Stock option blocked

Employee entitled to exercise stock option subsequent to tendering letter of resignation
|Canadian Employment Law Today

On June 17, 1996, Bradley David Katz commenced employment as the manager of information systems with the Royal Pipe Company, a division of Royal Plastics Limited (which became Royal Group Technologies Limited in 1997). On July 26, 1996, as part of his employment contract, Mr. Katz entered into a stock option agreement with his employer.

The stock option agreement gave Mr. Katz the right to purchase 2,000 shares at $20 per share. If he chose to exercise his option, Mr. Katz was to contact Nesbitt Burns who would confirm matters with the employer. Once confirmed Nesbitt Burns would sell the stock at the current price and remit to Mr. Katz the sale price less $20.00 per share. Prior to Jan. 27, 2000, Mr. Katz had not exercised any of his stock option rights.

The stock option agreement contained a provision dealing with termination of employment. In the event that Mr. Katz chose to resign his employment or if his employment was terminated for cause, Mr. Katz lost his right with respect to unexercised options.