Contract analysis

I. EXECUTIVE SUMMARY A. Purpose of the Report Calderwood & Harkness LLP ("C&H") was retained by the Board of Directors of Aurelius Global Media Group PLC ("AGMG" or "the Company") to conduct an independent privileged workplace investigation into allegations of sexual harassment, retaliation, and creating a hostile work environment against Marcus Hale, President of Aurelius Pacific Studios Inc. ("APS"), a wholly owned

1. Sexual harassment of Jenna Morales, Vice President of Development, APS. Ms. Morales alleged that between approximately September 2022 and March 2023, Mr. Hale engaged in a pattern of sexual harassment, including invitations to his hotel room during a production trip, sexually suggestive text messages, inappropriate comments of a sexual nature during a private business meeting, and unwanted physical contact at a co

2. Sexually inappropriate comments toward Claire Ngo, Senior Director of Talent Relations, APS. Ms. Ngo alleged that during a company off-site event in February 2023, Mr. Hale made sexually suggestive comments about her attire and inquired about her personal romantic life. Ms. Ngo further alleged that following the incident, she was excluded from key strategy meetings in what she believed to be retaliatory conduct.

3. Retaliation against Darren Whitfield, SVP of Physical Production, APS. Mr. Whitfield alleged that after he raised concerns about Mr. Hale's treatment of female employees at a leadership team meeting in January 2023, Mr. Hale retaliated by reassigning two of Mr. Whitfield's highest-profile production projects, with combined budgets totaling approximately $187 million. The initial complaint was filed on April 18, 20

1. Termination of Marcus Hale. The Board should authorize the termination of Mr. Hale's employment for cause under Section 9.2(b) of his employment agreement dated January 7, 2019. The substantiated findings of sexual harassment and retaliation constitute ample grounds for termination for cause under both the employment agreement and applicable California law.

2. Enhanced Anti-Harassment Training. Mandatory enhanced anti-harassment and anti-retaliation training should be implemented for all senior leaders at APS (at the Vice President level and above), to be completed within ninety days of this report. Consideration should be given to extending this training company-wide across AGMG.

3. Policy Revisions. The APS Employee Handbook (California Supplement) should be revised to address the identified deficiencies, specifically in Section 5.3 (Anti-Harassment & Anti-Discrimination Policy), Section 5.7 (Anti-Retaliation Policy), and Section 8.1 (Complaint & Investigation Procedures). Corresponding revisions to the AGMG Global Code of Conduct (v4.2) and the AGMG Board Corporate Governance Guidelines (Se

4. Hotline Escalation Procedures. The Company should work with Meridian Compliance Solutions LLC to revise the ethics hotline-to-investigation escalation procedures, including the establishment of defined escalation timelines and mandatory reporting protocols for complaints involving senior executives.

5. Independent Workplace Culture Assessment. An independent third-party firm should be engaged to conduct a comprehensive workplace culture assessment at APS to identify and address any broader cultural issues that may have enabled or permitted the conduct at issue.

6. Remedial Measures for Complainants. Appropriate remedial measures should be implemented for Ms. Morales, Ms. Ngo, and Mr. Whitfield to restore them to the positions and responsibilities they held prior to the events at issue, and to protect them from any further retaliatory conduct.

7. Improvement of HR Documentation Practices. APS should require written memorialization of all counseling, warnings, and disciplinary actions, with copies maintained in the employee's personnel file and provided to the Chief People Officer.

II. PRIVILEGE STATEMENT AND LIMITATIONS A. Privilege Designation This report, and all underlying work product, memoranda, interview notes, document analysis, legal research, and attorney-client communications generated in connection with this investigation, are protected by the attorney-client privilege and the attorney work-product doctrine. This report was prepared at the direction of counsel for the purpose of pro

III. BACKGROUND A. Aurelius Global Media Group PLC Aurelius Global Media Group PLC ("AGMG") is a United Kingdom-headquartered, publicly traded media and entertainment conglomerate incorporated under the laws of England and Wales. AGMG's registered office is located at 45 Aldwych House, Kingsway, London WC2B 6AH, United Kingdom. The Company's shares are listed on the London Stock Exchange's AIM market, and the Company

1. Jenna Morales Jenna Morales, age 38, is Vice President of Development at APS. Ms. Morales has been employed by APS since March 2020, having joined the Company from a prominent independent production company where she served as Director of Creative Development. In her role at APS, Ms. Morales oversees the development of original film and streaming content projects, managing a team of approximately fifteen developme

2. Claire Ngo Claire Ngo, age 33, is Senior Director of Talent Relations at APS. Ms. Ngo has been employed by APS since June 2021. In her role, Ms. Ngo manages relationships with talent agents, managers, and attorneys on behalf of APS's development and production teams. Ms. Ngo reports to SVP Derek Carmichael, who in turn reports to Mr. Hale. On April 24, 2023, Ms. Ngo submitted a corroborating complaint to Victor Ga

3. Darren Whitfield Darren Whitfield, age 47, is Senior Vice President of Physical Production at APS. Mr. Whitfield has been employed by APS since September 2017, having joined the Company prior to the AGMG acquisition of its predecessor entity. Mr. Whitfield oversees the physical production of APS's slate of film and streaming content projects and reports directly to Mr. Hale. On April 26, 2023, Mr. Whitfield volunt

IV. INVESTIGATION METHODOLOGY A. Engagement and Staffing C&H was formally engaged on May 2, 2023 by AGMG's Board of Directors, acting through Fiona Blackwood, General Counsel, to conduct this independent privileged workplace investigation. The engagement letter was executed on May 2, 2023 and is included as Appendix A to this report (referenced but not attached). The engagement letter set forth the scope, terms, and

1. Forensic Collection At C&H's direction, Linden Forensics Group Inc. ("Linden Forensics"), located at 201 Mission Street, Suite 1400, San Francisco, California 94105, was retained on May 8, 2023 as agent of counsel to perform forensic collection and processing of electronically stored information ("ESI") relevant to the investigation. Linden Forensics was engaged under the attorney-client privilege and work-product

2. Processing and Review The total volume of documents and communications collected from the nine custodians was approximately 847,000 items. After standard processing and de-duplication procedures performed by Linden Forensics, the collection was reduced to approximately 214,000 unique items. C&H developed a set of search terms and date-range filters in consultation with Mr. Crawford and Ms. Vasquez, designed to ide

3. HR Records and Policy Documents In addition to the forensic collection of ESI, C&H requested and received hard-copy and electronic human resources records and policy documents from APS. These materials were provided by Victor Gallegos, VP of Human Resources at APS, and Patricia Sung, Chief People Officer of AGMG. HR records reviewed included personnel files for Mr. Hale, Ms. Morales, Ms. Ngo, Mr. Whitfield, and Ms

V. APPLICABLE LEGAL STANDARDS AND COMPANY POLICIES A. California Fair Employment and Housing Act (FEHA) The California Fair Employment and Housing Act, California Government Code Sections 12940 et seq., is the principal state law governing workplace harassment, discrimination, and retaliation in California. FEHA applies to APS as an employer of more than five employees in the State of California. The following provis

Section 12940(j) — Prohibition on Sexual Harassment. FEHA prohibits an employer from harassing an employee on the basis of sex, which includes sexual harassment. Sexual harassment under FEHA encompasses two theories of liability: Quid pro quo harassment occurs when submission to unwelcome sexual conduct is made, explicitly or implicitly, a term or condition of an individual's employment, or when submission to or reje

Section 12940(h) — Prohibition on Retaliation. FEHA prohibits an employer from retaliating against any person because the person has opposed any practices forbidden under FEHA, or because the person has filed a complaint, testified, or assisted in any proceeding under FEHA. "Protected activity" under this section includes, but is not limited to, filing a formal complaint, reporting harassment to a supervisor or HR, a

Section 12940(k) — Employer's Duty to Prevent Harassment. FEHA imposes an affirmative duty on employers to take all reasonable steps necessary to prevent harassment, discrimination, and retaliation from occurring. This duty includes the obligation to establish, distribute, and enforce anti-harassment policies; to provide anti-harassment training; and to conduct a fair, timely, and thorough investigation of any compla

1. AGMG Global Code of Conduct, Version 4.2 (effective January 1, 2022) The AGMG Global Code of Conduct, Version 4.2, effective January 1, 2022, applies to all employees, officers, and directors of AGMG and its subsidiaries worldwide, including APS. The Code of Conduct establishes baseline standards of ethical conduct and compliance, including prohibitions on harassment, discrimination, and retaliation. The Code requ

2. APS Employee Handbook, California Supplement (revised March 15, 2022) The APS Employee Handbook, California Supplement, revised March 15, 2022, supplements the AGMG Global Code of Conduct with California-specific policies and procedures applicable to APS employees. The following sections are directly relevant to this investigation:

Section 5.3 — Anti-Harassment & Anti-Discrimination Policy. This section prohibits all forms of harassment and discrimination in the workplace, including but not limited to harassment based on sex, gender, gender identity, gender expression, sexual orientation, race, national origin, religion, disability, age, and other categories protected under federal and California law. The policy defines sexual harassment to inc

Section 5.7 — Anti-Retaliation Policy. This section prohibits retaliation against any employee who in good faith reports harassment, discrimination, or any other violation of company policy; who files a complaint or participates in an investigation related to such conduct; or who otherwise exercises rights protected by applicable law. The policy defines retaliation broadly to include any adverse action taken against

Section 8.1 — Complaint & Investigation Procedures. This section establishes the procedures for reporting, documenting, investigating, and resolving complaints of harassment, discrimination, and retaliation at APS. The policy directs employees to report complaints to their supervisor, to Human Resources, or through the ethics hotline. The policy states that all complaints will be investigated promptly, thoroughly, an

3. AGMG Board Corporate Governance Guidelines, Section 12: Executive Conduct Standards

Section 12 of the AGMG Board Corporate Governance Guidelines establishes standards of conduct for senior executives and officers of AGMG and its subsidiaries. This section requires all senior executives to comply with the AGMG Global Code of Conduct, all applicable company policies, and all applicable laws and regulations. It further provides that the Board of Directors retains the authority to investigate and take a

VI. DETAILED FACTUAL FINDINGS The following sections set forth the detailed factual findings of the investigation, organized by complainant and allegation category. For each allegation, the report describes the complainant's account, the corroborating evidence, Mr. Hale's position, and the investigative finding. The investigation also addressed Mr. Hale's overall position statement and the prior complaint by Serena W

1. Overview. Jenna Morales alleged that between approximately September 2022 and March 2023, Marcus Hale engaged in a course of conduct directed at her that constituted sexual harassment under both FEHA and APS policy. Ms. Morales described four specific categories of conduct, each of which was separately investigated and evaluated: (a) hotel room invitations during a production trip to Vancouver in October 2022; (b)

2. Category (a): Vancouver Production Trip — Hotel Room Invitations (October 2022) Ms. Morales alleged that during a production trip to Vancouver, British Columbia, in October 2022, Mr. Hale made multiple invitations for her to come to his hotel room after work-related events. Ms. Morales stated that the production trip lasted approximately five days and involved a team of approximately twelve APS employees who trave

3. Category (b): Sexually Suggestive Text Messages (November–December 2022) Ms. Morales alleged that between November and December 2022, Mr. Hale sent her a series of text messages that were sexually suggestive in nature. Ms. Morales identified three specific messages, sent on November 14, 2022, November 29, 2022, and December 8, 2022, that she found to be inappropriate and unwelcome. The forensic collection conducte