An ESOP is a powerful alternative to selling to a competitor or management buyout firm. An ESOP is the only buyer that is willing to buy your stock on a year-by-year basis.

An ESOP can pay you the same price as any third party. But in the case of a sale to an ESOP, the net proceeds to you will be 20% to 25% greater due to a special tax provision that enables you to avoid or defer paying any capital gains tax on the sale by rolling over your proceeds, tax-free, into other stocks or bonds.