ACCELERATION

Some founders and key executive negotiate into their equity arrangements that they will be entitled to some form of acceleration of the vesting of their equity upon the occurrence of a triggering event. Typically, the triggering event is the sale of the Company, but can also be an involuntary termination of employment.

Acceleration triggered solely by the sale of the Company is called “single-trigger” acceleration and results in some or all of the vesting restriction lapsing in connection with the sale. This is designed to reward the employee for his/her contribution to a “successful” outcome for the Company. “Double-trigger” acceleration requires two events to trigger acceleration.