A "change of control" clause in a contract is designed to protect parties by outlining specific terms and conditions that come into effect when there is a significant shift in ownership or control of one party involved in the agreement, such as through a merger, acquisition, or sale. This clause often permits the other party to terminate the contract, renegotiate terms, or take other defined actions if such a change occurs, ensuring transparency and continuity amid organizational transitions.
Change of Control. Any of the following events: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of 20% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (1) any acquisition directly from the Company; (2) any acquisition by the Company; (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (4) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2.4; and provided, further, that if any Person’s beneficial ownership of the Outstanding Company Voting Securities reaches or exceeds 20% as a result of a transaction described in clause (i) or (ii) above, and such Person subsequently acquires beneficial ownership of additional voting securities of the Company, such subsequent acquisition shall be treated as an acquisition that causes such Person to own 20% or more of the Outstanding Company Voting Securities.
Change of Control Participant. An employee of the Company and its Affiliates who is an officer of the Company in good standing and has been appointed by the Company’s Senior Human Resources Officer to, and remains on, the Corporate Operating Committee, or is otherwise designated by the Committee (or its delegate) as a Change of Control Participant. Individuals may be removed from the Corporate Operating Committee by the Company’s Senior Human Resources Officer by written action or by the Committee through written action, and shall no longer be Change of Control Participants. The Committee may also otherwise act to remove an individual from status as a Change of Control Participant. This Section is subject to the provisions and protections of Section 3.1.
A Change of Control Participant who is a “specified employee” (within the meaning of Section 409A(a)(2)(B)(i) of the Code), as determined in accordance with the methodology established by the Company as in effect on the Date of Termination of such Change of Control Participant.
The second full paragraph on page S-111 under “—Change of Control” is modified as follows: The Company will not be required to make a Change of Control Offer under the following circumstances: (1) upon a Change of Control, if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements described in the 2028 Indenture applicable to a Change of Control Offer made by the Company and purchases all 2028 notes validly tendered and not withdrawn under such Change of Control Offer; or (2) if notice of redemption for 100% of the aggregate principal amount of the outstanding 2028 notes has been given (or, if a Change of Control occurs prior to , 2021, within 60 days thereafter will have been given), pursuant to the 2028 Indenture as described under “—Optional Redemption,” unless and until there is a default in payment of the applicable redemption price.
The first two full paragraphs on page S-109 under “—Change of Control” are modified as follows: If a Change of Control occurs, unless the Company has given (or if a Change of Control occurs prior to , 2021, within 60 days thereafter will have given) notice of redemption of all the 2028 notes as described under “—Optional Redemption,” each Holder will have the right to require that the Company purchase all or any part (in amounts of $2,000 or whole multiples of $1,000 in excess thereof) of such Holder’s 2028 notes pursuant to an offer (the “Change of Control Offer”) on the terms set forth in the 2028 Indenture. In the Change of Control Offer, the Company will offer to purchase all of the 2028 notes, at a purchase price (the “Change of Control Purchase Price”) in cash in an amount equal to 101% of the principal amount of such 2028 notes, plus accrued and unpaid interest, if any, to the date of purchase (the “Change of Control Purchase Date”) (subject to the rights of Holders of record on relevant record dates to receive interest due on the relevant interest payment date). Within 30 days after any Change of Control or, at the Company’s option, prior to such Change of Control but after it is publicly announced, unless the Company has given (or if a Change of Control occurs prior to , 2021, within 60 days thereafter will have given) notice of redemption of all the 2028 notes as described under “—Optional Redemption,” the Company must notify the Trustee and give written notice of the Change of Control to each Holder, by first-class mail, postage prepaid, at the address appearing for such Holder in the security register (or otherwise in accordance with the procedures of DTC or any other depositary).
AND WHEREAS, the Arrangement Agreement requires that, conditional on the consummation of the Arrangement, the Company exercise the Change of Control Redemption Call Right (as defined in the Company Agreement) to redeem all, but not less than all, of the outstanding preferred units of the Company (“Preferred Units”) at the Change of Control Redemption Price (as defined in the Company Agreement);
Change of Control Offer. If a Change of Control Triggering Event occurs, unless the Company has exercised its right to redeem the Notes as described in Article 11, the Company shall be required to make an offer (the “Change of Control Offer”) to each Holder of Notes to repurchase all or, at the Holder’s option, any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Notes on the terms set forth in the Notes. In the Change of Control Offer, the Company shall be required to offer payment in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased to, but not including, the date of repurchase (the “Change of Control Payment”). Within 30 days following any Change of Control Triggering Event, a notice shall be mailed or electronically delivered to Holders of the Notes describing the transaction or transactions that constitutes or may constitute the Change of Control Triggering Event and offering to repurchase the Notes on the date specified in the notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed or electronically delivered (the “Change of Control Payment Date”). The notice shall, if mailed or electronically delivered prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date.
This Change of Control Agreement will be administered, interpreted and construed in compliance with Section 409A, including any exemption thereunder. Each payment hereunder, including each installment payment, will be treated as a separate payment for purposes of Section 409A. With respect to payments subject to Section 409A (and not exempt therefrom), each such payment will be paid as a result of a permissible distribution event, and at a specified time, consistent with Section 409A. The Executive has no right to, and there will not be, any acceleration or deferral with respect to payments hereunder. The Executive acknowledges and agrees that the Company will not be liable for, and nothing provided or contained in this Change of Control Agreement will obligate or cause the Company to be liable for, any tax, interest or penalties imposed on the Executive related to or arising with respect to any violation of Section 409A. For purposes of this Change of Control Agreement, any reference to "termination of employment", "termination" or similar reference will be construed to be a reference to Separation from Service.
Under the Change of Control Agreements entered into with Mr. O’Brien and Ms. Keogh (each referred to as the “Executive”), if the Bank or the Company terminates the Executive’s employment at any time prior to the occurrence of a pending change of control (as defined below) for any reason or for no reason, or if the Executive’s employment terminates due to death, the Bank will pay the Executive or his or her estate earned but unpaid compensation and benefits due under the terms of benefit plans and programs and compensation plans and programs (including bonuses), if any (the “Standard Entitlements”). If the Executive’s employment is terminated at any time for cause (as defined in the Change of Control Agreement) or if the Executive resigns without good reason (as defined in the Change of Control Agreement), the Bank will pay the Executive the Standard Entitlements.
The Change of Control Agreement also contains customary non-solicitation, non-competition and non-disclosure provisions. Payments under the Change of Control Agreement are subject to restrictions of specified applicable banking regulatory requirements, as well as to the Company’s Clawback Policy and any other applicable recoupment law or policy.
A “pending change of control” is defined as the signing of a definitive agreement for a transaction which, if consummated, would result in a Change of Control (as defined in the Change of Control Agreement); or the commencement of a tender offer which, if successful, would result in a Change of Control, and in the event that such transaction or tender offer which constituted a pending change of control is terminated before a Change of Control occurs, the pending change of control will be treated as if it had not occurred following such termination. The Change of Control Agreements will remain in effect until the third anniversary of the date of the respective Change of Control Agreement or, if earlier, the first anniversary of a change of control (as defined in the Change of Control Agreement).
Change of Control Offer. The Change of Control Offer is being made in connection with, and is expressly conditioned upon, the consummation of the Merger. The consummation of the Merger will constitute a “Change of Control” under each of the respective indentures governing the Notes. Following such a Change of Control, Section 415 of the respective indentures governing the Notes requires Tenneco to make an offer to purchase at a purchase price in cash equal to the Change of Control Purchase Price, plus accrued and unpaid interest up to, but not including, the date of purchase. The Company, however, is permitted to make a Change of Control Offer in advance of the Change of Control if a definitive agreement for such Change of Control is in place at the time the offer is made.The Change of Control Offer will expire at 5:00 p.m., New York City time, on July 26, 2022, unless extended or earlier terminated. The Merger is expected to close in the second half of 2022, and the Company intends to extend the expiration time to have the purchase date in the Change of Control Offer coincide with the closing of the Merger. If the requisite consents to approve the proposed amendments with respect to a series of Notes are received (and a supplemental indenture to the related indenture giving effect to the proposed amendments is executed), the Company expects to terminate the Change of Control Offer for such series of Notes.
A “Change of Control” refers to a significant shift in the ownership or management structure of a company. This typically implies a transition wherein a new entity or group gains a controlling interest in the company, potentially affecting company policies, strategies, and management. Such changes can be triggered by mergers, acquisitions, takeovers, or other major corporate transactions.
You should consider addressing Change of Control provisions when drafting or reviewing contracts for situations where shifts in ownership or management could impact contractual obligations or the relationship between the parties. Typically, these provisions are included to protect the interests of stakeholders who may be affected by significant corporate changes, ensuring that they have the opportunity to revisit or terminate contracts if necessary.
When drafting a Change of Control clause, clarity and specificity are key. Here is a basic structure you might follow:
Change of Control: For the purposes of this Agreement, a “Change of Control” shall occur if the ownership of more than 50% of the equity interests in [Company Name] changes, or if there is a change in the effective control of the operations and management of [Company Name]. Upon the occurrence of a Change of Control, [Company Name] shall notify [Counterparty Name] within [number of days] days and [Counterparty Name] shall have the right to [terminate/modify] the agreement upon providing written notice of [number of days].
Change of Control provisions are generally found in:
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