Contract analysis

I. Purpose and Executive Summary This memorandum summarizes the remaining unresolved negotiation gaps between Northgate Telecommunications PLC ("NTP" or "Northgate" or the "Company") and Marcus Elliot Harding ("Harding" or the "Executive") in connection with the negotiation of a CEO Employment Agreement (the "Agreement"). The analysis that follows is based on the in-person principals meeting held on Monday, August 26

II. Status of Agreed Terms Before turning to the unresolved gaps, it is useful to confirm the material terms that have been agreed and are no longer in dispute. These terms were largely settled during the July 8, 2024 negotiation call and refined through subsequent exchanges, with certain items confirmed in the term-sheet rounds and carried forward into the draft Agreement without objection. Unless otherwise noted, t

Section 409A Compliance. Both sides have agreed that all provisions of the Agreement will be drafted to comply with Section 409A of the Internal Revenue Code, including separation pay plan exemptions, short-term deferral rules, and specified employee delay provisions where applicable. Agreed. Non-Solicitation of Employees. The concept of an employee non-solicitation covenant has been agreed; however, the duration rem

III. Cluster One — Change in Control Provisions (Section 7 of Draft Agreement) The change in control ("CIC") provisions represent the first of the two principal clusters of unresolved issues. The disagreements in this cluster span five distinct sub-issues, each of which is addressed below. Taken together, these sub-issues represent both the largest aggregate financial exposure and the most significant governance risk

IV. Cluster Two — Restrictive Covenant Provisions (Section 9 of Draft Agreement) The restrictive covenant provisions represent the second principal cluster of unresolved issues. These provisions govern Harding's post-termination obligations regarding non-competition, garden leave, and non-solicitation. The disagreements in this cluster span four sub-issues (a fifth sub-issue — geographic scope — has been resolved). T

V. Summary Table of Remaining Gaps The following table presents a consolidated summary of all unresolved negotiation issues as of August 28, 2024: Aggregate Quantifiable Financial Gap (CIC cluster only, excluding PSU acceleration variable): Approximately $6.6M – $9.2M, consisting of the CIC multiplier delta ($2.4M), gross-up exposure ($4.2M – $6.8M), and benefit continuation ($75K – $120K). Aggregate Quantifiable Fin

VI. Assessment and Observations Based on the August 26 principals meeting and the full course of negotiations to date, I offer the following assessment and observations for your consideration: Interrelation of the Two Clusters. The CIC and restrictive covenant clusters are not independent of one another. Victoria Hargrove has indicated informally — in sidebar conversations following the July 12 and July 19 negotiatio

VII. Recommended Next Steps Based on the foregoing analysis, I recommend the following next steps:

1. Seek Board Authorization for a Final Compromise Proposal. The Remuneration Committee should be convened to authorize a "best and final" offer. The proposal should be developed with a clear understanding of the Board's absolute limits on each issue, so that it can be presented to Harding as a comprehensive package rather than an invitation for further point-by-point negotiation. I would recommend that the proposal

2. Identify Areas of Greatest Flexibility. In formulating the final proposal, the deal team should determine whether any further movement is possible on the garden leave terms or the non-compete activity definition, as these may be the areas of greatest potential flexibility on the Northgate side without triggering governance concerns. Specifically: (a) Garden leave: A compromise at nine (9) months of garden leave at

3. Prepare the Remuneration Committee for a Possible Termination of Negotiations. If Harding does not accept the final proposal, the Board must be prepared to terminate negotiations and move to an alternative candidate. The Remuneration Committee should receive a clear-eyed assessment of the costs and risks of a failed negotiation — including the impact on NTP's CEO search timeline, market perception, and the Company

4. Coordinate on Contingency Planning. In parallel with the final proposal, the deal team should coordinate with Elaine Whitford and Priya Narayanan (SVP, Human Resources) on contingency planning. This should include re-engagement with Kensington Partners, the executive search firm retained by NTP, and specifically with Antonia Blythe (Managing Director), to evaluate alternative CEO candidates and interim CEO arrange

5. Drafting of Final Proposal. I remain available to prepare drafting of the final compromise proposal, including a revised term sheet and corresponding redline of the draft Agreement, upon receipt of Board direction. Given the narrow window of opportunity, I would recommend targeting circulation of the final proposal no later than September 6, 2024, to allow adequate time for Harding's review before the anticipated

VIII. Distribution and Privilege This memorandum is privileged attorney work product prepared in connection with the legal representation of Northgate Telecommunications PLC and its affiliates under Calderwood & Harkness LLP engagement 1022-00004. It reflects the mental impressions, conclusions, opinions, and legal theories of counsel and is protected by the attorney-client privilege, the work product doctrine, and a

Section 280G Tax Treatment | Best-net cutback (no gross-up) | Full excise tax gross-up | $4.2M – $6.8M potential exposure to NTP CIC PSU Acceleration | Pro-rata based on actual performance (or target if <50% of period elapsed) | At target regardless of elapsed period or actual performance | Variable — potentially several million dollars depending on performance at time of CIC CIC Benefit Continuation | 24 months COBR