PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 787 Seventh Avenue New York, NY 10019
July 1, 2024
MEMORANDUM
TO: The Board of Directors of Aurelius Global Media Group PLC 14 Sceptre Row London EC2V 7QN United Kingdom
Attention: Dame Elspeth Greenvale, Independent Non-Executive Chair (Transitional)
FROM: Calderwood & Harkness LLP
Nathaniel Bower, Responsible Partner Colette Whitman, Billing Partner Audrey Zhou, Lead Associate Brendan Walsh, Working Associate
RE: Transition Memorandum — Summary of Engagement Work Product Matter No. 1017-00002
PRIVILEGE NOTICE: This memorandum is protected by attorney-client privilege and the work product doctrine. It is prepared in connection with Calderwood & Harkness LLP's representation of the Board of Directors of Aurelius Global Media Group PLC and is intended solely for the Board's use in transitioning matters to successor counsel. Any disclosure, distribution, or reproduction of this memorandum, in whole or in part, to any person or entity other than the Board or its duly authorized successor counsel is prohibited without the prior written consent of Calderwood & Harkness LLP and the Board. Recipients are advised that disclosure to third parties may result in a waiver of applicable privileges.
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I. Introduction and Purpose
This memorandum is prepared in connection with the termination of Calderwood & Harkness LLP's ("C&H" or the "Firm") engagement as independent governance counsel to the Board of Directors (the "Board") of Aurelius Global Media Group PLC ("AGMG" or the "Company"), effective July 8, 2024, as notified by letter from Vanessa Loring, Chair of the Nominating & Governance Committee, dated June 21, 2024 (the "Termination Notice"). C&H acknowledges receipt of the Termination Notice and has taken all steps necessary to effect an orderly transition of matters to successor counsel.
The engagement was opened on March 12, 2024, pursuant to an engagement letter of the same date executed by Dame Elspeth Greenvale on behalf of the Board and by the undersigned Nathaniel Bower on behalf of the Firm. On April 22, 2024, the engagement letter was amended to expand the scope of the Firm's retention to include coordination with Stonebridge Crane & Co., the Company's financial advisor, in connection with a Board-authorized review of strategic alternatives. The amended engagement letter was executed by Dame Greenvale and countersigned by the undersigned Nathaniel Bower.
We understand that the reconstituted Board has elected to engage successor governance counsel. Per the Company's public filings dated July 15, 2024, the Board has engaged Blackthorn Howell & Crane LLP ("BHC"), with Dominic Sayer as lead partner, as new board governance counsel. We note for the record that BHC previously served as counsel to Corvus Peak Capital Partners LP in the activist campaign and proxy contest that is the subject of much of this memorandum. We address considerations arising from BHC's prior representation in Section IX below.
The purpose of this memorandum is to provide the Board with a comprehensive catalog of all advice rendered, work product delivered, pending matters, and recommendations for successor counsel to ensure continuity and preservation of the Board's legal position during and following the transition. This memorandum is intended to serve as a master reference document that will enable successor counsel to assume responsibility for the Board's outstanding legal matters with full awareness of the factual background, the advice previously rendered, the strategic posture adopted, and the issues that remain unresolved.
This memorandum should be read in conjunction with three companion documents, each delivered contemporaneously herewith and each separately enclosed:
• Appendix A: Index of Work Product Delivered to Client — a complete chronological listing of every deliverable prepared by C&H during the engagement, with date, description, author, and delivery method.
• Appendix B: Privilege Log — Materials Withheld from § 220 Production — a detailed log of all documents withheld from production in response to the Corvus Peak Capital Partners LP books-and-records demand under Section 220 of the Delaware General Corporation Law ("DGCL"), with privilege basis asserted for each entry.
• Appendix C: Status Memorandum — Open and Unresolved Issues at Termination — a concise summary of all matters requiring successor counsel attention, with recommended next steps and applicable deadlines, designed for immediate operational use.
The balance of this memorandum is organized as follows: Section II provides background on the Company and the engagement; Section III sets forth a detailed chronological summary of the advice rendered and key events during the engagement; Section IV summarizes the key substantive advice provided on the principal issues; Section V identifies open and unresolved matters requiring successor counsel attention; Section VI catalogs all work product delivered; Section VII addresses privilege and confidentiality considerations; Section VIII provides a consolidated reference table of key contacts and advisor relationships; and Section IX sets forth our concluding observations and recommendations.
II. Background and Engagement Overview
A. The Client and Corporate Structure
Aurelius Global Media Group PLC is a Delaware-incorporated public limited company registered as an overseas company in England and Wales under the Companies Act 2006. The Company maintains its principal executive offices and headquarters at 14 Sceptre Row, London EC2V 7QN, United Kingdom. Its registered agent in the State of Delaware is Pinnacle Corporate Services Inc., 1209 Orange Street, Wilmington, Delaware 19801.
The Company is dual-listed on the New York Stock Exchange (ticker symbol: AGMG) and the London Stock Exchange Main Market, premium segment of the Official List of the Financial Conduct Authority (ticker symbol: AGMG.L). This dual listing subjects the Company to the regulatory requirements of both the U.S. Securities and Exchange Commission ("SEC") and the United Kingdom's Financial Conduct Authority ("FCA"), including the FCA's Disclosure Guidance and Transparency Rules ("DTR"), a consideration that is addressed in detail in Section IV.G below and that will require ongoing attention by successor counsel.
As of March 1, 2024, the Company's market capitalization was approximately £6.82 billion (approximately $8.65 billion at the then-prevailing exchange rate of $1.2683 per pound sterling). For the fiscal year ended December 31, 2023, the Company reported total revenue of $4.37 billion and EBITDA of $812 million, reflecting an EBITDA margin of approximately 18.6%. The Company employs approximately 23,400 individuals worldwide.
The Company operates through four principal business segments:
As of the date of the engagement, there were 412,600,000 shares of common stock of the Company issued and outstanding.
The Company's Certificate of Incorporation was originally filed with the Secretary of State of the State of Delaware on September 14, 2009 (Delaware File No. 4827193; Employer Identification Number 26-4831097). The Company's Restated Certificate of Incorporation and Amended & Restated Bylaws became effective on March 22, 2022, and are the governing charter documents as of the date of this memorandum. The internal affairs of the Company are governed by the Delaware General Corporation Law.
B. Scope of Engagement
C&H was retained as independent governance counsel to the Board, a role that was deliberately distinct from that of Ashworth Velmoran LLP ("AK"), the Company's standing outside counsel to management. AK has served as the Company's primary outside legal advisor since 2015, under the direction of Martin Cho as lead partner. At the time of C&H's engagement, certain members of the Board and the activist shareholder Corvus Peak Capital Partners LP ("Corvus Peak") viewed AK as "management-aligned," and the Board determined that the retention of independent governance counsel was necessary and advisable to ensure that the Board received objective legal advice on governance matters, fiduciary duties, and the activist response that was free from any perception of management influence.
Original Scope. As defined in the March 12, 2024 engagement letter, C&H's retention encompassed two principal workstreams:
(1) Advising the Board on fiduciary duties in connection with the CEO succession process following the resignation of Marcus Vane; and
(2) Advising the Board on the Company's response to the activist campaign by Corvus Peak Capital Partners LP, including the anticipated proxy contest.
Expanded Scope. On April 22, 2024, the engagement letter was amended to expand the scope of C&H's retention to include a third workstream: coordination with Stonebridge Crane & Co. (the Company's financial advisor, led by Anil Kapoor-Mehta) on the strategic alternatives review authorized by the Board on the same date. This expansion was formalized in a written amendment executed by both parties.
Fee Arrangement. The engagement was structured on an hourly fee basis, with a $75,000 evergreen retainer replenished on a quarterly basis. The applicable billing rates for each timekeeper were as follows:
Total Fees and Expenses. The following table summarizes the total fees billed and expenses incurred during the engagement:
The outstanding balance of $312,817.00 reflects the final invoice dated July 8, 2024, which covers services rendered and expenses incurred from the date of the most recent prior invoice through the termination date. Payment is due in accordance with the terms of the engagement letter (net 30 days).
C. Precipitating Events
The circumstances that gave rise to C&H's engagement can be summarized as follows:
January 18, 2024: Corvus Peak Capital Partners LP, a Delaware limited partnership (general partner: Corvus Peak Management LLC; founding partner and Chief Investment Officer: Damien Solberg; portfolio manager responsible for the AGMG campaign: Erin Nakamura; approximate assets under management: $7.2 billion; Employer Identification Number: 83-2196504; principal office: 590 Lexington Avenue, 34th Floor, New York, NY 10022) filed an initial Schedule 13D with the SEC disclosing an ownership stake of approximately 6.1% of the Company's outstanding shares. The filing indicated that Corvus Peak had accumulated the position over the preceding several months and that it intended to engage in discussions with the Board regarding the Company's strategic direction and corporate governance.
February 12, 2024: Corvus Peak delivered a demand letter to the Board seeking three principal actions: (i) the appointment of two new independent directors acceptable to Corvus Peak; (ii) the initiation of a comprehensive strategic review of the Company's business and operations; and (iii) the development and public announcement of a formal CEO succession plan.
February 26, 2024: Corvus Peak filed an amended Schedule 13D disclosing an increase in its ownership stake to approximately 8.7% of the Company's outstanding shares, or approximately 35,896,200 shares, at an average cost basis of approximately $20.97 per share, representing a total investment of approximately $752.8 million. In connection with the amended filing, Corvus Peak publicly announced its intent to nominate three director candidates for election at the Company's 2024 Annual General Meeting ("AGM").
March 1, 2024: Corvus Peak submitted formal director nominations for the 2024 AGM. The three nominees were:
• Malcolm Trask (age 58) — Former Chief Executive Officer of Archway Digital Holdings Inc., a publicly traded digital media company. Mr. Trask served as CEO of Archway Digital from 2012 through 2021 and was credited with overseeing the company's transformation from a legacy print media business into a digital-first platform.
• Vanessa Loring (age 44) — Managing Director at Corvus Peak Capital Partners LP, where she has been responsible for the firm's activist investment strategies since 2019. Ms. Loring previously held positions at two other activist funds and in investment banking.
• Dr. Raymond Chu (age 61) — Former President of Helix Media Networks Inc., a cable and satellite television provider. Dr. Chu held various executive and operational roles at Helix Media from 2004 through 2020 and holds a doctoral degree in electrical engineering from the Massachusetts Institute of Technology.
The nominations were submitted within the advance notice window prescribed by Article II, Section 2.12 of the Company's Amended & Restated Bylaws, which required notice of director nominations for the 2024 AGM to be delivered no earlier than February 10, 2024 and no later than March 11, 2024. C&H subsequently confirmed the timeliness of the nominations in a separate compliance review memorandum.
March 8, 2024: Marcus Vane (age 59), who had served as the Company's Chief Executive Officer since 2016, resigned from his position effective immediately, citing personal and family considerations. Mr. Vane's resignation triggered severance obligations under his employment agreement totaling $14.8 million, calculated as follows:
• 2× base salary: 2 × $2,400,000 = $4,800,000
• 2× target bonus: 2 × $2,400,000 = $4,800,000
• Accelerated equity awards: $5,200,000
• Total severance: $14,800,000
Mr. Vane's employment agreement also includes an 18-month post-termination non-competition covenant, which expires on September 8, 2025. The Board designated Priya Nair-Whitfield, the Company's Chief Operating Officer, as Interim Chief Executive Officer, effective immediately. The intersection of the CEO vacancy and the ongoing activist campaign created the urgent governance circumstances that prompted the Board to retain C&H.
March 12, 2024: C&H's engagement was formally opened.
III. Chronological Summary of Advice Rendered and Key Events
The following section provides a detailed chronological account of the principal advice rendered by C&H and the key events that occurred during the engagement. This account is organized into five phases corresponding to the natural progression of the matters. A complete chronological index of every deliverable is provided in the companion Index of Work Product (Appendix A).
A. Phase 1: Initial Assessment and Framework (March 12 – March 31, 2024)
March 12, 2024. The engagement letter was executed by Dame Elspeth Greenvale on behalf of the Board and by Nathaniel Bower on behalf of the Firm. The engagement was formally opened under Matter No. 1017-00002. A conflict check had been completed on March 11, 2024, confirming no conflicts of interest requiring disclosure or waiver.
March 13, 2024. A cover letter was transmitted from Nathaniel Bower to Dame Elspeth Greenvale outlining the Firm's preliminary assessment of workstream priorities. The letter identified four immediate areas of focus: (i) review of the advance notice nominations for compliance with the Bylaws; (ii) development of a fiduciary duties framework for the Board's decision-making during the CEO succession process and the activist campaign; (iii) design of a governance-compliant CEO search process; and (iv) formulation of an activist response strategy. An internal matter budget and staffing plan were prepared contemporaneously to ensure appropriate resource allocation across these workstreams.
March 14, 2024. The initial retainer of $75,000 was received from the Company. On the same date, a comprehensive information and document request letter was sent to Nadine Khalil, the Company's General Counsel and Corporate Secretary, requesting production of the following materials: the Company's Certificate of Incorporation (as restated), Amended & Restated Bylaws, Board minutes for the preceding three fiscal years, charters for all standing Board committees, the Marcus Vane employment agreement (including all amendments and side letters), all correspondence received from Corvus Peak Capital Partners LP, and copies of all Schedule 13D and 13D/A filings made by Corvus Peak. Additionally, an annotated summary of the AGMG Amended & Restated Bylaws was delivered to the Board. The summary addressed, among other topics, the advance notice requirements for director nominations, the forum selection clause designating the Court of Chancery of the State of Delaware as the exclusive forum for intra-corporate disputes, the majority/plurality voting trigger in the context of contested elections, the provisions governing the formation and authority of Board committees, and the indemnification and advancement provisions applicable to directors and officers.
March 15, 2024. The Board, upon the recommendation of the Nominating & Governance Committee, authorized the engagement of Hargrove Tate Partners LLC ("Hargrove Tate") as the executive search firm for the CEO succession process. Hargrove Tate is a nationally recognized executive search firm with offices at 200 Clarendon Street, 48th Floor, Boston, Massachusetts 02116, with Christine Aldridge serving as lead partner for the engagement. The fee arrangement provided for a flat fee of $750,000, payable in three installments of $250,000 each: the first upon engagement, the second upon delivery of a candidate slate, and the third upon placement completion. The first installment of $250,000 was paid upon engagement. The second and third installments remain outstanding as of the date of this memorandum. C&H prepared the Board resolution authorizing the engagement.
March 17, 2024. C&H delivered a memorandum on Special Committee charter best practices. The memorandum recommended that the Board form a three-member Special Committee composed exclusively of independent directors, with sole authority over both the CEO search process and the Board's response to the Corvus Peak activist campaign. The memorandum further recommended that the Special Committee be granted express authority to retain and direct independent legal counsel and financial advisors, to access all Company information relevant to its mandate, and to report directly to the full Board at regular intervals. Precedent committee charters from comparable contested situations were analyzed and a model charter was proposed.
March 18, 2024. Acting on C&H's recommendation, the Board formed the Special Committee with the following membership:
• Tobias Kessler (Chair)
• Lucinda Farrow-Grant
• Dr. Anwen Llewellyn
C&H prepared the draft charter for the Special Committee, which was reviewed by the Special Committee members and adopted by formal resolution of the Board. The executed charter was signed by Dame Greenvale and Nadine Khalil and filed with the Company's corporate records. C&H also prepared and delivered the Board resolutions forming the Special Committee and defining its authority and mandate.
March 19, 2024. A coordination protocol letter was sent from Nathaniel Bower to Martin Cho at Ashworth Velmoran LLP. The letter delineated the respective roles of C&H and AK during the pendency of the CEO succession process and the activist campaign. Specifically, the protocol established that C&H would serve as the Board's independent governance counsel with primary responsibility for advice on fiduciary duties, the activist response, and governance process matters, while AK would continue in its role as the Company's standing outside counsel to management, responsible for routine corporate matters, regulatory filings, securities compliance, and general operational legal support. The protocol also established information-sharing procedures and joint meeting protocols to minimize duplication of effort and ensure consistent advice.
March 20, 2024. C&H delivered a detailed memorandum entitled "CEO Search Process — Recommended Governance Protocols." The memorandum provided the Special Committee with a step-by-step process for conducting the CEO search in a manner consistent with the Board's fiduciary obligations. Topics addressed included: documentation requirements for each stage of the search; interview protocols and guidelines for Board member participation; standardized evaluation criteria and scoring rubrics; the role and responsibilities of Hargrove Tate as search advisor; a recommended cadence for Board reporting by the Special Committee; and procedures for handling confidential candidate information, including limitations on disclosure to avoid insider trading risks.
March 22, 2024. C&H delivered a memorandum entitled "Special Committee Process Recommendations for CEO Search," which supplemented the March 20 memorandum with additional guidance on process integrity, including the importance of maintaining a contemporaneous written record of all deliberations, the handling of unsolicited expressions of interest in the CEO position, and protocols for managing media inquiries regarding the search.
On the same date, Corvus Peak served a books-and-records demand pursuant to Section 220 of the DGCL seeking production of materials relating to the CEO search committee, including committee minutes, communications with search firms, and evaluation materials. This demand is discussed in detail in Section IV.C below.
March 25, 2024. C&H delivered the initial fiduciary duties memorandum, a comprehensive analysis of the Board's duties of care and loyalty under Delaware law as applied to the CEO succession process and the activist response. The memorandum addressed the standards of judicial review applicable to Board conduct in these circumstances, including the business judgment rule, the enhanced scrutiny standards articulated in Revlon, Inc. v. MacAndrews & Forbaci Holdings, Inc., 506 A.2d 173 (Del. 1986), and Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985), and the heightened scrutiny applicable to actions taken during contested elections. The memorandum concluded with specific procedural recommendations designed to ensure that the Board's actions would be reviewed under the most deferential standard of review available.
March 26, 2024. C&H delivered a memorandum analyzing the Corvus Peak § 220 demand and recommending a response strategy. The memorandum concluded that, while Corvus Peak had articulated a proper purpose sufficient to support a books-and-records demand under the Delaware statute, the scope of the demand was overbroad in that it sought materials protected by the attorney-client privilege and the work product doctrine, including privileged communications between the Board, the Special Committee, and the Company's legal advisors relating to the CEO search process. The memorandum recommended that the Company respond by objecting to the breadth of the demand, asserting privilege over specified categories of documents, and offering a narrowed production of non-privileged materials.
March 28, 2024. C&H delivered a memorandum entitled "Interim CEO Designation — Fiduciary Considerations." The memorandum analyzed whether the Board's designation of Priya Nair-Whitfield as Interim CEO could be characterized by Corvus Peak or its nominees as creating an implied precommitment to a particular outcome in the CEO search process. The analysis examined relevant Delaware precedent on the distinction between interim or caretaker designations and permanent appointments, the Board's articulated rationale for the designation, and the potential for Corvus Peak to use the designation as a basis for challenging the integrity of the search process. C&H concluded that the designation was defensible as a necessary business continuity measure, provided that the Board implemented specific procedural safeguards to ensure that the CEO search was conducted on a genuinely open-ended basis. These safeguards included: clear designation of the Interim CEO title as temporary, with an express statement that Nair-Whitfield's continuation in the role was subject to the outcome of the search; conduct of the search by the independent Special Committee with its own advisors; and maintenance of a contemporaneous record demonstrating that internal and external candidates were evaluated on an equal basis. The memorandum specifically anticipated that Corvus Peak would seek to characterize the Interim CEO designation as a predetermined outcome — a prediction that proved accurate when Corvus Peak published its April 15 open letter making precisely this criticism.
B. Phase 2: Proxy Contest Preparation and Defensive Measures (April 1 – April 30, 2024)
April 1, 2024. Corvus Peak filed a preliminary proxy statement with the SEC seeking the election of its three director nominees — Malcolm Trask, Vanessa Loring, and Dr. Raymond Chu — at the Company's 2024 Annual General Meeting. Corvus Peak was represented in the proxy contest by Blackthorn Howell & Crane LLP (lead partner: Dominic Sayer; lead associate: Kathleen Bryce; office: 1301 Avenue of the Americas, New York, NY 10019). Corvus Peak's proxy solicitor was Falconer Strauss LLC (lead contact: Derek Huang; office: 375 Park Avenue, Suite 3500, New York, NY 10152).
April 2, 2024. C&H prepared a draft letter for the signature of Nadine Khalil, in her capacity as General Counsel and Corporate Secretary of the Company, responding to Corvus Peak's § 220 books-and-records demand. The letter was addressed to Dominic Sayer at BHC and objected to the scope of the demand on privilege grounds while offering a narrowed production of non-privileged materials. Specifically, the letter offered to produce non-privileged factual documents relating to the CEO search process, including publicly filed materials and non-privileged committee organizational documents, while withholding privileged attorney-client communications, work product, and deliberative materials relating to the Board's and the Special Committee's evaluation of CEO candidates.
April 3, 2024. C&H delivered a memorandum entitled "UK Regulatory Considerations — FCA/DTR Overlay." This memorandum analyzed the disclosure obligations arising under the FCA's Disclosure Guidance and Transparency Rules, specifically DTR 5, which imposes major shareholding notification obligations on issuers whose shares are admitted to trading on a regulated market within the European Economic Area or, following Brexit, on a UK-regulated market. Given AGMG's admission to the premium segment of the Official List and trading on the London Stock Exchange Main Market (ticker: AGMG.L), the Company is subject to DTR 5 notification obligations. The memorandum discussed the specific shareholding thresholds that trigger notification requirements, the applicable notification timeframes, the interaction between the US proxy disclosure rules (including Schedule 13D/13G reporting) and the UK DTR 5 regime, and the practical implications for the Company's compliance monitoring given its dual-listed status. The memorandum recommended that the Company maintain a cross-border monitoring system to ensure that changes in significant shareholdings were identified and reported in compliance with both US and UK requirements.
April 4, 2024. The privilege log protocol was communicated by email from Colette Whitman to Nadine Khalil. The protocol established the format and content requirements for the privilege log to be maintained in connection with documents withheld from the § 220 production, including the description standards, privilege basis coding, and review procedures.
April 5, 2024. AGMG filed its preliminary proxy statement with the SEC recommending the re-election of the Company's incumbent director nominees. On the same date, C&H delivered a memorandum entitled "Evaluation Framework for Internal vs. External CEO Candidates." The memorandum proposed a standardized scoring rubric for use by the Special Committee in evaluating CEO candidates, covering the following dimensions: strategic vision and alignment with the Company's long-term plan; operational experience in media, entertainment, and digital content businesses; cultural fit and leadership style; industry relationships and reputation; and independence from activist influence or other external constituencies that could compromise the candidate's ability to serve the interests of all shareholders. The framework was specifically designed to facilitate a fair and defensible comparison between Priya Nair-Whitfield, as the internal candidate and incumbent Interim CEO, and external candidates including Jonathan Hale.
April 8, 2024. C&H delivered a comprehensive memorandum entitled "Poison Pill / Shareholder Rights Plan Analysis." The memorandum analyzed whether the Board should consider adopting a shareholder rights plan (commonly referred to as a "poison pill") in response to Corvus Peak's 8.7% ownership stake and its activist campaign. The analysis applied the foundational framework established in Moran v. Household International, Inc., 500 A.2d 1346 (Del. 1985), which upheld the validity of shareholder rights plans as a defensive measure, and the proportionality standards articulated in Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985), and Unitrin, Inc. v. American General Corp., 651 A.2d 1361 (Del. 1995), which require that defensive measures be proportionate to the threat posed.
C&H concluded that adoption of a rights plan at the 8.7% stake level would likely be viewed by a reviewing court as a disproportionate response under the Unocal/Unitrin framework. The memorandum identified several factors supporting this conclusion: Corvus Peak's stake did not approach a level that would enable it to exercise control or even significant negative control over the Company; the activist's campaign was focused on board composition and governance reforms rather than a creeping acquisition of control; the adoption of a pill at this stage would be perceived as an entrenchment measure; and, critically, adoption of a rights plan would almost certainly result in negative recommendations from Cobalt Ridge Solutions ("ISS") and Westmark Solutions ("Tarrant Partners LLC"), which would materially damage the Company's position in the proxy contest. The memorandum recommended that the Board decline to adopt a shareholder rights plan.
April 9, 2024. A pre-meeting email was sent from Nathaniel Bower to Dame Elspeth Greenvale summarizing the key points of the poison pill analysis and the Firm's recommendation against adoption, in anticipation of the Board's consideration of the issue at its April 10 meeting.
April 10, 2024. The Board adopted a resolution declining to adopt a shareholder rights plan. The resolution incorporated C&H's analysis and expressly noted that the Board had considered the full range of defensive measures and concluded that a rights plan was not warranted under the circumstances. C&H prepared and delivered the draft resolution memorializing this decision.
April 12, 2024. C&H delivered a comprehensive memorandum entitled "Defensive Measures Available to the Board." The memorandum surveyed the full range of permissible defensive responses available to the Board under Delaware law and analyzed each under the Unocal proportionality framework. The defensive measures analyzed included:
(i) amendments to the Company's Amended & Restated Bylaws, including enhanced advance notice provisions and proxy access modifications;
(ii) strict enforcement of the existing advance notice provisions;
(iii) a "white squire" strategy involving the placement of shares with a friendly investor;
(iv) a public announcement of the strategic alternatives review as a demonstration of the Board's responsiveness to shareholder concerns;
(v) enhanced shareholder engagement, including direct outreach to the Company's largest institutional shareholders;
(vi) structural governance reforms, such as the declassification of the Board or the adoption of majority voting in uncontested elections, designed to preempt Corvus Peak's governance criticisms; and
(vii) acceleration of the CEO search process to demonstrate forward progress.
For each measure, the memorandum analyzed the likely legal vulnerability under Unocal, the probable reaction of proxy advisory firms, and the practical effectiveness in the context of the pending contest. The memorandum's overarching recommendation was that the Board should prioritize engagement-based responses — enhanced shareholder engagement and a credible strategic alternatives review — over structural defensive measures, which carried greater legal risk and were likely to be counterproductive with institutional shareholders and proxy advisory firms.
April 15, 2024. Corvus Peak published an open letter to the Board and to AGMG shareholders criticizing the Board's designation of Priya Nair-Whitfield as Interim CEO as a "predetermined outcome" that undermined the integrity of the CEO search process. The letter characterized the interim designation as evidence that the Board had already made its succession decision and was conducting the search as a "sham" to justify a foregone conclusion. This development was consistent with the risk that C&H had identified and flagged in its March 28 memorandum on the Interim CEO designation, and validated the procedural safeguards C&H had recommended at that time.
April 18, 2024. The Special Committee conducted formal interviews of five external CEO candidates, as arranged by Hargrove Tate Partners LLC. Among the candidates interviewed was Jonathan Hale (age 56), who had served as Chairman and Chief Executive Officer of Meridian Studios International Inc. from 2014 through 2022, during which period he oversaw Meridian's $3.1 billion acquisition by Zenith Consolidated Entertainment Corp. Prior to Meridian Studios, Mr. Hale served as President of Broadcast & Cable at Solaris Media Group Inc. Mr. Hale was widely regarded as one of the most experienced and capable executives in the media and entertainment industry, and his candidacy was viewed favorably by certain members of the Special Committee following the interview.
April 19, 2024. C&H delivered a memorandum entitled "Conflicts of Interest — Jonathan Hale and Corvus Peak." The memorandum analyzed a pre-existing relationship between Mr. Hale and Damien Solberg, the founding partner and Chief Investment Officer of Corvus Peak. Specifically, the memorandum identified that Mr. Hale and Mr. Solberg had served concurrently on the board of directors of Keystone Digital Ventures Ltd., a private technology investment company, and had maintained a personal and professional relationship dating back several years. The memorandum assessed Mr. Hale's independence under both the NYSE Listed Company Manual's independence standards (Section 303A) and Delaware common law standards of director independence. The memorandum concluded that the Hale-Solberg relationship raised material concerns about Mr. Hale's ability to serve as a truly independent external candidate and recommended that the Special Committee treat the conflict as a significant factor in any evaluation of his candidacy. On the same date, an email from Nathaniel Bower to the Special Committee members — Tobias Kessler, Lucinda Farrow-Grant, and Dr. Anwen Llewellyn — was transmitted, flagging the conflict and recommending enhanced due diligence before any further advancement of Mr. Hale's candidacy.
April 20, 2024. C&H delivered a memorandum entitled "Special Committee Update — Candidate Interview Summary and Observations." The memorandum summarized the April 18 candidate interviews, provided preliminary assessments of each candidate's qualifications and suitability, and reiterated the conflict-of-interest concerns relating to Jonathan Hale.
April 21, 2024. C&H reviewed and provided a detailed mark-up of the proposed engagement letter between AGMG and Stonebridge Crane & Co. for financial advisory services in connection with the strategic alternatives review. C&H's commentary addressed the following provisions of the proposed engagement: the fee structure (a $250,000 monthly retainer plus a transaction fee of 0.25% of enterprise value upon consummation of a change-of-control transaction); the scope of indemnification obligations in favor of Stonebridge; the scope of services to be provided; fiduciary-out provisions permitting the Board to terminate the engagement without penalty in certain circumstances; and the tail period during which the transaction fee would remain payable following termination of the engagement. C&H's mark-up recommended several modifications to the proposed terms, including a narrower indemnification provision and a clearer definition of the triggering events for the transaction fee.
April 22, 2024. The Board adopted a resolution engaging Stonebridge Crane & Co. (383 Madison Avenue, New York, NY 10179; lead banker: Anil Kapoor-Mehta) as the Company's financial advisor to evaluate strategic alternatives. On the same date, the C&H engagement letter was amended to expand the scope of the Firm's retention to include coordination with Stonebridge on the strategic alternatives review. C&H prepared and delivered the Board resolution authorizing the Stonebridge engagement.
April 23, 2024. An email from Nathaniel Bower to Anil Kapoor-Mehta at Stonebridge Crane & Co. established the working relationship and coordination protocol between C&H and Stonebridge for the strategic alternatives review, including information-sharing procedures, meeting cadence, and joint deliverable protocols.
April 24, 2024. C&H delivered a memorandum entitled "Legal Framework for Evaluating Strategic Alternatives." The memorandum analyzed the Board's fiduciary duties in the context of a strategic alternatives review, with particular focus on the Revlon duties that could be triggered if the review resulted in a sale or change-of-control transaction, the requirements for conducting an adequate market check, and the interaction between the strategic alternatives review and the pending CEO search process. The memorandum noted that the concurrent conduct of a CEO search and a strategic alternatives review created potential informational conflicts and recommended protocols to manage those conflicts.
April 25, 2024. An internal research assignment was transmitted from Audrey Zhou to Brendan Walsh directing research on the Blasius Industries, Inc. v. Atlas Corp., 564 A.2d 651 (Del. Ch. 1988), enhanced scrutiny standard applicable to board actions taken with the primary purpose of impeding the exercise of the shareholder franchise. The research was intended to inform the Firm's analysis of the Board's defensive measures and proxy contest conduct.
April 26, 2024. C&H delivered a memorandum entitled "Confidentiality and Information Barrier Protocols — Strategic Alternatives Review." The memorandum recommended the implementation of formal wall procedures to prevent premature disclosure of information between the strategic alternatives review and the CEO search process. Specifically, the memorandum recommended that separate information repositories be maintained for each workstream, that access to strategic alternatives materials be limited to a defined group of Board members and advisors, and that the CEO search committee operate independently of any strategic alternatives deliberations to avoid tainting either process.
April 28, 2024. C&H delivered two significant memoranda on the same date. The first, entitled "Proxy Contest Defense Strategies," was a comprehensive analysis of the Company's prospects in the proxy contest and recommended messaging and outreach strategies. The memorandum included a detailed analysis of the Company's shareholder base composition, which is set forth in the following table:
The memorandum analyzed the voting tendencies of each significant holder, identified Windermere Pension Trust as a potential swing voter whose position could be determinative, flagged the risk of ISS and Tarrant Partners LLC supporting one or more Corvus Peak nominees, and modeled projected voting outcomes under multiple scenarios. The memorandum included recommendations for messaging, shareholder outreach priorities, and tactical timing of disclosures.
The second memorandum delivered on April 28, entitled "Fiduciary Obligations of Directors During a Proxy Contest," analyzed the Board's obligations regarding the use of corporate resources in connection with proxy solicitation, including permissible and impermissible expenditures, the application of the Blasius enhanced scrutiny standard to board actions taken during a contested election, and the limitations on incumbent campaign conduct designed to ensure that the Board did not take actions with the primary purpose of interfering with the shareholder franchise.
C. Phase 3: Definitive Proxy, ISS/Tarrant Partners LLC, and Settlement Analysis (May 1 – June 1, 2024)
May 1, 2024. C&H delivered a memorandum entitled "Shareholder Base Analysis and Vote Projection." The memorandum provided a detailed analysis of the voting dynamics applicable to the contested election, based on the total of 412,600,000 shares outstanding. The analysis modeled institutional holder voting tendencies using historical voting data and governance policy positions, and projected vote outcomes under multiple scenarios including (a) ISS and Tarrant Partners LLC both recommending the management slate, (b) ISS recommending a partial Corvus Peak slate and Tarrant Partners LLC recommending the full management slate, (c) both advisory firms recommending partial or full Corvus Peak slates, and (d) one or more major institutional holders publicly supporting Corvus Peak. The memorandum identified Windermere Pension Trust as the most likely swing voter and recommended that the Company's proxy solicitor, Citrine Advisory Group Inc. (lead contact: Sandra Eriksson; 110 Wall Street, Suite 2200, New York, NY 10005; engaged by the Company on February 28, 2024), prioritize direct engagement with Windermere.
May 3, 2024. AGMG filed its definitive proxy statement with the SEC for the Annual General Meeting scheduled for June 7, 2024.
May 6, 2024. Corvus Peak filed its definitive proxy statement with the SEC.
May 8, 2024. C&H delivered a memorandum entitled "ISS and Tarrant Partners LLC Policy Framework — Implications for AGMG." The memorandum provided a pre-recommendation analysis of the proxy advisory firm policies most likely to be applied in evaluating the contested election, including policies relating to board refreshment, CEO succession planning, responsiveness to shareholder concerns, and the comparative qualifications of incumbent and insurgent nominees. The memorandum assessed the probability of various recommendation outcomes and recommended preemptive steps the Board could take to mitigate the risk of adverse advisory firm recommendations.
May 10, 2024. Corvus Peak proposed a settlement of the proxy contest on the following terms: (i) two of the three Corvus Peak nominees (Trask and Loring) would be immediately seated on the Board; (ii) the CEO search would be paused pending reconstitution of the Board with the new members. The Board, upon the recommendation of the Special Committee and after consultation with C&H, rejected the proposal. C&H prepared draft Board resolutions authorizing the rejection of the settlement proposal, dated May 12, 2024, together with talking points for the Company's public statement explaining the Board's rationale for the rejection.
May 17, 2024. Two significant developments occurred on this date. First, Windermere Pension Trust, previously identified by C&H as a potential swing voter, publicly announced its support for the full Corvus Peak slate. Second, ISS issued its recommendation report advising shareholders to elect two of the three Corvus Peak nominees — specifically, Malcolm Trask and Dr. Raymond Chu — at the Annual General Meeting. The ISS recommendation was based on ISS's assessment that the Company had been insufficiently responsive to shareholder concerns regarding CEO succession and board refreshment, and that two of the three Corvus Peak nominees possessed qualifications and experience that would strengthen the Board.
Nathaniel Bower transmitted a rapid-response email to Dame Greenvale analyzing the ISS recommendation immediately upon its release. The email assessed the likely impact of the ISS recommendation on the projected vote outcome and recommended that the Board consider accelerating settlement discussions with Corvus Peak, given the materially deteriorating vote outlook.
May 19, 2024. C&H delivered a memorandum analyzing the ISS recommendation in detail, including its strategic implications for the proxy contest and revised vote projections incorporating the ISS recommendation and the Windermere Pension Trust's public support for Corvus Peak.
May 22, 2024. Tarrant Partners LLC issued its recommendation report advising shareholders to elect all three Corvus Peak nominees at the Annual General Meeting. The Tarrant Partners LLC recommendation was more aggressive than the ISS recommendation in that it supported the full dissident slate, reflecting Tarrant Partners LLC's assessment that comprehensive board renewal was warranted.
May 24, 2024. C&H delivered a memorandum analyzing the Tarrant Partners LLC recommendation, including updated vote projections. The revised projections, incorporating both the ISS and Tarrant Partners LLC recommendations and the Windermere Pension Trust's public support, indicated that the Company was likely to lose the proxy contest on at least two of the three seats and was at significant risk of losing all three. The memorandum recommended immediate resumption of settlement discussions with Corvus Peak as the most favorable course of action available to the Board.
May 30, 2024. C&H delivered a comprehensive memorandum entitled "Settlement Analysis and Recommendation." This was among the most significant deliverables of the engagement. The memorandum analyzed three potential settlement configurations:
(1) One-seat concession: The Board would agree to seat one Corvus Peak nominee, with the activist withdrawing its proxy contest with respect to the remaining two nominees. The memorandum assessed this configuration as unlikely to be acceptable to Corvus Peak given the strength of its position following the ISS and Tarrant Partners LLC recommendations.
(2) Two-seat concession: The Board would agree to seat two Corvus Peak nominees, with a mutual standstill limiting Corvus Peak's future activist activity. The memorandum assessed this as the most strategically advantageous configuration for the Board, balancing the need to demonstrate responsiveness to shareholder concerns with the preservation of Board continuity and the ability to influence the composition of the reconstituted Board.
(3) Three-seat concession: The Board would agree to seat all three Corvus Peak nominees, effectively conceding the entire proxy contest. The memorandum assessed this as unnecessary given that a negotiated settlement could yield more favorable governance commitments than an outright loss at the polls.
The memorandum also included a game-theory analysis of the negotiating dynamics, a review of precedent activist settlements in the media and entertainment sector, an analysis of the impact of each configuration on the CEO search timeline, and a detailed assessment of the governance commitments the Board could extract in exchange for a negotiated settlement. The memorandum recommended that the Board pursue a negotiated two-seat settlement with the following principal terms: seating of two Corvus Peak nominees; a mutual standstill under which Corvus Peak would agree not to exceed 12% ownership or launch additional proxy contests for a period of 18 months; joint governance commitments regarding board refreshment and CEO succession; and Corvus Peak's agreement to an orderly CEO search process with Corvus representation on the search committee.
June 1, 2024. The Board adopted resolutions reopening settlement discussions with Corvus Peak and authorizing Dame Elspeth Greenvale and the Special Committee to negotiate directly with Corvus Peak on terms consistent with the C&H settlement analysis. C&H prepared the authorizing resolutions.
June 2, 2024. C&H prepared a draft Cooperation Agreement Term Sheet setting forth the proposed terms of a negotiated settlement. The term sheet offered two Board seats to Corvus Peak nominees, a mutual standstill (Corvus Peak not to exceed 12% ownership or launch additional proxy contests for a period of 18 months), joint governance commitments regarding Board refreshment and shareholder engagement, and a reset of the CEO search process with Corvus Peak representation on the reconstituted search committee. Negotiations commenced but a settlement was not consummated before the June 7 Annual General Meeting.
D. Phase 4: Annual General Meeting and Board Reconstitution (June 7 – June 17, 2024)
June 7, 2024. The Company's 2024 Annual General Meeting was held. Total shares voted were 351,280,400, representing approximately 85.1% of the 412,600,000 shares outstanding. The results of the contested director election, conducted under a plurality voting standard triggered by the contested election provisions of the Bylaws, were as follows:
Corvus Peak Nominees (Elected):
Incumbent Nominees (Not Re-elected):
All three Corvus Peak nominees were elected to the Board, and all three incumbent nominees who stood for re-election were unsuccessful. The vote margins were consistent with the projections in C&H's May 24 memorandum, which had identified the strong likelihood of a full Corvus Peak victory following the ISS and Tarrant Partners LLC recommendations and the defection of Windermere Pension Trust.
Immediately following the announcement of the vote count, a privileged email was transmitted from Nathaniel Bower to Dame Elspeth Greenvale providing legal guidance on the transition mechanics, including the seating of the new directors, the organizational meeting procedures, and the fiduciary obligations of the continuing Board members during the transition period.
June 8, 2024. C&H delivered a memorandum entitled "Post-AGM Vote Analysis and Implications," which provided a detailed analysis of the voting results, identified the principal factors that contributed to the outcome, and assessed the implications for the Board's governance posture going forward. On the same date, C&H prepared a draft press release for the Board's consideration, including a statement welcoming Malcolm Trask, Vanessa Loring, and Dr. Raymond Chu to the Board and thanking Tobias Kessler, Hugh Pemberton, and Sofia Delgado-Ríos for their service.
June 9, 2024. C&H delivered a memorandum entitled "Duties of Departing Directors." The memorandum advised Tobias Kessler, Hugh Pemberton, and Sofia Delgado-Ríos on their post-departure obligations, including the continuation of directors' and officers' insurance coverage under the Company's D&O policy, the obligation to preserve documents and records relating to their service, the requirement to cooperate with the Company in connection with any pending or threatened litigation or regulatory matters arising from their tenure, and the ongoing applicability of confidentiality obligations regarding non-public information obtained during their service.
June 10, 2024. The reconstituted Board held its first meeting following the Annual General Meeting. At this meeting, Malcolm Trask was elected Lead Independent Director. Dame Elspeth Greenvale agreed to remain as transitional Chair through September 30, 2024, after which the Board would determine permanent Chair arrangements. Committee assignments for the three newly seated directors were established. Vanessa Loring was not yet formally named Chair of the Nominating & Governance Committee at this meeting; that appointment occurred on June 17, 2024. C&H prepared and delivered draft Board resolutions for the post-AGM organizational matters.
The reconstituted Board, as constituted following the June 10 meeting, consists of the following ten voting members:
June 11, 2024. C&H delivered a memorandum entitled "D&O Insurance Implications of Board Reconstitution." The memorandum reviewed the Company's directors' and officers' liability insurance policy issued by Helmsley Indemnity Corp. (policy number HIC-DOL-2024-009347; coverage limits of $75 million per occurrence and $150 million in the aggregate; annual premium of $3.8 million; policy period January 1, 2024 through December 31, 2024). The memorandum analyzed the implications of the Board reconstitution for the D&O coverage, including: the adequacy of tail or run-off coverage for the three departing directors (Kessler, Pemberton, and Delgado-Ríos); the notice obligations triggered by the change in Board composition; and potential coverage gaps that could arise if the reconstitution was treated as a material change in the insured risk profile. The memorandum recommended that the Company promptly notify Helmsley Indemnity of the reconstitution and consider whether an extended reporting period endorsement was advisable to ensure continuing coverage for the departing directors.
June 12, 2024. C&H delivered a memorandum entitled "Board Process Integrity Post-Reconstitution." The memorandum provided guidance to the continuing directors on their fiduciary obligations in light of the reconstituted Board composition, with particular focus on the dynamics arising from the presence of three directors nominated by an activist shareholder. The memorandum addressed information barriers and recusal protocols for situations in which Corvus Peak's interests might diverge from those of the Company or its shareholders generally, the obligation of all directors — including activist-nominated directors — to act in the best interests of the Company and all of its shareholders, and the procedures for managing potential conflicts of interest in Board deliberations.
June 14, 2024. The reconstituted Board adopted resolutions tabling the CEO succession process indefinitely and dissolving the Special Committee. Priya Nair-Whitfield was to continue serving as Interim CEO for an indefinite period. The Board's quarterly retainer payment of $75,000 to C&H was replenished on the same date. C&H prepared and delivered the Board resolutions memorializing these actions.
June 15, 2024. C&H delivered a memorandum entitled "Preservation of Special Committee Records." The memorandum provided guidance on the retention and privilege preservation requirements applicable to the records generated during the Special Committee's operation, including interview notes, candidate evaluation matrices, correspondence with Hargrove Tate Partners LLC, and all C&H memoranda and advice provided to the Special Committee. The memorandum emphasized the importance of maintaining these records in their current form, subject to appropriate privilege protections, in the event that they become relevant to future litigation, regulatory inquiries, or the eventual resumption of the CEO search process.
June 16, 2024. C&H delivered a memorandum entitled "Termination of Strategic Alternatives Review — Board Considerations." The memorandum analyzed the fiduciary implications of the Board's decision to effectively shelve the strategic alternatives review, including whether the decision could be challenged as a breach of fiduciary duty if the review had identified potentially value-enhancing transactions. The memorandum also analyzed the termination provisions of the Stonebridge Crane & Co. engagement letter and identified the Company's exposure to a tail fee of approximately $21.6 million (calculated as 0.25% of the Company's estimated enterprise value of approximately $8.65 billion) if a change-of-control transaction were to be consummated within the 12-month tail period following termination of the Stonebridge engagement.
June 17, 2024. Vanessa Loring was formally named Chair of the Nominating & Governance Committee. The Board announced that it would engage new governance counsel to replace Calderwood & Harkness LLP.
E. Phase 5: Disengagement and Transition (June 21 – July 8, 2024)
June 21, 2024. C&H received formal notification from the reconstituted Board, transmitted by letter from Vanessa Loring in her capacity as Chair of the Nominating & Governance Committee, that the engagement would be terminated effective July 8, 2024.
June 25, 2024. Nathaniel Bower transmitted a formal response to Vanessa Loring acknowledging the termination of the engagement and outlining the transition procedures and timeline for final deliverables. The letter confirmed that all work product delivered during the engagement remains subject to attorney-client privilege and the work product doctrine, that the privilege belongs to the Board as the client, and that C&H would cooperate with successor counsel to ensure an orderly transition, subject to applicable privilege considerations and the Board's authorization.
July 1, 2024. C&H delivered the final work product package to the Board, consisting of:
(1) This Transition Memorandum;
(2) The Privilege Log — Materials Withheld from § 220 Production (Appendix B);
(3) The Index of Work Product Delivered to Client (Appendix A);
(4) The Open Issues Memorandum (Appendix C); and
(5) A cover letter from Nathaniel Bower to Dame Elspeth Greenvale transmitting the package and summarizing its contents.
July 2, 2024. An internal email from Nathaniel Bower to the engagement team was transmitted, setting forth the post-termination file closing procedures.
July 5, 2024. An internal Document Retention & Privilege Protocol memorandum was prepared, establishing a 7-year retention hold on the AGMG engagement file in accordance with the Firm's document retention policy.
July 8, 2024. The engagement was formally terminated. The final invoice in the amount of $312,817.00 was submitted to the Company. An internal client file closing memorandum was prepared and circulated within the Firm.
IV. Summary of Key Substantive Advice
This section provides a thematic summary of the key substantive advice rendered by C&H during the engagement. It is intended to serve as a reference for successor counsel and to provide the Board with a consolidated overview of the Firm's principal recommendations and the bases therefor.
A. Fiduciary Duties in CEO Succession
C&H advised the Board extensively on the duties of care and loyalty under Delaware law as applied to the CEO succession process. Throughout the engagement, C&H emphasized that the Board's paramount obligation was to conduct a genuine, open-ended search process that evaluated all qualified candidates — internal and external — on their merits and avoided creating an appearance of precommitment to any particular candidate.
The central piece of advice on this topic was delivered in C&H's March 25, 2024 fiduciary duties memorandum, which provided a comprehensive analysis of the applicable standards of judicial review. The memorandum concluded that the CEO succession decision, while not a traditional Revlon sale trigger, could be subjected to enhanced scrutiny by a reviewing court if the decision was perceived to entrench management or to favor a particular faction at the expense of the Company's shareholders generally. C&H's analysis was informed by the heightened context created by the concurrent activist campaign, which increased the risk that any CEO selection would be challenged as a defensive measure rather than a good-faith exercise of business judgment.
C&H's advice regarding the designation of Priya Nair-Whitfield as Interim CEO was a recurring theme. In the March 28, 2024 memorandum, C&H concluded that the designation was defensible as a necessary business continuity measure, but recommended specific safeguards to protect the Board's process:
(i) The Interim CEO title should be clearly and publicly designated as temporary, with an express