I understand that in an ESOP that contains nonpublicly traded securities, a put option must be granted to the participants. Must this language be in the plan document?

Hi nancy ---

An ESOP that provides for the distribution of shares of employer stock that are "not readily tradable on an established market" must provide a "put option" to the distributee, per IRC section 409(h)(1)(B), (4), (5) & (6).
The plan document for such an ESOP must include provisions which comply with the put option requirements (see IRS Form 5309).