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Define Employee Stock Ownership

Employee Stock Ownership: It is a qualified, defined contribution, employee benefit (that is, ERISA) plan designed to invest mainly in the stock of sponsoring employer. ESOPs are "qualified" in the logic that the ESOP's sponsoring company, the selling share-holder and participants receive different tax advantages. ESOPs are frequently employed as a corporate finance policy and are too employed to align the interests of a company's employees with such of company's share-holders.

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