PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 299 Park Avenue, 42nd Floor New York, NY 10171
INTERNAL MEMORANDUM
June 3, 2024
TO: Renata Vasquez, Partner, Labor & Employment Bernard Crawford, Partner, Labor & Employment
FROM: James Underwood, Associate, Labor & Employment (Preparer)
RE: Conflicts Check Clearance — Proposed Engagement: Northgate Telecommunications PLC — CEO Employment Agreement Negotiation
PROPOSED MATTER NUMBER: 1022-00004
CLASSIFICATION: Internal Use Only — Attorney Work Product
CLEARANCE / SIGN-OFF:
1. Purpose of Memorandum
This memorandum confirms the completion of a conflicts-of-interest review conducted in connection with the proposed engagement of Calderwood & Harkness LLP ("C&H" or the "Firm") by Northgate Telecommunications PLC ("Northgate" or the "Client") to negotiate and draft an executive employment agreement for the position of Chief Executive Officer of Northgate (the "Engagement"). The Engagement encompasses the full scope of employment agreement negotiation, drafting, and advisory services relating to the CEO appointment, including compensation structuring, equity award design, severance and change-in-control protections, restrictive covenants, indemnification provisions, and related ancillary agreements.
The candidate selected by Northgate's Board of Directors for the CEO role is Marcus Elliot Harding, who currently serves as President and Chief Operating Officer of Marlowe Asset Management Digital Holdings, Inc. ("Marlowe Asset Management" or "VDHI"). Mr. Harding is the individual with whom the employment agreement will be negotiated and who, for purposes of this conflicts analysis, is identified as the counterparty to the Client in this Engagement. Mr. Harding is separately represented by personal counsel at Hargrove & Liddell LLP.
The conflicts review documented herein was conducted in accordance with Calderwood & Harkness LLP's internal conflicts clearance procedures, as set forth in the Firm's General Counsel Office Policies and Procedures Manual (Rev. March 2024), and in compliance with the applicable provisions of the New York Rules of Professional Conduct, including, without limitation, Rules 1.7 (Conflict of Interest: Current Clients), 1.8 (Current Clients: Specific Conflict of Interest Rules), 1.9 (Duties to Former Clients), 1.10 (Imputation of Conflicts of Interest), and 1.18 (Duties to Prospective Clients).
If the Engagement is cleared and accepted by the Firm, it will be opened under matter number 1022-00004 and staffed within the Labor & Employment Practice Group under the supervision of Renata Vasquez as Responsible Partner and Bernard Crawford as Billing Partner.
2. Parties and Entities Searched
The following parties, entities, and individuals were included in the conflicts search. Each entry was searched using all available identifiers, including full legal names, short names, trade names, aliases, ticker symbols, registered numbers, and, where applicable, individual names of key personnel.
2.1 Client (Prospective)
Full Legal Name: Northgate Telecommunications PLC
Short Names / Aliases Searched: Northgate; NTP
Entity Type: Public limited company incorporated and registered in England and Wales
Registered Number (Companies House): 07381264
Registered / Global Headquarters: 45 Canary Wharf Tower, One Canada Square, London E14 5AB, United Kingdom
US Operations Headquarters: 600 Lexington Avenue, 38th Floor, New York, NY 10022
Listed Securities: London Stock Exchange (LON: NTP); New York Stock Exchange — American Depositary Receipts (NYSE: NTPC)
Key Subsidiary Searched: Northgate Telecommunications US, Inc. ("NTP US"), a corporation organized under the laws of the State of Delaware and a wholly-owned subsidiary of Northgate Telecommunications PLC. NTP US is the likely contracting entity for purposes of the employment agreement, given that the CEO role will be domiciled in the United States, and the employment agreement is expected to be governed by New York law.
Key Individuals at Client Searched:
• Dame Philippa Thornton-Hale — Chair of the Board of Directors
• Sir Alistair Kemble — Outgoing Chief Executive Officer (retirement effective upon appointment of successor)
• Geoffrey Stanton — Lead Independent Director and Chair, Remuneration Committee
• Lucinda Farrow — Non-Executive Director and Chair, Nomination Committee
• Dr. Tomás Herrera — Non-Executive Director and member, Remuneration Committee
• Elaine Whitford — Senior Vice President and Group General Counsel (primary client contact for the Engagement)
• Priya Narayanan — Chief People Officer
• Jonathan Briggs — Chief Financial Officer
All of the foregoing individuals were searched in their individual capacities and in association with their roles at Northgate Telecommunications PLC and its subsidiaries.
2.2 Counterparty (CEO Candidate)
Full Name: Marcus Elliot Harding
Current Title: President and Chief Operating Officer, Marlowe Asset Management Digital Holdings, Inc.
Residence: 14 Gramercy Park South, Apt. 12A, New York, NY 10003
Note: Mr. Harding is the individual with whom the employment agreement will be negotiated. For purposes of this conflicts analysis, he is classified as the counterparty to the Client. Calderwood & Harkness will represent Northgate's interests in negotiating the terms of the employment agreement opposite Mr. Harding and his personal counsel. C&H will not represent Mr. Harding in any capacity in this Engagement.
2.3 Counterparty's Current Employer
Full Legal Name: Marlowe Asset Management Digital Holdings, Inc.
Short Names / Aliases Searched: Marlowe Asset Management; VDHI
Entity Type: Corporation organized under the laws of the State of Delaware
Headquarters: 200 Technology Way, Suite 4000, San Jose, CA 95110
Listed Securities: New York Stock Exchange (NYSE: VDHI)
Relevance to the Engagement: Marlowe Asset Management is Mr. Harding's current employer and the source of substantial unvested equity compensation that Mr. Harding will forfeit upon his departure. Based on preliminary information provided by the Client, the estimated forfeiture value of Mr. Harding's unvested equity (consisting of performance share units, restricted stock units, and stock options) is approximately $23,400,000. The Engagement will therefore require a detailed make-whole analysis to determine the appropriate quantum and structure of replacement or buy-out equity awards to be included in the Northgate employment agreement.
In addition, Mr. Harding is currently subject to a post-employment non-competition covenant under his existing employment agreement with Marlowe Asset Management. The non-compete has a duration of twelve (12) months following termination of employment and is national in geographic scope (United States). Analysis of the enforceability of this covenant and the structuring of the transition timeline to mitigate potential claims by Marlowe Asset Management will be a material component of the Engagement. Accordingly, a potential adverse-interest analysis with respect to Marlowe Asset Management was required as part of this conflicts review, and the results of that analysis are set forth in Section 4.3 below.
2.4 Counterparty's Counsel
Full Legal Name: Hargrove & Liddell LLP
Short Names / Aliases Searched: H&L; Hargrove & Liddell
Entity Type: Limited liability partnership organized under the laws of the State of New York
Office: 51 Madison Avenue, 30th Floor, New York, NY 10010
Lead Partner: Victoria Hargrove (named partner; recognized specialist in C-suite employment negotiations and executive compensation)
Associate: Nathan Chu
Relevance to the Engagement: Hargrove & Liddell LLP serves as personal counsel to Marcus Elliot Harding and will represent Mr. Harding in the negotiation of the employment agreement. Calderwood & Harkness will negotiate directly with Hargrove & Liddell on opposing sides of this transaction. Accordingly, a review was conducted to determine whether any current or prior relationships between C&H and Hargrove & Liddell, or between C&H personnel and the identified attorneys at Hargrove & Liddell, could give rise to a conflict of interest.
2.5 Additional Related Entities Searched
The following additional entities were identified as parties who may be involved in, consulted in connection with, or otherwise materially related to the Engagement. Each was included in the conflicts search.
Kensington Partners Ltd.
Executive search firm retained by Northgate's Nomination Committee to conduct the CEO search process. Registered office: 33 St James's Square, London SW1Y 4JS, United Kingdom. New York office: 590 Madison Avenue, 26th Floor, New York, NY 10022. Lead consultant: Antonia Blythe. Kensington is a third-party service provider and is not a party to the employment agreement itself; however, it was included in the search as a related entity to the Engagement.
Moorfield Bates LLP
UK employment counsel to Northgate Telecommunications PLC. Office: 1 Moorgate, London EC2R 6AB, United Kingdom. Lead partner: Simon Aldridge. Moorfield Bates is expected to serve as co-counsel to Northgate on UK employment law matters arising in connection with the Engagement. Given Northgate's dual-listed status and the potential for a dual-contract architecture (a US employment agreement governed by New York law and a UK service agreement or letter of appointment), coordination between C&H and Moorfield Bates will be required. The co-counsel relationship necessitated inclusion of Moorfield Bates in the conflicts review.
Whitmore Hobson LLP
Independent compensation consultant retained by Northgate's Remuneration Committee. Office: 120 Broadway, Suite 3510, New York, NY 10271. Lead advisor: Dr. Rachel Whitmore. Whitmore Hobson provides market benchmarking data and compensation design recommendations to the Remuneration Committee and is expected to be consulted extensively during the Engagement with respect to the structuring of Mr. Harding's compensation package, including base salary, annual incentive, long-term equity incentives, and make-whole awards.
Galloway & Partners
Independent auditors to Northgate Telecommunications PLC. Office: 1 New Street Square, London EC4A 3HQ, United Kingdom. Lead audit partner: Clive Warburton. Galloway & Partners may be consulted during the Engagement regarding the accounting treatment of equity compensation awards under ASC 718 (US GAAP) and IFRS 2 (International Financial Reporting Standards), particularly in connection with the structuring of make-whole awards and any inducement grants.
Veltrano Proxy Advisors, Inc.
Proxy advisory and corporate governance consultant retained by Northgate. Office: 1401 K Street NW, Suite 800, Washington, DC 20005. Lead advisor: Sandra Kolb. Veltrano may be consulted during the Engagement regarding the governance and shareholder-approval implications of the CEO compensation package, including potential say-on-pay considerations, disclosure obligations, and alignment with institutional investor expectations.
Ashdown Surety & Insurance Co.
Primary directors' and officers' liability insurer for Northgate Telecommunications PLC. Office: 70 Pine Street, New York, NY 10005. Policy number: ASI-D&O-NTP-2024-4471. Ashdown may be consulted during the Engagement in connection with the indemnification and D&O insurance provisions of the employment agreement, including tail coverage and run-off protections for the incoming CEO.
3. Scope of Conflicts Search
The conflicts check was run against Calderwood & Harkness LLP's firm-wide conflicts database (the "Conflicts System"), which covers all current and former client representations across all of the Firm's offices, including New York, London, Washington, D.C., Los Angeles, San Francisco, Hong Kong, and Singapore. The Conflicts System is maintained by the Firm's General Counsel Office and Conflicts Department and is updated on a continuous basis as new matters are opened, existing matters are modified, and matters are closed.
Searches were conducted using all entity names, short names, trade names, aliases, ticker symbols, registered numbers, and individual names listed in Section 2 of this memorandum. The search parameters encompassed the following categories:
(a) Current active matters — all matters currently open in the Conflicts System, regardless of practice group, office, or matter type, including transactional representations, litigation and arbitration matters, regulatory and compliance engagements, and advisory mandates;
(b) Matters closed within the past five years — all matters closed on or after June 3, 2019, in accordance with the Firm's standard conflicts retention policy, which requires a five-year look-back period for all new engagement conflicts reviews;
(c) Lateral hire conflict disclosures — all conflicts disclosures submitted by lateral hires to the Firm during the preceding five-year period, including representations and relationships disclosed by partners, counsel, and associates who joined C&H from other firms;
(d) Business relationships and investments — any business, financial, or commercial relationships between C&H or its personnel and any of the searched parties, including equity investments, board memberships, advisory roles, and referral relationships; and
(e) Personnel records — cross-referencing of the searched party names against the Firm's current and historical personnel records, including records of all current partners, counsel, associates, and professional staff, for the purpose of identifying any current or former employment relationships between C&H personnel and any of the searched parties or entities.
The conflicts search was conducted by the Firm's Conflicts Department on June 3, 2024, under the supervision of James Underwood, Associate, Labor & Employment. The search results were reviewed and analyzed by James Underwood and subsequently reviewed and approved by both Renata Vasquez, Partner and proposed Responsible Partner for the Engagement, and Bernard Crawford, Partner and proposed Billing Partner for the Engagement.
4. Results of Conflicts Search
The results of the conflicts search are set forth below, organized by party or entity. For each party or entity, the memorandum confirms whether any current or prior representations, adverse representations, or other conflicts-generating relationships were identified.
4.1 Northgate Telecommunications PLC / Northgate Telecommunications US, Inc.
No current or prior representations of Northgate Telecommunications PLC or Northgate Telecommunications US, Inc. (or any other subsidiary, affiliate, or related entity of Northgate) were identified in the Firm's Conflicts System. The search covered both the full legal names and all short names, aliases, and ticker symbols associated with the Northgate group of companies.
No adverse representations against Northgate Telecommunications PLC or Northgate Telecommunications US, Inc. were identified. That is, the Firm has not represented any party in any matter in which Northgate or NTP US was an opposing party, adverse party, or interested party.
No business relationships, investments, or other financial or commercial relationships between Calderwood & Harkness LLP or any of its personnel and Northgate or any of its affiliates were identified.
Conclusion: No conflicts identified with respect to Northgate Telecommunications PLC or Northgate Telecommunications US, Inc. The Firm is clear to accept Northgate as a new client.
4.2 Marcus Elliot Harding
No current or prior representations of Marcus Elliot Harding were identified in the Firm's Conflicts System. The search covered Mr. Harding's full name and all reasonable variations thereof.
No adverse representations involving Mr. Harding were identified. That is, the Firm has not represented any party in any matter in which Mr. Harding was an opposing party, adverse party, or interested party.
No business relationships, investments, or other financial or commercial relationships between Calderwood & Harkness LLP or any of its personnel and Mr. Harding were identified. Additionally, no current or former employment relationships between C&H personnel and Mr. Harding were identified in the Firm's personnel records.
Conclusion: No conflicts identified with respect to Marcus Elliot Harding. Mr. Harding is the counterparty in this Engagement; Calderwood & Harkness will represent Northgate's interests in negotiating opposite Mr. Harding and his personal counsel. The Firm has no prior or current attorney-client relationship with Mr. Harding, and no duty of loyalty or confidentiality to Mr. Harding arises from any prior engagement.
4.3 Marlowe Asset Management Digital Holdings, Inc.
No current active representations of Marlowe Asset Management Digital Holdings, Inc. were identified in the Firm's Conflicts System. Additionally, no prior closed matters involving Marlowe Asset Management Digital Holdings, Inc. were identified within the five-year look-back period or in any historical records available in the Conflicts System.
No current adverse matters against Marlowe Asset Management Digital Holdings, Inc. were identified. That is, the Firm is not currently representing any party in any matter in which Marlowe Asset Management is an opposing party, adverse party, or interested party.
No business relationships, investments, or other financial or commercial relationships between Calderwood & Harkness LLP or any of its personnel and Marlowe Asset Management were identified.
It is noted for completeness that while Marlowe Asset Management is not a direct party to the employment agreement negotiation, it occupies a position of indirect relevance to the Engagement as Mr. Harding's current employer. Specifically: (i) Marlowe Asset Management is the source of the unvested equity compensation (estimated forfeiture value of approximately $23,400,000) that will require analysis in connection with the design of make-whole awards; and (ii) Mr. Harding is subject to a twelve-month post-employment non-competition covenant under his existing Marlowe Asset Management employment agreement, the enforceability and implications of which will need to be assessed as part of the Engagement. However, C&H will not be representing any party adverse to Marlowe Asset Management in any pending or threatened litigation, arbitration, or regulatory proceeding. The Engagement is limited to the negotiation of employment terms between Northgate and Mr. Harding. Accordingly, no conflict of interest arises from this indirect relationship with Marlowe Asset Management, and no consent from Marlowe Asset Management is required.
Conclusion: No conflicts identified with respect to Marlowe Asset Management Digital Holdings, Inc. The indirect relationship described above does not give rise to a conflict of interest under the applicable Rules of Professional Conduct.
4.4 Hargrove & Liddell LLP
No current or prior representations of Hargrove & Liddell LLP were identified in the Firm's Conflicts System. The search covered the firm's full legal name and all short names and aliases.
No representations of Victoria Hargrove or Nathan Chu in their individual capacities were identified.
No matters in which Calderwood & Harkness LLP and Hargrove & Liddell LLP are currently serving as co-counsel were identified. No matters in which C&H and Hargrove & Liddell are currently serving as opposing counsel in other active matters were identified.
No business relationships, investments, referral arrangements, or other financial or commercial relationships between Calderwood & Harkness LLP or any of its personnel and Hargrove & Liddell LLP or its attorneys were identified. No current or former employment relationships between C&H personnel and Hargrove & Liddell or its attorneys were identified in the Firm's personnel records.
Hargrove & Liddell LLP will serve as opposing counsel in this Engagement, representing Mr. Harding's interests in the employment agreement negotiation. The absence of any current co-counsel or other collaborative relationship between C&H and Hargrove & Liddell confirms that no conflict arises from the adversarial posture of this negotiation.
Conclusion: No conflicts identified with respect to Hargrove & Liddell LLP. The Firm is clear to negotiate opposite Hargrove & Liddell in this Engagement.
4.5 Additional Related Entities
The following additional entities were searched, and the results are summarized below:
Kensington Partners Ltd.: No conflicts identified. No current or prior representations of Kensington Partners Ltd. or its personnel (including Antonia Blythe) were found in the Conflicts System. No adverse representations, business relationships, or other conflicts-generating relationships were identified. Kensington is a third-party executive search firm and is not a party to the employment agreement. Its involvement in the Engagement is limited to its role in the CEO search process conducted on behalf of Northgate's Nomination Committee.
Moorfield Bates LLP: No conflicts identified. No current or prior representations of Moorfield Bates LLP or its personnel (including Simon Aldridge) were found in the Conflicts System. No adverse representations, business relationships, or other conflicts-generating relationships were identified. Moorfield Bates will serve as co-counsel to Northgate on UK employment law matters, and the Firm anticipates a collaborative working relationship with Moorfield Bates during the Engagement. No adverse relationship exists that would preclude this co-counsel arrangement.
Whitmore Hobson LLP: No conflicts identified. No current or prior representations of Whitmore Hobson LLP or its personnel (including Dr. Rachel Whitmore) were found in the Conflicts System. No adverse representations, business relationships, or other conflicts-generating relationships were identified. Whitmore Hobson serves as the independent compensation consultant to Northgate's Remuneration Committee and will provide market data and compensation design recommendations during the Engagement.
Galloway & Partners: No conflicts identified. No current or prior representations of Galloway & Partners or its personnel (including Clive Warburton) were found in the Conflicts System. No adverse representations, business relationships, or other conflicts-generating relationships were identified. Galloway & Partners serves as Northgate's independent auditors and may be consulted on equity compensation accounting matters (ASC 718 / IFRS 2) during the Engagement.
Veltrano Proxy Advisors, Inc.: No conflicts identified. No current or prior representations of Veltrano Proxy Advisors, Inc. or its personnel (including Sandra Kolb) were found in the Conflicts System. No adverse representations, business relationships, or other conflicts-generating relationships were identified. Veltrano serves as a proxy advisory and corporate governance consultant to Northgate and may provide guidance on shareholder-approval and say-on-pay considerations during the Engagement.
Ashdown Surety & Insurance Co.: No conflicts identified. No current or prior representations of Ashdown Surety & Insurance Co. were found in the Conflicts System. No adverse representations, business relationships, or other conflicts-generating relationships were identified. Ashdown is Northgate's primary D&O liability insurer (Policy No. ASI-D&O-NTP-2024-4471) and may be consulted regarding indemnification, D&O insurance, and tail coverage provisions in the employment agreement.
Conclusion — All Additional Related Entities: No conflicts have been identified with respect to any of the additional related entities searched.
5. Analysis and Conclusion
Based on the comprehensive conflicts review documented in this memorandum, no conflicts of interest have been identified that would preclude Calderwood & Harkness LLP from accepting the proposed Engagement to represent Northgate Telecommunications PLC (and/or its subsidiary, Northgate Telecommunications US, Inc.) in the negotiation and drafting of an executive employment agreement with Marcus Elliot Harding for the position of Chief Executive Officer.
The Engagement involves the representation of the employer (Northgate) in an arm's-length negotiation with the CEO candidate (Mr. Harding), who is separately and independently represented by his own personal counsel at Hargrove & Liddell LLP. No dual-representation issue arises, as C&H will represent only Northgate in this matter and will not provide legal advice to, or act on behalf of, Mr. Harding in any capacity. No current-client adverse-interest conflict arises under New York Rule of Professional Conduct 1.7, as none of the counterparties, opposing counsel, or related entities are current clients of the Firm. No former-client conflict arises under New York Rule of Professional Conduct 1.9, as no prior representations of any of the relevant parties have been identified.
The Firm's review has also considered the indirect relevance of Marlowe Asset Management Digital Holdings, Inc. as Mr. Harding's current employer and the source of compensation data material to the Engagement. Because the Firm has no current or prior attorney-client relationship with Marlowe Asset Management, and because C&H will not be taking any adversarial action against Marlowe Asset Management in the course of this Engagement, no conflict arises from this relationship.
Accordingly, the Engagement is cleared to proceed, subject to the execution of a formal engagement letter between Calderwood & Harkness LLP and Northgate Telecommunications PLC (or NTP US, as applicable) setting forth the scope, terms, and conditions of the representation.
It is noted that if, during the course of the Engagement, any new parties, entities, or individuals are identified that were not included in the initial conflicts search — including, without limitation, any parties to ancillary agreements, additional advisors, or entities involved in the transition of Mr. Harding's employment — supplemental conflicts checks should be run promptly in accordance with the Firm's standard procedures. The engagement team is responsible for notifying the Conflicts Department of any such developments without delay.
6. Clearance Approvals
The undersigned have reviewed the conflicts search results and the analysis set forth in this memorandum and hereby confirm that the proposed Engagement is cleared to proceed.
Reviewed and Cleared by:
RENATA VASQUEZ Partner, Labor & Employment Responsible Partner — Matter No. 1022-00004
Signature: ________
Date: June 3, 2024
BERNARD CRAWFORD Partner, Labor & Employment Billing Partner — Matter No. 1022-00004
Signature: ________
Date: June 3, 2024
Prepared by:
JAMES UNDERWOOD Associate, Labor & Employment
Signature: ________
Date: June 3, 2024
7. Distribution
This memorandum is to be retained in the matter file for 1022-00004 in accordance with the Firm's document retention policies.
Distribution List:
1. Calderwood & Harkness LLP — Conflicts Department (original to be filed in the Conflicts System)
2. Renata Vasquez, Partner, Labor & Employment — Responsible Partner
3. Bernard Crawford, Partner, Labor & Employment — Billing Partner
4. James Underwood, Associate, Labor & Employment — Preparer
5. Meredith Archer, Associate, Labor & Employment — Engagement Team Member
This memorandum is for internal use only and is not to be distributed outside the Firm. This memorandum is protected by the attorney work product doctrine and the attorney-client privilege. Any unauthorized disclosure, copying, or distribution of this memorandum is strictly prohibited.
CALDERWOOD & HARKNESS LLP — CONFIDENTIAL — ATTORNEY WORK PRODUCT
| Role | Name | Signature | Date |
| Responsible Partner | Renata Vasquez | ____ | __ |
| Billing Partner | Bernard Crawford | ____ | __ |