1038-00009 · Client 1038 · Employment

julian-reeves-employment-agreement-draft.docx DOCUMENT M&A / Corporate

49 / 83 ← → ✕

EMPLOYMENT AGREEMENT

Draft — Subject to Review and Negotiation

Prepared by Calderwood & Harkness LLP 599 Lexington Avenue, 38th Floor New York, NY 10022 Draft dated [●], 2025

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this "Agreement") is entered into by and between Cascade Retail Holdings Inc., a Delaware corporation (the "Company" or "Employer"), and Julian Reeves, an individual residing in Austin, Texas (the "Executive").

This Agreement shall be effective as of and conditioned upon the closing (the "Effective Date") of the acquisition of 100% of the outstanding capital stock of NovaMart Global Inc., a Delaware corporation ("NovaMart"), by the Company pursuant to that certain Stock Purchase Agreement, dated as of May 20, 2025 (the "SPA"), by and among the Company, NovaMart, and the Selling Stockholders named therein.

RECITALS

WHEREAS, the Company is acquiring 100% of the issued and outstanding capital stock of NovaMart Global Inc. pursuant to the SPA, and the closing of such acquisition (the "Closing") is expected to occur on or about October 15, 2025;

WHEREAS, Executive is the Founder and Chief Executive Officer of NovaMart and holds approximately 18.5% of the outstanding capital stock of NovaMart;

WHEREAS, Executive's continued employment, leadership, and involvement in the integration and operation of NovaMart's business following the Closing is of material importance to the Company and was a material inducement to the Company entering into the SPA;

WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, on the terms and conditions set forth herein;

WHEREAS, this Agreement shall become effective only upon and subject to the occurrence of the Closing; if the Closing does not occur, this Agreement shall be null and void and of no force or effect; and

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

Right-click to update Table of Contents

ARTICLE 1

EMPLOYMENT; POSITION; DUTIES

Section 1.1 Employment and Term.

The Company agrees to employ Executive, and Executive agrees to serve the Company, for a term of three (3) years commencing on the Effective Date (the "Initial Term"), unless earlier terminated in accordance with Article 5 of this Agreement. Upon expiration of the Initial Term, this Agreement shall automatically renew for successive one (1)-year periods (each, a "Renewal Term" and, together with the Initial Term, the "Term"), unless either party provides written notice of non-renewal to the other party at least ninety (90) days prior to the expiration of the then-current Term. For the avoidance of doubt, the Term shall commence only upon the occurrence of the Effective Date, and the parties shall have no obligations under this Agreement prior to the Effective Date (except as expressly set forth herein).

Section 1.2 Position and Title.

During the Term, Executive shall serve as President, NovaMart Division (or such other title of comparable seniority and scope of responsibility as may be mutually agreed upon by Executive and the Company), reporting directly to the Chief Executive Officer of the Company, Margaret "Meg" Alderton, or her successor in such role. Executive shall be a senior member of the Company's leadership team and shall have such authority and responsibilities as are commensurate with the position of President, NovaMart Division.

Executive's principal place of employment shall be NovaMart's headquarters located at 1100 Congress Avenue, Suite 800, Austin, Texas 78701, or such other location within the Austin, Texas metropolitan area as may be mutually agreed upon by Executive and the Company. Notwithstanding any other provision of this Agreement, the Company shall not require Executive to relocate his principal place of employment outside the Austin, Texas metropolitan area without Executive's prior written consent. For purposes of this Section 1.2, the "Austin, Texas metropolitan area" shall mean the Austin-Round Rock-Georgetown, TX Metropolitan Statistical Area as defined by the United States Office of Management and Budget. Nothing in this Section 1.2 shall preclude the Company from requiring Executive to engage in reasonable business travel in connection with the performance of his duties hereunder.

Section 1.3 Duties and Responsibilities.

During the Term, Executive shall have responsibility for overseeing the day-to-day operations, strategic direction, and integration of the NovaMart business and its online marketplace platform, including without limitation the management and growth of NovaMart's active seller base (currently comprising 62,400+ active sellers), registered buyer community (currently comprising 9.1 million registered buyers), and the NovaShip logistics network (currently consisting of 14 fulfillment centers across 9 states). Executive shall work collaboratively with the Company's senior leadership team to ensure the seamless integration of the NovaMart Division into the Company's broader operations, while preserving and enhancing the value of the NovaMart brand, technology platform, and customer and seller relationships.

Executive shall perform such other duties consistent with Executive's position as may be reasonably assigned to Executive by the Chief Executive Officer of the Company from time to time. Executive shall comply with all policies, procedures, and codes of conduct established by the Company from time to time that are applicable to similarly situated senior executives, to the extent such policies are not inconsistent with the terms of this Agreement.

During the Term, Executive shall devote substantially all of Executive's business time, attention, skill, and efforts to the faithful and diligent performance of his duties hereunder; provided, however, that notwithstanding the foregoing, Executive shall be permitted to:

(i) serve on not more than two (2) boards of directors (or comparable governing bodies) of entities that do not compete with the Company or the NovaMart Division, subject to the prior written approval of the Company's Chief Executive Officer (such approval not to be unreasonably withheld, conditioned, or delayed);

(ii) make and manage passive personal investments, including investments in private funds and publicly traded securities, so long as such investments do not require Executive's active involvement in the day-to-day management or operations of the entities in which such investments are made and do not create a conflict of interest with Executive's obligations hereunder; and

(iii) engage in charitable, educational, religious, and civic activities,

in each case, so long as such activities do not, individually or in the aggregate, materially interfere with Executive's performance of his duties and responsibilities under this Agreement.

Section 1.4 Board Observation.

During the Term, Executive shall be invited to attend meetings of the Board of Directors of the Company (the "Board") in a non-voting observer capacity with respect to matters relating to the NovaMart Division and the integration of NovaMart's business into the Company's operations. Executive's right to attend Board meetings as an observer shall be subject to customary exclusions for matters involving conflicts of interest, attorney-client privileged communications, and other matters as to which the Board determines in good faith that Executive's attendance would be inappropriate. The Company shall provide Executive with copies of all Board materials relating to the NovaMart Division at the same time such materials are provided to members of the Board, subject to the exclusions set forth in the preceding sentence. Executive's attendance at Board meetings shall not give rise to any fiduciary duties of Executive to the Company's stockholders.

ARTICLE 2

COMPENSATION

Section 2.1 Base Salary.

During the Term, the Company shall pay Executive an annual base salary of Six Hundred Twenty-Five Thousand Dollars ($625,000) (the "Base Salary"), payable in accordance with the Company's regular payroll practices as in effect from time to time (currently on a bi-weekly basis), less all applicable withholdings and deductions. The Base Salary shall be effective as of the Effective Date and shall be prorated for any partial payroll period occurring at the commencement or termination of employment.

The Base Salary shall be subject to annual review by the Compensation Committee of the Board (the "Compensation Committee"), commencing with respect to the fiscal year beginning in the first full calendar year following the Effective Date. Any increase in the Base Salary shall be in the sole discretion of the Compensation Committee; provided, however, that Executive's Base Salary shall not be decreased below the initial Base Salary of $625,000 at any time during the Term without Executive's prior written consent. Once increased, the Base Salary as so increased shall constitute the "Base Salary" for purposes of this Agreement and shall not thereafter be reduced without Executive's prior written consent.

Section 2.2 Annual Bonus.

(a) Target Bonus. For each fiscal year of the Company during the Term, Executive shall be eligible to earn an annual cash bonus (the "Annual Bonus") with a target amount equal to seventy-five percent (75%) of Executive's Base Salary as in effect at the beginning of the applicable fiscal year (the "Target Bonus"), resulting in a Target Bonus of Four Hundred Sixty-Eight Thousand Seven Hundred Fifty Dollars ($468,750) per year at the initial Base Salary level.

(b) Performance Metrics. The actual amount of the Annual Bonus shall be determined by the Compensation Committee in its reasonable discretion, based on the achievement of individual performance objectives established for Executive and financial performance metrics for the Company and/or the NovaMart Division (including, without limitation, revenue targets, EBITDA targets, integration milestones, and seller and buyer growth metrics). Such performance objectives and financial metrics shall be established by the Compensation Committee in consultation with Executive within sixty (60) days following the commencement of each fiscal year during the Term. The Annual Bonus for any given fiscal year may range from zero percent (0%) to one hundred fifty percent (150%) of the Target Bonus, based on actual performance relative to the established objectives and metrics.

(c) Payment Timing. The Annual Bonus, if earned, shall be paid to Executive within seventy-five (75) days following the end of the applicable fiscal year, subject to Executive's continued employment through the date on which the Annual Bonus is paid (except as otherwise provided in Article 5 of this Agreement).

(d) Proration for Partial Year. For the fiscal year in which the Effective Date occurs, the Annual Bonus shall be prorated based on the number of days during such fiscal year in which Executive is employed by the Company, divided by the total number of days in such fiscal year. In calculating the prorated Annual Bonus for such partial year, the performance metrics shall be equitably adjusted by the Compensation Committee in consultation with Executive to reflect the shortened period of service.

Section 2.3 Equity Grant.

(a) Initial Grant. On the Effective Date, the Company shall grant to Executive one hundred fifty thousand (150,000) restricted shares of the Company's common stock, par value $0.01 per share, as listed on the Nasdaq Global Select Market under the ticker symbol "CRHI" (the "Restricted Shares"), pursuant to and subject to the terms and conditions of the Company's 2023 Omnibus Equity Incentive Plan (or any successor plan) (the "Equity Plan") and a separate Restricted Stock Award Agreement in the form attached hereto as Exhibit C (the "RSA Agreement").

(b) Vesting. The Restricted Shares shall vest in three (3) equal annual installments of fifty thousand (50,000) shares each on the first, second, and third anniversaries of the Effective Date, respectively, in each case subject to Executive's continued employment with the Company through the applicable vesting date (except as otherwise provided in Section 5.6 of this Agreement and the RSA Agreement). For the avoidance of doubt, in the event of any conflict between this Agreement and the RSA Agreement or the Equity Plan with respect to the terms of the Restricted Shares, the RSA Agreement shall control as between this Agreement and the RSA Agreement, and the Equity Plan shall control as between the RSA Agreement and the Equity Plan.

(c) Plan Terms; Clawback. The Restricted Shares shall be subject to the terms and conditions of the Equity Plan, including without limitation all applicable transfer restrictions, forfeiture conditions, and the Company's clawback and recoupment policies as in effect from time to time (including any policies adopted by the Company to comply with Section 10D of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder by the Securities and Exchange Commission and the Nasdaq Stock Market).

(d) Equitable Adjustments. In the event of any stock split, reverse stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, or other similar adjustment to the Company's common stock, the number and kind of Restricted Shares shall be equitably and proportionately adjusted in accordance with the terms of the Equity Plan.

Section 2.4 Signing Bonus.

No signing bonus shall be payable to Executive under this Agreement. The parties acknowledge that Executive is receiving his pro rata share of the aggregate purchase price of One Billion Two Hundred Million Dollars ($1,200,000,000) payable by the Company in connection with the acquisition of NovaMart under the SPA, in Executive's capacity as a Selling Stockholder thereunder, less the applicable escrow holdback amount and any other adjustments contemplated by the SPA, and that such consideration is separate and apart from the compensation and benefits provided under this Agreement.

ARTICLE 3

EMPLOYEE BENEFITS; PERQUISITES

Section 3.1 Benefit Plans.

During the Term, Executive shall be eligible to participate in all employee benefit plans, programs, and arrangements maintained by the Company from time to time for the benefit of its similarly situated senior executives, including without limitation medical, dental, vision, prescription drug, life insurance, accidental death and dismemberment insurance, short-term and long-term disability insurance, and 401(k) savings and retirement plans, in each case subject to the terms and eligibility requirements of the applicable plan, program, or arrangement. Nothing in this Agreement shall require the Company to establish or maintain any particular benefit plan, program, or arrangement, and the Company reserves the right to amend, modify, or terminate any such plan, program, or arrangement in its sole discretion; provided, that any such amendment, modification, or termination shall apply to Executive on the same basis as it applies to other similarly situated senior executives of the Company.

To the extent Executive was a participant in any employee benefit plan, program, or arrangement maintained by NovaMart immediately prior to the Closing, the Company shall use commercially reasonable efforts to: (i) waive any pre-existing condition exclusions, evidence of insurability requirements, and waiting periods under the Company's employee benefit plans to the extent such exclusions, requirements, or waiting periods would not have applied to Executive under the applicable NovaMart benefit plans; and (ii) credit Executive's prior service with NovaMart for purposes of eligibility to participate and vesting (but not benefit accrual) under the Company's employee benefit plans. The foregoing obligations shall be subject to the terms of the applicable plan documents and any applicable insurance contracts or administrative agreements.

Section 3.2 Paid Time Off.

During the Term, Executive shall be entitled to paid time off ("PTO") in accordance with the Company's PTO policy for senior executives, as in effect from time to time; provided, however, that in no event shall Executive be entitled to fewer than twenty-five (25) business days of PTO per calendar year (prorated for any partial calendar year during the Term), in addition to all Company-recognized holidays. PTO shall accrue and be used in accordance with the Company's applicable policies. Any accrued but unused PTO that Executive has earned under NovaMart's paid time off policies prior to the Closing shall be honored by the Company in accordance with the terms of the SPA and the Company's applicable PTO policies.

Section 3.3 Expense Reimbursement.

The Company shall reimburse Executive for all reasonable and documented out-of-pocket business expenses incurred by Executive in the performance of his duties under this Agreement, in accordance with the Company's expense reimbursement policy as in effect from time to time. Executive shall submit reasonable documentation of such expenses in accordance with the Company's policy. Reimbursement of any such expenses shall be made within thirty (30) days following Executive's submission of appropriate documentation and approval thereof; provided, that in no event shall any reimbursement be made later than the last day of the calendar year following the calendar year in which the expense was incurred (in order to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code")). The amount of expenses eligible for reimbursement in any calendar year shall not affect the amount of expenses eligible for reimbursement in any other calendar year, and Executive's right to reimbursement under this Section 3.3 shall not be subject to liquidation or exchange for any other benefit.

Section 3.4 Indemnification and D&O Insurance.

(a) Indemnification. Executive shall be entitled to indemnification and advancement of expenses to the fullest extent permitted by the General Corporation Law of the State of Delaware and the Company's certificate of incorporation and bylaws, as each may be amended from time to time, with respect to any threatened, pending, or completed action, suit, or proceeding (whether civil, criminal, administrative, or investigative) arising out of or relating to Executive's service as an officer or employee of the Company or the NovaMart Division, or in any other capacity at the request of the Company. The Company and Executive shall enter into a separate indemnification agreement on terms consistent with this Section 3.4 and the Company's standard form of indemnification agreement for senior executive officers, to be executed concurrently with this Agreement.

(b) Directors' and Officers' Liability Insurance. During the Term and for a period of six (6) years following the termination of Executive's employment for any reason, the Company shall maintain directors' and officers' liability insurance covering Executive on terms no less favorable than the coverage maintained by the Company for its other senior executives and members of the Board. In the event the Company merges with or into another entity, or sells all or substantially all of its assets, the Company shall use commercially reasonable efforts to ensure that the surviving or acquiring entity provides equivalent insurance coverage for Executive for the remainder of the six (6)-year period.

ARTICLE 4

RESTRICTIVE COVENANTS

Section 4.1 Confidential Information.

(a) Definition. For purposes of this Agreement, "Confidential Information" means all non-public, confidential, or proprietary information, in any form or medium, whether written, oral, electronic, or visual, relating to the business, operations, finances, technology, products, services, or affairs of the Company, NovaMart, or any of their respective affiliates, subsidiaries, predecessors, or successors, including without limitation: (i) trade secrets; (ii) proprietary technology, software, source code, algorithms, and systems architecture; (iii) customer, seller, buyer, and supplier data, lists, and relationships; (iv) business plans, strategies, forecasts, and projections; (v) financial information, including revenue, cost, margin, and pricing data; (vi) marketing strategies, plans, and analyses; (vii) product development plans and roadmaps; (viii) information regarding employees, compensation, and organizational structure; (ix) information regarding pending or contemplated transactions, investments, or acquisitions; (x) information received from third parties under obligations of confidentiality; and (xi) any other information that is designated as confidential by the Company or that Executive knows or reasonably should know is confidential or proprietary. Confidential Information shall not include information that: (A) is or becomes generally available to the public other than through Executive's breach of this Agreement; (B) was known to Executive on a non-confidential basis prior to Executive's employment with NovaMart; or (C) is received by Executive from a third party that is not known by Executive to be bound by an obligation of confidentiality to the Company or any of its affiliates.

(b) Non-Disclosure Obligation. Executive shall not, during the Term or at any time thereafter, directly or indirectly, disclose, publish, disseminate, use, or permit the disclosure or use of any Confidential Information, except: (i) in the performance of Executive's duties under this Agreement; (ii) as required by applicable law, regulation, or legal process (including any subpoena or order of a court or governmental body of competent jurisdiction), provided that Executive shall, to the extent permitted by law, provide the Company with prompt written notice of any such requirement prior to any disclosure so that the Company may seek a protective order or other appropriate remedy; or (iii) with the prior written consent of the Company. The obligations of confidentiality set forth in this Section 4.1 shall survive the termination of Executive's employment and this Agreement indefinitely.

(c) Defend Trade Secrets Act Notice. In accordance with the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1833(b)), Executive is hereby notified that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b).

Section 4.2 Non-Competition.

(a) Covenant. During the Term and for a period of twenty-four (24) months following the termination of Executive's employment for any reason (the "Restricted Period"), Executive shall not, directly or indirectly, whether as an employee, consultant, officer, director, manager, partner, joint venturer, owner, equity holder, agent, advisor, or in any other capacity, engage in, own, manage, operate, control, be employed by, participate in, consult with, render services to, or be connected in any manner with the ownership, management, operation, or control of any Competing Business.

(b) Definition of Competing Business. For purposes of this Agreement, "Competing Business" means any business, enterprise, or entity that operates an online marketplace platform, ecommerce platform, or logistics software-as-a-service ("SaaS") platform that competes, or is reasonably anticipated to compete, with the business of the Company or the NovaMart Division as conducted (or as proposed to be conducted in any written business plans) as of the date of termination of Executive's employment, in any geographic area in which the Company or the NovaMart Division conducts or has conducted business during the twelve (12)-month period immediately preceding the date of termination. Without limiting the generality of the foregoing, the following entities (and their respective affiliates and successors) shall be deemed Competing Businesses: BrightBazaar Inc. and any other comparable competitors identified on any list of competitors maintained by the Company's corporate development or strategy team as of the date of termination.

(c) Exceptions. Notwithstanding the foregoing, the restrictions of this Section 4.2 shall not prohibit Executive from: (i) the passive ownership of not more than two percent (2%) of the outstanding equity securities of any company whose securities are publicly traded on a national securities exchange or over-the-counter market, so long as Executive has no active participation in the business or management of such company; or (ii) engaging in any activity that has been consented to in writing by the Board or the Chief Executive Officer of the Company.

(d) Enforceability. Executive acknowledges and agrees that the non-competition covenant set forth in this Section 4.2 is reasonable and necessary to protect the Company's legitimate business interests, including without limitation its goodwill, Confidential Information, customer and seller relationships, and the substantial investment the Company is making in connection with the acquisition of NovaMart and Executive's employment hereunder. Executive further acknowledges that the scope, geographic area, and duration of the non-competition covenant are reasonable and that Executive has received adequate and independent consideration for Executive's agreement to be bound by such covenant, including the compensation, equity grants, and other benefits provided under this Agreement and the consideration received by Executive under the SPA. If a court of competent jurisdiction determines that any aspect of the non-competition covenant is unenforceable as written, the parties agree that such court shall have the authority to reform the covenant (including by reducing the duration, geographic scope, or range of prohibited activities) to the minimum extent necessary to render it enforceable, and the covenant as so reformed shall be enforceable to the fullest extent permitted by applicable law (the "blue-pencil" provision).

(e) State Law Considerations. The parties acknowledge that this Agreement is governed by Delaware law as provided in Section 8.1 and that the enforceability of the non-competition covenant set forth in this Section 4.2 is subject to applicable state law. Texas law shall apply with respect to the enforceability of such covenant to the extent required by applicable choice-of-law principles. Executive acknowledges that he has been advised to review Calderwood & Harkness's Restrictive Covenant and Non-Competition Analysis Memorandum regarding the enforceability of non-competition covenants under Texas law and the potential limitations on enforceability that may apply under the laws of California and other states if Executive relocates to such jurisdictions during or after the Restricted Period.

Section 4.3 Non-Solicitation of Employees.

During the Restricted Period, Executive shall not, directly or indirectly, whether on Executive's own behalf or on behalf of any other person or entity, solicit, recruit, hire, engage, or induce, or attempt to solicit, recruit, hire, engage, or induce, any employee, consultant, or independent contractor of the Company or any of its affiliates (including NovaMart and the NovaMart Division) to: (i) terminate or otherwise cease his or her employment or engagement with the Company or any of its affiliates; or (ii) accept employment or engagement with any other person or entity. Notwithstanding the foregoing, this Section 4.3 shall not prohibit Executive from making general solicitations of employment that are not specifically directed at or targeted to employees, consultants, or independent contractors of the Company or any of its affiliates, including without limitation advertisements in newspapers, trade publications, professional journals, or on internet job boards or social media platforms of general circulation, so long as Executive does not otherwise take any action to encourage any such individual to respond to such general solicitation.

Section 4.4 Non-Solicitation of Customers, Sellers, and Business Partners.

During the Restricted Period, Executive shall not, directly or indirectly, whether on Executive's own behalf or on behalf of any other person or entity, solicit, divert, or take away, or attempt to solicit, divert, or take away, the business or patronage of any customer, seller, supplier, vendor, or business partner of the Company or the NovaMart Division with whom Executive had a material business relationship, or about whom Executive received Confidential Information, during the last twenty-four (24) months of Executive's employment with the Company. For purposes of this Section 4.4, a "material business relationship" means a relationship in which Executive personally interacted with, managed, supervised the account of, or had decision-making authority with respect to the business conducted with such customer, seller, supplier, vendor, or business partner.

Section 4.5 intellectual Property Assignment.

(a) Assignment of Work Product. Executive acknowledges and agrees that all inventions, discoveries, developments, improvements, innovations, works of authorship, software, algorithms, source code, trade secrets, designs, processes, methods, techniques, formulas, data, and other intellectual property, whether or not patentable, copyrightable, or otherwise protectable, that are conceived, created, developed, reduced to practice, authored, or contributed to by Executive, alone or jointly with others, during the Term, whether or not during working hours or using the Company's facilities or resources, that relate to the business, operations, products, services, or reasonably anticipated business of the Company or the NovaMart Division, shall be the sole and exclusive property of the Company (collectively, "Work Product"). For the avoidance of doubt, Work Product shall include all intellectual property relating to the NovaMart online marketplace platform, the NovaShip logistics network, and any enhancements, modifications, or derivatives thereof.

(b) Irrevocable Assignment. Executive hereby irrevocably and unconditionally assigns, transfers, and conveys to the Company, without additional consideration, all right, title, and interest in and to all Work Product, including without limitation all patent rights, copyrights (including the right to prepare derivative works), trademarks, trade secrets, moral rights, and all other intellectual property rights therein, throughout the world, in perpetuity. To the extent that any Work Product constitutes a "work made for hire" within the meaning of the U.S. Copyright Act (17 U.S.C. § 101 et seq.), Executive agrees that the Company shall be deemed the author thereof and shall own all copyrights therein. To the extent that any Work Product does not qualify as a "work made for hire," Executive hereby irrevocably assigns to the Company all copyrights therein.

(c) Cooperation; Further Assurances. Executive agrees to execute all documents, instruments, and assignments, and to take all actions, reasonably requested by the Company, at the Company's sole expense, to perfect, register, maintain, and enforce the Company's rights in and to the Work Product, including without limitation the filing and prosecution of patent applications, copyright registrations, and trademark registrations in any and all jurisdictions.

(d) Power of Attorney. In the event Executive fails or is unable to execute any document or take any action required under Section 4.5(c), Executive hereby irrevocably appoints the Company and its duly authorized officers and agents as Executive's attorney-in-fact, coupled with an interest, to execute such documents and take such actions on Executive's behalf for the sole purpose of perfecting, registering, maintaining, and enforcing the Company's rights in the Work Product. Executive acknowledges that such appointment is irrevocable and shall survive the termination of Executive's employment and this Agreement.

(e) Pre-Existing intellectual Property. Executive shall set forth on Exhibit A attached hereto a complete list of all inventions, discoveries, developments, improvements, works of authorship, software, or other intellectual property that were conceived, created, developed, or reduced to practice by Executive prior to the Effective Date, and that Executive wishes to exclude from the assignment provisions of this Section 4.5 (the "Prior Inventions"). If no Prior Inventions are listed on Exhibit A, Executive represents that no such Prior Inventions exist.

(f) State Law Notice. Executive is hereby notified that, notwithstanding any provision of this Section 4.5 to the contrary, this Section 4.5 does not apply to any invention for which no equipment, supplies, facility, or trade secret information of the Company or NovaMart was used and which was developed entirely on Executive's own time, unless the invention: (i) relates to the Company's or NovaMart's business or actual or demonstrably anticipated research or development; or (ii) results from any work performed by Executive for the Company or NovaMart. Executive's attention is directed to the applicable provisions of the Texas Labor Code and any other applicable state statutes regarding employee invention assignment.

Section 4.6 Non-Disparagement.

(a) Executive's Obligation. During the Term and at all times thereafter, Executive shall not, directly or indirectly, make, publish, or communicate any statement, whether written, oral, electronic, or otherwise, that disparages, defames, or places in a negative light the Company or any of its affiliates, or any of their respective current or former directors, officers, employees, agents, products, services, or business practices. This obligation shall not apply to: (i) truthful statements made under oath in connection with any legal, administrative, or regulatory proceeding; (ii) good-faith internal complaints or reports made to the Company's management, Board, legal department, ethics hotline, or compliance function; or (iii) communications with any governmental authority or self-regulatory organization.

(b) Company's Obligation. During the Term and at all times thereafter, the Company shall instruct its members of the Board and its senior officers (at the level of Senior Vice President and above) not to, directly or indirectly, make, publish, or communicate any statement, whether written, oral, electronic, or otherwise, that disparages, defames, or places in a negative light Executive or his professional reputation. This obligation shall be subject to the same exceptions set forth in Section 4.6(a)(i) through (iii) above.

Section 4.7 Cooperation.

During the Term and for a reasonable period thereafter, Executive agrees to cooperate fully and in good faith with the Company in connection with any litigation, arbitration, mediation, investigation, audit, or regulatory proceeding involving the Company or any of its affiliates, including without limitation any matters arising under the SPA or the indemnification provisions thereof, in which Executive's cooperation is reasonably requested by the Company. Such cooperation shall include, without limitation, being available to provide information, interviews, affidavits, declarations, depositions, and testimony, and assisting in the preparation and review of documents, at reasonable times and upon reasonable notice, taking into account Executive's other personal and professional commitments. The Company shall reimburse Executive for all reasonable and documented out-of-pocket expenses (including reasonable attorneys' fees, if applicable) incurred by Executive in connection with providing such cooperation, and, following the termination of Executive's employment, shall compensate Executive at a reasonable hourly rate for time spent in providing cooperation that exceeds twenty (20) hours in any calendar quarter, at an hourly rate to be mutually agreed upon in good faith.

Section 4.8 Remedies for Breach.

(a) Irreparable Harm. Executive acknowledges and agrees that a breach or threatened breach by Executive of any of the covenants and agreements set forth in this Article 4 would cause the Company irreparable injury and harm for which monetary damages alone would be an inadequate and insufficient remedy. Accordingly, in addition to any other rights and remedies available to the Company at law or in equity, the Company shall be entitled to seek temporary, preliminary, and permanent injunctive relief, specific performance, and any other form of equitable relief to enforce the provisions of this Article 4 and to restrain any violation or threatened violation thereof, in the Delaware Court of Chancery (consistent with the dispute resolution provisions of this Agreement and the SPA) or any other court of competent jurisdiction, without the necessity of proving actual damages, posting any bond or other security, or satisfying any other similar requirement that might otherwise be imposed by applicable law.

(b) Cumulative Remedies. The rights and remedies of the Company under this Section 4.8 are cumulative and in addition to, and not in lieu of, any and all other rights and remedies available to the Company at law or in equity, including without limitation the right to recover monetary damages for any breach of this Article 4.

(c) Tolling. If Executive violates any of the covenants set forth in Section 4.2, Section 4.3, or Section 4.4, the Restricted Period applicable to such covenant shall be automatically extended by a period of time equal to the duration of any such violation, so that the Company receives the full benefit of the restricted period contemplated by such provisions.

ARTICLE 5

TERMINATION

Section 5.1 Termination by the Company for Cause.

(a) Right to Terminate. The Company may terminate Executive's employment at any time for Cause, effective upon delivery of written notice to Executive specifying in reasonable detail the grounds constituting Cause.

(b) Definition of Cause. For purposes of this Agreement, "Cause" means the occurrence of any one or more of the following:

(i) Executive's conviction of, or plea of guilty or nolo contendere to, a felony under federal, state, or foreign law, or any crime (whether a felony or misdemeanor) involving fraud, dishonesty, moral turpitude, or breach of fiduciary duty;

(ii) Executive's willful misconduct or gross negligence in the performance of Executive's duties hereunder that results in, or is reasonably likely to result in, material harm to the Company or any of its affiliates;

(iii) Executive's material breach of any provision of this Agreement (including any provision of Article 4), which breach, if capable of cure, is not cured by Executive within thirty (30) days after the Company provides Executive with written notice specifying the nature of such breach in reasonable detail;

(iv) Executive's material violation of any written policy of the Company applicable to Executive, including without limitation the Company's Code of Conduct, anti-harassment policy, insider trading policy, or ethics and compliance policies, which violation, if capable of cure, is not cured by Executive within thirty (30) days after the Company provides Executive with written notice specifying the nature of such violation in reasonable detail;

(v) Executive's willful and continued failure to substantially perform Executive's duties hereunder (other than any such failure resulting from Executive's Disability), which failure is not cured by Executive within thirty (30) days after the Company provides Executive with written notice specifying the nature of such failure in reasonable detail; or

(vi) Executive's commission of any act of fraud, embezzlement, misappropriation, or theft with respect to the assets or property of the Company or any of its affiliates.

(c) Process. Prior to any termination for Cause (other than pursuant to clause (i) or (vi) above, for which no cure period shall be required), the Company shall provide Executive with written notice specifying the grounds for Cause and, to the extent a cure period is applicable, afford Executive the opportunity to cure as set forth above. In addition, Executive shall be afforded the opportunity to be heard before the Board or a committee thereof designated by the Board, prior to any final determination by the Board that Cause exists. For the avoidance of doubt, a termination of Executive's employment shall not be deemed to be for Cause unless and until the Board (or such designated committee) has made a good-faith determination that Cause exists.

Section 5.2 Termination by the Company Without Cause.

The Company may terminate Executive's employment at any time without Cause, for any reason or no reason, upon not less than thirty (30) days' prior written notice to Executive. The Company may, in its sole discretion, elect to pay Executive his Base Salary in lieu of all or any portion of such notice period and relieve Executive of his duties during such notice period, provided that such election shall not affect Executive's entitlement to the severance and termination payments set forth in Section 5.6(b).

Section 5.3 Termination by Executive for Good Reason.

(a) Right to Terminate. Executive may terminate his employment for Good Reason in accordance with the procedures set forth in Section 5.3(c) below.

(b) Definition of Good Reason. For purposes of this Agreement, "Good Reason" means the occurrence of any one or more of the following without Executive's prior written consent:

(i) a material diminution in Executive's Base Salary (other than a reduction that applies proportionately to all similarly situated senior executives of the Company), title, authority, duties, or responsibilities (including, without limitation, a change in Executive's reporting relationship such that Executive no longer reports directly to the Chief Executive Officer of the Company);

(ii) a relocation of Executive's principal place of employment to a location more than fifty (50) miles from the Austin, Texas metropolitan area without Executive's prior written consent;

(iii) a material breach by the Company of any provision of this Agreement, including without limitation any failure by the Company to make any payment or provide any benefit required to be made or provided hereunder; or

(iv) the Company's failure to obtain from any successor (whether by merger, consolidation, acquisition, or sale of all or substantially all of the Company's assets) a written assumption of the Company's obligations under this Agreement.

(c) Process. Executive's termination for Good Reason shall be effective only if: (A) Executive provides the Company with written notice specifying in reasonable detail the event or condition constituting Good Reason within sixty (60) days following the initial occurrence of such event or condition; (B) the Company fails to cure such event or condition within thirty (30) days following receipt of such written notice (the "Cure Period"); and (C) Executive actually resigns within thirty (30) days following the expiration of the Cure Period. If the Company cures the event or condition constituting Good Reason within the Cure Period, Executive's notice of termination for Good Reason shall be deemed withdrawn and of no further force or effect.

Section 5.4 Voluntary Resignation by Executive Without Good Reason.

Executive may resign his employment without Good Reason at any time upon not less than sixty (60) days' prior written notice to the Company. The Company may, in its sole discretion, accept such resignation effective at any time during such notice period, and Executive shall receive his Base Salary through the date on which his resignation becomes effective.

Section 5.5 Termination Due to Death or Disability.

(a) Death. Executive's employment shall terminate automatically upon Executive's death.

(b) Disability. The Company may terminate Executive's employment due to Executive's Disability. For purposes of this Agreement, "Disability" means Executive's inability to perform the essential functions of his position, with or without reasonable accommodation, for a period of one hundred twenty (120) consecutive calendar days, or for a period of one hundred eighty (180) calendar days (whether or not consecutive) in any twelve (12)-month period, as certified by a licensed physician mutually agreed upon by Executive (or his legal representative) and the Company. If Executive and the Company are unable to agree upon a physician, each party shall select a licensed physician, and those two physicians shall select a third physician, whose determination shall be final and binding. The Company shall comply with all applicable requirements of the Americans with Disabilities Act and applicable state disability discrimination laws in connection with any termination of Executive's employment under this Section 5.5(b).

Section 5.6 Severance and Termination Payments.

(a) Termination for Cause or Voluntary Resignation Without Good Reason. Upon termination of Executive's employment by the Company for Cause pursuant to Section 5.1 or by Executive without Good Reason pursuant to Section 5.4, Executive shall be entitled to receive only the following (collectively, the "Accrued Obligations"):

(i) any accrued and unpaid Base Salary through the date of termination, payable in accordance with the Company's regular payroll practices;

(ii) any accrued but unused PTO in accordance with the Company's PTO policy then in effect;

(iii) reimbursement of any business expenses properly incurred by Executive prior to the date of termination in accordance with Section 3.3 and the Company's expense reimbursement policy; and

(iv) any vested benefits to which Executive is entitled under any employee benefit plan, program, or arrangement of the Company, payable in accordance with the terms of such plan, program, or arrangement.

For the avoidance of doubt, upon a termination for Cause or a voluntary resignation without Good Reason, Executive shall not be entitled to any severance payment, any Annual Bonus for the fiscal year in which the termination occurs (except to the extent already paid), or any accelerated vesting of Restricted Shares, and all unvested Restricted Shares shall be immediately and automatically forfeited as of the date of termination.

(b) Termination Without Cause or for Good Reason. Upon termination of Executive's employment by the Company without Cause pursuant to Section 5.2 or by Executive for Good Reason pursuant to Section 5.3, and subject to Executive's execution and non-revocation of a general release of claims in accordance with Section 5.8, Executive shall be entitled to receive the following, in addition to the Accrued Obligations:

(i) Severance Payment. A severance payment equal to twelve (12) months of Executive's Base Salary as in effect on the date of termination (the "Severance Payment"), which, at the initial Base Salary, equals Six Hundred Twenty-Five Thousand Dollars ($625,000). The Severance Payment shall be payable in substantially equal installments over the twelve (12)-month period following the date of termination, in accordance with the Company's regular payroll practices, commencing on the first regular payroll date following the date on which the general release of claims becomes effective and irrevocable (with the first such payment including any installments that would have been payable had the release been effective on the date of termination).

(ii) Pro-Rated Bonus. A pro-rated Annual Bonus for the fiscal year in which the termination occurs, calculated based on actual performance for such fiscal year (as determined by the Compensation Committee in accordance with Section 2.2) and prorated based on the number of days during such fiscal year in which Executive was employed by the Company, payable at the same time as Annual Bonuses are paid to other similarly situated senior executives of the Company for such fiscal year.

(iii) Accelerated Vesting of Restricted Shares. Accelerated vesting of the next tranche of Restricted Shares that would have vested on the next vesting anniversary of the Effective Date following the date of termination, with such shares becoming fully vested and non-forfeitable as of the date of termination. For the avoidance of doubt, any Restricted Shares that are not vested as of the date of termination and are not subject to accelerated vesting under this Section 5.6(b)(iii) shall be immediately and automatically forfeited as of the date of termination.

(iv) COBRA Continuation Coverage. Subject to Executive's timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), the Company shall pay or reimburse Executive for the cost of COBRA premiums for Executive and Executive's eligible dependents for a period of twelve (12) months following the date of termination (or, if earlier, the date on which Executive becomes eligible for comparable group health plan coverage from a subsequent employer). If the Company determines in good faith that paying or reimbursing Executive's COBRA premiums would result in a violation of applicable law (including, without limitation, Section 105(h) of the Code or the Patient Protection and Affordable Care Act), the Company shall, in lieu of such COBRA subsidy, provide Executive with a taxable lump-sum cash payment equal to the total amount of the COBRA premiums that the Company would have paid or reimbursed under this Section 5.6(b)(iv) for the remainder of the twelve (12)-month period, payable within thirty (30) days following the Company's determination.

(c) Termination Due to Death or Disability. Upon termination of Executive's employment due to Executive's death pursuant to Section 5.5(a) or by the Company due to Executive's Disability pursuant to Section 5.5(b), Executive (or Executive's estate or legal representative, as applicable) shall be entitled to receive, in addition to the Accrued Obligations:

(i) a pro-rated Annual Bonus for the fiscal year in which the termination occurs, calculated based on actual performance for such fiscal year (as determined by the Compensation Committee in accordance with Section 2.2) and prorated based on the number of days during such fiscal year in which Executive was employed by the Company, payable at the same time as Annual Bonuses are paid to other similarly situated senior executives of the Company for such fiscal year; and

(ii) accelerated vesting of the next tranche of Restricted Shares that would have vested on the next vesting anniversary of the Effective Date following the date of termination, with such shares becoming fully vested and non-forfeitable as of the date of termination. Any Restricted Shares that are not vested as of the date of termination and are not subject to accelerated vesting under this Section 5.6(c)(ii) shall be immediately and automatically forfeited as of the date of termination.

(d) Non-Renewal by the Company. In the event the Company provides Executive with written notice of non-renewal of the Term in accordance with Section 1.1, and Executive's employment terminates upon the expiration of the then-current Term as a result of such non-renewal, such termination shall be treated as a termination by the Company without Cause for purposes of Section 5.6(b), and Executive shall be entitled to receive the payments and benefits set forth in Section 5.6(b), subject to Executive's execution and non-revocation of a general release of claims in accordance with Section 5.8.

Section 5.7 Section 280G Provisions.

(a) Notwithstanding any other provision of this Agreement to the contrary, if any payment or benefit that Executive would receive from the Company or any of its affiliates in connection with a change of control or other transaction (whether pursuant to this Agreement or any other plan, arrangement, or agreement with the Company or any of its affiliates) (collectively, the "Total Payments") would constitute a "parachute payment" within the meaning of Section 280G of the Code, and the aggregate amount of the Total Payments would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Total Payments shall be reduced (by reducing or eliminating payments or benefits in the following order: (i) cash severance payments; (ii) any accelerated vesting of equity awards; and (iii) any other remaining payments or benefits, in each case in reverse chronological order) to the minimum extent necessary so that no portion of the Total Payments is subject to the Excise Tax; provided, however, that such reduction shall be made only if the after-tax amount of the reduced Total Payments (after taking into account all applicable federal, state, and local income and employment taxes) would be greater than or equal to the after-tax amount of the unreduced Total Payments (after taking into account all applicable federal, state, and local income and employment taxes and the Excise Tax) (the "best net" approach).

(b) All determinations required to be made under this Section 5.7 shall be made by a nationally recognized independent public accounting firm or compensation consulting firm selected by the Company and reasonably acceptable to Executive (the "Accounting Firm"), the costs of which shall be borne by the Company. The Accounting Firm shall provide its determination to the Company and Executive within fifteen (15) business days of the date on which the need for a determination arises.

(c) For the avoidance of doubt, no tax gross-up payment shall be made by the Company with respect to any Excise Tax or other taxes imposed on the Total Payments.

Section 5.8 Release Requirement.

Receipt of any severance or enhanced termination benefits under Section 5.6(b) (including without limitation the Severance Payment, pro-rated Annual Bonus, accelerated vesting of Restricted Shares, and COBRA continuation coverage) is expressly conditioned upon Executive's (or, in the event of Executive's death or Disability, Executive's estate's or legal representative's) timely execution and non-revocation of a general release of claims in substantially the form attached hereto as Exhibit B (the "Release"), within sixty (60) days following the date of termination (the "Release Deadline"). If Executive fails to execute the Release within the Release Deadline, or if Executive revokes the Release within any applicable revocation period, Executive shall not be entitled to receive any payments or benefits under Section 5.6(b) (other than the Accrued Obligations). If the sixty (60)-day period during which the Release must become effective and irrevocable begins in one taxable year and ends in a subsequent taxable year, no payments that are subject to Section 409A of the Code and that are conditioned upon the Release shall be made until the beginning of such subsequent taxable year.

Section 5.9 Return of Property.

Upon termination of Executive's employment for any reason, or at any time upon the Company's request, Executive shall promptly return to the Company all property of the Company and its affiliates (including NovaMart) in Executive's possession or control, including without limitation laptop computers, desktop computers, tablets, mobile telephones, access cards, keys, credit cards, documents (whether in physical or electronic form), files, records, reports, memoranda, and all Confidential Information. Executive shall not retain any copies, summaries, or excerpts of any such property or Confidential Information. Executive shall also delete or destroy any Confidential Information stored on personal devices, cloud storage accounts, or other personal systems, and shall certify in writing to the Company that such deletion or destruction has been completed.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES

Section 6.1 Executive's Representations.

Executive hereby represents and warrants to the Company as follows:

(a) The execution, delivery, and performance by Executive of this Agreement do not and will not conflict with, result in a breach or violation of, or constitute a default under, any agreement, contract, obligation, or understanding to which Executive is a party or by which Executive is bound, including without limitation any prior employment agreement, consulting agreement, non-competition agreement, non-solicitation agreement, confidentiality agreement, or other restrictive covenant.

(b) Executive is not subject to any non-compete agreement, non-solicitation agreement, or other restrictive covenant that would prohibit or restrict Executive from performing his duties and obligations under this Agreement or that would otherwise conflict with Executive's obligations hereunder.

(c) Executive has disclosed to the Company, prior to the execution of this Agreement, all material facts relevant to Executive's ability to perform his duties under this Agreement, including without limitation any ongoing or threatened litigation, regulatory proceedings, or investigations in which Executive is or may become a party or witness.

(d) All information provided by Executive to the Company in connection with the negotiation and execution of this Agreement is true, accurate, and complete in all material respects.

Section 6.2 Company's Representations.

The Company hereby represents and warrants to Executive as follows:

(a) The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has all requisite corporate power and authority to enter into and perform its obligations under this Agreement.

(b) The execution and delivery of this Agreement by the Company has been duly authorized by all necessary corporate action, including approval by the Board of Directors of the Company, and no further corporate action is required for the Company to perform its obligations hereunder.

(c) This Agreement constitutes a legal, valid, and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity.

ARTICLE 7

SECTION 409A COMPLIANCE

Section 7.1 General. This Agreement is intended to comply with, or be exempt from, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations and other guidance issued thereunder (collectively, "Section 409A"), and shall be interpreted, administered, and construed in a manner consistent with such intent. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A, the provision shall be read in such a manner that the applicable payments hereunder comply with, or are exempt from

EMPLOYMENT AGREEMENT
Draft — Subject to Review and Negotiation
Prepared by Calderwood & Harkness LLP 599 Lexington Avenue, 38th Floor New York, NY 10022 Draft dated [●], 2025
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is entered into by and between Cascade Retail Holdings Inc., a Delaware corporation (the "Company" or "Employer"), and Julian Reeves, an individual residing in Austin, Texas (the "Executive").
This Agreement shall be effective as of and conditioned upon the closing (the "Effective Date") of the acquisition of 100% of the outstanding capital stock of NovaMart Global Inc., a Delaware corporation ("NovaMart"), by the Company pursuant to that certain Stock Purchase Agreement, dated as of May 20, 2025 (the "SPA"), by and among the Company, NovaMart, and the Selling Stockholders named therein.
RECITALS
WHEREAS, the Company is acquiring 100% of the issued and outstanding capital stock of NovaMart Global Inc. pursuant to the SPA, and the closing of such acquisition (the "Closing") is expected to occur on or about October 15, 2025;
WHEREAS, Executive is the Founder and Chief Executive Officer of NovaMart and holds approximately 18.5% of the outstanding capital stock of NovaMart;
WHEREAS, Executive's continued employment, leadership, and involvement in the integration and operation of NovaMart's business following the Closing is of material importance to the Company and was a material inducement to the Company entering into the SPA;
WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, on the terms and conditions set forth herein;
WHEREAS, this Agreement shall become effective only upon and subject to the occurrence of the Closing; if the Closing does not occur, this Agreement shall be null and void and of no force or effect; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
Right-click to update Table of Contents
ARTICLE 1
EMPLOYMENT; POSITION; DUTIES
Section 1.1 Employment and Term.
The Company agrees to employ Executive, and Executive agrees to serve the Company, for a term of three (3) years commencing on the Effective Date (the "Initial Term"), unless earlier terminated in accordance with Article 5 of this Agreement. Upon expiration of the Initial Term, this Agreement shall automatically renew for successive one (1)-year periods (each, a "Renewal Term" and, together with the Initial Term, the "Term"), unless either party provides written notice of non-renewal to the other party at least ninety (90) days prior to the expiration of the then-current Term. For the avoidance of doubt, the Term shall commence only upon the occurrence of the Effective Date, and the parties shall have no obligations under this Agreement prior to the Effective Date (except as expressly set forth herein).
Section 1.2 Position and Title.
During the Term, Executive shall serve as President, NovaMart Division (or such other title of comparable seniority and scope of responsibility as may be mutually agreed upon by Executive and the Company), reporting directly to the Chief Executive Officer of the Company, Margaret "Meg" Alderton, or her successor in such role. Executive shall be a senior member of the Company's leadership team and shall have such authority and responsibilities as are commensurate with the position of President, NovaMart Division.
Executive's principal place of employment shall be NovaMart's headquarters located at 1100 Congress Avenue, Suite 800, Austin, Texas 78701, or such other location within the Austin, Texas metropolitan area as may be mutually agreed upon by Executive and the Company. Notwithstanding any other provision of this Agreement, the Company shall not require Executive to relocate his principal place of employment outside the Austin, Texas metropolitan area without Executive's prior written consent. For purposes of this Section 1.2, the "Austin, Texas metropolitan area" shall mean the Austin-Round Rock-Georgetown, TX Metropolitan Statistical Area as defined by the United States Office of Management and Budget. Nothing in this Section 1.2 shall preclude the Company from requiring Executive to engage in reasonable business travel in connection with the performance of his duties hereunder.
Section 1.3 Duties and Responsibilities.
During the Term, Executive shall have responsibility for overseeing the day-to-day operations, strategic direction, and integration of the NovaMart business and its online marketplace platform, including without limitation the management and growth of NovaMart's active seller base (currently comprising 62,400+ active sellers), registered buyer community (currently comprising 9.1 million registered buyers), and the NovaShip logistics network (currently consisting of 14 fulfillment centers across 9 states). Executive shall work collaboratively with the Company's senior leadership team to ensure the seamless integration of the NovaMart Division into the Company's broader operations, while preserving and enhancing the value of the NovaMart brand, technology platform, and customer and seller relationships.
Executive shall perform such other duties consistent with Executive's position as may be reasonably assigned to Executive by the Chief Executive Officer of the Company from time to time. Executive shall comply with all policies, procedures, and codes of conduct established by the Company from time to time that are applicable to similarly situated senior executives, to the extent such policies are not inconsistent with the terms of this Agreement.
During the Term, Executive shall devote substantially all of Executive's business time, attention, skill, and efforts to the faithful and diligent performance of his duties hereunder; provided, however, that notwithstanding the foregoing, Executive shall be permitted to:
(i) serve on not more than two (2) boards of directors (or comparable governing bodies) of entities that do not compete with the Company or the NovaMart Division, subject to the prior written approval of the Company's Chief Executive Officer (such approval not to be unreasonably withheld, conditioned, or delayed);
(ii) make and manage passive personal investments, including investments in private funds and publicly traded securities, so long as such investments do not require Executive's active involvement in the day-to-day management or operations of the entities in which such investments are made and do not create a conflict of interest with Executive's obligations hereunder; and
(iii) engage in charitable, educational, religious, and civic activities,
in each case, so long as such activities do not, individually or in the aggregate, materially interfere with Executive's performance of his duties and responsibilities under this Agreement.
Section 1.4 Board Observation.
During the Term, Executive shall be invited to attend meetings of the Board of Directors of the Company (the "Board") in a non-voting observer capacity with respect to matters relating to the NovaMart Division and the integration of NovaMart's business into the Company's operations. Executive's right to attend Board meetings as an observer shall be subject to customary exclusions for matters involving conflicts of interest, attorney-client privileged communications, and other matters as to which the Board determines in good faith that Executive's attendance would be inappropriate. The Company shall provide Executive with copies of all Board materials relating to the NovaMart Division at the same time such materials are provided to members of the Board, subject to the exclusions set forth in the preceding sentence. Executive's attendance at Board meetings shall not give rise to any fiduciary duties of Executive to the Company's stockholders.
ARTICLE 2
COMPENSATION
Section 2.1 Base Salary.
During the Term, the Company shall pay Executive an annual base salary of Six Hundred Twenty-Five Thousand Dollars ($625,000) (the "Base Salary"), payable in accordance with the Company's regular payroll practices as in effect from time to time (currently on a bi-weekly basis), less all applicable withholdings and deductions. The Base Salary shall be effective as of the Effective Date and shall be prorated for any partial payroll period occurring at the commencement or termination of employment.
The Base Salary shall be subject to annual review by the Compensation Committee of the Board (the "Compensation Committee"), commencing with respect to the fiscal year beginning in the first full calendar year following the Effective Date. Any increase in the Base Salary shall be in the sole discretion of the Compensation Committee; provided, however, that Executive's Base Salary shall not be decreased below the initial Base Salary of $625,000 at any time during the Term without Executive's prior written consent. Once increased, the Base Salary as so increased shall constitute the "Base Salary" for purposes of this Agreement and shall not thereafter be reduced without Executive's prior written consent.
Section 2.2 Annual Bonus.
(a) Target Bonus. For each fiscal year of the Company during the Term, Executive shall be eligible to earn an annual cash bonus (the "Annual Bonus") with a target amount equal to seventy-five percent (75%) of Executive's Base Salary as in effect at the beginning of the applicable fiscal year (the "Target Bonus"), resulting in a Target Bonus of Four Hundred Sixty-Eight Thousand Seven Hundred Fifty Dollars ($468,750) per year at the initial Base Salary level.
(b) Performance Metrics. The actual amount of the Annual Bonus shall be determined by the Compensation Committee in its reasonable discretion, based on the achievement of individual performance objectives established for Executive and financial performance metrics for the Company and/or the NovaMart Division (including, without limitation, revenue targets, EBITDA targets, integration milestones, and seller and buyer growth metrics). Such performance objectives and financial metrics shall be established by the Compensation Committee in consultation with Executive within sixty (60) days following the commencement of each fiscal year during the Term. The Annual Bonus for any given fiscal year may range from zero percent (0%) to one hundred fifty percent (150%) of the Target Bonus, based on actual performance relative to the established objectives and metrics.
(c) Payment Timing. The Annual Bonus, if earned, shall be paid to Executive within seventy-five (75) days following the end of the applicable fiscal year, subject to Executive's continued employment through the date on which the Annual Bonus is paid (except as otherwise provided in Article 5 of this Agreement).
(d) Proration for Partial Year. For the fiscal year in which the Effective Date occurs, the Annual Bonus shall be prorated based on the number of days during such fiscal year in which Executive is employed by the Company, divided by the total number of days in such fiscal year. In calculating the prorated Annual Bonus for such partial year, the performance metrics shall be equitably adjusted by the Compensation Committee in consultation with Executive to reflect the shortened period of service.
Section 2.3 Equity Grant.
(a) Initial Grant. On the Effective Date, the Company shall grant to Executive one hundred fifty thousand (150,000) restricted shares of the Company's common stock, par value $0.01 per share, as listed on the Nasdaq Global Select Market under the ticker symbol "CRHI" (the "Restricted Shares"), pursuant to and subject to the terms and conditions of the Company's 2023 Omnibus Equity Incentive Plan (or any successor plan) (the "Equity Plan") and a separate Restricted Stock Award Agreement in the form attached hereto as Exhibit C (the "RSA Agreement").
(b) Vesting. The Restricted Shares shall vest in three (3) equal annual installments of fifty thousand (50,000) shares each on the first, second, and third anniversaries of the Effective Date, respectively, in each case subject to Executive's continued employment with the Company through the applicable vesting date (except as otherwise provided in Section 5.6 of this Agreement and the RSA Agreement). For the avoidance of doubt, in the event of any conflict between this Agreement and the RSA Agreement or the Equity Plan with respect to the terms of the Restricted Shares, the RSA Agreement shall control as between this Agreement and the RSA Agreement, and the Equity Plan shall control as between the RSA Agreement and the Equity Plan.
(c) Plan Terms; Clawback. The Restricted Shares shall be subject to the terms and conditions of the Equity Plan, including without limitation all applicable transfer restrictions, forfeiture conditions, and the Company's clawback and recoupment policies as in effect from time to time (including any policies adopted by the Company to comply with Section 10D of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder by the Securities and Exchange Commission and the Nasdaq Stock Market).
(d) Equitable Adjustments. In the event of any stock split, reverse stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, or other similar adjustment to the Company's common stock, the number and kind of Restricted Shares shall be equitably and proportionately adjusted in accordance with the terms of the Equity Plan.
Section 2.4 Signing Bonus.
No signing bonus shall be payable to Executive under this Agreement. The parties acknowledge that Executive is receiving his pro rata share of the aggregate purchase price of One Billion Two Hundred Million Dollars ($1,200,000,000) payable by the Company in connection with the acquisition of NovaMart under the SPA, in Executive's capacity as a Selling Stockholder thereunder, less the applicable escrow holdback amount and any other adjustments contemplated by the SPA, and that such consideration is separate and apart from the compensation and benefits provided under this Agreement.
ARTICLE 3
EMPLOYEE BENEFITS; PERQUISITES
Section 3.1 Benefit Plans.
During the Term, Executive shall be eligible to participate in all employee benefit plans, programs, and arrangements maintained by the Company from time to time for the benefit of its similarly situated senior executives, including without limitation medical, dental, vision, prescription drug, life insurance, accidental death and dismemberment insurance, short-term and long-term disability insurance, and 401(k) savings and retirement plans, in each case subject to the terms and eligibility requirements of the applicable plan, program, or arrangement. Nothing in this Agreement shall require the Company to establish or maintain any particular benefit plan, program, or arrangement, and the Company reserves the right to amend, modify, or terminate any such plan, program, or arrangement in its sole discretion; provided, that any such amendment, modification, or termination shall apply to Executive on the same basis as it applies to other similarly situated senior executives of the Company.
To the extent Executive was a participant in any employee benefit plan, program, or arrangement maintained by NovaMart immediately prior to the Closing, the Company shall use commercially reasonable efforts to: (i) waive any pre-existing condition exclusions, evidence of insurability requirements, and waiting periods under the Company's employee benefit plans to the extent such exclusions, requirements, or waiting periods would not have applied to Executive under the applicable NovaMart benefit plans; and (ii) credit Executive's prior service with NovaMart for purposes of eligibility to participate and vesting (but not benefit accrual) under the Company's employee benefit plans. The foregoing obligations shall be subject to the terms of the applicable plan documents and any applicable insurance contracts or administrative agreements.
Section 3.2 Paid Time Off.
During the Term, Executive shall be entitled to paid time off ("PTO") in accordance with the Company's PTO policy for senior executives, as in effect from time to time; provided, however, that in no event shall Executive be entitled to fewer than twenty-five (25) business days of PTO per calendar year (prorated for any partial calendar year during the Term), in addition to all Company-recognized holidays. PTO shall accrue and be used in accordance with the Company's applicable policies. Any accrued but unused PTO that Executive has earned under NovaMart's paid time off policies prior to the Closing shall be honored by the Company in accordance with the terms of the SPA and the Company's applicable PTO policies.
Section 3.3 Expense Reimbursement.
The Company shall reimburse Executive for all reasonable and documented out-of-pocket business expenses incurred by Executive in the performance of his duties under this Agreement, in accordance with the Company's expense reimbursement policy as in effect from time to time. Executive shall submit reasonable documentation of such expenses in accordance with the Company's policy. Reimbursement of any such expenses shall be made within thirty (30) days following Executive's submission of appropriate documentation and approval thereof; provided, that in no event shall any reimbursement be made later than the last day of the calendar year following the calendar year in which the expense was incurred (in order to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code")). The amount of expenses eligible for reimbursement in any calendar year shall not affect the amount of expenses eligible for reimbursement in any other calendar year, and Executive's right to reimbursement under this Section 3.3 shall not be subject to liquidation or exchange for any other benefit.
Section 3.4 Indemnification and D&O Insurance.
(a) Indemnification. Executive shall be entitled to indemnification and advancement of expenses to the fullest extent permitted by the General Corporation Law of the State of Delaware and the Company's certificate of incorporation and bylaws, as each may be amended from time to time, with respect to any threatened, pending, or completed action, suit, or proceeding (whether civil, criminal, administrative, or investigative) arising out of or relating to Executive's service as an officer or employee of the Company or the NovaMart Division, or in any other capacity at the request of the Company. The Company and Executive shall enter into a separate indemnification agreement on terms consistent with this Section 3.4 and the Company's standard form of indemnification agreement for senior executive officers, to be executed concurrently with this Agreement.
(b) Directors' and Officers' Liability Insurance. During the Term and for a period of six (6) years following the termination of Executive's employment for any reason, the Company shall maintain directors' and officers' liability insurance covering Executive on terms no less favorable than the coverage maintained by the Company for its other senior executives and members of the Board. In the event the Company merges with or into another entity, or sells all or substantially all of its assets, the Company shall use commercially reasonable efforts to ensure that the surviving or acquiring entity provides equivalent insurance coverage for Executive for the remainder of the six (6)-year period.
ARTICLE 4
RESTRICTIVE COVENANTS
Section 4.1 Confidential Information.
(a) Definition. For purposes of this Agreement, "Confidential Information" means all non-public, confidential, or proprietary information, in any form or medium, whether written, oral, electronic, or visual, relating to the business, operations, finances, technology, products, services, or affairs of the Company, NovaMart, or any of their respective affiliates, subsidiaries, predecessors, or successors, including without limitation: (i) trade secrets; (ii) proprietary technology, software, source code, algorithms, and systems architecture; (iii) customer, seller, buyer, and supplier data, lists, and relationships; (iv) business plans, strategies, forecasts, and projections; (v) financial information, including revenue, cost, margin, and pricing data; (vi) marketing strategies, plans, and analyses; (vii) product development plans and roadmaps; (viii) information regarding employees, compensation, and organizational structure; (ix) information regarding pending or contemplated transactions, investments, or acquisitions; (x) information received from third parties under obligations of confidentiality; and (xi) any other information that is designated as confidential by the Company or that Executive knows or reasonably should know is confidential or proprietary. Confidential Information shall not include information that: (A) is or becomes generally available to the public other than through Executive's breach of this Agreement; (B) was known to Executive on a non-confidential basis prior to Executive's employment with NovaMart; or (C) is received by Executive from a third party that is not known by Executive to be bound by an obligation of confidentiality to the Company or any of its affiliates.
(b) Non-Disclosure Obligation. Executive shall not, during the Term or at any time thereafter, directly or indirectly, disclose, publish, disseminate, use, or permit the disclosure or use of any Confidential Information, except: (i) in the performance of Executive's duties under this Agreement; (ii) as required by applicable law, regulation, or legal process (including any subpoena or order of a court or governmental body of competent jurisdiction), provided that Executive shall, to the extent permitted by law, provide the Company with prompt written notice of any such requirement prior to any disclosure so that the Company may seek a protective order or other appropriate remedy; or (iii) with the prior written consent of the Company. The obligations of confidentiality set forth in this Section 4.1 shall survive the termination of Executive's employment and this Agreement indefinitely.
(c) Defend Trade Secrets Act Notice. In accordance with the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1833(b)), Executive is hereby notified that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b).
Section 4.2 Non-Competition.
(a) Covenant. During the Term and for a period of twenty-four (24) months following the termination of Executive's employment for any reason (the "Restricted Period"), Executive shall not, directly or indirectly, whether as an employee, consultant, officer, director, manager, partner, joint venturer, owner, equity holder, agent, advisor, or in any other capacity, engage in, own, manage, operate, control, be employed by, participate in, consult with, render services to, or be connected in any manner with the ownership, management, operation, or control of any Competing Business.
(b) Definition of Competing Business. For purposes of this Agreement, "Competing Business" means any business, enterprise, or entity that operates an online marketplace platform, ecommerce platform, or logistics software-as-a-service ("SaaS") platform that competes, or is reasonably anticipated to compete, with the business of the Company or the NovaMart Division as conducted (or as proposed to be conducted in any written business plans) as of the date of termination of Executive's employment, in any geographic area in which the Company or the NovaMart Division conducts or has conducted business during the twelve (12)-month period immediately preceding the date of termination. Without limiting the generality of the foregoing, the following entities (and their respective affiliates and successors) shall be deemed Competing Businesses: BrightBazaar Inc. and any other comparable competitors identified on any list of competitors maintained by the Company's corporate development or strategy team as of the date of termination.
(c) Exceptions. Notwithstanding the foregoing, the restrictions of this Section 4.2 shall not prohibit Executive from: (i) the passive ownership of not more than two percent (2%) of the outstanding equity securities of any company whose securities are publicly traded on a national securities exchange or over-the-counter market, so long as Executive has no active participation in the business or management of such company; or (ii) engaging in any activity that has been consented to in writing by the Board or the Chief Executive Officer of the Company.
(d) Enforceability. Executive acknowledges and agrees that the non-competition covenant set forth in this Section 4.2 is reasonable and necessary to protect the Company's legitimate business interests, including without limitation its goodwill, Confidential Information, customer and seller relationships, and the substantial investment the Company is making in connection with the acquisition of NovaMart and Executive's employment hereunder. Executive further acknowledges that the scope, geographic area, and duration of the non-competition covenant are reasonable and that Executive has received adequate and independent consideration for Executive's agreement to be bound by such covenant, including the compensation, equity grants, and other benefits provided under this Agreement and the consideration received by Executive under the SPA. If a court of competent jurisdiction determines that any aspect of the non-competition covenant is unenforceable as written, the parties agree that such court shall have the authority to reform the covenant (including by reducing the duration, geographic scope, or range of prohibited activities) to the minimum extent necessary to render it enforceable, and the covenant as so reformed shall be enforceable to the fullest extent permitted by applicable law (the "blue-pencil" provision).
(e) State Law Considerations. The parties acknowledge that this Agreement is governed by Delaware law as provided in Section 8.1 and that the enforceability of the non-competition covenant set forth in this Section 4.2 is subject to applicable state law. Texas law shall apply with respect to the enforceability of such covenant to the extent required by applicable choice-of-law principles. Executive acknowledges that he has been advised to review Calderwood & Harkness's Restrictive Covenant and Non-Competition Analysis Memorandum regarding the enforceability of non-competition covenants under Texas law and the potential limitations on enforceability that may apply under the laws of California and other states if Executive relocates to such jurisdictions during or after the Restricted Period.
Section 4.3 Non-Solicitation of Employees.
During the Restricted Period, Executive shall not, directly or indirectly, whether on Executive's own behalf or on behalf of any other person or entity, solicit, recruit, hire, engage, or induce, or attempt to solicit, recruit, hire, engage, or induce, any employee, consultant, or independent contractor of the Company or any of its affiliates (including NovaMart and the NovaMart Division) to: (i) terminate or otherwise cease his or her employment or engagement with the Company or any of its affiliates; or (ii) accept employment or engagement with any other person or entity. Notwithstanding the foregoing, this Section 4.3 shall not prohibit Executive from making general solicitations of employment that are not specifically directed at or targeted to employees, consultants, or independent contractors of the Company or any of its affiliates, including without limitation advertisements in newspapers, trade publications, professional journals, or on internet job boards or social media platforms of general circulation, so long as Executive does not otherwise take any action to encourage any such individual to respond to such general solicitation.
Section 4.4 Non-Solicitation of Customers, Sellers, and Business Partners.
During the Restricted Period, Executive shall not, directly or indirectly, whether on Executive's own behalf or on behalf of any other person or entity, solicit, divert, or take away, or attempt to solicit, divert, or take away, the business or patronage of any customer, seller, supplier, vendor, or business partner of the Company or the NovaMart Division with whom Executive had a material business relationship, or about whom Executive received Confidential Information, during the last twenty-four (24) months of Executive's employment with the Company. For purposes of this Section 4.4, a "material business relationship" means a relationship in which Executive personally interacted with, managed, supervised the account of, or had decision-making authority with respect to the business conducted with such customer, seller, supplier, vendor, or business partner.
Section 4.5 intellectual Property Assignment.
(a) Assignment of Work Product. Executive acknowledges and agrees that all inventions, discoveries, developments, improvements, innovations, works of authorship, software, algorithms, source code, trade secrets, designs, processes, methods, techniques, formulas, data, and other intellectual property, whether or not patentable, copyrightable, or otherwise protectable, that are conceived, created, developed, reduced to practice, authored, or contributed to by Executive, alone or jointly with others, during the Term, whether or not during working hours or using the Company's facilities or resources, that relate to the business, operations, products, services, or reasonably anticipated business of the Company or the NovaMart Division, shall be the sole and exclusive property of the Company (collectively, "Work Product"). For the avoidance of doubt, Work Product shall include all intellectual property relating to the NovaMart online marketplace platform, the NovaShip logistics network, and any enhancements, modifications, or derivatives thereof.
(b) Irrevocable Assignment. Executive hereby irrevocably and unconditionally assigns, transfers, and conveys to the Company, without additional consideration, all right, title, and interest in and to all Work Product, including without limitation all patent rights, copyrights (including the right to prepare derivative works), trademarks, trade secrets, moral rights, and all other intellectual property rights therein, throughout the world, in perpetuity. To the extent that any Work Product constitutes a "work made for hire" within the meaning of the U.S. Copyright Act (17 U.S.C. § 101 et seq.), Executive agrees that the Company shall be deemed the author thereof and shall own all copyrights therein. To the extent that any Work Product does not qualify as a "work made for hire," Executive hereby irrevocably assigns to the Company all copyrights therein.
(c) Cooperation; Further Assurances. Executive agrees to execute all documents, instruments, and assignments, and to take all actions, reasonably requested by the Company, at the Company's sole expense, to perfect, register, maintain, and enforce the Company's rights in and to the Work Product, including without limitation the filing and prosecution of patent applications, copyright registrations, and trademark registrations in any and all jurisdictions.
(d) Power of Attorney. In the event Executive fails or is unable to execute any document or take any action required under Section 4.5(c), Executive hereby irrevocably appoints the Company and its duly authorized officers and agents as Executive's attorney-in-fact, coupled with an interest, to execute such documents and take such actions on Executive's behalf for the sole purpose of perfecting, registering, maintaining, and enforcing the Company's rights in the Work Product. Executive acknowledges that such appointment is irrevocable and shall survive the termination of Executive's employment and this Agreement.
(e) Pre-Existing intellectual Property. Executive shall set forth on Exhibit A attached hereto a complete list of all inventions, discoveries, developments, improvements, works of authorship, software, or other intellectual property that were conceived, created, developed, or reduced to practice by Executive prior to the Effective Date, and that Executive wishes to exclude from the assignment provisions of this Section 4.5 (the "Prior Inventions"). If no Prior Inventions are listed on Exhibit A, Executive represents that no such Prior Inventions exist.
(f) State Law Notice. Executive is hereby notified that, notwithstanding any provision of this Section 4.5 to the contrary, this Section 4.5 does not apply to any invention for which no equipment, supplies, facility, or trade secret information of the Company or NovaMart was used and which was developed entirely on Executive's own time, unless the invention: (i) relates to the Company's or NovaMart's business or actual or demonstrably anticipated research or development; or (ii) results from any work performed by Executive for the Company or NovaMart. Executive's attention is directed to the applicable provisions of the Texas Labor Code and any other applicable state statutes regarding employee invention assignment.
Section 4.6 Non-Disparagement.
(a) Executive's Obligation. During the Term and at all times thereafter, Executive shall not, directly or indirectly, make, publish, or communicate any statement, whether written, oral, electronic, or otherwise, that disparages, defames, or places in a negative light the Company or any of its affiliates, or any of their respective current or former directors, officers, employees, agents, products, services, or business practices. This obligation shall not apply to: (i) truthful statements made under oath in connection with any legal, administrative, or regulatory proceeding; (ii) good-faith internal complaints or reports made to the Company's management, Board, legal department, ethics hotline, or compliance function; or (iii) communications with any governmental authority or self-regulatory organization.
(b) Company's Obligation. During the Term and at all times thereafter, the Company shall instruct its members of the Board and its senior officers (at the level of Senior Vice President and above) not to, directly or indirectly, make, publish, or communicate any statement, whether written, oral, electronic, or otherwise, that disparages, defames, or places in a negative light Executive or his professional reputation. This obligation shall be subject to the same exceptions set forth in Section 4.6(a)(i) through (iii) above.
Section 4.7 Cooperation.
During the Term and for a reasonable period thereafter, Executive agrees to cooperate fully and in good faith with the Company in connection with any litigation, arbitration, mediation, investigation, audit, or regulatory proceeding involving the Company or any of its affiliates, including without limitation any matters arising under the SPA or the indemnification provisions thereof, in which Executive's cooperation is reasonably requested by the Company. Such cooperation shall include, without limitation, being available to provide information, interviews, affidavits, declarations, depositions, and testimony, and assisting in the preparation and review of documents, at reasonable times and upon reasonable notice, taking into account Executive's other personal and professional commitments. The Company shall reimburse Executive for all reasonable and documented out-of-pocket expenses (including reasonable attorneys' fees, if applicable) incurred by Executive in connection with providing such cooperation, and, following the termination of Executive's employment, shall compensate Executive at a reasonable hourly rate for time spent in providing cooperation that exceeds twenty (20) hours in any calendar quarter, at an hourly rate to be mutually agreed upon in good faith.
Section 4.8 Remedies for Breach.
(a) Irreparable Harm. Executive acknowledges and agrees that a breach or threatened breach by Executive of any of the covenants and agreements set forth in this Article 4 would cause the Company irreparable injury and harm for which monetary damages alone would be an inadequate and insufficient remedy. Accordingly, in addition to any other rights and remedies available to the Company at law or in equity, the Company shall be entitled to seek temporary, preliminary, and permanent injunctive relief, specific performance, and any other form of equitable relief to enforce the provisions of this Article 4 and to restrain any violation or threatened violation thereof, in the Delaware Court of Chancery (consistent with the dispute resolution provisions of this Agreement and the SPA) or any other court of competent jurisdiction, without the necessity of proving actual damages, posting any bond or other security, or satisfying any other similar requirement that might otherwise be imposed by applicable law.
(b) Cumulative Remedies. The rights and remedies of the Company under this Section 4.8 are cumulative and in addition to, and not in lieu of, any and all other rights and remedies available to the Company at law or in equity, including without limitation the right to recover monetary damages for any breach of this Article 4.
(c) Tolling. If Executive violates any of the covenants set forth in Section 4.2, Section 4.3, or Section 4.4, the Restricted Period applicable to such covenant shall be automatically extended by a period of time equal to the duration of any such violation, so that the Company receives the full benefit of the restricted period contemplated by such provisions.
ARTICLE 5
TERMINATION
Section 5.1 Termination by the Company for Cause.
(a) Right to Terminate. The Company may terminate Executive's employment at any time for Cause, effective upon delivery of written notice to Executive specifying in reasonable detail the grounds constituting Cause.
(b) Definition of Cause. For purposes of this Agreement, "Cause" means the occurrence of any one or more of the following:
(i) Executive's conviction of, or plea of guilty or nolo contendere to, a felony under federal, state, or foreign law, or any crime (whether a felony or misdemeanor) involving fraud, dishonesty, moral turpitude, or breach of fiduciary duty;
(ii) Executive's willful misconduct or gross negligence in the performance of Executive's duties hereunder that results in, or is reasonably likely to result in, material harm to the Company or any of its affiliates;
(iii) Executive's material breach of any provision of this Agreement (including any provision of Article 4), which breach, if capable of cure, is not cured by Executive within thirty (30) days after the Company provides Executive with written notice specifying the nature of such breach in reasonable detail;
(iv) Executive's material violation of any written policy of the Company applicable to Executive, including without limitation the Company's Code of Conduct, anti-harassment policy, insider trading policy, or ethics and compliance policies, which violation, if capable of cure, is not cured by Executive within thirty (30) days after the Company provides Executive with written notice specifying the nature of such violation in reasonable detail;
(v) Executive's willful and continued failure to substantially perform Executive's duties hereunder (other than any such failure resulting from Executive's Disability), which failure is not cured by Executive within thirty (30) days after the Company provides Executive with written notice specifying the nature of such failure in reasonable detail; or
(vi) Executive's commission of any act of fraud, embezzlement, misappropriation, or theft with respect to the assets or property of the Company or any of its affiliates.
(c) Process. Prior to any termination for Cause (other than pursuant to clause (i) or (vi) above, for which no cure period shall be required), the Company shall provide Executive with written notice specifying the grounds for Cause and, to the extent a cure period is applicable, afford Executive the opportunity to cure as set forth above. In addition, Executive shall be afforded the opportunity to be heard before the Board or a committee thereof designated by the Board, prior to any final determination by the Board that Cause exists. For the avoidance of doubt, a termination of Executive's employment shall not be deemed to be for Cause unless and until the Board (or such designated committee) has made a good-faith determination that Cause exists.
Section 5.2 Termination by the Company Without Cause.
The Company may terminate Executive's employment at any time without Cause, for any reason or no reason, upon not less than thirty (30) days' prior written notice to Executive. The Company may, in its sole discretion, elect to pay Executive his Base Salary in lieu of all or any portion of such notice period and relieve Executive of his duties during such notice period, provided that such election shall not affect Executive's entitlement to the severance and termination payments set forth in Section 5.6(b).
Section 5.3 Termination by Executive for Good Reason.
(a) Right to Terminate. Executive may terminate his employment for Good Reason in accordance with the procedures set forth in Section 5.3(c) below.
(b) Definition of Good Reason. For purposes of this Agreement, "Good Reason" means the occurrence of any one or more of the following without Executive's prior written consent:
(i) a material diminution in Executive's Base Salary (other than a reduction that applies proportionately to all similarly situated senior executives of the Company), title, authority, duties, or responsibilities (including, without limitation, a change in Executive's reporting relationship such that Executive no longer reports directly to the Chief Executive Officer of the Company);
(ii) a relocation of Executive's principal place of employment to a location more than fifty (50) miles from the Austin, Texas metropolitan area without Executive's prior written consent;
(iii) a material breach by the Company of any provision of this Agreement, including without limitation any failure by the Company to make any payment or provide any benefit required to be made or provided hereunder; or
(iv) the Company's failure to obtain from any successor (whether by merger, consolidation, acquisition, or sale of all or substantially all of the Company's assets) a written assumption of the Company's obligations under this Agreement.
(c) Process. Executive's termination for Good Reason shall be effective only if: (A) Executive provides the Company with written notice specifying in reasonable detail the event or condition constituting Good Reason within sixty (60) days following the initial occurrence of such event or condition; (B) the Company fails to cure such event or condition within thirty (30) days following receipt of such written notice (the "Cure Period"); and (C) Executive actually resigns within thirty (30) days following the expiration of the Cure Period. If the Company cures the event or condition constituting Good Reason within the Cure Period, Executive's notice of termination for Good Reason shall be deemed withdrawn and of no further force or effect.
Section 5.4 Voluntary Resignation by Executive Without Good Reason.
Executive may resign his employment without Good Reason at any time upon not less than sixty (60) days' prior written notice to the Company. The Company may, in its sole discretion, accept such resignation effective at any time during such notice period, and Executive shall receive his Base Salary through the date on which his resignation becomes effective.
Section 5.5 Termination Due to Death or Disability.
(a) Death. Executive's employment shall terminate automatically upon Executive's death.
(b) Disability. The Company may terminate Executive's employment due to Executive's Disability. For purposes of this Agreement, "Disability" means Executive's inability to perform the essential functions of his position, with or without reasonable accommodation, for a period of one hundred twenty (120) consecutive calendar days, or for a period of one hundred eighty (180) calendar days (whether or not consecutive) in any twelve (12)-month period, as certified by a licensed physician mutually agreed upon by Executive (or his legal representative) and the Company. If Executive and the Company are unable to agree upon a physician, each party shall select a licensed physician, and those two physicians shall select a third physician, whose determination shall be final and binding. The Company shall comply with all applicable requirements of the Americans with Disabilities Act and applicable state disability discrimination laws in connection with any termination of Executive's employment under this Section 5.5(b).
Section 5.6 Severance and Termination Payments.
(a) Termination for Cause or Voluntary Resignation Without Good Reason. Upon termination of Executive's employment by the Company for Cause pursuant to Section 5.1 or by Executive without Good Reason pursuant to Section 5.4, Executive shall be entitled to receive only the following (collectively, the "Accrued Obligations"):
(i) any accrued and unpaid Base Salary through the date of termination, payable in accordance with the Company's regular payroll practices;
(ii) any accrued but unused PTO in accordance with the Company's PTO policy then in effect;
(iii) reimbursement of any business expenses properly incurred by Executive prior to the date of termination in accordance with Section 3.3 and the Company's expense reimbursement policy; and
(iv) any vested benefits to which Executive is entitled under any employee benefit plan, program, or arrangement of the Company, payable in accordance with the terms of such plan, program, or arrangement.
For the avoidance of doubt, upon a termination for Cause or a voluntary resignation without Good Reason, Executive shall not be entitled to any severance payment, any Annual Bonus for the fiscal year in which the termination occurs (except to the extent already paid), or any accelerated vesting of Restricted Shares, and all unvested Restricted Shares shall be immediately and automatically forfeited as of the date of termination.
(b) Termination Without Cause or for Good Reason. Upon termination of Executive's employment by the Company without Cause pursuant to Section 5.2 or by Executive for Good Reason pursuant to Section 5.3, and subject to Executive's execution and non-revocation of a general release of claims in accordance with Section 5.8, Executive shall be entitled to receive the following, in addition to the Accrued Obligations:
(i) Severance Payment. A severance payment equal to twelve (12) months of Executive's Base Salary as in effect on the date of termination (the "Severance Payment"), which, at the initial Base Salary, equals Six Hundred Twenty-Five Thousand Dollars ($625,000). The Severance Payment shall be payable in substantially equal installments over the twelve (12)-month period following the date of termination, in accordance with the Company's regular payroll practices, commencing on the first regular payroll date following the date on which the general release of claims becomes effective and irrevocable (with the first such payment including any installments that would have been payable had the release been effective on the date of termination).
(ii) Pro-Rated Bonus. A pro-rated Annual Bonus for the fiscal year in which the termination occurs, calculated based on actual performance for such fiscal year (as determined by the Compensation Committee in accordance with Section 2.2) and prorated based on the number of days during such fiscal year in which Executive was employed by the Company, payable at the same time as Annual Bonuses are paid to other similarly situated senior executives of the Company for such fiscal year.
(iii) Accelerated Vesting of Restricted Shares. Accelerated vesting of the next tranche of Restricted Shares that would have vested on the next vesting anniversary of the Effective Date following the date of termination, with such shares becoming fully vested and non-forfeitable as of the date of termination. For the avoidance of doubt, any Restricted Shares that are not vested as of the date of termination and are not subject to accelerated vesting under this Section 5.6(b)(iii) shall be immediately and automatically forfeited as of the date of termination.
(iv) COBRA Continuation Coverage. Subject to Executive's timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), the Company shall pay or reimburse Executive for the cost of COBRA premiums for Executive and Executive's eligible dependents for a period of twelve (12) months following the date of termination (or, if earlier, the date on which Executive becomes eligible for comparable group health plan coverage from a subsequent employer). If the Company determines in good faith that paying or reimbursing Executive's COBRA premiums would result in a violation of applicable law (including, without limitation, Section 105(h) of the Code or the Patient Protection and Affordable Care Act), the Company shall, in lieu of such COBRA subsidy, provide Executive with a taxable lump-sum cash payment equal to the total amount of the COBRA premiums that the Company would have paid or reimbursed under this Section 5.6(b)(iv) for the remainder of the twelve (12)-month period, payable within thirty (30) days following the Company's determination.
(c) Termination Due to Death or Disability. Upon termination of Executive's employment due to Executive's death pursuant to Section 5.5(a) or by the Company due to Executive's Disability pursuant to Section 5.5(b), Executive (or Executive's estate or legal representative, as applicable) shall be entitled to receive, in addition to the Accrued Obligations:
(i) a pro-rated Annual Bonus for the fiscal year in which the termination occurs, calculated based on actual performance for such fiscal year (as determined by the Compensation Committee in accordance with Section 2.2) and prorated based on the number of days during such fiscal year in which Executive was employed by the Company, payable at the same time as Annual Bonuses are paid to other similarly situated senior executives of the Company for such fiscal year; and
(ii) accelerated vesting of the next tranche of Restricted Shares that would have vested on the next vesting anniversary of the Effective Date following the date of termination, with such shares becoming fully vested and non-forfeitable as of the date of termination. Any Restricted Shares that are not vested as of the date of termination and are not subject to accelerated vesting under this Section 5.6(c)(ii) shall be immediately and automatically forfeited as of the date of termination.
(d) Non-Renewal by the Company. In the event the Company provides Executive with written notice of non-renewal of the Term in accordance with Section 1.1, and Executive's employment terminates upon the expiration of the then-current Term as a result of such non-renewal, such termination shall be treated as a termination by the Company without Cause for purposes of Section 5.6(b), and Executive shall be entitled to receive the payments and benefits set forth in Section 5.6(b), subject to Executive's execution and non-revocation of a general release of claims in accordance with Section 5.8.
Section 5.7 Section 280G Provisions.
(a) Notwithstanding any other provision of this Agreement to the contrary, if any payment or benefit that Executive would receive from the Company or any of its affiliates in connection with a change of control or other transaction (whether pursuant to this Agreement or any other plan, arrangement, or agreement with the Company or any of its affiliates) (collectively, the "Total Payments") would constitute a "parachute payment" within the meaning of Section 280G of the Code, and the aggregate amount of the Total Payments would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Total Payments shall be reduced (by reducing or eliminating payments or benefits in the following order: (i) cash severance payments; (ii) any accelerated vesting of equity awards; and (iii) any other remaining payments or benefits, in each case in reverse chronological order) to the minimum extent necessary so that no portion of the Total Payments is subject to the Excise Tax; provided, however, that such reduction shall be made only if the after-tax amount of the reduced Total Payments (after taking into account all applicable federal, state, and local income and employment taxes) would be greater than or equal to the after-tax amount of the unreduced Total Payments (after taking into account all applicable federal, state, and local income and employment taxes and the Excise Tax) (the "best net" approach).
(b) All determinations required to be made under this Section 5.7 shall be made by a nationally recognized independent public accounting firm or compensation consulting firm selected by the Company and reasonably acceptable to Executive (the "Accounting Firm"), the costs of which shall be borne by the Company. The Accounting Firm shall provide its determination to the Company and Executive within fifteen (15) business days of the date on which the need for a determination arises.
(c) For the avoidance of doubt, no tax gross-up payment shall be made by the Company with respect to any Excise Tax or other taxes imposed on the Total Payments.
Section 5.8 Release Requirement.
Receipt of any severance or enhanced termination benefits under Section 5.6(b) (including without limitation the Severance Payment, pro-rated Annual Bonus, accelerated vesting of Restricted Shares, and COBRA continuation coverage) is expressly conditioned upon Executive's (or, in the event of Executive's death or Disability, Executive's estate's or legal representative's) timely execution and non-revocation of a general release of claims in substantially the form attached hereto as Exhibit B (the "Release"), within sixty (60) days following the date of termination (the "Release Deadline"). If Executive fails to execute the Release within the Release Deadline, or if Executive revokes the Release within any applicable revocation period, Executive shall not be entitled to receive any payments or benefits under Section 5.6(b) (other than the Accrued Obligations). If the sixty (60)-day period during which the Release must become effective and irrevocable begins in one taxable year and ends in a subsequent taxable year, no payments that are subject to Section 409A of the Code and that are conditioned upon the Release shall be made until the beginning of such subsequent taxable year.
Section 5.9 Return of Property.
Upon termination of Executive's employment for any reason, or at any time upon the Company's request, Executive shall promptly return to the Company all property of the Company and its affiliates (including NovaMart) in Executive's possession or control, including without limitation laptop computers, desktop computers, tablets, mobile telephones, access cards, keys, credit cards, documents (whether in physical or electronic form), files, records, reports, memoranda, and all Confidential Information. Executive shall not retain any copies, summaries, or excerpts of any such property or Confidential Information. Executive shall also delete or destroy any Confidential Information stored on personal devices, cloud storage accounts, or other personal systems, and shall certify in writing to the Company that such deletion or destruction has been completed.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
Section 6.1 Executive's Representations.
Executive hereby represents and warrants to the Company as follows:
(a) The execution, delivery, and performance by Executive of this Agreement do not and will not conflict with, result in a breach or violation of, or constitute a default under, any agreement, contract, obligation, or understanding to which Executive is a party or by which Executive is bound, including without limitation any prior employment agreement, consulting agreement, non-competition agreement, non-solicitation agreement, confidentiality agreement, or other restrictive covenant.
(b) Executive is not subject to any non-compete agreement, non-solicitation agreement, or other restrictive covenant that would prohibit or restrict Executive from performing his duties and obligations under this Agreement or that would otherwise conflict with Executive's obligations hereunder.
(c) Executive has disclosed to the Company, prior to the execution of this Agreement, all material facts relevant to Executive's ability to perform his duties under this Agreement, including without limitation any ongoing or threatened litigation, regulatory proceedings, or investigations in which Executive is or may become a party or witness.
(d) All information provided by Executive to the Company in connection with the negotiation and execution of this Agreement is true, accurate, and complete in all material respects.
Section 6.2 Company's Representations.
The Company hereby represents and warrants to Executive as follows:
(a) The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has all requisite corporate power and authority to enter into and perform its obligations under this Agreement.
(b) The execution and delivery of this Agreement by the Company has been duly authorized by all necessary corporate action, including approval by the Board of Directors of the Company, and no further corporate action is required for the Company to perform its obligations hereunder.
(c) This Agreement constitutes a legal, valid, and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity.
ARTICLE 7
SECTION 409A COMPLIANCE
Section 7.1 General. This Agreement is intended to comply with, or be exempt from, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations and other guidance issued thereunder (collectively, "Section 409A"), and shall be interpreted, administered, and construed in a manner consistent with such intent. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A, the provision shall be read in such a manner that the applicable payments hereunder comply with, or are exempt from

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT

RECITALS

ARTICLE 1

ARTICLE 2

COMPENSATION

ARTICLE 3

ARTICLE 4

RESTRICTIVE COVENANTS

ARTICLE 5

TERMINATION

ARTICLE 6

REPRESENTATIONS AND WARRANTIES

ARTICLE 7

SECTION 409A COMPLIANCE

Record

Parties

Dates

Amounts