Page:United States Statutes at Large Volume 98 Part 1.djvu/936

 98 STAT. 888

PUBLIC LAW 98-369—JULY 18, 1984 "(1) SALE TO EMPLOYEE ORGANIZATIONS.—The qualified securities are sold to— "(A) an employee stock ownership plan (as defined in section 4975(e)(7)), or "(B) an eligible worker-owned cooperative. "(2) EMPLOYEES MUST OWN 30 PERCENT OF STOCK AFTER SALE.—

The plan or cooperative referred to in paragraph (1) owns, immediately after the sale, at least 30 percent of the total value of the employer securities (within the meaning of section 409(1)) outstanding as of such time. "(3) PLAN MAINTAINED FOR BENEFIT OF EMPLOYEES.—No portion of the assets of the plan or cooperative attributable to employer securities (within the meaning of section 409(1)) acquired by the plan or cooperative described in paragraph (1) accrue under such plan, or are allocated by such cooperative, for the benefit of— "(A) the taxpayer, "(B) any person who is a member of the family of the taxpayer (within the meaning of section 267(c)(4)), or "(C) any other person who owns (after application of section 318(a)) more than 25 percent in value of any class of outstanding employer securities (within the meaning of section 409(1)).

Ante, p. 852.

"(4) WRITTEN STATEMENT REQUIRED.—

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Post, p. 894.

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"(A) IN GENERAL.—The taxpayer files with the Secretary the written statement described in subparagraph (B). "(B) STATEMENT.—A statement is described in this subparagraph if it is a verified written statement of— "(i) the employer whose employees are covered by the plan described in paragraph (1), or "(ii) any authorized officer of the cooperative described in paragraph (1), consenting to the application of section 4978(a) with respect to such employer or cooperative. "(c) DEFINITIONS; SPECIAL RULES.—For purposes of this section.— "(1) QUALIFIED SECURITIES.—The term 'qualified securities' means employer securities (as defined in section 409(1)) which— "(A) are issued by a domestic corporation that has no securities outstanding that are readily tradable on an established securities market, "(B) at the time of the sale described in subsection (a)(1), have been held by the taxpayer for more than 1 year, and "(C) were not received by the taxpayer in— "(i) a distribution from a plan described in section 401(a), or "(ii) a transfer pursuant to an option or other right to acquire stock to which section 83, 422, 422A, 423, or 424 applies. "(2) ELIGIBLE WORKER-OWNED COOPERATIVE.—The term 'eligible worker-owned cooperative' means any organization— "(A) to which part I of subchapter T applies, "(B) a majority of the membership of which is composed of employees of such organization, "(C) a majority of the voting stock of which is owned by members, "(D) a majority of the board of directors of which is elected by the members on the basis of 1 person 1 vote, and

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