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ESOP and Stock Bonus

An Employee Stock Ownership Plan (ESOP) is a (defined contribution) plan designed to invest primarily in employer stock. To establish an ESOP a company sets up a trust to hold the assets and makes contributions to it of company stock or cash. Each employee participates by receiving a contribution based on his or her earnings. The employee receives a contribution without him or her making any cash outlay, any reduction in pay or losing any other employee benefits.


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