Change of Control

A clause in equity agreements that determines what happens to unvested shares when a company is acquired or merges.

A change-of-control (COC) provision in an equity agreement specifies what happens to an employee's unvested stock options or RSUs when the company is acquired, merges, or undergoes another qualifying ownership change. Without protection, employees who receive an acquisition offer shortly before a major vesting date could lose significant unvested equity — an outcome that particularly hurts long-tenured employees and is a major point of negotiation in executive comp packages.

The two main protection types are single trigger and double trigger. Single trigger acceleration vests all or a portion of your equity upon the acquisition itself — regardless of whether you remain employed. Double trigger acceleration vests equity only if two events both occur: (1) a qualifying change of control AND (2) your employment is terminated (or you are constructively dismissed) within a defined window afterward, typically 12–18 months. Double trigger is far more common for employees; single trigger is primarily for C-suite executives and founders.

When a company is acquired, unvested equity can be treated several ways depending on the deal structure: it can be assumed by the acquirer and converted to the acquirer's shares (most employee-friendly), it can be accelerated and paid out, it can be cashed out at the acquisition price, or it can simply be canceled if the deal terms or the equity plan allow it. The treatment is specified in the merger agreement and your equity plan documents — which most employees have never read until the day it matters most.