In reviewing the literature on a restricted stock award program for an S corporation, no mention is made of considerations for the AAA. Since it's a corporate level account the new shareholders will have rights to previously taxed income earned before becoming vested shareholders. If the new shareholders were actually paying for their shares this could be accounted for, but in an award program there is no cost basis other than the amount going into the W-2. Is it reasonable to set aside the AAA into a liability for the former owners as of the grant date?
When adding shareholders in an S corporation (through a Restricted Stock Program) can the AAA be zeroed to a liability for the former owners?
If I'm understanding you correctly, then the answer is no. I believe you're asking about distributions. In the case of distributions, my understanding is that it does not matter when (pre or post accumulation) or how (grant or purchase) the holder accumulated the shares. Once they own the shares (restricted or not), they are subject to the same distribution rules as everyone else.