUDWHGLQKLVFUHDWLRQRIWKHKHDYHQVDQGWKHHDUWKDQGLQKLVSUHSDUDWLRQV WRFUHDWHDGYDQFHGOLIH+HJLYHVZKDWDPRXQWVWRDSRHWLFSUHYLHZRIWKHILUVWILYHFUHDWLRQGD\V VXPPDUL]HGLQ*HQHVLV)URPWKHODVWIHZYHUVHVRIFKDSWHUDQGRQZDUGLQWRFKDSWHU*RG WXUQVKLVKHDUHUV¶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±HPSKDVL]HVWKHYDOXH*RGSODFHVRQDOOOLIHDQGRQKXPDQOLIHDERYHDOORWKHU*RG VLQJOHVRXWWHQFUHDWXUHVVSHFLDOO\GHVLJQHGIRUKXPDQLW\¶VEHQHILWDQGUHPLQGV-REDQGKLVIULHQGVWR OHDUQIURPWKHP²OHVVRQVDERXW*RG¶VJUHDWQHVVDERXWKXPDQJUHDWQHVVDQGDERXWWKHVRXUFHRI KXPDQJUHDWQHVV7KHXVHRIUKHWRULFDOTXHVWLRQVWKURXJKRXWWKLVFRPPXQLFDWLRQLQGLFDWHVWKHLQWHQWWR SHUVXDGHWRPDNHDSRLQWZLWKHPRWLRQDOLPSDFWDQGWRRSHQXSWKHKHDUHUV¶PLQGVWRVRPHWKLQJWKH\ KDYH\HWWRJUDVS7KLVSDWWHUQFRQWLQXHVLQWR-RE±ZKHUH*RG¶VYRLFHEULQJVDWWHQWLRQWRWZR PRUHFUHDWXUHVIRUVSHFLDOFRQVLGHUDWLRQ (OLSKD]KDGHDUOLHUH[KRUWHG-RE ± VD\LQJWKDWLI-REZRXOGVXEPLWWR*RG¶VFRUUHFWLRQ DQGGLVFLSOLQH³WKHZLOGDQLPDOVZRXOGEHDWSHDFH´ZLWKKLP+HZDVULJKWWRSRLQWRXWWKDWVLQ LQWHUIHUHVZLWKKDUPRQ\EHWZHHQKXPDQVDQGDQLPDOVEXWKHPLVVHGWKHSRLQWWKDWQRWDOOQHSHVK FUHDWXUHVPDGHIRUKXPDQLW\¶VEHQHILWSURYHHTXDOO\UHFHSWLYHWRWDPLQJ VHHFKDSWHUSS± +HUHLQ-RE±WKHEHKHPRWKDQGOHYLDWKDQWDNHFHQWHUVWDJHWRLOOXVWUDWHMXVWKRZH[WUHPHO\ GLIILFXOWVRPHFDQEH%\FRPSDULVRQKRZHYHUKXPEOLQJRUWDPLQJDKXPDQWDNHVHYHQJUHDWHU VWUHQJWKDQGVNLOOVXSHUQDWXUDOSRZHUDQGZLVGRP 7KHZRUGV³LOOXVWUDWH´DQG³FRPSDULVRQ´OHDGGLUHFWO\WRWKHTXHVWLRQRIOLWHUDU\JHQUHDQRWKHU LPSRUWDQWIDFHWRIWKHLQWHUSUHWLYHSURFHVV7KHERRNRI-REH[HPSOLILHVWKHVWUXFWXUHRIDQHSLFSRHP DIRUPFKDUDFWHUL]HGE\ILJXUDWLYHODQJXDJHDQGFRORUIXOLPDJHU\7KHVHSRHWLFFRQYHQWLRQVVHUYHLWV SXUSRVHVLPSDFWDQGPHPRUDELOLW\ 7RLQWHUSUHW-RE¶VPHWDSKRUVDQGVLPLOHVZRRGHQO\ZRXOGEHLQDSSURSULDWH7KHTXHVWLRQRIJHQUH WKHQEULQJVXVEDFNWRFRQVLGHULQJZKDWDQLPDOVDOLYHWRGD\FRXOGSRVVLEO\ILWWKHSRHWLFGHSLFWLRQV RI-RE±ZKDWDQLPDOVFRXOGEHDVIHDUVRPHDVWKHSDVVDJHVXJJHVWV*LYHQWKHGHWDLOSURYLGHG DQGLQOLJKWRIWKHFRQWH[WUHDVRQDEO\DFFXUDWHLGHQWLILFDWLRQVHPHUJH :KDW,VWKH%HKHPRWK" 7KHEHKHPRWKKDVDWDLOWKDW³VZD\VOLNHDFHGDU´ DQG³LWVERQHVDUHWXEHVRIEURQ]HLWV OLPEVOLNHURGVRILURQ´ :KDW¶VPRUH³LWUDQNVILUVWDPRQJWKHZRUNVRI*RG´ 7KLV UHIHUHQFHWRDWUHHDQGWRUDQNLQJILUVWLQLWLDOO\VHWVWKHPRGHUQUHDGHU¶VLPDJLQDWLRQPRYLQJLQWKH GLQRVDXU¶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¶VHUDZRXOGSURYLGHDJDLQVWLW 0XOWLSOHFOXHVLQWKHSDVVDJHGHVFULELQJWKHEHKHPRWK ± LQGLFDWHLWVSHQGVWLPHSULPDULO\ LQPDUVKVWUHDPDQGULYHUVXUURXQGHGE\UHHGVDQGORWXVSODQWV,WVGDQJHUWRKXPDQVOLHVLQLWV DELOLW\WRUHPDLQKLGGHQLQWKLVZDWHU\HQYLURQPHQW$SSDUHQWO\WKHEHKHPRWKFDQVWD\VRZHOO FRQFHDOHGWKDWE\WKHWLPHDERDWRUVZLPPHUGLVFRYHUVLWVSUHVHQFHGLVDVWHUXQDYRLGDEO\DZDLWV +RZHYHUWKLVWHUULI\LQJFUHDWXUHVHHPVUHPDUNDEO\VHGHQWDU\QRWDQDJJUHVVLYHVWDONHURISUH\ ,QIDFW-REVD\V³/RRNDW%HKHPRWKZKLFKIHHGVRQJUDVVOLNHDQR[´$IHZYHUVHV ODWHUZHUHDGWKDW³WKHKLOOVEULQJLWWKHLUSURGXFHDQGDOOWKHZLOGDQLPDOVSOD\QHDUE\´ ,I WKHEHKHPRWKZHUHDUDJLQJPHDWHDWLQJSUHGDWRUWKHVHZLOGDQLPDOVZRXOGPRVWOLNHO\SOD\ VRPHZKHUHIDUDZD\7KHPHQWLRQRIJUDVVDQGSURGXFHFRQILUPVWKHLPSUHVVLRQWKDWWKLVFUHDWXUH IHHGVRQSODQWVQRWRQIOHVK 3XWWLQJWKHVHGHWDLOVWRJHWKHUZHFDQFRQFOXGHWKDWWKHEHKHPRWKLVDWKUHDWWRKXPDQVQRWEHFDXVH LWFRQVLGHUVKXPDQVDVSUH\EXWEHFDXVHWKLVFUHDWXUHLVKLJKO\WHUULWRULDODQGHQRUPRXVO\VWURQJ$V -REDVVHUWVUHJDUGOHVVRIWKHH[WHQWWRZKLFKWKHULYHUUDJHVLWLVQRWDODUPHG³LWLVVHFXUH WKRXJKWKH-RUGDQVKRXOGVXUJHDJDLQVWLWVPRXWK´7KHPHQWLRQRIWKH-RUGDQ5LYHUSURYLGHVIXUWKHU LQWHUSUHWLYHDVVLVWDQFH7RGDWHQRUHPDLQVRIKHUELYRURXVGLQRVDXUVKDYHEHHQIRXQGLQWKH-RUGDQ 5LYHUYDOOH\ 2QHFUHDWXUHVHHPVWRILWEHVWZLWKWKLVFOXVWHURIGHWDLOV²DQKHUELYRUH LQWKHQHSHVKFDWHJRU\ WKDWVSHQGVLWVWLPHLQPDUVKHVVWUHDPVDQGULYHUVOLHVKLGGHQLQLWVZDWHU\KDELWDWSRVVHVVHV LQGRPLWDEOHVWUHQJWKYLJRURXVO\GHIHQGVLWVWHUULWRU\DQGSRVHVVHYHUHWKUHDWWRKXPDQVEXWRQO\LI WKH\YHQWXUHLQWRLWVYLFLQLW\²DQGWKDW¶VWKHKLSSRSRWDPXV7KURXJKWKHFHQWXULHVSULRUWRGLVFRYHU\ RIGLQRVDXUVWKHLGHQWLW\RIEHKHPRWKDVDKLSSRSRWDPXVKHOGVZD\DPRQJWKHPDMRULW\RI+HEUHZ DQG(QJOLVK%LEOHVFKRODUVEHFDXVHRILWVPDWFKZLWKERWKWKHOLWHUDODQGILJXUDWLYHODQJXDJHRIWKH WH[W>@ 7KHWDLOPHWDSKRUKRZHYHUVHHPVDVLJQLILFDQWPLVILWDWILUVWJODQFH7KHKLSSRSRWDPXVKDVD UDWKHUXQVSHFWDFXODUWDLOFHUWDLQO\XQGHVHUYLQJRIFRPSDULVRQZLWKDFHGDUDWOHDVWLQVL]H%XWWKH SDVVDJHUHIHUVWRPRYHPHQWQRWGLPHQVLRQV7KH+HEUHZZRUGWUDQVODWHGDV³WDLO´LV]DQDE7KH UDQJHRIGHILQLWLRQVIRU]DQDEPD\LQFOXGH³WDLO´³HQG´DQG³VWXPS´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¶DZHVRPHVL]HDQGVWUHQJWKWKHLUUHDFWLRQ RIWHQUHVXOWVLQLQMXU\RUGURZQLQJIRUWKHERDW¶VRFFXSDQWV 7KHWDFWLFHPSOR\HGE\DQDGXOWKLSSRSRWDPXVWRRYHUWXUQDZDWHUFUDIWLVDVZD\LQJPDQHXYHU LQYROYLQJLWVKXJHKHDYLO\PXVFOHGWKLJKVDQGUXPS7KLVPDQHXYHUPD\ZHOOH[SODLQWKHGHVFULSWLRQ RIWKHEHKHPRWK¶VVZD\LQJWDLOLQ-RE±³:KDWVWUHQJWKLWKDVLQLWVORLQVZKDWSRZHULQWKH PXVFOHVRILWVEHOO\,WVWDLO>]DQDE@VZD\VOLNHDFHGDUWKHVLQHZVRILWVWKLJKVDUHFORVHNQLW´7KH ORLQVEHOO\WKLJKVDQGUXPS RU³WDLO´RU³HQG´ DOOSOD\DSDUWLQWKHPRWLRQE\ZKLFKKLSSRSRWDPL FDSVL]HERDWVDQGWHUULI\KXPDQV:KDWDSSHDUVDWILUVWJODQFHDVDPLVPDWFKLQWKHEHKHPRWK KLSSRSRWDPXVFRPSDULVRQUHSUHVHQWVQRSUREOHPDWDOO,QIDFW-RE±SURYLGHVRQHRIWKH PRVWGHWDLOHGDQGDFFXUDWHGHVFULSWLRQVRIKLSSRSRWDPXVDQDWRP\DQGEHKDYLRUKXPDQLW\SRVVHVVHV IURPWKHDQFLHQWZRUOG *RG¶VPDLQSRLQWKRZHYHULQWKLVGHVFULSWLRQRIWKHEHKHPRWKKDVPRUHWRGRZLWKGHPRQVWUDWLQJ KXPDQLW\¶VOLPLWDWLRQVLQWDPLQJFHUWDLQQHSHVKFUHDWXUHV1RKXPDQKDVHYHUEHHQNQRZQWRWDPHDQ DGXOWKLSSRSRWDPXV6RPHKDYHDFKLHYHGVXFFHVVLQWDPLQJDKLSSRSRWDPXVVHSDUDWHGIURPLWVPRWKHU VRRQDIWHUELUWKDQGUDLVHGPRVWO\DSDUWIURPFRQWDFWZLWKRWKHUKLSSRSRWDPLEXWWKHVHVXFFHVVHVFDQ EHFRXQWHGRQRQHKDQG(YHQWKHQWKHKXPDQFDUHJLYHUVPXVWH[HUFLVHFRQVLGHUDEOHFDXWLRQWRDYRLG DFFLGHQWDOLQMXU\E\WKHVHSRZHUIXOFUHDWXUHV :KDW,VWKH/HYLDWKDQ" 7KHVHFRQGIHDUVRPHFUHDWXUHGHVFULEHGLQ*RG¶VFKDOOHQJHWR-REDQGKLVIULHQGVDOOWKHPRUH HPSKDWLFDOO\HYRNHVGLQRVDXULPDJHVLQWKHPLQGVRIWZHQWLHWKDQGWZHQW\ILUVWFHQWXU\%LEOH UHDGHUV$FFRUGLQJWR-REWKHOHYLDWKDQZLHOGV³IHDUVRPHWHHWK´DPRXWKOLNH³GRRUV´DEDFN FRYHUHGZLWK³URZVRIVKLHOGV´DFKHVW³KDUGDVURFNKDUGDVDORZHUPLOOVWRQH´DQGDQXQGHUVLGH OLNH³MDJJHGSRWVKHUGV´6RLPSHQHWUDEOHLVWKHOHYLDWKDQ¶VQDWXUDODUPRUWKDWKXPDQV¶VZRUGV VSHDUVMDYHOLQVFOXEVVOLQJVWRQHVDQGDUURZVHVVHQWLDOO\ERXQFHRIISURYLGLQJQRHIIHFWLYH SURWHFWLRQDJDLQVWWKLVQHSHVK 0HWDSKRULFODQJXDJHDERXQGVLQOHYLDWKDQ¶VGHSLFWLRQHYHQPRUHVRWKDQLQEHKHPRWK¶V7KH SDVVDJHDOVRPDNHVDQH[SOLFLWFRQQHFWLRQEHWZHHQWKHOHYLDWKDQ¶VIHURFLW\DQGWKHWRSLFRIKXPDQ SULGH-REVD\V³$Q\KRSHRIVXEGXLQJLW>OHYLDWKDQ@LVIDOVHWKHPHUHVLJKWRILWLVRYHUSRZHULQJ 1RRQHLVILHUFHHQRXJKWRURXVHLW:KHQLWULVHVXSWKHPLJKW\DUHWHUULILHGWKH\UHWUHDWEHIRUH LWVWKUDVKLQJ1RWKLQJRQHDUWKLVLWVHTXDO²DFUHDWXUHZLWKRXWIHDU,WORRNVGRZQRQDOOWKDWDUH KDXJKW\LWLVNLQJRYHUDOOWKDWDUHSURXG´ YY±± $Q\FORVHHQFRXQWHUEHWZHHQD KXPDQ ODFNLQJPRGHUQHTXLSPHQW DQGDOHYLDWKDQLVSRUWUD\HGDVSRWHQWLDOO\GHDGO\IRUWKHKXPDQ 8QOLNHWKHEHKHPRWKWKHOHYLDWKDQLVFDUQLYRURXV,WSRVHVDQHYHQPRUHGDQJHURXVDQGWHUULI\LQJ WKUHDWEHFDXVHDKXPDQUXQVWKHULVNRIEHLQJHDWHQ 2QFHDJDLQDVLQWKHGHVFULSWLRQRIWKHEHKHPRWKPHWDSKRUVDQGVLPLOHVGUDPDWLFDOO\H[SUHVVWKH HPRWLRQDOLPSDFWRIDKXPDQ¶VFORVHHQFRXQWHUZLWKDOHYLDWKDQ)ODPHVDQGVSDUNVRIILUHVWUHDP IURPWKHOHYLDWKDQ¶VGRRUOLNHPRXWKZKLOHVPRNHDQGIODVKHVRIOLJKWSRXUIURPLWVQRVWULOVRQO\LQ WKHILJXUDWLYHVHQVH ± 7KHVHZRUGSLFWXUHVFUHDWHDQLPSUHVVLRQRIKRZDKXPDQZRXOG IHHOZKHQFORVHHQRXJKWRGHWHFWWKHOHYLDWKDQ¶VEUHDWK,QVXFKDVLWXDWLRQWKHSHUVRQIDFHVWKH WHUULI\LQJSURVSHFWRILPPLQHQWGHDWKLQWKHMDZVRIDIHURFLRXVEHDVW 7KHOHYLDWKDQ¶VFKHVWOLNHQHGWRDPLOOVWRQHZRXOGVHHPDJUDQLWHEDUULHUWRDQ\KXPDQDWWHPSWLQJ WRZDUGRIIDWWDFNZLWKWKHXVHRIDVSHDURUFOXE $JDLQWKLVFUHDWXUHPDNHVHYHQWKH PLJKWLHVWSHUVRQIHHOXWWHUO\ZHDNDQGKHOSOHVVLQLWVSUHVHQFH:KHQLWDZDNHQVKXPDQVUHWUHDW /LNHWKHEHKHPRWKWKHOHYLDWKDQVSHQGVPXFKWLPHLQWKHZDWHU:KHQLWVZLPV³LWOHDYHVD JOLVWHQLQJZDNHEHKLQGLW´ :KHQLWDWWDFNVLW³PDNHVWKHGHSWKVFKXUQ´ 2QWKH VKRUHOLQHVLWOHDYHVDGLVWLQFWLYH³WUDLOLQWKHPXG´ 2QHGDUHQRW³RSHQWKHGRRUVRILWV PRXWK´ZKLFKLV³ULQJHGDERXWZLWKIHDUVRPHWHHWK´ 7KHOHYLDWKDQKDVSRZHUIXOOLPEVDQGD JUDFHIXOIRUP $OOWKHVHPRUHOLWHUDOGHVFULSWLYHVWDWHPHQWVFRPELQHZLWKWKHILJXUDWLYH VSODVKHVWRKHOSWKHUHDGHULGHQWLI\WKLVFUHDWXUH &HQWXULHVEHIRUHWKHGLVFRYHU\RIGLQRVDXUV%LEOHVFKRODUVFRQVLVWHQWO\LGHQWLILHGWKHOHYLDWKDQDV HLWKHUDFURFRGLOHRUDOOLJDWRU7KHYDULRXVIHDWXUHVPDNHIRUDFORVHPDWFK%RWKVSHFLHVKDYHMDZV QHDUO\DVODUJHDQGIODWDVGRRUVDQGDOWKRXJKWKHPXVFOHVXVHGWRRSHQWKHPDUHUHODWLYHO\ZHDNWKH PXVFOHVXVHGWRFORVHWKHPFDQVQDSVKXWZLWKGHDGO\IRUFH$PDQFDQKROGWKHFURFRGLOH¶VRU DOOLJDWRU¶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²DQRWKHUUHDVRQWRLGHQWLI\LWDVDFURFRGLOH0RUHWKDQRQFHDFURFRGLOHKDVDPEXVKHGDPDWXUHOLRQ DQGGUDJJHGLWLQWRWKHZDWHUZKHUHXSRQIHOORZFURFRGLOHVKHOSGLVSDWFKDQGFRQVXPHWKHOLRQLQ VKRUWRUGHU7KHRQO\DQLPDOWKHFURFRGLOHUHIUDLQVIURPPROHVWLQJLVWKHKLSSRSRWDPXV²IRUJRRG UHDVRQ7KHKLSSRSRWDPXVSURYLGHVWKHFURFRGLOHZLWKHDV\SUH\%HFDXVHWKHWHUULWRULDO KLSSRSRWDPXVXSHQGVDQ\ERDWRUODUJHFUHDWXUHWKDWIORDWVWRRQHDUFURFRGLOHVZDLWMXVWRXWVLGHWKDW LQYLVLEOHWHUULWRULDOERXQGDU\OLQHNQRZLQJWKHKLSSRSRWDPXV¶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²HVSHFLDOO\ RQHVZH¶OOSUREDEO\QHYHUHQFRXQWHU"0\RZQUHVSRQVHWRWKLVZRQGHULQJFRPHVIURPWKH FRQYLFWLRQWKDWZKDWHYHUUHFHLYHVDWWHQWLRQLQ6FULSWXUH¶VSDJHVGHVHUYHVWKRXJKWIXOUHIOHFWLRQ7KLV SDUWLFXODU-RESDVVDJHGULYHVKRPHLQFRORUIXOHYRFDWLYHLPDJHU\VRPHVLJQLILFDQWWUXWKVDERXW*RG DQGXV7KH2QHZKRFUHDWHGWKHVHZLOGEHDVWVUXOHVRYHUDOOOLIHDQGXQGHUVWDQGVWKHPLQZD\VQR KXPDQFDQ+HKDVWKHSRZHUDQGZLVGRPWRWDPHDQ\FUHDWXUHDWZLOO+XPDQVGRQRW7KHVHWZR FUHDWXUHVSRZHUIXOO\GUDPDWL]HRXUQHHGWRGHSHQGXSRQ*RGIRUWKHSRZHUDQGZLVGRPHVVHQWLDOIRU PDQDJLQJ(DUWK¶VOLIHHVSHFLDOO\DQGPRVWLPSRUWDQWO\IRUPDQDJLQJRUWDPLQJRXURZQOLYHV %DFNWRWKH'LQRVDXU4XHVWLRQ %HFDXVHGLQRVDXUVFDSWXUHVRPDQ\SHRSOH¶VLPDJLQDWLRQVHVSHFLDOO\FKLOGUHQ¶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¶VHYHQWV7KDWGD\EHJLQVZLWKWKHFUHDWLRQRIVZDUPVRIVPDOOERGLHGVHD DQLPDOV)URPDQDWXUDOKLVWRU\SHUVSHFWLYHWKLVZRUGLQJVHHPVDQREYLRXVUHIHUHQFHWRWKH &DPEULDQH[SORVLRQ7KHGD\FRQFOXGHVZLWKWKHLQWURGXFWLRQRI(DUWK¶VILUVWELUGVDQGODUJHUVHD DQLPDOV7KHVHWZRHYHQWVVXJJHVWDWLPHZLQGRZIRUGD\ILYHWKDWRSHQVURXJKO\PLOOLRQ\HDUV DJRDQGFORVHVVRPHZKHUHEHWZHHQDQGPLOOLRQ\HDUVDJR7KLVWLPLQJSODFHVWKHGLQRVDXUVLQ WKHPLGVWRIFUHDWLRQGD\ILYH (DUO\LQWKHH[FKDQJHZLWKKLVIULHQGV-REFRPPHQWHG³,QKLVKDQGLVWKHOLIHRIHYHU\FUHDWXUH´ 7KHSVDOPLVWHFKRHV³,QZLVGRP\RXPDGHWKHPDOOWKHHDUWKLVIXOORI\RXUFUHDWXUHV´ 7KHVH%LEOHSDVVDJHVSURFODLP*RG¶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¶VGHVWLQ\WKHSV\FKLDWULVWDVNV³:KDW V\PEROVGR\RXVHHLQWKLVGUHDP"´7KHSDWLHQWUHSOLHV³:´:KLOHGLQRVDXUVZHUHQRWWKH SULPDU\VRXUFHRI(DUWK¶VSHWUROHXPUHVHUYHVWKH\GLGFRQWULEXWHVXEVWDQWLDOO\WR(DUWK¶VELRGHSRVLWV 7KH\DOVRKHOSHGUHJXODWHWKHFKHPLVWU\RI(DUWK¶VDWPRVSKHUH5HDGLQJ3VDOPZLWKDVFLHQWLVW¶V H\H,LQIHUWKDW*RG¶VSODQLQYROYHGVXVWDLQLQJWKHPD[LPXPSRVVLEOHELRPDVVDQGELRGLYHUVLW\ WKURXJKRXWOLIH¶VKLVWRU\RQ(DUWK*HRORJLVWVWHOOXVWKDWIURPWRPLOOLRQ\HDUVDJR(DUWK¶V VKDOORZVHDVDQGZHWFOLPDWHIDYRUHGODUJHUHSWLOLDQFUHDWXUHV,QWKDWHUDGLQRVDXUVVXLWHG*RG¶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¶V DXWKRULW\$V-REPDNHVFOHDU*RGXVHVDQLPDOVWRSXWXVLQRXUSODFHUHYHDOLQJERWKRXUJUHDWQHVV DQGRXUZUHWFKHGQHVV $QLPDOVEULQJXVIDFHWRIDFHZLWKWKHSDUDGR[RIDORYLQJ*RGZKRDOORZVKLVFUHDWXUHVWRVLQDQG WRH[SHULHQFHVLQ¶VHIIHFWV-REEULQJVXVIDFHWRIDFHZLWKWKHTXHVWLRQRIZKRVXIIHUVDQGZK\,I *RGKROGVDEVROXWHFRQWURORYHUDOOFUHDWLRQZK\ZRXOGHYLOEHDOORZHGDQHQWUDQFH"7KHQH[W FKDSWHUH[SORUHVKRZWKHGLDORJXHLQ-REFDQKHOSXVILQGLQVLJKWVDQGDQVZHUVWRWKLVDJHROG TXHVWLRQWKHVWXPEOLQJEORFNRQZKLFKWKHIDLWKRIPDQ\KDVFUDVKHG $QVZHUVWRWKH3UREOHPRI6XIIHULQJ ³'DG´VDLGWKHIUDQWLFYRLFHRQWKHRWKHUHQGRIWKHOLQH³,QHHGPRQH\IRUP\UHQWDQG,QHHGLW WRGD\´7KLVFDOOIDPLOLDUWRPRVWDQ\RQHZKRVHGDXJKWHURUVRQOLYHVDZD\DWFROOHJHFDPHDV, ZDVVFUDPEOLQJWRPHHWDGHDGOLQHEXWP\VRQ¶V³HPHUJHQF\´FRXOGQRWEHSRVWSRQHG6R,GURSSHG HYHU\WKLQJGURYHWRP\EDQNZLWKGUHZFDVKDQGUDFHGWRDGLIIHUHQWEDQNWRGHSRVLWWKLVFDVKLQWR WKHODQGORUG¶VDFFRXQWIRULPPHGLDWHDFFHVV $QWLFLSDWLQJDSRWHQWLDOZDLWDWRQHRUERWKEDQNV,JUDEEHGP\ODWHVWLVVXHRIWKH$VWURSK\VLFDO -RXUQDO,KDWHZDVWLQJUHDGLQJWLPHDQGEDQNOLQHVRIWHQSURYLGHLW7KLVGD\¶VYLVLWGLGQRW GLVDSSRLQW$V,SHUXVHGDQLQWULJXLQJDUWLFOHWKHPDQEHKLQGPHDVNHG³:KDWDUH\RXUHDGLQJ"´+H KDGQHYHUVHHQDQHOHYHQKXQGUHGSDJHWHFKQLFDO³PDJD]LQH´ZLWKKXQGUHGVRIJUDSKVDQGHTXDWLRQV ,WROGKLP,ZDVFKHFNLQJWKHMRXUQDOIRUDUWLFOHVUHOHYDQWWRWKHERRN,ZDVZRUNLQJRQ 7KHPDQH[SUHVVHGHYHQPRUHVKRFNWRGLVFRYHUP\ERRNLQSURJUHVVFRQFHUQHG-RE³+RZFDQ WRGD\¶VDVWURSK\VLFVSRVVLEO\UHODWHWRWKHERRNRI-RE"´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¶VOLIHIRUKXPDQLW\¶VH[LVWHQFHDQGEHQHILW WKHQZK\ZRXOGKHDOORZRXUOLIHWREHIUDXJKWZLWKVRPXFKSDLQ²SK\VLFDOHPRWLRQDOUHODWLRQDO DQGRWKHU"+RZFDQDOOWKH³EDG´VWXIIVHUYHDQ\³JRRG´SXUSRVH"7KHERRNRI-REVHWVIRUWKVRPH KHOSIXOLQVLJKWVIRUDGGUHVVLQJWKHVHDJHROGTXHVWLRQV /DYLVK&UHDWLRQ 2EVHUYLQJ(DUWK¶VEHDXW\DEXQGDQFHGLYHUVLW\DQGJUDQGHXUSHRSOHRIDOOJHQHUDWLRQVDQGFXOWXUHV KDYHEHHQVWUXFNE\WKHH[WUDYDJDQFHRILWDOO7KH&UHDWRUSURYLGHGKXPDQLW\ZLWKVRPXFKPRUHWKDQ DSODFHWRPHUHO\VXUYLYH+HSUHVHQWHGXVZLWKDSODFHWRWKULYH(YHU\RQHRIRXUVHQVHV²SK\VLFDO VRXOLVKDQGVSLULWXDO²KDVEHHQJUDFHGZLWKULFKUHZDUGV(YHQZLWKOLPLWDWLRQVRQWKHLUNQRZOHGJH WHFKQRORJ\DQGH[SHULHQFH-REDQGKLVFRQWHPSRUDULHVSHUFHLYHGWKDW*RGKDGLQYHVWHGJHQHURXVO\ LQKLVFUHDWLRQ7KHGLYHUVHFKDUDFWHULVWLFVDQGFDSDELOLWLHVRI(DUWK¶VSDQRSO\RIFUHDWXUHVLQFOXGLQJ KXPDQVSURYHGWRWKHPWKDW*RGFDUHV$V(OLSKD]-REDQG(OLKXGHFODUHG*RG¶VJORU\DQG JRRGQHVVUHYHUEHUDWHGDOODURXQGWKHP ±±± )URPDWZHQW\ILUVWFHQWXU\SHUVSHFWLYH*RG¶VLQYHVWPHQWLQWKHFUHDWLRQSURFHVVDSSHDUVDOOWKH PRUHDVWRQLVKLQJ/LWWOHPRUHWKDQDKXQGUHG\HDUVDJROLIHVFLHQWLVWVYLHZHGOLYLQJFHOOVDVQRWKLQJ PRUHWKDQEOREVRIIHDWXUHOHVVMHOO\$VWURQRPHUVYLHZHGRXU0LON\:D\*DOD[\DVWKHHQWLUH XQLYHUVH:KDWDGLIIHUHQFHDFHQWXU\RUWZRFDQPDNH 7RGD\VFLHQWLVWVUHFRJQL]HWKDWFHOOVKRXVHWKRXVDQGVRIGLVFUHWHPROHFXOHV6RPHPDWFKWKH IXQFWLRQDOLW\DQGFRPSOH[LW\RIWKHPRVWHOHJDQWLQVWUXPHQWVKXPDQVKDYHHYHUGHVLJQHGDQG FRQVWUXFWHG,QWHUPVRIWKHLUHIILFLHQF\RIRSHUDWLRQDQGRXWSXWWKHVHPROHFXOHVH[FHHGPDQNLQG¶V EHVWDFFRPSOLVKPHQWV7KHLQWULFDWHPDQQHUDQGDVWRQLVKLQJHIILFLHQF\ZLWKZKLFKWKH\ZRUN FROODERUDWLYHO\WRZDUGDFKLHYHPHQWRIFRPSOH[JRDOVIDUH[FHHGVWKHRSHUDWLRQRIKXPDQGHVLJQHG V\VWHPV1RFLW\RSHUDWHVDVVPRRWKO\DVDOLYLQJFHOODQGLWVFRQVWLWXHQWSDUWV $VWURQRPHUVQRZKDYHSOXPEHGWKHXQLYHUVH¶VWKHRUHWLFDOO\REVHUYDEOHOLPLWV:LWKLQWKRVHOLPLWV WKH\VHHDERXWWZRKXQGUHGELOOLRQPHGLXPVL]HGDQGODUJHUJDOD[LHV7KHVHERGLHVDQGWKHGZDUI JDOD[LHVWKDWDFFRPSDQ\WKHPFRQWDLQDWRWDORIDERXWWRELOOLRQWULOOLRQVWDUV$OOWKLVVWXII KRZHYHUFRQVWLWXWHVRQO\DERXWSHUFHQWRIWKHXQLYHUVH¶VPDVV7KHDFWXDOXQLYHUVHLVIDUPRUHYDVW WKDQWKHREVHUYDEOHXQLYHUVH7KHXQLYHUVHZHREVHUYHLVWKHXQLYHUVHRIWKHSDVWEHFDXVHOLJKWWDNHV WLPHWRWUDYHOIURPGLVWDQWDVWURQRPLFDOVRXUFHVWRRXUWHOHVFRSHV%HFDXVHWKHXQLYHUVHKDV FRQWLQXRXVO\H[SDQGHGVLQFHWKHFRVPRVEXUVWLQWRH[LVWHQFHWKHFXUUHQWXQLYHUVHPXVWEH VLJQLILFDQWO\ODUJHUWKDQWKHXQLYHUVHVHHQWKURXJKRXUWHOHVFRSHV7KHXQLYHUVH¶VJHRPHWU\WHOOVXVWKH XQLYHUVHDWWKLVPRPHQWPXVWEHPRUHWKDQDKXQGUHGWLPHVPRUHH[WHQVLYHWKDQWKHXQLYHUVHZHFDQ REVHUYH7KXVWKHDFWXDOXQLYHUVHPXVWEHDWOHDVWDPLOOLRQWLPHVPRUHPDVVLYHWKDQELOOLRQ WULOOLRQVWDUV (YHQQRQWKHLVWLFDVWURQRPHUVDFNQRZOHGJHWKHXQLYHUVH¶VVWUDWHJLFGHVLJQWRDFFRPPRGDWHWKH HYHQWXDOSRVVLELOLW\RIKXPDQV7KLVUHDOLW\FDOOHGWKHDQWKURSLFSULQFLSOHKDVJDLQHGZLGH DFFHSWDQFH7KHLVWLFDVWURQRPHUVDJUHHWKDWWKH&UHDWRUKDVEHHQIDVKLRQLQJWKHXQLYHUVHIRUDYHU\ ORQJWLPH:KLOHKXPDQVHQWHUHGWKHFRVPLFVFHQHMXVWWHQVRIWKRXVDQGVRI\HDUVDJR*RGKDVFUDIWHG DQGVKDSHGWKHXQLYHUVHRQRXUEHKDOIIRUVRPHELOOLRQ\HDUV )URPDKXPDQSHUVSHFWLYH*RG¶VFUHDWLYHDFWLYLW\LQSUHSDUDWLRQIRURXUDUULYDOVHHPVUDGLFDOO\ RYHUGRQH<HW*RGFDQQRWEHDFFXVHGRIZDVWH:KDWHYHUKHGRHVIXOILOOVDSXUSRVH:KHQWKH 3KDULVHHVDQGWHDFKHUVRIWKHODZDVNHG-HVXVIRUDPLUDFXORXVVLJQMXVWIRUWKHVDNHRIDSRZHU GLVSOD\KHUHIXVHGGHVSLWHKLVFDSDFLW\WRUDLVHDPDQIURPWKHGHDG 0DWW± $VPXFKDV KHORQJHGIRUDKHDOLQJIURP*RGDQGDFNQRZOHGJHG*RG¶VSRZHUWRSHUIRUPLW-REXOWLPDWHO\ UHFRJQL]HGWKDW*RGZRXOGGRQRWKLQJWRLQWHUIHUHZLWKWKHJUHDWHUJRRGKHKHOGLQVWRUH+HGRHV PLUDFOHVWRDFKLHYHKLVSXUSRVHVDQGWKDW¶VDOO 7KHPLQGERJJOLQJDJHDQGH[WHQWRIWKHXQLYHUVHDQGWKHXQIDWKRPDEOHLQWULFDFLHVRIHYHQWKH WLQLHVWHQWLWLHVZLWKLQLWDOOSURFODLPWKDW*RGKDVPLQGERJJOLQJDQGXQIDWKRPDEOHSODQVDQG SXUSRVHVIRULW²DQGIRUKXPDQLW\-XVWDV-RELQLWLDOO\VWUXJJOHGWRJUDVSDQ\SRVVLEOHJRRGSXUSRVH EHKLQGWKHDIIOLFWLRQVDQGORVVHVKHVXIIHUHGKXPDQVWRGD\VWLOOVWUXJJOHWRJUDVSDQ\JRRGSXUSRVH EHKLQGWKHVXIIHULQJVOLIHLQHYLWDEO\EULQJV²IDUPRUHWRVRPHWKDQWRRWKHUV²ZLWKRXWDSSDUHQWUK\PH RUUHDVRQ $EVROXWH6RYHUHLJQW\ -REDQGKLVIULHQGVH[SUHVVHGQRGRXEWVDERXWWKH&UHDWRU¶VDEVROXWHVRYHUHLJQW\7KH\VWDWHGWKHLU DVVXPSWLRQWKDWYHU\JRRGUHDVRQVPXVWH[LVWIRUHYHU\HYHQWDQGFLUFXPVWDQFHWKDWRFFXUV²ERWK JRRGDQGEDG$V-REGHFODUHGDWWKHEHJLQQLQJRIKLVWULDOVDQGDIIOLFWLRQV³7KH/RUGJDYHDQGWKH /RUGKDVWDNHQDZD\PD\WKHQDPHRIWKH/RUGEHSUDLVHG´ (DUO\LQWKHGLDORJXHZLWKKLVFRPIRUWHUV-REGHYRWHGDQHQWLUHVSHHFKWRGHVFULELQJ*RG¶V OLPLWOHVVSRZHUKLVFDSDFLW\WRDFKLHYHDQ\WKLQJKHZDQWVDWDQ\WLPHDQGDQ\ZKHUH -RE :KHWKHU LWEHPRYLQJPRXQWDLQVILQHWXQLQJWKHSK\VLFVRIWKHVXQDQGVWDUVJXLGLQJWKHFLUFXPVWDQFHVDQG HYHQWVRIDSHUVRQ¶VOLIHRUEULQJLQJWURXEOHWRVRPHDQGEOHVVLQJVWRRWKHUV*RGFDQDQGLQIDFW GRHVWDNHUHVSRQVLELOLW\IRULWDOO)URP-RE¶VSHUVSHFWLYHQRFLUFXPVWDQFHRUHYHQWDQ\ZKHUHZLWKLQ RUEH\RQGWKHFRVPRVRFFXUVRXWVLGHRIWKH&UHDWRU¶VFRQWURO ,QFKDSWHU-REH[SRXQGVIXUWKHURQ*RG¶VIRUHNQRZOHGJHDQGVRYHUHLJQW\³+HNQRZVWKHZD\ WKDW,WDNH+HVWDQGVDORQHDQGZKRFDQRSSRVHKLP"+HGRHVZKDWHYHUKHSOHDVHV+HFDUULHV RXWKLVGHFUHHDJDLQVWPHDQGPDQ\VXFKSODQVKHVWLOOKDVLQVWRUH´ ± -REXQGHUVWRRG *RG¶VVRYHUHLJQW\DVFRQWLQXDOQRWRFFDVLRQDO+HSURFODLPHG³:KDWLVPDQNLQGWKDW\RXPDNHVR PXFKRIWKHPWKDW\RXJLYHWKHPVRPXFKDWWHQWLRQWKDW\RXH[DPLQHWKHPHYHU\PRUQLQJDQGWHVW WKHPHYHU\PRPHQW"´ ± 3HUIHFW/RYH -REDQGKLVIULHQGVDOVRH[SUHVVHGWKHLUEHOLHILQ*RG¶VORYLQJNLQGQHVV(OLKXVSRNHRI*RG¶V JHQHURXVSURYLVLRQIRURXUSK\VLFDOQRXULVKPHQWGHFODULQJWKDW*RG³SURYLGHVIRRGLQDEXQGDQFH´ 9LUWXDOO\HYHU\SHRSOHJURXSRQ(DUWKFHOHEUDWHVWRJHWKHUDURXQGIRRG*RGRIIHUHGLWLQ JUHDWTXDQWLW\DQGLQYDULHWLHVRIIODYRUDURPDDQGWH[WXUH:KLOHKHFRXOGKDYHGHOLYHUHGRXU QXWULWLRQDOQHHGVZLWKRXWVXFKIULOOVLQVWHDGKHPDGHDFRPSOH[PHQXWRGHOLJKWDOORXUSK\VLFDO VHQVHV 6DGO\KXPDQPLVPDQDJHPHQWRI*RG¶VULFKSURYLVLRQKDVOHGWRWKHWUDJHG\RIZLGHVSUHDG VWDUYDWLRQ (OLSKD]DFNQRZOHGJHG*RGDVWKHVRXUFHRIDOOKXPDQLW\¶VQHHGVLQFOXGLQJWKHQHHGIRUVDIHW\DQG FRPIRUW³7KHORZO\KHVHWVRQKLJKDQGWKRVHZKRPRXUQDUHOLIWHGWRVDIHW\´ %HFDXVHRI *RGKHDGGV³WKHSRRUKDYHKRSH´ (YHU\RQHEHQHILWVIURP*RG¶VSURWHFWLRQ³)URPVL[ FDODPLWLHVKHZLOOUHVFXH\RXLQVHYHQQRKDUPZLOOWRXFK\RX´ (YHQLQWKHGHSWKVRIKLVDQJXLVKDQGWRUPHQW-REFRXOGVD\ZLWKFRQYLFWLRQ³<RXJDYHPHOLIHDQG VKRZHGPHNLQGQHVVDQGLQ\RXUSURYLGHQFHZDWFKHGRYHUP\VSLULW´ /RRNLQJWRWKHIXWXUH -REDQWLFLSDWHV³<RXZLOOORQJIRUWKHFUHDWXUH\RXUKDQGVKDYHPDGH´ 'HVSLWHKLVLQWHQVH VXIIHULQJDQGWKHFRQIXVLRQLWEURXJKWKLP-REWUXVWHG*RG¶VPRWLYHVWRZDUGKLP+LVWUXVWILQGVDQ HFKRLQ3DXO¶VDIILUPDWLRQWKDW³LQDOOWKLQJV*RGZRUNVIRUWKHJRRGRIWKRVHZKRORYHKLPZKRKDYH EHHQFDOOHGDFFRUGLQJWRKLVSXUSRVH´ 5RP $IIOLFWLRQVDQGVXIIHULQJVEHIDOOHYHU\RQH*RG ³VHQGVUDLQRQWKHULJKWHRXVDQGWKHXQULJKWHRXV´ 0DWW DQGVRPHWLPHVLQVWHDGRIZDWHULQJ WKHLUFURSVWKHUDLQIORRGVWKHLUODQGDQGGHVWUR\VDOOWKH\RZQ%XW*RGSURPLVHVWKDWZKDWHYHU KDSSHQVKLVLQWHQWLVWREULQJDERXWDJUHDWHUJRRG²ZKHWKHULQPDWHULDOWHUPVRULQVSLULWXDODQG HWHUQDOEOHVVLQJV 3HUIHFW&UHDWLRQ $*RGZKRLVDEVROXWHO\VRYHUHLJQDQGSHUIHFWO\ORYLQJZRXOGPDNHQRPLVWDNHVLQKLVFUHDWLYH ZRUN'HVSLWHVNHSWLFV¶UHSRUWVRIEDGGHVLJQVLQQDWXUHRQHDIWHUDQRWKHURIWKHVHVRFDOOHGEOXQGHUV KDVEHHQVKRZQRQFORVHUH[DPLQDWLRQWRVHUYHVRPHEHQHILFLDOSXUSRVH7KHFUDIWVPDQVKLSRIWKH ELEOLFDO*RGKDVEHHQDQGZLOOFRQWLQXHWREHYLQGLFDWHG+RZHYHUZH¶UHVWLOOOHIWWRDFFRXQWIRUDQG GHDOZLWKWKHREYLRXVLPSHUIHFWLRQVRIOLIHLQWKLVZRUOG²GLVHDVHLQMXVWLFHQDWXUDOGLVDVWHUKXPDQ FUXHOW\DQGGHDWK²QRWWRPHQWLRQRXURZQLQFDSDFLW\WROLYHDQGORYHSHUIHFWO\+RZFDQWKLV VHHPLQJFRQWUDGLFWLRQEHUHFRQFLOHG" -REDQGKLVIULHQGVJUDVSHGWKHLGHDWKDWWKLVZRUOGWKLVOLIHLVQRWKXPDQLW\¶VXOWLPDWHGHVWLQDWLRQ 7KH\VSRNHZLWKFRQILGHQWKRSHRIDVXSHULRUOLIH\HWWRFRPHOLIHEH\RQGSK\VLFDOGHDWK,QWKHPLGVW RIKLVWULDOV-RESURIHVVHGDVVXUDQFHRIWKHUHZDUGDZDLWLQJKLP³7KRXJKKHVOD\PH\HWZLOO,KRSH LQKLP´ ³,ZLOOZDLWIRUP\UHQHZDOWRFRPH´ 7KLVSLYRWDOWUXWKSRXUHGIURP-RE¶V OLSVZKHQKHSURFODLPHG³$IWHUP\VNLQKDVEHHQGHVWUR\HG\HWLQP\IOHVK,ZLOOVHH*RG,P\VHOI ZLOOVHHKLPZLWKP\RZQH\HV²,DQGQRWDQRWKHU+RZP\KHDUW\HDUQVZLWKLQPH´ ± /RJLFGLFWDWHVWKDWLIDVXSHULRUOLIHDZDLWV²DQH[LVWHQFHDERYHDQGEH\RQGWKLVHDUWKO\UHDOLW\²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²LILWSHUIHFWO\IXOILOOVKLVJRRGSXUSRVH+HUHWKHQDUHWKHFUXFLDO TXHVWLRQVZHPXVWDVNDERXWRXUZRUOG 'RHVKXPDQLW\¶VWLPHDQGH[SHULHQFHLQWKLVZRUOGUHSUHVHQWDQHVVHQWLDOVWHSRISUHSDUDWLRQIRU VRPHWKLQJEHWWHU" 'RHVWKHOHYHORUGXUDWLRQRIKXPDQLW\¶VH[SRVXUHWRGLVFRPIRUWSDLQDQGVXIIHULQJH[FHHG ZKDW¶VQHFHVVDU\WRDFFRPSOLVKWKDWSUHSDUDWLRQ" 0XOWLSXUSRVH&UHDWLRQ &KULVWLDQLW\¶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¶VHIIHFWV²HYLOVXIIHULQJSDLQDQGGHDWK:KDW¶VPRUHLW HVWDEOLVKHVFRQGLWLRQVZKHUHE\*RGFDQJXDUDQWHHSHUPDQHQWIUHHGRPIURPVLQDQGXOWLPDWHO\ XQVKDFNOHKXPDQIUHHZLOOIURPWKHUHVWUDLQWVLPSRVHGE\WKHFRVPLFVSDFHWLPHGLPHQVLRQVDQG SK\VLFDOODZV 7KH%LEOHKROGVWKHSURPLVHRIDQRWKHUFUHDWLRQIRUWKRVHZKRFKRRVHWROLYHIRUHYHUZLWK*RG XQGHUKLVGLYLQHDXWKRULW\7KLV³QHZFUHDWLRQ´ZLOOEHFRPHWKHLUVLPPHGLDWHO\DIWHUWKHJUHDWZKLWH WKURQHMXGJPHQWGHVFULEHGLQ5HYHODWLRQ±7KHSHUIHFWLRQZHKXPDQVQRZGUHDPRI²DQG PRUH²ZLOOEHFRPHDQXQHQGLQJUHDOLW\2XUUROHVDVZHOODVRXUUHODWLRQVKLSVZLWK*RGHDFKRWKHU HYHQ-REDQGKLVIULHQGV WKHDQJHOVDQGDQ\RWKHUEHLQJV*RGFKRRVHVWRLQFOXGHZLOOSURYLGH SHUIHFWVDWLVIDFWLRQ>@ 7HPSRUDU\([SRVXUHWR6LQ¶V(IIHFWV 7KHELEOLFDOGRFWULQHRIWZRFUHDWLRQVHDFKSHUIHFWLQLWVRZQULJKWHVVHQWLDOO\XQGHUFXWVWKHPRVW IUHTXHQWO\WRXWHG³HYLGHQFH´IRUDWKHLVPRUQRQWKHLVP,QKLVERRN*RG7KH)DLOHG+\SRWKHVLV SDUWLFOHSK\VLFLVW9LFWRU6WHQJHUZULWHV³7KHSUREOHPRIHYLOUHPDLQVWKHPRVWSRZHUIXODUJXPHQW DJDLQVW*RG´>@,QGHHGWKHSUREOHPRIHYLOUHPDLQVWKHRQO\³SRVLWLYH´ WKDWLVQRQQHJDWLYH DUJXPHQWDJDLQVW*RG¶VH[LVWHQFH VHHVLGHEDUS 1RQWKHLVWVVSHOORXWZKDWWKH\FRQVLGHU³WKHORJLFDOSUREOHPRIHYLO´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¶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¶VJRRG 2QHUHDVRQWKHSUREOHPRIHYLOKDVSHUVLVWHGDVDQDUJXPHQWDJDLQVW*RGPD\EHWKDWZHVWUXJJOHVR PLJKWLO\WRLGHQWLI\ZKDWHYHQWXDOJRRGFRXOGSRVVLEO\MXVWLI\WKHPDJQLWXGHRIVLQ¶VKRUULILFLPSDFW ,Q6WHQJHU¶VZRUGV³1RRQHFDQFRQFHLYHRIDUHDVRQ*RGFRXOGKDYHIRUDOORZLQJVRPXFK VXIIHULQJ´>@+HDGGV³:HKDYHWKHXQGHQLDEOHHPSLULFDOIDFWRIFRQVLGHUDEOHVXIIHULQJLQWKH ZRUOGDQGKDYHQRUHDVRQWREHOLHYHWKDWWKHJUHDWEXONRIWKDWVXIIHULQJLVQHFHVVDU\´>@ 6WHQJHU¶VFRPPHQWVOHDGWRWKHTXHVWLRQ+RZPXFKVXIIHULQJLVQHFHVVDU\²DQGQHFHVVDU\WR DFFRPSOLVKZKDW",IVXIIHULQJVHUYHVWKHSXUSRVHRIH[SRVLQJKXPDQLW\¶VIDWDOIODZDQGWKHQHHGIRU KHOSIURPDERYHWKHQSHUKDSVZHQHHGVWLOOPRUHQRWOHVV7ZHQWLHWKFHQWXU\KLVWRU\VDGO\UHYHDOV KRZGLIILFXOWLWLVWRH[SRVHKXPDQLW\¶VIDWDOIODZ0RUHWKDQDKXQGUHGPLOOLRQSHRSOHZHUHEUXWDOO\ PXUGHUHGLQWKDWRQHFHQWXU\DORQHDWWKHKDQGVRIGHVSRWVZKREXLOWWKHLUUHJLPHVRQWKHQRWLRQRI KXPDQLW\¶VDGHTXDF\WRJRYHUQWKHZRUOGIRUWKHJRRGRIDOO &RPPRQ 1HJDWLYH $UJXPHQWVIRU$WKHLVP 7RUHMHFW*RGE\GHQ\LQJKLVH[LVWHQFHGRHVQ¶WH[DFWO\HTXDWHZLWKDILUPORJLFEDVHGEHOLHILQ*RG¶VQRQH[LVWHQFHEXW UHMHFWLRQDQGGHQLDOFKDUDFWHUL]HWKHUHDFWLRQVRIPRVWSHRSOH,¶YHPHWZKRDGRSWWKHDWKHLVWODEHO7KHVHDUHVRPHRIWKH UHDVRQVWKH\W\SLFDOO\JLYHIRUWKHLUUHVSRQVH )DPLO\IULHQGVFOHUJ\RUVWUDQJHUVZKRVKRXOGKDYHEHHQNLQGDQGFDULQJLQVWHDGLQIOLFWHGSDLQ*RGFDQ¶WH[LVW RUEHJRRG LIKH OHWVWKDWKDSSHQ &KULVWLDQVRUSHRSOHZKRFODLPHGWREH&KULVWLDQVKDYHFRPPLWWHGWHUULEOHGHHGVRUH[KLELWHGFKDUDFWHUIODZVZRUVHWKDQWKRVHRI QRQEHOLHYHUV6RQRQEHOLHILVMXVWDVJRRGDVEHOLHI 7KRVHZKREHOLHYHLQ*RGVHHPOHVVLQWHOOLJHQWRUKDYHOHVVHGXFDWLRQWKDQWKRVHZKRGLVEHOLHYH)DLWKUHIOHFWVVWXSLGLW\RU LJQRUDQFH 5HOLJLRXVEHOLHIVDSSHDUHQWLUHO\VXEMHFWLYHEDVHGRQHPRWLRQIDEOHVIHDUVDQGIDOVHKRRGV%HOLHYHUVWHQGWREHLQFRKHUHQWRU LQFRQVLVWHQWRUERWK 3UD\HUGRHVQRPRUHJRRGWKDQWDONLQJWRWKHFHLOLQJ3HRSOHSUD\IRUJRRGWKLQJVDQGQRWKLQJKDSSHQV6RWKHUHPXVWEHQRRQH OLVWHQLQJRUZRUWKDVNLQJ 6XFKUDWLRQDOL]DWLRQVGRQRWH[FXVHUHMHFWLQJWKHHYLGHQFHIRU*RGQRUGRWKH\PDNHVHQVH*RGFDOOVSHRSOHWRZRUVKLSDQG IROORZKLPQRWRWKHUSHRSOH%HFDXVHEHOLHYHUVVRPHWLPHVPD\EHKDYHEDGO\RULJQRUDQWO\EHLOOHTXLSSHGWRGHIHQGWKHLU IDLWKRUIDLOWRUHFHLYHZKDWWKH\SUD\IRUOHWVQRRQHRIIWKHSURYHUELDOKRRN 7KHWHQGHQF\WRZDUGVHOHFWLYH³HYLGHQFH´FDQEHVWURQJLQXVDOO+RZHYHUPDQ\DWKHLVWVWHQGWRUHO\RQLWKHDYLO\LIQRW H[FOXVLYHO\7KH\SRLQWWRWKHZRUVWH[DPSOHVIURPWKHSDVWVXFKDVWKH&UXVDGHVRUWKH,QTXLVLWLRQDQGWRRIWHQGLVJUDFHG &KULVWLDQOHDGHUVLQWKHSUHVHQWDVSULPHUHSUHVHQWDWLYHVRIZKDWEHOLHILQ*RGDFFRPSOLVKHV (DFKRIWKHVHDUJXPHQWVDJDLQVWIDLWKUHSUHVHQWVDORJLFDOIDOODF\VKRZLQJWKDWORJLFLVQRWWKHFRUHLVVXHLQSHRSOH¶V UHMHFWLRQRI*RG$VP\IULHQG.HQQHWK6DPSOHVSRLQWVRXWLWPD\EHKHOSIXOWRWXUQDWWHQWLRQWRWKHTXHVWLRQRIJRRGQHVV UDWKHUWKDQHYLO,WSUHVHQWVHYHU\ELWDVJUHDWDSKLORVRSKLFDOFKDOOHQJH+HVXJJHVWVWHVWLQJWKHFDVHIRUEHOLHILQ*RGE\ XVLQJWKHEHVWH[DPSOHVDPRQJEHOLHYHUVQRWWKHZRUVWDQGE\HYDOXDWLQJWKHVWURQJHVWHYLGHQFHDQGEHVWUHDVRQLQJQRW WKHZRUVW+LVZRUGVHFKRWKRVHRI3HWHUZKRH[KRUWVEHOLHYHUVWRSUHSDUHWKHPVHOYHVWRJLYHUHDVRQVIRUWKHLUKRSHDQGWR GRVRZLWKJHQWOHQHVVUHVSHFWDQGWKHLQWHJULW\RIDFOHDUFRQVFLHQFH 3HW± ,QDGYHUWHQWO\RURWKHUZLVH6WHQJHULPSOLHVDFRPSOHWHQHVVRINQRZOHGJHQHLWKHUKHQRUDQ\RWKHU KXPDQKDVDEDVLVWRFODLP7KHIDFWWKDWKHFDQQRWHQYLVLRQDVXIILFLHQWUHDVRQZLWKLQWKHSK\VLFDO FRQILQHVRIWKHXQLYHUVHGRHVQRWFRQVWLWXWHSURRIWKDWQRVXFKUHDVRQIRUVXIIHULQJH[LVWV1RGRXEW -REIRXQGKLPVHOIXQDEOHWRLPDJLQHDQ\JRRGWKDWFRXOGSRVVLEO\RXWZHLJKKLVVXIIHULQJDQGORVV ,¶YHHYHQPHWSHRSOHZKRFDUU\UHVHQWPHQWWRZDUG*RGRQEHKDOIRI-REEHFDXVHWKH\GLVSXWHWKH ZRUWKRIWKHILQDORXWFRPHRI-RE¶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²LQRWKHUZRUGVVLQ²ZRXOGEHFRPHWKHURRWFDXVHRIDOO WKDWZHUHFRJQL]HDVOHVVWKDQRUFRQWUDU\WRWKHVHLGHDOV5HEHOOLRQWDNHVPDQ\IRUPV,WPD\EHDV VXEWOHDVVLPSO\LJQRULQJ*RGRUDVEODWDQWDVODVKLQJRXWYLROHQWO\WRKDUPRWKHUV%XWZLWKRXWWKH IUHHGRPWRH[HUFLVHWKLVFKRLFHZKDWZRXOGEHOR