qualified stock
(2) Qualified stock (A) In general For purposes of this subsection, the term “qualified stock” means, with respect to any qualified employee, any stock in a corporation which is the employer of such employee, if— (i) such stock is received— (I) in connection with the exercise of an option, or (II) in settlement of a restricted stock unit, and (ii) such option or restricted stock unit was granted by the corporation— (I) in connection with the performance of services as an employee, and (II) during a calendar year in which such corporation was an eligible corporation. (B) Limitation The term “qualified stock” shall not include any stock if the employee may sell such stock to, or otherwise receive cash in lieu of stock from, the corporation at the time that the rights of the employee in such stock first become transferable or not subject to a substantial risk of forfeiture. (C) Eligible corporation For purposes of subparagraph (A)(ii)(II)— (i) In general The term “eligible corporation” means, with respect to any calendar year, any corporation if— (I) no stock of such corporation (or any predecessor of such corporation) is readily tradable on an established securities market (as determined under paragraph (1)(B)(iii)) during any preceding calendar year, and (II) such corporation has a written plan under which, in such calendar year, not less than 80 percent of all employees who provide services to such corporation in the United States (or any possession of the United States) are granted stock options, or are granted restricted stock units, with the same rights and privileges to receive qualified stock. (ii) Same rights and privileges For purposes of clause (i)(II)— (I) except as provided in subclauses (II) and (III), the determination of rights and privileges with respect to stock shall be made in a similar manner as under section 423(b)(5), (II) employees shall not fail to be treated as having the same rights and privileges to receive qualified stock solely because the number of shares available to all employees is not equal in amount, so long as the number of shares available to each employee is more than a de minimis amount, and (III) rights and privileges with respect to the exercise of an option shall not be treated as the same as rights and privileges with respect to the settlement of a restricted stock unit. (iii) Employee For purposes of clause (i)(II), the term “employee” shall not include any employee described in section 4980E(d)(4) or any excluded employee. (iv) Special rule for calendar years before 2018 In the case of any calendar year beginning before January 1, 2018 , clause (i)(II) shall be applied without regard to whether the rights and privileges with respect to the qualified stock are the same.