A change of control provision is a clause in a contract, employment agreement, or financing document that gets triggered when a company is acquired or a majority of its ownership changes hands, altering rights, obligations, or vesting as a result.
In an employment agreement, this is often what triggers vesting acceleration for an executive. In a commercial contract, it might let a vendor or customer terminate the agreement if the company they're doing business with gets acquired by a competitor, protecting them from being contractually bound to a company they never agreed to work with.
Reviewing every material contract for change of control provisions before a sale process starts is a standard part of diligence prep, since a key customer or vendor contract that terminates automatically on an acquisition can materially affect what a buyer is willing to pay.
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