What is a change of control clause?

What is a change of control clause?

Also known as change of control. A provision in an agreement giving a party certain rights (such as consent, payment or termination) in connection with a change in ownership or management of the other party to the agreement.

What is a change of control payment?

Change of Control Payments means any payment (including any benefit or transfer of property) in the nature of compensation, to or for the benefit of the Executive under any arrangement which is partially or entirely contingent on a Change of Control, or is deemed to be contingent on a change of control or ownership of …

Is a change of control a transfer?

1. Transfer of Percentage of Company Stock. A change of control typically includes the transfer of a certain percentage of the target company’s issued and outstanding shares from the target company to the acquirer.

Why include a change of control clause?

Change of Control in Creditor Agreements It is common for creditor agreements to include a change of control clause to protect the lender in case the company comes under new ownership. Such clauses may stipulate that the lender.

What triggers a change of control?

Also known as change of control. Not all change of control provisions are triggered by the same action. For example, a change of control may be triggered by a sale of more than 50% of a party’s stock, a sale of substantially all the assets of a party or a change in most of the board members of a party.

Does IPO mean change of control?

The parties acknowledge and agree that an objective of the Company is to maximize value for its shareholders which may include consummating (or participating in the consummation of) a Change of Control or a Qualified IPO.

What happens with change of control?

Change of control happens when a company merges with another company. It doesn’t matter if the target company ends up surviving the merger or not. Other events. This can include events such as consolidations, reorganizations, or other transactions where more than half of the board members change.