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Chapter 15. Shopping at the Company Stor... > Why ESOPs Are Offered at the Company... - Pg. 151

Shopping at the Company Store 151 You usually can't take your stock and run once the company contributes shares to your account. Companies may want to reward you, but they have learned that the prudent thing to do is ask you to stick around for a while before you become fully vested in the plan. This is supposed to be an incentive plan, and the carrot is the stock. Most companies won't give you the carrot right away. You may be vested only at the rate of 20 percent per year until you are fully vested after five years. By law, you must be fully vested within five to seven years. For What It's Worth Many employees can accrue mucho stock in an ESOP, and you may know that it's not prudent to have most of your retirement eggs in one ESOP basket. If you have 10 years of service and are age 55, you must be given the option to diversify your account by 25 percent. This option continues until age 60, at which time an employee is given a one-time option to further diversify the account up to 50 percent. Distributions To receive your portion of the ESOP, you must adhere to some distribution rules. Very few com- panies allow you to get your shares before age 59½ unless you die, become disabled, or leave the