An undefined term in the stock grants was all it took to sink Goeasy's forfeiture defence
A senior executive fired without cause will collect the value of equity his employer insisted he had forfeited, after an Ontario court found the forfeiture language in his stock grants too ambiguous to enforce.
In Khatib v. Goeasy Ltd., released June 16, 2026, Justice Mathen of the Ontario Superior Court of Justice awarded Shadi Khatib, a former senior vice president at the financial services company, eight months of reasonable notice ending June 21, 2020, along with the value of the restricted stock units and share options that had accrued and a bonus set at 40 per cent of his $275,000 base salary.
A recruited executive and a contested equity deal
Khatib joined Goeasy in May 2016 as a senior vice president, recruited from a prior employer where, by his account, he earned a $250,000 US salary plus a bonus of up to 50 per cent. During negotiations he pushed his signing grant of restricted stock units from 2,500 to 5,000, a change the court valued near $100,000. He was dismissed without cause in October 2019, by then the fifth most senior person there.
He sued for wrongful dismissal, seeking 12 months of notice, his full 2019 bonus and a pro-rated bonus through the notice period, the value of his long-term incentive units, and at least $100,000 in bad faith, punitive or moral damages. He also argued Goeasy had induced him to leave secure employment, lengthening his notice.
The company countered that six months was reasonable and that Khatib, a sophisticated party, drove a hard bargain and could not claim he was duped. Justice Mathen rejected the inducement argument, noting the company had considered fifteen candidates and interviewed eight, and that Khatib could have insisted the contract's no-inducement clause be struck but did not.
Eight months, and a bonus that survived termination
On notice, the court landed at eight months, ending June 21, 2020. Khatib had worked at Goeasy three years and five months, a tenure the court treated as neutral, and he found comparable work at Flexiti just over three months later. The court found his description of the role as one of "exceptional scope, complexity and seniority" exaggerated.
The bonus drew a closer fight. The company argued its short-term incentive plan required employees to be actively employed at payout, and that the contract called Khatib only "eligible," not "entitled." The court found the bonus was an integral part of his pay, and that the company could not confirm Khatib received the plan with its forfeiture language at hiring.
Because the plan did not displace the employment agreement, Khatib was awarded his bonus for the whole notice period, calculated at 40 per cent of his $275,000 base salary, covering 2019 and pro-rated months into 2020. The court declined to award more, setting aside a document Khatib found on the trial's last day that he said showed higher payouts.
Why the forfeiture clauses failed
On the equity, Justice Mathen found the grant documents were separate agreements, but their termination provisions could not be enforced because they never defined a key term. As the decision put it, "the forfeiture provisions do not define 'Termination Date,'" and Goeasy's representative witness, its chief people officer, could not define it either. The company also chose not to rely on the agreement's termination provisions.
With the contract silent on incentive units at termination and the grant language ambiguous, the court resolved the gap in Khatib's favour. He keeps the value of units that vested before his notice ended, plus the pro-rated value of units unvested at June 21, 2020. His bid to treat the 2017 share options as vesting in February 2020 failed. Asked if he expected to forfeit the unvested value, he testified, "Of course not."
Khatib's claims for bad faith, punitive and moral damages were dismissed, as was his request for a tax gross-up. Success in the case was divided, and the final figures were left to the parties to calculate. The company conceded the manner of his termination was "not perfect," but the court found no bad faith. Justice Mathen held the company's position ran against the principle that an employee is "entitled to know the consequences of termination at the time of hire," with that burden on the employer.
