1022-00004 · Northgate Telecommunications PLC · Final Proposal & Termination

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PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT

CALL NOTES

Board Call — September 10, 2024

These notes are prepared by outside counsel and are protected by the attorney-client privilege and the work product doctrine. They are intended solely for the use of the individuals to whom they are addressed and should not be forwarded, copied, or disclosed to any third party without the prior written consent of Calderwood & Harkness LLP and the General Counsel of Northgate Telecommunications PLC.

ATTENDEES

The following individuals participated in the call:

• Dame Philippa Thornton-Hale — Chair of the Board, Northgate Telecommunications PLC (joining from London)

• Geoffrey Stanton — Lead Independent Director; Chair, Remuneration Committee, Northgate Telecommunications PLC (joining from New York)

• Lucinda Farrow — Non-Executive Director; Chair, Nomination Committee, Northgate Telecommunications PLC

• Dr. Tomás Herrera — Non-Executive Director; Remuneration Committee member, Northgate Telecommunications PLC

• Elaine Whitford — Senior Vice President & Group General Counsel, Northgate Telecommunications PLC (joining from 600 Lexington Avenue, 38th Floor, New York, NY 10022)

• Renata Vasquez — Partner, Calderwood & Harkness LLP (joining from 299 Park Avenue, 42nd Floor, New York, NY 10171)

Note: Sir Alistair Kemble (outgoing Chief Executive Officer), Jonathan Briggs (Chief Financial Officer), and Priya Narayanan (Chief People Officer) were not on the call. Participation was limited to Non-Executive Directors, General Counsel, and outside counsel in order to preserve privilege and to ensure that the discussion remained within the scope of Non-Executive Director oversight of the CEO employment negotiation.

1. CALL TO ORDER AND PURPOSE

Dame Philippa Thornton-Hale called the meeting to order at approximately 3:02 p.m. EDT. She confirmed that all expected attendees were present on the line and thanked each participant for making themselves available on relatively short notice.

Dame Philippa stated the purpose of the call: to discuss the rejection by Marcus Elliot Harding, through his counsel Victoria Hargrove of Hargrove & Liddell LLP, of Northgate Telecommunications PLC's ("NTP" or the "Company") final compromise proposal dated September 3, 2024, and to determine the Board's direction on whether to continue or terminate negotiations for the Chief Executive Officer employment agreement with Mr. Harding.

Dame Philippa noted that the rejection was received via email from Victoria Hargrove to Renata Vasquez on September 9, 2024, at approximately 4:47 p.m. EDT. The email had been promptly forwarded by Ms. Vasquez to Ms. Whitford, and from Ms. Whitford to each of the Non-Executive Directors on the call, on the evening of September 9, 2024. Dame Philippa confirmed that all directors present had reviewed the email prior to the call.

Dame Philippa confirmed that a quorum of Non-Executive Directors was present for purposes of this discussion. She reminded participants that the call was privileged and confidential and asked that no notes or recordings be made by any participant other than Calderwood & Harkness LLP, which was preparing a memorandum for the file.

2. SUMMARY OF REJECTION — PRESENTED BY RENATA VASQUEZ

Dame Philippa asked Renata Vasquez to provide the Board with a comprehensive summary of the current posture of negotiations, including the content of Ms. Hargrove's rejection and Calderwood & Harkness's assessment of the path forward.

2.1 Background and Timeline Recap

Ms. Vasquez provided a brief chronological recap of the negotiation history for the benefit of the full group, noting that while each of the directors had been involved at various points, it was useful to have the complete timeline on the record.

Ms. Vasquez outlined the following key dates and milestones:

• June 4, 2024: The engagement with Marcus Elliot Harding was formally opened following the Board's selection of Mr. Harding as the preferred candidate for the CEO position, based on the recommendation of the Nomination Committee and the search process conducted by Kensington Partners Ltd.

• June 10, 2024: An initial term sheet was circulated by Calderwood & Harkness to Victoria Hargrove at Hargrove & Liddell LLP, setting forth the principal economic and governance terms proposed by NTP for the CEO employment.

• June 24 through July 19, 2024: Five rounds of term-sheet negotiation calls were held between the parties. These calls involved, at various points, Ms. Vasquez, Ms. Whitford, and Ms. Hargrove, with periodic check-ins with Dame Philippa and Mr. Stanton as needed to obtain Board-level guidance on commercial terms. Significant progress was made during this period on the basic compensation structure, but meaningful gaps remained on change in control protections, severance, and restrictive covenants.

• July 22, 2024: Draft 1 of the Executive Employment Agreement was circulated by Calderwood & Harkness to Hargrove & Liddell. This was a comprehensive long-form agreement reflecting the areas of agreement from the term-sheet negotiations and bracketing the open issues for further discussion.

• August 5, 2024: Hargrove & Liddell returned a redline of Draft 1 with eighty-eight (88) comments. Ms. Vasquez noted that the volume and substance of the comments indicated that Mr. Harding and his counsel had significant concerns across multiple provisions, including the change in control definition, severance provisions, equity treatment, clawback, indemnification, and restrictive covenants.

• August 12, 2024: Draft 2 of the Executive Employment Agreement was circulated by Calderwood & Harkness to Hargrove & Liddell, reflecting NTP's responses to the 88 comments and incorporating certain concessions authorized by the Board.

• August 19, 2024: Hargrove & Liddell returned a redline of Draft 2 with forty-two (42) remaining comments. While the number of open issues had been reduced by more than half, the remaining 42 comments included several issues that Ms. Vasquez characterized as "high-priority" or "deal-critical" on Harding's side.

• August 26, 2024: An in-person principals meeting was held at 600 Lexington Avenue, New York, attended by Dame Philippa Thornton-Hale, Geoffrey Stanton, Elaine Whitford, and Renata Vasquez on behalf of Northgate, and by Marcus Elliot Harding and Victoria Hargrove on behalf of the candidate. The purpose of this meeting was to attempt to resolve the remaining open issues at the principal level. Ms. Vasquez reported that the meeting lasted approximately three hours and that the parties were able to narrow the open issues to a small number of core disagreements, but that an impasse was acknowledged by both sides at the conclusion of the meeting. Mr. Harding characterized his remaining positions as "non-negotiable" at that time.

• August 30, 2024: Elaine Whitford communicated to Renata Vasquez the Board's authorization to transmit a final compromise proposal to Hargrove & Liddell, reflecting the maximum concessions the Board was prepared to make.

• September 3, 2024: The final compromise proposal, styled as "Term Sheet v5-Final," was transmitted by Calderwood & Harkness to Hargrove & Liddell, per the Board's authorization.

• September 9, 2024: Victoria Hargrove communicated, via email to Renata Vasquez, that Mr. Harding was unable to accept NTP's final proposal.

2.2 Content of Hargrove's Rejection (September 9, 2024)

Ms. Vasquez then turned to the substance of the September 9 rejection email from Victoria Hargrove. Ms. Vasquez stated that she would summarize the key elements and that the full text of the email had been previously circulated to all attendees.

Victoria Hargrove communicated on behalf of Mr. Harding that his minimum requirements are "non-negotiable" and that he was unable to accept Northgate's final proposal as submitted. Ms. Hargrove expressed Mr. Harding's regret that the parties could not reach agreement and noted that Mr. Harding held the Northgate Board in high regard and appreciated the seriousness with which the Board had approached the process.

Ms. Vasquez identified three specific deal-breakers stated by Ms. Hargrove in the rejection:

1. Change in Control Severance Multiplier.

Mr. Harding insists on a change in control severance multiplier of three times (3x) the sum of base salary and target annual bonus. Based on the agreed compensation parameters (base salary of $1,750,000 and target annual bonus of $3,062,500, for a combined base-plus-target-bonus amount of $4,812,500), Mr. Harding's demanded CIC severance payment would total $14,437,500.

NTP's final offer, as set forth in Term Sheet v5-Final, was a CIC severance multiplier of two and one-half times (2.5x), which would result in a CIC severance payment of $12,031,250.

The gap between the two positions is $2,406,250. Ms. Vasquez noted that this is a significant dollar amount but that the issue had broader governance and proxy advisory implications beyond the pure dollar difference, which Mr. Stanton would address later in the call.

2. Section 280G Tax Treatment.

Mr. Harding insists on a full tax gross-up for any excise tax imposed under Section 4999 of the Internal Revenue Code on excess parachute payments (as defined under Section 280G of the Internal Revenue Code). Under this provision, if a change in control triggering event were to occur and Mr. Harding's total parachute payments exceeded the safe harbor threshold, NTP would be obligated to "gross up" Mr. Harding's compensation so that he would be in the same after-tax position as if no excise tax had been imposed.

NTP's final offer was a "best-net" safe harbor cutback with no gross-up. Under this approach, if Mr. Harding's parachute payments would exceed the safe harbor threshold, the payments would be reduced (cut back) to the safe harbor amount, but only if such cutback would result in a greater after-tax benefit to Mr. Harding than receiving the full payments and bearing the excise tax.

Ms. Vasquez then summarized the preliminary Section 280G analysis prepared by Whitmore Hobson LLP (tax counsel), which had been circulated to the Board in connection with the August 26 principals meeting:

• Base Amount: $7,840,000, calculated as the average of Mr. Harding's W-2 compensation from Marlowe Asset Management Digital Holdings, Inc. for taxable years 2019 through 2023.

• Safe Harbor Limit (3x Base Amount less $1): $23,519,999.

• Estimated Total Parachute Payments under Harding's Proposal: Approximately $38,200,000. This estimate includes CIC severance, accelerated vesting of equity awards, continuation of benefits, and other payments that would be contingent on a change in control.

• Excess Parachute Payment: $30,360,000 (i.e., total parachute payments of $38,200,000 less the base amount of $7,840,000).

• Estimated 20% Excise Tax on Excess Parachute Payment: $6,072,000.

• Estimated Gross-Up Exposure to NTP: $4,200,000 to $6,800,000, depending on the precise calculation of parachute payments and the applicable marginal income tax rates at the time of the triggering event. The range reflects uncertainty in certain assumptions regarding the timing and characterization of equity acceleration and other contingent payments.

Ms. Vasquez emphasized that the gross-up exposure represents a potentially significant incremental cost to the Company that would provide no retention or performance benefit — it is a pure tax indemnity.

3. Change in Control Definition — Board Turnover Trigger.

Mr. Harding demands the inclusion of a provision in the employment agreement that would treat the replacement of a majority of the members of the NTP Board of Directors within any twelve-month (12-month) period as a "change in control" event, thereby triggering all change in control protections (including the severance multiplier, equity acceleration, and other CIC benefits).

NTP has consistently refused this provision throughout the negotiation. Ms. Vasquez noted that the NTP Board's position has been that the change in control definition should be limited to (a) acquisition of more than 50% of the outstanding voting securities by a third party, (b) consummation of a merger or consolidation in which NTP is not the surviving entity or in which NTP shareholders do not retain a majority of the voting power of the surviving entity, and (c) a sale of all or substantially all of the Company's assets. The Board has declined to include any board turnover trigger, whether a 12-month or a 24-month formulation.

Additionally, on Restrictive Covenants:

Ms. Vasquez reported that the parties also remain apart on the terms of the post-termination non-competition covenant, though Ms. Hargrove did not characterize the non-compete terms as a "deal-breaker" in her September 9 email. For completeness, Ms. Vasquez summarized the remaining gap:

• Harding's Position: A twelve-month (12-month) non-compete with geographic scope limited to North America and Western Europe, restricted to a schedule of eight (8) named direct competitors (to be set forth on a schedule to the employment agreement), with twelve-month (12-month) garden leave at full compensation (base salary plus pro-rata annual bonus) running concurrently with the non-compete period.

• NTP's Final Offer (Term Sheet v5-Final): An eighteen-month (18-month) non-compete covering North America and Western Europe (conceded from the original proposed worldwide scope), with an activity-based restriction prohibiting employment by or service to any company deriving more than fifteen percent (15%) of its revenue from telecommunications infrastructure, managed network services, or software-as-a-service platforms, with six-month (6-month) garden leave at base salary only.

Ms. Vasquez noted that this non-compete gap remained significant but that it had not been identified by Ms. Hargrove as one of the issues that was "non-negotiable."

In closing her summary of the rejection, Ms. Vasquez noted that Ms. Hargrove's email expressed regret that the parties could not reach agreement and offered to discuss any final thoughts the Northgate Board might have. Ms. Vasquez characterized this language as a courtesy close rather than a meaningful invitation to further negotiation, given the "non-negotiable" characterization of Mr. Harding's positions.

2.3 Vasquez's Assessment

Ms. Vasquez then provided Calderwood & Harkness's assessment of the current posture and the prospects for continued negotiation.

Ms. Vasquez stated that it is Calderwood & Harkness's assessment that no further negotiation is likely to be productive. She based this assessment on the following observations:

First, Mr. Harding has characterized his positions on the three core deal-breaker issues as "non-negotiable." This is the same language he used at the August 26 in-person principals meeting. The September 9 email from Ms. Hargrove confirms that Mr. Harding's position has not moved since that meeting.

Second, there has been no movement whatsoever on Mr. Harding's side since the August 26 principals meeting, despite the fact that NTP made additional concessions in the September 3 final compromise proposal. Those concessions included (a) the reduction of the non-compete geographic scope from worldwide to North America and Western Europe, (b) a narrower activity-based restriction (raising the revenue threshold from 10% to 15%), and (c) certain enhancements to the equity award terms that were reflected in Term Sheet v5-Final. Mr. Harding has given no corresponding concessions.

Third, in Ms. Vasquez's experience, when a candidate at this level uses "non-negotiable" language twice — once in person and once through counsel — that language should be taken at face value. The risk of further concession by NTP without any reciprocal movement is that the Company would be negotiating against itself.

Ms. Vasquez recommended that the Board formally resolve to terminate negotiations with Mr. Harding and direct outside counsel to prepare and deliver a termination letter to Hargrove & Liddell LLP.

3. ISS AND SHAREHOLDER CONCERNS — PRESENTED BY GEOFFREY STANTON

Dame Philippa then asked Geoffrey Stanton, as Chair of the Remuneration Committee, to share the governance and shareholder-related analysis that had informed the Committee's perspective throughout the negotiation.

3.1 Veltrano Proxy Advisors Analysis

Mr. Stanton reported on the analysis provided by Sandra Kolb of Veltrano Proxy Advisors, Inc. ("Veltrano"), which had been retained by NTP earlier in the negotiation process to assess shareholder sensitivity to the quantum and structure of the proposed CEO compensation package and, in particular, to the change in control provisions under discussion.

Mr. Stanton noted that Veltrano had provided an informal, non-public assessment of the likely reaction of the principal proxy advisory firms — Thackeray Health IT ("ISS") and Westmark Solutions ("Tarrant Partners LLC") — to the key terms of Mr. Harding's demanded package. Veltrano's analysis was based on current ISS and Tarrant Partners LLC policy guidelines and was provided in a confidential memorandum dated August 21, 2024.

Veltrano's informal read on the likely ISS and Tarrant Partners LLC reaction to Mr. Harding's demanded package was as follows:

• A CIC severance multiplier of 3x would likely be flagged as a concern under ISS policy. While ISS generally treats CIC severance exceeding 3x as clearly problematic, even a multiplier at the 3x level is viewed as at the upper boundary of acceptable practice and is scrutinized closely, particularly in the context of other change in control protections.

• A full Section 280G tax gross-up is deemed "problematic" under current ISS policy guidelines. ISS has consistently taken the position that excise tax gross-ups are a disfavored practice, and the presence of a full gross-up is treated as a significant negative factor in ISS's evaluation of executive compensation programs. Tarrant Partners LLC maintains a similar position.

• The combination of a 3x CIC severance multiplier together with a full Section 280G gross-up would very likely trigger a negative say-on-pay recommendation from ISS. Mr. Stanton noted that, in Veltrano's assessment, the probability of a negative ISS recommendation under these circumstances was "high" and that Tarrant Partners LLC would likely follow suit.

Veltrano's recommendation to NTP was to cap CIC severance at no more than 2.99x (i.e., below the 3x threshold) and to adopt a best-net cutback approach with no gross-up, in order to minimize the risk of a negative say-on-pay recommendation.

3.2 Say-on-Pay Vote History and 2025 AGM Exposure

Mr. Stanton reminded the Board of NTP's recent say-on-pay voting history. At the April 18, 2024 Annual General Meeting, NTP received 87.4% support on its advisory say-on-pay resolution. While this level of support is generally considered adequate, it represents a decline from prior years and leaves relatively limited room for deterioration.

Mr. Stanton noted that any new CEO compensation package will be subject to a binding remuneration policy vote at the 2025 Annual General Meeting, as required under UK listing rules and the Companies Act 2006. Unlike the advisory say-on-pay votes under U.S. SEC rules, the UK remuneration policy vote is binding, meaning that if shareholders do not approve the policy, the Company would be required to continue operating under the existing remuneration policy until a revised policy is approved.

Mr. Stanton expressed his strong view that accepting Mr. Harding's terms — including a 3x CIC multiplier and full Section 280G gross-up — would put the remuneration policy vote at serious risk. A failed or narrowly passed remuneration policy vote would not only constrain the Company's ability to compensate its new CEO as agreed, but would also potentially damage the Board's credibility with institutional shareholders and the broader investment community. He characterized this as a risk that the Board could not responsibly accept.

3.3 Institutional Shareholder Landscape

Mr. Stanton then led a discussion of NTP's principal institutional shareholders and their likely reaction to the key terms at issue.

NTP's top five institutional shareholders, based on the most recent available filings, are as follows:

Mr. Stanton noted that several of these institutional holders have publicly stated governance policies opposing excise tax gross-ups and excessive change in control severance multiples. In particular, Caledonian Asset Management and Thornbury Investment Trust have published proxy voting guidelines that specifically identify full excise tax gross-ups as a factor that will generally lead to a vote against a company's remuneration policy or say-on-pay resolution. Pemberton Capital Group has adopted a policy of generally supporting ISS recommendations on compensation matters, which effectively means that a negative ISS recommendation would likely result in a "no" vote from Pemberton.

Mr. Stanton also highlighted the particular sensitivity associated with the Atlas Pension Fund. As the NTP employee pension trust, Atlas holds shares on behalf of current and former NTP employees. A generous CEO compensation package that includes provisions viewed as excessive or shareholder-unfriendly would create reputational risk for the Atlas Pension Fund's trustees and could become a source of internal friction within the Company. Mr. Stanton noted that the Atlas Pension Fund's voting policy generally follows the recommendations of its external governance advisor, which in turn tends to align with ISS and Tarrant Partners LLC positions on compensation matters.

3.4 UK Corporate Governance Code Constraints

The discussion then turned to the constraints imposed by the UK Corporate Governance Code.

Mr. Stanton referenced the UK Corporate Governance Code 2024, Provision 40, which provides that notice periods for executive directors should be set at twelve months or less. While Provision 40 addresses notice periods rather than CIC severance directly, the underlying principle — that executive compensation arrangements should not provide for excessive payouts that are disconnected from performance — applies broadly to severance and change in control protections.

Mr. Stanton observed that a CIC severance of 3x base plus target bonus significantly exceeds market practice for UK-listed companies. He noted that the market norm for UK-listed companies is a CIC severance multiplier in the range of 1x to 2x, and that even 2.5x (NTP's final offer) represented a significant stretch from UK market norms that the Remuneration Committee had agreed to only as a concession to U.S. market expectations, given Mr. Harding's background and the competitive dynamics of recruiting a U.S.-based CEO for a UK-listed company.

The Board has a duty to demonstrate compliance with the Code on a "comply or explain" basis. Mr. Stanton stated that explaining a 3x CIC multiplier with a full Section 280G gross-up in the Annual Report's remuneration section would be extremely difficult and would invite scrutiny from institutional shareholders, proxy advisory firms, and the financial press. He expressed the view that the explanation would not be credible and would be perceived as a failure of governance.

4. BOARD DISCUSSION

Dame Philippa then opened the floor for a broader discussion among the Board members and counsel present.

4.1 Dame Philippa Thornton-Hale — Chair's Perspective

Dame Philippa acknowledged her deep disappointment that negotiations with Mr. Harding had not succeeded. She stated that Mr. Harding was the Board's unanimous first choice for the CEO role, identified through a rigorous and comprehensive search process conducted by Kensington Partners Ltd. under the leadership of Antonia Blythe, Managing Director. The search had been extensive, commencing in early 2024 and involving the evaluation of more than forty prospective candidates before the final shortlist of three was presented to the Board on May 22, 2024.

However, Dame Philippa stated that the Board cannot agree to terms that would jeopardize shareholder support and corporate governance credibility. The Board's obligation to shareholders and to the integrity of the Company's governance framework must take precedence over the desire to secure any individual candidate, regardless of how well-qualified that candidate may be.

Dame Philippa noted that the compensation package offered to Mr. Harding was already generous by any reasonable measure. The proposed total target annual compensation of $13,812,500 — consisting of a base salary of $1,750,000, a target annual bonus of $3,062,500 (175% of base salary), and an annual long-term incentive award with a grant-date target value of $9,000,000 — represented a significant step up from Sir Alistair Kemble's existing package and reflected the Board's recognition of the need to compete for talent in the U.S. market.

Moreover, the sign-on package was specifically designed to make Mr. Harding substantially whole for the equity compensation he would forfeit upon departure from Marlowe Asset Management Digital Holdings, Inc. The sign-on package consisted of a cash signing bonus of $5,000,000 and a sign-on equity award with a grant-date value of $18,400,000, for a total make-whole value of $23,400,000. This total was calibrated to the estimated forfeiture value of Mr. Harding's unvested Marlowe Asset Management equity, which had been estimated at approximately $23,400,000 based on information provided by Hargrove & Liddell during the negotiation.

Dame Philippa expressed her view that the Board had gone as far as it responsibly could in seeking to accommodate Mr. Harding's demands. The final compromise proposal reflected meaningful concessions by NTP across multiple dimensions, including the CIC severance multiplier (increased from the initial offer of 2x to 2.5x), the non-compete scope (reduced from worldwide to North America and Western Europe), the activity-based restriction (narrowed to a 15% revenue threshold), and the equity award terms. The Board could not, in good conscience, make further concessions on the three issues Mr. Harding had identified as non-negotiable.

4.2 Geoffrey Stanton — Remuneration Committee Chair's View

Mr. Stanton stated unequivocally that the Remuneration Committee cannot recommend a package containing a full Section 280G tax gross-up. He characterized the gross-up as the single most problematic element of Mr. Harding's demands, both from a governance perspective and from a shareholder relations perspective.

Mr. Stanton elaborated on the economics of the gross-up. The estimated gross-up cost of $4.2 million to $6.8 million represents a pure windfall to the executive that provides no retention or performance benefit to the Company. The gross-up is payable only upon a change in control — an event that, by definition, occurs after the executive's services to the Company have either ended or are about to end. It does not incentivize the executive to remain with the Company, to perform at a higher level, or to create value for shareholders. It is, in essence, a tax indemnity that transfers the cost of a tax penalty from the executive to the Company.

Mr. Stanton reported that Whitmore Hobson LLP, the Company's outside tax counsel, had confirmed through its "best-net" analysis that Mr. Harding's after-tax position under the cutback approach versus the full payment plus excise tax approach was roughly equivalent, with the cutback approach actually slightly favored in most scenarios. Dr. Rachel Whitmore of Whitmore Hobson LLP had concluded that the gross-up demand was "largely a matter of principle and optics" rather than economic substance — meaning that Mr. Harding would not be materially worse off under the cutback approach, but was insisting on the gross-up as a point of principle.

On the board turnover trigger within the change in control definition, Mr. Stanton expressed the view that this provision was overreach and inconsistent with UK corporate governance norms. A provision that treats the replacement of a majority of directors within a 12-month period as a change in control could be triggered by normal Board refreshment — for example, in connection with a planned succession or rotation of non-executive directors, or following an AGM at which shareholders vote to replace multiple directors. This would create a perverse incentive structure in which the CEO's change in control protections could be activated without any actual change in ownership or control of the Company.

Mr. Stanton recommended that the Board terminate negotiations with Mr. Harding.

4.3 Lucinda Farrow — Nomination Committee Chair's View

Lucinda Farrow expressed concern about the timeline for Sir Alistair Kemble's retirement. Sir Alistair has communicated his intention to retire as CEO effective December 31, 2024, and the Board has publicly announced a CEO transition process. The failure of negotiations with Mr. Harding means that, as of the date of this call, the Company does not have a successor identified, and fewer than four months remain before the planned transition date.

However, Ms. Farrow agreed that accepting Mr. Harding's terms would set a problematic precedent for the Company. She noted that the terms demanded by Mr. Harding — particularly the full Section 280G gross-up and the 3x CIC multiplier — would not only create immediate governance challenges but would also establish a benchmark for future CEO and senior executive negotiations that the Remuneration Committee would find difficult to walk back. Once a precedent is set at this level, subsequent candidates and internal executives would be likely to demand similar or comparable terms.

Ms. Farrow suggested that Kensington Partners Ltd. should be directed to resume the CEO search process immediately. She noted that the final shortlist presented by Kensington Partners on May 22, 2024 included three candidates, of whom Mr. Harding was selected as the preferred candidate. The other two candidates on the shortlist may potentially remain available and interested, and Ms. Farrow recommended that Kensington Partners be asked to assess their current availability as a first step.

Ms. Farrow also raised the possibility of interim arrangements to manage the transition period. Two options were discussed briefly:

• Extension of Sir Alistair Kemble's tenure beyond December 31, 2024. Dame Philippa could approach Sir Alistair informally to inquire whether he would be willing to extend his service as CEO for a defined period — perhaps three to six months — to allow additional time for the search to be completed.

• Appointment of an internal interim CEO. If Sir Alistair is unwilling or unable to extend his tenure, the Board could consider appointing Jonathan Briggs, the current Chief Financial Officer, as interim CEO during the search period. Mr. Briggs has deep institutional knowledge, a strong relationship with the Board and the senior leadership team, and the operational capability to serve in an interim capacity.

4.4 Dr. Tomás Herrera

Dr. Herrera concurred with Mr. Stanton's analysis on the governance and proxy advisory concerns. He stated that the Veltrano analysis, taken together with the Whitmore Hobson tax analysis, provided a clear and well-supported basis for the Board's conclusion that it could not accept Mr. Harding's terms.

Dr. Herrera noted that Mr. Harding's expectation of a 3x CIC severance multiplier with full vesting acceleration and a full Section 280G gross-up is explained, at least in part, by the fact that his current employment agreement with Marlowe Asset Management Digital Holdings, Inc. includes precisely these provisions. Marlowe Asset Management is a privately held U.S. company that is not subject to the same governance constraints as a UK-listed public company. It was understandable, from Mr. Harding's perspective, that he would seek to replicate the protections he currently enjoys. However, NTP operates under a fundamentally different governance framework — one that includes binding shareholder approval of remuneration policy, compliance with the UK Corporate Governance Code on a comply-or-explain basis, and scrutiny from institutional shareholders and proxy advisory firms that apply UK governance standards.

Dr. Herrera stated that, in his view, termination of negotiations is the appropriate course of action.

4.5 Elaine Whitford — General Counsel's Observations

Ms. Whitford provided several observations from a legal and practical perspective.

First, Ms. Whitford confirmed that NTP has no legal obligation to continue negotiations with Mr. Harding. No definitive employment agreement was executed, and no binding commitment was made by either party. The negotiations were conducted on a non-binding basis, and the term sheets and draft agreements exchanged during the process were expressly marked as subject to Board approval and execution of a definitive agreement. There is no basis for any claim by Mr. Harding that NTP is obligated to continue negotiating or to accept any particular terms.

Second, Ms. Whitford noted that the confidentiality obligations under the mutual non-disclosure agreement signed by Mr. Harding and NTP during the search process will survive the termination of negotiations. The NDA contains customary provisions requiring both parties to maintain the confidentiality of all information exchanged during the search and negotiation process, including the existence and terms of the negotiations, for a period of two years following the termination of discussions. Ms. Whitford recommended that the termination letter to Hargrove & Liddell include a reminder of these ongoing confidentiality obligations.

Third, Ms. Whitford raised the question of public disclosure. She noted that, in her assessment, there is no obligation to disclose the failed negotiation under SEC rules, NYSE listing standards, or FCA rules. No definitive agreement was executed, and no material commitment was made by NTP. The negotiation itself does not constitute a material event requiring disclosure. Ms. Vasquez concurred with this assessment, adding that the Company should exercise caution to ensure that no selective disclosure occurs and that the Board's communications regarding the CEO search remain consistent with prior public statements.

Ms. Whitford recommended that Ms. Vasquez prepare a formal termination letter to Hargrove & Liddell LLP, as well as a notification to Kensington Partners Ltd. regarding the resumption of the search process.

5. BOARD DIRECTION — UNANIMOUS DECISION

Following the discussion, Dame Philippa asked each Non-Executive Director present for their view on whether the Board should terminate negotiations with Mr. Harding.

The poll was conducted as follows:

• Geoffrey Stanton: Terminate.

• Lucinda Farrow: Terminate.

• Dr. Tomás Herrera: Terminate.

• Dame Philippa Thornton-Hale: Terminate.

The Board unanimously directed the termination of negotiations with Marcus Elliot Harding for the position of Chief Executive Officer of Northgate Telecommunications PLC.

Dame Philippa directed that a formal written Board resolution memorializing this decision be prepared and circulated to all Board members for adoption no later than September 12, 2024.

Dame Philippa further directed Elaine Whitford and Renata Vasquez to take the following actions:

1. Prepare and deliver a formal termination letter to Victoria Hargrove at Hargrove & Liddell LLP (51 Madison Avenue, 30th Floor, New York, NY 10010), confirming the Board's decision to terminate negotiations. The letter should be professional and courteous in tone and should not characterize the reasons for termination in a manner that could be perceived as critical of Mr. Harding personally.

2. Include in the termination letter a request for the return or destruction of all confidential materials provided to Mr. Harding and his counsel during the negotiation process, together with a reminder of the ongoing confidentiality obligations under the mutual NDA.

3. Notify Antonia Blythe at Kensington Partners Ltd. that the Board has directed the resumption of the CEO search process and that Kensington Partners should prepare to re-engage on an expedited basis.

4. Prepare guidance on public disclosure and non-disclosure of the failed negotiation, including talking points for any internal or external inquiries regarding the status of the CEO search.

5. Assess interim CEO arrangements pending completion of the resumed search, including the feasibility of an extension of Sir Alistair Kemble's tenure and the potential appointment of Jonathan Briggs as interim CEO.

6. SEARCH AND SUCCESSION — NEXT STEPS DISCUSSION

Dame Philippa asked Lucinda Farrow, as Chair of the Nomination Committee, to take the lead in coordinating with Kensington Partners on the resumption of the search.

Dame Philippa noted that the fee arrangement with Kensington Partners is structured as a total engagement fee of £1,200,000, payable in three tranches: one-third (£400,000) on retainer, one-third (£400,000) upon delivery of the final shortlist, and one-third (£400,000) upon successful placement. The first two tranches had been paid, but the third tranche was never paid because the placement did not occur. Dame Philippa stated that the terms for the resumed engagement would need to be discussed with Kensington Partners, including whether additional fees would be required for the extended search or whether the remaining placement tranche would cover the resumed effort.

Ms. Farrow confirmed that she would engage with Antonia Blythe at Kensington Partners as soon as the termination letter to Hargrove & Liddell had been delivered. As a first step, Ms. Farrow would ask Kensington Partners to assess whether the two other candidates from the May 22, 2024 shortlist remain available and interested in the CEO role. If either or both candidates remain viable, this could significantly accelerate the timeline for the resumed search. If neither candidate is available or interested, a broader search would need to be reinitiated, which would likely extend the timeline by several months.

The discussion then turned briefly to interim CEO options:

• Extension of Sir Alistair Kemble's tenure beyond December 31, 2024. Dame Philippa indicated that she would approach Sir Alistair informally to discuss the possibility of extending his service as CEO. She noted that Sir Alistair had been planning his retirement for some time and that he might be reluctant to extend, but that the circumstances warranted an inquiry. Dame Philippa would report back to the Board on Sir Alistair's response.

• Appointment of Jonathan Briggs (CFO) as interim CEO. If Sir Alistair declines to extend his tenure, the Board would consider appointing Mr. Briggs as interim CEO. Ms. Farrow noted that Mr. Briggs has been with NTP for eleven years and has served as CFO for the past four years. He was not a candidate in the CEO search because the Board had determined that the next CEO should be an external appointment with a specific profile in digital transformation and telecom infrastructure, but there was no question about Mr. Briggs's capability to serve in an interim capacity.

Ms. Vasquez noted that Calderwood & Harkness would be available to assist with any alternative CEO engagement if the Board identifies a candidate through the resumed search, and that the firm would ensure that the lessons learned from the Harding negotiation would be incorporated into the structuring of any future offer.

7. CLOSING

Dame Philippa thanked all attendees for their participation and candor throughout the discussion. She acknowledged that the decision to terminate negotiations was a difficult one but expressed confidence that it was the right decision for the Company and its shareholders.

Dame Philippa confirmed that the formal Board resolution would be circulated by Calderwood & Harkness to all Board members for execution no later than September 12, 2024. She asked that each director review and execute the resolution promptly upon receipt.

Ms. Vasquez confirmed that Calderwood & Harkness would proceed with the preparation of the termination letter to Victoria Hargrove at Hargrove & Liddell LLP and the related correspondence to Kensington Partners. She indicated that she expected to have the termination letter ready for Ms. Whitford's review by the close of business on September 11, 2024, with delivery to Hargrove & Liddell to follow upon approval.

The call was adjourned at approximately 4:17 p.m. EDT.

DOCUMENT INFORMATION

This memorandum is a privileged and confidential attorney-client communication and attorney work product. It has been prepared by Calderwood & Harkness LLP at the direction of counsel and is intended solely for the use of the individuals identified in the distribution list above. Any unauthorized review, use, disclosure, or distribution of this memorandum is strictly prohibited. If you have received this document in error, please contact James Underwood at Calderwood & Harkness LLP immediately at (212) 555-0147.

Matter:	Northgate Telecommunications PLC — CEO Employment Negotiation
Matter Number:	1022-00004
Prepared by:	James Underwood, Associate, Calderwood & Harkness LLP
Date of Call:	September 10, 2024
Time of Call:	3:00 p.m. EDT / 8:00 p.m. BST
Format:	Teleconference
Rank	Shareholder	Approximate Holding (%)	Approximate Shares (millions)
1	Caledonian Asset Management	8.3%	~58.0M
2	Pemberton Capital Group	6.7%	~46.8M
3	Thornbury Investment Trust	5.1%	~35.6M
4	Regis Global Equity Fund	4.4%	~30.8M
5	Atlas Pension Fund (NTP employee pension)	3.2%	~22.4M
Prepared by:	James Underwood, Associate

Calderwood & Harkness LLP

299 Park Avenue, 42nd Floor

New York, NY 10171

Date of Preparation:	September 10, 2024
Distribution:	Renata Vasquez, Partner, Calderwood & Harkness LLP

Elaine Whitford, SVP & Group General Counsel, Northgate Telecommunications PLC

(For the file — no further distribution without prior authorization)

Privilege Designation:	Attorney-Client Privileged and Confidential; Attorney Work Product
Matter:	1022-00004 — Northgate Telecommunications PLC — CEO Employment Negotiation

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT
CALL NOTES
Board Call — September 10, 2024
These notes are prepared by outside counsel and are protected by the attorney-client privilege and the work product doctrine. They are intended solely for the use of the individuals to whom they are addressed and should not be forwarded, copied, or disclosed to any third party without the prior written consent of Calderwood & Harkness LLP and the General Counsel of Northgate Telecommunications PLC.
ATTENDEES
The following individuals participated in the call:
• Dame Philippa Thornton-Hale — Chair of the Board, Northgate Telecommunications PLC (joining from London)
• Geoffrey Stanton — Lead Independent Director; Chair, Remuneration Committee, Northgate Telecommunications PLC (joining from New York)
• Lucinda Farrow — Non-Executive Director; Chair, Nomination Committee, Northgate Telecommunications PLC
• Dr. Tomás Herrera — Non-Executive Director; Remuneration Committee member, Northgate Telecommunications PLC
• Elaine Whitford — Senior Vice President & Group General Counsel, Northgate Telecommunications PLC (joining from 600 Lexington Avenue, 38th Floor, New York, NY 10022)
• Renata Vasquez — Partner, Calderwood & Harkness LLP (joining from 299 Park Avenue, 42nd Floor, New York, NY 10171)
Note: Sir Alistair Kemble (outgoing Chief Executive Officer), Jonathan Briggs (Chief Financial Officer), and Priya Narayanan (Chief People Officer) were not on the call. Participation was limited to Non-Executive Directors, General Counsel, and outside counsel in order to preserve privilege and to ensure that the discussion remained within the scope of Non-Executive Director oversight of the CEO employment negotiation.
1. CALL TO ORDER AND PURPOSE
Dame Philippa Thornton-Hale called the meeting to order at approximately 3:02 p.m. EDT. She confirmed that all expected attendees were present on the line and thanked each participant for making themselves available on relatively short notice.
Dame Philippa stated the purpose of the call: to discuss the rejection by Marcus Elliot Harding, through his counsel Victoria Hargrove of Hargrove & Liddell LLP, of Northgate Telecommunications PLC's ("NTP" or the "Company") final compromise proposal dated September 3, 2024, and to determine the Board's direction on whether to continue or terminate negotiations for the Chief Executive Officer employment agreement with Mr. Harding.
Dame Philippa noted that the rejection was received via email from Victoria Hargrove to Renata Vasquez on September 9, 2024, at approximately 4:47 p.m. EDT. The email had been promptly forwarded by Ms. Vasquez to Ms. Whitford, and from Ms. Whitford to each of the Non-Executive Directors on the call, on the evening of September 9, 2024. Dame Philippa confirmed that all directors present had reviewed the email prior to the call.
Dame Philippa confirmed that a quorum of Non-Executive Directors was present for purposes of this discussion. She reminded participants that the call was privileged and confidential and asked that no notes or recordings be made by any participant other than Calderwood & Harkness LLP, which was preparing a memorandum for the file.
2. SUMMARY OF REJECTION — PRESENTED BY RENATA VASQUEZ
Dame Philippa asked Renata Vasquez to provide the Board with a comprehensive summary of the current posture of negotiations, including the content of Ms. Hargrove's rejection and Calderwood & Harkness's assessment of the path forward.
2.1 Background and Timeline Recap
Ms. Vasquez provided a brief chronological recap of the negotiation history for the benefit of the full group, noting that while each of the directors had been involved at various points, it was useful to have the complete timeline on the record.
Ms. Vasquez outlined the following key dates and milestones:
• June 4, 2024: The engagement with Marcus Elliot Harding was formally opened following the Board's selection of Mr. Harding as the preferred candidate for the CEO position, based on the recommendation of the Nomination Committee and the search process conducted by Kensington Partners Ltd.
• June 10, 2024: An initial term sheet was circulated by Calderwood & Harkness to Victoria Hargrove at Hargrove & Liddell LLP, setting forth the principal economic and governance terms proposed by NTP for the CEO employment.
• June 24 through July 19, 2024: Five rounds of term-sheet negotiation calls were held between the parties. These calls involved, at various points, Ms. Vasquez, Ms. Whitford, and Ms. Hargrove, with periodic check-ins with Dame Philippa and Mr. Stanton as needed to obtain Board-level guidance on commercial terms. Significant progress was made during this period on the basic compensation structure, but meaningful gaps remained on change in control protections, severance, and restrictive covenants.
• July 22, 2024: Draft 1 of the Executive Employment Agreement was circulated by Calderwood & Harkness to Hargrove & Liddell. This was a comprehensive long-form agreement reflecting the areas of agreement from the term-sheet negotiations and bracketing the open issues for further discussion.
• August 5, 2024: Hargrove & Liddell returned a redline of Draft 1 with eighty-eight (88) comments. Ms. Vasquez noted that the volume and substance of the comments indicated that Mr. Harding and his counsel had significant concerns across multiple provisions, including the change in control definition, severance provisions, equity treatment, clawback, indemnification, and restrictive covenants.
• August 12, 2024: Draft 2 of the Executive Employment Agreement was circulated by Calderwood & Harkness to Hargrove & Liddell, reflecting NTP's responses to the 88 comments and incorporating certain concessions authorized by the Board.
• August 19, 2024: Hargrove & Liddell returned a redline of Draft 2 with forty-two (42) remaining comments. While the number of open issues had been reduced by more than half, the remaining 42 comments included several issues that Ms. Vasquez characterized as "high-priority" or "deal-critical" on Harding's side.
• August 26, 2024: An in-person principals meeting was held at 600 Lexington Avenue, New York, attended by Dame Philippa Thornton-Hale, Geoffrey Stanton, Elaine Whitford, and Renata Vasquez on behalf of Northgate, and by Marcus Elliot Harding and Victoria Hargrove on behalf of the candidate. The purpose of this meeting was to attempt to resolve the remaining open issues at the principal level. Ms. Vasquez reported that the meeting lasted approximately three hours and that the parties were able to narrow the open issues to a small number of core disagreements, but that an impasse was acknowledged by both sides at the conclusion of the meeting. Mr. Harding characterized his remaining positions as "non-negotiable" at that time.
• August 30, 2024: Elaine Whitford communicated to Renata Vasquez the Board's authorization to transmit a final compromise proposal to Hargrove & Liddell, reflecting the maximum concessions the Board was prepared to make.
• September 3, 2024: The final compromise proposal, styled as "Term Sheet v5-Final," was transmitted by Calderwood & Harkness to Hargrove & Liddell, per the Board's authorization.
• September 9, 2024: Victoria Hargrove communicated, via email to Renata Vasquez, that Mr. Harding was unable to accept NTP's final proposal.
2.2 Content of Hargrove's Rejection (September 9, 2024)
Ms. Vasquez then turned to the substance of the September 9 rejection email from Victoria Hargrove. Ms. Vasquez stated that she would summarize the key elements and that the full text of the email had been previously circulated to all attendees.
Victoria Hargrove communicated on behalf of Mr. Harding that his minimum requirements are "non-negotiable" and that he was unable to accept Northgate's final proposal as submitted. Ms. Hargrove expressed Mr. Harding's regret that the parties could not reach agreement and noted that Mr. Harding held the Northgate Board in high regard and appreciated the seriousness with which the Board had approached the process.
Ms. Vasquez identified three specific deal-breakers stated by Ms. Hargrove in the rejection:
1. Change in Control Severance Multiplier.
Mr. Harding insists on a change in control severance multiplier of three times (3x) the sum of base salary and target annual bonus. Based on the agreed compensation parameters (base salary of $1,750,000 and target annual bonus of $3,062,500, for a combined base-plus-target-bonus amount of $4,812,500), Mr. Harding's demanded CIC severance payment would total $14,437,500.
NTP's final offer, as set forth in Term Sheet v5-Final, was a CIC severance multiplier of two and one-half times (2.5x), which would result in a CIC severance payment of $12,031,250.
The gap between the two positions is $2,406,250. Ms. Vasquez noted that this is a significant dollar amount but that the issue had broader governance and proxy advisory implications beyond the pure dollar difference, which Mr. Stanton would address later in the call.
2. Section 280G Tax Treatment.
Mr. Harding insists on a full tax gross-up for any excise tax imposed under Section 4999 of the Internal Revenue Code on excess parachute payments (as defined under Section 280G of the Internal Revenue Code). Under this provision, if a change in control triggering event were to occur and Mr. Harding's total parachute payments exceeded the safe harbor threshold, NTP would be obligated to "gross up" Mr. Harding's compensation so that he would be in the same after-tax position as if no excise tax had been imposed.
NTP's final offer was a "best-net" safe harbor cutback with no gross-up. Under this approach, if Mr. Harding's parachute payments would exceed the safe harbor threshold, the payments would be reduced (cut back) to the safe harbor amount, but only if such cutback would result in a greater after-tax benefit to Mr. Harding than receiving the full payments and bearing the excise tax.
Ms. Vasquez then summarized the preliminary Section 280G analysis prepared by Whitmore Hobson LLP (tax counsel), which had been circulated to the Board in connection with the August 26 principals meeting:
• Base Amount: $7,840,000, calculated as the average of Mr. Harding's W-2 compensation from Marlowe Asset Management Digital Holdings, Inc. for taxable years 2019 through 2023.
• Safe Harbor Limit (3x Base Amount less $1): $23,519,999.
• Estimated Total Parachute Payments under Harding's Proposal: Approximately $38,200,000. This estimate includes CIC severance, accelerated vesting of equity awards, continuation of benefits, and other payments that would be contingent on a change in control.
• Excess Parachute Payment: $30,360,000 (i.e., total parachute payments of $38,200,000 less the base amount of $7,840,000).
• Estimated 20% Excise Tax on Excess Parachute Payment: $6,072,000.
• Estimated Gross-Up Exposure to NTP: $4,200,000 to $6,800,000, depending on the precise calculation of parachute payments and the applicable marginal income tax rates at the time of the triggering event. The range reflects uncertainty in certain assumptions regarding the timing and characterization of equity acceleration and other contingent payments.
Ms. Vasquez emphasized that the gross-up exposure represents a potentially significant incremental cost to the Company that would provide no retention or performance benefit — it is a pure tax indemnity.
3. Change in Control Definition — Board Turnover Trigger.
Mr. Harding demands the inclusion of a provision in the employment agreement that would treat the replacement of a majority of the members of the NTP Board of Directors within any twelve-month (12-month) period as a "change in control" event, thereby triggering all change in control protections (including the severance multiplier, equity acceleration, and other CIC benefits).
NTP has consistently refused this provision throughout the negotiation. Ms. Vasquez noted that the NTP Board's position has been that the change in control definition should be limited to (a) acquisition of more than 50% of the outstanding voting securities by a third party, (b) consummation of a merger or consolidation in which NTP is not the surviving entity or in which NTP shareholders do not retain a majority of the voting power of the surviving entity, and (c) a sale of all or substantially all of the Company's assets. The Board has declined to include any board turnover trigger, whether a 12-month or a 24-month formulation.
Additionally, on Restrictive Covenants:
Ms. Vasquez reported that the parties also remain apart on the terms of the post-termination non-competition covenant, though Ms. Hargrove did not characterize the non-compete terms as a "deal-breaker" in her September 9 email. For completeness, Ms. Vasquez summarized the remaining gap:
• Harding's Position: A twelve-month (12-month) non-compete with geographic scope limited to North America and Western Europe, restricted to a schedule of eight (8) named direct competitors (to be set forth on a schedule to the employment agreement), with twelve-month (12-month) garden leave at full compensation (base salary plus pro-rata annual bonus) running concurrently with the non-compete period.
• NTP's Final Offer (Term Sheet v5-Final): An eighteen-month (18-month) non-compete covering North America and Western Europe (conceded from the original proposed worldwide scope), with an activity-based restriction prohibiting employment by or service to any company deriving more than fifteen percent (15%) of its revenue from telecommunications infrastructure, managed network services, or software-as-a-service platforms, with six-month (6-month) garden leave at base salary only.
Ms. Vasquez noted that this non-compete gap remained significant but that it had not been identified by Ms. Hargrove as one of the issues that was "non-negotiable."
In closing her summary of the rejection, Ms. Vasquez noted that Ms. Hargrove's email expressed regret that the parties could not reach agreement and offered to discuss any final thoughts the Northgate Board might have. Ms. Vasquez characterized this language as a courtesy close rather than a meaningful invitation to further negotiation, given the "non-negotiable" characterization of Mr. Harding's positions.
2.3 Vasquez's Assessment
Ms. Vasquez then provided Calderwood & Harkness's assessment of the current posture and the prospects for continued negotiation.
Ms. Vasquez stated that it is Calderwood & Harkness's assessment that no further negotiation is likely to be productive. She based this assessment on the following observations:
First, Mr. Harding has characterized his positions on the three core deal-breaker issues as "non-negotiable." This is the same language he used at the August 26 in-person principals meeting. The September 9 email from Ms. Hargrove confirms that Mr. Harding's position has not moved since that meeting.
Second, there has been no movement whatsoever on Mr. Harding's side since the August 26 principals meeting, despite the fact that NTP made additional concessions in the September 3 final compromise proposal. Those concessions included (a) the reduction of the non-compete geographic scope from worldwide to North America and Western Europe, (b) a narrower activity-based restriction (raising the revenue threshold from 10% to 15%), and (c) certain enhancements to the equity award terms that were reflected in Term Sheet v5-Final. Mr. Harding has given no corresponding concessions.
Third, in Ms. Vasquez's experience, when a candidate at this level uses "non-negotiable" language twice — once in person and once through counsel — that language should be taken at face value. The risk of further concession by NTP without any reciprocal movement is that the Company would be negotiating against itself.
Ms. Vasquez recommended that the Board formally resolve to terminate negotiations with Mr. Harding and direct outside counsel to prepare and deliver a termination letter to Hargrove & Liddell LLP.
3. ISS AND SHAREHOLDER CONCERNS — PRESENTED BY GEOFFREY STANTON
Dame Philippa then asked Geoffrey Stanton, as Chair of the Remuneration Committee, to share the governance and shareholder-related analysis that had informed the Committee's perspective throughout the negotiation.
3.1 Veltrano Proxy Advisors Analysis
Mr. Stanton reported on the analysis provided by Sandra Kolb of Veltrano Proxy Advisors, Inc. ("Veltrano"), which had been retained by NTP earlier in the negotiation process to assess shareholder sensitivity to the quantum and structure of the proposed CEO compensation package and, in particular, to the change in control provisions under discussion.
Mr. Stanton noted that Veltrano had provided an informal, non-public assessment of the likely reaction of the principal proxy advisory firms — Thackeray Health IT ("ISS") and Westmark Solutions ("Tarrant Partners LLC") — to the key terms of Mr. Harding's demanded package. Veltrano's analysis was based on current ISS and Tarrant Partners LLC policy guidelines and was provided in a confidential memorandum dated August 21, 2024.
Veltrano's informal read on the likely ISS and Tarrant Partners LLC reaction to Mr. Harding's demanded package was as follows:
• A CIC severance multiplier of 3x would likely be flagged as a concern under ISS policy. While ISS generally treats CIC severance exceeding 3x as clearly problematic, even a multiplier at the 3x level is viewed as at the upper boundary of acceptable practice and is scrutinized closely, particularly in the context of other change in control protections.
• A full Section 280G tax gross-up is deemed "problematic" under current ISS policy guidelines. ISS has consistently taken the position that excise tax gross-ups are a disfavored practice, and the presence of a full gross-up is treated as a significant negative factor in ISS's evaluation of executive compensation programs. Tarrant Partners LLC maintains a similar position.
• The combination of a 3x CIC severance multiplier together with a full Section 280G gross-up would very likely trigger a negative say-on-pay recommendation from ISS. Mr. Stanton noted that, in Veltrano's assessment, the probability of a negative ISS recommendation under these circumstances was "high" and that Tarrant Partners LLC would likely follow suit.
Veltrano's recommendation to NTP was to cap CIC severance at no more than 2.99x (i.e., below the 3x threshold) and to adopt a best-net cutback approach with no gross-up, in order to minimize the risk of a negative say-on-pay recommendation.
3.2 Say-on-Pay Vote History and 2025 AGM Exposure
Mr. Stanton reminded the Board of NTP's recent say-on-pay voting history. At the April 18, 2024 Annual General Meeting, NTP received 87.4% support on its advisory say-on-pay resolution. While this level of support is generally considered adequate, it represents a decline from prior years and leaves relatively limited room for deterioration.
Mr. Stanton noted that any new CEO compensation package will be subject to a binding remuneration policy vote at the 2025 Annual General Meeting, as required under UK listing rules and the Companies Act 2006. Unlike the advisory say-on-pay votes under U.S. SEC rules, the UK remuneration policy vote is binding, meaning that if shareholders do not approve the policy, the Company would be required to continue operating under the existing remuneration policy until a revised policy is approved.
Mr. Stanton expressed his strong view that accepting Mr. Harding's terms — including a 3x CIC multiplier and full Section 280G gross-up — would put the remuneration policy vote at serious risk. A failed or narrowly passed remuneration policy vote would not only constrain the Company's ability to compensate its new CEO as agreed, but would also potentially damage the Board's credibility with institutional shareholders and the broader investment community. He characterized this as a risk that the Board could not responsibly accept.
3.3 Institutional Shareholder Landscape
Mr. Stanton then led a discussion of NTP's principal institutional shareholders and their likely reaction to the key terms at issue.
NTP's top five institutional shareholders, based on the most recent available filings, are as follows:
Mr. Stanton noted that several of these institutional holders have publicly stated governance policies opposing excise tax gross-ups and excessive change in control severance multiples. In particular, Caledonian Asset Management and Thornbury Investment Trust have published proxy voting guidelines that specifically identify full excise tax gross-ups as a factor that will generally lead to a vote against a company's remuneration policy or say-on-pay resolution. Pemberton Capital Group has adopted a policy of generally supporting ISS recommendations on compensation matters, which effectively means that a negative ISS recommendation would likely result in a "no" vote from Pemberton.
Mr. Stanton also highlighted the particular sensitivity associated with the Atlas Pension Fund. As the NTP employee pension trust, Atlas holds shares on behalf of current and former NTP employees. A generous CEO compensation package that includes provisions viewed as excessive or shareholder-unfriendly would create reputational risk for the Atlas Pension Fund's trustees and could become a source of internal friction within the Company. Mr. Stanton noted that the Atlas Pension Fund's voting policy generally follows the recommendations of its external governance advisor, which in turn tends to align with ISS and Tarrant Partners LLC positions on compensation matters.
3.4 UK Corporate Governance Code Constraints
The discussion then turned to the constraints imposed by the UK Corporate Governance Code.
Mr. Stanton referenced the UK Corporate Governance Code 2024, Provision 40, which provides that notice periods for executive directors should be set at twelve months or less. While Provision 40 addresses notice periods rather than CIC severance directly, the underlying principle — that executive compensation arrangements should not provide for excessive payouts that are disconnected from performance — applies broadly to severance and change in control protections.
Mr. Stanton observed that a CIC severance of 3x base plus target bonus significantly exceeds market practice for UK-listed companies. He noted that the market norm for UK-listed companies is a CIC severance multiplier in the range of 1x to 2x, and that even 2.5x (NTP's final offer) represented a significant stretch from UK market norms that the Remuneration Committee had agreed to only as a concession to U.S. market expectations, given Mr. Harding's background and the competitive dynamics of recruiting a U.S.-based CEO for a UK-listed company.
The Board has a duty to demonstrate compliance with the Code on a "comply or explain" basis. Mr. Stanton stated that explaining a 3x CIC multiplier with a full Section 280G gross-up in the Annual Report's remuneration section would be extremely difficult and would invite scrutiny from institutional shareholders, proxy advisory firms, and the financial press. He expressed the view that the explanation would not be credible and would be perceived as a failure of governance.
4. BOARD DISCUSSION
Dame Philippa then opened the floor for a broader discussion among the Board members and counsel present.
4.1 Dame Philippa Thornton-Hale — Chair's Perspective
Dame Philippa acknowledged her deep disappointment that negotiations with Mr. Harding had not succeeded. She stated that Mr. Harding was the Board's unanimous first choice for the CEO role, identified through a rigorous and comprehensive search process conducted by Kensington Partners Ltd. under the leadership of Antonia Blythe, Managing Director. The search had been extensive, commencing in early 2024 and involving the evaluation of more than forty prospective candidates before the final shortlist of three was presented to the Board on May 22, 2024.
However, Dame Philippa stated that the Board cannot agree to terms that would jeopardize shareholder support and corporate governance credibility. The Board's obligation to shareholders and to the integrity of the Company's governance framework must take precedence over the desire to secure any individual candidate, regardless of how well-qualified that candidate may be.
Dame Philippa noted that the compensation package offered to Mr. Harding was already generous by any reasonable measure. The proposed total target annual compensation of $13,812,500 — consisting of a base salary of $1,750,000, a target annual bonus of $3,062,500 (175% of base salary), and an annual long-term incentive award with a grant-date target value of $9,000,000 — represented a significant step up from Sir Alistair Kemble's existing package and reflected the Board's recognition of the need to compete for talent in the U.S. market.
Moreover, the sign-on package was specifically designed to make Mr. Harding substantially whole for the equity compensation he would forfeit upon departure from Marlowe Asset Management Digital Holdings, Inc. The sign-on package consisted of a cash signing bonus of $5,000,000 and a sign-on equity award with a grant-date value of $18,400,000, for a total make-whole value of $23,400,000. This total was calibrated to the estimated forfeiture value of Mr. Harding's unvested Marlowe Asset Management equity, which had been estimated at approximately $23,400,000 based on information provided by Hargrove & Liddell during the negotiation.
Dame Philippa expressed her view that the Board had gone as far as it responsibly could in seeking to accommodate Mr. Harding's demands. The final compromise proposal reflected meaningful concessions by NTP across multiple dimensions, including the CIC severance multiplier (increased from the initial offer of 2x to 2.5x), the non-compete scope (reduced from worldwide to North America and Western Europe), the activity-based restriction (narrowed to a 15% revenue threshold), and the equity award terms. The Board could not, in good conscience, make further concessions on the three issues Mr. Harding had identified as non-negotiable.
4.2 Geoffrey Stanton — Remuneration Committee Chair's View
Mr. Stanton stated unequivocally that the Remuneration Committee cannot recommend a package containing a full Section 280G tax gross-up. He characterized the gross-up as the single most problematic element of Mr. Harding's demands, both from a governance perspective and from a shareholder relations perspective.
Mr. Stanton elaborated on the economics of the gross-up. The estimated gross-up cost of $4.2 million to $6.8 million represents a pure windfall to the executive that provides no retention or performance benefit to the Company. The gross-up is payable only upon a change in control — an event that, by definition, occurs after the executive's services to the Company have either ended or are about to end. It does not incentivize the executive to remain with the Company, to perform at a higher level, or to create value for shareholders. It is, in essence, a tax indemnity that transfers the cost of a tax penalty from the executive to the Company.
Mr. Stanton reported that Whitmore Hobson LLP, the Company's outside tax counsel, had confirmed through its "best-net" analysis that Mr. Harding's after-tax position under the cutback approach versus the full payment plus excise tax approach was roughly equivalent, with the cutback approach actually slightly favored in most scenarios. Dr. Rachel Whitmore of Whitmore Hobson LLP had concluded that the gross-up demand was "largely a matter of principle and optics" rather than economic substance — meaning that Mr. Harding would not be materially worse off under the cutback approach, but was insisting on the gross-up as a point of principle.
On the board turnover trigger within the change in control definition, Mr. Stanton expressed the view that this provision was overreach and inconsistent with UK corporate governance norms. A provision that treats the replacement of a majority of directors within a 12-month period as a change in control could be triggered by normal Board refreshment — for example, in connection with a planned succession or rotation of non-executive directors, or following an AGM at which shareholders vote to replace multiple directors. This would create a perverse incentive structure in which the CEO's change in control protections could be activated without any actual change in ownership or control of the Company.
Mr. Stanton recommended that the Board terminate negotiations with Mr. Harding.
4.3 Lucinda Farrow — Nomination Committee Chair's View
Lucinda Farrow expressed concern about the timeline for Sir Alistair Kemble's retirement. Sir Alistair has communicated his intention to retire as CEO effective December 31, 2024, and the Board has publicly announced a CEO transition process. The failure of negotiations with Mr. Harding means that, as of the date of this call, the Company does not have a successor identified, and fewer than four months remain before the planned transition date.
However, Ms. Farrow agreed that accepting Mr. Harding's terms would set a problematic precedent for the Company. She noted that the terms demanded by Mr. Harding — particularly the full Section 280G gross-up and the 3x CIC multiplier — would not only create immediate governance challenges but would also establish a benchmark for future CEO and senior executive negotiations that the Remuneration Committee would find difficult to walk back. Once a precedent is set at this level, subsequent candidates and internal executives would be likely to demand similar or comparable terms.
Ms. Farrow suggested that Kensington Partners Ltd. should be directed to resume the CEO search process immediately. She noted that the final shortlist presented by Kensington Partners on May 22, 2024 included three candidates, of whom Mr. Harding was selected as the preferred candidate. The other two candidates on the shortlist may potentially remain available and interested, and Ms. Farrow recommended that Kensington Partners be asked to assess their current availability as a first step.
Ms. Farrow also raised the possibility of interim arrangements to manage the transition period. Two options were discussed briefly:
• Extension of Sir Alistair Kemble's tenure beyond December 31, 2024. Dame Philippa could approach Sir Alistair informally to inquire whether he would be willing to extend his service as CEO for a defined period — perhaps three to six months — to allow additional time for the search to be completed.
• Appointment of an internal interim CEO. If Sir Alistair is unwilling or unable to extend his tenure, the Board could consider appointing Jonathan Briggs, the current Chief Financial Officer, as interim CEO during the search period. Mr. Briggs has deep institutional knowledge, a strong relationship with the Board and the senior leadership team, and the operational capability to serve in an interim capacity.
4.4 Dr. Tomás Herrera
Dr. Herrera concurred with Mr. Stanton's analysis on the governance and proxy advisory concerns. He stated that the Veltrano analysis, taken together with the Whitmore Hobson tax analysis, provided a clear and well-supported basis for the Board's conclusion that it could not accept Mr. Harding's terms.
Dr. Herrera noted that Mr. Harding's expectation of a 3x CIC severance multiplier with full vesting acceleration and a full Section 280G gross-up is explained, at least in part, by the fact that his current employment agreement with Marlowe Asset Management Digital Holdings, Inc. includes precisely these provisions. Marlowe Asset Management is a privately held U.S. company that is not subject to the same governance constraints as a UK-listed public company. It was understandable, from Mr. Harding's perspective, that he would seek to replicate the protections he currently enjoys. However, NTP operates under a fundamentally different governance framework — one that includes binding shareholder approval of remuneration policy, compliance with the UK Corporate Governance Code on a comply-or-explain basis, and scrutiny from institutional shareholders and proxy advisory firms that apply UK governance standards.
Dr. Herrera stated that, in his view, termination of negotiations is the appropriate course of action.
4.5 Elaine Whitford — General Counsel's Observations
Ms. Whitford provided several observations from a legal and practical perspective.
First, Ms. Whitford confirmed that NTP has no legal obligation to continue negotiations with Mr. Harding. No definitive employment agreement was executed, and no binding commitment was made by either party. The negotiations were conducted on a non-binding basis, and the term sheets and draft agreements exchanged during the process were expressly marked as subject to Board approval and execution of a definitive agreement. There is no basis for any claim by Mr. Harding that NTP is obligated to continue negotiating or to accept any particular terms.
Second, Ms. Whitford noted that the confidentiality obligations under the mutual non-disclosure agreement signed by Mr. Harding and NTP during the search process will survive the termination of negotiations. The NDA contains customary provisions requiring both parties to maintain the confidentiality of all information exchanged during the search and negotiation process, including the existence and terms of the negotiations, for a period of two years following the termination of discussions. Ms. Whitford recommended that the termination letter to Hargrove & Liddell include a reminder of these ongoing confidentiality obligations.
Third, Ms. Whitford raised the question of public disclosure. She noted that, in her assessment, there is no obligation to disclose the failed negotiation under SEC rules, NYSE listing standards, or FCA rules. No definitive agreement was executed, and no material commitment was made by NTP. The negotiation itself does not constitute a material event requiring disclosure. Ms. Vasquez concurred with this assessment, adding that the Company should exercise caution to ensure that no selective disclosure occurs and that the Board's communications regarding the CEO search remain consistent with prior public statements.
Ms. Whitford recommended that Ms. Vasquez prepare a formal termination letter to Hargrove & Liddell LLP, as well as a notification to Kensington Partners Ltd. regarding the resumption of the search process.
5. BOARD DIRECTION — UNANIMOUS DECISION
Following the discussion, Dame Philippa asked each Non-Executive Director present for their view on whether the Board should terminate negotiations with Mr. Harding.
The poll was conducted as follows:
• Geoffrey Stanton: Terminate.
• Lucinda Farrow: Terminate.
• Dr. Tomás Herrera: Terminate.
• Dame Philippa Thornton-Hale: Terminate.
The Board unanimously directed the termination of negotiations with Marcus Elliot Harding for the position of Chief Executive Officer of Northgate Telecommunications PLC.
Dame Philippa directed that a formal written Board resolution memorializing this decision be prepared and circulated to all Board members for adoption no later than September 12, 2024.
Dame Philippa further directed Elaine Whitford and Renata Vasquez to take the following actions:
1. Prepare and deliver a formal termination letter to Victoria Hargrove at Hargrove & Liddell LLP (51 Madison Avenue, 30th Floor, New York, NY 10010), confirming the Board's decision to terminate negotiations. The letter should be professional and courteous in tone and should not characterize the reasons for termination in a manner that could be perceived as critical of Mr. Harding personally.
2. Include in the termination letter a request for the return or destruction of all confidential materials provided to Mr. Harding and his counsel during the negotiation process, together with a reminder of the ongoing confidentiality obligations under the mutual NDA.
3. Notify Antonia Blythe at Kensington Partners Ltd. that the Board has directed the resumption of the CEO search process and that Kensington Partners should prepare to re-engage on an expedited basis.
4. Prepare guidance on public disclosure and non-disclosure of the failed negotiation, including talking points for any internal or external inquiries regarding the status of the CEO search.
5. Assess interim CEO arrangements pending completion of the resumed search, including the feasibility of an extension of Sir Alistair Kemble's tenure and the potential appointment of Jonathan Briggs as interim CEO.
6. SEARCH AND SUCCESSION — NEXT STEPS DISCUSSION
Dame Philippa asked Lucinda Farrow, as Chair of the Nomination Committee, to take the lead in coordinating with Kensington Partners on the resumption of the search.
Dame Philippa noted that the fee arrangement with Kensington Partners is structured as a total engagement fee of £1,200,000, payable in three tranches: one-third (£400,000) on retainer, one-third (£400,000) upon delivery of the final shortlist, and one-third (£400,000) upon successful placement. The first two tranches had been paid, but the third tranche was never paid because the placement did not occur. Dame Philippa stated that the terms for the resumed engagement would need to be discussed with Kensington Partners, including whether additional fees would be required for the extended search or whether the remaining placement tranche would cover the resumed effort.
Ms. Farrow confirmed that she would engage with Antonia Blythe at Kensington Partners as soon as the termination letter to Hargrove & Liddell had been delivered. As a first step, Ms. Farrow would ask Kensington Partners to assess whether the two other candidates from the May 22, 2024 shortlist remain available and interested in the CEO role. If either or both candidates remain viable, this could significantly accelerate the timeline for the resumed search. If neither candidate is available or interested, a broader search would need to be reinitiated, which would likely extend the timeline by several months.
The discussion then turned briefly to interim CEO options:
• Extension of Sir Alistair Kemble's tenure beyond December 31, 2024. Dame Philippa indicated that she would approach Sir Alistair informally to discuss the possibility of extending his service as CEO. She noted that Sir Alistair had been planning his retirement for some time and that he might be reluctant to extend, but that the circumstances warranted an inquiry. Dame Philippa would report back to the Board on Sir Alistair's response.
• Appointment of Jonathan Briggs (CFO) as interim CEO. If Sir Alistair declines to extend his tenure, the Board would consider appointing Mr. Briggs as interim CEO. Ms. Farrow noted that Mr. Briggs has been with NTP for eleven years and has served as CFO for the past four years. He was not a candidate in the CEO search because the Board had determined that the next CEO should be an external appointment with a specific profile in digital transformation and telecom infrastructure, but there was no question about Mr. Briggs's capability to serve in an interim capacity.
Ms. Vasquez noted that Calderwood & Harkness would be available to assist with any alternative CEO engagement if the Board identifies a candidate through the resumed search, and that the firm would ensure that the lessons learned from the Harding negotiation would be incorporated into the structuring of any future offer.
7. CLOSING
Dame Philippa thanked all attendees for their participation and candor throughout the discussion. She acknowledged that the decision to terminate negotiations was a difficult one but expressed confidence that it was the right decision for the Company and its shareholders.
Dame Philippa confirmed that the formal Board resolution would be circulated by Calderwood & Harkness to all Board members for execution no later than September 12, 2024. She asked that each director review and execute the resolution promptly upon receipt.
Ms. Vasquez confirmed that Calderwood & Harkness would proceed with the preparation of the termination letter to Victoria Hargrove at Hargrove & Liddell LLP and the related correspondence to Kensington Partners. She indicated that she expected to have the termination letter ready for Ms. Whitford's review by the close of business on September 11, 2024, with delivery to Hargrove & Liddell to follow upon approval.
The call was adjourned at approximately 4:17 p.m. EDT.
DOCUMENT INFORMATION
This memorandum is a privileged and confidential attorney-client communication and attorney work product. It has been prepared by Calderwood & Harkness LLP at the direction of counsel and is intended solely for the use of the individuals identified in the distribution list above. Any unauthorized review, use, disclosure, or distribution of this memorandum is strictly prohibited. If you have received this document in error, please contact James Underwood at Calderwood & Harkness LLP immediately at (212) 555-0147.
Matter: | Northgate Telecommunications PLC — CEO Employment Negotiation
Matter Number: | 1022-00004
Prepared by: | James Underwood, Associate, Calderwood & Harkness LLP
Date of Call: | September 10, 2024
Time of Call: | 3:00 p.m. EDT / 8:00 p.m. BST
Format: | Teleconference
Rank | Shareholder | Approximate Holding (%) | Approximate Shares (millions)
1 | Caledonian Asset Management | 8.3% | ~58.0M
2 | Pemberton Capital Group | 6.7% | ~46.8M
3 | Thornbury Investment Trust | 5.1% | ~35.6M
4 | Regis Global Equity Fund | 4.4% | ~30.8M
5 | Atlas Pension Fund (NTP employee pension) | 3.2% | ~22.4M
Prepared by: | James Underwood, Associate
Calderwood & Harkness LLP
299 Park Avenue, 42nd Floor
New York, NY 10171
Date of Preparation: | September 10, 2024
Distribution: | Renata Vasquez, Partner, Calderwood & Harkness LLP
Elaine Whitford, SVP & Group General Counsel, Northgate Telecommunications PLC
(For the file — no further distribution without prior authorization)
Privilege Designation: | Attorney-Client Privileged and Confidential; Attorney Work Product
Matter: | 1022-00004 — Northgate Telecommunications PLC — CEO Employment Negotiation

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