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This excerpt taken from the BSET DEF 14A filed Jan 28, 2005. Federal Income Tax Consequences
A non-employee Director does not incur liability for federal income tax when granted restricted stock. In general, a non-employee Director who has received shares of restricted stock will include in gross income as compensation income an amount equal to the fair market value of the shares of restricted stock at the time the restrictions lapse or are removed. Such amount will be included in income in the tax year in which such event occurs.
A non-employee Director does incur liability for federal income tax on receipt of a stock grant. In general, a non-employee Director who has received shares of stock will include in gross income as compensation income an amount equal to the fair market value of the shares of stock at the time of receipt.
The Company will receive a tax deduction equal to the amount that the non-employee Director includes in gross income.
This summary of federal income tax consequences of incentive awards granted under the Plan does not purport to be complete. State, local and foreign income taxes also may be applicable to the transactions described above.
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