7KH+HDOWK6HFWRULQ)UDQFH
'DYLG3LRYHVDQ&KULVWRSKH%DUHW
8QLYHUVLWp-HDQ0RXOLQ±/\RQ,,,/\RQ)UDQFH
7KLVSUHVHQWDWLRQRIWKHUHVXOWVRIRXUVWXGLHVLVGLYLGHGLQWRWZRSDUWV,QWKHILUVWSDUWZH RXWOLQHWKHPDLQIHDWXUHVRIWKH)UHQFKKHDOWKFDUHFRQWH[WDQGSUHVHQWWKHSULQFLSDOILJXUHVRQ HPSOR\PHQWDQGZRUNLQJWLPHDWWKHQDWLRQDOOHYHODQGDWWKDWRIWKHWZRGHSDUWPHQWVWKDW ZHUHWKHREMHFWRIRXUFDVHVWXGLHV,QWKHVHFRQGSDUWZHDQDO\VHWKHIDFWRUVVKDSLQJWKHQHZ HPSOR\PHQWDQGZRUNLQJWLPHIRUPVWKDWDUHHPHUJLQJZLWKLQWKH)UHQFKKHDOWKFDUHV\VWHP (PSOR\PHQWDQGZRUNLQJWLPHLQWKH)UHQFKKHDOWKFDUHV\VWHP
*HQHUDORXWOLQHRIWKH)UHQFKKHDOWKFDUHV\VWHP
:HEHJLQE\GHVFULELQJWKHJHQHUDORUJDQLVDWLRQRIWKHKHDOWKFDUHV\VWHPEHIRUHSURFHHGLQJ WRDQH[DPLQDWLRQRIWKHV\VWHP¶VILQDQFLDODQGHFRQRPLFDVSHFWV
2UJDQLVDWLRQRIWKH)UHQFKKHDOWKFDUHV\VWHP
7KHVWUXFWXUHRIWKH)UHQFKKRVSLWDOV\VWHPLVFRPSOH[7KHUHDUHWKUHHW\SHVRIKRVSLWDOV SXEOLF KRVSLWDOV RI EHGV ZKLFK DUH VXEMHFW WR SXEOLF ODZ DQG RSHUDWH XQGHU 6WDWH
FRQWURO7KHUHDUHUHJLRQDODQGJHQHUDOKRVSLWDOFHQWUHVZKLFKDUHDGPLQLVWHUHGDWWKHOHYHO RI WKH FRPPXQH WKH VPDOOHVW WHUULWRULDO GLYLVLRQ LQ )UDQFH VSHFLDOLVW KRVSLWDO FHQWUHV DGPLQLVWHUHGDWGpSDUWHPHQWOHYHODQGQDWLRQDOFHQWUHV
SULYDWHSURILWPDNLQJKRVSLWDOVRIEHGVPDQDJHGE\FRPPHUFLDOFRPSDQLHVSXEOLF RUSULYDWHOLPLWHGFRPSDQLHVDQGE\QRQVWRFNFRUSRUDWLRQVVXEMHFWWRSULYDWHODZ
SULYDWH QRQSURILWPDNLQJ KRVSLWDOV RI EHGV PDQ\ RI ZKLFK DUH UXQ E\ UHOLJLRXV DVVRFLDWLRQV YROXQWDU\ DVVRFLDWLRQV RU HYHQ IRXQGDWLRQV 0RVW RI WKHP IRUP SDUW RI WKH SXEOLFKRVSLWDOVHUYLFH
6LQFH-DQXDU\WKHSXEOLFDQGQRQSURILWPDNLQJSULYDWHKRVSLWDOVKDYHRSHUDWHGXQGHU WKHVRFDOOHGJOREDOEXGJHWV\VWHPLQZKLFKDJOREDOVXPLVSDLGWRWKHKRVSLWDOV7KLVVXPLV UHDVVHVVHG HDFK \HDU LQ DFFRUGDQFH ZLWK D JXLGLQJ UDWH 3ULYDWH KRVSLWDOV RSHUDWH LQ DFFRUGDQFHZLWKWKHGDLO\UDWHSULQFLSOHZKLFKLVWKHTXRWLHQWRIWKHFKDUJHVODLGGRZQLQWKH SURMHFWHGEXGJHWDQGWKHQXPEHURIGD\V¶KRVSLWDOLVDWLRQVFKHGXOHG
(PSOR\PHQWDQGZRUNLQJWLPHLQWKHKHDOWKFDUHV\VWHP (PSOR\PHQWDQGZRUNLQJWLPHGDWD
0RUHWKDQPLOOLRQSHRSOHZRUNLQWKHKHDOWKFDUHDQGVRFLDOZHOIDUHV\VWHPVPLOOLRQ LQKHDOWKFDUHDQGDERXWDPLOOLRQLQWKHSXEOLFDQGSULYDWHKRVSLWDOV
7KHJHQHUDOVLWXDWLRQFDQEHVXPPDULVHGE\PHDQVRIDIHZILJXUHV
WKHQXPEHURIQRQPHGLFDOSHUVRQQHOHPSOR\HGKDVEHHQULVLQJVLQFHSDUWLFXODUO\LQWKH SULYDWHVHFWRUDQGWKHUHDUHQRZSHRSOHLQSRVWLQWKHSXEOLFDQGSULYDWHVHFWRUV QXUVLQJ VWDII FRQVWLWXWH WKH ODUJHVW JURXS RI QRQPHGLFDO SHUVRQQHO DFFRXQWLQJ IRU PRUH
WKDQ RI WKH WRWDO SDUWLFXODUO\ UHJLVWHUHG QXUVHV DURXQG D WKLUG RU DOPRVW LQGLYLGXDOV
WKHLQFUHDVHLQWKHQXPEHURIQRQPHGLFDOSHUVRQQHOHPSOR\HGLVGXHODUJHO\WRWKHLQFUHDVH LQQXUVLQJVWDIIERWKUHJLVWHUHGQXUVHVDQGQXUVLQJDX[LOLDULHVVLQFHDQG UHVSHFWLYHO\LQWKHSXEOLFVHFWRUDQGDQGLQWKHSULYDWHVHFWRU
7KHSXEOLFKRVSLWDOVDUHFXUUHQWO\IDFLQJDQHZSUREOHPQDPHO\DVKRUWDJHRIQXUVLQJVWDII SDUWLFXODUO\UHJLVWHUHGQXUVHVDQGPLGZLYHV>&5('(6@$ODLQ&RXORPE&KDLUPDQRI WKH$VVRFLDWLRQRI3ULYDWH+RVSLWDOVHVWLPDWHGLQ-XQHWKDWWKHSULYDWHKRVSLWDOVZHUH VKRUW RI DERXW UHJLVWHUHG QXUVHV ³DQG ZH DUH DOVR EHJLQQLQJ WR VHH VKRUWDJHV RI VSHFLDOLVW QXUVHV DQG QXUVLQJ DX[LOLDULHV ´ 7KLV VKRUWDJH LV VDLG WR EH KDYLQJ D QHJDWLYH LPSDFWRQ
WKH SURYLVLRQ RI PHGLFDO VHUYLFHV ZKLFK KDV GHFOLQHG EHFDXVH RI GHSDUWPHQW FORVXUHV RU EHFDXVHVRPHSURFHGXUHVKDYHEHFRPHWRRULVN\
ZRUNLQJFRQGLWLRQVZKLFKDUHGHWHULRUDWLQJDQG WKHVFRSHIRULPSOHPHQWLQJWKHKRXUZHHN
7KXV WKH SXEOLF KRVSLWDOV ZLOO EH IDFLQJ D VKRUWDJH RI UHJLVWHUHG QXUVHV ZKHQ WKH KRXU ZHHNLVLPSOHPHQWHGLQ-DQXDU\ ,WZRXOGVHHPWKDWQDWLRQDOO\WKHUHLVDVKRUWDJHRI DERXWUHJLVWHUHGQXUVHVRXWRIDWRWDOSRSXODWLRQRIWKDWLVDERXW
7KHQXPEHUVRIQXUVLQJVWDIIHPSOR\HGKDYHEHHQULVLQJFRQWLQXRXVO\VLQFHWKHHDUO\VDW DQDYHUDJHDQQXDOUDWH RIDOPRVWSHU DQQXP>9LODLQ@7KHQXPEHURI QXUVHVKDV ULVHQIURPLQWRDERXWWRGD\7KLVJURZWKKDVSDUWLFXODUO\EHQHILWHG VHOIHPSOR\HGQXUVHVLQSULYDWHSUDFWLFHDOWKRXJKWKHSXEOLFDQGSULYDWHKRVSLWDOVDUHVWLOOWKH ODUJHVWHPSOR\HUVDUHHPSOR\HGE\WKHSXEOLFKRVSLWDOV
2QH RI WKH PDLQ FKDUDFWHULVWLFV RI WKH QXUVLQJ SURIHVVLRQ LV WKH FRQVLGHUDEOH ULVH LQ WKH DYHUDJHDJHZKLFKKDVLQFUHDVHGIURPLQWRDOPRVWWRGD\
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
4XRWHGLQ/H4XRWLGLHQGX0pGHFLQ-XQHS
3DUWWLPHUDWHVDUHULVLQJLQDOODUHDVRIWKHKHDOWKVHUYLFH%HWZHHQDQGSDUWWLPH UDWHVLQWKHSXEOLFVHFWRUURVHIURPWRDPRQJPLGZLYHVIURPWRDPRQJ VWDWHUHJLVWHUHGQXUVHVDQGIURPWRDPRQJQXUVLQJDX[LOLDULHV
,QDSSUR[LPDWHO\RIVDODULHGUHJLVWHUHGQXUVHVZHUHZRUNLQJSDUWWLPH3DUWWLPH ZRUNLVSDUWLFXODUO\ZLGHVSUHDGDPRQJPLGZLYHVRIZKRP DUHSDUWWLPHUV7KHSDUW WLPHUDWHIRUQXUVLQJDX[LOLDULHVLVVOLJKWO\KLJKHUWKDQ
7KH 5RFKp 5HSRUW RQ ZRUNLQJ WLPH LQ WKH WKUHH SXEOLF VHUYLFHV KLJKOLJKWHG WKH VLJQLILFDQW OHYHORIDEVHQWHHLVPDPRQJKRVSLWDOVWDIIDVDZKROHDYHUDJHRIEHWZHHQDQGGD\VRII SHUHPSOR\HHSHU \HDUZKLFKFDQQRWKHOSEXWKDYHDQDGYHUVHLPSDFWRQWKHRUJDQLVDWLRQ DQGPDQDJHPHQWRIZRUN
(PSOR\PHQWDQGZRUNLQJWLPHLQ)UHQFKKRVSLWDOVWKHOHJDOIUDPHZRUN
:RUNLQJWLPHLQ)UHQFKKRVSLWDOVLVUHJXODWHGE\WKHVWDWXWRU\RUGHURI0DUFKZKLFK DSSOLHV WR SHUVRQQHO RWKHU WKDQ SK\VLFLDQV VXUJHRQV GHQWLVWV KRXVH GRFWRUV QRQUHVLGHQW PHGLFDOVWDIIDQGSKDUPDFLVWV,QDGGLWLRQWKHUHDUHVHYHUDOFROOHFWLYHDJUHHPHQWVFRYHULQJ WKHSULYDWHSURILWPDNLQJDQGQRQSURILWPDNLQJVHFWRUV
7KHOHQJWKRIWKHVWDWXWRU\ZRUNLQJZHHNKDVEHHQKRXUVVLQFH$Q\KRXUVZRUNHG RYHU DQG DERYH WKH KRXU OLPLW DUH DXWRPDWLFDOO\ FRXQWHG DV RYHUWLPH 1R PRUH WKDQ KRXUV¶ RYHUWLPH PD\ EH ZRUNHG SHU PRQWK $UWLFOH RI WKH RUGHU RI 0DUFK OD\V GRZQDPD[LPXPGDLO\ZRUNLQJWLPHRIKRXUVIRUGD\WLPHVKLIWWHDPVDQGKRXUVIRU QLJKWVKLIWWHDPV
$FFRUGLQJWRD&RXQFLO'LUHFWLYHQLJKWZRUNPXVWQRWH[FHHGKRXUVRQDYHUDJHSHU KRXUSHULRG1LJKWWLPHLVGHILQHGDVWKHSHULRGEHWZHHQPLGQLJKWDQGDP
:RUNLQJWLPHFDQEHRUJDQLVHGLQYDULRXVZD\V DOWHUQDWLQJRURYHUODSSLQJVKLIWV\VWHPV
YDULDEOHUHVWGD\V\VWHPVZKLFKPDNHLWSRVVLEOHWRNHHSKRVSLWDOVVWDIIHGWKURXJKRXWWKHZHHN E\JLYLQJLQGLYLGXDOPHPEHUVRIVWDIIDGLIIHUHQWGD\RIHDFKZHHN7KLVLVWKHVWDQGDUGSUDFWLFH URWDWLQJVKLIWV\VWHPV
,QWKHFDVHRIGLVFRQWLQXRXVVKLIWZRUNWKHPD[LPXPGDLO\ZRUNLQJWLPHLVòKRXUVZKLFK FDQQRWEHGLYLGHGLQWRPRUHWKDQWZRVHVVLRQVRIDPLQLPXPRIKRXUV7KHUHPXVWEHD KRXUJDSEHWZHHQWKHHQGRIRQHZRUNLQJGD\DQGWKHVWDUWRIWKHQH[WRQHUHVWSHULRG &DVHVWXGLHV
/H&HQWUH+RVSLWDOLHUGH9LOOHIUDQFKH
7KH 5K{QH$OSHV UHJLRQ RI )UDQFH KDV PLOOLRQ LQKDELWDQWV DQG WKUHH WHDFKLQJ KRVSLWDO FRPSOH[HV/\RQ6W(WLHQQHDQG*UHQREOH7KH9LOOHIUDQFKHWHDFKLQJKRVSLWDOLVRQHRIWKH WHQODUJHVWKRVSLWDOVLQWKHUHJLRQ
• EHGVLQDOORIZKLFKDUHJHQHUDOPHGLFDOVXUJLFDODQGREVWHWULF
• ELUWKVLQ
• PHGLFDOVWDIIIXOOWLPHHTXLYDOHQWV)7(VDQGPHGLFDOVWDII)7(V
• D YHU\ H[WHQVLYH WHFKQLFDO FDSDFLW\ JHQHUDO DQG REVWHWULF LQWHQVLYH FDUH PRELOH HPHUJHQF\ DQG UHVXVFLWDWLRQ WHDPV RSHUDWLQJ DQG REVWHWULF WKHDWUHV HQGRVFRSLHV UHKDELOLWDWLRQ FHQWUDO VWHULOLVDWLRQ GHSDUWPHQW DFFLGHQW DQG HPHUJHQF\ ODERUDWRULHV DQDHVWKHWLFVPHGLFDOLQYHVWLJDWLRQVSKDUPDF\PHGLFDOLPDJLQJ
• DQXUVHWUDLQLQJVFKRRODWWDFKHGWRWKHKRVSLWDODGGLWLRQDOWUDLQLQJIRUQXUVLQJDX[LOLDULHVHWF 0HGLFDO VWDII PDNH XS RI WKH ZRUNIRUFH DQG QXUVHV )RUW\WKUHH SHU FHQW RI WKH ZRUNIRUFHDUHQRWGLUHFWO\HPSOR\HGLQSDWLHQWFDUHDGPLQLVWUDWLYHDQGWHFKQLFDOVWDII
$VIDUDVWKHFRPSRVLWLRQRIWKHQRQPHGLFDOVWDIILVFRQFHUQHGUHJLVWHUHGQXUVHVDQGQXUVLQJ DX[LOLDULHV DUH WKH ODUJHVW FDWHJRULHV DFFRXQWLQJ IRU DQG RI WKH ZRUNIRUFH UHVSHFWLYHO\
([DPLQDWLRQRIWKHJHQGHUVWUXFWXUHRIWKHQRQPHGLFDOVWDIIUHYHDOVILUVWO\ DKLJKUDWHRI IHPLQLVDWLRQDQGVHFRQGO\WKDWWKHSURFHVVRIIHPLQLVDWLRQLVFRQWLQXLQJVLQFHWKHVKDUHRI IHPDOHHPSOR\HHVLQWKHWRWDOZRUNIRUFHURVHIURPLQWRLQ
%HWZHHQDQGWKHQXPEHURIGD\V¶DEVHQFHSHUHPSOR\HHIHOOE\IURPWR GD\VSHU\HDU
7KHQXPEHURISDUWWLPHUVLQFUHDVHGIURPLQWRLQ7KLVLQFUHDVHLQ WKHQXPEHURISDUWWLPHUVZDVGXHODUJHO\WRWKHQXPEHURISDUWWLPHQXUVHVHPSOR\HGZKLFK URVHIURPWR2IWKHSDUWWLPHQXUVLQJVWDIIPRUHWKDQKDOIDUHUHJLVWHUHGQXUVHV DTXDUWHUQXUVLQJDX[LOLDULHVDQGDVPDOOQXPEHUSDHGLDWULFQXUVLQJDX[LOLDULHV 3HUVRQQHOFRVWVDFFRXQWIRUWZRWKLUGVRIWKHEXGJHWZKLFKLVDEVROXWHO\UHSUHVHQWDWLYHRIWKH EXGJHWDU\VWUXFWXUHRI)UHQFKSXEOLFKRVSLWDOV
7KHJ\QDHFRORJ\DQGREVWHWULFVGHSDUWPHQW
$IWHUDJHQHUDORYHUYLHZRIWKHJ\QDHFRORJ\DQGREVWHWULFVGHSDUWPHQWDW9LOOHIUDQFKHZH ZLOOSUHVHQWWKHGDWDRQHPSOR\PHQWDQGZRUNLQJWLPHLQWKHGHSDUWPHQW
&HUWDLQSRLQWVRYHUDQGDERYHWKHPHUHO\GHVFULSWLYHVKRXOGEHQRWHG,WVKRXOGEHSRLQWHG RXWIRUH[DPSOHWKDWPLGZLYHVDUHHPSOR\HGLQPXFKJUHDWHUQXPEHUVWKDQUHJLVWHUHGQXUVHV DQGUHVSHFWLYHO\DQGWKDWWKHQXPEHURISDHGLDWULFQXUVLQJDX[LOLDULHVIDURXWZHLJKVWKH QXPEHURIRUGLQDU\QXUVLQJDX[LOLDULHVDQGUHVSHFWLYHO\
$VIDUDVWKHJHQGHURIWKHQXUVLQJVWDIILVFRQFHUQHGWKHGHSDUWPHQWLVH[FOXVLYHO\IHPDOH WKLVDSSOLHVQRWRQO\WRWKHPLGZLYHVEXWDOVRWRWKHUHJLVWHUHGQXUVHVDQGQXUVLQJDX[LOLDULHV 7KHDYHUDJHDJHIRUWKHQRQPHGLFDOVWDIIDVDZKROHLV
7KH9LOOHIUDQFKHKRVSLWDOLVQRZIDFLQJDQHZSUREOHPQDPHO\DVKRUWDJHRIPLGZLYHVLQWKH ODERXUPDUNHW:HZHUHDEOHWRPHDVXUHWKHVKRUWDJHRQDORFDOEDVLVWKDWLVLQWHUPVRILWV HIIHFWVRQWKH9LOOHIUDQFKH+RSLWDO
,Q 0D\ WKH J\QDHFRORJ\ DQG REVWHWULFV GHSDUWPHQW GLG QRW UHFHLYH D VLQJOH MRE DSSOLFDWLRQIURPDPLGZLIH$FFRUGLQJWRWKHQXUVLQJPDQDJHUWKHKRVSLWDOXVHGWRUHFHLYH PDQ\VXFKDSSOLFDWLRQV
7KLVILUVWLQGLFDWRULVUHLQIRUFHGE\WKHSUREOHPVEHLQJH[SHULHQFHGLQILQGLQJPLGZLYHVWR UHSODFHWKRVHRQKROLGD\RUOHDYH
,Q DQ DWWHPSW WR VROYH WKLV SUREOHP WKH 9LOOHIUDQFKH KRVSLWDO LV JRLQJ WR FKDQJH LWV UHFUXLWPHQWSUDFWLFHVILUVWO\E\XVLQJUHJXODUQXUVLQJVWDIIDQGVHFRQGO\E\WU\LQJWRDOWHUWKH QDWXUHRILWVHPSOR\PHQWFRQWUDFWV7KHGHSDUWPHQWKDVUHFHQWO\KLUHGWZRUHJLVWHUHGQXUVHV LQ RUGHU WR GHDO ZLWK WKH ODFN RI PLGZLYHV 7KHVH QHZO\ UHFUXLWHG QXUVHV KDYH EHHQ DXWRPDWLFDOO\ DOORFDWHG WR WKH J\QDHFRORJ\ XQLW 7KLV KDV PDGH LW SRVVLEOH WR WUDQVIHU WKH PLGZLYHVZRUNLQJLQWKHJ\QDHFRORJ\XQLWVWRWKHREVWHWULFVXQLW7KHGHSDUWPHQW¶VPLGZLIH PDQDJHUHVWLPDWHVWKDW³DERXWPLGZLYHVKDYHEHHQHPSOR\HGLQWKHGHSDUWPHQWRQVKRUW WHUPFRQWUDFWVRYHUWKHSDVW\HDUV´
7KHPLGZLYHVZRUNLQJLQWKH9LOOHIUDQFKHKRVSLWDOFDQEHGLYLGHGLQWRWKUHHJURXSV)LUVWO\
WKHUHLVDVWDEOHKDUGFRUHPDGHXSRIHLWKHUWHQXUHGHPSOR\HHVRIWKHSXEOLFKRVSLWDOVHUYLFH RUPLGZLYHVRQSHUPDQHQWFRQWUDFWVZKRVHWHUPVDQGFRQGLWLRQVRIHPSOR\PHQWDUHJRYHUQHG E\WKHUHOHYDQWVHWRISURYLVLRQV%HFDXVHRIFLYLOVHUYLFHFDUHHUPDQDJHPHQWSUDFWLFHVDQG WKHFRQVWUDLQWVWKH\SODFHRQH[WHUQDORULQWHUQDOPRELOLW\WKLVILUVWJURXSLVPDGHXSRIROGHU HPSOR\HHV
7KH VHFRQG JURXS LV PDGH XS RI VWDII UHFUXLWHG RQ IL[HGWHUP FRQWUDFWV WKDW DUH UHJXODUO\
UHQHZHGZKHQWKH\H[SLUH7KLVXQOLPLWHGUHQHZDORIFRQWUDFWVPHDQVWKDWWKHVWDIIFRQFHUQHG WHQGWREHUHJDUGHGDVSHUPDQHQWPHPEHUVRIWKHKRVSLWDO¶VZRUNIRUFH
7KHWKLUGJURXSILQDOO\LQFOXGHVVWDIIRQSUHFDULRXVFRQWUDFWV7KH\DUHUHFUXLWHGRQIL[HG WHUPFRQWUDFWVWKDWDUHQRWUHQHZHGHLWKHUEHFDXVHWKHLQGLYLGXDOVFRQFHUQHGSURYHXQVXLWDEOH RUEHFDXVHWKHWHPSRUDU\QHHGVKDYHEHHQPHW7KLVLVDGLYHUVHSRSXODWLRQQRWQHFHVVDULO\
YHU\FRPPLWWHGDQGXVXDOO\\RXQJ
,Q REVWHWULFV IRU H[DPSOH HDFK PLGZLIH¶V VFKHGXOH LV FRQVWUXFWHG LQ DFFRUGDQFH ZLWK WKH IROORZLQJSULQFLSOH(DFKZRUNF\FOHLVPDGHXSRIIRXUSHULRGVWKDWDOZD\VIROORZHDFKRWKHU LQWKHVDPHRUGHU
WZRGD\V¶ZRUN KRXUVRII WZRQLJKWV¶ZRUN GD\VRII
$OWKRXJK ZRUNLQJ WLPH IRU QXUVLQJ SHUVRQQHO UHJLVWHUHG QXUVHV QXUVLQJ DX[LOLDULHV SDHGLDWULFQXUVLQJDX[LOLDULHVHWFHTXDWHVWRWKHVWDQGDUGZRUNLQJGD\WKHVDPHGRHVQRW DSSO\WRPLGZLYHVZKRZRUNKRXUVKLIWV7KLVV\VWHPLVFXUUHQWO\WKHVXEMHFWRIGHEDWH ZLWKLQ WKH KHDOWK FDUH V\VWHP 2QH RI WKH PDLQ DUJXPHQWV EHLQJ DGYDQFHG HPSKDVLVHV WKH VFRSHIRUIOH[LELOLW\RSHQHGXSE\DZRUNLQJWLPHRIWKDWOHQJWK
7KHRUWKRSDHGLFGHSDUWPHQW
7KHRUWKRSDHGLFVXUJHU\GHSDUWPHQWKDGEHGVLQ7KHDYHUDJHOHQJWKRISDWLHQWVWD\
LQWKLVGHSDUWPHQWLVGD\VZKLFKLVWZLFHWKHDYHUDJHIRUWKHKRVSLWDODVDZKROH7KLV GLIIHUHQFHLVH[SODLQHGE\WKHKLJKDYHUDJHDJHRIWKHSDWLHQWV,QGHHGHOGHUO\SDWLHQWV
ZKRXVXDOO\UHTXLUHIDLUO\OHQJWK\VWD\VDFFRXQWIRUDVLJQLILFDQWVKDUHRIRUWKRSDHGLFDFWLYLW\
DW9LOOHIUDQFKH
7KH GHSDUWPHQW¶V DFWLYLWLHV IDOO LQWR WZR FDWHJRULHV 2Q WKH RQH KDQG WKHUH LV VRFDOOHG HOHFWLYH VXUJHU\ +HUH WKH PHGLFDO SURFHGXUHV UHTXLUHG DUH SODQQHG LQ DGYDQFH DV DUH WKH SHULRGRIKRVSLWDOLVDWLRQDOORFDWLRQRIRSHUDWLQJWKHDWUHVHWF2QWKHRWKHUKDQGWKHUHDUHWKH RUWKRSDHGLFHPHUJHQFLHVDGPLWWHGWKURXJKWKHKRVSLWDO¶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
7KHRUWKRSDHGLFVGHSDUWPHQWLVPDGHXSRIQXUVLQJVWDII)7(VLQFOXGLQJ QXUVLQJDX[LOLDULHV)7(V
WKHGHSDUWPHQWVXSHUYLVRU DQGUHJLVWHUHGQXUVHV)7(V
,QDGGLWLRQWKHUHLVDPHGLFDOWHDPRIWKUHHVXUJHRQV
0RVWRIWKHQXUVLQJWHDPZDVUHQHZHGLQZKLFKH[SODLQVZK\PRVWRIWKHQXUVHV KDYHQRWEHHQLQWKHGHSDUWPHQWIRUYHU\ORQJ$OORIWKHQXUVLQJWHDPDUHWHQXUHGHPSOR\HHV RIWKHSXEOLFKRVSLWDOVHUYLFH$FFRUGLQJWRWKHSHRSOHZHLQWHUYLHZHGWKHUHGRHVQRWVHHPWR EHDQ\PRYHWRGHYHORSQHZHPSOR\PHQWIRUPVLQWKHRUWKRSDHGLFVGHSDUWPHQW7KHUHDUHQR IL[HGWHUPFRQWUDFWVRURWKHUIRUPVRISUHFDULRXVHPSOR\PHQW
$OWKRXJK WKH UHJLVWHUHG QXUVHV DQG SDUWLFXODUO\ WKH GHSDUWPHQW VXSHUYLVRU DUH YHU\ PXFK DZDUH RI WKH VKRUWDJH RI QXUVHV LQ WKH ODERXU PDUNHW WKHUH KDV EHHQ QR LPSDFW RQ WKH RUWKRSDHGLFVGHSDUWPHQWLWVHOI
7KHRUJDQLVDWLRQRIZRUNLQWKHRUWKRSDHGLFVGHSDUWPHQWLVEDVHGRQWKHOHJDOSURYLVLRQVWKDW DSSO\WRDOOVKRUWVWD\XQLWV7KHZRUNLQJGD\LVGLYLGHGLQWRWKUHHSHULRGV
• PRUQLQJDP±SP
• HYHQLQJSP±SP
• QLJKWSP±DP
7KHUHDUHDOZD\VWZRQXUVLQJDX[LOLDULHVDQGWZRUHJLVWHUHGQXUVHVRQGXW\LQWKHGHSDUWPHQW GXULQJWKHGD\LQRUGHUWRHQVXUHFRQWLQXLW\RIFDUHDQGRWKHUDFWLYLWLHV$WQLJKWWKHUHLVRQO\
RQHUHJLVWHUHGQXUVHDQGRQHDX[LOLDU\ZKRDOVRZRUNLQDQRWKHUGHSDUWPHQWWKHVKRUWVWD\
PHGLFDOXQLWZKLFKLVQHDUE\RQWKHVDPHIORRU
2QHRIWKHSUREOHPVUDLVHGZDVWKDWRIWKHLUUHJXODULW\RIZRUNVFKHGXOHVZKLFKDUHSODQQHG ZHHNVLQDGYDQFHDQGDUHYHU\IUHTXHQWO\GLVUXSWHGE\DEVHQFHVGXHWRVLFNQHVV
:HQRWHGWKDWDOOWKHSHRSOHZHTXHVWLRQHGHPSKDVLVHGWKHFKDQJHVWKDWKDYHWDNHQSODFHLQ ZRUNFRQWHQW,WZRXOGVHHPWKDWQXUVHV¶ZRUNORDGVKDYHEHFRPHKHDYLHUDQGPRUHLQWHQVLYH EHFDXVHRIDQLQFUHDVHLQDFWLYLW\DQGEHFDXVHRIWKHLQFUHDVLQJQXPEHUVRIHOGHUO\SDWLHQWV EHLQJWUHDWHG7KHVHSDWLHQWVUHTXLUHPRUHFDUHDQGPRUHWLPHVSHQWZLWKWKHP
%RWKDX[LOLDULHVDQGUHJLVWHUHGQXUVHVZRUNVLJQLILFDQWYROXPHVRIRYHUWLPH'HSHQGLQJRQ WKHLQGLYLGXDOVFRQFHUQHGWKHQXPEHURIDGGLWLRQDOKRXUVZRUNHGSHUPRQWKYDULHVIURP WR WKDW LV EHWZHHQ DQG KRXUV SHU ZHHN 7KHVH DGGLWLRQDO KRXUV DUH FUHGLWHG WR D FRPSXWHULVHG ZRUNLQJWLPH DFFRXQW ZLWK WKH EDODQFHV EHLQJ FRQYHUWHG DW D ODWHU GDWH LQWR DGGLWLRQDOGD\VRII
$QRWKHUSUREOHPWKDWZDVUDLVHGZDVWKDWRIKROLGD\VWKHWLPLQJRIZKLFKKDVWRWDNHDFFRXQW RIWKHFRQVWUDLQWVXQGHUZKLFKWKHGHSDUWPHQWRSHUDWHV$VDUHVXOWKROLGD\VFDQQRWDOZD\VEH WDNHQDWWKHVDPHWLPHDVWKRVHRIRWKHUIDPLO\PHPEHUVZKHWKHUWKHQXUVHV¶KXVEDQGVRU WKHLU FKLOGUHQ 7KH HQRUPRXV GHPDQG IRU WLPH RII GXULQJ WKH VFKRRO KROLGD\V FDXVHV GLIILFXOWLHVZLWKWKHDOORFDWLRQRIKROLGD\VDPRQJWKHVWDIIDVDZKROH
)XUWKHUPRUHLWZRXOGVHHPWKDWQXUVHV¶FDUHHUVWHQGWRFKDQJHGLUHFWLRQDURXQGWKHDJHRI WKDWLVZKHQWKHFRQVWUDLQWVRIWKHMREEHFRPHPRUHGLIILFXOWWRDFFHSW1XUVHVVHHNWRJHW URXQGWKHVHFRQVWUDLQWVLQYDULRXVZD\V
• E\ ORRNLQJ IRU MREV LQ QXUVH WUDLQLQJ RU VHWWLQJ XS LQ SULYDWH SUDFWLFH WKHUHE\ JLYLQJ WKHPVHOYHVJUHDWHULQGHSHQGHQFHDQGIOH[LELOLW\
• E\JDLQLQJDTXDOLILFDWLRQDVDQXUVLQJPDQDJHU
• E\DVNLQJWRJRSDUWWLPH
7KHGHSDUWPHQWKDVDODUJHQXPEHURISDUWWLPHUVFRPSDUHGZLWKWKHQDWLRQDODYHUDJHV7KHUH DUH ILYH LQ DOO WZR DX[LOLDULHV ZKR ZRUN RI VWDQGDUG ZRUNLQJ WLPH DQG UHJLVWHUHG QXUVHVRQHRQKDOIWLPHDQGWKHRWKHUVRQ7KHQXUVLQJVWDIIWKHVXSHUYLVRUDQGWKH KHDGRIGHSDUWPHQWDUHDOOLQIDYRXURIH[SDQGLQJSDUWWLPHZRUNLQJ$FFRUGLQJWRWKHSHRSOH ZH LQWHUYLHZHG WKLV HPSOR\PHQW IRUP VHHPV WR EH D ZD\ RI UHFRQFLOLQJ WKH GHSDUWPHQW¶V FRQVWUDLQWV ZLWK WKH GHPDQGV RI IDPLO\ OLIH SDUWLFXODUO\ ZKHQ WKH \RXQJHU QXUVHV RU DX[LOLDULHVVWDUWWRKDYHFKLOGUHQ7KHVXSHUYLVRULVDOVRLQIDYRXURISDUWWLPHZRUNLQJEXWIRU GLIIHUHQWUHDVRQV³,¶PILJKWLQJIRULW´VKHWROGXV)RUKHUSDUWWLPHZRUNLVDPHDQVRI
• ³SURYLGLQJURXQGWKHFORFNFDUH´
• ³FRPSO\LQJ ZLWK WKH UHTXLUHPHQW WKDW QXUVLQJ VWDII VKRXOG KDYH WZR FRQVHFXWLYH UHVW GD\V´DQGILQDOO\
• ³PDNLQJLWHDVLHUWRSURYLGHFRYHUZKHQVWDIIDUHRIIVLFN´
7KH KHDG RI WKH RUWKRSDHGLFV GHSDUWPHQW DOVR IDYRXUV SDUWWLPH ZRUN EXW LQ JUHDWHU UHVHUYDWLRQV$OWKRXJKKHUHFRJQLVHVWKDWKLVVWDIIDUHSDUWLFXODUO\DWWUDFWHGWRSDUWWLPHZRUN KHGLGVWUHVVWKDWLWUDLVHVFHUWDLQSUREOHPV
• ZLWKWKHSDVVLQJRQRILQIRUPDWLRQ
• ZLWKPDLQWDLQLQJZRUNUDWHDQGDWPRVSKHUHDQG
• ZLWKSHUVRQQHOPDQDJHPHQW