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Quick Tips: Equity-Based Executive Compensation

By: Jennifer Mathers McHenry

For anyone who wants to better understand the treatment of equity based executive compensation at law, I find Battiston v Microsoft Canada Inc. to be a very clear roadmap and worth the read for that alone.

My favorite take-aways, though, are:

1. Termination provisions found in stock plan documents which seek to preclude an employee’s right to have unvested awards vest in the event of a termination without cause are “harsh and oppressive”; and

2. Even clear language excluding participation in a plan which is otherwise enforceable will not limit an employee’s rights to ongoing vesting if those clear terms are not brought to the employee’s attention (cameo by Tilden Rent a Car!).

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