### Question
How does the law define employee stock ownership plan?


### Answer
Under *26 U.S.C. § 4975*, **employee stock ownership plan** is defined as:

> a defined contribution plan—



(A) which is a stock bonus plan which is qualified, or a stock bonus and a money purchase plan both of which are qualified under section 401(a), and which are designed to invest primarily in qualifying employer securities

#### Citation:
  - *26 U.S.C. § 4975*
  - Heading: **Subtitle D-Miscellaneous Excise Taxes > CHAPTER 43-QUALIFIED PENSION, ETC., PLANS**

