Jocko works for IBM, a publicly traded company that sponsors a stock bonus plan. Which of the following statements is not correct regarding the plan? a. If the distribution of IBM stock is made to Jocko in installments over a two year period, then the fair market value of all employer securities distributed in the installment distribution will be taxable as ordinary income. b. Jocko is permitted to vote the shares of IBM within his account. c. Upon termination, Jocko must be given the right to receive IBM stock held in the plan as part of a distribution. d. If Jocko has less than three years of service, he is permitted to diversify one-half of company match contributions that consist of IBM stock.

A stock bonus plan is defined as a contribution profit sharing plan in which contributions to a stock bonus plan by employers are discretionary and recurring. Also, stock bonus plans cannot discriminate toward executives (highly compensated employees).

The following statement is not correct regarding the plan:

''If Jocko has less than three years of service, he is permitted to diversify one-half of company match contributions that consist of IBM stock.''