As one of the more common shareholder protection arrangements, a cross-option agreement can be set up between the business’s remaining shareholders and the insured shareholder’s estate. Also known as the double option agreement, this will stipulate who will purchase the shares from the insured shareholder’s estate and at what price.
Both parties are therefore given the choice to exercise their option to sell or buy these shares. It is key to note in this agreement that if either party triggers their option to buy or sell the shares, the other party must follow suit.