Vesting is necessary to acquire company shares through the stock grant, and it is determined separately for each grant. Unless you complete the required service period at your company, or reach the relevant performance target, in most cases stock options will not become exercisable, and restricted stock will not vest and be released to you. If vesting does not occur, you forfeit any right to the stock. A multi-year vesting schedule thus makes the stock grant a long-term incentive by encouraging you to stay at your company and/or meet the necessary performance goals.

See related FAQs for data on common vesting schedules for stock options and for restricted stock.

Alert: You need to carefully follow the exercise procedures and deadlines set up by your company to avoid the forfeiture of your stock options. Review all of your documents and ask questions if anything is not clear.