Stock awards are often used by employers to attract, reward and
retain employees. While these tools can be useful to retain talent,
they can be a source of significant liability for employers if they
do not include well-drafted provisions limiting entitlements upon
termination of employment. In recent years, employers have also
been confronted with the possibility that such provisions in bonus,
stock award, or other incentives plans would not be enforced if
they were not brought to the attention of employees.
In a welcome decision for employers, the Ontario Court of Appeal
in Battiston v. Microsoft Canada Inc.
held that an employee who signs an acknowledgement of having read
the employer's stock option agreement will be bound by the
terms of that agreement, including those dealing with entitlements
upon termination of employment, whether the employee actually read
them or not.
