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

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PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 1585 Broadway, 38th Floor New York, New York 10036

Telephone: (212) 555-4800 Facsimile: (212) 555-4801

September 12, 2024

MEMORANDUM

TO: Renata Vasquez, Partner, Calderwood & Harkness LLP

FROM: James Underwood, Associate, Calderwood & Harkness LLP

RE: Post-Termination Confidentiality Obligations and Document Handling — Northgate Telecommunications PLC CEO Employment Negotiation (Matter No. 1022-00004)

CC: Devon Archer, Associate, Calderwood & Harkness LLP

I. Purpose and Background

The purpose of this memorandum is to identify and summarize the confidentiality obligations that survive the termination of negotiations between Northgate Telecommunications PLC ("Northgate," "NTP," or the "Company") and Marcus Elliot Harding ("Harding") for the position of Chief Executive Officer of the Company, and to recommend protocols for document retention, return, and destruction in connection with the closing of this matter.

As you are aware, the Board of Directors of Northgate resolved earlier today, September 12, 2024, to formally terminate negotiations with Harding following the rejection by Harding — acting through his personal legal counsel, Victoria Hargrove of Hargrove & Liddell LLP ("H&L") — of Northgate's final compromise proposal on September 9, 2024. The final compromise proposal had been transmitted to H&L under a cover letter dated September 3, 2024, and represented the culmination of extensive deliberations by the Remuneration Committee and the full Board regarding the outermost boundaries of an acceptable compensation package. Ms. Hargrove's September 9 letter communicated Harding's rejection of the proposal and indicated that no further counterproposal was forthcoming. Following receipt of the rejection, Northgate's Board convened telephonically on September 10, 2024, to discuss next steps, and on September 12, 2024, adopted a formal resolution to terminate the negotiations. Formal notification of the termination was transmitted to Hargrove & Liddell via email and overnight courier on September 12, 2024.

Our engagement in this matter, designated Matter No. 1022-00004, was opened on June 4, 2024. Calderwood & Harkness LLP ("C&H" or the "Firm") has served as outside employment counsel to Northgate throughout the negotiation process, advising the Company and its Board on the structuring, negotiation, and drafting of the proposed executive employment agreement for the CEO position. Our principal client contact has been Elaine Whitford, Senior Vice President and Group General Counsel of Northgate.

During the course of the engagement, which spanned approximately fourteen weeks from June 4 through September 12, 2024, the parties exchanged substantial volumes of confidential information. This information included five iterations of the term sheet (designated Version 1 through Version 5-Final), two full drafts of the Executive Employment Agreement together with associated redlines and blackline comparisons, detailed compensation data relating to both Harding's current employment at Marlowe Asset Management Digital Holdings, Inc. ("Marlowe Asset Management") and Northgate's proposed compensation package, financial projections and corporate governance materials of the Company, personal financial information of Mr. Harding, and extensive correspondence and negotiation memoranda. The volume and sensitivity of this information necessitate a careful and systematic approach to post-termination document handling.

This memorandum addresses the following topics in turn: (i) the sources of confidentiality obligations applicable to the exchanged information; (ii) the categories of confidential information exchanged during the negotiation; (iii) recommended document handling protocols for each category; (iv) specific risks and concerns arising from the termination; and (v) recommended next steps.

II. Sources of Confidentiality Obligations

The confidential information exchanged during the Northgate-Harding negotiation is protected by multiple, overlapping sources of obligation. Each is addressed below.

A. The Non-Disclosure / Confidentiality Agreement Between NTP and Harding

A mutual non-disclosure agreement (the "NDA") was executed between Northgate Telecommunications PLC and Marcus Elliot Harding prior to the commencement of Calderwood & Harkness's engagement, in connection with the CEO search process facilitated by Kensington Partners Ltd. ("Kensington Partners"), the executive search firm retained by Northgate's Board on March 1, 2024. The managing director of the Kensington Partners engagement team was Antonia Blythe, who served as the primary intermediary between the Company and potential candidates during the initial stages of the search process.

Based on the information available to us, the NDA was executed on or about May 28, 2024, which corresponds to the date on which the Board selected Harding as its preferred candidate from among the final slate of candidates presented by Kensington Partners. It is possible that the NDA was executed shortly thereafter rather than on May 28 itself; however, the NDA was clearly in place prior to the substantive exchange of confidential information that commenced in early June. We recommend confirming the precise execution date with Ms. Whitford and obtaining a fully executed copy for the file, as our current records contain only the substantially final form of the NDA circulated on May 27, 2024, rather than a countersigned original.

The key provisions of the NDA that bear on post-termination obligations are as follows:

Definition of "Confidential Information." The NDA defines "Confidential Information" broadly to encompass all non-public information exchanged between the parties (including their respective advisors and representatives) during the negotiation process. The definition expressly includes, without limitation, compensation terms and proposals, financial data and projections, strategic plans, Board and committee deliberations, corporate governance materials, and personal financial information of Harding. This definition is sufficiently capacious to cover substantially all of the information exchanged during the course of our engagement.

Permitted purposes. The NDA restricts the use of Confidential Information to the sole purpose of evaluating and negotiating the proposed CEO employment relationship between Northgate and Harding. With negotiations now terminated, the permitted purpose has been exhausted, and neither party retains any right to use the other's Confidential Information for any purpose, subject to the limited archival exceptions described below.

Surviving term. The NDA should contain a provision specifying the period during which confidentiality obligations survive the termination of negotiations. Market practice for NDAs of this type typically provides for a survival period of two to three years following the termination of discussions. Based on our review of the substantially final form of the NDA, the survival period appears to be two years from the date of termination. We recommend confirming this provision in the executed copy, as the survival period is a critical parameter for ongoing compliance. Assuming a termination date of September 12, 2024, and a two-year survival period, the NDA's confidentiality obligations would remain in effect through approximately September 12, 2026.

Exceptions and carve-outs. The NDA contains standard exceptions to the definition of Confidential Information for: (i) information that becomes publicly available through no breach of the NDA by the receiving party; (ii) information independently known to the receiving party prior to disclosure, as demonstrated by contemporaneous written records; (iii) information independently developed by the receiving party without reference to the Confidential Information; and (iv) information required to be disclosed by applicable law, regulation, or judicial process, provided that the receiving party provides prompt written notice to the disclosing party prior to such disclosure (to the extent legally permitted) and cooperates with any effort by the disclosing party to obtain a protective order or other appropriate remedy.

Return and destruction obligation. The NDA should contain a provision requiring each party, upon the termination of discussions, to return or destroy all Confidential Information received from the other party, including all copies, summaries, analyses, notes, and other materials derived from or incorporating such Confidential Information. The NDA customarily provides that, if materials are destroyed rather than returned, the receiving party shall provide written certification of such destruction signed by an authorized officer or, in the case of legal counsel, a responsible attorney. The NDA typically permits each party to retain one archival copy of Confidential Information for record-keeping, regulatory compliance, and legal defense purposes, subject to the continuing confidentiality restrictions of the NDA.

Non-disclosure of negotiations themselves. Significantly, the NDA treats the fact that negotiations took place, the identity of the parties, and the terms under discussion as Confidential Information. This means that neither Northgate nor Harding (nor their respective advisors) may disclose to any third party the fact that Harding was under consideration for the CEO position, that negotiations occurred, or that such negotiations have terminated, except as required by applicable law or regulation. This provision has direct implications for Northgate's public disclosure posture as a dual-listed company. We note that separate guidance has been provided to Ms. Whitford on September 13, 2024 regarding the Company's obligations under SEC, NYSE, and FCA disclosure rules with respect to the failed negotiation; this memorandum does not address those public disclosure questions further.

B. Implied and Common-Law Confidentiality Obligations

Independent of the contractual NDA, both New York and English law impose implied duties of confidentiality on parties to employment negotiations with respect to proprietary and sensitive information exchanged during the course of such negotiations.

Under New York law, which is the governing law of the proposed Executive Employment Agreement and the principal law governing the legal relationship between the parties, parties to employment negotiations owe implied duties of confidentiality with respect to proprietary, trade secret, and otherwise sensitive information exchanged during the negotiation process, even in the absence of a formal non-disclosure agreement. New York courts have recognized that the circumstances surrounding executive-level employment negotiations — particularly where the parties exchange detailed financial, strategic, and personal information in connection with a potential senior leadership role at a publicly traded company — give rise to a reasonable expectation of confidentiality that the law will enforce. See, e.g., Ashland Mgmt. Inc. v. Janien, 82 N.Y.2d 395 (1993) (recognizing duty of confidence arising from circumstances of disclosure); Restatement (Third) of Unfair Competition § 41 (1995).

English law similarly recognizes equitable obligations of confidence where information is imparted in circumstances importing an obligation of confidentiality. Under the principles established in Coco v. A.N. Clark (Engineers) Ltd. [1969] R.P.C. 41 and subsequent authorities, a party who receives information that is communicated in confidence and to its knowledge is confidential may be restrained from making unauthorized use or disclosure of that information. Given that Northgate is a company incorporated and listed in England, and that certain of the information exchanged during the negotiation relates to the governance and operations of the UK-listed parent company, English law equitable obligations provide an additional layer of protection.

These common-law and equitable obligations reinforce the contractual NDA provisions and provide a residual basis for the protection of information that may not be expressly covered by the NDA or that may fall outside its technical scope. They also provide a basis for relief in the event that the NDA is found to be unenforceable for any reason.

C. Calderwood & Harkness's Own Confidentiality Obligations

Calderwood & Harkness owes duties of confidentiality to its client, Northgate, under multiple independent sources. First, the engagement letter dated June 4, 2024, executed by Elaine Whitford on behalf of Northgate, contains standard confidentiality provisions obligating the Firm to maintain the confidentiality of all client information received in connection with the engagement. Second, and more fundamentally, the New York Rules of Professional Conduct, Rule 1.6 ("Confidentiality of Information"), imposes a broadly defined duty on every attorney to preserve the confidences and secrets of a client, which extends to all information gained during or relating to the representation of the client, regardless of its source. Third, the attorney-client privilege protects from disclosure all confidential communications between Calderwood & Harkness and Northgate made for the purpose of providing or obtaining legal advice.

The Firm owes no separate or independent duty of confidentiality to Harding, who is not a client of the Firm. However, certain information received from Hargrove & Liddell in the course of the negotiation — including Harding's detailed personal financial data, his current compensation at Marlowe Asset Management Digital Holdings, Inc., and the terms of his existing Marlowe Asset Management employment agreement — may be subject to restrictions under the NDA (as Northgate is the receiving party of Harding's Confidential Information) and under generally applicable professional norms. Calderwood & Harkness's handling of such information is accordingly governed by the Firm's obligations to Northgate under the NDA and by our own professional standards, and the recommended document handling protocols below take these considerations into account.

D. Hargrove & Liddell's Obligations

Victoria Hargrove and Nathan Chu of Hargrove & Liddell LLP, who served as personal legal counsel to Marcus Elliot Harding throughout the negotiation, owe duties of confidentiality to their client under the same categories of obligation that bind Calderwood & Harkness to Northgate: their engagement agreement with Harding, the New York Rules of Professional Conduct, and the attorney-client privilege (assuming Hargrove & Liddell are admitted in New York or subject to New York rules by virtue of practice in the jurisdiction).

Of greater relevance to this memorandum, Hargrove & Liddell received substantial volumes of Northgate's Confidential Information during the negotiation, including detailed Board positions, Remuneration Committee deliberations, internal financial data, compensation benchmarking analyses prepared by Whitmore Hobson LLP, and ISS/proxy advisory analyses prepared by Veltrano Proxy Advisors, Inc. All such information is subject to the NDA's confidentiality restrictions and to the return/destruction obligations triggered by the termination of negotiations. As discussed in Section IV below, we have included a demand for return or destruction of Northgate's Confidential Information in the formal termination letter transmitted to Hargrove & Liddell on September 12, 2024, and we recommend a follow-up communication with specific instructions and a compliance deadline.

E. Kensington Partners and Other Third-Party Obligations

Multiple third-party advisors and consultants participated in or had access to confidential information during the Northgate-Harding negotiation process. Each is bound by its own set of confidentiality obligations, as follows:

Kensington Partners Ltd. Kensington Partners, the executive search firm retained by Northgate's Board on March 1, 2024, with Antonia Blythe serving as managing director of the engagement team, is bound by the terms of its engagement letter with Northgate to maintain confidentiality regarding all aspects of the CEO search process, including the identity of candidates, the status of discussions, and the terms under negotiation. We understand that the engagement letter provides for a search fee of £1,200,000, payable in three tranches, the third of which remains unpaid as a consequence of the collapse of the Harding negotiation. Kensington Partners' confidentiality obligations survive the termination of the search engagement and are independent of the NDA between Northgate and Harding.

Moorfield Bates LLP. Moorfield Bates LLP, the Company's UK employment solicitors, with Simon Aldridge (partner) and Hannah Carmichael (senior associate) advising on the UK-law aspects of the proposed dual employment structure, are bound by their engagement letter with Northgate and by the professional obligations of solicitors under the Solicitors Regulation Authority Standards and Regulations. Their participation related primarily to the structuring of the secondary UK service agreement with Northgate PLC and associated matters of English employment law.

Whitmore Hobson LLP. Whitmore Hobson LLP, the executive compensation consulting firm retained by the Remuneration Committee under the direction of Dr. Rachel Whitmore, prepared the compensation benchmarking analysis used by the Board in formulating the proposed compensation package. Whitmore Hobson's engagement with the Remuneration Committee is a standing arrangement, and their confidentiality obligations are governed by the terms of that engagement and by professional norms applicable to compensation consultants.

Galloway & Partners. Galloway & Partners, the Company's external auditors, with Clive Warburton as lead engagement partner, were consulted regarding the accounting treatment of the proposed equity awards under ASC 718 (US GAAP) and IFRS 2 (International Financial Reporting Standards). Their confidentiality obligations arise from their audit engagement letter and from professional standards applicable to independent auditors.

Veltrano Proxy Advisors, Inc. Veltrano Proxy Advisors, Inc., with Sandra Kolb serving as the principal consultant, provided analysis of shareholder sensitivity to CEO compensation quantum and change-in-control provisions, with particular reference to ISS and Tarrant Partners LLC voting guidelines. Veltrano's engagement letter with Northgate contains standard confidentiality provisions.

No affirmative document return or destruction action is required with respect to these third-party advisors beyond confirming their awareness that negotiations have terminated and that their respective confidentiality obligations survive. The information held by each advisor consists primarily of work product prepared for or on behalf of Northgate, and their retention of such work product is governed by the terms of their own engagement letters and applicable professional obligations.

III. Categories of Confidential Information Exchanged

The confidential information exchanged during the June 4 – September 12, 2024 negotiation falls into three broad categories, each of which raises distinct considerations for post-termination handling.

A. Northgate Information Provided to Harding / Hargrove & Liddell

During the course of negotiations, substantial Northgate confidential information was shared with Harding and his counsel at Hargrove & Liddell. This information includes, but is not limited to, the following:

• Board and Remuneration Committee deliberations. Detailed positions adopted by the Board and the Remuneration Committee at various stages of the negotiation, including internal governance communications regarding acceptable compensation ranges, equity grant parameters, change-in-control provisions, and severance terms. This includes the positions and preferences of individual Remuneration Committee members: Geoffrey Stanton (Chair), Dame Philippa Thornton-Hale, Lucinda Farrow, and Dr. Tomás Herrera.

• Financial information of the Company. Detailed financial data provided to Harding to facilitate his evaluation of the CEO opportunity, including NTP's FY2023 revenue of £4.26 billion (approximately $5.43 billion at prevailing exchange rates), EBITDA of £1.14 billion (approximately $1.45 billion), market capitalization of approximately £8.7 billion (approximately $11.1 billion) as of June 2024, the NTP ordinary share price of £12.45 on the London Stock Exchange, the ADR price of $15.87 on the New York Stock Exchange, and total shares outstanding of approximately 699 million. Certain forward-looking financial projections and strategic planning materials were also shared under the NDA.

• Compensation benchmarking data. The compensation benchmarking analysis prepared by Whitmore Hobson LLP for the Remuneration Committee, which included peer group comparisons, market percentile data, and recommended compensation ranges for the CEO position.

• Equity plan details. Information regarding the Northgate Telecommunications PLC 2022 Omnibus Incentive Plan, including the remaining share pool of 14.2 million shares available for issuance, plan terms and conditions, and the proposed allocation for the CEO equity grant.

• ISS/proxy advisory analysis. The analysis prepared by Veltrano Proxy Advisors, Inc. regarding anticipated shareholder sensitivity to CEO compensation quantum and change-in-control provisions, including modeling of potential ISS and Tarrant Partners LLC voting recommendations under various compensation scenarios.

• D&O insurance information. Details of the Company's directors' and officers' insurance program, including the Ashdown Surety & Insurance Co. policy (Policy No. ASI-D&O-NTP-2024-4471), with coverage limits of $50 million per occurrence and $100 million in the aggregate, which was relevant to the negotiation of the indemnification provisions of the proposed employment agreement.

• Remuneration Committee membership and positions. The identities, roles, and individual negotiating positions of the members of the Remuneration Committee, as enumerated above.

• CEO succession details. Information regarding the planned retirement of Sir Alistair Kemble, the outgoing Chief Executive Officer, effective December 31, 2024, and the Board's succession planning timeline and process.

• Strategic plans related to CEO transition. Certain strategic plans and organizational structure considerations related to the CEO transition, including contemplated changes to the senior leadership team and reporting lines.

• Dual employment contract architecture. Detailed information regarding the proposed dual US/UK employment structure, consisting of a primary employment agreement governed by New York law between Harding and Northgate Telecommunications US, Inc. (the Company's US subsidiary) and a secondary UK service agreement between Harding and Northgate Telecommunications PLC, including the tax and regulatory rationale for the dual structure.

B. Harding Information Provided to NTP / Calderwood & Harkness

Reciprocally, Harding and Hargrove & Liddell shared substantial personal and financial information of Harding with Northgate and Calderwood & Harkness, including:

• Current compensation at Marlowe Asset Management Digital Holdings, Inc. Detailed breakdown of Harding's current total target compensation at Marlowe Asset Management, including base salary of $1,450,000, target annual bonus of $2,175,000 (150% of base salary), long-term incentive target of $7,500,000, and total target compensation of $11,125,000.

• Unvested equity at Marlowe Asset Management. Information regarding Harding's unvested equity holdings at Marlowe Asset Management, with an estimated forfeiture value of $23,400,000, which was a central point of negotiation in determining the make-whole equity grant proposed by Northgate.

• Existing Marlowe Asset Management employment agreement terms. Detailed terms of Harding's existing employment agreement with Marlowe Asset Management, including change-in-control provisions providing for a payment of three times base salary plus bonus and full vesting acceleration, as well as a 12-month post-termination US non-compete covenant, the scope and enforceability of which were analyzed by Calderwood & Harkness in connection with the Northgate negotiation.

• Personal career history and background information. Comprehensive career history, including Harding's 28-year career in the telecommunications and technology sectors, his prior role as Executive Vice President at Meridian Wireless Corp. from 2010 to 2017, his recruitment to Marlowe Asset Management as Chief Operating Officer in 2017, and his track record of growing Marlowe Asset Management's SaaS annual recurring revenue from $120 million to $1.8 billion during his tenure.

• Personal residence information. Harding's residential address at 14 Gramercy Park South, Apartment 12A, New York, New York 10003, which was disclosed in connection with certain tax and relocation analyses.

• Section 280G base amount calculation inputs. Data necessary for the analysis of potential Section 280G excise tax exposure, including Harding's average W-2 compensation from Marlowe Asset Management for the five-year period from 2019 through 2023, in the amount of $7,840,000, which served as the foundation for the base amount calculation and the best-net versus gross-up analysis.

C. Negotiation Materials (Jointly Sensitive)

In addition to the category-specific information described above, the negotiation generated a substantial body of materials that are jointly sensitive — i.e., materials that contain or reflect the confidential information of both parties and that document the substance and trajectory of the negotiation itself. These materials include:

• All five versions of the term sheet (Version 1 through Version 5-Final), each reflecting successive rounds of negotiation and compromise on key terms including base salary, annual bonus, sign-on bonus, make-whole equity grant, annual equity grant, change-in-control provisions, severance terms, restrictive covenants, and clawback provisions.

• Draft 1 of the Executive Employment Agreement, prepared by Calderwood & Harkness and transmitted to Hargrove & Liddell on July 22, 2024, and Draft 2 of the Executive Employment Agreement, reflecting revisions based on the Hargrove & Liddell redline of Draft 1 and further Board instructions, transmitted on August 12, 2024.

• The Hargrove & Liddell redline of Draft 1, received by Calderwood & Harkness on August 5, 2024, containing 88 comments and proposed revisions, and the Hargrove & Liddell redline of Draft 2, received on August 19, 2024, containing 42 comments and proposed revisions.

• Blackline comparisons generated between successive versions of the term sheet and the employment agreement drafts.

• All negotiation call notes, encompassing five telephone conferences between the principal attorneys and, in certain instances, the principals and their advisors, conducted on June 24, July 1, July 8, July 12, and July 19, 2024.

• Meeting notes from the August 26, 2024 in-person principals meeting held at 600 Lexington Avenue, New York, New York, attended by Harding, Hargrove, Geoffrey Stanton (Remuneration Committee Chair), Elaine Whitford, you, and me.

• Formal correspondence exchanged during the negotiation, including the final compromise cover letter dated September 3, 2024, and the rejection letter from Hargrove & Liddell dated September 9, 2024.

• Section 280G analyses and best-net versus gross-up calculations, prepared by Calderwood & Harkness in consultation with Northgate's tax advisors.

IV. Document Handling Protocols

Based on the foregoing analysis of confidentiality obligations and categories of information, I recommend the following document handling protocols.

A. Documents to Be Returned or Destroyed by Hargrove & Liddell / Harding

Pursuant to the return/destruction provisions of the NDA, Calderwood & Harkness should request — and has requested, in the formal termination letter dated September 12, 2024 — that Hargrove & Liddell return or destroy all Confidential Information received from or on behalf of Northgate during the course of the negotiation. The termination letter includes a general reference to the NDA's return/destruction obligation, but I recommend that we follow up with a more specific, itemized written request to ensure that all categories of Northgate Confidential Information are addressed comprehensively.

Specifically, the follow-up request should demand the return or destruction of the following categories of materials:

• All versions of the term sheet (Versions 1 through 5-Final) and all drafts of the Executive Employment Agreement (including Drafts 1 and 2 as provided by Calderwood & Harkness), together with all transmittal correspondence, cover letters, and related communications.

• All compensation benchmarking data and analyses provided by or on behalf of Northgate, including the Whitmore Hobson compensation benchmarking report and any summaries, extracts, or analyses thereof.

• All equity plan information, including materials relating to the Northgate Telecommunications PLC 2022 Omnibus Incentive Plan and the remaining share pool.

• The ISS/proxy advisory analyses prepared by Veltrano Proxy Advisors, Inc. and shared with Hargrove & Liddell during the negotiation, including any summaries or derivative analyses.

• All Board and Remuneration Committee positions, deliberations, and internal governance communications shared with Hargrove & Liddell during the course of the negotiation.

• D&O insurance policy details, including any information regarding the Ashdown Surety & Insurance Co. policy.

• Any copies, summaries, memoranda, analyses, notes, or other materials derived from, incorporating, or reflecting Northgate Confidential Information, whether in physical or electronic form.

The follow-up request should establish a reasonable deadline for compliance — I recommend 14 calendar days from the date of the request — and should demand written certification of destruction, signed by Victoria Hargrove or another authorized attorney of Hargrove & Liddell, if materials are destroyed rather than returned. The certification should confirm that all copies of the specified materials, in whatever form, have been destroyed and that no copies have been retained except as permitted by the NDA.

We should note that Hargrove & Liddell may assert, consistent with their professional responsibility obligations and standard practice for law firms, the right to retain one archival copy of Northgate Confidential Information for their own internal records, compliance with document retention requirements, and defense against potential malpractice claims. This is a common and generally accepted practice. If H&L asserts this right, we should confirm that any such archival copy will remain subject to the NDA's confidentiality restrictions for the full duration of the survival period and that the archival copy will be maintained in a secure manner with access limited to authorized personnel of Hargrove & Liddell.

B. Documents to Be Returned or Destroyed by NTP / Calderwood & Harkness (Harding's Information)

Northgate and Calderwood & Harkness have reciprocal obligations under the NDA to return or destroy Harding's Confidential Information upon termination of negotiations. Compliance with these reciprocal obligations is important both as a matter of contractual duty and as a demonstration of good faith that will support any future enforcement action if Harding or his counsel fail to comply with their own obligations.

I recommend the following approach:

Return of original documents. To the extent that Harding or Hargrove & Liddell provided original documents (as opposed to copies) to Northgate or Calderwood & Harkness during the negotiation, such original documents should be returned to Harding via Hargrove & Liddell. Based on my review of the file, I do not believe that any original documents were provided; rather, all information appears to have been exchanged in electronic or copy form. This should be confirmed with the file.

Destruction of copies. Copies of Harding's personal financial information, Pemberton Investors details, Marlowe Asset Management employment agreement analysis, Section 280G calculation inputs, and personal residence information held by Northgate's internal teams should be destroyed in a secure manner. I recommend coordinating with Ms. Whitford to identify all Northgate personnel who received or have access to such information and to ensure comprehensive destruction across all repositories, including email accounts, shared drives, and physical files.

Calderwood & Harkness retention rights. Under the Firm's document retention policy and professional responsibility obligations, Calderwood & Harkness is permitted to retain a complete copy of the matter file for 1022-00004 in our closed-matter archives, including work product that contains or references Harding's Confidential Information. This retention is necessary for multiple purposes, including defense against potential malpractice claims, conflicts checking in connection with future engagements, regulatory compliance, and the ability to respond to any future inquiries from or on behalf of the client. The Firm's retention of such materials is consistent with standard practice and with the archival carve-out typically found in NDAs of this type. All materials retained by the Firm will remain subject to applicable confidentiality obligations, including the NDA, for the duration of the survival period and to the Firm's own confidentiality obligations to Northgate indefinitely.

Notification to Harding. I recommend that, in connection with our compliance notification to Hargrove & Liddell, we inform them that Northgate and its advisors have complied with their reciprocal return/destruction obligations under the NDA, but that limited archival copies will be retained by Northgate's legal department and by Calderwood & Harkness in accordance with standard legal and regulatory document retention requirements, subject to the continuing confidentiality restrictions of the NDA. This notification promotes transparency and reduces the risk of any future allegation that the reciprocal obligations were not honored.

C. Calderwood & Harkness Internal File

The complete matter file for 1022-00004 should be organized, indexed, and archived in accordance with Calderwood & Harkness's standard document retention policy for closed matters. I recommend the following specific steps:

All documents bearing privilege designations — including documents marked "Privileged and Confidential," "Attorney-Client Privileged," or "Attorney Work Product" — should retain those designations in the archived file. No privilege designations should be removed or altered during the archiving process.

Devon Archer is preparing a separate Document Retention and Privilege Log Memorandum, which is expected to be completed by September 17, 2024. That memorandum will provide a comprehensive catalog of all documents in the file, organized by category and date, with privilege designations noted for each item. I have coordinated with Devon on the scope and organization of that memorandum, and the categories outlined below are consistent with the approach we have discussed.

Based on my preliminary assessment, the file contains the following categories of materials (the precise document count will be confirmed in Devon's memorandum):

• Engagement letter between Northgate and Calderwood & Harkness, dated June 4, 2024, and the associated conflicts clearance memorandum dated June 3, 2024.

• New matter intake form for 1022-00004.

• Eight research memoranda prepared by the engagement team during the initial phase of the engagement (June 6–9, 2024), covering topics including New York employment law requirements for executive agreements, Section 280G and golden parachute analysis, UK dual employment structuring considerations, non-compete enforceability under New York law post-2024 developments, equity compensation plan analysis, D&O indemnification provisions, change-in-control best practices, and clawback policy compliance under SEC Rule 10D-1.

• All five versions of the term sheet (Versions 1 through 5-Final) and associated transmittal correspondence.

• All five sets of negotiation call notes (June 24, July 1, July 8, July 12, and July 19, 2024).

• Draft 1 (July 22, 2024) and Draft 2 (August 12, 2024) of the Executive Employment Agreement.

• Hargrove & Liddell redlines of Draft 1 (received August 5, 2024) and Draft 2 (received August 19, 2024), together with Calderwood & Harkness's internal analysis memoranda responding to each redline.

• Blackline comparisons between successive drafts and term sheet versions.

• Principals meeting preparation materials, agenda, and notes for the August 26, 2024 in-person meeting.

• The final compromise proposal transmitted September 3, 2024, and the associated cover letter.

• The rejection correspondence from Hargrove & Liddell dated September 9, 2024.

• Board call notes from the September 10, 2024 Board telephonic meeting and the Board resolution adopted September 12, 2024 terminating negotiations.

• The formal termination correspondence to Hargrove & Liddell dated September 12, 2024.

• All internal and external email correspondence related to the matter.

• Billing records, time entries, and invoices for the engagement.

The archived file should be maintained in a secure, access-restricted repository consistent with the Firm's standard procedures for closed matters containing sensitive client information.

D. Third-Party Advisors

I recommend confirming with Ms. Whitford that each of the following third-party advisors has been or will be notified that negotiations with Harding have terminated and that their respective confidentiality obligations survive:

Kensington Partners Ltd. (Antonia Blythe). A separate notification letter from Calderwood & Harkness, dated September 13, 2024, has been prepared for transmission to Kensington Partners confirming the termination of negotiations and reminding the firm of its continuing confidentiality obligations under its engagement letter with Northgate. The notification also addresses the status of the outstanding third tranche of the search fee.

Moorfield Bates LLP (Simon Aldridge, Hannah Carmichael). As Northgate's UK employment solicitors, Moorfield Bates should be notified by Northgate's General Counsel that negotiations have terminated and that the UK service agreement workstream is suspended. Their confidentiality obligations are governed by their engagement letter and by SRA professional standards.

Whitmore Hobson LLP (Dr. Rachel Whitmore). As the standing compensation consultant to the Remuneration Committee, Whitmore Hobson should be informed that the Harding negotiation has concluded. No specific action is required with respect to their retention of work product, as their engagement with the Committee is ongoing and the benchmarking analysis may be relevant to any future CEO search.

Galloway & Partners (Clive Warburton). The Company's auditors were consulted on a limited basis regarding the ASC 718 / IFRS 2 accounting treatment of the proposed equity awards. They should be informed that the negotiation has terminated and that no equity awards were made. Their confidentiality obligations are governed by their audit engagement letter and by professional auditing standards.

Veltrano Proxy Advisors, Inc. (Sandra Kolb). The proxy advisory and governance consultant should be notified that the negotiation has terminated and reminded that the analysis they prepared regarding shareholder sensitivity to CEO compensation remains confidential.

No affirmative document return or destruction request is necessary with respect to any of these third-party advisors. Their retention of work product is governed by their own engagement terms and applicable professional obligations, and there is no indication that any of these advisors holds information that would require special handling beyond continued compliance with their existing confidentiality obligations.

V. Specific Risks and Concerns

A. Risk of Leak / Unauthorized Disclosure

Given the high-profile nature of the CEO search for a dual-listed public company — Northgate is listed on the London Stock Exchange (LON: NTP) and its American Depositary Receipts trade on the New York Stock Exchange (NYSE: NTPC), with a combined market capitalization of approximately £8.7 billion / $11.1 billion — there is a meaningful and non-trivial risk that the failed negotiation could be leaked to the financial press or to market participants. CEO searches at companies of this scale attract significant attention from financial journalists, industry analysts, and activist investors, and the identity of a candidate of Harding's stature would be a highly newsworthy development.

The NDA's treatment of the fact of negotiations as Confidential Information is critical in this context. As noted above, neither party nor its advisors may disclose that discussions took place, that Harding was under consideration, or that negotiations have terminated, except as required by applicable law or regulation. I recommend that Northgate take proactive steps to reinforce this obligation among all internal personnel with knowledge of the negotiation. Specifically, I recommend that Ms. Whitford circulate a confidential internal reminder to all Northgate personnel involved in or aware of the Harding discussions, including the following individuals:

• Dame Philippa Thornton-Hale (Non-Executive Director; Remuneration Committee member)

• Geoffrey Stanton (Non-Executive Director; Remuneration Committee Chair)

• Lucinda Farrow (Non-Executive Director; Remuneration Committee member)

• Dr. Tomás Herrera (Non-Executive Director; Remuneration Committee member)

• Elaine Whitford (Senior Vice President and Group General Counsel)

• Priya Narayanan (Deputy General Counsel)

• Jonathan Briggs (Chief Human Resources Officer)

The reminder should emphasize that the existence, substance, and termination of the negotiations are to be treated as strictly confidential; that no discussions with the press, analysts, or other external parties are permitted; and that any inquiries regarding CEO succession should be directed to the Company's communications or investor relations function.

No obligation to publicly disclose the failed negotiation exists under SEC rules (no definitive agreement was reached and no material commitment was made), NYSE listing standards, or FCA disclosure rules (specifically, the UK Market Abuse Regulation and the FCA Listing Rules). However, an inadvertent or unauthorized leak could create significant market disruption and reputational issues for both Northgate — which would face immediate questions about the stability and direction of its CEO succession process — and Harding, whose continuing role at Marlowe Asset Management Digital Holdings, Inc. could be materially affected. Separate guidance on public disclosure obligations and preparation of a holding statement has been provided to Ms. Whitford, as noted above.

B. Harding's Continuing Employment at Marlowe Asset Management

Marcus Elliot Harding remains President and Chief Operating Officer of Marlowe Asset Management Digital Holdings, Inc. (NYSE: VDHI). Disclosure of his participation in CEO negotiations with Northgate could have material adverse implications for Harding's relationship with Marlowe Asset Management's Board of Directors and senior management, could trigger provisions of his existing Marlowe Asset Management employment agreement (including potential questions about his ongoing commitment to the company and potential constructive termination issues), and could affect Marlowe Asset Management's stock price if the market perceives that a key executive was actively seeking to depart.

These considerations reinforce the mutual interest of both Northgate and Harding in strict adherence to the confidentiality obligations imposed by the NDA and common law. It is in neither party's interest for the negotiations to become public, and this alignment of interests should support cooperative compliance with the document handling protocols recommended in this memorandum.

We should note, however, that the mutual interest in confidentiality does not eliminate the risk of a leak from sources outside the immediate control of the parties and their counsel. The number of individuals with knowledge of the negotiations — across the Northgate Board and management team, Hargrove & Liddell, Kensington Partners, and the various third-party advisors — is substantial, and each additional individual with knowledge increases the probability of an inadvertent disclosure. This underscores the importance of the proactive internal notification recommended in Section VI below.

C. Potential Future Dealings

Although negotiations have terminated and the Board's resolution of September 12, 2024 reflects a present determination to end discussions with Harding, there is a possibility — however remote at the present time — that circumstances could change and that discussions could resume at some future date. This could occur if the Board's search for an alternative CEO candidate is unsuccessful, if Sir Alistair Kemble's retirement timeline changes, or if other developments make Harding an attractive candidate again.

Additionally, the telecommunications and technology industries are sufficiently compact that Northgate and Harding may have future professional interactions in other contexts — as counterparties in commercial transactions, as industry colleagues, or in connection with a subsequent CEO search process.

For these reasons, I recommend that the document retention and archiving protocols for the matter file be designed to preserve the ability to reference the negotiation history, including the substantive positions taken by each party, the key deal points on which negotiations foundered, and the relevant financial and compensation data. The Firm's closed-matter archive of 1022-00004 should serve this purpose, and I recommend flagging the file for potential future relevance in the event a new engagement arises involving either Northgate's CEO succession or any other matter involving Harding.

VI. Recommended Actions

Based on the foregoing analysis, I recommend the following specific actions:

1. Confirm NDA terms. As a threshold matter, we should obtain and review a fully executed copy of the NDA between Northgate and Harding to confirm the specific survival period, the precise mechanics of the return/destruction obligation, any limitations on the archival carve-out, and any other provisions relevant to post-termination compliance. I will coordinate with Elaine Whitford to obtain the executed NDA and will circulate a supplemental memorandum if the NDA terms differ materially from the substantially final form in our files.

2. Formal follow-up request to Hargrove & Liddell. The formal termination letter sent on September 12, 2024, which contains a general reference to the NDA's return/destruction obligation, should be followed up with a specific, itemized written request for the return or destruction of all Northgate Confidential Information held by Hargrove & Liddell and Harding. The follow-up request should establish a 14-day deadline for compliance and should demand written certification of destruction, signed by a responsible attorney of Hargrove & Liddell, if materials are destroyed rather than returned. I will prepare a draft of this follow-up request for your review.

3. Internal notification at Northgate. I recommend that Ms. Whitford circulate a confidential internal memorandum to all Northgate personnel involved in or aware of the Harding negotiation — including the Remuneration Committee members, the General Counsel's office, and the Chief Human Resources Officer — reminding them of their ongoing confidentiality obligations with respect to the existence, substance, and termination of the negotiations, and directing that any external inquiries be referred to the Company's communications or investor relations function. I will prepare a suggested draft for Ms. Whitford's consideration.

4. Reciprocal compliance. I will coordinate with Ms. Whitford to ensure that Northgate complies with its own reciprocal obligations under the NDA to return or destroy Harding's Confidential Information. This will include identifying all Northgate personnel and systems that hold Harding's personal financial data, Pemberton Investors information, and other Harding Confidential Information, and arranging for the secure destruction of such materials with appropriate archival carve-outs for the Company's legal files. We will then provide appropriate notification to Hargrove & Liddell of Northgate's compliance.

5. Advisor notifications. I will confirm with Ms. Whitford that all third-party advisors engaged in connection with the negotiation — Kensington Partners Ltd., Moorfield Bates LLP, Whitmore Hobson LLP, Galloway & Partners, and Veltrano Proxy Advisors, Inc. — have been notified that negotiations have terminated and have been reminded of their surviving confidentiality obligations. As noted, the Kensington Partners notification letter from Calderwood & Harkness, dated September 13, 2024, has already been prepared for transmission.

6. Calderwood & Harkness file archiving. I will complete the organization, indexing, and archiving of the 1022-00004 matter file, with proper privilege designations maintained on all documents, in coordination with Devon Archer's forthcoming Document Retention and Privilege Log Memorandum, which is anticipated to be completed by September 17, 2024. The archived file will be maintained in the Firm's closed-matter repository with appropriate access restrictions and a flag for potential future relevance.

7. Monitor for leaks. I recommend that Northgate's communications and investor relations team implement monitoring for any press reports, analyst commentary, or social media activity regarding the failed CEO negotiation with Harding. In addition, I recommend that the Company prepare a holding statement — a brief, measured response that can be issued promptly if the negotiation becomes public — to mitigate the reputational and market impact of any unauthorized disclosure. We have provided preliminary guidance to Ms. Whitford on the content of such a holding statement in connection with the public disclosure analysis referenced above.

VII. Conclusion

Multiple overlapping sources of confidentiality obligations — contractual (the NDA), common-law (implied duties under New York and English law), and professional (attorney-client privilege, professional responsibility rules, and engagement-specific duties) — protect the substantial body of confidential information exchanged during the June 4 – September 12, 2024 negotiation between Northgate Telecommunications PLC and Marcus Elliot Harding. These obligations survive the termination of negotiations and will continue in effect for a period of at least two years (subject to confirmation of the NDA's specific survival term), and in certain respects indefinitely.

Prompt and diligent execution of the recommended document handling protocols — including the formal request to Hargrove & Liddell for return or destruction of Northgate Confidential Information, reciprocal compliance by Northgate with respect to Harding's information, internal notifications at the Company, third-party advisor notifications, and comprehensive archiving of the Calderwood & Harkness matter file — will minimize the risk of unauthorized disclosure and preserve the integrity of the closed matter file for any future reference that may be required.

I am available to discuss any of the foregoing with you at your convenience, and I am prepared to coordinate directly with Elaine Whitford and her team at Northgate on the implementation of these recommendations. I will also coordinate with Devon Archer on the completion of the Document Retention and Privilege Log Memorandum.

Matter Reference: 1022-00004 Matter Status: Closed — Terminated (September 12, 2024)

James Underwood Associate Calderwood & Harkness LLP 1585 Broadway, 38th Floor New York, New York 10036 Direct: (212) 555-4847 junderwood@calderwoodharkness.com

This memorandum is a privileged and confidential attorney-client communication and attorney work product. It is intended solely for the use of the addressee and those individuals copied hereon. Any unauthorized review, use, disclosure, or distribution is prohibited. If you have received this document in error, please notify the sender immediately and destroy all copies.

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 1585 Broadway, 38th Floor New York, New York 10036
Telephone: (212) 555-4800 Facsimile: (212) 555-4801
September 12, 2024
MEMORANDUM
TO: Renata Vasquez, Partner, Calderwood & Harkness LLP
FROM: James Underwood, Associate, Calderwood & Harkness LLP
RE: Post-Termination Confidentiality Obligations and Document Handling — Northgate Telecommunications PLC CEO Employment Negotiation (Matter No. 1022-00004)
CC: Devon Archer, Associate, Calderwood & Harkness LLP
I. Purpose and Background
The purpose of this memorandum is to identify and summarize the confidentiality obligations that survive the termination of negotiations between Northgate Telecommunications PLC ("Northgate," "NTP," or the "Company") and Marcus Elliot Harding ("Harding") for the position of Chief Executive Officer of the Company, and to recommend protocols for document retention, return, and destruction in connection with the closing of this matter.
As you are aware, the Board of Directors of Northgate resolved earlier today, September 12, 2024, to formally terminate negotiations with Harding following the rejection by Harding — acting through his personal legal counsel, Victoria Hargrove of Hargrove & Liddell LLP ("H&L") — of Northgate's final compromise proposal on September 9, 2024. The final compromise proposal had been transmitted to H&L under a cover letter dated September 3, 2024, and represented the culmination of extensive deliberations by the Remuneration Committee and the full Board regarding the outermost boundaries of an acceptable compensation package. Ms. Hargrove's September 9 letter communicated Harding's rejection of the proposal and indicated that no further counterproposal was forthcoming. Following receipt of the rejection, Northgate's Board convened telephonically on September 10, 2024, to discuss next steps, and on September 12, 2024, adopted a formal resolution to terminate the negotiations. Formal notification of the termination was transmitted to Hargrove & Liddell via email and overnight courier on September 12, 2024.
Our engagement in this matter, designated Matter No. 1022-00004, was opened on June 4, 2024. Calderwood & Harkness LLP ("C&H" or the "Firm") has served as outside employment counsel to Northgate throughout the negotiation process, advising the Company and its Board on the structuring, negotiation, and drafting of the proposed executive employment agreement for the CEO position. Our principal client contact has been Elaine Whitford, Senior Vice President and Group General Counsel of Northgate.
During the course of the engagement, which spanned approximately fourteen weeks from June 4 through September 12, 2024, the parties exchanged substantial volumes of confidential information. This information included five iterations of the term sheet (designated Version 1 through Version 5-Final), two full drafts of the Executive Employment Agreement together with associated redlines and blackline comparisons, detailed compensation data relating to both Harding's current employment at Marlowe Asset Management Digital Holdings, Inc. ("Marlowe Asset Management") and Northgate's proposed compensation package, financial projections and corporate governance materials of the Company, personal financial information of Mr. Harding, and extensive correspondence and negotiation memoranda. The volume and sensitivity of this information necessitate a careful and systematic approach to post-termination document handling.
This memorandum addresses the following topics in turn: (i) the sources of confidentiality obligations applicable to the exchanged information; (ii) the categories of confidential information exchanged during the negotiation; (iii) recommended document handling protocols for each category; (iv) specific risks and concerns arising from the termination; and (v) recommended next steps.
II. Sources of Confidentiality Obligations
The confidential information exchanged during the Northgate-Harding negotiation is protected by multiple, overlapping sources of obligation. Each is addressed below.
A. The Non-Disclosure / Confidentiality Agreement Between NTP and Harding
A mutual non-disclosure agreement (the "NDA") was executed between Northgate Telecommunications PLC and Marcus Elliot Harding prior to the commencement of Calderwood & Harkness's engagement, in connection with the CEO search process facilitated by Kensington Partners Ltd. ("Kensington Partners"), the executive search firm retained by Northgate's Board on March 1, 2024. The managing director of the Kensington Partners engagement team was Antonia Blythe, who served as the primary intermediary between the Company and potential candidates during the initial stages of the search process.
Based on the information available to us, the NDA was executed on or about May 28, 2024, which corresponds to the date on which the Board selected Harding as its preferred candidate from among the final slate of candidates presented by Kensington Partners. It is possible that the NDA was executed shortly thereafter rather than on May 28 itself; however, the NDA was clearly in place prior to the substantive exchange of confidential information that commenced in early June. We recommend confirming the precise execution date with Ms. Whitford and obtaining a fully executed copy for the file, as our current records contain only the substantially final form of the NDA circulated on May 27, 2024, rather than a countersigned original.
The key provisions of the NDA that bear on post-termination obligations are as follows:
Definition of "Confidential Information." The NDA defines "Confidential Information" broadly to encompass all non-public information exchanged between the parties (including their respective advisors and representatives) during the negotiation process. The definition expressly includes, without limitation, compensation terms and proposals, financial data and projections, strategic plans, Board and committee deliberations, corporate governance materials, and personal financial information of Harding. This definition is sufficiently capacious to cover substantially all of the information exchanged during the course of our engagement.
Permitted purposes. The NDA restricts the use of Confidential Information to the sole purpose of evaluating and negotiating the proposed CEO employment relationship between Northgate and Harding. With negotiations now terminated, the permitted purpose has been exhausted, and neither party retains any right to use the other's Confidential Information for any purpose, subject to the limited archival exceptions described below.
Surviving term. The NDA should contain a provision specifying the period during which confidentiality obligations survive the termination of negotiations. Market practice for NDAs of this type typically provides for a survival period of two to three years following the termination of discussions. Based on our review of the substantially final form of the NDA, the survival period appears to be two years from the date of termination. We recommend confirming this provision in the executed copy, as the survival period is a critical parameter for ongoing compliance. Assuming a termination date of September 12, 2024, and a two-year survival period, the NDA's confidentiality obligations would remain in effect through approximately September 12, 2026.
Exceptions and carve-outs. The NDA contains standard exceptions to the definition of Confidential Information for: (i) information that becomes publicly available through no breach of the NDA by the receiving party; (ii) information independently known to the receiving party prior to disclosure, as demonstrated by contemporaneous written records; (iii) information independently developed by the receiving party without reference to the Confidential Information; and (iv) information required to be disclosed by applicable law, regulation, or judicial process, provided that the receiving party provides prompt written notice to the disclosing party prior to such disclosure (to the extent legally permitted) and cooperates with any effort by the disclosing party to obtain a protective order or other appropriate remedy.
Return and destruction obligation. The NDA should contain a provision requiring each party, upon the termination of discussions, to return or destroy all Confidential Information received from the other party, including all copies, summaries, analyses, notes, and other materials derived from or incorporating such Confidential Information. The NDA customarily provides that, if materials are destroyed rather than returned, the receiving party shall provide written certification of such destruction signed by an authorized officer or, in the case of legal counsel, a responsible attorney. The NDA typically permits each party to retain one archival copy of Confidential Information for record-keeping, regulatory compliance, and legal defense purposes, subject to the continuing confidentiality restrictions of the NDA.
Non-disclosure of negotiations themselves. Significantly, the NDA treats the fact that negotiations took place, the identity of the parties, and the terms under discussion as Confidential Information. This means that neither Northgate nor Harding (nor their respective advisors) may disclose to any third party the fact that Harding was under consideration for the CEO position, that negotiations occurred, or that such negotiations have terminated, except as required by applicable law or regulation. This provision has direct implications for Northgate's public disclosure posture as a dual-listed company. We note that separate guidance has been provided to Ms. Whitford on September 13, 2024 regarding the Company's obligations under SEC, NYSE, and FCA disclosure rules with respect to the failed negotiation; this memorandum does not address those public disclosure questions further.
B. Implied and Common-Law Confidentiality Obligations
Independent of the contractual NDA, both New York and English law impose implied duties of confidentiality on parties to employment negotiations with respect to proprietary and sensitive information exchanged during the course of such negotiations.
Under New York law, which is the governing law of the proposed Executive Employment Agreement and the principal law governing the legal relationship between the parties, parties to employment negotiations owe implied duties of confidentiality with respect to proprietary, trade secret, and otherwise sensitive information exchanged during the negotiation process, even in the absence of a formal non-disclosure agreement. New York courts have recognized that the circumstances surrounding executive-level employment negotiations — particularly where the parties exchange detailed financial, strategic, and personal information in connection with a potential senior leadership role at a publicly traded company — give rise to a reasonable expectation of confidentiality that the law will enforce. See, e.g., Ashland Mgmt. Inc. v. Janien, 82 N.Y.2d 395 (1993) (recognizing duty of confidence arising from circumstances of disclosure); Restatement (Third) of Unfair Competition § 41 (1995).
English law similarly recognizes equitable obligations of confidence where information is imparted in circumstances importing an obligation of confidentiality. Under the principles established in Coco v. A.N. Clark (Engineers) Ltd. [1969] R.P.C. 41 and subsequent authorities, a party who receives information that is communicated in confidence and to its knowledge is confidential may be restrained from making unauthorized use or disclosure of that information. Given that Northgate is a company incorporated and listed in England, and that certain of the information exchanged during the negotiation relates to the governance and operations of the UK-listed parent company, English law equitable obligations provide an additional layer of protection.
These common-law and equitable obligations reinforce the contractual NDA provisions and provide a residual basis for the protection of information that may not be expressly covered by the NDA or that may fall outside its technical scope. They also provide a basis for relief in the event that the NDA is found to be unenforceable for any reason.
C. Calderwood & Harkness's Own Confidentiality Obligations
Calderwood & Harkness owes duties of confidentiality to its client, Northgate, under multiple independent sources. First, the engagement letter dated June 4, 2024, executed by Elaine Whitford on behalf of Northgate, contains standard confidentiality provisions obligating the Firm to maintain the confidentiality of all client information received in connection with the engagement. Second, and more fundamentally, the New York Rules of Professional Conduct, Rule 1.6 ("Confidentiality of Information"), imposes a broadly defined duty on every attorney to preserve the confidences and secrets of a client, which extends to all information gained during or relating to the representation of the client, regardless of its source. Third, the attorney-client privilege protects from disclosure all confidential communications between Calderwood & Harkness and Northgate made for the purpose of providing or obtaining legal advice.
The Firm owes no separate or independent duty of confidentiality to Harding, who is not a client of the Firm. However, certain information received from Hargrove & Liddell in the course of the negotiation — including Harding's detailed personal financial data, his current compensation at Marlowe Asset Management Digital Holdings, Inc., and the terms of his existing Marlowe Asset Management employment agreement — may be subject to restrictions under the NDA (as Northgate is the receiving party of Harding's Confidential Information) and under generally applicable professional norms. Calderwood & Harkness's handling of such information is accordingly governed by the Firm's obligations to Northgate under the NDA and by our own professional standards, and the recommended document handling protocols below take these considerations into account.
D. Hargrove & Liddell's Obligations
Victoria Hargrove and Nathan Chu of Hargrove & Liddell LLP, who served as personal legal counsel to Marcus Elliot Harding throughout the negotiation, owe duties of confidentiality to their client under the same categories of obligation that bind Calderwood & Harkness to Northgate: their engagement agreement with Harding, the New York Rules of Professional Conduct, and the attorney-client privilege (assuming Hargrove & Liddell are admitted in New York or subject to New York rules by virtue of practice in the jurisdiction).
Of greater relevance to this memorandum, Hargrove & Liddell received substantial volumes of Northgate's Confidential Information during the negotiation, including detailed Board positions, Remuneration Committee deliberations, internal financial data, compensation benchmarking analyses prepared by Whitmore Hobson LLP, and ISS/proxy advisory analyses prepared by Veltrano Proxy Advisors, Inc. All such information is subject to the NDA's confidentiality restrictions and to the return/destruction obligations triggered by the termination of negotiations. As discussed in Section IV below, we have included a demand for return or destruction of Northgate's Confidential Information in the formal termination letter transmitted to Hargrove & Liddell on September 12, 2024, and we recommend a follow-up communication with specific instructions and a compliance deadline.
E. Kensington Partners and Other Third-Party Obligations
Multiple third-party advisors and consultants participated in or had access to confidential information during the Northgate-Harding negotiation process. Each is bound by its own set of confidentiality obligations, as follows:
Kensington Partners Ltd. Kensington Partners, the executive search firm retained by Northgate's Board on March 1, 2024, with Antonia Blythe serving as managing director of the engagement team, is bound by the terms of its engagement letter with Northgate to maintain confidentiality regarding all aspects of the CEO search process, including the identity of candidates, the status of discussions, and the terms under negotiation. We understand that the engagement letter provides for a search fee of £1,200,000, payable in three tranches, the third of which remains unpaid as a consequence of the collapse of the Harding negotiation. Kensington Partners' confidentiality obligations survive the termination of the search engagement and are independent of the NDA between Northgate and Harding.
Moorfield Bates LLP. Moorfield Bates LLP, the Company's UK employment solicitors, with Simon Aldridge (partner) and Hannah Carmichael (senior associate) advising on the UK-law aspects of the proposed dual employment structure, are bound by their engagement letter with Northgate and by the professional obligations of solicitors under the Solicitors Regulation Authority Standards and Regulations. Their participation related primarily to the structuring of the secondary UK service agreement with Northgate PLC and associated matters of English employment law.
Whitmore Hobson LLP. Whitmore Hobson LLP, the executive compensation consulting firm retained by the Remuneration Committee under the direction of Dr. Rachel Whitmore, prepared the compensation benchmarking analysis used by the Board in formulating the proposed compensation package. Whitmore Hobson's engagement with the Remuneration Committee is a standing arrangement, and their confidentiality obligations are governed by the terms of that engagement and by professional norms applicable to compensation consultants.
Galloway & Partners. Galloway & Partners, the Company's external auditors, with Clive Warburton as lead engagement partner, were consulted regarding the accounting treatment of the proposed equity awards under ASC 718 (US GAAP) and IFRS 2 (International Financial Reporting Standards). Their confidentiality obligations arise from their audit engagement letter and from professional standards applicable to independent auditors.
Veltrano Proxy Advisors, Inc. Veltrano Proxy Advisors, Inc., with Sandra Kolb serving as the principal consultant, provided analysis of shareholder sensitivity to CEO compensation quantum and change-in-control provisions, with particular reference to ISS and Tarrant Partners LLC voting guidelines. Veltrano's engagement letter with Northgate contains standard confidentiality provisions.
No affirmative document return or destruction action is required with respect to these third-party advisors beyond confirming their awareness that negotiations have terminated and that their respective confidentiality obligations survive. The information held by each advisor consists primarily of work product prepared for or on behalf of Northgate, and their retention of such work product is governed by the terms of their own engagement letters and applicable professional obligations.
III. Categories of Confidential Information Exchanged
The confidential information exchanged during the June 4 – September 12, 2024 negotiation falls into three broad categories, each of which raises distinct considerations for post-termination handling.
A. Northgate Information Provided to Harding / Hargrove & Liddell
During the course of negotiations, substantial Northgate confidential information was shared with Harding and his counsel at Hargrove & Liddell. This information includes, but is not limited to, the following:
• Board and Remuneration Committee deliberations. Detailed positions adopted by the Board and the Remuneration Committee at various stages of the negotiation, including internal governance communications regarding acceptable compensation ranges, equity grant parameters, change-in-control provisions, and severance terms. This includes the positions and preferences of individual Remuneration Committee members: Geoffrey Stanton (Chair), Dame Philippa Thornton-Hale, Lucinda Farrow, and Dr. Tomás Herrera.
• Financial information of the Company. Detailed financial data provided to Harding to facilitate his evaluation of the CEO opportunity, including NTP's FY2023 revenue of £4.26 billion (approximately $5.43 billion at prevailing exchange rates), EBITDA of £1.14 billion (approximately $1.45 billion), market capitalization of approximately £8.7 billion (approximately $11.1 billion) as of June 2024, the NTP ordinary share price of £12.45 on the London Stock Exchange, the ADR price of $15.87 on the New York Stock Exchange, and total shares outstanding of approximately 699 million. Certain forward-looking financial projections and strategic planning materials were also shared under the NDA.
• Compensation benchmarking data. The compensation benchmarking analysis prepared by Whitmore Hobson LLP for the Remuneration Committee, which included peer group comparisons, market percentile data, and recommended compensation ranges for the CEO position.
• Equity plan details. Information regarding the Northgate Telecommunications PLC 2022 Omnibus Incentive Plan, including the remaining share pool of 14.2 million shares available for issuance, plan terms and conditions, and the proposed allocation for the CEO equity grant.
• ISS/proxy advisory analysis. The analysis prepared by Veltrano Proxy Advisors, Inc. regarding anticipated shareholder sensitivity to CEO compensation quantum and change-in-control provisions, including modeling of potential ISS and Tarrant Partners LLC voting recommendations under various compensation scenarios.
• D&O insurance information. Details of the Company's directors' and officers' insurance program, including the Ashdown Surety & Insurance Co. policy (Policy No. ASI-D&O-NTP-2024-4471), with coverage limits of $50 million per occurrence and $100 million in the aggregate, which was relevant to the negotiation of the indemnification provisions of the proposed employment agreement.
• Remuneration Committee membership and positions. The identities, roles, and individual negotiating positions of the members of the Remuneration Committee, as enumerated above.
• CEO succession details. Information regarding the planned retirement of Sir Alistair Kemble, the outgoing Chief Executive Officer, effective December 31, 2024, and the Board's succession planning timeline and process.
• Strategic plans related to CEO transition. Certain strategic plans and organizational structure considerations related to the CEO transition, including contemplated changes to the senior leadership team and reporting lines.
• Dual employment contract architecture. Detailed information regarding the proposed dual US/UK employment structure, consisting of a primary employment agreement governed by New York law between Harding and Northgate Telecommunications US, Inc. (the Company's US subsidiary) and a secondary UK service agreement between Harding and Northgate Telecommunications PLC, including the tax and regulatory rationale for the dual structure.
B. Harding Information Provided to NTP / Calderwood & Harkness
Reciprocally, Harding and Hargrove & Liddell shared substantial personal and financial information of Harding with Northgate and Calderwood & Harkness, including:
• Current compensation at Marlowe Asset Management Digital Holdings, Inc. Detailed breakdown of Harding's current total target compensation at Marlowe Asset Management, including base salary of $1,450,000, target annual bonus of $2,175,000 (150% of base salary), long-term incentive target of $7,500,000, and total target compensation of $11,125,000.
• Unvested equity at Marlowe Asset Management. Information regarding Harding's unvested equity holdings at Marlowe Asset Management, with an estimated forfeiture value of $23,400,000, which was a central point of negotiation in determining the make-whole equity grant proposed by Northgate.
• Existing Marlowe Asset Management employment agreement terms. Detailed terms of Harding's existing employment agreement with Marlowe Asset Management, including change-in-control provisions providing for a payment of three times base salary plus bonus and full vesting acceleration, as well as a 12-month post-termination US non-compete covenant, the scope and enforceability of which were analyzed by Calderwood & Harkness in connection with the Northgate negotiation.
• Personal career history and background information. Comprehensive career history, including Harding's 28-year career in the telecommunications and technology sectors, his prior role as Executive Vice President at Meridian Wireless Corp. from 2010 to 2017, his recruitment to Marlowe Asset Management as Chief Operating Officer in 2017, and his track record of growing Marlowe Asset Management's SaaS annual recurring revenue from $120 million to $1.8 billion during his tenure.
• Personal residence information. Harding's residential address at 14 Gramercy Park South, Apartment 12A, New York, New York 10003, which was disclosed in connection with certain tax and relocation analyses.
• Section 280G base amount calculation inputs. Data necessary for the analysis of potential Section 280G excise tax exposure, including Harding's average W-2 compensation from Marlowe Asset Management for the five-year period from 2019 through 2023, in the amount of $7,840,000, which served as the foundation for the base amount calculation and the best-net versus gross-up analysis.
C. Negotiation Materials (Jointly Sensitive)
In addition to the category-specific information described above, the negotiation generated a substantial body of materials that are jointly sensitive — i.e., materials that contain or reflect the confidential information of both parties and that document the substance and trajectory of the negotiation itself. These materials include:
• All five versions of the term sheet (Version 1 through Version 5-Final), each reflecting successive rounds of negotiation and compromise on key terms including base salary, annual bonus, sign-on bonus, make-whole equity grant, annual equity grant, change-in-control provisions, severance terms, restrictive covenants, and clawback provisions.
• Draft 1 of the Executive Employment Agreement, prepared by Calderwood & Harkness and transmitted to Hargrove & Liddell on July 22, 2024, and Draft 2 of the Executive Employment Agreement, reflecting revisions based on the Hargrove & Liddell redline of Draft 1 and further Board instructions, transmitted on August 12, 2024.
• The Hargrove & Liddell redline of Draft 1, received by Calderwood & Harkness on August 5, 2024, containing 88 comments and proposed revisions, and the Hargrove & Liddell redline of Draft 2, received on August 19, 2024, containing 42 comments and proposed revisions.
• Blackline comparisons generated between successive versions of the term sheet and the employment agreement drafts.
• All negotiation call notes, encompassing five telephone conferences between the principal attorneys and, in certain instances, the principals and their advisors, conducted on June 24, July 1, July 8, July 12, and July 19, 2024.
• Meeting notes from the August 26, 2024 in-person principals meeting held at 600 Lexington Avenue, New York, New York, attended by Harding, Hargrove, Geoffrey Stanton (Remuneration Committee Chair), Elaine Whitford, you, and me.
• Formal correspondence exchanged during the negotiation, including the final compromise cover letter dated September 3, 2024, and the rejection letter from Hargrove & Liddell dated September 9, 2024.
• Section 280G analyses and best-net versus gross-up calculations, prepared by Calderwood & Harkness in consultation with Northgate's tax advisors.
IV. Document Handling Protocols
Based on the foregoing analysis of confidentiality obligations and categories of information, I recommend the following document handling protocols.
A. Documents to Be Returned or Destroyed by Hargrove & Liddell / Harding
Pursuant to the return/destruction provisions of the NDA, Calderwood & Harkness should request — and has requested, in the formal termination letter dated September 12, 2024 — that Hargrove & Liddell return or destroy all Confidential Information received from or on behalf of Northgate during the course of the negotiation. The termination letter includes a general reference to the NDA's return/destruction obligation, but I recommend that we follow up with a more specific, itemized written request to ensure that all categories of Northgate Confidential Information are addressed comprehensively.
Specifically, the follow-up request should demand the return or destruction of the following categories of materials:
• All versions of the term sheet (Versions 1 through 5-Final) and all drafts of the Executive Employment Agreement (including Drafts 1 and 2 as provided by Calderwood & Harkness), together with all transmittal correspondence, cover letters, and related communications.
• All compensation benchmarking data and analyses provided by or on behalf of Northgate, including the Whitmore Hobson compensation benchmarking report and any summaries, extracts, or analyses thereof.
• All equity plan information, including materials relating to the Northgate Telecommunications PLC 2022 Omnibus Incentive Plan and the remaining share pool.
• The ISS/proxy advisory analyses prepared by Veltrano Proxy Advisors, Inc. and shared with Hargrove & Liddell during the negotiation, including any summaries or derivative analyses.
• All Board and Remuneration Committee positions, deliberations, and internal governance communications shared with Hargrove & Liddell during the course of the negotiation.
• D&O insurance policy details, including any information regarding the Ashdown Surety & Insurance Co. policy.
• Any copies, summaries, memoranda, analyses, notes, or other materials derived from, incorporating, or reflecting Northgate Confidential Information, whether in physical or electronic form.
The follow-up request should establish a reasonable deadline for compliance — I recommend 14 calendar days from the date of the request — and should demand written certification of destruction, signed by Victoria Hargrove or another authorized attorney of Hargrove & Liddell, if materials are destroyed rather than returned. The certification should confirm that all copies of the specified materials, in whatever form, have been destroyed and that no copies have been retained except as permitted by the NDA.
We should note that Hargrove & Liddell may assert, consistent with their professional responsibility obligations and standard practice for law firms, the right to retain one archival copy of Northgate Confidential Information for their own internal records, compliance with document retention requirements, and defense against potential malpractice claims. This is a common and generally accepted practice. If H&L asserts this right, we should confirm that any such archival copy will remain subject to the NDA's confidentiality restrictions for the full duration of the survival period and that the archival copy will be maintained in a secure manner with access limited to authorized personnel of Hargrove & Liddell.
B. Documents to Be Returned or Destroyed by NTP / Calderwood & Harkness (Harding's Information)
Northgate and Calderwood & Harkness have reciprocal obligations under the NDA to return or destroy Harding's Confidential Information upon termination of negotiations. Compliance with these reciprocal obligations is important both as a matter of contractual duty and as a demonstration of good faith that will support any future enforcement action if Harding or his counsel fail to comply with their own obligations.
I recommend the following approach:
Return of original documents. To the extent that Harding or Hargrove & Liddell provided original documents (as opposed to copies) to Northgate or Calderwood & Harkness during the negotiation, such original documents should be returned to Harding via Hargrove & Liddell. Based on my review of the file, I do not believe that any original documents were provided; rather, all information appears to have been exchanged in electronic or copy form. This should be confirmed with the file.
Destruction of copies. Copies of Harding's personal financial information, Pemberton Investors details, Marlowe Asset Management employment agreement analysis, Section 280G calculation inputs, and personal residence information held by Northgate's internal teams should be destroyed in a secure manner. I recommend coordinating with Ms. Whitford to identify all Northgate personnel who received or have access to such information and to ensure comprehensive destruction across all repositories, including email accounts, shared drives, and physical files.
Calderwood & Harkness retention rights. Under the Firm's document retention policy and professional responsibility obligations, Calderwood & Harkness is permitted to retain a complete copy of the matter file for 1022-00004 in our closed-matter archives, including work product that contains or references Harding's Confidential Information. This retention is necessary for multiple purposes, including defense against potential malpractice claims, conflicts checking in connection with future engagements, regulatory compliance, and the ability to respond to any future inquiries from or on behalf of the client. The Firm's retention of such materials is consistent with standard practice and with the archival carve-out typically found in NDAs of this type. All materials retained by the Firm will remain subject to applicable confidentiality obligations, including the NDA, for the duration of the survival period and to the Firm's own confidentiality obligations to Northgate indefinitely.
Notification to Harding. I recommend that, in connection with our compliance notification to Hargrove & Liddell, we inform them that Northgate and its advisors have complied with their reciprocal return/destruction obligations under the NDA, but that limited archival copies will be retained by Northgate's legal department and by Calderwood & Harkness in accordance with standard legal and regulatory document retention requirements, subject to the continuing confidentiality restrictions of the NDA. This notification promotes transparency and reduces the risk of any future allegation that the reciprocal obligations were not honored.
C. Calderwood & Harkness Internal File
The complete matter file for 1022-00004 should be organized, indexed, and archived in accordance with Calderwood & Harkness's standard document retention policy for closed matters. I recommend the following specific steps:
All documents bearing privilege designations — including documents marked "Privileged and Confidential," "Attorney-Client Privileged," or "Attorney Work Product" — should retain those designations in the archived file. No privilege designations should be removed or altered during the archiving process.
Devon Archer is preparing a separate Document Retention and Privilege Log Memorandum, which is expected to be completed by September 17, 2024. That memorandum will provide a comprehensive catalog of all documents in the file, organized by category and date, with privilege designations noted for each item. I have coordinated with Devon on the scope and organization of that memorandum, and the categories outlined below are consistent with the approach we have discussed.
Based on my preliminary assessment, the file contains the following categories of materials (the precise document count will be confirmed in Devon's memorandum):
• Engagement letter between Northgate and Calderwood & Harkness, dated June 4, 2024, and the associated conflicts clearance memorandum dated June 3, 2024.
• New matter intake form for 1022-00004.
• Eight research memoranda prepared by the engagement team during the initial phase of the engagement (June 6–9, 2024), covering topics including New York employment law requirements for executive agreements, Section 280G and golden parachute analysis, UK dual employment structuring considerations, non-compete enforceability under New York law post-2024 developments, equity compensation plan analysis, D&O indemnification provisions, change-in-control best practices, and clawback policy compliance under SEC Rule 10D-1.
• All five versions of the term sheet (Versions 1 through 5-Final) and associated transmittal correspondence.
• All five sets of negotiation call notes (June 24, July 1, July 8, July 12, and July 19, 2024).
• Draft 1 (July 22, 2024) and Draft 2 (August 12, 2024) of the Executive Employment Agreement.
• Hargrove & Liddell redlines of Draft 1 (received August 5, 2024) and Draft 2 (received August 19, 2024), together with Calderwood & Harkness's internal analysis memoranda responding to each redline.
• Blackline comparisons between successive drafts and term sheet versions.
• Principals meeting preparation materials, agenda, and notes for the August 26, 2024 in-person meeting.
• The final compromise proposal transmitted September 3, 2024, and the associated cover letter.
• The rejection correspondence from Hargrove & Liddell dated September 9, 2024.
• Board call notes from the September 10, 2024 Board telephonic meeting and the Board resolution adopted September 12, 2024 terminating negotiations.
• The formal termination correspondence to Hargrove & Liddell dated September 12, 2024.
• All internal and external email correspondence related to the matter.
• Billing records, time entries, and invoices for the engagement.
The archived file should be maintained in a secure, access-restricted repository consistent with the Firm's standard procedures for closed matters containing sensitive client information.
D. Third-Party Advisors
I recommend confirming with Ms. Whitford that each of the following third-party advisors has been or will be notified that negotiations with Harding have terminated and that their respective confidentiality obligations survive:
Kensington Partners Ltd. (Antonia Blythe). A separate notification letter from Calderwood & Harkness, dated September 13, 2024, has been prepared for transmission to Kensington Partners confirming the termination of negotiations and reminding the firm of its continuing confidentiality obligations under its engagement letter with Northgate. The notification also addresses the status of the outstanding third tranche of the search fee.
Moorfield Bates LLP (Simon Aldridge, Hannah Carmichael). As Northgate's UK employment solicitors, Moorfield Bates should be notified by Northgate's General Counsel that negotiations have terminated and that the UK service agreement workstream is suspended. Their confidentiality obligations are governed by their engagement letter and by SRA professional standards.
Whitmore Hobson LLP (Dr. Rachel Whitmore). As the standing compensation consultant to the Remuneration Committee, Whitmore Hobson should be informed that the Harding negotiation has concluded. No specific action is required with respect to their retention of work product, as their engagement with the Committee is ongoing and the benchmarking analysis may be relevant to any future CEO search.
Galloway & Partners (Clive Warburton). The Company's auditors were consulted on a limited basis regarding the ASC 718 / IFRS 2 accounting treatment of the proposed equity awards. They should be informed that the negotiation has terminated and that no equity awards were made. Their confidentiality obligations are governed by their audit engagement letter and by professional auditing standards.
Veltrano Proxy Advisors, Inc. (Sandra Kolb). The proxy advisory and governance consultant should be notified that the negotiation has terminated and reminded that the analysis they prepared regarding shareholder sensitivity to CEO compensation remains confidential.
No affirmative document return or destruction request is necessary with respect to any of these third-party advisors. Their retention of work product is governed by their own engagement terms and applicable professional obligations, and there is no indication that any of these advisors holds information that would require special handling beyond continued compliance with their existing confidentiality obligations.
V. Specific Risks and Concerns
A. Risk of Leak / Unauthorized Disclosure
Given the high-profile nature of the CEO search for a dual-listed public company — Northgate is listed on the London Stock Exchange (LON: NTP) and its American Depositary Receipts trade on the New York Stock Exchange (NYSE: NTPC), with a combined market capitalization of approximately £8.7 billion / $11.1 billion — there is a meaningful and non-trivial risk that the failed negotiation could be leaked to the financial press or to market participants. CEO searches at companies of this scale attract significant attention from financial journalists, industry analysts, and activist investors, and the identity of a candidate of Harding's stature would be a highly newsworthy development.
The NDA's treatment of the fact of negotiations as Confidential Information is critical in this context. As noted above, neither party nor its advisors may disclose that discussions took place, that Harding was under consideration, or that negotiations have terminated, except as required by applicable law or regulation. I recommend that Northgate take proactive steps to reinforce this obligation among all internal personnel with knowledge of the negotiation. Specifically, I recommend that Ms. Whitford circulate a confidential internal reminder to all Northgate personnel involved in or aware of the Harding discussions, including the following individuals:
• Dame Philippa Thornton-Hale (Non-Executive Director; Remuneration Committee member)
• Geoffrey Stanton (Non-Executive Director; Remuneration Committee Chair)
• Lucinda Farrow (Non-Executive Director; Remuneration Committee member)
• Dr. Tomás Herrera (Non-Executive Director; Remuneration Committee member)
• Elaine Whitford (Senior Vice President and Group General Counsel)
• Priya Narayanan (Deputy General Counsel)
• Jonathan Briggs (Chief Human Resources Officer)
The reminder should emphasize that the existence, substance, and termination of the negotiations are to be treated as strictly confidential; that no discussions with the press, analysts, or other external parties are permitted; and that any inquiries regarding CEO succession should be directed to the Company's communications or investor relations function.
No obligation to publicly disclose the failed negotiation exists under SEC rules (no definitive agreement was reached and no material commitment was made), NYSE listing standards, or FCA disclosure rules (specifically, the UK Market Abuse Regulation and the FCA Listing Rules). However, an inadvertent or unauthorized leak could create significant market disruption and reputational issues for both Northgate — which would face immediate questions about the stability and direction of its CEO succession process — and Harding, whose continuing role at Marlowe Asset Management Digital Holdings, Inc. could be materially affected. Separate guidance on public disclosure obligations and preparation of a holding statement has been provided to Ms. Whitford, as noted above.
B. Harding's Continuing Employment at Marlowe Asset Management
Marcus Elliot Harding remains President and Chief Operating Officer of Marlowe Asset Management Digital Holdings, Inc. (NYSE: VDHI). Disclosure of his participation in CEO negotiations with Northgate could have material adverse implications for Harding's relationship with Marlowe Asset Management's Board of Directors and senior management, could trigger provisions of his existing Marlowe Asset Management employment agreement (including potential questions about his ongoing commitment to the company and potential constructive termination issues), and could affect Marlowe Asset Management's stock price if the market perceives that a key executive was actively seeking to depart.
These considerations reinforce the mutual interest of both Northgate and Harding in strict adherence to the confidentiality obligations imposed by the NDA and common law. It is in neither party's interest for the negotiations to become public, and this alignment of interests should support cooperative compliance with the document handling protocols recommended in this memorandum.
We should note, however, that the mutual interest in confidentiality does not eliminate the risk of a leak from sources outside the immediate control of the parties and their counsel. The number of individuals with knowledge of the negotiations — across the Northgate Board and management team, Hargrove & Liddell, Kensington Partners, and the various third-party advisors — is substantial, and each additional individual with knowledge increases the probability of an inadvertent disclosure. This underscores the importance of the proactive internal notification recommended in Section VI below.
C. Potential Future Dealings
Although negotiations have terminated and the Board's resolution of September 12, 2024 reflects a present determination to end discussions with Harding, there is a possibility — however remote at the present time — that circumstances could change and that discussions could resume at some future date. This could occur if the Board's search for an alternative CEO candidate is unsuccessful, if Sir Alistair Kemble's retirement timeline changes, or if other developments make Harding an attractive candidate again.
Additionally, the telecommunications and technology industries are sufficiently compact that Northgate and Harding may have future professional interactions in other contexts — as counterparties in commercial transactions, as industry colleagues, or in connection with a subsequent CEO search process.
For these reasons, I recommend that the document retention and archiving protocols for the matter file be designed to preserve the ability to reference the negotiation history, including the substantive positions taken by each party, the key deal points on which negotiations foundered, and the relevant financial and compensation data. The Firm's closed-matter archive of 1022-00004 should serve this purpose, and I recommend flagging the file for potential future relevance in the event a new engagement arises involving either Northgate's CEO succession or any other matter involving Harding.
VI. Recommended Actions
Based on the foregoing analysis, I recommend the following specific actions:
1. Confirm NDA terms. As a threshold matter, we should obtain and review a fully executed copy of the NDA between Northgate and Harding to confirm the specific survival period, the precise mechanics of the return/destruction obligation, any limitations on the archival carve-out, and any other provisions relevant to post-termination compliance. I will coordinate with Elaine Whitford to obtain the executed NDA and will circulate a supplemental memorandum if the NDA terms differ materially from the substantially final form in our files.
2. Formal follow-up request to Hargrove & Liddell. The formal termination letter sent on September 12, 2024, which contains a general reference to the NDA's return/destruction obligation, should be followed up with a specific, itemized written request for the return or destruction of all Northgate Confidential Information held by Hargrove & Liddell and Harding. The follow-up request should establish a 14-day deadline for compliance and should demand written certification of destruction, signed by a responsible attorney of Hargrove & Liddell, if materials are destroyed rather than returned. I will prepare a draft of this follow-up request for your review.
3. Internal notification at Northgate. I recommend that Ms. Whitford circulate a confidential internal memorandum to all Northgate personnel involved in or aware of the Harding negotiation — including the Remuneration Committee members, the General Counsel's office, and the Chief Human Resources Officer — reminding them of their ongoing confidentiality obligations with respect to the existence, substance, and termination of the negotiations, and directing that any external inquiries be referred to the Company's communications or investor relations function. I will prepare a suggested draft for Ms. Whitford's consideration.
4. Reciprocal compliance. I will coordinate with Ms. Whitford to ensure that Northgate complies with its own reciprocal obligations under the NDA to return or destroy Harding's Confidential Information. This will include identifying all Northgate personnel and systems that hold Harding's personal financial data, Pemberton Investors information, and other Harding Confidential Information, and arranging for the secure destruction of such materials with appropriate archival carve-outs for the Company's legal files. We will then provide appropriate notification to Hargrove & Liddell of Northgate's compliance.
5. Advisor notifications. I will confirm with Ms. Whitford that all third-party advisors engaged in connection with the negotiation — Kensington Partners Ltd., Moorfield Bates LLP, Whitmore Hobson LLP, Galloway & Partners, and Veltrano Proxy Advisors, Inc. — have been notified that negotiations have terminated and have been reminded of their surviving confidentiality obligations. As noted, the Kensington Partners notification letter from Calderwood & Harkness, dated September 13, 2024, has already been prepared for transmission.
6. Calderwood & Harkness file archiving. I will complete the organization, indexing, and archiving of the 1022-00004 matter file, with proper privilege designations maintained on all documents, in coordination with Devon Archer's forthcoming Document Retention and Privilege Log Memorandum, which is anticipated to be completed by September 17, 2024. The archived file will be maintained in the Firm's closed-matter repository with appropriate access restrictions and a flag for potential future relevance.
7. Monitor for leaks. I recommend that Northgate's communications and investor relations team implement monitoring for any press reports, analyst commentary, or social media activity regarding the failed CEO negotiation with Harding. In addition, I recommend that the Company prepare a holding statement — a brief, measured response that can be issued promptly if the negotiation becomes public — to mitigate the reputational and market impact of any unauthorized disclosure. We have provided preliminary guidance to Ms. Whitford on the content of such a holding statement in connection with the public disclosure analysis referenced above.
VII. Conclusion
Multiple overlapping sources of confidentiality obligations — contractual (the NDA), common-law (implied duties under New York and English law), and professional (attorney-client privilege, professional responsibility rules, and engagement-specific duties) — protect the substantial body of confidential information exchanged during the June 4 – September 12, 2024 negotiation between Northgate Telecommunications PLC and Marcus Elliot Harding. These obligations survive the termination of negotiations and will continue in effect for a period of at least two years (subject to confirmation of the NDA's specific survival term), and in certain respects indefinitely.
Prompt and diligent execution of the recommended document handling protocols — including the formal request to Hargrove & Liddell for return or destruction of Northgate Confidential Information, reciprocal compliance by Northgate with respect to Harding's information, internal notifications at the Company, third-party advisor notifications, and comprehensive archiving of the Calderwood & Harkness matter file — will minimize the risk of unauthorized disclosure and preserve the integrity of the closed matter file for any future reference that may be required.
I am available to discuss any of the foregoing with you at your convenience, and I am prepared to coordinate directly with Elaine Whitford and her team at Northgate on the implementation of these recommendations. I will also coordinate with Devon Archer on the completion of the Document Retention and Privilege Log Memorandum.
Matter Reference: 1022-00004 Matter Status: Closed — Terminated (September 12, 2024)
James Underwood Associate Calderwood & Harkness LLP 1585 Broadway, 38th Floor New York, New York 10036 Direct: (212) 555-4847 junderwood@calderwoodharkness.com
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