Definitions

# (1)

# (a)

"Capital stock" means voting or nonvoting common or preferred stock acquired as the result of employment or service as an employee or director with a corporation.

# (b)

The term does not include stock rights or debt securities.

# (2)

# (a)

"Corporation" means a corporation, as defined in 15-30-2101 , including a unitary business, as described in 15-31-301 .

# (b)

The term includes a predecessor or successor corporation.

# (c)

The term does not include either a business entity or a business entity with a financial interest in another business entity that is directly or indirectly engaged in a business activity that is illegal under federal law, regardless of how the business entity is organized.

# (3)

"Net long-term capital gain" has the meaning provided in section 1222(7) of the Internal Revenue Code, 26 U.S.C. 1222(7).

# (4)

"Predecessor or successor corporation" means a corporation that was party to a reorganization that was entirely or substantially tax-free and that occurred during or after the employment of an individual claiming the rate under 15-30-3704 .