; expansion of publicly held corporation definition (a) Limitation on use of performance exception (1) In general Section 162(m) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (7) Employee stock ownership requirements for use of performance exception (A) In general The exception under paragraph (4)(C) shall not apply to any remuneration payable by a publicly held corporation for any taxable year unless the corporation has in effect at all times during the year a qualified employee stock program. (B) Qualified employee stock program For purposes of this paragraph, the term qualified employee stock program means, with respect to any corporation, a program of the corporation under which— (i) employees of the corporation other than highly compensated employees (within the meaning of section 414(q)) hold nonforfeitable rights to at least 5 percent of— (I) either each class of outstanding stock of the corporation issuing the employer securities or the total value of all outstanding stock of the corporation, and (II) the voting rights of the total outstanding voting shares of stock of the corporation, (ii) any stock (or any right with respect to such stock) taken into account with respect to an employee under clause (i) is provided to the employee as an employer contribution and at no cost to the employee, and (iii) the providing of such stock or right by the corporation is not in lieu of any other remuneration payable to such employee. If a program includes the granting at no cost to employees of stock options under which employees may purchase stock through the exercise of the options, the cost to the employee of such purchase shall not be taken into account in determining whether the program meets the requirements of clause (ii). (C) Failure to retain minimum stock interest (i) In general Notwithstanding subparagraph (A), paragraph (4)(C) shall not apply to any remuneration payable by a corporation with a qualified employee stock program during any period employees