Death of Shareholder Triggering Event Clause
(Stockholders' Agreement)

Summary

This clause can be included in an agreement between a corporation and its shareholders to mandate that the corporation purchase, and the estate or successors of a deceased a shareholder sell, all of the shares in the corporation upon the death of the shareholder. This clause contains practical guidance and drafting notes. This provision can be included in an agreement between a corporation and its shareholders to require the corporation to purchase the stock owned by a shareholder upon the shareholder's death. The clause compels the corporation to buy, and the deceased shareholder's estate or successors to sell, all of the shares in the corporation that had been owned by the deceased shareholder. For a template stockholders' agreement for a Delaware corporation, see Stockholders' Agreement (DE S Corporation).