What impact does the proposed merger with MGM Mirage have on restricted stock?
Assuming that the proposed merger with MGM Mirage is completed, the terms of the merger agreement provide that all shares of restricted stock will fully vest on the closing date of the merger and will then be immediately acquired by MGM Mirage for the merger price of $71 per share. This means that assuming your are still employed by the company on the closing date, you will be entitled to receive proceeds of $71 per share multiplied by the total number of shares of restricted stock which were granted to you (whether or not fully vested), less applicable withholding and payroll taxes This income is subject to a 25% withholding rate as supplemental wages, and is also subject to FICA of 6.2% (with a 2004 wage limit of $87,900) and Medicare of 1.45% (no limit). 3. How is restricted stock treated for tax purposes? Generally, there are no tax consequences on the date of grant. However, on each vesting date you will be deemed to have received income equal to the number of shares vesting on th
