ice which has the effect of approving the plan 
amendment, and 
(B) such plan amendment is, on April 8, 
2003, subject to a court action based on age 
discrimination. 
(3) SPECIAL
RULE.—In the case of a plan 
amendment taking effect before 90 days after the 
date of the enactment of this Act, the requirements 
of section 204(b)(1)(I) of the Employee Retirement 
Income Security Act of 1974 (as added by this sec-
tion) and section 411(b)(1)(I) of the Internal Rev-
enue Code of 1986 (as added by this section) shall 
be treated as satisfied in connection with such plan 
amendment, in the case of any participant described 
in such sections 204(b)(1)(I) and 411(b)(1)(I) in 
connection with such plan amendment, if, as of the 
end of such 90-day period—
(A) the notice described in clause (i)(I) of 
such section 204(b)(1)(I) and clause (i)(I) of 
such section 411(b)(1)(I) in connection with 
such plan amendment has been provided to 
such participant, and 
(B) the plan provides for the election de-
scribed in clause (i)(II) of such section 
204(b)(1)(I) and clause (i)(II) of such section
411(b)(1)(I) in connection with such partici-
pant’s retirement under the plan. 
TITLE VIII—TREATMENT OF 
CORPORATE INSIDERS 
SEC. 801. SPECIAL RULES FOR EXECUTIVE PERKS AND RE-
TIREMENT BENEFITS. 
(a) IN GENERAL.—Part I of subchapter D of chapter 
1 of the Internal Revenue Code of 1986 (relating to pen-
sion, profit-sharing, stock bonus plans, etc.) is amended 
by adding at the end the following new subpart: 
‘‘SUBPART F—SPECIAL RULES FOR EXECUTIVE PERKS 
AND RETIREMENT BENEFITS
‘‘Sec. 420A. Holding period requirement for stock acquired 
through exercise of option. 
‘‘Sec. 420B. Additional tax on nondisclosed retirement perks. 
‘‘Sec. 420C. Definitions and special rule.
‘‘SEC. 420A. HOLDING PERIOD REQUIREMENT FOR STOCK 
ACQUIRED THROUGH EXERCISE OF OPTION. 
‘‘(a) IN GENERAL.—In the case of a corporate insider 
with respect to a corporation, the tax imposed by this 
chapter on a corporate insider for any taxable year shall 
be increased by 50 percent of the amount realized by such 
insider from the disqualified disposition during such year 
of stock acquired by the corporate insider upon the exer-
cise of a stock option granted by the corporation with re-
spect to which such individual is a corporate insider. 
‘‘(b) DISQUALIFIED DISPOSITION OF STOCK.—
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the term ‘disqualified disposition of stock’ 
means any sale, exchange, or other disposition of 
stock which, if such stock were employer securities 
held in a qualified cash or deferred arrangement (as 
defined in section 401(k)(2)), would violate any re-
striction imposed on the sale or other disposition of 
such securities by the plan of which such arrange-
ment is a part. 
‘‘(2) SPECIAL RULE FOR 2 OR MORE CASH OR 
DEFERRED ARRANGEMENTS.—If a corporation has 
more than 1 qualified cash or deferred arrangement 
(as so defined), the restrictions which apply for pur-
poses of paragraph (1) shall be the most restrictive 
provisions relating to the disposition of employer se-
curities held pursuant to any such arrangements. 
‘‘SEC. 420B. ADDITIONAL TAX ON NONDISCLOSED RETIRE-
MENT PERKS. 
‘‘(a) IN GENERAL.—In the case of a publicly traded 
corporation, the tax imposed by this chapter for the tax-
able year shall be increased by 50 percent of the net cost 
to the corporation for the taxable year of personal perks 
provided to a retired executive of the corporation. 
‘‘(b) WAIVER IF PERKS PROVIDED PURSUANT TO 
SHAREHOLDER
APPROVAL.—Subsection (a) shall not
apply with respect to any personal perks provided pursu-
ant to a contract if—
‘‘(1) all of the material terms of such contract 
(including a description of the benefits to be pro-
vided to the executive and the extent of such bene-
fits) are disclosed to shareholders, and 
‘‘(2) such contract is approved by a majority of 
the vote in a separate shareholder vote before any 
benefits are provided under the contract. 
‘‘(c) NET COST OF PERSONAL PERKS.—
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the net cost of personal perks provided to a re-
tired executive is the excess of—
‘‘(A) the cost to the corporation of such 
perks, over 
‘‘(B) the amount paid in cash during the 
taxable year by the executive to reimburse the 
corporation for the cost of such perks. 
‘‘(2) PERSONAL PERKS.—For purposes of para-
graph (1), the term ‘personal perks’ means—
‘‘(A) the use of corporate-owned property, 
‘‘(B) travel expenses, including meals and 
lodging, unless such expenses are directly re-
lated to the performance of services by the exec-
utive for the corporation and the business rela-
tionship of such expenses is substantiated under 
the requirements of section 274, 
‘‘(C) tickets to sporting or other entertain-
ment events, 
‘‘(D) amounts paid or incurred for mem-
bership in any club organized for business, 
pleasure, recreation, or other social purpose, 
and 
‘‘(E) other personal services, including 
services related to maintenance or protection of 
any personal residence of the executive. 
‘‘(3) COST RELATING TO USE OF CORPORATE-
OWNED
PROPERTY.—For purposes of this sub-
section—
‘‘(A) IN GENERAL.—The cost taken into 
account with respect to the use of corporate-
owned property shall be the allocable portion of 
the total cost of operating such property. 
‘‘(B) ALLOCABLE PORTION.—For purposes 
of subparagraph (A), the allocable portion of 
total cost is—
‘‘(i) the portion of the total cost (in-
cluding depreciation) incurred by the cor-
poration for operating and maintaining
such property during the corporation’s tax-
able year in which such use occurred, 
‘‘(ii) which is allocable to the use (de-
termined on the basis of the relationship of 
such use to the total use of the property 
during the taxable year). 
‘‘SEC. 420C. DEFINITIONS AND SPECIAL RULE. 
‘‘(a) DEFINITIONS.—For purposes of this subpart—
‘‘(1) CORPORATE
INSIDER.—The term ‘cor-
porate insider’ means, with respect to a corporation, 
any individual—
‘‘(A) who is subject to the requirements of 
section 16(a) of the Securities Exchange Act of 
1934 with respect to such corporation, or 
‘‘(B) who would be subject to such require-
ments if such corporation were an issuer of eq-
uity securities referred to in such section. 
‘‘(2) RETIRED EXECUTIVE.—The term ‘retired 
executive’ means any corporate insider who is no 
longer performing services on a substantially full 
time basis in the capacity that resulted in being sub-
ject to the requirements of section 16(a) of the Se-
curities Exchange Act of 1934. 
‘‘(3) PUBLICLY
TRADED
CORPORATION.—The 
term ‘publicly traded corporation’ means any cor-
poration issuing any class of securities required to 
be registered under section 12 of the Securities Ex-
change Act of 1934. 
‘‘(4) CORPORATE-OWNED PROPERTY.—
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘corporate-owned 
property’ means any of the following property 
owned by a corporation—
‘‘(i) planes, 
‘‘(ii) apartments or other residences, 
‘‘(iii) vacation, sports, and entertain-
ment facilities, and 
‘‘(iv) cars. 
Such term includes any such property which is 
leased or chartered by the corporation. 
‘‘(B) EXCEPTIONS.—Such term does not 
include any property used directly by the cor-
poration in providing transportation, lodging, or 
entertainment services to the general public. 
‘‘(b) ADDITIONS TO TAX NOT TREATED AS TAX FOR 
CERTAIN PURPOSES.—The tax imposed by sections 420A 
and 420B shall not be treated as a tax imposed by this 
chapter for purposes of determining—
‘‘(1) the amount of any credit allowable under 
this chapter, or
‘‘(2) the amount of the minimum tax imposed 
by section 55.’’. 
(b) CLERICAL AMENDMENT.—The table of subparts 
for part I of subchapter D of chapter 1 of such Code is 
amended by adding at the end the following new item:
‘‘Subpart F. Special Rules for Executive Perks and Retirement 
Benefits.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as follows: 
(1) Section 420A of the Internal Revenue Code 
of 1986 (as added by this section) shall apply to 
stock acquired pursuant to the exercise of an option 
after the date of the enactment of this Act. 
(2)(A) Except as provided by subparagraph 
(B), section 420B of such Code (as so added) shall 
apply to perks provided after the date of the enact-
ment of this Act. 
(B) In the case of perks provided pursuant to 
a contract in existence on the date of the enactment 
of this Act, such section 420B shall apply to such 
perks after the date of the first annual shareholders 
meeting after the date of the enactment of this Act.
SEC. 802. GOLDEN PARACHUTE EXCISE TAX TO APPLY TO 
DEFERRED COMPENSATION PAID BY COR-
PORATION AFTER MAJOR DECLINE IN STOCK 
VALUE OR CORPORATION DECLARES BANK-
RUPTCY. 
(a) IN GENERAL.—Section 4999 of the Internal Rev-
enue Code of 1986 (relating to golden parachute pay-
ments) is amended by redesignating subsection (c) as sub-
section (d) and by inserting after subsection (b) the fol-
lowing new subsection: 
‘‘(c) TAX TO APPLY TO DEFERRED COMPENSATION 
PAID AFTER MAJOR STOCK VALUE DECLINE OR BANK-
RUPTCY.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘excess parachute payment’ includes 
severance pay, and any other payment of deferred 
compensation, which is received by a corporate in-
sider after the date that the insider ceases to be em-
ployed by the corporation if—
‘‘(A) there is at least a 75-percent decline 
in the value of the stock in such corporation 
during the 1-year period ending on such date, 
or 
‘‘(B) such corporation becomes a debtor in 
a title 11 or similar case (as defined in section
368(a)(3)(A)) during the 180-day period begin-
ning 90 days before such date. 
Such term shall not include any payment from a 
qualified employer plan. 
‘‘(2) CORPORATE
INSIDER.—For purposes of 
paragraph (1), the term ‘corporate insider’ means, 
with respect to a corporation, any individual who is 
subject to the requirements of section 16(a) of the 
Securities Exchange Act of 1934 with respect to 
such corporation.’’
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply with respect to cessations of em-
ployment after the date of the enactment of this Act.
SEC. 803. ADEQUATE DISCLOSURE REGARDING EXECUTIVE 
COMPENSATION PACKAGES. 
(a) IN GENERAL.—Section 402 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1102) 
is amended by inserting after subsection (c) the following 
new subsection: 
‘‘(d) DISCLOSURE REGARDING EXECUTIVE COM-
PENSATION PACKAGES.—
‘‘(1) IN GENERAL.—In any case in which an 
employer takes any action to establish or substan-
tially improve an executive compensation package 
with respect to any employee, such action may not
take effect unless the employer has met the require-
ments of paragraph (2). 
‘‘(2) REQUIREMENTS.—An employer meets the 
requirements of this paragraph if—
‘‘(A) not less than 100 days prior to the 
effective date of the action described in para-
graph (1), the employer provides written notifi-
cation of the action to—
‘‘(i) each employee of the employer, 
‘‘(ii) each employee organization rep-
resenting employees of the employer (if 
any), and 
‘‘(iii) in the case of an employer that 
is a corporation, the board of directors, 
and 
‘‘(B) in the case of an employer that is a 
corporation, the board of directors has approved 
such action. 
Any such written notification shall be written in lan-
guage calculated to be understood by the average 
plan participant. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) EXECUTIVE
COMPENSATION
PACK-
AGE.—The term ‘executive compensation pack-
age’ means a combination of pay, benefits 
under employee benefit plans, and other forms 
of compensation provided by an employer pri-
marily for employees who are members of a se-
lect group of management or highly com-
pensated employees. 
‘‘(B) SUBSTANTIAL
IMPROVEMENT.—An 
executive compensation package is ‘substantially 
improved’ if the present value of such package 
is increased by not less than 10 percent.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply with respect to actions taken after 
the date of the enactment of this Act.
TITLE IX—ADDITIONAL PROTEC-
TIONS FOR EMPLOYEES OF 
BANKRUPT EMPLOYERS 
SEC. 901. AVOIDANCE OF CERTAIN TRANSFERS; ALTER-
NATE PROSECUTION OF ACTION. 
Section 547 of title 11, United States Code, is 
amended by adding at the end the following: 
‘‘(h) Notwithstanding subsections (b) and (c), the 
trustee may avoid a transfer of a debtor’s interest in prop-
erty to any trust or similar arrangement to fund supple-
mental retirement benefits or other deferred compensation 
for the benefit of an insider or other management em-
ployee made on or within one year before the date of the 
filing of the petition. 
‘‘(i) If the trustee consents or fails to commence a 
proceeding authorized under section 506, 543, 544, 545, 
547, 548, 549, 550, 552, 553, or 724, on request of a 
party in interest or a committee of creditors appointed 
under section 1102 of this title, after notice and a hearing, 
the court may authorize such party in interest or com-
mittee of creditors to commence and prosecute such pro-
ceeding if the court finds that commencing and pros-
ecuting such proceeding is in the best interest of the estate 
and for the benefit of the estate.’’. 
SEC. 902. LIMITATION ON RETENTION BONUSES, SEVER-
ANCE PAY, AND CERTAIN OTHER PAYMENTS. 
Section 503 of title 11, United States Code, is 
amended by adding at the end the following: 
‘‘(c)(1) Notwithstanding subsection (b), there shall 
neither be allowed, nor paid—
‘‘(A) a transfer made to, or an obligation in-
curred for the benefit of, an insider of the debtor for 
the purpose of inducing such person to remain with 
the debtor’s business, absent a finding by the court 
based on evidence in the record that—
‘‘(i) the transfer or obligation is essential 
to retention of the person because the individual
has a bona fide job offer from another business 
at the same or greater rate of compensation; 
‘‘(ii) the services provided by the person 
are essential to the survival of the business; and 
‘‘(iii) either—
‘‘(I) the amount of the transfer made 
to, or obligation incurred for the benefit of, 
the person is not greater than an amount 
equal to 10 times the amount of the mean 
transfer or obligation of a similar kind 
given to nonmanagement employees for 
any purpose during the calendar year in 
which the transfer is made or the obliga-
tion is incurred; or 
‘‘(II) if no such similar transfers were 
made to, or obligations were incurred for 
the benefit of, such nonmanagement em-
ployees during such calendar year, the 
amount of the transfer or obligation is not 
greater than an amount equal to 25 per-
cent of the amount of any similar transfer 
or obligation made to or incurred for the 
benefit of such insider for any purpose 
during the calendar year before the year in
which such transfer is made or obligation 
is incurred; 
‘‘(B) a severance payment to an insider of the 
debtor, unless—
‘‘(i) the payment is part of a program that 
is generally applicable to all full-time employees; 
and 
‘‘(ii) the amount of the payment is not 
greater than 10 times the amount of the mean 
severance pay given to nonmanagement employ-
ees during the calendar year in which the pay-
ment is made; or 
‘‘(C) other transfers or obligations that are out-
side the ordinary course of business and not justified 
by the facts and circumstances of the case. 
‘‘(2) For purposes of paragraph (1)(C), transfers 
made to, or obligations incurred for the benefit of, officers, 
managers, or consultants hired after the date of the filing 
of the petition shall be considered outside the ordinary 
course of business.’’. 
SEC. 903. PRIORITIES 
Section 507(a) of title 11, United States Code, is 
amended—
(1) in paragraph (3), by striking ‘‘earned within 
90 days before the date of the filing of the petition
or the date of the cessation of the debtor’s business, 
whichever occurs first,’’; and 
(2) in paragraphs (3) and (4), by striking 
‘‘$4,000’’ and inserting ‘‘$10,000’’. 
SEC. 904. EFFECTIVE DATE OF TITLE. 
The amendments made by this title shall take effect 
on the date of the enactment of this Act.
TITLE X—MISCELLANEOUS 
PROVISIONS
SEC. 1001. CORPORATE DEDUCTION FOR REINVESTED 
ESOP DIVIDENDS SUBJECT TO DEDUCTIBLE 
LIMITS. 
(a) IN GENERAL.—Subsection (a) of section 404 of 
the Internal Revenue Code of 1986 (relating to general 
rule) is amended by adding at the end the following new 
paragraph: 
‘‘(13) CERTAIN DIVIDENDS REINVESTED IN EM-
PLOYEE STOCK OWNERSHIP PLANS SUBJECT TO DE-
DUCTIBLE LIMITS.—For purposes of this subsection, 
an applicable dividend described in subsection 
(k)(2)(A)(iii)(I) shall be treated as compensation.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2003.
SEC. 1002. CREDIT FOR ELECTIVE DEFERRALS AND IRA 
CONTRIBUTIONS BY CERTAIN INDIVIDUALS 
MADE PERMANENT (SAVER’S TAX CREDIT). 
Section 25B of the Internal Revenue Code of 1986 
is amended by striking subsection (h) (relating to termi-
nation). 
TITLE XI—GENERAL 
PROVISIONS 
SEC. 1101. GENERAL EFFECTIVE DATE. 
(a) IN GENERAL.—Except as otherwise provided in 
this Act, the amendments made by this Act shall apply 
with respect to plan years beginning on or after January 
1, 2004. 
(b) SPECIAL RULE FOR COLLECTIVELY BARGAINED 
PLANS.—In the case of a plan maintained pursuant to 1 
or more collective bargaining agreements between em-
ployee representatives and 1 or more employers ratified 
on or before the date of the enactment of this Act, sub-
section (a) shall be applied to benefits pursuant to, and 
individuals covered by, any such agreement by substituting 
for ‘‘January 1, 2004’’ the date of the commencement of 
the first plan year beginning on or after the earlier of—
(1) the later of—
(A) January 1, 2005, or 
(B) the date on which the last of such col-
lective bargaining agreements terminates (de-
termined without regard to any extension there-
of after the date of the enactment of this Act), 
or 
(2) January 1, 2006. 
SEC. 1102. PLAN AMENDMENTS. 
If any amendment made by this Act requires an 
amendment to any plan, such plan amendment shall not 
be required to be made before the first plan year beginning 
on or after the effective date specified in section 601, if—
(1) during the period after such amendment 
made by this Act takes effect and before such first 
plan year, the plan is operated in accordance with 
the requirements of such amendment made by this 
Act, and 
(2) such plan amendment applies retroactively 
to the period after such amendment made by this 
Act takes effect and before such first plan year.
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