In O’Reilly v Imax Corp ( 2019 ONSC 1239) Justice Faieta found that the plaintiff was entitled to payment for the RSU’s that would have vested over the 24 month notice period. However the issue remained as to when to value those RSUs as presumably the price varied over the period . The Plaintiff said that he would have exercised them as soon as they were vested . The Defendant said that they should replicate what he had done in the past, which was to exercise the RSUs about 13 months after they vested. The judge ruled that the best indicator of what he would have done and he been given reasonable notice was to see what he actually did with the RSU’s that were vested but not sold during the notice period. This led the judge to determine the relevant date as being 5 months from vesting date .
I have two comments:
One : 5 is more or less the midpoint between 0 and 13.
Two: Clearly the value of the RSU’s declined over the notice period. I suspect the legal arguments would have been reversed had the value gone up over the same period.
This decision was recently upheld by the Ontario Court of Appeal ( 2019 ONCA 991)