PUBLIC LAW 100-203—DEC. 22, 1987
101 STAT. 1330-437
"(2) STOCKS DISPOSED OF BEFORE ALLOCATION.—Any disposition of qualified employer securities to which paragraph (1) does not apply if— V a. "(A) such disposition occurs before such securities are allocated to accounts of participants or their beneficiaries, vd »••
and
"(B) the proceeds from such disposition are not so allocated. "(3) USE OF ASSETS TO REPAY ACQUISITION LOANS.—The payment by an employee stock ownership plan of any portion of any loan used to acquire employer securities from transferred assets (within the meaning of section 2057(c)(2)(B)). "(d) ORDERING RULES.—For purposes of this section and section 4978, any disposition of employer securities shall be treated as having been made in the following order: "(1) First, from qualified employer securities acquired during the 3-year period ending on the date of such disposition, beginning with the securities first so acquired. "(2) Second, from qualified employer securities acquired before such 3-year period unless such securities (or the proceeds from such disposition) have been allocated to accounts of participants or their beneficiaries. "(3) Third, from qualified securities (within the meaning of section 4978(e)(2)) to which section 1042 applied acquired during the 3-year period ending on the date of such disposition, beginning with the securities first so acquired. "(4) Finally, from any other employer securities. In the case of a disposition to which section 4978(d) or subsection (e) applies, the disposition of employer securities shall be treated as having been made in the opposite order of the preceding sentence. "(e) SECTION NOT TO APPLY TO CERTAIN DISPOSITIONS.—
"(1) IN GENERAL.—This section shall not apply to any disposi, tion described in paragraph (Dor (3) of section 4978(d). "(2) CERTAIN REORGANIZATIONS.—For purposes of this section, any exchange of qualified employer securities for employer securities of another corporation in any reorganization described in section 368(a)(l) shall not be treated as a disposition, but the employer securities which were received shall be treated— "(A) as qualified employer securities of the plan or cooperative, and ?.; "(B) as having been held by the plan or cooperative during the period the qualified employer securities were held. "(3) DISPOSITION TO MEET DIVERSIFICATION REQUIREMENTS.—
Any disposition which is made to meet the requirements of section 401(a)(28) shall not be treated as a disposition. "(f) DEFINITIONS AND SPECIAL RULES.—For purposes of this section— "(1) TERMS USED IN SECTION 2057.—Any term used in this section which is used in section 2057 shall have the meaning , given such term by section 2057. "(2) QuAUFiED EMPLOYER SECURITIES.—The term 'qualified employer securities' has the meaning given such term by section
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