Employee equity
Single-trigger and double-trigger vesting acceleration
Compare vesting acceleration triggers, calculate a partial acceleration example, and understand how exit scenarios use the recorded terms.
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Identify the conditions in the agreement
Acceleration changes when otherwise unvested rights become vested. Single-trigger provisions use one specified event; double-trigger provisions require two. A common double-trigger structure links a change of control with a qualifying termination during a defined period.
The agreement determines the events, time window, definitions, and amount accelerated. Cooley explains these distinctions in its guide to vesting acceleration. The words “double trigger” alone do not describe every condition.
Calculate a partial acceleration
Assume an award has 40,000 units, of which 10,000 are vested. Its unvested balance is 30,000. If the applicable provision accelerates 50% of that balance when all required conditions occur, it accelerates 15,000 units, producing 25,000 vested units.
That calculation is 50% of the unvested balance, not 50% of the original award. It assumes no previous exercises, settlements, cancellations, or other changes to the award.
Use the terms in an exit comparison
In Cap Table, record the trigger and acceleration percentage on the award. In Exit scenarios, compare whether unvested awards participate or are cancelled and whether the change-of-control assumption applies.
The model’s double-trigger assumption includes termination at close. It does not independently evaluate a contractual good-reason definition or a later termination window. When all unvested awards already participate, acceleration does not add further participating units.
Separate a modeled case from an actual event
Saving an exit scenario does not change ordinary vesting or record that the trigger occurred. Review the transaction documents and the holder’s circumstances before recording actual changes.
Keep a copy of the assumptions used for the comparison. The same sale price can produce different modeled proceeds when the treatment of unvested awards differs.