This excerpt taken from the MOLX DEF 14A filed Sep 23, 2005.
Subject to the terms of the L-T Plan, a Participant may exercise that part of his or her option that is “vested” or “exercisable” according to a “vesting schedule.” All vesting schedules start with an “initial waiting period” during which no shares are “vested” or “exercisable.” Then, depending upon the vesting schedule, all or a specified portion of the shares subject to the option grant or bonus award are vested and may be acquired. The Committee determines the vesting schedule (which may not be the same). There are three general types of vesting:
“Typical Vesting.” The “initial waiting period” is one year and the option vests or stock bonus becomes distributable in 25% increments during each of the succeeding 4 years, each commencing with the anniversary of the grant. The right to acquire Stock is “cumulative”. This means that, in any given year, a Participant may acquire those shares he or she could have acquired in a previous year, but did not, provided that the option/bonus has not terminated or expired. All options/awards are subject to the Typical Vesting schedule unless otherwise specified in the agreement.
“Other Vesting.” After the “initial waiting period,” a Participant may exercise an option in amounts and at times determined by the Committee at the date of grant/award, provided that the time in which an option/bonus becomes 100% vested cannot exceed 7 years from the date of grant. The vesting schedule is solely within the discretion of the Committee and may vary from option grant to option grant and bonus award to bonus award, provided that the vesting schedule may not be more rapid than Typical Vesting.
“Accelerated Vesting.” Upon the occurrence of certain events, the vesting schedule of an option that has not expired and is not fully (i.e., 100%) vested will accelerate to become immediately 100% vested regardless of the vesting schedule. The events causing accelerated vesting are as follows: