Company: NXDT
Filing Date: 2025-04-11
Form Type: S-4
Source: 0001437749-25-011826
Chunk: 58

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-04-11
Form: S-4
Chunk 58
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 the stock exchange(s) on which the Old Common Shares are traded. Shareholder approval will be obtained to increase the Overall Share Limit (subject to adjustment as described above), and for any amendment that would require such approval to comply with any rules of the stock exchange(s) on which the Old Common Shares are traded or other applicable law. The Board may, in its discretion, terminate the A&R 2023 Plan at any time. Termination of the A&R 2023 Plan will not affect the rights of participants or their successors under any awards outstanding and not exercised in full on the date of termination.

Material U.S. Federal Income Tax Consequences

The following discussion of certain relevant United States federal income tax effects applicable to certain awards granted under the A&R 2023 Plan is only a summary of certain of the United States federal income tax consequences applicable to United States residents under the A&R 2023 Plan, and reference is made to the Code for a complete statement of all relevant federal tax provisions. No consideration has been given to the effects of foreign, state, local and other laws (tax or other) on the A&R 2023 Plan or on a participant, which laws will vary depending upon the particular jurisdiction or jurisdictions involved. In particular, participants who are stationed outside the United States may be subject to foreign taxes as a result of the A&R 2023 Plan.

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Tax Consequences to Participants

Nonqualified Option Rights:An optionee subject to United States federal income tax will generally not recognize taxable income for United States federal income tax purposes upon the grant of a nonqualified share option. Rather, at the time of exercise of the nonqualified share option, the optionee will recognize ordinary income, and Old NXDT will be entitled to a deduction, in an amount equal to the excess of the fair market value of the Old Common Shares on the date of exercise over the exercise price. If the Old Common Shares acquired upon the exercise of a nonqualified share option are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of such shares on the date of such exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the optionee), depending upon the length of time such shares were held by the optionee.

Incentive Stock Options:An optionee subject to United States federal income tax will generally not recognize taxable income for United States federal income tax purposes upon