Elaine,
Following the Board's resolution of September 12 authorizing the termination of negotiations with Marcus Elliot Harding and the delivery of our formal termination letter to Victoria Hargrove at Hargrove & Liddell LLP that same day, I wanted to address the question you raised regarding whether Northgate has any obligation to publicly disclose the failed CEO negotiation. As you know, matter 1022-00004 is now closed, but this guidance follows naturally from the engagement and I wanted to get it to you promptly.
**Bottom Line**
Northgate has no obligation to publicly disclose the termination of negotiations with Harding under any applicable regulatory regime — SEC rules, NYSE listing requirements, FCA disclosure obligations, or London Stock Exchange continuing obligations. No definitive agreement was ever executed, no material commitment was made, and no Form 8-K triggering event occurred. There is no corresponding obligation under UK MAR. My recommendation is that no affirmative disclosure be made, though I have outlined several practical steps below.
I'll walk through the analysis by regulatory framework.
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**I. SEC / U.S. Securities Law**
*Form 8-K — Item 5.02 (Departure/Appointment of Principal Officers)*
Item 5.02 requires disclosure of the departure of principal officers and the appointment of principal officers. Here, there was no appointment. Harding was never hired, and no employment agreement was executed. As you will recall, the parties never advanced beyond Draft 2 of the employment agreement, which still carried 42 unresolved comments at the time negotiations were terminated. There is simply no triggering event under Item 5.02.
*Form 8-K — Item 1.01 (Entry into a Material Definitive Agreement)*
Not triggered. No agreement — material, definitive, or otherwise — was entered into.
*Regulation FD*
There is no selective disclosure concern. The failed negotiation was not disclosed to any analyst, institutional shareholder, or market participant. All discussions were conducted under confidentiality obligations with Harding and his counsel. Importantly, none of Northgate's key institutional shareholders — Caledonian Asset Management (8.3%), Pemberton Capital Group (6.7%), Thornbury Investment Trust (5.1%), Regis Global Equity Fund (4.4%), or Atlas Pension Fund (3.2%) — were informed of Harding's identity as a candidate or the existence or status of the negotiation.
*General Materiality Analysis (Rule 10b-5)*
While CEO succession is undeniably important, the failure to reach agreement with one candidate in an ongoing search process is unlikely to constitute material information requiring disclosure under the general anti-fraud provisions. Several factors support this conclusion: (i) the CEO search is continuing — Kensington Partners has been directed to resume the search; (ii) Sir Alistair Kemble remains in office through December 31, 2024, his announced retirement date, providing continuity; and (iii) Northgate has adequate interim leadership arrangements available if needed. In the totality-of-the-mix analysis, this is a preliminary step in an ongoing process, not a discrete event that would significantly alter the information available to investors.
*NYSE Listing Requirements*
The NYSE Listed Company Manual does not require disclosure of failed executive hiring negotiations. While NYSE rules require timely disclosure of material information, for the same reasons outlined above, the termination of negotiations with a single candidate does not rise to that threshold.
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**II. FCA / UK Regulatory Framework**
*UK Market Abuse Regulation (MAR) — Article 17*
As a company listed on the London Stock Exchange (LON: NTP), Northgate is subject to the obligation to disclose inside information under Article 17 of UK MAR. The relevant question is whether the failed CEO negotiation constitutes "inside information" — that is, information that is (a) precise, (b) not publicly available, (c) relating to the issuer, and (d) likely to have a significant effect on the price of the issuer's securities if made public.
While the collapse of negotiations with a preferred CEO candidate could be of interest to the market, it is unlikely to have a "significant effect" on NTP's share price. The outgoing CEO's retirement was announced on May 15, 2024, and is already reflected in the market. No specific candidate was ever publicly identified. The search continues under a retained executive search firm. And Northgate has adequate interim leadership options. On balance, this does not meet the Article 17 threshold.
*London Stock Exchange Listing Rules / Continuing Obligations*
No specific listing rule requires disclosure of a failed executive hiring negotiation where no binding commitment was made.
One caveat: as you know, our primary advice covers the U.S.-law aspects, and the UK analysis above reflects our understanding of the framework rather than a formal UK-law opinion. If you or the Board would like a confirmatory opinion under English law, I would recommend coordinating with Simon Aldridge at Moorfield Bates LLP, and we are happy to facilitate that.
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**III. Practical Recommendations**
In light of the above, I recommend the following steps:
1. **No affirmative disclosure.** Northgate should not file a Form 8-K, issue an RNS announcement, or make any other public disclosure regarding the terminated negotiation.
2. **Holding statement.** I recommend that Northgate's communications and investor relations teams prepare a holding statement for use in the event the failed negotiation leaks to the press or to market participants. Suggested messaging along the following lines: *The Board is conducting a thorough and deliberate CEO search process and will announce a successor in due course. Sir Alistair Kemble continues to serve as CEO through the transition period.* We are happy to review draft language if that would be useful.
3. **Internal information controls.** Information about the Harding negotiation should remain closely held and limited to those who already have knowledge — Board members, you, Priya Narayanan, and key advisors. There is no need to brief the broader organization or investor relations team on the specific candidate or the circumstances of the negotiation's failure.
4. **Confidentiality obligations — Harding and Hargrove & Liddell.** The termination letter delivered to Victoria Hargrove on September 12 included a reminder of Harding's and his counsel's ongoing confidentiality obligations. We expect that Harding will have his own strong interest in keeping the failed negotiation confidential given his current position as President & COO of Marlowe Asset Management Digital Holdings.
5. **Kensington Partners.** I suggest reminding Antonia Blythe and the Kensington team of their confidentiality obligations with respect to Harding's candidacy as the search resumes. As you may be aware, James sent a letter to Blythe this morning notifying her of the termination and requesting a meeting to discuss next steps for the resumed search.
6. **Board records.** I recommend that the September 10 Board call notes and the September 12 Board resolution be maintained as privileged and confidential Board records and not included in any materials that might be subject to broader disclosure or production.
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Elaine, I'm available by phone this afternoon and Monday if you have follow-up questions, or if the Board would like us to prepare a formal written memorandum on this topic for the file. As noted, we are also happy to coordinate with Moorfield Bates if a formal UK-law opinion on the MAR analysis is desired.
This guidance is provided under the existing engagement, though with the matter now formally closed, if additional substantive work is needed on the disclosure question or related issues, we should put in place a new engagement letter or an amendment to the existing one. Happy to discuss.
Best regards,
Renata Vasquez Partner Calderwood & Harkness LLP 299 Park Avenue, 42nd Floor New York, NY 10171 T: +1 (212) 558-4000 D: +1 (212) 558-4187 rvasquez@calderwoodharkness.com
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