Contract analysis

I. Executive Summary The purpose of this memorandum is to update and expand upon the preliminary Section 280G framework memorandum dated June 7, 2024 (prepared by James Underwood, Senior Associate) in light of the specific compensation terms now reflected in Draft 1 of the Executive Employment Agreement circulated by Northgate Telecommunications PLC ("Northgate" or "NTP") on July 22, 2024 (the "Draft 1 Agreement" or

II. Background — Applicable Statutory Framework A. Section 280G Overview Internal Revenue Code ("IRC" or "Code") Section 280G, enacted as part of the Deficit Reduction Act of 1984, disallows a corporate tax deduction for "excess parachute payments" made to certain officers, shareholders, or highly compensated individuals that are contingent on a change in ownership or effective control of a corporation, or a change i

III. Base Amount Calculation A. Data Source and Methodology The base amount for purposes of Section 280G is calculated using Harding's average annualized W-2 compensation for the five most recent taxable years ending before the earliest potential change in control date. Because the timing of any future CIC event is unknown, we have used tax years 2019 through 2023 as the relevant base period. This assumes that any CI

IV. Estimated Parachute Payments Under Draft 1 A. Identification of Payments Contingent on Change in Control To determine whether the safe harbor threshold is exceeded, it is necessary to identify all payments in the nature of compensation to Harding that would be contingent on a qualifying termination following a change in control. Under Treasury Regulation § 1.280G-1, Q&A-22, a payment is treated as contingent on a

1. CIC Cash Severance Under Draft 1, Section 7.3, upon a qualifying termination within 24 months following a change in control, Harding would be entitled to a lump-sum cash severance payment equal to 2.5 times the sum of his annual base salary and his target annual bonus. Based on the compensation terms set forth in Draft 1, Section 3: • Annual base salary: $1,750,000 • Target annual bonus: 175% of base salary = $3,0

2. Equity Acceleration Draft 1, Section 7.4 provides for full acceleration of all unvested equity awards held by Harding upon a qualifying termination following a change in control. This provision applies to all equity awards, including sign-on grants and annual LTI grants, and provides that PSUs accelerate at "target" performance level (i.e., 100% of the target number of shares). The value of accelerated equity is i

3. Benefits Continuation Under Draft 1, Section 7.6, upon a qualifying termination following a change in control, Harding would be entitled to: • COBRA continuation: Northgate would reimburse the cost of COBRA continuation coverage for Harding and his eligible dependents for a period of 24 months following the date of termination. Based on Northgate's current executive benefits plan, the estimated annual cost of COBR

4. Pro-Rata Bonus Draft 1, Section 7.7 provides that, upon a qualifying termination following a change in control, Harding would be entitled to a pro-rata portion of his target annual bonus for the fiscal year in which the termination occurs, calculated based on the number of days elapsed in the fiscal year through the date of termination. The value of the pro-rata bonus depends on the termination date within the fis

5. Total Estimated Parachute Payments — Scenario 1 (Northgate Terms) This total of approximately $34,541,250 exceeds the safe harbor threshold of $23,519,999 by approximately $11,021,251. This means that even under Northgate's own proposed 2.5x multiplier terms, total parachute payments would likely exceed the safe harbor threshold in a Year 1 or Year 2 CIC scenario, making the best-net cutback provision in Draft 1,

1. CIC Cash Severance Under Harding's demanded terms, the CIC cash severance multiplier would increase from 2.5x to 3x: • 3 × (base salary + target bonus) = 3 × ($1,750,000 + $3,062,500) = 3 × $4,812,500 = $14,437,500 This represents an increase of $2,406,250 over the Scenario 1 cash severance amount.

2. Equity Acceleration The equity acceleration methodology under Harding's demanded terms is the same as under Scenario 1, with one significant difference: Harding's position (communicated through H&L) is that all PSUs should accelerate at target performance level (100%) upon a CIC, regardless of actual performance through the CIC date. Draft 1, by contrast, provides for acceleration of PSUs at target, which is consi

3. Benefits Continuation Harding has demanded an extension of the benefits continuation period from 24 months (as proposed in Draft 1) to 36 months: • COBRA continuation for 36 months: approximately $90,000 • Outplacement services: $50,000 • Total estimated benefits continuation under Scenario 2: approximately $140,000

4. Pro-Rata Bonus The pro-rata bonus calculation is unchanged from Scenario 1: estimated $2,000,000 (midpoint assumption).

5. Other Potential Parachute Payments In addition to the core CIC severance components described above, Harding's demanded terms would introduce or enhance several additional payment elements that could constitute parachute payments: (a) Supplemental Executive Retirement Plan ("SERP") Contributions: Draft 1, Section 6.2 provides for employer contributions of $250,000 per year to a non-qualified deferred compensation

6. Total Estimated Parachute Payments — Scenario 2 (Harding Terms) This total of approximately $38,200,000 exceeds the safe harbor threshold of $23,519,999 by approximately $14,680,001 — a substantial margin that eliminates any possibility of avoiding the Section 280G penalties through minor adjustments to payment terms. Under Harding's demanded terms, the Section 280G regime would apply with full force unless a cutb

V. Excise Tax Analysis A. Excess Parachute Payment Calculation (Scenario 2 — Harding Terms) The excess parachute payment is calculated as the total parachute payments minus 1x the base amount. Under Scenario 2: • Total parachute payments: $38,200,000 • Less 1x base amount: ($7,840,000) • Excess parachute payment: $30,360,000 This is the amount subject to the Section 4999 excise tax and for which Northgate Telecommuni

VI. Comparison of Tax Treatment Alternatives This section compares three alternative approaches to addressing the Section 280G exposure: (1) the best-net cutback proposed by Northgate in Draft 1; (2) full payment without a gross-up (and without a cutback), under which Harding would bear the excise tax; and (3) full payment with a full tax gross-up, as demanded by Harding. The analysis focuses on Harding's estimated a

VII. Corporate Governance and Proxy Advisory Considerations A. ISS and Proxy Advisory Sensitivity The Section 280G analysis cannot be evaluated in isolation from the corporate governance implications of the CIC severance provisions. Veltrano Proxy Advisors, Inc. ("Veltrano") (Sandra Kolb, Managing Director), which Northgate has retained as its proxy solicitation and governance advisory firm, has advised the Compensat

VIII. Sensitivity Analysis — Timing of Change in Control The parachute payment calculation is highly sensitive to the timing of a hypothetical CIC event relative to Harding's start date, primarily because the equity acceleration component — which represents the single largest element of the parachute payment calculation — varies directly with the amount of unvested equity outstanding at the time of the CIC. The follo

IX. Impact of Sign-On / Make-Whole Payments Harding is currently employed as Chief Executive Officer of Marlowe Asset Management Digital Holdings, Inc. and would be forfeiting estimated unvested equity of approximately $23,400,000 upon resignation to accept the Northgate CEO position. This forfeited equity consists of unvested RSUs, PSUs, and in-the-money stock options at VDHI with remaining vesting dates extending t

X. Recommendations Based on the foregoing analysis, we offer the following recommendations f