employee stock ownership plan (ESOP)
A type of defined contribution benefit plan in which most or all of the assets
are invested in the employer's stock. Contrary to how it sounds, employees do
not individually buy shares in the company through an ESOP. Rather, the company
contributes shares to the plan, and the plan buys additional stock with loans
to be repaid by the company. (The ability to leverage the plan has significant
tax benefits.) "Vested" employees receive a payout of benefits when they leave
the company.