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Lesson 16. Frequently Asked Questions > Selling My Stock - Pg. 84

Frequently Asked Questions 84 Answer: There are three types of vesting schedules that companies can use, although there may be variations on the three. How companies design vesting schedules is their decision with no par- ticular set of rules to follow. The three types are: 1. Staged vesting. --This is where a percentage of the options vest at the completion of certain time or performance milestones. For example, you could vest at the rate of 25 percent each year for four years. Cliff vesting. --This type of vesting waits for a time or performance milestone, then all options vest at once. For example, the options vest at the end of three years of service. Immediate vesting. --This is a form of cliff vesting. The options grant and vest simultaneously. 2. 3. Question: Are vesting schedules and numbers of options negotiable? Answer: They might be if the option plan doesn't have specific language about vesting and the number of options. There is no rule that says every employee must have the same schedule. However, companies use broad-based plans to avoid negotiating with every employee, so unless you are an executive or some highly skilled technical person, it is unlikely you will negotiate a sep- arate deal. Tip Many things are negotiable when joining a new company, but don't expect the impossible. Bargaining units and unions can negotiate on behalf of the workers they represent for a plan that may be unique to those workers. Question: What is the possibility of negotiating an accelerated vesting schedule? Answer: Some workers who take early retirement or leave due to job cutbacks can always negotiate the severance package. However there are some accounting ramifications that the company needs