Contract analysis

I. Introduction and Purpose Calderwood & Harkness LLP represents Cascade Retail Holdings Inc. ("CRH" or the "Company") in the above-referenced covenant-enforcement and trade-secret litigation currently pending before Vice Chancellor Margaret T. Zhao in the Delaware Court of Chancery. We appreciate the Committee's continued engagement on this matter, and we write to provide a detailed summary of one critical dimension

II. Background Summary A. The Departing Employees On February 7, 2025, at approximately 4:47 PM PST, eight senior employees within CRH's Merchandising division (the "Rathore Group") submitted simultaneous resignations to the Company. The coordinated nature and timing of these resignations — delivered in the late afternoon on a Friday — were plainly orchestrated to maximize disruption and minimize the Company's abilit

1. Priya Rathore — Former Senior Vice President, Merchandising. Employment dates: June 3, 2019 through February 7, 2025 (approximately five years and eight months). Ms. Rathore reported directly to CRH's Chief Commercial Officer and oversaw the entirety of CRH's merchandising operations across all product categories, channels, and geographies.

2. Derek Linden — Former Vice President, Hardlines Merchandising. Mr. Linden served CRH for approximately seven years and was responsible for all hardlines category strategy, vendor management, and margin optimization across CRH's brick-and-mortar and digital channels.

3. Sonia Kaczmarek — Former Vice President, Softlines Merchandising. Ms. Kaczmarek served CRH for approximately five years and managed CRH's softlines portfolio, including private-label apparel programs that represented a significant and growing share of CRH's gross margin.

4. Amara Osei — Former Director, Private Label Strategy. Ms. Osei served CRH for approximately four years and was instrumental in developing CRH's proprietary private-label brand architecture, including sourcing relationships, cost modeling, and go-to-market strategies.

5. Brent Halvorsen — Former Director, Seasonal Planning & Analytics. Mr. Halvorsen served CRH for approximately six years and led the development of CRH's proprietary seasonal demand-forecasting models and assortment optimization tools.

6. Lucia Fernandez-Gill — Former Director, Vendor Relations (Domestic). Ms. Fernandez-Gill served CRH for approximately five years and managed relationships with CRH's domestic vendor base, including negotiation of volume discounts, promotional allowances, and exclusive distribution arrangements.

7. Nathan Tsao — Former Senior Manager, eCommerce Merchandising. Mr. Tsao served CRH for approximately three years and was responsible for digital merchandising execution, including product taxonomy, search optimization, and personalization algorithms for CRH's e-commerce platform.

8. Kira Johansson — Former Senior Manager, Category Analytics. Ms. Johansson served CRH for approximately four years and led the Category Analytics team, which produced the category-level performance dashboards, competitive benchmarking analyses, and price-elasticity models relied upon by CRH's senior merchandising leadership. Collectively, the Rathore Group represented the core leadership tier of CRH's Merchandising

III. Equity Forfeiture and Clawback Provisions of the Settlement Agreement A. Overview. The Settlement Agreement provides for equity forfeitures by all eight departing employees in the aggregate amount of $849,500, comprising the following: • $362,500 attributable to Priya Rathore, the former Senior Vice President of Merchandising and the principal defendant in this action; and • $487,000 attributable to the remainin

IV. Mechanics of Implementation A. Cancellation Instructions to Transfer Agent Upon execution of the Settlement Agreement (target date: April 14, 2025), Calderwood & Harkness will transmit formal written instructions to Northland Trust Company, CRH's transfer agent, at its offices at 55 Water Street, New York, NY 10041, directing the following actions: (a) Cancellation of all unvested RSU awards held by each of the e

V. Context Within Overall Settlement Recovery For the Committee's reference, the total economic recovery to CRH under the Settlement Agreement is summarized in the table below. The equity forfeiture and clawback amounts described in this letter represent approximately 8.5% of the Company's total economic recovery. The cash settlement payment of $8,750,000 is payable by Verdana to CRH as a lump sum within thirty (30)

VI. Requested Committee Actions In light of the foregoing, we respectfully request that the Compensation Committee consider and take the following actions at or before its next meeting, ideally in advance of the April 14, 2025 target execution date:

1. Review and consider the equity clawback and forfeiture provisions described in this letter, including the detailed forfeiture calculation for Priya Rathore and the aggregate forfeiture amount for the remaining seven departing employees.

2. Authorize (or ratify, as applicable under the Committee's charter and the terms of the Equity Plan) the forfeiture of unvested RSUs and the clawback of previously vested equity totaling $849,500 in the aggregate across all eight departing employees, consistent with the terms of the Settlement Agreement, the CRH 2018 Omnibus Equity Incentive Plan, and the individual RSU Award Agreements and employment agreements of

3. Authorize CRH management and outside counsel (Calderwood & Harkness LLP) to prepare and transmit formal cancellation and clawback instructions to Northland Trust Company, CRH's transfer agent, upon execution of the Settlement Agreement.

4. Direct that CRH management coordinate with Hargrove & Tillett CPA, PLLC (Denise Wheatley, Lead Audit Partner) and internal tax counsel regarding the appropriate accounting treatment, financial statement adjustments, and any required tax reporting corrections or modifications associated with the clawback of previously vested equity.

5. Note that a Draft Board Resolution ratifying the equity forfeiture actions and the overall settlement terms is being prepared separately by Calderwood & Harkness for the full Board's consideration at the anticipated April 14, 2025 Board meeting, and that the Committee's authorization of the equity-specific actions described herein will be referenced in such resolution. We are available to discuss these requested a

VII. Closing We trust that this letter provides the Compensation Committee with a thorough and actionable summary of the equity clawback and forfeiture provisions of the Settlement Agreement. We are, of course, available to provide any additional information, analysis, or supporting documentation that the Committee may require in connection with its review and deliberations. For the Committee's reference, the followi