0309010 Informal Interpretation

Changed 04/25/2007 to refer to Informal Staff Opinion 0611006 11/27/2006 - We are inclined to say that the shareholder takes beneficial ownership of all of the shares that will vest over the two year period at the time of closing on the merger, because he receives the right to vote and risk of loss/benefit of gain in value. The only indicium that doesn't pass is investment discretion/ right to sell. The only thing that is hanging me up a little is the fact that it is possible he will never receive all (or even any) of the common shares. I think we can overlook that by saying that the restricted stock is itself a different class of convertible securities that already have the right to vote for the election of directors prior to conversion. If we take that position, none of the conversions to common stock as the restricted stock vests will be reportable because his percentage held (and number of votes) will not increase. M. Bruno and N. Ovuka concur. 09/24/03 Beneficial ownership passes to the employee at the time the stock vests. N Ovuka concurs.