Constructive Termination Option Acceleration Clause Samples
The Constructive Termination Option Acceleration clause allows a party to accelerate the exercise of a termination option under certain triggering events, even if formal termination has not yet occurred. In practice, this means that if specific conditions—such as a material breach or insolvency—arise, the affected party can treat the contract as if it has been terminated and immediately enforce rights that would otherwise only be available after termination, such as payment of exit fees or release from obligations. This clause is designed to protect parties from delays or uncertainties in the formal termination process, ensuring they can promptly secure their contractual remedies when a counterparty's actions undermine the agreement.
Constructive Termination Option Acceleration. (a) In the event of a Covered Termination of Executive’s employment prior to or more than twelve (12) months following the effective date of a Change of Control, the vesting and/or exercisability of each of Executive’s outstanding Stock Awards shall be automatically accelerated on the date of termination as to the number of Stock Awards that would vest over the twelve (12) month period following the date of termination had Executive remained continuously employed by the Company during such period.
(b) In the event of a Covered Termination of Executive’s employment within twelve (12) months following the effective date of a Change of Control, the vesting and/or exercisability of one hundred percent (100%) of Executive’s outstanding Stock Awards shall be automatically accelerated on the date of termination.