A stock repurchase agreement is a legal contract between a company and its shareholders that outlines the conditions under which the company may buy back its shares. It helps to protect the interests of both parties by setting forth the specific terms and conditions for when, how and why a repurchase can occur. The business definition of this agreement is one that creates an equitable arrangement for both the company and its shareholders. By having a clear understanding of the responsibilities, benefits and risks associated with this type of agreement, companies are able to ensure that their stock repurchase decisions are made in the best interest of all involved.