The parties separated, and the husband subsequently received 245,000 stock options from his employer.
The trial judge included a prorated portion of these options in the husband's net family property, finding they were earned prior to separation.
The trial judge also rejected the husband's expert valuation of his pre-separation options using the Black-Scholes method, instead using an 'if and when' approach based on the actual profit realized when the options were later exercised.
The Court of Appeal upheld the inclusion of the post-separation options but found the trial judge erred in using hindsight to value the options.
The Court held that the Black-Scholes method is an appropriate valuation approach for employee stock options where the underlying stock is publicly traded, and adjusted the equalization payment accordingly.
