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Subject:   incentive stock option query
Date:   Wed, 5 Jul 2000
From:   Danny

To whom it may concern,

I was wondering, how long is the standard or common Vesting and Holding time period for both the Incentive Stock Options and Employee Stock Purchase Plans? Please help and let me know.

Thank you,
Sincerely,

Danny

Answer

Date:   28 Jul 2000

Hello Danny,

The most common vesting schedules I see for employee stock options are over four or five year periods.

Typically there is a "cliff" vest (20% or 25%) after the first year and then a pro-rata fraction monthly after the first year.

These are only customary and are not legal requirements.

Good luck!

Mike Gray

For more information about incentive stock options, request our free report, Incentive Stock Options - Executive Tax and Financial Planning Strategies.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this answer was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.