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Lesson 4. All About Vesting, Lock-Ups, etc. - Pg. 16

16 Chapter 4. All About Vesting, Lock-Ups, etc. In this lesson, you will learn about vesting of options and lockups and the role they play in deter- mining the value of your employee stock options. Vesting Vesting is simply the rights an employee acquires by working for a company for a specific length of time. Companies frequently tie the right to participate in certain benefit programs such as stock option programs and pension plans to a vesting schedule. A vesting schedule states the length of time an employee needs to be employed to earn rights to the benefit programs. For example, a company may require three years of continuous, full-time employment to be eligible for the pension plan. The company may require you to complete the full vesting schedule before any benefit is accrued. Using the preceding example, the company may require the employee to complete the three-year