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PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP INTERNAL MEMORANDUM

TO: Elena Vasquez-Bright, General Counsel, Cascade Retail Holdings Inc. Theodore "Ted" Langford, SVP Corporate Development, Cascade Retail Holdings Inc.

FROM: Harrison Wexford, Responsible Partner, Mergers & Acquisitions Derek Okonkwo, Lead Associate, Mergers & Acquisitions Calderwood & Harkness LLP

DATE: May 20, 2025

RE: Key Employee Retention Plan — NovaMart Global Inc. Acquisition — Summary of Terms, Eligibility, Vesting, and Form of Retention Bonus Letter

MATTER: Cascade Retail Holdings Inc. — Acquisition of NovaMart Global Inc.

This memorandum is a privileged and confidential communication prepared by Calderwood & Harkness LLP at the direction of and for the exclusive benefit of Cascade Retail Holdings Inc. It is protected by the attorney-client privilege and the attorney work product doctrine. Any disclosure, distribution, or copying of this memorandum, in whole or in part, to any person or entity other than the intended recipients without the prior written consent of Calderwood & Harkness LLP is strictly prohibited.

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I. Executive Summary

This memorandum summarizes the terms and structure of the key employee retention plan (the "Retention Plan") established by Cascade Retail Holdings Inc. ("Cascade" or "CRH") in connection with its acquisition of one hundred percent (100%) of the outstanding capital stock of NovaMart Global Inc. ("NovaMart") pursuant to that certain Stock Purchase Agreement dated May 20, 2025 (the "SPA"), by and among Cascade, NovaMart, the Selling Stockholders party thereto, and Ridgeline Equity Partners, LP, solely in its capacity as the Stockholder Representative.

The Retention Plan establishes an aggregate retention bonus pool of $18,000,000 (Eighteen Million Dollars), funded entirely by Cascade as a post-closing operating expense. The Retention Plan is designed to incentivize the continued employment of key NovaMart personnel through the post-closing integration period, thereby preserving business continuity, protecting marketplace operations, and facilitating the successful integration of NovaMart's technology platform, logistics infrastructure, and commercial capabilities into Cascade's broader retail ecosystem.

Importantly, the Retention Plan excludes Julian Reeves (Founder & Chief Executive Officer of NovaMart) and Priya Narasimhan (Co-Founder & Chief Technology Officer of NovaMart), each of whom is subject to a separate, individually negotiated post-closing employment agreement with Cascade, as further described in Section II.C below. The Retention Plan is instead targeted at the next tier of critical NovaMart personnel—approximately 35 to 50 senior leaders and key contributors spanning engineering, product, operations, commercial, finance, legal, human resources, and fulfillment center management functions.

The Retention Plan was negotiated as part of the overall transaction between Cascade and the Selling Stockholders, which include:

• Ridgeline Equity Partners, LP — 41.2% of NovaMart outstanding common stock

• Brindoval Ventures Fund III, LP — 22.8% of NovaMart outstanding common stock

• Julian Reeves — 18.5% of NovaMart outstanding common stock

• Priya Narasimhan — 8.3% of NovaMart outstanding common stock

• Other management and employee stockholders — 9.2% of NovaMart outstanding common stock (collectively)

The aggregate purchase price for the acquisition is $1,200,000,000 (One Billion Two Hundred Million Dollars), payable in cash at closing, structured as a stock purchase. The Retention Plan is funded by Cascade as a post-closing expense and is not deducted from the Purchase Price, the escrow deposit, or any other component of the transaction consideration. Retention bonus payments are separate from and in addition to any cash consideration received by participating employees in their capacity as Selling Stockholders under the SPA.

This memorandum is organized as follows: Section II provides background on the transaction and the strategic rationale for the Retention Plan; Section III sets forth the detailed terms of the Retention Plan, including the aggregate pool, vesting schedule, continued employment conditions, forfeiture provisions, and the definition of "Cause"; Section IV addresses eligibility criteria and the participant identification and allocation process; Section V discusses tax and withholding considerations, including compliance with Sections 409A and 280G of the Internal Revenue Code; Section VI describes the form and key terms of the individual Retention Bonus Letters; Section VII addresses the interaction of the Retention Plan with other compensation and employment arrangements; Section VIII covers administrative and operational matters; and Section IX sets forth our conclusions and recommended next steps. Appendix A contains the form of Retention Bonus Letter, and Appendix B provides an illustrative allocation schedule template.

II. Background and Transaction Context

A. Transaction Overview

Cascade Retail Holdings Inc. is a Delaware corporation, publicly traded on the Nasdaq Stock Market under the ticker symbol "CRHI," with its principal executive offices located at 4500 Elliott Avenue West, Suite 3200, Seattle, Washington 98119. Cascade operates a diversified portfolio of retail brands and ecommerce platforms, and the NovaMart acquisition represents a transformative strategic initiative to expand Cascade's presence in the online marketplace and specialty consumer goods segments.

NovaMart Global Inc. is a Delaware corporation, privately held, with its principal executive offices and headquarters located at 1100 Congress Avenue, Suite 800, Austin, Texas 78701. NovaMart operates one of the largest independent online marketplace platforms in the United States, specializing in specialty consumer goods, home décor, artisanal products, and consumer electronics accessories. NovaMart's marketplace platform connects approximately 62,400 active sellers with approximately 9.1 million registered buyers, facilitating transactions across a broad range of product categories.

As of the date of this memorandum, NovaMart has approximately 2,400 employees distributed across its Austin, Texas headquarters and 14 fulfillment centers located in nine states, as follows:

NovaMart's financial performance for fiscal year 2024 is summarized as follows:

Pursuant to the SPA, Cascade is acquiring 100% of the outstanding capital stock of NovaMart for an aggregate purchase price of $1,200,000,000, payable in cash at the closing of the transaction (the "Closing" and the date thereof, the "Closing Date"). The acquisition constitutes a change of control under NovaMart's material contracts, including certain third-party vendor agreements, marketplace platform agreements, and fulfillment services agreements.

The targeted Closing Date is October 15, 2025, with an outside date of December 31, 2025 (the "Outside Date") as specified in Section 9.1(b) of the SPA. The Closing is subject to, among other conditions, the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR Act"). We note that the U.S. Department of Justice issued a Second Request on May 8, 2025, and substantial compliance with the Second Request is expected to be achieved in approximately August 2025, with HSR clearance anticipated in the September to October 2025 timeframe. The parties are actively cooperating with the DOJ review process, and we do not currently anticipate material antitrust impediments to consummation of the transaction.

B. Strategic Rationale for Retention Plan

The retention of key NovaMart talent is critical to the success of the acquisition. The Retention Plan addresses several strategic imperatives that Cascade's management and Board of Directors have identified as essential to the realization of the anticipated value and synergies of the NovaMart transaction:

Business Continuity and Marketplace Operations. NovaMart's marketplace platform is a complex, technology-driven business that relies heavily on the institutional knowledge, relationships, and technical expertise of its senior leadership team and key individual contributors. The uninterrupted operation of NovaMart's marketplace—maintaining seller confidence, buyer engagement, search algorithm optimization, and advertising partner relationships—requires the continued presence and commitment of the employees who have built and operate these systems. Any material disruption to NovaMart's workforce during the post-closing integration period could negatively affect seller retention, buyer satisfaction, and overall marketplace performance, with direct consequences for GMV, revenue, and EBITDA.

Integration of Technology and Platform Infrastructure. A central component of the acquisition thesis is the integration of NovaMart's proprietary marketplace technology platform with Cascade's existing ecommerce infrastructure, including the CascadeDirect.com platform. This integration is a multi-year initiative that will require close collaboration between NovaMart's technology and data science teams and Cascade's internal technology organization. The loss of key engineering and product leaders during the integration period would significantly delay and complicate the technology integration roadmap, potentially eroding the strategic and financial rationale for the transaction.

Logistics Network Integration. NovaMart's proprietary fulfillment and logistics operation, branded as "NovaShip," encompasses 14 fulfillment centers across nine states and represents a significant operational asset. The integration of NovaShip into Cascade's broader logistics network requires the retention of experienced operations leaders who understand the day-to-day functioning of these facilities, existing vendor relationships, and the technology systems that power order routing, inventory management, and last-mile delivery coordination.

Competitive Talent Market. The ecommerce and marketplace technology sectors are characterized by intense competition for experienced engineering, product, data science, and operations talent. NovaMart's employees—particularly its senior technology and commercial leaders—are highly sought after by competitors, including major publicly traded ecommerce and technology companies. The announcement of the acquisition creates heightened retention risk, as employees may perceive uncertainty regarding their roles, compensation, and career prospects in the combined organization. The Retention Plan provides a tangible financial incentive for key employees to remain through the critical integration period, reducing the risk of opportunistic recruiting by competitors.

Complementing Founder Employment Agreements. The Retention Plan is designed to complement the individual post-closing employment agreements that Cascade has negotiated with NovaMart's two founders, Julian Reeves and Priya Narasimhan. While those agreements secure the continued engagement of NovaMart's most senior leaders, the Retention Plan extends comparable retention protections to the next tier of critical personnel—the senior vice presidents, vice presidents, and other key leaders whose collective contributions are essential to the successful operation and integration of the NovaMart business.

C. Excluded Individuals — Separate Employment Agreements

As noted above, the following two individuals are excluded from the Retention Plan and are instead subject to separately negotiated post-closing employment agreements with Cascade:

Julian Reeves (Founder & Chief Executive Officer, NovaMart). Mr. Reeves is party to a separate three-year post-closing employment agreement with Cascade, pursuant to which he will serve as President, NovaMart Division, reporting to Cascade's Chief Executive Officer. The material terms of Mr. Reeves's employment agreement include: (i) an annual base salary of $625,000; (ii) an annual target bonus opportunity equal to 75% of base salary; and (iii) a grant of 150,000 restricted shares of Cascade common stock, vesting ratably over three years from the Closing Date, subject to Mr. Reeves's continued employment. The terms of Mr. Reeves's employment agreement are set forth in Exhibit G-1 to the SPA.

Priya Narasimhan (Co-Founder & Chief Technology Officer, NovaMart). Ms. Narasimhan is party to a separate three-year post-closing employment agreement with Cascade, pursuant to which she will serve as Chief Technology Officer, NovaMart Division, reporting to Mr. Reeves and, on a dotted-line basis, to Cascade's Chief Technology Officer. The material terms of Ms. Narasimhan's employment agreement include: (i) an annual base salary of $575,000; (ii) an annual target bonus opportunity equal to 70% of base salary; and (iii) a grant of 125,000 restricted shares of Cascade common stock, vesting ratably over three years from the Closing Date, subject to Ms. Narasimhan's continued employment. The terms of Ms. Narasimhan's employment agreement are set forth in Exhibit G-2 to the SPA.

Neither Mr. Reeves nor Ms. Narasimhan is eligible to participate in the Retention Plan or to receive any retention bonus payments thereunder. Their post-closing compensation and retention incentives are addressed exclusively through their respective employment agreements.

III. Retention Plan Terms

This Section III sets forth the detailed terms and conditions of the Retention Plan, including the aggregate pool, vesting and payment schedule, continued employment conditions, forfeiture provisions, and the definition of "Cause."

A. Aggregate Pool

The total retention bonus pool under the Retention Plan is $18,000,000 (Eighteen Million Dollars). This pool represents the maximum aggregate amount of retention bonus payments that may be made under the Retention Plan. The pool is allocated among eligible participants through individual retention bonus awards, the specific dollar amounts of which are determined by Cascade in consultation with NovaMart management—specifically, Julian Reeves (CEO) and Douglas "Doug" Whitfield (Chief Financial Officer).

Individual award amounts will vary based on each participant's role, seniority, and strategic importance to the post-closing integration. The allocation methodology is described in greater detail in Section IV.B below. The aggregate of all individual award amounts under the executed Retention Bonus Letters shall not exceed the $18,000,000 pool, and any unallocated portion of the pool (including amounts forfeited by participants who decline to execute a Retention Bonus Letter or whose employment terminates prior to the applicable payment date) shall revert to Cascade and shall not be reallocated to other participants.

B. Vesting Schedule

Each participant's individual retention bonus award is divided into two equal installments, each representing 50% of the participant's total award amount:

1. First Installment (50%)

The first installment represents 50% of each participant's individual retention bonus award, with the aggregate first installment payments totaling $9,000,000 across all participants. Each participant's first installment shall become payable upon the Closing of the transaction. Specifically, payment of the first installment shall be made within ten (10) business days following the Closing Date through NovaMart's regular payroll system or, if the Closing Date and the payroll processing date are such that NovaMart's payroll system has been integrated into or replaced by Cascade's payroll system, through Cascade's regular payroll system. Payment shall be made in cash by direct deposit or company check, consistent with the applicable entity's standard payroll practices.

2. Second Installment (50%)

The second installment represents the remaining 50% of each participant's individual retention bonus award, with the aggregate second installment payments totaling $9,000,000 across all participants. Each participant's second installment shall become payable on the first anniversary of the Closing Date (the "Anniversary Date"). Specifically, payment of the second installment shall be made within ten (10) business days following the Anniversary Date through Cascade's regular payroll system. Payment shall be made in cash by direct deposit or company check, consistent with Cascade's standard payroll practices.

By way of illustration, if a participant is awarded an individual retention bonus of $500,000, the first installment of $250,000 would be payable within ten business days of the Closing Date, and the second installment of $250,000 would be payable within ten business days of the first anniversary of the Closing Date, in each case subject to the continued employment condition described below.

C. Continued Employment Condition

Both installments of each participant's retention bonus award are subject to the participant's continued employment with NovaMart (or, following the Closing, NovaMart's successor entity or any affiliate of Cascade to which the participant's employment is transferred) through the applicable payment date. The continued employment condition is a fundamental requirement of the Retention Plan and is designed to ensure that retention bonus payments serve their intended purpose of incentivizing participants to remain with the organization through the critical post-closing integration period.

First Installment. To be eligible to receive the first installment, a participant must be actively employed by NovaMart (or its successor or any affiliate of Cascade) as of the Closing Date. For purposes of this condition, a participant shall not be considered "actively employed" if, as of the Closing Date, the participant has delivered or received a notice of termination of employment, whether such termination is to be effective on, before, or after the Closing Date. A participant who has been placed on a performance improvement plan but who has not received a notice of termination shall be considered actively employed for purposes of this condition.

Second Installment. To be eligible to receive the second installment, a participant must be actively employed by NovaMart (or its successor or any affiliate of Cascade) as of the Anniversary Date. As with the first installment, a participant shall not be considered "actively employed" if, as of the Anniversary Date, the participant has delivered or received a notice of termination of employment, whether such termination is to be effective on, before, or after the Anniversary Date.

Treatment of Approved Leaves of Absence. Approved leaves of absence—including medical leave (under the Family and Medical Leave Act or applicable state medical leave laws), family leave, military leave (under the Uniformed Services Employment and Reemployment Rights Act), or other leaves approved in writing by the participant's manager and the applicable human resources department—shall not be treated as a termination of employment for purposes of the continued employment condition. However, a participant on an approved leave of absence must return to active employment on or before the applicable payment date (or such later date as may be required by applicable federal, state, or local law, including but not limited to FMLA, USERRA, or applicable state equivalents) in order to receive the applicable installment. Any participant who fails to return from an approved leave of absence by the applicable payment date (or such later date as required by law) shall forfeit the unpaid installment.

D. Forfeiture Provisions

General Forfeiture Rule. If a participant's employment with NovaMart (or its successor or any affiliate of Cascade) terminates for any reason prior to an applicable payment date—whether by voluntary resignation by the participant or termination by the employer—the unpaid installment or installments, as applicable, shall be forfeited in full. The participant shall have no right, claim, or entitlement to any forfeited amounts, and Cascade shall have no obligation to make any payment with respect thereto.

By way of example, if a participant voluntarily resigns after the Closing Date but before the Anniversary Date, the participant would retain the first installment (which was paid at closing) but would forfeit the second installment in its entirety. Similarly, if a participant's employment is terminated for Cause (as defined below) after the Closing Date but before the Anniversary Date, the participant would retain the first installment but would forfeit the second installment.

Exception — Termination Without Cause. Notwithstanding the general forfeiture rule, if a participant's employment is terminated by Cascade, NovaMart (or its successor), or any affiliate of Cascade without "Cause" (as defined in Section III.E below) at any time after the Closing Date but prior to the Anniversary Date, the participant shall be entitled to receive the second installment as though the participant had remained continuously employed through the Anniversary Date. In such event, the second installment shall be paid to the participant within ten (10) business days following the date of such termination without Cause, or within ten (10) business days following the Anniversary Date, whichever is earlier, subject to the participant's execution and non-revocation of a general release of claims in favor of Cascade and its affiliates in a form satisfactory to Cascade. This accelerated vesting provision is intended to protect participants who are involuntarily terminated without fault during the integration period and to ensure that Cascade bears the economic risk of any workforce reductions or organizational changes that result in the termination of participants' employment.

For the avoidance of doubt, this exception does not apply to the first installment. If a participant's employment terminates (whether with or without Cause, or by voluntary resignation) prior to the Closing Date, the participant forfeits both installments in their entirety, and the accelerated vesting exception does not apply.

Exception — Death or Disability. Notwithstanding the general forfeiture rule, if a participant dies or becomes permanently disabled (as reasonably determined by Cascade in accordance with its standard disability determination procedures and applicable law) at any time prior to an applicable payment date, the unpaid installment or installments, as applicable, shall be paid to the participant (or, in the case of death, to the participant's estate or designated beneficiary) within thirty (30) days of the date of such death or disability determination. This provision is intended to ensure that participants and their families are not penalized by circumstances beyond the participant's control.

Reversion of Forfeited Amounts. Any amounts forfeited by a participant under the general forfeiture rule shall revert to Cascade. Forfeited amounts shall not be reallocated to other participants or otherwise redistributed under the Retention Plan. Cascade retains sole and absolute discretion with respect to any forfeited amounts.

E. Definition of "Cause"

For purposes of the Retention Plan and the individual Retention Bonus Letters, "Cause" shall mean:

(i) the participant's material breach of any employment agreement, confidentiality agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, or material company policy, provided that if such breach is capable of cure, the participant shall be provided with written notice specifying the nature of the breach and a reasonable cure period of not less than fifteen (15) days to cure such breach;

(ii) the participant's commission of an act of fraud, embezzlement, misappropriation of funds, or willful misconduct that is materially harmful to the Company (defined as NovaMart, Cascade, or any of their respective affiliates);

(iii) the participant's conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude, dishonesty, or breach of trust; or

(iv) the participant's willful and continued failure to substantially perform the duties of the participant's position (other than any such failure resulting from the participant's disability) after written notice from the Company specifying the nature of such failure and a reasonable cure period of not less than fifteen (15) days from the date of such notice.

The determination of whether "Cause" exists shall be made by Cascade in good faith after consultation with legal counsel. For purposes of clause (iv) above, no act or failure to act on the part of the participant shall be considered "willful" unless it is done, or omitted to be done, by the participant in bad faith or without reasonable belief that the participant's action or omission was in the best interests of the Company.

IV. Eligibility Criteria

A. General Eligibility

Eligible participants in the Retention Plan are key NovaMart employees who have been identified by Cascade management—specifically, Ted Langford, SVP Corporate Development—in consultation with NovaMart's Chief Executive Officer, Julian Reeves, and Chief Financial Officer, Douglas "Doug" Whitfield. As noted above, Julian Reeves and Priya Narasimhan are excluded from the Retention Plan by virtue of their separate post-closing employment agreements with Cascade.

Eligible employees include, but are not limited to, the following categories of NovaMart personnel:

• Senior Vice Presidents and Vice Presidents in engineering, product, operations, and commercial functions, including individuals responsible for NovaMart's core marketplace platform, mobile applications, seller tools, buyer experience, and data analytics capabilities.

• Heads of NovaMart business verticals, including but not limited to the NovaHome home décor vertical, the NovaArtisan artisanal products vertical, and the NovaTech consumer electronics accessories vertical. These individuals manage dedicated seller communities, curated buyer experiences, and vertical-specific merchandising and marketing initiatives.

• Senior technology and data science leaders responsible for NovaMart's proprietary marketplace platform and search algorithms, including the engineering teams that develop and maintain NovaMart's search and recommendation engine, pricing optimization tools, fraud detection systems, and platform infrastructure. The retention of these individuals is particularly critical to the planned integration of NovaMart's technology stack with Cascade's CascadeDirect.com platform.

• NovaShip logistics operations leadership across the 14 fulfillment centers, including regional operations directors, fulfillment center general managers, and transportation and logistics managers. These individuals oversee the day-to-day operations of NovaMart's fulfillment network, manage relationships with third-party carriers, and ensure compliance with safety, quality, and service level standards.

• Key finance, legal, and human resources personnel, including Douglas Whitfield (Chief Financial Officer) and Amanda Trevino (General Counsel). These individuals possess critical institutional knowledge regarding NovaMart's financial operations, contractual relationships, intellectual property portfolio, employment practices, and regulatory compliance posture. Their continued engagement during the integration period is essential for due diligence completion, financial reporting alignment, and seamless transfer of corporate functions.

• Sales and business development leaders managing relationships with NovaMart's approximately 62,400 active sellers and key advertising and platform partners. NovaMart's commercial success depends on the strength of its seller relationships and its partnerships with key vendors, including Stratton Digital Media Inc. (NovaMart's primary digital advertising partner), PayStream Financial Technologies Inc. (NovaMart's payment processing partner), Pinnacle Cloud Solutions Inc. (NovaMart's cloud infrastructure provider), and Redline Freight Corp. (NovaMart's primary third-party logistics partner for last-mile delivery). The retention of the business development and partnership management leaders who maintain these relationships is critical to ensuring continuity of service and avoiding disruption to NovaMart's revenue streams.

B. Identification and Allocation Process

Cascade and NovaMart management will finalize the definitive list of eligible participants and individual award allocations prior to the Closing Date. The identification and allocation process is expected to proceed as follows:

Initial Identification. Cascade management (led by Ted Langford) and NovaMart management (led by Julian Reeves and Doug Whitfield) will collaborate to develop an initial list of proposed participants based on a review of NovaMart's organizational charts, compensation data, performance assessments, and retention risk assessments. This initial list is expected to be developed within 60 days of the date of this memorandum (i.e., by approximately July 20, 2025).

Allocation Recommendations. Following the development of the initial participant list, Cascade and NovaMart management will develop proposed individual award allocations for each participant. Individual allocations will be memorialized in executed Retention Bonus Letters (as described in Section VI below) and will reflect the following guiding principles:

(a) Criticality to Post-Closing Integration and Business Continuity. Participants whose roles are most directly tied to the success of the post-closing integration—including technology integration leads, operations leaders, and key commercial relationship managers—will generally receive larger allocations.

(b) Retention Risk Assessment. Participants who are assessed to have a higher likelihood of departure absent a retention incentive—based on factors such as tenure, compensation relative to market, alternative employment opportunities, and response to change of control events—will generally receive larger allocations.

(c) Scope of Responsibilities and Difficulty of Replacement. Participants who occupy roles that are uniquely important and difficult to replace—either because of specialized technical expertise, deep institutional knowledge, or the breadth of their responsibilities—will generally receive larger allocations.

(d) Geographic Distribution. Allocations will take into account the geographic distribution of NovaMart's operations, ensuring that key leaders at fulfillment centers and regional offices across NovaMart's nine-state footprint are appropriately incentivized to remain through the integration period.

Final Approval. The final participant list and individual allocations are subject to approval by Elena Vasquez-Bright (General Counsel, Cascade) and Ted Langford (SVP Corporate Development, Cascade). The target completion date for final approval of all allocations is approximately 30 days prior to the anticipated Closing Date (i.e., by approximately September 15, 2025, based on a targeted October 15, 2025 closing).

Expected Number of Participants. The number of eligible participants is expected to be approximately 35 to 50 individuals, representing a targeted subset of NovaMart's senior leadership and critical talent across the company's approximately 2,400-person workforce. This participant group represents approximately 1.5% to 2.1% of NovaMart's total employee population but includes the individuals who are most critical to the successful operation, integration, and continued growth of the NovaMart business.

C. Employees Holding NovaMart Equity

Certain eligible participants may also be among the "Other Management and Employee Stockholders" who collectively hold approximately 9.2% of NovaMart's outstanding common stock (including shares issuable upon the exercise of vested stock options). These individuals will receive cash consideration under the SPA in their capacity as Selling Stockholders, in addition to any retention bonus payments under the Retention Plan.

It is important to note that retention bonus awards under the Retention Plan are separate from and in addition to any cash consideration received by such participants as Selling Stockholders under the SPA. The Retention Plan does not reduce, offset, or otherwise affect the transaction consideration to which any participant is entitled as a stockholder of NovaMart. Similarly, the transaction consideration does not reduce, offset, or otherwise affect the retention bonus payments to which a participant is entitled under the Retention Plan.

Participants who are Selling Stockholders remain fully subject to the indemnification and escrow provisions of the SPA with respect to their stockholder consideration. Specifically:

• Escrow. Eight percent (8%) of the aggregate Purchase Price ($96,000,000) shall be deposited into an escrow account at closing, allocated pro rata among the Selling Stockholders based on their respective pro rata share of the Purchase Price. Each participant who is a Selling Stockholder will have a pro rata portion of their stockholder consideration withheld and deposited into the escrow account.

• Indemnification Cap. The aggregate indemnification obligations of the Selling Stockholders under Article VIII of the SPA are subject to a cap of eighteen percent (18%) of the aggregate Purchase Price ($216,000,000).

• Survival Period. The general representations and warranties of NovaMart and the Selling Stockholders under the SPA survive for a period of twenty-four (24) months following the Closing Date, subject to certain exceptions for fundamental representations, tax representations, and fraud, which survive for longer periods as specified in the SPA.

Retention bonus payments under the Retention Plan are not subject to the escrow, indemnification cap, or survival provisions of the SPA, as they are obligations of Cascade (not consideration paid by the Selling Stockholders) and are not contingent upon or related to the representations and warranties of the Selling Stockholders.

V. Tax and Withholding Considerations

A. Tax Treatment

Retention bonus payments under the Retention Plan are treated as supplemental wages for federal income tax purposes within the meaning of Treasury Regulations Section 31.3402(g)-1. As supplemental wages, retention bonus payments are subject to applicable federal, state, and local income tax withholding and employment taxes, including:

• Federal income tax withholding at the applicable supplemental wage rate (currently 22% for supplemental wages up to $1 million in a calendar year and 37% for supplemental wages in excess of $1 million in a calendar year);

• Federal Insurance Contributions Act (FICA) taxes, including the employee's share of Social Security tax (6.2%, subject to the Social Security wage base, which is $176,100 for 2025) and Medicare tax (1.45%, with an additional 0.9% Medicare surtax on wages in excess of $200,000 for single filers or $250,000 for married filing jointly);

• Federal Unemployment Tax Act (FUTA) taxes (employer-side only; not withheld from employee wages); and

• Applicable state and local income tax withholding and employment taxes, based on each participant's state of employment and/or residence.

NovaMart maintains employees in multiple states, and the state income tax implications vary by jurisdiction. The NovaMart nexus states relevant to employee taxation include the following:

Cascade (or NovaMart, as applicable, depending on which entity processes the relevant payroll at the time of payment) will report all retention bonus payments on IRS Form W-2 for the applicable tax year. Participants should be advised to consult with their personal tax advisors regarding the tax consequences of retention bonus payments, including the potential impact on estimated tax payments and year-end tax liability.

B. Section 409A Compliance

The Retention Plan is intended to comply with, or be exempt from, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended ("Section 409A"), and the Treasury Regulations promulgated thereunder. Section 409A imposes strict rules on the timing and form of payments of nonqualified deferred compensation, including penalties of an additional 20% excise tax and interest on the amount of any inclusion in income for failure to comply.

The Retention Plan is structured so that each installment payment qualifies as a short-term deferral within the meaning of Treasury Regulations Section 1.409A-1(b)(4). Under the short-term deferral rule, a payment is not treated as deferred compensation subject to Section 409A if it is made on or before the later of: (i) the 15th day of the third month following the end of the service provider's taxable year in which the right to the payment is no longer subject to a substantial risk of forfeiture; or (ii) the 15th day of the third month following the end of the service recipient's taxable year in which the right to the payment is no longer subject to a substantial risk of forfeiture. Because each installment of the retention bonus is payable within ten business days following the applicable vesting date (the Closing Date for the first installment and the Anniversary Date for the second installment), each installment is expected to fall well within the applicable 2½-month short-term deferral period, and accordingly neither installment should constitute deferred compensation subject to Section 409A.

With respect to the accelerated payment provisions applicable upon termination without Cause, death, or disability (as described in Section III.D above), such accelerated payments are intended to qualify under the permissible payment acceleration rules of Treasury Regulations Section 1.409A-3(j)(4). In particular, the acceleration of the second installment upon a termination without Cause is structured to occur within the same taxable year in which the original vesting date would have occurred, or within the applicable short-term deferral period, so as not to run afoul of Section 409A's restrictions on payment acceleration.

Notwithstanding the foregoing, each Retention Bonus Letter will include a standard Section 409A savings clause, providing that: (a) the Retention Plan and the Retention Bonus Letter are intended to comply with, or be exempt from, Section 409A; (b) the terms of the Retention Bonus Letter shall be interpreted and construed in a manner consistent with such intent; (c) in no event shall Cascade, NovaMart, or any of their affiliates be liable for any additional tax, interest, or penalty imposed under Section 409A; and (d) notwithstanding any provision to the contrary, if a participant is a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) on the date of the participant's "separation from service" within the meaning of Section 409A, any payment that constitutes nonqualified deferred compensation shall be delayed until the date that is six months and one day following the participant's separation from service (or, if earlier, the participant's date of death).

C. Section 280G Analysis

Because NovaMart is a privately held corporation (and not a small business corporation described in Section 1361(b)(1) of the Code), Section 280G of the Internal Revenue Code ("Section 280G") applies to payments made to "disqualified individuals" (generally, officers, highly compensated employees, and significant shareholders) that are contingent upon a change in the ownership or effective control of NovaMart or a change in the ownership of a substantial portion of its assets. Under Section 280G, if the aggregate present value of "parachute payments" to a disqualified individual equals or exceeds three times (3×) the individual's "base amount" (i.e., the individual's average annual compensation from NovaMart for the five taxable years preceding the change of control), the excess over one times (1×) the base amount constitutes an "excess parachute payment." Excess parachute payments result in: (i) the loss of the deduction for the employer under Section 280G; and (ii) the imposition of a 20% nondeductible excise tax on the disqualified individual under Section 4999 of the Internal Revenue Code.

Retention bonus payments under the Retention Plan that are contingent upon or otherwise payable in connection with the closing of the acquisition (a change of control of NovaMart) may constitute parachute payments for purposes of Section 280G. In addition, other payments and benefits to participants that are triggered by or accelerated as a result of the change of control—including the cash-out of vested NovaMart stock options, any severance payments, accelerated vesting of any equity awards, and the value of non-competition agreements—must be aggregated with retention bonus payments for purposes of the Section 280G analysis.

Ongoing Section 280G Analysis. Sylvia Hartwell (Specialist Partner, Tax, Calderwood & Harkness LLP) and Whitmore & Paige LLP (Sandra Chiu) are currently conducting a participant-by-participant Section 280G analysis for each individual expected to be designated as a Retention Plan participant. This analysis will determine, for each disqualified individual, whether the aggregate parachute payments (including the retention bonus, stock option cash-out proceeds, and any other payments contingent on the change of control) exceed the applicable safe harbor threshold (3× the base amount). The analysis requires detailed compensation data for each participant for the five most recent taxable years, which is being compiled by NovaMart's finance team under the direction of Doug Whitfield.

Stockholder Approval Under Section 280G(b)(5)(B). If any participant's aggregate parachute payments would result in an "excess parachute payment" under Section 280G, the SPA contemplates that NovaMart will seek stockholder approval under Section 280G(b)(5)(B) prior to the Closing to exempt such payments from the Section 280G excise tax. Specifically, Section 280G(b)(5)(B) provides that payments to a disqualified individual of a corporation that was not publicly traded immediately before the change of control are not treated as parachute payments if: (a) the payments are approved by a vote of the persons who owned, immediately before the change in ownership or control, more than 75% of the voting power of all outstanding stock of the corporation entitled to vote; and (b) there was adequate disclosure to stockholders of all material facts concerning all payments that would constitute parachute payments (but for the stockholder approval). The stockholder vote package will be prepared and included in the NovaMart Stockholder Written Consent Solicitation Package, which will be circulated to the Selling Stockholders prior to the Closing in accordance with Section 6.12 of the SPA.

No Tax Gross-Up; Best-Net Cutback. Consistent with Cascade's corporate policy and current market practice, the Retention Plan does not provide for a tax gross-up with respect to any excise tax imposed under Section 4999 of the Internal Revenue Code. Instead, each Retention Bonus Letter will include a "best net" cutback provision, pursuant to which a participant's aggregate parachute payments will be reduced to the safe harbor amount (i.e., an amount equal to 2.99 times the participant's base amount) only if the after-tax benefit to the participant of receiving the reduced amount (without the imposition of the Section 4999 excise tax) would be greater than the after-tax benefit to the participant of receiving the full, unreduced amount (after taking into account the 20% excise tax under Section 4999). In other words, the cutback applies only when the participant is better off (on an after-tax basis) receiving the reduced amount. If the participant would be better off receiving the full amount notwithstanding the excise tax, no cutback shall apply, and the participant shall be responsible for any excise tax liability. The "best net" calculation will be performed by Cascade's tax advisors (or such other tax professional as Cascade may designate) and will be binding on the participant, absent manifest error.

VI. Form of Retention Bonus Letter

A. Overview

Each eligible participant will receive an individual Retention Bonus Letter from Cascade Retail Holdings Inc. (or, if the Retention Bonus Letter is distributed prior to the Closing, from NovaMart Global Inc., as applicable) setting forth the specific terms of the participant's retention bonus award under the Retention Plan. The Retention Bonus Letter is a standalone agreement between the issuing entity and the participant and does not constitute an amendment, modification, or supplement to the participant's existing employment agreement, offer letter, or any other employment-related agreement with NovaMart or Cascade.

The execution of the Retention Bonus Letter by the participant is a condition precedent to the participant's receipt of any retention bonus payments. A participant who declines to execute the Retention Bonus Letter, or who fails to return an executed copy by the deadline specified in the letter, will forfeit the participant's allocated retention bonus award in its entirety, and such forfeited amount will revert to Cascade without further obligation.

The form of Retention Bonus Letter is attached hereto as Appendix A. The final form of the Retention Bonus Letter is subject to review and approval by Elena Vasquez-Bright (General Counsel, Cascade) prior to distribution to eligible participants.

B. Key Terms of the Retention Bonus Letter

The Retention Bonus Letter will contain the following material terms and provisions:

Recitals. The Retention Bonus Letter will include introductory recitals referencing: (a) the acquisition of NovaMart by Cascade pursuant to the Stock Purchase Agreement dated May 20, 2025; (b) the purpose of the retention bonus, which is to incentivize the participant's continued employment through the post-closing integration period; and (c) the participant's acknowledgment that the retention bonus is being offered to the participant in consideration of the participant's continued employment and the participant's agreement to the terms and conditions set forth in the letter.

Award Amount. The Retention Bonus Letter will specify the participant's individual retention bonus award amount in dollars, divided into two equal installments: the first installment (equal to 50% of the total award) and the second installment (equal to the remaining 50% of the total award). By way of example, if a participant is awarded a total retention bonus of $600,000, the letter will specify a first installment of $300,000 and a second installment of $300,000.

Payment Dates. The first installment shall be payable within ten (10) business days following the Closing Date. The second installment shall be payable within ten (10) business days following the first anniversary of the Closing Date (the Anniversary Date). The Retention Bonus Letter will include blank fields for the Closing Date and Anniversary Date, which will be completed upon execution or, if the exact Closing Date is not yet known at the time of distribution, will be defined by reference to the Closing Date as defined in the SPA.

Continued Employment Condition. The Retention Bonus Letter will set forth the continued employment condition as described in Section III.C of this memorandum, including the requirements that the participant be actively employed and not have delivered or received a notice of termination as of the applicable payment date, and the treatment of approved leaves of absence.

Forfeiture and Acceleration. The Retention Bonus Letter will set forth the forfeiture provisions and acceleration exceptions as described in Section III.D of this memorandum, including: (a) the general forfeiture rule for terminations of employment prior to an applicable payment date; (b) the acceleration of the second installment upon termination without Cause after the Closing Date; and (c) the payment of unpaid installments upon death or disability. The Retention Bonus Letter will specify that the acceleration of the second installment upon termination without Cause is conditioned upon the participant's execution and non-revocation of a general release of claims.

Definition of Cause. The Retention Bonus Letter will include the definition of "Cause" as set forth in Section III.E of this memorandum.

Withholding. The Retention Bonus Letter will include a clear acknowledgment by the participant that all retention bonus payments are subject to applicable federal, state, and local income tax withholding and employment taxes, and that the net amount received by the participant after withholding may be less than the gross award amount.

Section 409A Compliance. The Retention Bonus Letter will include a standard Section 409A savings clause, as described in Section V.B of this memorandum, including provisions addressing the intent to comply with or be exempt from Section 409A, interpretation consistent with such intent, no liability for Section 409A penalties, and the six-month delay for specified employees, if applicable.

Section 280G Best-Net Cutback. The Retention Bonus Letter will include the "best net" cutback provision as described in Section V.C of this memorandum, providing that aggregate parachute payments will be reduced to the safe harbor amount only if the after-tax benefit to the participant of receiving the reduced amount exceeds the after-tax benefit of receiving the full amount after taking into account the Section 4999 excise tax.

Confidentiality. The Retention Bonus Letter will include a confidentiality provision requiring the participant to keep the existence and terms of the retention bonus confidential and not to disclose such information to any person other than: (a) the participant's spouse or domestic partner; (b) the participant's tax, financial, and legal advisors, provided that such advisors are informed of the confidentiality obligation; and (c) as required by applicable law, regulation, or legal process. The confidentiality provision is intended to prevent the creation of internal morale issues and competitive intelligence risks that could arise from the disclosure of individual retention bonus amounts.

No Employment Guarantee. The Retention Bonus Letter will include a clear statement that the letter does not constitute a guarantee of continued employment, does not create a right to continued employment for any specific period, and does not alter the at-will nature of the participant's employment (to the extent applicable under the law of the participant's state of employment). The participant's employment remains terminable at any time, with or without cause and with or without notice, subject to the terms of any separate employment agreement between the participant and NovaMart or Cascade.

Governing Law. The Retention Bonus Letter will be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law, consistent with the governing law provision of the SPA.

Dispute Resolution. Any dispute arising out of or relating to the Retention Bonus Letter shall be resolved exclusively in the Delaware Court of Chancery (or, if the Court of Chancery declines to accept jurisdiction, any state or federal court located in the State of Delaware), consistent with the dispute resolution provision of the SPA. Each party shall consent to the personal jurisdiction of such courts and waive any objection to venue or inconvenient forum.

Entire Agreement / Integration. The Retention Bonus Letter, together with the participant's existing employment agreement (if any) and any restrictive covenant agreements (including non-competition, non-solicitation, confidentiality, and invention assignment agreements), shall constitute the entire agreement between the parties with respect to the subject matter of the retention bonus. The Retention Bonus Letter supersedes all prior and contemporaneous oral and written communications, representations, and agreements with respect to the retention bonus, but does not supersede or modify the terms of the participant's existing employment agreement or restrictive covenant agreements.

Counterparts and Execution. The Retention Bonus Letter may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. The Retention Bonus Letter may be executed and delivered by electronic signature (including via Brightwater Software, Ashford Health IT, or similar electronic signature platform), which shall be deemed an original signature for all purposes.

C. Execution Timeline

The execution timeline for the Retention Bonus Letters is designed to align with the expected Closing Date and to ensure that all necessary documentation is in place prior to or contemporaneous with the Closing. The anticipated timeline is as follows:

Preparation of Final Form. The final form of the Retention Bonus Letter will be prepared by Calderwood & Harkness LLP and submitted to Elena Vasquez-Bright and Ted Langford for review and approval. Target completion: approximately 45 days prior to the anticipated Closing Date (approximately September 1, 2025, based on a targeted October 15, 2025 closing).

Individualization and Distribution. Following approval of the final form, individual Retention Bonus Letters will be prepared for each eligible participant, populated with the participant's name, title, individual award amount, and other participant-specific information. Distribution of the Retention Bonus Letters to eligible participants is contingent upon the satisfaction or waiver of all conditions precedent to the Closing under Article VII of the SPA, including HSR clearance, the accuracy of representations and warranties, and the absence of any material adverse effect. Target distribution: on or immediately prior to the Closing Date.

Participant Review and Execution. Participants will be provided with a brief but reasonable window to review and execute the Retention Bonus Letter. Given the sensitive nature of the transaction and the need to maintain confidentiality, participants will be expected to execute and return their Retention Bonus Letters within a short period (expected to be no more than five (5) business days from the date of distribution). Participants may consult with their personal legal and tax advisors during this review period.

Forfeiture for Non-Execution. Any participant who declines to execute a Retention Bonus Letter or who fails to return an executed copy by the specified deadline will forfeit the participant's allocated retention bonus award in its entirety. The forfeited amount will revert to Cascade and will not be reallocated to other participants.

VII. Interaction with Other Compensation and Employment Arrangements

A. Existing NovaMart Compensation

Retention bonus payments under the Retention Plan are in addition to and do not reduce, modify, or replace any element of the participant's existing compensation under the participant's NovaMart employment arrangement. Specifically, retention bonus payments do not reduce or offset any participant's: (a) annual base salary; (b) annual bonus or incentive compensation (including any FY2025 annual bonus); (c) commissions or other variable compensation; (d) benefits; or (e) any other form of compensation to which the participant is or may become entitled under the participant's employment agreement, offer letter, or NovaMart's compensation policies.

With respect to FY2025 annual bonuses, participants in the Retention Plan remain eligible for their FY2025 annual bonuses (if any) under NovaMart's existing annual bonus plan, prorated through the Closing Date as provided in Section 6.6(b) of the SPA. The retention bonus is not intended to serve as a substitute for or replacement of any prorated annual bonus to which a participant may be entitled.

B. NovaMart Stock Options

Certain eligible participants in the Retention Plan hold vested NovaMart stock options under the NovaMart Global Inc. 2017 Equity Incentive Plan or the NovaMart Global Inc. 2021 Equity Incentive Plan. Pursuant to Section 2.7 of the SPA, all outstanding NovaMart stock options (whether vested or unvested) will be cancelled at the Closing, and each holder of a vested, in-the-money NovaMart stock option will receive a cash payment equal to the excess, if any, of the per-share consideration implied by the $1,200,000,000 aggregate Purchase Price over the exercise price of such option, multiplied by the number of shares subject to such option, less applicable tax withholding.

Retention bonus awards under the Retention Plan are independent of any stock option exercise or cash-out proceeds received by participants at the Closing. The retention bonus does not reduce or offset any option cash-out proceeds, and option cash-out proceeds do not reduce or offset any retention bonus payments. However, as noted in Section V.C above, option cash-out proceeds will be taken into account for purposes of the Section 280G analysis (i.e., they are aggregated with retention bonus payments and other parachute payments to determine whether the participant's aggregate parachute payments exceed the safe harbor threshold).

C. Cascade Equity Awards (Post-Closing)

Following the Closing, participants in the Retention Plan may be eligible for future equity awards under Cascade's existing equity incentive plans, including the Cascade Retail Holdings Inc. 2023 Omnibus Equity Incentive Plan, at Cascade's discretion. Any future Cascade equity awards will be granted on such terms and conditions as Cascade's Board of Directors (or its Compensation Committee) may determine, in accordance with the terms of the applicable equity incentive plan.

Retention bonus awards under the Retention Plan are not credited against or offset by any future Cascade equity grants. The determination of whether and in what amounts to grant Cascade equity awards to former NovaMart employees (including Retention Plan participants) is a separate decision that will be made by Cascade's Compensation Committee as part of the post-closing integration compensation planning process. Retention Plan participation will not create any expectation of or entitlement to future Cascade equity awards.

D. Existing Restrictive Covenants

Participants in the Retention Plan are expected to be bound by existing restrictive covenant agreements with NovaMart, which may include: (a) non-competition agreements; (b) non-solicitation of employee agreements; (c) non-solicitation of customer/seller agreements; (d) confidentiality and non-disclosure agreements; and (e) invention assignment and intellectual property assignment agreements. The enforceability and scope of these existing restrictive covenants have been analyzed in a separate memorandum (the "Restrictive Covenant and Non-Competition Analysis Memorandum"), which addresses state-by-state enforceability, reasonableness of scope and duration, and the impact of applicable state law restrictions on post-employment non-competes (including, without limitation, the requirements of the California Business and Professions Code Section 16600, the Illinois Freedom to Work Act, and similar statutes in other NovaMart nexus states).

The Retention Bonus Letter does not modify any participant's existing restrictive covenant obligations. Each Retention Bonus Letter will, however, include an acknowledgment by the participant that the participant's existing restrictive covenant agreements remain in full force and effect and that the participant's obligations under such agreements are not altered, modified, or released by the execution of the Retention Bonus

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP INTERNAL MEMORANDUM
TO: Elena Vasquez-Bright, General Counsel, Cascade Retail Holdings Inc. Theodore "Ted" Langford, SVP Corporate Development, Cascade Retail Holdings Inc.
FROM: Harrison Wexford, Responsible Partner, Mergers & Acquisitions Derek Okonkwo, Lead Associate, Mergers & Acquisitions Calderwood & Harkness LLP
DATE: May 20, 2025
RE: Key Employee Retention Plan — NovaMart Global Inc. Acquisition — Summary of Terms, Eligibility, Vesting, and Form of Retention Bonus Letter
MATTER: Cascade Retail Holdings Inc. — Acquisition of NovaMart Global Inc.
This memorandum is a privileged and confidential communication prepared by Calderwood & Harkness LLP at the direction of and for the exclusive benefit of Cascade Retail Holdings Inc. It is protected by the attorney-client privilege and the attorney work product doctrine. Any disclosure, distribution, or copying of this memorandum, in whole or in part, to any person or entity other than the intended recipients without the prior written consent of Calderwood & Harkness LLP is strictly prohibited.
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I. Executive Summary
This memorandum summarizes the terms and structure of the key employee retention plan (the "Retention Plan") established by Cascade Retail Holdings Inc. ("Cascade" or "CRH") in connection with its acquisition of one hundred percent (100%) of the outstanding capital stock of NovaMart Global Inc. ("NovaMart") pursuant to that certain Stock Purchase Agreement dated May 20, 2025 (the "SPA"), by and among Cascade, NovaMart, the Selling Stockholders party thereto, and Ridgeline Equity Partners, LP, solely in its capacity as the Stockholder Representative.
The Retention Plan establishes an aggregate retention bonus pool of $18,000,000 (Eighteen Million Dollars), funded entirely by Cascade as a post-closing operating expense. The Retention Plan is designed to incentivize the continued employment of key NovaMart personnel through the post-closing integration period, thereby preserving business continuity, protecting marketplace operations, and facilitating the successful integration of NovaMart's technology platform, logistics infrastructure, and commercial capabilities into Cascade's broader retail ecosystem.
Importantly, the Retention Plan excludes Julian Reeves (Founder & Chief Executive Officer of NovaMart) and Priya Narasimhan (Co-Founder & Chief Technology Officer of NovaMart), each of whom is subject to a separate, individually negotiated post-closing employment agreement with Cascade, as further described in Section II.C below. The Retention Plan is instead targeted at the next tier of critical NovaMart personnel—approximately 35 to 50 senior leaders and key contributors spanning engineering, product, operations, commercial, finance, legal, human resources, and fulfillment center management functions.
The Retention Plan was negotiated as part of the overall transaction between Cascade and the Selling Stockholders, which include:
• Ridgeline Equity Partners, LP — 41.2% of NovaMart outstanding common stock
• Brindoval Ventures Fund III, LP — 22.8% of NovaMart outstanding common stock
• Julian Reeves — 18.5% of NovaMart outstanding common stock
• Priya Narasimhan — 8.3% of NovaMart outstanding common stock
• Other management and employee stockholders — 9.2% of NovaMart outstanding common stock (collectively)
The aggregate purchase price for the acquisition is $1,200,000,000 (One Billion Two Hundred Million Dollars), payable in cash at closing, structured as a stock purchase. The Retention Plan is funded by Cascade as a post-closing expense and is not deducted from the Purchase Price, the escrow deposit, or any other component of the transaction consideration. Retention bonus payments are separate from and in addition to any cash consideration received by participating employees in their capacity as Selling Stockholders under the SPA.
This memorandum is organized as follows: Section II provides background on the transaction and the strategic rationale for the Retention Plan; Section III sets forth the detailed terms of the Retention Plan, including the aggregate pool, vesting schedule, continued employment conditions, forfeiture provisions, and the definition of "Cause"; Section IV addresses eligibility criteria and the participant identification and allocation process; Section V discusses tax and withholding considerations, including compliance with Sections 409A and 280G of the Internal Revenue Code; Section VI describes the form and key terms of the individual Retention Bonus Letters; Section VII addresses the interaction of the Retention Plan with other compensation and employment arrangements; Section VIII covers administrative and operational matters; and Section IX sets forth our conclusions and recommended next steps. Appendix A contains the form of Retention Bonus Letter, and Appendix B provides an illustrative allocation schedule template.
II. Background and Transaction Context
A. Transaction Overview
Cascade Retail Holdings Inc. is a Delaware corporation, publicly traded on the Nasdaq Stock Market under the ticker symbol "CRHI," with its principal executive offices located at 4500 Elliott Avenue West, Suite 3200, Seattle, Washington 98119. Cascade operates a diversified portfolio of retail brands and ecommerce platforms, and the NovaMart acquisition represents a transformative strategic initiative to expand Cascade's presence in the online marketplace and specialty consumer goods segments.
NovaMart Global Inc. is a Delaware corporation, privately held, with its principal executive offices and headquarters located at 1100 Congress Avenue, Suite 800, Austin, Texas 78701. NovaMart operates one of the largest independent online marketplace platforms in the United States, specializing in specialty consumer goods, home décor, artisanal products, and consumer electronics accessories. NovaMart's marketplace platform connects approximately 62,400 active sellers with approximately 9.1 million registered buyers, facilitating transactions across a broad range of product categories.
As of the date of this memorandum, NovaMart has approximately 2,400 employees distributed across its Austin, Texas headquarters and 14 fulfillment centers located in nine states, as follows:
NovaMart's financial performance for fiscal year 2024 is summarized as follows:
Pursuant to the SPA, Cascade is acquiring 100% of the outstanding capital stock of NovaMart for an aggregate purchase price of $1,200,000,000, payable in cash at the closing of the transaction (the "Closing" and the date thereof, the "Closing Date"). The acquisition constitutes a change of control under NovaMart's material contracts, including certain third-party vendor agreements, marketplace platform agreements, and fulfillment services agreements.
The targeted Closing Date is October 15, 2025, with an outside date of December 31, 2025 (the "Outside Date") as specified in Section 9.1(b) of the SPA. The Closing is subject to, among other conditions, the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR Act"). We note that the U.S. Department of Justice issued a Second Request on May 8, 2025, and substantial compliance with the Second Request is expected to be achieved in approximately August 2025, with HSR clearance anticipated in the September to October 2025 timeframe. The parties are actively cooperating with the DOJ review process, and we do not currently anticipate material antitrust impediments to consummation of the transaction.
B. Strategic Rationale for Retention Plan
The retention of key NovaMart talent is critical to the success of the acquisition. The Retention Plan addresses several strategic imperatives that Cascade's management and Board of Directors have identified as essential to the realization of the anticipated value and synergies of the NovaMart transaction:
Business Continuity and Marketplace Operations. NovaMart's marketplace platform is a complex, technology-driven business that relies heavily on the institutional knowledge, relationships, and technical expertise of its senior leadership team and key individual contributors. The uninterrupted operation of NovaMart's marketplace—maintaining seller confidence, buyer engagement, search algorithm optimization, and advertising partner relationships—requires the continued presence and commitment of the employees who have built and operate these systems. Any material disruption to NovaMart's workforce during the post-closing integration period could negatively affect seller retention, buyer satisfaction, and overall marketplace performance, with direct consequences for GMV, revenue, and EBITDA.
Integration of Technology and Platform Infrastructure. A central component of the acquisition thesis is the integration of NovaMart's proprietary marketplace technology platform with Cascade's existing ecommerce infrastructure, including the CascadeDirect.com platform. This integration is a multi-year initiative that will require close collaboration between NovaMart's technology and data science teams and Cascade's internal technology organization. The loss of key engineering and product leaders during the integration period would significantly delay and complicate the technology integration roadmap, potentially eroding the strategic and financial rationale for the transaction.
Logistics Network Integration. NovaMart's proprietary fulfillment and logistics operation, branded as "NovaShip," encompasses 14 fulfillment centers across nine states and represents a significant operational asset. The integration of NovaShip into Cascade's broader logistics network requires the retention of experienced operations leaders who understand the day-to-day functioning of these facilities, existing vendor relationships, and the technology systems that power order routing, inventory management, and last-mile delivery coordination.
Competitive Talent Market. The ecommerce and marketplace technology sectors are characterized by intense competition for experienced engineering, product, data science, and operations talent. NovaMart's employees—particularly its senior technology and commercial leaders—are highly sought after by competitors, including major publicly traded ecommerce and technology companies. The announcement of the acquisition creates heightened retention risk, as employees may perceive uncertainty regarding their roles, compensation, and career prospects in the combined organization. The Retention Plan provides a tangible financial incentive for key employees to remain through the critical integration period, reducing the risk of opportunistic recruiting by competitors.
Complementing Founder Employment Agreements. The Retention Plan is designed to complement the individual post-closing employment agreements that Cascade has negotiated with NovaMart's two founders, Julian Reeves and Priya Narasimhan. While those agreements secure the continued engagement of NovaMart's most senior leaders, the Retention Plan extends comparable retention protections to the next tier of critical personnel—the senior vice presidents, vice presidents, and other key leaders whose collective contributions are essential to the successful operation and integration of the NovaMart business.
C. Excluded Individuals — Separate Employment Agreements
As noted above, the following two individuals are excluded from the Retention Plan and are instead subject to separately negotiated post-closing employment agreements with Cascade:
Julian Reeves (Founder & Chief Executive Officer, NovaMart). Mr. Reeves is party to a separate three-year post-closing employment agreement with Cascade, pursuant to which he will serve as President, NovaMart Division, reporting to Cascade's Chief Executive Officer. The material terms of Mr. Reeves's employment agreement include: (i) an annual base salary of $625,000; (ii) an annual target bonus opportunity equal to 75% of base salary; and (iii) a grant of 150,000 restricted shares of Cascade common stock, vesting ratably over three years from the Closing Date, subject to Mr. Reeves's continued employment. The terms of Mr. Reeves's employment agreement are set forth in Exhibit G-1 to the SPA.
Priya Narasimhan (Co-Founder & Chief Technology Officer, NovaMart). Ms. Narasimhan is party to a separate three-year post-closing employment agreement with Cascade, pursuant to which she will serve as Chief Technology Officer, NovaMart Division, reporting to Mr. Reeves and, on a dotted-line basis, to Cascade's Chief Technology Officer. The material terms of Ms. Narasimhan's employment agreement include: (i) an annual base salary of $575,000; (ii) an annual target bonus opportunity equal to 70% of base salary; and (iii) a grant of 125,000 restricted shares of Cascade common stock, vesting ratably over three years from the Closing Date, subject to Ms. Narasimhan's continued employment. The terms of Ms. Narasimhan's employment agreement are set forth in Exhibit G-2 to the SPA.
Neither Mr. Reeves nor Ms. Narasimhan is eligible to participate in the Retention Plan or to receive any retention bonus payments thereunder. Their post-closing compensation and retention incentives are addressed exclusively through their respective employment agreements.
III. Retention Plan Terms
This Section III sets forth the detailed terms and conditions of the Retention Plan, including the aggregate pool, vesting and payment schedule, continued employment conditions, forfeiture provisions, and the definition of "Cause."
A. Aggregate Pool
The total retention bonus pool under the Retention Plan is $18,000,000 (Eighteen Million Dollars). This pool represents the maximum aggregate amount of retention bonus payments that may be made under the Retention Plan. The pool is allocated among eligible participants through individual retention bonus awards, the specific dollar amounts of which are determined by Cascade in consultation with NovaMart management—specifically, Julian Reeves (CEO) and Douglas "Doug" Whitfield (Chief Financial Officer).
Individual award amounts will vary based on each participant's role, seniority, and strategic importance to the post-closing integration. The allocation methodology is described in greater detail in Section IV.B below. The aggregate of all individual award amounts under the executed Retention Bonus Letters shall not exceed the $18,000,000 pool, and any unallocated portion of the pool (including amounts forfeited by participants who decline to execute a Retention Bonus Letter or whose employment terminates prior to the applicable payment date) shall revert to Cascade and shall not be reallocated to other participants.
B. Vesting Schedule
Each participant's individual retention bonus award is divided into two equal installments, each representing 50% of the participant's total award amount:
1. First Installment (50%)
The first installment represents 50% of each participant's individual retention bonus award, with the aggregate first installment payments totaling $9,000,000 across all participants. Each participant's first installment shall become payable upon the Closing of the transaction. Specifically, payment of the first installment shall be made within ten (10) business days following the Closing Date through NovaMart's regular payroll system or, if the Closing Date and the payroll processing date are such that NovaMart's payroll system has been integrated into or replaced by Cascade's payroll system, through Cascade's regular payroll system. Payment shall be made in cash by direct deposit or company check, consistent with the applicable entity's standard payroll practices.
2. Second Installment (50%)
The second installment represents the remaining 50% of each participant's individual retention bonus award, with the aggregate second installment payments totaling $9,000,000 across all participants. Each participant's second installment shall become payable on the first anniversary of the Closing Date (the "Anniversary Date"). Specifically, payment of the second installment shall be made within ten (10) business days following the Anniversary Date through Cascade's regular payroll system. Payment shall be made in cash by direct deposit or company check, consistent with Cascade's standard payroll practices.
By way of illustration, if a participant is awarded an individual retention bonus of $500,000, the first installment of $250,000 would be payable within ten business days of the Closing Date, and the second installment of $250,000 would be payable within ten business days of the first anniversary of the Closing Date, in each case subject to the continued employment condition described below.
C. Continued Employment Condition
Both installments of each participant's retention bonus award are subject to the participant's continued employment with NovaMart (or, following the Closing, NovaMart's successor entity or any affiliate of Cascade to which the participant's employment is transferred) through the applicable payment date. The continued employment condition is a fundamental requirement of the Retention Plan and is designed to ensure that retention bonus payments serve their intended purpose of incentivizing participants to remain with the organization through the critical post-closing integration period.
First Installment. To be eligible to receive the first installment, a participant must be actively employed by NovaMart (or its successor or any affiliate of Cascade) as of the Closing Date. For purposes of this condition, a participant shall not be considered "actively employed" if, as of the Closing Date, the participant has delivered or received a notice of termination of employment, whether such termination is to be effective on, before, or after the Closing Date. A participant who has been placed on a performance improvement plan but who has not received a notice of termination shall be considered actively employed for purposes of this condition.
Second Installment. To be eligible to receive the second installment, a participant must be actively employed by NovaMart (or its successor or any affiliate of Cascade) as of the Anniversary Date. As with the first installment, a participant shall not be considered "actively employed" if, as of the Anniversary Date, the participant has delivered or received a notice of termination of employment, whether such termination is to be effective on, before, or after the Anniversary Date.
Treatment of Approved Leaves of Absence. Approved leaves of absence—including medical leave (under the Family and Medical Leave Act or applicable state medical leave laws), family leave, military leave (under the Uniformed Services Employment and Reemployment Rights Act), or other leaves approved in writing by the participant's manager and the applicable human resources department—shall not be treated as a termination of employment for purposes of the continued employment condition. However, a participant on an approved leave of absence must return to active employment on or before the applicable payment date (or such later date as may be required by applicable federal, state, or local law, including but not limited to FMLA, USERRA, or applicable state equivalents) in order to receive the applicable installment. Any participant who fails to return from an approved leave of absence by the applicable payment date (or such later date as required by law) shall forfeit the unpaid installment.
D. Forfeiture Provisions
General Forfeiture Rule. If a participant's employment with NovaMart (or its successor or any affiliate of Cascade) terminates for any reason prior to an applicable payment date—whether by voluntary resignation by the participant or termination by the employer—the unpaid installment or installments, as applicable, shall be forfeited in full. The participant shall have no right, claim, or entitlement to any forfeited amounts, and Cascade shall have no obligation to make any payment with respect thereto.
By way of example, if a participant voluntarily resigns after the Closing Date but before the Anniversary Date, the participant would retain the first installment (which was paid at closing) but would forfeit the second installment in its entirety. Similarly, if a participant's employment is terminated for Cause (as defined below) after the Closing Date but before the Anniversary Date, the participant would retain the first installment but would forfeit the second installment.
Exception — Termination Without Cause. Notwithstanding the general forfeiture rule, if a participant's employment is terminated by Cascade, NovaMart (or its successor), or any affiliate of Cascade without "Cause" (as defined in Section III.E below) at any time after the Closing Date but prior to the Anniversary Date, the participant shall be entitled to receive the second installment as though the participant had remained continuously employed through the Anniversary Date. In such event, the second installment shall be paid to the participant within ten (10) business days following the date of such termination without Cause, or within ten (10) business days following the Anniversary Date, whichever is earlier, subject to the participant's execution and non-revocation of a general release of claims in favor of Cascade and its affiliates in a form satisfactory to Cascade. This accelerated vesting provision is intended to protect participants who are involuntarily terminated without fault during the integration period and to ensure that Cascade bears the economic risk of any workforce reductions or organizational changes that result in the termination of participants' employment.
For the avoidance of doubt, this exception does not apply to the first installment. If a participant's employment terminates (whether with or without Cause, or by voluntary resignation) prior to the Closing Date, the participant forfeits both installments in their entirety, and the accelerated vesting exception does not apply.
Exception — Death or Disability. Notwithstanding the general forfeiture rule, if a participant dies or becomes permanently disabled (as reasonably determined by Cascade in accordance with its standard disability determination procedures and applicable law) at any time prior to an applicable payment date, the unpaid installment or installments, as applicable, shall be paid to the participant (or, in the case of death, to the participant's estate or designated beneficiary) within thirty (30) days of the date of such death or disability determination. This provision is intended to ensure that participants and their families are not penalized by circumstances beyond the participant's control.
Reversion of Forfeited Amounts. Any amounts forfeited by a participant under the general forfeiture rule shall revert to Cascade. Forfeited amounts shall not be reallocated to other participants or otherwise redistributed under the Retention Plan. Cascade retains sole and absolute discretion with respect to any forfeited amounts.
E. Definition of "Cause"
For purposes of the Retention Plan and the individual Retention Bonus Letters, "Cause" shall mean:
(i) the participant's material breach of any employment agreement, confidentiality agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, or material company policy, provided that if such breach is capable of cure, the participant shall be provided with written notice specifying the nature of the breach and a reasonable cure period of not less than fifteen (15) days to cure such breach;
(ii) the participant's commission of an act of fraud, embezzlement, misappropriation of funds, or willful misconduct that is materially harmful to the Company (defined as NovaMart, Cascade, or any of their respective affiliates);
(iii) the participant's conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude, dishonesty, or breach of trust; or
(iv) the participant's willful and continued failure to substantially perform the duties of the participant's position (other than any such failure resulting from the participant's disability) after written notice from the Company specifying the nature of such failure and a reasonable cure period of not less than fifteen (15) days from the date of such notice.
The determination of whether "Cause" exists shall be made by Cascade in good faith after consultation with legal counsel. For purposes of clause (iv) above, no act or failure to act on the part of the participant shall be considered "willful" unless it is done, or omitted to be done, by the participant in bad faith or without reasonable belief that the participant's action or omission was in the best interests of the Company.
IV. Eligibility Criteria
A. General Eligibility
Eligible participants in the Retention Plan are key NovaMart employees who have been identified by Cascade management—specifically, Ted Langford, SVP Corporate Development—in consultation with NovaMart's Chief Executive Officer, Julian Reeves, and Chief Financial Officer, Douglas "Doug" Whitfield. As noted above, Julian Reeves and Priya Narasimhan are excluded from the Retention Plan by virtue of their separate post-closing employment agreements with Cascade.
Eligible employees include, but are not limited to, the following categories of NovaMart personnel:
• Senior Vice Presidents and Vice Presidents in engineering, product, operations, and commercial functions, including individuals responsible for NovaMart's core marketplace platform, mobile applications, seller tools, buyer experience, and data analytics capabilities.
• Heads of NovaMart business verticals, including but not limited to the NovaHome home décor vertical, the NovaArtisan artisanal products vertical, and the NovaTech consumer electronics accessories vertical. These individuals manage dedicated seller communities, curated buyer experiences, and vertical-specific merchandising and marketing initiatives.
• Senior technology and data science leaders responsible for NovaMart's proprietary marketplace platform and search algorithms, including the engineering teams that develop and maintain NovaMart's search and recommendation engine, pricing optimization tools, fraud detection systems, and platform infrastructure. The retention of these individuals is particularly critical to the planned integration of NovaMart's technology stack with Cascade's CascadeDirect.com platform.
• NovaShip logistics operations leadership across the 14 fulfillment centers, including regional operations directors, fulfillment center general managers, and transportation and logistics managers. These individuals oversee the day-to-day operations of NovaMart's fulfillment network, manage relationships with third-party carriers, and ensure compliance with safety, quality, and service level standards.
• Key finance, legal, and human resources personnel, including Douglas Whitfield (Chief Financial Officer) and Amanda Trevino (General Counsel). These individuals possess critical institutional knowledge regarding NovaMart's financial operations, contractual relationships, intellectual property portfolio, employment practices, and regulatory compliance posture. Their continued engagement during the integration period is essential for due diligence completion, financial reporting alignment, and seamless transfer of corporate functions.
• Sales and business development leaders managing relationships with NovaMart's approximately 62,400 active sellers and key advertising and platform partners. NovaMart's commercial success depends on the strength of its seller relationships and its partnerships with key vendors, including Stratton Digital Media Inc. (NovaMart's primary digital advertising partner), PayStream Financial Technologies Inc. (NovaMart's payment processing partner), Pinnacle Cloud Solutions Inc. (NovaMart's cloud infrastructure provider), and Redline Freight Corp. (NovaMart's primary third-party logistics partner for last-mile delivery). The retention of the business development and partnership management leaders who maintain these relationships is critical to ensuring continuity of service and avoiding disruption to NovaMart's revenue streams.
B. Identification and Allocation Process
Cascade and NovaMart management will finalize the definitive list of eligible participants and individual award allocations prior to the Closing Date. The identification and allocation process is expected to proceed as follows:
Initial Identification. Cascade management (led by Ted Langford) and NovaMart management (led by Julian Reeves and Doug Whitfield) will collaborate to develop an initial list of proposed participants based on a review of NovaMart's organizational charts, compensation data, performance assessments, and retention risk assessments. This initial list is expected to be developed within 60 days of the date of this memorandum (i.e., by approximately July 20, 2025).
Allocation Recommendations. Following the development of the initial participant list, Cascade and NovaMart management will develop proposed individual award allocations for each participant. Individual allocations will be memorialized in executed Retention Bonus Letters (as described in Section VI below) and will reflect the following guiding principles:
(a) Criticality to Post-Closing Integration and Business Continuity. Participants whose roles are most directly tied to the success of the post-closing integration—including technology integration leads, operations leaders, and key commercial relationship managers—will generally receive larger allocations.
(b) Retention Risk Assessment. Participants who are assessed to have a higher likelihood of departure absent a retention incentive—based on factors such as tenure, compensation relative to market, alternative employment opportunities, and response to change of control events—will generally receive larger allocations.
(c) Scope of Responsibilities and Difficulty of Replacement. Participants who occupy roles that are uniquely important and difficult to replace—either because of specialized technical expertise, deep institutional knowledge, or the breadth of their responsibilities—will generally receive larger allocations.
(d) Geographic Distribution. Allocations will take into account the geographic distribution of NovaMart's operations, ensuring that key leaders at fulfillment centers and regional offices across NovaMart's nine-state footprint are appropriately incentivized to remain through the integration period.
Final Approval. The final participant list and individual allocations are subject to approval by Elena Vasquez-Bright (General Counsel, Cascade) and Ted Langford (SVP Corporate Development, Cascade). The target completion date for final approval of all allocations is approximately 30 days prior to the anticipated Closing Date (i.e., by approximately September 15, 2025, based on a targeted October 15, 2025 closing).
Expected Number of Participants. The number of eligible participants is expected to be approximately 35 to 50 individuals, representing a targeted subset of NovaMart's senior leadership and critical talent across the company's approximately 2,400-person workforce. This participant group represents approximately 1.5% to 2.1% of NovaMart's total employee population but includes the individuals who are most critical to the successful operation, integration, and continued growth of the NovaMart business.
C. Employees Holding NovaMart Equity
Certain eligible participants may also be among the "Other Management and Employee Stockholders" who collectively hold approximately 9.2% of NovaMart's outstanding common stock (including shares issuable upon the exercise of vested stock options). These individuals will receive cash consideration under the SPA in their capacity as Selling Stockholders, in addition to any retention bonus payments under the Retention Plan.
It is important to note that retention bonus awards under the Retention Plan are separate from and in addition to any cash consideration received by such participants as Selling Stockholders under the SPA. The Retention Plan does not reduce, offset, or otherwise affect the transaction consideration to which any participant is entitled as a stockholder of NovaMart. Similarly, the transaction consideration does not reduce, offset, or otherwise affect the retention bonus payments to which a participant is entitled under the Retention Plan.
Participants who are Selling Stockholders remain fully subject to the indemnification and escrow provisions of the SPA with respect to their stockholder consideration. Specifically:
• Escrow. Eight percent (8%) of the aggregate Purchase Price ($96,000,000) shall be deposited into an escrow account at closing, allocated pro rata among the Selling Stockholders based on their respective pro rata share of the Purchase Price. Each participant who is a Selling Stockholder will have a pro rata portion of their stockholder consideration withheld and deposited into the escrow account.
• Indemnification Cap. The aggregate indemnification obligations of the Selling Stockholders under Article VIII of the SPA are subject to a cap of eighteen percent (18%) of the aggregate Purchase Price ($216,000,000).
• Survival Period. The general representations and warranties of NovaMart and the Selling Stockholders under the SPA survive for a period of twenty-four (24) months following the Closing Date, subject to certain exceptions for fundamental representations, tax representations, and fraud, which survive for longer periods as specified in the SPA.
Retention bonus payments under the Retention Plan are not subject to the escrow, indemnification cap, or survival provisions of the SPA, as they are obligations of Cascade (not consideration paid by the Selling Stockholders) and are not contingent upon or related to the representations and warranties of the Selling Stockholders.
V. Tax and Withholding Considerations
A. Tax Treatment
Retention bonus payments under the Retention Plan are treated as supplemental wages for federal income tax purposes within the meaning of Treasury Regulations Section 31.3402(g)-1. As supplemental wages, retention bonus payments are subject to applicable federal, state, and local income tax withholding and employment taxes, including:
• Federal income tax withholding at the applicable supplemental wage rate (currently 22% for supplemental wages up to $1 million in a calendar year and 37% for supplemental wages in excess of $1 million in a calendar year);
• Federal Insurance Contributions Act (FICA) taxes, including the employee's share of Social Security tax (6.2%, subject to the Social Security wage base, which is $176,100 for 2025) and Medicare tax (1.45%, with an additional 0.9% Medicare surtax on wages in excess of $200,000 for single filers or $250,000 for married filing jointly);
• Federal Unemployment Tax Act (FUTA) taxes (employer-side only; not withheld from employee wages); and
• Applicable state and local income tax withholding and employment taxes, based on each participant's state of employment and/or residence.
NovaMart maintains employees in multiple states, and the state income tax implications vary by jurisdiction. The NovaMart nexus states relevant to employee taxation include the following:
Cascade (or NovaMart, as applicable, depending on which entity processes the relevant payroll at the time of payment) will report all retention bonus payments on IRS Form W-2 for the applicable tax year. Participants should be advised to consult with their personal tax advisors regarding the tax consequences of retention bonus payments, including the potential impact on estimated tax payments and year-end tax liability.
B. Section 409A Compliance
The Retention Plan is intended to comply with, or be exempt from, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended ("Section 409A"), and the Treasury Regulations promulgated thereunder. Section 409A imposes strict rules on the timing and form of payments of nonqualified deferred compensation, including penalties of an additional 20% excise tax and interest on the amount of any inclusion in income for failure to comply.
The Retention Plan is structured so that each installment payment qualifies as a short-term deferral within the meaning of Treasury Regulations Section 1.409A-1(b)(4). Under the short-term deferral rule, a payment is not treated as deferred compensation subject to Section 409A if it is made on or before the later of: (i) the 15th day of the third month following the end of the service provider's taxable year in which the right to the payment is no longer subject to a substantial risk of forfeiture; or (ii) the 15th day of the third month following the end of the service recipient's taxable year in which the right to the payment is no longer subject to a substantial risk of forfeiture. Because each installment of the retention bonus is payable within ten business days following the applicable vesting date (the Closing Date for the first installment and the Anniversary Date for the second installment), each installment is expected to fall well within the applicable 2½-month short-term deferral period, and accordingly neither installment should constitute deferred compensation subject to Section 409A.
With respect to the accelerated payment provisions applicable upon termination without Cause, death, or disability (as described in Section III.D above), such accelerated payments are intended to qualify under the permissible payment acceleration rules of Treasury Regulations Section 1.409A-3(j)(4). In particular, the acceleration of the second installment upon a termination without Cause is structured to occur within the same taxable year in which the original vesting date would have occurred, or within the applicable short-term deferral period, so as not to run afoul of Section 409A's restrictions on payment acceleration.
Notwithstanding the foregoing, each Retention Bonus Letter will include a standard Section 409A savings clause, providing that: (a) the Retention Plan and the Retention Bonus Letter are intended to comply with, or be exempt from, Section 409A; (b) the terms of the Retention Bonus Letter shall be interpreted and construed in a manner consistent with such intent; (c) in no event shall Cascade, NovaMart, or any of their affiliates be liable for any additional tax, interest, or penalty imposed under Section 409A; and (d) notwithstanding any provision to the contrary, if a participant is a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) on the date of the participant's "separation from service" within the meaning of Section 409A, any payment that constitutes nonqualified deferred compensation shall be delayed until the date that is six months and one day following the participant's separation from service (or, if earlier, the participant's date of death).
C. Section 280G Analysis
Because NovaMart is a privately held corporation (and not a small business corporation described in Section 1361(b)(1) of the Code), Section 280G of the Internal Revenue Code ("Section 280G") applies to payments made to "disqualified individuals" (generally, officers, highly compensated employees, and significant shareholders) that are contingent upon a change in the ownership or effective control of NovaMart or a change in the ownership of a substantial portion of its assets. Under Section 280G, if the aggregate present value of "parachute payments" to a disqualified individual equals or exceeds three times (3×) the individual's "base amount" (i.e., the individual's average annual compensation from NovaMart for the five taxable years preceding the change of control), the excess over one times (1×) the base amount constitutes an "excess parachute payment." Excess parachute payments result in: (i) the loss of the deduction for the employer under Section 280G; and (ii) the imposition of a 20% nondeductible excise tax on the disqualified individual under Section 4999 of the Internal Revenue Code.
Retention bonus payments under the Retention Plan that are contingent upon or otherwise payable in connection with the closing of the acquisition (a change of control of NovaMart) may constitute parachute payments for purposes of Section 280G. In addition, other payments and benefits to participants that are triggered by or accelerated as a result of the change of control—including the cash-out of vested NovaMart stock options, any severance payments, accelerated vesting of any equity awards, and the value of non-competition agreements—must be aggregated with retention bonus payments for purposes of the Section 280G analysis.
Ongoing Section 280G Analysis. Sylvia Hartwell (Specialist Partner, Tax, Calderwood & Harkness LLP) and Whitmore & Paige LLP (Sandra Chiu) are currently conducting a participant-by-participant Section 280G analysis for each individual expected to be designated as a Retention Plan participant. This analysis will determine, for each disqualified individual, whether the aggregate parachute payments (including the retention bonus, stock option cash-out proceeds, and any other payments contingent on the change of control) exceed the applicable safe harbor threshold (3× the base amount). The analysis requires detailed compensation data for each participant for the five most recent taxable years, which is being compiled by NovaMart's finance team under the direction of Doug Whitfield.
Stockholder Approval Under Section 280G(b)(5)(B). If any participant's aggregate parachute payments would result in an "excess parachute payment" under Section 280G, the SPA contemplates that NovaMart will seek stockholder approval under Section 280G(b)(5)(B) prior to the Closing to exempt such payments from the Section 280G excise tax. Specifically, Section 280G(b)(5)(B) provides that payments to a disqualified individual of a corporation that was not publicly traded immediately before the change of control are not treated as parachute payments if: (a) the payments are approved by a vote of the persons who owned, immediately before the change in ownership or control, more than 75% of the voting power of all outstanding stock of the corporation entitled to vote; and (b) there was adequate disclosure to stockholders of all material facts concerning all payments that would constitute parachute payments (but for the stockholder approval). The stockholder vote package will be prepared and included in the NovaMart Stockholder Written Consent Solicitation Package, which will be circulated to the Selling Stockholders prior to the Closing in accordance with Section 6.12 of the SPA.
No Tax Gross-Up; Best-Net Cutback. Consistent with Cascade's corporate policy and current market practice, the Retention Plan does not provide for a tax gross-up with respect to any excise tax imposed under Section 4999 of the Internal Revenue Code. Instead, each Retention Bonus Letter will include a "best net" cutback provision, pursuant to which a participant's aggregate parachute payments will be reduced to the safe harbor amount (i.e., an amount equal to 2.99 times the participant's base amount) only if the after-tax benefit to the participant of receiving the reduced amount (without the imposition of the Section 4999 excise tax) would be greater than the after-tax benefit to the participant of receiving the full, unreduced amount (after taking into account the 20% excise tax under Section 4999). In other words, the cutback applies only when the participant is better off (on an after-tax basis) receiving the reduced amount. If the participant would be better off receiving the full amount notwithstanding the excise tax, no cutback shall apply, and the participant shall be responsible for any excise tax liability. The "best net" calculation will be performed by Cascade's tax advisors (or such other tax professional as Cascade may designate) and will be binding on the participant, absent manifest error.
VI. Form of Retention Bonus Letter
A. Overview
Each eligible participant will receive an individual Retention Bonus Letter from Cascade Retail Holdings Inc. (or, if the Retention Bonus Letter is distributed prior to the Closing, from NovaMart Global Inc., as applicable) setting forth the specific terms of the participant's retention bonus award under the Retention Plan. The Retention Bonus Letter is a standalone agreement between the issuing entity and the participant and does not constitute an amendment, modification, or supplement to the participant's existing employment agreement, offer letter, or any other employment-related agreement with NovaMart or Cascade.
The execution of the Retention Bonus Letter by the participant is a condition precedent to the participant's receipt of any retention bonus payments. A participant who declines to execute the Retention Bonus Letter, or who fails to return an executed copy by the deadline specified in the letter, will forfeit the participant's allocated retention bonus award in its entirety, and such forfeited amount will revert to Cascade without further obligation.
The form of Retention Bonus Letter is attached hereto as Appendix A. The final form of the Retention Bonus Letter is subject to review and approval by Elena Vasquez-Bright (General Counsel, Cascade) prior to distribution to eligible participants.
B. Key Terms of the Retention Bonus Letter
The Retention Bonus Letter will contain the following material terms and provisions:
Recitals. The Retention Bonus Letter will include introductory recitals referencing: (a) the acquisition of NovaMart by Cascade pursuant to the Stock Purchase Agreement dated May 20, 2025; (b) the purpose of the retention bonus, which is to incentivize the participant's continued employment through the post-closing integration period; and (c) the participant's acknowledgment that the retention bonus is being offered to the participant in consideration of the participant's continued employment and the participant's agreement to the terms and conditions set forth in the letter.
Award Amount. The Retention Bonus Letter will specify the participant's individual retention bonus award amount in dollars, divided into two equal installments: the first installment (equal to 50% of the total award) and the second installment (equal to the remaining 50% of the total award). By way of example, if a participant is awarded a total retention bonus of $600,000, the letter will specify a first installment of $300,000 and a second installment of $300,000.
Payment Dates. The first installment shall be payable within ten (10) business days following the Closing Date. The second installment shall be payable within ten (10) business days following the first anniversary of the Closing Date (the Anniversary Date). The Retention Bonus Letter will include blank fields for the Closing Date and Anniversary Date, which will be completed upon execution or, if the exact Closing Date is not yet known at the time of distribution, will be defined by reference to the Closing Date as defined in the SPA.
Continued Employment Condition. The Retention Bonus Letter will set forth the continued employment condition as described in Section III.C of this memorandum, including the requirements that the participant be actively employed and not have delivered or received a notice of termination as of the applicable payment date, and the treatment of approved leaves of absence.
Forfeiture and Acceleration. The Retention Bonus Letter will set forth the forfeiture provisions and acceleration exceptions as described in Section III.D of this memorandum, including: (a) the general forfeiture rule for terminations of employment prior to an applicable payment date; (b) the acceleration of the second installment upon termination without Cause after the Closing Date; and (c) the payment of unpaid installments upon death or disability. The Retention Bonus Letter will specify that the acceleration of the second installment upon termination without Cause is conditioned upon the participant's execution and non-revocation of a general release of claims.
Definition of Cause. The Retention Bonus Letter will include the definition of "Cause" as set forth in Section III.E of this memorandum.
Withholding. The Retention Bonus Letter will include a clear acknowledgment by the participant that all retention bonus payments are subject to applicable federal, state, and local income tax withholding and employment taxes, and that the net amount received by the participant after withholding may be less than the gross award amount.
Section 409A Compliance. The Retention Bonus Letter will include a standard Section 409A savings clause, as described in Section V.B of this memorandum, including provisions addressing the intent to comply with or be exempt from Section 409A, interpretation consistent with such intent, no liability for Section 409A penalties, and the six-month delay for specified employees, if applicable.
Section 280G Best-Net Cutback. The Retention Bonus Letter will include the "best net" cutback provision as described in Section V.C of this memorandum, providing that aggregate parachute payments will be reduced to the safe harbor amount only if the after-tax benefit to the participant of receiving the reduced amount exceeds the after-tax benefit of receiving the full amount after taking into account the Section 4999 excise tax.
Confidentiality. The Retention Bonus Letter will include a confidentiality provision requiring the participant to keep the existence and terms of the retention bonus confidential and not to disclose such information to any person other than: (a) the participant's spouse or domestic partner; (b) the participant's tax, financial, and legal advisors, provided that such advisors are informed of the confidentiality obligation; and (c) as required by applicable law, regulation, or legal process. The confidentiality provision is intended to prevent the creation of internal morale issues and competitive intelligence risks that could arise from the disclosure of individual retention bonus amounts.
No Employment Guarantee. The Retention Bonus Letter will include a clear statement that the letter does not constitute a guarantee of continued employment, does not create a right to continued employment for any specific period, and does not alter the at-will nature of the participant's employment (to the extent applicable under the law of the participant's state of employment). The participant's employment remains terminable at any time, with or without cause and with or without notice, subject to the terms of any separate employment agreement between the participant and NovaMart or Cascade.
Governing Law. The Retention Bonus Letter will be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law, consistent with the governing law provision of the SPA.
Dispute Resolution. Any dispute arising out of or relating to the Retention Bonus Letter shall be resolved exclusively in the Delaware Court of Chancery (or, if the Court of Chancery declines to accept jurisdiction, any state or federal court located in the State of Delaware), consistent with the dispute resolution provision of the SPA. Each party shall consent to the personal jurisdiction of such courts and waive any objection to venue or inconvenient forum.
Entire Agreement / Integration. The Retention Bonus Letter, together with the participant's existing employment agreement (if any) and any restrictive covenant agreements (including non-competition, non-solicitation, confidentiality, and invention assignment agreements), shall constitute the entire agreement between the parties with respect to the subject matter of the retention bonus. The Retention Bonus Letter supersedes all prior and contemporaneous oral and written communications, representations, and agreements with respect to the retention bonus, but does not supersede or modify the terms of the participant's existing employment agreement or restrictive covenant agreements.
Counterparts and Execution. The Retention Bonus Letter may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. The Retention Bonus Letter may be executed and delivered by electronic signature (including via Brightwater Software, Ashford Health IT, or similar electronic signature platform), which shall be deemed an original signature for all purposes.
C. Execution Timeline
The execution timeline for the Retention Bonus Letters is designed to align with the expected Closing Date and to ensure that all necessary documentation is in place prior to or contemporaneous with the Closing. The anticipated timeline is as follows:
Preparation of Final Form. The final form of the Retention Bonus Letter will be prepared by Calderwood & Harkness LLP and submitted to Elena Vasquez-Bright and Ted Langford for review and approval. Target completion: approximately 45 days prior to the anticipated Closing Date (approximately September 1, 2025, based on a targeted October 15, 2025 closing).
Individualization and Distribution. Following approval of the final form, individual Retention Bonus Letters will be prepared for each eligible participant, populated with the participant's name, title, individual award amount, and other participant-specific information. Distribution of the Retention Bonus Letters to eligible participants is contingent upon the satisfaction or waiver of all conditions precedent to the Closing under Article VII of the SPA, including HSR clearance, the accuracy of representations and warranties, and the absence of any material adverse effect. Target distribution: on or immediately prior to the Closing Date.
Participant Review and Execution. Participants will be provided with a brief but reasonable window to review and execute the Retention Bonus Letter. Given the sensitive nature of the transaction and the need to maintain confidentiality, participants will be expected to execute and return their Retention Bonus Letters within a short period (expected to be no more than five (5) business days from the date of distribution). Participants may consult with their personal legal and tax advisors during this review period.
Forfeiture for Non-Execution. Any participant who declines to execute a Retention Bonus Letter or who fails to return an executed copy by the specified deadline will forfeit the participant's allocated retention bonus award in its entirety. The forfeited amount will revert to Cascade and will not be reallocated to other participants.
VII. Interaction with Other Compensation and Employment Arrangements
A. Existing NovaMart Compensation
Retention bonus payments under the Retention Plan are in addition to and do not reduce, modify, or replace any element of the participant's existing compensation under the participant's NovaMart employment arrangement. Specifically, retention bonus payments do not reduce or offset any participant's: (a) annual base salary; (b) annual bonus or incentive compensation (including any FY2025 annual bonus); (c) commissions or other variable compensation; (d) benefits; or (e) any other form of compensation to which the participant is or may become entitled under the participant's employment agreement, offer letter, or NovaMart's compensation policies.
With respect to FY2025 annual bonuses, participants in the Retention Plan remain eligible for their FY2025 annual bonuses (if any) under NovaMart's existing annual bonus plan, prorated through the Closing Date as provided in Section 6.6(b) of the SPA. The retention bonus is not intended to serve as a substitute for or replacement of any prorated annual bonus to which a participant may be entitled.
B. NovaMart Stock Options
Certain eligible participants in the Retention Plan hold vested NovaMart stock options under the NovaMart Global Inc. 2017 Equity Incentive Plan or the NovaMart Global Inc. 2021 Equity Incentive Plan. Pursuant to Section 2.7 of the SPA, all outstanding NovaMart stock options (whether vested or unvested) will be cancelled at the Closing, and each holder of a vested, in-the-money NovaMart stock option will receive a cash payment equal to the excess, if any, of the per-share consideration implied by the $1,200,000,000 aggregate Purchase Price over the exercise price of such option, multiplied by the number of shares subject to such option, less applicable tax withholding.
Retention bonus awards under the Retention Plan are independent of any stock option exercise or cash-out proceeds received by participants at the Closing. The retention bonus does not reduce or offset any option cash-out proceeds, and option cash-out proceeds do not reduce or offset any retention bonus payments. However, as noted in Section V.C above, option cash-out proceeds will be taken into account for purposes of the Section 280G analysis (i.e., they are aggregated with retention bonus payments and other parachute payments to determine whether the participant's aggregate parachute payments exceed the safe harbor threshold).
C. Cascade Equity Awards (Post-Closing)
Following the Closing, participants in the Retention Plan may be eligible for future equity awards under Cascade's existing equity incentive plans, including the Cascade Retail Holdings Inc. 2023 Omnibus Equity Incentive Plan, at Cascade's discretion. Any future Cascade equity awards will be granted on such terms and conditions as Cascade's Board of Directors (or its Compensation Committee) may determine, in accordance with the terms of the applicable equity incentive plan.
Retention bonus awards under the Retention Plan are not credited against or offset by any future Cascade equity grants. The determination of whether and in what amounts to grant Cascade equity awards to former NovaMart employees (including Retention Plan participants) is a separate decision that will be made by Cascade's Compensation Committee as part of the post-closing integration compensation planning process. Retention Plan participation will not create any expectation of or entitlement to future Cascade equity awards.
D. Existing Restrictive Covenants
Participants in the Retention Plan are expected to be bound by existing restrictive covenant agreements with NovaMart, which may include: (a) non-competition agreements; (b) non-solicitation of employee agreements; (c) non-solicitation of customer/seller agreements; (d) confidentiality and non-disclosure agreements; and (e) invention assignment and intellectual property assignment agreements. The enforceability and scope of these existing restrictive covenants have been analyzed in a separate memorandum (the "Restrictive Covenant and Non-Competition Analysis Memorandum"), which addresses state-by-state enforceability, reasonableness of scope and duration, and the impact of applicable state law restrictions on post-employment non-competes (including, without limitation, the requirements of the California Business and Professions Code Section 16600, the Illinois Freedom to Work Act, and similar statutes in other NovaMart nexus states).
The Retention Bonus Letter does not modify any participant's existing restrictive covenant obligations. Each Retention Bonus Letter will, however, include an acknowledgment by the participant that the participant's existing restrictive covenant agreements remain in full force and effect and that the participant's obligations under such agreements are not altered, modified, or released by the execution of the Retention Bonus

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