Section 409(h) of the Code gives participants the right to demand that benefits be distributed in the form of employer stock and further gives the employee a "put" option which requires the employer to repurchase such shares at FMV. In the event an employer terminates its ESOP and its shares become delisted, how is the put option handled? Normally participants would be given "two bites" at the apple - a 60 day period beginning on the date of distribution and a similar 60 day period one year later. Are 2 bites required if the plan is terminated?

Hi amboyd ---

The put option requirements of IRC section 409(h)(1)(B) would apply to distributions of stock (that is not "readily tradable") in connection with the termination of the ESOP, including the requirement for two put option periods under section 409(h)(4).