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Vesting Schedule

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Vesting Schedule
Schedule setting forth when, and to what extent, options become exercisable or restricted stock or stock units are no longer subject to forfeiture (for example, 20% per year over five years).

Vesting Schedule
The time according to which an option or restricted stock is able to be exercised (in the case of restricted stock, without forfeiture). The vesting schedule is dependent up on the details of the option or restricted stock agreement. See also: Vesting.


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Under the first practice, the employee elects to defer salary and agrees to make the deferral subject to a vesting schedule in order to avoid current income taxation under Sec.
For example, decreased vesting requirements may provide additional pension income to those with intermittent workforce participation who would not qualify for pension benefits under a longer vesting schedule.
Also, the two-year vesting schedule under the new safe harbor provides more of an incentive than the old safe harbor for your employees to continue working for you.
 
 
 
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