1022-00004 · Northgate Telecommunications PLC · Term Sheet Negotiation

call-notes-negotiation-2-july-1.docx DOCUMENT Labor & Employment

62 / 75 ← → ✕

CALL NOTES — CONFIDENTIAL / ATTORNEY-CLIENT PRIVILEGED

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT These notes are protected by the attorney-client privilege and the work product doctrine. Do not distribute, copy, or forward without prior authorization from Renata Vasquez, Partner, Calderwood & Harkness LLP.

I. ATTENDEES

For Northgate Telecommunications PLC (via Calderwood & Harkness LLP):

• Renata Vasquez — Partner, Calderwood & Harkness LLP (lead counsel for NTP)

• James Underwood — Associate, Calderwood & Harkness LLP

• Devon Archer — Associate, Calderwood & Harkness LLP (note-taker)

For Marcus Elliot Harding (via Hargrove & Liddell LLP):

• Victoria Hargrove — Partner, Hargrove & Liddell LLP (lead counsel for Harding)

• Nathan Chu — Associate, Hargrove & Liddell LLP

Not on the Call (but referenced during discussion):

• Elaine Whitford — SVP & Group General Counsel, Northgate Telecommunications PLC. Vasquez indicated at the outset of the call that she had consulted with Whitford and the Remuneration Committee prior to this call and was authorized to discuss the positions set forth below on behalf of NTP.

• Geoffrey Stanton — Chair, Remuneration Committee, Northgate Telecommunications PLC Board of Directors. Referenced as having provided direction to the NTP negotiating team on the company's positions regarding restrictive covenants and compensation terms.

• Marcus Elliot Harding — CEO candidate; not personally present on this call. Represented throughout by Hargrove and Chu.

II. BACKGROUND / CONTEXT

This is the second in a series of term-sheet negotiation calls between Calderwood & Harkness LLP (on behalf of Northgate Telecommunications PLC ("NTP")) and Hargrove & Liddell LLP (on behalf of Marcus Elliot Harding ("Harding")) relating to the proposed employment of Harding as Group Chief Executive Officer of NTP. The initial call (Call #1) took place on June 24, 2024.

The discussion on this call was based on the NTP counter-proposal term sheet, version 3 ("Term Sheet v3"), dated June 24, 2024, which was circulated by Calderwood & Harkness to Hargrove & Liddell following Call #1. Term Sheet v3 reflected NTP's revised positions on certain issues following the initial exchange of proposals and the discussion at Call #1.

Call #1 focused primarily on the change-in-control ("CIC") severance multiplier, the non-compete duration, and garden leave provisions. Those discussions did not yield resolution on any of those three points, though both sides acknowledged progress in understanding each other's respective positions. In particular, following Call #1, NTP reduced its proposed non-compete duration from 24 months to 18 months as a concession, which was reflected in Term Sheet v3.

This call (Call #2) was scheduled to address the remaining restrictive covenant details — specifically, geographic scope of the non-compete, the activity-based definition of the non-compete scope, and the non-solicitation provisions — as well as to revisit certain compensation elements where progress might be achievable. Additionally, both sides used portions of this call to confirm areas of prior agreement and to clarify outstanding positions on compensation items.

The CIC severance terms (including the multiplier, Section 280G tax gross-up, and the Board turnover trigger within the CIC definition) were deferred by mutual agreement to a future call. Both sides acknowledged at the outset of this call that they require further internal consultation on those issues before engaging in substantive discussion. The CIC terms were identified as the most significant remaining area of disagreement, and both sides expressed a preference for dedicating a full call to those topics.

III. AGENDA ITEMS DISCUSSED

1. Restrictive Covenant — Non-Compete Geographic Scope

Northgate's Position (per Term Sheet v3):

NTP's current position, as reflected in Term Sheet v3, proposes an 18-month post-termination non-compete (reduced from the original 24-month duration in Term Sheet v1, as a concession following the discussions at Call #1) with a worldwide geographic scope. The worldwide scope was carried forward from Term Sheet v1 without modification.

Vasquez's Explanation:

Vasquez opened the discussion on this topic by providing the rationale for NTP's insistence on worldwide geographic scope. She stated that worldwide scope is warranted given the nature of NTP's global operations. Vasquez noted the following specific points in support of NTP's position:

• NTP operates in over 40 countries across multiple continents, with a presence spanning Europe, the Middle East, Africa, Asia-Pacific, and the Americas.

• NTP employs approximately 22,500 employees globally.

• Harding, as Group CEO, would have access to commercially sensitive information across all of NTP's markets — including competitive strategy, pricing data, customer information, technology roadmaps, and acquisition pipeline information — and this information is not limited to any particular geographic region.

• NTP's UK headquarters is located at 45 Canary Wharf Tower, One Canada Square, London E14 5AB. Its US operations headquarters is located at 600 Lexington Avenue, 38th Floor, New York, NY 10022. Operations extend across Europe, the Middle East, Africa, and Asia-Pacific.

• A geographic limitation to only certain regions would leave significant competitive gaps, as NTP competes for enterprise telecom contracts and SaaS platform deployments in all of its operating markets, and a competitor armed with the confidential information that Harding would possess as Group CEO could inflict meaningful competitive harm in any of those markets.

Hargrove's Counter-Position:

Hargrove responded by stating that a worldwide non-compete is unreasonable and likely unenforceable under New York law, which is the governing law of the proposed employment agreement. Hargrove stated that Harding's position is that the geographic scope of the non-compete should be limited to North America and Western Europe, which Hargrove characterized as consistent with NTP's principal revenue-generating markets. Hargrove noted that these two regions collectively account for the substantial majority of NTP's revenues and represent the markets in which Harding would be most likely to compete, and that a restriction covering these regions would provide NTP with meaningful and proportionate protection.

Hargrove's Supporting Arguments:

Hargrove cited the following additional points in support of Harding's position:

• Harding's existing non-compete obligation at Marlowe Asset Management Digital Holdings, Inc. (headquartered at 200 Technology Way, Suite 4000, San Jose, CA 95110), his current employer, is limited to the United States only with a 12-month duration. Moving to a worldwide scope for 18 months would constitute a significant and unreasonable escalation of Harding's restrictive covenant obligations relative to his current situation.

• Under New York law, non-compete provisions are subject to a reasonableness test that evaluates, among other factors, the geographic scope in relation to the employer's legitimate business interests. Hargrove stated that New York courts have historically scrutinized worldwide non-competes and have narrowed or voided those that are deemed broader than necessary to protect the employer's legitimate interests.

• Hargrove did not cite specific case law on this call but indicated that she would provide New York case authorities in support of Harding's position in the next markup or in a supplemental letter, if needed.

Vasquez's Response:

Vasquez pushed back on the comparison to Harding's existing Marlowe Asset Management non-compete, distinguishing NTP from Marlowe Asset Management on several grounds:

• NTP is a UK-headquartered global telecommunications and SaaS company that is dual-listed on both the London Stock Exchange (trading under the ticker LON: NTP) and the New York Stock Exchange (trading under the ticker NYSE: NTPC). NTP's global footprint is substantially broader than Marlowe Asset Management's.

• NTP reported FY2023 revenue of £4.26 billion (approximately $5.43 billion at current exchange rates), with revenue derived from operations across all major global regions.

• The Group CEO role at NTP involves Group-level responsibility for all of NTP's worldwide operations, not merely the US business. This is qualitatively different from Harding's current role at Marlowe Asset Management, which, while a CEO-level position, is centered on a US-focused technology business.

• Vasquez stated that the comparison to the Marlowe Asset Management non-compete is therefore not an appropriate benchmark for determining the reasonable scope of a non-compete in connection with the NTP Group CEO role.

Underwood's Observation:

Underwood noted that Calderwood & Harkness's internal analysis on this point — referencing the memorandum dated June 6, 2024, on New York non-compete enforceability prepared by the firm's employment and restrictive covenants practice group — had flagged that a worldwide geographic scope may face enforceability challenges under New York's reasonableness test. Underwood also noted that there is pending New York state legislation that proposes significant restrictions on the use and enforcement of non-compete agreements, and that while the legislation has not yet been enacted, it creates an additional layer of uncertainty regarding the enforceability of broadly scoped non-competes under New York law. Underwood acknowledged that this is a point requiring further internal discussion with the Remuneration Committee before NTP commits to a firm position on geographic scope.

Status:

No agreement was reached on the geographic scope of the non-compete. Hargrove reiterated clearly and firmly that North America and Western Europe represents Harding's maximum acceptable geographic scope, and that Harding will not agree to a worldwide non-compete. Vasquez took the matter under advisement and committed to seek further instruction from the Remuneration Committee, specifically from Geoffrey Stanton (Chair), before the next call. Vasquez did not concede the worldwide scope but acknowledged the enforceability concerns raised by Underwood and Hargrove. This item remains open.

2. Restrictive Covenant — Activity Definition (Non-Compete Scope)

Northgate's Position (per Term Sheet v3):

NTP's current position, as set forth in Term Sheet v3, defines the activity-based restriction of the non-compete as follows: Harding would be prohibited from accepting employment by or providing services to any company that derives more than 15% of its consolidated revenue from (i) telecommunications services, (ii) telecommunications infrastructure, or (iii) enterprise SaaS platforms serving telecom operators.

Vasquez's Rationale:

Vasquez explained NTP's preference for the revenue-based test by emphasizing the following points:

• A revenue-based test provides an objective, measurable standard that can be applied with relative certainty at the time Harding considers post-termination employment opportunities.

• The test avoids subjective disputes over whether a particular employer is or is not a "competitor" of NTP — a determination that could otherwise be highly fact-dependent and prone to litigation.

• The 15% threshold is designed to capture the full competitive landscape in which NTP operates, including both traditional telecommunications companies and the technology/SaaS convergence space. NTP increasingly competes not only with legacy telecom operators but also with technology companies that offer enterprise SaaS solutions to the telecom industry, and the activity definition is intended to reflect this competitive reality.

Hargrove's Counter-Position:

Hargrove stated that the revenue-based test, as proposed by NTP, is overbroad and would capture companies that are not genuine competitors of NTP. Hargrove provided the following specific concern:

• A revenue-based test with a 15% threshold could ensnare large, diversified technology conglomerates that happen to have a telecommunications division or a SaaS product line serving the telecom sector that exceeds 15% of overall revenue, even if that company does not compete directly with NTP in any meaningful sense. Hargrove argued that this would unfairly and unnecessarily restrict Harding's post-termination employment options.

Hargrove stated that Harding's preferred approach is a "scheduled competitor" model. Under this approach, the non-compete would be limited to a specifically enumerated list of named companies that constitute direct competitors of NTP. This list would be agreed upon by both parties at the time of signing the employment agreement and would be attached as a schedule to the agreement. Harding's view is that this approach provides certainty to both sides and ensures that the non-compete is targeted at genuine competitive threats rather than casting an overbroad net.

Hargrove's Proposed Schedule:

Hargrove indicated that Harding's proposed schedule of competitors would include approximately eight (8) named companies. Hargrove did not disclose the identities of these companies on this call, stating that they would be provided in the next redline markup of the term sheet. Hargrove noted that the companies on the proposed schedule would be selected based on direct competitive overlap with NTP in one or more of the following sectors: telecom services, telecom infrastructure, and enterprise SaaS platforms for telecom operators.

Vasquez's Concerns with the Scheduled-Competitor Approach:

Vasquez raised several concerns with Harding's proposed scheduled-competitor approach:

• Static nature of the list: A fixed list of named competitors, agreed upon at the time of signing, does not capture future market entrants or companies that may pivot into NTP's competitive space after the date of the agreement. The telecommunications and SaaS sectors are dynamic, and new competitive threats may emerge during Harding's tenure that would not be captured by a static schedule agreed upon at the outset.

• Narrowness of the list: Eight (8) companies may be too narrow a scope given the breadth of NTP's competitive landscape, which spans multiple sectors (traditional telecom, telecom infrastructure, enterprise SaaS) and multiple geographies.

• No update mechanism: As proposed, there would be no mechanism for updating the schedule of competitors after the agreement is signed. This means that if a significant new competitor emerges during Harding's employment, NTP would have no ability to add that company to the restricted list absent a mutual amendment to the agreement — which Harding could simply refuse.

Underwood's Proposed Hybrid Approach:

Underwood raised the possibility of a hybrid approach that could serve as a compromise between the two positions. Under this hybrid framework:

• A scheduled list of core competitors would be agreed upon at signing and attached as a schedule to the agreement, similar to Harding's proposal.

• This scheduled list would be supplemented by a revenue-based catch-all provision that would apply to companies not listed on the schedule but that derive more than a specified percentage of their consolidated revenue from the relevant activities (telecom services, telecom infrastructure, and enterprise SaaS for telecom).

• Underwood suggested that this hybrid approach would provide certainty (through the scheduled list) while also addressing NTP's concern about future market entrants and competitive shifts (through the revenue-based catch-all).

Hargrove's Response to the Hybrid Proposal:

Hargrove indicated that she would discuss the hybrid concept with Harding but expressed skepticism about the revenue-based catch-all component. Hargrove stated that if any revenue-based catch-all were to be included, it would need to be set at a higher threshold than the 15% proposed in Term Sheet v3 — suggesting a threshold of 25% or 30% of revenue — in order to avoid the overbreadth concerns that Harding has raised. Hargrove did not accept or reject the hybrid proposal outright but indicated it would receive further consideration.

Status:

No agreement was reached on the activity definition for the non-compete. The item remains open. The following next steps were identified:

• Underwood's hybrid proposal (scheduled list + revenue-based catch-all at a higher threshold) is to be explored further by both sides.

• Hargrove will provide the proposed list of approximately eight (8) scheduled competitors in Harding's next markup of the term sheet.

• Calderwood & Harkness will consult internally on the viability and structure of the hybrid approach before the next call.

3. Non-Solicitation of Customers

Northgate's Position (per Term Sheet v3):

NTP's position, as reflected in Term Sheet v3, proposes a 24-month post-termination non-solicitation restriction covering both (a) employees of NTP and its subsidiaries and (b) customers of NTP and its subsidiaries.

Hargrove's Counter-Position:

Hargrove stated that Harding is willing to accept a non-solicitation provision with respect to employees for a period of 18 months post-termination. However, Harding objects to the inclusion of a customer non-solicitation provision in its entirety. Hargrove indicated that Harding's strong preference is that any non-solicitation covenant be limited to employees only, with no restriction on Harding's ability to solicit or engage with NTP's customers following his departure.

Hargrove's Arguments Against Customer Non-Solicitation:

Hargrove advanced the following arguments in support of Harding's objection to the customer non-solicitation:

• Functional equivalence to a non-compete: A Group CEO's relationships are with the company's customers broadly — not merely a discrete subset of accounts. Accordingly, a customer non-solicitation would effectively function as a non-compete in practice, because it would preclude Harding from engaging with the vast majority of any potential future employer's customer base if that employer operates in a space that overlaps with NTP's markets. Hargrove argued that this makes the customer non-solicitation duplicative of, and more restrictive than, the non-compete itself.

• Impracticality of scope and enforcement: NTP's customer base is vast, encompassing both enterprise and consumer segments across global markets. Hargrove argued that defining the scope of the restriction (i.e., which "customers" are covered) and enforcing compliance would be impractical given the breadth of NTP's business. A Group CEO does not maintain individual customer relationships in the way that a sales executive or account manager might; rather, the CEO's role involves oversight of the company's overall customer strategy.

• Market practice: Hargrove stated that, in her experience, customer non-solicitation provisions are not standard market practice for CEO-level employment agreements in the telecommunications and technology sectors. Hargrove indicated that she was not aware of precedent agreements at comparable companies that include a customer non-solicitation for the CEO, though she did not provide specific comparators on this call.

Vasquez's Response:

Vasquez responded that NTP views customer non-solicitation as an important protective measure for the company, particularly with respect to NTP's enterprise SaaS customers. Vasquez emphasized the following:

• Enterprise SaaS customer relationships are long-cycle and high-value, often involving multi-year contracts with significant annual recurring revenue ("ARR"). These relationships are built on deep customer-specific knowledge, including knowledge of the customer's technology infrastructure, integration requirements, and strategic priorities.

• NTP's enterprise telecom contracts similarly involve significant customer-specific commercial and technical information that Harding would acquire in his capacity as Group CEO.

• A customer non-solicitation provision is intended to protect NTP's relationships with these high-value customers from being leveraged by Harding for the benefit of a competitor during the post-termination period.

Underwood's Suggested Middle Ground:

Underwood suggested a possible middle ground that could address both NTP's interest in protecting its key customer relationships and Harding's concern about the overbreadth of a blanket customer non-solicitation. Underwood proposed that the customer non-solicitation could be limited to either:

(a) The top 50 to 100 enterprise customers of NTP, ranked by revenue, at the time of Harding's departure; or

(b) Customers with whom Harding had material personal involvement during his tenure as Group CEO, with "material personal involvement" to be defined in the agreement (e.g., direct participation in negotiations, presentations, or relationship management).

Vasquez indicated that either of these narrowing mechanisms could potentially be explored further with the Remuneration Committee, though she did not commit to either approach on this call. Vasquez noted that the Remuneration Committee's current position is as stated in Term Sheet v3 (full customer non-solicitation for 24 months), and any narrowing would require specific authorization from the Committee.

Status:

• Employee non-solicitation: Tentative conceptual agreement that an employee non-solicitation provision will be included in the agreement. Duration remains disputed — NTP's position is 24 months; Harding's position is 18 months. This gap was not resolved on this call and will be revisited.

• Customer non-solicitation: Significant disagreement remains. Harding objects to customer non-solicitation in its entirety. NTP views it as an important protection. NTP will consider narrowing the scope of the customer non-solicitation as a potential concession, in line with Underwood's suggested middle ground, subject to Remuneration Committee approval.

This item remains open.

4. Progress on Compensation Elements

The parties used a portion of this call to review the status of various compensation elements, some of which were discussed at Call #1 and some of which were addressed in further detail on this call.

(a) Base Salary. Base salary was previously agreed at Call #1 at $1,750,000 per annum. Both Vasquez and Hargrove confirmed on this call that base salary is settled and is no longer an open item. This amount will be reflected in the full draft employment agreement without further negotiation.

Status: Agreed.

(b) Target Annual Incentive (Bonus). This item was discussed further on this call. The following positions were reviewed and discussed:

NTP's position (per Term Sheet v3):

• Target annual incentive: 175% of base salary = $3,062,500

• Maximum annual incentive: 300% of base salary = $5,250,000

Hargrove's Position:

Hargrove confirmed that Harding accepts the 175% target annual incentive without objection. There was a brief discussion regarding the performance metrics that would govern the annual incentive determination. Hargrove requested that at least 50% of the annual incentive be based on objective financial metrics — specifically, revenue growth and EBITDA — with no more than 50% based on discretionary or individual performance assessments. Hargrove stated that this provides Harding with transparency and predictability regarding the incentive calculation and protects against the risk that the bonus determination is entirely at the Board's discretion.

Vasquez noted that NTP's Remuneration Committee, chaired by Geoffrey Stanton, typically retains a significant degree of discretion in determining executive bonus payouts. However, Vasquez indicated a willingness to include objective financial metrics as a significant component of the annual incentive framework. She stated that the specific details regarding the metric structure, weightings, and performance thresholds would be addressed in the full draft employment agreement rather than at the term sheet stage.

Hargrove accepted the maximum annual incentive cap of 300% of base salary ($5,250,000) without objection. No further discussion was required on this point.

Status: Target bonus (175% of base salary) and maximum bonus (300% of base salary) agreed in principle. The detailed metric structure and performance criteria to be set forth in the full draft employment agreement.

(c) Sign-On Cash Bonus (Make-Whole). The sign-on cash bonus of $5,000,000, which is intended to serve as a partial make-whole for compensation forfeited by Harding upon his departure from Marlowe Asset Management Digital Holdings, Inc., was previously discussed at Call #1. On this call, Hargrove raised the issue of the clawback provision associated with this payment.

Hargrove's Concern:

Hargrove stated that the 24-month clawback provision on voluntary resignation, as proposed in Term Sheet v3, is too long. Under NTP's proposal, if Harding voluntarily resigns from NTP within 24 months of his start date, he would be required to repay the full $5,000,000 sign-on cash bonus. Hargrove requested a reduction of the clawback period to 12 months.

Vasquez's Response:

Vasquez stated that a 24-month clawback is standard market practice for sign-on make-whole payments of this magnitude. Vasquez argued that the clawback protects NTP's investment in recruiting Harding — NTP is committing a significant sum to attract Harding away from Marlowe Asset Management, and if Harding were to depart NTP shortly after joining, the company should be entitled to recoup that investment.

Hargrove's Fallback Position:

Hargrove offered a fallback proposal: an 18-month clawback period with a pro-rata reduction over time. Under this structure, the clawback amount would decrease proportionally as Harding completes service during the 18-month period. By way of example, Hargrove stated that if Harding were to voluntarily resign after 12 months of service, only 50% of the $5,000,000 (i.e., $2,500,000) would be subject to clawback, with the remaining 50% being deemed earned and non-refundable.

Vasquez indicated that the pro-rata clawback concept is worth considering and committed to take it back to the Remuneration Committee for discussion. She did not accept or reject the proposal on this call.

Status: Open. Clawback duration (24 months vs. 18 months) and structure (full repayment vs. pro-rata reduction) remain under discussion. Vasquez to consult with the Remuneration Committee.

(d) Sign-On Equity Grant (Make-Whole for Forfeited Marlowe Asset Management Equity). The sign-on equity grant is intended to make Harding whole for equity compensation forfeited at Marlowe Asset Management Digital Holdings, Inc. upon his departure. The following terms were discussed:

Total Sign-On Equity: $18,400,000, composed of:

• RSU Grant: $12,000,000 in restricted stock units, vesting in three equal installments of $4,000,000 each (one-third per year over three years from the grant date).

• PSU Grant: $6,400,000 in performance stock units, cliff vesting at the end of the three-year performance period, subject to achievement of specified performance hurdles.

Hargrove's Confirmation:

Hargrove reiterated on this call that the total make-whole quantum — consisting of the sign-on equity of $18,400,000 plus the sign-on cash bonus of $5,000,000, for a combined total of $23,400,000 — matches Harding's estimated forfeited Marlowe Asset Management equity of $23,400,000. Hargrove confirmed that Harding finds this total quantum acceptable and does not seek an increase in the aggregate make-whole amount.

PSU Performance Hurdles:

There was a brief discussion regarding the performance hurdles applicable to the sign-on PSU grant of $6,400,000. Hargrove requested that the performance hurdles be specified at the term sheet stage rather than deferred entirely to the full agreement draft, to ensure that Harding has clarity on the terms of the grant before signing the term sheet. Vasquez responded that the PSU performance hurdles would be based on total shareholder return ("TSR") and revenue growth targets, consistent with NTP's existing long-term incentive plan framework. Vasquez noted that the specific targets, performance tiers (threshold, target, and maximum), and peer-group composition would be detailed in the full draft employment agreement. Vasquez further stated that Dr. Rachel Whitmore of Whitmore Hobson LLP, who serves as the independent compensation consultant to the Remuneration Committee, would provide peer-group benchmarking analysis for the performance targets in advance of the full agreement drafting process.

Status: Sign-on equity quantum agreed at $18,400,000 (RSU: $12,000,000; PSU: $6,400,000). PSU performance metrics and targets to be detailed in the full draft employment agreement, informed by benchmarking from Dr. Rachel Whitmore / Whitmore Hobson LLP.

(e) Annual Long-Term Incentive (LTI) Target. The annual LTI target was discussed briefly. NTP's proposed annual LTI target is $9,000,000 per year, to be delivered in a mix of 60% performance stock units (PSUs) and 40% restricted stock units (RSUs).

Hargrove confirmed that Harding accepts the $9,000,000 annual LTI target and the 60/40 PSU/RSU mix, subject to the details regarding performance metrics, vesting schedules, and other terms being set forth in the full draft employment agreement. Hargrove noted that Harding reserves the right to comment on those details once they are drafted.

Status: Agreed in principle. Details on performance metrics, vesting schedule, and other terms to be set forth in the full draft.

(f) Perquisites. The parties reviewed the perquisite package proposed in Term Sheet v3. The following items were discussed:

• Car Allowance: NTP's proposal in Term Sheet v3 is $25,000 per year. Hargrove requested an increase to $30,000 per year. Vasquez indicated that NTP could agree to $25,000 per year and would consider the request for an increase, but did not commit to the higher amount. This remains a minor open point.

• Financial and Tax Planning Reimbursement: $35,000 per year. Harding accepted this amount without comment.

• Executive Health Program: Participation in NTP's executive health program, including an annual comprehensive health assessment. Harding accepted without comment.

• Supplemental Life Insurance: $2,000,000 in supplemental life insurance coverage, in addition to NTP's standard group life insurance benefit. Harding accepted without comment.

Status: Substantially agreed. Car allowance amount ($25,000 vs. $30,000) remains under minor discussion. All other perquisite items are agreed.

5. Brief Discussion of CIC / Change in Control (Deferred)

Vasquez raised the change-in-control severance provisions briefly toward the end of the call, not for substantive negotiation but to flag the items for scheduling purposes and to confirm that they remain the most significant open issues between the parties.

Vasquez's Summary of Outstanding CIC Issues:

Vasquez identified the following three areas of disagreement on CIC terms:

(a) CIC Severance Multiplier: NTP's position (per Term Sheet v3) is 2.5x total annual compensation; Harding's position is 3x total annual compensation.

(b) Section 280G Tax Treatment: NTP's position is a best-net cutback approach (i.e., the executive receives the greater of the full parachute payment reduced by the applicable excise tax, or the parachute payment reduced to the safe harbor amount, whichever results in the higher after-tax amount to the executive — with no gross-up payment from NTP). Harding's position is a full Section 280G tax gross-up (i.e., NTP would make a supplemental payment to Harding to cover the excise tax imposed under Section 4999 of the Internal Revenue Code, so that Harding is made whole on an after-tax basis).

(c) Board Turnover Trigger: Harding's position includes a provision in the CIC definition that would treat the replacement of a majority of the members of NTP's Board of Directors within any 12-month period as a change in control event. NTP's position does not include a Board turnover trigger in its CIC definition.

Hargrove's Response:

Hargrove agreed that the CIC terms are fundamental to the overall deal and stated that Harding's position on each of these items remains as set forth in his marked-up term sheet (Term Sheet v2, dated June 17, 2024):

• Multiplier: 3x total annual compensation (base salary of $1,750,000 + target bonus of $3,062,500 = $4,812,500 x 3 = $14,437,500).

• Tax treatment: Full Section 280G gross-up.

• Board turnover trigger: Inclusion of a Board turnover trigger (replacement of a majority of directors within any 12-month period) in the definition of "Change in Control."

Vasquez's Response:

Vasquez noted that the Remuneration Committee's position also remains firm on each of these items:

• Multiplier: Maximum 2.5x total annual compensation (base salary of $1,750,000 + target bonus of $3,062,500 = $4,812,500 x 2.5 = $12,031,250).

• Tax treatment: Best-net cutback approach (no gross-up).

• Board turnover trigger: No Board turnover trigger in the CIC definition.

Vasquez cited institutional constraints on NTP's ability to move on these points, including Thackeray Health IT ("ISS") policy concerns regarding gross-up provisions and high CIC multipliers, as well as constraints imposed by the UK Corporate Governance Code 2024, which is applicable to NTP as a company listed on the London Stock Exchange. Vasquez emphasized that NTP's Remuneration Committee is mindful of its obligations to align executive compensation practices with shareholder expectations and corporate governance best practices in the UK market.

Deferral:

Both sides agreed to defer substantive CIC discussion to the next call, which is scheduled for July 8, 2024 (Call #3). The parties agreed that Call #3 should focus primarily on attempting to resolve the CIC terms, alongside any remaining compensation elements that remain open.

Status: Deferred to Call #3 (July 8, 2024).

6. Transition Timeline

There was a brief discussion near the end of the call regarding Harding's proposed start date with NTP.

Original Proposal:

The original proposed start date, as reflected in early discussions, was October 1, 2024.

Hargrove's Concern:

Hargrove noted that Harding has obligations to Marlowe Asset Management Digital Holdings, Inc. under his existing employment agreement, including his 12-month US non-compete and notice period requirements. Harding would need to provide appropriate notice to Marlowe Asset Management and manage his departure carefully in order to preserve his professional relationships and ensure a smooth leadership transition at Marlowe Asset Management. Hargrove suggested that a start date of November 1, 2024 may be more realistic to accommodate these considerations.

Vasquez's Response:

Vasquez acknowledged the practical concern but noted that Sir Alistair Kemble's retirement as NTP's current Group CEO is effective December 31, 2024. NTP would prefer to have Harding in place by October 1, 2024, in order to allow a meaningful transition period. Vasquez stated that an overlap period of at least two to three months between Harding and Sir Alistair is viewed as important by Dame Philippa Thornton-Hale, Chair of the NTP Board of Directors, in order to ensure continuity of leadership and a thorough handover of responsibilities.

Hargrove's Reply:

Hargrove indicated that Harding is committed to a prompt transition and understands NTP's preference for an early start date. However, the actual start date will necessarily depend on the overall pace of reaching a definitive employment agreement. Hargrove noted that if the parties are able to resolve the outstanding term sheet issues expeditiously and move to a full draft agreement, an October 1 start date may be achievable; however, if negotiations extend into late July or August, a November 1 start date becomes more realistic.

Status: Start date remains tentatively October 1, 2024, with November 1, 2024 as a fallback. This item is to be revisited once substantive terms are closer to resolution and the parties have a clearer view of the timeline for finalizing the definitive employment agreement.

IV. ACTION ITEMS

The following action items were identified during the call:

V. NEXT SCHEDULED CALL

VI. CONFIDENTIALITY NOTICE

ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT

These call notes constitute attorney work product and are protected by the attorney-client privilege. They were prepared by Devon Archer, Associate, Calderwood & Harkness LLP, for internal use by the Calderwood & Harkness engagement team assigned to Matter No. 1022-00004 (Northgate Telecommunications PLC — CEO Employment Negotiation) and for the exclusive use of the client, Northgate Telecommunications PLC.

These notes reflect the mental impressions, legal analysis, and strategic observations of counsel. They are not intended to serve as a verbatim transcript of the July 1, 2024 call, but rather as a summary of the key positions, arguments, and outcomes discussed during the call, as understood and recorded by the note-taker.

These notes are not to be distributed, forwarded, copied, or disclosed to any third party — including Marcus Elliot Harding or his counsel at Hargrove & Liddell LLP — without the prior written authorization of Renata Vasquez, Partner, Calderwood & Harkness LLP.

Any inadvertent disclosure of these notes does not constitute a waiver of any applicable privilege or protection.

Prepared by:

________________________________________

Devon Archer Associate, Calderwood & Harkness LLP

Date: July 1, 2024

Reviewed and Approved by:

________________________________________

Renata Vasquez Partner, Calderwood & Harkness LLP

Date: July 2, 2024

Matter:	Northgate Telecommunications PLC — CEO Employment Negotiation
Matter Number:	1022-00004
Call:	Term Sheet Negotiation Call #2
Date:	July 1, 2024
Time:	2:00 PM – 3:45 PM ET
Format:	Video conference (Northgate Data Systems)
Prepared by:	Devon Archer, Associate, Calderwood & Harkness LLP
Reviewed by:	Renata Vasquez, Partner, Calderwood & Harkness LLP (reviewed and approved July 2, 2024)
No.	Action Item	Responsible Party	Deadline / Timing
1	Seek Remuneration Committee guidance on: (a) non-compete geographic scope — whether NTP will consider narrowing from worldwide to North America and Western Europe; (b) customer non-solicitation scope — whether NTP will consider limiting to top enterprise customers or customers with whom Harding had material personal involvement; (c) sign-on cash clawback — whether a pro-rata reduction over 18 months is acceptable	Vasquez / Calderwood & Harkness	Prior to Call #3 (July 8, 2024)
2	Consult internally on Underwood's proposed hybrid activity definition for the non-compete (scheduled competitors + revenue-based catch-all at a higher threshold, e.g., 25–30%)	Vasquez / Calderwood & Harkness	Prior to Call #3 (July 8, 2024)
3	Provide the proposed list of approximately 8 scheduled competitors for the non-compete activity definition in the next markup of the term sheet	Hargrove / Hargrove & Liddell	In advance of Call #3 (July 8, 2024)
4	Provide any additional detail on Harding's position regarding annual bonus performance metrics (objective financial metrics vs. discretionary components) for inclusion in the full agreement draft	Hargrove / Hargrove & Liddell	In advance of or concurrent with next markup
5	Schedule Call #3 for July 8, 2024, with primary agenda items: (a) CIC severance multiplier, tax treatment (gross-up vs. best-net), and Board turnover trigger; (b) remaining open compensation items (PSU metrics, clawback terms)	Both sides	Promptly
6	Coordinate with Whitmore Hobson LLP (Dr. Rachel Whitmore) to obtain peer-group benchmarking data for PSU performance metrics in advance of full agreement drafting	Underwood / Archer (Calderwood & Harkness)	In advance of full draft circulation
7	Both sides aim to resolve all term-sheet-level issues by mid-July 2024 to allow Calderwood & Harkness to circulate a full draft employment agreement	Both sides	Target: mid-July 2024
Call:	Call #3
Date:	July 8, 2024
Primary Topics:	(a) Change in control severance provisions — multiplier (2.5x vs. 3x), Section 280G tax treatment (best-net cutback vs. full gross-up), Board turnover trigger in CIC definition; (b) Remaining compensation details — PSU performance metrics, sign-on cash clawback structure, any other open items
Attendees:	Same participants expected (Vasquez, Underwood, Archer for NTP/C&H; Hargrove, Chu for Harding/H&L)
Format:	Video conference (to be confirmed)

CALL NOTES — CONFIDENTIAL / ATTORNEY-CLIENT PRIVILEGED
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT These notes are protected by the attorney-client privilege and the work product doctrine. Do not distribute, copy, or forward without prior authorization from Renata Vasquez, Partner, Calderwood & Harkness LLP.
I. ATTENDEES
For Northgate Telecommunications PLC (via Calderwood & Harkness LLP):
•  Renata Vasquez — Partner, Calderwood & Harkness LLP (lead counsel for NTP)
•  James Underwood — Associate, Calderwood & Harkness LLP
•  Devon Archer — Associate, Calderwood & Harkness LLP (note-taker)
For Marcus Elliot Harding (via Hargrove & Liddell LLP):
•  Victoria Hargrove — Partner, Hargrove & Liddell LLP (lead counsel for Harding)
•  Nathan Chu — Associate, Hargrove & Liddell LLP
Not on the Call (but referenced during discussion):
•  Elaine Whitford — SVP & Group General Counsel, Northgate Telecommunications PLC. Vasquez indicated at the outset of the call that she had consulted with Whitford and the Remuneration Committee prior to this call and was authorized to discuss the positions set forth below on behalf of NTP.
•  Geoffrey Stanton — Chair, Remuneration Committee, Northgate Telecommunications PLC Board of Directors. Referenced as having provided direction to the NTP negotiating team on the company's positions regarding restrictive covenants and compensation terms.
•  Marcus Elliot Harding — CEO candidate; not personally present on this call. Represented throughout by Hargrove and Chu.
II. BACKGROUND / CONTEXT
This is the second in a series of term-sheet negotiation calls between Calderwood & Harkness LLP (on behalf of Northgate Telecommunications PLC ("NTP")) and Hargrove & Liddell LLP (on behalf of Marcus Elliot Harding ("Harding")) relating to the proposed employment of Harding as Group Chief Executive Officer of NTP. The initial call (Call #1) took place on June 24, 2024.
The discussion on this call was based on the NTP counter-proposal term sheet, version 3 ("Term Sheet v3"), dated June 24, 2024, which was circulated by Calderwood & Harkness to Hargrove & Liddell following Call #1. Term Sheet v3 reflected NTP's revised positions on certain issues following the initial exchange of proposals and the discussion at Call #1.
Call #1 focused primarily on the change-in-control ("CIC") severance multiplier, the non-compete duration, and garden leave provisions. Those discussions did not yield resolution on any of those three points, though both sides acknowledged progress in understanding each other's respective positions. In particular, following Call #1, NTP reduced its proposed non-compete duration from 24 months to 18 months as a concession, which was reflected in Term Sheet v3.
This call (Call #2) was scheduled to address the remaining restrictive covenant details — specifically, geographic scope of the non-compete, the activity-based definition of the non-compete scope, and the non-solicitation provisions — as well as to revisit certain compensation elements where progress might be achievable. Additionally, both sides used portions of this call to confirm areas of prior agreement and to clarify outstanding positions on compensation items.
The CIC severance terms (including the multiplier, Section 280G tax gross-up, and the Board turnover trigger within the CIC definition) were deferred by mutual agreement to a future call. Both sides acknowledged at the outset of this call that they require further internal consultation on those issues before engaging in substantive discussion. The CIC terms were identified as the most significant remaining area of disagreement, and both sides expressed a preference for dedicating a full call to those topics.
III. AGENDA ITEMS DISCUSSED
1. Restrictive Covenant — Non-Compete Geographic Scope
Northgate's Position (per Term Sheet v3):
NTP's current position, as reflected in Term Sheet v3, proposes an 18-month post-termination non-compete (reduced from the original 24-month duration in Term Sheet v1, as a concession following the discussions at Call #1) with a worldwide geographic scope. The worldwide scope was carried forward from Term Sheet v1 without modification.
Vasquez's Explanation:
Vasquez opened the discussion on this topic by providing the rationale for NTP's insistence on worldwide geographic scope. She stated that worldwide scope is warranted given the nature of NTP's global operations. Vasquez noted the following specific points in support of NTP's position:
•  NTP operates in over 40 countries across multiple continents, with a presence spanning Europe, the Middle East, Africa, Asia-Pacific, and the Americas.
•  NTP employs approximately 22,500 employees globally.
•  Harding, as Group CEO, would have access to commercially sensitive information across all of NTP's markets — including competitive strategy, pricing data, customer information, technology roadmaps, and acquisition pipeline information — and this information is not limited to any particular geographic region.
•  NTP's UK headquarters is located at 45 Canary Wharf Tower, One Canada Square, London E14 5AB. Its US operations headquarters is located at 600 Lexington Avenue, 38th Floor, New York, NY 10022. Operations extend across Europe, the Middle East, Africa, and Asia-Pacific.
•  A geographic limitation to only certain regions would leave significant competitive gaps, as NTP competes for enterprise telecom contracts and SaaS platform deployments in all of its operating markets, and a competitor armed with the confidential information that Harding would possess as Group CEO could inflict meaningful competitive harm in any of those markets.
Hargrove's Counter-Position:
Hargrove responded by stating that a worldwide non-compete is unreasonable and likely unenforceable under New York law, which is the governing law of the proposed employment agreement. Hargrove stated that Harding's position is that the geographic scope of the non-compete should be limited to North America and Western Europe, which Hargrove characterized as consistent with NTP's principal revenue-generating markets. Hargrove noted that these two regions collectively account for the substantial majority of NTP's revenues and represent the markets in which Harding would be most likely to compete, and that a restriction covering these regions would provide NTP with meaningful and proportionate protection.
Hargrove's Supporting Arguments:
Hargrove cited the following additional points in support of Harding's position:
•  Harding's existing non-compete obligation at Marlowe Asset Management Digital Holdings, Inc. (headquartered at 200 Technology Way, Suite 4000, San Jose, CA 95110), his current employer, is limited to the United States only with a 12-month duration. Moving to a worldwide scope for 18 months would constitute a significant and unreasonable escalation of Harding's restrictive covenant obligations relative to his current situation.
•  Under New York law, non-compete provisions are subject to a reasonableness test that evaluates, among other factors, the geographic scope in relation to the employer's legitimate business interests. Hargrove stated that New York courts have historically scrutinized worldwide non-competes and have narrowed or voided those that are deemed broader than necessary to protect the employer's legitimate interests.
•  Hargrove did not cite specific case law on this call but indicated that she would provide New York case authorities in support of Harding's position in the next markup or in a supplemental letter, if needed.
Vasquez's Response:
Vasquez pushed back on the comparison to Harding's existing Marlowe Asset Management non-compete, distinguishing NTP from Marlowe Asset Management on several grounds:
•  NTP is a UK-headquartered global telecommunications and SaaS company that is dual-listed on both the London Stock Exchange (trading under the ticker LON: NTP) and the New York Stock Exchange (trading under the ticker NYSE: NTPC). NTP's global footprint is substantially broader than Marlowe Asset Management's.
•  NTP reported FY2023 revenue of £4.26 billion (approximately $5.43 billion at current exchange rates), with revenue derived from operations across all major global regions.
•  The Group CEO role at NTP involves Group-level responsibility for all of NTP's worldwide operations, not merely the US business. This is qualitatively different from Harding's current role at Marlowe Asset Management, which, while a CEO-level position, is centered on a US-focused technology business.
•  Vasquez stated that the comparison to the Marlowe Asset Management non-compete is therefore not an appropriate benchmark for determining the reasonable scope of a non-compete in connection with the NTP Group CEO role.
Underwood's Observation:
Underwood noted that Calderwood & Harkness's internal analysis on this point — referencing the memorandum dated June 6, 2024, on New York non-compete enforceability prepared by the firm's employment and restrictive covenants practice group — had flagged that a worldwide geographic scope may face enforceability challenges under New York's reasonableness test. Underwood also noted that there is pending New York state legislation that proposes significant restrictions on the use and enforcement of non-compete agreements, and that while the legislation has not yet been enacted, it creates an additional layer of uncertainty regarding the enforceability of broadly scoped non-competes under New York law. Underwood acknowledged that this is a point requiring further internal discussion with the Remuneration Committee before NTP commits to a firm position on geographic scope.
Status:
No agreement was reached on the geographic scope of the non-compete. Hargrove reiterated clearly and firmly that North America and Western Europe represents Harding's maximum acceptable geographic scope, and that Harding will not agree to a worldwide non-compete. Vasquez took the matter under advisement and committed to seek further instruction from the Remuneration Committee, specifically from Geoffrey Stanton (Chair), before the next call. Vasquez did not concede the worldwide scope but acknowledged the enforceability concerns raised by Underwood and Hargrove. This item remains open.
2. Restrictive Covenant — Activity Definition (Non-Compete Scope)
Northgate's Position (per Term Sheet v3):
NTP's current position, as set forth in Term Sheet v3, defines the activity-based restriction of the non-compete as follows: Harding would be prohibited from accepting employment by or providing services to any company that derives more than 15% of its consolidated revenue from (i) telecommunications services, (ii) telecommunications infrastructure, or (iii) enterprise SaaS platforms serving telecom operators.
Vasquez's Rationale:
Vasquez explained NTP's preference for the revenue-based test by emphasizing the following points:
•  A revenue-based test provides an objective, measurable standard that can be applied with relative certainty at the time Harding considers post-termination employment opportunities.
•  The test avoids subjective disputes over whether a particular employer is or is not a "competitor" of NTP — a determination that could otherwise be highly fact-dependent and prone to litigation.
•  The 15% threshold is designed to capture the full competitive landscape in which NTP operates, including both traditional telecommunications companies and the technology/SaaS convergence space. NTP increasingly competes not only with legacy telecom operators but also with technology companies that offer enterprise SaaS solutions to the telecom industry, and the activity definition is intended to reflect this competitive reality.
Hargrove's Counter-Position:
Hargrove stated that the revenue-based test, as proposed by NTP, is overbroad and would capture companies that are not genuine competitors of NTP. Hargrove provided the following specific concern:
•  A revenue-based test with a 15% threshold could ensnare large, diversified technology conglomerates that happen to have a telecommunications division or a SaaS product line serving the telecom sector that exceeds 15% of overall revenue, even if that company does not compete directly with NTP in any meaningful sense. Hargrove argued that this would unfairly and unnecessarily restrict Harding's post-termination employment options.
Hargrove stated that Harding's preferred approach is a "scheduled competitor" model. Under this approach, the non-compete would be limited to a specifically enumerated list of named companies that constitute direct competitors of NTP. This list would be agreed upon by both parties at the time of signing the employment agreement and would be attached as a schedule to the agreement. Harding's view is that this approach provides certainty to both sides and ensures that the non-compete is targeted at genuine competitive threats rather than casting an overbroad net.
Hargrove's Proposed Schedule:
Hargrove indicated that Harding's proposed schedule of competitors would include approximately eight (8) named companies. Hargrove did not disclose the identities of these companies on this call, stating that they would be provided in the next redline markup of the term sheet. Hargrove noted that the companies on the proposed schedule would be selected based on direct competitive overlap with NTP in one or more of the following sectors: telecom services, telecom infrastructure, and enterprise SaaS platforms for telecom operators.
Vasquez's Concerns with the Scheduled-Competitor Approach:
Vasquez raised several concerns with Harding's proposed scheduled-competitor approach:
•  Static nature of the list: A fixed list of named competitors, agreed upon at the time of signing, does not capture future market entrants or companies that may pivot into NTP's competitive space after the date of the agreement. The telecommunications and SaaS sectors are dynamic, and new competitive threats may emerge during Harding's tenure that would not be captured by a static schedule agreed upon at the outset.
•  Narrowness of the list: Eight (8) companies may be too narrow a scope given the breadth of NTP's competitive landscape, which spans multiple sectors (traditional telecom, telecom infrastructure, enterprise SaaS) and multiple geographies.
•  No update mechanism: As proposed, there would be no mechanism for updating the schedule of competitors after the agreement is signed. This means that if a significant new competitor emerges during Harding's employment, NTP would have no ability to add that company to the restricted list absent a mutual amendment to the agreement — which Harding could simply refuse.
Underwood's Proposed Hybrid Approach:
Underwood raised the possibility of a hybrid approach that could serve as a compromise between the two positions. Under this hybrid framework:
•  A scheduled list of core competitors would be agreed upon at signing and attached as a schedule to the agreement, similar to Harding's proposal.
•  This scheduled list would be supplemented by a revenue-based catch-all provision that would apply to companies not listed on the schedule but that derive more than a specified percentage of their consolidated revenue from the relevant activities (telecom services, telecom infrastructure, and enterprise SaaS for telecom).
•  Underwood suggested that this hybrid approach would provide certainty (through the scheduled list) while also addressing NTP's concern about future market entrants and competitive shifts (through the revenue-based catch-all).
Hargrove's Response to the Hybrid Proposal:
Hargrove indicated that she would discuss the hybrid concept with Harding but expressed skepticism about the revenue-based catch-all component. Hargrove stated that if any revenue-based catch-all were to be included, it would need to be set at a higher threshold than the 15% proposed in Term Sheet v3 — suggesting a threshold of 25% or 30% of revenue — in order to avoid the overbreadth concerns that Harding has raised. Hargrove did not accept or reject the hybrid proposal outright but indicated it would receive further consideration.
Status:
No agreement was reached on the activity definition for the non-compete. The item remains open. The following next steps were identified:
•  Underwood's hybrid proposal (scheduled list + revenue-based catch-all at a higher threshold) is to be explored further by both sides.
•  Hargrove will provide the proposed list of approximately eight (8) scheduled competitors in Harding's next markup of the term sheet.
•  Calderwood & Harkness will consult internally on the viability and structure of the hybrid approach before the next call.
3. Non-Solicitation of Customers
Northgate's Position (per Term Sheet v3):
NTP's position, as reflected in Term Sheet v3, proposes a 24-month post-termination non-solicitation restriction covering both (a) employees of NTP and its subsidiaries and (b) customers of NTP and its subsidiaries.
Hargrove's Counter-Position:
Hargrove stated that Harding is willing to accept a non-solicitation provision with respect to employees for a period of 18 months post-termination. However, Harding objects to the inclusion of a customer non-solicitation provision in its entirety. Hargrove indicated that Harding's strong preference is that any non-solicitation covenant be limited to employees only, with no restriction on Harding's ability to solicit or engage with NTP's customers following his departure.
Hargrove's Arguments Against Customer Non-Solicitation:
Hargrove advanced the following arguments in support of Harding's objection to the customer non-solicitation:
•  Functional equivalence to a non-compete: A Group CEO's relationships are with the company's customers broadly — not merely a discrete subset of accounts. Accordingly, a customer non-solicitation would effectively function as a non-compete in practice, because it would preclude Harding from engaging with the vast majority of any potential future employer's customer base if that employer operates in a space that overlaps with NTP's markets. Hargrove argued that this makes the customer non-solicitation duplicative of, and more restrictive than, the non-compete itself.
•  Impracticality of scope and enforcement: NTP's customer base is vast, encompassing both enterprise and consumer segments across global markets. Hargrove argued that defining the scope of the restriction (i.e., which "customers" are covered) and enforcing compliance would be impractical given the breadth of NTP's business. A Group CEO does not maintain individual customer relationships in the way that a sales executive or account manager might; rather, the CEO's role involves oversight of the company's overall customer strategy.
•  Market practice: Hargrove stated that, in her experience, customer non-solicitation provisions are not standard market practice for CEO-level employment agreements in the telecommunications and technology sectors. Hargrove indicated that she was not aware of precedent agreements at comparable companies that include a customer non-solicitation for the CEO, though she did not provide specific comparators on this call.
Vasquez's Response:
Vasquez responded that NTP views customer non-solicitation as an important protective measure for the company, particularly with respect to NTP's enterprise SaaS customers. Vasquez emphasized the following:
•  Enterprise SaaS customer relationships are long-cycle and high-value, often involving multi-year contracts with significant annual recurring revenue ("ARR"). These relationships are built on deep customer-specific knowledge, including knowledge of the customer's technology infrastructure, integration requirements, and strategic priorities.
•  NTP's enterprise telecom contracts similarly involve significant customer-specific commercial and technical information that Harding would acquire in his capacity as Group CEO.
•  A customer non-solicitation provision is intended to protect NTP's relationships with these high-value customers from being leveraged by Harding for the benefit of a competitor during the post-termination period.
Underwood's Suggested Middle Ground:
Underwood suggested a possible middle ground that could address both NTP's interest in protecting its key customer relationships and Harding's concern about the overbreadth of a blanket customer non-solicitation. Underwood proposed that the customer non-solicitation could be limited to either:
(a) The top 50 to 100 enterprise customers of NTP, ranked by revenue, at the time of Harding's departure; or
(b) Customers with whom Harding had material personal involvement during his tenure as Group CEO, with "material personal involvement" to be defined in the agreement (e.g., direct participation in negotiations, presentations, or relationship management).
Vasquez indicated that either of these narrowing mechanisms could potentially be explored further with the Remuneration Committee, though she did not commit to either approach on this call. Vasquez noted that the Remuneration Committee's current position is as stated in Term Sheet v3 (full customer non-solicitation for 24 months), and any narrowing would require specific authorization from the Committee.
Status:
•  Employee non-solicitation: Tentative conceptual agreement that an employee non-solicitation provision will be included in the agreement. Duration remains disputed — NTP's position is 24 months; Harding's position is 18 months. This gap was not resolved on this call and will be revisited.
•  Customer non-solicitation: Significant disagreement remains. Harding objects to customer non-solicitation in its entirety. NTP views it as an important protection. NTP will consider narrowing the scope of the customer non-solicitation as a potential concession, in line with Underwood's suggested middle ground, subject to Remuneration Committee approval.
This item remains open.
4. Progress on Compensation Elements
The parties used a portion of this call to review the status of various compensation elements, some of which were discussed at Call #1 and some of which were addressed in further detail on this call.
(a) Base Salary.  Base salary was previously agreed at Call #1 at $1,750,000 per annum. Both Vasquez and Hargrove confirmed on this call that base salary is settled and is no longer an open item. This amount will be reflected in the full draft employment agreement without further negotiation.
Status: Agreed.
(b) Target Annual Incentive (Bonus).  This item was discussed further on this call. The following positions were reviewed and discussed:
NTP's position (per Term Sheet v3):
•  Target annual incentive: 175% of base salary = $3,062,500
•  Maximum annual incentive: 300% of base salary = $5,250,000
Hargrove's Position:
Hargrove confirmed that Harding accepts the 175% target annual incentive without objection. There was a brief discussion regarding the performance metrics that would govern the annual incentive determination. Hargrove requested that at least 50% of the annual incentive be based on objective financial metrics — specifically, revenue growth and EBITDA — with no more than 50% based on discretionary or individual performance assessments. Hargrove stated that this provides Harding with transparency and predictability regarding the incentive calculation and protects against the risk that the bonus determination is entirely at the Board's discretion.
Vasquez noted that NTP's Remuneration Committee, chaired by Geoffrey Stanton, typically retains a significant degree of discretion in determining executive bonus payouts. However, Vasquez indicated a willingness to include objective financial metrics as a significant component of the annual incentive framework. She stated that the specific details regarding the metric structure, weightings, and performance thresholds would be addressed in the full draft employment agreement rather than at the term sheet stage.
Hargrove accepted the maximum annual incentive cap of 300% of base salary ($5,250,000) without objection. No further discussion was required on this point.
Status: Target bonus (175% of base salary) and maximum bonus (300% of base salary) agreed in principle. The detailed metric structure and performance criteria to be set forth in the full draft employment agreement.
(c) Sign-On Cash Bonus (Make-Whole).  The sign-on cash bonus of $5,000,000, which is intended to serve as a partial make-whole for compensation forfeited by Harding upon his departure from Marlowe Asset Management Digital Holdings, Inc., was previously discussed at Call #1. On this call, Hargrove raised the issue of the clawback provision associated with this payment.
Hargrove's Concern:
Hargrove stated that the 24-month clawback provision on voluntary resignation, as proposed in Term Sheet v3, is too long. Under NTP's proposal, if Harding voluntarily resigns from NTP within 24 months of his start date, he would be required to repay the full $5,000,000 sign-on cash bonus. Hargrove requested a reduction of the clawback period to 12 months.
Vasquez's Response:
Vasquez stated that a 24-month clawback is standard market practice for sign-on make-whole payments of this magnitude. Vasquez argued that the clawback protects NTP's investment in recruiting Harding — NTP is committing a significant sum to attract Harding away from Marlowe Asset Management, and if Harding were to depart NTP shortly after joining, the company should be entitled to recoup that investment.
Hargrove's Fallback Position:
Hargrove offered a fallback proposal: an 18-month clawback period with a pro-rata reduction over time. Under this structure, the clawback amount would decrease proportionally as Harding completes service during the 18-month period. By way of example, Hargrove stated that if Harding were to voluntarily resign after 12 months of service, only 50% of the $5,000,000 (i.e., $2,500,000) would be subject to clawback, with the remaining 50% being deemed earned and non-refundable.
Vasquez indicated that the pro-rata clawback concept is worth considering and committed to take it back to the Remuneration Committee for discussion. She did not accept or reject the proposal on this call.
Status: Open. Clawback duration (24 months vs. 18 months) and structure (full repayment vs. pro-rata reduction) remain under discussion. Vasquez to consult with the Remuneration Committee.
(d) Sign-On Equity Grant (Make-Whole for Forfeited Marlowe Asset Management Equity).  The sign-on equity grant is intended to make Harding whole for equity compensation forfeited at Marlowe Asset Management Digital Holdings, Inc. upon his departure. The following terms were discussed:
Total Sign-On Equity: $18,400,000, composed of:
•  RSU Grant: $12,000,000 in restricted stock units, vesting in three equal installments of $4,000,000 each (one-third per year over three years from the grant date).
•  PSU Grant: $6,400,000 in performance stock units, cliff vesting at the end of the three-year performance period, subject to achievement of specified performance hurdles.
Hargrove's Confirmation:
Hargrove reiterated on this call that the total make-whole quantum — consisting of the sign-on equity of $18,400,000 plus the sign-on cash bonus of $5,000,000, for a combined total of $23,400,000 — matches Harding's estimated forfeited Marlowe Asset Management equity of $23,400,000. Hargrove confirmed that Harding finds this total quantum acceptable and does not seek an increase in the aggregate make-whole amount.
PSU Performance Hurdles:
There was a brief discussion regarding the performance hurdles applicable to the sign-on PSU grant of $6,400,000. Hargrove requested that the performance hurdles be specified at the term sheet stage rather than deferred entirely to the full agreement draft, to ensure that Harding has clarity on the terms of the grant before signing the term sheet. Vasquez responded that the PSU performance hurdles would be based on total shareholder return ("TSR") and revenue growth targets, consistent with NTP's existing long-term incentive plan framework. Vasquez noted that the specific targets, performance tiers (threshold, target, and maximum), and peer-group composition would be detailed in the full draft employment agreement. Vasquez further stated that Dr. Rachel Whitmore of Whitmore Hobson LLP, who serves as the independent compensation consultant to the Remuneration Committee, would provide peer-group benchmarking analysis for the performance targets in advance of the full agreement drafting process.
Status: Sign-on equity quantum agreed at $18,400,000 (RSU: $12,000,000; PSU: $6,400,000). PSU performance metrics and targets to be detailed in the full draft employment agreement, informed by benchmarking from Dr. Rachel Whitmore / Whitmore Hobson LLP.
(e) Annual Long-Term Incentive (LTI) Target.  The annual LTI target was discussed briefly. NTP's proposed annual LTI target is $9,000,000 per year, to be delivered in a mix of 60% performance stock units (PSUs) and 40% restricted stock units (RSUs).
Hargrove confirmed that Harding accepts the $9,000,000 annual LTI target and the 60/40 PSU/RSU mix, subject to the details regarding performance metrics, vesting schedules, and other terms being set forth in the full draft employment agreement. Hargrove noted that Harding reserves the right to comment on those details once they are drafted.
Status: Agreed in principle. Details on performance metrics, vesting schedule, and other terms to be set forth in the full draft.
(f) Perquisites.  The parties reviewed the perquisite package proposed in Term Sheet v3. The following items were discussed:
•  Car Allowance: NTP's proposal in Term Sheet v3 is $25,000 per year. Hargrove requested an increase to $30,000 per year. Vasquez indicated that NTP could agree to $25,000 per year and would consider the request for an increase, but did not commit to the higher amount. This remains a minor open point.
•  Financial and Tax Planning Reimbursement: $35,000 per year. Harding accepted this amount without comment.
•  Executive Health Program: Participation in NTP's executive health program, including an annual comprehensive health assessment. Harding accepted without comment.
•  Supplemental Life Insurance: $2,000,000 in supplemental life insurance coverage, in addition to NTP's standard group life insurance benefit. Harding accepted without comment.
Status: Substantially agreed. Car allowance amount ($25,000 vs. $30,000) remains under minor discussion. All other perquisite items are agreed.
5. Brief Discussion of CIC / Change in Control (Deferred)
Vasquez raised the change-in-control severance provisions briefly toward the end of the call, not for substantive negotiation but to flag the items for scheduling purposes and to confirm that they remain the most significant open issues between the parties.
Vasquez's Summary of Outstanding CIC Issues:
Vasquez identified the following three areas of disagreement on CIC terms:
(a) CIC Severance Multiplier: NTP's position (per Term Sheet v3) is 2.5x total annual compensation; Harding's position is 3x total annual compensation.
(b) Section 280G Tax Treatment: NTP's position is a best-net cutback approach (i.e., the executive receives the greater of the full parachute payment reduced by the applicable excise tax, or the parachute payment reduced to the safe harbor amount, whichever results in the higher after-tax amount to the executive — with no gross-up payment from NTP). Harding's position is a full Section 280G tax gross-up (i.e., NTP would make a supplemental payment to Harding to cover the excise tax imposed under Section 4999 of the Internal Revenue Code, so that Harding is made whole on an after-tax basis).
(c) Board Turnover Trigger: Harding's position includes a provision in the CIC definition that would treat the replacement of a majority of the members of NTP's Board of Directors within any 12-month period as a change in control event. NTP's position does not include a Board turnover trigger in its CIC definition.
Hargrove's Response:
Hargrove agreed that the CIC terms are fundamental to the overall deal and stated that Harding's position on each of these items remains as set forth in his marked-up term sheet (Term Sheet v2, dated June 17, 2024):
•  Multiplier: 3x total annual compensation (base salary of $1,750,000 + target bonus of $3,062,500 = $4,812,500 x 3 = $14,437,500).
•  Tax treatment: Full Section 280G gross-up.
•  Board turnover trigger: Inclusion of a Board turnover trigger (replacement of a majority of directors within any 12-month period) in the definition of "Change in Control."
Vasquez's Response:
Vasquez noted that the Remuneration Committee's position also remains firm on each of these items:
•  Multiplier: Maximum 2.5x total annual compensation (base salary of $1,750,000 + target bonus of $3,062,500 = $4,812,500 x 2.5 = $12,031,250).
•  Tax treatment: Best-net cutback approach (no gross-up).
•  Board turnover trigger: No Board turnover trigger in the CIC definition.
Vasquez cited institutional constraints on NTP's ability to move on these points, including Thackeray Health IT ("ISS") policy concerns regarding gross-up provisions and high CIC multipliers, as well as constraints imposed by the UK Corporate Governance Code 2024, which is applicable to NTP as a company listed on the London Stock Exchange. Vasquez emphasized that NTP's Remuneration Committee is mindful of its obligations to align executive compensation practices with shareholder expectations and corporate governance best practices in the UK market.
Deferral:
Both sides agreed to defer substantive CIC discussion to the next call, which is scheduled for July 8, 2024 (Call #3). The parties agreed that Call #3 should focus primarily on attempting to resolve the CIC terms, alongside any remaining compensation elements that remain open.
Status: Deferred to Call #3 (July 8, 2024).
6. Transition Timeline
There was a brief discussion near the end of the call regarding Harding's proposed start date with NTP.
Original Proposal:
The original proposed start date, as reflected in early discussions, was October 1, 2024.
Hargrove's Concern:
Hargrove noted that Harding has obligations to Marlowe Asset Management Digital Holdings, Inc. under his existing employment agreement, including his 12-month US non-compete and notice period requirements. Harding would need to provide appropriate notice to Marlowe Asset Management and manage his departure carefully in order to preserve his professional relationships and ensure a smooth leadership transition at Marlowe Asset Management. Hargrove suggested that a start date of November 1, 2024 may be more realistic to accommodate these considerations.
Vasquez's Response:
Vasquez acknowledged the practical concern but noted that Sir Alistair Kemble's retirement as NTP's current Group CEO is effective December 31, 2024. NTP would prefer to have Harding in place by October 1, 2024, in order to allow a meaningful transition period. Vasquez stated that an overlap period of at least two to three months between Harding and Sir Alistair is viewed as important by Dame Philippa Thornton-Hale, Chair of the NTP Board of Directors, in order to ensure continuity of leadership and a thorough handover of responsibilities.
Hargrove's Reply:
Hargrove indicated that Harding is committed to a prompt transition and understands NTP's preference for an early start date. However, the actual start date will necessarily depend on the overall pace of reaching a definitive employment agreement. Hargrove noted that if the parties are able to resolve the outstanding term sheet issues expeditiously and move to a full draft agreement, an October 1 start date may be achievable; however, if negotiations extend into late July or August, a November 1 start date becomes more realistic.
Status: Start date remains tentatively October 1, 2024, with November 1, 2024 as a fallback. This item is to be revisited once substantive terms are closer to resolution and the parties have a clearer view of the timeline for finalizing the definitive employment agreement.
IV. ACTION ITEMS
The following action items were identified during the call:
V. NEXT SCHEDULED CALL
VI. CONFIDENTIALITY NOTICE
ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT
These call notes constitute attorney work product and are protected by the attorney-client privilege. They were prepared by Devon Archer, Associate, Calderwood & Harkness LLP, for internal use by the Calderwood & Harkness engagement team assigned to Matter No. 1022-00004 (Northgate Telecommunications PLC — CEO Employment Negotiation) and for the exclusive use of the client, Northgate Telecommunications PLC.
These notes reflect the mental impressions, legal analysis, and strategic observations of counsel. They are not intended to serve as a verbatim transcript of the July 1, 2024 call, but rather as a summary of the key positions, arguments, and outcomes discussed during the call, as understood and recorded by the note-taker.
These notes are not to be distributed, forwarded, copied, or disclosed to any third party — including Marcus Elliot Harding or his counsel at Hargrove & Liddell LLP — without the prior written authorization of Renata Vasquez, Partner, Calderwood & Harkness LLP.
Any inadvertent disclosure of these notes does not constitute a waiver of any applicable privilege or protection.
Prepared by:
________________________________________
Devon Archer Associate, Calderwood & Harkness LLP
Date: July 1, 2024
Reviewed and Approved by:
________________________________________
Renata Vasquez Partner, Calderwood & Harkness LLP
Date: July 2, 2024
Matter: | Northgate Telecommunications PLC — CEO Employment Negotiation
Matter Number: | 1022-00004
Call: | Term Sheet Negotiation Call #2
Date: | July 1, 2024
Time: | 2:00 PM – 3:45 PM ET
Format: | Video conference (Northgate Data Systems)
Prepared by: | Devon Archer, Associate, Calderwood & Harkness LLP
Reviewed by: | Renata Vasquez, Partner, Calderwood & Harkness LLP (reviewed and approved July 2, 2024)
No. | Action Item | Responsible Party | Deadline / Timing
1 | Seek Remuneration Committee guidance on: (a) non-compete geographic scope — whether NTP will consider narrowing from worldwide to North America and Western Europe; (b) customer non-solicitation scope — whether NTP will consider limiting to top enterprise customers or customers with whom Harding had material personal involvement; (c) sign-on cash clawback — whether a pro-rata reduction over 18 months is acceptable | Vasquez / Calderwood & Harkness | Prior to Call #3 (July 8, 2024)
2 | Consult internally on Underwood's proposed hybrid activity definition for the non-compete (scheduled competitors + revenue-based catch-all at a higher threshold, e.g., 25–30%) | Vasquez / Calderwood & Harkness | Prior to Call #3 (July 8, 2024)
3 | Provide the proposed list of approximately 8 scheduled competitors for the non-compete activity definition in the next markup of the term sheet | Hargrove / Hargrove & Liddell | In advance of Call #3 (July 8, 2024)
4 | Provide any additional detail on Harding's position regarding annual bonus performance metrics (objective financial metrics vs. discretionary components) for inclusion in the full agreement draft | Hargrove / Hargrove & Liddell | In advance of or concurrent with next markup
5 | Schedule Call #3 for July 8, 2024, with primary agenda items: (a) CIC severance multiplier, tax treatment (gross-up vs. best-net), and Board turnover trigger; (b) remaining open compensation items (PSU metrics, clawback terms) | Both sides | Promptly
6 | Coordinate with Whitmore Hobson LLP (Dr. Rachel Whitmore) to obtain peer-group benchmarking data for PSU performance metrics in advance of full agreement drafting | Underwood / Archer (Calderwood & Harkness) | In advance of full draft circulation
7 | Both sides aim to resolve all term-sheet-level issues by mid-July 2024 to allow Calderwood & Harkness to circulate a full draft employment agreement | Both sides | Target: mid-July 2024
Call: | Call #3
Date: | July 8, 2024
Primary Topics: | (a) Change in control severance provisions — multiplier (2.5x vs. 3x), Section 280G tax treatment (best-net cutback vs. full gross-up), Board turnover trigger in CIC definition; (b) Remaining compensation details — PSU performance metrics, sign-on cash clawback structure, any other open items
Attendees: | Same participants expected (Vasquez, Underwood, Archer for NTP/C&H; Hargrove, Chu for Harding/H&L)
Format: | Video conference (to be confirmed)

CALL NOTES — CONFIDENTIAL / ATTORNEY-CLIENT PRIVILEGED

I. ATTENDEES

II. BACKGROUND / CONTEXT

III. AGENDA ITEMS DISCUSSED

IV. ACTION ITEMS

V. NEXT SCHEDULED CALL

VI. CONFIDENTIALITY NOTICE

ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT

Record

Parties

Dates

Amounts