280G Values of Restricted Stock under Q/A 24(c).

[Guest jwbryson]

For 280G valuation purposes, let's assume restricted shares vest on the closing date of change in control, but participants are entitled to elect cash, stock or cash/stock combination of merger consideration for their vesting restricted shares.

Shares of Company ABC vest at value $X, but are then automatically exchanged for merger consideration valued at higher value $Y.

Which value do you use for (i) W-2 reporting, and (ii) purposes of Q/A 24© calculations? $X? $Y?

It seems reasonable to use value $X for W-2 reporting but if the participant is guaranteed a higher economic value of $Y for the shares, then for 280G purposes it seems reasonable and conservative to use the higher value of $Y.

Thoughts?