An ESPP is a program that allows the employees of a company to buy stock in that company. Usually the employees purchase the stock through a payroll deduction.
ESPPs can be either qualified or non-qualified. A qualified ESPP is designed to receive special tax treatment in section 423 of the Internal Revenue Code. They are sometimes referred to as 423 Plans. If a company offers a non-qualified ESPP plan it is usually to avoid some of the restrictions placed on the qualified (423) plan.