Our Cross Option Agreement package is suitable for UK private companies whose shareholders are looking to enter into cross options. Typically, these options are exercisable in the event of the death (or critical illness) of a shareholder.
Pursuant to the agreement, if one shareholder dies, the company (or the remaining shareholders) have the right to purchase the deceased shareholder’s shares (and those of his family members, where appropriate). This is called a 'call' option.
The personal representatives of the deceased shareholder also have the right to require the company (or the remaining shareholders) to purchase the relevant shares. This is a 'put' option.
Where the company is to purchase shares from a shareholder, this is effected by way of a share buyback - either out of profits, or out of capital.
The cross option agreement anticipates that life assurance policies are to be put in place by the shareholders (or by the company), so that there are sufficient funds available to enable the share purchase to take place.
What does our Cross Option Agreement package include?
Telephone Conference - to provide guidance and to take detailed instructions.
Cross Option Agreement - a comprehensive agreement drafted in accordance with your instructions.
Guidance - written in plain English.
Note: Our cross option agreements are suitable for unlisted shares only.