Tax Relief Reconciliation Act of 2003 shall not apply to 
any qualified gain from the sale or exchange of qualified 
corporate stock held by the taxpayer for more than 5 
years. 
(b) QUALIFIED CORPORATE STOCK.—For purposes 
of this section, the term ‘‘qualified corporate stock’’ means 
any stock in a C corporation (as defined in section 
1361(a)(2) of the Internal Revenue Code of 1986), if— 
(1) as of the date of sale and during substan-
tially all of the taxpayer’s holding period for such 
stock, such corporation has a principal place of busi-
ness in the United States and meets the active busi-
ness requirements of section 1202(e) of such Code, 
(2) for at least two years preceding the date of 
sale, such corporation has paid for at least 60 per-
cent of each full time employee’s health insurance 
coverage, and 
(3) for at least two years preceding the date of 
sale, such corporation has contributed to a defined 
contribution plan in a manner that meets the safe 
harbor non-discrimination requirements under sec-
tion 401(k)(12) of such Code. 
(c) QUALIFIED GAIN.—For purposes of this section, 
the term ‘‘qualified gain’’ means any gain from the sale 
of stock constituting more than 50 percent of the total 
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voting power of all classes entitled to vote and more than 
50 percent of the total value of stock of such corporation, 
if— 
(1) during the applicable period, an amount 
equal to at least 5 percent of the sales proceeds is 
transferred to or for the benefit of eligible employees 
of the corporation, and 
(2) without taking into account the amount 
transferred under paragraph (1), the aggregate 
amount paid as compensation and benefits to eligible 
employees of the corporation during each year of the 
applicable period is at least equal to the base 
amount. 
(d) DEFINITIONS.—For purposes of this section— 
(1) ELIGIBLE EMPLOYEE.—The term ‘‘eligible 
employee’’ means any full-time employee, other than 
an employee who, any time during the 2-year period 
preceding the date of sale, is— 
(A) a key employee within the meaning of 
section 416(i) of such Code, 
(B) an employee whose annual W–2 wages 
exceed $250,000, or, 
(C) an employee whose principal place of 
employment is outside the United States. 
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(2) APPLICABLE PERIOD.—The term ‘‘applica-
ble period’’ means the calendar year in which the 
sale of the qualified corporate stock occurs and the 
immediately preceding calendar year. 
(3) BASE AMOUNT.—The term ‘‘base amount’’ 
means an amount equal to— 
(A) the average annual total compensation 
and benefits paid to eligible employees of the 
corporation during the three calendar year pe-
riod immediately preceding the applicable pe-
riod, multiplied by 
(B) the cost of living adjustment for the 
first year of the applicable period. 
(e) REGULATIONS.—The Secretary of the Treasury 
shall prescribe such regulations as may be necessary or 
appropriate to carry out the purposes of this paragraph. 
(f) EFFECTIVE DATE.—This section shall apply to 
gain from the sale of stock in taxable years beginning after 
the date of the enactment of this Act and before the date 
that is 5 years after the date of such enactment. 
Æ 
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