NEWBURYPORT - Mike Strem has worked in the city for 29 years and owned his company, Strem Chemicals, for 42.

Some of his employees have been there almost as long as he has, he said. That's why, as Strem reaches into retirement years, he said he didn't want to sell his business to some out-of-town company looking to make a quick profit.

So, instead, he sold the company to his employees.

"It's like a little family, this place," Strem said. "I didn't want people who have been working her for a long time to just lose their job."

Under a little-known federal program called Employee Stock Ownership Plans, Strem sold 25 percent of the company to his 50 employees. That way, he said, it helps to ensure the employees don't lose their jobs, helps keep the company in Newburyport and gives the workers incentives in their daily work lives.

It also gives the employees the ability to buy continually larger percentages of Strem Chemicals.

"The success is the result of your hard work," Strem said to a group of employees who gathered yesterday to celebrate.

Chris Mackin, the director of the state's Office of Employee Involvement and Ownership, said problems arise in companies when there is not a clear successor to a company. He said people will work a lifetime on something, build it up and then at the end may not just want the highest bidder to get the fruits of their labor.

Mackin said there are about 110 companies in the state that work under ESOP deals.

"This is a win-win situation," said Mackin, whose office encourages companies to pursue ESOPs. "It's good for the employees; it's good for Mike Strem."

In such a deal, the employees get a chunk of the profit each year and receive the money when they leave the company or retire. Mackin said it is a great deal since the employees will earn two types of income: wages and investments.

Congressman John Tierney, D-Salem, who attended the celebratory luncheon, said the new ownership is "a great plan."

"The good news is the jobs will stay in Newburyport," he said. "And I commend you for doing this."

One of the largest ESOP companies in the Bay State is International Cars, which employs more than 280 people in Danvers.

Mackin said it makes sense to sell to the employees to make sure the jobs stay in the area.

"They sell to the people who helped make us rich," he said.

Still, Strem isn't quite retiring just yet. He said he's going to still work for several more years.

"I'm still at it," he said. "It has been a good career."

But don't tell his employees that. At the end of the ceremony, a group called the "Friends of Strem" presented their boss with a Taylor Made golf bag. And then pulled out a huge check - about 4 feet-by-2 feet - for $1,545 for the Kernwood Country Club for a set of custom-made golf clubs.

After a few moments, Strem said: "You caught me off guard, totally."