The stock of the employer sponsoring an ESOP will now be traded on the "pink sheets". It is my understanding that the employer is now confronted with an annual valuation and also a "put" of shares.

How is it best to deal with the timing of distributions? For example, if a participant terminates employment in June, with a Dec. 31 valuation, should the plan not do distributions until after the next valuation? If so, should the plan only accept distribution applications from Jan to March 31, and if none received make the person wait until the next year?

I guess my general question is is there a standard or best practice method of making distributions to participants in non publicly traded ESOPs?

Any other consequences of not being traded on the pink sheets?

Your title does not seem in keeping with the context of your post.

Is the company moving from NASDAQ to pink slips? By pink slips do you mean OTC?

Why do you regard pink slips as not being publicly traded?

As for the questions, I would think that those situations have to be governed by the plan document etc.

See Letter Ruling 9036039. I think this ruling will answer most of your questions. If not, come back to the post.