‘‘(B) INCENTIVE
EQUITY.—For purposes 
of this paragraph, the term ‘incentive equity’ 
means any restricted stock granted to an em-
ployee of the corporation, any stock acquired 
pursuant to an incentive stock option granted 
to an employee of the corporation, or any simi-
lar grant of stock or convertible equity. 
‘‘(5) TREATMENT OF FORFEITED STOCK.—In 
the case of any stock which is forfeited (by reason 
of a failure to vest or otherwise), such stock shall 
not be taken into account under paragraph (1) after 
the second calendar year following the calendar year 
in which such stock is so forfeited. 
‘‘(e) SHARE PLAN.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘SHARE plan’ 
means, with respect to any corporation, a plan which 
provides for making periodic distributions of com-
mon stock of such corporation to each participating 
employee of such corporation (determined as the 
date of each such periodic distribution). 
‘‘(2) PARTICIPATING EMPLOYEES.— 
‘‘(A) IN
GENERAL.—The term ‘partici-
pating employee’ means, with respect to any 
corporation, any eligible employee of such cor-
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poration who is treated as a participating em-
ployee under the terms of the plan. 
‘‘(B) 80-PERCENT REQUIREMENT.—A plan 
shall not be treated as a SHARE plan unless, 
with respect to each periodic distribution made 
under such plan, at least 80 percent of the eli-
gible employees of such corporation are partici-
pating employees with respect to such distribu-
tion. 
‘‘(3) ELIGIBLE EMPLOYEE.—The term ‘eligible 
employee’ means, with respect to any corporation, 
any full-time employee who is based in the United 
States and who is not one of the 1 percent of em-
ployees receiving the highest annual compensation 
from such corporation. 
‘‘(4) DISTRIBUTION REQUIREMENTS.— 
‘‘(A) IN GENERAL.—A plan shall not be 
treated as a SHARE plan unless the distribu-
tions made under such plan— 
‘‘(i) are made without compensation 
(other than service as an employee), 
‘‘(ii) may be sold or transferred with-
out restriction— 
‘‘(I) after a holding period of not 
to exceed 3 years, and 
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‘‘(II) during any period described 
in subclause (I), during any hardship 
of the employee (within the meaning 
of section 401(k)(2)(B)(i)(IV)), 
‘‘(iii) except as provided in subpara-
graph (B), are made in equal amounts to 
each participating employee (determined in 
the aggregate with respect to any calendar 
year and properly adjusted with respect 
any employee not employed at all times 
during such calendar year), and 
‘‘(iv) except in the case of a distribu-
tion made to an employee described in sub-
paragraph (C), vest immediately in the re-
cipient. 
‘‘(B) ADJUSTMENTS FOR PERIOD OF SERV-
ICE.—The requirement of subparagraph (A)(iii) 
shall be treated as met if such requirement is 
met when applied separately to groups of par-
ticipating employees divided (under the terms of 
the corporation’s SHARE plan) on the basis of 
the period for which such employees have been 
employed by the distributing corporation. 
‘‘(C) PERMISSIBLE RESTRICTION ON VEST-
ING.—In the case of any employee employed by 
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the distributing corporation for a period of less 
than 5 years, such employee’s interest in any 
distribution of stock under a SHARE plan shall 
vest not later than the earlier of— 
‘‘(i) the date on which such employee 
has been so employed for a period of 5 
years, or 
‘‘(ii) the first date after such distribu-
tion on which there is a change in the con-
trol of such distributing corporation. 
‘‘(f) APPLICATION TO PARTNERSHIPS.— 
‘‘(1) IN GENERAL.—Rules similar to the rules 
of this section and section 139I shall apply with re-
spect to any partnership. 
‘‘(2) EXCEPTION.—Paragraph (1) shall not 
apply to any partnership if the principal business of 
such partnership is the provision of legal, account-
ing, or medical services and such partnership is ma-
jority owned by licensed lawyers, accountants, or 
medical doctors, respectively. 
‘‘(3) REGULATIONS.—As soon as practicable 
after the date of the enactment of this Act, the Sec-
retary shall issue such regulations or other guidance 
as may be necessary or appropriate to carry out the 
purposes of this subsection. 
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‘‘(g) PUBLICATION BY TREASURY.—The Secretary 
shall make publicly available with respect to each calendar 
year— 
‘‘(1) a list of corporations which the Secretary 
has identified as covered corporations, 
‘‘(2) a list of corporations which the Secretary 
has identified as SHARE corporations, and 
‘‘(3) a list of corporations described in para-
graph (1) which are not described in paragraph (2). 
‘‘(h) DETERMINATION
OF CORPORATE EARNINGS 
AND PROFITS.—Distributions of stock under a SHARE 
plan shall not be taken into account in determining the 
earnings and profits of the distributing corporation. 
‘‘(i) AGGREGATION RULES.—In the case of any con-
trolled group (within the meaning of section 1563(a))— 
‘‘(1) such group shall be treated as a single cor-
poration for purposes of applying subsection (b)(2), 
and 
‘‘(2) the Secretary may issue such regulations 
or other guidance as the Secretary determines to be 
appropriate for purposes of applying the provisions 
of this section to such group, including regulations 
or other guidance that coordinates or consolidates 
the SHARE plans of the corporations in such group 
or allows or requires employees of any corporation in 
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such group to receive stock of another corporation in 
such group pursuant to such SHARE plans.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part III of subchapter P of chapter 1 of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new item: 
‘‘Sec. 1224. SHARE plans.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to stock sold or exchanged in cal-
endar years beginning more than 1 year after the date 
of the enactment of this Act. 
SEC. 3. DISTRIBUTIONS OF STOCK ISSUED UNDER SHARE 
PLANS EXCLUDED FROM GROSS INCOME. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 139H the following new section: 
‘‘SEC. 139I. SHARE PLAN DISTRIBUTIONS. 
‘‘(a) IN GENERAL.—Gross income shall not include 
any SHARE plan stock received by an employee under a 
SHARE plan. 
‘‘(b) EXCLUSION OF CERTAIN GAIN.— 
‘‘(1) IN GENERAL.—In the case of the disposi-
tion during any taxable year by any employee or 
former employee of SHARE plan stock received by 
such employee under a SHARE plan, so much of the 
taxpayer’s net SHARE plan stock gain as does not 
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