Value of loss of stock options grants to be quantified on basis of what likely would have happened

Plaintiff employee was senior executive with defendant employer when he was terminated without cause. Employee was eligible to receive deferred compensation in form of equity in employer, including restricted share units (RSU) and options under long term incentive plan and stock option plan. Motion judge granted employee's motion for summary judgment of his action for relief for breach of employment contract. Employee was entitled to 24-month period of reasonable notice of termination. RSUs and stock options with vesting date within reasonable notice period would have vested in employee in that period had he not been terminated. These bonuses were integral part of employee’s compensation so they were component of his damages for breach of contract. Given absence of language to contrary in grant documents, employee’s termination did not cancel his rights to RSUs and stock options within notice period. Quantification of value of loss of RSUs and stock options grants was to be made on basis of what would have probably happened had employee been employed until end of notice period. Employee had exercised such grants in past so it was likely he would have during notice period at earliest opportunity. Parties made submissions regarding quantification of value of loss of RSUs and stock options. Order accordingly. Having reviewed employee's sales activities, particularly during notice period, damages to which employee was entitled in relation to RSUs and stock options that would have otherwise vested during reasonable notice period should be calculated on basis that employee would have sold resulting shares five months after vesting date.

O'Reilly v. Imax Corporation (2019), 2019 CarswellOnt 2412, 2019 ONSC 1239, M.D. Faieta J. (Ont. S.C.J.); additional reasons (2019), 2019 CarswellOnt 1044, 2019 ONSC 342, M.D. Faieta J. (Ont. S.C.J.).