Tax Center Global Tax Guide / Glossary / Discussion / About Us
Register Log In
Core Concepts   
Valuation & Expensing   
Underwater Options   
Annotated diagram of Schedule DTax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.

Basics: Vesting

If I remain with the company for the duration of the vesting schedule, is there any way I can lose the benefit of my option?

Yes. You could mistakenly let the options expire without exercising them. You do not have your vested options for life: they have a term (usually 10 years). In addition, some companies have adopted provisions in their plan documents or grant agreements that require employees to forfeit outstanding options or surrender their option gains if they leave to work for a competitor. These provisions are sometimes referred to as noncompetes or clawbacks.

Print this FAQ: Printer icon
Share this FAQ:
Share this article on LinkedIn Share this article on Facebook Share this article on twitter
Prior FAQ in list Return to list Next FAQ in list