- 5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH (/(&7521,& &,7$7,21 )(' $SS 3 WK &LU )LOH 1DPH DS 81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB 5,&+$5' s 5 W@RDOORZWKH WKURXJK DPHQGPHQW RI SODQl SURYLGHV LQ SHUWLQHQW SDUW DV IROORZV )XQG WR UHWDLQ WKH LQWHUHVW LW HDUQHG RQ IXQGV ZURQJIXOO\ ZLWKKHOGZRXOGEHWRDSSURYHRIXQMXVWHQULFKPHQWl6ZHHWY m 7KH DFFUXHG EHQHILW RI D SDUWLFLSDQW XQGHU D SODQ PD\ QRW EH &RQVROLGDWHG$OXPLQXP&RUS)GWK&LU GHFUHDVHG E\ DQ DPHQGPHQW RI WKH SODQ TXRWLQJ 6KRUW Y &HQWUDO 6WDWHV 6RXWKHDVW 6RXWKZHVW$UHDV3HQVLRQ)XQG)GWK&LU )RU SXUSRVHV RI SDUDJUDSK D SODQ DPHQGPHQW ZKLFK KDV WKH HIIHFW RIo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jVDFWXDOUDWHRIUHWXUQWXUQVRXWWR EHIRUH RU DIWHU WKH DPHQGPHQW WKH SUHDPHQGPHQW FRQGLWLRQV IRU WKH VXEVLG\ l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jV DZDUG RI SUHMXGJPHQW LQWHUHVW H[FHHGHG7KHQHZFHLOLQJIRUVXFKGLVWULEXWLRQVZDV XQGHUWKHIRUPXODGHVFULEHGDWSVXSUDZHKDYHmORQJ SHUFHQWRIWKH3%*&UDWH7KHDPHQGHGFHLOLQJoLH UHFRJQL]HG WKDW WKH GLVWULFW FRXUW PD\ >DZDUG SUHMXGJPHQW WKH3%*&UDWHIRUGLVWULEXWLRQVRIRUOHVVDQG LQWHUHVW@DWLWVGLVFUHWLRQLQDFFRUGDQFHZLWKJHQHUDOHTXLWDEOH SHUFHQWRIWKH3%*&UDWHIRUGLVWULEXWLRQVH[FHHGLQJ SULQFLSOHVl)RUGY8QLUR\DO)GWK&LU o LV FRPPRQO\ FDOOHG WKH m UDWHl DIWHU WKH UHOHYDQW :HWKHUHIRUHDSSO\DQmDEXVHRIGLVFUHWLRQlVWDQGDUG VHFWLRQRIWKH7D[5HIRUP$FW7KH&RGHDQG(5,6$DOVR LQUHYLHZLQJWKHDZDUG SURYLGHGWKDWDSODQFRXOGQRWGLVWULEXWHDEHQHILWLQDOXPS VXPZLWKRXWWKHSDUWLFLSDQWjVFRQVHQWLIWKHEHQHILWZDVRYHU $PRQJ WKH FRQVWUDLQWV RQ D GLVWULFW FRXUWjV GLVFUHWLRQ WR VKDSHDQDZDUGRISUHMXGJPHQWLQWHUHVWLQDQ(5,6$FDVHLV WKHIDFWWKDWZHORRNZLWKGLVIDYRURQVLPSO\DGRSWLQJVWDWH ODZLQWHUHVWUDWHV(5,6$LVmQRWDQDUHDµSULPDULO\RIVWDWH FRQFHUQjl)RUG)GDW,QWHUHVWDZDUGVVKRXOGQRW EHSXQLWLYHEXWVKRXOGmVLPSO\FRPSHQVDWHDEHQHILFLDU\IRU WKHORVWLQWHUHVWYDOXHRIPRQH\ZURQJO\ZLWKKHOGIURPKLP RUKHUl,GDW 7KHTXHVWLRQIDFHGE\WKHGLVWULFWFRXUWLQWKLVFDVHWKHQ ZDVKRZEHVWWRFDOFXODWHWKHmORVWLQWHUHVWYDOXHRIPRQH\ ZURQJO\ZLWKKHOGl75:XUJHVWKDWWKHRQO\DSSURSULDWH UDWHZRXOGEHHLWKHUWKDWHVWDEOLVKHGE\86&oD UDWHWLHGWRWKHDYHUDJHZHHN8QLWHG6WDWHV7UHDVXU\ELOO UDWHIRUWKHUHOHYDQWSHULRGoRUDUDWHOLQNHGWRWKH3%*&UDWH LQWKHPDQQHUSUHVFULEHGE\ :H KDYH XSKHOG D GLVWULFW FRXUWjV DZDUG RI SUHMXGJPHQW LQWHUHVWFDOFXODWHGXQGHU86&)RUG)GDW 2WKHUFRXUWVKDYHGRQHVRDVZHOO6HHHJ$OJLHY 5&$*OREDO&RPPXQLFDWLRQ,QF)GG&LU 3XE / 1R 6WDW FRGLILHG DW (5,6$ H DQG J 86& H DQG XSKROGLQJDGLVWULFWFRXUWjVFKRLFHRIWKHUDWH J DQG ,5& 86& D% DQG H RQWKHJURXQGVWKDWLWSURYLGHGDmFORVHUDSSUR[LPDWLRQRIWKH 7KH DERYHFLWHG VHFWLRQV RI (5,6$ DQG WKH ,5& ZHUH ODWHU OLNHO\UHWXUQRQSODLQWLIIVjXQSDLGEHQHILWVl DPHQGHG E\ WKH 5HWLUHPHQW 3URWHFWLRQ $FW RI 3XE / 1R 6WDW 7KDW $FW KRZHYHU GLG QRW EHFRPH DSSOLFDEOH 7KLVLVQRWWRVD\KRZHYHUWKDWWKHUDWHLVWKHRQO\ XQWLO sXO\ o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mIDYRUDEOH UHWLUHPHQWVXEVLG\ZKHUHWKHOXPSVXPIRUPRISD\PHQWZDV GHWHUPLQDWLRQ OHWWHU LQGLFDWHV RQO\ WKDW DQ HPSOR\HH UHWLUHPHQW SODQ TXDOLILHV IRU IDYRUDEOH WD[ WUHDWPHQW E\ PHHWLQJWKHIRUPDOUHTXLUHPHQWVRI,5&Dl(VGHQ Y %DQN RI %RVWRQ 1R 86 $SS /(;,6 DW G&LU6HSW7KDWFRXUWZHQWRQ m 3ODQ PD\ GLVWULEXWH EHQHILW LQ H[FHVV RI RQO\ ZLWK WRVD\WKDWmDGMXGLFDWLRQRI>DQHPSOR\HHjV@ULJKWVLVIRUWKH FRQVHQW n ,I n $ WKH SUHVHQW YDOXH RI WKH TXDOLILHG MRLQW DQG VXUYLYRU IHGHUDOFRXUWVQRWWKHILHOGRIILFHVRIWKH,56l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o (PSOR\HHV WDNLQJ HDUO\ UHWLUHPHQW DIWHU 'HFHPEHU DQG HOHFWLQJ WR UHFHLYH WKHLU 'HWHUPLQDWLRQ RI SUHVHQW YDOXH n DFFUXHG UHWLUHPHQW EHQHILWV LQ D OXPS VXP DUH $ ,Q JHQHUDO n )RU SXUSRVHV RI SDUDJUDSKV DQG HQWLWOHG WR KDYH WKH UDWH XVHG LQ WKH WKH SUHVHQW YDOXH VKDOO EH FDOFXODWHG n GHWHUPLQDWLRQ RI WKH SUHVHQW YDOXH RI VXEVLGL]HG EHQHILWV DWWULEXWDEOH WR VHUYLFH EHIRUH WKH L E\ XVLQJ DQ LQWHUHVW UDWH QR JUHDWHU WKDQ WKH DPHQGPHQW DSSOLFDEOH LQWHUHVW UDWH LI WKH YHVWHG DFFUXHG EHQHILW XVLQJ VXFK UDWH LV QRW LQ H[FHVV RI DQG o :LWK UHVSHFW WR XQVXEVLGL]HG UHWLUHPHQW EHQHILWV DWWULEXWDEOH WR VHUYLFH DIWHU WKH DPHQGPHQW VXFK LL E\ XVLQJ DQ LQWHUHVW UDWH QR JUHDWHU WKDQ SHUFHQW RI WKH DSSOLFDEOH LQWHUHVW UDWH LI WKH YHVWHG DFFUXHG HPSOR\HHVDUHHQWLWOHGWRUHFHLYHWKHDGYDQWDJHRI EHQHILW H[FHHGV DV GHWHUPLQHG XQGHU FODXVH WKHDOWHUQDWLYHSUHVHQWYDOXHFDOFXODWLRQSUHVFULEHG L E\ WKH SODQ DPHQGPHQWV DGRSWHG RQ 2FWREHU DQG ,Q QR HYHQW VKDOO WKH SUHVHQW YDOXH GHWHUPLQHG XQGHU VXEFODXVH ,, >VLF@ EH OHVV WKDQ o (DFK PHPEHU RI WKH SODLQWLII FODVV VKRXOG EH % $SSOLFDEOH LQWHUHVW UDWH n )RU SXUSRVHV RI DZDUGHGMXGJPHQWIRUWKHDPRXQWLIDQ\E\ZKLFK VXESDUDJUDSK $ WKH WHUP µDSSOLFDEOH LQWHUHVW UDWHj PHDQV WKHOXPSVXPWRZKLFKKHRUVKHLVHQWLWOHGH[FHHGV WKH LQWHUHVW UDWH ZKLFK ZRXOG EH XVHG DV RI WKH GDWH RI WKH WKHOXPSVXPDFWXDOO\SDLG GLVWULEXWLRQ E\ WKH 3HQVLRQ %HQHILW *XDUDQW\ &RUSRUDWLRQ IRU SXUSRVHV RI GHWHUPLQLQJ WKH SUHVHQW YDOXH RI D OXPS VXP GLVWULEXWLRQ RQ SODQ WHUPLQDWLRQl (5,6$jV SDUDOOHO SURYLVLRQ VLQFH DPHQGHG ZDV FRGLILHG DW 86& J 5\EDUF]\NHWDOY75:HWDO 1R 1R 5\EDUF]\NHWDOY75:HWDO FKRVHQ7KLVGHFLVLRQZDVLPSOHPHQWHGLQSODQDPHQGPHQWV 7KH ODQJXDJH RI WKH 75: SODQ LWVHOI VXJJHVWV WKDW WKH DGRSWHGRQ'HFHPEHUoDGDWHFULWLFDOO\LPSRUWDQW GUDIWHUVVKDUHGRXUXQGHUVWDQGLQJWKDWSULRUWR'HFHPEHU DVZHVKDOOVHHWRWKHUHVROXWLRQRIWKHFDVHQRZEHIRUHXV HDUO\ UHWLUHPHQW VXEVLGLHV ZHUH VXEMHFW WR DFFUXDO 6HFWLRQRIWKHSODQIRUH[DPSOHVD\VWKDWWKHOXPSVXP :LWK WKH 'HFHPEHU DPHQGPHQWV ZKLFK ZHUH PDGH EHQHILWZLOOEHFDOFXODWHGDVWKHJUHDWHURIWKH0RRG\jVUDWH UHWURDFWLYH WR sDQXDU\ 75:jV UHWLUHPHQW SODQ DSSOLHG WR WKH mDFFUXHG RU VXEVLGL]HG (DUO\ 5HWLUHPHQW SURYLGHGLQUHOHYDQWSDUWDVIROORZV %HQHILWl>HPSKDVLVDGGHG@RUSHUFHQWRIWKH3%*&UDWH DSSOLHGWRWKHmDFFUXHG1RUPDORUXQVXEVLGL]HGlEHQHILW%\ m7KHOXPSVXPEHQHILWVKDOOEHWKHSUHVHQWYDOXHRIWKH XVLQJmDFFUXHGlDQGmVXEVLGL]HGlDVV\QRQ\PVWKLVSURYLVLRQ PRQWKO\ VLQJOH OLIH DQQXLW\ H[FOXGLQJ DQ\ HDUO\ LQGLFDWHVWKDWWKHHDUO\UHWLUHPHQWVXEVLGL]HGEHQHILWFDQEH UHWLUHPHQWVXEVLG\WRZKLFKWKH3DUWLFLSDQWZRXOGKDYH DFFUXHG EHHQ HQWLWOHG H[FHSW IRU WKH HOHFWLRQ RI WKH OXPS VXP IRUP RI SD\PHQW 7KH OXPS VXP VKDOO LQFOXGH WKH 2XU FRQFOXVLRQ LV QRW XQGHUPLQHG DV ZH VHH LW E\ WKH SUHVHQW YDOXH RI WKH DQWLFLSDWHG 3RVW5HWLUHPHQW IDYRUDEOHmGHWHUPLQDWLRQOHWWHUlWKDW75:UHFHLYHGIURPWKH $GMXVWPHQWV ZKLFK ZRXOG KDYH EHHQ PDGH KDG WKH ,QWHUQDO5HYHQXH6HUYLFHZLWKUHVSHFWWRWKH75:SHQVLRQ 3DUWLFLSDQWHOHFWHGPRQWKO\SD\PHQWVl75:6DODULHG SODQDVDPHQGHGHIIHFWLYHsDQXDU\$OWKRXJKWKLV 3HQVLRQ3ODQ6HFWLRQELDVDPHQGHG'HFHPEHU OHWWHUE\LWVWHUPVmUHODWHVRQO\WRWKHVWDWXVRI>75:jV@SODQ HPSKDVLVVXSSOLHG XQGHU WKH ,QWHUQDO 5HYHQXH &RGHl (5,6$ FRQWDLQV D SURYLVLRQUHTXLULQJWKH6HFUHWDU\RI/DERUWRDFFHSWIDYRUDEOH 7KHHOLPLQDWLRQRIWKHHDUO\UHWLUHPHQWOXPSVXPVXEVLG\ GHWHUPLQDWLRQ OHWWHUV mDV SULPD IDFLH HYLGHQFH RI LQLWLDO JDYHULVHWRWKHFODVVDFWLRQLQZKLFKZHLVVXHGWKHGHFLVLRQ FRPSOLDQFH E\ WKH SODQ ZLWK WKH VWDQGDUGV >RI UHOHYDQW UHSRUWHGDV&RVWDQWLQRY75:,QF)GWK&LU SRUWLRQVRI(5,6$@l86&G$VIDU DVWKH 7KH &RVWDQWLQR FODVV ZDV PDGH XS RI 75: DQWLFXWEDFNUXOHLVFRQFHUQHGKRZHYHUZHDUHQRWSHUVXDGHG HPSOR\HHVZKRKDGWDNHQHDUO\UHWLUHPHQWEHWZHHQsDQXDU\ WKDWWKHOHWWHULVSULPDIDFLHHYLGHQFHRIDQ\WKLQJ DQG 2FWREHU DQG ZKR KDG HOHFWHG WR UHFHLYHOXPSVXPGLVWULEXWLRQV,WZDVFODLPHGRQEHKDOIRI 7KLVLVVREHFDXVHRIWKHUHSUHVHQWDWLRQVWKDW75:PDGHWR WKLV FODVV WKDW WKH UHWURDFWLYH DPHQGPHQWV DGRSWHG RQ WKH ,56 LQ UHTXHVWLQJ WKH OHWWHU ,Q DQ ,56 IRUP HQWLWOHG 'HFHPEHUYLRODWHGWKHDQWLFXWEDFNUXOHTXRWHGLQ m$SSOLFDWLRQIRU'HWHUPLQDWLRQIRU(PSOR\HH%HQHILW3ODQl QRWHVXSUD 75:ZDVDVNHGWKLVTXHVWLRQm'RHVDQ\DPHQGPHQWWRWKH SODQ UHGXFH RU HOLPLQDWH DQ\ VHFWLRQ G SURWHFWHG EHQHILW"l,WPD\EHUHFDOOHGWKDWGLVWKH,5& FRXQWHUSDUW RI WKH DQWLFXWEDFN UXOH FRQWDLQHG LQ (5,6$ 7KH DPHQGHG SODQ DOVR SURYLGHG DV WR GLVWULEXWLRQV ZLWK UHVSHFW WR J ,Q UHVSRQVH WR WKLV TXHVWLRQ DV WR ZKHWKHU DQ\ DQG WKDW WKH LQWHUHVW UDWH IRU GLVWULEXWLRQV QRW H[FHHGLQJ DPHQGPHQW WR WKH 75: SODQ UHGXFHG RU HOLPLQDWHG DQ\ ZRXOG EH WKH 3%*& UDWH DW WKH EHJLQQLQJ RI WKH FDOHQGDU \HDU EHQHILWSURWHFWHGE\WKHDQWLFXWEDFNUXOH75:FKHFNHGD ZKLOH IRU GLVWULEXWLRQV RYHU WKH LQWHUHVW UDWH ZRXOG EH WKH OHVVHU ER[PDUNHGm1Rl RI WKH 0RRG\jV $DD UDWH RU WKH UDWH DW WKH EHJLQQLQJ RI WKH FDOHQGDU \HDU 7KH DPHQGHG SODQ FRQWDLQHG DQ DOPRVW LGHQWLFDO SURYLVLRQ 75:jVDQVZHUDVZHKDYHGHPRQVWUDWHGZDVLQFRUUHFW UHJDUGLQJ LQWHUHVW UDWHV IRU WKH \HDUV DQG WKHUHDIWHU H[FHSW WKDW WKH 3%*& UDWH ZRXOG EH WKH RQH LQ HIIHFW GXULQJ WKH PRQWK RI GLVWULEXWLRQ 7KH ,56 KRZHYHU ZDV HQWLWOHG WR DVVXPH WKDW 75: KDG 75: 6DODULHG 3HQVLRQ 3ODQ ELLL% DQG & DV DPHQGHG DQVZHUHG WKH TXHVWLRQ FRUUHFWO\ o DQG D IDYRUDEOH 'HFHPEHU 5\EDUF]\NHWDOY75:HWDO 1R 1R 5\EDUF]\NHWDOY75:HWDO )DLOXUH WR UDLVH DQ LVVXH RQ DSSHDO ZRXOG QRUPDOO\ 75:DUJXHGLQ&RVWDQWLQRWKDWWKHDPHQGPHQWVKDGQRW FRQVWLWXWHDZDLYHURIWKDWLVVXH%ULQGOH\Y0F&XOOHQ UHGXFHGWKHEHQHILWLQWHUPVRIUHDOGROODUV7KLVFRXUWKHOG )GWK&LU+HUHKRZHYHUZHKDYHDSXUH KRZHYHUWKDWUHJDUGOHVVRIWKHGROODUDPRXQWRIWKHOXPSVXP TXHVWLRQRIODZWKDWFULHVRXWIRUUHVROXWLRQoDQGLQVXFKD GLVWULEXWLRQWKHDQWLFXWEDFNUXOHSURKLELWHGHOLPLQDWLRQRI VLWXDWLRQZHDUHQRWIRUHFORVHGIURPFRQVLGHULQJWKHLVVXH WKH HDUO\ UHWLUHPHQW VXEVLG\ IRU D UHWLUHH ZKR KDG DOUHDG\ 6HH'RUULVY$EVKHU)GWK&LU TXDOLILHGIRUWKHVXEVLG\&RVWDQWLQR)GDW DOORZLQJDSSHOODWHFRQVLGHUDWLRQRIDQXQEULHIHGLVVXHWKDW LQYROYHGDPLVLQWHUSUHWDWLRQRIDmSXUHTXHVWLRQRIODZZLWK 75: DOVR DUJXHG LQ &RVWDQWLQR WKDW WKH UDWH FDS ZDV QRPDWHULDOIDFWVEHLQJLQGLVSXWHl*LYHQWKHSDWHUQDOLVWLF DSSOLFDEOHRQO\WRmDFFUXHGEHQHILWVlDWHUPWKDWDFFRUGLQJWR SXUSRVHV XQGHUO\LQJ (5,6$ DQG JLYHQ WKH &RQJUHVVLRQDO 75: PHDQW RQO\ XQVXEVLGL]HG EHQHILWV ,G DW 7KLV ILQGLQJVDQGGHFODUDWLRQRISROLF\VHWIRUWKLQ7LWOH,RI FRXUWUHMHFWHG75:j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mXVLQJDQLQWHUHVWUDWHQR DFFUXHGEHQHILWIRUSXUSRVHVRIWKHDQWLFXWEDFNUXOH,G7KH JUHDWHU WKDQ SHUFHQW RI WKH >3%*&@ UDWH LI WKH YHVWHG UHJXODWLRQ &RVWDQWLQR GHFODUHG mH[SUHVVO\ UHTXLUHV WKDW DFFUXHGEHQHILWH[FHHGVl86&H ZKHUH D SODQ SURYLGHV WKDW D OXPS VXP GLVWULEXWLRQ RI D TXRWHGDWQVXSUD8QGHUWKHDQWLFXWEDFNUXOHWKHULJKWWR VXEVLGL]HGHDUO\UHWLUHPHQWEHQHILWLVDYDLODEOHDVDQRSWLRQ DSUHVHQWYDOXHFDOFXODWLRQPDGHXQGHUWKLVVWDWXWRU\LQWHUHVW WKHVHFWLRQLQWHUHVWUDWHPXVWEHDSSOLHGWRFDOFXODWHWKH UDWHFDSmZLWKUHVSHFWWREHQHILWVDWWULEXWDEOHWRVHUYLFHEHIRUH YDOXH RI WKH GLVWULEXWLRQl ,G $QG WKH UHJXODWLRQ VDLG WKHDPHQGPHQWlLVDULJKWWKDWPXVWEHWUHDWHGDVmDFFUXHGlDV &RVWDQWLQRmWUHDWVVXEVLGL]HGEHQHILWVDVLIWKH\ZHUHDFFUXHG ORQJ DV WKH DPHQGPHQW KDV WKH HIIHFW RI mHOLPLQDWLQJ RU EHQHILWVlIRUWKHSXUSRVHRImOLPLWLQJDQHPSOR\HUjVDELOLW\WR UHGXFLQJ DQ HDUO\ UHWLUHPHQW EHQHILW RU D UHWLUHPHQWW\SH GLVWULEXWHEHQHILWVZLWKRXWDSSURSULDWHO\FDOFXODWLQJWKHYDOXH VXEVLG\l(5,6$JTXRWHGDWQVXSUD$QG RIDQ\VXEVLGLHVl,G EHFDXVHVXFKDULJKWPXVWEHWUHDWHGDVKDYLQJDFFUXHGLQVRIDU DVLWLVDWWULEXWDEOHWRVHUYLFHEHIRUHWKHSODQDPHQGPHQWLWLV 7XUQLQJWRWKHFDVHDWEDUZHQRWHWKDWSODLQWLII5LFKDUG WR WKDW H[WHQW SURWHFWHG E\ WKH SURKLELWLRQ FRQWDLQHG LQ 5\EDUF]\N UHSUHVHQWV D FODVV RI 75: UHWLUHHV ZKR UHWLUHG Jm7KHDFFUXHGEHQHILWRIDSDUWLFLSDQWXQGHUD EHWZHHQ 2FWREHU DQG sXO\ 3ODLQWLIIV SODQPD\QRWEHGHFUHDVHGE\DQDPHQGPHQWRIWKHSODQl 0LQRUX0L]XEDDQG:LOOLDP5LWWHQKRXVHUHSUHVHQWDFODVVRI 7KDWLVZKDWWKHVWDWXWHFOHDUO\VD\VDQGWKDWLVFOHDUO\WKH UHWLUHHV ZKR UHWLUHG EHWZHHQ sDQXDU\ DQG sXO\ ORJLFRIRXUGHFLVLRQLQ&RVWDQWLQR 7KHWZRFODVVHVKDYHEHHQPHUJHGIRUSXUSRVHVRIWKH ODZVXLW$OOPHPEHUVRIWKHPHUJHGFODVVKDYHUHFHLYHGOXPS VXPGLVWULEXWLRQVRIPRUHWKDQ 2QH RI WKH FRQVLGHUDWLRQV WKDW OHG WR WKH HQDFWPHQW RI (5,6$ LV 7KHPHPEHUVRIWKLVFODVVZHUHEHQHILFLDULHVRIFHUWDLQSODQ GHVFULEHG LQ WKHVH WHUPV mGHVSLWH WKH HQRUPRXV JURZWK LQ VXFK >UHWLUHPHQW@ SODQV>@ PDQ\ HPSOR\HHV ZLWK ORQJ \HDUV RI HPSOR\PHQW DUH DPHQGPHQWVDGRSWHGE\75:RQ2FWUHWURDFWLYH ORVLQJ DQWLFLSDWHG UHWLUHPHQW EHQHILWV RZLQJ WR WKH ODFN RI YHVWLQJ WRsDQ,QVRIDUDVOXPSVXPSD\PHQWVRIPRUHWKDQ SURYLVLRQV LQ VXFK SODQV l ,G 5\EDUF]\NHWDOY75:HWDO 1R 1R 5\EDUF]\NHWDOY75:HWDO ZHUH FRQFHUQHG WKH DPHQGPHQWV FDOOHG IRU UHJXODWLRQV WKDW FDQ IDLUO\ EH VDLG WR PDNH VXFK D ERQXV DOWHUQDWLYH FDOFXODWLRQV WKH 0RRG\j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jV UDWH XQGHU DQ\ TXRWHGLQQRWHVXSUDFOHDUO\EDUUHG75:IURPDPHQGLQJ FLUFXPVWDQFHYLRODWHVWKHUHOHYDQWSURYLVLRQVRI(5,6$DQG LWVUHWLUHPHQWSODQLQVXFKDZD\DVWRUHGXFHDFFUXHGHDUO\ WKH,5& UHWLUHPHQW EHQHILWV mDWWULEXWDEOH WR VHUYLFH EHIRUH WKH DPHQGPHQW l 0RVW RU DOO RI WKH UHWLUHHV LQ WKH FODVV ,QJUDQWLQJVXPPDU\MXGJPHQWWRWKHSODLQWLIIVWKHGLVWULFW EHIRUHXVKHUHPXVWKDYHKDGZKDWZRXOGDPRXQWWRDPL[RI FRXUWUHOLHGRQWKHGRFWULQHRIFROODWHUDOHVWRSSHO&RVWDQWLQR DFFUXHGHDUO\UHWLUHPHQWEHQHILWVZLWKSDUWEHLQJDWWULEXWDEOH VDLGWKHGLVWULFWFRXUWKDGmFOHDUO\KHOGWKDWDSSOLHV WR VHUYLFH UHQGHUHG EHIRUH WKH SODQ ZDV DPHQGHG RQ ZKHQHYHUDSODQFDOFXODWHVWKHSUHVHQWYDOXHRIVXEVLGL]HG 'HFHPEHU DQG SDUW EHLQJ DWWULEXWDEOH WR VHUYLFH EHQHILWVl5\EDUF]\NY75:,QF86'LVW/(;,6 UHQGHUHGDIWHUWKDWGDWH$OWKRXJKQRWKLQJLQ(5,6$J DW 1'2KLR7KHUHIRUHWKHGLVWULFWFRXUW SUHYHQWHG75:IURPUHGXFLQJEHQHILWVDWWULEXWDEOHWRSRVW FRQFOXGHG 75: FRXOG mQR ORQJHU DVVHUW WKDW WKH ODZ 'HFHPEHU VHUYLFH DFFUXHG EHQHILWV DWWULEXWDEOH WR SUH DOORZVLWWRFDOFXODWHWKHSUHVHQWYDOXHRIDVXEVLGL]HGEHQHILW 'HFHPEHUVHUYLFHKDGWRUHPDLQLQYLRODWH$QGXQGHU ZLWKRXW XVLQJ WKH UDWH 75: UDLVHG WKHVH YHU\ J EHQHILWV DWWULEXWDEOH WR SUH'HFHPEHU VHUYLFH UHPDLQ LQYLRODWH ZKHWKHU WKH DJH FRQGLWLRQ EH VDWLVILHG mEHIRUHRUDIWHUWKHDPHQGPHQWl 7KH SODQ UHWDLQHG WKH GLVWLQFWLRQ EHWZHHQ \HDUV DQG IRU ZKLFK WKH 3%*& UDWH ZDV VHW DW WKH EHJLQQLQJ RI WKH FDOHQGDU \HDU DQG $VPHQWLRQHGLQQVXSUD0U5\EDUF]\NUDLVHGWKLVLVVXH \HDUV DQG IRU ZKLFK WKH 3%*& UDWH ZDV VHW DW WKH PRQWK RI LQSDUDJUDSKRIKLVFODVVDFWLRQFRPSODLQW3DUDJUDSK GLVWULEXWLRQ UHDGVDVIROORZV 7KH SODLQWLIIV SHUVLVWHQWO\ FKDUDFWHUL]H WKHLU FODLPV DV DOOHJLQJ m75:jV3ODQYLRODWHVWKHDQWLFXWEDFNSURYLVLRQVRI YLRODWLRQV RI WKH ,5& HJ 86& H 7HFKQLFDOO\ YLRODWLRQV (5,6$ DQG WKH &RGH DQG SURYLGHV ORZHU OXPS VXP RI WKH &RGH PHUHO\ UHVXOW LQ WKH ORVV RI SUHIHUUHG WD[ WUHDWPHQW LQFOXGLQJ WKH HPSOR\HUjV GHGXFWLRQ IRU FRQWULEXWLRQV XQGHU ,5& D DQG WKH GLVWULEXWLRQVWR3ODQSDUWLFLSDQWVWKDQWKH\DUHSURSHUO\ HPSOR\HHVj WD[ GHIHUUDO XQGHU ,5& D %HFDXVH (5,6$ HQWLWOHG WR UHFHLYH ZKHQ LW DSSOLHV WKH SUHVHQW YDOXH SURYLVLRQV DUH GHOLEHUDWHO\ GHVLJQHG WR SDUDOOHO WKRVH RI WKH ,5& FDOFXODWLRQ WR DQ LPSHUPLVVLEOH EHQHILW H[FOXGLQJ WKH KRZHYHU ZH VKDOO WUHDW WKH SODLQWLIIVj FODLPV DV DULVLQJ XQGHU (5,6$ DQG HDUO\UHWLUHPHQWVXEVLG\QRWZLWKVWDQGLQJWKHIDFWWKDWWKH DV EURXJKW SXUVXDQW WR (5,6$jV ULJKWRIDFWLRQ SURYLVLRQ 86& FDOFXODWLRQXVHVWKHSHUPLVVLEOHLQWHUHVWUDWHl 6HH &RXQWV Y .RVVDFN :DWHU 2LO 6HUY ,QF )G Q WK &LU :H DOVR QRWH WKDW (5,6$ SURYLGHV WKDW UHJXODWLRQV SURPXOJDWHG E\ WKH 7UHDVXU\ 'HSDUWPHQW SXUVXDQW WR ,5& &XULRXVO\ KRZHYHU WKH SODLQWLIIV KDYH IDLOHG WR SUHVV WKLV D DQG DUH GHHPHG DSSOLFDEOH WR WKH SDUDOOHO SURYLVLRQV SRLQWRQDSSHDO RI (5,6$ 86& F 5\EDUF]\NHWDOY75:HWDO 1R 1R 5\EDUF]\NHWDOY75:HWDO XQVXEVLGL]HG DPRXQW RU WKH 0RRG\jV UDWH DSSOLHG WR D DUJXPHQWV EHIRUH WKH 6L[WK &LUFXLW LQ &RVWDQWLQR DQG WKH VXEVLGL]HGDPRXQW\LHOGVDODUJHUDPRXQWl 6L[WK&LUFXLWUXOHGDJDLQVWLWl,GDW )LQDOO\75:VWUHVVHVWKDW(5,6$GRHVQRWPDQGDWHDQ\ 7KHGLVWULFWFRXUWDOVRDZDUGHGSUHMXGJPHQWLQWHUHVWWRWKH SDUWLFXODUEHQHILWV6SHFLILFDOO\75:SRLQWVRXWQRWKLQJLQ SODLQWLIIV DW D UDWH GHWHUPLQHG LQ DFFRUGDQFH ZLWK WKH (5,6$ UHTXLUHV WKDW SHQVLRQ SODQV mRIIHU VXEVLGL]HG OXPS IROORZLQJIRUPXOD VXPHDUO\UHWLUHPHQWSD\PHQWVl m>7@KHJUHDWHURIDLQWHUHVWDWDUDWHHTXDOWRWKHFRXSRQ 75:j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l PRPHQW ZH VHH DEVROXWHO\ QRWKLQJ ZURQJ LQ WKLV 7KH 5\EDUF]\N86'LVW/(;,6DW DSSOLFDEOH 7UHDVXU\ 'HSDUWPHQW UHJXODWLRQV VD\ XQDPELJXRXVO\WKDW ,Q WKH SUHVHQW DSSHDO 75: FKDOOHQJHV ERWK WKH GLVWULFW FRXUWjVXVHRIFROODWHUDOHVWRSSHODQGWKHFRXUWjVSUHMXGJPHQW mLI D SODQ WKDW SURYLGHV D VXEVLGL]HG HDUO\ UHWLUHPHQW LQWHUHVWUDWHIRUPXOD DQQXLW\EHQHILWVSHFLILHVWKDWWKHVLQJOHVXPGLVWULEXWLRQ EHQHILW DYDLODEOH DW HDUO\ UHWLUHPHQW DJH LVWKH SUHVHQW ,, YDOXHRIWKHQRUPDOUHWLUHPHQWDQQXLW\EHQHILWWKHQWKH QRUPDOUHWLUHPHQWDQQXLW\EHQHILWLVXVHGWRDSSO\WKH $ YDOXDWLRQUHTXLUHPHQWVRIWKLVVHFWLRQDQGWKHUHVXOWLQJ DPRXQWRIWKHVLQJOHVXPGLVWULEXWLRQDYDLODEOHDWHDUO\ 7KH GRFWULQH RI FROODWHUDO HVWRSSHO DV WKH GLVWULFW FRXUW UHWLUHPHQWDJHl&)5DDHPSKDVLV H[SODLQHGSUHFOXGHVDSDUW\IURPUHOLWLJDWLQJLVVXHVUHVROYHG VXSSOLHG DJDLQVWWKDWSDUW\LQDSULRUSURFHHGLQJ6HH3DUNODQH+RVLHU\ &R,QFY6KRUH86,IWKHEHQHILW :LWKWKHOLEHUDOL]DWLRQRIWKHEHQHILWFDOFXODWLRQIRUPXODLQ RI WKH FROODWHUDO HVWRSSHO GRFWULQH LV WR EH FODLPHG RI FRXUVH WKH SODQ LQWURGXFHG D SRVVLELOLW\ WKDW WKH VXFFHVVIXOO\ VXEVLGL]HGHDUO\UHWLUHPHQWDQQXLW\EHQHILWZRXOGSOD\DUROH LQWKHFDOFXODWLRQ%XWVXFKXVHRIWKHVXEVLGL]HGEHQHILWZDV mWKHSUHFLVHLVVXHUDLVHGLQWKHSUHVHQWFDVHPXVWKDYH SUHVFULEHGRQO\ZKHUHDSSOLFDWLRQRIWKH0RRG\jVUDWHWRWKDW EHHQUDLVHGDQGDFWXDOO\OLWLJDWHGLQWKHSULRUSURFHHGLQJ EHQHILW\LHOGHGDODUJHUOXPSVXPWKDQWKHUHWLUHHZRXOGKDYH UHFHLYHG XQGHU WKH HGLWLRQ RI WKH SODQ LQ ZKLFK WKH GHWHUPLQDWLRQRIWKHLVVXHPXVWKDYHEHHQQHFHVVDU\ UDWHKDGWREHDSSOLHGWRWKHXQVXEVLGL]HGUHWLUHPHQW WRWKHRXWFRPHRIWKHSULRUSURFHHGLQJ DQQXLW\EHQHILW7KHDPHQGPHQWVPHUHO\SURYLGHGIRU WKH SULRU SURFHHGLQJ PXVW KDYH UHVXOWHG LQ D ILQDO WKHSRVVLELOLW\RIVRPHLFLQJRQWKHHDUO\UHWLUHPHQWFDNHo MXGJPHQWRQWKHPHULWVDQG DQG ZH DUH DZDUH RI QRWKLQJ LQ (5,6$ WKH &RGH RU WKH 5\EDUF]\NHWDOY75:HWDO 1R 1R 5\EDUF]\NHWDOY75:HWDO WKHSDUW\DJDLQVWZKRPHVWRSSHOLVVRXJKWPXVWKDYH % KDGIXOODQGIDLURSSRUWXQLW\WROLWLJDWHWKHLVVXHLQWKH SULRU SURFHHGLQJl 8QLWHG 6WDWHV Y 6DQGR] 7KHLQDSSOLFDELOLW\RIFROODWHUDOHVWRSSHOGRHVQRWPHDQWKDW 3KDUPDFHXWLFDOV&RUS)GWK&LU 75:DXWRPDWLFDOO\ZLQV:HPXVWVWLOOH[DPLQHWKHSDUWLHVj DUJXPHQWV LQ OLJKW RI WKH &RVWDQWLQR GHFLVLRQ ZKLFK KDV SUHFHGHQWLDOHIIHFWXQGHUWKHGRFWULQHRIVWDUHGHFLVLVDQGWKH 7KHILUVWRIWKHVHUHTXLUHPHQWVDVZHVHHLWKDVQRWEHHQ UHOHYDQWIHGHUDOODZDQGUHJXODWLRQV PHWLQWKHFDVHDWEDU75:DVVHUWHGLQ&RVWDQWLQRWKDWWKH UHJXODWLRQV GLG QRW UHTXLUH XVH RI WKH UDWH IRU 7KHSODLQWLIIVPDNHPXFKRIWKHVWDWHPHQWLQ&RVWDQWLQR VXEVLGL]HG EHQHILWV XQGHU WKH SODQ DPHQGPHQWV WKDW&)5DDmH[SUHVVO\UHTXLUHVWKDW LQDVPXFKDVDGRSWLRQRIWKHDPHQGPHQWVPHDQWWKDWWKHSODQ ZKHUH D SODQ SURYLGHV WKDW D OXPS VXP GLVWULEXWLRQ RI D GLG QRW RIIHU D VXEVLGL]HG OXPS VXP DV DQ RSWLRQ 7KH VXEVLGL]HGHDUO\UHWLUHPHQWEHQHILWLVDYDLODEOHDVDQRSWLRQ &RVWDQWLQRFRXUWUHVSRQGHGWKDWZKLOH75:jVDVVHUWLRQmPD\ WKHVHFWLRQLQWHUHVWUDWHPXVWEHDSSOLHGWRFDOFXODWHWKH EH WUXH LW LV QRW UHOHYDQW LQ WKH SUHVHQW FDVH LQ ZKLFK YDOXHRIWKHGLVWULEXWLRQl&RVWDQWLQR)GDW75:jV 3ODLQWLIIVTXDOLILHGIRUWKHLUVXEVLGLHVSULRUWRWKHSODQ UHVSRQVHLVWKDWWKHSODQGRHVQRWRIIHUDQRSWLRQRIDmOXPS DPHQGPHQWl&RVWDQWLQR)GDW,QWKHFDVHDWEDU VXP GLVWULEXWLRQ RI D VXEVLGL]HG HDUO\ UHWLUHPHQW EHQHILWl KRZHYHUWKHSODLQWLIIFODVVLVSUHVXPDEO\PDGHXSODUJHO\LI %HIRUHWKHDPHQGPHQWVUDWKHUWKHSODQRIIHUHGDOXPS QRWHQWLUHO\RISHRSOHZKRGLGQRWWDNHHDUO\UHWLUHPHQWXQWLO VXPGLVWULEXWLRQRIWKHXQVXEVLGL]HGEHQHILWFDOFXODWHGZLWK DIWHUWKHDPHQGPHQWV7KLVFODVVWKXVLQFOXGHVUHWLUHHV WKH3%*&UDWHoDQGWKHDPHQGPHQWVPHUHO\DGGHGDQ ZKRDVVHUWWKDWWKH\TXDOLILHGIRUVXEVLGLHVDWOHDVWSDUWLDOO\RQ DOWHUQDWH FDOFXODWLRQ PHWKRG LQ ZKLFK WKH 0RRG\jV UDWH LV WKHVWUHQJWKRIVHUYLFHSHUIRUPHGDIWHUWKHDPHQGPHQWV DSSOLHG WR WKH VXEVLGL]HG OHYHO RI EHQHILW 7KLV DOWHUQDWH 7R WKDW H[WHQW REYLRXVO\ WKLV FDVH GRHV QRW LQYROYH WKH FDOFXODWLRQLQ75:jVVXEPLVVLRQGRHVQRWFUHDWHDVWDQG mSUHFLVHLVVXHl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jVGHILQLWLRQRImRSWLRQDO HVWRSSHOGRFWULQH IRUP RI EHQHILWl LQ 5RVV Y 3HQVLRQ 3ODQ IRU +RXUO\ (PSOR\HHVRI6.),QGXV)GWK&LUDV PHDQLQJ D EHQHILW WKDW mLQYROYHV WKH SRZHU RU ULJKW RI DQ HPSOR\HHWRFKRRVHWKHZD\LQZKLFKSD\PHQWVGXHWRKLP XQGHU D SODQ ZLOO EH PDGH RU DSSOLHGl ,G DW 75: DUJXHVWKDWWKHSODLQWLIIVGRQRWKDYHWKHmSRZHURUULJKWlWR FKRRVH D VXEVLGL]HG OXPS VXP IRU SD\PHQW RQFH D JLYHQ :H QRWH WKDW 75: DWWHPSWV WR GUDZ D GLVWLQFWLRQ EHWZHHQ UHWLUHHKDVFKRVHQDOXPSVXPGLVWULEXWLRQUDWKHUWKHSODQ &RVWDQWLQR DQG WKLV FDVH RQ WKH JURXQG WKDW &RVWDQWLQR LQYROYHG mDXWRPDWLFDOO\GHWHUPLQHVWKHSD\PHQWDPRXQWEDVHGVROHO\ (5,6$jV DQWLFXWEDFN UXOH ZKLOH KHUH WKH SODLQWLIIV mGR QRW HYHQ LQYRNH WKRVH SURYLVLRQVl 0U 5\EDUF]\N GLG LQYRNH (5,6$jV DQWLFXWEDFN UXOH XSRQZKHWKHUWKH6HFWLRQUDWHDSSOLHGWRWKHVWDQGDUG LQ RI KLV FODVV DFWLRQ FRPSODLQW KRZHYHU VR WKLV GLVWLQFWLRQ ZLOO QRW ZDVK
Document Info
Docket Number: 97-4167
Filed Date: 12/21/2000
Precedential Status: Precedential
Modified Date: 9/22/2015