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| As we discussed in the ATEM 6D framework discussion, you could waste your stock options based on tenure or based on performance. |
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| Wasting based on tenure simply means that the options will waste if the employee continues to be an employee on the date of Westing. |
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| Wasting based on performance, however, specifies additional conditions beyond tenure that the employee needs to satisfy before the options can waste. |
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| tenure-wasting is easier to understand and implement. |
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| Performance-wasting is stricter and hence needs more discipline to implement. |
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| But if you believe your vision or the culture you wish to create demands it, then you must do it. |
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| You can use performance-wasting very effectively in certain cases, but you also must be extra careful when you grant options at Western performance. |
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| Let us look at an example of where performance-wasting can be useful. |
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