Economic flows of Cascading GRATs Example Pre-tax annual return of asset Value of initial transfer to GRAT $50,000,000 Year Return IRS discount rate 1.60% 1 15.00% Number of GRATs 4 2 15.00% Length of strategy 5 years 3 15.00% Annuity rate 51.20% 4 15.00% Escalating annuity percentage 0% 5 15.00% Term of individual GRATs 2 years Future IRS discount rate 1.60% Note: Assumes grantor survives all GRAT terms Note: Model does not include income taxes; the ongoing income taxes generated by the trust are paid by the grantor, income tax implications should be carefully considered Note: Model assumes all annuity payments are made in cash GRAT # FMV Appreciation Annuit FMV Appreciation Annuit 1 50,000,000 7,500,000 (25,601,587) 31,898,413 4,784,762 (25,601,587) 2 25,601,587 3,840, 238 (13, 108,825) 16,333,000 2,449,950 (13, 108,825) 3 38,710,413 5,806, 562 (19,820,960) 24,696,014 3,704,402 (19,820,960) 4 32,929,786 4,939,468 (16,861,096) 21,008, 158 3,151,224 (16,861,096) Year Balance Inflows FMV Balance Inflows FMV 1 0 0 0 0 0 0 2 0 11,081,587 11,081,587 0 0 0 3 12,743,825 5,674, 124 18,417,950 0 0 0 4 21,180,642 8,579,456 29,760,099 0 36,682,056 36, 682,056 5 34,224,114 7,298,286 41,522,399 42,184,364 16,861,096 59,045,460 Numbers have been rounded for convenience, are only estimates for illustrative purposes and should not be relied upon. Corporate insiders should consult with securities counsel as to any reporting issues under Section 16 of the Securities Exchange Act of 1934 associated with receiving shares in-kind. Note: Above example is for illustrative purposes only. These materials should not be construed as providing legal, tax or accounting advice. GRATs involve complex tax and, in the case of insiders, securities laws issues that should be discussed with your own advisors and company counsel. Annuity will be paid for full term to the grantor or, in case of the grantor’s death, to the grantor’s estate. Calculation is based on 2000 Tax Court ruling in Walton v. Com