leveraged ESOP

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Leveraged ESOP

An employee stock ownership plan in which the sponsoring company borrows funds in order to purchase shares from itself, which it then distributes or sells to employees as part of their compensation. It repays the loan with annual contributions.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

leveraged ESOP

An Employee Stock Ownership Plan that borrows funds to purchase securities of the employer.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
As a result, 'leveraged ESOPs' may be used as a technique for corporate finance."
New leveraged ESOPs that borrow a large amount relative to their EBITDA, Rogers says, “may find that their deductible expenses will be lower, and, therefore, their taxable income may be higher under this change.” However, 100% ESOP-owned corporations will not be affected because they pay no tax, he says.
Anthony Dolan, Director, has significant experience advising middle market companies and shareholders on mergers and acquisitions, capital raising, leveraged ESOPs, and strategic advisory engagements.
Leveraged ESOPs use debt to purchase all or a portion of the company stock.
(1)"Leveraged ESOPs and Employee Buyouts," Fifth Edition, National Center for Employee Ownership (Fifth Edition, p.1).
As a result, "leveraged ESOPs" may be used as a technique of corporate finance.
404(a)(9) more literally--as exempting leveraged ESOPs from Sec.
It has also facilitated other sales of businesses, leveraged buyouts, leveraged ESOPs and recapitalizations.
An ESOP also has special borrowing rights, which allow for leveraged ESOPs to be facilitated as a method for corporate finance.
Companies created leveraged ESOPs in the late 1980s and early 1990s, borrowing funds to purchase company stock.
If tax benefits are the reason, we expect the coefficient of this variable to be positive because tax benefits are available only for leveraged ESOPs, and they are proportional to the amount of borrowing (adjusted to the total equity value).