Employee Stock Ownership Plan

Employee Stock Ownership Plan (ESOP) is a qualified, defined side of the bargain, employee benefit (ERISA) plan designed to invest primarily from the stock of the particular sponsoring employer. ESOPs are “qualified” from the sense that the particular ESOP’s sponsoring corporation, the selling shareholder and also participants receive numerous tax benefits. ESOP’s often used as corporate finance strategy and they are also used to help align the interests of a company’s employees with those of company’s shareholders.