Unfortunately, the CCA’s informal revision also created several areas of uncertainty. For instance, it is unclear, in the context of an SRC determining not to take advantage of the scaled-back disclosure requirements, if that decision will affect the applicability of Section 162(m) to the PFO’s compensation. In addition, it is unclear whether “emerging growth companies”5 will be treated similarly to SRCs in regards to Section 162(m). Moreover, SRCs may have previously deducted compensation paid to PFOs that may no longer be deductible; it is uncertain how the IRS will treat those previous deductions. Despite the uncertainty created by the IRS’s conclusion in the CCA, SRCs should evaluate whether its PFO is one of the two most highly compensated executive officers. If so, the SRC will be subject to Section 162(m)’s limitation on deducting its PFO’s compensation and should evaluate its compensation arrangements and related proxy statement disclosures to determine if changes should be made. Contact Information If you have any questions concerning the recent IRS guidance, please contact Morgan Arndt, the principal drafter of this client alert, at MArndt@wcsr.com or 864.255.5416, or you may contact the Womble Carlyle attorney with whom you usually work or one of our Corporate and Securities attorneys. __________________ Womble Carlyle client alerts are intended to provide general information about significant legal developments and should not be construed as legal advice regarding any specific facts and circumstances, nor should they be construed as advertisements for legal services. IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S.

tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment). 5 Emerging growth companies are a new category of issuer, which has reduced disclosure requirements; created by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). For more information regarding the JOBS Act, please see our client alert here. 3 .