Exhibit 10.12
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (“Agreement”) is made by and between Factorial Inc. (the “Company”) and Joseph Taylor (the “Executive” and, together with the Company, the “Parties”), and shall be effective, subject to, and as of, the consummation of the transactions contemplated by the Business Combination Agreement, dated as of December 17, 2025, by and among Cartesian Growth Corporation III, Fenway MS, Inc. and the Company (the “Effective Date”).
WHEREAS, the Company desires to continue employing the Executive and the Executive desires to continue to be employed by the Company on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
1. Employment.
(a) Term. The Company shall employ the Executive and the Executive shall be employed by the Company pursuant to this Agreement commencing as of the Effective Date and continuing until such employment is terminated in accordance with the provisions hereof (the “Term”). The Executive’s employment with the Company shall be “at will,” meaning that the Executive’s employment may be terminated by the Company or the Executive at any time and for any reason subject to the terms of this Agreement.
(b) Position and Duties. During the Term, the Executive shall serve as the Executive Chairman of the Company and report directly to the Company’s Board of Directors (the “Board”). The Executive shall have such powers and duties as may from time to time be prescribed. The Executive shall devote the full working time and efforts necessary in order to perform the Executive’s duties hereunder, initially including, without limitation, serving as a non-independent member of the Board, overseeing the activities of the Board, advising the Company on day-to-day operations and strategic direction, liaising between the Board and the Company’s Chief Executive Officer, providing guidance on key customer and stakeholder relationships, and ensuring effective governance and investor relations. Notwithstanding the foregoing, the Executive may engage in other professional activities and serve on other boards of directors that do not interfere or conflict with the Executive’s duties to the Company, in each case, with prior written approval of the Board, and/or engage in religious, charitable or other community activities as long as such services and activities do not interfere or conflict with the Executive’s performance of the Executive’s duties to the Company.
(c) Work Location. The Executive’s primary work location will be the Company’s headquarters, currently located in Billerica, MA. Additional travel to other locations may be required from time to time, consistent with business needs.
2. Compensation and Related Matters.
(a) Base Salary. As of the Effective Date, the Executive’s base salary shall be paid at the rate of $360,000 per year, less applicable deductions and withholdings. The Executive’s base salary shall be subject to periodic review by the Board or the Compensation Committee of the Board (the “Compensation Committee”). The Executive’s annual base salary in effect at any given time is referred to herein as “Base Salary.” The Base Salary shall be payable in a manner that is consistent with the Company’s usual payroll practices for its executive officers.
(b) Expenses. The Executive shall be entitled to receive reimbursement for all reasonable expenses incurred by the Executive during the Term in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company.
(c) Other Benefits. The Executive shall be eligible to participate in or receive benefits under the Company’s U.S. employee benefit plans in effect from time to time, subject to the terms of such plans.
(d) Paid Time Off. The Executive shall be entitled to take paid time off in accordance with the Company’s applicable paid time off policy, as may be in effect from time to time.
(e) Long-Term Incentive Plans. The Executive shall be eligible to participate in and receive awards under the Company's long-term incentive plans as approved by the Board, the Compensation Committee of the Board or its delegate, subject to the terms and conditions of the applicable plan(s) and/or award agreement(s) governing such awards (together, the “Equity Documents”). The Executive's initial target long-term incentive award (the “LTIP Award”) shall have a grant date value of approximately $540,000, as determined in accordance with the Company’s equity valuation practices and subject to the approval of the Board, the Compensation Committee of the Board or its delegate. The LTIP Award shall be subject to the vesting terms and conditions set forth in the Equity Documents, which shall provide, among other things, that the portion of the LTIP Award subject to time-based vesting shall not begin vesting until the first anniversary of the applicable grant date, subject to the Executive’s continued employment with the Company through such date. Notwithstanding the foregoing, except as otherwise provided in Section 5(a) below, in the event of any conflict between the terms of this Agreement and the terms of the Equity Documents, the terms of the Equity Documents shall control.
3. Termination. The Executive’s employment hereunder may be terminated without any breach of this Agreement under the following circumstances:
(a) Death. The Executive’s employment hereunder shall terminate upon death.
(b) Disability. The Company may terminate the Executive’s employment if the Executive is disabled and unable to perform or expected to be unable to perform the essential functions of the Executive’s then existing position or positions under this Agreement with or without reasonable accommodation for a period of 180 days (which need not be consecutive) in any 12-month period. If any question shall arise as to whether during any period the Executive is disabled so as to be unable to perform the essential functions of the Executive’s then existing position or positions with or without reasonable accommodation, the Executive may, and at the request of the Company shall, submit to the Company a certification in reasonable detail by a physician selected by the Company to whom the Executive or the Executive’s guardian has no reasonable objection as to whether the Executive is so disabled or how long such disability is expected to continue, and such certification shall for the purposes of this Agreement be conclusive of the issue. The Executive shall cooperate with any reasonable request of the physician in connection with such certification. If such question shall arise and the Executive shall fail to submit such certification, the Company’s determination of such issue shall be binding on the Executive. Nothing in this Section 3(b) shall be construed to waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq., and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.
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(c) Termination by the Company for Cause. The Company may terminate the Executive’s employment hereunder for Cause (as defined below).
(d) Termination by the Company without Cause. The Company may terminate the Executive’s employment hereunder at any time without Cause. Any termination by the Company of the Executive’s employment under this Agreement which does not constitute a termination for Cause under Section 3(c) and does not result from the death or disability of the Executive under Section 3(a) or (b) shall be deemed a termination without Cause.
(e) Termination by the Executive. The Executive may terminate employment hereunder at any time for any reason, including but not limited to, Good Reason (as defined below).
4. Matters Related to Termination.
(a) Notice of Termination. Except for termination as specified in Section 3(a), any termination of the Executive’s employment by the Company or any such termination by the Executive shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.
(b) Date of Termination. “Date of Termination” shall mean: (i) if the Executive’s employment is terminated by death, the date of death; (ii) if the Executive’s employment is terminated on account of disability under Section 3(b) or by the Company for Cause under Section 3(c), the date on which Notice of Termination is given; (iii) if the Executive’s employment is terminated by the Company without Cause under Section 3(d), the date on which a Notice of Termination is given or the date otherwise specified by the Company in the Notice of Termination; (iv) if the Executive’s employment is terminated by the Executive under Section 3(e) other than for Good Reason, 30 days after the date on which a Notice of Termination is given, and (v) if the Executive’s employment is terminated by the Executive under Section 3(e) for Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period (as defined in Section 5). Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination, and such acceleration shall not result in a termination by the Company for purposes of this Agreement.
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(c) Accrued Obligations. If the Executive’s employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to the Executive’s authorized representative or estate) (i) any Base Salary earned through the Date of Termination; (ii) unpaid expense reimbursements (subject to, and in accordance with, Section 2(b) of this Agreement); and (iii) any vested benefits the Executive may have under any employee benefit plan of the Company through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans (collectively, the “Accrued Obligations”).
(d) Resignation of All Other Positions. To the extent applicable, the Executive shall be deemed to have resigned from all officer and board member positions that the Executive holds with the Company or any of its respective subsidiaries and affiliates upon the termination of the Executive’s employment for any reason. The Executive shall execute any documents in reasonable form as may be requested to confirm or effectuate any such resignations.
5. Severance Benefits. If the Executive experiences a Qualifying Termination during the Change in Control Period (each as defined below), then, in addition to the Accrued Obligations, and subject to (i) the Executive signing a separation agreement and release in a form and manner satisfactory to the Company, which shall include, without limitation, a general release of claims against the Company and all related persons and entities, a reaffirmation of all of the Executive’s Continuing Obligations (as defined below), and confidentiality, return of property and non-disparagement provisions (the “Separation Agreement and Release”), and (ii) the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement and Release):
(a) Notwithstanding anything to the contrary in the Equity Documents or any other applicable award agreement, all restricted stock units granted to the Executive as consideration for the Executive’s public Executive Chairman services, including, without limitation, the LTIP Award (collectively, the “Chairman RSU Awards”), shall immediately accelerate and become fully vested and nonforfeitable as of the later of (1) the Accelerated Vesting Date (as defined below) or (2) the date of the Change in Control; provided that, in order to effectuate the accelerated vesting contemplated by this Section 5, the unvested portion of the Executive’s Chairman RSU Awards that would otherwise terminate or be forfeited on the Date of Termination will be delayed until the earlier of (x) the effective date of the Separation Agreement and Release or the date of the Change in Control, as applicable (at which time acceleration will occur), or (y) the date that the Separation Agreement and Release can no longer become fully effective (at which time the unvested portion of the Executive’s Chairman RSU Awards will terminate or be forfeited). For the avoidance of doubt, upon a Qualifying Termination prior to the consummation of a Change in Control, all Chairman RSU Awards held by the Executive as of the Date of Termination will remain outstanding for a period of three (3) months thereafter (unless such Chairman RSU Awards are forfeited prior to such date pursuant to clause (y) of the preceding sentence) and remain eligible to become vested upon the consummation of such Change in Control and, to the extent such Chairman RSU Awards do not become vested in accordance with the terms set forth in this Section 5 on or prior to the date that is three (3) months following the Date of Termination, all then-unvested Chairman RSU Awards held by the Executive will automatically and without further action be canceled and forfeited on the three-month anniversary of the Date of Termination. Notwithstanding the foregoing, no additional vesting of the Chairman RSU Awards shall occur during the period between the Date of Termination and the Accelerated Vesting Date or the date of the Change in Control, as applicable. “Accelerated Vesting Date” means the later of (i) the Executive’s Date of Termination or (ii) the effective date of the Executive’s Separation Agreement and Release.
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(b) For purposes of this Agreement, the following definitions shall apply:
(i) “Affiliate” means any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 of the Securities Act of 1933, as amended.
(ii) “Cause” means (i) the Executive's continued, willful failure to substantially perform the Executive's duties and responsibilities (other than due to physical or mental impairment) or to comply with Company policies, rules or instructions, in each case as determined by the Board in its sole discretion; (ii) the Executive's misappropriation of funds or property of the Company or its Affiliates; (iii) the Executive's willful failure to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company has requested the Executive's cooperation; (iv) in the course of the Executive's responsibilities for the Company, the Executive's engagement in material dishonesty, gross negligence or willful misconduct; (v) the commission by the Executive of acts satisfying the elements of, the Executive's conviction for, or the entry of a plea of guilty or nolo contendere by the Executive to any felony or a misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (vi) the Executive's material violation of any of the Company's or its Affiliates' written employment policies; (vii) the Executive's breach of any material provision of this Agreement, the Restrictive Covenants Agreement, or any other agreement between the Executive and the Company or any of its Affiliates; or (viii) any misconduct by the Executive, regardless of whether or not in the course of the Executive's employment, that would reasonably be expected to result in material injury or reputational harm to the Company or any of its Affiliates if the Executive were to continue to be employed in the same position. In the event of any action or omission alleged to constitute Cause under clauses (i) or (vi), the Company shall provide the Executive with written notice detailing the alleged circumstances and a period of 30 days to cure the alleged circumstances constituting Cause (if capable of cure).
(iii) “Change in Control” means a Sale Event, as defined in the Company’s 2026 Equity Incentive Plan, as amended from time to time.
(iv) “Change in Control Period” means the period beginning three (3) months prior to a Change in Control and ending on the one-year anniversary of the Change in Control.
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(v) “Good Reason” means that the Executive has completed all steps of the Good Reason Process following the occurrence of any of the following events without the Executive's consent (each, a “Good Reason Condition”): (i) a material diminution in the Executive's base salary, except for salary reductions based on the Company's financial performance similarly affecting all senior management employees of the Company; (ii) a material change in the geographic location at which the Executive is required to regularly provide services to the Company (which shall mean more than 50 miles from the Executive's principal residence as of such change and more than 50 miles from the geographic location at which the Executive was previously required to regularly perform services to the Company and which shall not include business travel reasonably required by the Company); or (iii) a material breach of this Agreement by the Company.
(vi) “Good Reason Process” consists of the following steps: (i) the Executive reasonably determines in good faith that a Good Reason Condition has occurred; (ii) the Executive notifies the Company in writing of the first occurrence of the Good Reason Condition within 60 days of the first occurrence of such condition; (iii) the Executive cooperates in good faith with the Company's efforts, for a period of not less than 30 days following such notice (the “Cure Period”), to remedy the Good Reason Condition; (iv) notwithstanding such efforts, the Good Reason Condition continues to exist at the end of the Cure Period; and (v) the Executive terminates employment within 60 days after the end of the Cure Period. If the Company cures the Good Reason Condition during the Cure Period, Good Reason shall be deemed not to have occurred.
(vii) “Qualifying Termination” means (i) a termination of the Executive's employment by the Company other than for Cause, death or Disability (as defined in Section 3(b)) or (ii) the Executive's resignation from the Company for Good Reason.
6. Restrictions and Continuing Obligations.
(a) Restrictive Covenants Agreement; Continuing Obligations. In consideration of and as a condition of, among other things, continued employment with the Company under this Agreement and receipt of the LTIP Award, the Executive shall be required to enter into the Company’s standard form of Employee Confidentiality, Assignment, and Restrictive Covenants Agreement attached hereto as Exhibit A (the “Restrictive Covenants Agreement”). For purposes of this Agreement, the obligations in this Section 6 and those that arise in the Restrictive Covenants Agreement and any other agreement relating to confidentiality, assignment of inventions, or other restrictive covenants shall collectively be referred to as the “Continuing Obligations.” For the avoidance of doubt, all restrictive covenants obligations are supplemental to one another, and in the event of any conflict between restrictive covenants obligations, the most restrictive provision that is enforceable shall govern.
(b) Third-Party Agreements and Rights. The Executive hereby confirms that the Executive is not bound by the terms of any agreement with any previous employer or other party which restricts in any way the Executive’s use or disclosure of information, other than confidentiality restrictions (if any), or the Executive’s engagement in any business. The Executive represents to the Company that the Executive’s execution of this Agreement, the Executive’s employment with the Company and the performance of the Executive’s duties for the Company have not and will not violate any obligations the Executive may have to any such previous employer or other party. In the Executive’s work for the Company, the Executive will not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and the Executive will not bring to the premises of the Company any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.
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(c) Litigation and Regulatory Cooperation. During and after the Executive’s employment, the Executive shall cooperate fully with the Company in (i) the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Executive was employed by the Company and (ii) the investigation, whether internal or external, of any matters about which the Company believes the Executive may have knowledge or information. The Executive’s full cooperation in connection with such claims, actions or investigations shall include, but not be limited to, being available to meet with counsel to answer questions or to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after the Executive’s employment, the Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company. The Company shall reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this Section 6(c). The Company also shall compensate the Executive at a reasonable hourly rate for the Executive’s performance of obligations pursuant to this Section 6(c).
(d) Relief. The Executive agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by the Executive of the Continuing Obligations, and that in any event money damages would be an inadequate remedy for any such breach. Accordingly**,** the Executive agrees that if the Executive breaches, or proposes to breach, any portion of the Continuing Obligations, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company.
7. Consent to Jurisdiction. The Parties hereby consent to the jurisdiction of the state and federal courts of the Commonwealth of Massachusetts. Accordingly, with respect to any such court action, each Party (a) submits to the exclusive personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.
8. Waiver of Jury Trial. Each of the Executive and the Company irrevocably and unconditionally waives all right to trial by jury in any Proceeding (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or THE EXECUTIVE’s employment by the Company or any affiliate of the Company, INCLUDING WITHOUT LIMITATION THE EXECUTIVE’S or the Company’s performance under, or the enforcement of, this Agreement.
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9. Integration. This Agreement, together with the Restrictive Covenants Agreement, the Continuing Obligations, and the Equity Documents, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements between the Parties concerning such subject matter.
10. Withholding; Tax Effect. All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law. Nothing in this Agreement shall be construed to require the Company to make any payments to compensate the Executive for any adverse tax effect associated with any payments or benefits or for any deduction or withholding from any payment or benefit.
11. Assignment; Successors and Assigns. Neither the Executive nor the Company may make any assignment of this Agreement or any interest in it, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under this Agreement (including the Restrictive Covenants Agreement) without the Executive’s consent to any affiliate or to any person or entity with whom the Company shall hereafter effect a reorganization or consolidation, into which the Company merges or to whom it transfers all or substantially all of its properties or assets. This Agreement shall inure to the benefit of and be binding upon the Executive and the Company, and each of the Executive’s and the Company’s respective successors, executors, administrators, heirs and permitted assigns. In the event of the Executive’s death after the Executive’s termination of employment but prior to the completion by the Company of all payments due to the Executive under this Agreement, the Company shall continue such payments to the Executive’s beneficiary designated in writing to the Company prior to the Executive’s death (or to the Executive’s estate, if the Executive fails to make such designation).
12. Enforceability. If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
13. Survival. The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of the Executive’s employment to the extent necessary to effectuate the terms contained herein.
14. Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
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15. Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company or, in the case of the Company, at its main offices, attention of the Chief Executive Officer (“CEO”). Notices, requests, demands and other communications provided for by this Agreement shall also be sufficient if sent by email to the Company email address of the Executive or, in the case of Company, the Company email address of the CEO, with confirmation of receipt.
16. Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.
17. Effect on Other Plans and Agreements. An election by the Executive to resign for Good Reason under the provisions of this Agreement shall not be deemed a voluntary termination of employment by the Executive for the purpose of interpreting the provisions of any of the Company's benefit plans, programs or policies. Nothing in this Agreement shall be construed to limit the rights of the Executive under the Company’s benefit plans, programs or policies. In the event that the Executive is party to an agreement with the Company providing for payments or benefits under such plan or agreement and under this Agreement, the terms of this Agreement shall govern and the Executive may receive payment under this Agreement only and not both.
18. Governing Law. This is a Massachusetts contract and shall be construed under and be governed in all respects by the laws of the Commonwealth of Massachusetts without giving effect to the conflict of laws principles thereof. With respect to any disputes concerning federal law, such disputes shall be determined in accordance with the law as it would be interpreted and applied by the United States Court of Appeals for the First Circuit.
19. Clawback Acknowledgement. The Executive acknowledges that the Executive is or may be subject to any policy established by the Company as of the Effective Date, or as later adopted by the Company, providing for clawback or recovery of amounts that were paid to the Executive (each, a “Clawback Policy”). Any determination for clawback or recovery shall be made in the Company’s sole discretion in accordance with the terms of the applicable Clawback Policy and applicable law or regulation. Any action by the Company to recover compensation from the Executive in accordance with the applicable Clawback Policy from the Executive shall not, whether alone or in combination with any other action, event or condition, be deemed (i) a Good Reason Condition or serve as a basis for a claim of constructive termination under any benefits or compensation arrangement applicable to the Executive, or (ii) to constitute a breach of a contract or other arrangement to which the Executive is a party. This Section 19 is a material term of this Agreement.
20. Conditions. Notwithstanding anything to the contrary herein, the effectiveness of this Agreement shall be conditioned on (i) the Executive’s satisfactory completion of reference and background checks, if so requested by the Company, and (ii) the Executive’s submission of satisfactory proof of the Executive’s legal authorization to work in the United States.
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21. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.
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IN WITNESS WHEREOF, the Parties have executed this Agreement effective on the Effective Date.
FACTORIAL INC.
By:
/s/ Siyu Huang
Name:
Siyu Huang
Its:
Chief Executive Officer
EXECUTIVE
/s/ Joseph M. Taylor
Joseph M. Taylor
[Signature Page to the Executive Employment Agreement]
Exhibit A
Restrictive Covenants Agreement