Contract analysis

From: Renata Vasquez <rvasquez@calderwoodharkness.com> To: Victoria Hargrove <vhargrove@hargroveliddell.com> Cc: James Underwood <junderwood@calderwoodharkness.com> Date: Mon, 10 Jun 2024 04:17:00 -0000 Subject: Northgate Telecommunications PLC — Proposed CEO Employment Agreement for Marcus Elliot Harding — Initial Term Sheet

Thank you for the productive introductory call last week. As you know, our firm represents Northgate Telecommunications PLC ("Northgate") in connection with the proposed executive employment of Marcus Elliot Harding as Chief Executive Officer. I am writing to transmit the enclosed initial term sheet, which sets forth the proposed terms for Mr. Harding's CEO employment agreement. We view this as a starting point for w

The enclosed term sheet has been prepared on behalf of Northgate and reflects the framework approved by the Remuneration Committee of the Board of Directors of Northgate Telecommunications PLC, chaired by Geoffrey Stanton, Lead Independent Director. The proposed terms have been developed with the benefit of an independent benchmarking analysis conducted by the Remuneration Committee's compensation consultant and take

For ease of reference, I wanted to provide a brief summary of the principal economic terms as a roadmap for your review:

- **Base Salary:** $1,750,000 per annum. - **Target Annual Incentive:** 175% of base salary ($3,062,500). - **Maximum Annual Incentive:** 300% of base salary ($5,250,000). - **Sign-On Cash Bonus (Make-Whole):** $5,000,000, subject to a 24-month clawback in the event of voluntary resignation. - **Sign-On Equity Grant (Make-Whole for Forfeited Marlowe Asset Management Digital Holdings Equity):** $18,400,000 in aggregat

The term sheet also addresses severance protections in both non-change-in-control and change-in-control contexts. In the event of a termination without cause or resignation for good reason outside of a change in control, the proposed severance multiple is 2x the sum of base salary and target annual incentive. In a change-in-control scenario, the severance multiple increases to 2.5x the sum of base salary and target a

With respect to restrictive covenants, the term sheet includes a 24-month post-termination non-competition provision of worldwide scope, with an activity-based restriction relating to the telecommunications, telecommunications infrastructure, and enterprise SaaS sectors. It also includes a 24-month non-solicitation provision covering both employees and customers, as well as a six-month paid garden leave period at bas

I wanted to flag the proposed dual-contract architecture. The primary employment agreement would be with Northgate Telecommunications US, Inc. and would be governed by New York law. A secondary UK service agreement with Northgate Telecommunications PLC would address Mr. Harding's UK board duties and regulatory compliance obligations, including the requirements of the FCA's Senior Managers and Certification Regime (SM

On the benefits and perquisites side, the term sheet provides for participation in Northgate's 401(k) plan with a 6% employer match, a supplemental executive retirement plan ("SERP") contribution of $250,000 per year, enrollment in Northgate's executive health program, a car allowance of $25,000 per year, $2,000,000 in supplemental life insurance, and reimbursement for financial and tax planning services of up to $35

We hope that this proposal provides a strong foundation for productive discussions. We would welcome the opportunity for Hargrove & Liddell to review the term sheet with Mr. Harding and to provide us with any comments or a markup at your convenience. Once you and your client have had the opportunity to review the enclosed materials, we would suggest scheduling a call among counsel to discuss the term sheet in greater

Please do not hesitate to reach out with any questions in the meantime. We look forward to working with you and Nathan on this matter.

Renata Vasquez Partner Calderwood & Harkness LLP 299 Park Avenue, 42nd Floor New York, NY 10171 T: (212) 558-4100 E: rvasquez@calderwoodharkness.com

**Attachment:** Initial Term Sheet — CEO Employment Agreement (Northgate Telecommunications PLC / Marcus Elliot Harding) — June 10, 2024 [initial-term-sheet-v1.docx]

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