Double Trigger Acceleration on Change in Control Clause Samples
The Double Trigger Acceleration on Change in Control clause provides that certain benefits, such as the accelerated vesting of stock options or equity awards, are only granted if two specific events occur: a change in control of the company and a subsequent qualifying termination of the employee (such as being laid off or resigning for good reason). For example, if a company is acquired and the employee is then terminated without cause within a set period, their unvested equity may immediately vest. This clause is designed to protect employees from losing out on equity compensation due to circumstances beyond their control, while also preventing windfalls if only a change in control occurs without job loss.
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Double Trigger Acceleration on Change in Control. (1) The number of unvested RSUs Recipient would otherwise be entitled to receive pursuant to Section 1(b)(iii) if Recipient were employed through the end of the Third Performance Period shall immediately vest (provided, however, that if vesting occurs pursuant to this Section 1(d)(ii) during or prior to the end of a Performance Period that has not yet ended it will be conclusively presumed that the RSUs would have been at the 100% vesting level for each such unfinished Performance Period, subject to any action taken by the Compensation Committee or the Board of Directors pursuant to clause (1) or (2) of Section 1(d)(iii), including the final paragraph of Section 1(d)(iii)) if a Change in Control (as defined below) occurs and either:
(A) at any time after the Change in Control and on or before the first anniversary of the Change in Control, (i) the Recipient’s employment is terminated by the Company (or its successor) without Cause (as defined below), or (ii) the Recipient’s employment is terminated by the Recipient for Good Reason (as defined below); or
(B) at any time after the Change in Control (i) the Company or the surviving or acquiring entity terminates this Agreement and all similar agreements, including because the achievement of any of the Performance Goals becomes reasonably unable to be determined; Notwithstanding the foregoing, the RSUs may also immediately vest in connection with a sale of the Company as provided in Section 1(d)(iii) below.
(2) For purposes of this Agreement, a “Change in Control” of the Company shall mean the occurrence of any of the following events:
(A) At any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof; provided, however, that the term “Incumbent Director” shall also include each new director elected during such two-year period whose nomination or election was approved by two-thirds of the Incumbent Directors then in office;
(B) Any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of more than fifty percent (50%) of the then outstanding ...
Double Trigger Acceleration on Change in Control. (a) All of the SARs shall immediately vest if a Change in Control (as defined below) occurs and at any time after the Change in Control and on or before the first anniversary of the Change in Control, (i) the Recipient’s employment or service is terminated by the Company (or its successor) without Cause (as defined below), or (ii) the Recipient’s employment or service is terminated by the Recipient for Good Reason (as defined below).
(b) For purposes of this Agreement, a “Change in Control” of the Company shall mean the occurrence of any of the following events:
A. At any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof; provided, however, that the term “Incumbent Director” shall also include each new director elected during such two-year period whose nomination or election was approved by two-thirds of the Incumbent Directors then in office;
B. Any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of more than fifty percent (50%) of the then outstanding Common Stock of the Company;
C. A consolidation, merger or plan of exchange involving the Company (“Merger”) as a result of which the holders of outstanding securities of the Company ordinarily having the right to vote for the election of directors (“Voting Securities”) immediately prior to the Merger do not continue to hold at least 50% of the combined voting power of the outstanding Voting Securities of the surviving corporation or a parent corporation of the surviving corporation immediately after the Merger, disregarding any Voting Securities issued to or retained by such holders in respect of securities of any other party to the Merger; or
D. A sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company.
(c) For purposes of this Agreement, “Cause” shall mean (a) the willful and continued failure to perform substantially the Recipient’s reasonably assigned duties with the Company (or its successor) (other than any such failure re...