Download as pdf or txt
Download as pdf or txt
You are on page 1of 177

%(<21'$1,0$7,2172:$5'$5+(725,&2)027,21'(6,*1

)257(&+1,&$/$1'352)(66,21$/:5,7,1*
E\
'DQLHO-RVHSK/LGGOH

$'LVVHUWDWLRQ
6XEPLWWHGWRWKH)DFXOW\RI3XUGXH8QLYHUVLW\
,Q3DUWLDO)XOILOOPHQWRIWKH5HTXLUHPHQWVIRUWKHGHJUHHRI

'RFWRURI3KLORVRSK\
  



'HSDUWPHQWRI(QJOLVK
:HVW/DID\HWWH,QGLDQD
$XJXVW




ProQuest Number: 10828421




All rights reserved

INFORMATION TO ALL USERS
The quality of this reproduction is dependent upon the quality of the copy submitted.

In the unlikely event that the author did not send a complete manuscript
and there are missing pages, these will be noted. Also, if material had to be removed,
a note will indicate the deletion.






ProQuest 10828421

Published by ProQuest LLC (2018 ). Copyright of the Dissertation is held by the Author.


All rights reserved.
This work is protected against unauthorized copying under Title 17, United States Code
Microform Edition © ProQuest LLC.


ProQuest LLC.
789 East Eisenhower Parkway
P.O. Box 1346
Ann Arbor, MI 48106 - 1346
LL


7+(385'8(81,9(56,7<*5$'8$7(6&+22/
67$7(0(172)&200,77(($33529$/

'U3DWULFLD6XOOLYDQ&KDLU
'HSDUWPHQWRI(QJOLVK
'U0LFKDHO6DOYR
'HSDUWPHQWRI(QJOLVK
'U7KRPDV5LFNHUW
'HSDUWPHQWRI(QJOLVK
'U6DPDQWKD%ODFNPRQ
'HSDUWPHQWRI(QJOLVK

$SSURYHGE\
'U0DQXVKDJ3RZHOO
+HDGRIWKH*UDGXDWH3URJUDP 



LLL


7RP\VWXGHQWV
LY


$&.12:/('*0(176

7KLVGLVVHUWDWLRQKDVWDNHQPDQ\\HDUVWRFRPSOHWHDQGLWQHYHUZRXOGKDYHEHHQSRVVLEOH

ZLWKRXWWKHSDWLHQFHDQGVXSSRUWRIP\IDPLO\IULHQGVDQGPHQWRUV)URPWKHEHJLQQLQJ

3DWULFLD6XOOLYDQFKDOOHQJHGPHWRHQJDJHZLWKFKDOOHQJLQJTXHVWLRQVDQGPRWLYDWHGPH

WRZUHVWOHZLWKWKHDQVZHUV:KHQ,VWUXJJOHGWRSXOOWRJHWKHUWKHLQWHUGLVFLSOLQDU\WKUHDGV

RIWKLVSURMHFWKHUJXLGDQFHDQGZLVGRPDOORZHGPHWRFODULI\P\GLUHFWLRQ:KHQ,ORVW

FRQILGHQFH VKH HQFRXUDJHG PH WR SUHVV RQ , DP VLPLODUO\ JUDWHIXO IRU WKH WKRXJKWIXO

GLUHFWLRQRIWKHUHVWRIP\FRPPLWWHH7KDQN\RXWR0LFKDHO6DOYRZKRSURYLGHGPHZLWK

WKH LQWHOOHFWXDO VSDFH WR ILUVW H[SORUH WKLV WRSLF LQ  DQG SURYLGHG PH ZLWK WKH

SHGDJRJLFDOVSDFHWRH[SORUHPRWLRQGHVLJQIURPDQLQVWUXFWLRQDOSHUVSHFWLYH,DPJUDWHIXO

WR7KRPDV5LFNHUWIRUKLVUHDVVXUDQFHWRSXUVXHPRWLRQDVWKHFHQWUDOWRSLFRIWKLVSURMHFW

DQG,DPWKDQNIXOIRU6DPDQWKD%ODFNPRQZKRVHHDUO\LQSXWOHGPHWRZUHVWOHZLWKWKH

HWKLFDOORJLFVRIPRWLRQ

,DOVRZDQWWRWKDQNDOORIWKHPHQWRUVZKRKDYHJXLGHGPHWKURXJKWKHZLQGLQJFRUULGRUV

RIDFDGHPLD)URP,OOLQRLV6WDWH8QLYHUVLW\WKDQNVWR.\OH-HQVHQ-XOLH-XQJDQG$P\

5RELOODUG6SHFLDOWKDQNVWR$QJHOD+DDVIRUOHWWLQJPHFUHDWHP\ILUVW<RX7XEHYLGHRDV

DILQDOSURMHFWIRUKHUFODVVLQVWHDGRIZULWLQJDSDSHU)URP&OHPVRQ8QLYHUVLW\WKDQNVWR

6FRW%DUQHWW&\QWKLD+D\QHV-DQ5XQH+ROPHYLN6XVDQ+LOOLJRVVDQG7KDURQ+RZDUG

,ZRXOGQHYHUKDYHKDGWKHFRXUDJHRUGHWHUPLQDWLRQWRSXUVXHJUDGXDWHZRUNZLWKRXW\RX

DQG\RXUOHVVRQVKDXQWHYHU\ZRUG,ZULWHDQGHYHU\OHVVRQ,WHDFK LQWKHEHVWZD\ 


Y

+XJH WKDQNV WR 1LFKRODV ³0DFFKLDWR´ 0DULQR DQG (OL]DEHWK ³/DWWH´ /DQH IRU ZULWLQJ

SRZHUKRXUVND\DNUHSULHYHVDQGHQGOHVVHQGOHVVODXJKWHU7KDQN\RXDOVRWRDOOWKHRWKHU

PHPEHUVRIP\JUDGXDWHFRKRUW-RKQ6KHUULOO3DWULFN/RYH7\OHU&DUWHUDVZHOODVWR

(ULQ%URFN&DUOVRQ%HWK7RZOH)HUQDQGR6DQFKH]DQG7RQ\%XVKQHU,FRXOGQ¶WKDYH

VSHQWILYH\HDUVRIP\OLIHZLWKDEHWWHUJURXSRISHRSOHDQG,DPSURXGWRKDYHZRUNHG

DORQJVLGHVXFKEULOOLDQWFDULQJIRONV

7KDQN\RXWRP\SDUHQWV5RG/LGGOHDQG&KULV3ULRUDQGWR%LOODQG/L]IRUOLVWHQLQJWR

PHH[SODLQWKLVSURMHFWRYHUDQGRYHUDJDLQWKHVHSDVWWKUHH\HDUVDQGIRUVXSSRUWLQJPH

HPRWLRQDOO\DQGILQDQFLDOO\

)LQDOO\DPDVVLYHWKDQNVWR&DUULH*UDQWIRUWDONLQJPHWKURXJKWKHVQDJVVWXPEOHVDQG

URXJKQLJKWV,ORYH\RXVRYHU\PXFK


YL


7$%/(2)&217(176

/,672)7$%/(6YLLL
/,672)),*85(6L[
$%675$&7[
&+$37(5  7+( 75$163$5(1&< 2) (5525 7+( &$6( )25 $1,0$7,21 ,1
352)(66,21$/&20081,&$7,21
,QWURGXFWLRQ
7HFKQRORJLFDO2EVWDFOHV3HGDJRJLFDO6WUXJJOHV
)URP$QLPDWLRQWR0RWLRQ'HVLJQ
9LVXDO5KHWRULFLQ3URIHVVLRQDODQG7HFKQLFDO&RPPXQLFDWLRQ
&KDSWHU2XWOLQH
&+$37(5  ³5(63(&7 )25 7+( *2/'(1 $720´ 75$&,1* 027,21 '(6,*1
*8,'(/,1(6)520&$5722167286(5,17(5)$&(6
,QWURGXFWLRQ
,QWHUIDFH6WXGLHVDQG9LVXDO5KHWRULF
7KH3ULQFLSOHVRI$QLPDWLRQ
$QLPDWLRQ*XLGHOLQHVLQ+XPDQ&RPSXWHU,QWHUDFWLRQ
7KH'LVWLQJXLVKLQJ7UDLWVRI0RELOH,QWHUIDFHV
&XUUHQW6W\OH*XLGHOLQHVIRU$QLPDWLRQ
L26*XLGHOLQHV
8:3*XLGHOLQHV
0DWHULDO'HVLJQ*XLGHOLQHV

&RPSDULVRQRI*HQHUDO3ULQFLSOHV
&RPSDULVRQRI6SHFLILF3UDFWLFHV
&RQFOXVLRQ
&+$37(5  7+( ³5($/,67,&´ /$1*8$*( 2) 027,21 '(6,*1 3(5&(378$/
35,1&,3/(6$1'5+(725,&$/&2817(532,176
,QWURGXFWLRQ
3HUFHSWXDO3ULQFLSOHVRI0RWLRQ'HVLJQ
YLL

7KH/LPLWDWLRQVRI³5HDOLVWLF´0RYHPHQW
$IIHFW3HUVRQDOLW\
&KRUHRJUDSK\
3UHVHQFH
$FFHVVLELOLW\
&RQFOXVLRQ
&+$37(53('$*2*,&$/675$7(*,(6)25027,21'(6,*1,1352)(66,21$/
$1'7(&+1,&$/&20081,&$7,21
,QWURGXFWLRQ
3HGDJRJLFDO&RQWH[W
'HHPSKDVL]LQJ&KDUDFWHU$QLPDWLRQ
&RQQHFWLQJ9LVXDO+LHUDUFK\WR&KRUHRJUDSK\
$SSURDFKHVWR6WRU\ERDUGLQJIRU0RWLRQ'HVLJQ
&RQFOXVLRQ
5()(5(1&(6
$33(1',;$08/7,0(',$:5,7,1*6<//$%86
$33(1',;%5+(725,&$/$1$/<6,6$66,*10(176+((7
$33(1',;&7+,6967+$7(;&(5&,6(
$33(1',;'%$6,&62)$)7(5())(&767<32*5$3+<(;(5&,6(
$33(1',;(352027,21$/9,'(2$66,*10(176+((7
$33(1',;)38%/,&+($/+9,'(2$66,*10(176+((7
$33(1',;*),1$/352-(&7$66,*10(176+((7
$33(1',;+'(6,*15$7,21$/(*8,'(
 
YLLL


/,672)7$%/(6

7DEOH7KH3ULQFLSOHVRI$QLPDWLRQ
7DEOH$QLPDWLRQ7\SHVDQG&RPPXQLFDWLYH)XQFWLRQV
7DEOH%HQHILWVDQG7\SHVRI$QLPDWLRQ5HIHUHQFHGLQ8:3*XLGHOLQHV
7DEOH&RPSDULVRQEHWZHHQ$FDGHPLF3ULQFLSOHVDQG&XUUHQW*XLGHOLQHV
7DEOH&RPSDULVRQRI$QLPDWLRQ7\SHVLQ7XPEOU0RELOH$SS
7DEOH0DWHULDO'HVLJQ*XLGHOLQHVIRU6WDJJHULQJ0RWLRQ
7DEOH6KLIWVLQ9LVXDO+LHUDUFK\LQ3HZ5HVHDUFK9LGHR

L[


/,672)),*85(6

)LJXUH([DPSOHVRIFUHDWLYHFXVWRPL]DWLRQLQ*RRJOH¶V0DWHULDO'HVLJQSULQFLSOHV
)LJXUH0RYHPHQWSDWWHUQWRDYRLGEDVHGRQ0DWHULDO'HVLJQ*XLGHOLQHV
)LJXUH$SSURSULDWHPRYHPHQWSDWWHUQEDVHGRQ0DWHULDO'HVLJQ*XLGHOLQHV

[


$%675$&7

$XWKRU/LGGOH'DQLHO-3K'
,QVWLWXWLRQ3XUGXH8QLYHUVLW\
'HJUHH5HFHLYHG$XJXVW
7LWOH%H\RQG$QLPDWLRQ7RZDUG$5KHWRULFRI0RWLRQ'HVLJQIRU7HFKQLFDODQG3URIHVVLRQDO
:ULWLQJ
0DMRU3URIHVVRU3DWULFLD6XOOLYDQ

7KLV GLVVHUWDWLRQ JURXQGV WKH UHODWLRQVKLS EHWZHHQYLVXDO UKHWRULF LQ SURIHVVLRQDO DQG WHFKQLFDO
FRPPXQLFDWLRQ DQG PRWLRQ GHVLJQ D VXEGLVFLSOLQH RI JUDSKLF GHVLJQ WKDW IRFXVHV RQ WKH
PRYHPHQW RI W\SRJUDSK\ FRORU DQG DEVWUDFW VKDSHV $OWKRXJK VFKRODUV LQ SURIHVVLRQDO DQG
WHFKQLFDO FRPPXQLFDWLRQ UHDGLO\ GLVFXVV WKH SUREOHPDWLF XVH RI DQLPDWLRQ LQ ZHE GHVLJQ DQG
SUHVHQWDWLRQJUDSKLFV 3RZHU3RLQW3UH]LHWF WKHUHKDVEHHQOLWWOHUHFRJQLWLRQRIWKHJURZLQJXVH
RI DQLPDWHG PRWLRQ LQ FRQWHPSRUDU\ PXOWLPHGLD GHVLJQ , DUJXH WKDW WKHVH FRQQHFWLRQV DUH
QHFHVVDU\JLYHQWKHLQFUHDVLQJO\VWDQGDUGUROHRIPRWLRQDVDGHVLJQHOHPHQWLQFRPPRQJHQUHVLQ
SURIHVVLRQDOFRPPXQLFDWLRQLQFOXGLQJXVHULQWHUIDFHVH[SODLQHUYLGHRVDQGGDWDYLVXDOL]DWLRQV

,Q RUGHU WR EXLOG FRQQHFWLRQV EHWZHHQ PRWLRQ GHVLJQ DQG YLVXDO UKHWRULF , WUDFH WKH KLVWRULFDO
WUDMHFWRU\RIGHVLJQSULQFLSOHVLQDQLPDWLRQDQGPRWLRQGHVLJQIURPWKHFDQRQLFDOSULQFLSOHV
GHYHORSHGE\'LVQH\DQLPDWRUVWRWKHFRQWHPSRUDU\JXLGHOLQHVIRULQWHUIDFHDQLPDWLRQSXEOLVKHG
E\$SSOH0LFURVRIWDQG*RRJOH+LJKOLJKWLQJWKHUHODWLRQVKLSEHWZHHQWKHVHGLIIHUHQWSULQFLSOHV
DQGWKHILHOGRIYLVXDOUKHWRULF,DUJXHWKDWDQHPSKDVLVRQJXLGLQJSULQFLSOHVRI³UHDOLVP´DQG
³GLVWUDFWLRQ´SURPRWHDQDUKHWRULFDOXQGHUVWDQGLQJRIPRWLRQGHVLJQOHDGLQJWRREVWDFOHVIRUWKH
UHVHDUFKDQGWHDFKLQJRIPXOWLPRGDOLW\LQWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQ,QUHVSRQVH
WKLV GLVVHUWDWLRQ RIIHUV IRXU WRSLFV IRU JURXQGLQJ PRWLRQ GHVLJQ LQ YLVXDO UKHWRULF
SHUVRQDOLW\DIIHFW FKRUHRJUDSK\ SUHVHQFH DQG DFFHVVLELOLW\ 7KH GLVVHUWDWLRQ FRQFOXGHV ZLWK
VWUDWHJLHV IRU WHDFKLQJ PRWLRQ GHVLJQ LQ WKH FRQWH[W RI SURIHVVLRQDO ZULWLQJ GUDZQ IURP P\
H[SHULHQFH WHDFKLQJ D FODVV LQ 0XOWLPHGLD :ULWLQJ WKDW HPSKDVL]HV PRWLRQ JUDSKLFV RYHU WKH
FRXUVHRIWZR\HDUV



&+$37(57+(75$163$5(1&<2)(55257+(&$6()25
$1,0$7,21,1352)(66,21$/&20081,&$7,21 

,QWURGXFWLRQ

7KUHHGHFDGHVDJRLQWKHLUDUWLFOH³7RZDUGD5KHWRULFRI9LVXDOVIRUWKH&RPSXWHU(UD´

%DUWRQDQG%DUWRQ  LGHQWLILHGDGLVFRQQHFWEHWZHHQWKHUHDGHUFHQWHUHGIRFXVRI

UKHWRULFDOO\JURXQGHGSHGDJRJ\LQWHFKQLFDOFRPPXQLFDWLRQDQGWKHDUKHWRULFDOSHGDJRJ\XVHG

WRWHDFKYLVXDOFRPPXQLFDWLRQ$QDO\]LQJSRSXODUWH[WERRNVIURPWKDWWLPHWKH\IRXQGWKDW

YLVXDODVSHFWVRIWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQZHUHRIWHQFRQYH\HGWKURXJK

SHUIXQFWRU\OLVWVRI³GRV´DQG³GRQ¶WV´DVZHOODVWKURXJKJHQHULFLQMXQFWLRQVWRPDNHYLVXDOV

³QHDWQDWXUDODQGVLPSOH´ S ,QWKH\HDUVVLQFHWKHVFKRODUO\FRQYHUVDWLRQZLWKLQWKH

ILHOGRIWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQKDVSURYLGHGDIDUPRUHUREXVWDSSURDFKWRWKH

SUDFWLFHUHVHDUFKDQGWHDFKLQJRIYLVXDOPDWHULDOVLQFOXGLQJWKHH[SDQVLRQRI³YLVXDOPDWHULDOV´

WRLQFOXGHDUDQJHRIGLJLWDOPRGHVDQGJHQUHV

 2QHRIWKHSRZHUIXODQGUHFXUULQJWKHPHVLQWKHJURZWKRIYLVXDOUKHWRULFLQNHHSLQJ

ZLWKPDQ\WUDGLWLRQDOUKHWRULFDOSUDFWLFHVKDVEHHQWKHSUDFWLFHRIFRQWH[WXDOL]LQJWKHGHVLJQ

FRQYHQWLRQVDQGWHUPLQRORJLHVWKDWDUHRIIHUHGDV³WUDQVSDUHQW´WKDWLVWDNHQIRUJUDQWHGDV

XQLYHUVDOLQYLVLEOHDQGDFRQWH[WXDO)RUH[DPSOH.RVWHOQLFN  KLJKOLJKWVKRZDSSHDOVWR

³FOHDU´YLVXDOVDWWHPSWWRDYRLGWKH³SK\VLFDOSHUFHSWXDODQGKLVWRULFDOFRQWH[WLQZKLFKWKH

GLVSOD\LVUHDG´ S UHVXOWLQJLQDOLPLWHGXQGHUVWDQGLQJRIKRZWRGHVLJQHIIHFWLYHGDWD

GLVSOD\V,IZHH[SHFWVWXGHQWVWRDGDSWWKHLUXQGHUVWDQGLQJRIYLVXDOGHVLJQWRQHZDQG

XQIDPLOLDUVLWXDWLRQV DVZHVKRXOG ZHPXVWHQFRXUDJHVWXGHQWVWRQRWLFHKRZWHUPVOLNH

³FODULW\´FDQGHVFULEHDZLGHUDUUD\RIVW\OLVWLFFKRLFHVWKDQWKRVHRIDPLQLPDOLVWEODFNDQG

ZKLWHEDUJUDSK


0RUHRYHUDV:\VRFNL  DUJXHVLQ³7KH6WLFN\(PEUDFHRI%HDXW\´WKHUHLVDQ

HWKLFDOYDOXHWRFRQWH[WXDOL]LQJSXUSRUWHGO\XQLYHUVDOGHVLJQJXLGHOLQHV7KURXJKWKHH[DPSOHRI

DQDGYHUWLVHPHQWIHDWXULQJDZRPDQ¶VQXGHILJXUH:\VRFNLGHPRQVWUDWHVKRZFRQYHQWLRQDO

WHUPVIRUGHVFULELQJHIIHFWLYHZHOORUJDQL]HGDGYHUWLVHPHQWV VSHFLILFDOO\FRQWUDVWUHSHWLWLRQ

DOLJQPHQWDQGSUR[LPLW\ UHQGHUWKHHQWLUHGHVLJQRIWKHDGVKHGHVFULEHVLQFOXGLQJWKH

ZRPDQ¶VERG\DVDQDEVWUDFWVHWRIVKDSHV,QWXUQ:\VRFNLVKRZVWKDWZKLOHWKHVH

FRQYHQWLRQDOGHVLJQSULQFLSOHVPD\EHSHGDJRJLFDOO\DQGDQDO\WLFDOO\XVHIXOWKH\DUHDOVR

LQVHSDUDEOHIURPWKHFXOWXUDOREMHFWLILFDWLRQVRIZRPHQ¶VERGLHVDVZHOODV³WKHYLROHQFHDJDLQVW

ZRPHQWKDWFDQIROORZIURPLW´ S ,QWKLVOLJKWFKDOOHQJLQJWKHSHUFHLYHGWUDQVSDUHQFLHVRI

YLVXDOGHVLJQRIIHUVQRWRQO\RSSRUWXQLWLHVWRDGDSWWRWKHH[SHFWDWLRQVRILQWHQGHGDXGLHQFHVEXW

DOVRDVSDFHIRUUHVLVWDQFHRULQ:\VRFNL¶VWHUPV³PDNLQJVWUDQJH´ S 

%XWZKLOH.RVWHOQLFNDQG:\VRFNLFHQWHUWKHLUUHVSHFWLYHDQDO\VHVRQWKHUXOHVIRUZKDW

VKRXOGEHLQFOXGHGLQYLVXDOGHVLJQP\LQTXLU\RULJLQDWHVIURPWKHLQYHUVHVRXUFHDFXULRVLW\LQ

DGHVLJQIHDWXUHWKDWKDVWUDGLWLRQDOO\EHHQPRUHH[FOXGHGIURP RUDWOHDVWPXWHGLQ SURIHVVLRQDO

FRPPXQLFDWLRQDQLPDWLRQ7KHXVHRIDQLPDWLRQZKHWKHULQ3RZHU3RLQWSUHVHQWDWLRQVGDWD

GLVSOD\VZHEVLWHVRUVRIWZDUHDSSOLFDWLRQVLVRIWHQFDWHJRUL]HGDVDIRUPRIPHUHRUQDPHQWDWLRQ

±DVVW\OHZLWKRXWVXEVWDQFH7KLVFKDUDFWHUL]DWLRQVXUIDFHVQRWRQO\LQDPDWHXUGLVFXVVLRQVRI

JUDSKLFGHVLJQEXWDOVRLQWKHVFKRODUVKLSRQWKHUKHWRULFRIGHVLJQ)RUH[DPSOH3RUWHU  

KDVFKLGHGDQLPDWLRQDVDQLQHIIHFWXDODWWHPSWDWLQWHUDFWLYLW\FKDUDFWHUL]HGE\³PXOWLPHGLD

H[WUDYDJDQ]DDQGIDQF\IHDWXUHVGHVLJQHGWRGD]]OHLPSUHVVRUZRZXVHUVWRSHUVXDGHWKHPWR



 )RU H[DPSOH LQ 'RQ 0F0LOODQ¶V   FRPLFDO VWDJH SUHVHQWDWLRQ ³/LIH $IWHU 'HDWK E\ 3RZHU3RLQW ´
0F0LOODQ PRFNV WKH XVH RI DQLPDWLRQ LQ 3RZHU3RLQW SUHVHQWDWLRQV E\ VKRZLQJ D JUDSK WLWOHG ³$QLPDWLRQ 9V
(IIHFWLYHQHVV´6WDWLQJWKDW³«ZLWKPRUHDQLPDWLRQVSHRSOHKDYHQRLGHDZKDW\RX¶UHWDONLQJDERXW´0F0LOODQ
TXHXHV D KRUGH RI VKDSHV WR DQLPDWH RQ VFUHHQ VLPXOWDQHRXVO\ ILOOLQJ WKH VFUHHQ ZLWK D FKDRWLF PHVV RI URWDWLQJ
VOLGLQJ DQG IDGLQJ DQLPDWLRQV 0F0LOODQ MRNLQJO\ QDPHV WKHVH DQLPDWLRQV DV WKH\ DSSHDU ZLWK ODEHOV VXFK DV WKH
³HIIHFWLYHDQGERULQJ´DQGWKH³DFWLYHDQGLQHIIHFWLYH´ILQLVKLQJZLWKWKHSXQFKOLQH³«DQGHYHU\WKLQJHOVH,MXVWFDOO
SRLQWOHVVPRWLRQ´


FRQVXPHRUWRFROOHFWURWHLQIRUPDWLRQEXWQRWHQDEOLQJWKHPWRGRYHU\PXFK´ S 

2IIHULQJDVLPLODU WKRXJKOHVVDFHUELF FULWLTXH-RKQVRQ6KHHKDQDQG%DHKU  ZDUQWKDW

WKHXVHDQLPDWLRQRIWHQIXQFWLRQVDVDQDQQR\LQJGLVWUDFWLRQLQYLVXDOVSDWLDOFRPSRVLWLRQV

$QLPDWLRQVKRXOGEHXVHGRQO\³ZLWKJUHDWFDXWLRQ´WKH\DUJXHDV³WKHXVHU¶VSUHGDWRU\LQVWLQFWV

DUHJRLQJWRGUDZVRPHRUDOORIWKHLUDWWHQWLRQWRWKHIODVK\DQLPDWLRQDQGDZD\IURPWKHUHVWRI

WKHLQIRUPDWLRQRQWKHVFUHHQ´ S 7KRXJK-RKQVRQ6KHHKDQDQG%DHKUVWRSVKRUWRI

UHFRPPHQGLQJWKDWDQLPDWLRQVKRXOGEHWRWDOO\HVFKHZHGWKHLUSRVLWLRQHFKRHVWKH

FKDUDFWHUL]DWLRQRIDQLPDWLRQDVPRUHVW\OHWKDQVXEVWDQFH

7KLVLVQRWWRVD\WKDWWKHVHQHJDWLYHDVVRFLDWLRQVIRUDQLPDWLRQDUHPLVSODFHGRU

LQDFFXUDWH$QLPDWHGGHVLJQHOHPHQWVZKHQGHSOR\HGZLWKRXWFDUHIXOFRQVLGHUDWLRQRIWKHLU

HIIHFWVFDQHDVLO\OHDGWRGLVWUDFWLRQFRQIXVLRQDQGIUXVWUDWLRQ0\SRLQWUDWKHULVWKDWWKH

WHQGHQF\WRH[FOXGHDQLPDWLRQIURPFRQVLGHUDWLRQRIYLVXDOUKHWRULFIXQFWLRQVWKURXJKWKHVDPH

LPSXOVHIRUGHVLJQHGWUDQVSDUHQF\DVWKHWHQGHQF\WRSUDLVHHIIHFWLYHGHVLJQVDV³FOHDU´

³QDWXUDO´RU³EHDXWLIXO´%RWKPRYHVGLVORFDWHYLVXDOGHVLJQIURPSDUWLFXODUDXGLHQFHVDQG

SXUSRVHV,QWXUQFRQWH[WXDOL]LQJWKHH[FOXGHGHOHPHQWVWDSVLQWRWKHVDPHSHGDJRJLFDOEHQHILWV

DQGHWKLFDOLPSHUDWLYHVDVWKRVHLGHQWLILHGE\:\VRFNLDQG.RVWHOQLFN,WRSHQVDYHQXHVIRUERWK

PRUHIOH[LEOHDQGPRUHUHVLVWDQWGHVLJQSUDFWLFHV

7KHH[SORUDWRU\SRWHQWLDOIRUGHULGHGGHVLJQHOHPHQWVLVQRWOLPLWHGWRDQLPDWLRQ

&RQVLGHUIRUH[DPSOHWKHW\SHIDFH&RPLF6DQVZKLFKKDVEHHQUHJXODUO\GHVLJQDWHGWKH

ZRUOG¶VPRVWKDWHGIRQW6LQFHLWZDVILUVWUHOHDVHGLQFRXQWOHVVWKLQNSLHFHVKDYHEHHQ

ZULWWHQDJDLQVWLWSHWLWLRQVKDYHEHHQFLUFXODWHGWREDQLWIURP*PDLO &RPEV DQG

ZHEVLWHVKDYHHPHUJHGWRVKDPHVRFDOOHG³FRPLFVDQVFULPLQDOV´ 'HPSVH\ 7KH

UDWLRQDOHVIRUVXFKDQLQWHQVHVHWRIUHVSRQVHVKDYHYDULHGIURPVRXUFHWRVRXUFH6RPHFULWLFL]H


WKHIRQWIRUVKHHURYHUXVHFLWLQJLQVWDQFHVZKHUHWKHSOD\IXOFDVXDOW\SHIDFHKDVDSSHDUHGRQ

ZHGGLQJLQYLWDWLRQVWHUPLQDWLRQOHWWHUVDQGVFLHQWLILFSRVWHUV7\SRJUDSKLFDOO\VDYY\GHVLJQHUV

RQWKHRWKHUKDQGWHQGWRWDNHLVVXHZLWKWKHW\SHIDFHLWVHOIDUJXLQJWKDW&RPLF6DQVVXIIHUV

IURP³SRRUIXQGDPHQWDOV´VXFKDVXQHYHQOLQHZHLJKWDQGSRRUNHUQLQJ .DGY\ ,QWKLV

OLJKWWKHIDWDOIODZRI&RPLF6DQVLVQRWRQO\WKDWLWLVXJO\±WKRXJKFHUWDLQO\WKLVLVDFRPPRQ

UHIUDLQ±EXWUDWKHUWKDWLWLOOHJLEOH RUDWOHDVWOHVVOHJLEOH ZKHQUHDGDVDODUJHEORFNRIWH[W$V

WKHVHQHJDWLYHDVVRFLDWLRQVDFFXPXODWHWKURXJKPHPHVSRVWVDQGWZHHWVWKH\VROLGLI\LQWRDQ

LQFUHDVLQJO\ULJLGVRFLDOFRQYHQWLRQQHYHUXVH&RPLF6DQV

7KLVFULWLTXH RUHYHQDQWDJRQLVPWRZDUG &RPLF6DQVLVVRZHOOUHKHDUVHG±VRILUPO\

URRWHGLQWKHSXEOLFLPDJLQDWLRQRIYLVXDOGHVLJQHUVDERXWZKDWFRXQWVDVLQHIIHFWLYHW\SRJUDSK\

±WKDWLWPD\FRQYLQFHZULWHUVWRDYRLG&RPLF6DQVLQWKHYHU\VLWXDWLRQVZKHUHLWLVUKHWRULFDOO\

XVHIXOVXFKDVLQWKHVSHHFKEXEEOHRIDJUDSKLFQRYHORUWKHJUHHWLQJRQDFKLOGUHQ¶VELUWKGD\

FDUG7KRXJKWKHVHOHVVVHULRXVJHQUHVDUHHDV\WRRYHUORRNZLWKLQWKHSXUYLHZRISURIHVVLRQDO

DQGWHFKQLFDOFRPPXQLFDWLRQWKH\QRQHWKHOHVVUHTXLUHUKHWRULFDOXQGHUVWDQGLQJRIW\SRJUDSK\

URRWHGLQDXGLHQFHDZDUHQHVVDQGJUDSKLFFRQYHQWLRQV/LNHZLVHZKLOHWKHLUUHJXODUOHWWHUIRUPV

RI&RPLF6DQVPD\GLVUXSWOHJLELOLW\IRUVRPHUHDGHUVWKHW\SHIDFHUHPDLQVDSRSXODUFKRLFHIRU

UHDGHUVDQGZULWHUVZLWKG\VOH[LDDVWKHODFNRIUHSHDWHGVKDSHVPDNHLWHDVLHUIRUWKHPWR

GLVWLQJXLVKRQHZRUGIURPDQRWKHU +XGJLQV %XWWKHPDQWUD³1HYHU&RPLF6DQV´DOVR

PDNHVLWPRUHGLIILFXOWWRUHFRJQL]HWKHVHRWKHU HG IDFHWVRIOHJLELOLW\

 ,WZLOOOLNHO\WDNHDORQJWLPHIRUQHJDWLYHDVVRFLDWLRQVRI&RPLF6DQVWRHURGHJLYHQWKDW

WKHVHDVVRFLDWLRQVKDYHEHFRPHVXFKDIDPLOLDUWRXFKVWRQHDPRQJJUDSKLFGHVLJQHUVLQSRSXODU

FXOWXUH7KHXQFRQGLWLRQDOGLVPLVVDORI&RPLF6DQVSUHFLVHO\WKHNLQGRIVLWXDWLRQZKHUH

SURIHVVLRQDODQGWHFKQLFDOFRPPXQLFDWRUVFDQFRPHLQKDQG\VLQFHLQWKHRU\ZHDUHWUDLQHGWR


LQWHUURJDWHWKHUKHWRULFDODIIRUGDQFHVRIGHVLJQ7KLVWUDLQLQJFKDOOHQJHVDUKHWRULFDOQRWLRQVRI

YLVXDOGHVLJQE\H[SRVLQJWKHVHPLRWLF %DUWKHV VRFLDO .RVWHOQLFN +DVVHWW 

LGHRORJLFDO %DUWRQ %DUWRQ DQGPDWHULDO 3URSHQ XQGHUSLQQLQJVRISXUSRUWHGO\

XQLYHUVDOJUDSKLFFRQYHQWLRQV7KHVHWKHRUHWLFDOGLVFXVVLRQVLQWXUQKDYHJHQHUDWHGVSHFLILF

WUHDWPHQWVRIUKHWRULFDQGW\SRJUDSK\PRVWQRWDEO\LQUHVHDUFKRQW\SHIDFHSHUVRQDOLWLHV

%UXPEHUJHU0DFNLHZLF]$PDUH 0DQQLQJ 7KLVERG\RIZRUNVXSSOLHV

DQDPSOHIRXQGDWLRQIRUVFKRODUVLQYLVXDOUKHWRULFWRZHLJKLQRQWKHFDVHRI&RPLF6DQVLQERWK

SHGDJRJLFDODQGSXEOLFVHWWLQJV

0\SRLQWKHUHLVWKDWZKHQHYHUWKHUHLVDGHVLJQHOHPHQWWKDWLVFRQVLGHUHGXQLYHUVDOO\

SUREOHPDWLFEXWLVVWLOOZLGHO\XVHGZHQHHGWRUHPDLQDOHUWIRUWKHSRWHQWLDODIIRUGDQFHVWKDW

PD\EHDWSOD\7KLVLVERWKWUXHDQGHDVLO\GHILQHGLQWKHFDVHRI&RPLF6DQV+RZHYHULWWKLVLV

MXVWDVWUXHEXWPRUHFRPSOLFDWHGWRFKDUDFWHUL]HZKHQLWFRPHVWRDSSURDFKLQJGHVLJQHOHPHQWV

DVVRFLDWHGZLWKDQLPDWLRQ

7DNHIRUH[DPSOHWKHDQLPDWHG*,)VIURPHDUO\KDQGFRGHG+70/ZHEVLWHV<HDUV

EHIRUHWKHWHPSODWHGULYHQGHVLJQVRI:RUG3UHVVDQG:HHEO\XVHUVZRUNHGZLWKDUUDQJHPHQW

W\SRJUDSK\FRORUDQGORZUHVLPDJHVWRHVWDEOLVKWKHYLVXDOLGHQWLW\RIWKHLUZHEVLWHV7KHVH

EDVLFYLVXDOIHDWXUHVGLGQRWOHDGWRGHVLJQVWKDWZHUHSDUWLFXODUO\GLVWLQFWLYHIURPRQHDQRWKHU

QRUZHUHWKHVHGHVLJQIHDWXUHVXQLTXHWRWKHZHE$QLPDWHG*,)VRQWKHRWKHUKDQGZHUH

GLVWLQFWLYH7KHFRQVWDQWO\ORRSLQJPRYHPHQWFKDUDFWHULVWLFRIQHLWKHUSULQWQRUILOPFRQQHFWHG

WKHFXOWXUDOQRYHOW\RIRQOLQHVSDFHVZLWKDFRUUHVSRQGLQJWRROIRUYLVXDOQRYHOW\$QGVRIURP

FRQVWUXFWLRQVLJQVWRDQLPDWHGPDLOER[HVDQLPDWHG*,)VEHFDPHDKDOOPDUNRIWKHHDUO\XVHU

JHQHUDWHGZHEGHVLJQ-XVWDV&RPLF6DQVZDVUHDGLO\DGRSWHGE\XVHUVZKRZHUHQHZWR


GRFXPHQWGHVLJQ*,)VZHUHDGRSWHGE\WKHFRXQWOHVVQHZFRPHUVORRNLQJWRFUHDWHGLVWLQFWLYH

DWWUDFWLYHZHEVLWHV

2IFRXUVHWKLVLVQRWWKHZD\WKDWWKLVLQLWLDOZDYHRIDQLPDWHG*,)VLVW\SLFDOO\

UHPHPEHUHG5DWKHUWKH\DUHRIWHQUHIHUHQFHGDVDULGGHGQXLVDQFH±DOHVVRQOHDUQHG$WEHVW

ZHFRQVLGHUWKHVHHDUO\*,)VQRVWDOJLFDOO\DVDIRUPRIYLVXDOFXOWXUHWKDWQHHGHGWRJURZXS

DQGPRYHRXWRIWKHLQWHUQHW¶VDWWLFWRWDNHWKHLUFXUUHQWIRUPLQPHPHVDQGVRFLDOPHGLD

:LOOLDPV 7RGD\*,)VDUHXVHGTXLWHGLIIHUHQWO\DVLQGLYLGXDOUHDFWLRQVDQGUHVSRQVHVWR

SRVWHGFRQWHQWUDWKHUWKDQDVDIXQFWLRQLQJSDUWRIWKHLQWHUIDFH7KRXJKWKHILOHIRUPDWPD\EH

WKHVDPHWKHUKHWRULFDOSXUSRVHKDVVKLIWHGGUDPDWLFDOO\

7KHSULPDU\FRPSODLQWZLWKHDUO\XVHVRI*,)VLVWKDWWKH\ZHUHGLVWUDFWLQJ$QDQLPDWHG

GDQFLQJEDQDQDPD\EHGLVWLQFWLYHEXWLWDOVRFRQWLQXDOO\GUDZVWKHXVHU¶VYLVXDODWWHQWLRQHYHQ

ZKHQWKHXVHUZDQWVWRUHDGDSDUDJUDSKRUVFDQWKHSDJHIRUDPHQXRSWLRQ$VWKHVHPLFUR

LQWHUDFWLRQVDFFXPXODWHZLWKLQDSHULRGRIVHFRQGVWKHDQLPDWHGLFRQIXQFWLRQHGOHVVDVDQ

DHVWKHWLFDSSHDODQGPRUHDVDQREVWDFOHWRWKHXVHU¶VYLVXDOSDWKWKURXJKWKHZHEVLWHDVD

ZKROH,WLVWKLVGLVMXQFWLRQEHWZHHQFUHDWLYLW\DQGXVDELOLW\PRUHVRWKDQDQ\SUREOHPZLWKORIL

DHVWKHWLFVWKDWFRQWLQXHVWRPDUNLQWHUIDFHDQLPDWLRQDVDMXYHQLOHWKRXJKWOHVVSUDFWLFHHYHQ

WRGD\

$V1LHOVHQ  GRFXPHQWVLQKLVHDUOLHVWOLVWRI³WRSPLVWDNHV´LQZHEGHVLJQWKH

FRPPRQVROXWLRQIURPDXVDELOLW\SHUVSHFWLYHZDVVLPSO\WRVWRSXVLQJDQLPDWLRQVDOWRJHWKHU

1HYHULQFOXGHSDJHHOHPHQWVWKDWPRYHLQFHVVDQWO\0RYLQJLPDJHVKDYHDQ

RYHUSRZHULQJHIIHFWRQWKHKXPDQSHULSKHUDOYLVLRQ$ZHESDJHVKRXOGQRWHPXODWH

7LPHV6TXDUHLQ1HZ<RUN&LW\LQLWVFRQVWDQWDWWDFNRQWKHKXPDQVHQVHVJLYH\RXU


XVHUVRPHSHDFHDQGTXLHWWRDFWXDOO\UHDGWKHWH[W2IFRXUVH%/,1.!LVVLPSO\HYLO

(QRXJKVDLG SDUD 

2YHUWKHQH[WILIWHHQ\HDUV1LHOVHQFRQWLQXDOO\UHWXUQHGWRDQLPDWLRQDVDSULPHPLVWDNH

RIZHEGHVLJQLQSDUWEHFDXVHGHVLJQHUVEHJDQWRH[SORUHQHZSURJUDPVIRUEXLOGLQJDQLPDWLRQ

GLUHFWO\LQWRXVHULQWHUIDFHV SULPDULO\0DFURPHGLD)ODVK $QGDVZHFDQVHHIURPWKH

YHUVLRQRI1LHOVHQ¶V³WRSPLVWDNHV´OLVWWKHVROXWLRQWRWKHSUREOHPUHPDLQHGWKHVDPH

)ODVKLVDSURJUDPPLQJHQYLURQPHQWDQGVKRXOGEHXVHGWRRIIHUXVHUVDGGLWLRQDOSRZHU

DQGIHDWXUHVWKDWDUHXQDYDLODEOHIURPDVWDWLFSDJH)ODVKVKRXOGQRWEHXVHGWRMD]]XSD

SDJH,I\RXUFRQWHQWLVERULQJUHZULWHWH[WWRPDNHLWPRUHFRPSHOOLQJDQGKLUHD

SURIHVVLRQDOSKRWRJUDSKHUWRVKRRWEHWWHUSKRWRV'RQ WPDNH\RXUSDJHVPRYH,WGRHVQ W

LQFUHDVHXVHUV DWWHQWLRQLWGULYHVWKHPDZD\PRVWSHRSOHHTXDWHDQLPDWHGFRQWHQW

ZLWKXVHOHVVFRQWHQW 1LHOVHQSDUDDXWKRU¶VHPSKDVLV 

(YHQWKRXJKWKHGHVLJQHUVRIKDGEHHQH[SHULPHQWLQJZLWKLQWHUIDFHDQLPDWLRQVIRU

QHDUO\DGHFDGHWKHGHVLJQSKLORVRSK\KDGQRWFKDQJHGDYRLGDQLPDWLRQ7KRXJKWKLVGLUHFWLYH

PD\VHHPOLNHDPLQRURQHLQSUDFWLFHLWHOLPLQDWHVDZLGHVZDWKRIGHVLJQSRVVLELOLWLHV

:KHUHDVFDOOVWR³EDQFRPLFVDQV´DUHOLPLWHGWRDVLQJOHW\SHIDFHJHQHUDOLQMXQFWLRQVDJDLQVW

DQLPDWLRQZRUNWRUHVWULFWDQ\W\SHRIDQLPDWLRQLQFOXGLQJPRYHPHQWEOLQNLQJIODVKLQJIDGHV

DQGRWKHUV6XFKDZLGHQHWRIFULWLFLVPDOVRWHQGVWRFDSWXUHGLVVLPLODUJHQUHVDQGSXUSRVHV

OHDGLQJWRDJHQHUDOGLVWUXVWRIDQLPDWHGGHVLJQHOHPHQWVUHJDUGOHVVRIZKHWKHUWKH\DSSHDULQD

ZHEVLWHLQWHUIDFHRULQD3RZHU3RLQWSUHVHQWDWLRQ0XGG\LQJWKHVLWXDWLRQHYHQIXUWKHUWKHUHLV

UHODWLYHO\OLWWOHGLVFLSOLQDU\JURXQGLQJLQDQLPDWLRQWRKHOSXVGHVFULEHWKHGLIIHUHQFHEHWZHHQ

RQHDQLPDWLRQDQGDQRWKHU7KLVVWDQGVLQVWDUNFRQWUDVWWRWKHZHOOZRUQGHEDWHVRIW\SRJUDSK\

ZKLFKDXWRPDWLFDOO\LQYRNHWHUPLQRORJLFDOFXHVOLNHVHULIVNHUQLQJDQG[KHLJKW:LWKRXWWKLV


NLQGRIGHVFULSWLYHYRFDEXODU\LWEHFRPHVHDVLHUWRFULWLTXHDQLPDWLRQWKURXJKJHQHUDOWHUPVOLNH

³IODVK\´RU³VKRZ\´DQGPRUHGLIILFXOWWRGLJIRUWKHUKHWRULFDOFRQVLGHUDWLRQVWKDWPD\EHDW

SOD\

'HVSLWHWKHVHHQWUHQFKHGFULWLTXHVRIDQLPDWHGGHVLJQHOHPHQWVWKHUROHRIDQLPDWLRQKDV

RQO\JURZQLQUHODWLRQWRPXOWLPRGDOJHQUHVRIWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQ2QH

VXFKJHQUHLVWKH³H[SODLQHUYLGHR´WKHRQHWRWZRPLQXWHYLGHRVWKDWH[SODLQDQHZSURGXFWRU

ZHOFRPHXVHUVWRDFRPSDQ\¶VZHEVLWH6SDUNHGE\WKHFUDIWSDSHUVLPSOLFLW\RI*RRJOH'RFVLQ

3ODLQ(QJOLVK  DQG,QWURWR'URSER[  WKHVHVKRUWYLGHRVKDYHVLQFHVROLGLILHGLQWR

VWDSOHFRPSRQHQWVRIGLJLWDOPDUNHWLQJDQGEUDQGLQJDQGWKHDOPRVWDOZD\VGHSHQGRQ

DQLPDWLRQUDWKHUWKDQOLYHDFWLRQWRSUHVHQWLQIRUPDWLRQ([SODLQHUYLGHRVDOVRSOD\DNH\UROHLQ

WKHFRQWHQWVWUDWHJLHVRIODUJHQHZVRUJDQL]DWLRQVVXFKDV7KH1HZ<RUN7LPHV7KH$WODQWLFDQG

9R[0HGLDDVWKHVHFRPSDQLHVVWUXJJOHWRSXVKFRQWHQWWKURXJK)DFHERRN¶VYLGHRERRVWLQJ

DOJRULWKPV /LX 0HDQZKLOHDQLPDWLRQKDVDOVRH[SHULHQFHGDUHVXUJHQFHLQZHEGHVLJQ

DVGHYHORSHUVKDYHZRUNHGWRWDLORUWKHLULQWHUIDFHVWRDYDULDEOHDUUD\RIGHYLFHVZLWKGLIIHUHQW

VFUHHQVDQGSURFHVVRUV,QVRPHFDVHVWKHVHDQLPDWLRQVDUHXQLTXHWRSDUWLFXODUSURJUDPVRU

LQWHUDFWLRQVDQGLQRWKHUFDVHVWKHDQLPDWLRQVDUHVWDQGDUGL]HGDFURVVFRPSDQLHVRUHYHQDFURVV

HQWLUHSODWIRUPV7RGD\WKHVW\OHJXLGHVIRUFRPSDQLHVVXFKDV6DOHVIRUFH  DQG,%0

 UHIHUHQFHQRWRQO\DSSURSULDWHFRORUVW\SHIDFHVDQGOD\RXWVEXWDOVRDSSURSULDWH

DQLPDWLRQVIRUPDLQWDLQLQJWKHLUGHVLUHGYLVXDOWRQH

7KHVHGHYHORSPHQWVLQGLFDWHWKDWWKHUROHRIDQLPDWLRQKDVPRYHGSDVWWKH³PXOWLPHGLD

H[WUDYDJDQ]DDQGIDQF\IHDWXUHG´EHOLWWOHGE\3RUWHU S QRORQJHUDPHUHGLVWUDFWLRQ

RUDXWRPDWLFDOO\VHHQDV³XVHOHVVFRQWHQW´ 1LHOVHQ 7KXVLQWKLVSURMHFW,DGGUHVV



7KHVHHDUO\YLGHRVXVHGDVLWHFDOOHG&RPPRQ&UDIWWRFUHDWHSDSHUFXWRXWVRIDOOYLVXDOPDWHULDOV7KHDXWKRUZRXOG
WKHQPRYHWKHVHSDSHUREMHFWVDURXQGWKHIUDPHPDQXDOO\WRFUHDWHWKHVHQVHRIDQLPDWLRQ


LPSRUWDQWXQGHUDGGUHVVHGLVVXHVUHODWHGWRUKHWRULFDQGDQLPDWLRQDVWKH\SUHVHQWWKHPVHOYHVLQ

SURIHVVLRQDODQGWHFKQLFDOFRPPXQLFDWLRQFODVVHVLQRUGHUWRKHOSVWXGHQWVUHFRJQL]HDQGDFWRQ

WKHRSSRUWXQLWLHV DQGOLPLWDWLRQV RIDQLPDWHGGHVLJQHOHPHQWV



7HFKQRORJLFDO2EVWDFOHV3HGDJRJLFDO6WUXJJOHV

7KHLURQ\RIGLVFXVVLQJWKHUHODWLRQVKLSEHWZHHQDQLPDWLRQDQGWHFKQLFDOSURIHVVLRQDO

FRPPXQLFDWLRQLVWKDWDQLPDWLRQLVSHUYDVLYHO\LQFOXGHGXQGHUWKHEURDGXPEUHOODRI

PXOWLPRGDOLW\EXWIHZVWXGLHVKDYHWUDFHGDFRQQHFWLRQEHWZHHQDQLPDWLRQDQGUKHWRULFDO

RXWFRPHV/DXHU¶V  DQDO\VLVRIWKHWHUPV³PXOWLPHGLD´DQG³PXOWLPRGDO´IRUH[DPSOH

FRQVLVWHQWO\UHIHUHQFHVDQLPDWLRQDVRQHRIWKHPDQ\SRWHQWLDO³PRGHV´DYDLODEOHWRVWXGHQWV

3URYLGLQJDQRYHUYLHZQHZDQGHPHUJLQJPHGLDRIWKH FHQWXU\/DXHUOLVWV³PSVGLJLWDO
VW

LPDJHVDQGYLGHR'YLUWXDOUHDOLWLHVDQGZHEVLWHVWKDWVXSSRUW)ODVKDQLPDWLRQZLNLVDQG

EORJV´ S :KLOHPRVWRIWKHVHPRGDOLWLHVKDYHUHFHLYHGLQGHSWKH[DPLQDWLRQVIURPD

UKHWRULFDOSHUVSHFWLYHGLVFXVVLRQVRIDQLPDWLRQYDU\IURPFDXWLRXVZDUQLQJV -RKQVRQ6KHHKDQ

%DHKU WRRXWULJKWULGLFXOH 3RUWHU 7KRXJKUHFHQWGLVFXVVLRQVRILQIRUPDWLRQ

GHVLJQDQGGDWDYLVXDOL]DWLRQKDYHWDNHQDOHVVJXDUGHGVWDQFH .RVWHOQLFN DQLPDWLRQ

FRQWLQXHVWREHOLVWHGDVDSRWHQWLDOFRPSRQHQWRIPXOWLPHGLDGHVLJQZLWKRXWHVWDEOLVKLQJLWV

SHGDJRJLFDORUSUDFWLFDOYDOXHIRUSURIHVVLRQDODQGWHFKQLFDOFRPPXQLFDWRUV

7KLVJDSQRWRQO\XQGHUFXWVWKHUDQJHRIPXOWLPHGLDDQDO\VHVEXWDOVRVKRUWFLUFXLWV

SHGDJRJLFDODWWHPSWVWRLQFRUSRUDWHDQLPDWLRQLQWRRXUFODVVHV)RON  IRUH[DPSOH

UHFRXQWVWKHORJLVWLFDODQGWHFKQRORJLFDOGLIILFXOWLHVRIZRUNLQJZLWKDQLPDWHGYLGHRLQWKH

FRPSRVLWLRQFODVVURRP,QWKHFRXUVHVWXGHQWVFKRVHWRZRUNZLWKDQLPDWLRQDVDQDOWHUQDWLYHWR

WKHGRPLQDQWVW\OHRIDGYRFDF\YLGHRZKLFKWKH\GHVFULEHGDV³WKHWDONLQJKHDGRIDVHPL


IDPRXVSHUVRQLQWHUUXSWHGE\SDWKRVKHDY\LPDJHVRISHRSOHREYLRXVO\LQQHHGRIGDQJHU´

³$QLPDWHWR$GYRFDWHIRU1RQSURILWV´SDUD 7RZRUNZLWKDQLPDWHGYLGHRWKHVWXGHQWV

FODLPHGZRXOGDOORZWKHPWRPDNHFRPSRVLWLRQVWKDWZRXOGEHIDUPRUHSDUWLFLSDWRU\WKDQWKH

WUDGLWLRQDOGRFXPHQWDU\VW\OH7DSSLQJLQWRKLVVWXGHQWV¶PRWLYDWLRQV)RONGHYHORSHGDQ

DVVLJQPHQWWKDWIRFXVHGRQDQLPDWHGYLGHRXVLQJWKHVDPHSHGDJRJLFDOLQIUDVWUXFWXUHIRU

PXOWLPRGDOLW\DVKHKDGXVHGLQWKHSDVW

+RZHYHU)RON¶VUHIOHFWLRQRQWKHFODVVGHPRQVWUDWHVKRZWKHWHFKQLFDODVSHFWVRI

DQLPDWLRQFDQREVFXUHLWVDIIRUGDQFHVIRUGHVLJQ*XLGLQJVWXGHQWVWRZDUGDSSURSULDWHDQLPDWLRQ

SURJUDPVSURYHGWREHDPDMRUKXUGOHDVPDQ\RSHQVRXUFHSURJUDPVDUHHDV\WRXVHEXW

SURYLGHIHZRSSRUWXQLWLHVIRUPXOWLPHGLDGHVLJQRXWVLGHRIDIHZSUHIDEULFDWHGFKRLFHV2WKHU

SURJUDPVRIIHUOLPLWOHVVSRVVLELOLWLHVIRUGHVLJQLQJPRWLRQJUDSKLFVEXWDUHKDPSHUHGE\D

SUHFDULRXVOHDUQLQJFXUYHWDLORUHGWRDQLPDWLRQSURIHVVLRQDOV$FFRUGLQJO\)RONGHVFULEHVKRZ

³PDQ\VWXGHQWVMXVWIHOWRYHUZKHOPHGE\WKHDQLPDWLRQDVSHFWDQGHQGHGXSHPEUDFLQJµUHJXODU¶

YLGHREHFDXVHWKH\IRXQGLWPXFKHDVLHU2WKHUVWXGHQWVZHUHIUXVWUDWHGWKDWWKH\FRXOGQRW

SURGXFHZKDWZDVLQWKHLUKHDGVDQGWKH\LQGLFDWHGWKDWWKH\ZRXOGKDYHVHOHFWHGPRUHORIL

RSWLRQVLIWKH\FRXOGKDYHVWDUWHGRYHU´ ³$QLPDWHWR$GYRFDWHIRU1RQSURILWV´SDUD )RON

VXJJHVWVWKDWDSRWHQWLDOVROXWLRQWRWKHVHSUREOHPVLVWRVLPSO\JLYHVWXGHQWVPRUHWLPHWRZRUN

RQDQLPDWLRQSURMHFWVDQGIUDPHVWKHSULPDU\FKDOOHQJHRIWKHVHSURMHFWVDV³GHYHORSLQJHQRXJK

H[SHUWLVHWRFUDIWDVW\OHWKDWKDVHQRXJKUKHWRULFDORRPSKIRUWKHDXGLHQFH´ SDUD :LWKDIHZ

H[WUDZHHNVWRIDPLOLDUL]HWKHPVHOYHVZLWKWKHWHFKQRORJ\WKHORJLFJRHVVWXGHQWVZRXOGEHDEOH

WRPRYHEH\RQGWKHOLPLWDWLRQVRIDQ\RQHSDUWLFXODUSURJUDPVSHQGLQJPRUHWLPHWDLORULQJWKHLU

DQLPDWLRQVWRZDUGDSDUWLFXODUDXGLHQFH


 )RONLVIDUIURPWKHRQO\WHDFKHUWRVWUXJJOHZLWKDQLPDWLRQ0RJXOO¶V  H[SHULHQFH

UHSRUWRIWHDFKLQJYLGHRSURGXFWLRQLQWHFKQLFDOFRPPXQLFDWLRQHFKRHV)RON¶VIUXVWUDWLRQVZLWK

DQLPDWLRQVRIWZDUHEXWKLVDFFRXQWDOVRFKDOOHQJHVWKHLGHDWKDWDGGLWLRQDOWLPHZRXOG

DXWRPDWLFDOO\OHDGWREHWWHURXWFRPHV6WXG\LQJWKH³ORJLVWLFVFRQVLGHUDWLRQVDQGSUREOHPV´RI

FUHDWLQJLQIRUPDWLYHYLGHRV0RJXOOGHVFULEHVDQHLJKWZHHNSURMHFW±UHSHDWHGLQIRXUGLIIHUHQW

VHPHVWHUV±LQZKLFKVWXGHQWVZRUNHGRQWKHLUYLGHRDVVLJQPHQWVDOORZLQJDPSOHWLPHIRU

UHVHDUFKVWRU\ERDUGLQJILOPLQJDQGHGLWLQJ S ,QWKHILUVWIHZVHPHVWHUV0RJXOODOORZHG

VWXGHQWVWRFKRRVHDQ\VW\OHRILQIRUPDWLYHYLGHRVDQGVRPHVWXGHQWVFKRVHWRIRFXVRQ

DQLPDWLRQ+RZHYHUKHTXLFNO\IRXQGWKDWWKHVHDQLPDWHGSURMHFWVODFNHGWKHULJRUDQGFULWLFDO

WKRXJKWRIRWKHUYLGHRSURMHFWV5HIOHFWLQJRQWKHVHSURMHFWV0RJXOOQRWHV

³«VLPSOH³GRLW\RXUVHOI´DQLPDWLRQVRIWZDUH HJ*R$QLPDWH ZDVDOVRDSUREOHP

EHFDXVHWKHVRIWZDUHSURYLGHGOLPLWHGSUHGHILQHGYLVXDOFRQWHQWWKDWUHVWULFWHGWKH

VWXGHQWV DELOLW\WRFRPPXQLFDWHYLVXDOO\6WXGHQWVZRXOGUHVRUWWR>WKLV@JHQUHWRSURGXFH

ODVWPLQXWHSURMHFWVWKDWFLUFXPYHQWHGWKHSODQQLQJDQGGHYHORSPHQWVWDJHV7KHUHIRUH

IRUPRUHUHFHQWFODVVHVVWXGHQWVZHUHHQFRXUDJHGWRXVHDGRFXPHQWDU\VW\OHDVD

SULPDU\VW\OHDOWKRXJKWKH\ZHUHDOORZHGWRXVHLQWHUYLHZVDQLPDWLRQRUGUDPDWL]DWLRQ

WRHPSKDVL]HVSHFLILFSRLQWVLIDSSURSULDWH´ S 

 )RU0RJXOOWKHLVVXHLVQRWWKDWWKHDQLPDWLRQVRIWZDUHLVWHFKQRORJLFDOO\PRUHGLIILFXOW

WKDQZRUNLQJZLWKOLYHDFWLRQYLGHR,QGHHGEDVHGRQKLVDFFRXQWRIWKHFODVVLWDSSHDUVWKDW

PDQ\VWXGHQWVFKRVHWRZRUNZLWKDQLPDWLRQEHFDXVHLWVHHPHGWREHWKHHDVLHURSWLRQ5DWKHU

0RJXOO¶VIUXVWUDWLRQVXJJHVWVWKDWWKHSUREOHPRIFRPPXQLFDWLQJZLWKDQLPDWLRQLVWLHGWRWKH

WHPSODWHGULYHQIRXQGDWLRQRIHQWU\OHYHOSURJUDPV,IWKLVLVWKHFDVH±LIWKHDYDLODEOHSURJUDPV

SURYHUHVLVWDQWWRRXUSHGDJRJLFDODSSURDFKHV±WKHQZHPXVWHLWKHUILQGDGLIIHUHQWSURJUDPRU


VKLIWRXUSHGDJRJLFDODSSURDFKDZD\IURPWKHSURJUDPVWRZDUGWKHDIIRUGDQFHVDQGOLPLWDWLRQV

RIDQLPDWLRQLQJHQHUDO

 2IIHULQJDPRUHKRSHIXODFFRXQWRIKRZDQLPDWLRQPD\IXQFWLRQZLWKLQWKHGLVFLSOLQDU\

VSDFHRIFRPSRVLWLRQ6RUDSXUH¶V³0RYLQJ:ULWLQJ´  RIIHUVDGLVWLQFWO\GLIIHUHQWDSSURDFK

WKDQ0RJXOORU)RON,QVWHDGRIDSSURDFKLQJDQLPDWLRQDVDQDOWHUQDWLYHWROLYHDFWLRQYLGHR

SURMHFWV6RUDSXUHVWUHVVHVWKHVSHFLILFDIIRUGDQFHVRIDQLPDWHGW\SRJUDSK\:RUNLQJZLWK

DQLPDWHGWH[WVKHDUJXHVHQFRXUDJHVVWXGHQWVWRPDNHH[SOLFLWFRQQHFWLRQVEHWZHHQZULWLQJIRU

SULQWDQGZULWLQJIRUWKHVFUHHQ$GGLWLRQDOO\6RUDSXUHDUJXHVIRUWKHYDOXHRIZRUNLQJZLWK

SURIHVVLRQDOJUDGHVRIWZDUH 0DFURPHGLD)ODVK EXWRIIVHWVWKHOHDUQLQJFXUYHE\DVVLJQLQJ

VKRUWVHFRQGSURMHFWVLQVWHDGRIWZRPLQXWHLQIRUPDWLRQDOYLGHRV6WXGHQWVEHJLQE\

DQLPDWLQJRQO\DVLQJOHZRUGDQGWKHQDGYDQFHWRDQLPDWLQJDVKRUWSRHPDIWHUDIHZZHHNV

6RUDSXUHDOVRRIIHUVDGHHSDQDO\VLVRIWKHVSHFLILFPHWDSKRUVRIWKH)ODVKLQWHUIDFHFRPSDULQJ

WKHSRVLWLRQRI³ZULWHU´WRWKHSRVLWLRQVRI³GHVLJQHU´DQG³GHYHORSHU´WKDWDUHGHVLJQDWHGE\WKH

)ODVKLQWHUIDFH S 7KURXJKWKHVHFRPSDULVRQV6RUDSXUHHQFRXUDJHVKHUVWXGHQWVWRWKLQN

FULWLFDOO\DERXWIDFWRUVOLNHMX[WDSRVLWLRQDQGWLPLQJIDFWRUVWKDWJHVWXUHWRZDUGWKHLQWHUVHFWLRQ

RIDQLPDWLRQDQGGHVLJQ

%\6RUDSXUH¶VDFFRXQWWKLVDSSURDFKWRDQLPDWLRQOHGWROHVVIUXVWUDWLQJHQFRXQWHUZLWK

GHVLJQLQJDQLPDWLRQDQGVXFFHVVIXOO\DYRLGHGWKHODUJHO\ORJLVWLFDOOLPLWDWLRQVGHVFULEHGE\)RON

DQG0RJXOO%XWGHVSLWHWKHVHH[SOLFLWPRYHVWRZDUGDUHDVRQDEOHZRUNORDGDQGDSSURSULDWH

VFDIIROGLQJ6RUDSXUHGHWDLOVKRZVWXGHQWVVWLOOVWUXJJOHGWRDUWLFXODWHZK\WKH\FKRVHWRXVH

FHUWDLQDQLPDWLRQVRYHURWKHUV6KHUHIOHFWV³HYHQLQWKHLUILQDOSURMHFWVVWXGHQWVWHQGWRDSSO\

DQLPDWLRQWHFKQLTXHVIRUSXUHO\DHVWKHWLFUHDVRQV µLWORRNVJRRGZKHQWKHZRUGVIDGHRXW¶ RUWR

UHIOHFWWKHPHDQLQJRIDZRUG DVZKHQGDQFHGDQFHVRUEODVWEODVWVDFURVVWKHVWDJH ´ S 




(YHQLQWKHIDFHRI6RUDSXUH¶VVWURQJDSSURDFKWKHVHFRPPHQWVVXJJHVWWKDWZKLOHVWXGHQWVDUH

OHDUQLQJKRZWRSOD\ZLWKFRQYHQWLRQVLWPD\QRWEHEHFDXVHWKH\XQGHUVWDQGWKHFRQQHFWLRQV

EHWZHHQDQLPDWLRQUKHWRULFDQGYLVXDOGHVLJQ

0\JRDOLQUHIHUHQFLQJWKHVHWKUHHSHGDJRJLFDODFFRXQWVLVWRLOOXVWUDWHKRZWKHFKRLFH

EHWZHHQSURIHVVLRQDODQGFRQVXPHUWRROVIRUDQLPDWLRQRIWHQGLVWUDFWVIURPWKHODUJHUTXHVWLRQ

ZKDWGRHVDQLPDWLRQGRDQGKRZGRZHPDNHWKDWUKHWRULFDOZRUNYLVLEOHERWKWRVWXGHQWVDQGWR

HDFKRWKHU":KLOHWKHVHTXHVWLRQVPD\VHHPVLPSOHWKHSHGDJRJLFDOVWUXJJOHVDERYHLOOXVWUDWH

WKHSRWHQWLDOREVWDFOHVRIDVVXPLQJWKDWWKHDQDO\WLFDOYRFDEXODU\DQGSHGDJRJLFDOVWUDWHJLHVWKDW

ZHUHO\RQIRUGRFXPHQWGHVLJQRUYLGHRSURGXFWLRQFDQVHDPOHVVO\WUDQVIHUWRWKHDQDO\VLVDQG

GHVLJQRIDQLPDWLRQ$WEHVWWKLVDSSURDFKPD\LQIRUPVWXGHQWV¶XQGHUVWDQGLQJRI

PXOWLPRGDOLW\EXWOHDYHWKHPZRQGHULQJZK\WKH\KDGWRJRWKURXJKDOOWKHWURXEOHRIOHDUQLQJ

DQLPDWLRQ,IWKHJRDOLVWRHQFRXUDJHYLVXDOOLWHUDF\ZK\QRWVLPSO\IRFXVDXQLWRQGRFXPHQW

GHVLJQ",IWKHJRDOLVWRZRUNEURDGO\ZLWKPXOWLPRGDOJHQUHVZK\QRWGHYHORSDXQLWIRFXVHGRQ

YLGHRSURGXFWLRQ":LWKRXWDFOHDUHUDUJXPHQWIRUWKH³UKHWRULFLW\´RIDQLPDWLRQ LHGHFLGLQJWR

XVHDQLPDWLRQLQWKLVZD\LQVWHDGRIWKDWZD\RUHYHQOHDYLQJDQLPDWLRQRXWHQWLUHO\ WKH

WHFKQRORJLFDOEXUGHQLVQRWZRUWKWKHSHGDJRJLFDOSD\RII

7REHVXUHWKHFDOOIRUUKHWRULFDOO\JURXQGHGGLVFXVVLRQVRIPXOWLPRGDOGHFLVLRQPDNLQJ

LVQRWQHZDQGH[WHQGVIDUEH\RQGVSHFLILFSUREOHPVDVVRFLDWHGZLWKDQLPDWLRQ$V%URRNV

 GLVSOD\VLQ³0RUHµ6HULRXVO\9LVLEOH¶5HDGLQJ´VFKRODUVLQUKHWRULFDQGFRPSRVLWLRQ

KDYHXQGHUVFRUHGGLVFRQQHFWLRQVEHWZHHQWKHEURDGFHOHEUDWLRQRIPXOWLPRGDOLW\DQGWKH

QHFHVVDU\VNLOOVIRUDQDO\]LQJGHVLJQLQJPXOWLPRGDODUWLIDFWV,QWKHLUFROODERUDWLYHZHEWH[W

³5HDGLQJ0XOWLPRGDO7H[WV´%DOODQG5LFH  DUJXHWKDWERWKVWXGHQWVDQGWHDFKHUVQHHGWR

OHDUQKRZWRFOHDUO\DUWLFXODWHWKHORJLFVRIYLVXDOGHVLJQ5LFHDVNV³&DQ\RXGLVFXVV ZHOO


VKRXOG\RXGLVFXVV LQGLYLGXDOHOHPHQWVRIDPHGLDWH[WDV\RXGRDWUDGLWLRQDOFRPSRVLWLRQ", G

VD\VXUHRIFRXUVH2WKHUZLVH\RX UHQRWSURYLGLQJ\RXUVWXGHQWVVSHFLILFFRPPHQWDU\,W VOLNH

VD\LQJ³$KKHFNJRRGMREZULWLQJWKLVSDSHU%´ ³5LFK¶V&RPPHQWDU\SDUD $V%DOO

GHPRQVWUDWHVLQDVHSDUDWHVHFWLRQRIWKHVDPHZHEWH[WWKLV³GLVFXVVLRQRILQGLYLGXDOHOHPHQWV´

LQYROYHVERWKWKHVWXGHQW¶VPHGLDFRPSRVLWLRQDVZHOODVVRPHIRUPRIUHIOHFWLYHGRFXPHQWLQ

ZKLFKWKHVWXGHQWDUWLFXODWHVZK\WKH\PDGHWKHGHVLJQFKRLFHVWKH\GLG

 ,QSURIHVVLRQDOZULWLQJSHGDJRJ\WKHVHNLQGVRIGLVFXVVLRQVDUHRIWHQJURXQGHGLQD

GHVFULSWLYHYRFDEXODU\DGRSWHGIURPGRFXPHQWGHVLJQSUDFWLWLRQHUV)RUH[DPSOHWKHFDWHJRULHV

RI*HVWDOWSV\FKRORJ\DUHSDUWLFXODUO\SRSXODU SUR[LPLW\VLPLODULW\FORVXUHHWF DVDUHWKH

&5$3SULQFLSOHV FRQWUDVWUHSHWLWLRQDOLJQPHQWSUR[LPLW\ IURP:LOOLDPV¶7KH1RQ

'HVLJQHU¶V'HVLJQ%RRN)RUW\SRJUDSK\PDQ\LQVWUXFWRUVZLOOJLYHDQLQWURGXFWRU\OHVVRQRQ

WKHGLIIHUHQFHEHWZHHQVHULIDQGVDQVVHULIW\SHIDFHV)RUFRORUWKHUHLVDGLVFXVVLRQRIFRORU

WKHRU\DORQJZLWKWKHWHUPLQRORJ\RIFRQWUDVWEULJKWQHVVDQGKXH7KHVHYRFDEXODULHVVHUYHDV

WKH³ZKDW´RIYLVXDOGHVLJQWKH\DOORZXVWRGHVFULEHKRZDFRPSRVLWLRQLVFRQVWUXFWHG,WLV

RQO\RQFHWKHVHFRPSRQHQWVFDQEHGHVFULEHGWKDWZHFDQEHJLQWRFRQQHFWWKHVHYLVXDOHOHPHQWV

WRSRWHQWLDOFRQWH[WVSXUSRVHVDQGDXGLHQFHVKLIWLQJIURPGHVFULSWLRQWRUKHWRULFDODQDO\VLV

7KLVLVQRWWRVD\WKHVHGHVLJQYRFDEXODULHVDUHQHXWUDORUDSROLWLFDO$V:\VRFNL  

PDNHVFOHDUWKHVHYRFDEXODULHVDUHRIWHQXVHGLQVHUYLFHRIYLVXDOHIILFLHQF\DQGVWDQGDUGL]DWLRQ

GLVDVVRFLDWLQJYLVXDOGHVLJQIURPSDUWLFXODUFXOWXUDOLGHRORJLFDODQGHPERGLHGFRQWH[WV)RU

H[DPSOHLWLVHDV\WRIUDPH:LOOLDPV¶IRXUSDUWVFKHPD FRQWUDVWUHSHWLWLRQDOLJQPHQWDQG

SUR[LPLW\ DVDPHWKRGIRUDXWRPDWLFDOO\UHQGHULQJGRFXPHQWVPRUH³SURIHVVLRQDORUJDQL]HG

XQLILHG´ZKLOHHVFKHZLQJKRZWKHVHTXDOLWLHVFKDQJHIURPRQHDXGLHQFHWRDQRWKHU S 


8OWLPDWHO\WKHVHLGHRORJLFDOXQGHUSLQQLQJVRQO\UDLVHWKHVWDNHVRIDSSURDFKLQJYLVXDOGHVLJQ

ZLWKDWWHQWLRQWRWKHGHVFULSWLYHYRFDEXODULHVLQYROYHG

7KHGLVMXQFWLRQEHWZHHQWKLVOLQHRIFRPSRVLWLRQVFKRODUVKLSDQGDQLPDWLRQWKHQLV

WZRIROG7KHILUVWDVZHFDQVHHIURP)RONDQG0RJXOOLVWHFKQRORJLFDO%RUURZLQJWHUPLQRORJ\

IURP'DQLHO$QGHUVRQ  ZKDWLVPLVVLQJDUHJHQXLQHO\³SURVXPHU´WRROVIRUDQLPDWLRQ±

WKDWLVWRROVWKDWEULGJHWKHJDSEHWZHHQSURIHVVLRQDODQGFRQVXPHUJUDGHGHVLJQVRIWZDUH

&RQVLGHULQJYLGHRSURGXFWLRQIRUH[DPSOHSURVXPHUWRROVOLNHL0RYLHDQG:LQGRZV0RYLH

0DNHUPDNHLW UHODWLYHO\ HDV\WRLPSRUWFXWDQGDUUDQJHYLGHRIRRWDJHIROORZLQJDVLPLODU

FRPSRVLWLRQDOZRUNIORZDVRQHPLJKWHPSOR\ZLWKSURIHVVLRQDOVRIWZDUH*LYHQWKHDEVHQFHRI

SURVXPHUDQLPDWLRQVRIWZDUHLWFDQEHKDUGIRULQVWUXFWRUVWRLQFRUSRUDWHDQLPDWHGPXOWLPHGLD

SURMHFWVZLWKWKHVDPHHDVHDVDIRRWDJHEDVHGYLGHRRUGHVLJQLQJSULQWPDWHULDOV

%XWWKHVHFRQGPRUHFKDOOHQJLQJGLVMXQFWLRQLVWKHODFNRIWHUPLQRORJ\IRUGLVFXVVLQJ

DQLPDWLRQZLWKWKHVDPHSUHFLVLRQDQGULJRUDVZHGLVFXVVRWKHUYLVXDOHOHPHQWVOLNHW\SRJUDSK\

RUFRORU7KLVUHTXLUHVGHVFULSWLYHODQJXDJH±DZD\WRUHVSRQGWRWKHTXHVWLRQ³ZKDWGR\RX

VHH"´ZLWKUHVSHFWWRDQLPDWLRQ,WDOVRUHTXLUHVVRPHEDFNJURXQGLQWKHSRWHQWLDOXVHVRIWKHVH

PRYHPHQWVVRWKDWZHFDQQRWRQO\GLVWLQJXLVKEHWZHHQGLIIHUHQWW\SHVRIDQLPDWLRQEXW

FRQVLGHUWKHHIIHFWLYHQHVVRIGLIIHUHQWDSSURDFKHVIRUGLIIHUHQWVLWXDWLRQV%\FODULI\LQJWKHVHWZR



,WLVZRUWKQRWLQJWKDWWKHSUREOHPKHUHLVQRWVROYHGZLWKWKHODQJXDJHRIFLQHPDWRJUDSK\7UXHDQLPDWHGILOPV±
E\YLUWXHRIEHLQJILOPV±UHTXLUHDWWHQWLRQWRVKRWVHOHFWLRQFDPHUDDQJOHVDQGDOLWDQ\RIRWKHUGHVLJQGHFLVLRQV
WKDWOLHVTXDUHO\LQWKHWHUULWRU\RIFLQHPDWLFDUWV+RZHYHUWKLVWHUPLQRORJ\UHPDLQVLQDGHTXDWHRQWZRDFFRXQWV
)LUVWDV,VKRZLQWKLVFKDSWHUDSSOLFDWLRQVIRUDQLPDWLRQH[SDQGEH\RQGDQLPDWHGILOPVUHTXLULQJDQDSSURDFKWR
GHVLJQWKDWLVOHVVWLHGWRDSDUWLFXODUPHGLXP6HFRQGWKHWRROVRIFLQHPDWRJUDSK\RIWHQSODFHDSULPDU\HPSKDVLV
RQWKHSODFHPHQWDQGDQJOHRIWKHFDPHUDUDWKHUWKDQWKHDFWLYLW\RIREMHFWVDQGDFWRUVZLWKLQWKHIUDPH WKRXJK
WKHUHDUHH[FHSWLRQV $QLPDWLRQRQWKHRWKHUKDQGSODFHVSULPDU\HPSKDVLVRQWKHGHVLJQRIZKDWLVZLWKLQWKH
IUDPHEHDULQJPRUHVLPLODULW\WRWKHGLVFLSOLQHVRIDFWLQJGDQFHRUVSHFLDOHIIHFWVWKDQWKDWRIFLQHPDWRJUDSK\
$QGZKLOHWKHUHDUHLQWHUHVWLQJFRQQHFWLRQVWREHPDGHEHWZHHQDQLPDWLRQDQGWKHVHRWKHUGLVFLSOLQHVWKHVH
FRQQHFWLRQVOLHEH\RQGWKHVFRSHRIWKLVSURMHFW



DVSHFWVRIDQLPDWLRQZHFDQOHDUQKRZWREHWWHUDQDO\]HWKHUKHWRULFRIDQLPDWLRQDVZHOODV

KRZZHFDQEHWWHUFRQQHFWDQLPDWLRQWRWKHVFKRODUVKLSLQYLVXDOUKHWRULF

)URP$QLPDWLRQWR0RWLRQ'HVLJQ

:KLOHWKHODFNRIUHDG\SHGDJRJLFDODSSOLFDWLRQVPD\KDYHFRROHGGLVFXVVLRQVRI

DQLPDWLRQLQYLVXDORUGLJLWDOUKHWRULFWKHSURIHVVLRQDOXVHRIDQLPDWLRQKDVJURZQPRUHVXEWOH

PRUHVRSKLVWLFDWHGDQGPRUHFRPPRQ3DUWRIWKLVJURZWKVWHPVIURPDQHVFDODWLQJHPSKDVLVRQ

YLGHRJHQHUDOO\RQVRFLDOPHGLDSDUWLFXODUO\RQ)DFHERRNZKHUHYLGHRFRQWHQWLV

DOJRULWKPLFDOO\SURPRWHGRYHUSODLQWH[W ,QJUDP 5HVSRQGLQJWRWKLVHOHYDWHGSODWIRUP

PDUNHWLQJILUPVQHZVVLWHVDQGDPDWHXUFRQWHQWFUHDWRUVUDFHWRQRWRQO\SURGXFHPRUHFRQWHQW

EXWWRSURGXFHYLGHRVWKDWFDQFXWWKURXJKWKHJURZLQJJOXWRIDYDLODEOHYLGHRVWUHDPV

$QLPDWLRQLWWXUQVRXWDWWHQGVWRERWKSUREOHPV,QDQDQLPDWHGYLGHRIDFWRUVOLNHOLJKWLQJ

FDVWLQJDQGVFHQHU\WDNHWLPHWRLQLWLDOO\GHYHORSUHTXLULQJGHVLJQHUVWRHLWKHUPDQLSXODWHVWRFN

YLVXDOVRULQGLYLGXDOO\GHVLJQWKHVHIHDWXUHVIURPVFUDWFK%XWRQFHWKHVHIRXQGDWLRQDOJUDSKLFV

DUHGHYHORSHGDQLPDWHGYLVXDOVFDQEHUHYLVHGZLWKPRUHVSHHGDQGSUHFLVLRQWKDQWKHLUILOPHG

HTXLYDOHQWV$SUREOHPZLWKDVSHDNHU¶VRXWILWIRUH[DPSOHLVTXLWHGLIILFXOWWRFKDQJHODWHLQ

WKHSURGXFWLRQSURFHVVRIDOLYHDFWLRQYLGHREXWLVLQFUHGLEO\HDV\WRFKDQJHZKHQZRUNLQJZLWK

DQLPDWLRQ7KHVHTXLFNUHYLVLRQVDOVRPDNHLWHDVLHUWRDGDSWYLGHRFRQWHQWIRUGLIIHUHQW

SODWIRUPVDQGGLIIHUHQWDXGLHQFHV

7KHJURZWKRIDQLPDWHGPHGLDKRZHYHULVERWKPRUHSHUYDVLYHDQGOHVVYLVLEOHWKDQWKH

H[SDQVLRQRIDQLPDWHGYLGHRDORQH7RGD\IXHOHGE\WKHH[SRQHQWLDOLQFUHDVHLQWKHSRZHURI

FRPSXWHUSURFHVVRUVQHDUO\DOOVFUHHQEDVHGPHGLDPDNHVXVHRIDQLPDWLRQ3KRQHVWRWDNHRQH

H[DPSOHLQFRUSRUDWHGR]HQVRIVXEWOHDQLPDWLRQVWRSURYLGHVSDWLDOFXHVGLUHFWDWWHQWLRQDQGWR


FODULI\WKHXVHU¶VDFWLRQV6RPHRIWKHVHDUHPRUHGLUHFWVXFKDVWKHFLUFXODUVSLQQLQJLFRQVWKDW

LQGLFDWHWKHSKRQHLVSURFHVVLQJDUHTXHVW2WKHUDQLPDWLRQVOLNHWKHVXEWOHVSULQJLQHVVRIDQ

DSSOLFDWLRQZLQGRZH[SDQGLQJWRIXOOVFUHHQDUHPHDQWWRZRUNLQYLVLEO\LQWKHEDFNJURXQGRI

LQWHUIDFH7KHVHDQLPDWLRQVUDUHO\WDNHWKHIRUPRIDIXOOIOHGJHGDQLPDWHGFKDUDFWHUFKHHNLO\

ZDONLQJWKHXVHUWKURXJKDVHWRIWDVNV5DWKHUWKH\DUHEXLOWLQWRWKHYLVXDOFRPSRQHQWVRIWKH

LQWHUIDFHVWKHPVHOYHVLQWHJUDWLQJWKHVKLIWVMLJJOHVDQGERXQFHVLQWRWKHZLQGRZVEXWWRQVWH[W

ER[HVDQGRWKHURQVFUHHQREMHFWV

(YHQLQWHUYLHZEDVHG³WDONLQJKHDG´YLGHRVWUDGLWLRQDOO\ODFNLQJLQJUDSKLFGHVLJQ

HOHPHQWVKDYHDVVLPLODWHGDQLPDWHGJUDSKLFVWRHVWDEOLVKFRQVLVWHQWEUDQGLQJDQGPDLQWDLQDQ

DSSURSULDWHYLVXDOWRQH:KHUHDVILYH\HDUVDJRDQRUJDQL]DWLRQPLJKWGHYHORSDVWDWLFORJR

LPDJHWREHVKRZQDWWKHVWDUWRUWKHHQGRIDYLGHRPDQ\RUJDQL]DWLRQVGHYHORSDQDQLPDWHG

ORJRVWLQJWKDWSURPRWHVWKHLULQGLYLGXDOHWKRV:KHWKHULWLVDWLWOHRUDORZHUWKLUGRUD

WUDQVLWLRQIURPRQHVHTXHQFHWRWKHQH[WLWLVLQFUHDVLQJO\UDUHWRILQGYLGHRVZLWKRXWVRPHIRUP

RIDQLPDWLRQ

7RGLVWLQJXLVKWKHLUZRUNIURPFKDUDFWHUDQLPDWRUVDW'LVQH\DQG3L[DUSURIHVVLRQDOV

ZRUNLQJRQWKHVHW\SHVRIVXEWOHQHDULQYLVLEOHDQLPDWLRQVFRPPRQO\UHIHUWRWKHLUUROHVDV

PRWLRQGHVLJQHUVUDWKHUWKDQDVDQLPDWRUV,QSDUWWKLVVHSDUDWHODEHOVLJQDOVDVSHFLDOW\ZLWKLQ

WKHODUJHUGLVFLSOLQHRIDQLPDWLRQ-XVWDVDSRHWLVDNLQGRIZULWHURUDSDLQWHULVDNLQGRIDUWLVW

DPRWLRQGHVLJQHULVLQPDQ\UHVSHFWVDNLQGRIDQLPDWRUWKDWZRUNVDFURVVDUDQJHRIJHQUHVDQG

SODWIRUPV$VRQHPRWLRQGHVLJQHUH[SODLQV

³-XVWDVWKHFDUGLDFHOHFWURSK\VLRORJLVWLVDEVROXWHO\DNLQGRIGRFWRUDPRWLRQGHVLJQHU

LVDNLQGRIDQLPDWRU:HHDFKZRUNWREULQJOLIHWRRXUVXEMHFWVEXWZKHUHDVDQDQLPDWRU



$ORZHUWKLUGLVDJUDSKLFFRPPRQO\XVHGLQFRQMXQFWLRQZLWKLQWHUYLHZIRRWDJHWKDWDSSHDUVLQWKHORZHUWKLUGRI
WKHVFUHHQDQGIHDWXUHVWKHVSHDNHU¶VQDPHDORQJZLWKRWKHULGHQWLI\LQJLQIRUPDWLRQ


UHOLHVRQFKDUDFWHUDQGQDUUDWLYHWRFRPPXQLFDWHLGHDVDPRWLRQGHVLJQHU IROORZLQJLQ

WKHWUDGLWLRQVRI0RGHUQLVWGHVLJQ VHHNVWRUHGXFHWKDWFRPPXQLFDWLRQWRPRUHSULPLWLYH

IRUPDOHOHPHQWVFRORUVSDFHDQGW\SRJUDSK\´ )O\QQSDUD 

%XWDVZHFDQVHHIURPWKLVGHVLJQHU¶VGHVFULSWLRQWKHLQYRFDWLRQRI³GHVLJQ´LQPRWLRQ

GHVLJQVLJQDOVDGHHSHUVKLIWWKDQVLPSO\WKHHPHUJHQFHRIDQHZJHQUH5HKHDUVLQJWKH

GLVWLQFWLRQEHWZHHQDUWDQGJUDSKLFGHVLJQPRWLRQGHVLJQHUVRIWHQGHILQHWKHLUZRUNLQ

IXQFWLRQDOWHUPVUDWKHUWKDQH[SUHVVLYHRUDHVWKHWLFRQHV7KLVLVEHFDXVHLQFKDUDFWHUGULYHQ

DQLPDWLRQWKHIXQFWLRQLVDJLYHQLWLVEXULHGLQWKHQRWLRQWKDWWKHDQLPDWRU¶VUROHLVWR³EULQJ

FKDUDFWHUVWROLIH´,QWXUQWKHGHFLVLRQVRIDQDQLPDWRURIWHQPLPLFWKHGHFLVLRQVRIDQDFWRU

+RZGR,PDNHWKLVPRYHPHQWEHOLHYDEOH"+RZGRWKHERG\PRYHPHQWDQGIDFLDOIHDWXUHV

PLPLF RUDVLVRIWHQWKHFDVHH[DJJHUDWH WKHZD\VRPHRQHPLJKWH[SUHVVWKHLUHPRWLRQVLQWKH

UHDOZRUOG"6LQFHPRWLRQGHVLJQHUVRIWHQZRUNZLWKJHRPHWULFVKDSHVW\SRJUDSK\DQG

LQWHUIDFHVWKHJRDORIEULQJLQJYLVXDOHOHPHQWV³WROLIH´GRHVQRWSURYLGHWKHVDPHNLQGRI

DXWRPDWLFMXVWLILFDWLRQWKDWLWGRHVIRUWUDGLWLRQDODQLPDWRUV,QVWHDGWKHEXUGHQRIMXVWLILFDWLRQ

IDOOVRQPRWLRQGHVLJQHUVWKHPVHOYHV:K\VKRXOGWKHLFRQVERXQFHRQVFUHHQUDWKHUWKDQVLPSO\

DSSHDUZLWKWKHUHVWRIWKHHOHPHQWVLQWKHLQWHUIDFH":K\VKRXOGDORJRIDGHVORZO\LQDQGRXW

LQVWHDGRIEOLQNLQJRQDQGRIIWKHVFUHHQ",QGHHGZK\XVHDQLPDWLRQDWDOO":KLOHWKHDYHUDJH

FKDUDFWHUDQLPDWRUPD\ILQGWKHVHTXHVWLRQVWREHRYHUO\P\RSLFWKH\DUHQHFHVVDU\IRUWKH

DYHUDJHPRWLRQGHVLJQHU

7KLVLVQRWWRVD\WKDWPRWLRQGHVLJQHUVVKXQGLVFXVVLRQVRI³OLYHOLQHVV´LQWKHLUGHVLJQV

QRUWKDWFKDUDFWHUDQLPDWRUVVWUXJJOHWRH[SODLQWKHLUGHVLJQGHFLVLRQV0\SRLQWKHUHLVWKDWWKH

H[SDQVLRQRIDQLPDWLRQEH\RQGWKHPRYHPHQWRIDQLPDWHGFKDUDFWHUVIRUFHVPRWLRQGHVLJQHUVWR

GHYHORSQHZYRFDEXODULHVIRUGHVFULELQJDQLPDWLRQDQGWRUHYLVLWWKHTXHVWLRQRIZK\DQLPDWLRQ


LVYDOXDEOHWREHJLQZLWK7KHSURGXFWRIWKHVHGLVFXVVLRQVVROLGLILHGLQWRGHVLJQSULQFLSOHV

JXLGHOLQHVDQGEHVWSUDFWLFHVQRWRQO\QXGJHVPRWLRQGHVLJQHYHUFORVHUWRJUDSKLFGHVLJQEXW

DOVRHVWDEOLVKHVPRUHVWDEOHVHWRIFRQQHFWLRQVEHWZHHQDQLPDWLRQDQGSURIHVVLRQDO

FRPPXQLFDWLRQ,IZHDUHWRJXLGHVWXGHQWVWKURXJKWKHDQDO\VLVDQGRUSURGXFWLRQRIPXOWLPHGLD

DUWLIDFWV±PDQ\IHDWXULQJDQLPDWHGPRYHPHQWRIRQHIRUPRUDQRWKHU±WKHQZHPXVWZRUNWR

PDNHWKHVHFRQQHFWLRQVYLVLEOHWRRXUVWXGHQWV,DUJXHWKDWPRWLRQGHVLJQUDWKHUWKDQDQLPDWLRQ

ZULWODUJHRIIHUVDEHWWHUWHUPLQRORJ\IRUWKLVNLQGRIZRUN

9LVXDO5KHWRULFLQ3URIHVVLRQDODQG7HFKQLFDO&RPPXQLFDWLRQ

$VDJUHDWHUQXPEHURIVWXGHQWVLQWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQWDNHMREV

LQVRFLDOPHGLDDQGFRQWHQWGHYHORSPHQWLWLVLQFUHDVLQJO\OLNHO\WKDWWKH\ZLOOEHDVNHGWR

GHVLJQGLVFXVVDQGHYDOXDWHPRWLRQJUDSKLFV:KHWKHULQWKHIRUPRIDQH[SODLQHUYLGHRDQ

LQIRJUDSKLFRUHYHQDVLPSOH3UH]LWKHSUHVHQFHRIPRWLRQULFKFRPPXQLFDWLRQVSUHVVXUHV

WHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQSURJUDPVWREHWWHUSUHSDUHJUDGXDWHVLQWKLVDUHD,

EXLOGDSSURDFKHVWRWKLVHPHUJLQJQHHGWKDWZRUNWKURXJKVRPHWHQVLRQVLQYLVXDOUKHWRULFDVD

PHDQVRIEXLOGLQJDUKHWRULFDOO\EDVHGUHVSRQVH

9LVXDOUKHWRULFILJXUHVSURPLQHQWO\LQWKHOLWHUDWXUHRIWHFKQLFDODQGSURIHVVLRQDO

FRPPXQLFDWLRQLQODUJHSDUWEHFDXVHWUDGLWLRQDOJHQUHVLQWHFKQLFDODQGSURIHVVLRQDO

FRPPXQLFDWLRQ²VXFKDVPDQXDOVSUHVHQWDWLRQVGDWDGLVSOD\VDQGLQVWUXFWLRQV²GHSHQGRQ

YLVXDOFXHVWRFRQYH\LQIRUPDWLRQ:KHUHWKHGHVLJQRIWKHVHYLVXDOVPD\KDYHRQFHEHHQWKH

UHVSRQVLELOLW\RIJUDSKLFGHVLJQHUVRUDUWLVWVVXUYH\VRIMREDGYHUWLVHPHQWV /DQLHU 

PDQDJHUV 5DLQH\7XUQHU 'D\WRQ DVZHOODVWHFKQLFDODQGSURIHVVLRQDO

FRPPXQLFDWRUVWKHPVHOYHV =LPPHUPDQ'D\WRQ %HUQKDUG%O\WKH/DXHU 




&XUUDQ VXJJHVWWKDWYLVXDOFRPPXQLFDWLRQQRZSOD\VDQLQFUHDVLQJO\FHQWUDOUROHLQWKH

GD\WRGD\ZRUNRIWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWRUV0RUHVSHFLILFDOO\%O\WKH/DXHU

DQG&XUUDQ¶VVWXG\RIUHFHQWJUDGXDWHVIURPWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQ

SURJUDPVVKRZVWKDWWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWRUVQRWRQO\FRPSRVHDQXPEHURI

YLVXDOJHQUHV LQFOXGLQJLQIRJUDSKLFVZHEVLWHVDQGYLGHRV EXWWKDWWKH\GHSHQGRQDZLGH

DUUD\RIYLVXDOWRROVWRFUHDWHWKHVHJHQUHVIURPEDVLFZRUGSURFHVVLQJVRIWZDUHWRVSHFLDOL]HG

LPDJHHGLWLQJWRROVVXFKDV$GREH3KRWRVKRS S 

+RZHYHUZKLOHPDQ\SUDFWLWLRQHUVDQGVFKRODUVKDYHGLVFXVVHGYLVXDOUKHWRULFDVDFRUH

LVVXHLQPXOWLPHGLDSURGXFWLRQ $PDUH 0DQQLQJ-RKQVRQ6KHHKDQ %DHKU

6XOOLYDQ-RQHV(LROD 6HOEHU.RVWHOQLFN +DVVHWW WKHUHUHPDLQ

PDMRUGLVDJUHHPHQWVLQWKHILHOGDERXWKRZWKHYLVXDOVKRXOGEHVWXGLHGDQGWDXJKWLQWHFKQLFDO

DQGSURIHVVLRQDOFRPPXQLFDWLRQ2QHVXFKLVVXHVWHPVIURPWKHFRJQLWLYHWKHRULHVRISHUFHSWLRQ

WRIUDPHYLVXDOUKHWRULFDVDVHWRIDXWRPDWLFUHVSRQVHVWRVHPLRWLFVWLPXOL3RSXODUL]HGLQ

WKHRULHVRIJHVWDOWSV\FKRORJ\DQGLQWKHZRUNVRI(GZDUG7XIWHWKHFRJQLWLYHDSSURDFKVWULYHV

HVWDEOLVKXQLYHUVDOJXLGHOLQHVIRUYLVXDOGHVLJQEDVHGRQWKHQRWLRQWKDWWKHEUDLQQDWXUDOO\

DVVLJQVPHDQLQJWRYLVXDOSDWWHUQVVXFKDVFRQWUDVWSUR[LPLW\DQGDOLJQPHQW$UHDGHUPD\

VWUXJJOHWRQDYLJDWHDODUJHEORFNRIFHQWHUDOLJQHGWH[WIRUH[DPSOHEHFDXVHWKHMDJJHGHGJHRI

WKHWH[WIRUFHVWKHUHDGHUWRUHGLVFRYHUWKHVWDUWLQJSRLQWIRUHDFKQHZOLQHRIWH[W

%XWZKLOHWKLVPRGHOSURYLGHVDQLQFUHDVLQJO\UDWLRQDOV\VWHPDWLFDSSURDFKWRYLVXDO

GHVLJQUHVHDUFKHUVLQWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQKDYHFULWLTXHGWKHSHUFHSWXDO

DSSURDFKDUJXLQJWKDWLWREVFXUHVWKHLQGLYLGXDOLGHRORJLFDODQGFRQWH[WXDOIDFWRUVWKDWVKDSH

YLVXDOUKHWRULF,QHIIHFWLWUHGXFHVWKHSXUSRVHRIYLVXDOUKHWRULFWRWKHFUHDWLRQRIHIILFLHQW

SUHGLFWDEOHUHDGLQJSDWWHUQVDQGUHGXFHVWKHDXGLHQFHWRDGLVHPERGLHGKXPDQEUDLQ 0RRUH 


)LW]S WKDWSHUFHLYHVUDWKHUWKDQLQWHUSUHWVYLVXDOSKHQRPHQD 6DOLQDVS 

,QWXUQVFKRODUVLQWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQKDYHRIWHQFRXQWHUHGWKH

SHUFHSWXDODSSURDFKE\H[SRVLQJWKHLGHRORJ\RIVHHPLQJO\QDWXUDORULQWXLWLYHGHVLJQVDQGE\

RIIHULQJDOWHUQDWLYHFULWLFDODSSURDFKHVWRWHDFKLQJYLVXDOUKHWRULF %DUWRQ %DUWRQ6HOIH

6HOIH6DOLQDV%UDVVHXU:\VRFNL%UXPEHUJHU +RZHYHUWKH

FHQWUDOJRDOVRIWKHVHFULWLFDOVWXGLHVLVQRWWRVXSSODQWRXUFRJQLWLYHSHUFHSWLRQVRIWKHYLVXDO²

WRVRPHKRZUHSODFHRXULQWXLWLYHUHDFWLRQVZLWKFULWLFDOPHWDFRJQLWLYHDZDUHQHVV7KHUHZLOO

DOZD\VEHVRPHIRUPRIQHDUO\DXWRPDWLFUHDFWLRQWRYLVXDOVWLPXOLQRPDWWHUKRZPXFKWUDLQLQJ

ZHUHFHLYH5DWKHUWKHJRDORIFULWLFDOYLVXDOUKHWRULFLVWRVLWXDWHSHUFHSWLRQZLWKLQVRFLDO

FXOWXUDODQGSHUVRQDOH[SHULHQFHVDQGLQVRGRLQJHVWDEOLVKGHVLJQSUDFWLFHVWKDWFDQUHFRJQL]H

DQGDGDSWWRWKRVHH[SHULHQFHV -RQHVS 

,RXWOLQHWKLVGLYLVLRQEHWZHHQSHUFHSWXDODQGFULWLFDODSSURDFKHVWRYLVXDOUKHWRULF

EHFDXVHERWKSOD\DNH\UROHLQWKLVSURMHFW$V,RXWOLQHLQFKDSWHUVPDQ\RIWKHDYDLODEOH

JXLGHOLQHVIRUPRWLRQGHVLJQGUDZRQWKHVDPHWKHPHVRIGLVHPERGLHGSHUFHSWLRQWKDWKDYHORQJ

EHHQFULWLTXHGE\VFKRODUVLQYLVXDOUKHWRULF+HQFHLQ&KDSWHU,RXWOLQHWKHOLPLWDWLRQVRID

SHUFHSWXDOFRJQLWLYHDSSURDFKWRPRWLRQGHVLJQFRXQWHULQJZLWKIRXUFRQFHSWVLQYLVXDODQG

GLJLWDOUKHWRULFIRUUHIUDPLQJPRWLRQGHVLJQDVDUKHWRULFDODUW

 $QRWKHUPDMRULVVXHLQWKHUHVHDUFKDQGWHDFKLQJRIYLVXDOUKHWRULFLQWHFKQLFDODQG

SURIHVVLRQDOFRPPXQLFDWLRQFHQWHUVRQWKHTXHVWLRQRIWHFKQRORJ\6SHFLILFDOO\JLYHQWKDW

VWXGHQWVDUHDVNHGQRWRQO\WRDQDO\]HYLVXDOPDWHULDOVEXWWRSURGXFHYLVXDOVWKHPVHOYHVVKRXOG

WHDFKHUVGHYRWHFODVVWLPHWROHDUQLQJVSHFLILFSURJUDPVIRUYLVXDOGHVLJQ"6RPHKDYHDUJXHG

DJDLQVWWKHSUDFWLFHRIWHDFKLQJVSHFLILFWRROVRQWKHJURXQGVWKDWDQ\WHFKQLFDOFRPPXQLFDWRU

FDQ³OHDUQWKHNH\IHDWXUHVRIDQHZWRROXVXDOO\ZLWKRXWPXFKIRUPDOWUDLQLQJLQQRPRUHWKDQ


DIHZGD\V´ +DUWS 2WKHUVZRUU\WKDWWHDFKLQJVSHFLILFWRROVFRQWULEXWHVWRQHJDWLYH

SHUFHSWLRQRIWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQDVDMREVNLOOVSURJUDPUDWKHUWKDQDQ

DUHDRIDFDGHPLFLQTXLU\ %UXPEHUJHU/DXHU 1RUWKFXWS 

'HVSLWHWKHVHUHVHUYDWLRQVUHFHQWVWXGLHVKDYHGHIHQGHGWKHSUDFWLFHRIXVLQJFODVVWLPH

WRWUDLQVWXGHQWVRQVSHFLILFSURJUDPVFLWLQJWKHVWURQJWLHVEHWZHHQYLVXDODQGWHFKQRORJLFDO

OLWHUDF\%UXPEHUJHU/DXHUDQG1RUWKFXW¶V³7HFKQRORJLFDO/LWHUDF\LQWKH9LVXDO

&RPPXQLFDWLRQ&ODVVURRP´PDNHVDVWURQJFDVHLQWKLVUHJDUGDVWKHDXWKRUVLOOXVWUDWHWKDW

VWXGHQWVUDUHO\SRVVHVVWKHWHFKQRORJLFDOOLWHUDFLHVWRZRUNZLWKLPDJHPDQLSXODWLRQWRROVRU

SURGXFHYLVXDOPDWHULDOVZKHQWKH\HQWHUWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQFRXUVHV S

 7KHDXWKRUVDGPLWWKDWWKLVLVQRWDQHDV\WDVNDVPDQ\LQVWUXFWRUVPD\KDYHQHYHU

WDNHQFRXUVHZRUNRUPD\IHHORYHUZKHOPHGE\WKHVKLIWLQJWUHQGVLQ³QHFHVVDU\´SURJUDPVDQG

GHVLJQVNLOOV,QUHVSRQVHWRWKHVHGLVFLSOLQDU\DQ[LHWLHV%UXPEHUJHU/DXHUDQG1RUWKFXW

VXJJHVWGLYLGLQJWKHWHFKQRORJLFDODVSHFWVRIYLVXDOGHVLJQLQWRWKUHHW\SHVRINQRZOHGJH

IXQGDPHQWDOFRQFHSWVFRQWHPSRUDU\VNLOOVDQGLQWHOOHFWXDOFDSDELOLWLHV S 7DNHQWRJHWKHU

WKHVHWKUHHDVSHFWVRIWHFKQRORJLFDOOLWHUDF\DOORZVWXGHQWVWRJDLQWKHVRIWZDUHSURILFLHQFLHV

QHFHVVDU\IRUDGMXVWLQJWKHLUGHVLJQVWRGLIIHUHQWVLWXDWLRQVZKLOHHQVXULQJWKDWGHVLJQVDUHGULYHQ

OHVVE\WKHFDSDELOLWLHVRIWKHVRIWZDUHWKDQE\VWXGHQWVXQGHUVWDQGLQJRIGHVLJQFRQFHSWVDQG

YLVXDOUKHWRULF S 

%DVHGRQWKHDFFRXQWVRIRWKHULQVWUXFWRUVDVZHOODVP\RZQWHDFKLQJH[SHULHQFHLWLV

FOHDUWKDWWKHGLIILFXOWLHVJURXQGLQJDQLPDWLRQLQYLVXDOUKHWRULFLQWHFKQLFDODQGSURIHVVLRQDO

FRPPXQLFDWLRQDUHFRQQHFWHGWRWKLVWHQVLRQEHWZHHQDSSURDFKHVWRWHFKQRORJLFDOOLWHUDF\

)UDPLQJWKLVWHQVLRQLQ%UXPEHUJHU/DXHUDQG1RUWKFXW¶VWULSDUWLWHVFKHPDP\UHVHDUFKKHUH

GHPRQVWUDWHVWKDWDQLPDWLRQUHTXLUHVDPRUHGLYHUVHVHWRIIXQGDPHQWDOFRQFHSWVDQG


FRQWHPSRUDU\VNLOOVWKDQLPDJHPDQLSXODWLRQDORQH7KRXJK,GHVFULEHP\SHGDJRJLFDODSSURDFK

LQFKDSWHULWLVLPSRUWDQWWRQRWHHDUO\RQWKDWDQLPDWHGSURMHFWVRQO\LQFUHDVHWKHWHQVLRQ

EHWZHHQVRIWZDUHSURILFLHQF\DQGYLVXDOUKHWRULF0\DLPIRUWKLVSURMHFWLVQRWWRHOLPLQDWH

WKHVHWHQVLRQVEXWWRRXWOLQHDPHWKRGRIHDVLQJWKHP,ZRXOGQRWVXJJHVWWKDWDQLPDWLRQFDQEH

VHDPOHVVO\DVVLPLODWHGLQWRH[LVWLQJDSSURDFKHVWRYLVXDOUKHWRULFLQWHFKQLFDODQGSURIHVVLRQDO

FRPPXQLFDWLRQRUWKDWWKHIXQGDPHQWDOFRQFHSWVRIDQLPDWLRQVKRXOGWDNHSUHFHGHQWRYHURWKHU

GHVLJQIDFWRUV+RZHYHUJLYHQWKHVKLIWLQJUROHRIDQLPDWLRQIURPYLVXDOQRYHOW\WRDVWDQGDUG

IDFWRURIPXOWLPHGLDGHVLJQ,EHOLHYHLWLVQHFHVVDU\WRGHYHORSDFOHDUHUSLFWXUHRIERWKWKH

RSSRUWXQLWLHVDQGOLPLWDWLRQVRIDQLPDWLRQZLWKLQWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQ

7KHILQDOSRLQW,ZDQWWRPDNHDERXWWKHUHODWLRQVKLSEHWZHHQP\SURMHFWKHUHDQGWKH

ILHOGVRIWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQLVWKDWZKLOH,GHILQHDQLPDWLRQWKURXJKWKH

OHQVRIYLVXDOUKHWRULF,GRQRWEHOLHYHWKLVLVWKHRQO\XVHIXOOHQVIRUXQGHUVWDQGLQJWKHUKHWRULFDO

IXQFWLRQVRIDQLPDWLRQ)RUH[DPSOHVRPHZLOOOLNHO\UHFRJQL]HWKHKLVWRULFDOFRQQHFWLRQ

EHWZHHQWKHJUDPPDWLFDOV\VWHPVRIPRYHPHQWGLVFXVVHGLQFKDSWHUDQGWKHWD[RQRPLF

DSSURDFKHVWRJHVWXUHDQGERGLO\PRYHPHQWSURSRVHGGXULQJWKH%ULWLVKHORFXWLRQDU\PRYHPHQW

6SRHO 2WKHUVPD\ILQGPRUHFRQWHPSRUDU\FRQQHFWLRQVEHWZHHQDQLPDWLRQDQGWKH

HPERGLHGSODFHEDVHGHIIHFWVRIYLVXDOUKHWRULFVXFKDVZHPLJKWILQGE\IUDPLQJYLVXDOPRWLRQ

LQWHUPVRIZKDW3IOXJIHOGHUWHUPV³NLQHVWKHWLFUKHWRULF´  7KRXJK,RFFDVLRQDOO\FDOO

DWWHQWLRQWRWKHVHFRQQHFWLRQV HVSHFLDOO\LQWKHIUDPHZRUNGHYHORSHGLQFKDSWHU ,VWLOOIUDPH

DQLPDWLRQDVDQDVSHFWRIYLVXDOGHVLJQODUJHO\EHFDXVHWKLVLVWKHZD\LWLVPRVWRIWHQIUDPHGE\

PRWLRQGHVLJQHUVWKHPVHOYHV


7KURXJKWKLVZRUNZLWKNH\WHQVLRQV,ZRUNWREXLOGDUKHWRULFDOO\EDVHGDSSURDFKWR

PRWLRQJUDSKLFVWKDWKDVRIIHUVDQRSSRUWXQLW\WRDGGUHVVVRPHRIWKHWKHRUHWLFDODQGSUDFWLFDO

GLVFRQQHFWLRQVEHWZHHQDQLPDWLRQDQGWHFKQLFDOSURIHVVLRQDOFRPPXQLFDWLRQ

&KDSWHU2XWOLQH

7KLVGLVVHUWDWLRQHVWDEOLVKHVDIUDPHZRUNIRUJURXQGLQJWKHJURZLQJGLVFLSOLQHRIPRWLRQ

GHVLJQLQWKHWKHRULHVRIYLVXDOUKHWRULFLQSURIHVVLRQDODQGWHFKQLFDOFRPPXQLFDWLRQ,DUJXHWKDW

WKHVHFRQQHFWLRQVDUHQHFHVVDU\JLYHQWKHLQFUHDVLQJSXUYLHZRISURIHVVLRQDODQGWHFKQLFDO

FRPPXQLFDWLRQWRJHQUHVVXFKDVXVHULQWHUIDFHVYLGHRVDQGGDWDYLVXDOL]DWLRQV²DVDOOWKUHH

JHQUHVXVHPRWLRQWRFUHDWHDQGRUDFFHQWXDWHWKHLUYLVXDOVW\OH0\JRDOIRUGUDZLQJWKHVH

FRQQHFWLRQVLVQRWWRSRVLWLRQDQLPDWLRQDWWKHFHQWHURIYLVXDOUKHWRULFRUWRDUJXHWKDWDOO

LQVWUXFWRUVVKRXOGEXLOGDQLPDWHGSURMHFWVLQWRWKHLUV\OODEL5DWKHUP\JRDOLVWRIUDPH

DQLPDWLRQ YLDPRWLRQJUDSKLFV DVDVRPHWKLQJPRUHWKDQWKHFRQIOXHQFHRIYLGHRIUDPHVDQG

GUDZQLPDJHVDQGKHOSLQVWUXFWRUVDQGVFKRODUVWRUHFRJQL]HPRPHQWVZKHUHDQLPDWLRQSOD\VD

UROHLQWKHYLVXDOUKHWRULFRIPRGHUQPHGLD

7RWKLVHQGLQWKHVHFRQGFKDSWHU,WUDFHKRZWKHXVHRIDQLPDWLRQLQXVHULQWHUIDFHVKDV

JURZQIURPH[SHULPHQWDODQGDYDQWJDUGHURRWVWRDVWDQGDUGIHDWXUHLQPRGHUQXVHULQWHUIDFHV

%\FRPSDULQJWKHHDUO\WKHRUHWLFDOGHVLJQSULQFLSOHVWRWKHFXUUHQWVW\OHJXLGHOLQHVIRUWKUHH

PRELOHGHYHORSPHQWSODWIRUPV L268:3DQG0DWHULDO'HVLJQ ,DWWHPSWWRDQVZHUWZREDVLF

TXHVWLRQV)LUVWKRZFDQZHGHVFULEHGLIIHUHQFHVLQPRYHPHQWDQLPDWLRQLQDZD\WKDWDYRLGVD

UHVWULFWLYHWD[RQRP\RIDQLPDWLRQW\SHV"$QGVHFRQGKRZGRWKHVHJXLGHOLQHVDUWLFXODWHWKH

SRVLWLYHHIIHFWVRIPRWLRQEH\RQGLWVXVXDOFKDUDFWHUL]DWLRQDVWKHEHOOVDQGZKLVWOHVRIGHVLJQ"

,QWKHSURFHVV,LOOXVWUDWHKRZSURIHVVLRQDOZHEGHVLJQHUVDUHHQFRXUDJHGWRXVHDQLPDWLRQLQ


ZD\VWKDWH[WHQGEH\RQGVKHHUQRYHOW\EXWZKLFKUHPDLQREVFXUHGE\JHQHULFDSSHDOVWR

UHDOLVP,QWXUQZKLOHWKHFXUUHQWGHVLJQJXLGHOLQHVSURYLGHNH\LQVLJKWVLQWRWKHWHUPLQRORJ\

DQGJRDOVRIPRWLRQGHVLJQ,VHHYDOXHLQUHIUDPLQJWKHVHWKUHDGVLQOHVVSRVLWLYLVWLFWHUPV

%XLOGLQJRQWKHWKHPHVGLVFXVVHGLQFXUUHQWSURIHVVLRQDOJXLGHOLQHV,EHJLQFKDSWHUE\

FULWLTXLQJWKHSHUVLVWHQWMXVWLILFDWLRQRIDQLPDWLRQDVDVHDUFKIRU³QDWXUDO´RU³DXWKHQWLF´

PRYHPHQW7KRXJKWKHPHDQLQJRIDQLPDWHGPRYHPHQWLVKHDYLO\DVVRFLDWHGZLWKRXUPDWHULDO

HPERGLHGLQWHUDFWLRQVZLWKWKHZRUOG,DUJXHWKDWWKHODQJXDJHRIQDWXUDOPRYHPHQWIODWWHQV

WKHVHDVVRFLDWLRQVLQWRDXQLYHUVDOL]LQJJUDPPDURIPRYHPHQW,QUHVSRQVH,GLVFXVVIRXUWRSLFV

IRUIUDPLQJDQLPDWLRQUKHWRULFDOO\ZKLFKLVWRVD\UHVSRQVLYHWRWKHFRQVWUDLQWVRIDUKHWRULFDO

VLWXDWLRQSHUVRQDOLW\FKRUHRJUDSK\DQGSUHVHQFH,HVWDEOLVKHDFKRIWKHVHWRSLFVE\GUDZLQJ

IURPDPL[WXUHRIWKHSUDFWLWLRQHUWHUPLQRORJ\HVWDEOLVKHGLQFKDSWHUDQGFXUUHQWVWXGLHVLQ

WHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQ,QFRQWUDVWWRWKHXQLYHUVDOL]LQJIXQFWLRQRIQDWXUDO

PRWLRQ,VKRZKRZWKHVHSURSHUWLHVORFDWHDQLPDWLRQDVUKHWRULFDOSUDFWLFHIRUUHVSRQGLQJWR

VSHFLILFGHVLJQSUREOHPV7RZDUGWKHHQGRIWKHFKDSWHU,VKRZKRZWKLVUHIUDPHG

XQGHUVWDQGLQJRIDQLPDWLRQLVHVSHFLDOO\YLWDOFRQVLGHULQJFXUUHQWGLVFXVVLRQVRIDFFHVVLEOH

GHVLJQLQFRPSXWHUVDQGZULWLQJ

,QWKHIRXUWKDQGILQDOFKDSWHU,GLVFXVVWKHSHGDJRJLFDOSUDFWLFHVWKDWKDYHEHHQXVHIXO

IRUZRUNLQJRQPRWLRQGHVLJQSURMHFWVLQP\RZQFODVVURRP'UDZLQJIURPUHSHDWHGDWWHPSWVWR

WHDFKPRWLRQGHVLJQSURMHFWV,GHVFULEHWKHSHGDJRJLFDOKXUGOHVIRULQFRUSRUDWLQJDQLPDWLRQDVD

IDFHWRIPXOWLPHGLDSURGXFWLRQLQFOXGLQJWKRVHWKDWH[WHQGEH\RQGRXUYRFDEXODULHVIRUYLVXDO

GHVFULSWLRQDQGDQDO\VLV7RFRXQWHUWKHVHLVVXHV,RIIHUWKUHHSHGDJRJLFDOSUDFWLFHVIRU

FRQQHFWLQJPRWLRQGHVLJQWRWKHW\SHVRIPXOWLPRGDOSURMHFWVWKDWDUHDVVLJQHGLQWHFKQLFDODQG


SURIHVVLRQDOFRPPXQLFDWLRQ,FORVHWKLVFKDSWHUE\UHLWHUDWLQJWKHLPSRUWDQFHRIPRWLRQGHVLJQ

DVDFRPSRQHQWRIYLVXDOOLWHUDF\LQWKHVWFHQWXU\DQGSRLQWWRDUHDVIRUIXUWKHUUHVHDUFK

 7KHXQGHUJLUGLQJDUJXPHQWDWWKHFRUHRIWKLVGLVVHUWDWLRQLVWKHIDFWWKDWDQLPDWLRQLVQR

GLIIHUHQWWKDQRWKHUGHVLJQHOHPHQWVWKDWKDYHUHFHLYHGH[WHQVLYHDWWHQWLRQXQGHUWKHEDQQHURI

YLVXDOUKHWRULF8VHGDUKHWRULFDOO\DQLPDWLRQLVERXQGWRGLVWUDFWFRQIXVHDQGDQQR\%XWZKHQ

XVHGUKHWRULFDOO\DVPDQ\FRPSDQLHVDQGPHGLDRUJDQL]DWLRQVDUHFXUUHQWO\GRLQJDQLPDWLRQ

RSHQVSRZHUIXOQHZDYHQXHVIRUPDNLQJPHDQLQJ7KLVLVQRWWRVD\DOORUJDQL]DWLRQVDQG

FRQWHQWFUHDWRUVFDQRUVKRXOGLQFOXGHDQLPDWHGGHVLJQHOHPHQWVEXWWKDWWHFKQLFDODQG

SURIHVVLRQDOFRPPXQLFDWRUVVKRXOGEHDEOHWRUHFRJQL]HDQGDFWLQVLWXDWLRQVZKHUHDQLPDWLRQ

UHLQIRUFHVWKHREMHFWLYHVRIWKHGHVLJQ

 



&+$37(5³5(63(&7)257+(*2/'(1$720´75$&,1*
027,21'(6,*1*8,'(/,1(6)520&$5722167286(5
,17(5)$&(6

<RXPXVWOHDUQWRUHVSHFWWKDWJROGHQDWRPWKDWVLQJOHIUDPHRIDFWLRQWKDWWKRID

VHFRQGEHFDXVHWKHGLIIHUHQFHEHWZHHQOLJKWQLQJDQGDOLJKWHQLQJEXJPD\KLQJHRQWKDW

VLQJOHIUDPH

&KXFN-RQHVLQ7KH/LIHDQG7LPHVRIDQ$QLPDWHG&DUWRRQLVW


-XVWDVWKHUHDUHJRRGDQGEDGXVHVRIFRORUVRWKHUHDUHJRRGDQGEDGXVHVRI

DQLPDWLRQ

7KRPDVDQG&DOGHU³$SSO\LQJ&DUWRRQ$QLPDWLRQ7HFKQLTXHVWR*UDSKLFDO8VHU

,QWHUIDFHV´

,QWURGXFWLRQ

 $V,HVWDEOLVKLQWKHSUHYLRXVFKDSWHUWZRNH\REVWDFOHVWRZRUNLQJZLWKDQLPDWLRQLQ

WHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQDUH WKHODFNRIDGHVLJQYRFDEXODU\IRU

GLIIHUHQWLDWLQJEHWZHHQRQHDQLPDWLRQDQGDQRWKHUDQG WKHLQDELOLW\WRDUJXHIRURUDJDLQVW

DQLPDWLRQEH\RQGRQH¶VLQGLYLGXDOSUHIHUHQFHV:LWKRXWDFOHDUHUDUWLFXODWLRQRIWKHVHWZR

DVSHFWVRIPRWLRQGHVLJQLWZRXOGEHLPSRVVLEOH RUDWOHDVWH[WUHPHO\FKDOOHQJLQJ WRGLVFXVV

DQLPDWLRQLQWKHVDPHZD\ZHGLVFXVVRWKHUYLVXDOHOHPHQWVOLNHDUUDQJHPHQWRUW\SRJUDSK\

/XFNLO\WKHVHFKDOOHQJHVDUHGLUHFWO\DGGUHVVHGE\WKHGHVLJQJXLGHOLQHVIRUDQLPDWLRQ

SDUWLFXODUO\WKRVHWKDWDUWLFXODWHSXUSRVHVIRUDQLPDWLRQEH\RQGWKHDFWLYLW\RIEULQJLQJ

FKDUDFWHUVWROLIH LHPRWLRQGHVLJQ ,QGHHGHYHQWKHGHVLJQJXLGHOLQHVWKDWDUHGHYHORSHG




E\IRUFDUWRRQDQLPDWRUVHVWDEOLVKV\VWHPVRIGHVFULELQJDQGHYDOXDWLQJPRWLRQ:KLOHWKHVH

SUDFWLWLRQHUJXLGHOLQHVPD\QRWEHSUHFLVHRUIOH[LEOHHQRXJKWREHLQWHJUDWHGLQWRRXU

GLVFLSOLQDU\XQGHUVWDQGLQJRIYLVXDOGHVLJQWKH\GRRIIHUDXVHIXOVWDUWLQJSRLQWIRUIUDPLQJ

DQLPDWLRQDVDQDVSHFWRIYLVXDOUKHWRULF

 ,QWKLVFKDSWHU,WUDFHWKHGHYHORSPHQWRIGHVLJQJXLGHOLQHVIRUDQLPDWLRQWKURXJKWKUHH

VWDJHV)LUVW,GHVFULEHWKHLQWHQVHO\SRSXODUSULQFLSOHVRIDQLPDWLRQGHILQHGE\WZR'LVQH\

DQLPDWRUVLQWKHVDQGFRQWLQXHWREHXVHGWRGD\7KHQ,GHVFULEHWKHVFKRODUO\DWWHPSWVWR

UHILJXUHWKHVHJXLGHOLQHVLQWKHILHOGRIKXPDQFRPSXWHULQWHUDFWLRQDVLWEHFDPHFOHDUWKDW

DQLPDWLRQFRXOGUHGXFHWKHFRJQLWLYHORDGIRUXVHULQWHUIDFHV)LQDOO\,FRPSDUHKRZWKH

DFDGHPLFSULQFLSOHVFRPSDUHWRFXUUHQWJXLGHOLQHVIRUPRELOHLQWHUIDFHVSURYLGHGWRVRIWZDUH

GHYHORSHUVE\0LFURVRIW$SSOHDQG*RRJOH%\FRPSDULQJWKHVHGLIIHUHQWVHWVRIGHVLJQ

JXLGHOLQHV,IRUHJURXQGWHUPVDQGFRQFHSWVWKDWDUHXVHIXOIRUDUWLFXODWLQJWKHUKHWRULFDO

RXWFRPHVRIPRWLRQGHVLJQ$ORQJWKHZD\,KLJKOLJKWFRQFHSWXDOJDSVWKDWFDQEHDGGUHVVHGE\

FRQQHFWLQJWKHVHJXLGHOLQHVZLWKWKHVFKRODUVKLSLQWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQ

HVSHFLDOO\WKHWXUQWRYLVXDOUKHWRULFZLWKLQLQWHUIDFHGHVLJQ+RZHYHUZKLOH,GRJHVWXUHWRZDUG

WKHVHJDSVDQGFRQQHFWLRQVLQWKLVFKDSWHU,GRQRWIXOO\XQSDFN DQGFULWLTXH WKHVHUHODWLRQVKLSV

XQWLOFKDSWHUZKHUH,DGGUHVVWKHWHQVLRQVEHWZHHQSHUFHSWLRQDQGLQWHUSUHWDWLRQWKDWDUH

H[SRVHGDFURVVWKHWZRFKDSWHUV$VDUHVXOWWKLVFKDSWHUIXQFWLRQVPDLQO\WRGRFXPHQWDQG

FODULI\WKHVKLIWLQJDUWLFXODWLRQRIDQLPDWLRQJXLGHOLQHVWKDWKDYHEHHQXVHGWRHVWDEOLVKD

SHUFHSWXDOFRJQLWLYHVFKHPHIRUDQLPDWLRQPRWLRQGHVLJQ




,QWHUIDFH6WXGLHVDQG9LVXDO5KHWRULF

 7RWKLVSRLQW,¶YHSULPDULO\IUDPHGDQLPDWLRQDVDQDVSHFWRIYLVXDOUKHWRULFEXWLQWKLV

FKDSWHU,SLYRWIURPSULQFLSOHVVSHFLILFDOO\LQWHQGHGIRUFDUWRRQDQLPDWRUVWRSULQFLSOHVLQWHQGHG

IRUZHEGHVLJQHUVDVWKHVHSULQFLSOHVRIIHUDPRUHIOH[LEOHFRQFHSWRIDQLPDWHGPRWLRQLQWXQH

ZLWKWKHIXQFWLRQRIPRWLRQGHVLJQ7RVRPHKRZHYHUWKLVPD\VHHPOLNHDUDQGRPFKRLFH

:K\QRWLQFOXGHGHVLJQDGYLFHIURPGDWDYLVXDOL]DWLRQRUEURDGFDVWJUDSKLFVRUDQ\RIWKHRWKHU

GHVLJQGLVFLSOLQHVWKDWGLVFXVVDQLPDWLRQ"7KHUHIRUHEHIRUH,FRPSDUHWKHVHVHWVRIGHVLJQ

SULQFLSOHV,RIIHUDEULHIGLVFXVVLRQRIKRZWKHVWXG\RILQWHUIDFHGHVLJQFRQQHFWVZLWKWKHVWXG\

RIYLVXDOUKHWRULFDQGVXEVHTXHQWO\KRZLQWHUIDFHGHVLJQLQIRUPVDEURDGHUGLVFXVVLRQRI

DQLPDWLRQ 

8VHULQWHUIDFHVKDYHVHUYHGDVDUHFXUULQJVXEMHFWRILQTXLU\LQFRPSXWHUVDQGZULWLQJ

VLQFHWKHULVHRIZRUGSURFHVVLQJVRIWZDUHLQWKHVDVVFKRODUVGLVFXVVHGKRZZULWLQJ

VRIWZDUHUHIOHFWHGSHGDJRJLFDOWKHRULHVRIZULWLQJLQVWUXFWLRQ %XUQV%DNHU DQG

DGYRFDWHGIRUVWURQJHUFRQQHFWLRQVEHWZHHQZULWLQJVFKRODUVDQGUHVHDUFKHUVLQKXPDQFRPSXWHU

LQWHUDFWLRQ 6XOOLYDQ 6SXUUHGE\DFKDQJLQJODQGVFDSHRIGLJLWDOZULWLQJWRROVDQG

SUDFWLFHVFRPSRVLWLRQUHVHDUFKHUVKDYHFRQWLQXDOO\UHWXUQHGWRWKHTXHVWLRQVRIKRZLQWHUIDFHV

VKDSHRXUZULWLQJSUDFWLFHVDQGKRZZHPD\LQWXUQFRPSRVHDOWHUQDWHLQWHUIDFHVZLWKDOWHUQDWH

SUDFWLFHV

:LWKLQFRPSXWHUVDQGZULWLQJ³LQWHUIDFHV´DUHEURDGO\GHILQHGDVWKHSRLQWVRIFRQWDFW

WKDW³IDFLOLWDWHDQGGHILQHLQWHUDFWLRQ´LQ³ERWKFRQFUHWHDQGDEVWUDFWIRUP´ &DUQHJLHS

 7KLVGHILQLWLRQLQFOXGHVWKHLQWHUDFWLRQVEHWZHHQKXPDQVDQGFRPSXWHUVDQGWKHZD\WKHVH

LQWHUDFWLRQVDUHGHILQHGE\SK\VLFDOREMHFWV VXFKDVWKHNH\ERDUGPRXVHVFUHHQDQGWRXFKSDG 

YLUWXDOREMHFWV VXFKWKHJUDSKLFGLVSOD\RIDSDUWLFXODUSURJUDP DQGWKHXQGHUO\LQJFRGHRIWKH




VRIWZDUHLWVHOI+RZHYHUWKLVGHILQLWLRQRILQWHUIDFHVDOVRH[WHQGVEH\RQGWKHGLJLWDO)RU

H[DPSOHWKHOD\RXWW\SHIDFHDQGSK\VLFDOSDJHVRIDERRNIXQFWLRQVDVDQLQWHUIDFHDVLWVLJQDOV

KRZZHDUHPHDQWWRLQWHUDFWZLWKLW

$V:\VRFNLDQG-DVNHQ  HVWDEOLVKLQ³:KDWVKRXOGEHDQXQIRUJHWWDEOHIDFH´

WKHUHUHPDLQVDVWURQJEXWWURXEOHGUHODWLRQVKLSEHWZHHQLQWHUIDFHVWXGLHVDQGYLVXDOUKHWRULF

0DQ\LQWHUIDFHVGHSHQGRQYLVXDOHOHPHQWVWRIDFLOLWDWHLQWHUDFWLRQVVXFKDVWKHYLUWXDOZLQGRZV

PHQXVDQGIROGHUVXVHGLQPDQ\RSHUDWLQJV\VWHPVWRVWUXFWXUHWKHZD\ZHQDYLJDWHDQG

RUJDQL]HGLJLWDOLQIRUPDWLRQ%XWDV:\VRFNLDQG-DVNHQSRLQWRXWWKHYLVXDOLW\RIFRPSXWHU

LQWHUIDFHVRIWHQOHDGVWRWKHVDPHDVVXPSWLRQVRIWUDQVSDUHQF\DQGQHXWUDOLW\WKDWDUH

WUDGLWLRQDOO\DSSOLHGWRSULQWEDVHGWH[WV S OHDGLQJWRWKHVDPHVRUWRISUHVFULSWLYH

DUKHWRULFDOSUDFWLFHVWKDWZRUU\VFKRODUVRIYLVXDOUKHWRULF7KHUHIRUHLWLVFRPPRQIRUUKHWRULFDO

VWXGLHVRILQWHUIDFHVWRXQSDFNWKHVRFLDOFXOWXUDODQGLGHRORJLFDOEDJJDJHPDLQWDLQHGE\WKH

YLVXDO 6HOIH 6HOIH=GHQHN DQGWRVXSSRUWGHVLJQWHFKQLTXHVIRUUHVLVWLQJWKH

DVVXPHGQHXWUDOLW\RILQWHUIDFHV $UROD6TXLUH 5RVLQVNL%R\OH 

7KRXJKWKHIROORZLQJRXWOLQHRIPRWLRQGHVLJQSULQFLSOHVIRFXVHVRQWKHGHVLJQRIXVHU

LQWHUIDFHVUDWKHUWKDQVSHFLILFJHQUHVRIYLVXDOPDWHULDOVWKLVHPSKDVLVGUDZVRQWKHVDPHEURDG

XQGHUVWDQGLQJRIWKHLQWHUIDFHWKDWLVGLVFXVVHGLQFRPSXWHUVDQGZULWLQJ7KLVLVQRWWRVRPHKRZ

DUJXHWKDWDOODQLPDWLRQVDUHFRQQHFWHGE\DVLQJOHLQWHUIDFHRUWRVD\WKDWDPRYLHWKHDWUH¶V

SUHVHQWDWLRQRIDQDQLPDWHGILOPDPRXQWVWRWKHVDPHLQWHUIDFHDVWKHDQLPDWHGGHVLJQHOHPHQWV

RIDPRELOHVRIWZDUHDSSOLFDWLRQ5DWKHUE\XQGHUVWDQGLQJERWKRIWKHVHH[SHULHQFHVDV

VWUXFWXUHGE\SDUWLFXODULQWHUIDFHVZHFDQEHWWHUFRQQHFWWKHVXSSRVHGO\XQLYHUVDOGHVLJQ

FRQYHQWLRQVWRPDWHULDOVRFLDODQGFXOWXUDOFLUFXPVWDQFHV




7KH3ULQFLSOHVRI$QLPDWLRQ

'XULQJWKHVDQGHDUO\VWKHSUHVVXUHIRUORQJHUDQGPRUHGHWDLOHGDQLPDWHG

PDWHULDOVOHGWRWKHIRUPDWLRQRIDQLPDWLRQVWXGLRVUHIRFXVLQJWKHFUDIWRIDQLPDWLRQIURPWKH

ZRUNRILQGLYLGXDODUWLVWVWRLQFUHDVLQJO\ODUJHVSHFLDOL]HGWHDPV7KRXJKWKLVWXUQDOORZHGIRU

WKHREYLRXVDGYDQWDJHRISURGXFLQJPRUHYLVXDOFRQWHQWLQDVKRUWDPRXQWRIWLPHLWDOVR

UHTXLUHGVWXGLRVWRVWDQGDUGL]HWKHGHVLJQSURFHVVLQRUGHUWRHQVXUHDFRQVLVWHQWORRNDQGIHHOWR

DQLPDWHGPDWHULDOIURPEHJLQQLQJWRHQG$QLPDWLRQVWXGLRVTXLFNO\DGRSWHGWKHVFLHQWLILF

PDQDJHPHQWVWUDWHJLHVGLYLGLQJWKHSURGXFWLRQSURFHVVHVLQWRWLJKWO\PDQDJHGQDUURZ

SURGXFWLRQXQLWV %RMHS *LYHQWKHZD\WKHVHFKDQJHVUHYROXWLRQL]HGWKH

DQLPDWLRQLQGXVWU\LWVKRXOGFRPHDVOLWWOHVXUSULVHWKDWWKHVHLQVWLWXWLRQDOVKLIWVWULFNOHGGRZQWR

WKHVWDQGDUGL]DWLRQRIGHVLJQODQJXDJHDVDQLPDWRUVOHDUQHGWRDUWLFXODWHWKHLUGHVLJQGHFLVLRQV

WRRQHDQRWKHU DVZHOODVWRWKHLUVXSHUYLVRUV 

 )RUPDQ\\HDUVWKHVHDGKRFGHVLJQJXLGHOLQHVFKXUQHGXQV\VWHPDWLFDOO\LQWKHHYHU\GD\

GLVFXVVLRQVRIDQLPDWRUV,QWKHZRUGVRI-RKQ+HQFKRQHRIWKHHDUO\DQLPDWRUVDW'LVQH\

$QLPDWLRQ6WXGLRV³:HGRQ¶WUHDOO\NQRZKRZPXFKZHOHDUQHGKHUHDERXWXVLQJLPDJHVWR

FRPPXQLFDWH±WRGHYHORSDNLQGRIYLVXDOOLWHUDF\´ 7KRPDV -RKQVRQS +RZHYHU

ZKLOHWKHWHUPVDQGFRQFHSWVZHUHQRWRIILFLDOO\SXEOLVKHGLQVWXGLRJXLGHOLQHVDWWKHWLPHWKH

GHYHORSPHQWRIQHZWHUPLQRORJ\IXQGDPHQWDOO\VKLIWHGDQLPDWRUV¶XQGHUVWDQGLQJRIDQLPDWLRQ

IURPDUWLVWLFH[SUHVVLRQWRDPRGHRIFRPPXQLFDWLRQ5HIOHFWLQJRQWKHVKLIW+HQFKVWDWHV³,

WKLQN>DQLPDWLRQ@LVDOLWWOHKDUGIRUSHRSOHWRXQGHUVWDQGWKHIDFWWKDW\RXDUHGHYHORSLQJDNLQG



$V%RMH,OOXVWUDWHVLQ³6WRULHVRIWKH6WRU\WHOOLQJ2UJDQL]DWLRQ´WKHVHVKLIWVHPHUJHGDVDIXQFWLRQRIWKHZKROHVFDOH
³WD\ORUL]DWLRQ´RIWKHDQLPDWLRQLQGXVWU\ZKLFKVXSSUHVVHG³DOOLQGLYLGXDOLW\YLDSUHGHWHUPLQHGVFKHGXOHVIRUPXODV
DQGLQWHUFKDQJHDEOHWDVNV´ S 7KRXJK,IUDPHWKHHPHUJHQFHRIDQLPDWLRQGHVLJQWHUPLQRORJ\PDLQO\WKURXJK
WKHQHHGIRUDFRPPRQSURIHVVLRQDOODQJXDJHDQGDUWLVWLFVLPLODULW\LW¶VLPSRUWDQWWRUHFRJQL]HWKDWWKLVYRFDEXODU\
DOVRHPHUJHGRXWRIWKHXQGHQLDEO\FDSLWDOLVWSUHVVXUHWRSURGXFHDVPXFKPDWHULDODVSRVVLEOHLQWKHVKRUWHVWDPRXQW
RIWLPH


RIODQJXDJHDQGDYHU\SUHFLVHRQH7KH\ILJXUHWKDWJUDSKLFVDUHQRWSUHFLVHDWDOO²WKH\¶UH

MXVWVRUWRIGHFRUDWLYHWKH\¶UHSOHDVDQWWRORRNDWWKH\¶UHDHVWKHWLF´ 7KRPDV -RKQVRQ

S %XWZKLOHWKHVHVXJJHVWLRQVRIWKHJURZWKRIYLVXDOOLWHUDF\DQGWKHGHYHORSPHQWRID

SUHFLVHYLVXDOODQJXDJHVXJJHVWDUDWLRQDOV\VWHPDWLFDSSURDFKWRDQLPDWLRQWKHUHZDVQRQHHG

WRYHUEDOL]HWKHVHSULQFLSOHVEH\RQGWKHHYHU\GD\GLVFXVVLRQVEHWZHHQWKHDQLPDWRUVWKHPVHOYHV

7KLVDGKRFFKDUDFWHUL]DWLRQRIGHVLJQSUDFWLFHVFDPHWRDFORVHLQZLWKWKH

SXEOLFDWLRQRI7KH,OOXVLRQRI/LIH'LVQH\$QLPDWLRQ:ULWWHQE\SUROLILF'LVQH\DQLPDWRUV

7KRPDVDQG-RKQVRQ7KH,OOXVLRQRI/LIHRIIHUVDKLVWRULFDODFFRXQWRIWKHULVHRI'LVQH\

DQLPDWLRQGHVFULELQJWKHWHFKQRORJLFDOLQVWLWXWLRQDODQGFXOWXUDODVSHFWVRIZRUNLQJDV'LVQH\

DQLPDWRUV0RUHLPSRUWDQWO\LQWKHWKLUGFKDSWHURIWKHERRN7KRPDVDQG-RKQVRQLQWURGXFH

3ULQFLSOHVRI$QLPDWLRQZLWKWKHKRSHRIRSHQLQJXSWKHDUWRIDQLPDWLRQWRDQHZJHQHUDWLRQRI

DUWLVWV%\WKHGHVFULSWLRQRI7KRPDVDQG-RKQVRQWKHVHSULQFLSOHVVLPSO\FRGLI\WKH

WHUPLQRORJ\WKDWWKH\KDGEHHQXVLQJWRGHVFULEHDQGHYDOXDWHDQLPDWLRQVLQFHWKH¶V

7KRXJKWKHVHSULQFLSOHVZHUHRULJLQDOO\IUDPHGDVWKHFDVXDOH[SUHVVLRQRIDQHFGRWDOH[SHULHQFH

WKDQDVDJHQHUDOL]DEOHIRUPDOV\VWHP S WKHSULQFLSOHVZHUHTXLFNO\DGRSWHGDVWKHFRUH

VNLOOVRIDQLPDWLRQQRPDWWHUWKHVW\OHRUPHGLXP7RGD\LWLVRGGWRRSHQDWH[WERRNRUWDNHD

FODVVRQDQLPDWLRQZLWKRXWHQFRXQWHULQJWKHVHWZHOYHSULQFLSOHV

)RUWKHVDNHRIFODULI\LQJP\GLVFXVVLRQKHUH,¶YHLQFOXGHGDOLVWRIWKHVHSULQFLSOHV±

LQFOXGLQJGHILQLWLRQVDQGUHSUHVHQWDWLYHH[DPSOHVLQ7DEOH







)RUDYLVXDOL]HGH[DPSOHRIHDFKSULQFLSOHVHHWKHYLGHR³3ULQFLSOHVRI$QLPDWLRQ 2IILFLDO)XOO6HULHV ´FUHDWHG
E\$ODQ%HFNHU7XWRULDOV


7DEOH7KH3ULQFLSOHVRI$QLPDWLRQ

3ULQFLSOH 'HILQLWLRQ  5HSUHVHQWDWLYH([DPSOH
SDUDSKUDVHGIURP7KH
,OOXVLRQRI/LIH'LVQH\
$QLPDWLRQ 

6TXDVK  7KHDPRXQWRIFRQWRUWLRQ  &RQVLGHUDERXQFLQJUXEEHUEDOODQGLPDJLQH
6WUHWFK H[KLELWHGE\REMHFWVWKURXJK WKHPRPHQWRIFRQWDFWEHWZHHQWKHEDOODQG
WKHVSHHGRIPRYHPHQWRULQ WKHJURXQG$VWKHEDOOPDNHVFRQWDFWLW
FRQWDFWZLWKRWKHUREMHFWV ³VTXDVKHV´GRZQEHFRPLQJYLVXDOO\ZLGHU
 $VWKHEDOOEHJLQVWROLIWEDFNRIIWKHJURXQG
LW³VWUHWFKHV´VOLJKWO\XSZDUGEHFRPLQJ
YLVXDOO\WDOOHU

$QWLFLSDWLRQ 7KHDPRXQWRIPRYHPHQW  &RQVLGHUWKHWLJKWHQHGJULSDQGVOLJKW
WKDWSUHFHGHVWKHPDLQ EDFNVZLQJRIDEDVHEDOOSOD\HUDERXWWR
PRYHPHQWRUDFWLRQ VZLQJDWDSLWFK

)ROORZ 7KHPRYHPHQWRIWKHVXE  &RQVLGHUWKHIRUZDUGPRYHPHQWRI\RXUKHDG
7KURXJK VHFWLRQVRIDQREMHFWDIWHUWKH ZKHQDSSO\LQJWKHEUDNHLQ\RXUFDU
FHQWUDOPDVVRIWKHREMHFWKDV
VWRSSHGPRYLQJ


6ORZLQDQG 7KHUDWHDWZKLFKDQREMHFW  &RQVLGHUWKHPRYHPHQWRIZDONLQJDFURVVD


6ORZ2XW JDLQVVSHHGDWWKHVWDUWRID URRP<RXSLFNXSVSHHGZLWKWKHILUVWIHZ
SDUWLFXODUPRYHPHQWDVZHOO VWHSVPDLQWDLQWKDWVSHHGIRUDIHZVWHSVDQG
DVWKHUDWHDWZKLFKWKHREMHFW WKHQVORZGRZQZKHQ\RX¶UHDIHZVWHSV
ORVHVVSHHGDWWKHHQGRID IURPWKHRWKHUVLGHRIWKHURRP
SDUWLFXODUPRYHPHQW 
$UFV 7KHLGHDWKDWDOOPRWLRQV  &RQVLGHUDUFFUHDWHGE\\RXUKDQGZKHQ\RX
H[FHSWIRUWKRVHRIVRPH ZDYHWRVRPHRQH\RXNQRZ
PHFKDQLFDOGHYLFHVIROORZD
FXUYHGSDWK
6HFRQGDU\ 7KHPRYHPHQWVRIRWKHU  &RQVLGHUWKHPRYHPHQWRIZDONLQJDQGIRFXV
$FWLRQ REMHFWVWKDWVXSSOHPHQW RQWKHPRYHPHQWVRWKHUWKDQ\RXUIHHW
DQGRUUHLQIRUFHWKH 1RWLFHWKHPRYHPHQWRI\RXUKLSVWKHERERI
PRYHPHQWRIWKHLQLWLDO \RXUKHDGDQGWKHVZLQJRI\RXUDUPV
REMHFW




7DEOH&RQWLQXHG

3ULQFLSOH 'HILQLWLRQ  5HSUHVHQWDWLYH([DPSOH
SDUDSKUDVHGIURP7KH
,OOXVLRQRI/LIH'LVQH\
$QLPDWLRQ 

$SSHDO 7HFKQLTXHVWKDWDOORZ  &DUWRRQIDFHVZLWKODUJHH\HVDQGVLPSOH
FKDUDFWHUVWRJDLQ IDFLDOIHDWXUHVDUHFRQVLGHUHGWREHPRUH
SHUVRQDOLW\WUDLWVVXFKDV ³DSSHDOLQJ´WKDQFRPSOH[DV\PPHWULFDO
JRRGHYLOFKDUPLQJHWF IHDWXUHV
([DJJHUDWLRQ 7KHQRWLRQWKDWDQ  $IDVWPRYLQJREMHFWLQUHDOLW\PLJKWORRN
DQLPDWLRQVKRXOGQRWPLPLF EOXUULHUWKDQDQREMHFWDWUHVWEXWDQDQLPDWRU
UHDOLW\EXWLQVWHDG PD\GUDZWKHREMHFWDVDPRUHH[WUHPHEOXU
HPSKDVL]HWKH³HVVHQFH´RI LQRUGHUWRFRPPXQLFDWHWKHH[WHQWRIWKH
DSDUWLFXODUHPRWLRQRU PRYHPHQW
DFWLRQ
6WUDLJKW $FKRLFHEHWZHHQWZR  $QDQLPDWRUFDQHLWKHUGUDZDVHULHVRISRVHV
$KHDG3RVHWR SURGXFWLRQWHFKQLTXHV DQGWKHQILOOLQWKHJDSV ³SRVHWRSRVH´ RU
3RVH DQLPDWHHDFKIUDPHFRQVHFXWLYHO\IURPVWDUW
WRILQLVK ³VWUDLJKWDKHDG´ 
6WDJLQJ 7HFKQLTXHVIRUHQDEOLQJWKH  $QLPDWHGFKDUDFWHUVPD\KROGDSRVHIRU
YLHZHUWRIRFXVRQWKHPRVW DGGLWLRQDOIUDPHVVRWKDWWKHDXGLHQFHKDV
LPSRUWDQWDFWRURUREMHFWLQ PRUHWLPHWRUHFRJQL]HDQGXQGHUVWDQGWKH
DSDUWLFXODUPRPHQW DFWLRQ
6ROLG'UDZLQJ 7KHQRWLRQWKDWDOO  :KHQGUDZLQJDEDOOIDOOLQJWRZDUGWKH
DQLPDWLRQVKRXOGDFFRXQW JURXQGDQDQLPDWRUZLOOQRWRQO\IRFXVRQ
IRUWKHYROXPHZHLJKWDQG WKHDFFHOHUDWLRQRIWKHEDOOEXWWKHVKDGRZ
EDODQFHRIGUDZQREMHFWV FDVWE\WKHEDOORQWKHJURXQG7KLVVKDGRZ
DGGVDQRWKHUYLVXDOUHIHUHQFHWKDWWKHEDOOLVD
³UHDO´REMHFW
7LPLQJ 7KHDPRXQWRIWLPHLWWDNHV  ,PDJLQHWKURZLQJDEDVHEDOOYHUVXVDZKLIIOH
IRUDQREMHFWWRPRYHIURP EDOO7KHEDVHEDOOVKRXOGUHTXLUHOHVVWLPHWR
RQHORFDWLRQWRDQRWKHU PRYHWKHVDPHGLVWDQFHDVWKHZKLIIOHEDOO
EHFDXVHWKHEDVHEDOOKDVPRUHPDVV
'HILQLWLRQVSDUDSKUDVHGIURP7KRPDVDQG-RKQVRQ  
 

$OWKRXJKWKHVHWZHOYHSULQFLSOHVDUHRIWHQSUHVHQWHGDVXQLILHGVHWWKH\YDU\ZLOGO\IURP

RQHDQRWKHULQERWKVFRSHDQGSXUSRVHOLNHO\GXHWRWKHLULQIRUPDORULJLQVLQDQLPDWLRQSUDFWLFH

6RPHSULQFLSOHVVXFKDV³IROORZWKURXJK´RU³DUFV´IRFXVH[SUHVVO\RQEUHDNLQJGRZQ

PRYHPHQWLQWRVSHFLILFQDPHDEOHSDUWVVLPLODUWRWKHZD\WHUPVVXFKDV³[KHLJKW´RU


³GHVFHQGHU´IXQFWLRQLQW\SRJUDSK\2WKHUVVXFKDV³DSSHDO´RU³VROLGGUDZLQJ´DUHWLHGWR

VSHFLILFFRPPXQLFDWLYHJRDOVUDWKHUWKDQWKHDQDWRP\RIPRYHPHQW V WKDWPD\DFKLHYHWKRVH

JRDOV$QGSHUKDSVWKHOHDVWJHQHUDOL]DEOHRIWKHJURXS³VWUDLJKWDKHDGRUSRVHWRSRVH´LVQRW

DFWXDOO\DSULQFLSOHDWDOOEXWUDWKHUDFKRLFHEHWZHHQWZRGLIIHUHQWGHVLJQWHFKQLTXHV±DFKRLFH

UHQGHUHGODUJHO\REVROHWHZKHQFRQVLGHULQJDQ\PHGLXPRWKHUWKDQKDQGGUDZQDQLPDWLRQ,Q

VKRUWZKLOHWKHVHSULQFLSOHVHPHUJHGRXWRIWKHLQVWLWXWLRQDOSUHVVXUHWRVWDQGDUGL]HWKHGHVLJQRI

DQLPDWLRQWKHSULQFLSOHVWKHPVHOYHVPDLQWDLQWKHDGKRFTXDOLW\RILQIRUPDOFRQYHUVDWLRQUDWKHU

WKDQWKHIRUPDOSUHFLVLRQZHPLJKWH[SHFW

7KHLUUHJXODULW\RIWKHSULQFLSOHVKDVDIIHFWHGWKHLUFLUFXODWLRQ2QWKHRQHKDQGWKH

XQHYHQGHILQLWLRQRIWKHVHSULQFLSOHVVHHPVWRFRQWULEXWHWRWKHLUH[SODQDWRU\SRZHU,WLVTXLWH

HDV\WRHPSKDVL]HFHUWDLQSULQFLSOHVRYHURWKHUVZKLOHVWLOOSURIHVVLQJWKHLPSRUWDQFHRIWKH

FROOHFWLRQDVDZKROH$QGJLYHQWKDWWKHUHDUHWZHOYHSULQFLSOHVWKHUHLVDJRRGFKDQFHWKDWDW

OHDVWIRXURUILYHRIWKHSULQFLSOHVZLOOEHXVHIXOIRUWKHVLWXDWLRQDWKDQG2QWKHRWKHUKDQGWKLV

ODFNRIFRQFHSWXDOXQLIRUPLW\DOVROHDGVVRPHSULQFLSOHVWREHFRPHOHVVWUDQVIHUDEOHWRQRQ

FDUWRRQVLWXDWLRQVWKDQRWKHUV)RUH[DPSOHGHVLJQLQJPRWLRQLQ³DUFV´LVDQHDV\UXOHWRGHILQH

DQGUHSHDWLQRWKHUVLWXDWLRQV,IWKHUHLVKRUL]RQWDOPRWLRQLWVKRXOGIROORZDWOHDVWDVOLJKW

FXUYHVLQFHIHZVRXUFHVRIRUJDQLFPRWLRQPRYHLQSUHFLVHVWUDLJKWOLQHV2QWKHRWKHUKDQGWKH

SULQFLSOHRI³DSSHDO´LVVREURDGO\GHILQHGWKDWLWPD\KDUGWRDSSO\FRQVLVWHQWO\7KHUHLVOLWWOH

JXLGDQFHRYHUZKDWPDNHVDGHVLJQPRUHDSSHDOLQJRUOHVVDSSHDOLQJRUHYHQKRZWKLVGHILQLWLRQ

RIDSSHDOPD\FKDQJHIURPRQHDXGLHQFHWRDQRWKHU



7RGD\PDQ\PRGHVRIDQLPDWLRQGHSHQGRQDOJRULWKPLFDOO\SRZHUHGNH\IUDPHVLQZKLFKWKHGHVLJQHUFKRRVHVWKH
³SRVHV´DQGWKHSURJUDPDXWRPDWLFDOO\ILOOVLQWKHVSDFHEHWZHHQWKHVWDUWSRVHDQGWKHHQGSRVH7KRXJKWKHIUDPH
E\IUDPHWHFKQLTXHLVVWLOOXVHIXOLQVRPHFLUFXPVWDQFHV,ZRXOGDUJXHWKDWLWPDWWHUVIDUOHVVLQDQHUDRIGLJLWDOO\
GHVLJQHGPRYHPHQW


$GGLWLRQDOO\EHFDXVHWKHSULQFLSOHVZHUHRULJLQDOO\GHYHORSHGIRUGHVFULELQJDQG

HYDOXDWLQJFDUWRRQDQLPDWLRQWKH\RIWHQGHILQHHIIHFWLYHDQLPDWLRQDVDUHIOHFWLRQRIWKH³UHDO´

PRYHPHQWVRIWKHREMHFWVRUFKDUDFWHUVEHLQJDQLPDWHG)RUH[DPSOHGHVFULELQJWKHLPSRUWDQFH

RIDUFV7KRPDVDQG-RKQVRQUHDVRQWKDW³YHU\IHZOLYLQJRUJDQLVPVDUHFDSDEOHRIPRYHVWKDW

KDYHDPHFKDQLFDOLQDQGRXWRUXSDQGGRZQSUHFLVLRQSHUKDSVWKLVKDVWRGRZLWKZHLJKWRU

PD\EHZLWKWKHLQQHUVWUXFWXUHRIWKHKLJKHUIRUPVRIOLIHEXWZKDWHYHUWKHUHDVRQPRVW

PRYHPHQWVZLOOGHVFULEHDQDUFRIVRPHNLQG´ S 6HYHUDORIWKHRWKHUSULQFLSOHVVWHP

IURPDVLPLODUUHSUHVHQWDWLRQDOORJLFVWRZKDWZHVHHKHUHDQGLQWKHSURFHVVWKHVHSULQFLSOHV

FHQWHUWKHJRDOVRIDQLPDWLRQRQWKHPRYHPHQWRI³OLYLQJRUJDQLVPV´7KLVLVXVHIXOIRU

DQLPDWLQJDVHWRIEHOLHYDEOHFKDUDFWHUVEXWLVOHVVSHUWLQHQWLQFLUFXPVWDQFHVIRUDQLPDWLRQVXFK

DVD3RZHU3RLQWSUHVHQWDWLRQRUDGDWDYLVXDOL]DWLRQ

$QLPDWLRQ*XLGHOLQHVLQ+XPDQ&RPSXWHU,QWHUDFWLRQ

 ,QWKHHDUO\VVSXUUHGE\H[SRQHQWLDOLQFUHDVHVLQWKHSURFHVVLQJSRZHURISHUVRQDO

FRPSXWHUVVFKRODUVEHJDQWRH[SORUHWKHEHQHILWVRILQFOXGLQJDQLPDWLRQLQWKHYLVXDOGHVLJQRI

XVHULQWHUIDFHV0XFKOLNHWKHHDUO\SHULRGRIFDUWRRQDQLPDWLRQWKHVHUHVHDUFKHUVTXLFNO\

UHDOL]HGWKHQHHGIRUDVKDUHGODQJXDJHIRUGHILQLQJDQGHYDOXDWLQJLQWHUIDFHDQLPDWLRQV%HIRUH

ORQJWKH\EHJDQGHYHORSLQJQHZVHWVRIGHVLJQJXLGHOLQHVRIWHQE\UHYLVLWLQJWKHWZHOYH

SULQFLSOHVGHVFULEHGLQ7KH,OOXVLRQRI/LIH7KRXJKWKHVHSULQFLSOHVGRQRWKDYHWKHVDPH



8QSDFNLQJZKDW,PHDQKHUHE\³UHSUHVHQWDWLRQDOLVWORJLFV´ZKLOHDQLPDWRUVZHUHH[SUHVVO\WROGWRDYRLGLPLWDWLQJ
UHDO PRYHPHQWV WR WKH SRLQW RI YHULVLPLOLWXGH WKH JXLGHOLQHVGR FRQWLQXDOO\ UHIHU WR WKH PRYHPHQW RI ³OLYLQJ
RUJDQLVPV´DVDJURXQGLQJUDWLRQDOHIRUGHVLJQGHFLVLRQV7KXVDQDQLPDWRUPLJKWDUJXHWKDWDQDQLPDWLRQRIDUXQQLQJ
GRJLVLQHIIHFWLYHEHFDXVHLWGRHVQRWDGHTXDWHO\UHSUHVHQWWKHZD\GRJVDFWXDOO\UXQ

,ZRXOGFKDUDFWHUL]HVORZLQDQGRXWDUFVIROORZWKURXJKDQWLFLSDWLRQDQGVTXDVKDQGVWUHWFKLQWKLVFDWHJRU\


LQVWLWXWLRQDORUKLVWRULFDOHWKRVDVWKHFDQRQLFDOSULQFLSOHVWKH\GRRIIHUDVWURQJHUVHQVHRI

FRQVLVWHQF\DQGSXUSRVHVWULNLQJDFORVHUUHVHPEODQFHZLWKRWKHUSULQFLSOHVIRUYLVXDOGHVLJQ

&KDQJDQG8QJDU  ZHUHRQHRIWKHILUVWJURXSVRIUHVHDUFKHUVWRWXUQWR7KH

,OOXVLRQRI/LIHWRSURYLGHWKHIRXQGDWLRQIRUWKHLUDQLPDWLRQSULQFLSOHV7KRXJKWKH\GUDZIURP

WKHSULQFLSOHVKRZHYHUWKH\FKRRVHWRUHRUJDQL]HWKHPDMRULW\RIWKHRULJLQDOSULQFLSOHVLQWR

WKUHHJURXSVVROLGLW\H[DJJHUDWLRQDQGUHLQIRUFHPHQW7KLVUHRUJDQL]DWLRQDOORZV&KDQJDQG

8QJDUWRGLIIHUHQWLDWHEHWZHHQWKHDQDWRPLFDOGLIIHUHQFHVEHWZHHQDQLPDWLRQW\SHV VXFKDV

DQWLFLSDWLRQRUIROORZWKURXJK DQGWKHFRPPXQLFDWLYHSXUSRVHIRUWKRVHGLIIHUHQFHV VXFKDV

H[DJJHUDWLRQ  S 0XFKOLNHWKHXVHRIFRQWUDVWRUDOLJQPHQWLQGRFXPHQWGHVLJQWKHVH

SULQFLSOHVDUHLQWHQWLRQDOO\IOXLGZRUNLQJDVDNLQGRIPHWDODQJXDJHIRUGHVFULELQJSDUWLFXODU

GHVLJQGHFLVLRQV

7KHLUSULQFLSOHVDUHGHILQHGDVIROORZV

•  6ROLGLW\HOHYDWHVDQHOHPHQWIURPDPHUHSLFWXUHRQWKHVFUHHQWRDWDQJLEOHHQWLW\WKDWLV

UHDOHQRXJKWRSRVVHVVLWVRZQEHKDYLRU

• ([DJJHUDWLRQLQFUHDVHVWKHSURPLQHQFHRIIHDWXUHVGHHPHGVLJQLILFDQWE\WKHDQLPDWRU

ZKHWKHUWKHVHIHDWXUHVDUHSK\VLFDOFKDUDFWHULVWLFVTXDOLWLHVRIDFWLRQRUH[WUHPLWLHVRI

VLWXDWLRQ

• 5HLQIRUFHPHQWXVHVVXEWOHDQLPDWLRQVWRHVWDEOLVKWKHLOOXVLRQRID³UHDO´HQYLURQPHQWLQ

WKHLQWHUIDFH

%\HOLPLQDWLQJWKHSULQFLSOHVRIDSSHDODQGVWDJLQJ DPRQJRWKHUV &KDQJDQG8QJDU¶V

WKUHHSULQFLSOHVDWWHPSWWRUHIRFXVWKHFHQWUDOJRDOVRIDQLPDWLRQRQGHYHORSLQJVHDPOHVV

LQWHUIDFHHOHPHQWVLQVWHDGRIFRQYH\LQJWKHSHUVRQDOLWLHVRIFKDUDFWHUVRUWKHZRUOGFUHDWHGE\

WKHVFHQHU\³&DUWRRQVDUHSXUHO\IRUHQMR\PHQWDQGGLYHUVLRQ´WKH\DUJXH³XVHULQWHUIDFHVDUH


XVXDOO\IRUJHWWLQJZRUNGRQH´ S )ROORZLQJWKLVGLVWLQFWLRQ&KDQJDQG8QJDU¶VGHVLJQ

SULQFLSOHVVKLIWDQLPDWLRQFORVHUWRWKHFRJQLWLYHSHUFHSWXDODSSURDFKHVWRYLVXDOGHVLJQ7KH

FHQWUDOEHQHILWRIDQLPDWLRQLVWKHUHGXFWLRQRIWKHXVHU¶VFRJQLWLYHORDGZLWKWKHVXEWOHDIIHFWLYH

EHQHILWRIOHVVFRQIXVLRQDQGIUXVWUDWLRQ

:KLOH&KDQJDQG8QJDUFDUYHRXWGLVWLQFWWHUULWRU\IRULQWHUIDFHDQLPDWLRQLQUHODWLRQWR

FDUWRRQDQLPDWLRQWKH\IRUPWKHLUSULQFLSOHVZLWKDVLPLODUDWWHQWLRQWRWKH³UHDOLVP´RI

DQLPDWHGPRWLRQ)ROORZWKURXJKLVXVHIXOEHFDXVH³REMHFWVLQWKHUHDOZRUOGGRQRWFRPHWR

VXGGHQVWRSV´ S DQGPRWLRQEOXULVIUDPHGDVDQDWWHPSWWR³PLPLFWKHSK\VLFDOHIIHFWLQ

UHDOLW\´ S /LNHFDUWRRQDQLPDWLRQ&KDQJDQG8QJDUDUJXHWKDWWKHJRDOLVQRWWRDGKHUH

H[DFWO\WRRXUHYHU\GD\UHDOLW\EXWWRH[DJJHUDWHLWFDOOLQJDWWHQWLRQWRVSHFLILFYLVXDOSURSHUWLHV

VXFKDVWKHZHLJKWRILFRQVRUWKHPDWHULDOLW\RIDZLQGRZ S 7KHGLVFXVVLRQLVQHFHVVDULO\

PRUHDEVWUDFWZKHQGLVFXVVLQJLQWHUIDFHDQLPDWLRQV²WUDQVIRUPLQJ³WKLVLVKRZDSHUVRQZDONV´

WR³WKLVLVKRZDQREMHFWPRYHV´²EXWWKHJRDORIPLPLFNLQJH[DJJHUDWLQJ³UHDO´PRYHPHQWV

UHPDLQVWKHVDPH

7KRPDVDQG&DOGHU  RIIHUDVLPLODUVHWRIJHQHUDOSULQFLSOHVIRULQWHUIDFH

DQLPDWLRQEXWVKLIWWKHLUIRFXVWRYLVXDOIHHGEDFNIRUWKHXVHU¶VGLUHFWPDQLSXODWLRQRIWKH

LQWHUIDFHZKHWKHUYLDWKHPDQLSXODWLRQRIDPRXVHRUWRXFKLQJWKHVFUHHQLWVHOI7KHSRWHQWLDOIRU

LQWHUDFWLYLW\WKH\DUJXHSUHVHQWVDGLIIHUHQWVHWRIGHVLJQFKDOOHQJHVWKDQREMHFWVWKDWDUHSUH

SURJUDPPHGWRPRYHRQDSDUWLFXODUSDWK,QWKHLUZRUGV

WKHQHHGIRULPPHGLDWHDQGDFFXUDWHUHVSRQVHWRXVHUDFWLRQVLVDWRGGVZLWKWKHQHHG

IRUREMHFWVWRKDYHUHDOLVWLFVHHPLQJEHKDYLRU,IDXVHUWULHVWRGUDJDQREMHFWDFURVVWKH

VFUHHQIRUH[DPSOHKRZVKRXOGWKHLQWHUIDFHUHSUHVHQWWKHLQHUWLDRIWKHREMHFWUHVLVWLQJ


LWVPRYHPHQW"2ULIDXVHUWULHVWRPRYHDQREMHFWWKDWLVIL[HGLQSRVLWLRQKRZVKRXOG

WKHLQWHUIDFHVXJJHVWUHVWUDLQW" 7KRPDV &DOGHUS 

5HVSRQGLQJWRWKHVHFKDOOHQJHV7KRPDVDQG&DOGHURIIHUIRXUDGGLWLRQDODQLPDWLRQ

GHVLJQSULQFLSOHVDVDVXSSOHPHQWWR&KDQJDQG8QJDU7KH\GHVFULEHWKHVHSULQFLSOHVDV

IROORZV

• 7KHSULQFLSOHRIDWWDFKPHQWVWDWHVWKDWWKHREMHFWVEHLQJPDQLSXODWHGVKRXOGDW

DOOWLPHVUHPDLQDWWDFKHGWRWKHSRLQWHUZKLFKPDLQWDLQVWKHLPSUHVVLRQWKDWWKH

XVHULVDOZD\VLQFRQWURORIWKHDFWLRQ

• 7KHSULQFLSOHRIUHOXFWDQFHVWDWHVWKDWREMHFWVVKRXOGLQJHQHUDOVHHPUHOXFWDQW

WRFKDQJHZKLFKUHLQIRUFHVWKHLOOXVLRQRIVXEVWDQFHE\VXJJHVWLQJWKDWFKDQJLQJ

DQREMHFWUHTXLUHVHIIRUWRQWKHSDUWRIWKHXVHU

• 7KHSULQFLSOHRIVPRRWKQHVVVWDWHVWKDWREMHFWVPXVWFKDQJHLQDFRQWLQXRXV

IDVKLRQZKLFKUHGXFHVFRJQLWLYHORDGE\UHPRYLQJODUJHDQGXQH[SHFWHGFKDQJHV

LQYLVXDOLQIRUPDWLRQSUHVHQWHGWRWKHXVHU

• 7KHSULQFLSOHRIDQWLFLSDWLRQVWDWHVWKDWWKHUHVXOWRIDXVHU¶VDFWLRQPXVWEH

REYLRXVDWDOOWLPHVZKLFKUHGXFHVFRJQLWLYHORDGE\VXSSO\LQJDGGLWLRQDOYLVXDO

LQIRUPDWLRQDQGPLQLPL]LQJWKHXVHRIVKRUWWHUPPHPRU\

7RGHPRQVWUDWHKRZWKHVHSULQFLSOHVZRUNLQSUDFWLFH7KRPDVDQG&DOGHUSURYLGH

LOOXVWUDWHGH[DPSOHVRIKRZWKHVHSULQFLSOHVZRXOGZRUNLQFRPPRQLQVWDQFHVRIGLUHFW

PDQLSXODWLRQ)RUH[DPSOHLIDXVHUDWWHPSWVWRPRYHDQREMHFWWKDWLVIL[HGLQSODFHRU

³SLQQHG´WKHLQWHUIDFHPLJKWVWUHWFKSDUWRIWKHREMHFWWRFRQQHFWWRWKHXVHU¶VSRLQWRIFRQWDFW

DWWDFKPHQW 'XULQJWKHLQWHUDFWLRQWKHPDMRULW\RIWKHREMHFWZRXOGUHPDLQORFNHGLQSODFH

UHOXFWDQFH :KHQWKHREMHFWLVUHOHDVHGWKHLQWHUIDFHZRXOGGLVSOD\WKHREMHFWVSULQJLQJEDFN


LQWRLWVQDWXUDOVWDWHVRWKDWWKHXVHUFDQIXOO\DQWLFLSDWHWKHUHVXOWVRIWKHLUDFWLRQV DQWLFLSDWLRQ 

7KXVWKURXJKDQLPDWLRQWKHLQWHUIDFHSURYLGHVIHHGEDFNWKDW WKHV\VWHPNQRZVWKHXVHULV

WU\LQJWRJUDEWKHREMHFWDQG WKDWWKHREMHFWLVFXUUHQWO\ORFNHGLQSODFH S 

6LPLODUWRWKHSULQFLSOHVGHYHORSHGE\&KDQJDQG8QJDUWKHVHSULQFLSOHVGHSHQGRQWKH

VDPHWHUPLQRORJ\WKDWRULJLQDWHGLQ7KRPDVDQG-RKQVRQ¶VWZHOYHSULQFLSOHV$WWDFKPHQW

UHOXFWDQFHDQGVPRRWKQHVVZRXOGDOOIDOOXQGHUWKHFDWHJRU\RI³VROLGGUDZLQJ´LQWKHRULJLQDO

WZHOYHSULQFLSOHVDQGDQWLFLSDWLRQLVFRSLHGGLUHFWO\/LNHZLVH7KRPDVDQG&DOGHUPDLQWDLQWKH

VDPHXQHDV\ELDVWRZDUG³UHDOLVP´WKDWDSSHDUVLQRWKHUGHVLJQJXLGHOLQHV$QLPDWLRQLVPHDQW

WR³UHLQIRUFHWKHLOOXVLRQRIUHDOLW\´ S ZKLOHVLPXOWDQHRXVO\DVFULELQJWKLVUHDOLW\WRREMHFWV

WKDWKDYHQRGLUHFWSK\VLFDOUHIHUHQWVEURZVHUZLQGRZVUDGLREXWWRQVGURSGRZQPHQXVHWF

S ,QWKLVOLJKWWKHDQLPDWLRQVDUHHIIHFWLYHWRWKHH[WHQWWKDWWKH\DUHDEOHWRJRXQQRWLFHG

FRQWULEXWLQJWRWKHRVWHQVLEO\WUDQVSDUHQWPDWHULDOPHWDSKRUVRIWKHLQWHUIDFH

,QFRQWUDVWWRERWKRIWKHVHVHWVRIJHQHUDOSULQFLSOHV&KDWW\  KDVDUJXHGWKDWLWFDQ

EHGLIILFXOWWRXVHWKHVHSULQFLSOHVWRGHFLGHSUHFLVHO\ZKDWNLQGVRIDQLPDWLRQRQHVKRXOGXVHIRU

DVSHFLILFVLWXDWLRQ,I,QHHGDQREMHFWWRDSSHDUVKRXOG,DQLPDWHLWVVL]HVKDSHSODFHRUDOO

WKUHHYDULDEOHVDWRQFH"$WZKDWSRLQWLVLWZLVHWRIDGHRXWDQREMHFWHYHQLILWEUHDNVZLWKWKH

³UHDOLW\´RIWKHLQWHUIDFH"0RUHRYHUZKLOHWKHJHQHUDOSULQFLSOHVSURYLGHPDQ\WLSVIRU

GHYHORSLQJDQLQWHUIDFHWKDWIHHOV³UHDO´WKLVIRFXVRQUHDOLW\RIIHUVDOLPLWHGSHUVSHFWLYHRIWKH

FRPPXQLFDWLYHSRVVLELOLWLHVRIDQLPDWLRQ7DNHIRULQVWDQFHWKHDQLPDWLRQRIDORDGLQJEDU7KH

JUDGXDOPRYHPHQWRIDORDGLQJEDUGRHVQRWUHTXLUHH[DJJHUDWLRQRUVROLGLW\WRFRPPXQLFDWHWKH

VWDWXVRIWKHORDGLQJSURFHVVWKXVWKHUHLVOHVVQHHGWRPDNHWKHEDUDSSHDUWREH³UHDO´6WLOO

ORDGLQJEDUV DQGPRUHJHQHUDOO\ORDGLQJLPDJHVDQGLFRQV DUHRIWHQDQLPDWHGVLJQDOLQJD




GLIIHUHQWIXQFWLRQWKDQWKHLOOXVLRQRIUHDOLW\,QRUGHUWRXQGHUVWDQGWKLVUHODWLRQVKLSEHWZHHQ

JHQHUDOSULQFLSOHVDQGVSHFLILFSUDFWLFHVDQRWKHUPRGHOLVQHFHVVDU\

1RYLFN5KRGHV :HUW  FRQVWUXFWDQDOWHUQDWLYHPRGHORIDQLPDWLRQLQXVHU

LQWHUIDFHV7KHPRGHOSRLQWVWRVSHFLILFSUDFWLFHVIRUHIIHFWLYHO\DSSO\LQJDQLPDWLRQE\

FRQQHFWLQJW\SHVRIDQLPDWLRQ VXFKDVFKDQJHLQFRORU ZLWKGLIIHUHQWFRPPXQLFDWLYHIXQFWLRQV

VXFKDVVLJQDOLQJDQHZFRQWH[W $VVKRZQLQ7DEOHWKHPRGHOLQFOXGHVDWRWDORIDQLPDWLRQ

W\SHVDQGFRPPXQLFDWLYHIXQFWLRQV

7DEOH$QLPDWLRQ7\SHVDQG&RPPXQLFDWLYH)XQFWLRQV

$QLPDWLRQ7\SHV • $FKDQJHRISODFH
• $FKDQJHRIVL]H
• $FKDQJHRIVKDSH
• *HVWXUH
• 5RWDWLRQ
• $FKDQJHRIFRORU
• %OXU

&RPPXQLFDWLYH • 6LJQDOLQJFRQWH[W
)XQFWLRQV • 6LJQDOLQJYDOXH
• 6LJQDOLQJVWDWXV
• 6LJQDOLQJLPSRUWDQFHRUXUJHQF\
• 6LJQDOLQJFKDQJH
• 6LJQDOLQJUHIHUHQW
• 6LJQDOLQJ6DOLHQFH

&DWHJRULHVUHIOHFWHGLQ1RYLFN5KRGHV :HUW  



%\DVVHVVLQJWKHDSSURSULDWHQHVVRIHDFKDQLPDWLRQW\SHLQUHODWLRQWRHDFK

FRPPXQLFDWLYHIXQFWLRQ1RYLFN5KRGHV :HUWDUJXHGWKDWVRPHDQLPDWLRQW\SHVDUHPRUH

DGDSWDEOHWKDQRWKHUVDVVRPHW\SHVRIDQLPDWLRQFDQEHXVHGIRUPDQ\SXUSRVHVZKLOHRWKHUV

ZHUHRQO\XVHIXOLQVSHFLILFVLWXDWLRQV S 7KH\IRXQGWKDWDQLPDWLQJWKHVKDSHRIDQREMHFW

IRUH[DPSOHZDVDQDSSURSULDWHPHWKRGRIVKRZLQJDFKDQJHLQFRQWH[WDFKDQJHLQVWDWXVDQG


DFKDQJHLQIXQFWLRQ7KHXVHRIEOXURQWKHRWKHUKDQGZDVRQO\IRXQGWREHDSSURSULDWHIRU

FRPPXQLFDWLQJVDOLHQFH S $FFRUGLQJO\E\UHPRYLQJWKHUHODWLRQVKLSWRUHDOLVPIURPWKH

GLVFXVVLRQWKHDXWKRUVDUJXHWKDWWKLVPRGHOUDWKHUWKDQDVHWRIJHQHUDOSULQFLSOHVLVXVHIXOIRU

H[SORULQJWKHYDOXHRIQRYHOXVHVRIDQLPDWLRQWKDWPD\QRWEHOLQNHGWRPHWDSKRUVRIUHDOLW\ S

 6WLOOWKLVPRGHOLVQRWZLWKRXWLWVIODZV6HYHUDORIWKHFDWHJRULHVIRUFRPPXQLFDWLYH

IXQFWLRQVDQGDQLPDWLRQW\SHV VXFKDVJHVWXUH DUHQRWFOHDUO\GHILQHGPDNLQJLWGLIILFXOWWR

XQGHUVWDQGKRZWKHDXWKRUVFRQQHFWDQLPDWLRQWRFRPPXQLFDWLRQ/LNHZLVHWKHDFWLYHWXUQDZD\

IURPJHQHUDOSULQFLSOHVZRXOGVHHPWRRIIHUDQHDVLHUFRQYHUVLRQLQWRDSUHVFULSWLYHVHWRIUXOHV

IRUPRWLRQGHVLJQHOLGLQJKRZWKH³FRPPXQLFDWLYHIXQFWLRQV´HPHUJHIURPWKHQHHGVDQG

GHVLUHVRIWKHXVHUMXVWDVPXFKDVWKHYLVXDOVWUXFWXUHRIWKHLQWHUIDFHLWVHOI

8OWLPDWHO\WKRXJK,LQFOXGHWKLVIUDPHZRUNLQP\FRPSDULVRQEHWZHHQSUDFWLWLRQHUDQG

VFKRODUO\JXLGHOLQHV,ILQGLWOHVVXVHIXOIRUDWWHQGLQJWRWKHUKHWRULFRIDQLPDWLRQWKDQWKH

SURJUHVVLRQRIJHQHUDOSULQFLSOHV1HYHUWKHOHVV,GREHOLHYHLWLVERWKQHFHVVDU\DQGGLIILFXOWWR

DUWLFXODWHKRZDGHVLJQHUVKRXOGPRYHIURPSULQFLSOHVWRVSHFLILFSUDFWLFHVRIDQLPDWLRQDQG,

DGGUHVVWKHVDPHSUREOHPIURPDGLIIHUHQWSHUVSHFWLYHLQFKDSWHU

2WKHUVWXGLHVKDYHH[DPLQHGWKHEHQHILWVRIDQLPDWLRQIRULQWHUIDFHGHVLJQEXWGRQRW

DUWLFXODWHJXLGHOLQHVWKDWFRXOGEHXVHGWRXQGHUVWDQGWKHIXQFWLRQRIDQLPDWLRQPRUHEURDGO\

7KRXJKWKHVHVWXGLHVGRQRWILJXUHGLUHFWO\LQWRP\FRPSDULVRQVKHUHWKH\KDYHSOD\HGDQ

LPSRUWDQWUROHLQHVWDEOLVKLQJDUDQJHRISRVLWLYHHIIHFWVIRULQWHUIDFHDQLPDWLRQ%HGHUVRQDQG

%ROWPDQ  KDYHLQGLFDWHGWKDWDQLPDWLRQDLGVXVHUXQGHUVWDQGLQJRIVSDWLDOSRVLWLRQV

SRVVLEO\WKURXJKDQLQFUHDVHGVLJQDOLQJRIREMHFWSHUPDQHQFH+DUULVRQHWDO  VWXGLHGWKH

QDWXUHRIDQLPDWLRQLQSURJUHVVEDUVFRQFOXGLQJWKDWGLIIHUHQWUDWHVRIDQLPDWLRQDIIHFWWKHXVHU¶V

SHUFHSWLRQRIWLPHRIWHQHQKDQFLQJWKHXVHUH[SHULHQFHRIWKHLQWHUIDFH7UDSSDQG<DVPLQ


 KDYHHYHQGHYHORSHGDV\VWHPDWLFYRFDEXODU\IRUGHVFULELQJDQLPDWHGWUDQVLWLRQVLQ

PRELOHVWRU\ERDUGVEXLOGLQJYLWDOFRQQHFWLRQVEHWZHHQWKHXVHRIDQLPDWLRQDQGWKHZRUNIORZRI

LQWHUDFWLRQGHVLJQ ,[' DQGXVHUH[SHULHQFHGHVLJQ 8[' 7KHVHVWXGLHVDOOSRLQWWRWKHYDOXHRI

DQLPDWLRQLQPRELOHXVHULQWHUIDFHVHYHQDVWKH\HDFKSUHVHQWRQO\DSDUWLDOYLHZRIWKHHIIHFWV

RIDQLPDWLRQZLWKLQDQLQWHUIDFH

7KH'LVWLQJXLVKLQJ7UDLWVRI0RELOH,QWHUIDFHV

7KHUHDUHPDQ\VLPLODULWLHVEHWZHHQPRELOHDQGGHVNWRSLQWHUIDFHGHVLJQV0DQ\RIWKH

XVDELOLW\KHXULVWLFVWKDWDUHFRPPRQO\XVHGWRGHYHORSDQGHYDOXDWHLQWHUIDFHVFDQEHDSSOLHGWR

ERWKPRELOHDQGGHVNWRSVLWXDWLRQV 6DOD]DU 6RPHGHVLJQSKLORVRSKLHVLQ8;DOVREOXU

WKHUHODWLRQVKLSEHWZHHQPRELOHDQGGHVNWRSLQWHUIDFHVWKURXJKPRELOHILUVWRUUHVSRQVLYHGHVLJQ

VWUDWHJLHV 0XOOHQV 

7KHPRVWREYLRXVGLVWLQJXLVKLQJIDFWRURIPRELOHLQWHUIDFHVLVWKHOLPLWHGVFUHHQVSDFHLQ

UHODWLRQWRDWUDGLWLRQDOGHVNWRS'XHWRVPDOOHUVFUHHQVPRELOHDSSOLFDWLRQVDQGPRELOHZHEVLWHV

RIWHQGHYLDWHIURPWKH:,03 ZLQGRZVLFRQVPHQXVDQGSRLQWHU VW\OHXVHGWRVWUXFWXUH

GHVNWRSDSSOLFDWLRQV0RVW³ZLQGRZV´LQPRELOHDSSOLFDWLRQVILOOWKHHQWLUHLQWHUIDFHDQGPHQXV

PXVWUHPDLQFROODSVHGDVLFRQVZKHQQRWLQXVH7KH³SRLQWHU´LVDOVRDEDQGRQHGLQIDYRURI

SK\VLFDOVZLSHVWDSVDQGWKHPRWLRQRIWKHGHYLFHLWVHOI :DVVHUPDQ 7KHVHFKDQJHV

KDYHDGLUHFWLPSDFWRQWKHFRQWHQWRIPRELOHRSWLPL]HGLQWHUIDFHVDVLWHQFRXUDJHVGHYHORSHUV

WRLQFOXGHOHVVIHDWXUHVOHVVFRQWHQWDQGODUJHULQWHUIDFHHOHPHQWV 1LHOVHQ 

7KHXVHUH[SHULHQFHRIDPRELOHGHYLFHLVDOVRKHDYLO\LQIOXHQFHGE\WKHSURFHVVLQJ

SRZHURIWKHGHYLFHDQGWKHVWUHQJWKRIWKHXVHU¶VZLUHOHVVQHWZRUN0RELOHXVHUVRIWHQVHHNWR


TXLFNO\FRPSOHWHDVLPSOHWDVN 1LHOVHQ EXWVSHHGRIFRPSOHWLQJHYHQDEDVLFWDVNOLNH

RSHQLQJDZHESDJHFDQFKDQJHGUDVWLFDOO\EDVHGRQWKHGHYLFHWKHPRELOHVHUYLFHSURYLGHUDQG

WKHORFDWLRQRIWKHXVHU$VDUHVXOWPRELOHLQWHUIDFHVRIWHQUHTXLUHPRUHLQGLFDWLRQVRIZKHQWKH

GHYLFHLVSURFHVVLQJDSDUWLFXODURSHUDWLRQVXFKDVORDGLQJDZHESDJHRURSHQLQJDQDSSOLFDWLRQ

(DFKPRELOHSODWIRUPDOVRHQFRXUDJHVVWURQJFRQQHFWLRQVEHWZHHQWKHGHVLJQRILQGLYLGXDO

DSSOLFDWLRQVDQGWKHEXLOWLQGHVLJQVRIWKHSODWIRUP :DVVHUPDQ $SSOLFDWLRQVWKDWDUH

³QDWLYH´WRDSDUWLFXODUSODWIRUPPD\LQFRUSRUDWHVSHFLILFQDYLJDWLRQSDWWHUQVLFRQRJUDSK\DQG

HYHQFRORUSDOHWWHVLQRUGHUWRHDVHWKHWUDQVLWLRQIURPRQHDSSOLFDWLRQWRDQRWKHU2QHZRXOG

H[SHFWWKDWWKHDQLPDWLRQJXLGHOLQHVIRUPRELOHXVHULQWHUIDFHVVKRXOGUHIOHFWWKHVHGLIIHUHQW

IDFWRUV

&XUUHQW6W\OH*XLGHOLQHVIRU$QLPDWLRQ

2YHUWKHSDVWILYH\HDUVPDMRUPRELOHSODWIRUPV$SSOH*RRJOHDQG0LFURVRIWKDYH

SXEOLVKHGLQFUHDVLQJO\H[WHQVLYHJXLGHOLQHVIRUGHVLJQLQJDQLPDWLRQIRUXVHULQWHUIDFHV,QWKH

SDVWDQLPDWLRQJXLGHOLQHVZHUHRIWHQOLPLWHGWRLPSOHPHQWDWLRQWHFKQLTXHV±VQLSSHWVRIFRGH

DQG$3,VWKDWWHOOGHYHORSHUVKRZWRLQFRUSRUDWHDQLPDWLRQLQWRWKHLUGHVLJQV0RUHJHQHUDO

GHVLJQJXLGHOLQHVIRUWKHLQWHUIDFHGLVFXVVHGDQLPDWLRQRQO\WKURXJKLPSOLFLWDQGWDQJHQWLDO

DVVRFLDWLRQVDVVXPLQJWKDWGHYHORSHUVZRXOGRQO\LQWHJUDWHDQLPDWLRQVLQOLPLWHGFRQWH[WV

1RYLFN5KRGHV :HUW 

7RGD\HDFKRIWKHPDMRUPRELOHSODWIRUPVSURYLGHJHQHUDOJXLGHOLQHVIRUDQLPDWLRQ

WKRXJKWKH\GLIIHULQKRZWKH\IUDPHWKHVHJXLGHOLQHVUHODWLYHWRWKHLQWHUIDFHDVDZKROH,QWKH

IROORZLQJVHFWLRQ,VXUYH\WKHVHJXLGHOLQHVLQWHUPVRIJHQHUDOSULQFLSOHVDQGVSHFLILFSUDFWLFHV,

GHILQHJHQHUDOSULQFLSOHVDVJXLGHOLQHVWKDWFDQEHDSSOLHGWRDYDULHW\RIGHVLJQSUREOHPVDQG


DUHQRWOLPLWHGWRDVSHFLILFW\SHRIDQLPDWLRQRUGHVLJQSDWWHUQ,GHILQHVSHFLILFSUDFWLFHVDV

DGYLFHDERXWVSHFLILFDQLPDWLRQW\SHVDQGGHVLJQSDWWHUQV7KHJXLGHOLQHVFRQVLGHUHGUHSUHVHQW

WKRVHWKDWZRXOGEHPRVWOLNHO\EHXVHGWRGHVLJQWKHPRELOHSKRQHRIDSDUWLFXODURSHUDWLQJ

V\VWHPH[FOXGLQJJXLGHOLQHVVSHFLILFDOO\WDUJHWHGDWGHVNWRSLQWHUIDFHVEXWLQFOXGLQJJXLGHOLQHV

PHDQWWREHXVHGDFURVVERWKPRELOHDQGGHVNWRSLQWHUIDFHV

,WLVZRUWKQRWLQJWKDWWKHJXLGHOLQHVGLVFXVVHGKHUHZHUHFXUUHQWDVRI-XQHDQG

WKDWWKHWHUPLQRORJ\H[DPSOHVDQGRUJDQL]DWLRQRIWKHJXLGHOLQHVZLOOOLNHO\FKDQJHHYHQSULRU

WRWKHSXEOLFDWLRQRIWKLVGLVVHUWDWLRQ7KLVLVSDUWLDOO\EHFDXVHRSHUDWLQJV\VWHPVDQG

DSSOLFDWLRQVUDUHO\PDLQWDLQWKHVDPHYLVXDOVW\OHIRUPRUHWKDQDIHZ\HDUVDWDWLPHDQG

SODWIRUPVDUHFRQVWDQWO\WZHDNLQJWKHLUYLVXDOVW\OHWRHQVXUHGLVWLQFWLRQDQGXVDELOLW\+RZHYHU

LWLVDOVREHFDXVHFRPSDQLHVDUHVWLOOXQVXUHDERXWKRZWREHVWIUDPHDQLPDWLRQIRUGHVLJQHUV

L26*XLGHOLQHV

7KRXJK$SSOH¶VL26+XPDQ,QWHUIDFH*XLGHOLQHV  IHDWXUHDQLPDWLRQXQGHUWKH

KHDGLQJRI³8,'HVLJQ%DVLFV´WKHVHJXLGHOLQHVDUHOLPLWHGWRDVPDOOVLQJOHZHESDJHIHDWXULQJ

WKUHHEXOOHWSRLQWVRQWKHXVHVRIDQLPDWLRQDQGIRXUJHQHUDOSULQFLSOHVIRULQFRUSRUDWLQJ

DQLPDWLRQVLQL267KHODFNRIGHWDLORIWKLVSDJHPD\EHGXHWRVLJQLILFDQWRYHUODSEHWZHHQWKH

GLIIHUHQWFDWHJRULHVOLVWHGXQGHU³8,'HVLJQ%DVLFV´1DYLJDWLRQPRGDOFRQWH[WVLQWHUDFWLYLW\

DQGIHHGEDFNDUHDOOOLVWHGXQGHUWKHLURZQVHFWLRQVRIWKHJXLGHOLQHVGHVSLWHWKHIDFWWKDWWKHVH

FRQFHSWVSOD\DVLJQLILFDQWUROHLQDFDGHPLFGLVFXVVLRQVRILQWHUIDFHDQLPDWLRQ7KHJXLGHOLQHV

PHQWLRQRQO\RQHVSHFLILFSUDFWLFH VOLGLQJDQREMHFWGRZQIURPWKHWRSRIWKHVFUHHQ DQGWKLV

SUDFWLFHLVRQO\PHQWLRQHGLQRUGHUWRFODULI\RQHRIWKHSULQFLSOHV


'HVSLWHWKHEUHYLW\RIWKHSDJHWKHJXLGHOLQHVDUWLFXODWHIRXUJHQHUDOSULQFLSOHVIRU

GHVLJQLQJDQLPDWLRQ

 $GGDQLPDWLRQFDXWLRXVO\HVSHFLDOO\LQDSSVWKDWGRQ¶WSURYLGHDQLPPHUVLYH

H[SHULHQFH

 :KHQDSSURSULDWHPDNHFXVWRPDQLPDWLRQFRQVLVWHQWZLWKEXLOWLQDQLPDWLRQ

 8VHDQLPDWLRQFRQVLVWHQWO\WKURXJKRXW\RXUDSS

 ,QJHQHUDOVWULYHIRUUHDOLVPDQGFUHGLELOLW\LQFXVWRPDQLPDWLRQ

$GGLWLRQDOO\WKHJXLGHOLQHVOLVWWKUHHSRWHQWLDODIIRUGDQFHVRIDQLPDWLRQFRPPXQLFDWLQJ

VWDWXVDQGIHHGEDFNHQKDQFLQJWKHVHQVHRIGLUHFWPDQLSXODWLRQDQGKHOSLQJWKHXVHUWRYLVXDOL]H

WKHUHVXOWVRIWKHLUDFWLRQV+RZHYHUGHVSLWHWKLVHQFRXUDJHPHQWWKHL26UHSUHVHQWDUHODWLYHO\

ZDU\VWDQFHWRZDUGDQLPDWLRQDGYLVLQJDJDLQVWH[SHULPHQWDORULQQRYDWLYHXVHVRIDQLPDWLRQ

H[FHSWZKHQQHHGHGWRFUHDWHDQ³LPPHUVLYHH[SHULHQFH´$GGLWLRQDOO\WKRXJKWKHJXLGHOLQHV

UHLWHUDWHWKHQHHGIRUFRQVLVWHQF\WKH\GRQRWGLVFXVVKRZWKLVFRQVLVWHQF\FDQEHHVWDEOLVKHG

DQGPDLQWDLQHG,QWKLVVDPHYHLQGHVLJQHUVPD\DVNFRQVLVWHQWZLWKZKDW":KDWDUHWKH

FKDUDFWHULVWLFVRIWKHEXLOWLQDQLPDWLRQVLQL26":LWKRXWDGYLFHDERXWKRZGHVLJQHUVVKRXOGXVH

DQLPDWLRQWRZDUGWKHDIIRUGDQFHVRIIHHGEDFNDQGLQWHUDFWLYLW\WKHJXLGHOLQHVLPSO\WKDW

GHVLJQHUVVKRXOGSULPDULO\VWLFNWRWKHGHIDXOWL26DQLPDWLRQVW\OH

8:3*XLGHOLQHV

6LPLODUWRWKHJXLGHOLQHVIRUL260LFURVRIWFDWHJRUL]HVDQLPDWLRQDVDQHVVHQWLDO

FRPSRQHQWRIWKH8QLYHUVDO:LQGRZV3ODWIRUP 8:3  -DFREVD 7KHJXLGHOLQHVGLYLGH

WKHWRSLFLQWRWZRVHFWLRQVDQRYHUYLHZRIWKHEHQHILWVRIDQLPDWLRQDQGDOLVWRIVSHFLILF

DQLPDWLRQW\SHV,KDYHUHSURGXFHGWKHPDLQKHDGLQJVRIWKHVHVHFWLRQVLQ7DEOH


7DEOH%HQHILWVDQG7\SHVRI$QLPDWLRQ5HIHUHQFHGLQ8:3*XLGHOLQHV


%HQHILWVRI$QLPDWLRQ $QLPDWLRQ7\SHV

• *LYHVIHHGEDFNEDVHGRQXVHUEHKDYLRU • $GG'HOHWH
• $GGVKLQWVWRZDUGVLQWHUDFWLRQ • 'UDJDQG'URS
• *LYHVWKHLPSUHVVLRQRIHQKDQFHGSHUIRUPDQFH • (GJH
• $GGVSHUVRQDOLW\ • )DGH
• $GGVFRQVLVWHQF\ • 3RLQWHU
• $GGVHOHJDQFH • 3RS8S
• 5HSRVLWLRQ
1RWH7KHEHQHILWVDQGW\SHVGLVFXVVHGDERYHDUHWDNHQIURP-DFRE D 

%\GHVFULELQJWKHEHQHILWVRIDQLPDWLRQWKHJXLGHOLQHVDLPWRUHDVVXUHWKRVHZKRPLJKW

VWLOOEHVNHSWLFDORIDQLPDWLRQHVSHFLDOO\WKRVHZKRUHFDOOWKHIUXVWUDWLRQRUFRQIXVLRQRIZRUNLQJ

ZLWKDSRRUO\FRQFHLYHGDQLPDWHGLQWHUIDFHVGHYHORSHGLQ$GREH)ODVK 1LHOVHQ 7KLV

VXSSRUWLYHHWKRVFLUFXODWHVLQWKHEULHIGHVFULSWLRQVRIHDFKEHQHILW)RUH[DPSOHH[SODLQLQJKRZ

DQLPDWLRQFDQ³DGGSHUVRQDOLW\´WKHJXLGHOLQHVFODULI\WKDWDQLPDWLRQFDQ³FUHDWHWKHLPSUHVVLRQ

WKDWDQDSSLVFRQFHUQHGZLWKWKHKHUHDQGQRZDQGKHOSVFRXQWHUDFWWKHVHQVDWLRQWKDWWKHXVHU

LVEXUURZLQJLQWRQHVWHGKLHUDUFKLHV´ -DFREDSDUD $VVXPLQJWKHRSSRVLWHVWDQFHRI

$SSOH¶VL26JXLGHOLQHVWKH8:3JXLGHOLQHVRIIHUPRUHHQFRXUDJHPHQWWKDQFDXWLRQIRU

GHVLJQLQJWKHDQLPDWLRQRILQWHUIDFHHOHPHQWV

8QIRUWXQDWHO\WKHVHFWLRQIRFXVLQJRQDQLPDWLRQW\SHVGRHVQRWHVWDEOLVKDVWURQJ

FRQQHFWLRQWRWKHILUVWVHFWLRQRQWKHEHQHILWVRIDQLPDWLRQ,QVWHDGWKLVOLVWDFWVDVDVKRUW

LQWURGXFWLRQWRDIHZRIWKHVSHFLILFDQLPDWLRQVWKDWDUHFRPPRQO\XVHGLQ8:3)RUH[DPSOH

$GG'HOHWHLVGHVFULEHGDV³/LVWDQLPDWLRQVOHW\RXLQVHUWRUUHPRYHVLQJOHRUPXOWLSOHLWHPV

IURPDFROOHFWLRQVXFKDVDSKRWRDOEXPRUDOLVWRIVHDUFKUHVXOWV´ -DFREVDSDUD 

7KHUHLVQRGHVFULSWLRQRIKRZWKLVIXQFWLRQVDVDQDQLPDWLRQRUKRZLWDFKLHYHVWKHSRWHQWLDO

EHQHILWVRIDQLPDWLRQ,QVWHDGHDFKDQLPDWLRQW\SHLVOLQNHGWRLWVRZQLQGLYLGXDOZHESDJHIRU


GHHSHUH[SODQDWLRQFRQVLVWLQJODUJHO\RISUHVFULSWLYH³'R¶VDQG'RQ¶WV´WKDWDUHOLPLWHGWRWKH

8:3LQWHUIDFH -DFREVE ,WLVXOWLPDWHO\XQFOHDUKRZWKHEHQHILWVVHFWLRQDQGWKHVW\OH

VHFWLRQILWWRJHWKHU6WLOOWKHDWWHQWLRQWRWKHVHLQGLYLGXDODQLPDWLRQVW\OHVDVZHOODVWKH

GLVFXVVLRQRIUROHRIDQLPDWLRQLQWKH³SHUVRQDOLW\´RIWKHLQWHUIDFHVXJJHVWWKDWGHVLJQHUVVKRXOG

DGMXVWDQGFXVWRPL]HDQLPDWLRQEH\RQGWKHGHIDXOWVHWWLQJVLQRUGHUWRGHVLJQVXFFHVVIXO

DSSOLFDWLRQV

0DWHULDO'HVLJQ*XLGHOLQHV

5HOHDVHGE\*RRJOHLQPDWHULDOGHVLJQLVLQWHQGHGWRVHUYHDVDXQLYHUVDOGHVLJQ

ODQJXDJHWKDW³V\QWKHVL]HVFODVVLFSULQFLSOHVRIJRRGGHVLJQZLWKWKHLQQRYDWLRQDQGSRVVLELOLW\

RIWHFKQRORJ\DQGVFLHQFH´ 0DWHULDO'HVLJQ*XLGHOLQHVDSDUD 7KHORIW\ODQJXDJHRI

LQQRYDWLRQLQWKLVGHILQLWLRQUHIHUVWRWKHDWWHPSWWROLQNHYHU\YLVXDOFXHDQGLQWHUDFWLRQZLWKWKH

LQWHUIDFHWRDPDWHULDOPHWDSKRU KHQFH³PDWHULDO´GHVLJQ 8QOLNHUHDOSDSHURXUGLJLWDO

PDWHULDOFDQH[SDQGDQGUHIRUPLQWHOOLJHQWO\´H[SODLQHG*RRJOH¶VGLUHFWRURIXVHUH[SHULHQFH

³0DWHULDOKDVSK\VLFDOVXUIDFHVDQGHGJHV6HDPVDQGVKDGRZVSURYLGHPHDQLQJDERXWZKDW\RX

FDQWRXFK´ %ULDQSDUD ,QODUJHSDUWGXHWRWKLVIRFXVRQPDWHULDOPHWDSKRUV*RRJOH¶V

PDWHULDOGHVLJQSDUDGLJPFXUUHQWO\RIIHUVWKHPRVWH[WHQVLYHVHWRIJXLGHOLQHVIRUGHVLJQLQJ

DQLPDWLRQIRUXVHULQWHUIDFHV

8QOLNHWKHJXLGHOLQHVIRUL26DQG8:3PDWHULDOGHVLJQIUDPHVDQLPDWLRQDVRQHRIWKH

FHQWUDOFKDUDFWHULVWLFVRIWKHLQWHUIDFH±PRUHLPSRUWDQWWKDQRWKHUVW\OLVWLFTXDOLWLHVVXFKDVFRORU

RUW\SRJUDSK\2QHRIWKHFRUHSULQFLSOHVRIPDWHULDOGHVLJQ³PRWLRQSURYLGHVPHDQLQJ´

XQGHUVFRUHVWKHKRZDQLPDWLRQLVWREHYLHZHGDVDPDQGDWRU\DVSHFWRIWKLVGHVLJQIUDPHZRUN

0DWHULDO'HVLJQ*XLGHOLQHVD ,QDVLPLODUPRYHDV8:3PDWHULDOGHVLJQGLVSOD\VPRUH

DIILQLW\IRUWKHWHUPLQRORJ\RI³PRWLRQ´DQG³PRYHPHQW´WKDQWKHWHUP³DQLPDWLRQ´WKRXJK


PDQ\RIWKHH[DPSOHVGLVSOD\HGLQWKHPDWHULDOGHVLJQJXLGHOLQHVDUHVWLOOUHIHUHQFHGDV

DQLPDWLRQV

%HFDXVHDQLPDWLRQLVEXLOWLQWRWKHIRXQGDWLRQRIWKHGHVLJQSKLORVRSK\WKHPDWHULDOGHVLJQ

JXLGHOLQHVIRUDQLPDWLRQIHDWXUHDUDQJHRIGHVLJQSULQFLSOHVDQLPDWLRQW\SHVDQGVSHFLILF

SUDFWLFHV,QRUGHUWRGLYLGHWKLVJOXWRILQIRUPDWLRQLQWRDVHWRIJHQHUDOSULQFLSOHV,XVHGWKH

KHDGLQJVIURPHDFKRIWKHPDMRUVXESDJHRI³$QLPDWLRQ´OLVWHGLQWKHGHVLJQJXLGHOLQHV

0DWHULDO'HVLJQ*XLGHOLQHVG ,WKHQXVHGWKHLQWURGXFWLRQVWRHDFKRIWKRVHSDJHVDVD

PHWKRGRIH[SODLQLQJWKHSULQFLSOH7KRVHKHDGLQJVDQGWKHLUGHVFULSWLRQVDUHOLVWHGEHORZ

• $XWKHQWLF0RWLRQ-XVWDVWKHVKDSHRIDQREMHFWLQGLFDWHVKRZLWPLJKWEHKDYH

ZDWFKLQJDQREMHFWPRYHGHPRQVWUDWHVZKHWKHULW¶VOLJKWKHDY\IOH[LEOHULJLGVPDOORU

ODUJH

• 5HVSRQVLYH,QWHUDFWLRQ,QWHUDFWLRQHQFRXUDJHVGHHSHUH[SORUDWLRQRIDQDSSE\FUHDWLQJ

WLPHO\ORJLFDODQGGHOLJKWIXOVFUHHQUHDFWLRQVWRXVHULQSXW(DFKLQWHUDFWLRQLV

WKRXJKWIXOSHUKDSVZKLPVLFDOEXWQHYHUGLVWUDFWLQJ

• 0HDQLQJIXO7UDQVLWLRQV8VHPRWLRQWRVPRRWKO\WUDQVSRUWXVHUVEHWZHHQQDYLJDWLRQDO

FRQWH[WVH[SODLQFKDQJHVLQWKHDUUDQJHPHQWRIHOHPHQWVRQDVFUHHQDQGUHLQIRUFH

HOHPHQWKLHUDUFK\

• 'HOLJKWIXO'HWDLOV$QLPDWLRQFDQH[LVWZLWKLQDOOFRPSRQHQWVRIDQDSSDQGDWDOO

VFDOHVIURPGHWDLOHGLFRQVWRNH\WUDQVLWLRQVDQGDFWLRQV

7KHVHGHVLJQSULQFLSOHVDUHVRPHZKDWVLPLODUWRWKHEHQHILWVRIDQLPDWLRQVHFWLRQIRXQG

LQWKH8:3JXLGHOLQHV -DFREVD %RWKDQVZHUWKHTXHVWLRQ³ZKDWDUHVRPHJHQHUDOZD\V

WKDWDQLPDWLRQFDQEHXVHGWRFRPPXQLFDWH"´+RZHYHULQWKHFRQWH[WRIWKHPDWHULDOGHVLJQ

JXLGHOLQHVWKHVHSULQFLSOHVOLVWHGDERYHUHSUHVHQWRQO\WKHWRSOD\HULQDKLHUDUFK\RI


LQFUHDVLQJO\VSHFLILFGHVLJQODQJXDJH(DFKSULQFLSOHLVGLYLGHGLQWRVHYHUDOVXESULQFLSOHV

ZKLFKLQWXUQDUHSDLUHGZLWKFRQFUHWHH[DPSOHVDQGDQLPDWHGJLIVWRGHPRQVWUDWHHDFKFRQFHSW

0DWHULDO'HVLJQ*XLGHOLQHVG 7KXVZKLOHERWKVHWVRISULQFLSOHVRIIHUJHQHUDOGLUHFWLRQV

IRUXVLQJDQLPDWLRQHIIHFWLYHO\WKHPDWHULDOGHVLJQJXLGHOLQHVPDNHGLUHFWFRQQHFWLRQVEHWZHHQ

JHQHUDOSULQFLSOHVDQGVSHFLILFSUDFWLFHV*LYHQWKHFRPSOH[VWUXFWXUHRIWKHDQLPDWLRQ

JXLGHOLQHVIRUPDWHULDOGHVLJQLWLVQRWSRVVLEOHWRFDWDORJXHRUDFFRXQWIRUDOORIWKHVSHFLILF

SUDFWLFHVWKURXJKDQLQYHQWRU\RIDQLPDWLRQW\SHVRUSUHVFULSWLYHJXLGHOLQHV6WLOOEHFDXVHWKH

JXLGHOLQHVDUHVRH[WHQVLYHDQGPDNHVXFKDQH[SOLFLWFODLPWRXQLYHUVDOLW\WKH\DUHSDUWLFXODUO\

YDOXDEOHIRUWKHSUHVHQWVWXG\

&RPSDULVRQRI*HQHUDO3ULQFLSOHV

7KHGHVLJQJXLGHOLQHVIRUL268:3DQG0DWHULDO'HVLJQDOOSUHVHQWGLVWLQFWDSSURDFKHV

WRDQLPDWLRQQRQHRIZKLFKFDQUHSUHVHQWWKHWRWDOLW\RIHPHUJLQJSULQFLSOHVRUVSHFLILF

SUDFWLFHV-XVWDVZLWKSDUWLFXODUFRORURUQDYLJDWLRQSDWWHUQVWKHJXLGHOLQHVIRUDQLPDWLRQDUH

LQWULQVLFDOO\SODWIRUPVSHFLILFHYHQZKLOHWKH\PD\FODLPWKHLUGHVLJQLVEDVHGRQ³SXUH´

VHPLRWLFVRUXQLYHUVDOSULQFLSOHV)RUWKLVUHDVRQ,FRPSDUHWKHDQLPDWLRQJXLGHOLQHVSURSRVHG

E\UHVHDUFKHUVLQKXPDQFRPSXWHULQWHUDFWLRQWRDOOWKUHHRIWKHFXUUHQWGHVLJQJXLGHOLQHV

,QRUGHUWRFRPSDUHWKHDSSURDFKHV,VHDUFKHGHDFKRIWKHWKUHHFXUUHQWGHVLJQJXLGHOLQHV

IRUGLVFXVVLRQVUHODWHGWRWKHVHYHQGHVLJQSULQFLSOHVIURP&KDQJDQG8QJDU  DQG7KRPDV

DQG&DOGHU  ,I,IRXQGDVWDWHPHQWLQFXUUHQWJXLGHOLQHVWKDWPLUURUHGRQHRIWKHVHYHQ

WUDGLWLRQDOGHVLJQSULQFLSOHV,FRQVLGHUHGLWGLVFXVVHG,I,FRXOGILQGQRWUDFHRIRQHRIWKH

WUDGLWLRQDOGHVLJQSULQFLSOHV,FRQVLGHUHGLWQRWGLVFXVVHG,I,IRXQGDVWDWHPHQWWKDWSDUWLDOO\

UHVHPEOHGRQHRIWKHSULQFLSOHV,FRQVLGHUHGLWWREHWDQJHQWLDOO\GLVFXVVHG


)RUH[DPSOHSULQFLSOHRIDWWDFKPHQWSURSRVHGE\7KRPDVDQG&DOGHU  VWDWHVWKDW

³WKHREMHFWVKRXOGUHPDLQDWWDFKHGWRWKHSRLQWHUZKLFKPDLQWDLQVWKHLPSUHVVLRQWKDWWKHXVHULV

DOZD\VLQFRQWURORIWKHDFWLRQ´ S 7KHL26JXLGHOLQHVGRQRWPDNHDQ\VWDWHPHQWVDERXW

DWWDFKLQJREMHFWVWRDSRLQWHURIDQ\VRUWEXWWKH\GRPHQWLRQWKHQHHGWR³HQKDQFHWKHVHQVHRI

GLUHFWPDQLSXODWLRQ´ 0DWHULDO'HVLJQ*XLGHOLQHVDSDUD ,PDUNHGWKLVFDVHDV

³WDQJHQWLDOO\GLVFXVVHG´EHFDXVHWKHVWDWHPHQWRQO\UHIOHFWHGWKHLGHDWKDWWKHXVHUVKRXOGEHLQ

FRQWUROEXWGRHVQRWPHQWLRQWKHDWWDFKPHQWSHUVH

$IWHU,DFFRXQWHGIRUWKHSUHVHQFHRUDEVHQFHRIWKHSULQFLSOHVLQDOOWKUHHVHWVRI

FRQWHPSRUDU\JXLGHOLQHV,WRRNRQHILQDOSDVVWRLGHQWLI\NH\WHUPVDQGRUSULQFLSOHVLQWKH

FXUUHQWJXLGHOLQHVWKDWZHUHQRWFDSWXUHGE\HLWKHUVHWRIDFDGHPLFDOO\GHILQHGGHVLJQSULQFLSOHV

IRU8,DQLPDWLRQ7KHUHVXOWVRIWKLVSURFHVVDUHGRFXPHQWHGLQ7DEOH 

2QHFOHDUFRQQHFWLRQEHWZHHQWKHDFDGHPLFSULQFLSOHVDQGQHZJXLGHOLQHVZDV

UHLQIRUFHPHQWDSULQFLSOHZKLFKDGYLVHVWKHXVHRIVXEWOHDQLPDWLRQVLQRUGHUWRUHLQIRUFHDQ

³LOOXVLRQRIUHDOLW\´IRUWKHLQWHUIDFH &KDQJ 8QJDUS 7KXVDV,H[DPLQHGWKH

FXUUHQWJXLGHOLQHVIRUUHLQIRUFHPHQW,VHDUFKHGIRUWKHVXJJHVWLRQWKDWGHVLJQHUVVKRXOGVWULYHWR

FUHDWHWKHLOOXVLRQRIUHDOLW\$OOWKUHHVHWVRIJXLGHOLQHVPHQWLRQHGDQHHGIRULQGLFDWLQJWKDWWKH

LQWHUIDFHZDV³UHDO´LQVRPHZD\WKRXJKRQO\WKHPDWHULDOGHVLJQJXLGHOLQHVH[SODLQZKDWLW

PHDQWWRFUHDWHWKDWUHDOLW\

7KHSULQFLSOHRIVROLGLW\ZKLFKZRXOGDSSHDUWRJRKDQGLQKDQGZLWKWKH³UHDOLW\´RI

UHLQIRUFHPHQWZDVPXFKKDUGHUWRGHWHFW&KDQJDQG8QJDU  GHILQHVROLGLW\LQWHUPVRI

WKHREMHFWVZLWKLQWKHYLVXDOVSDFHRIWKHLQWHUIDFH'HVLJQHOHPHQWVVKRXOG³PRYHDERXWDVLI

WKH\DUHWKUHHGLPHQVLRQDOUHDOWKLQJVWKH\UHDFWWRH[WHUQDOIRUFHVDVLIWKH\KDYHPDVVDQGDUH

VXVFHSWLEOHWRLQHUWLD´ S 


7DEOH&RPSDULVRQEHWZHHQ$FDGHPLF3ULQFLSOHVDQG&XUUHQW*XLGHOLQHV


 0DWHULDO'HVLJQ
L26*XLGHOLQHVD 8:3*XLGHOLQHVE
*XLGHOLQHVF
&KDQJDQG8QJDU  

7DQJHQWLDOO\GLVFXVVHG
'LVFXVVHG
7DQJHQWLDOO\GLVFXVVHG
³$QLPDWLRQLVDWRROIRU
6ROLGLW\ ³,QJHQHUDOVWULYHIRU FUHDWLQJDSK\VLFDOHFRV\VWHP
³0RWLRQLQPDWHULDOGHVLJQVKRXOG
HPEUDFHWKHIDPLOLDULW\DQGUHDOZRUOG
UHDOLVP´  IRUWKHXVHUWROLYHLQVLGHDQG
EHKDYLRURISK\VLFDOREMHFWV´ 
PDQLSXODWHWKURXJKWRXFK´ 

([DJJHUDWLRQ 1RWGLVFXVVHG 1RWGLVFXVVHG 1RWGLVFXVVHG

'LVFXVVHG 'LVFXVVHG
'LVFXVVHG
³,QJHQHUDOVWULYHIRU ³$QLPDWLRQLVDWRROIRU
5HLQIRUFHPHQW UHDOLVP´DQG FUHDWLQJDSK\VLFDOHFRV\VWHP
0RWLRQLQPDWHULDOGHVLJQVKRXOG
HPEUDFHWKHIDPLOLDULW\DQGUHDOZRUOG
³LPPHUVLYH IRUWKHXVHUWROLYHLQVLGHDQG
EHKDYLRURISK\VLFDOREMHFWV´ 
H[SHULHQFH´  PDQLSXODWHWKURXJKWRXFK´ 

7KRPDVDQG&DXOGHU  

7DQJHQWLDOO\GLVFXVVHG
7DQJHQWLDOO\GLVFXVVHG 'LVFXVVHG
³7KHTXDOLW\RIWKH
$WWDFKPHQW ³«HQKDQFHWKHVHQVH H[SHULHQFHGHSHQGVRQKRZ ³«PDWHULDOFDQOLIWXSZKHQWRXFKHG
RIGLUHFWPDQLSXODWLRQ´  ZHOOWKHDSSUHVSRQGVWRWKH LQGLFDWLQJDQDFWLYHVWDWH´ 
XVHU´ 

7DQJHQWLDOO\GLVFXVVHG
³1RWDOOREMHFWVPRYHWKHVDPHZD\
5HOXFWDQFH 1RWGLVFXVVHG 1RWGLVFXVVHG /LJKWHURUVPDOOHUREMHFWVPD\PRYH
IDVWHUEHFDXVHWKH\UHTXLUHOHVVIRUFH
DQGODUJHURUKHDYLHUREMHFWVPD\QHHG
PRUHWLPHWRVSHHGXS´ 

'LVFXVVHG
7DQJHQWLDOO\GLVFXVVHG 'LVFXVVHG
6PRRWKQHVV ³,QJHQHUDOVWULYHIRU ³«WKHLPSUHVVLRQRI
³&KDQJHVLQDFFHOHUDWLRQRU
GHFHOHUDWLRQVKRXOGEHVPRRWKDFURVV
UHDOLVP´  HQKDQFHGSHUIRUPDQFH«´  WKHGXUDWLRQRIDQDQLPDWLRQ 

'LVFXVVHG 7DQJHQWLDOO\GLVFXVVHG
'LVFXVVHG
$QWLFLSDWLRQ ³«XVHUVYLVXDOL]HWKH
³«GUDZLQJDQDORJLHVZLWK ³«DFNQRZOHGJHLQSXWLPPHGLDWHO\DQG
WDVNVWKHXVHULVDOUHDG\ DQLPDWHLQZD\VWKDWORRNDQGIHHOOLNH
UHVXOWVRIWKHLUDFWLRQV´  IDPLOLDUZLWK´  GLUHFWPDQLSXODWLRQ´ 

7RSLFVQRWFRYHUHGE\WUDGLWLRQDOGHVLJQSULQFLSOHV

FRQVLVWHQF\SHUVRQDOLW\ PDVVDQGZHLJKWH[SORUDWLRQ
 FRQVLVWHQF\FDXWLRQ HOHJDQFHHQKDQFHG SUHVVXUHFRQWLQXLW\WLPLQJ
SHUIRUPDQFH FKRUHRJUDSK\GHOLJKW

D
$SSOH  E-DFREV  DF0DWHULDO'HVLJQ*XLGHOLQHV  




6XUSULVLQJO\ZKLOHFXUUHQWJXLGHOLQHVLQYDULDEO\PHQWLRQHGWKHLOOXVLRQRIUHDOLW\ZLWKLQWKH

LQWHUIDFHRQO\WKHPDWHULDOGHVLJQJXLGHOLQHVPHQWLRQHGKRZWKHPRYHPHQWRIREMHFWVKHOSWR

SURGXFHWKLVLOOXVLRQ,QFRQWUDVWWKH8:3JXLGHOLQHVUHIHUHQFHWKHLQWHUIDFHDVD³SK\VLFDO

HFRV\VWHP´WKDWWKHXVHU³OLYHVLQVLGH´EXWWKLVLVRQO\WDQJHQWLDOO\UHODWHGWRVROLGLW\DVWKHUHLV

OLWWOHPHQWLRQRIGHVLJQLQJWKHEHKDYLRURILQGLYLGXDOREMHFWV

,WZDVDOVRYHU\GLIILFXOWWRGUDZFRQQHFWLRQVEHWZHHQWKHFXUUHQW8,JXLGHOLQHVDQGWKH

SULQFLSOHRIH[DJJHUDWLRQ&XUUHQWJXLGHOLQHVGRGLVFXVVWKHSURFHVVRIGUDZLQJWKHXVHU¶V

DWWHQWLRQWRFHUWDLQHOHPHQWVRQWKHVFUHHQEXW,FRXOGQRWILQGHYHQRQHH[DPSOHZKHUHDWWHQWLRQ

ZDVGUDZQWKURXJKDQDQLPDWLRQWKDWH[DJJHUDWHGDQREMHFW¶VVSHHGZHLJKWRUPRYHPHQW

5DWKHUFXUUHQWJXLGHOLQHVDGYLVHGWKDWWKHDQLPDWLRQUHIOHFWWKH³UHDO´PRYHPHQWVRIREMHFWV

6LPLODUO\LWZDVGLIILFXOWWRILQGHYHQDWDQJHQWLDOFRQQHFWLRQWRWKHSULQFLSOHRIUHOXFWDQFH$OO

WKUHHJXLGHOLQHVGLVFXVVGLUHFWPDQLSXODWLRQEXWRQO\WKHJXLGHOLQHVIRUPDWHULDOGHVLJQ

PHQWLRQHGWKHYDOXHRIGLVSOD\LQJUHVLVWDQFHWRH[WHUQDOIRUFHV,QFDVHRIERWKH[DJJHUDWLRQDQG

UHOXFWDQFHLWLVSRVVLEOHWKDWWKHSULQFLSOHVRUHYHQWKHWHUPVWKHPVHOYHVDUHVLPSO\WRRORDGHG

ZLWKWKHPHDQLQJOHIWRYHUIURPFDUWRRQDQLPDWLRQWRFRQQHFWWRRXUXQGHUVWDQGLQJRIXVHU

LQWHUIDFHV2UWKHVHWZRSURSHUWLHVPD\QRWUHSUHVHQWWKHVDPHYHUVLRQRI³UHDOLW\´GHVFULEHGLQ

WKHFXUUHQWJXLGHOLQHV

,WLVDOVRSRVVLEOHWKDWWKHGHVLJQODQJXDJHVXUURXQGLQJLQWHUDFWLYLW\DQGGLUHFWLRQ

PDQLSXODWLRQKDYHVKLIWHGVLJQLILFDQWO\RYHUWKHSDVW\HDUVGHYDOXLQJFHUWDLQSULQFLSOHVOLNH

UHOXFWDQFHDQGDWWDFKPHQW3HUKDSVGHVLJQHUVQRORQJHUQHHGWREHUHPLQGHGWKDW³REMHFWVUHPDLQ

DWWDFKHGWRWKHSRLQWHU´ 7KRPDV &DOGHUS ,WPD\MXVWEHWRRREYLRXV(YHQDQWLFLSDWLRQ

ZDVQRWDOZD\VHDV\WRWUDFHGHVSLWHWKHIDFWWKDWLWZDVEULHIO\PHQWLRQHGE\WKHL26DQG8:3


JXLGHOLQHV7KHUHZHUHPDQ\LQVWDQFHVZKHUHJXLGHOLQHVGLVFXVVHGWKHQHHGIRUORJLFEHKLQG

IHHGEDFNDQLPDWLRQVEXWWKHUHZHUHIHZVWDWHPHQWVDERXWKRZWKHORJLFDOORZHGWKHXVHUWR

H[SHFWWKHRXWFRPHRISDUWLFXODUDFWLRQV LHDQWLFLSDWLRQ 

2QHWRSLFGLVFXVVHGLQDOOWKUHHRIWKHFXUUHQWJXLGHOLQHVEXWZKLFKZDVDEVHQWIURPWKH

VHYHQGHVLJQSULQFLSOHVZDVWKHFRQFHSWRIFRQVLVWHQF\,IRXQGWKUHHVHSDUDWHDSSOLFDWLRQVRI

FRQVLVWHQF\LQP\DQDO\VLVRIWKHFXUUHQWJXLGHOLQHV FRQVLVWHQWDQLPDWLRQVZLWKLQWKH

DSSOLFDWLRQ FRQVLVWHQWDQLPDWLRQVEHWZHHQWKHSODWIRUPDQGWKHVSHFLILFDSSOLFDWLRQDQG 

FRQVLVWHQWDQLPDWLRQVEHWZHHQDSSOLFDWLRQV,WZRXOGVHHPWKDWDUHYLVHGGLVFXVVLRQRILQWHUIDFH

DQLPDWLRQZRXOGQHHGWRDFFRXQWIRUHDFKRIWKHVHDSSURDFKHV

 7KHRWKHUVXEMHFWWKDWZDVSRRUO\FDSWXUHGE\WKHVHYHQWUDGLWLRQDOGHVLJQSULQFLSOHVLV

WKHSHUVRQDORUHPRWLRQDOUHVSRQVHXVHUVFDQKDYHWR8,DQLPDWLRQ7KH8:3JXLGHOLQHVVWDWH

WKDWDQLPDWLRQ³DGGVSHUVRQDOLW\´DQG³DGGVHOHJDQFH´WRDPRELOHLQWHUIDFHEXWZKDWGRZH

PHDQE\SHUVRQDOLW\"+RZFDQDQLPDWLRQLQIOXHQFHWKLVSHUVRQDOLW\"7KHUHLVDVLPLODULVVXHZLWK

WKHWHUPLQRORJ\RI³GHOLJKWIXOGHWDLOV´LQPDWHULDOGHVLJQ([DFWO\ZKDWGRHVLWPHDQWREH

GHOLJKWHG":KDWRWKHUIOHHWLQJHPRWLRQVFDQEHDURXVHGE\DIOHHWLQJDQLPDWLRQ"7KHH[LVWLQJ

GHVLJQSULQFLSOHVZKLFKIRFXVVROHO\RQHVWDEOLVKLQJDQGPDLQWDLQLQJDOHYHORI³UHDOLW\´VHHPWR

EHLOOHTXLSSHGLQSURYLGLQJJXLGDQFHRQWKHVHTXHVWLRQV

 ,QWKHFRXUVHRIFRPSDULQJWKHVHGLIIHUHQWVHWVRIJHQHUDOJXLGHOLQHV,DOVRQRWLFHGD

SHFXOLDUGLIIHUHQFHEHWZHHQPDWHULDOGHVLJQJXLGHOLQHVDQGWKHRWKHUVHWVRISULQFLSOHV)RUWKH

PRVWSDUWWKHSXUSRVHRIDQLPDWLRQDFURVVDOOJXLGHOLQHVLVWRFUHDWHDIDPLOLDUSUHGLFWDEOHXVHU

H[SHULHQFH0XFKOLNHWKHSHUFHSWXDODSSURDFKGLVFXVVHGLQWKHSUHYLRXVFKDSWHUPXFKRIWKH

DGYLFHRIIHUHGLQWKHVHJXLGHOLQHVH[SHFWVWKDWWKHPRWLRQVRIWKHLQWHUIDFHZLOOJUDGXDOO\IDGH

DZD\LQWRWKHEDFNJURXQGRIWKHXVHUH[SHULHQFH7KHPDWHULDOGHVLJQJXLGHOLQHVKRZHYHU


RFFDVLRQDOO\HQFRXUDJHDQLPDWLRQIRUVXUSULVHDQGH[SORUDWLRQUDWKHUWKDQRQO\PHHWLQJWKH

XVHU¶VH[SHFWDWLRQV)RUH[DPSOHWKHJXLGHOLQHVUHFRPPHQGWKDWDQLPDWHGWUDQVLWLRQVDGGD

³VHQVHRIZRQGHU´WRLQWHUDFWLRQDQGWKDWDORDGLQJDQLPDWLRQFDQEHXVHGWR³HQWHUWDLQWKHXVHU

ZKLOHWKHWDVNILQLVKHV´ 0DWHULDO'HVLJQ*XLGHOLQHVFSDUD 7KHVHDQLPDWLRQVDUHQRW

PHDQWWREOHQGVHDPOHVVO\LQWRWKHEDFNJURXQGRIWKHDSSOLFDWLRQWKH\DUHGHVLJQHGWRFDOO

DWWHQWLRQWRWKHPVHOYHV7KHVHPRPHQWDU\JHVWXUHVDSSHDUOHVVFRQQHFWHGWRHLWKHUWKH

FRQWHPSRUDU\RUDFDGHPLFJXLGHOLQHVWKDQWRWKHSULQFLSOHRI³DSSHDO´LQWKHRULJLQDOWZHOYH

SULQFLSOHV

&RPSDULVRQRI6SHFLILF3UDFWLFHV

3URELQJWKHFXUUHQWJXLGHOLQHVIRUVKLIWVLQJHQHUDOSULQFLSOHVSURYLGHVDURXJKSLFWXUHRI

WKHSDUWLFXODUFRQFHUQVRILQWHJUDWLQJDQLPDWLRQLQWRPRELOH8,EXWGRHVQRWRIIHUPXFKLQVLJKW

LQWRWKHNLQGVRIDQLPDWLRQVGHYHORSHUVDUHDFWXDOO\FUHDWLQJDVWKH\GUDZIURPWKHVHJXLGHOLQHV

:KDWW\SHVRIDQLPDWLRQDUHXVHG"$UHGHYHORSHUVWDNLQJDGYDQWDJHRIDQ\QHZDQLPDWLRQW\SHV

VWLPXODWHGE\WKHQHZSODWIRUPJXLGHOLQHVQHZGHVLJQSDWWHUQVRUWKHVSHFLILFFRQVWUDLQWVRI

PRELOH8,",QSXUVXLWRIWKHVHTXHVWLRQVWKLVVHFWLRQFRPSDUHVWKHPRGHOGHYHORSHGE\1RYLFN

5KRGHVDQG:HUW  WRWKHDQLPDWLRQVGHSOR\HGE\WKH7XPEOUDSSOLFDWLRQGHYHORSHGIRU

WKH$QGURLGSODWIRUP

,FKRVHWRIRFXVRQWKH7XPEOUDSSOLFDWLRQEHFDXVHRILWVUHFHQWUHFRJQLWLRQDVRQHRIWKH

EHVWH[DPSOHVRILQFRUSRUDWLQJ³GHOLJKWIXODQLPDWLRQ´ )XOFKHU LQPDWHULDOGHVLJQ,KDG

QRWXVHGWKH7XPEOUDSSOLFDWLRQSULRUWRWKLVVWXG\7KHIRFXVRQDVLQJOHDQGURLGVSHFLILF

H[DPSOHFUHDWHVREYLRXVOLPLWDWLRQVIRUJHQHUDOL]DELOLW\DVWKHDQLPDWLRQW\SHVDQG

FRPPXQLFDWLYHIXQFWLRQVPD\UHSUHVHQWWKHDQGURLGSODWIRUPPRUHWKDQRWKHUV6WLOOWKH


H[SORUDWRU\QDWXUHRIWKLVLQTXLU\FDQSURYLGHVRPHLQVLJKWLQWRWKHFKDQJLQJODQGVFDSHRI

DQLPDWLRQW\SHVHYHQLIWKDWLQVLJKWLVOLPLWHGDQGWHQWDWLYH

,QRUGHUWRFRPSDUHWKHDQLPDWLRQVW\SHVXVHGLQ7XPEOUWRWKRVHGHYHORSHGE\1RYLFN

5KRGHVDQG:HUW  ,FRPSOHWHGDVLPLODUSURFHGXUHWRWKHFRPSDULVRQRIJHQHUDO

JXLGHOLQHV,VWXGLHGWKHIRXUPDLQSDJHVRIWKH7XPEOULQWHUIDFH KRPHVHDUFKDFWLYLW\DQG

IULHQGV DVZHOODVWKHWUDQVLWLRQEHWZHHQSDJHV,DOVRFRPSOHWHGVHYHUDOFRPPRQWDVNVXVLQJWKH

DSSOLFDWLRQVXFKDVSRVWLQJDSLFWXUHOLNLQJDSRVWDQGIROORZLQJRWKHUXVHUV'XULQJWKHVH

SURFHVVHV,ORRNHGIRUWKUHHEURDGFDWHJRULHVRIDQLPDWLRQ DQLPDWHGWUDQVLWLRQVEHWZHHQYLVXDO

VWDWHV DQLPDWHGIHHGEDFNDQG DQLPDWLRQVWKDWRFFXUZLWKRXWXVHUDFWLRQ,GLGQRWLQFOXGH

DQLPDWHGJLIVWKDWZHUHSRVWHGWRLQGLYLGXDO7XPEOUVLWHVHYHQWKRXJKJLIVDUHTXLWHFRPPRQRQ

WKH7XPEOUSODWIRUP7KLVPHWKRGZDVQRWLQWHQGHGWRFDWDORJXHHYHU\SRVVLEOHDQLPDWLRQWKDW

FRXOGRFFXUDVVRPHDQLPDWLRQVPD\RQO\RFFXURQO\VSHFLDOFLUFXPVWDQFHVRULQUDUHO\XVHG

HOHPHQWVRIWKHLQWHUIDFH5DWKHUP\JRDOZDVWRFRPSLOHDVDPSOHRIDQLPDWLRQVWKDWXVHUV

PLJKWIUHTXHQWO\HQFRXQWHU7DEOHFDWDORJXHVWKHDQLPDWLRQW\SHVWKDWZHUHIRXQGLQWKH

7XPEOU8,,DOVRGRFXPHQWHGDQLPDWLRQW\SHVWKDWZHUHXVHGLQWKH7XPEOU8,EXWZKLFKZHUH

QRWPHQWLRQHGE\1RYLFN5KRGHVDQG:HUW  

6HYHUDORIWKHDQLPDWLRQW\SHVLQGLFDWHGE\1RYLFN5KRGHVDQG:HUW  ZHUHIRXQG

LQWKH7XPEOULQWHUIDFH7KHPRVWFRPPRQDQLPDWLRQVZHUHFKDQJHLQSODFHDVDOOWUDQVLWLRQV

EHWZHHQYLVXDOVWDWHVLQYROYHGVRPHW\SHRIPRYHPHQW$GGLWLRQDOO\RWKHUFRPPRQDQLPDWLRQ

W\SHVVXFKDVDFKDQJHLQVL]HRUVKDSHZHUHFRPELQHGZLWKDFKDQJHLQSRVLWLRQ$QRWKHU

DQLPDWLRQW\SHWKDWZDVIUHTXHQWO\GHSOR\HGLQWKHLQWHUIDFHZDVFKDQJHLQVL]HERWKLQWKH

WUDQVLWLRQEHWZHHQVWDWHVDQGDVDPLFURLQGLFDWLRQRILQWHUDFWLRQ


7DEOH&RPSDULVRQRI$QLPDWLRQ7\SHVLQ7XPEOU0RELOH$SS

$1,0$7,217<3(6,1129,&.(7$/
• ,FRQVPRYHRXWIURPEHKLQGFDPHUDLFRQRQSRVWPHQXVFUHHQ
• ,QWHUIDFHHOHPHQWVUHDUUDQJHZKHQPRYLQJIURPSRVWPHQXWRVHOHFW
&+$1*(,13/$&( SLFWXUHWRDGGFDSWLRQVWDWHV
• 0DMRUSDQHOVWUDQVLWLRQRQWRWKHVFUHHQE\VZLSLQJOHIWDQGULJKW
• 6XESDQHOVPRYHLQWRSODFHZKHQDUHFRPPHQGDWLRQLVGHOHWHG
• 3HQFLOLFRQEXWWRQILOOVHQWLUHVFUHHQWRFUHDWHEDFNJURXQGIRUSRVWPHQX
VFUHHQ
&+$1*(,16,=( • &DPHUD,FRQVFDOHVXSRQ³SRVW´VFUHHQDQG³FKRRVHSKRWR´VFUHHQ
• 3KRWRJDOOHU\ER[HVVFDOHXSLQXQLVRQ
• 6RPHLFRQVVFDOHXSVOLJKWO\ZKHQSUHVVHG FDPHUDLFRQ 
&+$1*(,1
• 1RQH
527$7,21
• 6SLQQLQJORDGLQJLFRQ
&+$1*(,16+$3(
• 3HQFLOEHFRPHVDQ;
• 6SLQQLQJORDGLQJLFRQ
• $EOXHRXWOLQHLVJHQHUDWHGZKHQDSKRWRLVVHOHFWHG
&+$1*(,1&2/25 • :KLWHULSSOHHIIHFWZKHQWDSSLQJDQLPDJHRUDEXWWRQRQWRSRIDFRORUHG
EDFNJURXQG
• +HDUWLFRQFKDQJHVWRUHGWRVKRZWKDWLW¶VEHHQWDSSHG

*(6785( • 1RQH

%/85 • 1RQH

$1,0$7,217<3(6127&29(5('%<129,&.(7$/
• 7KHSKRWRVIDGHLQDIWHUWKHSODFHKROGHUVKDYHVFDOHGXS
)$'( • 3KRWRVIDGHVOLJKWO\ZKHQVHOHFWHG
• +HDUWLFRQIDGHVRQDVLWPRYHVXSZDUGRQ³OLNH´RIRWKHUXVHU¶VFRQWHQW

7KHFKDQJHLQFRORUDQLPDWLRQVZHUHODUJHO\OLPLWHGWROLJKWJUH\UDGLDOEXUVWVLQGLFDWLQJ

WKDWDQLFRQRUGHVLJQHOHPHQWKDGEHHQWDSSHG7KHRQO\RWKHUFRORUFKDQJHVRFFXUUHGDVD

IHHGEDFNPHFKDQLVPWRLQGLFDWHDFKDQJHLQVWDWXVVXFKDVWKHKHDUWLFRQWXUQLQJUHGZKHQDSRVW

LVOLNHG$GGLWLRQDOO\VSLQQLQJORDGLQJLFRQDVWRFNPDWHULDOGHVLJQ8,DQLPDWLRQZDVGLIILFXOW

WRFDWHJRUL]HXVLQJWKLVIUDPHZRUN'HSHQGLQJRQRQH¶VSHUVSHFWLYHWKHLFRQFRXOGEHVHHQDVD

URWDWLQJOLQHRUDVDFLUFXODUOLQHWKDWRVFLOODWHVEHWZHHQORQJDQGVKRUWSRVLWLRQV7KHFKDQJHLQ

VL]HDQGDFKDQJHLQVKDSHDQLPDWLRQVFUHDWHGDVLPLODUFDWHJRULFDORYHUODS,IIRUH[DPSOHD


VTXDUHER[H[SDQGVWRILOOWKHHQWLUHVFUHHQGRHVLWFRXQWDVDFKDQJHLQVL]H VPDOOWRELJ D

FKDQJHLQVKDSH VTXDUHWRUHFWDQJOH RUERWK"$OWKRXJKWKLVIUDPHZRUNZDVHDVLO\DSSOLHGWR

VLPSOHDQLPDWLRQVLWZDVOHVVXVHIXOIRUDFFRXQWLQJIRUWKHFRPSOH[DFFXPXODWLRQRIPXOWLSOH

DQLPDWLRQW\SHV

7KUHHRIWKHVHYHQDQLPDWLRQW\SHVZHUHQRWIRXQGLQWKH7XPEOULQWHUIDFHURWDWLRQEOXU

DQGJHVWXUH7KLVPD\EHGXHWRWKHOLPLWDWLRQVRIDQDO\]LQJRQO\RQHPRELOHDSSOLFDWLRQRURI

DQDO\]LQJWKHDSSOLFDWLRQRQO\RQDQDQGURLGSKRQH2QHRIWKHIHDWXUHVRIWKH8QLYHUVDO

:LQGRZV3ODWIRUPLQIDFWLVWKHV\VWHPDWLFXVHRIDSURSULHWDU\WH[WXUHFDOOHG³DFU\OLF´ZKLFK

XVHVEOXUDQGVSHFXODUQRLVHWRDGGGLPHQVLRQWRIODWVXUIDFHV -DFREV :KLOHWKLVWH[WXUH

LVQRWFRQQHFWHGWRWKHDQLPDWLRQVHFWLRQRIWKHJXLGHOLQHVLWLVHQWLUHO\SRVVLEOHWKDWD:LQGRZV

GHYLFHZRXOGWRJJOHWKHEOXUU\WH[WXUHRIIDQGRQDFFRUGLQJWRXVHULQSXW

5RWDWLRQDQGEOXUPD\EHPRUHFRPPRQLQRWKHUPRELOHXVHULQWHUIDFHVEXWWKHUHLV

UHDVRQWRTXHVWLRQWKHYDOXHRIJHVWXUHDVDW\SHRIDQLPDWLRQ7KRXJK1RYLFNHWDOGRQRWRIIHU

DGHILQLWLRQRIJHVWXUHWKHLUPRGHOVRIJHVWXUHDQLPDWLRQODUJHO\FRQVLVWRIKDQGLFRQVKROGLQJXS

GLIIHUHQWQXPEHUVRIILQJHUV 1RYLFN5KRGHV :HUWS 7KRXJKWKHVHKDQGVLJQDOV

PD\EHXVHGWRFRPPXQLFDWHLQDQLPDWHGFDUWRRQVLWLVKDUGWRLPDJLQHRIWKH\FRXOGILWLQWR

FRQWHPSRUDU\8,7KLVLVHVSHFLDOO\WUXHIRUWKHGHVLJQRIPRELOHLQWHUIDFHVWKDWGHSHQGRQGLUHFW

PDQLSXODWLRQDVLQWKHXVHRIDKDQGJHVWXUHZRXOGXQQHFHVVDULO\DQWKURSRPRUSKL]HWKH

LQWHUIDFHLWVHOI

7KHIDGHDQLPDWLRQZDVXVHGIUHTXHQWO\LQWKH7XPEOULQWHUIDFHEXWZDVQRWOLVWHGLQ

SUHYLRXVO\VWXGLHGDQLPDWLRQW\SHV)DGH RUGLVVROYH DQLPDWLRQVGLIIHUIURPDEOXUDQLPDWLRQLQ

WKDWDIDGHDQLPDWLRQLQYROYHVGHFUHDVLQJWKHRSDFLW\RIWKHREMHFWZKHUHDVDEOXUHIIHFWLQYROYHV


GLVWRUWLQJWKHUHVROXWLRQRIDQREMHFW$OWKRXJKWKHVHHIIHFWVDUHVLPLODULWLVZRUWKFRQVLGHULQJ

IDGHDVDVHSDUDWHHIIHFWHVSHFLDOO\LWVIUHTXHQWDSSHDUDQFHLQWKH7XPEOULQWHUIDFH

)LQDOO\JLYHQWKHUHODWLRQVKLSEHWZHHQWKHJHQHUDOJXLGHOLQHVDQGWKHVHDQLPDWLRQVLWLV

ZRUWKDVNLQJKRZPLJKWZHEHWWHUGHILQHWKHFRQFHSWRIDQDQLPDWLRQW\SHWRDFFRXQWIRUFXUUHQW

GHVLJQSUDFWLFHV",QWKHPRGHOXVHGIRUWKLVVWXG\DQLPDWLRQW\SHVODUJHO\GHVFULEHWKH

GLIIHUHQFHEHWZHHQWKHVWDUWLQJDQGHQGLQJVWDWHRIDYLVXDOHOHPHQW)RUH[DPSOHWKHFDWHJRU\RI

DFKDQJHRISODFHDQLPDWLRQW\SHVXJJHVWVWKDWWKHPRVWLPSRUWDQWYDULDEOHLVWKHVWDUWLQJDQG

HQGLQJSRVLWLRQRIWKHDQLPDWLRQ+RZHYHUGLVFXVVLRQVRIUHDOLVPDFURVVDOOWKUHHVHWVRI

JXLGHOLQHVVXJJHVWWKDWLWLVQRWRQO\WKHVWDUWHQGSRLQWVWKDWPDNHPRWLRQUHDOLVWLFEXWDOVRWKH

SDWKDQGUDWHRIPRYHPHQWEHWZHHQWKHWZRSRLQWV7RWKLVHQGZHPLJKWEHJLQWRFRQVLGHU

DQLPDWLRQW\SHVDVGLIIHUHQFHVLQVSHHGRUHDVLQJRIDQLPDWLRQLQDGGLWLRQWRWKHVWDUWHQG

VWDWHV

*LYHQWKDW7XPEOUZDVUHFRJQL]HGE\*RRJOHIRULWVGHOLJKWIXODQLPDWLRQZHPLJKW

DVVXPHWKDWWKHPRYHPHQWDQGRWKHUDQLPDWLRQVLPSURYHWKHXVDELOLW\DQGSHUVRQDOLW\RIWKH

DSSOLFDWLRQ%XWDUHWKHVHRXWFRPHVUHODWHGWRWKHIDFWWKDWWKHLQWHUIDFHLQFRUSRUDWHGPRUH

³FKDQJHRISODFH´WKDQ³URWDWLRQ´"/LNH1RYLFN5KRGHVDQG:HUW  ,EHOLHYHGHVLJQHUV

DQGUHVHDUFKHUVQHHGWREHDEOHWRDUWLFXODWHKRZJHQHUDOSULQFLSOHVPDQLIHVWLQVSHFLILFGHVLJQ

SUDFWLFHV+RZHYHU,ZRUU\WKDWDWD[RQRP\RIGHFRQWH[WXDOL]HGDQLPDWLRQW\SHVPD\EHWRR

OLPLWLQJWRIXHOWKLVNLQGRIDUWLFXODWLRQZRUN




&RQFOXVLRQ

 7KHGHVLJQJXLGHOLQHV,KDYHFRYHUHGLQWKLVFKDSWHUUHSUHVHQWDEURDGUDQJHRIDGYLFHRQ

WKHFUDIWDQGSXUSRVHRIDQLPDWLRQEXWE\H[DPLQLQJWKHVHJXLGHOLQHVDVDFROOHFWLYHVHWZHFDQ

VWDUWWRFKDUDFWHUL]HWKHFHQWUDOWKHPHVDQGWHQVLRQVRIPRWLRQGHVLJQ2QHFRPPRQDOLW\DFURVV

WKHLQWHUIDFHGHVLJQJXLGHOLQHVLVDQLPDWLRQDVLQWHUDFWLYLW\HVSHFLDOO\LQUHVSHFWWRGLUHFW

PDQLSXODWLRQ,QWKH8:3JXLGHOLQHVWKLVGLPHQVLRQLVFKDUDFWHUL]HGDVDW\SHRIZD\ILQGLQJDV

WKHDQLPDWLRQVRULHQWWKHXVHUWRWKHYLUWXDOGHSWKDQGZLGWKRIWKHLQWHUIDFH -DFREVD 

7KRPDVDQG&DOGHU  GLVFXVVKRZDQLPDWLRQFRPPXQLFDWHV³WKHSURFHVVRIWKHLQWHUDFWLRQ

DQGLWVRXWFRPH´IUDPLQJLQWHUDFWLYLW\OHVVLQWHUPVRIWKHGLUHFWLRQVLQVSDFH VXFKDVWKHGHSWK

RIWKHYLVXDOOD\HUV DQGPRUHLQWHUPVRIWKHSK\VLFVRIVSDFH VXFKDVWKHZHLJKWRUPDWHULDORI

DQREMHFW  S 1RWDEO\LQWHUDFWLYLW\LVDOVRXVHGWRPDUNWKHGLYLVLRQEHWZHHQLQWHUIDFH

DQLPDWLRQDQGFDUWRRQDQLPDWLRQDV&KDQJDQG8QJDU  FODLP³WKHFDUWRRQLVDSDVVLYH

PHGLXPZKLOHWKHXVHULQWHUIDFHLVDQLQWHUDFWLYHRQH´ S 

 %H\RQGLQWHUDFWLYLW\WKHFHQWUDOWKHPHRIWKHVHDQLPDWLRQJXLGHOLQHVLVUHDOLVP&DUWRRQ

RULQWHUIDFHDFDGHPLFRUSUDFWLWLRQHUWKHJXLGHOLQHVDGYLVHGHVLJQHUVWRFRQQHFWDQLPDWLRQWR

³UHDO´PRYHPHQWGHILQHGE\RXUH[SHULHQFHZLWKPRWLRQLQRXUHYHU\GD\OLYHV+RZGR,PDNH

VXUHWKHPRWLRQVHQKDQFHXVDELOLW\LQVWHDGRIGLVRULHQWDWLRQ"$FFRUGLQJWRWKHL26JXLGHOLQHV

³VWULYHIRUUHDOLVP´ $SSOH 7KHHPSKDVLVRQUHDOLVPYDULHVEHWZHHQVHWVRIJXLGHOLQHV

IRULQVWDQFHWKHWZHOYHSULQFLSOHVRIDQLPDWLRQDQGWKHLUUHIRUPDWLRQLQ&KDQJDQG8QJDU  

DGYLVHGHVLJQHUVWRH[DJJHUDWHUHDOLW\0HDQZKLOHWKH0DWHULDO'HVLJQ*XLGHOLQHVFODLPWR

³GUDZLQVSLUDWLRQIURPUHDOZRUOGIRUFHVVXFKDVJUDYLW\DQGIULFWLRQ´EXWGRQRWGLUHFWO\DGYLVH

GHVLJQHUVWRHLWKHUH[DJJHUDWHRUUHIOHFWWKHVHUHDOZRUOGPRWLRQV5HJDUGOHVVRIWKHDSSURDFK

UHDOLVPSOD\VDVLJQLILFDQWUROHLQWKHORJLFRIPRWLRQGHVLJQIXQFWLRQLQJDVDSHUVXDVLYH


FRXQWHUSRLQWWRWKHFKDUDFWHUL]DWLRQRIDQLPDWLRQDVDXVHOHVVQRYHOW\6WLOO,ZRUU\WKDWWKLV

HPSKDVLVRQUHDOLVPFDQHDVLO\VOLSLQWRWKHORJLFRIWKHXQLYHUVDOXVHUGLVFRQQHFWHGIURPVRFLDO

DQGFXOWXUDOIDFWRUV,QWKHQH[WFKDSWHU,EXLOGWKLVFDVHLQPRUHGHWDLO

3HUKDSVWKHSULPDU\WHQVLRQRIWKHVHJXLGHOLQHVLVWKHEDODQFHEHWZHHQDUDWLRQDO

JUDPPDURIYLVXDOPRYHPHQWDQGWKHDIIHFWLYHSRWHQWLDORIDQLPDWLRQ,Q7KH,OOXVLRQRI/LIH

7KRPDVDQG-RKQVRQ  GHVFULEHDQLPDWLRQQRWRQO\DVDWRROIRUKROGLQJWKHXVHU¶V

DWWHQWLRQEXWHQWHUWDLQLQJWKHXVHUZLWKWKHSK\VLFDODFWLRQVDQGSHUVRQDOLWLHVRIWKHFKDUDFWHUV

7KHSULQFLSOHRI³DSSHDO´PDNHVWKLVSRLQWFOHDUO\HQRXJK%XWDVWKHVHSULQFLSOHVZHUH

UHFRQILJXUHGE\UHVHDUFKHUVLQKXPDQFRPSXWHULQWHUDFWLRQWKH\ODUJHO\HVFKHZWKHYDOXHRI

³DSSHDO´DQGWKHDIIHFWLYHSXUSRVHVRIDQLPDWLRQ&KDQJDQG8QJDU  DUJXHWKDWWKLV

GLYLVLRQLVDSSURSULDWHLQOLJKWRIWKHGLIIHUHQFHVEHWZHHQFDUWRRQVDQGLQWHUIDFHVVWDWLQJ

³&DUWRRQVDUHSXUHO\IRUHQMR\PHQWDQGGLYHUVLRQXVHULQWHUIDFHVDUHXVXDOO\IRUJHWWLQJZRUN

GRQH2IFRXUVHXVHULQWHUIDFHVVKRXOGEHHQMR\DEOHDVZHOOEXW>WKHLU@PRUHVHULRXVQDWXUH

XVXDOO\SUHFOXGHVWKHHPSOR\PHQWRIWKHHQWHUWDLQPHQWYDOXHRIFDUWRRQV´ S :KLOHWKH

FXUUHQWJXLGHOLQHVPLPLFPDQ\RIWKHVDPHVXJJHVWLRQVDVIRXQGLQ+&,DQGFHUWDLQO\HPEUDFH

WKHDIIRUGDQFHVRIDUDWLRQDOV\VWHPIRUDQLPDWLRQWKH\DOVRVXJJHVWDUHWXUQWRHPRWLRQDO

DSSHDOVWKURXJKWKHGLVFXVVLRQRILQWHUIDFHSHUVRQDOLWLHV -DFREVD DQGQHHGIRUD

³GHOLJKWIXO´XVHUH[SHULHQFH 0DWHULDO'HVLJQ*XLGHOLQHVF ,QWKHQH[WFKDSWHU,DUJXHWKDW

WKHVFKRODUVKLSLQFRPSXWHUVDQGZULWLQJDQGWHFKQLFDOSURIHVVLRQDOFRPPXQLFDWLRQSURYLGHVD

XVHIXOGLUHFWLRQIRUXQGHUVWDQGLQJDQGVXSSRUWLQJWKHVHDIIHFWLYHFDSDFLWLHVRIDQLPDWHG

PRYHPHQW

 $VLGHIURPWKHVHVSHFLILFSRLQWVWKLVOHQJWK\PXOWLOD\HUHGRYHUYLHZRIPRWLRQGHVLJQ

SULQFLSOHVGHPRQVWUDWHVKRZDQLPDWLRQKDVJURZQIURPDJHQUHRIILOPWRDFDWHJRU\RIYLVXDO


GHVLJQ$VFRPSDQLHVZRUNWRLQWHJUDWHDQLPDWLRQLQWRWKHLUH[LVWLQJVW\OHJXLGHOLQHVWKH\DUH

FRQWLQXDOO\HQJDJLQJZLWKWKHVDPHGLIILFXOWLHVGHVFULEHGE\VFKRODUVLQWHFKQLFDODQG

SURIHVVLRQDOFRPPXQLFDWLRQZKRKDYHZRUNHGWRLQWHJUDWHDQLPDWLRQLQWRWKHLUDVVLJQPHQWV

+RZFDQZHDUWLFXODWHWKHYDOXHRIDQLPDWLRQDQGWHDFKVWXGHQWVGHYHORSHUVWRWDNHDGYDQWDJHRI

WKLVYDOXH"$VZHHQFRXQWHUDJURZLQJYDULHW\RILQWHUIDFHVSRZHUHGE\LQFUHDVLQJO\SRZHUIXO

SURFHVVRUVWKHVHTXHVWLRQVZLOOFRQWLQXHWRXQGHUFXWRXUDELOLW\WRGHVLJQDQGFULWLTXHYLVXDO

DUWLIDFWV


&+$37(57+(³5($/,67,&´/$1*8$*(2)027,21'(6,*1
3(5&(378$/35,1&,3/(6$1'5+(725,&$/&2817(532,176 

,QWURGXFWLRQ

³«LWVHHPVLQGLVSXWDEOHWKDWWKHVHPDVWHUFDOOLJUDSKHUVZKLOHRVWHQVLEO\ZULWLQJZHUH

DOVRGUDZLQJZKDWWKH\REVHUYHG%XWLWZDVQRWWKHVKDSHVRURXWOLQHVRIWKLQJVWKDWWKH\

VRXJKWWRUHQGHUWKHDLPZDVUDWKHUWRUHSURGXFHLQWKHLUJHVWXUHVWKHUK\WKPVDQG

PRYHPHQWVRIWKHZRUOG´

7LP,QJROG/LQHV$%ULHI+LVWRU\


,QWKHSUHYLRXVFKDSWHU,KLJKOLJKWHGWKHNH\WHUPVDQGFRQFHSWVIURPJXLGHOLQHVIRU

GHVLJQLQJPRWLRQ6RPHRIWKHWHUPVOHDQKHDYLO\RQSHUFHSWLRQDQGFRJQLWLRQ2WKHUVHPSKDVL]H

HPRWLRQDODIIRUGDQFHVDQGSHUVRQDOLW\%XWZKLOHWKHVHJXLGHOLQHVRIIHULQVLJKWLQWRFRUSRUDWH

VWDQGDUGVDQGSUDFWLFHVWKH\RIWHQLJQRUHGLVFXVVLQJKRZPRWLRQVKRXOGEHDGMXVWHGZKHQ

DSSHDOLQJWRGLIIHUHQWDXGLHQFHVRUZKHQGHVLJQLQJIRUGLIIHUHQWVLWXDWLRQV,QRWKHUZRUGVPRVW

JXLGHOLQHVLJQRUHRUGRZQSOD\WKHUKHWRULFDOSRWHQWLDORIPRWLRQDQGLIZHFRQWLQXHWRQDPH

DQLPDWLRQDVRQHRIWKHDYDLODEOHPRGHVLQPXOWLPRGDOLW\ZHPXVWOHDUQWRDUWLFXODWHDQG

DFFHQWXDWHWKLVSRWHQWLDO7KXVLQWKLVFKDSWHU,RXWOLQHWKHDSSURDFKHVWRPRWLRQGHVLJQWKDW

PRVWRIWHQOHDGWRDUKHWRULFDOJXLGHOLQHVDQGKLJKOLJKWIRXUPHWKRGVRIDUWLFXODWLQJWKHUKHWRULFDO

FDSDFLWLHVRIPRWLRQ

,QRUGHUWRRUJDQL]HWKHYDULHW\RIWHUPVDQGFRQFHSWVGHVFULEHGLQWKHSUHYLRXVFKDSWHU,

EHJLQE\IRFXVLQJRQWKHODQJXDJHWKDWSRVLWLRQVPRWLRQDVDQLQQDWHTXDOLW\RIKXPDQ

SHUFHSWLRQ$OVRNQRZQDVLQVWUXPHQWDO )HHQEHUJ IXQFWLRQDO 6DOLQDV DQG

UHSUHVHQWDWLRQDO -RQHV WKLVDSSURDFKWRPRWLRQGHVLJQRIWHQSUHVHQWVPRWLRQDVD




XQLYHUVDOODQJXDJHERUQRXWRIRXUHYHU\GD\H[SHULHQFHRISK\VLFDOIRUFHVLQWKHZRUOG,DUJXH

WKDWZKLOHLWLVQHFHVVDU\IRUWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWRUVWRNHHSWKHVHSHUFHSWXDO

IHDWXUHVLQPLQGLWLVDOVRQHFHVVDU\WRFULWLTXHXQLYHUVDOL]LQJODQJXDJHE\FDOOLQJDWWHQWLRQWR

WKHVRFLDODQGLGHRORJLFDOIRUFHVWKDWGHILQHZKDWZHPHDQE\UHDORUQDWXUDOPRYHPHQW7KHQDV

DFRXQWHUWRDQRYHUHPSKDVLVRQFRJQLWLRQ,VXJJHVWIRXUFDSDFLWLHVWKDWDOLJQWKHWHUPLQRORJ\RI

PRWLRQGHVLJQZLWKH[LVWLQJFRQFHSWVLQYLVXDOUKHWRULFLQWHFKQLFDOFRPPXQLFDWLRQSHUVRQDOLW\

FKRUHRJUDSK\SUHVHQFHDQGDFFHVVLELOLW\:KLOHWKHVHIRXUFDSDFLWLHVDUHQRWPXWXDOO\H[FOXVLYH

RUH[KDXVWLYH,DUJXHWKDWWKH\SURYLGHQHFHVVDU\DYHQXHVIRUGHVLJQLQJPRWLRQLQUHVSRQVHWR

VSHFLILFPDWHULDODXGLHQFHVUDWKHUWKDQDVLQJXODUKRPRJHQRXVRQH

3HUFHSWXDO3ULQFLSOHVRI0RWLRQ'HVLJQ

$V,SUHYLHZHGLQ&KDSWHUWKHSHUFHSWLRQEDVHGDSSURDFKHVWRYLVXDOGHVLJQKDYHEHHQ

KHDYLO\FRQWHVWHGLQWHFKQLFDOFRPPXQLFDWLRQ7RUHIUHVKE\³SHUFHSWLRQEDVHGDSSURDFKHV´,

DPUHIHUULQJWRIUDPHZRUNVWKDWIRFXVSULPDULO\RQLQWXLWLYHDVVXPSWLRQVEDVHGRQWKHUHODWLYH

VKDSHVL]HDQGDUUDQJHPHQWRIYLVXDOVLQDJLYHQVSDFH3RSXODUH[DPSOHVRIWKLVDSSURDFK

LQFOXGH:LOOLDPV¶  SULQFLSOHVRIFRQWUDVWUHSHWLWLRQDOLJQPHQWDQGSUR[LPLW\ VRPHWLPHV

UHIHUUHGWRDV&5$3SULQFLSOHV DQGWKHSULQFLSOHVRIVLPLODULW\FRQWLQXLW\DQGFORVXUHGUDZQ

IURP*HVWDOWSV\FKRORJ\7KHVHSULQFLSOHVZHUHGHYHORSHGE\ILHOGVVXFKDVJUDSKLFGHVLJQ

KXPDQFRPSXWHULQWHUDFWLRQDQGSV\FKRORJ\DQGWKH\FRQWLQXHWRSOD\DUROHLQWKHSHGDJRJ\RI

YLVXDOGHVLJQLQWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQ'HVSLWHWKHLUZLGHVSUHDGXVH

VFKRODUVLQWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQKDYHORQJFULWLTXHGSHUFHSWXDOSULQFLSOHV



$GGLWLRQDOO\WKHVHSULQFLSOHVDUHDSSOLHGWRDUDQJHRIGLIIHUHQWJHQUHVLQWHFKQLFDOFRPPXQLFDWLRQIURPGRFXPHQW
GHVLJQ %HUQKDUGW  0RRUH  )LW]  .UHVV DQG 9DQ /HHXZHQ  $OWRQ  0DQQLQJ   WR GDWD
YLVXDOL]DWLRQ .RVWHOQLFN=DFKDU\ 7KUDOOV WRLQWHUIDFHGHVLJQ 5RELQVNL 6TXLUH 


IRUWKHLUWHQGHQF\WRLJQRUHWKHFXOWXUDOVRFLDODQGLGHRORJLFDOIDFWRUVLQYLVXDOGHVLJQ %DUWRQ

%DUWRQ6HOIH 6HOIH%UDVVHXU:\VRFNL%XPEHUJHU ,

IUDPHP\GLVFXVVLRQRISHUFHSWXDOSULQFLSOHVLQPRWLRQGHVLJQLQOLQHZLWKWKLVGLVFLSOLQDU\

WHQVLRQQRWLQJWKDWWKHVHSULQFLSOHVDUHERWKSHGDJRJLFDOO\XVHIXODQGQHFHVVDU\WRFULWLTXH

7REHVXUHWKHFRPPRQSHUFHSWXDODSSURDFKHVWRGRFXPHQWGHVLJQDUHIOH[LEOHHQRXJKWR

LQFOXGHPRWLRQWRDFHUWDLQH[WHQW)RUH[DPSOHLIWZRLFRQVWUDQVLWLRQRQWRWKHVFUHHQXVLQJWKH

VDPHVW\OHRIDQLPDWLRQZHPLJKWDUJXH>XVLQJ:LOOLDPV¶  GHVLJQSULQFLSOHV@WKDWWKH

GHVLJQHULVHPSOR\LQJUHSHWLWLRQWRLQGLFDWHWKDWERWKLFRQVKDYHVLPLODUSURSHUWLHV2ULIWKHWZR

LFRQVWUDQVLWLRQRQWRWKHVFUHHQLQGLIIHUHQWZD\VZHFRXOGVD\WKDWWKHGHVLJQHULVVHWWLQJXSD

FRQWUDVWEHWZHHQWKHPWKDWDLPVWRLQGLFDWHWKHLUGLVWLQFWIXQFWLRQV%XWSXWWLQJDVLGHWKH

FRRUGLQDWLRQRUGLVFRRUGLQDWLRQRIPRYHPHQW DWOHDVWIRUQRZ WKHH[LVWLQJSHUFHSWXDO

DSSURDFKHVIDLOWRDFFRXQWIRUWKHLQWXLWLYHPHDQLQJVVLJQDOHGWKURXJKWKHPRWLRQVWKHPVHOYHV,I

RQHLFRQERXQFHVRQWKHVFUHHQZKLOHDQRWKHUIDOOVIURPWKHWRSWKHXVHU V DXGLHQFHZRXOGQRW

RQO\QRWLFHWKDWWKHWZRLFRQVHPSOR\GLIIHUHQWDQLPDWLRQVWKH\ZRXOGDOVRFRPHXSZLWKD

WHQWDWLYHUDWLRQDOHIRUWKHGLIIHUHQFHEHWZHHQERXQFLQJDQGIDOOLQJ:KHQ,GLVFXVV³SHUFHSWXDO

SULQFLSOHVRIPRWLRQGHVLJQ´WKHQ,DPUHIHUULQJWRSULQFLSOHVWKDWXVHWKHVDPHORJLFDV

:LOOLDPVDQG*HVWDOWSV\FKRORJ\EXWDUHXVHGWRH[SODLQGLIIHUHQWNLQGVRIYLVXDOSKHQRPHQDLQ

W\SHVRIPRYHPHQW

7KHSHUFHSWXDOSULQFLSOHVRIDQLPDWLRQLQWXUQDWWHPSWWRH[SODLQWKHKRZZHLQWXLWLYHO\

DVVLJQPHDQLQJ V WRDEVWUDFWPRYHPHQWUHJDUGOHVVRIWKHFRQWH[WRUWKHXVHUDXGLHQFHDWKDQG

2XWRIWKHWZHOYHSULQFLSOHVLQ7KH,OOXVLRQRI/LIHVL[RSHUDWHSXUHO\RQWKHFRJQLWLYH

SHUFHSWLRQVRIWKHYLVXDOLW\RIPRWLRQVTXDVKDQGVWUHWFKVORZLQDQGRXWDUFVDQWLFLSDWLRQ

IROORZWKURXJKDQGVHFRQGDU\DFWLRQ:KHUHDVSULQFLSOHVOLNHH[DJJHUDWLRQRUDSSHDOUHTXLUHD


GHVLJQHUWRDGDSWWKHGHVLJQWRWKHSHUVRQDOLW\RIWKHFKDUDFWHURUWKHQDUUDWLYHVLWXDWLRQWKHVHVL[

SULQFLSOHVIRFXVHGRQFRJQLWLYHSHUFHSWLRQDUHLQWHQGHGWRHPHUJHGLUHFWO\IURPWKHUHDOLVWLF

PRYHPHQWVZHVHHLQRXUGDLO\FRQWDFWZLWKYLVLEOHSKHQRPHQD7KHVHYLVLEOHSKHQRPHQD

LQFOXGHWKHUDQJHRIPRYLQJSHRSOHDQGREMHFWVWKDWZHHQFRXQWHUIURPWKHVKLIWLQJWUDIILF

SDWWHUQVRIFDUVLQEXV\WUDIILFWRWKHVOLJKWQRGRIDIULHQGWRVLJQDOWKHLUDSSURYDO7KLVLVQRWWR

VD\WKDWZHDXWRPDWLFDOO\XQGHUVWDQGWKHSXUSRVHRIWKHVHPRYHPHQWV$IWHUDOODQRGRI

DSSURYDOLQRQHFLUFXPVWDQFHFRXOGMXVWDVHDVLO\EHUHDGDVGLVDSSURYDORULQDQRWKHUVLWXDWLRQRU

DQRWKHUFXOWXUH6WLOOZKHWKHURUQRWRXULQWHUSUHWDWLRQVPDWFKWKHGHVLJQHU¶VLQWHQWPRWLRQ

UHPDLQVRQHRIVHYHUDOVHQVRU\IDFWRUVWKDWZHXVHWRPDNHVHQVHRIWKHZRUOG

+RZHYHUWKHSHUFHSWXDOSULQFLSOHVRIPRWLRQGHVLJQDVVXPHWRWDNHDPRUHHOHPHQWDU\

DSSURDFKWRPRYHPHQWWKDQDQ\RQHJHVWXUHRUPRYLQJREMHFWSULPDULO\E\IRFXVLQJRQWKH

YLVXDOHIIHFWVRI1HZWRQLDQSK\VLFVVXFKDVPRPHQWXPLQHUWLDDQGJUDYLW\1RPDWWHUZKDWLV

PRYLQJRUZK\LWLVPRYLQJVRWKHORJLFJRHVDOOERGLHVDQGREMHFWVDUHVXEMHFWWRSK\VLFDO

IRUFHV6LQFHZHDOOH[SHULHQFHWKHVHIRUFHVIURPRXUHYHU\GD\DFWLYLWLHVLQWKHZRUOGGHVLJQHUV

DVVXPHWKDWYLVXDOGHSLFWLRQVRIWKHVHIRUFHVZLOOEHXQLYHUVDOO\XQGHUVWRRG)RUH[DPSOHLI,

NQRFNDFHUDPLFPXJRIIP\GHVN,ZRXOG LQOLNHO\HPEDUUDVVPHQWKRUURU LPPHGLDWHO\DWWHPSW

WRJDXJHWKHPRWLRQRIWKHPXJDQGWRWU\WRFDWFKLWEHIRUHLWWKHVPDVKHVDJDLQVWWKHWLOHIORRURI

P\RIILFH7KLVVQDSDQDO\VLVZRXOGUHTXLUHPHWRLQWXLWDQGUHDFWWRDQDUUD\RIIDFWRUV

LQFOXGLQJWKHGRZQZDUGDFFHOHUDWLRQRIWKHPXJWKHDQJOHRIWKHIDOODQGWKHGLVWDQFHRIP\

KDQGVIURPWKHHPHUJLQJVLWXDWLRQ)RUP\SRRUPXJWRVWDQGDFKDQFHRIVXUYLYDO,ZRXOGQHHG



,QWHUHVWLQJO\KHDGPRYHPHQWDQGQRGVLQSDUWLFXODUDUHDFRPPRQVRXUFHRIPLVXQGHUVWDQGLQJLQLQWHUFXOWXUDO
FRPPXQLFDWLRQ*HVWXUHVWKDWVLJQDODIILUPDWLRQRUDJUHHPHQWLQWKH8QLWHG6WDWHVDUHRIWHQPLVWRRNIRUGLVDJUHHPHQW
LQFRXQWULHVOLNH7XUNH\%XOJDULDDQG$OEDQLD %RFKQHUS 


WRPDNHDQDVVHVVPHQWDQGUHDFWLQVWDQWDQHRXVO\DQGP\VXFFHVVZRXOGGHSHQGP\DELOLW\WR

FRRUGLQDWHP\RZQERGLO\PRYHPHQWVLQUHVSRQVHWRP\YLVXDOSHUFHSWLRQV

1RZLI,ZHUHWRUHSUHVHQWWKLVVDPHVLWXDWLRQWKURXJKDQLPDWLRQ,ZRXOGQHHGWRFRQYH\

QRWRQO\WKHORRNRIGUHDGRQP\IDFHDQGWKHIXPEOLQJPRWLRQVRIP\ERG\EXWDOVRWKH

PRYHPHQWRIWKHPXJLQFOXGLQJKRZWKHPXJ¶VPRYHPHQWZDVDIIHFWHGE\JUDYLW\DQG

PRPHQWXP7KLVLVZKHUHWKHSHUFHSWXDOSULQFLSOHVRIPRWLRQGHVLJQFRPHLQWRSOD\)ROORZLQJ

WKHSULQFLSOHRIDUFVIRUH[DPSOH,PLJKWPDNHVXUHWKDWWKHPXJIROORZVDFXUYHGWUDMHFWRU\

VLQFHPRYHPHQWUDUHO\IROORZVDVWUDLJKWSDWKIURPRQHORFDWLRQWRDQRWKHU&RQVLGHULQJKRZ

IHZREMHFWVPRYHDWDFRQVWDQWVSHHG WKHSULQFLSOHRIVORZLQRXW ,PLJKWUHSUHVHQWWKHPXJ

DFFHOHUDWLQJWRZDUGWKHJURXQGGXHWRJUDYLW\ZKLOHGHFHOHUDWLQJKRUL]RQWDOO\GXHWRDLU

UHVLVWDQFH$QGLIWKHDQLPDWLRQZHUHWRODVWDOOWKHZD\WKURXJKWKHPXJFUDVKLQJLQWRWKH

JURXQG DVLWLQHYLWDEO\ZRXOG ,XVHWKHVDPHFXUYHGWUDMHFWRULHVDQGQRQOLQHDUDFFHOHUDWLRQVWR

WKHVFDWWHULQJVKDUGVRIPXJDVWKH\ERXQFHDQGVNLWWHUDFURVVWKHIORRURIP\RIILFH7KHEHWWHU,

FDQDGMXVWWKHVHVXEWOHWUDMHFWRULHVDQGDFFHOHUDWLRQVWKHPRUHUHDOLVWLFWKHGHVLJQZRXOGVHHPWR

EHFRPH

,QWKHRU\WKHVHDGMXVWPHQWVZRXOGPDNHLWHDVLHUIRUDQ\YLHZHUWRSURFHVV(YHQLIWKHUH

LVQRHYLGHQFHIRUZK\WKHPXJZDVNQRFNHGRIIWKHGHVN²HYHQLIWKHYLHZHUKDVQHYHUVHHQD

FHUDPLFPXJEHIRUH²WKH\ZLOOVWLOOLQWXLWWKHWUDMHFWRU\DQGDFFHOHUDWLRQRIPRYHPHQWDQGWKH

EULWWOHPDWHULDORIWKHPXJDVLWFUDVKHVLQWRWKHJURXQG7KHLPSOLFLWXQLYHUVDOLW\RIWKHVH

SULQFLSOHVDVVXPHVWKDWHYHQWKRXJKZHPD\QRWUHDOL]HLWZHDUHFRQVWDQWO\DVVHVVLQJDQG

UHVSRQGLQJWRWKHPRYHPHQWVDURXQGXVDQGWKDWWKURXJKWKHVHFRQVWDQWDGMXVWPHQWVWRWKH

PDWHULDOZRUOGZHGHYHORSDPHQWDOVFKHPDIRUZKDWPRWLRQVPHDQ$VORQJDVYLHZHUVOLYHRQ

HDUWKWKH\ZLOOKDYHZLWQHVVHGWKHHIIHFWVRIJUDYLW\DQGWKHLQHUWLDRIDQREMHFWWUDQVLWLRQLQJ


IURPUHVWWRPRWLRQ RUPRWLRQWRUHVW 7KH\ZLOOKDYHVHHQREMHFWVVKDWWHURUFUDFNRUVOLGHRU

ERXQFHRUFUXPSOHDVWKH\FRPHLQWRFRQWDFWZLWKRQHDQRWKHU7KHSHUFHSWXDOSULQFLSOHVWKXV

DSSHDUWREHXQLYHUVDOO\XQGHUVWRRGEHFDXVHWKH\GUDZPHDQLQJGLUHFWO\IURPWKHYLVXDOHIIHFWV

RI1HZWRQLDQSK\VLFVUHGXFLQJWKHZRUOGWRIRUFHPDVVDQGPDWHULDO



%HIRUH,WUDQVLWLRQWRDFULWLTXHRIWKLVXQLYHUVDOLW\WKHUHDUHWZRIDFWRUVWRNHHSLQPLQG

7KHILUVWLVWKDWSURIHVVLRQDODQLPDWRUVDQGPRWLRQGHVLJQHUVFDUHIXOO\LQVLVWWKDWJRDORI

DQLPDWLRQLVQRWWRPHUHO\PLPLFWKHPRWLRQVRISK\VLFDOUHDOLW\5DWKHUWKH\FODLPWR

H[DJJHUDWHUHDOLW\ 7KRPDV -RKQVRQ&KDQJ 8QJDU RUWREHLQVSLUHGE\UHDOLW\

0DWHULDO'HVLJQ*XLGHOLQHVD )URPWKLVSHUVSHFWLYHVRPHPRWLRQGHVLJQHUVPD\WDNH

LVVXHZLWKP\H[DPSOHRIWKHIDOOLQJPXJDUJXLQJWKDW,FKDUDFWHUL]HDQLPDWLRQDVDQDFWRI

PLPLFU\DQGGRQRWDGHTXDWHO\DGGUHVVLWVH[DJJHUDWLRQGLPHQVLRQV%XWHYHQZKHQPRWLRQ

GHVLJQHUVGLVWDQFHWKHLUZRUNIURPDQDFWRIGLUHFWLPLWDWLRQWKH\RIWHQUHO\RQWKHLGHDWKDWWKHVH

PRYHPHQWVUHGXFHFRJQLWLYHORDGRUFRQYH\WKHVDPHPHDQLQJQRPDWWHUWKHDXGLHQFH)RU

LQVWDQFHWDNHWKLVSDVVDJHIURP&KDQJDQG8QJDU

 

3DUDGR[LFDOO\RQO\E\H[DJJHUDWLRQGRFDUWRRQVDFKLHYHPRUHUHDOLVP7KHGZDUYHVLQ

'LVQH\¶V6QRZ:KLWHIRUH[DPSOHDUHKLJKO\VW\OL]HG²WKHLUIDFHVDQGERGLHVDUH

GUDZQZLWKRYHUVL]HZHLJKW\IHDWXUHVWKHLUPRYHPHQWVDUHODUJHDQGH[DJJHUDWHG,Q

FRQWUDVW6QRZ:KLWHLVGUDZQZLWKUHDOLVWLFSURSRUWLRQV KHUQRVHWRPHQWLRQMXVWRQH

IHDWXUHPDQ\WLPHVVPDOOHUWKDQDQ\GZDUI¶V DQGKHUPRYHPHQWVMXVWWKRVHDUHDO

SHUVRQZRXOGKDYHPXFKVPDOOHUDQGPRUHPHDVXUHGWKDQWKDWRIWKHGZDUYHV¶<HW

6QRZ:KLWHDVUHDOLVWLFDOO\DVVKHLVUHQGHUHGVHHPVEODQGDQGZRRGHQLQFRPSDULVRQ


WRWKHH[SUHVVLYHDQGHQJDJLQJGZDUYHV7KHGZDUYHVVLPSO\VHHPPRUHUHDOLVWLF 

S 

7UXHWKH³UHDOLVP´RIWKHGZDUYHV¶PRYHPHQWGRHVQRWUHSURGXFHWKHPRYHPHQWVRIWKH

SK\VLFDOZRUOG<HWHYHQWKHPRWLRQVRIWKHVHGZDUYHVXQOLQNHGIURPLWVFRUUHVSRQGHQFHWRD

UHDODQDORJXHSHUVRQDUHVWLOOGLVFXVVHGDVLIDOOYLHZHUVZLOOSHUFHLYHWKHPRWLRQVRIWKHGZDUYHV

LQWKHVDPHZD\7KHUHLVQRPHQWLRQKHUHRIH[DFWO\ZKRPLJKWILQGWKHGZDUYHVWREHPRUH

UHDOLVWLFRUKRZVRPHDXGLHQFHVPD\LQWHUSUHWWKH³H[SUHVVLYHDQGHQJDJLQJ´PRWLRQLQRWKHU

ZD\V,QVWHDGWKHGHVLJQHUVLPSO\WKDWUHDOLVWLFPRWLRQGUDZVRQRXUEDVLFKXPDQH[SHULHQFH

ZLWKSURFHVVLQJPRWLRQ5HDOLVWLFPRWLRQZKHWKHULWLVDQLPLWDWLRQDSSUR[LPDWLRQRU

H[DJJHUDWLRQRISK\VLFDOUHDOLW\UHPDLQVWLHGWRWKHGHFRQWH[WXDOL]HGXQGHUVWDQGLQJRIKXPDQ

SHUFHSWLRQWKDWUHQGHUVPRYHPHQWWKURXJKFRJQLWLYHSHUFHSWXDOSULQFLSOHV

0\VHFRQGSRLQWLVWKDWZKLOHP\WRQHPD\EHOLHDFULWLFDODWWLWXGHWRZDUGWKHVH

SHUFHSWXDOSULQFLSOHVP\RYHUDOOJRDOLVQRWWRVXJJHVWWKDWWKH\DUHZLWKRXWSHGDJRJLFDODQG

DQDO\WLFDOYDOXHRUWKDWRXULQVWDQWDQHRXVSHUFHSWLRQVVKRXOGEHH[FOXGHGIURPWKHUHVHDUFKDQG

WHDFKLQJRIYLVXDOUKHWRULFLQWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQ$V,DUJXHLQWKHIRXUWK

FKDSWHURIWKLVSURMHFWWKHSHUFHSWXDOSULQFLSOHVDUHLQFUHGLEO\YDOXDEOHZKHQGHSOR\HGDVZKDW

6XOOLYDQ  GHILQHVDVD³VDIH´DSSURDFKWRYLVXDOGHVLJQ S :RUNLQJDVDVHWRI

YHULWDEOH³GHVLJQWUDLQLQJZKHHOV´WKHVHSULQFLSOHVFDQKHOSVWXGHQWVDQGSUDFWLWLRQHUVWR

RYHUFRPHDQLQLWLDODQ[LHW\RIZRUNLQJZLWKXQIDPLOLDUGHVLJQFRQFHSWVDQGXQIDPLOLDUVRIWZDUH

WRZRUNLQDQXQIDPLOLDUPHGLXP

7KHSHUFHSWXDOSULQFLSOHVDOVRDUHXVHIXOZKHQHPSOR\HGLQDGHVFULSWLYHFDSDFLW\²DVD

VKDUHGYRFDEXODU\IRUWKHFRQFUHWHDVSHFWVRIPRWLRQWKDWDUHJHQHUDOO\DYDLODEOHIRUUHYLVLRQ$V

LQWHUIDFHDQLPDWLRQVSHFLDOLVW+HDGH[SODLQVLQKHUERRN'HVLJQLQJ,QWHUIDFH$QLPDWLRQ  


³,W¶VPXFKHDVLHUWRLPSOHPHQWIHHGEDFNOLNHµ7KDWDQLPDWLRQQHHGVPRUHRRPSKVROHW¶VJLYHLW

PRUHIROORZWKURXJK¶WKDQMXVWµ7KDWDQLPDWLRQQHHGVPRUHRRPSK¶´ S +HUHZHFDQVHH

KRZWKHSHUFHSWXDOSULQFLSOHVVWUHQJWKHQWKHFRQQHFWLRQEHWZHHQWKHUKHWRULFDOUDWLRQDOH V IRU

DQLPDWLRQDQGH[HFXWLQJWKDWUDWLRQDOHLQSUDFWLFHHYHQLIZHPLJKWKRSHIRUDOHVVYDJXH

UDWLRQDOHWKDQVLPSO\LQFUHDVLQJWKH³RRPSK´

7KH/LPLWDWLRQVRI³5HDOLVWLF´0RYHPHQW

7KHSUREOHPZLWKSHUFHSWXDOSULQFLSOHVIRUPRWLRQGHVLJQ DVZHOODVIRUYLVXDOUKHWRULF

JHQHUDOO\ LVWKDWWKH\HQFRXUDJHGHVLJQHUVWRFRQFHLYHRIXVHUVYLHZHUVDVDVWDWLFKRPRJHQRXV

JURXSIRUJHWWLQJWKHSRWHQWLDOIRUWKHVDPHPRWLRQWREHUHDGLQPXOWLSOHZD\V2QHRIWKHFRUH

DUJXPHQWVIRUIUDPLQJDQLPDWLRQLQWHUPVRIUDZSHUFHSWLRQLVWKHLGHDWKDWE\FRQQHFWLQJ

PRWLRQWRWKHXVHU¶VOLYHGH[SHULHQFHVDQLPDWLRQFDQUHGXFHWKHFRJQLWLYHEXUGHQRIWKH

LQWHUIDFHDVDZKROH:KHQWKHJXLGHOLQHVDGYRFDWHIRU³VPRRWK´RU³UHDOLVWLF´PRYHPHQWV VHH

HVSHFLDOO\7KRPDV &DOGHU WKH\LPSOLFLWO\KRSHIRUDQLQWHUIDFHWKDWJUDGXDOO\UHFHGHV

LQWRWKHEDFNJURXQGRIWKHXVHU¶VH[SHULHQFHREVFXULQJWKHLGHDWKDWWKHLQWHUIDFHKDVEHHQ

FDUHIXOO\GHVLJQHGDQGUHGHVLJQHG

7KHPRUHGHVLJQHUVIDGHIURPXVHUV¶PHPRULHVKRZHYHUWKHPRUHWKDWUHVSRQVLELOLW\IRU

SUREOHPDWLFLQWHUIDFHVVKLIWVIURPWKHGHVLJQHU V WRWKHXVHU V 6HOIHDQG6HOIH  LOOXVWUDWH

KRZWKLVEODPHVKLIWIXQFWLRQVLQWKHLUDQDO\VLVRI0DFLQWRVKLQWHUIDFH'RPLQDWHGE\PHWDSKRUV

RIFDSLWDOLVPLQFOXGLQJIROGHUVILOLQJFDELQHWVDQGGHVNWRSFDELQHWVWKH0DFLQWRVKLQWHUIDFH

FDQEHWUDQVSDUHQWIRUXVHUVZKRDUHIDPLOLDUZLWKWKHWRNHQVRIZKLWHFROODUFRUSRUDWHFXOWXUH

EXWZRXOGEHOHVVLQWXLWLYHIRUXVHUVZLWKRWKHUH[SHULHQFHV7RZRUNZLWKLQDYLUWXDOUHDOLW\

VWUXFWXUHGE\WKHVHPHWDSKRUVUHTXLUHVXVHUVWRVXEPLWHYHQLIRQO\WHPSRUDULO\WRDVSDFH


GHILQHGE\³WKHOLYHVDQGYDOXHVRIZKLWHPDOHPLGGOHDQGXSSHUFODVVSURIHVVLRQDOV´ S 

$QGEHFDXVHWKHVHPHWDSKRUVDUHFORWKHGLQWKHORJLFRIDQHXWUDOUDWLRQDOV\VWHPRI

LGHQWLILFDWLRQWKH\DUHGLIILFXOWWRFKDOOHQJHZLWKRXWDUWLFXODWLQJWKHLGHQWLWLHVH[FOXGHGE\WKH

V\VWHP

7KHJXLGHOLQHVIRUPRWLRQGHVLJQDUHFRQVWUXFWHGZLWKWKHVDPHOLPLWDWLRQVDVWKH

FRUSRUDWHPHWDSKRUVLGHQWLILHGE\6HOIHDQG6HOIHGXULQJWKHLUGLVFXVVLRQRIFRPSXWHULQWHUIDFHV

<HWEHFDXVHRIWKHVHHPLQJO\HVVHQWLDOFRQQHFWLRQEHWZHHQWKHVHSULQFLSOHVDQGPDWHULDOUHDOLW\

LWFDQEHGLIILFXOWWRLPDJLQHWKHLUVRFLDODQGFXOWXUDOOHDQLQJV,WLVHDVLHUWRFRPSUHKHQGKRZ

YLVXDOPHWDSKRUVFDQSULYLOHJHDSDUWLFXODUZRUNSODFH JLYHQWKHIRFXVRQPHPRVPDQLOD

IROGHUVDQGFRUSRUDWHFXOWXUH WKDQDSDUWLFXODUUHODWLRQVKLSWRSK\VLFDOIRUFHVOLNHJUDYLW\

IRUFHDQGPRPHQWXP$QG\HWWKLVSULYLOHJLQJVWLOOH[LVWVDOEHLWXVXDOO\LQDOHVV

VWUDLJKWIRUZDUGZD\WKDQWKHSUHVHQFHRIFRUSRUDWHZRUNSODFHPHWDSKRUV

,QRUGHUWRWHDVHRXWWKHVHGLIIHUHQFHVLQSK\VLFDOH[SHULHQFH,ILQGLWKHOSIXOWRGUDZRQ

,QJROG¶V  GLVFXVVLRQRQPDWHULDOLW\DQGPRYHPHQWLQ%HLQJ$OLYHDVLWKHOSVPHWR

GHVFULEHKRZERWKWKHPRYHPHQWVZHVHHDQGWKHPRYHPHQWVZHSHUIRUPDUHFRQVWUXFWHG

WKURXJKKHWHURJHQHRXVG\QDPLFUHODWLRQVKLSVZLWKPDWHULDOLW\(DUO\LQWKHERRN,QJROG

FULWLTXHVWKHQRWLRQWKDWWKHUHDUHWUXHRUREMHFWLYHSURSHUWLHVRIPDWHULDOV LHVWRQHZRRGFORWK

HWF WKDWFDQEHPHDVXUHGVFLHQWLILFDOO\DQGVXEVHTXHQWO\HLWKHUH[SUHVVHGRUUHSUHVVHGLQWKHLU

XVH VXFKDVEXLOGLQJDKRXVH :LWKLQWKLVSXUYLHZDQHQJLQHHUZRUNLQJZLWKVWRQHPLJKW

³H[SUHVV´WKHSURSHUWLHVRIWKHVWRQHE\IRFXVLQJRQWKHPHDVXUDEOHGHQVLW\HODVWLFLW\DQG

VWUHQJWKRIWKHVWRQHLPDJLQLQJWKHVHSURSHUWLHVDVDNLQGRILQKHUHQW³VWRQLQHVV´WKDWH[LVWV

EH\RQGLQWHUSUHWDWLRQ S &RXQWHULQJWKLVLGHDRIIL[HGRUHVVHQWLDOPDWHULDODWWULEXWHV,QJROG

SRLQWVRXWWKDW³VWRQLQHVV´LVDOVR³HQGOHVVO\YDULDEOHLQUHODWLRQWROLJKWRUVKDGHZHWQHVVRU


GU\QHVVDQGWKHSRVLWLRQSRVWXUHRUPRYHPHQWRIWKHREVHUYHU´ S :KLOHWKHUHLVDPDWHULDO

WRVWRQHVWKHUHLVDOVRDPDWHULDOLW\RIVWRQHVGHILQHGE\WKHZD\VWKDWVWRQHVDUHLQWHUSUHWHG

ZLWKLQDVRFLDODQGKLVWRULFDOFRQWH[W)RUH[DPSOHZHPLJKWLQWHUSUHWVWRQHVDVEXLOGLQJ

PDWHULDORUZHDSRQVRUDVDUWVXSSOLHVRUDVDUWLIDFWVGHSHQGLQJRQDWDQJOHGZHERIVLWXDWLRQDO

IDFWRUV)RU,QJROGLWLVQRWXVHIXOWRFRQVLGHUWKHSHUVSHFWLYHVRIPDWHULDO REMHFWLYHIL[HG DQG

PDWHULDOLW\ VXEMHFWLYHIOXLG DVDELQDU\RSSRVLWLRQWRRQHDQRWKHUDVKHFODLPVWKDWWKHWZR

SHUVSHFWLYHVFRQVWLWXWH³RYHUODSSLQJUHJLRQVRIWKHVDPHZRUOG´DQGWKDW³VWRQHVWRRKDYH

KLVWRULHVIRUJHGLQRQJRLQJUHODWLRQVZLWKVXUURXQGLQJVWKDWPD\RUPD\QRWLQFOXGHKXPDQ

EHLQJVDQGPXFKHOVHEHVLGHV´ S ,QRWKHUZRUGVERWKPDWHULDODQGPDWHULDOLW\DUHOHVVOLNH

WZRVLGHVRIWKHVDPHFRLQWKDQWZRFKHPLFDOVLQWKHVDPHEHDNHULWLPSRVVLEOHWRH[WUDFWRQH

IURPWKHRWKHU6WRQHVRUDQ\RWKHUPDWHULDOIRUWKDWPDWWHUDUHWKHUHIRUHFRQVWDQWO\UHVLWXDWHGLQ

ERWKPDWHULDODQGVRFLRFXOWXUDOZD\V

:LWKWKLVG\QDPLFSHUVSHFWLYHRIPDWHULDOPDWHULDOLW\LQPLQGZHFDQUHWXUQP\H[DPSOH

RIWKHIDOOLQJFHUDPLFPXJIURPHDUOLHULQWKHFKDSWHUZLWKWKHTXHVWLRQKRZPLJKWZHLQWHUSUHW

UDWKHUWKDQVLPSO\SHUFHLYHWKHPRYHPHQWRIWKHIDOOLQJPXJ":KHUHDUHVRFLDODQGFXOWXUDO

H[SHULHQFHVZRYHQLQWRWKHVFHQH")URPP\HDUOLHUGHVFULSWLRQLWZRXOGVHHPWKDWZHDUHPHDQW

WRYLHZWKHIDOODVDQH[FLWLQJDFWLRQSHUKDSVDVWKHFOLPD[RIDVFHQHRUWKHLQWHUUXSWLRQRID

SUHYLRXVO\FDOPHQYLURQPHQW%XWLWLVLPSRVVLEOHWRDVVLJQWKLVPHDQLQJRUDQ\RWKHUEH\RQGWKH

FKDQJLQJSRVLWLRQRIWKHPXJZLWKRXWDQVZHULQJFRQWH[WXDOTXHVWLRQVDERXWWKHW\SHRIPXJP\

UHODWLRQVKLSZLWKWKHPXJDQGWKHRQJRLQJDFWLRQVLQWKHHQYLURQPHQWQRWWRPHQWLRQWKH

YLHZHU¶VH[SHULHQFHVZLWKPXJV LQFOXGLQJGULQNLQJEX\LQJGURSSLQJHWF $VVRRQDVZH

WUDQVSRVHWKHPXJLQWRDQDQLPDWHGLQWHUIDFH ZKHWKHUWKDWLQWHUIDFHEHWKHPRYLHVFUHHQ

WHOHYLVLRQVFUHHQRUWKHFRPSXWHUVFUHHQ WKHVHIDFWRUVQHFHVVDULO\SULYLOHJHSDUWLFXODUNLQGVRI


LGHQWLWLHVDQGH[SHULHQFHVDVWKHSULPDU\DXGLHQFHHYHQDVPRYHPHQWLVGHVLJQHGWRWDSLQWRRXU

VXSSRVHGO\LQQDWHSHUFHSWXDOFDSDFLWLHV

6WLOOVRPHPLJKWDUJXHWKDWP\PXJH[DPSOHXQIDLUO\IRFXVHVRQWKHREMHFWRIWKHPXJ

UDWKHUWKDQWKHHVVHQWLDOSURSHUWLHVRIWKHPRYHPHQWLWVHOI$IWHUDOOPRVWRIWKHREMHFWVDQLPDWHG

E\PRWLRQGHVLJQHUVDPRXQWWROLWWOHPRUHWKDQDEVWUDFWVKDSHVOLQHVDQGEORFNVRIWH[W,I

LQVWHDGRIDIDOOLQJFXSZHLPDJLQHDWZRGLPHQVLRQDOFLUFOHGURSSLQJIURPWKHWRSHGJHRIWKH

VFUHHQWRWKHERWWRPHGJHRIWKHVFUHHQZHFRXOGDUJXHWKDWZKLOHWKHREMHFWLWVHOIUHPDLQV

GHILQHGE\DQDEVWUDFWDUUD\RIVRFLRFXOWXUDOUHODWLRQVKLSVWKHPRYHPHQWLWVHOIUHPDLQVWLHGWRD

XQLYHUVDOYLVXDOODQJXDJHRIFODVVLFDO1HZWRQLDQSK\VLFV,QGHHGWKLVDSSURDFKZRUNVLPSOLFLWO\

LQPRWLRQGHVLJQJXLGHOLQHVWKURXJKWKHIUHTXHQWDVVHUWLRQVWKDW³REMHFWVPRYH´LQWKLVZD\RU

WKDWZD\ZLWKOLWWOHWRQRPHQWLRQRIKRZWKHTXDOLWLHVRIWKHPRYHPHQWVKRXOGEHLQIOXHQFHGE\

WKHW\SHRIREMHFWEHLQJPRYHG7KLVVHSDUDWLRQRIPRYHPHQWDQGREMHFWVFDQEHSDUWLFXODUO\

WHPSWLQJIRUDQLPDWRUVEHFDXVHLWFRUUHVSRQGVWRWKHGLYLVLRQRIODERULQDQLPDWLRQVWXGLRVRQH

JURXSGUDZVWKHFKDUDFWHUVRUGHILQHVWKHOD\RXWRIDQLQWHUIDFHDQGWKHDQLPDWRUVRUPRWLRQ

GHVLJQHUVDUHJLYHQWKHWDVNRIDSSO\LQJPRYHPHQWWRWKHVHDOUHDG\FRQVWUXFWHGYLVXDOPDWHULDOV

,PDJLQLQJPRWLRQDVDXQLYHUVDOODQJXDJHIRUYLVXDOSHUFHSWLRQGLJQLILHVWKHZRUNRIDQLPDWLRQ

ZLWKPRUHDXWKRULW\WKDQUHJXUJLWDWLQJDVHWRISUHGHILQHGPHDQVVHWE\WKHYLVXDOREMHFWV

WKHPVHOYHV

 7KHSULPDU\SUREOHPZLWKWKLVLGHDRIPRYHPHQWLWVHOILVWKDWLWLPDJLQHVWKDWPRYHPHQW

FDQEHVHSDUDWHGIURPPDWHULDO²WKDWPRYHPHQWLVPHUHO\DQDEVWUDFWIRUFHLPSRVHGXSRQ

PDWHULDOREMHFWVUHJDUGOHVVRIZKDWWKRVHREMHFWVPLJKWEH7KLVLVLQFRUUHFWRQWZRFRXQWV7KH

ILUVWLVWKDWPRWLRQLVDOZD\VGHSHQGHQWRQPDWHULDOLQWHUDFWLRQVZKHWKHUZHH[SHULHQFHWKRVH

LQWHUDFWLRQVRUQRW,WLVHDV\WRIRUJHWWKDWIDOOLQJREMHFWVGRQ¶WWUDYHOWKURXJKHPSW\VSDFHEXW


WKURXJKWKHDLUDVXEVWDQFHZLWKORFDOPDWHULDOFDSDFLWLHVVXFKDVSUHVVXUHWHPSHUDWXUHDQG

KXPLGLW\7KLVSRLQWLVSDUWLFXODUO\LPSRUWDQWIRU,QJROGZKRDUJXHVWKDWWKHZRUOGLVQRWDQ

HPSW\VSDFHILOOHGZLWKREMHFWVEXWDQRQJRLQJV\VWHPRIPDWHULDOVLQPRWLRQWKDWLQFOXGHWKH

XVXDOO\ KDUGVXUIDFHVRIWKHHDUWKWKHSRURXVPHGLXPRIWKHDLUDQGWKHLQWHUFKDQJHEHWZHHQ

DLUDQGHDUWKWKDWLVH[KLELWHGE\ZLQGZHDWKHUDQGFKHPLFDOSURFHVVHV S 

,QWXUQWKLVDUWLFXODWLRQRIUHDOLW\FKDOOHQJHVQRWRQO\WKHQRWLRQRIPRYHPHQW

LQGHSHQGHQWRIREMHFWVEXWDOVRWKHPDWHULDOLQGHSHQGHQFHRIREMHFWVWKHPVHOYHV$IWHUDOOLIZH

WKLQNRIDQREMHFWIDOOLQJWKURXJKWKHDLUWRZDUGWKHHDUWK²IRUWKHVDNHRIFODULW\OHWXVVD\D

IRRWEDOO²WKHIRRWEDOOLQWHUDFWVZLWKWKHDLUMXVWDVWKHDLULQWHUDFWVZLWKWKHIRRWEDOO7KXV

IRRWEDOOSOD\HUVPXVWOHDUQWRUHDGWKHSDWWHUQVRIWKHDLULQFOXGLQJWKHWHPSHUDWXUHDQGWKH

GLUHFWLRQRIWKHZLQGLQRUGHUWRSOD\WKHJDPHVXFFHVVIXOO\2IFRXUVHSDUWRIWKLVUHDGLQJRI

WKHZLQGVWHSVEH\RQGYLVXDOUKHWRULFLQWRWKHVHQVRU\ILHOGRIWRXFKDVSOD\HUVZRXOGIHHO

WHPSHUDWXUHDQGZLQGGLUHFWLRQPRUHWKDQVHHLW$VVXFKWKLVXQGHUVWDQGLQJRIUHDOLW\DV

PDWHULDOLQPRWLRQEHJLQVWRSXVKEH\RQGWKHVFRSHRIWKLVSURMHFWJLYHQWKDWDQLPDWLRQOLPLWHG

WRYLVXDOVLJQV1HYHUWKHOHVVLQZHFDQVHHKRZGLIILFXOWLWFDQEHWRVHSDUDWHWKHPDWHULDORIWKH

IRRWEDOOIURPWKHPDWHULDORIWKHHQYLURQPHQW

7KHVHFRQGSUREOHPZLWKPRYHPHQWLWVHOILVWKDWMXVWOLNHZLWKREMHFWVPRYHPHQWLV

H[SHULHQFHGWKURXJKVRFLDOFXOWXUDODQGLGHRORJLFDOIUDPHVRIUHIHUHQFH²HYHQWKHPRYHPHQW

RIVLPSOHVKDSHVVXFKDVOLQHVFLUFOHVDQGVTXDUHV7KLVSRLQWZDVPDGHFOHDUE\DVWXG\

E\H[SHULPHQWDOSV\FKRORJLVWV+HLGHUDQG6LPPHO FRPPRQO\GLVFXVVHGDVWKH+HLGHUDQG

6LPPHOH[SHULPHQW LQZKLFKXQGHUJUDGXDWHVWXGHQWVZHUHDVNHGWRZDWFKDVKRUWDQLPDWHG



0\SKUDVLQJKHUHRI³MXVWOLNHREMHFWV´PD\IHHOFRXQWHUSURGXFWLYHWRWKHGLVFXVVLRQLQWKHSUHYLRXVSDUDJUDSKDV
LWSRVLWLRQVPRYHPHQWDQGREMHFWVDVWZRVHSDUDWHWKLQJV0\SRLQWLVWKDWHYHQLIZHFRXOGH[SHULHQFHPRYHPHQWV
GHYRLGRIREMHFWV ZKLFKZHFDQQRW ZHZRXOGVWLOOLQWHUSUHWWKRVHPRYHPHQWVWKURXJKDVRFLDOOHQV


YLGHRIHDWXULQJWZRWULDQJOHVDFLUFOHDQGDQHPSW\UHFWDQJOH:KHQSDUWLFLSDQWVZHUHDVNHGWR

ZULWHGRZQZKDWKDSSHQHGLQWKHYLGHRPRVWGHVFULEHGWKHYLGHRDVDVWRU\RIWZRPHQ WKH

WULDQJOHV ZKRDUHURPDQWLFDOO\LQWHUHVWHGLQWKHVDPHZRPDQ WKHFLUFOH 2WKHUWKDQWKHOLQHVRI

URPDQWLFLQWHUHVWKRZHYHUWKHVWRULHVGLYHUJH,QVRPHFDVHVWKHVWRU\WDNHVWKHVKDSHRIDQ

DIIDLUZLWKWKHFLUFOHEULQJLQJKRPH³DQRWKHUPDQ´LQWKHVPDOOHURIWKHWZRWULDQJOHV$QRWKHU

H[SODQDWLRQWDNHVDPRUHRPLQRXVWRQHZLWKRQHWULDQJOHIRUFLQJWKHRWKHUWULDQJOHRXWRIWKH

KRXVHLQRUGHUWREHDORQHLQWKHURRP VLJQLILHGE\DUHFWDQJOH ZLWKWKHFLUFOH S )URP

WKLVH[SHULPHQW+HLGHUDQG6LPPHOVXJJHVWWKDWKXPDQVDUHQDWXUDOO\LQFOLQHGWRUHDGFDXVDWLRQ

LQWRPRWLRQHYHQLIWKHVKDSHVDQGPRWLRQVDUHUHODWLYHO\VLPSOH

(YHQIURPWKHIHZH[DPSOHV,KDYHRXWOLQHGKHUHZHFDQVHHKRZWKHUHDGLQJRI

FDXVDWLRQLVQRWDQHXWUDOHQWHUSULVHEXWUDWKHULVHPEHGGHGLQFXOWXUDODVVLJQPHQWVRISDUWLFXODU

PRYHPHQWVWRSDUWLFXODULGHQWLWLHV7KHPRVWREYLRXVH[DPSOHLVKRZJHQGHULVDVVLJQHGWRWKH

VKDSHVWKHWULDQJOHVODEHOHGDVPDOHZKLOHWKHFLUFOHZDVODEHOHGDVIHPDOH+RZHYHUWKH

H[SHULPHQWDOVRUHYHDOVPRUHVXEWOHMXGJHPHQWVDVZHOO2QHWULDQJOHZDVFRQVLVWHQWO\ODEHOHGDV

³DJJUHVVLYHZDUOLNHWURXEOHVRPH´ZKLOHWKHRWKHUWULDQJOHZDVODEHOHGDV³FRFN\´DQG³GHILDQW´

S 7KHFLUFOHPHDQZKLOHLVGHVFULEHGDV³ZHDNKHOSOHVVGHSHQGHQW´ S 

7KHVHLGHQWLWLHVDUHFOHDUO\LQVFULEHGZLWKWKHSUHVFULSWLYHJHQGHUUROHVWKDWZHPLJKWH[SHFW

IURPDVWXG\IURPWKHV$GGLWLRQDOO\WKHGLIIHUHQFHVEHWZHHQGHVFULSWLRQVLVMXVWDV

LPSRUWDQWDVWKHVLPLODULWLHVDVLQGLYLGXDOUHDGLQJVRIWKHVHTXHQFHRIHYHQWV DIIDLUYVEXUJODU\

YVEXOO\LQJ VXUIDFHVDPRUHORFDOL]HGVHWRIDVVXPSWLRQV7RLPDJLQHWKDWWKHUHLVDPRYHPHQW

LWVHOILVWRLPDJLQHWKDWPRYHPHQWDVDVLQJXODUKRPRJHQRXVDJHQW²DVDGLVLQWHUHVWHG

XQLYHUVDO5XEH*ROGEHUJPDFKLQHSXWWLQJREMHFWVLQPRWLRQIRUPRWLRQ¶VVDNH)URPWKH+HLGHU

DQG6LPPHOH[SHULPHQWZHFDQVHHWKDWWKLVLVFOHDUO\QRWWKHFDVH


-XVWDVLQ6HOIHDQG6HOIH¶VH[DPSOHRIWKH0DFLQWRVKLQWHUIDFHWKHFXOWXUDODQGPDWHULDO

HQWDQJOHPHQWVRIDQLPDWHGPDWHULDOV²LQFOXGLQJYLGHRVLQWHUIDFHVYLVXDOL]DWLRQVDQGRWKHUV

²LQHYLWDEO\ZLOODXWKRUL]HVRPHUHDOLWLHVDQGUHVWULFWRWKHUV7RFODLPSHUFHSWXDOSULQFLSOHVDV

QHXWUDOQDWXUDORUXQLYHUVDOSDSHUVRYHUWKHVHGLIIHUHQFHVWRWKHDGYDQWDJHRIWKHSRZHUIXODQG

WRWKHGHWULPHQWRIWKHPDUJLQDOL]HG:HGRQRWQHHGWRORRNIDULQRUGHUWRILQGDSUHFLQFW

H[DPSOHRIWKHVHSRZHUG\QDPLFVJLYHQ'LVQH\¶VILUPO\HVWDEOLVKHGKLVWRU\RIWUDGLQJLQUDFLDO

VWHUHRW\SHVDQGVWRFNFKDUDFWHUV)URPWKHLQIDPRXVMLYHWDONLQJFURZVRI'XPERWRWKH

6LDPHVHFDWVLQ/DG\DQGWKH7UDPSWRWKHGHSLFWLRQVRI1DWLYH$PHULFDQVLQ3HWHU3DQWKH

H[DPSOHVRIUDFLVWFDULFDWXUHVLQ'LVQH\DQLPDWLRQDUHWUXO\WRRQXPHURXVWRIXOO\FDSWXUHKHUH

,QGHHGDV/HKPDQ  DUJXHVLQ7KH&RORUHG&DUWRRQ%ODFN5HSUHVHQWDWLRQLQ$QLPDWHG

6KRUW)LOPVUDFLVWDQLPDWHGFDULFDWXUHVDUHDVROGDVWKHDUWRIDQLPDWHGILOPLWVHOI

'UDZLQJLQVSLUDWLRQIURPPLQVWUHOVKRZVVRPHRIWKHHDUOLHVWDQLPDWLRQVIXQFWLRQHGVROHO\

WKURXJKGHKXPDQL]LQJVWHUHRW\SHVRIVODYHVSLFFDQLQQLHVPDPPLHVDQGVDPERV,QUHFHQW

\HDUV'LVQH\KDVDWWHPSWHGWRGLVWDQFHLWVHOIIURPWKLVSUREOHPDWLFSDVWE\SURGXFLQJILOPV

IHDWXULQJQRQZKLWHSULQFHVVHVDQGLQFOXGLQJYLVXDODQGDXUDOUHIHUHQFHVWRWKHFXOWXUHVGHSLFWHG

LQWKHLUILOPV%XWHYHQLQPRUHFRQWHPSRUDU\ILOPV'LVQH\KDVVWLOOVWUXJJOHGZLWKGHSLFWLRQVRI

UDFH VHHVSHFLILFDOO\%UHDX[%RXGOLQ$OOLVRQ 

3HUFHSWXDOSULQFLSOHVGLGQRWIRUFH'LVQH\DQLPDWRUVWRSURGXFHWKHVHUDFLVWDQGVH[LVW

YLVXDOV,WLVQRWDVLIVTXDVKDQGVWUHWFKRUDQWLFLSDWLRQDUHH[FOXVLYHO\DSSOLHGWRFHUWDLQERGLO\

UHSUHVHQWDWLRQV1RQHWKHOHVVWKHSHUFHSWXDOSULQFLSOHVDUHFRPSOLFLWLQWKHVHUDFLVWDQGVH[LVW

WKHPHVEHFDXVHWKH\DVVXPHWKDWPRWLRQFDQEHGLYRUFHGIURPSDUWLFXODUFXOWXUDODQGVRFLDO



7KHVHURRWVHYHQUHDFKEDFNWR6WXDUW%ODFNWRQRIWHQUHIHUUHGWRDVWKHIDWKHURI$PHULFDQDQLPDWLRQ%ODFNWRQ¶V
VHFRQGILOP/LJKWQLQJ6NHWFKHV  LVQRWSUHVHQWHGDVDQDUUDWLYHEXWDVDVHTXHQFHRIUDFLVWYLVXDOSXQVZKHUHLQ
DUDFLDOVOXU VXFKDV³FRRQ´ ZRXOGWUDQVIRUPLQWRDFDULFDWXUHRIWKDWJURXS DEODFNIDFHPLQVWUHO 


FLUFXPVWDQFHVLPDJLQLQJDUHDOLW\GHYRLGRISROLWLFVDQGLGHRORJ\%XWWRPLPLFUHDOLW\HYHQ

SDUWLDOO\DQLPDWRUVPXVWGHFLGH:KDWZLOOEHPLPLFNHGDQGZKDWZLOOEHOHIWRXW":KLFK

FKDUDFWHUVZLOOKDYHWKHLUPRYHPHQWVH[DJJHUDWHG":KRVHERGLHVZLOOEHVTXDVKHGDQGVWUHWFKHG

LQRUGHUWRILWLQWRWKLVUHDOLW\"$VZHFDQVHHIURPWKHVKRUWOLVWRISUREOHPDWLFUHSUHVHQWDWLRQVLQ

'LVQH\ILOPVWKHDQVZHUVWRWKHVHTXHVWLRQVDUHQRWDVQHXWUDODVWKHSULQFLSOHVPDNHWKHPRXWWR

EH$VXVHIXODVWKHSHUFHSWXDOSULQFLSOHVPD\EHWKH\DUHVWLOOXQGHUFXWE\DQH[SODQDWRU\ORJLF

WKDWDVVXPHVDVWDEOHXQLYRFDOXQGHUVWDQGLQJRIPDWHULDOUHDOLW\

7RVRPHGHVLJQHUVPRWLRQGHVLJQPD\VHHPWRDYRLGWKLVFULWLTXHEHFDXVHRIWKHDUWLVWLF

IRFXVRQOLQHVDQGVTXDUHVUDWKHUWKDQDQLPDWHGFKDUDFWHUV%XWDVZHFDQVHHIURPWKH+HLGHU

DQG6LPPHOH[SHULPHQWHYHQVLPSOHVKDSHVFDQEHLQWHUSUHWHGDVHPERGLHGDJHQWVZLWKVRFLDO

FKDUDFWHULVWLFV7KLVLVQRWWRVD\WKDWHYHU\PRYLQJEXWWRQDQGPHQXZLWKLQDQLQWHUIDFHLVUHDG

RUGHVLJQHGDVDQDXWRQRPRXVEHLQJOLYLQJZLWKLQWKHVFUHHQEXWUDWKHUWKDWPRWLRQUHPDLQV

ODGHQZLWKKLVWRULFDODQGFXOWXUDOYDOXHVHYHQLQFLUFXPVWDQFHVZKHUHGHVLJQHUVFODLP

XQLYHUVDOLW\&DOOLQJDWWHQWLRQDQGUHVSRQGLQJWRWKHVHYDOXHV\VWHPVUHTXLUHVDPRUHUKHWRULFDOO\

JURXQGHGDSSURDFKWRPRWLRQGHVLJQWKDQWKHSHUFHSWXDOSULQFLSOHVFDQRIIHU,RXWOLQHIRXU

DVSHFWVRIVXFKDQDSSURDFKLQWKHIROORZLQJVHFWLRQV



 7KRXJK DQLPDWRUV RIWHQ GHVFULEH WKHLU FUDIW ZLWK VRPH GLVWDQFH IURP SK\VLFDO UHDOLW\ WKURXJK WKH ODQJXDJH RI
H[DJJHUDWLRQ RU LQVSLUDWLRQ VRPH VWXGLRV GR GUDZ PRWLRQ GLUHFWO\ IURP SHUIRUPHUV WKURXJK PRWLRQ FDSWXUH
WHFKQRORJ\7KHVHILOPVRIWHQDUJXHWKDWWKLVDSSURDFKWRDQLPDWLRQHQJDJHVLQIXOO\UHDOLVWLFPRWLRQEH\RQGZKDWFDQ
EHDFKLHYHGE\DWHDPRIDQLPDWRUVGHVLJQLQJWKHPRWLRQVWKHPVHOYHV+RZHYHUDV$OOLVRQ  GHPRQVWUDWHVLQ
³%ODFNIDFH+DSS\)HHW´PRWLRQFDSWXUHWHQGVWRHQJDJHZLWKWKHVDPHLVVXHVRIUDFHDQGUHSUHVHQWDWLRQDVWUDGLWLRQDO
DQLPDWLRQ

 9RLFH DVVLVWDQWV VXFK DV 6LUL &RUWDQD $OH[D DQG *RRJOH $VVLVWDQW GR SUHVHQW D OLPLWHG H[FHSWLRQ WR WKLV UXOH
7KRXJKLQVRPHFLUFXPVWDQFHVWKHVHDVVLVWDQWVIXQFWLRQZLWKQRYLVXDOLQWHUIDFHPDQ\LQVWDQFHV LQFOXGLQJSKRQHDQG
GHVNWRSDSSOLFDWLRQV GHSHQGRQVPDOODQLPDWLRQVWRFRPPXQLFDWHWKDWWKHDVVLVWDQWLVOLVWHQLQJWKLQNLQJSURFHVVLQJ
DQGVSHDNLQJ


$IIHFW3HUVRQDOLW\

$V,QRWHDWWKHHQGRIWKHSUHYLRXVFKDSWHUFXUUHQWPRWLRQGHVLJQJXLGHOLQHVKDYH

HQFRXUDJHGGHVLJQHUVWRFRQVLGHUWKHDIIHFWLYHSRWHQWLDORIPRWLRQ*RRJOH¶VGHVLJQJXLGHOLQHV

GHVFULEHXVLQJDQLPDWLRQDVDQ³RSSRUWXQLW\WRGHOLJKW´DQG³DGGDVHQVHRISOD\IXOQHVVWRWKH

XVHUH[SHULHQFH´ 0DWHULDO'HVLJQ*XLGHOLQHVFSDUD 7KHJXLGHOLQHVIRUWKH8QLYHUVDO

:LQGRZV3ODWIRUP -DFREVD RIIHUVLPLODUDGYLFHFODLPLQJWKDWPRWLRQDGGV³HOHJDQFH´

DQG³FRPPXQLFDWHV\RXUDSS¶VSHUVRQDOLW\DVDXVHUPRYHVWKURXJKDQH[SHULHQFH´ SDUD 

7KHVHJXLGHOLQHVWHQGWREHEULHIDQGDUHUDUHO\DFFRPSDQLHGZLWKDQH[SODQDWLRQRIKRZ

PRWLRQVPLJKWFRQWULEXWHWRDXVHU¶VDIIHFWLYHUHVSRQVH

1HYHUWKHOHVVWKHVLJQVRIDIIHFWLYHSRWHQWLDOSURYLGHDYDOXDEOHDYHQXHIRUIUDPLQJ

PRWLRQGHVLJQLQDUKHWRULFDOOLJKW$V-RQHV  DUJXHVLQ³,QIRUPDWLRQ*UDSKLFVDQG

,QWXLWLRQ´UHDGHUVRIWHQHYDOXDWHYLVXDOGHVLJQVDVDVHWRILQWXLWLYHSRVLWLYHDQGQHJDWLYH

DVVRFLDWLRQVRIWHQDVLIUHVSRQGLQJWRWKHTXHVWLRQ³,VWKLVYLVXDOO\DSSHDOLQJ"´ S 7KHVH

DVVRFLDWLRQVDUHQRWWKHSURGXFWRIFDUHIXOH[SOLFLWDQDO\VLVEXWHPHUJHDVDSURGXFWRIWKH

UHDGHU¶VSULRUH[SHULHQFHVDQGH[SHFWDWLRQV)RUH[DPSOHLQWKHFDVHRIDVLPSOHEDUJUDSKVRPH

UHDGHUVPD\EHOLHYHWKDWJUDSKVVKRXOGJHQHUDOO\SUHVHQWDPLQLPDOLVWVW\OHFRQVLVWLQJRIQR

GHVLJQHOHPHQWVEH\RQGWKHD[LVWKHLUODEHOVDQGWKHEDUVWKHPVHOYHV6XFKDQDXGLHQFHLQOLQH

ZLWKIXQFWLRQDOLVWGHVLJQVFKRODUVOLNH7XIWHZRXOGOLNHO\VFRIIDWDEDUJUDSKZLWKFRORU

VKDGLQJRULPDJHVLQWXLWLYHO\UHFRJQL]LQJWKDWWKHJUDSKGRHVQRWPDWFKWKHLUFXOWXUDO

DVVRFLDWLRQVIRUFUHGLEOHUHSUHVHQWDWLRQVRIGDWD%\WKHVDPHWRNHQRWKHUUHDGHUVPLJKW

LQWXLWLYHO\VNLSRYHUDEDUJUDSKFUHDWHGLQWKH³PLQLPDOLVW´VW\OHYLHZLQJWKHODFNRIFRORUDQG

W\SRJUDSK\DVPHUHO\DVFLHQWLILFVDIHJXDUGZLWKOLWWOHYDOXHWRWKHDYHUDJHUHDGHU,QERWKRI

WKHVHFDVHVWKHHIIHFWLYHQHVVRIWKHJUDSKGHSHQGVRQZKHWKHUWKHYLVXDOVW\OHFRUUHVSRQGVZLWK


WKHDXGLHQFH¶VH[SHFWDWLRQV,QWKLVOLJKW-RQHVSRVLWLRQVDIIHFWDVDNH\KHXULVWLFIRUWKH

LQWHUVHFWLRQRIWHFKQLFDOSURIHVVLRQDOFRPPXQLFDWLRQDQGYLVXDOGHVLJQHPSKDVL]LQJWKH

LPSRUWDQFHRIWKHDXGLHQFH¶VH[SHFWDWLRQVDQGWKHFRQWH[WZKHUHWKH\ZLOOHQFRXQWHUWKHGHVLJQ

S 

,VHHWKHYDOXHRI-RQHV¶DIIHFWLYHKHXULVWLFIRUPRWLRQGHVLJQRQWZRDFFRXQWV)LUVWLW

DOORZVXVWRGHVFULEHWKHDIIHFWLYHSRWHQWLDORIGHVLJQHGPRWLRQWKDWPHHWVWKHDXGLHQFH¶V

H[SHFWDWLRQVZLWKRXWUHLI\LQJWKHFRQQHFWLRQEHWZHHQHIIHFWLYHPRWLRQDQG³UHDO´PRWLRQ)RU

H[DPSOHFRQVLGHUDQLFRQPRYLQJODWHUDOO\DFURVVWKHVFUHHQRIDPRELOHGHYLFHWKDWGHFHOHUDWHV

DVLWDSSURDFKHVLWVSRVLWLRQ2QWKHRQHKDQGZHFDQGHILQHWKLVPRYHPHQWWKURXJKWKH

SHUFHSWXDOSULQFLSOHVFODLPLQJWKDWWKHPRYHPHQWLVHIIHFWLYHEHFDXVHLWPLPLFVUHDOLW\

FRPPXQLFDWLQJWKHZHLJKWDQGPRPHQWXPRIWKHLFRQ³UHDOLVWLFDOO\´+RZHYHUXVLQJ-RQHV¶

DIIHFWKHXULVWLFZHFDQFRQQHFWWKHHIIHFWLYHQHVVRIWKHPRYHPHQWWRDODUJHUUDQJHRIUKHWRULFDO

IDFWRUV,VWKHXVHUH[SHFWLQJWKHXVHRIVPDOOVXEWOHDQLPDWLRQVDWWHQWLRQJUDEELQJODUJH

DQLPDWLRQVRUDVWDWLFPRWLRQOHVVVFUHHQ":KDWLVWKHXVHU¶VSULRUH[SHULHQFHZLWKWKLVLFRQRU

ZLWKWKLVLQWHUIDFH"+RZZLOOWKHDXGLHQFHUHVSRQGWRWKHDGKHUHQFHWR RUGHYLDWLRQIURP WKHLU

H[SHFWDWLRQV"7XUQLQJWRWKHVHTXHVWLRQVUHORFDWHVWKHGHILQLWLRQRI³HIIHFWLYH´PRWLRQIURPWKH

GHVLJQLWVHOI PRWLRQLVHIIHFWLYHEHFDXVHLWPRYHVQDWXUDOO\ WRWKHDXGLHQFH PRWLRQLVHIIHFWLYH

EHFDXVHLWDFKLHYHVDSDUWLFXODUDIIHFW 

(YDOXDWLQJDQGGHVLJQLQJPRWLRQLQWHUPVRIDIIHFWDOVRDOORZVXVWRFODULI\VRPHRIWKH

FRQFHSWVWKDWVHHPWREHWDNLQJURRWLQWKHFRQWHPSRUDU\LQWHUIDFHGHVLJQJXLGHOLQHV*RRJOH¶V

0DWHULDO'HVLJQ*XLGHOLQHVIRUH[DPSOHLQYLWHGHVLJQHUVWRFUHDWH³DVHQVHRISOD\IXOQHVV´LQ

WKHXVHUH[SHULHQFHE\ILQGLQJ³RSSRUWXQLWLHVIRUGHOLJKW´EXWJLYHQRH[SODQDWLRQRIKRZ

SOD\IXOQHVVRUGHOLJKWUHODWHWRWKHXVHRIPRWLRQ,QVWHDG*RRJOHLOOXVWUDWHVWKLVDGYLFHWKURXJK


H[DPSOHV2QHH[DPSOHVKRZVDQLOOXVWUDWLRQRIDQDQLPDWHG75H[VWUXJJOLQJWRUHDFKGRZQ

IRUDQLFHFUHDPFRQHDFFRPSDQLHGE\WKHWH[W³2KQR6RPHWKLQJZHQWZURQJ«´$QRWKHU

H[DPSOHVKRZVDORDGLQJVFUHHQWKDWIOLSVWKURXJKWKHSKUDVHV³$GGLQJVHVVLRQV«´DQG

³&KHFNLQJ\RXUVFKHGXOH´ZKLOHD\HOORZUDFLQJELNHVKLIWVEDFNDQGIRUWKLPSDWLHQWO\ )LJXUH

 

7KHSRWHQWLDOYDOXHRIWKHVHDQLPDWLRQVGHSHQGVRQDQDIIHFWLYHUHVSRQVHWRXQH[SHFWHG

PRYHPHQW7UXHWKHGLQRVDXULPDJHPDNHVXVHRIVTXDVKDQGVWUHWFKDQGDQWLFLSDWLRQLQRUGHU

WRVLJQDOWKHLQHODVWLFIRUFHRIWKHGLQRVDXUUHDFKLQJGRZQIRUWKHLFHFUHDPDQGWKHELF\FOHXVHV

VORZLQDQGVORZRXWLQRUGHUWRVLJQDOWKDWWKHIRUFHVRIIULFWLRQPRPHQWXPDQGLQHUWLDWKDW

DIIHFWWKHPRYHPHQWRIWKHELF\FOH+RZHYHUWKHIDFWRUWKDWPDNHVWKHVHPRYHPHQWVSOD\IXOLV

WKHZD\WKH\GLVUXSWWKHXVHU¶VH[SHFWDWLRQV,QWKHGLQRVDXUHUURUSDJHH[DPSOHWKHXVHUH[SHFWV

WRRSHQDSDUWLFXODUSDJHEXWLVLQVWHDGUHURXWHGWRWKLVVLOO\PHVVDJH7KRXJKWKHXVHUPD\

LQLWLDOO\EHIUXVWUDWHGDWWKHVQDJLQWKHV\VWHPWKHXQH[SHFWHGPRYHPHQWEULHIO\GUDZVWKHLU

DWWHQWLRQWRWKHFXWHGLQRVDXU7KHGLQRVDXU¶VVWUXJJOHWRUHDFKWKHLFHFUHDPDFNQRZOHGJHVWKH

XVHU¶VSRWHQWLDOIUXVWUDWLRQIRUUHFHLYLQJWKHHUURULQWKHILUVWSODFHDQGVLPXOWDQHRXVO\IUDPHV

WKDWIUXVWUDWLRQDVDFXWHVLOO\PLVKDS7KXVZKLOHWKHHIIHFWGRHVGHSHQGRQWKHFXWHQHVVRIWKH

GLQRVDXUWKH³SOD\IXO´DQG³GHOLJKWIXO´DVSHFWRIWKHDQLPDWLRQLVWKH KRSHIXOO\ SOHDVDQW

VXUSULVHRIWKHGLQRVDXULQDQXQOLNHO\ORFDWLRQLQWKHLQWHUIDFH


)LJXUH([DPSOHVRIFUHDWLYHFXVWRPL]DWLRQLQ*RRJOH¶V0DWHULDO'HVLJQSULQFLSOHV


7KHVDPHQRWLRQDOVRDSSOLHVWRWKHELF\FOHORDGLQJVFUHHQ0XFKOLNHWKHFLUFXPVWDQFHV

RIDQHUURUPHVVDJHXVHUVDUHW\SLFDOO\QRWWKULOOHGWRZDLWWKURXJKDORDGLQJVFUHHQLQWKH

SURFHVVRIRSHQLQJDSURJUDPRUDSSOLFDWLRQ/RDGLQJVFUHHQVLQWHUUXSWWKHXVHU¶VWUDLQRI

WKRXJKWDQGSRWHQWLDOO\VLJQDODVORZQHWZRUNRUSURFHVVRU$FFRUGLQJO\PRVWYLVXDOLQGLFDWLRQV

RIORDGLQJLQYROYHOLWWOHPRUHWKDQDGHIDXOWV\VWHPDQLPDWLRQVXFKDV$SSOH¶VFRORUIXOVSLQQLQJ

SLQZKHHORUWKHVSLQQLQJFLUFXODUORDGLQJLFRQLQ*RRJOH¶V0DWHULDO'HVLJQSDUDGLJP7KH


ELF\FOHH[DPSOHSOD\VRQWKHVHH[SHFWDWLRQVQRWEHFDXVHWKHELF\FOHLVDQLPDWHGEXWEHFDXVH

WKHVFHQHLVFXVWRPEXLOWIRUWKHDSSOLFDWLRQLQVWHDGRIUHO\LQJRQWKHGHIDXOWDQLPDWLRQVW\OH

7KHXVHUPD\EHIDPLOLDUZLWKWKHUHSHWLWLYHORRSLQJPRYHPHQWRIPRVWORDGLQJVFUHHQVEXW

WUDQVSRVLQJWKLVPRYHPHQWWRWKHEDFNDQGIRUWKPRWLRQRIWKHELF\FOHEUHDNVWKHXVHU¶V

H[SHFWDWLRQVIRUWKLVIXQFWLRQ7KHVHDSSHDOVWR³GHOLJKW´DQG³SOD\´DUHOHVVUHODWHGWRDQ\

VSHFLILFPRYHPHQWWKDQWRWKHUHODWLRQVKLSEHWZHHQWKHXVHU¶VH[SHULHQFHVZLWKWKHGHVLJQ

FRQYHQWLRQV

2QHDUHDZKHUHWKHDIIHFWLYHWKUHDGVRIWKHXVHU¶VH[SHULHQFHWHQGWRWDQJOHDQGNQRWLV

WKURXJKWKHFRQFHSWRISHUVRQDOLW\&RQWHPSRUDU\JXLGHOLQHVIRUPRWLRQGHVLJQRIWHQFODLPWKDW

PRWLRQ³DGGVSHUVRQDOLW\´WRDQLQWHUIDFH -DFRE EXWWKHQGLVFXVVSHUVRQDOLW\LQDODUJHO\

XQLYRFDOFDSDFLW\7KHJXLGHOLQHVGRQRWGLVFXVVWKHW\SHVRISHUVRQDOLWLHVWKDWRQHPLJKW

GHYHORSQRUWKHDQLPDWLRQVWKDWFRXOGEHXVHIXOIRUDUWLFXODWLQJWKHVHSHUVRQDOLWLHV,QVWHDGWKH

PDMRULW\RIJXLGHOLQHVVLPSO\UHIHUHQFHSHUVRQDOLW\DVDELQDU\SURSRVLWLRQ(LWKHUDGHVLJQKDV

SHUVRQDOLW\RULWGRHVQRW,QWKLVUHGXFWLYHIRUPWKHVHSHUIXQFWRU\QRGVWRSHUVRQDOLW\DFWDV

OLWWOHPRUHWKDQDZHDNHFKRRIWKHSULQFLSOHVRIFKDUDFWHUDQLPDWLRQ7KHZULWHUVRIWKHVH

JXLGHOLQHVVHHPWRLPSOLFLWO\XQGHUVWDQGWKDWWKHUHLVDUHODWLRQVKLSEHWZHHQPRYHPHQWDQG

SHUVRQLILFDWLRQEXWODFNWKHDELOLW\WRFRQQHFWWKHLGHDRIDSHUVRQDOLW\ZLWKWKHGHVLJQRIDQ

LQWHUIDFH



,QGHHGORDGLQJLVRIWHQGLVSOD\HGXVLQJDQLPDWHGYLVXDOVLQRUGHUWRVLJQDOWKDWWKHGHYLFHLVVWLOOSURFHVVLQJWKH
LQIRUPDWLRQDQGQRWIUR]HQRUVWDOOHG


 &XVWRPEXLOW ORDGLQJ DQLPDWLRQV GR QRW DOZD\V SRUWHQG VXFK SRVLWLYH HIIHFWV :KHQ ORDGLQJ DQLPDWLRQV GUDZ
DWWHQWLRQWRWKHSURJUDPRUDSSOLFDWLRQXVHUVDUHPRUHOLNHO\WREODPHWKDWSURJUDPIRUORQJORDGWLPHVUDWKHUWKDQ
DWWULEXWHWKHGHOD\WRWKHVSHHGRIWKHLUQHWZRUNRUWKHSURFHVVLQJSRZHURIWKHLUGHYLFH 0LWFKHOO 


7KDWLVH[FHSWIRU+HDG8QOLNHWKHGHFRQWH[WXDOL]HGPD[LPVIRXQGLQWKH8:3

JXLGHOLQHVRUWKH0DWHULDO'HVLJQJXLGHOLQHV+HDG  ORFDWHVSHUVRQDOLWLHVRIPRWLRQDVD

PHFKDQLVPIRUHVWDEOLVKLQJ RUUHLWHUDWLQJ EUDQGLGHQWLW\,QWKHSURFHVV+HDGGHVFULEHVWKH

SRWHQWLDOIRUDPXOWLWXGHRIGLIIHUHQWPRWLRQEDVHGSHUVRQDOLWLHV³,V\RXUEUDQGHQHUJHWLF"

)ULHQGO\"6WURQJ"3OD\IXO"6WDEOH"$OOWKLVGHVFULSWLYHODQJXDJHFDQEHWUDQVODWHGLQWRPRWLRQ

MXVWOLNHLWFDQIRURWKHUGHVLJQWRROVOLNHW\SRJUDSK\DQGFRORU$QLPDWLRQVSHDNVLQVLPLODU

ZD\V´ S 0RVWLPSRUWDQWO\+HDGJRHVRQWRH[SODLQKRZFHUWDLQVW\OHVRIPRWLRQUHODWHWR

VSHFLILFSHUVRQDOLWLHV6KHDUJXHVWKDWWKHXVHRIERXQF\HODVWLFPRYHPHQWHVWDEOLVKHVDVHQVHRI

IULHQGOLQHVVZKLOHGUDVWLFVSHHGFKDQJHVDQGVKDUSPRYHPHQWVVLJQDOLPSDWLHQFHDQGXUJHQF\

S +HDGHYHQGLVFXVVHVKRZWKHODFNRIPRYHPHQWFDQLQGLFDWHDIRUPRISHUVRQDOLW\

6ORZO\IDGLQJYLVXDOHOHPHQWVRQDQGRIIWKHVFUHHQFDQPDNHWKHLQWHUIDFHDSSHDUFDOPZKLOH

VWHDG\VORZPRYHPHQWVPD\VLJQDOVWDELOLW\ S 7KRXJK+HDGGRHVQRWJRVRIDUDVWR

H[SODLQKRZRUZK\WKHVHVSHFLILFW\SHVRIPRWLRQFRUUHVSRQGZLWKFHUWDLQSHUVRQDOLW\WUDLWVWKLV

EUHDNGRZQSURYLGHVDUKHWRULFDOO\JURXQGHGOHQVIRUFKRRVLQJRQHVW\OHRIPRYHPHQWRYHU

DQRWKHU

)XUWKHUPRUH+HDG¶VEUHDNGRZQRIWKHVHSHUVRQDOLWLHVVWURQJO\UHVHPEOHVWKHUHVHDUFKLQ

SURIHVVLRQDODQGWHFKQLFDOZULWLQJSDUWLFXODUO\LQUHODWLRQWRWKHVWXGLHVRIW\SHIDFHSHUVRQDOLWLHV

IURPWKHHDUO\V$VQRWHGE\%UXPEHUJHU  WHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWRUV

RIWHQLQWXLWLYHO\FKRRVHW\SHIDFHVEDVHGRQWKHLUDIIHFWLYHFKDUDFWHULVWLFV/LNHSHUVRQDOLWLHVRI

PRWLRQW\SHIDFHVDUHUHDGDVGLUHFWIULHQGO\HOHJDQWIRUPDODQGHYHQPDVFXOLQHRUIHPLQLQH

EDVHGRQWKHLUYLVLEOHFKDUDFWHULVWLFV+RZHYHUXQOLNHGLVFXVVLRQVRISHUVRQDOLWLHVZLWKLQPRWLRQ

GHVLJQUHVHDUFKHUVLQWHFKQLFDOFRPPXQLFDWLRQKDYHIRXQGVXSSRUWIRUWKHVHLQWXLWLYHUHVSRQVHV

WKRXJKHPSLULFDOVWXGLHV0DFNLHZLF]  IRUH[DPSOHRIIHUVDWKRURXJKDQDO\VLVRIWKH




DQDWRPLFDOGLIIHUHQFHVEHWZHHQ³IULHQGO\´DQG³SURIHVVLRQDO´W\SHIDFHV S DQGXVHVKHU

XQGHUVWDQGLQJRIWKHVHIHDWXUHVWRKLJKOLJKWWKHPHUJHURIIULHQGO\DQGSURIHVVLRQDOWUDLWVZLWKLQ

W\SHIDFHV S 2WKHUVWXGLHVH[DPLQHKRZW\SHIDFHSHUVRQDOLWLHVDUHH[SUHVVHGDQG

LQWHUSUHWHGDFURVVFXOWXUHV $PDUH 0DQQLQJ&DOGZHOO DQGGLIIHUHQWPHGLD

0DFNLHZLF] &RQVHTXHQWO\WKHFRQFHSWRISHUVRQDOLWLHVQRWRQO\UHVRQDWHVEHWZHHQ

PRWLRQGHVLJQDQGWHFKQLFDOFRPPXQLFDWLRQEXWSURYLGHVIXUWKHUDYHQXHVWKDWFDQEHXVHGIRU

VWXG\LQJDQGFODULI\LQJWKHDIIHFWLYHWKUHDGVRIPRWLRQ

6WLOOGHVSLWHWKHH[SODQDWRU\SRZHUDQGGLVFLSOLQDU\UHVRQDQFHRIWKHFRQFHSWRI

SHUVRQDOLWLHVZLWKLQPRWLRQGHVLJQZHVKRXOGWDNHFDUHWRPDLQWDLQDFULWLFDOH\HZKHQWHDFKLQJ

RUUHVHDUFKLQJWKURXJKWKLVVFKHPD'LYLGLQJPRWLRQLQWRVHWVRISHUVRQDOLWLHVFDQHDVLO\VOLGH

EDFNLQWRDSHUFHSWXDOFRJQLWLYHGHVLJQIUDPHZRUNZKHUHLQPRYHPHQWVDUHXQGHUVWRRGWREH

LQKHUHQWO\FXWHRUQDWXUDOO\MDUULQJLQVWHDGRIWKHVRFLDOO\FRQVWUXFWHGUHVXOWVRIRXUUHSHDWHG

LQWHUDFWLRQVZLWKSHRSOHDQGREMHFWVLQWKHZRUOG7KRXJKUHVHDUFKHUVH[DPLQLQJW\SHIDFH

SHUVRQDOLWLHVUHSHDWHGO\PDNHWKLVSRLQWLWLVERWKPRUHFKDOOHQJLQJDQGPRUHHVVHQWLDOZKHQ

SHUVRQDOLWLHVDUHDWWULEXWHGWRPRWLRQLQRUGHUWRDYRLGSHUQLFLRXVIRUPVRIPRYHPHQWEDVHG

HVVHQWLDOLVP LHOD]\SHRSOHUHO\RQ;PRYHPHQWVQRUPDOSHRSOHUHO\RQ=PRYHPHQWVHWF 

7KLVLVZK\,VHHSHUVRQDOLWLHVDVRQO\RQHEXQGOHRIWKHPDQ\DIIHFWLYHWKUHDGVLQYROYHGLQ

PRWLRQGHVLJQ

 (YHQZKLOHLWPD\RFFDVLRQDOO\GULIWLQWRDSHUFHSWXDOLVWPRGHGLVFXVVLQJPRWLRQGHVLJQ

GHFLVLRQVLQWHUPVRIDIIHFWSHUVRQDOLW\SURYLGHVDVWURQJUKHWRULFDOO\JURXQGHGDOWHUQDWLYHWRWKH

SXUHO\FRJQLWLYHSULQFLSOHVRIPRWLRQGHVLJQ2QDEURDGOHYHOLWDOORZVXVWRXQGHUVWDQGKRZ



%\³LQWKHZRUOG´,DPDOVRLQFOXGLQJRXULQWHUDFWLRQVZLWKYLUWXDOREMHFWVDQGYLUWXDOZRUOGVLQFOXGLQJDQLPDWHG
ILOPVLQWHUIDFHVDQGJDPHHQYLURQPHQWV


PRWLRQIXQFWLRQVLQUHODWLRQWRWKHXVHU¶VH[SHULHQFHVDQGWKHFRQYHQWLRQVRIWKHJHQUHDWKDQG,W

DOVRDOORZVXVWRFKDOOHQJHWKHQRWLRQWKDWPRWLRQVKDYHDVLQJXODULGHQWLILDEOHPHDQLQJ

HVWDEOLVKHGE\WKH³UHDOLW\´RIWKHLQWHUIDFH

&KRUHRJUDSK\

$V,GLVFXVVHGLQ&KDSWHURQHRIWKHUHSHDWHGFULWLTXHVRIPRWLRQDVDSURIHVVLRQDO

GHVLJQHOHPHQWLVWKDWLWFDQEHGLVWUDFWLQJGUDZLQJWKHXVHU¶VDWWHQWLRQDZD\IURPWKH

LQIRUPDWLRQWKH\DUHWU\LQJWRILQG-RKQVRQ6KHHKDQSURYLGHVDQH[FHOOHQWUHKHDUVDORIWKLV

FULWLTXHLQKLVGLVFXVVLRQRIZHEGHVLJQLQ

XVHUVZLOOLQVWLQFWLYHO\IL[DWHRQDQDQLPDWHGWUDLQWKDWPHDQGHUVUDQGRPO\DURXQGRQ

WKHVFUHHQ$QDQLPDWHGSHUVRQZKRUHDGVWRWKHXVHUZLWKYDULRXVFKDQJLQJH[SUHVVLRQV

ZRXOGFHUWDLQO\FDSWXUHPRUHDWWHQWLRQWKDQWKHZULWWHQZRUGVRQWKHWRSRIWKHVFUHHQ

7KHTXHVWLRQLVZKHWKHUWKHGHVLJQHUUHDOO\ZDQWVWRVDFULILFHWKHXVHUV¶OLPLWHGDWWHQWLRQ

WRWKHVHDQLPDWLRQV S 

0RWLRQIDUIURPWKHRQO\GHVLJQHOHPHQWWKDWKDVEHHQODEHOHGDVDGLVWUDFWLRQ,QGHHG

EHWZHHQW\SRJUDSK\FRORUVRXQGDQGDUUDQJHPHQWQHDUO\DQ\FDWHJRU\WKDWZHFDWHJRUL]HDVD

GHVLJQFKRLFHFDQEHODEHOHGDVDGLVWUDFWLRQIURPH[SHULHQFHRIUHDGLQJDQGWKLQNLQJ$V

/DQKDPDUJXHVLQ7KH(FRQRPLFVRI$WWHQWLRQ  WKHVHEURDGFODLPVDERXWGLVWUDFWLQJ

GHVLJQHOHPHQWVUHIOHFWWKHWUDQVSDUHQWORJLFRISULQWZKLFK³HFRQRPL]HVRQPRVWRIWKHWKLQJV

ZHXVHWRRULHQWRXUVHOYHVLQWKHZRUOGZH¶YHHYROYHGLQ²WKUHHGLPHQVLRQDOVSDWLDOVLJQDOV

VRXQGVFRORUVPRYHPHQW²LQRUGHUWRVSHQGDOORXUDWWHQWLRQRQDEVWUDFWWKLQNLQJ´ S 7KH

FRQWHPSRUDU\XVHRIFRORUW\SRJUDSK\DQGRWKHUGHVLJQHOHPHQWVWKHQUHIUDPHWKHLUVHHPLQJO\


GLVWUDFWLQJWHQGHQFLHVLQDSURGXFWLYHZD\IRULQVWDQFHXVLQJFRORUDQGFRQWUDVWWRDWWUDFWWKH

XVHU¶VJD]HWRDQLPSRUWDQWEXWWRQRUPHQXZLWKLQDQLQWHUIDFH7RVLWXDWHGHVLJQUKHWRULFDOO\ZH

VKRXOGDOVRUHFRJQL]HKRZWKHUHODWLRQVKLSEHWZHHQSURGXFWLYHDQGGLVWUDFWLQJFDQEHDOLJQHG

ZLWKDUDQJHRILQWHQWLRQDOLWLHVEDVHGRQWKHGHVLJQHUDXGLHQFHDQGSXUSRVH$EULJKWO\FRORUHG

EDQQHUDGYHUWLVHPHQWPD\EHVDLGWRGLVWUDFWDXVHUIURPUHDGLQJWKHWH[WRIDEORJSRVWEXWDQ

DGYHUWLVHUPD\VHHWKHXVHUDVGLVWUDFWHGDZD\IURPWKHDGYHUWLVHPHQWE\WKHWH[W'HVLJQ

HOHPHQWVFDQVWLOOEHGLVWUDFWLQJ²ZHDOOFDQLPDJLQHDQGFULQJHDWWKHZHEVLWHVWKDWDXWRSOD\

FRPPHUFLDOYLGHRVRUDWWKHXVHRIDQRYHUO\GHFRUDWLYHW\SHIDFHRQDUHVXPH²EXWWKHVH

LQVWDQFHVDUHGLVWUDFWLQJGXHWRWKHLUUHODWLRQWRDVSHFLILFFRQWH[WQRWEHFDXVHRIWKHGHVLJQ

HOHPHQWLWVHOI

6RKRZFDQZHPDNHXVHRIPRWLRQLQWKHGHVLJQZRUNRISURIHVVLRQDODQGWHFKQLFDO

FRPPXQLFDWLRQZLWKRXWIDOOLQJSUH\WRDQLPDWLRQDVGLVWUDFWLRQ"0RVWGHVLJQJXLGHOLQHVUHVSRQG

ZLWKZDUQLQJVWR³XVHDQLPDWLRQMXGLFLRXVO\´ $SSOHSDUD RUJHQHULFDGYLFHWR

³PDLQWDLQWKHXVHUFRQWH[W´ZKHQWUDQVLWLRQLQJIURPRQHDUHDRIDQDSSOLFDWLRQWRDQRWKHU

-DFREV +RZHYHUQHLWKHURIWKHVHJXLGHOLQHVLVSDUWLFXODUO\LQVWUXFWLYHDERXWKRZRQH

PLJKWFRQQHFWWKLVDGYLFHWRDFWXDOGHVLJQSUDFWLFHV7KH\PLJKWDVZHOOVWDWH³$YRLGGLVWUDFWLQJ

DQLPDWLRQ´ZLWKRXWHYHUH[SODLQLQJZKDWFRQVWLWXWHVDGLVWUDFWLQJDQLPDWLRQLQWKHILUVWSODFH

2QHVHWRIJXLGHOLQHVWKDWGRHVJREH\RQGWKHPRVWJHQHULFDGYLFHLV*RRJOH¶V0DWHULDO

'HVLJQ*XLGHOLQHVZKLFKLQFOXGHVDGHVLJQSULQFLSOHWKDWWKH\FDOO³FKRUHRJUDSK\´*RRJOH¶V

GHILQLWLRQRIWKLVSULQFLSOHLVTXLWHEULHI³0DWHULDOLQPRWLRQJXLGHVWKHXVHU¶VIRFXVWKURXJK

LQWHUDFWLRQVE\VKDULQJHOHPHQWVDFURVVWUDQVLWLRQV´ 0DWHULDO'HVLJQ*XLGHOLQHVESDUD 

+RZHYHUXQOLNHRWKHUVHWVRIJXLGHOLQHV*RRJOHSURYLGHVSUDFWLFDOH[DPSOHVWRVKRZKRZ

PRYHPHQWFDQEHFKRUHRJUDSKHGWRUHVSRQGWRWKHXVHU¶VDWWHQWLRQDOQHHGV7KHJXLGHOLQHV


VXJJHVWIRUH[DPSOHWKDWWKHDSSHDUDQFHRIPXOWLSOHQHZYLVXDOVVKRXOGEHVWDJJHUHGDOORZLQJ

WKHXVHUWRVXEFRQVFLRXVO\QRWHHDFKHOHPHQWLQGLYLGXDOO\DVWKH\DSSHDU 7DEOH 7KH

JXLGHOLQHVDOVRRIIHUH[DPSOHVIRUPDLQWDLQLQJWKHXVHU¶VDWWHQWLRQZKHQPXOWLSOHYLVXDOHOHPHQWV

PXVWFKDQJHSRVLWLRQDWWKHVDPHWLPHVXJJHVWLQJWKDWGHVLJQHUVVKRXOGDYRLGSDWWHUQVRI

PRYHPHQWZKHUHWKHSDWKVRIHOHPHQWVFURVVSDWKV )LJXUH)LJXUH 

7DEOH0DWHULDO'HVLJQ*XLGHOLQHVIRU6WDJJHULQJ0RWLRQ
 6HTXHQFHRI$SSHDUDQFH 5HDGLQJ3DWWHUQ

([DPSOH3UDFWLFHWR$YRLG
,IDOOREMHFWVDSSHDU
VLPXOWDQHRXVO\WKHXVHU
ZRQ¶WNQRZZKHUHWRIRFXV

([DPSOH3UDFWLFHWR$YRLG
%\XVLQJWKLVVHTXHQFHWKH
XVHULVOHGWRGLUHFWIRFXV
EDFNDQGIRUWKDFURVVWKH
VFUHHQ

([DPSOH%HVW3UDFWLFH
7KLVVHTXHQFHDOORZVXVHUV
WRQRWHGLIIHUHQWREMHFWV
TXLFNO\E\XVLQJWKHVLPSOHVW
IRFDOSDWK

7KHYLVXDOVIURPWKH0DWHULDO'HVLJQ*XLGHOLQHVYLVXDOL]HVWKHVHSUDFWLFHVLQJLIIRUPDWWRVKRZ
WKHREMHFWVDSSHDULQJLQUHDOWLPH7KHLPDJHVDERYHUHSUHVHQWWKHVDPHSDWWHUQVEXWZLWKVWDWLF
LPDJHV



)LJXUH0RYHPHQWSDWWHUQWRDYRLGEDVHGRQ0DWHULDO'HVLJQ*XLGHOLQHV



)LJXUH$SSURSULDWHPRYHPHQWSDWWHUQEDVHGRQ0DWHULDO'HVLJQ*XLGHOLQHV

,QERWKRIWKHVHH[DPSOHVZHFDQVHHKRZWKHFKRUHRJUDSK\RIWKHLQWHUIDFHVWUXFWXUHV

PRWLRQZLWKWKHXVHU¶VYLVXDOIRFXVLQPLQG7KHXVHRIVWDJJHUHGWLPLQJVKRZQLQ7DEOH

GHPRQVWUDWHVKRZPRWLRQFDQVXJJHVWDSDUWLFXODUUHDGLQJSDWWHUQZKHQDQDUUD\RILFRQVDSSHDUV

RQWKHVFUHHQIRUWKHILUVWWLPH7KHPRYHPHQWSDWWHUQRIIHUHGLQ)LJXUHVKRZVKRZDGHVLJQ

SDWWHUQFDQPDLQWDLQWKHYLHZHU¶VIRFXVWKURXJKDFRPSOH[WUDQVLWLRQDQGKRZGHVLJQHUVPD\

FKRRVHWRUHPRYHVRPHYLVXDOREMHFWVIURPWKHIUDPHLQRUGHUWRKLJKOLJKWWKHPRYHPHQWRI

RWKHUV

$QG\HWZKDW,ILQGPRVWYDOXDEOHDERXWWKHVHH[DPSOHVLVQRWWKHUXOHVWKHPVHOYHVEXW

WKHSRWHQWLDOEHQHILWRIGHVFULELQJWKHVHLQGHSHQGHQWGHVLJQUXOHVDQGJXLGHOLQHVDVDIRUPRI


FKRUHRJUDSK\(W\PRORJLFDOO\GHILQHGDV³GDQFHZULWLQJ´ZHW\SLFDOO\WKLQNRIFKRUHRJUDSK\DV

DSODQQHGVHTXHQFHRIERGLO\PRYHPHQWVLQDGDQFHFRPSRVLWLRQEXWRYHUWKH\HDUVWKHWHUPKDV

EHHQDSSOLHGWRWKHGHVLJQRIDZLGHUDQJHRISKHQRPHQD)LJKWVHTXHQFHVZKHWKHULQILOPRURQ

VWDJHDUHGHVFULEHGDVDIRUPRIFKRUHRJUDSK\ 2ODYDUULD /LNHZLVHLQWKHILHOGRI

LQIRUPDWLRQDUFKLWHFWXUHSUDFWLWLRQHUVGHOLQHDWHEHWZHHQD³VHUYLFHRUFKHVWUDWLRQ´LQZKLFK

FRPSXWDWLRQDOSURFHVVHVDUHFRQWUROOHGE\DFHQWUDOVRXUFHDQG³VHUYLFHFKRUHRJUDSK\´LQZKLFK

SURFHVVHVDUHWUDLQHGWRVHQGDQGUHFHLYHLQIRUPDWLRQLQUHVSRQVHWRRQHDQRWKHU +DYH\ 

$WWKHFRUHRIWKHWHUPRIFKRUHRJUDSK\HLWKHULQUHODWLRQWRPRYHPHQWRUWRPRUHJHQHUDOIRUPV

RIDFWLYLW\LVWKHLGHDWKDWPRYHPHQWVDUHQRWGHVLJQHGLQGLYLGXDOO\EXWDVDQLQWHUUHODWLRQDO

V\VWHP)UDPLQJWKHFRQFHSWLQWHUPVRIGDQFHFKRUHRJUDSK\DOWKRXJKHDFKGDQFHUPRYHVDVDQ

LQGLYLGXDO LQWKDWWKH\FRQWUROWKHLURZQERGLHV WKHPRYHPHQWRIWKHGDQFHDVDZKROHLVRIWHQ

FRPSRVHGDQGLQWHUSUHWHGZLWKERWKLQGLYLGXDODQGFROOHFWLYHPRYHPHQWVLQPLQG

7KHWKHRUHWLFDOXQGHUSLQQLQJVRIFKRUHRJUDSK\LQUHODWLRQWRWHFKQLFDODQGSURIHVVLRQDO

FRPPXQLFDWLRQH[WHQGIURPWZRHDUOLHUDWWHPSWVWRGHVFULEHWKHGHVLJQRIPRWLRQJUDSKLFVLQ

&RPSXWHUVDQG:ULWLQJFRPSRVLWLQJDQGPRQWDJH&RPSRVLWLQJLVWKHFRPELQDWLRQRIVHYHUDO

LQGHSHQGHQWVRXUFHVVRWKDWWKHILQDOSURGXFWLVLGHQWLILHGDVDVLQJOHFRPSRVLWLRQ WKLVLVVLPLODU

WRWKHZD\VRPHXVHWKHWHUPUHPL[ ,QWKHILOPLQGXVWU\FRPSRVLWLQJLVSULPDULO\DVVRFLDWHG

ZLWKOD\HULQJYLVXDOHIIHFWVLQFOXGLQJJUHHQVFUHHQVFRPSXWHUJHQHUDWHGLPDJHVDQGHYHQWKH

XVHRIILOWHUVWRDGMXVWWKHFRORUDQGWH[WXUHRIWKHILQDOSURGXFW(DFKRIWKHVHWHFKQLTXHV

RSHUDWHVLQUHODWLRQWRWKHLOOXVLRQWKDWDILOPH[LVWVDVDVLQJOHPHGLDREMHFWUDWKHUWKDQDVDVHWRI



,VWRSZLWKGDQFHU¶VUHODWLRQWRHDFKRWKHUIRUWKHVDNHRIVLPSOLFLW\DQGWKHOLPLWVRIWKHVFRSHRIYLVXDOUKHWRULF
+RZHYHU WKHUH DUHRWKHU OHVV REYLRXV IDFWRUV WKDW ZH FDQ WKLQN RI DV SDUW RI FKRUHRJUDSK\ LQ D WKHRUHWLFDO VHQVH
LQFOXGLQJWKHVSDFHRIWKHURRPWKHOLJKWLQJDQGWKHDXGLHQFH¶VERGLO\SRVLWLRQVLQUHODWLRQWRWKHGDQFHUV7KRXJK,
GRQ¶WHQJDJHZLWKWKHVHQRQKXPDQ I DFWRUVLQP\GHVFULSWLRQRIFKRUHRJUDSK\KHUH,VHHWKHVHDGGLWLRQDOYDOHQFHV
DVSRWHQWLDOO\IUXLWIXOGLUHFWLRQVIRUIXWXUHLQTXLU\HVSHFLDOO\ZLWKUHJDUGWRWKHUROHRIPRYHPHQWLQWKHFRQWH[WRI
DXJPHQWHGDQGYLUWXDOUHDOLWLHV


GLIIHUHQWLDWHGYLVXDOHOHPHQWV'UDZLQJRIIWKLVHPSKDVLVRQFRPELQLQJGLVVLPLODUSDUWVWRFUHDWH

QHZPHDQLQJV0DQRYLFK DE DQG%ROWHUDQG*UXVLQ  KDYHXVHGWKH

FRQFHSWRIFRPSRVLWLQJWRGHVFULEHZKDWWKH\VHHDVJHQUHUXSWXULQJTXDOLWLHVRIPHGLD

FRPELQDWLRQLQPRWLRQJUDSKLFV%XWZKLOHWKHWHUPFRPSRVLWLQJLQGLFDWHVWKDWPHGLDLV

FRPELQHGLWGRHVQRWDOORZXVWRHDVLO\DUWLFXODWHKRZRUZK\GLIIHUHQWPHGLDFDQEHRUVKRXOG

EHFRPELQHG

$SSO\LQJWKLVLGHDRIPHGLDFRPSRVLWLQJWRGHVLJQSUDFWLFHV6NMXOVWDG  GUDZV

DQRWKHUWHUPIURPWKHOH[LFRQRIILOPVWXGLHVLQWKHFRQFHSWRIPRQWDJH:KHUHDVFRPSRVLWLQJ

FHQWHUVRQWKHIDFWRIFRPELQDWLRQPRQWDJHEHJLQVWRLGHQWLI\WKHSXUSRVHRIFRPELQDWLRQ

IUDPLQJPXOWLPHGLDDVWKHMX[WDSRVLWLRQRIGHVLJQHOHPHQWV7KHMX[WDSRVHGHOHPHQWVFDQEH

XVHGWRUHLQIRUFHFHUWDLQTXDOLWLHVLQDPXOWLPHGLDWH[WVXFKDVWKURXJKWKHXVHRIDFRQVLVWHQW

FRORUVFKHPHDFURVVPHGLDHOHPHQWV-X[WDSRVHGHOHPHQWVFDQDOVRSXUSRVHIXOO\FRQIOLFWRQH

DQRWKHUVXFKDVWKHXVHRIDQH[WUHPHO\ODUJHW\SHIDFHWRVWDQGRXWIURPRWKHUPHGLDHOHPHQWVLQ

DQLQWHUIDFH$FHQWUDOSRLQWIRU6NMXOVWDG¶VFRQFHSWRIPRQWDJHLVWKDWLWFDQEHUHDGVSDWLDOO\

YLDWKHDUUDQJHPHQWRIPHGLDHOHPHQWVLQDQLQWHUIDFH JUDSKLFDOO\ YLDDEVWUDFWLRQUHDOLVP

FRORUHWF DQGVSDWLRWHPSRUDOO\ YLDWKHUHODWLRQVEHWZHHQPRYLQJREMHFWVDQGLQWKHWUDQVLWLRQ

IURPRQHSDJHRIDZHEVLWHWRDQRWKHU  S 6NMXOVWDGRIIHUVWKHVHWKUHHGLPHQVLRQVDV

SRWHQWLDOFDWHJRULHVIRUWH[WXDODQDO\VLVRIPRWLRQGHVLJQVKRZLQJKRZHDFKRIWKHVHFDWHJRULHV

WXUQVWKHDQDO\VW V¶DWWHQWLRQWRZDUGDGLIIHUHQWVHWRIPHGLDORJLFDOMX[WDSRVLWLRQV



³*HQUHUXSWXULQJ´KHUHUHIHUVWRWKHEOXUEHWZHHQFRPSRVLWLRQDODSSURDFKHVWRYLGHRVWLOOLPDJHDQLPDWLRQDQG
SURFHGXUDOUKHWRULFWKDWDUHGLVFXVVHGLQGHWDLOE\0DQRYLFK)RUH[DPSOHDIWHUQRWLQJWKHPL[WXUHRIYLGHRHIIHFWV
DQGDQLPDWHGW\SRJUDSK\LQPXVLFYLGHRV0DQRYLFKDUJXHVWKDW³ZKLOHWKHSDUWLFXODUDHVWKHWLFVROXWLRQVYDU\IURP
RQHSLHFHWRWKHQH[WDQGIURPRQHGHVLJQHUWRDQRWKHUWKH\DOOVKDUHWKHVDPHORJLFWKHDSSHDUDQFHRIPXOWLSOHPHGLD
VLPXOWDQHRXVO\LQWKHVDPHIUDPH:KHWKHUWKHVHPHGLDDUHRSHQO\MX[WDSRVHGRUDOPRVWVHDPOHVVO\EOHQGHGWRJHWKHU
LVOHVVLPSRUWDQWWKDQWKHIDFWRIWKLVFRSUHVHQFHLWVHOI´ S 


6NMXOVWDG¶VWKLUGFDWHJRU\VSDWLRWHPSRUDOPRQWDJHSURYLGHVDVDOLHQWOHQVIRUPRWLRQ

GHVLJQDVLWDWWHPSWVWRDFFRXQWIRUWKHUDQJHRIZD\VWKDWPRYHPHQWRFFXUVZLWKLQDQLQWHUIDFH

LQFOXGLQJ³ LQWKHLQWHUIDFHLWVHOI LQWKHPRYLQJLPDJHVDQGPRWLRQJUDSKLFVLQWHJUDWHGLQWR

WKHZHEVLWHDQG LQWKHPRYHPHQWFUHDWHGDVDXVHULQWHUDFWVZLWKDWH[W´ S $FFRUGLQJ

WR6NMXOVWDGWKHLQWHUUHODWLRQEHWZHHQWKHVHWKUHHVLPXOWDQHRXVVLWHVRIPRYHPHQWDUHZKDW

GLVWLQJXLVKPRWLRQJUDSKLFVIURPSKRWRPRQWDJH PRUHVSDWLDOWKDQWHPSRUDO DQGILOPPRQWDJH

PRUHWHPSRUDOWKDQVSDWLDO 6SDWLRWHPSRUDOPRQWDJHLVQRWRQO\FRQVWLWXWHGWKURXJKWKH

PRYHPHQWRIYLVXDOHOHPHQWVEXWLVDOVRUHDFWLRQVWRPRYHPHQWLQWKDWWKHXVHU¶VFOLFNVVZLSHV

DQGLQSXWRIIHUDWKUHDGWKDWPXVWEHZRYHQLQWRWKHZD\PRWLRQLVGHVLJQHG

&KRUHRJUDSKLHVRIPRWLRQGHVLJQDV,RXWOLQHGLQUHODWLRQWR0DWHULDO'HVLJQJXLGHOLQHV

SURYLGHODQJXDJHIRUGLIIHUHQWLDWLQJRQHDSSURDFKWRVSDWLRWHPSRUDOPRQWDJHIURPDQRWKHU-XVW

DVWKHUHDUHFHUWDLQFKRUHRJUDSKLFPRYHVDVVRFLDWHGZLWKFHUWDLQVW\OHVRIGDQFHVXFKDVOLIWVLQ

EDOOURRPGDQFHRUWKHVL[VWHSLQEUHDNGDQFHWKHUHDUHFHUWDLQFKRUHRJUDSKLFPRYHVDVVRFLDWHG

ZLWKGLIIHUHQWXVHUH[SHULHQFHVLQWHUDFWLRQVDQGJHQUHFRQYHQWLRQV7KHFKRUHRJUDSKLFVW\OHRI

PRWLRQLQDPXVLFYLGHRZLOOQHFHVVDULO\GLIIHUIURPDPRELOHDSSGXHWRWKHGLIIHUHQFHLQVFUHHQ

VL]HSXUSRVHDQGXVHUDFWLYLW\(YHQZKHQFRQVLGHULQJVLPLODUPHGLD²WZRL26DSSVIRU

H[DPSOH²WKHUHZLOOEHGLIIHUHQFHVLQWKHXVHRIPRWLRQMXVWDVWKHUHZRXOGEHVW\OLVWLF

GLIIHUHQFHVEHWZHHQWZRGDQFHVIURPWKHVDPHVW\OH

,QWXUQWKLVYDULHW\RIDYDLODEOHFKRUHRJUDSKLHVSOD\VDNH\UROHLQUKHWRULFL]LQJWKH

UHODWLRQVKLSEHWZHHQDQLPDWLRQDQGDWWHQWLRQIDUPRUHWKDQSUHYLRXVDSSURDFKHVWRPRWLRQ

GHVLJQ7KHIUDPHZRUNRIFRJQLWLYHSHUFHSWLRQLPDJLQHVPRWLRQDVDELQDU\SURSRVLWLRQHLWKHU

WKHXVHU¶VDWWHQWLRQLVGUDZQWRWKHLQWHQGHGDUHDRIWKHLQWHUIDFHRUWKH\DUHVDLGWREHGLVWUDFWHG

E\PRWLRQXQZLWWLQJO\DWWUDFWHGOLNHDFDWIROORZLQJDODVHUSRLQWHU%\XQGHUVWDQGLQJPRWLRQ


WKURXJKFKRUHRJUDSK\ZHFDQVHHWKDWLQGHHGWKHUHDUHVRPHGHVLJQVWKDWSOD\RQWKLV

UHODWLRQVKLSEHWZHHQPRWLRQDQGDWWHQWLRQOLNHIROORZWKHERXQFLQJEDOOFDSWLRQVRQFKLOGUHQ¶V

VLQJDORQJVKRZV+RZHYHUWKLVLVRQO\RQHRIPDQ\ZD\VRIGHVLJQLQJDUHODWLRQEHWZHHQLPDJH

H\HDQGPRYHPHQW,IWKLVIROORZWKHERXQFLQJEDOODSSURDFKZRUNVDJDLQVWWKHGHVLJQHUV¶

LQWHQWLRQVGLVWUDFWLQJWKHXVHUIURPQHFHVVDU\YLVXDOLQIRUPDWLRQWKHSUREOHPPD\QRWOLHLQ

PRYHPHQWDVDZKROHEXWLQWKHVW\OHRIWKHFKRUHRJUDSK\6RIDFHGZLWKWKHFULWLTXHRID

GLVWUDFWLRQDGHVLJQHUPLJKWDGMXVWWKHDFFHOHUDWLRQRIPRYHPHQWRUFKDQJHWKHFRORUVDQG

OD\RXWRIWKHGHVLJQWREHWWHUDWWUDFWWKHXVHU¶VDWWHQWLRQUDWKHUWKDQVLPSO\UHPRYHPRYHPHQW

DOWRJHWKHU

(YHQWKRVHFDVHVWKDWPD\VHHPWRSUHVHQWXQLYHUVDOO\DSSOLFDEOHUXOHVIRUPRWLRQGHVLJQ

FDQEHIUDPHGDVDSDUWLFXODUFKRUHRJUDSKLFVWDQFHJURXQGLQJPRGHOVRIHIIHFWLYHPRWLRQGHVLJQ

ZLWKLQDFRQWH[WRIXVHUVGHVLJQHUVPHGLDDQGPDWHULDOV*RRJOH¶V0DWHULDO'HVLJQ*XLGHOLQHV

SURYLGHDSULPHH[DPSOH,Q0DWHULDO'HVLJQFKRUHRJUDSK\LVGHILQHGDVDJHQHUDOQHXWUDO

SULQFLSOHEXWE\LQFOXGLQJGR¶VDQGGRQ¶WVRIFKRUHRJUDSK\WKHJXLGHOLQHVEHOLHWKHXQGHUJLUGLQJ

ORJLFVDQGDVVXPSWLRQVRIWKHLUDSSURDFK7KH³GR´SDWWHUQVDUJXHIRUPRYHPHQWVWKDWZRUN

³VPRRWKO\DQGTXLFNO\´DQGWKDW³FUHDWHDFOHDUVPRRWKIRFDOSRLQWLQDVLQJOHGLUHFWLRQ´

0DWHULDO'HVLJQ*XLGHOLQHVESDUD 7KHFRQWUDVWLQJ³GRQ¶W´PRYHPHQWVZDUQ

GHVLJQHUVQRWWR³RYHUZKHOP´XVHUVZLWKPRWLRQDQGDUJXHWKDWPXOWLSOHPRWLRQSDWKVZLOO

LQHYLWDEO\GLVWUDFWWKHXVHU ESDUD 



,QDZD\GHILQLQJFKRUHRJUDSK\WKURXJK6NMXOVWDG¶VWKUHHDVSHFWVRIVSDWLRWHPSRUDOPRQWDJHPDNHVLWLPSRVVLEOH
WR FUHDWH D YLVXDO GHVLJQ ZLWKRXW PRYHPHQW 0DNLQJ VHQVH RI HYHQ D ³VWDWLF´ LPDJH UHTXLUHV WKH YLHZHU¶V JD]H WR
FRQVWDQWO\GDUWDFURVVWKHYLVXDOILHOGLQRUGHUWRGHYHORSDPHQWDOLPDJHRIWKHLPDJHDVDZKROH&KRUHRJUDSK\WKHQ
VLPSO\EXLOGVRQWKLVSUHH[LVWLQJSUHGLOHFWLRQWRPRYHPHQW


7KHVHGHWDLOVPDNHVHQVHIRU*RRJOH¶VSXUSRVHVDVWKH\KRSHWKDWGHVLJQHUVZLOOFUHDWH

DSSOLFDWLRQVZKHUHWKHUHLVQHYHUDQ\TXHVWLRQRIZKHUHWRORRNRUZKDWWRWRXFK6WLOOZKLOH

WKHVHUXOHVZRXOGEHDSSOLFDEOHWRPDQ\VW\OHVRILQWHUIDFHVWKH\DUHIDUIURPXQLYHUVDODVWKH\

GLVFRXQWWKHSRWHQWLDOYDOXHRIGLVWUDFWLQJRUGLVRULHQWLQJRQH¶VXVHUDVDFKRUHRJUDSKLFVFKHPH

7KRXJKWKLVODQJXDJHPD\VHHPWRFRQWUDGLFWWKHJRDOVRIWKHDYHUDJHDSSGHYHORSHUIURPWKH

SHUVSHFWLYHRIDQDGYHUWLVHUFUHDWLQJSRSXSDGVWKHFHQWUDOJRDOLVDIRUPRIGLVWUDFWLRQDVWKH

XVHU¶VDWWHQWLRQLVUHGLUHFWHGIURPWKHWDVNDWKDQGWRDQRYHUORRNHGDUHDRIDQLQWHUIDFH WKHDG 

7KHVHFKRUHRJUDSKLHVRIUHGLUHFWLRQPD\RYHUZKHOPFRQIXVHDQGHYHQDQJHUDSRWHQWLDOXVHU

EXWWRIUDPHWKHVHUHVSRQVHVDVXQLYHUVDOO\LQHIIHFWLYHVLPSO\PLVVHVWKHUDQJHRISXUSRVHVDQG

DXGLHQFHVWKDWPD\EHDGGUHVVHGWKURXJKPRWLRQ7KLVLVQRWWRVD\WKDWWKH0DWHULDO'HVLJQ

H[DPSOHVLQKHUHQWO\OHDGWRSRRUO\LQWHUIDFHVEXWWKDWWKH\OHDGWRGHVLJQSUDFWLFHVWKDWRFFOXGH

WKHUKHWRULFDOGHFLVLRQVWKDWXQGHUJLUGPRWLRQGHVLJQ6HHLQJWKHGR¶VDQGGRQ¶WVRI0DWHULDO

'HVLJQDVWZRSRWHQWLDOLQWHUIDFHFKRUHRJUDSKLHVRQWKHRWKHUKDQGEULQJVUKHWRULFDO

FRQVLGHUDWLRQVWRWKHIRUHIURQWHQFRXUDJLQJGHVLJQHUVWRVKDSHWKHXVHURIPRWLRQLQUHODWLRQWR

WKHVSHFLILFFRQVWUDLQWVRIWKHVLWXDWLRQ

,QVXPIUDPLQJPRWLRQGHVLJQDIRUPRIFKRUHRJUDSK\FRPSOLFDWHVVLPSOLVWLFYLHZVRI

DQLPDWLRQDVPHUHO\DYLVXDOWUXPSFDUGSXOOLQJXVHUVWRORRNDWGHVLJQHOHPHQWVDJDLQVWWKHLU

ZLOO/LNHZLVHWKHSRWHQWLDOYDULHW\RIFKRUHRJUDSKLFDSSURDFKHVUXOHVDQGORJLFVRSHQVDQHZ

DYHQXHIRUUKHWRULFDODQDO\VLVDOORZLQJWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWRUVWRGHWHUPLQH

WKHFKRUHRJUDSK\WKDWEHVWILWVWKHQHHGVRIWKHLUSXUSRVHDXGLHQFHDQGPHGLXPUDWKHUWKDQ

VHDUFKLQJIRUWKHRQHVHWRIUXOHVRUSULQFLSOHVWKDWFDQH[SODLQHYHU\XVHRIPRWLRQ'HVSLWHWKHVH

EHQHILWVFKRUHRJUDSKLHVDUHFRPSOH[UHTXLULQJGHVLJQHUVWRXQGHUVWDQGWKHYLVXDOLW\RI

LQWHUIDFHVDVWHPSRUDOO\DQGVSDWLDOO\G\QDPLF,WLVQRWHDV\WRGHILQHRUGHVLJQLQGLYLGXDO


FKRUHRJUDSKLHVZLWKSUHFLVLRQ6WLOOWKLVUKHWRULFL]DWLRQLVQHFHVVDU\LIZHDUHWRWHDFKDQGVWXG\

DQLPDWLRQZLWKWKHVDPHDWWHQWLRQDVZHKDYHGLUHFWHGWRRWKHUDUHDVRIYLVXDOGHVLJQ

3UHVHQFH

7KHILUVWWZRUKHWRULFDOIHDWXUHVRIDQLPDWLRQ,KDYHGLVFXVVHGSHUVRQDOLW\DQG

FKRUHRJUDSK\FKDUDFWHUL]HDQLPDWLRQDVSUHFRQVWUXFWHGYLVXDOHOHPHQWVRIDQLQWHUIDFH7KH

EHQHILWRIVWDUWLQJZLWKWKHVHFRQFHSWVLVWKDWWKH\FDQEHDSSOLHGWRGLIIHUHQWPHGLDLQUHODWLYHO\

VLPLODUZD\V'HVLJQLQJDQHQHUJHWLFSHUVRQDOLW\IRUDFDUWRRQFKDUDFWHULQYROYHVDVLPLODU

DSSURDFKWRPRWLRQGHVLJQDVGHVLJQLQJDFRPSXWHULQWHUIDFHZLWKDQHQHUJHWLFSHUVRQDOLW\

/LNHZLVHWKHFKRUHRJUDSK\RIWKHOLPLWHGYLVXDOVSDFHRIDQ$SSOH:DWFKUHTXLUHVWKHVDPH

DWWHQWLRQWRH\HPRYHPHQWDQGFRJQLWLYHORDGDVWKHFKRUHRJUDSK\RIDQH[SODLQHUYLGHR7KRXJK

WKHDSSOLFDWLRQRIERWKSULQFLSOHVFHUWDLQO\GLIIHUVIURPVLWXDWLRQWRVLWXDWLRQWKH\FUHDWHDXVHIXO

FRQFHSWXDOEULGJHEHWZHHQWKHSULQFLSOHVRIFKDUDFWHUDQLPDWLRQDQGPRWLRQGHVLJQDVDZKROH

6WLOOZKHQZHPHQWDOO\FRPSDUHWKHPRYHPHQWRIDQDQLPDWHGIHDWXUHILOPWRWKHDQLPDWLRQVRI

DQLQWHUIDFHLWLVFOHDUWKDWWKHWZRDUHGUDVWLFDOO\GLIIHUHQW+RZFDQZHFKDUDFWHUL]HWKHVH

GLIIHUHQFHV"+RZFDQZHDUWLFXODWHKRZRXUDSSURDFKWRPRWLRQGHVLJQPXVWFKDQJHIURPRQH

PHGLXPWRDQRWKHU"

2QHHVVHQWLDOGLIIHUHQFHLVLQWHUDFWLYLW\'HILQHGE\3RUWHU  DV³WKHUDQJHDQGW\SHV

RIHQJDJHPHQW EHWZHHQSHRSOHEHWZHHQSHRSOHDQGLQIRUPDWLRQ HQFRXUDJHGRUDOORZHGE\

GLJLWDOGHVLJQV´ S LQWHUDFWLYLW\SOD\VDFULWLFDOUROHLQXQGHUVWDQGLQJKRZWKHPDWHULDO

DIIRUGDQFHVRISDUWLFXODUPHGLDFDQVKDSHWKHXVHU¶VH[SHULHQFH7KHGHVLJQRIDERRNIRU

H[DPSOHLQFOXGHVDQXPEHURIGHVLJQHOHPHQWVWKDWDOORZIRUVSHFLILFLQWHUDFWLRQVEHWZHHQWKH

WH[WDQGWKHUHDGHU7KHVL]HRIWKHPDUJLQVDOORZVWKHUHDGHUWRIOLSWKURXJKWKHSDJHVDQGDFWVDV


DSODFHWRKROGWKHWH[WZKLOHUHDGLQJ7KHELQGLQJDIIHFWVZKHWKHUWKHERRNFDQOD\IODWRQD

WDEOH(YHQEHWZHHQUHODWLYHO\VLPLODUPHGLDVXFKDVEHWZHHQDERRNDQGDPDJD]LQHGHVLJQHUV

PXVWSODQIRUGLIIHUHQWLQWHUDFWLRQVEHWZHHQUHDGHUDQGWH[W,QWXUQLQWHUDFWLYLW\FRQQHFWVGHVLJQ

WRTXHVWLRQVRI:KHUHZLOOWKLVEHUHDG":KDWDFWLRQVGRHVWKHUHDGHUQHHGWRWDNHLQRUGHUWR

UHDGWKLVWH[W"+RZFDQVPDOOFKDQJHVLQWKHFRQVWUXFWLRQRIWKHWH[WOHDGWRFKDQJHVLQZKHUH

DQGKRZWKH\UHDG"

%HFDXVHLQWHUDFWLYLW\FDQGHVFULEHPDWHULDOUHODWLRQVEHWZHHQXVHUVDQGPHGLDLWLV

SDUWLFXODUO\XVHIXOIRUGUDZLQJRXWWKHGLIIHUHQFHVEHWZHHQDSSOLFDWLRQVIRUPRWLRQGHVLJQ7R

VHHDQDQLPDWHGILOPLQDWKHDWUHWRWDNHRQHH[WUHPHGHSHQGVRQPLQLPDODFWLYLW\RIWKHYLHZHU

:HPLJKWVKLIWSRVLWLRQVODXJKDWWKHVFUHHQRUHDWFRQFHVVLRQVEXWQRQHRIWKHVHDFWLRQVDIIHFW

WKHPRYHPHQWVRQVFUHHQ:KHQLQWHUDFWZLWKDQLPDWHGILOPVDVYLHZHUVPRUHWKDQIXOORQXVHUV

/LJKWVDUHGLPPHGDQGSKRQHVDUHVHWWRYLEUDWHVRWKDWZHFDQPDLQWDLQRXUIRFXVRQWKH

SURJUHVVLRQRIPRYHPHQWV DQGVRXQG RQVFUHHQ

1HZPHGLDIRUPDWVVXFKDVDSKRQHLQWHUIDFHRQWKHRWKHUKDQGUHTXLUHDQHDUFRQVWDQW

VWUHDPRILQWHUDFWLRQVIURPWKHXVHULQRUGHUWRIXQFWLRQDVLQWHQGHG$SSOLFDWLRQLFRQVUHTXLUH

WDSSLQJEORJSRVWVUHTXLUHVFUROOLQJDQGROGPHVVDJHVUHTXLUHVZLSLQJLQRUGHUIRUWKHLQWHUIDFH

WRIXQFWLRQDVLQWHUIDFH0HDQZKLOHLQFRQWUDVWWRWKHH[SHULHQFHRIILOPWKHSKRQHXVHU¶VIRFXV

LVIOHHWLQJ7KHVPDOOVFUHHQWDNHVXSDIUDFWLRQRIWKHLUYLVXDOILHOG²WKHLUJD]HIUHHWRURDP

IURPRXUSKRQHVWRRXUVXUURXQGLQJVDQGEDFNDJDLQ,QGHHGWKHHDVHRIVKLIWLQJIRFXVLV

HVVHQWLDOWRPDQ\PRELOHDSSOLFDWLRQV)ROORZLQJGLUHFWLRQVLQ*RRJOH0DSVIRUH[DPSOH

HQFRXUDJHVXVHUVWRGRXEOHFKHFNWKHLUSURJUHVVE\PHGLDWLQJEHWZHHQWKHQXPHULFDODEVWUDFW

GLVSOD\RIWKHSKRQHDQGWKHLPPHGLDWHO\YLVLEOHODQGPDUNVRIWKHHQYLURQPHQW,WLVOHVVWKDWWKH

XVHULVGLVWUDFWHGWKDQWKHIDFWWKDWWKH\FDQPRUHHDVLO\VKLIWEHWZHHQPXOWLSOHIRFLIORZLQJIURP


VFUHHQWRHQYLURQPHQWDQGHQYLURQPHQWWRVFUHHQ$WVRPHPRPHQWVWKHXVHUPLJKWQHHGWR

IRFXVPRUHIXOO\RQWKHSKRQHFDUHIXOO\VWXG\LQJWKHVWUHHWQDPHVDQGORFDWLRQV,QRWKHU

LQVWDQFHVWKHXVHUPLJKWIRUJHWDERXWWKHSKRQHDOOWRJHWKHUSXWWLQJLWLQDSRFNHWXQWLOWKHQH[W

QRWLILFDWLRQ:KHUHWKHILOPJRHU VDWWHQWLRQLVVWDEOHDQGFRQFHQWUDWHGWKHSKRQHXVHU¶VDWWHQWLRQ

LVYDULDEOHDQGGLVSHUVHG0RWLRQGHVLJQVRRIWHQFHOHEUDWHGDVDPRGHRIIHHGEDFNDQGGHFULHG

DVDSRWHQWLDOGLVWUDFWLRQPXVWEHDEOHWRWDNHWKHVHPDWHULDOGLIIHUHQFHVLQWRDFFRXQW

 %RWKWKHVFKRODUO\DQGFRUSRUDWHDQLPDWLRQJXLGHOLQHVGLVFXVVHGLQWKHSUHYLRXVFKDSWHU

ODUJHO\WDNHWKHVHGLIIHUHQFHVIRUJUDQWHGIUDPLQJLQWHUDFWLRQDVDXQLYHUVDOO\SRVLWLYHIDFWRULQ

DQLPDWLRQ7KHPRVWGHWDLOHGGLVFXVVLRQWRWKLVHQGFDQEHIRXQGLQ*RRJOH¶V0DWHULDO'HVLJQ

*XLGHOLQHVZKHUH³5HVSRQVLYH,QWHUDFWLRQ´LVOLVWHGDVRQHRIWKHSULQFLSDOVW\OHJXLGHOLQHVIRU

PRWLRQ7KH\VWDWH³,QWHUDFWLRQHQFRXUDJHVGHHSHUH[SORUDWLRQRIDQDSSE\FUHDWLQJWLPHO\

ORJLFDODQGGHOLJKWIXOVFUHHQUHDFWLRQVWRXVHULQSXW(DFKLQWHUDFWLRQLVWKRXJKWIXOSHUKDSV

ZKLPVLFDOEXWQHYHUGLVWUDFWLQJ´ 0DWHULDO'HVLJQ*XLGHOLQHVGSDUD 7KRXJKWKH

JXLGHOLQHVJLYHH[DPSOHVRI³ORJLFDO´DQG³GLVWUDFWLQJ´PRYHPHQWVLQRWKHUVHFWLRQVRIWKHLU

ZHEVLWHWKLVGHILQLWLRQRILQWHUDFWLYLW\ODFNVWKHFRQWH[WXDOJURXQGLQJWRGLVFXVVPRWLRQ

UKHWRULFDOO\:KDWLVWKHORJLFRILQWHUDFWLYHPRWLRQDQGLQZKDWVLWXDWLRQVPLJKWWKLVPRWLRQEH

VHHQDVGLVWUDFWLQJ"+RZFDQZHOLQNLQWHUDFWLYHPRWLRQWRSDUWLFXODUVLWXDWLRQVLQVWHDGRID

JHQHUDOLQMXQFWLRQWRDOZD\VSXVKIRUPRUHLQWHUDFWLRQLQDOOVLWXDWLRQV" 

$VVFKRODUO\GLVFXVVLRQVZLWKLQ&RPSXWHUVDQG&RPSRVLWLRQKDYHVKRZQWKHUHDUH

VHYHUDOPHWKRGVRIIUDPLQJLQWHUDFWLYLW\UKHWRULFDOO\VRPHPRUHDSSOLFDEOHWRPRWLRQGHVLJQ

WKDQRWKHUV,QKHUHVVD\³,QWHUIDFHDV([RUGLXP7KH5KHWRULFRI,QWHUDFWLYLW\´&DUQHJLH  



$OOWKLVLVQRWWRVD\WKDWYLGHREDVHGPHGLDDUHGHYRLGRILQWHUDFWLRQRUWKDWYLGHRLVD³SDVVLYH´PHGLXPLQUHODWLRQ
WR WKH ³DFWLYH´ PHGLXP RI D XVHULQWHUIDFH $OO WRR RIWHQ VXFK ODQJXDJH HVWDEOLVKHV D IDOVH ELQDU\ WKDW DUELWUDULO\
SULYLOHJHVXVHUDFWLRQDVDQLQKHUHQWWHFKQLFDOJRRG


GHVFULEHVWKUHHLQGHSHQGHQW³PRGHV´RILQWHUDFWLYLW\PXOWLGLUHFWLRQDOLW\PDQLSXODELOLW\DQG

SUHVHQFH7KRXJKWKHVHPRGHVDUHRIWHQFRSUHVHQWWKH\UHIHUWRGLVWLQFWVWUDWHJLHVIRU

³HQDFW>LQJ@PRGHOVIRUFUHDWLQJYDULRXVGHJUHHVRILQWHUDFWLYLW\´ S ,QWXUQWKHVH

FDWHJRULHVPDNHLWHDVLHUWRGLVWLQJXLVKEHWZHHQWKHDVSHFWVRILQWHUDFWLYLW\WKDWUHODWHWRPRWLRQ

GHVLJQDQGWKRVHWKDWGRQRW

0XOWLGLUHFWLRQDOLW\FHQWHUVRQWKHLQWHUDFWLYHDIIRUGDQFHVHQDEOHGE\WKHQHWZRUNHG

K\SHUWH[WXDOFDSDFLWLHVRIQHZPHGLDFRPSRVLWLRQ,QPHGLDIRUPDWVVXFKDVDVWDQGDUGERRNRU

ILOPWKHDXGLHQFHLVVHWXSDVDUHFHLYHURILQIRUPDWLRQZLWKOLWWOHDELOLW\WRFUHDWHFRQWHQWRUWR

FRPPXQLFDWHZLWKRWKHUXVHUV7KHVHPHGLDDUHOHVVLQWHUDFWLYHWKHQEHFDXVHWKHXVHULVJLYHQ

IHZZD\VWRDFWZLWKRWKHUXVHUV,QFRQWUDVWPHGLDEHFRPHPRUHLQWHUDFWLYHZKHQWKHUHLVDQ

H[SHFWDWLRQRI DQGUHVSRQVHWR XVHUSDUWLFLSDWLRQ,QWKLVVHQVHDQHPDLOWKUHDGLVDIDLUO\

LQWHUDFWLYHPHGLXPLQWKDWWKHXVHUFDQEHVHHQDVERWKVHQGHUDQGUHFHLYHURILQIRUPDWLRQ7KH

PRUHWKHXVHUSDUWLFLSDWHVZLWKRWKHUQRGHV SHRSOHPHGLDDOJRULWKPVHWF LQWKHQHWZRUNWKH

JUHDWHUWKHLQWHUDFWLYLW\YLDPXOWLGLUHFWLRQDOLW\7KHHIIHFWVRILQWHUDFWLYLW\LQPRWLRQGHVLJQ

KRZHYHUKDYHOLWWOHWRGRZLWKPXOWLGLUHFWLRQDOLW\0XFKOLNHWKHLQWHUDFWLRQRIWXUQLQJWKHSDJH

RIDERRNPRVWLQWHUDFWLRQVFKDUDFWHUL]HGE\PRWLRQDOORZIRUDGHHSHUORFDOUHODWLRQVKLS

EHWZHHQXVHUDQGLQWHUIDFHEXWDPRXQWWRIHZFRQQHFWLRQVWRDZLGHUQHWZRUNRIXVHUV

7KHPRGHRIPDQLSXODELOLW\UHODWHVWRWKHSRWHQWLDOIRUWKHXVHUWRFXVWRPL]HDQGDGGWR

WKHLQWHUIDFHWKHPRUHRSWLRQVIRUFXVWRPL]DWLRQWKHJUHDWHUWKHPDQLSXODELOLW\:LWKLQWKLV

PRGHDSUHSDFNDJHGLQWHUIDFHGHVLJQZRXOGEHVHHQDVWKHOHDVWLQWHUDFWLYHZKLOHVXSHUILFLDO

FXVWRPL]DWLRQRSWLRQVVXFKDVFKDQJHVLQFRORUDQGW\SHIDFHZRXOGEHFODVVLILHGDVVOLJKWO\PRUH

LQWHUDFWLYH7KHPRVWLQWHUDFWLYHGHVLJQVLQWKLVPRGHDUHGHVLJQVZKHUHWKHXVHUKDV³WKHDELOLW\


WRFUHDWHDQGDGGFRQWHQW´ S VXFKDVXSORDGLQJDQGHGLWLQJDYLGHRRQ<RX7XEHRUHYHQ

WKHDELOLW\WRHGLWFRQWHQWRQ:LNLSHGLD

,QPDQ\FRQWHPSRUDU\LQWHUIDFHVIRUODSWRSVSKRQHVDQGWDEOHWVPRWLRQLVD

PDQLSXODEOHTXDOLW\RIWKHLQWHUIDFH%RWK:LQGRZVDQGL26SURYLGHHDVLO\DFFHVVLEOHWRJJOHV

WRVZLWFKDOOLQWHUIDFHDQLPDWLRQVRIIDQGRQ7KH$SSOH:DWFKRIIHUVDQRSWLRQIRUUHGXFLQJ

PRWLRQWKDWFRQYHUWVPRYHPHQWWUDQVLWLRQVWRIDGHWUDQVLWLRQVDQGVDYY\$QGURLGXVHUVFDQ

FKRRVHEHWZHHQIDVWHUDQLPDWLRQVSHHGVVORZHUDQLPDWLRQVSHHGVRUUHPRYLQJWKHDQLPDWLRQ

DOWRJHWKHU7KRXJKWKHPRWLRQLVHGLWDEOHKRZHYHUWKHVHRSWLRQVVWLOODPRXQWWROLWWOHSRWHQWLDO

IRULQWHUDFWLYLW\0RWLRQGRHVQRWDOORZXVHUVWRFUHDWHRUDGGQHZFRQWHQWEXWWRFXVWRPL]H

H[LVWLQJFRQWHQWLQWKHVDPHPLQRUZD\DVFXVWRPL]LQJWKHFRORURUW\SHIDFHRIDQH[LVWLQJ

OD\RXW,QVXPQHLWKHUPXOWLGLUHFWLRQDOLW\QRUPDQLSXODELOLW\RIIHUSDUWLFXODUO\KHOSIXOGLUHFWLRQV

IRUGLVFXVVLQJWKHUKHWRULFDOLQWHUDFWLYLW\RIPRWLRQ

&DUQHJLH¶VWKLUGPRGHRILQWHUDFWLYLW\SUHVHQFHUHIHUVWRZD\PHGLDFUHDWHV³DQ

H[SHULHQFHRILQWHUDFWLQJVRFLDOO\DQGRIEHLQJLQDSDUWLFXODUSODFHRUVSDFH´ S 8VHUVIHHO

SUHVHQWWRWKHH[WHQWWKDWWKH\FDQSHUFHLYHLQWHUSUHWDQGDFWRQWKHVHQVRU\FXHVRIDQLQWHUIDFH

7KHPRVWSRWHQWDQGHDVLO\UHFRJQL]DEOHH[DPSOHVRISUHVHQFHDUHIRXQGLQFRQWHPSRUDU\JDPH

GHVLJQVSHFLILFDOO\LQWKHFDVHRIUROHSOD\LQJJDPHV 53*V 'HVLJQHUVRIVXFKJDPHVRIWHQ

LQFOXGHFRXQWOHVVVHQVRU\FXHVWRFUHDWHDQLPPHUVLYHJDPHHQYLURQPHQWIURPPLQRU

DUFKLWHFWXUDOIHDWXUHVWRWKHULVLQJDQGVHWWLQJRIDYLUWXDOVXQ7KHDXGLRRIJDPHVFDQEHMXVWDV

GHWDLOHGDVVLJQLQJLQGLYLGXDOVRXQGVWRHDFKFKDUDFWHUPRYHPHQWDQGLQWHUDFWLRQZLWKREMHFWVLQ

WKHJDPHZRUOG

3HUKDSVXQVXUSULVLQJO\WKHPRWLRQRIREMHFWVLQJDPHZRUOGVRIWHQFRQWULEXWHVWKHXVHU¶V

VHQVHRISUHVHQFH7KLVLQFOXGHVWKHPRWLRQRIWKHSOD\HU¶VDYDWDUWKHPRYHPHQWRIRWKHU


FKDUDFWHUVDQGHYHQWKHDPELHQWPRYHPHQWRIWKHVFHQHU\7KHTXDOLW\RIPRYHPHQWLVVR

LPSRUWDQWWRVRPHJDPHVWKDWFRPSDQLHVDWWHPSWWRGHVFULEHLWLQWKHLUPDUNHWLQJPDWHULDOV)RU

H[DPSOHWKHIROORZLQJH[FHUSWIURPWKHPDUNHWLQJPDWHULDOVIRUWKHIRRWEDOOYLGHRJDPH0DGGHQ

DWWHPSWWRGHVFULEHPRYHPHQWVW\OHFUHDWHGE\WKHLU7UXH6WHSDOJRULWKP

7UXH6WHSLVWKHDOOQHZVWHSEDVHGORFRPRWLRQV\VWHPZKLFKFDOFXODWHVWKHVWHSVEDOO

FDUULHUVWDNHRQWKHILHOG7KHROGVFKRROUXQQLQJF\FOHKDVEHHQUHSODFHGE\DV\VWHP

FRQVWDQWO\HYDOXDWHVZHLJKWPRPHQWXPDQGGHVLUHGGLUHFWLRQZLWK[WKHSUHFLVLRQ7KLV

DOORZVVWHSVWREHVHOHFWHGIURPKXQGUHGVRIQHZUXQQLQJDQLPDWLRQVRQWKHIO\7KLV

FUHDWHVDQLQQRYDWLYHQHZORFRPRWLRQV\VWHPWKDWUHSOLFDWHVGHFLVLRQV1)/SOD\HUVPDNH

RQWKHILHOG 0DGGHQ1)/7UXH6WHS/RFRPRWLRQ2YHUYLHZSDUD 

 7KLVWHFKQLFDOGHVFULSWLRQRIPRYHPHQWDOORZV($6SRUWVWKHFRPSDQ\EHKLQGWKH

0DGGHQIUDQFKLVHWRDUJXHWKDWSOD\HUVVKRXOGSXUFKDVHWKHODWHVWYHUVLRQRIWKHJDPHLIWKH\DUH

ORRNLQJIRUDQDXWKHQWLFJDPHH[SHULHQFHHYHQLIWKHSOD\HUVFRQWUROVDQGWHDPVUHPDLQODUJHO\

WKHVDPH

7KRXJKVRPHPD\GLVPLVVVXFKGHWDLOVDVWKHEOLQGSXUVXLWRIUHDOLVPIRUUHDOLVP¶VVDNH

DJUHDWHUVHQVHRISUHVHQFHLPSOLFLWO\SURYLGHVWKHSOD\HUZLWKDVHWRIH[SHFWDWLRQVDERXWWKH

JDPHHQYLURQPHQWZKDWH[LVWVZKDWDFWLRQVFDQEHWDNHQDQGWKHSRWHQWLDOHIIHFWVRIWKRVH

DFWLRQV7KHIDFWWKDWWKH7UXH6WHSV\VWHP³FRQVWDQWO\HYDOXDWHVZHLJKWPRPHQWXPDQGGHVLUHG

GLUHFWLRQZLWK[SUHFLVLRQ´QRWRQO\PHDQVWKDWWKHPRWLRQZLOOEHDHVWKHWLFDOO\SOHDVLQJEXW

WKDWWKHSOD\HUFDQH[SHFWWKDWWKHLQSXWRIWKHLUFRQWUROVZLOOEHPRUHDFFXUDWHO\SRUWUD\HGE\WKH

SOD\HUVLQWKHJDPH7KHSXUSRUWHGUHDOLVPRIWKHVHPRYHPHQWVDFWXDOO\PDWWHUVOHVVWKDQ



7KLVLVQRWWRVD\WKDWWKHPRWLRQFUHDWHGE\WKLVV\VWHPLVDPRUHDFFXUDWHGHSLFWLRQRIDQDFWXDOSOD\HU¶VPRYHPHQW
LQDIRRWEDOOJDPHEXWLQVWHDGWKDWWKHV\VWHPFDQGLIIHUHQWLDWHEHWZHHQDSOD\HU¶VLQSXWZLWKJUHDWHUJUDQXODULW\


ZKHWKHUWKHPRYHPHQWVVHWFOHDUDQGUHDVRQDEOHH[SHFWDWLRQVIRUWKHSOD\HUDOORZLQJWKHPWR

DQVZHUTXHVWLRQVVXFKDVLVP\ZLGHUHFHLYHUDFFHOHUDWLQJIDVWHUWKDQWKHGHIHQVLYHEDFN"'RHV

P\UXQQLQJEDFNKDYHHQRXJKPRPHQWXPWRNQRFNRYHUWKHRQFRPLQJWDFNOHU"'RHVP\

TXDUWHUEDFNKDYHHQRXJKVSDFHWRUXQIRUDILUVWGRZQ"7KHPRUHWLPHWKDWDSOD\HUVSHQGV

SOD\LQJ0DGGHQWKHPRUHWKH\ZLOOLPSOLFLWO\OHDUQWRLQWHUSUHWWKHPRWLRQVW\OHRIWKHJDPHLQ

RUGHUWRDQVZHUWKHVHTXHVWLRQV

$VWKHVHSUHVHQFHLQJGHWDLOVDFFXPXODWHWKH\FDQOHDGSOD\HUVWRHQWHULQWRVWDWHVRI

LQWHQVHIRFXVRIWHQUHIHUUHGWRDVLPPHUVLRQ &DUQHJLH 'XULQJVWDWHVRILPPHUVLRQ

SOD\HUVDUHSURYLGHGZLWKHQRXJKVHQVRU\GHWDLOVLQWKHJDPHWKDWWKH\FDQDIIRUGWRORVHWUDFNRI

WKHVHQVRU\GHWDLOVRIWKHLULPPHGLDWHSK\VLFDOUHDOLW\ 'RXJODV +DUJDGRQ ,QWXUQ

LPPHUVLRQDOORZVSOD\HUVWRFRQFHQWUDWHRQWKHGLIILFXOWFKDOOHQJHVDQGVXEWOHQDUUDWLYHVWKDW

PDNHYLGHRJDPHVVXFKDSRZHUIXOPHGLXPLQVWHDGRIRQWKHREMHFWVLQWKHLUURRPRUWKHRWKHU

DFWLYLWLHVRIWKHLUGD\$QGGHVSLWHWKHIDFWWKDWLPPHUVLRQLVVRPHWLPHVODEHOHGDVDFXOWXUDOO\

WKUHDWHQLQJGLJLWDOO\VSXUUHGPRUDOFRQXQGUXPLWLVQRWERXQGWRHOHFWURQLFPHGLD+DUJDGRQ¶V

³7KH3OHDVXUHRI,PPHUVLRQDQG(QJDJHPHQW´  FLWHVKRZLPPHUVLRQIXQFWLRQVDVRQHRI

WKHNH\SOHDVXUHVRIUHDGLQJDJUHDWQRYHORUZDWFKLQJDJUHDWILOPLQERWKFDVHVWKHFUHDWRUXVHV

GHVFULSWLYHVHQVRU\GHWDLOVWRGHYHORSDYLUWXDOZRUOGWKDWLVZRUWKHQJDJLQJZLWK

7KHYDOXHRISUHVHQFHWRDUKHWRULFDOXQGHUVWDQGLQJRIPRWLRQGHVLJQLVWKDWQRWDOO

VLWXDWLRQVUHTXLUHWKHVDPHDSSURDFKWRSUHVHQFH,QVRPHFDVHVWKHJRDOVIRUXVHUH[SHULHQFHFDOO

IRUWKHXVHUWREHLPPHUVHGLQDQLQWHUIDFHZKLOHLQRWKHUFDVHVWKHJRDORILPPHUVLRQFDQOHDGWR

RYHUO\GHWDLOHGGHVLJQVRYHUZKHOPLQJWKHXVHUZLWKXQQHFHVVDU\YLVXDOLQIRUPDWLRQ7KHVH



6HHVSHFLDOO\6KHUUL7XUNOH¶VFULWLTXHVRIWHFKQRORJ\LQIOXHQWLDO7RJHWKHU$ORQH


UKHWRULFDOTXDOLWLHVRISUHVHQFHDUHEHDXWLIXOO\LOOXVWUDWHGE\WKHGLIIHUHQFHEHWZHHQWZR

FRPSHWLQJLQWHUIDFHGHVLJQWUHQGVRIWKHODWHVDQGHDUO\VVNHXRPRUSKLFGHVLJQDQG

IODWGHVLJQ,QVNHXRPRUSKLFGHVLJQLQWHUIDFHREMHFWVDUHPHDQWWRPLPLFWKHH[DFWIRUPRID

SK\VLFDOREMHFWZHPLJKWHQFRXQWHULQWKHZRUOG7KHVW\OHZDVSRSXODUL]HGLQWKHLQWHUIDFH

GHVLJQVRIWKHHDUO\L3KRQHZKHUHWKHDSSOLFDWLRQ³&RQWDFWV´DSSHDUHGLQWKHIRUPRIDOHDWKHU

ERXQGQRWHERRNDQGJUHHQIHOWWH[WXUHRIWKH³*DPH&HQWHU´DSSOLFDWLRQZDVGHVLJQHGWRORRN

OLNHDELOOLDUGVWDEOH7KHEXLOWLQPRWLRQVRIWKHLQWHUIDFHIROORZHGDVLPLODUGHVLJQORJLF

5HDGLQJDERRNUHTXLUHGIOLSSLQJYLUWXDOSDJHV:KHQIODJJLQJDQRWHDVLPSRUWDQWLWZRXOGEH

VZLIWO\FLUFOHGLQUHGSHQ3URSRQHQWVRIWKLVGHVLJQSKLORVRSK\KDYHDUJXHGWKDWWKHUHDOLVPRI

WKHVHGHVLJQHOHPHQWVKHOSVWKHXVHUWRXQGHUVWDQGWKHLUIXQFWLRQMXVWDVWKHPHWDSKRULFDO

GHVNWRSDQGIROGHUVKDYHKHOSHGXVHUVQDYLJDWHLQWHUIDFHVIRUGHFDGHV +DOO 

7KHSRSXODULW\RIVNHXRPRUSKLFLQWHUIDFHGHVLJQEHJDQWRIDGHLQWKHHDUO\V

FRLQFLGLQJZLWK0LFURVRIW¶VODXQFKRI:LQGRZV,QFRQWUDVWWRWKHLQWHUIDFHRI$SSOH¶VL3KRQH

WKHYLVXDOFRPSRQHQWVRI:LQGRZVUHOLHGSULPDULO\RQDJHRPHWULFDUUDQJHPHQWRIVLPSOH

VTXDUHV(DFKVTXDUHZDVDVVLJQHGDVLQJOHDUELWUDU\FRORUIRUUHFRJQLWLRQZLWKQREHYHOV

JUDGLHQWVRUDQ\VLJQVWKDWWKHVHVTXDUHVUHSUHVHQWHGUHDOREMHFWV7KRXJK:LQGRZVVXIIHUHG

IURPDEHY\RISUREOHPVZLWKXVDELOLW\ 9LOOLQJHU WKHUDGLFDOGHSDUWXUHIURP$SSOH¶V

GHVLJQSKLORVRSK\RSHQHGVSDFHIRUZHEGHVLJQHUVDQGWHFKEORJJHUVWRGHQRXQFHVNHXRPRUSKLF

GHVLJQDV³DOXGLFURXVIRUFHGPHWDSKRU´WKDW³FDQRIWHQEHDOD]\VROXWLRQ´ -XGDKSDUD

 ,QDPDWWHURIPRQWKVWKHDQWDJRQLVPWRZDUGVNHXRPRUSKLFGHVLJQFDPHWREHWKHGRPLQDQW

YLHZRIWKHGHVLJQFRPPXQLW\DQGLQ$SSOH³IODWWHQHGRXW´WKHLUPRELOHLQWHUIDFH



2IFRXUVHUHFDOOLQJWKHOHVVRQRI6HOIHDQG6HOIH¶V  ³7KH3ROLWLFVRIWKH,QWHUIDFH´VRPHXVHUVZHUH³KHOSHG´
E\WKHGHVNWRSPHWDSKRUPRUHWKDQRWKHUV


UHPRYLQJPDQ\RIWKHFKDUDFWHULVWLFVWKDWKDGGHILQHGWKHL3KRQHWRWKDWSRLQW$WWKHWLPHRIWKLV

VKLIWPDQ\SXEOLFDWLRQVKHUDOGHGWKH³GHDWK´RIVNHXRPRUSKLVPDVLIWKHFRQFHSWRIUHDOLVP

LWVHOIKDGEHHQYDQTXLVKHGLQWKHQDPHRIDJORULRXVIXWXUHRIJHRPHWULFDEVWUDFWLRQ (YDQV

  :RUVWDOO 

 6XPPDULHVRIWKLVVKLIWRIWHQFODLPWKDWVNHXRPRUSKLVP³GLHG´EHFDXVHZHEHFDPHPRUH

IDPLOLDUZLWKPRELOHLQWHUIDFHVIUDPLQJVNHXRPRUSKLVPDVDW\SHRIWUDLQLQJZKHHOVIRUQHZ

XVHUV2WKHUVFODLPWKDWVNHXRPRUSKLFGHVLJQKDVDOZD\VDPRXQWHGWRXQQHFHVVDU\YLVXDOFOXWWHU

EXLOWWRFUHDWHDQH[FLWLQJGHPRUDWKHUWKDQDFRKHVLYHXVHUH[SHULHQFH%XW,ZRXOGDUJXHWKDW

VNHXRPRUSKLFGHVLJQIHOORXWRIIDYRUQRWEHFDXVHVNHXRPRUSKLVPLVQDWXUDOO\UXGLPHQWDU\RU

XQQHFHVVDU\EXWEHFDXVHLWLPSOLHGWKDWXVHUVVKRXOGHQJDJHZLWKDGHHSHUVHQVHRISUHVHQFH

WKDQZDVQHFHVVDU\IRUWKHPDMRULW\RIXVHFDVHV:KHQXVHUVRSHQDFDOHQGDUDSSOLFDWLRQWR

FKHFNDQDSSRLQWPHQWWKHIDX[OHDWKHUELQGLQJLQYLWHVWKHXVHUWRHQJDJHZLWKWKH³ZRUOG´RIWKH

FDOHQGDUWRLPDJLQHWKDWWKHFDOHQGDULVUHODWLYHO\H[SHQVLYH DOHDWKHUERXQGFDOHQGDULVXVXDOO\

SULFLHUWKDQWKHQRUPDOFDOHQGDU DQGWKDWLWLVIULHQGO\DVWKHIDX[DSSHDUDQFHLVOHVVIRUPDOWKDQ

DUHDOOHDWKHUFDOHQGDU1RWLFLQJWKHVHDWWULEXWHV²PHQWDOO\HQJDJLQJZLWKWKLVRWKHUZRUOG²

WDNHVIDUWRRPXFKWLPHLIWKHXVHULVPHUHO\HQWHULQJRUFKHFNLQJDQDSSRLQWPHQW7KHUHVXOWLV

GLVWUDFWLRQQRWEHFDXVHWKHVNHXRPRUSKLFHOHPHQWVDUHLQKHUHQWO\GLVWUDFWLQJEXWEHFDXVHWKH\

UHTXLUHWRRPXFKRIWKHXVHU¶VDWWHQWLRQIRUWKHJLYHQVLWXDWLRQ

 7KHFDOOVIRUUHDOLVPLQPRWLRQGHVLJQIXQFWLRQDVDQHRVNHXRPRUSKLVPGUDZLQJRQWKH

VDPHORJLFWKDWDQDWWHPSWDW³UHDO´DXWRPDWLFDOO\FUHDWHVDEHWWHUXVHUH[SHULHQFH%XWE\

XQGHUVWDQGLQJPRWLRQGHVLJQLQUHODWLRQWRWKHDXGLHQFH¶VVKLIWLQJQHHGIRUSUHVHQFHZHFDQ

EHWWHUDQVZHUTXHVWLRQVDERXWKRZWRDGMXVWWKDWLPSRVLWLRQRI³UHDO´WRGLIIHUHQWGHVLJQ

VLWXDWLRQVRUHYHQWRGLIIHUHQWDUHDVRIWKHVDPHLQWHUIDFH)RUDQDSSOLFDWLRQIRUWH[WPHVVDJLQJ


IRUH[DPSOHDGHVLJQHUPLJKWFRQVLGHUZKHWKHUDXVHULVZDWFKLQJWKHRSHQDSSOLFDWLRQZDLWLQJ

IRUDQHZWH[WPHVVDJHWRDUULYH,IVRWKHGHVLJQHUPLJKWLQFOXGHPRUHUHDOLVWLFPRYHPHQWRIWKH

PHVVDJHPRYLQJLQWRSODFHSXVKLQJXSDOOWKHSUHYLRXVPHVVDJHV,IWKHXVHULVHQJDJHGZLWK

DQRWKHUDSSOLFDWLRQRUHQJDJHGLQDQRQSKRQHDFWLYLW\DOWRJHWKHUWKHPRYHPHQWPLJKWEH

SURJUDPPHGWRORRNPRUHVOLJKWDVOLWWOHPRUHWKDQDYLVXDOUHPLQGHURIZKLFKPHVVDJHVDUH

QHZDQGZKLFKPHVVDJHVDUHROG+RZORQJVKRXOGWKHPRWLRQODVW"6KRXOGPRWLRQEHLQLWLDWHG

E\WKHXVHU"+RZFORVHO\GRHVWKHPRWLRQQHHGWRUHIHUWRJUDYLW\RUPRPHQWXPRULQHUWLD"

,QYRNLQJWKHFRQFHSWRISUHVHQFHRIIHUVDPHWKRGRIDQVZHULQJWKHVHTXHVWLRQVDFFRUGLQJWRWKH

QHHGVRIWKHDXGLHQFHUDWKHUWKDQE\FODLPLQJWKHDXWKRULW\RIYHULVLPLOLWXGH

$FFHVVLELOLW\

,Q$SSOHPDGHLWVILUVWDWWHPSWWRXSGDWHLWVPRELOHLQWHUIDFHIURPWKH

VNHXRPRUSKLFGHWDLOVRIL26WRWKHWUHQG\IODWVW\OHSRSXODUL]HGE\0LFURVRIWDQG*RRJOHDQG

RQHRIWKHPRVWVLJQLILFDQWYLVXDOFKDQJHVLQWKLVVKLIWZDVWKHXVHRIPRWLRQ7KHQHZO\UHOHDVHG

YHUVLRQL26IHDWXUHGVHPLWUDQVSDUHQWLQWHUIDFHHOHPHQWVWKDWDXVHUZRXOG]RRPLQDQGRXW

RIDQGREMHFWVZRXOGXVHFDUHIXOO\FUDIWHGVOLGHDQLPDWLRQVWRPRYHRQDQGRIIWKHVFUHHQ(YHQ

WKHKRPHVFUHHQPDGHXVHRIPRWLRQZLWKWKHLFRQVKRYHULQJVOLJKWO\DERYHSDUDOOD[ZDOOSDSHU

8QIRUWXQDWHO\LWPDGHSHRSOHVLFNSK\VLFDOO\VLFN8VHUVDURXQGWKHFRXQWU\UHSRUWHG

H[SHULHQFLQJWKHHIIHFWVRIPRWLRQVLFNQHVVLQFOXGLQJLQWHQVHQDXVHDDQGGL]]LQHVV /HH 

7KHJUDYLW\RIWKHVHV\PSWRPVZDVGHVFULEHGPRVWVKDUSO\E\GHYHORSHU-HQQL/HGHUVWDWLQJ

³,W VQRWDSSVWKDWDIIHFWPHEXWDFFHVVLQJWKHP7DSDIROGHUDQGWKHYLHZ]RRPVLQ7DSDQDSS

DQGLW VOLNHIO\LQJWKURXJKWKHLFRQDQGODQGLQJLQWKDWDSS VPLFURZRUOG²DQG, PJHWWLQJ

GL]]\RQWKHMRXUQH\WKHUH,QRZKDYHWRFORVHP\H\HVRUFRYHUWKHVFUHHQGXULQJWUDQVLWLRQV


ZKLFKLVULGLFXORXV´ *UDQHOOSDUD -XVWDVGHVLJQHUVKRSHGWRFORVHWKHFKDSWHURQ

$SSOH¶VLQWHUIDFHGHVLJQZRHV,QVWHDGWKHQHZGHVLJQVPDGHSHRSOHVLFN²SK\VLFDOO\VLFN

7KHILQDOVWHSLQHVWDEOLVKLQJDUKHWRULFDOO\JURXQGHGDSSURDFKWRPRWLRQGHVLJQLVWR

DFNQRZOHGJHWKHUDQJHRISRWHQWLDOERGLO\H[SHULHQFHVWKDWDUHVRRIWHQOHIWRXWRIRXUW\SLFDO

GHILQLWLRQRI³XVHU´0RWLRQGHVLJQQHFHVVDULO\UHTXLUHVDYLVXDOHQJDJHPHQWZLWKQHZPHGLD

EXWYLVLRQDQGFRJQLWLRQFDQFKDQJHZLOGO\IURPXVHUWRXVHU$V$SSOHGLVFRYHUHGZLWKWKHILUVW

UHOHDVHRIL26VRPHXVHUVDUHSUHGLVSRVHGWRFRJQLWLYHO\WUDQVODWHYLVXDOPRWLRQDVWKHLURZQ

PRWLRQFUHDWLQJZKDWPHGLFDOSURIHVVLRQDOVFDOO³YLVXDOYHVWLEXODUFRQIOLFW´ *UDQQHOO

SDUD %RGLO\LVVXHVH[WHQGEH\RQGWKH$SSOHVLWXDWLRQDVZHOO+RZGRZHGHVLJQPRWLRQ

NQRZLQJWKDWVRPHXVHUVZLOOQRWKDYHYLVLRQ"+RZGRZHGHVLJQPRWLRQNQRZLQJWKDW

VRPHXVHUVZRQ¶WEHDEOHWRVHHDWDOO"

7KHVHTXHVWLRQVHPHUJHLQWKHIDFHRIWKHRQJRLQJVFKRODUO\GLVFXVVLRQVRIDFFHVVLELOLW\

LQWHFKQLFDODQGSURIHVVLRQDOZULWLQJSDUWLFXODUO\DVWKRVHGLVFXVVLRQVWDPSHUGRZQWKHURPDQWLF

H[FLWHPHQWRIQHZPRGHVRIFRPPXQLFDWLRQ$V=GHQHFN  DUJXHVLQ³$FFHVVLEOH

3RGFDVWLQJ&ROOHJH6WXGHQWVRQWKH0DUJLQVLQWKH1HZ0HGLD&ODVVURRP´

6WXGHQWVZLWKGLVDELOLWLHVDUHLQGDQJHURIEHLQJHLWKHUH[FOXGHGIURPWKHQHZPHGLD

UHYROXWLRQRUDFFRPPRGDWHGDVDIWHUWKRXJKWVRISHGDJRJLHVWKDWIDLOWRDQWLFLSDWHWKHLU

QHHGV7RRRIWHQRXUH[FLWHPHQWDERXWQHZPHGLDHYHQZKHQWKDWH[FLWHPHQWLV

WHPSHUHGE\VREHUUHIOHFWLRQOHDYHVLQWDFWDVHWRIQRUPDWLYHDVVXPSWLRQVDERXWVWXGHQWV¶

ERGLHVPLQGVDQGDELOLWLHV S 

 7DNLQJWKLVLGHDDVWHSIXUWKHUWKHDXWKRUVRI³0XOWLPRGDOLW\LQ0RWLRQ'LVDELOLW\DQG

.DLURWLF6SDFHV´ <HUJHDXHWDO GHPRQVWUDWHKRZWKHVHQRUPDWLYHDVVXPSWLRQVUHPDLQ




HPEHGGHGLQWKHFRUHORJLFRIPXOWLPRGDOLW\DVWKH³PXOWL´LPDJLQHVWKDWHYHU\XVHUFDQDFFHVV

WKHH[DFWVDPHUDQJHRIVHQVRULDOFDSDELOLWLHV0DNLQJPDWWHUVZRUVHWKHDXWKRUVGHPRQVWUDWH

KRZDWWHPSWVWRUHPHG\WKHVHVHQVRULDOLQHTXDOLWLHVRIWHQWDNHWKHIRUPRI³UHWURILW´VROXWLRQV

ZKHUHE\QRQQRUPDWLYHXVHUVDUHSURYLGHGZLWKVHSDUDWHXQHTXDODFFHVVWRPXOWLPRGDOWH[WV

ORQJDIWHUSXEOLFDWLRQ,QWXUQWKHDXWKRUVDUWLFXODWHDQHWKLFVRILQFOXVLRQLQZKLFK³DFFHVVLV

EXLOWLQWRWHFKQRORJLHVQRWDGGHGRQ´ ³2YHU7KHUH´SDUD 

'HVSLWH$SSOH¶VSXEOLFDFFHVVLELOLW\EOXQGHUZLWKL26DQGWKHLQFUHDVHGVFKRODUO\FDOOV

IRUDFFHVVLEOHLQWHUIDFHVWKHVXEMHFWLVUDUHO\GLVFXVVHGLQJXLGHOLQHVIRUPRWLRQGHVLJQ7KH

DFDGHPLFJXLGHOLQHVSURGXFHGE\&KDQJDQG8QJDU  7KRPDVDQG&DOGHU  DQG

1RYLFNHWDO  GRQRWGLVFXVVWKHWRSLFDWDOO6LPLODUO\ZKLOH0LFURVRIW$SSOHDQG

*RRJOHGRUHIHUHQFHWKHUHODWLRQVKLSEHWZHHQPRWLRQGHVLJQDQGDFFHVVLELOLW\WKH\RIWHQ

GRZQSOD\WKHSRWHQWLDOIRULQDFFHVVLEOHPRWLRQ)RUH[DPSOH$SSOH¶V+XPDQ,QWHUIDFH

*XLGHOLQHVLQFOXGHWKHDGYLFH³0DNHDQLPDWLRQVRSWLRQDO:KHQWKHRSWLRQWRUHGXFHPRWLRQLV

HQDEOHGLQDFFHVVLELOLW\SUHIHUHQFHV\RXUDSSVKRXOGPLQLPL]HRUHOLPLQDWHDSSOLFDWLRQ

DQLPDWLRQV´ SDUD 7KRXJKWKLVDGYLFHLPSOLHVKRZXVHUVPD\UHTXLUHGLIIHUHQWDPRXQWV

RIPRWLRQWKHUHLVQRLQGLFDWLRQRIKRZPRWLRQPLJKWEHGHVLJQHGWRLQFOXGHDZLGHUUDQJHRI

ERGLO\DQGFRJQLWLYHDELOLWLHV6XFKOLPLWHGDGYLFHGLIIHUVIURP$SSOH¶VJXLGHOLQHVIRUWKHXVHRI

FRORUZKLFKLQFOXGHDOHQJWK\GLVFXVVLRQRIKRZWRGHVLJQIRUFRORUEOLQGXVHUV/LNHZLVH

*RRJOH¶V0DWHULDO'HVLJQ*XLGHOLQHVSURYLGHDOPRVWQRPHQWLRQRIWKHSRWHQWLDOIRULQDFFHVVLEOH

PRWLRQ'HVSLWHWKHGHWDLOHGGLVFXVVLRQRQFXVWRPL]LQJPRWLRQIURPDSSOLFDWLRQWRDSSOLFDWLRQ

WKHRQO\PHQWLRQRIGHVLJQLQJDFFHVVLEOHPRWLRQLVEXULHGGHHSZLWKLQDFDWFKDOODFFHVVLELOLW\

VHFWLRQWKDWDWWHPSWVWRFRYHUHYHU\WKLQJIURPVFUHHQUHDGHUVWRDXGLWRU\IHHGEDFN0RUHRYHU

WKHVHFWLRQRQDFFHVVLEOHPRWLRQLQFOXGHVRQO\OLVWVWKHEDVLFULJLGUXOHVIURPWKH:& :RUOG


:LGH:HE&RQVRUWLXP HQDEOHPRWLRQWREHSDXVHGLIODVWLQJPRUHWKDQILYHVHFRQGVOLPLW

IODVKLQJFRQWHQWWRWKUHHWLPHVSHURQHVHFRQGLQWHUYDODQGDYRLGODUJHIODVKLQJUHJLRQVRIWKH

VFUHHQ 0DWHULDO'HVLJQ*XLGHOLQHVH ,QFOXGLQJWKHVHUXOHVLVFHUWDLQO\DJRRGVWHSWRZDUG

GHVLJQLQJDFFHVVLEOHLQWHUIDFHVEXWOLPLWVLQDFFHVVLEOHPRWLRQWRRQO\WKHSRWHQWLDOLQGXFHPHQW

RIVHL]XUHV7KHUHLVQRPHQWLRQRIXVHUVRIGLIIHULQJFRJQLWLYHDELOLWLHVPRWLRQVHQVLWLYLWLHVRU

GLIIHULQJYLVXDOFDSDFLWLHVLQWHUPVRIPRWLRQHYHQWKRXJKWKHVHGLIIHUHQFHVDUHUHIHUHQFHGLQ

UHODWLRQWRFRORUW\SRJUDSK\DQGOD\RXW,QWXUQWKHVHVROXWLRQVFRPHRIIPRUHDVGHIHQVLYH

EXIIHUVWRFULWLTXHUDWKHUWKDQFULWLFDOHQJDJHPHQWZLWKWKHOLPLWDWLRQVRIPRWLRQ,WLV

DFFHVVLELOLW\DVDV\VWHPRIXQWKLQNLQJFKHFNPDUNV

7KHUKHWRULFRIPRWLRQGHVLJQVKRXOGLQFOXGHVWUDWHJLHVIRUKRZWRGHSOR\PRWLRQDVZHOO

DVKRZWRFULWLTXHPRWLRQDVDSRWHQWLDOO\H[FOXVLRQDU\GHVLJQSUDFWLFH,QRUGHUWRPRXQWVXFKD

FULWLTXHZHPXVWLQFOXGHQRQQRUPDWLYHDELOLWLHVLQRXUXQGHUVWDQGLQJRIWKHXVHU7KLVLQFOXGHV

XVHUVZKRDUHEOLQGXVHUVZKRGRQRWKDYHSHUIHFWYLVLRQDQGXVHUVZKRVWUXJJOHZLWKWKH

FRJQLWLRQRIPRWLRQ)RUWKHVHXVHUVRSWLRQVWRUHGXFHRU³WXUQRII´PRWLRQDFWVDVZKDW-D\

'ROPDJHKDVGHVFULEHGDVD³UHWURILW´VROXWLRQDVLW³GRHVQRWQHFHVVDULO\PDNHWKHSURGXFW

IXQFWLRQGRHVQRWQHFHVVDULO\IL[DIDXOW\SURGXFWEXWDFWVDVDVRUWRIFRUUHFWLYHVROXWLRQ´

S (YHQDVD³UHGXFHPRWLRQ´RSWLRQSURYLGHVDFFHVVWRQRQQRUPDWLYHXVHUVLW

VLPXOWDQHRXVO\IUDPHVWKRVHXVHUVDVDSUREOHPWREHVROYHGE\EXLOGLQJDVHSDUDWHXQHTXDO

PRGHRIHQJDJHPHQWIRUWKHLQWHUIDFH

7KHDOWHUQDWLYHWRWKHVHUHWURILWGHVLJQSUDFWLFHVLVWRGHVLJQDFFHVVLEOHPRWLRQIURPWKH

VWDUWDYRLGLQJNQRZQSUREOHPDWLFGHVLJQSDWWHUQVDQGWXUQLQJLQVWHDGWRGHVLJQVZKHUHWKH

XVDELOLW\LVUHLQIRUFHGWKURXJKPXOWLSOHPRGHVVLPXOWDQHRXVO\-XVWDVZLWKKHUGLVFXVVLRQRI

SHUVRQDOLW\+HDGSURYLGHVDQH[FHOOHQWPRGHOIRUGHVLJQLQJDFFHVVLEOHPRWLRQGHYRWLQJD


FKDSWHURIKHUERRNWRZKDWVKHFDOOV³UHVSRQVLEOHDQLPDWLRQ´,QWKHFKDSWHU+HDGGLVFXVVHVWKH

YDOXHRIFXUUHQWJXLGHOLQHVIRUDFFHVVLEOHPRWLRQVXFKDVWKHRSWLRQWRUHGXFHPRWLRQDQGWKH

:&UXOHRIQRPRUHWKDQWKUHHIODVKHVSHUVHFRQGEXWVKHDOVRDUWLFXODWHVWKHIDFWRUVWKDWPRVW

RIWHQWULJJHUYHVWLEXODULVVXHVWKHVL]HRIPRYHPHQWPLVPDWFKHGGLUHFWLRQVRIPRYHPHQWDQG

PRYHPHQWWKDWFRYHUVDORWRIVSDWLDOGLVWDQFH S ,PSRUWDQWO\+HDG¶VVROXWLRQLVQRWWR

GHILQHULJLGERXQGDULHVIRUZKLFKPRYHPHQWVDUHWRRELJRUWRRGLVWDQWEXWLQVWHDGWRHQFRXUDJH

GHVLJQHUVWRHYDOXDWHWKHSRWHQWLDOIRUH[FOXVLRQLQHDFKGHVLJQVLWXDWLRQ+HDGDOVRDUJXHVWKDW

ZHEEURZVHUVDQGPRELOHSODWIRUPVVKRXOGSURYLGHPRUHVRSKLVWLFDWHGRSWLRQVIRUFKRRVLQJ

PRWLRQVHQVLWLYLW\SUHIHUHQFHVWKDWDUHEXLOWLQWRXVHUV¶ILUVWLQWHUDFWLRQVZLWKDQLQWHUIDFH S

 8QSDFNLQJ+HDG¶VORJLFLWLVSRVVLEOHWRLPDJLQHDZHOFRPHVFUHHQWKDWQRWRQO\DVNVIRUD

XVHUQDPHSDVVZRUGDQGSUHIHUUHGODQJXDJHEXWDOVRDPRWLRQVHQVLWLYLW\SUHIHUHQFH

 $WWKHVDPHWLPHDVZHUHFRJQL]H+HDG¶VSURPLVLQJYLVLRQRIDFFHVVLEOHPRWLRQZHPXVW

DFNQRZOHGJHWKDWYLVXDOPRWLRQLVQHFHVVDULO\LQDFFHVVLEOHIRUVRPHXVHUVWKDWWKHUHLVQRPDJLF

VW\OHRIPRYHPHQWWKDWZLOOHOLPLQDWHLQHTXDOLW\LQXVHUH[SHULHQFH%XWDV<HUJHDXHWDO  

GLVFXVVLQWKHSUHIDFHWR³0XOWLPRGDOLW\LQ0RWLRQ´³8QLYHUVDOGHVLJQLVDSURFHVVDPHDQV

UDWKHUWKDQDQHQG«WRVD\WKDWQRWH[WZLOOEHXQLYHUVDOO\DFFHVVLEOHLVQRWDMXVWLILFDWLRQIRU

IDLOLQJWRFRQVLGHUZKDWDXGLHQFHVDUHLQYLWHGLQWRDQGLPDJLQHGDVSDUWRIDWH[W,WPDWWHUVZKR

UHDGVLWPDWWHUVZKRHQJDJHVDQGLWPDWWHUVZKRLVFRQFHSWXDOL]HGDVDUHDGHU´ ³/DQGLQJ

3DJH´SDUD $FFHVVLEOHPRWLRQVKRXOGEHVLPLODUO\XQGHUVWRRGDVDSURFHVVDVDZD\

RIFRQVWDQWO\UHWXUQLQJWRWKHLQVXIILFLHQF\RIWKHWHUP³XVHU´DQGRIGHVLJQLQJPRWLRQZLWKD

UDQJHRISRWHQWLDOXVHUVLQPLQG




&RQFOXVLRQ

7KHIRXUFRQFHSWV,¶YHRXWOLQHGKHUHDUHQRWQHZJURXQGIRUWHFKQLFDODQGSURIHVVLRQDO

FRPPXQLFDWLRQDQGZLWKWKHH[FHSWLRQRIDFFHVVLELOLW\WKH\DUHDOVRWDQJHQWLDOO\PHQWLRQHGLQ

PRWLRQGHVLJQJXLGHOLQHV+RZHYHUDV,¶YHVKRZQLQWKHSUHYLRXVWZRFKDSWHUVWKHVHDVSHFWVRI

PRWLRQGHVLJQW\SLFDOO\OLYHLQWKHPDUJLQVRIGHVLJQJXLGHOLQHVZKLOHDUJXPHQWVIRUUHDOLVWLF

QDWXUDOPRYHPHQWWDNHFHQWHUVWDJH)RUHJURXQGLQJUKHWRULFDOFRQFHSWVRISHUVRQDOLW\

FKRUHRJUDSK\SUHVHQFHDQGDFFHVVLELOLW\DQGUHVLVWLQJWKHWHUPLQRORJ\RIDEVWUDFWUHDOLVP

VWUHQJWKHQVRXUXQGHUVWDQGLQJRIPXOWLPRGDOLW\KHOSLQJXVWRDUWLFXODWHWKHYDOXHRIPRWLRQLQ

VFKRODUO\PXOWLPHGLDDQGFRPPXQLW\HQJDJHPHQWZRUN7KHVHFRQFHSWVDOVRRIIHUODQJXDJHIRU

UKHWRULFDOO\JURXQGHGFULWLTXH0RWLRQFDQEHIODVK\DQGGLVWUDFWLQJEXWLWLVQRWIODVK\DQG

GLVWUDFWLQJVLPSO\EHFDXVHLWLVPRWLRQ,WLVIODVK\DQGGLVWUDFWLQJEHFDXVHWKHGHVLJQWDNHVDQ

LQVXIILFLHQWDFFRXQWRIWKHVLWXDWLRQDWKDQG$VWKHXVHRIPRWLRQFRQWLQXHVWRLQIOXHQFH

WUDGLWLRQDOO\³VWDWLF´JHQUHVLQWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQLWZLOOEHDOOWKHPRUH

QHFHVVDU\WRGUDZRQUKHWRULFDOO\JURXQGHGODQJXDJHRISUDLVHDQGFULWLTXH


&+$37(53('$*2*,&$/675$7(*,(6)25027,21'(6,*1,1

352)(66,21$/$1'7(&+1,&$/&20081,&$7,21 
,QWURGXFWLRQ

$V,GLVFXVVLQWKHILUVWFKDSWHURIWKLVGLVVHUWDWLRQWKHODFNRIDWWHQWLRQWRPRWLRQGHVLJQ

LQSURIHVVLRQDODQGWHFKQLFDOFRPPXQLFDWLRQOHDGVWRERWKDQDO\WLFDOSUREOHPV YLDDUKHWRULFDO

FODLPVRIUHDOLVPDQGGLVWUDFWLRQ DQGSHGDJRJLFDOSUREOHPV YLDSXEOLVKHGDFFRXQWVRI

LQVWUXFWRUVVWUXJJOLQJWRWHDFKDQLPDWLRQSURMHFWVLQWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQ 

,QPDQ\UHVSHFWVWKHFRQFHSWVRISHUVRQDOLW\FKRUHRJUDSK\SUHVHQFHDQGDFFHVVLELOLW\UHVSRQG

WRERWKSUREOHPVVLPXOWDQHRXVO\3HUVRQDOLW\$IIHFWIRUH[DPSOHLVIOH[LEOHHQRXJKWRGHVFULEH

WKHDIIHFWLYHSRWHQWLDORIPRWLRQDQGWKHQRWLRQRISHUVRQDOLW\LVFRPPRQHQRXJKWRZRUNDVDQ

DFFHVVLEOHPHWDSKRUIRUVWXGHQWVZKRDUHQHZWRZRUNLQJZLWKPRWLRQ+RZHYHULQVWUXFWRU

DFFRXQWVDOVRLQGLFDWHWKDWHQJDJLQJZLWKPRWLRQSHGDJRJLFDOO\UHTXLUHVPRUHWKDQMXVWDVKLIWLQ

WHUPLQRORJ\)RON  GHVFULEHVKRZLWPD\WDNHVWXGHQWVPRUHWLPHWREHFRPHIDPLOLDUZLWK

DQLPDWLRQVRIWZDUHWKDQZLWKRWKHUGHVLJQSURJUDPVDQG0RJXOO  UHSRUWVWKDWHQWU\OHYHO

DQLPDWLRQVRIWZDUHPD\EHWRRUHVWULFWLYHDQGWHPSODWHGULYHQWRDOORZVWXGHQWVWRDGDSWWKHLU

GHVLJQFKRLFHVIURPVLWXDWLRQWRVLWXDWLRQ S 0RUHRYHUJLYHQWKHODUJHO\QHJDWLYHOHJDF\

RI)ODVKDQLPDWLRQPDQ\LQVWUXFWRUVPD\EHULJKWO\KHVLWDQWWRLQFRUSRUDWHDQLPDWLRQPRWLRQDV

DQH[SOLFLWFRPSRQHQWRIPXOWLPRGDOLW\WHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQ:LWKWKHVH

LVVXHVLQPLQG,ILQGLWQHFHVVDU\WRFRQVLGHUWKHSUDFWLFDOGD\WRGD\REVWDFOHVIRUDSSURDFKLQJ

PRWLRQGHVLJQIURPDSHGDJRJLFDOSHUVSHFWLYH

7RWKLVHQGLQWKLVFKDSWHU,GLVFXVVSHGDJRJLFDOSUDFWLFHVWKDWKDYHEHHQXVHIXOIRU

ZRUNLQJRQPRWLRQGHVLJQSURMHFWVLQP\RZQFODVVURRPV'UDZLQJIURPUHSHDWHGDWWHPSWVWR

WHDFKPRWLRQGHVLJQSURMHFWV,GHVFULEHWKHSHGDJRJLFDOKXUGOHVIRULQFRUSRUDWLQJDQLPDWLRQDVD


IDFHWRIPXOWLPHGLDSURGXFWLRQLQFOXGLQJWKRVHWKDWH[WHQGEH\RQGRXUYRFDEXODULHVIRUYLVXDO

GHVFULSWLRQDQGDQDO\VLV,QRUGHUWRFRXQWHUWKHVHLVVXHV,RIIHUWKUHHSHGDJRJLFDOSUDFWLFHVIRU

FRQQHFWLQJPRWLRQGHVLJQWRPXOWLPRGDOSURMHFWVWKDWDUHDVVLJQHGLQWHFKQLFDODQGSURIHVVLRQDO

FRPPXQLFDWLRQGLVVXDGLQJVWXGHQWVIURPVWDUWLQJZLWKIXOOFKDUDFWHUDQLPDWLRQVFDIIROGLQJ

FKRUHRJUDSK\DVDQH[WHQVLRQRIYLVXDOKLHUDUFK\DQGSUHSDULQJVWXGHQWVIRUWKHFKDOOHQJHVRI

VWRU\ERDUGLQJZLWKPRWLRQ,FORVHWKLVFKDSWHUE\UHLWHUDWLQJWKHLPSRUWDQFHRIPRWLRQGHVLJQDV

DFRPSRQHQWRIYLVXDOUKHWRULFLQWKHVWFHQWXU\DQGSRLQWWRDUHDVIRUIXUWKHUUHVHDUFK

3HGDJRJLFDO&RQWH[W

 7KHSHGDJRJLFDOVWUDWHJLHV,GLVFXVVLQWKLVFKDSWHUZHUHLQHYLWDEO\VKDSHGE\P\VSHFLILF

FXUULFXODUGHSDUWPHQWDODQGLQVWLWXWLRQDOFRQWH[WDQG,ILQGLWQHFHVVDU\WRGHVFULEHWKLVFRQWH[W

LQFOXGLQJWKHFRXUVHREMHFWLYHVDQGPDMRUDVVLJQPHQWVEHIRUHODXQFKLQJLQWRWKHWKUHHWHDFKLQJ

VWUDWHJLHV,SURSRVH%\LQFOXGLQJWKLVH[WHQGHGGLVFXVVLRQRIP\FRQWH[W DQGWKHDVVLJQPHQWV

WKDWHPHUJHGIURPWKDWFRQWH[W ,KRSHWKDWP\DFFRXQWDQGP\PDWHULDOVPLJKWEHXVHIXOIRU

RWKHULQVWUXFWRUVZKRPD\ZDQWWRWHDFKPRWLRQJUDSKLFVSURMHFWVLQWKHLUFODVVHV7RWKLVHQG

WKLVVHFWLRQSURYLGHVDQRYHUYLHZRILQVWLWXWLRQDOFXUULFXODUIDFWRUVDQH[SODQDWLRQRIP\

DVVLJQPHQWVDQGDFWLYLWLHVDQGVRPHFDYHDWVDERXWWKHSULYLOHJHRIP\FRQWH[WIRUWHDFKLQJWKHVH

FRXUVHV

0\H[SHULHQFHWHDFKLQJPRWLRQGHVLJQSULQFLSOHVLQDSURIHVVLRQDOZULWLQJFRQWH[W

HPHUJHGLUHFWO\IURPP\WLPHWHDFKLQJ(1*/0XOWLPHGLD:ULWLQJDW3XUGXH8QLYHUVLW\D

ODUJHUHVHDUFKXQLYHUVLW\WKDWDWWUDFWVKLJKDFKLHYLQJVWXGHQWVIURPDURXQGWKHFRXQWU\ 6WXGHQW

(QUROOPHQW 7KHSURMHFWVDFWLYLWLHVDQGOHVVRQVIRUWKHFODVVZHUHGHYHORSHGUHFXUVLYHO\RYHUD

SHULRGRIIRXUFRQVHFXWLYHVHPHVWHUVIURPWKHIDOORIWRWKHVSULQJ(QUROOPHQW


IOXFWXDWHGEHWZHHQWRVWXGHQWVSHUVHPHVWHUDQGDFURVVDOOIRXUVHPHVWHUVDWRWDORI

VWXGHQWVWRRNWKHFODVV5RXJKO\RQHWKLUGRIWKHVWXGHQWVHDFKVHPHVWHUZHUHPDMRULQJ

3URIHVVLRQDO:ULWLQJZKLOHPRVWRWKHUVWXGHQWVWRRNWKHFODVVWRIXOILOODZULWLQJUHTXLUHPHQWIRU

DPDMRULQ&RPSXWHU6FLHQFHDQGRU&RPSXWHU*UDSKLFV7HFKQRORJ\7KRXJKVWXGHQWVFRXOG

KDYHLQIHUUHGIURPWKHFRXUVHWLWOH ³0XOWLPHGLD:ULWLQJ´ WKDWWKHFRXUVHZRXOGIRFXVRQPRUH

WKDQWH[WEDVHGFRPPXQLFDWLRQWKHUHZDVQRLQGLFDWLRQWKDWWKHFRXUVHIRFXVHGRQPRWLRQGHVLJQ

XQWLO,GLVFXVVHGWKLVIRFXVRQWKHILUVWGD\RIFODVV$GGLWLRQDOO\WKRXJKPDQ\VWXGHQWVZHUH

PDMRULQJLQZKDWZHPLJKWODEHODVWHFKQRORJ\KHDY\GLVFLSOLQHV &RPSXWHU*UDSKLFV

7HFKQRORJ\DQG&RPSXWHU6FLHQFH VWXGHQWVUDUHO\VWDUWHGWKHFODVVZLWKDQ\SULRUNQRZOHGJHRI

WKH$GREH&UHDWLYH&ORXG WKHSULPDU\GHVLJQSURJUDPVXVHG ,WDXJKWDOOIRXUVHFWLRQVRIWKH

FODVVLQDFRPSXWHUODEHTXLSSHGZLWKWKHODWHVWYHUVLRQVRIDOOVRIWZDUHSURJUDPVLQWKH$GREH

&UHDWLYH&ORXGWKRXJKWKHFODVVIRFXVHGVSHFLILFDOO\RQ$GREH,OOXVWUDWRU$GREH3UHPLHUH3UR

$GREH$IWHU(IIHFWV$GREH$XGLWLRQDQG$GREH0HGLD(QFRGHU7KHVWXGHQWVDOVRKDGDFFHVV

WRWKHVHSURJUDPVLQHYHU\FRPSXWHUODERQFDPSXV7KLVPDGHLWHDV\IRUVWXGHQWVWRZRUNRQ

DVVLJQPHQWVRXWVLGHRIFODVV

7KHGHVLJQDWHGFRXUVHREMHFWLYHVZHUHTXLWHEURDG IRUV\OODEXVVHH$SSHQGL[$ ZKLFK

KLVWRULFDOO\SURYLGHGLQVWUXFWRUVZLWKWKHIOH[LELOLW\WRDGDSWWKHPDMRUDVVLJQPHQWVWRFXUUHQW

UHVHDUFKDQGHPHUJLQJWHFKQRORJLHVLQPXOWLPRGDOFRPSRVLWLRQ7KLVIOH[LELOLW\SURYLGHGPH

ZLWKWKHFXUULFXODUVSDFHWRGHYHORSH[HUFLVHVDQGDVVLJQPHQWVWKDWIUDPHGPRWLRQDVDVWDQGDUG

GHVLJQFRPSRQHQWUDWKHUWKDQDVDVSHFLDOL]HGIDFWRUDSSOLHGWRDVLQJXODUDVVLJQPHQW6WXGHQWV

FRPSOHWHGIRXUPDMRUSURMHFWVGHVLJQHGWRVKLIWIURPDQDO\VLVWRSURGXFWLRQDQGIURPYLVXDO

UKHWRULFWRDZLGHUDUUD\RIPXOWLPRGDOIDFWRUV)RUWKHILUVWIHZZHHNVRIWKHFODVVVWXGHQWV

OHDUQHGDERXWWKHUKHWRULFDODIIRUGDQFHVRIDUUDQJHPHQWFRORUW\SRJUDSK\DQGPRWLRQZKLOH


ZRUNLQJRQDUKHWRULFDODQDO\VLVRIDPXOWLPRGDODUWLIDFW IRUDVVLJQPHQWVKHHWVHH$SSHQGL[% 

&RQFXUUHQWO\VWXGHQWVZHUHLQWURGXFHGWR$GREH,OOXVWUDWRU$GREH$IWHU(IIHFWVDQG$GREH

0HGLD(QFRGHUDQGZHUHJLYHQORZVWDNHVGHVLJQFKDOOHQJHVDVDFKDQFHWROHDUQWKHFRUH

IXQFWLRQVRIHDFKSURJUDP 6HH$SSHQGL[&' 6RPHRIWKHVHGHVLJQFKDOOHQJHVUHTXLUHGDOO

VWXGHQWVLQWKHFODVVWRSURGXFHWKHVDPHDUWLIDFWE\IROORZLQJDURWHVHWRILQVWUXFWLRQVVXFKDV

FUHDWLQJWKHVDPHSL]]DLFRQRUDQLPDWLQJWKHVDPHOD\RXWRQRIIWKHVFUHHQ7KHVHURWHH[HUFLVHV

ZHUHRIWHQSDLUHGZLWKPRUHH[SORUDWRU\FKDOOHQJHVZKLFKHQFRXUDJHGVWXGHQWVWRH[SORUHWKH

SURJUDPVDQGWDNHHDUO\ULVNVLQWKHLUGHVLJQVXFKDVDQLPDWLQJDTXRWHRIWKHLUFKRLFHRQVFUHHQ

7KHVHORZVWDNHVFKDOOHQJHVDOORZHGVWXGHQWVWREXLOGEDVLFFRPSHWHQFLHVIRUHDFKSURJUDP

EHIRUHDSSO\LQJWKHLUNQRZOHGJHWRDFRPSOH[GHVLJQVFHQDULR

$IWHUHVWDEOLVKLQJEDVLFDQDO\WLFDODQGWHFKQLFDOFRPSHWHQFLHVGXULQJWKHVHILUVWIHZ

ZHHNVWKHFODVVVKLIWHGWRWZRPDMRUFDVHVWXGLHVIRFXVHGRQSURGXFLQJUKHWRULFDOO\JURXQGHG

PXOWLPHGLDPDWHULDOV7KHILUVWFDVHVWXG\UHTXLUHGVWXGHQWVWRSURGXFHVKRUW PLQXWH 

SURPRWLRQDOYLGHRVIRUDORFDORUJDQL]DWLRQWKDWVWXGHQWVGHHPHGWRVWUXJJOHZLWKVRFLDOPHGLD

$SSHQGL[( )RUWKHVHFRQGFDVHVWXG\VWXGHQWVFUHDWHGVLPLODUO\VKRUW PLQXWH YLGHRV

WRUDLVHDZDUHQHVVIRUDSXEOLFKHDOWKLVVXHLQWKHVWDWHDFWLQJDVLIWKH\ZHUHVRFLDOPHGLDLQWHUQV

IRUWKH,QGLDQD6WDWH'HSDUWPHQWRI+HDOWK $SSHQGL[) (YHQWKRXJKERWKFDVHVWXGLHVUHTXLUHG

VWXGHQWVWRSURGXFHPRWLRQJUDSKLFVFODVVUHDGLQJVDQGGLVFXVVLRQVGXULQJWKLVPLGGOHSRUWLRQRI

WKHFODVVIRFXVHGRQUKHWRULFDOGHOLYHU\FLUFXODWLRQ IRUWKHSURPRWLRQDOYLGHR DQGWKHUKHWRULFRI

GDWDYLVXDOL]DWLRQ IRUWKHSXEOLFKHDOWKYLGHR 7KLVWXUQWRSURGXFWLRQZDVPHDQWWRHPSKDVL]H



,QRUGHUWRIXUWKHUHDVHVWXGHQWV¶DQ[LHWLHVIRUZRUNLQJZLWKSURIHVVLRQDOSURJUDPVWKLVILUVWFDVHZDVVWUXFWXUHG
DVDJURXSSURMHFW,VHOHFWHGWKHJURXSVP\VHOISDLULQJVWURQJHUGHVLJQHUVZULWHUVDQGFRPPXQLFDWRUVZLWKZHDNHU
GHVLJQHUVZULWHUVDQGFRPPXQLFDWRUV



KRZSDUWLFXODUPRYHPHQWVFKRUHRJUDSKLHVDUHRQO\HIIHFWLYHIRUFHUWDLQDXGLHQFHVLQVSHFLILF

VLWXDWLRQV

)RUWKHILQDOIRXUWRILYHZHHNVRIWKHFODVVVWXGHQWVZHUHDVNHGWRDSSO\WKHVNLOOVWKH\

KDGGHYHORSHGWRDUKHWRULFDOVLWXDWLRQRIWKHLUFKRLFH $SSHQGL[* 7KRXJK,VXJJHVWHGWKUHH

SRWHQWLDOGLUHFWLRQVIRUWKHVHLQGHSHQGHQWILQDOSURMHFWVVWXGHQWVRIWHQXVHGWKLVRSSRUWXQLW\WR

FUHDWHGHHSO\SHUVRQDOYLGHRVRUWRLPSURYHWKHJUDSKLFVRIORFDORUJDQL]DWLRQV)RUDOO

SURGXFWLRQIRFXVHGSURMHFWVLQFOXGLQJERWKFDVHVWXGLHVDQGWKHILQDOLQGHSHQGHQWSURMHFW

VWXGHQWVZURWHH[WHQVLYHGHVLJQUDWLRQDOHVDQGUHIOHFWLRQVRQWKHLUZRUN $SSHQGL[+ 7KHVH

GRFXPHQWVZHUHXVHGWRHQVXUHWKDWVWXGHQWVFRXOGDUWLFXODWHWKHORJLFEHKLQGWKHLUGHVLJQ

GHFLVLRQVLQFOXGLQJWKHLUXVHRIPRWLRQ7KHIRFXVRQYLGHRSURGXFWLRQDQGH[SODQDWRU\

JUDSKLFVPDGHIRUDORJLFDOLQFOXVLRQRIPRWLRQGHVLJQSULQFLSOHVDVPDQ\JHQUHVRIRQOLQHYLGHR

LQFOXGHPRWLRQJUDSKLFV

 ,WLVFULWLFDOWRQRWHWKDWPDQ\RIWKHLQVWLWXWLRQDODQGGHSDUWPHQWDOIHDWXUHVWKDWVKDSHG

WKLVFODVVDUHQRWWUDQVIHUDEOHWRRWKHUSURJUDPVDQGXQLYHUVLWLHV)RURQHZKLOHVWXGHQWVPD\QRW

KDYHSUHYLRXVO\XVHGWKH$GREHSURJUDPVWKDWZHZRUNHGZLWKVHYHUDOKDGH[SHULHQFHZLWK

RWKHUSURJUDPVLQWKH$GREHVXLWHDQGVRPHKDGDOUHDG\PDVWHUHGGLVFLSOLQHVSHFLILFGHVLJQ

VRIWZDUHIRUWKHLUPDMRU/HDUQLQJQHZVRIWZDUHLVQHYHUHDV\VWXGHQWVGLGVWUXJJOHEXW,DOVR

VXVSHFWWKDWVWXGHQWVOLNHO\HQWHUHGWKHFODVVZLWKJUHDWHUFRQILGHQFHLQWKHLUWHFKQLFDODELOLWLHV

WKDQWKHDYHUDJHVWXGHQWDWWKHXQLYHUVLW\7KHFODVVDOVREHQHILWHGIURPLWVUROHZLWKLQWKH

SURIHVVLRQDOZULWLQJFXUULFXOXPDVWKHSURJUDPLQFOXGHGDFODVVRQGRFXPHQWGHVLJQLQDGGLWLRQ

WRWKHFODVVRQPXOWLPHGLDZULWLQJ+DYLQJWZRGHVLJQIRFXVHGZULWLQJFODVVHVLVH[WUHPHO\

YDOXDEOHEXWPDQ\SURIHVVLRQDOZULWLQJGHSDUWPHQWVPD\QRWKDYHWKHUHVRXUFHVWRDOORFDWHWKLV

PXFKFXUULFXODUVSDFHWRGHVLJQIDFWRUV,WZRXOGLQHYLWDEO\EHPRUHFRPSOLFDWHGWRLQFOXGH


PRWLRQGHVLJQSURMHFWVZLWKLQDSURJUDPWKDWUHOLHVRQRQHGHVLJQIRFXVHGFODVVRUWKDWVSUHDGV

GHVLJQIRFXVHGSHGDJRJ\WKURXJKRXWWKHFXUULFXOXPDVWKHUHZRXOGEHOHVVWLPHWRVFDIIROG

PRWLRQGHVLJQOLWHUDFLHVLQWRWKHPL[)LQDOO\WKHUHODWLYHO\HDV\DFFHVVWRDFRPSXWHUODE

FODVVURRPDQGWKH$GREH&UHDWLYH&ORXGZDVDSULYLOHJHRIZRUNLQJDWDODUJHUHVHDUFK

XQLYHUVLW\,WLVKDUGWRLPDJLQHWKDWVWXGHQWVZRXOGKDYHVXFKHDV\DFFHVVWRWKHVHSURJUDPVLQ

RWKHULQVWLWXWLRQDOVLWXDWLRQV

 ,QVSLWHRIWKHVHXQLTXHIDFWRUVWHDFKLQJIRXUFRQVHFXWLYHVHFWLRQVRIWKHFODVVDOORZHG

PHWRQRWLFHWKUHHFRPPRQSHGDJRJLFDOSUREOHPVZLWKWHDFKLQJPRWLRQGHVLJQDVDFRPSRQHQW

RIPXOWLPHGLDOLWHUDF\6WXGHQWV VWUXJJOHGWRWUDQVIHUWKHLUSUHYLRXVH[SHULHQFHZLWKDQLPDWLRQ

WRFODVVDVVLJQPHQWVDQG RIWHQDWWHPSWHGWRIL[SRRUGHVLJQGHFLVLRQVE\DGGLQJPRUHPRWLRQ

$GGLWLRQDOO\ ,VWUXJJOHGWRGHYHORSDSURFHVVGULYHQDVVLJQPHQWVWUXFWXUHIRUPRWLRQJUDSKLFV

SURMHFWVDVLWSURYHGGLIILFXOWIRUVWXGHQWVWRVLJQDOPRWLRQGHVLJQGHFLVLRQVXVLQJWUDGLWLRQDO

VWRU\ERDUGLQJWHFKQLTXHV7KRXJKWKHVHWKUHHSUREOHPVDURVHRXWRIP\VSHFLILFVLWXDWLRQWKH\

DUHDSSOLFDEOHWRDZLGHUDQJHRISRWHQWLDOLQWHUVHFWLRQVEHWZHHQPRWLRQGHVLJQDQG

SURIHVVLRQDOWHFKQLFDOZULWLQJIURPXVLQJSUHVHQWDWLRQVVRIWZDUHOLNH3UH]LWRGHYHORSLQJWKH

PRWLRQVW\OHJXLGHOLQHVIRUDQRUJDQL]DWLRQ7KHUHIRUHLQWKHIROORZLQJWKUHHVHFWLRQV,GHVFULEH

HDFKRIWKHVHWKUHHLVVXHVLQJUHDWHUGHWDLODQGGLVFXVVP\WHDFKLQJVWUDWHJLHVIRUUHVSRQGLQJWR

WKHVHFRPPRQREVWDFOHV

'HHPSKDVL]LQJ&KDUDFWHU$QLPDWLRQ

2QHRIWKHLQKHUHQWLVVXHVRIWHDFKLQJPRWLRQDVDSRWHQWLDOGHVLJQHOHPHQWLVWKDWPRVW

VWXGHQWV DQG,ZRXOGDUJXHPDQ\LQVWUXFWRUV KDYHOLWWOHWRQRSULRUIUDPHZRUNIRUWDONLQJ

DERXWPRWLRQZLWKRXWWKHWHUPV³GLVWUDFWLQJ´³IODVK\´RU³H\HFDWFKLQJ´)XUWKHUGLVFXVVLQJWKH


PRWLRQUKHWRULFDOO\RIWHQOHDGVWRDEVWUDFWFRQYHUVDWLRQVDERXWWKHUHODWLRQVKLSEHWZHHQYLVLRQ

DQGFRJQLWLRQRUWKHZD\KXPDQVWHQGWRUHDGLQWHQWLRQDOLW\DQGSHUVRQDOLW\HYHQLQPRYHPHQWV

RIDEVWUDFWVKDSHV$QGVRZKHQ,WDXJKW0XOWLPHGLD:ULWLQJIRUWKHILUVWWLPH,LQFOXGHGDVKRUW

GLVFXVVLRQRIDQLPDWHGFDUWRRQVDQGILOPVWKDWVWXGHQWVZHUHIDPLOLDUZLWKLQFOXGLQJ'LVQH\¶V

7KH/LRQ.LQJ7KH6LPSVRQVDQG/RRQ\7RRQV,WKHQWLHGWKHVHUHIHQFHVWRWKH3ULQFLSOHV

RI$QLPDWLRQKRSLQJWREXLOGIURPNQRZQFXOWXUDODUWLIDFWVWRWKHXQNQRZQWHUULWRU\RIDEVWUDFW

PRWLRQ+RZHYHULQP\H[SHULHQFHVWXGHQWV¶SULRUNQRZOHGJHRIFDUWRRQDQLPDWLRQRIWHQPDGH

LWPRUHGLIILFXOWIRUWKHPWRUHFRJQL]HDYDLODEOHDQGDSSURSULDWHRSSRUWXQLWLHVIRUPRWLRQLQWKHLU

YLGHRVDQGE\WKHILQDOVHPHVWHURIWHDFKLQJWKHFODVV,DFWLYHO\GLVVXDGHGVWXGHQWVIURP

LQFOXGLQJIXOO\DQLPDWHGFKDUDFWHUVLQWKHLUSURMHFWV

 'XULQJWKHVHPHVWHUVZKHQ,GLGVWDUWZLWKFKDUDFWHUDQLPDWLRQ,ZRXOGKDYHVWXGHQWV

UHDGWKHFKDSWHURQWKHSULQFLSOHVRIDQLPDWLRQLQ7KRPDVDQG-RKQVRQ¶V7KH,OOXVLRQRI/LIH

7RSUHSDUHIRUFODVVGLVFXVVLRQ,DVNHGVWXGHQWVWRIRFXVOHVVRQWKHZD\7KRPDVDQG-RKQVRQ

WDONDERXWWKHUHDOLVPRIFKDUDFWHUVDQGWRORRNIRUZD\VWKDWPRWLRQLQGLFDWHGWKHGLIIHUHQFHLQ

SHUVRQDOLWLHVRIWKHFKDUDFWHUV7KHQLQFODVV,DVNHGVWXGHQWVWRFRPSDUHWKHVHUXOHVIRU

DQLPDWLRQWRWKHUXOHVRIERG\ODQJXDJHLQGLIIHUHQWVLWXDWLRQV,WZDVQ¶WDVLPSOHFRQQHFWLRQEXW

LWGLGDOORZVWXGHQWVWRFRQVLGHUWZRIDPLOLDUWRXFKSRLQWV 'LVQH\DQGERG\ODQJXDJH IRU

FRQQHFWLQJPRWLRQWRUKHWRULF7KHVHSHGDJRJLFDOPRYHVDOVROHGWRLQWHUHVWLQJFODVVGLVFXVVLRQV

DERXWERG\ODQJXDJHDQGJHQGHUVSHFLILFDOO\KRZVRPHERG\PRYHPHQWVDUHUHDGDVLQKHUHQWO\

PDVFXOLQHRUIHPLQLQHLQZRUNSODFHFRPPXQLFDWLRQ

 %XWZKLOHWKHVHWRXFKSRLQWVHVWDEOLVKHGPRWLRQRQIDPLOLDUJURXQG,ODWHUIRXQGWKDWLW

KDGLQWLPLGDWHGPDQ\VWXGHQWVLQWKHFODVVHVSHFLDOO\VWXGHQWVZKRZHUHDOUHDG\DSSUHKHQVLYH

DERXWFRPSRVLQJPXOWLPRGDOO\LQWKHILUVWSODFH%\VWDUWLQJZLWKDQLPDWHGFKDUDFWHUV,


LPSOLFLWO\VXJJHVWHGWKDWVWXGHQWVQHHGHGWRGHYHORSSURMHFWVWKDWZHUHDVYLVXDOO\FRPSOH[DVD

'LVQH\VKRUWILOPRUDVQXDQFHGDVWKHGLIIHUHQFHLQKXPDQERG\PRYHPHQWV(YHQWKRXJK,

TXLFNO\SLYRWHGWRDQLPDWHGLQWHUIDFHVDQGWKHYDOXHRIDZHOOWLPHGIDGHHIIHFWVWXGHQWVORFNHG

RQWRFKDUDFWHUDQLPDWLRQDVDEDVHOLQHIRUHIIHFWLYHPRWLRQGHVLJQ,QWXUQPDQ\VWXGHQWV

ZRUULHGWKDWWKH\ZRXOGQHYHUEHDEOHWROLYHXSWRWKHVWDQGDUGVRIWKHFODVVLPDJLQLQJWKDWDW

VRPHSRLQWWKH\ZRXOGHYHQWXDOO\QHHGWRGHVLJQDWKUHHGLPHQVLRQDOZRUOGILOOHGZLWKDQLPDWHG

FKDUDFWHUV)XUWKHUPRUHZKHQ,ZDVDEOHWRFODULI\P\H[SHFWDWLRQVDQGGLUHFWVWXGHQWVWRZDUG

PDQDJHDEOHGHVLJQSDWWHUQVVRPHVWXGHQWVORVWPRWLYDWLRQWRZRUNRQWKHLUSURMHFWVDVWKHLU

LPDJLQDWLRQVFRQWLQXHGWRSXVKWKHPEH\RQGZKDWWKH\ZHUHDEOHWRFUHDWH

,DOVRHQFRXQWHUHGDGLIIHUHQWEXWVLPLODUO\SUREOHPDWLFDWWLWXGHLQVWXGHQWVZKRZHUH

RYHUO\LQVSLUHGE\HDUO\GLVFXVVLRQVRIFKDUDFWHUDQLPDWLRQDQGUHVROXWHO\GHFLGHGWRSURGXFH

DQLPDWHGFKDUDFWHUVLQP\FODVV,QFRQWUDVWWRWKHPDMRULW\RIWKHLUFODVVPDWHVWKHVHVWXGHQWV

RIWHQVWDUWHGWKHFODVVZLWKVLJQLILFDQWH[SHULHQFHZLWKYLVXDOGHVLJQZLWKWKH$GREH&UHDWLYH

&ORXGRUERWK$FFRUGLQJO\WKHVHVWXGHQWVZHUHOHVVOLNHO\WRKHHGP\ZDUQLQJVDERXWWKH

GLIILFXOW\RIFKDUDFWHUGULYHQDQLPDWHGSURMHFWVEHOLHYLQJWKDWWKHFRPELQDWLRQRIWKHLUSULRU

H[SHULHQFHDQGUDZGHWHUPLQDWLRQZRXOGDOORZWKHPWRRYHUFRPHWKHFKDOOHQJH%XWIURPP\

H[SHULHQFHWHDFKLQJDQGSURGXFLQJPRWLRQJUDSKLFV,NQHZKRZODERULQWHQVLYHPRWLRQGHVLJQ

FRXOGEH(YHQZRUNLQJRQDUHODWLYHO\VKRUWYLGHRVWXGHQWVQHHGWRFUHDWHDVWRU\ERDUGFROOHFW

WKHYLVXDODVVHWVLPSRUWDQGQDPHWKRVHDVVHWVZLWKLQWKHSURJUDPDUUDQJHWKHQHFHVVDU\



,QVWUXFWRUVZKRDUHQHZWRPRWLRQGHVLJQVKRXOGQRWHWKLVSURFHVVSDUWLFXODUO\WKHVHSDUDWLRQEHWZHHQFROOHFWLQJ
DVVHWVDQGDQLPDWLQJWKHP7KRXJKLWPD\VHHPOLNHFRPPRQVHQVHVWXGHQWVPXVWKDYHVRPHNLQGRIYLVXDO³VWXII´
WRSXWLQPRWLRQZKHWKHULWLVWH[WLFRQVLPDJHVRUDIXOOFKDUDFWHUDQGFROOHFWLQJWKHVHYLVXDODVVHWVDQGDUUDQJLQJ
WKHPDSSURSULDWHO\WDNHVDVRPHWLPH7KHUHIRUHDORQJZLWKWKHLUVWRU\ERDUGVVWXGHQWVZHUHUHTXLUHGWRWXUQLQD
³JURFHU\OLVW´RIWKHYLVXDODVVHWVWKH\QHHGHGWRFUHDWHFROOHFWLQRUGHUWRFRPSOHWHWKHSURMHFWDQGWKHUHZDVD
³JURFHU\GD\´LQZKLFKVWXGHQWVKDGWRGHPRQVWUDWHWKDWWKH\KDGFROOHFWHGWKHPDMRULW\RILWHPVRQWKHLUOLVW$V
SUHVFULSWLYHDVWKLVPD\VHHPWKHVHH[WUDVWHSVZHUHYLWDOIRUKHOSLQJVWXGHQWVWRNHHSWUDFNRIWKHLUZRUNORDGIURP
ZHHNWRZHHN



VWDUWLQJDQGHQGLQJOD\RXW V RIWKHDVVHWVDQGWKHQHGLWWKHPRWLRQEHWZHHQWKRVHOD\RXWV:KHQ

WKHVHVWHSVDUHJRLQJVPRRWKO\ ZKLFKLVUDUHO\WKHFDVH DVWXGHQWQHZWRPRWLRQFDQWDNH

XSZDUGVRIKRXUVWRSURGXFHDILUVWGUDIWRIDVHFRQGYLGHR7KLVORDGLQFUHDVHV

H[SRQHQWLDOO\ZKHQGHVLJQLQJDQDQLPDWHGFKDUDFWHUDVPRYLQJDFKDUDFWHULVLQHYLWDEO\PRUH

FRPSOH[WKDQPRYLQJWH[WER[HVRUVLPSOHVKDSHV:KHUHDVDQDQLPDWHGVKDSHPD\UHTXLUHRQO\

RQHVHWRIVWDUWHQGDQGLQWHUSRODWLRQVHWWLQJVDSHUVRQLILHGFKDUDFWHULVRIWHQFRPSRVHGRI

PXOWLSOHVXEHOHPHQWVVXFKDVWKHH\HVH\HEURZVDQGPRXWKRIDQDQLPDWHGIDFH(DFKRI

WKHVHVHJPHQWVPXVWEHDGMXVWHGIURPPRPHQWWRPRPHQWLQRUGHUWRLQGLFDWHLWVSHUVRQDOLW\

WKURXJKLWVPRYHPHQW7KHUHIRUHDILUVWGUDIWRIDFKDUDFWHUGULYHQDQLPDWLRQZRXOGGRXEOHRU

WULSOHWKHGUDIWLQJWLPHRIDPRWLRQJUDSKLF DSSUR[LPDWHO\KRXUVIRUDGUDIW OHDYLQJVWXGHQWV

OHVVURRPIRUHDUO\H[SHULPHQWDWLRQDQGOHVVWLPHIRUUHYLVLRQEHIRUHWKHSURMHFWZDVGXH,DOVR

IRXQGWKDWWKHVWXGHQWVZKRZRUNHGRQDQLPDWLQJFKDUDFWHUVRIWHQRYHUORRNHGRWKHUWKHRWKHU

GHVLJQHOHPHQWVLQWKHLUFRPSRVLWLRQVKRSLQJWKDWWKHYLHZHUV¶GHOLJKWLQWKHFKDUDFWHUZRXOG

PDNHXSIRUSUREOHPVZLWKOD\RXWW\SRJUDSK\DQGFRORU

6WLOOIRUWKHILUVWWZRVHPHVWHUVRIWHDFKLQJWKHFODVV,DFFHSWHGVWXGHQWV¶SURSRVDOVIRU

FKDUDFWHUGULYHQSURMHFWVDIWHUVLJQLILFDQWZDUQLQJDERXWWKHGLIILFXOWLHVLQYROYHG%XWDIWHU

ZDWFKLQJRQHWHQDFLRXVVWXGHQWDIWHUDQRWKHUEXUQRXWRQWKHVHDPELWLRXVSURMHFWV,UHZURWHP\

DVVLJQPHQWJXLGHOLQHVWRGLVFRXUDJHFKDUDFWHUDQLPDWLRQXQWLOWKHILQDOLQGHSHQGHQWSURMHFW 6HH

$SSHQGL[( $GGLWLRQDOO\,VWDUWHGWRGHHPSKDVL]HGLVFXVVLRQVRIFKDUDFWHUDQLPDWLRQDQG

IRFXVHGP\LQWURGXFWLRQRQWKHPRYHPHQWRILQDQLPDWHREMHFWVVXFKDVFDUVERXQFLQJEDOOV



%HFDXVHWKLVSURFHVVLVVRWHGLRXVSURIHVVLRQDODQLPDWRUVRIWHQEXLOWZKDWLVFDOOHGD³ULJ´WKDWFRQQHFWVPRYLQJ
SDUWVDFURVVDFKDUDFWHU¶VERG\7KLVDOORZVWKHDQLPDWRUWRDFKLHYHFRPSOH[QXDQFHGPRYHPHQWZKLOHRQO\HGLWLQJ
DIHZERG\SDUWVSHUIUDPH

&DUVPDNHIRUDQHVSHFLDOO\LQWHUHVWLQJFDVHEHFDXVH WKH\WUDYHODVRQHVLQJOHYLVXDO³EORFN´DQG VWXGHQWVDUH
XVHGWRUHDGLQJWKHPRWLRQRIFDUVLQWUDIILFWRGHWHUPLQHZKHQVRPHRQHLVDQJU\NLQGRUQRWSD\LQJDWWHQWLRQ


DQGMHOOR%\WKHWKLUGVHPHVWHU,VWRSSHGDVNLQJVWXGHQWVWRUHDGWKH7KRPDVDQG-RKQVRQ¶V

SULQFLSOHVDOWRJHWKHUDQGLQVWHDGEHJDQZLWKUHDGLQJVDERXWLQWHUIDFHDQLPDWLRQ H[FHUSWVIURP

+HDG WKDWZHUHPRUHLQOLQHZLWKWKHIDFWRUV,GLVFXVVHGLQWKHSUHYLRXVFKDSWHU

SHUVRQDOLW\FKRUHRJUDSK\SUHVHQFHDQGDFFHVVLELOLW\ $QGEHFDXVHWKHVHUHDGLQJVHPSKDVL]HG

WKHYDOXHRIVXEWOHDSSOLFDWLRQVRIPRWLRQGHVLJQVWXGHQWVZHUHOHVVOLNHO\WRFRPSDUHWKHLU

ILQLVKHGGHVLJQVWR'LVQH\DQLPDWLRQ,QWXUQ,IRXQGWKDWVWXGHQWVZHUHPRUHUHDOLVWLFLQWKHLU

SURSRVDOVDQGOHVVLQWLPLGDWHGE\WKHSURMHFWV'XULQJP\ILQDOVHPHVWHUWHDFKLQJWKHFODVV,

QRWLFHGWKDW,DFWLYHO\DYRLGHGWKHWHUPDQLPDWLRQDOWRJHWKHULQRUGHUWRDYRLGWKHFRQQHFWLRQ

ZLWKDQLPDWHGFKDUDFWHUVDVPXFKDVSRVVLEOH

7KLVLVQRWWRVD\WKDWDQLPDWLRQFDQRUVKRXOGEHHOLPLQDWHGIURPRXUGHVLJQ

YRFDEXODULHVLQWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQ$QLPDWLRQLVDPRUHYLVLEOHDQG

UHFRJQL]DEOHWHUPWKDQPRWLRQGHVLJQWRQRQGHVLJQHUVDQGLVIDUOHVVDZNZDUGZKHQVKLIWHGLQWR

FHUWDLQVHQWHQFHW\SHV HJ³DQLPDWHG´YV³PRWLRQGHVLJQHG´ $QLPDWLRQLVDOVRXVHIXOIRU

GHVFULELQJYLVXDOFKDQJHVWKDWDUHQRWFKDQJHVLQSRVLWLRQVXFKDVDIDGHDIOLFNHURUDPRUSK

HIIHFW$GGLWLRQDOO\H[FKDQJLQJWKHWHUPDQLPDWLRQIDLOVWRHOLPLQDWHWKHSRWHQWLDOIRU

RYHUZKHOPHGRURYHU]HDORXVVWXGHQWV6WLOO,DUJXHWKDWWKHGHHSFXOWXUDODVVRFLDWLRQVEHWZHHQ

DQLPDWLRQDQGDQLPDWHGFKDUDFWHUVDUHKDUGWRUHFRQILJXUHDQGWKDWWKHVWUHQJWKRIWKHVH

DVVRFLDWLRQVFDQPDNHLWKDUGIRUVWXGHQWVWRVHHWKHYDOXHLQPRUHVXEWOHPRWLRQVDQLPDWLRQV

,QVWUXFWRUVZKRDUHQHZWRDQLPDWLRQPRWLRQVKRXOGEHHVSHFLDOO\ZDU\RIWKLVG\QDPLFDV

VWXGHQWVPD\RQO\VWDUWWRDUWLFXODWHDQ[LHW\RUH[DVSHUDWLRQQHDUWKHHQGRIDSURMHFW

)XUWKHUPRUHWKRXJKPRWLRQGHVLJQPD\EHDQXQIDPLOLDUWHUPIRUVWXGHQWV DVZHOODVPDQ\

LQVWUXFWRUV ,IRXQGWKDWLWJXLGHGVWXGHQWVWRFKRRVHPRUHPDQDJHDEOHSURMHFWVDQGPDGHLW

HDVLHUIRUVWXGHQWVWRDUWLFXODWHWKHUDWLRQDOHIRUWKHLUXVHRIPRWLRQDQLPDWLRQ


&RQQHFWLQJ9LVXDO+LHUDUFK\WR&KRUHRJUDSK\

$QRWKHU PDMRU VWUXJJOH ZLWK WHDFKLQJ PRWLRQ GHVLJQ HPHUJHG IURP WKH GLIILFXOW\ RI

FRQQHFWLQJ PRWLRQ WR WKH FRQFHSW RI YLVXDO KLHUDUFK\ ZKLFK LV D IDLUO\ FRPPRQ PHWKRG IRU

HVWDEOLVKLQJYLVXDORUGHULQWHFKQLFDODQGSURIHVVLRQDOGRFXPHQWV:LWKRXWWKLVFRQQHFWLYHOLQN

VWXGHQWVRIWHQODFNHGDIUDPHZRUNIRUFRQVLGHULQJDXVHU¶VDWWHQWLRQDOQHHGVOHDGLQJWRSURMHFWV

RYHUORDGHGZLWKPRWLRQRUSURMHFWVZKHUHWKHPRWLRQFRQIOLFWHGZLWKRWKHUGHVLJQHOHPHQWV2YHU

WLPH,EHJDQWRSRVLWLRQFKRUHRJUDSK\GLVFXVVHGLQWKHSUHYLRXVFKDSWHUDVDZD\RIH[WHQGLQJ

YLVXDO KLHUDUFK\ WR PRWLRQ GHVLJQ ,Q WKLV VHFWLRQ , GLVFXVV ZK\ YLVXDO KLHUDUFK\ LV GLIILFXOW WR

FRQQHFWWRPRWLRQGHVLJQDQGGHVFULEHWKUHHUXGLPHQWDU\FKRUHRJUDSKLFSDWWHUQVWKDW,XVHGWRKHOS

VWXGHQWVWREHWWHUDFFRXQWIRUDWWHQWLRQDOSDWWHUQVLQWKHLUPRWLRQJUDSKLFV

$GDSWHGIURPWKHSHUFHSWXDOXQGHUWRQHVRI*HVWDOWSV\FKRORJ\DQGJUDSKLFGHVLJQYLVXDO

KLHUDUFK\LVDFRPPRQO\LQYRNHGEDVLFVWUDWHJ\IRUGLVFXVVLQJYLVXDOGHVLJQLQSURIHVVLRQDODQG

WHFKQLFDO FRPPXQLFDWLRQ ,Q %HFRPLQJ 5KHWRULFDO $QDO\]LQJ DQG &RPSRVLQJ LQ D 0XOWLPHGLD

:RUOG1LFRWUD  GHILQHVYLVXDOKLHUDUFK\DV³KRZFOHDUO\DYLVXDOFRPSRVLWLRQSRUWUD\VWKH

UHODWLYH LPSRUWDQFH RI GLIIHUHQW SLHFHV RI LQIRUPDWLRQFUHDW>LQJ@ D YLVXDO SDWK WKURXJK WKH

GRFXPHQW DOORZLQJ YLHZHUV WR LQWXLWLYHO\ DQG TXLFNO\ JUDVS WKH LPSRUWDQW LQIRUPDWLRQ´ S

 2QHPHWKRGRIKHOSLQJVWXGHQWVWRDUWLFXODWHYLVXDOKLHUDUFK\LVWRGHVFULEHGHVLJQHOHPHQWV

DV SRVVHVVLQJ GLIIHULQJ OHYHOV RI HPSKDVLV RU ³ZHLJKW´ EDVHG RQ WKH SRWHQWLDO IRU GUDZLQJ D

UHDGHU VDWWHQWLRQ/DUJHUHOHPHQWVKDYHPRUHZHLJKWWKDQVPDOOHUHOHPHQWVEROGWH[WFDUULHVPRUH

ZHLJKWWKDQQRQEROGHGWH[WLPDJHVFDUU\PRUHZHLJKWWKDQWH[WHWF7KRXJKYLVXDOKLHUDUFK\FDQ


SUREOHPDWLFDOO\ UHURRWGHVLJQLQFRJQLWLYHSHUFHSWLRQLWDOVRSUHVVHVVWXGHQWVWRFRQVLGHUWKH

UHODWLYHLPSRUWDQFHRIYLVXDOHOHPHQWVDFFRUGLQJWRWKHVLWXDWLRQUDLVLQJTXHVWLRQVVXFKDV+RZ

LPSRUWDQWLVWKHWLWOHUHODWLYHWRWKHUHVWRIWKHGHVLJQ"'RWKHKHDGLQJVQHHGWRPRUHHPSKDVLVRU

GRWKH\QHHGWREOHQGLQPRUHZLWKWKHERG\SDUDJUDSKV":KHQLVLWQHFHVVDU\WRHPSKDVL]HWKH

ERG\WH[WYLDDSXOOTXRWHRUDVHSDUDWHWH[WER[DQGKRZFDQWKLVVHSDUDWHDUHDEHLQWHJUDWHGLQWR

WKH GRFXPHQW ZLWKRXW WKURZLQJ RII WKH KLHUDUFK\ RIWKH UHVW RI WKH SDJH" %\ FRQVLGHULQJ WKHVH

W\SHVRITXHVWLRQVVWXGHQWVOHDUQKRZWRUHLQIRUFHDQGRUFKDOOHQJHDVHQVHRIYLVXDORUGHULQWKHLU

GHVLJQV

0RWLRQKRZHYHUGRHVQRWILWQHDWO\LQWRGLVFXVVLRQVRIYLVXDOKLHUDUFK\EHFDXVHPRWLRQ

FDUULHVVRPXFKPRUH³ZHLJKW´WKDQRWKHUGHVLJQHOHPHQWV(YHQDVPDOODPRXQWRIPRYHPHQWRU

YLVXDOFKDQJHWHQGVWRGUDZDXVHU¶VIRFXVHYHQLIWKHUHVWRIWKHLQWHUIDFHLVKHDYLO\ZHLJKWHGLQ

WHUPVRIVL]HFRORUFRQWUDVWDQGRWKHUYLVXDOIDFWRUV7RSXWWKLVSKHQRPHQDLQ+HDG¶VWHUPV

³2IDOOWKHGHVLJQWRROVDYDLODEOHWRXVRQWKHZHEDQLPDWLRQLVWKHRQHPRVWOLNHO\WREHXVLQJ

LWVRXWVLGHYRLFHDWDQ\JLYHQPRPHQW´ S :KHUHDVWKHYLVXDOKLHUDUFK\RISULQW

GRFXPHQWVRIWHQDOORZVWKHUHDGHUWRJODQFHIURPRQHHOHPHQWWRDQRWKHUPRWLRQGLVUXSWVWKLV

SHUFHSWXDOIUHHGRPE\FRQVLVWHQWO\SXOOLQJWKHUHDGHU¶VDWWHQWLRQEDFNWRWKHSRLQWRIPRYHPHQW

RUYLVXDOFKDQJH

)XUWKHUPRUHEHFDXVHPRYHPHQWDQGDQLPDWLRQGHSHQGRQYLVXDOFKDQJHVPRWLRQ

JUDSKLFVUHTXLUHXVWRVHHYLVXDOKLHUDUFK\DVDWHPSRUDOO\G\QDPLFSURSHUW\RIYLVXDOGHVLJQ$W



:\VRFNLFDOOVDWWHQWLRQWRWKLVWHQGHQF\LQ³7KH6WLFN\(PEUDFHRI%HDXW\´DQGUHFRPPHQGVWKDWWHDFKHUVDQG
VWXGHQWVRIYLVXDOUKHWRULFFUHDWHSXUSRVHIXOO\³VWUDQJH´YLVXDOGHVLJQVWRFRXQWHUEDODQFHWKHXUJHWRSULYLOHJHRUGHU
DVDXQLYHUVDOJRRGLQGHVLJQ

'HVLJQHUVLQGDWDYLVXDOL]DWLRQVXFKDV&ROH.QDIOLFGLVFXVVWKLVGLIIHUHQFHLQWHUPVRIH[SORUDWRU\DQGH[SODQDWRU\
YLVXDOL]DWLRQV,QH[SORUDWRU\GDWDYLVXDOL]DWLRQVWKHXVHULVHQFRXUDJHGWRORRNDWPDQ\GDWDSRLQWVLQRUGHUWRGUDZ
WKHLURZQFRQFOXVLRQV,QH[SODQDWRU\GDWDYLVXDOL]DWLRQVWKHGHVLJQHUKLJKOLJKWVFHUWDLQGDWDSRLQWVLQRUGHUWRJXLGH
WKHXVHUWRZDUGWKHPRVWLPSRUWDQWLQIRUPDWLRQ3DUWRIP\GLIILFXOW\ZLWKWHDFKLQJKLHUDUFK\WKHQPD\KDYHEHHQ
EHFDXVH,SULPDULO\WDXJKWGRFXPHQWVDVH[SORUDWRU\YLVXDODUWHIDFWVEXWDQLPDWLRQPRWLRQPDNHVLWPXFKKDUGHUIRU
WKHXVHUWRH[SORUH


RQHPRPHQWWKHYLVXDOKLHUDUFK\PD\HQFRXUDJHRQHSHUFHSWXDOSDWWHUQDQGLQDQRWKHUPRPHQW

DIWHUHOHPHQWVKDYHFKDQJHGFRORUVKDSHDQGRUSRVLWLRQWKHKLHUDUFK\PD\VKLIWWRHQFRXUDJH

DGLIIHUHQWUHDGLQJSDWWHUQHQWLUHO\7RFODULI\WKLVSURFHVV,¶YHSXOOHGIRXUFRQVHFXWLYH

VFUHHQVKRWVIURPDYLGHRSURGXFHGE\WKH3(:5HVHDUFK&HQWHU 7DEOH 2YHUDWZHQW\VHFRQG

SHULRGYLVXDOHOHPHQWVDSSHDUGLVDSSHDUDQGIDGHVOLJKWO\LQRUGHUWRVKLIWWKHKLHUDUFK\IURPD

IRFXVRQWKHJUDSKDVDZKROHWRDQHPSKDVLVRQVSHFLILFGDWDSRLQWVZLWKLQWKHJUDSK,QWXUQ

UDWKHUWKDQDUWLFXODWLQJWKHYLVXDOKLHUDUFK\RIDJUDSKLFZRUNLQJZLWKPRWLRQDQLPDWLRQUHTXLUHV

GHVLJQHUVWRFRQVWDQWO\UHDUWLFXODWHYLVXDOKLHUDUFK\IURPPRPHQWWRPRPHQW,QVWHDGRIDVNLQJ

³KRZPXFKHPSKDVLVVKRXOGEHSXWRQWKLVHOHPHQW"´PRWLRQGHVLJQHUVPXVWDVN³KRZPXFK

HPSKDVLVVKRXOGEHSXWRQWKLVHOHPHQWDWWKLVPRPHQW"´&RQVLGHULQJWKDWPDQ\RIRXUVWXGHQWV

PD\KDYHRQO\MXVWOHDUQHGWRLGHQWLI\YLVXDOKLHUDUFK\LQDQ\IRUPDGGLQJWKLVWHPSRUDOYDULDEOH

FDQEHH[WUHPHO\KDUGWRIRUVWXGHQWVWRSXWLQWRSUDFWLFH

7KHGLVMXQFWLRQEHWZHHQYLVXDOKLHUDUFK\LQ³VWLOO´PHGLDDQGPRWLRQJUDSKLFVOHGWRWZR

SUREOHPDWLFWHQGHQFLHVLQVWXGHQWV¶PRWLRQJUDSKLFVSURMHFWVHYHQZKHQ,GLVFXVVHGKRZPRWLRQ

ZDVDQDWXUDOO\SRZHUIXOGHVLJQHOHPHQWIRUGUDZLQJWKHYLHZHU¶VDWWHQWLRQ)LUVWVWXGHQWV

WHQGHGWRXQGHUYDOXHPRPHQWVRIVWLOOQHVVLQWKHLUYLGHRVLPDJLQLQJWKDWDQHIIHFWLYHPRWLRQ

JUDSKLFLVDJUDSKLFWKDWLVDOZD\VPRYLQJDQGWKDWWKHVROXWLRQWRSRRUFRPSRVLWLRQZDVVLPSO\

WRDGGPRUHPRWLRQDQLPDWLRQWRWKHGHVLJQ7KLVDSSURDFKOHGWRXQZLHOG\GHVLJQVZKHUH

LPSRUWDQWGHVLJQHOHPHQWVVXFKDVDTXRWHRUDEORFNRIWH[WZHUHRIWHQRYHUZKHOPHGE\

PRYHPHQWRQDQRWKHUDUHDRIWKHVFUHHQ6HFRQGVWXGHQWVVWUXJJOHGWRXQGHUVWDQGKRZWKH

WLPLQJRIPRYHPHQWVDQLPDWLRQFRXOGFRQQHFWWRWKHRWKHUYLVXDOHOHPHQWVLQWKHLUGHVLJQV

HVSHFLDOO\ZKHQWKHUHZHUHPXOWLSOHHOHPHQWVWKDWQHHGHGWREHPRYHGRQRURIIWKHIUDPH6RPH

VWXGHQWVZRXOGRQO\PRYHRQHHOHPHQWRQVFUHHQDWDWLPHOHDGLQJWRORQJVORZFRPSRVLWLRQV


7DEOH6KLIWVLQ9LVXDO+LHUDUFK\LQ3HZ5HVHDUFK9LGHR


+LHUDUFK\  

7KHWZRFRPSHWLQJOLQHJUDSKVDUHGUDZQRQWR
WKHVFUHHQIURPVWDUWWRHQGSODFLQJHPSKDVLVRQ
ERWKOLQHVDWRQFH

+LHUDUFK\  

7KHGDWDIRU³GLVDJUHH´IDGHVRXWDQGWKHILQDO
SHUFHQWDJHRIDJUHHPHQWIDGHVRQGUDZLQJ
DWWHQWLRQWRWKHHQGRIWKHOLQHJUDSK

+LHUDUFK\  

7KHH[LVWLQJOLQHIDGHVVOLJKWO\DQGDQHZOLQHLV
GUDZQRQ/DEHOVDOVRDSSHDUDWDQG
WRHPSKDVL]HSUHYLRXVSHDNVLQDJUHHPHQW

+LHUDUFK\  

DQGIDGHVOLJKWO\DQGWKHUHVWRIWKH
OLQHLVGUDZQRQ$GRWWHGOLQHH[WHQGVIURPWKH
ULJKWVLGHRIWKHVFUHHQWRWKHOHIWVLGHRIWKH
VFUHHQDQGDODEHODSSHDUVDWWKHORZHVWSRLQWRI
DJUHHPHQW7KLVHPSKDVL]HVWKHRYHUDOOVKLIW
IURPWR


1RWH,PDJHVIRU7DEOHWDNHQIURP$PHULFD¶V3ODFHLQWKH:RUOGSXEOLVKHGE\3HZ5HVHDUFK
9LGHRRQ'HFHPEHU



2WKHUVWXGHQWVGHFLGHGWRPRYHDOOHOHPHQWVRQVFUHHQDWVLPXOWDQHRXVO\RIWHQRYHUORDGLQJWKH

IUDPHLQWKHSURFHVV,QHLWKHUFDVHVWXGHQWVZHUHXVXDOO\XQDEOHWRH[SODLQZK\HOHPHQWVFDPH

RQWKHVFUHHQDWDSDUWLFXODUSDFHRULQDSDUWLFXODURUGHUDQGWKH\UDUHO\FRQQHFWHGWKHLUUDWLRQDOH

IRUWKHWLPLQJRIWKHVHPRYHPHQWVEDFNWRWKHYLHZHU¶VDWWHQWLRQDOQHHGV

%HFDXVHRIWKHDGGHGFRPSOH[LW\RIYLVXDOKLHUDUFK\LQPRWLRQ,IRXQGLWQHFHVVDU\WR

VSHQGDIHZFODVVVHVVLRQVWDONLQJWKURXJKWKHVHLVVXHVZLWKVWXGHQWVHVSHFLDOO\WKHWHQGHQF\IRU

PRWLRQDQLPDWLRQWRGLVUXSWWKHLQWHQGHGUHDGLQJSDWWHUQ,QRQHDFWLYLW\WKDWVSXQRXWRIWKHVH

GLVFXVVLRQV,DVNHGVWXGHQWVWRH[DPLQH$QLPDWHFVVDQLQWHUDFWLYHOLEUDU\RIGR]HQVRI&66

DQLPDWLRQV$IWHUGLVFXVVLQJWKHSRWHQWLDOSHUVRQDOLWLHVRIWKHVHDQLPDWLRQV GUDZLQJRIIDQRWKHU

FRQFHSWIURPWKHSUHYLRXVFKDSWHU ,DVNHGFKDOOHQJHGVWXGHQWVWRFKRRVHWHQDQLPDWLRQW\SHV

DQGUDQNWKHPIURPWKHPRVWVXEWOHWRWKHPRVWFRQVSLFXRXV%\FRPSDULQJWKHVHGLIIHUHQW

DQLPDWLRQW\SHVVWXGHQWVQRWRQO\OHDUQHGWKDWDQHOHPHQWIDGLQJRQVFUHHQGUDZVOHVVDWWHQWLRQ

WKDQRQHUROOLQJRQVFUHHQEXWDOVRWKDWWKH\VKRXOGFRQVLGHUWKHXVHUV¶DWWHQWLRQDOQHHGVZKHQ

SODQQLQJWKHLUGHVLJQV

7RHPSKDVL]HWKHUHODWLRQVKLSEHWZHHQPRWLRQDQGYLVXDOKLHUDUFK\,DOVROHDUQHGWR

LQWURGXFHVWXGHQWVWRWKUHHEDVLFPRWLRQGHVLJQSDWWHUQVRUWRXVHWKHWHUPLQRORJ\,RIIHUHGLQ

WKHSUHYLRXVFKDSWHUWKUHHFKRUHRJUDSKLHV7KHPRVWEDVLFFKRUHRJUDSK\LVZKDW,FDOOHGWKH

³ERXQFLQJEDOO´SDWWHUQQDPHGDIWHUWKHFKLOGUHQ¶VVKRZVWKDWZRXOGXVHDYLVXDOERXQFLQJEDOO

WRKHOS\RXQJYLHZHUVWRVLQJDORQJZLWKPXVLF7KHUXOHVIRUWKLVSDWWHUQDUH WKDWRQO\RQH

YLVXDOHOHPHQWFDQEHPRYLQJRQVFUHHQDWDWLPHDQG ZKDWHYHUHOHPHQWLVPRYLQJPXVWEH

LPSRUWDQWHQRXJKWRDWWUDFWPRVWRIWKHXVHU¶VDWWHQWLRQ,IWKHUHDUHWKUHHLFRQVWKDWQHHGWRPRYH

RQWRWKHVFUHHQIRUH[DPSOHHDFKLFRQZRXOGQHHGWRFRPHWRDFRPSOHWHVWRSEHIRUHWKHQH[W



,XVHGWKLVWHUPWRDYRLGWKHSKUDVH³DWWHQWLRQJUDEELQJ´


LFRQHQWHUVWKHIUDPH$VRQHPLJKWLPDJLQHDGKHULQJWRWKLV³ERXQFLQJEDOO´FKRUHRJUDSK\LV

H[WUHPHO\OLPLWLQJDQGVWXGHQWVUDUHO\XVHGWKLVPHQWDOLW\WKURXJKRXWDQHQWLUHDQLPDWHGSURMHFW

6WLOOE\OLPLWLQJPRYHPHQWFKDQJHWRRQHREMHFWDWDWLPHVWXGHQWVOHDUQHGWRUHVSHFWWKHYLVXDO

³ZHLJKW´RIPRWLRQE\FRQWLQXDOO\SUHGLFWLQJWKHSDWKDQGWLPLQJRIWKHXVHU¶VJD]H

2QFHVWXGHQWVXQGHUVWRRGWKHOLPLWVRIERXQFLQJEDOOFKRUHRJUDSK\,LQWURGXFHGWKHPWR

UXOHVIRUVWDJJHULQJPRWLRQGUDZQGLUHFWO\IURPDVHFWLRQRQ³&KRUHRJUDSK\´LQ*RRJOH¶V

0DWHULDO'HVLJQ*XLGHOLQHV7KHLUJXLGHOLQHVVWDWH³ZKHQPXOWLSOHVXUIDFHVDUHFUHDWHGDWWKH

VDPHWLPHTXLFNO\VWDJJHUWKHDSSHDUDQFHRIHDFK&UHDWHDFOHDUVPRRWKIRFDOSDWKLQDVLQJOH

GLUHFWLRQ´ 0DWHULDO'HVLJQ*XLGHOLQHVESDUD 7KHHDVLHVWZD\WRLPDJLQHWKLVUXOHLQ

SUDFWLFHLVWRFRQVLGHUGHVLJQLQJWKHPRWLRQRIPXOWLSOHLWHPVLQDYHUWLFDOOLVWDVWKH\DSSHDURQ

VFUHHQ,QVWHDGRIEULQJLQJHDFKLWHPWRDFRPSOHWHUHVWEHIRUHEULQJLQJRQWKHQH[WLWHPD

VWDJJHUHGFKRUHRJUDSK\ZRXOGWLPHWKHPRYHPHQWVVRWKDWDOORIWKHOLVWHGLWHPVPRYHDVRQH

XQLWEXWDUULYHDWWKHLUILQDOSRVLWLRQVDWVOLJKWO\GLIIHUHQWPRPHQWV7KHJRDORIWKLV

DV\QFKURQLFLW\LVRIWHQWRUHLQIRUFHDQGRULQGLFDWHWKHKLHUDUFK\RIWKHVHHOHPHQWV,Q*RRJOH¶V

H[DPSOHWKHWRSLWHPDUULYHVILUVWWKHQH[WLWHPDUULYHVVHFRQGDQGVRRQXQWLODOOLWHPVLQWKH

OLVWKDYHUHDFKHGWKHLULQWHQGHGSRVLWLRQV7KLVFKRUHRJUDSK\SURYLGHGVWXGHQWVZLWKDYLVXDO

ORJLFIRUVLPXOWDQHRXVPRWLRQWKDWKDUPRQL]HGSDUWLFXODUO\ZHOOZLWKWUDGLWLRQDODSSURDFKHVWR

YLVXDOKLHUDUFK\6WLOOVWDJJHUHGFKRUHRJUDSK\FRPHVZLWKLWVRZQOLPLWDWLRQVVXFKDVVLWXDWLRQV

ZKHUHWKHVWDJJHUFDOOVWRRPXFKDWWHQWLRQWRWKHHOHPHQWVHQWHULQJWKHVFUHHQDQGVXFK

OLPLWDWLRQVLQHYLWDEO\OHDGEDFNWRWKHVDPHIRXQGDWLRQRIDXGLHQFHDQGSXUSRVHDVYLVXDO

KLHUDUFK\

 7REHWWHUUKHWRULFL]HWKHFRQFHSWRIFKRUHRJUDSK\,DOVRHQFRXUDJHGVWXGHQWVWRFRQVLGHU

WKHSRWHQWLDOEHQHILWVRIGHVLJQLQJPRWLRQZLWKWKHFRPSOHWHRSSRVLWHRIWKHERXQFLQJEDOO


H[DPSOHZKHUHQHDUO\WKHHQWLUHVFUHHQLVWDNHQXSZLWKVLPXOWDQHRXVPRYHPHQWZLWKQRFOHDUO\

LQWHQGHGYLVXDOHOHPHQWIRUWKHYLHZHUWRIROORZ,FDOOWKLVDQ³RYHUZKHOPLQJ´FKRUHRJUDSK\

VLQFHWKHXVHU¶VYLVXDOILHOGLVOLWHUDOO\RYHUZKHOPHGZLWKPRYHPHQW,ZDVKDSSLO\VXUSULVHGWR

ILQGWKDWVWXGHQWVZHUHW\SLFDOO\TXLWHJRRGDWILQGLQJH[DPSOHVWKLVFKRUHRJUDSKLFVW\OH6RPH

VWXGHQWVFRQQHFWHGRYHUZKHOPLQJFKRUHRJUDSK\WRYLGHRJDPHVVXJJHVWLQJWKDWSDUWLFXODUO\

KDUGOHYHOVVHHNWRRYHUZKHOPSOD\HUVYLVXDOO\LQRUGHUWRUHVRQDWHZLWKDVHQVHRIEHLQJ

RYHUZKHOPHGSURFHGXUDOO\2WKHUVWXGHQWVSRLQWHGRXWKRZVRPHILOPVDQGWHOHYLVLRQSURJUDPV

WU\WRYLVXDOO\RYHUZKHOPWKHYLHZHUGXULQJODUJHEDWWOHVRUILJKWVFHQHVLQRUGHUWRUHLQIRUFHWKH

VHQVHRIGUDPDDQGFRQIOLFW/RFDWLQJWKLVFKRUHRJUDSK\LQWKHVHH[DPSOHVKHOSHGVWXGHQWVWR

XQGHUVWDQGKRZRYHUZKHOPLQJWKHYLHZHUZLWKPRWLRQLVRIWHQLQDSSURSULDWHZKLOH

VLPXOWDQHRXVO\DFNQRZOHGJLQJWKDWLWFDQEHXVHIXOJLYHQWKHULJKWUKHWRULFDOVLWXDWLRQ

 7KHVHWKUHHFKRUHRJUDSKLFSDWWHUQVWKHERXQFLQJEDOOVWDJJHULQJDQGRYHUZKHOPLQJ

FKRUHRJUDSK\ZHUHXVHIXOIRUKHOSLQJVWXGHQWVUHVLVWWKHXUJHWRVROYHSUREOHPVLQPRWLRQ

GHVLJQE\DGGLQJPRUHPRWLRQ7KLVLVQRWWRVD\WKDWWKHVHDUHWKHRQO\SDWWHUQVRUWKDWWKH\DUH

WKHPRVWFRPPRQSDWWHUQVLQPRWLRQGHVLJQ+RZHYHUWKH\GLGSURYLGHVWXGHQWVZLWKVFKHPHV

IRUFRQQHFWLQJPRWLRQWRPRUHFRPPRQGLVFXVVLRQVRIYLVXDOKLHUDUFK\LQWHFKQLFDODQG

SURIHVVLRQDOFRPPXQLFDWLRQ

$SSURDFKHVWR6WRU\ERDUGLQJIRU0RWLRQ'HVLJQ

 2QHRIWKHPRUHVXUSULVLQJGLIILFXOWLHVRIZRUNLQJZLWKPRWLRQGHVLJQSHGDJRJLFDOO\ZDV

WKHGLIILFXOW\RIKDYLQJVWXGHQWVFUHDWHORZILGHOLW\SURWRW\SHVRIPRWLRQJUDSKLFVFRPPRQO\

NQRZQDVVWRU\ERDUGV6WRU\ERDUGLQJSOD\VDFULWLFDOUROHLQYLGHRSURGXFWLRQEHFDXVHLWDOORZV

FRQWHQWFUHDWRUVWRSORWRXWWKHFRQWHQWSDFLQJDQGYLVXDOVW\OHRIWKHYLGHREHIRUHVKLIWLQJWR


FRPSOLFDWHGSURJUDPVOLNH$GREH,OOXVWUDWRU$IWHU(IIHFWVDQG3UHPLHUH3UR7KRXJKLWPD\

VHHPWHGLRXVWRFUHDWHURXJKVNHWFKHVRIHDFKVFHQHLWWDNHVPXFKOHVVWLPHWRFRPSOHWHO\

FKDQJHWKHFRPSRVLWLRQRIDURXJKVNHWFKWKDQYLGHRIRRWDJHRUDQDQLPDWHGVFHQH$V%DO]RWWL

 KDVDUJXHGVWRU\ERDUGLQJDOVRIXQFWLRQVDVDYLWDOVSDFHIRULQYHQWLRQLQPXOWLPRGDO

SURMHFWVDVWKHORZVWDNHVORZILQDWXUHRIVWRU\ERDUGVSURYLGHVVWXGHQWVZLWK³WKHVSDFH

RSSRUWXQLW\DQGIUHHGRPWRH[SHULPHQWZLWKGLIIHUHQWDSSURDFKHVDVWKH\ZRUNWRGHILQHWKHLU

FRPPXQLFDWLRQJRDOV´ S PXFKLQWKHVDPHZD\DVWKHEUDLQVWRUPLQJSUHZULWLQJDQG

RXWOLQLQJRIDWUDGLWLRQDOSDSHU

+DYLQJWDXJKWYLGHREDVHGSURMHFWVEHIRUH,DVVXPHGWKDWWKHVHVDPHEHQHILWVZRXOG

H[WHQGWRP\VWXGHQWV¶PRWLRQJUDSKLFVSURMHFWVKRZHYHU,IRXQGWKDWLWZDVDFWXDOO\TXLWH

GLIILFXOWIRUVWXGHQWVWRSODQPRWLRQDQGDQLPDWLRQXVLQJWKHVWRU\ERDUGIRUPDW6WRU\ERDUGV

GLYLGHWKHXVHU¶VYLHZHU¶VH[SHULHQFHLQWRDVHWRIVWLOOLPDJHVDQGVWLOOLPDJHVDUHQRW

SDUWLFXODUO\XVHIXOIRUVNHWFKLQJPRWLRQ,QRQHRIP\ILUVWVHPHVWHUVWHDFKLQJPRWLRQGHVLJQ

VWXGHQWVDWWHPSWHGWRVLJQDOPRWLRQZLWKLQWKHVWRU\ERDUGIUDPHVGUDZLQJDUURZVWRVKRZ

PRWLRQDQGZULWLQJVPDOOSDUHQWKHWLFDOQRWHVVXFKDV³ IDGHVRXW ´RU³ VFDOHVXS ´WRGHQRWH

RWKHUYLVXDOFKDQJHV%XWWKLVDSSURDFKOHGWRPHVV\XQUHDGDEOHVWRU\ERDUGVDQGLWZDVRIWHQ

KDUGWRWHOOZKHWKHUDQDUURZRUWH[WHOHPHQWZDVPHDQWWRDFWXDOO\DSSHDULQWKHIUDPHRUDFWDV

PHWDWH[WWRH[SODLQYLVXDOFKDQJHV6FUDSSLQJWKLVLQLWLDODSSURDFK,DGYLVHGVWXGHQWVWR

VWRU\ERDUGPRWLRQE\GUDZLQJUHSODFLQJHDFKVLQJOHIUDPHZLWKWKUHH³PRWLRQIUDPHV´

UHSUHVHQWLQJWKHEHJLQQLQJPLGGOHDQGHQGRIHDFKYLVXDOFKDQJH+RZHYHUWKHVHPRWLRQIUDPHV

WULSOHGWKHOHQJWKRIP\VWXGHQWV¶VWRU\ERDUGVIURPDSSUR[LPDWHO\IUDPHVSHUSURMHFWWR

DSSUR[LPDWHO\IUDPHVSHUSURMHFWDQGVWXGHQWVZHUHGULYHQWRH[KDXVWLRQE\WKHWHGLXPRI



:KLOHP\UHIHUHQFHVWR³VWRU\ERDUGLQJ´KHUHDUHOLPLWHGWRYLGHRSURGXFWLRQWKHWHUPLVDOVRXVHGWRGHVFULEHHDUO\
SHQDQGSDSHUSURWRW\SHVIRUXVHULQWHUIDFHVDQGRWKHULQWHUDFWLYHPHGLD /LWWOH 


VNHWFKLQJQHDUO\WKHVDPHLPDJHWKUHHWLPHVRYHU$QGQHDUWKHHQGRIRQHVHPHVWHU,UHTXLUHG

VWXGHQWVWRSODQWKHLUPRWLRQE\FUHDWLQJDWUDGLWLRQDOVWRU\ERDUGDQGDGGLQJDIHZVHQWHQFHV

GHVFULELQJWKHPRWLRQEHORZHDFKIUDPH2QWKHRQHKDQGZULWLQJGHVFULSWLRQVRIWKHLUSODQVIRU

PRWLRQIRUFHGVWXGHQWVWRFRQVLGHUKRZPRWLRQFDQEHGHVFULEHGLQFRQFUHWHZD\V+RZHYHULW

ZDVVWLOORIWHQGLIILFXOWWRXQGHUVWDQGKRZWKHGHVFULSWLRQPDWFKHGXSZLWKWKHHOHPHQWVLQHDFK

IUDPH

$PLGDOOWKHVHIDLOHGVWUDWHJLHV,GLGVWXPEOHXSRQWZRSDUWLFXODUO\XVHIXODSSURDFKHVIRU

LQWHJUDWLQJPRWLRQLQWRVWRU\ERDUGV7KHILUVWZDVDWHFKQLTXH,OHDUQHGIURP7UDSSDQG

<DVPLQ¶V  ³$GGUHVVLQJ$QLPDWHG7UDQVLWLRQVDOUHDG\LQ0RELOH$SS6WRU\ERDUGV´ZKLFK

RXWOLQHVDVHWRILFRQVIRUUHIHUHQFLQJWKHPRVWFRPPRQDQLPDWHGWUDQVLWLRQVLQPRELOH

DSSOLFDWLRQV7KHLFRQVDUHFRPSRVHGRIVLPSOHVKDSHVGHVLJQHGWREHHDV\HQRXJKWRVNHWFKE\

KDQGEXWGLVWLQFWLYHHQRXJKWRGLIIHUHQWLDWHDWDJODQFH%XLOGLQJRII7UDSSDQG<DVPLQ¶V

H[DPSOH,JDYHWKHOLVWRILFRQVWRP\VWXGHQWVDQGHQFRXUDJHGWKHPWRXVHWKHLFRQVDVD

FRQFLVHZD\WRVLJQDOWKHRYHUDOOYLVXDOFKDQJHIURPRQHIUDPHWRWKHQH[W2YHUWLPHVWXGHQWV

EHJDQWRXVHWKHVHLFRQVIRUPRUHWKDQMXVWZKROHVFUHHQWUDQVLWLRQVHVSHFLDOO\ZLWKIDGHVDQG

VHTXHQWLDOPRYHPHQW%HFDXVHWKHLFRQVZHUHVRHDV\WRGUDZDQGUHGUDZWKH\HQFRXUDJHG

VWXGHQWVWRH[SHULPHQWZLWKGLIIHUHQWFRPELQDWLRQVRIPRYHPHQWERWKLQWUDQVLWLRQVDQGEHWZHHQ

HDFKVFHQHZKLFKZDVSUHFLVHO\WKHJRDORIWKHVWRU\ERDUGV7KLVLVQRWWRVD\WKHLFRQVZHUHD

SHUIHFWVROXWLRQDVWKHPRUHVWXGHQWVZRUNHGZLWKWKHLFRQVWKHOHVVOLNHO\WKH\ZHUHWR

H[SHULPHQWZLWKQHZPRYHPHQWVDQGFKRUHRJUDSKLHV$GGLWLRQDOO\WKHLFRQVZHUHVRHDV\WR

DSSO\WKDWVWXGHQWVZRXOGRFFDVLRQDOO\DSSO\WKHPXQFULWLFDOO\LQFOXGLQJPRWLRQIRUPRWLRQ¶V

VDNH


%XWSHUKDSVWKHPRVWXQH[SHFWHGFKDQJHWRWKHVWRU\ERDUGLQJSURFHVVZDVWKHKHLJKWHQHG

LPSRUWDQFHRIIDFHWRIDFHFRQIHUHQFHVDERXWWKHVWRU\ERDUGVDVWKHVHFRQIHUHQFHVSURYLGHGD

VSDFHIRUVWXGHQWVWRFODULI\WKHLUSODQVZLWKERGLO\PRYHPHQWVDQGJHVWXUHVLQOLHXRIWH[WXDO

H[SODQDWLRQ7KRXJKVRPHVWXGHQWVVWUXJJOHGWRYHUEDOO\H[SODLQWKHDFFHOHUDWLRQRUSDWKRI

PRWLRQPRVWFRXOGDFWRXWWKHLQWHQGHGPRYHPHQWVZLWKWKHLUKDQGV$QGVRZKHQ,UHVSRQGHG

WRVWXGHQWV¶VWRU\ERDUGV,DOVRUHOLHGRQKDQGPRYHPHQWVWRPDNHP\SRLQWVSDQWRPLPLQJWKH

PRYHPHQWRILQYLVLEOHREMHFWVDFURVVWKHIUDPHVRIWKHLUVWRU\ERDUGV(YHQDIWHUZHHNVRI

ZRUNLQJLQ$IWHU(IIHFWVLWZDVRIWHQFOHDUHUIRUXVWRFRPPXQLFDWHWKURXJKWKHVHKDQG

PRYHPHQWVWKDQE\WDONLQJDERXWWKHSUREOHPVRIOLQHDULQWHUSRODWLRQRUWKHQHHGIRUDVRIWHU

HDVHLQ:KLOHWKHVWRU\ERDUGGRFXPHQWVSOD\HGDFULWLFDOUROHLQGLVFXVVLQJWKHJHQHUDO

FRPSRVLWLRQRIHDFKLQGLYLGXDOIUDPHWKHIDFHWRIDFHPHHWLQJVZHUHHVVHQWLDOIRUFODULI\LQJ

VWXGHQWV¶LQWHQWLRQVDQGP\FRPPHQWVZLWKUHJDUGWRPRWLRQ

7KHVHSRLQWVRQWKHQDWXUHRIVWRU\ERDUGLQJZLWKPRWLRQDUHSDUWLFXODUO\LPSRUWDQWIRU

PXOWLPRGDOO\PLQGHGWHDFKHUVLQWHFKQLFDODQGSURIHVVLRQDOZULWLQJ6WRU\ERDUGLQJLVDQ

DWWUDFWLYHWRROEHFDXVHLWFRQQHFWVRXUGLVFLSOLQDU\FDUHIRULQYHQWLRQDQGGUDIWLQJWRWKH

PXOWLPRGDOSRVVLELOLWLHVRIFRPLFVDQGYLGHRSURGXFWLRQ%XWWKLVH[FLWHPHQWFDQDOVROHDGXVWR

DVVXPHWKDWVWRU\ERDUGVDUHPRUHZLGHO\DSSOLFDEOHWKDQWKH\DFWXDOO\DUHHVSHFLDOO\ZKHQLW

FRPHVWRYLGHRSURGXFWLRQ)URPP\H[SHULHQFHWHDFKLQJPRWLRQGHVLJQWKHVROXWLRQLVQRWWR

ILQGDQHZFDWFKDOOPRGHOIRUDSURFHVVGULYHQDSSURDFKWRPXOWLPRGDOLW\EXWWRTXHVWLRQKRZ

WKHSURFHVVPD\EHVKDSHGE\WKHSDUWLFXODUPRGHVZHFKRRVHWRZRUNZLWK




&RQFOXVLRQ

 )URPP\UHVHDUFKRQPRWLRQGHVLJQLQWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWLRQLWLV

FOHDUWRPHWKDWPRWLRQDQLPDWLRQLVQRWQHZWRWKHILHOG2WKHUVFKRODUVKDYHQRWHGWKHSRWHQWLDO

YDOXHRIZRUNLQJDSSURDFKLQJPRYHPHQWDQLPDWLRQSHGDJRJLFDOO\ 6RUDSXUH0RJXOO

)RON RUKDYHSRLQWHGWRDSSOLFDWLRQVRIPRWLRQDQLPDWLRQLQSURIHVVLRQDODQG

WHFKQLFDOFRQWH[WV -RKQVRQ6KHHKDQ.RVWHOQLFN6NMXOVWDG1RUYLFNHWDO

6SLQR]]R 3HUR]]D %XWDV,DUJXHLQWKHILUVWFKDSWHURIWKLVGLVVHUWDWLRQPRVW

H[DPSOHVRIWHDFKLQJIRFXVSULPDULO\RQWHFKQRORJLFDOGLIILFXOWLHVDQGRXUDGYLFHWREXGGLQJ

GHVLJQHUVWHQGVWRFHQWHURQUHDVRQVWRDYRLGPRWLRQDQLPDWLRQUDWKHUWKDQDUWLFXODWLQJLWV

UKHWRULFDOSRWHQWLDO,QWKHPHDQWLPHDSSOLFDWLRQVIRUPRWLRQDQLPDWLRQKDYHVKLIWHGIURPYLVXDO

H[SHULPHQWVDQGQRYHOWLHVWRFRPPRQIHDWXUHVRIDPDWHXUYLGHRDQGGDWDYLVXDOL]DWLRQ

0RUHRYHUPRWLRQDQLPDWLRQLVQRZDVWDQGDUGGHVLJQHOHPHQWLQXVHULQWHUIDFHVOHDGLQJDOO

PDMRUPRELOHSODWIRUPVDQGHYHQVRPHODUJHFRPSDQLHVWRLQFRUSRUDWHPRWLRQDQLPDWLRQLQWR

WKHLURIILFLDOVW\OHJXLGHOLQHV

*LYHQWKLVH[SDQGHGUROHLQPXOWLPHGLDGHVLJQ,KDYHDUJXHGWKDWZHPXVWGHYHORSD

UREXVWUKHWRULFDOO\JURXQGHGYRFDEXODU\IRUGHVFULELQJZKDWPRWLRQLVDQGZKDWLWFDQGR

7RZDUGVXFKDYRFDEXODU\,KDYHFRPSDUHGWKUHHEURDGVHWVRIGHVLJQJXLGHOLQHVIRUDQLPDWLRQ

WKHWZHOYHSULQFLSOHVRI'LVQH\DQLPDWLRQWKHSULQFLSOHVGHYHORSHGE\UHVHDUFKHUVLQ+&,DQG

WKHFXUUHQWJXLGHOLQHVIRUDQLPDWLRQLQPRELOHXVHULQWHUIDFHV7KURXJKWKLVFRPSDULVRQ,

KLJKOLJKWHGVHYHUDOWUHQGVLQWKHYRFDEXODU\RIPRWLRQGHVLJQPRVWQRWDEO\WKHWHQGHQF\WR

GHILQHHIIHFWLYHPRWLRQDVUHDOLVWLFRUQDWXUDO7KHSUREOHPZLWKWKHVHWHUPVDV,GLVFXVVHDUO\LQ

P\WKLUGFKDSWHULVWKDWWKH\UHO\RQWKHDVVXPSWLRQWKDWZHDOOVKDUHDVLQJOHXQVSRNHQ

GHILQLWLRQRIZKDWQDWXUDODQGRUUHDOLVWLFPRWLRQORRNVOLNHZKHQLQWUXWKWKHZD\ZHSHUFHLYH


DQGFRPSRVHPRWLRQLVFXOWXUDOO\DQGVRFLDOO\LQVFULEHG0RUHRYHU,FRQWHQGWKDWPDQ\

LQWHUIDFHVDQGYLVXDOL]DWLRQVDUHFRPSULVHGRIVLPSOHVKDSHVWH[WDQGRWKHUYLVXDOHOHPHQWVWKDW

GRQRWFRUUHVSRQGWR³UHDO´REMHFWVZLWK³QDWXUDO´PRYHPHQW

0\VROXWLRQWRWKLVSUREOHPDWLFWHQGHQF\WRZDUGUHDOLVPLVWRFRQQHFWXQGHUGHYHORSHG

WHUPVDQGFRQFHSWVIURPPRWLRQGHVLJQJXLGHOLQHVWRWKHUHVHDUFKRQYLVXDOUKHWRULFLQWHFKQLFDO

DQGSURIHVVLRQDOFRPPXQLFDWLRQ7KLVSURFHVVOHGPHWRWKHIRXUFDWHJRULHVGLVFXVVHGLQFKDSWHU

IRXUDIIHFWSHUVRQDOLW\FKRUHRJUDSK\SUHVHQFHDQGDFFHVVLELOLW\(DFKRIWKHVHFDWHJRULHV

UHODWHVWRDUKHWRULFDOFDSDFLW\RIDQLPDWLRQE\ZKLFK,PHDQDZD\RIOLQNLQJGHVLJQFKRLFHVWR

VLWXDWLRQVDQGDXGLHQFHV7KHXOWLPDWHJRDORIWKHVHFDWHJRULHVWKHQLVWRVKLIWGLVFXVVLRQVRI

DQLPDWLRQDQGPRWLRQDZD\IURPTXHVWLRQVOLNH³LVWKHPRWLRQQDWXUDO"´RU³ZKDWDQGWRZDUG

TXHVWLRQVVXFKDV³ZKDWNLQGVRIDIIHFWFDQZHFUHDWHZLWKWKHVHYLVXDOHOHPHQWV"´RU³ZKDWLV

WKHUDQJHRIVHQVRULDOFDSDFLWLHVLQRXULQWHQGHGDXGLHQFHV"´,PSRUWDQWO\WKLVVKLIWQRWRQO\OHDGV

WRPRUHULJRURXVDQDO\VLVRIPRWLRQJUDSKLFV LQFOXGLQJFULWLTXH EXWDOVRWRPRUHWKRXJKWIXO

DSSURDFKHVWRLQWHJUDWLQJDQLPDWLRQLQWRWHFKQLFDODQGSURIHVVLRQDOZULWLQJDVVLJQPHQWV:KHQ

ZRUNLQJZLWKPXOWLPRGDOSURMHFWVZHPXVWWHDFKVWXGHQWVKRZWRDUJXHIRUWKHLUGHVLJQVDQG

WKDWLWLVQRWHQRXJKWRVWDWHWKDW³LWORRNVJRRGZKHQWKHZRUGVIDGHRXW´ 6RUDSXUH 7KH

IRXUFDWHJRULHV,¶YHSURSRVHGVKRXOGKHOSVWXGHQWVWRGHVLJQPRWLRQZLWKDSXUSRVHWKDWH[WHQGV

EH\RQGWKHLUSHUVRQDOSUHIHUHQFHVSRWHQWLDOO\KHOSLQJWKHPFRQQHFWPRWLRQWRGLVFXVVLRQVRI

YLVXDOGHVLJQIURPRWKHUFRXUVHV$QG\HWDFWXDOO\WHDFKLQJPRWLRQGHVLJQKDVWDXJKWPHWKDWD

YRFDEXODU\VKLIWLVQRWHQRXJKWRPDNHDFODVVUXQVPRRWKO\ZKLFKLVZK\,GLVFXVVHGWKUHH

SHGDJRJLFDOVWUDWHJLHVHDUOLHULQWKLVFKDSWHU

7KRXJK,EHOLHYHP\UHVHDUFKKHUHEXLOGVYDOXDEOHLQWHUGLVFLSOLQDU\FRQQHFWLRQVEHWZHHQ

WKHPRWLRQGHVLJQDQGWHFKQLFDOSURIHVVLRQDOFRPPXQLFDWLRQLWDOVRVXJJHVWVWKHQHHGIRUIXUWKHU


UHVHDUFKWRVXSSRUWDQDO\WLFDODQGSHGDJRJLFDODSSURDFKHVWRPRWLRQ)RUH[DPSOHLQFKDSWHU,

DUJXHWKDWZHVKRXOGUHFRJQL]HKRZRXUUHDGLQJVRIWKHUHDOLWHVRIPRWLRQDUHVKDSHGE\RXU

FXOWXUDOVRFLDODQGHPERGLHGSHUVSHFWLYHVKRZHYHU,SURYLGHRQO\VKRUWH[SODQDWRU\H[DPSOHV

RIWKHVHFRQWLQJHQFLHV%XLOGLQJRIIWKLVGLVVHUWDWLRQZHVKRXOGUHPDLQFDXWLRXVRIWHUPVWKDW

PD\EHXVHGWRIUDPHPRWLRQDVDXQLYHUVDOKXPDQODQJXDJHDQGORRNIRUZD\VWKDWVXEWOH

GLIIHUHQFHVLQPRYHPHQWDFKLHYHGLIIHUHQWHIIHFWV%\WKHVDPHWRNHQZHVKRXOGH[DPLQHKRZ

FXOWXUDOO\FRQWLQJHQWUHDGLQJVRIPRYHPHQWDUHRIWHQGHSOR\HGWRMXVWLI\WKHDFWLRQVRIWKRVHLQ

SRZHUHVSHFLDOO\ZKHQLWLVDJDLQVWWKRVHZLWKSXUSRUWHGO\DJJUHVVLYHERGLHVLUUHVSRQVLEOH

ERGLHVRUFRQVHQWLQJERGLHV7KHUKHWRULFDOYDOHQFHRIPRYHPHQWLQWKHVHFDVHVEHFRPHVDOOWKH

PRUHLPSRUWDQWJLYHQWKHULVHRIYLGHRVXUYHLOODQFHDQGPRWLRQFDSWXUHWHFKQRORJ\

)URPDSHGDJRJLFDOSHUVSHFWLYHWKHSUHVVLQJTXHVWLRQXQDGGUHVVHGE\WKLVGLVVHUWDWLRQLV

WKHTXHVWLRQRIWHFKQRORJ\7KRXJK,ZDVSURYLGHGZLWKWKHFXUULFXODUWLPHDQGWKHLQVWLWXWLRQDO

UHVRXUFHVWRKDYHVWXGHQWVZRUNZLWK$GREH$IWHU(IIHFWV,DPDZDUHWKDWPDQ\WHDFKHUVZLOO

QRWKDYHDFFHVVWRWKHVDPHUHVRXUFHV7KLVLVQRWWRVD\WKDWWKHWRROVIRUPRWLRQGHVLJQRQO\

DSSHDULQSURIHVVLRQDOJUDGHSURJUDPV$IWHUDOOEDVLFSUHVHQWDWLRQWRROVVXFKDV3RZHU3RLQW

3UH]LDQG*RRJOH6OLGHVDOOLQFOXGHEDVLFIXQFWLRQVIRUHGLWLQJWKHPRWLRQRIYLVXDOPDWHULDOV

$GGLWLRQDOO\HYHQWKHGHVLJQWRROVIRUVXSSRVHGO\³VWDWLF´PHGLDVXFKDV$GREH3KRWRVKRSDQG

$GREH,Q'HVLJQQRZLQFOXGHWRROVIRUDGGLQJEDVLFPRYHPHQWVWRLPDJHVDQGGRFXPHQWV

+RZHYHUDVZLWKPRVWGHVLJQSURJUDPVSURIHVVLRQDOJUDGHWRROVDWWHPSWWRJLYHGHVLJQHUV

DEVROXWHIUHHGRPIRUFUHDWLQJVXEWOHSHUVRQDOLWLHVDQGFRPSOH[FKRUHRJUDSKLHVZKLOHOHVV

VRSKLVWLFDWHGWRROVRIWHQOLPLWGHVLJQHUVWRSUHSURJUDPPHGPRYHPHQWVDQGWHPSODWH

FKRUHRJUDSKLHV7KHSHUWLQHQWTXHVWLRQIRUWHFKQLFDODQGSURIHVVLRQDOFRPPXQLFDWRUVWKHQLVWR

DVVHVVWKHUDQJHRIDYDLODEOHVWUDWHJLHVIRUPRWLRQGHVLJQLQWKHVHQRQSURIHVVLRQDOSURJUDPV


(YHQLIWKHVHSURJUDPVSURYLGHVWXGHQWVZLWKDOLPLWHGVHWRIPRWLRQGHVLJQGHFLVLRQV,ZRXOG

H[SHFWWKDWWKHWHPSODWHVDQGSUHSURJUDPPHGRSWLRQVFDQVWLOODOORZVWXGHQWVWRGHVLJQPRWLRQ

UKHWRULFDOO\E\DWWHQGLQJWRSHUVRQDOLW\FKRUHRJUDSK\SUHVHQFHDQGRUDFFHVVLELOLW\

$V,KDYHDGYRFDWHGIRUDPRUHWKRXJKWIXOUKHWRULFDOO\JURXQGHGGHVLJQYRFDEXODU\IRU

PRWLRQDQGDQLPDWLRQ,KDYHWULHGWRDYRLGRYHUVWDWLQJWKHUKHWRULFDOSRWHQWLDORIPRWLRQ,WLV

HDV\WRIHWLVKL]HPRWLRQWRLPDJLQHWKDWGHVLJQLQJPRWLRQDOORZXVWRHQJDJHZLWKDGHHSHU

DVSHFWRIKXPDQH[SHULHQFHWKDQGHVLJQLQJWH[WRQDSDJH6XFKDQDUJXPHQWLVDWDVNIRUDQRWKHU

GLVVHUWDWLRQ0\FODLPLVQRWWKDWPRWLRQLVQHZDQGH[FLWLQJEXWUDWKHUWKDWLWLVVLPSO\PRUH

FRPPRQWKDQZHPD\WKLQNLQSURIHVVLRQDODQGWHFKQLFDOPXOWLPHGLD$FFRUGLQJO\,FODLPWKDW

PRWLRQLVPRVWDSSURSULDWHO\IUDPHGDVDVWDQGDUGGHVLJQHOHPHQWDNLQWRDUUDQJHPHQW

W\SRJUDSK\DQGFRORU7KLVLVQRWWRVD\WKDWPRWLRQFDQRUVKRXOGEHDSSOLHGWRHYHU\GHVLJQ

VLWXDWLRQ$IWHUDOOPDQ\GRFXPHQWVDUHPRVWHIIHFWLYHZKHQZULWWHQLQEODFNSW7LPHV1HZ

5RPDQW\SHRQZKLWHSDSHUEXWWKLVKDVQRWVWRSSHGXVIURPVWXG\LQJHPHUJLQJWUHQGVLQ

GRFXPHQWGHVLJQ2YHUWKHQH[WGHFDGHDPDWHXUGHVLJQVRIWZDUHZLOORQO\EHFRPHPRUH

SRZHUIXODQGIRUEHWWHUDQGIRUZRUVHSDUWRIWKLVH[WUDSRZHUZLOOPDNHLWHDVLHUIRUDPDWHXU

GHVLJQHUVWRLQFOXGHPRWLRQLQWKHLUGLJLWDOPDWHULDOV%\UHFRJQL]LQJWKHJURZWKRIPRWLRQ

GHVLJQDQGDWWHQGLQJWRLWVUKHWRULFDOFDSDFLWLHVZHFDQEHWWHUDGDSWRXUWHDFKLQJDQGVFKRODUVKLS

IRUSURIHVVLRQDOFRPPXQLFDWLRQLQWKHVWFHQWXU\


5()(5(1&(6

>$ODQ%HFNHU7XWRULDOV@ 0D\ 3ULQFLSOHVRIDQLPDWLRQ 2IILFLDO)XOO6HULHV >9LGHR

)LOH@5HWULHYHGIURPKWWSVZZZ\RXWXEHFRPZDWFK"Y X'TM,G,E)

$OOLVRQ7  %ODFNIDFHKDSS\IHHW7KHSROLWLFVRIUDFHLQPRWLRQFDSWXUHDQGDQLPDWLRQ

,Q'1RUWK%5HKDN 0'XII\ (GV 6SHFLDOHIIHFWV1HZKLVWRULHVWKHRULHV

FRQWH[WV

$PDUH1 0DQQLQJ$ 2FWREHU 6HHLQJW\SHIDFHSHUVRQDOLW\(PRWLRQDO5HVSRQVHV

WRIRUPDVWRQH,Q3URIHVVLRQDO&RPPXQLFDWLRQ&RQIHUHQFH ,3&& ,(((

,QWHUQDWLRQDO

$QGHUVRQ'  3URVXPHUDSSURDFKHVWRQHZPHGLDFRPSRVLWLRQ&RQVXPSWLRQDQG

SURGXFWLRQLQFRQWLQXXP.DLURV  

$QLPDWLRQ/LEUDU\  ,%0GHVLJQODQJXDJH5HWULHYHGIURP

KWWSVZZZLEPFRPGHVLJQODQJXDJHUHVRXUFHVDQLPDWLRQOLEUDU\

$QLPDWLRQ6W\OH*XLGHOLQHV  6DOHVIRUFHOLJKWQLQJGHVLJQV\VWHP5HWULHYHGIURP

KWWSVZZZOLJKWQLQJGHVLJQV\VWHPFRPJXLGHOLQHVDQLPDWLRQVW\OHJXLGHOLQHV

$QLPDWLRQ  $SSOHKXPDQLQWHUIDFHJXLGHOLQHV5HWULHYHGIURP

KWWSVGHYHORSHUDSSOHFRPLRVKXPDQLQWHUIDFHJXLGHOLQHVYLVXDOGHVLJQDQLPDWLRQ

$UROD./  7KHGHVLJQRIZHE7KHULVHRIWKHWHPSODWHWKHIDOORIGHVLJQ

&RPSXWHUVDQG&RPSRVLWLRQ  

%DO]RWWL-  6WRU\ERDUGLQJIRULQYHQWLRQ/D\HULQJPRGHVIRUPRUHHIIHFWLYHWUDQVIHULQD

PXOWLPRGDOFRPSRVLWLRQFODVVURRP-RXUQDORI%DVLF:ULWLQJ  

%DUNHU7  ,VVXHVLQVRIWZDUHGHYHORSPHQWLQFRPSRVLWLRQ&RPSXWHUVDQGFRPSRVLWLRQ

  


%DUWKHV5  5KHWRULFRIWKHLPDJH,PDJH0XVLF7H[W 6WHSKHQ+HDWK7UDQV 1HZ

<RUN+LOODQG:DQJ

%DUWRQ%) %DUWRQ06  7RZDUGDUKHWRULFRIYLVXDOVIRUWKHFRPSXWHU(UD7KH

7HFKQLFDO:ULWLQJ7HDFKHU  

%DUWRQ%) %DUWRQ06  ,GHRORJ\DQGWKHPDS7RZDUGDSRVWPRGHUQYLVXDO

SHVLJQSUDFWLFH3URIHVVLRQDO&RPPXQLFDWLRQ7KH6RFLDO3HUVSHFWLYH

%ODFNWRQ-  /LJKWQLQJ6NHWFK5HWULHYHGIURP

KWWSZZZFULWLFDOFRPPRQVRUJ0HPEHUVVDPPRQGQFOLSVEODFNWRQOLJKWQLQJ

DPSYLHZ

%UDVVHXU/(  9LVXDOL]LQJWHFKQLFDOLQIRUPDWLRQ$FXOWXUDOFULWLTXH %D\ZRRG? V

7HFKQLFDO&RPPXQLFDWLRQV6HULHV 

%ULDQ0  *RRJOH VQHZ PDWHULDOGHVLJQ 8,FRPLQJWR$QGURLG&KURPH26DQGWKH

ZHE(QJDGJHW$YDLODEOHDWKWWSVZZZHQJDGJHWFRPJRRJOHVQHZGHVLJQ

ODQJXDJHLVFDOOHGPDWHULDOGHVLJQ

%UHDX[50  $IWHU\HDUVRIPDJLF'LVQH\DQVZHUVLWVFULWLFVUHZULWHV$IULFDQ

$PHULFDQKLVWRU\DQGFDVKHVLQRQLWVUDFLVWSDVW-RXUQDORI$IULFDQ$PHULFDQ6WXGLHV

  

%RFKQHU6  7KHVRFLDOSV\FKRORJ\RIFURVVFXOWXUDOUHODWLRQV,Q6%RFKQHU (G 

&XOWXUHVLQFRQWDFW6WXGLHVLQFURVVFXOWXUDOLQWHUDFWLRQ

%RMH'0  6WRULHVRIWKHVWRU\WHOOLQJRUJDQL]DWLRQ$SRVWPRGHUQDQDO\VLVRI'LVQH\DV

³7DPDUD/DQG´$FDGHP\RIPDQDJHPHQWMRXUQDO  

%R\OH&  7KHUKHWRULFDOTXHVWLRQFRQFHUQLQJJOLWFK&RPSXWHUVDQG&RPSRVLWLRQ




%URRNV.  0RUH³VHULRXVO\YLVLEOH´UHDGLQJ0F&ORXG0F/XKDQDQGWKHYLVXDO

ODQJXDJHRI7KHPHGLXPLVWKHPDVVDJH&ROOHJH&RPSRVLWLRQDQG&RPPXQLFDWLRQ

  

%UXPEHUJHU(5  7KHUKHWRULFRIW\SRJUDSK\7KHSHUVRQDRIW\SHIDFHDQGWH[W

7HFKQLFDO&RPPXQLFDWLRQ  

%XUQV+  3DQGRUD VFKLS&RQFHUQVDERXWTXDOLW\&$3LSHOLQHV  

%ROWHU-' *UXVLQ5$  5HPHGLDWLRQ8QGHUVWDQGLQJQHZPHGLD0,73UHVV

%RXGOLQ-  7KHERG\DQLPDWLRQDQGWKHUHDO5DFHUHDOLW\DQGWKHURWRVFRSHLQ%HWW\

%RRS,Q$.RLYXQHQ 63DDVRQHQ (GV $IIHFWLYHHQFRXQWHUV5HWKLQNLQJ

HPERGLPHQWLQIHPLQLVWPHGLDVWXGLHV

&DOGZHOO-  -DSDQHVHW\SHIDFHSHUVRQDOLWLHV$UHW\SHIDFHSHUVRQDOLWLHVFRQVLVWHQWDFURVV

FXOWXUH",Q3URIHVVLRQDO&RPPXQLFDWLRQ&RQIHUHQFH ,3&& ,(((,QWHUQDWLRQDO



&DUQHJLH7$  ,QWHUIDFHDVH[RUGLXP7KHUKHWRULFRILQWHUDFWLYLW\&RPSXWHUVDQG

&RPSRVLWLRQ  

&KDQJ%: 8QJDU'  $QLPDWLRQIURPFDUWRRQVWRWKHXVHULQWHUIDFH3URFHHGLQJV

RIWKHWKDQQXDO$&0V\PSRVLXPRQ8VHU,QWHUIDFH6RIWZDUHDQG7HFKQRORJ\ 8,67

 

&RPEV'  %DQFRPLFVDQVIURPJPDLO&KDQJHRUJ5HWULHYHGIURP

KWWSVZZZFKDQJHRUJSJRRJOHEDQFRPLFVDQVIURPJPDLO

'HPSVH\0  &RPLFVDQVFULPLQDOV5HWULHYHGIURPKWWSZZZFRPLFVDQVFULPLQDOFRP

'ROPDJH-D\  $OORIRXUOLWHUDFLHVDVPXFKDVSRVVLEOHDOORIWKHWLPH"´3DSHUSUHVHQWHG

DWWKH&RQIHUHQFHRQ&ROOHJH&RPSRVLWLRQDQG&RPPXQLFDWLRQ$WODQWD*$


'RXJODV< +DUJDGRQ$  7KHSOHDVXUHSULQFLSOHLPPHUVLRQHQJDJHPHQWIORZ,Q

3URFHHGLQJVRIWKHHOHYHQWK$&0RQ+\SHUWH[WDQGK\SHUPHGLD

>'URS'D%R[@  'URSER[LQWURYLGHR5HWULHYHGIURP

KWWSVZZZ\RXWXEHFRPZDWFK"WLPHBFRQWLQXH  Y ZH75WFL$

(YDQV&  $HXORJ\IRUVNHXRPRUSKLVP0RWKHUERDUG5HWULHYHGIURP

KWWSVPRWKHUERDUGYLFHFRPHQBXVDUWLFOHQ]]S\]DHXORJ\IRUVNHXPRUSKLVP

)HHQEHUJ$  &ULWLFDOWKHRU\RIWHFKQRORJ\ 9RO 1HZ<RUN2[IRUG8QLYHUVLW\3UHVV

)O\QQ-  0RWLRQJUDSKLFVYVDQLPDWLRQ*HQXLQH5HWULHYHGIURP

KWWSVZZZZHDUHJHQXLQHFRPEORJPRWLRQJUDSKLFVYVDQLPDWLRQ

)RON0  $QLPDWHWRDGYRFDWHIRUQRQSURILWV.DLURV3UD[LV:LNL  

)XOFKHU5  ³7XPEOU´0DWHULDO'HVLJQ$ZDUGV$YDLODEOHDW

KWWSVGHVLJQJRRJOHFRPDUWLFOHVPDWHULDOGHVLJQDZDUGV

>*RRJOH@  *RRJOH'RFVLQSODLQHQJOLVK5HWULHYHGIURP

KWWSVZZZ\RXWXEHFRPZDWFK"Y H5T8(,+7($

*UDQQHOO&  :K\L26LVPDNLQJVRPHXVHUVVLFN7KH*XDUGLDQ5HWULHYHGIURP

KWWSVZZZWKHJXDUGLDQFRPWHFKQRORJ\VHSLRVPRWLRQVLFNQHVVQDXVHD

+DOO=  6FRWW)RUVWDOOILQDOO\ZHLJKVLQRQWKHIODWYHUVXVVNHXRPRUSKLFGHVLJQGHEDWH

720DF5HWULHYHGIURPKWWSVWRPDFFRPVFRWWIRUVWDOOGHVLJQGHEDWH

+DYH\0  0RGHOLQJRUFKHVWUDWLRQDQGFKRUHRJUDSK\62$&RRNERRN3DFNW3XEOLVKLQJ

/WG

+HDG9  'HVLJQLQJLQWHUIDFHDQLPDWLRQPHDQLQJIXOPRWLRQIRUXVHUH[SHULHQFH

5RVHQIHOG0HGLD


+HLGHU) 6LPPHO0  $QH[SHULPHQWDOVWXG\RIDSSDUHQWEHKDYLRU7KH$PHULFDQ

-RXUQDORI3V\FKRORJ\  

+XGJLQV/  +DWLQJFRPLFVDQVLVDEOHLVW7KH(VWDEOLVKPHQW5HWULHYHGIURP

KWWSVWKHHVWDEOLVKPHQWFRKDWLQJFRPLFVDQVLVDEOHLVWEFDGH

,QJUDP0  $V)DFHERRNIRFXVHVRQYLGHRHQJDJHPHQWIRUWRSSXEOLVKHUVGHFOLQHV

)RUWXQH5HWULHYHGIURPKWWSIRUWXQHFRPIDFHERRNYLGHRHQJDJHPHQW

,QJROG7  /LQHV$EULHIKLVWRU\5RXWOHGJH

-DFREV0  0RWLRQIRU8:3DSSV:LQGRZV'HY&HQWHU5HWULHYHGIURP

KWWSVPVGQPLFURVRIWFRPHQXVZLQGRZVXZSVW\OHPRWLRQ

-DFREV0  )DGHDQLPDWLRQV:LQGRZV'HY&HQWHU5HWULHYHGIURP

KWWSVGRFVPLFURVRIWFRPHQXVZLQGRZVXZSVW\OHPRWLRQIDGH

-RKQVRQ6KHHKDQ5 %DHKU&  9LVXDOVSDWLDOWKLQNLQJLQK\SHUWH[WV7HFKQLFDO

&RPPXQLFDWLRQ

-RKQVWRQ2 7KRPDV)  7KHLOOXVLRQRIOLIH'LVQH\DQLPDWLRQ'LVQH\(GLWLRQV

-RQHV&  &KXFN$PXFN7KHOLIHDQGWLPHVRIDQDQLPDWHGFDUWRRQLVW0DFPLOODQ

-RQHV-  ,QIRUPDWLRQJUDSKLFVDQGLQWXLWLRQ+HXULVWLFVDVDWHFKQHIRUYLVXDOL]DWLRQ

-RXUQDORI%XVLQHVVDQG7HFKQLFDO&RPPXQLFDWLRQ  

-XGDK6  :KDWLVVNHXRPRUSKLVP"%%&1HZV0DJD]LQH5HWULHYHGIURP

KWWSZZZEEFFRPQHZVPDJD]LQH

.DGY\'  :K\\RXKDWHFRPLFVDQV'HVLJQIRU!KDFNHUV5HWULHYHGIURP

KWWSVGHVLJQIRUKDFNHUVFRPEORJFRPLFVDQVKDWH

.RVWHOQLFN& +DVVHWW0  6KDSLQJLQIRUPDWLRQ7KHUKHWRULFRIYLVXDOFRQYHQWLRQV

6,83UHVV


.RVWHOQLFN&  7KHUHHPHUJHQFHRIHPRWLRQDODSSHDOVLQLQWHUDFWLYHGDWDYLVXDOL]DWLRQ

7HFKQLFDO&RPPXQLFDWLRQ  

/DQKDP5$  7KHHFRQRPLFVRIDWWHQWLRQ6W\OHDQGVXEVWDQFHLQWKHDJHRI

LQIRUPDWLRQ8QLYHUVLW\RI&KLFDJR3UHVV

/DXHU&  &RQWHQGLQJZLWKWHUPV³PXOWLPRGDO´DQG³PXOWLPHGLD´LQWKHDFDGHPLFDQG

SXEOLFVSKHUHV&RPSXWHUVDQG&RPSRVLWLRQ  

/HKPDQ&3  7KHFRORUHGFDUWRRQ%ODFNUHSUHVHQWDWLRQLQ$PHULFDQDQLPDWHGVKRUW

ILOPV8QLYRI0DVVDFKXVHWWV3UHVV

/HH&  $SSOHL26FDXVLQJPRWLRQVLFNQHVVIRUVRPHXVHUV8QLWHG3UHVV,QWHUQDWLRQDO

5HWULHYHGIURPKWWSVZZZXSLFRP6FLHQFHB1HZV7HFKQRORJ\$SSOHL26

FDXVLQJPRWLRQVLFNQHVVIRUVRPHXVHUV

/LWWOH$ )HEUXDU\ 6WRU\ERDUGLQJLQWKHVRIWZDUHGHVLJQSURFHVV8;0DJD]LQH

5HWULHYHGIURPKWWSVX[PDJFRPDUWLFOHVVWRU\ERDUGLQJLQWKHVRIWZDUHGHVLJQSURFHVV

/LX/ $SULO 9LGHRPLJKWEH\RXUEHVWEHWZLWKIDFHERRN VDOJRULWKPXSGDWH

(QWUHSUHQHXU5HWULHYHGIURPKWWSVZZZHQWUHSUHQHXUFRPDUWLFOH

0DFNLHZLF]-2  +RZWRXVHILYHOHWWHUIRUPVWRJDXJHDW\SHIDFH VSHUVRQDOLW\$

UHVHDUFKGULYHQPHWKRG-RXUQDORI7HFKQLFDO:ULWLQJDQG&RPPXQLFDWLRQ  



0DFNLHZLF]-  $XGLHQFHSHUFHSWLRQVRIIRQWVLQSURMHFWHG3RZHU3RLQWWH[WVOLGHV

7HFKQLFDO&RPPXQLFDWLRQ  

0DGGHQ1)/WUXHVWHSORFRPRWLRQRYHUYLHZ 2FWREHU 5HWULHYHGIURP

KWWSVZZZHDVSRUWVFRPPDGGHQQIOQHZVWUXHVWHSSOD\HUFRQWURORYHUYLHZ


0DQRYLFK/  $IWHUHIIHFWVRUYHOYHWUHYROXWLRQLQPRGHUQFXOWXUH3DUW5HWULHYHG

IURPKWWSPDQRYLFKQHWLQGH[SKSSURMHFWVDIWHUHIIHFWVSDUW

0DQRYLFK/  $IWHUHIIHFWVRUYHOYHWUHYROXWLRQLQPRGHUQFXOWXUH3DUW5HWULHYHG

IURPKWWSPDQRYLFKQHWLQGH[SKSSURMHFWVDIWHUHIIHFWVSDUW

0DQRYLFK/  7KHODQJXDJHRIQHZPHGLD0,7SUHVV

0DWHULDO'HVLJQ*XLGHOLQHV D ,QWURGXFWLRQ5HWULHYHGIURP

KWWSVZZZJRRJOHFRPGHVLJQVSHFPDWHULDOGHVLJQLQWURGXFWLRQKWPO

0DWHULDO'HVLJQ*XLGHOLQHV E &KRUHRJUDSK\5HWULHYHGIURP

KWWSVPDWHULDOLRJXLGHOLQHVPRWLRQFKRUHRJUDSK\KWPO

0DWHULDO'HVLJQ*XLGHOLQHV F &UHDWLYH&XVWRPL]DWLRQ5HWULHYHGIURP

KWWSVPDWHULDOLRJXLGHOLQHVPRWLRQFUHDWLYHFXVWRPL]DWLRQKWPO

0DWHULDO'HVLJQ*XLGHOLQHV G 0DWHULDO0RWLRQ5HWULHYHGIURP

KWWSVPDWHULDOLRJXLGHOLQHVPRWLRQPDWHULDOPRWLRQKWPO

0DWHULDO'HVLJQ*XLGHOLQHV H $FFHVVLELOLW\±6RXQGDQG0RWLRQ5HWULHYHGIURP

KWWSVPDWHULDOLRGHVLJQXVDELOLW\DFFHVVLELOLW\KWPOFRPSRVLWLRQ

0RJXOO6 'HFHPEHU ,QWHJUDWLQJRQOLQHLQIRUPDWLYHYLGHRVLQWRWHFKQLFDO

FRPPXQLFDWLRQVHUYLFHFRXUVHV,(((7UDQVDFWLRQV2Q3URIHVVLRQDO&RPPXQLFDWLRQ

  

1LHOVHQ- 0D\ 2ULJLQDOWRSPLVWDNHVLQZHEGHVLJQ1LHOVHQ1RUPDQ*URXS

5HWULHYHGIURPKWWSVZZZQQJURXSFRPDUWLFOHVRULJLQDOWRSWHQPLVWDNHVLQZHE

GHVLJQ

1LHOVHQ- 2FFWREHU 7RSWHQZHEGHVLJQPLVWDNHVRI1LHOVHQ1RUPDQ*URXS

5HWULHYHGIURPKWWSVZZZQQJURXSFRPDUWLFOHVWRSWHQZHEGHVLJQPLVWDNHVRI


1LHOVHQ-  )XOOVLWHYVPRELOHVLWH1LHOVHQ1RUPDQ*URXS$YDLODEOHDW

KWWSVZZZQQJURXSFRPDUWLFOHVPRELOHVLWHYVIXOOVLWH

1RYLFN'5KRGHV- :HUW: 2FWREHU 7KHFRPPXQLFDWLYHIXQFWLRQVRIDQLPDWLRQ

LQXVHULQWHUIDFHV,Q3URFHHGLQJVRIWKHWK$&0LQWHUQDWLRQDOFRQIHUHQFHRQWKHGHVLJQ

RIFRPPXQLFDWLRQ SS $&0

2ODYDUULD3HGUR  .HDQX5HHYHV¶VILJKWFKRUHRJUDSKHUWDONHGWRXVDERXW -RKQ:LFN 

9LFH5HWUHLYHGIURPKWWSILJKWODQGYLFHFRPEORJZHWDONHGWRNHDQXUHHYHVILJKW

FRUHRJUDSKHURQKLVQHZILOPMRKQZLFN

2OVHQ/&)LQQHJDQ&$ +RSH'6  9LVXDOUKHWRULF$UHDGHULQFRPPXQLFDWLRQ

DQG$PHULFDQFXOWXUH6DJH

3HZ5HVHDUFK&HQWHU 'HFHPEHU $PHULFD¶VSODFHLQWKHZRUOG>9LGHRILOH@5HWULHYHG

IURPKWWSVZZZ\RXWXEHFRPZDWFK"Y WG[K'+F))F W V

3RUWHU-(  5HFRYHULQJGHOLYHU\IRUGLJLWDOUKHWRULF&RPSXWHUVDQG&RPSRVLWLRQ  



3URSHQ$'  /RFDWLQJYLVXDOPDWHULDOUKHWRULFV7KHPDSWKHPLOODQGWKH*363DUORU

3UHVV

5LFH5DQG%DOO&  5HPHGLDWLQJWKHWH[W5HDGLQJPXOWLPRGDOWH[WV.DLURV  

5RVLQVNL3 6TXLUH0  6WUDQJHEHGIHOORZV+XPDQFRPSXWHULQWHUDFWLRQLQWHUIDFH

GHVLJQDQGFRPSRVLWLRQSHGDJRJ\&RPSXWHUVDQG&RPSRVLWLRQ  

6DOLQDV&  7HFKQLFDOUKHWRULFLDQVDQGWKHDUWRIFRQILJXULQJLPDJHV7HFKQLFDO

&RPPXQLFDWLRQ4XDUWHUO\  


6DOD]DU/+$/DFHUGD71XQHV-9 YRQ:DQJHQKHLP&*  $V\VWHPDWLF

OLWHUDWXUHUHYLHZRQXVDELOLW\KHXULVWLFVIRUPRELOHSKRQHV,QWHUQDWLRQDO-RXUQDORI

0RELOH+XPDQ&RPSXWHU,QWHUDFWLRQ ,-0+&,   

6HOIH&/ 6HOIH5-  7KHSROLWLFVRIWKHLQWHUIDFH3RZHUDQGLWVH[HUFLVHLQ

HOHFWURQLFFRQWDFW]RQHV&ROOHJHFRPSRVLWLRQDQGFRPPXQLFDWLRQ  

6NMXOVWDG6  &RPPXQLFDWLRQGHVLJQDQGPRWLRQJUDSKLFVRQWKH:HE-RXUQDORIPHGLD

SUDFWLFH  

6RUDSXUH0  0RYLQJZULWLQJ$FULWLFDODSSURDFKWRDQLPDWLRQLQFRPSRVLWLRQ,Q%

+DZN22YLHGR -:DONHU (GV 'LJLWDO7RROVLQ&RPSRVLWLRQ6WXGLHV&UHVVNLOO

1HZ-HUVH\+DPSWRQ3UHVV

6SLQLOOR&* 3HUR]]D5  $QLQWHUDFWLYHJXLGHWRGHVLJQDQLPDWHGYLVXDOLQVWUXFWLRQV

LQ%UD]LO,Q3URFHHGLQJVRIWKHWK,QWHUQDWLRQDO&RQIHUHQFHRI'HVLJQ8VHU

([SHULHQFHDQG8VDELOLW\ '8;8 ±

6WXGHQW(QUROOPHQW  3XUGXH8QLYHUVLW\XQGHUJUDGXDWHDGPLVVLRQV5HWULHYHGIURP

KWWSVZZZDGPLVVLRQVSXUGXHHGXDFDGHPLFVHQUROOPHQWSKS

6XOOLYDQ3  +XPDQFRPSXWHULQWHUDFWLRQSHUVSHFWLYHVRQZRUGSURFHVVLQJLVVXHV

&RPSXWHUVDQG&RPSRVLWLRQ  

6XOOLYDQ3  3UDFWLFLQJVDIHYLVXDOUKHWRULFRQWKHZRUOGZLGHZHE&RPSXWHUVDQG

&RPSRVLWLRQ  

7KRPDV%+ &DOGHU3  $SSO\LQJFDUWRRQDQLPDWLRQWHFKQLTXHVWRJUDSKLFDOXVHU

LQWHUIDFHV$&07UDQVDFWLRQVRQ&RPSXWHU+XPDQ,QWHUDFWLRQ 72&+,   




7UDSS0 <DVPLQ5 -XO\ $GGUHVVLQJDQLPDWHGWUDQVLWLRQVDOUHDG\LQPRELOHDSS

VWRU\ERDUGV,Q,QWHUQDWLRQDO&RQIHUHQFHRI'HVLJQ8VHU([SHULHQFHDQG8VDELOLW\



9LOOLQJHU6 1RY :LQGRZV7KHELJJHVWSUREOHPVVRIDU,7:RUOG5HWUHLYHG

IURPKWWSVZZZLWZRUOGFRPDUWLFOHHQWHUSULVHVRIWZDUHZLQGRZVWKH

ELJJHVWSUREOHPVVRIDUKWPO

:DVVHUPDQ$, 1RYHPEHU 6RIWZDUHHQJLQHHULQJLVVXHVIRUPRELOHDSSOLFDWLRQ

GHYHORSPHQW,Q3URFHHGLQJVRIWKH)6(6'3ZRUNVKRSRQ)XWXUHRIVRIWZDUH

HQJLQHHULQJUHVHDUFK

:LOOLDPV5  7KHQRQGHVLJQHU VGHVLJQERRNGHVLJQDQGW\SRJUDSKLFSULQFLSOHVIRUWKH

YLVXDOQRYLFH3HDFKSLW3UHVV

:LOOLDPV$ )HEUXDU\ )UHVKIURPWKHLQWHUQHW¶VDWWLF7KH1HZ<RUN7LPHV5HWULHYHG

IURPKWWSZZZQ\WLPHVFRPIDVKLRQFRPPRQRQHDUO\LQWHUQHWJLIILOHV

PDNHFRPHEDFNKWPO

:RUVWDOO7 6HS $SSOH VL26ZHOOLWZDVWLPHIRUVNHXRPRUSKLVPWRGLH)RUEHV

5HWULHYHGIURPKWWSVZZZIRUEHVFRPVLWHVWLPZRUVWDOODSSOHVLRVZHOOLW

ZDVWLPHIRUVNHXRPRUSKLVPWRGLHFID

:\VRFNL$  7KHVWLFN\HPEUDFHRIEHDXW\2QVRPHIRUPDOUHODWLRQVLQWHDFKLQJDERXW

WKHYLVXDODVSHFWVRIWH[WV,Q:ULWLQJQHZPHGLD7KHRU\DQGDSSOLFDWLRQVIRUH[SDQGLQJ

WKHWHDFKLQJRIFRPSRVLWLRQ8QLYHUVLW\3UHVVRI&RORUDGR

:\VRFNL$) -DVNHQ-,  :KDWVKRXOGEHDQXQIRUJHWWDEOHIDFH«&RPSXWHUVDQG

&RPSRVLWLRQ  


<HUJHDX0HWDO  0XOWLPRGDOLW\LQPRWLRQ'LVDELOLW\DQGNDLURWLFVSDFHV.DLURV$

-RXUQDORI5KHWRULF7HFKQRORJ\DQG3HGDJRJ\  5HWULHYHGIURP

KWWSNDLURVWHFKQRUKHWRULFQHWFRYHUZHE\HUJHDXHWDOSDJHVDFFHVVKWPO

=GHQHN6  ³-XVWUROO\RXUPRXVHRYHUPH´'HVLJQLQJYLUWXDOZRPHQIRUFXVWRPHU

VHUYLFHRQWKHZHE7HFKQLFDO&RPPXQLFDWLRQ4XDUWHUO\  

=GHQHN6  $FFHVVLEOHSRGFDVWLQJ&ROOHJHVWXGHQWVRQWKHPDUJLQVLQWKHQHZPHGLD

FODVVURRP&RPSXWHUVDQG&RPSRVLWLRQ2QOLQH


$33(1',;$08/7,0(',$:5,7,1*6<//$%86











$33(1',;%5+(725,&$/$1$/<6,6$66,*10(176+((7

$VVLJQPHQW5KHWRULFDO$QDO\VLV
$VVLJQPHQW5KHWRULFDO$QDO\VLV
2YHUYLHZ

)RUWKHILUVWHVVD\RIWKHVHPHVWHU\RXZLOOEHUHTXLUHGWRZULWHDUKHWRULFDODQDO\VLVRIDPXOWLPHGLD
DUWLIDFW$VZLWKPRVWUKHWRULFDODQDO\VHVWKHJRDOLVWROLQNWKHZKDWRIWKHPXOWLPHGLDWH[WZLWKWKHZK\
+RZLVWKHDUWLIDFWRUJDQL]HGDQGZK\":KDWYLVXDOVDUHXVHGDORQJZLWKWKHWH[WDQGZK\":KDWLVWKH
WRQHRIWKHDUWLIDFWDQGZK\":KDWPHGLXPZDVXVHGDQGZK\"$V\RXDQVZHUWKHVHYDULRXV³ZK\´
TXHVWLRQV\RXZLOOQHHGWRFRQQHFWWKHDUWLIDFWWRWKHYDULRXVDXGLHQFHVDQGSXUSRVHVLQWKHUKHWRULFDO
VLWXDWLRQ

%\GHVFULELQJDQGDQDO\]LQJWKHFRPSRVLWLRQDOIDFWRUVRIDPXOWLPHGLDWH[W\RXZLOOVWDUWWREXLOGDQ
LQVWLQFWIRUZKDWPDNHVDQHIIHFWLYHXVHRIPXOWLPHGLD,H[SHFWWKHILQDOHVVD\WREHDSSUR[LPDWHO\
ZRUGVLQOHQJWKWKRXJK,FDQVHHWKHVHSDSHUVH[SDQGLQJEH\RQGWKDWOLPLW

*RDOV

'XULQJWKLVSURMHFW\RXZLOOOHDUQ
• +RZWRLGHQWLI\GLVWLQFWFRPSRVLWLRQDOHOHPHQWVLQDPXOWLPHGLDWH[W
• +RZWROLQNFRPSRVLWLRQDOIDFWRUVWRWKHDXGLHQFHSXUSRVHDQGGHOLYHU\RIDPXOWLPHGLD
WH[W
• +RZWRHYDOXDWHWKHHIIHFWLYHQHVVRIDSDUWLFXODUPXOWLPHGLDWH[WZLWKLQDSDUWLFXODU
UKHWRULFDOVLWXDWLRQ

6WHS2QH&KRRVLQJ:KDWWR$QDO\]H

)RUWKLVDVVLJQPHQW\RXKDYHWKHIUHHGRPWRDQDO\]HDQ\PXOWLPHGLDWH[WWKDWPLJKWLQWHUHVW\RX
,HQFRXUDJH\RXWRFKRRVHDQH[DPSOHRIPRWLRQJUDSKLFV DYLGHRDQDQLPDWHGLQIRJUDSKLFDQ
DQLPDWHG JLI NLQHWLF W\SRJUDSK\ HWF  EXW WKHUH DUH PDQ\ RWKHU DYHQXHV WKDW FRXOG EH HTXDOO\
IUXLWIXO

<RXPLJKWZDQWWRGRDZHEVLWHDQDO\VLVSHUKDSVORRNLQJDWWKHRQOLQHSRUWIROLRRIDVWXGHQWRU
ZRUNLQJSURIHVVLRQDORUWKHZHEVLWHRIDFRPSDQ\\RX¶UHLQWHUHVWHGLQZRUNLQJIRURUWKHZHE
VLWHRIDORFDOQRQSURILWRUJDQL]DWLRQ

<RXPLJKWZDQWWRIRFXVRQWKHUKHWRULFLQYROYHGLQDYLGHRJDPHHLWKHULQDSDUWLFXODUVFHQHRU
WKURXJKWKHJDPHSOD\DVDZKROH

6WHS7ZR&KRRVLQJDQ2UJDQL]DWLRQDO)UDPHZRUNIRU$QDO\VLV

1H[WGHFLGHRQDIUDPHZRUNIRUDVVHVVLQJWKHSLHFHRIGLJLWDOPHGLD\RX¶YHFKRVHQWRDQDO\]H
(VVHQWLDOO\WKLVLVDIUDPHZRUN\RXZLOODSSO\WRVWUXFWXUH\RXUDQDO\VLVDQGWRVKDSH\RXUFODLPV
DQGFRQFOXVLRQV<RXPLJKWVHOHFWDIUDPHZRUNVXFKDV



• )RFXVLQJRQDXGLHQFHV,QWKLVPHWKRG\RXZRXOGVWDUWE\DVVHVVLQJWKHDXGLHQFHV
SOXUDO IRUWKHPHGLDDUWLIDFWFRQVLGHULQJERWKWKHLQWHQGHGDQGXQLQWHQGHGDXGLHQFHVRI
WKHDUWLIDFW'UDZLQJRQFRQFUHWHHYLGHQFH\RXZRXOGWKHQHYDOXDWHWKHHIIHFWLYHQHVVRI
WKHDUWLIDFWIRUSULPDU\VHFRQGDU\DQGXQLQWHQGHGDXGLHQFHV7KHJUHDWHUQXPEHURI
VSHFLILFDXGLHQFHVLQYROYHGWKHEURDGHUWKHDSSHDO

• )RFXVLQJRQSXUSRVH,QWKLVPHWKRG\RXZRXOGRUJDQL]HWKHSDSHUE\ORRNLQJDW
LGHQWLI\LQJWKHFHQWUDOSXUSRVHRIWKHDUWLIDFWWUDFLQJKRZWKHGHVLJQRIWKHDUWLIDFWKHOSV
LWWRDFKLHYHWKHSXUSRVH RUQRW ,QWKLVFDVH\RXUDUJXPHQWPLJKWEHWKDWFHUWDLQGHVLJQ
HOHPHQWVDUHPRUHHVVHQWLDOWRDFKLHYLQJWKHSXUSRVHDQGVRPHDUHOHVVHVVHQWLDO

• )RFXVLQJRQWKHDXWKRU,I\RXFDQQDUURZGRZQZKRVSHFLILFDOO\FUHDWHGWKHDUWLIDFW\RX
PLJKWIRFXV\RXUDQDO\VLVRQWKHZD\RQHZULWHUFUHDWRUGHYHORSHUW\SLFDOO\GHSOR\V
GHVLJQHOHPHQWVDQGZKHWKHUWKLVSDUWLFXODUDUWLIDFWLVXVXDORUXQXVXDOIRUWKHLUSDUWLFXODU
VW\OH,QWKLVFDVH\RXUSDSHUZRXOGH[SODLQKRZWKHHWKRVRIWKHDXWKRUFRQQHFWVWRWKH
HWKRVRIWKHPHGLDDUWLIDFW

6WHS7KUHH5HVHDUFK

0RVW RI \RXU DQDO\VLV VKRXOG FRQVLVW RI FRQFUHWH GHVFULSWLRQV RI WKH DUWLIDFW DQG LWV UKHWRULFDO
SXUSRVHV+RZHYHU\RXDOVRZLOOQHHGWRGRUHVHDUFKWRIXOO\XQGHUVWDQGWKHFRQWH[WRIWKHDUWLIDFW
DQGWREDFNXS\RXUDUJXPHQW7KLVUHVHDUFKPD\LQFOXGH
• %DVLFLQIRUPDWLRQDERXWZKHUHZKHQKRZWKHDUWLIDFWZDVPDGH
• :KHWKHUWKHDUWLIDFWEHORQJVWRDSDUWLFXODUFROOHFWLRQRUDXWKRULDOVW\OH
• 5HYLHZVRIWKHDUWLIDFW
• &RPPHQWVRQWKHDUWLIDFW
• )LQGLQJDOWHUQDWHH[DPSOHVWRGHPRQVWUDWHKRZWKHFKRVHQDUWLIDFWFRXOGKDYHEHHQ
PRUHOHVVHIIHFWLYH

$1RWHRQ)OH[LELOLW\

$V\RXFDQVHHIURPWKHSURPSWWKHIRFXVRIWKLVSDSHULVRSHQWRDQXPEHURIGLIIHUHQWGLUHFWLRQV
,HQFRXUDJH\RXWRILQGDPHGLDDUWLIDFWWKDWLQWHUHVWV\RXEHFDXVHWKHPRUHLQWHUHVWHG\RXDUHWKH
GHHSHU\RXUDQDO\VLVZLOOEH

*UDGLQJDQG7LPHOLQH

$OOSDSHUVZLOOEHJUDGHGDQGUHWXUQHGZLWKLQWZRZHHNVRIWKHLUVXEPLVVLRQ$OOSDSHUVZLOOEH
VXEPLWWHGYLDWKH%ODFNERDUG³6XEPLWWDEOHV´IROGHU7KHGRFXPHQWPXVWEHVXEPLWWHGE\FODVV
WLPHRQ-DQXDU\WK

*UDGLQJIRUWKLVSURMHFWZLOOEHEDVHGRQWKHGHSWKDQGFODULW\RI \RXUDQDO\VLV$V ,UHDG \RXU
SDSHU,ZLOODVNWKHIROORZLQJTXHVWLRQV

• 'RHVWKHZULWHUSURYLGHGHVFULSWLYHDQGFRQWH[WXDOEDFNJURXQGDERXWZKDWWKH
PXOWLPHGLDWH[WLVDQGZKHUHLWFRPHVIURP"


• ,VWKHUHFOHDUHYLGHQFHWKDWWKHZULWHUKDVUHVHDUFKHGWKHEDFNJURXQGRIWKHPXOWLPHGLD
WH[W"
• 'RHVWKHZULWHUFRQQHFWWKHWH[W V WRDSDUWLFXODUDXGLHQFH",VWKLVFRQQHFWLRQEDFNHGXS
XVLQJFRQFUHWHHYLGHQFHIURPWKHWH[W"
• 'RHVWKHZULWHUPDNHFODLPVDERXWWKHHIIHFWLYHQHVVRULQHIIHFWLYHQHVVRIWKHPXOWLPHGLD
WH[W",VWKHUHHQRXJKHYLGHQFHWRVXSSRUWWKHVHFODLPV"
• $UHYHUEVDQGQRXQVGLUHFWDQGVSHFLILF"$UHWKHVHQWHQFHVWUXFWXUHVFOHDU"
• ,VWKHSDSHUFOHDQO\IRUPDWWHGLQ0/$$3$RUDQRWKHUFRPPRQPRGHRIIRUPDWWLQJ"
• $UHWKHUHDQ\JUDPPDWLFDORUV\QWDFWLFDOHUURUVWKDWPDNHLWKDUGWRXQGHUVWDQGWKH
DXWKRU¶VSRLQW"

7KLVSDSHUZLOOEHJUDGHGRQDVFDOHRISRLQWV,WLVZRUWKRI\RXUILQDOJUDGH


$33(1',;&7+,6967+$7(;&(5&,6(

3XUSRVH

7KLVVHPHVWHU\RXZLOOEHXVLQJ$IWHU(IIHFWVWRFUHDWHPRWLRQJUDSKLFVYLGHRV,OOXVWUDWRULVQRWD
QHFHVVDU\WRROIRUZRUNLQJZLWK$IWHU(IIHFWVEXWLWLVHVVHQWLDOIRUSODQQLQJDQGGUDIWLQJLQLWLDOV
FRPSRVLWLRQV%\WKHHQGRIWKLVDFWLYLW\ \RXVKRXOGEHDEOHWRFUHDWHEDVLFLFRQVDGGFRORUWR
WKHPDQGH[SRUWWKHPIURP$L

*RDOV

• %HDEOHWRFUHDWHH[SRUWILOHVLQ$GREH,OOXVWUDWRU
• %HDEOHWRFUHDWHEDVLFVKDSHVLQ$GREH,OOXVWUDWRU
• %HDEOHWRLPSRUWDQGPDQLSXODWHLFRQV
• %HDEOHWRHGLWWKHILOODQGVWURNHRIGHVLJQV
• 3UDFWLFHXVLQJYLVXDOUKHWRULFWRFRPPXQLFDWH

,I\RXDOUHDG\KDYHDILUPKDQGOHRQWKHEDVLFIXQFWLRQVRILOOXVWUDWRUQRZLVDWLPHWRUHIUHVK\RXU
PHPRU\DQGSOD\DURXQGZLWKWKHSURJUDPDELW

<RX:LOO6XEPLW

• ORJRIURPWKH$GREH3L]]D7XWRULDO
• ³7KLV1RW7KDW´9LVXDO
 
3L]]D7XWRULDO'LUHFWLRQV

7KHOLQNEHORZOHDGVWRDWXWRULDOIURPWKH$GREHZHEVLWHRQKRZWRFUHDWHDFRORUIXOLFRQRID
SL]]DVOLFH
KWWSVKHOS[DGREHFRPLOOXVWUDWRUKRZWRORJR
GHVLJQKWPO"SOD\OLVW FF[YFROOHFWLRQSURGXFWLOOXVWUDWRUVHJPHQWGHVLJQHUH[SOHYHOEHJLQQHUD
SSODXQFKRULHQWDWLRQFROOHFWLRQFF[MV

)ROORZDORQJZLWKWKHWXWRULDOWROHDUQWKHEDVLFVRIVKDSHVOLQHVSDWKVDQGFRORU$WWKHHQGRI
WKHWXWRULDOH[SRUWWKHLPDJHDVDSQJILOH7KLVLVWKHILOH\RXZLOOVXEPLWWR%ODFNERDUG>1RWH
,I\RXDUHDQDGYDQFHGXVHURI,OOXVWUDWRU\RXKDYHWKHIUHHGRPWRFUHDWHVRPHRWKHUNLQGRI
ORJRFRQVWUXFWHGIURPPXOWLSOHVKDSHV  @









7KLV1RW7KDW'LUHFWLRQV 

5HYLHZ4XDUW]$UWLFOH

5HDG WKH TXDUW] DUWLFOH DERXW WKH ³FXOWXUDO GLIIHUHQFHV EHWZHHQ HDVW DQG ZHVW´
KWWST]FRPWKHFXOWXUDOGLIIHUHQFHVEHWZHHQHDVWDQGZHVWDFFRUGLQJWRRQH
DUWLVW7KHVHFRPSDULVRQVDUHQ¶WUHYROXWLRQDU\ DQGWKHELQDU\FXOWXUDOFRPSDULVRQLVYHU\
FRQFHUQLQJ EXWWKH\GRRIIHUDQH[DPSOHRIPLQLPDOLFRQEDVHGGHVLJQVWKDWZHFDQXVH
WRSUDFWLFHFUHDWLQJPDWHULDOV

7KLQN RI D FRPSDULVRQ EHWZHHQ \RX DQG VRPH RWKHU JURXS RU SHUVRQ ,W FRXOG EH D
FRPSDULVRQ EHWZHHQ \RX DQG \RXU IULHQGV EHWZHHQ \RX DQG PRVW 3XUGXH VWXGHQWV RU
EHWZHHQ\RXDQGDIULHQGRI\RXUV+RZZRXOG\RXUHSUHVHQWWKRVHGLIIHUHQFHVZLWKWKHVH
NLQGVRIVLPSOHLFRQV"7KDW¶VZKDWZH¶UHXSWRKHUH

&UHDWHWKH%DFNJURXQG

• &UHDWHDQHZFDQYDVWKDW¶VORQJHUWKDQLWLVZLGH ,PDGHPLQH[ 
• 8VHWKH&UHDWH6KDSHWRROWRFUHDWHUHFWDQJOHV2QHVKRXOGWDNHXSWKHHQWLUH
ZLGWKRIWKHFDQYDVDWWKHWRSRIWKHFDQYDV7KHRWKHUWZRVKRXOGGLYLGHWKH
FDQYDVLQWROHIWDQGULJKWSRUWLRQV
• &KDQJHWKHILOOFRORURIWKHWRS
UHFWDQJOHWREODFN&KDQJHWKHWZR
ERWWRPUHFWDQJOHVWRFRQWUDVWLQJ
FRORUV
• $WWKLVSRLQW\RXUSURMHFWVKRXOGORRN OLNH
WKLV


8VH,FRQVWR0DNHD&RPSDULVRQ

• 8VHWKHEDVLFGUDZLQJDQGVKDSHFUHDWLRQWRROVWRHVWDEOLVKDYLVXDOFRPSDULVRQ
EHWZHHQWZRSHUVSHFWLYHVRUSRLQWVRIYLHZ7U\WRUHVLVWXVLQJZRUGVRUQXPEHUV
WRDVVLVW\RX
• ,I\RX¶UHVWUXJJOLQJWRFUHDWH\RXURZQLFRQV\RXPD\XVHDVHUYLFHOLNH7KH
1RXQ3URMHFWWRLPSRUWLFRQV DVUR\DOW\IUHH69*V LQWR\RXUGHVLJQV
ƒ KWWSVWKHQRXQSURMHFWFRP

• ,I\RX¶UHVWUXJJOLQJWRWKLQNRIDFRPSDULVRQMXVWPLPLFRQHRIWKH
FRPSDULVRQVVKRZQLQWKH4XDUW]DUWLFOHRURQHRIWKHH[DPSOHVIURPSDVW
VHPHVWHUV>H[DPSOHVUHPRYHGIURPGLVVHUWDWLRQ@



/DEHO7LWOHWKH'HVLJQ

• 8VHWKH7\SH7RROWRFUHDWHDWLWOHDW
WKHWRSRIWKHLPDJHDQGVPDOOODEHOV
LQWKHWRSOHIWFRUQHURIHDFKRIWKH
FRPSDULVRQV
• <RXUILQDOSURGXFWVKRXOGORRN
VRPHWKLQJOLNHWKLV

([SRUWDVD31*

• ([SRUWWKHLPDJHE\VHOHFWLQJ)LOH!([SRUWDQGWKHQFKDQJHWKHILOHW\SHWRSQJ

*UDGLQJ

,ZLOOJUDGH\RXULPDJHVRQDVFDOHRI7KLVJUDGHZLOOEHEDVHGRQDQVZHUVWRWKHIROORZLQJ
FULWHULD

• 7KHEDFNJURXQGFRQVLVWVRIWZRFRORUHGUHFWDQJOHV
• %RWKKDOYHVRIWKHGHVLJQLQFOXGHLFRQVOLQHVDQGVKDSHVWRPDNHDFRPSDULVRQ
EHWZHHQWZRZD\VRIWKLQNLQJ
• 7KHUHLVDWLWOHDWWKHWRSRIWKHLPDJHDQGDVPDOOODEHORQHDFKUHFWDQJOHWR
FODULI\ZKDWLVEHLQJFRPSDUHG




$33(1',;'%$6,&62)$)7(5())(&767<32*5$3+<(;(5&,6(

3XUSRVH

7KLVH[HUFLVHLVPHDQWWRJLYH\RXDQRSSRUWXQLW\WRSOD\ZLWK$IWHU(IIHFWVEHIRUH\RXDUH
UHTXLUHGWRXVHLWZLWKPDMRUSURMHFWV7KHPDLQJRDOKHUHLVDQLPDWHWH[WXVLQJNH\IUDPHV
7KHVHVNLOOVZLOOFRPHXSLQSURMHFWVLQWKHIXWXUH
 
6WHS&KRRVHD4XRWH

7KLQNRIDTXRWHWKDW\RXHQMR\,WFDQEHDERXWDVSHFLILFWRSLFRUDTXRWHIURPDPRYLH

6WHS)RUPDWWKH4XRWH,QVLGH$IWHU(IIHFWV RULQ,OOXVWUDWRU 

$  &UHDWHDQHZFRPSRVLWLRQZLWKWKHGLPHQVLRQV;SL[HOV
%  &UHDWHDEDFNJURXQGVROLGWKDWLVWKHVDPHVL]HDVWKHFRPSRVLWLRQ /D\HU!1HZ!
6ROLG 
&  )RUPDWWKHTXRWHXVLQJFRORUW\SHIDFHDQGFRPSRVLWLRQ,I\RXJHWVWXFNWU\
PLPLFNLQJRQHRIWKHLGHDVIURPWKH³SDLULQJW\SHIDFHV´UHDGLQJ IRXQGKHUH
KWWSVZHEGHVLJQWXWVSOXVFRPDUWLFOHVDEHJLQQHUVJXLGHWRSDLULQJIRQWV
ZHEGHVLJQ 

6WHS$QLPDWHWKH7H[WRQWRWKH6FUHHQ
 
8VLQJ7:2RIWKHWKUHHPHWKRGVVKRZQLQFODVV PDVNLQJW\SLQJVFULSWLQJ DQLPDWHWKH
WH[WRQVFUHHQ,I\RXQHHGDUHIUHVKHURQKRZWRSHUIRUPWKHVHDQLPDWLRQVVHHWKHGHPR
YLGHRVRQRXUFODVV%ODFNERDUGSDJH

6WHS([SRUWWKH9LGHR

*RWR)LOH!([SRUW!$GGWR5HQGHU4XHXH2QFHWKHILOHLVLQWKHUHQGHUTXHXHDGMXVW
WKHRXWSXWVHWWLQJVWRDQPS + ILOH7KLVZLOOFRPSUHVVWKHILOHDQGPDNHLWHDVLHUWR
YLHZ

*UDGLQJ

7KLVGRFXPHQWZLOOEHJUDGHGRQDVFDOHRI±<RXZLOOUHFHLYHIXOOFUHGLWLI WKH
TXRWHXVHVWZRW\SHIDFHV WKHWH[WPRYHVRQVFUHHQWZRRIWKHWKUHHNH\IUDPHWHFKQLTXHV
GHPRQVWUDWHGLQFODVV WKHYLGHRLVSURSHUO\H[SRUWHG


$33(1',;(352027,21$/9,'(2$66,*10(176+((7

&DVH/RFDO0RWLRQ*UDSKLFV

2YHUYLHZ

)RUWKHVHFRQGPDMRUDVVLJQPHQW\RXZLOODSSO\\RXUNQRZOHGJHRIUKHWRULFDQGPXOWLPHGLD
GHVLJQWRDVSHFLILFVLWXDWLRQ<RXZLOOQHHGWRXVH$IWHU(IIHFWVWRFRPSOHWHWKLVDVVLJQPHQWEXW
WKHFHQWUDOJUDGHIRUWKLVDVVLJQPHQWZLOOQRWEHEDVHGVROHO\RQ\RXUWHFKQLFDODELOLW\ZLWK
DQLPDWLRQDQGJUDSKLFVGHVLJQ,QVWHDGLWZLOOEHEDVHGRQ\RXUDELOLW\WRSODQDQGGHVLJQ
PDWHULDOVWKDWXVHWH[WLPDJHDQGPRYHPHQWWRHQKDQFHH[LVWLQJYLGHRPDWHULDOV

,QDGGLWLRQWRWKHYLGHRSURGXFWV\RXGHYHORS\RXZLOOVXEPLW 3URSRVDOIRUWKH3URMHFW D
PLQLDQDO\VLVRIWKHRUJDQL]DWLRQ¶VH[LVWLQJPDWHULDOVDQG\RXUGHVLJQLGHD DSRVWPRUWHP
ZULWHXS7KHVHWKUHHGRFXPHQWVZLOOEHXVHGWRDVVHVV\RXUDELOLW\WRH[SODLQGHVLJQGHFLVLRQVLQ
DFOHDUFRQFLVHZD\

*RDOV

'XULQJWKLVSURMHFW\RXZLOOOHDUQ
• +RZWRDSSO\SULQFLSOHVRIYLVXDOUKHWRULFWRGLIIHUHQWUKHWRULFDOVLWXDWLRQV
• +RZWRGHVFULEH DQGLPSOLFLWO\DUJXHIRU GHVLJQGHFLVLRQVGXULQJDQGDIWHUSURGXFWLRQ
• +RZWRGHYHORSFRQVLVWHQWYLVXDOGHVLJQVDFURVVGLIIHUHQWYLGHRSURGXFWV
• +RZWRWDNHDFROODERUDWLYHDSSURDFKWRZULWLQJZLWKPXOWLPHGLD

7KH6FHQDULR
<RXZRUNDVWKH³$VVLVWDQW'LJLWDO&RQWHQW&RRUGLQDWRU´IRU9LVLW/DID\HWWH±:HVW/DID\HWWH
9/:/  ZKLFK LV IRU DOO LQWHQWV DQG SXUSRVHV WKH ERDUG RI WRXULVP IRU WKH /DID\HWWH:HVW
/DID\HWWHDUHD0RVWRI\RXUMREHQWDLOVPDQDJLQJWKHFRPSDQ\¶VYDULHGVRFLDOPHGLDDFFRXQWV
DQGLGHQWLI\LQJQHZRSSRUWXQLWLHVIRUFRQQHFWLQJZLWKWKHSXEOLF

2QHGD\\RXUERVV WKH³35DQG6RFLDO0HGLD6WUDWHJLVW´ FDOOV\RXLQWRKHURIILFH6KHWHOOV
\RXWKDWKHUERVVUHFHQWO\ORRNHGDWWKHYLGHRPDWHULDOVRQ<RX7XEHDQGFDOOHGWKHP³ERULQJ´
³SODLQ´DQG³SRLQWOHVV´6KHWHOOV\RXWKDWPDQ\RIWKHYLGHRV IRXQGKHUH DUHWRRORQJDQG
DUHQ¶WYLVXDOO\FRQQHFWHGWRWKHEUDQGVRIWKHRUJDQL]DWLRQV,W¶VHYHQKDUGWRWHOOZKDWWKHYLGHRV
DUHDERXWZLWKRXWVRPHRQVFUHHQJUDSKLFVWRVKDSHWKHVWRU\³6RZH¶UHVWDUWLQJIURPVFUDWFK´
VKHWHOOV\RXH[FLWHGO\

6KHDVNV\RXUWHDP \RXDQG\RXUSDUWQHU WRFKRRVHDORFDORUJDQL]DWLRQLQ/DID\HWWHRU:HVW
/DID\HWWHWKDWZRXOGEHQHILWIURPDVORZUHOHDVHRIYLGHRFRQWHQW7KHQ\RXZLOOSURGXFHRQ
VFUHHQJUDSKLFVWKDWFDQEHHDVLO\DSSOLHGRQWRSRIFDSWXUHGIRRWDJHLQRUGHUWRPDNHWKHYLGHRV
PRUH SURIHVVLRQDO <28 '2 127 1((' 72 ),/0 7+( 25*$1,=$7,216
7+(06(/9(6-XVWGHYHORSJUDSKLFVDQGDSODQIRUWKHNLQGVRIYLGHRVWKH\PLJKWXVH



<RXUERVVJLYHVDIHZVSHFLILFVDERXWWKHSURMHFW

• <RXPXVWSURGXFHDWOHDVW DQDQLPDWHGORJRVWLQJZLWKWKHRUJDQL]DWLRQ¶VH[LVWLQJ
ORJR DWH[WJUDSKLFWKDWFDQEHDQLPDWHGRQDQGRIIWKHVFUHHQDQG D
FUHGLWVWKDQNVRXWURVHTXHQFHWKDWFDQEHSXWRQWRWKHHQGRIDYLGHR

• ³,¶PDELWZRUULHGWKDWWKLVLVJRLQJWRORRNOLNHDSKRWRVOLGHVKRZWKDW¶VEHHQSRRSHG
RXWRID3RZHU3RLQWSUHVHQWDWLRQ,VDZRQHFUHDWHGE\WKH1DSHUYLOOH,OOLQRLV,W¶V
JDUEDJH3OHDVHPDNHLWEHWWHUWKDQWKHLUV´

• ³3OHDVHGRQ¶WIRFXVRQ3XUGXHVSHFLILFDOO\:HDOUHDG\KDYHHQRXJK3XUGXHFHQWULF
PRWLRQJUDSKLFV´

• ³<RXVKRXOGNHHSWKHRUJDQL]DWLRQ¶VRULJLQDOFRORUW\SRJUDSK\DQGEUDQGLQJPDWHULDOV
LQPLQG'RQ¶WFUHDWHDQ\WKLQJWKDWZRXOGFRQIOLFWZLWKWKHLUH[LVWLQJJUDSKLF
PDWHULDOV´

3ULPDU\'HOLYHUDEOHV
<RXUJURXSPXVWFUHDWH

• $SDJHVLQJOHVSDFHGGRFXPHQWZLWKDVKRUWGHVFULSWLRQRIYLGHRV RURWKHU
PXOWLPHGLD WKDWFRXOGEHXVHGWREXLOGDSHUVRQDOFRQQHFWLRQEHWZHHQWKHRUJDQL]DWLRQ
DQGWKHFRPPXQLW\/RRNLQJIRULGHDV"7U\+HUH

• /RJR6WLQJ ±VHFRQGV WKDWDQLPDWHVWKHORJRRQWRWKHVFUHHQ$WWKHHQGRIWKH
FOLSWKHUHVKRXOGEHDWUDQVLWLRQWRVKRZKRZWKHVWLQJZRXOGWUDQVLWLRQWRWKHPDLQYLGHR
1RWVXUHZKDWDORJRVWLQJORRNVOLNH"7DNHDORRNKHUH

• 7H[W+ROGHU ±VHFRQGV WKDWFDQPDLQWDLQWKHHWKRVRIWKHRUJDQL]DWLRQZKLOH
FRQWHQWLVSOD\LQJ
o 7KLVFDQEHDORZHUWKLUG
o 2ULWFDQEHDWUDQVLWLRQJUDSKLFOLNH\RXVHHKHUH
o 2ULWFDQHYHQEHVRPHWKLQJWKDWWDNHVXSDODUJHSRUWLRQRIWKHVFUHHQOLNHWKLV

• 2XWUR6HTXHQFH VWLOOLPDJH WKDWFRXOGEHHDVLO\HGLWHGWRLQFOXGHFUHGLWVVSHFLDO
WKDQNVDQGFDOOVWRDFWLRQ<RXFDQVHHDQH[DPSOHKHUH

>1RWH$WWKLVSRLQW\RXGRQRWKDYHWKHWLPHRUWKHWHFKQLFDOFRPSHWHQF\WRSURGXFHIXOO\DQLPDWHG
FKDUDFWHUV,I\RXKDYHDQLGHDIRUDFKDUDFWHUGULYHQYLGHR\RXPXVWKDYHWKHLGHDDSSURYHGE\
PHEHIRUHPRYLQJIRUZDUG@








$GGLWLRQDO'RFXPHQWV

0LQL$QDO\VLV3URSRVDO

7KLV GRFXPHQW ZLOO EHJLQ ZLWK DQ RYHUYLHZ RI WKH RUJDQL]DWLRQ¶V EUDQG LQFOXGLQJ D
GHVFULSWLRQRIWKHLUORJRFRORUVFKHPHW\SRJUDSK\DQGRUJDQL]DWLRQDOHWKRV

)URPWKLVLQIRUPDWLRQ\RXZLOOSURSRVHDGLUHFWLRQIRU\RXUJUDSKLFVLQFOXGLQJKRZ\RX
SODQWRLQWHJUDWHFRORUW\SRJUDSK\DQGPRYHPHQWLQRUGHUWRFRQQHFWZLWKWKHRULJLQDO
EUDQG<RXZLOOLQFOXGHVFUHHQVKRWVRIDQ\LPDJHVRUVNHWFKHV\RX¶YHFUHDWHGWKXVIDU
7KHQ \RX ZLOO LQFOXGH VKRUW GHVFULSWLRQV RI  ³LQVSLUDWLRQ YLGHRV´ WKDW \RX ZLOO WU\ WR
HPXODWH LQ \RXU JUDSKLFV SDFNDJH )LQDOO\ WKH GRFXPHQW ZLOO GHVFULEH \RXU SODQ IRU
FUHDWLQJWKHYLGHRZLWK\RXUSDUWQHU+RZZKDWSDUWVZLOO\RXHDFKFUHDWH"

3RVW0RUWHP:ULWH8S

7KLVGRFXPHQWZLOOH[SODLQDQGGHIHQGWKHGHVLJQFKRLFHVPDGHLQWKHFUHDWLRQRIWKHYLGHR
,QWKLVZULWHXS\RXZLOOEHUHTXLUHGWRVXSSRUW\RXUGHFLVLRQVXVLQJWKHUHDGLQJVIURPWKH
FRXUVH<RXZLOODOVRJHWDFKDQFHWRUHIOHFWRQZKDW\RX¶YHOHDUQHGDERXW$IWHU(IIHFWV
DQGKRZ\RXPLJKWDSSURDFKWKHQH[WFDVHGLIIHUHQWO\

$1RWHRQ*URXS:RUN

1HLWKHUJURXSPHPEHUVKRXOGSHUIRUPDOORIWKHDQLPDWLRQRUDOORIWKHZULWLQJIRUWKLVDVVLJQPHQW
0RUHRYHU HYHQ LI \RX ZRUN FROODERUDWLYHO\ ZLWK \RXU SDUWQHU V  \RX PXVW EH DEOH WR GHVFULEH
\RXULQGLYLGXDOFRQWULEXWLRQVDWWKHHQGRIWKHFDVHVWXG\

8QOHVVJURXSHYDOXDWLRQVGHPRQVWUDWHDQH[WUHPHGLVSDULW\LQFRQWULEXWLRQV\RXDQG\RXUSDUWQHU
ZLOOUHFHLYHWKHVDPHJUDGHRQWKLVDVVLJQPHQW,I\RXDQG\RXUSDUWQHUGLGQRWFRQWULEXWHHTXDOO\
,PD\UDLVHRUORZHUWKHDVVLJQPHQWJUDGHRIDQLQGLYLGXDOJURXSPHPEHUE\XSWR

*UDGLQJDQG7LPHOLQH

$OOSDSHUVDQGYLGHRVZLOOEHJUDGHGDQGUHWXUQHGZLWKLQRQHZHHNRIWKHLUVXEPLVVLRQ$OOSDSHUV
ZLOOEHVXEPLWWHGYLDWKH%ODFNERDUG³6XEPLWWDEOHV´IROGHU:KLOHWKHGXHGDWHVIRUWKHGRFXPHQWV
ZLOOYDU\WKHGXHGDWHIRUWKHHQWLUHW\RIWKHPDWHULDOVLV)ULGD\0DUFKUGDW0LGQLJKW

*UDGLQJIRUWKHGRFXPHQWVZLOOEHEDVHGRQDQVZHUVWRWKHIROORZLQJTXHVWLRQV

• ,VWKHUHHYLGHQFHRIUHVHDUFKDERXWWKHDUHD"
• ,VWKHUHHYLGHQFHRIUHVHDUFKIRULQVSLUDWLRQDOH[DPSOHV"
• 'RHVWKHZULWLQJGHPRQVWUDWHDELOLW\WRLGHQWLI\WKHVWURQJGHVLJQGHFLVLRQV"
• 'RHVWKHZULWLQJFRQQHFWGHVLJQGHFLVLRQVWRWKHUKHWRULFDODVSHFWVRIWKHFDVHLQFOXGLQJ
WKHHWKRVRIWKHRUJDQL]DWLRQ"
• 'RHVWKHZULWLQJH[SODLQWKHVWUHQJWKVDQGZHDNQHVVHVRIWKHGHVLJQV"



*UDGLQJIRUWKHYLGHRSDFNDJHZLOOEHEDVHGRQWKHIROORZLQJTXHVWLRQV

• 'RHVWKHYLGHRDYRLGYLVXDOFRQIXVLRQ"
• $UHWKHUHVW\OLVWLFHOHPHQWVWKDWFRQQHFWWKHYLGHRZLWKWKHRUJDQL]DWLRQ"
• 'RWKHYLGHRHOHPHQWVWUDQVLWLRQRQDQGRIIWKHVHTXHQFHLQHIIHFWLYHZD\V"
• ,VWKHUHDFOHDUFKRLFHLQW\SRJUDSKLFVW\OH"
• ,VWKHUHDFOHDUFKRLFHLQWKHFRORUVXVHGWKURXJKRXWWKHYLGHRHOHPHQWV"
• ,VWKHUHFRQWLQXLW\EHWZHHQWKHGLIIHUHQWJUDSKLFDOHOHPHQWV"


$33(1',;)38%/,&+($/+9,'(2$66,*10(176+((7

$VVLJQPHQW3XEOLF+HDOWK$QLPDWHG,QIRJUDSKLF

2YHUYLHZ

)RUWKHVHFRQGFDVHVWXG\\RXZLOOQHHGWRFUHDWHDQDQLPDWHGLQIRJUDSKLFWKDWZLOOVXSSRUWSUH
H[LVWLQJZULWWHQPDWHULDO/LNHWKHSUHYLRXVFDVH\RXZLOOQHHGWRXVH$IWHU(IIHFWVDQG
,OOXVWUDWRUWRFRPSOHWHWKHDVVLJQPHQWWKRXJKLQWKLVFDVH,ZLOODOVRLQWURGXFH\RXWR$GREH
3UHPLHUH3URIRUFUHDWLQJORQJIRUPPDWHULDOVDQGDGGLQJEDFNJURXQGPXVLF/LNHZLWKWKHODVW
SURMHFWPXFKRIWKHJUDGHZLOOEHGHWHUPLQHGEDVHGRQ\RXUDELOLW\WRH[SOLFDWH\RXUGHVLJQ
SURFHVVDQGDQDO\]HSUHH[LVWLQJPDWHULDOV

,QDGGLWLRQWRWKHYLGHRSURGXFWV\RXGHYHORS\RXZLOOVXEPLW DQDQDO\VLVRIDQH[LVWLQJYLGHR
RUVHULHVRIYLGHRV DERXW\RXUWRSLF $EULHISURSRVDOIRUWKHNLQGRIYLGHR\RXZLOOSURGXFH
 D³JURFHU\OLVW´RIDOOWKHYLVXDOPDWHULDOVWKDW\RX¶OOQHHGWRFROOHFWLQRUGHUWRFUHDWHWKLV
YLGHR $IUDPHVWRU\ERDUGWKDWRXWOLQHVDPRUHVSHFLILFGLUHFWLRQIRU\RXUYLGHR $
3RVW0RUWHPGRFXPHQWWKDWGLVFXVVHV\RXUGHVLJQGHFLVLRQVZKDWZHQWZHOODQGZKDWZHQW
SRRUO\7KHVHWKUHHGRFXPHQWVZLOOEHXVHGWRDVVHVV\RXUDELOLW\WRH[SODLQGHVLJQGHFLVLRQVLQD
FOHDUFRQFLVHZD\

*RDOV

'XULQJWKLVSURMHFW\RXZLOOOHDUQ
• +RZWRGHYHORSYLVXDOH[SUHVVLRQVRISULPDULO\WH[WXDOLQIRUPDWLRQ
• +RZWRFRPPXQLFDWHVHULRXVPHVVDJHVZLWKDQLPDWHGFRQWHQW
• +RZWREXLOGJUDSKLFVWKDWVLPXOWDQHRXVO\LQIRUPDQGUDLVHLQWHUHVWLQDWRSLF
• +RZWRDGGYLVXDOLQWHUHVWDQGVHULRXVQHVVZLWKRXWUHO\LQJRQSKRWRJUDSKLFYLVXDOV

7KH6LWXDWLRQ
2QFHDJDLQ\RXZRUNDVWKH³$VVLVWDQW'LJLWDO&RQWHQW&RRUGLQDWRU´EXWWKLVWLPHIRUWKH&HQWHU
IRU'LVHDVH&RQWURO &'& <RXUSULPDU\UHVSRQVLELOLW\LVWRGHYHORSPDWHULDOVWKDWKHOSDVSHFLILF
DXGLHQFH XQGHUVWDQG D PDMRU KHDOWK LVVXH LQ WKHLU VWDWH RU UHJLRQ 8VXDOO\ WKLV PHDQV FUHDWLQJ
LPDJHKHDY\GRFXPHQWVWKDWFDQEHHDVLO\SULQWHGVXFKDVEURFKXUHVSDPSKOHWVRULQIRJUDSKLFV

+RZHYHUUHFHQWO\\RX¶YHFUHDWHGYLGHRPDWHULDOVDVZHOOVXFKDVWKHVHUHFHQWYLGHRPDWHULDOVRQ
WKH=LNDYLUXV7KHVHYLGHRVZKLOHODFNLQJLQFRQWHQWDFKLHYHGDPXFKZLGHUUHDFKWKDQWKHXVXDO
GRFXPHQWDWLRQ&RQVHTXHQWO\\RXUERVVZRXOGOLNHWRVHH\RXSURGXFHPRUHYLGHRVDERXWFXUUHQW
KHDOWKFULVHV

)RUWKLVFDVH\RXUJRDOLVWRFRQWLQXHWKLVZRUNE\ ILQGLQJDWRSLFLQSXEOLFKHDOWK RQHDOUHDG\
GLVFXVVHGE\WKH&'& WKDWFRXOGEHQHILWIURPYLGHRPDWHULDOVDQG GHYHORSLQJDVKRUWYLGHR
WKDW FRXOG EH GLVWULEXWHG RQ )DFHERRN 7ZLWWHU ,QVWDJUDP RU VHQW RXW ORFDOO\ E\ KHDOWK
SURIHVVLRQDOV



7KHSULPDU\RIJRDORI\RXUYLGHRPD\LQFOXGH

• $OHUWLQJDSDUWLFXODUGHPRJUDSKLFDERXWDQHZGLVHDVHRUKHDOWKFULVLVDQGZKHUHWRJR
IRUQHZLQIRUPDWLRQ
• &RPPXQLFDWLQJWKHEHVWSUDFWLFHVIRUGHDOLQJZLWKDQDWXUDOGLVDVWHU IORRGKXUULFDQH
HDUWKTXDNHHWF 
• &OHDULQJXS³ZLYHVWDOHV´RU³P\WKV´DERXWDKHDOWKLVVXH
• $OHUWLQJDGHPRJUDSKLFRIDQHZWUHDWPHQWRSWLRQIRUVSHFLILFGLVHDVHV OLNHWKH+39
9DFFLQHRU3U(3 

7KHVHFRQGDU\JRDOVRI\RXYLGHRZLOOEH

• 0DLQWDLQLQJWKHFUHGLELOLW\RIWKHLQIRUPDWLRQSURYLGHGE\WKH&'&
• /HDGLQJYLHZHUVWRPRUHLQGHSWKVRXUFHVRILQIRUPDWLRQWKURXJKWKH&'&

'HOLYHUDEOHV 9LGHR 

<RXPXVWFUHDWHYLGHRZLWKWKHIROORZLQJHOHPHQWV
• $VHULHVRIDQLPDWLRQVWKDWHGXFDWHDVSHFLILFGHPRJUDSKLFDERXWDSXEOLFKHDOWKLVVXH
• 7KHYLGHRPXVWLQFOXGHDWOHDVWRQHYLVXDOL]HGVWDWLVWLFRUQXPHULFDOJUDSKLF7KLV
HOHPHQWPXVWYLVXDOL]HWKHQXPHULFDOLQIRUPDWLRQLQVRPHZD\ZKHWKHULWEHDFKDUW
JUDSKYLVXDOLFRQRUVRPHRWKHUDQLPDWLRQW\SH
• %DFNJURXQGPXVLFWKDWUHIOHFWDQGHVWDEOLVKWKHWRQHRIWKHYLGHR
• $ORJRVWLQJDWWKHVWDUWRUHQGRIWKHYLGHRWKDWGLUHFWVWKHYLHZHUEDFNWRWKH&'&
ZHEVLWHIRUPRUHLQIRUPDWLRQ
• 7KLVYLGHRVKRXOGEHQRPRUHWKDQVHFRQGVORQJDQGWKHVKRUWHUWKHYLGHRWKHEHWWHU
VHFRQGVWRPLQXWHLVWKHWDUJHWOHQJWK

1RWH9RLFHRYHULVQRWUHTXLUHGIRUWKLVYLGHR,WLVGLIILFXOWWRZULWHUHFRUGDQGLQWHJUDWHLQWR
YLGHR+RZHYHULI\RXFKRRVHWRLQWHJUDWHYRLFHRYHU,ZLOOKHOS\RXDORQJWKHZD\ 

5HVHDUFK

<RX PD\ XVH DQ\ VWDWLVWLFV IDFWV RU RXWVLGH LQIRUPDWLRQ WR PDNH WKLV JUDSKLF EXW \RXU YLGHR
VKRXOGUHIOHFWWKHUHVHDUFKDQGVWDWHPHQWVWKDWDUHDOUHDG\SURYLGHGE\WKH&'&<RXZLOOQHHGWR
ILQGRQHVWDWLVWLFRUQXPHULFDOVWDWHPHQWWRLQFOXGHLQ\RXUYLGHR7KLVFDQLQFOXGH
• RISHRSOHDIIHFWHG
• RIVXUYLYDO SDVWRUSUHVHQW 
• VSHQWSHU\HDU
• /LNHOLKRRGRIRFFXUUHQFH
• $QDPRXQWRIWLPHOLNHDFORFNRUDFDOHQGDU

<RXUYLGHRVKRXOGQRWEHGLUHFWHGWRZDUGWKHHQWLUH8QLWHG6WDWHV1DUURZLQJ \RXUIRFXV \RX
PLJKWIRFXVRQSDUHQWVFKLOGUHQWHHQVKRPHRZQHUVQRQKRPHRZQHUVFRPPXQLW\ZRUNHUVRU


VPDOOEXVLQHVVRZQHUV<RXFRXOGHYHQIRFXVRQKHOSLQJFKLOGUHQRU\RXQJDGXOWVXQGHUVWDQGWKHVH
JXLGHOLQHV<RXFRXOGFKRRVHSHRSOHIURPDVSHFLILFSDUWRIWKHFRXQWU\(DFKRIWKHVHJURXSVZLOO
UHTXLUHGLIIHUHQWLQIRUPDWLRQ7KHPRUHVSHFLILFWKHEHWWHU

8VHDVPXFKRIWKHH[LVWLQJPDWHULDOVRQWKH&'&ZHEVLWHDV\RXFDQ,QIDFWVXFFHVVIXOSURMHFWV
RIWHQGUDZLQVSLUDWLRQGLUHFWO\IURPSUHH[LVWLQJFRORUVWHUPVDQGJUDSKLFVIURPWKH&'&ZHEVLWH
0RVWRI\RXUWLPHZRUNLQJZLWKWKHGDWDVKRXOGEHVSHQWGHFLGLQJZKLFKIDFWVDUHPRVWDSSURSULDWH
DQGWKHEHVWZD\WRUHSUHVHQWWKHVHIDFWVZLWKDQLPDWHGLFRQV

'HOLYHUDEOHV 'RFXPHQWV 

0LQL$QDO\VLVDQG3URSRVDO

7KLVGRFXPHQWZLOOEHJLQZLWKDFRPSDUDWLYHDQDO\VLVEHWZHHQWZRYLGHRV2QHYLGHRZLOO
EHUKHWRULFDOO\HIIHFWLYHDQGWKHRWKHUYLGHRZLOOQRWEH,QWKLVDQDO\VLV\RXZLOOGLVFXVV
WKHYLVXDOHOHPHQWVZH¶YHEHHQGLVFXVVLQJVRIDUEXWDOVRKRZWKHYLGHRVXVHPXVLFDQG
YLGHRIRULQVSLUDWLRQ

,QWKHVHFRQGKDOIRIWKHGRFXPHQW\RXZLOOSURSRVH\RXUWRSLFDXGLHQFHDQGFRQWHQWIRU
\RXU&DVHYLGHR<RXZLOOQHHGWRH[SODLQZK\WKLVYLGHRLVQHFHVVDU\DQGGHPRQVWUDWH
WKDWWKLVYLGHRGRHVQRWDOUHDG\H[LVWRQ<RX7XEHRUWKH&'&ZHEVLWH

*URFHU\/LVW

%HFDXVHWKLVLVDORQJHUYLGHR\RXZLOOQHHGIDUPRUHYLVXDODQGDXUDOPDWHULDOVWKDQ\RX
QHHGHGIRUWKHSURPRWLRQDOJUDSKLF7KHUHIRUH\RXZLOOEHUHTXLUHGWRPDNHDOLVWRIDOO
WKH VWLOO LPDJHV \RX QHHG WR FROOHFW DQG DOO WKH JUDSKLFDO HOHPHQWV \RX ZLOO QHHG WR
FUHDWHILQG

6WRU\ERDUG

7KLVGRFXPHQWZLOOIXQFWLRQDVDVHFRQGFKHFNSRLQWDV\RXFRQWLQXHWRFUHDWH\RXUYLGHR
,WZLOOUHTXLUH\RXWRVWDUWDOLJQLQJWKHYLVXDOVWH[WDQGPRWLRQLQRUGHUWRFRPPXQLFDWH
ZKDWWKLVYLGHRLVJRLQJWRORRNOLNH

3RVW0RUWHP

7KLV GRFXPHQW ZLOO H[SODLQ DQG GHIHQG WKH GHVLJQ FKRLFHV PDGH LQ WKH FUHDWLRQ RI WKH
GLIIHUHQWYLGHRHOHPHQWV,QWKLVZULWHXS\RXZLOOEHUHTXLUHGWRVXSSRUW\RXUGHFLVLRQV
XVLQJUHDGLQJVIURPWKHILUVWKDOIRIWKHFRXUVH

*UDGLQJDQG7LPHOLQH

$OOSDSHUVDQGYLGHRVZLOOEHJUDGHGDQGUHWXUQHGZLWKLQRQHZHHNRIWKHLUVXEPLVVLRQ$OOSDSHUV
ZLOOEHVXEPLWWHGYLDWKH%ODFNERDUG³6XEPLWWDEOHV´IROGHU:KLOHWKHGXHGDWHVIRUWKHGRFXPHQWV
ZLOOYDU\WKHGXHGDWHIRUWKHYLGHRSDFNDJHLV:HGQHVGD\$SULOWK



*UDGLQJIRUWKHGRFXPHQWVZLOOEHEDVHGRQDQVZHUVWRWKHIROORZLQJTXHVWLRQV

• ,VWKHUHDFULWLFDOHYDOXDWLRQWKHH[LVWLQJPDWHULDOVDERXWWKHWRSLF"
• $UHWKHUHFULWLFDOFRQQHFWLRQVEHWZHHQWKHSURMHFWDQGRWKHUYLGHRVLPDJHVIRXQGRQOLQH"
• 'RHVWKHZULWLQJFRQQHFWGHVLJQGHFLVLRQVWRWKHVSHFLILFFRQWLQJHQFLHVRIWKHWRSLF"
• 'RHVWKHZULWLQJFRQQHFWGHVLJQGHFLVLRQVWRDVSHFLILFQDUURZDXGLHQFH"
• 'RHVWKHILQDOSRVWPRUWHPH[SODLQWKHVWUHQJWKVDQGZHDNQHVVHVRIWKHGHVLJQV"

*UDGLQJIRUWKHYLGHRZLOOEHEDVHGRQWKHIROORZLQJTXHVWLRQV

• 'RHVWKHYLGHRPDLQWDLQDVHULRXVWRQHDERXWWKHWRSLFZKLOHVWLOOPDNLQJWKHLQIRUPDWLRQ
LQWHUHVWLQJDQGHQJDJLQJ"
• 'RHVWKHYLGHRGLVSOD\WKHLQIRUPDWLRQLQZD\VWKDWDUHFOHDUDQGHWKLFDO"
• 'RHVWKHYLGHRLQFOXGHRQHVWDWLVWLFRUQXPEHUUHLQIRUFHGJUDSKLFDOO\"
• 'RHVWKHYLGHRFOHDUO\HVWDEOLVKDQDXGLHQFHDQGSXUSRVH"
• 'RWKHYLGHRHOHPHQWVWUDQVLWLRQRQDQGRIIWKHVHTXHQFHLQHIIHFWLYHZD\V"
• ,VWKHUHDFOHDUFKRLFHLQW\SRJUDSKLFVW\OH"
• ,VWKHUHDFOHDUFKRLFHLQWKHFRORUV"
• ,VWKHYLGHRVXEPLWWHGRQWLPHDQGLQDQ0S+IRUPDW"



$33(1',;*),1$/352-(&7$66,*10(176+((7

$VVLJQPHQW,QGHSHQGHQW3URMHFW

2YHUYLHZ

)RUWKHIRXUWKPDMRUDVVLJQPHQW\RXZLOOKDYHVRPHIUHHGRPWRFDUYHRXWDYLGHRPRWLRQJUDSKLFVSURMHFW
WKDWDSSOLHVWR\RXUOLIH\RXUILHOGRU\RXULQWHUHVWV7KHSURMHFWPXVWEHDYLGHRWKDWXVHVJUDSKLFYLVXDO
HOHPHQWVEXWGRHVQRWQHHGWREHZKROO\FRPSRVHGLQ$IWHU(IIHFWV7RWKLVHQGWKHUHDUHWKUHHFRPPRQ
WUDMHFWRULHVIRUWKLVDVVLJQPHQW

2SWLRQ3URGXFHDQ$QLPDWHG([SODQDWLRQRIDWRSLFWKDWLVLPSRUWDQWWR\RXUILHOGRIVWXG\
RULPSRUWDQWWR\RXSHUVRQDOO\ EXWZKLFKLVRIWHQPLVXQGHUVWRRGRUGLVOLNHGE\WKHSXEOLF

2SWLRQ3URGXFHD3URPRWLRQDO9LGHRIRUDORFDOEXVLQHVVRUDFDPSXVRUJDQL]DWLRQWKDWFRXOG
XVHWKHYLGHRIRUPDUNHWLQJWKHLUJRDOVVHUYLFHV <RXFDQEXLOGRQWKHJUDSKLFVIURPWKHILUVW
YLGHRSURMHFW+LQWKLQW« 

2SWLRQ&UHDWHD9LGHR5HVXPHWKDW\RXFDQXVHWRVKRZFDVH\RXUSURIHVVLRQDOVNLOOVRUUHHO
7KLVNLQGRIYLGHRZRXOGEHVXLWDEOHIRUWKHKRPHSDJHRIDSHUVRQDOZHEVLWH

*RDOV

'XULQJWKLVSURMHFW\RXZLOOOHDUQ
• +RZWRLGHQWLI\QHZFDVHVZKHUHPRWLRQJUDSKLFVPD\EHDSSOLFDEOHXVHIXOIRU
FRPPXQLFDWLQJZLWKDVSHFLILFDXGLHQFH
• +RZWRGHILQHWKHSDUDPHWHUVRIDPRWLRQJUDSKLFVSURMHFWJLYHQ\RXUVSHFLILFDXGLHQFH
DQGFRQVWUDLQWV
• 3ODQDQGDUJXHIRU\RXUSURMHFWXVLQJDVKRUWDQDO\VLVSURSRVDODQGVWRU\ERDUG
• $UWLFXODWH\RXUGHVLJQGHFLVLRQVLQDILQDOUDWLRQDOH

*UDSKLF'HOLYHUDEOHV

<RXPXVWFUHDWHJUDSKLFPDWHULDOXVLQJ$IWHU(IIHFWVIRUWKLVSURMHFW7KHJHQHUDODHVWKHWLFRIWKH
JUDSKLFV\RXFUHDWHZLOOFKDQJHEDVHGRQWKHVXEMHFW\RXDUHZRUNLQJZLWK<RXPLJKWXVHVWRFN
SKRWRVRULPDJHV\RXFDSWXUH\RXUVHOI<RXPLJKWFUHDWHHYHU\WKLQJHQWLUHO\LQ$IWHU(IIHFWV<RX
PLJKWXVHYRLFHRYHU<RXPLJKWQRW5HJDUGOHVVRIZKDW\RXFKRRVHWRFUHDWH\RXPXVWEHDEOH
WRDUJXHIRU\RXUGHVLJQGHFLVLRQVWKURXJKWKHWH[WGHOLYHUDEOHVIRUWKHSURMHFW7KLVLVWKH
FHQWUDOSDUDPHWHUIRUWKHSURMHFW

7H[W'HOLYHUDEOHV 'RFXPHQWV 

$QDO\VLVDQG3URMHFW3URSRVDO

7KLV GRFXPHQW ZLOO SURSRVH WKH EDVLF SDUDPHWHUV RI \RXU ILQDO SURMHFW LQFOXGLQJ ZKLFK
JHQUH\RXZLOODWWHPSWWRFUHDWHZKDWWRSLF\RXZLOOIRFXVRQDQGDQRXWOLQHRIZKDWWKH


SURMHFWPLJKWEHDEOHWRFRYHU,QDGGLWLRQ\RXZLOORXWOLQHWKHLQWHQGHGDXGLHQFHRIWKH
YLGHR:K\PLJKWWKH\ZDWFKWKHYLGHR":KDWGR\RXZDQWWKHPWRWDNHDZD\IURPWKH
YLGHR"7KLVGRHVQRWQHHGWREHGHVFULEHGLQJUHDWGHWDLO

6FULSW6WRU\ERDUG'RFXPHQW

7KLVGRFXPHQWZLOOJLYHDVNHOHWDOYLHZRI\RXUILQDOSURMHFW<RXZLOOQHHGWRLQFOXGHD
EUHDNGRZQ RI WKH GLIIHUHQW VHFWLRQV RI WKH YLGHR WKH OHQJWK RI WKH GLIIHUHQW VHFWLRQV
VNHWFKHV RULQLWLDOYHUVLRQV RIZKDWHDFKVHFWLRQPLJKWORRNOLNHDVFULSWRIWKHYRLFHRYHU
HWF7KLVGRFXPHQWVKRXOGLQFOXGHERWKWH[WGHVFULSWLRQVRIZKDWZLOOKDSSHQDQGYLVXDOV
WKDWVKRZ\RXUSURJUHVVWKXVIDU

3UHVHQWDWLRQ

2Q WKH ODVW WZR GD\V RI FODVV \RX ZLOO SUHVHQW \RXU ILQDO SURMHFW WR WKH FODVV ,Q \RXU
SUHVHQWDWLRQ\RXZLOOLQWURGXFHWKHSURMHFWVKRZWKHSURMHFWDQGWKHQWDONDERXWDWOHDVW
RQHYLVXDOIDFWRUWKDWPDNHVLWUKHWRULFDOO\HIIHFWLYH

'HVLJQ5DWLRQDOH

7KLV GRFXPHQW ZLOO EH WXUQHG LQ DORQJ ZLWK WKH JUDSKLFV IRU \RXU ILQDO SURMHFW ,Q WKLV
GRFXPHQW\RXZLOOGLVFXVVWKHSXUSRVHRIWKHJUDSKLFVWKHDXGLHQFHIRUWKHJUDSKLFVDQG
WKHVXFFHVVRIWKHJUDSKLFV(DFKGHVLJQGHFLVLRQZLOOEHGLVFXVVHGLQGHWDLO)LQDOO\\RX
ZLOOGLVFXVVWZRUHDGLQJVIURPWKHVHPHVWHUWKDWDSSO\WR\RXUSURMHFW

$1RWHRQ*URXS:RUN

<RXPD\ZRUNRQWKLVSURMHFWLQDVPDOOJURXSLI\RXFKRRVHKRZHYHUHDFKJURXSPHPEHUZLOO
QHHGWRZULWHDGLIIHUHQWGHVLJQUDWLRQDOHWRVXEPLW)XUWKHUP\H[SHFWDWLRQVIRUWKHTXDQWLW\DQG
TXDOLW\RI\RXUZRUNZLOOLQHYLWDEO\ULVHZLWKHDFKDGGLWLRQDOJURXSPHPEHU

*UDGLQJDQG7LPHOLQH

$OOSDSHUVDQGYLGHRVZLOOEHJUDGHGDQGUHWXUQHGZLWKLQRQHZHHNRIWKHLUVXEPLVVLRQ$OOSDSHUV
ZLOOEHVXEPLWWHGYLDWKH%ODFNERDUG³6XEPLWWDEOHV´IROGHU:KLOHWKHGXHGDWHVIRUWKHGRFXPHQWV
ZLOOYDU\WKHGXHGDWHIRUWKHJUDSKLFVDQGGHVLJQUDWLRQDOHZLOOEH:HGQHVGD\$SULOWK

*UDGLQJIRUWKHYLGHRHOHPHQWVZLOOEHEDVHGRQWKHIROORZLQJTXHVWLRQV

• +RZDUHWKHYLVXDOHOHPHQWVFRPSRVHG"$UHWKHYLVXDOHOHPHQWVVXEVWDQWLYHDQG
SXUSRVHIXO"2UDUHWKH\DGGHGVLPSO\IRUGHFRUDWLRQ"
• 'RWKHJUDSKLFVLQFOXGHDSSURSULDWHFRQQHFWLRQVWRWKHLQWHQGHGDXGLHQFH":RXOGWKH
LQWHQGHGDXGLHQFHEHDWDOOFRQIXVHGE\WKHLQIRUPDWLRQSUHVHQWHGRUE\ZKDWLVOHIWRXW"
• $UHWKHJUDSKLFVVKDSHGE\WKHUKHWRULFDOVLWXDWLRQWREDODQFHWKHGHSWKRILQIRUPDWLRQ
DQGWKHSDFLQJRIWKHYLGHR",QRWKHUZRUGVGRHVWKHYLGHRPRYHWRRTXLFNO\RUWRR
VORZO\IRUWKHLQIRUPDWLRQEHLQJFRYHUHG"


• ,VWKHGHVLJQRIWKHJUDSKLFVXQLILHGDFURVVDOOHOHPHQWV"
• ,VWKHUHDFOHDUUKHWRULFDOFKRLFHLQW\SRJUDSKLFVW\OH"
• ,VWKHUHDFOHDUUKHWRULFDOFKRLFHLQWKHFRORUVXVHG"


$33(1',;+'(6,*15$7,21$/(*8,'(

'HVLJQ5DWLRQDOH*XLGH

3XUSRVH

7KLV GRFXPHQW ZLOO EH WXUQHG LQ DORQJ ZLWK WKH JUDSKLFV IRU \RXU ILQDO SURMHFW ,Q WKLV
GRFXPHQW\RXZLOOGLVFXVVWKHSXUSRVHRIWKHYLGHRWKHDXGLHQFHIRUWKHYLGHRDQGWKH
GHVLJQ RI WKH YLGHR (DFK GHVLJQ GHFLVLRQ ZLOO EH GLVFXVVHG LQ GHWDLO )LQDOO\ \RX ZLOO
GLVFXVVWZRUHDGLQJVIURPWKHVHPHVWHUWKDWDSSO\WR\RXUSURMHFW
 
&RQWHQWV
 
7KH ILUVW VHFWLRQ VKRXOG LQFOXGH D UHSULVH RI WKH FDVH :KDW LV \RXU UROH" :KR LV WKH
DXGLHQFH":KDWDUHWKHUKHWRULFDOFKDOOHQJHVLQWHUPVRISHUVXDGLQJLQIRUPLQJSURYRNLQJ
RU GLUHFWLQJ WKH DXGLHQFH" :KDW DUH WKH GLIILFXOWLHV RI GHOLYHULQJ D FUHGLEOH LQYLWLQJ
LQWHUHVWLQJPHVVDJHJLYHQWKLVVLWXDWLRQ"

7KH VHFRQG VHFWLRQ RI WKH GRFXPHQW VKRXOG LQFOXGH IXOO SDUDJUDSKV GHVFULELQJ VSHFLILF
GHVLJQGHFLVLRQVWKDW\RXPDGHGXULQJWKHFRXUVHRIWKHSURMHFWDQGKRZWKHVHGHFLVLRQV
FRQQHFWWRWKHLQWHQGHGDXGLHQFH,QFOXGHDQLQGHSWKGLVFXVVLRQRIJHQHUDODQG
VSHFLILFGHVLJQGHFLVLRQV$QH[DPSOHRIDJHQHUDOGHVLJQGHFLVLRQPLJKWEHWKHW\SHIDFH
XVHG WKURXJKRXW WKH JUDSKLFV $Q H[DPSOH RI D VSHFLILF GHVLJQ GHFLVLRQ PLJKW EH D
GLVFXVVLRQRIKRZ\RXDUUDQJHGDQGVL]HGDOOWKHYLVXDOVLQDSDUWLFXODUIUDPHWRGUDZWKH
UHDGHU¶VH\HWKURXJKWKHPDWHULDO7KLVVKRXOGEHWKHPRVWVXEVWDQWLDOVHFWLRQRIWKHZULWH
XS

7KHWKLUGDQGILQDOVHFWLRQVKRXOGFRQQHFW\RXUSURMHFWWRWKHPDLQUHDGLQJVRIWKHVHPHVWHU
7KLVVHFWLRQVKRXOGGHPRQVWUDWHWKDW \RXXQGHUVWDQGHDFKDXWKRU¶VPDLQ SRLQWDQGWKDW
\RX¶UH DEOH WR FRQQHFW WKRVH SRLQWV WR \RXU SURMHFW 7KLV GLVFXVVLRQ FDQ GLVFXVV YLVXDO
UKHWRULFWKHUKHWRULFRIDQLPDWLRQYDULRXVDSSURDFKHVWRFODULW\LQLQIRUPDWLRQGHVLJQWKH
HWKLFDOGHVLJQRIYLVXDOVRURWKHUVXEMHFWVGLVFXVVHGLQWKHUHDGLQJVIURPFODVV

*UDGLQJ

7KHGHVLJQUDWLRQDOHZLOOEHJUDGHGDORQJZLWK \RXUILQDOYLGHR7KHEHWWHU \RXH[SODLQ
\RXUGHVLJQGHFLVLRQVWKHEHWWHUFKDQFH,ZLOOEHDEOHWRXQGHUVWDQG\RXUGLUHFWLRQ7KH
LPSRUWDQFHRIWKLVGRFXPHQWLVWRSURYHWKDW \RXUJUDSKLFVDUHFUHDWHGZLWKDWWHQWLRQWR
GHWDLODQGWKDW\RXXQGHUVWDQGWKHVWUHQJWKVDQGZHDNQHVVHVRIWKHJUDSKLFV\RXFUHDWHG

,WLVSRVVLEOHWKDW\RXVWUXJJOHGDQGVWUXJJOHGEXWWKHYLGHRVWLOOLVQRWYHU\HIIHFWLYH7KDW¶V
RND\EXWWHOOPHZKDW\RXVWUXJJOHGZLWKKRZ\RXWULHGWRRYHUFRPHWKDWVWUXJJOHDQG
ZKDW\RXPLJKWGRLI\RXKDGPRUHWLPH

0LVFHOODQHRXV


• 7KHUHLVQRUHTXLUHGRUPLQLPDOOHQJWKWKRXJK\RXVKRXOGQRWHP\H[SHFWDWLRQVDERXW
VSHQGLQJDIHZSDUDJUDSKVQRWVHQWHQFHVGLVFXVVLQJHDFKVHFWLRQ,ZRXOGEHZRUULHGWR
VHHDWKUHHSDJHGRFXPHQWDQGH[WUHPHO\ZRUULHGWRVHHDWZRSDJHGRFXPHQW
• ,QFOXGH\RXUQDPHDQGGDWHRQWKHGRFXPHQW
• 6XEPLWWHGDVDSGI


You might also like