PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 787 Seventh Avenue New York, New York 10019
Matter No.: 1017-00002
MEMORANDUM
TO: Board of Directors, Aurelius Global Media Group PLC Special Committee (Tobias Kessler, Chair; Lucinda Farrow-Grant; Dr. Anwen Llewellyn)
FROM: Nathaniel Bower, Colette Whitman, Audrey Zhou
DATE: May 30, 2024
RE: Settlement Analysis and Recommendation — Corvus Peak Capital Partners LP Proxy Contest
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I. Executive Summary
Calderwood & Harkness LLP ("C&H" or "we") has been asked by the Board of Directors (the "Board") and Special Committee (the "Committee") of Aurelius Global Media Group PLC ("AGMG" or the "Company") (NYSE: AGMG; LSE: AGMG.L) to analyze the advisability and optimal configuration of a negotiated settlement with Corvus Peak Capital Partners LP ("Corvus Peak" or the "Fund") in advance of the June 7, 2024 Annual General Meeting of Shareholders (the "AGM"). This memorandum sets forth our analysis and recommendation.
The landscape surrounding this proxy contest has shifted materially in the two weeks since the Board rejected Corvus Peak's May 10, 2024 settlement proposal. On May 17, 2024, Cobalt Ridge Solutions ("ISS") issued its benchmark proxy recommendation supporting the election of two of the three Corvus Peak nominees — Malcolm Trask and Dr. Raymond Chu — while recommending against the election of Vanessa Loring. Five days later, on May 22, 2024, Adriatic Services Inc. ("Tarrant Partners LLC") went further, recommending the election of all three Corvus Peak nominees. These recommendations, taken together, represent a decisive endorsement of the Corvus Peak campaign by the two most influential proxy advisory firms and fundamentally alter the vote calculus for the AGM.
Compounding these developments, Windermere Pension Trust (4.4% of outstanding shares, or 18,154,400 shares; CIO Bernard Napier) has publicly declared its support for the full Corvus Peak slate. Our internal vote projections, discussed at length in Section III below, indicate that the Company's incumbent directors face the prospect of losing two or three contested seats at the AGM. The Board's earlier rejection of Corvus Peak's May 10, 2024 settlement proposal — which called for two nominees to be seated immediately and the CEO search to be paused pending board reconstitution — should be reassessed in light of these materially changed circumstances.
This memorandum undertakes the following analyses:
1. An updated vote projection analysis incorporating the ISS and Tarrant Partners LLC recommendations and current shareholder positioning;
2. A detailed examination of three settlement configurations (1-seat, 2-seat, and 3-seat concessions), evaluating each for strategic viability, impact on board composition, effect on the CEO succession process, and governance credibility;
3. A game-theory analysis of the settlement negotiation dynamics, modeling the interaction as a sequential bargaining game with outside options;
4. A survey of precedent activist settlements in the media sector from 2019 to 2024;
5. An assessment of the impact of each settlement configuration on the CEO succession process currently being administered through Hargrove Tate Partners LLC;
6. A fiduciary duty analysis under applicable Delaware law; and
7. A detailed negotiation strategy with tactical recommendations, proposed term sheet, fallback positions, and coordination requirements among the Company's advisors.
Recommendation. Based on the foregoing analysis, C&H recommends that the Board authorize Dame Elspeth Greenvale, as Independent Non-Executive Chair, and the Special Committee, to enter into immediate settlement negotiations with Corvus Peak Capital Partners LP, targeting a 2-seat concession. Under the recommended settlement, Malcolm Trask and Dr. Raymond Chu would be appointed to the Board; Vanessa Loring's nomination would be withdrawn; and in exchange, Corvus Peak would agree to a mutual standstill of 18 months' duration, an ownership cap of 12% of outstanding shares, a voting commitment in favor of the Board's recommended slate at the 2025 AGM, and joint governance commitments regarding the CEO succession process. Two incumbent directors — we recommend Tobias Kessler and Hugh Pemberton — would voluntarily resign to facilitate the transition.
Time is of the essence. The AGM is eight days away. Every day that passes without settlement diminishes the Board's negotiating leverage as additional proxy cards are submitted in favor of the Corvus Peak slate. We recommend initiating outreach to Corvus Peak's counsel, Dominic Sayer at Blackthorn Howell & Crane LLP, no later than May 31, 2024.
II. Current Posture and Procedural Context
A. Timeline of Key Events Leading to This Analysis
The following chronology summarizes the principal events that have brought the Company and Corvus Peak to the present juncture. Understanding this timeline is essential to appreciating the urgency and context of the settlement analysis that follows.
January 18, 2024. Corvus Peak Capital Partners LP files an initial Schedule 13D with the Securities and Exchange Commission (the "SEC"), disclosing beneficial ownership of approximately 6.1% of the outstanding shares of AGMG common stock. The filing characterizes the investment as made for the purpose of "enhancing long-term shareholder value" and notes that the Fund "may seek to engage with management and the Board of Directors regarding strategic and operational opportunities." No director nominations or specific demands are articulated at this stage, but the filing signals an activist intent distinguishable from a passive investment.
February 12, 2024. Corvus Peak delivers a formal demand letter to the Board, signed by Damien Solberg (Founding Partner and Chief Investment Officer) and Erin Nakamura (Portfolio Manager, AGMG campaign), requesting: (i) the appointment of two new independent directors with media industry expertise to the Board; (ii) the formation of a strategic review committee to evaluate all options for maximizing shareholder value, including potential asset sales, mergers, or other extraordinary transactions; and (iii) the development and public disclosure of a formal CEO succession plan. The letter cites AGMG's trailing twelve-month total shareholder return of negative 18.3% relative to the S&P 500 Media & Entertainment Sub-Industry Index, the Company's margin compression in the digital content segment, and what the Fund characterizes as "chronic governance deficiencies, including the absence of a credible CEO succession framework."
February 26, 2024. Corvus Peak files an amended Schedule 13D disclosing an increase in its beneficial ownership to approximately 8.7% of outstanding shares, representing approximately 35,896,200 shares out of 412,600,000 shares of common stock outstanding. The amended filing discloses an average cost basis of approximately $20.97 per share, implying a total investment of approximately $752.8 million. Contemporaneously, Corvus Peak publicly announces its intention to nominate three director candidates for election at the 2024 Annual Meeting of Shareholders.
March 1, 2024. Corvus Peak submits formal director nominations for the 2024 Annual Meeting, nominating: (i) Malcolm Trask (age 58), former Chief Executive Officer of Archway Digital Holdings Inc.; (ii) Vanessa Loring (age 44), Managing Director at Corvus Peak Capital Partners LP; and (iii) Dr. Raymond Chu (age 61), former President of Helix Media Networks Inc. The nominations are timely filed within AGMG's advance notice bylaw window, which runs from February 10 through March 11, 2024, as confirmed by Nadine Khalil, General Counsel and Corporate Secretary.
March 8, 2024. Marcus Vane resigns as Chief Executive Officer, effective immediately. The Board designates Priya Nair-Whitfield, Chief Operating Officer, as Interim CEO. Vane's departure — the circumstances of which are addressed separately in C&H's March 10, 2024 memorandum on severance arrangements — leaves a vacancy on the Board that the Nominating & Governance Committee elects not to fill immediately.
March 12, 2024. The Board engages Calderwood & Harkness LLP as independent governance counsel to advise on the Corvus Peak proxy contest and related governance matters.
March 15, 2024. The Nominating & Governance Committee retains Hargrove Tate Partners LLC (lead partner Christine Aldridge) to conduct a comprehensive external CEO search. The engagement provides for a flat fee of $750,000, payable in three installments: $250,000 upon engagement (paid), $250,000 upon delivery of a candidate slate, and $250,000 upon successful placement of a permanent CEO.
March 18, 2024. The Board forms a Special Committee of Independent Directors to oversee the CEO search process and, subsequently, to coordinate the Board's response to the Corvus Peak proxy contest. The Special Committee consists of Tobias Kessler (Chair), Lucinda Farrow-Grant, and Dr. Anwen Llewellyn.
April 1, 2024. Corvus Peak files a preliminary proxy statement with the SEC in connection with its nomination of three director candidates.
April 5, 2024. AGMG files a preliminary proxy statement recommending the election of the Company's incumbent director nominees and opposing the election of the Corvus Peak nominees.
April 10, 2024. The Board considers and, on C&H's advice, rejects the adoption of a shareholder rights plan (commonly referred to as a "poison pill"). As analyzed in our April 10 memorandum, the adoption of a rights plan in the context of an ongoing proxy contest — absent a credible takeover threat — would invite Blasius enhanced scrutiny and generate substantial negative publicity.
April 18, 2024. The Special Committee, in coordination with Hargrove Tate Partners, conducts a first round of interviews with five external CEO candidates, including Jonathan Hale.
April 22, 2024. The Board engages Stonebridge Crane & Co. (lead banker Anil Kapoor-Mehta) as financial advisor to assist in the Board's review of strategic alternatives. The engagement provides for a monthly retainer of $250,000 and a transaction fee of 0.25% of enterprise value upon consummation of any qualifying transaction.
May 3, 2024. AGMG files its definitive proxy statement for the June 7 Annual General Meeting with the SEC.
May 6, 2024. Corvus Peak files its definitive proxy statement with the SEC.
May 10, 2024. Corvus Peak delivers a settlement proposal to the Board through its counsel, Blackthorn Howell & Crane LLP. The proposal calls for: (i) two Corvus Peak nominees to be seated on the Board immediately, without awaiting the AGM; and (ii) the Board's CEO search process to be paused pending reconstitution of the Board. The Board considers the proposal at an emergency session on May 12, 2024, and rejects it, concluding that the proposed terms are premature and that the CEO search should not be conditioned on board reconstitution. At the time of the Board's rejection, neither ISS nor Tarrant Partners LLC had yet published its recommendation regarding the contested election.
May 17, 2024. ISS publishes its benchmark proxy research report, recommending that AGMG shareholders vote in favor of two of the three Corvus Peak nominees — Malcolm Trask and Dr. Raymond Chu — and against the election of Vanessa Loring. ISS cites Trask's operating experience and Chu's media sector expertise as additive to the Board, while expressing reservations about Loring's dual role as a sitting Corvus Peak Managing Director and her potential lack of independence. On the same day, Windermere Pension Trust (4.4% of outstanding shares, 18,154,400 shares; CIO Bernard Napier) publicly declares its support for the full Corvus Peak slate, including Loring.
May 22, 2024. Tarrant Partners LLC publishes its proxy research report, recommending that AGMG shareholders vote in favor of all three Corvus Peak nominees. Tarrant Partners LLC determines that "the degree of board refreshment warranted by AGMG's persistent underperformance and governance shortcomings justifies the election of the full activist slate, notwithstanding questions regarding Ms. Loring's operational independence."
B. Current Board Composition (Pre-AGM, 10 Voting Seats, 1 Vacant)
The Board of Directors of AGMG is currently composed of nine sitting voting directors, with one vacancy. The full composition is as follows:
1. Dame Elspeth Greenvale — Independent Non-Executive Chair (age 67). Dame Greenvale has served as Chair since 2019 and as a director since 2016. She previously served as Senior Independent Director. Dame Greenvale brings extensive governance experience from her tenure as a director of three FTSE 250 companies and her prior service as a senior civil servant in the United Kingdom.
2. Priya Nair-Whitfield — Interim Chief Executive Officer and Chief Operating Officer (age 48). Ms. Nair-Whitfield was designated Interim CEO upon Marcus Vane's resignation on March 8, 2024. She has served as COO since 2021 and as a director since 2022. She is the sole management director other than the CFO.
3. Tobias Kessler — Independent Non-Executive Director (age 63); Special Committee Chair. Mr. Kessler has served on the Board since 2017. He chairs the Nominating & Governance Committee and serves on the Audit Committee. He currently chairs the Special Committee.
4. Lucinda Farrow-Grant — Independent Non-Executive Director (age 55). Ms. Farrow-Grant has served on the Board since 2020. She serves as Chair of the Compensation Committee and as a member of the Special Committee.
5. Reginald Osei — Independent Non-Executive Director (age 60). Mr. Osei has served on the Board since 2018. He serves on the Audit Committee and the Nominating & Governance Committee.
6. Sofia Delgado-Ríos — Independent Non-Executive Director (age 52). Ms. Delgado-Ríos has served on the Board since 2019. She serves on the Compensation Committee.
7. Hugh Pemberton — Non-Executive Director, co-founder (age 71). Mr. Pemberton co-founded AGMG's predecessor company in 1994 and has served on the Board continuously since inception. He holds a personal stake of approximately 2.1% of outstanding shares, or 8,664,600 shares. He does not meet the Board's independence criteria due to his founder relationship with the Company.
8. Dr. Anwen Llewellyn — Independent Non-Executive Director (age 46). Dr. Llewellyn has served on the Board since 2021. She serves on the Audit Committee and as a member of the Special Committee.
9. Garrett Voss — Chief Financial Officer (age 51). Mr. Voss was appointed CFO in 2020 and has served as a director since 2021. He is a management director.
The 10th seat on the Board has been vacant since Marcus Vane's resignation on March 8, 2024. The Board elected not to fill this vacancy pending resolution of the proxy contest and the CEO search process.
Non-Voting Participant. Nadine Khalil (age 45), General Counsel and Corporate Secretary, attends all Board and committee meetings as a non-voting participant and advisor. Ms. Khalil coordinates with C&H and outside counsel on governance matters.
C. Incumbent Support Dynamics and Board Factionalism
An analysis of the Board's internal dynamics is essential to understanding both the Company's negotiating position vis-à-vis Corvus Peak and the constraints that any settlement configuration will face in securing Board approval.
The Board has become informally divided into factions primarily along the axis of the CEO succession question — specifically, the question of whether the permanent CEO should be an internal candidate (with Priya Nair-Whitfield as the presumptive choice) or an external hire (with Jonathan Hale as the most discussed candidate). This factionalism has compromised the Board's ability to present a unified front in the proxy contest.
Nair-Whitfield Supporters (4 of 9 sitting directors). Dame Elspeth Greenvale, Lucinda Farrow-Grant, Hugh Pemberton, and Sofia Delgado-Ríos favor promoting Nair-Whitfield from Interim CEO to permanent CEO. This faction values continuity, Nair-Whitfield's institutional knowledge, and the signal that an internal promotion would send to AGMG employees and the market. Dame Greenvale, in particular, has been a vocal advocate for Nair-Whitfield's candidacy, viewing an external hire as destabilizing during a period of contested governance.
Hale Supporters (3 of 9 sitting directors). Tobias Kessler, Reginald Osei, and Dr. Anwen Llewellyn favor an external hire and have indicated support for Jonathan Hale. This faction has emphasized the need for transformational leadership, citing AGMG's underperformance relative to peers and the market's expectation of strategic change. Kessler has been the most outspoken proponent of the external hire approach, arguing that promoting Nair-Whitfield would be perceived as a continuation of the Vane-era strategy.
Undecided (1 of 9 sitting directors). Garrett Voss has not committed to either camp. As CFO, Voss has a complex relationship with the succession question — a Nair-Whitfield promotion would preserve his current reporting relationship and operational stability, while an external hire could bring changes to the financial leadership structure. Voss has expressed openness to both paths in private conversations with counsel.
This factionalism has had two significant consequences for the proxy contest. First, it has weakened the Board's ability to articulate a counter-narrative to Corvus Peak's campaign. Corvus Peak has exploited the succession uncertainty in its proxy materials, characterizing the Board as "directionless" and "consumed by internal disagreement rather than shareholder value creation." Second, and more critically, it has created an informal alignment between certain incumbent directors and the Corvus Peak position.
As detailed in C&H's April 19, 2024 memorandum to the Special Committee, Jonathan Hale's relationship with Damien Solberg — Corvus Peak's founding partner and CIO — constitutes a material conflict that the Board must address in any settlement context. Hale and Solberg served together on the board of Keystone Digital Ventures Ltd. from 2018 to 2022. This shared board service, combined with what our due diligence has identified as an ongoing personal relationship (including co-investment in at least one private venture fund), creates a reasonable inference that Hale's CEO candidacy is, at minimum, known to and potentially coordinated with Corvus Peak. The existence of this relationship undermines the Board's ability to characterize the entire Corvus Peak campaign as hostile — a narrative that would ordinarily be a core element of the Company's proxy solicitation strategy. To the extent that three incumbent directors (Kessler, Osei, and Llewellyn) favor the candidacy of an individual with ties to the activist shareholder, the "hostile campaign" narrative is inherently compromised.
D. The Corvus Peak Nominees
Each of the three Corvus Peak nominees brings a distinct profile and raises specific governance considerations:
Malcolm Trask (age 58). Mr. Trask served as Chief Executive Officer of Archway Digital Holdings Inc. from 2016 to 2022, during which period Archway's market capitalization grew from approximately $2.1 billion to approximately $5.8 billion. He is widely regarded as a seasoned operating executive with deep expertise in digital media transformation. ISS and Tarrant Partners LLC both recommended his election, and he is the least controversial of the three Corvus Peak nominees. Mr. Trask has no current employment relationship with Corvus Peak and would qualify as an independent director under AGMG's governance guidelines and applicable exchange listing standards.
Vanessa Loring (age 44). Ms. Loring is a Managing Director at Corvus Peak Capital Partners LP, where she has been employed since 2017. She leads the Fund's governance and operational improvement practice and has served as an activist-nominated director on the boards of three other public companies during her tenure at Corvus Peak. Ms. Loring's nomination is the most contentious element of the Corvus Peak slate. As a sitting employee of the activist fund, she would not qualify as an independent director under any applicable standard. ISS recommended against her election, specifically citing the governance concerns associated with a fund employee serving on the board of a portfolio company. Tarrant Partners LLC, however, recommended her election, determining that her operational expertise outweighed the independence concern. Ms. Loring's nomination is the primary target for concession in any settlement negotiation.
Dr. Raymond Chu (age 61). Dr. Chu served as President of Helix Media Networks Inc. from 2013 to 2020, overseeing the company's expansion into streaming content. He holds a doctorate in communications from Stanford University and has published extensively on media industry strategy. Like Trask, Dr. Chu has no current employment relationship with Corvus Peak and would qualify as an independent director. Both ISS and Tarrant Partners LLC recommended his election.
Corvus Peak's Advisory Team. Corvus Peak is represented in the proxy contest by Blackthorn Howell & Crane LLP (lead partner Dominic Sayer, age 50; lead associate Kathleen Bryce, age 34). Sayer is a well-known activist defense and offense practitioner with significant experience negotiating settlement agreements in contested election situations. The Fund's proxy solicitor is Falconer Strauss LLC (lead contact Derek Huang), a firm with a strong track record in contested elections involving mid-cap media and technology companies. The quality and experience of Corvus Peak's advisory team should not be underestimated; Sayer, in particular, is known for aggressive negotiating tactics and a willingness to proceed to a vote when settlement terms are not favorable to his client.
III. Updated Vote Projection Analysis
A. Shareholder Base Composition
AGMG has 412,600,000 shares of common stock outstanding. The following table summarizes the positions and expected voting behavior of the Company's significant shareholders and shareholder categories:
Several observations regarding the shareholder base warrant emphasis:
Corvus Peak (8.7%, 35,896,200 shares) will vote its shares for its own nominees. At an average cost basis of approximately $20.97 per share and a current trading price of approximately $23.40 per share (as of market close on May 29, 2024), Corvus Peak holds an unrealized gain of approximately $87.2 million on its position. This unrealized gain, while not directly relevant to the vote, underscores the Fund's conviction and its incentive to remain engaged as an active shareholder.
Thorne Capital Management LP (6.3%, 25,993,800 shares) is a Boston-based long-only fundamental equity fund led by portfolio manager Oliver Thorne (age 60). Thorne Capital has historically been a passive, governance-conscious holder that relies heavily on ISS recommendations in contested elections. Based on our conversations with Citrine Advisory Group (our proxy solicitor), Thorne Capital has not yet submitted its proxy card. We assess with high confidence that Thorne Capital will follow the ISS recommendation and vote for Trask and Chu while voting against Loring.
Ridgeway Asset Management Ltd. (5.1%, 21,042,600 shares) is a London-based traditional asset manager led by head of governance Fiona Ashcroft (age 44). Ridgeway is known for its governance-focused investment approach and has supported activist nominees in prior contested elections. Ridgeway has a strong institutional relationship with Tarrant Partners LLC and is expected to follow the Tarrant Partners LLC recommendation, voting for all three Corvus Peak nominees.
Windermere Pension Trust (4.4%, 18,154,400 shares) is a multi-employer pension fund whose CIO, Bernard Napier (age 57), publicly declared support for the full Corvus Peak slate on May 17, 2024 — the same day the ISS recommendation was published. Windermere's public declaration is significant not only for the votes it represents but for its potential influence on other institutional holders who may be on the fence.
Management and Board Insiders (3.2%, 13,203,200 shares) will vote for the incumbent slate. The largest insider holding is Hugh Pemberton's 2.1% stake (8,664,600 shares); the remainder is distributed among other directors and senior executives subject to beneficial ownership reporting.
Remaining Institutional and Retail Shareholders (approximately 72.3%, 298,309,800 shares) constitute the decisive voting bloc. This category includes index funds (which typically follow their own internal governance policies but are heavily influenced by proxy advisory firm recommendations), actively managed mutual funds, hedge funds with smaller positions, and retail shareholders. Based on historical proxy contest data and Citrine Advisory Group's real-time tracking of proxy card submissions, we estimate that approximately 55-65% of this category will follow ISS or Tarrant Partners LLC recommendations, with the balance splitting between incumbent support, non-voting, and independent decision-making.
AGMG's proxy solicitor, Citrine Advisory Group Inc. (lead contact Sandra Eriksson), has been engaged since the commencement of the contest and is actively soliciting votes for the incumbent slate. Citrine's most recent report (May 28, 2024) indicates that early proxy card returns are trending unfavorably for the incumbent directors in the contested seats.
B. Three Voting Scenarios
Based on our analysis of the shareholder base, proxy advisory firm recommendations, and real-time vote tracking data from Citrine Advisory Group, we model three scenarios for the AGM outcome:
Scenario 1: Optimistic for Incumbents
Under this scenario, we assume that ISS-following shareholders vote for Trask and Chu but not Loring, that Tarrant Partners LLC-following shareholders split (some voting for all three, others following ISS), and that retail shareholders break modestly in favor of the incumbent slate. In this scenario, Corvus Peak seats two of its three nominees — Trask and Chu — while Loring fails to receive sufficient votes. Among the incumbents, the directors most at risk of displacement are those who poll weakest in Citrine's tracking surveys: Kessler, Pemberton, and Delgado-Ríos. Under this scenario, two of these three incumbents would lose their seats. We assign a probability of approximately 20-25% to this scenario.
Scenario 2: Base Case
Under the base case, ISS and Tarrant Partners LLC-following shareholders align, with major institutional holders following one or both advisory firm recommendations. Corvus Peak seats all three nominees. The incumbents most likely to lose their seats are Kessler, Pemberton, and Delgado-Ríos — the three weakest-polling incumbents per Citrine's May 28 tracking data. Projected vote margins under this scenario are as follows:
We assign a probability of approximately 55-60% to this scenario. It represents the most likely outcome if the AGM proceeds without a settlement.
Scenario 3: Pessimistic for Incumbents
Under this scenario, retail shareholder momentum swings further toward Corvus Peak, additional institutional shareholders beyond Windermere publicly or privately declare support for the Corvus Peak slate, and the incumbent vote erodes more broadly. In this scenario, Corvus Peak seats all three nominees, and a fourth incumbent seat may be at risk — specifically, Reginald Osei or Dr. Anwen Llewellyn could fall below the plurality threshold. We assign a probability of approximately 15-20% to this scenario.
Conclusion. Across all three scenarios, Corvus Peak is expected to seat a minimum of two nominees. Under the base case — which we assess as the most probable outcome — Corvus Peak seats all three nominees. The probability-weighted expected outcome is that Corvus Peak will seat between 2.5 and 3.0 nominees (i.e., all three nominees win in all but the most optimistic scenario for incumbents). This vote trajectory provides the essential backdrop for the settlement analysis that follows.
C. Implications of the Plurality Standard
A brief but important procedural note is warranted. AGMG's Amended and Restated Bylaws provide for majority voting in uncontested director elections — meaning that in an uncontested election, a nominee must receive a majority of the votes cast to be elected, and any nominee who fails to receive a majority is expected to tender a resignation for the Board's consideration. However, in a contested election — defined as an election in which the number of nominees exceeds the number of available seats — the bylaws provide for a plurality voting standard.
The current contest was triggered by Corvus Peak's nomination of three additional director candidates, resulting in more nominees than available seats. Under the plurality standard, the nominees receiving the most "for" votes will be elected, regardless of whether they receive a majority of votes cast. This standard mechanically favors the slate with greater overall shareholder support. Given the proxy advisory firm alignment with the Corvus Peak slate, the plurality standard operates to the disadvantage of the incumbent nominees in the contested seats.
It should also be noted that under the plurality standard, there is no "withhold" or "against" vote with independent legal significance. Shareholders either vote "for" a nominee or they do not. Strategic "against" voting — which can be effective in majority-vote regimes — has limited utility in a plurality contest. The practical consequence is that the election will be determined primarily by which slate can generate more affirmative "for" votes, and on this metric, the Corvus Peak slate currently holds a significant advantage for the contested seats.
IV. Settlement Configuration Analysis
A. Overview of Options
We have analyzed three potential settlement configurations, each involving a different level of board seat concession to Corvus Peak. The three configurations are:
1. 1-Seat Concession. One Corvus Peak nominee (most likely Trask) is seated on the Board; the remaining two Corvus Peak nominees (Loring and Chu) withdraw their nominations.
2. 2-Seat Concession. Two Corvus Peak nominees (Trask and Chu) are seated on the Board; one nominee (Loring) withdraws her nomination. This is the recommended configuration.
3. 3-Seat Concession. All three Corvus Peak nominees (Trask, Loring, and Chu) are seated on the Board; three incumbents depart voluntarily.
For each configuration, we analyze: (a) Corvus Peak's likely willingness to accept the proposed terms; (b) the impact on board composition and dynamics; (c) the impact on the CEO succession process; (d) the implications for AGMG's governance credibility with shareholders, proxy advisory firms, and the broader market; and (e) the precedent support from activist settlements in the media sector (discussed in greater detail in Section VI).
B. Configuration 1: One-Seat Concession
Description. Under this configuration, the Board would offer to seat Malcolm Trask — the Corvus Peak nominee with the broadest support among proxy advisory firms and institutional shareholders — either immediately or at the AGM. Trask would fill the seat left vacant by Marcus Vane's resignation, or the Board would expand to eleven members to create a new seat. In exchange, Corvus Peak would withdraw the nominations of Vanessa Loring and Dr. Raymond Chu, and the proxy contest would be terminated.
Corvus Peak Willingness: Low. We assess the probability of Corvus Peak accepting a 1-seat solution as negligible. Corvus Peak informally rejected feelers for a 1-seat arrangement in March 2024, before the proxy advisory firm recommendations were published. Since that time, the Fund's negotiating position has strengthened materially. Both ISS and Tarrant Partners LLC now recommend the election of at least two Corvus Peak nominees. With this level of advisory firm support, Corvus Peak has no rational incentive to accept a single board seat, which would leave the Fund with only 1 of 10 (or 1 of 11, if the Board is expanded) directors — a level of representation wholly incommensurate with its 8.7% economic stake and the breadth of shareholder support for its nominees. Damien Solberg is a sophisticated activist investor who will not accept a settlement that fails to reflect his fund's leverage in the current environment.
Board Composition Impact: Minimal. A one-seat concession would produce negligible change in board composition. The activist perspective would be represented by a single voice among nine or ten directors, effectively marginalizing Trask's ability to influence board deliberations. While Trask's individual contributions could be valuable, the structural dynamic would likely lead to frustration on Corvus Peak's part and potential resumption of activist campaigns after any standstill period expires.
CEO Succession Impact: Minimal. The CEO search process would continue largely undisturbed. The Special Committee composition would remain unchanged (subject to any independent reconstitution decisions), and Corvus Peak would have limited influence on candidate selection. This may be perceived as a benefit by those directors who wish to preserve the current search process, but it fails to address the legitimate governance criticism that the search has been informally stalled by board factionalism.
Governance Credibility: Weak. ISS and Tarrant Partners LLC would likely characterize a one-seat settlement as insufficient board refreshment. This could damage the Board's credibility with institutional shareholders and proxy advisory firms in future governance interactions. A settlement perceived as "too little, too late" could actually worsen AGMG's governance reputation relative to no settlement at all, if the market interprets it as an attempt to forestall genuine reform.
Assessment: Not Viable. A one-seat concession does not reflect the current balance of negotiating power and will not be accepted by Corvus Peak. Pursuing this configuration wastes valuable negotiating time that the Board cannot afford to lose given the proximity of the AGM. We do not recommend this approach.
C. Configuration 2: Two-Seat Concession (Recommended)
Description. Under this configuration, the Board would offer to seat Malcolm Trask and Dr. Raymond Chu — the two Corvus Peak nominees whose election was recommended by ISS. Vanessa Loring's nomination would be withdrawn. The mechanical accommodation of two new directors can be achieved through several approaches, or a combination thereof: (i) Trask fills the vacancy created by Marcus Vane's resignation, and the Board expands by one seat to accommodate Chu; (ii) two existing incumbents voluntarily resign, and Trask and Chu fill their seats; or (iii) one incumbent resigns, one seat is expanded, and Trask and Chu are appointed.
The recommended approach is option (ii): two existing incumbents — we recommend Tobias Kessler and Hugh Pemberton, discussed below — voluntarily resign, and their seats are filled by Trask and Chu. This approach avoids Board expansion (which could be criticized as dilutive to the activist's proportional representation) and demonstrates a genuine commitment to board refreshment by replacing, rather than merely supplementing, existing directors.
The departing incumbents most naturally suited for voluntary resignation are those identified as most at risk of losing the contested vote: Kessler, Pemberton, and Delgado-Ríos. We recommend that Kessler and Pemberton be the departing directors for the following reasons:
Tobias Kessler. While Kessler has served ably as Special Committee Chair, his informal alignment with the Hale candidacy — and the Hale-Solberg relationship discussed in Section II.C above — creates a complex conflict that complicates his continued service on any reconstituted search committee. His departure would actually enhance the integrity of the CEO succession process by removing a director whose preferred candidate has a material relationship with the activist fund's principal. Moreover, Kessler's departure is a meaningful concession to Corvus Peak, which has publicly criticized his leadership of the Nominating & Governance Committee.
Hugh Pemberton. Pemberton's departure addresses one of the most frequently cited governance criticisms in Corvus Peak's proxy materials: the continued service of a 71-year-old co-founder who has served on the Board for thirty years. Corvus Peak has characterized Pemberton's tenure as emblematic of "founder entrenchment and resistance to change." While Pemberton retains a significant 2.1% personal stake (8,664,600 shares) and will continue to be an economically aligned investor, his departure from the Board would send a powerful signal of governance renewal. His departure also removes a director who does not satisfy independence criteria, thereby improving the Board's overall independence profile.
Corvus Peak Willingness: Moderate to High. This configuration mirrors the ISS recommendation and provides Corvus Peak with two credible, independent, industry-experienced directors. The withdrawal of Vanessa Loring — the most contentious nominee from a governance independence standpoint — is the principal concession Corvus Peak would be making. We assess that Corvus Peak is likely to accept this configuration, provided it is accompanied by meaningful governance commitments (standstill, committee assignments, CEO search representation) that give the Fund confidence it can achieve its strategic objectives through the two seated nominees.
However, Corvus Peak may push back on excluding Loring. Tarrant Partners LLC recommended all three nominees, and Corvus Peak may argue that the full Tarrant Partners LLC recommendation justifies seating all three. The negotiating dynamics of this pushback are addressed in Section IX.C (Fallback Positions). We believe that the concession of Loring is achievable for two reasons: first, Corvus Peak is a sophisticated repeat player in activist situations and understands that settlement inherently requires concessions from both sides; second, Loring's withdrawal can be framed publicly as a mutual decision reflecting governance best practices regarding fund employee representation on portfolio company boards — a framing that protects Loring's professional reputation and Corvus Peak's institutional credibility. Damien Solberg and Erin Nakamura are likely to view the withdrawal of Loring as an acceptable cost if the overall settlement provides sufficient board influence, governance commitments, and a credible path to CEO succession that aligns with the Fund's value-creation thesis.
Board Composition Impact: Meaningful but Manageable. The post-settlement board would be composed as follows (assuming Kessler and Pemberton depart):
Under this composition, Corvus Peak-aligned directors would hold 2 of 9 filled seats (approximately 22%) or 2 of 10 seats if the tenth seat is filled (20%). This level of representation is proportionate to Corvus Peak's 8.7% economic stake — indeed, it is somewhat generous, reflecting the broader institutional shareholder support for board refreshment. The Board retains a clear incumbent majority, with Dame Greenvale continuing as Chair.
The tenth seat presents an opportunity for a jointly agreed appointment — a mutually selected independent director with media industry expertise who is acceptable to both the Board and Corvus Peak. This "consensus director" approach has strong precedent in comparable settlements (discussed in Section VI) and can serve as a governance bridge between the incumbent and activist perspectives. Alternatively, the tenth seat can remain vacant pending resolution of the CEO search, with the understanding that the permanent CEO would be expected to serve as a director.
CEO Succession Impact: Moderate Reset Required. The seating of Trask and Chu would necessitate a reconstitution of the CEO search process. The Special Committee — currently composed of Kessler (departing), Farrow-Grant, and Llewellyn — would need to be reformed. We recommend constituting a new search oversight body that includes at least one Corvus Peak nominee (Trask, given his CEO-level operating experience, is the natural choice) alongside continuing incumbents (Farrow-Grant and Llewellyn, or alternatively Dame Greenvale).
Trask and Chu bring substantial media industry expertise to the CEO search. Trask's tenure as CEO of Archway Digital Holdings and Chu's tenure as President of Helix Media Networks provide them with direct experience in the qualifications, competencies, and market dynamics relevant to selecting AGMG's next permanent CEO. Their participation in the search process adds credibility and addresses Corvus Peak's criticism that the incumbent Board lacked the industry expertise necessary to conduct an effective search.
The Jonathan Hale candidacy requires careful management in this context. As discussed in Section VII.C below, Hale's pre-existing relationship with Damien Solberg creates a conflict of interest that must be addressed through formal protocols — including full disclosure to the reconstituted search committee, potential recusal of Corvus Peak-nominated directors from Hale-related deliberations, and an independent assessment of Hale's candidacy by Hargrove Tate Partners. These protocols can be incorporated into the cooperation agreement itself.
Overall, we estimate that the CEO search timeline would be extended by approximately 2-3 months under this configuration, with Nair-Whitfield continuing as Interim CEO during the transition. This delay is manageable and, in our judgment, preferable to the alternative of a 4-6 month disruption or indefinite tabling of the search that would result from a 3-seat concession or an uncontrolled AGM outcome.
Governance Credibility: Strong. A 2-seat settlement aligned with the ISS recommendation represents the governance sweet spot. It demonstrates that the Board is responsive to shareholder concerns and willing to accept meaningful refreshment, while also maintaining process integrity by declining to seat a fund employee as a director. ISS would likely view this outcome favorably in its post-settlement evaluation and in future governance assessments of AGMG. The Board's willingness to negotiate — rather than proceed to a contentious vote — will be perceived positively by institutional shareholders who value constructive engagement between boards and activist investors.
Key Terms of a 2-Seat Cooperation Agreement. The settlement would be memorialized in a formal Cooperation Agreement between AGMG and Corvus Peak (the "Cooperation Agreement"). The principal terms we recommend are as follows:
(i) Mutual Standstill. Corvus Peak agrees, for a period of eighteen (18) months from the date of the Cooperation Agreement (the "Standstill Period"), not to: (a) acquire, or cause to be acquired, beneficial ownership of more than twelve percent (12%) of the outstanding shares of AGMG common stock (the "Ownership Cap"); (b) submit or announce any director nominations, shareholder proposals, or proxy solicitations other than as contemplated by the Cooperation Agreement; (c) solicit, or participate in any solicitation of, proxies, consents, or written shareholder requests for a special meeting; (d) publicly advocate for or propose any extraordinary transaction, including any merger, acquisition, recapitalization, restructuring, or disposition of all or substantially all of AGMG's assets; or (e) initiate, encourage, or participate in any "vote no" or "withhold" campaign against any director nominated by the Board.
(ii) Standstill Exceptions. Standard carve-outs shall apply, including: (a) the right to respond to bona fide third-party acquisition proposals; (b) the right to vote on extraordinary transactions submitted to shareholders for approval; (c) private communications with the Board, management, or counsel that are not publicly disclosed; and (d) the right to sell shares of AGMG common stock in the ordinary course.
(iii) Voting Commitment. Corvus Peak agrees to vote all shares of AGMG common stock beneficially owned by it in favor of the Board's recommended director nominees at the 2025 Annual Meeting of Shareholders.
(iv) Governance Commitments. The Cooperation Agreement shall include the following governance provisions: (a) Trask and Chu shall be eligible for service on any standing committee of the Board, including the Audit Committee, Compensation Committee, and Nominating & Governance Committee, subject to applicable independence requirements; (b) at least one Corvus Peak nominee (Trask or Chu) shall serve on a reconstituted CEO search oversight committee; (c) the Board agrees to undertake a comprehensive review of its committee charters within ninety (90) days of the Cooperation Agreement's effective date; and (d) the Board agrees to engage in a structured strategic review process, with appropriate involvement of all directors, regarding AGMG's long-term strategic direction.
(v) Incumbent Departures. As a condition of the Cooperation Agreement, Tobias Kessler and Hugh Pemberton shall voluntarily resign from the Board, effective upon the execution of the Cooperation Agreement or at the AGM, as determined by the Board.
(vi) Board Size and Vacancy. The Board shall remain at ten (10) members. The seats vacated by Kessler and Pemberton shall be filled by Trask and Chu, respectively. The seat vacated by Marcus Vane may be filled by a mutually agreed independent director or held open pending appointment of a permanent CEO.
(vii) Non-Disparagement. The Cooperation Agreement shall include mutual non-disparagement provisions prohibiting AGMG and its directors, officers, and agents, on the one hand, and Corvus Peak and its partners, employees, and agents, on the other hand, from making any public statements that disparage, denigrate, or cast in an unfavorable light the other party or any of its respective directors, officers, employees, or nominees.
(viii) Joint Press Release. AGMG and Corvus Peak shall issue a joint press release, in a mutually agreed form, announcing the settlement and emphasizing the collaborative path forward for AGMG's governance, strategic direction, and CEO succession process.
(ix) Termination Events. The Cooperation Agreement shall terminate upon: (a) material breach by either party that is not cured within fifteen (15) business days of written notice; (b) a Change of Control of AGMG (as defined); or (c) Corvus Peak reducing its beneficial ownership of AGMG common stock below three percent (3%) of outstanding shares.
Assessment: Optimal Configuration — Recommended. Configuration 2 balances the imperative of meaningful board refreshment against the need to preserve governance process integrity and extract robust protections against future escalation. It aligns with the ISS recommendation, provides Corvus Peak with proportionate representation, removes the most contentious element of the activist slate (Loring), and establishes a governance framework — centered on the standstill, ownership cap, and voting commitment — that constrains Corvus Peak's future conduct for a meaningful period. The 18-month standstill period is sufficient to allow the CEO search to be completed, the new directors to be integrated, and the Company's strategic direction to be established. We strongly recommend this configuration.
D. Configuration 3: Three-Seat Concession (Full Capitulation)
Description. Under this configuration, the Board would agree to seat all three Corvus Peak nominees — Malcolm Trask, Vanessa Loring, and Dr. Raymond Chu. Three incumbent directors would depart voluntarily, most likely Kessler, Pemberton, and Delgado-Ríos (the three weakest-polling incumbents). The post-settlement Board would be reconstituted with three of ten seats held by Corvus Peak nominees.
Corvus Peak Willingness: High. A 3-seat concession is, in substance, the outcome that Corvus Peak is expected to achieve through the proxy vote under our base case scenario. Corvus Peak would readily accept three seats. However — and this is a critical distinction — if Corvus Peak can achieve three seats through the AGM vote, the Fund has limited incentive to agree to a standstill, ownership cap, or voting commitment as a condition of settlement. Why would Corvus Peak accept constraints on its future conduct if it can win outright at the AGM with no constraints at all?
The Board's leverage in a 3-seat negotiation is therefore limited. The primary inducement the Board can offer is the avoidance of the expense, uncertainty, and reputational cost of a contested vote — but given the strongly favorable vote projections for Corvus Peak, these costs are modest relative to the value of unconstrained future optionality. If the Board pursues a 3-seat settlement, it must recognize that the governance protections it can extract (standstill length, ownership cap levels, voting commitment) will be significantly weaker than in a 2-seat configuration.
Board Composition Impact: Significant. The post-settlement board would include three Corvus Peak-aligned directors out of ten (30%), a level of representation substantially disproportionate to Corvus Peak's 8.7% economic stake. More critically, the inclusion of Vanessa Loring — a sitting Managing Director of Corvus Peak — introduces a permanent conduit for activist fund influence over Board deliberations. Every strategic decision, every executive session, every committee discussion would occur with a direct Corvus Peak employee in the room. While other directors may maintain independent judgment, the dynamic of having a fund employee as a colleague inevitably shifts the center of gravity of Board discourse.
This is not to suggest that Loring is unqualified or that her contributions would be without value — she has meaningful operational and governance experience. Rather, the concern is structural: the presence of a fund employee as a director fundamentally alters the Board's independence profile and creates ongoing governance complications regarding conflicts of interest, material non-public information, and the duty of loyalty.
CEO Succession Impact: Substantial Disruption. With Loring on the Board, the CEO succession process would face significant disruption. The three Corvus Peak nominees would likely advocate strongly and perhaps in coordination for Jonathan Hale's candidacy. Nair-Whitfield's position as Interim CEO would become precarious, as she would face a reconstituted Board in which a significant minority of directors favors an alternative candidate with ties to the activist fund.
The integrity of the Special Committee's prior work product — including the interview notes, candidate assessments, and preliminary evaluations compiled during the April 18 interview process — would be compromised. A reconstituted search committee that includes Loring would need to restart the process effectively from scratch, both to satisfy governance best practices and to insulate the Board from allegations that the search was improperly influenced by an activist fund's preferences. We estimate a 4-6 month delay in the CEO search under this scenario, with the risk of a prolonged deadlock if the Nair-Whitfield and Hale factions are unable to reach consensus.
Governance Credibility: Mixed. A 3-seat settlement avoids the spectacle and expense of a contested vote, which has some governance value. However, it may be perceived by the market and by institutional shareholders as management capitulation — a Board that lacked the conviction to defend its nominees and instead conceded wholesale to activist demands. The inclusion of Loring, in particular, undermines the Board's independence narrative. Proxy advisory firms may view the settlement unfavorably if it appears to reward the activist's most aggressive governance position (placing a fund employee on the board) without extracting commensurate protections.
Assessment: Suboptimal. A 3-seat concession concedes too much and extracts too little. It gives Corvus Peak the outcome it would achieve through the vote while offering the Board only modest governance protections in return. The inclusion of Loring is the most objectionable element — it creates ongoing independence concerns and substantially disrupts the CEO succession process. If, despite our recommendation, the Board concludes that a 3-seat settlement is necessary (for example, because Corvus Peak refuses to accept a 2-seat arrangement and the Board wishes to avoid the AGM vote at all costs), the settlement should at minimum include a robust standstill, a tighter ownership cap (10% rather than 12%), and an enhanced voting commitment. We address this fallback scenario in Section IX.C below.
V. Game-Theory Analysis
A. Framework
We model the settlement negotiation between the Board and Corvus Peak as a sequential bargaining game with outside options. Both parties have a "best alternative to a negotiated agreement" (BATNA) — the outcome that would result if negotiations fail and the AGM vote proceeds. The BATNA for each side determines its reservation price (the least favorable settlement terms it would accept), and the relative quality of each party's BATNA determines the distribution of surplus in the negotiation.
The key dynamic of this negotiation is the asymmetry between the parties' BATNAs. Corvus Peak's BATNA (proceeding to the AGM vote) is relatively favorable: the Fund is expected to seat 2-3 nominees with no standstill restrictions, no ownership cap, and no constraints on future conduct. The Board's BATNA is significantly less favorable: it is expected to lose 2-3 incumbent seats without any governance protections. This asymmetry means the Board is the weaker negotiating party and must be willing to make meaningful concessions — including the concession of two board seats — in order to extract the governance protections (standstill, ownership cap, voting commitment) that represent the Board's primary negotiating objective.
The critical variable in the negotiation is the marginal value of the standstill and governance commitments to the Board versus the marginal cost of Vanessa Loring's board seat to Corvus Peak. If the Board values the standstill more than the incremental cost (to Corvus Peak) of withdrawing Loring, then a zone of possible agreement exists for a 2-seat settlement. We believe this condition is satisfied, for the reasons set forth below.
B. Corvus Peak's Incentives
To understand Corvus Peak's likely negotiating behavior, it is necessary to understand the Fund's investment thesis, portfolio context, and strategic objectives.
Portfolio Concentration. Corvus Peak manages approximately $7.2 billion in assets under management. Its AGMG position — approximately $752.8 million at cost — represents approximately 10.5% of the Fund's AUM. This is a highly concentrated, high-conviction position by the standards of activist funds. The significance of the AGMG investment to Corvus Peak's overall portfolio means that the Fund is deeply committed to the position and willing to invest substantial resources (legal fees, proxy solicitation costs, management time) to achieve its objectives. It also means that the Fund is unlikely to exit the position quickly or voluntarily — a factor that amplifies the importance of the standstill and ownership cap for the Board.
Strategic Objective: Value Creation, Not Liquidation. Our analysis of Corvus Peak's proxy materials, public statements, and the tenor of discussions with Blackthorn Howell & Crane (Dominic Sayer) indicates that the Fund's objective is board influence to drive value creation — operational improvements, potential strategic transactions, and CEO change — rather than a short-term liquidation play. Corvus Peak's public messaging emphasizes long-term shareholder value, operational efficiency, and strategic positioning. This framing is consistent with a 2-3 year investment horizon, which in turn suggests that the Fund values board representation and governance influence more than short-term price movements. A settlement that provides meaningful board representation and a role in the CEO succession process is well-aligned with these objectives.
Cost of the Proxy Contest. Proceeding to the AGM vote imposes costs on Corvus Peak, including proxy solicitation fees (Falconer Strauss LLC), legal fees (Blackthorn Howell & Crane LLP), and management distraction. While these costs are modest relative to the size of the Fund's position, they are not trivial — we estimate total proxy contest expenses for Corvus Peak in the range of $8-12 million. A settlement that achieves the Fund's substantive objectives while avoiding these costs has positive expected value for the Fund.
The Value of the Standstill. A standstill is costly for Corvus Peak because it limits the Fund's strategic optionality — its ability to accumulate additional shares, launch future campaigns, or push for a change-of-control transaction. However, the standstill is most costly when the Fund believes it may need these options in the near term. If the settlement provides Corvus Peak with sufficient board representation and governance commitments — including a meaningful role in the CEO succession process — the Fund's need for these reserved options is reduced. In other words, a well-structured 2-seat settlement with robust governance commitments reduces the opportunity cost of the standstill to Corvus Peak, making it more likely that the Fund will accept standstill restrictions.
Corvus Peak's BATNA. Corvus Peak's best alternative to a negotiated agreement is to proceed to the AGM vote. Under the base case scenario, this results in 3 nominees seated, no standstill, no ownership cap, and complete freedom to continue accumulating shares and pursuing future campaigns. This is a strong BATNA. However, it is not riskless: there is a 20-25% probability (under Scenario 1) that only 2 of 3 nominees are elected, and the reputational cost of a partially failed proxy campaign is nontrivial for a fund that relies on its track record to raise capital from limited partners.
C. The Board's Incentives
Primary Objective: CEO Succession Integrity. The Board's overriding priority in these negotiations should be the preservation of a credible, independent CEO succession process. The Company is currently led by an Interim CEO and has been without a permanent chief executive since March 8. Every week that passes without resolution of the CEO question compounds strategic uncertainty and organizational instability. A settlement that enables the CEO search to move forward — with appropriate representation from the new directors — serves the Board's (and the Company's) most important governance objective.
Secondary Objective: Standstill Protection. The Board's second-order objective is to extract a standstill that prevents Corvus Peak from escalating its campaign — through further share accumulation, additional proxy contests, or a push for a change-of-control transaction — for a sufficient period to allow the Board and management to implement the Company's strategic plan. Without a standstill, the Board is in a perpetual state of governance uncertainty, with Corvus Peak free to launch new campaigns at any time and to accumulate toward a potential control position.
The Board's BATNA. The Board's best alternative to a negotiated agreement is to proceed to the AGM vote and accept the result. Under the base case, this means losing 3 incumbent seats, with Corvus Peak's nominees — including Loring — joining the Board without any cooperation agreement, standstill, ownership cap, or governance commitments. New directors arrive as victors of a contested election, with no obligation to cooperate with continuing incumbents,