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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.