TOWN of BRECKENRIDGE OPEN SPACE ADVISORY COMMISSION Monday, August 18, 2014 Lower Level Conference Room Breckenridge Town Hall 150 Ski Hill Road

TOWN OF BRECKENRIDGE OPEN SPACE ADVISORY COMMISSION Monday, August 18, 2014 Lower Level Conference Room Breckenridge Town Hall 150 Ski Hill Road

3:30pm Site Visit to Peaks Trail Realignment (Meet behind Town Hall on mountain bikes.)

5:30 Call to Order, Roll Call

5:35 Discussion/approval of Minutes – July 21, 2014 4

5:45 Discussion/approval of Agenda

5:50 Public Comment (Non-Agenda Items)

6:00 Staff Summary 2 • Field Season Update • Friends of Breckenridge Trails Update • Rocky Mountain Recreation and Wilderness Preservation Act Update • Forest Health Projects Update

6:15 Open Space 3 • Peaks Trail Connection • Weber Gulch Hut Environmental Assessment Draft Decision Notice 8 • 2015 Budget/Pro Forma

7:30 Adjourn

For further information, please contact the Open Space and Trails Program at 970-547-3155 (Scott) or 970-453-3371 (Chris).

Memorandum To: Breckenridge Open Space Advisory Commission From: Open Space Staff Re: August 18, 2014 Meeting

Staff Summary Field Season Update Work has continued on multiple summer projects on the 2014 work plan. The following projects have taken place since the previous 7/21 BOSAC meeting: • Completed Upper Turk’s Trail with help from the Volunteers for Outdoor Colorado and numerous volunteers. • Assisted contractor with the B-Line Trail extension. • Constructed portions of the ZL Trail extension, with the assistance of volunteers and the Rocky Mountain Youth Corps. • Initiated repairs on Sallie Barber Road with Summit County. • Constructed a portion of the Sunrise Point trail. • Planned and designed new trail projects for the 2014 and 2015 construction seasons (e.g. Aspen Alley, Weber Gulch, Wirepatch, and Mineral Hill).

Friends of Breckenridge Trails Update Since BOSAC’s prior meeting, two Friends of Breckenridge Trails events have occurred. The first event was our largest volunteer effort of the season, Upper Turk’s Trail. As has occurred annually for the last nine years, the Town partnered with Volunteers for Outdoor Colorado and Summit County and was able to complete the 4,000-foot project in two days with the help of 172 volunteers. The second event was our third volunteer day for the ZL Trail project which occurred just after press time for the packet.

We have scheduled one remaining Friends of Breckenridge Trails volunteer event this season, Make a Difference Day on 9/13. Staff strongly encourages BOSAC members to attend the season’s final volunteer date and help complete an important community trail connection.

Rocky Mountain Recreation and Wilderness Preservation Act The wilderness bill previously reviewed by BOSAC was presented to Town Council on 8/12. Staff will update BOSAC on Council’s comments at the 8/18 BOSAC meeting.

Forest Health Projects Update There are two primary forest health projects scheduled for 2014, both of which are currently underway. When completed the Iowa Hill project will remove all MPB-killed trees, deadfall materials, and select living lodgepole pine trees from 8.9 acres of the Iowa Hill site. The larger, joint Golden Horseshoe project with Summit County Government on Gibson Hill and above Summit Estates has commenced. The project’s road work is mostly completed; cutting activities should begin soon and are expected to be completed by late fall. Staff will update BOSAC on these projects until they are completed.

2 of 200

Open Space Peaks Trail Connection As discussed during the July meeting, staff seeks BOSAC’s input on the Peaks Trail connection proposed by the Breckenridge Ski Area under a USFS NEPA process. Following the scheduled BOSAC site visit to the flagged trail alignment, staff seeks any direction from BOSAC regarding the trail design.

Weber Gulch Hut Environmental Assessment Draft Decision Notice After a lengthy planning process, the Weber Gulch Hut Environmental Assessment Draft Decision Notice was delivered to the public on July 25th, thereby entering a 45-day appeal period. Appeals to the decision notice must be filed by the end of the appeal period, and can be filed only by groups or individuals that previously commented during the process.

Staff reviewed the Draft Decision Notice and found that the document is generally in agreement with the Town’s prior comments and overall support for the project. Included for reference are: the Town’s previous comment letter in response to the proposal’s Environmental Assessment, the Environmental Assessment, and the Draft Decision Notice.

Staff requests BOSAC review the attached documents and answer the following question: 1. Does BOSAC have any feedback for staff and Town Council regarding the attached Draft Decision Notice?

2015 Budget/Pro Forma Mark Truckey will present the open space pro forma in preparation for the 2015 budgeting process.

3 of 200 Town of Breckenridge July 21, 2014 Breckenridge Open Space Advisory Commission

Roll Call Chris Tennal called the July 21, 2014 BOSAC meeting to order at 5:50 pm. Other BOSAC members present included Jeffrey Bergeron, Elisabeth Lawrence, Elizabeth Miller, and Craig Campbell. Jeff Cospolich arrived at 6:00 pm. Staff members present were Peter Grosshuesch, Scott Reid, Mark Truckey and Chris Kulick. Gary Shimanowitz and Jeff Zimmerman of the Breckenridge Ski Resort and Shelly Grail from the USFS were also in attendance.

Approval of Minutes The minutes were approved as presented.

Public Comments There were no public comments.

Staff Summary Field Season Update Work has continued on multiple summer projects on the 2014 work plan, including: • Constructed portions of the ZL Trail extension, with the assistance of the Summit County Community Development department, the Rocky Mountain Youth Corps, and other dedicated volunteers. • Opened and repaired trails within Cucumber Gulch Preserve for the July 7th opening date. • Repaired several areas on the B&B, Barney Ford, Barney Flow, Iowa Hill, Upper Flume and Slalom Trails. • Improved drainage at two problematic areas on the Lower Flume and Middle Flume Trails. • Planned and designed new trail projects for the 2014 and 2015 construction seasons (e.g. Aspen Alley, Turk’s, Weber Gulch, Wirepatch, and Mineral Hill). • Addressed routine maintenance system-wide. • Realigned a portion of the Morning Thunder trail to avoid an incising drainage ditch. • Assisted contractor with the B-Line Trail extension.

Friends of Breckenridge Trails Update Since BOSAC’s prior meeting, two Friends of Breckenridge Trails events have occurred. One focused on construction of the ZL Trail and the other was a statewide weed pull that occurred in both Cucumber Gulch Preserve and along the River Trail. Although turnout for the ZL Trail project was strong, the statewide weed pull yielded few volunteers for Breckenridge.

This upcoming weekend (July 26-27) is one of the largest annual volunteer efforts for the Town and County. Volunteers for Outdoor Colorado (VOC) are hosting the Upper Turk’s Trail project in which 150 volunteers are sought for both days. The project also highlights VOC’s 30th anniversary and will include a ceremony with dignitaries on Saturday morning.

Staff strongly encouraged BOSAC members to attend one or both days to support this important project. There are also several more volunteer opportunities in 2014 which are listed on the Town website.

Blue River Corridor Update At its June 24th meeting, Town Council evaluated BOSAC’s input regarding the Blue River Corridor and Blue River restoration projects. Council voiced appreciation of BOSAC’s support for the two

Page 1 of 4

4 of 200 Town of Breckenridge July 21, 2014 Breckenridge Open Space Advisory Commission

river-based projects and accepted BOSAC recommendations. Future versions of the open space pro forma will reflect these financial commitments.

Forest Health Projects Update There are two primary forest health projects scheduled for 2014, both of which should begin in a matter of weeks. A contractor (P&A Tree Service) was selected for the Iowa Hill forest health project, and tree removal should begin later this week. The larger, joint Golden Horseshoe project with Summit County Government on Gibson Hill and above Summit Estates will commence once the contractor completes its current USFS Farmer’s Korner projects. Staff will update BOSAC on these projects until they are completed.

Ms. Miller – This a question unrelated to forest health. Is Baldy Mountain Shuttle a legitimate business? (Mr. Reid – We are looking into the legality of their operation and will report back to BOSAC with our findings.)

Council Update Ms. Lawrence presented a brief Council update, highlights included: • The start on Main Street Park has been pushed back. • The newly installed turf field will save 8 million gallons of water per year. • The skate park is being redesigned due to drainage issues. • The Train Park has opened • Council had a great housing tour in Boulder last Friday. The Holiday Neighborhood is very analogous to the Block 11 Master Plan.

Mr. Bergeron – Has the Council talked about the ice castle coming back, I am concerned about amount of water it used. (Ms. Lawrence – We have not talked about it yet.)

Open Space Peaks Trail Connection As discussed numerous times previously, Breckenridge Ski Resort (BSR) is working cooperatively through a USFS NEPA process at the Town’s request to extend the Peaks Trail connection across the ski area in an effort to divert recreational traffic from the Peaks Trail to town around Cucumber Gulch Preserve. The realigned Peaks Trail concept was a condition imposed by the Town in exchange for summer gondola operations and was reiterated in recent Town/USFS correspondence regarding BSR’s proposed on-mountain improvements.

Last week, BSR and USFS representatives met with Town staff to provide an update on the NEPA analysis. The Peaks Trail connection is being considered under the current BSR on-mountain improvements NEPA process, with a decision expected in summer 2015.

Mr. Bergeron – Is the proposed alignment flagged yet? (Mr. Zimmerman – Not yet we were waiting to hear from BOSAC.)

Mr. Cospolich – How long is the alignment and how much vertical gain does it have? (Mr. Shimanowitz – 6,000’ in length 300’ of vertical gain.)

Page 2 of 4

5 of 200 Town of Breckenridge July 21, 2014 Breckenridge Open Space Advisory Commission

Mr. Zimmerman – Beyond the Peak’s Connect Trail the proposed trails at the ski resort will be designed as novice flow trails that will be multi-directional, uphill access will not be restricted.

Ms. Miller – Why don’t we want people to use the trails through Cucumber Gulch? (Mr. Reid – We desire to lower the intensity of use in Cucumber Gulch, the proposed Peak’s Connect Trail will offer users another alternative to get to Town on our trail network and hopefully lower the number of trail users entering the Preserve.)

Ms. Miller – Will the signage be changed to deter users from entering the Gulch. (Mr. Reid - We hope it doesn’t come to that.)

Mr. Cospolich – How many bikers ride the trails at the ski resort on atypical day. (Mr. Zimmerman – A busy day at the ski resort for bike hauls is 125 individuals.)

Ms. Grail – Once the proposed alignment is flagged we will to do an organized hike with individuals interested in reviewing the proposed alignment.

Mr. Bergeron - I will reserve judgment on the proposed alignment. I would like to walk the corridor. I’m worried the added length and vertical gain will discourage its use.

Ms. Miller – Is this project to be funded by the ski resort. (Mr. Shimanowitz – Yes)

Mr. Tennal – I applaud the effort to make a legitimate interesting single-track connection.

Ms. Grail – The signage will be key to direct users to where we desire them to go.

Ms. Miller – How will this proposal impact the winter trailhead parking issues? (Mr. Shimanowitz - Not sure that it will one way or the other but the ski resort has an employee stationed at the lot until noon each day to dissuade non-trail users from using the Peak’s Trail parking area.)

Mr. Cospolich – I would encourage the ski resort build a technical DH trail because unlike the Town you have the lift infrastructure in place for the gravity crowd. It is to Breckenridge’s detriment that all the gravity investment is at Keystone.

BSR Runoff Update Gary Shimanowitz presented information related to the spring run-off at the ski resort. He described the spring 2014 run-off as very successful in the respect that the sediment catchments/inlets on the mountain were doing their job. Last year the inlets on Peak 8 were cleared out and that helped tremendously in-terms minimizing sediment being transported into the Gulch.

Mr. Bergeron – How does late snow impact run-off? (Mr. Shimanowitz – How quickly the temperatures warm up and severe rain events have more impact than late season snow. This year it was controlled as pretty well due to steady temps and no major rain events.)

Mr. Truckey – Are the inlets cleaned out yearly? (Mr. Shimanowitz – Yes.)

Page 3 of 4

6 of 200 Town of Breckenridge July 21, 2014 Breckenridge Open Space Advisory Commission

Mr. Reid – The ski resort was a financial partner on our recently completed Upper Cucumber Gulch restoration.

Next Meeting The next regularly scheduled meeting is on Monday, August 18, 2014, at the Breckenridge Town Hall, 150 Ski Hill Road.

Mr. Campbell motioned to adjourn the meeting, which was seconded by Mr. Bergeron.

The meeting was adjourned at 7:28 p.m.

Jeff Cospolich, Chair

Page 4 of 4

7 of 200 8 of 200 9 of 200 10 of 200 11 of 200 12 of 200 SUMMIT HUTS ASSOCIATION PROPOSED WEBER GULCH BACKCOUNTRY HUT ENVIRONMENTAL ASSESSMENT

DRAFT DECISION NOTICE

July 2014

USDA Forest Service White River National Forest Dillon Ranger District

13 of 200 The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD). 7R¿OHDFRPSODLQWRIGLVFULPLQDWLRQZULWH86'$'LUHFWRU2I¿FHRI&LYLO5LJKWV,QGHSHQGHQFH$YHQXH6::DVKLQJWRQ '&RUFDOO RU 7'' USDA is an equal opportunity provider and employer.

14 of 200 DRAFT Decision Notice Summit Huts Association Weber Gulch Backcountry Hut Project Environmental Assessment

USDA Forest Service Dillon Ranger District, White River National Forest Summit County, Colorado

DECISION AND REASONS FOR THE DECISION

$IWHUWKRURXJKO\FRQVLGHULQJWKH3XUSRVHDQG1HHGIRU$FWLRQLVVXHVUDQJHRIDOWHUQDWLYHVDQGDQDO\VHV SUHVHQWHGLQWKH6XPPLW+XWV$VVRFLDWLRQ 6+$ :HEHU*XOFK%DFNFRXQWU\+XW3URMHFW(QYLURQPHQWDO $VVHVVPHQW ($ DVZHOODVSXEOLFFRPPHQWVWKDWZHUHUHFHLYHG,DPDSSURYLQJ$OWHUQDWLYH±WKH 3URSRVHG$FWLRQ$OO0DQDJHPHQW5HTXLUHPHQWVLGHQWLILHGLQ7DEOHRIWKH($ DWWDFKHGKHUHDW $SSHQGL[$ DUHKHUHE\UHTXLUHGDVSDUWRIWKLVGHFLVLRQ

7KH6HOHFWHG$OWHUQDWLYHZLOODPHQG6+$¶V683WRLQFOXGHFRQVWUXFWLRQDQGRSHUDWLRQRIDEDFNFRXQWU\ KXW LQFOXGLQJDFFHVVWUDLOVDQGDGHGLFDWHGSDUNLQJORW RQ1)6ODQGVRQWKHQRUWKHUQDVSHFWRI%DOG 0RXQWDLQ7KHDWWDFKHGILJXUHLGHQWLILHVFRPSRQHQWVRIWKH6HOHFWHG$OWHUQDWLYHZKLFKLQFOXGH

:HEHU*XOFK%DFNFRXQWU\+XW

6+$LVDSSURYHGWRFRQVWUXFWDEDFNFRXQWU\KXWDQGZKLOHDUFKLWHFWXUDOGHVLJQVKDYHQRWEHHQ FRPSOHWHGLWFDQEHRQHRUWZRVWRULHVDQGEHWZHHQDQGVTXDUHIHHWLQVL]H7KHRYHUQLJKW FDSDFLW\RIWKHKXWLVQRWWRH[FHHGJXHVWVLQDGGLWLRQWRDVPDOOKXWPDVWHU¶VTXDUWHUV7KHKXWZLOOEH GHVLJQHGWRFRQIRUPWRWKH)RUHVW6HUYLFH¶V%XLOW(QYLURQPHQW,PDJH*XLGH %(,*

7KHKXWLVDXWKRUL]HGIRUZLQWHUXVHRQO\EHWZHHQWKHWKLUGZHHNLQ1RYHPEHUDQG$SULOWKRIHDFK \HDU

*XHVW$FFHVVWRWKH:HEHU*XOFK%DFNFRXQWU\+XW

*XHVWDFFHVVWRWKHKXWZLOOEHDFFRPPRGDWHGE\IROORZLQJDPL[RIH[LVWLQJDQGQHZURDGVWUDLOVWKDW EHJLQDWWKHH[LVWLQJSallie Barber Road7UDLOKHDG+XWXVHUVZLOODFFHVVWKHKXWDVIROORZV

&OLPE W\SLFDOO\ZLWKEDFNFRXQWU\WRXULQJJHDURUVQRZVKRHV Sallie Barber RoadIRU DSSUR[LPDWHO\PLOHV YHUWLFDOIHHW 7KLVLVODEHOHGDV7UDLO6HJPHQW$

$WWKH6DOOLH%DUEHU0LQH DWWKHVXPPLWRIWKHFOLPEXSSallie Barber Road KXWXVHUVZRXOG WXUQOHIW VRXWK DQGDVFHQGDSSUR[LPDWHO\PLOH YHUWLFDOIHHW RIWKHH[LVWLQJNightmare on BaldyWUDLO7KLVLVODEHOHGDV7UDLO6HJPHQW%

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW DN-1 15 of 200 Draft'HFLVLRQ1RWLFH

$WWKDWSRLQWKXWXVHUVZRXOGWXUQOHIW HDVW RQWRDQHZVHJPHQWRIVLQJOHWUDFNWUDLOWKDWLV SURSRVHGWREHFRQVWUXFWHG7KLVQHZVHJPHQWRIVLQJOHWUDFNZRXOGFOLPEDSSUR[LPDWHO\ PLOHDQGYHUWLFDOIHHW SDVVLQJUpper Trail of Tears FRQWLQXLQJHDVWZDUGIRU DSSUR[LPDWHO\PLOH YHUWLFDOIHHW WRWKHSURSRVHGKXW7KHVHDUHODEHOHGDV7UDLO 6HJPHQWV&DQG(UHVSHFWLYHO\

3DUNLQJ

$GHGLFDWHGRYHUQLJKWSDUNLQJDUHD DSSUR[LPDWHO\VSDFHV LVDSSURYHGWREHFRQVWUXFWHGMXVWHDVWRI WKHH[LVWLQJSallie Barber Road7UDLOKHDGRQWKHQRUWKVLGHRI)UHQFK*XOFK5RDG DWWKHLQWHUVHFWLRQ ZLWK+XPEXJ+LOO

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

&RQVWUXFWLRQDQG0DLQWHQDQFH$FFHVVWRWKH3URSRVHG:HEHU*XOFK %DFNFRXQWU\+XW

7KHKXWZLOOOLNHO\EHDVVHPEOHGLQPRGXODUVHFWLRQVRIIVLWHWKHQWUDQVSRUWHGWRWKHFRQVWUXFWLRQVLWHYLD KHOLFRSWHUVDQGDOOWHUUDLQYHKLFOHV $79V )RUFRQVWUXFWLRQDQGRQJRLQJPDLQWHQDQFHDFFHVV0W%DOG\ 5RDGZLOOEHXVHGE\PRWRUL]HGYHKLFOHV-XVWEH\RQGWKH,RZD0LOODQH[LVWLQJ:'URDGZLOOEH XWLOL]HGIRUDSSUR[LPDWHO\IHHW7KHUpper Trail of Tears DVLQJOHWUDFNWUDLORQ1)6ODQGV LV DSSURYHGWREHZLGHQHGDQGLPSURYHGWRFUHDWHDLQFKZLGH$79WUDLO)URPWKDWSRLQWWKHWUDLO EHFRPHVDGXDOSXUSRVHDFFHVVURXWHIRUWKHILQDO DSSUR[LPDWHO\ IHHWWRWKHKXWDFFRPPRGDWLQJ QRQPRWRUL]HGKXWXVHUVLQWKHZLQWHUDVZHOODVPRWRUL]HG $79 DGPLQLVWUDWLYHXVHLQWKHVXPPHU 5HIHUWR6HFWLRQV³'´DQG³(´RQWKHDWWDFKHGILJXUH

3XEOLFPRWRUL]HGXVHRIWKH$79URXWHZLOOEHVWULFWO\SURKLELWHG*DWHVDQGVLJQDJHZLOOEHLQVWDOOHGDW NH\LQWHUVHFWLRQVDORQJWKHSURSRVHG$79URXWHWRGLVFRXUDJHSXEOLFPRWRUL]HGXVH

&XWVDQGILOOVUHVXOWLQJIURPFRQVWUXFWLRQRIWKHSURSRVHG$79URXWHZLOOEHUHYHJHWDWHGWRSURPRWHVRLO VWDELOL]DWLRQ

6XSHUYLVRU¶V&ORVXUH

7KH$QDO\VLV$UHDLVIXQFWLRQDODVIRUDJLQJGHQQLQJGLXUQDOVHFXULW\KDELWDWDQGLVSDUWRID&DQDGD O\Q[PRYHPHQWFRUULGRU$FFRUGLQJO\DZLOGOLIHFRQVHUYDWLRQPHDVXUH²LQWKHIRUPRID)RUHVW 6XSHUYLVRU¶VFORVXUH²KDVEHHQLQFOXGHGLQWKH3URSRVHG$FWLRQWRPLQLPL]HGLVWXUEDQFHWR&DQDGDO\Q[ 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW DN-2 16 of 200 DOVREHQHILWWLQJRWKHUIRUHVWFDUQLYRUHVDQGHON7KHFRQVHUYDWLRQPHDVXUHLVDUHTXLUHGFRPSRQHQWRIP\ GHFLVLRQ

'XULQJWKHVXPPHU7UDLO6HJPHQW³(´ZLOOEHFORVHG VLJQHGDQGJDWHG DWLWVLQWHUVHFWLRQZLWKUpper Trail of Tears 7UDLO6HJPHQW' DQGSURSRVHG7UDLO6HJPHQW³&´7KLV)RUHVW6XSHUYLVRU¶VFORVXUHLV GHVLJQHGWRSUHYHQWKLNLQJDQGELNLQJXVHRI7UDLO6HJPHQW³(´WRWKHKXWRXWVLGHWKHZLQWHURSHUDWLQJ VHDVRQ5HIHUWR)LJXUHIRUWKHORFDWLRQRI7UDLO6HJPHQW³(´

BACKGROUND

3XUSRVHDQG1HHGIRU$FWLRQ

&RORUDGRKDVRQHRIWKHPRVWZHOOHVWDEOLVKHGDQGKHDYLO\XVHGQHWZRUNVRIQRQPRWRUL]HGEDFNFRXQWU\ KXWVLQWKH8QLWHG6WDWHV7KHVHKXWVKDYHEHHQYHU\SRSXODUZLWKWKHSXEOLFVLQFHWKHIRXQGLQJRIWKH WK0RXQWDLQ'LYLVLRQ+XW$VVRFLDWLRQ 70+$ LQWKHPLGVZKLFKPDQDJHVDQGDFWVDV UHVHUYDWLRQDJHQWIRUKXWVLQFOXGLQJWKRVHPDQDJHGE\6+$6LQFHWKH70+$KDVRSHUDWHGQHDU FDSDFLW\GXULQJWKHKLJKVHDVRQ GHILQHGDVEHWZHHQODWH'HFHPEHUWKURXJKODWH0DUFK $GGLWLRQDOO\ PDQ\RIWKHKXWVH[SHULHQFHPRGHUDWHOHYHOVRIXVHWKURXJKRXWWKHVXPPHUVHDVRQ

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³$OWHUQDWLYHV&RQVLGHUHGEXW(OLPLQDWHG´VHFWLRQLQ&KDSWHURIWKH($IRUPRUHLQIRUPDWLRQRQWKH IDFWRUVWKDWJRLQWRDKXWORFDWLRQDVZHOODVRWKHUDOWHUQDWLYHORFDWLRQVWKDWZHUHFRQVLGHUHGEXW HOLPLQDWHG

DECISION RATIONALE

,QUHDFKLQJP\GHFLVLRQ,UHOLHGKHDYLO\XSRQDQ,QWHUGLVFLSOLQDU\ ,' 7HDPFRPSULVHGRI)RUHVW6HUYLFH UHVRXUFHVSHFLDOLVWVZKRDQDO\]HGWKHHIIHFWVRIWKHWZRDOWHUQDWLYHVGRFXPHQWHGLQWKH($,IXOO\ FRQVLGHUHGSXEOLFIHHGEDFNUHFHLYHGGXULQJWKHVFRSLQJDQG($FRPPHQWSHULRGV,QDGGLWLRQ, FRQVLGHUHGWKLVSURSRVDOLQWKHFRQWH[WRIRSSRUWXQLWLHVIRUGLVSHUVHGUHFUHDWLRQWKURXJKRXW6XPPLW &RXQW\

1 Filled reservations do not equate to 100 percent occupancy, as many parties will reserve an entire hut for a group that does not completely fill all of its beds. Mid-week availability is common throughout the season. Zobbe, 2013 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW DN-3 17 of 200 Draft'HFLVLRQ1RWLFH

6+$:51)0LVVLRQ

6+$LVDORFDOO\EDVHGQRQSURILWFRUSRUDWLRQDQGVSHFLDOXVHSHUPLWWHHRQWKH:KLWH5LYHU1DWLRQDO )RUHVW,WRSHUDWHVIRXUEDFNFRXQWU\KXWVLQ6XPPLWDQG3DUNFRXQWLHVHPSKDVL]LQJQRQPRWRUL]HGVHOI UHOLDQWEDFNFRXQWU\WUDYHODQGUHFUHDWLRQDVZHOODVDFRQQHFWLRQZLWKWKHQDWXUDOHQYLURQPHQW6+$¶V PLVVLRQLVYHU\PXFKLQDOLJQPHQWZLWKWKDWRIWKH)RUHVW6HUYLFHDVZHFRQWLQXDOO\VHHNZD\VWREHWWHU HQJDJHSHRSOHZLWKWKHLU1DWLRQDO)RUHVWV

1)6/DQGVLQWKH$QDO\VLV$UHD

7KHVHDUHSXEOLFODQGVWKDWDUHPDQDJHGIRUDOOWRHQMR\DQGWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXW ZLOORIIHUDQRWKHURSSRUWXQLW\IRUSHRSOHWRH[SHULHQFHWKHLU1DWLRQDO)RUHVW7KLVSURSRVDOLVIXOO\ FRQVLVWHQWZLWKSHUWLQHQWPDQDJHPHQWGLUHFWLRQIRXQGLQWKH:51)¶V)RUHVW3ODQ

$VDJDWHZD\WRWKH:KLWH5LYHU1DWLRQDO)RUHVWDQGJLYHQLWVSUR[LPLW\WR)URQW5DQJHFRPPXQLWLHV 6XPPLW&RXQW\LVDQH[WUHPHO\LPSRUWDQWDQGSRSXODU\HDUURXQGUHFUHDWLRQGHVWLQDWLRQ$OWKRXJK LQERXQGVVNLLQJDWWKHIRXU6XPPLW&RXQW\VNLDUHDVUHSUHVHQWVWKHPRVWSURPLQHQWZLQWHUDFWLYLWLHV ORFDOO\GLVSHUVHGFURVVFRXQW\DQGEDFNFRXQWU\VNLLQJDUHLPSRUWDQWUHFUHDWLRQDOFRPSRQHQWVWRORFDOV DQGWRXULVWVDOLNH

7KH$QDO\VLV$UHDRQWKHQRUWKVLGHRI%DOG0RXQWDLQUHFHLYHVKLJK\HDUURXQGUHFUHDWLRQDOXVHWKLVDUHD LVSDUWLFXODUO\LPSRUWDQWLQWKHHDUO\ZLQWHUDVSallie Barber RoadLVRIWHQRQHRIWKHILUVWORFDWLRQVLQ 6XPPLW&RXQW\WRUHFHLYHDQGUHWDLQHQRXJKVQRZWRVXSSRUWFURVVFRXQWU\VNLLQJ7KHSRSXODULW\RI Sallie Barber RoadLVGXHLQSDUWWRKRZDFFHVVLEOHLWLVIURP%UHFNHQULGJH

Note7KHDSSURYHGKXWVLWHLVFRQVLGHUHGDVSHFLDOXVHDUHDDQGORFDWHGRQSXEOLFODQGVFXUUHQWO\RSHQWR PLQHUDOHQWU\+RZHYHUWKH)RUHVW6HUYLFHGRHVQRWQHFHVVDULO\UHTXHVWPLQHUDOZLWKGUDZDOVRIVPDOO VSHFLDOXVHDUHDVVXFKDVFDPSJURXQGVUHFUHDWLRQVLWHVVFHQLFDUHDVRUURDGVLGH]RQHV3RWHQWLDO LQFRPSDWLEOHXVHVEHWZHHQUHFUHDWLRQDQGPLQLQJLQVXFKDUHDVFDQEHDGGUHVVHGE\UHIXVDOWRFRQVHQWWR OHDVLQJRUUHVWULFWLYHVWLSXODWLRQVDVVRFLDWHGZLWKDSSURYDORIPLQLQJSODQVRIRSHUDWLRQV

'LVSHUVHG5HFUHDWLRQDQGWKH2SSRUWXQLWLHVIRU6ROLWXGH

7KHVHQVHRIVROLWXGHWKDWFDQDFFRPSDQ\FURVVFRXQWU\DQGEDFNFRXQWU\VNLLQJLVDQLPSRUWDQWSDUWRIWKH RYHUDOOUHFUHDWLRQDOH[SHULHQFHWKURXJKRXWWKH$QDO\VLV$UHD,ZLVKWRSRLQWRXWWKDWWKHUHDUHDQGZLOO FRQWLQXHWREHDEXQGDQWRSSRUWXQLWLHVIRUEDFNFRXQWU\DFWLYLWLHVDQGVROLWXGHZLWKLQWKH$QDO\VLV$UHDDV ZHOODVRQWKH:51)WKURXJKRXW6XPPLW&RXQW\$QDUJXPHQWKDVEHHQPDGHWKDWEDFNFRXQWU\DUHDV KDYHEHHQORVWWKURXJKRXW6XPPLW&RXQW\RYHUWKH\HDUVWRGHYHORSHGVNLLQJDWWKHIRXU6XPPLW&RXQW\ UHVRUWV7KDWVDLG no backcountry terrain will be lost as result of my approvalDQGWKLVDSSURYDOGRHVQRW LQFUHDVHDFFHVVWREDFNFRXQWU\VNLLQJRQ%DOG0RXQWDLQVNLHUVZLOOVWLOOQHHGWRJHWWKHUHRQWKHLURZQ SRZHU%H\RQGVROLWXGH,XQGHUVWDQGWKDWEDFNFRXQWU\VNLHUVVHDUFKRXWXQWUDFNHGVQRZ:KLOH FRQVWUXFWLRQRIWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWZLOOFHUWDLQO\DGGWRXVHRIVRPHEDFNFRXQWU\

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW DN-4 18 of 200 WHUUDLQRQ%DOG0RXQWDLQ,EHOLHYHWKLVLVDJRRGXVHRISXEOLFODQGVDQGLVFRQVLVWHQWZLWKWKH :51)6+$PLVVLRQRISURPRWLQJHQMR\PHQWRIWKHQDWXUDOHQYLURQPHQW

:KLOHRSSRUWXQLWLHVIRUVROLWXGHFDQEHIRXQGRFFDVLRQDOO\RQSallie Barber RoadLWLVPRUHQRWDEOHIRU LWVFRQQHFWLRQWRDQDUUD\RI)RUHVWWUDLOVDFURVV%DOG0RXQWDLQ²PDQ\RIZKLFKSURYLGHWKHXVHUZLWK YDU\LQJGHJUHHVRIVROLWXGHGHSHQGLQJRQKRZIDURIIWKHEHDWHQSDWKRQHLVZLOOLQJWRYHQWXUH7KH )RUHVW6HUYLFHUHFHLYHGFRPPHQWVWKDWWKHSRWHQWLDOIRUDQDGGLWLRQDOVNLHUVSHUGD\DVVRFLDWHGZLWKWKH SURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWZLOOHOLPLQDWHWKHVHQVHRIVROLWXGHWKDWFDQEHIRXQGRQWUDLOV WKDWEUDQFKRIIRISallie Barber RoadLQFOXGLQJNightmare on BaldyDQGWKHTrail of Tears7RSXWLW LQWRFRQWH[WWKH6HOHFWHG$OWHUQDWLYHLQFRUSRUDWHVDWRWDORIPLOHVRIURDGVDQGWUDLOVWRDFFHVVWKH SURSRVHG:HEHU*XOFKEDFNFRXQWU\KXW3.5 miles out of literally hundreds of miles of trails across the WRNF in Summit County alone$SSUR[LPDWHO\PLOHVRIWKLVWRWDODUHDWWULEXWDEOHWRSallie Barber RoadDQGDQRWKHUPLOHVDUHQHZWUDLOVWKDWZLOOEHEXLOWVSHFLILFDOO\WRDFFHVVWKHSURSRVHG:HEHU *XOFKEDFNFRXQWU\KXW7KDWOHDYHVPLOHRIWKHH[LVWLQJNightmare on BaldyWUDLOWKDWZLOOH[SHULHQFH KLJKHUXVH,QWKHFRQWH[WRIWKHQXPEHURIWUDLOVWKDWRIIHURSSRUWXQLWLHVIRUDEDFNFRXQWU\H[SHULHQFHDQG VROLWXGHWKURXJKRXW6XPPLW&RXQW\,DPFRQYLQFHGWKDWWKLVVPDOOLPSDFWWRGD\XVHUVLVRXWZHLJKHGE\ WKHUHFUHDWLRQDORSSRUWXQLWLHVWKDWWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWZLOOEULQJWRSHRSOHZKR ZDQWWRXVHWKHLU1DWLRQDO)RUHVW

6DOOLH%DUEHU5RDG7UDLOKHDG

7KHSallie Barber Road7UDLOKHDGKDVOLPLWHGSDUNLQJDYDLODEOHDQGDVDUHVXOWRIWKHSRSXODULW\RIWKLV DUHDSDUNLQJEHFRPHVDQLVVXHWKURXJKRXWWKHZLQWHU7KH)RUHVW6HUYLFHDQG6+$IDFWRUHGWKLVLQWRWKH 3URSRVHG$FWLRQE\LQFOXGLQJWKHKXWVSHFLILFSDUNLQJDUHDORFDWHGHDVWRIWKHH[LVWLQJGD\XVHSDUNLQJ DUHD7KHSDUNLQJORWKDVEHHQSURSHUO\VL]HGWRDFFRPPRGDWHDQRYHUODSLQKXWSDUWLHVDVZHOODVVSDFHV DOORFDWHGIRURYHUQLJKWXVH$VDUHVXOW,GRQRWDQWLFLSDWHDQ\FRQIOLFWVEHWZHHQGD\XVHUVDQGKXWJXHVWV DWWKHSallie Barber Road7UDLOKHDG

&KDQJHVWRWKH3URSRVHG$FWLRQDQG$GGLWLRQDO5HTXLUHPHQWV

5HPRYLQJWKHVXPPHUFRPSRQHQWIURPWKHSURSRVDODGGUHVVHGVRPHLPSRUWDQWLVVXHV²SULPDULO\ ZLOGOLIHDQGUHFUHDWLRQ7REHFOHDUWKH6HOHFWHG$OWHUQDWLYHGRHVQRWDSSURYHVXPPHUXVHVDWWKHKXW DQGQRVLWHVSHFLILF1(3$DQDO\VLVKDVEHHQSHUIRUPHGRQVXPPHUXVHV

$VLQGLFDWHGWKURXJKRXWWKH($DQG5HVSRQVHWR&RPPHQWV,DPUHTXLULQJ6+$WRFRRUGLQDWHZLWKP\ VWDIIDWWKH'LOORQ5DQJHU'LVWULFWDVZHOODVVWDIIZLWKWKH7RZQRI%UHFNHQULGJHDQG6XPPLW&RXQW\ IRUWKHSUHSDUDWLRQRIDQDQQXDORSHUDWLRQVSODQIRUWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXW7KH DQQXDORSHUDWLRQVSODQVZLOOGHILQHPDQDJHPHQWRIWKHSDUNLQJORWGXULQJWKHKXW¶VRSHUDWLQJVHDVRQWR PLQLPL]HWKHFKDQFHIRUFRQIOLFWEHWZHHQKXWJXHVWVDQGGD\XVHUVDWWKHSallie Barber Road7UDLOKHDG 2 This is considered a “worst case scanario” and assuming 100 percent occupancy of the hut. It acounts for skiers who are both accessing and departing from the hut throughout the day. Refer to page 3-12 of the EA. 3 This does not account for the 0.6 mile ATV route that would be used in the summer from Mt. Baldy Road. 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW DN-5 19 of 200 Draft'HFLVLRQ1RWLFH

)XUWKHUPRUHWKHRSHUDWLRQVSODQZLOODGGUHVVPDLQWHQDQFHRIWKHSDUNLQJDUHDGXULQJWKHZLQWHUDQG VXPPHU

&RQVLGHUDWLRQRID/RZHU&DSDFLW\+XW

7KURXJKRXWWKH($WKHLPSDFWVWRDOOELRORJLFDOSK\VLFDODQGKXPDQUHVRXUFHVDUHDQDO\]HGEDVHGRQD KXWZLWKDQRYHUQLJKWFDSDFLW\RISHRSOH+RZHYHUWKURXJKRXWERWKWKHVFRSLQJDQG($FRPPHQW SHULRGVWKHVXJJHVWLRQZDVPDGHWRUHGXFHWKHFDSDFLW\WRURXJKO\HLJKWSHUVRQVWRDGGUHVVSRWHQWLDO LPSDFWVRQUHFUHDWLRQWUDIILFDQGSDUNLQJLQWKHDQDO\VLVDUHD$OWKRXJKWKLVFRQFHSWLVLQFOXGHGLQWKH ³$OWHUQDWLYHVDQG'HVLJQ&RPSRQHQWV&RQVLGHUHG%XW(OLPLQDWHGIURP'HWDLOHG$QDO\VLV´VHFWLRQRIWKH ($ SDJHVWKURXJK ,KDYHIXUWKHUFRQVLGHUHGWKLVRSWLRQLQPDNLQJP\GHFLVLRQ7KHSRWHQWLDO LPSDFWVRIDKXWZLWKDQRYHUQLJKWFDSDFLW\RIYHUVXVDUHGLVSOD\HGLQWKHIROORZLQJWDEOH Note: Although most of the analyses in the EA assume an average hut occupancy of 90 percent across the operating season, the following table uses 100 percent for comparative purposes.

7DEOH'1 6XPPDU\&RPSDULVRQRI+XW&DSDFLW\,PSDFWV

+87&$3$&,7< +87&$3$&,7< $QQXDO8VHU'D\V SHRSOH SHRSOH x KXWXVHU XVHUGD\7KHUHIRUHDVLQJOHJXHVWZKRVWD\V IRUQLJKWVDFFRXQWVIRUXVHUGD\V x $VVXPHVD'D\2SHUDWLQJ6HDVRQ $YHUDJH'DLO\9HKLFOHV WRYHKLFOHV WRYHKLFOHV $VVXPHVDQDYHUDJHYHKLFOHRFFXSDQF\RI x 'RHVQRWDFFRXQWIRUSDUWLHVVWD\LQJIRUPXOWLSOHQLJKWV 'DLO\+XW8VHUVRQSallie Barber RoadDQGNightmare on Baldy VNLHUV VNLHUV x $FFRXQWVIRUERWKDUULYLQJDQGGHSDUWLQJSDUWLHV x $VVXPHVHDFKSDUW\VWD\VIRUDVLQJOHQLJKW $YHUDJH'DLO\%DFNFRXQWU\8VH2Q%DOG\7HUUDLQ VNLHUV VNLHUV x $VVXPHRIKXWJXHVWVYHQWXUHLQWREDFNFRXQWU\

0\FRQFOXVLRQLVWKDWDGGLWLRQDORYHUQLJKWJXHVWVZLOOKDYHDPLQRULPSDFWRQUHFUHDWLRQWUDIILFDQG SDUNLQJLQWKH$QDO\VLV$UHDUHODWLYHWRFXUUHQWXVH7KHUHIRUHUHGXFLQJWKHRYHUQLJKWFDSDFLW\WRHLJKWLV QRWZDUUDQWHG

2WKHU$OWHUQDWLYHV&RQVLGHUHG

1RDOWHUQDWLYHVWRWKH3URSRVHG$FWLRQZHUHDQDO\]HGLQGHWDLOLQWKH($KRZHYHUPXOWLSOHDOWHUQDWLYHV DQGGHVLJQFRPSRQHQWVZHUHFRQVLGHUHGHDUO\LQWKH1(3$SURFHVV7KHVHLQFOXGHGFKDQJHVWRKXW ORFDWLRQKXWGHVLJQWUDLOKHDGORFDWLRQVDQGWUDLODFFHVV(DFKFRQFHSWZDVWKRURXJKO\FRQVLGHUHGE\WKH )RUHVW6HUYLFH 6+$ZDVFRQVXOWHGDVQHFHVVDU\ DQGIRUDPL[RIRSHUDWLRQDOUHFUHDWLRQDODQG HQYLURQPHQWDOIDFWRUVQRQHZHUHFDUULHGIRUZDUGLQWRGHWDLOHGDQDO\VLV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW DN-6 20 of 200 $VGLVFXVVHGSUHYLRXVO\VXJJHVWLRQVZHUHPDGHWRPLQLPL]HWKHRYHUQLJKWFDSDFLW\RIWKHSURSRVHG :HEHU*XOFKEDFNFRXQWU\KXWLQRUGHUWRSUHVHUYHDPRUHLQWLPDWHJXHVWH[SHULHQFHDWWKHKXWDQGRQ WUDLOVWKDWZRXOGEHXVHGWRDFFHVVLW%DFNFRXQWU\KXWVKDYHKLJKRYHUKHDGIRUPDQDJHPHQWRSHUDWLRQV DQGXSNHHSDFDSDFLW\RISHRSOHSOXVKXWPDVWHU¶VTXDUWHUVZDVGHWHUPLQHGWREHVWEDODQFHWKHVH IDFWRUV)RUUHIHUHQFHRWKHU6+$PDQDJHGKXWVUDQJHLQFDSDFLW\IURPWRSHRSOH

$OWHUQDWLYHWUDLOKHDGORFDWLRQVDQGDFFHVVWUDLOVZHUHVXJJHVWHGE\FRPPHQWHUVGXULQJWKHVFRSLQJSHULRG :KLOHWKH)RUHVW6HUYLFHDSSUHFLDWHVWKHVHVXJJHVWLRQVQRQHRIWKHVHORFDWLRQVZHUHGHHPHGVXLWDEOHGXH WROLPLWHGDYDLODEOHSDUNLQJVSDFHFXUUHQWUHFUHDWLRQDOXVHDWWKHVHWUDLOKHDGVDQGWKHXQDYDLODELOLW\RI RYHUQLJKWSDUNLQJ7KHVXJJHVWLRQWRFRQILQHKXWXVHUVWRWKHROGNightmare on Baldy DOLJQPHQW LQRUGHU WRDYRLGPLQLPL]HWUDLOFRQIOLFWVZLWKGD\XVHUVRQWKHUHDOLJQHGNightmare on BaldyWUDLO ZDVQRWFDUULHG IRUZDUGEHFDXVHRILWVVWHHSQHVVDQGGLIILFXOW\IRUDVFHQGLQJGHVFHQGLQJRQVQRZSDUWLFXODUO\ZLWK EDFNSDFNVDQGJHDU

PUBLIC INVOLVEMENT

2Q2FWREHUDVFRSLQJQRWLFHZDVUHOHDVHGWRWKHSXEOLFLQLWLDWLQJDGD\FRPPHQWSHULRG $GGLWLRQDOO\DSXEOLFRSHQKRXVHZDVKHOGRQ1RYHPEHUDWWKH6WHSKHQ&:HVW,FH$UHQDLQ %UHFNHQULGJH5HSUHVHQWDWLYHVZHUHSUHVHQWIURPWKH:51)DQG6+$WRDQVZHUTXHVWLRQVDQGSURYLGH DGGLWLRQDOLQIRUPDWLRQRQWKHSURMHFW

7KHOHWWHUVWKDWZHUHUHFHLYHGGXULQJVFRSLQJZHUHXWLOL]HGE\WKH)RUHVW6HUYLFH,QWHUGLVFLSOLQDU\ ,' 7HDPWRLGHQWLI\VXEVWDQWLYHLVVXHVDQGWRFRQVLGHUSRWHQWLDODOWHUQDWLYHVWRWKH3URSRVHG$FWLRQ$IWHU UHYLHZLQJSXEOLFFRPPHQWVDVZHOODVLQWHUQDOFRQFHUQVUDLVHGE\)RUHVW6HUYLFHVSHFLDOLVWVDOLVWRI LVVXHVZDVJHQHUDWHGWKDWJXLGHGWKH($DQDO\VLV,VVXHVDUHLGHQWLILHGLQ&KDSWHURIWKH($

,Q$XJXVWWKH($ZDVUHOHDVHGIRUSXEOLFUHYLHZDQGFRPPHQW,QUHVSRQVHWRWKHUHOHDVHRIWKH ($DWRWDORIFRPPHQWOHWWHUVZHUHUHFHLYHG7KHVXEVWDQWLYHFRPPHQWVLQFOXGHGLQWKRVH FRPPHQWOHWWHUVIRUPWKHEDVLVIRUWKH5HVSRQVHWR&RPPHQWVZKLFKLVLQFOXGHGZLWKWKLV'HFLVLRQ 1RWLFH

CONSISTENCY WITH OTHER LAWS AND REGULATIONS

7KLVGHFLVLRQLVFRQVLVWHQWZLWKWKH:KLWH5LYHU1DWLRQDO)RUHVW/DQGDQG5HVRXUFH0DQDJHPHQW 3ODQ )RUHVW3ODQ DVUHTXLUHGE\WKH1DWLRQDO)RUHVW0DQDJHPHQW$FWDQGDOORWKHUODZVUHJXODWLRQVDQG SROLFLHVWKDWJRYHUQ)RUHVW6HUYLFHDFWLRQV:LWKPRGLILFDWLRQVPDGHPLGZD\WKURXJKWKH1(3$ SURFHVVWKHSURMHFWZDVGHVLJQHGWRFRQIRUPWRWKH)RUHVW3ODQDQGDOORWKHUODZVUHJXODWLRQVDQG SROLFLHV6LWHVSHFLILF0DQDJHPHQW5HTXLUHPHQWV 7DEOHRIWKH($ DQG)RUHVW3ODQVWDQGDUGVDQG JXLGHOLQHVZLOOEHDSSOLHGDVDSSURSULDWHWRPHHW)RUHVW3ODQJRDOVDQGGHVLUHGFRQGLWLRQV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW DN-7 21 of 200 Draft'HFLVLRQ1RWLFH

,QDGGLWLRQWKH6HOHFWHG$OWHUQDWLYHPHHWVUHTXLUHPHQWVXQGHUWKHIROORZLQJODZVUHJXODWLRQVDQG SROLFLHV

x $PHULFDQVZLWK'LVDELOLWLHV$FW $'$ RI

x &OHDQ$LU$FWRIDVDPHQGHG

x &OHDQ:DWHU$FWRIDVDPHQGHG

x (QGDQJHUHG6SHFLHV$FWRIDVDPHQGHG

x 1DWLRQDO(QYLURQPHQWDO3ROLF\$FWRIDVDPHQGHG

x 1DWLRQDO)RUHVW6NL$UHD3HUPLW$FWRIDVDPHQGHG

x 1DWLRQDO+LVWRULF3UHVHUYDWLRQ$FW 1+3$ RIDVDPHQGHG

x 3URWHFWLRQRI:HWODQGV([HFXWLYH2UGHU

OPPORTUNITY TO OBJECT THE PROPOSED PROJECT

7KLVSURSRVHGSURMHFWLVVXEMHFWWRWKHREMHFWLRQSURFHVVSXUVXDQWWR&)5VXESDUWV$DQG% 2EMHFWLRQVZLOORQO\EHDFFHSWHGIURPWKRVHZKRKDYHSUHYLRXVO\VXEPLWWHGVSHFLILFZULWWHQFRPPHQWV UHJDUGLQJWKHSURSRVHGSURMHFWGXULQJWKHFRPPHQWSHULRGLQDFFRUGDQFHZLWK D ,VVXHVUDLVHGLQ REMHFWLRQVPXVWEHEDVHGRQSUHYLRXVO\VXEPLWWHGWLPHO\DQGVSHFLILFZULWWHQFRPPHQWVUHJDUGLQJWKH SURSRVHGSURMHFWXQOHVVEDVHGRQQHZLQIRUPDWLRQDULVLQJDIWHUWKHGHVLJQDWHGFRPPHQWRSSRUWXQLWLHV

,QFRUSRUDWLRQRIGRFXPHQWVE\UHIHUHQFHLVQRWDOORZHGH[FHSWIRUWKHIROORZLQJLWHPVWKDWPD\EH UHIHUHQFHGE\LQFOXGLQJGDWHSDJHDQGVHFWLRQRIWKHFLWHGGRFXPHQWDORQJZLWKDGHVFULSWLRQRILWV FRQWHQWDQGDSSOLFDELOLW\WRWKHREMHFWLRQ $OORUDQ\SDUWRID)HGHUDOODZRUUHJXODWLRQ )RUHVW 6HUYLFHGLUHFWLYHVDQGODQGPDQDJHPHQWSODQV 'RFXPHQWVUHIHUHQFHGE\WKH)RUHVW6HUYLFHLQWKH SURSRVHGSURMHFWHQYLURQPHQWDODQDO\VLVGRFXPHQWWKDWLVVXEMHFWWRREMHFWLRQ$OORWKHUGRFXPHQWVPXVW EHLQFOXGHGZLWKWKHREMHFWLRQ

$WDPLQLPXPDQREMHFWLRQPXVWLQFOXGHWKHIROORZLQJREMHFWRU¶VQDPHDQGSK\VLFDOPDLOLQJDGGUHVV VLJQDWXUHRURWKHUYHULILFDWLRQRIDXWKRUVKLSXSRQUHTXHVWLGHQWLILFDWLRQRIWKHOHDGREMHFWRUZKHQ PXOWLSOHQDPHVDUHOLVWHGQDPHRIWKHSURSRVHGSURMHFWQDPHDQGWLWOHRIUHVSRQVLEOHRIILFLDODQGQDPH RIQDWLRQDOIRUHVWXQLW V RQZKLFKWKHSURMHFWZLOOEHLPSOHPHQWHG >G@

2EMHFWLRQVLQFOXGLQJDWWDFKPHQWVPXVWEHILOHGYLDPDLOID[HPDLOKDQGGHOLYHU\H[SUHVVGHOLYHU\RU PHVVHQJHUVHUYLFH 0RQGD\WKURXJK)ULGD\DPWRSPH[FOXGLQJKROLGD\V WR5HYLHZLQJ 2IILFHU'DQ-LUyQ5HJLRQDO)RUHVWHU86'$)RUHVW6HUYLFH5RFN\0RXQWDLQ5HJLRQ6LPPV *ROGHQ&2)$; RUHPDLODSSHDOVURFN\PRXQWDLQUHJLRQDORIILFH#IVIHGXV

2EMHFWLRQVPXVWEHVXEPLWWHGZLWKLQFDOHQGDUGD\VIROORZLQJWKHSXEOLFDWLRQRIDOHJDOQRWLFHLQWKH *OHQZRRG3RVW,QGHSHQGHQW7KHSXEOLFDWLRQGDWHLQWKHQHZVSDSHURIUHFRUGLVWKHH[FOXVLYHPHDQVIRU 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW DN-8 22 of 200 FDOFXODWLQJWKHWLPHWRILOHDQREMHFWLRQ7KRVHZLVKLQJWRREMHFWVKRXOGQRWUHO\XSRQGDWHVRUWLPHIUDPH LQIRUPDWLRQSURYLGHGE\DQ\RWKHUVRXUFH7KHUHJXODWLRQVSURKLELWH[WHQGLQJWKHWLPHWRILOHDQREMHFWLRQ

,WLVWKHREMHFWRU¶VUHVSRQVLELOLW\WRHQVXUHWLPHO\ILOLQJRIDZULWWHQREMHFWLRQZLWKWKHUHYLHZLQJRIILFHU SXUVXDQWWRZKLFKLQFOXGHVGDWHRI863RVWDO6HUYLFHSRVWPDUNRUVKLSSLQJGDWHIRUGHOLYHU\E\ SULYDWHFDUULHUIRUDQREMHFWLRQUHFHLYHGEHIRUHWKHFORVHRIWKHILIWKEXVLQHVVGD\DIWHUWKHREMHFWLRQILOLQJ SHULRGDJHQF\¶VHOHFWURQLFDOO\JHQHUDWHGGDWHDQGWLPHIRUHPDLODQGIDFVLPLOHVRURIILFLDODJHQF\GDWH VWDPSVKRZLQJUHFHLSWRIKDQGGHOLYHU\$OOREMHFWLRQVDUHDYDLODEOHIRUSXEOLFLQVSHFWLRQGXULQJDQGDIWHU WKHREMHFWLRQSURFHVV

APPROVAL AND IMPLEMENTATION

,IQRREMHFWLRQVDUHILOHGZLWKLQWKHGD\WLPHSHULRGDSSURYDORIWKHGHFLVLRQPD\RFFXURQEXWQRW EHIRUHILYH EXVLQHVVGD\VIURPWKHFORVHRIWKHREMHFWLRQILOLQJSHULRG

CONTACT

)RUDGGLWLRQDOLQIRUPDWLRQFRQFHUQLQJWKLVGHFLVLRQRUWKH)RUHVW6HUYLFHREMHFWLRQSURFHVVFRQWDFW

6KHOO\*UDLO%UDXGLV 6QRZ5DQJHU'LOORQ5DQJHU'LVWULFW VJUDLO#IVIHGXV

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB BBBBBBBBBBBB

6FRWW)LW]ZLOOLDPV 'DWH :KLWH5LYHU1DWLRQDO)RUHVW6XSHUYLVRU

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW DN-9 23 of 200

200 of 24

i A

r r

a i

d l

u h

o 0 l

k r c

r h a

l i

n 1

r u

1 1

0 i 0

7 0

0 H 0 l

6 u

0 1 R

H Y

d a o R d

d e c

l i

! i n

e l

r 10100

Contour Interval: 100 Feet 100 Interval: Contour

! i r

X 1

U 8

0 ,0 ,0 2,000 1,500 1,000 500 250 0

Feet F

S h

! i

P c

c e p

u r

l c i

r u

B &

10400

n 2

1 e

1 r

h [

F c

10500

* #

Bald Mountain Bald

1 G

0 s Little French Flume French Little

Breckenridge o

10200

10700

10300

¨ ¦ §

10800

S 70

l l

Summit County Summit

i u Summit County Summit

Frisco

r a

Trail of Tears of Trail r

e b a

R e T

10600 a

d W

< To French Pass French To <

² ³

i Sallie Barber Mine Barber Sallie l

Silverthorne

s T

r u

! R o y

l a

a c

Project Extent Project

t «

¬ h

B g i

Non-Shaded Indicates Private Indicates Non-Shaded N

Elevation 11,480 ft 11,480 Elevation Weber Gulch Weber

11200

National Forest National

Weber Gulch Hut Gulch Weber

Summit County/Town of Breckenridge of County/Town Summit

! < «

¬ ! C Summit County Summit

Illinois Gulch Illinois Upper Trail of Tears of Trail Upper

« ¬ E Land Ownership Land

Existing Roads Existing

Existing Trails Existing 11500

Prop. Admin. Access (ATV) on Existing on (ATV) Access Admin. Prop. !

Prop. Ski/Snowshoe on Existing Trail Existing on Ski/Snowshoe Prop.

0 0 6 11000 1 1

Proposed Administrative Access (ATV) Access Administrative Proposed

11100 11700

Weber Gulch Weber Proposed Ski/Snowshoe Proposed

« ¬ D Lentil Bowl Lentil

Access

0 Proposed Parking Estimated Area Estimated Parking Proposed 11900 0

! 11400

. t

B Proposed Hut Parking Hut Proposed

a M l

d 11300

o a

! i Existing Parking Existing

Baldy Ridgeline (scour/non-ski) Ridgeline Baldy

Parking

Baldy Bowl Baldy

Lentil Bowl Lentil

1 10900

7 Weber Gulch Weber

Skiable Areas Skiable

² ³ 1

Iowa Mill Iowa

11800 0

0 Selected Alternative Selected

12300

E Upper Trail of Tears Extension Tears of Trail Upper E 0.7 Proposed

Baldy Bowl Baldy

D Upper Trail of Tears (ATV only) (ATV Tears of Trail Upper D 0.6 Existing 2

C Nightmare on Baldy Extension Baldy on Nightmare C 0.6 Proposed 0

Boreas Pass trailhead. Pass Boreas B Nightmare on Baldy on Nightmare B 0.9 Existing Association

1 A Sallie Barber Road Barber Sallie A 1.3 Existing 0 Boreas Pass Road, from the from Road, Pass Boreas

# Trail Name Trail # itne(ie)Existing/Proposed (miles) Distance are approximately 6.5 miles up up miles 6.5 approximately are Summit Huts Summit Section House and Ken's Cabin Ken's and House Section $33(1',;$ Environmental Assessment Table 2-2

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW DN-1 25 of 200 Draft'HFLVLRQ1RWLFH 7DEOH 0DQDJHPHQW5HTXLUHPHQWVDQG3URMHFW'HVLJQ)HDWXUHV

&8/785$/ ,IXQGRFXPHQWHGKLVWRULFDQGRUSUHKLVWRULFSURSHUWLHVDUHORFDWHGGXULQJJURXQGGLVWXUELQJDFWLYLWLHVRUSODQQLQJDFWLYLWLHVDVVRFLDWHGZLWKDSSURYHG FRQVWUXFWLRQDFWLYLWLHVDOOFRQVWUXFWLRQLQWKHLPPHGLDWHYLFLQLW\ZRXOGFHDVHDQGWKH\ZRXOGEHWUHDWHGDVVSHFLILHGLQ&)5FRQFHUQLQJ3URSHUWLHV 'LVFRYHUHG'XULQJ,PSOHPHQWDWLRQRIDQ8QGHUWDNLQJ 7KH/LQFROQ7RZQVLWHJUDYHZLOOEHDYRLGHGGXULQJFRQVWUXFWLRQDQGPDLQWHQDQFHRIWKHSURSRVHGSDUNLQJORWWRHQVXUHWKDWLWVLQWHJULW\LVQRWFRPSURPLVHG 6&(1(5< &RQIRUPVLWHGHYHORSPHQWVXVWDLQDELOLW\DQGDUFKLWHFWXUDOFKDUDFWHURIWKH:HEHU*XOFKEDFNFRXQWU\KXWWRWKH)RUHVW6HUYLFH¶V%XLOW(QYLURQPHQW,PDJH *XLGH %(,* :,/'/,)( $OOFRQVWUXFWLRQDFWLYLWLHVZLOOEHFRQILQHGWRGD\OLJKWKRXUVH[FOXGLQJHPHUJHQFLHV 6+$¶VJXHVWVDQGFRQVWUXFWLRQZRUNHUVDUHSURKLELWHGIURPEULQJLQJGRJVWRWKHKXWVLWH ,IERUHDORZOQHVWVDUHGHWHFWHGZLWKLQLPSDFWDUHDVGLUHFWPRUWDOLW\RIHJJVDQGRUQHVWOLQJVZLOOEHDYRLGHGE\DYRLGLQJWUHHVWKDWFRXOGVXSSRUWQHVWFDYLWLHV OLPELQJ YVFXWWLQJ WUHHVWRSURYLGHWKHUHTXLUHGFOHDUDQFHRUFRQGXFWLQJWUHHUHPRYDOLQSRWHQWLDOQHVWLQJKDELWDWRXWVLGHRIWKH0D\WR-XO\QHVWLQJ ZLWKHJJV\RXQJ SHULRG ,IROLYHVLGHGIO\FDWFKHUQHVWVDUHGHWHFWHGZLWKLQLPSDFWDUHDVGLUHFWPRUWDOLW\RIHJJVDQGRUQHVWOLQJVZLOOEHDYRLGHGE\DYRLGLQJWUHHVWKDWFRXOGVXSSRUW QHVWFDYLWLHVOLPELQJ YVFXWWLQJ WUHHVWRSURYLGHWKHUHTXLUHGFOHDUDQFHRUFRQGXFWLQJWUHHUHPRYDOLQSRWHQWLDOQHVWLQJKDELWDWRXWVLGHRIWKH-XQHWR-XO\ QHVWLQJSHULRG ,I$PHULFDQPDUWHQGHQVDUHGHWHFWHGZLWKLQLPSDFWDUHDVGLUHFWPRUWDOLW\RIFXUUHQW\HDUUHFUXLWPHQWZLOOEHDYRLGHGE\DYRLGLQJWUHHVWKDWFRXOGVXSSRUW GHQVOLPELQJ YVFXWWLQJ WUHHVWRSURYLGHWKHUHTXLUHGFOHDUDQFHRUFRQGXFWLQJWUHHUHPRYDOLQSRWHQWLDOGHQQLQJKDELWDWRXWVLGHRIWKH0DUFKWR-XQH SHULRG 7RPLQLPL]HLPSDFWVWR&DQDGDO\Q[HONDQGIRUHVWFDUQLYRUHVWKHQHZWUDLOH[WHQVLRQWRWKHKXWZKHUHLWGHSDUWVIURPWKHH[LVWLQJUpper Trail of Tears 6HJPHQW( VKDOOEHFORVHG VLJQHGDQGJDWHGYLDD)RUHVW6XSHUYLVRU¶VFORVXUH WRSUHYHQWKLNLQJDQGELNHDFFHVVWRWKHKXWRXWVLGHWKHZLQWHURSHUDWLQJ VHDVRQ/LPLWLQJKXWXVHWRWKHZLQWHUVHDVRQRQO\ LHQRVXPPHUXVH DQGSUHYHQWLQJVXPPHUKXPDQDFFHVVDORQJWKRVHFRUULGRUVWRWKHKXWLVLPSRUWDQWWR PLQLPL]HSRWHQWLDOLPSDFWVWRO\Q[KDELWDWXVH LQFOXGLQJEXWQRWOLPLWHGWRPRYHPHQWVGHQQLQJDQGGLXUQDOVHFXULW\XVH ZLWKLQWKLVSRUWLRQRIWKH6RXWKHUQ 6XPPLW&RXQW\O\Q[FRQVHUYDWLRQFRUULGRU$PRQLWRULQJSODQZLWKEHGHYHORSHGWRLGHQWLI\XQDXWKRUL]HGVXPPHUXVHRIWKHDUHDWKDWLVVXEMHFWWRWKH 6XSHUYLVRU¶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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW A-1 26 of 200 Draft'HFLVLRQ1RWLFH 7DEOH 0DQDJHPHQW5HTXLUHPHQWVDQG3URMHFW'HVLJQ)HDWXUHV 7KH*UHDW)OXPH7UDLOLVVKRZQDVD³VQRZFRPSDFWHGURXWH´RQWKH:51)%DVHOLQH6QRZ&RPSDFWLRQ0DS*URXQGYHULILFDWLRQDQGGRFXPHQWDWLRQ VKRZVWKDWWKLVURXWHZKLFKLVDSSUR[LPDWHO\PLOHVORQJGRHVQRWUHFHLYHUHJXODUXVHGXULQJZLQWHUPRQWKVWKDWFDXVHVVQRZFRPSDFWLRQ7KHUHIRUHWKLV URXWHZLOOEHUHPRYHGIURPWKH%DVHOLQH6QRZ&RPSDFWLRQ0DS 9(*(7$7,21 $VQHHGHGUHYHJHWDWLRQZRXOGEHFRPSOHWHGDURXQGWKHSURSRVHGKXWVLWHDQGSDUNLQJDUHDXVLQJQDWLYHVSHFLHVZKHUHIHDVLEOHSUHIHUDEO\FROOHFWHGIURP ORFDOJHQHWLFVWRFNRUVHHGDYDLODEOHIURPORFDO)RUHVWV¶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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW A-2 27 of 200 Draft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³SLQFKSRLQWV´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x 3DUNLQJORWPDLQWHQDQFH x 6QRZUHPRYDO x 0RQLWRULQJDQG(QIRUFHPHQW x 6LJQDJH x 2YHUQLJKWSDUNLQJDXWKRUL]DWLRQDQGOLPLWV x 6XPPHUSDUNLQJPDQDJHPHQW x 'HVLJQDSSHDUDQFHRISDUNLQJORW x $FFHVVWRDGMDFHQWDXWKRUL]HGXVHV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW A-3 28 of 200 SUMMIT HUTS ASSOCIATION PROPOSED WEBER GULCH BACKCOUNTRY HUT ENVIRONMENTAL ASSESSMENT

July 2014

USDA Forest Service White River National Forest Dillon Ranger District

29 of 200 The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD). 7R¿OHDFRPSODLQWRIGLVFULPLQDWLRQZULWH86'$'LUHFWRU2I¿FHRI&LYLO5LJKWV,QGHSHQGHQFH$YHQXH6::DVKLQJWRQ '&RUFDOO RU 7'' USDA is an equal opportunity provider and employer.

30 of 200 6800,7+876$662&,$7,21 352326(':(%(5*8/&+%$&.&28175<+87 (19,5210(17$/$66(660(17 6800,7&2817<&2/25$'2 3URSRVHG$FWLRQ 5HVSRQVLEOH2IILFLDO )XUWKHU,QIRUPDWLRQ 6XPPLW+XWV$VVRFLDWLRQ 6FRWW)LW]ZLOOLDPV 6KHOO\*UDLO%UDXGLV )RUHVW6XSHUYLVRU 6QRZ5DQJHU :KLWH5LYHU1DWLRQDO)RUHVW /RFDWLRQ *OHQZRRG6SULQJV&2 :KLWH5LYHU1DWLRQDO)RUHVW 6XPPLW&RXQW\&2

/HDG$JHQF\ 86'$)RUHVW6HUYLFH 'LOORQ5DQJHU'LVWULFW :KLWH5LYHU1DWLRQDO)RUHVW 6XPPLW&RXQW\&RORUDGR

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

,PSRUWDQW1RWLFH$GUDIW'HFLVLRQ1RWLFHDFFRPSDQLHVWKLV($2QO\WKRVHZKRVXEPLWWHGWLPHO\DQG VSHFLILFZULWWHQFRPPHQWVGXULQJWKH($FRPPHQWSHULRGKDYHHOLJLELOLW\WRILOHDQREMHFWLRQWRWKHGUDIW GHFLVLRQXQGHU&)5,QGLYLGXDOVDQGRUJDQL]DWLRQVZLVKLQJWREHHOLJLEOHWRREMHFWPXVWPHHW WKHLQIRUPDWLRQUHTXLUHPHQWVLQ&)5 D

31 of 200 7DEOHRI&RQWHQWV

32 of 200 7DEOHRI&RQWHQWV

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±1R$FWLRQ $OWHUQDWLYH±7KH3URSRVHG$FWLRQ & 0RGLILFDWLRQV0DGHWRWKH3URSRVHG$FWLRQ ' $OWHUQDWLYHVDQG'HVLJQ&RPSRQHQWV&RQVLGHUHGEXW(OLPLQDWHGIURP'HWDLOHG$QDO\VLV +XW/RFDWLRQ +XW'HVLJQ 7UDLOKHDG/RFDWLRQV 7UDLO$FFHVV ( 0DQDJHPHQW5HTXLUHPHQWV 3. AFFECTED ENVIRONMENT AND ENVIRONMENTAL CONSEQUENCES ...... 3-1 $ 5HFUHDWLRQ 6FRSHRI$QDO\VLV $IIHFWHG(QYLURQPHQW 'LUHFWDQG,QGLUHFW(QYLURQPHQWDO&RQVHTXHQFHV &XPXODWLYH(IIHFWV % 3DUNLQJDQG7UDIILF 6FRSHRI$QDO\VLV $IIHFWHG(QYLURQPHQW 'LUHFWDQG,QGLUHFW(QYLURQPHQWDO&RQVHTXHQFHV &XPXODWLYH(IIHFWV & 6FHQHU\ 6FRSHRI$QDO\VLV 0DQDJHPHQWRIWKH6FHQLF(QYLURQPHQWRQ1DWLRQDO)RUHVW6\VWHP/DQGV $IIHFWHG(QYLURQPHQW 'LUHFWDQG,QGLUHFW(QYLURQPHQWDO&RQVHTXHQFHV &XPXODWLYH(IIHFWV ' &XOWXUDO5HVRXUFHV 6FRSHRI$QDO\VLV $IIHFWHG(QYLURQPHQW

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW i 33 of 200 7DEOHRI&RQWHQWV

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW ii 34 of 200 7DEOHRI&RQWHQWV

/,672)7$%/(6

7$%/(6800$5<7$%/(2)75$,/6(*0(176 7$%/(0$1$*(0(175(48,5(0(176$1'352-(&7'(6,*1)($785(6 7$%/(%&28176$76$//,(%$5%(552$'75$,/+($'0/.+2/,'$<:((.(1' 7$%/(%&28176$76$//,(%$5%(552$'75$,/+($'%86,(67:((.(1':,17(5 7$%/('35(9,286/<5(&25'('$5&+$(2/2*,&$/6,7(61($57+(352-(&7$5($ 7$%/('35(9,286/<5(&25'('6,7(683'$7('%<0$& 7$%/('1(:/<5(&25'('6,7(6 7$%/(()('(5$//

&+$57$$9(5$*(86(2)6$//,(%$5%(552$'±-$18$5<72129(0%(5 /,672)3+2726

3+272$9,(::(672)7+(7(10,/(5$1*(±$%29(7+(352326(':(%(5*8/&+ %$&.&28175<+876,7( 3+272%6$//,(%$5%(552$'75$,/+($' 3+272%,17(56(&7,212))5(1&+*8/&+52$'$1'6$//,(%$5%(552$' 3+272&9,(: ($67 2)352326(':(%(5*8/&+%$&.&28175<+876,7()5207+(352326('$&&(66 75$,/ 3+272&9,(: 6287+:(67 )5207+(352326(':(%(5*8/&+%$&.&28175<+876,7( 3+272&9,(: 1257+($67 )5207+(352326(':(%(5*8/&+%$&.&28175<+876,7( 3+272&9,(:2)352326(':(%(5*8/&+%$&.&28175<+876,7()5207232)+80%8*+,// 3+272&352326(':(%(5*8/&+%$&.&28175<+873$5.,1*$5($/2&$7,21$/21* 6$//,(%$5%(552$'

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW iii 35 of 200 /LVWRI$FURQ\PV

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW iv 36 of 200 /LVWRI$FURQ\PV

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW v 37 of 200 &KDSWHU 3XUSRVHDQG1HHG

38 of 200 &KDSWHU3XUSRVHDQG1HHG

385326($1'1(('

$ ,1752'8&7,21

7KH3URSRVHG$FWLRQDQDO\]HGLQWKLVGRFXPHQWFRQVWLWXWHVDIHGHUDODFWLRQZKLFKKDVWKHSRWHQWLDOWR DIIHFWWKHTXDOLW\RIWKHSK\VLFDOELRORJLFDODQGKXPDQHQYLURQPHQWRQSXEOLFODQGVDGPLQLVWHUHGE\WKH 8QLWHG6WDWHV)RUHVW6HUYLFH )RUHVW6HUYLFH 7KHUHIRUHWKHVHSURMHFWVPXVWEHDQDO\]HGSXUVXDQWWRWKH 1DWLRQDO(QYLURQPHQWDO3ROLF\$FWRI 1(3$ 8QGHU1(3$IHGHUDODJHQFLHVPXVWFDUHIXOO\ FRQVLGHUHQYLURQPHQWDOFRQFHUQVLQWKHLUGHFLVLRQPDNLQJSURFHVVHVDQGSURYLGHUHOHYDQWLQIRUPDWLRQWR WKHSXEOLFIRUUHYLHZDQGFRPPHQW

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

1RWH7KLV)LQDO($FRQWDLQVFKDQJHVDQGUHYLVLRQVDVDUHVXOWRIFRPPHQWVUHFHLYHGGXULQJWKH($ SXEOLFFRPPHQWSHULRGZKLFKH[WHQGHGIURP$XJXVWWKURXJK6HSWHPEHU$VDUHVXOWRI SXEOLFFRPPHQWVQXPHURXVSRUWLRQVRIWKLV)LQDO($ZHUHUHYLVHGWRDGGUHVVWKRVHFRQFHUQVLQ SDUWLFXODU&KDSWHU&KDSWHU&KDSWHU6HFWLRQ$ 5HFUHDWLRQ DQG&KDSWHU6HFWLRQ% 3DUNLQJDQG 7UDIILF ,QDGGLWLRQWKHILJXUHVLQFOXGHGLQ&KDSWHUKDYHEHHQUHYLVHG7KHUHDGHULVUHIHUUHGWRWKH 5HVSRQVHWR&RPPHQWVRQWKH(QYLURQPHQWDO$VVHVVPHQW FRQWDLQHGLQ$SSHQGL[' ZKLFKLGHQWLILHV VSHFLILFSDJHVWKURXJKRXWWKHDIRUHPHQWLRQHGFKDSWHUVWKDWKDYHEHHQUHYLVHG)LQDOO\D)LQGLQJRI1R 6LJQLILFDQW,PSDFWKDVEHHQLQFRUSRUDWHGDV&KDSWHU

7KHGRFXPHQWLVRUJDQL]HGLQWRWKHIROORZLQJVHYHQFKDSWHUVDQGIRXUDSSHQGLFHV

x &KDSWHU±3XUSRVHDQG1HHGLQFOXGHVLQIRUPDWLRQRQWKHKLVWRU\RIWKHSURMHFWSURSRVDOWKH SXUSRVHRIDQGQHHGIRUWKHSURMHFWDQGWKHSURSRVDOIRUDFKLHYLQJWKDWSXUSRVHDQGQHHG &KDSWHUDOVRGHWDLOVKRZWKH)RUHVW6HUYLFHLQIRUPHGWKHSXEOLFRIWKHSURSRVDODQGKRZWKH SXEOLFUHVSRQGHG VFRSLQJ

x &KDSWHU±'HVFULSWLRQRI$OWHUQDWLYHVSURYLGHVDGHWDLOHGGHVFULSWLRQRIWKHWZRDOWHUQDWLYHV WKDWDUHDQDO\]HGLQGHWDLO²1R$FWLRQDQGWKH3URSRVHG$FWLRQ7KLVGLVFXVVLRQDOVRLQFOXGHV DOWHUQDWLYHVFRQVLGHUHGEXWHOLPLQDWHGIURPIXUWKHUDQDO\VLVDQGPLWLJDWLRQPHDVXUHV

x &KDSWHU±$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHVSURYLGHVDGHVFULSWLRQ RIWKHDIIHFWHGHQYLURQPHQW LHH[LVWLQJFRQGLWLRQV DFFRUGLQJWRUHVRXUFHDUHDDQGGHVFULEHVWKH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 1-1 39 of 200 &KDSWHU3XUSRVHDQG1HHG

HQYLURQPHQWDOFRQVHTXHQFHVRILPSOHPHQWLQJWKH1R$FWLRQ$OWHUQDWLYHDQGWKH3URSRVHG $FWLRQ&KDSWHULVRUJDQL]HGE\UHVRXUFHWRSLF

x &KDSWHU±)LQGLQJRI1R6LJQLILFDQW,PSDFWMXGJHV³VLJQLILFDQFH´LQWHUPVRIERWKFRQWH[W DQGLQWHQVLW\SHU&)5 E

x &KDSWHU±&RQVXOWDWLRQDQG&RRUGLQDWLRQSURYLGHVDOLVWRISUHSDUHUVDQGDJHQFLHV FRQVXOWHGGXULQJWKHSUHSDUDWLRQRIWKLV($

x &KDSWHU±5HIHUHQFHVSURYLGHVFRPSOHWHUHIHUHQFHVIRUGRFXPHQWVFLWHGZLWKLQWKLV($

x &KDSWHU±)LJXUHVLQFOXGHVWKHILJXUHVWKDWDUHUHIHUUHGWRWKURXJKRXWWKHDQDO\VLV

x $SSHQGLFHV ż $SSHQGL[$&XPXODWLYH(IIHFWV3URMHFWVLQFOXGHVDWDEOHRIFXPXODWLYHHIIHFWV SURMHFWVDQGSURMHFWGHVFULSWLRQV

ż $SSHQGL[%&LYLO5LJKWV,PSDFW$QDO\VLVLQFOXGHVWKH&LYLO5LJKWV,PSDFW $QDO\VLVSHUWDLQLQJWRWKH)RUHVW6XSHUYLVRU¶VFORVXUHRI1)6ODQGVDWWKH:HEHU *XOFK%DFNFRXQWU\$UHD

ż $SSHQGL[&$OWHUQDWH+XW/RFDWLRQVLQFOXGHVKXWORFDWLRQVWKDWZHUHFRQVLGHUHG EXWQRWDQDO\]HGLQWKH($

ż $SSHQGL['5HVSRQVHWR&RPPHQWVLQFOXGHVUHVSRQVHVWRFRPPHQWVVXEPLWWHG RQWKH($

$GGLWLRQDOGRFXPHQWDWLRQLQFOXGLQJPRUHGHWDLOHGDQDO\VHVRI3URMHFW$UHDUHVRXUFHVPD\EHIRXQGLQ WKHSURMHFWDGPLQLVWUDWLYHUHFRUGORFDWHGDWWKH'LOORQ5DQJHU'LVWULFWRIILFHRIWKH:51)

% %$&.*5281'

7KH6XPPLW+XWV$VVRFLDWLRQ 6+$ LVD F QRQSURILWFRUSRUDWLRQEDVHGLQ%UHFNHQULGJH &RORUDGR,WRSHUDWHVIRXUEDFNFRXQWU\KXWVXQGHUVSHFLDOXVHSHUPLW 683 IURPWKH)RUHVW6HUYLFHLQ 6XPPLWDQG3DUNFRXQWLHV6+$HPSKDVL]HVQRQPRWRUL]HGVHOIUHOLDQWEDFNFRXQWU\WUDYHODQGDQ LQWLPDWHFRQQHFWLRQZLWKWKHQDWXUDOHQYLURQPHQW

6+$KDVSURSRVHGWKHFRQVWUXFWLRQRIDQHZKXWRQ1DWLRQDO)RUHVW6\VWHP 1)6 ODQGVDGPLQLVWHUHGE\ WKH'LOORQ5DQJHU'LVWULFWRIWKH:51)7KHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWVLWHLVORFDWHGDWDQ DSSUR[LPDWHHOHYDWLRQRIIHHWRQWKHQRUWKHUQDVSHFWRI%DOG0RXQWDLQHDVWRI%UHFNHQULGJH 5HIHUWR)LJXUHIRUWKHORFDWLRQRIWKHSURSRVHGKXW

%DOG0RXQWDLQLVDSRSXODU\HDUURXQGUHFUHDWLRQGHVWLQDWLRQIRUEDFNFRXQWU\VNLHUVVQRZVKRHUV PRXQWDLQELNHUVDQGKLNHUV:HEHU*XOFKSURYLGHVEDFNFRXQWU\VNLLQJRSSRUWXQLWLHVHVSHFLDOO\LQWKH QRUWKHUQDVSHFWWUHHV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 1-2 40 of 200 &KDSWHU3XUSRVHDQG1HHG

7KHSRSXODULW\RIEDFNFRXQWU\KXWVDQGDVVRFLDWHGVNLLQJKDVJURZQH[SRQHQWLDOO\LQ&RORUDGRDQG6+$ KDVEHHQRSHUDWLQJDWFDSDFLW\WKURXJKRXWWKHZLQWHUVHDVRQIRUPDQ\\HDUV6+$KDVORQJLGHQWLILHGWKH QHHGIRUDQDGGLWLRQDOKXWLQ6XPPLW&RXQW\WKDWLVQRWRQO\DFFHVVLEOHIURP%UHFNHQULGJHEXWDOVR SURYLGHVDOLQNDJHIRUKXWWRKXWWUDYHOWKURXJKRXWWKHJUHDWHUKXWV\VWHP WKRXJKWKLVDFFRXQWVIRUDVPDOO SHUFHQWDJH²OHVVWKDQILYHSHUFHQW²RIWRWDOXVH 7KHVHWRSLFVDUHGLVFXVVHGLQJUHDWHUGHWDLOLQWKH IROORZLQJVHFWLRQV

& 5(/$7,216+,37235(9,286$1$/<6(6$1'$33529$/6

6+$FRPSOHWHGD0DVWHU'HYHORSPHQW3ODQ 0'3 LQZKLFKLGHQWLILHGILYHSULPDU\KXWVLWHVRQ WKH:51)DQGWKUHHVHFRQGDU\VLWHVWKDWFRXOGEHORFDWHGRQSULYDWHSURSHUW\2YHUWKHSDVWWZRGHFDGHV WZRRIWKHVHKXWVZHUHDQDO\]HGDSSURYHGDQGEXLOWRQ:51),QWKH)RUHVW6HUYLFHFRPSOHWHGDQ ($WKDWDSSURYHGFRQVWUXFWLRQRI-DQHW¶V&DELQZKLFKRSHQHGIRUSXEOLFXVHLQ-DQXDU\7KH($IRU )UDQFLH¶V&DELQ²WKHVHFRQGKXWRIWKH6+$V\VWHP²ZDVFRPSOHWHGLQ1RYHPEHUDQGWKHKXW RSHQHGWRWKHSXEOLFLQ-DQXDU\,QDGGLWLRQWKH6HFWLRQ+RXVHDQG.HQ¶V&DELQ²DWWKHWRSRI %RUHDV3DVV²DUHUHVWRUDWLRQVRIKLVWRULFDOEXLOGLQJVWKHVHWZREXLOGLQJVDUHRZQHGE\WKH)RUHVW 6HUYLFH

$VSDUWRIHDFKKXW6+$SODQVIRUSDUNLQJDQGDFFHVVWUDLOV3RUWLRQVRIWKHWUDYHOURXWHSURSRVHGLQ FRQMXQFWLRQZLWKWKH:HEHU*XOFKEDFNFRXQWU\KXWDUHZLWKLQWKH³*ROGHQ+RUVHVKRH´DQDUHDRI 6XPPLW&RXQW\ FRPSRVHGRI)RUHVW6\VWHP7RZQRI%UHFNHQULGJHDQG6XPPLW&RXQW\ODQGV YDOXHG IRULWVGLYHUVLW\RIQDWXUDOUHVRXUFHVUHFUHDWLRQRSSRUWXQLWLHVDQGFXOWXUDOUHVRXUFHV7KHURXWHLVORFDWHG RQERWK:51)DQG7RZQRI%UHFNHQULGJH6XPPLW&RXQW\2SHQ6SDFHSURSHUW\7KHSURSRVDOWRXVH 7RZQRI%UHFNHQULGJH6XPPLW&RXQW\2SHQ6SDFHSURSHUW\IRUWUDYHOURXWHVKDVEHHQUHYLHZHGDQGLV VXSSRUWHGE\WKH%UHFNHQULGJH2SHQ6SDFH$GYLVRU\&RPPLWWHH%UHFNHQULGJH7RZQ&RXQFLO6XPPLW &RXQW\2SHQ6SDFH&RPPLVVLRQDQGWKH6XPPLW&RXQW\%RDUGRI&RXQW\&RPPLVVLRQHUV

' 385326($1'1((')257+(352326('$&7,21

7KHSULPDU\SXUSRVHRIWKLVSURSRVDOLVWRUHVSRQGWRGHPDQGIRUEDFNFRXQWU\KXWVLQ6XPPLW&RXQW\ 7KHVHFRQGDU\SXUSRVHLVWRSURYLGHWKHSXEOLFZLWKDQGWRLPSURYHXSRQDQLQWHUFRQQHFWHGVHULHVRI KXWVWKDWZHUHRULJLQDOO\HQYLVLRQHGE\6+$$VDQLQGLFDWRURIGHPDQGKXWRSHUDWRUVJHQHUDOO\REVHUYH WKDWDVQHZKXWVDUHEXLOWUHVHUYDWLRQVIRUZHHNHQGVDQGSRSXODUZHHNVDUHQHDUO\LPPHGLDWHO\ILOOHG

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 1-3 41 of 200 &KDSWHU3XUSRVHDQG1HHG

ZLWKRXWGHFUHDVLQJWKHUHVHUYDWLRQVRIH[LVWLQJKXWV$VGHILQHGXQGHUWKH3URSRVHG$FWLRQQXPHURXV SRWHQWLDOORFDWLRQVIRUDQHZKXWLQ6XPPLW&RXQW\ZHUHFRQVLGHUHGE\6+$DQGWKH:51)KRZHYHU WKHUHZHUHFHUWDLQFULWLFDOIDFWRUVWKDWXOWLPDWHO\OHGWRWKHSURSRVHGORFDWLRQLQ:HEHU*XOFK 5HIHUWR WKH3URSRVHG$FWLRQGHVFULSWLRQDVZHOODV³$OWHUQDWLYHV&RQVLGHUHGEXW(OLPLQDWHG´LQ&KDSWHUIRU PRUHLQIRUPDWLRQRQWKHIDFWRUVWKDWJRLQWRDKXWORFDWLRQDVZHOODVRWKHUDOWHUQDWLYHORFDWLRQVWKDWZHUH FRQVLGHUHGEXWHOLPLQDWHG

( 6800$5<2)7+(352326('$&7,21

,QUHVSRQVHWRWKH3XUSRVHDQG1HHGDQGSULRUWRWKHVHOHFWLRQRIWKH:HEHU*XOFKVLWHWKH:51)DQG 6+$FRQVLGHUHGQXPHURXVRWKHUSRWHQWLDOORFDWLRQVIRUDEDFNFRXQWU\KXW7KH:HEHU*XOFKORFDWLRQRQ WKHQRUWKHUQDVSHFWRI%DOG0RXQWDLQLQ%UHFNHQULGJHZDVVHOHFWHGIRUFRQVLGHUDWLRQEDVHGRQQXPHURXV IDFWRUVLQFOXGLQJLWVDELOLW\WRSURYLGHWKHSXEOLFZLWKWKHEHVWRYHUDOOKXWH[SHULHQFHTXDOLW\DQGTXDQWLW\ RIVNLLQJYLHZVDFFHVVDQGRWKHUIDFWRUV GHVFULEHGLQGHSWKLQ&KDSWHU

7KH3URSRVHG$FWLRQLVWRDPHQG6+$¶V683WRLQFOXGHFRQVWUXFWLRQDQGRSHUDWLRQRIDEDFNFRXQWU\KXW RQ1)6ODQGVWRLQFOXGHDKXWRQWKHQRUWKHUQDVSHFWRI%DOG0RXQWDLQLQ:HEHU*XOFK6SHFLILF HOHPHQWVLQFOXGH

x /RFDWLRQ±7KHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWVLWHLVORFDWHGDWDSSUR[LPDWHO\ IHHWLQHOHYDWLRQRQWKHQRUWKHUQDVSHFWRI%DOG0RXQWDLQHDVWRI%UHFNHQULGJHRQWKH :51)7KHSURSRVHGWUDYHOURXWHVDUHORFDWHGRQ:51)ODQGVDQGDOVRZLWKLQWKH*ROGHQ +RUVHVKRHSODQQLQJDUHDRQ6XPPLW&RXQW\2SHQ6SDFHDQG%UHFNHQULGJH2SHQ6SDFHSURSHUW\

x 5HFUHDWLRQ2SSRUWXQLWLHV±7KHSURSRVHGKXWLVLQWHQGHGIRUZLQWHUXVHRQO\SULPDULO\ EDFNFRXQWU\VNLLQJDQGVQRZVKRHLQJ,QRUGHUWRPLQLPL]HGLVWXUEDQFHWR&DQDGDO\Q[HONDQG IRUHVWFDUQLYRUHVWKHSURSRVHGKXWDQGDVHFWLRQRIWKHDVVRFLDWHGDFFHVVWUDLOZRXOGEHFORVHGWR VXPPHUXVH

x +XW6SHFLILFDWLRQV±7KHSURSRVHGKXWZRXOGEHHLWKHURQHRUWZRVWRULHVDQGZRXOGLQFRUSRUDWHD YDULHW\RI³JUHHQ´EXLOGLQJHOHPHQWV,WLVSURSRVHGWRDFFRPPRGDWHXSWRJXHVWVSOXVDVPDOO KXWPDVWHU¶VTXDUWHUV+HDWZRXOGEHSURYLGHGWKURXJKDFRPELQDWLRQRISDVVLYHVRODUDQGDZRRG RUSURSDQHVWRYH3RWDEOHZDWHUZRXOGEHDFFRPPRGDWHGE\PHOWLQJVQRZ7KHVLWHZRXOGDOVR LQFOXGHDOHDFKILHOGWRKDQGOHJUH\ZDWHUIURPNLWFKHQVLQNVDQGGLVFKDUJHIURPFRPSRVWLQJ WRLOHWV

x 5HFUHDWLRQ$FFHVV±1RQPRWRUL]HGZLQWHUDFFHVVWRWKHSURSRVHGKXWZRXOGEHSURYLGHGWKURXJK DFRPELQDWLRQRIH[LVWLQJDQGSURSRVHGWUDLOVLQFOXGLQJWKH6DOOLH%DUEHU5RDG1LJKWPDUHRQ %DOG\DQGQHZVHJPHQWVRIWUDLORQ1)6DQGQRQ1)6ODQGVOHDGLQJWRWKHKXWORFDWLRQ

)LOOHGUHVHUYDWLRQVGRQRWQHFHVVDULO\HTXDWHWRSHUFHQWRFFXSDQF\DVPDQ\SDUWLHVZLOOUHVHUYHDQHQWLUHKXW IRUDJURXSWKDWGRHVQRWFRPSOHWHO\ILOODOORILWVEHGV0LGZHHNDYDLODELOLW\LVFRPPRQWKURXJKRXWWKHVHDVRQ =REEH 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 1-4 42 of 200 &KDSWHU3XUSRVHDQG1HHG

x 0DLQWHQDQFH$FFHVV±7KHH[LVWLQJ7UDLORI7HDUV ZKLFKEUDQFKHVRIIRI0W%DOG\5RDG LQ FRQMXQFWLRQZLWKDSURSRVHGQHZWUDLOVHJPHQWZRXOGEHXVHGIRUPRWRUL]HG $79 DFFHVVWRWKH KXWGXULQJWKHVXPPHUIRURQJRLQJPDLQWHQDQFHQHHGV

x &RQVWUXFWLRQ$FFHVV±6LQFHWKHUHLVQRURDGDFFHVVWRWKHSURSRVHGKXWVLWH6+$SURSRVHVWRXVH DKHOLFRSWHUWRIHUU\KHDY\EXLOGLQJPDWHULDOVDQGFRQVWUXFWLRQPDFKLQHU\WRWKHVLWH 7UDQVSRUWDWLRQRIOLJKWEXLOGLQJPDWHULDOZRXOGRFFXUYLDWKHPDLQWHQDQFHDFFHVVURXWHDV SUHYLRXVO\GHVFULEHGRQWKHH[LVWLQJ7UDLORI7HDUVDQGRQWKHQHZWUDLOVHJPHQW

x 3DUNLQJ±$QHZGHGLFDWHGSDUNLQJDUHDLVSURSRVHGWREHORFDWHGHDVWRIWKHH[LVWLQJSDUNLQJ DUHDIRUWKH6DOOLH%DUEHU5RDG7UDLOKHDG7KHSURSRVHGORWZRXOGFRQVLVWRIVSDFHVZLWKD SRUWLRQDOORFDWHGIRURYHUQLJKWSDUNLQJE\QRQKXWXVHUV7KHYHKLFOHFDSDFLW\RIWKHORWLV QHFHVVDU\WRDFFRPPRGDWHRYHUODSEHWZHHQDUULYLQJDQGGHSDUWLQJJURXSVRIKXWXVHUV

) 38%/,&,192/9(0(17

7KHOHWWHUVWKDWZHUHUHFHLYHGGXULQJVFRSLQJZHUHXWLOL]HGE\WKH)RUHVW6HUYLFH,QWHUGLVFLSOLQDU\ ,' 7HDPWRLGHQWLI\VXEVWDQWLYHLVVXHVDQGWRFRQVLGHUSRWHQWLDODOWHUQDWLYHVWRWKH3URSRVHG$FWLRQ7KH LVVXHVWKDWSURYLGHWKHIRXQGDWLRQRIWKLVHQYLURQPHQWDODQDO\VLVDUHGLVFXVVHGEHORZDQGDUHVSHFLILFDOO\ DGGUHVVHGLQ&KDSWHU±$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV

$SXEOLFQRWLFHIRUUHYLHZRIWKH:HEHU*XOFK%DFNFRXQWU\+XW($ZDVSXEOLVKHGLQWKH*OHQZRRG 3RVW,QGHSHQGHQWRQ$XJXVW7KHFRPPHQWSHULRGRQWKH($H[WHQGHGWKURXJK6HSWHPEHU \LHOGLQJWKLUWHHQFRPPHQWOHWWHUV²ERWKRSSRVLWLRQDODQGVXSSRUWLYH$SHWLWLRQDGYLVLQJDJDLQVW WKHKXW¶VSURSRVHGORFDWLRQZDVVLJQHGE\DSSUR[LPDWHO\VL[W\SHRSOH6XEVWDQWLYHFRPPHQWVZHUH DGGUHVVHGLQWKH5HVSRQVHWR&RPPHQWVGRFXPHQWDQGQDPHVDQGDIILOLDWLRQVRIFRPPHQWHUVZHUH HQWHUHGLQWRDPDVWHUGDWDEDVH

* ,668(6$1',1',&$7256

%DVHGRQWKHUHVXOWVRILQWHUQDODQGSXEOLFVFRSLQJWKH)RUHVW6HUYLFHLGHQWLILHGVSHFLILFLVVXHVWRDGGUHVV LQWKLV($,VVXHVJHQHUDOO\UHTXLUHLQGHSWKDQDO\VLVDQGGLVFORVXUHDQGDUHXWLOL]HGWRJHQHUDWH DOWHUQDWLYHVLIQHFHVVDU\,QVRPHFDVHVWKH\FDQEHDGGUHVVHGE\3URMHFW'HVLJQ)HDWXUHVRUPLWLJDWLRQ PHDVXUHV(DFKRIWKHIROORZLQJLVVXHVWDWHPHQWVLQFOXGHVDOLVWRILQGLFDWRUVWKDWDUHPHDQVRIPHDVXULQJ RUTXDQWLI\LQJWKHDQWLFLSDWHGOHYHORILPSDFWRQDSDUWLFXODUUHVRXUFH:KLOHVRPHLQGLFDWRUVDUH

0DQ\VLJQDWXUHVRQWKHSHWLWLRQZHUHLOOHJLEOH 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 1-5 43 of 200 &KDSWHU3XUSRVHDQG1HHG

QHFHVVDULO\TXDOLWDWLYHLQQDWXUHHYHU\HIIRUWZDVPDGHWRXWLOL]HLQGLFDWRUVWKDWDUHTXDQWLWDWLYH PHDVXUDEOHDQGSUHGLFWDEOH

+80$1(19,5210(17 5HFUHDWLRQ

'XHWRLWVFORVHSUR[LPLW\WR%UHFNHQULGJHDQGEHFDXVH6DOOLH%DUEHU5RDGLVRQHRIWKHILUVWWUDLOVWR KROGVQRZHDFKVHDVRQWKH6DOOLH%DUEHU5RDG7UDLOKHDGDQGDVVRFLDWHGWUDLOVUHFHLYHVRPHRIWKHKLJKHVW ZLQWHUEDFNFRXQWU\DQG1RUGLFVNLLQJVQRZVKRHLQJXVHLQWKHDUHD3HUWKH:51)/DQGDQG 5HVRXUFH0DQDJHPHQW3ODQPRWRUL]HGWUDYHOLVSURKLELWHGLQWKH3URMHFW$UHDH[FHSWZKHQDXWKRUL]HGE\ 683IRUDGPLQLVWUDWLRQRISHUPLWWHGIDFLOLWLHVIRU)RUHVW6HUYLFHDGPLQLVWUDWLRQRUIRUHPHUJHQF\ SXUSRVHV

,VVXH7KHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWKDVWKHSRWHQWLDOWRDOWHUWKHUHFUHDWLRQDO H[SHULHQFHIRUEDFNFRXQWU\DQG1RUGLFVNLHUVDVZHOODVVQRZVKRHUVLQWKH3URMHFW$UHDLQFOXGLQJWKH QHDUE\%DOG0RXQWDLQEDFNFRXQWU\WHUUDLQDQGVXUURXQGLQJWUDLOV 6DOOLH%DUEHU/LWWOH)UHQFK 0LQQLH0LQH*ROG5XQ% %7XUN¶V%DOG0RXQWDLQ1LJKWPDUHRQ%DOG\DQG8SSHU7UDLORI 7HDUV 7KHSRWHQWLDOHIIHFWVLQFOXGHTXDOLW\RIVQRZDQGWUDLOFRQGLWLRQVLQFUHDVHGXVHRIWUDLOV EDFNFRXQWU\XVHUFDSDFLW\DQGORVVRIVROLWXGHYDOXHV

$QDO\WLFDO,QGLFDWRUV 5HTXLUHPHQWV x 0LOHVRIH[LVWLQJSURSRVHGWUDLOVVHUYHGE\WKH6DOOLH%DUEHU5RDG7UDLOKHDG

x (VWLPDWHGQXPEHURIFXUUHQWZLQWHUWUDLOXVHUV GDLO\DQQXDO LQWKH3URMHFW$UHD

x (VWLPDWHGQXPEHURIZLQWHUWUDLOXVHUVDVVRFLDWHGZLWKWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\ KXW GDLO\DQQXDO

3DUNLQJDQG7UDIILF

,VVXH$KXWZLWKDQRYHUQLJKWFDSDFLW\RISHRSOHZRXOGLQFUHDVHWUDIILFYROXPHVRQ)UHQFK *XOFK5RDGDQGSDVWWKH:HOOLQJWRQQHLJKERUKRRGGXULQJWKHZLQWHU

,VVXH3DUNLQJIRUWKH6DOOLH%DUEHU5RDG7UDLOKHDGLVDOUHDG\FRQVWUDLQHGWKURXJKRXWWKH\HDU $GGLQJDGHGLFDWHGRYHUQLJKWSDUNLQJDUHDIRUKXWXVHUVPD\LQGXFHDGGLWLRQDOSDUNLQJLVVXHVDQG PD\EHGLIILFXOWWRHQIRUFHHYHQLIWKHJHQHUDOSXEOLFLVDOORFDWHGDFHUWDLQQXPEHURIGD\XVHVSRWV

,VVXH6QRZUHPRYDODORQJ)UHQFK*XOFK5RDGDQGDWWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXW SDUNLQJDUHDQHHGVWREHFRRUGLQDWHGZLWK6XPPLW&RXQW\5RDGDQG%ULGJHWRHQVXUHWKDWVDIHDQG HIILFLHQWDFFHVVDQGSDUNLQJLVSURYLGHG

,VVXH,QRUGHUWRHOLPLQDWHPXFKRIWKHYHUWLFDOJDLQQHHGHGWRDFFHVVWKHSURSRVHGKXWVRPHKXW XVHUVPD\FKRRVHWRSDUNDWWKH0W%DOG\7UDLOKHDGLQVWHDGRIDWWKHSURSRVHGGHGLFDWHGSDUNLQJDUHD

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 1-6 44 of 200 &KDSWHU3XUSRVHDQG1HHG

SURSRVHGQHDUWKH6DOOLH%DUEHU5RDG7UDLOKHDG7KLVFRXOGGLVSODFHXVHUVDWWKH%DOG0RXQWDLQ 7UDLOKHDGGXULQJWKHZLQWHU

$QDO\WLFDO,QGLFDWRUVDQG5HTXLUHPHQWV x (VWLPDWHGFXUUHQWGDLO\YHKLFXODUWUDIILFRQ)UHQFK*XOFK5RDG

x (VWLPDWHGSRWHQWLDOGDLO\YHKLFXODUWUDIILFRQ)UHQFK*XOFK5RDGUHODWHGWRWKHSURSRVHGKXW

x 3RWHQWLDOIRUKXWVXVHUVWRSDUNRYHUQLJKWDWWKH0W%DOG\7UDLOKHDG

6FHQHU\

,VVXH7KH3URMHFW$UHDLVUHODWLYHO\XQGHYHORSHGDQGKDVKLJKVFHQLFTXDOLWLHV7KHSRWHQWLDOYLVLELOLW\ RIWKHSURSRVHGKXWQHHGVWREHDQDO\]HGDQGGLVFORVHG

$QDO\WLFDO,QGLFDWRUVDQG5HTXLUHPHQWV x 'LVFORVXUHRIWKHOHYHORIYLVLELOLW\RIWKHKXWORFDWLRQIURPNH\YLHZSRLQWV WUDLOV7RZQRI %UHFNHQULGJHHWF

&XOWXUDO5HVRXUFHV

,VVXH7KH3URMHFW$UHDRQWKHQRUWKDVSHFWRI%DOG0RXQWDLQLQFOXGHVERWKUHFRUGHGDQGXQUHFRUGHG KLVWRULFDUFKDHRORJLFDOIHDWXUHVLQWKHIRUPRIFDELQVDGLWVDQGSURVSHFWSLWV,IDQ\VLWHVDUH GHWHUPLQHGWREHHOLJLEOHIRUWKH1DWLRQDO5HJLVWHURI+LVWRULF3ODFHVWKHQDSSURSULDWHGHVLJQFULWHULD ZLOOQHHGWREHIRUPXODWHGWRPLWLJDWHLPSDFWVWRWKHUHVRXUFH7KLVSURMHFWUHTXLUHVD&ODVV,,, LQYHQWRU\DIXOO6HFWLRQUHSRUWLQFOXGLQJVLWHIRUPVDQG6+32FRUUHVSRQGHQFH

$QDO\WLFDO,QGLFDWRUVDQG5HTXLUHPHQWV x 6XPPDU\RIUHVXOWRIFXOWXUDOVXUYH\VFRPSOHWHGWRGDWHLQWKHYLFLQLW\RIWKH3URMHFW$UHD

x 0DQDJHPHQWPHDVXUHVWRPLQLPL]HSRWHQWLDOLPSDFWVWRNQRZQFXOWXUDOUHVRXUFHV

%,2/2*,&$/(19,5210(17 :LOGOLIH

,VVXH7KHSURSRVHGKXWLVORFDWHGZLWKLQDO\Q[PRYHPHQWDUHDDQGERWKGHHUDQGHONVXPPHU UDQJHDQGPRYHPHQWFRUULGRUV

,VVXH7KHSDUNLQJORWURDGDQGORZHUVHFWLRQRIWKHDFFHVVWUDLODUHLQFORVHSUR[LPLW\WRERUHDO WRDGKDELWDWUHTXLULQJVLWHVSHFLILFVXUYH\V

,VVXH7KH3URMHFW$UHDLVLQDFXWWKURDWWURXWZDWHUVKHGDQGDGGLWLRQDOSURWHFWLRQPHDVXUHVPD\ QHHGWREHLPSOHPHQWHG

,VVXH,PSOHPHQWDWLRQRIWKHSURSRVHGSURMHFW LQFOXGLQJFRQVWUXFWLRQDQGXVH ZRXOGQHFHVVLWDWH YHJHWDWLRQUHPRYDODQGJURXQGGLVWXUEDQFHDQGZRXOGLQFUHDVHKXPDQSUHVHQFHLQWKHZLQWHU 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 1-7 45 of 200 &KDSWHU3XUSRVHDQG1HHG

,QFUHDVHGZLQWHUXVHRIWKHDUHDORVVRIKDELWDWDQGKDELWDWIUDJPHQWDWLRQFRXOGDIIHFW7KUHDWHQHG (QGDQJHUHGDQG6HQVLWLYH 7(6 DQG0DQDJHPHQW,QGLFDWRU 0,6 ZLOGOLIHDQGDTXDWLFVSHFLHV

$QDO\WLFDO,QGLFDWRUVDQG5HTXLUHPHQWV x $FUHDJHRIWUHHUHPRYDOIRUFRQVWUXFWLRQRISURSRVHGKXWSDUNLQJORWDQGWUDLOVHJPHQWV

x 1HWLQFUHDVHLQVQRZFRPSDFWHGWUDLOVDVVRFLDWHGZLWKWKHSURSRVHGKXW

x (VWLPDWHGQXPEHURIFXUUHQWZLQWHUWUDLOXVHUV GDLO\DQQXDO

x (VWLPDWHGQXPEHURIZLQWHUWUDLOXVHUVDVVRFLDWHGZLWKWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\ KXW GDLO\DQGDQQXDOXVHUV LQWKH$QDO\VLV$UHD

x ,GHQWLILFDWLRQRI/\Q[$QDO\VLV8QLW /$8 ERXQGDULHVO\Q[KDELWDWORVVDQGO\Q[KDELWDW FRQQHFWLYLW\LQUHODWLRQWRWKH$QDO\VLV$UHD

x ,PSDFWVWR5HJLRQ0,6DQG7(6/LVWHGDQG&DQGLGDWHVSHFLHVDQGKDELWDW DFUHV

x ,GHQWLILFDWLRQDQGDQDO\VLVRILPSDFWVWRWKUHDWHQHGDQGHQGDQJHUHGDTXDWLFVSHFLHVDQGKDELWDW DFUHV

x $QDO\VLVRISK\VLFDOVWUHDPKHDOWKLQWKH$QDO\VLV$UHDDQGWKHHIIHFWVRQDTXDWLFOLIH

x $VVHVVPHQWRIWURXWDQGPDFURLQYHUWHEUDWHSRSXODWLRQVLQ3URMHFW$UHDRQVWUHDPVDQGDW UHIHUHQFHVLWHVDVEDVHGRQILHOGVXUYH\V

x 'RFXPHQWDWLRQRISUHVHQFHDEVHQFHRIVHQVLWLYHDPSKLELDQVDQGWKHLUKDELWDWZLWKLQWKH$QDO\VLV $UHD

9HJHWDWLRQ

,VVXH3ODQWFRPPXQLWLHV LQFOXGLQJ7(6VSHFLHV:51)6SHFLHVZLWKDQ,GHQWLILHG9LDELOLW\&RQFHUQ >6,9&@DQGLQYDVLYHSODQWVSHFLHV PD\EHLPSDFWHGDVDUHVXOWRIFRQVWUXFWLRQRIWKHSURSRVHGKXW SDUNLQJORWDQGQHZWUDLOVHJPHQWV,QDGGLWLRQVQRZFRPSDFWLRQPD\LPSDFWVSHFLDOVWDWXVSODQWV

$QDO\WLFDO,QGLFDWRUVDQG5HTXLUHPHQWV x ,GHQWLILFDWLRQRIWKUHDWHQHGDQGHQGDQJHUHGSODQWVSHFLHVDQGKDELWDWSUHVHQWLQWKH$QDO\VLV$UHD

x ,GHQWLILFDWLRQRI5HJLRQVHQVLWLYHSODQWVSHFLHVDQGKDELWDWSUHVHQWLQWKH$QDO\VLV$UHD

x ,GHQWLILFDWLRQRI:51)VSHFLHVZLWKDQLGHQWLILHGYLDELOLW\FRQFHUQDQGKDELWDWSUHVHQWLQWKH $QDO\VLV$UHD

x 4XDQWLILFDWLRQ DFUHDJH RISURSRVHGJURXQGGLVWXUEDQFHDQGRYHUVWRU\YHJHWDWLRQUHPRYDO DVVRFLDWHGZLWKWKHSURSRVHGKXW

x ,GHQWLILFDWLRQRILQYDVLYHVSHFLHVLQWKHYLFLQLW\RIWKH3URMHFW$UHDDQGXVHRI%HVW0DQDJHPHQW 3UDFWLFHV %03V WROLPLWWKHLUVSUHDG

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 1-8 46 of 200 &KDSWHU3XUSRVHDQG1HHG

6RLO5HVRXUFHV

,VVXH6RLODQGJHRORJLFFRQGLWLRQV LHHURVLYLW\DQGK\GURORJLFIXQFWLRQ FRXOGEHDOWHUHGRU DIIHFWHGE\WKHLPSOHPHQWDWLRQRIWKHSURSRVHGWUDLODQGKXWFRQVWUXFWLRQ

,VVXH2QVLWHGLVSRVDODQGWUHDWPHQWRIZDVWHZDWHUIURPWKHSURSRVHGKXWFRXOGKDYHGHOHWHULRXV HIIHFWVWRVRLODQGZDWHUFRQGLWLRQVLIWKHV\VWHPLVQRWVLWHGGHVLJQHGDQGLQVWDOOHGSURSHUO\

$QDO\WLFDO,QGLFDWRUVDQG5HTXLUHPHQWV x 'LVFXVVLRQRIVLWHVSHFLILFVRLOFRQGLWLRQVDQGEDVHOLQHLQYHQWRU\RIVRLORUJDQLFPDWWHU

x $UHD DFUHV RIWHPSRUDU\DQGSHUPDQHQWGLVWXUEDQFHDFFRUGLQJWRKLJKPRGHUDWHORZHURGLELOLW\ VRLOVFODVVHV

x $QDO\VLVRILQFUHDVHGHURVLRQKD]DUGGXHWRJURXQGGLVWXUEDQFH

x $QDO\VLVRIVORSHVWDELOLW\DQGJHRORJLFDOFRQVWUDLQWVDVVRFLDWHGZLWKSURMHFWFRPSRQHQWV

:DWHU5HVRXUFHV

,VVXH*URXQGGLVWXUELQJDFWLYLWLHVDVVRFLDWHGZLWKWKHFRQVWUXFWLRQRIWKHSURSRVHGSDUNLQJORWWKHKXW DQGQHZWUDLOVHJPHQWV SDUWLFXODUO\DWVWUHDPFURVVLQJV PD\UHVXOWLQLQFUHDVHGHURVLRQDQG VHGLPHQWDWLRQWKHUHE\LPSDFWLQJVWUHDPKHDOWKZLWKLQWKHLPPHGLDWHYLFLQLW\RIGLVWXUEDQFH

$QDO\WLFDO,QGLFDWRUVDQG5HTXLUHPHQWV x ,GHQWLILFDWLRQTXDQWLILFDWLRQRIZDWHUVRIWKH86LQFOXGLQJZHWODQGVLQWKH$QDO\VLV$UHD

x 1DUUDWLYHGHVFULSWLRQRIHIIHFWVWRZHWODQGIXQFWLRQVDQGYDOXHV

x 4XDQWLILFDWLRQRIFRQQHFWHGGLVWXUEHGDUHDV &'$ LQWKHYLFLQLW\RIWKH$QDO\VLV$UHD VWUHDP KHDOWK

x ,GHQWLILFDWLRQRIFOHDULQJLQWKH:DWHU,QIOXHQFH=RQH :,= VWUHDPKHDOWK

x ,GHQWLILFDWLRQRIDQ\&OHDQ:DWHU$FW &:$ LPSDLUHGRUWKUHDWHQHGZDWHUERG\VHJPHQWVLQWKH $QDO\VLV$UHD

x )XOOGHVFULSWLRQ V RISURSRVHGWUDLODOLJQPHQWVSDUWLFXODUO\DWVWUHDPFURVVLQJV

+ ,668(6127&$55,(')25:$5')25'(7$,/('$1$/<6,6

x $LU4XDOLW\'XHWRWKHVFRSHDQGVFDOHRIWKLVSURSRVDODLUTXDOLW\ZDVQRWDUHVRXUFHWKDW ZDUUDQWHGIXUWKHUDQDO\VLV$VLGHIURPVKRUWWHUPFRQVWUXFWLRQUHODWHGLPSDFWVWRDLUTXDOLW\ ZKLFKFDQEHDGGUHVVHGZLWK%HVW0DQDJHPHQW3UDFWLFHV WKHSURSRVHGIDFLOLWLHVGRQRWLQFOXGH DQ\WKLQJWKDWUHVXOWVLQPHDVXUDEOHRXWSXWRISROOXWDQWVWRWKHDWPRVSKHUH7KHHIIHFWVWRDLU TXDOLW\LQWKH3URMHFW$UHDZRXOGEHQHJOLJLEOH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 1-9 47 of 200 &KDSWHU3XUSRVHDQG1HHG

x 6RFLDODQG(FRQRPLF5HVRXUFHV'XHWRWKHVFRSHDQGVFDOHRIWKLVSURSRVDOVRFLDODQGHFRQRPLF LPSDFWVZHUHQRWGHHPHGQHFHVVDU\IRUGHWDLOHGDQDO\VLVLQWKLV($6+$ZRXOGFRQVWUXFWDQG PDLQWDLQWKHKXWSULPDULO\ZLWKLWVVWDIIDQGYROXQWHHUV%H\RQGWKDWDQ\VKRUWWHUP FRQVWUXFWLRQUHODWHGHPSOR\PHQWZRXOGEHH[SHFWHGWREHPLQLPDO1RDGGLWLRQDO&RXQW\ VHUYLFHVZRXOGEHUHTXLUHG

x 7UHVSDVV7UHVSDVVFRQFHUQVZHUHUDLVHGHDUO\LQWKHSODQQLQJSURFHVVZKHQWKHKXWZDVEHLQJ FRQVLGHUHGIRUVXPPHUXVH2ZQHUVRISDWHQWHGPLQLQJFODLPVLQWKHSURMHFWDUHDH[SUHVVHG FRQFHUQWKDWKXWXVHUVZRXOGEHLQFOLQHGWRH[SORUHWKHDUHDHVSHFLDOO\GXULQJWKHVXPPHU +RZHYHUWKLVLVVXHZDVQRWIXUWKHUDQDO\]HGEHFDXVHWKHSURSRVDOQRZRQO\LQFOXGHVZLQWHUXVH 6KRXOGDUHTXHVWIRUVXPPHUXVHRIWKHKXWEHVXEPLWWHGDQGDFFHSWHGLQWKHIXWXUHDVHSDUDWH 1(3$HYDOXDWLRQZRXOGEHUHTXLUHG

, 6&23(2)$1$/<6,6

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

- )25(676(59,&(32/,&<$1'',5(&7,21

/$1'$1'5(6285&(0$1$*(0(173/$1',5(&7,21

7KH:51)/DQGDQG5HVRXUFH0DQDJHPHQW3ODQ )RUHVW3ODQ LGHQWLILHVWKH1)6ODQGVLQWKH YLFLQLW\RIWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWVLWHDVZLWKLQ0DQDJHPHQW$UHD %DFNFRXQWU\5HFUHDWLRQ1RQ0RWRUL]HG0RWRUL]HGWUDYHOLVSURKLELWHGLQ0DQDJHPHQW$UHD H[FHSWZKHUHDXWKRUL]HGE\683IRUDGPLQLVWUDWLRQRISHUPLWWHGIDFLOLWLHVIRU)RUHVW6HUYLFH DGPLQLVWUDWLRQRUIRUHPHUJHQF\SXUSRVHV

x 7KH7KHPHRIWKLVPDQDJHPHQWDUHDLV³%DFNFRXQWU\QRQPRWRUL]HGUHFUHDWLRQDUHDVDUH PDQDJHGWRSURYLGHUHFUHDWLRQRSSRUWXQLWLHVLQDQDWXUDODSSHDULQJODQGVFDSH´

x 7KH'HVLUHG&RQGLWLRQIRUWKLVPDQDJHPHQWDUHDLQFOXGHV³$YDULHW\RIQRQPRWRUL]HG UHFUHDWLRQRSSRUWXQLWLHVDUHSURYLGHGLQDQDWXUDORUQDWXUDODSSHDULQJVHWWLQJ«LPSURYHPHQWV VXFKDVWUDLOKHDGVWUDLOVVLJQVEULGJHVIHQFHVKXWVRUVKHOWHUVWKDWHQKDQFHWKHUHFUHDWLRQDO H[SHULHQFHPD\EHSUHVHQW´

86'$)RUHVW6HUYLFHS +XWVDUHSHUPLWWHGE\WKH)RUHVW6HUYLFHXQGHUD)RUHVW6HUYLFH0DQXDO )60 6KHOWHU3HUPLW±XVH FRGHZKLFKLQFOXGHV³WUDLOVKHOWHUVZDLWLQJVKHGVDQGVLPLODUVWUXFWXUHVRIDUHFUHDWLRQDOQDWXUH´ 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 1-10 48 of 200 &KDSWHU3XUSRVHDQG1HHG

$VSDUWRIWKLVDQDO\VLVWKH3URSRVHG$FWLRQDQG3XUSRVHDQG1HHGZHUHUHYLHZHGWRLGHQWLI\SRWHQWLDO LQFRQVLVWHQFLHVZLWKWKH)RUHVWZLGH*RDOVDQG2EMHFWLYHVDVZHOODVWKHVSHFLILF6WDQGDUGVDQG *XLGHOLQHVIRU0DQDJHPHQW$UHD1RLQFRQVLVWHQFLHVZHUHLGHQWLILHG

6287+(5152&.,(6/<1;0$1$*(0(17',5(&7,21

7KH6RXWKHUQ5RFNLHV/\Q[0DQDJHPHQW'LUHFWLRQ 65/0' DPHQGHGWKH)RUHVW3ODQZLWK UHVSHFWWR)RUHVWZLGHDQG0DQDJHPHQW$UHD&DQDGDO\Q[VWDQGDUGVDQGJXLGHOLQHV7KH3URSRVHG $FWLRQZDVFRPSDUHGDJDLQVWSHUWLQHQW)RUHVWZLGHDQG0DQDJHPHQW$UHDVWDQGDUGVDQGJXLGHOLQHVQR LQFRQVLVWHQFLHVEHWZHHQWKHSURSRVDODQGSHUWLQHQWVWDQGDUGVDQGJXLGHOLQHVZHUHLGHQWLILHG

6287+(516800,7&2817

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

'HYHORSDO\Q[FXPXODWLYHHIIHFWVDQDO\VLVIRUVRXWKHUQ6XPPLW&RXQW\

,GHQWLI\DO\Q[FRQVHUYDWLRQFRUULGRUZLWKLQVRXWKHUQ6XPPLW&RXQW\ZKHUHWKH)RUHVW6HUYLFH FDQSURPRWHDQGLPSOHPHQWO\Q[KDELWDWFRQVHUYDWLRQ

'HYHORSDOLVWRIPDQDJHPHQWSUDFWLFHVDQGRSSRUWXQLWLHVWKDWFDQFRQVHUYHRULPSURYHWKH IXQFWLRQDOLW\RIO\Q[KDELWDWDQGSURPRWHO\Q[FRQVHUYDWLRQDQG

&RPPXQLFDWHDO\Q[FRQVHUYDWLRQVWUDWHJ\LQVRXWKHUQ6XPPLW&RXQW\WRERWKLQWHUQDODQG H[WHUQDOSDUWQHUV

. '(&,6,2172%(0$'(

%DVHGRQSUHOLPLQDU\LQWHUQDO)RUHVW6HUYLFHDQDO\VLVDQGH[WHUQDOSXEOLFVFRSLQJDQGDSUHOLPLQDU\ HYDOXDWLRQRIWKHFRQWH[WDQGLQWHQVLW\IDFWRUVFRQWDLQHGLQ&)5WKH)RUHVW6HUYLFH GHWHUPLQHGHDUO\RQWKDWDQ($LVDSSURSULDWHWRUHYLHZDQDO\]HDQGGRFXPHQWWKHSRWHQWLDOLPSDFWVWR WKHKXPDQSK\VLFDODQGELRORJLFDOHQYLURQPHQWDQWLFLSDWHGWRUHVXOWIURPLPSOHPHQWDWLRQRIWKH 3URSRVHG$FWLRQ7KLV($LVDGLVFORVXUHUDWKHUWKDQDGHFLVLRQGRFXPHQWDQGLWVSXUSRVHLVWRGHWHUPLQH LIWKHUHDUHDQ\SRWHQWLDOO\VLJQLILFDQWLPSDFWV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 1-11 49 of 200 &KDSWHU3XUSRVHDQG1HHG

$)LQGLQJRI1R6LJQLILFDQW,PSDFW )216, LVLQFOXGHGDVDSDUWRIWKLV($ &KDSWHU ,QDGGLWLRQD GUDIW'HFLVLRQ1RWLFHKDVEHHQUHOHDVHGLQFRQMXQFWLRQZLWKWKLV($

/ 27+(51(&(66$5<3(50,76/,&(16(6(17,7/(0(176 $1'25&2168/7$7,21

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

x 7KLVSURMHFWPHHWVDOOFULWHULDIRUSURJUDPPDWLFFRQFXUUHQFHXQGHUWKH&RORUDGR/\Q[3URMHFW 'HFLVLRQ6FUHHQV7KHUHIRUHFRQVXOWDWLRQIRU&DQDGDO\Q[LVFRQVLGHUHGFRPSOHWHIRUWKLV SURSRVHGSURMHFW

x &RPSOLDQFHZLWK&RORUDGR'HSDUWPHQWRI3XEOLF+HDOWKDQG(QYLURQPHQW6WRUPZDWHU &RQVWUXFWLRQ$FWLYLWLHV3HUPLW

x 6XPPLW&RXQW\*HQHUDO&RQVWUXFWLRQ3HUPLW&RQGLWLRQDO8VH3HUPLWDQGRURWKHUFXUUHQWFRXQW\ SURFHVV

x 6XPPLW&RXQW\&RQGLWLRQDO8VH3HUPLWIRUWUDLOFRQVWUXFWLRQ

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 1-12 50 of 200 &KDSWHU 'HVFULSWLRQRI$OWHUQDWLYHV

51 of 200 &KDSWHU'HVFULSWLRQRI$OWHUQDWLYHV

'(6&5,37,212)$/7(51$7,9(6

$ ,1752'8&7,21

&KDSWHUGHVFULEHVWKHDOWHUQDWLYHVFRQVLGHUHGZLWKLQWKLVHQYLURQPHQWDODQDO\VLV0DQDJHPHQW 5HTXLUHPHQWVDQG3URMHFW'HVLJQ)HDWXUHV 3')V LQFOXGHGLQWKH3URSRVHG$FWLRQWROHVVHQRUDYRLG LPSDFWVDUHDOVRGHWDLOHG

7KH3URSRVHG$FWLRQZDVPRGLILHGLQUHVSRQVHWRVFRSLQJZKLFKLVGLVFXVVHGIROORZLQJWKH3URSRVHG $FWLRQGHVFULSWLRQLQ$OWHUQDWLYHVDQG'HVLJQ&RPSRQHQWV&RQVLGHUHGEXW(OLPLQDWHGIURP'HWDLOHG $QDO\VLV

% $/7(51$7,9(6&216,'(5(',1'(7$,/

$/7(51$7,9(±12$&7,21

$1R$FWLRQ$OWHUQDWLYHKDVEHHQLQFOXGHGLQWKLVDQDO\VLVIRUUHYLHZDORQJVLGHWKH3URSRVHG$FWLRQ%\ GHILQLWLRQWKH1R$FWLRQ$OWHUQDWLYHUHSUHVHQWVDFRQWLQXDWLRQRIH[LVWLQJPDQDJHPHQWSUDFWLFHVZLWKRXW FKDQJHVDGGLWLRQVRUXSJUDGHVWRH[LVWLQJFRQGLWLRQV([LVWLQJFRQGLWLRQVRIWKH3URMHFW$UHDDUH GHSLFWHGRQ)LJXUH

8QGHUWKH1R$FWLRQ$OWHUQDWLYHWKHUHZRXOGEHQRKXWFRQVWUXFWHGLQ:HEHU*XOFKRUDVVRFLDWHGDFFHVV WUDLOVDQGSDUNLQJLPSURYHPHQWV

$/7(51$7,9(±7+(352326('$&7,21

7KH3URSRVHG$FWLRQLVWRDPHQG6+$¶V683WRLQFOXGHFRQVWUXFWLRQDQGRSHUDWLRQRIDEDFNFRXQWU\KXW LQFOXGLQJDFFHVVWUDLOVDQGDGHGLFDWHGSDUNLQJORW RQ1)6ODQGVRQWKHQRUWKHUQDVSHFWRI%DOG 0RXQWDLQ&RPSRQHQWVRIWKH3URSRVHG$FWLRQDUHGHSLFWHGRQ)LJXUH3KRWRVRIWKHSURSRVHGKXW ORFDWLRQDUHLQFOXGHGLQ&KDSWHU6HFWLRQ&±6FHQHU\

7KHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWVLWHLVORFDWHGDWDQDSSUR[LPDWHHOHYDWLRQRIIHHW 7KHSURSRVHGWUDYHOURXWHV GLVFXVVHGEHORZ FURVV1)6ODQGVZLWKLQWKH*ROGHQ+RUVHVKRHSODQQLQJ DUHD6XPPLW&RXQW\2SHQ6SDFHDQG%UHFNHQULGJH2SHQ6SDFHSURSHUW\7KHSURSRVDOWRXVH6XPPLW &RXQW\DQG%UHFNHQULGJH2SHQ6SDFHODQGIRUWUDYHOURXWHVKDVEHHQUHYLHZHGDQGDSSURYHGE\WKH 6XPPLW&RXQW\2SHQ6SDFH&RPPLVVLRQDQGWKH6XPPLW&RXQW\%RDUGRI&RXQW\&RPPLVVLRQHUV

+XW'HVLJQDQG6SHFLILFDWLRQV

$VSDUWRIWKH3URSRVHG$FWLRQ6+$LQWHQGVWRLQFRUSRUDWHJUHHQEXLOGLQJWHFKQLTXHVZLWKFRQVWUXFWLRQ RIWKHSURSRVHGKXWLQFOXGLQJSDVVLYHVRODU&RQVWUXFWLRQZRXOGLQFOXGHSRVWDQGEHDPZLWK SUHIDEULFDWHGSDQHOVRIKLJKLQVXODWLRQSURSHUWLHV,QJHQHUDOWKHGHVLJQSDUDPHWHUVRIWKHVWUXFWXUHDUH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 52 of 200 &KDSWHU'HVFULSWLRQRI$OWHUQDWLYHV

x 2QHRUWZRVWRU\

x %HWZHHQDQGVTXDUHIHHWLQVL]H

x $FFRPPRGDWLRQVIRUXSWRJXHVWV

x 3ULYDWHKXWPDVWHU¶VTXDUWHUVWRDFFRPPRGDWHWZRWRIRXUSHRSOH

x +HDWSURYLGHGE\DFRPELQDWLRQRISDVVLYHVRODUGHVLJQDQGZRRGRUSURSDQHEXUQLQJVWRYH

x &RPSRVWLQJWRLOHWV

x $ZRRGEXUQLQJVDXQD HLWKHUSDUWRIWKHEXLOGLQJRUDVHSDUDWHVWUXFWXUH

x $OHDFKILHOGWRKDQGOHJUH\ZDWHUIURPNLWFKHQVLQNVDQGGLVFKDUJHIURPWKHFRPSRVWLQJWRLOHWV

x (OHFWULFLW\IRUOLJKWVSURYLGHGE\SKRWRYROWDLFFHOOV

*XHVW$FFHVVWRWKH:HEHU*XOFK%DFNFRXQWU\+XW

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

7KHILQDOVHJPHQWRIWUDLOEHWZHHQWKH8SSHU7UDLORI7HDUVDQGWKHKXWVLWH 6HJPHQW( ZRXOGEH FRQVWUXFWHGWRDFFRPPRGDWHQRQPRWRUL]HGXVHUVLQWKHZLQWHUDVZHOODVDOOWHUUDLQYHKLFOHV $79V IRU FRQVWUXFWLRQPDLQWHQDQFHRIWKHKXWGXULQJWKHVXPPHUDQGHDUO\IDOORQO\6HJPHQW(ZRXOGEHFORVHGWR VXPPHUXVH GLVFXVVHGEHORZ

,QWRWDOWKHSURSRVHGDFFHVVURXWHZRXOGH[WHQGPLOHV,WZRXOGXWLOL]HPLOHVRI6DOOLH%DUEHU 5RDGDQG1LJKWPDUHRQ%DOG\DQGZRXOGLQYROYHPLOHVRIQHZWUDLOFRQVWUXFWLRQ7RWDOYHUWLFDOJDLQ EHWZHHQWKHSURSRVHGSDUNLQJDUHDDQGWKHKXWLVURXJKO\IHHW6+$SURSRVHVWRFRQVWUXFWWKLVURXWH ZLWKPLQLPDOWUHHUHPRYDODQGWRIROORZ)RUHVW6HUYLFHVWDQGDUGVIRUFURVVFRXQWU\VNLLQJDQG VQRZVKRHLQJWUDLOV 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 53 of 200 &KDSWHU'HVFULSWLRQRI$OWHUQDWLYHV

7DEOH 6XPPDU\7DEOHRI7UDLO6HJPHQWV 7UDLO1DPH 'LVWDQFH PLOHV ([LVWLQJ3URSRVHG $ 6DOOLH%DUEHU5RDG ([LVWLQJ % 1LJKWPDUHRQ%DOG\ ([LVWLQJ & 1LJKWPDUHRQ%DOG\([WHQVLRQ 3URSRVHG ' 8SSHU7UDLORI7HDUV $79RQO\ ([LVWLQJ ( 8SSHU7UDLORI7HDUV([WHQVLRQ 3URSRVHG

6+$ZRXOGEHUHVSRQVLEOHIRUWKHFRVWRIFRQVWUXFWLRQDQGPDLQWHQDQFHRIQHZWUDYHOURXWHV3RVVLELOLWLHV IRUFRQVWUXFWLRQLQFOXGHXWLOL]LQJODUJHFUHZVRIYROXQWHHUVWREXLOGWKHWUDLOE\KDQGDQGWKHXVHRIWUDLO EXLOGLQJPDFKLQHU\VXFKDVD6:(&2GR]HU7UDYHOURXWHVWRWKHKXWZRXOGEHPDLQWDLQHGE\6+$DQG ZRXOGEHFOHDUO\PDUNHGZLWKDSSURSULDWHVLJQDJH

)RUHVW6XSHUYLVRU¶V&ORVXUH 7KH$QDO\VLV$UHDLVIXQFWLRQDODVIRUDJLQJGHQQLQJGLXUQDOVHFXULW\KDELWDWDQGLVSDUWRIDO\Q[ PRYHPHQWFRUULGRU$FFRUGLQJO\DZLOGOLIHFRQVHUYDWLRQPHDVXUH²LQWKHIRUPRID)RUHVW6XSHUYLVRU¶V FORVXUH²KDVEHHQLQFOXGHGLQWKH3URSRVHG$FWLRQWRPLQLPL]HGLVWXUEDQFHWR&DQDGDO\Q[DOVR EHQHILWWLQJRWKHUIRUHVWFDUQLYRUHVDQGHON7KH)RUHVW6XSHUYLVRU¶VFORVXUHLVH[SODLQHGKHUHDQG LQFOXGHGLQ7DEOHDVZHOO

3URSRVHG7UDLO6HJPHQW³(´ZRXOGEHFORVHG VLJQHGDQGJDWHG DWLWVLQWHUVHFWLRQZLWK8SSHU7UDLORI 7HDUV 7UDLO6HJPHQW' DQGSURSRVHG7UDLO6HJPHQW³&´7KLV)RUHVW6XSHUYLVRU¶VFORVXUHLVGHVLJQHGWR SUHYHQWKLNLQJDQGELNLQJXVHRISURSRVHG7UDLO6HJPHQW(WRWKHKXWRXWVLGHWKHZLQWHURSHUDWLQJVHDVRQ 5HIHUWR)LJXUHIRUWKHORFDWLRQRISURSRVHG7UDLO6HJPHQW³(´

3DUNLQJ

7KHH[LVWLQJ6DOOLH%DUEHU5RDGWUDLOKHDGH[SHULHQFHVFRQVLGHUDEOHGD\XVHWKURXJKRXWWKH\HDUDQGLVD PDMRUDFFHVVSRUWDOWRWKH*ROGHQ+RUVHVKRHDUHD7KHUHIRUHDGHGLFDWHGRYHUQLJKWSDUNLQJDUHDIRU UHJLVWHUHGKXWJXHVWV DSSUR[LPDWHO\VSDFHV LVSURSRVHGMXVWHDVWRIWKHH[LVWLQJ6DOOLH%DUEHU5RDG 7UDLOKHDGRQWKHQRUWKVLGHRI)UHQFK*XOFK5RDG DWWKHLQWHUVHFWLRQZLWK+XPEXJ+LOO 7KHSURSRVHG SDUNLQJDUHDLVVKRZQLQ3KRWR& UHIHUWR&KDSWHU6HFWLRQ&±6FHQHU\

7KHSURSRVHGSDUNLQJDUHDZRXOGDFFRPPRGDWH:HEHU*XOFKEDFNFRXQWU\KXWXVHUVGXULQJZLQWHU PRQWKV$SSUR[LPDWHO\WZRSDUNLQJVSDFHVZRXOGEHDOORFDWHGWRQRQKXWXVHURYHUQLJKWSDUNLQJ1RQ KXWXVHUVZRXOGQHHGWRREWDLQDXWKRUL]DWLRQIURP6XPPLW+XWV$VVRFLDWLRQWRSDUNRYHUQLJKWLQWKH SDUNLQJORW

2QHRWKHUSDUNLQJRSWLRQH[LVWVIRUKXWXVHUV²WKH%UHFNHQULGJH,FH5LQN7KLVSDUNLQJRSWLRQZRXOGEH LGHQWLILHGLQWKHJHQHUDOKXWXVHLQIRUPDWLRQSDFNHWSURYLGHGE\6+$+XWXVHUVZRXOGEHDEOHWROHDYH 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 54 of 200 &KDSWHU'HVFULSWLRQRI$OWHUQDWLYHV

WKHLUFDUVDWWKH,FH5LQNRYHUQLJKW DIWHUWKH\DFTXLUHDSHUPLWIURPWKH7RZQRI%UHFNHQULGJH DQGWDNH WKH6XPPLW6WDJHWRWKH%DOG0RXQWDLQ7UDLOKHDG2YHUQLJKWSDUNLQJLVFXUUHQWO\DQGZLOOUHPDLQ VWULFWO\SURKLELWHGDWWKH%DOG0RXQWDLQ7UDLOKHDG

:DWHU

$VLVWKHFDVHZLWKDOOKXWVPDQDJHGE\6+$SRWDEOHZDWHUZRXOGFRPHIURPPHOWHGVQRZWKDWWKHKXW XVHUFRXOGWKHQWUHDWIRUFRQVXPSWLRQ

&RQVWUXFWLRQDQG0DLQWHQDQFH$FFHVVWRWKH3URSRVHG:HEHU*XOFK %DFNFRXQWU\+XW

7KHUHFXUUHQWO\LVQRURDGDFFHVVWRWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWVLWH7KHFORVHVWURDGWKDW LVVXLWDEOHIRUIXOOVL]HYHKLFOHWUDIILFLV0W%DOG\5RDG )'5:

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¶V&RQGLWLRQDO8VH 3HUPLWSURFHVV

3XEOLFPRWRUL]HGXVHRIWKH$79URXWHZRXOGEHVWULFWO\SURKLELWHG*DWHVDQGVLJQDJHZRXOGEHLQVWDOOHG DWNH\LQWHUVHFWLRQVDORQJWKHSURSRVHG$79URXWHWRSUHFOXGHSXEOLFPRWRUL]HGXVH&XWVDQGILOOV UHVXOWLQJIURPFRQVWUXFWLRQRIWKHSURSRVHG$79URXWHZRXOGEHUHYHJHWDWHGWRSURPRWHVRLOVWDELOL]DWLRQ $VSUHYLRXVO\LQGLFDWHGD)RUHVW6XSHUYLVRU¶VFORVXUHLVDOVRSURSRVHGDWWKHLQWHUVHFWLRQRI7UDLO 6HJPHQWV&'DQG(WRSUHYHQWXVHRI7UDLO6HJPHQW(GXULQJWKHVXPPHU6+$DQGWKH)RUHVW6HUYLFH ZLOOHQVXUHWKDWPDLQWHQDQFHWULSVLQYROYLQJWKHXVHRI$79VDUHFRQGXFWHGRXWVLGHRIWKHKXQWLQJVHDVRQ HDFK\HDU0RWRUL]HGXVHRIWKLVWUDLOGXULQJWKHZLQWHUZRXOGRQO\RFFXULQWKHHYHQWRIDQHPHUJHQF\ 6+$GRHVQRWRZQDVQRZPRELOHDQGGRHVQRWSODQWRXVHRQHIRUPDLQWHQDQFHRURSHUDWLRQV

+XWPDVWHUVZRXOGEHH[SHFWHGWRWUDYHOWRWKHKXWDSSUR[LPDWHO\RQFHDZHHNGXULQJWKHZLQWHUIRU URXWLQHPDLQWHQDQFHDQGXSNHHS7KH\ZRXOGEHH[SHFWHGWRVSHQGWKHQLJKWDSSUR[LPDWHO\KDOIRIWKH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 55 of 200 &KDSWHU'HVFULSWLRQRI$OWHUQDWLYHV

WLPHDQGW\SLFDOO\KDYHDJXHVWZLWKWKHPDSSUR[LPDWHO\KDOIRIWKHWLPH6+$WLJKWO\PDQDJHVWKHXVH RIKXWPDVWHUV¶TXDUWHUVWRUHJXODWHWKHWLPLQJRIRFFXSDQF\

%DFNFRXQWU\6NL7HUUDLQ$VVRFLDWHGZLWKWKH3URSRVHG:HEHU*XOFK %DFNFRXQWU\+XW

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

& 02',),&$7,2160$'(727+(352326('$&7,21

7KH:HEHU*XOFKEDFNFRXQWU\KXWZDVRULJLQDOO\SURSRVHG DQGVFRSHGWRWKHSXEOLF IRU\HDUURXQGXVH +RZHYHUDVDUHVXOWRIERWKSXEOLFDQGLQWHUQDO$JHQF\FRQFHUQVVXPPHUXVHRIWKHKXWZDVGURSSHG IURPWKHSURSRVDOWRPLQLPL]HLPSDFWVIURPVXPPHUUHFUHDWLRQLQWKH3URMHFW$UHDWR&DQDGDO\Q[ DQGHON6KRXOGDUHTXHVWIRUVXPPHUXVHDULVHLQWKHIXWXUHDQGVKRXOGWKDWUHTXHVWHGEHDFFHSWHGE\WKH )RUHVW6HUYLFHDVHSDUDWH1(3$HYDOXDWLRQZRXOGEHUHTXLUHG

' $/7(51$7,9(6$1''(6,*1&20321(176&216,'(5(' %87(/,0,1$7(')520'(7$,/('$1$/<6,6

+87/2&$7,21

%DVHGRQH[SHULHQFHDQGDQH[DPLQDWLRQRIKXWUHVHUYDWLRQGDWDDQGKXWXVHUVXUYH\V6+$KDVDFOHDU XQGHUVWDQGLQJRIZKDWFKDUDFWHULVWLFVPDNHDKXWVXFFHVVIXODQGSRSXODUZLWKWKHSXEOLF$PXOWLWXGHRI TXDOLWLHVDUHLPSRUWDQW²IURPERWKRSHUDWLRQDODQGXVHUSHUVSHFWLYHV&ULWLFDOFRPSRQHQWVRIKXWORFDWLRQ VHOHFWLRQLQFOXGHEXWDUHQRWOLPLWHGWR

x 6RODU([SRVXUHDQG9LHZV*RRGYLHZVDQGVXQQ\GHFNV SUHIHUDEO\VRXWKIDFLQJ FRQWULEXWHWR WKHSXEOLF¶VHQMR\PHQWRIWKHKXWH[SHULHQFHDQGDSSUHFLDWLRQRIWKHLUSXEOLFODQGV)XUWKHUPRUH JRRGVRODUJDLQLVFULWLFDOIRUWKHSKRWRYROWDLFFHOOVWRJHQHUDWHHOHFWULFLW\DQGIRUDSDVVLYHVRODU GHVLJQWRKHDWDKXW

x 7HUUDLQ4XDOLW\*RRGEDFNFRXQWU\WHUUDLQLVYHU\LPSRUWDQWIRUWKHVXFFHVVRIDKXW+XWVWKDWGR QRWKDYHTXDOLW\EDFNFRXQWU\WHUUDLQQHDUE\DQGRUGRQRWKDYHHDV\DFFHVVZLOOQRWEHDVSRSXODU ZLWKWKHSXEOLF$KXWVLWHZLWKJRRGVNLLQJRSSRUWXQLWLHVZLOOJHQHUDOO\KDYHQRUWKHDVWDVSHFW VORSHVWKDWDUHEHWZHHQDQGGHJUHHV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 56 of 200 &KDSWHU'HVFULSWLRQRI$OWHUQDWLYHV

x 7UDYHO5RXWHV0RVWKXWVKDYHVRPHVRUWRIUHJXODWRU\WUDYHOUHVWULFWLRQVXUURXQGLQJWKHPZKLFK SUHVHUYHVWKHTXLHWQRQPRWRUL]HGQDWXUHRIWKHEDFNFRXQWU\KXWH[SHULHQFH1RQPRWRUL]HG DFFHVVLQWRKXWVLVSUHIHUUHGDQGPRVWKXWVKDYHDWOHDVWRQHQRQPRWRUL]HGURXWHKRZHYHUVKDUHG LHPRWRUL]HGDQGQRQPRWRUL]HG URXWHVDUHDOVRFRPPRQ

x 2SHUDWLRQDO&RQVLGHUDWLRQV2WKHURSHUDWLRQDOFRQVLGHUDWLRQVLQFOXGHDIODWEXLOGLQJVLWHVRLOV WKDWDUHDSSURSULDWHWRDFFRPPRGDWHDVHSWLFV\VWHPDQGVXPPHUDFFHVVIRUVWRFNLQJPDLQWDLQLQJ WKHKXW

x +XWWR+XW7RXULQJ7KHRULJLQDOFRQFHSWRIWKH70+$V\VWHPDQGWKH6+$V\VWHPZDVIRXQGHG RQWKHKXWWRKXWYLVLRQDQGWKHRULJLQDO0'3VIRUWKHVHRUJDQL]DWLRQVZHUHGHYLVHGZLWKDQ HPSKDVLVRQWKLVFRQFHSW

7KHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWORFDWLRQZDVWKRURXJKO\YHWWHGDQGVWXGLHG,QWKHSODQQLQJ SKDVHRIWKLVSURSRVDO6+$FUHDWHGDFRPPLWWHHWRLGHQWLI\DQGHYDOXDWHSRWHQWLDOQHZKXWVLWHVWKDW ZRXOGUHDOL]HWKHJRDOVRIWKH6+$0'37KHJURXSLGHQWLILHGQXPHURXVSRWHQWLDOVLWHVWRH[DPLQH DQGVHYHUDOJURXSILHOGYLVLWVZHUHPDGH'LOORQ5DQJHU'LVWULFWUHSUHVHQWDWLYHVSDUWLFLSDWHGLQWKHVHVLWH YLVLWV7KHVHSRWHQWLDOVLWHVLQFOXGHG

x :HEHU*XOFK x /RZHU&DWDUDFW/DNH

x :LVH0RXQWDLQ x 2SKLU0RXQWDLQ

x +XPEXJ*XOFK x 6RXWK3HDN

x )DUQFRPE+LOO

7KHDELOLW\WRIXOILOOWKH6+$0'3DQGSURYLGHDFRQQHFWLRQUHODWLYHO\IUHHRIDYDODQFKHGDQJHU EHWZHHQWKH%UHFNHQULGJHDUHDDQGWKH0RQWH]XPD.H\VWRQHDUHDZHLJKHGKHDYLO\LQWKHILQDOVHOHFWLRQ $OOKXWVLWHVH[DPLQHGKDGSRVLWLYHDQGQHJDWLYHWUDLWVEXWWZRVLWHVZHUHVHOHFWHGDVWKHSUHIHUUHGVLWHV :LVH0RXQWDLQDQG:HEHU*XOFK IRUWKHLUDELOLW\WRSURYLGHWKHSXEOLFZLWKWKHEHVWSRVVLEOHKXW H[SHULHQFH

7KHVHWZRSUHIHUUHGVLWHVRIIHUHGDFRPELQDWLRQRIH[FHOOHQWVNLWRXULQJVSHFWDFXODUYLHZVDQGDUHPRWH IHHO7KH\KDYHIODWEXLOGLQJVLWHVWKDWDUHIUHHRIZHWODQGV7KHVHVLWHVRIIHUQRWRQO\UHFUHDWLRQ RSSRUWXQLWLHVQHDUWKHKXWVWKHPVHOYHVEXWSURYLGHWKHSRWHQWLDOIRUKXWWRKXWWRXUVEHWZHHQWKHP7KH URXWHVEHWZHHQWKHKXWVDUHFRQVLVWHQWZLWKWKHRULJLQDODQGFXUUHQW6+$PDVWHUSODQDQGYLVLRQDQGJLYH WKHEDFNFRXQWU\WRXUHUWKHSRWHQWLDOWRFRQQHFWIURP%UHFNHQULGJHWR0RQWH]XPDYLDDPDUNHG PDLQWDLQHGWUDLOV\VWHP

7KH:LVH0RXQWDLQVLWHZDVHOLPLQDWHGIURPFRQVLGHUDWLRQDWWKHGLUHFWLRQRIZLOGOLIHVSHFLDOLVWVGXHWR LVVXHVZLWK&DQDGDO\Q[KDELWDWDQGODFNRIFRQVLVWHQF\ZLWKWKH)RUHVW3ODQDVWKHVLWHZDVZLWKLQ D0DQDJHPHQW$UHD/DQGVFDSH/LQNDJH$UHDWKDWVSHFLILHVOLJKWRUPLQLPDOLPSDFWIURPKXPDQXVH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 57 of 200 &KDSWHU'HVFULSWLRQRI$OWHUQDWLYHV

'XULQJWKHSODQQLQJSKDVH6+$VHULRXVO\FRQVLGHUHGDKXWVLWHHDVWRI:HEHU*XOFKLQ%ODFN*XOFK +RZHYHULWZDVGHWHUPLQHGWKDWLWVORFDWLRQZDVRQDQXQSDWHQWHGPLQLQJFODLP7KHRZQHURIWKH XQSDWHQWHGPLQLQJFODLPZDVFRQWDFWHGUHJDUGLQJXVHSXUFKDVHRIWKHVH1)6ODQGVEXWDQDJUHHPHQW FRXOGQRWEHUHDFKHG6+$DOVRSURSRVHGWRWKH6XPPLW&RXQW\DQG%UHFNHQULGJH2SHQ6SDFH$GYLVRU\ &RPPLWWHHVWRXWLOL]HWKHLUMRLQWO\RZQHG%ODFN*XOFKVLWHEXWWKH\GHWHUPLQHGWKLVZDVQRWDQ DSSURSULDWHXVHRIWKHLUODQG

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

)DUQFRPE+LOO2SKLU0RXQWDLQDQG6RXWK3HDNZHUHHOLPLQDWHGIRUDQXPEHURIUHDVRQVLQFOXGLQJ SUR[LPLW\WRDWUDLOKHDGTXDQWLW\TXDOLW\RIEDFNFRXQWU\WHUUDLQHOHYDWLRQSULYDWHODQGLVVXHVPRWRUL]HG XVHQHDUE\DQGORFDWLRQZLWKLQ.H\VWRQH¶V683ERXQGDU\ 6RXWK3HDN

5HIHUWR$SSHQGL[&±$OWHUQDWH+XW/RFDWLRQVZKLFKLQFOXGHVDPDWUL[RIFULWHULDIRUDQLGHDOKXW ORFDWLRQDQGKRZHDFKVLWHPHWWKHFULWHULD

)XUWKHUPRUHQXPHURXVRWKHUORFDWLRQVIRUDEDFNFRXQWU\KXWZHUHVXJJHVWHGE\FRPPHQWHUVGXULQJWKH VFRSLQJSHULRG7KHVHVXJJHVWLRQVZHUHPDGHLQUHVSRQVHWRWKHSURSRVHGKXW¶VORFDWLRQFDSDFLW\DQG DFFHVVDQGLQFOXGHG

x 3HUX&UHHN x *ODFLHU0RXQWDLQ x 1RUWK7DUU\DOO&UHHN'HDGZRRG&UHHN

x &KLKXDKXD*XOFK x +RUVHVKRH%DVLQ x )UHQFK3DVV

x 6DLQWV-RKQ x 3WDUPLJDQ3HDN x ,QGLDQD&UHHN

x &LQQDPRQ*XOFK x 0RQLWRU*XOFK x *UL]]O\*XOFK

x +XQNLGRUL0LQH x %ODFN*XOFK x :LVH0RXQWDLQ

(DFKRIWKHVHORFDWLRQVZDVFRQVLGHUHGE\6+$DQGWKH)RUHVW6HUYLFHEXWIRUDPL[RIRSHUDWLRQDO UHFUHDWLRQDODQGHQYLURQPHQWDOIDFWRUVZDVQRWFDUULHGIRUZDUGLQWRGHWDLOHGDQDO\VLV

+87'(6,*1

6XJJHVWLRQVZHUHPDGHWRPLQLPL]HWKHRYHUQLJKWFDSDFLW\RIWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXW LQRUGHUWRSUHVHUYHDPRUHLQWLPDWHJXHVWH[SHULHQFH7KHSURSRVHGKXW¶VVL]HFDSDFLW\ZDVWKRURXJKO\

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 58 of 200 &KDSWHU'HVFULSWLRQRI$OWHUQDWLYHV

FRQVLGHUHGLQOLJKWRIWKHKXWXVHU¶VH[SHULHQFHUHVRXUFHLPSDFWVDQG6+$¶VILQDQFLDOUHDOLWLHV LHWKH FRVWRIFRQVWUXFWLRQDQGRSHUDWLRQV %DFNFRXQWU\KXWVKDYHKLJKRYHUKHDGIRUPDQDJHPHQWRSHUDWLRQV DQGXSNHHSDFDSDFLW\RISHRSOHSOXVKXWPDVWHU¶VTXDUWHUVZDVGHWHUPLQHGWREHVWEDODQFHWKHVH IDFWRUV)RUUHIHUHQFHRWKHU6+$PDQDJHGKXWVUDQJHLQFDSDFLW\IURPWRSHRSOH

75$,/+($'/2&$7,216

$OWHUQDWLYHWUDLOKHDGORFDWLRQVIURPZKLFKWRDFFHVVWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWZHUH VXJJHVWHGE\FRPPHQWHUVLQWKHVFRSLQJSHULRG²LQFOXGLQJDWWKHHQGRI0W%DOG\5RDGDQGDWWKH 0W%DOG\5RDG6DOOLH%DUEHULQWHUVHFWLRQ1HLWKHURIWKHVHORFDWLRQVZHUHGHHPHGVXLWDEOHGXHWROLPLWHG DYDLODEOHSDUNLQJVSDFHFXUUHQWUHFUHDWLRQDOXVHDWWKHVHWUDLOKHDGVDQGWKHXQDYDLODELOLW\RIRYHUQLJKW SDUNLQJ

75$,/$&&(66

7KHVXJJHVWLRQZDVPDGHWRFRQILQHKXWXVHUV²ERWKDUULYLQJDQGGHSDUWLQJ²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

( 0$1$*(0(175(48,5(0(176

,QRUGHUWRPLQLPL]HSRWHQWLDOUHVRXUFHLPSDFWVIURPFRQVWUXFWLRQDQGLPSOHPHQWDWLRQRIDQ\DSSURYHG SURMHFWV0DQDJHPHQW5HTXLUHPHQWVKDYHEHHQLQFRUSRUDWHGLQWR$OWHUQDWLYH7KHVHDUHLGHQWLILHGLQ 7DEOH

0DQDJHPHQW5HTXLUHPHQWVDUHFRPSRVHGRISURMHFWGHVLJQIHDWXUHV 3') ZKLFKDUHGHYLVHGLQWKHSUH DQDO\VLVDQGDQDO\VLVSKDVHVWRUHGXFHHQYLURQPHQWDOLPSDFWVWKDWPXVWEHFRPSOLHGZLWKE\ODZ UHJXODWLRQRUSROLF\7KH\LQFOXGHEXWDUHQRWOLPLWHGWR%03VVWDQGDUGVDQGJXLGHOLQHVDQGVWDQGDUG RSHUDWLQJSURFHGXUHV

3')ZHUHGHVLJQHGE\)RUHVW6HUYLFHDQGFRQVXOWLQJUHVRXUFHVSHFLDOLVWVLQYROYHGLQWKLVDQDO\VLV7KH\ FRPHIURPIHGHUDOVWDWHDQGORFDOODZVUHJXODWLRQVDQGSROLFLHVIRUHVWSODQVVFLHQWLILFUHVHDUFKDQG IURPH[SHULHQFHLQGHVLJQLQJVLPLODUSURMHFWV7KHEXONRIWKH3')DUHFRQVLGHUHGFRPPRQSUDFWLFHVWKDW KDYHEHHQKLVWRULFDOO\XVHGLQDOSLQHDQGVXEDOSLQHHQYLURQPHQWVWRSUHYHQWRUGHFUHDVHSRWHQWLDO UHVRXUFHLPSDFWV7KH\DUHKLJKO\HIIHFWLYHPHWKRGVWKDWFDQEHSODQQHGLQDGYDQFHDQGDGDSWHGWRVLWH FRQGLWLRQVDVQHHGHG

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 59 of 200 &KDSWHU'HVFULSWLRQRI$OWHUQDWLYHV

7KHSRWHQWLDOHIIHFWVRILPSOHPHQWLQJWKH3URSRVHG$FWLRQ SURYLGHGLQ&KDSWHU ZHUHDQDO\]HGZLWK WKHVH3')DSSOLHG

5HVSRQVLELOLW\IRUHQVXULQJWKDWUHTXLUHG3')DUHLPSOHPHQWHGUHVWVZLWK6+$DQGWKH)RUHVW6HUYLFH,Q DOOFDVHVWKHXOWLPDWHHQIRUFHPHQWPHFKDQLVPIRULPSOHPHQWDWLRQRIWKHVSHFLILHG3')ZRXOGEHWKH 'HFLVLRQ1RWLFHDQGZRXOGH[WHQGIURPWKH)RUHVW6XSHUYLVRUWRWKH'LVWULFW5DQJHUWRWKH)RUHVW 6HUYLFH683$GPLQLVWUDWRU

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 60 of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¶V%XLOW(QYLURQPHQW,PDJH *XLGH %(,* WILDLIFE $OOFRQVWUXFWLRQDFWLYLWLHVZLOOEHFRQILQHGWRGD\OLJKWKRXUVH[FOXGLQJHPHUJHQFLHV 6+$¶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¶VFORVXUH WRSUHYHQWKLNLQJDQGELNHDFFHVVWRWKHKXWRXWVLGHWKHZLQWHURSHUDWLQJ VHDVRQ/LPLWLQJKXWXVHWRWKHZLQWHUVHDVRQRQO\ LHQRVXPPHUXVH DQGSUHYHQWLQJVXPPHUKXPDQDFFHVVDORQJWKRVHFRUULGRUVWRWKHKXWLVLPSRUWDQWWR PLQLPL]HSRWHQWLDOLPSDFWVWRO\Q[KDELWDWXVH LQFOXGLQJEXWQRWOLPLWHGWRPRYHPHQWVGHQQLQJDQGGLXUQDOVHFXULW\XVH ZLWKLQWKLVSRUWLRQRIWKH6RXWKHUQ 6XPPLW&RXQW\O\Q[FRQVHUYDWLRQFRUULGRU$PRQLWRULQJSODQZLWKEHGHYHORSHGWRLGHQWLI\XQDXWKRUL]HGVXPPHUXVHRIWKHDUHDWKDWLVVXEMHFWWRWKH 6XSHUYLVRU¶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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 61 of 200 &KDSWHU'HVFULSWLRQRI$OWHUQDWLYHV 7DEOH 0DQDJHPHQW5HTXLUHPHQWVDQG3URMHFW'HVLJQ)HDWXUHV 7KH*UHDW)OXPH7UDLOLVVKRZQDVD³VQRZFRPSDFWHGURXWH´RQWKH:51)%DVHOLQH6QRZ&RPSDFWLRQ0DS*URXQGYHULILFDWLRQDQGGRFXPHQWDWLRQ VKRZVWKDWWKLVURXWHZKLFKLVDSSUR[LPDWHO\PLOHVORQJGRHVQRWUHFHLYHUHJXODUXVHGXULQJZLQWHUPRQWKVWKDWFDXVHVVQRZFRPSDFWLRQ7KHUHIRUHWKLV URXWHZLOOEHUHPRYHGIURPWKH%DVHOLQH6QRZ&RPSDFWLRQ0DS VEGETATION $VQHHGHGUHYHJHWDWLRQZRXOGEHFRPSOHWHGDURXQGWKHSURSRVHGKXWVLWHDQGSDUNLQJDUHDXVLQJQDWLYHVSHFLHVZKHUHIHDVLEOHSUHIHUDEO\FROOHFWHGIURPORFDO JHQHWLFVWRFNRUVHHGDYDLODEOHIURPORFDO)RUHVWV¶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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 62 of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³SLQFKSRLQWV´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x 3DUNLQJORWPDLQWHQDQFH x 6QRZUHPRYDO x 0RQLWRULQJDQG(QIRUFHPHQW x 6LJQDJH x 2YHUQLJKWSDUNLQJDXWKRUL]DWLRQDQGOLPLWV x 6XPPHUSDUNLQJPDQDJHPHQW x 'HVLJQDSSHDUDQFHRISDUNLQJORW x $FFHVVWRDGMDFHQWDXWKRUL]HGXVHV 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 63 of 200 &KDSWHU $IIHFWHG(QYLURQPHQWDQG (QYLURQPHQWDO&RQVHTXHQFHV

64 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV

$))(&7('(19,5210(17$1' (19,5210(17$/&216(48(1&(6

,1752'8&7,21

&KDSWHUGHVFULEHVWKHH[LVWLQJSK\VLFDOELRORJLFDOVRFLDODQGHFRQRPLFFRPSRQHQWVRIWKHSURMHFWDUHD ZKLFKKDYHSRWHQWLDOWREHDIIHFWHGE\LPSOHPHQWLQJDQ\RIWKHDOWHUQDWLYHV LHWKH$IIHFWHG (QYLURQPHQW (DFK$IIHFWHG(QYLURQPHQWGHVFULSWLRQLVIROORZHGE\DQ(QYLURQPHQWDO&RQVHTXHQFHV GLVFXVVLRQWKDWSURYLGHVDQDQDO\VLVRIWKHSRWHQWLDOHIIHFWVRILPSOHPHQWDWLRQRIHDFKRIWKHDOWHUQDWLYHV

&KDSWHULVRUJDQL]HGE\UHVRXUFHDUHDDQGIROORZVWKHRUJDQL]DWLRQRILVVXHVDQGUHVRXUFHVUHTXLULQJ IXUWKHUDQDO\VLV DQGLQGLFDWRUV DVSUHVHQWHGLQ&KDSWHU(DFKUHVRXUFHVHFWLRQLQ&KDSWHULV RUJDQL]HGLQWKHIROORZLQJRUGHU

6&23(2)$1$/<6,6

7KHVFRSHRIDQDO\VLVEULHIO\GHVFULEHVWKHJHRJUDSKLFDUHD V SRWHQWLDOO\DIIHFWHGE\WKHDOWHUQDWLYHVIRU HDFKLVVXH7KHVFRSHRIDQDO\VLVYDULHVDFFRUGLQJWRUHVRXUFHDUHDDQGPD\EHGLIIHUHQWIRUGLUHFW LQGLUHFWDQGFXPXODWLYHHIIHFWV

$))(&7('(19,5210(17

7KH$IIHFWHG(QYLURQPHQWVHFWLRQSURYLGHVDGHVFULSWLRQRIWKHHQYLURQPHQWSRWHQWLDOO\DIIHFWHGDV EDVHGXSRQFXUUHQWXVHVDQGPDQDJHPHQWDFWLYLWLHVGHFLVLRQV

',5(&7$1',1',5(&7(19,5210(17$/&216(48(1&(6

7KLVVHFWLRQSURYLGHVDQDQDO\VLVRIGLUHFWDQGLQGLUHFWHQYLURQPHQWDOHIIHFWVRILPSOHPHQWLQJHDFKRIWKH DOWHUQDWLYHVDFFRUGLQJWRWKHLVVXHVRUUHVRXUFHVUHTXLULQJDGGLWLRQDODQDO\VLVDQGLQGLFDWRUVLGHQWLILHGLQ &KDSWHU&XPXODWLYHHIIHFWVDUHGLVFXVVHGVHSDUDWHO\

'LUHFWHIIHFWVDUHFDXVHGE\WKHDFWLRQDQGRFFXUDWWKHVDPHWLPHDQGSODFH,QGLUHFWHIIHFWVDUHFDXVHGE\ WKHDFWLRQDQGRFFXUODWHULQWLPHRUDUHIDUWKHUUHPRYHGLQGLVWDQFHEXWDUHVWLOOUHDVRQDEO\IRUHVHHDEOH LHOLNHO\WRRFFXUZLWKLQWKHGXUDWLRQRIWKHSURMHFW

&808/$7,9(())(&76

&XPXODWLYHHIIHFWVDUHWKHUHVXOWRIWKHLQFUHPHQWDOGLUHFWDQGLQGLUHFWHIIHFWVRIDQ\DFWLRQZKHQDGGHGWR RWKHUSDVWSUHVHQWDQGUHDVRQDEO\IRUHVHHDEOHIXWXUHDFWLRQVDQGFDQUHVXOWIURPLQGLYLGXDOO\PLQRUEXW FROOHFWLYHO\PDMRUDFWLRQVWDNLQJSODFHRYHUDSHULRGRIWLPH

3DVWSUHVHQWDQGUHDVRQDEO\IRUHVHHDEOHIXWXUHSURMHFWVDUHLGHQWLILHGLQ$SSHQGL[$

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 65 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV $5HFUHDWLRQ

$ 5(&5($7,21

6&23(2)$1$/<6,6

6XPPLW&RXQW\DQGWKH:51)DUHSRSXODUUHFUHDWLRQGHVWLQDWLRQV$P\ULDGRIDFWLYLWLHVGUDZSHRSOH WKHUH\HDUURXQGIURPELNLQJDQGKLNLQJWRILVKLQJERDWLQJPRXQWDLQHHULQJFDPSLQJVNLLQJDQG VQRZVKRHLQJ

:KLOH\HDUURXQGUHFUHDWLRQDODFWLYLWLHVDUHDEXQGDQWDFURVVWKH:51)DQG6XPPLW&RXQW\WKLVDQDO\VLV IRFXVHVRQZLQWHUWLPHDFWLYLWLHVZLWKLQWKH:HEHU*XOFKEDFNFRXQWU\DUHDZKLFKW\SLFDOO\RFFXUIURP 1RYHPEHUWKURXJK$SULOGHSHQGLQJRQVQRZFRQGLWLRQV)RUWKHSXUSRVHVRIWKLVDQDO\VLVWKH:HEHU *XOFKEDFNFRXQWU\DUHDRU³3URMHFW$UHD´LVGHILQHGDVWKHQRUWKHDVWHUO\DVSHFWRI%DOG0RXQWDLQ7KH DUHDLVFRPSULVHGRIQRWRQO\1)6ODQGEXWDOVR6XPPLW&RXQW\2SHQ6SDFH6XPPLW&RXQW\7RZQRI %UHFNHQULGJH2SHQ6SDFHDQGSULYDWHODQGV7UHHOLQHRFFXUVDWDSSUR[LPDWHO\IHHWLQHOHYDWLRQ DERYHZKLFKLVSRSXODUIRURSHQERZOVNLLQJ*HQHUDOO\WKH,OOLQRLV*XOFKWUDLODQGWKH8SSHU7UDLORI 7HDUVIRUPWKHZHVWHUQSHULPHWHURIWKH:HEHU*XOFKDUHD0W%DOG\5RDGSURYLGHVWKHVRXWKHUQ SHULPHWHUDQGWKHQRUWKHUQDQGHDVWHUQERXQGDULHVDUHGHILQHGE\YHU\VWHHSJODGHGWHUUDLQDQGWKH%DOG 0RXQWDLQULGJHOLQH

3KRWR$ 9LHZ:HVWRIWKH7HQ0LOH5DQJH±$ERYHWKH3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW6LWH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-2 66 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV $5HFUHDWLRQ

$VVWDWHGLQ&KDSWHUWKH3URMHFW$UHDLQFOXGHVODQGVRZQHGE\6XPPLW&RXQW\DQG%UHFNHQULGJH2SHQ 6SDFHDVZHOODVWKRVHDGPLQLVWHUHGE\WKH'LOORQ5DQJHU'LVWULFWRIWKH:51)7KH)RUHVW3ODQ LGHQWLILHVWKH1)6ODQGVLQWKH3URMHFW$UHDDVZLWKLQ0DQDJHPHQW$UHD%DFNFRXQWU\5HFUHDWLRQ± 1RQ0RWRUL]HG7KH'HVLUHG&RQGLWLRQIRUWKLVPDQDJHPHQWDUHDVWDWHV³$YDULHW\RIQRQPRWRUL]HG UHFUHDWLRQRSSRUWXQLWLHVDUHSURYLGHGLQDQDWXUDORUQDWXUDODSSHDULQJVHWWLQJ«LPSURYHPHQWVVXFKDV WUDLOKHDGVWUDLOVVLJQVEULGJHVIHQFHVKXWVRUVKHOWHUVWKDWHQKDQFHWKHUHFUHDWLRQDOH[SHULHQFHPD\EH SUHVHQW´3HUWKH)RUHVW3ODQPRWRUL]HGWUDYHOLVSURKLELWHGLQWKH3URMHFW$UHDH[FHSWZKHQ DXWKRUL]HGE\VSHFLDOXVHSHUPLWIRUDGPLQLVWUDWLRQRISHUPLWWHGIDFLOLWLHVIRU)RUHVW6HUYLFH DGPLQLVWUDWLRQRUIRUHPHUJHQF\SXUSRVHV

,QDGGLWLRQWRWKH)RUHVW3ODQWKH:51)7UDYHO0DQDJHPHQW3ODQ 703 SUHVFULEHVWKH DOORZDEOHXVHDQGPDQDJHPHQWJXLGHOLQHVIRU1)6GHVLJQDWHGWUDLOVZLWKLQWKH3URMHFW$UHD

$))(&7('(19,5210(17 2YHUYLHZ

5HIHUWR)LJXUHIRUWKHUHFUHDWLRQDOFRQWH[WRIWKHSURMHFWDUHDRQDQGDURXQG%DOG0RXQWDLQ

'LVSHUVHG5HFUHDWLRQ 2Q1)6ODQGV³GHYHORSHG´UHFUHDWLRQWDNHVGLIIHUHQWIRUPVGRZQKLOOVNLLQJULGLQJDWUHVRUWVWKDWRSHUDWH ZLWKLQGHILQHGVSHFLDOXVHSHUPLWDUHDVDQGFDPSLQJDWGHVLJQDWHGFDPSJURXQGVDUHWZRVXFKH[DPSOHV 'LVSHUVHGIRUPVRIUHFUHDWLRQ²ERWKZLQWHUDQGVXPPHULQFOXGLQJGHVLJQDWHGZLOGHUQHVVDUHDV²RFFXU DFURVV1)6ODQGVERWKRQDQGRIIGHVLJQDWHGWUDLOVDQGURDGZD\V

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

%DFNFRXQWU\8VHV )RUWKRVHZKRDUHNQRZOHGJHDEOHH[SHULHQFHGDQGSUHSDUHGWKHUHDUHQXPHURXVEDFNFRXQWU\DUHDVWKDW SURYLGHYDU\LQJOHYHOVRIRSSRUWXQLW\IRURSHQERZODQGWUHHVNLLQJULGLQJWKURXJKRXW6XPPLW&RXQW\ %DOG0RXQWDLQDQGWKH3URMHFW$UHDDUHQRH[FHSWLRQ%DFNFRXQWU\DFWLYLWLHVDUHW\SLFDOO\KXPDQ SRZHUHG ZLWKWKHH[FHSWLRQRIVQRZPRELOHVZKHUHDXWKRUL]HG 7KHSRWHQWLDOIRUVROLWXGHDEXQGDQFHRI 86'$)RUHVW6HUYLFH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-3 67 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV $5HFUHDWLRQ

WHUUDLQDQGQHFHVVDU\VHOIUHOLDQFHRIIHUDQH[SHULHQFHWKDWFDQQRWEHIRXQGDWDGHYHORSHGVNLDUHD KRZHYHUWKHH[SHULHQFHLVDOVRRQHWKDWLVDFFRPSDQLHGE\LQKHUHQWGLIILFXOW\DQGULVNV%DFNFRXQWU\ XVHUVVKRXOGEHNQRZOHGJHDEOHRIWKHLQKHUHQWGDQJHUVDVVRFLDWHGZLWKEDFNFRXQWU\WUDYHOLQFOXGLQJ DYDODQFKHVDIHW\DQGRXWGRRUSURWRFROVDQGPXVWEHILWHQRXJKWRSDUWLFLSDWHLQVWUHQXRXVDFWLYLWLHV

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

%DFNFRXQWU\+XW6\VWHP ,Q&RORUDGREDFNFRXQWU\KXWVSOD\DQLPSRUWDQWUROHLQWKHUHDOPRI\HDUURXQGGLVSHUVHGDQG EDFNFRXQWU\UHFUHDWLRQRIIHULQJGHVWLQDWLRQVIRURYHUQLJKWDQGPXOWLGD\H[FXUVLRQV&RORUDGRKDVRQHRI WKHPRVWZHOOHVWDEOLVKHGDQGKHDYLO\XVHGQRQPRWRUL]HGEDFNFRXQWU\KXWQHWZRUNVLQWKH8QLWHG6WDWHV ,QWRWDOWKHUHDUHRYHUEDFNFRXQWU\KXWVLQ&RORUDGR2IWKRVHWKHWK0RXQWDLQ'LYLVLRQ+XW $VVRFLDWLRQ 70+$ DFWVDVWKHUHVHUYDWLRQDJHQWIRUKXWV²LQFOXGLQJWKHWK0RXQWDLQ'LYLVLRQ +XWVZLWKQLQHWHHQKXWVPRVWO\LQ(DJOH&RXQW\WKH6+$ZLWKWKUHHKXWVLQ6XPPLW&RXQW\WKH%UDXQ DQG)ULHQGV+XWVZLWKVHYHQKXWVPRVWO\LQ3LWNLQ&RXQW\DQGWKH*UDQG+XWVZLWKRQHKXWLQ*UDQG &RXQW\7KHUHDUHDSSUR[LPDWHO\PLOHVRIVXJJHVWHGURXWHVWKDWFRQQHFWWKHVHKXWV

7KH70+$PDQDJHVRSHUDWLRQVDQGDGPLQLVWUDWLRQRQO\IRUWKHKXWVLWRZQV7KHRWKHUKXWVDUHRZQHG DQGPDQDJHGE\HQWLWLHVOLVWHGDERYH7KHWKUHHKXWVRSHUDWHGE\6+$LQ6XPPLWDQG3DUN&RXQWLHVDUH )UDQFLH¶V&DELQ-DQHW¶V&DELQDQG6HFWLRQ+RXVH .HQ¶V&DELQLVDVVRFLDWHGZLWK6HFWLRQ+RXVHDQG ERWKDUHLQ3DUN&RXQW\

+XWVKDYHEHHQHVSHFLDOO\SRSXODUZLWKWKHSXEOLFVLQFHWKH70+$DQG6+$ZHUHIRXQGHGLQWKHPLG V6LQFHKXWVZKRVHUHVHUYDWLRQVDUHUHFRUGHGE\70+$KDYHRSHUDWHGQHDUFDSDFLW\GXULQJ WKHKLJKVHDVRQ GHILQHGDVEHWZHHQODWH'HFHPEHUWKURXJKODWH0DUFK $VDJHQHUDOREVHUYDWLRQIURP KXWRSHUDWRUVDVQHZKXWVDUHEXLOWWKH\PHHWH[LVWLQJGHPDQG7KLVLVLQGLFDWHGE\WKHIDFWWKDWWKH\ILOO XSZLWKRXWLPSDFWLQJ LHGHFUHDVLQJ WKHUHVHUYDWLRQVRIRWKHUKXWV6XFKKDVEHHQWKHFDVHGXULQJWKH VHDVRQZLWKWKHUHFHQWO\EXLOW%URRPH+XWLQ*UDQG&RXQW\DQGWKH2SXV+XWQHDU7HOOXULGH

:HOFK =REEH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-4 68 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV $5HFUHDWLRQ

6+$FRPSOHWHGD0'3LQZKLFKLGHQWLILHGILYHSRWHQWLDOKXWVLWHVRQWKH:51)DQGWKUHH VHFRQGDU\VLWHVWKDWFRXOGEHORFDWHGRQSULYDWHSURSHUW\$WWKDWWLPHWKHUHZHUHQR6+$KXWVLQ H[LVWHQFH,QWKH:51)FRPSOHWHGDQ($WKDWDQDO\]HGFRQVWUXFWLRQRI-DQHW¶V&DELQ8SRQ DSSURYDO-DQHW¶VRSHQHGIRUSXEOLFXVHLQ-DQXDU\RI7KH($IRU)UDQFLH¶V&DELQ²WKHVHFRQGKXW RIWKH6+$V\VWHP²ZDVFRPSOHWHGLQ1RYHPEHUDQGWKHKXWRSHQHGWRWKHSXEOLFLQ-DQXDU\RI 6HFWLRQ+RXVHDQG.HQ¶V&DELQDUHUHVWRUDWLRQVRIKLVWRULFDOEXLOGLQJVDQGDUHRZQHGE\WKH :51)DQGPDQDJHGE\6+$7KHIROORZLQJPDSLOOXVWUDWHVWKHORFDWLRQVRI6+$¶VH[LVWLQJKXWVLQ UHODWLRQWR%UHFNHQULGJH -DQHW¶V&DELQLVQRWRQWKHPDS

([LVWLQJ6+$+XW/RFDWLRQ0DS

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-5 69 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV $5HFUHDWLRQ

([LVWLQJ5HFUHDWLRQLQWKH3URMHFW$UHD

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±3DUNLQJ DQG7UDIILF )UHQFK*XOFK5RDGFRQWLQXHVIRURIDPLOHWRWKH0RXQWDLQ0HDGRZVJDWH7KHUHDUH VHYHUDOWUDLOKHDGVDFFHVVLEOHIURP)UHQFK*XOFK5RDGZKLFKLVPDLQWDLQHGE\6XPPLW&RXQW\LQWKH ZLQWHUWRWKH6DOOLH%DUEHU5RDG7UDLOKHDG

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of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV $5HFUHDWLRQ

EHFRPHVDUHFUHDWLRQWUDLO$IWHUDPLOHFOLPEWRWKH,RZD0LOOUHFUHDWLRQLVWVFDQDFFHVVDQXPEHURI URXWHVOHDGLQJLQWRWKH:HEHU*XOFKEDFNFRXQWU\DUHD

([LVWLQJ7UDLO1HWZRUN 7KHIROORZLQJWUDLOVDUHGHVFULEHGLQGHWDLODVWKH\DUHNH\WRDFFHVVLQJWKHSURSRVHGKXWORFDWLRQLQ :HEHU*XOFK7KHUHDGHULVUHIHUUHGWR)LJXUHVDQGIRUWKHORFDWLRQVRIWKHIROORZLQJWUDLOV

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

0DQ\GLIIHUHQWW\SHVRIHTXLSPHQWDUHXVHGIRUEDFNFRXQWU\WUDYHODQGGLIIHUHQWXVHUVWHQGWRSUHIHU VOLJKWO\GLIIHUHQWFRQGLWLRQVEDFNFRXQWU\VNLHUVXVHVNLQVWRDVFHQG6DOOLH%DUEHU5RDGHQURXWHWRWKHLU VNLLQJGHVWLQDWLRQ1RUGLFVNLHUVWHQGWRSUHIHUOLJKWVQRZRUWUDFNVRYHUXQWUDFNHGSRZGHUDQG VQRZVKRHUVSUHIHUDYDULHW\RIFRQGLWLRQV5HJDUGOHVVRIWKHLUPRGHRIWUDYHOSHRSOHZKRXVH6DOOLH %DUEHU5RDGVKRXOGH[SHFWWRHQFRXQWHURWKHUVWKURXJKRXWWKHLUH[SHULHQFHDVZHOODVDYDULHW\RIVQRZ FRQGLWLRQV²IURPQHZVQRZWRSDFNHGRXWFRQGLWLRQV

'XULQJWKHVXPPHUWLPH6DOOLH%DUEHU5RDGLVDOVRXVHGIRUKLNLQJKRUVHEDFNULGLQJDQGPRXQWDLQ ELNLQJ6DOOLH%DUEHU5RDGFRQWLQXHVSDVWWKHPLQHIRUDQRWKHUPLOHVEHIRUHLQWHUVHFWLQJZLWK0W %DOG\5RDGDVGHVFULEHGHDUOLHUXQGHU³7UDLOKHDG$FFHVV´

%DVHGRQDQLQIUDUHGFRXQWHUORFDWHGRQWKHURDGDWWKHWUDLOKHDGLQWKHVHDVRQGDLO\XVDJHRI6DOOLH %DUEHU5RDGSHDNHGLQ-XO\DQG1RYHPEHU$YHUDJHPRQWKO\ZHHNHQGDQGZHHNGD\XVHRI6DOOLH %DUEHU5RDGEHWZHHQ-DQXDU\DQG1RYHPEHULVLQFOXGHGLQ&KDUW$

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-7 71 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV $5HFUHDWLRQ

&KDUW$ $YHUDJH8VHRI6DOOLH%DUEHU5RDG±-DQXDU\WR1RYHPEHU 180 160 140 120 100 Monthly Avg 80 Weekend Avg 60 Weekday Avg 40 20 0

6RXUFH7RZQRI%UHFNHQULGJH2SHQ6SDFHDQG7UDLOV'HSDUWPHQW

6ROLWXGHLVDSSUHFLDWHGE\DOPRVWDQ\EDFNFRXQWU\UHFUHDWLRQLVWDQGLWPHDQVGLIIHUHQWWKLQJVWRGLIIHUHQW SHRSOH²UDQJLQJIURPQRHQFRXQWHUVZLWKRWKHUSHRSOHRQOHVVWUDYHOOHGURXWHVWRLQIUHTXHQWDQGIUHTXHQW HQFRXQWHUVRQPRUHKHDYLO\WUDYHOOHGURXWHV7KLVGHSHQGVRQWKHLQGLYLGXDOWKHORFDWLRQDQGWKHFRQWH[W RIWKHLUH[SHULHQFH2SSRUWXQLWLHVIRUYDU\LQJGHJUHHVRIVROLWXGHDUHDEXQGDQWRQSXEOLFODQGVWKURXJKRXW 6XPPLW&RXQW\LQFOXGLQJZLWKLQWKH3URMHFW$UHD+RZHYHUGXHWRWKH3URMHFW$UHD¶VSUR[LPLW\WRWKH 7RZQRI%UHFNHQULGJHDQGLWVSRSXODULW\IRUORFDOVDQGYLVLWRUVDOLNHLWLVH[SHFWHGWKDWRQHZLOO HQFRXQWHURWKHUSHRSOHRQ6DOOLH%DUEHU5RDGDQGWRDOHVVHUH[WHQWRQWKHQHWZRUNWUDLOVWKDWDUH DFFHVVLEOHIURP6DOOLH%DUEHU5RDG

7ZRSRSXODUQRQPRWRUL]HGWUDLOV²1LJKWPDUHRQ%DOG\DQG7UDLORI7HDUV²EUDQFKRIIRI6DOOLH%DUEHU 5RDGQHDUWKH6DOOLH%DUEHU0LQH7KHVHWUDLOVSURYLGHOLQNVWRDQHWZRUNRIWUDLOVDFURVVWKH:HEHU*XOFK EDFNFRXQWU\DUHDDQGDFURVV%DOG0RXQWDLQ6DOOLH%DUEHU5RDGSURYLGHVDFULWLFDOFRQQHFWLRQWRWKHVH DQGPDQ\RWKHUWUDLOV%RWKRIWKHVHWUDLOVUHFHLYHFRQVLGHUDEO\OHVVXVHWKDQ6DOOLH%DUEHU5RDG

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-8 72 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV $5HFUHDWLRQ

7KHWUDLOKDVVLQFHEHFRPHSRSXODUZLWKGLVSHUVHGEDFNFRXQWU\VNLHUVDFFHVVLQJWHUUDLQDQGWUDLOVRQ%DOG 0RXQWDLQ+RZHYHUDVPRVWSHRSOHVWD\RQ6DOOLH%DUEHU5RDGXVHRI1LJKWPDUHRQ%DOG\GHFOLQHV VKDUSO\DVFRPSDUHGWR6DOOLH%DUEHU5RDG

2WKHU7UDLOV )URP1LJKWPDUHRQ%DOG\DQG6DOOLH%DUEHU5RDGRWKHUWUDLOVDQGWUDLOVHJPHQWVFDQEHOLQNHG WKURXJKRXWWKHVXPPHUDQGZLQWHUWRRIIHUDGGLWLRQDORSSRUWXQLWLHV7KHVHWUDLOVDUHLGHQWLILHGRQ)LJXUHV DQG7KH\LQFOXGH

x 7UDLORI7HDUVDVKRUWVHFWLRQRIVLQJOHWUDFNEHWZHHQWKH:HEHU*XOFK7UDLODQGWKH6DOOLH %DUEHU0LQH7KLVWUDLOUHFHLYHVFRQVLGHUDEOHZLQWHUXVHDQGVRPHVXPPHUXVH$QRWKHUVHJPHQW ³8SSHU7UDLORI7HDUV´H[WHQGVIURP0W%DOG\5RDG MXVWDERYH,RZD0LOO IRUDSSUR[LPDWHO\ PLOHWRWKHQRUWK

x :HEHU*XOFK7UDLOLQWHUVHFWVZLWK6DOOLH%DUEHU5RDGDQGFRQQHFWV7UDLORI7HDUVZLWK7UXH 5RPDQFH7KLVVHJPHQWRIWUDLOLVKLJKO\HURGHGDQGVWHHSDQGQHDUO\LPSDVVDEOH,WLVSODQQHGWR EHUHDOLJQHGLQWRPDNHLWPRUHDFFHVVLEOHIRUUHFUHDWLRQLVWV

x 7UXH5RPDQFHDSRSXODUVLQJOHWUDFNURXWHIRUPRXQWDLQELNHUVKLNHUVDQGVNLHUVFRQQHFWLQJ 0W%DOG\5RDGZLWKERWKWKH:HEHU*XOFK7UDLODQG1LJKWPDUHRQ%DOG\

,QDGGLWLRQWRWKHWUDLOVGHVFULEHGLQGHWDLODERYHWKHUHDUHKXQGUHGVRIPLOHVRIRWKHUWUDLOVLQWKH3URMHFW $UHDWKDWUHFHLYHKLJKXVHWKURXJKRXWWKH\HDU7KHVHLQFOXGH EXWDUHQRWOLPLWHGWR /LWWOH)UHQFK 0LQQLH0LQH*ROG5XQ% %7XUN¶V;8DQG+XPEXJ+LOO0DQ\RIWKHVHWUDLOVDUHLGHQWLILHGRQ )LJXUHVDQG

%DFNFRXQWU\6NLLQJLQWKH3URMHFW$UHD

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¶VIUHHSXEOLFWUDQVSRUWDWLRQV\VWHPKDVDEXVVWRSDWWKHHQGRI0W %DOG\5RDGDWWKHWUDLOKHDG

,ELG

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-9 73 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV $5HFUHDWLRQ

&XUUHQWXVHRIWKH:HEHU*XOFKEDFNFRXQWU\DUHDGHSHQGVODUJHO\RQVQRZFRQGLWLRQV6NLDEOHDUHDVDUH LGHQWLILHGRQILJXUHVDQGZKLFKFRPSOHPHQWWKHIROORZLQJGHVFULSWLRQRIEDFNFRXQWU\WHUUDLQLQWKH 3URMHFW$UHD

,Q:HEHU*XOFKVSHFLILFDOO\WKHEHVWVNLDEOHWHUUDLQLVLQWKHQRUWKDVSHFWWUHHVDERYHWKHSURSRVHGKXW ORFDWLRQ,QWKHJUHDWHUDUHDWKHEHVWVNLDEOHWHUUDLQRFFXUVLQWKHQRUWKHUQDVSHFWWUHHVRQWKHQRUWKVLGHRI %DOG0RXQWDLQLQ%DOG\%RZODVZHOODVDQDUHDNQRZQDV/HQWLO%RZO6+$¶VREVHUYDWLRQVDUHWKDW %DOG\%RZORQDZHHNHQGZLWKJRRGVQRZFDQVHHIRXUWRILYHSDUWLHVSHUGD\ZLWKDQDYHUDJHRIWKUHH SHRSOHSHUSDUW\/HQWLO%RZOKDVOHVVIUHTXHQWXVDJHDERXWKDOIWKDWRI%DOG\%RZOLWVVRXWKZHVWDVSHFW PDNHVLWPRUHSURQHWRVXQFUXVWVDQGZLQGVODEDQGWKXVPRUHGHSHQGHQWRQVQRZFRQGLWLRQV $YDODQFKHWHUUDLQGRPLQDWHVVORSHVWRWKHVRXWKHDVWRIWKHSURSRVHGKXWVLWHEXWFDQEHHDVLO\UHFRJQL]HG DQGDYRLGHGE\DQ\RQHZLWKEDVLFEDFNFRXQWU\DZDUHQHVV

',5(&7$1',1',5(&7(19,5210(17$/&216(48(1&(6 $OWHUQDWLYH±1R$FWLRQ

1RFKDQJHVWRWKHWUDLOQHWZRUNRURWKHUUHFUHDWLRQDOUHVRXUFHVZRXOGRFFXUXQGHU$OWHUQDWLYH6DOOLH %DUEHU5RDGDQG)UHQFK*XOFK5RDGZRXOGUHPDLQSRSXODUGD\XVH1RUGLFVNLLQJDQGVQRZVKRHLQJWUDLOV GXULQJWKHZLQWHU%DOG0RXQWDLQDQG:HEHU*XOFKZRXOGFRQWLQXHWREHXVHGIRUEDFNFRXQWU\VNLLQJ 3ULPDU\DFFHVVWRVNLLQJRQ%DOG0RXQWDLQDQG:HEHU*XOFKZRXOGEHIURPWKH0W%DOG\5RDG 7UDLOKHDGFRQWLQXLQJRQWKHURDGSDVW,RZD0LOOLQWRWKH3URMHFW$UHD$VPDOOQXPEHURIEDFNFRXQWU\ VNLHUVZRXOGFRQWLQXHWRDFFHVVWKH3URMHFW$UHDYLDWKH6DOOLH%DUEHU5RDG7UDLOKHDG

8QGHU$OWHUQDWLYH6+$ZRXOGFRQWLQXHWRRSHUDWHWKUHHEDFNFRXQWU\KXWVLQ6XPPLW&RXQW\)UDQFLH¶V &DELQ-DQHW¶V&DELQDQG6HFWLRQ+RXVH6+$KDVRSHUDWHGQHDUFDSDFLW\VLQFHDQGFRPELQHGZLWK WKHLQFUHDVLQJSRSXODULW\RIEDFNFRXQWU\VNLLQJ SUHYLRXVO\GLVFXVVHG VHOHFWLRQRIWKH1R$FWLRQ $OWHUQDWLYHZRXOGOHDGWRH[LVWLQJGHPDQGIRUEDFNFRXQWU\KXWVFRQWLQXLQJWRJRXQPHW

$OWHUQDWLYH±3URSRVHG$FWLRQ :LQWHU5HFUHDWLRQLQWKH3URMHFW$UHD 'LVSHUVHG5HFUHDWLRQDQG%DFNFRXQWU\8VH 7KHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWLVOLNHO\WREHXVHGIUHTXHQWO\E\IDPLOLHVDQGJURXSVZLWK QRQVNLHUVGXHWRLWVUHODWLYHO\HDV\DSSURDFKDQGSUR[LPLW\WR%UHFNHQULGJH+XWXVHUVZRXOGEH H[SHFWHGWREHFRPSULVHGRIWKRVHVHHNLQJWKHEDFNFRXQWU\H[SHULHQFH²$7DQGWHOHPDUNVNLHUVDQG VQRZERDUGHUVDVZHOODVVQRZVKRHUVDQG1RUGLFFURVVFRXQWU\VNLHUV$OWKRXJKEDFNFRXQWU\WHUUDLQLQ WKH3URMHFW$UHDLVFRQVLGHUHGJRRG:HEHU*XOFKLVQRWNQRZQDVDQH[FHSWLRQDOEDFNFRXQWU\VNLLQJDUHD DQGWKXVPLJKWDSSHDOOHVVWRWKHH[SHULHQFHGVNLHUVFRPSDUHGWRRWKHUEDFNFRXQWU\KXWVLQWKH70+$ V\VWHP

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-10 74 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV $5HFUHDWLRQ

%DVHGRQGDWDIURP6+$LWLVUHDVRQDEOHWRDVVXPHWKDWURXJKO\KDOIRIWKHWRWDOJXHVWVVWD\LQJDWWKHKXW WKURXJKRXWWKHVHDVRQZRXOGUHPDLQZLWKLQ\DUGVRIWKHKXWZKLOHWKHRWKHUKDOIZRXOGEHH[SHFWHG WRYHQWXUHRXWIDUWKHULQVHDUFKRIEDFNFRXQWU\WHUUDLQ%DVHGRQWKHKXW¶VFDSDFLW\DYHUDJHRFFXSDQF\ UDWHDQGDGD\RSHUDWLQJVHDVRQWKHEHVWDSSUR[LPDWLRQIRUDQQXDOXVHRIWKHKXWLVDSSUR[LPDWHO\ ³DQQXDOXVHUGD\V´5RXJKO\KDOIRIWKHVHXVHUV ZRXOGEHH[SHFWHGWRSDUWLFLSDWHLQ EDFNFRXQWU\VNLLQJ,IWKDWLVGLYLGHGRYHUWKHFRXUVHRIWKHVHDVRQ GD\VEHWZHHQODWH1RYHPEHUDQG WKHHQGRI$SULO WKDWHTXDOVDQHVWLPDWHGDGGLWLRQDOVNLHUVSHUGD\7KLVLVEDVHGRQWKHIROORZLQJ DVVXPSWLRQVDQGFDOFXODWLRQV

x GD\V [ SHRSOHSHUGD\ [ RFFXSDQF\ DSSUR[LPDWHO\WRWDODQQXDOYLVLWRUGD\V

x VNLHUVSHUGD\

8VHDWWKHKXWDQGWKHDVVRFLDWHGEDFNFRXQWU\DUHDVZRXOGOLNHO\EHPRUHLQWHQVHRQZHHNHQGVDQGRYHU KROLGD\SHULRGV'XULQJDQH[FHSWLRQDOVQRZ\HDUWKHSHUFHQWDJHRIKXWXVHUVZKRZRXOGXVHWKH:HEHU *XOFKEDFNFRXQWU\DUHDZRXOGEHH[SHFWHGWREHKLJKHU/LNHZLVHGU\\HDUVZRXOGOLNHO\VHHOHVV XWLOL]DWLRQ%DFNFRXQWU\XVHE\ORFDOVDQGYLVLWRUVZKRDUHQRWVWD\LQJDWWKH:HEHU*XOFKEDFNFRXQWU\ KXWEXWDUHDZDUHRIWKHQHZWUDLODFFHVVWRWKHDUHDFRXOGDOVREHH[SHFWHG

7KHURXJKO\DGGLWLRQDOEDFNFRXQWU\VNLHUVSHUGD\DFURVVWKHVHDVRQZRXOGEHH[SHFWHGWRKDYHVRPH LPSDFWRQEDFNFRXQWU\XVHDQGWKHEDFNFRXQWU\H[SHULHQFH LHVROLWXGH ZLWKLQWKH:HEHU*XOFK EDFNFRXQWU\DUHDHVSHFLDOO\JLYHQWKDWFXUUHQWGD\XVHLVTXLWHOLPLWHG7KHSURSRVHGKXW¶VSUHVHQFHDQG DVVRFLDWHGDFFHVVWUDLOVZRXOGQRWKLQGHUGD\XVHUV¶DELOLW\WRXVHEDFNFRXQWU\WHUUDLQWKURXJKRXWWKH 3URMHFW$UHD

)RUFRQWH[WLQ)UDQFLH¶V&DELQZDVORFDWHGLQDSRSXODUGD\XVHEDFNFRXQWU\DUHDMXVWVRXWKRI %UHFNHQULGJH7KHUHKDVQRWEHHQDGHWULPHQWDOLPSDFWWREDFNFRXQWU\XVHWKHUHDVLWLVVWLOOIUHTXHQWHG E\GD\XVHVNLHUVZKRDUHQRWGHWHUUHGE\WKHSUHVHQFHRIWKHKXW&RQYHUVHO\KXWXVHUVDUHDSSDUHQWO\QRW GHWHUUHGE\WKHSUHVHQFHRIGD\XVHUV

7UDLOKHDG$FFHVVIRUWKH3URMHFW$UHD 6DOOLH%DUEHU5RDG7UDLOKHDGDQG3DUNLQJ$UHD $QLQFUHDVHLQUHFUHDWLRQLVWV LH6+$JXHVWV XWLOL]LQJWKH6DOOLH%DUEHU5RDG7UDLOKHDGZRXOGRFFXU XQGHU$OWHUQDWLYHDVDGLUHFWUHVXOWRIWKHSURSRVHGKXW,WLVH[SHFWHGWKDWLQJHQHUDOWKHWUDLOKHDG ZRXOGEHPRUHFURZGHGGXULQJSHDNWLPHVJLYHQWKDWWKLVLVWKHSULPDU\DFFHVVSRLQWIURPZKLFKWRUHDFK

,ELG 2QHDQQXDOXVHUGD\HTXDWHVWRRQHSHUVRQXVLQJWKH)RUHVWIRUDQ\OHQJWKRIWLPHLQDVLQJOHGD\

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-11 75 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV $5HFUHDWLRQ

WKHSURSRVHGKXW+RZHYHUJLYHQWKDWDVHSDUDWHGHGLFDWHGSDUNLQJDUHDLVSURSRVHGWRDFFRPPRGDWHKXW XVHUVLPSDFWVWRWKH6DOOLH%DUEHUSDUNLQJDUHDDUHDQWLFLSDWHGWREHQHJOLJLEOH5HIHUWR&KDSWHU 6HFWLRQ%±3DUNLQJDQG7UDIILFIRUPRUHLQIRUPDWLRQRQDIIHFWVWRWUDIILFDQGSDUNLQJ

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

([LVWLQJ7UDLO1HWZRUN ,QJHQHUDOHQFRXQWHUVZLWKRWKHUSHRSOHRQ6DOOLH%DUEHU5RDGDQG1LJKWPDUHRQ%DOG\ZRXOGEH H[SHFWHGWRLQFUHDVHWKURXJKRXWWKHVHDVRQGXHWRDSSURDFKLQJDQGGHVFHQGLQJKXWXVHUV7KLVZRXOGEH OHVVQRWLFHDEOHRQ6DOOLH%DUEHU5RDGGXHWRWKHDOUHDG\KLJKOHYHORIXVHWKDWLWUHFHLYHV%HFDXVHOHVV SHRSOHXVH1LJKWPDUHRQ%DOG\LQFUHDVHGHQFRXQWHUVWKHUHZRXOGEHPRUHQRWLFHDEOH)RUVRPHSHRSOH WKLVLPSDFWRQVROLWXGHZRXOGEHPRUHSURQRXQFHGWKDQIRURWKHUV

+RZHYHUGXULQJWKHHDUO\VHDVRQZKHQ6DOOLH%DUEHU5RDGLVRQHRIWKHEHVWDQGRQO\RSWLRQVIRUFURVV FRXQWU\VNLLQJVQRZVKRHLQJLPSDFWVIURPKXWXVHZRXOGEHPLQLPDORUQRQH[LVWHQWDVWKHKXWZRXOGQRW RSHQXQWLOWKHWKLUGZHHNRI1RYHPEHU+XWUHJLVWUDWLRQJHQHUDOO\GRHVQRWUHDFKIXOOFDSDFLW\XQWLO -DQXDU\$VRWKHUWUDLOVDQGEDFNFRXQWU\DUHDVWKURXJKRXW6XPPLW&RXQW\RSHQXVHRI6DOOLH%DUEHU 5RDGOHVVHQV

6DOOLH%DUEHU5RDG $QLQFUHDVHLQVNLHUVDQGVQRZVKRHUVWUDYHOLQJRQ6DOOLH%DUEHU5RDGGXULQJWKHZLQWHUZRXOGRFFXUDVD GLUHFWUHVXOWRIWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXW%DVHGRQSHUFHQWRFFXSDQF\RIWKHKXW WKLVFRXOGWHFKQLFDOO\EHDVPDQ\DVSHRSOHSHUGD\²LQWKHHYHQWWKDWRQHIXOOSDUW\LVOHDYLQJWKHKXW ZLWKDQRWKHURQHDUULYLQJKRZHYHUWKLVVFHQDULRZRXOGEHKLJKO\XQOLNHO\DVKXWSDUWLHVW\SLFDOO\GRQRW DOODUULYHRUOHDYHDWRQHWLPH1HYHUWKHOHVVRQWKHEXVLHVWRIGD\VWKLVFRXOGUHVXOWLQDQLQFUHPHQWDO LPSDFWWRWKHUHFUHDWLRQH[SHULHQFHRQ6DOOLH%DUEHU5RDGJLYHQWKHGR]HQVRISHRSOHWKDWZRXOGDOVREH VNLLQJRUVQRZVKRHLQJDVGD\XVHUV2QZHHNGD\VLIWKLVVLWXDWLRQZHUHWRRFFXUWKHLPSDFWZRXOGEH PRUHHYLGHQWDQGVOLJKWO\JUHDWHU

,QPRVWFDVHVWKHDUULYLQJDQGGHSDUWLQJSDUWLHVZRXOGQRWRYHUODSHQWLUHO\+XWXVHUVRIWHQWUDYHODV VPDOOHUJURXSVZLWKLQWKHPVHOYHVVNLLQJRUVQRZVKRHLQJWRWKHKXWDWWKHLURZQSDFHDQGFRQYHQLHQFH$

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-12 76 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV $5HFUHDWLRQ

IXOOSDUW\RIPLJKWKDYHVHYHUDOVPDOOJURXSVDUULYLQJDWGLIIHUHQWWLPHVRIWKHGD\DQGOHDYHLQD VLPLODUPDQQHU2QZHHNHQGGD\VKXWJURXSVFRXOGLQWHJUDWHZLWKWKHH[LVWLQJUHFUHDWLRQXVHRQ6DOOLH %DUEHU5RDG7KHH[LVWLQJH[SHULHQFHLVQRWH[SHFWHGWREHGHJUDGHGDVWKHSUHVHQFHRIVPDOOJURXSVRI VNLHUVDQGVQRZVKRHUVWUDYHOLQJDORQJ6DOOLH%DUEHU5RDGGXULQJWKHZLQWHULVQRUPDO

+XWUHODWHGWUDLOXVHZRXOGKDSSHQODUJHO\EHWZHHQDPDQGSP7KLVLVEHFDXVHKXWWXUQRYHU WLPHLVSPVRYLVLWRUVIURPWKHSUHYLRXVQLJKWKDYHWREHRXWRIWKHKXWE\WKDWWLPHDQGDUULYLQJ YLVLWRUVFDQQRWDUULYHHDUOLHUWKDQWKDWWLPH

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

1LJKWPDUHRQ%DOG\ 'XHWRWKHPLQLPDOZLGWKDQGUHODWLYHO\ORZXVHRI1LJKWPDUHRQ%DOG\ FRPSDUHGWR6DOOLH%DUEHU 5RDG WKH3URSRVHG$FWLRQZRXOGGLUHFWO\LPSDFWWKHUHFUHDWLRQH[SHULHQFHDQGFRQGLWLRQVRQWKLVWUDLO 7KHILUVWVHJPHQWRI1LJKWPDUHRQ%DOG\LVPLOHLQOHQJWKDQGKDVVHYHUDOVZLWFKEDFNV UHIHUWRWUDLO VHJPHQW³%´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

3URSRVHG7UDLO6HJPHQW³&´ZRXOGEHLGHQWLFDOWRWKHZLGWKRI1LJKWPDUHRQ%DOG\DQGZRXOGFRQWLQXH IRUPLOHWRWKHHDVW0DQ\UHFUHDWLRQDOWUDLOVDOUHDG\H[LVWZLWKLQWKH3URMHFW$UHD²ERWKV\VWHPWUDLOV

SHUFHQWRFFXSDQF\ZRXOGEHH[SHFWHGWRRFFXURQWKHEXVLHVWRIZHHNHQGVGXULQJWKHZLQWHUKRZHYHUGXULQJ WKHUHPDLQGHURIWKHVHDVRQLWLVPRUHDSSURSULDWHWRDVVXPHSDUWLDORUQHDUO\IXOOFDSDFLW\GXHWRJURXSVERRNLQJRXW WKHHQWLUHKXWEXWQRWILOOLQJDOORIWKHEHGVRUVLPSO\WKHLQDELOLW\WRILOODOOEHGV$VPHQWLRQHGLQ&KDSWHU FRPSOHWHO\ERRNHGKXWVGRQRWQHFHVVDULO\HTXDWHWRSHUFHQWRFFXSDQF\

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-13 77 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV $5HFUHDWLRQ

DQGQRQV\VWHPWUDLOVDQGWUDLOVUHVXOWLQJIURPGLVSHUVHGUHFUHDWLRQDQGWKHPLQLQJHUD3URSRVHG7UDLO 6HJPHQW³&´ZRXOGSURYLGHDQDGGLWLRQDOOLQNLQWKH%DOG0RXQWDLQWUDLOQHWZRUNIRUDOOZLQWHU DQG VXPPHU UHFUHDWLRQLVWV

8SSHU7UDLORI7HDUV 8SSHU7UDLORI7HDUVLVDQLPSRUWDQWFRPSRQHQWRI$OWHUQDWLYHDVLWSURYLGHVDGPLQLVWUDWLYHDFFHVVWR WKHSURSRVHGKXW7UDLOVHJPHQW³'´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

7KHILQDOOHJRIWKHSURSRVHGKXWDFFHVVURXWH²VHJPHQW³(´RQ)LJXUH²ZRXOGEHPLOHLQOHQJWK,W KDVQRFRQQHFWLRQVWRWKHJUHDWHUWUDLOV\VWHPWHUPLQDWHVDWWKHSURSRVHGKXWDQGZRXOGEHVLJQHG DFFRUGLQJO\,WZRXOGQRWLQFUHDVHXWLOL]DWLRQRIQHDUE\QRQFRQQHFWLQJWUDLOVEHFDXVHLWLVLQWHQGHGWR VHUYHDVSHFLILFSXUSRVH1RQHWKHOHVVZLQWHUGD\XVHUVZRXOGKDYHDFFHVVWRLWDVZHOO1RWHWKDW 6HJPHQW³(´ZRXOGEHFORVHGWRVXPPHUXVHWRPLQLPL]HDYRLGLPSDFWVWR&DQDGDO\Q[HONDQGIRUHVW FDUQLYRUHV

2YHUDOOWKH3URSRVHG$FWLRQZRXOGFRQWULEXWHWRLQFUHDVHGXVHRIVRPHWUDLOVLQWKHDUHDEXWZRXOGKDYH DUHODWLYHO\PLQRULPSDFWWRWKHUHFUHDWLRQUHVRXUFHVDQGFRQGLWLRQVFXUUHQWO\IRXQGZLWKLQWKH3URMHFW $UHD

2WKHU7UDLOV $VGLVFXVVHGLQ$IIHFWHG(QYLURQPHQWWKHUHDUHKXQGUHGVRIPLOHVRIRWKHUWUDLOVLQWKH3URMHFW$UHDWKDW UHFHLYHPRGHUDWHWRKLJKXVHWKURXJKRXWWKH\HDU7KHVHLQFOXGH EXWDUHQRWOLPLWHGWR /LWWOH)UHQFK 0LQQLH0LQH*ROG5XQ% %7XUN¶V;8DQG+XPEXJ+LOO0DQ\RIWKHVHWUDLOVDUHLGHQWLILHGRQ )LJXUH1RQHRIWKHVHWUDLOVDUHDQWLFLSDWHGWREHLPSDFWHGLQDQ\ZD\DVDUHVXOWRIWKH3URSRVHG$FWLRQ EHFDXVHKXWXVHUVZRXOGKDYHQRLQFHQWLYHWRXVHWKHPJLYHQWKHLUGLVWDQFHIURPWKH6DOOLH%DUEHU5RDG 7UDLOKHDG

&808/$7,9(())(&76

LPSURYHFRQVWUXFWDQGUHORFDWHWUDLOVWKURXJKRXWWKH$QDO\VLV$UHDLVDQWLFLSDWHGLQWKHIXWXUH7KXV RSSRUWXQLWLHVIRUERWKZLQWHUDQGVXPPHUGD\XVHKDYHJURZQDORQJZLWKGHPDQGDQG\HDUURXQGXVHRI WKHVHWUDLOVLVDQWLFLSDWHGWRLQFUHDVHLQWKHIXWXUH

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-15 79 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV %3DUNLQJDQG7UDIILF

% 3$5.,1*$1'75$)),&

6&23(2)$1$/<6,6

5HFUHDWLRQLVDSULPDU\JHQHUDWRURIWUDIILFLQ6XPPLW&RXQW\0DQ\SHRSOHWUDYHOHDFKZHHNHQG WKURXJKRXWWKH\HDUWRWKH&RXQW\WRHQMR\WKHDEXQGDQFHRIGHYHORSHGDQGGLVSHUVHGUHFUHDWLRQ RSSRUWXQLWLHV7KLVLQIOX[RISHRSOHDQGYHKLFOHVLVSDUWLFXODUO\QRWLFHDEOHRQDUWHULDODQGFROOHFWRUURDGV WKDWSURYLGHDFFHVVWRWUDLOKHDGV5HVLGHQWVDOVRJHQHUDWHWUDIILFDQGGHPDQGIRUSDUNLQJDWSRSXODU WUDLOKHDGVDQGUHFUHDWLRQDUHDVWKURXJKRXWWKH\HDU

7KLVDQDO\VLVIRFXVHVRQWUDIILFRQURDGVWKDWIHHGLQWRWKH:HEHU*XOFK%DFNFRXQWU\$UHD 3URMHFW$UHD DQGWKHH[LVWLQJSDUNLQJDWVXEVHTXHQWWUDLOKHDGV7KHVHLQFOXGH)UHQFK*XOFK5RDGDQGWKH6DOOLH%DUEHU 5RDG7UDLOKHDGDVWKHSULPDU\DFFHVVSRLQWLQWRWKH3URMHFW$UHDDVZHOODV%RUHDV3DVVDQG0W%DOG\ URDGVDQGDVVRFLDWHGWUDLOKHDGVSDUNLQJDUHDV$VWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWZRXOGQRW EHRSHUDWLRQDOLQWKHVXPPHUWKLVDQDO\VLVIRFXVHVRQWUDIILFDQGSDUNLQJSDWWHUQVGXULQJWKHZLQWHU

$))(&7('(19,5210(17 2YHUYLHZRI5RDG1HWZRUN

7KHQHWZRUNRIURDGVHDVWRI%UHFNHQULGJH²EHWZHHQ)UHQFK*XOFK5RDGRQWKHQRUWKDQG%RUHDV3DVV 5RDGRQWKHVRXWK²DUHPRVWO\FRPSULVHGRIUHVLGHQWLDOURDGVWKDWVHUYHDYDULHW\RIQHLJKERUKRRGV 7KHUHLVDQLQWHUPL[LQWKLVSDUWRI%UHFNHQULGJHRIIXOOWLPHUHVLGHQFHVDQGYDFDWLRQSURSHUWLHVZKLFK OHDGVWRUHJXODUGDLO\XVDJHDVZHOODVVSLNHVLQWUDIILFGXULQJSHDNYLVLWDWLRQSHULRGVVXFKDVKROLGD\V DQGZHHNHQGV

$OVRDVH[SODLQHGLQWKH5HFUHDWLRQDQDO\VLVRIWKLVGRFXPHQWWKHUHDUHDQXPEHURISRSXODUWUDLOKHDGV ORFDWHGLQWKLVDUHDDGGLQJWRWUDIILFYROXPHVWKURXJKRXWWKH\HDU0DQ\RIWKHVHWUDLOKHDGVDUHXVHGIRU ZLQWHUUHFUHDWLRQLQSDUWLFXODUWKH6DOOLH%DUEHU5RDG7UDLOKHDGDQGWKH0W%DOG\7UDLOKHDG9HKLFXODU DFFHVVDQGSDUNLQJDUHGLVFXVVHGVHSDUDWHO\EHORZ

$FFHVV5RDGV )UHQFK*XOFK5RDG )UHQFK*XOFK5RDG &RXQW\5RDG VHUYHVDVWKHPDLQSRLQWRIDFFHVVWR6DOOLH%DUEHU5RDGDQG QXPHURXVRWKHUWUDLOKHDGV$ORQJZLWKWZRIHHGHUURDGVFRPLQJLQWRLW)UHQFK*XOFK5RDGDOVRVHUYHV VHYHUDOUHVLGHQWLDODUHDVHDVWRI%UHFNHQULGJHLQFOXGLQJ IURPZHVWWRHDVW )UHQFK&UHHN9LVWD3RLQW DQG7KH:HOOLQJWRQ1HLJKERUKRRG

7KHWZRURDGVWKDWIHHGLQWR)UHQFK*XOFK5RDGDUH:HOOLQJWRQ5RDGZKLFKRULJLQDWHVRIIRI0DLQ6WUHHW LQGRZQWRZQ%UHFNHQULGJHDQG5HLOLQJ5RDGZKLFKVWHPVRI&5 +XURQ5RDG DIWHUWXUQLQJRIIRI +LJKZD\MXVWQRUWKRI7RZQ$IWHUSDVVLQJWKURXJKWKHUHVLGHQWLDODUHDVGHVFULEHGDERYHWKHURDGV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-16 80 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV %3DUNLQJDQG7UDIILF

LQWHUVHFWZLWKHDFKRWKHUDQG)UHQFK*XOFK5RDGQHDUWKH:HOOLQJWRQ1HLJKERUKRRG)URPWKHUH)UHQFK *XOFK5RDGFRQWLQXHVIRUDQRWKHUPLOHVEHIRUHPHHWLQJ6DOOLH%DUEHU5RDGDQGWKHWUDLOKHDG GHVFULEHGLQGHWDLOEHORZ

6DOOLH%DUEHU5RDGSURYLGHVDFFHVVWRDPL[RIWUDLOVORFDWHGRQ)RUHVWDQG7RZQ&RXQW\2SHQ6SDFH DQGLVFORVHGWRPRWRUL]HGXVHWKURXJKRXWWKH\HDU3DVWWKH6DOOLH%DUEHU5RDG7UDLOKHDG)UHQFK*XOFK 5RDGFRQWLQXHVIRUDSSUR[LPDWHO\PRUHPLOHVWKRXJKDVGLVFXVVHGEHORZLWLVQRWPDLQWDLQHGE\ 6XPPLW&RXQW\LQWKHZLQWHU UHIHUWR3KRWRV%DQG%

3KRWR% 6DOOLH%DUEHU5RDG7UDLOKHDG

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-17 81 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV %3DUNLQJDQG7UDIILF

3KRWR% ,QWHUVHFWLRQRI)UHQFK*XOFK5RDGDQG6DOOLH%DUEHU5RDG

)UHQFK*XOFK5RDGLVSDYHGWRWKHSRLQWDWZKLFKWKH:HOOLQJWRQ1HLJKERUKRRGHQGVDQGWKH&RXQWU\ %R\PLQHSURSHUW\EHJLQV6XPPLW&RXQW\SORZV)UHQFK*XOFK5RDGXSWRWKH6DOOLH%DUEHU5RDG 7UDLOKHDG0RQGD\WKURXJK)ULGD\DVZHOODVRQ6DWXUGD\VDQG6XQGD\VLIWKH\UHFHLYHPRUHWKDQWR LQFKHVRIVQRZ2QHVSRWLQWKHSDUNLQJDUHDLVGHGLFDWHGWRVQRZSORZWXUQDURXQGGXULQJWKHZLQWHU

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

'XHWRWKHGHQVHUHVLGHQWLDOSRSXODWLRQDORQJ)UHQFK*XOFK5RDGWKLVDUHD¶VSUR[LPLW\WR%UHFNHQULGJH DQGWKHQXPEHURIWUDLOKHDGVLWUHFHLYHVQRWRQO\YHKLFXODUWUDIILFEXWDOVRDKLJKQXPEHURISHGHVWULDQV UXQQHUVDQGF\FOLVWVHYHQLQWKHZLQWHUPRQWKV%HFDXVHWKHWUDIILFJHQHUDWHGE\0RXQWDLQ0HDGRZV KRPHRZQHUVLVLQFRQVHTXHQWLDOHVVHQWLDOO\DOOWUDIILFEH\RQGWKH:HOOLQJWRQ1HLJKERUKRRGLVUHODWHGWR UHFUHDWLRQWKURXJKRXWWKH\HDU6SHHGOLPLWVRQ)UHQFK*XOFK5RDGWKURXJK)UHQFK&UHHN9LVWD3RLQW DQG7KH:HOOLQJWRQ1HLJKERUKRRGDUHSRVWHGDVRUPSK6SHHGVDUHPRGHUDWHGE\VSHHGEXPSV WKURXJK)UHQFK&UHHN DQGVWRSVLJQV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-18 82 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV %3DUNLQJDQG7UDIILF

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

%RUHDV3DVVDQG0W%DOG\5RDG 0W%DOG\5RDG &25RDG VWHPVRIIRI%RUHDV3DVV5RDG ZKLFKLQWHUVHFWV+LJKZD\VRXWKRI %UHFNHQULGJH %RWKRIWKHVHURDGVWUDYHOWKURXJKGHQVHUHVLGHQWLDOGHYHORSPHQWVHDVWRI%UHFNHQULGJH 7UDIILFRQ0W%DOG\5RDGDQG%RUHDV3DVV5RDGLVJHQHUDOO\FRPSULVHGRIIXOOWLPHUHVLGHQWVYLVLWRUV ZKRDUHVWD\LQJDWYDFDWLRQSURSHUWLHVDQGUHFUHDWLRQLVWVWUDYHOLQJWRSDUNLQJDUHDVDQGWUDLOKHDGVDFURVV 0W%DOG\7KHVHURDGVDUHDOVRSRSXODUIRUVLJKWVHHLQJDVWKH\DUHVLWXDWHGDERYHWKHWRZQDQGGLUHFWO\ DFURVVWKHYDOOH\IURP%UHFNHQULGJH6NL5HVRUWDQGWKH7HQ0LOH5DQJH7KHUHLVELF\FOHDQGSHGHVWULDQ WUDIILFLQWKHVXPPHU

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

:LQWHUWUDIILFFRXQWVIURP6XPPLW&RXQW\5RDGDQG%ULGJHDUHXQDYDLODEOHIRU0W%DOG\5RDG KRZHYHUEDVHGRQWKHLUREVHUYDWLRQVWKH\HVWLPDWHWKDWWUDIILFLVLQWKHWKRXVDQGVRIFDUVGDLO\GXHWRWKH QXPEHURIUHVLGHQWLDOXQLWVWKDWH[LVWWKHUH

3DUNLQJ$UHDV 6DOOLH%DUEHU5RDG7UDLOKHDG3DUNLQJ$UHD 7KH6DOOLH%DUEHU5RDG7UDLOKHDGDQGSDUNLQJDUHDLVORFDWHGDSSUR[LPDWHO\PLOHVSDVWWKH :HOOLQJWRQ1HLJKERUKRRGRQ)UHQFK*XOFK5RDG7KHXQSDYHGORWKDVWKHFDSDFLW\WRILWDSSUR[LPDWHO\ YHKLFOHVWKRXJKRYHUIORZSDUNLQJIUHTXHQWO\RFFXUVDORQJ)UHQFK*XOFK5RDGRQZHHNHQGVDQGDW .HQDG\ 3ROKHPXV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-19 83 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV %3DUNLQJDQG7UDIILF

SHDNWLPHV'XULQJWKHZLQWHUVQRZEDQNVIXUWKHUOLPLWWKHSDUNLQJFDSDFLW\DQGYHKLFOHVSXOOLQJ VQRZPRELOHWUDLOHUVUHGXFHSDUNLQJHYHQPRUH7KH6DOOLH%DUEHUWUDLOKHDGGRHVH[SHULHQFHSDUNLQJ FRQVWUDLQWVWKURXJKRXWWKH\HDUSULPDULO\LQWKHZLQWHU UHIHUWR3KRWR%

7KHUHLVQRIHHWRSDUNDWWKH6DOOLH%DUEHU5RDG7UDLOKHDGDQGRYHUQLJKWSDUNLQJLVSURKLELWHGSHU 6XPPLW&RXQW\$VGLVFXVVHGWKHORWLVFXUUHQWO\SORZHGE\6XPPLW&RXQW\5RDGDQG%ULGJH

%DVHGRQWUDLOKHDGFRXQWV SHRSOH LQYHQWRULHGEHWZHHQ1RYHPEHUDQG$SULOXVHDWWKH6DOOLH %DUEHU5RDG7UDLOKHDGSHDNVLQWKHPLGGOHRI-DQXDU\:HHNHQGQXPEHUVDUHW\SLFDOO\PXFKKLJKHUWKDQ ZHHNGD\V)RUH[DPSOHWKHWDEOHVEHORZLOOXVWUDWHYLVLWDWLRQRQ0DUWLQ/XWKHU.LQJZHHNHQGDQGWKH IROORZLQJZHHNHQGZKLFKZDVWKHEXVLHVWRQUHFRUGIRUZLQWHU

7DEOH% &RXQWVDW6DOOLH%DUEHU5RDG7UDLOKHDG 0/.+ROLGD\:HHNHQG 'DWH 'D\ &RXQW SHRSOH )ULGD\ 6DWXUGD\ 6XQGD\ 0RQGD\ 6RXUFH7RZQRI%UHFNHQULGJH2SHQ6SDFHDQG7UDLOV'HSDUWPHQW

7DEOH% &RXQWVDW6DOOLH%DUEHU5RDG7UDLOKHDG %XVLHVW:HHNHQG:LQWHU 'DWH 'D\ &RXQW SHRSOH )ULGD\ 6DWXUGD\ 6XQGD\ 0RQGD\ 6RXUFH7RZQRI%UHFNHQULGJH2SHQ6SDFHDQG7UDLOV'HSDUWPHQW

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-20 84 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV %3DUNLQJDQG7UDIILF

0W%DOG\5RDG3DUNLQJ$UHDV 7KRXJKWKH\DUHQRWSURSRVHGDVWKHSULPDU\SDUNLQJDUHDIRUWKH:HEHU*XOFKEDFNFRXQWU\KXWWKHUHDUH WZRSDUNLQJDUHDVDFFHVVLEOHIURP0W%DOG\5RDGWKDWDUHLPSRUWDQWWRWKHDUHD¶VFDSDFLW\IRUDFFHVVWR UHFUHDWLRQWUDIILFSDWWHUQVDQGGDLO\XVH$VGLVFXVVHGSUHYLRXVO\LQWKLVVHFWLRQDQGLQWKH5HFUHDWLRQ VHFWLRQWKHILUVWSDUNLQJDUHDLVORFDWHGPLOHSDVWWKHWXUQRIIRI%RUHDV3DVV5RDGDWWKHVRXWKHUQ H[WHQWRI6DOOLH%DUEHU5RDG7KHORWLVVPDOOZLWKURRPIRUMXVWDIHZYHKLFOHVIRUGDLO\XVH1R RYHUQLJKWSDUNLQJLVSHUPLWWHG

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

%RUHDV3DVV7UDLOKHDGDQG3DUNLQJ$UHD ,QDGGLWLRQWRWKHRWKHUSDUNLQJDUHDVPHQWLRQHGWKXVIDUWKDWSURYLGHDFFHVV GLUHFWDQGLQGLUHFW WRWKH :HEHU*XOFK%DFNFRXQWU\$UHDWKH%RUHDV3DVV7UDLOKHDGDQGSDUNLQJDUHDDUHDQLPSRUWDQWSRLQWRI DFFHVVIRUWKHJUHDWHU%DOG0RXQWDLQWUDLOQHWZRUN UHIHUWR)LJXUH 7KH%RUHDV3DVV7UDLOKHDGDQG SDUNLQJDUHDKDYHWKHFDSDFLW\IRUDSSUR[LPDWHO\WRYHKLFOHVZLWKDGGLWLRQDOSDUNLQJDORQJWKH URDG7KLVFDSDFLW\LVIUHTXHQWO\UHDFKHGHVSHFLDOO\RQZHHNHQGV

6NLHUVDQGVQRZVKRHUVZKRDUHYHQWXULQJWR6+$¶V6HFWLRQ+RXVHRU.HQ¶V&DELQSDUNKHUHDQGWUDYHO PLOHVWRWKHLUGHVWLQDWLRQXS%RUHDV3DVV5RDG$WDSSUR[LPDWHO\WKHPLOHPDUNDW%DNHU¶V7DQN WKHUHDUHVHYHUDOPRUHWUDLOVWKDWVSXURIIRI%RUHDV3DVV5RDGWKDWSURYLGHDOWHUQDWLYHURXWHVLQWRWKH 3URMHFW$UHD

',5(&7$1',1',5(&7(19,5210(17$/&216(48(1&(6 $OWHUQDWLYH±1R$FWLRQ

1RFKDQJHVWRDFFHVVRUSDUNLQJDUHDVZRXOGRFFXUXQGHU$OWHUQDWLYH7KH3URMHFW$UHDZRXOGFRQWLQXH WRVHUYHUHVLGHQWLDODUHDVHDVWRI%UHFNHQULGJHDVZHOODVDQXPEHURISRSXODUWUDLOKHDGVDFFHVVLQJ:51) 7RZQ&RXQW\2SHQ6SDFHODQGV7KHUHZRXOGEHQRFKDQJHVWRWKHH[LVWLQJSDUNLQJUHJXODWLRQV7KH 6DOOLH%DUEHU5RDG7UDLOKHDGDQGSDUNLQJDUHDZRXOGFRQWLQXHWRDOORZRYHUQLJKWSDUNLQJRQDILUVW FRPHILUVWVHUYHEDVLVDQGFDUVZRXOGFRQWLQXHWRSDUNRQ)UHQFK*XOFKGXULQJSHDNWLPHV7KH 0W%DOG\7UDLOKHDGDQGSDUNLQJDUHDZRXOGUHPDLQRSHQIRUGD\XVH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-21 85 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV %3DUNLQJDQG7UDIILF

$OWHUQDWLYH±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

6+$GDWDIRU)UDQFLH¶V-DQHW¶VDQG6HFWLRQ+RXVHLQGLFDWHWKDWDYHUDJHKXWXVHUVW\SLFDOO\FDUSRRO DYHUDJLQJSHRSOHSHUYHKLFOH+LVWRULFDOO\6+$KXWVDUHSHUFHQWRFFXSLHGEHWZHHQ-DQXDU\DQG 0DUFKDQGQHDUO\DOZD\VSHUFHQWRQWKHZHHNHQGVGXULQJWKDWWLPH2FFXSDQF\LQ 1RYHPEHU'HFHPEHUDQG$SULOLVPXFKORZHU

)RUH[DPSOHDWSHRSOHSHUYHKLFOHDVLQJOHQLJKWDWSHUFHQWRFFXSDQF\ SHRSOH ZRXOGHTXDWH WRVL[YHKLFOHVDWWULEXWDEOHWR:HEHU*XOFKEDFNFRXQWU\KXWXVHUV $ORZHUSHRSOHSHUYHKLFOHUDWLR ZRXOGOHDGWRPRUHKXWXVHUYHKLFOHV ,WLVUHDVRQDEOHWRDVVXPHWKDWEHWZHHQVL[DQGHLJKWYHKLFOHVFRXOG EHDWWULEXWDEOHWR:HEHU*XOFKEDFNFRXQWU\KXWXVHUVRQDQ\JLYHQQLJKWZLWKSHUFHQWRFFXSDQF\ )DFWRULQJLQWKHRYHUODSEHWZHHQDUULYLQJDQGGHSDUWLQJKXWXVHUVGDLO\KXWUHODWHGWUDIILFRQ)UHQFK *XOFK5RDGFRXOGEHUDQJHEHWZHHQDQGYHKLFOHV WRYHKLFOHVERWKHDVWERXQGDQGZHVWERXQG

+XWUHODWHGWUDYHOZRXOGKDSSHQODUJHO\EHWZHHQDPDQGSP7KLVLVEHFDXVHKXWWXUQRYHUWLPHLV SPVRYLVLWRUVIURPWKHSUHYLRXVQLJKWKDYHWREHRXWRIWKHKXWE\WKDWWLPHDQGDUULYLQJYLVLWRUV FDQQRWDUULYHHDUOLHUWKDQWKDWWLPH

7KHDYHUDJHKXWVWD\LVWZRQLJKWV2QHKXQGUHGSHUFHQWRFFXSDQF\ZRXOGEHDQWLFLSDWHGRQZHHNHQGV EHWZHHQ-DQXDU\DQG0DUFK7KHUHIRUHLWLVUHDVRQDEOHWRDVVXPHWKDWWKHDFWXDOGDLO\FRQWULEXWLRQWR WUDIILFRQ)UHQFK*XOFK5RDG²HYHQRQGD\VLQZKLFKWKHKXWLVIXOO\RFFXSLHG²ZRXOGEHOHVVWKDQVL[ YHKLFOHVERWKHDVWERXQGDQGZHVWERXQG

9LHZHGLQWKHFRQWH[WRIWKHH[LVWLQJUHVLGHQWLDODQGUHFUHDWLRQDOWUDIILFRQ)UHQFK*XOFK5RDGEHWZHHQ +LJKZD\DQGWKH6DOOLH%DUEHU5RDG7UDLOKHDGGDLO\KXWUHODWHGWUDIILFLVFRQVLGHUHGLQFRQVHTXHQWLDO 7KHUHIRUHFRQVLGHULQJWKHH[LVWLQJIUHTXHQF\RIWUDIILFRQWKHRYHUDOOURDGQHWZRUNIHHGLQJLQWRWKH 3URMHFW$UHDWKHLPSDFWVWRWKHJUHDWHUURDGQHWZRUNZRXOGDOVREHLQFRQVHTXHQWLDO

=REEH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-22 86 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV %3DUNLQJDQG7UDIILF

7UDIILFDQG$FFHVVRQ0W%DOG\5RDG 1RLPSDFWVWR0W%DOG\5RDGDUHDQWLFLSDWHGGXHWRWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXW7KLV URDGZRXOGQRWEHUHFRJQL]HGE\6+$DVDQDFFHVVSRLQWWRWKHSURSRVHGKXWGXHWRLWVODFNRIOHJDO RYHUQLJKWSDUNLQJDQGWKHUHIRUHZRXOGQRWEHLQFOXGHGLQWKHLQIRUPDWLRQDOPDWHULDO PDSVRU GLUHFWLRQV SURYLGHGWRUHJLVWHUHGKXWXVHUV

$VPDOOQXPEHURIKXWXVHUVPD\RSWWRXVHWKH6XPPLW6WDJHDVWKHLUPHDQVWRUHDFKLQJWKH0W%DOG\ 7UDLOKHDGDQGVNLVQRZVKRHWRWKHKXWVLWHIURPWKHUH+RZHYHUWKHORJLVWLFVRISDUNLQJLQWRZQULGLQJ WKHEXVZLWKJHDUDQGFRRUGLQDWLQJWKHUHWXUQZRXOGOLNHO\SUHFOXGHPRVWKXWXVHUVIURPSXUVXLQJWKLV RSWLRQ5HJDUGOHVVWKHUHZRXOGEHQRFKDQJHVWRWKHH[LVWLQJEXVURXWHRUVFKHGXOHQHHGHGWR DFFRPPRGDWHWKLVWKXVQRLPSDFWVWR0W%DOG\5RDG

$PLQLPDOQXPEHURIYHKLFOHWULSVZRXOGEHDWWULEXWHGWRPDLQWHQDQFHYHKLFOHVEXWWKHVHWULSVZRXOGQRW EHQRWLFHDEOH

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

0W%DOG\%RUHDV3DVV3DUNLQJ$UHDV $VGLVFXVVHGLQWKH3URSRVHG$FWLRQ &KDSWHU WKH%UHFNHQULGJH,FH5LQNSDUNLQJRSWLRQZRXOGEH LGHQWLILHGLQWKHJHQHUDOKXWXVHLQIRUPDWLRQSDFNHWSURYLGHGE\6+$+XWXVHUVZRXOGEHDEOHWROHDYH WKHLUFDUVDWWKHLFHULQNRYHUQLJKW DIWHUWKH\DFTXLUHDSHUPLWIURPWKH7RZQRI%UHFNHQULGJH DQGWDNH WKH6XPPLW6WDJHWRWKH%DOG0RXQWDLQ7UDLOKHDGZKHUHWKH\ZRXOGEHJLQWKHLUKLNHWRWKHKXW +RZHYHUDVGLVFXVVHGSUHYLRXVO\0W%DOG\5RDGZRXOGQRWEHUHFRJQL]HGE\6+$DVDSDUNLQJRSWLRQ GXHWRWKHSURKLELWLRQRIRYHUQLJKWSDUNLQJ$GPLQLVWUDWLYHYHKLFOHVPD\RFFDVLRQDOO\SDUNLQJLQWKLV ORFDWLRQEXWWKLVXVHZRXOGEHUHODWLYHO\LQIUHTXHQWDQGJHQHUDOO\RQO\UHTXLUHRQHYHKLFOH7KHUHIRUHQR

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-23 87 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV %3DUNLQJDQG7UDIILF

LPSDFWVWRWKH0W%DOG\7UDLOKHDGRUSDUNLQJZRXOGRFFXUDVDUHVXOWRI$OWHUQDWLYH2YHUQLJKWXVHDW WKH0W%DOG\7UDLOKHDGDQGSDUNLQJDUHDZRXOGFRQWLQXHWREHSURKLELWHG

1RPHDVXUDEOHLPSDFWVZRXOGRFFXUDWRWKHUQHDUE\SDUNLQJDUHDVVXFKDVWKH%RUHDV3DVV 7UDLOKHDGSDUNLQJDUHD7KHRFFDVLRQDOKXWXVHUZKRWUDYHOVIURPKXWWRKXWVXFKDVEHWZHHQ6HFWLRQ +RXVHDQGWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWFRXOGXWLOL]HWKLVDFFHVVSRLQWKRZHYHUWKH QXPEHURIXVHUVZKRGRWKLVZRXOGEHQHJOLJLEOH

&808/$7,9(())(&76

6LQFHWKHHIIHFWVRIWKH3URSRVHG$FWLRQRQSDUNLQJDQGWUDIILFDUHLQFRQVHTXHQWLDOWKHUHZRXOGEHQR FXPXODWLYHHIIHFWVZLWKSDVWSUHVHQWRUUHDVRQDEO\IRUHVHHDEOHIXWXUHSURMHFWV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-24 88 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV &6FHQHU\

& 6&(1(5<

6&23(2)$1$/<6,6

%DOG0RXQWDLQDQGWKH:HEHU*XOFKDUHDDUHLPSRUWDQWYLVXDOUHVRXUFHVWRWKH:51)DQGVXUURXQGLQJ FRPPXQLW\7KH$QDO\VLV$UHDIRUVFHQHU\UHVRXUFHVLQFOXGHVWKHQRUWKHUQDVSHFWRI%DOG0RXQWDLQ LQFOXGLQJ:HEHU*XOFKZKLFKLVYLVLEOHIURPSRUWLRQVRI)UHQFK*XOFK5RDGDQGWKHVXUURXQGLQJ ORFDWLRQV²ERWKRQDQGRII)RUHVW

0$1$*(0(172)7+(6&(1,&(19,5210(17211$7,21$/)25(67 6<67(0/$1'6

7KH6FHQHU\0DQDJHPHQW6\VWHP 606 ZDVDGRSWHGLQDVWKHSULPDU\VFHQHU\PDQDJHPHQW GLUHFWLRQE\WKH)RUHVW6HUYLFH,QEULHIWKH606LVDV\VWHPDWLFDSSURDFKIRUDVVHVVLQJVFHQLFUHVRXUFHV LQD3URMHFW$UHDWRKHOSPDNHPDQDJHPHQWGHFLVLRQVRQWKHSURMHFW

6FHQLF,QWHJULW\2EMHFWLYHVDQG/DQGVFDSH&KDUDFWHU

$QDFWLRQFDQFDXVHFKDQJHVWRVFHQLFUHVRXUFHVWKDWFDQEHREMHFWLYHO\PHDVXUHG%\DVVHVVLQJWKH H[LVWLQJVFHQLFFKDUDFWHURIDQDUHDLQWHUPVRISDWWHUQHOHPHQWV IRUPOLQHFRORUDQGWH[WXUH DQGSDWWHUQ FKDUDFWHU GRPLQDQFHVFDOHGLYHUVLW\DQGFRQWLQXLW\ LWLVSRVVLEOHWRLGHQWLI\WKHH[WHQWWRZKLFKWKH VFHQLFFKDUDFWHUZRXOGH[KLELWVFHQLFFRQWUDVWZLWKWKHODQGVFDSHRULWVFRQYHUVH²VFHQHU\FRPSDWLELOLW\

7KH)RUHVW3ODQHVWDEOLVKHVDFFHSWDEOHOLPLWVRIFKDQJHIRU6FHQLF5HVRXUFHV7KHDFFHSWDEOH OLPLWVRIFKDQJHRIDSDUWLFXODUDUHD HJ0DQDJHPHQW$UHDDVGHILQHGLQWKH)RUHVW3ODQ DUHWKH GRFXPHQWHG6FHQLF,QWHJULW\2EMHFWLYHV 6,2 ZKLFKVHUYHDVPDQDJHPHQWJRDOVIRUVFHQLFUHVRXUFHV 6,2VSURYLGHDPHDVXUHRIYLVLEOHGLVUXSWLRQRIODQGVFDSHFKDUDFWHUUDQJLQJIURP³9HU\+LJK´WR ³8QDFFHSWDEO\/RZ´,QRUGHURIOHDVWWRPRVWDOWHUHG6,2VDUH

x 9HU\+LJK XQDOWHUHG

x +LJK DSSHDUVXQDOWHUHG

x 0RGHUDWH VOLJKWO\DOWHUHG

x /RZ PRGHUDWHO\DOWHUHG

x 9HU\/RZ KHDYLO\DOWHUHG

x 8QDFFHSWDEO\/RZ H[WUHPHO\DOWHUHG

86'$)RUHVW6HUYLFH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-25 89 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV &6FHQHU\

)RUUHIHUHQFH9HU\+LJK6,2VDUHW\SLFDOO\IRXQGLQGHVLJQDWHGZLOGHUQHVVDUHDVDQGVSHFLDOLQWHUHVW DUHDV$VLQGLFDWHGLQWKH)RUHVW3ODQ0DQDJHPHQW$UHDKDVDZLGHUDQJHRI6,2V²IURP 0RGHUDWHWR9HU\+LJK7KH:HEHU*XOFK3URMHFW$UHDKDVDQ6,2RI0RGHUDWH

7KH0RGHUDWH6,2LVGHILQHGDV

1RWLFHDEOHGHYLDWLRQVPXVWUHPDLQYLVXDOO\VXERUGLQDWHWRWKHODQGVFDSHFKDUDFWHUEHLQJYLHZHG6HH VHFWLRQEHORZRQPHHWLQJLQWHJULW\OHYHOV

7KH+LJK6,2LVGHILQHGDV

'HYLDWLRQVPD\EHSUHVHQWEXWPXVWUHSHDWWKHIRUPOLQHFRORUWH[WXUHDQGSDWWHUQFRPPRQWRWKH ODQGVFDSHFKDUDFWHUVRFRPSOHWHO\DQGDWVXFKVFDOHWKDWWKH\DUHQRWHYLGHQW

7KH9HU\+LJK6,2LVGHILQHGDV

9HU\+LJKVFHQLFLQWHJULW\UHIHUVWRODQGVFDSHVZKHUHWKHYDOXHGODQGVFDSHFKDUDFWHULVLQWDFWZLWK RQO\PLQXWHLIDQ\GHYLDWLRQV7KHH[LVWLQJODQGVFDSHFKDUDFWHUDQGVHQVHRISODFHLVH[SUHVVHGDWWKH KLJKHVWSRVVLEOHOHYHO

6FHQHU\0DQDJHPHQW6\VWHP'LVWDQFH=RQHV

9LHZLQJGLVWDQFHLVLPSRUWDQWLQGHWHUPLQLQJKRZFKDQJHLVSHUFHLYHGDFURVVDODQGVFDSH'LVWDQFH]RQHV DUHGLYLVLRQVRIDSDUWLFXODUODQGVFDSHEHLQJYLHZHGDQGDUHXVHGWRGHVFULEHWKHSDUWRIDFKDUDFWHULVWLF ODQGVFDSHWKDWLVEHLQJLQYHQWRULHGRUHYDOXDWHG

x ,PPHGLDWH)RUHJURXQG7KLV]RQHEHJLQVDWWKHYLHZHUDQGH[WHQGVWRDERXWIHHW,QGLYLGXDO OHDYHVIORZHUVWZLJVEDUNWH[WXUHDQGRWKHUGHWDLOVGRPLQDWHWKLVYLHZ

x )RUHJURXQG7KLV]RQHLVXVXDOO\OLPLWHGWRDUHDVZLWKLQIHHWWRPLOH QRWWRH[FHHG PLOH RIWKHREVHUYHUEXWLWPXVWEHGHWHUPLQHGRQDFDVHE\FDVHEDVLVDVVKRXOGDQ\ GLVWDQFH]RQLQJ*HQHUDOO\GHWDLORIODQGIRUPVLVPRUHSURQRXQFHGZKHQYLHZHGIURPZLWKLQWKH IRUHJURXQG]RQH

x 0LGGOHJURXQG$OWHUDWLRQVLQWKHPLGGOHJURXQG WRPLOHVIURPWKHREVHUYHU DUHOHVV GLVWLQFWLYH7H[WXUHLVQRUPDOO\FKDUDFWHUL]HGE\WKHPDVVHVRIWUHHVLQVWDQGVRUXQLIRUPWUHH FRYHU

x %DFNJURXQG7KLV]RQHH[WHQGVIURPPLGGOHJURXQG PLQLPXPRIPLOHVEHWZHHQWKHREVHUYHU DQGWKHDUHDEHLQJYLHZHG WRLQILQLW\6KDSHPD\UHPDLQHYLGHQWEH\RQGPLOHVHVSHFLDOO\LILW

6,2GHVLJQDWLRQVZLWKLQWKH$QDO\VLV$UHDDUHGHSLFWHGJUDSKLFDOO\LQWKH3URMHFW)LOH 86'$)RUHVW6HUYLFH ,ELG ,ELG

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-26 90 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV &6FHQHU\

LVLQFRQVLVWHQWZLWKRWKHUODQGVFDSHIRUPV%H\RQGPLOHVDOWHUDWLRQLQODQGVFDSHFKDUDFWHU EHFRPHVREVFXUH

)RUHVW3ODQ6WDQGDUGVDQG*XLGHOLQHV

,QDGGLWLRQWRWKH606WKH)RUHVW3ODQFRQWDLQVIRUHVWZLGHVWDQGDUGVDQGJXLGHOLQHVZKLFKDSSO\WR UHVRXUFHVDFURVVWKH:51):KLOHWKH)RUHVW3ODQFRQWDLQVQRIRUHVWZLGHVWDQGDUGVIRUVFHQHU\ PDQDJHPHQWLWRIIHUVWKHIROORZLQJJXLGHOLQHVWKDWDUHDSSOLFDEOHWRWKLVSURMHFW

x 0DQDJHPHQWDFWLYLWLHVVKRXOGEHGHVLJQHGDQGLPSOHPHQWHGWRDFKLHYHDWPLQLPXPWKHOHYHORI VFHQLFLQWHJULW\VKRZQRQWKH6FHQLF,QWHJULW\2EMHFWLYH0DS

x 3ODQGHVLJQDQGORFDWHYHJHWDWLRQPDQLSXODWLRQRQDVFDOHWKDWUHWDLQVWKHFRORUDQGWH[WXUHRIWKH ODQGVFDSHFKDUDFWHUERUURZLQJGLUHFWLRQDOHPSKDVLVRIIRUPDQGOLQHIURPQDWXUDOIHDWXUHV

x &KRRVHIDFLOLW\DQGVWUXFWXUHGHVLJQVFDOHFRORURIPDWHULDOVORFDWLRQDQGRULHQWDWLRQWRPHHWWKH VFHQLFLQWHJULW\REMHFWLYHRQWKH6FHQLF,QWHJULW\2EMHFWLYH0DS

0DQDJHPHQW$UHDSURYLGHVWKHIROORZLQJLQIRUPDWLRQRQWKHGHVLUHGFRQGLWLRQIRUODQGVPDQDJHG IRUEDFNFRXQWU\QRQPRWRUL]HGUHFUHDWLRQ

$YDULHW\RI\HDUURXQGQRQPRWRUL]HGUHFUHDWLRQRSSRUWXQLWLHVDUHSURYLGHGLQDQDWXUDORUQDWXUDO DSSHDULQJVHWWLQJ,PSURYHPHQWVVXFKDVWUDLOKHDGVWUDLOVVLJQVEULGJHVIHQFHVKXWVRUVKHOWHUVWKDW HQKDQFHWKHUHFUHDWLRQDORSSRUWXQLWLHVPD\EHSUHVHQW7UDLOVSURYLGHFKDOOHQJLQJKLNLQJKRUVHEDFN ULGLQJFURVVFRXQWU\VNLLQJVQRZVKRHLQJRUPRXQWDLQELNLQJRSSRUWXQLWLHV1RURDGEXLOGLQJRFFXUV ZLWKLQWKHDUHD1RLVHIURPPRWRUL]HGXVHLVDUDUHH[FHSWLRQDZD\IURPWKHDUHDERXQGDU\

7KH)RUHVW3ODQLQFOXGHVDVLQJOHJXLGHOLQHWKDWWKLVUHOHYDQWWRVFHQHU\PDQDJHPHQWLQ 0DQDJHPHQW$UHD %DFNFRXQWU\5HFUHDWLRQ±1RQPRWRUL]HG ³6WUXFWXUHVVKRXOGEHPDGHRIQDWLYH DQGQDWXUDODSSHDULQJPDWHULDOV´

7KH)RUHVW3ODQIXUWKHUVWDWHVWKDWLWLVDUHJLRQDOJRDOWR³SURYLGHIRUVFHQLFTXDOLW\DQGDUDQJHRI UHFUHDWLRQDORSSRUWXQLWLHVWKDWUHVSRQGWRWKHQHHGVRIWKHIRUHVWFXVWRPHUVDQGORFDOFRPPXQLWLHV´

$VWDQGDUGLVDFRXUVHRIDFWLRQZKLFKPXVWEHIROORZHGDGKHUHQFHLVPDQGDWRU\$JXLGHOLQHLVDSUHIHUUHG FRXUVHRIDFWLRQGHVLJQHGWRDFKLHYHDJRDOUHVSRQGWRYDULDEOHVLWHFRQGLWLRQVRUUHVSRQGWRDQRYHUDOOFRQGLWLRQ 86'$)RUHVW6HUYLFH ,ELG ,ELGSDJH ,ELG

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-27 91 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV &6FHQHU\

7KH%XLOW(QYLURQPHQW,PDJH*XLGH

7KH%XLOW(QYLURQPHQW,PDJH*XLGH %(,* ZDVSUHSDUHGE\WKH)RUHVW6HUYLFHIRUWKH³WKRXJKWIXO GHVLJQDQGPDQDJHPHQW´RIWKHEXLOWHQYLURQPHQWFRQWDLQHGZLWKLQWKH1DWLRQDO)RUHVWV7KH)RUHVW 6HUYLFHGHILQHVWKHEXLOWHQYLURQPHQWDV³WKHDGPLQLVWUDWLYHDQGUHFUHDWLRQEXLOGLQJVODQGVFDSH VWUXFWXUHVVLWHIXUQLVKLQJVVWUXFWXUHVRQURDGVDQGWUDLOVDQGVLJQVLQVWDOOHGRURSHUDWHGE\WKH)RUHVW 6HUYLFHLWVFRRSHUDWRUVDQGSHUPLWWHHV7KH%(,*GLYLGHVWKH8QLWHG6WDWHVLQWRHLJKWSURYLQFHVZKLFK FRPELQHFRPPRQHOHPHQWVIURPWKHHFRORJLFDODQGFXOWXUDOFRQWH[WVRYHUODUJHJHRJUDSKLFDODUHDV%DOG 0RXQWDLQ:HEHU*XOFKDQGDGMDFHQW1)6ODQGVDUHZLWKLQWKH5RFN\0RXQWDLQ3URYLQFH6LWH GHYHORSPHQWVXVWDLQDELOLW\DQGDUFKLWHFWXUDOFKDUDFWHUVKRXOGFRQIRUPWR%(,*JXLGHOLQHVGHVFULEHGIRU WKLV3URYLQFH

$))(&7('(19,5210(17

7KH:HEHU*XOFKDUHDDQGSRUWLRQVRI%DOG0RXQWDLQDUHFXUUHQWO\FRQVLVWHQWZLWK DQGLQPDQ\FDVHV H[FHHG WKH)RUHVW3ODQ6,2GHVLJQDWLRQRI0RGHUDWHDVZHOODV)RUHVWZLGHJXLGHOLQHVIRUVFHQHU\ PDQDJHPHQW7KHH[LVWLQJUHFUHDWLRQDOWUDLOV\VWHPDQGIHZURDGZD\VRQWKLVSRUWLRQRI%DOG0RXQWDLQ FRQWULEXWHWRWKH0RGHUDWHWR+LJK6,2GHVLJQDWLRQVIRUWKLVDUHDZKLOHWKHXQGHYHORSHGSRUWLRQVRIWKH )RUHVWPHHWWKH9HU\+LJKVFHQLFLQWHJULW\REMHFWLYHV

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

3KRWR&LVRIWKHORFDWLRQIRUWKHSURSRVHGSDUNLQJORW

86'$)RUHVW6HUYLFH ,ELG

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-28 92 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV &6FHQHU\

3KRWR& 9LHZ (DVW RI3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW6LWHIURPWKH3URSRVHG$FFHVV7UDLO

$SSUR[LPDWH+XW/RFDWLRQ

3KRWR& 9LHZ 6RXWKZHVW IURPWKH3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW6LWH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-29 93 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV &6FHQHU\

3KRWR& 9LHZ 1RUWKHDVW IURPWKH3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW6LWH

1RWHIRUUHIHUHQFH7KH2XWEDFNDW.H\VWRQHDQG*UD\DQG7RUUHVSHDNVDUHRQWKHULJKWVLGH

3KRWR& 9LHZRI3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW6LWHIURP7RSRI+XPEXJ+LOO

$SSUR[LPDWH+XW/RFDWLRQ

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-30 94 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV &6FHQHU\

3KRWR& 3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW3DUNLQJ$UHD/RFDWLRQ$ORQJ6DOOLH%DUEHU5RDG

',5(&7$1',1',5(&7(19,5210(17$/&216(48(1&(6 $OWHUQDWLYH±1R$FWLRQ

8QGHUWKH1R$FWLRQ$OWHUQDWLYHQRFKDQJHVRUPRGLILFDWLRQVZRXOGEHDSSURYHGWKDWZRXOGDIIHFWWKH VFHQLFTXDOLW\RIWKH:HEHU*XOFKRU%DOG0RXQWDLQDUHD$VGLVFXVVHGXQGHU([LVWLQJ&RQGLWLRQV :HEHU*XOFKIROORZVWKH0RGHUDWH6,2 ³VOLJKWO\DOWHUHG´ WR9HU\+LJK6,2 ³XQDOWHUHG´ FODVVLILFDWLRQ IRUWKH3URMHFW$UHD

8QGHUWKH1R$FWLRQ$OWHUQDWLYHGHYHORSHGDQGXQGHYHORSHGSRUWLRQVRI%DOG0RXQWDLQDQGWKH:HEHU *XOFKDUHDZRXOGFRQWLQXHWRPHHWWKH0RGHUDWHWR9HU\+LJK6,2

$OWHUQDWLYH±3URSRVHG$FWLRQ

&RQVWUXFWLRQRIWKHSURSRVHGKXWDQGDVVRFLDWHGWUDLOVZRXOGUHTXLUHPLQLPDOWUHHUHPRYDO DSSUR[LPDWHO\ DFUH GXHLQSDUWWRWKHVSDUVHO\YHJHWDWHGQDWXUHRIWKHKXWORFDWLRQDQGDOVREHFDXVHRIWKHVPDOO IRRWSULQWRIWKHSURSRVHGKXW7KHSURSRVHGKXWORFDWLRQLVHQWLUHO\RQ1)6ODQGV7KHSURSRVHG$79DQG DFFHVVWUDLOVZRXOGEHFRQVWUXFWHGRQDPL[RIWRZQFRXQW\SULYDWHDQG1)6ODQGV

7KHSURSRVHGKXWORFDWLRQLVRQWKHHDVWHUQVLGHRIDURFN\RXWFURSSLQJWKDWZRXOGSURYLGHDYLVXDOEDUULHU RIWKHKXWIURPWKHZHVWZKHUHWKHPDMRULW\RIUHFUHDWLRQDODFWLYLWLHVLQWKHDUHDRFFXU7KHVXUURXQGLQJ IRUHVWDQGURFN\RXWFURSSLQJZRXOGODUJHO\SUHYHQWWKHKXWIURPEHLQJYLVLEOHIURPPRVWORFDWLRQVDORQJ WKHYDOOH\IORRU7KHKXWZRXOGEHYLVLEOHIURPDFURVVWKHYDOOH\²UHIHUWR3KRWR& +XPEXJ+LOO 7KHKXWPD\EHSDUWLDOO\YLVLEOHIURPWKHVXPPLWVRI%DOG0RXQWDLQ0RXQW*X\RWRUDUHDVQRUWKHDVWRI

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-31 95 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV &6FHQHU\

WKHKXW DFURVV)UHQFK*XOFK EXWLWLVXQOLNHO\WKDWWKHKXWZRXOGEHQRWLFHDEOHRUYLVLEOHIURPWKHVH ORFDWLRQVGXHWRWKHIRUHVWVXUURXQGLQJWKHKXW7KHKXWZRXOGQRWEHYLVLEOHIURPWKH7RZQRI %UHFNHQULGJH%UHFNHQULGJH6NL5HVRUWRUWKHRWKHUUHFUHDWLRQWUDLOVLQWKH6DOOLH%DUEHU5RDGDUHD7KH $79DFFHVVWUDLOVZRXOGQRWEHH[SHFWHGWREHYLVLEOHGXHWRWKHLUPLQLPDOZLGWKDQGWKLFNQHVVRIWKH IRUHVWFDQRS\

7KHFRQVWUXFWLRQRIDQ$79DFFHVVWUDLODQGDVNLVQRZVKRHWUDLOWRWKH:HEHU*XOFKEDFNFRXQWU\KXW ZRXOGUHTXLUHPLQRUWUHHDQGYHJHWDWLRQUHPRYDO$OWKRXJKDGHVLJQFULWHULDKDVEHHQLQFOXGHGLQWKH 3URSRVHG$FWLRQWKDWUHTXLUHVSUHSDUDWLRQRIDYHJHWDWLRQPDQDJHPHQWSODQIRUFRQVWUXFWLRQRIQHZWUDLOV WKHVXUURXQGLQJIRUHVWFDQRS\LVDQWLFLSDWHGWRFRPSOHWHO\PDVNWKHYLVLELOLW\RIWKHVHSURSRVHGDFFHVV URXWHVZLWKLQWKH$QDO\VLV$UHD$SSUR[LPDWHO\IHHWRIQHZWUDLOLVSURSRVHGWREHFRQVWUXFWHG EHWZHHQ1LJKWPDUHRQ%DOG\DQGWKHQHZKXW SURSRVHGWUDLOVVHJPHQWV³&´DQG³(´RQ)LJXUH $SSUR[LPDWHO\IHHWRIQHZWUDLOVZRXOGEHGHYHORSHGRQSULYDWHODQGVRUFRXQW\WRZQ2SHQ6SDFH ODQGV7KHUHPDLQLQJIHHWRIQHZWUDLOVZRXOGEHFRQVWUXFWHGRQ1)6ODQGVLQFOXGLQJDFFHVVIRU $79V IRUDGPLQLVWUDWLYHXVHRQO\ *URXQGYHJHWDWLRQGLVWXUEDQFHDVVRFLDWHGZLWKWUDLOFRQVWUXFWLRQ ZRXOGWRWDODSSUR[LPDWHO\DFUH7KHSURSRVHGDFFHVVWUDLOVZRXOGEHFRQVWUXFWHGLQUHODWLYHO\GHQVH IRUHVWDQGEHFDXVHLWLVWKH:51)¶V6+$¶VLQWHQWWRUHWDLQDVPDQ\JUHHQWUHHVDORQJWKHVHURXWHVDV SRVVLEOHVFHQLFLPSDFWVDUHDQWLFLSDWHGWREHPLQLPDO

7KHH[WHQVLRQRIWKHWUDLOQHWZRUNWRWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWLVDQWLFLSDWHGWREH FRQVLVWHQWZLWKWKH)RUHVW6HUYLFHUHJXODWLRQVIRUVFHQHU\PDQDJHPHQWZLWKLQ0DQDJHPHQW$UHD,Q DGGLWLRQWKHKXWZRXOGQHHGWREHGHVLJQHGFRQVWUXFWHGWRPHHW%(,*UHTXLUHPHQWVIRUWKH5RFN\ 0RXQWDLQ3URYLQFH

&808/$7,9(())(&76

1RSDVWSUHVHQWRUUHDVRQDEO\IRUHVHHDEOHIXWXUHSURMHFWVKDYHEHHQLGHQWLILHGWKDWZKHQFRPELQHGZLWK WKH3URSRVHG$FWLRQZRXOGDIIHFWVFHQHU\UHVRXUFHVWRWKHH[WHQWRIQRWPHHWLQJWKH6,2VLQWKH3URMHFW $UHD

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-32 96 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV '&XOWXUDO5HVRXUFHV

' &8/785$/5(6285&(6

6&23(2)$1$/<6,6

6HFWLRQRIWKH1DWLRQDO+LVWRULF3UHVHUYDWLRQ$FW 1+3$ UHTXLUHVWKDWIHGHUDODJHQFLHVWDNHLQWR DFFRXQWWKHHIIHFWVRIDIHGHUDOXQGHUWDNLQJRQDQ\FXOWXUDOUHVRXUFHWKDWLVLQFOXGHGLQRUHOLJLEOHIRU LQFOXVLRQLQWKH1DWLRQDO5HJLVWHURI+LVWRULF3ODFHV 15+3 &XOWXUDOUHVRXUFHVPD\UHIHUWRVLWHVDUHDV EXLOGLQJVVWUXFWXUHVGLVWULFWVDQGREMHFWVZKLFKSRVVHVVVFLHQWLILFKLVWRULFDQGRUVRFLDOYDOXHVRID FXOWXUDOJURXSRUJURXSVDVVSHFLILHGE\&)5

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

7RSRJUDSKLFDOO\WKHVRPHZKDWUXJJHGQDWXUHRIWKH3URMHFW$UHDSURYLGHVRQO\OLPLWHGDUHDVVXLWDEOHIRU SUHKLVWRULFFXOWXUDOVLWHV%HFDXVHRIWKLVH[SHFWDWLRQVIRUWKHGLVFRYHU\RISUHKLVWRULFFXOWXUDOPDWHULDOV ZHUHORZ

+RZHYHUKLVWRULFPLQLQJUHODWHGVLWHVZHUHH[SHFWHGWREHQXPHURXV+LVWRULFDOO\WKH3URMHFW$UHDZDV XVHGKHDYLO\IRUKDUGURFNDQGSODFHUPLQLQJRIJROGVLOYHUDQG]LQF7KH3URMHFW$UHDLVULFKLQQDWXUDO UHVRXUFHVWKDWZRXOGKDYHEHHQDWWUDFWLYHWRWKH1DWLYH$PHULFDQLQKDELWDQWVGXULQJSUHKLVWRU\IRU VHDVRQDORULQWHUPLWWHQWXVH

&)56HFWLRQ

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-33 97 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV '&XOWXUDO5HVRXUFHV

$IXOOUHSRUWRI0$&¶VILQGLQJVLQFRQWDLQHGLQWKHSURMHFWILOH7KHIROORZLQJLQIRUPDWLRQLVDVXPPDU\ RIWKDWUHSRUW

$))(&7('(19,5210(17

0$&FRQGXFWHGILOHVVHDUFKHVRIWKH2IILFHRI$UFKDHRORJ\DQG+LVWRULF3UHVHUYDWLRQRQOLQHGDWDEDVH SULRUWRILHOGZRUNLQ6HSWHPEHURI,QWKH3URMHFW$UHDILYHSUHYLRXVLQYHQWRULHVKDYHRFFXUUHG ZLWKLQRURYHUODSSLQJLWVERXQGDULHV7KHVHSUHYLRXVLQYHQWRULHVDUHIRUWKHPRVWSDUWVPDOOEORFNDUHDV DQGOLQHDUVXUYH\VFRQGXFWHGIRU)RUHVW6HUYLFHODQGH[FKDQJHVIRUHVWWUHDWPHQWDQGWRGRFXPHQW KLVWRULFPLQLQJUHVRXUFHV

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-34 98 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV '&XOWXUDO5HVRXUFHV

7DEOH' 3UHYLRXVO\5HFRUGHG$UFKDHRORJLFDO6LWHV1HDUWKH3URMHFW$UHD 6LWH1DPH 5HVRXUFH&ODVV 5HVRXUFH7\SH 15+3(OLJLELOLW\ 'DWH5HFRUGHG *ROGHQ(GJH0LQHDQG0LOO +LVWRULF 0LQLQJ&RPSOH[ 1RW(OLJLEOH ILHOG 7RPP\0LQH +LVWRULF 0LQH 1RW(OLJLEOH ILHOG &DUERQDWH0LQH +LVWRULF 0LQH&RPSOH[ (OLJLEOH ILHOG +LVWRULF2YHUYLHZ

7KHKLVWRULFSHULRGLQ%UHFNHQULGJHEHJLQVLQZLWKWKHGLVFRYHU\RIJROGLQWKH%OXH5LYHU 9DOOH\%UHFNHQULGJHVRRQEHFDPHWKHILUVWWRZQHVWDEOLVKHGRQ&RORUDGR¶VZHVWHUQVORSH$QHVWLPDWHG PLQHUVIORFNHGWRWKHDUHDEXWDVZLIWGHFOLQHLQSURILWVPHDQWWKDWE\RQO\WRKRPHV UHPDLQHGRFFXSLHGLQ%UHFNHQULGJH

$OWKRXJKVLOYHUGLVFRYHULHVNHSWWKHPLQLQJERRPJRLQJLQRWKHUSDUWVRI6XPPLW&RXQW\WKHOXOOLQJROG PLQLQJDFWLYLWLHVDQGDVHULHVRIILUHVKLQGHUHGWKHJURZWKRIWKH%UHFNHQULGJHDUHD,WZDVQRWXQWLOULFK JROGORGHGHSRVLWVZHUHGLVFRYHUHGLQWKHDUHDLQWKDWWKH\RXQJWRZQVKLS¶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

7KH3URMHFW$UHD¶VPLQHFRPSOH[HVZHUHWKHUHVXOWRIDVPDOOPLQHUDOPLQLQJUXVKWKDWRFFXUUHGRQ%DOG 0RXQWDLQLQWKHV7KLVUXVKZDVORFDOL]HGDQGVKRUWOLYHGEXWUHVXOWHGLQVPDOOVFDOHPLQH GHYHORSPHQWDQGDQLQIOX[RIWHPSRUDU\UHVLGHQWVWRWKHDUHDZKROLNHO\XWLOL]HGWKHIDFLOLWLHVLQ/LQFROQ

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

7KHRWKHUVLWHLVWKH*ROGHQ(GJH0LQHDQG0LOO,QDPLQLQJFRPSDQ\GURYHH[SORUDWRU\ZRUNLQJV LQFOXGLQJDWXQQHODQGVKDIWDWWKHVLWHDQGEXLOWDPLOOGRZQVORSH7KHFRPSDQ\TXLWZRUNLQGXHWR XQSURILWDEOHRUH2YHUWKHQH[W\HDUVWKHPLQHFKDQJHGRZQHUVKLSVHYHUDOWLPHVRSHUDWHGEULHIO\LQ 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-35 99 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV '&XOWXUDO5HVRXUFHV

DQGWKHQZDVSHUPDQHQWO\DEDQGRQHG7KHVLWHFRQVLVWVRIWKHFROODSVHGUHPQDQWVRIWKHPLOO LQFOXGLQJDWRSSOHGVWDPSEDWWHU\IUDPHVHYHUDOSODWIRUPVLQFOXGLQJDQHQJLQHURRPDQGRUHELQ IRXQGDWLRQWKHUHPDLQVRIWKUHHFDELQVDFRUUDODQGDUHIXVHVFDWWHU

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

,QYHQWRU\5HVXOWV

'XULQJWKLVLQYHQWRU\0$&UHFRUGHGRUXSGDWHGDWRWDORIHLJKWVLWHV7DEOH'GHWDLOVWKHSUHYLRXVO\ UHFRUGHGVLWHVXSGDWHGGXULQJWKLVSURMHFWDQG7DEOH'OLVWVWKHQHZO\GRFXPHQWHGVLWHV,QYHQWRU\ UHVXOWHGLQGLVFRYHU\DQGGRFXPHQWDWLRQRIVL[QHZVLWHVDQGXSGDWHVRIWZRSUHYLRXVO\UHFRUGHGVLWHV$OO RIWKHVLWHVDUHKLVWRULFDQGZLWKWKHH[FHSWLRQRI/LQFROQ7RZQVLWHDOODUHUHFRPPHQGHGDVQRWHOLJLEOH IRUWKH15+3

7DEOH' 3UHYLRXVO\5HFRUGHG6LWHV8SGDWHGE\0$& 6LWH7\SH 15+3(OLJLELOLW\ +LVWRULF/LQFROQ7RZQVLWH (OLJLEOH 2IILFLDO +LVWRULF*ROG%HOOH0LQH 1RW(OLJLEOH )LHOG +LVWRULF*ROG(GJH0LQHDQG0LOO 1RW(OLJLEOH )LHOG 7DEOH' 1HZO\5HFRUGHG6LWHV 6LWH7\SH 15+3(OLJLELOLW\ +LVWRULF3URVSHFW3LWV 1RW(OLJLEOH +LVWRULF0LQH&RPSOH[ 1RW(OLJLEOH +LVWRULF3URVSHFW3LWV 1RW(OLJLEOH +LVWRULF0LQH&RPSOH[ 1RW(OLJLEOH +LVWRULF3URVSHFW3LWV 1RW(OLJLEOH +LVWRULF,VRODWHG0LQH)HDWXUHV 1RW(OLJLEOH

7KH/LQFROQ7RZQVLWHKDVEHHQRIILFLDOO\UHFRPPHQGHGDV15+3HOLJLEOH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-36 100 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV '&XOWXUDO5HVRXUFHV

3UHYLRXVO\UHFRUGHGDQGQHZO\UHFRUGHGQRWHOLJLEOHVLWHVDUHQRWGLVFXVVHGIXUWKHULQWKLVGRFXPHQW WKH UHDGHULVUHIHUUHGWRWKH3URMHFW)LOHIRUGHWDLOHGLQIRUPDWLRQ

)RXULVRODWHGILQGVZHUHGRFXPHQWHGGXULQJWKHFXUUHQWLQYHQWRU\DOORIZKLFKDUHKLVWRULF$OORIWKH LVRODWHGILQGVDUHUHFRPPHQGHGDVQRWHOLJLEOHIRULQFOXVLRQRQWKH15+3

',5(&7$1',1',5(&7(19,5210(17$/&216(48(1&(6 $OWHUQDWLYH±1R$FWLRQ

8QGHUWKH1R$FWLRQ$OWHUQDWLYHQHLWKHUWKH:HEHU*XOFKEDFNFRXQWU\KXWQRUDVVRFLDWHGSDUNLQJRU DFFHVVWUDLOVZRXOGRFFXULQWKH3URMHFW$UHD%HFDXVHQRJURXQGGLVWXUEDQFHLVSURSRVHGXQGHUWKH1R $FWLRQ$OWHUQDWLYHWKHUHLVQRSRWHQWLDOWRDIIHFWWKHKLVWRULFVLWHVVXUYH\HGZLWKLQWKH$3(

$OWHUQDWLYH±3URSRVHG$FWLRQ

7ZHQW\WZRFXOWXUDOUHVRXUFHVDUHNQRZQWREHZLWKLQDPLOHRIWKH3URMHFW$UHDDOOUHODWHGWRPLQLQJ 7KH6DOO\%DUEHU0LQHWKH/LQFROQ7RZQVLWHWKH&RUSRUDO0LQHDQGWKH&DUERQDWH0LQHDUHWKHRQO\ UHVRXUFHVWKDWDUH15+3HOLJLEOH UHIHUWR7DEOH' $OORWKHUUHVRXUFHVDUHIRXQGQRWHOLJLEOHEDVHG RQILHOGVWXGLHV

6L[QHZKLVWRULFVLWHVZHUHGRFXPHQWHGDQGWZRSUHYLRXVO\UHFRUGHGVLWHVZHUHUHYLVLWHGIRUWKHFXUUHQW LQYHQWRU\6HYHQRIWKHVHVLWHVDUHUHFRPPHQGHGLQHOLJLEOHWRWKH15+3DQGQRIXUWKHUZRUNLV UHFRPPHQGHGIRUWKHP

2QHSUHYLRXVO\UHFRUGHGVLWH²WKHKLVWRULF/LQFROQ7RZQVLWH²KDVEHHQRIILFLDOO\UHFRPPHQGHG15+3 HOLJLEOHXQGHU&ULWHULRQ$&DQG'/LQFROQZDVGLUHFWO\DVVRFLDWHGZLWKWUHQGVWKDWZHUHLPSRUWDQWRQ DORFDOOHYHOLQWKHODWHVDQGHDUO\VVXFKDVPLQLQJDQGFRPPXQLW\SODQQLQJDQGGHYHORSPHQW )XUWKHUPRUHLWLVDVRXQGH[DPSOHRIDVPDOOUHPRWHPLQLQJFDPSRIWKH5RFN\0RXQWDLQVGXULQJWKH WXUQRIWKHWZHQWLHWKFHQWXU\7KHVLWH¶VPDWHULDOUHPDLQVLOOXVWUDWHWKHGHPRJUDSK\DQGOLIHVW\OHRIPLQH UHVLGHQWVDQGWKHUHPDLQLQJWZRVWDQGLQJVWUXFWXUHVDUHDJRRGH[DPSOHRIWKDWSHULRG¶VYHUQDFXODU DUFKLWHFWXUH

:KLOHWKH/LQFROQ7RZQVLWHERXQGDU\VOLJKWO\RYHUODSVWKHSURSRVHGSDUNLQJDUHDIRUWKH:HEHU*XOFK EDFNFRXQWU\KXW0$&UHFRPPHQGVWKDWWKHSRUWLRQRIWKHVLWHZLWKLQWKHSURSRVHGSDUNLQJGRHVQRW FRQWULEXWHWRWKHTXDOLWLHVWKDWFDXVHWKHVLWHWREHHOLJLEOH1RQHRIWKHSUHYLRXVO\UHFRUGHGVLWHIHDWXUHV DUHORFDWHGLQWKLVSDUWRIWKHVLWHDOORIWKHH[LVWLQJEXLOGLQJVIRXQGDWLRQVDQGPLQHUHPQDQWVDVVRFLDWHG ZLWK/LQFROQ¶VEXVLQHVVGLVWULFWDUHORFDWHGIXUWKHUWRWKHZHVW7KHFORVHVWVLWHIHDWXUHWRWKHSURSRVHG SDUNLQJORWLVDJUDYHORFDWHGWRWKHHDVWDQGRXWVLGHRIWKH$3(7KHJUDYHZRXOGQRWEHLPSDFWHGE\ $VVRFLDWHGZLWKNQRZQHYHQWVRUSHRSOHVLJQLILFDQWWRORFDORUUHJLRQDOKLVWRU\DQGH[KLELWHVVHQWLDOLQWHJULW\RU WKHSRWHQWLDOWR\LHOGDGGLWLRQDOLQIRUPDWLRQLPSRUWDQWWRUHJLRQDOKLVWRU\

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-37 101 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV '&XOWXUDO5HVRXUFHV

FRQVWUXFWLRQRIWKHSURSRVHGSDUNLQJORW:LWKLQWKHSURSRVHGSDUNLQJDUHDWKHRQO\LGHQWLILHGIHDWXUHV ZHUHWKUHHPLQLQJSURVSHFWSLWVZKLFKOLNHO\SRVWGDWHWKHUHVWRIWKH/LQFROQWRZQVLWH)XUWKHUPRUHWKH SDUNLQJDUHDFRQVLVWVRIDQH[LVWLQJFOHDULQJWKDWZRXOGEHPLQLPDOO\XSJUDGHGDQGQRGLUHFWLPSDFWVWR WKH/LQFROQ7RZQVLWHDUHDQWLFLSDWHG

&808/$7,9(())(&76

1RHIIHFWVWR1+53HOLJLEOHFXOWXUDOUHVRXUFHVZHUHLGHQWLILHGZLWKLQWKH$3(UHODWHGWRWKH3URSRVHG $FWLRQWKHUHIRUHE\GHILQLWLRQQRFXPXODWLYHHIIHFWVZRXOGRFFXURUUHTXLUHIXUWKHUDQDO\VLV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-38 102 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

( :,/'/,)(

6&23(2)$1$/<6,6

7KLVVHFWLRQSURYLGHVDJHQHUDOGLVFXVVLRQRIFRPPRQWHUUHVWULDODQGDTXDWLFZLOGOLIHVSHFLHVNQRZQWR RFFXURQ1)6ODQGVLQDQGQHDUWKH3URMHFW$UHD7KH3URMHFW$UHDLVORFDWHGRQWKHQRUWKDQG QRUWKZHVWHUQVORSHVRIWKHULGJHH[WHQGLQJQRUWKRII%DOG0RXQWDLQ IHHW (OHYDWLRQVDVVRFLDWHG ZLWK3URMHFW$UHDGLVWXUEDQFHDUHDVUDQJHIURPDSSUR[LPDWHO\IHHWDWWKHSURSRVHGSDUNLQJDUHDRQ )UHQFK*XOFK5RDGWRIHHWDWWKHSURSRVHG:HEHU*XOFK%DFNFRXQWU\+XWVLWH

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

7KHIROORZLQJDQDO\VLVLVDVXPPDU\RIWKH%$%(DQG0,6UHSRUWWKDWDUHFRQWDLQHGLQWKHSURMHFWILOH $GGLWLRQDOLQIRUPDWLRQFDQEHREWDLQHGE\UHYLHZLQJWKHODUJHUGRFXPHQWDWLRQWKHUH$OOUHIHUHQFHVDUH FRQWDLQHGWKHUHLQ

$))(&7('(19,5210(17 7KUHDWHQHG(QGDQJHUHGDQG3URSRVHG6SHFLHV

$ZLOGOLIHVSHFLHVWKDWLVOLVWHGDVHQGDQJHUHGXQGHUWKH(QGDQJHUHG6SHFLHV$FW (6$ LVLQGDQJHURI H[WLQFWLRQWKURXJKRXWDOORUDVLJQLILFDQWSRUWLRQRILWVUDQJH$ZLOGOLIHVSHFLHVOLVWHGDVWKUHDWHQHGXQGHU (6$LVRQHWKDWLVOLNHO\WREHFRPHDQHQGDQJHUHGVSHFLHVZLWKLQWKHIRUHVHHDEOHIXWXUHWKURXJKRXWDOORU SDUWRILWVUDQJH

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-39 103 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

VSHFLHV¶UDQJHRUGRHVQRWFRQWDLQRFFXSLHGKDELWDWDQGRUWKHPDQDJHPHQWGHFLVLRQVDVVRFLDWHGZLWKWKH 3URSRVHG$FWLRQZRXOGKDYH³QRHIIHFW´RQWKHVSHFLHVRQWKHLUKDELWDWVRURQGHVLJQDWHGFULWLFDOKDELWDW

7DEOH( )HGHUDOO\/LVWHGDQG3URSRVHG$QLPDO6SHFLHV3RWHQWLDOO\$IIHFWHG 5DWLRQDOHIRU2FFXUUHQFHD &RPPRQQDPH6FLHQWLILF1DPH 6WDWXV +DELWDW 1RVXLWDEOHKDELWDW DOSLQHVQRZZLOORZVWDQGV!IW 8QFRPSDKJUHIULWLOODU\EXWWHUIO\ ( RQSHDNVIW 3URMHFWIDURXWVLGHVSHFLHV¶ %RORULDDFURFQHPD GLVWULEXWLRQ +XPSEDFNFKXE 3RWHQWLDOO\DIIHFWHGE\&RORUDGR5LYHUZDWHUGHSOHWLRQV ( *LODF\SKD IDUGRZQVWUHDPLQ&RORUDGR5LYHU %RQ\WDLOFKXE 3RWHQWLDOO\DIIHFWHGE\&RORUDGR5LYHUZDWHUGHSOHWLRQV ( *HOHJDQV IDUGRZQVWUHDPLQ&RORUDGR5LYHU &RORUDGRSLNHPLQQRZ 3RWHQWLDOO\DIIHFWHGE\&RORUDGR5LYHUZDWHUGHSOHWLRQV ( 3W\FKRFKHLOXVOXFLXV IDUGRZQVWUHDPLQ&RORUDGR5LYHU 5D]RUEDFNVXFNHU 3RWHQWLDOO\DIIHFWHGE\&RORUDGR5LYHUZDWHUGHSOHWLRQV ( ;\UDXFKHQWH[DQXV IDUGRZQVWUHDPLQ&RORUDGR5LYHU *UHHQEDFNFXWWKURDWWURXW 1RWSDUWRIKLVWRULFUDQJHQRRFFXSLHGRUSRWHQWLDOKDELWDW 7 2QFRUK\QFKXVFODUNLLVWRPLDV SUHVHQW LVRODWHGPRXQWDLQVWUHDPKHDGZDWHUV 1RUWK$PHULFDQZROYHULQH +LVWRULFUDQJH UHPRWHPRXQWDLQVDQGDOSLQHDUHDV .QRZQ 3 *XORJXOROXVFXV LQGLYLGXDOWKDWXVHVSRUWLRQVRIWKHDFWLRQDUHD &DQDGDO\Q[ 3UHVHQWLQDQDO\VLVSRWHQWLDOIRUDJLQJGHQQLQJDQGWUDYHO 7 /\Q[FDQDGHQVLV KDELWDW PRQWDQHDQGVXEDOSLQHIRUHVWV

)HGHUDOVWDWXVOLVWHGDIWHUVSHFLHVLVDVIROORZV( (QGDQJHUHG7 7KUHDWHQHG3 3URSRVHG 6RXUFH7KRPSVRQD

2IWKHVHVSHFLHVRQO\&DQDGDO\Q[ZDVFDUULHGIRUZDUGIRUGHWDLOHGDQDO\VLVLQWKH%$

&DQDGD/\Q[ &DQDGDO\Q[LQWKHFRQWLJXRXV8QLWHG6WDWHVZDVOLVWHGDVWKUHDWHQHGHIIHFWLYH$SULO7KH &DQDGDO\Q[KDVEHHQFODVVLILHGE\WKH6WDWHRI&RORUDGRDVD6WDWHHQGDQJHUHGVSHFLHVVLQFH2Q 6HSWHPEHUWKH&'2:DQQRXQFHGWKDWWKHO\Q[UHLQWURGXFWLRQSURMHFWKDGVXFFHVVIXOO\ DFFRPSOLVKHGLWVJRDORIHVWDEOLVKLQJDEUHHGLQJSRSXODWLRQLQWKH6RXWKHUQ5RFNLHV

7KH6RXWKHUQ5RFNLHV(FRV\VWHPUHSUHVHQWVWKHH[WUHPHVRXWKHUQHGJHRIWKHUDQJHRIO\Q[LQ1RUWK $PHULFD&DQDGDO\Q[RFFXUSULPDULO\LQVSUXFHILUDQGORGJHSROHSLQHIRUHVWVDWHOHYDWLRQVEHWZHHQ DQGIHHW2QDODQGVFDSHVFDOH&DQDGDO\Q[KDELWDWLQFOXGHVDPRVDLFRIHDUO\VHUDOVWDJHV WKDWVXSSRUWVQRZVKRHKDUHSRSXODWLRQVDQGODWHVHUDOVWDJHVRIGHQVHROGJURZWKIRUHVWWKDWSURYLGHKLJK TXDOLW\GHQQLQJDQGVHFXULW\KDELWDW

8VLQJWRGDWDIURPWKHO\Q[UHLQWURGXFWLRQ7KHREDOGDQG6KHQN GHYHORSHGO\Q[XVH PDSVIRUWKH6RXWKHUQ5RFNLHV(FRV\VWHP7KHPDSVGLVSOD\HGDUHDVWKDWO\Q[KDYHXVHGWKHPRVWRYHU 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-40 104 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

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

/\Q[$QDO\VLV8QLWV 7KH&DQDGD/\Q[&RQVHUYDWLRQ$VVHVVPHQWDQG6WUDWHJ\ /&$6 LQGLFDWHGWKDWSURMHFWSODQQLQJVKRXOG HYDOXDWHWKHHIIHFWVWRO\Q[KDELWDWZLWKLQGHVLJQDWHG/\Q[$QDO\VLV8QLWV /$8 H[FHHGLQJDFUHV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-41 105 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

LQWKHVRXWKHUQ5RFN\0RXQWDLQ*HRJUDSKLF$UHD/$8VDUHLQWHQGHGWRSURYLGHWKHVPDOOHVWVFDOHDW ZKLFKWKHHIIHFWVRIPDQDJHPHQWDFWLRQVRQO\Q[KDELWDWDUHTXDQWLWDWLYHO\HYDOXDWHG/$8VGRQRW UHSUHVHQWDFWXDOO\Q[KRPHUDQJHVEXWWKHLUVFDOHVKRXOGDSSUR[LPDWHWKHVL]HRIDQDUHDXVHGE\DQ LQGLYLGXDOO\Q[7KHWZR/$8VFRQVLGHUHGLQWKLVDQDO\VLVWKH6ZDQDQG6QDNH5LYHU/$8V

/\Q[/LQNDJHV 7KH)RUHVW3ODQLGHQWLILHG³)RUHVWHG/DQGVFDSH/LQNDJHV´ 0DQDJHPHQW$UHDRQWKH:51) WR EHPDQDJHGDVNH\ODQGVFDSHOLQNDJHVSURYLGLQJDUHDVIRUODQGVFDSHVFDOHPRYHPHQWPLJUDWLRQDQG GLVSHUVDORIIRUHVWFDUQLYRUHVDQGRWKHUZLGHUDQJLQJZLOGOLIHVSHFLHV7KHVHDUHDVSURYLGHVDIHWUDYHO FRQQHFWLRQVEHWZHHQODUJHEORFNVRIIRUHVWHGODQGVFDSHVDFURVVWKHIRUHVW7KH\SURYLGHVHFXULW\IURP LQWHQVLYHUHFUHDWLRQDODQGRWKHUKXPDQGLVWXUEDQFHV

0RUHUHFHQWO\WKH6RXWKHUQ5RFNLHV/\Q[$PHQGPHQWLGHQWLILHG³O\Q[OLQNDJHDUHDV´7KHJRDORI OLQNDJHDUHDVLVWRHQVXUHSRSXODWLRQYLDELOLW\WKURXJKSRSXODWLRQFRQQHFWLYLW\/LQNDJHDUHDVDUHDUHDVRI PRYHPHQWRSSRUWXQLWLHVEHWZHHQKDELWDWEORFNVWKDWPD\EHVHSDUDWHGE\LQWHUYHQLQJDUHDVRI³QRQ KDELWDW´VXFKDVEDVLQVYDOOH\VDJULFXOWXUDOODQGVRUZKHUHO\Q[KDELWDWQDWXUDOO\QDUURZVEHWZHHQ EORFNV7KH\H[LVWRQWKHODQGVFDSHDQGFDQEHPDLQWDLQHGGHJUDGHGRUVHYHUHGE\PDQDJHPHQW DFWLYLWLHVDQGKXPDQLQIUDVWUXFWXUHVXFKDVKLJKXVHKLJKZD\VVXEGLYLVLRQVRURWKHUGHYHORSPHQWV7KH 65/$GRHVQRWFRQVLGHUO\Q[OLQNDJHVWREH³FRUULGRUV´ ZKLFKLPSO\RQO\WUDYHOURXWHV EXWEURDGDUHDV RIKDELWDWZKHUHDQLPDOVFDQILQGIRRGVKHOWHUDQGVHFXULW\WKDWDOVRSURYLGHFRQQHFWLYLW\EHWZHHQODUJHU KDELWDWEORFNV+RZHYHUFKDUDFWHULVWLFVRIVRPHRIWKHOLQNDJHVFRQVLGHUHGKHUHLQDUHODUJHO\OLPLWHGWR KLJKZD\FURVVLQJORFDWLRQV6XFKOLQNDJHV]RQHVZRXOGEHH[SHFWHGWRVXSSRUWJUHDWHUXVHE\WUDQVLHQWRU QRPDGLFLQGLYLGXDOV/LQNDJHVDUHDOVRLPSRUWDQWIRUPDLQWDLQLQJJHQHWLFGLYHUVLW\WKURXJKRXWWKH 6RXWKHUQ5RFNLHVSRSXODWLRQ

7ZRO\Q[OLQNDJHVPDSSHGZLWKLQWKH6RXWKHUQ5RFNLHV*HRJUDSKLF$UHD+HUPDQ*XOFKDQG/RYHODQG 3DVVDUHELVHFWHGE\KLJKVSHHGKLJKZD\VWKDWZRXOGVHDVRQDOO\FRQWDLQWUDIILFDVVRFLDWHGZLWKWKHKXW

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

7KH)RUHVW6HUYLFHLGHQWLILHGWKH/RYHODQG3DVV/\Q[/LQNDJH$UHD DFUHVVTXDUHPLOHV WR SURYLGHIRUQRUWKVRXWKPRYHPHQWVQHDUDQGDFURVV,DWWKH&RQWLQHQWDO'LYLGH3HUX&UHHN/RYHODQG 3DVV/DVNH\*XOFKDQG-RQHV*XOFK,WLQFOXGHVSRUWLRQVRIWKH:51)DQGWKH$UDSDKRH5RRVHYHOW 1DWLRQDO)RUHVW6RPHSRUWLRQVRIWKHOLQNDJHDUHKLJKO\GHYHORSHGZLWK,VNLDUHDV $%DVLQ

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-42 106 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

/RYHODQGDQG.H\VWRQH DQGDWRZQ .H\VWRQH 3RUWLRQVRIWKLVOLQNDJHDUHELVHFWHGE\,HDVWDQG ZHVWRIWKH(LVHQKRZHU-RKQVRQ7XQQHOVXQGHUWKH&RQWLQHQWDO'LYLGHDQGE\86+LJKZD\RYHUWKH &RQWLQHQWDO'LYLGHDW/RYHODQG3DVV7KLVOLQNDJHLVFRQVLGHUHGEHFDXVHVRPHWUDIILFDVVRFLDWHGZLWKWKH SURSRVHG:HEHU*XOFK%DFNFRXQWU\+XWZRXOGWUDYHOWKURXJKWKLVOLQNDJHEHWZHHQWKHKXWDQG'HQYHU +LJKZD\RYHU/RYHODQG3DVVLVIUHTXHQWO\FORVHGIRUKRXUVWRGD\VLQZLQWHUEHFDXVHRIVQRZIDOO

6RPHSURSRVHG:HEHU*XOFK%DFNFRXQWU\+XWJXHVWVPD\DOVRWUDYHOWKURXJKRWKHUO\Q[OLQNDJHV HJ 2IILFHU¶V*XOFK9DLO3DVVHWF +RZHYHUWKHSRWHQWLDODGYHUVHHIIHFWVWRO\Q[IURPWKHVPDOOSURSRUWLRQ RISURSRVHG:HEHU*XOFK%DFNFRXQWU\+XWUHODWHGWUDIILFWREDVHOLQHWUDIILFYROXPHVLQWKRVHDUHDVZRXOG EHPLQRUDQGGLVFRXQWDEOHVRWKH\DUHQRWFRQVLGHUHGLQGHWDLOKHUHLQ

5HJLRQ6HQVLWLYH6SHFLHV

6HQVLWLYHVSHFLHVDUHWKRVHWKDWQHHGVSHFLDOPDQDJHPHQWWRPDLQWDLQDQGLPSURYHWKHLUVWDWXVRQ1DWLRQDO )RUHVWVDQG*UDVVODQGVDQGSUHYHQWDQHHGWROLVWWKHPXQGHUWKH(6$

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¶UDQJHRUHOHYDWLRQDOGLVWULEXWLRQDQGWKH3URSRVHG$FWLRQZRXOGKDYHQR LPSDFWRQWKRVHVSHFLHV

7DEOH( 5HJLRQ6HQVLWLYH$QLPDO6SHFLHVWKDW2FFXURQWKH:51) DQGWKHLU3RWHQWLDO2FFXUUHQFHLQWKH3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW3URMHFW$UHD &RPPRQQDPH6FLHQWLILFQDPH 5DWLRQDOHIRU3RWHQWLDO3URMHFW(IIHFWV +DELWDW$IILQLW\ INSECTS *UHDW%DVLQVLOYHUVSRW 1RKDELWDW :HWODQGVVXSSRUWLQJYLROHWSRSXODWLRQV 6SH\HULDQRNRPLVQRNRPLV FISH 5RXQGWDLOFKXE*LODUREXVWDUREXVWD 1RVXLWDEOHKDELWDW &25LYHUXSWKURXJK*OHQZRRG&DQ\RQ 1RVXLWDEOHKDELWDW VPDOOWRPHGLXPVWUHDPVEHORZ¶ 0RXQWDLQVXFNHU&DWRVWRPXVSODW\UK\QFKXV SRSXODWLRQVGRFXPHQWHGRQWKH5LIOHDQG%ODQFR'LVWULFWV %OXHKHDGVXFNHU&DWRVWRPXVGLVFREROXV 1RVXLWDEOHKDELWDW &25LYHUXSWR$ONDOL&UHHN &DQ\RQ )ODQQHOPRXWKVXFNHU&DWRVWRPXVODWLSLQQLV 1RVXLWDEOHKDELWDW &25LYHU ODUJHUWULEV &RORUDGR5LYHUFXWWKURDWWURXW 6XLWDEOHXQRFFXSLHGKDELWDW ,VRODWHGKHDGZDWHUVWUHDPVDQG 2QFRUK\QFKXVFODUNLLSOHXULWLFXV ODNHV AMPHIBIANS 1REUHHGLQJKDELWDW 6XEDOSLQHPDUVKHVDQGZHWPHDGRZV %RUHDOZHVWHUQWRDG$QD[\UXVERUHDVERUHDV SRQGVPDUJLQVRIVWUHDPV¶WR¶ 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-43 107 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

7DEOH( 5HJLRQ6HQVLWLYH$QLPDO6SHFLHVWKDW2FFXURQWKH:51) DQGWKHLU3RWHQWLDO2FFXUUHQFHLQWKH3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW3URMHFW$UHD &RPPRQQDPH6FLHQWLILFQDPH 5DWLRQDOHIRU3RWHQWLDO3URMHFW(IIHFWV +DELWDW$IILQLW\ 1RUWKHUQOHRSDUGIURJ/LWKREDWHVSLSLHQV 1RKDELWDW 3HUPDQHQWZHWODQGV BIRDS 1RUWKHUQJRVKDZN$FFLSLWHUJHQWLOLV 3RWKDELWDW &ORVHGPRQWDQHIRUHVWV!¶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¶ZRRGSHFNHU0HODQHUSHVOHZLV 1RKDELWDW 3RQGHURVDSLQHDQGFRWWRQZRRGV 2OLYHVLGHGIO\FDWFKHU&RQWRSXVFRRSHUL 3RWKDELWDW 2SHQXSSHUHOHYFRQLIHUIRUHVWV /RJJHUKHDGVKULNH/DQLXVOXGRYLFLDQXV 1RKDELWDW 3ODLQVORZYDOOH\VVKUXEODQGV 3XUSOHPDUWLQ3URJQHVXELV 1RKDELWDW 2OGJURZWKDVSHQ %UHZHU¶VVSDUURZ6SL]HOODEUHZHUL 1RKDELWDW 6DJHEUXVKDQGRWKHUVWUXFWXUDOO\VLPLODUVKUXEODQGV 6DJHVSDUURZ$PSKLVSL]DEHOOL 1RKDELWDW /RZHOHYDWLRQELJVDJHEUXVKDQGVDJHJUHDVHZRRG MAMMALS 3\JP\VKUHZ0LFURVRUH[KR\LPRQWDQXV 3RWKDELWDW 9DULHW\RIVXEDOSLQHKDELWDWV )ULQJHGP\RWLV0\RWLVWK\VDQRGHV 1RKDELWDW )RUHVWVZRRGODQGVWR¶XQNQRZQRQ:51) +RDU\EDW/DVLXUXVFLQHUHXV 3RWKDELWDW ,QFOXGLQJPL[HGFRQLIHUDQGORGJHSROHSLQHIRUHVW 6SRWWHGEDW(XGHUPDPDFXODWXP 1RKDELWDW &OLIIVDULGWHUUDLQ 7RZQVHQG¶VELJHDUHGEDW 1RKDELWDW 6WUXFWXUHVWUHHFDYLWLHV ¶ &RU\QRUKLQXVWRZQVHQGLLWRZQVHQGLL $PHULFDQPDUWHQ0DUWHVDPHULFDQD 3UHVHQW &RQLIHUIRUHVWV 1RUWK$PHULFDQZROYHULQH*XORJXOROXVFXV 3RWWUDYHOKDELWDW 0RXQWDLQV 5LYHURWWHU/RQWUDFDQDGHQVLV 1RKDELWDW

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-44 108 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

,QVHFWV 2QHVSHFLHVRI5VHQVLWLYHLQVHFWLVSRWHQWLDOO\SUHVHQWRQWKH:51)7KH*UHDW%DVLQVLOYHUVSRW 6SH\HULDQRNRPLVQRNRPLV GRHVQRWKDYHSRWHQWLDOKDELWDWZLWKLQWKHDUHDRILQIOXHQFHRIWKH3URMHFW $UHDQRUKDYHNQRZQGLVWULEXWLRQVRYHUODSSLQJWKH:51)

)LVK )LYHVSHFLHVRIVHQVLWLYHILVK²URXQGWDLOFKXE *LODUREXVWD PRXQWDLQVXFNHU &DWRVWRPXV SODW\UK\QFKXV EOXHKHDGVXFNHU &DWRVWRPXVGLVFREROXV IODQQHOPRXWKVXFNHU &DWRVWRPXVODWLSLQQLV DQG&RORUDGR5LYHUFXWWKURDWWURXW &5&7 2QFRUK\QFKXVFODUNLLSOHXULWLFXV ²RFFXURQWKH:51) 1RQHRIWKHIRXUIRUPHUVSHFLHVRFFXUZLWKLQ)UHQFK*XOFKRUZLWKLQWKHK\GURORJLFLQIOXHQFHVRIWKH 3URMHFW$UHD

7KH&5&7DQDO\VLVDUHDIRUWKLVSURMHFWH[WHQGVGRZQVWUHDPIURPWKRVHUHDFKHVWKDWFRXOGEHDIIHFWHGE\ WKHSURSRVHGSURMHFWWRDQGLQFOXGLQJWKH%OXH5LYHUXSVWUHDPRI'LOORQ5HVHUYRLU7KHVWUHDPUHDFKHV GUDLQLQJWKH3URMHFW$UHDUHSUHVHQWKLVWRULFDQGSRWHQWLDO&5&7KDELWDW+RZHYHUWKHUHDUHQRVWUHDP UHDFKHVNQRZQWREHRFFXSLHGE\&5&7LQRUGRZQVWUHDPRIWKH3URMHFW$UHDWKDWZRXOGEHLQIOXHQFHG E\WKH3URSRVHG$FWLRQ7KHFXWWKURDWWURXWWKDWDUHLQ)UHQFK&UHHNDUHPRUHFORVHO\DOLJQHGZLWK

$PSKLELDQV5HSWLOHV 7ZRVSHFLHVRIVHQVLWLYHDPSKLELDQV²ERUHDOZHVWHUQWRDG $QD[\UXV>IRUPHUO\%XIR@ERUHDVERUHDV DQG QRUWKHUQOHRSDUGIURJ /LWKREDWHV>IRUPHUO\5DQD@SLSLHQV ²DQGQRVSHFLHVRIVHQVLWLYHUHSWLOHRFFXURQ WKH:51)%RWKDPSKLELDQVDUHGLVFXVVHGEHORZ

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¶VPRXQWDLQV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-45 109 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

DQGZKLOHVXLWDEOHKDELWDWLVVWLOOZLGHVSUHDGWKLVVSHFLHVKDVGHFOLQHGLQUHFHQW\HDUVZLWKFK\WULGIXQJXV %DWUDFKRFK\WULXPGHQGUREDWLGLV³%G´ WKRXJKWWREHWKHSULPDU\DJHQW

7KHUHDUHQLQHNQRZQH[WDQWERUHDOWRDGEUHHGLQJVLWHVRQWKH'5'EXWDOODUHEH\RQGWKHPLOH UDGLXVGLVSHUVDOGLVWDQFH IURPWKHSURSRVHG:HEHU*XOFK%DFNFRXQWU\+XW3URMHFW$UHD WKDWLV FRQVLGHUHGIRUSURMHFWDQDO\VHVRQWKH:51),QERUHDOWRDGVXUYH\VZHUHFRQGXFWHGLQ)UHQFK &UHHNE\)RUHVW6HUYLFHELRORJLVWV1RRFFXSLHGKDELWDWZDVIRXQG

1RUWKHUQ/HRSDUG)URJ 1RUWKHUQOHRSDUGIURJVDUHZLGHVSUHDGDFURVV1RUWK$PHULFDLQKDELWLQJWKHEDQNVDQGVKDOORZSRUWLRQV RIPDUVKHVSRQGVODNHVUHVHUYRLUVEHDYHUSRQGVVWUHDPVDQGRWKHUERGLHVRISHUPDQHQWZDWHU HVSHFLDOO\WKRVHKDYLQJURRWHGDTXDWLFYHJHWDWLRQ$IWHUKLEHUQDWLRQOHRSDUGIURJVEHFRPHDFWLYHLQ$SULO RU0D\

7KHUHDUHQRUHFHQWUHFRUGVRIWKLVIURJ¶VSUHVHQFHLQWKHYLFLQLW\RI:HEHU*XOFKRUWKHVXUURXQGLQJDUHD /HRSDUGIURJVKDYHRQO\EHHQFROOHFWHGRQWKH5LIOHDQG%ODQFR'LVWULFWVRIWKH:51)IDUIURPWKH :HEHU*XOFK3URMHFW$UHD%RUHDOWRDGVXUYH\VFRQGXFWHGLQ)UHQFK&UHHNE\)RUHVW6HUYLFHELRORJLVWV GLGQRWGHWHFWOHRSDUGIURJV7KHQRUWKHUQOHRSDUGIURJDQDO\VLVDUHDIRUWKLVSURMHFWLVWKH6ZDQ5LYHU EDVLQDERYH'LOORQ5HVHUYRLU

%LUGV 6HYHQWHHQVSHFLHVRIVHQVLWLYHELUGVDUHNQRZQRUH[SHFWHGWRRFFXURQWKH:51)7KLUWHHQRIWKRVH VSHFLHVDUHDVVRFLDWHGZLWKKDELWDWVWKDWDUHQRWIRXQGLQWKH3URMHFW$UHD7KRVHKDELWDWVLQFOXGHSODLQV DQGVHPLDULGVKUXEODQGVJUDVVODQGVDJULFXOWXUDOODQGVPDUVKHVFOLIIVRSHQZDWHU LQZLQWHU DQGELJ JDPHZLQWHUUDQJHVORZODQGFRQLIHUDQGULSDULDQFRPSOH[HVVDJHEUXVKDQGPRXQWDLQVKUXEKDELWDWVODWH VXFFHVVLRQDODVSHQIRUHVWDQGZDWHUIDOOV7KHUHPDLQLQJIRXUVSHFLHVDUHDGGUHVVHGLQGLYLGXDOO\EHORZ

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

7KH)RUHVW6HUYLFHPRQLWRUVNQRZQJRVKDZNQHVWVLWHVRQWKH'5'1DWXUDO'LYHUVLW\,QIRUPDWLRQ 6RXUFH 1',6 GDWDLQGLFDWHWKDWJRVKDZNVDUHXQFRPPRQLQ6XPPLW&RXQW\DQGWKDWRQHWRWZR LQGLYLGXDOVFDQEHREVHUYHGGDLO\LQDSSURSULDWHVHDVRQVDQGKDELWDWV7KHJRVKDZNDQDO\VLVDUHDIRUWKLV 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-46 110 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

SURMHFWLVWKHXSSHU6ZDQ5LYHUEDVLQDERYH'LOORQ5HVHUYRLUZKLFKZRXOGLQFOXGHWKHIXUWKHVWH[WHQWRI DQ\QHVWWHUULWRULHVWKDWPLJKWRYHUODSSURSRVHG$OWHUQDWLYHGLVWXUEDQFHDUHDV

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¶VODUJHKXQWLQJUDQJH3ULPDU\SUH\VSHFLHVDEXQGDQFHZLWKLQWKH3URMHFW$UHDDQGWKH ODUJHUVXUURXQGLQJODQGVFDSHLVUHODWLYHO\PRGHUDWH HJVPDOODQGPHGLXPVL]HGELUGVUHGVTXLUUHOV VQRZVKRHKDUHVDQGEOXHJURXVH 7KHUHIRUHKDELWDWVZLWKLQWKH3URMHFW$UHDUHSUHVHQWSRWHQWLDOIRUDJLQJ KDELWDW

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

%RUHDO2ZO %RUHDORZOV $HJROLXVIXQHUHXV DUHUDUHWRORFDOO\XQFRPPRQUHVLGHQWVRI&RORUDGR¶VPRXQWDLQVPDLQO\ DERYHIHHW7KH\LQKDELWPDWXUHDQGODWHVXFFHVVLRQDOVSUXFHILUDQGVSUXFHILUORGJHSROHSLQH IRUHVWVLQWHUVSHUVHGZLWKVPDOOPHDGRZVVWUHDPVDQGZHWODQGV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-47 111 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

7KHERUHDORZODQDO\VLVDUHDIRUWKLVSURMHFWH[WHQGVRXWZDUGIURPWKHSURSRVHG:HEHU*XOFK %DFNFRXQWU\+XW3URMHFW$UHDWRWKHIXUWKHVWH[WHQWRIDQ\ERUHDORZOKRPHUDQJHWKDWFRXOGRYHUODSWKH SURMHFWFRPSRQHQWDUHDV%HFDXVHERUHDORZOKRPHUDQJHVFDQEHLQWKHUDQJHRIWRDFUHV HJIRUWZRPDOHV WKHERUHDORZODQDO\VLVDUHDFRXOGH[WHQGWRPLOHVEH\RQGWKHSURSRVHG $OWHUQDWLYHGLVWXUEDQFHDUHDV

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

,QDGGLWLRQWRWKHFDOOLQJVXUYH\DQHVWFDYLW\VXUYH\ZDVFRQGXFWHGDORQJIODJJHGH[LVWLQJDQGSURSRVHG QHZDQGXSJUDGHGWUDLOVWRWKHSURSRVHG:HEHU*XOFK%DFNFRXQWU\+XWVLWHDWDQGDERYH6DOO\%DUEHU 5RDGRQ-XO\7KLVVXUYH\VRXJKWDQ\QHVWFDYLWLHVLQDOOWUHHVDORQJWKHH[LVWLQJDQGSURSRVHG DFFHVVWUDLOVWKDWFRXOGSRVVLEO\EHUHPRYHGIRUWUDLOFUHDWLRQDQGZLGHQLQJWKDWFRXOGSRWHQWLDOO\VXSSRUW DERUHDORZOQHVW1RQHVWFDYLWLHVRIDQ\W\SHZHUHGHWHFWHG

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-48 112 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

VSHFLHVFRPSRVLWLRQ:LWKLQWKHVHKDELWDWVWKH\DUHRIWHQDVVRFLDWHGZLWKIRUHVWRSHQLQJVDQGIRUHVWHGJH KDELWDWZKHUHWKH\VDOO\IRUIO\LQJLQVHFWVIURPWKHWRSVRIXQFRPPRQO\WDOOVQDJVDQGWUHHV7KH\PD\ RFFXS\HDUO\VXFFHVVLRQDOIRUHVWV LHWKRVHUHVXOWLQJIURPILUHVDQGORJJLQJ SURYLGHGVQDJVDQGRU UHVLGXDOWDOOWUHHVDUHDYDLODEOHIRUIRUDJLQJDQGVLQJLQJSHUFKHV7KLVIO\FDWFKHU¶VDIILQLW\WRVXFKIRUHVW VWUXFWXUHPD\OLPLWLWVORFDODEXQGDQFHRUGLVWULEXWLRQ)RUWKLVDQDO\VLVVXLWDEOHKDELWDWLVQDUURZO\ GHILQHGDVVSUXFHILUDQGPL[HGFRQLIHU6WDJHV%&DQG

7KHROLYHVLGHGIO\FDWFKHUDQDO\VLVDUHDIRUWKLVSURMHFWH[WHQGVRXWZDUGWRWKHIXUWKHVWH[WHQWRIDQ\ KRPHUDQJHWKDWFRXOGRYHUODSWKHSURSRVHG:HEHU*XOFK%DFNFRXQWU\+XWSURMHFWFRPSRQHQWDUHDV 2OLYHVLGHGIO\FDWFKHUVZHUHQRWGHWHFWHGLQRUDURXQGSURMHFWFRPSRQHQWDUHDVGXULQJWKHWZRVXPPHU VXUYH\VZKHQWKH\PD\KDYHEHHQSUHVHQW+RZHYHUVRPHIRUHVWVWDQGVLQWKHYLFLQLW\RIWKH3URMHFW $UHDLQFOXGLQJVRPHWKDWZRXOGEHELVHFWHGE\QHZDQGH[SDQGHGDFFHVVWUDLOVIDOOZLWKLQWKHJHQHUDO KDELWDWFRQWLQXXPNQRZQWREHLQKDELWHGE\WKLVVSHFLHV

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

0DPPDOV 1LQHVSHFLHVRIVHQVLWLYHPDPPDOVRFFXURUDUHH[SHFWHGWRRFFXURQWKH:51))LYHVSHFLHV²IULQJHG P\RWLV 0\RWLVWK\VDQRGHV VSRWWHGEDW (XGHUPDPDFXODWXP 7RZQVHQG¶VELJHDUHGEDW &RU\QRUKLQXV WRZQVHQGLLWRZQVHQGLL ULYHURWWHU /RQWUDFDQDGHQVLV DQG5RFN\0RXQWDLQELJKRUQVKHHS 2YLV FDQDGHQVLVFDQDGHQVLV ²KDYHQRWEHHQGHWHFWHGRQRUQHDUWKH3URMHFW$UHDGRQRWKDYHDIILQLWLHVWR 3URMHFW$UHDKDELWDWVKDYHHOHYDWLRQDQGRUGLVWULEXWLRQDOUDQJHVWKDWGRQRWRYHUODSWKH3URMHFW$UHD 7KRVHILYHVSHFLHVDUHGURSSHGIURPIXUWKHUFRQVLGHUDWLRQKHUHLQ7KHUHPDLQLQJWKUHHVSHFLHVKDYH DIILQLWLHVWRKDELWDWVSUHVHQWZLWKLQWKH3URMHFW$UHDPD\EHSUHVHQWDQGDUHDGGUHVVHGEHORZ

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-49 113 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

RXWZDUG RQWKHRUGHURIVHYHUDOKXQGUHG\DUGV WRWKHIXUWKHVWH[WHQWRIDQ\KRPHUDQJHWKDWFRXOG RYHUODSWKHSURSRVHG$OWHUQDWLYHGLVWXUEDQFHDUHDV

1RVXLWDEOHWUDSSLQJVXUYH\VKDYHEHHQFRQGXFWHGZLWKLQWKH3URMHFW$UHDWRGHWHFWWKLVUDUHVSHFLHV8QWLO 6LHPHUV VWXG\S\JP\VKUHZVKDGQRWEHHQGHWHFWHGLQ6XPPLW&RXQW\ 1',6GDWD RUDQ\ZKHUH HOVHRQWKH:51)1HYHUWKHOHVVWKLVVSHFLHVUHPDLQVXQFRPPRQRQWKHODQGVFDSHDOWKRXJKWUDSDELOLW\LV OLNHO\DFRQWULEXWLQJIDFWRU%DVHGRQWKHVSHFLHV¶EURDGKDELWDWDIILQLWLHVIRUHVWHGKDELWDWVDVVRFLDWHG ZLWK$OWHUQDWLYHGLVWXUEDQFHDUHDVIDOOZLWKLQWKHEURDGKDELWDWFRQWLQXXPNQRZQWREHRFFXSLHGE\WKLV VSHFLHV

+RDU\%DW 7KHKRDU\EDW /DVLXUXVFLQHUHXV LVDVROLWDU\VSHFLHVURRVWLQJSULPDULO\DPRQJIROLDJHLQGHFLGXRXVDQG FRQLIHURXVWUHHVRIWHQDORQJWKHHGJHVRIFOHDULQJV7KH\KDYHEHHQREVHUYHGLQDQXPEHURIIRUHVWHG FRYHUW\SHVLQFOXGLQJPL[HGFRQLIHUORGJHSROHSLQHSRQGHURVDSLQHSLQ\RQMXQLSHUDQGULSDULDQDUHDV ZLWKFRWWRQZRRGDQGZLOORZ+RDU\EDWVIRUDJHRQDZLGHYDULHW\RILQVHFWVHVSHFLDOO\PRWKV

%HFDXVHRIWKLVVSHFLHV¶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

7KHKRDU\EDWDQDO\VLVDUHDIRUWKLVSURMHFWH[WHQGVRXWZDUGIURPWKHSURSRVHG:HEHU*XOFK%DFNFRXQWU\ +XW3URMHFW$UHDWRWKHIXUWKHVWH[WHQWRIDQ\QRFWXUQDOIRUDJLQJUDQJHWKDWEDWVURRVWLQJLQWKH3URMHFW $UHDPLJKWXVH%DVHGRQQLJKWO\IRUDJLQJUDQJHVRIRWKHUVLPLODUEDWVWKHKRDU\EDWDQDO\VLVDUHDFRXOG H[WHQGVHYHUDOPLOHVEH\RQGWKHSURSRVHG$OWHUQDWLYHGLVWXUEDQFHDUHDV

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-50 114 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

0DUWHQVDUHZHOOGLVWULEXWHGDFURVVWKH:51)LQVXLWDEOHKDELWDWVLQPLGWRXSSHUHOHYDWLRQ]RQHV $OWKRXJKWKH\DUHPRVWFRPPRQO\REVHUYHGLQVSUXFHILUIRUHVWVWKH\DUHRFFDVLRQDOO\VHHQLQORZHU HOHYDWLRQPL[HGFRQLIHUIRUHVWV0DUWHQDUHSUHVHQWLQWKHSURSRVHG:HEHU*XOFK%DFNFRXQWU\+XW 3URMHFW$UHDPRVWFRPPRQLQVSUXFHILUDQGXSSHUHOHYDWLRQPL[HGFRQLIHUVWDQGVEXWDOVRRFFDVLRQDOO\ H[WHQGLQJLQWRWKHORGJHSROHSLQH]RQH

7KH$PHULFDQPDUWHQDQDO\VLVDUHDIRUWKLVSURMHFWH[WHQGVRXWZDUGIURPWKHSURSRVHG:HEHU*XOFK %DFNFRXQWU\+XW3URMHFW$UHDWRWKHIXUWKHVWH[WHQWRIDQ\PDUWHQKRPHUDQJHWKDWFRXOGRYHUODSWKH SURSRVHGGLVWXUEDQFHDUHDV7KHUHIRUHWKHPDUWHQDQDO\VLVDUHDFRXOGH[WHQGDSSUR[LPDWHO\PLOH EH\RQGWKHSURSRVHG$OWHUQDWLYHGLVWXUEDQFHDUHDV

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

0DQDJHPHQW,QGLFDWRU6SHFLHV

0DQDJHPHQWLQGLFDWRUVSHFLHV 0,6 DUHGHILQHGLQ)RUHVW6HUYLFH0DQXDO )60 DV³ 3 ODQW DQGDQLPDOVSHFLHVFRPPXQLWLHVRUVSHFLDOKDELWDWVVHOHFWHGIRUHPSKDVLVLQSODQQLQJDQGZKLFKDUH PRQLWRUHGGXULQJIRUHVWSODQLPSOHPHQWDWLRQLQRUGHUWRDVVHVVWKHHIIHFWVRIPDQDJHPHQWDFWLYLWLHVRQ WKHLUSRSXODWLRQVDQGWKHSRSXODWLRQVRIRWKHUVSHFLHVZLWKVLPLODUKDELWDWQHHGVZKLFKWKH\PD\ UHSUHVHQW´

$PHULFDQ(ON (ONZHUHVHOHFWHGDVD0,6WRDQVZHUWKHTXHVWLRQ³'RHV)RUHVWPRWRUL]HGDQGQRQPRWRUL]HGWUDYHODQG UHFUHDWLRQPDQDJHPHQWUHVXOWLQHIIHFWLYHXVHRIKDELWDWE\XQJXODWHV"´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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-51 115 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

WKHHONPRQLWRULQJSURWRFROLQFRRSHUDWLRQZLWK&RORUDGR3DUNVDQG:LOGOLIH &3: WRPRQLWRU SRSXODWLRQDQGKDELWDWVWUHQGVDFURVVWKH:51)

7KLVVSHFLHVZDVQRWFKRVHQDVD0,6EHFDXVHRIDQ\YLDELOLW\FRQFHUQVWKHUHLVQRWDYLDELOLW\FRQFHUQ IRUWKLVVSHFLHVRQWKH:51)YLDELOLW\LVQRWH[SHFWHGWREHFRPHDFRQFHUQWKURXJKLPSOHPHQWDWLRQRI WKLVSURMHFWRUFRQWLQXHGLPSOHPHQWDWLRQRIWKH)RUHVW3ODQDQGYLDELOLW\RIWKLV0,6ZLOOQRWEH DGGUHVVHGIXUWKHULQWKLVGRFXPHQW7KHHONDQDO\VLVDUHDVFRQVLGHUHGKHUHLQLQFOXGHVWKHIXUWKHVWKRPH UDQJHVRIHONRYHUODSSLQJWKH3URMHFW$UHD JHQHUDOO\VRXWKHUQ6XPPLW&RXQW\ DQGWKH:51)

,Q&RORUDGRWKHEUHHGLQJVHDVRQIRUHONEHJLQVLQHDUO\6HSWHPEHUSHDNVGXULQJWKHODVWZHHNRI 6HSWHPEHUDQGILUVWZHHNRI2FWREHUDQGLVRYHUE\ODWH2FWREHU&DOYLQJJURXQGVDUHFDUHIXOO\VHOHFWHG E\WKHFRZVDQGDUHJHQHUDOO\LQORFDWLRQVZKHUHFRYHUIRUDJHDQGZDWHUDUHLQFORVHSUR[LPLW\&DOYLQJ VLWHVRFFXULQWKHPLGGOHWRXSSHUSRUWLRQVRIVXPPHUUDQJHDQGRIWHQRFFXULQWKHVDPHJHQHUDODUHDHDFK \HDU+LNLQJDQGRWKHUUHFUHDWLRQDODFWLYLWLHVLQRUQHDUHONFDOYLQJDUHDVFDQLPSDFWUHSURGXFWLYHVXFFHVV

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

7KH6WDWHRI&RORUDGRKDVUHVSRQVLELOLW\IRUWKHPDQDJHPHQWRIZLOGOLIHSRSXODWLRQV7KH&3:KDV VSHFLILFHONPDQDJHPHQWJRDOVDQGREMHFWLYHVWKDWKDYHEHHQGHYHORSHGLQFRRSHUDWLRQZLWKODQGRZQHUV WKHSXEOLFDQGIHGHUDOODQGPDQDJHPHQWDJHQFLHV

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-52 116 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

WUHQGIRUWKLVKHUG7KHEXOOHONKDUYHVWDQGEXOOFRZUDWLRVLQ'$8(KDYHUHPDLQHGIDLUO\VWDEOHRYHU WKHSDVWWHQ\HDUV

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-53 117 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

PD\IOLHV 3OHFRSWHUD VWRQHIOLHV DQG7ULFRSWHUD FDGGLVIOLHV FROOHFWLYHO\NQRZQDV³(37´ $GGLWLRQDOO\DVSHFLILF:51)PHWULFZDVGHYHORSHGLGHQWLI\LQJORFDO(37WD[DVHQVLWLYHWRVHGLPHQW

7KHUHDUHQREDVHOLQHDTXDWLFPDFURLQYHUWHEUDWHZDWHUTXDOLW\RUILVKHULHVGDWDDYDLODEOHIRU:HEHU *XOFKSHUVHGXHWRLQWHUPLWWHQWFKDUDFWHURIWKHGUDLQDJH¶VORZHUUHDFK&RQVLGHUDEOHDTXDWLF PDFURLQYHUWHEUDWHDQGZDWHUTXDOLW\GDWDDUHDYDLODEOHIRU)UHQFK*XOFKDVDUHVXOWRIVDPSOLQJDVVRFLDWHG ZLWKWKH:HOOLQJWRQ0LQH7KH)RUHVW6HUYLFHKDVVDPSOHGILVKHULHVLQUHDFKHVRI)UHQFK*XOFKDQG IRXQGWKDWWKHFXWWKURDWVSUHVHQWDUHPRUHFORVHO\DOLJQHGZLWK

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

%HFDXVHWURXWZHUHVHOHFWHGDVD0,6GXULQJWKH)RUHVW3ODQUHYLVLRQWKH)RUHVWGRHVQRW\HW KDYHWURXWSRSXODWLRQQXPEHUVDQGWUHQGVIRUUHIHUHQFHDQGDIIHFWHGVWUHDPUHDFKHV)RUHVWZLGH,Q WKH:51)EHJDQLWV)RUHVWZLGHDTXDWLF0,6PRQLWRULQJ

',5(&7$1',1',5(&7(19,5210(17$/&216(48(1&(6 $OWHUQDWLYH±1R$FWLRQ

$OWHUQDWLYHLVDWUXH1R$FWLRQ$OWHUQDWLYHDQGSURYLGHVDEDVHOLQHIRUFRPSDULQJDFFXUDWHO\DQG FRQVLVWHQWO\WKHHIIHFWVRI$OWHUQDWLYH7KH1R$FWLRQ$OWHUQDWLYHUHIOHFWVDFRQWLQXDWLRQRIH[LVWLQJ 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-54 118 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

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

7KUHDWHQHGDQG(QGDQJHUHG6SHFLHV 7KHPDQDJHPHQWGHFLVLRQVDVVRFLDWHGZLWK$OWHUQDWLYHZRXOGKDYH³QRHIIHFW´RQDQ\WKUHDWHQHGDQG HQGDQJHUHGVSHFLHVWKHLUKDELWDWVRURQGHVLJQDWHGFULWLFDOKDELWDW

*UHHQEDFN&XWWKURDW7URXW 7KHSURSRVHG:HEHU*XOFK%DFNFRXQWU\+XW3URMHFW$UHDGRHVQRWVXSSRUWRFFXSLHGKDELWDWIRUWKH JUHHQEDFNFXWWKURDWWURXW$OWHUQDWLYHVZRXOGKDYHQRHIIHFWRQWKLVVSHFLHV

1RUWK$PHULFDQ:ROYHULQH $OWHUQDWLYHZRXOGKDYHQRHIIHFWRQZROYHULQHVEHFDXVHQRKDELWDWPRGLILFDWLRQZRXOGEHDXWKRUL]HG

&DQDGD/\Q[ $OWHUQDWLYHZRXOGQRWLQGXFHRUUHVXOWLQDQ\WUHHUHPRYDORUKDELWDWFKDQJHVRUFKDQJHVLQODQGXVHRU KXPDQDFWLYLW\LQFOXGLQJVQRZFRPSDFWLRQDOWHUDWLRQVIURPFXUUHQWXVH7KH1R$FWLRQ$OWHUQDWLYH ZRXOGKDYHQRDGGLWLRQDOGLUHFWRULQGLUHFWLPSDFWVRUEHQHILWVWRO\Q[RUO\Q[KDELWDW

56HQVLWLYH6SHFLHV ,PSDFWVWR5VHQVLWLYHVSHFLHVDUHVXPPDUL]HGLQ7DEOH(EHORZ

,QVHFWV 2QHVSHFLHVRI5VHQVLWLYHLQVHFWLVSRWHQWLDOO\SUHVHQWRQWKH:51)EXWWKH*UHDW%DVLQVLOYHUVSRW GRHVQRWKDYHSRWHQWLDOKDELWDWZLWKLQWKHDUHDRILQIOXHQFHRIWKH3URMHFW$UHDQRUKDYHNQRZQ GLVWULEXWLRQVRYHUODSSLQJWKH:51)7KHUHIRUH$OWHUQDWLYHZRXOGKDYHQRHIIHFWRQWKH*UHDW%DVLQ VLOYHUVSRW

)LVK 7KHUHZRXOGEHQRFKDQJHVWRWKHK\GURORJ\RUKDELWDWTXDOLW\RIDQ\VWUHDPDVDUHVXOWRI$OWHUQDWLYH WKDWFRXOGQHJDWLYHO\DIIHFWWKHILYHVHQVLWLYHILVKVSHFLHV

$PSKLELDQV5HSWLOHV $OWHUQDWLYHZRXOGKDYHQRLPSDFWRQERUHDOWRDGV7KHUHLVQRVXLWDEOHOHRSDUGIURJEUHHGLQJKDELWDW WKDWZRXOGEHGLUHFWO\RULQGLUHFWO\DIIHFWHGE\$OWHUQDWLYH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-55 119 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

%LUGV $OWHUQDWLYHZRXOGKDYHQRLPSDFWRQJRVKDZNVZKLWHWDLOHGSWDUPLJDQERUHDORZORUROLYHVLGHG IO\FDWFKHU+RZHYHUXQGHUWKH1R$FWLRQ$OWHUQDWLYHWKHRQJRLQJ03%HSLGHPLFZLOOOLNHO\UHGXFH VKRUWDQGPRGHUDWHWHUPIRUDJLQJRSSRUWXQLWLHVDORQJPLGDQGORZHUHOHYDWLRQORGJHSROHSLQHDQG PL[HGFRQLIHUKDELWDWVLQWKH6ZDQ5LYHUGUDLQDJHLQFOXGLQJWKHSURSRVHG:HEHU*XOFK%DFNFRXQWU\+XW 3URMHFW$UHD

0DPPDOV 3\JP\6KUHZ $OWHUQDWLYHZRXOGKDYHQRLPSDFWRQS\JP\VKUHZV7KHHIIHFWVRIWKHFXUUHQW03%HSLGHPLFRQ S\JP\VKUHZVZKLFKZLOOFRQWLQXHXQGHUWKH1R$FWLRQ$OWHUQDWLYHDUHXQFHUWDLQEHFDXVHWKHVSHFLHV LQKDELWVDZLGHUDQJHRIKDELWDWVLQFOXGLQJFOHDUFXWVDQGVHOHFWLYHO\ORJJHGIRUHVWVWKDWFDQEHVLPLODU VWUXFWXUDOO\DQGYHJHWDWLYHO\WRIRUHVWVWDQGVDIIHFWHGE\WKH03%HSLGHPLF

+RDU\%DW $OWHUQDWLYHZRXOGKDYHQRLPSDFWRQWKHKRDU\EDW7KHHIIHFWVRIWKHFXUUHQW03%HSLGHPLFRQKRDU\ EDWVZKLFKZLOOFRQWLQXHXQGHUWKH1R$FWLRQ$OWHUQDWLYHDUHWKRXJKWWREHODUJHO\QHJDWLYHEHFDXVHRI WKHUHPRYDORIURRVWLQJKDELWDWDQGXQFHUWDLQEHFDXVHRIXQNQRZQHIIHFWVWRWKHLULQVHFWSUH\EDVH

$PHULFDQ0DUWHQ $OWHUQDWLYHZRXOGKDYHQRLPSDFWRQPDUWHQ+RZHYHUXQGHUWKH1R$FWLRQ$OWHUQDWLYHWKHHEELQJ 03%HSLGHPLFZLOOOLNHO\UHGXFHVKRUWDQGPRGHUDWHWHUPIRUDJLQJDQGSRVVLEO\GHQQLQJRSSRUWXQLWLHV DORQJPLGDQGORZHUHOHYDWLRQORGJHSROHSLQHDQGPL[HGFRQLIHUKDELWDWVLQFOXGLQJWKH3URMHFW$UHD

0DQDJHPHQW,QGLFDWRU6SHFLHV $TXDWLF0DFURLQYHUWHEUDWHV 7KH1R$FWLRQ$OWHUQDWLYHZRXOGKDYHQRDGGLWLRQDOGLUHFWRULQGLUHFWHIIHFWVWRDTXDWLF PDFURLQYHUWHEUDWHVDTXDWLFIDXQDOFRPPXQLWLHVRUZDWHUTXDOLW\LQ:HEHU*XOFK)UHQFK*XOFKRUWKH %OXH5LYHUGRZQVWUHDPRIWKH3URMHFW$UHD

7KH1R$FWLRQ$OWHUQDWLYHZRXOGKDYHQRLQGLUHFWLPSDFWVWRDTXDWLFPDFURLQYHUWHEUDWHVRUZDWHU TXDOLW\$OWHUQDWLYHLVQRWH[SHFWHGWRJHQHUDWHDQ\VHFRQGDU\GHYHORSPHQWRUGLVSHUVHGUHFUHDWLRQ HIIHFWVIURPDGGLWLRQDOUHVLGHQWVHPSOR\HHVRUJXHVWVWKDWZRXOGDIIHFWWKLVLQGLFDWRUJURXSRUZDWHU TXDOLW\LQWKHDQDO\VLVDUHD

$PHULFDQ(ON 7KH1R$FWLRQ$OWHUQDWLYHZRXOGKDYHQRDGGLWLRQDOGLUHFWLPSDFWVRUEHQHILWVWRHONRUHONKDELWDW

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-56 120 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

$OO7URXW :KLOHSDVWPDQDJHPHQWPD\KDYHGHJUDGHGWKHSK\VLFDOKDELWDWTXDOLW\IRUVDOPRQLGVLQUHDFKHVRI )UHQFK*XOFKDQGWKH%OXH5LYHULQWKH:HEHU*XOFK3URMHFW$UHDWKH1R$FWLRQ$OWHUQDWLYHZRXOG FRQWULEXWHQRDGGLWLRQDOGLUHFWRULQGLUHFWHIIHFWVWRORFDOZDWHUTXDOLW\RUTXDQWLW\ORFDOWURXW SRSXODWLRQVRUWURXWSRSXODWLRQVDQGKDELWDWWUHQG)RUHVWZLGH

$OWHUQDWLYH±3URSRVHG$FWLRQ 7KUHDWHQHGDQG(QGDQJHUHG6SHFLHV 1RUWK$PHULFDQ:ROYHULQH $OWHUQDWLYHZRXOGEHQRWOLNHO\WRMHRSDUGL]HWKHFRQWLQXHGH[LVWHQFHRI1RUWK$PHULFDQZROYHULQH EHFDXVHQRKDELWDWPRGLILFDWLRQZRXOGEHDXWKRUL]HG

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-57 121 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

:HEHU*XOFK%DFNFRXQWU\+XWLVQRWH[SHFWHGWRJHQHUDWHDQ\VHFRQGDU\GHYHORSPHQWIURPDGGLWLRQDO UHVLGHQWVRUHPSOR\HHV

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³LQVLJQLILFDQW´DQG ³GLVFRXQWDEOH´ SHUWKH86):6DQG10)6 7KHUHIRUHWKH3URSRVHG$FWLRQZDUUDQWVD³PD\DIIHFWQRW OLNHO\WRDGYHUVHO\DIIHFW´GHWHUPLQDWLRQIRU&DQDGDO\Q[

56HQVLWLYH6SHFLHV 7DEOH(VXPPDUL]HVHIIHFWVRI$OWHUQDWLYHRQ5VHQVLWLYHVSHFLHV)ROORZLQJWKHWDEOHGHWDLOHG LQIRUPDWLRQRQLPSDFWVWRHDFKVSHFLHVLVSUHVHQWHG

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-58 122 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

7DEOH( 'HWHUPLQDWLRQ6XPPDU\RI(IIHFWVRQ56HQVLWLYH$QLPDO6SHFLHV 5HVXOWLQJIURP$OWHUQDWLYHVDQG 'HWHUPLQDWLRQ &RPPRQQDPH6FLHQWLILFQDPH $OW $OW %RUHDORZO$HJROLXVIXQHUHXV 1, 0$,, %ODFNVZLIW&\SVHORLGHVQLJHU 1, 1, /HZLV¶ZRRGSHFNHU0HODQHUSHVOHZLV 1, 1, 2OLYHVLGHGIO\FDWFKHU&RQWRSXVFRRSHUL 1, 0$,, /RJJHUKHDGVKULNH/DQLXVOXGRYLFLDQXV 1, 1, 3XUSOHPDUWLQ3URJQHVXELV 1, 1, %UHZHU¶VVSDUURZ6SL]HOODEUHZHUL 1, 1, 6DJHVSDUURZ$PSKLVSL]DEHOOL 1, 1, MAMMALS 3\JP\VKUHZ0LFURVRUH[KR\LPRQWDQXV 1, 0$,, )ULQJHGP\RWLV0\RWLVWK\VDQRGHV 1, 1, +RDU\EDW/DVLXUXVFLQHUHXV 1, 0$,, 6SRWWHGEDW(XGHUPDPDFXODWXP 1, 1, 7RZQVHQG¶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

)LVK 7KHUHZRXOGEHQRFKDQJHVWRWKHK\GURORJ\RUKDELWDWTXDOLW\RIDQ\VWUHDPDVDUHVXOWRI$OWHUQDWLYH WKDWFRXOGQHJDWLYHO\DIIHFWWKHILYHVHQVLWLYHILVKVSHFLHV7KHUHIRUH$OWHUQDWLYHZRXOGKDYHQRLPSDFW RQWKHVHILYHVSHFLHVRIVHQVLWLYHILVK

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-59 123 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

$PSKLELDQV5HSWLOHV %RUHDO:HVWHUQ7RDG $)RUHVW3ODQ&RQVLVWHQF\$QDO\VLVZDVFRQGXFWHGIRU$OWHUQDWLYHVDQGDQGLVFRQWDLQHGLQWKH $GPLQLVWUDWLYH5HFRUGDWWKH'5':LWKWKHLPSOHPHQWDWLRQRI3')VWKDWDUHSDUWRIWKH3URSRVHG $FWLRQ$OWHUQDWLYHVDQGZRXOGEHFRQVLVWHQWZLWKDOOVWDQGDUGVDQGJXLGHOLQHVDQG)RUHVWGLUHFWLRQ DSSOLFDEOHWRERUHDOWRDGVDQGOHRSDUGIURJV

$OWHUQDWLYHSURMHFWFRPSRQHQWVZRXOGKDYHQRLPSDFWRQDQ\NQRZQRUSRWHQWLDOERUHDOWRDGEUHHGLQJ KDELWDWRUVXUURXQGLQJWHUUHVWULDOKDELWDWVWKDWFRXOGEHH[SHFWHGWREHXVHGSRVWEUHHGLQJRUIRU KLEHUQDFXOD:LWKWKHLPSOHPHQWDWLRQRI3')VLQFRUSRUDWHGLQWRWKH3URSRVHG$FWLRQQRVHGLPHQWV RULJLQDWLQJLQ$OWHUQDWLYHFRQVWUXFWLRQDUHDVDUHOLNHO\WRH[WHQGWRDQ\VXLWDEOHERUHDOWRDGEUHHGLQJ FRPSOH[RQ1)6RUSULYDWHODQGV,WLVGLVFRXQWDEOHWKDWH[WUHPHIHPDOHKRPHUDQJHRUGLVSHUVLQJWRDG PRYHPHQWVFRXOGH[WHQGLQWR$OWHUQDWLYHSURMHFWFRPSRQHQWDUHDV$VVXFKFRQVWUXFWLRQDFWLYLW\ LPSDFWV HJGLUHFWPRUWDOLW\RILQGLYLGXDOVLQFOHDUDQFHDUHDVDQGDORQJDFFHVVURDGVGLUHFWHIIHFWV RU LPSDLUHGKDELWDWFRQQHFWLYLW\YLDUHGXFHGIRUHVWFRYHUDQGPDLQWHQDQFHYHKLFOHLQGXFHGPRUWDOLW\DORQJ PRXQWDLQURDGV LQGLUHFWHIIHFWV ZRXOGQRWLPSDFWLQGLYLGXDOV7KHUHIRUHWKHUHZRXOGEHQRLPSDFWRQ WKLVVSHFLHV

1RUWKHUQ/HRSDUG)URJ 7KHUHLVQRVXLWDEOHOHRSDUGIURJEUHHGLQJKDELWDWWKDWZRXOGEHGLUHFWO\RULQGLUHFWO\DIIHFWHGE\ $OWHUQDWLYHV)RUWKHVDPHUHDVRQVGHVFULEHGDERYHIRUWKHERUHDOWRDG$OWHUQDWLYHZRXOGKDYHQR LPSDFWRQWKHOHRSDUGIURJ

%LUGV 1RUWKHUQ*RVKDZN 7KHRQJRLQJ03%HSLGHPLFZLOOOLNHO\UHGXFHVKRUWDQGPRGHUDWHWHUPIRUDJLQJDQGQHVWLQJ RSSRUWXQLWLHVDORQJPLGDQGORZHUHOHYDWLRQORGJHSROHSLQHDQGPL[HGFRQLIHUKDELWDWVLQWKH6ZDQ 5LYHUGUDLQDJHLQFOXGLQJWKHSURSRVHG:HEHU*XOFK%DFNFRXQWU\+XW3URMHFW$UHD

,QDGGLWLRQWR03%DIIHFWV$OWHUQDWLYHZRXOGDIIHFWJRVKDZNVE\UHPRYLQJDFUHRIIRUHVWRQ1)6 ODQGV DFUHVRIIRUHVWXQGHUDOOODQGRZQHUVKLSV LQWKH3URMHFW$UHDWKDWVXSSRUWVSRWHQWLDOSUH\ VSHFLHV7KLVKDELWDWFRQYHUVLRQZRXOGEHLQFRQVHTXHQWLDORQWKHODUJHIRUDJLQJUDQJHRIDQLQGLYLGXDO SDLU¶VKRPHUDQJH1RJRVKDZNQHVWVRUQHVWLQJKDELWDWDVVRFLDWHGZLWKDNQRZQQHVWLQJEORFNZRXOGEH DIIHFWHG$GGLWLRQDO3')V &KDSWHU7DEOH WKDWDUHSDUWRIWKH3URSRVHG$FWLRQZRXOG LQFUHPHQWDOO\UHGXFHWKHDERYHGLUHFWHIIHFWVRQWKLVVSHFLHV,QGLUHFWHIIHFWVDVVRFLDWHGZLWKWKLVSURMHFW ZRXOGKDYHQRLPSDFWVRQJRVKDZNV

5HJDUGLQJJRVKDZNV$OWHUQDWLYHPD\LPSDFWLQGLYLGXDOVEXWLVQRWOLNHO\WRUHVXOWLQDORVVRI YLDELOLW\LQWKHSODQQLQJDUHDQRUFDXVHDWUHQGWRZDUGIHGHUDOOLVWLQJ

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-60 124 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

:KLWHWDLOHG3WDUPLJDQ 3WDUPLJDQXVHRIWKH3URMHFW$UHDDQGDGMDFHQWKDELWDWVIRUVXPPHUDQGEUHHGLQJXVHVZRXOGEH XQDIIHFWHGE\$OWHUQDWLYH$OWHUQDWLYHFRXOGUHVXOWLQPRUHIUHTXHQWGLVSODFHPHQWRIZLQWHULQJPDOH SWDUPLJDQLQDOSLQHDUHDVDERYHWKHKXWVLWHLIWKH\DUHRFFDVLRQDOO\SUHVHQW7KHUHZRXOGQRSK\VLFDOORVV RIZLQWHUIRUDJLQJKDELWDW7KHUHZRXOGEHQRLQGLUHFWHIIHFWVDVVRFLDWHGZLWKWKLVSURMHFW OLPLWHGWR LQFUHDVHVLQGLVSHUVHGUHFUHDWLRQH[WHQGLQJLQWRSWDUPLJDQKDELWDW

5HJDUGLQJZKLWHWDLOHGSWDUPLJDQ$OWHUQDWLYHPD\DGYHUVHO\LPSDFWLQGLYLGXDOVEXWLVQRWOLNHO\WR UHVXOWLQDORVVRIYLDELOLW\LQWKHSODQQLQJDUHDQRUFDXVHDWUHQGWRZDUGIHGHUDOOLVWLQJ

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¶VKRPHUDQJH,IQHZQHVWWUHHV DVVRFLDWHGZLWKDQDFWLYHWHUULWRU\RFFXUDORQJWKHPLOHVRIQHZDQGZLGHQHGWUDLOVGXULQJWKH FRQVWUXFWLRQVHDVRQGLUHFWPRUWDOLW\RIHJJVDQGRUQHVWOLQJVZRXOGEHDYRLGHGE\FRQGXFWLQJWUHH UHPRYDORXWVLGHWKH0D\WR-XO\QHVWLQJSHULRGZKHQHJJV\RXQJFRXOGEHSUHVHQW*LYHQWKLV VSHFLHV¶SULPDULO\QRFWXUQDOKDELWDWXVHFDYLW\QHVWLQJKDELWWKHUHODWLYHO\VPDOODPRXQWRIVXEDOSLQHDQG PRQWDQHWHUUDLQWKDWZRXOGEHGHYHORSHG LHFRPSDUHGWRWKHLQWDFWWHUUDLQWKDWZRXOGUHPDLQRXWVLGHRI WKHWUDLOFRUULGRUV DQGWROHUDQFHWRKXPDQGLVWXUEDQFHLWLVOLNHO\WKDWDOOUHPDLQLQJVXUURXQGLQJIRUHVW WKDWLVFXUUHQWO\VXLWDEOHDVERUHDORZOKDELWDWZRXOGUHPDLQVXLWDEOHLQFOXGLQJSRVVLEOHIXWXUHQHVWLQJ ,QFUHDVHVLQGLVSHUVHGUHFUHDWLRQ LHRWKHUWKDQWKDWDVVRFLDWHGZLWK$OWHUQDWLYH H[WHQGLQJLQWRERUHDO RZOKDELWDWZRXOGKDYHQRLQGLUHFWLPSDFWRQWKLVVSHFLHV

5HJDUGLQJERUHDORZOV$OWHUQDWLYHPD\LPSDFWLQGLYLGXDOVEXWLVQRWOLNHO\WRUHVXOWLQDORVVRI YLDELOLW\RQWKHSODQQLQJDUHDQRUFDXVHDWUHQGWRZDUGIHGHUDOOLVWLQJ

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¶VKRPHUDQJH,IQHVW

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-61 125 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

WUHHVDVVRFLDWHGZLWKDQDFWLYHWHUULWRU\RFFXUDORQJWKHPLOHVRIQHZDQGZLGHQHGWUDLOVGXULQJWKH FRQVWUXFWLRQVHDVRQGLUHFWPRUWDOLW\RIHJJVDQGRUQHVWOLQJVZRXOGEHDYRLGHGE\FRQGXFWLQJWUHH UHPRYDORXWVLGHWKH-XQHWR-XO\QHVWLQJSHULRGZKHQHJJV\RXQJFRXOGEHSUHVHQW

5HJDUGLQJROLYHVLGHGIO\FDWFKHUV$OWHUQDWLYHPD\LPSDFWLQGLYLGXDOVEXWLVQRWOLNHO\WRUHVXOWLQD ORVVRIYLDELOLW\LQWKHSODQQLQJDUHDQRUFDXVHDWUHQGWRZDUGIHGHUDOOLVWLQJ

0DPPDOV 3\JP\6KUHZ ,QDGGLWLRQWR03%DIIHFWV$OWHUQDWLYHFRXOGLPSDFWLQGLYLGXDOS\JP\VKUHZVWKURXJKGLUHFW FRQVWUXFWLRQUHODWHGPRUWDOLW\DQGRUORVVRISRWHQWLDOKDELWDW(YHQFRQVLGHULQJWKHUHODWLYHVPDOOKRPH UDQJHVL]HRIWKLVVSHFLHVWKHSURSRVHG:HEHU*XOFK%DFNFRXQWU\+XWLPSDFWDUHDVDPRXQWLQJWR DFUHRIIRUHVWRQ1)6ODQGV DFUHVRIIRUHVWXQGHUDOOODQGRZQHUVKLSV H[WHQGLQJRYHUPLOHV RIQHZDQGH[SDQGHGWUDLOVZRXOGUHSUHVHQWDVPDOOSRUWLRQRIDQLQGLYLGXDOVKUHZ¶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

+RDU\%DW ,QDGGLWLRQWR03%DIIHFWV$OWHUQDWLYHFRXOGLPSDFWLQGLYLGXDOKRDU\EDWVWKURXJKWKHORVVRISRWHQWLDO URRVWLQJIRUDJLQJKDELWDWDVVRFLDWHGZLWKPL[HGFRQLIHUVWDQGVDQGDQ\UHPDLQLQJPDWXUHORGJHSROHVWKDW VXUYLYHWKH03%HSLGHPLF7KH$OWHUQDWLYHLPSDFWDUHDVUHSUHVHQWDQLQVLJQLILFDQWSURSRUWLRQRIWKH WRWDOSRWHQWLDOUDQJHDQGKDELWDWDYDLODEOHWRWKLVVSHFLHVRQWKH)RUHVW7KHSUREDELOLW\WKDWWKLVVSHFLHV ZRXOGEHSUHVHQWLQWKRVHVPDOODUHDVRISRWHQWLDOO\VXLWDEOHKDELWDWVSURSRVHGIRUKXWUHODWHGGLVWXUEDQFH ZKHQLWLVVRUDUHRQWKH:51)LVXQOLNHO\,QGLUHFWHIIHFWVDVVRFLDWHGZLWKWKLVSURMHFWZRXOGKDYHQR LPSDFWRQWKLVVSHFLHV,PSDFW]RQHVDVVRFLDWHGZLWKUHDVRQDEO\IRUHVHHDEOHSURMHFWVFRQVLGHUHGLQWKLV DQDO\VLV UHIHUWR%(6HFWLRQ ZRXOGFRQWULEXWHQRDGGLWLRQDOFXPXODWLYHHIIHFWVWRWKLVVSHFLHV EHFDXVHLPSDFW]RQHVDVVRFLDWHGZLWKWKRVHRWKHUSURMHFWVZRXOGQRWH[WHQGWRSRWHQWLDOKDELWDWIRUWKLV VSHFLHVWKDWFRXOGEHGLUHFWO\DQGLQGLUHFWO\DIIHFWHGE\$OWHUQDWLYHRQ1)6ODQG1HYHUWKHOHVVEHFDXVH SRWHQWLDOKRDU\EDWKDELWDWZRXOGEHUHPRYHGDQGDOWHUHG$OWHUQDWLYH³PD\DGYHUVHO\LPSDFW

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-62 126 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

LQGLYLGXDOVEXWLVQRWOLNHO\WRUHVXOWLQDORVVRIYLDELOLW\LQWKHSODQQLQJDUHDQRUFDXVHDWUHQGWRZDUG IHGHUDOOLVWLQJ´

%HFDXVHSRWHQWLDOKRDU\EDWKDELWDWZRXOGEHUHPRYHGDQGDOWHUHG$OWHUQDWLYHPD\DGYHUVHO\LPSDFW LQGLYLGXDOVEXWLVQRWOLNHO\WRUHVXOWLQDORVVRIYLDELOLW\LQWKHSODQQLQJDUHDQRUFDXVHDWUHQG WRZDUGIHGHUDOOLVWLQJ

$PHULFDQ0DUWHQ 7KHORFDOPDWXUHFORVHGFDQRS\ORGJHSROHVWDQGVWKDWGRPLQDWHPXFKRIWKHORZHUDQGPLGHOHYDWLRQV LQWKH6ZDQ5LYHUZDWHUVKHGGRQRWUHSUHVHQWSULPDU\PDUWHQKDELWDW3XUHVSUXFHILUVWDQGVUHSUHVHQWLQJ WKHSULPDU\KDELWDWRIWKLVVSHFLHVVKRXOGEHODUJHO\XQDIIHFWHGE\WKH03%HSLGHPLF

,QDGGLWLRQWR03%DIIHFWVGHVFULEHGXQGHUWKH1R$FWLRQ$OWHUQDWLYH$OWHUQDWLYHZRXOGDIIHFW PDUWHQVE\UHPRYLQJOLQHDUIRUHVWVWULSVZKLFKUHSUHVHQWIRUDJLQJKDELWDWEXWQRWGHQQLQJKDELWDW EDVHG RQQRWUHHFDYLWLHVGHWHFWHGLQFOHDUDQFHDUHDVGXULQJWKH-XO\VXUYH\WKDWFRXOGVXSSRUWDPDUWHQ GHQ OLNHO\H[WHQGLQJLQWRSRUWLRQVRIVHYHUDOLQGLYLGXDOV¶KRPHUDQJHV7KH$OWHUQDWLYHLPSDFWDUHDV UHSUHVHQWDQLQVLJQLILFDQWSURSRUWLRQRIWKHWRWDOSRWHQWLDOUDQJHDQGKDELWDWDYDLODEOHWRWKLVVSHFLHVRQWKH )RUHVWDQGZLWKLQLQGLYLGXDOKRPHUDQJHVRYHUODSSLQJWKHDFFHVVWUDLOFRUULGRUV%HFDXVHWKHUHZRXOGEH QRGHQWUHHUHPRYDO\RXQJRIWKH\HDUZRXOGQRWEHYXOQHUDEOHWRWUHHFOHDULQJDQGQR3')VZRXOGEH UHTXLUHGWRVFKHGXOHWUHHUHPRYDORXWVLGHRIWKH0DUFKWR-XQHGHQQLQJLQWHUYDO,PSOHPHQWDWLRQRI RWKHU3')VVKRXOGKDYHQRLPSDFWRQPDUWHQV

0DUWHQKDELWDWHIIHFWLYHQHVVPD\GHFOLQHLQDQDUHDVOLJKWO\ODUJHUWKDQWKHDUHDRIWUHHUHPRYDODVDUHVXOW RIIUDJPHQWDWLRQHIIHFWVDQGWUHHVNLLQJ7KHHIIHFWVRIWUHHVNLLQJRQWKHORFDOIRUHVWSUH\EDVHDUH XQFOHDUEXWDUHXQOLNHO\WREHEHQHILFLDO$GGLWLRQDODQGZLGHQHGDFFHVVWUDLOVZRXOGQRWUHVWULFWRUEORFN PDUWHQPRYHPHQWVDQGWKHUHVKRXOGEHQRPHDQLQJIXOHIIHFWVRQKDELWDWHIIHFWLYHQHVVQRZH[SHULHQFHG E\PDUWHQVLQWKHH[LVWLQJDUHD

,QGLUHFWHIIHFWVDVVRFLDWHGZLWKWKLVSURMHFWJHQHUDOO\OLPLWHGWRLQFUHDVHVLQGLVSHUVHGUHFUHDWLRQ H[WHQGLQJLQWRPDUWHQKDELWDWZRXOGKDYHQRDGGLWLRQDOLPSDFWVRQWKLVVSHFLHV

,PSDFW]RQHVDVVRFLDWHGZLWKUHDVRQDEO\IRUHVHHDEOHSURMHFWVFRQVLGHUHGLQWKLVDQDO\VLVOLPLWHGWRQRQ SURMHFWUHODWHGLQFUHDVHVLQGLVSHUVHGUHFUHDWLRQDQGFRQWLQXHGUHVLGHQWLDOEXLOGRXWLQWKH3URMHFW$UHD ZRXOGFRQWULEXWHDGGLWLRQDOSRWHQWLDOO\QHJDWLYHHIIHFWVWRPDUWHQKDELWDWDQGPRUWDOLW\LQWKHPDUWHQ DQDO\VLVDUHD+RZHYHUPDUWHQZRXOGSHUVLVWLQWKLVDQDO\VLVDUHD2WKHUUHDVRQDEO\IRUHVHHDEOHSURMHFWV FRQVLGHUHGLQWKLVDQDO\VLV UHIHUWR6HFWLRQLQWKH%( ZRXOGFRQWULEXWHQRDGGLWLRQDOFXPXODWLYH HIIHFWVWRWKLVVSHFLHVEHFDXVHLPSDFW]RQHVDVVRFLDWHGZLWKWKRVHRWKHUSURMHFWVZRXOGQRWH[WHQGWR SRWHQWLDOKDELWDWIRUWKLVVSHFLHVWKDWFRXOGEHGLUHFWO\DQGLQGLUHFWO\DIIHFWHGE\$OWHUQDWLYHRQ1)6 ODQG

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-63 127 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

5HJDUGLQJ$PHULFDQPDUWHQGLUHFWLQGLUHFWDQGFXPXODWLYHHIIHFWVRI$OWHUQDWLYHPD\LPSDFW LQGLYLGXDOVEXWDUHQRWOLNHO\WRUHVXOWLQDORVVRIYLDELOLW\LQWKHSODQQLQJDUHDQRUFDXVHDWUHQG WRZDUGIHGHUDOOLVWLQJ

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

,QGLUHFWHIIHFWVWRHONZDUUDQWLQJFRQVLGHUDWLRQIRUWKLVSURMHFWZRXOGEHWKRVHDVVRFLDWHGZLWKWKHHIIHFWV RIDQ\VHFRQGDU\RUVXEVHTXHQWGHYHORSPHQWGLVSHUVHGUHFUHDWLRQDQGKLJKZD\WUDIILFHIIHFWVFRQQHFWHG WRWKHDFWLRQDUHDWKDWZRXOGEHLQGXFHGRULQLWLDWHGE\RUUHVXOWIURP$OWHUQDWLYH

8QGHU$OWHUQDWLYHWKHSURSRVHG:HEHU*XOFK%DFNFRXQWU\+XWLVQRWH[SHFWHGWRJHQHUDWHDQ\ VHFRQGDU\GHYHORSPHQWIURPDGGLWLRQDOUHVLGHQWVRUHPSOR\HHV7HPSRUDU\HPSOR\HHVDQGFRQWUDFWRUV WKDWZRXOGLPSOHPHQWWKHSURMHFWFRPSRQHQWVZRXOGEHPRVWO\ORFDOLQFRXQW\FRPPXWHUVRUFRQWUDFWRUV WKDWRYHUQLJKWDWH[LVWLQJKRWHOV

$GGLWLRQDOGLVSHUVHGUHFUHDWLRQUHVXOWLQJIURPWKH3URSRVHG$FWLRQZRXOGEHFRQILQHGWRZLQWHUZKHQ IHZLIDQ\HONZRXOGEHSUHVHQWLQWKH3URMHFW$UHD

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-64 128 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

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

,QGLUHFWHIIHFWVWRDTXDWLFPDFURLQYHUWHEUDWHVZDUUDQWLQJFRQVLGHUDWLRQIRUWKLVSURMHFWZRXOGEHWKRVH DVVRFLDWHGZLWKWKHHIIHFWVRIDQ\VHFRQGDU\RUVXEVHTXHQWGHYHORSPHQWDQGGLVSHUVHGUHFUHDWLRQWKDW ZRXOGEHLQLWLDWHGE\RUUHVXOWIURP$OWHUQDWLYHWKDWZRXOGDIIHFWWKLVLQGLFDWRUJURXSRUZDWHUTXDOLW\ LQWKHDQDO\VLVDUHD$OWHUQDWLYHLVQRWH[SHFWHGWRJHQHUDWHDQ\VHFRQGDU\GHYHORSPHQWRUGLVSHUVHG UHFUHDWLRQHIIHFWVIURPDGGLWLRQDOUHVLGHQWVHPSOR\HHVRUJXHVWVWKDWZRXOGDIIHFWWKLVLQGLFDWRUJURXSRU ZDWHUTXDOLW\LQWKHDQDO\VLVDUHD

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-65 129 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

,QGLUHFWHIIHFWVWRDOOWURXWZDUUDQWLQJFRQVLGHUDWLRQIRUWKLVSURMHFWZRXOGEHWKRVHDVVRFLDWHGZLWKWKH HIIHFWVRIDQ\VHFRQGDU\RUVXEVHTXHQWGHYHORSPHQWDQGGLVSHUVHGUHFUHDWLRQWKDWZRXOGEHLQLWLDWHGE\ RUUHVXOWIURP$OWHUQDWLYHVDQGWKDWZRXOGDIIHFWWKLVLQGLFDWRUJURXSRUZDWHUTXDOLW\LQWKHDQDO\VLV DUHD$OWHUQDWLYHLVQRWH[SHFWHGWRJHQHUDWHDQ\VHFRQGDU\GHYHORSPHQWRUGLVSHUVHGUHFUHDWLRQHIIHFWV IURPDGGLWLRQDOUHVLGHQWVHPSOR\HHVRUJXHVWVWKDWZRXOGDIIHFWWKLVLQGLFDWRUJURXSRUZDWHUTXDOLW\RU TXDQWLW\LQWKHDQDO\VLVDUHD

&808/$7,9(())(&76

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

,QDGGLWLRQWRWKHDERYHJHQHUDODFWLRQVVSHFLILFSDVWSUHVHQWDQGUHDVRQDEO\IRUHVHHDEOHIXWXUHSURMHFWV DUHLGHQWLILHGLQ$SSHQGL[$0RVWRIWKHVHVSHFLILFSURMHFWVKDYHEHHQDSSURYHGDQGLPSOHPHQWHGDQG DUHQRZSDUWRIWKHHQYLURQPHQWDOEDVHOLQHFRQVLGHUHGXQGHULQGLYLGXDOVSHFLHVDFFRXQWVEHORZ $SSURYHGEXWXQLPSOHPHQWHGFRPSRQHQWVRIWKRVHSURMHFWVDUHDOVRFRQVLGHUHGWRKDYHEHHQ LPSOHPHQWHGDQGSDUWRIWKHHQYLURQPHQWDOEDVHOLQHWKDWPD\EHIXUWKHUDIIHFWHGE\$OWHUQDWLYHVDQG

7KHUHDUHQRUHDVRQDEO\IRUHVHHDEOHIXWXUHDFWLRQVRQQRQ1)6ODQGVZDUUDQWLQJFRQVLGHUDWLRQLQWKLV DQDO\VLVDOWKRXJKORFDOO\EXLOGRXWRILQGLYLGXDOQHLJKERUKRRGVZLWKLQWKH.H\VWRQH38' RULJLQDOO\ DSSURYHGLQ DQGLQSUHYLRXVO\DSSURYHGVXEGLYLVLRQVLQWKHXSSHU%OXH5LYHUFRQWLQXHV

7KUHDWHQHGDQG(QGDQJHUHG6SHFLHV &DQDGD/\Q[ :LWKUHVSHFWWRUHDVRQDEO\IRUHVHHDEOHSURMHFWVFRQVLGHUHGWKHDGGLWLYHORVVRIO\Q[KDELWDWDQGLPSDLUHG KDELWDWFRQQHFWLYLW\DVVRFLDWHGZLWK.H\VWRQH¶V'HUFXP0RXQWDLQ,PSURYHPHQWSODQDUHWHQWDWLYHO\ FRQVLGHUHGWREHDGYHUVH$GGLWLRQDOFRPSRQHQWVRIWKH.H\VWRQH5HVRUW0'3ZRXOGUHGXFHVSUXFHILU IRUHVWFRYHULPSDLUKDELWDWFRQQHFWLYLW\LQRWKHUSRUWLRQVRIWKHVRXWKHUQ6XPPLW&RXQW\O\Q[FRUULGRU H[WHQGLQJWKURXJK.H\VWRQH¶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of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV (:LOGOLIH

DQGGLVWXUEDQFHVLQDODUJHDUHDH[WHQGLQJIURPWKH.H\VWRQHEDVHDUHDWR,WKDWSDUWO\RYHUODSVWKH 0DQDJHPHQW$UHDFRQWDLQLQJWKHVRXWKHUQ6XPPLW&RXQW\O\Q[FRUULGRUQRUWKZHVWRI.H\VWRQHDQGLV HQWLUHO\ZLWKLQWKH/RYHODQG3DVV/\Q[/LQNDJH7KHFROOHFWLYHHIIHFWVRIWKHVHIXWXUHIHGHUDODFWLRQV FRXOGIXUWKHULPSDLUO\Q[KDELWDWFRQQHFWLYLW\WKURXJKVRXWKHUQ6XPPLW&RXQW\DQGFHQWUDO&RORUDGR DORQJWKHHDVWHUQPRVWDQGSRVVLEO\WKHPRVWLPSRUWDQWRIIRXUFRQWLQXRXVO\IRUHVWHGO\Q[FRUULGRUVRQ WKH:HVW6ORSH

56HQVLWLYHDQG0DQDJHPHQW,QGLFDWRU6SHFLHV

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-67 131 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV )9HJHWDWLRQ

) 9(*(7$7,21

6&23(2)$1$/<6,6

7KHSURMHFWDUHDLVORFDWHGRQWKHQRUWKDQGQRUWKZHVWHUQVORSHVRIWKHULGJHH[WHQGLQJQRUWKRII%DOG 0RXQWDLQ IHHW (OHYDWLRQVDVVRFLDWHGZLWKSURMHFWDUHDGLVWXUEDQFHDUHDVUDQJHIURP DSSUR[LPDWHO\IHHWDWWKHSURSRVHGSDUNLQJDUHDRQ)UHQFK*XOFK5RDGWRIHHWDWWKH SURSRVHG+XWVLWH'LIIHUHQWYHJHWDWLRQZDVGRFXPHQWHGIRUHDFKRIWKHVSHFLILFSURMHFWFRPSRQHQWV WKHUHIRUHHDFKDUHDLVGLVFXVVHGVHSDUDWHO\LQWKHDIIHFWHGHQYLURQPHQW

,GHQWLILFDWLRQRILQYDVLYHVSHFLHVLQWKHYLFLQLW\RIWKH3URMHFW$UHDDQGXVHRI%HVW0DQDJHPHQW3UDFWLFHV %03V WROLPLWWKHLUVSUHDG

$))(&7('(19,5210(17

1RWKUHDWHQHGRUHQGDQJHUHGSODQWVSHFLHVZHUHLGHQWLILHGRUKDYHKDELWDWZLWKLQWKHSURMHFWDUHD WKHUHIRUHRQO\FRPPRQYHJHWDWLRQDQG5HJLRQ 5 6HQVLWLYHVSHFLHVDUHGLVFXVVHGIXUWKHULQWKLV GRFXPHQW

3URSRVHG+XW3DUNLQJ

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³FXUUHQWO\XQVXLWDEOH´O\Q[KDELWDW7KHSURSRVHGSDUNLQJDUHDLVRQ1)6DQGSULYDWH ODQGV )LJXUH

6DOO\%DUEHU5RDG

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³RWKHU´DQGO\Q[KDELWDWDQGZLQWHUIRUDJLQJKDELWDW 7KLVDUHDUHSUHVHQWV³FXUUHQWO\XQVXLWDEOH´O\Q[KDELWDW7KH6DOO\%DUEHU5RDGLVRQSULYDWHDQG1)6 ODQGV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-68 132 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV )9HJHWDWLRQ

1LJKWPDUHRQ%DOG\7UDLO

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³RWKHU´DQGO\Q[KDELWDWZLWKORFDODUHDVRI ZLQWHUIRUDJLQJKDELWDW1RQHVWFDYLWLHVZHUHREVHUYHGLQDQ\WUHHRUVQDJDORQJWKHWUDLO7KLVSRUWLRQRI WKH1LJKWPDUHRQ%DOG\WUDLOLVRQ6XPPLW&RXQW\DQGSULYDWHODQGV

([LVWLQJ8SSHU7UDLORI7HDUV

,QWKH7UDYHO0DQDJHPHQW3ODQWKHH[LVWLQJ8SSHU7UDLORI7HDUV )LJXUH±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³RWKHU´O\Q[KDELWDW1R QHVWFDYLWLHVZHUHREVHUYHGLQDQ\WUHHRUVQDJDORQJWKHWUDLO7KHH[LVWLQJ8SSHU7UDLORI7HDUVLVRQ 1)6SULYDWHDQG6XPPLW&RXQW\ODQGV

1HZ7UDLO([WHQVLRQWRWKH+XW

)URPDSRLQWRQWKHH[LVWLQJ1LJKWPDUHRQ%DOG\WUDLODQHZPLOHWUDLOVHJPHQWWRWKHKXWLV SURSRVHG 6HJPHQWV&DQG(LQ)LJXUH 7KDWWUDLOVHJPHQWZRXOGFURVVWKURXJKWKUHHIRUHVWW\SHV7KH SUR[LPDOPLOHRIWUDLO SUR[LPDOSDUWRI6HJPHQW&LQ)LJXUH ZRXOGH[WHQGWKURXJKDPDWXUH FORVHGDQGRSHQFDQRS\ %DQG$ KLVWRULFDOO\ORJJHGPL[HGFRQLIHUVWDQGZLWKDORFDODUHDRIGHQVH FORVHGFDQRS\SROHVWDJH &GRJKDLU ORGJHSROHSLQH7KLVVHJPHQWFRQWDLQVDPXOWLOD\HUHGXQGHUVWRU\ =REEH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-69 133 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV )9HJHWDWLRQ

RI6WDJHDQGWUHHVDORZWRPHGLXPVQDJGHQVLW\DORZGHQVLW\RIGRZQHG&:'PHGLXP/+&) GHQVLW\UDQJLQJIURPEHORZWRDERYHSHUFHQWKRUL]RQWDOFRYHUDQGLVPRVWO\ZLQWHUIRUDJLQJKDELWDW ZLWKSDWFKHVRIRWKHU³RWKHU´O\Q[KDELWDW EDVHGRQWKUHHVDPSOHSRLQWV 7KHPLGGOHPLOHWUDLO VHJPHQW SDUWVRI6HJPHQWV&>GLVWDO@DQG(>SUR[LPDO@LQ)LJXUH ZRXOGJRWKURXJKDQRSHQFDQRS\ SROHVWDJH $ KLVWRULFDOO\ORJJHGORGJHSROHVWDQGZLWKQRPXOWLOD\HUHGXQGHUVWRU\QRVQDJVDORZ GHQVLW\RI&:'PHGLXP/+&)GHQVLW\ZLWKOHVVWKDQSHUFHQWKRUL]RQWDOFRYHUWKDWLVEHVW FKDUDFWHUL]HGDV³RWKHU´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

+XW6LWH

7KH:HEHU*XOFKEDFNFRXQWU\KXWVLWHDWIHHWLVORFDWHGLQDQKLVWRULFDOO\ORJJHGPHDGRZ UHIHU WR)LJXUH 7KHPHDGRZFRQWDLQLQJWKHKXWVLWHLV³QRQKDELWDW´IRUO\Q[DQGFRQWDLQVVPDOO H[SORUDWRU\VXUIDFHPLQLQJDGLWV$DFUHERXOGHUILHOGLVFRQWLJXRXVWRWKHQRUWKZHVW%H\RQGWKH ERXOGHUILHOGWRWKHQRUWKZHVWDQGEH\RQGWKHPHDGRZWRWKHVRXWKHDVWLVDVDYDQQDK OHVVWKDQSHUFHQW FDQRS\FORVXUH RISROHVWDJH VSUXFHDQGORGJHSROHWUHHVFODVVLILHGDVIRUEODQGDQGILHOGYHULILHG³QRQ KDELWDW´2WKHUZLVHWKHVLWHLVVXUURXQGHGE\PDWXUHFORVHGDQGRSHQFDQRS\ %DQG$ VSUXFHILU IRUHVWWKDWLVHIIHFWLYHZLQWHUIRUDJLQJKDELWDWLIQRWGHQQLQJKDELWDW7KHKXWVLWHLVHQWLUHO\RQ1)6ODQGV

56HQVLWLYH3ODQW6SHFLHV

)RUHVW6HUYLFH5HJLRQ7ZR 5 KDVGHVLJQDWHG³VHQVLWLYHVSHFLHV´UHSUHVHQWLQJVSHFLHVGHFOLQLQJLQ QXPEHURURFFXUUHQFHRUZKRVHKDELWDWLVGHFOLQLQJHLWKHURIZKLFKFRXOGOHDGWRIHGHUDOOLVWLQJLIDFWLRQ LVQRWWDNHQWRUHYHUVHWKHWUHQGDQGVSHFLHVZKRVHKDELWDWRUSRSXODWLRQLVVWDEOHEXWOLPLWHG)URPWKH XSGDWHG5OLVWDVXEVHWRIVHQVLWLYHVSHFLHVLQFOXGLQJSODQWVZDVGHWHUPLQHGWREHSUHVHQWRU SRWHQWLDOO\SUHVHQWRQWKH:51)3ODQWVXUYH\VDGHTXDWHO\FRQVLGHUHGDOOSODQWVRQWKHFXUUHQW:51) 5VSHFLHVOLVW

86'$)RUHVW6HUYLFH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-70 134 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV )9HJHWDWLRQ

7DEOH) 5HJLRQ6HQVLWLYH3ODQW6SHFLHV3RWHQWLDO2FFXUUHQFHDQG+DELWDW'HVFULSWLRQ &RPPRQ1DPH6FLHQWLILF1DPH 3UH)LHOG3RWHQWLDO2FFXUUHQFH +DELWDW'HVFULSWLRQ 6HDSLQN$UPHULDPDULWLPDVVSVLELULFD 1RKDELWDW :HWVDQG\DOSLQHVORSHV¶±¶ 3DUNPLONYHWFK$VWUDJDOXVOHSWDOHXV 1RKDELWDW :HWPHDGRZVDVSHQ*XQ%DVLQ0LGGOH3DUN 7ULDQJOHOREHPRRQZRUW%RWU\FKLXPDVFHQGHQV 3RWKDELWDW 0RQWDQHZLOORZZHWODQGVDQGUXGHUDOKDELWDWV 6OHQGHUPRRQZRUW%RWU\FKLXPOLQHDUH 3RWKDELWDW 0RQWDQHWKURXJKVXEDOSLQHUXGHUDOKDELWDWV 3HFXOLDUPRRQZRUW%RWU\FKLXPSDUDGR[XP 3RWKDELWDW 0RQWDQHWKURXJKVXEDOSLQHUXGHUDOKDELWDWV 6PRRWKURFNFUHVV%UD\DJODEHOOD 1RKDELWDW 6SDUVHFDOFDUHRXVDOSLQHJUDYHOV!¶ /HVVHUSDQLFOHGVHGJH&DUH[GLDQGUD 1RKDELWDW 6XEDOSLQHZHWODQGVZHWPHDGRZVZFDUUV /LYLGVHGJH&DUH[OLYLGD 1RKDELWDW )HQV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-71 135 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV )9HJHWDWLRQ

',5(&7$1',1',5(&7(19,5210(17$/&216(48(1&(6 $OWHUQDWLYH±1R$FWLRQ

$OWHUQDWLYHLVDWUXH1R$FWLRQ$OWHUQDWLYHDQGEHFDXVHQRJURXQGGLVWXUEDQFHLVSURSRVHGXQGHUWKH1R $FWLRQ$OWHUQDWLYHWKHUHLVQRSRWHQWLDOWRDIIHFWYHJHWDWLRQUHVRXUFHVDVDUHVXOWRIVHOHFWLQJ $OWHUQDWLYH

$OWHUQDWLYH±3URSRVHG$FWLRQ

9HJHWDWLRQFRPPXQLWLHVWKDWZRXOGEHDIIHFWHGE\:HEHU*XOFKEDFNFRXQWU\KXWFRPSRQHQWVDUH TXDQWLILHGLQ7DEOH))RUDOOODQGRZQHUVKLSV$OWHUQDWLYHZRXOGUHVXOWLQWKHSHUPDQHQWORVVRI DFUHVRIIRUHVWDQGDFUHRIIRUEODQGVDQGWHPSRUDU\GLVWXUEDQFHVWRDFUHRIIRUEODQGVDURXQGWKH KXWWRWDOLQJDFUHV7UHHUHPRYDOIRUWUDLOV DFUHV DQGWKHSDUNLQJORW DFUH ZRXOGDIIHFW DFUHRIVSUXFHILUIRUHVWDFUHRIPL[HGFRQLIHUIRUHVWDQGDFUHRIORGJHSROHSLQH 7HPSRUDULO\GLVWXUEHGDUHDVDURXQGWKHKXWZRXOGEHUHYHJHWDWHGZLWKD)RUHVW6HUYLFHDSSURYHGVHHG PL[

7DEOH) 9HJHWDWLRQ7\SHVIRUDOO/DQG2ZQHUVKLS $FUHV,PSDFWHG 9HJHWDWLRQ7\SH $OO/DQGV 1)6/DQGV2QO\ 6SUXFHILU /RGJHSROH3LQH 0L[HG&RQLIHU )RUEODQGV 727$/ 6RXUFH7KRPSVRQE

56HQVLWLYH3ODQW6SHFLHV 7KLUW\WKUHHVSHFLHVRIVHQVLWLYHSODQWVDUHNQRZQRUH[SHFWHGWRRFFXURQWKH:51)7KHVHQVLWLYH SODQWDQDO\VLVDUHDIRUWKLVSURMHFWH[WHQGVWRWKHERXQGDULHVRISURSRVHGGLVWXUEDQFHDUHDV%DVHGRQ SODQWVXUYH\VRIWKHSURMHFWDUHDVXUYH\VRISURSRVHGGLVWXUEDQFHDUHDVVXUYH\VRIDGMDFHQWDUHDVZKHUH SULRUDQGFXUUHQW5SODQWVZHUHSUHYLRXVO\ORFDWHGKDELWDWVWKDWZRXOGEHDIIHFWHGLQWKHSURMHFWDUHD DQGVSHFLHV¶KDELWDWDIILQLWLHVILYH5VHQVLWLYHSODQWVSHFLHVWULDQJOHOREHPRRQZRUW %RWU\FKLXP DVFHQGHQV VOHQGHUPRRQZRUW %OLQHDUH SHFXOLDUPRRQZRUW %SDUDGR[XP \HOORZODG\¶VVOLSSHU &\SULSHGLXPSDUYLIORUXP DQGGZDUIUDVSEHUU\ 5XEXVDUFWLFXVVVSDFDXOLV KDGSRWHQWLDOO\VXLWDEOH KDELWDWLQWKHSURMHFWDUHD7KHVHVSHFLHVDUHGLVFXVVHGLQGLYLGXDOO\EHORZWRSURYLGHWKHUHTXLUHG GRFXPHQWDWLRQ7KHUHPDLQLQJ5SODQWVSHFLHVGRQRWRFFXULQWKHKDELWDWVSUHVHQWLQWKHSURMHFWDUHD

3URFWRU

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-72 136 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV )9HJHWDWLRQ

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¶V3HDNZKLWORZ JUDVV 'UDEDJUD\DQD :HEHU¶VGUDED 'UDEDZHEHULL URXQGOHDIVXQGHZ 'URVHUDURWXQGLIROLD JLDQW KHOOHERULQH(SLSDFWLVJLJDQWHD GURSOHDIEXFNZKHDW (ULRJRQXPH[LOLIROLXP $OWDLFRWWRQJUDVV (ULRSKRUXPDOWDLFXPYDUQHRJDHXP &KDPLVVR¶VFRWWRQJUDVV (ULRSKRUXPFKDPLVVRQLV VOHQGHU FRWWRQJUDVV (ULRSKRUXPJUDFLOH +DOOIHVFXH )HVWXFDKDOOLL VLPSOHERJVHGJH .REUHVLD VLPSOLFLXVFXOD &RORUDGRWDQV\DVWHU 0DFKDHUDQWKHUDFRORUDGRHQVLV .RW]HEXH¶VJUDVVRI3DUQDVVXV 3DUQDVVLDNRW]HEXHL +DUULQJWRQSHQVWHPRQ 3HQVWHPRQKDUULQJWRQLL 3RUWHUIHDWKHUJUDVV 3WLODJURVWLV SRUWHUL LFHFROGEXWWHUFXS 5DQXQFXOXVNDUHOLQLL VDJHOHDIZLOORZ 6DOL[FDQGLGD DXWXPQZLOORZ 6DOL[ VHULVVLPD QDUURZOHDISHDWPRVV 6SKDJQXPDQJXVWLIROLXP %DOWLFVSKDJQXP 6SKDJQXPEDOWLFXP VXQORYLQJPHDGRZUXH 7KDOLFWUXPKHOLRSKLOXP OHVVHUEODGGHUZRUW 8WULFXODULDPLQRU DQG$PHULFDQ FUDQEHUU\EXVK 9LEXUQXPRSXOXVYDUDPHULFDQXP DQGWKH\DUHGURSSHGIURPIXUWKHUFRQVLGHUDWLRQ KHUHLQ 7DEOH)

7DEOH) 'HWHUPLQDWLRQ6XPPDU\RI(IIHFWVRQ56HQVLWLYH3ODQW6SHFLHV 'HWHUPLQDWLRQ &RPPRQQDPH6FLHQWLILFQDPH $OWHUQDWLYH $OWHUQDWLYH 6HDSLQN$UPHULDPDULWLPDVVSVLELULFD 1, 1, 3DUNPLONYHWFK$VWUDJDOXVOHSWDOHXV 1, 1, 7ULDQJOHOREHPRRQZRUW%RWU\FKLXPDVFHQGHQV 1, 0$,, 6OHQGHUPRRQZRUW%RWU\FKLXPOLQHDUH 1, 0$,, 3HFXOLDUPRRQZRUW%RWU\FKLXPSDUDGR[XP 1, 0$,, 6PRRWKURFNFUHVV%UD\DJODEHOOD 1, 1, /HVVHUSDQLFOHGVHGJH&DUH[GLDQGUD 1, 1, /LYLGVHGJH&DUH[OLYLGD 1, 1,

7DEOH) 'HWHUPLQDWLRQ6XPPDU\RI(IIHFWVRQ56HQVLWLYH3ODQW6SHFLHV 'HWHUPLQDWLRQ &RPPRQQDPH6FLHQWLILFQDPH $OWHUQDWLYH $OWHUQDWLYH &RORUDGRWDQV\DVWHU0DFKDHUDQWKHUDFRORUDGRHQVLV 1, 1, .RW]HEXH¶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¶UDQJHRUHOHYDWLRQDOGLVWULEXWLRQDQGWKH3URSRVHG$FWLRQZRXOG KDYHQRLPSDFWRQWKRVHVSHFLHV6SHFLHVLQEROGDUHSRWHQWLDOO\SUHVHQWDQGRUDUHGLVFXVVHGLQGLYLGXDOO\LQWKHWH[W 1, 1RLPSDFW 0$,, PD\LPSDFWLQGLYLGXDOVEXWLVQRWOLNHO\WRUHVXOWLQDORVVRIYLDELOLW\RQWKHSODQQLQJDUHDQRUFDXVHDWUHQGWR IHGHUDOOLVWLQJ 'HWHUPLQDWLRQVLQWKLVWDEOHRQO\FRQVLGHU1)6ODQGVWKDWPD\EHGLUHFWO\LQGLUHFWO\RUFXPXODWLYHO\DIIHFWHGE\WKH3URSRVHG $FWLRQZKLFK5VSHFLHVGHWHUPLQDWLRQVDUHEDVHGRQ

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of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV )9HJHWDWLRQ

VXLWDEOHWKH\ZRXOGEHRFFXSLHG7KHUHIRUHLPSDFWVWRXQRFFXSLHGKDELWDWVZRXOGKDYH³QRLPSDFW´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

'ZDUI5DVSEHUU\ :KLOHSRUWLRQVRIWKHSURMHFWDUHDRFFXULQWKHOLIH]RQHDQGDWHOHYDWLRQVLQKDELWHGE\WKLVVSHFLHVWKLV VSHFLHVDQGLQGLFDWRUVSHFLHVIRULWZHUHQRWORFDWHGGXULQJSODQWVXUYH\VDQGLWLVFRQVLGHUHGWREHDEVHQW LQWKHSURMHFWDUHD'LUHFWLQGLUHFWDQGFXPXODWLYHHIIHFWVRIWKH3URSRVHG$FWLRQLQFOXGLQJWKH LPSOHPHQWDWLRQRI3')DQGHIIHFWVDVVRFLDWHGZLWKRWKHUUHDVRQDEO\IRUHVHHDEOHSURMHFWVFRQVLGHUHGLQ WKLVDQDO\VLVZRXOGKDYHQRLPSDFWRQWKLVVSHFLHVDQGLWZLOOQRWEHGLVFXVVHGIXUWKHULQWKLVGRFXPHQW

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-75 139 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV )9HJHWDWLRQ

&808/$7,9(())(&76

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

$OWKRXJKWKHUHDUHQRUHDVRQDEO\IRUHVHHDEOHIXWXUHDFWLRQVRQQRQ1)6ODQGVZDUUDQWLQJFRQVLGHUDWLRQ LQWKLVDQDO\VLVORFDOO\EXLOGRXWRILQGLYLGXDOQHLJKERUKRRGVZLWKLQWKH.H\VWRQH3ODQQHG8QLW 'HYHORSPHQW RULJLQDOO\DSSURYHGLQ DQGLQSUHYLRXVO\DSSURYHGVXEGLYLVLRQVLQWKHXSSHU%OXH 5LYHUFRQWLQXHV

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-76 140 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV *6RLO5HVRXUFHV

* 62,/5(6285&(6

6&23(2)$1$/<6,6

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

)25(673/$1',5(&7,21

7KH)RUHVW6HUYLFH:DWHU&RQVHUYDWLRQ3UDFWLFHV+DQGERRN :&3+ SURYLGHVVRLOPDQDJHPHQW PHDVXUHVWRJXLGHODQGWUHDWPHQWVZLWKLQWKH:51)7KHIROORZLQJPHDVXUHVDSSO\WRWKHSURSRVHG :HEHU*XOFKEDFNFRXQWU\KXWSURMHFW

6HGLPHQW&RQWURO

&RQVWUXFWURDGVDQGRWKHUGLVWXUEHGVLWHVWRPLQLPL]HVHGLPHQWGLVFKDUJHLQWRVWUHDPVODNHV DQGZHWODQGV

6WDELOL]HDQGPDLQWDLQURDGVDQGRWKHUGLVWXUEHGVLWHVGXULQJDQGDIWHUFRQVWUXFWLRQWRFRQWURO HURVLRQ

6RLO4XDOLW\

0DLQWDLQRULPSURYHORQJWHUPOHYHOVRIRUJDQLFPDWWHUDQGQXWULHQWVRQDOOODQGV

5HIHUWR7DEOHLQ&KDSWHUIRUDFRPSOHWHWDEOHRI3')VDQG%03VWKDWDUHGHVLJQHGWRPLQLPL]HWKH UHVRXUFHLPSDFWVRISURSRVHGSURMHFWV

$))(&7('(19,5210(17

7KH3URMHFW$UHDLVORFDWHGRQ%DOG0RXQWDLQWKHKHDGZDWHUVRI)UHQFK&UHHN7KHDUHDUDQJHVIURP DSSUR[LPDWHO\WRIHHWDERYHPHDQVHDOHYHO DPVO ZLWKORZHUSRUWLRQVEHLQJKHDYLO\ IRUHVWHGDQGXSSHUSRUWLRQVWKDWDUHDERYHWUHHOLQH7KHDYHUDJHWHPSHUDWXUHLQWKHZLQWHUPRQWKVLV DSSUR[LPDWHO\GHJUHHV)DKUHQKHLWDYHUDJHWHPSHUDWXUHLQWKHVXPPHULVDSSUR[LPDWHO\GHJUHHV

6XPPLW&RXQW\ 86'$)RUHVW6HUYLFH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-77 141 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV *6RLO5HVRXUFHV

)DKUHQKHLW7KHFOLPDWHDQGHOHYDWLRQRIWKHSURMHFWDUHDOLPLWWKHUDWHRIVRLOIRUPDWLRQ+LVWRULFDOO\WKH 3URMHFW$UHDKDVEHHQGHYHORSHGIRUPLQLQJORJJLQJDQGUHFUHDWLRQPDQ\URDGVDQGWUDLOVVWLOOSURYLGH ERWKPRWRUL]HGDQGQRQPRWRUL]HGDFFHVVDOWKRXJKPLQLQJDQGORJJLQJLQWKHDUHDKDVFHDVHG5RDGVDQG WUDLOVLQWKH3URMHFW$UHDUHTXLUHPLQLPDOPDQDJHPHQWEH\RQGLQVWDOODWLRQRISURSHUGUDLQDJHVXFKDV UROOLQJGLSVZDWHUEDUVDQGSHULRGLFPLQRUVXUIDFHZRUNWRILOOSRWKROHVRUDGMXVWGUDLQDJHSDWWHUQV

6RLOVLGHQWLILHGZLWKLQWKH3URMHFW$UHDFDQEHJURXSHGLQWRIRXUVRLOPDSXQLWV7KHVHDUHGLVSOD\HGLQ 7DEOH*'UDLQDJHFODVVUDWLQJVIRUWKHVHVRLOVDUHJHQHUDOO\VRPHZKDWH[FHVVLYHO\GUDLQHGKDYH PRGHUDWHO\UDSLGSHUPHDELOLW\DQGVORZUXQRIISRWHQWLDO5HYHJHWDWLRQOLPLWDWLRQVUDQJHIURPPRGHUDWHWR VHYHUHGXHWRVORSHDQGORZLQKHUHQWIHUWLOLW\ZLWKLQWKH3URMHFW$UHD6ORSHLVDSULPDU\IDFWRUDIIHFWLQJ VRLOVLQWKH3URMHFW$UHDOLPLWLQJVORSHVWDELOLW\GHSWKRIWRSVRLODQGLQFUHDVLQJWKHHURVLRQKD]DUG

7DEOH* 6RLO0DQDJHPHQW8QLWV,GHQWLILHGZLWKLQWKH3URMHFW$UHD 6RLO0DQDJHPHQW8QLW .ZD

%±/HLJKFDQIDPLO\ORDP\VNHOHWDOPL[HGVXSHUDFWLYH7\SLF'\VWURFU\HSWV±VORSHV

&±/HJXDOW7ROE\IDPLOLHVFRPSOH[VDQG\VNHOHWDOPLFDFHRXVVKDOORZ7\SLF&U\RUWKHQWV /HJDXOW RUPL[HG7\SLF'\VWURFU\HSWV 7ROE\ ±VORSHV ) 6) ±*UHQDGLHUJUDYHOO\ORDP/RDP\VNHOHWDOLVRWLF(QWLF+DSORFU\RGV±VORSHV

±+LVWLF&U\DTXROOVQHDUO\OHYHO 1RWUDWHG

D7KHIDFWRU.UHSUHVHQWVWKHVRLO¶VVXVFHSWLELOLW\WRHURVLRQLQWKHLUSORWFRQGLWLRQEDVHGRQVRLOWH[WXUH6RLOVWKDWDUHUHVLVWDQW WRHURVLRQKDYHORZ.YDOXHV WR GLVSOD\PRGHUDWHHURVLRQDUHLQWKHPLGGOHRIWKHUDQJH WR DQGKLJKO\ HURGLEOHVRLOVWHQGWRKDYHYDOXHVJUHDWHUWKDQ 6RXUFH1DWXUDO5HVRXUFHV&RQVHUYDWLRQ6HUYLFH

6XUIDFHDQGVXEVXUIDFHVRLOHURGLELOLW\LVORZWRPRGHUDWHZLWKLQWKH3URMHFW$UHDZLWK.IDFWRU .Z YDOXHVRIVXUIDFHVRLOKRUL]RQVUDQJLQJIURPWR+LJKHUHURVLRQULVNUDWLQJVRZHWR VORSHHURGLELOLW\8VLQJWKHZKROHVRLO ZVXEVFULSW .IDFWRUYDOXHVEHVWUHIOHFWQDWXUDOVRLOFRQGLWLRQV LQWKHILHOGDVURFNIUDJPHQWVHUYHWR³DUPRU´VRLODQGPDNHWKHPOHVVHURGLEOHRYHUDOO

6RLORUJDQLFPDWWHUFDQDOVREHUHODWHGWRVRLOHURGLELOLW\DVRUJDQLFKRUL]RQVDOORZLQILOWUDWLRQDQGSURYLGH SURGXFWLYHVRLOVIRUVWDELOL]LQJYHJHWDWLRQ0DLQWHQDQFHRIVRLORUJDQLFPDWWHUDQGVXUIDFH2DQG$ KRUL]RQLQWHJULW\PLQLPL]HVHURVLRQFRPSDFWLRQDQGK\GURORJ\SUREOHPVZLWKLQDSURMHFWDUHD)LHOG VXUYH\VUHYHDOHGQRSHGHVWDOVULOOVRURWKHUVLJQVRIPDMRUVRLOHURVLRQ/DFNLQJFRPPRQVLJQVRIVXUIDFH HURVLRQVXJJHVWVWKDWWKHUHODWLYHO\VKDOORZRUJDQLFPLQHUDOKRUL]RQVDQGSRURXV%DQG&KRUL]RQVDOORZ IRUVXIILFLHQWLQILOWUDWLRQGXULQJVQRZPHOWUXQRIIDQGVXPPHUUDLQHYHQWV 1DWXUDO5HVRXUFHV&RQVHUYDWLRQ6HUYLFH 0F&RUPLFNHWDO )UDQ]OXHEEHUV0F0XOOHQ

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-78 142 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV *6RLO5HVRXUFHV

7KHGHSWKRIVRLORUJDQLFPDWWHUZLWKLQWKH3URMHFW$UHDLVDSSUR[LPDWHO\LQFKHV WKHSURILOHUHYHDOHG WRLQFKHV$KRUL]RQDQGWRLQFKHV%KRUL]RQ 6DPSOHVZHUHWDNHQZLWKVRLOPDSXQLW) 6) )RUPDWLRQRIWRSVRLOVLQWKLVDUHDLVOLPLWHGE\WKHFOLPDWHDQGYHJHWDWLRQDQGWKHUHIRUHVRLOIRUPDWLRQLV OLPLWHG)RUDGGLWLRQDOVRLOFKDUDFWHULVWLFVUHIHUWRWKHILHOGQRWHVFRQWDLQHGLQWKH3URMHFW)LOH

',5(&7$1',1',5(&7(19,5210(17$/&216(48(1&(6 $OWHUQDWLYH±1R$FWLRQ

%HFDXVHQRJURXQGGLVWXUEDQFHLVLQFOXGHGLQ$OWHUQDWLYHWKHUHLVQRSRWHQWLDOWRDIIHFWVRLOUHVRXUFHV ZLWKLQWKHSURMHFWDUHDDVDUHVXOWRIWKH1R$FWLRQ$OWHUQDWLYH

$OWHUQDWLYH±3URSRVHG$FWLRQ

,PSOHPHQWDWLRQRIWKH3URSRVHG$FWLRQZRXOGUHVXOWLQDSSUR[LPDWHO\DFUHVRIGLVWXUEDQFHIURPWUDLO FRQVWUXFWLRQWKHSDUNLQJORWH[SDQVLRQDQGFRQVWUXFWLRQRIWKHKXW7KHVHDUHDVZRXOGEHJUDGHGDQG FRPSDFWHGDQGZLWKWKHH[FHSWLRQRIWKHDUHDVXUURXQGLQJWKHKXW ZKLFKZRXOGEHUHKDELOLWDWHGDQG UHYHJHWDWHG ZRXOGEHFRQYHUWHGWRLPSHUPHDEOHVXUIDFHV7KLVZRXOGUHVXOWLQDORVVRIVRLOUHVRXUFHV ZLWKLQWKHVRLOPDQDJHPHQWXQLWKRZHYHUGXHWRWKHPLQRUDPRXQWRIGLVWXUEDQFHZLWKLQWKHVHXQLWVRQ WKH:51)WKLVOHYHORIORVVZRXOGQRWDIIHFWDQ\RIWKHVRLOPDQDJHPHQWXQLWVDVDZKROH

7DEOH* 6RLO0DQDJHPHQW8QLWV,GHQWLILHGZLWKLQWKH3URMHFW$UHDXQGHU$OWHUQDWLYH 6RLO0DQDJHPHQW8QLW $UHD DFUH %±/HLJKFDQIDPLO\ORDP\VNHOHWDOPL[HGVXSHUDFWLYH7\SLF'\VWURFU\HSWV WUDLO ±VORSHV &±/HJXDOW7ROE\IDPLOLHVFRPSOH[VDQG\VNHOHWDOPLFDFHRXVVKDOORZ7\SLF WUDLO &U\RUWKHQWV /HJDXOW RUPL[HG7\SLF'\VWURFU\HSWV 7ROE\ ±VORSHV KXW ) 6) ±*UHQDGLHUJUDYHOO\ORDP/RDP\VNHOHWDOLVRWLF(QWLF+DSORFU\RGV SDUNLQJ ±VORSHV WUDLO ±+LVWLF&U\DTXROOVQHDUO\OHYHO SDUNLQJ

727$/ ,PSOHPHQWDWLRQRIWKHIROORZLQJVRLOPDQDJHPHQWUHTXLUHPHQWVDQG3'&VZRXOGPLQLPL]HHURVLRQDQG LPSDFWVWRWRSVRLOV

x 6WDELOL]HDQGPDLQWDLQGLVWXUEHGDUHDVVXFKDVWKHSDUNLQJORWWUDLODQGWKHKXWVLWHGXULQJDQG DIWHUFRQVWUXFWLRQWRFRQWUROHURVLRQ

x &RQVWUXFWWKHSDUNLQJORWWUDLODQGKXWVLWHWRPLQLPL]HVHGLPHQWGLVFKDUJHLQWRVWUHDPVODNHV DQGZHWODQGVDQG

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-79 143 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV *6RLO5HVRXUFHV

x 0DLQWDLQRULPSURYHORQJWHUPOHYHOVRIRUJDQLFPDWWHUDQGQXWULHQWVRQDOOODQGV6WRFNSLOH WRSVRLODQGUHWXUQVXUIDFHVRLOVDIWHUFRQVWUXFWLRQWRUHVWRUHVLWHRUJDQLFPDWWHUZKHUHSRVVLEOH VXUURXQGLQJKXWSDUNLQJORWDQGWUDLOGLVWXUEDQFH

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

0DQDJHPHQWUHTXLUHPHQWVDQG3'&VLGHQWLILHGWRPLQLPL]HLPSDFWVWRZDWHUVKHGZRXOGIXUWKHUGHFUHDVH SRWHQWLDOVRLODQGZDWHUVKHGLPSDFWV5HIHUWR&KDSWHU6HFWLRQ(±0DQDJHPHQW5HTXLUHPHQWVDQG 3URMHFW'HVLJQ)HDWXUHV,QFRUSRUDWHGLQWR$OWHUQDWLYH

&808/$7,9(())(&76

$VGLVFXVVHGEULHIO\DERYH DOVRUHIHUWR&KDSWHU6HFWLRQ+±:DWHU5HVRXUFHV SDVWPLQLQJDQG ORJJLQJUHVXOWLQJLQJUDGHGDQGFRPSDFWHGURDGSULVPVORJJLQJDQGPLQLQJDFFHVVURXWHVDQG H[SORUDWRU\PLQLQJSLWVKDYHDIIHFWHGWKHVRLOVUHVRXUFHLQWKHSURMHFWDUHD*HQHUDOO\LPSDFWVFDQEHVHHQ DVLQFUHDVHGVRLOFRPSDFWLRQDQGORVVRIRUJDQLFVRLOVZLWKLQWKHVRLOPDSXQLW'XHWRWKHPLQLPDOHIIHFWV RIWKHSURSRVHGDFWLRQRQWKHVRLOVUHVRXUFHDQGEHFDXVHQRRWKHUSUHVHQWRUIXWXUHIRUHVHHDEOHSURMHFWV ZLWKLQWKHDUHDKDYHEHHQLGHQWLILHGDWWKLVWLPHWKHUHDUHQRFXPXODWLYHHIIHFWVWRWKHVRLOVUHVRXUFH

1DWXUDO5HVRXUFHV&RQVHUYDWLRQ6HUYLFH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-80 144 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV +:DWHU5HVRXUFHV

+ :$7(55(6285&(6

6&23(2)$1$/<6,6

7KH$QDO\VLV$UHDIRUZDWHUUHVRXUFHVIRFXVHVRQWKH)UHQFK*XOFKSRUWLRQRIWKH8SSHU%OXH:DWHUVKHG 7KHSURSRVHGKXWSURMHFWZRXOGRFFXURQWKHQRUWKHUQSRUWLRQRI%DOG0RXQWDLQDWDSSUR[LPDWHO\ IHHWDERYHPHDQVHDOHYHO DPVO %DOG0RXQWDLQLVWKHVLWHRIWKHKHDGZDWHUVRI)UHQFK*XOFKDQG:HEHU *XOFKWKHWZRSULPDU\SHUHQQLDOVWUHDPVLQWKH$QDO\VLV$UHD7KHERXQGDU\RIWKH$QDO\VLV$UHD VWUHWFKHVIURPWKHKHDGZDWHUVRI)UHQFKDQG:HEHUJXOFKHVQHDUWKHKXWVLWHDQGDSSUR[LPDWHO\ PLOHVGRZQVWUHDPWRWKH%OXH5LYHU

7KH3URMHFW$UHDIRUWKHZDWHUUHVRXUFHLVOLPLWHGWRWKHGLUHFWLPSDFWVIURPJURXQGGLVWXUEDQFH DVVRFLDWHGZLWKWKHSURSRVHGSURMHFWV WKHSDUNLQJORWKLNLQJDQGDGPLQLVWUDWLYHDFFHVVURXWHVDQG FRQVWUXFWLRQDQGRSHUDWLRQVRIWKHKXW

)25(673/$1',5(&7,21

3XUVXDQWWRWKH)RUHVW3ODQDVDPHQGHGVWUHDPKHDOWKVWDQGDUGVDQG3'&DUHPDQGDWHGE\WKH5 :&3+7KH:&3+FRQWDLQVVHYHUDO0DQDJHPHQW0HDVXUHVRIUHOHYDQFHWRWKLVSURMHFWUHJDUGLQJ VWUHDPKHDOWKDQGZDWHUUHVRXUFHVHIIHFWV

0DQDJHODQGWUHDWPHQWVWRFRQVHUYHVLWHPRLVWXUHDQGWRSURWHFWORQJWHUPVWUHDPKHDOWKIURP GDPDJHE\LQFUHDVHGUXQRII

,QWKHZDWHULQIOXHQFH]RQH :,= QH[WWRSHUHQQLDODQGLQWHUPLWWHQWVWUHDPVODNHVDQGZHWODQGV DOORZRQO\WKRVHDFWLRQVWKDWPDLQWDLQRULPSURYHORQJWHUPVWUHDPKHDOWKDQGULSDULDQHFRV\VWHP FRQGLWLRQ

/LPLWURDGVDQGRWKHUGLVWXUEHGVLWHVWRWKHPLQLPXPIHDVLEOHQXPEHUZLGWKDQGWRWDOOHQJWK FRQVLVWHQWZLWKWKHSXUSRVHRIVSHFLILFRSHUDWLRQVORFDOWRSRJUDSK\DQGFOLPDWH

&RQVWUXFWURDGVDQGRWKHUGLVWXUEHGVLWHVWRPLQLPL]HGLVFKDUJHLQWRVWUHDPVODNHVDQGZHWODQGV

6WDELOL]HDQGPDLQWDLQURDGVDQGRWKHUGLVWXUEHGVLWHVGXULQJDQGDIWHUFRQVWUXFWLRQWRFRQWURO HURVLRQ

0DLQWDLQRULPSURYHORQJWHUPOHYHOVRIRUJDQLFPDWWHUDQGQXWULHQWVRQDOOODQGV

$SSO\UXQRIIFRQWUROVWRGLVFRQQHFWQHZSROOXWDQWVRXUFHVIURPVXUIDFHDQGJURXQGZDWHU

7KH:51)DQDO\]HVSURMHFWVIRULPSDFWVDQGSRWHQWLDOIRU%HVW0DQDJHPHQW3UDFWLFHV %03 WR PLQLPL]HLPSDFWVWRWKHZDWHUUHVRXUFHIURPWKHSURSRVHGSURMHFW 86'$)RUHVW6HUYLFH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-81 145 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV +:DWHU5HVRXUFHV

$))(&7('(19,5210(17

$YHUDJHDQQXDOSUHFLSLWDWLRQLQWKH$QDO\VLV$UHDLVDSSUR[LPDWHO\LQFKHV5RXJKO\SHUFHQWRI DQQXDOSUHFLSLWDWLRQRFFXUVLQWKHZLQWHUPRQWKVRI1RYHPEHUWKURXJK0DUFK7KHDYHUDJHWHPSHUDWXUH LQWKHZLQWHUPRQWKVLVDSSUR[LPDWHO\GHJUHHV)DKUHQKHLWDYHUDJHWHPSHUDWXUHLQWKHVXPPHULV DSSUR[LPDWHO\GHJUHHV)DKUHQKHLW

7KH)UHQFK*XOFK:DWHUVKHG

7KHKHDGZDWHUVRI)UHQFK*XOFKDUHORFDWHGRQWKHHDVWHUQIDFHRI%DOG0RXQWDLQDQGIORZQRUWKDQGHDVW DORQJWKHEDVHRIWKHPRXQWDLQWRWKH%OXH5LYHUDSSUR[LPDWHO\PLOHVGRZQVWUHDPRIWKHSURMHFWDUHD 7KHUHDUHDSSUR[LPDWHO\PLOHVRIVWUHDPVPDSSHGZLWKLQWKH)UHQFK*XOFK%OXH5LYHUZDWHUVKHG ZLWKQHDUO\RIWKRVHPLOHVFRQVLVWLQJRI)UHQFK*XOFKDQGWULEXWDULHVWR)UHQFK*XOFK7KHUHDUH DSSUR[LPDWHO\PLOHVRIVWUHDPVDGMDFHQWRUGRZQVWUHDPRIWKH3URMHFW$UHDZLWKQHDUO\PLOHVRI VWHDPVZLWKLQPLOHRIWKHSURSRVHGSURMHFWGLVWXUEDQFH

)UHQFK*XOFKLVWKHSULPDU\SHUHQQLDOVWUHDPZLWKLQWKH$QDO\VLV$UHDZLWKWZRRWKHUVPDOOHUVWUHDPV :HEHUDQG,OOLQRLVJXOFKHV:LWKLQWKH$QDO\VLV$UHD)UHQFK*XOFKUDQJHVIURPIHHWLQZLGWKDWWKH RUGLQDU\KLJKZDWHUPDUN 2+:0 WRRUPRUHIHHWRIEUDLGHGFKDQQHOVDQGZHWODQGV:HEHUDQG ,OOLQRLVJXOFKHVUDQJHIURPWRIHHW2+:0

:DWHU4XDOLW\6WUHDP0RUSKRORJ\DQG&RQQHFWHG'LVWXUEHG$UHD

$OWKRXJKWKHKXWVLWHLVLQDUHODWLYHO\XQGLVWXUEHGDUHDRI%DOG0RXQWDLQMXVWDERYHWUHHOLQHRQWKH QRUWKHUQIDFHHYLGHQFHRIKLVWRULFPLQLQJVLWHVDUHSUHYDOHQWWKURXJKRXWWKH$QDO\VLV$UHDSDUWLFXODUO\ DORQJWKHPLOHVRI)UHQFK*XOFKIURPWKHSURMHFWDUHDWRWKH%OXH5LYHU6SHFLILFDOO\LPPHGLDWHO\ GRZQVWUHDPRIWKH3URMHFW$UHD DSSUR[LPDWHO\PLOH )UHQFK*XOFKZDVSODFHUPLQHGIURPWKHVWR VUHVXOWLQJLQPDMRULPSDFWVWRFKDQQHOSDWWHUQDQGJHRPHWU\3LOHVRIVWRQHOLQHWKHVWUHDPIRU DSSUR[LPDWHO\PLOHVDWWLPHVWKHIORZRIZDWHULVLPSHUFHSWLEOHDVLWZLQGVWKURXJKWKHVWRQHV

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

1DWXUDO5HVRXUFHV&RQVHUYDWLRQ6HUYLFH 86(QYLURQPHQWDO3URWHFWLRQ$JHQF\

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-82 146 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV +:DWHU5HVRXUFHV

SDVVLYHZDWHUWUHDWPHQWWRLPSURYHWKHTXDOLW\RI)UHQFK*XOFKDQGUHGXFHFDGPLXPDQG]LQFLQWKH%OXH 5LYHU$ZDWHUWUHDWPHQWSODQWZDVEXLOWRQ)UHQFK*XOFK5RDGE\WKH7RZQRI%UHFNHQULGJHDQG 6XPPLW&RXQW\DVSDUWRIWKH*ROGHQ+RUVHVKRH2SHQ6SDFH3XUFKDVHIRURQJRLQJWUHDWPHQWRIWKHZDWHU LQ)UHQFK*XOFK

,QDGGLWLRQWRPLQLQJUHVLGHQWLDOGHYHORSPHQWDQGXQSDYHGURDGVDQGWUDLOVKDYHDOVRLQIOXHQFHGZDWHU TXDOLW\FKDQQHOSDWWHUQVDQGJHRPHWU\RI)UHQFK*XOFK:HEHU*XOFKDQG,OOLQRLV*XOFK$SSUR[LPDWHO\ IHHWRI)UHQFK*XOFKURDG DQDSSUR[LPDWHIHHWZLGHJUDYHOURDG DQGIHHWRIH[LVWLQJWUDLOV DQGGLUWURDGV UDQJLQJIURPVLQJOHWUDFNWRIRRWZLGHGLUWURDGV DUHZLWKLQWKH)UHQFK*XOFK:HEHU *XOFKDQG,OOLQRLV*XOFK¶V:,=V UHIHUWR)LJXUH $OWKRXJKWKHUHDUHQXPHURXVVWUHDPFURVVLQJVRI )UHQFK*XOFKDQG:HEHU*XOFKZLWKLQWKH$QDO\VLV$UHDZLWKLQWKH3URMHFW$UHDWKHUHDUHWZR FURVVLQJVERWKRQ6DOOLH%DUEHU5RDGRQHRI)UHQFK*XOFKDQGRQHRI:HEHU*XOFK

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

$OWKRXJK,OOLQRLV*XOFKLVDSHUHQQLDOVWUHDPZLWKLQWKH$QDO\VLV$UHD LWLVSUR[LPDWHWRVHYHUDO VZLWFKEDFNVRIWKH1LJKWPDUHRQ%DOG\7UDLO GXHWRWRSRJUDSK\WKHORFDWLRQRIWKHSURMHFWZRXOGQRW KDYHDQ\LQIOXHQFHRQ,OOLQRLV*XOFKDQGLVWKHUHIRUHQRWGLVFXVVHGIXUWKHU 5HDGPRUHDERXW)UHQFK*XOFKZDWHUTXDOLW\DQGWUHDWPHQWLQWKH³8VH$WWDLQDELOLW\$QDO\VLV/RZHU)UHQFK *XOFKDQGWKH%OXH5LYHU'RZQVWUHDPIURP)UHQFK*XOFKQHDU%UHFNHQULGJH6XPPLW&RXQW\&RORUDGR´UHSRUWWR WKH&RORUDGR:DWHU4XDOLW\&RQWURO&RPPLVVLRQ

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-83 147 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV +:DWHU5HVRXUFHV

:DWHUVRIWKH86,QFOXGLQJ:HWODQGV

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

',5(&7$1',1',5(&7(19,5210(17$/&216(48(1&(6 $OWHUQDWLYH±1R$FWLRQ

$OWHUQDWLYH²WKH1R$FWLRQ$OWHUQDWLYH²UHIOHFWVDFRQWLQXDWLRQRIH[LVWLQJRSHUDWLRQVDQGPDQDJHPHQW SUDFWLFHVZLWKLQWKH)UHQFK*XOFKSRUWLRQRIWKH%OXH5LYHUZDWHUVKHGZLWKRXWFKDQJHVDGGLWLRQVRU XSJUDGHVRQ1)6DQGRUDGMDFHQWSULYDWHODQGV7KH1R$FWLRQ$OWHUQDWLYHZRXOGKDYHQRDGGLWLRQDO GLUHFWLQGLUHFWRUFXPXODWLYHLPSDFWVRUEHQHILWVWRZDWHUVKHGUHVRXUFHVRUZHWODQGV$OWHUQDWLYHZRXOG QRWEHH[SHFWHGWRDOWHUZDWHUVKHGGUDLQDJHKHDOWK

$OWHUQDWLYH±3URSRVHG$FWLRQ

,PSOHPHQWDWLRQRIWKH3URSRVHG$FWLRQZRXOGUHVXOWLQDSSUR[LPDWHO\DFUHVRIJURXQGGLVWXUEDQFH IURPWKHSDUNLQJORWH[SDQVLRQDQGWUDLODQGKXWDQGFRQVWUXFWLRQ7KHVHDUHDVZRXOGEHJUDGHGDQG FRPSDFWHGDQGZLWKWKHH[FHSWLRQRIWKHDUHDVXUURXQGLQJWKHKXW ZKLFKZRXOGEHUHKDELOLWDWHGDQG UHYHJHWDWHG ZRXOGEHFRQYHUWHGWRLPSHUPHDEOHVXUIDFHV

3DUNLQJ/RW 7KHQHZSDUNLQJDUHDZRXOGUHTXLUHDSSUR[LPDWHO\DFUHRIWUHHUHPRYDODQGJUDGLQJ7KLV FRQVWUXFWLRQZRXOGRFFXURQWKHQRUWKVLGHRI)UHQFK*XOFKURDGRXWVLGHWKH:,=)UHQFK*XOFKDQGWKH DGMDFHQWZHWODQGFRPSOH[DUHORFDWHGRQWKHVRXWKVLGHRIWKHURDG$OWKRXJKWKHVRLOLQWKHSDUNLQJDUHD LVPDSSHGDVKLVWLFFU\DTXROOVDZHWODQGVRLOWKLVDUHDLVDQXSODQG7KHJUHDWHVWSRWHQWLDOLPSDFWWRWKH JXOFKDQGZHWODQGFRPSOH[LVLQFUHDVLQJWKHGLVWXUEHGDUHDK\GURORJLFDOO\FRQQHFWHGWRWKHVWUHDPDQG

86)LVKDQG:LOGOLIH6HUYLFH &RZDUGLQHWDO

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-84 148 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV +:DWHU5HVRXUFHV

ZHWODQGFRPSOH[7KHSDUNLQJDUHDKDVWKHDELOLW\WRURXWHRYHUODQGZDWHUEHFRPLQJDFRQGXLWIRUWKH WUDQVSRUWRIVHGLPHQWDQGRWKHUSROOXWDQWVLQWRVWUHDPV7KHUHIRUHWRPLQLPL]HWKHSRWHQWLDOIRUGUDLQDJH WRZDUGWKHJXOFKDQGZHWODQGVWKHSDUNLQJORWZRXOGEHFRQVWUXFWHGWRVORSHWRZDUGWKHXSKLOO QRUWK VLGHRIWKHORWDZD\IURPWKHJXOFKDQGZHWODQGVRQWRSHUPHDEOHVRLOVUDWKHUWKDQLQWRWKHVWUHDP FKDQQHO6LPLODUO\DVQRZVWRUDJHDUHDZRXOGEHGHVLJQDWHGDORQJWKHQRUWKHUQERXQGDU\RIWKHORW$ GUDLQDJHPDQDJHPHQWSODQZRXOGEHVXEPLWWHGWRWKH)RUHVW6HUYLFHSULRUWRFRQVWUXFWLRQ

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

7KHILQDOVHJPHQWRISURSRVHGWUDLOFRQQHFWLQJWRWKHKXW VHJPHQW( ZRXOGFURVVWKHVZDOHXSKLOORIWKH KHDGZDWHUVRI:HEHU*XOFK$OWKRXJKLWLVDSSUR[LPDWHO\IHHWXSKLOORIWKHFKDQQHOWKLVWUDLO VHJPHQWZRXOGEHGHVLJQHGXVLQJQDWXUDOWRSRJUDSK\UROOLQJGLSVZDWHUEDUVDQGGLWFKUHOLHIFXOYHUWVWR GLVFRQQHFWGLVWXUEHGDUHDVIURPWKLVVZDOHWRHQVXUHQRLQFUHDVHLQWKHOHQJWKRIWKHFKDQQHODQGUHVXOWLQJ FRQQHFWHGGLVWXUEHGDUHD'UDLQDJHIHDWXUHVZRXOGEHGHVLJQHGWRGUDLQRQWRXQGLVWXUEHGSHUPHDEOHVRLOV WRDOORZIRUDEVRUSWLRQ

'XHWRWKHPLQLPDODPRXQWRIWUDLOGHYHORSPHQW3'&VZRXOGEHVXFFHVVIXOO\XWLOL]HGWRFRQWUROVXUIDFH IORZURXWLQJLQWKHWUDLODQGWRPLQLPL]HGDYRLGLPSDFWVWRVWUHDPEDQNVDWFURVVLQJV

7KH+XW 7KHKXWVLWHZRXOGUHTXLUHJUDGLQJDSSUR[LPDWHO\DFUHRQWKHQRUWKIDFHRI%DOG0RXQWDLQ7KHVLWHLV YHU\URFN\ZLWKQDWXUDOO\WKLQRYHUVWRU\YHJHWDWLRQ7KHFORVHVWVWUHDPWRWKHVLWHLV:HEHU*XOFKZKLFK VXUIDFHVDSSUR[LPDWHO\IHHWGRZQKLOORIWKHVLWH7KHKXWZRXOGLQFOXGHFRPSRVWLQJWRLOHWVZLWKD VHSWLFOHDFKILHOG6RLOVIRUWKHOHDFKILHOGDUHGLVFXVVHGLQWKH6RLOV$QDO\VLV &KDSWHU6HFWLRQ*±6RLO 5HVRXUFHV EXWJHQHUDOO\WKHVWHHSVORSHVDQGSRWHQWLDOVHHSDJHLQWKHERWWRPOD\HUZRXOGUHTXLUHVSHFLDO SODQQLQJWRPHHW6XPPLW&RXQW\VWDQGDUGVWRHQVXUHQRLPSDFWVWRZDWHUTXDOLW\GRZQVWUHDPRIWKHKXW

6XPPDU\ ,QVXPPDU\ZLWKLPSOHPHQWDWLRQRI3')WKHUHZRXOGEHQRLPSDFWVWRWKHDSSUR[LPDWHPLOHVRI VWUHDPVDGMDFHQWRUGRZQVWUHDPRIWKH3URMHFW$UHDGHVSLWHWKDWWKHUHDUHQHDUO\PLOHVRIVWHDPVZLWKLQ PLOHRIWKHSURSRVHGSURMHFWGLVWXUEDQFH,PSOHPHQWDWLRQRIWKH3URSRVHG$FWLRQZRXOGQRW

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-85 149 of 200 &KDSWHU$IIHFWHG(QYLURQPHQWDQG(QYLURQPHQWDO&RQVHTXHQFHV +:DWHU5HVRXUFHV

SHUPDQHQWO\RUWHPSRUDULO\LPSDFWWKHDFUHVRIZHWODQGVZLWKLQWKH$QDO\VLV$UHD7KHSURSRVHG SURMHFWVKDYHEHHQGHVLJQHGWRDYRLGZHWODQGVDQGIXQFWLRQDQGYDOXHVIRUZLOGOLIHKDELWDWDQGZDWHU ILOWUDWLRQZRXOGEHPDLQWDLQHG7KHSURMHFWLVFRQVLVWHQWZLWKSHUWLQHQWSRUWLRQVRIWKH)RUHVW3ODQ DQG:&3+

&808/$7,9(())(&76

$VGLVFXVVHGEULHIO\DERYHSDVWPLQLQJDQGORJJLQJKDVDIIHFWHGWKHVRLOVUHVRXUFHLQWKH$QDO\VLV$UHD *HQHUDOO\LPSDFWVFDQEHVHHQDVLQFUHDVHGVRLOFRPSDFWLRQDQGORVVRIRUJDQLFVRLOVZLWKLQWKHVRLOPDS XQLW3')VKDYHEHHQLGHQWLILHGWRGLVFRQQHFWSRWHQWLDOLPSDFWVWRZDWHUUHVRXUFHVWKHUHIRUHEHFDXVHQR GLUHFWRULQGLUHFWLPSDFWVKDYHEHHQLGHQWLILHGIRUWKH3URSRVHG$FWLRQWKHUHDUHQRFXPXODWLYHHIIHFWVWR WKHZDWHUUHVRXUFH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 3-86 150 of 200 &KDSWHU )LQGLQJRI1R6LJQLILFDQW,PSDFW

151 of 200 &KDSWHU)LQGLQJRI1R6LJQLILFDQW,PSDFW

),1',1*2)126,*1,),&$17,03$&7

$IWHUUHYLHZLQJWKH($,KDYHGHWHUPLQHGWKDWWKH3URSRVHG$FWLRQZLOOQRWLQGLYLGXDOO\RU FXPXODWLYHO\VLJQLILFDQWO\DIIHFWWKHTXDOLW\RIWKHKXPDQELRORJLFDORUSK\VLFDOHQYLURQPHQW7KH SURYLVLRQVRI&)5 E LQGLFDWHWKDWSURMHFWVLJQLILFDQFHPXVWEHMXGJHGLQWHUPVRIERWK FRQWH[WDQGLQWHQVLW\%DVHGRQDUHYLHZRIWKHVHSURYLVLRQV,KDYHGHWHUPLQHGWKDWDQHQYLURQPHQWDO LPSDFWVWDWHPHQWLVQRWUHTXLUHG,EDVHP\ILQGLQJVRQWKHIROORZLQJGHILQLWLRQVRIFRQWH[WDQGLQWHQVLW\

$ &217(;7

7KHVLJQLILFDQFHRIDQDFWLRQPXVWEHDQDO\]HGLQVHYHUDOFRQWH[WVDQGYDULHVZLWKWKHVHWWLQJ,QWKHFDVH RIVLWHVSHFLILFDFWLRQVVLJQLILFDQFHGHSHQGVPRUHRQWKHHIIHFWVLQWKHORFDOHUDWKHUWKDQWKHZRUOGDVD ZKROH%RWKVKRUWDQGORQJWHUPHIIHFWVDUHUHOHYDQW

7KHGLUHFWDQGLQGLUHFWHIIHFWVDQDO\VLVFRQWDLQHGLQWKH($IRFXVHVRQWKH:HEHU*XOFK3URMHFW$UHDDQG H[WHQGVIXUWKHUIRUFXPXODWLYHHIIHFWVDQDO\VLVGHSHQGLQJRQWKHUHVRXUFH$QLQLWLDOVFUHHQZDV FRQGXFWHGWRHQVXUHWKDWWKH3URSRVHG$FWLRQLVFRQVLVWHQWZLWKWKH)RUHVW3ODQ7KH($GRHVQRW LQGLFDWHWKDWDQ\WKLQJLQWKH3URSRVHG$FWLRQZRXOGOHDGWRDSUHFHGHQWDWWKHORFDOUHJLRQDORUQDWLRQDO OHYHO

% ,17(16,7<

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

,PSDFWVWKDWPD\EHERWKEHQHILFLDODQGDGYHUVH$VLJQLILFDQWHIIHFWPD\H[LVWHYHQLIWKH IHGHUDODJHQF\EHOLHYHVWKDWRQEDODQFHWKHHIIHFWZLOOEHEHQHILFLDO

7KH3URSRVHG$FWLRQSURYLGHVUHFUHDWLRQDOEHQHILWVWRPDQ\XVHUVRI1)6ODQGVDQGLVFRQVLVWHQWZLWKWKH WHUPVDQGFRQGLWLRQVRI6+$¶V683DVZHOODVWKH0DQDJHPHQW$UHDIURPWKH)RUHVW3ODQ, KDYHZHLJKHGWKHVHEHQHILWVDJDLQVWSRWHQWLDODGYHUVHLPSDFWVWRWKHKXPDQELRORJLFDODQGSK\VLFDO HQYLURQPHQW²DOORIZKLFKDUHWKRURXJKO\GRFXPHQWHGLQ&KDSWHU,ILQGWKDWWKHEHQHILWVRIWKH SURSRVHGKXWRXWZHLJKWKHDGYHUVHLPSDFWV)XUWKHUPRUHZKHUHQHFHVVDU\0DQDJHPHQW5HTXLUHPHQWV FRPSRVHGRI3URMHFW'HVLJQ)HDWXUHVDQG%HVW0DQDJHPHQW3UDFWLFHV KDYHEHHQLGHQWLILHGWRPLQLPL]H RUDYRLGLPSDFWVWRVSHFLILFUHVRXUFHV0DQDJHPHQW5HTXLUHPHQWVDUHLGHQWLILHGLQ7DEOHRIWKH($

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 4-1 152 of 200 &KDSWHU)LQGLQJRI1R6LJQLILFDQW,PSDFW

7KHGHJUHHWRZKLFKWKHSURSRVHGDFWLRQDIIHFWVSXEOLFKHDOWKRUVDIHW\

$OWKRXJKWKHUHDUHLQKHUHQWULVNVDVVRFLDWHGZLWKEDFNFRXQWU\WUDYHODQGUHFUHDWLRQWKH3URSRVHG$FWLRQ GRHVQRWVLJQLILFDQWO\DIIHFWSXEOLFKHDOWKRUVDIHW\

8QLTXHFKDUDFWHULVWLFVRIWKHJHRJUDSKLFDUHDVXFKDVWKHSUR[LPLW\WRKLVWRULFDORUFXOWXUDO UHVRXUFHVSDUNODQGVSULPHIDUPODQGVZHWODQGVZLOGDQGVFHQLFULYHUVRUHFRORJLFDOO\FULWLFDO DUHDV

7ZHQW\WZRFXOWXUDOUHVRXUFHVDUHNQRZQWREHZLWKLQDPLOHRIWKH3URMHFW$UHDDOOUHODWHGWRPLQLQJ 7KH6DOO\%DUEHU0LQHWKH/LQFROQ7RZQVLWHWKH&RUSRUDO0LQHDQGWKH&DUERQDWH0LQHDUHWKHRQO\ UHVRXUFHVWKDWDUH15+3HOLJLEOH$OORWKHUUHVRXUFHVZHUHGHWHUPLQHGQRWHOLJLEOHEDVHGRQILHOGVWXGLHV

6L[QHZKLVWRULFVLWHVZHUHGRFXPHQWHGDQGWZRSUHYLRXVO\UHFRUGHGVLWHVZHUHUHYLVLWHGIRUWKHFXUUHQW LQYHQWRU\6HYHQRIWKHVHVLWHVDUHUHFRPPHQGHGLQHOLJLEOHWRWKH15+3DQGQRIXUWKHUZRUNLV UHFRPPHQGHGIRUWKHP7KH/LQFROQ7RZQVLWHERXQGDU\VOLJKWO\RYHUODSVWKHSURSRVHGSDUNLQJDUHDIRU WKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXW+RZHYHUWKHSRUWLRQRIWKHVLWHZLWKLQWKHSURSRVHGSDUNLQJ GRHVQRWFRQWULEXWHWRWKHTXDOLWLHVWKDWFDXVHWKHVLWHWREHHOLJLEOH DOORIWKHH[LVWLQJEXLOGLQJV IRXQGDWLRQVDQGPLQHUHPQDQWVDVVRFLDWHGZLWK/LQFROQ¶VEXVLQHVVGLVWULFWDUHORFDWHGIXUWKHUWRWKH ZHVW 7KHFORVHVWVLWHIHDWXUHWRWKHSURSRVHGSDUNLQJORWLVDJUDYH ORFDWHGWRWKHHDVWDQGRXWVLGHRI WKH$3( 7KHJUDYHZRXOGQRWEHLPSDFWHGE\FRQVWUXFWLRQRIWKHSURSRVHGSDUNLQJORW

2Q1)6ODQGV$OWHUQDWLYHZRXOGUHVXOWLQWKHSHUPDQHQWORVVRIDFUHRIO\Q[KDELWDWLPSDFWVWR DFUHRIQRQKDELWDWDQGWHPSRUDU\GLVWXUEDQFHVWRDFUHRIQRQKDELWDWWRWDOLQJDFUHV +DELWDWFRQYHUVLRQDQGVWDWLVWLFDOFKDQJHVWR/$8O\Q[KDELWDWUHVXOWLQJIURPWKHSURSRVHG:HEHU *XOFKEDFNFRXQWU\KXWZRXOGEHLQVLJQLILFDQWDWWKH/$8OHYHO

1RRWKHUXQLTXHJHRJUDSKLFDUHDVSDUNODQGVSULPHIDUPODQGVZLOGHUQHVVZHWODQGVRUZLOGDQGVFHQLF ULYHUVZRXOGEHDIIHFWHGE\WKH3URSRVHG$FWLRQ

7KHGHJUHHWRZKLFKWKHHIIHFWVRQWKHTXDOLW\RIWKHKXPDQHQYLURQPHQWDUHOLNHO\WREHKLJKO\ FRQWURYHUVLDO

7KHWHUP³FRQWURYHUVLDO´LQWKLVFRQWH[WUHIHUVWRFDVHVZKHUHVXEVWDQWLDOVFLHQWLILFGLVSXWHH[LWVDVWRWKH VL]HQDWXUHRUHIIHFWVRIDPDMRUIHGHUDODFWLRQRQVRPHKXPDQHQYLURQPHQWDOIDFWRUUDWKHUWKDQWRSXEOLF RSSRVLWLRQRIDSURSRVHGDFWLRQRUDOWHUQDWLYH

1RVFLHQWLILFGLVSXWHH[LVWVUHJDUGLQJWKH3URSRVHG$FWLRQRUWKHDQDO\VLVFRQWDLQHGLQWKH($%DVHGRQ WKHIDFWWKDWWKH)RUHVW6HUYLFHKDVDQDO\]HGDQGDSSURYHGQXPHURXVSURMHFWVRIWKLVW\SHWKHHIIHFWVRI WKLVSURMHFWDUHQRWFRQVLGHUHGWREHFRQWURYHUVLDOQRULVWKHUHVFLHQWLILFGLVSXWHDERXWWKHVHHIIHFWV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 4-2 153 of 200 &KDSWHU)LQGLQJRI1R6LJQLILFDQW,PSDFW

7KHGHJUHHWRZKLFKWKHSRVVLEOHHIIHFWVRQWKHKXPDQHQYLURQPHQWDUHKLJKO\XQFHUWDLQRU LQYROYHXQLTXHRUXQNQRZQULVNV

0DQ\EDFNFRXQWU\KXWVYHU\VLPLODUWRWKH3URSRVHG$FWLRQRSHUDWHRQ1)6ODQGV7KHDQDO\VLVVKRZV WKHHIIHFWVDUHQRWXQFHUWDLQDQGGRQRWLQYROYHXQLTXHRUXQNQRZQULVNV7KURXJKRXWWKH($DQDO\VLV WKH3URSRVHG$FWLRQZDVPRGLILHGWRDGGUHVVSRWHQWLDOLPSDFWVWRZLOGOLIHSDUWLFXODUO\GXULQJWKH VXPPHU)XUWKHUPRUH7DEOHLGHQWLILHV0DQDJHPHQW5HTXLUHPHQWVDQG3URMHFW'HVLJQ)HDWXUHVWKDW DUHGHVLJQHGWRPLQLPL]HRUDYRLGSRWHQWLDOLPSDFWVWRWKHKXPDQELRORJLFDODQGSK\VLFDOHQYLURQPHQW &RPELQHGZLWKWKH)RUHVW6HUYLFH¶VH[SHULHQFHZLWKLPSOHPHQWLQJWKHVHW\SHVRIDFWLYLWLHVRQWKH)RUHVW ,KDYHGHWHUPLQHGWKDWWKHUHZLOOQRWEHVLJQLILFDQWHIIHFWVRQWKHKXPDQHQYLURQPHQWWKDWDUHKLJKO\ XQFHUWDLQRULQYROYHXQLTXHRUXQNQRZQULVNV

7KHGHJUHHWRZKLFKWKHDFWLRQPD\HVWDEOLVKSUHFHGHQWIRUIXWXUHDFWLRQVZLWKVLJQLILFDQW HIIHFWVRUUHSUHVHQWVDGHFLVLRQLQSULQFLSOHDERXWDIXWXUHFRQVLGHUDWLRQ

,KDYHGHWHUPLQHGWKDWWKLVGHFLVLRQGRHVQRWHVWDEOLVKSUHFHGHQFHIRUIXWXUHDFWLRQV7KH3URSRVHG$FWLRQ LVFRQVLVWHQWZLWK)RUHVWZLGHDQG0DQDJHPHQW$UHDGLUHFWLRQDVZHOODV6+$¶V683)XUWKHUPRUH WKHSURSRVHGDFWLYLWLHVDVVRFLDWHGZLWKWKHEDFNFRXQWU\KXWDUHW\SLFDORIWKHGLVSHUVHGUHFUHDWLRQWKDW FXUUHQWO\H[LVWVRQWKH:51)3ULRUWRDFFHSWLQJ6+$¶VSURSRVDOIRUWKH:HEHU*XOFKEDFNFRXQWU\KXW WKH)RUHVW6HUYLFHFRPSOHWHGDWKRURXJKUHYLHZWRHQVXUHWKDWWKLVSURMHFWUHSUHVHQWVDQDSSURSULDWHXVHRI 1)6ODQGV

:KHWKHUWKHDFWLRQLVUHODWHGWRRWKHUDFWLRQVZLWKLQGLYLGXDOO\LQVLJQLILFDQWEXWFXPXODWLYHO\ VLJQLILFDQWLPSDFWV6LJQLILFDQFHH[LVWVLILWLVUHDVRQDEOHWRDQWLFLSDWHDFXPXODWLYHO\VLJQLILFDQW LPSDFWRQWKHHQYLURQPHQW6LJQLILFDQFHFDQQRWEHDYRLGHGE\WHUPLQJDQDFWLRQWHPSRUDU\RU E\EUHDNLQJLWGRZQLQWRVPDOOFRPSRQHQWSDUWV

7KH&XPXODWLYH(IIHFWVDQDO\VHVSUHVHQWHGIRUHDFKUHVRXUFHWKURXJKRXW&KDSWHULQWKH($GLVFORVHV SDVWSUHVHQWDQGUHDVRQDEO\IRUHVHHDEOHIXWXUHDFWLRQVZLWKSRWHQWLDOWROHDGWRHIIHFWVZKLFKDUH FXPXODWLYHLQQDWXUH'XHWRPRGLILFDWLRQVPDGHWRWKH3URSRVHG$FWLRQWKURXJKRXWWKH1(3$SURFHVVLQ DGGLWLRQWR0DQDJHPHQW5HTXLUHPHQWVRXWOLQHGLQ7DEOHWKLVDQDO\VLVGRHVQRWLGHQWLI\DQ\ FXPXODWLYHO\VLJQLILFDQWLPSDFWVWKDWDUHDQWLFLSDWHGWRUHVXOWIURPLPSOHPHQWDWLRQRIWKH3URSRVHG $FWLRQ

7KHGHJUHHWRZKLFKWKHDFWLRQPD\DGYHUVHO\DIIHFWGLVWULFWVVLWHVKLJKZD\VVWUXFWXUHVRU REMHFWVOLVWHGLQRUHOLJLEOHIRUOLVWLQJLQWKH1DWLRQDO5HJLVWHURI+LVWRULF3ODFHVRUPD\FDXVH ORVVRUGHVWUXFWLRQRIVLJQLILFDQWVFLHQWLILFFXOWXUDORUKLVWRULFDOUHVRXUFHV

$VGLVFXVVHGSUHYLRXVO\XQGHU,QWHQVLW\)DFWRUWZHQW\WZRFXOWXUDOUHVRXUFHVDUHNQRZQWREHZLWKLQ DPLOHRIWKH3URMHFW$UHDDOOUHODWHGWRPLQLQJ7KH6DOO\%DUEHU0LQHWKH/LQFROQ7RZQVLWHWKH &RUSRUDO0LQHDQGWKH&DUERQDWH0LQHDUHWKHRQO\UHVRXUFHVWKDWDUH15+3HOLJLEOH$OORWKHU UHVRXUFHVZHUHGHWHUPLQHGQRWHOLJLEOHEDVHGRQILHOGVWXGLHV 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 4-3 154 of 200 &KDSWHU)LQGLQJRI1R6LJQLILFDQW,PSDFW

$OOUHSRUWVZHUHVXEPLWWHGWRWKH6+32LQFRPSOHWLRQRIWKH1+3$6HFWLRQSURFHVV,PSOHPHQWDWLRQ RIWKH3URSRVHG$FWLRQZDVGHWHUPLQHGWRKDYH³QRHIIHFW´RQDQ\NQRZQ15+3OLVWHGRUHOLJLEOHKLVWRULF SURSHUWLHVZLWKLQWKH$3(

7KHGHJUHHWRZKLFKWKHDFWLRQPD\DGYHUVHO\DIIHFWDQHQGDQJHUHGRUWKUHDWHQHGVSHFLHVRULWV KDELWDWWKDWKDVEHHQGHWHUPLQHGWREHFULWLFDOXQGHUWKH(QGDQJHUHG6SHFLHV$FWRI

7KHUHZRXOGEHQRHIIHFWWRDQ\WKUHDWHQHGHQGDQJHUHGRUSURSRVHGVSHFLHVZLWKWZRH[FHSWLRQV)RU &DQDGDO\Q[WKHGHWHUPLQDWLRQLV³PD\DIIHFWQRWOLNHO\WRDGYHUVHO\DIIHFW´DQGIRU1RUWKHUQ$PHULFDQ ZROYHULQHWKHGHWHUPLQDWLRQLV³QRWOLNHO\WRMHRSDUGL]H´

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

7KHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWZRXOGLQFUHDVHGLVSHUVHGZLQWHUUHFUHDWLRQDODFWLYLW\MXVW EH\RQGDIRUHVWHGERWWOHQHFNLQWKHVRXWKHUQ6XPPLW&RXQW\O\Q[FRUULGRU7KHSURSRVHG:HEHU*XOFK EDFNFRXQWU\KXWZRXOGPDLQWDLQKDELWDWFRQQHFWLYLW\WKURXJKWKH6ZDQ5LYHU/$8DQGEHWZHHQ FRQWLJXRXV/$8V'LVSHUVHGVNLLQJRXWVLGHRIDUHDVLQWHQGHGIRUVNLLQJVKRXOGQRWKDYHPHDQLQJIXO DGYHUVHHIIHFWVRQO\Q[KDELWDWXVH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 4-4 155 of 200 &KDSWHU)LQGLQJRI1R6LJQLILFDQW,PSDFW

7KHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXWSURMHFWPHHWVDOOFULWHULDIRUSURJUDPPDWLFFRQFXUUHQFH XQGHUWKH&RORUDGR/\Q[3URMHFW'HFLVLRQ6FUHHQV7KHUHIRUHFRQVXOWDWLRQIRU&DQDGDO\Q[LVFRQVLGHUHG FRPSOHWHIRUWKLVSURSRVHGSURMHFW

:KHWKHUWKHDFWLRQWKUHDWHQVDYLRODWLRQRIIHGHUDOVWDWHRUORFDOODZRUUHTXLUHPHQWVLPSRVHG IRUWKHSURWHFWLRQRIWKHHQYLURQPHQW

,KDYHUHYLHZHGLQWKH($WKH&XOWXUDO5HVRXUFHV,QYHQWRU\WKH%LRORJLFDO$VVHVVPHQW%LRORJLFDO (YDOXDWLRQ0DQDJHPHQW,QGLFDWRU6SHFLHVUHSRUWDQGWKHSURMHFWILOHDQGKDYHGHWHUPLQHGWKDWQRIHGHUDO VWDWHRUORFDOODZVUHJXODWLRQVRUUHTXLUHPHQWVIRUSURWHFWLRQRIWKHHQYLURQPHQWZLOOEHYLRODWHGZLWK LPSOHPHQWDWLRQRIWKH3URSRVHG$FWLRQ

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 4-5 156 of 200 &KDSWHU &RQVXOWDWLRQDQG&RRUGLQDWLRQ

157 of 200 &KDSWHU&RQVXOWDWLRQDQG&RRUGLQDWLRQ

&2168/7$7,21$1'&225',1$7,21

$ /,672)35(3$5(56 )25(676(59,&(7($0

7KHIROORZLQJSHRSOHSDUWLFLSDWHGLQWKHLQLWLDOVFRSLQJZHUHPHPEHUVRIWKH,QWHUGLVFLSOLQDU\7HDP DQGRUSURYLGHGGLUHFWLRQDQGDVVLVWDQFHGXULQJWKHSUHSDUDWLRQRIWKLV($

)RUHVW6HUYLFH,'7HDP 6FRWW)LW]ZLOOLDPV :KLWH5LYHU1DWLRQDO)RUHVW6XSHUYLVRU5HVSRQVLEOH2IILFLDO -DQ&XWWV 'LOORQ'LVWULFW5DQJHU/LQH2IILFHU 3HHFK.HOOHU (QYLURQPHQWDO&RRUGLQDWRU'LOORQ5DQJHU'LVWULFW 6KHOO\*UDLO%UDXGLV 6QRZ5DQJHU'LOORQ5DQJHU'LVWULFW -XVWLQ$QGHUVRQ +\GURORJLVW6XSHUYLVRU¶V2IILFH (OL]DEHWK5REHUWV :LOGOLIH%LRORJLVW6XSHUYLVRU¶V2IILFH $VKOH\1HWWOHV :LOGOLIH%LRORJLVW'LOORQ5DQJHU'LVWULFW 'RQQD*UDKDP /DQGVFDSH$UFKLWHFW6XSHUYLVRU¶V2IILFH -DUHG3LHUFH /DQGVFDSH$UFKLWHFW6XSHUYLVRU¶V2IILFH %ULDQ0F0XOOHQ 6RLO6FLHQWLVW6XSHUYLVRU¶V2IILFH &RUH\/HZHOOHQ )LVKHULHV%LRORJLVW'LOORQ5DQJHU'LVWULFW 3DWULFN8SKXV $UFKDHRORJLVW6XSHUYLVRU¶V2IILFH 3DXO6HPPHU /DQGV6WDII'LOORQ5DQJHU'LVWULFW

&2168/7$177($0

7KLV($ZDVSUHSDUHGE\

6(*URXS -DVRQ0DUNV 6HQLRU3URMHFW0DQDJHU .HQW6KDUS 3ULQFLSDOLQ&KDUJH .HOO\2ZHQV %LRORJLVW 3DXO'RQHJDQ (QYLURQPHQWDO$QDO\VW 3DXOD6DPXHOVRQ 3URGXFWLRQ6SHFLDOLVW

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 5-1 158 of 200 &KDSWHU&RQVXOWDWLRQDQG&RRUGLQDWLRQ

0HWFDOI$UFKHRORJLFDO&RQVXOWDQWV±(DJOH&2 $QQH0F.LEELQ 3ULQFLSDO$UFKHRORJLFDO,QYHVWLJDWRU

:HVWHUQ(FRV\VWHPV,QF±%RXOGHU&2 5LFN7KRPSVRQ :LOGOLIH%LRORJLVW

% $*(1&,(625*$1,=$7,21675,%$/*29(510(176$1' 3(56216&217$&7(' )('(5$/*29(510(17

86)LVK :LOGOLIH .XUW%URGHUGRUS 86(QYLURQPHQWDO3URWHFWLRQ$JHQF\ /DUU\6YRERGD5HJLRQ

75,%$/*29(510(17

8WH0RXQWDLQ8WH,QGLDQ7ULEH &KDLUPDQ*DU\+D\HV 8WH0RXQWDLQ8WH,QGLDQ7ULEH 7HUU\.QLJKW 8WH,QGLDQ7ULEH &KDLUSHUVRQ5LFKDUG-HQNV-U 8WH,QGLDQ7ULEH %HWV\&KDSRRVH 6RXWKHUQ8WH,QGLDQ7ULEH &KDLUSHUVRQ3HDUO&DVLDV 6RXWKHUQ8WH,QGLDQ7ULEH 1HLO%&ORXG

67$7(*29(510(17

&RORUDGR3DUNVDQG:LOGOLIH

/2&$/*29(510(17

%UHFNHQULGJH7RZQ&RXQFLO 6XPPLW&RXQW\&RPPLVVLRQHUV 7RZQRI%UHFNHQULGJH 8SSHU%OXH3ODQQLQJ&RPPLVVLRQ

/2&$/0(',$

6XPPLW&RXQW\&LWL]HQV9RLFH *OHQZRRG3RVW,QGHSHQGHQW

27+(5(17,7,(6$1'25*$1,=$7,216

%UHFNHQULGJH/DQGV,QF 6XPPLW:LQWHUODQGVDQG7UDLOV %UHFNHQULGJH2XWGRRU(GXFDWLRQ&HQWHU %UHFNHQULGJH5HVRUW&KDPEHU

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 5-2 159 of 200 &KDSWHU&RQVXOWDWLRQDQG&RRUGLQDWLRQ

:LOGHUQHVV:RUNVKRS 3HWHU+DUW 5RFN\0RXQWDLQ:LOG -RVK3ROORFNDQG5RFN\6PLWK

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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 5-3 160 of 200 &KDSWHU 5HIHUHQFHV

161 of 200 &KDSWHU5HIHUHQFHV

5()(5(1&(6

&)5±&ULWHULDIRU(YDOXDWLRQ

&)5±(FRORJLFDOVRFLDODQGHFRQRPLFVXVWDLQDELOLW\

&RZDUGLQHWDO&ODVVLILFDWLRQRI:HWODQGVDQG'HHSZDWHU+DELWDWVRIWKH8QLWHG6WDWHV ):62%686)LVKDQG:LOGOLIH6HUYLFH2IILFHRI%LRORJLFDO6HUYLFHV:DVKLQJWRQ '&

)UDQ]OXHEEHUV$-:DWHU,QILOWUDWLRQDQG6RLO6WUXFWXUHUHODWHGWRRUJDQLFPDWWHUDQGLWV VWUDWLILFDWLRQZLWKGHSWK6RLO 7LOODJH5HVHDUFK

.HQDG\&3HUVRQDOFRPPXQLFDWLRQZLWK&RXUWQH\.HQDG\3RSODU+RXVH:HOOLQJWRQ 1HLJKERUKRRG$SULO

0F&RUPLFN'(..

0F0XOOHQ%'UDIW6SHFLDOLVW5HSRUW±6RLOVDQG*HRORJ\RIWKH1RUWK7KRPSVRQ)RXU0LOHDQG &RDO&UHHN&DWWOH +RUVH*UD]LQJ$OORWPHQW6RLO6FLHQWLVW:51)

1DWXUDO5HVRXUFHV&RQVHUYDWLRQ6HUYLFH+LJKO\(URGLEOH/DQG'HILQLWLRQV KWWSZZZSUQUFVXVGDJRYWHFKQLFDOVRLOBVXUYH\+(/GHIVKWPXSGDWHG-XQHDFFHVVHG 0DUFK

²²²:HE6RLO6XUYH\KWWSZHEVRLOVXUYH\QUFVXVGDJRYDSS+RPH3DJHKWP$FFHVVHG $SULO

²²²+RRVLHU3DVVFOLPDWHGDWD KWWSZZZZFFQUFVXVGDJRYIWSUHIGDWDFOLPDWHPWQBSUHFWDEOHKLVWRU\FRORUDGRNVW[W /DVWXSGDWHG-XQH

3ROKHPXV-3HUVRQDOFRPPXQLFDWLRQZLWK-RKQ3ROKHPXV'LUHFWRURI6XPPLW&RXQW\5RDGDQG %ULGJH'HSDUWPHQW0DUFK

3URFWRU-3HUVRQDO&RPPXQLFDWLRQZLWK-RKQ3URFWRU:KLWH5LYHU1DWLRQDO)RUHVW%RWDQLVW -XO\

6XPPLW&RXQW\$SSOLFDWLRQ3URFHGXUHVDQG,QIRUPDWLRQIRU2QVLWH:DVWHZDWHU6\VWHP3HUPLWV 6XPPLW&RXQW\3XEOLF+HDOWK'HSDUWPHQW(QYLURQPHQWDO+HDOWK&RORUDGR KWWSZZZFRVXPPLWFRXV'RFXPHQW&HQWHU+RPH9LHZ

7KRPSVRQ5:D3ODQWDQG$QLPDO%LRORJLFDO(YDOXDWLRQ0DQDJHPHQW,QGLFDWRU6SHFLHVDQG 6SHFLDOLVW¶V5HSRUWIRU6XPPLW+XW$VVRFLDWLRQ¶V:HEHU*XOFK%DFNFRXQWU\+XW3URSRVDO:KLWH 5LYHU1DWLRQDO)RUHVW6XPPLW&RXQW\&RORUDGR:HVWHUQ(FRV\VWHPV,QF

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 162 of 200 &KDSWHU5HIHUHQFHV

²²²E3UH1(3$'UDIW%LRORJLFDO$VVHVVPHQWIRU6XPPLW+XW$VVRFLDWLRQ¶V:HEHU*XOFK %DFNFRXQWU\+XW3URSRVDO:KLWH5LYHU1DWLRQDO)RUHVW6XPPLW&RXQW\&RORUDGR:HVWHUQ (FRV\VWHPV,QF

86'$)RUHVW6HUYLFH/DQGVFDSH$HVWKHWLFV$+DQGERRNIRU6FHQHU\0DQDJHPHQW:DVKLQJWRQ '&'HFHPEHU

²²²7KH%XLOW(QYLURQPHQW,PDJH*XLGHIRU7KH1DWLRQDO)RUHVWVDQG*UDVVODQGV :DVKLQJWRQ'&

²²²:KLWH5LYHU1DWLRQDO)RUHVW/DQGDQG5HVRXUFH0DQDJHPHQW3ODQUHYLVLRQ:KLWH 5LYHU1DWLRQDO)RUHVW*OHQZRRG6SULQJV&2

²²²)RUHVW6HUYLFH+DQGERRN:DWHUVKHG&RQVHUYDWLRQ3UDFWLFHV+DQGERRN±'UDIW)LQDO 6HSWHPEHU5HJLRQ/DNHZRRG&2

²²²)RUHVW6HUYLFH+DQGERRN:DWHUVKHG&RQVHUYDWLRQ3UDFWLFHV+DQGERRN

²²²:KLWH5LYHU1DWLRQDO)RUHVWUHYLVHGVHQVLWLYHVSHFLHVOLVW±WHUUHVWULDO*OHQZRRG6SULQJV &2 XSGDWHGE\$1HWWOHV86)66HS

²²²%UHFNHQULGJH6NL5HVRUW3HDN3URMHFW)LQDO(QYLURQPHQWDO,PSDFW6WDWHPHQW

86(QYLURQPHQWDO3URWHFWLRQ$JHQF\)UHQFK*XOFK&OHDQXS)LYH

86)LVKDQG:LOGOLIH6HUYLFH1DWLRQDO:HWODQGV,QYHQWRU\PDSSLQJGDWD KWWSZZZIZVJRYZHWODQGV'DWD0DSSHUKWPO$FFHVVHG-XQH

:HOFK&³'HDWKVKLJKOLJKWERRPLQEDFNFRXQWU\VNLLQJ´7KH6HDWWOH7LPHV)HEUXDU\

=REEH03HUVRQDO&RPPXQLFDWLRQZLWK([HFXWLYH'LUHFWRURI6XPPLW+XWV$VVRFLDWLRQ-XO\

²²²3HUVRQDO&RPPXQLFDWLRQZLWK([HFXWLYH'LUHFWRURI6XPPLW+XWV$VVRFLDWLRQ0DUFK

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 163 of 200 &KDSWHU )LJXUHV

164 of 200 &KDSWHU)LJXUHV

),*85(6

),*85( (;,67,1*&21',7,216

),*85( 352326('$&7,21

),*85( 5(&5($7,21&217(;7

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW 165 of 200 Section House and Ken's Cabin Summit Huts are approximately 6.5 miles up 12 0 5 0 Boreas Pass Road, from the Association

0 Boreas Pass trailhead. 0 4 Baldy Bowl 2 1

12300 Figure 1: 0 0 11800 2 2 1 Existing Conditions

0 0 1 2 Iowa Mill 1 ²³ Resources 00 7 1 1 Streams Mining/Mill Site 1 ²³

0 Skiable Areas 0 Baldy Ridgeline (scour/non-ski) Weber Gulch

ad Lentil Bowl Ro dy Baldy Bowl M t. Bal 11400

11500 Access 0 11900 0 Lentil Bowl 1 1 0 !i Existing Parking Weber Gulch Existing Trails

11700 11100 Existing Roads 1 Land Ownership 1600 11000 Summit County Summit County/Town of Breckenridge National Forest Non-Shaded Indicates Private

Upper Trail of Tears Illinois Gulch 11300

11200 Weber Gulch Ni

a Project Extent

n B ce a an ld om y Silverthorne R rue Au T st ra ²³ Sallie Barber Mine li a G < To French Pass u l c W h Frisco oad 10600 Summit County 10900 e r R T Summit County b e r a 70 e Trail of Tears rb il ¨¦§ r Ba Gu ie lc all 10800 h S 10300 Breckenridge I 10700 l l 10200 i n *#Bald Mountain 10500 o i Little French Flume s 000 G 10 u l 9 F c VU 1 r h [ 12 e 0 nc 0 h G 10400 &B ulc B Trail h R W o ad ir up h

e per Gulc Feet P ench a Fr 0250 500 1,000 1,500 2,000 tc !i S h F

L T o S o p U8 T 0 Contour Interval: 100 Feet U r !i X 1 a F il renc M 10100 h Gu inn ad lch Road d ie M ll Ro a ine bug Hi Ye o Hum ll R ow h 106 L lc 0 d i b 1070 0 oa n 111 ri u 0 ch R c 0 c G r Trail Gul o 0 k h oo can ln T ic ed Ameri ra id R S

166 of 200

200 of 167

i A

r r

a i

d l

u h

o 0 l

k r c

r h a

l i

n 1

r u

1 1

0 i 0

7 0

0 H 0 l

6 u

0 1 R

H Y

d a o R d

d e c

l i

! i n

e l

r 10100

Contour Interval: 100 Feet 100 Interval: Contour

! i r

X 1

U 8

0 ,0 ,0 2,000 1,500 1,000 500 250 0

Feet F

S h

! i

P h

e p h

u r

l c i

r u

B &

10400

n 2

1 e

1 r

h [

F c

10500

* #

Bald Mountain Bald

G 1

s 0 Little French Flume French Little

Breckenridge o

10200

10700

10300

¨ ¦ §

10800

S 70

l l

Summit County Summit

i u Summit County Summit

Frisco

r a

Trail of Tears of Trail r

e b a

R e T

10600 a

d W

< To French Pass French To <

² ³

i Sallie Barber Mine Barber Sallie l

Silverthorne

s T

r u

! R o y

l a

a c

Project Extent Project

t «

¬ h

B g i

Non-Shaded Indicates Private Indicates Non-Shaded N

Weber Gulch Weber ft 11,480 Elevation

11200

National Forest National

Weber Gulch Hut Gulch Weber

Summit County/Town of Breckenridge of County/Town Summit

! < «

¬ ! C Summit County Summit

Illinois Gulch Illinois Upper Trail of Tears of Trail Upper

« ¬ E Land Ownership Land

Existing Roads Existing

Existing Trails Existing 11500

Prop. Admin. Access (ATV) on Existing on (ATV) Access Admin. Prop. !

Prop. Ski/Snowshoe on Existing Trail Existing on Ski/Snowshoe Prop.

0 0 6 11000 1 1

Proposed Administrative Access (ATV) Access Administrative Proposed

11100 11700

Weber Gulch Weber Proposed Ski/Snowshoe Proposed

« ¬ D Lentil Bowl Lentil

Access

0 Proposed Parking Estimated Area Estimated Parking Proposed 11900 0

! 11400

. Proposed Hut Parking Hut Proposed t

a M l

d 11300

o a

! i Existing Parking Existing

Baldy Ridgeline (scour/non-ski) Ridgeline Baldy

Parking

Baldy Bowl Baldy

Lentil Bowl Lentil

1 10900

7 Weber Gulch Weber

Skiable Areas Skiable

² ³ 1

Iowa Mill Iowa

Proposed Action Proposed

11800 0 0

Figure 2: Figure

12300

E Upper Trail of Tears Extension Tears of Trail Upper E 0.7 Proposed

Baldy Bowl Baldy

D Upper Trail of Tears (ATV only) (ATV Tears of Trail Upper D 0.6 Existing 2

C Nightmare on Baldy Extension Baldy on Nightmare C 0.6 Proposed 0

Boreas Pass trailhead. Pass Boreas B Nightmare on Baldy on Nightmare B 0.9 Existing Association

1 A Sallie Barber Road Barber Sallie A 1.3 Existing 0 Boreas Pass Road, from the from Road, Pass Boreas

# Trail Name Trail # itne(ie)Existing/Proposed (miles) Distance Summit Huts Summit are approximately 6.5 miles up up miles 6.5 approximately are Section House and Ken's Cabin Ken's and House Section 1 1 3 3 5 3 0 0 Section House and Ken's Cabin 0 0 are approximately 3.5 miles up 1 3 ²³ 6 Bald Mountain (13,684') Baker's Tank Summit Huts 0 Boreas Pass Road, from Baker's Tank. 0 1 1 3 3 4 2 0 0 0 0 Association

0 0 102 1 1 3 3 0 1 0 1 0 0 2 0 6 Figure 3: 0

0 11100

2 Recreation Context

0 11500

1 13100 2 80 10700 13000 0 Boreas Pass Road Proposed Weber Gulch Hut Location 1 !< 2 108 90 0 0 0 !i Proposed Hut Parking !i Existing Parking Existing Road Network Existing Trail Network 1 00 0 Proposed Access 0

0 Ski/Snowshoe

0 1 0 1 ATV (for Administrative Use Only) 0 Illinois Gulch

0 5 0 0 0 0 1 2 0 9 8 Skiable Areas 11 6 1 1 0 1 1 0 Weber Gulch 4 2 0 1 0 Lentil Bowl 3 2 1 Baldy Bowl 0 0 !i Boreas Pass Trailhead 2 2 0 Land Ownership 1 0 Iowa Mill 9 0 9 0 Summit County 1 2 0 1 ²³ Summit County/Town of Breckenridge 0 117 National Forest 9900 10000 Non-Shaded Indicates Private

0 0 0 1 2

11300 10 11400 9 10700 Mt. Baldy Trailhead 11500 0 108 0 0 !i 0 10000 1 0 0 Project Extent 0 0 11700 Boreas Pass Road Silverthorne

1010

11200 0 !< 9800 Weber Gulch Hut Frisco SummitSummit CountyCounty Elevation 11,480 ft ¨¦§70

0 Sallie Barber Road 30 10600 10 Breckenridge ²³ *#Bald Mountain Sallie Barber Mine

< To French Pass 10200 Town of Sallie Barber Road UV9 Breckenridge 10500 Miles

10400 000.25 .5 Minnie Mine Trailhead B&B Trailhead !i French Gulch Road

!i !i Sallie Barber Trailhead U !i 10100 Contour Interval: 100 Feet 10 111 1 60 0 07 0 9700 0 00 030 0 1 9600

168 of 200 $SSHQGLFHV $SSHQGL[$&XPXODWLYH(IIHFWV3URMHFWV $SSHQGL[%&LYLO5LJKWV,PSDFW$VVHVVPHQW $SSHQGL[&$OWHUQDWH+XW/RFDWLRQV $SSHQGL['5HVSRQVHWR&RPPHQWV

169 of 200 $SSHQGL[$&XPXODWLYH(IIHFWV3URMHFWV

$33(1',;$&808/$7,9(())(&76352-(&76

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

7DEOH$ &XPXODWLYH(IIHFWV0DWUL[ 3URMHFW/RFDWLRQ 3URMHFW3URMHFW1DPH 3URMHFW$SSURYDO 3URMHFW$UHD /$8&RQWDLQLQJ 5HVRXUFHV3RWHQWLDOO\ 6WUDLJKW/LQH 3URMHFW'HVFULSWLRQ 3URMHFW6WDWXV DFUHVOHQJWK 3URMHFW &XPXODWLYHO\ $IIHFWHG 'LVWDQFHWR+XW ,PSOHPHQWDWLRQ

SKI AREA PROJECTS 7KH%65683DUHD %UHFNHQULGJH6NL5HVRUW±683DUHDDQG FRQWDLQVDFUHVRI :LOGOLIH 3URMHFWV±LQ7KRPSVRQ 7DEOH9DULRXVRQPRXQWDLQ 9LUWXDOO\DOOSURMHFWVIXOO\ SULYDWH &RPSOHWHSDUWRIHQYLURQPHQWDO WRPLOHV ZKLFKDFUHVDUHRQ 6ZDQ5LYHU :DWHUVKHG DQGEDVHDUHDLPSURYHPHQWV LPSOHPHQWHG EDVHOLQH 1)6ODQGVPDQDJHGE\WKH :HWODQGV 86)6 &RQVWUXFWLRQRIVHYHQEHORZWUHHOLQHWUDLOVWRWDOLQJDSSUR[DFUHV /LIWVHUYHGDERYHWLPEHUOLQHWHUUDLQZRXOGSURYLGHDSSUR[LPDWHO\ DGGLWLRQDODFUHVRILQWHUPHGLDWHDGYDQFHGLQWHUPHGLDWHDQGH[SHUW %UHFNHQULGJH6NL5HVRUW±3HDNSURMHFW :LOGOLIH VNLLQJ2IWKLVWRWDODSSUR[LPDWHO\DFUHVZRXOGEHOLIWVHUYHGE\ $SSURYHGWREHLPSOHPHQWHGSDUWRI PLOHV $SSURYHGWREHLPSOHPHQWHG $SSUR[DFUHV 6ZDQ5LYHU :DWHUVKHG WKH3URSRVHG$FWLRQOLIWDQGDFUHVZRXOGEHOLIWVHUYHGE\WKH HQYLURQPHQWDOEDVHOLQH H[LVWLQJ,PSHULDO([SUHVV6XSHU&KDLU%\KLNLQJDSSUR[LPDWHO\PLQ :HWODQGV WRWKHVXPPLWRI3HDNIURPWKHSURSRVHGFKDLUOLIWWRSWHUPLQDOJXHVWV FRXOGDFFHVVDQDGGLWLRQDODFUHVRIH[SHUWWHUUDLQ .H\VWRQH5HVRUW±'HUFXP0RXQWDLQ :LOGOLIH $VXEVHWRISURMHFWVWKDWDUHSDUWRIWKH.H\VWRQH5HVRUW0DVWHU ,PSURYHPHQWV 5HDVRQDEO\)RUHVHHDEOH PLOHV $QDO\VLVEHLQJFRPSOHWHG DFUHV 6QDNH5LYHU :DWHUVKHG 'HYHORSPHQW3ODQODUJHO\OLPLWHGWR'HUFXP0RXQWDLQ &XUUHQWDQG)XWXUH)HGHUDO$FWLRQ :HWODQGV 7KH.H\VWRQH5HVRUW0DVWHU'HYHORSPHQW3ODQ 0'3 LQFOXGHVD .H\VWRQH0DVWHU'HYHORSPHQW3ODQ QHZXSJUDGHGOLIWVWUDLOVVQRZPDNLQJDQGJXHVWVHUYLFHIDFLOLWLHV :LOGOLIH DFUHVDFURVV 5HDVRQDEO\)RUHVHHDEOH&XUUHQWDQG)XWXUH PLOHV WKURXJKRXWWKHUHVRUW¶V6830'3FRPSRQHQWVZRXOGUHTXLUHVLWH $FFHSWHG 6QDNH5LYHU :DWHUVKHG WKH683 )HGHUDO$FWLRQ VSHFLILF1(3$DQDO\VLVSULRUWRLPSOHPHQWDWLRQEXWDUHFRQVLGHUHG :HWODQGV UHDVRQDEO\IRUHVHHDEOHIXWXUHDFWLRQV .H\VWRQH/LWWOH%RZO(ULFNVRQ%RZO 6QRZFDWVNLLQJLQDFUHVRI/LWWOH%RZODQG(ULFNVRQ%RZOZLWKLQ $SSURYHG'HFHPEHU 6QRZFDW6NLLQJ($ &RPSOHWHSDUWRI PLOHV WKH.H\VWRQH683DUHD7KLVWHUUDLQKDGSUHYLRXVO\EHHQVNLHGDV DFUHV 6QDNH5LYHU :LOGOLIH ,PSOHPHQWHG HQYLURQPHQWDOEDVHOLQH VLGHFRXQWU\WHUUDLQDFFHVVLEOHRQO\E\KLNLQJ

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± 6QDNH5LYHU :LOGOLIH &RPSOHWHSDUWRIHQYLURQPHQWDOEDVHOLQH KLNHEDFNWHUUDLQE\ 7KHOLIWDOVRRSHQHGXSDSSUR[DFUHVRI³KLNHEDFN´WHUUDLQQHDUWKH DFUHV ERWWRPRIWKHOLIWDQGUHFRQILJXUHG86)6EDFNFRXQWU\DFFHVVSRLQWV $FFHSWHG0DVWHU3ODQLQFOXGHV³WKH%HDYHUVDUHD´IRUOLIWVHUYHGVNLLQJ 9HJHWDWLRQ $UDSDKRH%DVLQ0'3 5HDVRQDEO\ $FFHSWDQFH2FWREHU PLOHV 7KLVHQWDLOVWUHHUHPRYDOWRVXSSRUWWKHFRQVWUXFWLRQRIWUDGLWLRQDOWUDLOV DFUHV 6QDNH5LYHU :DWHUVKHG IRUHVHHDEOHIXWXUHIHGHUDODFWLRQ DQDO\VLVIRUWKFRPLQJ DVZHOODVJODGHGWHUUDLQ :LOGOLIH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix A-1

170 of 200 $SSHQGL[$&XPXODWLYH(IIHFWV3URMHFWV

VEGETATION MANAGEMENT PROJECTS aPLOHVORQJ IURP ($UHOHDVHGLQ2FWREHU +RRVLHU3DVVWR'LOORQ %UHFNHQULGJH)RUHVW+HDOWKDQG)XHOV :LOO 7KH)RUHVW6HUYLFHSURSRVHGDIRUHVWKHDOWKDQGIXHOVUHGXFWLRQSURMHFW :LOGOLIH DSSHDOSHULRGHQGHG 5HVHUYRLU XSWRPLOHV EHFRPSOHWHDQGSDUWRIHQYLURQPHQWDOEDVHOLQH PLOHV RQDSSUR[LPDWHO\DFUHVRIIRUHVWZLWKLQWKHZLOGODQGXUEDQ 6ZDQ5LYHU :DWHUVKHG 1RY ZLGH±3HDN ZKHQGHFLVLRQPDGHRQWKH3URSRVHG$FWLRQ LQWHUIDFHVXUURXQGLQJ%UHFNHQULGJH ,PSOHPHQWDWLRQLVRQJRLQJ QHLJKERUKRRGWRWKHHQGRI :HWODQGV )UHQFK*XOFK 7KH)RUHVW6HUYLFHZRUNHGZLWKWKHRZQHUVRI5HG7DLO5DQFKWR 7UHHUHPRYDORFFXUUHG UHPRYHDFUHVRIGHDGORGJHSROHRQ)RUHVW6\VWHP/DQGVDGMDFHQWWR :LOGOLIH 5HG7DLO5DQFK:8, &RPSOHWH1)6DQG $SSURYHGLQ DFURVVaDFUHV PLOHV WKHUDQFKDQGDFUHVRISULYDWHODQGV6ODVKSLOHVZLOOEHUHPRYHG 6ZDQ5LYHU :DWHUVKHG SULYDWHODQGVSDUWRIHQYLURQPHQWDOEDVHOLQH &RPSOHWHG DFUHVRQWKHUDQFKDQG XQGHUWKHORQJWHUPVWHZDUGVKLSFRQWUDFWLQ)DOORU6ODVK DFUHVRI1)6ODQGV :HWODQGV SLOHVRQSULYDWHODQGDUHFXUUHQWO\EHLQJEXUQHGDVFRQGLWLRQVDOORZ 7KH)RUHVW6HUYLFHLPSOHPHQWHGDIRUHVWKHDOWKSURMHFWEHWZHHQ &XFXPEHU&UHHNDQG0LGGOH%DUWRQ&UHHNLQ7KHFOHDUHGDUHDLV :LOGOLIH *ROG+LOO&OHDU&XWV &RPSOHWHSDUW aDFUHVLQFOHDUFXW PLOHV DSSUR[DFUHVDQGLVORFDWHGLQWKH%65DQG%UHFNHQULGJH1RUGLF &RPSOHWHG 6ZDQ5LYHU :DWHUVKHG RIHQYLURQPHQWDOEDVHOLQH SDWFKHV &HQWHU683DUHDV7RFOHDUWKLVWLPEHUVHYHUDOWLPEHUURDGVZHUH :HWODQGV FRQVWUXFWHG 7KH)RUHVW6HUYLFHSURSRVHGDIRUHVWKHDOWKDQGIXHOVUHGXFWLRQSURMHFW 2SKLU0RXQWDLQ)RUHVW+HDOWKDQG)XHOV 3URMHFWDSSURYHGYLD :LOGOLIH DSSUR[LPDWHO\DFUHVRIIRUHVWZLWKLQWKHZLOGODQGXUEDQLQWHUIDFH aPLOHVEHWZHHQ)ULVFR 6ZDQ5LYHU 5HGXFWLRQ3URMHFW($ 1)6DQGSULYDWHODQGV PLOHV 'HFLVLRQ1RWLFH :DWHUVKHG IURPWKH6XPPLW&RXQW\&RPPRQVLQ)ULVFRWR&R\QH9DOOH\5GQHDU DQG&R\QH9DOOH\5G 6QDNH5LYHU 5HDVRQDEO\)RUHVHHDEOH ,PSOHPHQWDWLRQLVRQJRLQJ %UHFNHQULGJH :HWODQGV ,PSOHPHQWDYDULHW\RIYHJHWDWLRQWUHDWPHQWVRQ1)6ODQGVZLWKLQWKH .H\VWRQH683DUHD7KHVHWUHDWPHQWVDUHGHVLJQHGWRPLQLPL]HULVNIRU 'HFLVLRQ1RWLFH6LJQHG .H\VWRQH6NL$UHD)RUHVW+HDOWK XVHUVDQGLQIUDVWUXFWXUHDQGWRH[SHGLWHIRUHVWUHJHQHUDWLRQIROORZLQJ 9HJHWDWLRQ 0D\ 3URMHFW 3DUWO\FRPSOHWHSDUWRIHQYLURQPHQWDO PLOHV WKHRQJRLQJPRXQWDLQSLQHEHHWOHHSLGHPLF(QWDLOVUHPRYLQJGHDGDQG aDFUHV 6QDNH5LYHU :DWHUVKHG ,PSOHPHQWDWLRQVWDUWHGLQ EDVHOLQH G\LQJWUHHVUHJHQHUDWLQJORGJHSROHSLQHZKHUHWKH\RFFXUDQG :LOGOLIH VXPPHU SHUSHWXDWLQJPL[HGFRQLIHUDQGDVSHQVWDQGVWKURXJKRXW.H\VWRQH¶V 683DUHD 'HYHORSHGWRPDQDJHIRUHVWYHJHWDWLRQDIIHFWHGE\WKHPRXQWDLQSLQH EHHWOHHSLGHPLFDQGUHGXFHWKHWKUHDWRIFDWDVWURSKLFZLOGILUHWR FRPPXQLW\LQIUDVWUXFWXUH$SSUR[LPDWHO\DFUHVRI1)6ODQGVZLOO EHWUHDWHGLQFOXGLQJDFUHVRIIRUHVWKHDOWKWUHDWPHQWVDFUHV $SSURYHG0DUFK 'LOORQ5HVHUYRLU)RUHVW+HDOWKDQG)XHOV 9HJHWDWLRQ RIZLOGODQGXUEDQLQWHUIDFHGHIHQVLEOHVSDFHIXHOWUHDWPHQWVDFUHV 3URMHFWDFWLYLWLHVZHUH ($ 3DUWO\FRPSOHWHSDUWRIHQYLURQPHQWDO a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

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix A-2

171 of 200 $SSHQGL[$&XPXODWLYH(IIHFWV3URMHFWV

OTHER RELEVANT SUMMIT COUNTY PROJECTS 7KHSURSRVDOLVWRFUHDWHDQDSSUR[LPDWHO\PLOHVLQJOHWUDFNWUDLO 7HQGHUIRRW0RXQWDLQ0RWRUF\FOH7UDLO V\VWHPLQWKH7HQGHUIRRW)UH\*XOFKDUHD QRUWKRI+Z\EHWZHHQ 9HJHWDWLRQ PLOHVRIH[LVWLQJDQG 6\VWHP(QYLURQPHQWDO$VVHVVPHQW a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±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± PDQDJHPHQWLPSOHPHQWDWLRQLVH[SHFWHGWRWDNHVHYHUDO\HDUVWR FRPSOHWH7KH703FDWHJRUL]HVWUDYHOGHVLJQDWLRQVXQGHUWZRVHDVRQV VXPPHUDQGZLQWHU6XPPHULVGHILQHGDV0D\WKURXJK1RYHPEHU :LQWHULV1RYHPEHUWKURXJK0D\ TRANSPORTATION PROJECTS :LOGOLIH &'27KDVEHHQFRQGXFWLQJURDGFRQVWUXFWLRQDFWLYLWLHVRQ+LJKZD\ 2QJRLQJ+LJKZD\ZLGHQLQJ &RPSOHWH aPLOHVDORQJDQG 6ZDQ5LYHU :DWHUVKHG WRPLOHV EHWZHHQ+RRVLHU3DVVDQG,QWHUVWDWHVLQFHDQGLVDQWLFLSDWHGWR 2QJRLQJVLQFH SDUWRIHQYLURQPHQWDOEDVHOLQH LQFOXGLQJ+LJKZD\ 6QDNH5LYHU :HWODQGV FRQWLQXHLQWRWKHIRUHVHHDEOHIXWXUH 7UDIILF &'27DQGWKH)+$EHJDQDQDO\]LQJDOWHUQDWLYHVIRUWKH,0RXQWDLQ 7KRVHDORQJ, :LOGOLIH ,3(,6 $SSURYHGWREHLPSOHPHQWHG &RUULGRULQ-DQXDU\LQRUGHUWRDGGUHVVWKHXQGHUO\LQJQHHGWR aPLOHVDORQJDQG WRPLOHV )LQDO3(,6DSSURYHG FRUULGRURQDQGRII :DWHUVKHG SDUWRIHQYLURQPHQWDOEDVHOLQH UHGXFHFRQJHVWLRQDQGWRLPSURYHPRELOLW\DQGDFFHVVLELOLW\RQ, LQFOXGLQJ, :51) EHWZHHQ*OHQZRRG6SULQJVDQG& 7UDIILF

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix A-3

172 of 200 $SSHQGL[$&XPXODWLYH(IIHFWV3URMHFWV

HISTORIC DEVELOPMENT ACTIVITIES 7KH*ROGHQ+RUVHVKRHDQGVXUURXQGLQJDUHDVWKDWLQFOXGHWKH:HEHU *XOFKSURMHFWDUHDZHUHKHDYLO\PLQHGLQWKHV7KLVKLVWRULF 0LQLQJ$FWLYLWLHVLQ6XPPLW&RXQW\ SDUW 6ZDQ5LYHU WRPLOHV PLQLQJKDVOHGWRZDWHUTXDOLW\LVVXHVDQGSDVWVWUHDPFKDQQHODQG 1$ &RXQW\ZLGH :DWHUVKHG RIHQYLURQPHQWDOEDVHOLQH 6QDNH5LYHU KDELWDWGHJUDGDWLRQLQPDQ\WULEXWDULHVRIWKH6ZDQDQG6QDNH5LYHUV VRPHRIZKLFKDUHVWLOOIDUIURPUHFRYHUHG 6RXUFH6(*URXSDQG:HVWHUQ(FRV\VWHPV,QF

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix A-4

173 of 200 $SSHQGL[%&LYLO5LJKWV,PSDFW$VVHVVPHQW

$33(1',;%&,9,/5,*+76,03$&7$66(660(17

)RUHVW6XSHUYLVRU¶V2UGHU&ORVXUHRI1DWLRQDO)RUHVW6\VWHPODQGVDW:HEHU*XOFK %DFNFRXQWU\$UHD

,1752'8&7,21

7KH'LOORQ5DQJHU'LVWULFW:KLWH5LYHU1DWLRQDO)RUHVWSURSRVHVWRFORVH1)6ODQGVE\D)RUHVW 6XSHUYLVRU¶V2UGHUDW:HEHU*XOFKEDFNFRXQWU\DUHDLQ6XPPLW&RXQW\&RORUDGR7KHSXUSRVHRIWKH FORVXUHLVWRPLQLPL]HGLVWXUEDQFHWR&DQDGDO\Q[HONDQGIRUHVWFDUQLYRUHVGXULQJWKHVXPPHUDQG ZLQWHU

7KHFORVXUHRUGHUZRXOGFORVHWKHDUHDWRDOOIRUHVWXVHUVGXULQJWKHKXW¶VQRQRSHUDWLRQDOSHULRG W\SLFDOO\0D\WKURXJK1RYHPEHU 3URSRVHGWUDLOVHJPHQW³(´ZKLFKLVDSSUR[LPDWHO\PLOHLQ OHQJWKZRXOGEHFORVHG VLJQHGDQGJDWHG ZKHUHLWGHSDUWVIURP8SSHU7UDLORI7HDUVWRGLVFRXUDJH KLNLQJDQGELNHDFFHVVWRWKHKXWRXWVLGHWKHZLQWHURSHUDWLQJVHDVRQ

'XULQJWKHZLQWHUWKH6XSHUYLVRU¶VFORVXUHZRXOGH[WHQGWRDSSUR[LPDWHO\DFUHVRIWHUUDLQEHORZ QRUWK RIWKHSURSRVHG:HEHU*XOFKEDFNFRXQWU\KXW7KHFORVXUHLVLQWHQGHGWRSURYLGHHQIRUFHPHQW EH\RQGMXVWHGXFDWLQJJXHVWVQRWWRWDNHDVKRUWFXWIURPWKHKXWGLUHFWO\GRZQWR6DOOLH%DUEHU5RDG ZKHQGHSDUWLQJIURPWKHKXW6LJQDJHZRXOGEHORFDWHGDWWKHKXWWRLQIRUPUHFUHDWLRQLVWVRIWKLVFORVXUH

&,9,/5,*+76,03$&767$7(0(17

7KHFORVXUHZLOOKDYHQRLPSDFWVRQFLYLOULJKWVEHFDXVHWKHFORVXUHZLOODSSO\WRDOOLQGLYLGXDOVHTXDOO\ XQOHVVOLVWHGDERYHDVH[FHSWHGLQGLYLGXDOV1RRQHJURXSZLOOEHDIIHFWHGPRUHWKDQDQRWKHUJURXS $GMDFHQWSXEOLFODQGZLOOUHPDLQRSHQWRUHFUHDWLRQDQGRWKHUDFWLYLWLHV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix B-1 174 of 200 $SSHQGL[&$OWHUQDWH+XW/RFDWLRQV

$33(1',;&$/7(51$7(+87/2&$7,216

7DEOH&OLVWVWKHVLWHORFDWLRQVFRQVLGHUHGE\6+$DQGWKH)RUHVW6HUYLFHDORQJZLWKWKHFULWHULDIRUDQLGHDOKXWORFDWLRQDQGKRZHDFKVLWHPHWWKRVH

7DEOH& $OWHUQDWH+XW/RFDWLRQV 'HVLUDEOH4XDOLWLHVRID+XW 2SHUDWLRQDO5HTXLUHPHQWV 1RQ 4XDOLW\RI /RZ $ELOLW\WR 1R:HWODQGV $ELOLW\WR +XW/RFDWLRQV *UHDW 7RXULQJ 0RWRUL]HG 6RLOIRU*UH\ )ODW%XLOGLQJ 6NLLQJ $FFHVVLELOLW\ $YDODQFKH 6RODU*DLQ &UHDWH)LUH RU6HQVLWLYH 'HOLYHU 9LHZV6XQ 2SSRUWXQLWLHV 5RXWHVRU :DWHU 6LWHV 7HUUDLQ 'DQJHU %XIIHU +DELWDW 6XSSOLHV 5HPRWH :HEHU*XOFK 3UHIHUUHG/RFDWLRQ

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix C-1

175 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

$33(1',;' 5(63216(72&200(176217+( (19,5210(17$/$66(660(17

$SXEOLFQRWLFHIRUUHYLHZRIWKH:HEHU*XOFK%DFNFRXQWU\+XW($ZDVSXEOLVKHGLQWKH*OHQZRRG 3RVW,QGHSHQGHQWRQ$XJXVW7KHFRPPHQWSHULRGRQWKH($H[WHQGHGWKURXJK6HSWHPEHU \LHOGLQJHOHYHQFRPPHQWOHWWHUV²ERWKRSSRVLWLRQDODQGVXSSRUWLYH$GGLWLRQDOO\DSHWLWLRQ DGYLVLQJDJDLQVWWKHKXW¶VSURSRVHGORFDWLRQZDVVLJQHGE\DSSUR[LPDWHO\VL[W\SHRSOH

$OOFRPPHQWOHWWHUVZHUHUHYLHZHGIRUVXEVWDQWLYHFRPPHQWVDQGFRQWDFWLQIRUPDWLRQIRUHDFK FRPPHQWRUZDVHQWHUHGLQWRDPDVWHUGDWDEDVH7KHVHVXEVWDQWLYHFRPPHQWVSURYLGHWKHIRXQGDWLRQIRU ZKLFKWKLV5HVSRQVHWR&RPPHQWVLVEDVHG'HSHQGLQJRQWKHUHVRXUFHRUFRQWH[WVXEVWDQWLYHFRPPHQWV ZHUHRUJDQL]HGLQWRWHQFDWHJRULHV&RPPHQWVWKDWUHVXOWHGLQDQXSGDWHWRDSDUWLFXODUFRPSRQHQWRIWKH DQDO\VLVFRQWDLQHGLQWKH($DUHLQGLFDWHGDVVXFK

1DPHVDQGDIILOLDWLRQVRISHRSOHZKRVXEPLWWHGFRPPHQWVRQWKH($DUHSURYLGHGKHUH3HU)RUHVW 6HUYLFH+DQGERRN&KDSWHU FRSLHVRIFRPPHQWOHWWHUVUHFHLYHGE\VWDWHDQGORFDO DJHQFLHVDQGHOHFWHGRIILFLDOVDUHLQFOXGHGQRWULEHVRUIHGHUDODJHQFLHVVXEPLWWHGFRPPHQWOHWWHUV

1DPH 2UJDQL]DWLRQ 7KRPDV'DYLGVRQ 6XPPLW&RXQW\%RDUGRI&RXQW\&RPPLVVLRQHUV (OLVVD.QR[ &RORUDGR3DUNVDQG:LOGOLIH -RKQ:DUQHU 7RZQRI%UHFNHQULGJH 5D\PRQG'LIDQL 7RGG(DVWPDQ /HLJK*LUYLQ (OOHQ+ROOLQVKHDG 6XVDQ3URSSHU 5RFN\6PLWK 0LNH7XUHN 5RVH:HQW]HOO -RHDQG0DJJLH:HDNOH\

0DQ\VLJQDWXUHVRQWKHSHWLWLRQZHUHLOOHJLEOH 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D-1 176 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

7$%/(2)&217(176

&216758&7,21 $'0,1,675$7,9($&&(66 5(&5($7,21 6$)(7< 75$)),& 3$5.,1* 9(*(7$7,21 9,68$/6 :,/'/,)( $48$7,&63(&,(6 )25(676(59,&(32/,&<0$1$*(0(17 $/7(51$7,9(6 &808/$7,9(,03$&76 &8/785$/5(6285&(6

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D 2 177 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

&216758&7,21 $'0,1,675$7,9($&&(66

1.1 ATV Access on Bald Mountain Road Ǧ (speaking personally) Currently, the USFS travel management plan for Bald Mountain Road prohibits ATVs. Allowing SHA administrative use by ATVs on a road that is closed to ATVs is inappropriate and sends the wrong message on many levels. First of all, ATV users follow tracks Ǧ if they see another ATV or if they see tracks of ATVs, they will follow, even if the area is officially closed to them. I have seen ATV tracks on Bald Mountain Road this past summer, despite the closure in the Travel Management Plan. Secondly, other users of Bald Mountain Road will see SHA's ATV or ATV tracks and they won't know that SHA has special administrative access; their experience will be diminished, or they may be inclined to use ATVs themselves. Thirdly, to widen the Upper Nightmare trail to accommodate ATV travel goes against the mission and the message of Summit Huts Association and is inappropriate. SHA does not have motorized vehicle access to Janet's Cabin and resupplies that hut via helicopter. As the former executive director of SHA, I know that this is expensive, but it is possible and it is currently being done. I do not support ATV access to the hut for maintenance and supply. Those activities can be accomplished via helicopter, or by using a fullǦsized vehicle on roads that are permitted for it, and then carrying supplies via "burley" or "bob" style trailers, in backpacks, or by hand, to the hut site, as SHA currently does for Janet's Cabin.

$GPLQLVWUDWLYHXVHRIWKHSURSRVHG$79URXWHLVFRQVLVWHQWZLWK)RUHVW3ODQGLUHFWLRQIRU0DQDJHPHQW $UHD%DFNFRXQWU\5HFUHDWLRQ±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

1.2 Bald Mountain Road Administrative Access: Although the primary access to the proposed hut is identified as French Gulch and Sallie Barber Roads, the gain in elevation (10,320' at the proposed trailhead vs. 10,640' at the Bald Mountain Road trailhead) and closer proximity of the Bald Mountain Road trailhead (approximately 2, miles vs. 3, miles), would make the proposed administrative access trail a likely alternative access point for hut users. In addition, the skiǦout from the hut to Sallie Barber Road is heavily forested and quite steep in places, while the skiǦout using Bald Mountain Road is significantly more userǦ 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D-3 178 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

friendly. However, overnight parking is prohibited at the Bald Mountain Road trailhead because it lacks sufficient space to accommodate both day users and overnight parking. Bus access from the Town of Breckenridge to the Bald Mountain Road trailhead is currently available and the Town of Breckenridge already operates an overnight payǦparking program at the Breckenridge Ice Rink that could allow hutǦusers to park there overnight. Given these advantages, the BOCC believes that an access option utilizing the Bald Mountain Road trailhead with hut user parking at the Breckenridge Ice Rink warrants further consideration in the EA.

,QIRUPDWLRQZDVDGGHGRQSDJHVDQGRIWKH($WRIXUWKHUH[SODLQWKDWWKH%UHFNHQULGJH,FH5LQN SDUNLQJORWZRXOGEHDQDYDLODEOHRSWLRQIRUKXWXVHUV+XWXVHUVZRXOGEHDEOHWROHDYHWKHLUFDUVDWWKH ,FH5LQNRYHUQLJKWDQGWDNHWKH6XPPLW6WDJHWRWKH%DOG0RXQWDLQ7UDLOKHDG2YHUQLJKWSDUNLQJLV FXUUHQWO\DQGZRXOGUHPDLQVWULFWO\SURKLELWHGDWWKH%DOG0RXQWDLQ7UDLOKHDGDQGWKXVLWLVQRWDQ RSWLRQIRUKXWXVHUV

1.3 The proposal outlines the creation of an access of sufficient width for an ATV or small utility vehicle (UTV) pulling a trailer on National Forest and Town/County Open Space. This trail alignment will also require improvements that will be subject to the County's CUP process. Issues that will need to be addressed in that CUP review process include protection of environmentally sensitive areas, especially those areas that are typically wet in the spring and summer months, preventing unauthorized motorized use of this trail, and longǦterm trail maintenance and management of trail use, especially during the summer months when the hut is not in operation. In addition, a significant amount of site disturbance, tree removal, and possibly spanning structures across two steeply incised drainageǦways may be required to allow for ATV/UTVǦtrailer access. Detailed grading plans for such access will have to be submitted as part of a CUP application to the County. Such plans will be referred to various responsible and trustee Federal, State, and local authorities (e.g. USFS, CPW, Town of Breckenridge, etc) as part of the CUP referral process.

,QIRUPDWLRQZDVDGGHGWR&KDSWHU6HFWLRQ/RIWKH($WRVSHFLI\WKDWWKH&83ZRXOGEHQHFHVVDU\SULRU WRLPSOHPHQWDWLRQRIDQ\DSSURYHGSURMHFWV6+$ZRXOGEHUHVSRQVLEOHIRUREWDLQLQJDQGFRPSO\LQJZLWK QHFHVVDU\SHUPLWVDQGSODQV

1.4 Please note that access from French Gulch to the hut will require a trail extension that crosses land owned by Summit County or jointly with Town of Breckenridge and zoned BC (Backcountry). Pursuant to the County's zoning regulations, this proposed extension of the existing Nightmare on Baldy Trail uphill to the potential hut site is subject to approval of a Conditional Use Permit (CUP) by the County. The EA incorrectly states that this trail extension would only be subject to a CountyǦissued "General Construction Permit." Issues that will need to be addressed in the County's review of that CUP will include implementation of erosion control, longǦterm trail maintenance, and coordinated signage with that installed on land under the Forest Service's jurisdiction.

,QIRUPDWLRQKDVEHHQDGGHGWR&KDSWHU6HFWLRQ/RIWKH($WRVSHFLI\WKDWWKH&83ZRXOGEHQHFHVVDU\ SULRUWRLPSOHPHQWDWLRQRIDQ\DSSURYHGSURMHFWV6+$ZRXOGEHUHVSRQVLEOHIRUREWDLQLQJDQG FRPSO\LQJZLWKQHFHVVDU\SHUPLWVDQGSODQV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D 4 179 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

1.5 Use of the Bald Mountain Road trailhead by construction crews to access the project site would result in additional parking demand at the trailhead, which as noted above already experiences significant levels of use. The Board requests that the Forest Service identify and evaluate alternative construction crew parking options such as appropriate sites further up on Bald Mountain Road to ensure that construction crew parking does not adversely impact the public 's access to this trailhead.

,QIRUPDWLRQZDVDGGHGWRSDJHRIWKH($WRVSHFLI\WKDWFRQVWUXFWLRQUHODWHGSDUNLQJDUHDVZRXOGEH LGHQWLILHGE\6+$DQGWKH)RUHVW6HUYLFHLQWKH6XPPLW&RXQW\&RQGLWLRQDO8VH3HUPLWSURFHVV 3RWHQWLDOLQWHUUXSWLRQRISXEOLFDFFHVVWRWKH0W%DOG\5RDGWUDLOKHDGZRXOGEHRQHFRQVLGHUDWLRQ 6LPLODUWRDGPLQLVWUDWLYHXVHDQDSSURSULDWHFRQVWUXFWLRQVWDJLQJDUHDZRXOGEHLGHQWLILHGDQG FRQVWUXFWLRQXVHRIWKH%DOG0RXQWDLQ7UDLOKHDGLVQRWDQWLFLSDWHG7KH&83ZDVDOVRLGHQWLILHGDVD QHFHVVDU\SHUPLWLQ&KDSWHU UHIHUWRWKHUHVSRQVHWRFRPPHQW

5(&5($7,21

2.1 Thematic: Nordic skiers, snowshoers, and backcountry skiers all use different equipment and prefer different trail widths, conditions, and configurations and the proposal should consider those.

,QIRUPDWLRQZDVDGGHGWRSDJHRIWKH($WRH[SODLQWKDWDYDULHW\RIZLQWHUXVHUVUHFUHDWHRQ6DOOLH %DUEHU5RDGHDFKSUHIHUULQJVOLJKWO\GLIIHUHQWFRQGLWLRQVDQGWKDWWUDLOFRXUWHV\LVQHFHVVDU\WRSUHVHUYH WKHH[SHULHQFHIRUDOO6+$GLGFRQVLGHUWKHYDULHW\RIXVHUVWKDWZRXOGEHDFFHVVLQJWKHKXWDVZHOO ZKLFKLVUHIOHFWHGLQWKHSURSRVHGWUDLOFRQILJXUDWLRQV LHWUDLOZLGWKDQGJUDGHDUHDSSURSULDWHIRUD YDULHW\RIH[SHULHQFHOHYHOVDQGHTXLSPHQWFKRLFHV

2.2 The math formula used in this EA (3Ǧ10) to come up with the number of folks venturing beyond 100 yards from the hut, (3.6 people a day) is misleading. The equation implies that someone who spends two nights at the hut will only ski on one of those days. There might be only 1300 individuals staying at this hut over a winter season, but there will be 2600 user visits at this hut, based on 90 percent occupancy. And that means 2600 skiers out skiing. According to SHA’s estimate, only half of the visitors will venture far from the hut which means that 8 people a day will venture over to the already crowded Lentil Bowl and the Tit (and not 3.6) or if it is a group more intent on skiing, it could be as many as 16 people a day. 8Ǧ16 more skiers over on Bald Mountain will double the amount of use on a daily basis, especially early winter when the snow in Weber gulch is usually bad. In addition, on the days when the powder skiing is good, a higher number of folks will be out skiing – day users and Hut users. A Hut at half the size is a more manageable number of skiers heading over to Bald Mountain – 4Ǧ8 skiers a day.

3DJHRIWKH($KDVEHHQXSGDWHGWRUHIOHFWUHYLVHGFDOFXODWLRQV7KHUHYLVHGHVWLPDWHHTXDWHVWR VNLHUVSHUGD\

2.3 “Based on data from SHA, it is reasonable to assume that roughly half of the 1,100 total guests staying at the hut throughout the season would remain within 100 yards of the hut, while the other half would be expected to venture out farther for backcountry skiing.” The number 1100 is based on one person staying two nights and makes it sound as if they only ski one day out of their two day stay. A more useful number is how many user visits will this 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D-5 180 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

hut see at 90 percent occupancy? 2600 total user visits. With all due respect to SHA, this statement doesn’t match the experience others have witnessed from Huts that offer good skiing.

&KDQJHVKDYHEHHQPDGHWRWKH($WRUHIOHFWWKHUHYLVHGFDOFXODWLRQV5HIHUWRWKHUHVSRQVHWR FRPPHQW

2.4 SHA estimates that approximately one party per day uses this area (Lentil Bowl) throughout the winter, with higher use on the weekends.” (3Ǧ8) This was the only data given in the EA on the backcountry terrain beyond Weber Hut and it is not accurate. Last winter the Tit and Lentil Bowl saw on average ten to twenty skiers a day or at least two to four parties in each location within a two hour period. There are typically numerous tracks in both zones. The intent of Backcountry skiing is to find fresh tracks and it has become more difficult to experience this on Bald Mountain because the access is easy. The impact from Weber Hut will only worsen the conditions in this area adding 8Ǧ16 skiers or almost doubling the normal number of visitors a day into these areas. A smaller hut of only 4Ǧ10 skiers a day in this area would be a significant improvement on reducing these conflicts between day users and hut users.

7KH($KDVEHHQUHYLVHGWRPRUHDFFXUDWHO\GHVFULEHWKHVNLDEOHWHUUDLQRQ%DOG0RXQWDLQLQFOXGLQJ HVWLPDWHVRIXVDJHE\DUHD7KHFKDQJHVDUHIRXQGRQSDJHVDQGRIWKH($)LJXUHVDQGKDYH EHHQXSGDWHGWRPRUHDFFXUDWHO\GHSLFWWKHSULPDU\VNLLQJDUHDVRQ%DOG0RXQWDLQ,QIRUPDWLRQKDVDOVR EHHQDGGHGWRSDJHVWKURXJKRIWKH($WRGHVFULEHWKHIDFWRUVWKDWFRQWULEXWHGWRWKHKXW¶V SURSRVHGFDSDFLW\RIJXHVWVSOXVKXWPDVWHU¶VTXDUWHUV

5HJDUGLQJWKHSURSRVHGKXW¶VRYHUQLJKWFDSDFLW\WKH)RUHVW6HUYLFHWRRNPDQ\IDFWRUVLQWRFRQVLGHUDWLRQ LQFOXGLQJ6+$¶VRULJLQDOSURSRVDOIRUDKXWZLWKDQRYHUQLJKWFDSDFLW\RIJXHVWVSXEOLFFRPPHQWV GXULQJVFRSLQJDQGWKH($ VXJJHVWLQJWKDWWKHKXWVKRXOGEHEXLOWZLWKDVPDOOHURYHUQLJKWFDSDFLW\ RSHUDWLRQDODGPLQLVWUDWLYHFRVWVRIEXLOGLQJDQGPDLQWDLQLQJWKHKXWDQGSRWHQWLDOGLUHFWDQGLQGLUHFW LPSDFWVRIKXWXVHUVRQUHFUHDWLRQWUDIILFSDUNLQJDQGZLOGOLIHUHVRXUFHV&KDSWHU6HFWLRQ'RIWKH($ GLVFXVVHVDOWHUQDWLYHVDQGGHVLJQFRPSRQHQWVWKDWZHUHFRQVLGHUHGEXWHOLPLQDWHGIURPGHWDLOHGDQDO\VLV 8QGHU³+XW'HVLJQ´WKHFDSDFLW\RIWKHKXWLVGLVFXVVHG7KH'UDIW'HFLVLRQ1RWLFHLQFOXGHVDWDEOHWKDW FRPSDUHVWKHSRWHQWLDOGLUHFWDQGLQGLUHFWLPSDFWVRIDKXWEXLOWZLWKGLIIHUHQWRYHUQLJKWFDSDFLWLHV

2.5 “The Weber Gulch backcountry hut is proposed for winter use, between approximately midǦNovember and May 1. Backcountry ski terrain exists throughout Weber Gulch, primarily in northernǦaspect trees on the north side of Bald Mountain. There are several above tree line bowls to the southwest of the site that provide skiing opportunities with appropriate slope and snow coverage for backcountry skiing (refer to Figures 1, 2 and 3).” The shaded “Primary Winter Use” on these Figures is the terrain described above. This makes it sound like the skiing opportunities are much greater than they are from the Weber Hut, when in reality there is limited and unreliable skiing adjacent to the hut, especially early winter. For most winters, backcountry skiers will have trouble skiing the north facing slope above and below the hut until later in the season. The northern aspect trees above the hut only allow lines for about 8 Ǧ10 skiers for a short 400 foot run and many of the trees are dense and difficult to navigate through. This run’s shady north facing aspect and Colorado’s shallower snowpack, mean that the snow takes longer to be strong enough to 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D 6 181 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

support a skier’s weight. If the snow on Weber Gulch’s mellow pitches is weak, skiers can’t turn and instead sink to the bottom and can’t move. If the wildlife closure is removed from lower Weber Gulch, than the run will continue for another 400 feet, but the weak snow will continue. Also this EA states on Figures 1, 2 and 3, that part of the primary winter use from Weber Gulch is above the hut and southwest, also called “Bald Mountain Open Bowl Skiing”. This terrain is flat and rarely holds snow. It is usually wind scoured and rocky. To include this as part of the ski terrain for Weber Hut is misleading. All of the skiing deteriorates on Bald Mountain’s westnorthwest aspect at about the 11,900 foot elevation.

3DJHRIWKH($VWDWHV³$OWKRXJKEDFNFRXQWU\WHUUDLQLQWKH3URMHFW$UHDLVFRQVLGHUHGJRRG:HEHU *XOFKLVQRWNQRZQDVDQH[FHSWLRQDOEDFNFRXQWU\VNLLQJDUHDDQGWKXVPLJKWDSSHDOOHVVWRWKH H[SHULHQFHGVNLHUVFRPSDUHGWRRWKHUEDFNFRXQWU\KXWVLQWKH70+$V\VWHP´6NLDEOHDUHDVKDYHEHHQ XSGDWHGRQ)LJXUHVDQG$OVRVLPLODUWRWKHSUHYLRXVFRPPHQWWKHGHVFULSWLRQDQGHVWLPDWHRI XVDJHRIWKRVHVNLLQJDUHDVKDYHEHHQUHYLVHGWREHPRUHVSHFLILFDQGDFFXUDWH

2.6 Building a hut that could service up to some 140 "backcountry" skiers per week would impact the existing local users negatively as the trail surfaces become hardened from the extra skiers and the skinǦcovered skis preferred by "backcountry" skiers. Yes, there will be some snowshoers that are not impacted, but impacts to the XC skiing community have not received the necessary analysis under the current study.

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

$VGLVFXVVHGLQWKH5HFUHDWLRQDQDO\VLV &KDSWHU6HFWLRQ$&KDUW$ 6DOOLH%DUEHU5RDGLVPRVW SRSXODUIRUFURVVFRXQWU\VNLLQJLQ1RYHPEHU DQGOLNHO\LQ'HFHPEHU ,PSDFWVDUHH[SHFWHGWREH PLQLPDOEHFDXVHWKHKXWZRXOGQRWRSHQXQWLOWKHWKLUGZHHNRI1RYHPEHUDQG6+$UHVHUYDWLRQVGRQRW W\SLFDOO\UHDFKIXOOFDSDFLW\XQWLO-DQXDU\

2.7 “Close the identified section of the Great Flume Trail to winter use to offset the new Weber Hut snow compaction and remove this route from the WRNF snow compaction map.” (Table 2Ǧ2, page 2Ǧ8). Backcountry Skiers for years have skied on the north facing slopes off Humbug Hill and all the way towards Mt. Guyot. All of these ski runs cross over the Great Flume. This trail will see more winter nordic use since it is just now being discovered by summer nonǦmotorized users who also tend to be nordic skiers or snowshoers. It is part of a good Nordic circuit using Sidedoor and Prospect Gulch. Backcountry skiers have lost Peak 6 and 5.5. This hut will double the number of backcountry skiers in an already crowded destination, Bald Mountain, the most popular backcountry skiing area in the Upper Blue. Weber Gulch will no longer be that place of solitude and instead will always be tracked and have constant traffic. Now backcountry skiers are also losing all the terrain near the Great Flume as well. Where does the Forest Service suggest backcountry skiers should go?"

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D-7 182 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

7KHUHLVQRSURSRVDOWRFORVHWKH*UHDW)OXPH7UDLOLQHVVHQFHWKLVLVDQ³DFFRXQWLQJH[HUFLVH´IRUWKH )RUHVW6HUYLFHLQUHODWLRQWRLWVPRQLWRULQJRIVQRZFRPSDFWHGURXWHV7DEOHRIWKH($KDVEHHQ XSGDWHGWRFODULI\WKLVVWDWHPHQWDQGWRPDNHLWFOHDUWKDWWKH*UHDW)OXPH7UDLOLVQRWEHLQJFORVHG

,QVXPPDU\WKH*UHDW)OXPH7UDLOLVVKRZQDVD³VQRZFRPSDFWHGURXWH´RQWKH:51)%DVHOLQH 6QRZ&RPSDFWLRQ0DS*URXQGYHULILFDWLRQDQGGRFXPHQWDWLRQVKRZVWKDWWKLVURXWHZKLFKLVPLOHV ORQJGRHVQRWUHFHLYHUHJXODUXVHGXULQJZLQWHUPRQWKVWKDWFDXVHVVQRZFRPSDFWLRQ7KHUHIRUHWKLV URXWHZLOOEHUHPRYHGIURPWKH%DVHOLQH6QRZ&RPSDFWLRQ0DS7KHSURSRVHGDFWLRQZRXOGQRW H[SDQGVQRZFRPSDFWHGURXWHVEH\RQGZKDWWKH%DVHOLQH6QRZ&RPSDFWLRQ0DSVKRZV

,QWKH($WKLVDFWLRQZDVUHPRYHGIURP7DEOH

2.8 Adding 16Ǧ32 skiers daily will turn this from a soft snow great Nordic ski into a sketchy hardpack route for the nordic day users using light gear. Snowshoers and Backcountry skiers do okay on firm icy trails but nordic skiers do not. Summit Huts lacks knowledge on this type of impact because no other hut approach route has this issue. Francie’s and Section House use wide roads and Janet’s Cabin uses a trail that previously saw almost no winter day use. Let’s say it doesn’t snow for five days which is typical for most winters here. Weber Hut, sleeping 16Ǧ20 people, has been approved. Now day users who want to ski Nightmare on day five of no snow, will find that this trail has seen 100Ǧ160 skier tracks going up and down it. If the hut didn’t exist, that same Day Use nordic skier would get to this trail after five days of no snow, and maybe only have 20 skier tracks previously on it. This is a substantial difference in snow conditions and could easily transform this incredible ski trail from one that can handle light use with no snow, to one that becomes icy, firm and unpleasant. Where now should a nordic skier go?

,PSDFWVWR1RUGLFVNLHUVDUHGLVFORVHGLQ&KDSWHU6HFWLRQ$ 5HFUHDWLRQ RIWKH($8QGHUWKH3URSRVHG $FWLRQDSSUR[LPDWHO\PLOHRI1LJKWPDUHRQ%DOG\ZRXOGH[SHULHQFHLQFUHDVHGXVH%H\RQGWKDW 6+$JXHVWVZRXOGXWLOL]H6DOOLH%DUEHU5RDG ZKLFKFXUUHQWO\UHFHLYHVKHDY\XVHWKURXJKRXWWKHZLQWHU DQGQHZWUDLOVWRDFFHVVWKHSURSRVHGKXW

2.9 Missing from the Primary Winter Use Shading. The Lentil Bowl is not part of the “Primary Winter Use” shaded hut terrain which might be an attempt to not draw attention to the fact that Lentil Bowl, one of the more popular and crowded day use backcountry destinations, will soon become even more crowded as the Hut visitors realize how easy it is to reach and how the skiing tends to be better in Lentil Bowl. Hut Skiers want untracked conditions but Weber Gulch will get tracked out quickly and Lentil Bowl will be their next destination. The northwest open glades of Lentil bowl tends to be more skiable earlier in the season than the north facing trees of Weber. These maps leave out another important zone that needs to be addressed in this EA. The most popular skiing on Bald Mountain is called the Tit, and it is just south of Iowa Mill. It is the most popular skiing destination in the County because it is so easy to reach (an hour approach) and avalanche safe. It is wide open, and mostly treeǦ less so the skiing is easy and the snowpack is stronger than Weber Gulch. Weber Hut visitors could get to the top of this run in fifteen to twenty minutes of easy effort. In the last few years the use on the Tit and Lentil Bowl has increased dramatically. Last year it was common to see six to eight other skiers in a two hour period and also see a lot of old tracks.

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D 8 183 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

Given the unreliable skiing from the hut, these areas will only get more crowded. Hybrid users also love this area.

7KH($KDVEHHQUHYLVHGWRPRUHDFFXUDWHO\GHVFULEHWKHVNLDEOHWHUUDLQRQ%DOG0RXQWDLQLQFOXGLQJ PRUHVSHFLILFHVWLPDWHVRIXVDJHE\DUHD7KHFKDQJHVDUHIRXQGRQSDJHRIWKH($)LJXUHVDQG KDYHDOVREHHQXSGDWHGWRPRUHDFFXUDWHO\GHSLFWWKHVNLDEOHDUHDVRQ%DOG0RXQWDLQ

2.10 Very close to this hut location is also some of the most crowded backcountry ski terrain in the Upper Blue, on Bald Mountain’s northwest side. This EA needs much greater analysis on the impact that this hut will have on the most popular backcountry ski destination in Breckenridge. A smaller hut will certainly reduce the impact on Bald Mountain which is already crowded with skiers.

7KH5HFUHDWLRQ$QDO\VLV &KDSWHU6HFWLRQ$ LQFOXGHVDUHYLVHGDQDO\VLVRIEDFNFRXQWU\WHUUDLQRQ%DOG 0RXQWDLQDVZHOODVLPSDFWVWRLW,QIRUPDWLRQKDVEHHQDGGHGWRSDJHVWKURXJKRIWKH($WR GHVFULEHWKHIDFWRUVWKDWFRQWULEXWHGWRWKHKXW¶VSURSRVHGFDSDFLW\RIJXHVWV

2.11 Encounters with others are rare on Nightmare in the winter. The reason so many love to ski or snowshoe this trail is because of the solitude it offers and the improved snow conditions from Sallie Barber Road. Going from seeing no one to a guarantee of eight to sixteen people daily on this trail is more than just a ‘brief impact’. This basically eliminates a feeling of solitude, and the EA fails to address this problem. There is also no explanation as to why the EA believes that day users will not see hut users since there is no data on when Nightmare is being used. The simple solution to reducing the negative impacts on solitude and ski/snow conditions is to reduce the number of people on the trail. A hut which sleeps 8Ǧ10 is one step towards maintaining the sense of solitude which so many love from Nightmare.

7KH3URSRVHG$FWLRQLQFRUSRUDWHVDWRWDORIPLOHVRIURDGVDQGWUDLOVWRDFFHVVWKH:HEHU*XOFK+XW $SSUR[LPDWHO\PLOHVRIWKLVWRWDODUHDWWULEXWDEOHWR6DOOLH%DUEHU5RDGDQGDQRWKHUPLOHVDUHQHZ WUDLOVWKDWZRXOGEHEXLOWVSHFLILFDOO\WRDFFHVVWKH:HEHU*XOFK+XWOHDYLQJPLOHRIWKHH[LVWLQJ 1LJKWPDUHRQ%DOG\WUDLOWKDWZRXOGH[SHULHQFHKLJKHUXVH7KHSURSRVHGXVHRIWKHVHURDGVDQGWUDLOVLV FRQVLVWHQWZLWKPDQDJHPHQWGLUHFWLRQIRXQGLQWKH)RUHVW3ODQ

$GGLWLRQDOLQIRUPDWLRQZDVDGGHGWRERWK&KDSWHU6HFWLRQ$ 5HFUHDWLRQ DQG&KDSWHU6HFWLRQ% 3DUNLQJDQG7UDIILF WRLQGLFDWHWKDWWKHKLJKHVWYROXPHRIKXWUHODWHGWUDYHOZRXOGRFFXUEHWZHHQ DPDQGSPDVWKHKXWWXUQRYHUWLPHLVSP7KDWLVWKHODWHVWSHRSOHFDQOHDYHDQGWKHHDUOLHVW SHRSOHFDQDUULYH,PSDFWVWRXVHUVDUHH[SHFWHGWREHIRFXVHGGXULQJWKHPLGGOHRIWKHGD\DQGRFFXU LQIUHTXHQWO\DVSHUFHQWKXWRFFXSDQF\ZRXOGEHLQIUHTXHQWQRQHWKHOHVVVRPHXVHUVZRXOGYLHZ WKHVHLPSDFWVDVGHJUDGLQJWKHH[LVWLQJUHFUHDWLRQH[SHULHQFH

2.12 Snow, Ski and Solitude impacts on Sallie Barber Road. Contrary to the EA stating that 32 more people a day “could result in a minor impact to the recreation experience on Sallie Barber Road, and is only a “minor” impact on recreation,” the opposite will be true. Currently day skiers enjoy Sallie Barber Road Monday through Friday, especially in November and December and might see only three or four other skiers. The traffic report on 3Ǧ7 is a little misleading since the majority of the traffic is on weekends. While often the snow is compacted on Sallie Barber, for the EA to say that “Additional skiers and 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D-9 184 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

snowshoers would not add to the snow compaction that already exists” is not accurate. Often after new snow midweek, one can head out and ski Sallie Barber and always find fresh tracks or soft tracks, especially in the morning and usually for a few days in a row midweek. With a guarantee of 16Ǧ32 more tracks every day now on this road, and usually by mid-morning, this will no longer be the case. The snow compaction will become a daily occurrence and extend further to each side of the trail where in the past the sides of this road can offer better snow conditions. Skiers love having a set ski track to follow, but the more users on this trail, the more likely the ski track will disappear. Never again, can a day skier count on solitude or soft snow on Sallie Barber midweek, since a 90 percent occupancy rate means it will constantly see traffic. This is a substantial increase and a big drawback considering that Sallie Barber is the only place in Breckenridge to find good snow early season, especially for much of November. Hundreds of Nordic skiers flock to Sallie Barber Road early season.

:KLOHWKHKXWZRXOGEHRSHQLQODWH1RYHPEHULWZRXOGQRWEHH[SHFWHGWRIXOO\ERRNXQWLOPLG-DQXDU\ WKLVLVVXSSRUWHGE\6+$GDWDIURPH[LVWLQJKXWV 7KHUHIRUHIHZHUKXWXVHUVDUHDQWLFLSDWHGRQWKHWUDLOV IURP1RYHPEHUWKURXJKHDUO\-DQXDU\

2.13 We are happy to see that summer use at the hut, other than maintenance, would not be allowed. EA at 1Ǧ4. This would reduce adverse impacts to various wildlife species. However, we note that most of the 10th Mountain Huts did not allow summer use when they were first opened, but now almost all of them do allow such use. To reduce the chances of this happening with the Weber Gulch hut, should it be approved, the decision notice must clearly state that such use is not authorized and that a new decision, updated NEPA documentation, and public involvement would be required to allow summer use.

%HFDXVHVXPPHUXVHLVQRWDFRPSRQHQWRIWKH3URSRVHG$FWLRQQRVLWHVSHFLILF1(3$DQDO\VLVZDV SHUIRUPHGRQVXPPHUXVHDQGLWLVQRWDFRPSRQHQWRIWKH6HOHFWHG$OWHUQDWLYH6KRXOG6+$SURSRVHWR RSHQWKHKXWIRUVXPPHUXVHDWVRPHSRLQWLQWKHIXWXUH DQGVKRXOGWKH)RUHVW6HUYLFHDFFHSWWKH SURSRVDO DVHSDUDWH1(3$HYDOXDWLRQZRXOGEHUHTXLUHG

2.14 EA p. 1Ǧ3 states that new huts are “immediately filled”, but p. 3Ǧ12 states that 100 percent occupancy would be infrequent. Given the popularity of huts, we believe the full occupancy is likely on almost all weekends and holidays when the snow is good. Indeed, the analysis of recreation impacts assumes 90 percent occupancy throughout the season. EA at 3Ǧ9. If this is the case, then surely the hut would be full many nights, and not just on weekends and holidays. Thus impacts to the narrow Bald Mountain Trail are likely to include more frequent encounters between day skiers and hut users earlier packǦout of snow, and more frequent hardpack conditions, decreasing the quality of the recreational experience for all winter users. See EA at 3Ǧ12.

7KHUHLVDGLIIHUHQFHEHWZHHQRFFXSDQF\DQGERRNLQJV:HHNHQGVDQGSRSXODUZHHNVWKURXJKRXWWKH VHDVRQERRNXSIDVWZKLOHPLGZHHNDYDLODELOLW\PLJKWUHPDLQWKURXJKRXWWKHVHDVRQ+RZHYHUDVLQJOH SDUW\PD\ERRNWKHHQWLUHKXWIRUDQLJKWRUDZHHNHQGWKRXJKWKHLUJURXSZLOOQRWILOODOORIWKHEHGV LH WKHKXWLVERRNHGEXWQRWSHUFHQWRFFXSLHG

$GGLWLRQDOLQIRUPDWLRQDORQJZLWKDIRRWQRWHRQSDJHDQGSDJHRIWKH($KDVEHHQDGGHGWR PRUHFOHDUO\GHVFULEHKRZIUHTXHQWO\KXWVDUHERRNHG 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D 10 185 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

6$)(7<

3.1 More snow compaction and more crowds means more dangerous ski conditions. There does come a point when there are too many skiers on a trail and the skiing quality deteriorates. More winter analysis should be done on this. A smaller hut would help reduce some of these impacts. In addition, most winters Nightmare takes till December to have enough snow to allow for skiing. Please open the hut December 1st rather than November.

$WVRPHSRLQWWRRPDQ\VNLHUVRQDWUDLOZLOOGLPLQLVKWKHTXDOLW\DQGSHUKDSVLQFUHDVHWKHLQKHUHQWULVNV RIVNLLQJKRZHYHUWKHGLUHFWLQFUHDVHLQXVDJHDVVRFLDWHGZLWKWKHSURSRVHGKXWLVQRWH[SHFWHGWRKDYHD PHDVXUDEOHLPSDFWWRVDIHW\LQWKLVUHJDUGJLYHQWKHSRSXODULW\DQGIUHTXHQF\RIXVHWKDWDOUHDG\H[LVWV RQ6DOOLH%DUEHUDQGLQLWVYLFLQLW\5HIHUWRWKHUHVSRQVHWRFRPPHQW6+$KDVFRPPLWWHGWRRSHQLQJ WKHKXWIRUUHVHUYDWLRQVWKHWKLUGZHHNRI1RYHPEHU

3.2 Further hazard to the skiers who proceed from the hut is found in the practice of in between tree skiing. The Weber Gulch and its neighboring Black Gulch areas are thickly covered in many areas with deadfall trees, that have highly unpredictable extensions above and closely beneath the snow. With snowfall on their steep slopes being inherently uneven, tree skiing injuries particular to these gulches are both likely and potentially severe.

7KHUHDUHLQKHUHQWGDQJHUVDVVRFLDWHGZLWKEDFNFRXQWU\VNLLQJZKLFKDUHDVVXPHGE\DOOEDFNFRXQWU\ VNLHUV²UHJDUGOHVVRIZKHWKHUWKH\DUHKXWXVHUV$GGLWLRQDOLQIRUPDWLRQKDVEHHQDGGHGWRSDJHVDQG RIWKH($

3.3 The vicinity of the proposed hut includes much inviting skiǦterrain that is above treeline, and specifically terrain that lies south and east of the hut site and below the ridge line of Bald Mountain. This terrain is known by me, through observation over many years, to be highly prone to massive avalanche slides even with no manǦproduced triggering. One such avalanche demolished a cabin and swept its ruins two hundred yards downhill, well into treeline. The prospect of adventure Ǧhungry visitors frequenting a hut within easy skiǦ distance to these avalanche faces presents extreme hazard, over the hut's lifetime, to those skiers and snowshoers.

$YDODQFKHSURQHWHUUDLQLVDFNQRZOHGJHGLQWKH($RQSDJH6+$ZRXOGSURYLGHEDVLFLQIRUPDWLRQ RQDYDODQFKHDZDUHQHVVLQWKHKXW

75$)),& 3$5.,1*

4.1 Day skiers and snowshoers drive this road in the morning to beat the crowds on Sallie Barber and there are a few narrow spots where intersecting a car on an unǦplowed road coming the other way is scary. With 12 or more cars driving up and down this road on some days, it is critical that before this hut is built, Summit Huts gets confirmation that plowing will be completed before 9 a.m. even on days with minimal new snow. Early morning snowplowing is necessary to plow out the Hut Users parking lot so that they don’t park in the day use area. SHA must have dated parking permits displayed on hut visitor’s cars. SHA needs to address plowing and permitting not only to benefit their guests, but also in response to those folks who are now forced to leave even earlier to find the solitude they are losing due to more traffic on Sallie Barber, Bald Mountain and the backcountry skiing on Bald Mountain. 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D-11 186 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

,QIRUPDWLRQKDVEHHQDGGHGWRSDJHRIWKH($VSHFLI\LQJWKDWWKHPDMRULW\RIKXWUHODWHGWUDIILF ZRXOGJHQHUDOO\RFFXUEHWZHHQDPDQGSP7KH($GLVFORVHVWKDW³6XPPLW&RXQW\SORZV)UHQFK *XOFK5RDGXSWRWKH6DOOLH%DUEHU5RDG7UDLOKHDG0RQGD\WKURXJK)ULGD\DVZHOODVRQ6DWXUGD\VDQG 6XQGD\VLIWKH\UHFHLYHPRUHWKDQWRLQFKHVRIVQRZ´3ORZLQJJHQHUDOO\RFFXUVLQWKHPRUQLQJ WKRXJKWKH($FDQQRWFRQILUPVSHFLILFSORZLQJVFKHGXOHV

6+$ZRXOGEHUHTXLUHGWRSUHSDUHDQGVXEPLWDQDQQXDORSHUDWLRQVSODQWKDWGHILQHVKRZWKHSDUNLQJORW ZRXOGEHPDLQWDLQHGWKURXJKRXWWKHVHDVRQ5HIHUWR7DEOHIRUDGGLWLRQDOLQIRUPDWLRQ

4.2 SHA states that the average hut stay is two nights (3Ǧ20), but this is an average and many do enjoy just one night at a hut. Also, while carpooling is hopefully popular, it is not a given that SHA’s estimate of 2.8 people per car will happen and many a hut user will drive alone. The EA estimates that French Gulch Road will only see six cars per day, based on the above numbers, but twice that seems more accurate. At maximum capacity and maximum cars used, in a hut that sleeps 16Ǧ20 people, and folks are only staying for one night, and they don’t carpool, the maximum could be 32Ǧ40 cars a day. This is unlikely but a more appropriate average taken from that number would be 12Ǧ16 cars a day, which seems more realistic. Speed limit signs must be posted above Wellington neighborhood.

3DJHRIWKH($SURYLGHVDYHUDJH6+$UHODWHGYHKLFOHXVHEDVHGRQFDUSRROLQJGDWDFROOHFWHGE\ 6+$DVZHOODVUHDVRQDEOHDVVXPSWLRQV%HFDXVHWKHVHDUHDYHUDJHVRQVRPHGD\VWKHQXPEHURI6+$ UHODWHGYHKLFOHVZRXOGEHKLJKHU HJZHHNHQGVDQGKROLGD\SHULRGV ZKLOHRQRWKHUVLWZRXOGEHORZHU HJPLGZHHN ,WIXUWKHUGLVFORVHVWKDW³DORZHUSHRSOHSHUYHKLFOHUDWLRZRXOGOHDGWRPRUHKXWXVHU YHKLFOHV´

4.3 The terrain on Bald Mountain is now closed in the Travel Management Plan to winter motorized but the road is under county jurisdiction and they will decide whether or not to gate it in the winter. SHA knows from experience that without a gate on this road, there will continue to be illegal motorized travel. Bald Mountain’s backcountry ski terrain sees substantial impact from hybrid use. Many other huts are experiencing a surge of snowmobile use to access huts as close as possible which changes the atmosphere of these huts. This EA should require that this gate is approved and built on Bald Mountain Road before this project moves forward. This gate could be paid for by SHA, which would be beneficial to not only the guest experience, but also as a gesture to help reduce the added skier impacts on Bald Mountain. In the last few years snowmobile tracks have been seen in Weber gulch and this is probably unacceptable for SHA.

7KH)RUHVWVHUYLFHDFNQRZOHGJHVWKDWLOOHJDOPRWRUL]HGXVHRFFXUVRQSXEOLFODQGV+RZHYHUFXUUHQWDQG IXWXUHLOOHJDOVQRZPRELOHXVHRQ0W%DOG\5RDGKDVQRWEHHQLGHQWLILHGDVDQLVVXHE\WKH)RUHVW6HUYLFH DQG6+$UHODWHGWRWKLVSURMHFW7KHUHIRUHDJDWHRQ0W%DOG\5RDGLVEH\RQGWKHVFRSHRIWKLVSURSRVDO

4.4 Also not included, is the number of cars shuttling so that they can enjoy the Hut to Hut experience since this is the primary purpose (1Ǧ3) of the Weber Gulch location. How much more traffic will the hutǦtoǦhut experience add? The EA says: “No measurable impacts would occur at other nearby parking areas, such as the Boreas Pass Trailhead/parking area. The occasional hut user who travels from hutǦtoǦhut, such as between Section House and the proposed Weber Gulch backcountry hut, could utilize this access point; however, 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D 12 187 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

the number of users who do this would be negligible.” The HutǦtoǦHut experience is one of the few reasons mentioned in the purpose and need. If hutǦtoǦhut does become popular, than the already overcrowded Boreas Pass parking area will need a few more spots. Also, if hutǦtoǦhut skiers first stay at the Section House, and leave cars up French Gulch that means additional parking will be needed in French Gulch.

$OWKRXJKWKHLQWHUFRQQHFWHGQHVVRIKXWVLVDSDUWRI6+$¶VRYHUDOOYLVLRQKXWWRKXWWUDYHOFRPSULVHVD YHU\VPDOOSHUFHQWDJH OHVVWKDQSHUFHQW RI6+$¶VKXWXVH7KHLPSDFWVRIKXWWRKXWWUDYHORQSDUNLQJ DUHQHJOLJLEOHDQGDUHGLVFORVHGRQ($SDJH

4.5 Increased vehicular traffic on French Gulch Road from hut guests appears to be thoroughly evaluated in the EA. Recreational traffic on the west face of Bald Mountain was also discussed, although the estimated number of existing daily skiers on the west face of Bald Mountain ("one party per day") seems like a gross underestimate (p. 43 of the EA). We believe that recreational use on the west face of Bald Mountain will inevitably increase with hutǦrelated traffic, and the northǦfacing area cited as the primary skiing for hut guests will also receive additional use from hut guests. We reiterate our previous request to evaluate and improve U.S. Forest Service enforcement of the no snowmobiling policy on Bald Mountain as part of this hutǦrelated decision. A winter gate installed at Bald Mountain Road would also help with this issue.

,QIRUPDWLRQKDVEHHQDGGHGRQSDJHVDQGRIWKH($WRPRUHFOHDUO\GHVFULEHWKHVNLLQJDUHDVRQ %DOG0RXQWDLQ+RZHYHUXVHRQWKHZHVWIDFHRI%DOG0RXQWDLQSDUWLFXODUO\UHODWHGWRVQRZPRELOLQJLV EH\RQGWKHVFRSHRIWKLVDQDO\VLVDQGLVDGGUHVVHGE\WKH)RUHVW6HUYLFH¶V7UDYHO0DQDJHPHQW3ODQ 2YHUQLJKWSDUNLQJDWWKH0W%DOG\5RDG7UDLOKHDGLVLOOHJDODQGDQ\RQHWKDWVKRXOGFKRRVHWRDFFHVVWKH SURSRVHGKXWIURPWKLVORFDWLRQZRXOGQHHGWRXWLOL]HWKH6XPPLW6WDJHRUPDNHDUUDQJHPHQWVWRJHW GURSSHGRII

4.6 Two new trail segments, segments C and E, would be constructed to provide the last part of the access to the new hut. How would the prohibition on summer use of these segments be enforced?

,QIRUPDWLRQKDVEHHQDGGHGWRSDJH XQGHU³)RUHVW6XSHUYLVRU¶V&ORVXUH´ RIWKH($WRLQGLFDWHWKDW VLJQDJHSODFHGDWNH\ORFDWLRQVZRXOGFRQYH\WKDWWKHWUDLOVDUHFORVHGWRVXPPHUXVDJH7KLVLVDOVR GLVFORVHGLQ7DEOHXQGHU:LOGOLIH

4.7 Bald Mountain trail head parking.

a. you say there are 10 spaces, there are 5 spaces on good day

b. you say there are 18 to 20 spaces on road Ǧnot legal

c. you say not to be usedǦFrancis's hut, everyone uses spruce creek not the burro trail the same will happen here and they can ski out here easily.

d. since the oct 2011 a no overnight parking sign has appeared not fair the residents we need a permit ability to park there.

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D-13 188 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

5HJDUGLQJSRLQW $ WKHVWDWHPHQWZDVUHYLVHGLQWKH($WRUHDG³DSSUR[LPDWHO\WHQYHKLFOHVLQWKH VXPPHUFORVHUWRILYHLQWKHZLQWHU GHSHQGLQJRQVQRZVWRUDJH ´ % WRYHKLFOHVLVUHIHUULQJWR WKH%RUHDV3DVV3DUNLQJDUHDDQGDVVXFKLVXQGHUWKHKHDGLQJRQSDJHRIWKH($ & WKH($ VSHFLILHVWKDWWKH0W%DOG\5RDGSDUNLQJDUHDZRXOGQRWEHUHFRJQL]HGDVDSDUNLQJRSWLRQIRUKXWXVHUV SDJHRIWKH($ ' WKLVLVEH\RQGWKHVFRSHRIWKH($

4.8 A hut housing 16Ǧ20 overnight guests will generate numerous additional cars at the French Gulch/Sallie Barber trailhead, especially during peak hours when new hut users arrive and the previous night’s guests have not left yet. Consequently, the Weber hut will exacerbate parking problems in this area and further limit day access to these trails. While the EA claims that the dedicated parking lot proposed at 3Ǧ21 will include enough space for hut users to eliminate the impact to day use parking, we doubt that this will be the case. Snow buildup, late or inadequate snowplowing (due to the presence of overnight cars), trailers and other issues will limit for practical purposes the number of intended new spaces and we fear that the hut users will then take over day use parking. Day users will be the losers once again. These concerns can be addressed in two ways. First, hut users can be required to park only in the dedicated lot and can be allowed to park overnight only with a permit for the night(s) reserved that is issued by SHA and displayed on the car dashboard. This permit can easily be made part of the online reservation process and printed out by hut users. In addition, reducing the hut’s capacity will reduce the number of overnight cars and should be made a condition of Forest Service approval for this project.

6+$ZRXOGQHHGWRSUHSDUHDQ2SHUDWLRQV3ODQWRSURYLGHGHWDLOVRQZLQWHUDQGVXPPHUPDQDJHPHQWRI WKH6DOOLH%DUEHUWUDLOKHDGOHJDORYHUQLJKWSDUNLQJRSWLRQVDQGDQHIIHFWLYHVLJQDJHSODQDPRQJRWKHU DSSURSULDWHLVVXHV2YHUQLJKWSDUNLQJSHUPLWVIRU6+$¶VJXHVWVZRXOGOLNHO\EHDEDVLFFRPSRQHQWRIWKH ZLQWHUSDUNLQJORWPDQDJHPHQW$OOSDUNLQJWUDIILFLPSDFWVKDYHEHHQGLVFORVHGLQWKH($

4.9 Trailhead design and management continues to be an issue of concern for the Town Council and BOSAC with regard to this Weber Gulch Hut proposal. As described in the EA, the proposal now limits hut reservations to winter months only. This change leads to the obvious question of how the proposed expanded parking area would be managed during summer months and whether that use supports the goals and objectives of the area land management agencies. We seek additional clarity regarding the longǦterm management of the parking area in Lincoln. First, if approved and constructed, we strongly recommend that overnight parking in the proposed new parking area be limited to hut guests, Mountain Meadows subdivision homeowners, and other permitted guests. Based on previous management challenges, we do not support a deǦfacto car camping area at the head of one of the most popular trailhead accesses in the region. Further, winter plowing schedules, gated parking lot entries, appropriate signage, and parking restrictions should be further clarified with regard to the proposed winterǦonly trailhead. We believe that SHA should enter into a formal agreement with the USFS, County and Town that clearly articulates the management of the trailhead, the new trail facilities, an effective signage plan, etc. This operations plan should be agreed to by all affected parties and should explicitly describe the long term management goals of the area. The vision outlined in the Golden Horseshoe Management Plan is a logical starting point for these discussions and any decisions related to trailhead management. Town representatives would like to participate in any discussions or decisions related to the summertime use of the proposed parking area.

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D 14 189 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

7KH)RUHVW6HUYLFHVKDUHVWKH7RZQ&RXQFLO¶VDQG%26$&¶FRQFHUQVDQGZRXOGUHTXLUH6+$WRSUHSDUH DQDQQXDORSHUDWLQJSODQWRSURYLGHGHWDLOVRQZLQWHUDQGVXPPHUPDQDJHPHQWRIWKH6DOOLH%DUEHU WUDLOKHDGWKHQHZWUDLOOHJDORYHUQLJKWSDUNLQJRSWLRQVDQGDQHIIHFWLYHVLJQDJHSODQDPRQJRWKHU DSSURSULDWHLVVXHV$OOSDUNLQJWUDIILFLPSDFWVKDYHEHHQGLVFORVHGLQWKH($7DEOHSURYLGHVPRUH LQIRUPDWLRQRQWKHDQQXDORSHUDWLRQVSODQ

4.10 The EA states that Bald Mountain Road Parking Area, “has the capacity for approximately ten vehicles and also prohibits overnight parking. (3Ǧ19) This might be true for summer, but in winter this area only allows for at the most, five vehicles. This parking lot will see some illegal overnight parking to the hut, because it is an easier route to the hut. SHA needs to educate hut visitors about not parking here and also monitor, enforce and sign this parking area as closed to overnight vehicles to prevent this from happening. “Some parking would occur by administrative vehicles, but this use would be relatively infrequent and generally only require one vehicle.” (3Ǧ21) Given how few parking spaces there are on Bald Mountain Road and how popular this area is for day use, and that SHA is requiring a huge new parking area on French Gulch, this is unacceptable that SHA uses this parking facility for administrative vehicles. Hutmasters also should be monitoring and witnessing the impacts in the French Creek parking area as well as their approach route to the Weber Hut.

7KHWH[WRQSDJHRIWKH($ZDVUHYLVHGWRUHDG³DSSUR[LPDWHO\WHQYHKLFOHVGXULQJWKHVXPPHU FORVHUWRILYHLQWKHZLQWHU´WRPRUHDFFXUDWHO\GHVFULEHWKHSDUNLQJFDSDFLW\\HDUURXQG

2YHUQLJKWSDUNLQJDW%DOG0RXQWDLQWUDLOKHDGLVQRWSURSRVHGQRULVLWOHJDO SDJHRIWKH($ WKH UHJLVWUDWLRQLQIRUPDWLRQWKDWDOO6+$JXHVWVUHFHLYHXSRQPDNLQJDUHVHUYDWLRQZRXOGPDNHWKLVFOHDU )XUWKHUPRUHVLJQVDWWKH0W%DOG\5RDGWUDLOKHDGZDUQWKDWRYHUQLJKWSDUNLQJLVSURKLELWHGDQGWKDW YHKLFOHVOHIWWKHUHZLOOEHWRZHG7KHUHIRUHDQ\6+$JXHVWVWKDWFKRRVHWRLJQRUHWKHLQIRUPDWLRQ SURYLGHGE\6+$DQGWKHVLJQVDWWKHWUDLOKHDGZRXOGGRVRZLWKIXOONQRZOHGJHWKDWWKHLUYHKLFOHZRXOG OLNHO\EHWRZHGE\WKHWLPHWKH\UHWXUQ

4.11 While the EA concludes there will be minimal impact based upon its estimate of 6-8 additional cars for hut users, we believe this is a gross underestimation of the additional traffic and congestion which will result from the construction of the 19-space parking area.

7KHSURSRVHGSDUNLQJORWKDVEHHQVL]HGWRDFFRPPRGDWHRYHUODSVLQDUULYLQJDQGGHSDUWLQJKXWJXHVWV $VLQFOXGHGRQSDJHRIWKH($6+$GDWDIRU)UDQFLH¶V-DQHW¶VDQG6HFWLRQ+RXVHLQGLFDWHWKDW DYHUDJHKXWXVHUVW\SLFDOO\FDUSRROZLWKDSSUR[LPDWHO\SHRSOHSHUYHKLFOH

$WSHRSOHSHUYHKLFOHDVLQJOHQLJKWDWSHUFHQWRFFXSDQF\ SHRSOH ZRXOGHTXDWHWRVL[ YHKLFOHVDWWULEXWDEOHWR:HEHU*XOFKEDFNFRXQWU\KXWXVHUV $ORZHUSHRSOHSHUYHKLFOHUDWLRZRXOGOHDG WRPRUHKXWXVHUYHKLFOHV ,WLVUHDVRQDEOHWRDVVXPHWKDWEHWZHHQVL[DQGHLJKWYHKLFOHVFRXOGEH DWWULEXWDEOHWR:HEHU*XOFKEDFNFRXQWU\KXWXVHUVRQDQ\JLYHQQLJKWZLWKSHUFHQWRFFXSDQF\ )DFWRULQJLQWKHRYHUODSEHWZHHQDUULYLQJDQGGHSDUWLQJKXWXVHUVGDLO\KXWUHODWHGWUDIILFRQ)UHQFK *XOFK5RDGFRXOGEHUDQJHEHWZHHQDQGYHKLFOHV WRYHKLFOHVERWKHDVWERXQGDQGZHVWERXQG

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D-15 190 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

4.12 The lack of parking at the trailhead is the only factor which has limited adverse impacts to the surrounding environment and wildlife. The opening of a new 19-space parking area will only serve to attract more recreational users who will now have more available parking irrespective of hut users. The EA recognizes this and asserts that the parking area is only needed during winter months and thus will accommodate overflow parking during other seasons. EA at 3-21. However, the EA did not assess the impact of the new parking area in terms of how much it would encourage year-round automobile traffic to the area and the resulting impacts on federal lands and native plants and species.

7KHSURSRVHGVSDFHSDUNLQJORWZRXOGEHIRURYHUQLJKWXVHUVRQO\'D\XVHUHFUHDWLRQLVWVWRWKHDUHD ZRXOGEHSURKLELWHGIURPSDUNLQJLQLW,WLVOLNHO\WRDWWUDFWDGGLWLRQDOUHFUHDWLRQLVWVWRWKHDUHDDOORI ZKRPZRXOGEHVWD\LQJDWWKHKXW7KHUHIRUHWKH($RQO\DGGUHVVHVWKHLPSDFWVRIWKHDGGLWLRQDOKXW UHODWHGWUDIILFRQ)UHQFK*XOFK5RDG

1RWHWKDWWKH($KDVEHHQUHYLVHGWRLQGLFDWHWKDWWKH6+$SDUNLQJDUHDZRXOGEHFORVHGGXULQJWKH VXPPHU

4.13 We question whether there will actually be parking available to the hut users when they would arrive to utilize the proposed hut. Likely, the parking lot will fill up and hut users will find no parking or will end up parked in a manner similar to the vehicles depicted in Exhibit 3, attached.

7KHSURSRVHGSDUNLQJORWZRXOGRQO\EHRSHQWR6+$¶VJXHVWVDQGWKHRFFDVLRQDOQRQKXWRYHUQLJKW JXHVW²HDFKRIZKRPZRXOGQHHGWRUHFHLYHDSDUNLQJYDOLGDWLRQIURP6+$$VDFRQGLWLRQRIDQ\ DSSURYDO6+$ZRXOGEHUHTXLUHGWRSUHSDUHDQDQQXDORSHUDWLRQVSODQWKDWGHWDLOVDPRQJRWKHUWKLQJV KRZWKHSDUNLQJORWZRXOGEHPDLQWDLQHGIRUKXWXVHUVRQO\GXULQJWKHZLQWHU

4.14 To our knowledge, there is currently no monitoring of the trailhead parking (as can readily be seen on any weekend as depicted in Exhibit 3) and it will be up to Summit Huts to monitor and enforce the parking situation. Again, however, we are aware of no plan or dedicated resources to do so. Without such a plan and dedicated resources, it would be irresponsible to issue final findings or a decision on the EA for this project.

$VDFRQGLWLRQRIDQ\683DSSURYDO6+$ZRXOGEHUHTXLUHGWRSUHSDUHDQDQQXDORSHUDWLRQVSODQWKDW GHWDLOVDPRQJRWKHUWKLQJVKRZWKHSDUNLQJORWZRXOGEHPDLQWDLQHGIRUKXWXVHUVRQO\GXULQJWKHZLQWHU 7KHUHDGHULVGLUHFWHGWR7DEOHRIWKH($IRUPRUHLQIRUPDWLRQ

4.15 We respectfully request that the proposed parking area be carefully reexamined for relocation on the east side of Humbug road and that a more careful plan for operation and monitoring of the parking area be delineated before this project goes further

0XOWLSOHRSWLRQVZHUHFRQVLGHUHGIRUORFDWLQJWKHSURSRVHGSDUNLQJORW²LQFOXGLQJERWKWRWKHHDVWDQG ZHVWRI+XPEXJ5RDG$QRYHUDUFKLQJJRDOIRUERWKWKH)RUHVW6HUYLFHDQG6+$ZDVWRPLQLPL]H JURXQGDQGYHJHWDWLRQLPSDFWV8OWLPDWHO\WKHUHZHUHVHYHUDOIDFWRUVWKDWFRQWULEXWHGWRWKHFKRLFHWR ORFDWHWKHSDUNLQJZHVWRI+XPEXJ5RDG

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D 16 191 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

)LUVWWKHWRSRJUDSK\LVJHQWOHUWRWKHZHVWVLGHRI+XPEXJ5RDG6HFRQGWKHUHLVDSODWIRUPRQWKHVRXWK VLGHRI)UHQFK*XOFK5RDGWKDWSURYLGHVWKHQHFHVVDU\ODUJHWXUQLQJUDGLXVWRDFFRPPRGDWHDODUJHU YHKLFOHOLNHDVQRZSORZWXUQLQJDURXQGIRUPDLQWDLQLQJWKHORW)LQDOO\WKHZHVWHUQFKRLFHUHTXLUHVOHVV URDGOHQJWKQHFHVVDU\WREHSORZHGLQWKHZLQWHU

9(*(7$7,21

5.1 DESIGN FEATURES FOR FIGHTING NOXIOUS WEEDS ARE INADEQUATE. Page 2Ǧ 11 lists 6 design features for addressing noxious weeds. All of them are measures to see that equipment does not introduce or spread weeds. All are appropriate and desirable, but they are insufficient. There must also be surveys for weeds on and along areas where ground would be disturbed. This would include the construction area for trail segments C and E, widening of segment D, and hut site itself. Any weeds found must be eradicated. FollowǦup surveys must also be done for at least two full growing seasons after completion of construction. Since summer maintenance trips involve motor vehicles which could introduce or spread weeds, they should also be inspected, and cleaned if necessary, prior to use for access to and maintenance of the hut.

$SURMHFWGHVLJQIHDWXUHKDVEHHQDGGHGWR&KDSWHUZKLFKVWDWHV%HIRUHLPSOHPHQWLQJDQ\DSSURYHG JURXQGGLVWXUELQJDFWLYLWLHVFRRUGLQDWHZLWKWKH)RUHVW6HUYLFH'LVWULFW:HHG&RRUGLQDWRUWRGHWHUPLQHLI VXUYH\VZRXOGEHQHHGHGZLWKLQSURMHFWDUHDVWRGRFXPHQWWKHSUHVHQFHRIDQ\SUHH[LVWLQJZHHG LQIHVWDWLRQV7UHDWLQIHVWDWLRQVSULRUWRJURXQGGLVWXUELQJDFWLYLWLHVDQGUHPRYHDOOZHHGVHHGDQG SURSDJXOHVWRSUHYHQWVSUHDG

9,68$/6

6.1 County staff has inspected the proposed site of the hut and the surrounding area. The proposed hut site appears well screened and at least one mile distant from the closest public viewpoints which provides for some level of visual impact attenuation. However, significant visual impacts could result if the design of the structure is not appropriate for the site, inappropriate exterior materials are used, or adequate care is not given to the siting of the photoǦvoltaic array that will provide power to the site. As such, the Board recommends that the specific architectural/site design be consistent with the Forest Service 's Scenic Integrity Objectives (SIO) protocol and that the proposed design and location of the hut as well the associated photoǦvoltaic array meets the objectives of a Moderate level SIO at a minimum.

7KHGHVLJQRIWKHSURSRVHGKXWZRXOGIROORZ)RUHVW6HUYLFH%(,*DQG6,2JXLGHOLQHVDVLQGLFDWHGLQ &KDSWHU6HFWLRQ& 6FHQHU\ RIWKH($7KH%(,*DGGUHVVHVVLWHGHYHORSPHQWVXVWDLQDELOLW\DQG DUFKLWHFWXUDOFKDUDFWHU

:,/'/,)( $48$7,&63(&,(6

7.1 Measures to protect any nests of boreal owl, oliveǦsided flycatcher, and marten need to be strengthened. The current wording says that impacts “could be avoided by conducting tree removal in potential [nesting or denning] habitat outside of [the nesting or denning period]”. EA at 2Ǧ9, emphasis added. “Could” must be changed to “shall”. This is especially

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D-17 192 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

important for marten, whose tracks were found frequently in surveys in the areas “along all proposed access routes to the hut”. EA at 3Ǧ49.

,Q7DEOH 0DQDJHPHQW5HTXLUHPHQWVDQG3URMHFW'HVLJQ)HDWXUHV:LOGOLIH DOOKDYHEHHQFKDQJHG WR³ZLOO´RU³VKDOO´

7.2 Another concern is how late Elk will use this area, since often there are signs of Elk at higher elevations up to early December and this could be another reason to consider opening the Hut December 1st rather than November 1st. Pine Martens have just recently been seen frequently up French Gulch and this is mentioned to have it on record.

,PSDFWVWRHONSLQHPDUWHQDQGRWKHUVSHFLHVKDYHEHHQGLVFORVHGLQWKH($DQGVXSSRUWLQJELRORJLFDO GRFXPHQWDWLRQ

7.3 Please make sure the wildlife biologists are aware that this hut will definitely mean many more folks in the lower part of Weber Gulch and how do they propose to enforce this closure? If the wildlife biologists decide to eliminate this closure, please then think hard about supporting a smaller hut alternative, since a 50 percent reduction in the number of humans in the Lower Weber Gulch is a great way to mitigate the conflicts with wildlife.

5HIHUWR&KDSWHU6HFWLRQ( :LOGOLIH IRUDQHYDOXDWLRQRIH[LVWLQJFRQGLWLRQVDQGHQYLURQPHQWDO FRQVHTXHQFHVWRZLOGOLIHIURPWKHSURSRVHGSURMHFWV,QIRUPDWLRQZLOOEHSUHVHQWHGDWWKHKXWWR GLVFRXUDJHWUDYHOEHORZWKHKXW*LYHQWKHGHQVHYHJHWDWLRQDQGVWHHSWHUUDLQEHORZWKHKXWWKHSRWHQWLDO IRUSHRSOHGHVFHQGLQJWKURXJKWKLVWHUUDLQLVFRQVLGHUHGORZ7DEOHVSHFLILHV0DQDJHPHQW 5HTXLUHPHQWVDQG3URMHFW'HVLJQ)HDWXUHVWKDWKDYHEHHQLQFOXGHGWRDYRLGRUPLQLPL]HLPSDFWVWR ZLOGOLIHLPSDFWV

7.4 Constructing the access trail to the proposed hut would fragment or destroy effective winter foraging and denning habitat. Access to and use of the proposed hut (i. e., skiing and snowshoeing near it) would increase snow compaction. This would decrease lynx’ advantage in deep snow over other predators which compete with lynx for prey, especially snowshoe hare. Operation of the hut (a permanent development), i. e., increased human use and some motorized use for maintenance in winter, would disrupt lynx use of the surrounding habitat and in a corridor, a very important area of movement for lynx in Summit County.

3URSRVHGYHJHWDWLRQUHPRYDOLQFUHDVHGVQRZFRPSDFWLRQDQGLQFUHDVHGKXPDQXVHKDVEHHQDGHTXDWHO\ DGGUHVVHGLQWKH%LRORJLFDO$VVHVVPHQW %$ $VGLVFXVVHGLQWKH%$ SDJH ZLWKUHVSHFWWRO\Q[WKH UHODWLYHO\VPDOODQGEHQLJQDGGLWLYHLPSDFWVDVVRFLDWHGZLWKWKHSURSRVHG:HEHU*XOFK+XWRQO\Q[ IRUDJLQJVKHOWHULQJEUHHGLQJDQGGLVSHUVDOZRXOGPHHWWKHGHILQLWLRQVRI³LQVLJQLILFDQW´DQG ³GLVFRXQWDEOH´7KHUHIRUHWKH3URSRVHG$FWLRQZDUUDQWVD³PD\DIIHFWQRWOLNHO\WRDGYHUVHO\DIIHFW´ GHWHUPLQDWLRQIRU&DQDGDO\Q[7KH:HEHU*XOFK+XWSURMHFWPHHWVDOOFULWHULDIRUSURJUDPPDWLF FRQFXUUHQFHXQGHUWKH&RORUDGR/\Q[3URMHFW'HFLVLRQ6FUHHQV&RQVXOWDWLRQIRU&DQDGDO\Q[LV FRQVLGHUHGFRPSOHWHIRUWKLVSURSRVHGSURMHFW,QIRUPDWLRQZDVDGGHGWRSDJHRIWKH($WRFODULI\WKDW VQRZPRELOHXVDJHZRXOGRQO\EHLQWKHFDVHRIH[WUHPHVLWXDWLRQVRUHPHUJHQFLHV6+$GRHVQRWRZQD VQRZPRELOHDQGGRHVQRWDQWLFLSDWHXVLQJRQHIRUUHJXODUPDLQWHQDQFHRURSHUDWLRQV

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D 18 193 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

7.5 The hut would adversely affect a patch of land that likely functions as diurnal security for lynx. Reudiger et al, 2000, state that such areas should be protected: Where such diurnal security sites exist, they should be protected from actions or activities that would destroy or compromise their functional value. Reudiger, id., at 83 The location of the proposed hut contradicts the recommendation in Roberts et al 2012 to “[d]irect activities outside of the [Southern Summit County] lynx conservation corridor…”. Id. at 8. There is a further recommendation for recreation to “[i]dentify opportunities to reduce human use inside of biologically important areas for lynx”. The important areas include the conservation corridor. Id. at 9. Finally, recreation should “avoid new use and developments in lightly dissected areas”. Ibid. While the Sallie Barber Road is already wellǦused in winter, the hut site and the area along the new road that would be constructed get little or no use. See EA at 3Ǧ68.

7KHSURMHFWDUHDLVDPRYHPHQWFRUULGRULQWKHVXPPHUWLPHWKHSURSRVDOGRHVQRWLQFOXGHVXPPHUXVHVR O\Q[XVDJHRIWKHFRUULGRUZRXOGEHPDLQWDLQHG7KH0D\FORVLQJGDWHDYRLGVLPSDFWVWRGHQQLQJVHDVRQ DQGGLVSHUVDO SDJHRIWKH%$ )XUWKHUPRUHWKHUHLVQRHYLGHQFHRIUHVLGHQWO\Q[XWLOL]LQJWKH:HEHU *XOFKDUHD7KLVLVGRFXPHQWHGLQWKH($DQGVXSSRUWLQJELRORJLFDOGRFXPHQWDWLRQZKDWZDVSUHSDUHG IRUWKLV1(3$SURFHVV

7.6 The EA even admits that “it would be best for lynx if a hut was not put in this corridor”. Id. at 3Ǧ55. The adverse effects to lynx are multiplied if hut users also go or come from two of the other SMA huts Ǧ Section House and Ken’s Cabin Ǧ in one trip. This is not addressed in the EA. Hut proponents may argue, as the EA does (see id. at 3Ǧ55, 3Ǧ56) that the construction and operation of the hut would be only a very minor intrusion into lynx habitat and the adverse impacts would be minimal. That is no excuse for approval of the hut. The effects of many, many individual projects and activities in southern Summit County have combined over the years to put lynx in the precarious position it is now in. The proposed hut would add to this permanent impact, and there are likely to be future projects and activities that will continue destroy and degrade lynx habitat in the future. In spite of the impact on lynx, some of these will not be prohibited because they are on private land or they are considered necessary for public safety, such as home constructions, widening of highways and other roads, and removal of dead trees. The proposed hut, on the other hand, is totally discretionary. It can be halted and it should be.

,PSDFWVWRO\Q[DUHGLVFORVHGLQWKH%$7KH%$DQG($DOVRDGGUHVVFXPXODWLYHLPSDFWVWRO\Q[ DFFRUGLQJWR1(3$DQG(6$UHVSHFWLYHO\:KHQKXWWRKXWWUDYHOGRHVRFFXUPXFKRILWZRXOGEHDERYH WUHHOLQH DQGDOORILWRQVQRZ ZKLFKZRXOGQRWLPSDFWO\Q[GLVSHUVDOZKRWUDYHOGXULQJWKHVXPPHU ZLWKLQWKHIRUHVWFDQRS\

7.7 The proposed closures would have limited, if any, mitigative value in protecting lynx. Closing the area just north of the hut to prevent users from skiing directly down to the Sallie Barber Road, and educating users about the need to conserve an intact block of good lynx habitat (EA at 2Ǧ3) are good measures and should be made conditions of approval of the hut if it is approved. (We still believe it should not be approved.) However, we wonder how well this could be enforced. It would require very frequent law enforcement presence every weekend and some weekdays for some time after the hut opened and at some times thereafter. The presence of a hut would encourage people to ski this route, whereas now, most of the people that might stay at the hut probably do not even know it exists. Even successful closure would not mitigate additional snow compaction caused by access to the 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D-19 194 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

hut. Under a project design feature, a section of the Great Flume Trail would be closed to winter use to “offset… snow compaction” from the new hut. EA at 2Ǧ9. How would this trail be closed? If the trail still physically exists and has sufficient snow on it, it will get used, if there is any desire to use it.

7DEOHVSHFLILHV0DQDJHPHQW5HTXLUHPHQWVDQG3URMHFW'HVLJQ)HDWXUHVWKDWKDYHEHHQLQFOXGHGWR DYRLGRUPLQLPL]HLPSDFWVWRZLOGOLIHLPSDFWV)XUWKHUPRUHWKHTXDOLW\RIWHUUDLQEHORZWKHSURSRVHGKXW LHVWHHSWHUUDLQZLWKWLJKWWUHHV LVQRWFRQVLGHUHGGHVLUDEOHIRUKXWXVHUV

7KH($KDVEHHQUHYLVHGWRFODULI\WKDWWKH*UHDW)OXPH7UDLOZRXOGQRWEHFORVHGEXWUHPRYHGIURPWKH VQRZFRPSDFWLRQPDSVHHUHVSRQVHWRFRPPHQW

7.8 Currently, there is some confusion on the part of the Board regarding the potential impact of compacted snow on the Canada lynx. We note that this issue does not appear to be addressed in the EA but we are under the impression that snow compaction may limit the County's ability to develop additional trails in the Golden Horseshoe area pursuant to the Golden Horseshoe Management Plan due to the potential cumulative impacts of such trail development on lynx habitat. As such, the Board requests that this issue be more thoroughly addressed in the EA.

$VGLVFXVVHGLQWKHUHVSRQVHWR&RPPHQWWKHUHLVQRSURSRVDOWRFORVHWKH*UHDW)OXPH7UDLOLQ HVVHQFHWKLVLVDQ³DFFRXQWLQJH[HUFLVH´IRUWKH)RUHVW6HUYLFHLQUHODWLRQWRLWVPRQLWRULQJRIVQRZ FRPSDFWHGURXWHV7DEOHRIWKH($ SDJH KDVEHHQXSGDWHGWRFODULI\WKLVVWDWHPHQWDQGWRPDNH LWFOHDUWKDWWKH*UHDW)OXPH7UDLOLVQRWEHLQJFORVHG

,QVXPPDU\WKH*UHDW)OXPH7UDLOLVVKRZQDVD³VQRZFRPSDFWHGURXWH´RQWKH:51)%DVHOLQH 6QRZ&RPSDFWLRQ0DS*URXQGYHULILFDWLRQDQGGRFXPHQWDWLRQVKRZVWKDWWKLVURXWHZKLFKLVPLOHV ORQJGRHVQRWUHFHLYHUHJXODUXVHGXULQJZLQWHUPRQWKVWKDWFDXVHVQRZFRPSDFWLRQ7KHUHIRUHWKLVURXWH ZLOOEHUHPRYHGIURPWKH%DVHOLQH6QRZ&RPSDFWLRQ0DS7KHSURSRVHGDFWLRQZRXOGQRWH[SDQG VQRZFRPSDFWHGURXWHVEH\RQGZKDWWKH%DVHOLQH6QRZ&RPSDFWLRQ0DSVKRZV´

7.9 Use of the hut could affect ptarmigan, which winter in willow patches. These birds need large and relatively undisturbed landscapes. See more detail in our scoping comments of November 18, 2011 at pp. 3Ǧ4. Alpine areas have not been surveyed in winter (EA at 3Ǧ45), but should be. Willow patches and any other areas that ptarmigan might use in winter should be mapped, and hut users should be directed to avoid those areas. This information should be given to hut users when they reserve one or more nights at the hut, and it should also appear in the hut itself. It can be done as part of the education that would be done under wildlife design criterion 10 – educating users about the need to have an intact block of high quality lynx habitat below the hut (toward the Sallie Barber Road).

7KH($VWDWHVRQSDJH³,WLVXQOLNHO\WKDWSWDUPLJDQZLQWHULQDQWLFLSDWHGDOSLQHXVHDUHDVDERYHWKH SURSRVHGKXWEHFDXVHWKHDUHDVWKDWZRXOGEHVNLHGGRQRWVXSSRUWZLOORZVDQGWKH\DUHVQRZGHSRVLWLRQ DUHDVWKDWSWDUPLJDQDFWXDOO\DYRLGDVIRUDJLQJKDELWDWLQZLQWHU+RZHYHULIVRPHPDOHSWDUPLJDQRFFXU LQRUDURXQGWKHVNLSOD\DUHDWKH\PD\EHRFFDVLRQDOO\GLVSODFHGE\VNLLQJDFWLYLW\EXWWKH\VKRXOG

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D 20 195 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

FRQWLQXHWRXVHVXFKDFWLYLW\DUHDVDVWKH\GRDW%UHFNHQULGJH6NL5HVRUWDQG&RSSHU0RXQWDLQ5HVRUW ERWKVNLDUHDV´

7.10 The dispersing distance analyzed for boreal toad is 1.5 miles, even though females are said to disperse up to 2.5 miles. EA at 3Ǧ33, 3Ǧ34. Surveys done in French Creek in 2011 found no boreal toads. EA at 3Ǧ44. However, adult boreal toads have been observed spending up to 90 percent of their time in upland terrestrial areas. Keinath and McGee, 2005. Areas surrounding French Gulch and other areas where boreal toads might breed should be surveyed.

%RUHDOWRDGVXUYH\VWKDWZHUHFRQGXFWHGLQ)UHQFK&UHHNE\86)6ELRORJLVWV ZHUHDGHTXDWHIRU WKLVDQDO\VLV1RRFFXSLHGKDELWDWZDVIRXQG$GGLWLRQDOVXUYH\VDUHVFKHGXOHGIRUWKHILHOGVHDVRQ DQGLIWRDGVDUHGLVFRYHUHGQHZGHVLJQFULWHULDZRXOGEHDSSOLHGWRWKHSURSRVHGDFWLRQ

7.11 The proposed hut location and associated trails, located on the northern aspect of Bald Mountain, fall within the highest priority area of continuously forested habitat in the Lynx Conservation Corridor defined by Roberts et al (2012), as stated in the EA (p. 3Ǧ39). This important landscape linkage, containing the proposed hut site, has been identified as high quality summer and winter habitat for lynx. Such intact forested areas free of human development within Summit County are very limited, and provide travel corridors and security from intensive recreation and other human disturbances. The cumulative effects of habitat loss, fragmentation, and increased winter recreation as a result of the proposed hut may have a negative impact on lynx by degrading habitat, altering movement and behavior, and dispersing prey out of the area.

3URSRVHGYHJHWDWLRQUHPRYDOLQFUHDVHGVQRZFRPSDFWLRQDQGLQFUHDVHGKXPDQXVHKDVEHHQDGHTXDWHO\ DGGUHVVHGLQWKH%$LQDGGLWLRQWRFXPXODWLYHHIIHFWV$VGLVFXVVHGLQWKH%$ SDJH ZLWKUHVSHFWWR O\Q[WKHUHODWLYHO\VPDOODQGEHQLJQDGGLWLYHLPSDFWVDVVRFLDWHGZLWKWKHSURSRVHG:HEHU*XOFK+XWRQ O\Q[IRUDJLQJVKHOWHULQJEUHHGLQJDQGGLVSHUVDOZRXOGPHHWWKHGHILQLWLRQVRI³LQVLJQLILFDQW´DQG ³GLVFRXQWDEOH´7KHUHIRUHWKH3URSRVHG$FWLRQZDUUDQWVD³PD\DIIHFWQRWOLNHO\WRDGYHUVHO\DIIHFW´ GHWHUPLQDWLRQIRU&DQDGDO\Q[7KH:HEHU*XOFK+XWSURMHFWPHHWVDOOFULWHULDIRUSURJUDPPDWLF FRQFXUUHQFHXQGHUWKH&RORUDGR/\Q[3URMHFW'HFLVLRQ6FUHHQV&RQVXOWDWLRQIRU&DQDGDO\Q[LV FRQVLGHUHGFRPSOHWHIRUWKLVSURSRVHGSURMHFW,QIRUPDWLRQZDVDGGHGWRSDJHRIWKH($WRFODULI\WKDW VQRZPRELOHXVDJHZRXOGRQO\EHLQWKHFDVHRIH[WUHPHVLWXDWLRQVRUHPHUJHQFLHV6+$GRHVQRWRZQD VQRZPRELOHDQGGRHVQRWDQWLFLSDWHXVLQJRQHIRUUHJXODUPDLQWHQDQFHRURSHUDWLRQV

7.12 The proposed hut location and associated trails also fall within elk and deer summer ranges and movement corridors. Limiting seasonal use of the hut and associated trail section "E" to midǦNovember through May, as proposed in Alternative 2, would lessen potential negative effects on elk and deer reproduction in the spring and early summer. A closing date for winter use was not specified in the EA, and CPW recommends amending Alternative 2 to include an annual closure of the hut and trail section "E" to recreational use prior to May 15 to minimize impacts to elk and deer during calving and fawning periods.

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D-21 196 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

7KH$SULOFORVLQJGDWHLVVXIILFLHQWWRDYRLGLPSDFWVWRHONFDOYLQJDQGGHHUIDZQLQJLQHDUO\-XQH UHJDUGOHVVRIFORVLQJGDWHWKHFRQGLWLRQVWKDWDUHUHTXLUHGIRUZLQWHUKXWXVH VQRZFRYHU DUHH[DFWO\WKH RSSRVLWHRIWKHFRQGLWLRQVQHHGHGIRUFDOYLQJDQGIDZQLQJ QRVQRZ PDNLQJWKHWZRPXWXDOO\H[FOXVLYH

7.13 However, due to the increased parking availability at the Sallie Barber Trailhead included in Alternative 2, increased recreational use of the lower trails will likely occur during the spring, summer and fall months despite summer closure of the hut. CPW is concerned that if the hut is constructed, there will be pressure for the Dillon Ranger District to eventually open the hut to yearǦround use. Such use will have negative effects on elk and deer reproduction and will likely disperse animals out of their historical summer habitat. In addition, people often recreate with dogs off leash on public lands, and dogs can harass, chase, injure and kill wildlife. Dogs can significantly impact elk and deer during calving and fawning periods. As stated under Alternative 2, construction and maintenance of the hut and trails would have additive effects "to the reduced availability of effective summer range that is becoming an issue in Summit County herds because of habitat fragmentation and the encroachment of human activities into elk habitat" (p.3Ǧ62).

6XPPHUXVHRIWKHKXWLVQRWDFRPSRQHQWRIWKH3URSRVHG$FWLRQ6KRXOG6+$HYHUZLVKWRRSHQWKHKXW IRUVXPPHUXVHLWZRXOGQHHGWRVXEPLWDSURSRVDOWRWKH:51)DQGVKRXOGWKDWSURSRVDOEHDFFHSWHG VLWHVSHFLILF1(3$DQDO\VLVDQGDSSURYDOZRXOGEHQHFHVVDU\

7.14 Under Alternative 2, approximately 15 ATV trips per summer will be made to the hut for maintenance purposes during the late summer and early fall. These maintenance trips may overlap with the early hunting seasons, and CPW is concerned that motorized ATV use on the trails during the hunting seasons may disperse elk and deer out of the area and make them less accessible to hunters, who will be accessing the area on foot. CPW recommends amending Alternative 2 to limit the maintenance ATV trips to time periods outside of the designated hunting seasons to avoid dispersing game animals out of the area. The archery hunting season varies year to year but typically begins the last weekend of August and ends the last weekend of September. Rifle hunting season typically begins the second weekend in October but may also vary year to year.

6HHDGGLWLRQWRSDJHRIWKH($WKDWVWDWHVWKDW³6+$DQGWKH)RUHVW6HUYLFHZLOOHQVXUHWKDW PDLQWHQDQFHWULSVLQYROYLQJWKHXVHRI$79VDUHFRQGXFWHGRXWVLGHRIWKHKXQWLQJVHDVRQHDFK\HDU´

7.15 Page 3Ǧ62 states that there could be 15 summer and early fall trips to the hut for maintenance. But page 3Ǧ12 puts the number of summer trips at only 5. This is important because of the possible effect on elk and other wildlife. The EA states that summer elk habitat is becoming increasingly fragmented and becoming less effective with increased human encroachment. Id. at 3Ǧ51, 3Ǧ62.

7KHFRUUHFWQXPEHULVWULSVEHWZHHQVXPPHUDQGIDOO DSSUR[LPDWHO\WULSVIRUURXWLQHFKHFNXSVWR PDNHVXUHKXWLVVHFXUHEHWZHHQODWH-XQHDQGWKHHQGRI$XJXVWDQGDSSUR[LPDWHO\WULSVEHWZHHQ 6HSWHPEHUWRODWH2FWREHUWRGHOLYHUILUHZRRGSURSDQHDQGJHQHUDOVXSSOLHV 7KLVSRLQWZDVFRUUHFWHG RQSDJHRIWKH($

7.16 In any case, closing this trail to winter use would not offset new snow compaction from the proposed hut. When surveyed over five different days during 2009, 2010, and 2011, “there

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D 22 197 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

were no visible tracks anywhere near the Great Flume trail and, as far as the USFS can tell, it doesn’t receive any winter use”. BA at 35. Due to the need to go up a south facing slope (Humbug Hill) to access this trail, it would not be expected to get much winter use. Thus closing it would not offset snow compaction from any use elsewhere, certainly not the increased use that would likely occur with the new hut in operation. The BA (p. 48) admits that there would be an increase in snow compaction from use of the proposed new hut. The Great Flume Trail is in an area that has been heavily mined. There are many roads, tailings piles, and other cleared areas nearby. Any lynx habitat protected by closing this trail to winter use would not be equal to that lost by constructing the new hut and the route to it.

6HHUHVSRQVHWRFRPPHQWUHJDUGLQJWKHUHPRYDORIWKH*UHDW)OXPH7UDLOIURPWKHVQRZFRPSDFWLRQ PDS

)25(676(59,&(32/,&<0$1$*(0(17

8.1 CDLT's concern is that summer users will seek a direct route down Weber Creek from the hut to Sallie Barber Road to save considerable hiking distance. Despite the steepness of the hillside, density of the forest, and considerable down timber, people will still want to try it. Additionally, there is a sensitive historic site along Weber Creek just above Sallie Barber Road. Impacts from attempts to create such a social trail will likely be damaging to the environment and the historical resources. Any decision approving the Weber Gulch hut needs to include a prohibition against creating social trails and/or alternative summer routes to access the hut.

7KHKXWLVQRWSURSRVHGIRUVXPPHUXVHDQGDVDFRPSRQHQWRIWKH3URSRVHG$FWLRQ7UDLO6HJPHQW( ZRXOGEHFORVHGWRVXPPHUXVHYLDD)RUHVW6XSHUYLVRU¶VFORVXUH$GGLWLRQDOLQIRUPDWLRQKDVEHHQDGGHG WRSDJHRIWKH($WRUHLQIRUFHWKLV7KH)RUHVW6HUYLFHLVFRQILGHQWWKDWVXPPHUUHFUHDWLRQLVWVZLOO UHVSHFWWKLVFORVXUH

8.2 The Forest Plan and the EA states that ‘huts’ are permitted in a 1.31, but there are no specifics as to what ‘hut’ means. Hut is defined as small, or a ‘shack.’ What is the appropriate size of a hut in a 1.31 prescription?

$IRRWQRWHZDVDGGHGRQSDJHRIWKH($WRFRQYH\UHOHYDQWSHUPLWLQIRUPDWLRQ³+XWVDUHSHUPLWWHG E\WKH)RUHVW6HUYLFHXQGHUDµ)606KHOWHU3HUPLW±¶XVHFRGHZKLFKLQFOXGHVµWUDLO VKHOWHUVZDLWLQJVKHGVDQGVLPLODUVWUXFWXUHVRIDUHFUHDWLRQDOQDWXUH¶´

$/7(51$7,9(6

9.1 The Town Council is concerned about the sizing of the proposed hut. We would like the EA to further analyze the number of guests the hut should accommodate. For example, a smaller sized hut may still be able to provide the experience desired by SHA but could reduce the additional impacts created by the users. The EA dismisses the possibility of a reduction in overnight guest capacity because reduced fees would make it difficult to operate. We would urge SHA to look at possible alternative financial models for funding a smaller capacity hut (e.g., customers might be willing to pay a premium for a more intimate experience). We request that the environmental analysis include an assessment of the varying environmental impacts based on the number of guests housed in the hut.

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D-23 198 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

3RWHQWLDOLPSDFWVDVVRFLDWHGZLWKGLIIHUHQWKXWFDSDFLWLHVKDYHEHHQFRQVLGHUHGDQGDWDEOHKDVEHHQ LQFOXGHGLQWKH'HFLVLRQ1RWLFHWRVXPPDUL]HWKHVHLPSDFWV

9.2 Leave the existing/old Nightmare on Baldy trail open for hut users.

7KHRULJLQDO1LJKWPDUHRQ%DOG\WUDLODOLJQPHQWZDVGHWHUPLQHGWREHWRRVWHHSIRUDVFHQWRUGHFHQWIRU KXWXVHUV

9.3 A separate skin track for access into the hut could be a potential solution to the trail hardening impacts a hut of any size would cause. This should be a minimal condition for offsetting the impacts from increased visitor traffic.

1HLWKHUDVHSDUDWHVNLQWUDFNRQWKHH[LVWLQJ6DOOLH%DUEHU5RDGDQG1LJKWPDUHRQ%DOG\QRUDQHZ VHSDUDWHWUDLODUHIHDVLEOHRSWLRQVWRSXUVXHIRUWKLVSURSRVDO$VHSDUDWHVNLQWUDFNZRXOGEHLPSRVVLEOH WRHQIRUFHLPSDFWVRIDQHZVHSDUDWHWUDLOZRXOGIDUH[FHHGWKRVHRIDGGLQJXVHUVWRH[LVWLQJWUDLOV

9.4 Parking impacts also need to be more clearly addressed as the cost of maintaining parking during winter is a burden on the municipality and County; and a considerable loss of recreational opportunity to local residents seeking what should be considered reasonable access for traditional activities. Assure that the proposed hut does not impact the limited parking used by local residents. Perhaps designing a hut of half the size (8Ǧ10 visitor capacity) of the one currently proposed would be a fair compromise for the impacts described above.

7KHVHLVVXHVDUHDGGUHVVHGWKURXJKWKHGHGLFDWHGSDUNLQJDUHDWKDWLVLQFOXGHGLQWKH3URSRVHG$FWLRQ 7DEOHRIWKH($KDVEHHQXSGDWHGWRLQGLFDWHWKDW6+$ZRXOGQHHGWRSUHSDUHDGHWDLOHGDQQXDO RSHUDWLRQVSODQWKDWVSHFLILHVDPRQJRWKHUWKLQJVKRZWKHSDUNLQJDUHDZRXOGEHPDLQWDLQHGWKURXJKRXW WKHZLQWHU

9.5 Weber Hut should not open until December 1st to reduce impacts on the popular Sallie Barber Road. Sallie Barber is often the only trail which has enough snow for nordic skiing for most of November. In addition, Nightmare on Baldy often is too rocky and does not hold snow until December so a later opening date makes sense.

7KH($KDVEHHQUHYLVHGWRFODULI\WKDWWKHSURSRVHGRSHQLQJGDWHIRUWKHKXWZRXOGEHWKHWKLUGZHHNRI 1RYHPEHU

&808/$7,9(,03$&76

10.1 Such loss of local XC skiing opportunities have occurred throughout the region as many of these winter travel corridors have become heavily used by the motorized community and are deǦfacto snowmobile areas of little use to the XC skiers.

7KH($GLVFORVHVLPSDFWVWRFXUUHQWUHFUHDWLRQDORSSRUWXQLWLHVDQGH[SHULHQFHVLQWKH$QDO\VLV$UHD7KH 3URSRVHG$FWLRQZRXOGQRWOHDGWRDORVVRIDQ\FURVVFRXQW\VNLLQJRSSRUWXQLWLHVDVLWPDNHVXVHRI H[LVWLQJWUDLOVDVZHOODVQHZWUDLOV²DOORIZKLFKZRXOGEHDYDLODEOHIRUZLQWHUXVHE\WKHSXEOLF,PSDFWV WRWKHFXUUHQWUHFUHDWLRQDOH[SHULHQFHRQH[LVWLQJWUDLOVDQGEDFNFRXQWU\VNLLQJWHUUDLQDUHGLVFORVHGLQ &KDSWHU6HFWLRQ$ 5HFUHDWLRQ RIWKH($ 6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D 24 199 of 200 $SSHQGL['5HVSRQVHWR&RPPHQWV

&8/785$/5(6285&(6

11.1 An historic grave located within the proposed parking area has been given very short shrift in the EA. A photo of this grave is attached as Exhibit 4. We understand that this may be one of the oldest preserved grave sites in Summit County. The grave is within the area of disturbance for the proposed parking area and certainly within the area designated for snow storage related to the proposed parking lot. It is impossible to believe that the grave site will not be damaged or destroyed by this proposed parking area as snowplows and members of the public traverse the area.

$VQRWHGRQSDJHVDQGRIWKH($

:KLOHWKH/LQFROQ7RZQVLWHERXQGDU\VOLJKWO\RYHUODSVWKHSURSRVHGSDUNLQJDUHDIRUWKH :HEHU*XOFKEDFNFRXQWU\KXW0$&UHFRPPHQGVWKDWWKHSRUWLRQRIWKHVLWHZLWKLQWKH SURSRVHGSDUNLQJGRHVQRWFRQWULEXWHWRWKHTXDOLWLHVWKDWFDXVHWKHVLWHWREHHOLJLEOH 1RQHRIWKHSUHYLRXVO\UHFRUGHGVLWHIHDWXUHVDUHORFDWHGLQWKLVSDUWRIWKHVLWHDOORIWKH H[LVWLQJEXLOGLQJVIRXQGDWLRQVDQGPLQHUHPQDQWVDVVRFLDWHGZLWK/LQFROQ¶VEXVLQHVV GLVWULFWDUHORFDWHGIXUWKHUWRWKHZHVW7KHFORVHVWVLWHIHDWXUHWRWKHSURSRVHGSDUNLQJORW LVDJUDYHORFDWHGWRWKHHDVWDQGRXWVLGHRIWKH$3(7KHJUDYHZRXOGQRWEHLPSDFWHG E\FRQVWUXFWLRQRIWKHSURSRVHGSDUNLQJORW

,QDGGLWLRQD3URMHFW'HVLJQ)HDWXUHKDVEHHQDGGHGWR7DEOHWRDYRLGSURWHFWWKHJUDYHVLWH

6XPPLW+XWV$VVRFLDWLRQ3URSRVHG:HEHU*XOFK%DFNFRXQWU\+XW (QYLURQPHQWDO$VVHVVPHQW Appendix D-25 200 of 200