stock purchase plan

Definition

A trust established by a corporate which acts as a tax-qualified, defined contribution plan by making the corporation's employees partial owners. contributions are made by the sponsoring employer, and can grow tax-deferred, just as with an IRA or 401(k) plan. But unlike other retirement plans, the contributions must be invested in the company's stock. The benefits for the company include increased cash flow, tax savings, and increased productivity from highly motivated workers. The main benefit for the employees is the ability to share in the company's success. Due to the tax benefits, the administration of stock purchase plans is regulated, and numerous restrictions apply. also called Employee Stock Ownership Plan (ESOP).

Use stock purchase plan in a sentence

You should always make sure you do all of your research before you decide which stock purchase plan to choose.

​ Was this Helpful? YES  NO 11 people found this helpful.

Many people who have never owned a share of a company in their life may very well invest in their first one through their employer's stock purchase plan.

​ Was this Helpful? YES  NO 5 people found this helpful.

My company provides a stock purchase plan for its employees which allows us to defer part of our salary into retirement accounts that buy only company shares of stock.

​ Was this Helpful? YES  NO 10 people found this helpful.

Show more usage examples...

Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
stock price Direct Stock Purchase Plan