What is single trigger vesting?

What is single trigger vesting?

Single-trigger vesting acceleration means that the employee (typically a founder or executive) is entitled to acceleration of vesting if one triggering event occurs. There is no hard-and-fast rule that says what this triggering event must be. In many cases, it is the sale or acquisition of the company.

What is single trigger?

Single-trigger acceleration refers to the partial or full acceleration of vesting of someone’s options or stock based on the occurrence of a single event, i.e. that event is the “trigger” for acceleration.

What is a double trigger vesting?

If someone has double-trigger vesting acceleration (commonly referred to as double-trigger acceleration) on their stock or stock options, that typically means the vesting will accelerate if (1) the company is acquired and (2) that person is terminated in connection with or following the acquisition1.

What is double trigger severance?

“Double Trigger Severance Arrangement” means any contract, arrangement, agreement or understanding, whether written or oral, between the Company (or any Affiliate thereof) and any officer or director thereof, pursuant to which the issuance of the Closing Warrant or the consummation of any other transactions …

What is Double Trigger RSU?

Many companies issue double-trigger RSUs. The “Double-trigger” indicates that two events are required before the employee owns the shares. Generally, the first trigger is time-based vesting and the second is a change in control or a liquidation event like an IPO.

What does Double Trigger mean?

Double Trigger means a Change in Control (“first trigger”) and a Qualifying Termination of the executive’s employment by the company without Cause or by the executive with Good Reason (“second trigger”).

Do Double Trigger RSUs expire?

Double-trigger RSU grants at private companies have an expiration date. Typically they expire seven years from grant. The goal is for a liquidity event (tender offer, acquisition, or IPO/direct listing/SPAC merger) to occur before your double-trigger RSU grant expires.

How double triggers work RSU?

What Are Double-Trigger RSUs? Double-trigger restricted stock units are those that aren’t taxable until two specific events occur. This differs from most RSUs provided by public companies, where shares are taxable immediately upon vesting.

What is a single trigger RSU?

In the case of single-trigger RSUs, an employee faces a tax obligation once their shares vest, even if a liquidation event hasn’t happened yet. That means the employee would have to pay a significant tax bill on the value of the vested grant without being able to sell shares to offset the liabilities.

What happens to double-trigger RSUs if you leave?

Quitting with Unvested RSUs means you lose the right to receive company shares. Remember, your company promises to grant you the RSUs only if you stick around for a certain period of time. So if you don’t stick around for that length of time, it’s only fair that you forfeit your right to those shares.

Do Double-Trigger RSUs expire?

What happens to double trigger RSUs if you leave?

Should you sell RSU when they vest?

Sell Them As Soon As They Vest Because RSUs are taxed at the time they vest, there’s no tax advantage for holding on to them. Moreover, investments that are diversified—spread out over many different stocks or bonds—perform better, on average, than investments that are concentrated in one stock.

Should I sell RSUs when they vest?

What is a double-trigger RSU?

Can a company take back vested RSU?

Generally, leaving the company before the vesting date of restricted stock or RSUs causes the forfeiture of shares that have not vested. Exceptions can occur, depending on the terms of your employment agreement.

Should you sell RSUs immediately?

RSU is the most controlled and direct type of compensation given to the employees. Usually, it is recommended to sell the RSU immediately after the vesting period is complete to avoid any additional taxes. Insiders and employees that hold the RSU, need a RSU selling strategy.

Do you lose vested stock if you quit?

Understanding when your awards vest may help you time a resignation. In most cases, vesting stops when you terminate. For stock options, under most plan rules, you will have no more than 3 months to exercise any vested stock options when you terminate.