1022-00004 · Northgate Telecommunications PLC · Term Sheet Negotiation

term-sheet-v3-ntp-counter.docx DOCUMENT Labor & Employment

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REVISED TERM SHEET — CEO EMPLOYMENT AGREEMENT (v3)

Counter-Proposal of Northgate Telecommunications PLC

June 24, 2024

CONFIDENTIAL — SUBJECT TO CONTRACT — FOR DISCUSSION PURPOSES ONLY

Prepared by Calderwood & Harkness LLP, 299 Park Avenue, 42nd Floor, New York, NY 10171, on behalf of Northgate Telecommunications PLC. Matter Reference: 1022-00004.

This revised term sheet supersedes the term sheet dated June 10, 2024 (the "Initial Term Sheet" or "v1"), and reflects the Employer's counter-proposal in response to the markup received from Hargrove & Liddell LLP ("H&L") dated June 17, 2024 (the "H&L Markup" or "v2"). The terms set forth herein remain subject to negotiation of definitive documentation acceptable to both parties. Unless otherwise indicated, capitalized terms used but not defined herein shall have the meanings ascribed to them in the Initial Term Sheet or as will be defined in the definitive Executive Employment Agreement (the "Agreement"). Where this revised term sheet is silent on a particular term addressed in the Initial Term Sheet, the Employer's position as stated in the Initial Term Sheet shall be deemed to continue in full force and effect for purposes of ongoing negotiations.

The following sets forth the material terms proposed by the Employer for the employment of Marcus Elliot Harding as Chief Executive Officer and President.

1. Parties

Employer:

Northgate Telecommunications US, Inc. ("NTP US"), a corporation organized and existing under the laws of the State of Delaware and a wholly-owned subsidiary of Northgate Telecommunications PLC ("NTP" or the "Company"), a public limited company incorporated in England and Wales under registered number 07381264. NTP's principal office in the United Kingdom is located at 45 Canary Wharf Tower, One Canada Square, London E14 5AB, United Kingdom. NTP US maintains its US operations headquarters at 600 Lexington Avenue, 38th Floor, New York, New York 10022. NTP is listed on the London Stock Exchange (LON: NTP) and, through its American Depositary Receipt program, on the New York Stock Exchange (NYSE: NTPC).

Executive:

Marcus Elliot Harding (the "Executive"), currently serving as President and Chief Operating Officer of Marlowe Asset Management Digital Holdings, Inc. (NYSE: VDHI), an individual residing at 14 Gramercy Park South, Apt. 12A, New York, New York 10003.

Note Regarding Dual Employment Structure: NTP PLC will be a separate party to a UK service agreement (the "UK Service Agreement") governing the Executive's UK board duties and regulatory compliance obligations. The UK Service Agreement will be prepared by Moorfield Bates LLP in coordination with Calderwood & Harkness LLP. This term sheet addresses exclusively the terms of the primary US employment agreement between NTP US and the Executive, except where reference to the UK Service Agreement is expressly made for coordination purposes.

2. Position and Duties

Title: The Executive shall serve as Chief Executive Officer of Northgate Telecommunications PLC and President of Northgate Telecommunications US, Inc. The Executive shall hold both titles concurrently for the duration of his employment, and neither title shall be modified, diminished, or removed without the Executive's prior written consent.

Reporting: The Executive shall report directly and exclusively to the Board of Directors of NTP PLC (the "Board"). The current Chair of the Board is Dame Philippa Thornton-Hale. The Executive shall not be required to report to any other officer, committee, or person other than the Board.

Duties: The Executive shall devote substantially all of his professional time, attention, skill, and energy to the full-time executive leadership of the Company and its global subsidiaries, affiliates, and joint ventures. The Executive's duties shall be commensurate with the position of Chief Executive Officer of a publicly listed, multinational telecommunications and enterprise SaaS company with global operations. The Executive shall have such authority and responsibilities as are customarily associated with the position of Chief Executive Officer, including but not limited to the development and execution of corporate strategy, oversight of all business operations, management of the senior leadership team, and representation of the Company to investors, regulators, customers, and other stakeholders.

Geographic Allocation: The Executive shall allocate approximately eighty percent (80%) of his time and duties to the Company's US operations, based at the New York headquarters at 600 Lexington Avenue, 38th Floor, New York, New York 10022, and approximately twenty percent (20%) of his time and duties to the Company's UK operations, based at the London headquarters at 45 Canary Wharf Tower, One Canada Square, London E14 5AB. The precise allocation of time between the US and UK may vary from time to time based on business needs, provided that the Executive's principal place of employment shall remain in New York, New York.

Board Membership: The Executive shall be appointed to the Board of Directors of NTP PLC promptly upon commencement of employment. The Company shall use its reasonable best efforts to secure such appointment, including, if necessary, expanding the size of the Board to accommodate the Executive's appointment. The Executive shall serve as an executive director on the Board for the duration of his employment. In the event the Executive ceases to serve as Chief Executive Officer for any reason, he shall promptly tender his resignation from the Board.

Regulatory Compliance: The Executive acknowledges that, as an executive director of a company listed on the London Stock Exchange, he will be subject to the Financial Conduct Authority's Senior Managers and Certification Regime ("SM&CR") and other applicable UK regulatory requirements. The Executive's SM&CR obligations, fitness and propriety requirements, and related regulatory matters shall be addressed in the UK Service Agreement to be drafted by Moorfield Bates LLP. The Executive agrees to cooperate fully with the Company in connection with any regulatory applications, filings, or approvals necessary to his appointment.

Outside Activities: The Executive may serve on up to two (2) outside boards of directors of for-profit entities that are not competitors of the Company, subject to prior approval of the Board. The Executive may also engage in charitable, civic, educational, and professional activities, provided that such activities do not materially interfere with the Executive's duties hereunder.

3. Term

Commencement Date: October 1, 2024 (the "Commencement Date"), subject to the satisfactory completion of transition arrangements with the Executive's current employer, Marlowe Asset Management Digital Holdings, Inc. The parties acknowledge that the Executive is subject to certain notice and transition obligations under his existing employment arrangements with Marlowe Asset Management, and the Company agrees to cooperate reasonably with the Executive in facilitating an orderly transition. In the event that the Executive's departure from Marlowe Asset Management is delayed beyond October 1, 2024 due to circumstances beyond the Executive's reasonable control, the Commencement Date may be extended by mutual written agreement of the parties for a period not to exceed thirty (30) days.

Initial Term: Five (5) years commencing on the Commencement Date and expiring on September 30, 2029 (the "Initial Term"), unless earlier terminated in accordance with the termination provisions set forth in this term sheet and the definitive Agreement.

Renewal: Following the expiration of the Initial Term, the Agreement shall automatically renew for successive one (1)-year periods (each, a "Renewal Term"), unless either party provides written notice of non-renewal to the other party at least one hundred eighty (180) days prior to the expiration of the then-current term (whether the Initial Term or any Renewal Term). For the avoidance of doubt, a notice of non-renewal shall not constitute a termination without Cause or a resignation for Good Reason.

Note: The Employer's position on the term of employment is unchanged from the Initial Term Sheet (v1). H&L did not propose any modifications to the term provisions in the v2 markup, and the parties are in agreement on this Section 3.

4. Base Salary

Annual Base Salary: The Executive shall receive an annual base salary of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000) (the "Base Salary"), payable in substantially equal installments in accordance with the Employer's standard payroll practices as in effect from time to time, but in no event less frequently than semi-monthly. The Base Salary shall be subject to all applicable tax withholdings and deductions.

Annual Review: The Base Salary shall be reviewed annually by the Remuneration Committee of the Board (the "Remuneration Committee"), currently chaired by Geoffrey Stanton. The Base Salary may be increased, but not decreased, during the Initial Term without the Executive's written consent. Any increase in Base Salary shall become the new "Base Salary" for all purposes of the Agreement, including for calculations of bonus targets, severance multiples, and other compensation elements expressed as a function of Base Salary.

Note: This provision is agreed and reflects no change from v1. The H&L markup did not propose any modification to the Base Salary amount or the terms governing its review, and the parties are aligned on this section.

5. Annual Incentive Compensation (Bonus)

Target Annual Bonus: The Executive shall be eligible to earn an annual incentive bonus (the "Annual Bonus") with a target of one hundred seventy-five percent (175%) of Base Salary, equal to Three Million Sixty-Two Thousand Five Hundred Dollars ($3,062,500) at the current Base Salary level (the "Target Annual Bonus").

Maximum Annual Bonus: The maximum Annual Bonus payable to the Executive in any fiscal year shall be three hundred percent (300%) of Base Salary, equal to Five Million Two Hundred Fifty Thousand Dollars ($5,250,000) at the current Base Salary level.

Performance Metrics: The performance metrics, goals, and weightings applicable to each fiscal year's Annual Bonus shall be established by the Remuneration Committee, in consultation with the Executive, within ninety (90) days following the Commencement Date (for the first fiscal year) and within ninety (90) days following the beginning of each subsequent fiscal year. The performance metrics shall include an appropriate mix of Company financial objectives (including, without limitation, revenue growth and Adjusted EBITDA targets) and strategic and individual performance objectives, with the specific weightings to be determined by the Remuneration Committee. The Remuneration Committee shall exercise reasonable good faith in establishing performance metrics that are challenging but achievable given the Company's business plan and market conditions.

Guaranteed Minimum (Year 1): Notwithstanding the foregoing, the Executive's Annual Bonus for the first fiscal year of employment shall not be less than the Target Annual Bonus (i.e., $3,062,500), prorated for any partial fiscal year based on the number of days the Executive is employed during such fiscal year divided by the total number of days in such fiscal year. For the avoidance of doubt, if the Commencement Date is October 1, 2024, and the Company's fiscal year ends on March 31, 2025, the guaranteed minimum bonus for the first fiscal year shall equal $3,062,500 × (182 / 365) = $1,528,082 (approximately), subject to final calculation.

Payment Timing: The Annual Bonus, if any, shall be paid in a lump sum cash payment within seventy-five (75) days following the end of the applicable fiscal year. Except as otherwise provided in Sections 9 and 10 below (relating to termination and change in control provisions), the Executive must remain continuously employed by the Employer on the date the Annual Bonus is paid in order to be eligible to receive such payment.

Note: The Employer's position on Annual Incentive Compensation is unchanged from v1. The H&L markup in v2 did not propose any material modification to the annual bonus provisions, and the parties are substantially agreed on this Section 5.

6. Sign-On Compensation (Make-Whole)

The following sign-on compensation is intended to serve as a partial make-whole for the compensation and equity awards that the Executive will forfeit upon his departure from Marlowe Asset Management Digital Holdings, Inc. The Executive's estimated unvested equity forfeiture at Marlowe Asset Management is approximately Twenty-Three Million Four Hundred Thousand Dollars ($23,400,000), based on the closing price of Pemberton Investors stock (NYSE: VDHI) as of the date of the Initial Term Sheet.

6(a). Sign-On Cash Bonus

Amount: The Employer shall pay the Executive a one-time sign-on cash bonus of Five Million Dollars ($5,000,000) (the "Sign-On Cash Bonus"), payable within thirty (30) days of the Commencement Date in a single lump sum, subject to applicable tax withholdings and deductions.

Clawback: The Sign-On Cash Bonus shall be subject to full repayment (net of taxes actually paid by the Executive on such amount) if the Executive voluntarily resigns from employment without Good Reason (as defined in Section 12(b) below) within twenty-four (24) months of the Commencement Date. In the event such repayment is triggered, the Executive shall repay the net after-tax amount of the Sign-On Cash Bonus to the Employer within sixty (60) days following the date of his resignation. The Employer may, at its election, offset any amounts owed by the Employer to the Executive (including any accrued but unpaid compensation, subject to applicable law) against the repayment obligation.

Purpose: The Sign-On Cash Bonus is intended to partially compensate the Executive for the forfeiture of unvested equity and other compensation at Marlowe Asset Management Digital Holdings, Inc. As set forth in greater detail in Section 6(b) below, the combination of the Sign-On Cash Bonus and the Sign-On Equity Awards is designed to provide an aggregate make-whole value of $23,400,000, matching the Executive's estimated unvested equity forfeiture at Marlowe Asset Management.

Note: The Sign-On Cash Bonus amount and the twenty-four (24)-month clawback period are unchanged from v1. H&L did not object to the amount or the clawback period in the v2 markup.

6(b). Sign-On Equity Awards

Sign-On RSU Grant: The Executive shall receive a grant of restricted stock units ("RSUs") under the Northgate Telecommunications PLC 2022 Omnibus Incentive Plan (the "Plan") with a grant date fair value of Twelve Million Dollars ($12,000,000) (the "Sign-On RSU Grant"). The Sign-On RSU Grant shall vest in three (3) equal annual installments on each of the first three (3) anniversaries of the Commencement Date (i.e., one-third on October 1, 2025; one-third on October 1, 2026; and one-third on October 1, 2027), subject to the Executive's continued employment on each applicable vesting date, except as otherwise provided in Sections 9 and 10 below. Each RSU shall represent the right to receive one American Depositary Receipt ("ADR") of NTP PLC, subject to the terms of the Plan and the applicable award agreement.

Sign-On PSU Grant: The Executive shall receive a grant of performance share units ("PSUs") under the Plan with a grant date fair value of Six Million Four Hundred Thousand Dollars ($6,400,000) (the "Sign-On PSU Grant"). The Sign-On PSU Grant shall cliff vest in full on the third (3rd) anniversary of the Commencement Date (i.e., October 1, 2027), subject to (i) the Executive's continued employment on the vesting date (except as otherwise provided in Sections 9 and 10 below) and (ii) the achievement of performance conditions tied to total shareholder return ("TSR") relative to a peer group and revenue growth hurdles, in each case as established by the Remuneration Committee within ninety (90) days of the Commencement Date. The PSUs shall be eligible to vest at between 0% and 200% of the target number of PSUs, depending on actual performance against the established hurdles, as determined by the Remuneration Committee.

Total Sign-On Equity: The aggregate grant date fair value of the Sign-On Equity Awards shall be Eighteen Million Four Hundred Thousand Dollars ($18,400,000).

Number of Shares (Estimated): Based on the closing price of NTP PLC ADRs of $15.87 per ADR on the New York Stock Exchange as of June 4, 2024, the total sign-on equity of $18,400,000 would represent approximately 1,159,420 ADRs (at target for the PSU component). This estimated share count is within the available pool of 14,200,000 shares reserved under the Plan. The actual number of shares underlying the awards will be determined based on the ADR closing price on or about the date of grant.

Make-Whole Reconciliation:

The aggregate make-whole compensation (Sign-On Cash Bonus of $5,000,000 plus Sign-On Equity Awards of $18,400,000) equals $23,400,000, which fully bridges the estimated forfeiture amount. The Employer notes that the sign-on equity component is structured with vesting periods and performance conditions, rather than as immediately vested awards, in order to align the Executive's interests with shareholders and to satisfy the Remuneration Committee's governance requirements.

Note: The Employer's position on sign-on equity is unchanged from v1. The H&L markup in v2 requested an increase in sign-on equity to $23,400,000 (the full estimated Marlowe Asset Management equity forfeiture value), which would have eliminated the need for the sign-on cash bonus to serve a make-whole function. The Employer declines this request. The Employer's position is that the combination of sign-on cash and sign-on equity provides full economic make-whole coverage while maintaining an appropriate balance between cash and equity compensation and preserving the shares available under the Plan for other executive compensation purposes.

7. Annual Long-Term Incentive Awards

Annual LTI Target: Commencing with the fiscal year beginning on the Commencement Date, the Executive shall be eligible to receive annual long-term incentive equity awards (the "Annual LTI Awards") with a target aggregate grant date fair value of Nine Million Dollars ($9,000,000) per year.

Mix: Each Annual LTI Award shall be allocated as follows:

• Sixty percent (60%) Performance Share Units (PSUs): $5,400,000 in PSUs, subject to three (3)-year cliff vesting and performance conditions established by the Remuneration Committee, consistent with the Company's standard LTI program for senior executives.

• Forty percent (40%) Restricted Stock Units (RSUs): $3,600,000 in RSUs, vesting ratably over three (3) years (one-third per year) from the date of grant, subject to the Executive's continued employment on each applicable vesting date.

Grant Timing: The first Annual LTI Award shall be made within thirty (30) days of the Commencement Date. Subsequent Annual LTI Awards shall be made in accordance with the Company's annual equity grant cycle, as determined by the Remuneration Committee. The actual grant date fair value of each Annual LTI Award may be adjusted upward (but not below the target amount) by the Remuneration Committee in its discretion based on individual and Company performance.

Plan Terms: All Annual LTI Awards shall be granted under the Plan and shall be subject to the terms and conditions set forth in the Plan and the applicable award agreements. The Company shall ensure that sufficient shares remain available under the Plan to make all Annual LTI Awards contemplated by this term sheet. In the event the Plan is terminated, replaced, or amended in a manner that would materially reduce the Executive's Annual LTI opportunity, the Company shall provide the Executive with economically equivalent long-term incentive compensation in a form mutually agreed upon by the Remuneration Committee and the Executive.

Note: This provision is substantially agreed per the H&L markup in v2. H&L did not propose any material modification to the Annual LTI target, mix, or vesting schedule, and the Employer's position is unchanged from v1.

8. Benefits and Perquisites

8(a). Retirement Benefits

401(k) Plan: The Executive shall be eligible to participate in the Northgate Telecommunications US, Inc. 401(k) Savings and Retirement Plan (or any successor thereto), subject to the terms and conditions of such plan as in effect from time to time. The Employer shall provide an employer matching contribution equal to six percent (6%) of the Executive's eligible compensation contributed to the plan, subject to applicable annual limits under Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as amended (the "Code"). Based on the Executive's Base Salary of $1,750,000, the estimated annual employer matching contribution is approximately $105,000 (subject to IRS limits and plan terms, which may affect the actual amount).

Supplemental Executive Retirement Plan: In addition to the 401(k) Plan, the Employer shall make an annual contribution of Two Hundred Fifty Thousand Dollars ($250,000) to a supplemental executive retirement plan ("SERP") maintained for the benefit of the Executive. The SERP contribution shall be made within thirty (30) days following the end of each calendar year during which the Executive is employed. The specific terms, investment options, and distribution provisions of the SERP shall be set forth in a separate SERP agreement to be executed in connection with the definitive Agreement.

8(b). Health and Insurance Benefits

Health and Welfare Plans: The Executive shall be entitled to participate in all health, dental, vision, disability, and other welfare benefit plans and programs made available by the Employer to its senior executive officers, subject to the terms and conditions of such plans as in effect from time to time. The Employer shall pay the premiums for the Executive's participation (and the participation of the Executive's eligible dependents) in such plans to the same extent as it pays premiums for other senior executive officers.

Supplemental Life Insurance: The Employer shall obtain and maintain, at its sole expense, a supplemental term life insurance policy on the life of the Executive with a death benefit of Two Million Dollars ($2,000,000), with the beneficiary or beneficiaries to be designated by the Executive.

Directors and Officers Insurance: The Executive shall be covered under the Company's directors and officers liability insurance policy currently maintained with Ashdown Surety & Insurance Co. (Policy No. ASI-D&O-NTP-2024-4471), which provides coverage of Fifty Million Dollars ($50,000,000) per occurrence and One Hundred Million Dollars ($100,000,000) in the aggregate, or under any successor or replacement policy providing coverage that is no less favorable in scope and amount.

8(c). Perquisites. Car Allowance: The Executive shall receive a car allowance of Thirty Thousand Dollars ($30,000) per year, payable in equal monthly installments. [CONCESSION: The Employer has increased this amount from $25,000 per year as set forth in v1 to $30,000 per year, accepting the revision proposed by H&L in the v2 markup.]

Executive Health Screening: The Executive shall be entitled to participate in the Employer's executive health screening program, which provides for comprehensive annual physical examinations and related health assessments at a facility selected by the Executive and approved by the Employer.

Financial and Tax Planning Reimbursement: The Employer shall reimburse the Executive for reasonable and documented expenses incurred in connection with personal financial planning, estate planning, and tax preparation and advisory services, up to a maximum of Fifty Thousand Dollars ($50,000) per calendar year. [CONCESSION: The Employer has increased this amount from $35,000 per year as set forth in v1 to $50,000 per year, accepting the revision proposed by H&L in the v2 markup.] All such reimbursements shall be made within sixty (60) days following the Executive's submission of appropriate documentation and shall be subject to applicable tax withholdings.

Tax Equalization: The Employer shall provide tax equalization for UK-source income earned by the Executive in connection with his UK board duties and other UK-source activities. The details of the tax equalization arrangements, including the methodology for calculating the equalization payment, the timing of true-up payments, and the engagement of tax advisors, shall be addressed in the UK Service Agreement and coordinated between Moorfield Bates LLP and Calderwood & Harkness LLP.

8(d). Indemnification and D&O Coverage

Indemnification: The Employer shall provide the Executive with full indemnification and advancement of legal fees and expenses to the maximum extent permitted by applicable law, including the General Corporation Law of the State of Delaware and the Companies Act 2006 (as applicable to NTP PLC). The Company shall enter into a separate indemnification agreement with the Executive, in form and substance satisfactory to the Executive and his counsel, providing for such indemnification and advancement rights, which agreement shall survive the termination of the Executive's employment for any reason.

Tail Coverage: The Employer shall maintain directors and officers liability insurance coverage for the Executive throughout his employment and for a period of not less than six (6) years following the termination of his employment (for any reason), with coverage limits and terms no less favorable than those in effect immediately prior to the date of termination. In the event the Company's existing D&O insurance policy does not provide for such tail coverage, the Employer shall purchase a "run-off" or "tail" policy providing equivalent coverage for the six (6)-year post-employment period.

8(e). Vacation and Paid Time Off

The Executive shall be entitled to not less than thirty (30) days of paid vacation per calendar year, consistent with the Company's policy for senior executives. Unused vacation days may be carried forward or paid out in accordance with Company policy. In addition, the Executive shall be entitled to all paid holidays observed by the Employer and to paid sick leave and other leave benefits in accordance with applicable law and Company policy.

Note on Section 8 Concessions: The Employer has made two concessions in this Section 8 from its position in v1, both in response to revisions proposed by H&L in the v2 markup: (i) the car allowance has been increased from $25,000 to $30,000 per year, and (ii) the financial and tax planning reimbursement cap has been increased from $35,000 to $50,000 per year. These are non-material concessions, representing an aggregate incremental cost to the Employer of approximately $20,000 per year, and are intended to demonstrate good faith in the ongoing negotiations. All other benefits and perquisites remain as set forth in v1.

9. Termination Provisions — Without Cause / Good Reason (Non-Change in Control)

The following provisions shall apply in the event the Executive's employment is terminated by the Employer without Cause (as defined in Section 12(a) below) or by the Executive for Good Reason (as defined in Section 12(b) below), in each case other than during the twenty-four (24)-month period following a Change in Control (which is addressed separately in Section 10 below).

9(a). Severance Payment

Employer's Position (unchanged from v1): The Executive shall receive a cash severance payment equal to two times (2×) the sum of the Executive's Base Salary and Target Annual Bonus, calculated as follows:

2 × ($1,750,000 + $3,062,500) = 2 × $4,812,500 = $9,625,000

The severance payment shall be made in a single lump sum within sixty (60) days following the date of termination, subject to (i) the Executive's timely execution and non-revocation of a separation agreement and general release of claims in the form prescribed by the Employer (the "Release"), and (ii) the expiration of any applicable revocation period under the Age Discrimination in Employment Act or other applicable law. The severance payment shall be subject to applicable tax withholdings and deductions.

H&L's Position (v2 markup): H&L proposed a severance multiplier of two and one-half times (2.5×) the sum of Base Salary and Target Annual Bonus, yielding a severance payment of $12,031,250. The Employer declines this proposal. The Employer's position of 2× is consistent with market practice for chief executive officers of publicly listed companies in the telecommunications and technology sectors, as confirmed by the independent benchmarking analysis conducted by Whitmore Hobson LLP. The Whitmore Hobson analysis reviewed the severance arrangements of twenty-three (23) comparable public company CEOs and found that the median non-CIC severance multiplier was 2.0× and the 75th percentile was 2.25×. The Employer is not prepared to exceed 2× for non-CIC severance.

9(b). Pro-Rata Bonus

The Executive shall receive a pro-rata Annual Bonus for the fiscal year in which the termination occurs, calculated based on the Target Annual Bonus (or, if determinable, actual performance through the date of termination), prorated for the number of days the Executive was employed during such fiscal year. The pro-rata bonus shall be paid at the same time as Annual Bonuses are paid to other senior executives of the Company for such fiscal year, but in no event later than seventy-five (75) days following the end of such fiscal year.

9(c). Equity Acceleration

Employer's Position (unchanged from v1): Upon a qualifying termination without Cause or for Good Reason (outside the CIC context), the Executive shall receive twelve (12) months of accelerated vesting of all unvested time-based equity awards (RSUs), including both Sign-On RSU Grants and Annual LTI RSU Grants. With respect to performance-based equity awards (PSUs), unvested PSUs shall remain outstanding and eligible to vest on a pro-rata basis (based on the number of full months of employment during the applicable performance period divided by the total number of months in the performance period) at the end of the applicable performance period, based on actual performance results as certified by the Remuneration Committee.

H&L's Position (v2 markup): H&L proposed full acceleration of all unvested equity awards (both time-based and performance-based) upon a qualifying non-CIC termination. The Employer declines this proposal. Full equity acceleration upon a non-CIC termination is inconsistent with market practice, shareholder expectations, and the Remuneration Committee's governance guidelines. The Employer's position of twelve (12) months of accelerated vesting for RSUs and pro-rata vesting based on actual performance for PSUs provides meaningful protection to the Executive while preserving the performance-based and retention-oriented nature of the Company's equity compensation program.

9(d). Benefits Continuation

Employer's Position (unchanged from v1): The Employer shall provide the Executive with continued participation in the Employer's group health insurance plans (or, at the Employer's option, reimbursement of COBRA premiums) at active-employee rates for a period of eighteen (18) months following the date of termination. The cost differential between the COBRA premium and the active-employee rate shall be borne by the Employer.

H&L's Position (v2 markup): H&L proposed twenty-four (24) months of COBRA continuation. The Employer declines and maintains its position of eighteen (18) months. The Employer's position is consistent with the median non-CIC benefits continuation period observed in the Whitmore Hobson benchmarking analysis.

9(e). Outplacement. The Employer shall provide the Executive with outplacement services from a nationally recognized executive outplacement firm selected by the Executive and reasonably approved by the Employer, at the Employer's expense, for a period of up to twelve (12) months following the date of termination, subject to a maximum aggregate cost to the Employer of Fifty Thousand Dollars ($50,000).

9(f). Conditions. All severance payments and benefits described in this Section 9 shall be conditioned upon: (i) the Executive's timely execution, delivery, and non-revocation of a separation agreement containing a mutual general release of claims, in form and substance reasonably satisfactory to both parties, within the time period specified therein (which shall not exceed sixty (60) days from the date of termination); (ii) the Executive's affirmation of his obligations under the restrictive covenant provisions set forth in Section 11 below; and (iii) the Executive's compliance with Section 409A of the Code. In the event the Executive breaches any material provision of the Release or the restrictive covenants following the commencement of severance payments, the Employer shall be entitled to cease all further severance payments and benefits and to recover, to the extent permitted by applicable law, any severance payments and benefits previously provided.

10. Change in Control Provisions

10(a). Definition of "Change in Control"

Employer's Position: For purposes of this Agreement, a "Change in Control" shall mean the occurrence of any of the following events:

(i) Acquisition of Voting Securities. The acquisition, directly or indirectly, by any "person" or "group" (as those terms are used in Section 13(d) and Section 14(d)(2) of the Securities Exchange Act of 1934, as amended) of beneficial ownership of more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities of NTP PLC entitled to vote generally in the election of directors;

(ii) Merger or Consolidation. The consummation of a merger, consolidation, statutory share exchange, or similar business combination transaction involving NTP PLC, unless immediately following such transaction the shareholders of NTP PLC immediately prior to such transaction hold, directly or indirectly, at least fifty percent (50%) of the combined voting power of the outstanding voting securities of the surviving or resulting entity (or its ultimate parent entity) entitled to vote generally in the election of directors; or

(iii) Asset Sale. The sale, transfer, or other disposition of all or substantially all of the assets of NTP PLC and its subsidiaries, taken as a whole, to any person or entity that is not a direct or indirect wholly-owned subsidiary of NTP PLC.

H&L's Position (v2 markup) — REJECTED: H&L proposed the addition of a fourth trigger:

(iv) Board Turnover Trigger (PROPOSED BY H&L — REJECTED). A change in the composition of the Board of Directors of NTP PLC such that, within any twelve (12)-month period, a majority of the directors serving on the Board are replaced by individuals whose appointment or nomination was not endorsed by a majority of the directors serving on the Board immediately prior to the commencement of such twelve (12)-month period.

The Employer rejects the proposed Board turnover trigger. The Board of Directors of NTP PLC, acting through the Remuneration Committee (Geoffrey Stanton, Chair), has considered the proposed Board turnover trigger and directed that this provision is not acceptable. The Board views the Board turnover trigger as inconsistent with the norms of the UK Corporate Governance Code and the established governance practices of NTP PLC. The inclusion of such a trigger could create perverse incentives, inhibit legitimate Board refreshment efforts, and potentially accelerate significant severance and equity acceleration obligations in circumstances that do not involve a genuine change in ownership or control of the Company. Furthermore, the Employer notes that Board turnover triggers are uncommon among FTSE 250 companies and are increasingly disfavored by institutional investors and proxy advisory firms.

10(b). CIC Severance — Double Trigger

Both parties have agreed in principle that Change in Control severance shall be structured as a "double trigger" — i.e., requiring the occurrence of both (1) a Change in Control event (as defined in Section 10(a)) and (2) a termination of the Executive's employment without Cause or a resignation by the Executive for Good Reason, in each case within twenty-four (24) months following the date of the Change in Control. For the avoidance of doubt, a Change in Control alone, without a qualifying termination, shall not entitle the Executive to any Change in Control severance payments or benefits.

10(c). CIC Severance Amount

Employer's Position (unchanged from v1): In the event of a qualifying CIC termination (as described in Section 10(b) above), the Executive shall receive a cash severance payment equal to two and one-half times (2.5×) the sum of the Executive's Base Salary and Target Annual Bonus, calculated as follows:

2.5 × ($1,750,000 + $3,062,500) = 2.5 × $4,812,500 = $12,031,250

The CIC severance payment shall be made in a single lump sum within sixty (60) days following the date of termination, subject to the Executive's timely execution and non-revocation of the Release and compliance with Section 409A.

H&L's Position (v2 markup): H&L proposed a CIC severance multiplier of three times (3×) the sum of Base Salary and Target Annual Bonus, yielding a CIC severance payment of $14,437,500. The Employer declines this proposal. The gap between the parties' positions is $2,406,250. The Employer's position of 2.5× is informed by the following considerations:

(a) ISS Proxy Advisory Guidelines. Thackeray Health IT ("ISS") generally identifies CIC severance packages that exceed three times (3×) the sum of base salary and target bonus as a potential concern in its evaluation of executive compensation. While the Employer's proposed 2.5× multiplier falls below this threshold, the addition of equity acceleration and other CIC benefits could approach the ISS threshold if the multiplier were increased to 3×.

(b) Veltrano Proxy Advisors Analysis. The Company has engaged Veltrano Proxy Advisors to model the potential impact of the CEO compensation package on the Company's upcoming binding remuneration policy vote at the 2025 Annual General Meeting. Veltrano has advised that a 3× CIC multiplier, combined with the tax gross-up requested by H&L (see Section 10(g) below), would likely trigger a negative recommendation from both ISS and Tarrant Partners LLC on the CEO compensation package. NTP received 87.4% say-on-pay support at its April 18, 2024 Annual General Meeting, and the Employer is committed to maintaining strong shareholder support.

(c) Market Benchmarking. The Whitmore Hobson benchmarking analysis found that the median CIC severance multiplier among comparable public company CEOs was 2.5× and the 75th percentile was 2.99×. The Employer's position of 2.5× is at market median.

The Employer is not prepared to exceed 2.5× for CIC severance.

10(d). CIC Equity Acceleration

Time-Based Awards (RSUs): Upon a qualifying CIC termination, all unvested time-based equity awards (RSUs) held by the Executive, including Sign-On RSU Grants and Annual LTI RSU Grants, shall vest in full on an accelerated basis as of the date of the qualifying CIC termination.

Performance-Based Awards (PSUs): Upon a qualifying CIC termination, unvested performance-based equity awards (PSUs) shall vest on a pro-rata basis, based on actual performance through the date of the Change in Control event (or, if actual performance cannot reasonably be measured as of such date, at the target level of performance). The pro-ration shall be calculated based on the number of full months of the applicable performance period that have elapsed through the date of the Change in Control event, divided by the total number of months in such performance period.

H&L's Position (v2 markup): H&L proposed that PSUs vest at target (not pro-rata) upon a qualifying CIC termination. The Employer maintains its position of pro-rata vesting based on actual performance. The Employer's position reflects the principle that performance-based awards should, to the greatest extent practicable, reflect actual performance outcomes rather than assumed target achievement. Pro-rata vesting at actual performance is consistent with the Remuneration Committee's governance guidelines and emerging best practices among FTSE 250 companies.

10(e). CIC Benefits Continuation

Employer's Position (unchanged from v1): The Employer shall provide the Executive with continued participation in the Employer's group health insurance plans (or, at the Employer's option, reimbursement of COBRA premiums) at active-employee rates for a period of twenty-four (24) months following the date of a qualifying CIC termination.

H&L's Position (v2 markup): H&L proposed thirty-six (36) months of COBRA continuation following a qualifying CIC termination. The Employer declines and maintains its position of twenty-four (24) months. The Employer's position of twenty-four (24) months matches the CIC measurement period (i.e., the twenty-four (24)-month window following the Change in Control during which a qualifying termination must occur to trigger CIC severance) and is consistent with market practice.

10(f). CIC Outplacement

The Employer shall provide the Executive with outplacement services from a nationally recognized executive outplacement firm, at the Employer's expense, subject to a maximum aggregate cost to the Employer of Fifty Thousand Dollars ($50,000), on the same terms as set forth in Section 9(e) above.

10(g). Section 280G Tax Treatment

Employer's Position (unchanged from v1): The Agreement shall include a "best-net" safe harbor cutback provision under Section 280G of the Code. No tax gross-up shall be provided. Specifically:

In the event that any payments or benefits provided to the Executive under this Agreement or any other plan, program, or arrangement of the Company or its affiliates (the "Total Payments") would constitute "excess parachute payments" within the meaning of Section 280G of the Code and would therefore be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), the Total Payments shall be reduced to the "safe harbor" amount (i.e., three times (3×) the Executive's "base amount" as defined in Section 280G(b)(3) of the Code, minus one dollar ($1)) if, and only if, such reduction would result in a greater after-tax benefit to the Executive than receiving the full Total Payments and bearing the Excise Tax.

Based on preliminary analysis by the Employer's tax advisors at Whitmore Hobson LLP, the Executive's estimated "base amount" for purposes of Section 280G is approximately $7,840,000, yielding a safe harbor amount of approximately $23,519,999 (3 × $7,840,000 − $1). Under the Employer's proposed 2.5× CIC severance arrangement, the Total Payments (including CIC severance, equity acceleration, and other benefits) are estimated to approach or slightly exceed the safe harbor amount, depending on the value of equity acceleration at the time of the Change in Control. In such circumstances, the "best-net" cutback would be expected to be slightly more favorable to the Executive than the receipt of full Total Payments net of the 20% Excise Tax — making the gross-up request largely a matter of principle rather than economic substance.

H&L's Position (v2 markup): H&L proposed a full Section 280G tax gross-up, under which the Employer would make an additional payment to the Executive sufficient to cover the Excise Tax and all income, employment, and excise taxes on such additional payment, thereby placing the Executive in the same after-tax position as if no Excise Tax had been imposed. The Employer rejects this proposal. The Employer's reasons are as follows:

(a) Estimated Gross-Up Cost. Based on preliminary modeling by Whitmore Hobson LLP, the estimated cost of a full Section 280G tax gross-up under the proposed compensation structure would range from approximately $4,200,000 to $6,800,000, depending on the final calculation of the Executive's Total Payments at the time of a Change in Control.

(b) ISS Policy. ISS identifies excise tax gross-ups as a "problematic" pay practice in its evaluation of executive compensation. The presence of a tax gross-up is one of several factors that can trigger a negative ISS recommendation on a company's say-on-pay proposal.

(c) Proxy Advisory Impact. Veltrano Proxy Advisors has advised the Company that the inclusion of a full Section 280G tax gross-up in the CEO compensation package, particularly when combined with the compensation levels proposed herein, would likely result in a negative recommendation from ISS and Tarrant Partners LLC on the CEO compensation package. Given that NTP's remuneration policy will be subject to a binding shareholder vote at the 2025 AGM (in accordance with UK regulatory requirements), a negative proxy advisory recommendation could jeopardize the Company's ability to implement the agreed-upon compensation arrangements.

(d) Market Trend. Tax gross-ups have been eliminated by the vast majority of large-cap public companies in both the US and UK. Among the twenty-three (23) comparable companies reviewed in the Whitmore Hobson benchmarking analysis, only two (2) retained a Section 280G tax gross-up as of the date of the analysis.

The Employer is not prepared to include a tax gross-up under any circumstances.

10(h). Section 409A Compliance

All Change in Control payments and benefits shall be structured and administered in compliance with Section 409A of the Code. To the extent required by Section 409A, if the Executive is a "specified employee" (as defined in Section 409A(a)(2)(B)(i) of the Code) on the date of his separation from service, any payments that constitute nonqualified deferred compensation subject to Section 409A shall be delayed for a period of six (6) months following the Executive's separation from service (or, if earlier, the Executive's death), with the accumulated payments made in a lump sum on the first business day following the expiration of such six-month period. The Agreement shall be interpreted and administered in a manner consistent with Section 409A, and the parties shall cooperate in good faith to modify the Agreement to the extent necessary to achieve compliance.

11. Restrictive Covenants

11(a). Non-Competition. Employer's Revised Position [REVISED FROM v1]: During the Executive's employment and for a period of eighteen (18) months following the termination of the Executive's employment for any reason (the "Non-Compete Period"), the Executive shall not, directly or indirectly, engage in, be employed by, consult for, render services to, or hold a material ownership interest (other than a passive investment of less than two percent (2%) of the outstanding shares of a publicly traded company) in any Competing Enterprise.

Duration: The Employer has reduced the Non-Compete Period from twenty-four (24) months (as set forth in v1) to eighteen (18) months. This reduction represents a meaningful concession by the Employer. The Employer maintains that eighteen (18) months is a reasonable and appropriate duration for a CEO-level non-compete, given the scope of the Executive's access to the Company's most sensitive strategic, financial, customer, and competitive information.

Geographic Scope (unchanged from v1): The non-competition restriction shall apply worldwide. The Employer maintains a worldwide scope because NTP operates in over forty (40) countries across six (6) continents, and the Executive, as CEO, will have direct responsibility for and access to confidential information relating to the Company's global operations, strategy, customer relationships, and competitive positioning. A geographically limited non-compete would be inadequate to protect the Company's legitimate business interests.

Activity Restriction — Definition of "Competing Enterprise": For purposes of this Section 11(a), a "Competing Enterprise" means any company, business, or enterprise that derives more than fifteen percent (15%) of its annual revenue from telecommunications services, telecommunications infrastructure, or enterprise software-as-a-service ("SaaS") platforms serving telecommunications operators. This revenue-based test provides an objective, measurable standard that captures the Company's direct and indirect competitors without being unduly broad.

Note on Concessions and Rejections:

The Employer has reduced the non-compete duration from twenty-four (24) months to eighteen (18) months as a concession to address H&L's concerns about the duration of the restriction. This concession is made while maintaining the worldwide geographic scope and the revenue-based activity test. The Employer does not accept H&L's proposed twelve (12)-month duration, and the following additional elements of H&L's v2 markup are also declined:

• H&L's Proposed Duration (12 months): The Employer considers twelve (12) months to be insufficient for a CEO-level non-compete at a global telecommunications company. The Executive will have access to multi-year strategic plans, M&A pipeline information, and long-cycle customer relationships that would remain competitively sensitive well beyond a twelve (12)-month period.

• H&L's Proposed Geographic Limitation (North America and Western Europe): The Employer declines to limit the non-compete to North America and Western Europe. NTP derives approximately thirty-five percent (35%) of its revenue from Asia-Pacific, Middle East, and African markets, and the Executive will have strategic responsibility for and access to confidential information relating to these markets. A geographically limited restriction would leave the Company without protection in regions representing a significant and growing portion of its business.

• H&L's Proposed Scheduled-Competitor Approach: H&L proposed defining the competitive restriction by reference to a schedule of eight (8) named direct competitors, rather than the Employer's revenue-based test. The Employer declines this approach. A scheduled-competitor approach is inherently under-inclusive, as it fails to account for new market entrants, industry consolidation, diversified conglomerates with significant telecom/SaaS divisions, and other competitive threats that may emerge during the Non-Compete Period. The revenue-based test provides more comprehensive protection appropriate for a CEO of a global telecom/SaaS company with broad strategic visibility.

Enforceability Note: Calderwood & Harkness LLP has advised the Employer that a worldwide non-compete with an eighteen (18)-month duration will be analyzed for enforceability under New York law reasonableness standards, which assess whether the restriction is (i) necessary to protect legitimate business interests, (ii) not unduly burdensome to the employee, and (iii) not harmful to the public. The Employer considers the proposed restriction — eighteen (18) months in duration, worldwide in scope, and limited to enterprises deriving more than fifteen percent (15%) of revenue from specified sectors — to be reasonable and enforceable under New York law, particularly given the Executive's role as the Company's chief executive, his access to the Company's most sensitive confidential information, and the payment of substantial garden leave compensation during the first six (6) months of the Non-Compete Period (as set forth in Section 11(b) below).

11(b). Garden Leave

Employer's Position (unchanged from v1): The Executive shall be subject to a paid garden leave period of six (6) months immediately following the termination of his employment (the "Garden Leave Period"). During the Garden Leave Period, the Executive shall continue to receive his Base Salary (at the rate in effect immediately prior to termination), payable in accordance with the Employer's standard payroll practices, but shall not be required to perform any duties and shall not be permitted to commence employment or provide services to any third party. The total garden leave compensation shall be:

$1,750,000 ÷ 12 × 6 = $875,000

The Garden Leave Period shall run concurrently with the first six (6) months of the Non-Compete Period. Accordingly, the effective post-garden-leave non-compete period (during which the Executive is subject to the non-competition restriction but is not receiving garden leave compensation) shall be twelve (12) months.

H&L's Position (v2 markup): H&L proposed twelve (12) months of garden leave at full compensation (Base Salary plus pro-rata Target Annual Bonus), with the garden leave and non-compete periods running entirely concurrently, which would effectively reduce the post-employment non-compete restriction to zero (0) additional months beyond the garden leave period. The Employer declines this proposal. A twelve (12)-month garden leave period at full compensation would impose a significant cost on the Company (approximately $4,812,500) and would, when combined with a concurrent non-compete, eliminate any meaningful post-employment competitive restriction. The Employer's position of six (6) months of garden leave at base salary only, running concurrently with the first six (6) months of the non-compete, provides reasonable support to the Executive during the initial transition period while preserving twelve (12) months of substantive post-garden-leave competitive restriction.

11(c). Non-Solicitation. Employer's Position (unchanged from v1): During the Executive's employment and for a period of twenty-four (24) months following the termination of the Executive's employment for any reason (the "Non-Solicitation Period"), the Executive shall not, directly or indirectly:

(i) solicit, recruit, hire, or attempt to solicit, recruit, or hire any employee of the Company or its subsidiaries, or encourage or induce any such employee to leave the employ of the Company or its subsidiaries; or

(ii) solicit, contact, or interfere with, or attempt to solicit, contact, or interfere with, the business relationship between the Company (or any of its subsidiaries) and any customer, client, vendor, or business partner of the Company (or any of its subsidiaries) with whom the Executive had material contact or about whom the Executive received material confidential information during the last twenty-four (24) months of his employment, for the purpose of diverting or taking away such person's business from the Company.

H&L's Position (v2 markup): H&L proposed (a) reducing the Non-Solicitation Period to eighteen (18) months and (b) eliminating the customer non-solicitation provision (clause (ii) above), limiting the restriction to employee non-solicitation only. The Employer declines both proposed modifications. The Employer maintains its position of twenty-four (24) months and both employee and customer non-solicitation. The CEO of a global telecommunications company has unparalleled access to the Company's most important customer relationships and its most senior talent. A comprehensive non-solicitation covenant covering both employees and customers, for a period of twenty-four (24) months, is essential to protect the Company's legitimate business interests and is consistent with market practice for CEO-level employment agreements.

11(d). Non-Disparagement. The Agreement shall contain a mutual, perpetual non-disparagement covenant, under which each party agrees not to make, publish, or communicate any statement that is disparaging, defamatory, or damaging to the other party, its affiliates, or their respective officers, directors, employees, products, or services.

Carve-Outs: The non-disparagement covenant shall not restrict either party from (i) making truthful statements in the context of any legal, administrative, or regulatory proceeding; (ii) making truthful statements in any filing with any governmental or regulatory authority; (iii) responding to any subpoena, court order, or governmental inquiry; or (iv) making truthful statements in the context of any investigation by the Company's Board, audit committee, or compliance function.

Note: This provision is agreed in principle per the H&L markup in v2. No material change from v1.

11(e). Confidentiality. The Executive shall have a perpetual obligation not to disclose, use, or make available to any third party any Confidential Information (as defined in the definitive Agreement) of the Company or its affiliates, except as required in the performance of his duties or as otherwise authorized by the Board. "Confidential Information" shall be broadly defined to include, without limitation, trade secrets, proprietary technology, business strategies, financial information and projections, customer and supplier information, pricing and contract terms, personnel information, M&A pipeline and transaction information, and any other non-public information of the Company that derives economic value from not being generally known.

Standard Carve-Outs: The confidentiality obligation shall not apply to information that (i) is or becomes part of the public domain through no fault of the Executive; (ii) is lawfully received by the Executive from a third party without restriction on disclosure and without breach of any obligation of confidentiality; or (iii) is required to be disclosed by applicable law, regulation, or valid court order, provided that the Executive gives the Company prompt written notice of such requirement (to the extent legally permitted) and cooperates with the Company in seeking a protective order or other appropriate remedy.

Note: This provision is substantially agreed per the v1/v2 negotiations. No material change.

12. Definitions — Good Reason and Cause

12(a). Termination for "Cause"

For purposes of this Agreement, "Cause" shall mean the occurrence of any of the following:

(i) The Executive's willful and material breach of any material provision of this Agreement, the UK Service Agreement, or any other written agreement between the Executive and the Company or its affiliates, which breach remains uncured for a period of thirty (30) days following the Executive's receipt of written notice from the Board specifying the nature of such breach in reasonable detail;

(ii) The Executive's conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving fraud, dishonesty, or moral turpitude under the laws of any jurisdiction;

(iii) The Executive's commission of an act of fraud, embezzlement, misappropriation, or material dishonesty against or in connection with the Company or its affiliates;

(iv) The Executive's willful failure to perform his material duties hereunder (other than any such failure resulting from the Executive's physical or mental disability), which failure remains uncured for a period of thirty (30) days following the Executive's receipt of written notice from the Board specifying the nature of such failure in reasonable detail; or

(v) The Executive's material violation of any written Company policy or code of conduct, to the extent such violation causes demonstrable and material harm to the Company's business, operations, financial condition, or reputation.

For purposes of this definition, no act or failure to act by the Executive shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interest of the Company.

Note: The definition of "Cause" is substantially agreed based on v1/v2 negotiations. In response to H&L's request in the v2 markup, the Employer has accepted a thirty (30)-day cure period for items (i) and (iv). Items (ii), (iii), and (v) are not subject to a cure period, as the nature of the conduct described in those provisions do

REVISED TERM SHEET — CEO EMPLOYMENT AGREEMENT (v3)
Counter-Proposal of Northgate Telecommunications PLC
June 24, 2024
CONFIDENTIAL — SUBJECT TO CONTRACT — FOR DISCUSSION PURPOSES ONLY
Prepared by Calderwood & Harkness LLP, 299 Park Avenue, 42nd Floor, New York, NY 10171, on behalf of Northgate Telecommunications PLC. Matter Reference: 1022-00004.
This revised term sheet supersedes the term sheet dated June 10, 2024 (the "Initial Term Sheet" or "v1"), and reflects the Employer's counter-proposal in response to the markup received from Hargrove & Liddell LLP ("H&L") dated June 17, 2024 (the "H&L Markup" or "v2"). The terms set forth herein remain subject to negotiation of definitive documentation acceptable to both parties. Unless otherwise indicated, capitalized terms used but not defined herein shall have the meanings ascribed to them in the Initial Term Sheet or as will be defined in the definitive Executive Employment Agreement (the "Agreement"). Where this revised term sheet is silent on a particular term addressed in the Initial Term Sheet, the Employer's position as stated in the Initial Term Sheet shall be deemed to continue in full force and effect for purposes of ongoing negotiations.
The following sets forth the material terms proposed by the Employer for the employment of Marcus Elliot Harding as Chief Executive Officer and President.
1. Parties
Employer:
Northgate Telecommunications US, Inc. ("NTP US"), a corporation organized and existing under the laws of the State of Delaware and a wholly-owned subsidiary of Northgate Telecommunications PLC ("NTP" or the "Company"), a public limited company incorporated in England and Wales under registered number 07381264. NTP's principal office in the United Kingdom is located at 45 Canary Wharf Tower, One Canada Square, London E14 5AB, United Kingdom. NTP US maintains its US operations headquarters at 600 Lexington Avenue, 38th Floor, New York, New York 10022. NTP is listed on the London Stock Exchange (LON: NTP) and, through its American Depositary Receipt program, on the New York Stock Exchange (NYSE: NTPC).
Executive:
Marcus Elliot Harding (the "Executive"), currently serving as President and Chief Operating Officer of Marlowe Asset Management Digital Holdings, Inc. (NYSE: VDHI), an individual residing at 14 Gramercy Park South, Apt. 12A, New York, New York 10003.
Note Regarding Dual Employment Structure: NTP PLC will be a separate party to a UK service agreement (the "UK Service Agreement") governing the Executive's UK board duties and regulatory compliance obligations. The UK Service Agreement will be prepared by Moorfield Bates LLP in coordination with Calderwood & Harkness LLP. This term sheet addresses exclusively the terms of the primary US employment agreement between NTP US and the Executive, except where reference to the UK Service Agreement is expressly made for coordination purposes.
2. Position and Duties
Title: The Executive shall serve as Chief Executive Officer of Northgate Telecommunications PLC and President of Northgate Telecommunications US, Inc. The Executive shall hold both titles concurrently for the duration of his employment, and neither title shall be modified, diminished, or removed without the Executive's prior written consent.
Reporting: The Executive shall report directly and exclusively to the Board of Directors of NTP PLC (the "Board"). The current Chair of the Board is Dame Philippa Thornton-Hale. The Executive shall not be required to report to any other officer, committee, or person other than the Board.
Duties: The Executive shall devote substantially all of his professional time, attention, skill, and energy to the full-time executive leadership of the Company and its global subsidiaries, affiliates, and joint ventures. The Executive's duties shall be commensurate with the position of Chief Executive Officer of a publicly listed, multinational telecommunications and enterprise SaaS company with global operations. The Executive shall have such authority and responsibilities as are customarily associated with the position of Chief Executive Officer, including but not limited to the development and execution of corporate strategy, oversight of all business operations, management of the senior leadership team, and representation of the Company to investors, regulators, customers, and other stakeholders.
Geographic Allocation: The Executive shall allocate approximately eighty percent (80%) of his time and duties to the Company's US operations, based at the New York headquarters at 600 Lexington Avenue, 38th Floor, New York, New York 10022, and approximately twenty percent (20%) of his time and duties to the Company's UK operations, based at the London headquarters at 45 Canary Wharf Tower, One Canada Square, London E14 5AB. The precise allocation of time between the US and UK may vary from time to time based on business needs, provided that the Executive's principal place of employment shall remain in New York, New York.
Board Membership: The Executive shall be appointed to the Board of Directors of NTP PLC promptly upon commencement of employment. The Company shall use its reasonable best efforts to secure such appointment, including, if necessary, expanding the size of the Board to accommodate the Executive's appointment. The Executive shall serve as an executive director on the Board for the duration of his employment. In the event the Executive ceases to serve as Chief Executive Officer for any reason, he shall promptly tender his resignation from the Board.
Regulatory Compliance: The Executive acknowledges that, as an executive director of a company listed on the London Stock Exchange, he will be subject to the Financial Conduct Authority's Senior Managers and Certification Regime ("SM&CR") and other applicable UK regulatory requirements. The Executive's SM&CR obligations, fitness and propriety requirements, and related regulatory matters shall be addressed in the UK Service Agreement to be drafted by Moorfield Bates LLP. The Executive agrees to cooperate fully with the Company in connection with any regulatory applications, filings, or approvals necessary to his appointment.
Outside Activities: The Executive may serve on up to two (2) outside boards of directors of for-profit entities that are not competitors of the Company, subject to prior approval of the Board. The Executive may also engage in charitable, civic, educational, and professional activities, provided that such activities do not materially interfere with the Executive's duties hereunder.
3. Term
Commencement Date: October 1, 2024 (the "Commencement Date"), subject to the satisfactory completion of transition arrangements with the Executive's current employer, Marlowe Asset Management Digital Holdings, Inc. The parties acknowledge that the Executive is subject to certain notice and transition obligations under his existing employment arrangements with Marlowe Asset Management, and the Company agrees to cooperate reasonably with the Executive in facilitating an orderly transition. In the event that the Executive's departure from Marlowe Asset Management is delayed beyond October 1, 2024 due to circumstances beyond the Executive's reasonable control, the Commencement Date may be extended by mutual written agreement of the parties for a period not to exceed thirty (30) days.
Initial Term: Five (5) years commencing on the Commencement Date and expiring on September 30, 2029 (the "Initial Term"), unless earlier terminated in accordance with the termination provisions set forth in this term sheet and the definitive Agreement.
Renewal: Following the expiration of the Initial Term, the Agreement shall automatically renew for successive one (1)-year periods (each, a "Renewal Term"), unless either party provides written notice of non-renewal to the other party at least one hundred eighty (180) days prior to the expiration of the then-current term (whether the Initial Term or any Renewal Term). For the avoidance of doubt, a notice of non-renewal shall not constitute a termination without Cause or a resignation for Good Reason.
Note: The Employer's position on the term of employment is unchanged from the Initial Term Sheet (v1). H&L did not propose any modifications to the term provisions in the v2 markup, and the parties are in agreement on this Section 3.
4. Base Salary
Annual Base Salary: The Executive shall receive an annual base salary of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000) (the "Base Salary"), payable in substantially equal installments in accordance with the Employer's standard payroll practices as in effect from time to time, but in no event less frequently than semi-monthly. The Base Salary shall be subject to all applicable tax withholdings and deductions.
Annual Review: The Base Salary shall be reviewed annually by the Remuneration Committee of the Board (the "Remuneration Committee"), currently chaired by Geoffrey Stanton. The Base Salary may be increased, but not decreased, during the Initial Term without the Executive's written consent. Any increase in Base Salary shall become the new "Base Salary" for all purposes of the Agreement, including for calculations of bonus targets, severance multiples, and other compensation elements expressed as a function of Base Salary.
Note: This provision is agreed and reflects no change from v1. The H&L markup did not propose any modification to the Base Salary amount or the terms governing its review, and the parties are aligned on this section.
5. Annual Incentive Compensation (Bonus)
Target Annual Bonus: The Executive shall be eligible to earn an annual incentive bonus (the "Annual Bonus") with a target of one hundred seventy-five percent (175%) of Base Salary, equal to Three Million Sixty-Two Thousand Five Hundred Dollars ($3,062,500) at the current Base Salary level (the "Target Annual Bonus").
Maximum Annual Bonus: The maximum Annual Bonus payable to the Executive in any fiscal year shall be three hundred percent (300%) of Base Salary, equal to Five Million Two Hundred Fifty Thousand Dollars ($5,250,000) at the current Base Salary level.
Performance Metrics: The performance metrics, goals, and weightings applicable to each fiscal year's Annual Bonus shall be established by the Remuneration Committee, in consultation with the Executive, within ninety (90) days following the Commencement Date (for the first fiscal year) and within ninety (90) days following the beginning of each subsequent fiscal year. The performance metrics shall include an appropriate mix of Company financial objectives (including, without limitation, revenue growth and Adjusted EBITDA targets) and strategic and individual performance objectives, with the specific weightings to be determined by the Remuneration Committee. The Remuneration Committee shall exercise reasonable good faith in establishing performance metrics that are challenging but achievable given the Company's business plan and market conditions.
Guaranteed Minimum (Year 1): Notwithstanding the foregoing, the Executive's Annual Bonus for the first fiscal year of employment shall not be less than the Target Annual Bonus (i.e., $3,062,500), prorated for any partial fiscal year based on the number of days the Executive is employed during such fiscal year divided by the total number of days in such fiscal year. For the avoidance of doubt, if the Commencement Date is October 1, 2024, and the Company's fiscal year ends on March 31, 2025, the guaranteed minimum bonus for the first fiscal year shall equal $3,062,500 × (182 / 365) = $1,528,082 (approximately), subject to final calculation.
Payment Timing: The Annual Bonus, if any, shall be paid in a lump sum cash payment within seventy-five (75) days following the end of the applicable fiscal year. Except as otherwise provided in Sections 9 and 10 below (relating to termination and change in control provisions), the Executive must remain continuously employed by the Employer on the date the Annual Bonus is paid in order to be eligible to receive such payment.
Note: The Employer's position on Annual Incentive Compensation is unchanged from v1. The H&L markup in v2 did not propose any material modification to the annual bonus provisions, and the parties are substantially agreed on this Section 5.
6. Sign-On Compensation (Make-Whole)
The following sign-on compensation is intended to serve as a partial make-whole for the compensation and equity awards that the Executive will forfeit upon his departure from Marlowe Asset Management Digital Holdings, Inc. The Executive's estimated unvested equity forfeiture at Marlowe Asset Management is approximately Twenty-Three Million Four Hundred Thousand Dollars ($23,400,000), based on the closing price of Pemberton Investors stock (NYSE: VDHI) as of the date of the Initial Term Sheet.
6(a). Sign-On Cash Bonus
Amount: The Employer shall pay the Executive a one-time sign-on cash bonus of Five Million Dollars ($5,000,000) (the "Sign-On Cash Bonus"), payable within thirty (30) days of the Commencement Date in a single lump sum, subject to applicable tax withholdings and deductions.
Clawback: The Sign-On Cash Bonus shall be subject to full repayment (net of taxes actually paid by the Executive on such amount) if the Executive voluntarily resigns from employment without Good Reason (as defined in Section 12(b) below) within twenty-four (24) months of the Commencement Date. In the event such repayment is triggered, the Executive shall repay the net after-tax amount of the Sign-On Cash Bonus to the Employer within sixty (60) days following the date of his resignation. The Employer may, at its election, offset any amounts owed by the Employer to the Executive (including any accrued but unpaid compensation, subject to applicable law) against the repayment obligation.
Purpose: The Sign-On Cash Bonus is intended to partially compensate the Executive for the forfeiture of unvested equity and other compensation at Marlowe Asset Management Digital Holdings, Inc. As set forth in greater detail in Section 6(b) below, the combination of the Sign-On Cash Bonus and the Sign-On Equity Awards is designed to provide an aggregate make-whole value of $23,400,000, matching the Executive's estimated unvested equity forfeiture at Marlowe Asset Management.
Note: The Sign-On Cash Bonus amount and the twenty-four (24)-month clawback period are unchanged from v1. H&L did not object to the amount or the clawback period in the v2 markup.
6(b). Sign-On Equity Awards
Sign-On RSU Grant: The Executive shall receive a grant of restricted stock units ("RSUs") under the Northgate Telecommunications PLC 2022 Omnibus Incentive Plan (the "Plan") with a grant date fair value of Twelve Million Dollars ($12,000,000) (the "Sign-On RSU Grant"). The Sign-On RSU Grant shall vest in three (3) equal annual installments on each of the first three (3) anniversaries of the Commencement Date (i.e., one-third on October 1, 2025; one-third on October 1, 2026; and one-third on October 1, 2027), subject to the Executive's continued employment on each applicable vesting date, except as otherwise provided in Sections 9 and 10 below. Each RSU shall represent the right to receive one American Depositary Receipt ("ADR") of NTP PLC, subject to the terms of the Plan and the applicable award agreement.
Sign-On PSU Grant: The Executive shall receive a grant of performance share units ("PSUs") under the Plan with a grant date fair value of Six Million Four Hundred Thousand Dollars ($6,400,000) (the "Sign-On PSU Grant"). The Sign-On PSU Grant shall cliff vest in full on the third (3rd) anniversary of the Commencement Date (i.e., October 1, 2027), subject to (i) the Executive's continued employment on the vesting date (except as otherwise provided in Sections 9 and 10 below) and (ii) the achievement of performance conditions tied to total shareholder return ("TSR") relative to a peer group and revenue growth hurdles, in each case as established by the Remuneration Committee within ninety (90) days of the Commencement Date. The PSUs shall be eligible to vest at between 0% and 200% of the target number of PSUs, depending on actual performance against the established hurdles, as determined by the Remuneration Committee.
Total Sign-On Equity: The aggregate grant date fair value of the Sign-On Equity Awards shall be Eighteen Million Four Hundred Thousand Dollars ($18,400,000).
Number of Shares (Estimated): Based on the closing price of NTP PLC ADRs of $15.87 per ADR on the New York Stock Exchange as of June 4, 2024, the total sign-on equity of $18,400,000 would represent approximately 1,159,420 ADRs (at target for the PSU component). This estimated share count is within the available pool of 14,200,000 shares reserved under the Plan. The actual number of shares underlying the awards will be determined based on the ADR closing price on or about the date of grant.
Make-Whole Reconciliation:
The aggregate make-whole compensation (Sign-On Cash Bonus of $5,000,000 plus Sign-On Equity Awards of $18,400,000) equals $23,400,000, which fully bridges the estimated forfeiture amount. The Employer notes that the sign-on equity component is structured with vesting periods and performance conditions, rather than as immediately vested awards, in order to align the Executive's interests with shareholders and to satisfy the Remuneration Committee's governance requirements.
Note: The Employer's position on sign-on equity is unchanged from v1. The H&L markup in v2 requested an increase in sign-on equity to $23,400,000 (the full estimated Marlowe Asset Management equity forfeiture value), which would have eliminated the need for the sign-on cash bonus to serve a make-whole function. The Employer declines this request. The Employer's position is that the combination of sign-on cash and sign-on equity provides full economic make-whole coverage while maintaining an appropriate balance between cash and equity compensation and preserving the shares available under the Plan for other executive compensation purposes.
7. Annual Long-Term Incentive Awards
Annual LTI Target: Commencing with the fiscal year beginning on the Commencement Date, the Executive shall be eligible to receive annual long-term incentive equity awards (the "Annual LTI Awards") with a target aggregate grant date fair value of Nine Million Dollars ($9,000,000) per year.
Mix: Each Annual LTI Award shall be allocated as follows:
• Sixty percent (60%) Performance Share Units (PSUs): $5,400,000 in PSUs, subject to three (3)-year cliff vesting and performance conditions established by the Remuneration Committee, consistent with the Company's standard LTI program for senior executives.
• Forty percent (40%) Restricted Stock Units (RSUs): $3,600,000 in RSUs, vesting ratably over three (3) years (one-third per year) from the date of grant, subject to the Executive's continued employment on each applicable vesting date.
Grant Timing: The first Annual LTI Award shall be made within thirty (30) days of the Commencement Date. Subsequent Annual LTI Awards shall be made in accordance with the Company's annual equity grant cycle, as determined by the Remuneration Committee. The actual grant date fair value of each Annual LTI Award may be adjusted upward (but not below the target amount) by the Remuneration Committee in its discretion based on individual and Company performance.
Plan Terms: All Annual LTI Awards shall be granted under the Plan and shall be subject to the terms and conditions set forth in the Plan and the applicable award agreements. The Company shall ensure that sufficient shares remain available under the Plan to make all Annual LTI Awards contemplated by this term sheet. In the event the Plan is terminated, replaced, or amended in a manner that would materially reduce the Executive's Annual LTI opportunity, the Company shall provide the Executive with economically equivalent long-term incentive compensation in a form mutually agreed upon by the Remuneration Committee and the Executive.
Note: This provision is substantially agreed per the H&L markup in v2. H&L did not propose any material modification to the Annual LTI target, mix, or vesting schedule, and the Employer's position is unchanged from v1.
8. Benefits and Perquisites
8(a). Retirement Benefits
401(k) Plan: The Executive shall be eligible to participate in the Northgate Telecommunications US, Inc. 401(k) Savings and Retirement Plan (or any successor thereto), subject to the terms and conditions of such plan as in effect from time to time. The Employer shall provide an employer matching contribution equal to six percent (6%) of the Executive's eligible compensation contributed to the plan, subject to applicable annual limits under Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as amended (the "Code"). Based on the Executive's Base Salary of $1,750,000, the estimated annual employer matching contribution is approximately $105,000 (subject to IRS limits and plan terms, which may affect the actual amount).
Supplemental Executive Retirement Plan: In addition to the 401(k) Plan, the Employer shall make an annual contribution of Two Hundred Fifty Thousand Dollars ($250,000) to a supplemental executive retirement plan ("SERP") maintained for the benefit of the Executive. The SERP contribution shall be made within thirty (30) days following the end of each calendar year during which the Executive is employed. The specific terms, investment options, and distribution provisions of the SERP shall be set forth in a separate SERP agreement to be executed in connection with the definitive Agreement.
8(b). Health and Insurance Benefits
Health and Welfare Plans: The Executive shall be entitled to participate in all health, dental, vision, disability, and other welfare benefit plans and programs made available by the Employer to its senior executive officers, subject to the terms and conditions of such plans as in effect from time to time. The Employer shall pay the premiums for the Executive's participation (and the participation of the Executive's eligible dependents) in such plans to the same extent as it pays premiums for other senior executive officers.
Supplemental Life Insurance: The Employer shall obtain and maintain, at its sole expense, a supplemental term life insurance policy on the life of the Executive with a death benefit of Two Million Dollars ($2,000,000), with the beneficiary or beneficiaries to be designated by the Executive.
Directors and Officers Insurance: The Executive shall be covered under the Company's directors and officers liability insurance policy currently maintained with Ashdown Surety & Insurance Co. (Policy No. ASI-D&O-NTP-2024-4471), which provides coverage of Fifty Million Dollars ($50,000,000) per occurrence and One Hundred Million Dollars ($100,000,000) in the aggregate, or under any successor or replacement policy providing coverage that is no less favorable in scope and amount.
8(c). Perquisites. Car Allowance: The Executive shall receive a car allowance of Thirty Thousand Dollars ($30,000) per year, payable in equal monthly installments. [CONCESSION: The Employer has increased this amount from $25,000 per year as set forth in v1 to $30,000 per year, accepting the revision proposed by H&L in the v2 markup.]
Executive Health Screening: The Executive shall be entitled to participate in the Employer's executive health screening program, which provides for comprehensive annual physical examinations and related health assessments at a facility selected by the Executive and approved by the Employer.
Financial and Tax Planning Reimbursement: The Employer shall reimburse the Executive for reasonable and documented expenses incurred in connection with personal financial planning, estate planning, and tax preparation and advisory services, up to a maximum of Fifty Thousand Dollars ($50,000) per calendar year. [CONCESSION: The Employer has increased this amount from $35,000 per year as set forth in v1 to $50,000 per year, accepting the revision proposed by H&L in the v2 markup.] All such reimbursements shall be made within sixty (60) days following the Executive's submission of appropriate documentation and shall be subject to applicable tax withholdings.
Tax Equalization: The Employer shall provide tax equalization for UK-source income earned by the Executive in connection with his UK board duties and other UK-source activities. The details of the tax equalization arrangements, including the methodology for calculating the equalization payment, the timing of true-up payments, and the engagement of tax advisors, shall be addressed in the UK Service Agreement and coordinated between Moorfield Bates LLP and Calderwood & Harkness LLP.
8(d). Indemnification and D&O Coverage
Indemnification: The Employer shall provide the Executive with full indemnification and advancement of legal fees and expenses to the maximum extent permitted by applicable law, including the General Corporation Law of the State of Delaware and the Companies Act 2006 (as applicable to NTP PLC). The Company shall enter into a separate indemnification agreement with the Executive, in form and substance satisfactory to the Executive and his counsel, providing for such indemnification and advancement rights, which agreement shall survive the termination of the Executive's employment for any reason.
Tail Coverage: The Employer shall maintain directors and officers liability insurance coverage for the Executive throughout his employment and for a period of not less than six (6) years following the termination of his employment (for any reason), with coverage limits and terms no less favorable than those in effect immediately prior to the date of termination. In the event the Company's existing D&O insurance policy does not provide for such tail coverage, the Employer shall purchase a "run-off" or "tail" policy providing equivalent coverage for the six (6)-year post-employment period.
8(e). Vacation and Paid Time Off
The Executive shall be entitled to not less than thirty (30) days of paid vacation per calendar year, consistent with the Company's policy for senior executives. Unused vacation days may be carried forward or paid out in accordance with Company policy. In addition, the Executive shall be entitled to all paid holidays observed by the Employer and to paid sick leave and other leave benefits in accordance with applicable law and Company policy.
Note on Section 8 Concessions: The Employer has made two concessions in this Section 8 from its position in v1, both in response to revisions proposed by H&L in the v2 markup: (i) the car allowance has been increased from $25,000 to $30,000 per year, and (ii) the financial and tax planning reimbursement cap has been increased from $35,000 to $50,000 per year. These are non-material concessions, representing an aggregate incremental cost to the Employer of approximately $20,000 per year, and are intended to demonstrate good faith in the ongoing negotiations. All other benefits and perquisites remain as set forth in v1.
9. Termination Provisions — Without Cause / Good Reason (Non-Change in Control)
The following provisions shall apply in the event the Executive's employment is terminated by the Employer without Cause (as defined in Section 12(a) below) or by the Executive for Good Reason (as defined in Section 12(b) below), in each case other than during the twenty-four (24)-month period following a Change in Control (which is addressed separately in Section 10 below).
9(a). Severance Payment
Employer's Position (unchanged from v1): The Executive shall receive a cash severance payment equal to two times (2×) the sum of the Executive's Base Salary and Target Annual Bonus, calculated as follows:
2 × ($1,750,000 + $3,062,500) = 2 × $4,812,500 = $9,625,000
The severance payment shall be made in a single lump sum within sixty (60) days following the date of termination, subject to (i) the Executive's timely execution and non-revocation of a separation agreement and general release of claims in the form prescribed by the Employer (the "Release"), and (ii) the expiration of any applicable revocation period under the Age Discrimination in Employment Act or other applicable law. The severance payment shall be subject to applicable tax withholdings and deductions.
H&L's Position (v2 markup): H&L proposed a severance multiplier of two and one-half times (2.5×) the sum of Base Salary and Target Annual Bonus, yielding a severance payment of $12,031,250. The Employer declines this proposal. The Employer's position of 2× is consistent with market practice for chief executive officers of publicly listed companies in the telecommunications and technology sectors, as confirmed by the independent benchmarking analysis conducted by Whitmore Hobson LLP. The Whitmore Hobson analysis reviewed the severance arrangements of twenty-three (23) comparable public company CEOs and found that the median non-CIC severance multiplier was 2.0× and the 75th percentile was 2.25×. The Employer is not prepared to exceed 2× for non-CIC severance.
9(b). Pro-Rata Bonus
The Executive shall receive a pro-rata Annual Bonus for the fiscal year in which the termination occurs, calculated based on the Target Annual Bonus (or, if determinable, actual performance through the date of termination), prorated for the number of days the Executive was employed during such fiscal year. The pro-rata bonus shall be paid at the same time as Annual Bonuses are paid to other senior executives of the Company for such fiscal year, but in no event later than seventy-five (75) days following the end of such fiscal year.
9(c). Equity Acceleration
Employer's Position (unchanged from v1): Upon a qualifying termination without Cause or for Good Reason (outside the CIC context), the Executive shall receive twelve (12) months of accelerated vesting of all unvested time-based equity awards (RSUs), including both Sign-On RSU Grants and Annual LTI RSU Grants. With respect to performance-based equity awards (PSUs), unvested PSUs shall remain outstanding and eligible to vest on a pro-rata basis (based on the number of full months of employment during the applicable performance period divided by the total number of months in the performance period) at the end of the applicable performance period, based on actual performance results as certified by the Remuneration Committee.
H&L's Position (v2 markup): H&L proposed full acceleration of all unvested equity awards (both time-based and performance-based) upon a qualifying non-CIC termination. The Employer declines this proposal. Full equity acceleration upon a non-CIC termination is inconsistent with market practice, shareholder expectations, and the Remuneration Committee's governance guidelines. The Employer's position of twelve (12) months of accelerated vesting for RSUs and pro-rata vesting based on actual performance for PSUs provides meaningful protection to the Executive while preserving the performance-based and retention-oriented nature of the Company's equity compensation program.
9(d). Benefits Continuation
Employer's Position (unchanged from v1): The Employer shall provide the Executive with continued participation in the Employer's group health insurance plans (or, at the Employer's option, reimbursement of COBRA premiums) at active-employee rates for a period of eighteen (18) months following the date of termination. The cost differential between the COBRA premium and the active-employee rate shall be borne by the Employer.
H&L's Position (v2 markup): H&L proposed twenty-four (24) months of COBRA continuation. The Employer declines and maintains its position of eighteen (18) months. The Employer's position is consistent with the median non-CIC benefits continuation period observed in the Whitmore Hobson benchmarking analysis.
9(e). Outplacement. The Employer shall provide the Executive with outplacement services from a nationally recognized executive outplacement firm selected by the Executive and reasonably approved by the Employer, at the Employer's expense, for a period of up to twelve (12) months following the date of termination, subject to a maximum aggregate cost to the Employer of Fifty Thousand Dollars ($50,000).
9(f). Conditions. All severance payments and benefits described in this Section 9 shall be conditioned upon: (i) the Executive's timely execution, delivery, and non-revocation of a separation agreement containing a mutual general release of claims, in form and substance reasonably satisfactory to both parties, within the time period specified therein (which shall not exceed sixty (60) days from the date of termination); (ii) the Executive's affirmation of his obligations under the restrictive covenant provisions set forth in Section 11 below; and (iii) the Executive's compliance with Section 409A of the Code. In the event the Executive breaches any material provision of the Release or the restrictive covenants following the commencement of severance payments, the Employer shall be entitled to cease all further severance payments and benefits and to recover, to the extent permitted by applicable law, any severance payments and benefits previously provided.
10. Change in Control Provisions
10(a). Definition of "Change in Control"
Employer's Position: For purposes of this Agreement, a "Change in Control" shall mean the occurrence of any of the following events:
(i) Acquisition of Voting Securities. The acquisition, directly or indirectly, by any "person" or "group" (as those terms are used in Section 13(d) and Section 14(d)(2) of the Securities Exchange Act of 1934, as amended) of beneficial ownership of more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities of NTP PLC entitled to vote generally in the election of directors;
(ii) Merger or Consolidation. The consummation of a merger, consolidation, statutory share exchange, or similar business combination transaction involving NTP PLC, unless immediately following such transaction the shareholders of NTP PLC immediately prior to such transaction hold, directly or indirectly, at least fifty percent (50%) of the combined voting power of the outstanding voting securities of the surviving or resulting entity (or its ultimate parent entity) entitled to vote generally in the election of directors; or
(iii) Asset Sale. The sale, transfer, or other disposition of all or substantially all of the assets of NTP PLC and its subsidiaries, taken as a whole, to any person or entity that is not a direct or indirect wholly-owned subsidiary of NTP PLC.
H&L's Position (v2 markup) — REJECTED: H&L proposed the addition of a fourth trigger:
(iv) Board Turnover Trigger (PROPOSED BY H&L — REJECTED). A change in the composition of the Board of Directors of NTP PLC such that, within any twelve (12)-month period, a majority of the directors serving on the Board are replaced by individuals whose appointment or nomination was not endorsed by a majority of the directors serving on the Board immediately prior to the commencement of such twelve (12)-month period.
The Employer rejects the proposed Board turnover trigger. The Board of Directors of NTP PLC, acting through the Remuneration Committee (Geoffrey Stanton, Chair), has considered the proposed Board turnover trigger and directed that this provision is not acceptable. The Board views the Board turnover trigger as inconsistent with the norms of the UK Corporate Governance Code and the established governance practices of NTP PLC. The inclusion of such a trigger could create perverse incentives, inhibit legitimate Board refreshment efforts, and potentially accelerate significant severance and equity acceleration obligations in circumstances that do not involve a genuine change in ownership or control of the Company. Furthermore, the Employer notes that Board turnover triggers are uncommon among FTSE 250 companies and are increasingly disfavored by institutional investors and proxy advisory firms.
10(b). CIC Severance — Double Trigger
Both parties have agreed in principle that Change in Control severance shall be structured as a "double trigger" — i.e., requiring the occurrence of both (1) a Change in Control event (as defined in Section 10(a)) and (2) a termination of the Executive's employment without Cause or a resignation by the Executive for Good Reason, in each case within twenty-four (24) months following the date of the Change in Control. For the avoidance of doubt, a Change in Control alone, without a qualifying termination, shall not entitle the Executive to any Change in Control severance payments or benefits.
10(c). CIC Severance Amount
Employer's Position (unchanged from v1): In the event of a qualifying CIC termination (as described in Section 10(b) above), the Executive shall receive a cash severance payment equal to two and one-half times (2.5×) the sum of the Executive's Base Salary and Target Annual Bonus, calculated as follows:
2.5 × ($1,750,000 + $3,062,500) = 2.5 × $4,812,500 = $12,031,250
The CIC severance payment shall be made in a single lump sum within sixty (60) days following the date of termination, subject to the Executive's timely execution and non-revocation of the Release and compliance with Section 409A.
H&L's Position (v2 markup): H&L proposed a CIC severance multiplier of three times (3×) the sum of Base Salary and Target Annual Bonus, yielding a CIC severance payment of $14,437,500. The Employer declines this proposal. The gap between the parties' positions is $2,406,250. The Employer's position of 2.5× is informed by the following considerations:
(a) ISS Proxy Advisory Guidelines. Thackeray Health IT ("ISS") generally identifies CIC severance packages that exceed three times (3×) the sum of base salary and target bonus as a potential concern in its evaluation of executive compensation. While the Employer's proposed 2.5× multiplier falls below this threshold, the addition of equity acceleration and other CIC benefits could approach the ISS threshold if the multiplier were increased to 3×.
(b) Veltrano Proxy Advisors Analysis. The Company has engaged Veltrano Proxy Advisors to model the potential impact of the CEO compensation package on the Company's upcoming binding remuneration policy vote at the 2025 Annual General Meeting. Veltrano has advised that a 3× CIC multiplier, combined with the tax gross-up requested by H&L (see Section 10(g) below), would likely trigger a negative recommendation from both ISS and Tarrant Partners LLC on the CEO compensation package. NTP received 87.4% say-on-pay support at its April 18, 2024 Annual General Meeting, and the Employer is committed to maintaining strong shareholder support.
(c) Market Benchmarking. The Whitmore Hobson benchmarking analysis found that the median CIC severance multiplier among comparable public company CEOs was 2.5× and the 75th percentile was 2.99×. The Employer's position of 2.5× is at market median.
The Employer is not prepared to exceed 2.5× for CIC severance.
10(d). CIC Equity Acceleration
Time-Based Awards (RSUs): Upon a qualifying CIC termination, all unvested time-based equity awards (RSUs) held by the Executive, including Sign-On RSU Grants and Annual LTI RSU Grants, shall vest in full on an accelerated basis as of the date of the qualifying CIC termination.
Performance-Based Awards (PSUs): Upon a qualifying CIC termination, unvested performance-based equity awards (PSUs) shall vest on a pro-rata basis, based on actual performance through the date of the Change in Control event (or, if actual performance cannot reasonably be measured as of such date, at the target level of performance). The pro-ration shall be calculated based on the number of full months of the applicable performance period that have elapsed through the date of the Change in Control event, divided by the total number of months in such performance period.
H&L's Position (v2 markup): H&L proposed that PSUs vest at target (not pro-rata) upon a qualifying CIC termination. The Employer maintains its position of pro-rata vesting based on actual performance. The Employer's position reflects the principle that performance-based awards should, to the greatest extent practicable, reflect actual performance outcomes rather than assumed target achievement. Pro-rata vesting at actual performance is consistent with the Remuneration Committee's governance guidelines and emerging best practices among FTSE 250 companies.
10(e). CIC Benefits Continuation
Employer's Position (unchanged from v1): The Employer shall provide the Executive with continued participation in the Employer's group health insurance plans (or, at the Employer's option, reimbursement of COBRA premiums) at active-employee rates for a period of twenty-four (24) months following the date of a qualifying CIC termination.
H&L's Position (v2 markup): H&L proposed thirty-six (36) months of COBRA continuation following a qualifying CIC termination. The Employer declines and maintains its position of twenty-four (24) months. The Employer's position of twenty-four (24) months matches the CIC measurement period (i.e., the twenty-four (24)-month window following the Change in Control during which a qualifying termination must occur to trigger CIC severance) and is consistent with market practice.
10(f). CIC Outplacement
The Employer shall provide the Executive with outplacement services from a nationally recognized executive outplacement firm, at the Employer's expense, subject to a maximum aggregate cost to the Employer of Fifty Thousand Dollars ($50,000), on the same terms as set forth in Section 9(e) above.
10(g). Section 280G Tax Treatment
Employer's Position (unchanged from v1): The Agreement shall include a "best-net" safe harbor cutback provision under Section 280G of the Code. No tax gross-up shall be provided. Specifically:
In the event that any payments or benefits provided to the Executive under this Agreement or any other plan, program, or arrangement of the Company or its affiliates (the "Total Payments") would constitute "excess parachute payments" within the meaning of Section 280G of the Code and would therefore be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), the Total Payments shall be reduced to the "safe harbor" amount (i.e., three times (3×) the Executive's "base amount" as defined in Section 280G(b)(3) of the Code, minus one dollar ($1)) if, and only if, such reduction would result in a greater after-tax benefit to the Executive than receiving the full Total Payments and bearing the Excise Tax.
Based on preliminary analysis by the Employer's tax advisors at Whitmore Hobson LLP, the Executive's estimated "base amount" for purposes of Section 280G is approximately $7,840,000, yielding a safe harbor amount of approximately $23,519,999 (3 × $7,840,000 − $1). Under the Employer's proposed 2.5× CIC severance arrangement, the Total Payments (including CIC severance, equity acceleration, and other benefits) are estimated to approach or slightly exceed the safe harbor amount, depending on the value of equity acceleration at the time of the Change in Control. In such circumstances, the "best-net" cutback would be expected to be slightly more favorable to the Executive than the receipt of full Total Payments net of the 20% Excise Tax — making the gross-up request largely a matter of principle rather than economic substance.
H&L's Position (v2 markup): H&L proposed a full Section 280G tax gross-up, under which the Employer would make an additional payment to the Executive sufficient to cover the Excise Tax and all income, employment, and excise taxes on such additional payment, thereby placing the Executive in the same after-tax position as if no Excise Tax had been imposed. The Employer rejects this proposal. The Employer's reasons are as follows:
(a) Estimated Gross-Up Cost. Based on preliminary modeling by Whitmore Hobson LLP, the estimated cost of a full Section 280G tax gross-up under the proposed compensation structure would range from approximately $4,200,000 to $6,800,000, depending on the final calculation of the Executive's Total Payments at the time of a Change in Control.
(b) ISS Policy. ISS identifies excise tax gross-ups as a "problematic" pay practice in its evaluation of executive compensation. The presence of a tax gross-up is one of several factors that can trigger a negative ISS recommendation on a company's say-on-pay proposal.
(c) Proxy Advisory Impact. Veltrano Proxy Advisors has advised the Company that the inclusion of a full Section 280G tax gross-up in the CEO compensation package, particularly when combined with the compensation levels proposed herein, would likely result in a negative recommendation from ISS and Tarrant Partners LLC on the CEO compensation package. Given that NTP's remuneration policy will be subject to a binding shareholder vote at the 2025 AGM (in accordance with UK regulatory requirements), a negative proxy advisory recommendation could jeopardize the Company's ability to implement the agreed-upon compensation arrangements.
(d) Market Trend. Tax gross-ups have been eliminated by the vast majority of large-cap public companies in both the US and UK. Among the twenty-three (23) comparable companies reviewed in the Whitmore Hobson benchmarking analysis, only two (2) retained a Section 280G tax gross-up as of the date of the analysis.
The Employer is not prepared to include a tax gross-up under any circumstances.
10(h). Section 409A Compliance
All Change in Control payments and benefits shall be structured and administered in compliance with Section 409A of the Code. To the extent required by Section 409A, if the Executive is a "specified employee" (as defined in Section 409A(a)(2)(B)(i) of the Code) on the date of his separation from service, any payments that constitute nonqualified deferred compensation subject to Section 409A shall be delayed for a period of six (6) months following the Executive's separation from service (or, if earlier, the Executive's death), with the accumulated payments made in a lump sum on the first business day following the expiration of such six-month period. The Agreement shall be interpreted and administered in a manner consistent with Section 409A, and the parties shall cooperate in good faith to modify the Agreement to the extent necessary to achieve compliance.
11. Restrictive Covenants
11(a). Non-Competition. Employer's Revised Position [REVISED FROM v1]: During the Executive's employment and for a period of eighteen (18) months following the termination of the Executive's employment for any reason (the "Non-Compete Period"), the Executive shall not, directly or indirectly, engage in, be employed by, consult for, render services to, or hold a material ownership interest (other than a passive investment of less than two percent (2%) of the outstanding shares of a publicly traded company) in any Competing Enterprise.
Duration: The Employer has reduced the Non-Compete Period from twenty-four (24) months (as set forth in v1) to eighteen (18) months. This reduction represents a meaningful concession by the Employer. The Employer maintains that eighteen (18) months is a reasonable and appropriate duration for a CEO-level non-compete, given the scope of the Executive's access to the Company's most sensitive strategic, financial, customer, and competitive information.
Geographic Scope (unchanged from v1): The non-competition restriction shall apply worldwide. The Employer maintains a worldwide scope because NTP operates in over forty (40) countries across six (6) continents, and the Executive, as CEO, will have direct responsibility for and access to confidential information relating to the Company's global operations, strategy, customer relationships, and competitive positioning. A geographically limited non-compete would be inadequate to protect the Company's legitimate business interests.
Activity Restriction — Definition of "Competing Enterprise": For purposes of this Section 11(a), a "Competing Enterprise" means any company, business, or enterprise that derives more than fifteen percent (15%) of its annual revenue from telecommunications services, telecommunications infrastructure, or enterprise software-as-a-service ("SaaS") platforms serving telecommunications operators. This revenue-based test provides an objective, measurable standard that captures the Company's direct and indirect competitors without being unduly broad.
Note on Concessions and Rejections:
The Employer has reduced the non-compete duration from twenty-four (24) months to eighteen (18) months as a concession to address H&L's concerns about the duration of the restriction. This concession is made while maintaining the worldwide geographic scope and the revenue-based activity test. The Employer does not accept H&L's proposed twelve (12)-month duration, and the following additional elements of H&L's v2 markup are also declined:
• H&L's Proposed Duration (12 months): The Employer considers twelve (12) months to be insufficient for a CEO-level non-compete at a global telecommunications company. The Executive will have access to multi-year strategic plans, M&A pipeline information, and long-cycle customer relationships that would remain competitively sensitive well beyond a twelve (12)-month period.
• H&L's Proposed Geographic Limitation (North America and Western Europe): The Employer declines to limit the non-compete to North America and Western Europe. NTP derives approximately thirty-five percent (35%) of its revenue from Asia-Pacific, Middle East, and African markets, and the Executive will have strategic responsibility for and access to confidential information relating to these markets. A geographically limited restriction would leave the Company without protection in regions representing a significant and growing portion of its business.
• H&L's Proposed Scheduled-Competitor Approach: H&L proposed defining the competitive restriction by reference to a schedule of eight (8) named direct competitors, rather than the Employer's revenue-based test. The Employer declines this approach. A scheduled-competitor approach is inherently under-inclusive, as it fails to account for new market entrants, industry consolidation, diversified conglomerates with significant telecom/SaaS divisions, and other competitive threats that may emerge during the Non-Compete Period. The revenue-based test provides more comprehensive protection appropriate for a CEO of a global telecom/SaaS company with broad strategic visibility.
Enforceability Note: Calderwood & Harkness LLP has advised the Employer that a worldwide non-compete with an eighteen (18)-month duration will be analyzed for enforceability under New York law reasonableness standards, which assess whether the restriction is (i) necessary to protect legitimate business interests, (ii) not unduly burdensome to the employee, and (iii) not harmful to the public. The Employer considers the proposed restriction — eighteen (18) months in duration, worldwide in scope, and limited to enterprises deriving more than fifteen percent (15%) of revenue from specified sectors — to be reasonable and enforceable under New York law, particularly given the Executive's role as the Company's chief executive, his access to the Company's most sensitive confidential information, and the payment of substantial garden leave compensation during the first six (6) months of the Non-Compete Period (as set forth in Section 11(b) below).
11(b). Garden Leave
Employer's Position (unchanged from v1): The Executive shall be subject to a paid garden leave period of six (6) months immediately following the termination of his employment (the "Garden Leave Period"). During the Garden Leave Period, the Executive shall continue to receive his Base Salary (at the rate in effect immediately prior to termination), payable in accordance with the Employer's standard payroll practices, but shall not be required to perform any duties and shall not be permitted to commence employment or provide services to any third party. The total garden leave compensation shall be:
$1,750,000 ÷ 12 × 6 = $875,000
The Garden Leave Period shall run concurrently with the first six (6) months of the Non-Compete Period. Accordingly, the effective post-garden-leave non-compete period (during which the Executive is subject to the non-competition restriction but is not receiving garden leave compensation) shall be twelve (12) months.
H&L's Position (v2 markup): H&L proposed twelve (12) months of garden leave at full compensation (Base Salary plus pro-rata Target Annual Bonus), with the garden leave and non-compete periods running entirely concurrently, which would effectively reduce the post-employment non-compete restriction to zero (0) additional months beyond the garden leave period. The Employer declines this proposal. A twelve (12)-month garden leave period at full compensation would impose a significant cost on the Company (approximately $4,812,500) and would, when combined with a concurrent non-compete, eliminate any meaningful post-employment competitive restriction. The Employer's position of six (6) months of garden leave at base salary only, running concurrently with the first six (6) months of the non-compete, provides reasonable support to the Executive during the initial transition period while preserving twelve (12) months of substantive post-garden-leave competitive restriction.
11(c). Non-Solicitation. Employer's Position (unchanged from v1): During the Executive's employment and for a period of twenty-four (24) months following the termination of the Executive's employment for any reason (the "Non-Solicitation Period"), the Executive shall not, directly or indirectly:
(i) solicit, recruit, hire, or attempt to solicit, recruit, or hire any employee of the Company or its subsidiaries, or encourage or induce any such employee to leave the employ of the Company or its subsidiaries; or
(ii) solicit, contact, or interfere with, or attempt to solicit, contact, or interfere with, the business relationship between the Company (or any of its subsidiaries) and any customer, client, vendor, or business partner of the Company (or any of its subsidiaries) with whom the Executive had material contact or about whom the Executive received material confidential information during the last twenty-four (24) months of his employment, for the purpose of diverting or taking away such person's business from the Company.
H&L's Position (v2 markup): H&L proposed (a) reducing the Non-Solicitation Period to eighteen (18) months and (b) eliminating the customer non-solicitation provision (clause (ii) above), limiting the restriction to employee non-solicitation only. The Employer declines both proposed modifications. The Employer maintains its position of twenty-four (24) months and both employee and customer non-solicitation. The CEO of a global telecommunications company has unparalleled access to the Company's most important customer relationships and its most senior talent. A comprehensive non-solicitation covenant covering both employees and customers, for a period of twenty-four (24) months, is essential to protect the Company's legitimate business interests and is consistent with market practice for CEO-level employment agreements.
11(d). Non-Disparagement. The Agreement shall contain a mutual, perpetual non-disparagement covenant, under which each party agrees not to make, publish, or communicate any statement that is disparaging, defamatory, or damaging to the other party, its affiliates, or their respective officers, directors, employees, products, or services.
Carve-Outs: The non-disparagement covenant shall not restrict either party from (i) making truthful statements in the context of any legal, administrative, or regulatory proceeding; (ii) making truthful statements in any filing with any governmental or regulatory authority; (iii) responding to any subpoena, court order, or governmental inquiry; or (iv) making truthful statements in the context of any investigation by the Company's Board, audit committee, or compliance function.
Note: This provision is agreed in principle per the H&L markup in v2. No material change from v1.
11(e). Confidentiality. The Executive shall have a perpetual obligation not to disclose, use, or make available to any third party any Confidential Information (as defined in the definitive Agreement) of the Company or its affiliates, except as required in the performance of his duties or as otherwise authorized by the Board. "Confidential Information" shall be broadly defined to include, without limitation, trade secrets, proprietary technology, business strategies, financial information and projections, customer and supplier information, pricing and contract terms, personnel information, M&A pipeline and transaction information, and any other non-public information of the Company that derives economic value from not being generally known.
Standard Carve-Outs: The confidentiality obligation shall not apply to information that (i) is or becomes part of the public domain through no fault of the Executive; (ii) is lawfully received by the Executive from a third party without restriction on disclosure and without breach of any obligation of confidentiality; or (iii) is required to be disclosed by applicable law, regulation, or valid court order, provided that the Executive gives the Company prompt written notice of such requirement (to the extent legally permitted) and cooperates with the Company in seeking a protective order or other appropriate remedy.
Note: This provision is substantially agreed per the v1/v2 negotiations. No material change.
12. Definitions — Good Reason and Cause
12(a). Termination for "Cause"
For purposes of this Agreement, "Cause" shall mean the occurrence of any of the following:
(i) The Executive's willful and material breach of any material provision of this Agreement, the UK Service Agreement, or any other written agreement between the Executive and the Company or its affiliates, which breach remains uncured for a period of thirty (30) days following the Executive's receipt of written notice from the Board specifying the nature of such breach in reasonable detail;
(ii) The Executive's conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving fraud, dishonesty, or moral turpitude under the laws of any jurisdiction;
(iii) The Executive's commission of an act of fraud, embezzlement, misappropriation, or material dishonesty against or in connection with the Company or its affiliates;
(iv) The Executive's willful failure to perform his material duties hereunder (other than any such failure resulting from the Executive's physical or mental disability), which failure remains uncured for a period of thirty (30) days following the Executive's receipt of written notice from the Board specifying the nature of such failure in reasonable detail; or
(v) The Executive's material violation of any written Company policy or code of conduct, to the extent such violation causes demonstrable and material harm to the Company's business, operations, financial condition, or reputation.
For purposes of this definition, no act or failure to act by the Executive shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interest of the Company.
Note: The definition of "Cause" is substantially agreed based on v1/v2 negotiations. In response to H&L's request in the v2 markup, the Employer has accepted a thirty (30)-day cure period for items (i) and (iv). Items (ii), (iii), and (v) are not subject to a cure period, as the nature of the conduct described in those provisions do

REVISED TERM SHEET — CEO EMPLOYMENT AGREEMENT (v3)

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