Change of Control
Commercial agreements may include “change of control” provisions, such that upon the occurrence of a change of control of one the parties to the agreement, the agreement may terminate, or approval may be required prior to a transfer to a successor or assign. Securities also may include change of control provisions. A change of control may trigger a redemption. Certain financing transactions by public companies that would result in a change of control may require a shareholder vote.
There is no uniform definition of a “change of control.” A change of control may include a sale of all or substantially all of a company’s assets, a merger with another company, the transfer of a certain percentage of the company’s issued and outstanding shares to an acquirer, as well as circumstances that result in more than 50% of the board members changing or a change in shareholders who have the right to elect more than 50% of the board.