Exemption from Securities Registration Under Rule 701

Under Rule 701 of the Securities Act of 1933, companies can offer their own securities as part of written compensation agreements to employees, directors, general partners, trustees, officers, or certain consultants without having to comply with federal securities registration requirements.

Federal Legislation on ESOPs

Congress has been very supportive of ESOPs since their creation in 1974. There have been multiple added tax incentives, although some were later repealed.

Five Common Myths About Broad-Based Equity Plans

During the 1990s, according to our research here at the National Center for Employee Ownership, the number of employees getting stock options ballooned from less than one million at the start of the decade to about 10 million by the end.

Freezing or Terminating an ESOP

Each year, 3% to 4% of all employee stock ownership plans (ESOPs) are terminated; an unknown percentage are frozen, usually because the sponsor wants to create a different kind of benefit plan, wants to recapture some of the ESOP's ownership or, more rarely, has financial problems.

Inclusive Enterprises

An exploration of the interaction between business certifications, procurement policy, and ESOPs. The intersection between ESOPs and business ownership certifications (such as minority-, woman-, and veteran-owned) is often seen as a tough one to navigate. Though the regulations guiding procurement and contracting policy are strict for a reason, they can become prohibitive when less straightforward business structures are involved, so much so that many businesses fear losing their very valuable certifications should they sell more than 50% of the company to employees. This oftentimes only serves to penalize the populations they're supposed to serve—women, minorities, veterans, and the business owners and employees who belong to aforementioned groups. Thanks to a generous contribution from the W.K. Kellogg Foundation, the NCEO was able to begin exploring these interactions more in depth. This page will serve as the repository for resources as we continue to work in this field.

Largest Study Yet Shows ESOPs Improve Performance and Employee Benefits

In the largest and most significant study to date of the performance of employee stock ownership plans (ESOPs) in closely held companies, Douglas Kruse and Joseph Blasi of Rutgers have found that ESOPs appear to increase sales, employment, and sales per employee by about 2.3% to 2.4% per year ove