Contract analysis

I. Purpose and Scope of This Memorandum This memorandum is prepared in connection with the independent workplace investigation being conducted by Calderwood & Harkness LLP ("C&H" or the "Firm") at the direction of the Board of Directors of Aurelius Global Media Group PLC ("AGMG" or the "Company"). The investigation was formally opened on May 2, 2023, following authorization by the People & Culture Committee and the A

II. Executive Summary of Identified Deficiencies The investigation has revealed six principal categories of deficiency in the policy frameworks, complaint-handling procedures, and documentation practices applicable to APS and, where relevant, to AGMG at the parent level. These deficiencies are systemic in nature and extend beyond the specific facts of the Hale investigation, although they were brought into sharp focu

1. Failure to Document Disciplinary Actions in Personnel Files. The August 2, 2021 verbal counseling of Hale following the Serena Whitcomb informal complaint was neither reduced to writing nor placed in Hale's personnel file, resulting in a complete absence of institutional memory regarding a prior complaint of inappropriate conduct by the same individual.

2. Gaps in the Anti-Harassment Policy (Section 5.3, APS Handbook). Section 5.3 does not contain heightened standards or separate procedures for complaints against senior executives. It lacks sufficiently specific examples of prohibited conduct and does not explicitly address conduct occurring at off-site events or during business travel.

3. Gaps in the Anti-Retaliation Policy (Section 5.7, APS Handbook). Section 5.7 defines retaliation narrowly, failing to encompass subtle forms of adverse action such as reassignment of high-profile projects and exclusion from meetings. It does not explicitly extend protection to bystander reporters who raise concerns on behalf of others.

4. Deficiencies in Complaint & Investigation Procedures (Section 8.1, APS Handbook). Section 8.1 lacks mandatory escalation protocols for complaints involving senior leadership, does not establish investigation timelines, does not require independence of the investigator, and does not mandate interim protective measures or regular communication with complainants.

5. Deficiencies in the Ethics & Compliance Hotline Escalation Workflow. The hotline operated by Meridian Compliance Solutions LLC routes all APS complaints to the local VP of Human Resources regardless of the seniority of the subject. No automatic notification to AGMG-level stakeholders or Board committees is triggered by complaints involving senior executives.

6. Inadequate Alignment Between Policy Frameworks. The AGMG Global Code of Conduct, the APS Employee Handbook, and the AGMG Board Corporate Governance Guidelines are not adequately harmonized with respect to executive-level misconduct. There is no integrated escalation chain from subsidiary-level complaint intake through to Board-level oversight, and the three documents do not cross-reference one another. Each of the

III.A. Documents and Records Reviewed In preparing this memorandum, we reviewed the following documents and records: • The APS Employee Handbook, California Supplement, revised March 15, 2022, including all sections relevant to complaint-handling, anti-harassment, anti-retaliation, and investigation procedures; • The AGMG Global Code of Conduct, Version 4.2, effective January 1, 2022; • The AGMG Board Corporate Gover

III.B. Legal and Best-Practice Framework We have assessed the adequacy of the policies and practices described herein against the following legal requirements and best-practice standards: California FEHA Requirements. The principal statutory provisions relevant to this analysis are: • Cal. Gov. Code § 12940(j), which establishes employer liability for harassment by supervisors and imposes a duty on employers to maint

III.C. Interviews Informing This Analysis The policy-gap analysis set forth in this memorandum has been informed by the following witness interviews, among others: • Victor Gallegos (interviewed June 1, 2023): Mr. Gallegos is the Vice President of Human Resources at APS, based in Burbank. His interview provided detailed information about APS's internal complaint-handling processes, the circumstances surrounding the 2

IV.A. Deficiency 1: Failure to Document Disciplinary Actions — The Serena Whitcomb / Hale Matter (July–August 2021)

IV.A.1. Factual Background In July 2021, Serena Whitcomb, who served as Executive Assistant to Marcus Hale from approximately April 2019 through September 2021, made an informal complaint to Victor Gallegos, Vice President of Human Resources at APS. The complaint alleged that Hale had made inappropriate comments to Whitcomb. The precise nature of those comments is addressed in greater detail in the Draft Privileged I

IV.A.2. Policy Requirements We have examined each of the three applicable policy frameworks to determine what documentation obligations, if any, they impose with respect to verbal counselings and informal complaint resolutions. APS Employee Handbook (CA Supplement), Section 8.1 (Complaint & Investigation Procedures). Section 8.1 provides that "all complaints will be documented and maintained in accordance with the Co

IV.A.3. Legal Standards Under Cal. Gov. Code § 12940(k), employers have an affirmative duty to take "all reasonable steps necessary to prevent discrimination and harassment from occurring." California courts and the Civil Rights Department have consistently recognized that contemporaneous documentation of complaints and corrective measures is a critical element of demonstrating compliance with this duty. An employer'

IV.A.4. Gap Identified The gap identified in this area is threefold: (a) None of the three policy frameworks — the APS Handbook, the AGMG Global Code of Conduct, or the Board Corporate Governance Guidelines — requires written memorialization of verbal counselings or informal complaint resolutions. The obligation to "document" complaints, as stated in Section 8.1 of the APS Handbook, does not extend with sufficient cl

IV.A.5. Recommendation (Summary) Detailed corrective action recommendations are set forth in the separate Remedial Recommendations Memorandum dated August 19, 2023. In summary, we recommend the following: • Amend all three policy frameworks to require written documentation of all disciplinary actions, including verbal counselings and informal corrective measures, regardless of the level of the employee involved. • Ma

IV.B. Deficiency 2: Gaps in Anti-Harassment Policy (Section 5.3, APS Employee Handbook, CA Supplement)

IV.B.1. Scope of Coverage for Senior Executives

Section 5.3 of the APS Handbook applies, by its terms, to "all employees" of APS. It does not distinguish between employees at different levels of the organizational hierarchy and does not contain heightened standards, additional procedural requirements, or separate complaint-handling pathways for complaints against members of senior leadership — defined for purposes of this analysis as officers at the Vice President

IV.B.2. Specificity of Prohibited Conduct

Section 5.3 defines prohibited harassment in general terms, using language that substantially tracks the statutory definitions found in FEHA and Title VII. While this language is legally adequate at a high level, it does not provide sufficiently specific examples of conduct that constitutes sexual harassment in the workplace. In our experience, policies that include concrete, illustrative examples are more effective

IV.B.3. Application to Off-Site Events and Business Travel Related to the issue of specificity, Section 5.3 does not explicitly address the application of the anti-harassment policy to conduct occurring at company-sponsored off-site events and during business travel. The allegations in the current investigation include conduct that allegedly occurred at the following locations and events, among others: • The APS lead

IV.B.4. Legal Benchmark FEHA and California regulatory guidance require that anti-harassment policies be sufficiently comprehensive to inform employees of prohibited conduct and employer expectations. Cal. Gov. Code § 12950.1 requires that employers provide anti-harassment training to supervisory employees that addresses practical examples of harassment; parallel specificity in the Company's written policies ensures

IV.B.5. Gap Identified and Recommendation Summary The gaps identified in Section 5.3 fall into three categories: (i) The policy does not contain heightened procedures for complaints against senior executives, including mandatory escalation to AGMG-level stakeholders and Board committees, or requirements for independent outside investigation; (ii) The policy does not provide sufficiently detailed examples of prohibite

IV.C. Deficiency 3: Gaps in Anti-Retaliation Policy (Section 5.7, APS Employee Handbook, CA Supplement)

IV.C.1. Definition and Examples of Retaliatory Actions

Section 5.7 of the APS Handbook prohibits "retaliation against any employee who reports a violation of company policy or participates in an investigation." This general prohibition is appropriate and consistent with FEHA requirements. However, the policy defines retaliation in terms that are unduly narrow, limiting the concept to "termination, demotion, reduction in pay." While these are certainly among the most seri

IV.C.2. Protection for Bystander Reporters James Whitfield's situation also highlights a second gap in Section 5.7. Whitfield was not a direct victim of sexual harassment. Rather, he raised concerns about Hale's treatment of female employees at a leadership meeting — functioning, in effect, as a bystander reporter who brought potential misconduct to the Company's attention on behalf of others.

Section 5.7 protects employees who "report a violation of company policy or participate in an investigation." While this language could be interpreted broadly enough to encompass bystander reporters, it does not explicitly do so. Employees who consider raising concerns on behalf of colleagues may be uncertain whether the Company's anti-retaliation protections extend to them, and this uncertainty may deter them from c

IV.C.3. Gap Identified and Recommendation Summary The gaps identified in Section 5.7 are: (i) The definition of retaliation is impermissibly narrow, limited to termination, demotion, and reduction in pay, and does not encompass the full range of adverse actions — including project reassignment, exclusion from meetings, and changes in responsibilities — that may constitute retaliation under FEHA and best-practice stan

IV.D. Deficiency 4: Complaint & Investigation Procedures (Section 8.1, APS Employee Handbook, CA Supplement)

IV.D.1. Escalation Protocols for Complaints Against Senior Leadership

Section 8.1 of the APS Handbook designates the Vice President of Human Resources — currently Victor Gallegos — as the primary intake officer for all employee complaints at APS. The section provides that employees may submit complaints to their direct supervisor, to the VP of Human Resources, or through the Ethics & Compliance Hotline. It does not establish any differentiated procedure based on the seniority or organi

IV.D.2. Timeline and Investigation Standards

Section 8.1 states that the Company will "promptly investigate" all complaints. This commitment to prompt investigation is appropriate but lacks the specificity necessary to ensure consistent, adequate performance. The policy does not establish: • A specific timeline for commencing an investigation following receipt of a complaint (e.g., within five business days); • Target milestones for the completion of key invest

Section 8.1 also does not require that the subject of a complaint be placed on leave or have access to company systems restricted during the pendency of an investigation. In the current matter, Hale was placed on paid administrative leave on May 3, 2023, and his access to company email, Meridian Solutions, and internal systems was suspended at that time. This action was taken on the recommendation of counsel and with

IV.D.3. Independence of the Investigator

Section 8.1 does not address potential conflicts of interest in investigations. This is a significant omission. The inherent conflict when the VP of Human Resources — who reports within the same organizational structure as the subject — is tasked with investigating the division's President is self-evident. In the Whitcomb matter, Gallegos was placed in the position of investigating (or, as it turned out, not investig

IV.D.4. Communication with Complainants

Section 8.1 does not mandate regular status updates to complainants during the pendency of investigations. The importance of proactive communication with complainants is well recognized in employment law and compliance practice. Complainants who are not informed about the progress and expected timeline of an investigation may experience anxiety, frustration, and a loss of confidence in the employer's commitment to ad

IV.D.5. Gap Identified and Recommendation Summary The gaps identified in Section 8.1 are as follows: (i) There is no mandatory escalation protocol for complaints against officers at the SVP level or above. Escalation decisions are left entirely to the judgment of the VP of Human Resources. (ii) There is no requirement that investigations involving senior executives be conducted by independent outside counsel or by an

IV.E. Deficiency 5: Ethics & Compliance Hotline Escalation Workflow (Meridian Compliance Solutions LLC)

IV.E.1. Current Workflow AGMG's Ethics & Compliance Hotline is operated by Meridian Compliance Solutions LLC ("Meridian"), a third-party compliance services vendor located at 233 South Wacker Drive, Suite 4100, Chicago, Illinois 60606. The hotline vendor relationship is managed by Ingrid Holt, Chief Compliance Officer of AGMG. The hotline is available to all employees of AGMG and its subsidiaries worldwide, including

IV.E.2. Identified Gaps The hotline escalation workflow presents several significant gaps: Uniform Routing Regardless of Subject Seniority. The routing protocol directs all APS-related complaints to Gallegos without differentiation based on the seniority or organizational position of the complaint's subject. A complaint about inappropriate conduct by a line-level supervisor is routed through the same channel as a com

IV.E.3. Gap Identified and Recommendation Summary The gaps identified in the hotline escalation workflow are structural and require changes both to the internal escalation matrix maintained by Meridian and to the policies governing how hotline complaints are handled within the Company. Our recommendations include: (i) Revise the Meridian hotline escalation matrix to require automatic dual-routing of any complaint ide

IV.F. Deficiency 6: Misalignment Between AGMG Global Code of Conduct, APS Employee Handbook, and Board Corporate Governance Guidelines

IV.F.1. Global Code of Conduct, Version 4.2 The AGMG Global Code of Conduct, effective January 1, 2022, is a company-wide policy document that establishes high-level principles regarding workplace conduct, ethics, and compliance. With respect to harassment and misconduct, the Code provides general statements of commitment to a respectful workplace free from harassment and discrimination, and it requires employees to

IV.F.2. Board Corporate Governance Guidelines, Section 12

Section 12 of the AGMG Board Corporate Governance Guidelines, titled "Executive Conduct Standards," establishes conduct expectations for senior executives of AGMG and its subsidiaries. It addresses topics such as conflicts of interest, confidentiality, public statements, and compliance with law. The section includes general language regarding the expectation that senior executives will conduct themselves in accordanc

IV.F.3. APS Employee Handbook (CA Supplement) The APS Employee Handbook, for its part, does not reference or incorporate the Board Corporate Governance Guidelines. Employees and HR professionals reviewing the Handbook would have no indication that a parallel set of executive conduct standards exists at the Board level or that any Board-level oversight mechanism applies to complaints involving senior executives. Simil

IV.F.4. Gap Identified and Recommendation Summary The overarching gap identified in this area is the absence of an integrated, harmonized policy framework that creates a clear, end-to-end escalation chain from subsidiary-level complaint intake through parent-company oversight to Board-level notification and decision-making. The three policy instruments — the Global Code of Conduct, the APS Handbook, and the Board Cor

V. Summary Table of Deficiencies and Recommendations The following table summarizes the six principal categories of deficiency identified in this memorandum, the policy instruments affected, the nature of each gap, the recommended corrective action, and the priority level assigned to each recommendation.

VI. Benchmarking Against FEHA Requirements The deficiencies identified in this memorandum create significant legal exposure for APS and AGMG under FEHA. We discuss below how each category of deficiency relates to the Company's obligations under the relevant FEHA provisions. Cal. Gov. Code § 12940(k): Duty to Prevent Harassment and Discrimination. Section 12940(k) imposes an affirmative duty on employers to take "all