Contract analysis

I. Purpose and Scope This memorandum analyzes the implications of the United Kingdom Corporate Governance Code 2024 (the "Code"), as issued by the Financial Reporting Council (the "FRC"), and related proxy advisory guidelines for the proposed CEO employment agreement between Northgate Telecommunications PLC ("NTP" or "Northgate") and Marcus Elliot Harding ("Harding"). The memorandum is intended to inform the ongoing

II. Overview of the UK Corporate Governance Code 2024 — Remuneration Provisions A. Principles and Philosophy The Code establishes a comprehensive framework of principles governing executive remuneration for UK-listed companies. The 2024 edition, which applies to financial years beginning on or after January 1, 2025 (with early adoption encouraged), consolidates and refines the remuneration principles set forth in pri

III. Severance Multiples — UK Market Practice for Listed Companies A. Market Norms UK market practice for FTSE 100 and FTSE 250 companies reflects a consistent and well-established norm: severance payments on termination without cause (or constructive termination for Good Reason) are typically limited to one year's base salary plus a pro-rata annual bonus for the year of termination, consistent with the one-year noti

IV. ISS and Tarrant Partners LLC Policies on CIC Severance and Tax Gross-Ups A. ISS Proxy Advisory Policies (2024) ISS's 2024 Benchmark Policy Guidelines address CIC severance arrangements in the context of both US-listed and non-US-listed companies. For US-listed companies, ISS's quantitative pay-for-performance framework generally flags CIC severance exceeding 3x base salary plus target bonus as a significant conce

V. NTP's Say-on-Pay History and Shareholder Context A. 2024 AGM Results At NTP's 2024 Annual General Meeting, held on April 18, 2024, at the Harborline Enterprises London Bankside, the advisory resolution on the directors' remuneration report for the fiscal year ended December 31, 2023 received the support of 87.4% of votes cast (approximately 421.6 million shares voting in favor, 60.8 million shares voting against,

VI. Change in Control Definition — Board Turnover Trigger A. Harding's Demand In addition to his demands regarding the CIC severance multiplier and the tax gross-up, Harding has demanded the inclusion of a "Board turnover trigger" in the definition of "Change in Control" in the employment agreement. Specifically, Harding proposes that a Change in Control be deemed to have occurred if, within any 12-month period, a ma

VII. Garden Leave and Restrictive Covenant Interaction with Code A. Garden Leave Under UK Practice UK employment practice commonly uses garden leave — a period during which the employee remains employed and continues to receive salary and contractual benefits but is relieved of all duties and excluded from the workplace — as a mechanism for enforcing post-termination restrictions. During garden leave, the employee re

VIII. Whitmore Hobson LLP Benchmarking Context Whitmore Hobson LLP ("Whitmore Hobson"), under the leadership of Dr. Rachel Whitmore, Managing Partner, serves as the independent compensation consultant to NTP's Remuneration Committee. Whitmore Hobson has been engaged under a standing retainer since 2021 and provides benchmarking analysis, market data, and advisory services on all aspects of executive remuneration for

IX. Summary of Recommendations Based on the foregoing analysis, Calderwood & Harkness makes the following recommendations to the engagement team and to the Remuneration Committee:

1. CIC Multiplier. We recommend that NTP hold at a 2.5x multiple of base salary plus target annual bonus, producing a CIC cash severance payment of $12,031,250. A 3x multiple ($14,437,500), as demanded by Harding, is very likely to attract negative proxy advisory recommendations from both ISS and Tarrant Partners LLC and to generate significant shareholder opposition, particularly in light of the existing 87.4% say-o

2. Tax Gross-Up. We strongly recommend the adoption of a best-net cutback approach rather than a full Section 280G excise tax gross-up. Both ISS and Tarrant Partners LLC view excise tax gross-ups as "problematic" pay practices, and the inclusion of a gross-up in a new or materially amended employment agreement is a factor that weighs against a positive say-on-pay recommendation. The Whitmore Hobson analysis demonstra