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MEDIATION POSITION SUMMARY

CASCADE RETAIL HOLDINGS INC.

CONFIDENTIAL – FOR MEDIATION PURPOSES ONLY

March 17, 2025

Prepared by: Calderwood & Harkness LLP Bernard Crawford, Partner (Lead Counsel) Renata Vasquez, Partner James Underwood, Of Counsel Devon Archer, Associate

On Behalf of: Cascade Retail Holdings Inc. ("CRH")

Matter: Cascade Retail Holdings Inc. v. Rathore et al. C.A. No. 2025-0198-MTZ Delaware Court of Chancery

C&H Matter No.: 1038-00006

Mediation: Scheduled for March 18, 2025 The Honorable Philip Ashford (Ret.) Meridian ADR Services LLC Reference: Meridian-2025-0318-CRH

CONFIDENTIALITY NOTICE: This document is submitted in connection with mediation proceedings before the Honorable Philip Ashford (Ret.) of Meridian ADR Services LLC. This document, and all communications made during or in connection with the mediation, are confidential and inadmissible for any purpose outside of mediation, in accordance with 6 Del. C. § 8005 (Delaware Uniform Mediation Act), the parties' agreement to mediate, and all applicable rules of evidence. This document is protected by Federal Rule of Evidence 408 and its Delaware counterpart, Delaware Rule of Evidence 408, and may not be used for any purpose in any pending or subsequent proceeding.

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I. EXECUTIVE SUMMARY

Cascade Retail Holdings Inc. ("CRH") is a publicly traded omnichannel retail company listed on the Nasdaq Stock Market under the ticker symbol CRHL. Headquartered in Seattle, Washington, CRH operates 387 brick-and-mortar retail locations across 34 states and maintains a significant direct-to-consumer ecommerce platform. For fiscal year 2024, CRH reported consolidated revenue of approximately $6.82 billion and maintains a market capitalization of approximately $4.1 billion as of the date of this memorandum. CRH is a recognized leader in the American retail landscape, with particular strength in the home goods, seasonal décor, and private-label apparel product categories.

CRH's merchandising division is the core competitive engine of the company. In FY2024, the merchandising division generated $2.3 billion in gross merchandise value ("GMV"), representing the single largest driver of CRH's profitability and shareholder value. The division is responsible for product selection, vendor relationships, pricing strategy, private-label development, and seasonal buying—functions that collectively define CRH's differentiation in a highly competitive retail marketplace.

On February 7, 2025, at approximately 4:47 PM Pacific Standard Time, eight senior merchandising employees—led by Priya Rathore, CRH's former Senior Vice President of Merchandising—resigned simultaneously from CRH. The coordinated nature of the departures was designed to maximize disruption to CRH's operations at a critical juncture in the company's seasonal buying cycle. Within days of their departure, all eight individuals (the "Rathore Group") commenced employment with Verdana Commerce Group, Inc. ("Verdana" or "VCG"), a direct competitor to CRH that competes in 28 overlapping product categories.

The departing employees occupied some of the most sensitive positions within CRH's organization. Collectively, the Rathore Group had access to CRH's most closely guarded proprietary information, including but not limited to: (i) a five-year strategic category expansion plan known internally as "Project Ridgeline"; (ii) vendor negotiation playbooks containing detailed strategies, pricing benchmarks, and contract terms for CRH's most important vendor relationships; (iii) proprietary seasonal buying algorithms that drive CRH's purchasing decisions; (iv) private-label sourcing strategies, including supplier identities, cost structures, and margin targets; and (v) customer segmentation data reflecting years of investment in data science and analytics capabilities.

The threat to CRH was not merely theoretical. A forensic analysis conducted by Pinnacle Forensics LLC, under the direction of Dr. Rajiv Anand, confirmed that 14,327 files comprising approximately 2.8 gigabytes of data were exfiltrated from CRH systems to personal cloud storage accounts between January 10 and February 4, 2025. This period corresponds precisely with the window during which the Rathore Group was coordinating its departure and negotiating employment terms with Verdana. The exfiltrated files include Project Ridgeline presentations, vendor negotiation term sheets, private-label cost models, and customer segmentation datasets.

In response to this coordinated betrayal, CRH filed a Verified Complaint on March 5, 2025 in the Delaware Court of Chancery, asserting five causes of action: (1) breach of restrictive covenant against all eight individual defendants; (2) breach of confidentiality obligations against all eight individual defendants; (3) misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act ("DUTSA") against all individual defendants and Verdana; (4) tortious interference with contractual relations against Verdana; and (5) civil conspiracy against all individual defendants and Verdana.

On March 7, 2025, Vice Chancellor Margaret T. Zhao granted CRH's application for a temporary restraining order ("TRO"), finding that CRH had demonstrated a likelihood of success on the merits and that irreparable harm would result absent injunctive relief. CRH posted a $2.5 million injunction bond through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419) in connection with the TRO.

CRH enters this mediation from a position of considerable strength. The forensic evidence of data exfiltration is compelling. The evidence of coordinated recruitment by Verdana—including a private dinner meeting between Verdana's CEO, Verdana's PE sponsor's managing partner, and Priya Rathore on January 6, 2025—is clear. The contractual provisions are unambiguous. The Court has already recognized the strength of CRH's position by granting the TRO. CRH's opening mediation position seeks to: (i) enforce meaningful modified restrictive covenants that protect CRH's competitive position while reflecting reasonable concessions from the original contractual terms; (ii) obtain substantial monetary compensation reflecting the harm caused by the coordinated departure, data theft, and tortious interference; (iii) secure complete data return and destruction, verified through an independent forensic audit of Verdana's systems; and (iv) install an independent compliance monitor to ensure adherence to the settlement terms, backed by retained Court jurisdiction and the enforcement powers of a Consent Order.

II. PARTIES TO THE MEDIATION

A. Cascade Retail Holdings Inc. (Plaintiff)

Cascade Retail Holdings Inc. is a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol CRHL. CRH's principal executive offices are located at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119. CRH's registered agent in Delaware is Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801. CRH's Employer Identification Number is 91-2847351.

CRH is led by Chief Executive Officer Marcus Langford, who has served in that capacity since 2018. The company's General Counsel is Theresa Yun-Park, and the Chief People Officer is Roland Ashby. CRH operates 387 brick-and-mortar retail locations across 34 states and maintains a robust direct-to-consumer ecommerce platform that generated approximately $1.4 billion in online revenue in FY2024. CRH's consolidated FY2024 revenue was approximately $6.82 billion, and its market capitalization as of the date of this memorandum is approximately $4.1 billion.

CRH is represented in this matter by Calderwood & Harkness LLP. Bernard Crawford, Partner, serves as lead counsel, supported by Renata Vasquez, Partner; James Underwood, Of Counsel; and Devon Archer, Associate.

B. Individual Defendants (the "Rathore Group")

The eight individual defendants—collectively referred to as the "Rathore Group"—are former senior employees of CRH's merchandising division. Each individual defendant signed an employment agreement with CRH containing restrictive covenants, including non-competition, non-solicitation, and perpetual confidentiality provisions. All employment agreements are governed by Delaware law. The individual defendants are as follows:

1. Priya Rathore — Former Senior Vice President, Merchandising. Ms. Rathore served CRH from June 3, 2019 through February 7, 2025, a tenure of approximately 5.7 years. Her base compensation at the time of departure was $485,000. Ms. Rathore's Amended and Restated Employment Agreement, dated March 15, 2021 (the "A&R Employment Agreement"), contains an 18-month non-competition covenant (United States geographic scope) and a 24-month non-solicitation covenant. Ms. Rathore now holds the title of President, Merchandising & Strategy at Verdana Commerce Group, Inc.

2. Derek Linden — Former Vice President, Hardlines Merchandising. Mr. Linden served CRH for approximately 7 years. His base compensation at the time of departure was $340,000. His employment agreement contains an 18-month non-competition covenant.

3. Sonia Kaczmarek — Former Vice President, Softlines Merchandising. Ms. Kaczmarek served CRH for approximately 5 years. Her base compensation at the time of departure was $325,000. Her employment agreement contains an 18-month non-competition covenant.

4. Amara Osei — Former Director, Private Label Strategy. Ms. Osei served CRH for approximately 4 years. Her base compensation at the time of departure was $265,000. Her employment agreement contains a 12-month non-competition covenant.

5. Brent Halvorsen — Former Director, Seasonal Planning & Analytics. Mr. Halvorsen served CRH for approximately 6 years. His base compensation at the time of departure was $258,000. His employment agreement contains a 12-month non-competition covenant.

6. Lucia Fernandez-Gill — Former Director, Vendor Relations (Domestic). Ms. Fernandez-Gill served CRH for approximately 5 years. Her base compensation at the time of departure was $248,000. Her employment agreement contains a 12-month non-competition covenant.

7. Nathan Tsao — Former Senior Manager, eCommerce Merchandising. Mr. Tsao served CRH for approximately 3 years. His base compensation at the time of departure was $195,000. His employment agreement contains a 12-month non-competition covenant.

8. Kira Johansson — Former Senior Manager, Category Analytics. Ms. Johansson served CRH for approximately 4 years. Her base compensation at the time of departure was $192,000. Her employment agreement contains a 12-month non-competition covenant.

The individual defendants are represented by Whitfield, Nygaard & Doyle LLP. Catherine Nygaard serves as lead counsel, with Travis Beaumont, Associate, as co-counsel.

C. Verdana Commerce Group, Inc. (Co-Defendant)

Verdana Commerce Group, Inc. is a Delaware corporation. Verdana is privately held and is majority-owned by Greystone Capital Partners, LP through Greystone Capital Fund VII, LP. Verdana's principal offices are located at 400 Christiana Gateway, Suite 700, Wilmington, Delaware 19801. Verdana's Employer Identification Number is 51-3982647.

Verdana is a direct competitor to CRH, with operations overlapping in 28 product categories. Verdana's FY2024 revenue is estimated at approximately $1.9 billion. Verdana is led by Chief Executive Officer Warren Dietrich, and its General Counsel is Helen Tsoi.

In January 2025, Verdana publicly announced a "transformational growth initiative" with the stated objective of reaching $4 billion in annual revenue by 2028. Notably, Verdana's growth initiative specifically cited planned expansion into CRH's strongest product categories, including private-label home goods and seasonal décor. The timing and focus of this announcement align precisely with Verdana's recruitment of the Rathore Group.

Verdana's majority private equity sponsor is Greystone Capital Partners, LP. Greystone acquired its majority stake in Verdana in Q3 2023 at an enterprise value of $2.4 billion. The acquisition was made through Greystone Capital Fund VII, LP, which has total committed capital of $8.5 billion. Greystone's Managing Partner is Elliot Westbrook. The financial resources of Greystone and Fund VII enabled Verdana to offer enhanced compensation packages to the Rathore Group, including aggregate sign-on bonuses totaling $6.2 million—sums designed to induce the Rathore Group to breach their contractual obligations to CRH and join Verdana.

Verdana is represented by Blackhall & Soren LLP. Gavin Blackhall serves as lead counsel, with Meredith Lau, Senior Associate, as co-counsel.

III. SUMMARY OF CLAIMS

A. Breach of Restrictive Covenant (Count I — All Eight Individual Defendants)

CRH's first cause of action asserts breach of contract against each of the eight individual defendants for violation of the non-competition and non-solicitation provisions of their respective employment agreements.

Each departing employee signed an employment agreement with CRH containing a restrictive covenant that includes: (i) a non-competition provision prohibiting the employee from working for a direct competitor of CRH in any capacity related to merchandising or retail operations for a specified period following termination of employment; (ii) a non-solicitation provision prohibiting the employee from soliciting CRH employees and vendors for a specified period; and (iii) a perpetual confidentiality provision prohibiting the disclosure or use of CRH proprietary information.

With respect to Ms. Rathore specifically, her Amended and Restated Employment Agreement dated March 15, 2021 contains an 18-month non-competition covenant covering the entire United States and a 24-month non-solicitation covenant. The A&R Employment Agreement was executed in connection with Ms. Rathore's promotion to Senior Vice President and was supported by additional consideration in the form of a $150,000 promotion bonus and a $725,000 restricted stock unit ("RSU") grant with a four-year ratable annual vesting schedule.

By joining Verdana Commerce Group—a direct competitor to CRH—in merchandising roles substantially similar to or more senior than those they held at CRH, each individual defendant is in clear and unambiguous breach of the non-competition provision of his or her employment agreement. The breaches are ongoing and will continue for the duration of the defendants' employment at Verdana in competing roles.

B. Breach of Confidentiality Obligations (Count II — All Eight Individual Defendants)

CRH's second cause of action asserts breach of the perpetual confidentiality obligations contained in each individual defendant's employment agreement. These confidentiality provisions require that employees not disclose, use, or permit the use of any proprietary or confidential information of CRH, both during and after their employment.

Each of the eight defendants had substantial access to CRH's most sensitive proprietary information by virtue of their senior roles within the merchandising division. Specifically, the Rathore Group had access to: (i) Project Ridgeline, CRH's five-year strategic category expansion roadmap detailing planned new product category entries, market positioning strategies, capital allocation plans, and competitive response scenarios; (ii) vendor negotiation playbooks containing detailed strategies, historical pricing data, contractual terms, and negotiation benchmarks used in CRH's relationships with its key vendors; (iii) proprietary seasonal buying algorithms that drive CRH's purchasing decisions and inventory management; (iv) private-label sourcing strategies, including the identities of CRH's private-label suppliers, cost structures, quality specifications, and margin targets; and (v) customer segmentation data reflecting years of investment in CRH's data science and analytics capabilities.

The forensic evidence produced by Pinnacle Forensics LLC demonstrates that the defendants actively exfiltrated 14,327 files, comprising approximately 2.8 gigabytes of data, from CRH's Aldermere Systems and Pinnacle Health IT systems to personal cloud storage accounts between January 10 and February 4, 2025. This systematic data exfiltration constitutes a clear and willful breach of the confidentiality obligations contained in each defendant's employment agreement.

C. Misappropriation of Trade Secrets Under DUTSA (Count III — All Individual Defendants and Verdana)

CRH's third cause of action asserts misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act, 6 Del. C. § 2001 et seq. ("DUTSA"), against all eight individual defendants and against Verdana Commerce Group.

Project Ridgeline and the related proprietary materials accessed and exfiltrated by the Rathore Group qualify as trade secrets within the meaning of DUTSA. These materials derive independent economic value from not being generally known to or readily ascertainable by other persons who can obtain economic value from their disclosure or use, and they have been the subject of efforts that are reasonable under the circumstances to maintain their secrecy. CRH maintained comprehensive measures to protect the secrecy of these materials, including: restricted access controls limiting the number of employees with access to Project Ridgeline materials; confidentiality agreements executed by all employees with access; robust IT controls including multi-factor authentication, data loss prevention software, and access logging; physical security measures at CRH's headquarters; and clear marking of confidential and proprietary materials.

The data exfiltration between January 10 and February 4, 2025 constitutes actual misappropriation. The Rathore Group acquired CRH trade secrets through improper means—specifically, by downloading proprietary files to personal cloud storage in anticipation of their departure to a direct competitor, in violation of their confidentiality obligations and in breach of the trust reposed in them by CRH. Verdana is jointly liable as a recipient of the misappropriated trade secrets, knowing or having reason to know that the information was acquired through improper means. Verdana's recruitment of CRH's entire senior merchandising team, combined with its simultaneous announcement of a growth strategy targeting CRH's core product categories, demonstrates that Verdana intended to benefit from and use CRH's trade secrets.

D. Tortious Interference with Contractual Relations (Count IV — Verdana)

CRH's fourth cause of action asserts tortious interference with contractual relations against Verdana Commerce Group. To establish tortious interference under Delaware law, CRH must demonstrate: (1) the existence of a contract; (2) the defendant's knowledge of the contract; (3) intentional interference with the contract; (4) resulting breach; and (5) damages. CRH satisfies each element.

Verdana had knowledge of the restrictive covenants binding the Rathore Group. Non-competition and non-solicitation agreements are industry standard for senior merchandising executives in the retail sector, and Verdana—as a direct competitor in the same industry—was well aware of this fact. More specifically, the evidence demonstrates that Priya Rathore's covenant obligations were discussed with Verdana in connection with her recruitment. Despite this knowledge, Verdana actively recruited the Rathore Group and induced them to breach their contractual obligations.

The evidence of intentional interference is compelling. On January 6, 2025, Warren Dietrich (Verdana CEO) and Elliot Westbrook (Greystone Capital Managing Partner) held a private dinner meeting with Priya Rathore in New York. This meeting was identified through the investigation conducted by Aurelian Investigations Group Inc. Following this meeting, Verdana offered Ms. Rathore the position of President, Merchandising & Strategy, with a compensation package consisting of a base salary of $650,000, a target annual bonus of $520,000 (80% of base salary), 1.5% fully diluted equity in Verdana, and a sign-on bonus of $1.5 million. The aggregate sign-on bonuses offered to all eight members of the Rathore Group totaled $6.2 million. These extraordinary compensation packages were funded by Greystone Capital's financial resources and were designed to overcome any reluctance the Rathore Group might have about breaching their contractual obligations to CRH.

Verdana's tortious interference directly caused the Rathore Group to breach their employment agreements with CRH, resulting in substantial and ongoing damages to CRH.

E. Civil Conspiracy (Count V — All Individual Defendants and Verdana)

CRH's fifth cause of action asserts civil conspiracy against all eight individual defendants and Verdana Commerce Group. The evidence demonstrates a coordinated scheme among the defendants to breach their contractual obligations to CRH and misappropriate CRH's trade secrets for the benefit of Verdana.

The coordinated nature of the conspiracy is evidenced by multiple factors. First, encrypted messaging among the members of the Rathore Group between January 13 and January 24, 2025 demonstrates active coordination of the departure timing and logistics. Second, the simultaneous resignation of all eight employees at precisely 4:47 PM Pacific Standard Time on Friday, February 7, 2025 was clearly choreographed to maximize disruption to CRH's operations—a Friday afternoon departure designed to give the Rathore Group the weekend to begin their transition to Verdana before CRH could fully respond. Third, the staggered signing of Verdana offer letters—with Ms. Rathore signing on January 27, 2025 and the remaining seven employees signing between January 28 and February 4, 2025—confirms a concert of action in which Ms. Rathore first committed to the move and then coordinated the recruitment of her direct reports. Fourth, Verdana's February 14, 2025 press release publicly confirmed the hiring of the entire team, using the headline "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth," demonstrating that Verdana viewed the coordinated departure as a strategic acquisition of an entire functional team rather than a series of independent hiring decisions.

IV. EVIDENTIARY STRENGTHS SUPPORTING CRH'S POSITION

A. Forensic Evidence of Data Exfiltration

CRH retained Pinnacle Forensics LLC to conduct a comprehensive forensic investigation of the data exfiltration. The engagement is led by Dr. Rajiv Anand, a recognized expert in digital forensics with extensive experience in trade secret misappropriation matters. Pinnacle Forensics conducted forensic imaging of all CRH-issued devices assigned to the members of the Rathore Group and performed a detailed analysis of CRH's cloud access logs, including Aldermere Systems and Pinnacle Health IT audit trails.

The forensic investigation confirmed that 14,327 files, comprising approximately 2.8 gigabytes of data, were downloaded from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts maintained by members of the Rathore Group. The exfiltration occurred over a period of approximately 26 days, from January 10 through February 4, 2025. This period corresponds precisely with the window during which the Rathore Group was actively negotiating employment terms with Verdana and coordinating their departure.

The exfiltrated files include, but are not limited to: (i) Project Ridgeline presentations and supporting analyses, including the five-year strategic category expansion roadmap, market entry analyses, competitive positioning studies, and financial projections; (ii) vendor negotiation term sheets reflecting CRH's pricing strategies, contractual terms, and negotiation positions with its most significant vendors; (iii) private-label cost models detailing supplier identities, per-unit costs, quality specifications, and margin targets for CRH's proprietary brands; and (iv) customer segmentation data reflecting CRH's investments in analytics capabilities, including demographic profiles, purchasing behavior patterns, and targeted marketing strategies.

The Pinnacle Forensics preliminary report was produced during the expedited discovery period ordered by the Court between March 12 and March 18, 2025. The forensic evidence is robust, detailed, and directly corroborative of CRH's claims of deliberate and systematic data theft.

B. Investigative Evidence of Coordinated Recruitment

CRH retained Aurelian Investigations Group Inc. to investigate the circumstances surrounding the Rathore Group's departure. The investigation was led by Sandra Fielding, a former federal law enforcement officer with over two decades of experience in corporate investigations.

The Aurelian investigation confirmed the following key facts:

• January 6, 2025: A private dinner meeting took place in New York City among Warren Dietrich (Verdana CEO), Elliot Westbrook (Greystone Capital Managing Partner), and Priya Rathore. This meeting is significant because it demonstrates that the recruitment of Ms. Rathore was not an organic or passive process but was actively driven at the highest levels of Verdana and its PE sponsor.

• January 13–24, 2025: A series of encrypted messaging exchanges took place among all eight members of the Rathore Group during this period. The encrypted messaging platform was used specifically to coordinate departure timing, discuss Verdana offer terms, and plan the simultaneous resignation. The existence and timing of these communications were identified through metadata analysis and corroborating evidence.

Additionally, Verdana's February 14, 2025 press release—issued just one week after the Rathore Group's departure from CRH—publicly confirmed the hiring of the entire team and expressly tied the hiring to Verdana's growth strategy. The press release, titled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth," demonstrates that Verdana was fully aware of the coordinated nature of the departure and viewed it as a strategic initiative to accelerate its competitive position at CRH's expense. A copy of the press release is attached as Appendix 6.

C. Clear Contractual Provisions

The restrictive covenant provisions in each of the eight employment agreements are clear, unambiguous, and enforceable under Delaware law. Each agreement contains: (i) a non-competition provision specifying a defined restrictive period and geographic scope (United States); (ii) a non-solicitation provision covering both CRH employees and CRH vendors; and (iii) a perpetual confidentiality provision.

All eight employment agreements are governed by Delaware law, and each agreement includes a forum selection clause designating the Delaware Court of Chancery as the exclusive forum for disputes arising from the agreement. Delaware courts have consistently upheld reasonable restrictive covenants, particularly where the employee occupied a senior position with access to sensitive proprietary information and received adequate consideration.

Each employment agreement was supported by adequate consideration. For all eight employees, the initial offer of employment—including substantial base compensation ranging from $192,000 to $485,000—constituted valid consideration. For employees who received promotions, additional bonuses, or equity grants during their tenure, these additional benefits provided independent consideration for the restrictive covenants. Most significantly, Ms. Rathore's A&R Employment Agreement, executed on March 15, 2021, was supported by additional consideration consisting of a $150,000 promotion bonus and a $725,000 RSU grant with a four-year ratable annual vesting schedule. Delaware law is well-settled that continued employment, promotions, and additional compensation constitute sufficient consideration for post-employment restrictive covenants.

D. Existing Court Orders

The strength of CRH's position has already been recognized by the Delaware Court of Chancery. On March 7, 2025, Vice Chancellor Margaret T. Zhao granted CRH's application for a temporary restraining order. In granting the TRO, the Court found that CRH had demonstrated a likelihood of success on the merits and that CRH would suffer irreparable harm absent injunctive relief. The Court's analysis specifically addressed the forensic evidence of data exfiltration and the coordinated nature of the departure. CRH posted a $2.5 million injunction bond through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419) in connection with the TRO.

The defendants filed an opposition to the TRO on March 15, 2025, arguing that the restrictive covenants are overbroad under Delaware's reasonableness standard. However, the defendants' opposition has notable weaknesses given the scope of the coordinated breach, the volume of data exfiltration, and the direct competitive overlap between CRH and Verdana. The Court's willingness to grant the TRO notwithstanding the defendants' arguments underscores the strength of CRH's position heading into mediation.

E. Damages Evidence

CRH retained Veltrano Consulting Group LLC to quantify the economic harm caused by the defendants' conduct. The engagement is led by Dr. Franklin Oberg, a recognized expert in economic damages analysis, who was engaged on March 3, 2025. Dr. Oberg and his team have commenced their analysis and are prepared to provide testimony regarding CRH's damages at trial if necessary.

The potential damages to CRH are substantial. CRH's merchandising division generated $2.3 billion in gross merchandise value in FY2024, and that revenue stream is directly at risk as a result of the Rathore Group's departure and the exfiltration of CRH's most sensitive proprietary information. Verdana's announced $4 billion growth target—specifically aimed at CRH's strongest product categories—amplifies the competitive threat. The aggregate sign-on bonuses of $6.2 million paid by Verdana to the Rathore Group reflect Verdana's own assessment of the perceived value of the proprietary knowledge that the Rathore Group would bring to Verdana, further corroborating the magnitude of CRH's potential damages.

While the Veltrano analysis is ongoing, preliminary estimates suggest that even modest market share erosion attributable to the defendants' conduct could result in damages measured in the tens of millions of dollars. The settlement demands set forth in this memorandum represent a fraction of CRH's potential damages exposure at trial.

V. CRH'S OPENING MEDIATION POSITION

CRH presents the following opening mediation position. CRH has structured its position to reflect both the strength of its legal claims and a genuine willingness to resolve this matter on reasonable terms. The positions set forth below represent CRH's opening proposals; CRH is prepared to engage constructively with the mediator and the opposing parties to reach a resolution that protects CRH's legitimate business interests.

A. Modified Restrictive Covenant Terms

CRH recognizes that mediation requires flexibility. Accordingly, CRH's opening position proposes modified restrictive covenant terms that are narrower in scope than the original contractual provisions while remaining sufficient to protect CRH's proprietary information and competitive position.

1. Non-Competition. Priya Rathore: CRH seeks enforcement of a minimum 15-month non-competition period, running from Ms. Rathore's resignation date of February 7, 2025 through May 6, 2026. This represents a meaningful concession from the full 18-month contractual period, which would extend through August 6, 2026. In addition, CRH proposes narrowing the scope of the non-compete from all retail operations (as stated in the original agreement) to the three most competitively sensitive product categories in which Verdana has announced its growth strategy directly targeting CRH's market position:

(i) Home goods;

(ii) Seasonal décor; and

(iii) Private-label apparel.

Ms. Rathore would be permitted to work at Verdana in any capacity that does not involve these three product categories. This narrowing of scope is a substantial concession that demonstrates CRH's reasonableness while protecting the specific competitive interests most directly threatened by the Rathore Group's departure and data exfiltration.

Derek Linden and Sonia Kaczmarek: CRH seeks enforcement of a minimum 12-month non-competition period for Mr. Linden and Ms. Kaczmarek, running from February 7, 2025 through February 6, 2026. Their original employment agreements contain 18-month non-competition covenants, making the proposed 12-month period a significant concession of six months. As with Ms. Rathore, the scope of the non-compete would be limited to the three specified product categories.

Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson: CRH seeks enforcement of a minimum 9-month non-competition period for these five employees, running from February 7, 2025 through November 6, 2025. Their original employment agreements contain 12-month non-competition covenants, making the proposed 9-month period a concession of three months. The scope of the non-compete would similarly be limited to the three specified product categories.

The geographic scope for all non-competition provisions would remain the United States, consistent with the original agreements and with the nationwide scope of both CRH's and Verdana's retail operations.

2. Non-Solicitation (Employees). CRH seeks enforcement of an 18-month non-solicitation period covering all eight defendants, running from February 7, 2025 through August 6, 2026. This provision would prohibit each defendant from directly or indirectly soliciting, recruiting, encouraging, or inducing any CRH employee to leave CRH's employment or to accept employment with Verdana or any other entity. This provision is essential given the coordinated nature of the Rathore Group's departure and the demonstrated willingness of the individual defendants to recruit CRH employees as part of a concerted effort to undermine CRH's operations.

3. Non-Solicitation (Vendors). CRH seeks enforcement of a 12-month non-solicitation period covering all eight defendants with respect to CRH's top 50 vendors (by annual spend), running from February 7, 2025 through February 6, 2026. This provision would prohibit each defendant from directly or indirectly soliciting, contacting, or engaging CRH's top 50 vendors for the purpose of diverting business from CRH or competing with CRH for vendor terms, allocations, or exclusivity arrangements.

CRH will provide the list of its top 50 vendors under seal or subject to confidential treatment in the settlement agreement. This provision is particularly critical given Ms. Fernandez-Gill's former role as Director of Vendor Relations (Domestic) and the Rathore Group's collective access to CRH's vendor negotiation playbooks, which contain detailed information about pricing terms, negotiation strategies, and relationship dynamics with CRH's most important suppliers.

4. Confidentiality Obligations. The perpetual confidentiality obligations contained in each individual defendant's employment agreement shall remain in full force and effect as originally stated. These obligations cover all proprietary information, trade secrets, and confidential business information of CRH, including without limitation all Project Ridgeline materials, vendor negotiation playbooks, seasonal buying algorithms, private-label sourcing strategies, and customer segmentation data. CRH does not propose any modification to these perpetual obligations, which are essential to the ongoing protection of CRH's most sensitive information.

B. Monetary Demands

1. Settlement Payment from Verdana. CRH's opening demand is a lump-sum settlement payment of $12,000,000 from Verdana Commerce Group, Inc., payable within 30 calendar days of execution of the definitive settlement agreement.

This demand is justified by the totality of Verdana's conduct. Verdana actively recruited CRH's entire senior merchandising team through a coordinated campaign that began no later than January 6, 2025 and was driven at the highest levels of Verdana's management and its PE sponsor. Verdana offered aggregate sign-on bonuses of $6.2 million—an extraordinary sum funded by Greystone Capital's financial resources—specifically designed to induce the Rathore Group to breach their contractual obligations to CRH. Verdana received, directly or constructively, exfiltrated CRH proprietary data, including trade secrets of enormous competitive value. Verdana's public announcement of a growth strategy targeting CRH's core product categories confirms that Verdana intended to leverage the Rathore Group's knowledge of CRH's strategies, vendor relationships, and operational playbooks to gain a competitive advantage at CRH's expense.

The $12,000,000 demand reflects a fraction of CRH's potential damages given the $2.3 billion merchandising GMV at stake and the competitive threat posed by Verdana's $4 billion growth initiative. CRH acknowledges a willingness to negotiate this figure within a reasonable range, with a target floor of $8,500,000, but emphasizes that any settlement payment must reflect the severity of Verdana's misconduct and the magnitude of the harm to CRH.

2. Equity Forfeitures. CRH demands the forfeiture of unvested and clawback-eligible equity held by the individual defendants, as follows:

Priya Rathore: Ms. Rathore received an RSU grant of $725,000 under her A&R Employment Agreement dated March 15, 2021, with a four-year ratable annual vesting schedule (25% per year). Three tranches have vested: March 15, 2022; March 15, 2023; and March 15, 2024, representing 75% of the total grant, or $543,750 in value at grant. The fourth and final tranche, representing 25% of the grant ($181,250), remained unvested as of Ms. Rathore's resignation on February 7, 2025.

In addition, CRH invokes the for-cause clawback provision contained in Section 8.4 of the A&R Employment Agreement, which provides that any breach of the restrictive covenant provisions triggers a clawback of the most recently vested tranche of equity. The most recently vested tranche vested on March 15, 2024, with a value of $181,250. Accordingly, the total equity forfeiture for Ms. Rathore is $362,500 ($181,250 unvested + $181,250 clawback).

Other Seven Employees: Based on the individual equity grant schedules for the remaining seven members of the Rathore Group, the aggregate equity forfeiture for these employees totals $487,000. The individual amounts are set forth in the detailed equity calculations maintained by CRH's compensation department and will be provided in connection with any definitive settlement agreement.

Total Equity Forfeitures: The combined equity forfeitures for all eight members of the Rathore Group total $849,500.

Upon execution of the settlement agreement, CRH will instruct Northland Trust Company, CRH's transfer agent, to cancel the unvested equity awards and process the clawback of the applicable vested tranche for Ms. Rathore.

3. Litigation Cost Reimbursement. CRH demands reimbursement of $500,000 toward the litigation costs incurred by CRH in connection with this matter. CRH's total litigation costs to date are estimated at approximately $1,850,000, encompassing: Calderwood & Harkness's attorney fees and expenses for the preparation and filing of the Verified Complaint, the TRO application and hearing, expedited discovery, and mediation preparation; Pinnacle Forensics LLC's fees for forensic imaging, analysis, and reporting; Aurelian Investigations Group Inc.'s investigation fees; and Veltrano Consulting Group LLC's preliminary damages analysis fees.

The $500,000 demand represents partial reimbursement—approximately 27% of CRH's total costs—and is reasonable given that the defendants' misconduct necessitated the emergency litigation and the substantial investigative and forensic expenditures that CRH was forced to undertake. CRH acknowledges a willingness to negotiate this figure to a floor of approximately $400,000.

4. Total Economic Recovery (Opening Position). CRH's opening mediation position seeks total economic recovery as follows:

C. Data Return and Destruction Protocol

The return and destruction of CRH's proprietary data is among CRH's highest priorities in this mediation. The forensic evidence of systematic data exfiltration makes this element of the settlement non-negotiable.

1. Scope. All 14,327 files exfiltrated from CRH systems between January 10 and February 4, 2025—together with any and all copies, derivatives, summaries, excerpts, analyses, or materials incorporating or derived from CRH data—must be returned to CRH or certified destroyed. This obligation extends to all personal cloud storage accounts, personal devices (including laptops, tablets, smartphones, and external storage media), personal email accounts, and any Verdana systems, devices, or cloud environments to which CRH data may have been transferred, uploaded, forwarded, or otherwise made accessible.

2. Timeline. All exfiltrated data must be returned to CRH or certified destroyed within 10 business days of the execution of the definitive settlement agreement. Each individual defendant must execute a sworn certification of data destruction, in a form acceptable to CRH, affirming under penalty of perjury that all CRH proprietary data has been returned or destroyed and that no copies, derivatives, or materials incorporating CRH data remain in the defendant's possession, custody, or control. Verdana Commerce Group must execute a corporate certification, signed by an authorized officer, certifying that no CRH proprietary data resides on any Verdana system, device, or cloud environment, and that Verdana has conducted a reasonable internal investigation to verify the accuracy of the certification.

3. Independent Forensic Audit of Verdana. To provide CRH with meaningful assurance that its proprietary data has been fully purged from Verdana's systems, CRH proposes that Pinnacle Forensics LLC, under the direction of Dr. Rajiv Anand, conduct an independent forensic audit of Verdana's systems following the completion of the data destruction process. The audit would be conducted at Verdana's sole expense, subject to a reasonable cost cap that CRH proposes be set at $200,000.

The audit scope would encompass all Verdana systems, devices, and cloud environments to which any member of the Rathore Group has had or may have had access since joining Verdana. The audit would verify that all CRH proprietary data has been destroyed and that no CRH confidential information remains in Verdana's possession. Pinnacle Forensics would provide a written report of its findings to all parties and to the mediator or, if the matter has settled, to the compliance monitor and the Court.

4. Ongoing Restrictions. CRH recognizes that certain CRH proprietary information may be retained in the memory or knowledge of the departing employees as a result of their years of service at CRH. The data return and destruction protocol does not and cannot reach information retained solely in human memory. However, any CRH proprietary information retained in the memory or knowledge of the departing employees shall remain subject to the perpetual confidentiality obligations contained in each employee's employment agreement. The defendants may not use, disclose, or permit the use of such information in any manner, whether in their work at Verdana or otherwise.

D. Compliance Monitoring

1. Appointment of Independent Compliance Monitor. CRH proposes the joint appointment of an independent compliance monitor for a period of not less than 12 months from the date of execution of the definitive settlement agreement. The compliance monitor would be responsible for verifying adherence to the modified restrictive covenants, non-solicitation provisions, data-destruction obligations, and other material terms of the settlement.

CRH proposes Aldwyn Compliance Solutions LLC as the independent compliance monitor. Aldwyn is located at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, and has extensive experience serving as an independent monitor in trade secret and restrictive covenant matters. The selection of Aldwyn is subject to the counterparties' review and agreement; CRH is open to discussing alternative monitor candidates.

2. Monitor Scope and Procedures. The compliance monitor would conduct quarterly verification reviews covering the following areas:

(a) Non-Competition Compliance: Review of the roles, responsibilities, and work assignments of each member of the Rathore Group at Verdana to verify compliance with the modified non-competition restrictions. This review would include examination of organizational charts, job descriptions, internal communications, and project assignments to confirm that the restricted individuals are not working in the three specified product categories (home goods, seasonal décor, and private-label apparel) during the applicable restrictive period.

(b) Employee Non-Solicitation Compliance: Review of Verdana's hiring records and recruitment activities to verify that no former CRH employees have been solicited, recruited, or hired by Verdana at the inducement of any member of the Rathore Group during the 18-month non-solicitation period.

(c) Vendor Non-Solicitation Compliance: Review of Verdana's vendor activity and relationships, cross-referenced against CRH's top 50 vendor list, to verify that no member of the Rathore Group has solicited or engaged CRH's top vendors in breach of the 12-month vendor non-solicitation provision.

(d) Data Destruction Compliance: Periodic spot checks to verify continued compliance with the data destruction obligations, including confirmation that no CRH proprietary data has been reconstituted, recreated, or reintroduced into Verdana's systems.

The compliance monitor would have access to relevant records of both CRH and Verdana to the extent necessary to fulfill its monitoring function, subject to a confidentiality and information-sharing protocol to be agreed upon by the parties as part of the settlement. The protocol would include appropriate safeguards to protect the confidential business information of all parties.

3. Cost Allocation. CRH proposes that the costs of the compliance monitoring program be allocated 75% to Verdana and 25% to CRH. CRH estimates total monitor costs at approximately $360,000 for the 12-month monitoring term, based on preliminary discussions with Aldwyn Compliance Solutions and comparable engagements. Under CRH's proposed allocation, Verdana's share would be approximately $270,000 and CRH's share would be approximately $90,000. CRH acknowledges a willingness to negotiate the cost-sharing arrangement, with a floor position of 60% Verdana and 40% CRH.

4. Escalation and Remedies. Any suspected violation identified by the compliance monitor would trigger a defined escalation protocol. Upon identification of a potential violation, the monitor would provide written notice to all parties, including a detailed description of the suspected violation and the supporting evidence. The parties would have 10 business days to respond to the notice. If the suspected violation is not resolved to the monitor's satisfaction, the monitor would issue a formal finding, which would be filed with the Court under the retained jurisdiction of the Consent Order.

Upon the filing of a formal finding, any party may seek an expedited hearing before Vice Chancellor Zhao to address the violation. The Consent Order would expressly provide for contempt remedies, including monetary sanctions and additional injunctive relief, for any violation of the settlement terms.

E. Consent Order and Retained Court Jurisdiction

CRH seeks a stipulated Consent Order to be filed with the Delaware Court of Chancery in C.A. No. 2025-0198-MTZ. The Consent Order would incorporate all material terms of the settlement, including:

(i) The modified restrictive covenant terms, including the non-competition, non-solicitation (employees), and non-solicitation (vendors) provisions;

(ii) The data return and destruction obligations, including the independent forensic audit;

(iii) The appointment, scope, and procedures of the compliance monitor; and

(iv) Retained jurisdiction of the Court for enforcement purposes, including the authority to impose contempt remedies for violations of the Consent Order.

The Consent Order is a critical element of CRH's mediation position. By embedding the settlement terms in a Court order, CRH obtains enforcement tools that go beyond ordinary contract remedies. Violations of the Consent Order would constitute contempt of court, providing CRH with access to the Court's contempt power, including fines, sanctions, and additional injunctive relief. The retained jurisdiction ensures continuous judicial oversight throughout the restrictive period and the compliance monitoring term, giving all parties confidence that the settlement terms will be honored and enforced.

F. Additional Terms

1. Mutual Non-Disparagement. CRH is prepared to agree to a standard mutual non-disparagement clause among CRH, the individual members of the Rathore Group, and Verdana Commerce Group. Each party would agree not to make any public statements or communications that are disparaging, defamatory, or injurious to the reputation of any other party. The non-disparagement clause would be subject to the following carve-outs:

(i) Legally compelled disclosures, including testimony under oath and responses to lawful subpoenas;

(ii) CRH's SEC reporting obligations, including disclosures required under Regulation FD, Form 8-K, and periodic reports filed with the Securities and Exchange Commission; and

(iii) Communications with CRH's independent auditors, Hargrove & Tillett CPA, PLLC, and CRH's lenders, including Keypoint National Bank, N.A., in connection with audit, compliance, and lending activities.

2. Release Structure. Upon full performance of all settlement obligations—including completion of the 12-month compliance monitor period, full payment of the settlement amount, completion of all equity forfeitures, and verified data destruction—the parties would exchange mutual general releases covering all claims, counterclaims, demands, and causes of action arising out of or related to the facts and circumstances giving rise to C.A. No. 2025-0198-MTZ. The releases would not cover future breaches of the modified restrictive covenants during their operative periods or any breach of the terms of the Consent Order during the compliance monitoring period. This structure ensures that the settlement provides finality while preserving CRH's ability to enforce the covenants throughout their terms.

3. Dismissal. The parties would file a stipulation for dismissal of C.A. No. 2025-0198-MTZ with prejudice upon satisfactory completion of the 12-month compliance monitor term and full performance of all settlement obligations. The dismissal would be contingent: if any party breaches the Consent Order during the 12-month compliance monitoring period, the Court would retain jurisdiction and the action would remain active for enforcement purposes. This contingent structure incentivizes compliance and ensures that the Court's enforcement authority is available throughout the settlement term.

4. Injunction Bond. Upon entry of the Consent Order and dissolution of the TRO currently in effect, CRH will request release of the $2.5 million injunction bond posted through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419). The Consent Order, with its retained jurisdiction and enforcement provisions, would provide CRH with protections superior to the TRO, making the continued maintenance of the injunction bond unnecessary.

VI. ANTICIPATED COUNTERARGUMENTS AND RESPONSES

CRH's counsel has carefully considered the counterarguments that the defendants and Verdana are likely to raise during the mediation session and offers the following responses.

A. Overbreadth of Restrictive Covenants

Anticipated Argument: In their March 15, 2025 opposition to the TRO, the defendants argued that the restrictive covenants in their employment agreements are overbroad and unenforceable under Delaware's reasonableness standard. Defendants contended that the geographic scope (United States), the duration (12–18 months), and the breadth of prohibited activities render the covenants unreasonable as applied.

CRH Response: The original covenants are reasonable in scope given the senior positions occupied by each member of the Rathore Group and the extraordinary breadth of their access to CRH's most sensitive proprietary information. Delaware courts have consistently upheld restrictive covenants with similar scope and duration for senior executives with access to trade secrets and strategic information. See, e.g., Granite Harbor Corporation Techs., Inc. v. Velmoran, 2010 WL 610725 (Del. Ch. Feb. 18, 2010) (upholding 12-month non-compete for employee with access to confidential customer information). Moreover, CRH's mediation position already reflects significant concessions from the original contractual terms. CRH proposes reducing Ms. Rathore's non-compete from 18 months to 15 months, reducing the non-compete for Mr. Linden and Ms. Kaczmarek from 18 months to 12 months, and reducing the non-compete for the remaining five employees from 12 months to 9 months. CRH further proposes narrowing the scope of the non-compete from all retail operations to three specific product categories. These substantial concessions demonstrate CRH's reasonableness and undercut any argument that CRH is seeking to enforce unreasonably broad restrictions.

B. Adequacy of Consideration

Anticipated Argument: For shorter-tenure employees, particularly Nathan Tsao (3 years) and Kira Johansson (4 years), the defendants may argue that the consideration provided for the restrictive covenants was inadequate. Defendants may contend that initial employment alone is insufficient consideration for a post-employment non-compete, particularly where the employee was not a senior executive at the time of hire.

CRH Response: Each employee received substantial consideration for the restrictive covenants. At the threshold level, each employee received an offer of employment with CRH at highly competitive base compensation levels—ranging from $192,000 (Ms. Johansson) to $485,000 (Ms. Rathore)—in exchange for agreeing to the terms of the employment agreement, including the restrictive covenant provisions. Delaware law is well-settled that initial employment constitutes valid consideration for a restrictive covenant. See Kan-Di-Ki, LLC v. Susi, 2015 WL 4503210 (Del. Ch. July 22, 2015). Beyond initial employment, each employee received substantial additional benefits during their tenure, including annual compensation, performance bonuses, equity grants, promotional increases, and access to CRH's proprietary training and development programs. These additional benefits provide independent consideration supporting the enforceability of the covenants.

C. Inevitable Disclosure Doctrine

Anticipated Argument: The defendants may argue that CRH cannot establish actual use of trade secrets by any member of the Rathore Group at Verdana, and that CRH's claims rest impermissibly on the inevitable disclosure doctrine, which has not been expressly adopted by Delaware courts.

CRH Response: CRH's claims do not rest on the inevitable disclosure doctrine alone. CRH's misappropriation claim under DUTSA is grounded in actual, documented exfiltration of 14,327 files comprising approximately 2.8 gigabytes of proprietary data. The forensic evidence produced by Pinnacle Forensics demonstrates that the data exfiltration was deliberate, systematic, and occurred during the precise window in which the Rathore Group was negotiating its departure to a direct competitor. This is not a case where CRH is speculating about the potential for misuse; CRH has demonstrated actual misappropriation through direct evidence of data theft.

To the extent the inevitable disclosure doctrine is relevant, the facts of this case present the strongest possible case for its application. The Rathore Group had access to CRH's most competitively sensitive information, including Project Ridgeline—a five-year strategic roadmap that would give any competitor a detailed blueprint for CRH's future plans. Verdana competes directly with CRH in 28 product categories and has announced a growth initiative targeting CRH's core categories. The defendants have assumed substantially similar or more senior roles at Verdana. Under these circumstances, the use of CRH's trade secrets in the defendants' work at Verdana is virtually inevitable.

D. Undue Hardship on Individual Defendants

Anticipated Argument: The defendants may argue that enforcement of the restrictive covenants imposes disproportionate hardship on the individual members of the Rathore Group, who would be effectively precluded from working in their chosen field for the duration of the restrictive period.

CRH Response: CRH's modified proposal substantially mitigates any hardship to the individual defendants. By narrowing the scope of the non-compete from all retail operations to three specific product categories—home goods, seasonal décor, and private-label apparel—CRH's proposal permits the Rathore Group members to continue working at Verdana in any non-competing capacity. The defendants are free to work in Verdana's other product categories, in non-merchandising functions, or in any other position that does not involve the three restricted categories. Moreover, CRH has proposed reducing the duration of the restrictive period for each defendant below the contractual maximum. Any remaining hardship is of the defendants' own making. The Rathore Group voluntarily chose to depart CRH in a coordinated, surreptitious manner, to exfiltrate thousands of proprietary files, and to join a direct competitor in violation of their contractual obligations. Having created this situation through their own misconduct, the defendants cannot now claim undue hardship as a shield against accountability.

VII. CRH'S SETTLEMENT AUTHORITY AND NEGOTIATION PARAMETERS

THIS SECTION IS FOR INTERNAL REFERENCE ONLY AND IS NOT TO BE SHARED WITH THE MEDIATOR OR OPPOSING PARTIES.

CRH's Board of Directors and senior management have authorized the following settlement parameters for the March 18, 2025 mediation session.

Opening Position: Total economic recovery of $13,349,500, comprising a $12,000,000 cash settlement payment from Verdana, $849,500 in equity forfeitures, and $500,000 in litigation cost reimbursement.

Target Settlement Range: CRH's target is total economic recovery in the range of $9,500,000 to $10,500,000.

Floor Position: CRH's minimum acceptable settlement is $8,500,000 in cash settlement payment from Verdana, plus $849,500 in equity forfeitures, plus $400,000 in litigation cost reimbursement, for a total floor of $9,749,500. CRH's lead counsel is authorized to settle at or above this floor without further Board approval.

Maximum Concessions on Modified Non-Compete:

• Priya Rathore: CRH is willing to accept a 12-month non-compete (February 7, 2025 through February 6, 2026) as the final concession from the contractual 18-month period.

• Other seven employees: CRH is willing to accept a 9-month non-compete (February 7, 2025 through November 6, 2025) as the final concession.

• Category limitation to three categories (home goods, seasonal décor, and private-label apparel) is acceptable and is already reflected in CRH's opening position.

Maximum Concession on Compliance Monitor Cost-Sharing: CRH will accept a 60% Verdana / 40% CRH cost allocation as its final position.

Maximum Concession on Forensic A

MEDIATION POSITION SUMMARY
CASCADE RETAIL HOLDINGS INC.
CONFIDENTIAL – FOR MEDIATION PURPOSES ONLY
March 17, 2025
Prepared by: Calderwood & Harkness LLP Bernard Crawford, Partner (Lead Counsel) Renata Vasquez, Partner James Underwood, Of Counsel Devon Archer, Associate
On Behalf of: Cascade Retail Holdings Inc. ("CRH")
Matter: Cascade Retail Holdings Inc. v. Rathore et al. C.A. No. 2025-0198-MTZ Delaware Court of Chancery
C&H Matter No.: 1038-00006
Mediation: Scheduled for March 18, 2025 The Honorable Philip Ashford (Ret.) Meridian ADR Services LLC Reference: Meridian-2025-0318-CRH
CONFIDENTIALITY NOTICE: This document is submitted in connection with mediation proceedings before the Honorable Philip Ashford (Ret.) of Meridian ADR Services LLC. This document, and all communications made during or in connection with the mediation, are confidential and inadmissible for any purpose outside of mediation, in accordance with 6 Del. C. § 8005 (Delaware Uniform Mediation Act), the parties' agreement to mediate, and all applicable rules of evidence. This document is protected by Federal Rule of Evidence 408 and its Delaware counterpart, Delaware Rule of Evidence 408, and may not be used for any purpose in any pending or subsequent proceeding.
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I. EXECUTIVE SUMMARY
Cascade Retail Holdings Inc. ("CRH") is a publicly traded omnichannel retail company listed on the Nasdaq Stock Market under the ticker symbol CRHL. Headquartered in Seattle, Washington, CRH operates 387 brick-and-mortar retail locations across 34 states and maintains a significant direct-to-consumer ecommerce platform. For fiscal year 2024, CRH reported consolidated revenue of approximately $6.82 billion and maintains a market capitalization of approximately $4.1 billion as of the date of this memorandum. CRH is a recognized leader in the American retail landscape, with particular strength in the home goods, seasonal décor, and private-label apparel product categories.
CRH's merchandising division is the core competitive engine of the company. In FY2024, the merchandising division generated $2.3 billion in gross merchandise value ("GMV"), representing the single largest driver of CRH's profitability and shareholder value. The division is responsible for product selection, vendor relationships, pricing strategy, private-label development, and seasonal buying—functions that collectively define CRH's differentiation in a highly competitive retail marketplace.
On February 7, 2025, at approximately 4:47 PM Pacific Standard Time, eight senior merchandising employees—led by Priya Rathore, CRH's former Senior Vice President of Merchandising—resigned simultaneously from CRH. The coordinated nature of the departures was designed to maximize disruption to CRH's operations at a critical juncture in the company's seasonal buying cycle. Within days of their departure, all eight individuals (the "Rathore Group") commenced employment with Verdana Commerce Group, Inc. ("Verdana" or "VCG"), a direct competitor to CRH that competes in 28 overlapping product categories.
The departing employees occupied some of the most sensitive positions within CRH's organization. Collectively, the Rathore Group had access to CRH's most closely guarded proprietary information, including but not limited to: (i) a five-year strategic category expansion plan known internally as "Project Ridgeline"; (ii) vendor negotiation playbooks containing detailed strategies, pricing benchmarks, and contract terms for CRH's most important vendor relationships; (iii) proprietary seasonal buying algorithms that drive CRH's purchasing decisions; (iv) private-label sourcing strategies, including supplier identities, cost structures, and margin targets; and (v) customer segmentation data reflecting years of investment in data science and analytics capabilities.
The threat to CRH was not merely theoretical. A forensic analysis conducted by Pinnacle Forensics LLC, under the direction of Dr. Rajiv Anand, confirmed that 14,327 files comprising approximately 2.8 gigabytes of data were exfiltrated from CRH systems to personal cloud storage accounts between January 10 and February 4, 2025. This period corresponds precisely with the window during which the Rathore Group was coordinating its departure and negotiating employment terms with Verdana. The exfiltrated files include Project Ridgeline presentations, vendor negotiation term sheets, private-label cost models, and customer segmentation datasets.
In response to this coordinated betrayal, CRH filed a Verified Complaint on March 5, 2025 in the Delaware Court of Chancery, asserting five causes of action: (1) breach of restrictive covenant against all eight individual defendants; (2) breach of confidentiality obligations against all eight individual defendants; (3) misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act ("DUTSA") against all individual defendants and Verdana; (4) tortious interference with contractual relations against Verdana; and (5) civil conspiracy against all individual defendants and Verdana.
On March 7, 2025, Vice Chancellor Margaret T. Zhao granted CRH's application for a temporary restraining order ("TRO"), finding that CRH had demonstrated a likelihood of success on the merits and that irreparable harm would result absent injunctive relief. CRH posted a $2.5 million injunction bond through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419) in connection with the TRO.
CRH enters this mediation from a position of considerable strength. The forensic evidence of data exfiltration is compelling. The evidence of coordinated recruitment by Verdana—including a private dinner meeting between Verdana's CEO, Verdana's PE sponsor's managing partner, and Priya Rathore on January 6, 2025—is clear. The contractual provisions are unambiguous. The Court has already recognized the strength of CRH's position by granting the TRO. CRH's opening mediation position seeks to: (i) enforce meaningful modified restrictive covenants that protect CRH's competitive position while reflecting reasonable concessions from the original contractual terms; (ii) obtain substantial monetary compensation reflecting the harm caused by the coordinated departure, data theft, and tortious interference; (iii) secure complete data return and destruction, verified through an independent forensic audit of Verdana's systems; and (iv) install an independent compliance monitor to ensure adherence to the settlement terms, backed by retained Court jurisdiction and the enforcement powers of a Consent Order.
II. PARTIES TO THE MEDIATION
A. Cascade Retail Holdings Inc. (Plaintiff)
Cascade Retail Holdings Inc. is a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol CRHL. CRH's principal executive offices are located at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119. CRH's registered agent in Delaware is Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801. CRH's Employer Identification Number is 91-2847351.
CRH is led by Chief Executive Officer Marcus Langford, who has served in that capacity since 2018. The company's General Counsel is Theresa Yun-Park, and the Chief People Officer is Roland Ashby. CRH operates 387 brick-and-mortar retail locations across 34 states and maintains a robust direct-to-consumer ecommerce platform that generated approximately $1.4 billion in online revenue in FY2024. CRH's consolidated FY2024 revenue was approximately $6.82 billion, and its market capitalization as of the date of this memorandum is approximately $4.1 billion.
CRH is represented in this matter by Calderwood & Harkness LLP. Bernard Crawford, Partner, serves as lead counsel, supported by Renata Vasquez, Partner; James Underwood, Of Counsel; and Devon Archer, Associate.
B. Individual Defendants (the "Rathore Group")
The eight individual defendants—collectively referred to as the "Rathore Group"—are former senior employees of CRH's merchandising division. Each individual defendant signed an employment agreement with CRH containing restrictive covenants, including non-competition, non-solicitation, and perpetual confidentiality provisions. All employment agreements are governed by Delaware law. The individual defendants are as follows:
1. Priya Rathore — Former Senior Vice President, Merchandising. Ms. Rathore served CRH from June 3, 2019 through February 7, 2025, a tenure of approximately 5.7 years. Her base compensation at the time of departure was $485,000. Ms. Rathore's Amended and Restated Employment Agreement, dated March 15, 2021 (the "A&R Employment Agreement"), contains an 18-month non-competition covenant (United States geographic scope) and a 24-month non-solicitation covenant. Ms. Rathore now holds the title of President, Merchandising & Strategy at Verdana Commerce Group, Inc.
2. Derek Linden — Former Vice President, Hardlines Merchandising. Mr. Linden served CRH for approximately 7 years. His base compensation at the time of departure was $340,000. His employment agreement contains an 18-month non-competition covenant.
3. Sonia Kaczmarek — Former Vice President, Softlines Merchandising. Ms. Kaczmarek served CRH for approximately 5 years. Her base compensation at the time of departure was $325,000. Her employment agreement contains an 18-month non-competition covenant.
4. Amara Osei — Former Director, Private Label Strategy. Ms. Osei served CRH for approximately 4 years. Her base compensation at the time of departure was $265,000. Her employment agreement contains a 12-month non-competition covenant.
5. Brent Halvorsen — Former Director, Seasonal Planning & Analytics. Mr. Halvorsen served CRH for approximately 6 years. His base compensation at the time of departure was $258,000. His employment agreement contains a 12-month non-competition covenant.
6. Lucia Fernandez-Gill — Former Director, Vendor Relations (Domestic). Ms. Fernandez-Gill served CRH for approximately 5 years. Her base compensation at the time of departure was $248,000. Her employment agreement contains a 12-month non-competition covenant.
7. Nathan Tsao — Former Senior Manager, eCommerce Merchandising. Mr. Tsao served CRH for approximately 3 years. His base compensation at the time of departure was $195,000. His employment agreement contains a 12-month non-competition covenant.
8. Kira Johansson — Former Senior Manager, Category Analytics. Ms. Johansson served CRH for approximately 4 years. Her base compensation at the time of departure was $192,000. Her employment agreement contains a 12-month non-competition covenant.
The individual defendants are represented by Whitfield, Nygaard & Doyle LLP. Catherine Nygaard serves as lead counsel, with Travis Beaumont, Associate, as co-counsel.
C. Verdana Commerce Group, Inc. (Co-Defendant)
Verdana Commerce Group, Inc. is a Delaware corporation. Verdana is privately held and is majority-owned by Greystone Capital Partners, LP through Greystone Capital Fund VII, LP. Verdana's principal offices are located at 400 Christiana Gateway, Suite 700, Wilmington, Delaware 19801. Verdana's Employer Identification Number is 51-3982647.
Verdana is a direct competitor to CRH, with operations overlapping in 28 product categories. Verdana's FY2024 revenue is estimated at approximately $1.9 billion. Verdana is led by Chief Executive Officer Warren Dietrich, and its General Counsel is Helen Tsoi.
In January 2025, Verdana publicly announced a "transformational growth initiative" with the stated objective of reaching $4 billion in annual revenue by 2028. Notably, Verdana's growth initiative specifically cited planned expansion into CRH's strongest product categories, including private-label home goods and seasonal décor. The timing and focus of this announcement align precisely with Verdana's recruitment of the Rathore Group.
Verdana's majority private equity sponsor is Greystone Capital Partners, LP. Greystone acquired its majority stake in Verdana in Q3 2023 at an enterprise value of $2.4 billion. The acquisition was made through Greystone Capital Fund VII, LP, which has total committed capital of $8.5 billion. Greystone's Managing Partner is Elliot Westbrook. The financial resources of Greystone and Fund VII enabled Verdana to offer enhanced compensation packages to the Rathore Group, including aggregate sign-on bonuses totaling $6.2 million—sums designed to induce the Rathore Group to breach their contractual obligations to CRH and join Verdana.
Verdana is represented by Blackhall & Soren LLP. Gavin Blackhall serves as lead counsel, with Meredith Lau, Senior Associate, as co-counsel.
III. SUMMARY OF CLAIMS
A. Breach of Restrictive Covenant (Count I — All Eight Individual Defendants)
CRH's first cause of action asserts breach of contract against each of the eight individual defendants for violation of the non-competition and non-solicitation provisions of their respective employment agreements.
Each departing employee signed an employment agreement with CRH containing a restrictive covenant that includes: (i) a non-competition provision prohibiting the employee from working for a direct competitor of CRH in any capacity related to merchandising or retail operations for a specified period following termination of employment; (ii) a non-solicitation provision prohibiting the employee from soliciting CRH employees and vendors for a specified period; and (iii) a perpetual confidentiality provision prohibiting the disclosure or use of CRH proprietary information.
With respect to Ms. Rathore specifically, her Amended and Restated Employment Agreement dated March 15, 2021 contains an 18-month non-competition covenant covering the entire United States and a 24-month non-solicitation covenant. The A&R Employment Agreement was executed in connection with Ms. Rathore's promotion to Senior Vice President and was supported by additional consideration in the form of a $150,000 promotion bonus and a $725,000 restricted stock unit ("RSU") grant with a four-year ratable annual vesting schedule.
By joining Verdana Commerce Group—a direct competitor to CRH—in merchandising roles substantially similar to or more senior than those they held at CRH, each individual defendant is in clear and unambiguous breach of the non-competition provision of his or her employment agreement. The breaches are ongoing and will continue for the duration of the defendants' employment at Verdana in competing roles.
B. Breach of Confidentiality Obligations (Count II — All Eight Individual Defendants)
CRH's second cause of action asserts breach of the perpetual confidentiality obligations contained in each individual defendant's employment agreement. These confidentiality provisions require that employees not disclose, use, or permit the use of any proprietary or confidential information of CRH, both during and after their employment.
Each of the eight defendants had substantial access to CRH's most sensitive proprietary information by virtue of their senior roles within the merchandising division. Specifically, the Rathore Group had access to: (i) Project Ridgeline, CRH's five-year strategic category expansion roadmap detailing planned new product category entries, market positioning strategies, capital allocation plans, and competitive response scenarios; (ii) vendor negotiation playbooks containing detailed strategies, historical pricing data, contractual terms, and negotiation benchmarks used in CRH's relationships with its key vendors; (iii) proprietary seasonal buying algorithms that drive CRH's purchasing decisions and inventory management; (iv) private-label sourcing strategies, including the identities of CRH's private-label suppliers, cost structures, quality specifications, and margin targets; and (v) customer segmentation data reflecting years of investment in CRH's data science and analytics capabilities.
The forensic evidence produced by Pinnacle Forensics LLC demonstrates that the defendants actively exfiltrated 14,327 files, comprising approximately 2.8 gigabytes of data, from CRH's Aldermere Systems and Pinnacle Health IT systems to personal cloud storage accounts between January 10 and February 4, 2025. This systematic data exfiltration constitutes a clear and willful breach of the confidentiality obligations contained in each defendant's employment agreement.
C. Misappropriation of Trade Secrets Under DUTSA (Count III — All Individual Defendants and Verdana)
CRH's third cause of action asserts misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act, 6 Del. C. § 2001 et seq. ("DUTSA"), against all eight individual defendants and against Verdana Commerce Group.
Project Ridgeline and the related proprietary materials accessed and exfiltrated by the Rathore Group qualify as trade secrets within the meaning of DUTSA. These materials derive independent economic value from not being generally known to or readily ascertainable by other persons who can obtain economic value from their disclosure or use, and they have been the subject of efforts that are reasonable under the circumstances to maintain their secrecy. CRH maintained comprehensive measures to protect the secrecy of these materials, including: restricted access controls limiting the number of employees with access to Project Ridgeline materials; confidentiality agreements executed by all employees with access; robust IT controls including multi-factor authentication, data loss prevention software, and access logging; physical security measures at CRH's headquarters; and clear marking of confidential and proprietary materials.
The data exfiltration between January 10 and February 4, 2025 constitutes actual misappropriation. The Rathore Group acquired CRH trade secrets through improper means—specifically, by downloading proprietary files to personal cloud storage in anticipation of their departure to a direct competitor, in violation of their confidentiality obligations and in breach of the trust reposed in them by CRH. Verdana is jointly liable as a recipient of the misappropriated trade secrets, knowing or having reason to know that the information was acquired through improper means. Verdana's recruitment of CRH's entire senior merchandising team, combined with its simultaneous announcement of a growth strategy targeting CRH's core product categories, demonstrates that Verdana intended to benefit from and use CRH's trade secrets.
D. Tortious Interference with Contractual Relations (Count IV — Verdana)
CRH's fourth cause of action asserts tortious interference with contractual relations against Verdana Commerce Group. To establish tortious interference under Delaware law, CRH must demonstrate: (1) the existence of a contract; (2) the defendant's knowledge of the contract; (3) intentional interference with the contract; (4) resulting breach; and (5) damages. CRH satisfies each element.
Verdana had knowledge of the restrictive covenants binding the Rathore Group. Non-competition and non-solicitation agreements are industry standard for senior merchandising executives in the retail sector, and Verdana—as a direct competitor in the same industry—was well aware of this fact. More specifically, the evidence demonstrates that Priya Rathore's covenant obligations were discussed with Verdana in connection with her recruitment. Despite this knowledge, Verdana actively recruited the Rathore Group and induced them to breach their contractual obligations.
The evidence of intentional interference is compelling. On January 6, 2025, Warren Dietrich (Verdana CEO) and Elliot Westbrook (Greystone Capital Managing Partner) held a private dinner meeting with Priya Rathore in New York. This meeting was identified through the investigation conducted by Aurelian Investigations Group Inc. Following this meeting, Verdana offered Ms. Rathore the position of President, Merchandising & Strategy, with a compensation package consisting of a base salary of $650,000, a target annual bonus of $520,000 (80% of base salary), 1.5% fully diluted equity in Verdana, and a sign-on bonus of $1.5 million. The aggregate sign-on bonuses offered to all eight members of the Rathore Group totaled $6.2 million. These extraordinary compensation packages were funded by Greystone Capital's financial resources and were designed to overcome any reluctance the Rathore Group might have about breaching their contractual obligations to CRH.
Verdana's tortious interference directly caused the Rathore Group to breach their employment agreements with CRH, resulting in substantial and ongoing damages to CRH.
E. Civil Conspiracy (Count V — All Individual Defendants and Verdana)
CRH's fifth cause of action asserts civil conspiracy against all eight individual defendants and Verdana Commerce Group. The evidence demonstrates a coordinated scheme among the defendants to breach their contractual obligations to CRH and misappropriate CRH's trade secrets for the benefit of Verdana.
The coordinated nature of the conspiracy is evidenced by multiple factors. First, encrypted messaging among the members of the Rathore Group between January 13 and January 24, 2025 demonstrates active coordination of the departure timing and logistics. Second, the simultaneous resignation of all eight employees at precisely 4:47 PM Pacific Standard Time on Friday, February 7, 2025 was clearly choreographed to maximize disruption to CRH's operations—a Friday afternoon departure designed to give the Rathore Group the weekend to begin their transition to Verdana before CRH could fully respond. Third, the staggered signing of Verdana offer letters—with Ms. Rathore signing on January 27, 2025 and the remaining seven employees signing between January 28 and February 4, 2025—confirms a concert of action in which Ms. Rathore first committed to the move and then coordinated the recruitment of her direct reports. Fourth, Verdana's February 14, 2025 press release publicly confirmed the hiring of the entire team, using the headline "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth," demonstrating that Verdana viewed the coordinated departure as a strategic acquisition of an entire functional team rather than a series of independent hiring decisions.
IV. EVIDENTIARY STRENGTHS SUPPORTING CRH'S POSITION
A. Forensic Evidence of Data Exfiltration
CRH retained Pinnacle Forensics LLC to conduct a comprehensive forensic investigation of the data exfiltration. The engagement is led by Dr. Rajiv Anand, a recognized expert in digital forensics with extensive experience in trade secret misappropriation matters. Pinnacle Forensics conducted forensic imaging of all CRH-issued devices assigned to the members of the Rathore Group and performed a detailed analysis of CRH's cloud access logs, including Aldermere Systems and Pinnacle Health IT audit trails.
The forensic investigation confirmed that 14,327 files, comprising approximately 2.8 gigabytes of data, were downloaded from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts maintained by members of the Rathore Group. The exfiltration occurred over a period of approximately 26 days, from January 10 through February 4, 2025. This period corresponds precisely with the window during which the Rathore Group was actively negotiating employment terms with Verdana and coordinating their departure.
The exfiltrated files include, but are not limited to: (i) Project Ridgeline presentations and supporting analyses, including the five-year strategic category expansion roadmap, market entry analyses, competitive positioning studies, and financial projections; (ii) vendor negotiation term sheets reflecting CRH's pricing strategies, contractual terms, and negotiation positions with its most significant vendors; (iii) private-label cost models detailing supplier identities, per-unit costs, quality specifications, and margin targets for CRH's proprietary brands; and (iv) customer segmentation data reflecting CRH's investments in analytics capabilities, including demographic profiles, purchasing behavior patterns, and targeted marketing strategies.
The Pinnacle Forensics preliminary report was produced during the expedited discovery period ordered by the Court between March 12 and March 18, 2025. The forensic evidence is robust, detailed, and directly corroborative of CRH's claims of deliberate and systematic data theft.
B. Investigative Evidence of Coordinated Recruitment
CRH retained Aurelian Investigations Group Inc. to investigate the circumstances surrounding the Rathore Group's departure. The investigation was led by Sandra Fielding, a former federal law enforcement officer with over two decades of experience in corporate investigations.
The Aurelian investigation confirmed the following key facts:
• January 6, 2025: A private dinner meeting took place in New York City among Warren Dietrich (Verdana CEO), Elliot Westbrook (Greystone Capital Managing Partner), and Priya Rathore. This meeting is significant because it demonstrates that the recruitment of Ms. Rathore was not an organic or passive process but was actively driven at the highest levels of Verdana and its PE sponsor.
• January 13–24, 2025: A series of encrypted messaging exchanges took place among all eight members of the Rathore Group during this period. The encrypted messaging platform was used specifically to coordinate departure timing, discuss Verdana offer terms, and plan the simultaneous resignation. The existence and timing of these communications were identified through metadata analysis and corroborating evidence.
Additionally, Verdana's February 14, 2025 press release—issued just one week after the Rathore Group's departure from CRH—publicly confirmed the hiring of the entire team and expressly tied the hiring to Verdana's growth strategy. The press release, titled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth," demonstrates that Verdana was fully aware of the coordinated nature of the departure and viewed it as a strategic initiative to accelerate its competitive position at CRH's expense. A copy of the press release is attached as Appendix 6.
C. Clear Contractual Provisions
The restrictive covenant provisions in each of the eight employment agreements are clear, unambiguous, and enforceable under Delaware law. Each agreement contains: (i) a non-competition provision specifying a defined restrictive period and geographic scope (United States); (ii) a non-solicitation provision covering both CRH employees and CRH vendors; and (iii) a perpetual confidentiality provision.
All eight employment agreements are governed by Delaware law, and each agreement includes a forum selection clause designating the Delaware Court of Chancery as the exclusive forum for disputes arising from the agreement. Delaware courts have consistently upheld reasonable restrictive covenants, particularly where the employee occupied a senior position with access to sensitive proprietary information and received adequate consideration.
Each employment agreement was supported by adequate consideration. For all eight employees, the initial offer of employment—including substantial base compensation ranging from $192,000 to $485,000—constituted valid consideration. For employees who received promotions, additional bonuses, or equity grants during their tenure, these additional benefits provided independent consideration for the restrictive covenants. Most significantly, Ms. Rathore's A&R Employment Agreement, executed on March 15, 2021, was supported by additional consideration consisting of a $150,000 promotion bonus and a $725,000 RSU grant with a four-year ratable annual vesting schedule. Delaware law is well-settled that continued employment, promotions, and additional compensation constitute sufficient consideration for post-employment restrictive covenants.
D. Existing Court Orders
The strength of CRH's position has already been recognized by the Delaware Court of Chancery. On March 7, 2025, Vice Chancellor Margaret T. Zhao granted CRH's application for a temporary restraining order. In granting the TRO, the Court found that CRH had demonstrated a likelihood of success on the merits and that CRH would suffer irreparable harm absent injunctive relief. The Court's analysis specifically addressed the forensic evidence of data exfiltration and the coordinated nature of the departure. CRH posted a $2.5 million injunction bond through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419) in connection with the TRO.
The defendants filed an opposition to the TRO on March 15, 2025, arguing that the restrictive covenants are overbroad under Delaware's reasonableness standard. However, the defendants' opposition has notable weaknesses given the scope of the coordinated breach, the volume of data exfiltration, and the direct competitive overlap between CRH and Verdana. The Court's willingness to grant the TRO notwithstanding the defendants' arguments underscores the strength of CRH's position heading into mediation.
E. Damages Evidence
CRH retained Veltrano Consulting Group LLC to quantify the economic harm caused by the defendants' conduct. The engagement is led by Dr. Franklin Oberg, a recognized expert in economic damages analysis, who was engaged on March 3, 2025. Dr. Oberg and his team have commenced their analysis and are prepared to provide testimony regarding CRH's damages at trial if necessary.
The potential damages to CRH are substantial. CRH's merchandising division generated $2.3 billion in gross merchandise value in FY2024, and that revenue stream is directly at risk as a result of the Rathore Group's departure and the exfiltration of CRH's most sensitive proprietary information. Verdana's announced $4 billion growth target—specifically aimed at CRH's strongest product categories—amplifies the competitive threat. The aggregate sign-on bonuses of $6.2 million paid by Verdana to the Rathore Group reflect Verdana's own assessment of the perceived value of the proprietary knowledge that the Rathore Group would bring to Verdana, further corroborating the magnitude of CRH's potential damages.
While the Veltrano analysis is ongoing, preliminary estimates suggest that even modest market share erosion attributable to the defendants' conduct could result in damages measured in the tens of millions of dollars. The settlement demands set forth in this memorandum represent a fraction of CRH's potential damages exposure at trial.
V. CRH'S OPENING MEDIATION POSITION
CRH presents the following opening mediation position. CRH has structured its position to reflect both the strength of its legal claims and a genuine willingness to resolve this matter on reasonable terms. The positions set forth below represent CRH's opening proposals; CRH is prepared to engage constructively with the mediator and the opposing parties to reach a resolution that protects CRH's legitimate business interests.
A. Modified Restrictive Covenant Terms
CRH recognizes that mediation requires flexibility. Accordingly, CRH's opening position proposes modified restrictive covenant terms that are narrower in scope than the original contractual provisions while remaining sufficient to protect CRH's proprietary information and competitive position.
1. Non-Competition. Priya Rathore: CRH seeks enforcement of a minimum 15-month non-competition period, running from Ms. Rathore's resignation date of February 7, 2025 through May 6, 2026. This represents a meaningful concession from the full 18-month contractual period, which would extend through August 6, 2026. In addition, CRH proposes narrowing the scope of the non-compete from all retail operations (as stated in the original agreement) to the three most competitively sensitive product categories in which Verdana has announced its growth strategy directly targeting CRH's market position:
(i) Home goods;
(ii) Seasonal décor; and
(iii) Private-label apparel.
Ms. Rathore would be permitted to work at Verdana in any capacity that does not involve these three product categories. This narrowing of scope is a substantial concession that demonstrates CRH's reasonableness while protecting the specific competitive interests most directly threatened by the Rathore Group's departure and data exfiltration.
Derek Linden and Sonia Kaczmarek: CRH seeks enforcement of a minimum 12-month non-competition period for Mr. Linden and Ms. Kaczmarek, running from February 7, 2025 through February 6, 2026. Their original employment agreements contain 18-month non-competition covenants, making the proposed 12-month period a significant concession of six months. As with Ms. Rathore, the scope of the non-compete would be limited to the three specified product categories.
Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson: CRH seeks enforcement of a minimum 9-month non-competition period for these five employees, running from February 7, 2025 through November 6, 2025. Their original employment agreements contain 12-month non-competition covenants, making the proposed 9-month period a concession of three months. The scope of the non-compete would similarly be limited to the three specified product categories.
The geographic scope for all non-competition provisions would remain the United States, consistent with the original agreements and with the nationwide scope of both CRH's and Verdana's retail operations.
2. Non-Solicitation (Employees). CRH seeks enforcement of an 18-month non-solicitation period covering all eight defendants, running from February 7, 2025 through August 6, 2026. This provision would prohibit each defendant from directly or indirectly soliciting, recruiting, encouraging, or inducing any CRH employee to leave CRH's employment or to accept employment with Verdana or any other entity. This provision is essential given the coordinated nature of the Rathore Group's departure and the demonstrated willingness of the individual defendants to recruit CRH employees as part of a concerted effort to undermine CRH's operations.
3. Non-Solicitation (Vendors). CRH seeks enforcement of a 12-month non-solicitation period covering all eight defendants with respect to CRH's top 50 vendors (by annual spend), running from February 7, 2025 through February 6, 2026. This provision would prohibit each defendant from directly or indirectly soliciting, contacting, or engaging CRH's top 50 vendors for the purpose of diverting business from CRH or competing with CRH for vendor terms, allocations, or exclusivity arrangements.
CRH will provide the list of its top 50 vendors under seal or subject to confidential treatment in the settlement agreement. This provision is particularly critical given Ms. Fernandez-Gill's former role as Director of Vendor Relations (Domestic) and the Rathore Group's collective access to CRH's vendor negotiation playbooks, which contain detailed information about pricing terms, negotiation strategies, and relationship dynamics with CRH's most important suppliers.
4. Confidentiality Obligations. The perpetual confidentiality obligations contained in each individual defendant's employment agreement shall remain in full force and effect as originally stated. These obligations cover all proprietary information, trade secrets, and confidential business information of CRH, including without limitation all Project Ridgeline materials, vendor negotiation playbooks, seasonal buying algorithms, private-label sourcing strategies, and customer segmentation data. CRH does not propose any modification to these perpetual obligations, which are essential to the ongoing protection of CRH's most sensitive information.
B. Monetary Demands
1. Settlement Payment from Verdana. CRH's opening demand is a lump-sum settlement payment of $12,000,000 from Verdana Commerce Group, Inc., payable within 30 calendar days of execution of the definitive settlement agreement.
This demand is justified by the totality of Verdana's conduct. Verdana actively recruited CRH's entire senior merchandising team through a coordinated campaign that began no later than January 6, 2025 and was driven at the highest levels of Verdana's management and its PE sponsor. Verdana offered aggregate sign-on bonuses of $6.2 million—an extraordinary sum funded by Greystone Capital's financial resources—specifically designed to induce the Rathore Group to breach their contractual obligations to CRH. Verdana received, directly or constructively, exfiltrated CRH proprietary data, including trade secrets of enormous competitive value. Verdana's public announcement of a growth strategy targeting CRH's core product categories confirms that Verdana intended to leverage the Rathore Group's knowledge of CRH's strategies, vendor relationships, and operational playbooks to gain a competitive advantage at CRH's expense.
The $12,000,000 demand reflects a fraction of CRH's potential damages given the $2.3 billion merchandising GMV at stake and the competitive threat posed by Verdana's $4 billion growth initiative. CRH acknowledges a willingness to negotiate this figure within a reasonable range, with a target floor of $8,500,000, but emphasizes that any settlement payment must reflect the severity of Verdana's misconduct and the magnitude of the harm to CRH.
2. Equity Forfeitures. CRH demands the forfeiture of unvested and clawback-eligible equity held by the individual defendants, as follows:
Priya Rathore: Ms. Rathore received an RSU grant of $725,000 under her A&R Employment Agreement dated March 15, 2021, with a four-year ratable annual vesting schedule (25% per year). Three tranches have vested: March 15, 2022; March 15, 2023; and March 15, 2024, representing 75% of the total grant, or $543,750 in value at grant. The fourth and final tranche, representing 25% of the grant ($181,250), remained unvested as of Ms. Rathore's resignation on February 7, 2025.
In addition, CRH invokes the for-cause clawback provision contained in Section 8.4 of the A&R Employment Agreement, which provides that any breach of the restrictive covenant provisions triggers a clawback of the most recently vested tranche of equity. The most recently vested tranche vested on March 15, 2024, with a value of $181,250. Accordingly, the total equity forfeiture for Ms. Rathore is $362,500 ($181,250 unvested + $181,250 clawback).
Other Seven Employees: Based on the individual equity grant schedules for the remaining seven members of the Rathore Group, the aggregate equity forfeiture for these employees totals $487,000. The individual amounts are set forth in the detailed equity calculations maintained by CRH's compensation department and will be provided in connection with any definitive settlement agreement.
Total Equity Forfeitures: The combined equity forfeitures for all eight members of the Rathore Group total $849,500.
Upon execution of the settlement agreement, CRH will instruct Northland Trust Company, CRH's transfer agent, to cancel the unvested equity awards and process the clawback of the applicable vested tranche for Ms. Rathore.
3. Litigation Cost Reimbursement. CRH demands reimbursement of $500,000 toward the litigation costs incurred by CRH in connection with this matter. CRH's total litigation costs to date are estimated at approximately $1,850,000, encompassing: Calderwood & Harkness's attorney fees and expenses for the preparation and filing of the Verified Complaint, the TRO application and hearing, expedited discovery, and mediation preparation; Pinnacle Forensics LLC's fees for forensic imaging, analysis, and reporting; Aurelian Investigations Group Inc.'s investigation fees; and Veltrano Consulting Group LLC's preliminary damages analysis fees.
The $500,000 demand represents partial reimbursement—approximately 27% of CRH's total costs—and is reasonable given that the defendants' misconduct necessitated the emergency litigation and the substantial investigative and forensic expenditures that CRH was forced to undertake. CRH acknowledges a willingness to negotiate this figure to a floor of approximately $400,000.
4. Total Economic Recovery (Opening Position). CRH's opening mediation position seeks total economic recovery as follows:
C. Data Return and Destruction Protocol
The return and destruction of CRH's proprietary data is among CRH's highest priorities in this mediation. The forensic evidence of systematic data exfiltration makes this element of the settlement non-negotiable.
1. Scope. All 14,327 files exfiltrated from CRH systems between January 10 and February 4, 2025—together with any and all copies, derivatives, summaries, excerpts, analyses, or materials incorporating or derived from CRH data—must be returned to CRH or certified destroyed. This obligation extends to all personal cloud storage accounts, personal devices (including laptops, tablets, smartphones, and external storage media), personal email accounts, and any Verdana systems, devices, or cloud environments to which CRH data may have been transferred, uploaded, forwarded, or otherwise made accessible.
2. Timeline. All exfiltrated data must be returned to CRH or certified destroyed within 10 business days of the execution of the definitive settlement agreement. Each individual defendant must execute a sworn certification of data destruction, in a form acceptable to CRH, affirming under penalty of perjury that all CRH proprietary data has been returned or destroyed and that no copies, derivatives, or materials incorporating CRH data remain in the defendant's possession, custody, or control. Verdana Commerce Group must execute a corporate certification, signed by an authorized officer, certifying that no CRH proprietary data resides on any Verdana system, device, or cloud environment, and that Verdana has conducted a reasonable internal investigation to verify the accuracy of the certification.
3. Independent Forensic Audit of Verdana. To provide CRH with meaningful assurance that its proprietary data has been fully purged from Verdana's systems, CRH proposes that Pinnacle Forensics LLC, under the direction of Dr. Rajiv Anand, conduct an independent forensic audit of Verdana's systems following the completion of the data destruction process. The audit would be conducted at Verdana's sole expense, subject to a reasonable cost cap that CRH proposes be set at $200,000.
The audit scope would encompass all Verdana systems, devices, and cloud environments to which any member of the Rathore Group has had or may have had access since joining Verdana. The audit would verify that all CRH proprietary data has been destroyed and that no CRH confidential information remains in Verdana's possession. Pinnacle Forensics would provide a written report of its findings to all parties and to the mediator or, if the matter has settled, to the compliance monitor and the Court.
4. Ongoing Restrictions. CRH recognizes that certain CRH proprietary information may be retained in the memory or knowledge of the departing employees as a result of their years of service at CRH. The data return and destruction protocol does not and cannot reach information retained solely in human memory. However, any CRH proprietary information retained in the memory or knowledge of the departing employees shall remain subject to the perpetual confidentiality obligations contained in each employee's employment agreement. The defendants may not use, disclose, or permit the use of such information in any manner, whether in their work at Verdana or otherwise.
D. Compliance Monitoring
1. Appointment of Independent Compliance Monitor. CRH proposes the joint appointment of an independent compliance monitor for a period of not less than 12 months from the date of execution of the definitive settlement agreement. The compliance monitor would be responsible for verifying adherence to the modified restrictive covenants, non-solicitation provisions, data-destruction obligations, and other material terms of the settlement.
CRH proposes Aldwyn Compliance Solutions LLC as the independent compliance monitor. Aldwyn is located at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, and has extensive experience serving as an independent monitor in trade secret and restrictive covenant matters. The selection of Aldwyn is subject to the counterparties' review and agreement; CRH is open to discussing alternative monitor candidates.
2. Monitor Scope and Procedures. The compliance monitor would conduct quarterly verification reviews covering the following areas:
(a) Non-Competition Compliance: Review of the roles, responsibilities, and work assignments of each member of the Rathore Group at Verdana to verify compliance with the modified non-competition restrictions. This review would include examination of organizational charts, job descriptions, internal communications, and project assignments to confirm that the restricted individuals are not working in the three specified product categories (home goods, seasonal décor, and private-label apparel) during the applicable restrictive period.
(b) Employee Non-Solicitation Compliance: Review of Verdana's hiring records and recruitment activities to verify that no former CRH employees have been solicited, recruited, or hired by Verdana at the inducement of any member of the Rathore Group during the 18-month non-solicitation period.
(c) Vendor Non-Solicitation Compliance: Review of Verdana's vendor activity and relationships, cross-referenced against CRH's top 50 vendor list, to verify that no member of the Rathore Group has solicited or engaged CRH's top vendors in breach of the 12-month vendor non-solicitation provision.
(d) Data Destruction Compliance: Periodic spot checks to verify continued compliance with the data destruction obligations, including confirmation that no CRH proprietary data has been reconstituted, recreated, or reintroduced into Verdana's systems.
The compliance monitor would have access to relevant records of both CRH and Verdana to the extent necessary to fulfill its monitoring function, subject to a confidentiality and information-sharing protocol to be agreed upon by the parties as part of the settlement. The protocol would include appropriate safeguards to protect the confidential business information of all parties.
3. Cost Allocation. CRH proposes that the costs of the compliance monitoring program be allocated 75% to Verdana and 25% to CRH. CRH estimates total monitor costs at approximately $360,000 for the 12-month monitoring term, based on preliminary discussions with Aldwyn Compliance Solutions and comparable engagements. Under CRH's proposed allocation, Verdana's share would be approximately $270,000 and CRH's share would be approximately $90,000. CRH acknowledges a willingness to negotiate the cost-sharing arrangement, with a floor position of 60% Verdana and 40% CRH.
4. Escalation and Remedies. Any suspected violation identified by the compliance monitor would trigger a defined escalation protocol. Upon identification of a potential violation, the monitor would provide written notice to all parties, including a detailed description of the suspected violation and the supporting evidence. The parties would have 10 business days to respond to the notice. If the suspected violation is not resolved to the monitor's satisfaction, the monitor would issue a formal finding, which would be filed with the Court under the retained jurisdiction of the Consent Order.
Upon the filing of a formal finding, any party may seek an expedited hearing before Vice Chancellor Zhao to address the violation. The Consent Order would expressly provide for contempt remedies, including monetary sanctions and additional injunctive relief, for any violation of the settlement terms.
E. Consent Order and Retained Court Jurisdiction
CRH seeks a stipulated Consent Order to be filed with the Delaware Court of Chancery in C.A. No. 2025-0198-MTZ. The Consent Order would incorporate all material terms of the settlement, including:
(i) The modified restrictive covenant terms, including the non-competition, non-solicitation (employees), and non-solicitation (vendors) provisions;
(ii) The data return and destruction obligations, including the independent forensic audit;
(iii) The appointment, scope, and procedures of the compliance monitor; and
(iv) Retained jurisdiction of the Court for enforcement purposes, including the authority to impose contempt remedies for violations of the Consent Order.
The Consent Order is a critical element of CRH's mediation position. By embedding the settlement terms in a Court order, CRH obtains enforcement tools that go beyond ordinary contract remedies. Violations of the Consent Order would constitute contempt of court, providing CRH with access to the Court's contempt power, including fines, sanctions, and additional injunctive relief. The retained jurisdiction ensures continuous judicial oversight throughout the restrictive period and the compliance monitoring term, giving all parties confidence that the settlement terms will be honored and enforced.
F. Additional Terms
1. Mutual Non-Disparagement. CRH is prepared to agree to a standard mutual non-disparagement clause among CRH, the individual members of the Rathore Group, and Verdana Commerce Group. Each party would agree not to make any public statements or communications that are disparaging, defamatory, or injurious to the reputation of any other party. The non-disparagement clause would be subject to the following carve-outs:
(i) Legally compelled disclosures, including testimony under oath and responses to lawful subpoenas;
(ii) CRH's SEC reporting obligations, including disclosures required under Regulation FD, Form 8-K, and periodic reports filed with the Securities and Exchange Commission; and
(iii) Communications with CRH's independent auditors, Hargrove & Tillett CPA, PLLC, and CRH's lenders, including Keypoint National Bank, N.A., in connection with audit, compliance, and lending activities.
2. Release Structure. Upon full performance of all settlement obligations—including completion of the 12-month compliance monitor period, full payment of the settlement amount, completion of all equity forfeitures, and verified data destruction—the parties would exchange mutual general releases covering all claims, counterclaims, demands, and causes of action arising out of or related to the facts and circumstances giving rise to C.A. No. 2025-0198-MTZ. The releases would not cover future breaches of the modified restrictive covenants during their operative periods or any breach of the terms of the Consent Order during the compliance monitoring period. This structure ensures that the settlement provides finality while preserving CRH's ability to enforce the covenants throughout their terms.
3. Dismissal. The parties would file a stipulation for dismissal of C.A. No. 2025-0198-MTZ with prejudice upon satisfactory completion of the 12-month compliance monitor term and full performance of all settlement obligations. The dismissal would be contingent: if any party breaches the Consent Order during the 12-month compliance monitoring period, the Court would retain jurisdiction and the action would remain active for enforcement purposes. This contingent structure incentivizes compliance and ensures that the Court's enforcement authority is available throughout the settlement term.
4. Injunction Bond. Upon entry of the Consent Order and dissolution of the TRO currently in effect, CRH will request release of the $2.5 million injunction bond posted through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419). The Consent Order, with its retained jurisdiction and enforcement provisions, would provide CRH with protections superior to the TRO, making the continued maintenance of the injunction bond unnecessary.
VI. ANTICIPATED COUNTERARGUMENTS AND RESPONSES
CRH's counsel has carefully considered the counterarguments that the defendants and Verdana are likely to raise during the mediation session and offers the following responses.
A. Overbreadth of Restrictive Covenants
Anticipated Argument: In their March 15, 2025 opposition to the TRO, the defendants argued that the restrictive covenants in their employment agreements are overbroad and unenforceable under Delaware's reasonableness standard. Defendants contended that the geographic scope (United States), the duration (12–18 months), and the breadth of prohibited activities render the covenants unreasonable as applied.
CRH Response: The original covenants are reasonable in scope given the senior positions occupied by each member of the Rathore Group and the extraordinary breadth of their access to CRH's most sensitive proprietary information. Delaware courts have consistently upheld restrictive covenants with similar scope and duration for senior executives with access to trade secrets and strategic information. See, e.g., Granite Harbor Corporation Techs., Inc. v. Velmoran, 2010 WL 610725 (Del. Ch. Feb. 18, 2010) (upholding 12-month non-compete for employee with access to confidential customer information). Moreover, CRH's mediation position already reflects significant concessions from the original contractual terms. CRH proposes reducing Ms. Rathore's non-compete from 18 months to 15 months, reducing the non-compete for Mr. Linden and Ms. Kaczmarek from 18 months to 12 months, and reducing the non-compete for the remaining five employees from 12 months to 9 months. CRH further proposes narrowing the scope of the non-compete from all retail operations to three specific product categories. These substantial concessions demonstrate CRH's reasonableness and undercut any argument that CRH is seeking to enforce unreasonably broad restrictions.
B. Adequacy of Consideration
Anticipated Argument: For shorter-tenure employees, particularly Nathan Tsao (3 years) and Kira Johansson (4 years), the defendants may argue that the consideration provided for the restrictive covenants was inadequate. Defendants may contend that initial employment alone is insufficient consideration for a post-employment non-compete, particularly where the employee was not a senior executive at the time of hire.
CRH Response: Each employee received substantial consideration for the restrictive covenants. At the threshold level, each employee received an offer of employment with CRH at highly competitive base compensation levels—ranging from $192,000 (Ms. Johansson) to $485,000 (Ms. Rathore)—in exchange for agreeing to the terms of the employment agreement, including the restrictive covenant provisions. Delaware law is well-settled that initial employment constitutes valid consideration for a restrictive covenant. See Kan-Di-Ki, LLC v. Susi, 2015 WL 4503210 (Del. Ch. July 22, 2015). Beyond initial employment, each employee received substantial additional benefits during their tenure, including annual compensation, performance bonuses, equity grants, promotional increases, and access to CRH's proprietary training and development programs. These additional benefits provide independent consideration supporting the enforceability of the covenants.
C. Inevitable Disclosure Doctrine
Anticipated Argument: The defendants may argue that CRH cannot establish actual use of trade secrets by any member of the Rathore Group at Verdana, and that CRH's claims rest impermissibly on the inevitable disclosure doctrine, which has not been expressly adopted by Delaware courts.
CRH Response: CRH's claims do not rest on the inevitable disclosure doctrine alone. CRH's misappropriation claim under DUTSA is grounded in actual, documented exfiltration of 14,327 files comprising approximately 2.8 gigabytes of proprietary data. The forensic evidence produced by Pinnacle Forensics demonstrates that the data exfiltration was deliberate, systematic, and occurred during the precise window in which the Rathore Group was negotiating its departure to a direct competitor. This is not a case where CRH is speculating about the potential for misuse; CRH has demonstrated actual misappropriation through direct evidence of data theft.
To the extent the inevitable disclosure doctrine is relevant, the facts of this case present the strongest possible case for its application. The Rathore Group had access to CRH's most competitively sensitive information, including Project Ridgeline—a five-year strategic roadmap that would give any competitor a detailed blueprint for CRH's future plans. Verdana competes directly with CRH in 28 product categories and has announced a growth initiative targeting CRH's core categories. The defendants have assumed substantially similar or more senior roles at Verdana. Under these circumstances, the use of CRH's trade secrets in the defendants' work at Verdana is virtually inevitable.
D. Undue Hardship on Individual Defendants
Anticipated Argument: The defendants may argue that enforcement of the restrictive covenants imposes disproportionate hardship on the individual members of the Rathore Group, who would be effectively precluded from working in their chosen field for the duration of the restrictive period.
CRH Response: CRH's modified proposal substantially mitigates any hardship to the individual defendants. By narrowing the scope of the non-compete from all retail operations to three specific product categories—home goods, seasonal décor, and private-label apparel—CRH's proposal permits the Rathore Group members to continue working at Verdana in any non-competing capacity. The defendants are free to work in Verdana's other product categories, in non-merchandising functions, or in any other position that does not involve the three restricted categories. Moreover, CRH has proposed reducing the duration of the restrictive period for each defendant below the contractual maximum. Any remaining hardship is of the defendants' own making. The Rathore Group voluntarily chose to depart CRH in a coordinated, surreptitious manner, to exfiltrate thousands of proprietary files, and to join a direct competitor in violation of their contractual obligations. Having created this situation through their own misconduct, the defendants cannot now claim undue hardship as a shield against accountability.
VII. CRH'S SETTLEMENT AUTHORITY AND NEGOTIATION PARAMETERS
THIS SECTION IS FOR INTERNAL REFERENCE ONLY AND IS NOT TO BE SHARED WITH THE MEDIATOR OR OPPOSING PARTIES.
CRH's Board of Directors and senior management have authorized the following settlement parameters for the March 18, 2025 mediation session.
Opening Position: Total economic recovery of $13,349,500, comprising a $12,000,000 cash settlement payment from Verdana, $849,500 in equity forfeitures, and $500,000 in litigation cost reimbursement.
Target Settlement Range: CRH's target is total economic recovery in the range of $9,500,000 to $10,500,000.
Floor Position: CRH's minimum acceptable settlement is $8,500,000 in cash settlement payment from Verdana, plus $849,500 in equity forfeitures, plus $400,000 in litigation cost reimbursement, for a total floor of $9,749,500. CRH's lead counsel is authorized to settle at or above this floor without further Board approval.
Maximum Concessions on Modified Non-Compete:
• Priya Rathore: CRH is willing to accept a 12-month non-compete (February 7, 2025 through February 6, 2026) as the final concession from the contractual 18-month period.
• Other seven employees: CRH is willing to accept a 9-month non-compete (February 7, 2025 through November 6, 2025) as the final concession.
• Category limitation to three categories (home goods, seasonal décor, and private-label apparel) is acceptable and is already reflected in CRH's opening position.
Maximum Concession on Compliance Monitor Cost-Sharing: CRH will accept a 60% Verdana / 40% CRH cost allocation as its final position.
Maximum Concession on Forensic A

MEDIATION POSITION SUMMARY

CASCADE RETAIL HOLDINGS INC.

I. EXECUTIVE SUMMARY

II. PARTIES TO THE MEDIATION

III. SUMMARY OF CLAIMS

IV. EVIDENTIARY STRENGTHS SUPPORTING CRH'S POSITION

V. CRH'S OPENING MEDIATION POSITION

VI. ANTICIPATED COUNTERARGUMENTS AND RESPONSES

VII. CRH'S SETTLEMENT AUTHORITY AND NEGOTIATION PARAMETERS

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