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Become applicable or exercisable. A term mainly used on the context of employee stock ownership or option programs. Employees might be given equity in a firm but they must stay with the firm for a number of years before they are entitled to the full equity. This is a vesting provision. It provides incentive for the employee to perform.


The process by which an employee with a qualified retirement plan and/or stock option becomes entitled to the benefits of ownership, even if he/she no longer works at the company providing the retirement plan or stock option. Vesting occurs after an employee has worked at the company for a certain number of years; once vesting occurs, the benefits of the plan or stock option cannot be revoked.


To give immediate rights in property, even if possession or enjoyment will be delayed until later.The question of when property rights vest is critical to future interests, taxation, and creditors' rights.

References in periodicals archive ?
In addition, in the case of an employees' trust, section 402(b)(4) will annually tax "highly compensated" participants on the increase in value of their vested interests, if the plan's coverage is not sufficiently non-discriminatory.
Other pension plan provisions may also affect how vested benefits are received.
In addition to the debt-free financial instrument of an income share agreement, Vested students will also have access to a premier mentoring program comprised of industry leaders.
In a nonaccount balance plan, the amount deferred in a given year is (1) the actuarial present value of the vested benefit earned during the year and (2) the actuarial present value of any benefit that becomes vested in a later year.
Cash repurchases of vested awards for an amount equal to the estimated fair value of the award at the purchase date don't require you to adjust the previously recognized compensation cost.
Bronx and Manhattan will also be vested within the next month or so.
The participant was 40% vested in his employer's qualified profit-sharing plan when he voluntarily resigned in 1991.
The benefits of electing to be taxed in the year of receipt are twofold: (1) the recipient avoids recognizing subsequent appreciation in the partnership interest as compensation income when the interest becomes vested and (2) any amounts received as partnership distributions are not recharacterized as compensation--the service partner is treated as a partner for purposes of allocating partnership income and loss.
A Federal district court granted Morrell the requested declaratory relief, finding that the health benefits provided under any master agreement were limited to its three-year term and, therefore, were not vested under either the contract or ERISA.
These options would have vested over the next three years at exercise prices of $3.
Asplund will forfeit any portion of the shares not vested at the time that he ceases providing services to ECHO.