Direct answer
Acquisitions move equity clocks: 280G clean-up votes, double-trigger acceleration, PTEP extensions, and shareholder rules decide the payout. The trade language is in your package, not in the acquirer's standard docs. The 409A valuation trail is in the 409A guide , the AMT test in the AMT guide , the refresher in the refresher guide , and the transfer clocks in the transfer vesting guide .
Updated November 9, 2026 · Reviewed against IRS — tax guidance
Acquisitions move equity clocks: 280G clean-up votes, double-trigger acceleration, PTEP extensions, and shareholder rules decide the payout. The trade language is in your package, not in the acquirer's standard docs.
The Trade Lines
- Clean-up votes: public companies can raise the 3x threshold to 4x the base; private deals rely on disqualification structure (see the 280G guide).
- Double triggers: change + termination pay full acceleration; single triggers pay less. Your package should say which.
- PTEP & acceleration: extended exercise windows and transition-month vesting are the senior asks — the severance math is in the scripts guide and the exercise clock in the exercise guide.
The 409A valuation trail is in the 409A guide, the AMT test in the AMT guide, the refresher in the refresher guide, and the transfer clocks in the transfer vesting guide.
Put the rule into action
Write the letter with the free Severance Package Negotiation Letter generator. The state pages carry the local payout and notice windows, and the application tracker keeps the follow-up date in writing.
Put the rule into action
Ask for the parachute calculation in writing
Section 280G decides a deal payout from two facts you rarely see: your base amount, built from five years of compensation history, and the total deal-related payments measured against three times that base. Ask for the calculation before you sign anything, because the excess above the threshold is disallowed to the company and taxed to you with an excise charge.
- Request the base amount and the years used, in writing, with the compensation lines included.
- Ask whether the deal includes a cutback clause that reduces your payment automatically to stay under the threshold.
- Ask what counts toward the total: cash severance, acceleration, bonuses, retention awards, benefits continuation, and any covenant payments.
- Ask about shareholder ratification. Public-company deals can raise the threshold with a disclosure vote; private deals use a different disqualification structure. Confirm which route the deal is using.
The 280G entry states the mechanics. Put the asks in one letter with the severance negotiation generator, since a release signed at closing can waive award claims you have not yet documented.
Double trigger, exercise window, and transition vesting
Three senior asks move more money in an acquisition than a higher base salary does:
- Double-trigger acceleration. Both a change of control and a qualifying termination pay out; a single trigger pays on closing alone and is worth less if you are retained. Ask which trigger your package uses, in writing.
- Extended post-termination exercise window. The window lives in the plan document, and it sets your tax year. Ask for the exact deadline date, and whether the deal extends it for the transition period.
- Transition vesting credit. If you are terminated months before an anniversary, ask whether the transition period counts as service. That clause decides whether a grant vests.
Print your own schedule with the vesting calculator, then compare the accelerated value against the cash severance you are being offered. The equity vesting entry explains how RSU and option treatment differ at exercise and at vest.
Deal timeline: what to document before closing
Closing compresses everything, so collect the paper early:
- Every award agreement, with grant date, units, strike price, and the exercise window.
- The 409A valuation date behind each grant price, because the valuation supports the tax treatment.
- The parachute calculation, base amount, and any cutback clause.
- The acceleration terms in the merger agreement or your retention letter, quoted exactly.
- The separation papers, if you will be terminated: release scope, benefits continuation, and the treatment of unvested awards.
Watch the tax year: acceleration at closing plus severance in the same year stacks income into one bracket. If you are ISO-heavy, model the alternative minimum tax before you exercise; do not decide on a summary slide. A release at closing often covers award claims, so read the release entry before signing, and keep closing dates and deadlines in the application tracker so the exercise clock does not disappear inside a job search.
| Trigger type | What pays out | Verify in the plan |
|---|
| Single trigger | Acceleration on the change of control alone | Whether retention cancels it |
|---|
| Double trigger | Acceleration after change plus qualifying termination | The definition of qualifying termination |
|---|
| No acceleration | Unvested awards normally forfeit at separation | Transition service credit and the exercise window |
|---|
The live rule text sits on the New York Severance Offset rule page and the New Jersey Severance Offset rule page, along with the Severance Pay definition and the workplace remote reviews guide hub. Confirm there before you put a date or a dollar amount in writing.
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Frequently Asked Questions
- What is the 280G base amount?
- It is the average compensation figure built from five years of history, used to measure whether deal-related payments exceed three times that base. Ask for the base amount and the years used in writing before you sign a closing package.
- Is double-trigger acceleration worth more than a signing bonus?
- Often, for a senior employee with meaningful unvested awards, because it converts a forfeiting grant into paid service time. Compare the accelerated value against the cash offer in the vesting calculator before negotiating base.
- What happens to unvested equity in an acquisition?
- It depends on the merger agreement and your award terms: converted, assumed, accelerated, or forfeited. Ask which, in writing, and confirm the post-termination exercise window, because that deadline sets your tax year.
- Can a shareholder vote change the parachute tax?
- In public-company deals, a disclosure vote can raise the threshold that triggers the excise tax. Private deals use a different disqualification structure. Ask which route your deal is relying on before you accept a cutback.
The valuation line, the exercise window, and the 280G base are plan and IRS numbers, with the base set from five years of compensation history. Confirm the 280G calculation in writing, check the plan for a cutback clause, and confirm the wage-side windows — final pay, PTO, and the pay date — with the state agency named on the state rule pages. Keep the award agreement, the grant date, and the sale receipts in one dated file, and run the schedule in the vesting calculator.
Sources (official record — verify before filing)
IRS — tax guidance