Stock option plans hit the courts

An employee may be terminated but rights to stock options can live on
By Peter Israel
|Canadian HR Reporter|Last Updated: 11/13/2002

Stock option plans have become a staple of employment compensation, especially for executives and employees in the technology field. Now options are finding their way into termination disputes and the legal system.

Canadian courts have made it clear that unless companies are extremely careful in the wording of stock option plans, these plans will be interpreted to allow employees dismissed without cause to accrue and exercise their options until the end of the reasonable notice period.

Stock options create an incentive for the employee that is directly tied to the success of the company.