Employee Stock Purchase Plan - Investment & Finance Definition
A plan that allows employees to buy stock in the company through payroll deductions. Often the stock price is discounted, typi-cally 15 percent from the market price. After purchasing the stock, the employee can sell it for a quick profit or hold onto it. Often ESPPs are set up as tax-qualified Section 423 plans, which means that all employees at the company two years or longer must be able to participate.