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Constructive Termination

In the context of stock plans, this is a provision in a change-of-control double trigger that sets off the second trigger and thus accelerates the vesting of stock options, restricted stock, or other equity awards. You are not actually terminated by your company (which would also set off the trigger) but are treated in a way that is considered similar to being terminated. The trigger will have to specifically explain the type of situations that would be considered constructive termination, such as voluntary termination after a substantial reduction in duties or responsibilities.

For more on acceleration in M&A, see the FAQs in the section M&A: Impact.

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