Attach the completed month-by-month schedule to every grant letter and keep a copy with the option register. A schedule expressed only in percentages produces arguments about rounding, about which day of the month vesting occurs, and about what happens in a leap year. Numbers and dates settle all three.
Vesting Schedule
Worksheet and standard schedules
Attach the completed month-by-month schedule to every grant letter and keep a copy with the option register. A schedule expressed only in percentages produces arguments about rounding, about which day of the month vesting occurs, and about what happens in a leap year. Numbers and dates settle all three.
| Item | Detail |
|---|---|
| Holder | [NAME], Employee ID [ID] |
| Instrument | [Stock options / Restricted stock units / Founder shares subject to reverse vesting] |
| Grant or agreement date | [DATE] |
| Vesting commencement date | [DATE] |
| Total granted | [NUMBER] |
| Vesting period | [48] months |
| Cliff | [12] months |
| Frequency after the cliff | [Monthly / Quarterly / Annually] |
| Deemed vested at grant | [NUMBER] (credit for prior service, where applicable) |
| Exercise price | ₹ [PRICE] |
| Prepared by and date | [NAME], [DATE] |
1. Conventions
1.1Vesting day. Vesting occurs on the same day of the month as the vesting commencement date. Where a month has no such day, vesting occurs on the last day of that month.
1.2Rounding. Where an instalment produces a fraction, the number vesting is rounded down to the nearest whole unit. Accumulated fractions vest with the final instalment, so that the total vested equals the total granted.
1.3Employment condition. An instalment vests only if the holder is in employment or engagement on the vesting date. Nothing vests after the last working day.
1.4Suspension. Vesting is suspended during unpaid leave or absence exceeding [8] consecutive weeks, other than statutory maternity or paternity leave or absence through illness or injury. On return, subsequent vesting dates are deferred by the period of suspension, and a revised schedule is issued.
1.5Corporate actions. On a bonus issue, split, consolidation or reclassification, the numbers in this schedule are adjusted proportionately and a revised schedule is issued.
2. Standard Schedules
The three schedules below are the patterns the Company uses. Each assumes a grant of 4,800 units so that the arithmetic divides cleanly; scale to the actual grant.
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These notes accompany the template and explain the drafting choices, the compliance points and the mistakes most often made with this document. They appear as a final page in the Word file, intended to be deleted before the document is executed.
A schedule that says "25 per cent after one year, then monthly" leaves three questions unanswered: on which day of the month, how fractions are handled, and what the actual dates are. Every one of those becomes a dispute at exit. Generate the full table with real dates and whole numbers, and attach it.
For stock options there must be a minimum period between grant and vesting, which may not be less than one year. A schedule with a first vesting date inside that period is void as to that tranche. Check 2 on the verification list exists for that reason. Acceleration on death or permanent incapacity is treated differently.
Rounding down each instalment leaves a residue. If it is not swept into the final instalment, the holder never vests the full grant and the register will not reconcile to the pool. Check 1 catches it. This is the single most common arithmetic error in vesting schedules.
A vesting commencement date of the 31st has no counterpart in February, April, June, September or November. State the convention — vesting on the last day of the month where there is no matching day — rather than leaving the schedule to generate impossible dates.
Holders rarely ask about the vesting formula. They ask what happens if they leave in month eighteen, or if the company is sold. Section 4 answers those questions in advance, with numbers. Giving it at grant, rather than at exit, converts a likely argument into an informed decision.
If vesting is suspended for unpaid leave, every subsequent date moves. Issue a revised schedule at that point and file it. Companies that record the suspension in an email and never redo the schedule find, two years later, that nobody can say what has vested.
Where a founder or early employee is credited with vesting for time already served, express it as a number of units vested on day one, not as a percentage. Percentages of a number that later changes through a corporate action produce inconsistent results.
For founder shares, the holder already owns everything and the schedule releases shares from a repurchase right. The arithmetic is identical, but the columns mean the opposite, and the crucial extra column is the repurchase price on each date. Section 5 provides it. Founders consistently misread a standard vesting table as meaning they do not yet own the shares.
The schedule is the working that supports every entry in the option register. When a company is acquired, the acquirer reconstructs vesting from these schedules. Filing them with the register at issue costs nothing; reconstructing them from grant letters and email years later is expensive.
A bonus issue or a share split changes every number in the schedule. Issue revised schedules to all holders at the time, rather than leaving the original in circulation alongside an adjusted register.
Monthly vesting is the market convention and generates forty-eight rows and forty-eight opportunities for a date error. Quarterly vesting after the cliff delivers almost the same economics with a quarter of the administration. For a company without dedicated equity administration, it is worth considering.
Reflects Indian law and market practice current as of {{DATE OF USE}}. The minimum vesting period and the leaver treatment must match the Company’s scheme as approved by its members — check this schedule against that scheme, not against a precedent from another company.
This is a ready-to-use template provided for convenience. Laws and requirements change, and every situation is different — please have it reviewed by a qualified professional (a lawyer, company secretary, or chartered accountant as relevant) before you rely on it.