Here’s my thinking: An easy way to be generous to your employees without really affecting your bottom line is to allow them to exercise their options immediately upon grant. When they do that, they can then take an 83(b) election with the IRS, which reduces their tax burden. Since they will now own the stock outright, your grant paperwork needs to stipulate a reverse vesting schedule whereby they return stock to the company if they leave before their vesting is complete. In a common scenario, if the employee left before the first year, she would have to return all of the stock she purchased. After that first year, she retains the right to her first year’s worth of stock, but she would have to give back the “unvested” shares if she leaves before four years.