Often stock and stock options are granted pursuant to a vesting schedule. This means that the grantee does not own the stock or have the right to buy stock (for options) on day one, but rather the stock/options are restricted for some period of time. Typically restrictions gradually lapse over 3 or 4 years with a one year cliff period. This means that the stock/options are fully restricted for the first year. Companies do this to ensure that you remain with the company for at least a year before you get any equity ownership. Thereafter, you get an increasing equity interest or the right to buy a piece of the company over the remaining vesting term.
Answered 1 year ago by Mary-Alice Brady
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