Material Agreement (Form 8-K)

Merger Agreement

On June 16, 2026, Bed Bath & Beyond, Inc., a Delaware corporation (the "Company"), entered into a Merger Agreement and Plan of Reorganization (the "Merger Agreement"), by and among the Company, Fathom Merger Sub, Inc., a North Carolina corporation and wholly owned subsidiary of the Company, and Fathom Holdings Inc., a North Carolina corporation ("FTHM"), pursuant to which, subject to the terms and conditions set forth therein, Merger Sub will merge with and into FTHM (the "Merger"), with FTHM surviving such Merger as a wholly owned subsidiary of the Company. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to such terms in the Merger Agreement.

Merger Consideration

Under the Merger Agreement, at the effective time of the Merger (the "Effective Time"), each share of common stock, no par value, of FTHM (the "FTHM Common Stock") issued and outstanding immediately prior to the Effective Time (other than treasury shares and any shares of FTHM Common Stock held by any FTHM subsidiary or by the Company or Company subsidiary, in each case immediately prior to the Effective Time) will be converted into the right to receive 0.2236 (the "Exchange Ratio") of validly issued, fully paid and non-assessable share of common stock, par value $0.0001 per share, of the Company (the "Company Common Stock") and, if applicable, cash in lieu of fractional shares, subject to any applicable tax withholding. The Exchange Ratio is subject to adjustment pursuant to Section 2.10 of the Merger Agreement, and a sample adjustment calculation of the Exchange Ratio is included as Exhibit A to the Merger Agreement

At the Effective Time, each FTHM option that is outstanding and unexercised immediately prior to the Effective Time, whether or not then vested or exercisable, will automatically terminate and be canceled without payment of any consideration to the holder thereof.

At the Effective Time, each FTHM restricted stock award (each, an "FTHM Restricted Stock Award") that is outstanding as of immediately prior to the Effective Time will be assumed by the Company (each, an "Assumed Restricted Stock Award") and will be converted into an award of restricted stock with respect to shares of Company Common Stock on the same terms and conditions as were applicable to such FTHM Restricted Stock Award immediately prior to the Effective Time (including with respect to vesting), except that each Assumed Restricted Stock Award will relate to the number of shares of Company Common Stock equal to the product of (A) the number of shares of FTHM Common Stock underlying such FTHM Restricted Stock Award immediately prior to the Effective Time, multiplied by (B) the Exchange Ratio, rounded down to the nearest whole share.

At the Effective Time, each award of FTHM restricted stock units ("FTHM RSUs") that is outstanding as of immediately prior to the Effective Time (whether vested or unvested) (i) that is held by any non-employee director of FTHM (the "Cancelled RSUs") will automatically fully vest and be converted into the right to receive, without interest and subject to applicable withholding taxes, shares of Company Common Stock equal to (A) the number of shares of FTHM Common Stock underlying such Cancelled RSUs immediately prior to the Effective Time, multiplied by (B) the Exchange Ratio, plus, if applicable, cash in lieu of fractional shares and (ii) that is not a Cancelled RSU will be assumed by the Company (the "Assumed RSUs") and will be converted into an award of restricted stock units with respect to shares of Company Common Stock on the same terms and conditions as were applicable to such FTHM RSUs immediately prior to the Effective Time (including with respect to vesting), except that each Assumed RSUs will relate to the number of shares of Company Common Stock equal to the product of (i) the number of shares of FTHM Common Stock subject to such FTHM RSUs immediately prior to the Effective Time, multiplied by (ii) the Exchange Ratio, rounded down to the nearest whole share.

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At the Effective Time, each award of FTHM performance stock units ("FTHM PSUs") that is subject to vesting based on the achievement of one or more stock price hurdles that is outstanding as of immediately prior to the Effective Time ("FTHM Stock Price PSUs") (i) that vests upon the occurrence of the Effective Time based on actual performance through the Effective Time will be cancelled and converted into the right to receive, without interest and subject to applicable withholding taxes, shares of Company Common Stock equal to (A) the number of shares of FTHM Common Stock underlying such FTHM PSUs immediately prior to the Effective Time multiplied by (B) the Exchange Ratio, plus, if applicable, cash in lieu of fractional shares in accordance with the Merger Agreement or (ii) that has not vested as of the Effective Time based on actual performance through the Effective Time, will automatically terminate and be canceled without payment of any consideration to the holder thereof.

At the Effective Time, each FTHM PSU other than an award of FTHM Stock Price PSUs, whether vested or unvested, will be assumed by the Company (the "Assumed PSUs") and will be converted into an award of performance-based restricted stock units with respect to shares of Company Common Stock on the same terms and conditions as were applicable to such FTHM PSUs immediately prior to the Effective Time (including with respect to performance-based vesting), except that each award of Assumed PSUs will relate to the number of shares of Company Common Stock equal to the product of (i) the number of shares of FTHM Common Stock subject to such FTHM PSUs immediately prior to the Effective Time, multiplied by (ii) the Exchange Ratio, rounded down to the nearest whole share.

Notwithstanding the foregoing, any Assumed Restricted Stock Award, Assumed RSU or Assumed PSU will become fully vested in the event that the employment of the holder thereof is terminated by the Company, the Surviving Corporation or any of their respective Subsidiaries without Cause during the 12-month period following the Effective Time.

Conditions to the Merger

The obligation of FTHM and the Company to consummate the transactions contemplated by the Merger Agreement is subject to the satisfaction or waiver of a number of customary conditions, including: (i) the approval and adoption of the Merger Agreement by FTHM's stockholders; (ii) the Company's registration statement on Form S-4 to be filed in connection with the Merger having become effective, and the shares of Company Common Stock issuable in the Merger having been approved for listing on the New York Stock Exchange; (iii) in the event the Company is required to repay the senior secured promissory notes issued by FTHM in 2024 to an existing stockholder of FTHM (the "2024 Senior Notes") pursuant to its payoff obligations on the terms and conditions subject to and in accordance with the Merger Agreement, FTHM's delivery of evidence, including any payoff letters or similar customary document, that the 2024 Senior Notes and certain other indebtedness specified in the Merger Agreement will be paid in full at the closing of the Merger by the Company; (iv) the absence of laws or orders restraining the consummation of the Merger; (v) the representations and warranties of FTHM and the Company being true and correct, subject to the materiality standards contained in the Merger Agreement, and FTHM and the Company having complied in all material respects with their respective obligations under the Merger Agreement; and (vi) the absence of any effects that have constituted or resulted in, or would reasonably be expected to constitute or result in, a material adverse effect for FTHM or the Company.

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Representations and Warranties; Covenants

The Merger Agreement contains customary representations and warranties given by FTHM, the Company and Merger Sub. FTHM has also made customary covenants in the Merger Agreement, including covenants relating to conduct of its business prior to the closing of the Merger.

The Merger Agreement also contains covenants by FTHM not to solicit or participate in any discussions or negotiations with any person making an inquiry or proposal for an alternative transaction and requiring FTHM's board of directors to recommend the transaction-related proposals to its stockholders, in each case, subject to certain exceptions. Prior to the approval of the transaction-related proposals by FTHM's stockholders, the board of directors of FTHM may change its recommendation in response to an unsolicited proposal for an alternative transaction, if it determines that the proposal constitutes a Company Superior Proposal and that failure to take such action would reasonably be expected to be inconsistent with its fiduciary duties to its stockholders under applicable law, subject to complying with certain procedures set forth in the Merger Agreement. Prior to the approval of the transaction-related proposals by FTHM's stockholders, FTHM's board of directors may also change their recommendation if a Company Intervening Event occurs, and FTHM's board of directors determines, after consultation with its outside legal counsel and financial advisor, that failing to change its recommendation would be reasonably likely to be inconsistent with its fiduciary duties, subject to complying with certain procedures set forth in the Merger Agreement.

Termination and Termination Fees

The Merger Agreement contains customary mutual termination rights for FTHM and the Company, including if the Merger is not completed by December 16, 2026 (subject to extension under certain circumstances) (the "Outside Date") or if the required approval of FTHM's stockholders to the Merger Agreement is not obtained. The Merger Agreement also contains customary termination rights for the benefit of each party, including (i) by the Company, if the board of directors of FTHM changes its recommendation, (ii) by FTHM, if and only if, prior to the approval of the transaction-related proposals, its board of directors authorizes entry into a definitive agreement relating to a Company Superior Proposal and (iii) by FTHM or the Company, if the other party breaches its representations, warranties or covenants under the Merger Agreement in a way that would result in a failure of its condition to closing being satisfied (subject to certain procedures and cure periods).

Under the Merger Agreement, FTHM will be required to pay a termination fee to the Company equal to $2,000,000 if the Merger Agreement is terminated in certain circumstances, including if the Merger Agreement is terminated because FTHM's board of directors has changed its recommendation. In the event that the required approval of FTHM's stockholders is not obtained, FTHM will reimburse the Company's reasonably documented out-of-pocket fees and expenses incurred in connection with the Merger Agreement and the Merger, and the transactions contemplated thereby, in an amount not to exceed $1,000,000.

Voting & Support Agreement

In connection with the execution of the Merger Agreement, the Company and FTHM entered into voting and support agreements (the "Voting Agreements") with certain stockholders of FTHM. Under the Voting Agreements, the stockholders party thereto have agreed to, among other things, vote or execute consents with respect to all of their shares of Company Common Stock in favor of the adoption of the Merger Agreement and approval of the Merger and against any acquisition proposal, subject to certain terms and conditions contained therein. Each such stockholder has also agreed not to transfer any of its shares of Company Common Stock or any related equity interests of the Company during the term of such Voting Agreement, subject to certain exceptions. The Voting Agreement also restricts each such stockholder and its controlled affiliates from taking any action that the Company or its subsidiaries would be prohibited from taking under the non-solicitation provisions of the Merger Agreement, subject to certain exceptions.

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Additional Information

The foregoing description of the Merger, the Merger Agreement and the Voting Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed hereto as Exhibit 2.1 and incorporated herein by reference, and the Voting Agreement, a form of which is filed hereto as Exhibit 10.1 and incorporated herein by reference.

A copy of the Merger Agreement has been included to provide investors with information regarding its terms and is not intended to provide any factual information about FTHM or the Company. The Merger Agreement contains representations, warranties, covenants and agreements, which were made only for purposes of such agreement and as of specified dates. The representations and warranties in the Merger Agreement reflect negotiations between the parties to the Merger Agreement and are not intended as statements of fact to be relied upon by stockholders, or any individual or other entity other than the parties. In particular, the representations, warranties, covenants and agreements in the Merger Agreement may be subject to limitations agreed by the parties, including having been modified or qualified by certain confidential disclosures that were made between the parties in connection with the negotiation of the Merger Agreement, and having been made for purposes of allocating risk among the parties rather than establishing matters of fact. In addition, the parties may apply standards of materiality in a way that is different from what may be viewed as material by investors. As such, the representations and warranties in the Merger Agreement may not describe the actual state of affairs at the date they were made or at any other time and you should not rely on them as statements of fact. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, and unless required by applicable law, the Company undertakes no obligation to update such information.