EFTA Document EFTA01385000

fixation of Stockholders and Potential Tax Consequences of Their Investment in Shares of Common Stock Taxation of Taxable U.S. Stockholders The term "U.S. stockholder" means a holder of shares of our common stock who, for US. federal income tax purposes, is: • an individual who is a citizen or resident of the United States; • a corporation (including an entity treated as a corporation for US. federal income tax purposes) created or organized under the laws of the United Stabs or of a political subdivision of the United States; • an estate, the income of which is subject to US. federal income taxation regardless of its source; or • any trust if (1) a United States court is able to exercise primary supervision over the administration of such trust and one or more United States persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a United States person. If a partnership or an entity treated as a partnership for U.S. federal income tax purposes holds our stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. If you are a partnership holding our common stock, you should consult your own tax advisor regarding the consequences to your partners of the ownership and disposition of shares of our common stock by you. Dividends. As long as we qualify as a REIT, a taxable U.S. stockholder must generally take into account as ordinary income distributions made out of our current or accumulated earnings and profits that we do not designate as capital gain dividends. Dividends paid to a non-corporate U.S. stockholder generally will not qualify for the 20% tax rate for "qualified dividend income." Qualified dividend income generally includes dividends paid to most U.S. non-corporate taxpayers by domestic C corporations and certain qualified foreign corporations. Because we are not generally subject to U.S. federal income tax on the portion of our REIT taxable income distributed to our stockholders, our ordinary dividends generally will not be eligible for the 20% tax rate on qualified dividend income. As a result, our ordinary dividends will continue to be taxed at the higher tax rate applicable to ordinary income. However, the 20% tax rate for qualified dividend income will apply to our ordinary dividends (1) attributable to dividends received by us from taxable corporations, such as our TRSs, and (2) to the extent attributable to income upon which we have paid corporate income tax (e.g., to the extent that we distribute less than 100% of our taxable income). In general, to qualify for the reduced tax rate on qualified dividend income, a stockholder must hold our stock for more than 60 days during the 121-day period beginning on the date that is 60 days before the date on which our stock becomes ex-dividend. Dividends paid to a corporate US. stockholder will not qualify for the dividends received deduction generally available to corporations. If we declare a distribution in October, November or December of any year that is payable to a U.S. stockholder of record on a specified date in any such month, such distribution will be treated as both paid by us and received by the U.S. stockholder on December 31 of such year. provided that we actually pay the distribution during January of the following calendar year. Distributions from us that arc designated as capital gain dividends will be taxed to US. stockholders as long-term capital gains, to the extent that they do not exceed our actual net capital gains for the taxable year, without regard to the period for which the U.S. stockholder has held our common stock. Corporate US. stockholders may be required to treat up to 20% of some capital gain dividends as ordinary income. Long-term capital gains arc generally taxable at a maximum U.S. federal rate of 20%, in the case of U.S. stockholders who arc individuals, and 35% for corporations. Capital 227 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. R 6(e) DB-SDNY-0085790 CONFIDENTIAL SDNY_GM_00231974 EFTA01385000