Written By:
Max Michalczik CFP® | Space & Defense
Kekoa Pfau ChFC® | Space & Defense

Do you keep your equity when you leave a company?

Vested equity is yours. Leaving doesn’t change that. Unvested equity, in almost every case, goes back to the company the day you walk out. Job changes are a constant in defense and aerospace. Contract recompetes change employers. Programs end. Clearance-driven opportunities pull people in new directions. Defense tech startups pivot or get acquired. In almost every one of these scenarios, equity is part of the calculation, and most people don’t think it through carefully enough before making a move.

What happens to unvested RSUs when you quit?

They are forfeited. You get nothing for unvested grants, full stop. This is why your vesting schedule needs to be part of any job change conversation.

If a major RSU vesting event is three weeks away, delaying your start date at a new employer by a month could be worth tens of thousands of dollars. Most new employers will accommodate a reasonable delay if you ask.

At large defense primes like Lockheed Martin and Raytheon, annual RSU grants often vest in the first quarter of the year. If you are thinking about leaving in January or February, check those dates. Leaving in mid-February when a large tranche vests March 1st is an expensive mistake that happens more often than it should.

What happens to vested RSUs when you leave?

Nothing. Vested RSUs have already converted into shares sitting in your brokerage account. They belong to you and your former employer has no claim on them. You can hold them, sell them, or do whatever you want.

How long do you have to exercise stock options after leaving?

Usually 90 days from your last day. After that window closes, the options expire and there is no appeal process.

• Some companies offer longer windows, a year or more, particularly for long-tenured employees. Check your grant agreement.
• Exercising costs real money. Strike price times number of shares, plus whatever taxes are owed.
• ISOs automatically convert to NSOs if not exercised within 90 days of departure, meaning less favorable tax treatment.
• Private company stock has no liquid market. You may be paying to exercise shares you cannot immediately sell.

This is the most common and most costly equity mistake among defense tech and commercial space employees. Someone leaves Anduril or a satellite startup with vested options, gets busy with the new job, and wakes up on day 91 with nothing. Put the exercise deadline on your calendar the day you give notice.

What happens to equity in a contract recompete or transition?

When a defense contract changes hands and employees transition to the new contractor, it is treated the same as a voluntary resignation for equity purposes. Unvested grants are forfeited and the option exercise clock starts.

Contract transitions are a defining feature of defense employment. Unlike private sector moves made by choice, these can happen with short notice and outside your control. Having a clear picture of your equity position at all times, not just when you’re actively job hunting, is basic financial hygiene if you work in this sector.

What should you do before submitting your resignation?

Pull up your grant agreements. Write down every unvested tranche and when each one vests. Then look at the calendar before you pick a last day.

• Identify upcoming vesting dates and factor them into your timing if you can.
• Calculate exactly what it would cost to exercise any vested options, including taxes.
• Understand whether your options are ISOs or NSOs and the post-termination rules for each.
• If you’re at a private company, research whether there are secondary market options before committing to exercise.
• For large amounts, talk to a financial advisor or tax professional first.

---

This content is for educational and informational purposes only and should not be considered personalized investment, tax, or legal advice. The information provided is general in nature and may not apply to your individual circumstances. All investments involve risk, including the potential loss of principal.
The Freyr Group, LLC does not provide legal or tax advice. Any references to tax-related topics are provided for general informational purposes only, and individuals should consult with a qualified tax professional regarding their specific situation.
For additional information, please review our full disclosures.