A plan established by a company to let certain employees benefit strongly from the increase in value of the company. Under an ESOP, certain employees have a right to buy shares in the company at a predetermined price (exercise price) within a specified period of time (exercise period). Under a (Restricted) Stock Ownership Plan, employees are not granted options, but buy shares at once. ESOPs and (Restricted) Stock Ownership Plans offer companies a way to employ (and retain) high-quality people at relatively low salaries.
