Can anyone point me to any helpful resources on this topic?

I am aware of (1) an article titled Avoiding Difficulties When Unwinding an ESOP and Selling the Company in the September/October 1997 issue of the Journal of Taxation of Employee Benefits, (2) BenefitsLink's ESOP Q&A 11 (1999) and (3) certain discussions on this message board (including a number of helpful posts by RLL).

In the deal I'm working on, the company maintaining the ESOP will receive cash for its shares. The goal is to convert the ESOP to a profit-sharing plan and eliminate the right to stock distributions, while avoiding a termination.

The article referred to above suggests one approach would be to simply amend the ESOP to remove the right to take stock distributions. But it notes "Congress, the DOL and the IRS have all addressed and imposed conditions for an ESOP attempting this strategy." I'm aware of the 411(d)(6)© guidance that says such changes must be nondiscriminatory. Are there other "conditions" I ought to bear in mind?

Any other words of wisdom from those of you who may have dealt with this before?

Hire a competent ESOP attorney.

CMC ---

Review that portion of the Senate Finance Committee report under the Tax Reform Act of 1986 which discusses the addition of subparagraph © to IRC section 411(d)(6).

What you are proposing has been done frequently, and the IRS has issued many favorable determination letters with respect to ESOPs in which this has been done.