MEMORANDUM
PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT
March 22, 2025
TO: James Underwood, Lead Associate, Labor & Employment, Calderwood & Harkness LLP
FROM: Devon Archer, Working Associate, Labor & Employment, Calderwood & Harkness LLP
RE: RSU and Equity Forfeiture Calculations — Remaining Seven Departing Employees (Rathore Group)
CLIENT: Cascade Retail Holdings Inc.
MATTER NO.: 1038-00006
COURT REFERENCE: C.A. No. 2025-0198-MTZ (Delaware Court of Chancery)
I. Purpose and Scope
This memorandum sets forth the individual and aggregate equity forfeiture calculations for the seven departing Cascade Retail Holdings Inc. ("CRH" or the "Company") employees other than Priya Rathore whose coordinated resignations and subsequent employment with Verdana Commerce Group, Inc. ("Verdana") are the subject of the above-referenced litigation. The RSU forfeiture calculation for Ms. Rathore—who served as CRH's Senior Vice President, Merchandising & Sourcing and was the senior-most member of the departing group—is addressed in a companion memorandum of even date and is incorporated herein by reference solely for purposes of the aggregate totals presented in Section VI below.
The seven employees addressed in this memorandum are as follows:
1. Derek Linden — Vice President, Hardlines Merchandising
2. Sonia Kaczmarek — Vice President, Softlines Merchandising
3. Amara Osei — Director, Private Label Strategy
4. Brent Halvorsen — Director, Seasonal Planning & Analytics
5. Lucia Fernandez-Gill — Director, Vendor Relations (Domestic)
6. Nathan Tsao — Senior Manager, eCommerce Merchandising
7. Kira Johansson — Senior Manager, Category Analytics
All seven individuals resigned from CRH simultaneously on February 7, 2025, with immediate effect, and each has since commenced employment with Verdana. The coordinated nature of these departures, together with the competitive relationship between CRH and Verdana in the multi-channel retail sector, forms the factual predicate for the Company's claims in C.A. No. 2025-0198-MTZ, including claims for breach of restrictive covenant obligations, misappropriation of trade secrets, and tortious interference.
Under the settlement framework reached between the parties on March 20, 2025 (the "Settlement Term Sheet"), each departing employee forfeits all unvested restricted stock unit ("RSU") awards outstanding as of the resignation date and, where applicable, is subject to clawback of accelerated or recently vested tranches under the for-cause clawback provisions contained in their respective employment agreements. The clawback is triggered by the determination—stipulated to by all parties in the Settlement Term Sheet—that each departing employee's coordinated resignation and immediate commencement of employment with Verdana constituted a breach of the restrictive covenant obligations (including non-competition, non-solicitation, and confidentiality covenants) set forth in their respective employment agreements with CRH.
As set forth in detail below, the aggregate equity forfeiture across all seven employees addressed in this memorandum is $487,000. When combined with the Rathore forfeiture of $362,500 (per the companion memorandum), the total equity forfeiture component of the settlement is $849,500.
The data underlying the calculations in this memorandum has been sourced from CRH's equity plan records, the individual employment agreements and RSU award agreements for each departing employee, and information confirmed with both (a) Northland Trust Company, N.A., CRH's transfer agent (55 Water Street, New York, NY 10041, Attn: Corporate Actions Department), and (b) CRH's internal compensation team, through its Chief People Officer, Roland Ashby. All documentary sources are identified in the Attachments section at the conclusion of this memorandum.
II. Equity Plan Overview
All RSU awards discussed in this memorandum were granted under the Cascade Retail Holdings Inc. 2018 Omnibus Equity Incentive Plan, as amended and restated effective March 15, 2021 (the "Plan"). The Plan was approved by CRH's stockholders at the Company's 2018 Annual Meeting and authorizes the Compensation Committee of the CRH Board of Directors to grant various forms of equity-based awards—including stock options, stock appreciation rights, restricted stock, restricted stock units, and performance-based awards—to eligible employees, directors, and consultants of the Company and its subsidiaries.
The following provisions of the Plan and the individual award agreements are material to the forfeiture calculations set forth herein:
Vesting Schedule. Each RSU award granted to the departing employees vests ratably in annual installments over a four-year period from the grant date, with 25% of the total grant vesting on each anniversary of the grant date, subject in all cases to the participant's continued employment with the Company through the applicable vesting date. Participants who terminate employment for any reason prior to a vesting date forfeit all unvested RSU tranches as of the termination date. There is no provision for partial or pro-rata vesting between anniversary dates under the standard Plan terms, although, as noted below, the Settlement Term Sheet incorporates negotiated pro-rata credits for certain employees.
For-Cause Clawback Provision. Section 12.3 of the Plan and the corresponding provision in each individual award agreement provide that, upon a determination by the Compensation Committee (or its designee) that a participant has breached any restrictive covenant contained in the participant's employment agreement with the Company, the Company may, at its election: (a) cancel all unvested awards held by such participant, effective as of the date of the breach determination; and (b) require the participant to repay to the Company the value of the most recently vested tranche of any RSU award—defined as the tranche that vested within the twelve (12) month period immediately preceding the participant's termination date. Where more than one RSU grant is outstanding and each has a tranche that vested within the look-back period, the clawback applies to the most recently vested tranche of each such grant, subject to the settlement modifications described below.
Governing Law. All employment agreements are governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict-of-laws principles. The Plan itself is also governed by Delaware law. The Court of Chancery has jurisdiction over disputes arising under the Plan pursuant to the forum-selection clause in Section 14.8 of the Plan.
Valuation Methodology. The forfeiture amounts stated in this memorandum are calculated using the grant-date face values of each RSU award as set forth in the respective award agreements. This methodology was specified in the Settlement Term Sheet (Section 4(c)) and was selected by the parties in lieu of a mark-to-market valuation as of the resignation date (February 7, 2025). The grant-date face value methodology simplifies the calculation and avoids disputes regarding the appropriate valuation date, particularly given the volatility in CRH's stock price (Nasdaq: CRHL) during the period between the mass resignation and the filing of the Company's verified complaint on February 14, 2025. As noted in Section VIII below, if the Court or either party subsequently requires a mark-to-market valuation, the figures herein will need to be recalculated.
III. Methodology
The following six-step methodology was applied uniformly to each departing employee's RSU holdings to derive the total forfeiture amount. Where the Settlement Term Sheet specifies negotiated adjustments or concessions that deviate from the strict application of this methodology, those adjustments are identified and explained in the individual calculations in Section IV.
Step 1 — Identification of RSU Grants. For each employee, identify the grant date, total grant-date face value, and vesting schedule for each outstanding RSU award. Several employees hold more than one RSU grant—typically an initial hire grant and a subsequent promotional, retention, or performance-based grant—and each grant is analyzed independently.
Step 2 — Determination of Vested Tranches. Calculate the number of annual tranches that had vested as of the resignation date of February 7, 2025, by counting the number of full years that elapsed from the grant date to the resignation date. Only full annual anniversaries count; partial years do not result in vesting under the standard Plan terms.
Step 3 — Calculation of Unvested RSU Value. Multiply the number of remaining unvested tranches by 25% of the total grant-date face value to derive the unvested RSU value. This amount represents the equity that would have vested on future anniversary dates had the employee remained employed with CRH through those dates and is forfeited upon termination of employment.
Step 4 — Clawback Trigger Determination. Assess whether the for-cause clawback provision under Section 12.3 of the Plan is triggered for each employee. In each case, the coordinated mass departure and immediate commencement of employment with Verdana—a direct competitor of CRH—constitutes a breach of the non-competition, non-solicitation, and confidentiality covenants in the employee's employment agreement. This breach triggers the Company's right to exercise the clawback provision. However, as noted in the individual calculations, the Settlement Term Sheet modifies the application of the clawback for certain employees based on their seniority level, the scope of their access to Project Ridgeline materials, and other negotiated factors.
Step 5 — Calculation of Clawback Amount. Where the clawback is triggered and not waived under the settlement framework, calculate the clawback amount as the value of the most recently vested tranche—i.e., the tranche that vested within the twelve (12) month period immediately preceding the resignation date of February 7, 2025. For grants with vesting dates falling outside this twelve-month look-back window, no clawback is applicable regardless of the breach determination.
Step 6 — Total Forfeiture Calculation. Sum the unvested RSU value (Step 3) and the clawback amount (Step 5) to derive the total forfeiture for each employee. Where an employee holds multiple RSU grants, the results from each grant are calculated separately under Steps 1 through 5 and then aggregated.
Additional Note Regarding Settlement Adjustments. As reflected in the individual calculations below, the Settlement Term Sheet incorporates several negotiated adjustments that depart from the strict application of the Plan's forfeiture and clawback provisions. Most notably: (i) the clawback of recently vested tranches was waived for employees at the Senior Manager level and, in one case, for a Director-level employee with limited access to Project Ridgeline materials; and (ii) pro-rata service credits were applied for two employees (Kaczmarek and Johansson) to account for substantial progress toward their next vesting milestones. These adjustments are consistent with the parties' overarching settlement objective of calibrating the economic consequences to each employee's seniority, role, and degree of involvement in the competitive activities at issue.
IV. Individual Employee Calculations
A. Derek Linden — Vice President, Hardlines Merchandising
Employment Summary
• Title: Vice President, Hardlines Merchandising
• Hire Date: Approximately February 2018
• Tenure at CRH: Approximately 7 years
• Base Salary (FY2024): $340,000
• Non-Compete Period: 18 months post-termination
• Resignation Date: February 7, 2025 (effective immediately)
RSU Grant #1 — Initial Hire Grant
Mr. Linden received an initial RSU grant in connection with his hiring, with a grant date of approximately February 2018 and a grant-date face value of $240,000. This award was subject to the standard four-year ratable vesting schedule (25% per year), with vesting dates occurring on each anniversary of the grant date. As of February 2022—approximately four years after the grant date—all four tranches of this award had vested in full. Accordingly, no unvested portion of Grant #1 remained as of Mr. Linden's resignation date.
With respect to the clawback analysis, the most recently vested tranche of Grant #1 vested in approximately February 2022, which is more than twelve months prior to the resignation date of February 7, 2025. Because the tranche falls outside the twelve-month look-back window specified in Section 12.3 of the Plan, no clawback is applicable to Grant #1.
RSU Grant #2 — Promotional/Retention Grant
Mr. Linden received a second RSU grant in connection with his promotion to Vice President, with a grant date of approximately March 2022 and a grant-date face value of $320,000. Under the standard four-year ratable vesting schedule, each annual tranche has a value of $80,000 (25% × $320,000). The vesting history for this grant is as follows:
• Tranche 1: Vested approximately March 2023 — $80,000
• Tranche 2: Vested approximately March 2024 — $80,000
• Tranche 3: Scheduled vesting approximately March 2025 — $80,000 (not yet vested as of February 7, 2025)
• Tranche 4: Scheduled vesting approximately March 2026 — $80,000 (not yet vested as of February 7, 2025)
As of the resignation date, two of the four tranches had vested and two remained unvested. The unvested RSU value for Grant #2 is therefore $160,000 (2 tranches × $80,000).
The most recently vested tranche (Tranche 2) vested in approximately March 2024, which is within the twelve-month period preceding the resignation date. Under the standard application of the Plan's clawback provision, this tranche would be subject to clawback in the amount of $80,000. However, per the Settlement Term Sheet, the clawback of the most recently vested tranche was not applied to Mr. Linden. The settlement framework confined the clawback remedy to senior-level employees (VP-and-above) whose total outstanding RSU grant values exceeded $200,000 only in circumstances where additional aggravating factors were present. While Mr. Linden meets the seniority threshold and his Grant #2 value exceeds $200,000, the parties agreed to limit his forfeiture to unvested awards only as part of the broader settlement negotiations.
Total Linden Forfeiture
B. Sonia Kaczmarek — Vice President, Softlines Merchandising
Employment Summary
• Title: Vice President, Softlines Merchandising
• Hire Date: Approximately February 2020
• Tenure at CRH: Approximately 5 years
• Base Salary (FY2024): $325,000
• Non-Compete Period: 18 months post-termination
• Resignation Date: February 7, 2025 (effective immediately)
RSU Grant #1 — Initial Hire Grant
Ms. Kaczmarek received an initial RSU grant upon hiring, with a grant date of approximately February 2020 and a grant-date face value of $200,000. Under the four-year ratable vesting schedule ($50,000 per tranche), all four tranches vested by approximately February 2024:
• Tranche 1: Vested approximately February 2021 — $50,000
• Tranche 2: Vested approximately February 2022 — $50,000
• Tranche 3: Vested approximately February 2023 — $50,000
• Tranche 4: Vested approximately February 2024 — $50,000
This grant was fully vested as of the resignation date. The most recently vested tranche (Tranche 4) vested in approximately February 2024, which is within the twelve-month look-back period. However, for the reasons discussed below regarding the settlement framework's treatment of Ms. Kaczmarek's clawback, no clawback is applied to Grant #1.
RSU Grant #2 — Retention/Promotion Grant
Ms. Kaczmarek received a second RSU grant in connection with a retention and promotional award, with a grant date of approximately March 2023 and a grant-date face value of $160,000. Under the four-year ratable vesting schedule, each annual tranche has a value of $40,000 (25% × $160,000):
• Tranche 1: Vested approximately March 2024 — $40,000
• Tranche 2: Scheduled vesting approximately March 2025 — $40,000 (not yet vested)
• Tranche 3: Scheduled vesting approximately March 2026 — $40,000 (not yet vested)
• Tranche 4: Scheduled vesting approximately March 2027 — $40,000 (not yet vested)
As of the resignation date, one tranche had vested and three remained unvested. The unvested RSU value for Grant #2 under the strict Plan terms is $120,000 (3 tranches × $40,000).
With respect to the clawback analysis, the most recently vested tranche (Tranche 1 of Grant #2) vested in approximately March 2024, placing it within the twelve-month look-back window. However, Ms. Kaczmarek's employment agreement contains a clawback provision with a narrower trigger than the standard Plan language: her agreement limits the clawback to circumstances involving a "material breach" determination by the Compensation Committee, as opposed to any breach of a restrictive covenant. While the Company maintained that the coordinated departure constituted a material breach, the Settlement Term Sheet resolved this ambiguity by excluding Ms. Kaczmarek's most recently vested tranche from the clawback in exchange for other settlement concessions. Accordingly, no clawback amount is applied.
Settlement Adjustment — Pro-Rata Service Credit
Under the Settlement Term Sheet, Ms. Kaczmarek's unvested forfeiture amount was further adjusted to reflect a negotiated pro-rata service credit. Specifically, as of the resignation date (February 7, 2025), Ms. Kaczmarek had completed approximately eleven months of the twelve-month service period required for the next vesting tranche of Grant #2 (Tranche 2, scheduled to vest in March 2025). In recognition of this substantial progress toward the next vesting milestone, the parties agreed to apply a downward adjustment to the total unvested forfeiture. The agreed methodology produced a net forfeiture of $85,000, reflecting the reduction from the strict unvested amount of $120,000. This negotiated adjustment is documented in the settlement worksheet appended to the Settlement Term Sheet.
Total Kaczmarek Forfeiture
C. Amara Osei — Director, Private Label Strategy
Employment Summary
• Title: Director, Private Label Strategy
• Hire Date: Approximately February 2021
• Tenure at CRH: Approximately 4 years
• Base Salary (FY2024): $265,000
• Non-Compete Period: 12 months post-termination
• Resignation Date: February 7, 2025 (effective immediately)
RSU Grant — Initial Hire Grant
Ms. Osei received a single RSU grant in connection with her hiring, with a grant date of approximately March 2021 and a grant-date face value of $120,000. Under the standard four-year ratable vesting schedule, each annual tranche has a value of $30,000 (25% × $120,000). The vesting history is as follows:
• Tranche 1: Vested approximately March 2022 — $30,000
• Tranche 2: Vested approximately March 2023 — $30,000
• Tranche 3: Vested approximately March 2024 — $30,000
• Tranche 4: Scheduled vesting approximately March 2025 — $30,000 (not yet vested as of February 7, 2025)
As of the resignation date, three of the four tranches had vested, and one tranche remained unvested. The unvested RSU value is $30,000. It is worth noting that Ms. Osei was within approximately six weeks of the final vesting date when she resigned, and the forfeiture of this tranche was a point of negotiation during the settlement discussions. Ultimately, the parties agreed that the standard forfeiture provision would apply without any pro-rata credit for Ms. Osei, distinguishing her situation from Ms. Kaczmarek's and Ms. Johansson's based on the nature and scope of Ms. Osei's competitive activities.
Clawback Analysis
The most recently vested tranche (Tranche 3) vested in approximately March 2024, which is within the twelve-month look-back period preceding the resignation date. Ms. Osei's employment agreement contains the standard clawback trigger (any breach of restrictive covenant), and her Director-level position and direct involvement in CRH's private-label sourcing strategy—which overlaps significantly with Verdana's private-label expansion plans—supported the Company's position that the full clawback should apply. Under the Settlement Term Sheet, the clawback was retained for Ms. Osei in the amount of $30,000, reflecting the value of the March 2024 tranche.
Total Osei Forfeiture
D. Brent Halvorsen — Director, Seasonal Planning & Analytics
Employment Summary
• Title: Director, Seasonal Planning & Analytics
• Hire Date: Approximately February 2019
• Tenure at CRH: Approximately 6 years
• Base Salary (FY2024): $258,000
• Non-Compete Period: 12 months post-termination
• Resignation Date: February 7, 2025 (effective immediately)
RSU Grant #1 — Initial Hire Grant
Mr. Halvorsen received an initial RSU grant upon hiring, with a grant date of approximately March 2019 and a grant-date face value of $100,000. Under the four-year ratable vesting schedule ($25,000 per tranche), all four tranches vested by approximately March 2023:
• Tranche 1: Vested approximately March 2020 — $25,000
• Tranche 2: Vested approximately March 2021 — $25,000
• Tranche 3: Vested approximately March 2022 — $25,000
• Tranche 4: Vested approximately March 2023 — $25,000
This grant was fully vested as of the resignation date. The most recently vested tranche (Tranche 4) vested in approximately March 2023, which is more than twelve months prior to the resignation date. No clawback applies to Grant #1.
RSU Grant #2 — Promotional/Retention Grant
Mr. Halvorsen received a second RSU grant in connection with a promotional and retention award, with a grant date of approximately June 2023 and a grant-date face value of $100,000. Under the standard four-year ratable vesting schedule, each annual tranche has a value of $25,000 (25% × $100,000):
• Tranche 1: Vested approximately June 2024 — $25,000
• Tranche 2: Scheduled vesting approximately June 2025 — $25,000 (not yet vested)
• Tranche 3: Scheduled vesting approximately June 2026 — $25,000 (not yet vested)
• Tranche 4: Scheduled vesting approximately June 2027 — $25,000 (not yet vested)
As of the resignation date, one tranche had vested and three remained unvested. The unvested RSU value for Grant #2 is $75,000 (3 tranches × $25,000).
Clawback Analysis
The most recently vested tranche of Grant #2 (Tranche 1) vested in approximately June 2024, which is within the twelve-month look-back period and would ordinarily be subject to clawback. However, per the Settlement Term Sheet, the clawback for Mr. Halvorsen was waived in full. This waiver reflects the negotiated settlement framework's recognition that Mr. Halvorsen had more limited access to Project Ridgeline materials—the confidential strategic initiative at the center of the Company's trade secret misappropriation claims—relative to other departing employees at the Director level. Mr. Halvorsen's role in Seasonal Planning & Analytics was largely focused on historical demand modeling and did not involve direct participation in the forward-looking competitive strategy components of Project Ridgeline. Verdana's counsel represented during negotiations that Mr. Halvorsen's role at Verdana would be in a non-overlapping functional area, which further supported the parties' agreement to waive the clawback.
Total Halvorsen Forfeiture
E. Lucia Fernandez-Gill — Director, Vendor Relations (Domestic)
Employment Summary
• Title: Director, Vendor Relations (Domestic)
• Hire Date: Approximately February 2020
• Tenure at CRH: Approximately 5 years
• Base Salary (FY2024): $248,000
• Non-Compete Period: 12 months post-termination
• Resignation Date: February 7, 2025 (effective immediately)
RSU Grant — Single Award
Ms. Fernandez-Gill holds a single RSU grant with a grant date of approximately April 2021 and a grant-date face value of $80,000. The grant was made approximately fourteen months after her date of hire, consistent with CRH's practice during the relevant period of making equity awards to Director-level employees after completion of an initial probationary period. Under the standard four-year ratable vesting schedule, each annual tranche has a value of $20,000 (25% × $80,000):
• Tranche 1: Vested approximately April 2022 — $20,000
• Tranche 2: Vested approximately April 2023 — $20,000
• Tranche 3: Vested approximately April 2024 — $20,000
• Tranche 4: Scheduled vesting approximately April 2025 — $20,000 (not yet vested as of February 7, 2025)
As of the resignation date, three tranches had vested and one remained unvested. The unvested RSU value is $20,000.
Clawback Analysis
The most recently vested tranche (Tranche 3) vested in approximately April 2024, which is within the twelve-month look-back period. Ms. Fernandez-Gill's employment agreement contains the standard clawback trigger, and her role as Director of Vendor Relations (Domestic) placed her at the center of CRH's proprietary vendor relationships and pricing structures—information of significant competitive value to Verdana. The Settlement Term Sheet retains the full clawback for Ms. Fernandez-Gill in the amount of $20,000. This treatment is consistent with the clawback applied to Ms. Osei, the other Director-level employee for whom the clawback was not waived, reflecting the Company's position that both individuals had access to competitively sensitive information that materially increased the harm associated with their departures.
Total Fernandez-Gill Forfeiture
F. Nathan Tsao — Senior Manager, eCommerce Merchandising
Employment Summary
• Title: Senior Manager, eCommerce Merchandising
• Hire Date: Approximately February 2022
• Tenure at CRH: Approximately 3 years
• Base Salary (FY2024): $195,000
• Non-Compete Period: 12 months post-termination
• Resignation Date: February 7, 2025 (effective immediately)
RSU Grant — Single Award
Mr. Tsao holds a single RSU grant with a grant date of approximately March 2022 and a grant-date face value of $60,000. Under the standard four-year ratable vesting schedule, each annual tranche has a value of $15,000 (25% × $60,000):
• Tranche 1: Vested approximately March 2023 — $15,000
• Tranche 2: Vested approximately March 2024 — $15,000
• Tranche 3: Scheduled vesting approximately March 2025 — $15,000 (not yet vested as of February 7, 2025)
• Tranche 4: Scheduled vesting approximately March 2026 — $15,000 (not yet vested as of February 7, 2025)
As of the resignation date, two tranches had vested and two remained unvested. The unvested RSU value is $30,000 (2 tranches × $15,000).
Clawback Analysis
The most recently vested tranche (Tranche 2) vested in approximately March 2024, placing it within the twelve-month look-back period. However, per the Settlement Term Sheet, the clawback was waived for Mr. Tsao. The settlement framework established a tiered approach to the clawback remedy, under which employees at the Senior Manager level were exempted from the clawback component of the forfeiture. This treatment reflects the parties' agreement that the clawback—which is a discretionary remedy under the Plan—should be calibrated to the employee's seniority, compensation level, and degree of responsibility for the competitive harm at issue. Mr. Tsao's relatively junior position and his more limited access to the strategic and financial information underlying the Company's claims supported the waiver of the clawback in his case.
Total Tsao Forfeiture
G. Kira Johansson — Senior Manager, Category Analytics
Employment Summary
• Title: Senior Manager, Category Analytics
• Hire Date: Approximately March 2021
• Tenure at CRH: Approximately 4 years
• Base Salary (FY2024): $192,000
• Non-Compete Period: 12 months post-termination
• Resignation Date: February 7, 2025 (effective immediately)
RSU Grant #1 — Initial Hire Grant
Ms. Johansson received an initial RSU grant upon hiring, with a grant date of approximately March 2021 and a grant-date face value of $68,000. Under the four-year ratable vesting schedule, each annual tranche has a value of $17,000 (25% × $68,000):
• Tranche 1: Vested approximately March 2022 — $17,000
• Tranche 2: Vested approximately March 2023 — $17,000
• Tranche 3: Vested approximately March 2024 — $17,000
• Tranche 4: Scheduled vesting approximately March 2025 — $17,000 (not yet vested as of February 7, 2025)
As of the resignation date, three tranches had vested and one remained unvested. The unvested RSU value for Grant #1 is $17,000. The most recently vested tranche (Tranche 3) vested in approximately March 2024, within the twelve-month look-back period.
RSU Grant #2 — Performance/Retention Grant
Ms. Johansson received a second RSU grant as a performance and retention award, with a grant date of approximately September 2023 and a grant-date face value of $40,000. Under the four-year ratable vesting schedule, each annual tranche has a value of $10,000 (25% × $40,000):
• Tranche 1: Vested approximately September 2024 — $10,000
• Tranche 2: Scheduled vesting approximately September 2025 — $10,000 (not yet vested)
• Tranche 3: Scheduled vesting approximately September 2026 — $10,000 (not yet vested)
• Tranche 4: Scheduled vesting approximately September 2027 — $10,000 (not yet vested)
As of the resignation date, one tranche had vested and three remained unvested. The unvested RSU value for Grant #2 is $30,000 (3 tranches × $10,000). The most recently vested tranche (Tranche 1) vested in approximately September 2024, within the twelve-month look-back period.
Total Unvested RSU Value (Both Grants)
The combined unvested RSU value across both grants is $47,000 ($17,000 from Grant #1 + $30,000 from Grant #2).
Clawback Analysis
Although each grant has a most recently vested tranche falling within the twelve-month look-back period (Grant #1 Tranche 3 at $17,000 and Grant #2 Tranche 1 at $10,000, totaling $27,000 in potential clawback), the clawback was waived for Ms. Johansson under the same Senior Manager-level exemption applied to Mr. Tsao, as described above.
Settlement Adjustment — Pro-Rata Service Credit
Under the Settlement Term Sheet, Ms. Johansson's unvested forfeiture amount was adjusted to reflect a negotiated pro-rata service credit applicable to Grant #2. Specifically, as of the resignation date, Ms. Johansson had completed approximately five months of the twelve-month service period required for the next vesting tranche of Grant #2 (Tranche 2, scheduled to vest in September 2025). The parties agreed to apply a pro-rata credit of $10,000 against the combined unvested amount, reducing the total forfeiture from $47,000 to $37,000. This credit was negotiated in the context of Ms. Johansson's relatively junior position and her role as a data analyst rather than a strategic decision-maker, and is documented in the settlement worksheet.
Total Johansson Forfeiture
V. Summary Table — Individual Forfeitures
The following table summarizes the forfeiture calculations for each of the seven departing employees addressed in this memorandum, reflecting all settlement adjustments as described in the individual calculations above:
The table above reflects only active (i.e., not fully vested) grants for purposes of forfeiture. Fully vested grants from prior award cycles (e.g., Linden's Grant #1 at $240,000, Kaczmarek's Grant #1 at $200,000, and Halvorsen's Grant #1 at $100,000) are excluded because they result in no forfeiture under either the strict Plan terms or the settlement framework.
VI. Aggregate Forfeiture — All Eight Departing Employees
Combining the forfeitures calculated in this memorandum with the Rathore forfeiture addressed in the companion memorandum of even date, the total equity forfeiture across all eight members of the departing group (the "Rathore Group") is as follows:
This combined equity forfeiture of $849,500 is one component of the total economic recovery to CRH under the settlement. The full settlement value is summarized as follows: