What happens when options are vested?

If options are vested, the employee can execute these and is often rewarded with depositary receipts. The idea is that an employee receives all options on day one but will receive the full rights to execute these options (buying the underlying depositary receipts) over a set period of time and/or after a certain milestone is hit. A standard vesting stipulation usually looks as follows: the vesting period is four years. After one year the employee will earn 25% of the option rights, then the percentage will increase per month to a total of 100% of the option rights after four years.