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## H&R REAL ESTATE INVESTMENT TRUST H&R FINANCE TRUST 

Notes to Combined Financial Statements  (In thousands of dollars, except unit and per unit amounts) 

Years ended December 31, 2010 and 2009 

## 11. Unitholders’ equity (continued): 

A summary of the status of the unit option plan as at December 31, 2010 and 2009 and the changes during the year ended on those dates are as follows: 

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The options outstanding at December 31, 2010 are exercisable at varying prices ranging from $9.30 to $16.56 (2009 - $9.30 to $16.56) with a weighted average remaining life of 8.4 years (2009 - 6.3 years). The vested options are exercisable at varying prices ranging from $9.30 to $16.56 (2009 - $13.12 to $16.56) with a weighted average remaining life of 7.7 years (2009 - 3.7 years). 

## (b) Distributions: 

Under the REIT’s Declaration of Trust, the total amount of income of the REIT to be distributed to unitholders, due and payable on or before December 31 of any calendar year, shall not be less than the amount necessary to ensure that the REIT will not be liable to pay income tax under Part I of the Income Tax Act (Canada) for that year, after all permitted deductions under such act have been taken (or authorized to be taken by the trustees), and any such payment shall be considered to have been declared by the trustees and to have been payable no later than December 31 of that year. Notwithstanding the foregoing, the total amount of income of the REIT to be distributed to unitholders for each calendar year shall be subject to the absolute discretion of the trustees. For the year ended December 31, 2010, the REIT declared per unit distributions of $0.68 (2009 - $0.61). 

Pursuant to Finance Trust’s Declaration of Trust, unitholders of Finance Trust are entitled to receive all of the Distributable Cash of Finance Trust, as defined in the Declaration of Trust. Distributable Cash means, subject to certain exceptions, all amounts received by Finance Trust less certain costs, expenses or other amounts payable by Finance Trust, and less any amounts which, in the opinion of the trustees, may reasonably be considered to be necessary to provide for the payment of any costs or expenditures that have been or will be incurred in the activities and operations of Finance Trust and to provide for payment of any tax liability of Finance Trust. Finance Trust paid per unit distributions of $0.11 for the year ended December 31, 2010 (2009 - $0.11). 

