Understanding the key terms and concepts related to Employee Stock Ownership Plans.
An Employee Stock Ownership Plan (ESOP) is a type of employee benefit plan, similar in some ways to a profit-sharing plan. In an ESOP, a company sets up a trust fund, into which it contributes new shares of its own stock or cash to buy existing shares. Alternatively, the ESOP can borrow money to buy new or existing shares, with the company making cash contributions to the plan to enable it to repay the loan.
Shares in the trust are allocated to individual employee accounts. Although there are some exceptions, generally all full-time employees over 21 are covered by the plan. As employees accumulate seniority with the company, they acquire an increasing right to the shares in their account, a process known as vesting.
Your search did not match any terms. Try a different keyword.