1038-00006 · Calderwood & Harkness LLP · Equity & Compensation

draft-board-resolution-settlement.docx DOCUMENT Finance & Banking

39 / 79 ← → ✕

RESOLUTIONS OF THE BOARD OF DIRECTORS OF CASCADE RETAIL HOLDINGS INC.

Adopted by Unanimous Written Consent in Lieu of a Special Meeting

April 14, 2025

Ratification of Settlement Terms and Authorization of Execution of Standstill and Settlement Agreement in Connection with C.A. No. 2025-0198-MTZ (Delaware Court of Chancery)

The undersigned, being all of the members of the Board of Directors (the "Board") of Cascade Retail Holdings Inc., a Delaware corporation (the "Company" or "CRH"), acting pursuant to Section 141(f) of the General Corporation Law of the State of Delaware, as amended (the "DGCL"), which permits action by the board of directors of a Delaware corporation without a meeting if all members of the board consent in writing or by electronic transmission, hereby adopt the following recitals and resolutions by unanimous written consent, effective as of April 14, 2025:

RECITALS

WHEREAS, CRH is a corporation duly organized and existing under the laws of the State of Delaware, with its principal executive offices located at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119, and the Company's shares of common stock are publicly traded on the Nasdaq Stock Market under the ticker symbol "CRHL" (Employer Identification Number 91-2847351); and

WHEREAS, on or about February 7, 2025, eight senior employees of the Company's merchandising division resigned from their positions with the Company simultaneously, in what the Company believes to have been a coordinated departure orchestrated by Priya Rathore, the Company's former Senior Vice President, Merchandising, for the purpose of joining Verdana Commerce Group, Inc. ("Verdana"), a direct competitor of the Company incorporated under the laws of the State of Delaware and headquartered at 400 Christiana Gateway, Suite 700, Wilmington, Delaware 19801. The eight departing employees (collectively, the "Rathore Group") are: (1) Priya Rathore, (2) Derek Linden, (3) Sonia Kaczmarek, (4) Amara Osei, (5) Brent Halvorsen, (6) Lucia Fernandez-Gill, (7) Nathan Tsao, and (8) Kira Johansson. Each member of the Rathore Group was, at the time of his or her resignation, party to an employment agreement with the Company containing restrictive covenant provisions, including non-competition, non-solicitation of employees and business partners, and confidentiality obligations, each of which was governed by the laws of the State of Delaware; and

WHEREAS, the Company's merchandising division is a critical business unit, accounting for approximately $2.3 billion in gross merchandise value in the fiscal year ended January 31, 2025 ("FY2024"), against total Company revenue of approximately $6.82 billion for the same period. The members of the Rathore Group, by virtue of their senior positions within the merchandising division, had direct access to proprietary and confidential information of the Company, including, without limitation, vendor negotiation playbooks, seasonal buying algorithms, private-label sourcing strategies, customer segmentation data and analytics, margin optimization models, and the Company's confidential five-year category expansion roadmap known internally as "Project Ridgeline," which constitutes some of the Company's most competitively sensitive strategic planning material; and

WHEREAS, a forensic investigation conducted by Pinnacle Forensics LLC ("Pinnacle Forensics"), a nationally recognized digital forensics firm retained by the Company, confirmed through analysis of the Company's data loss prevention logs, endpoint detection records, and cloud-access audit trails that approximately 14,327 files (totaling approximately 2.8 gigabytes of data) were downloaded from the Company's corporate information systems to personal cloud storage accounts associated with members of the Rathore Group during the period between January 10, 2025 and February 4, 2025. The exfiltrated files included, among other things, Project Ridgeline presentations (including five-year financial projections and market entry analyses), vendor negotiation term sheets reflecting pricing and volume commitments, private-label cost models containing supplier margins and landed-cost calculations, and customer segmentation data incorporating behavioral analytics and lifetime-value metrics. The timing and pattern of the data downloads strongly suggest that the exfiltration was systematic, deliberate, and coordinated in advance of the Rathore Group's collective departure; and

WHEREAS, in response to the coordinated departure and suspected data exfiltration, the Company retained Calderwood & Harkness LLP ("C&H") as outside litigation, labor and employment, and trade-secret counsel, effective February 18, 2025 (C&H Matter No. 1038-00006). The engagement is led by Bernard Crawford, Partner, with Renata Vasquez, Partner, James Underwood, Senior Associate, and Devon Archer, Associate, serving as the principal members of the engagement team. In addition to C&H, the Company engaged the following advisors in connection with the matter: Pinnacle Forensics LLC for forensic technology analysis and digital evidence preservation; Aurelian Investigations Group Inc. for private investigative services, including the identification and documentation of the circumstances surrounding the coordinated recruitment of the Rathore Group by Verdana; and Veltrano Consulting Group LLC, led by Dr. Franklin Oberg, for the preparation of economic damages analyses and expert testimony relating to the Company's losses arising from the misappropriation of trade secrets and breach of restrictive covenants; and

WHEREAS, on March 5, 2025, acting on the recommendation of the General Counsel and C&H, the Company filed a Verified Complaint and Motion for Temporary Restraining Order and Preliminary Injunction in the Court of Chancery of the State of Delaware, captioned Cascade Retail Holdings Inc. v. Rathore et al., C.A. No. 2025-0198-MTZ, before Vice Chancellor Margaret T. Zhao (the "Court"). The Verified Complaint asserted the following claims: (1) breach of restrictive covenant against each member of the Rathore Group; (2) breach of confidentiality obligations against each member of the Rathore Group; (3) misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001–2009 ("DUTSA"), against all defendants; (4) tortious interference with contractual relations against Verdana; and (5) civil conspiracy against all individual defendants and Verdana; and

WHEREAS, on March 7, 2025, following an expedited hearing at which the Company presented testimony and evidence demonstrating immediate and irreparable harm, the Court granted the Company's Motion for a Temporary Restraining Order (the "TRO"), restraining all eight individual defendants from commencing employment in any merchandising-related role at Verdana for a period of fourteen (14) days, pending a hearing on the Company's Motion for Preliminary Injunction. As a condition of the TRO, the Company was required to post, and did post, an injunction bond in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000) through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419); and

WHEREAS, on March 18, 2025, the parties participated in a mediated settlement session conducted before the Honorable Philip Ashford (Ret.), through Meridian ADR Services LLC (Reference No. Meridian-2025-0318-CRH), at which counsel for all parties and principals were present. As a result of the mediation and subsequent discussions, on March 20, 2025, the parties reached a framework for settlement of the litigation. On March 21, 2025, at the request of all parties and with the consent of the Court, the preliminary injunction hearing was adjourned by stipulation, and the Court entered a Consent Interim Order maintaining the status quo during the settlement documentation period, including the continuation of temporary restrictions on the Rathore Group's employment activities at Verdana in the three identified product categories; and

WHEREAS, between March 24, 2025 and April 11, 2025, C&H, together with Whitfield, Nygaard & Doyle LLP (counsel to the Rathore Group, led by Catherine Nygaard, Partner) and Blackhall & Soren LLP (counsel to Verdana, led by Gavin Blackhall, Partner), negotiated and documented the terms of a definitive settlement agreement titled "Standstill and Settlement Agreement" (the "Settlement Agreement"), which is attached hereto as Attachment 1. The negotiations involved extensive discussions regarding the scope and duration of modified restrictive covenants, data return and destruction protocols, economic terms, compliance monitoring mechanisms, and the form of a stipulated consent order to be filed with the Court; and

WHEREAS, Verdana (EIN 51-3982647) is a privately held Delaware corporation whose majority equity stake is held by Greystone Capital Partners, LP, through Greystone Capital Fund VII, LP (vintage 2022; $8.5 billion in total committed capital; Managing Partner Elliot Westbrook). Greystone acquired its majority stake in Verdana in the third quarter of 2023 at an enterprise value of approximately $2.4 billion. Verdana directly competes with CRH in twenty-eight (28) overlapping product categories and publicly announced in October 2024 a "transformational growth initiative" targeting $4 billion in annual revenue by 2028. The Company believes that Greystone provided the financial resources that enabled Verdana to recruit the Rathore Group through the offer of aggregate sign-on bonuses of approximately $6,200,000, and that the recruitment was a deliberate strategic effort to accelerate Verdana's growth initiative by acquiring CRH's proprietary merchandising expertise and trade secrets; and

WHEREAS, throughout the pendency of this matter, the Company's General Counsel, Theresa Yun-Park, and the Responsible Partner at C&H, Bernard Crawford, have kept the Board and its relevant committees informed of all material developments, including through written memoranda, telephonic briefings, and secure electronic communications. Specifically, the General Counsel notified Dr. Lorraine Stahl, Independent Director and Chair of the Audit Committee, regarding the litigation contingency accrual, which was originally estimated at $3,500,000 for the first quarter of fiscal year 2025 ("Q1 2025"). The Company's Chief Executive Officer, Marcus Langford, and Chief People Officer, Roland Ashby, have participated in the oversight and strategic management of the matter throughout. The Board has reviewed and considered the Memorandum to CRH Board of Directors re: Settlement Summary and Recommendation, dated April 10, 2025, prepared by C&H (attached hereto as Attachment 5), which sets forth a detailed analysis of the merits of the Company's claims, the risks associated with continued litigation, the projected costs of a trial, the terms of the proposed Settlement Agreement, and C&H's recommendation that the Board approve and authorize execution of the Settlement Agreement; and

WHEREAS, the Settlement Agreement provides for the following material terms and conditions:

A. Modified Non-Competition Obligations. Priya Rathore shall be subject to a twelve (12)-month non-competition covenant (reduced from the original eighteen (18)-month period set forth in her employment agreement) running from February 7, 2025 through February 6, 2026, limited in scope to three (3) specific product categories: home goods, seasonal décor, and private-label apparel (rather than the broader restriction covering all retail merchandising activities as originally provided). The remaining seven (7) members of the Rathore Group shall each be subject to nine (9)-month non-competition covenants (reduced from the original twelve (12)- to eighteen (18)-month periods set forth in their respective employment agreements) in the same three (3) product categories, running from February 7, 2025 through November 6, 2025.

B. Non-Solicitation of Employees. All eight (8) defendants shall be subject to eighteen (18)-month non-solicitation covenants prohibiting the solicitation of any CRH employee, running from February 7, 2025 through August 6, 2026.

C. Non-Solicitation of Vendors. All eight (8) defendants shall be subject to twelve (12)-month non-solicitation covenants prohibiting the solicitation of any of CRH's top fifty (50) vendors (measured by aggregate annual spend), running from February 7, 2025 through February 6, 2026. The list of covered vendors is set forth in Exhibit C to the Settlement Agreement.

D. Data Return and Destruction. All data exfiltrated from the Company's systems shall be returned to the Company or certified destroyed within ten (10) business days following execution of the Settlement Agreement. The certification of destruction shall be made under oath by each member of the Rathore Group individually and by a duly authorized officer of Verdana. In addition, Verdana shall permit an independent forensic audit of its information systems, to be conducted by Pinnacle Forensics LLC (Dr. Rajiv Anand, engagement lead), at Verdana's sole expense, subject to a cap of One Hundred Seventy-Five Thousand Dollars ($175,000). The protocol for the data return, destruction, and forensic audit is set forth in Exhibit B to the Settlement Agreement.

E. Monetary Terms — Cash Settlement. Verdana shall pay to CRH a lump-sum cash settlement payment of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000) within thirty (30) days of execution of the Settlement Agreement, by wire transfer of immediately available funds to an account designated by the Company.

F. Equity Forfeitures. Priya Rathore shall forfeit equity awards with an aggregate value of Three Hundred Sixty-Two Thousand Five Hundred Dollars ($362,500), comprising: (i) One Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($181,250) representing the unvested fourth tranche of her restricted stock unit ("RSU") award originally granted on March 15, 2021, with a total grant value of Seven Hundred Twenty-Five Thousand Dollars ($725,000), vesting ratably over four (4) years at twenty-five percent (25%) per year (three tranches having previously vested (75%), with the fourth tranche (25% = $181,250) remaining unvested at the time of her departure); and (ii) One Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($181,250) representing a clawback of the value of the final vested tranche of such RSU award, triggered under the for-cause clawback provision of Section 8(d) of her Employment Agreement, which provides for clawback of equity compensation upon a material breach of restrictive covenant obligations. The remaining seven (7) members of the Rathore Group shall forfeit equity awards with an aggregate value of Four Hundred Eighty-Seven Thousand Dollars ($487,000), in the individual amounts set forth in the settlement worksheet attached to the Settlement Agreement. The total aggregate equity forfeitures under the Settlement Agreement are Eight Hundred Forty-Nine Thousand Five Hundred Dollars ($849,500).

G. Litigation Cost Reimbursement. Verdana shall reimburse CRH Four Hundred Twenty-Five Thousand Dollars ($425,000) toward the Company's litigation costs incurred in connection with C.A. No. 2025-0198-MTZ, payable concurrently with the cash settlement payment described in Section E above.

H. Total Economic Recovery. The total economic recovery to CRH under the Settlement Agreement is Ten Million Twenty-Four Thousand Five Hundred Dollars ($10,024,500), consisting of: (i) the cash settlement payment of $8,750,000; (ii) the Rathore equity forfeiture of $362,500; (iii) the aggregate other equity forfeitures of $487,000; and (iv) the litigation cost reimbursement of $425,000.

I. Compliance Monitor. The parties shall appoint Aldwyn Compliance Solutions LLC, with offices at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, as an independent compliance monitor (the "Monitor") for a twelve (12)-month term. The total cost of the Monitor is estimated at Three Hundred Sixty Thousand Dollars ($360,000), to be borne sixty percent (60%) by Verdana (Two Hundred Sixteen Thousand Dollars ($216,000)) and forty percent (40%) by CRH (One Hundred Forty-Four Thousand Dollars ($144,000)). The scope of the Monitor's engagement shall include quarterly verification of compliance with the modified non-competition covenants, non-solicitation covenants, and data-destruction obligations set forth in the Settlement Agreement and the Consent Order.

J. Mutual Non-Disparagement. The Settlement Agreement includes a standard mutual non-disparagement clause among CRH, each member of the Rathore Group, and Verdana, the form of which is set forth in Exhibit E to the Settlement Agreement.

K. Consent Order. The parties shall file a stipulated Consent Order with the Delaware Court of Chancery incorporating the modified restrictive covenant terms and data-destruction obligations, and the Court shall retain jurisdiction for purposes of enforcement of the Consent Order during the twelve (12)-month compliance monitor period.

L. Dismissal. A Stipulation for Dismissal with Prejudice of C.A. No. 2025-0198-MTZ shall be filed with the Court at the conclusion of the twelve (12)-month compliance monitor period (anticipated to expire on or about April 14, 2026), contingent upon full compliance with all terms and conditions of the Consent Order and the Settlement Agreement as confirmed by the Monitor.

M. Injunction Bond. The injunction bond in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000) (Bond No. BSC-2025-TRO-04419, issued by Broadview Surety Corp.) shall be released upon entry of the Consent Order by the Court.

N. Attorneys' Fees. Each party shall bear its own attorneys' fees and costs incurred in connection with C.A. No. 2025-0198-MTZ and the negotiation of the Settlement Agreement, except as otherwise provided in Section G above regarding Verdana's reimbursement of Four Hundred Twenty-Five Thousand Dollars ($425,000) toward the Company's litigation costs.

WHEREAS, C&H has estimated that the Company's total legal fees and expenses through the closing of the settlement and the filing of the Consent Order will be approximately One Million Eight Hundred Fifty Thousand Dollars ($1,850,000), consisting of the following: Bernard Crawford, Partner, at $1,350 per hour, approximately 220 hours ($297,000); Renata Vasquez, Partner, at $1,275 per hour, approximately 180 hours ($229,500); James Underwood, Senior Associate, at $785 per hour, approximately 640 hours ($502,400); Devon Archer, Associate, at $625 per hour, approximately 820 hours ($512,500); plus expenses (including court reporting, document review technology, expert witness fees, travel, and miscellaneous) of approximately $308,600; and

WHEREAS, the Company's $750 million revolving credit facility with Keypoint National Bank, N.A., as administrative agent (the "Credit Facility"), contains a material litigation reporting covenant set forth in Section 6.02(c) of the Credit Agreement dated as of September 12, 2023, as amended (the "Credit Agreement"), which requires the Company to promptly notify the administrative agent of any material litigation or proceedings that could reasonably be expected to have a Material Adverse Effect (as defined in the Credit Agreement). The Company provided initial notification to Keypoint regarding the filing of C.A. No. 2025-0198-MTZ, and notification of the settlement resolution must be provided to Keypoint confirming that no continuing material adverse effect exists as a result of the litigation or the settlement; and

WHEREAS, the Company has considered, with the advice of C&H, whether the settlement requires disclosure under Item 8.01 of Form 8-K (Other Events) or as a subsequent event in the Company's Quarterly Report on Form 10-Q for Q1 2025, taking into account the Company's total annual revenue of approximately $6.82 billion, its approximate market capitalization of $4.1 billion, and applicable Securities and Exchange Commission guidance regarding materiality thresholds for litigation settlements. The Company's General Counsel and C&H will make a final determination regarding the appropriate form and timing of public disclosure in consultation with the Company's independent auditors; and

WHEREAS, Northland Trust Company, the Company's transfer agent, with offices at 55 Water Street, New York, New York 10041, will need to be directed to cancel the applicable unvested RSU awards and process the clawback of vested shares relating to Priya Rathore and the other seven (7) former employees in accordance with the equity forfeiture provisions of the Settlement Agreement and the terms of the Company's Amended and Restated 2019 Equity Incentive Plan; and

WHEREAS, Hargrove & Tillett CPA, PLLC, the Company's independent registered public accounting firm (Lead Audit Partner: Denise Wheatley), has been made aware of the litigation contingency accrual established for FY2024 and Q1 2025 disclosure purposes in connection with C.A. No. 2025-0198-MTZ, and such accrual will need to be updated to reflect the terms of the settlement, including the reversal of any excess accrual and the recognition of settlement proceeds in the appropriate accounting period; and

WHEREAS, the Board has carefully considered the terms of the Settlement Agreement, the recommendations set forth in the Memorandum to CRH Board of Directors re: Settlement Summary and Recommendation, dated April 10, 2025, the advice of the General Counsel and C&H, and the input of the Audit Committee, and has determined, in the exercise of its business judgment and fiduciary duties, that the terms of the Settlement Agreement are fair, reasonable, and in the best interests of the Company and its stockholders, taking into account, among other things: (i) the total economic recovery of $10,024,500; (ii) the enforceable modified restrictive covenants and compliance monitoring framework; (iii) the comprehensive data return and destruction protocol; (iv) the avoidance of the costs, distraction, and uncertainty of continued litigation; and (v) the preservation of the Company's ability to protect its trade secrets and competitive position going forward.

RESOLUTIONS

NOW, THEREFORE, BE IT RESOLVED, that the Board hereby approves and ratifies the terms and conditions of the Standstill and Settlement Agreement among Cascade Retail Holdings Inc., Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, Kira Johansson, and Verdana Commerce Group, Inc., substantially in the form presented to the Board and attached hereto as Attachment 1, including all Exhibits thereto (Exhibit A: Modified Restrictive Covenant Terms; Exhibit B: Data Return and Destruction Protocol; Exhibit C: List of Top 50 CRH Vendors (by Aggregate Annual Spend); Exhibit D: Form of Compliance Monitor Engagement Letter; and Exhibit E: Mutual Non-Disparagement Provisions), and the Board hereby determines that the Settlement Agreement, and all transactions contemplated thereby, are fair, reasonable, and in the best interests of the Company and its stockholders.

RESOLVED FURTHER, that the Chief Executive Officer, Marcus Langford, and the General Counsel, Theresa Yun-Park, each acting individually or together, are hereby authorized and directed, in the name of and on behalf of the Company, to execute and deliver the Settlement Agreement and all related documents, instruments, agreements, certificates, and undertakings, including but not limited to the Stipulation of Settlement and Proposed Consent Order to be filed with the Delaware Court of Chancery in Cascade Retail Holdings Inc. v. Rathore et al., C.A. No. 2025-0198-MTZ, in substantially the form attached hereto as Attachment 2, with such changes, modifications, or amendments thereto as the executing officer may approve, such approval to be conclusively evidenced by such officer's execution and delivery thereof.

RESOLVED FURTHER, that the Company is hereby authorized to receive the lump-sum cash settlement payment of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000) from Verdana Commerce Group, Inc. within thirty (30) days of execution of the Settlement Agreement, together with the litigation cost reimbursement of Four Hundred Twenty-Five Thousand Dollars ($425,000), for a total cash recovery of Nine Million One Hundred Seventy-Five Thousand Dollars ($9,175,000), and the Chief Financial Officer of the Company is authorized to designate the wire transfer instructions and bank account for receipt of such funds and to take all actions necessary to process and record such receipt in accordance with the Company's accounting policies and applicable generally accepted accounting principles.

RESOLVED FURTHER, that the Board hereby ratifies and approves the following equity forfeitures under the Settlement Agreement, and determines that such forfeitures are consistent with, and authorized by, the terms of the Company's Amended and Restated 2019 Equity Incentive Plan and the applicable award agreements and employment agreements:

(a) Priya Rathore: forfeiture of equity awards with an aggregate value of Three Hundred Sixty-Two Thousand Five Hundred Dollars ($362,500), comprising (i) One Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($181,250) representing the cancellation of the unvested fourth tranche of her RSU award originally granted on March 15, 2021 (total grant value of $725,000; four-year ratable annual vesting at 25% per year; three tranches vested (75%); fourth tranche unvested (25% = $181,250)); and (ii) One Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($181,250) representing the clawback of the value of the final vested tranche of such RSU award, triggered under the for-cause clawback provision of Section 8(d) of Ms. Rathore's Employment Agreement upon her material breach of restrictive covenant obligations;

(b) Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson: aggregate equity forfeiture of Four Hundred Eighty-Seven Thousand Dollars ($487,000), in the individual amounts set forth in the settlement worksheet attached to the Settlement Agreement; and

The Chief Executive Officer and the General Counsel are hereby authorized and directed to cause Northland Trust Company, the Company's transfer agent, to cancel the applicable unvested RSU awards and to process the clawback of vested shares, as applicable, in accordance with the terms of the Settlement Agreement and the Company's equity plans and award agreements, and to execute and deliver such instructions, letters of direction, and other documents as may be required by Northland Trust Company to effectuate such cancellations and clawbacks.

RESOLVED FURTHER, that the Chief Executive Officer and the General Counsel are hereby authorized and directed to cause C&H to prepare, finalize, and file the Stipulation of Settlement and Proposed Consent Order with the Delaware Court of Chancery in C.A. No. 2025-0198-MTZ, incorporating the modified restrictive covenant terms and data-destruction obligations set forth in the Settlement Agreement, and to consent, on behalf of the Company, to the Court's retained jurisdiction for purposes of enforcement of the Consent Order during the twelve (12)-month compliance monitor period, and to take all actions and execute all documents necessary or appropriate in connection therewith.

RESOLVED FURTHER, that the Chief Executive Officer and the General Counsel are hereby authorized and directed to cause C&H to file a Motion to Dissolve the Temporary Restraining Order issued by the Court on March 7, 2025, upon and effective as of the entry of the Consent Order, and to direct the release and discharge of the injunction bond in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000) (Bond No. BSC-2025-TRO-04419) issued by Broadview Surety Corp., and to execute and deliver all documents, instructions, and undertakings necessary or appropriate to effectuate the release of such bond, including the delivery of any required release or discharge certificates to Broadview Surety Corp.

RESOLVED FURTHER, that the Board hereby approves the appointment of Aldwyn Compliance Solutions LLC, with offices at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, as the independent compliance monitor under the Settlement Agreement for a twelve (12)-month term, with the Company bearing forty percent (40%) of the estimated total cost of Three Hundred Sixty Thousand Dollars ($360,000) (i.e., One Hundred Forty-Four Thousand Dollars ($144,000)), and Verdana bearing sixty percent (60%) of such cost (i.e., Two Hundred Sixteen Thousand Dollars ($216,000)). The Chief Executive Officer and the General Counsel are hereby authorized and directed to execute and deliver, on behalf of the Company, (i) the Compliance Monitor Engagement Letter, substantially in the form attached hereto as Attachment 3, and (ii) the Letter Agreement Among CRH, Verdana, and Aldwyn re: Information-Sharing and Access for Monitor, substantially in the form attached hereto as Attachment 4, with such changes, modifications, or amendments thereto as the executing officer may approve, such approval to be conclusively evidenced by such officer's execution and delivery thereof.

RESOLVED FURTHER, that the Board hereby approves the data return and destruction protocol set forth in Exhibit B to the Settlement Agreement, including the provision permitting the independent forensic audit of Verdana's information systems to be conducted by Pinnacle Forensics LLC (Dr. Rajiv Anand, engagement lead) at Verdana's sole expense, subject to a cap of One Hundred Seventy-Five Thousand Dollars ($175,000), and the Chief Executive Officer and the General Counsel are hereby authorized to take all actions necessary or appropriate to oversee and facilitate the implementation of such protocol, including the coordination of the forensic audit and the receipt and review of the certifications of destruction required to be delivered by the members of the Rathore Group and Verdana.

RESOLVED FURTHER, that the Chief Executive Officer and the General Counsel are hereby authorized and directed to cause notification to be provided to Keypoint National Bank, N.A., as administrative agent under the Company's $750 million revolving credit facility, confirming the settlement resolution of C.A. No. 2025-0198-MTZ and that no continuing Material Adverse Effect (as defined in the Credit Agreement) exists as a result of such litigation or the terms of the settlement, in compliance with the reporting obligations set forth in Section 6.02(c) of the Credit Agreement dated as of September 12, 2023, as amended, and to deliver such certificates, representations, and other documentation as may be required by the administrative agent in connection therewith.

RESOLVED FURTHER, that the Chief Executive Officer and the General Counsel, in consultation with C&H and the Company's independent registered public accounting firm, Hargrove & Tillett CPA, PLLC (Lead Audit Partner: Denise Wheatley), are hereby authorized and directed to determine the appropriate form and timing of public disclosure of the settlement of C.A. No. 2025-0198-MTZ, including, if determined to be appropriate, through the filing of a Current Report on Form 8-K under Item 8.01 (Other Events) and/or inclusion of the settlement as a subsequent event or material development in the Company's Quarterly Report on Form 10-Q for Q1 2025, and to update the litigation contingency accrual from the pre-settlement estimate of Three Million Five Hundred Thousand Dollars ($3,500,000) as appropriate to reflect the settlement terms and the total economic recovery to the Company, in accordance with applicable generally accepted accounting principles and Securities and Exchange Commission reporting requirements.

RESOLVED FURTHER, that all actions heretofore taken by the officers, directors, employees, and agents of the Company — including without limitation the Chief Executive Officer, Marcus Langford, the General Counsel, Theresa Yun-Park, and the Chief People Officer, Roland Ashby — and by Calderwood & Harkness LLP, on behalf of the Company, in connection with the matters contemplated by these resolutions, including but not limited to the filing of the Verified Complaint in C.A. No. 2025-0198-MTZ on March 5, 2025, the obtaining of the Temporary Restraining Order on March 7, 2025, the posting of the injunction bond through Broadview Surety Corp., the engagement of Pinnacle Forensics LLC, Aurelian Investigations Group Inc., and Veltrano Consulting Group LLC, the participation in mediation before the Honorable Philip Ashford (Ret.) through Meridian ADR Services LLC on March 18, 2025, and the negotiation of the Settlement Agreement between March 24 and April 11, 2025, are hereby ratified, confirmed, and approved in all respects as actions duly taken in the interests of the Company and its stockholders.

RESOLVED FURTHER, that at the conclusion of the twelve (12)-month compliance monitor period (anticipated to expire on or about April 14, 2026), the Chief Executive Officer and the General Counsel are hereby authorized and directed to cause the filing of the Stipulation for Dismissal with Prejudice of C.A. No. 2025-0198-MTZ with the Delaware Court of Chancery, contingent upon full compliance with all terms and conditions of the Consent Order and the Settlement Agreement, as confirmed by the compliance monitor, Aldwyn Compliance Solutions LLC. In the event that material non-compliance is identified by the Monitor during the monitoring period, the Chief Executive Officer and the General Counsel are authorized to take such enforcement actions, including motions to the Court, as they may deem necessary or advisable, in consultation with C&H, to protect the Company's interests.

RESOLVED FURTHER, that the Chief Executive Officer, the General Counsel, and any other duly authorized officer of the Company are hereby authorized and empowered, in the name of and on behalf of the Company, to take or cause to be taken all such further actions, to execute and deliver all such further documents, instruments, agreements, certificates, filings, and undertakings, and to pay all such fees, costs, and expenses, as any such officer may deem necessary, advisable, or appropriate to carry out the purposes and intent of the foregoing resolutions, including without limitation the execution of any amendments, supplements, or modifications to the Settlement Agreement or any related document that such officer determines to be in the best interests of the Company, with any such actions heretofore taken being hereby ratified and approved in all respects.

CONSENT AND SIGNATURES

The undersigned, being all of the members of the Board of Directors of Cascade Retail Holdings Inc., hereby consent to the adoption of the foregoing recitals and resolutions by unanimous written consent in lieu of a special meeting, effective as of April 14, 2025. This consent may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this consent by facsimile or electronic transmission (including by .pdf format) shall be as effective as delivery of a manually executed counterpart.

________________________________________

Marcus Langford Director and Chief Executive Officer

Date: April 14, 2025

________________________________________

Dr. Lorraine Stahl Independent Director and Chair of the Audit Committee

Date: April 14, 2025

________________________________________

Robert Ainsley Independent Director

Date: April 14, 2025

________________________________________

Catherine Drummond Independent Director

Date: April 14, 2025

________________________________________

James K. Morimoto Independent Director

Date: April 14, 2025

________________________________________

Sandra Whitfield Independent Director

Date: April 14, 2025

________________________________________

David Chen-Ramirez Director

Date: April 14, 2025

ATTACHMENTS

The following attachments are referenced in the foregoing resolutions and are incorporated herein by reference. Copies of each attachment have been circulated to all directors in connection with their review of these resolutions.

Attachment 1: Standstill and Settlement Agreement (Execution Version), by and among Cascade Retail Holdings Inc., Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, Kira Johansson, and Verdana Commerce Group, Inc., with Exhibits A through E (Exhibit A: Modified Restrictive Covenant Terms; Exhibit B: Data Return and Destruction Protocol; Exhibit C: List of Top 50 CRH Vendors; Exhibit D: Form of Compliance Monitor Engagement Letter; Exhibit E: Mutual Non-Disparagement Provisions)

Attachment 2: Stipulation of Settlement and Proposed Consent Order, to be filed with the Delaware Court of Chancery in Cascade Retail Holdings Inc. v. Rathore et al., C.A. No. 2025-0198-MTZ

Attachment 3: Compliance Monitor Engagement Letter, by and between Cascade Retail Holdings Inc., Verdana Commerce Group, Inc., and Aldwyn Compliance Solutions LLC

Attachment 4: Letter Agreement Among CRH, Verdana, and Aldwyn re: Information-Sharing and Access for Monitor

Attachment 5: Memorandum to CRH Board of Directors re: Settlement Summary and Recommendation, dated April 10, 2025, prepared by Calderwood & Harkness LLP

Attachment 6: Letter to CRH Compensation Committee re: Equity Clawback and Forfeiture Summary, dated April 10, 2025

CONFIDENTIAL — SUBJECT TO ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT PROTECTION

RESOLUTIONS OF THE BOARD OF DIRECTORS OF CASCADE RETAIL HOLDINGS INC.
Adopted by Unanimous Written Consent in Lieu of a Special Meeting
April 14, 2025
Ratification of Settlement Terms and Authorization of Execution of Standstill and Settlement Agreement in Connection with C.A. No. 2025-0198-MTZ (Delaware Court of Chancery)
The undersigned, being all of the members of the Board of Directors (the "Board") of Cascade Retail Holdings Inc., a Delaware corporation (the "Company" or "CRH"), acting pursuant to Section 141(f) of the General Corporation Law of the State of Delaware, as amended (the "DGCL"), which permits action by the board of directors of a Delaware corporation without a meeting if all members of the board consent in writing or by electronic transmission, hereby adopt the following recitals and resolutions by unanimous written consent, effective as of April 14, 2025:
RECITALS
WHEREAS, CRH is a corporation duly organized and existing under the laws of the State of Delaware, with its principal executive offices located at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119, and the Company's shares of common stock are publicly traded on the Nasdaq Stock Market under the ticker symbol "CRHL" (Employer Identification Number 91-2847351); and
WHEREAS, on or about February 7, 2025, eight senior employees of the Company's merchandising division resigned from their positions with the Company simultaneously, in what the Company believes to have been a coordinated departure orchestrated by Priya Rathore, the Company's former Senior Vice President, Merchandising, for the purpose of joining Verdana Commerce Group, Inc. ("Verdana"), a direct competitor of the Company incorporated under the laws of the State of Delaware and headquartered at 400 Christiana Gateway, Suite 700, Wilmington, Delaware 19801. The eight departing employees (collectively, the "Rathore Group") are: (1) Priya Rathore, (2) Derek Linden, (3) Sonia Kaczmarek, (4) Amara Osei, (5) Brent Halvorsen, (6) Lucia Fernandez-Gill, (7) Nathan Tsao, and (8) Kira Johansson. Each member of the Rathore Group was, at the time of his or her resignation, party to an employment agreement with the Company containing restrictive covenant provisions, including non-competition, non-solicitation of employees and business partners, and confidentiality obligations, each of which was governed by the laws of the State of Delaware; and
WHEREAS, the Company's merchandising division is a critical business unit, accounting for approximately $2.3 billion in gross merchandise value in the fiscal year ended January 31, 2025 ("FY2024"), against total Company revenue of approximately $6.82 billion for the same period. The members of the Rathore Group, by virtue of their senior positions within the merchandising division, had direct access to proprietary and confidential information of the Company, including, without limitation, vendor negotiation playbooks, seasonal buying algorithms, private-label sourcing strategies, customer segmentation data and analytics, margin optimization models, and the Company's confidential five-year category expansion roadmap known internally as "Project Ridgeline," which constitutes some of the Company's most competitively sensitive strategic planning material; and
WHEREAS, a forensic investigation conducted by Pinnacle Forensics LLC ("Pinnacle Forensics"), a nationally recognized digital forensics firm retained by the Company, confirmed through analysis of the Company's data loss prevention logs, endpoint detection records, and cloud-access audit trails that approximately 14,327 files (totaling approximately 2.8 gigabytes of data) were downloaded from the Company's corporate information systems to personal cloud storage accounts associated with members of the Rathore Group during the period between January 10, 2025 and February 4, 2025. The exfiltrated files included, among other things, Project Ridgeline presentations (including five-year financial projections and market entry analyses), vendor negotiation term sheets reflecting pricing and volume commitments, private-label cost models containing supplier margins and landed-cost calculations, and customer segmentation data incorporating behavioral analytics and lifetime-value metrics. The timing and pattern of the data downloads strongly suggest that the exfiltration was systematic, deliberate, and coordinated in advance of the Rathore Group's collective departure; and
WHEREAS, in response to the coordinated departure and suspected data exfiltration, the Company retained Calderwood & Harkness LLP ("C&H") as outside litigation, labor and employment, and trade-secret counsel, effective February 18, 2025 (C&H Matter No. 1038-00006). The engagement is led by Bernard Crawford, Partner, with Renata Vasquez, Partner, James Underwood, Senior Associate, and Devon Archer, Associate, serving as the principal members of the engagement team. In addition to C&H, the Company engaged the following advisors in connection with the matter: Pinnacle Forensics LLC for forensic technology analysis and digital evidence preservation; Aurelian Investigations Group Inc. for private investigative services, including the identification and documentation of the circumstances surrounding the coordinated recruitment of the Rathore Group by Verdana; and Veltrano Consulting Group LLC, led by Dr. Franklin Oberg, for the preparation of economic damages analyses and expert testimony relating to the Company's losses arising from the misappropriation of trade secrets and breach of restrictive covenants; and
WHEREAS, on March 5, 2025, acting on the recommendation of the General Counsel and C&H, the Company filed a Verified Complaint and Motion for Temporary Restraining Order and Preliminary Injunction in the Court of Chancery of the State of Delaware, captioned Cascade Retail Holdings Inc. v. Rathore et al., C.A. No. 2025-0198-MTZ, before Vice Chancellor Margaret T. Zhao (the "Court"). The Verified Complaint asserted the following claims: (1) breach of restrictive covenant against each member of the Rathore Group; (2) breach of confidentiality obligations against each member of the Rathore Group; (3) misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001–2009 ("DUTSA"), against all defendants; (4) tortious interference with contractual relations against Verdana; and (5) civil conspiracy against all individual defendants and Verdana; and
WHEREAS, on March 7, 2025, following an expedited hearing at which the Company presented testimony and evidence demonstrating immediate and irreparable harm, the Court granted the Company's Motion for a Temporary Restraining Order (the "TRO"), restraining all eight individual defendants from commencing employment in any merchandising-related role at Verdana for a period of fourteen (14) days, pending a hearing on the Company's Motion for Preliminary Injunction. As a condition of the TRO, the Company was required to post, and did post, an injunction bond in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000) through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419); and
WHEREAS, on March 18, 2025, the parties participated in a mediated settlement session conducted before the Honorable Philip Ashford (Ret.), through Meridian ADR Services LLC (Reference No. Meridian-2025-0318-CRH), at which counsel for all parties and principals were present. As a result of the mediation and subsequent discussions, on March 20, 2025, the parties reached a framework for settlement of the litigation. On March 21, 2025, at the request of all parties and with the consent of the Court, the preliminary injunction hearing was adjourned by stipulation, and the Court entered a Consent Interim Order maintaining the status quo during the settlement documentation period, including the continuation of temporary restrictions on the Rathore Group's employment activities at Verdana in the three identified product categories; and
WHEREAS, between March 24, 2025 and April 11, 2025, C&H, together with Whitfield, Nygaard & Doyle LLP (counsel to the Rathore Group, led by Catherine Nygaard, Partner) and Blackhall & Soren LLP (counsel to Verdana, led by Gavin Blackhall, Partner), negotiated and documented the terms of a definitive settlement agreement titled "Standstill and Settlement Agreement" (the "Settlement Agreement"), which is attached hereto as Attachment 1. The negotiations involved extensive discussions regarding the scope and duration of modified restrictive covenants, data return and destruction protocols, economic terms, compliance monitoring mechanisms, and the form of a stipulated consent order to be filed with the Court; and
WHEREAS, Verdana (EIN 51-3982647) is a privately held Delaware corporation whose majority equity stake is held by Greystone Capital Partners, LP, through Greystone Capital Fund VII, LP (vintage 2022; $8.5 billion in total committed capital; Managing Partner Elliot Westbrook). Greystone acquired its majority stake in Verdana in the third quarter of 2023 at an enterprise value of approximately $2.4 billion. Verdana directly competes with CRH in twenty-eight (28) overlapping product categories and publicly announced in October 2024 a "transformational growth initiative" targeting $4 billion in annual revenue by 2028. The Company believes that Greystone provided the financial resources that enabled Verdana to recruit the Rathore Group through the offer of aggregate sign-on bonuses of approximately $6,200,000, and that the recruitment was a deliberate strategic effort to accelerate Verdana's growth initiative by acquiring CRH's proprietary merchandising expertise and trade secrets; and
WHEREAS, throughout the pendency of this matter, the Company's General Counsel, Theresa Yun-Park, and the Responsible Partner at C&H, Bernard Crawford, have kept the Board and its relevant committees informed of all material developments, including through written memoranda, telephonic briefings, and secure electronic communications. Specifically, the General Counsel notified Dr. Lorraine Stahl, Independent Director and Chair of the Audit Committee, regarding the litigation contingency accrual, which was originally estimated at $3,500,000 for the first quarter of fiscal year 2025 ("Q1 2025"). The Company's Chief Executive Officer, Marcus Langford, and Chief People Officer, Roland Ashby, have participated in the oversight and strategic management of the matter throughout. The Board has reviewed and considered the Memorandum to CRH Board of Directors re: Settlement Summary and Recommendation, dated April 10, 2025, prepared by C&H (attached hereto as Attachment 5), which sets forth a detailed analysis of the merits of the Company's claims, the risks associated with continued litigation, the projected costs of a trial, the terms of the proposed Settlement Agreement, and C&H's recommendation that the Board approve and authorize execution of the Settlement Agreement; and
WHEREAS, the Settlement Agreement provides for the following material terms and conditions:
A. Modified Non-Competition Obligations. Priya Rathore shall be subject to a twelve (12)-month non-competition covenant (reduced from the original eighteen (18)-month period set forth in her employment agreement) running from February 7, 2025 through February 6, 2026, limited in scope to three (3) specific product categories: home goods, seasonal décor, and private-label apparel (rather than the broader restriction covering all retail merchandising activities as originally provided). The remaining seven (7) members of the Rathore Group shall each be subject to nine (9)-month non-competition covenants (reduced from the original twelve (12)- to eighteen (18)-month periods set forth in their respective employment agreements) in the same three (3) product categories, running from February 7, 2025 through November 6, 2025.
B. Non-Solicitation of Employees. All eight (8) defendants shall be subject to eighteen (18)-month non-solicitation covenants prohibiting the solicitation of any CRH employee, running from February 7, 2025 through August 6, 2026.
C. Non-Solicitation of Vendors. All eight (8) defendants shall be subject to twelve (12)-month non-solicitation covenants prohibiting the solicitation of any of CRH's top fifty (50) vendors (measured by aggregate annual spend), running from February 7, 2025 through February 6, 2026. The list of covered vendors is set forth in Exhibit C to the Settlement Agreement.
D. Data Return and Destruction. All data exfiltrated from the Company's systems shall be returned to the Company or certified destroyed within ten (10) business days following execution of the Settlement Agreement. The certification of destruction shall be made under oath by each member of the Rathore Group individually and by a duly authorized officer of Verdana. In addition, Verdana shall permit an independent forensic audit of its information systems, to be conducted by Pinnacle Forensics LLC (Dr. Rajiv Anand, engagement lead), at Verdana's sole expense, subject to a cap of One Hundred Seventy-Five Thousand Dollars ($175,000). The protocol for the data return, destruction, and forensic audit is set forth in Exhibit B to the Settlement Agreement.
E. Monetary Terms — Cash Settlement. Verdana shall pay to CRH a lump-sum cash settlement payment of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000) within thirty (30) days of execution of the Settlement Agreement, by wire transfer of immediately available funds to an account designated by the Company.
F. Equity Forfeitures. Priya Rathore shall forfeit equity awards with an aggregate value of Three Hundred Sixty-Two Thousand Five Hundred Dollars ($362,500), comprising: (i) One Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($181,250) representing the unvested fourth tranche of her restricted stock unit ("RSU") award originally granted on March 15, 2021, with a total grant value of Seven Hundred Twenty-Five Thousand Dollars ($725,000), vesting ratably over four (4) years at twenty-five percent (25%) per year (three tranches having previously vested (75%), with the fourth tranche (25% = $181,250) remaining unvested at the time of her departure); and (ii) One Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($181,250) representing a clawback of the value of the final vested tranche of such RSU award, triggered under the for-cause clawback provision of Section 8(d) of her Employment Agreement, which provides for clawback of equity compensation upon a material breach of restrictive covenant obligations. The remaining seven (7) members of the Rathore Group shall forfeit equity awards with an aggregate value of Four Hundred Eighty-Seven Thousand Dollars ($487,000), in the individual amounts set forth in the settlement worksheet attached to the Settlement Agreement. The total aggregate equity forfeitures under the Settlement Agreement are Eight Hundred Forty-Nine Thousand Five Hundred Dollars ($849,500).
G. Litigation Cost Reimbursement. Verdana shall reimburse CRH Four Hundred Twenty-Five Thousand Dollars ($425,000) toward the Company's litigation costs incurred in connection with C.A. No. 2025-0198-MTZ, payable concurrently with the cash settlement payment described in Section E above.
H. Total Economic Recovery. The total economic recovery to CRH under the Settlement Agreement is Ten Million Twenty-Four Thousand Five Hundred Dollars ($10,024,500), consisting of: (i) the cash settlement payment of $8,750,000; (ii) the Rathore equity forfeiture of $362,500; (iii) the aggregate other equity forfeitures of $487,000; and (iv) the litigation cost reimbursement of $425,000.
I. Compliance Monitor. The parties shall appoint Aldwyn Compliance Solutions LLC, with offices at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, as an independent compliance monitor (the "Monitor") for a twelve (12)-month term. The total cost of the Monitor is estimated at Three Hundred Sixty Thousand Dollars ($360,000), to be borne sixty percent (60%) by Verdana (Two Hundred Sixteen Thousand Dollars ($216,000)) and forty percent (40%) by CRH (One Hundred Forty-Four Thousand Dollars ($144,000)). The scope of the Monitor's engagement shall include quarterly verification of compliance with the modified non-competition covenants, non-solicitation covenants, and data-destruction obligations set forth in the Settlement Agreement and the Consent Order.
J. Mutual Non-Disparagement. The Settlement Agreement includes a standard mutual non-disparagement clause among CRH, each member of the Rathore Group, and Verdana, the form of which is set forth in Exhibit E to the Settlement Agreement.
K. Consent Order. The parties shall file a stipulated Consent Order with the Delaware Court of Chancery incorporating the modified restrictive covenant terms and data-destruction obligations, and the Court shall retain jurisdiction for purposes of enforcement of the Consent Order during the twelve (12)-month compliance monitor period.
L. Dismissal. A Stipulation for Dismissal with Prejudice of C.A. No. 2025-0198-MTZ shall be filed with the Court at the conclusion of the twelve (12)-month compliance monitor period (anticipated to expire on or about April 14, 2026), contingent upon full compliance with all terms and conditions of the Consent Order and the Settlement Agreement as confirmed by the Monitor.
M. Injunction Bond. The injunction bond in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000) (Bond No. BSC-2025-TRO-04419, issued by Broadview Surety Corp.) shall be released upon entry of the Consent Order by the Court.
N. Attorneys' Fees. Each party shall bear its own attorneys' fees and costs incurred in connection with C.A. No. 2025-0198-MTZ and the negotiation of the Settlement Agreement, except as otherwise provided in Section G above regarding Verdana's reimbursement of Four Hundred Twenty-Five Thousand Dollars ($425,000) toward the Company's litigation costs.
WHEREAS, C&H has estimated that the Company's total legal fees and expenses through the closing of the settlement and the filing of the Consent Order will be approximately One Million Eight Hundred Fifty Thousand Dollars ($1,850,000), consisting of the following: Bernard Crawford, Partner, at $1,350 per hour, approximately 220 hours ($297,000); Renata Vasquez, Partner, at $1,275 per hour, approximately 180 hours ($229,500); James Underwood, Senior Associate, at $785 per hour, approximately 640 hours ($502,400); Devon Archer, Associate, at $625 per hour, approximately 820 hours ($512,500); plus expenses (including court reporting, document review technology, expert witness fees, travel, and miscellaneous) of approximately $308,600; and
WHEREAS, the Company's $750 million revolving credit facility with Keypoint National Bank, N.A., as administrative agent (the "Credit Facility"), contains a material litigation reporting covenant set forth in Section 6.02(c) of the Credit Agreement dated as of September 12, 2023, as amended (the "Credit Agreement"), which requires the Company to promptly notify the administrative agent of any material litigation or proceedings that could reasonably be expected to have a Material Adverse Effect (as defined in the Credit Agreement). The Company provided initial notification to Keypoint regarding the filing of C.A. No. 2025-0198-MTZ, and notification of the settlement resolution must be provided to Keypoint confirming that no continuing material adverse effect exists as a result of the litigation or the settlement; and
WHEREAS, the Company has considered, with the advice of C&H, whether the settlement requires disclosure under Item 8.01 of Form 8-K (Other Events) or as a subsequent event in the Company's Quarterly Report on Form 10-Q for Q1 2025, taking into account the Company's total annual revenue of approximately $6.82 billion, its approximate market capitalization of $4.1 billion, and applicable Securities and Exchange Commission guidance regarding materiality thresholds for litigation settlements. The Company's General Counsel and C&H will make a final determination regarding the appropriate form and timing of public disclosure in consultation with the Company's independent auditors; and
WHEREAS, Northland Trust Company, the Company's transfer agent, with offices at 55 Water Street, New York, New York 10041, will need to be directed to cancel the applicable unvested RSU awards and process the clawback of vested shares relating to Priya Rathore and the other seven (7) former employees in accordance with the equity forfeiture provisions of the Settlement Agreement and the terms of the Company's Amended and Restated 2019 Equity Incentive Plan; and
WHEREAS, Hargrove & Tillett CPA, PLLC, the Company's independent registered public accounting firm (Lead Audit Partner: Denise Wheatley), has been made aware of the litigation contingency accrual established for FY2024 and Q1 2025 disclosure purposes in connection with C.A. No. 2025-0198-MTZ, and such accrual will need to be updated to reflect the terms of the settlement, including the reversal of any excess accrual and the recognition of settlement proceeds in the appropriate accounting period; and
WHEREAS, the Board has carefully considered the terms of the Settlement Agreement, the recommendations set forth in the Memorandum to CRH Board of Directors re: Settlement Summary and Recommendation, dated April 10, 2025, the advice of the General Counsel and C&H, and the input of the Audit Committee, and has determined, in the exercise of its business judgment and fiduciary duties, that the terms of the Settlement Agreement are fair, reasonable, and in the best interests of the Company and its stockholders, taking into account, among other things: (i) the total economic recovery of $10,024,500; (ii) the enforceable modified restrictive covenants and compliance monitoring framework; (iii) the comprehensive data return and destruction protocol; (iv) the avoidance of the costs, distraction, and uncertainty of continued litigation; and (v) the preservation of the Company's ability to protect its trade secrets and competitive position going forward.
RESOLUTIONS
NOW, THEREFORE, BE IT RESOLVED, that the Board hereby approves and ratifies the terms and conditions of the Standstill and Settlement Agreement among Cascade Retail Holdings Inc., Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, Kira Johansson, and Verdana Commerce Group, Inc., substantially in the form presented to the Board and attached hereto as Attachment 1, including all Exhibits thereto (Exhibit A: Modified Restrictive Covenant Terms; Exhibit B: Data Return and Destruction Protocol; Exhibit C: List of Top 50 CRH Vendors (by Aggregate Annual Spend); Exhibit D: Form of Compliance Monitor Engagement Letter; and Exhibit E: Mutual Non-Disparagement Provisions), and the Board hereby determines that the Settlement Agreement, and all transactions contemplated thereby, are fair, reasonable, and in the best interests of the Company and its stockholders.
RESOLVED FURTHER, that the Chief Executive Officer, Marcus Langford, and the General Counsel, Theresa Yun-Park, each acting individually or together, are hereby authorized and directed, in the name of and on behalf of the Company, to execute and deliver the Settlement Agreement and all related documents, instruments, agreements, certificates, and undertakings, including but not limited to the Stipulation of Settlement and Proposed Consent Order to be filed with the Delaware Court of Chancery in Cascade Retail Holdings Inc. v. Rathore et al., C.A. No. 2025-0198-MTZ, in substantially the form attached hereto as Attachment 2, with such changes, modifications, or amendments thereto as the executing officer may approve, such approval to be conclusively evidenced by such officer's execution and delivery thereof.
RESOLVED FURTHER, that the Company is hereby authorized to receive the lump-sum cash settlement payment of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000) from Verdana Commerce Group, Inc. within thirty (30) days of execution of the Settlement Agreement, together with the litigation cost reimbursement of Four Hundred Twenty-Five Thousand Dollars ($425,000), for a total cash recovery of Nine Million One Hundred Seventy-Five Thousand Dollars ($9,175,000), and the Chief Financial Officer of the Company is authorized to designate the wire transfer instructions and bank account for receipt of such funds and to take all actions necessary to process and record such receipt in accordance with the Company's accounting policies and applicable generally accepted accounting principles.
RESOLVED FURTHER, that the Board hereby ratifies and approves the following equity forfeitures under the Settlement Agreement, and determines that such forfeitures are consistent with, and authorized by, the terms of the Company's Amended and Restated 2019 Equity Incentive Plan and the applicable award agreements and employment agreements:
(a) Priya Rathore: forfeiture of equity awards with an aggregate value of Three Hundred Sixty-Two Thousand Five Hundred Dollars ($362,500), comprising (i) One Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($181,250) representing the cancellation of the unvested fourth tranche of her RSU award originally granted on March 15, 2021 (total grant value of $725,000; four-year ratable annual vesting at 25% per year; three tranches vested (75%); fourth tranche unvested (25% = $181,250)); and (ii) One Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($181,250) representing the clawback of the value of the final vested tranche of such RSU award, triggered under the for-cause clawback provision of Section 8(d) of Ms. Rathore's Employment Agreement upon her material breach of restrictive covenant obligations;
(b) Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson: aggregate equity forfeiture of Four Hundred Eighty-Seven Thousand Dollars ($487,000), in the individual amounts set forth in the settlement worksheet attached to the Settlement Agreement; and
(c) Total Equity Forfeitures: Eight Hundred Forty-Nine Thousand Five Hundred Dollars ($849,500).
The Chief Executive Officer and the General Counsel are hereby authorized and directed to cause Northland Trust Company, the Company's transfer agent, to cancel the applicable unvested RSU awards and to process the clawback of vested shares, as applicable, in accordance with the terms of the Settlement Agreement and the Company's equity plans and award agreements, and to execute and deliver such instructions, letters of direction, and other documents as may be required by Northland Trust Company to effectuate such cancellations and clawbacks.
RESOLVED FURTHER, that the Chief Executive Officer and the General Counsel are hereby authorized and directed to cause C&H to prepare, finalize, and file the Stipulation of Settlement and Proposed Consent Order with the Delaware Court of Chancery in C.A. No. 2025-0198-MTZ, incorporating the modified restrictive covenant terms and data-destruction obligations set forth in the Settlement Agreement, and to consent, on behalf of the Company, to the Court's retained jurisdiction for purposes of enforcement of the Consent Order during the twelve (12)-month compliance monitor period, and to take all actions and execute all documents necessary or appropriate in connection therewith.
RESOLVED FURTHER, that the Chief Executive Officer and the General Counsel are hereby authorized and directed to cause C&H to file a Motion to Dissolve the Temporary Restraining Order issued by the Court on March 7, 2025, upon and effective as of the entry of the Consent Order, and to direct the release and discharge of the injunction bond in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000) (Bond No. BSC-2025-TRO-04419) issued by Broadview Surety Corp., and to execute and deliver all documents, instructions, and undertakings necessary or appropriate to effectuate the release of such bond, including the delivery of any required release or discharge certificates to Broadview Surety Corp.
RESOLVED FURTHER, that the Board hereby approves the appointment of Aldwyn Compliance Solutions LLC, with offices at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, as the independent compliance monitor under the Settlement Agreement for a twelve (12)-month term, with the Company bearing forty percent (40%) of the estimated total cost of Three Hundred Sixty Thousand Dollars ($360,000) (i.e., One Hundred Forty-Four Thousand Dollars ($144,000)), and Verdana bearing sixty percent (60%) of such cost (i.e., Two Hundred Sixteen Thousand Dollars ($216,000)). The Chief Executive Officer and the General Counsel are hereby authorized and directed to execute and deliver, on behalf of the Company, (i) the Compliance Monitor Engagement Letter, substantially in the form attached hereto as Attachment 3, and (ii) the Letter Agreement Among CRH, Verdana, and Aldwyn re: Information-Sharing and Access for Monitor, substantially in the form attached hereto as Attachment 4, with such changes, modifications, or amendments thereto as the executing officer may approve, such approval to be conclusively evidenced by such officer's execution and delivery thereof.
RESOLVED FURTHER, that the Board hereby approves the data return and destruction protocol set forth in Exhibit B to the Settlement Agreement, including the provision permitting the independent forensic audit of Verdana's information systems to be conducted by Pinnacle Forensics LLC (Dr. Rajiv Anand, engagement lead) at Verdana's sole expense, subject to a cap of One Hundred Seventy-Five Thousand Dollars ($175,000), and the Chief Executive Officer and the General Counsel are hereby authorized to take all actions necessary or appropriate to oversee and facilitate the implementation of such protocol, including the coordination of the forensic audit and the receipt and review of the certifications of destruction required to be delivered by the members of the Rathore Group and Verdana.
RESOLVED FURTHER, that the Chief Executive Officer and the General Counsel are hereby authorized and directed to cause notification to be provided to Keypoint National Bank, N.A., as administrative agent under the Company's $750 million revolving credit facility, confirming the settlement resolution of C.A. No. 2025-0198-MTZ and that no continuing Material Adverse Effect (as defined in the Credit Agreement) exists as a result of such litigation or the terms of the settlement, in compliance with the reporting obligations set forth in Section 6.02(c) of the Credit Agreement dated as of September 12, 2023, as amended, and to deliver such certificates, representations, and other documentation as may be required by the administrative agent in connection therewith.
RESOLVED FURTHER, that the Chief Executive Officer and the General Counsel, in consultation with C&H and the Company's independent registered public accounting firm, Hargrove & Tillett CPA, PLLC (Lead Audit Partner: Denise Wheatley), are hereby authorized and directed to determine the appropriate form and timing of public disclosure of the settlement of C.A. No. 2025-0198-MTZ, including, if determined to be appropriate, through the filing of a Current Report on Form 8-K under Item 8.01 (Other Events) and/or inclusion of the settlement as a subsequent event or material development in the Company's Quarterly Report on Form 10-Q for Q1 2025, and to update the litigation contingency accrual from the pre-settlement estimate of Three Million Five Hundred Thousand Dollars ($3,500,000) as appropriate to reflect the settlement terms and the total economic recovery to the Company, in accordance with applicable generally accepted accounting principles and Securities and Exchange Commission reporting requirements.
RESOLVED FURTHER, that all actions heretofore taken by the officers, directors, employees, and agents of the Company — including without limitation the Chief Executive Officer, Marcus Langford, the General Counsel, Theresa Yun-Park, and the Chief People Officer, Roland Ashby — and by Calderwood & Harkness LLP, on behalf of the Company, in connection with the matters contemplated by these resolutions, including but not limited to the filing of the Verified Complaint in C.A. No. 2025-0198-MTZ on March 5, 2025, the obtaining of the Temporary Restraining Order on March 7, 2025, the posting of the injunction bond through Broadview Surety Corp., the engagement of Pinnacle Forensics LLC, Aurelian Investigations Group Inc., and Veltrano Consulting Group LLC, the participation in mediation before the Honorable Philip Ashford (Ret.) through Meridian ADR Services LLC on March 18, 2025, and the negotiation of the Settlement Agreement between March 24 and April 11, 2025, are hereby ratified, confirmed, and approved in all respects as actions duly taken in the interests of the Company and its stockholders.
RESOLVED FURTHER, that at the conclusion of the twelve (12)-month compliance monitor period (anticipated to expire on or about April 14, 2026), the Chief Executive Officer and the General Counsel are hereby authorized and directed to cause the filing of the Stipulation for Dismissal with Prejudice of C.A. No. 2025-0198-MTZ with the Delaware Court of Chancery, contingent upon full compliance with all terms and conditions of the Consent Order and the Settlement Agreement, as confirmed by the compliance monitor, Aldwyn Compliance Solutions LLC. In the event that material non-compliance is identified by the Monitor during the monitoring period, the Chief Executive Officer and the General Counsel are authorized to take such enforcement actions, including motions to the Court, as they may deem necessary or advisable, in consultation with C&H, to protect the Company's interests.
RESOLVED FURTHER, that the Chief Executive Officer, the General Counsel, and any other duly authorized officer of the Company are hereby authorized and empowered, in the name of and on behalf of the Company, to take or cause to be taken all such further actions, to execute and deliver all such further documents, instruments, agreements, certificates, filings, and undertakings, and to pay all such fees, costs, and expenses, as any such officer may deem necessary, advisable, or appropriate to carry out the purposes and intent of the foregoing resolutions, including without limitation the execution of any amendments, supplements, or modifications to the Settlement Agreement or any related document that such officer determines to be in the best interests of the Company, with any such actions heretofore taken being hereby ratified and approved in all respects.
CONSENT AND SIGNATURES
The undersigned, being all of the members of the Board of Directors of Cascade Retail Holdings Inc., hereby consent to the adoption of the foregoing recitals and resolutions by unanimous written consent in lieu of a special meeting, effective as of April 14, 2025. This consent may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this consent by facsimile or electronic transmission (including by .pdf format) shall be as effective as delivery of a manually executed counterpart.
________________________________________
Marcus Langford Director and Chief Executive Officer
Date: April 14, 2025
________________________________________
Dr. Lorraine Stahl Independent Director and Chair of the Audit Committee
Date: April 14, 2025
________________________________________
Robert Ainsley Independent Director
Date: April 14, 2025
________________________________________
Catherine Drummond Independent Director
Date: April 14, 2025
________________________________________
James K. Morimoto Independent Director
Date: April 14, 2025
________________________________________
Sandra Whitfield Independent Director
Date: April 14, 2025
________________________________________
David Chen-Ramirez Director
Date: April 14, 2025
ATTACHMENTS
The following attachments are referenced in the foregoing resolutions and are incorporated herein by reference. Copies of each attachment have been circulated to all directors in connection with their review of these resolutions.
Attachment 1: Standstill and Settlement Agreement (Execution Version), by and among Cascade Retail Holdings Inc., Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, Kira Johansson, and Verdana Commerce Group, Inc., with Exhibits A through E (Exhibit A: Modified Restrictive Covenant Terms; Exhibit B: Data Return and Destruction Protocol; Exhibit C: List of Top 50 CRH Vendors; Exhibit D: Form of Compliance Monitor Engagement Letter; Exhibit E: Mutual Non-Disparagement Provisions)
Attachment 2: Stipulation of Settlement and Proposed Consent Order, to be filed with the Delaware Court of Chancery in Cascade Retail Holdings Inc. v. Rathore et al., C.A. No. 2025-0198-MTZ
Attachment 3: Compliance Monitor Engagement Letter, by and between Cascade Retail Holdings Inc., Verdana Commerce Group, Inc., and Aldwyn Compliance Solutions LLC
Attachment 4: Letter Agreement Among CRH, Verdana, and Aldwyn re: Information-Sharing and Access for Monitor
Attachment 5: Memorandum to CRH Board of Directors re: Settlement Summary and Recommendation, dated April 10, 2025, prepared by Calderwood & Harkness LLP
Attachment 6: Letter to CRH Compensation Committee re: Equity Clawback and Forfeiture Summary, dated April 10, 2025
CONFIDENTIAL — SUBJECT TO ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT PROTECTION

RESOLUTIONS OF THE BOARD OF DIRECTORS OF CASCADE RETAIL HOLDINGS INC.

RECITALS

RESOLUTIONS

CONSENT AND SIGNATURES

ATTACHMENTS

Record

Parties

Dates

Amounts