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Vesting Schedule Definition

vesting schedule – n : also vesting requirement; the period of time over which a stock option becomes exercisable. Most stock options vest in a “straight line” fashion (i.e., linearly, or at a constant rate over time) over a set term of typically 3, 4 or 5 years. As an option recipient or grantee satisfies the time requirements (typically linked to employment or service tenure), the option continues to vest incrementally until it is fully vested (i.e., the vesting schedule is 100 percent satisfied). (See Example under stock option.)

Adapted from "The CompanyCrafters Entrepreneur's Dictionary"
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