When key people leave before they have satisfied their vesting agreement,a portion of their stock is retained by the company and can be made available to others.

Question

Quizplus · Accepted Answer

This is known as a "clawback" provision and is common in vesting agreements. It allows the company to maintain a portion of the unvested stock if the employee leaves before fulfilling their vesting requirement. This retained stock can then be used for other purposes or awarded to other employees.

When Key People Leave Before They Have Satisfied Their Vesting