How are ESOP benefits distributed?
Benefit distributions from an ESOP may be made in cash or in company stock, subject to the put option described in Question 39. ESOP participants must be given the right to require a distribution of their ESOP account balances in the form of company stock, unless the company’s organizational documents restrict ownership of company stock to active employees, or the company is an S corporation. In these cases, the ESOP can distribute cash or company stock which must be immediately resold to the company on the terms described in Question 39.