Unvested

Describing something that hasn't yet fully accrued, been granted ownership of, or become available to the intended recipient. This typically applies to assets, rights, or benefits, often tied to a specific timeframe, performance, or event. It indicates a conditional holding, where full possession remains dependent upon fulfilling certain conditions or waiting for a designated period to elapse. Until then, the holder cannot exercise full control or derive all potential benefits associated with the asset. The term commonly arises in financial, legal, and employment contexts.

Unvested meaning with examples

• Sarah's stock options were largely unvested for the first three years of her employment. She could only access them gradually as she remained at the company. Should she leave before the vesting period ended, she would forfeit the unvested shares. Her primary goal was to make it to the end of the final vesting date. It was a strong incentive to remain working there. After her options vested, she could freely sell them.
• The employee's retirement funds were still unvested after only one year of service. Their company plan required three years of employment before the employee could fully control the funds. This plan encourages employee longevity by incentivising staff to stay at the company for at least a few years. If they left before vesting, only their contributions would go with them. All company matching contributions remained.
• The grant money for the research project remained largely unvested, pending the successful completion of the initial phase of the experiment. Researchers needed to meet benchmarks. If they failed, all funds remaining would be returned. This ensures accountability and allows for course corrections. They worked extremely hard to ensure they were granted ownership of all funds.
• The inheritance designated for the minor child remained unvested until the child reached the age of majority. The money stayed in the control of a trustee, safeguarding the asset. The funds were to be used solely for the child's welfare, according to the terms of the will. If the child were to pass away before they were eligible, the funds would pass to another heir.
• Because the intellectual property rights were unvested, the software developers could not license or sell their creation. They had to resolve ownership issues first before moving to a production environment. They needed to negotiate with several investors. It was critical to clarify the agreement. This was a necessary precursor to any commercialization efforts.