Vesting Finance Email

Subject: Understanding Your Vesting Schedule & Stock Options

Dear [Employee Name],

This email provides important information about your vesting schedule and stock options, which are a valuable part of your compensation package at [Company Name]. We believe it's crucial you understand how vesting works so you can maximize the benefits offered to you.

What is Vesting?

Vesting is the process through which you earn full ownership of your stock options or other equity-based compensation over a period of time. Think of it as a gradual transfer of ownership. You don't own the entire grant from day one; rather, you earn portions of it over time as you continue your employment with [Company Name].

Your Vesting Schedule:

Your specific vesting schedule is outlined below:

• Grant Date: [Date of Grant] - This is the date your stock options were officially granted.
• Vesting Start Date: [Vesting Start Date] - This is the date the vesting period begins. Often it is the same as the grant date, but it can be different.
• Vesting Period: [Length of Vesting Period - e.g., 4 years] - This is the total amount of time it takes for your entire grant to vest.
• Vesting Cliff: [Length of Cliff - e.g., 1 year] - A cliff is a period of time you must work before any of your options begin to vest. If you leave the company before the cliff is satisfied, you will forfeit all unvested options. After the cliff is met, a significant portion of your options will vest at once.
• Vesting Frequency: [Frequency of Vesting - e.g., Monthly, Quarterly] - This indicates how often your options vest after the cliff is satisfied. For example, monthly vesting means a portion of your options vests each month.
• Vesting Acceleration (if applicable): [Details of any vesting acceleration clauses, such as in the event of a company sale or termination without cause. If there is none, state "None."]

Example: Let's say you have a 4-year vesting schedule with a 1-year cliff, vesting monthly thereafter. After one year of employment, 25% of your options will vest. Then, for the next three years, approximately 2.08% (1/48th of the total grant) will vest each month.

Why Vesting?

Vesting aligns your interests with the long-term success of [Company Name]. It incentivizes you to contribute to the company's growth and remain committed to our shared goals. It also allows the company to retain valuable talent.

Managing Your Stock Options:

You can view your stock option details, including the number of options granted, vested, and available for exercise, through our stock option management platform: [Link to Platform, e.g., Carta, Shareworks]. This platform also allows you to track your vesting schedule and potentially exercise your options once they are vested.

Exercising Your Options:

Once your options are vested, you have the right to purchase shares of [Company Name] at the pre-determined exercise price outlined in your grant agreement. Please note that exercising your options may have tax implications, and we recommend consulting with a financial advisor to understand the potential consequences.

Leaving the Company:

If you leave [Company Name], any unvested options will be forfeited. You typically have a limited time (usually 90 days) after your termination date to exercise your vested options, after which they will expire. Review your grant agreement for the specific terms related to termination.

Questions?

If you have any questions regarding your vesting schedule, stock options, or the information provided in this email, please don't hesitate to contact [Contact Person/Department - e.g., HR Department, Equity Administration Team] at [Email Address or Phone Number]. We're here to help you understand your compensation and make informed decisions.

Sincerely,

[HR Department/Equity Administration Team]

[Company Name]