CLARIFICATION OF DEFINITION OF NONQUALIFIED PREFERRED STOCK.

SEC. 899. CLARIFICATION OF DEFINITION OF NONQUALIFIED PREFERRED STOCK.(a) In General.—Section 351(g)(3)(A) is amended by adding at the end the following: “Stock shall not be treated as participating in corporate growth to any significant extent unless there is a real and meaningful likelihood of the shareholder actually participating in the earnings and growth of the corporation.”.(b) Effective Date.—The amendment made by this section shall apply to transactions after May 14, 2003.118 STAT. 1650