Page:United States Statutes at Large Volume 95.djvu/323

 PUBLIC LAW 97-34—AUG. 13, 1981

95 STAT. 297

the taxable year with respect to which such contributions are made as determined under paragraph (6)." (b) EXCLUSION FROM LIMITATION ON ANNUAL ADDITIONS.—

(1) IN GENERAL.—Section 415(c)(6) (relating to limitations on 26 USC 415. benefits and contributions made under qualified plans) is amended by adding at the end thereof the following new subparagraph: "(C) In the case of an employee stock ownership plan (as described in section 4975(e)(7)), under which no more than one-third of the employer contributions for a year which are deductible under paragraph (10) of section 404(a) are allocated to the group of employees consisting of officers, shareholders owning more than 10 percent of the employer's stock (determined under subparagraph (B)(iv)), or employees described in subparagraph (B)(iii), the limitations imposed by this section shall not apply to— "(i) forfeitures of employer securities under an employee stock ownership plan (as described in section 4975(e)(7)) if such securities were acquired with the proceeds of a loan (as described in section 404(a)(10)(A)), or "(ii) employer contributions to such an employee stock ownership plan which are deductible under section 404(a)(10)(B) and charged against the participant's Ante, p. 296. account." (2) EFFECTIVE DATE.—The amendment made by this subsection 26 USC 415 shall apply to years beginning after December 31, 1981. ^°^^SEC. 334. CASH DISTRIBUTIONS FROM AN EMPLOYEE STOCK OWNERSHIP PLAN.

Section 409A(h)(2) (relating to right to demand employer securities) 26 USC 409A. is amended— (1) by adding at the end thereof the following new sentence: "In the case of an employer whose charter or bylaws restrict the ownership of substantially all outstanding employer securities to employees or to a trust described in section 401(a), a plan which otherwise meets the requirements of this subsection or section 4975(e)(7) shall not be considered to have failed to meet the requirements of section 401(a) merely because it does not permit a participant to exercise the right described in paragraph (I)(A) if such plan provides that participants entitled to a distribution from the plan shall have a right to receive such distribution in cash."; and (2) by striking out "this section" in the first sentence thereof and inserting in lieu thereof "this subsection". SEC. 335. PUT OPTION FOR STOCK BONUS PLANS.

Section 401(a)(23) (relating to cash distribution option for stock 26 USC 401. bonus plans) is amended by striking out "409A(h)(2)" and inserting in lieu thereof "409A(h), except that in applying section 409A(h) for purposes of this paragraph, the term 'employer securities' shall include any securities of the employer held by the plan". SEC. 336. PUT OPTION REQUIREMENTS FOR BANKS; PUT OPTION PERIOD.

Section 409A(h) (relating to put options for employee stock owner- Supra. ship plans) is amended by adding at the end thereof the following new paragraphs:

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