Vesting Clause
/ˈvɛstɪŋ klɔːz/
Definitions
- (n.) A contractual or statutory provision specifying when a right, interest, or property ownership becomes legally enforceable or fully effective.
The vesting clause determined when the employee's stock options become exercisable.
- (n.) A clause in a trust or will that fixes the time when the beneficiary's interest becomes fixed and enforceable.
Under the vesting clause in the trust, the beneficiary gains full ownership at age 25.
Forms
- vesting clause
- vesting clauses
Related terms
See also
Commentary
Vesting clauses are crucial in defining the precise moment legal rights or ownership interests become non-contingent and enforceable, often used in employment benefits, trusts, and property law.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.